Exhibit 10.1

	CONFIDENTIAL TREATMENT REQUESTED
	UNDER 17 C.F.R §§ 200.80(b)4, AND 240.24b-2

 

LICENSE AGREEMENT

THIS LICENSE AGREEMENT is made and entered into effective as of March 7, 2007 (the “Effective Date”), by and between Atlantic Healthcare (UK) Limited (registered number 6025726), whose registered office is MoFo Notices Limited, 7 th  Floor, City Point, One Ropemaker Street, London EC2Y 9AW (proposed to be renamed [***] Limited) (“Atlantic”) and Isis Pharmaceuticals, Inc. , having principal offices at 1896 Rutherford Road, Carlsbad, CA 92008 (“Isis”).   Atlantic and Isis each may be referred to herein individually as a “Party,” or collectively as the “Parties.”

WHEREAS , Isis wishes to license to Atlantic the drug known as Alicaforsen (also known as ISIS 2302) so that Atlantic may develop and commercialize Alicaforsen Products, on the terms set forth below;

WHEREAS, Isis wishes to collaborate with Atlantic to discover, develop, and commercialize Second Generation ICAM-1 Products (as defined below);

WHEREAS , Isis is willing to grant Atlantic a license to develop and commercialize Second Generation ICAM-1 Products on the terms set out below;

NOW, THEREFORE, the Parties do hereby agree as follows:

ARTICLE 1 - DEFINITIONS

Capitalized terms used in this Agreement and not otherwise defined herein have the meanings set forth in Appendix 1.

ARTICLE 2 -
ALICAFORSEN GRANT OF RIGHTS

Section 2.1      Alicaforsen License Grant.

2.1.1       Subject to the terms and conditions of this Agreement, Isis hereby grants to Atlantic:

(i)            an exclusive, worldwide license under the Alicaforsen Patents and the ICAM-1 Specific Patents solely to develop, make, have made, use, sell, offer for sale, have sold and import Alicaforsen API and Alicaforsen Products. The license granted to Atlantic under this Section 2.1.1(i) is sublicensable only in connection with a license of rights to an Alicaforsen Product to a Third Party for the continued development, manufacture and commercialization of that Alicaforsen Product in accordance with the terms of this Agreement; and

(ii)           a non-exclusive, worldwide license under the Excluded Manufacturing IP solely to make and have made Alicaforsen API. The license granted to Atlantic under this Section 2.1.1(ii) is sublicensable to a Third Party for the manufacture of Alicaforsen API in accordance with the terms of this Agreement.

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2.1.2       The Parties agree that Atlantic shall have no right to exercise the license right granted to it under Section 2.1.1(ii) to make and have made Alicaforsen API unless and until it is permitted to do so under the terms of the Manufacturing Agreement.

Section 2.2      Data Transfer .

2.2.1       Promptly after the Effective Date, Isis will transfer and assign to Atlantic all of Isis’ right, title and interest in and to (i) the Regulatory Documentation, data, results and information related to testing and studies of Alicaforsen (including clinical data, analytical test results and non-clinical pharmacology and safety data) in the possession of Isis on the Effective Date to the extent such data, results and/or information is necessary for the continued development and commercialization of Alicaforsen Products (“Isis Data”), and (ii) the know how which is owned by or licensed to Isis at the Effective Date that relates to the formulation of Alicaforsen Product from Alicaforsen API, but excluding the Excluded Manufacturing IP (the “Isis Manufacturing Know How”).

ARTICLE 3 -
ALICAFORSEN PRODUCT DEVELOPMENT

Section 3.1      Development/Commercialization/Regulatory Responsibilities.  Unless Isis exercises its reversion rights under Section 11.2, Atlantic is fully responsible for the continued development and commercialization of Products and undertakes to Isis to use Commercially Reasonable Efforts to develop Products for all commercially reasonable indications, including Alicaforsen Products for the treatment of pouchitis and to make its First Commercial Sale of an Alicaforsen Product for the treatment of pouchitis in the USA as soon as practicable.  Atlantic hereby assumes all regulatory responsibilities in connection with Products, including sole responsibility for all Regulatory Documentation and for obtaining all Regulatory Approvals.  Atlantic will comply with all Applicable Laws in connection with the development and commercialization of Products.

Section 3.2      Joint Development Committee.

