EXHIBIT 10.54
***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. §§ 200.80(b)(4) and
240.24b-2(b)(1)
THIS LICENSE
AGREEMENT (the “Agreement”) effective as of
April 4, 1996 (the “Effective Date”), is entered
by and between CIBA-GEIGY Limited, a Swiss corporation, with
principal offices at Klybeckstrasse 141, Basel, Switzerland
(“Ciba”), and TherAtid, Incorporated, a California
corporation, having a principal place of business at 828 Eastbrook
Court, Danville, California 94506-1206
(“TherAtid”). All references to TherAtid
shall include its Affiliates.
A. Ciba is
the sole and exclusive owner of certain Patent Rights and Know-How
(as such terms are defined below) relating to CGP19835 and CGP40774
and analogs of such compounds, and the use thereof, and related
subject matter; and
B. TherAtid
desires to obtain an exclusive license to the Patent Rights and
Know-How and Ciba is willing to grant such a license to TherAtid,
on the terms and conditions herein.
NOW,
THEREFORE, Ciba and TherAtid agree as follows:
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1.1
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“Affiliate”
means, with respect to
each party, any legal entity that directly or indirectly controls,
is controlled by, or is under common control with, such party, but
only for so long as such control shall continue. One entity shall
be deemed to control another entity if such entity has the power to
direct or cause the direction of the management or policies of the
other entity.
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1.2
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“Confidential
Information” shall mean (i) any proprietary
or confidential information or material in tangible form disclosed
hereunder that is marked as “confidential” at the time
it is delivered to the receiving party, or (ii) proprietary or
confidential information disclosed orally hereunder which is
identified as confidential or proprietary when disclosed and such
disclosure of confidential information is confirmed in writing
within thirty (30) days by the disclosing party.
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1.3
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“Dominating
Patent” shall mean an unexpired patent owned
or controlled by a third party that has not been invalidated in a
final unappealed or unappealable judgment by a court or competent
jurisdiction, which patent covers the manufacture, use or sale of
Licensed Products under circumstances such that TherAtid or its
sublicensees have no commercially reasonable alternative to
obtaining a royalty-bearing license under such patent in order to
commercialize Licensed Products under this Agreement.
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1.4
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“Field”
shall mean all human and
veterinary therapeutic and prophylactic uses, excluding use as a
vaccine adjuvant and, with respect to GCP 40774, excluding use for
the treatment of asthma and other allergic diseases which
materially affect lung function. As used herein, “vaccine
adjuvant” shall mean a substance administered with an antigen
to enhance the immune response to that antigen.
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1.5
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“Gross
Profit” shall mean Net Sales amounts
received by TherAtid for the commercial sale of Licensed Products,
less (i) any taxes or other government levies due with regard
to such amounts, (ii) any expenses incurred or accrued in
connection with the manufacture, use, marketing, sale or other
disposition of the Licensed Products, and (iii) general and
administrative expenses, reasonably allocated according to
GAAP.
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1.6
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“Know-How”
shall mean all ideas,
inventions, data, trade secrets, instructions, processes, formulas,
chemical, pharmacological, toxicological, pharmaceutical, physical
and analytical, manufacturing (including but not limited to
processes, yields, reagents and conditions relating to compound
manufacture) data and information, owned or controlled by Ciba
existing as of the Effective Date, which are not generally known
during the term of this Agreement, and which are sufficient to
allow a chemist skilled in the art to synthesize and manufacture
Licensed Products, in liposome form or otherwise.
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1.7
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“Licensed
Product” will mean any product which
(i) but for the license granted herein would infringe a Valid
Claim in the country such product is made or sold, or
(ii) incorporates in material part or is made using Know
How.
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1.8
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“Net Sales”
means the gross revenues
actually received from sales of Licensed Products by TherAtid and
its sublicensees, less (i) normal and customary rebates, and
cash and trade discounts, actually taken, (ii) sales, use
and/or other excise taxes or duties actually paid, (iii) the
cost of any packages and packing, if billed separately,
(iv) insurance costs and outbound transportation charges
prepaid or allowed, (v) import and/or export duties actually
paid, and (vi) amounts allowed or credited due to
returns.
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1.9
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“Patent
Rights” means the patents listed on
Exhibit A hereto, and all divisions, continuations,
continuations-in-part, and substitutions thereof. Patent Rights
shall also include any U.S. and foreign patent applications or
patents owned by or licensed to Ciba which claim inventions
relating to the patent rights listed on Exhibit A, conceived
or reduced to practice in connection with research sponsored by
Ciba including, without limitation, in the laboratory of
Dr. Isaiah J. Fidler at the M.D. Anderson Cancer Center at the
University of Texas.
