LICENSE AGREEMENT

CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO CERTAIN INFORMATION IN THIS AGREEMENT. THIS INFORMATION HAS BEEN REDACTED AND DENOTED BY ASTERISKS [***].

THIS LICENSE AGREEMENT (the “ Agreement ”) is effective as of November 22, 2006 (the “ Effective Date ”), between WYETH, acting through its Wyeth Pharmaceuticals division, a Delaware corporation with offices located at 500 Arcola Road, Collegeville, PA 19426 (“WYETH”) , and NEUROGEN CORPORATION, a Delaware corporation with offices located at 35 NE Industrial Rd., Branford, CT 06405 (“NEUROGEN”) .

NOW, THEREFORE, WYETH and NEUROGEN (hereafter “Party,” if singular or “Parties,” if plural) agree as follows:

ARTICLE I    DEFINITIONS

The following terms shall have the respective meanings set forth below:

1.1    “Affiliate” means as of any point in time and for so long as such relationship continues to exist with respect to any entity (a) any corporation or business entity of which more than fifty percent (50%) or more of the securities or other ownership interests representing the equity or voting interest are owned, controlled or held, directly or indirectly, by WYETH or NEUROGEN; or (b) any corporation or business entity which, directly or indirectly, owns, controls or holds more than fifty percent (50%) (or the maximum ownership interest permitted by law) or more of the securities or other ownership interests representing the equity or voting interest of WYETH or NEUROGEN; or (c) any corporation or business entity of which more than fifty percent (50%) or more of the securities or other ownership interests representing the equity or voting interest are owned, controlled or held, directly or indirectly, by a corporation or business entity described in (a) or (b).

1.2    “Aplindore” means the compound having CAS Registry Number 189681-71-8 and known as aplindore; aplindorum; aplindor; palindore; palindorum; palindor; 8H-1,4-dioxino[2,3-e]indol-8-one, 2,3,7,9-tetrahydro-2-[[(phenymethyl)amino]methyl]-,2(S)-,(2E)-2-butenedioate; (2S)-2-[(benzylamino)methyl]-2,3,7,9-tetrahydro-8H-1,4-dioxino[2,3-e]indol-8-one (E)-butenedioate; or DAB-452. 

1.3      “Aplindore Licensed Know-How” means the following: (a)the complete IND file for Aplindore, (b) the existing pre-clinical and clinical data relating exclusively to the Compounds, and (c) synthesis processes related exclusively to the Compounds.

1.4    “Compounds” means Aplindore and pharmaceutically acceptable salts or complexes thereof, and all salts, solvates, crystal forms, polymorphs, chelates, non-covalent complexes, hydrates, enantiomers, and racemates thereof.

1.5    “Commercially Reasonable Efforts” means, with respect to NEUROGEN and its Affiliates’ obligations, that effort customarily exerted by NEUROGEN with respect to its own products of similar scientific merit and commercial potential, taking into account, by example and without limitation, such factors as intellectual property position, the cost and length of development, regulatory risk, safety (including any adverse condition or event relating to safety) and efficacy, projected sales, reimbursement factors, parallel importation considerations, pricing, product life cycle and cost of sales and marketing, and also including the timing and promptness with which such efforts and resources would be applied.

1.6    “Control” or “Controlled” means the possession of the right to grant the license, sublicense or access hereunder to, intangible or intellectual property rights (including patent rights, trademarks, know-how, trade secrets and rights to access or cross-reference regulatory filings) without (i) violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be first required hereunder to grant the other Party such access or license or sublicense, or (ii) requiring the Party required hereunder to grant the other Party such access or license or sublicense to pay any consideration to any Third Party.

1.7    “Effective Date” means the date first written above.

1.8    “EMEA” means the European Medicines Agency and the Committee for Proprietary Medicinal Products or any successor agency thereof performing similar functions.

1.9    “FDA” means the Food and Drug Administration of the United States Department of Health and Human Services or any successor agency thereof performing similar functions.

1.10    “Field” means the treatment and/or prevention of human disease or medical conditions.

1.11    “Filing” of an NDA means the acceptance by a Regulatory Authority of an NDA for filing.

1.12    “First Commercial Sale” means, with respect to any Product, the first sale by NEUROGEN, its Affiliates or Sublicensees for end use or consumption of such Product in a country after all required approvals, including NDA Approvals, have been granted by the Regulatory Authority of such country.