3.2.1       To promote the successful development of the Products, the Parties will establish a Joint Development Committee (the “JDC”) which will be comprised of one Isis representative and one or more representatives of Atlantic (“Committee Members”).  A Party may replace any of its Committee Member(s) by notice to the other Party.  Each Committee Member shall be appropriately qualified and experienced in order to make a meaningful contribution to JDC meetings.  The purpose of the JDC is to provide a forum for the Parties to share information and knowledge on the on-going research and development of the Alicaforsen Products, including sharing scientific direction and data, discussing the current development and regulatory status of Alicaforsen Products, discussing regulatory or quality assurance issues in relation to the Alicaforsen API and coordinating the conduct of the Second Generation ICAM-1 Research Program in accordance with the Agreement.  The JDC shall conduct its discussions in good faith with a view to operating to the mutual benefit of the and in furtherance of the successful marketing of Alicaforsen Products.  The JDC shall meet at Isis’ corporate offices located in Carlsbad, California, USA where such meeting is not held by video-conference or telephone conference, as often as the Committee Members may determine but in any event not

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less than once per calendar quarter.  Each JDC meeting shall be chaired by a Committee Member nominated by Atlantic.

3.2.2       The JDC will continue in existence for three years after the Effective Date or until completion of the Second Generation ICAM-1 Research Program, which ever is the later, subject to extension by mutual agreement of the Parties.

Section 3.3      Safety Database .

3.3.1       Isis maintains a database that includes information regarding the tolerability of its drug compounds, individually and as a class, including information discovered during pre-clinical and clinical development (the “Isis Database”).  In an effort to maximize understanding of the safety profile and pharmacokinetics of Isis compounds, Atlantic will cooperate in connection with populating the Isis Database.  Atlantic will promptly provide Isis with copies of toxicology, pharmacokinetic and serious adverse event reports related to each Alicaforsen Product.  In addition, in connection with any reported serious adverse event, Atlantic will provide Isis (promptly following such event and prior to any communication with a Regulatory Authority or ethics committee) in a mutually acceptable format, the following patient data where it is reasonably available to Atlantic once informed of a serious adverse event and any other data Atlantic reasonably deems relevant to the Isis Database: (a) basic statistics (including age, race, gender, weight, height); (b) medical history; (c) concurrent medication usage; (d) particulars of the event (verbatim term, MedDRA term & system organ class, onset date, resolution date, relation to Alicaforsen Product, severity/seriousness, outcome); (e) dosing history (dates, quantity of Alicaforsen Product administered, method of administration); (f) chemistry and hematology lab tests; and (g) ocular pressure.  For clarity, Atlantic shall be responsible for all safety and/or pharmacovigilance matters relating to or arising from the development and commercialization of the Alicaforsen Products and for making all adverse event reports to the relevant Regulatory Authorities at the times and in the manner it deems appropriate to comply with all Applicable Laws.

Section 3.4      Reports. Atlantic agrees to keep Isis informed with respect to activities and progress with the further development and commercialization of Alicaforsen Products, and agrees to provide to the JDC every six months a summary of such activities and progress.

Section 3.5      Supply of Existing Alicaforsen API.

3.5.1       Isis agrees to supply Atlantic with a quantity of Alicaforsen API that is in Isis’ possession as of the Effective Date, reasonably sufficient to obtain Regulatory Approval for an Alicaforsen Product for pouchitis (but not to exceed [***] kg) in the USA [***], in accordance with a clinical trial program designed by Atlantic and discussed by the JDC.

3.5.2       Atlantic and Isis agree that, to the extent available from the stocks of Alicaforsen API in Isis’ possession as of the Effective Date, any other quantities of Alicaforsen API required by Atlantic for the development of Alicaforsen Product may be purchased from Isis in a minimum order size of [***] kg at a cost of [***] Dollars ($[***]) per gram until such stocks have been exhausted; once such existing stocks of Alicaforsen API with greater than [***]

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months of shelf life have been exhausted, additional quantities of Alicaforsen API may be acquired from Isis on the terms of Section 3.6.

3.5.3       All Alicaforsen API ordered by Atlantic pursuant to Section 3.5 will be shipped by Isis to Atlantic, EXW (Incoterms 2000) Isis’ premises, to the destination specified in writing by Atlantic.  All transportation and insurance costs are the sole responsibility of Atlantic.  Isis warrants that each such amount of Alicaforsen API supplied by Isis pursuant to Section 3.5; (i) will have been manufactured in accordance with cGMP, (ii) meets the specification for Alicaforsen API set out in the Regulatory Documentation existing at the Effective Date, (iii) have at least [***] months shelf life remaining when delivered, and will be accompanied by a certificate of analysis.

3.5.4       The Parties agree that any supply of Alicaforsen API under this Section 3.5 will be subject to and in accordance with the terms of the Manufacturing Agreement (as defined below).

Section 3.6      Commercial Supply and Manufacturing of Alicaforsen API.

