Exhibit 10.2
CONFIDENTIAL PORTIONS OF THIS AGREEMENT HAVE
BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR SUCH PORTIONS.
ASTERISKS DENOTE OMISSIONS.
MAYO FOUNDATION FOR MEDICAL
EDUCATION AND RESEARCH
LICENSE AGREEMENT
This patent license agreement
(“Agreement”) is by and between MAYO Foundation for
Medical Education and Research, a Minnesota charitable corporation,
located at 200 First Street SW, Rochester, Minnesota 55905-0001
(“MAYO”), and Exact Sciences, Inc., a for-profit
company located at 100 Campus Drive, Marlborough, MA 01752
(“EXACT”).
WHEREAS, MAYO desires to make its
intellectual property rights available for the development and
commercialization of products, methods and processes for public use
and benefit;
WHEREAS, EXACT represents itself as
being knowledgeable in developing and commercializing stool based
tests for the detection of colorectal cancer; and
WHEREAS, MAYO is willing to grant
and EXACT is willing to accept an exclusive license under such
rights for the purpose of developing such diagnostic
tests.
NOW THEREFORE, in consideration of
the foregoing and the terms and conditions set forth below, the
parties hereby agree as follows:
Article 1.00 —
Definitions
For purposes of this Agreement, the terms
defined in this Article will have the meaning specified and will be
applicable both to the singular and plural forms:
1.01
For MAYO,
“Affiliate” : any corporation or other
entity within the same “controlled group of
corporations” as MAYO or its parent Mayo Clinic. For
purposes of this definition, the term “controlled group of
corporations” will have the same definition as Section 1563
of the Internal Revenue Code as of November 10, 1998, but will
include corporations or other entities which, if not a stock
corporation, more than 50% of the board of directors or other
governing body of such corporation or other entity is controlled by
a corporation within the controlled group of corporations of MAYO
or Mayo Clinic. MAYO’s Affiliates include, but are not
limited to: Mayo Clinic; Mayo Collaborative Services, Inc.;
Rochester Methodist Hospital; Saint Marys Hospital; Mayo Clinic
Rochester; Mayo Clinic Florida; Mayo Clinic Arizona; and its Mayo
Health System entities.
For EXACT, “Affiliate” : any
corporation or other entity that controls, is controlled by, or is
under common control with, EXACT. For purposes of this definition,
“control” means ownership of: (a) at least 50% of the
outstanding voting securities of such entity; or (b) at least 50%
of the decision-making authority of such entity.
1.02
“Confidential
Information” : any
information or material disclosed by one party, the disclosing
party, to the other, the receiving party, identified in writing as
confidential at the time of disclosure or, if first disclosed
orally, identified as confidential and confirmed in
writing
within forty-five days. Confidential
Information expressly includes Know How and data and inventions
generated in connection with the Sponsored Research
Agreement. Confidential Information does not include any
information or material that the receiving party evidences is: (a)
already known to the receiving party at the time of disclosure
(other than from the disclosing party); (b) publicly known other
than through acts or omissions of the receiving party; (c)
disclosed to the receiving party by a third party who was not and
is not under any obligation of confidentiality; or (d)
independently developed by employees of the receiving party without
knowledge of or access to the Confidential Information.
1.03
“Effective
Date” : June
12, 2009.
1.04
“Field”:
stool or blood
based cancer screening, excluding use of a proteomic target
(Mayo files #2007-207 and 2007-212 and patent applications
“Removing Polypeptides from Stool”, U.S. application #
60/989,578 and PCT application # PCT/US2008/084278). For one
year from the Effective Date, EXACT shall have an exclusive option
to expand the Field to include the use of a proteomic target Such
option may be exercised by EXACT by providing thirty (30) days
written notice to MAYO.
1.05
“Know-How”
:
(a)
research and development
information, materials, technical data, unpatented inventions
, know-how and supportive information of Dr. Ahlquist and
his laboratory as of the Effective Date to the extent it is
necessary for the development or manufacture of a Licensed
Product. As of the Effective Date, such Know-How includes the
Invention and Assignment Records in Exhibit B hereto;
(b)
research and development
information, technical data, unpatented inventions ,
know-how and supportive information developed by Dr. Ahlquist as a
result of his activities pursuant to Section 2.06 to the extent it
is necessary for the development or manufacture of a Licensed
Product; and
(c)
research and development
information, technical data, unpatented inventions ,
know-how and supportive information developed by MAYO as a result
of MAYO’s activities under the work plans that are part of
the Sponsored Research Agreement to the extent it is necessary for
the development or manufacture of a Licensed Product.
