Exhibit 10.7
CONFIDENTIAL TREATMENT REQUESTED
Information marked by [***] has been omitted pursuant to a request
for
confidential treatment. The omitted portion has been separately
filed with
the Securities and Exchange Commission.
LICENSE AGREEMENT
This
Agreement is entered into on January 9, 2008, between THE OHIO
STATE UNIVERSITY RESEARCH FOUNDATION, located at 1960 Kenny
Road, Columbus, Ohio and ARNO THERAPEUTICS, INC., a Delaware
corporation located at 30 Two Bridges Road, Suite #270,
Fairfield, New Jersey 07004.
BACKGROUND
LICENSOR
owns certain PATENT RIGHTS (as defined in Section 1.19)
relating to LICENSOR Case No. 04014, "Zn2+-Chelating
Motif-Tethered Short-Chain Fatty Acids as a Novel Class of
Histone Deacetylase Inhibitors", and has the right to grant
licenses under PATENT RIGHTS, (subject to only to a
royalty-free nonexclusive license previously granted to the
United States Government) (the “INVENTION”), which
was invented at LICENSOR by Dr. Ching-Shih Chen
et.al.;
LICENSOR
desires to have the PATENT RIGHTS developed and commercialized
to benefit the public and is willing to grant a license for
this purpose;
LICENSEE
has represented to LICENSOR, to induce LICENSOR to enter into
this Agreement, that LICENSEE is experienced in developing,
producing, manufacturing, marketing, and selling products
similar to the LICENSED PRODUCT(s) (as later defined) and/or
using the LICENSED PROCESS(es) (as later defined) and that it
shall commit itself to a thorough, vigorous, and diligent
program of exploiting the PATENT RIGHTS so that the public
shall benefit; and
LICENSEE
desires to obtain a license under the PATENT RIGHTS upon the
terms and conditions set forth below.
The
parties therefore agree as follows:
ARTICLE 1 - DEFINITIONS
For
purposes of this Agreement, the following words and phrases
have the following meanings:
1.1
“AFFILIATE”
shall mean any entity or person that directly or indirectly
controls, is controlled by or is under common control with
LICENSEE or a SUBLICENSEE as applicable. For purposes of this
definition, “control” means possession of the
power to direct the management of such entity or person,
whether through ownership of more than fifty percent (50%) of
voting securities, by contract or otherwise.
1.2
“CHANGE
OF CONTROL” shall mean a merger, consolidation,
acquisition or the transfer of all, or substantially all, of
the business interests of LICENSEE to which this Agreement
relates to which LICENSEE is a party where the shareholders of
LICENSEE immediately prior to effective date of such
transaction beneficially own, immediately following the
effective date of such transaction, securities representing
less than fifty percent (50%) of the combined voting power of
the surviving corporation’s then outstanding voting
securities.
1.3
“COMMERCIALLY
REASONABLE EFFORTS” shall mean documented efforts that
are consistent with those utilized by companies of similar
size and type that are developing products and services
similar to LICENSED PRODUCTS.
1.4
“CONFIDENTIAL
INFORMATION” means confidential or proprietary
information relating to the PATENT RIGHTS, LICENSED PRODUCTS
or LICENSED PROCESSES. CONFIDENTIAL INFORMATION may be in
written, graphic, oral or physical form and may include
scientific knowledge, know-how, processes, inventions,
techniques, formulae, products, business operations, customer
requirements, designs, sketches, photographs, drawings,
specifications, reports, studies, findings, data, plans or
other records, biological materials, and/or software.
CONFIDENTIAL INFORMATION shall not include:
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(a)
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information
that is, or later becomes, generally available to the public
through no fault of the recipient;
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(b)
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information
that is provided to the recipient by an independent third party
having no obligation to keep the information secret;
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(c)
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information
that the recipient can establish was previously known to it or was
independently developed by it without reference to the CONFIDENTIAL
INFORMATION;
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(d)
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information
that is required to be disclosed to comply with applicable law or
court order, including Ohio Revised Code Section 149.43, provided
that the recipient gives prior written notice of the required
disclosure to the discloser.
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1.5
“EFFECTIVE
DATE” shall mean the date on which this Agreement is
fully executed by both parties.
1.6
“FDA”
shall mean the United States Food and Drug Administration or
successor entity.
