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SPONSORED RESEARCH COLLABORATION AGREEMENT
THIS SPONSORED RESEARCH AGREEMENT (the "Agreement") is entered
into as of November 7, 2007 (the "Effective Date"), by and between
DART THERAPEUTICS, LLC (the "Sponsor"), having its principal place
of business located at 4 Button Ball Lane, South Egremont MA 01258,
and COMBINATORX, INCORPORATED ("CombinatoRx"), having its principal
place of business located at 245 First Street, Sixteenth Floor,
Cambridge, MA 02142.
RECITALS
WHEREAS, CombinatoRx has developed a proprietary combination
drug discovery platform and is engaged in the identification and
development of new combination therapies;
WHEREAS, Charley's Fund and Nash Avery Foundation are dedicated
to accelerating the development of a treatment for Duchenne's
Muscular Dystrophy;
WHEREAS, Charley's Fund and Nash Avery Foundation have formed
the Sponsor for purposes of this Agreement;
WHEREAS, Charley's Fund and Nash Avery Foundation wish via the
Sponsor to sponsor, and CombinatoRx wishes to perform, research
focused on identifying clinical combination drug candidates as
potential treatments for Duchenne's Muscular Dystrophy, subject to
the terms and conditions of this Agreement, including the Research
Plan.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and premises contained in this Agreement, the parties
hereto agree as follows:
1. DEFINITIONS.
1.1 "Additional Payments" shall mean all amounts actually paid
to or on behalf of CombinatoRx pursuant to Section 3.2.
1.2 "Affiliate" shall mean any corporation or other entity that
controls, is controlled by, or is under common control with, a
party. A corporation or other entity shall be regarded as in
control of another corporation or entity if it owns or directly or
indirectly controls more than 50% of the voting securities or other
ownership interest of the other corporation or entity, or if it
possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of the corporation or
other entity. Notwithstanding the foregoing, Charley's Fund and
Nash Avery Foundation shall be deemed to be Affiliates of the
Sponsor.
1.3 "BioFocus License" shall have the meaning provided in
Section 6.3.
1.4 "Budget" shall have the meaning provided in Section 3.1.
1.5 "CombinatoRx Project Team" means the team of five (5)
CombinatoRx scientific FTEs who shall perform CombinatoRx's
Research obligations under the Research
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Plan. All of CombinatoRx's activities under this Agreement shall
be performed by the CombinatoRx Project Team.
1.6 "CombinatoRx Technology" shall have the meaning provided in
Section 6.1(b).
1.7 "Commercially Reasonable Efforts" shall mean efforts and
resources commensurate with the efforts and resources in research
and development used by a reasonable party for projects of
commensurate economic value taking into account the then state of
scientific knowledge and available resources.
1.8 "Confidential Information" shall mean any confidential or
proprietary information of a party, including, without limitation,
information relating to any compound, product specifications, data,
know-how, formulations, research project, work in process, future
development, scientific, engineering, manufacturing, marketing,
business plan, financial or personnel matter relating to such
party, its present or future products, sales, suppliers, customers,
employees, investors or business, whether in oral, written, graphic
or electronic form, subject to the limitations specified in Section
5.2 hereof. Without limiting the generality of the foregoing, the
terms of this Agreement shall be deemed the Confidential
Information of both parties.
1.9 "DMD" shall mean Duchenne's Muscular Dystrophy.
1.10 "DMD License" shall have the meaning provided in Section
4.3
1.11 "Drug Candidate" shall have the meaning provided in Section
2.3.
1.12 "Discontinued Drug Candidate" shall have the meaning
provided in Section 7.
1.13 "Exploitation" shall mean research, development, making,
having made, importing, having imported, using, having used,
selling, having sold, offering for sale, having offered for sale,
and otherwise exploiting.
1.14 "FDA" shall mean the United States Food and Drug
Administration (or its successor agency).
1.15 "Field" shall mean the treatment of DMD.
1.16 "First Commercial Sale" shall mean, with respect to any
Product, the first sale by CombinatoRx or any of its Affiliates or
Licensees to the general public of such Product in a country after
all required marketing and pricing approvals have been granted, or
otherwise permitted, by the governing health authority of such
country. "First Commercial Sale" shall not include the provision of
any Drug Candidate or Product for use in clinical trials, treatment
IND programs, named patient programs or for compassionate use prior
to the receipt of necessary marketing approvals.
1.17 "Grant Back License" shall have the meaning provided in
Section 7.
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1.18 "IND" shall mean an Investigational New Drug Application
filed with the FDA.
1.19 "Information" shall mean all tangible and intangible
techniques, technology, practices, trade secrets, inventions
(whether or not patentable), methods, knowledge, know-how, skill,
experience, test data and results (including pharmacological,
toxicological andclinical test data and results), analytical and
quality control data, results or descriptions, software,
algorithms, compositions of matter, cells, cell lines, assays,
animal models and physical, biological or chemical material.