1.06
“Licensed
Product” : any
product or process: (a) described by a pending claim of the
Patent Rights; (b) infringing an issued claim of the Patent Rights,
or that would infringe but for the exception in 35 U.S.C.
§271(e)(1), or similar exception in the United States or other
countries; and/or (c) the development, manufacture, use, sale,
offer for sale or importation of which incorporates, uses, was
derived from, identified by, validated, or developed in whole or in
part using the Know-How or Materials.
1.07
“Materials” : Biological specimens of human origin,
including without limitation tissues, blood, plasma, urine, stool
and derivatives thereof used by MAYO pursuant to work in
Dr.
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Ahlquist’s laboratory or provided by MAYO
(i.e. Dr. Ahlquist) to EXACT.
1.08
“Net
Sales” : the amount
invoiced by EXACT or Sublicensee for the transfer of a Licensed
Product to a third party less documented: (a) sales, excise or use
taxes shown on the face of the invoice, excluding value-added tax;
(b) credits for defective or returned Licensed Products actually
given; and (c) regular trade and discount allowances given.
Leasing, lending, consigning or any other activity by means of
which a third party acquires the right to possess or use a Licensed
Product is a transfer for the purpose of determining Net
Sales. Net Sales on Licensed Products transferred as part of
a non-cash exchange or other than to third parties shall be
calculated at the then-current customary sales price invoiced to
third parties or fair market value if there are no current invoices
to third parties. Net Sales accrues with the first of
delivery or invoice
1.09
“Patent
Rights” :
(a)
U.S. patents and applications listed
in Exhibit A hereto, together with divisionals, continuations, and
continuations-in-part (but only for subject matter supported
pursuant to 35 U.S.C. §112 by the foregoing) therefrom,
patents issuing thereon, re-examinations and re-issues thereof, as
well as extensions and supplementary protection certificates and
any foreign counterpart of any of the foregoing;
(b)
Any patent applications filed as a
result of Dr. Ahlquist’s activities pursuant to Section 2.06
hereto, together with divisionals, continuations, and
continuations-in-part (but only for subject matter supported
pursuant to 35 U.S.C. §112 by the foregoing) therefrom,
patents issuing thereon, re-examinations and re-issues thereof, as
well as extensions and supplementary protection certificates and
any foreign counterpart of any of the foregoing; and
(c)
Any patent applications filed with
MAYO inventors as a result of activities performed by MAYO under
the work plans that are part of the Sponsored Research Agreement,
together with divisionals, continuations, and continuations-in-part
(but only for subject matter supported pursuant to 35 U.S.C.
§112 by the foregoing) therefrom, patents issuing thereon,
re-examinations and re-issues thereof, as well as extensions and
supplementary protection certificates and any foreign counterpart
of any of the foregoing.
1.10
“Sponsored Research
Agreement”
the agreement outlining the research to be funded by EXACT and
performed at MAYO, as agreed upon by the parties in accordance with
this Agreement.
1.11
“Sublicensee”
: any third party or any Affiliate
to whom EXACT has conveyed rights or the forbearance of suit under
the Patent Rights, Know-How & Materials.
1.12
“Term”
: begins on the Effective Date and
ends, subject to Article 10, upon the date of the last to expire of
the Patent Rights, unless the Know-How or Materials are still in
use in a manner generating Net Sales, in which case upon the
earlier of five (5) years following the last to expire of the
Patent Rights or the date upon which EXACT ceases such use of the
Know-How or
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Materials.
1.13
“Territory”:
worldwide
Article 2.00 - Grant of
Rights
2.0l
GRANT. Subject to the terms and conditions of
this Agreement, MAYO grants to EXACT: (a) an exclusive license with
the right to sublicense, within the Field and Territory, under the
Patent Rights to make, have made, use, offer for sale, sell, and
import Licensed Products; and (b) a nonexclusive license with the
right to sublicense, within the Field and Territory, to use the
Know-How to develop, make, have made, use, offer for sale, sell,
and import Licensed Products.
2.02
RESERVATION OF
RIGHTS. All rights
herein are subject to (a) the rights and obligations to and
requirements of the U.S. government, if any have arisen or may
arise, regarding the Patent Rights, including as set forth in 35
U.S.C. §§200 et al., 37 C.F.R. Part 401 et al.
(“Bayh Dole Act”); and (b) MAYO’s and its
Affiliates’ reserved, irrevocable right to practice and have
practiced the Patent Rights in connection with MAYO’s and its
Affiliates’ educational, research and clinical programs,
including MAYO’s reference laboratory, Mayo Collaborative
Services, Inc. EXACT agrees to comply with the provisions of
the Bayh-Dole Act, to the extent such act applies, including
promptly providing to MAYO with information requested to enable
MAYO to meet its compliance requirements and substantially
manufacturing Licensed Product in the U.S.
