LICENSE AGREEMENT

 

AGREEMENT

 

1.                                       DEFINITIONS.

 

1.1          “ Affiliate ” means a corporation, or entity, which, directly or indirectly, or through one or more intermediaries, controls, is controlled by, or is under common control with a party.  For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of at least fifty percent (50%) of the voting stock of such entity, or by contract or otherwise.

 

1.2          “ Allos Improvements ” means any invention, discovery, use, process, method, composition, formula, technique, information and data, whether or not patentable, that constitutes an improvement to the Licensed Technology and is generated, developed, conceived or reduced to practice during the term of this Agreement, by employees or others acting on behalf of Allos, either alone or jointly with others, excluding, however, employees of Salford, CRT, CU, PICR and CR-UK.

 

1.3          “ CR-UK ” means Cancer Research UK, a company registered in England and Wales with registered number 4325234 and charity registered in England under charity number 1089464 by which CRT is wholly-owned.

 

1.4          “Commercially Reasonable Efforts” means the level of efforts and resources required to carry out a research, development or commercialization activity with respect to a given product in a manner consistent with accepted business practices and legal requirements, sound scientific judgment and comparable to efforts in the pharmaceutical industry made by a similarly situated company applicable to development of compounds at an equivalent stage of development and similar market potential.

 

1.5          “ Competent Authority” means any local or national agency, authority, department, inspectorate, minister, ministry official or public or statutory person (whether autonomous or not) of any government of any country having jurisdiction over this Agreement or any of the parties or over the development or marketing of medicinal products in the Field of Use.

 

1.6          “ CRT Improvements ” means any invention, the practice of which would also require the practice of an invention claimed in or covered by the Licensed Patents listed in Appendix B and which is a modification of or improvement to the inventions claimed in or covered by the Licensed Patents listed in Appendix B , made by CRT, CR-UK or PICR researchers (if such invention is assigned to CRT under the TTA) to whom CRT permits access to the Licensed Technology in the exercise of its reserved rights hereunder, but excluding, for the avoidance of doubt, any research performed by other entities that generate intellectual property that may be owned by CRT.

 

1.7          “ CU Improvements ” means any invention, the practice of which would also require the practice of an invention claimed in or covered by the Licensed Patents and which is a modification of or improvement to the inventions claimed in or covered by the Licensed Patents,

 

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made by CU researchers to whom CU permits access to the Licensed Technology in the exercise of its reserved rights hereunder.

 

1.8          “ Current RH-1 Formulation ” means RH-1 as formulated with [*].

 

1.9          “[ *] ” means any form of [*] being used, as of the Effective Date, in the on-going Phase I human clinical trial being sponsored by CR-UK.

 

1.10        “ Data Option Agreement ” means the agreement executed and effective as of the Effective Date by and between Allos and CR-UK pursuant to which CR-UK grants to Allos an option to acquire exclusive rights to certain clinical data generated by CR-UK in connection with a clinical trial that is currently being conducted by CR-UK.

 

1.11        “ FDA ” means the United States Food and Drug Administration, or any successor agency thereto.

 

1.12        “ Field of Use ” means all therapeutic and diagnostic uses, including human and veterinary diseases.

 

1.13        “ Improvements ” means, collectively, the CRT Improvements, the CU Improvements and the Salford Improvements.

 

1.14        “ IND ” means an Investigational New Drug Application filed with the FDA, or the equivalent application or filing filed with any equivalent agency or governmental authority outside the United States (including any supra-national agency such as in the European Union) necessary to commence human clinical trials in such jurisdiction.

 

1.15        “ Jointly ” means (a) with the written consent of all the Licensors or (b) with the written consent of one or more Licensors (“ Lead Licensors ”) in circumstances where the consent of the remaining Licensors has been sought in writing by the Lead Licensors on forty (40) day’s notice and no response has been received from the remaining Licensors .

 

1.16        “ Licensed Know-How ” means any proprietary data, information, technique, know-how, or trade secret owned or controlled by the Licensors as of the Effective Date that is necessary or useful (a) for the practice of the Licensed Patents, or (b) to make, use or sell Licensed Products, as more specifically described in Appendix A .