1.20 "Licensee" shall mean a Third Party to whom CombinatoRx or
any of its Affiliates or licensees has granted a license or
sublicense of the right to develop, make, have made, use,
distribute for sale, promote, market, offer for sale, sell, have
sold, import or export Drug Candidate or Product, beyond the mere
right to purchase Drug Candidate or Product from CombinatoRx or its
Affiliates.
1.21 "Net Sales" shall mean the gross amounts received by
CombinatoRx and its Affiliates or their respective Licensees for
sales of Products approved in the Field to Third Parties that are
not Affiliates or Licensees of the selling party (unless such
Affiliate or Licensee is the end user of such Product, in which
case the amount billed therefor shall be deemed to be the amount
that would be billed to a Third Party end user in an arm's-length
transaction), less the following items, as allocable to such
Product (if not previously deducted from the amount invoiced): (i)
trade discounts, credits or allowances; (ii) credits or allowances
additionally granted upon returns, rejections or recalls; (iii)
freight, shipping and insurance charges; (iv) taxes, duties or
other governmental tariffs (other than income taxes); and (v)
government mandated rebates. Net Sales shall not include royalties
or any other payments received by CombinatoRx or its Affiliates or
their respective Licensees from any of their respective
Licensees.
1.22 "Patents" shall mean (a) United States and foreign patents,
re-examinations, reissues, renewals, extensions and term
restorations, and foreign counterparts thereof, and (b) pending
applications for United States and foreign patents, including,
without limitation, provisional applications, continuations,
continuations-in-part, divisional and substitute applications,
including, without limitation, inventors' certificates, and foreign
counterparts thereof.
1.23 "Product" shall mean a pharmaceutical product comprising or
containing a Drug Candidate, or any analog or derivative of any
such Drug Candidate, including, in each case, all formulations,
line extensions and modes of administration thereof.
1.24 "Research" shall mean the activities conducted pursuant to
the Research Plan.
1.25 "Research Funds" shall mean all amounts actually paid to
CombinatoRx pursuant to Section 3.1 or 3.2(i) and (ii).
1.26 "Research Plan" shall mean the research plan attached
hereto as Exhibit A.
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1.27 "Research Intellectual Property" shall mean (a) Information
developed in the course of performing the Research and (b) Patents
claiming such Information. Without limiting the generality of the
foregoing, "Research Intellectual Property" shall include any and
all Drug Candidates, other candidate co-therapy regimens,
combination drugs, drug admixtures, drug co-formulations and
processing technology, in each case, to the extent developed in the
course of performing the Research.
1.28 "Research Term" shall have the meaning provided in Section
2.5.
1.29 "Third Party" shall mean any entity other than the Sponsor,
Charley's Fund, Nash Avery Foundation or CombinatoRx or an
Affiliate of the Sponsor, Charley's Fund, Nash Avery Foundation or
CombinatoRx.
2. CONDUCT OF THE RESEARCH.
2.1 Objective. Subject to the terms and conditions of this
Agreement, the parties agree that, during the Research Term,
CombinatoRx shall use Commercially Reasonable Efforts to perform
the Research with the CombinatoRx Project Team in accordance with
the Research Plan with the goal of identifying Drug Candidates for
the treatment of DMD.
2.2 Research Plan; Contributions. The Research Plan sets forth
the activities to be conducted by CombinatoRx, the anticipated
duration of the Research, as well as the anticipated costs and
timing of the Research. CombinatoRx agrees to use Commercially
Reasonable Efforts to perform the Research with the CombinatoRx
Project Team on the schedule specified in the Research Plan. The
parties may, by mutual written agreement, amend the Research Plan
from time to time during the course of the Research and, in
connection therewith, may modify the funding amounts and schedule
set forth in Section 3.1 or provide for Additional Payments, as
appropriate provided that, no amendment to the Research Plan shall
(i) change the scope of the Research Plan in a manner that would
require CombinatoRx without its express written approval to devote
more than the CombinatoRx Project Team in the performance of all of
its obligations under this Agreement or materially increase the
materials and capital equipment required for CombinatoRx to perform
its activities under the Research Plan or (ii) increase Sponsor's
payment or materially increase any other obligation thereunder,
without the express written approval of Sponsor. Each party shall
contribute to the Research the materials and services specified in
the Research Plan.
2.3 The Research. As more fully described in the Research Plan,
the Research will be conducted by the CombinatoRx Project Team as
follows:
CombinatoRx shall use Commercially Reasonable Efforts to (i)
develop assays for two targets (Myostatin and NFkB) and validate
two assays (Utrophin and alpha-7-integrin) contributed or sourced
by Sponsor and (ii) perform in vitro screening activities for three
of the four targets deemed suitable for screening by the JRC as
described in the Research Plan. CombinatoRx shall disclose the
results of such screening to the Sponsor in accordance with Section
2.6, and the parties shall consult with each other to select one or
more single agents or combination drug candidates meeting the
criteria set forth in the Research Plan (or otherwise
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mutually agreed upon by the parties) for further evaluation in
animal models (each such single agent or combination drug candidate
being hereinafter referred to as a "Drug Candidate").
