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CONFIDENTIALITY TREATMENT
REQUESTED
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EXHIBIT 10.7
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CONFIDENTIAL TREATMENT REQUESTED
UNDER RULE 24(b)(2) OF THE SECURITIES AND EXCHANGE ACT OF 1934.
CONFIDENTIAL TREATMENT IS REQUESTED AND IS NOTED WITH
“[CONFIDENTIAL TREATMENT REQUESTED].” AN UNREDACTED
VERSION OF THIS DOCUMENT HAS BEEN PREVIOUSLY FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION.
P ATENT AND K NOW - HOW
A SSIGNMENT AND L ICENSE
O PTION A GREEMENT
BY AND AMONG
T HE
S CHOOL OF P
HARMACY ,
U NIVERSITY OF L
ONDON
AND
S OMANTA L IMITED
CONFIDENTIAL TREATMENT
REQUESTED
Patent and know-how assignment
and license option agreement
THIS AGREEMENT dated March 16,
2004 is between:
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(1)
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THE SCHOOL
OF PHARMACY (“The
School of Pharmacy”) incorporated in England whose principal
address is 28-38 Brunswick Square, London WC1N 1AX; and
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(2)
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SOMANTIS
LIMITED (“Somantis”) a company incorporated
in England and Wales, (with company number [4201851]) whose
registered office is at 117 Alexandra Park Road, London N10
2DP.
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RECITALS:
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A.
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The School of
Pharmacy is the owner of the Patents (as defined below) and
possesses related Know-how.
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B.
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The School of
Pharmacy is willing to grant to Somantis and Somantis is willing to
accept, an option to obtain an assignment of the Patents and a
licence to use the Know-how (as defined below), in accordance with
the provisions of this Agreement.
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C.
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Somantis and
The School of Pharmacy have entered into a Research Collaboration
Agreement under which The School of Pharmacy shall conduct further
research funded by Somantis on the invention(s) disclosed by the
Patents.
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D.
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In accordance
with the Research Collaboration Agreement between the School of
Pharmacy and Somantis, Somantis has agreed to pay the patent
costs.
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IT IS AGREED as follows:
In this Agreement, the following
words shall have the following meanings:
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Affiliate
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In relation to
a Party, means any entity or person, which controls, is controlled
by, or is under common control with that Party. For the purposes of
this definition, “control” shall mean direct or
indirect beneficial ownership of 50% (or, outside a Party’s
home territory, such lesser percentage as is the maximum, permitted
level of foreign investment) or more of the share capital, stock or
other participating interest carrying the right to vote or to
distribution of profits of that entity or person, as the case may
be.
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Field
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The treatment
of cancer using the invention(s) disclosed in the
Patents.
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2
CONFIDENTIAL TREATMENT
REQUESTED
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Know-how
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All technical
information in the Field created during research carried out by The
School of Pharmacy under the direction of Prof. Laurence Patterson
in the possession of The School of Pharmacy relating directly to
the inventions claimed in the Patents.
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Option
Exercise Date
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Shall have the meaning given in Clause
8.1.
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Net
Receipts
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The total
amounts received by Somantis or its Affiliates from any person to
whom it grants a licence or sub-licence under the Patents and/or
Know-how (less any Value Added Tax or other sales tax), excluding
payments made for research work actually performed, but including
without limitation, up-front payments, milestone payments,
royalties, Premium on Equity from a licensee or sub-licensee, in
each case reasonably allocable to such licence or sublicence rights
under the Patents and/or Know-how. “Premium on Equity”
means the amount by which amounts received by Somantis for a
particular equity security exceed the fair market value of such
security.
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Net Sales
Value
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The
[CONFIDENTIAL TREATMENT REQUESTED] price of Royalty-bearing
Products sold by Somantis or its Affiliates to independent third
parties in arm’s length transactions exclusively for money
or, where the sale is not at arm’s length, the price that
would have been so [CONFIDENTIAL TREATMENT REQUESTED] if it
had been at arm’s length, after deduction of normal trade
discounts actually granted and any credits actually given and,
provided the amounts are separately charged on the relevant
[CONFIDENTIAL TREATMENT REQUESTED] , any costs of packaging,
insurance, carriage and freight, any value added tax or other sales
tax, and any import duties or similar applicable government
levies.
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Parties
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The School of
Pharmacy and Somantis, and “Party” shall mean either of
them.
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Patents
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Any and all of
the patents and patent applications referred to in Schedule 1,
including any continuations, continuations in part, extensions,
reissues, divisions, and any patents, supplementary protection
certificates and similar rights that are based on or derive
priority from the foregoing.
