LICENSE AGREEMENT

License Agreement

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EXELIXIS, INC

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Title: LICENSE AGREEMENT
Governing Law: New York Date: 7/30/2009
Industry: Biotechnology and Drugs Law Firm: Cooley Godward Sector: Healthcare

LICENSE AGREEMENT, Parties: exelixis inc

E XHIBIT 10.1

C ONFIDENTIAL

Execution Copy

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

LICENSE AGREEMENT

T HIS L ICENSE A GREEMENT (the “ Agreement ”) is made and entered into as of May 27, 2009 (the “ Execution Date ”) by and between E XELIXIS , I NC ., a Delaware corporation having an address at 170 Harbor Way, P.O. Box 511, South San Francisco, California 94083-0511 (“ Exelixis ”), and S ANOFI -A VENTIS , a French company, having an address at 174, Avenue de France, 75013 Paris, France (“ Sanofi-Aventis ”). Exelixis and Sanofi-Aventis are sometimes referred to herein individually as a “ Party ” and collectively as the “ Parties ”.

R ECITALS

A. Sanofi-Aventis is a leading pharmaceutical company committed to researching, developing, manufacturing and marketing novel products of high therapeutic value for human and veterinary medicine.

B. Exelixis is a biotechnology company that has expertise relating to the discovery and development of therapeutics and owns the rights to the compounds XL147 and XL765 (as further defined below) that modulate signal transduction pathways involved in oncology and other disease areas.

C. Sanofi-Aventis desires to obtain and Exelixis desires to grant to Sanofi-Aventis exclusive worldwide rights under such Exelixis technology for the development and commercialization of novel therapeutic and prophylactic products based on such compounds.

N OW , T HEREFORE , the Parties agree as follows:

1.	DEFINITIONS

Capitalized terms used in this Agreement (other than the headings of the Sections or Articles) have the following meanings set forth in this Article 1, or, if not listed in this Article 1, the meanings as designated in the text of this Agreement.

1.1 “Affiliate” means, with respect to a particular Party, a person, corporation, partnership, or other entity that controls, is controlled by or is under common control with such Party. For the purposes of the definition in this Section 1.1, the word “ control ” (including, with correlative meaning, the terms “ controlled by ” or “ under the common control with ”) means the actual power, either directly or indirectly through one (1) 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 “Alliance Manager” has the meaning set forth in Section 3.5(a).

1.3 “Annual Development Plan” has the meaning set forth in Section 4.3(a).

1.4 “Approved Plan” means, with respect to a Product, any one or more of the Global Development Plans and each Annual Development Plan, in each case as adopted or approved under the terms of this Agreement.

1.5 “Backup” means: (a) with respect to EXEL-04286147, any [ * ]; and (b) with respect to EXEL-04286765, any [ * ].

1.6 “Calendar Quarter” shall mean any consecutive 3-month period ending March 31, June 30, September 30 or December 31.

1.7 “Clinical Supply Requirements” means the quantities of the Product which are required by a Party or the Parties for the Development of a Product under this Agreement, including, without limitation, the conduct of pre-clinical studies and clinical trials in connection with each Annual Development Plan. “Commercialize” means to promote, market, distribute, sell (and offer for sale or contract to sell) or provide product support for a Product, including by way of example: (a) detailing and other promotional activities in support of a Product; (b) advertising and public relations in support of a Product, including market research, development and distribution of selling, advertising and promotional materials, field literature, direct-to-consumer advertising campaigns, media/journal advertising, and exhibiting at seminars and conventions; (c) developing reimbursement programs and information and data specifically intended for national accounts, managed care organizations, governmental agencies (e.g., federal, state and local), and other group purchasing organizations, including pull-through activities; (d) other co-promotion activities not included in the above; (e) conducting medical education activities and journal advertising; and (f) [ * ]. For clarity, “Commercializing” and “Commercialization” have a correlative meaning.

1.9 “Committee” means the JEC or JDC as the case may be.

1.10 “Confidential Information” has the meaning set forth in Section 10.1.

1.11 “Controlled” means, with respect to any compound, material, Information or intellectual property right, that the Party owns or has a license to such compound, material, Information or intellectual property right and has the ability to grant to the other Party access, a license or a sublicense (as applicable) to such compound, material, Information or intellectual property right as provided for herein without violating the terms of any agreement or other arrangements with any Third Party existing at the time such Party would be first required hereunder to grant the other Party such access, license or sublicense.

1.12 “Development” means, with respect to a Product, those activities, including pre-clinical development activities, clinical trials, supporting manufacturing activities and related regulatory activities, that are [ * ] to: (a) obtain from applicable Regulatory Authorities the Regulatory Approvals with respect to such Product in the applicable regulatory jurisdiction, whether alone or for use together, or in combination, with another active agent or pharmaceutical product and (b) maintain such Regulatory Approvals. To avoid confusion, Development does not include [ * ]. For clarity, “Develop” and “Developing” have a correlative meaning.

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1.13 “Diligent Efforts” means the carrying out of obligations or tasks by a Party in a sustained manner using good faith commercially reasonable and diligent efforts, which efforts shall be consistent with the exercise of prudent scientific and business judgment in accordance with the efforts such Party devotes to products or research or development projects owned by it of similar scientific and commercial potential. Diligent Efforts shall be [ * ].

1.14 “Directly Competing Product” means a [ * ] that: (a) is not a Licensed Compound or a Reverted Product; and (b) [ * ], in each case of subsections (i) – (iii), with [ * ]: (i) [ * ]; (ii) [ * ]; or (iii) [ * ].

1.15 “Dollars” or “$” means the legal tender of the United States of America.

1.16 “Drug Approval Application” or “DAA” means in any country or regulatory jurisdiction, the application for Regulatory Approval required for commercial sale or use of a Product (or with respect to a subsequent Indication) in such country or regulatory jurisdiction.

1.17 “Effective Date” has the meaning set forth in Section 12.3(e).

1.18 “Executive Officers” means: (a) in the case of Exelixis, the President and Chief Executive Officer of Exelixis; and (b) in the case of Sanofi-Aventis, [ * ].

1.19 “Exelixis Clinical Supply Costs” means (a) the [ * ] incurred by Exelixis for having Product Manufactured and purchasing Product for Clinical Supply Requirements under the applicable Global Development Plan, (b) the [ * ] incurred by Exelixis for purchasing comparator agent or placebo requirements for activities contemplated under the applicable Global Development Plan, (c) the [ * ] incurred by Exelixis for filling, packaging, labeling and delivery of such Clinical Supply Requirements, comparator agent, combination agent and/or placebo, as the case may be, for activities contemplated under the applicable Global Development Plan and (d) any irrecoverable VAT or similar taxes actually paid with respect to the Manufacture or delivery of Clinical Supply Requirements. “Exelixis Clinical Trials” means the ongoing, expanded or new clinical trials that are carried out for each Product and that are described in the Global Development Plan or each Annual Development Plan, and any other trials that are designated as Exelixis Clinical Trials by the JDC.

1.21 “Exelixis Development Expenses” means those costs and expenses incurred by Exelixis directly in connection with the Development of a Product in accordance with this Agreement and the applicable Annual Development Plan, including without limitation:

(a) all Out-of-Pocket Costs, including, without limitation, fees and expenses associated with the conduct of Exelixis Clinical Trials or any other mutually agreed Development activities with respect to a Product;

(b) Exelixis FTE Costs;

(c) Exelixis Clinical Supply Costs incurred in connection with the Exelixis Clinical Trials or the supply to Sanofi-Aventis of Clinical Supply Requirements; and

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(d) any other costs or expenses [ * ] incurred in connection with any other mutually agreed research or Development activities of Exelixis with respect to a Product.

1.22 “Exelixis FTE Cost” means, for all Development activities performed by Exelixis in accordance with the Annual Development Plan(s), the amount equal to (a) the number of FTEs required for such Development activity as set forth in the approved Annual Development Plan multiplied by (b) the Exelixis FTE Rate. For the avoidance of doubt, the activity of contract personnel shall be charged as Out-of-Pocket Costs.

1.23 “Exelixis FTE Rate” means initially [ * ] subject to adjustment in accordance with Section 4.5(d).