1.7
"FIELD
OF USE" means all therapeutic uses in humans and
animals.
1.8
“FIRST
SALE” shall mean the first commercial sale to a third
party of any LICENSED PRODUCT in the LICENSED TERRITORY (as
defined below).
1.9
“IMPROVEMENTS”
shall mean any and all intellectual property relating to a
LICENSED PRODUCT or PATENT RIGHTS made by the INVENTOR,
including, without limitation improved methods of manufacture
and production techniques, new or additional analogs, to the
extent that such analogs are a part of the same class of
compounds contained within PATENT RIGHTS, therapeutic
indications and developments intended to enhance the safety
and efficacy of the LICENSED PRODUCTS.
1.10
“IND”
shall mean an investigational new drug application filed with
the FDA prior to the commencement of human clinical trials in
the United States pursuant to 21 C.F.R.
§312(a).
1.11
“INVENTORS”
shall mean Dr. Ching-Shih Chen and such other inventors as are
listed as such on any patent application or patent contained
within PATENT RIGHTS.
1.12
“LICENSED
INFORMATION” shall mean all technical information and
data, whether or not patented invented or developed by
LICENSOR, to the extent that (a) such technical information
and data are useful for the use or practice of the
PATENTS
RIGHTS or
LICENSED
TECHNOLOGY as
permitted herein; and (b) LICENSOR possesses the right to
license the use of such information to LICENSEE
for
commercial purposes.
1.13
“LICENSED
PROCESS” means any process that is covered in whole or
in part by (a) a VALID
CLAIM (as defined in Section 1.26
below)
contained
in the PATENT RIGHTS in the country in which such LICENSED
PROCESS is used or (b) a VALID CLAIM contained in the PATENT
RIGHTS in the country to which a product is imported where the
LICENSED PROCESS is used to make the product.
1.14
“LICENSED
PRODUCT” means any product or product part which (a) is
covered in whole or in part by a VALID
CLAIM contained
in the PATENT RIGHTS in the country in which any such product
or product part is made, used or sold; or (b) is manufactured
by using a LICENSED PROCESS in the country in which any
LICENSED PROCESS is used or in which such product or product
part is used or sold.
1.15
"LICENSEE"
means ARNO
THERAPEUTICS, INC .
and any AFFILIATE of ARNO
THERAPEUTICS, INC .
1.16
“LICENSOR”
shall mean THE OHIO STATE UNIVERSITY RESEARCH
FOUNDATION.
1.17
“NDA”
shall mean an application for FDA approval to market a new
drug filed with the FDA pursuant to 21 C.F.R.
§314.
1.18
“NET
SALES” shall mean the total gross amounts invoiced for
sales of a LICENSED
PRODUCT
by
or on behalf of LICENSEE, its AFFILIATES and SUBLICENSEES
and
from leasing, renting, or otherwise making a LICENSED
PRODUCT
or
LICENSED PROCESS available to others for profit without sale or
other dispositions, whether invoiced or not, less the following
deductions, provided they actually pertain to the disposition
of LICENSED
PRODUCTS or
LICENSED PROCESSES
and
are separately invoiced:
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(a) |
discounts,
returns and allowances actually granted to customers;
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(b)
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commissions
actually paid to third-party distributors and other third-party
sales agencies;
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(c)
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sales,
tariff duties and/or use taxes directly imposed and with reference
to particular sales;
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(d) |
outbound
transportation prepaid or allowed and transportation
insurance;
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(e) |
amounts
allowed or credited on returns;
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(f)
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bad
debt deductions actually written off during the accounting period;
and
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(g) |
packaging
and freight charges.
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No
deductions shall be made for cost of collections or for
commissions paid to independent sales agencies or to
individuals regularly employed by LICENSEE and on its payroll.
LICENSED PRODUCTS are "sold" when billed out or
invoiced.
1.19
"PATENT
RIGHTS" means all U.S. and foreign patents and patent
applications owned or controlled by LICENSOR which relate to
the composition of matter, method of use, manufacture, dosing,
or administration of the INVENTION or any IMPROVEMENTS, which
shall include the following LICENSOR intellectual
property:
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(a)
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the
United States and foreign patents and/or patent applications listed
in Appendix A;
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(b)
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United
States and foreign patents issued from the applications listed in
Appendix A and from divisionals, and continuations of these
applications;
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(c)
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claims
of U.S. and foreign continuation-in-part applications, and of the
resulting patents, which are directed to subject matter
specifically described in the U.S. and foreign applications listed
in Appendix A;
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(d)
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claims
of all foreign patent applications, and of the resulting patents,
which are directed to subject matter specifically described in the
United States patents and/or patent applications described in (a),
(b) or (c) above; and
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(e)
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any
reissues or reexaminations of United States patents described in
(a), (b) or (c) above.
