STRATEGIC ALLIANCE AGREEMENT

Exhibit 10.2

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

EXECUTION VERSION

STRATEGIC ALLIANCE AGREEMENT

BY AND BETWEEN

INFINITY PHARMACEUTICALS, INC.

AND

MUNDIPHARMA INTERNATIONAL CORPORATION LIMITED

STRATEGIC ALLIANCE AGREEMENT

This Strategic Alliance Agreement (the “ Agreement ”) is entered into as of the 19 ^th day of November 2008 (the “ Effective Date ”) by and between Infinity Pharmaceuticals, Inc., a Delaware corporation having its principal office at 780 Memorial Drive, Cambridge, Massachusetts 02139 (“ Infinity ”), and Mundipharma International Corporation Limited, a Bermuda corporation having its principal office at Mundipharma House, 14 Par-la-Ville Road, P.O. Box HM 2332, Hamilton HM JX, Bermuda (“ MICL ”).

INTRODUCTION

1. Infinity and MICL are each engaged in the business of discovering, developing and commercializing pharmaceutical products.

2. Infinity and MICL are interested in forming an alliance whose goal is to (a) enable Infinity to build a portfolio of oncology products and a commercial oncology organization in the United States and (b) provide MICL with a pipeline of products to commercialize outside of the United States.

NOW, THEREFORE, in consideration of the respective representations, warranties, covenants and agreements contained herein, and for other valuable consideration, the receipt and adequacy of which are hereby acknowledged, Infinity and MICL agree as follows:

ARTICLE I

DEFINITIONS

When used in this Agreement, each of the following terms shall have the meanings set forth in this Article I:

Section 1.1 “ Affiliate ”. Affiliate shall mean any person, firm, trust, partnership, corporation, company or other entity or combination thereof, which directly or indirectly (i) controls a Person, (ii) is controlled by a Person, or (iii) is under common control with a Person. The terms “control” and “controlled” mean (x) ownership of fifty percent (50%) or more, including ownership by trusts with substantially the same beneficial interests, of the voting and equity rights of such person, firm, trust, partnership, corporation, company or other entity or combination thereof or (y) the power to direct the management of such person, firm, trust, partnership, corporation, company or other entity or combination thereof. “ Affiliate ” shall not include, in the case of MICL, The Purdue Frederick Company Inc., a New York corporation, with respect to the performance of Development activities under this Agreement or in support of the Regulatory Approvals.

Section 1.2 “ Alliance Product ”. Alliance Product shall mean (a) products and product candidates that Interact with the Hedgehog Pathway, (b) products and product candidates that Interact with FAAH, and (c) products and product candidates that arise out of the Discovery Projects and either (x) have been separately identified in the Research Plan submitted by Infinity to MICL as of October 1 immediately prior to the end of the Funded Discovery Period, or (y) have achieved Development Candidate status on or before the end of the Funded Discovery

Period; provided , however , that, Alliance Products will not include (i) products and product candidates that Interact with Hsp90 or Bcl-2/Bcl-xL, (ii) any products and product candidates that Infinity in-licenses or otherwise acquires rights to from a Third Party after the Effective Date, and (iii) any Opt-Out Products, Assumed Products or Related Products associated therewith.

Section 1.3 “ ANDA ”. ANDA shall mean any of the following: (a) an Abbreviated New Drug Application filed with the FDA or any successor applications or procedures; (b) any counterpart of a U.S. Abbreviated New Drug Application or any successor applications or procedures that may be filed with the EMEA, MHLW or other Regulatory Authority outside of the United States, and (c) all supplements and amendments that may be filed with respect to the foregoing.

Section 1.4 “ Assumed In-Licensed Product ”. Assumed In-Licensed Product shall mean each In-Licensed Product for which (a) a Party elects to terminate its Program Rights following the Transition Date for such In-Licensed Product, and (b) the other Party exercises its right to assume the Terminating Party’s Program Rights with respect to such In-Licensed Product pursuant to Section 2.7.

Section 1.5 “ Assumed Product ”. Assumed Product shall mean each Alliance Product for which (a) a Party elects to terminate its Program Rights following the Transition Date for such Alliance Product, and (b) the other Party exercises its right to assume the Terminating Party’s Program Rights with respect to such Alliance Product pursuant to Section 2.7.

Section 1.6 “ Bcl-2/Bcl-xL ”. Bcl-2/Bcl-xL shall mean Bcl-2 or Bcl-xL.

Section 1.7 “ Business Day ”. Business Day shall mean any day, other than a Saturday or a Sunday, on which the banks in New York, New York, USA are open for business.

Section 1.8 “ Change in Control ”. Change in Control shall mean (a) the occurrence of an event or series of events by which any person or group of persons (within the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, as amended), exclusive of the Lenders and their Affiliates, shall have acquired beneficial ownership (within the meaning of Rule 13d-3 promulgated by the United States Securities and Exchange Commission (the “ SEC ”) under said Securities Exchange Act of 1934, as amended), directly or indirectly, of more than fifty percent (50%) of the outstanding shares of capital stock of Infinity; (b) occupation of more than fifty percent (50%) of the seats (other than vacant seats) on the board of directors of Infinity by persons who were not at least one of the following: (i) directors of Infinity on the Effective Date, (ii) nominated by the board of directors of Infinity or (iii) appointed by directors referred to in the preceding clauses (i) and (ii); or (c) if during the Funded Discovery Period either (i) Julian Adams, Ph.D. is no longer a full-time executive of Infinity, or (ii) both Steven H. Holtzman and Adelene Q. Perkins are no longer full-time executives of Infinity.

Section 1.9 “ Commercialization” or “Commercialize ”. Commercialization or Commercialize shall mean any activities directed to obtaining pricing and/or reimbursement approvals, marketing, promoting, distributing, importing, offering to sell, and/or selling a product (including establishing the price for such product), after Regulatory Approval for such product has been obtained, including Country-Specific Studies.

 

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Section 1.10 “ Commercially Reasonable Efforts ”. Commercially Reasonable Efforts shall mean the efforts that a prudent Person desirous of achieving a result would use in similar circumstances to achieve that result as expeditiously as possible; provided , however , that a Person required to use “Commercially Reasonable Efforts” under this Agreement will not be thereby required to take actions that would result in a material adverse change in the benefits to such Person under this Agreement. Without limiting the generality of the foregoing, in determining Commercially Reasonable Efforts with respect to the Development and Commercialization of a product or compound, the Parties shall take into account the following (without giving undue weight to either the Infinity Territory or the MICL Territory): the market potential of such product or compound, safety and efficacy, product profile, competitiveness of the marketplace for the product, the proprietary position of the product, the regulatory structure involved, the availability and level of reimbursement for such treatment by third party payors or health insurance plans, the potential total profitability of the applicable product marketed or to be marketed and other relevant factors affecting the cost, risk and timing of Development and the total potential reward to be obtained if a product is Commercialized.

Section 1.11 “ Control ” or “ Controlled ”. Control or Controlled, with respect to any Know-How or Patent Right of a Party, shall mean the possession (whether by ownership, license (other than pursuant to a license granted under this Agreement) or otherwise) by such Party or its Affiliates of the ability to grant to the other Party access to and/or a license under such Know-How or Patent Right without violating the terms of any agreement with any Third Party existing as of the Effective Date or thereafter during the Term.

Section 1.12 “ Country-Specific Study ”. Country-Specific Study shall mean, with respect to a Product, a clinical trial conducted after the receipt of Regulatory Approval for such Product in an indication in any country, for the sole purpose of obtaining Regulatory Approval or pricing and/or reimbursement approval of such Product for such indication in a specific other country, which trial is required by the relevant Regulatory Authority.

Section 1.13 “ Cover”, “Covering” or “Covered ”. Cover, Covering or Covered, with respect to a product, shall mean that, but for a license granted to a Person under a Valid Claim included in the Patent Rights under which such license is granted, the Development, Manufacture, Commercialization and/or other use of such product by such Person as provided hereunder would infringe such Valid Claim.

Section 1.14 “ Develop ” or “ Development ”. Develop or Development shall mean non-clinical (including pre-clinical) and clinical drug development activities and related research, including: (i) chemical lead series generation, (ii) medicinal chemistry, (iii) assay development, (iv) pharmacology studies, (v) absorption, distribution, metabolism, elimination (ADME) studies, (vi) toxicology studies, (vii) statistical analysis and report writing, (viii) test method development and stability testing, (ix) process development, (x) formulation development, (xi) delivery system development, (xii) molecular pathology and biomarker development, (xiii) quality assurance and quality control development, (xiv) compliance related monitoring and activities (including biometry, data management, drug safety, integrated analysis, and health

 

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and economic research, and including the establishment and maintenance of any global safety database as described in Section 3.1(f)), (xv) manufacture of drug supply (in both active pharmaceutical ingredient and finished product form) for use in both pre-clinical activities and clinical trials, (xvi) clinical trials for the purpose of obtaining or maintaining Regulatory Approval (including post-marketing and market expansion studies but excluding Country-Specific Studies), (xvii) safety related studies and risk management programs, (xviii) support of investigator-initiated clinical trials, (xix) new product planning activities, and (xx) regulatory affairs activities related to all of the foregoing.

Section 1.15 “ Development Candidate ”. Development Candidate shall mean a product candidate for which GLP Toxicology Studies have been initiated.