1.24 “Exelixis Know-How” means all Information Controlled by Exelixis (other than Exelixis Patents) and its Affiliates as of the Effective Date or during the Term that: (a) covers a Licensed Compound, a composition containing a Licensed Compound, a formulation containing a Licensed Compound, or the manufacture or use of a Licensed Compound; and (b) is [ * ] for Sanofi-Aventis to exercise the rights licensed to it under the Agreement or to perform its obligations under the Agreement.

1.25 “Exelixis Patents” means all Patents Controlled by Exelixis and its Affiliates, as of the Effective Date or during the Term (including Exelixis’ Sole Invention Patents) that: (a) cover a Licensed Compound, a composition containing a Licensed Compound, a formulation containing a Licensed Compound, or the manufacture or use of a Licensed Compound; and (b) are [ * ] for Sanofi-Aventis to exercise the rights licensed to it under the Agreement. Exelixis Patents shall include the Patents listed in Exhibit 1.25 attached hereto, such Exhibit to be amended from time to time.

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

1.27 “FTE” means the equivalent of the work of one (1) employee full time for one (1) year consisting of a total of [ * ] per year directly related to the research or Development of any Product or Licensed Compound. Any individual who devotes less than [ * ] per year (or such other number as may be agreed by the JEC) shall be treated as an FTE on a pro-rata basis upon the number of hours worked (based on Exelixis’ internal methodology for calculating the number of hours that comprises an FTE) divided by [ * ].

1.28 “GAAP” means United States generally accepted accounting principles, as they exist from time to time, and any successor set of accounting principles (including IFRS if adopted by the United States Securities and Exchange Commission), consistently applied.

1.29 “Generic Product” means, with respect to a given Product in a given country, any pharmaceutical product that: (a) is marketed for sale in such country by a Third Party; (b) contains as active pharmaceutical ingredient [ * ]; and (c) [ * ]. With respect to a Product that is [ * ], a Generic Product shall, for purposes of this paragraph, contain as active pharmaceutical ingredients [ * ], and meet the conditions defined in (a) and (c) above.

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1.30 “Global Development Plan” has the meaning set forth in Section 4.2(a).

1.31 “HSR Act” means the U.S. Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended from time to time, and the rules, regulations, guidance and requirements promulgated thereunder as may be in effect from time to time.

1.32 “IFRS” means International Financial Reporting Standards, as they exist from time to time, consistently applied.

1.33 “IND” means an Investigational New Drug Application submitted to the FDA in conformance with applicable laws and regulations, or the foreign equivalent of any such application in any other country.

1.34 “Indication” means :

(a) with respect to the oncology therapeutic area, [ * ] (for clarification purposes, (i) [ * ]; and (ii) [ * ]); or,

(b) any disease in therapeutic areas other than oncology.

1.35 “Information” means information, results and data of any type whatsoever, in any tangible or intangible form whatsoever, including, databases, practices, methods, techniques, specifications, formulations, formulae, knowledge, know-how, skill, experience, test data including pharmacological, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, stability data, studies and procedures. For clarity, Information excludes any Patents.

1.36 “Invention” means any and all inventions and improvements conceived or reduced to practice by or on behalf of a Party or the Parties jointly in the performance of its obligations, or the exercise of its rights, under this Agreement.

1.37 “Joint Development Committee” or “JDC” has the meaning set forth in Section 3.1(a).

1.38 “Joint Executive Committee” or “JEC” has the meaning set forth in Section 3.1(a).

1.39 “Joint Invention” means any Invention conceived and/or reduced to practice jointly by or on behalf of both Parties.

1.40 “Joint Invention Patent” means a Patent that claims a Joint Invention.

1.41 “Knowledge” means, with respect of a Party, the [ * ] facts and information in the possession of [ * ] of such Party, or any [ * ], or [ * ], such Party or its Affiliates, [ * ] execution of this Agreement. For purposes of this definition, [ * ] means any person in the [ * ] of a Party.

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1.42 “Launch” means, for each Product in each country, the first arm’s-length sale to a Third Party for use or consumption by the public of such Product in such country after Regulatory Approval of such Product in such country. A Launch shall not include any Product sold for use in clinical trials, for research or for other non-commercial uses, or [ * ].

1.43 “Licensed Compound” means: (a) XL147; or (b) XL765, as the case may be, and “Licensed Compounds” means XL147 and XL765 as such codes are hereinafter defined.

1.44 “Losses” has the meaning set forth in Section 13.1.

1.45 “Major European Countries” means France, Germany, Italy, Spain and the United Kingdom.

1.46 “Major Territories” means the [ * ].

1.47 “Manufacturing” means all activities related to the production, manufacture, processing, filling, finishing, packaging, labeling, inspection, receiving, holding and shipping of Licensed Compounds, Products, or any raw materials or packaging materials with respect thereto, or any intermediate of any of the foregoing, including process and cost optimization, process qualification and validation, commercial manufacture, stability and release testing, quality assurance and quality control. For clarity, “Manufacture” has a correlative meaning.

1.48 “Manufacturing Technology” shall have the meaning set forth in Section 7.4(a).

1.49 “mTOR” means: (a) the gene for [ * ]; (b) the protein encoded by such gene; and (c) all [ * ].

1.50 “Net Sales” means the amount invoiced or otherwise billed by Sanofi-Aventis or its Affiliate or sublicensee for sales or other commercial disposition of a Product to a Third Party purchaser, less the following to the extent included in such billing or otherwise actually allowed or incurred with respect to such sales: (a) discounts, including cash, trade and quantity discounts, price reduction programs, retroactive price adjustments with respect to sales of a Product, charge-back payments and rebates granted to managed health care organizations or to federal, state and local governments (or their respective agencies, purchasers and reimbursers) or to trade customers, including but not limited to, wholesalers and chain and pharmacy buying groups; (b) credits or allowances actually granted upon rejections or returns of Products, including for recalls or damaged goods; (c) freight, postage, shipping and insurance charges actually allowed or paid for delivery of Products, to the extent billed; (d) customs duties, surcharges and other governmental charges incurred in connection with the exportation or importation of a Product; (e) bad debts relating to sales of Products that are actually written off by Sanofi-Aventis in accordance with IFRS, consistently applied, during the applicable royalty calculation period; and (f) taxes, duties or other governmental charges levied on, absorbed or otherwise imposed on sale of Products, including value-added taxes, or other governmental charges otherwise measured by the billing amount, when included in billing, as adjusted for rebates and refunds, but specifically excluding taxes based on net income of the seller; provided that all of the foregoing deductions are calculated in accordance with IFRS.

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Notwithstanding the foregoing, if any Product is sold [ * ], then, solely for the purpose of calculating Net Sales for royalty purposes hereunder, any [ * ] on such Products [ * ] shall be [ * ] for the applicable accounting period. In case of any dispute as to the applicable [ * ] under the preceding sentence, the determination of same shall be calculated and certified by [ * ], whose decision shall be binding.

A sale of a Product is deemed to occur upon invoicing. [ * ].

For sake of clarity and avoidance of doubt, sales by Sanofi-Aventis, its Affiliates or sublicensees of a Product to [ * ]. Any Products [ * ] considered in determining Net Sales hereunder.

In the event a Product is sold as an end-user product consisting of a combination of active functional elements or as a combined product and/or service, Net Sales, for purposes of determining royalty payments on such Product, shall be calculated by multiplying the Net Sales of the end-user product and/or service by the fraction A over A+B, in which A is the gross selling price of the Product portion of the end-user product and/or service when such Product is sold separately during the applicable accounting period in which the sales of the end-user product were made, and B is the gross selling price of the other active elements and/or service, as the case may be, of the end-user product and/or service sold separately during the accounting period in question. All gross selling prices of the elements of such end-user product and/or service shall be calculated as the average gross selling price of the said elements during the applicable accounting period for which the Net Sales are being calculated. In the event that, in any country or countries, no separate sale of either such above-designated Product or such above designated elements of the end-user product and/or service are made during the accounting period in which the sale was made or if gross retail selling price for an active functional element, component or service, as the case may be, cannot be determined for an accounting period, Net Sales allocable to the Product in each such country shall be determined by mutual agreement reached in good faith by the Parties prior to the end of the accounting period in question based on an equitable method of determining same that takes into account, on a country-by-country basis, variations in potency, the relative contribution of each active agent, component or service, as the case may be, in the combination, and relative value to the end user of each active agent, component or service, as the case may be. Notwithstanding the foregoing, the Parties agree that, for purposes of this paragraph, mechanical but not chemical drug delivery vehicles, adjuvants, and excipients shall not be deemed to be “ active ingredients ” or “ active functional elements ”. For clarity, [ * ] such as, without limitation, [ * ], shall [ * ] to be “ active ingredients ” or “ active functional elements ” for purposes of this paragraph.

