STRATEGIC ALLIANCE: NON-EXCLUSIVE LICENSE AGREEMENT

Strategic Alliance Agreement

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COLEY PHARMACEUTICAL GROUP INC, Inc | GLAXO GROUP LIMITED

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Title: STRATEGIC ALLIANCE: NON-EXCLUSIVE LICENSE AGREEMENT
Date: 4/20/2005
Industry: BIOTRX Sector: HEALTH

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Exhibit 10.22

CONFIDENTIAL

STRATEGIC ALLIANCE: NON-EXCLUSIVE LICENSE AGREEMENT

- BREAST, PROSTATE and LUNG CANCER -

This License Agreement (“Agreement”) is made by and between COLEY PHARMACEUTICAL GROUP INC., Inc. having a place of business at 93 Worcester Street, Suite 101, Wellesley, MA, 02481, USA (herein referred to as “COLEY”) and GLAXO GROUP LIMITED, a corporation located at, 980 Great West Road, Brentford, Middlesex TW8 9GS, United Kingdom (herein referred to as “GSK”).

WITNESSETH THAT :

WHEREAS, COLEY is the owner of certain right, title and interest in, and/or is otherwise in possession and/or control of the right to grant licenses under, certain patents in the manner and to the extent identified in Appendix A hereto, and know-how to the extent identified in Appendix B hereto, in the field of certain adjuvant technology which has been demonstrated to exhibit activity in animals and humans when used in combination with a variety of antigen materials; and

WHEREAS, GSK has developed and/or is developing or evaluating vaccines for the prevention and/or treatment of cancer in humans; and

WHEREAS GSK desires to obtain certain worldwide non-exclusive licenses from COLEY under the aforesaid patents and know-how in the FIELD (as defined below), and COLEY is willing to grant to GSK such licenses in accordance with the provisions set forth herein.

NOW, THEREFORE, in consideration of the covenants and obligations expressed herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound the parties agree as follows:

1. DEFINITIONS

1.01

“ADDITIONAL ADJUVANT” shall mean any and all compounds, compositions, components or formulation of components other than ADJUVANT included in PRODUCT or COMBINATION (provided ADDITIONAL ADJUVANT is contained in


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Portions of this Exhibit were omitted and have been filed separately with the Secretary of the Commission pursuant to the Company’s application requesting confidential treatment under Rule 406 of the Securities Act.

the vials, containers or other administration devices referred to in Section 1.26), used to induce, augment, fine-tune or enhance an ANTIGEN specific immune response of PRODUCT or COMBINATION on top of the response already induced, augmented, fine-tuned or enhanced by ADJUVANT in the PRODUCT or COMBINATION.

1.02

“ADJUVANT” shall mean (i) COLEY motifs and COLEY oligonucleotides containing immunostimulatory unmethylated cytosine guanine dinucleotides and (ii) any and all compounds or compositions, whether produced naturally or by semisynthetic or synthetic means, alone or in admixture with another material (excluding “ADDITIONAL ADJUVANT”), in a suitable vehicle which is used to induce, augment, fine-tune or enhance an ANTIGEN specific immune response and which is covered by, or made with the use of TECHNOLOGY. For the avoidance of doubt an oligonucleotide that does not induce, augment, fine-tune or enhance an ANTIGEN specific immune response is not an ADJUVANT for the purpose of the Agreement.

1.03

“AFFILIATE(S)” shall mean any corporation, firm, partnership or other entity, whether de jure or de facto , which directly or indirectly owns, is owned by or is under common ownership with a party to this Agreement to the extent of at least fifty percent (50%) of the equity (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) having the power to vote on or direct the affairs of the entity and any person, firm, partnership, corporation or other entity actually controlled by, controlling or under common control with a party to this Agreement.

1.04

“ANNUAL NET SALES VALUE” shall mean NET SALES VALUE of PRODUCTS and/or COMBINATIONS in a calendar year.

1.05

“ANTIGEN” shall mean any active ingredient such as (but not limited to) live attenuated micro-organisms, whole killed micro-organisms or subunit vaccines (e.g. polysaccharides, polysaccharide conjugates, peptides, recombinant proteins, glycolipids), that elicits an ANTIGEN specific immune response. ANTIGENS exclude antigens which are nucleic acids expressed in vivo following introduction of an encoded gene.

1.06

“BENEFIT” shall mean that:

the protective and/or therapeutic response to an ANTIGEN is improved (e.g. increased) or;


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the dosage of such an ANTIGEN is decreased (i.e. lesser dose needed) or;

the schedule of immunization or route of administration with such ANTIGEN is improved (e.g. lower number of inoculations).

1.07

“BROAD FIELD OF USE claim” shall mean a claim in existing PATENTS which as mutually agreed between both parties, provides an enforceable monopoly right which can be used to effectively prevent a THIRD PARTY (other than the other non-exclusive licensee(s)) from developing, using, making or marketing in the FIELD any product comprising a LICENSED ANTIGEN(S) in combination with any immunostimulatory oligonucleotide intended for use in humans containing an unmethylated cytosine guanine dinucleotide. In the event of any dispute between the parties as to whether a claim is a BROAD FIELD OF USE claim, such dispute shall be resolved in accordance with Section 15.02.

