ARTICLE 10 -
ISIS REVERSION RIGHT; TECHNOLOGY TRANSFER TO BMS
Section 10.1 Isis Reversion Rights.
(a) If BMS terminates the Agreement under Section 9.2 or Isis terminates the Agreement under Section 9.3 or 9.4, Isis may elect to continue to Develop and Commercialize any Compound or Product by notice in writing to BMS within [***] of such termination (an “Election Notice”) that Isis is exercising its rights under this Section 10.1, in which case BMS will (i) grant to Isis a fully-paid (except for the royalty payments specified in Section 10.1(b) below), sublicensable, worldwide license or sublicense, as the case may be, to [***] as of the date of the Election Notice solely as they are necessary to make, have made, use, sell, offer for sale, have sold and import Compounds identified as of the date of the Election Notice and Products containing such Compounds identified as of the date of the Election Notice and (ii) transfer to Isis, for Isis’ use with respect to the Development and Commercialization of the Compounds or Products, [***] as of the date of the Election Notice that relate to such Compounds and Products.
(b) In consideration for the rights granted by BMS to Isis under this Article 10, Isis shall pay a royalty on net sales of Products by Isis, its Affiliates and licensees as follows: (i) [***]% of net sales of a Product if the Election Notice occurs after [***] but prior to establishing [***] for the applicable Compound or Product, (ii) [***]% of net sales of a Product if the Election Notice occurs after establishing [***] for the applicable Compound or Product but prior to [***] and (iii) [***]% of net sales of a Product if the Election Notice occurs after the Compound or Product [***]. Such royalty payment obligation shall be governed by Sections 5.8 through 5.16 which shall apply to Isis in the same way as they applied to BMS prior to such termination of the Agreement.
(c) Notwithstanding the foregoing, the licenses granted by BMS to Isis under this Section 10.1 shall be of no force or effect with respect to any given Compound(s) or Product(s) where BMS terminated the pre-clinical development, clinical development and/or commercialization of such Compound(s) or Product(s) due to Safety Reasons. For purposes of this Section 10.1(c), “Safety Reasons” means it is BMS’ or any of its Affiliates’ or Licensee’s reasonable belief that there is an unacceptable risk for harm in humans based upon: (i) pre-clinical safety data, including data from animal toxicology studies or (ii) the observation of serious adverse effects in humans after a Compound or Product has been administered to or taken by humans, such as during a clinical trial or after the launch of a Product. BMS shall provide Isis with all relevant data for such Compound or Product terminated for Safety Reasons but shall not be obligated to provide Isis with any rights of reference to any regulatory documents or filings relating to such terminated Compound or Product. In cases where this Section 10.1(c) applies, Isis will [***].
Section 10.2 [***] to BMS in the Event of Material Breach.
(a) In the event that, subsequent to a Change of Control of Isis, Isis (or its successor) materially breaches its obligations to BMS with respect to Isis’ performance of activities under this Agreement, then BMS shall have the right to receive a [***] with respect to any Isis Know-How and materials (including samples of Compounds and materials used in the preparation of Compounds) Controlled by Isis that are [***] for BMS to perform the activities otherwise assigned to Isis with respect to this Agreement, provided however, that BMS may not exercise this right unless (i) Isis is given [***] months prior written notice by BMS of BMS’ intent to exercise its rights hereunder, stating the reasons and justification for such breach and recommending steps which Isis should take, and (ii) Isis has not used good faith commercially reasonable efforts during the [***] month period following such notice to diligently remedy such breach and perform its obligations to BMS with respect to Isis’ performance of activities under the Research Plan. BMS’ rights under this Section 10.2 shall be limited to the performance of
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such activities that are necessary or reasonably useful for, and solely for the purposes originally licensed hereunder to, BMS to enjoy the benefit of the licenses granted hereunder with respect to the Compounds and Products, and any materials and Isis Know-How [***] pursuant to this Section 10.2 shall be used solely for such purpose. BMS shall be entitled to seek specific performance with respect to the remedy described in this Section 10.2 as set forth in Section 13.4, and Isis hereby stipulates to the fairness and reasonableness of such a remedy and covenants not to allege or assert, nor to allow any of its Affiliates to assert, nor further to cause or support any other Third Parties to assert, that such remedy is inappropriate or unenforceable or illegal in any way. For purposes of clarification, if BMS exercises its rights under this Section 10.2(a), except as specifically set forth in this Section, or as otherwise determined by an arbitrator under Section 13.4, all other provisions of this Agreement (including but not limited to Article 5) will remain in full force and effect.
(b) For the purposes of this Agreement, (1) “Change of Control” of Isis means that during the Term (i) Isis shall have become an Affiliate controlled by an entity that is a Drug Company, (ii) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of Isis shall have occurred to a Drug Company, or (iii) any Drug Company (whether individually or as part of a group) shall have become the owner, directly or indirectly, of voting securities entitled to cast more than fifty percent (50%) of the votes in the election of directors of Isis, and (2) “Drug Company” means any entity that conducts any research and/or development activities, or that manufactures, promotes, markets, distributes and/or sells any products, in the biotechnology or pharmaceutical industry.
