RESEARCH COLLABORATION AND COMMERCIALIZATION AGREEMENT

 

 

1.2    “Approval” shall mean all approvals, licenses, registrations and authorizations of all governmental agencies in a country necessary for the manufacture, use or sale of a Licensed Product in the applicable country.

 

1.3    “Biological License Application” or “BLA” shall mean a Biological License Application as defined in the U.S. Food, Drug and Cosmetics Act and the regulations promulgated thereunder, and any corresponding or equivalent foreign application, registration or certification.

 

1.4    “Calendar Quarter” shall mean each three-month period commencing January 1, April 1, July 1 or October 1 of each year during the term of this Agreement.

 

1.5    “Celldex Clinical Reagent(s)” shall mean reagents utilizing Celldex Patent Rights or Celldex Know-How and Ludwig Patent Rights or Ludwig Know-How and produced by or for Celldex to a clinical grade of GMP quality for use within the Research Program.

 

1.6    “Celldex APC Targeting Technology” shall mean any molecules expressly designed to selectively bind to antigen presenting cells through internalizing cell surface receptors and to carry Ludwig Antigens into these cells for subsequent immune processing which are covered or claimed, or for which the manufacture or use in the Field is covered or claimed, by a Valid Claim of an issued patent or a pending patent application within Celldex Patent Rights.

 

1.7    “Celldex Patent Rights” shall mean all: (i) U.S. patent applications, provisional applications, continuations, continuations-in-part, substitutions and divisionals; (ii) issued U.S. patents, re-examinations, reissues, renewals, extensions and term restorations; and (iii) non-U.S. counterparts of the foregoing applications and patents in (i) and (ii); that are in each case owned or Controlled by Celldex and that claim or cover the composition of matter of, methods of making, or methods of using  molecules expressly designed to selectively bind to antigen presenting cells through internalizing cell surface receptors and to carry antigens into these cells for subsequent immune processing;  in each case whether such patents or applications are filed before, on or after the date of this Agreement. Celldex Patent Rights existing as of the Effective Date of this Agreement shall be identified in Appendix B. Celldex may propose adding additional patents and applications filed after the Effective Date of this Agreement to Appendix B and Ludwig shall consider this request in good faith and provide its consent subject to Celldex’s established right of use and Ludwig being able to extend the rights under this Agreement having established that such consent does not conflict with license rights granted by Ludwig to third parties prior to the Effective Date of this Agreement.

 

1.8    “Celldex Know-How ” shall mean all data, information, inventions, discoveries, processes, methods, compositions, formulae, procedures, protocols, techniques, and results of experimentation and testing, including without limitation clinical trial data, whether patentable or not, that are owned or Controlled by Celldex and that relate to composition of matter of, methods of making, or methods of using the Licensed Products.

 

1.9    “Celldex Product” shall mean any product covered by Celldex Know-How or within Celldex Patent Rights.

 

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1.10    “Collaboration Steering Committee” shall have the meaning described in Article 2.2.

 

1.11    “Commercially Reasonable Efforts” shall mean, with respect to a Licensed Product, efforts and resources similar to those employed by companies in a similar stage of development as Celldex to develop, manufacture or market a Licensed Product of similar market potential at a similar stage in its Licensed Product life, taking into account for example the establishment of the Licensed Product in the marketplace, the competitiveness of alternative Licensed Products, the likely proprietary position of the Licensed Product, the likelihood of regulatory approval for the Licensed Product, the potential profitability of the Licensed Product and Celldex’s resources available.  Commercially Reasonable Efforts shall be determined on a market-by-market basis for each Licensed Product.

 

1.12    “Confidential Information” shall mean, subject to the provisions of Article 9 hereof, any information, whether in oral, written, graphic, electronic or tangible form, disclosed by one party to the other hereunder or under any agreement governing the use and disclosure of confidential information entered into by the parties prior to the Effective Date.

 

1.13    “Control” or “Controlled” shall mean, with respect to a particular item of information or intellectual property right, (i) that the party owns or co-owns and has the ability to grant to the other party the licenses to such item provided for herein, without violating the terms of any agreement or other arrangement with any third party, and/or (ii) that the party has a license to such item and has the ability to grant to the other party the licenses to such item provided for herein, without violating the terms of any agreement or other arrangement with any third party;  in each case whether such rights are acquired before, on or after the date of this Agreement.

