LICENSE, DEVELOPMENT, AND COMMERCIALIZATION AGREEMENT

License Agreement

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NOVACEA, Inc | Schering Corporation

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Title: LICENSE, DEVELOPMENT, AND COMMERCIALIZATION AGREEMENT
Governing Law: Delaware Date: 6/1/2007
Law Firm: Latham Watkins

Exhibit 10.1

LICENSE, DEVELOPMENT, AND COMMERCIALIZATION AGREEMENT

This License, Development, and Commercialization Agreement (this “Agreement ”) is entered into as of the Effective Date by and between NOVACEA, Inc., a Delaware corporation having offices at 601 Gateway Blvd., Suite 800, South San Francisco, California 94080 ( “Novacea” ), and Schering Corporation, a New Jersey corporation having offices at 2000 Galloping Hill Road, Kenilworth, New Jersey 07033 ( “Schering” ).

RECITALS

W HEREAS , Novacea possesses rights to intellectual property relating to proprietary methods of use of calcitriol;

W HEREAS , Schering is engaged in the research, development and commercialization of pharmaceutical products; and

W HEREAS , Novacea and Schering desire to enter into a collaboration under which Schering will obtain a worldwide exclusive license under such intellectual property to develop and commercialize pharmaceutical products containing calcitriol under the terms and conditions set forth below.

N OW THEREFORE , the Parties agree as follows:

ARTICLE 1

DEFINITIONS

1.1 “Additional Indications” means the use of a Licensed Product for the treatment or prevention of (i) any of [*], pancreatic cancer or [*] in humans and/or (ii) any other disease, disorder or condition, but excluding any of the Core Indications.

1.2 “Additional Indication Milestones” means those milestone payments as set forth in Section 10.3 hereof which will apply to approvals of each of the indications in the following tumor types: [*] pancreatic, [*].

1.3 “AEs” shall have the meaning set forth in Section 6.2(a).

1.4 “Affiliate” means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by or is under common control with such Person. A Person shall be deemed to control another Person if such Person possesses the power to direct or cause the direction of the management, business and policies of such Person, whether through the ownership of more than fifty percent (50%) of the voting securities of such Person, by contract or otherwise.

[*] = C ERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT , MARKED BY BRACKETS , HAS BEEN OMITTED AND FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION PURSUANT TO R ULE 24 B -2 OF THE S ECURITIES E XCHANGE A CT OF 1934, AS AMENDED . C ONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS .

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1.5 “Alliance Manager” means, with respect to each of Novacea and Schering, a representative to be appointed by such Party to facilitate the reasonable and appropriate flow of information and communications between the Parties pursuant to this Agreement.

1.6 “Annual Commercialization Report” shall have the meaning set forth in Section 7.4.

1.7 “ASCENT-2” means the ongoing Phase III Study in AIPC as described in [*].

1.8 “Aventis Agreements” means (i) that certain Grant-in-Aid Agreement between Novacea and Aventis entered into as of August 5, 2002 related to the “Phase 2 / 3 Multicenter, Randomized, Double Blind, Study of Docetaxel Plus DN-101 or Placebo in Androgen-Independent Prostate Cancer (AIPC)” and (ii) that certain Grant-in-Aid Agreement between Novacea and Aventis Pharmaceuticals Inc. (“Aventis”) entered into as of August 4, 2003 related to the “Phase 1 / 2 Multicenter, Open Label, Dose Ranging Study of DN-101 and Taxotere ^® in Patients with Advanced (Stage IIIB or IV) Non-Small Cell Lung Cancer who Have Failed Previous Therapy with Platinum-Based Chemotherapy.”

1.9 “Business Day” means a day on which banking institutions in New York, New York, United States are open for business, but excluding any such day on which the New Jersey offices of Schering-Plough Corporation or the California offices of Novacea are scheduled to be closed for business.

1.10 “Change of Control” shall mean, with respect to either Party, the occurrence of any of the following events: (a) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (any such individual, entity or group, a “ Specified Person ”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty percent (50%) of the combined voting power of then outstanding voting securities of such Party entitled to vote generally in the election of directors (the “ Outstanding Voting Securities ”); or (b) the consummation of a merger, consolidation or other similar transaction with a Specified Person, or sale or other disposition to a Specified Person of all or substantially all of the pharmaceutical assets (including for purposes of clarity the sale of all or substantially all of the pharmaceutical assets of its subsidiaries) of a Party (a “ Business Combination ”), in each case, unless, immediately after the consummation of such Business Combination, (i) the individuals and groups (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) who were the beneficial owners, respectively, of the Outstanding Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than fifty percent (50%) of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation or other entity resulting from such Business Combination (including, without limitation, a Person which as result of such transaction owns then outstanding securities of the Party or all or substantially all of such Party’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Outstanding Voting Securities, as the case may be and (ii) at least

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fifty percent (50%) of the members of the board of directors of the Person resulting from such Business Combination were members of the board of directors of the Party at the time of the execution of the initial agreement, or of the action of the board of directors of such entity, providing for such Business Combination.

1.11 “Combination Product” means any product that contains two or more active ingredients, one of which is a Formulation.

1.12 “Commercialization” means, with respect to Licensed Product, any and all activities directed to the marketing, promotion, distribution, offering for sale and selling such product, importing and exporting such product for sale, and interacting with Regulatory Authorities regarding the foregoing. Commercialization shall also include Phase IV Studies. “Commercialize” has a correlative meaning.

1.13 “Commercially Reasonable Efforts” means (i) with respect to the efforts to be expended by any Party or any of its Affiliates with respect to any objective, such reasonable, diligent, and good faith efforts as such Party would normally use to accomplish a similar objective under similar circumstances, and (ii) with respect to any objective relating to Development or Commercialization of a Licensed Product by Schering, such efforts and resources as are commonly used by Schering and its Affiliates for the development and commercialization of prescription pharmaceutical products of similar commercial potential at a similar stage in product lifecycle, taking into consideration the safety and efficacy of such product, the cost to develop and commercialize the product, the risks inherent in the development and commercialization of the product, its competitiveness compared to alternative products, the proprietary position of the product (including scope and duration of relevant patents), the scope, timing and likelihood of Regulatory Approvals, the profitability of the product and all other relevant factors.

1.14 “Competing Product” means any pharmaceutical product (other than a Licensed Product being Developed and/or Commercialized pursuant to this Agreement) that either: (i) contains [*]; or (ii) that is a [*].

1.15 “Compound” means calcitriol [*].

1.16 “Compulsory License” means a compulsory license under Novacea IP obtained by a Third Party through the order, decree, or grant of a competent Governmental Authority or court, authorizing such Third Party to develop, make, have made, use, sell, offer to sell or import a Competing Product or Licensed Product in any country in the Field in the Territory.

1.17 “Confidential Information” means, with respect to each of the Parties, any and all proprietary and/or confidential data, information or materials possessed or developed by such Party or any of its Affiliates (whether developed by or on behalf of such Party or any of its Affiliates before or after the Effective Date) related to:

(i) the Development, Manufacture, use or Commercialization of the Licensed Product; or

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(ii) the business, development or commercial plans, development or commercial capabilities, operations, assets, research programs, financial conditions, commitments, rights, liabilities, personnel and strategies of Schering, Novacea, or any of their respective subsidiaries or Affiliates,

that is disclosed or otherwise made available by such Party or its Affiliates to the other Party or any of its Affiliates, including, without limitation, any such data, information or materials related to substances, formulations, devices (and/or any components thereof), techniques, technology, regulatory requirements and strategies, equipment, study results, reports, know-how, sources for Manufacture and supply, patent position and business plans.

1.18 “Controlled” or “Control” shall mean the legal authority of a Party (or any of its Affiliates) to grant a license or sublicense of intellectual property rights to another Person (other than pursuant to this Agreement) without breaching the terms of any agreement with a Third Party.

1.19 “Core Development Plan” shall have the meaning set forth in Section 5.2(a).

1.20 “Core Indication” means the use of a Licensed Product for the treatment or prevention of any of the following conditions in humans: (i) androgen-independent prostate cancer (“ AIPC ”), (ii) androgen-dependent prostate cancer (“ ADPC ”), or (iii) adjuvant therapy for early stage prostate cancer (“ Adjuvant Therapy ”)

1.21 “Dedicated MSLs” shall have the meaning set forth in Section 7.3(b).

1.22 “Development” or “Develop” means research activities and non-clinical (including without limitation pre-clinical) and clinical drug development activities, including, among other things: drug discovery, toxicology, formulation, statistical analysis and report writing, conducting clinical trials for the purpose of obtaining and maintaining Regulatory Approval (including without limitation, post-approval commitment studies), and regulatory affairs related to all of the foregoing. Development shall include all clinical studies that are primarily intended to support or maintain a Regulatory Approval, maintain a label or obtain any label change, but shall exclude Phase IV Studies.

