APPENDIX 1
Definitions
“Affiliate” of a Party means any other party that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Party. For purposes of this definition only, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” will mean the possession, directly or indirectly, of the power to direct the management or policies of a party, whether through the ownership of voting securities or by contract relating to voting rights or corporate governance.
“Agreement” means this document including any and all schedules, appendices and other addendum to it as may be added and/or amended from time to time in accordance with the provisions of this document.
“Alicaforsen” means the compound known by the USAN name “Alicaforsen,” which is also known as ISIS 2302.
“Alicaforsen API” means Alicaforsen in bulk form manufactured in accordance with cGMP.
Alicaforsen Patents” means (i) the Patents listed on Appendix 2, and (ii) all Patents issuing from the Patents in (i), and (iii) any other Patent Controlled by Isis during the term of this Agreement which covers the composition, formulation or use of Alicaforsen but excluding always the Patents within Excluded Isis IP and the ICAM-1 Specific Patents.
“Alicaforsen Product” means a pharmaceutical preparation in any formulation comprising Alicaforsen.
“Applicable Law” means all applicable laws, rules, and regulations, including any rules, regulations, guidelines, or other requirements of the Regulatory Authorities that may be in effect from time to time.
“Atlantic Equity Securities” has the meaning set forth in Section 6.2.2.
“Atlantic Healthcare” means that company incorporated in England and Wales with company registration no. 5878612 whose registered address is Maple House, Birdbrook, Halstead, Essex CO9 4BB.
“Authorized Disclosure” means a disclosure of Confidential Information by the receiving Party to the extent that such disclosure is:
(i) made in response to a valid order of a court of competent jurisdiction; provided, however, that such receiving Party will first have given notice to such other Party and given such other Party a reasonable opportunity to quash such order and to
obtain a protective order requiring that the Confidential Information and documents that are the subject of such order be held in confidence by such court or agency or, if disclosed, be used only for the purposes for which the order was issued; and provided further that if a disclosure order is not quashed or a protective order is not obtained, the Confidential Information disclosed in response to such court or governmental order will be limited to that information which is legally required to be disclosed in response to such court or governmental order;
(ii) otherwise required to comply with Applicable Laws, including to the extent such disclosure is required in publicly filed financial statements or other public statements under rules governing a stock exchange (e.g., the rules of the United States Securities and Exchange Commission, NASDAQ, NYSE, UKLA or any other stock exchange or which securities of either Party may be listed) provided, however, to the extent possible bearing in mind such Applicable Laws and subject to the next subsequent sentence of this paragraph, the receiving Party shall provide the other Party with a copy of the proposed text of such statements or disclosure five (5) Business Days in advance of the date on which the disclosure is to be made to enable the other Party to review and provide comments, unless a shorter review time is agreed. If the compliance with an Applicable Law requires filing of this Agreement, the filing Party shall to the extent possible seek confidential treatment of portions of this Agreement from the relevant competent authority and shall provide the other Party with a copy of the proposed filings at least ten (10) Business Days prior to filing for the other Party to review any such proposed filing. Each Party agrees that it will obtain its own legal advice with regard to its compliance with Applicable Laws and will not rely on any statements made by the other receiving Party relating to such laws;
(iii) made by such receiving Party to the Regulatory Authorities as necessary for (a) the development or commercialization of a Product in a particular country, or (b) as required in connection with any filing, application or request for Regulatory Approval in a particular country and in either case to the extent consistent with the licenses granted under the terms of this Agreement;
(iv) made by the receiving Party, in connection with the performance of this Agreement, to Affiliates sublicensees, licensors, licensees, directors, officers, employees, consultants, representatives or agents, each of whom prior to disclosure must be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Agreement;
(v) made by the receiving Party to existing or potential acquirers; existing or potential pharmaceutical collaborators (to the extent contemplated hereunder); investment bankers; existing or potential investors, merger candidates, partners, venture capital firms or other financial institutions or investors for purposes of obtaining financing; or, bona fide strategic potential partners; each of whom prior to disclosure must be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Agreement; or
(vi) made by the receiving Party to its legal advisers for the purpose of seeking advice.
“Business Day” means 9.00am to 5.00pm local time on any day, other than Saturday, Sunday or any statutory holiday or public holiday in the United States or England and Wales.
“Calendar Year” means each successive period of 12 months commencing on January 1 and ending on December 31.