1.08

[deliberately left blank]

1.09

“COMBINATION” shall mean - subject to Section 1.26 — any and all pharmaceutical compositions covered by a single PRODUCT LICENSE and approved under such PRODUCT LICENSE for the sole purpose of PROPHYLACTIC IMMUNIZATION or THERAPEUTIC IMMUNIZATION in the FIELD consisting of:

(i)

PRODUCT in (a) vial(s) or other containers or administration devices which is (are) administered concomitantly with

(ii)

LICENSED ANTIGEN(S) in (a) vial(s) or other containers or administration devices which is(are) not adjuvanted with ADJUVANT,

provided that either (x) no PRODUCT LICENSE exists for such LICENSED ANTIGEN(S) contained in the vial(s) or other containers or administration devices under (ii) above which limits the use of such LICENSED ANTIGEN(S) to exclusive concomitant administration either with ADJUVANT or with PRODUCT under (i) above or with any or certain adjuvants (including but not limited to ADJUVANT), or (y) COLEY is unable to provide evidence that ADJUVANT as part of PRODUCT referred to under (i) above has provided a BENEFIT to the LICENSED ANTIGEN(S) referred to in (ii) above and which is beyond and above the BENEFIT provided by adjuvants other than ADJUVANT (contained in the same vials or other containers or administration devices as LICENSED ANTIGEN(S) referred to under (ii) above) to such LICENSED ANTIGEN(S). If either such a PRODUCT LICENSE referred to in (x) exists or


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COLEY is able to provide the evidence in (y), then the combination of (i) and (ii) shall be a PRODUCT, not a COMBINATION.

1.10

“COMPOSITION OF MATTER claim” shall mean a claim which provides an enforceable monopoly right that can be used to effectively prevent a THIRD PARTY (other than other non-exclusive licensee(s)) from developing, using, making or marketing any product in the FIELD for use in humans comprising a LICENSED ANTIGEN which GSK has incorporated into PRODUCT in combination with an ADJUVANT which GSK has incorporated into such PRODUCT which is in preclinical or clinical testing or on the market. In the event of any dispute between the parties as to whether a claim is a COMPOSITION OF MATTER claim, such dispute shall be resolved in accordance with Section 15.02.

1.11

“CONFIDENTIAL INFORMATION” shall mean any information, data, patents, documents, memoranda, reports, correspondence, drawings, clearly marked as CONFIDENTIAL and exchanged between both parties under this Agreement. Information disclosed orally must be reduced to writing and marked CONFIDENTIAL within thirty (30) days of the disclosure to be considered as CONFIDENTIAL INFORMATION.

1.12

“DISPUTED PATENT” shall mean University of Iowa Research Foundation US patent application No WO 96/02555 claiming priority to U.S. patent application Serial Number 08/276,358 dated 15/7/94 and all divisions and continuations of this application, all patents issuing from such applications, any reissues, reexaminations and extensions of all such patents and all foreign counterparts of the foregoing, and any other claim pertaining to any PATENT which has been made in writing by THIRD PARTIES on or before December 18, 1998 or during the EVALUATION PERIOD (as defined in the License Agreement - Infectious Diseases dated December 18, 1998 (as amended by Amendment No. 1 dated December 18, 1999) and which may adversely affect GSK’s rights hereunder.

1.13

“DNA VACCINE” shall mean a pharmaceutical composition for PROPHYLACTIC IMMUNIZATION or THERAPEUTIC IMMUNIZATION against cancers in humans, wherein the ANTIGEN (including LICENSED ANTIGEN(S)) is encoded in nucleic acid and expressed in vivo following introduction of the nucleic acid.

1.14

“EFFECTIVE DATE” shall mean, notwithstanding the date this Agreement is executed, 13 December 2001.


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1.15

“ESCROW” shall mean an account of GSK opened at a UK bank from which no amounts can be withdrawn other than by mutual consent of both parties or from which amounts can be released in accordance with the provisions of Section 3.06.

1.16

“FIELD” shall mean the use of ADJUVANT in combination with LICENSED ANTIGEN(S) as part of a PRODUCT and/or COMBINATION for the purpose of inducing, augmenting, fine-tuning or enhancing in vivo, in vitro or ex vivo of an ANTIGEN specific immune response and in all cases for PROPHYLACTIC IMMUNIZATION and/or THERAPEUTIC IMMUNIZATION against LICENSED CANCERS in humans, excluding SPECIFIC FIELD.