ARTICLE 11 -
INDEMNIFICATION, INSURANCE AND LIMITATION OF LIABILITY
Section 11.1 Indemnification of Isis. BMS agrees to defend Isis, its Affiliates and their respective directors, officers, employees and agents, and their respective successors, heirs and assigns (collectively, the “Isis Indemnitees”), and shall indemnify and hold harmless the Isis Indemnitees, from and against any liabilities, losses, costs, damages, fees or expenses payable to a Third Party, and reasonable attorney’s fees and other legal expenses with respect thereto (collectively, “Losses”) arising out of any claim, action, lawsuit or other proceeding by a Third Party (collectively, “Third Party Claims”) brought against any Isis Indemnitee and resulting from or occurring as a result of: (a) whether or not negligence is found, the Development, manufacture, use, handling, storage, sale or other Commercialization or disposition of any Product in the Territory by BMS or its Affiliates or Licensees, (b) any breach by BMS of any of its representations or warranties pursuant to this Agreement or (c) the gross negligence or willful misconduct of BMS or any BMS Affiliate or Licensee in connection with this Agreement; except in any such case to the extent such Losses result from: (i) the gross negligence or willful misconduct of any Isis Indemnitee or (sub)contractor of Isis, (ii) any breach by Isis of any of its representations, warranties, covenants or obligations pursuant to this Agreement or under any agreement with a Third Party, or (iii) any breach of Applicable Law by any Isis Indemnitee or (sub)contractor of Isis.
Section 11.2 Indemnification of BMS. Isis agrees to defend BMS, its Affiliates, Licensees and their respective directors, officers, employees and agents, and their respective successors, heirs and assigns (collectively, the “BMS Indemnitees”), and shall indemnify and hold harmless the BMS Indemnitees, from and against any Losses and Third Party Claims brought against any BMS Indemnitee and resulting from or occurring as a result of: (a) any breach by Isis of its representations or warranties pursuant to this Agreement or (b) the gross negligence or willful misconduct of any Isis Indemnitee or any (sub)contractor of Isis in
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connection with this Agreement; except in any such case to the extent such Losses result from: (i) the gross negligence or willful misconduct of any BMS Indemnitee or (sub)contractor of BMS, (ii) any breach by BMS of any of its representations, warranties, covenants or obligations pursuant to this Agreement or under any agreement with a Third Party, or (iii) any breach of Applicable Law by any BMS Indemnitee or (sub)contractor of BMS.
Section 11.3 Notice of Claim. All indemnification claims provided for in Sections 11.1 and 11.2 shall be made solely by such Party to this Agreement (the “Indemnified Party”). The Indemnified Party shall give the indemnifying Party prompt written notice (an “Indemnification Claim Notice”) of any Losses or the discovery of any fact upon which the Indemnified Party intends to base a request for indemnification under Section 11.1 or 11.2, but in no event shall the indemnifying Party be liable for any Losses to the extent such Losses result from any delay in providing such notice. Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss is known at such time). The Indemnified Party shall furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses and Third Party Claims.
Section 11.4 Defense, Settlement, Cooperation and Expenses.
(a) Control of Defense. At its option, the indemnifying Party may assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within thirty (30) calendar days after the indemnifying Party’s receipt of an Indemnification Claim Notice. The assumption of the defense of a Third Party Claim by the indemnifying Party shall not be construed as an acknowledgment that the indemnifying Party is liable to indemnify the Indemnified Party in respect of the Third Party Claim, nor shall it constitute a waiver by the indemnifying Party of any defenses it may assert against the Indemnified Party’s claim for indemnification. Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the indemnifying Party. In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall as soon as is reasonably possible deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Third Party Claim. Should the indemnifying Party assume the defense of a Third Party Claim, except as provided in Section 11.4(b), the Indemnified Party shall be responsible for the legal costs or expenses subsequently incurred by such Indemnified Party in connection with the analysis, defense or settlement of the Third Party Claim. In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party shall reimburse the indemnifying Party for any and all costs and expenses (including attorneys’ fees and costs of suit) and any Third Party Claims incurred by the Indemnifying Party solely attributed to the defense of the Third Party Claim on behalf of the Indemnified Party (but not those costs and expenses otherwise attributable to the defense of the Indemnifying Party).
(b) Right to Participate in Defense. Without limiting Section 11.4(a), any Indemnified Party shall be entitled to participate in, but not control, the defense of such Third Party Claim and to employ counsel of its choice for such purpose; provided, however, that such employment shall be at the Indemnified Party’s own cost and expense unless (i) the employment thereof has been specifically authorized by the indemnifying Party in writing, (ii) the indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 11.4(a) (in which case the Indemnified Party shall control the defense) or (iii) the interests of the Indemnified Party and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of both Parties
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under Applicable Law, ethical rules or equitable principles in which case the indemnifying Party shall be responsible for any such costs and expenses of counsel for the Indemnified Party.
(c) Settlement. With respect to any Third Party Claims relating solely to the payment of money damages in connection with a Third Party Claim and that shall not admit liability or violation of Law on the part of the Indemnified Party or result in the Indemnified Party’s becoming subject to injunctive or other relief or otherwise adversely affecting the business of the Indemnified Party in any manner (such as granting a license or admitting the invalidity of a Patent Controlled by an Indemnified Party), and as to which the indemnifying Party shall have acknowledged in writing the obligation to indemnify the Indemnified Party hereunder, the indemnifying Party shall have the sole right to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss, on such terms as the indemnifying Party, in its sole discretion, shall deem appropriate. With respect to all other Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 11.4(a), the indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Loss provided it obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld). The indemnifying Party shall not be liable for any settlement or other disposition of a Loss by an Indemnified Party that is reached without the written consent of the indemnifying Party. Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, no Indemnified Party shall admit any liability with respect to or settle, compromise or discharge, any Third Party Claim without the prior written consent of the indemnifying Party, such consent not to be unreasonably withheld.
(d) Cooperation. Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall, and shall cause each other Indemnified Party to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access during normal business hours afforded to indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making Indemnified Parties and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder, and the indemnifying Party shall reimburse the Indemnified Party for all its reasonable out-of-pocket costs and expenses in connection therewith.
(e) Costs and Expenses. Except as provided above in this Section 11.4, the costs and expenses, including attorneys’ fees and expenses, incurred by the Indemnified Party in connection with any claim shall be reimbursed on a Calendar Quarter basis by the indemnifying Party, without prejudice to the indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.