Section 1.16 “ Discovery Project ”. Discovery Project shall mean a drug discovery research project conducted by Infinity, alone or in collaboration with a Service Provider or other academic collaborator, at any time during the period beginning on the Effective Date and ending on the last day of the Funded Discovery Period, the goal of which is to identify a Development Candidate. For purposes of clarity, Discovery Project includes any such drug discovery research project directed to a product candidate which is acquired by Infinity on or after the Effective Date and on or prior to the end of the Funded Discovery Period, which product candidate has not reached Development Candidate status at the time of such acquisition, and for which Commercialization rights outside of the United States are available for grant by Infinity to MICL, but shall not include any such project directed to a product candidate that Interacts with the Hedgehog Pathway, FAAH, Hsp90 or Bcl-2/Bcl-xL.

Section 1.17 “ EMEA ”. EMEA shall mean the European Medicines Agency, and any successor agency thereto.

Section 1.18 “ Europe ”. Europe shall mean the countries of the European Union and the European Free Trade Association, collectively, as they are constituted as of the Effective Date and as they may be expanded from time to time.

Section 1.19 “ Executive Officers ”. Executive Officers shall mean MICL’s General Manager (or the officer or employee of MICL then serving in a substantially equivalent capacity) and Infinity’s Chief Executive Officer (or the officer or employee of Infinity then serving in a substantially equivalent capacity).

Section 1.20 “ FAAH ”. FAAH shall mean Fatty Acid Amide Hydrolase (also known as FAAH-1) or FAAH-2.

Section 1.21 “ FAAH Product ”. FAAH Product shall mean a product or product candidate arising out of the FAAH Project.

Section 1.22 “ FAAH Project ”. FAAH Project shall mean a project directed to the research and Development of molecules that Interact with FAAH.

Section 1.23 “ FAAH U.S. Strategic Alliance Agreement ” or “ FUSA Agreement ”. FAAH U.S. Strategic Alliance Agreement or FUSA Agreement shall mean the Strategic Alliance Agreement between Infinity and Purdue dated as of the Effective Date.

 

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Section 1.24 “ FDA ”. FDA shall mean the United States Food and Drug Administration, or a successor agency thereto.

Section 1.25 “ FTE ”. FTE shall mean one or more qualified individuals (e.g., having the requisite education and/or skills in the appropriate scientific or technical discipline to fulfill Infinity’s obligations under this Agreement) at Infinity or its Affiliates who spend time and effort performing scientific, technical or scientific management work on a specific project or task pursuant to the Research Plan whose time and effort, in the aggregate, is equivalent to the time and effort of one (1) employee devoted exclusively to the project or task based on [**] person hours per year.

Section 1.26 “ FTE Cost ”. FTE Cost shall mean the amount obtained by multiplying (a) the number of FTEs by (b) [**] United States dollars (US$[**]), increased or decreased annually by the percentage increase or decrease in the Consumer Price Index – Urban Wage Earners and Clerical Workers, U.S. City Average, All Items, 1982-84 = 100, published by the United States Department of Labor, Bureau of Labor Statistics (or its successor equivalent index) in the United States (“ CPI ”) as of December 31 of the then most recently ended calendar year over the level of the CPI on December 31, 2008 ( i.e. , the first such increase or decrease would occur on January 1, 2010).

Section 1.27 “ Funded Discovery Period ”. Funded Discovery Period shall mean the period of time beginning on the Effective Date and ending on December 31, 2011, unless extended by MICL in accordance with Section 2.1(c).

Section 1.28 “ FUSA Agreement Territory ”. FUSA Agreement Territory shall mean, with respect to FAAH Products (unless and until a FAAH Product becomes an Opt-Out Product), the United States of America, its territories and possessions.

Section 1.29 “ GLP Toxicology Study ”. GLP Toxicology Study shall mean a toxicology study that is conducted in compliance with the then-current good laboratory practice standards promulgated or endorsed by the FDA, as defined in U.S. 21 C.F.R. Part 58 (or such other comparable regulatory standards in jurisdictions outside the U.S. to the extent applicable to the relevant toxicology study, as they may be updated from time to time) and is required to meet the requirements for filing an IND.

Section 1.30 “ Governmental Authority ”. Governmental Authority shall mean any multinational, federal, state, county, local, municipal or other entity, office, commission, bureau, agency, political subdivision, instrumentality, branch, department, authority, board, court, arbitral or other tribunal, official or officer, exercising executive, judicial, legislative, police, regulatory, administrative or taxing authority or functions of any nature pertaining to government.

Section 1.31 “ Hedgehog Pathway ”. Hedgehog Pathway shall mean all of the following members of the Hedgehog cell-signaling pathway: (i) all hedgehog ligands (Sonic, Indian, Desert) and transmembrane transport-like proteins, like Disp1 or Disp2, involved in the secretion of the HH ligand, (ii) Smoothened (Smo), including alternatively spliced forms and Smo with activating mutations, (iii) all Gli transcription factors (Gli 1, 2, 3), (iv) mutated or unmutated

 

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Patched (Ptch) receptor 1 and 2, (v) Cdo, Cdon and Boc (brother of Cdo), (vi) Suppressor of Fused (SuFu), (vii) Cdc2l1 kinase, (viii) Hedgehog interacting protein (HHIP), and (ix) ARL13B.

Section 1.32 “ Hedgehog Project ”. Hedgehog Project shall mean a project directed to the research and Development of molecules that Interact with the Hedgehog Pathway, including IPI-926.

Section 1.33 “ Hsp90 ”. Hsp90 shall mean Heat Shock Protein 90 (Hsp90) and/or co-chaperones of Heat Shock Protein 90 (e.g., Hip and Hop), but not client proteins of Heat Shock Protein 90 such as c-Kit and EGFR.

Section 1.34 “ IND ”. IND shall mean (a) (i) an Investigational New Drug Application, as defined in the U.S. Federal Food, Drug, and Cosmetic Act, as amended, and the regulations promulgated thereunder, that is required to be filed with the FDA before beginning clinical testing of a product in human subjects, or any successor application or procedure, and (ii) any counterpart of a U.S. Investigational New Drug Application that may be filed with the EMEA, MHLW or other Regulatory Authority outside of the United States, and (b) all supplements and amendments that may be filed with respect to the foregoing.

Section 1.35 “ Infinity Assumed In-Licensed Product ”. Infinity Assumed In-Licensed Product shall mean each Assumed In-Licensed Product for which MICL is the Terminating Party.

Section 1.36 “ Infinity Assumed Product ”. Infinity Assumed Product shall mean each Assumed Product for which MICL is the Terminating Party.

Section 1.37 “ Infinity Know-How ”. Infinity Know-How shall mean any Know-How Controlled by Infinity (including Infinity’s rights in Joint Know-How) that is useful to Develop and Commercialize Products.

Section 1.38 “ Infinity Patent Rights ”. Infinity Patent Rights shall mean Patent Rights Controlled by Infinity Covering Infinity Know-How (including Infinity’s rights in Joint Know-How).

Section 1.39 “ Infinity Territory ”. Infinity Territory shall mean (a) with respect to all Products other than FAAH Products, the United States of America and its territories and possessions, and (b) with respect to Infinity Assumed Products, Infinity Assumed In-Licensed Products, Opt-Out Products and Terminated In-Licensed Products, all countries of the world.

Section 1.40 “ In-Licensed Product ”. In-Licensed Product shall mean an In-Licensed Product Opportunity for which MICL exercises its right pursuant to Section 2.4 to include such product or product candidate in the Research Program.

Section 1.41 “ In-Licensed Product Opportunity ”. In-Licensed Product Opportunity shall mean any product or product candidate that has reached Development Candidate status which is acquired by Infinity on or after the Effective Date and on or prior to the end of the Funded Discovery Period and for which Commercialization rights in one or more jurisdictions

 

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outside the United States are available for grant by Infinity to MICL; provided , however , that In-Licensed Product Opportunities shall not include Assumed In-Licensed Products, Terminated In-Licensed Products or Related Products associated therewith; and provided further , that no product or product candidate that (a) is in-licensed or otherwise acquired by Infinity from a Third-Party that Interacts with the Hedgehog Pathway (except to the extent mutually agreed by the Parties with respect to the AZ Option Agreement), FAAH, Hsp90 or Bcl-2/Bcl-xL or (b) arises from a Discovery Project, shall be deemed an In-Licensed Product Opportunity. For the avoidance of doubt, if Infinity acquires a sales force or similar Commercialization infrastructure outside of the United States in connection with the acquisition of a product that has obtained Regulatory Approval, then Commercialization rights outside of the United States shall not be considered to be available for grant to MICL.

Section 1.42 “ Interact ”. Interact shall mean to interact directly with a specified Target. In the event a product or product candidate directly interacts with more than one Target, it shall be deemed to Interact with whichever such Target it interacts with most potently. Furthermore, in the case of Bcl-2/Bcl-xL, such product or product candidate shall be deemed to Interact with Bcl-2/Bcl-xL if it demonstrates less than one (1) micromolar activity against Bcl-2/Bcl-xL in a biochemical displacement assay.

Section 1.43 “ Joint Know-How ”. Joint Know-How shall mean any Know-How that is conceived, reduced to practice or otherwise created jointly by employees or consultants of Infinity or its Affiliates, on the one hand, and employees or consultants of MICL or its Affiliates, on the other hand.

Section 1.44 “ Key Executive ”. Key Executive shall mean each of Julian Adams, Ph.D., Steven H. Holtzman and Adelene Q. Perkins.