It is understood however that FIELD shall include the use of ADJUVANT in combination with LICENSED ANTIGEN(S) in the same vial regardless of whether ADDITIONAL ADJUVANT has been formulated in the same vial. Subject to Section 2.03, nothing shall prevent the use of PRODUCT and/or COMBINATION in the FIELD in conjunction with ANTIGENS for use outside the FIELD, provided that GSK shall not develop and/or register a product which combines such other ANTIGENS in the same vial, container or other means of administration with ADJUVANT (whether alone or formulated with LICENSED ANTIGEN(S)) and shall not seek a product license for such other ANTIGENS to be administered concomitantly with ADJUVANT (whether as part of PRODUCT or COMBINATION or alone), PRODUCT or COMBINATION, unless such other ANTIGEN is not derived from or is not specifically expressed in a particular cancer form but is broadly expressed in or present in solid tumor cancers including a LICENSED CANCER (e.g. such other ANTIGEN is associated with angiogenisis or tumor invasion mechanism) in which case product license for concomitant use and administration of such other ANTIGEN with ADJUVANT as part of PRODUCT or COMBINATION will be deemed within the FIELD.

1.17

“FIRST LICENSED ANTIGEN” shall have the meaning set forth in Section 1.20 below.

1.18

“INFRINGE” or “INFRINGED” or “INFRINGEMENT” shall mean that on a country per country basis, a THIRD PARTY (other than COLEY or its other non-exclusive licensee(s)) has filed a PLA for a product claimed by COLEY PATENT claims or is commercially manufacturing, commercially using or importing such a product, provided, however, that if COLEY can demonstrate that COLEY is, within a six (6)


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month period following such PLA filing of the THIRD PARTY product, actively negotiating with such THIRD PARTY a license in order to avoid INFRINGEMENT of the PATENT in all countries where such INFRINGEMENT exists and successfully enters into such license agreement, no INFRINGEMENT shall be deemed to exist or have existed. Failing to do so, INFRINGEMENT is deemed to exist as from the end of such six (6) month period. Notwithstanding the foregoing, in case of sale of such THIRD PARTY product and absent execution of the license agreement referred to above, INFRINGEMENT shall be deemed to exist.

1.19

“KNOW-HOW” shall mean all present and future technical information, materials and know-how which relate to ADJUVANT and which are now and/or at any time during the term of this Agreement developed, owned, proprietary to and/or controlled by COLEY and/or any AFFILIATES of COLEY and under which COLEY has now, or in the future, the right to grant licenses or sublicenses, and which are necessary for or useful to the development, production and commercialization of ADJUVANT within the FIELD. KNOW-HOW shall include, without limitation, all chemical, pharmacological, toxicological, clinical, assay, control and manufacturing data and any other information relating thereto and any materials, seeds, strains, reagents and media. KNOW-HOW shall not include PATENTS. A summary of KNOW-HOW is described in Appendix B. In all events KNOW-HOW shall be secret and substantial or contained in a PATENT or PATENT application in any country or described in Appendix B.

1.20

“LICENSED ANTIGEN” shall mean any ANTIGEN expressed in LICENSED CANCER for which a license to use ADJUVANT with such ANTIGENS is granted to GSK hereunder for the use specified in Section 2 as part of PRODUCT and/or COMBINATION in which ADJUVANT induces, augments, fine-tunes or enhances the ANTIGEN specific immune response of such LICENSED ANTIGEN. For the avoidance of doubt, LICENSED ANTIGEN shall refer to any and all ANTIGENS which are expressed in LICENSED CANCER, it being understood however that a maximum of three (3) LICENSED CANCER are the subject matter of the license granted hereunder. In this context “FIRST LICENSED ANTIGEN” refers to any and all ANTIGENS which are expressed in the LICENSED CANCER: Breast Cancer, “SECOND LICENSED ANTIGEN” refers to any and all ANTIGENS which are expressed in the LICENSED CANCER: Prostate Cancer, and “THIRD LICENSED ANTIGEN” refers to any and all ANTIGENS which are expressed in LICENSED CANCER: Lung Cancer.


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1.21

“LICENSED CANCER” shall mean any of the three licensed cancers listed in Section 2.01 for which a license to use ADJUVANT with LICENSED ANTIGEN(S) expressed in such cancer, is granted to GSK pursuant to Section 2.

1.22.I.

“NET SALES VALUE” shall mean the gross receipts from sales of PRODUCT and/or COMBINATION in the TERRITORY by GSK and/or its AFFILIATES to THIRD PARTIES less the following amounts actually paid or allowed by GSK and/or its AFFILIATES with respect to such sales:

(i)

transportation charges, including insurance; and

(ii)

GSK’s standard costs for syringes and other administration devices combined with or contained in commercial packaging; and

(iii)

sales and excise taxes and duties levied on the sale or delivery of PRODUCT and/or COMBINATION and contributions and payments required by any governmental authorities as liability provisions and/or made pursuant to injury compensation schemes and/or as product liability insurance premiums; and

(iv)

trade and quantity and cash discounts, governmentally required commissions and other customary rebates; and

(v)

allowances or credits to customers or charges back from customers on account of rejection or return of PRODUCT and/or COMBINATION subject to royalty under this Agreement or on account of retroactive price reductions affecting such PRODUCT and/or COMBINATION; and

(vi)

royalties payable and/or paid by GSK and/or its AFFILIATES to THIRD PARTIES on the manufacture, use and/or sale of PRODUCT and/or COMBINATION for the use in the FIELD of technology not encompassed within TECHNOLOGY and which is not the subject of the offset set forth in Section 4 hereof, and provided that deductions under this heading (vi) shall not exceed [****] percent ([*]%) of gross receipts from sales of PRODUCT and/or COMBINATION on which such royalty is payable hereunder in the TERRITORY by GSK and/or its AFFILIATES.