Section 11.5 Insurance. Each Party shall maintain at its sole cost and expense, an adequate liability insurance or self-insurance program (including clinical trials and product liability insurance) to protect against potential liabilities and risk arising out of activities to be performed under this Agreement and any agreement related hereto and upon such terms (including coverages, deductible limits and self-insured retentions) as are customary in the U.S. pharmaceutical industry for the activities to be conducted by such Party under this Agreement. As applicable, BMS will name Isis as an additional insured and will upon request provide Isis
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with a certificate of insurance. BMS will promptly notify Isis of any material change in insurance or self-insurance coverage or lapse in coverage in that regard.
Section 11.6 Limitation of Liability. Neither Party hereto will be liable for indirect, incidental, consequential, special, exemplary, punitive or multiple damages arising in connection with this Agreement or the exercise of its rights hereunder, or for lost profits arising from or relating to any breach of this Agreement, regardless of any notice of such damages, provided however, that this Section 11.6 shall not limit or restrict (i) damages available for breaches of confidentiality obligations Article 7 and (ii) damages available for willful breaches of Article 12. In addition, the rights of termination by Isis under Section 9.4 and the effect of such termination as set forth in Sections 9.5 and 10.1 shall be Isis’s only remedy and BMS’s only liability with respect to or resulting from BMS’s breach of its obligations as set forth in Section 4.1.
ARTICLE 12 -
REPRESENTATIONS AND WARRANTIES
Section 12.1 Representations, Warranties and Covenants. Each Party hereby represents and warrants as of the Effective Date and covenants to the other Party that:
(a) it has the power and authority and the legal right to enter into this Agreement and perform its obligations hereunder, and that it has taken all necessary action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder;
(b) this Agreement has been duly executed and delivered on behalf of such Party and constitutes a legal, valid and binding obligation of such Party and is enforceable against it in accordance with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability is considered a proceeding at law or equity;
(c) all necessary consents, approvals and authorizations of all Regulatory Authorities and other parties required to be obtained by such Party in connection with the execution and delivery of this Agreement and the performance of its obligations hereunder have been obtained;
(d) the execution and delivery of this Agreement and the performance of such Party’s obligations hereunder (i) do not conflict with or violate any requirement of Applicable Law or any provision of the articles of incorporation, bylaws or any similar instrument of such Party, as applicable, in any material way, and (ii) do not conflict with, violate, or breach or constitute a default or require any consent not already obtained under, any contractual obligation or court or administrative order by which such Party is bound; and
(e) it has and will have enforceable written agreements with all of its employees who receive Confidential Information under this Agreement assigning to such Party ownership of all intellectual property rights created in the course of their employment.
Section 12.2 Isis Representations, Warranties, and Covenants. Isis hereby represents and warrants as of the Effective Date and covenants to BMS that:
(a) subject to the limitations set forth in Appendix 6, Isis has the sufficient legal and/or beneficial title and ownership or right to license (or sublicense as the case may be) with respect to the Isis Patent Rights as is necessary to fulfill its obligations under this Agreement and to grant the licenses (or sublicenses as the case may be) to BMS pursuant to this Agreement;
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(b) with respect to agreements between Isis and any Third Party existing on the Effective Date, the only financial Pass Through Obligations for Products utilizing MOE Gapmers are the [***] Royalties, which total [***]% of net sales for such Products;
(c) to the best of Isis’ knowledge, no actions, suits, claims, disputes, or proceedings concerning the Isis Patent Rights licensed hereunder are currently pending or are threatened in writing, that if determined adversely to Isis would have a material adverse effect on the Research Program or Isis’ ability to perform its obligations or to grant the licenses to BMS under this Agreement, or that would have a material adverse effect on or would impair BMS’ right to practice under the licenses granted under this Agreement by Isis to BMS;
(d) subject to the limitations set forth in Appendix 6, it has the ability to grant to BMS the licenses granted by Isis under this Agreement on the terms set forth herein;
(e) subject to the limitations set forth in Appendix 6, it is not currently subject to any agreement with any Third Party or to any outstanding order, judgment or decree of any court or administrative agency that restricts it in any way from granting to BMS the licenses granted by Isis under this Agreement on the terms set forth herein or the right of BMS to exercise such license rights;
(f) to its knowledge as of the Effective Date, all fees required to maintain the issued Isis Patent Rights set forth in the Appendices to this Agreement have been paid to date;
(g) subject to the limitations set forth in Appendix 6, it has not granted, or permitted to be attached, and it will not grant or permit to be attached during the term of the Agreement, any lien, security interest or other encumbrance with respect to the Isis Technology, Research Results or Program Inventions which would adversely effect the rights granted to BMS hereunder;
(h) to Isis’s knowledge, as of the Effective Date, the Isis Technology does not include any trade secrets that have been misappropriated from any Third Party or obtained in breach of any contractual obligation of Isis or its employees to a Third Party;
(i) subject to the limitations set forth in Appendix 6, Isis has not entered into any agreement pursuant to which it has agreed to transfer, whether by asset sale, operation of law or otherwise, title to any of the Isis Technology licensed to BMS hereunder;
(j) all inventors of any inventions of Patents which Isis has represented as being owned by Isis and included in the Isis Technology licensed to BMS hereunder have assigned or have a contractual obligation to assign their entire right, title and interest in and to such inventions and the corresponding Patents to Isis;
(k) it has no knowledge as of the Effective Date of claims to inventorship by persons not already listed as inventors with respect to the Product Specific Patent Rights;
(l) during the Term, Isis shall use commercially reasonable efforts to maintain and not to breach any agreements with Third Parties that provide a grant of rights from such Third Party to Isis that are Controlled by Isis and are licensed or become subject to a license from Isis to BMS under this Agreement; as of the Effective Date, Isis is in compliance in all material respects with any aforementioned agreements with Third Parties;
(m) it has not granted, and that during the Term that it will not grant, any license, option or other rights to Alnylam or any other Third Party with respect to any Product Specific Patents (with the exception of the material transfer agreements listed as number 35-37 in Appendix 6);
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(n) subject to the limitations set forth in Appendix 6, it has not granted any right, license or interest in or to, or an option to acquire any of the foregoing with respect to, the intellectual property rights licensed to BMS hereunder that is in conflict with the rights or licenses granted or to be granted to BMS under this Agreement; and
(o) it has disclosed to BMS all Third Party patents and patent applications of which Isis has knowledge as of the Effective Date that are believed by Isis to be potentially required for freedom-to-operate with respect to the manufacture, use or sale of MOE Gapmers targeting PCSK9.