“cGMP” means current Good Manufacturing Practices as specified in ICH Guideline Q7A, the United States Code of Federal Regulations, or equivalent laws, rules, or regulations of an applicable Regulatory Authority at the time of manufacture.
“Commercially Reasonable Efforts” (i) in respect of Atlantic means efforts and resources commonly used in the biotechnology industry by companies at a similar stage of development for products of similar commercial potential to develop and commercialize a product owned by such a company or to which it has rights, which product is at a similar stage in its development or product life and is of similar market potential to the Product in question and taking into account the patent and other proprietary position of the product; and (ii) in respect of Isis means efforts and resources commonly used by biotechnology companies of a similar size to Isis based on market capitalization to develop a product owned by such a company or to which it has rights, which product is at a similar stage in its development or product life and is of similar market potential to the Product in question and taking into account the patent and other proprietary position of the product. Promptly following the meeting with the FDA to discuss the registration strategy for a pouchitis indication, Atlantic and Isis will agree on the Development Timeline to be included in Appendix 5. Atlantic’s meeting of such Development Timeline in Appendix 5 and Isis’ provision of the Candidate Pool to Atlantic in accordance with the Work Plan will be deemed to be examples of using Commercially Reasonable Efforts; provided, however, that a failure to meet such Development Timeline will not be dispositive of a failure to use Commercially Reasonable Efforts.
“Committee Members” has the meaning set forth in Section 3.2.
“Candidate Pool” has the meaning set forth in Section 4.1.1.
“Confidential Information” means all information and know-how and any tangible embodiments thereof provided by or on behalf of one Party to the other Party either in connection with the discussions and negotiations pertaining to this Agreement or in the course of performing this Agreement, including data; knowledge; practices; processes; ideas; research plans; engineering designs and drawings; research data; manufacturing processes and techniques; scientific, manufacturing, marketing and business plans; and financial and personnel matters relating to the disclosing Party or to its present or future products, sales, suppliers, customers, employees, investors or business.
Exceptions. Notwithstanding the foregoing, information or know-how of a Party will not be deemed Confidential Information for purposes of this Agreement if such information or know-how:
(a) was already known to the receiving Party, other than under an obligation of confidentiality or non-use, at the time of disclosure to such receiving Party;
(b) was generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or was otherwise part of the public domain, at the time of its disclosure to, or, with respect to know-how, discovery or development by, such receiving Party;
(c) became generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or otherwise became part of the public domain, after its disclosure to such receiving Party through no fault of the receiving Party;
(d) was disclosed to such receiving Party, other than under an obligation of confidentiality or non-use, by a Third Party who had no obligation to the disclosing Party not to disclose such information or know-how to others; or
(e) was independently discovered or developed prior to disclosure by such receiving Party, as evidenced by their written records, without the use of Confidential Information belonging to the disclosing Party.
“Control” means, with respect to any Patent or other intellectual property right, possession of the right (whether by ownership, license or otherwise), to assign, or grant a license, sublicense or other right to or under, such Patent or right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party or incurring any additional financial or other obligation to a Third Party except the obligations specifically described in Section 6.7.
“Cumulative Net Sales” means the total cumulative amount of Net Sales calculated separately for each of the Alicaforsen Products and each of the Second Generation ICAM-1 Products, from the first date that each respective Product was approved for commercialization by a Regulatory Authority. For purposes of clarity, the Net Sales for any Second Generation ICAM-1 Products will not be taken into consideration when calculating Cumulative Net Sales for Alicaforsen Products, and vice versa.
“Discontinuance” means the occurrence of any one of the following:
1. Atlantic voluntarily elects to abandon researching, developing and/or commercializing all Products, as evidenced by a written communication from an authorized officer of Atlantic to Isis; or
2. Atlantic fails to use Commercially Reasonable Efforts and the Quality Standard to develop and commercialize at least one Product.
“Discontinued Patent” has the meaning set forth in Section 9.1.4.
“DMF” has the meaning set forth in Section 3.6.1.
“EMEA” means the European Regulatory Authority known as the European Medicines Agency and any successor agency thereto.
“Equity Cap” means [***]% of the issued and outstanding share capital of Atlantic (on an as-issued, post financing basis).