Sales between or among GSK and its AFFILIATES shall be excluded from the computation of NET SALES VALUE except where such AFFILIATES are end users, but NET SALES VALUE shall include the subsequent final sales to THIRD PARTIES by such AFFILIATES.


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1.22.II.

In the case of any COMBINATION, NET SALES VALUE of COMBINATION shall be calculated as follows:

(i)

By multiplying the NET SALES VALUE of the COMBINATION by the fraction A/A + B, where subject to the definition set forth in Sections 1.09 and 1.26, A is the gross selling price, during the royalty period in question, of PRODUCT(S) contained in the vials or other containers or administration devices referred to in Section 1.09(i), when sold separately; and B is the gross selling price, during the royalty period in question, of product(s) contained in the vials or other containers or administration devices referred to in Section 1.09 (ii), when sold separately; or

(ii)

In the event that no such separate sales are made of such components of such COMBINATION during the royalty period in question, NET SALES VALUE, for the purposes of determining royalty payments, shall be calculated using the above formula under (i) where A is the reasonably estimated commercial value of the PRODUCT(S) contained in the vials or other containers or administration devices referred to in Section 1.09(i) above, when sold separately, and B is the reasonably estimated commercial value of the other product(s) contained in the vials or other containers or administration devices referred to in Section 1.09(ii) above, when sold separately. Any such estimates shall be determined using criteria to be mutually agreed upon by the parties. Such estimates shall be reported to COLEY with the reports to be provided to COLEY pursuant to Section 10.02 hereof.

(iii)

If the parties cannot agree on any estimates as set forth in (ii) above, the matter shall be resolved pursuant to the provisions of Sections 15.02 and 15.03.

(iv)

In the event no reasonable commercial value can be attributed to the separate components of COMBINATION under paragraphs (ii) and (iii) above, the following formula shall apply: NET SALES VALUE shall be multiplied by the formula x/y in which x is the total number of LICENSED ANTIGEN contained in the vials or other containers or administration devices referred to in Section 1.09(i) and Y is the total number of ANTIGENS (including LICENSED ANTIGEN) contained in COMBINATION.


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1.23

“OPTION AGREEMENT” shall mean the Option Agreement dated December 18, 1998 and its Amendment no. 1 dated March 14, 2000 entered into by and between the parties hereto.

1.24

“OTHER PATENTS” shall mean patents and/or patent applications owned and/or controlled by THIRD PARTIES having claims which would be infringed by GSK developing, having developed, making, having made, using, having used, selling or having sold ADJUVANT as part of PRODUCT and/or COMBINATION.

1.25

“PATENT(S)” shall mean all patents and patent applications which are or become owned and/or controlled, in whole or in part, by COLEY and/or any AFFILIATES of COLEY including patents and patent applications claiming inventions made by COLEY under which COLEY has, now or in the future, the right to grant licenses or sublicenses and which generically or specifically claim ADJUVANT and/or use of ADJUVANT and/or a process for manufacturing ADJUVANT, and/or intermediates used in such process, and which are useful in the FIELD. Included within the definition of PATENTS are any continuations, continuations-in-part, divisions, patents of addition, reissues, renewals or extensions including SPC’s thereof. Also included within the definition of PATENTS are any patents or patent applications which generically or specifically claim or have claims covering any improvements of ADJUVANT or intermediates or manufacturing processes required or useful for production of ADJUVANT which are developed by COLEY, and/or under which COLEY otherwise has the right to grant licenses or sublicenses, now or in the future, during the term of this Agreement and in all cases which relate to the FIELD. The list of patents and patent applications encompassed within PATENTS on the EFFECTIVE DATE is set forth in Appendix A attached hereto. PATENTS shall consist of five groups: “IOWA PATENTS” listed in Section 1 of Appendix A, “LOEB PATENTS” listed in Section 2 of Appendix A, “ISIS PATENTS” listed in Section 3 of Appendix A, “PHS PATENTS” listed in Section 5 of Appendix A and “COLEY PATENTS” which shall include all PATENTS listed in Section 4 and all other PATENTS not listed in Section 1, 2, 3 or 5 of Appendix A.