3.6.1       Following the Effective Date, at Atlantic’s election, Isis and Atlantic will negotiate in good faith, agree and execute a separate written agreement for the commercial supply and manufacture of Alicaforsen API by Isis for Atlantic (the “Manufacturing Agreement”) such Manufacturing Agreement to be entered into within [***] of the Effective Date.  Such Alicaforsen API will be manufactured in accordance with cGMP, applicable Alicaforsen API specifications, and the terms and conditions of the Manufacturing Agreement, which will include, among other standard commercial terms, Isis’ agreement to maintain a drug master file for Alicaforsen API (“DMF”) and Atlantic’s right to reference the DMF in its Regulatory Documentation.  Should: (a) a Regulatory Authority in a particular jurisdiction in which Isis has not filed a DMF, or (b) a Regulatory Authority which does not allow cross-referencing to an existing DMF, request information regarding Alicaforsen API and its manufacture contained in a DMF somewhere in the world, Isis undertakes to (i) provide such information directly on behalf of Atlantic to the applicable Regulatory Authority, or if not legally possible (ii) consult with Atlantic in good faith regarding the appropriate response to such inquiry and to give Atlantic (and its relevant sub-licensee(s)) reasonable assistance with answering that Regulatory Authority’s questions, save that should a Regulatory Authority request Isis’s proprietary information relating to the Alicaforsen API or its manufacture outside of the definition of Isis Manufacturing Know-How Isis shall not be obliged to share such information with Atlantic (or its relevant sub-licensee(s)) and shall respond directly to the Regulatory Authority on Atlantic’s or the relevant sublicensee’s behalf. Notwithstanding Section 2.1.1 and 2.2.1 above, while Isis is manufacturing Alicaforsen API for Atlantic under the Manufacturing Agreement, Isis will transfer, at Atlantic’s written request and subject to the confidentiality obligations under Article 8, analytical methods within Excluded Manufacturing IP necessary to properly characterize and release the Alicaforsen API.

3.6.2       Atlantic agrees that a minimum order size of [***] kg at a price of [***] Dollars ($[***]) per gram will apply to all purchases of Alicaforsen API under the Manufacturing Agreement.

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3.6.3       Isis and Atlantic agree that Atlantic shall only be permitted to exercise its license rights under Section 2.1.1(ii) to manufacture Alicaforsen API in the event either that Isis is unable to supply Atlantic with its requirements of Alicaforsen API for [***] successive calendar quarters or that Isis fails to supply Atlantic with Alicaforsen API that meets the agreed specification therefor for [***] successive calendar quarters or because Atlantic is otherwise entitled to terminate the Manufacturing Agreement for cause and there is not another available supplier who can produce Alicaforsen API without access to the Excluded Manufacturing IP.  For clarity such permission shall not arise simply by virtue of expiration of either this Agreement or the Manufacturing Agreement.

Section 3.7      Product Manufacturing Responsibility.   Except as otherwise provided in this Agreement, Atlantic acknowledges and agrees that it is solely responsible for the manufacturing of Alicaforsen Product, including management of the overall manufacturing strategy and tactics, formulation, contract manufacturer selection for finished Product, associated audits, and stability testing.

ARTICLE 4 -
SECOND GENERATION ICAM-1 PRODUCTS

Section 4.1      Second Generation ICAM-1 ASO Drug Candidate License.

4.1.1       Candidate Pool.   Immediately following receipt of a notice from Atlantic requesting Isis to commence the work (such notice to be given within [***] of the grant of Regulatory Approval in the USA of an Alicaforsen Product for the treatment of pouchitis, but in no event will such notice be given later than [***] after the Effective Date), Isis agrees to, at its sole cost and expense, commence in vitro screening in accordance with a written work plan to be mutually agreed upon by both Parties (the “Work Plan”), to attempt to discover between [***] and [***] Second Generation ICAM-1 ASO Drug Candidates (the “Candidate Pool”) (the “Second Generation ICAM-1 Research Program”).  Isis agrees to use Commercially Reasonable Efforts and the Quality Standard when discharging any of its obligations under the Work Plan and will keep or cause to be kept written laboratory notebooks and other records and reports of its progress with the Work Plan and its activities under the Work Plan in sufficient detail and in a good scientific manner for all purposes including patent purposes.  Isis will report its progress with the Second Generation ICAM-1 Research Program to the JDC.

4.1.2       Candidate Selection.   Isis will provide Atlantic with written notice and any supporting in vitro data at such time as the Candidate Pool is available for consideration by Atlantic (the “Notice”). Atlantic must notify Isis, in writing within [***] following the Notice, that (i) it has elected to develop a Second Generation ICAM-1 Product and nominate one of the candidates from the Candidate Pool as the lead Second Generation ICAM-1 ASO Drug Candidate, and (ii) it agrees to promptly establish, in good faith, a significant development program pursuant to a written development plan to be set by Atlantic (the “Second Generation Development Plan”).  If Atlantic fails to elect to develop a Second Generation ICAM-1 Product using the Second Generation ICAM-1 ASO Drug Candidates under this Article 4 neither Isis nor Atlantic will have any further obligations under this Agreement with regard to the Candidate Pool, any Second Generation ICAM-1 ASO Drug Candidate or any Second Generation ICAM-1 Product.  If, despite Isis’ Commercially Reasonable Efforts, Isis fails to produce a Candidate

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Pool that is reasonably acceptable to Atlantic, neither Isis nor Atlantic will, for a period of three years following the date of the Notice, take any steps to research another anti-sense oligonucleotide drug candidate designed to directly inhibit ICAM-1 without the prior consent of the other Party.