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1.20
“PHASE
I CLINICAL TRIAL” shall mean the initial introduction of
an investigational new drug into humans, the principal purpose
of which is to determine the metabolism and pharmacologic
actions of the drug in humans, the side effects associated
with increasing doses, and, if possible, to gain early
evidence on effectiveness, in compliance with 21 C.F.R.
§312(a).
1.21
“PHASE
II CLINICAL TRIAL” shall mean controlled human clinical
studies conducted to evaluate the effectiveness of a drug for
a particular indication or indications in patients with the
disease or condition under study and to determine the common
short-term side effects and risks associated with the drug in
compliance with 21 C.F.R. §312(b).
1.22
“PHASE
III CLINICAL TRIAL” shall mean expanded controlled and
uncontrolled human clinical trials pursuant to a randomized
study with endpoints agreed upon by regulatory bodies for
regulatory approval performed after PHASE II CLINICAL TRIALS
evidence suggesting effectiveness of a drug has been obtained,
and is intended to gather the additional information about
effectiveness and safety that is needed to evaluate the
overall benefit-risk relationship of a drug and to provide an
adequate basis for physician labeling, as in compliance with
21 C.F.R. §312.
1.23
“SUBLICENSEE”
shall mean any third party sublicensed by LICENSEE to make,
have made, use, sell, have sold, import or export any LICENSED
PRODUCT.
1.24
“SUBLICENSE
FEES” shall include:
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(a)
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all
consideration, in whatever form, received from a SUBLICENSEE in
connection with a sublicense of the PATENT RIGHTS and LICENSED
INFORMATION, including, but not be limited to:
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(i)
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up
front fees received by LICENSEE for the granting of a sublicense to
a SUBLICENSEE;
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(ii)
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MILESTONE
PAYMENTS (as
defined in Section 3.2 below) received by the LICENSEE from a
SUBLICENSEE; provided, however, that the LICENSOR shall not be
entitled to any MILESTONE PAYMENTS made to the LICENSEE to the
extent that the LICENSOR would be otherwise entitled to a
MILESTONE
PAYMENT as
set forth in Section 3.2; and
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(iii)
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Sublicense
maintenance fees.
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(b) |
SUBLICENSE
FEES shall not include the following:
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(i)
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payments
received by LICENSEE from a SUBLICENSEE solely for a bona fide
research and development program which will be particularized in
such SUBLICENSE AGREEMENT with reasonable detail; and
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(ii)
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the
purchase by a SUBLICENSEE of debt or equity securities of the
LICENSEE.
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1.25
“TERRITORY”
means worldwide.
1.26
“VALID
CLAIM” shall
mean (a) an issued claim of any unexpired patent included
among the PATENT RIGHTS, which has not been held
unenforceable, unpatentable or invalid by a decision of a
court or governmental body of competent jurisdiction,
unappealable or unappealed within the time allowed for appeal,
which has not been rendered unenforceable through disclaimer
or otherwise, and which has not been lost through an
interference proceeding or abandoned or (b) a claim of a
pending patent application included within the PATENT RIGHTS,
which claim was filed in good faith and has not been abandoned
or finally disallowed without the possibility of appeal or
re-filing of such application.
ARTICLE 2 - GRANT
2.1
Subject
to all the terms and conditions of this Agreement, LICENSOR
hereby grants to LICENSEE and LICENSEE accepts, subject to the
terms and conditions of this Agreement, an exclusive,
worldwide license, together with the right to grant
sublicenses, to practice under the PATENT RIGHTS and
IMPROVEMENTS and to use the LICENSED INFORMATION, to make,
have made, use, sell, have sold, offer to sell, import or
export LICENSED PRODUCTS and to practice LICENSED
PROCESSES.