[Each Section will list present patents and applications and will be updated to include all future patents and applications licensed to COLEY in the FIELD under the relevant agreement or will be updated to include those resulting from developments or inventions made by COLEY in the FIELD. Future patents and


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patent application in the FIELD licensed by COLEY which are not IOWA PATENTS, LOEB PATENTS or ISIS PATENTS shall be considered as COLEY PATENTS for the purpose of updating Appendix A.]

1.26

“PRODUCT” shall mean any and all pharmaceutical compositions for PROPHYLACTIC IMMUNIZATION and/or THERAPEUTIC IMMUNIZATION in the FIELD comprising (or including the administration of) one or more of the LICENSED ANTIGENS in combination with ADJUVANT as an ingredient or component in any formulation, configuration, combination and/or delivery system, in which ADJUVANT induces, augments, fine-tunes or enhances the ANTIGEN specific immune response of any of such LICENSED ANTIGEN(S) contained within PRODUCT. Subject to the above, it is explicitly understood that PRODUCT shall include:

(i)

a PRODUCT in (a) vial(s) or other containers or administration devices, all of which contain LICENSED ANTIGEN(S), combined with ADJUVANT and which may be adjuvanted with ADDITIONAL ADJUVANTS.

(ii)

a PRODUCT as defined in (i) above which is administered concomitantly with a product in (a) vial(s) or other containers or administration devices, all of which contain LICENSED ANTIGEN(S) which are not adjuvanted with ADJUVANT (the latter product hereinafter being referred to as “NON ADJUVANTED PRODUCT”) provided that either:

(ii) (x)

the PRODUCT LICENSE issued by the regulatory authorities limits the use of NON ADJUVANTED PRODUCT to exclusive concomitant administration only (except as set forth in the proviso in this sentence) with ADJUVANT or with PRODUCT as defined under (i) above regardless of whether NON ADJUVANTED PRODUCT is administered concomitantly in the same lymphnode as ADJUVANT or PRODUCT defined under (i) above, or not; provided that if the PRODUCT LICENSE limits the use to exclusive concomitant administration of NON ADJUVANTED PRODUCT with any or certain adjuvants (including but not limited to ADJUVANT) or with (a) product(s) which (all) contain(s) LICENSED ANTIGEN(S) and any or certain adjuvants (including but not limited to ADJUVANT), then a portion of the NON ADJUVANTED PRODUCT shall be treated as PRODUCTS and the parties shall determine the number of PRODUCTS to be so treated as follows: based on IMS data and sales data provided by GSK for the same period (which may be


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audited by COLEY at COLEY’s expense) for the sales of (a) vials or other containers or administration devices containing LICENSED ANTIGEN(S) and ADJUVANT on the one hand and (b) vials or other containers or administration devices containing LICENSED ANTIGEN(S) and the certain adjuvants other than ADJUVANT on the other hand, the number of NON ADJUVANTED PRODUCTS shall be distributed pro rata between (x) PRODUCTS, and (y) products consisting of LICENSED ANTIGEN(S) and an adjuvant other than ADJUVANT.

or:


				(ii)(y)				even if there is no such restriction in the PRODUCT LICENSE for NON ADJUVANTED PRODUCT as provided for under (ii) (x) above, COLEY is able to demonstrate that NON ADJUVANTED PRODUCT which is adjuvanted with adjuvant(s) other than ADJUVANT BENEFITS from ADJUVANT contained in PRODUCT defined in (i) above and such BENEFIT is beyond and above the BENEFIT provided by adjuvants contained in NON ADJUVANTED PRODUCT.

1.27

“PRODUCT LICENSE” means the receipt of all necessary approvals from the relevant regulatory authority for the sale of PRODUCT or COMBINATION.

1.28

“PROPHYLACTIC IMMUNIZATION” shall mean the use of PRODUCT or COMBINATION to immunize humans with no diagnosed relevant disease.

1.29

“SECOND LICENSED ANTIGEN” shall have the meaning set forth in Section 1.20 above.

1.30

“SIGNIFICANT COMPETITION” shall mean on a country-per-country and PRODUCT-per-PRODUCT basis including COMBINATIONS, the marketing by a THIRD PARTY (other than COLEY or its other non-exclusive licensee(s)) of a competing product (including a combination) in the FIELD which utilizes unmethylated cytosine guanine dinucleotides as adjuvant in combination with LICENSED ANTIGEN(S) licensed hereunder, to the extent such competitor has achieved a market share of [******] percent ([**]%) or more or has doubled the market share it had achieved in the previous year from a base market share of at least [****] percent.


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1.31

“SPC” shall mean all Supplementary Protection Certificates for medicinal products and their equivalents provided under the Council Regulation (EEC) N° 1768/92 of June 18, 1992.

1.32

“SPECIFIC FIELD” shall mean without limitation the use of ADJUVANT (i) in combination with DNA VACCINES or (ii) other than in combination with a LICENSED ANTIGEN and independently from a LICENSED ANTIGEN or (iii) in combination with antibodies in passive immunotherapy applications when not combined with a tumor ANTIGEN; or (iv) in all non ANTIGEN specific ex vivo applications or (v) for all purposes other than eliciting, inducing, augmenting, fine-tuning or enhancing an ANTIGEN-specific immune response.