Section 12.3 BMS Representation and Covenant. BMS hereby represents and covenants to Isis that:
(a) BMS has the requisite personnel, facilities, equipment, expertise, experience and skill to perform its obligations under this Agreement;
(b) BMS’ sales representatives will perform in a professional, timely, competent and efficient manner in the performance of its rights and obligations under this Agreement; and
(c) BMS, its Affiliates, and its Licensees will at all times comply with all Applicable Laws in the performance of its rights and obligations under this Agreement.
Section 12.4 DISCLAIMER OF WARRANTY. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS ARTICLE 12 AND IN SECTIONS 2.2, 5.5.1 AND 5.5.2, BMS AND ISIS MAKE NO REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND BMS AND ISIS EACH SPECIFICALLY DISCLAIM ANY OTHER WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.
ARTICLE 13 -
MISCELLANEOUS
Section 13.1 Assignment. Except as expressly set forth in this Agreement, without the prior written consent of the other Party hereto, neither Party will sell, transfer, assign, delegate, pledge or otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights or duties hereunder; provided, however, that (i) either Party hereto may assign or transfer this Agreement or any of its rights or obligations hereunder without the consent of the other Party to any Third Party with which it has merged or consolidated, or to which it has transferred all or substantially all of its assets or stock to which this Agreement relates if in any such event the Third Party assignee or surviving entity assumes in writing all of the assigning Party’s obligations under this Agreement or (ii) Isis may assign or transfer its rights under Article 5 (but no liabilities) to a Third Party in connection with a royalty factoring transaction. Any purported assignment or transfer in violation of this Section 13.1 will be void ab initio and of no force or effect.
Section 13.2 Severability. If any provision of this Agreement is held to be illegal, invalid or unenforceable by a court of competent jurisdiction, such adjudication will not affect or
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impair, in whole or in part, the validity, enforceability, or legality of any remaining portions of this Agreement. All remaining portions will remain in full force and effect as if the original Agreement had been executed without the invalidated, unenforceable or illegal part.
Section 13.3 Governing Law; Jurisdiction. This Agreement will be governed by and construed and enforced in accordance with the laws of the State of New York, USA without reference to any rules of conflicts of laws. Each of the Parties hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of any federal court of the United States of America sitting in the City of Chicago, Illinois and any appellate court from any jurisdiction thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the Parties hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in any such federal court in Chicago. For clarification, any dispute relating to the scope, validity, enforceability or infringement of any Patents shall be governed by and construed and enforced in accordance with the patent laws of the applicable jurisdiction.
Section 13.4 Dispute Resolution.
13.4.1 Resolution by Senior Representatives. The Parties shall seek to settle amicably any and all disputes, controversies or claims arising out of or in connection with this Agreement. Any dispute within the JRC’s decision-making authority shall be finally decided as set forth in Appendix 5. Any dispute between the Parties which is outside the JRC’s decision-making authority shall be promptly presented to the Alliance Managers and the JRC for resolution, and if the Alliance Managers and the JRC are unable to resolve such dispute, such dispute shall then be presented to the [***] of Isis (the “Senior Representatives”), or their respective designees, for resolution. Such Senior Representatives, or their respective designees, will meet in-person or by teleconference as soon as reasonably possible thereafter, and use their good faith efforts to mutually agree upon the resolution of the dispute, controversy or claim. If a dispute between the Parties arising out of or relating to the validity or interpretation of, compliance with, breach or alleged breach of or termination of this Agreement cannot be resolved within [***] days of presentation to the Senior Representatives, or their respective designees, for resolution, either Party may refer such dispute to binding arbitration to be conducted as set forth below in this Section 13.4. For clarification, any dispute relating to any Patent will not be subject to arbitration, and any dispute within the JRC’s decision-making authority will not be subject to arbitration.
13.4.2 Arbitration. If a dispute between the Parties arising out of or relating to the validity or interpretation of, compliance with, breach or alleged breach of or termination of this Agreement cannot, in accordance with Section 13.4.1, be resolved within ninety (90) days of presentation to the Senior Representatives, or their respective designees, for resolution, either Party may refer such dispute to binding arbitration to be conducted as set forth below in this Section 13.4.2.
(a) A Party may submit such dispute to arbitration by notifying the other Party, in writing, of such dispute. Within thirty (30) days after receipt of such notice, the Parties shall designate in writing a single arbitrator to resolve the dispute; provided, however, that if the Parties cannot agree on an arbitrator within such thirty (30) day period, the arbitrator shall be selected by the Chicago, Illinois office of the American Arbitration Association (the “AAA”) or, if such office does not exist or is unable to make a selection, by the office of the AAA nearest to Chicago, Illinois. For any disputed breach under Section 4.1 related to an alleged failure to use Commercially Reasonable Efforts as described in Section 4.1, the arbitrator shall be an individual with experience and expertise in the worldwide Development and Commercialization of
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pharmaceuticals and the business, legal and scientific considerations related thereto. Otherwise, the arbitrator shall be a lawyer knowledgeable and experienced in the Applicable Laws concerning the subject matter of the dispute. In any case the arbitrator shall not be an Affiliate, employee, consultant, officer, director or stockholder of either Party, or otherwise have any current or previous relationship with either Party or their respective Affiliates. The governing law in Section 13.3 shall govern any such proceedings. The language of the arbitration shall be English. No individual will be appointed to arbitrate a dispute pursuant to this Agreement unless he or she agrees in writing to be bound by the provisions of this 13.4.2. The place of arbitration will be Chicago, Illinois. Either Party may apply to the arbitrator for interim injunctive relief until the arbitration award is rendered or the controversy is otherwise resolved.