 

1.17        “ Licensed Patents ” means the United States and foreign patents and/or patent applications claiming or covering any Licensed Product, any Improvements or both, including the patents listed in Appendix B , together with all continuations, continuations-in-part and divisionals thereof, and all corresponding reexaminations, reissues and extensions thereof and all foreign counterparts of any of the foregoing.

 

1.18        “ Licensed Product ” means a product containing any formulation of the Patent Compounds.

 

1.19        “ Licensed Technology ” means the Licensed Know-How, the Licensed Patents and the Improvements, including all intellectual property rights therein.

 

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1.20        “ NDA ” means a New Drug Application filed with the FDA, or the equivalent application or filing filed with any equivalent agency or governmental authority outside the United States (including any supra-national agency such as in the European Union), the filing of which is necessary to market and sell Licensed Product in such jurisdiction.

 

1.21        “ Net Sales ” means, the gross amount billed or invoiced by Allos, its Affiliates or sublicensees or its Affiliates to any other Third Parties for a Licensed Product, less:

 

(a)           discounts, including cash and quantity discounts, chargeback payments and rebates granted to managed health care organizations or to federal, state and local governments, their agencies, purchasers and reimbursers or to trade customers;

 

(b)           credits or allowances actually granted upon claims for damaged goods, rejections or returns of a Licensed Product, including recalls;

 

(c)           freight, postage, shipping, transportation and insurance charges actually allowed or paid for delivery of a Licensed Product to the extent billed; and

 

(d)           sales (such as value-added tax or its equivalent) and excise taxes, other consumption taxes, customs duties and compulsory payments to governmental authorities and any other governmental charges imposed upon the importation, use or sale of a Licensed Product (excluding any taxes paid on the income from such sales).

 

Notwithstanding the foregoing, amounts received by Allos, its Affiliates or sublicensees or its Affiliates for the sale of a Licensed Product among Allos, its Affiliates and sublicensees or their Affiliates for resale shall not be included in the computation of Net Sales hereunder.  Where a transfer or other disposition of Licensed Product is made by Allos, its Affiliates or sublicensees or their Affiliates to any other Third Parties, for consideration other than monetary, such consideration shall be valued at the fair market value thereof as at the date of sale and shall constitute Net Sales.

 

If Allos, its Affiliate or sublicensee or its Affiliate sells a Licensed Product in the form of a combination product containing one or more active therapeutic ingredients in addition to the Licensed Product (other than an ingredient triggering a royalty deduction under Section 4.7 ), Net Sales for such combination product will be calculated by multiplying actual Net Sales thereof 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 the other active ingredient or ingredients in the combination, if sold separately.  If, on a country-by-country basis, the other active ingredient or ingredients in the combination are not sold separately in said country, Net Sales shall be calculated by multiplying actual Net Sales thereof by the fraction A/C where A is the invoice price of the Licensed Product if sold separately, and C is the invoice price of the combination product.  If, on a country-by-country basis, the Licensed Product is not sold separately in such country, Net Sales shall be determined by the Allos and the Licensors in good faith on the basis of the fair market value of the Licensed Product.

 

1.22        “ Option ” has the meaning set forth in Section 3.2 .

 

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1.23        “ Patent Compounds ” means RH-1 and other compounds claimed in the Licensed Patents listed in Appendix B .

 

1.24        “ Patent Costs ” means fees (including all application filing fees charged by any U.S. or foreign patent office) and reasonable expenses paid to legal counsel, and filing, maintenance and other reasonable out-of-pocket expenses incurred in connection with the prosecution and maintenance of any Licensed Patents, including the expenses incurred in connection with opposition proceedings before the U.S. Patent and Trademark Office or the equivalent proceeding in any foreign patent office.

 

1.25        “ Phase 1 Trial ” means a clinical study that is designed to determine the metabolism and pharmacologic actions of a pharmaceutical product in humans or, the side effects associated with increasing doses, or, if possible, to gain early evidence on effectiveness.

 

1.26        “ Phase 2 Trial ” means a controlled clinical study designed to evaluate the effectiveness of a pharmaceutical product for a particular indication or indications in patients with the disease or condition under study or to determine the common short-term side effects and risks associated with the drug.

 

1.27        “ Phase 3 Trial ” means a randomized, controlled, two-arm clinical study of a pharmaceutical product designed to gather the additional information about effectiveness and safety that is needed to evaluate the overall benefit-risk relationship of the drug or to provide an adequate basis for physician labeling.