“Excluded Isis IP” means all know how and Patents Controlled by Isis on the Effective Date and at any time during the term of the Agreement other than (A) Alicaforsen Patents, (B) ICAM-1 Specific Patents, (C) Isis Core Technology Patents, (D) Second Generation ICAM-1 Product-Specific Patents, (E) Isis Data, (F) Isis Manufacturing Know How, and (G) Second Generation Isis Data. For clarity, Excluded Isis IP include any know how and Patents Controlled by Isis which cover Isis’ (i) formulation and delivery technology (save as expressly claimed in the Alicaforsen Patents, ICAM-1 Specific Patents, Second Generation ICAM-1 Product-Specific Patents and Isis Manufacturing Know How), (ii) RNAi technologies, (iii) microRNA technologies, and (iv) chemical modifications and motifs other than Isis MOE Gapmer Chemistry, and (v) the Excluded Manufacturing IP.
“Excluded Manufacturing IP” means all Patents and know how (including any and all information directly relating to manufacturing methods (including related analytical methods) of Alicaforsen API) Controlled by Isis on the Effective Date and at any time during the term of the Agreement which claim the manufacturing process by which Isis manufactures Alicaforsen API.
“Existing Royalties” has the meaning set forth in Section 6.4.3.
“FDA” means the United States Food and Drug Administration and any successor agency thereto.
“First Commercial Sale” means the first sale of a Product by Atlantic, its Affiliates or a sublicensee to a Third Party in a particular country after Regulatory Approval has been obtained.
“[***]” means a chronic disorder of the [***], including without limitation, [***] or [***].
“ICAM-1” means intercellular adhesion molecule-1 (also called CD54).
“ICAM-1 Specific Patents” means (i) the Patents listed on Appendix 3 (ii) all Patents issuing therefrom, and (iii) any other Patents Controlled by Isis during the term of this Agreement which cover the composition, formulation or use of Alicaforsen Products
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or Second Generation ICAM-1 Products, but excluding always the Alicaforsen Patents, the Second Generation ICAM-1 Product-Specific Patents and the Patents within Excluded Isis IP.
“IFRS” means International Financial Reporting Standards established by the International Accounting Standards Board, as amended from time to time.
“[***]” means a formulation and excipient system and technologies that delivers a drug compound into the human body by [***] directly into the [***] to achieve a local or systemic therapeutic effect.
“Initiation of Phase I Clinical Trial” means the first visit by the first human patient in a Phase I Clinical Trial during which dosing of Product or placebo occurs.
“Initiation of Pivotal Quality Clinical Trial” means the first visit by the first patient in a Pivotal Quality Clinical Trial during which dosing of Product or placebo occurs.
“Isis Background IP” has the meaning set forth in Section 13.6.1.
“Isis Background Know How” has the meaning set forth in Section 13.6.1.
“Isis Core Technology Patents” means Patents Controlled by Isis on the Effective Date that are necessary for the development and commercialization of the Product, but does not include (A) Alicaforsen Patents, (B) ICAM-1 Specific Patents, (C) Second Generation ICAM-1 Product-Specific Patents, or (D) Patents Controlled by Isis that claim, and only to the extent that they claim, Excluded Isis IP.
“Isis Data” has the meaning set forth in Section 2.2.1.
“Isis Database” has the meaning set forth in Section 3.3.1.
“Isis Manufacturing Know How” has the meaning set forth in Section 2.2.1.
“JDC” has the meaning set forth in Section 3.2.
“Losses” has the meaning set forth in Section 12.1.
“Major Market” means the [***], [***], [***], [***], [***], [***], [***] and [***].
“Manufacturing Agreement” has the meaning set forth in Section 3.6.1.
“MOE Gapmer” means a single stranded antisense Phosphorothioate oligonucleotide of 15-30 nucleotides wherein all of the backbone linkages are modified by adding a sulfur at the non-bridging oxygen (Phosphorothioate) and a stretch of at least 10 consecutive nucleotides remain unmodified (deoxy sugars) and the remaining nucleotides contain an O’ – methyl O’ – ethyl substitution at the 2’ position.
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“NDA” means a New Drug Application filed with the FDA after completion of clinical trials to obtain Regulatory Approval for commercial product in the United States or an equivalent application for regulatory approval in other Major Market countries.