Section 1.45 “ Know-How ”. Know-How shall mean any tangible or intangible know-how, expertise, discoveries, inventions, information, data (including preclinical and clinical data generated with respect to the Products in the course of the Research Program) or materials, including ideas, concepts, formulas, methods, procedures, designs, technologies, compositions, plans, applications, preclinical and clinical data, technical data, samples, chemical compounds and biological materials and all derivatives, modifications and improvements thereof and Regulatory Approvals and filings therefor.

Section 1.46 “ Laws ”. Laws shall mean each provision of any then-current multinational, federal, national, state, county, local, municipal or foreign law, statute, ordinance, order, writ, code, rule or regulation, promulgated or issued by any Governmental Authority, as well as with respect to either Party any binding judgments, decrees, stipulations, injunctions, determinations, awards or agreements issued by or entered into by such Party with any Governmental Authority.

Section 1.47 “ Line of Credit Agreement ”. Line of Credit Agreement shall mean the Line of Credit Agreement dated as of the Effective Date by and among Purdue Pharma L.P., a Delaware limited partnership, and Purdue (together, the “ Lenders ”), and Infinity.

 

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Section 1.48 “ Manufacture ”. Manufacture shall mean all activities related to the manufacturing of any product, including test method development and stability testing, formulation, process development, manufacturing scale-up, manufacturing for use in non-clinical and clinical studies, manufacturing for commercial sale, packaging, release of product, quality assurance/quality control development, quality control testing (including in-process release and stability testing) and release of product or any component or ingredient thereof, and regulatory activities related to all of the foregoing.

Section 1.49 “ MHLW ”. MHLW shall mean the Japanese Ministry of Health, Labor and Welfare, or a successor agency thereto.

Section 1.50 “ MICL Assumed In-Licensed Product ”. MICL Assumed In-Licensed Product shall mean each Assumed In-Licensed Product for which Infinity is the Terminating Party.

Section 1.51 “ MICL Assumed Product ”. MICL Assumed Product shall mean each Assumed Product for which Infinity is the Terminating Party.

Section 1.52 “ MICL Know-How ”. MICL Know-How shall mean (a) any Know-How that: (i) is conceived, reduced to practice or otherwise created by employees or consultants of MICL or its Affiliates based on and arising from exposure to Infinity Know-How, (ii) is an analog or a new use of a product or product candidate developed under the Research Program and (iii) is created during the portion of the Term during which MICL has Program Rights with respect to such product or product candidate, and (b) MICL’s rights in Joint Know-How.

Section 1.53 “ MICL Patent Rights ”. MICL Patent Rights shall mean Patent Rights Controlled by MICL Covering MICL Know-How (including MICL’s rights in Joint Know-How).

Section 1.54 “ MICL Territory ”. MICL Territory shall mean (a) with respect to Products (other than FAAH Products), all countries of the world other than the Infinity Territory, (b) with respect to MICL Assumed Products and MICL Assumed In-Licensed Products, all countries of the world, and (c) with respect to FAAH Products, unless and until such FAAH Product becomes an Opt-Out Product, all countries of the world other than the United States of America and its territories and possessions.

Section 1.55 “ MMCO ”. MMCO shall mean Mundipharma Medical Company or any successor thereof, while Mundipharma Medical Company or such successor remains an Affiliate of MICL.

Section 1.56 “ NDA ”. NDA shall mean an application submitted to a Regulatory Authority for marketing approval of a product (other than an ANDA), including (a) a New Drug Application, Product License Application or Biologics License Application filed with the FDA or any successor applications or procedures, (b) any counterpart of a U.S. New Drug Application, Product License Application or Biologics License Application or any successor applications or procedures that may be filed with the EMEA, MHLW or other Regulatory Authority outside of the United States, and (c) all supplements and amendments that may be filed with respect to the foregoing.

 

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Section 1.57 “ Net Sales ”. Net Sales, with respect to a particular Royalty Bearing Product in a particular period, shall mean the gross amount invoiced by the Royalty Paying Party, its Affiliates and/or its Sublicensees on sales or other dispositions (excluding sales or dispositions for use in clinical trials or other scientific testing, in either case for which the Royalty Paying Party, its Affiliates and/or Sublicensees receive no revenue) of the Royalty Bearing Product to unrelated Third Parties during such period, less the following deductions (to the extent included in the gross amount invoiced or otherwise directly paid or incurred by the Royalty Paying Party, its Affiliates and/or its Sublicensees):

(a) trade, cash and quantity discounts actually allowed and taken directly with respect to such sales or other dispositions;

(b) tariffs, duties, excises, sales taxes or other taxes imposed upon and paid directly with respect to the delivery, sale or use of the Royalty Bearing Product and included and separately stated in the applicable invoice (excluding national, state or local taxes based on income);

(c) allowances for amounts repaid or credited by reason of rejections, defects, recalls or returns or because of reasonable and customary chargebacks, refunds, coupons, patient co-pay savings cards, rebates (including related administration fees), wholesaler fee for service, reasonable amounts of physician samples, reasonable amounts of free products given to indigent patients, retroactive price reductions or any other items substantially similar in character and substance to the foregoing, with equitable adjustments to be made from time to time for any differences between these allowances and actual amounts;

(d) amounts previously included in Net Sales of Royalty Bearing Products that are written-off by the Royalty Paying Party as uncollectible in accordance with the Royalty Paying Party’s standard practices for writing off uncollectible amounts consistently applied; and

(e) freight, insurance and other transportation charges incurred in shipping a Royalty Bearing Product to Third Parties, included and separately stated in the applicable invoice.

There shall be no double-counting in determining the foregoing deductions.

Such amounts shall be determined from the books and records of the Royalty Paying Party, its Affiliates and/or its Sublicensees, maintained in accordance with applicable accounting principles (such as U.S. generally accepted accounting principles (“ U.S. GAAP ”) and/or International Financial Reporting Standards), consistently applied.

Section 1.58 “ Opt-Out Product ”. Opt-Out Product shall mean each Alliance Product for which MICL elects to terminate its Program Rights (a) for such Alliance Product arising out of the Hedgehog Project or FAAH Project pursuant to Section 2.5 or 2.8, or (b) prior to the Transition Date for such Alliance Product pursuant to Section 2.6.

Section 1.59 “ Party ”. Party shall mean Infinity or MICL; “ Parties ” shall mean Infinity and MICL.

 

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Section 1.60 “ Patent Rights ”. Patent Rights shall mean United States and non-U.S. patents, patent applications and/or provisional patent applications, utility models and utility model applications, design patents or registered industrial designs and design applications or applications for registration of industrial designs, and all substitutions, divisionals, continuations, continuation-in-part applications, continued prosecution applications, reissues, reexaminations and extensions thereof.

Section 1.61 “ Person ”. Person shall mean any individual, corporation, partnership, joint venture, limited liability company, trust, business association, organization, Governmental Authority, a division or operating group of any of the foregoing or other entity or organization, including any successors or assigns (by merger or otherwise) of any such entity.

Section 1.62 “ Phase I Study ”. Phase I Study shall mean a study of a product in human patients or normal volunteers the purposes of which are to (i) determine the metabolism, pharmacokinetic and pharmacologic actions of said product in humans and (ii) the preliminary determination of safety and tolerability of a dosing regime, and for which there are no primary endpoints (as recognized by the FDA or other Regulatory Authorities) in the protocol relating to efficacy, as described in U.S. 21 C.F.R. § 312.21(a), or a similar clinical study in a country other than the United States.

Section 1.63 “ Phase II Study ”. Phase II Study shall mean a controlled clinical study of a product to evaluate preliminary efficacy for particular indications in the target patient population and establish safety, appropriate dosage, short-term tolerability issues and pharmacological activity of said product in the target patient population, as described in U.S. 21 C.F.R. § 312.21(b), or a similar clinical study in a country other than the United States.

Section 1.64 “ Phase III Study ”. Phase III Study shall mean a human clinical trial that is prospectively designed to demonstrate statistically whether a product is safe and effective for use in humans in a manner sufficient to obtain Regulatory Approval to market such product in patients having the disease or condition being studied as described in U.S. 21 C.F.R. § 312.21(c), or a similar clinical study in a country other than the United States.

Section 1.65 “ Prior Confidentiality Agreement ”. Prior Confidentiality Agreement shall mean the Mutual Confidential Disclosure Agreement, dated August 13, 2008, between Infinity and an Affiliate of MICL.

Section 1.66 “ Product ”. Product shall mean an Alliance Product or an In-Licensed Product. “ Products ” shall mean Alliance Products and In-Licensed Products.

Section 1.67 “ Program Right ”. Program Right shall mean the right to Commercialize and, in the case of Infinity, Develop and Manufacture, Products pursuant to this Agreement.

Section 1.68 “ Protocol Synopsis ”. Protocol Synopsis shall mean, with respect to a proposed or planned clinical trial, a document containing the following information with respect to such clinical trial:

(a) Trial objective;

 

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(b) Trial design, including primary and any secondary endpoints;

(c) Patient population, including material inclusion and exclusion criteria;

(d) Dosing schedule;

(e) Summary statistical analysis plan;

(f) List of potential clinical investigators; and

(g) Proposed timeline and cost.

Section 1.69 “ Purdue ”. Purdue shall mean Purdue Pharmaceutical Products L.P., a Delaware limited partnership.