1.51 “Out-of-Pocket Costs” means costs and expenses paid to Third Parties (or payable to Third Parties and accrued in accordance with GAAP) by Exelixis and/or its Affiliates, if applicable.

1.52 “[ * ]” means a small molecule compound that: (a) contains the chemical scaffold identified in the [ * ]; and (b) [ * ].

1.53 “[ * ]” means a small molecule compound that: (a) contains the chemical scaffold identified in the [ * ]; and (b) [ * ].

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1.54 “Party Vote” has the meaning set forth in Section 3.4(c)(i).

1.55 “Patent” means all: (a) unexpired letters patent (including inventor’s certificates) which have not been held invalid or unenforceable by a court of competent jurisdiction from which no appeal can be taken or has been taken within the required time period (and which have not been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or been abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written agreement), including any substitution, extension, registration, confirmation, reissue, re-examination, supplementary protection certificates, confirmation patents, patent of additions, renewal or any like filing thereof; (b) pending applications for letters patent which have not been canceled, withdrawn from consideration, finally determined to be unallowable by the applicable governmental authority or court for whatever reason (and from which no appeal is or can be taken), and/or abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written consent, including any continuation, division or continuation-in-part thereof and any provisional applications; and (c) any international counterparts to (a) and (b) above.

1.56 “Phase I Clinical Trial” means a clinical trial that generally provides for the first introduction into humans of a Product, with a primary purpose of determining safety, metabolism and pharmacokinetic properties and clinical pharmacology of such Product, and generally consistent with 21 CFR § 312.21(a), as amended (or its successor regulation), or other comparable regulation imposed by a Regulatory Authority in any country.

1.57 “Phase I/II Clinical Trial” means a human clinical trial of a Product, which trial satisfies the requirements for a Phase I Clinical Trial and for a Phase II Clinical Trial.

1.58 “Phase II Clinical Trial” means a human clinical trial of a Product, the principal purpose of which is to make a preliminary determination that such Product is safe for its intended use and to obtain sufficient information about such Product’s efficacy to permit the design of further clinical trials, and generally consistent with 21 CFR § 312.21(b), as amended (or its successor regulation), or other comparable regulation imposed by a Regulatory Authority in any country.

1.59 “Phase II/III Clinical Trial” means a human clinical trial of a Product, that satisfies the requirements for a Phase II Clinical Trial and for a Phase III Clinical Trial.

1.60 “Phase III Clinical Trial” means a pivotal human clinical trial of a Product, which trial is designed to: (a) establish that such Product is safe and efficacious for its intended use; (b) define warnings, precautions and adverse reactions that are associated with such Product in the dosage range to be prescribed; (c) support Regulatory Approval of such Product; and (d) be generally consistent with 21 CFR § 312.21(c), as amended (or its successor regulation), or other comparable regulation imposed by a Regulatory Authority in any country.

1.61 “Phase IV Clinical Trial” means a product support clinical trial of a Product commenced after receipt of Regulatory Approval in the country where such trial is conducted. A Phase IV Clinical Trial may include epidemiological studies, modeling and pharmacoeconomic studies, and investigator-sponsored clinical trials studying Product that are approved by the JDC and that otherwise fit the foregoing definition.).

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1.62 “PI3K” means: (a) the gene encoding [ * ]; (b) the protein encoded by such gene and (c) all [ * ]. For the purposes of this Agreement the term “PI3K” refers to [ * ].

1.63 “Product” means any therapeutic or prophylactic product (for use in animals or humans) in bulk or finished form that comprises or incorporates any Licensed Compound.

1.64 “Regulatory Approval” means any and all approvals (including supplements, amendments, pre- and post-approvals, pricing and reimbursement approvals), licenses, registrations or authorizations of any national, supra-national (e.g., the European Medicines Agency (“ EMEA ”)), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity, that are necessary for the manufacture, distribution, use or sale of a Product in a regulatory jurisdiction.

1.65 “Regulatory Authority” means the applicable national (e.g., the FDA), supra-national (e.g., the EMEA), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity that, in each case, governs the Regulatory Approval of a Product in such applicable regulatory jurisdiction.

1.66 “Reverted Products” has the meaning set forth in Section 11.5(d).

1.67 “Royalty Term” has the meaning set forth in Section 8.5.

1.68 “Sanofi-Aventis Know-How” means all Information Controlled by Sanofi-Aventis (other than Sanofi-Aventis Patents) and its Affiliates as of the Effective Date or during the Term that: (a) covers a Licensed Compound, a composition containing a Licensed Compound, a formulation containing a Licensed Compound, or the manufacture or use of a Licensed Compound; and (b) is [ * ] for Exelixis to exercise the rights licensed to it under the Agreement or to perform its obligations under the Agreement.

1.69 “Sanofi-Aventis Patents” means all Patents Controlled by Sanofi-Aventis and its Affiliates (including Sanofi-Aventis’ Sole Inventions Patents but excluding Exelixis Patents) as of the Effective Date or during the Term that: (a) cover a Licensed Compound, a composition containing a Licensed Compound, a formulation containing a Licensed Compound, or the manufacture or use of a Licensed Compound; and (b) are [ * ] for Exelixis to exercise the rights licensed to it under the Agreement or to perform its obligations under the Agreement.

1.70 “Sole Invention” means any Invention conceived and reduced to practice solely by or on behalf of a Party during the Term.

1.71 “Sole Invention Patent” means a Patent that claims a Sole Invention.

1.72 “Target Potency Threshold” means: (a) for a [ * ], that such small molecule compound [ * ]: (i) [ * ]; and (ii) [ * ]; and (b) for a [ * ], that such small molecule compound [ * ]: (i) [ * ]; (ii) [ * ]; and (iii) [ * ].

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1.73 “Term” has the meaning set forth in Section 11.1.

1.74 “Third Party” means any person or entity other than: (a) Exelixis; (b) Sanofi-Aventis; or (c) an Affiliate of either Party.

1.75 “Valid Claim” means (a) a claim in an issued Patent that has not: (i) expired or been canceled; (ii) been declared invalid by an unreversed and unappealable or unappealed decision of a court or other appropriate body of competent jurisdiction; (iii) been admitted to be invalid or unenforceable through reissue, disclaimer or otherwise; or (iv) been abandoned in accordance with or as permitted by the terms of this Agreement or by mutual written agreement of the Parties; or (b) a claim under an application for a Patent that has been pending [ * ], and which has not been canceled, withdrawn from consideration, finally determined to be unallowable by the applicable governmental authority or court for whatever reason (and from which no appeal is or can be taken), or abandoned.

1.76 “Working Group” has the meaning set forth in Section 3.4(f).

1.77 “XL147” means: (a) the small molecule compound with Exelixis identifier EXEL-04286147; (b) any Backups to EXEL-04286147; and (c) any [ * ] of the compounds described in (a) or (b).

1.78 “XL765” means: (a) the small molecule compound with Exelixis identifier EXEL-04286765; (b) any Backups to EXEL-04286765; and (c) any [ * ] of the compounds described in (a) or (b).

2.	LICENSES AND RELATED RIGHTS

2.1 Licenses to Sanofi-Aventis; Exelixis Retained Rights; and Co-Branding.

(a) Development, Manufacturing and Commercialization. Subject to the terms of this Agreement, Exelixis hereby grants Sanofi-Aventis an exclusive, worldwide, royalty-bearing license (with the right to sublicense), under the Exelixis Patents, the Exelixis Know-How, and Exelixis’ interest in the Joint Invention Patents, to develop, have developed, make, have made, use any Licensed Compound and develop, make, have made, use, import, sell, offer to sell and have sold Products incorporating any Licensed Compound.