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1.10
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“Territory”
means all countries of
the world.
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1.11
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“Valid Claim”
means (i) a claim
of an issued and unexpired patent included within the Patent Rights
which has not been held unenforceable or invalid by a court or
other governmental agency of competent jurisdiction, and which has
not been disclaimed or admitted to be invalid or unenforceable
through reissue or otherwise, or (ii) a claim of a pending
application within the Patent Rights.
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Ciba hereby grants
to TherAtid an exclusive, worldwide, royalty bearing license under
the Patent Rights, with the right to grant and authorize
sub-licenses, to make, have made, import, have imported, use, sell,
offer for sale and otherwise exploit the Licensed Products in the
Field in the Territory.
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3.1
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Delivery of Know-How.
Within ninety
(90) days after the Effective Date, Ciba shall deliver to
TherAtid the Know-How in electronic or hard copy
formats.
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3.2
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Technical Assistance.
Until six
(6) months following delivery of the Know-How pursuant to
Section 3.1, at TherAtid’s request, Ciba shall promptly
provide TherAtid or its designee, instruction, advice and
assistance regarding the practice of the Patent Rights and use of
the Know-How, including without limitation, relating to the
manufacture of compounds within the scope of the Patent Rights.
Such assistance shall be provided at a site agreed by the parties,
at agreed times. TherAtid shall reimburse Ciba for any
out-of-pocket expenses incurred in connection with such
assistance.
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3.3
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Regulatory Data and
Filings. On
the Effective Date, without additional cost, Ciba shall promptly
provide TherAtid with access to and the right to use all regulatory
filings made by Ciba or its Affiliates with respect to compounds
within the scope of the Patent Rights, together with the underlying
pre-clinical and clinical data. TherAtid and its sublicensees may
use and incorporate such filings and data in support of efforts to
obtain regulatory approval of Licensed Products
worldwide.
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3.4
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Clinical Trial Data.
So far as it has the
right to do so, Ciba shall provide TherAtid with all data from any
clinical trials performed by Ciba or its Affiliates with respect to
any compound within the scope of the Patent Rights including but
not limited to copies of any clinical trial agreement(s),
protocols, case report forms and supporting documentation relating
to Phase II trials of such compounds. For those data yet to become
available from the ongoing Phase III clinical trial with respect to
the evaluation of MTP-PE (CGP 19835) for the treatment of
osteogenic sarcoma in progress at the National Cancer Institute of
the U.S. National Institutes of Health (“NCI”) on the
Effective Date, Ciba will use all reasonable endeavors to help
TherAtid obtain access to such data directly from the NCI,
including making a written request to the NCI to give TherAtid
access to the data.
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TherAtid and its sublicensees may
use and incorporate such data in support of filings for regulatory
approval of Licensed Products worldwide.
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3.5
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Other Intellectual
Property. In
the event that Ciba has any option or other rights with respect to
intellectual property relating to the Field developed in connection
with research sponsored by Ciba including, without limitation, in
the laboratory of Dr. Isaiah J. Fidler at the M.D. Anderson
Cancer Center at the University of Texas, and the owner of such
intellectual property refuses to acknowledge or contests such
rights, Ciba shall use reasonable endeavors to perfect and enforce
its interest in such intellectual property.
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4.1
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License Fee. Within thirty (30) days of the
Effective Date, TherAtid shall pay to Ciba a license fee of [. . .
*** . . .].
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4.2
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Annual Maintenance Fee.
TherAtid shall pay to
Ciba an annual maintenance fee of [ . . *** . . .] during the
period commencing on the first anniversary of the Effective Date
and continuing until the initiation of any Phase III clinical trial
sponsored by TherAtid or a TherAtid sublicensee for any Licensed
Product; provided, however, that in the event that any additional
patients are added to the Phase III clinical trial of MTP-PE (CGP
19835) in progress on the Effective Date at the National Cancer
Institute of the U.S. National Institutes of Health,
TherAtid’s obligations to pay the annual maintenance fee
shall terminate on the date that the first such patient is enrolled
in such clinical trial.
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4.3
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Milestone Payments.
Unless the Agreement is
terminated earlier, following the first achievement by TherAtid of
the following milestones with respect to such first Licensed
Product for humans incorporating CGP19835, and the first Licensed
Product for humans incorporating CGP40774, TherAtid shall pay Ciba
one-time milestone payments, as follows:
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Event
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Payment
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[. . . *** . .
.]
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[. . . *** . .
.]
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Such payments
may be made by TherAtid in a staged manner such that the total
amount payable in any year with respect to all such milestones
shall not exceed [. . . *** . . .] of TherAtid’s Gross Profit
in any year, with the balance due being carried forward to later
years, without incurring interest.