1.33

“TECHNOLOGY” shall mean KNOW HOW and/or PATENTS.

1.34

“TERRITORY” shall mean all the countries and territories in the world.

1.35

“THERAPEUTIC IMMUNIZATION” shall mean the use of PRODUCT or COMBINATION to treat humans with diagnosed relevant disease.

1.36

“THIRD LICENSED ANTIGEN” shall have the meaning set forth in Section 1.20 above.

1.37

“THIRD PARTY(IES)” shall mean any party which is neither a party to this Agreement nor an AFFILIATE.

1.38

“VALID CLAIM” shall mean a claim subsisting in a patent or in a pending patent application, being a claim that has not finally been canceled, revoked or held invalid by a final decision of a court or other authority having jurisdiction to decide the issue. A final decision in this context means a decision which has become legally binding either because no appeal has been taken and the time for appeal has expired, or because any appeal taken is no longer pending, leaving the decision of cancellation, revocation or invalidation standing without possibility of further appeal.

For the purpose of this Agreement, except as otherwise expressly provided in this Agreement or unless the context otherwise requires: (a) defined terms include the plural as well as the singular and the use of any gender shall be deemed to include the other gender; (b) references to “Articles”, “Sections” and other subdivisions and to “Schedules” without reference to a document, are to designated Articles, Sections and other subdivisions of, and to Schedules to, this Agreement; (c) the use of the term “including” means “including but not


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limited to”; and (d) the words “herein”, “hereof”, “hereunder” and other words of similar import refer to this Agreement as a whole and not to any particular provisions.

GRANT

2.01

(a) In consideration of the obligations assumed by GSK hereunder and subject to the terms and conditions of this Agreement, as of the EFFECTIVE DATE COLEY hereby grants to GSK and to any AFFILIATES of GSK a non-exclusive license under TECHNOLOGY to develop, have developed, make, have made, use, have used, sell, offer for sale, have sold, keep and/or import in the TERRITORY and in the FIELD any PRODUCTS and/or COMBINATIONS in any formulation, composition or delivery systems (including without limitation ADJUVANTS for use as part of PRODUCTS and/or COMBINATION) which contain any of the following two LICENSED ANTIGENS:

•

Any and all ANTIGENS expressed in Prostate Cancer

•

Any and all ANTIGENS expressed in Breast Cancer.

(b) In further consideration of the obligations assumed by GSK hereunder and subject to the terms and conditions of this Agreement, as of May 22, 2002 COLEY hereby grants to GSK and to any AFFILIATES of GSK a non-exclusive license under TECHNOLOGY to develop, have developed, make, have made, use, have used, sell, offer for sale, have sold, keep and/or import in the TERRITORY and in the FIELD any PRODUCTS and/or COMBINATIONS in any formulation, composition or delivery systems (including without limitation ADJUVANTS for use as part of PRODUCTS and/or COMBINATION) which contain the following LICENSED ANTIGENS:

•

Any and all ANTIGENS expressed in Lung Cancer.

2.02

GSK, and GSK alone, may choose to exclude from the license granted under Section 2.01 the IOWA PATENTS, the LOEB PATENTS, PHS PATENTS or the ISIS PATENTS.

2.03

The license granted hereby shall not include the right to sell ADJUVANT except when included in a vial or other container or administration device containing at least one LICENSED ANTIGEN as part of PRODUCT or COMBINATION. Subject to the definition of FIELD set forth in Section 1.16, the license granted by this Section shall not include the right to develop, have developed, make, have made,


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use, have used, sell, have sold, keep and/or import any product for use in any cancer or disease other than a LICENSED CANCER. GSK agrees that it will not seek a PRODUCT LICENSE to sell any PRODUCT or COMBINATION for any cancer or disease other than a LICENSED CANCER and will not promote any PRODUCT or COMBINATION for any use other than for a LICENSED CANCER. For the sake of clarity, nothing in this Agreement shall be construed by any means as a limitation of GSK’s rights pursuant to the License Agreement-Infectious Diseases dated December 18, 1998 (as amended by Amendment No. 1 dated December 18, 1999).

3.	LICENSE FEES, PATENT GRANT FEES, MILESTONE PAYMENTS AND ROYALTIES

3.01.

(a) In consideration of PATENTS and KNOW-HOW resulting from the use of the research performed by COLEY prior to the EFFECTIVE DATE and the right to use pre-clinical information developed by COLEY prior to the EFFECTIVE DATE, the parties acknowledge and agree that GSK has paid COLEY a non-refundable license fee in the amount of one (1) million US dollars ($1,000,000 US$) for each of the FIRST LICENSED ANTIGEN and SECOND LICENSED ANTIGEN, which payments were received by COLEY prior to the execution of this Agreement.