4.1.3       License Grant. If Atlantic so informs Isis of such election and agreement under Section 4.1.2 above, then Isis will grant to Atlantic, subject to and upon the same terms and conditions of this Agreement:

(x) an exclusive license under the ICAM-1 Specific Patents solely to develop, make, have made, use, sell, offer for sale, have sold and import Second Generation ICAM-1 ASO Drug Candidates and Second Generation ICAM-1 Products;

(y) an exclusive license under the Second Generation ICAM-1 Product-Specific Patents solely to develop, make, have made, use, sell, offer for sale, have sold and import Second Generation ICAM-1 ASO Drug Candidates and Second Generation ICAM-1 Products; and

(z) a non-exclusive worldwide license under the Isis Core Technology Patents solely to develop, make, have made, use, sell, offer for sale, have sold and import Second Generation ICAM-1 ASO Drug Candidates and Second Generation ICAM-1 Products.

The licenses granted to Atlantic under this Section 4.1.3 are sublicensable only in connection with a license of a Second Generation ICAM-1 Product to a Third Party for the continued development and commercialization of Second Generation ICAM-1 Products in accordance with the terms of this Agreement.

4.1.4       Data Transfer. In addition, promptly following Isis’ license grants to Atlantic under Section 4.1.3 above, Isis will transfer and assign to Atlantic all of Isis’ right, title and interest in and to all data, results, and information related to testing and studies of the Second Generation ICAM-1 ASO Drug Candidates (including analytical test results and non-clinical pharmacology and safety data) in the possession of Isis (the “Second Generation Isis Data”) to the extent such data, results and/or information is necessary for the continued development and commercialization of Second Generation ICAM-1 Products; but excluding any Excluded Isis IP.

4.1.5       Should Atlantic elect to develop Second Generation ICAM-1 Products pursuant to Section 4.1.2, Atlantic shall be fully responsible for the development and commercialization of Second Generation ICAM-1 Products and undertakes to use Commercially Reasonable Efforts to develop a Second Generation ICAM-1 Product and to make its First Commercial Sale of a Second Generation ICAM-1 Product in a Major Market as soon as practicable following its election, in accordance with Section 3.1 above.  Atlantic will develop such Products on the terms set out in Section 3.3 and Section 3.4.  Should Atlantic elect to have Second Generation ICAM-1 ASO Drug Candidate manufactured by Isis, Isis and Atlantic will conduct a negotiation in good faith, agree and execute a separate written agreement for the supply of Second Generation ICAM-1 ASO Drug Candidates for use in the development and

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commercialization of Second Generation ICAM-1 Products within [***] of Atlantic notifying Isis that it wishes Isis to so supply.

Section 4.2      Exclusive Partner.

4.2.1       For a period of [***] following the Effective Date or until the [***] period following the delivery of the Notice set out in Section 4.1.2 has expired (which ever is the later) (the “Period”), and thereafter during the Term of this Agreement if Atlantic elects to develop a Second Generation ICAM-1 Product under Section 4.1.2 within the Period, Isis will not develop or commercialize itself, and will not permit or grant any license under the Alicaforsen Patents, ICAM-1 Specific Patents, Second Generation ICAM-1 Product-Specific or Isis Core Technology Patents to a Third Party to develop or commercialize, any antisense drug compound designed to directly inhibit ICAM-1. Notwithstanding the foregoing, Isis retains the right to use antisense compounds modulating ICAM-1 or to transfer such antisense compounds to Third Parties for non-commercial target validation purposes, and such activities will not be interpreted as a breach of this Agreement.  Isis’ obligations under this Section 4.2.1 will automatically terminate in the event of a Discontinuance.

4.2.2       To avoid confusion in the marketplace, during the term of this Agreement, Atlantic agrees not to develop or commercialize any product designed to directly inhibit ICAM-1 other than the Product(s), and will not permit or grant any license under the Alicaforsen Patents, ICAM-1 Specific Patents, or Second Generation ICAM-1 Product-Specific Patents to a Third Party to develop or commercialize any such product other than the Product(s).

ARTICLE 5 -
BONA FIDE THIRD PARTY LICENSE OFFERS

Section 5.1      Bona Fide Third Party License Offers.