[. . . *** . .
.] of any milestone payment made upon [. . . *** . . .] shall be
creditable against royalties due Ciba hereunder.
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* Confidential
Treatment
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Requested
under 17
C.F.R.
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§§
200.80(b)(4) and
240.24b-2(b)(1)
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The payments
set forth above shall be made with respect to each of CGP19835 and
CGP40774; provided, however, if TherAtid ceases all development of
CGP19835 or CGP40774 after having made payments with respect to the
applicable compound under this Section 4.3 following the
accomplishment of any milestone specified herein, there shall be no
payment due upon the accomplishment of that same milestone with
respect to any subsequent back-up compound after the first backup
compound pursued by TherAtid. When milestones are achieved with
respect to such first back-up compound which were not previously
paid with respect to an earlier compound, such milestone payments
shall be paid pursuant to this Section 4.3.
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4.4
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Royalties. In consideration of the license
granted herein, TherAtid shall pay to Ciba royalties on Net Sales
of Licensed Products sold by TherAtid on a Licensed
Product-by-Licensed Product basis as set forth below:
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4.4.1
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Licensed Products Sold by
TherAtid. TherAtid shall pay to Ciba the
following royalties with respect to Net Sales of Licensed Products
sold by TherAtid, as follows:
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(a)
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Until the tenth anniversary of the
first commercial sale of a particular Licensed Product:
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[. . . *** . .
.]
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[. . . *** . .
.]
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(b)
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In
the period following the tenth anniversary of the first commercial
sale of a particular Licensed Product until the fifteenth
anniversary of such commercial sale:
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[. . . *** . .
.]
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[. . . *** . .
.]
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4.4.2
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Licensed Products Sold by
Sublicensees . TherAtid shall pay to Ciba the
following royalties with respect to Net Sales of Licensed Products
sold by sublicensees of TherAtid, as follows :
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* Confidential
Treatment
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Requested
under 17
C.F.R.
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§§
200.80(b)(4) and
240.24b-2(b)(1)
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(a)
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Until the tenth anniversary of the
first commercial sale of a particular Licensed Product:
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[. . . *** . .
.]
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[. . . *** . .
.]
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(b)
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In
the period following the tenth anniversary of the first commercial
sale of a particular Licensed Product until the fifteenth
anniversary of such commercial sale:
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[. . . *** . .
.]
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[. . . *** . .
.]
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Notwithstanding
the above, in the event that TherAtid has an ownership interest,
direct or indirect, of five percent (5%) or more in any
sublicensee, royalties shall be due with respect to sales of
Licensed Products at the rates set forth in Section 4.2.1,
rather than the rates set forth in this
Section 4.2.2.
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4.4.3
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Royalty Reduction.
The royalty rates set
forth in Sections 4.4.1 and 4.4.2 above shall be reduced by
fifty percent (50%) if the applicable Licensed Products are not
within the scope of an issued Valid Claim within the Patent Rights
in the country such Licensed Products are either made or
sold.
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4.5
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Commercial
Impracticability. Notwithstanding the above, in the
event that TherAtid believes that the foregoing royalty rates would
make the sale of Licensed Products commercially impracticable it
may notify Ciba, and in such event the parties shall negotiate in
good faith a reduction in such royalties; provided, the foregoing
terms shall remain in effect until such other terms are agreed in
writing.
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* Confidential
Treatment
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Requested
under 17
C.F.R.
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§§
200.80(b)(4) and
240.24b-2(b)(1)
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4.6
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One Royalty. No more than one royalty payment
shall be due with respect to a sale of a particular Licensed
Product. No multiple royalties shall be payable because any
Licensed Product, or its manufacture, sale or use is covered by
more than one Valid Claim. No royalty shall be payable under
Section 4.4 above with respect to sales of Licensed Products
among TherAtid and its Sublicensees, but shall be payable on sales
of Licensed Products by TherAtid or its sublicensees to third
parties, nor shall a royalty be payable under this Article 4
with respect to Licensed Products distributed for use in research
and/or development, in clinical trials or as promotional samples if
such promotional samples are provided without charge.
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5.1
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Payment Method.
All payments due
hereunder shall be made in U.S. dollars, and shall be made by bank
wire transfer in immediately available funds to an account
designated by Ciba.. Any payments that are not paid on the date
such payments are due under this Agreement shall bear interest to
the extent permitted by applicable law at the prime rate as
reported by the Chase Manhattan Bank, New York, New York, on the
date such payment is due calculated on the number of days such
payment is delinquent. This Section 5.1 shall in no way limit
any other remedies available to Ciba.
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5.2
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Currency Conversion.