(b) Within sixty (60) days after the designation of the arbitrator, the arbitrator and the Parties shall meet, and each Party shall provide to the arbitrator a written summary of all disputed issues, such Party’s position on such disputed issues and such Party’s proposed ruling on the merits of each such issue.
(c) The arbitrator shall set a date for a hearing, which shall be no later than thirty (30) days after the submission of written proposals pursuant to Section 13.4.2(b), for the presentation of evidence and legal argument concerning each of the issues identified by the Parties. The Parties shall have the right to be represented by counsel. Except as provided herein, the arbitration shall be governed by the Commercial Arbitration Rules of the AAA applicable at the time of the notice of arbitration pursuant to Section 13.4.2(a); provided, however, that the Federal Rules of Evidence shall apply with regard to the admissibility of evidence in such hearing. In any such arbitration proceeding, the Parties shall be entitled to all remedies to which they would be entitled in a United States District Court and to full discovery to the same degree permitted under the Federal Rules of Civil Procedure, including monetary damages and injunctive relief, provided that the arbitrator may not order the granting or termination of licenses or assign rights to a Product to either of the Parties.
(d) The arbitrator shall use his or her best efforts to rule on each disputed issue within thirty (30) days after completion of the hearing described in Section 13.4.2(c). The determination of the arbitrator as to the resolution of any dispute shall be binding and conclusive upon all Parties. All rulings of the arbitrator shall be in writing and shall be delivered to the Parties as soon as is reasonably possible. Nothing contained herein shall be construed to permit the arbitrator to award punitive, exemplary or any similar damages. The arbitrator shall render a “reasoned decision” within the meaning of the Commercial Arbitration Rules which shall include findings of fact and conclusions of law. The Parties undertake to satisfy any award without delay.
(e) The (i) attorneys’ fees of the Parties in any arbitration, (ii) fees of the arbitrator and (iii) costs and expenses of the arbitration shall be borne by the Parties in a proportion determined by the arbitrator.
(f) Any arbitration pursuant to this Section 13.4 shall be conducted in Chicago, Illinois, unless the Parties otherwise agree to a different location. Any arbitration award may be entered in and enforced by a court in accordance with Section 13.3.
(g) Notwithstanding anything in this Section 13.4, each Party shall have the right to seek injunctive or other equitable relief from a court of competent jurisdiction pursuant to Section 13.3 that may be necessary to avoid irreparable harm, maintain the status quo or preserve the subject matter of the arbitration.
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(h) The Parties agree that any payments that are made by one Party to the other Party pursuant to this Agreement pending resolution of any dispute shall be promptly refunded if an arbitrator or court determines pursuant to this Section 13.4.2 that such payments are to be refunded by one Party to the other Party.
(i) The Parties intend, and will take all reasonable action as is necessary or desirable to ensure, that there be a speedy resolution to any dispute which becomes the subject of arbitration, and the arbitrator will conduct the arbitration so as to resolve the dispute as expeditiously as possible.
(j) Except to the extent necessary to confirm an award or as may be required by Applicable Law, neither a Party nor an arbitrator may disclose the existence, content, or results of an arbitration without the prior written consent of both Parties. In no event will an arbitration be initiated after the date when commencement of a legal or equitable proceeding based on the dispute, controversy or claim would be barred by the applicable Delaware statute of limitations.
(k) Disputes Regarding Material Breach. If the Parties are in dispute as to whether one Party is in material breach of this Agreement, then the arbitrator will first determine if material breach has in fact occurred, and if so, will grant the defaulting Party the cure period provided pursuant to Section 9.3 (or 10.2, as applicable). If the material breach is not cured within the time period provided pursuant to Section 9.3 (or 10.2, as applicable), the arbitration will continue and the arbitrator will, as part of the same arbitration, award actual direct damages to the non-defaulting Party.
Section 13.5 Notices. Except as otherwise provided for in this Agreement, all notices or other communications that are required or permitted hereunder will be in writing and delivered personally with acknowledgement of receipt, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier as provided herein), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:
If to BMS, to:
| | Bristol-Myers Squibb Company |
| | P.O. Box 4000 |
| | Route 206 & Province Line Road |
| | Princeton, NJ 08543-4000 |
| | Attention: Vice President, Business Development |
| | Telephone: 609-252-4418 |
| | Facsimile: 609-252-7128 |
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| With copy to: |
| | Bristol-Myers Squibb Company |
| | P.O. Box 4000 |
| | Route 206 and Province Line Road |
| | Princeton, NJ 08543-4000 |
| | Attention: Vice President and Senior Counsel, Corporate &
Business Development |
| | Phone: 609-252-5328 |
| | Facsimile: 609-252-4232 |
If to Isis, to:
| | Isis Pharmaceuticals, Inc. |
| | 1896 Rutherford Road |
| | Carlsbad, California 92008 |
| | Attention: Executive Vice President and CFO |
| | Facsimile: (760) 603-4650 |
| With a copy to: |
| | Attention: General Counsel |
| | Facsimile: (760) 268-4922 |
or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith. Any such communication will be deemed to have been given (i) when delivered, if personally delivered or sent by facsimile on a Business Day, (ii) on the Business Day after dispatch, if sent by nationally-recognized overnight courier, and (iii) on the third Business Day following the date of mailing, if sent by mail. It is understood and agreed that this Section 13.5 is not intended to govern the day-to-day business communications necessary between the Parties in performing their duties, in due course, under the terms of this Agreement.