1.23 “Development Plan” means, alone or collectively, the Core Development Plan and any Forward Development Plan.

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

1.25 “Effective Date” means the later of (a) the Execution Date or (b) the second (2 ^nd ) Business Day immediately following the earlier of: (i) the date upon which the waiting period

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under the Hart-Scott-Rodino Antitrust Improvement Act (the “ HSR Act ”) expires or terminates early with respect to the filings to be made pursuant to Section 16.1(b), or (ii) the date upon which a closing letter is received from the Federal Trade Commission or the Justice Department, as the case may be, with regard to the transaction contemplated by this Agreement indicating that all requests have been satisfactorily met and no objection on the part of the Federal Trade Commission or the Justice Department remains.

1.26 “EMEA” means the European Medicines Agency or any successor agency thereof.

1.27 “EU” means all of the European Union member states as of the applicable time during the Term.

1.28 “EU Major Markets” means [*].

1.29 “Exchange Act” means the Securities Exchange Act of 1934, as amended.

1.30 “Execution Date” means the latest date of signature appearing on the signature page of this Agreement.

1.31 “Existing Supply Agreement” means that certain Supply Agreement dated December 27 ^th 2001, between Plantex USA Inc., and Novacea, as amended January 24, 2006; March 21, 2006, and February 28, 2007; and as amended and restated May 25, 2007.

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

1.33 “Field” means any and all diagnostic, therapeutic and prophylactic uses in humans and/or animals, including, without limitation, the Core Indications and Additional Indications.

1.34 “First Commercial Sale” means, with respect to a given country in the Territory, the first shipment of commercial quantities of a Licensed Product sold in such country on arms’ length terms to a Third Party by Schering, its Affiliates or its Sublicensees for use in the Field after the granting of Regulatory Approval with respect to such country. Sales for test marketing, sampling and promotional uses, clinical trial purposes or compassionate or similar use shall not be considered to constitute a First Commercial Sale.

1.35 “Formulation” means (i) Novacea’s proprietary oral high-dose pulsed formulation of the Compound that is known as Asentar (DN-101), (ii) any other formulation developed by or on behalf of a Party or its Affiliates containing the Compound as an active ingredient and [*], and (iii) any other formulation containing the Compound as an active ingredient [*]

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1.36 “Forward Development Plan” shall have the meaning set forth in Section 5.2(d).

1.37 “FTE” means the equivalent in working hours of one full time university graduate or similarly qualified employee employed by a Party working at least [*] hours per year. For the avoidance of doubt, employees who work fewer than [*] hours in a year (whether via working a partial year or part-time) are included in an FTE, provided their hours are combined so as to complete one FTE. For example, an employee working [*] hours in a given year would be combined with an employee working [*] hours in the same year to form one FTE. Similarly, any employee can be allocated at a percentage of time equaling less than 100% of their work year, provided that FTEs are calculated in [*] hour increments.

1.38 “FTE Rate” means the fully burdened annual internal cost of employing an FTE including all employee related compensation and benefits including salary, bonuses, profit sharing, taxes, insurances, training, travel, subsistence, professional dues, catering and employee related overheads (including human relations, payroll, purchasing, supervisory costs, space allocation and computer and information systems). The FTE Rate for the period from the Effective Date to [*] shall be [*] per full twelve month period per FTE, as may be adjusted pursuant to Section 7.3(b). The first such adjustment will be effective on [*], and will based on a full twelve (12) month period (as described below). The second adjustment will be effective on [*], but shall be based upon the percentage change in the CPI-U for the preceding [*]. Thereafter, the FTE Rate will be adjusted effective on January 1 of each subsequent year by a percentage equal to the percentage adjustment, if any, between the Consumer Price Index – All Urban Consumers (CPI-U), as published by the United States Department of Labor over the twelve (12) month period reported in such index immediately preceding the date such adjustment is made.

1.39 “Generic Product” means, with respect to a particular Licensed Product, any other product containing a comparable formulation to the Licensed Product that is marketed, promoted, sold, or distributed by a Third Party in one or more countries without a license from a Party to Commercialize in the relevant country(ies) in accordance with applicable laws and regulations in such country.

1.40 “Governmental Authority” means any court, agency, authority, department, regulatory body or other instrumentality of any government or country or of any national, federal, state, provincial, regional, county, city or other political subdivision of any such government or any supranational organization of which any such country is a member.

1.41 “IND” means (a) (i) in the United States, an Investigational New Drug Application, as defined in the United States Federal Food, Drug, and Cosmetic Act, as amended from time to time, and the regulations promulgated thereunder, that is required to be filed with the FDA before beginning clinical testing of a Licensed Product in human subjects, or any successor application or procedure, and (ii) any counterpart of a United States Investigational

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New Drug Application in any other country in the Territory, and (b) all supplements and amendments that may be filed with respect to any of the foregoing.

1.42 “Infringement Claim” means a claim or assertion by a Third Party against Novacea, Schering or any of their respective Affiliates that the use, Development, Manufacture, and/or Commercialization of the Licensed Product infringes or otherwise violates a patent or other intellectual property rights owned or Controlled by such Third Party.

1.43 “Joint Commercialization Committee” or “JCC” has the meaning set forth in Section 7.1(a).

1.44 “Joint Development Committee” or “ JDC” has the meaning set forth in Section 4.1.

1.45 “Know-How” means any and all proprietary data, information and materials (whether patentable or not) related to Compound, Formulations, the Licensed Product, any Licensed Product Improvement, Core Indications, Additional Indications, or the Development, Manufacture, Commercialization, or use of any of the foregoing, including, without limitation (a) ideas, discoveries, inventions, improvements, technology or trade secrets, (b) pharmaceutical, chemical and biological materials, products, components or compositions, (c) tests, assays, techniques, regulatory requirements and strategies, data (including non-clinical and clinical data), methods, procedures, formulas or processes, (d) technical and non-technical data and other information relating to any of the foregoing, (e) drawings, plans, designs, diagrams, sketches, specifications or other documents containing or relating to such information or materials, and (f) business processes, price data and information, marketing data and information, sales data and information, marketing plans and market research.

1.46 “Licensed Product” means any pharmaceutical product containing a Formulation either alone or in combination with one or more other active pharmaceutical ingredients, including all line extensions and modes of administration thereof.

1.47 “Licensed Product Improvement” shall mean any enhancement to any Licensed Product or Formulation, including, without limitation, to any inactive ingredient, preparation, presentation, means of delivery, dosage, packaging or Manufacture.

1.48 “Major Markets” means the United States and the EU Major Markets.

1.49 “Major Market Royalty Term” shall have the meaning set forth in Section 10.4(c).

1.50 “Manufacture” means all activities related to the manufacturing of a pharmaceutical product, or any ingredient thereof, including but not limited to test method development and stability testing, formulation, process development, manufacturing scale-up, manufacturing Compound or Licensed Product quality assurance/quality control development,

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quality control testing (including in-process, in-process release and stability testing), packaging, release of product or any component or ingredient thereof, quality assurance activities related to manufacturing and release of product, and regulatory activities related to all of the foregoing.

1.51 “MSLs” or “ Medical Science Liaisons ” shall mean persons responsible for (i) being an ambassador of, and advocate for, Novacea and/or Schering science within the healthcare community; (ii) developing and nurturing relationships with healthcare professionals that are centered on science; (iii) communicating accurate and balanced information regarding the benefits and risks of Novacea and/or Schering products; and (iv) interacting with managed care organizations, thought leaders, clinical investigators and other healthcare organizations to provide fair, balanced and scientifically rigorous information. For purposes of clarity, MSLs do not engage in promotional activities and are not sales representatives.

1.52 “Net Sales” means the aggregate gross amount invoiced by Schering or its Affiliates or Sublicensees, on all sales or transfers for consideration (but only to the extent that such transfers for consideration specifically provide consideration for the Licensed Product) of Licensed Product in the Territory to a Third Party, less the following deductions, as determined on an accrual basis:

(a) bad debts actually written off which are attributable to sales of Licensed Product;

(b) trade, quantity and cash discounts and any other adjustments, including, without limitation, those granted on account of price adjustments, billing errors, rejected goods, damaged goods, returns, recalls, rebates, chargeback rebates, reasonable fees, reimbursements or similar payments granted or given to wholesalers or other distributors, buying groups, health care insurance carriers or other institutions;

(c) freight, packing, handling, shipping, postage and insurance charges;

(d) customs or excise taxes, including, without limitation, import duties, sales tax and other taxes (except income taxes) or duties relating to sales;

(e) any payment in respect of sales to any Governmental Authority (other than to any municipal, county or city authority) in respect of any government-subsidized program, including, without limitation, Medicare and Medicaid rebates;

(f) amounts paid or credited to customers for inventory management, distribution, warehousing, and related services;

(g) distribution, packing, handling and transportation charges for Licensed Product;

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(h) the portion of any management fees paid during the relevant time period to group purchasing organizations that relate specifically to the sale of such Licensed Product to such organization; and

(i) any reasonable deduction substantially similar in character/substance to the above that is related to the sale of the Licensed Product.