If any currency
conversion shall be required in connection with the calculation of
royalties hereunder, such conversion shall be made using the
selling exchange rate for conversion of the foreign currency into
U.S. dollars, quoted for current “sell” transactions
reported in The Wall Street Journal for the last business
day of the calendar quarter to which such payment
pertains.
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5.3
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Restrictions on Payment. To the
extent and as long as the laws and/or regulations in force in any
country prohibit the payment, conversion or remittance of the
royalties as hereby contemplated, TherAtid’s obligations
under Article 5 may be discharged by the deposit thereof to
the account of TherAtid, or its designee, in any commercial bank or
trust company selected by Ciba located in such country; provided,
that no infraction of law or regulation occurs in making such
deposit. If due to restrictions or prohibitions imposed by national
or international authority, payments cannot be made as aforesaid,
the parties shall consult with a view to finding a prompt and
acceptable solution, and TherAtid will, from time to time, deposit
such monies as Ciba may lawfully direct, at no additional
out-of-pocket expense to TherAtid.
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5.4
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Withholding Taxes.
All royalty amounts
required to be paid to Ciba pursuant to this Agreement may be paid
with deduction for withholding for or on account of any taxes
(other than taxes imposed on or measured by net income) or similar
governmental charge imposed by a jurisdiction other
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than the United
States (“Withholding Taxes”) to the extent Ciba or its
successor has the lawful right to utilize the Withholding Taxes
paid by TherAtid as a credit against Ciba’s regular tax
liability. TherAtid shall provide Ciba a certificate evidencing
payment of any Withholding Taxes hereunder.
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6.1
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Royalty Reports.
TherAtid shall deliver
to Ciba within sixty (60) days after the end of each calendar
quarter in which Licensed Products are sold a written report
setting forth in reasonable detail, on a country-by-country and
Licensed Product-by-Licensed Product basis, the calculation of the
royalties payable to Ciba for such calendar quarter, including the
Licensed Products sold in each country, the Net Sales thereof, and
all amounts received from sublicensees for sales of Licensed
Products. Such reports shall be Confidential Information of
TherAtid subject to Article 8 herein.
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6.2
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Inspection of Books and
Records. TherAtid and its sublicensees shall
maintain accurate books and records which enable the calculation of
royalties payable hereunder to be verified. TherAtid shall retain
the books and records for each quarterly period for three
(3) years after the submission of the corresponding report
under Section 6.1 hereof. Upon thirty (30) days prior
notice to TherAtid and the pertinent sublicensee, independent
accountants selected by Ciba, reasonably acceptable to TherAtid,
after entering into a confidentiality agreement with TherAtid, may
have access to the books and records of TherAtid and its
sublicensees to conduct a review or audit once per calendar year,
for the sole purpose of verifying the accuracy of TherAtid’s
payments and compliance with this Agreement. The accounting firm
shall report to Ciba only whether there has been a royalty
underpayment and, if so, the amount thereof. Such access shall be
permitted during TherAtid’s normal business hours during the
term of this Agreement and for two (2) years after the
expiration or termination of this Agreement. Any such inspection or
audit shall be at Ciba’s expense, however, in the event an
inspection reveals underpayment of five percent (5%) or more in any
audit period, TherAtid shall pay the costs of the inspection and
promptly pay to Ciba any underpayment with interest from the date
such mount(s) were due, at the prime rate reported by the Chase
Manhattan Bank, New York, New York.
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7.1
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Reasonable Efforts. TherAtid agrees to
use reasonable efforts consistent with its prudent business
judgment to diligently develop and commercialize the Patent Rights
and obtain such approvals as may be necessary for the sale of the
Licensed Products in the United States and such other worldwide
markets as TherAtid elects to commercialize the Licensed Products.
TherAtid shall notify Ciba within thirty (30) days after the
first commercial sale of each Licensed Product.
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7.2
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Sublicense to Ciba.
In the event that
TherAtid elects not to commercialize Licensed Products in a
particular counter, either itself or through a sublicensee or a
distributor, it shall notify Ciba. In such event, TherAtid shall
negotiate a sublicense with Ciba under the Patent Rights and
Know-How in such country on reasonable terms customary in the
industry to be negotiated in good faith by the parties.
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8.
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CONFIDENTIALITY;
PUBLICATIONS
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8.1
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Confidential Information.
Unless otherwise
expressly provided for in this Agreement, both parties shall treat
as confidential any Know-How and any and all other information and
data received or derived under this Agreement from the other party
and designated as proprietary or confidential at the time of
disclosure (“Confidential Information”), and shall not
disclose any Confidential Information received from the other party
to any third party during the Agreement Period and for five
(5) years thereafter, except for information which:
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(a)
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was
known to the receiving party prior to the disclosure by the other
party as
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