“Net Sales” means the gross invoiced price charged by Atlantic or its Affiliates or sublicensees, as appropriate, for the sale of a Product to a Third Party by Atlantic, its Affiliates or its sublicensees, as appropriate, less the following deductions:
(i) Trade and quantity discounts actually granted;
(ii) Credits for returns or allowances;
(iii) Actual uncollectible amounts for Product where collectibility is determined in accordance with IFRS consistently applied to all of Atlantic’s products;
(iv) Freight, shipping insurance and other transportation expenses directly related to the sale of the Product (if actually borne by Atlantic, its Affiliates or sublicensees without reimbursement from any Third Party);
(v) The amount of any sales tax or other taxes assessed directly on the sale of such Product which is not refunded; and
(vi) Charge back payments or rebates granted to managed health care organizations or federal, state and local governments, their agencies, purchasers and reimburses.
The transfer of Product by Atlantic or one of its Affiliates to another Affiliate shall not be considered a sale. Upon the sale or other disposal of Product for other than monetary consideration , which sales price is either customary or is reasonably expected in the country in which such sale is made, such sale or other disposal shall be deemed to be a sale with the consideration for such sale constituting Net Sales hereunder at the average sales price during the applicable reporting period generally achieved (or as achieved by similar products) for such Product in the country in which such sale or other disposal occurred when such Product is sold alone and not with other products. Disposal of Product for or use of Product in clinical trials or as free samples shall not be deemed a sale under this Section. Such amounts shall be determined from the books and records of Atlantic maintained in accordance with IFRS, consistently applied.
Where Product contains Alicaforsen API or a Second Generation ICAM-1 ASO Drug Candidate and is sold in combination with one or more other active ingredient(s) that are sold either as a fixed dose or as separate doses in a single package for a single price (a “Combination Product”), Net Sales will be determined as follows:
(X divided by Y) multiplied by Z
where X is the average sales price during the applicable reporting period generally achieved for the Product in the country in which such sale or other disposal occurred when such Product is sold alone and not as a Combination Product; Y is the sum of the
average sales price during the applicable reporting period generally achieved in that country, when sold alone, by each product (including the Product) included in the Combination Product that is sold for the single price; and Z equals the single price at which the Combination Product represented in Y was actually sold. In the event one or more of the products in the Combination Product are not sold separately, the Parties shall confer in good faith to determine a fair market price that shall be equitable for the value of the Product within the Combination Product.
“Notice” has the meaning set forth in Section 4.1.2.
“[***]” means a formulation and excipient system and technologies to deliver a drug compound to the [***] to achieve a local or systemic therapeutic effect.
“Patents” will include (x) all U.S. patents and patent applications, (y) any substitutions, divisions, continuations, reissues, renewals, registrations, confirmations, re-examinations, extensions, supplementary protection certificates and the like, and any provisional applications, of any such patents or patent applications, and (z) any foreign or international equivalent of any of the foregoing.
“Patent Term Extensions” has the meaning set forth in Section 9.1.6.
“Phase I Clinical Trial” means the initial clinical testing of a Product in humans (first-in-humans study).
“Pivotal Quality Clinical Trial” means a human clinical trial of a Product designed to be of a size and statistical power to support an NDA filing alone or in combination with other studies. If it is unclear whether or not a study design will be sufficient to support an NDA filing (other than by virtue of the uncertainty of safety and efficacy data from that trial) the study will be deemed to be a Pivotal Quality Clinical Trial on the initiation of activities to support an NDA filing. A Phase III clinical study will be deemed to be a Pivotal Quality Clinical Trial.
“Positive Pouchitis Clinical Trial” means a clinical study of Alicaforsen Product in humans conducted by Atlantic in accordance with this Agreement that is directed to the treatment of pouchitis, which meets the study’s primary endpoint(s).
“Product” means (i) an Alicaforsen Product and, (ii) at such time as Isis grants to Atlantic the licenses in Section 4.1.3 of the Agreement, a Second Generation ICAM-1 Product, or (iii) both, which Atlantic or its Affiliates are developing or commercializing under this Agreement or that is being developed or commercialized under a Sublicense.
“Quality Standard” means, with respect to research, development, manufacture or commercialization of the Candidate Pool, the Second Generation ICAM-1 ASO Drug Candidate or a Product, the standard of care, quality, and professional competence commonly used in the biotechnology industry for products of similar commercial potential at a similar stage in its lifecycle.