Section 1.70 “ Regulatory Approval ”. Regulatory Approval shall mean, with respect to a product, the approval of the applicable Regulatory Authority necessary for the marketing and sale of such product for a particular indication in a country, excluding separate pricing and/or reimbursement approvals that may be required and ANDAs. Regulatory Approval shall also include any “orphan drug” or similar designation.

Section 1.71 “ Regulatory Authority ”. Regulatory Authority shall mean a federal, national, multinational, state, provincial or local regulatory agency, department, bureau or other governmental entity with authority over the testing, manufacture, use, storage, import, promotion, marketing or sale of a pharmaceutical product in a country or territory, including the FDA, EMEA and MHLW.

Section 1.72 “ Regulatory Exclusivity ”. Regulatory Exclusivity shall mean the ability to exclude Third Parties from Manufacturing or Commercializing a product that could compete with a Royalty Bearing Product in a country, either through data exclusivity rights, orphan drug designation, or such other rights conferred by a Regulatory Authority in such country other than through Patent Rights.

Section 1.73 “ Related Product ”. Related Product shall mean, with respect to a Product, any product or product candidates (including preclinical product candidates) that are directed to the same Target as such Product.

Section 1.74 “ Relationship Manager ”. Relationship Manager shall mean the individual appointed by each Party in Section 2.3(b) to whom all of the non-appointing Party’s communications to the appointing Party regarding the conduct of the Research Program may be addressed.

Section 1.75 “ Research and Development Expenses ”. Research and Development Expenses shall mean the internal and external costs incurred by Infinity and/or its Affiliates in the conduct of the Research Program; such costs shall include: (a) the FTE Costs of Infinity and its Affiliates, (b) all costs accrued by Infinity or its Affiliates in connection with work performed

 

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by Third Parties (except to the extent that such costs have been included in FTE Costs), (c) license fees, milestone payments and other amounts due to Third Parties related to the Research Program, allocated pro rata among Products and Discovery Projects, on the one hand, and products and product candidates outside the Research Program, on the other hand, and (d) costs related to the Infinity Patent Rights and Joint Patent Rights licensed to MICL hereunder.

Section 1.76 “ Research and Development Funding ”. Research and Development Funding shall mean (a) the funding to be provided by MICL to Infinity in accordance with Section 5.1 and (b) fifty percent (50%) of any clinical study costs and expenses borne by MICL pursuant to, and subject to the conditions of, Section 2.2(d).

Section 1.77 “ Research Plan ”. Research Plan shall mean a rolling three (3) year plan and associated budget for activities to be conducted by Infinity under the Research Program and projected Research and Development Expenses.

Section 1.78 “ Research Program ”. Research Program shall mean a program to Develop product candidates under Discovery Projects and to Develop Products during the Research Program Term.

Section 1.79 “ Research Program Term ”. Research Program Term shall mean the period beginning on the Effective Date and ending on the last day of the Funded Discovery Period with respect to Discovery Projects, and continuing thereafter so long as Products are in active Development.

Section 1.80 “ Royalty Bearing Product ”. Royalty Bearing Product shall mean Alliance Products, Opt-Out Products and Assumed Products, as applicable.

Section 1.81 “ Royalty Paying Party ”. Royalty Paying Party shall mean the Party required to pay royalties to the other Party with respect to a Royalty Bearing Product pursuant to Sections 2.7(b)(ii), 5.2 or 5.3.

Section 1.82 “ Royalty Receiving Party ”. Royalty Receiving Party shall mean the Party that is entitled to receive royalties from the other Party with respect to a Royalty Bearing Product pursuant to Sections 2.7(b)(ii), 5.2 or 5.3.

Section 1.83 “ Royalty Term ”. Royalty Term, with respect to each Royalty Bearing Product in a particular country, shall mean the period of time commencing on the first commercial sale of such Royalty Bearing Product in such country and ending on the last to occur of (a) the date on which all Infinity Patent Rights and MICL Patent Rights containing a Valid Claim Covering the Manufacture, Commercialization or other use of such Royalty Bearing Product in the country of sale have expired, (b) the date on which all Infinity Patent Rights and MICL Patent Rights containing a Valid Claim Covering the Manufacture in the country of actual Manufacture of such Royalty Bearing Product have expired, and (c) the expiration of any Regulatory Exclusivity with respect to such Royalty Bearing Product in such country.

Section 1.84 “ Securities Purchase Agreement ”. Securities Purchase Agreement shall mean the Securities Purchase Agreement entered into as of the Effective Date by and between Infinity and each of the purchasers named therein.

 

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Section 1.85 “ Service Providers ”. Service Providers shall mean (a) with respect to either Party, contract sales organizations, contract employees, consultants and similar Persons who conduct activities on behalf of such Party, and (b) with respect to Infinity, the Persons in clause (a), plus academic or non-profit research institutions, hospitals, contract research organizations, contract manufacturing organizations and similar Persons who conduct activities on behalf of Infinity.

Section 1.86 “ Sublicensee ”. Sublicensee shall mean, with respect to a Party, a Third Party to whom such Party grants a license or sublicense under the Infinity Know-How, Infinity Patent Rights, MICL Know-How or MICL Patent Rights in accordance with the terms of this Agreement.

Section 1.87 “ Target ”. Target shall mean a protein or its corresponding DNA or RNA sequence.

Section 1.88 “ Terminated In-Licensed Product ”. Terminated In-Licensed Product shall mean each In-Licensed Product for which MICL elects to terminate its Program Rights prior to the Transition Date for such In-Licensed Product.

Section 1.89 “ Terminating Party ”. Terminating Party shall mean a Party which exercises its rights to terminate its Program Rights for any Product pursuant to Section 2.7.

Section 1.90 “ Third Party ”. Third Party shall mean any Person other than Infinity or MICL and their respective Affiliates.

Section 1.91 “ Transition Date ”. Transition Date shall mean, for each Product, the later of: (a) December 31, 2013 and (b) the date on which the first patient is dosed in the first Phase III Study of such Product.

Section 1.92 “ Valid Claim ”. Valid Claim shall mean a claim of any issued, unexpired patent that has not been revoked or held unenforceable or invalid by a decision of a court or governmental agency of competent jurisdiction from which no appeal can be taken, or with respect to which an appeal is not taken within the time allowed for appeal, and that has not been disclaimed or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise.

Section 1.93 Additional Definitions . Each of the following definitions is set forth in the section of this Agreement indicated below:

 

 

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ARTICLE II

RESEARCH PROGRAM

Section 2.1 Research Plan .

(a) Generally . The initial Research Plan is attached hereto as Schedule A . The Research Plan shall be updated by Infinity on at least an annual basis no later than October 1 ^st of each year preceding the year for which the update is being made. With respect to the FAAH Project, the Research Plan under this Agreement shall be the same as the Research Plan under the FUSA Agreement and shall be provided to MICL and Purdue concurrently.

(b) Research Plan Budget . The Research Plan shall include a budget for Research and Development Expenses for each of the first three (3) calendar years of the

 

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Research Plan; provided , however , that the first calendar year in the first Research Plan shall be deemed to start on the Effective Date and continue through December 31, 2009. As of the Effective Date, the budgets for calendar years 2009, 2010 and 2011 shall be Forty-Five Million Five Hundred Thousand United States Dollars (US$45,500,000), Sixty-Five Million United States Dollars (US$65,000,000) minus forty percent (40%) of the amount set forth in the overall budget for the FAAH Product in the Research Plan submitted to MICL pursuant to Section 2.1(a) on or before October 1, 2009, and Eighty Five Million United States Dollars (US$85,000,000) minus forty percent (40%) of the amount set forth in the overall budget for the FAAH Product in the Research Plan submitted to MICL pursuant to Section 2.1(a) on or before October 1, 2010. The Research Plan shall be updated annually as set forth in Section 2.1(a); provided , that , without the prior written consent of MICL and subject to the last two (2) sentences of this Section 2.1(b), the budget set forth for each calendar year of each Research Plan shall be fixed. Unless approved in writing by MICL, Infinity shall not incur or enter into contracts to incur Research and Development Expenses that exceed the amount of the budget set forth in the Research Plan for such calendar year, except to the extent that Infinity funds any such additional amount itself or such amount is funded by a party other than Infinity pursuant to the FUSA Agreement. Notwithstanding the foregoing, Infinity may reallocate Research and Development Expenses between and among Discovery Projects and Products in its sole discretion; provided , that the aggregate amount of Research and Development Expenses in any calendar year shall not exceed the budget amount set forth in the Research Plan for such year, except to the extent that Infinity funds any such additional amount itself or such amount is funded by a party other than Infinity pursuant to the FUSA Agreement, and provided further that Infinity shall not be permitted to reallocate Research and Development Expenses between, among or to any Opt-Out Product, Assumed Product, Assumed In-Licensed Product, Terminated In-Licensed Product or Related Product associated therewith (except that MICL shall pay, and Infinity may use, Research and Development Funding with respect to any Opt-Out Product, Assumed Product, Assumed In-Licensed Product or Terminated In-Licensed Product as expressly provided in Sections 2.5(c), 2.6(c) and 2.7(b)(i), as applicable); provided , however , that Infinity may decrease the funding allocated to such Opt-Out Product, Assumed Product, Assumed In-Licensed Product, Terminated In-Licensed Product or Related Product associated therewith.

(c) Extension of Funded Discovery Period . In conjunction with its review of the updated Research Plan submitted to MICL on or before each of October 1, 2010 and October 1, 2011 during the Research Program Term, MICL may, by providing written notice thereof to Infinity on or before November 30 of such year, elect to extend the Funded Discovery Period for an additional one-year period.