 

1.14    “Field” shall mean any and all human and animal healthcare applications including therapy, diagnosis and prognostic monitoring, and prophylaxis.

 

1.15    “FDA” shall mean the U.S. Food and Drug Administration and any successor agency thereto.

 

1.16    “First Commercial Sale” shall mean, with respect to each Licensed Product in each country, the first bona fide commercial sale by Celldex, its Affiliates or Sub-licensees of such Licensed Product following Marketing Approval in such country; provided, however, that where such first commercial sale has occurred in a country for which government pricing or government reimbursement approval is needed for widespread commercial sale (for clarification, the parties acknowledge that no such approval is currently required in the United States), then such sales shall not be deemed a First Commercial Sale until such pricing or reimbursement approval has been obtained.

 

1.16.1 “ Full Length Antigens ” shall mean the full length protein forms of the Ludwig Antigens [*] .

 

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1.17      “IND” shall mean an Investigational New Drug application, as defined in the U.S. Food, Drug and Cosmetics Act and the regulations promulgated thereunder, or any corresponding or equivalent foreign application, registration or certification.

 

1.18     “ Licensed Product ” will mean any Targeted Antigen Reagent that is covered or claimed, or for which the manufacture or use in the Field is covered or claimed, by a Valid Claim of an issued patent or a pending patent application within Ludwig’s Patent Rights and which would be in breach of Ludwig’s Patent Rights without a license to such Ludwig Patent Rights under this Agreement.

 

1.19      “Ludwig Antigens” shall mean any antigen in nucleotide, polynucleotide or peptide, polypeptide or full length gene or full length protein form which is covered or claimed, or for which the manufacture or use in the Field is covered or claimed, by a Valid Claim of an issued patent or a pending patent application within Ludwig Patent Rights

 

1.19.1  “ Ludwig Know-How ” shall mean all data, information, inventions, discoveries, processes, methods, compositions, formulae, procedures, protocols, techniques, and results of experimentation and testing, including without limitation clinical trial data, whether patentable or not, that are owned or Controlled by Ludwig and that relate to composition of matter of, methods of making, or methods of using the Ludwig Antigens

 

1.20      “Ludwig Patent Rights” shall mean all: (i) U.S. patent applications, provisional applications, continuations, continuations-in-part, substitutions and divisionals; (ii) issued U.S. patents, re-examinations, reissues, renewals, extensions and term restorations; and (iii) non-U.S. counterparts of the foregoing applications and patents in (i) and (ii); that are in each case owned or Controlled by Ludwig and that claim or cover the composition of matter of, methods of making, or methods of using Full Length Antigens and Part-Length Antigens listed in Appendix A.

 

1.21      “Marketing Approval” shall mean, with respect to each country of the Territory for a particular Licensed Product, approval of the applicable MAA filed in such country by the health regulatory authority in such country that is the counterpart of the FDA.  It is understood that Marketing Approval does not necessarily include pricing or reimbursement approval.

 

1.22      “Marketing Approval Application” or “MAA” shall mean, on a Licensed Product-by-Licensed Product basis, a New Drug Application or Biologics License Application as required under the U.S. Food, Drug and Cosmetics Act and the regulations promulgated thereunder, or a comparable filing in a foreign country.

 

1.23      “Net Sales” shall mean, for any period, the gross amount invoiced by the Celldex and its Affiliates and Sublicensees for the sale of Licensed Product(s) to third parties, less deductions for:

 

(a) normal and customary trade, quantity and cash discounts and sales returns and allowances (other than allowances for doubtful accounts), including (i) those granted on account of price adjustments, billing errors, rejected goods, damaged goods, returns and rebates, (ii) administrative and other fees and reimbursements and similar payments directly related to the sale or delivery of Licensed Product(s) paid to wholesalers and other distributors, buying groups, pharmacy benefit management organizations, health care insurance carriers and other

 

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institutions, (iii) allowances, rebates and fees directly related to the sale or delivery of Licensed Product(s) paid to distributors and (iv) chargebacks;

 

(b) freight, postage, shipping and insurance costs to the extent that such items are included in the gross amount invoiced;

 

(c) customs and excise duties and other duties related to the sales to the extent that such items are included in the gross amount invoiced;

 