Section 13.6 Entire Agreement; Modifications. This Agreement (including the attached Appendices and the Research Plan) sets forth and constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and all prior agreements, understanding, promises and representations, whether written or oral, with respect thereto are superseded hereby. Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically set forth herein. No amendment, modification, release or discharge will be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties.
Section 13.7 Headings. The headings of Articles and Sections of this Agreement are for ease of reference only and shall not affect the meaning or interpretation of this Agreement in any way.
Section 13.8 Relationship of the Parties. It is expressly agreed that the Parties will be independent contractors of one another and that the relationship between the Parties will not constitute a partnership, joint venture or agency.
Section 13.9 Waiver. Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such waiver will be effective unless
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set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. Any such waiver will not be deemed a waiver of any other right or breach hereunder.
Section 13.10 Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument.
Section 13.11 No Benefit to Third Parties. The representations, warranties, covenants and agreements set forth in this Agreement are for the sole benefit of the Parties hereto and their successors and permitted assigns, and they will not be construed as conferring any rights on any other parties.
Section 13.12 Further Assurances. Each Party will duly execute and deliver, or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and instruments, as may be necessary to carry out the provisions and purposes of this Agreement.
Section 13.13 Force Majeure. Neither Party will be charged with any liability for delay in performance of an obligation under this Agreement to the extent such delay is due to a cause beyond the reasonable control of the affected Party, such as war, riots, labor disturbances, fire, explosion, and compliance in good faith with any governmental Law, regulation or order. The Party affected will give prompt written notice to the other Party of any material delay due to such causes.
Section 13.14 Interpretation.
(a) Each of the Parties acknowledges and agrees that this Agreement has been diligently reviewed by and negotiated by and between them, that in such negotiations each of them has been represented by competent counsel and that the final agreement contained herein, including the language whereby it has been expressed, represents the joint efforts of the Parties hereto and their counsel. Accordingly, in the event an ambiguity or a question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any provisions of this Agreement.
(b) The definitions of the terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and effect as the word “shall”. The word “any” shall mean “any and all” unless otherwise clearly indicated by context.
(c) Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or therein), (ii) any reference to any Applicable Laws herein shall be construed as referring to such Applicable Laws as from time to time enacted, repealed or amended, (iii) any reference herein to any person shall be construed to include the person’s successors and assigns, (iv) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, and (v) all references herein to Articles, Sections or Appendices, unless
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otherwise specifically provided, shall be construed to refer to Articles, Sections and Appendices of this Agreement.
(d) References to sections of the Code of Federal Regulations and to the United States Code shall mean the cited sections, as these may be amended from time to time.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the date first above written.
Isis Pharmaceuticals, Inc. | | |
| | |
| | |
By: | /s/ B. Lynne Parshall | | |
| | |
Name: | B. Lynne Parshall | | |
| | |
Title: | Executive Vice President & CFO | | |
| | |
| | |
| | |
Bristol-Myers Squibb Company | | |
| | |
| | |
By: | /s/ Andrew Bonfield | | |
| | |
Name: | Andrew Bonfield | | |
| | |
Title: | EVP & CFO | | |
| | | | | |
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APPENDIX 1
DEFINITIONS
“Additional Third Party Agreement” has the meaning set forth in Section 5.5.
“Affiliate” of an entity means any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such first entity. For purposes of this definition only, “control” (and, with correlative meanings, the terms “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct the management or policies of an entity, whether through the ownership of voting securities or by contract relating to voting rights or corporate governance.
“Agreement” means this Collaboration and License Agreement, together with all Appendices attached hereto and the Research Plan, as the same may be amended or supplemented from time to time in accordance with the terms of this Agreement.
“Alliance Manager” has the meaning set forth in Section 3.12.
“Applicable Law” or “Law” means all applicable laws, statutes, rules, regulations and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision, agency or other body, domestic or foreign, including but not limited to any applicable rules, regulations, guidelines, or other requirements of the Regulatory Authorities that may be in effect from time to time, but excluding patent laws.
“Approval” means, with respect to any Product in any regulatory jurisdiction, approval from the applicable Regulatory Authority sufficient for the manufacture, distribution, use and sale of the Product in such jurisdiction in accordance with Applicable Laws. In jurisdictions where the applicable Regulatory Authority sets the pricing authorizations necessary for a Product, Approval will be deemed to have occurred even if the final approval to market and sell the Product is being withheld because BMS (or its Affiliates or Licensee) and the Regulatory Authority have not yet determined pricing so long as all other approvals, licenses, registrations or authorizations necessary for marketing, sale, and/or use of such Product in such jurisdiction have been obtained.
“API” means the bulk active pharmaceutical ingredient Compound manufactured in accordance with cGMP for a Product. References to the weight of a quantity of API refer to the gross mass of the API after lyophilization.
“ASO” means an [***] of such gene target.
“BMS” means Bristol-Myers Squibb Company.
“BMS Materials” has the meaning set forth in Section 3.10.
“BMS Third Party Payment” has the meaning set forth in 5.5.3.
“Business Day” means any day, other than Saturday, Sunday or any statutory holiday in the United States.
“Calendar Quarter” means the respective periods of three consecutive calendar months ending on March 31, June 30, September 30 and December 31.
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“Calendar Year” means each successive period of 12 months commencing on January 1 and ending on December 31.
“Clinical Supply Agreement” has the meaning set forth in Section 4.3.