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“Regulatory Approval” means (a) in the United States, approval by the FDA of an NDA, or similar application for marketing approval, and satisfaction of any related applicable FDA registration and notification requirements (if any), and (b) in a Major Market other than the United States, approval by Regulatory Authorities having jurisdiction over such country of a single application or set of applications comparable to an NDA and satisfaction of any related applicable regulatory and notification requirements (if any).
“Regulatory Authority” means any applicable government entities regulating or otherwise exercising authority with respect to the development and commercialization of the Product.
“Regulatory Documentation” means all applications, registrations, licenses, authorizations and approvals (including all Regulatory Approvals), all correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority), all supporting documents and all clinical studies and tests, including the manufacturing batch records, relating to the Product, and all data contained in any of the foregoing, including all regulatory drug lists, advertising and promotion documents, adverse event files and complaint files.
“Royalty Due Dates” means the last working days of March, June, September and December of each and every year during which this Agreement remains in full force and effect.
“Second Generation Development Plan” has the meaning set forth in Section 4.1.2.
“Second Generation ICAM-1 ASO Drug Candidate” means a MOE Gapmer targeted to ICAM-1 that is selected by Atlantic under Section 4.1.2 of the Agreement.
“Second Generation ICAM-1 Products” means pharmaceutical preparation(s) comprising the Second Generation ICAM-1 ASO Drug Candidate.
“Second Generation ICAM-1 Product-Specific Patents” means any Patent that is Controlled by Isis on, before or after Atlantic makes its election under Section 4.1.2 of this Agreement, that (i) claims the specific composition of matter of a Second Generation ICAM-1 ASO Drug Candidate, or (ii) methods of using such Second Generation ICAM-1 ASO Drug Candidate as a therapeutic.
“Second Generation ICAM-1 Research Program” has the meaning set forth in Section 4.1.1.
“Second Generation Isis Data” has the meaning set forth in Section 4.1.4.
“SSEA Execution Date” has the meaning set forth in Section 6.1.1.
“Sublicense” means a sublicense from Atlantic to a Third Party under the Alicaforsen Patents or the ICAM-1 Patents or the Second Generation ICAM-1 Product-Specific Patents to develop, use, sell, offer for sale, have sold and/or import any Product.
“Sublicense Revenue” means any consideration that Atlantic receives from a sublicensee in consideration for a grant of any Sublicense, including, but not limited to, license fees, milestone payments, and license maintenance fees, but excluding: (i) royalties on Net Sales of Products, (ii) payments made in consideration of equity or debt securities of Atlantic at fair market value and (iii) payments specifically committed to reimburse Atlantic for the direct cost of research and development. If Atlantic receives any non-cash Sublicense Revenue, Atlantic will pay Isis, at Isis’ election, either (x) a cash payment equal to the fair market value of Isis’ appropriate portion of the Sublicense Revenue or (y) the in-kind portion, if practicable, of the Sublicense Revenue. For purposes of calculating Sublicense Revenue, a series of Sublicenses to the same sublicensee or related sublicensees will be aggregated to constitute a single Sublicense.
“Subscription and Share Exchange Agreement” has the meaning set forth in Section 6.1.1.
“Term” has the meaning set forth in Section 10.1.
“Third Party” means any party other than Isis or Atlantic or their respective Affiliates.
“Valid Claim” means a claim of a Patent which (i) in the case of any granted, unexpired United States or foreign Patent, shall not have been donated to the public, disclaimed or held invalid or unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision, or (ii) in the case of any United States or foreign patent application, is being prosecuted in good faith and shall not have been permanently cancelled, withdrawn, or abandoned provided that no more than eight (8) years have passed since the earliest priority date for such application.
“Valid Composition of Matter Claim” means a Valid Claim of a Patent in a given country that covers the structure of the compound comprising the active pharmaceutical ingredient in the Product (be it Alicaforsen API or Second Generation ICAM-1 ASO Candidate Drug) as opposed to its process of manufacture, use or method of treatment.
“Work Plan” has the meaning set forth in Section 4.1.1.
APPENDIX 2
ALICAFORSEN PATENTS
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APPENDIX 3
ICAM-1 SPECIFIC PATENTS
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APPENDIX 4
ISIS CORE TECHNOLOGY PATENTS
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APPENDIX 5
DEVELOPMENT TIMELINE
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APPENDIX 6
ATLANTIC EQUITY SECURITIES CAPITALIZATION TABLE
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