The foregoing adjustments shall be documented and included in the invoiced price of Licensed Product or otherwise directly paid or incurred by Schering or its Affiliates or Sublicensees without reimbursement, other than payment by a third party customer. Such adjustments shall be consistent with customary accounting practices within the selling Party and its Affiliates (or their respective Sublicensees) and in accordance with United States Generally Accepted Accounting Principles (“ GAAP ”), consistently applied.

In the event a Licensed Product is sold in the form of a Combination Product, then the Net Sales for any such Combination Product shall be determined in a particular country by multiplying the Net Sales of the Combination Product during the applicable royalty reporting period, by the fraction, A/(A+B), where A is the weighted (by sales volume) average sale price of the Licensed Product when sold separately in finished form in the country in which the Combination Product is sold and B is the weighted (by sales volume) average sale price of the other product(s) which contain the other active ingredient(s) included in the Combination Product when sold separately in finished form in the country in which the Combination Product is sold, in each case during the applicable royalty reporting period or, if sales of both the Licensed Product and the other product(s) did not occur in such period, then in the most recent royalty reporting period in which sales of both occurred. In the event that such average sale price cannot be determined for both the Licensed Product and all other active pharmaceutical ingredient(s) included in the Combination Product, then the Parties shall in good faith discuss and agree on a pro-rata allocation of the Net Sales that reflects the Licensed Products’ contribution to the Combination Product on an equitable basis.

It is understood, however, that in certain countries in the Territory, Schering or its Affiliates may Commercialize Licensed Products through a Third Party distributor or agent (which does not meet the definition of a Sublicensee) under an arrangement in which Schering or its Affiliates (x) transfer the Licensed Product to such distributor or agent at a fixed price that is not necessarily related to the final selling price of the distributor or agent, and (y) are not responsible for marketing and promoting such Licensed Product in such countries and receive no compensation from the sale of such Licensed Products by the distributor or agent. For purposes of clarity, a grant of sublicense rights to any such Third Party distributor or agent necessary for such party to exercise its rights or perform its obligations does not cause such party to be deemed a Sublicensee as defined herein.

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1.53 “Novacea Background Know-How” means any Know-How Controlled by Novacea or its Affiliates that is generated prior to the Effective Date and/or other than in performance of activities conducted under this Agreement.

1.54 “Novacea Background Patents” means (i) any and all Patents that are Controlled by Novacea or any of its Affiliates that claim discoveries, inventions, developments or innovations made by or on behalf of Novacea prior to the Effective Date and/or other than in performance of activities conducted under this Agreement, including, without limitation, the Patents described in Schedule 13.3(a) , (ii) any and all Patents that are filed after the Effective Date that derive from the studies covered by the Aventis Agreements, and (iii) those patents licensed to Novacea under the Upstream License Agreements as described in Schedule 13.3(b).

1.55 “Novacea IP” means the Novacea Background Know-How and Novacea Background Patents.

1.56 [*]

1.57 “OHSU License Agreement” means that certain Exclusive License Agreement dated as of June 27, 2001 by and between Oregon Health & Science University (OHSU) and D-Novo Therapeutics, Inc., [*].

1.58 “Other Marks” shall have the meaning set forth in Section 12.8.

1.59 “Other Product” shall have the meaning set forth in Section 3.2(a).

1.60 “Other Product Package” shall have the meaning set forth in Section 3.2(b).

1.61 “Party” means Novacea or Schering individually, and “Parties” means Novacea and Schering collectively.

1.62 “Patents” means any and all issued patents and pending patent applications (including, without limitation, any provisional applications, continuations, divisionals, continuations-in-part, re-examinations, reissues, substitutions, confirmations, registrations, re-validations, patents of addition, patent term extensions, supplementary protection certificates and the like), as well as any foreign counterparts of any of the foregoing, that cover Compound, Formulations, the Licensed Products or the Manufacture or use of any of the foregoing.

1.63 “Person” shall mean any individual, partnership, joint venture, limited liability company, corporation, firm, trust, association, unincorporated organization, Governmental Authority or agency, or any other entity not specifically listed herein.

1.64 “Phase III Study” means a large scale, pivotal clinical study for purposes of seeking Regulatory Approval that is intended to evaluate the therapeutic efficacy and safety of the Licensed Product for the prevention or treatment of one or more diseases, conditions or disorders.

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1.65 “Phase IV Studies” means a study or data collection effort for the Product that is initiated in the Territory after receipt of Regulatory Approval for the Licensed Product.

1.66 “Price Approvals” means in those countries in the Territory where Governmental Authorities may approve or determine pricing and/or pricing reimbursement for pharmaceutical products, such approval or determination.

1.67 “Program IP” means any Program Know-How and Program Patents, collectively.

1.68 “Program Know-How” means any Know-How that is generated in performance of activities conducted pursuant to the Development Plan and/or generated in performance of any other Development activities, Commercialization activities, Phase IV Studies or Manufacturing activities related to the Licensed Product that are conducted under this Agreement

1.69 “Program Patents” means any Patent that claims discoveries, inventions, developments and/or innovations made by or on behalf of one or more of the Parties and/or their respective Affiliates in performance of activities conducted under this Agreement.

1.70 “Project Data” means any and all verified data, information and results generated in performance of any Development activities pursuant to a Development Plan under this Agreement.

1.71 “Prosecute” shall mean in relation to any Patent, (a) to prepare and file patent applications, including re-examinations or re-issues thereof, and represent applicant(s) or assignee(s) before relevant patent offices or other relevant authorities during examination, re-examination and re-issue thereof, in appeal processes and interferences, or any equivalent proceedings, (b) to defend all such applications against Third Party oppositions, (c) to secure the grant of any Patents arising from such patent application, (d) to maintain in force any issued Patent (including through payment of any relevant maintenance fees), and (e) to make all decisions with regard to any of the foregoing activities. “ Prosecution ” has a corresponding meaning.

1.72 “Recall” shall have the meaning set forth in Section 7.5(a).

1.73 “Quarterly Development Report” shall have the meaning set forth in Section 5.4.

1.74 “Regulatory Application” means (a) the single application or set of applications for approval and/or pre-market approval to make and sell commercially a pharmaceutical product, delivery system or device filed with the FDA, including, without limitation, all information included in drug master files (as defined in 21 CFR 314.420) (hereinafter “DMF” ) related to such application(s), and any related registrations with or notifications to the FDA, and (b) any counterparts to such applications filed with any other national or supranational

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Regulatory Authority in the Territory, and (c) all supplements and amendments that may be filed with respect to any of the foregoing.

1.75 “Regulatory Approval” means any and all approvals (including Price Approvals), licenses, registrations, or authorizations of any federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity necessary for the Manufacture, use, storage, import, export, transport, promotion, clinical trial authorization, marketing or sale of a Licensed Product in a country.

1.76 “Regulatory Authority” means any governmental regulatory authority involved in granting Regulatory Approvals of any Licensed Product in the Territory, including, without limitation, the FDA and the European Commission.

1.77 “ROW” shall mean all parts of the Territory outside of the U.S.

1.78 “ROW Royalty Term” shall have the meaning set forth in Section 10.4(c).

1.79 “Royalty Major Markets” means the [*].

1.80 “Royalty Term” shall have the meaning set forth in Section 10.4(c).

1.81 “Schering Background Know-How” means any Know-How that is Controlled by Schering or its Affiliates that is generated prior to the Effective Date and/or other than in performance of activities conducted under this Agreement.

1.82 “Schering Background Patents” means any and all Patents that are Controlled by Schering or any of its Affiliates that claim discoveries, inventions, developments or innovations made by or on behalf of Schering or its Affiliates prior to the Effective Date and/or other than in performance of activities conducted under this Agreement.

1.83 “Schering IP” means the Schering Background Know-How, Schering Background Patents, Program Know-How and Program Patents.

1.84 “Stock Purchase Agreement” means the Stock Purchase Agreement between the Parties, executed pursuant to Section 10.2 as of the date hereof and effective as of the Effective Date.

1.85 “Sublicense Agreement” shall have the meaning set forth in Section 2.3.