(i) If MICL elects to so extend the Funded Discovery Period, the Funded Discovery Period shall be so extended (i.e., through December 31, 2012, if extended on or before November 30, 2010, or through December 31, 2013, if extended on or before November 30, 2011) and such updated Research Plan shall apply.

(ii) If MICL does not elect to so extend the Funded Discovery Period on or before November 30, 2010, the Funded Discovery Period shall end on December 31, 2011.

 

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(iii) If MICL had elected to extend the Funded Discovery Period on or before November 30, 2010 and does not elect to extend the Funded Discovery Period on or before November 30, 2011, the Funded Discovery Period shall end on December 31, 2012.

(d) Termination of Research . Prior to terminating any Discovery Project or the Development of a Product under the Research Program, Infinity shall notify MICL of its intent to do so. At MICL’s request, the Parties shall promptly meet to discuss the termination of such Discovery Project or Development of such Product and Infinity shall consider in good faith any proposal submitted by MICL to assume the conduct of such Discovery Project or Development of such Product in all or part of the MICL Territory.

Section 2.2 Conduct of Research Program .

(a) Infinity shall be responsible for the initiation, conduct, expansion and termination of all Discovery Projects and the worldwide Development of Products, except to the extent that MICL exercises its right to assume responsibility for the Development of FAAH Products in the MICL Territory pursuant to Section 2.8(a), at which point MICL shall be responsible for the Development, Manufacture and Commercialization of FAAH Products in the MICL Territory. Infinity shall use Commercially Reasonable Efforts to undertake the Research Program in accordance with the Research Plan.

(b) Upon MICL’s written request, Infinity will discuss with MICL (i) the potential to collaborate on the Development of Products in hematological malignancies or other cancer types for which MICL has established capabilities outside of the United States, and (ii) any clinical Development initiatives suggested by MICL.

(c) Prior to the commencement of each Phase III Study of an Alliance Product, Infinity shall provide MICL a Protocol Synopsis for such trial. MICL shall have ten (10) Business Days to provide comments or suggestions on such Protocol Synopsis, which Infinity shall consider in good faith.

(d) Except with respect to the FAAH Product while it is a Product: Following receipt of the first Regulatory Approval of an Alliance Product in the MICL Territory and in connection with its annual review of the Research Plan, MICL may provide Infinity with a written proposal for the performance of clinical studies of such Alliance Product to be performed beyond those outlined in such Research Plan in support of achieving Regulatory Approval in the MICL Territory for an additional indication for such Alliance Product. In connection with each such proposed study, MICL shall provide Infinity a Protocol Synopsis. Infinity shall review and consider such proposal in good faith. In the event Infinity approves such proposal, (i) the Parties shall meet to discuss which Party is best suited to conduct such clinical study, and (ii) notwithstanding anything to the contrary in Section 5.1(a), MICL shall bear all the costs and expenses of such clinical study, regardless of which Party is responsible for the conduct of such clinical study. Upon receipt of Regulatory Approval of such Alliance Product in the MICL Territory in the indication being studied, fifty percent (50%) of such costs and expenses of such clinical study borne by MICL shall be considered Research and Development Funding.

 

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Section 2.3 Quarterly Reports; Communications .

(a) Quarterly Reports . Infinity shall provide MICL with quarterly written reports, within thirty (30) days after the end of each calendar quarter during the Research Program Term, summarizing in reasonable detail (i) Infinity’s and its Affiliates’ activities and progress related to the Research Program during such three (3) month period, including reasonably detailed information concerning the conduct of non-clinical and clinical activities, and the status of applications for Regulatory Approvals, and (ii) on a Discovery Project-by-Discovery Project and Product-by-Product basis, the Research and Development Expenses actually incurred by Infinity during such three (3) month period, including reasonably detailed information concerning FTEs utilized during such period and payments to Service Providers. MICL shall have the opportunity to seek reasonable further explanation or clarification of matters covered in such reports and to provide observations and suggestions to Infinity regarding the subject matter thereof and Infinity shall provide such explanation or clarification and shall consider such observations and suggestions in good faith. Furthermore, if after receiving such a report MICL wishes to meet with Infinity to discuss such report, Infinity shall meet with MICL at Infinity’s offices as soon as practicable but no later than thirty (30) days after such meeting is requested by MICL. In selecting Service Providers to conduct Development activities hereunder, Infinity shall (A) utilize a competitive bidding process consistent with Infinity’s corporate code of conduct, as amended from time to time by Infinity, taking into account factors such as cost, capabilities, quality and efficiency, and (B) negotiate with each potential Service Provider selected through such competitive bidding process, on an arm’s length basis, the terms and conditions pursuant to which such potential Service Provider will provide services to Infinity with respect to the conduct of Development activities under this Agreement.

(b) Relationship Managers . MICL and Infinity shall each designate an initial Relationship Manager who shall be responsible for the interactions between the Parties related to this Agreement. Infinity’s initial Relationship Manager with respect to this Agreement will be Vito Palombella. MICL’s initial Relationship Manager with respect to this Agreement will be Evan Vosburgh. Either Party may change its Relationship Manager upon written notice to the other Party at any time. The Relationship Managers shall meet periodically to discuss the progress of the Development and/or Commercialization of Products under this Agreement.

Section 2.4 In-Licensed Products . If Infinity in-licenses or otherwise acquires from a Third Party an In-Licensed Product Opportunity, then Infinity shall deliver to MICL (a) a data package describing such In-Licensed Product Opportunity, (b) a three (3) year development plan and budget for the Development of such In-Licensed Product Opportunity, and (c) a copy of the applicable license or acquisition agreement. MICL shall have the option, exercisable upon written notice to Infinity within sixty (60) days following Infinity’s delivery of all of the foregoing information to MICL, to include such In-Licensed Product Opportunity in the Research Program. If MICL exercises its rights within such sixty (60) day period, then:

(a) within thirty (30) days after the date MICL exercises its option to include such product or product candidate in the Research Program, MICL shall pay Infinity sixty percent (60%) of the up-front license fee or other acquisition cost, including the value of any equity securities of Infinity or any of its Affiliates issued in connection therewith, based on the principle that, with respect to such a program, the European Commercialization rights constitute

 

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forty percent (40%) of such cost and the rest of world (i.e., outside of the United States and Europe) (“ ROW ”) Commercialization rights constitute twenty percent (20%) of such cost; provided , that , if such In-Licensed Product Opportunity is for Commercialization rights in a subset of either Europe and/or the ROW, MICL shall pay Infinity a percentage of the up-front license fee equal to (i) with respect to Europe, the percentage of all pharmaceutical product sales in Europe attributable to such subset of countries (based on data provided by IMS International or, if such data is not available, such other reliable data source as reasonably agreed by the Parties) compared to all pharmaceutical product sales in all countries in Europe, multiplied by forty percent (40%), and (ii) with respect to the ROW, the percentage of all pharmaceutical product sales in the ROW attributable to such subset of countries (based on data provided by IMS International or, if such data is not available, such other reliable data source as reasonably agreed by the Parties), compared to all pharmaceutical product sales in all countries in the ROW, multiplied by twenty percent (20%) of such cost;

(b) such In-Licensed Product Opportunity shall thereafter be considered an In-Licensed Product; and

(c) the budget associated with the Research Plan shall be adjusted to reflect the inclusion of the In-Licensed Product in the Research Program.

If MICL does not exercise such option within such sixty (60) day period, such product or product candidate shall not be included in the Research Program and MICL shall have no rights with respect to such In-Licensed Product Opportunity and Related Products.

Section 2.5 Early Program Opt-Out Rights . On or before June 1, 2009, Infinity shall provide MICL a summary report of relevant data generated under the Hedgehog Project and FAAH Project during the period beginning on the Effective Date and ending on the date of such report, together with a good faith estimate of Research and Development Expenses Infinity expects to incur with respect to the Hedgehog Project and FAAH Project in the fourteen (14) month period following June 1, 2009 (which estimate shall be the same as the estimate provided by Infinity to Purdue with respect to the FAAH Project pursuant to the comparable provision of the FUSA Agreement). On or before July 31, 2009, MICL may, upon written notice to Infinity, elect to terminate its Program Rights for (A) all Alliance Products arising out of the Hedgehog Project and/or (B) all FAAH Products. If MICL elects to terminate its Program Rights for the Alliance Products arising out of the Hedgehog Project and/or the FAAH Project, then:

(a) MICL shall have no further Program Rights for such Alliance Products and any Related Products;

(b) Any such Alliance Products shall be considered Opt-Out Products effective as of July 31, 2009 (the “ Early Program Opt-Out Date ”);

(c) MICL shall fund one hundred percent (100%) of all Research and Development Expenses incurred by Infinity for each such Opt-Out Product (other than Opt-Out Products arising out of the FAAH Project, in which case MICL shall fund sixty percent (60%) of such Research and Development Expenses) through July 31, 2010, in material accordance with the fourteen (14) month estimate described above in this Section 2.5;

 

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(d) Infinity shall pay to MICL a royalty on Net Sales of each such Opt-Out Product at the rates set forth in Sections 5.3(a) and 5.3(c), as applicable; provided , that Infinity may, in its sole discretion, discontinue such Development and/or Commercialization of such Opt-Out Product;

(e) After the Early Program Opt-Out Date, Infinity shall have no obligation to provide a quarterly update on the Development of the relevant Opt-Out Product; and

(f) Except as permitted under the FUSA Agreement, MICL shall not, directly or indirectly, by itself or jointly with or through any of its Affiliates or any Third Parties, engage in the Development, Manufacture or Commercialization of any product or product candidate that Interacts with the same Target as such Opt-Out Product for two (2) years following the Early Program Opt-Out Date.