(d) rebates and similar payments made with respect to sales paid for or reimbursed by any governmental or regulatory authority such as, by way of illustration and not in limitation of the parties’ rights hereunder, Federal or state Medicaid, Medicare or similar state program or equivalent foreign governmental program;

 

(e) sales and other taxes and duties directly related to the sale or delivery of Licensed Product(s) (but not including taxes assessed against the income derived from such sale) to the extent that such items are included in the gross amount invoiced;

 

(f) distribution costs and expenses to the extent that such items are included in the gross amount invoiced; and

 

(g) any such invoiced amounts that are not collected by the parties or their Affiliates or Sublicensees;

 

provided, however, that with respect to the deductions specified in subsections (a) through (g) above, an amount shall be deducted only once regardless of how many categories may apply to it.

 

Any of the deductions listed above that involves a payment by Celldex or its Affiliates or Sub-licensees shall be taken as a deduction in the Calendar Quarter in which the payment is accrued by such entity.  Deductions pursuant to subsection (g) above shall be taken in the Calendar Quarter in which such sales are no longer recorded as a receivable.  For purposes of determining Net Sales, the Licensed Product(s) shall be deemed to be sold when invoiced and a “sale” shall not include transfers or dispositions for charitable, promotional, pre-clinical, clinical, regulatory or governmental purposes.

 

For purposes of calculating Net Sales of Licensed Products, sales between or among Celldex or its Affiliates or Sublicensees shall be excluded from the computation of Net Sales, but sales by Celldex or its Affiliates or its Sub-licensees to third parties shall be included in the computation of Net Sales.

 

In the event that a Licensed Product is sold in any country in the form of a combination Licensed Product containing one or more therapeutically active ingredients with respect thereto, the parties shall negotiate in good faith to determine what portion of the net sales of such combination Licensed Product in such country shall be treated as “Net Sales” under this Agreement, which determination shall be based on the value added by such other therapeutically active ingredients, to the invoice price of such combination Licensed Product.

 

1.24    “Non-Exclusive Commercial License” shall have the meaning set forth in Section 4

 

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1.25   “ Part Length Antigen(s)” shall mean Polypeptide Sequence forms of the Ludwig Antigens [*] .

 

1.26    “Phase I Clinical Trial” shall mean a human clinical trial, the principal purpose of which is a preliminary determination of safety in healthy individuals or patients as required in 21 C.F.R. §312, or a similar clinical study prescribed by the regulatory authorities in a country other than the United States.  A Phase I Clinical Trial shall be deemed to have commenced when the first subject in the study has been enrolled.

 

1.27   “ Polypeptide Sequence ” shall mean a protein sequence of less than 20 amino acids.

 

1.28    “Research Program Period” shall mean the period commencing on the Effective Date and ending on the earlier of (i) the termination of the Research Program pursuant to Section 2.7, the expiration of any extension(s), or (ii) the termination of the Agreement.

 

1.29    “Research Program” shall mean the program of research as defined under Article 2 herein.

 

1.30    “Sub-licensee” shall mean a third party to whom Celldex has granted a license or sublicense, as the case may be, pursuant to Section 4.3, to develop, make, have made, import, use, sell, offer for sale or otherwise exploit Licensed Products

 

1.31   “ Targeted Antigen Reagent ” shall mean any protein construct which contains Full Length Antigen(s) and/or Part Length Antigen(s) in whole or in part combined either through chemical conjugation or genetic fusion with Celldex APC Targeting Technology and any fragments or derivatives of any such construct.

 

1.32    “Territory” shall mean all countries of the world.

 

1.33   “ Valid Claim” shall mean a claim of an unexpired patent or pending patent application which shall not have been withdrawn, canceled, or disclaimed, nor held invalid or unenforceable by a court of competent jurisdiction or a regulatory agency with relevant authority in any unappealed or unappealable decision in the relevant country

 

2.                                       RESEARCH PROGRAM

 

2.1    Research Program.   Celldex and Ludwig agree to enter into a research collaboration in which Celldex will provide certain research reagents to Ludwig for Ludwig to incorporate into its preclinical and clinical research programs in cancer immunotherapy.