(b) In further consideration of PATENTS and KNOW-HOW resulting from the use of the research performed by COLEY prior to the EFFECTIVE DATE and the right to use pre-clinical information developed by COLEY prior to the EFFECTIVE DATE, GSK shall pay once only for the THIRD LICENSED ANTIGEN the following non-refundable License Fee to COLEY: two million US dollars (2,000,000 US$), which shall be paid within five (5) working days of the execution of the present Agreement by the last party hereto.

(c) The above referenced License Fees shall be allocated among the IOWA PATENTS, LOEB PATENTS, ISIS PATENTS, PHS PATENTS, COLEY PATENTS and KNOW HOW as follows:

For each of the FIRST LICENSED ANTIGEN and the SECOND LICENSED ANTIGEN :


IOWA PATENTS:		[*******] US$
LOEB PATENTS:		[*******] US$
ISIS PATENTS:		[******] US$
PHS PATENTS:		[******] US$
COLEY PATENTS:		[*******] US$
KNOW HOW:		[******] US$

TOTAL: 1,000,000 US$ for each of the FIRST and SECOND LICENSED ANTIGENS


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For the THIRD LICENSED ANTIGEN :


IOWA PATENTS:	[	*******] US$
LOEB PATENTS:	[	*******] US$
ISIS PATENTS:	[	*******] US$
PHS PATENTS:	[	*******] US$
COLEY PATENTS:	[	*******] US$
KNOW HOW:	[	*******] US$

TOTAL: 2,000,000 US$ for the THIRD LICENSED ANTIGEN

In the event GSK elects to exclude any of the above groups of PATENTS from its license for any LICENSED CANCER and the related LICENSED ANTIGEN pursuant to Section 2.02, the License Fee will be reduced by the amount set forth above for such group of PATENTS.

3.02

(a) GSK shall pay once only for the FIRST LICENSED ANTIGEN and once only for the SECOND LICENSED ANTIGEN and once only for the THIRD LICENSED ANTIGEN the following milestone payments to COLEY upon the first achievement of the following development milestones for the first PRODUCTS or COMBINATIONS containing such LICENSED ANTIGENS:

Initiation of first phase 1 clinical trial in the USA, Canada or Europe:

For each of the FIRST and SECOND LICENSED ANTIGENS: [*********************] US dollars ([*******] US$); and

For the THIRD LICENSED ANTIGEN: [***********] US dollars ([*********] U.S. $).

Initiation of phase II clinical trial in the USA, Canada or Europe:

For each of the FIRST and SECOND LICENSED ANTIGENS: [*********************] US dollars ([*******] US$); and


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For the THIRD LICENSED ANTIGEN: [***********] U.S. dollars ([*********] U.S. $).

Initiation of phase Ill clinical trial in the USA, Canada or Europe:

For each of the FIRST and SECOND LICENSED ANTIGENS: [*********************************] U.S. dollars ([*********] US$)

For the THIRD LICENSED ANTIGEN: [**************] U.S. dollars ([*********] U.S. $).

Submission and acceptance for regulatory review for marketing approval of PRODUCT or COMBINATION to the appropriate regulatory agency in USA:

For each of the FIRST and SECOND LICENSED ANTIGENS: [*********************************] U.S. dollars ([*********] US$); and

For the THIRD LICENSED ANTIGEN: [**************] U.S. dollars ([*********] U.S.$).

Submission and acceptance for regulatory review for marketing approval of PRODUCT or COMBINATION to the appropriate regulatory agency in Europe (as defined below):

For each of the FIRST and SECOND LICENSED ANTIGENS[***********************************] U.S. dollars ([*********] US$); and

For the THIRD LICENSED ANTIGEN: [**************] U.S. dollars ([*********] U.S.$).

Marketing approval of PRODUCT or COMBINATION by the FDA in the USA:

For each of the FIRST and SECOND LICENSED ANTIGENS: [**************] U.S. dollars ([*********] U.S.$).

For the THIRD LICENSED ANTIGEN: [***********] U.S. dollars ([*********] U.S.$).


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License Maintenance Fee: GSK shall pay a license maintenance fee for the first PRODUCT and/or COMBINATION only in the amount of: (a) [******************************] US dollars ([*******] US$) per year for each of the FIRST LICENSED ANTIGEN and the SECOND LICENSED ANTIGEN, and (b) [*********************] US dollars ([*******] US$) per year for the THIRD LICENSED ANTIGEN, each as from the fourth anniversary of the initiation of a successful pivotal phase Ill clinical trial in Europe, USA or Canada until the moment the first marketing approval for such PRODUCT or COMBINATION is obtained in Europe, USA or Canada, whichever is the first. For the avoidance of doubt, no such license maintenance fee shall be due if PRODUCT or COMBINATION is registered in Europe, USA or Canada prior to such fourth anniversary of the initiation of pivotal phase III clinical trial in Europe, USA or Canada.