2.03
NO OTHER RIGHTS
GRANTED. This
Agreement does not grant any right, title or interest in or to any
tangible or intangible property right of MAYO or its Affiliates,
including any improvements thereon, or to any Patent Rights or
Know-How & Materials outside the Field or Territory that is not
expressly stated in Section 2.01. All such rights, titles and
interests are expressly reserved by MAYO and EXACT agrees that in
no event will this Agreement be construed as a sale, an assignment,
or an implied license by MAYO or its Affiliates to EXACT of any
such tangible or intangible property rights.
2.04
SUBLICENSES.
Any sublicense by EXACT shall be to
a Sublicensee that agrees in writing to be bound by substantially
the same terms and conditions as EXACT herein, and with the
financial terms and conditions at least as favorable to MAYO as set
forth in the Agreement, or such sublicense shall be null and
void. Sublicenses granted hereunder shall not be
transferable, including by further sublicensing, delegatable or
assignable without the prior written approval of MAYO. EXACT
will provide MAYO with a copy of each sublicense agreement promptly
after execution. EXACT is responsible for the performance of
all Sublicensees as if such performance were carried out by EXACT
itself, including the payment of any royalties or other payments
provided for hereunder triggered by Sublicensee, regardless of
whether the terms of any sublicense require that Sublicensee pay
such amounts (such as in a fully paid-up license), or that such
amounts be paid by the Sublicensee directly to MAYO. Each
sublicense agreement shall name MAYO as a third party beneficiary
and unless MAYO has provided written consent, all rights of
Sublicensees shall terminate when EXACT’s rights
terminate.
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2.05
USE OF MATERIALS.
(a)
Use of the Materials by MAYO or
EXACT shall be subject to the prior approvals of MAYO’s
Institutional Review Board and the Mayo Clinic Research Biospecimen
Subcommittee.
(b)
Materials are owned by MAYO and any
transfer of such Materials to EXACT under the terms of this
Agreement shall not affect MAYO’s ownership interest
therein. MAYO shall clearly mark and identify all Materials
transferred to EXACT. All Materials will be maintained by
EXACT so that such Materials are readily identifiable. The
transfer of Materials to EXACT gives EXACT no rights in such
Materials other than those specifically set forth in this
Agreement. EXACT agrees to use the Materials solely for
research purposes and shall not transfer, deliver or otherwise
release such Materials to a third party without the express prior
written consent of MAYO. Upon expiration of a project and at
the instructions of MAYO, EXACT shall either return to MAYO or
destroy all unused Materials.
(c)
EXACT agrees to use the Materials in
accordance with the rights granted to EXACT under this
Agreement. All research conducted using the Materials shall
be conducted in accordance with all applicable state and federal
laws regarding such research.
(d)
Nothing in this Agreement provides
EXACT the right to transfer nucleic acids or any other material
extracted from Materials to any third party.
2.06
AHLQUIST COMMITMENT TO
CONFER.
(a)
Subject to MAYO approval and for so
long as Dr. Ahlquist is an employee of MAYO, Dr. Ahlquist will
confer on EXACT product development efforts, as a special advisor
to the EXACT board of directors and senior management. EXACT
will confer with Dr. Ahlquist in person in Rochester, MN, Madison,
WI or as mutually agreed, or by telephone. All travel
expenses incurred by Dr. Ahlquist in this role as advisor shall be
paid by EXACT. Dr. Ahlquist shall contribute on average
seventy five percent (75%) of his time ( i.e. approximately
3.75 days per week) during the first six months of this
Agreement. Should the parties agree that Dr. Ahlquist will
continue to work with EXACT in this capacity, the percent time
contributed by Dr. Ahlquist in a following period will be mutually
determined no later than three (3) months prior to the beginning of
such period. Except as provided in Section 3.01 or in the
Sponsored Research Agreement, MAYO shall be solely responsible for
compensating Dr. Ahlquist and his staff, provided, however, that in
consideration of the services provided under this Section 2.06(a),
EXACT shall pay MAYO the amounts set forth in Section
3.05.
(b)
Notwithstanding EXACT’s rights
to sublicense pursuant to Section 2.01 hereto, EXACT shall not have
the right to sublicense any obligation of Dr. Ahlquist to
confer.
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Article 3.00 -
Royalties
3.01
UP-FRONT.
(a)
Within thirty days of the Effective
Date, EXACT will make a nonrefundable and noncreditable up-front
payment to MAYO of EIGHTY THOUSAND DOLLARS (US $80,000).
