manufacturing and commercialization of such Development Candidate at its own cost and expense. The research term will end on the earlier of four years or until the Company has delivered a Development Candidate for each specified target. The Company may elect to extend the research term for a limited period of time to deliver a Development Candidate for a given target. In addition, the parties may mutually agree to extend the initial research term for an additional year. Under the Agreement, Bristol Myers Squibb has agreed to use commercially reasonable efforts to develop, seek and obtain regulatory approval for, and commercialize at least one product that contains a Licensed Collaboration Compound (a “Licensed Collaboration Product”) for each target in each of the United States, Japan and the European Union. The research component of the collaboration will be overseen by a joint steering committee comprised of an equal number of representatives from each of the Company and Bristol Myers Squibb. In addition to the initial specified targets, the parties have also agreed on a list of four reserved targets. Bristol Myers Squibb may replace one of the initial specified targets with a reserved target during a limited substitution period in the research term.
Exclusive License. Pursuant to the Agreement, for a given target, the Company granted to Bristol Myers Squibb an exclusive license, with the right to grant sublicenses, under certain patent rights, know-how and materials controlled by the Company to clinically develop, manufacture, use, sell, offer for sale, export and import and otherwise exploit, and have others do the same, any compound, molecule or product for such target throughout the world.
Intellectual Property. Under the terms of the Agreement, each party will own the entire right, title and interest in and to all know-how and patent rights first made or invented solely by the employees or consultants of such party in the course of the collaboration; provided that Bristol Myers Squibb has agreed to assign to the Company all of its rights, title and interest in any know-how and patent rights in any inventions that relate to the Company’s physics-based computational, software platform. The parties will jointly own all rights, title and interests in and to all know-how and patent rights first made or invented jointly by employees or consultants of the parties in the course of the collaboration.
Bristol Myers Squibb has the right but not the obligation to file, prosecute, maintain and defend any product-specific patents licensed by the Company to Bristol Myers Squibb under the Agreement. Bristol Myers Squibb will be required to bear the full cost and expenses of filing, prosecuting, maintaining and defending any such patents it chooses to file, prosecute, maintain or defend. If Bristol Myers Squibb determines not to prosecute or defend any such patent, the Company may do so at its own expense.
Financial Terms. Under the terms of the Agreement, Bristol Myers Squibb agreed to pay to the Company an initial upfront fee payment of $55 million. The Company also is entitled to receive up to $2.7 billion in total milestones across all potential targets. Such milestones consist of up to $585 million in total milestones per oncology target, including $360 million in the aggregate for certain specified research, development and regulatory milestones and $225 million in the aggregate for certain specified commercial milestones, as well as up to $482 million in total milestones per neurology and immunology target, including $257 million in the aggregate for certain specified research, development and regulatory milestones and $225 million in the aggregate for certain specified commercial milestones.
The Company is also entitled to a tiered percentage royalty on annual global net sales of Licensed Collaboration Products ranging from mid-single digits to low-double digits, subject to certain specified reductions. Royalties are payable by Bristol Myers Squibb on a Licensed Collaboration Product-by-Licensed Collaboration Product and country-by-country basis until the later of the expiration of the last valid claim of certain specified patent rights covering the Licensed Collaboration Product in such country, expiration of all applicable regulatory exclusivities in such country for such Licensed Collaboration Product and the tenth anniversary of the first commercial sale of such Licensed Collaboration Product in such country.
Degrader Compounds. The Agreement excludes any activities relating to protein-degrader compounds (“Degrader Compounds”). However, under the terms of the Agreement, for a limited period of time after the execution of the Agreement, the Company and Bristol Myers Squibb agree to negotiate a separate definitive agreement pursuant to which the Company will agree to license to Bristol Myers Squibb the right to conduct research, development and commercialization activities with respect to Degrader Compounds for the targets under the Agreement. The terms of such separate agreement relating to Degrader Compounds, including separate financial terms due to the Company in the event a Degrader Compound is developed and commercialized by Bristol Myers Squibb, are intended to be consistent with certain, limited terms and conditions for the Degrader Compounds described in the Agreement and such other terms and conditions as the Company and Bristol Myers Squibb may mutually agree.