1.86 “Sublicensee” shall mean a Third Party (i) to which Schering (or its Affiliate) grants a license and/or sublicense in one or more countries in the Territory under Patents and Know-How owned or Controlled by Schering that are necessary for the Commercialization of Licensed Product in such country(ies); (ii) which has responsibility and control over the Commercialization of the Licensed Product in the country(ies) in which it holds such license and/or sublicense; and (iii) which is obligated to pay to Schering (or its Affiliate) royalties and/or

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payments representing a share of such Third Party’s profits on sales of the Licensed Product in such country(ies) and such royalties or other payments are not included in the purchase price paid by such Third Party to Schering or its Affiliates for supplies of Licensed Product for sale in the relevant country(ies).

1.87 “Target Product Profile” or “ TPP” shall have the meaning set forth in Section 5.2(c).

1.88 “Technical Failure” shall have the meaning set forth in Section 16.4(b).

1.89 “Territory” means the entire world.

1.90 “Third Party” means any Person other than a Party or its Affiliates.

1.91 “Third Party License Agreements” shall have the meaning set forth in Section 10.5(c).

1.92 “Trademark” shall mean Asentar and any other relevant tradenames and/or accompanying logos, trade dress and/or indicia of origin as set forth on Schedule 1.92 hereto.

1.93 “United States” or “U.S.” means the United States of America, its territories and possessions as they may exist from time to time during the Term.

1.94 “University of Pittsburgh License Agreement” means that certain License Agreement dated as of July 1, 2002 by and between the University of Pittsburgh of the Commonwealth System of Higher Education (“University of Pittsburgh”) and Novacea, [*].

1.95 “Upstream License Agreements” means, collectively, the University of Pittsburgh License Agreement and the OHSU License Agreement.

1.96 “USPTO” shall have the meaning set forth in Section 13.3(d).

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ARTICLE 2

LICENSES

2.1 License Grant. Novacea hereby grants to Schering an exclusive (even as to Novacea), sublicensable (subject to the restrictions on Schering’s right to grant sublicenses set forth below in Section 2.3) royalty-bearing license in the Territory under the Novacea IP to Develop, make, have made, use, and Commercialize Licensed Products in the Field.

2.2 Retained Rights; No Other Rights; Covenant.

(a) Novacea retains any and all other rights under the Novacea IP that are outside the scope of the licenses granted under Section 2.1.

(b) Novacea shall not grant licenses to any rights under the Novacea IP to any Third Parties that are inconsistent with the license granted to Schering pursuant to Section 2.1. Schering shall not use any Novacea IP or grant any Third Party any license or right under Novacea IP, other than as expressly permitted in this Agreement.

2.3 Sublicense Agreements. Schering may grant to Third Parties sublicenses of the rights granted to it under Section 2.1 (without the right to grant further sublicenses) without Novacea’s consent in order to carry out its obligations or exercise its rights under this Agreement. Schering shall, in each agreement under which it grants a sublicense of substantially all or all the rights granted to it necessary to Commercialize a Licensed Product in the United States pursuant to Section 2.1 (each, a “Sublicense Agreement” ), require the Sublicensee to transfer to Novacea if this Agreement terminates and to Schering if only such sublicense terminates (a) all INDs and/or other Regulatory Applications and Regulatory Approvals held, possessed or controlled by such Sublicensee relating to a Licensed Product and (b) all Patents and Know-How Controlled by such Sublicensee (which Patents and Know-How shall be transferred either by assignment or by a freely sublicensable exclusive license). Any Sublicense Agreement shall be consistent with the terms and conditions of this Agreement and Schering shall use Commercially Reasonable Efforts to assign such Sublicense Agreement to the extent required under Section 16.6(c)(iv) of this Agreement. Schering shall (i) use Commercially Reasonable Efforts to procure the performance by any Sublicensee of the terms of each such Sublicense Agreement, and (ii) be responsible for any breach of this Agreement that is caused (directly or indirectly) by the performance (or failure to perform) of its Sublicensee. The grant of any such sublicense will not relieve Schering of its obligations under this Agreement, except to the extent they are satisfactorily performed by such Sublicensee.

2.4 Disclosure of Novacea Background Know-How.

(a) Subject to all applicable provisions of this Agreement, Novacea shall, promptly following the Effective Date, disclose to Schering all Novacea Background Know-How existing as of the Effective Date. All such Novacea Background Know-How shall be delivered in electronic format, where available, and shall be in English. Novacea will make its and its

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Affiliates’ employees and consultants reasonably available to Schering for consultation as reasonably required by Schering in order to ensure an orderly transition to Schering of all such Novacea Background Know-How or otherwise to the extent necessary or useful to enable Schering to perform its obligations under this Agreement to Develop, Manufacture, register, use or Commercialize the Licensed Product and practice the licenses granted hereunder efficiently. Such disclosure shall include, to the extent available to Novacea, any clinical data, study reports, any information relating to manufacturing, any agreements in respect of the Licensed Product, and any related correspondence and filings with any Regulatory Authority (including notes or minutes of any meetings with any Regulatory Authority).

(b) In furtherance of and without limiting Novacea’s obligations pursuant to this Section 2.4, Novacea shall support the transfer to Schering of all Novacea Background Know-How related to the Manufacture of Compound and Licensed Product, including without limitation all pre-formulation reports, clinical manufacturing batch records, development reports, IND documentation, analytical results, analytical method validation reports, raw material and excipient sourcing information, quality audit findings, stability reports, Manufacturing know-how, data, procedures, assays, relevant provisions of standard operating procedures and any other relevant technical information. Each Party shall bear its own costs in performing any activities pursuant to this Section 2.4. Notwithstanding the foregoing, Schering acknowledges that Novacea has no right, and Novacea is under no obligation to cause Plantex, to transfer to Schering any Know-How relating to the Manufacture of calcitriol or any other Confidential or proprietary information of Plantex. The foregoing notwithstanding, Novacea shall make all reasonable efforts to transfer the Manufacturing Know-How of Plantex to Schering by (i) requesting of Plantex authorization to reveal and transfer to Schering any Plantex Manufacturing Know-How that is in Novacea’s possession and (ii) requesting Plantex to transfer all such Know-How to Schering. Novacea shall make such requests within sixty (60) days of the Effective Date of this Agreement.

(c) Novacea will, at its own cost and expense, for the first [*] days following the Effective Date and thereafter at Schering’s cost and expense, provide reasonable assistance to Schering in connection with understanding the information provided by Novacea hereunder to assist Schering in Developing the Licensed Product.

2.5 Section 365(n) of the Bankruptcy Code. All rights and licenses granted under or pursuant to any section of this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to “intellectual property” as defined under Section 101(35A) of the Bankruptcy Code. Each Party shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code or equivalent legislation in any other jurisdiction. Upon the bankruptcy of Novacea, Schering shall further be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property owned or Controlled by Novacea or its Affiliates, and such, if not already in its possession, shall be promptly delivered to Schering, unless Novacea elects (as evidenced by written notice to Schering) to continue, and thereafter at all times satisfactorily continues, to timely perform all of its obligations under this Agreement.

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ARTICLE 3

NON-COMPETE AND OTHER PRODUCTS

3.1 Non-Compete.

(a) During the Term, neither Party nor its Affiliates may directly or indirectly promote, market, sell or commercialize, or otherwise be involved in the commercial distribution, promotion, marketing, sale or commercialization of any Competing Product in any country in the Territory, provided , however , that a Party and its Affiliates shall be permitted to commercialize any product containing the Compound (other than a Formulation) for veterinary or over-the-counter uses, or in human prescriptions provided , however , that in such human prescription use, the dosage and schedule or regimen are not comparable to that of the Licensed Product.

(b) A breach of the foregoing non-compete covenant by either Party or its Affiliates (i) in any Major Market shall constitute a material breach of the entire Agreement, (ii) in any country other than a Major Market shall constitute a material breach with respect to such country.

3.2 Other Products.

(a) In addition to the rights granted by Novacea to Schering in Section 2.1, Novacea shall provide prior written notice to Schering if at any time during the Term Novacea intends to (i) [*] a [*] of [*] or to [*] or [*], or (ii) [*] or [*] or [*]

(b) In the event that Novacea provides Schering with notice as set forth above, Novacea shall provide Schering with a [*] of [*] with regard to [*]

ARTICLE 4

JOINT DEVELOPMENT COMMITTEE

4.1 Joint Development Committee. The Parties shall share information and review Development activities with respect to the Licensed Product in the Field in the Territory through a joint development committee (“ JDC ”).

(a) JDC Formation. The Parties hereby form the JDC consisting of [*] representatives from Novacea and [*] representatives from Schering. Each Party may replace [*] of its JDC representatives at any time upon prior written notice to the other Party. The JDC may

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include representatives from regulatory, project management, clinical development or manufacturing; provided, however, that the representatives from each Party shall be senior enough and have appropriate expertise to participate in Development decisions.