Section 2.6 Annual Product Opt-Out Rights . On or before October 1 of each year during the Research Program Term, Infinity shall provide MICL an updated Research Plan as provided in Section 2.1(a), together with a summary report of relevant data generated under the Research Program since the last such report for (a) each Product that has not reached the Transition Date as of the date of such report and (b) each Discovery Project. On or before November 30 of such year, MICL may elect to terminate its Program Rights for any Product or Discovery Project described in the report. If MICL elects to terminate its Program Rights for any such Product or for any Discovery Project, then:

(a) MICL shall have no further Program Rights for (i) such Product and any Related Product, and/or (ii) for any products or product candidates arising out of such Discovery Project and any Related Products;

(b) Any such Alliance Product shall be considered an Opt-Out Product, and any such In-Licensed Product shall be considered a Terminated In-Licensed Product, effective as of December 31 of such year (the applicable “ Annual Product Opt-Out Date ”);

(c) MICL shall fund one hundred percent (100%) of all Research and Development Expenses budgeted for such Product or Discovery Project (other than Opt-Out Products arising out of the FAAH Project, in which case MICL shall fund sixty percent (60%) of such Research and Development Expenses) during the calendar year following the applicable Annual Product Opt-Out Date in accordance with the relevant Research Plan presented by Infinity to MICL pursuant to Section 2.1(a) for such calendar year;

(d) Infinity shall pay to MICL a royalty on Net Sales of such Opt-Out Product at the rates set forth in Sections 5.3(a) and 5.3(c), as applicable; provided that , for purposes of clarity, no royalties shall be payable with respect to (i) product candidates included in a terminated Discovery Project that have not, as of the Annual Product Opt-Out Date, achieved Development Candidate status, and (ii) Terminated In-Licensed Products;

(e) After the applicable Annual Product Opt-Out Date, Infinity shall have no obligation to provide a quarterly update on the Development of the Opt-Out Product, Terminated In-Licensed Product or terminated Discovery Project; and

 

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(f) Except as permitted under the FUSA Agreement, MICL shall not, directly or indirectly, by itself or jointly with or through any of its Affiliates or any Third Parties, engage in the Development, Manufacture or Commercialization of any product or product candidate that Interacts with the same Target as (A) such Opt-Out Product or Terminated In-Licensed Product or (B) Developed under a Discovery Project, in each case for two (2) years following the applicable Annual Product Opt-Out Date.

Section 2.7 Opt-Out Rights After Transition Date . On or before October 1 of each calendar year during the Research Program Term, Infinity shall provide MICL an updated Research Plan as provided in Section 2.1(a), together with a summary report of relevant data generated under the Research Program during the then-current calendar year for Products that have passed the Transition Date as of the date of such report. On or before November 30 of each calendar year, either Party may, upon written notice to the other Party, elect to terminate its Program Rights for any such Product that has so passed the Transition Date. If a Party elects to terminate its Program Rights for any Product, then:

(a) The Terminating Party shall have no further Program Rights for such Product and any Related Product;

(b) The non-Terminating Party shall have the right, upon written notice sent to the Terminating Party within sixty (60) days after such other Party’s receipt of the Terminating Party’s notice of such termination, to assume the Terminating Party’s Program Rights for such Product, and if the non-Terminating Party exercises such right (in such context, the “ Assuming Party ”), then such Alliance Product or In-Licensed Product, as applicable, shall be considered an Assumed Product or Assumed In-Licensed Product, respectively, effective at the end of the then current calendar year (the applicable “ Post Transition Opt-Out Date ”) and the following terms shall apply:

(i) The Terminating Party shall be responsible for fifty percent (50%) of the budgeted Research and Development Expenses in the Research Plan for such Assumed Product or Assumed In-Licensed Product for the calendar year following the applicable Post Transition Opt-Out Date, and thereafter shall have no obligation with respect to Research and Development Expenses for such Assumed Product or Assumed In-Licensed Product;

(ii) The Assuming Party shall pay to the Terminating Party a five percent (5%) royalty on Net Sales of any such Assumed Product in each country of the world until the end of the Royalty Term for such Assumed Product in such country;

(iii) The Terminating Party shall not have a right to receive royalties from the Assuming Party on any Assumed In-Licensed Product;

(iv) Within a reasonable period of time after the applicable Post Transition Opt-Out Date, the Terminating Party (A) shall make available to the Assuming Party, in a mutually-agreed upon format, material information regarding the Know-How of the Terminating Party licensed to the Assuming Party with respect to the Assumed Product or Assumed In-Licensed Product pursuant to Section 4.1 or 4.4, and (B) for a period not to

 

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exceed one (1) year, shall make its relevant scientific and technical personnel reasonably available to the Assuming Party with the goal of effecting an orderly and expeditious transfer of such Assumed Product or Assumed In-Licensed Product to the Assuming Party; and

(v) The Terminating Party shall not, directly or indirectly, by itself or jointly with or through any of its Affiliates or any Third Parties, engage in the Development, Manufacture or Commercialization of any product or product candidate that Interacts with the same Target as such Assumed Product or Assumed In-Licensed Product, as applicable, for two (2) years following the applicable Post Transition Opt-Out Date.

(c) If the non-Terminating Party elects not to so assume the Terminating Party’s Program Rights, then the Parties shall work together in good faith to maximize the value of such Alliance Product and/or In-Licensed Product, through the out-license, sale or other disposition of such Alliance Product or In-Licensed Product, and any proceeds therefrom shall be shared equally by the Parties.

Section 2.8 FAAH Project .

(a) Upon completion of the first Phase I Study to be conducted on a FAAH Product and the analysis of the relevant data with respect thereto, Infinity shall provide MICL a package of all preclinical and clinical data related to such FAAH Product since the date of the last report submitted to MICL pursuant to Section 2.5 or 2.6 above. Within sixty (60) days after MICL’s receipt of such package, MICL shall provide Infinity written notice of whether it wishes to assume responsibility for the future Development, Manufacturing and Commercialization of such FAAH Product in the MICL Territory.

(b) Should MICL elect not to assume such responsibility:

(i) the FAAH Project will be excluded from the Research Program;

(ii) such FAAH Product will be considered an Opt-Out Product;

(iii) MICL shall have no further Program Rights and Infinity will have no obligations with respect to any product or product candidate that Interacts with FAAH, and any such product or product candidate shall be deleted from the definition of Alliance Product;

(iv) no further research funding provided by MICL pursuant to Section 5.1 shall be allocated to the FAAH Project;

(v) Infinity may Develop, Manufacture and Commercialize any FAAH Product or Related Product associated therewith without any further obligation to MICL other than the payment to MICL of a royalty on Net Sales of such FAAH Product in the MICL Territory once it becomes an Opt-Out Product at the rate set forth in Sections 5.3(a) and 5.3(c); and

 

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(vi) Except as permitted under the FUSA Agreement, MICL shall not, directly or indirectly, by itself or jointly with or through any of its Affiliates or any Third Parties, engage in the Development, Manufacture or Commercialization of any product or product candidate that Interacts with FAAH for two (2) years following the date of MICL’s notice that it elected not to assume responsibility for the FAAH Project.

(c) If MICL elects to assume such Development, Manufacturing and Commercialization responsibility with respect to such FAAH Product in the MICL Territory in accordance with Section 2.8(a), then, within a reasonable period of time after Infinity’s receipt of such notice, (i) Infinity shall make available to MICL or its designee, in a mutually-agreed upon format, material information (including Know-How) regarding the FAAH Product, (ii) Infinity shall make its relevant scientific and technical personnel reasonably available to MICL to answer any questions or provide instruction as reasonably requested by MICL concerning such information, (iii) Infinity shall transfer or assign any INDs related to the FAAH Project to MICL or its designee, (iv) MICL, itself or through its Affiliates, shall be solely responsible for pharmacovigilance with respect to the FAAH Product, and (v) notwithstanding the provisions of Section 3.2, MICL, itself or through its Affiliates, shall be solely responsible for Manufacturing the FAAH Product for the MICL Territory; provided, that, Infinity shall use Commercially Reasonable Efforts to ensure the continuity of supply of any FAAH Product to MICL for a twelve (12) month period at MICL’s expense. In the event MICL assumes responsibility for the Development, Manufacture and Commercialization of FAAH Products in the MICL Territory pursuant to Section 2.8, MICL shall use Commercially Reasonable Efforts to Develop, Manufacture and Commercialize the FAAH Products, by itself or through an Affiliate or Service Provider.

Section 2.9 FAAH Product Coordination . Upon Purdue’s election to terminate its Program Rights for the FAAH Products (as defined in the FUSA Agreement) pursuant to Sections 2.5, 2.6 or 2.8 of the FUSA Agreement, Infinity shall have the right, in its sole discretion, by providing written notice to MICL within thirty (30) days after such election, to terminate MICL’s Program Rights for Alliance Products arising out of the FAAH Project, whereupon MICL shall be deemed to have elected to have terminated such Program Rights pursuant to Sections 2.5, 2.6 or 2.8 of this Agreement, with the corresponding effects herein.