2.4 Performance Standards. CombinatoRx shall conduct the
Research in good scientific manner, and in compliance in all
material respects with the requirements of applicable laws and
regulations and with applicable good laboratory practices, to
attempt to achieve its objectives efficiently and expeditiously.
CombinatoRx shall maintain laboratories, offices and all other
facilities and personnel reasonably necessary to carry out the
activities to be performed by it pursuant to the Research Plan. In
conformity with standard pharmaceutical and biotechnology industry
practices and the terms and conditions of this Agreement,
CombinatoRx shall prepare and maintain, or shall cause to be
prepared and maintained, written records, reports and data with
respect to activities conducted pursuant to the Research Plan.
2.5 Research Term. The Research is expected to require two years
(the "Research Term") to reach the primary overall objective of
identifying a set of Drug Candidates that have demonstrated
activity in one or more of the DMD in vitro assays developed under
the Research Plan to be potential candidates for testing in the in
vivo mdx model of DMD.
2.6 Research Reports. CombinatoRx shall deliver to the Sponsor
quarterly reports within forty five (45) days of the end of each
calendar quarter summarizing the Research Intellectual Property
arising during the preceding calendar quarter. CombinatoRx shall
deliver to the Sponsor within ninety (90) days of the end of the
activities to be performed under the Research Plan a final written
report to summarize all experimental protocols and describe the
results of candidate combinations screened.
2.7 Subcontracts. CombinatoRx may perform some of its
obligations under the Research Plan through one or more
subcontractors, provided that (a) none of the Sponsor's rights
hereunder are diminished or otherwise adversely affected as a
result of such subcontracting, and (b) CombinatoRx will at all
times be responsible for the performance and, except as otherwise
expressly agreed by the parties in writing, payment of such
subcontractor.
2.8 Joint Research Committee.
2.8.1. Composition and Purposes. CombinatoRx and the Sponsor
will establish a Joint Research Committee ("JRC") consisting
initially of four (4) members (as may be increased or decreased by
the JRC) with the requisite experience and seniority to enable them
to make recommendations on behalf of the Parties with respect to
the initiation, planning and performance of the activities of the
Research Program, half of whom shall be designated from time to
time by each party. If the JRC chooses to designate a Committee
Chair, the Chair will be appointed from among the members of the
JRC designated by CombinatoRx. CombinatoRx shall designate a
person, who shall be the project manager for the Research, and such
project manager shall make reports to the JRC, and will provide the
JRC with notice of any replacement project manager, and any such
notice shall include the qualifications of such project manager.
The JRC shall meet, in person or by conference telephone, formally
no less frequently than once in each three (3) month period during
the Research Program, and at such time and location or by such
means, as may be established by the JRC, for the purpose of
reviewing and discussing the Research and evaluating and
considering any proposed revisions to the Research Plan except
that
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no such revisions shall increase the costs of the Research Plan
without the Sponsor's express written approval. The final meeting
will be held during the last month of the Research Term to review
all synergistic combinations and recommend a set of Drug Candidates
for testing in the in vivo mdx model. CombinatoRx shall prepare and
deliver minutes of the meetings to the members of the JRC, within
thirty (30) days after the adjournment date of each meeting,
setting forth, inter alia, all recommendations of the JRC. The JRC
shall terminate upon completion of the Research Plan.
2.8.2 Decision-Making. The objective of the JRC shall be to
reach consensus on all matters within the scope of the Research
Plan. CombinatoRx's representatives shall have the ultimate
decision-making authority if the JRC is unable to reach a consensus
on any matter. Each party shall retain the rights, powers, and
discretion granted to it under this Agreement, and the JRC shall
not be delegated or vested with any such rights, powers or
discretion except as expressly provided in this Agreement. The JRC
shall not have the power to amend or modify this Agreement, which
may only be amended or modified in a writing executed by the
Parties.
3. PAYMENTS.
3.1 Research Funding by the Sponsor. For the conduct of the
Research, the Sponsor shall pay a total of US$3,000,000 to
CombinatoRx. Payments shall be made to CombinatoRx quarterly in
advance in the amounts specified in the budget attached hereto as
Exhibit B (the "Budget") with the first such payment due within 5
business days of the date hereof and each quarterly payment due
within five business days of the beginning of the calendar quarter,
and as further described in the Budget. In addition, except as
agreed pursuant to Section 3.2, the foregoing payments reflect the
full cost of doing the Research, and the Sponsor will not be
obligated or expected to pay any additional amounts in connection
with the Research.
3.2 Additional Payments. In addition to the amounts specified
in
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