(b) Meetings of the JDC. The JDC shall meet at least two (2) times every calendar year until such time as the JDC is disbanded pursuant to the terms of this Agreement. Subject to the chairperson’s authority to call meetings as set forth in Section 4.1(c), the JDC shall meet on such dates and at such times and places as agreed to by Schering and Novacea. Meetings of the JDC may be held in person or by means of telecommunication (telephone, video or web conferences). Each Party may include a reasonable number of non-JDC member employees, consultants, representatives or advisors to participate in or present at JDC meetings; provided, however, that such persons are bound by obligations of confidentiality no less stringent than those set forth in Article 14. Each Party shall be responsible for its own expenses for participating in the JDC. Meetings of the JDC shall be effective only if at least one member of each Party is present or participating. To the extent an issue within the purview of the JDC is subject to a vote at a meeting where not all members of the JDC are present, the sole present member of the relevant Party shall be entitled to vote by proxy for the absent JDC member.

(c) Chairperson. [*] shall appoint a chairperson of the JDC from among its members. The chairperson shall be responsible for setting the agenda for, and calling and leading meetings of the JDC. Any member of the JDC may request that items be added to the agenda for discussion. The secretary of the meeting, as designated by the chairperson, shall prepare and distribute meeting minutes to all members of the JDC. Minutes of each JDC meeting shall be approved or disapproved, and revised as necessary within thirty (30) days following such meeting. Final minutes of each meeting shall be distributed to the members of the JDC by the chairperson.

(d) JDC Working Groups. From time to time, the JDC may establish and delegate duties to other committees, sub-committees, or directed teams (each a “ JDC Working Group ”) on an “as needed” basis to oversee particular projects or activities.

4.2 Responsibilities of the JDC. The JDC shall have the responsibility and authority to:

(a) review the Development of the Licensed Product in the Field in the Territory and discuss the overall strategy for Development of the Licensed Product in the Field in the Territory;

(b) monitor the progress of all clinical studies that are ongoing as of the Effective Date;

(c) oversee the execution of the [*] and [*] with respect to the Licensed Product;

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(d) review, approve and monitor performance against [*] for Development activities as set forth in the Development Plans;

(e) review and monitor performance against [*] for Development activities as set forth in the Development Plans;

(f) discuss the [*] as developed by Schering pursuant to Section 5.1; and

(g) perform such other functions as the Parties may agree in writing.

4.3 JDC Conduct.

(a) Consensus. The Parties will endeavor to reach consensus on all matters within the scope of the JDC.

(b) Dispute Resolution. If the JDC is unable to reach unanimous agreement on any issue within its purview, such issue shall be promptly referred to the [*] and the [*] (the “JDC Responsible Executives ”) who shall make good faith efforts to promptly resolve the matter in dispute within thirty (30) days. Schering shall have sole and final decision making authority with respect to any matter in dispute that cannot be resolved by the JDC Responsible Executives relating to the Development of Licensed Products in the Field in the Territory, provided , however , that any material amendment to the Core Development Plan will require the consensus of the Parties pursuant to Section 5.2(c). The foregoing notwithstanding (i) Schering shall have the right to make a final decision, and the Parties will proceed in a manner consistent with Schering’s position, on any time-sensitive matter disputed at the JDC where Schering reasonably determines that a delay in such decision is likely to have an adverse effect on either the Development or Commercialization of the Licensed Product and (ii) Schering shall be permitted to modify the Core Development Plan in its sole discretion as set forth in Section 5.2(c). For the avoidance of doubt, disputes of the JDC resolved pursuant to this Section 4.3(b) (other than disputes related to compliance with this Agreement or the validity, breach, termination or interpretation of this Agreement; including, without limitation, whether the standard of Commercially Reasonable Efforts has been met) shall not be subject to any other dispute resolution mechanism or arbitration procedure.

4.4 Novacea JDC Participation. Novacea’s membership in the JDC shall be at its sole discretion as a matter of right and not obligation for the sole purpose of participation in governance, decision making and information exchange with respect to Development activities. At any time prior to disbanding of the JDC pursuant to Section 4.5 below, Novacea shall have the right to withdraw from participation in the JDC upon thirty (30) days’ prior written notice to Schering, which notice shall be effective upon the expiration of such thirty (30) days period (“ Withdrawal Notice ”). Following the issuance of a Withdrawal Notice and subject to this Section 4.4, (i) the JDC shall be disbanded, (ii) Schering shall have the right to make the final decision on all matters previously within the scope of authority of the JDC; and (iii) Novacea shall have the right to continue to receive the Quarterly Development Report and Monthly Update Reports.

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4.5 Disbanding of JDC. Schering may, in its sole discretion, disband the JDC upon the earlier of (i) Regulatory Approval in the United States for all indications being actively pursued in the Core Development Plan, or (ii) a Novacea Change of Control event, as set forth in Section 18.1. In addition, the Parties shall have the right to disband the JDC upon thirty (30) days written notice at any time upon mutual agreement. To the extent not disbanded pursuant to Section 4.4 or this Section 4.5 above, the JDC shall be automatically disbanded after any twelve (12) month period during which no active Development of any Licensed Product has occurred.

4.6 Alliance Manager. Each Party will appoint and maintain for the term of this Agreement an Alliance Manager to facilitate the reasonable and appropriate flow of information and communication between the Parties pursuant to this Agreement.

ARTICLE 5

DEVELOPMENT

5.1 Overview. As of the Effective Date, Schering shall be primarily responsible for the Development of the Licensed Product in the Field in the Territory. Schering shall perform all of its Development activities in accordance with the INDs for the Licensed Products. Without limiting the generality of the foregoing, subject to Sections 5.2(c) and (d), Schering shall be responsible for (a) determining which indications (other than the Core Indications) Licensed Product will be Developed for in the Field; (b) developing the Forward Development Plan(s); (c) determining the Development strategy for all indications in the Field in the Territory; (d) developing protocols for future pre-clinical and clinical studies to be conducted in the Territory in the Field; and (e) conducting any pre-clinical and clinical studies in the Territory in the Field other than Novacea’s ongoing clinical studies pursuant to Section 5.2(c) hereof. Upon request by either Party, the Parties hereby agree to enter into a services agreement as necessary to govern the performance of any Development activities to be performed by Novacea pursuant to this Agreement.

5.2 Development Plans.

(a) Core Development Plan. The Parties have agreed on the initial Development plan for the Licensed Product in the Core Indications in the Field in the Territory (as may be amended in accordance with this Agreement, the “ Core Development Plan ”), a copy of which is attached hereto as Exhibit A .

(b) Updates to Development Plans. The JDC will review and update the Core Development Plan from time-to-time, but no less frequently than annually, to take into account completion, commencement, changes in or cessation of Development activities not contemplated by the then-current Core Development Plan.

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(c) To the extent there are ongoing clinical studies being conducted by Novacea, Novacea will continue to execute such ongoing studies in accordance with the Core Development Plan and under the oversight, review and direction of the JDC, with the scope and nature of Schering’s participation to be agreed by the Parties and set forth in the Core Development Plan. For purposes of clarity, Novacea will continue to conduct all activities related to ASCENT-2, except as otherwise set forth in the Core Development Plan. From and after the Effective Date, Schering will assume responsibility and control of the execution of all Development activities related to the Licensed Product under the oversight of the JDC and in accordance with the Core Development Plan, provided , however , that the Parties will agree upon and set forth, in the Core Development Plan, any specific activities to be performed by Novacea (to be reimbursed at the FTE Rate) relating to the Development of the Licensed Product in the Core Indications. From and after the Effective Date, to the extent there are any Novacea-initiated clinical studies for which final reports have not been finalized, Novacea shall have primary responsibility at its own cost and expense to write up all study reports for such studies, provided , however , that drafts of all such reports must be reviewed and approved by the JDC before being deemed final and filed. Any material changes to the Core Development Plan must be agreed upon by the Parties, provided , however , that in the event that Schering determines that (i) the Licensed Product has not met the initial target product profile agreed to by the Parties and listed in the CDP ( “TPP” ), or (ii) the results of work done under the Core Development Plan provide a reasonable expectation, supported by market research data provided to Novacea, that the then-current TPP will not be achieved or makes it commercially unreasonable to pursue Development in accordance with the Core Development Plan, Schering shall be permitted to modify the Core Development Plan in its sole discretion.

(d) Either Party may propose to the JDC that Additional Indications be pursued. To the extent Novacea makes such a proposal, it shall present formal clinical study proposals to the JDC for consideration. Should Schering determine, in its sole discretion, that Development of any Additional Indications is desirable and commercially reasonable, Schering will develop a separate Development plan (or plans) covering such Development activities (the “ Forward Development Plan(s) ”) and Schering will be primarily responsible for the Development and execution thereof. A copy of the initial Forward Development Plan is attached hereto as Exhibit B. The JDC will discuss the scope of subsequent Novacea participation in execution of Forward Development Plan(s). It is currently anticipated that Novacea will execute the pancreatic study listed in the Forward Development Plan under the oversight of the JDC. For clarity, Schering shall not be obligated to undertake Development and/or Commercialization of the Licensed Product for indications outside of the Core Indications.