(b) Exelixis Retained Rights. Exelixis retains all rights to use the Exelixis Know-How and Exelixis Patents except those expressly granted to Sanofi-Aventis on an exclusive basis under the terms of this Agreement. Notwithstanding the exclusive licenses granted to Sanofi-Aventis pursuant to Section 2.1(a), Exelixis retains the right under the Exelixis Patents and the Exelixis Know-How and the Joint Invention Patents to: (i) make, have made, use, and test Licensed Compounds solely for internal research purposes; and (ii) to perform (and to sublicense Third Parties to perform) Exelixis’ obligations under this Agreement, including for the purpose of performing its activities in connection with the Exelixis Clinical Trials and any related Manufacture of Clinical Supply Requirements under Section 7.2. For clarity, the license granted to Sanofi-Aventis in Section 2.1(a) shall not require Exelixis to remove any Licensed Compounds from Exelixis’ compound library.

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2.2 Sanofi-Aventis License Limitations and Covenants.

(a) Sanofi-Aventis hereby covenants that Sanofi-Aventis shall not (and shall ensure that any of its permitted sublicensees shall not) use any Exelixis Know-How or Exelixis Patents for a purpose other than as set forth in Section 2.1(a) above.

(b) Sanofi-Aventis acknowledges and agrees that, the licenses granted in Section 2.1(a) shall not create (by any means, whether expressly, impliedly or by estoppel) any right or license under any Patents, Information or other intellectual property right that is Controlled by Exelixis to research, develop, manufacture and/or commercialize any compounds (other than Licensed Compounds), and/or any composition containing any of the foregoing.

2.3 Limited License to Exelixis. Subject to the terms of this Agreement, Sanofi-Aventis hereby grants Exelixis a non-exclusive, worldwide, royalty-free license (with the right to sublicense to Affiliates, but without the right to sublicense to Third Parties except with prior written consent of Sanofi-Aventis, which shall not be unreasonably withheld) under the Sanofi-Aventis Know-How, the Sanofi-Aventis Patents and Sanofi-Aventis’ interest in the Joint Invention Patents, solely to perform Exelixis’ obligations under this Agreement, including for the purpose of performing its activities in connection with the Exelixis Clinical Trials and any related Manufacture of Clinical Supply Requirements under Section 7.2.

2.4 Exelixis License Limitations and Covenants.

(a) Exelixis hereby covenants that Exelixis shall not (and shall ensure that any of its permitted sublicensees shall not) use any Sanofi-Aventis Know-How or Sanofi-Aventis Patents for a purpose other than that expressly permitted in Sections 2.3 and 11.5(d).

(b) Each sublicense granted by Exelixis, pursuant to Section 2.3, to a Party who is an Affiliate at the time such license is granted shall terminate immediately upon such Party ceasing to be an Affiliate.

2.5 No Additional Licenses. Except as expressly provided in this Agreement, nothing shall grant either Party any right, title or interest in and to the intellectual property rights of the other Party (either expressly or by implication or estoppel).

2.6 Sublicensing. Each Party shall provide the other Party with the name of each permitted sublicensee of its rights under this Article 2 and a copy of the applicable sublicense agreement; provided that each Party may redact confidential or proprietary terms from such copy, including financial terms. The sublicensing Party shall remain responsible for each permitted sublicensee’s compliance with the applicable terms and conditions of this Agreement.

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2.7 Non-Compete.

(a) General Rule. Subject to Sections 2.7(b) and (c), during the Term, neither Party shall be free to [ * ] a Directly Competing Product.

(b) Exception for [ * ]. Notwithstanding anything to the contrary, if a Party is engaged in [ * ] that: (i) [ * ]; (ii) [ * ]; and (iii) [ * ], then [ * ], solely to [ * ].

(c) Exception for [ * ]. Notwithstanding anything to the contrary, the restrictions in Section 2.7(a) shall not apply to any [ * ]: (i) that [ * ]; (ii) that [ * ]; and (iii) for which [ * ].

3.	GOVERNANCE

3.1 General.

(a) Role of Committees. Subject to Section 3.1(b), Section 3.1(d) and the other terms and conditions of this Agreement, the Parties shall establish: (i) a joint executive committee (the “ Joint Executive Committee ” or “ JEC ”) that will oversee Sanofi-Aventis’ and Exelixis’ activities under this Agreement and facilitate communications between the Parties with respect to the Development and Manufacture of Products and any other issues which the Parties wish to debate at the JEC hereunder; and (ii) a specialized joint committee to focus on the Development of Products (such committee, the “ Joint Development Committee ” or “ JDC ”). Each Committee shall have the responsibilities and authority allocated to it in this Article 3 and elsewhere in this Agreement. It is contemplated that: (X) all significant matters relating to the pre-clinical and clinical Development of Products under this Agreement will be primarily addressed by the JDC and, if appropriate, by the JEC, as contemplated by Section 3.4(c); and (Y) the Parties’ respective activities under this Agreement will be reported to the relevant Committees in a reasonable and appropriate level of detail. The JDC shall provide, on a [ * ] basis (unless otherwise requested by the JEC), updates on its activities and achievements to the JEC for review and comment.

(b) Limitations on the Authority of Committees. Notwithstanding the Committee structure established pursuant to Section 3.1(a), each Party shall retain the rights, powers and discretion granted to it under this Agreement, and no such rights, powers, or discretion shall be delegated to or vested in a Committee unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing. Without limiting the generality of the foregoing, no Committee shall have any authority or jurisdiction to: (i) amend, modify, or waive compliance with this Agreement, any of which shall require mutual written agreement of the Parties; (ii) interpret this Agreement, or determine whether or not a Party has met its diligence or other obligations under the Agreement or whether or not a breach of this Agreement has occurred; (iii) require Exelixis to [ * ] (other than [ * ]) without Exelixis’ express written consent [ * ]; (iv) require Exelixis to [ * ] (other than [ * ]) without Exelixis’ express written consent [ * ]; (v) require Sanofi-Aventis to [ * ] without Sanofi-

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Aventis’ express written consent [ * ]; (vi) make any decision on any matter that this Agreement expressly states is an option or election to be made by a Party; (vii) make any decision that would require Exelixis to [ * ]; (viii) to [ * ] (provided that the appropriate Committee may propose a written amendment to be signed by both Parties which may [ * ]); (ix) adjust the Exelixis FTE Rate; or (x) make any decision matters that are reserved to the consent, approval, agreement or other decision-making authority of one or both Parties in this Agreement and that are not required by this Agreement to be considered by one or more Committees prior to the exercise of such consent, approval or other decision-making authority.

(c) Discontinuation of Participation on a Committee. Each Committee shall continue to exist until the first to occur of: (i) the Parties mutually agreeing to disband the Committee, or (ii) a Party providing to the other Party written notice of its intention to disband and no longer participate in such Committee. Once one Party has provided the other Party written notice as referred to in subclause (ii) above, such Committee shall have no further obligations under this Agreement and such other Party receiving such notice shall have the right to solely decide, without consultation, any matters previously before such Committee, subject to the other terms of this Agreement.

(d) Disbandment of JEC and JDC. The Parties hereby agree that the JEC and the JDC shall be disbanded within [ * ] following the completion of any and all Development activities to be performed by Exelixis hereunder, including but not limited to the Exelixis Clinical Trials.

3.2 Joint Executive Committee.

(a) Formation and Purpose. Exelixis and Sanofi-Aventis shall establish the JEC within [ * ] after the Effective Date. Subject to Sections 3.1(b) and 3.4(c), the JEC responsibility shall be: (a) to determine the global Development strategy for the Products; (b) to coordinate the Parties’ activities hereunder; and (c) as applicable, to review, comment on, approve, and resolve disputes with respect to the foregoing or other matters which the Parties wish to bring to the JEC, including the specific responsibilities of the JEC outlined below. The JEC shall have the membership and shall operate by the procedures set forth in Section 3.4.