 

1.28        “ PICR ” means the Paterson Institute for Cancer Research: Christie Hospital National Health Service Trust, Wilmslow Road, Manchester M20 9BX, a not for profit organisation organized under the laws of England and Wales.

 

1.29        “ RH-1 ” means the Licensors’ proprietary benzoquinone compound, 2,5-diaziridinyl-3-(hydroxymethyl)-6-methyl-1,4-benzoquinone (as claimed in the Licensed Patents listed in Appendix B ), and its racemates, isomers, prodrugs, active metabolites, analogs and any pharmaceutically acceptable salt or complex thereof.

 

1.30        “ Salford Improvements ” means any invention, the practice of which would also require the practice of an invention claimed in or covered by the Licensed Patents and which is a modification of or improvement to the inventions claimed in or covered by the Licensed Patents, made by Salford researchers to whom Salford permits access to the Licensed Technology in the exercise of its reserved rights hereunder.

 

1.31        “ Sublicense Revenue ” means any and all revenues and non-monetary consideration (to be valued at the fair market value thereof at the date of receipt, except for equity, which shall be valued on the date of disposal by Allos) received by Allos or its Affiliates from a Third Party as consideration for the grant of, or any rights in relation to a sublicense under the rights granted to Allos by the Licensors pursuant to Section 2.1 , excluding sums received:  (a) as royalties; and excluding for the avoidance of doubt sums received; (b) for the purchase of an equity interest in Allos equal to or less than the fair market value of such shares at the time of issuance by Allos (provided that the value of such equity interest represents not more than [*] of the total up front consideration for the grant of the sublicense); (c) as fair

 

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consideration for research and development work performed for any Third Party by or on behalf of Allos; (d) as fair consideration for any other property, rights or services that have been or are expected to be furnished by Allos to such sublicensee; or (e) in the form of a loan, as credit or pursuant to a credit line to Allos.  Notwithstanding the foregoing, if Allos receives revenue in consideration for the grant of, or any rights in relation to a sublicense under the licenses granted to Allos hereunder and such sublicense also includes the grant of a license or sublicense to other technology controlled by Allos but not acquired from the Licensors, then the foregoing amount shall be adjusted by a percentage that fairly represents, as reasonably determined by the parties, the contribution of the Licensed Technology to the total revenue received by Allos.  In addition, with respect to any payments made by a sublicensee for milestones achieved that correspond to any of the milestone events described in Section 4.4 below, only those portions of such milestone payments that exceed the corresponding milestone payments to be made by Allos under Section 4.4 will be considered Sublicense Revenue for purposes of this Agreement.

 

1.32       “ Term ” has the meaning set forth in Section 8.1 .

 

1.33       “ Territory ” means worldwide.

 

1.34       “ Third Party ” means any entity other than a party to this Agreement or an Affiliate of such party.

 

1.35       “ Tobacco Company ” means a corporation, company, partnership, other organization or person with a material ownership interest in the tobacco industry (other than ownership interests in investment firms or funds held as part of a portfolio of investments).

 

1.36       “ TTA ” has the meaning given in the Background to this Agreement.

 

1.37       “ Valid Claim ” means (a) an unexpired claim of an issued patent within the Licensed Patents that has not been found to be unpatentable, invalid or unenforceable by a court or other authority in the subject country, from which decision no appeal is taken or can be taken; or (b) a claim of a pending application within the Licensed Patents, which claim has been pending for no more than [*] as of the date upon which pendency is determined.

 

2.                                       LICENSE GRANTS; TECHNOLOGY TRANSFER.

 

2.1          Grants to Allos.

 

(a)           By CRT .  CRT hereby grants to Allos, during the Term and subject to the terms and conditions of this Agreement:

 

(i)           an exclusive (even as to CRT, but subject to CRT’s reserved rights under Section 2.3 ), royalty-bearing license, with the right to grant sublicenses in accordance with Section 2.2 , under CRT’s interest in the Licensed Technology (excluding for this purpose CRT’s interest in CRT Improvements), to make, have made, use, sell, offer for sale and import Licensed Products in the Territory and within the Field of Use; and

 

(ii)         a non-exclusive royalty-free license, with the right to grant sublicenses in accordance with Section 2.2 , under CRT’s interest in the Licensed Technology,

 

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including CRT’s intellectual property rights in and to CRT Improvements, to make, have made, use, sell, offer for sale and import Licensed Products in the Territory and within the Field of Use; provided, however , that Allos shall have the option to include any CRT Improvement under the exclusive license set forth in Section 2.1(a)(i)  above by providing written notice to CRT within [*] after the disclosure by CRT to Allos of such CRT Improvement and reimbursing CRT for any patent costs incurred in connection with such CRT Improvement.