5.3 Development Costs. During the Term, Schering shall be responsible for all costs and expenses related to the Development of Licensed Product under this Agreement in the Field in the Territory that are incurred following the Effective Date (“ Development Costs ”). With respect to those Development Costs incurred by Novacea after the Effective Date, Schering’s obligations under this Section 5.3 shall be limited to those reasonable documented direct costs and expenses incurred by Novacea following the Effective Date in connection with the conduct

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of Development activities provided for in the Development Plans, including (i) the forward funding of Novacea’s ongoing clinical studies pursuant to the Core Development Plan and (ii) compensating Novacea at the FTE Rate for those FTEs that are engaged in the execution of Development Plans, provided , however , that such Novacea costs and expenses must not exceed the amounts attributed to such activities in the budget set forth in the Development Plan by more than [*] percent without Schering’s prior written consent. Novacea shall be responsible for providing, once every calendar quarter, an estimate of the Development Costs it expects to incur for the next [*]. To the extent that Novacea anticipates any variance [*] percent or more from the amount attributed to a budgeted line item activity exceeding [*] (as identified in a Development Plan) or to the activities as a whole, Novacea shall promptly inform Schering and may not incur such additional costs without Schering’s prior written consent. For the avoidance of doubt, Novacea shall remain solely responsible for all costs and expenses accrued or incurred in the Development of Licensed Product in the Territory prior to the Effective Date.

5.4 Reports. Schering shall provide to Novacea quarterly Development reports ( “Quarterly Development Report ”) that will include a listing of clinical studies and the status of such studies for the Licensed Product in the Major Markets. As a part of the Quarterly Development Report, Schering shall provide to Novacea a table report that contains the status of Regulatory Approvals for the Licensed Product in the Territory. In addition, Schering shall provide to Novacea monthly updates of patient enrollment information for any Phase III Studies in a Core Indication or for pancreatic cancer ( “Monthly Update Report” ), provided , however , (i) it is understood that such information will be based solely on the information Schering receives as reported from clinical trial sites and (ii) to the extent Novacea is responsible for such a study, Novacea shall provide a Monthly Update Report to Schering. For clarity, all such information provided by a Party under this Article 5 shall be considered Schering’s Confidential Information.

5.5 Transfer of Information Regarding Licensed Products. In accordance with Section 2.4, Novacea shall work with Schering to allow for an orderly and appropriate transfer to Schering, as soon as reasonably practicable following the Effective Date and pending a thorough review of Novacea data management processes utilized in connection with the Development of the Licensed Product by Schering, of (a) databases containing all data collected from clinical trials that have been conducted prior to or are ongoing as of the Effective Date by or on behalf of Novacea, or any of its Affiliates, with respect to Licensed Product in the Field in the Territory (provided that with respect to ongoing clinical trials, measures shall be taken to ensure that the clinical trials remain blinded in accordance with Schering standards and the laws or regulations of any applicable Governmental Authority), and (b) all documents and reports that have been prepared by or on behalf of Novacea, or any of its Affiliates, in connection with such studies, including without limitation trial master files, protocols, investigators brochures and case report forms. In connection with the transfer of the database pursuant to this Section 5.5, Novacea shall provide the software programs used to calculate the fields contained in such database and the audit trails for any changes that have been made to the database, together with a list of the standard conventions and coding utilized in preparing such database, and any other explanatory

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documentation. In addition, Novacea shall provide Schering with copies of any audit or similar reports that have been prepared by or on behalf of Novacea, of any of its Affiliates, prior to the Effective Date with respect to any Development or Manufacturing activities related to Licensed Product and will cooperate with Schering after the Effective Date to provide Schering reasonable access to all data (including source data), documents and procedures as required by Schering to conduct audits of any sites conducting any clinical trials, Development or Manufacturing activities on behalf of Novacea. For purposes of clarity, Novacea shall remain responsible for all activities required for data completion related to ASCENT-2 except as otherwise set forth in the CDP. This Section 5.5 is subject to any restriction under Novacea’s agreements with Third Parties with respect to the foregoing, however, to the extent that such agreements with Third Parties limit the disclosure to Schering, Novacea shall request of such Third Parties the authorization to disclose such information and documents to Schering. Novacea shall make such requests within forty-five (45) days of the Effective Date of this Agreement.

5.6 Development Diligence. Schering shall use Commercially Reasonable Efforts to Develop the Licensed Product in accordance with the Core Development Plan, as it may be amended, which will include Commercially Reasonable Efforts to meet the targeted activity timelines set forth therein, as they may be amended (the “CDP Timelines” ). To the extent that Schering meets the CDP Timelines, Schering shall be deemed to have met its diligence obligations under this Section 5.6. Further, so long as Schering is using Commercially Reasonably Efforts to meet the CDP Timelines, failure to do so shall not constitute a breach of this Agreement.

ARTICLE 6

REGULATORY

6.1 Regulatory Filings Transfer.

(a) Within [*] days after the Effective Date (or such other date as mutually agreed by the Parties), Novacea shall transfer to Schering all existing INDs and other Regulatory Applications that it owns or controls covering the Licensed Product and reasonably assist Schering in obtaining the transfer of such INDs and other Regulatory Applications that it does not own or control. The Parties agree that Novacea will continue to execute ASCENT-2 in accordance with the Core Development Plan, and Schering hereby delegates such responsibility to Novacea. Novacea shall, upon request, timely provide to Schering information and reports related to ASCENT-2 necessary to satisfy Schering’s routine Regulatory Authority reporting obligations. For a period of at least [*] days after the Effective Date, Novacea will provide, at its own cost and expense and at Schering’s request, necessary information and support to Schering with respect to regulatory correspondence, discussions and meetings between Novacea and Regulatory Authorities that took place prior to the Effective Date. After the Effective Date, other than with respect to the DMF owned by Plantex under the Existing Supply Agreement, all further submissions to any Governmental Authorities relating to such Regulatory Applications and/or INDs or any other Regulatory Applications covering the Licensed Product, shall be

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owned by, filed by and in the name of Schering or its Affiliates. Schering or its Affiliates shall hold all Regulatory Approvals for Licensed Product throughout the Territory.

(b) In accordance with Section 2.4, within forty-five (45) days after the Effective Date (or such other date as mutually agreed by the Parties), Novacea shall transfer to Schering one copy of all documents and records that have been generated by or on behalf of Novacea with respect to any existing INDs and other Regulatory Applications that it owns or controls covering the Licensed Product in the Territory, as well as any correspondence between Novacea and Governmental Authorities related to Licensed Products.

(c) Other than with respect to the DMF owned by Plantex under the Existing Supply Agreement, Schering shall be solely responsible for overseeing, monitoring and coordinating all regulatory actions, communications and filings with the FDA and other Governmental Authorities in the Territory and preparing, submitting and maintaining all Regulatory Applications and health registrations with respect to all Licensed Product.

(d) Other than with respect to the DMF owned by Plantex under the Existing Supply Agreement, Schering shall be solely responsible for interfacing, corresponding and meeting with the FDA and other Governmental Authorities throughout the Territory with respect to Licensed Product. Schering shall provide Novacea with copies of any non-routine material correspondence with FDA or other Governmental Authorities in the Major Markets relating to approval of Licensed Product, within thirty (30) days of any such correspondence. Schering shall also provide Novacea with meeting minutes from any material meetings with Regulatory Authorities in the Major Markets concerning the approval of Licensed Product. Schering will provide Novacea with reasonable advance notice of any scheduled meeting with the FDA relating to Development of the Licensed Product and/or any Regulatory Application for the Licensed Product in the United States.

6.2 Pharmacovigilance.

(a) In accordance with the Safety Agreement to be entered into by the Parties pursuant to Section 6.2(d) hereof, following the transfer of any INDs related to Licensed Product from Novacea to Schering, the Parties shall be responsible for the collection and tracking, and Schering shall be responsible for the review, assessment, and filing, of information related to adverse events ( “AEs” ) associated with Licensed Product, in accordance with U.S. 21 CFR 312.32, 314.80, the European Legislation Directive 2004/27/EC, Council Regulation (EEC) No 2004/726, Commission Regulation (EC) No 540/95, European Union Guidance Volume 9 and Volume 9a on Rules Governing Medicinal Products, and Guidance Documents for the Clinical Trial Directive 2001/20/EC and other comparable regulations, guidance, directives and the like governing AEs associated with Licensed Product that are applicable.