2.2
Unless
terminated earlier as provided in Article 13, the term of the
LICENSE (the “TERM”) shall commence on the
EFFECTIVE DATE and shall automatically expire on the later
of:
(a)
the
date on which the last VALID CLAIM described in the PATENT
RIGHTS expires, lapses or is declared to be invalid by a
non-appealable decision of a court of competent jurisdiction;
and
(b)
twenty
(20) years after the EFFECTIVE DATE.
2.3
LICENSEE
agrees that LICENSED PRODUCTS leased or sold in the United
States shall be manufactured substantially in the United
States.
2.4
LICENSOR
reserves the right to practice under the PATENT RIGHTS solely
for non-commercial research and educational
purposes.
2.5
To
the extent that any invention included within the PATENT
RIGHTS has been funded in whole or in part by the United
States government, the United States government retains
certain rights in such invention including but not limited to
the rights set forth in 35 U.S.C. §200-212 and all
regulations promulgated thereunder, as amended, and any
successor statutes and regulations (collectively the
“Federal Patent Policy”), notwithstanding anything
in this Agreement to the contrary. As a condition of the
LICENSE granted hereby, LICENSEE acknowledges and shall comply
with all aspects of the Federal Patent Policy applicable to
the PATENT RIGHTS, including the obligation that LICENSED
PRODUCTS used or sold in the United States be manufactured
substantially in the United States.
2.6
The
LICENSE granted in Article 2 shall automatically convert to a
paid-up, non-exclusive license, on a country-by-country basis,
upon the expiration of the TERM.
ARTICLE 3 – LICENSE FEES MILESTONE PAYMENTS and
ROYALTIES
3.1
LICENSEE
shall pay LICENSOR a one-time license issue fee of two hundred
thousand dollars ($200,000). Subject only to a material,
noncurable breach of the representations and warranties of the
LICEONSOR contained in Section 15.2, such license issue fee
shall be nonrefundable and deemed earned and due immediately
upon the EFFECTIVE DATE.
3.2
LICENSEE
shall make the following one-time payments (the
“MILESTONE PAYMENTS”) to LICENSOR upon the
successful accomplishment of the milestones described
below:
(a)
[***]
dollars ($[***]) upon the dosing of the first subject in the
first PHASE I CLINICAL TRIAL of a LICENSED PRODUCT in the
United States conducted by the LICENSEE pursuant to a
corporate sponsored IND;
(b)
[***]
dollars ($[***]) upon the dosing of the first patient in the
first PHASE II CLINICAL TRIAL of a LICENSED PRODUCT conducted
by the LICENSEE in the United States;
(c)
[***] dollars ($[***]) upon the dosing of the first patient in
the first PHASE III CLINICAL TRIAL of a LICENSED PRODUCT
conducted by the LICENSEE in the United States;
(d)
[***] dollars ($[***]) upon the FIRST SALE of a
LICENSED
PRODUCT by
the LICENSEE, its AFFILIATES or SUBLICENSEE in the United
States;
(e)
[***] dollars ($[***]) upon FIRST SALE of a LICENSED
PRODUCT by
the LICENSEE, its AFFILIATES or SUBLICENSEE in the first
country in the European Union; and
(f)
[***] dollars ($[***]) upon the FIRST SALE of a
LICENSED
PRODUCT by
the LICENSEE, its AFFILIATES or SUBLICENSEE in Japan
.
3.3
Except
for MILESTONE PAYMENTS described in Section 3.2(d)-(g),
MILESTONE PAYMENTS shall be non-refundable and non-creditable
against EARNED ROYALTIES (as defined in Section 3.4 below).
Notwithstanding the foregoing, MILESTONE PAYMENTS described in
Section 3.2(d)-(f) shall be fully creditable against EARNED
ROYALTIES.
3.4
Subject
to the terms of this Section 3, during the TERM of this
Agreement, as partial consideration for the LICENSE, LICENSEE
shall pay to LICENSOR an earned royalty on worldwide
cumulative NET SALES of LICENSED PRODUCTS and LICENSED
PROCESSES by LICENSEE, its AFFILIATES or SUBLICENSEES
(“EARNED ROYALTIES”) equal to [***] percent
([***]%) of NET SALES by LICENSEE its AFFILIATES or
SUBLICENSEES until the term of the PATENT RIGHTS expires or
until this Agreement is terminated.