ARTICLE III

DEVELOPMENT AND COMMERCIALIZATION OF ALLIANCE PRODUCTS

Section 3.1 Regulatory Matters Related to Products . For purposes of this Section 3.1, unless the context dictates otherwise, the terms “Alliance Product” and “Product” shall expressly exclude FAAH Products if, and to the extent, that MICL assumes responsibility for the Development, Manufacture and Commercialization of FAAH Products pursuant to Section 2.8.

(a) Overview . Infinity shall use Commercially Reasonable Efforts to Develop each Product in order to seek Regulatory Approval for such Product in the Infinity Territory and in the MICL Territory. Infinity shall provide MICL with opportunities to meaningfully consult with Infinity in the initial and on-going development of the global clinical Development strategy for such Product and Infinity will consider in good faith MICL’s input with respect to such strategy.

 

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(b) Regulatory Submissions . Subject to Sections 3.1(a) and 3.1(d), Infinity shall oversee, monitor and coordinate all regulatory actions, communications and filings with, and submissions to, the FDA, EMEA, MHLW and other Regulatory Authorities with respect to all Products.

(c) Regulatory Meetings and Correspondence . Subject to Sections 3.1(a) and 3.1(d), Infinity shall be responsible for interfacing, corresponding and meeting with the FDA, EMEA, MHLW and other Regulatory Authorities with respect to all Products. MICL shall have the right to have a senior, experienced employee, reasonably acceptable to Infinity, participate as an observer in meetings with Regulatory Authorities in the MICL Territory with respect to Products and shall be provided with advance access to Infinity’s materials prepared for such meetings. Infinity shall also provide MICL with copies of any material submissions and correspondence with Regulatory Authorities in the MICL Territory relating to Development of, or the process of obtaining Regulatory Approval for, Products, and shall use reasonable efforts to provide MICL with copies of any other submissions and correspondence with Regulatory Authorities in the MICL Territory relating to Development of, or the process of obtaining Regulatory Approval for, Products. MICL shall also have the right to review and comment upon the strategy for the order and timing of filing of submissions to obtain Regulatory Approval for Products in the MICL Territory, as well as any material submissions and correspondence with Regulatory Authorities in the MICL Territory related to Products and meetings with such Regulatory Authorities. Infinity shall respond within a reasonable time frame to all reasonable inquiries by MICL with respect to such submissions and correspondence. Infinity shall also provide MICL as soon as practicable with meeting minutes from any meetings with the Regulatory Authorities in the MICL Territory concerning the same.

(d) Transition . Following the first Regulatory Approval of each Product in any country in the MICL Territory, to the extent that MICL elects to undertake the responsibility for interfacing, corresponding and meeting with the EMEA, MHLW and other Regulatory Authorities in the MICL Territory with respect to such Product, the Parties shall expeditiously effect (i) the transfer of such Regulatory Approval from Infinity to MICL, and (ii) the transition of such responsibilities to MICL and, thereafter, the provisions of Section 3.1(c) shall apply to Infinity and MICL, mutatis mutandis as they apply to MICL and Infinity, respectively.

(e) Data Ownership . All preclinical and clinical data generated with respect to the Products in the course of the Research Program shall be owned by Infinity.

(f) Global Database . Following the initiation of a Phase I Study for any Product by Infinity, its Affiliates or Sublicensees, Infinity shall, itself or through its Affiliate or a Third Party, establish and maintain a worldwide safety database for Products. Such database shall comply in all material respects with all Laws reasonably applicable to pharmacovigilance anywhere the Products are being or have been Developed or Commercialized. The costs associated with establishing and maintaining such database shall be considered a Research and Development Expense. Infinity shall consult with MICL with respect to the selection of a Third Party to establish or maintain such database.

 

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(g) Adverse Event Reporting; Safety Data Exchange and Medical Inquiries . The Parties shall meet at a reasonable time prior to the first commercial sale of any Product to negotiate in good faith and agree on a process and procedure for sharing adverse event information pursuant to a written pharmacovigilance agreement (the “ Safety Agreement ”).

Section 3.2 Manufacturing .

(a) Infinity shall have the sole right to, and shall be solely responsible for the, Manufacture of commercial quantities of Products (other than FAAH Products), Infinity Assumed Products, Infinity Assumed In-Licensed Products and Opt-Out Products worldwide, either by itself or through an Affiliate or Service Provider. Infinity, on the one hand, and MICL or MMCO, on the other hand, shall meet a reasonable time prior to the initiation of the first Phase III Study for any Product to negotiate in good faith and agree upon a written supply agreement pursuant to which MICL or MMCO shall purchase, and Infinity shall supply, Products for sale by MICL and its Affiliates and Sublicensees in the applicable MICL Territory (the “ Supply Agreement ”). The Supply Agreement shall specify (i) the cost of Products, which shall not exceed Infinity’s fully-absorbed costs for such Products in accordance with U.S. GAAP, (ii) the remedies available to MICL in the event Infinity fails to supply Product to MICL in accordance with the terms and conditions of the Supply Agreement, including the right to Manufacture the relevant Products until such time as Infinity is able to fulfill its supply obligations under the Supply Agreement, (iii) indemnification obligations substantially similar to those set forth in Section 9.1, and (iv) on termination of this Agreement by Infinity pursuant to Sections 10.2(a), 10.2(b) or 10.2(d) or by MICL pursuant to Section 10.2(c), (A) Infinity shall have the option, exercisable within thirty (30) days following the effective date of such termination, to purchase any inventory of products at the price for which such product was sold to MICL by Infinity pursuant to the Supply Agreement; (B) Infinity may exercise such option by written notice to MICL during such thirty (30) day period; provided, however, that, in the event Infinity exercises such right to purchase such inventory, MICL shall grant, and hereby does grant, a royalty-free right and license to any trademarks, names and logos of MICL contained therein for a period of twelve (12) months in order to sell such inventory; and (C) upon such exercise, the Parties will establish mutually agreeable payment and delivery terms for the sale of such inventory; provided that, unless otherwise agreed by MICL, Infinity shall take possession of and pay for such inventory within sixty (60) days after Infinity’s exercise of such option to repurchase such inventory. In the event Infinity determines to solicit bids for the Manufacture of Products by a Third Party, Infinity shall use Commercially Reasonable Efforts to conduct a competitive bid process and shall consider in good faith any bids submitted by MICL and/or its Affiliates. If Infinity builds or purchases a factory, MICL shall not bear any costs with respect thereto other than the amortized costs thereof to the extent included in the fully-absorbed cost of goods (in accordance with U.S. GAAP) of the products purchased by MICL or its Affiliates.

(b) MMCO shall have the right to, and shall be responsible for the, Manufacture of commercial quantities of MICL Assumed Products and/or MICL Assumed In-Licensed Products worldwide, either by itself or through an Affiliate or Service Provider, in which case, at MICL’s request, Infinity shall provide to MMCO or its designee all information in its possession with respect to the Manufacture of such MICL Assumed Product and MICL Assumed In-Licensed Product. If MICL requests Infinity to Manufacture any such MICL Assumed Product or MICL Assumed In-Licensed Product, the Parties shall discuss in good faith mutually acceptable terms and conditions for such supply arrangement.

 

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Section 3.3 Commercialization of Products .

(a) During the Term, Infinity, itself or through its Affiliates and Sublicensees, shall be solely responsible for Commercializing all Alliance Products (other than FAAH Products), In-Licensed Products, Opt-Out Products, Infinity Assumed Products and Infinity Assumed In-Licensed Products in the applicable Infinity Territory. Infinity shall be responsible for one hundred percent (100%) of the expenses incurred in connection with the Commercialization of such Alliance Products, In-Licensed Products, Opt-Out Products, Infinity Assumed Products and Infinity Assumed In-Licensed Products in the applicable Infinity Territory. Infinity, by itself or through an Affiliate or Service Provider, shall use Commercially Reasonable Efforts to Commercialize Alliance Products, Opt-Out Products and Infinity Assumed Products in the Infinity Territory.

(b) During the Term, MICL, itself or through its Affiliates and Sublicensees, shall be solely responsible for Commercializing all Alliance Products (including all FAAH Products while they remain Alliance Products), In-Licensed Products, MICL Assumed Products and MICL Assumed In-Licensed Products in the applicable MICL Territory. MICL shall be responsible for one hundred percent (100%) of the expenses incurred in connection with the Commercialization of such Alliance Products, In-Licensed Products, MICL Assumed Products and MICL Assumed In-Licensed Products in the applicable MICL Territory. MICL, by itself or through an Affiliate or Service Provider, shall use Commercially Reasonable Efforts to Commercialize Alliance Products and MICL Assumed Products in each country in the MICL Territory.

(c) During the Term, if a Party or any of its Affiliates wishes to launch, or authorize a Third Party to launch, a generic version of any Product or file, or authorize a Third Party to file, an ANDA based on a Regulatory Approval for a Product, such Party shall propose such launch or filing with the other Party and, if the Parties agree to conduct or authorize such launch or filing, the Parties shall prepare and agree upon a plan with respect thereto (which plan shall specify all applicable terms and conditions, including the equal sharing of net margins with respect to the relevant Product in such country, minus a reasonable distribution fee) and neither Party nor its Affiliates may conduct or authorize such launch or filing except in accordance with such agreed-upon plan.