 

(b)           By CU .  CU hereby grants to Allos, during the Term and subject to the terms and conditions of this Agreement, an exclusive (even as to CU, but subject to CU’s reserved rights under Section 2.3 ), royalty-bearing license, with the right to grant sublicenses in accordance with Section 2.2 , under CU’s interest in the Licensed Technology, including CU’s intellectual property rights in and to CU Improvements, to make, have made, use, sell, offer for sale and import Licensed Products in the Territory and within the Field of Use.

 

(c)           By Salford .  Salford hereby grants to Allos, during the Term and subject to the terms and conditions of this Agreement, an exclusive (even as to Salford, but subject to Salford’s reserved rights under Section 2.3 ), royalty-bearing license, with the right to grant sublicenses in accordance with Section 2.2 , under Salford’s interest in the Licensed Technology, including Salford’s intellectual property rights in and to Salford Improvements, to make, have made, use, sell, offer for sale and import Licensed Products in the Territory and within the Field of Use.

 

The foregoing rights include the right to use the Licensed Products to conduct clinical trials and to develop and seek regulatory approval in all jurisdictions within the Territory.

 

2.2          Sublicensing.  Allos may sublicense to Affiliates or any Third Party other than a Tobacco Company the licenses granted in Section 2.1 without the prior written consent of any of the Licensors; provided that the terms and conditions of such sublicenses are consistent with the terms and conditions of this Agreement and such sublicense prohibits further sublicensing of such licenses without the written consent of the Licensors.  Allos agrees to use all commercially reasonable efforts to enforce against breaches of such sublicenses where such breach could be reasonably expected to prejudice the Licensors or the intellectual property rights in the Licensed Technology. Allos shall forward to all Licensors a copy of each fully executed sublicense agreement within thirty (30) days of the execution of such agreement.  The Licensors acknowledge that any obligations of Allos under this Agreement, including an obligation to cure a breach pursuant to Section 8.3 hereof, may be performed by a sublicensee on behalf of Allos but all such obligations remain the obligations of Allos under this Agreement.

 

2.3          Reservation of Rights.  No right or license under the Licensed Technology is granted or shall be granted by implication.  All such rights or licenses are or shall be granted only as expressly provided in the terms of this Agreement.  The Licensors shall retain the non-transferable right to practice the Licensed Technology solely for their own non-clinical, internal, non-commercial research, teaching and education.  For avoidance of doubt, no Licensor may undertake research sponsored by a Third Party commercial entity relating to the Licensed Technology in connection with which such Third Party receives a license or an option to resulting intellectual property; provided, however, that the foregoing will not prevent any Licensor from receiving a general sponsorship or general research funding from a commercial

 

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entity where such entity does not receive a license or option to intellectual property created through use of such sponsorship or research funding.  Any rights reserved by CRT hereunder may be exercised or sublicensed to CR-UK, PICR or both subject to the terms of this Agreement, including, without limitation, the grant of exclusive rights in CRT Improvements to Allos under Section 2.1(a)  hereof.  Neither the Licensors nor CR-UK, PICR or any Affiliate of a Licensor may conduct or initiate any study involving the administration of RH-1 in humans (except the on-going Phase 1 Trial currently being conducted by CR-UK as described more fully in the Data Option Agreement), or authorize a Third Party to do so, without Allos’ prior written consent.