(b) In accordance with the Safety Agreement to be entered into by the Parties pursuant to Section 6.2(d) hereof, as soon as is practicable following the Effective Date, but in any event within thirty (30) days of the Effective Date, Novacea will provide Schering with all

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known safety information for Licensed Products, including without limitation copies of all AEs reports, copies of all study reports of completed studies (including copies of the protocols), and copies of all interim study analysis of all ongoing studies for Licensed Product (including copies of protocols) to the extent not previously provided to Schering. In furtherance of the foregoing, Novacea shall transfer to Schering databases that are consistent with industry standards and contain all relevant information regarding adverse events that have been observed during any clinical trials conducted with respect to Licensed Product prior to the Effective Date.

(c) Within a reasonable period of time following receipt of all such information, Schering shall assume responsibility for maintaining a global safety database for Licensed Product consistent with industry practices.

(d) As soon as is practicable following the Effective Date, the Parties will enter into a Safety Agreement.

(e) Novacea hereby agrees that, following the Effective Date, it will cooperate with Schering to help ensure that Novacea’s information technology systems used for collecting, compiling, tracking and filing information related to AEs are compatible with Schering’s information technology systems for same.

ARTICLE 7

COMMERCIALIZATION AND MEDICAL EDUCATION

7.1 Joint Commercialization Committee

(a) At least [*] months prior to the anticipated filing of the first NDA/MAA in the Territory, the Parties will establish a joint commercialization committee ( “JCC” ). The primary role of the JCC shall be to exchange information and coordinate the activities of the Parties with respect to the support and Commercialization of the Licensed Products in the Field in the Territory.

(b) Effective as of the date of the initial approval from the FDA for the Licensed Product in the U.S., the JCC shall become responsible for approving the [*] and [*] by Schering for the Licensed Product in the U.S. The JCC will also provide a forum for discussing U.S. [*] and coordinating the U.S. medical education activities by the Parties, which will include discussion of [*] and the [*] to obtain Novacea’s input. Notwithstanding the foregoing, the JCC will not have any decision making authority with respect to any matters in the Territory related to [*] and [*] (including [*]),[*], or the content of [*].

(c ) Schering will have decision making authority with respect to all aspects of the Commercialization of the Licensed Product in the ROW, and shall keep Novacea reasonably informed with respect to such activities through periodic reports to the JCC.

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(d) [*] shall appoint a chairperson of the JCC from among its members. The chairperson shall be responsible for setting the agenda for, and calling and leading meetings of the JCC. Any member of the JCC may request that items be added to the agenda for discussion. The secretary of the meeting, as designated by the chairperson, shall prepare and distribute meeting minutes to all members of the JCC. Minutes of each JCC meeting shall be approved or disapproved, and revised as necessary, at the next meeting. Final minutes of each meeting shall be distributed to the members of the JCC by the chairperson.

(e) The JCC shall have [*] of representatives from each Party.

(f) Novacea’s membership in the JCC shall be at its sole discretion as a matter of right and not obligation for the sole purpose of participation in information sharing and coordination with respect to Commercialization activities. At any time prior to disbanding of the JCC pursuant to Section 7.1(g) below, Novacea shall have the right to withdraw from participation in the JCC upon thirty (30) days’ prior written notice to Schering, which notice shall be effective upon expiration of such thirty (30) day period (“ Withdrawal Notice ”). Following the issuance of a Withdrawal Notice and subject to this Section 7.1(f): (i) the JCC shall be disbanded; (ii) Schering shall have the right to make the final decision on all matters previously within the scope of authority of the JCC; (iii) in its sole discretion, Schering may terminate its funding obligations with respect to Novacea MSLs and, in such case, Novacea MSLs shall cease activities related to Licensed Product; and (iv) Schering may, in its sole discretion, replace existing Novacea MSLs with Schering MSLs.

(g) The JCC shall be automatically disbanded upon the earlier of (i) termination of the Royalty Term in the U.S. or (ii) discontinuation of MSL support by Novacea.

7.2 JCC Dispute Resolution. Decisions on any issues within the JCC’s purview will be made on a unanimous basis. If the JCC is unable to reach unanimous agreement on such an issue, such issue will be promptly referred to the [*] and the [*] (the “JCC Responsible Executives” ) who shall make good faith efforts to promptly resolve the matter in dispute within thirty (30) days, provided , however , that Schering shall have the right to make a final decision, and the Parties will proceed in the manner consistent with Schering’s position, on any time-sensitive matter disputed at the JCC where Schering reasonably determines that a delay in such decision is likely to have an adverse effect on the Commercialization of the Licensed Product. In furtherance and not in limitation of the foregoing, Schering shall have final decision making authority with respect to any matter in dispute that cannot be resolved by the JCC Responsible Executives. For the avoidance of doubt, disputes of the JCC resolved pursuant to this Section 7.2 (other than disputes related to compliance with this Agreement or the validity, breach, termination or interpretation of this Agreement; including, without limitation, whether the standard of Commercially Reasonable Efforts has been met) shall not be subject to any other dispute resolution mechanism or arbitration procedure.

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7.3 Commercialization and Medical Education Support.

(a) As of the Effective Date, Schering shall have sole responsibility and decision-making authority for and control over Commercialization and medical education activities related to the Licensed Product in the ROW (including, without limitation, pricing, marketing, promotion, distribution and sale) and Schering shall be responsible for all costs and expenses associated with the Commercialization activities related to the Licensed Product in the Field in the Territory, except as otherwise specified below with respect to certain Third Party royalties.

(b) The Parties will provide support for the Licensed Product in the U.S. as set forth herein. Novacea shall provide that number of MSLs as set forth in Stage 1 and Stage 2 below to support product launch and Schering shall have the option, in its sole discretion, to provide up to the greater of (i) [*] MSLs or (ii) [*] MSL per defined Schering U.S. Sales territory. Schering shall fund Novacea’s MSLs at the FTE Rate through the Royalty Term in the U.S., except as otherwise provided in Sections 7.1(f), 7.3(d), or 7.3(h). In the event that Novacea is unable to provide the agreed number of MSLs, as set forth below, within [*] months of the target date for bringing on such MSLs as established by the JDC or the JCC, Schering shall be permitted to increase the number of Schering MSLs accordingly and the number of MSLs that Novacea will provide will be reduced accordingly.

(i) Stage 1 : No later than [*] months prior to anticipated U.S. Regulatory Approval of Licensed Product for AIPC, Schering will fully fund (at the FTE Rate) [*] Novacea MSLs to support product launch; and

(ii) Stage 2 : No later than [*] months prior to anticipated U.S. Regulatory Approval of Licensed Product for the first of ADPC or Adjuvant Therapy, Schering will fully fund (at the FTE Rate) [*] additional Novacea MSLs to support product launch.

For purposes of this section, “ Dedicated MSLs ” shall mean MSLs (either of Schering or of Novacea) that dedicate [*] of their time to support of the Licensed Products.

(c) All Novacea MSLs will be managed by Novacea, but will be required to adhere to all Schering standard operating procedures, including, without limitation, with respect to hiring and operations, all of which shall be provided by Schering to Novacea. For purposes of clarity and in furtherance of the foregoing, all Novacea MSLs must be hired in accordance with Schering hiring policies and must perform in accordance with such minimum performance and reporting requirements and standard operating procedures as are established by Schering. All Novacea MSLs will be required to complete an activity report in the form required by Schering, which shall be submitted to Schering by the end of the calendar month to which such activity report relates. Novacea MSL managers will be responsible for reporting in to Schering’s operations management in a manner consistent with Schering’s reporting requirements. Novacea shall regularly monitor Novacea MSLs with respect to meeting Schering’s minimum performance requirements established by Schering, and Schering shall be permitted to

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periodically monitor Novacea MSLs with respect to such performance requirements. In the event that either Party determines that any Novacea MSLs do not meet such minimum performance requirements, including those for whom Schering has a reasonable expectation that they may not meet or continue to meet such requirements over a period of [*] days or more, it shall promptly notify the other Party and shall provide such other Party with sufficient information for it to confirm such findings. In the event that a Novacea MSL has not, for [*] consecutive months, performed in accordance with such minimum performance requirements, Novacea shall cause such Novacea MSL to cease activities related to the Licensed Product. Novacea has the right to replace such Novacea MSL, however, if Novacea fails to do so within [*] months, (i) Schering will be permitted to replace such Novacea MSL with a Schering MSL, notwithstanding any limitation on the number of MSLs that Schering may provide, and (ii) the minimum number of Novacea MSLs funded by Schering shall be reduced by one. In furtherance of the foregoing, to the extent that any Novacea MSL fails to adhere to any law or regulation applicable to its performance hereunder, Novacea will ensure that such Novacea MSL(s) immediately cease all activity related to the Licensed Products.