 

2.2    Management of Research Program.   Celldex and Ludwig will appoint a Collaboration Steering Committee (“CSC”) comprising two representatives of Celldex and two representatives of Ludwig to meet no less than twice yearly and to perform the following tasks: (a) agree the specific goals and objectives of the Research Program, and (b) review and report on Research Program progress.  Decisions of the CSC will require majority agreement for

 

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implementation.  In the event that the CSC fails to reach agreement on the goals and objectives of the Research Program, Celldex and Ludwig executives will meet to resolve such matters.

 

2.3    Reagents for the Research Program.   Celldex agrees to make available to Ludwig for use within the Research Program reagents incorporating Ludwig Patent Rights and Ludwig Know-How which Celldex generates or has generated using the Ludwig Patent Rights and Ludwig Know-How licensed under the terms of this agreement.

 

2.4    Reagents for Clinical Use in the Research Program.   Celldex agrees to make available to Ludwig without charge for use within the Research Program Celldex Clinical Reagents once they are produced by Celldex and under a Celldex IND provided that Celldex is not required to provide funding to Ludwig to support the use of such Celldex Clinical Reagents by Ludwig.  Such provision of Celldex Clinical Reagents to Ludwig is not intended to release Celldex from its obligations of diligence under Article 8 herein.  Ludwig shall not be obligated to undertake clinical trials of such Celldex Clinical Reagents if Ludwig’s resources or funding available to Ludwig for such clinical trials is deemed by Ludwig to be insufficient for such purpose.

 

2.5    Data arising from the Research Program.   Celldex and Ludwig agree to share data and findings arising from the Research Program through reports prepared for and reviewed by the CSC.  Celldex hereby agrees that Ludwig shall have the right to reference the Celldex IND pursuant to the Research Program.

 

2.6    Term of the Research Program.  Celldex and Ludwig agree that the Research Program will run for a [*] from the Effective Date and subject to the agreement of the Parties will extended annually thereafter by agreement of the CSC.

 

2.7    Termination of the Research Program.  Either Party may terminate the Research Program after [*] .

 

3.                                       RESEARCH LICENSES

 

3.1    Research Licenses to Ludwig for Each Targeted Antigen Reagent.   Celldex hereby grants to Ludwig a non-exclusive, non-sublicenseable, non-transferable license under the Celldex Patent Rights and Celldex Know-How during the Research Program Period to conduct pre-clinical research pursuant to the Research Program using Targeted Antigen Reagent(s).

 

3.2    Research Licenses to Ludwig for Each Celldex Clinical Reagent.   Celldex hereby grants to Ludwig a non-exclusive, non-sublicenseable, non-transferable license under the Celldex Patent Rights and Celldex Know-How during the Research Term to conduct clinical research pursuant to the Research Program using Celldex Clinical Reagent(s).

 

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3.3    Research License Period.

 

Initial Research License Period.   The Initial Research License Period for a particular Targeted Antigen Reagent or Celldex Clinical Reagent shall commence on the date that CSC agrees to initiate research on either a Targeted Antigen Reagent or Celldex Clinical Reagent within the Research Program and shall expire [*] .

 

Extension of Research License Period.  The Research License Period can be extended on a case-by-case basis with the agreement of the CSC only and a maximum of up to [*] .

 

3.4    Termination of Specific Research License.  Celldex may terminate the Research License for any Targeted Antigen Reagent or Celldex Clinical Reagent at any time by giving written notice to Ludwig provided that any clinical trials already underway by Ludwig which have been initiated as part of the Research Program are allowed to reach final patient recruitment and treatment.

 

4.                                       OPTIONS; COMMERCIAL LICENSES

 

4.1    Non-Exclusive Commercial License to Celldex. Ludwig hereby agrees to grant to Celldex a Non-exclusive, worldwide license, with rights to grant sub-licenses, under Ludwig Patent Rights and Ludwig Know-How to research, develop, make, have made, use, import, offer for sale, sell and have sold Licensed Products in the Field. For the avoidance of doubt no right or license is granted by Ludwig to Celldex under Ludwig Patent Rights and Ludwig Know-How to research, develop, make, have made, use, import, offer for sale, sell and have sold Full Length Antigen or Part Length Antigen except as part of a Targeted Antigen Reagent incorporated in a Licensed Product.

 

4.2    Termination of Non-Exclusive Commercial License.   If Celldex elects not to pursue the development of a given Ludwig Antigen as part of a Licensed Product, it may identify such Ludwig Antigen to Ludwig and thereafter payment as defined under Article 5 hereunder shall cease for such Ludwig Antigen.  All Celldex rights to such Ludwig Antigen will cease thereafter.