1.13    “Hatch-Waxman Act” means the United States Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. Law 98-471), or any successor thereto, and any equivalent legal requirements in other countries, as in effect from time to time during the term of this Agreement.

1.14    “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time.

1.15    “IND” means an investigational new drug application (together with all subsequent submissions, supplements and amendments thereto) filed with the FDA in conformance with applicable laws and regulations, for approval to conduct human clinical investigations, and the equivalent thereof, as applicable, in jurisdictions outside the United States.

1.16    “Information” means (i) all information, materials and data, including Licensed Know-How and all other scientific, preclinical, gene sequence, chemical structure, clinical, regulatory, manufacturing, marketing, financial, or patent information, and commercial information and data, whether communicated in writing or orally or by any other method, which is provided by one Party to the other Party in connection with this Agreement or (ii) existing Know-How, and that is identified as confidential or is customarily regarded as confidential within the pharmaceutical industry.

1.17    “Know-How” means any and all know-how and data, proprietary methods, devices, written information, materials, regulatory filings, INDs and related documentation and data, manufacturing methods, technology, trade secrets, inventions, compositions, designs, formulae, discoveries, improvements, documentation, research and development reports, information, processes, protocols, clinical and safety data, statistical programs, preclinical data, research data, manufacturing data, analytical data, assays, batch records and standard operating procedures, in each case to the extent: (i) Controlled by WYETH or its Affiliates, (ii) existing as of the Effective Date, and (iii) that has actually been used by or on behalf of WYETH or its Affiliates in connection with, and is reasonably necessary, for the research, development, formulation, registration, manufacture, sale or use of Compound.

1.18    “Licensed Know-How” means any and all Know-How other than the Aplindore Licensed Know-How.

1.19    “Licensed Patent Rights” means all Patents owned or Controlled by Wyeth or any of its Affiliates during the term of this Agreement that would, but for the license granted under this Agreement, be infringed by the research, development, manufacture, use, offer for sale, sale, import or export of Compounds, including the Licensed Patent Rights listed on Schedule 1.19.

1.20    “NDA” means a new drug application, biologic license application, marketing application authorization, or similar application or submission for Regulatory Approval of a Product filed with a Regulatory Authority to obtain approval to sell commercially the Product in that country or in that group of countries, together with all subsequent submissions, supplements and amendments thereto.

1.21    “NDA Approval” means approval of an NDA by the FDA, EMEA or other applicable Regulatory Authority.

1.22      “Net Sales ” with respect to the sale of any Product means the gross amount invoiced by NEUROGEN, its Affiliates, licensees or Sublicensees (including any co-marketing partners), to Third Parties less, the following reasonable and customary deductions, in each case to the extent specifically relating to the Product for: (i) trade, quantity and cash discounts and allowances actually allowed or given; (ii) to the extent included in the invoice amount, freight, shipping insurance and other transportation expenses incurred in transporting such Product in final form to such customers; (iii) credits or refunds actually allowed for rejections, defects or recalls of such Products, outdated or returned Products, or retroactive price reductions; (iv) sales, value-added, excise taxes, tariffs and duties, and other taxes directly related to the sale (but not including taxes assessed against the income derived from such sale); (v) chargebacks granted to wholesalers; and (vi) rebates, including managed care, Medicaid and other governmental rebates, in respect of the sales of the Products. The transfer of Products by NEUROGEN or one of its Affiliates to either (a) another Affiliate of NEUROGEN or (b) a licensee or Sublicensee of NEUROGEN, shall not be considered a sale; in such cases, Net Sales shall be determined based on the invoiced sales price by the Affiliate, licensee or Sublicensee to an unrelated Third Party, less the deductions allowed under this Section 1.22. Every other commercial use or disposition of a Product by NEUROGEN or its Affiliates, licensees or Sublicensees in barter or other transactions (other than dispensing of reasonable and customary quantities of promotional samples) shall be considered a sale of such Product at the weighted average Net Sales price for such Product during the preceding quarter. 