(d) While Schering is providing 100% of the funding for Novacea MSLs, Schering may, at its discretion, and with prior notice to Novacea, have such MSLs support other Schering products, provided , however , that, in such event, the MSLs shall continue to be Dedicated MSLs. Notwithstanding the foregoing, in the period expiring [*] after AIPC Regulatory Approval in the U.S., one hundred percent (100%) of Novacea MSL activity shall be dedicated to the Licensed Product. In the period beginning [*] months prior to the first to occur of the anticipated ADPC or Adjuvant Therapy Regulatory Approval in the U.S. and expiring [*] months after the first to occur of the anticipated ADPC or Adjuvant Therapy Regulatory Approval in the U.S., at least [*] percent [*] of Novacea MSL activity shall be dedicated to the Licensed Product with at least [*] percent [*] of Novacea MSL effort and physician visits directed at [*] To the extent that Novacea supports other Novacea owned and controlled products through its medical education infrastructure on terms to be established by the Parties; (1) Novacea must provide prior notice to Schering of such change at least [*] months in advance, including information regarding the other Novacea product(s) that it intends to have the Novacea MSLs support, and will work with Schering to ensure support of the Licensed Products is not adversely affected; (2) such Novacea MSLs must continue to be Dedicated MSLs; and (3) subsequent Schering funding of such Novacea MSLs will be reduced as follows: (a) if such Novacea MSLs provide up to [*] percent [*] (as a percentage of time) support to other Novacea owned and controlled products, Schering shall reduce its funding of such Novacea MSLs by [*] percent [*]; or (b) if such Novacea MSLs provide greater than [*] percent [*] up to [*] percent [*] (as a percentage of time) support to other Novacea owned and controlled products, Schering shall reduce its funding of such Novacea MSLs by the percentage of time such MSLs spend on Novacea products not licensed to Schering.

(e) If the Parties determine that additional Dedicated MSLs are desired or necessary in order to adequately support the Licensed Products, such Dedicated MSLs shall be Novacea MSLs funded by Schering at the above FTE Rate. If Schering has other MSLs that

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primarily support other Schering products and it wishes to have those MSLs provide some support to the Licensed Products, Schering may do so, provided that such additional MSLs are not Dedicated MSLs. [*] months prior to the anticipated filing of a Regulatory Application for the second Core Indication pursuant to the Core Development Plan, the JCC shall assess Schering’s and Novacea’s resources available to promote the Licensed Product. Subject to Section 7.2, should the JCC determine that Schering’s available resources are inadequate to Commercialize the Licensed Product in the U.S., the JCC may request that Novacea participate in Commercialization activities in the U.S. (which may include sales force support).

(f ) For the first [*] months following launch of the initial indication in each of the U.S., [*], Schering will support the Licensed Products in each such market as follows:

(i) In the U.S., Schering will support licensed product with [*] than [*] oncology field force. As of the Effective Date, the Parties agree that an appropriate composition of [*] oncology field force in the U.S. is between [*] and [*] representatives who will primarily target oncologists. The Parties further agree that the appropriate composition of [*] oncology field force in the U.S. may change over the term of this Agreement and therefore, Schering’s support of the licensed product may be adjusted by Schering as appropriate for a large international pharmaceutical company. Schering’s sales force will be supported by a team of appropriate account management, distribution, and reimbursement support in support of distribution to key customers; and

(ii) In the other markets listed above, Schering will commit a corresponding level of effort (as defined by local Schering standards), taking into account relative market size, field force structure, etc.

In all such markets, the Licensed Products will be the primary focus of the detailing efforts directed to appropriately targeted physicians, provided , however , that, in the event that there are significant differences between the proposed TPP and approved labeling for such initial indication, Schering reserves the right to adjust Commercialization efforts accordingly.

(g) Specific Provisions related to MSLs

(i) Novacea will comply with all applicable Laws in the hiring, employment, and discharge of all Novacea MSLs involved with performance of Novacea’s responsibilities under this Section 7.3. Novacea represents to Schering that Novacea is an Equal Opportunity Employer and does not discriminate against any person because of race, color, creed, age, sex, or national origin.

(ii) Novacea acknowledges and agrees that Schering does not and will not maintain or procure any worker’s compensation insurance for or on behalf of Novacea or any of Novacea’s MSLs, all of which shall be Novacea’s sole responsibility.

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(iii) Novacea acknowledges and agrees that all Novacea MSLs are not, and are not intended to be or be treated as, employees of Schering or any of its Affiliates, and that such individuals are not, and are not intended to be, eligible to participate in any benefits programs or in any “employee benefit plans”, as such term is defined in section 3(3) of ERISA, that are sponsored by Schering or any of its Affiliates or that are offered from time to time by Schering or its Affiliates to their own employees (the “Schering Benefit Plans”). All matters of compensation, benefits and other terms of employment for any such personnel shall be solely a matter between Novacea and such individual. Novacea shall be solely responsible and liable for the payment of all compensation and benefits under any such employee benefit plan to its MSLs.

(iv) Schering shall not be responsible to Novacea or to any Novacea MSLs used to perform Novacea’s obligations under this Section 7.3 with respect to Licensed Product for any compensation, expense reimbursements or benefits (including, without limitation, vacation and holiday remuneration, healthcare coverage or insurance, life insurance, pension or profit-sharing benefits and disability benefits), payroll-related taxes or withholdings, or any governmental charges or benefits (including without limitation unemployment and disability insurance contributions or benefits and workmen’ compensation contributions or benefits) that may be imposed upon or be related to the performance by Novacea and its MSLs of Novacea’s obligations under this Agreement, all of which shall be the sole responsibility of Novacea, even if it is subsequently determined by any court, the IRS or any other governmental agency that such individual may be a common law employee of Schering or any of its Affiliates.

(v) Novacea shall be solely responsible for its acts and omissions and for those acts or omissions of its MSLs while performing any of the services to be provided by Novacea under this Agreement.

(vi) Novacea will indemnify, defend, and hold harmless Schering and its Affiliates, and its and their directors, employees and agents from and against any and all damages, liability, losses and costs that may be paid or payable resulting from or in connection with any claim or other cause of action asserted by any Novacea MSLs, or by any Third Party (including without limitation federal, state or local governmental authorities) arising out of the execution and/or performance of any activities provided for in Section 7.3 of this Agreement that is based on or with respect to:

a. costs, damages and losses that Schering or its Affiliates may incur resulting from any claims for benefits that any Novacea MSLs may make under or with respect to any Schering Benefit Plan; and

b. any payment or obligation to make a payment to any Novacea MSLs relating in any way to any compensation, benefits of any type under any employee benefit plan (as such term is defined in Section 3(3) of ERISA), and any other bonus, stock option, stock purchase,

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incentive, deferred compensation, supplemental retirement, severance and other similar fringe or employee benefit plans, programs or arrangements that may be sponsored at any time by Schering or any of its Affiliates, or by Novacea or any of its Affiliates, even if it is subsequently determined by any court, the IRS or any other governmental agency that any Novacea MSL may be a common law employee of Schering or any of its Affiliates; and

c. the payment or withholding of any contributions, payroll taxes, or any other payroll-related item by or on behalf of Novacea or any of its MSLs with respect to which Novacea or any of its MSLs may be responsible hereunder or pursuant to applicable law to pay, make, collect, withhold or contribute, even if it is subsequently determined by any court, the IRS or by any other governmental agency that any such Novacea MSLs may be a common law employee of Schering or any of its Affiliates; and

d. failure of Novacea to withhold or pay required taxes or failure to file required forms with regard to compensation paid to Novacea by Schering and compensation and benefits paid or extended by Novacea to its MSLs.

Notwithstanding anything in this Section 7.3(g)(vi) to the contrary, Novacea shall have no liability to Schering or its Affiliates or their respective directors, employees and agents to the extent attributable to any discriminatory, harassing or retaliatory acts of Schering its Affiliates, or its or their directors, employees or agents, or any tortious acts (including without limitation acts constituting assault, battery or defamation) by Schering, its Affiliates, or its or their directors, employees or agents, with respect to any Novacea MSLs.

(vii) Novacea is and shall remain solely responsible and liable for all probationary and termination actions taken by it, as well as for the formulation, content, and for the dissemination (including content) of all employment policies and rules (including written probationary and termination policies) applicable to its employees and contractors.

(h) Notwithstanding anything herein to the contrary, in the event that the royalties payable by Schering in the U.S. are reduced pursuant to Section 10.4(c), Schering shall have the right, in its sole discretion, to reduce or eliminate its funding obligations with respect to Novacea MSLs. In such event, Novacea’s obligation to provide MSLs for the Licensed Product shall be correspondingly reduced or eliminated, as applicable; provided that in such case if and to the extent Schering elects to continue using some MSLs for the Licensed Product in the U

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