 

4.3    Sublicenses. Celldex may grant sublicenses under the Ludwig Patent Rights and Ludwig Know-How to the extent necessary to develop, make, have made, import, use, offer for sale and sell Licensed Products.  Each sublicense granted by Celldex shall be consistent with all the terms and conditions of this Agreement, and subordinate thereto, and Celldex shall remain responsible to Ludwig for the compliance of each such Sub-licensee with the financial and other obligations due under this Agreement. Following execution of any such sublicense Celldex shall inform Ludwig of the name of the sublicensee and terms of the granted sublicense. Celldex shall not grant any sublicense under this clause 4 to any third party associated with the manufacture and sale of tobacco related products.

 

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Research Rights. Ludwig on behalf of itself and the Cornell Research Foundation (“CRFI”), Cornell University, the Memorial Sloan Kettering Cancer Center (“MSKCC”), the University of Oxford (“UO”), and the Academisch Ziekenhuis Leiden (“AZL”) retain an irrevocable, nonexclusive, and nontransferable right to practice for their own educational and research purposes, the inventions claimed under Ludwig Patent Rights and Ludwig Know-how.

 

5.                                       CONSIDERATION

 

5.1    Non-Exclusive Commercial License Fees.  Within thirty (30) days following the Effective Date of this Agreement Celldex hereby agrees to pay Ludwig an annual license fee of US Dollars $7,500 for each Full Length Antigen and an annual license fee of US Dollars $2,500 for each Part Length Antigen until said Full Length Antigen or Part Length Antigen enters the earlier of a Celldex sponsored randomized Phase II or Phase III clinical trial as part of a Targeted Antigen Reagent at which point such annual license fee for said Full Length Antigen or Part Length Antigen shall terminate.

 

5.2   Milestone Payments.

 

5.2.1    Milestones.   Within thirty (30) days following the approval of the first BLA, or equivalent, on a Licensed Product and on a Targeted Antigen Reagent by Targeted Antigen Reagent basis, with respect to each Targeted Antigen Reagent subject to a Non-Exclusive Commercial License, Celldex shall pay to Ludwig [*] .

 

5.2.2    Subsequent Licensed Products.   Once a milestone payment has been made as defined under Section 5.5.1 on a first Targeted Antigen Reagent no further Milestone Payment shall be due on a subsequent Licensed Product containing such Targeted Antigen Reagent. For the avoidance of doubt, this would include combination Licensed Products wherein a previously paid milestone on a Targeted Antigen Reagent would not incur additional milestone payment; however, incorporation of Targeted Antigen Reagent(s) for which a milestone had not been previously been paid would be subject to this first milestone payment under Section 5.2.1.  This will ensure that each Ludwig Antigen will be eligible for a single milestone payment under Section 5.2.1.

 

5.2.3    Reports.   Except as set forth in Section 8.4, within fifteen (15) days of the occurrence of any event which would trigger a milestone payment according to this Section 5.2, Celldex shall provide notice to Ludwig of such occurrence.

 

5.3   Sublicense Payments

 

Celldex agrees to pay Ludwig [*] of all fees received as part of a sub-license of Celldex’s rights under Article 4 excepting fees received in the form of equity investments in Celldex, or fees received in return for research and development costs incurred or services provided by Celldex to such sub-licensee.

 

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5.4   Royalties.

 

5.4.1    Royalty on Net Sales.   In partial consideration for any Non-Exclusive Commercial License granted by Ludwig, Celldex shall pay to Ludwig a [*] royalty on annual worldwide Net Sales of Licensed Product on a country-by-country basis.

 

5.4.2    Royalty Term.   The royalties due pursuant to this Section 5.4 shall be payable on a country-by-country basis until the date which is the expiration of the last to expire of the patents within the Ludwig Patent Rights covering the Licensed Product in such country (such expiration to occur only after expiration of extensions of any nature to such patents which may be obtained under applicable statutes or regulations in the respective countries of the Territory, such as the Drug Price Competition and Patent Term Restoration Act of 1984 in the U.S.A. and similar patent extension laws in other countries),.

 

5.4.3    Third Party Royalties. In the event Celldex needs t