(b)
Within thirty (30) days of the
Effective Date, EXACT will issue to MAYO the following
nonrefundable and noncreditable warrants:
(i)
1,000,000 warrants (as consideration
for the licenses granted hereunder) under the terms and conditions
of the warrant agreement attached hereto as Exhibit C;
and
(ii)
250,000 warrants (as partial
consideration for the Know-How services provided pursuant to
Section 2.06) with a four-year vesting schedule under the terms and
conditions of the warrant agreement attached hereto as Exhibit
D.
The strike price of the warrants
will be based on an average of the daily closing price of EXACT
shares for the two weeks prior to the Effective Date of this
Agreement. The warrant agreements shall include a cashless
exercise provision and a six year term extending from the date of
issuance of the warrant or, in the case of warrants subject to
vesting, the date the warrants vest.
3.02
MILESTONE FEES.
EXACT will pay the following
nonrefundable and noncreditable milestone fees to MAYO for the
first Licensed Product developed by EXACT upon the first
achievement of the following events:
(a)
TWO HUNDRED FIFTY THOUSAND DOLLARS
(US $250,000) on the commencement of patient enrollment in the
human cancer screening clinical trial, in support of a 510k or PMA;
and
(b)
FIVE HUNDRED THOUSAND DOLLARS (US
$500,000) upon FDA approval.
3.03
EARNED ROYALTIES
. EXACT will make
nonrefundable and noncreditable earned royalty payments to MAYO of
[***] of Net Sales of Licensed Products (“Earned
Royalties”). The Earned Royalties are payable as
described in Section 4.01. Licensed Products
transferred to MAYO or its Affiliates are not considered transfers
for purposes of determining Net Sales or for calculating Earned
Royalties. No Earned Royalties are due MAYO on transfers to
MAYO or MAYO Affiliates.
3.04
MINIMUM
ROYALTIES. EXACT
will pre-pay to MAYO minimum, annual, nonrefundable, noncreditable
royalties of TEN THOUSAND DOLLARS (US $10,000) on the third
anniversary of the Effective Date, and TWENTY-FIVE THOUSAND DOLLARS
(US $ 25,000) on the fourth anniversary of the Effective Date and
on each anniversary thereafter. Ongoing royalty payments in
the year following the third anniversary of the Effective Date are
due only on Net Sales of Licensed Product greater than SIX HUNDRED
SIXTY-SIX THOUSAND, SIX HUNDRED SIXTY-SEVEN DOLLARS (US
$666,667). Ongoing royalty
6
payments in the year following the fourth
anniversary of the Effective Date and in each year thereafter are
due only on Net Sales of Licensed Product greater than ONE MILLION,
SIX HUNDRED SIXTY-SIX THOUSAND, SIX HUNDRED SIXTY-SEVEN DOLLARS (US
$1,666,667).
3.05
COMPENSATION TO MAYO FOR AHLQUIST
KNOW-HOW. EXACT
will pay MAYO [***]. This amount will be payable monthly,
following receipt by EXACT of an invoice from MAYO.
3.06
SPONSORED RESEARCH
FUNDING .
(a)
The parties shall negotiate in good
faith the terms of the Sponsored Research Agreement with the goal
of executing such agreement no later than thirty (30) days
following the Effective Date.
(b)
EXACT agrees to support research in
the laboratory of Dr. Ahlquist during the first year after the
Effective Date at a minimum level of FIVE HUNDRED THOUSAND DOLLARS
(US $500,000), subject to mutually agreed upon work plans and
budgets and the execution of the Sponsored Research
Agreement. Such funding is contingent upon the continued
availability of Dr. Ahlquist pursuant to Section 2.06.
Failure to provide this minimum level of funding in the first year
after the Effective Date shall be considered a material breach of
this Agreement.
(c)
The degree of financial support to
be provided by EXACT for research in the second year and any
following years will be determined no later than three (3) months
before the expiration of the Sponsored Research Agreement, and will
be subject to mutually agreed upon work plans and
budgets.
3.07
TAXES. EXACT is responsible for all taxes,
duties, import deposits, assessments, and other governmental
charges, however designated, which are now or hereafter imposed by
any authority on EXACT: (a) by reason of the performance by MAYO of
its obligations under this Agreement, or the payment of any amounts
by EXACT to MAYO under this Agreement; (b) based on the Patent
Rights; or (c) related to use, sale or import of the Licensed
Product. Any withholding taxes which EXACT is required by law
to withhold on remittance of the royalty payments shall be deducted
from the royalty paid and EXACT shall promptly furnish MAYO with
original copies of all official receipts for such taxes.
EXACT will obtain, or assist MAYO in obtaining, any tax reduction
(including avoidance of double taxation), tax refund or tax
exemption available to MAYO by