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Research Collaboration
Agreement
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A research
collaboration agreement between The School of Pharmacy and Somantis
under which Somantis shall fund further research by The School of
Pharmacy on the invention(s) disclosed in the Patents on terms
acceptable to both parties.
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3
CONFIDENTIAL TREATMENT
REQUESTED
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Royalty-bearing Products
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Any and all
products in the Field that are manufactured, sold or otherwise
supplied by Somantis and are within any Valid Claim of the Patents
or use the Know-how.
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Territory
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The
World.
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Valid
Claim
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A claim of a
patent or patent application that has not expired or been held
invalid or unenforceable by a court of competent jurisdiction in a
final and non-appealable judgment.
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2.1
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Grant of
Option . The School of
Pharmacy hereby grants to Somantis the right to purchase and
acquire the Patents in accordance with Clause 8.1.
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2.2
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Assignment
and Licence . On the
Option Exercise Date subject to the provisions of this Agreement,
The School of Pharmacy shall:
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(a)
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Assign the
Patents to Somantis; and
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(b)
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Grant to
Somantis an exclusive licence in the Field to use the Know-how,
with the right to sub-license, to develop, manufacture, have
manufactured, use and sell Royalty-bearing Products in the Field in
the Territory.
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2.3
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Formal
assignments and licences . In order to effect the assignments and licence
contemplated by Clause 2.2, the Parties shall execute such formal
assignments and licences as may be necessary or appropriate for
registration with Patent Offices and other relevant authorities in
particular territories; and in any event, at Somantis’
request, The School of Pharmacy shall execute an assignment in the
form set out in Schedule 3. In the event of any conflict in meaning
between any such assignment or licence and the provisions of this
Agreement, the provisions of this Agreement shall prevail wherever
possible. Prior to the execution of the formal assignment(s) and
licence(s) (if any) referred to above, the Parties shall so far as
possible have the same rights and obligations towards one another
as if such assignment(s) and licence(s) had been granted. The
Parties shall use reasonable endeavours to ensure that, to the
extent permitted by relevant authorities, this Agreement shall not
form part of any public record.
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2.4
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Reservation
of rights . From the
Option Exercise Date Somantis grants to The School of Pharmacy the
non-exclusive right to use the Patents, and The School of Pharmacy
reserves the non-exclusive right for itself to use the Know-how,
for the purposes of academic, non-commercial research and
publication of such research, subject to the confidentiality
provisions set out in Clause 3 below.
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4
CONFIDENTIAL TREATMENT
REQUESTED
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3.
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Know-how and
Confidential Information
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3.1
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Provision of
Know-how . Upon
Somantis’ reasonable request, The School of Pharmacy shall
supply Somantis with all Know-how in its possession that The School
of Pharmacy is at liberty to disclose and has not previously been
disclosed and which is reasonably necessary or desirable to enable
Somantis to undertake the further development of the
Royalty-bearing Products. The Know-how shall be subject to the
confidentiality provisions of Clause 3.4 and The School of Pharmacy
shall be bound by such provisions as if the Know-how had been
developed by Somantis and disclosed to The School of Pharmacy
hereunder. If it is agreed that any representative of The School of
Pharmacy shall travel to Somantis’ premises in connection
with such supply, Somantis shall reimburse all travel (at business
class rates), accommodation and subsistence costs
incurred.
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3.2
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Status of
Know-how . Somantis
acknowledges that the Know-how is at an early stage of development.
Accordingly, specific results cannot be guaranteed and any results,
materials, information or other items (together “Delivered
Items”) provided under this Agreement are provided “as
is” and without any express or implied warranties,
representations or undertakings. As examples, but without limiting
the foregoing, The School of Pharmacy does not give any warranty
that Delivered Items do not infringe third party rights, are of
merchantable or satisfactory quality, are fit for any particular
purpose, comply with any sample or description, or are viable,
uncontaminated, safe or non-toxic.
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3.3
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Responsibility for development of
Royalty-bearing Products . Somantis shall be exclusively responsible for
the technical and commercial development and manufacture of
Royalty-bearing Products and for incorporating any modifications or
developments thereto that may be necessary or desirable and for all
Royalty-bearing Products sold or supplied, and accordingly Somantis
shall indemnify The School of Pharmacy in the terms of Clause
7.4.