With respect to sales of a combination product (a Product containing as its active ingredients Product and one or more other therapeutically or prophylactically active ingredients priced in a single package), for the purpose of determining Royalties, Net Sales shall be calculated by multiplying the total Net Sales of such combination product by the fraction A/A+B where A is the actual invoice price of the Product in the same dosage amount in the applicable country if sold separately and B is the sum of the actual invoice prices of all other active ingredients or products in the same dosage amount in the combination product in the applicable country if sold separately during the applicable quarter. If A or B cannot be determined because values for the Product or the other active ingredients sold alone are not available in a particular country then WYETH and NEUROGEN will discuss an appropriate allocation for the fair market value of the Product and other active ingredients in the combination product to determine Net Sales for such combination product. The deductions set out in the paragraph above in this Section 1.22 will be applied in calculating Net Sales for a combination product.

1.23    “Patents” means patent applications (including provisional applications, certificates of invention and applications for certificates of invention, continuations, divisionals and continuations-in-part), and all patents issuing therefrom and foreign equivalents thereof (including all substitutions, reissues, renewals, reexaminations, supplementary protection certificates, extensions, registrations and confirmations of any of the foregoing patents and the like).

1.24    “Phase II Clinical Trial” means a human clinical trial that is intended to gain evidence of the efficacy of a Product for a particular indication or indications in human subjects with the disease or indication under study including a trial that would satisfy the requirements of 21 C.F.R. 312.21(b), as may be amended or the foreign equivalent thereof.

1.25    “Phase III Clinical Trial” means a pivotal human clinical trial that is intended to gain evidence to establish the efficacy and safety of a Product as a basis for an NDA including a trial that would satisfy the requirements of 21 C.F.R. 312.21(c), as may be amended or the foreign equivalent thereof.

1.26    “Product” means a pharmaceutical product, formulation or preparation for sale and therapeutic use in humans containing one or more Compounds as a pharmaceutically active ingredient(s).

1.27    “Regulatory Approval” means any NDA Approvals and other approvals, licenses, registrations, or authorizations granted or issued by any national, regional, state or local governmental entities and agencies, necessary for the development, registration, manufacture, packaging, labeling, use, storage, transport, export, import, clinical testing, promotion or sale of the Products in a country, including pricing and reimbursement approvals to the extent the applicable Regulatory Authorities in such country require a pricing or reimbursement approval prior to commercialization of a Product in such country.

1.28    “Regulatory Authority” means any applicable government regulatory authority involved in granting approvals for the manufacturing, marketing, reimbursement and/or pricing of a Product in the Territory, including, in the United States, the FDA.

1.29    “Sublicensee” means a Third Party to whom NEUROGEN grants a license or sublicense to develop, make, use, or sell the Compounds or Products.

1.30    “Territory” means worldwide (all of the countries in the world, and their territories and possessions of any nature or category).

1.31    “Third Party” means an entity other than WYETH and its Affiliates, or NEUROGEN and its Affiliates.

1.32    “U.S. GAAP” means generally-accepted accounting principles in the United States.

1.33    “Valid Claim” means an issued claim within the scope of the Licensed Patent Rights, including any extensions thereof and supplemental protection certificates, to the extent such claims have not been disclaimed, revoked or held invalid by a final unappealable decision of a court or governmental agency of competent jurisdiction, and which claims are otherwiseenforceable. “Valid Claim” also means any claim within a pending application for a Patent included within the scope of the Licensed Patent Rights to the extent the invention(s) described in the claims of such application have not been abandoned without being refiled in another application or finally rejected by an administrative agency action from which no appeal can be taken, such that the claim at issue has been pending for less than five (5) years. If a claim of a patent application that ceased to be a Valid Claim due to the passage of time set forth in the preceding sentence later issues as a part of a Patent described above, then it will again be considered a Valid Claim effective as of the issuance of such patent.