5.1.1       If, following the earlier to occur of a [***] or [***], a Third Party makes an offer to Atlantic to take a Sublicense under the Alicaforsen Patents, ICAM-1 Specific Patents, Second Generation ICAM-1 Product-Specific Patents and/or the Isis Core Technology Patents in order to develop and commercialize a Product in [***] that Atlantic is developing for an alternative indication, for an indication for which Atlantic is not then developing a Product, Atlantic will promptly inform Isis of its receipt of this offer and whether it considers this offer to be a bona fide offer on commercial terms which are reasonably acceptable to Atlantic.  If Atlantic considers the offer to be a bona fide offer on commercial terms which are reasonably acceptable to Atlantic, Atlantic will, in good faith, consider such offer and within [***] from receipt of such a bona fide offer Atlantic will either:

(i) notify Isis that it reasonably believes that it is unlikely that Atlantic will, within the period of [***] from the date of receipt of such offer, initiate development of a Product for the indication in question itself; in which case it will then promptly commence good faith negotiation of a definitive written license agreement with such Third Party pursuant to which the Third Party will be granted the rights under the Alicaforsen Patents, ICAM-1 Specific Patents, Second Generation ICAM-1 Product-Specific Patents and/or the Isis Core

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Technology Patents (as applicable) to develop, make and commercialize a Product in [***] for the indication in question; or

(ii) notify Isis that it reasonably believes that it is likely that Atlantic will, within the period of [***] from the date of receipt of such offer, initiate development of a Product for the indication in question itself; in which case it may decline such Third Party licensing offer and, if it declines such offer, will use its Commercially Reasonable Efforts to initiate development of a Product in [***] for the indication in question within [***] of the date of this notice.

5.1.2       If a Third Party makes an offer to Atlantic to take a Sublicense under the Alicaforsen Patents, ICAM-1 Specific Patents, Second Generation ICAM-1 Product-Specific Patents and/or the Isis Core Technology Patents in order to develop and commercialize a Product in [***] for an indication for which Atlantic is not then developing a Product Atlantic will promptly inform Isis of its receipt of this offer and whether it considers this offer to be a bona fide offer on commercial terms which are reasonably acceptable to Atlantic.  If Atlantic considers the offer to be a bona fide offer on commercial terms which are reasonably acceptable to Atlantic, Atlantic will, in good faith, consider such offer and within [***] from receipt of such a bona fide offer Atlantic will either:

(i) notify Isis that it reasonably believes that it is unlikely that Atlantic will, within the period of [***] from the date of receipt of such offer, initiate [***]; in which case it will promptly commence good faith negotiation of a definitive written license agreement with such Third Party pursuant to which the Third Party will be granted the rights under the Alicaforsen Patents, ICAM-1 Specific Patents, Second Generation ICAM-1 Product-Specific Patents and/or the Isis Core Technology Patents (as applicable) to develop, make and commercialize a Product in [***] for the indication in question; or

(ii) notify Isis that it reasonably believes that it is likely that Atlantic will, within the period of [***] from the date of receipt of such offer, initiate [***]; in which case it may decline such Third Party licensing offer and if it declines such offer will [***] of the date of this notice.

ARTICLE 6 -
FINANCIAL PROVISIONS

Section 6.1      Up-Front Payment by Atlantic.

6.1.1       Upon the execution of the Subscription and Share Exchange Agreement (defined below), Atlantic will pay an up-front license fee of $[***] to Isis which shall be satisfied (in full) by the issue to Isis of [***] ordinary shares in Atlantic’s share capital, which shall then be immediately exchanged for [***] ordinary shares in Atlantic Healthcare’s share capital pursuant to the terms of the subscription and share exchange agreement (the “ Subscription and Share Exchange Agreement ”), which will be executed by and between Isis,

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Atlantic, and Atlantic Healthcare on or before March 16, 2007 (the “SSEA Execution Date”); provided, however,

(a)  if at any time during the Anti-Dilution Protection Period (to be defined in the Subscription and Share Exchange Agreement) Atlantic Healthcare issues any shares in the capital of Atlantic Healthcare to current shareholders (determined by reference to the date of this Agreement) at a subscription price per share of less than £[***], then Isis shall have the right to subscribe for additional AH Shares (to be defined in the Subscription and Share Exchange Agreement) at [***] in the share capital of Atlantic Healthcare (for which purpose all shares in Atlantic Healthcare previously issued to Isis pursuant to this Agreement shall be deemed held by Isis, irrespective of whether Isis remains the registered holder thereof) had such new shares so issued to existing shareholders [***], as further provided for in the Subscription and Share Exchange Agreement; and

(b) if at any time during the Anti-Dilution Protection Period Atlantic Healthcare issues any shares in the capital of Atlantic Healthcare to [***] (to be defined in the Subscription and Share Exchange Agreement)  and/or [***] (to be defined in the Subscription and Share Exchange Agreement) beyond [***] shares on terms not offered to other shareholders (including Isis), then Isis will have the right to participate on the same terms as [***] (as the case may be) so as to maintain its pro-rata shareholding in Atlantic Healthcare (for which purpose all shares in Atlantic Healthcare previously issued to Isis pursuant to this Agreement shall be deemed held by Isis, irrespective of whether Isis remains the registered holder thereof) as further provided for in the Subscription and Share Exchange Agreement.