If any milestone is reached without achieving a preceding milestone, then the amount which would have been payable on achievement of the preceding milestone shall be payable upon achievement of the following milestone. For example, if a PRODUCT relating to the FIRST or SECOND LICENSED ANTIGEN is submitted and accepted for regulatory review for marketing approval on the basis of a Phase II trial without conducting a Phase III trial, then a total of [*********] US$ will be due upon such submission and acceptance ($[*********] for such submission and acceptance and $[*********], which would have become payable upon the initiation of Phase III). If any milestone has been reached prior to execution of this Agreement, the milestone payment for such milestone shall be paid upon execution of this Agreement.

3.03

In Section 3.02 the following terms shall have the meanings defined below:

“Initiation” for the purpose of Phase 1 clinical trial, Phase 2 clinical trial and Phase 3 clinical trial shall mean that the following activities have been carried out for the purpose of a given phase: the clinical lots have been released, GSK’s Corporate Safety Board has approved the trial, the principal investigator has signed the clinical study protocol and the ethical review board and the relevant authorities have approved the clinical trial protocol for such phase.

“Phase I clinical trial” means that PRODUCT or COMBINATION is administered in a clinical trial in order to investigate safety and immunogenicity of PRODUCT and/or COMBINATION in humans;

“Phase II clinical trial” means that PRODUCT or COMBINATION is administered in


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a second clinical trial which after successful completion of phase I clinical trial, which is designated to evaluate efficacy and immunogenicity of PRODUCT of the exact same composition as the one tested successfully in the Phase I trial;

“Phase Ill clinical trial” means that PRODUCT and/or COMBINATION is administered to subjects in a pivotal clinical trial for which regulatory authorization has been obtained as a result of the ‘Filing for Phase III’ or the date that GSK has been convinced to its satisfaction that the FDA has determined that data produced during Phase II clinical trials is sufficient to support filing of a PLA without any data from Phase III clinical trials.

“Europe” means that the regulatory agency is the EMEA/CPMP (centralized procedure) or, in the event that the decentralized procedure is followed, that the procedure encompasses more than two major countries chosen from UK, Spain, France, Germany and Italy.

3.04

No milestone payment for a given milestone shall be due for any subsequent PRODUCT and/or COMBINATION which targets a given LICENSED CANCER if the same milestone set forth in Section 3.02 for a PRODUCT and/or COMBINATION which targets such LICENSED CANCER has been previously paid by GSK pursuant to Section 3.02.

3.05

[*****] percent of the marketing approval milestone payments set forth in Section 3.02 point 6 for PRODUCTS and/or COMBINATIONS for a given LICENSED CANCER are creditable against current and future royalties owed pursuant to Sections 3.06 and 3.09 on the account of sales of PRODUCTS and/or COMBINATIONS registered for such LICENSED CANCER and the license maintenance fee set forth in Section 3.02 point 7 for a given LICENSED CANCER shall be fully creditable against current and future royalties owed pursuant to Sections 3.06 and 3.09 on the account of sales of PRODUCTS and/or COMBINATIONS registered for such LICENSED CANCER, provided that such credits shall not cause the royalties otherwise payable in any one calendar quarter to be reduced by more than [*****] percent ([**]%). However, any uncredited balance of creditable milestone payments will be carried forward to any following calendar quarter.


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3.06.I

As consideration for the license under PATENTS granted to GSK under this Agreement and subject to Sections 3.07 and 4, GSK shall pay to COLEY the following royalties (“Patent Royalty”) on NET SALES VALUE of PRODUCTS and/or COMBINATIONS registered for a LICENSED CANCER where ADJUVANT (which is part of PRODUCT or COMBINATION), PRODUCT or COMBINATION is covered by:

A.1.

a “BROAD FIELD OF USE” claim in a PATENT issued in the country where the PRODUCT and/or COMBINATION is sold:

On the portion of ANNUAL NET SALES VALUE:

up to [********************] US dollars (<US$ [***********]):

[***] % for the FIRST and SECOND LICENSED ANTIGEN, and

[***] % for the THIRD LICENSED ANTIGEN;

On the portion of ANNUAL NET SALES VALUE:

between [********************] US dollars ( > US$ [***********]) and

[***********] US dollars (<US$ [*************]):

[*] % for the FIRST and SECOND LICENSED ANTIGEN,

and

[*] % for the THIRD LICENSED ANTIGEN; and

On the portion of ANNUAL NET SALES VALUE:

above [***********] US dollars: ( > US$ [*************]):

[***] % for the FIRST and SECOND LICENSED ANTIGEN, and

[****] % for the THIRD LICENSED ANTIGEN.

A.2

a “COMPOSITION OF MATTER” claim in a PATENT issued in the country where the PRODUCT and/or COMBINATION is sold and not a BROAD FIELD OF USE claim in such country:

On the portion of ANNUAL NET SALES VALUE:

up to [********************] US dollars: (< US$ [***********]):

[*] % for the FIRST and SECOND LICENSED ANTIGEN, and

[*] % for the THIRD LICENSED ANTIGEN;


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