Section 3.4 Global Branding; Product Trademarks . Notwithstanding the provisions of Section 3.3(b), and to the extent permitted by applicable Law:

(a) Infinity shall have the right, from time to time during the Term, to implement (and thereafter modify and update) a plan for global branding strategy, including global messaging, for Products (other than FAAH Products) worldwide (the “ Global Branding Plan ”). To the extent Infinity determines to develop and utilize such Global Branding Plan, (i) MICL shall have the right to appoint a representative to participate with Infinity in the development of such Global Branding Plan, (ii) Infinity will consider in good faith any comments on the Global Branding Plan provided by such representative of MICL, and (iii) MICL shall use Commercially Reasonable Efforts to adhere to the Global Branding Plan in its Commercialization of Products.

 

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(b) Subject to obtaining necessary Regulatory Approvals, MICL shall Commercialize each Product (other than FAAH Products) in the MICL Territory under the product name and related trademarks selected by Infinity (“ Product Trademarks ”). All uses of the Product Trademarks to identify and/or in connection with the Commercialization of Products in the MICL Territory shall be reviewed by Infinity and shall be in accordance with Regulatory Approvals and all applicable Laws. The Product Trademarks under which Products are marketed or sold (other than MICL’s corporate trademarks or trade names) shall be used by MICL only pursuant to the terms of this Agreement to identify and in connection with the Commercialization of Products, and shall not be used by MICL to identify or in connection with the marketing of any other products. Infinity shall own and retain all rights to, and have the sole right to prepare, file, prosecute and maintain, such Product Trademarks (together with all goodwill associated therewith) in the applicable Infinity Territory at its own expense, and MICL shall own and retain all rights to, and have the sole right to prepare, file, prosecute and maintain, such Product Trademarks (together with all goodwill associated therewith) in the applicable MICL Territory at its own expense. MICL shall own any rights to any Internet domain names incorporating any Product Trademark or any variation or part of any such Product Trademark as its URL address or any part of such address, under top level domains that are specific to the countries in the MICL Territory in which MICL has the right to Commercialize the Product most closely associated with such Product Trademark, and Infinity shall own rights to any Internet domain names incorporating any Product Trademark or any variation or part of any such Product Trademark as its URL address or any part of such address under any other top level domains; provided , that, the Parties shall each be responsible for fifty percent (50%) of the costs incurred by Infinity with respect to Internet domain names or URLs under non-country-specific top level domains (such as “.com”). MICL shall own all product name and related trademarks for FAAH Products in the applicable MICL Territory, and all Internet domain names incorporating such product name and trademark or any variation or part of any such product name or trademark as its URL address or any part of such address, and shall be responsible for one hundred percent (100%) of the costs with respect thereto.

Section 3.5 Information Sharing . Each Party shall, on an annual basis no later than October 1 of each year after the first commercial sale of a Product, provide a report to the other Party detailing the Commercializing Party’s plans for the Commercialization of such Product in the MICL Territory or Infinity Territory, as applicable, to the extent reasonably necessary or desirable to enable the other Party to (a) discuss with the Commercializing Party any concerns regarding any potential adverse regulatory or safety impact of any post-Regulatory Approval study conducted in accordance with Section 2.2(d) and (b) ensure consistency of such plan with the Global Branding Plan. Each such report shall include the following items in connection with the Commercialization of Product in the MICL Territory or Infinity Territory, as applicable: (i) a description of the short- and long-term vision for the Product and Product positioning; (ii) a description of any promotional materials and campaigns, including publication plans used in connection with the promotion of the Product; and (iii) information concerning the plans for the conduct of any post-Regulatory Approval studies for the Product conducted in accordance with Section 2.2(d).

 

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ARTICLE IV

GRANT OF LICENSES

Section 4.1 License Grant to MICL .

(a) Subject to the terms and conditions of this Agreement, Infinity, on behalf of itself and its Affiliates, hereby grants to MICL during the Term an exclusive, sublicenseable (in accordance with and subject to the provisions of Section 4.2) license or sublicense, as applicable, under the Infinity Know-How, Infinity Patent Rights and Product Trademarks to Commercialize Products in the applicable MICL Territory.

(b) Subject to the terms and conditions of this Agreement, Infinity, on behalf of itself and its Affiliates, hereby grants to MICL during the Term an exclusive, sublicenseable (in accordance with and subject to the provisions of Section 4.2) license or sublicense, as applicable, under the Infinity Know-How, Infinity Patent Rights and Product Trademarks to Develop, Manufacture and Commercialize MICL Assumed Products and MICL Assumed In-Licensed Products in the applicable MICL Territory.

(c) Subject to the terms and conditions of this Agreement, in the event MICL assumes responsibility for the Development, Manufacturing and Commercialization of FAAH Products in accordance with Section 2.8, Infinity, on behalf of itself and its Affiliates, hereby grants to MICL during the Term an exclusive, sublicenseable (in accordance with and subject to the provisions of Section 4.2) license or sublicense, as applicable, under the Infinity Know-How and Infinity Patent Rights to Develop and Manufacture FAAH Products in the applicable MICL Territory.

Section 4.2 MICL Sublicense Rights .

(a) MICL shall have the right, on a product-by-product and country-by-country basis, to grant sublicenses under the licenses to Infinity Know-How and Infinity Patent Rights granted to MICL under Section 4.1 to any of its Affiliates and, subject to Sections 4.2(b) and 4.2(c), to Third Parties.

(b) In the event that MICL desires to commence negotiations with any Third Party (other than Service Providers) to license and/or sublicense all or a portion of MICL’s Program Rights with respect to a Product, MICL shall promptly notify Infinity of its intent to enter into such a transaction, identifying the specific Program Rights that will be the subject of such transaction. Within thirty (30) days after receipt of such notification, Infinity shall notify MICL in writing either that (i) Infinity is interested in negotiating an agreement with respect to such Program Rights or (ii) Infinity has no interest and therefore waives its right of first negotiation with respect to such Program Rights. If Infinity notifies MICL in writing within such thirty (30) day period that Infinity desires to negotiate an agreement with respect to such Program Rights, the Parties shall negotiate in good faith for up to sixty (60) days from the date of such notification, or such longer period as agreed between the Parties, regarding the then-current and planned capabilities of Infinity with respect to such Program Rights and the terms pursuant to which the Parties would enter into a transaction with respect to such Program Rights. Failure

 

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by Infinity to give written notice of its interest or lack of interest in negotiating for such agreement within thirty (30) days after receipt of written notice from MICL as described in the first sentence of this Section 4.2(b) shall be deemed to constitute a waiver by Infinity of its right of first negotiation with respect to such Program Rights. In addition, failure of the Parties to execute a written agreement with respect to such Program Rights within such sixty (60) day negotiation period (or such longer period as agreed between the Parties) shall result in the termination of such right of first negotiation with respect to such Program Rights. If Infinity waives its right of first negotiation with respect to such Program Rights or, following Infinity’s exercise of its right of first negotiation with respect to such Program Rights, the Parties fail to enter into a written agreement with respect thereto during the negotiation period set forth in this Section 4.2(b), then MICL shall, subject to Section 4.2(c), be free to enter into a transaction for such Program Rights with a Third Party.

(c) Any permitted license or sublicense of MICL’s Program Rights granted by MICL to a Third Party (including further sublicenses of such rights) shall be subject to Infinity’s prior written consent, which shall not be unreasonably withheld or delayed. MICL shall provide Infinity with a copy of any license or sublicense agreement within five (5) Business Days after execution thereof. Each license or sublicense of MICL’s Program Rights granted by MICL shall be consistent with the terms and conditions of this Agreement, and MICL shall guarantee the performance of its Affiliates and Sublicensees with respect to any license or sublicense granted pursuant to this Section 4.2.

Section 4.3 Freedom to Operate . MICL hereby represents and warrants that, as of the Effective Date, IPI-926 and the formulation thereof disclosed in the IND therefor does not infringe any Know-How or intellectual property right owned or controlled by MICL or its Affiliates. Should Infinity desire, at any time after the Effective Date, to obtain a covenant from MICL and its Affiliates not to assert against Infinity and its Affiliates, or any of their Service Providers or customers (but not Sublicensees), any Know-How or intellectual property right owned or controlled by MICL or its Affiliates in connection with the (a) Development or Manufacture of Products, Opt-Out Products, Infinity Assumed Products, Infinity Assumed In-Licensed Products and Terminated In-Licensed Products anywhere in the world, or (b) Commercialization in the Infinity Territory, of Products, Opt-Out Products, Infinity Assumed Products, Infinity Assumed In-Licensed Products and Terminated In-Licensed Products, Infinity shall notify MICL thereof and MICL shall, and shall cause its Affiliates to, consider such request in good faith at MICL’s commercially reasonable discretion.

Section 4.4 License Grant to Infinity . Subject to the terms and conditions of this Agreement, MICL, on behalf of itself and its Affiliates, hereby grants to Infinity during the Term an exclusive, sublicenseable (in accordance with and subject to the provisions of Section 4.5) license or sublicense, as applicable, under the MICL Know-How and MICL Patent Rights to (a) Develop and Manufacture Products, Opt-Out Products, Infinity Assumed Products, Infinity Assumed In-Licensed Products and Terminated In-Licensed Products anywhere in the world, and (b) to Commercialize Products, Opt-Out Products, Infinity Assumed Products, Infinity Assumed In-Licensed Products and Terminated In-Licensed Products in the applicable Infinity Territory.

 

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Section 4.5 License and Sublicense Grants to Third Parties by Infinity .

(a) In the event that Infinity desires to commence negotiations with any Third Party (other than Service Providers) to license and/or sublice