6.1.2   In no event will Atlantic issue shares to Isis that exceed the Equity Cap.

6.1.3   If the Subscription and Share Exchange Agreement is not executed by Isis, Atlantic, and Atlantic Healthcare on or before [***], this Agreement will automatically terminate without any liability to either Party.

Section 6.2      Milestone Payments by Atlantic.

6.2.1       Atlantic will pay to Isis the relevant milestone payment in cash or in an equivalent amount of Atlantic Equity Securities (subject to the written consent of Atlantic Healthcare Limited and in accordance with the terms of the Subscription and Share Exchange Agreement), at Atlantic’s sole discretion, not more than 60 days after achievement by Atlantic, its Affiliates or a sublicensee, of each of the applicable events, as follows:

Event		Payment
[***]		US $[***]
[***]		US $[***]

 

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6.2.2 Notwithstanding the foregoing, in no event will Atlantic issue Atlantic Equity Securities to Isis that exceed the Equity Cap. To the extent any milestone payment of Atlantic Equity Securities will cause Isis’ aggregate equity ownership in Atlantic to exceed the Equity Cap, Atlantic will issue to Isis only the number of shares that will maintain such Equity Cap, and will pay Isis the remainder of such milestone payment in cash.  For purposes of this Section 6.2, the term “Atlantic Equity Securities” means (a) if Atlantic has a class of stock (x) registered under Section 12(b) or 12(g) of the Securities Exchange Act of 1934 and that is publicly traded on a major US exchange such as the NYSE or NASDAQ, or (y) traded on a major European exchange such as Deutsche Börse or the London Stock Exchange, such publicly traded common stock of Atlantic, the value of which will be determined [***] by the average closing price for the 15 trading days immediately preceding the date the particular milestone event referenced in this Section 6.2 is achieved; or (b) if Atlantic does not have a class of publicly traded stock, the equity securities of Atlantic issued in its most recent venture capital financing occurring prior to the date the particular milestone event referenced in this Section 6.2 is achieved, which will be issued to Isis at the same price per share and with the same rights, preferences and privileges as provided to the other investors in such financing.

Section 6.3      Sublicense Revenue.

6.3.1       In the event that Atlantic enters into a Sublicense Atlantic will pay Isis [***]% of the Sublicense Revenue (which does not include royalties on Net Sales) from such sublicensing of any Product by Atlantic and its Affiliates.

6.3.2       Any payment to Isis for its portion of Sublicensing Revenue due under this Section 6.3 will be due within 30 days of Atlantic receiving such Sublicensing Revenue.

Section 6.4      Royalty Payments by Atlantic.

6.4.1       For any Product sold by Atlantic or its Affiliates, in consideration of Isis’ collaborative efforts and the licenses granted hereunder, Atlantic will pay Isis royalties on Net Sales of each Product in accordance with the following table. 

Cumulative Net Sales		Royalty Rate (Alicaforsen Products)		Royalty Rate (Second Generation ICAM-1 Products)
Less than US $[***]		[***]	%	[***]	%
US $[***] to US $[***]		[***]	%	[***]	%
Above US $[***]		[***]	%	[***]	%

 

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6.4.2       For any Products sold pursuant to a Sublicense, in consideration of Isis’ collaborative efforts and the licenses granted hereunder, Atlantic will pay Isis royalties on Net Sales as follows:

6.4.2.1            For Alicaforsen Products sold for [***] indication, Atlantic will pay Isis royalties on Net Sales of each Product equal to the greater of (i) [***]% of the royalty Atlantic is entitled to receive under such Sublicense, or (ii) [***]% of Net Sales; and !!

6.4.2.2            For Products sold pursuant to a Sublicense of (i) a Second Generation ICAM-1 Product, or (ii) an Alicaforsen Product that is not indicated for [***], Atlantic will pay Isis royalties on Net Sales of each Product as follows:

(a) If the royalty to Atlantic is less than or equal to [***]% of Net Sales, then Isis receives [***]% of Net Sales of each Product;

(b) If the royalty to Atlantic is greater than [***]% but less than [***]% of Net Sales, then Isis receives [***]% of Net Sales of each Product; or

(c) If the royalty to Atlantic is equal to or greater than [***]% of Net Sales, then Isis receives [***]% of Net Sales of each Product.