1.34    Interpretation.

(a)    Whenever any provision of this Agreement uses the term “including” (or “includes”), such term shall be deemed to mean “including without limitation” and “including but not limited to” (or “includes without limitations” and “includes but is not limited to”) regardless of whether the words “without limitation” or “but not limited to” actually follow the term “including” (or “includes”);

(b)    “Herein,” “hereby,” “hereunder,” “hereof” and other equivalent words shall refer to this Agreement in its entirety and not solely to the particular portion of this Agreement in which any such word is used;

(c)    All definitions set forth herein shall be deemed applicable whether the words defined are used herein in the singular or the plural;

(d)    Wherever used herein, any pronoun or pronouns shall be deemed to include both the singular and plural and to cover all genders;

(e)    The recitals set forth at the start of this Agreement, along with the Attachments to this Agreement, and the terms and conditions incorporated in such recitals and Attachments shall be deemed integral parts of this Agreement and all references in this Agreement to this Agreement shall encompass such recitals and Attachments and the terms and conditions incorporated in such recitals and Attachments; provided, that in the event of any conflict between the terms and conditions of this Agreement and any terms and conditions set forth in the recitals or Attachments, the terms of this Agreement shall control;

(f)    In the event of any conflict between the terms and conditions of this Agreement and any terms and conditions that may be set forth on any order, invoice, verbal agreement or otherwise, the terms and conditions of this Agreement shall govern;

(g)    The Agreement shall be construed as if both Parties drafted it jointly, and shall not be construed against either Party as principal drafter;

(h)    Unless otherwise provided, all references to Sections, Articles and Attachments in this Agreement are to Sections, Articles and Attachments of and to this Agreement;

(i)    All references to days, months, quarters or years are references to calendar days, calendar months, calendar quarters or calendar years;

(j)    Any reference to any federal, national, state, local or foreign statute or law shall be deemed to also refer to all rules and regulations promulgated thereunder, unless the context requires otherwise; and

(k)    Wherever used, the word “shall” and the word “will” are each understood to be imperative or mandatory in nature and are interchangeable with one another.

ARTICLE II    LICENSES

2.1    License Grant.   (a) WYETH hereby grants to NEUROGEN and its Affiliates an exclusive license (including as to WYETH), with the right to grant sublicenses, under the Licensed Patent Rights (subject to WYETH’s retained right set forth below), solely for the purposes of research, making, having made, using, developing, registering, offering to sell, selling, importing and exporting and distributing Products and Compounds in the Field in the Territory. WYETH retains the nonexclusive right to make and use Compounds for internal research purposes only, provided, however, under no circumstances shall WYETH’s retained right be used for administering the Compounds to animals or humans, nor to provide Compounds to Third Parties.

(b)   WYETH hereby grants to NEUROGEN and its Affiliates a nonexclusive license, with the right to grant sublicenses, to the Licensed Know-How solely for the purposes of research, making, having made, using, developing, registering, offering to sell, selling, importing and exporting and distributing Products and Compounds in the Field in the Territory.

(c)   WYETH hereby grants to NEUROGEN and its Affiliates an exclusive license (including as to WYETH), with the right to grant sublicenses, under the Aplindore Licensed Know-How (subject to WYETH’s retained right set forth below) solely for the purposes of research, making, having made, using, developing, registering, offering to sell, selling, importing and exporting and distributing Products and Compounds in the Field in the Territory. Wyeth retains the nonexclusive right to make and use Compounds for internal research purposes only, provided, however, under no circumstances shall WYETH’s retained right be used for administering the Compounds to animals or humans, nor to provide Compounds to Third Parties.

ARTICLE III    IND AND TECHNOLOGY TRANSFER; COMPOUND SUPPLY

3.1    Access to Regulatory Filings.

Consistent with the requirements of 21 CFR 312, WYETH will provide to NEUROGEN the complete IND file for Aplindore (“Original IND”) including all supplements to the Original IND, all regulatory files and FDA correspondence related thereto, and all records and reports required to be kept that are necessary to effect the transfer of the IND and allow NEUROGEN to pursue development of the Compound (but excluding, for the avoidance of doubt, records of WYETH that are not necessary for such purposes such as confidential personnel records or facility design records). Within ten (10) days after NEUROGEN confirms in writing the receipt of the Original IND from WYETH, WYETH will execute and deliver a letter to the FDA authorizing the transfer of ownership of the Original IND to NEUROGEN. NEUROGEN will promptly thereafter take all further actions that are necessary to transfer ownership of the Original IND for Aplindore to NEUROGEN. WYETH shall use reasonable and diligent efforts to ensure that it has located and provided to NEUROGEN all such documentation related to the Original IND and all other Licensed Know-How and Aplindore Licensed Know-How and WYETH shall promptly convey to NEUROGEN any such documentation or other Licensed Know-How, or Aplindore Licensed Know-How that WYETH locates after the Effective Date. WYETH also agrees to provide reasonable assistance to ensure a prompt and complete transfer by the FDA of ownership of the IND to NEUROGEN. Following the effective transfer of ownership of the IND to NEUROGEN, NEUROGEN will assume sole regulatory responsibility for development of Aplindore,