3.5
Following
the FIRST SALE, LICENSEE shall pay LICENSOR the following
minimum annual royalties:
(a)
[***]
dollars ($[***]) per year until the third anniversary of the
FIRST SALE of a LICENSED
PRODUCT ;
and thereafter
(b)
[***]
dollars ($[***]) per year.
Such
minimum annual royalty shall be deemed earned and accrued as
of January 1 of each calendar year after the effective date of
this Agreement and shall be due no later than January 31 of
each year. The minimum annual royalty payment shall be
credited against running royalties for the corresponding
calendar year, and the quarterly reports under Section 6.3
shall reflect such credit. The minimum annual royalty payments
shall not be creditable against milestone payments (if any) or
against royalty payments due for any other calendar
year.
3.6
LICENSOR
shall be responsible for the payment of all taxes, duties,
levies, and other charges, including, but not limited to,
sales, use, gross receipts, excise, VAT, and any other taxes,
any withholdings or deductions, import and custom taxes, any
duties, or any other charges imposed by any taxing authority
with respect to the royalties payable to LICENSOR under this
agreement. Should LICENSEE be required under any law or
regulation of any government entity or authority, domestic or
foreign, to withhold or deduct any portion of the payments on
royalties due to LICENSOR, then the sum payable to LICENSOR
shall be increased by the amount necessary to yield to
LICENSOR an amount equal to the sum it would have received had
no withholdings or deductions been made. LICENSOR shall
cooperate with LICENSEE in the event LICENSEE elects to
assert, at its own expense, LICENSOR’s exemption from
any such tax or deduction.
3.7
In
the event that LICENSEE’S outside patent counsel
together with LICENSOR’S patent counsel agree (which
discussion and agreement shall be in good faith) that patent
licenses from third parties are reasonably required by
LICENSEE, its AFFILIATES or its SUBLICENSEE to make, use,
offer for sale, sell or import any LICENSED PRODUCT in any
given country, LICENSOR and LICENSEE shall negotiate in good
faith with the intention of reaching a fair and equitable
formula on how any amount paid by LICENSEE to such third
parties shall impact the royalties due hereunder.
3.8
No
multiple royalties shall be payable because the use, lease or
sale of any LICENSED PRODUCT is, or shall be, covered by more
than one VALID CLAIM contained in the PATENT
RIGHTS.
3.9
In
the event that a LICENSED PRODUCT is sold in the form of a
combination package together with companion products that are
not themselves a LICESED PRODUCT, the NET SALES for such
combination package upon which the sales royalties due to
LICENSOR is based shall be calculated by multiplying the total
sales price of such combination package by the fraction
A/(A+B), where A is the invoice price of the LICENSED PRODUCT
if sold separately, and B is the total invoice price of each
of the other companion products included in the combination
package if sold separately. In no event shall such deduction
in the overall sales royalty rate due to LICENSOR be reduced
by more than [***] percent ([***]%).
3.10
Royalty
payments shall be paid in United States dollars in Columbus,
Ohio, or at such other place as LICENSOR may reasonably
designate consistent with the laws and regulations controlling
in any foreign country. If any currency conversion is required
in connection with the payment of royalties, such conversion
shall be made by using the exchange rate as published as of
the last business day of the applicable calendar quarter in
the eastern edition of The Wall Street Journal.
3.11
Royalty
payments shall be made on a quarterly basis with submission of
the reports required by Article 6, except any minimum annual
royalty payment, which shall be due as provided in Section
3.5. Such payments and reports shall be due within thirty (30)
days of March 31, June 30, September 30, and December 31 of
each calendar year. Late payments, including payments due for
patent cost reimbursement, shall be subject to a charge of
[***] percent ([***]%) per month or $[***], whichever is
greater. The payment of such late charge shall not foreclose
LICENSOR from exercising any other rights it may have
resulting from any late payment.
ARTICLE 4
– SUBLICENSES
4.1
LICENSEE
has the right to enter into sublicensing agreements with
third-parties. LICENSEE agrees that any sublicense granted by
it shall provide that the obligations to LICENSOR of Articles
2, 6, 8, 9, 10, 13 and 16 of this Agreement shall be binding
upon the SUBLICENSEE as if it were a party to this Agreement.
LICENSEE further agrees to attach copies of these Articles to
sublicense agreements.
4.2
LICENSEE
shall forward to LICENSOR copies of all sublicense
a
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