6.4.3       Isis will be responsible for payment of any Third Party royalty obligations related to Product that exist as of the Effective Date (“Existing Royalties”), including (i) with respect to the Alicaforsen Product, Existing Royalties due under the agreement with [***] dated [***], and (ii) with respect to Second Generation ICAM-1 Products, Existing Royalties due under the agreement with [***] dated [***] and the agreement with [***] dated [***].  Atlantic will be responsible for all other Third Party royalties, fees and milestones that may arise related to the development or commercialization of Products.

Section 6.5      Term; Timing of Royalty Payments.  Atlantic’s obligation to pay royalties on each Product will expire on a county-by-country basis as follows:

6.5.1       With respect to Alicaforsen Products, Atlantic’s obligation to pay royalties on each Product will expire on a county-by-country basis upon the later of: (i) [***] years from the date of First Commercial Sale of such Product in such country of sale, or (ii) the expiration of the last to expire Valid Claim of Alicaforsen Patents and ICAM-1 Specific Patents covering the making, using, or selling of such Alicaforsen Product in the country of sale, or (iii) the expiration of the last to expire Valid Composition of Matter Claim within Alicaforsen Patents or ICAM-1 Specific Patents in the country of manufacture of that Alicaforsen Product.

6.5.2       With respect to Second Generation ICAM-1 Products, Atlantic’s obligation to pay royalties on each Second Generation ICAM-1 Product will expire on a county-by-country basis upon the later of: (i) [***] years from the date of First Commercial Sale of such Second Generation ICAM-1 Product in such country of sale, or (ii) the expiration of the last to expire Valid Claim of ICAM-1 Specific Patents and Second Generation ICAM-1 Product Specific Patents covering the making, using, or selling of such Second Generation ICAM-1

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Product in the country of sale, or (iii) the expiration of the last to expire Valid Composition of Matter Claim within ICAM-1 Specific Patents and Second Generation ICAM-1 Product Specific Patents in the country of manufacture of that Second Generation ICAM-1 Product.

6.5.3       The royalties due under Section 6.4 will become due and payable: (i) within 30 days of each respective Royalty Due Date with respect to Net Sales received by Atlantic or its Affiliates, and (ii) with respect to royalties due under Sublicenses, within 30 days of Atlantic itself receiving the royalty payments due from its sublicensees.  In each case royalties will be calculated in respect of the Net Sales in the calendar quarter immediately preceding the applicable Royalty Due Date.

Section 6.6      Payment Method.   Any amounts due to Isis under this Agreement will be paid in U.S. dollars, by wire transfer in immediately available funds to an account designated by Isis.  Any payments or portions thereof due hereunder which are not paid on the date such payments are due under this Agreement and the payment is not in dispute between the Parties, or if disputed the dispute has not been resolved, will bear interest at a rate equal to the prime rate as published in The Wall Street Journal , Eastern Edition, on the first day of each calendar quarter in which such payments are overdue, plus 1% calculated on the number of days such payment is delinquent, compounded monthly.

Section 6.7      Currency; Foreign Payments.   If any currency conversion will be required in connection with any payment hereunder, such conversion will be made by using the exchange rate for the purchase of U.S. dollars as published in The Wall Street Journal , Eastern Edition, on the last business day of the calendar quarter to which such payments relate.  If at any time legal restrictions prevent the prompt remittance of any payments in any jurisdiction, Atlantic may notify Isis and make such payments by depositing the amount thereof in local currency in a bank account or other depository in such country in the name of Isis or its designee, and Atlantic will have no further obligations under this Agreement with respect thereto.  All payments under this Agreement shall be made free and clear and without any set off, deduction, withholding or deferment in respect of any taxes unless required by law or practice of any relevant governmental authority.  The Parties shall co-operate to minimize any deduction or withholding in relation to any payments pursuant to this Agreement.

Section 6.8      Records Retention; Audit.

6.8.1       Record Retention.  Atlantic will maintain (and will ensure that its Affiliates and sublicensees will maintain) complete and accurate books, records and accounts that fairly reflect Net Sales with respect to each Product, in each case in sufficient detail to confirm the accuracy of any payments required hereunder and in accordance with IFRS, which books, records and accounts will be retained by Atlantic, its Affiliates or sublicensees (as applicable) for the later of (i) 5 years after the end of the period to which such books, records and accounts pertain, and (ii) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Applicable Law.

6.8.2       Audit.   Isis will have the right to have an independent certified public accounting firm of nationally recognized standing, reasonably acceptable to Atlantic, have access during normal business hours, and upon reasonable prior written notice, to Atlantic’s records

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(and its Affiliates and sublicensees) as may be reasonably necessary to verify the accuracy of Net Sales, Sublicense Revenue, as applicable, for any calendar quarter or calendar year ending not more than [***] months prior to the date of such request; provided, however , that Isis will not have the right to conduct more than one such audit in any Calendar Year except as provided below.  The accounting firm will enter into appropriate obligations with Atlantic to treat all information it receives during its inspection as confidential.  The accounting firm shall disclose to Isis only whether the reported Net Sales and Sublicense Revenue are correct and details of any discrepancies but no other information shall be disclosed to Isis.  Isis will bear the cost of such audit unless the audit reveals a variance of more than [***]% from the reported results, in which case Atlantic will bear the cost of the audit.