(b) Specific Responsibilities of the JEC. In addition to its overall responsibility for the Development strategy of the Products, but subject to Sections 3.1(b) and 3.4(c), the JEC shall, in particular, have the following specific responsibilities:

(i) approve the Global Development Plan and each Annual Development Plan for each Product;

(ii) oversee the Parties’ activities hereunder;

(iii) approve budgets for the Exelixis Development Expenses;

(iv) review all significant and strategic issues within the purview of the JDC;

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(v) oversee the Development of each Product pursuant to its Global Development Plan and respective Annual Development Plan, up to the initiation of Phase III Clinical Trials;

(vi) review and approve any material amendments to the Approved Plans and any other items submitted to the JEC by the JDC;

(vii) provide a forum for disputed matters within the responsibilities of JDC or JEC; and

(viii) such other responsibilities as may be assigned to the JEC pursuant to the Agreement or as may be agreed between the Parties from time to time.

3.3 Joint Development Committee.

(a) Formation and Purpose. Exelixis and Sanofi-Aventis shall establish the JDC within [ * ] after the Effective Date. Subject to Sections 3.1(b) and 3.4(c), the JDC shall oversee, coordinate and expedite the Development of each Product worldwide in order to obtain Regulatory Approvals. The JDC will also facilitate the flow of information with respect to Development activities being conducted for each Product and oversee Development activities required to support Regulatory Approvals. The JDC shall have the membership and shall operate by the procedures set forth in Section 3.4.

(b) Specific Responsibilities of the JDC. In support of its responsibility for overseeing, coordinating and expediting the Development of, and regulatory filings for, each Product, but subject to Sections 3.1(b) and 3.4(c), the JDC shall, in particular:

(i) monitor Development activities, including with respect to operational matters such as enrollment strategies, site selection, CRO contract strategies;

(ii) review and discuss the Global Development Plan and each Annual Development Plan;

(iii) review all material information generated in the course of implementing the Global Development Plan and the Annual Development Plans;

(iv) assist in coordinating scientific interactions and division of responsibilities with respect to Development activities, and resolving disagreements during the course of implementing the Global Development Plan and the Annual Development Plans;

(v) provide on a [ * ] basis updates on its activities and achievements to the JEC for review and comment;

(vi) such other responsibilities as may be assigned to the JDC pursuant to the Agreement or as may be agreed between the Parties from time to time.

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3.4 General Committee Membership and Procedures.

(a) Membership. Each Committee shall be composed of such number of representatives as may be agreed by the Parties. Each of Sanofi-Aventis and Exelixis shall designate representatives with appropriate expertise to serve as members of each Committee. Each Party may replace its Committee representatives at any time upon written notice to the other Party. Each Committee shall have co-chairpersons. Sanofi-Aventis and Exelixis shall each select from their representatives a co-chairperson for each of the Committees, and each Party may change its designated co-chairpersons from time to time upon written notice to the other Party. The Alliance Managers shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting of such Committee, and preparing and issuing minutes of each meeting within [ * ] thereafter; provided that a Committee co-chairperson shall call a meeting of the applicable Committee promptly upon the written request of the other co-chairperson to convene such a meeting. The minutes of each meeting shall, among other things, record all matters acted upon and approved or disapproved by the Committee, actions to be taken, and any matters the Committee failed to resolve. Such minutes will not be finalized until both Alliance Managers review and confirm in writing the accuracy of such minutes.

(b) Meetings. Each Committee shall hold meetings at such times as it elects to do so, but in no event shall such meetings be held less frequently than once every [ * ] for the JDC, and once every [ * ] for the JEC. Each Committee shall meet alternately at Exelixis’ facilities in South San Francisco, California, and Sanofi-Aventis’ facilities in Paris, or at such other locations as the Parties may agree. The Alliance Managers shall, and other employees of each Party involved in the Development, Manufacture or Commercialization of any Product may as needed, attend meetings of each Committee (as nonvoting participants unless they are members of such Committee), and consultants, representatives or advisors involved in the Development, Manufacture or Commercialization of any Product may attend meetings of each Committee as nonvoting observers; provided that such Third Party representatives are under obligations of confidentiality and non-use applicable to the Confidential Information of each Party that are at least as stringent as those set forth in Article 10, and in the case of non-employees of a Party, subject to the consent of the other Party, which shall not be unreasonably withheld or delayed. Each Party shall be responsible for all of its own expenses of participating in any Committee (including in any Working Group). Meetings of any Committee may be held by audio or video teleconference with the consent of each Party, which shall not be unreasonably withheld or delayed; provided that at least [ * ] per year of such Committee shall be held in person. No action taken at any meeting of a Committee shall be effective unless a representative of each Party is participating.

(c) Decision-Making.

(i) Voting on Committee Decisions. Subject to Section 3.1(b), each Party’s designees on a Committee shall, collectively, have one (1) vote (the “ Party Vote ”) on all matters brought before the Committee, which Party Vote shall be determined by [ * ] of such Party’s designees present (in person or otherwise) at the meeting. Except as expressly provided in this Section 3.4(c) and subject to Section 3.1(b), each Committee shall operate as to matters within its jurisdiction by unanimous Party Vote. All decisions of a Committee shall be documented in writing in the minutes of the applicable Committee meeting by the Alliance Managers.

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(ii) [ * ] Decisions. [ * ] shall be made by Sanofi-Aventis, provided however that, [ * ] shall be made by Exelixis, [ * ]. Any dispute regarding a decision made by [ * ] pursuant to this paragraph shall first be referred to the Alliance Managers, and, if the dispute is not resolved within [ * ] after such referral to the Alliance Managers, then it shall, upon written notice by a Party to the other, be referred to the JDC and/or JEC for resolution.

(iii) Disagreements on JDC. Except for matters outside the jurisdiction and authority of the Committees as provided in Section 3.1(b), any disagreement between the designees of Sanofi-Aventis and Exelixis on the JDC shall, at the election of either Party, be addressed, first, with the Alliance Managers, and, if the dispute is not resolved within [ * ] after such referral to the Alliance Managers, then it shall, upon written notice by a Party to the other, be submitted to the JEC for resolution.

(iv) [ * ] Casting Vote on JEC. [ * ] shall have a tie-breaking vote with respect to any matter submitted to the JEC for resolution pursuant to Section 3.2(b), in the event the designees of Sanofi-Aventis and Exelixis on the JEC are unable to make a decision due to a lack of required unanimity. [ * ] right to exercise final decision-making authority pursuant to this paragraph shall be exercised in good faith, with due regard for the impact of such decisions on Products, and, consistent in all material respects with the terms of this Agreement. [ * ] shall make all [ * ] decisions [ * ] (through its JEC or JDC members, as applicable) on such matters and the proposed [ * ] decision.

(d) Meeting Agendas and Minutes. Each Party shall disclose to the other proposed agenda items along with appropriate information at least [ * ] in advance of each meeting of the applicable Committee; provided that under exigent circumstances requiring Committee input, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as such other Party consents to such later addition of such agenda items or the absence of a specific agenda for such Committee meeting.

(e) Multiple JDCs at the Discretion of the JEC. The JEC may determine that a separate JDC be formed for each Product. In such event, the Parties will appoint representatives to such additional committees and such committees will be subject to the all of the applicable terms and conditions of this Agreement with respect to the JDC, in each case, solely with respect to the Product to which such Committees relate.

(f) Working Groups. From time to time, the JEC or JDC may establish and delegate duties to other committees, sub-committees or directed teams (each, a “ Working Group ”) on an “as-needed” basis to oversee particular projects or activities, which delegation shall be reflected in the minutes of the meetings of the applicable Committee. Each such Working Group shall be constituted and shall operate as the JEC or JDC, as the case may be, determines. The Working Groups may be established on an ad hoc basis for purposes of a specific project, for the life of a Product, or on such other basis as the applicable Committee may determine. Each Working Group and its activities shall be subject to the oversight, review and approval of, and shall report to, the Committee that established such Working Group. In no event shall the authority of the Working Group exceed that specified for the relevant Committee in this Article 3. Any disagreement between the designees of Sanofi-Aventis and Exelixis on a Working Group shall be referred to the applicable Committee for resolution.