“Combination Product” means a Product that includes at least one additional active ingredient (whether coformulated or copackaged) which is not a Compound.
“Commercialize”, “Commercializing” and “Commercialization” means activities directed to manufacturing, obtaining pricing and reimbursement approvals, carrying out Phase IV Trials for, marketing, promoting, distributing, importing or selling a Product.
“cGMP” or “GMP” means current Good Manufacturing Practices as specified in the United States Code of Federal Regulations, ICH Guideline Q7A, or equivalent laws, rules, or regulations of an applicable Regulatory Authority at the time of manufacture.
“Commercially Reasonable Efforts” means, with respect to a Compound and Product, the carrying out of Development or Commercialization activities using good faith commercially reasonable and diligent efforts, using the efforts that the applicable Party would reasonably devote to a compound or product of similar market potential or profit potential at a similar stage in development or product life resulting from its own research efforts, based on conditions then prevailing and taking into account, without limitation, issues of safety and efficacy, regulatory authority-approved labeling, product profile, the competitiveness of alternative products in the marketplace, the likely timing of the product’s entry into the market, the patent and other proprietary position, the likelihood of regulatory approval and other relevant scientific, technical and commercial factors.
“Compound” means any ASO, or a conjugate or prodrug thereof, that modulates the expression of PCSK9 and [***] mRNA or pre-mRNA and that:
(a) is specifically identified by Isis in the performance of the Research Program; or
(b) is within the scope of a Valid Claim of a Patent Controlled by Isis or its Affiliates; or
(c) is identified by BMS during the period ending on the [***] year anniversary of the end of the Research Term through use of technology Covered by a Valid Claim of the Isis Patent Rights and/or use of the Isis Confidential Information.
“Confidential Information” means all information and Know-How and any tangible embodiments thereof provided by or on behalf of the Disclosing Party to the Receiving Party either in connection with the discussions and negotiations pertaining to this Agreement or in the course of performing this Agreement, including without limitation 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; regardless of whether any of the foregoing are marked “confidential” or “proprietary” or communicated to the other by the Disclosing Party in oral, written, graphic or electronic form. For all purposes of this Agreement, the Research Results (for so long as and to the extent BMS has rights hereunder) shall be treated as being Confidential Information of both Parties. Accordingly, each Party shall be considered the Receiving Party with respect to the Research Results and shall be subject to all of the
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restrictions and obligations of this Agreement with respect to the disclosure and use of such Research Results to the same extent as applicable to Confidential Information disclosed to such Party by the other Party.
Notwithstanding the foregoing, information or Know-How of a Party will not be deemed Confidential Information for purposes of this Agreement to the extent that the Receiving Party can show by competent proof that such information or Know-How:
(a) was already known to the Receiving Party or any of its Affiliates, without any obligation to the Disclosing Party to keep it confidential or restricting its use, prior to 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 the 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 or any of its Affiliates by a Third Party lawfully in possession thereof, and was not obtained indirectly or directly from the Disclosing Party or in connection with the Research Program; or
(e) was independently discovered or developed outside of the Research Program by employees or (sub)contractors of the Receiving Party or any of its Affiliates, without the aid, application or use of Confidential Information of the Disclosing Party.
“Control” means, with respect to any Know-How, Patent or other intellectual property right, possession by a Party (including its Affiliates) of the right (whether by ownership, license or otherwise) to grant to the other Party access, ownership, a license, sublicense and/or other right to or under such Know-How, Patent or other intellectual property right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party. Notwithstanding anything to the contrary under this Agreement, with respect to any Third Party that later becomes an Affiliate of Isis after the Effective Date (including a Third Party acquirer), no intellectual property of such Third Party will be included in the licenses granted hereunder by virtue of such Third Party becoming an Affiliate of Isis, in each case where such intellectual property (1) exists at the time such Third Party became an Affiliate of Isis or (2) (i) is created by such Third Party after it becomes an Affiliate and (ii) does not otherwise qualify as a Product Specific Patent or Isis Core Technology Patent.
“Cover”, “Covered” or “Covering” means, with respect to a Patent, that, but for rights granted to a Person under such Patent, the practice by such Person of an invention claimed in such Patent would infringe a Valid Claim included in such Patent, or in the case of a Patent that is a patent application, would infringe a Valid Claim in such patent application if it were to issue as a patent.
“Development” means non-clinical and clinical drug discovery, research and/or development activities reasonably related to or leading to the development and submission of information to a Regulatory Authority, including, without limitation, compound screening, medicinal chemistry, chemical synthesis, toxicology, pharmacology and other discovery and pre-clinical efforts, test method development and stability testing, manufacturing process
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development, formulation development, delivery system development, quality assurance and quality control development, manufacturing, statistical analysis, and clinical studies. When used as a verb, “Develop” means to engage in Development.
“Disclosing Party” has the meaning set forth in Section 7.1.
“Dollars” or “$” means the lawful currency of the United States.
“ECN” means a Compound that has been designated as an Early Candidate Nomination by BMS, such that such Compound has been shown to meet the internal standards and criteria established by BMS to qualify such Compound for full pre-clinical development, which standards and criteria are consistent with those customarily used by BMS for its other drug development projects. Such designation corresponds to what is referred to internally by BMS as BMS’s [***].
“Effective Date” means the date specified in the initial paragraph of this Agreement.
“EMEA” means the European Regulatory Authority known as the European Medicines Agency and any successor agency thereto.
“EU” means the European Union, as its membership may be altered from time to time, and any successor thereto, and which, as of the Effective Date, consists of Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and the United Kingdom, and that certain portion of Cyprus included in such organization.
“FDA” means the United States Food and Drug Administration and any successor agency thereto.
“Field” means all indications and uses, including but not limited to the prevention, treatment, diagnosis and/or control of any disease, disorder or condition in humans.