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3.4
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Confidentiality obligations
. Subject to the terms of this
Agreement, each Party (“Receiving Party”)
undertakes:
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(a)
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to maintain as
secret and confidential all Know-how and other technical or
commercial information obtained directly or indirectly from the
other Party (“Disclosing Party”) in the course of or in
anticipation of this Agreement and to respect the Disclosing
Party’s rights therein,
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(b)
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to use the same
exclusively for the purposes of this Agreement, and
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(c)
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to disclose the
same only to those of its employees, contractors and licensees or
sublicensees pursuant to this Agreement (if any) to whom and to the
extent that such disclosure is reasonably necessary for the
purposes of this Agreement.
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5
CONFIDENTIAL TREATMENT
REQUESTED
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3.5
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Exceptions
to obligations . The
provisions of Clause 3.4 shall not apply to Know-how and other
information which the Receiving Party can demonstrate by
reasonable, written evidence:
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(a)
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was, prior to
its receipt by the Receiving Party from the Disclosing Party, in
the possession of the Receiving Party and at its free disposal;
or
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(b)
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is subsequently
disclosed to the Receiving Party without any obligations of
confidence by a third party who has not derived it directly or
indirectly from the Disclosing Party; or
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(c)
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is or becomes
generally available to the public through no act or default of the
Receiving Party or its agents, employees, Affiliates or licensees
or sub-licensees; or
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(d)
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the Receiving
Party is required to disclose to the courts of any competent
jurisdiction, or to any government regulatory agency or financial
authority, provided that the Receiving Party shall (i) inform
the Disclosing Party as soon as is reasonably practicable, and
(ii) at the Disclosing Party’s request seek to persuade
the court, agency or authority to have the information treated in a
confidential manner, where this is possible under the court, agency
or authority’s procedures; or
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(e)
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in the case of
information disclosed by The School of Pharmacy to Somantis, is
disclosed to actual or potential customers for Royalty-bearing
Products in so far as such disclosure is reasonably necessary to
promote the sale or use of Royalty-bearing Products, provided that
the customers sign a written confidentiality undertaking at least
as restrictive as Clauses 3.4 and 3.5.
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3.6
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Disclosure
to employees . The
Receiving Party shall procure that all of its employees,
contractors and licensees or sub-licensees pursuant to this
Agreement (if any) who have access to any of the Disclosing
Party’s information to which Clause 3.4 applies, shall be
made aware of and subject to these obligations and shall have
entered into written undertakings of confidentiality at least as
restrictive as Clauses 3.4 and 3.5 and which apply to the
Disclosing Party’s information.
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3.7
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Right to Publish
Notwithstanding the provisions of
Clause 3.4, The School of Pharmacy shall have the right to use,
publish and present the Patents and Know-how for academic and
research purposes (irrespective of applications). The School of
Pharmacy will use reasonable endeavours to submit material intended
for publication which relates to the Patents or the Know-how to
Somantis in writing not less than thirty (30) days in advance
of the submission for publication. Somantis may request that
submission for publication be delayed if Somantis reasonably
believes that the intended publication would materially damage its
commercial interests (such as, without limitation, the protection
of confidential information or the filing of patent applications).
A delay imposed on submission for publication as a result of a
request made by Somantis shall not exceed sixty (60) days from
the date of receipt of the material by Somantis. Notification of
the request for delay in submission for publication must be
received by The School of Pharmacy within fourteen (14) days
after the receipt of the material by Somantis, failing which The
School of Pharmacy shall be free to assume that Somantis has no
objection to
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6
CONFIDENTIAL TREATMENT
REQUESTED
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the proposed publication. Nothing
in this Agreement shall prevent any registered student of The
School of Pharmacy from submitting for a degree of The School of
Pharmacy or the University of London a thesis based on or related
to the Patents or the Know-how, the examination of such a thesis by
examiners appointed by The School of Pharmacy or the University of
London, or the deposit of such a thesis in a library of The School
of Pharmacy or the University of London in accordance with the
relevant procedures of The School of Pharmacy or the University of
London.
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4.1
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Option
consideration . Within 30
days of the Option Exercise Date, Somantis shall pay The School of
Pharmacy the non-refundable, non-deductible sum of [CONFIDENTIAL
TREATMENT REQUESTED] .
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4.2
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Somantis shall
pay The School of Pharmacy [CONFIDENTIAL TREATMENT
REQUESTED] on the successful completion of animal studies,
demonstrating efficacy for the drug under development.