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(g) Interactions Between Committees and Internal Teams. The Parties recognize that each Party possesses an internal structure (including various committees, teams and review boards) that will be involved in administering such Party’s activities under this Agreement. Each Committee shall establish procedures to facilitate communications between such Committee or Working Group and the relevant internal committee, team or board of each of the Parties, including by requiring appropriate members of such Committee to be available at reasonable times and places and upon reasonable prior notice for making appropriate oral reports to, and responding to reasonable inquiries from, the relevant internal committee, team or board.

3.5 Alliance Managers.

(a) Appointment. Each of the Parties shall appoint a single individual to act as a single point of contact between the Parties (each, an “ Alliance Manager ”). Each Party may change its designated Alliance Manager from time to time upon written notice to the other Party. Any Alliance Manager may designate a substitute to temporarily perform the functions of that Alliance Manager by written notice to the other Party.

(b) Responsibilities. The Alliance Managers shall use good faith efforts to attend all Committee meetings and support the co-chairpersons of each Committee in the discharge of their responsibilities. Alliance Managers shall be nonvoting participants in such Committee meetings, unless they are also appointed members of such Committee pursuant to Section 3.4(a). An Alliance Manager may bring any matter to the attention of any Committee if such Alliance Manager reasonably believes that such matter warrants such attention. Each Alliance Manager shall be charged with creating and maintaining a collaborative work environment within and among the Committees. In addition, each Alliance Manager: (i) will be the point of first referral in all matters of conflict resolution; (ii) will coordinate the relevant functional representatives of the Parties in developing and executing strategies and plans for the Products in an effort to ensure consistency and efficiency throughout the world; (iii) will provide a single point of communication for seeking consensus both internally within the respective Parties’ organizations and between the Parties regarding key strategy and plan issues; (iv) will identify and bring disputes to the attention of the appropriate Committee in a timely manner; (v) will plan and coordinate cooperative efforts and internal and external communications; and (vi) will take responsibility for ensuring that governance activities, such as the conduct of required Committee meetings and production of meeting minutes, occur as set forth in this Agreement, and that relevant action items resulting from such meetings are appropriately carried out or otherwise addressed.

3.6 Independence. Subject to the terms of this Agreement, the activities and resources of each Party shall be managed by such Party, acting independently and in its individual capacity. The relationship between Exelixis and Sanofi-Aventis is that of independent contractors and neither Party shall have the power to bind or obligate the other Party in any manner.

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4.	DEVELOPMENT OF PRODUCTS

4.1 Development Responsibility. Subject to the terms and conditions of this Agreement, Sanofi-Aventis shall, during the Term, have sole authority and responsibility for the Development of each Product in accordance with the Approved Plans, and shall bear all costs and expenses associated therewith (for clarity, any costs and expenses incurred by or on behalf of Exelixis and related to Development work performed prior to the Execution Date shall be borne by Exelixis, subject to the provisions of Section 7.2). Notwithstanding the foregoing, Annual Development Plans may specify that [ * ], pursuant to Section 4.4 below. Sanofi-Aventis shall make such determination in the best interests of each Product Development.

4.2 Global Development Plans.

(a) Scope. For each Product during the period in which there are Exelixis Clinical Trials ongoing, the Development of such Product shall be governed by a comprehensive, multi-year, worldwide plan (the “Global Development Plan” ) covering the Development of such Product for use in the U.S., each of the Major European Countries and Europe [ * ], and, [ * ], for the rest of the world. The Global Development Plan shall: (i) provide a comprehensive Development program that is designed to generate the non-clinical, clinical and regulatory information required for submitting Drug Approval Applications and to obtain Regulatory Approvals for the relevant Indications; (ii) indicate [ * ]; and (iii) set forth those obligations assigned to each Party with respect to the performance of the Development activities contemplated by such Global Development Plan.

(b) Initial Global Development Plan. The initial Global Development Plan shall be presented by the JDC to the JEC for approval by the JEC within [ * ] following the Effective Date.

(c) Updates to the Global Development Plan. Subject to Section 4.2(d), any material update, amendment or modification to any provisions of such Global Development Plan shall require the approval of the JEC.

(d) Reports. Beginning [ * ] after disbandment of the JDC and JEC in accordance with Section 3.1(d), and every [ * ] thereafter during the Term, Sanofi-Aventis shall submit to Exelixis a written progress report, substantially in the form of Exhibit 4.2(d) , which summarizes the Development of Products performed by Sanofi-Aventis.

4.3 Annual Development Plans.

(a) Scope. The Development of each Product [ * ] shall be governed by a detailed and specific worldwide Development plan (each, an “Annual Development Plan” ) covering all material Development activities to be performed for such Product for such year and providing an estimate of the Exelixis Development Expenses to be incurred for such year, based on the information available at the time including patient estimates. Each Annual Development

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Plan shall be proposed by the JDC for approval by the JEC. Each Annual Development Plan for such Product, and any modifications thereto, shall cover, and be consistent in all material respects with, all the Development activities in the then-current Global Development Plan for such Product that are to be performed in that particular calendar year.

(b) Procedure. The initial Annual Development Plan for [ * ] will be determined by the JDC no later than [ * ]. Thereafter, the JDC shall submit on an annual basis an Annual Development Plan for each Product during the period in which there are [ * ] to the JEC for its review, comment, and approval. Each such submission shall be no later than [ * ] of the calendar year immediately preceding the year covered by such Annual Development Plan, with a goal of having the Annual Development Plan approved, and any disputes resolved, by [ * ] of such immediately preceding calendar year.

4.4 Exelixis Clinical Trials.

(a) The Parties have agreed that the initial list of Exelixis Clinical Trials, which will be made part of the Initial Global Development Plan, shall be as set forth in Exhibit 4.4(a) hereof. At the [ * ], the Parties shall also agree on [ * ]. [ * ], the list of Exelixis Clinical Trials may be modified only in accordance with the terms and conditions of Article 3.

(b) Exelixis shall conduct the Exelixis Clinical Trials for each applicable Product in a collaborative and efficient manner. The Parties shall engage in joint decision-making for the Exelixis Clinical Trials as set forth in Article 3.

(c) Notwithstanding anything to the contrary in this Agreement, the Parties agree that Exelixis shall be the sponsor for the Exelixis Clinical Trials, and that Exelixis shall have the responsibility and the authority to act as the sponsor and make those decisions and take all actions necessary to assure compliance with all regulatory requirements. Exelixis agrees to be bound by, and perform all obligations set forth in, 21 C.F.R. §312 related to its role as the sponsor for the Exelixis Clinical Trials for a given Product. Notwithstanding anything to the contrary in this Agreement, Exelixis may discontinue or modify any clinical trial that is part of the Exelixis Clinical Trials without the approval of the JDC or the JEC in the event such actions are: (i) [ * ]; and (ii) [ * ].

(d) The Annual Development Plan may specify that outside contractors (reporting to, or acting on behalf of, Exelixis and reasonably selected by Exelixis) will have responsibility to direct and conduct any additional pre-clinical activities and applicable clinical trials in any country. The parties shall, to the extent practicable and permitted by applicable law, rule or regulation, cooperate, prior to engagement of a given outside contractor, to minimize costs associated with the retention of any outside contractors, including, where possible, the retention by Exelixis of such Sanofi-Aventis contractors where cost savings may be achieved by doing so.

(e) Exelixis shall use Diligent Efforts to carry out its responsibilities under each Annual Development Plan. Exelixis shall have the right to use commercially reasonable discretion in carrying out its obligations under each Annual Development Plan, including

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without limitation: (a) carrying out day-to-day planning and implementation of activities under the Annual Development Plan; (b) managing day-to-day regulatory compliance matters, including adverse event reporting; (c) managing clinical research organizations engaged to carry out activities under the Annual Development Plan; and (d) managing the Exelixis Clinical Trials.