3.2    Technology Transfer.

(a)    WYETH shall use reasonably diligent efforts to transfer the Aplindore Know-How and all Licensed Know-How   within ninety (90) days of the Effective Date. The later of the date on which WYETH has made such transfer or the date of the transfer of the Compound Inventory pursuant to Section 3.3 is hereinafter referred to as the “Transfer Completion Date” .

(b)    In addition, (i) [***], upon NEUROGEN’s request, WYETH shall provide other reasonable assistance to NEUROGEN [***] in NEUROGEN’s Compound manufacturing and development activities which assistance shall include [***] (ii) [***] regulatory filings or CMC (Chemistry, Manufacturing and Controls) related issues [***]. NEUROGEN shall pay WYETH for such assistance based on [***] days of receipt of WYETH’s invoice.

3.3    Supply of Existing Compound. Within forty five (45) days after the Effective Date, WYETH shall re-test, re-certify (to standards acceptable for human testing in Phase II Clinical Trials) and ship to Neurogen or Neurogen’s designee all of its existing inventory of cGMP Compound, and formulated clinical supplies of Compound (if any) (collectively, the “Compound Inventory”). Within thirty (30) days of receipt from WYETH of the Compound Inventory, NEUROGEN shall pay WYETH four hundred thousand dollars ($400,000) based on an estimated quantity of at least 1.5 kilograms. If the Compound Inventory is less than 1.5 kilograms, NEUROGEN’s payment shall be prorated based on the actual amount transferred.

ARTICLE IV    RESEARCH AND DEVELOPMENT; DILIGENCE

4.1    Research and Development Obligations

[ ^*** ] Confidential treatment requested by Neurogen Corporation.

4.2    Reports. NEUROGEN will keep WYETH reasonably apprised of its and its Sublicensees’ development, regulatory and commercialization activities related to Compounds or Products by providing WYETH with summary reports on or about June 30 and December 31 of each year, following the year in which the Effective Date occurs.

4.3    Manufacture. Other than as set forth in Section 3.3, WYETH shall have no responsibility for the manufacture of Compounds and Products for development, use and sale by NEUROGEN and its Sublicensees in the Territory.

ARTICLE V    CONFIDENTIALITY

5.1    All Information disclosed by a Party (the “Disclosing Party”_) to the other Party (the “Receiving Party”) under this Agreement, shall, for the term of this Agreement and for five (5) years thereafter, be maintained in confidence by the Receiving Party and, without the prior written consent of the Disclosing Party, shall not be disclosed to any Third Party or used for any purpose except as expressly permitted in this Agreement including this Article V. This nondisclosure and non-use obligation shall not apply to Information that:

(a)    is known by the Receiving Party at the time of its receipt, as documented by business records, and not through a prior disclosure by the Disclosing Party;

(b)    is properly in the public domain;

(c)    is subsequently disclosed to the Receiving Party by a Third Party who may lawfully do so and is not under an obligation of confidentiality to the Disclosing Party;

5.2   Permitted Disclosure of Information. Notwithstanding anything to the contrary contained in Section 5.1, NEUROGEN may disclose such Information:

[ ^*** ] Confidential treatment requested by Neurogen Corporation.

          (b)             to its permitted Sublicensees, agents, consultants, Affiliates and/or other Third Parties to the extent reasonably necessary for the research and development, manufacturing, registration and/or marketing of a Product or Compound (or for such parties to determine their interest in performing such activities) in accordance with this Agreement on the condition that such disclosure may be only to the extent reasonably necessary for such activities and that such Third Parties agree to be bound by confidentiality and non-use obligations at least as restrictive as those contained within this Agreement; provided that the term of confidentiality for such Third Parties shall be no less than five (5) years.

5.3   Publication. The Parties may each have an interest from time to time in publishing clinical results or other research or development advancements involving Compounds or Products to obtain recognition within the scientific community and to advance the state of scientific knowledge.  Consequen