 

2.4          Technology Transfer.

 

(a)           Drug Inventory .  Concurrently with the Effective Date, the Licensors will use their reasonable efforts to facilitate the transfer from NCI of its inventory of RH-1 available as of the Effective Date (including all API and drug product in final form) pursuant to a material transfer agreement that will permit Allos to use such RH-1 inventory for its own internal research purposes and make available such RH-1 inventory to the Licensors for their own (or CR-UK and/or PICR) internal research purposes pursuant to Section 2.3 and to Third Parties for non-clinical and clinical studies conducted on behalf of Allos under an agreement between Allos and such Third Party.  Allos agrees to abide by the terms of such material transfer agreement.  Allos acknowledges that CR-UK and PICR may retain its existing inventory of RH-1 product for use in research permitted under Section 2.3 hereof or pursuant to Section 2.4(a)  of the Data Option Agreement.  Following the Effective Date, Licensor may itself or through a Third Party, synthesize quantities of RH-1 for use in research permitted under Section 2.3 hereof or pursuant to Section 2.4(a)  of the Data Option Agreement.  The Licensors agree that any manufacturing or supply agreements with a Third Party relating to RH-1 will include a provision transferring all rights to Improvements to the applicable Licensor that is a party to such agreement.

 

(b)           Other Materials; Improvements .  As soon as practicable after the Effective Date, but within no more than thirty (30) days, each of CRT, CU and Salford will transfer, and the Licensors will use their reasonable efforts to facilitate the transfer from the NCI, all Licensed Know-How, including without limitation, all relevant supporting manufacturing documentation and all relevant pharmacology, toxicology and any other pre-clinical and clinical information, in each case that is necessary or useful for the further clinical development of RH-1, including without limitation, the filing of an IND.  In addition, during the Term, each of CRT, CU and Salford will be individually responsible to disclose to Allos its own Improvements made, conceived or reduced to practice in connection with the exercise of the rights each party retains under Section 2.3 hereof, as applicable, in reasonable, written detail and for the delivery to Allos of all data, information and documents related thereto, promptly after CRT, CU or Salford, as the case may be, has notice of the creation, conception or reduction to practice of any such Improvement.  No individual Licensor shall be liable to Allos for the failure by any other Licensor to comply with the foregoing obligations.

 

2.5          Government and University Rights.   Notwithstanding any use of descriptive terms within this Agreement such as “exclusive”, this Agreement is subject to all of the terms and conditions of Title 35 U.S.C. §§ 200 et al (the “Bayh-Dole Act”) and 37 C.F.R. 401, as such may be amended.  Further, Allos agrees to take all reasonable action necessary to enable CU to satisfy its obligations thereunder.

 

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3.                                       DEVELOPMENT.

 

3.1          Diligence.   Allos shall use Commercially Reasonable Efforts to develop and obtain regulatory approval of Licensed Products.  At least once in every calendar year during the Term, Allos will either (a) issue an annual report which describes its development activities during the twelve (12) month time period preceding the report or (b) convene a meeting or teleconference with representatives of the Licensors at which Allos’ development activities will be discussed.

 

3.2          Development Milestone.  Pursuant to the Data Option Agreement, Allos has an exclusive option to obtain an exclusive license to certain clinical trial data generated by CR-UK (the “ Option ”).  If Allos exercises the Option as provided in the Data Option Agreement, Allos will provide a copy of its notice of exercise to each of the Licensors.   If Allos exercises its Option, Allos will use Commercially Reasonable Efforts to file an IND within [*] of Option exercise; provided that Allos shall not be in breach of the foregoing development milestone if, in the good faith opinion of Allos, the available data do not support an IND filing within such timeframe; in which case, Allos shall:  (a) initiate additional pre-clinical studies; or (b) use Commercially Reasonable Efforts to take such other actions it deems necessary to support an IND filing.

 

3.3          Sponsored Research .  Allos will give good faith consideration to conducting any Allos-sponsored Phase 1 Trial or Phase 2 Trial for any Patent Compounds, at the University of Colorado Health Sciences Center (the “ UCHSC ”) or at a site affiliated with CR-UK or Salford.

 

4.                                       COMPENSATION.

 

4.1          Up Front Fees.  As partial consideration for the licenses granted pursuant to Section 2.1 , on the Effective Date Allos shall pay an amount equal to [*], to be allocated among the Licensors as follows: (a) CU shall receive [*]; (b) CRT shall receive [*]; and (c) Salford shall receive [*].

 

4.2          Patent Costs Reimbursement.   Allos shall pay to CU on the Effective Date an amount equal to [*] as reimbursement for Patent Costs incurred prior to the Effective Date.

 

4.3          Option Exercise Fee.  As partial consideration for the licenses granted pursuant to Section 2.1 , upon the exercise of the Option (as defined in Section 3.2 ), Allos will pay directly to the Licensors a one-time payment