4.5 Exelixis Development Expenses.

(a) Reports and Payments for Exelixis Development Expenses. Promptly after the Effective Date, Exelixis shall provide Sanofi-Aventis with an estimate of the Exelixis Development Expenses (and invoice for Exelixis FTE Costs and for Out-of-Pocket Costs incurred by Exelixis, accompanied by reasonable supporting documentation, given that such invoicing will be on an accrual basis) covering: (i) the period between the Execution Date and the start of the first Calendar Quarter arising after the Effective Date; and (ii) the first Calendar Quarter arising after the Effective Date. By the [ * ] of each subsequent Calendar Quarter during the Term, Exelixis shall provide Sanofi-Aventis with: (A) an estimate of the Exelixis Development Expenses for such Calendar Quarter (and invoice for Exelixis FTE Costs); and (B) with the actual Exelixis Development Expenses for the preceding Calendar Quarter (and invoice for Out-of-Pocket Costs incurred by Exelixis during that Calendar Quarter, accompanied by reasonable supporting documentation, given that such invoicing will be on an accrual basis). Any overpayment or underpayment of the actual Exelixis FTE Costs against the prepayment made for the preceding Calendar Quarter will be netted by Exelixis against the current Calendar Quarter estimate therefor. Sanofi-Aventis shall pay Exelixis the amount in each such invoice within [ * ] after receipt thereof. Sanofi-Aventis shall have the right, at a reasonable time and upon reasonable prior notice [ * ], to audit Exelixis’ records as provided in Section 12.3(c) to confirm the accuracy of Exelixis’ costs and reports with respect to Exelixis Development Expenses under this Agreement.

(b) Accounting of Exelixis Development Expenses. Exelixis agrees to determine Exelixis Development Expenses using its standard accounting procedures, consistently applied, [ * ] as specifically provided in this Agreement. The Parties also recognize that such procedures may change from time to time. The Parties agree that, where such changes are economically material to either Party, and consistent with GAAP, adjustments shall be made to compensate the affected Party to preserve the same economics as reflected under this Agreement under Exelixis’ accounting procedures in effect as of the date on which the activity in question (e.g., Development) first commences under this Agreement. [ * ]. Transfers between a Party and its Affiliates (or between its Affiliates) shall not have effect for purposes of calculating revenues, costs, profits, royalties or other payments or expenses under this Agreement.

(c) [ * ] .

(d) FTE Records and Calculations; Adjustments to Exelixis FTE Rate. Exelixis shall record and account for its FTE effort for the Development of Products to the extent that such FTE efforts are included in Exelixis Development Expenses, and shall report such FTE effort to the JDC on a quarterly basis. The Exelixis FTE Rate may be adjusted annually, with each annual adjustment effective as of January 1 of each calendar year, with the first such annual adjustment to be made as of January 1, 2010, in accordance with the percentage increase or decrease, if any, in the US CPI for the twelve (12) months ending June 30 of the calendar year prior to the calendar year for which the adjustment is being made.

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4.6 Technology and Regulatory Transfer of Licensed Compounds. Exelixis shall disclose or transfer to Sanofi-Aventis the Information and documents described in subsections 4.6(a) – (b) below:

(a) Within [ * ] after the Effective Date Exelixis shall disclose (and provide copies, as applicable) to Sanofi-Aventis any Information, including but not limited to any preclinical data, clinical data, assays, protocols, procedures and any other information in Exelixis’ possession or Control, not previously disclosed to Sanofi-Aventis, and [ * ] to continue or initiate pre-clinical or clinical Development, or in seeking Regulatory Approval of Products.

(b) Exelixis shall transfer, [ * ] to Sanofi-Aventis, [ * ] (except as described below) and upon [ * ] prior written notice to Exelixis: (i) [ * ]; (ii) any agreements [ * ] all or some of the agreements [ * ], and Exelixis shall not be required to transfer, [ * ] the items described in [ * ] that are [ * ] for Exelixis to conduct such Exelixis Clinical Trials until such delegation of authority ceases.

5.	REGULATORY

5.1 Regulatory Responsibility.

(a) Subject to Section 5.1(b) and Section 6.3, Sanofi-Aventis shall, during the Term, have [ * ] control and responsibility for the preparation, drafting, submission and filing, in its own name and at its own cost, of all DAAs, documents, dossiers, etc., for Regulatory Approvals for the Products in the jurisdictions where Sanofi-Aventis determines[ * ] it is commercially reasonable to do so. Subject to Section 5.1(b), Sanofi-Aventis shall have [ * ] responsibility for interacting with any Regulatory Authority regarding any issues, DAAs or any Regulatory Approval, and Exelixis shall provide its reasonable assistance to Sanofi-Aventis (at Sanofi-Aventis’ expense), whenever Sanofi-Aventis seeks such assistance, to answer questions on the Products from any Regulatory Authority. Additionally, in the event Sanofi-Aventis must communicate with or respond to a Regulatory Authority within a very limited amount of time and needs the assistance of Exelixis for such interaction with the Regulatory Authority, Exelixis will use its Diligent Efforts to assist Sanofi-Aventis within the required time frame (at Sanofi-Aventis’ expense). Furthermore, subject to Section 5.1(b) and to applicable laws and regulations, Sanofi-Aventis shall own all Regulatory Approvals, submissions and dossiers that it files as well as the Regulatory Approvals that are granted during the Term, including supporting documentation and information.

(b) Pending the transfer of an IND held by Exelixis with respect to a Product pursuant to Section 4.6(b), Exelixis shall remain the primary contact of Regulatory Authorities for regulatory activities regarding such Product, on behalf of Sanofi-Aventis. However, Sanofi-Aventis shall have the right to review and approve in advance any communication with any

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Regulatory Authority regarding such Product. Upon the transfer of an IND with respect to a Product pursuant to Section 4.6(b), Exelixis shall notify the applicable Regulatory Authorities in writing that it is transferring such INDs for the applicable Product to Sanofi-Aventis, and Sanofi-Aventis would notify the applicable Regulatory Authorities in writing that it is accepting such INDs and all responsibilities associated therewith (including without limitation, the responsibility for reporting adverse events), other than any ongoing activities of Exelixis relating to ongoing Exelixis Clinical Trials (if applicable).

5.2 Other Regulatory Matters.

(a) Pharmacovigilance. Sanofi-Aventis shall be responsible for the management of all pharmacovigilance and all reports required by the Regulatory Authorities in order to obtain and maintain any Regulatory Approvals granted for the Products in the Territory, including, without limitation, adverse drug experience reports. The Parties agree to negotiate and execute a definitive safety data exchange agreement (the “SDEA”) within [ * ] of the Effective Date of this Agreement, or within another time period as mutually agreed by the Parties, which will describe the responsibilities and procedures to be followed by the Parties with regard to all regulatory reporting for the Products under this Agreement.

(b) Pricing and Reimbursement Approvals. Sanofi-Aventis and its Affiliates shall have sole responsibility in the conduct of all pricing and reimbursement approval proceedings relating to each Product.

(c) Rights of Reference. Sanofi-Aventis shall have the right to cross reference, file or incorporate by reference any regulatory filing or drug master file (as defined in the Code of Federal Regulations) (and any data contained therein) for any Product (including all Approvals) in order to support regulatory filings that Sanofi-Aventis is permitted to make under this Agreement for any such Product and to enable Sanofi-Aventis to fulfill its obligations under this Agreement to Develop, Manufacture (anywhere in the world), or Commercialize any such Product.

5.3 Recalls. Any decision to initiate a recall or withdrawal of a Product shall be made by Sanofi-Aventis. In the event of any recall or withdrawal, Sanofi-Aventis shall take any and all necessary action to implement such recall or withdrawal in accordance with applicable law, with assistance from Exelixis as reasonably requested by Sanofi-Aventis. The costs of any such recall or withdrawal shall be borne solely by Sanofi-Aventis [ * ].

6.	COMMERCIALIZATION; SANOFI-AVENTIS RESPONSIBILITIES

6.1 Scope. Sanofi-Aventis shall have sole control and responsibility for, and bear all costs and expenses associated with, the Commercialization of all Licensed Compounds and/or Products. In connection with the foregoing, Sanofi-Aventis shall be solely responsible for defining the marketing strategy and promotional policy for the Products and, subject to Section 6.2, for creating all packaging and promotional materials for the Products. Subject to Section 6.2, Sanofi-Aventis shall own all right, title and interest in and to any and all such promotional materials, including all applicable copyrights, trademarks, program names and domain names relating to the Products.