6.8.3       Payment of Additional Amounts.   If, based on the results of such audit, additional payments are owed by either party to the other under this Agreement, the party due to make a payment will make such additional payments, with interest as set forth in Section 6.6, within 30 days after the date on which such accounting firm’s written report is delivered to such Party.

6.8.4       Confidentiality.   Isis will treat the financial information reported to it under Section 6.8.2 in accordance with the confidentiality provisions of Article 8; provided, however, that Isis may provide Third Parties to which Isis owes Existing Royalties on Products such information if it exercises its audit rights concerning the Products against Isis and provided such Third Party is bound to keep such information confidential. !!

ARTICLE 7 -
PRESS RELEASES & PUBLICATIONS

Section 7.1        Press Releases

7.1.1 Press Releases - Generally.   Each provision of this Section 7.1.1 is subject to Section 7.1.2 below.  Press releases or other similar public communication by either Party relating to this Agreement, will be approved in advance by the other Party, which approval will not be unreasonably withheld or delayed, except for those communications required by Applicable Law, which are Authorized Disclosures or disclosures of information for which consent has previously been obtained, and information of a similar nature to that which has been previously disclosed publicly with respect to this Agreement, each of which will not require advance approval, but will be provided to the other Party as soon as practicable after the release or communication thereof.

*** CONFIDENTIAL TREATMENT REQUESTED

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7.1.2 Press Releases – Product Safety/Efficacy. Each Party will immediately notify (and, if possible, provide as much advance notice as possible to) the other of any event materially related to Products (including any regulatory approval) so that the Parties may analyze the need to or desirability of publicly disclosing or reporting such event.  Notwithstanding Section 7.1.1 above, any press release or other similar public communication by either Party related a Product’s efficacy or safety data and/or results, will be submitted to the other Party for review and approval at least 72 hours in advance of such proposed public disclosure, which approval will not be unreasonably withheld or delayed.

Section 7.2      Publications.  Each provision of this Section 7.2 is subject to Section 7.1.2 above.  At least [***] days prior to a Party’s submission of any material related to the research or development activities hereunder for publication or presentation, the publishing Party will provide to the other Party with a draft of such material for its review and comment.  The non-publishing Party will provide any comments to the publishing Party within [***] days of receipt of such materials.  No publication or presentation with respect to the research or development activities hereunder will be made unless and until the non-publishing Party’s comments on the proposed publication or presentation have been discussed by the Parties.   If requested in writing by the non-publishing Party, the publishing Party will withhold material from submission for publication or presentation for a reasonable time to allow for the filing of a patent application.

ARTICLE 8 -
CONFIDENTIALITY

Section 8.1      Disclosure and Use Restriction.   Except pursuant to an Authorized Disclosure, the Parties agree that, for the Term and for five years thereafter, each Party will keep completely confidential and will not publish, submit for publication or otherwise disclose, and will not use for any purpose except for the purposes contemplated by this Agreement, any Confidential Information received from the other Party.

ARTICLE 9 -
INTELLECTUAL PROPERTY

Section 9.1      Prosecution of Patents.

9.1.1       Solely Owned Patents. With the exception of the Alicaforsen Patents, the ICAM-1 Specific Patents, and the Second Generation ICAM-1 Product-Specific Patents, which are addressed in Sections 9.1.2 and 9.1.3 below, each Party will have the sole right, at its cost and expense and at its sole discretion, to obtain, prosecute, maintain and enforce throughout the world any Patents solely owned or Controlled by such Party, including with respect to Isis, the Isis Core Technology Patents.

9.1.2       Alicaforsen Patents and ICAM-1 Specific Patents.  Subject to Section 9.1.4 below, Isis will have the sole obligation at its expense, to obtain, prosecute and maintain the Alicaforsen Patents and the ICAM-1 Specific Patents in such countries as Isis is prosecuting such Patents on the Effective Date using Commercially Reasonable Efforts.  For clarity, Atlantic will not have the right to review or comment on any applications or registrations to be filed by

*** CONFIDENTIAL TREATMENT REQUESTED

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Isis under this Section 9.1.2, and Isis may cease prosecuting or maintaining particular applications or patents in the Alicaforsen Patents and ICAM-1 Specific Patents in selected jurisdictions, if Isis determines that it is not commercially reasonable to continue such efforts (in which case the terms of Section 9.1.4 will apply).

9.1.3       Second Generation ICAM-1 Product-Specific Patents. Subject to Section 9.1.4 below, Atlantic will have the sole obligation, at Atlantic’s expense, to obtain, prosecute and ma