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4.3
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Somantis shall
as and when requested by The School of Pharmacy pay The School of
Pharmacy an amount equal to those costs incurred by The School of
Pharmacy in applying for and prosecuting the Patents, including
entering the national/regional phase of the prosecution of the
Patents together with all other costs incurred in the prosecution
of the Patents and the legal fees incurred by The School of
Pharmacy in negotiating this Agreement.
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4.4
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Somantis shall
pay The School of Pharmacy [CONFIDENTIAL TREATMENT
REQUESTED] on the first successful completion of Phase I
clinical trials of any of the Royalty-bearing Products (defined as
completion of the Phase I study.
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4.5
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Somantis shall
pay The School of Pharmacy [CONFIDENTIAL TREATMENT
REQUESTED] on the first successful completion of Phase II
clinical trials of any of the Royalty-bearing Products (defined as
completion of the Phase II study).
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4.6
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Somantis shall
pay The School of Pharmacy [CONFIDENTIAL TREATMENT
REQUESTED] on the first successful completion of Phase III
trials (defined as the completion of the Phase III study) of any of
the Royalty-bearing Products.
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4.7
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Within 60 days
of the date of this Agreement, Somantis shall issue to The School
of Pharmacy in consideration for the grant of the option in Clause
2.1 such number of fully paid-up ordinary shares in Somantis as
represents [CONFIDENTIAL TREATMENT REQUESTED] of the
authorised share capital of Somantis at the date of such issue. At
the date of this Agreement, the authorised share capital of
Somantis is 100 million shares each of 0.1p par value and
therefore The School of Pharmacy shall be issued with
[CONFIDENTIAL TREATMENT REQUESTED] .
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7
CONFIDENTIAL TREATMENT
REQUESTED
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4.8
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All sums due
under this Agreement:-
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(a)
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are exclusive
of Value Added Tax which where applicable will be paid by Somantis
to The School of Pharmacy in addition;
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(b)
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shall be paid
in pounds sterling by cheque or direct credit transfer made payable
to The School of Pharmacy , University of London;
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(c)
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shall be made
without deduction of income tax or other taxes charges or duties
that may be imposed, except insofar as Somantis is required to
deduct the same to comply with applicable laws. The Parties shall
cooperate and take all steps reasonably and lawfully available to
them, at the expense of The School of Pharmacy, to avoid deducting
such taxes and to obtain double taxation relief. If Somantis is
required to make any such deduction it shall provide The School of
Pharmacy with such certificates or other documents as it can
reasonably obtain to enable The School of Pharmacy to obtain
appropriate relief from double taxation of the payment in question;
and
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(d)
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shall be made
by the due date, failing which The School of Pharmacy may charge
interest on any outstanding amount on a daily basis at a rate
equivalent to [CONFIDENTIAL TREATMENT REQUESTED] above the
National Westminster Bank plc base lending rate then in
force.
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4.9
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If at any time
during the continuation of this Agreement Somantis is prohibited
from making any of the payments required hereunder by a
governmental authority in any country then Somantis will within the
prescribed period for making the said payments in the appropriate
manner use its best endeavours to secure from the proper authority
in the relevant country permission to make the said payments and
will make them within 7 days of receiving such permission. If such
permission is not received within 30 (thirty) days of Somantis
making a request for such permission then, at the option of The
School of Pharmacy, Somantis shall deposit the payments due in the
currency of the relevant country either in a bank account
designated by The School of Pharmacy within such country or such
payments shall be made to an associated company of The School of
Pharmacy designated by The School of Pharmacy and having offices in
the relevant country designated by The School of
Pharmacy.
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4.10.1
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Somantis shall
keep at its normal place of business detailed and up to date
records and accounts showing the stage of development of
Royalty-bearing Products and the quantity, description and value of
Royalty-bearing Products sold by it, and the amount of sublicensing
revenues received by it in respect of Royalty-bearing Products, on
a country by country basis, and being sufficient to ascertain any
payments due under this Agreement.
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8
CONFIDENTIAL TREATMENT
REQUESTED
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4.10.2
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Somantis shall
make such records and accounts available, on reasonable notice, for
inspection during business hours by an independent chartered
accountant nominated by The School of Pharmacy for the purpose of
verifying the accuracy of any statement or report given by Somantis
to The School of Pharmacy under this Agreement. The accountant
shall be required to keep confidential all information learnt
during any such inspection, and to disclose to The School of
Pharmacy only such details as may be necessary to report on the
accuracy of Somantis’ statement or report. The School of
Pharmacy shall be responsible for the accountant’s charges if
Somantis’ statement or
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