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6.2 Packaging and Marketing Materials.

(a) During the Term, Sanofi-Aventis shall ensure that the packaging artwork and label and the marketing materials, used for Commercializing each Product in the U.S., Japan, and the Major European Countries, clearly identify Exelixis as the licensor of the Product, provided however that any such references comply with applicable laws and market practice in such countries. For the purpose of the foregoing, Exelixis grants Sanofi-Aventis the right to use certain of Exelixis corporate trademarks in accordance with the Trademark License Agreement attached as Exhibit 6.2.

(b) Sanofi-Aventis shall provide to Exelixis, the mock-ups for any packaging artwork and labels or marketing material it wishes to use for the Commercialization of a Product.

(c) In the event Exelixis shall desire to make any change to any printing, packaging or labeling proposed or used for a Product to reflect any changes to its trademark, tradename, logo or other features thereof (other than a change to correct an error or omission in such trademark, tradename, logo or other features), Exelixis shall be responsible for, and shall reimburse Sanofi-Aventis for, all costs associated with such changes, if any, including the costs of any inventory of the Product or labeling, printing or packaging materials rendered obsolete or rejected as a result of such change, including the cost of destruction of any of the foregoing.

6.3 Diligence. During the Term, Sanofi-Aventis shall use Diligent Efforts to Develop and obtain Regulatory Approvals for [ * ] Products and Commercialize the approved Products in the approved Indications in the Major Territories; provided that Sanofi-Aventis may satisfy such obligation by sublicensing the Development and Commercialization of a Product to a Third Party pursuant to the terms of this Agreement. Exelixis may notify Sanofi-Aventis in writing if Exelixis in good faith believes that Sanofi-Aventis is not meeting its diligence obligations set forth in this Section 6.3, and the Parties shall meet and discuss the matter in good faith. Exelixis may further request review of Sanofi-Aventis’ records generated and maintained as required under Sections 6.4 and 12.3(c) below, to the extent those records relate to Development, Manufacture and Commercialization of a Product.

6.4 Reports. During the Term, Sanofi-Aventis shall submit to Exelixis every [ * ] a written progress report summarizing the Commercialization of Products performed by Sanofi-Aventis substantially in the form of Exhibit 6.4 . If reasonably necessary or useful for Exelixis to exercise its rights under this Agreement, Exelixis may request that Sanofi-Aventis provide more detailed information and data regarding such reports by Sanofi-Aventis, and Sanofi-Aventis shall promptly provide Exelixis with information and data as is reasonably related to such request, at Exelixis’ expense. All such reports shall be considered Confidential Information of Sanofi-Aventis.

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7.	MANUFACTURING AND SUPPLY

7.1 Manufacturing Generally.

(a) Subject to Sections 7.1(b) and 7.2 and in accordance with Section 7.4, it is the Parties’ intention to transfer responsibility for the Manufacture of the Licensed Compounds and the Products to Sanofi-Aventis within the shortest delay possible following the Effective Date and Exelixis agrees to cooperate with Sanofi-Aventis toward that goal.

(b) Notwithstanding the foregoing, Exelixis agrees that it shall retain responsibility for the Manufacture and supply of all of the Clinical Supply Requirements necessary for the Development of the Products in accordance with Section 7.2, until and pending the actual transfer of the Manufacturing responsibility to Sanofi-Aventis in accordance with Section 7.4.

7.2 Manufacture of Clinical Supply Requirements by Exelixis. Pending the transfer to Sanofi-Aventis of the Manufacturing responsibility, Exelixis shall Manufacture and supply, or arrange with a Third Party for the Manufacture and supply of any Clinical Supply Requirements for the Development of the Products until completion of the Manufacturing Technology transfer in accordance with Section 7.4, and the Parties shall use Diligent Efforts to complete such transfer before [ * ]. Any Exelixis Clinical Supply Costs incurred in connection with the foregoing shall be borne solely by Sanofi-Aventis, including expenses for Exelixis’ transfer to Sanofi-Aventis of any Clinical Supply Requirements that may exist as of the Execution Date and through the Effective Date, and that will be invoiced at cost to Sanofi-Aventis [ * ]. Promptly after the Effective Date, the Parties shall enter into a letter agreement, substantially in the form of the letter described in Exhibit 7.2 , containing the terms and conditions for the quality responsibilities associated with Exelixis’ provision of Clinical Supply Requirements for the Development of the Product.

7.3 Manufacture of Commercial Quantities. Sanofi-Aventis shall Manufacture, or arrange with Third Parties for the Manufacture of any Product (in bulk and finished form) for Commercialization, and Sanofi-Aventis shall bear the costs of such Manufacture. Sanofi-Aventis shall, at all times, have sole control and responsibility for the manufacturing process development with respect to the Products for Commercialization and expenses associated therewith.

7.4 Transfer of Manufacturing Technology.

(a) [ * ] after the Effective Date, Exelixis shall disclose (and provide copies, as applicable) to either Sanofi-Aventis or a Third Party manufacturer designated by Sanofi-Aventis [ * ] that is Controlled by Exelixis, required for the Manufacture of the Licensed Compounds and Products and is [ * ] to enable Sanofi-Aventis or such Third Party manufacturer (as appropriate) to Manufacture such Products. Such Information shall include, without limitation, the Information and documents set forth in Exhibit 7.4 hereof (the “ Manufacturing Technology ”). The steps, planning and obligations of the Parties regarding the transfer of the Manufacturing Technology for each Product (for both the active pharmaceutical ingredient and the drug product) will be set forth in a “Technology Transfer Master Plan API” and a “Technology Transfer Master Plan Drug Product” respectively, to be executed between the Parties [ * ].

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(b) Exelixis will [ * ] use Diligent Efforts to provide Sanofi-Aventis, upon request, with any additional information or on-site support as may be required by Sanofi-Aventis and its Affiliates in connection with the transfer of the Manufacturing Technology. Sanofi-Aventis shall reimburse Exelixis for any on-site support rendered at the Exelixis FTE Rate of per FTE-day, provided further Exelixis shall in no event be obliged to provide more than [ * ] FTE-day in total, unless the Parties otherwise agree in writing.

(c) At any time during the transfer of the Manufacturing Technology, Sanofi-Aventis may require to perform a technical audit of Exelixis’ or any Third Party’s facilities where the Products and their respective active pharmaceutical ingredient are Manufactured. During such audit, Sanofi Aventis shall have the right to review the batch records and any other relevant documentation related to the Manufacture of the Product, and Exelixis shall use its Diligent Efforts to facilitate such review. Should Exelixis’ agreement with the applicable Third Party vendor not permit or contemplate the possibility of such an audit, [ * ].

(d) For the purpose of this Section 7.4, the actual transfer to Sanofi-Aventis of the Manufacturing Technology with respect to a particular Product shall be deemed completed when [ * ].

(e) Sanofi-Aventis and/or its Third Party manufacturer shall use [ * ] transferred pursuant to Section 7.4(a) solely for the purpose of Manufacturing any Products for use by Exelixis or Sanofi-Aventis under this Agreement, and for no other purpose.

(f) Sanofi-Aventis acknowledges and agrees that Exelixis may condition its agreement to the transfer of any Manufacturing Technology to a Third Party manufacturer on the execution of a confidentiality agreement between such Third Party manufacturer and Exelixis that contains terms substantially equivalent to those of Article 10 of this Agreement.

8.	COMPENSATION

8.1 Upfront Fee. Sanofi-Aventis shall pay Exelixis an upfront fee of One Hundred Twenty Million Dollars ($120,000,000) within [ * ] after the Effective Date. The upfront fee payment made by Sanofi-Aventis to Exelixis pursuant to this Section 8.1 shall be noncreditable and nonrefundable.

8.2 Milestone Payments. All milestone payments made by Sanofi-Aventis to Exelixis hereunder shall be noncreditable and nonrefundable.

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(a) Development and Regulatory Milestones. Sanofi-Aventis shall make the milestone payments set forth below to Exelixis within [ * ] after the achievement of each of the following events by Sanofi-Aventis or any of its Affiliates or sublicensees:

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