“First Commercial Sale” means the first sale of a Product by BMS, its Affiliates or a Licensee to a Third Party in a particular country after Approval of such Product has been obtained in such country.
“FTE” means the equivalent of the work of one (1) employee working on a dedicated full time basis for one (1) year (consisting of at least a total of [***] hours per year of dedicated effort, excluding vacations and holidays) of work on or directly related to the Research Plan, carried out by an Isis employee, or Third Party mutually agreed upon by the JRC. Overtime will not be counted toward the number of hours that are used to calculate the FTE contribution. No one person will be permitted to account for more than [***] hours of FTE contribution per year. Any person who devotes less than [***] hours per year shall be treated as an FTE on a pro-rata basis, based upon the actual number of hours worked divided by [***]. Scientific work performed in the performance of the Research Program by an Isis FTE (or a Third Party FTE mutually agreed upon by the JRC) may include, but is not limited to, experimental laboratory work, recording and writing up results, reviewing literature and references, and holding scientific discussions.
“FTE Rate” means the rate that BMS will fund Isis FTEs which is $[***] per FTE per year for the initial Calendar Year of the Research Term, and such FTE rate will [***] by a factor [***] per annum starting as of the beginning of the 2nd Calendar Year of the Research Term (i.e.,
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beginning in 2008) and each Calendar Year thereafter during the Research Term, provided that any such [***] shall not [***] [***]% per annum.
“GAAP” means generally accepted accounting principles of the United States consistently applied.
“Generic Product(s)” means a product or products containing an active ingredient having the same or substantially the same chemical structure as the Compound contained in a Product, whether approved under an NDA, ANDA, an application under 505(b)(2), or any equivalent thereof, or otherwise by a Regulatory Authority.
“[***] Royalties” means the royalty obligations of Isis, if any, applicable with respect to a Product under Isis’ agreement with [***], Inc. dated [***] and Isis’ agreement with [***].
“IMS” means IMS America Ltd. of Plymouth Meeting, Pennsylvania or any successor to thereof, or any other independent pharmaceutical sales auditing firm reasonably agreed upon by the Parties.
“IND” means an Investigational New Drug Application (as defined in the Food, Drug and Cosmetic Act, as amended) filed with the FDA or its foreign counterparts.
“IND Acceptance” means the acceptance (or deemed acceptance) of the filing of an IND by the applicable Regulatory Authority.
“IND-Enabling Studies” means the pharmacokinetic and toxicology studies required to meet the regulations for filing an IND.
“Initiation of Phase II Trial” means the first dosing of Product in a human patient in a Phase II Trial.
“Initiation of Phase III Trial” means the first dosing of Product in a human patient in a Phase III Trial. In the case where a Phase IIb/III Trial precedes any Phase III Trial for a given Product, the first dosing of such Product in a human patient following the review of interim data and decision to extend the period of such Phase IIb/III Trial in order to provide sufficient evidence of safety and efficacy to be included as a Phase III Trial in filings with Regulatory Authorities shall be deemed to be the “start of Phase III Trial” for such Product.
“Isis Core Technology Patents” means Patents Controlled by Isis or its Affiliates on the Effective Date and/or at any time through the period ending on the [***] year anniversary of the expiration of the Research Term, in each case that are [***] for the Development and Commercialization of Compound and Products; provided however, that for any such Patents that include Pass Through Obligations, the provisions of Section 5.5 will govern whether such Patent will be included as an Isis Core Technology Patent. In addition, Isis Core Technology Patents shall exclude the Product Specific Patents and the Isis Manufacturing Patents. A representative list of the Isis Core Technology Patents as of the Effective Date are listed in Appendix 3 hereto. For clarification, any Isis Program Patent Rights or any Joint Patent satisfying the definition above, will be considered an Isis Core Technology Patent. For clarification, any such Isis Core Technology Patent that qualifies as an Isis Core Technology Patent on the [***] year anniversary of the expiration of the Research Term will remain an Isis Core Technology Patent throughout the Term of the Agreement.
“Isis In-License Agreements” has the meaning set forth in Section 5.5.1.
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“Isis Inventions” has the meaning set forth in Section 8.1.
“Isis Know-How” means all Know-How that encompass or relate to any Compounds or Products or that are otherwise useful for the research, discovery, Development, manufacturing and commercialization of Compounds and/or Products in the Field that are Controlled by Isis or its Affiliates as of the Effective Date and/or at any time through the period ending on the [***] year anniversary of the expiration of the Research Term (including but not limited to all chemical, biological and structure activity relationship information relating to Compounds). The Isis Know-How shall include the Research Results. For clarification, any such Isis Know-How shall remain Isis Know-How after the [***] year anniversary of the expiration of the Research Term throughout the Term of the Agreement
“Isis Manufacturing Patents” means Patents Controlled by Isis or its Affiliates on the Effective Date and/or [***], in each case that claim methods and materials used in the synthesis of ASOs; provided however, that for any such Patents that include Pass Through Obligations, the provisions of Section 5.5 will govern whether such Patent will be included as an Isis Manufacturing Patent. A representative list of Isis Manufacturing Patents is attached hereto as Appendix 4. Isis Manufacturing Patents shall exclude the Product Specific Patents and the Isis Core Technology Patents. For clarification, any Isis Program Patent Rights or any Joint Patent satisfying the definition above, will be considered an Isis Manufacturing Patent.
“Isis Manufacturing Technology” means the Isis Know-How and Isis Manufacturing Patents claiming inventions made on or after the Effective Date solely to the extent necessary or useful to manufacture a Compound and/or Product by or for BMS (or its Affiliate or Licensee).
“Isis Patent Rights” means the Isis Core Technology Patents, the Product Specific Patents and the Isis Manufacturing Patents.
“Isis Permitted Manufacturing Technology” means (i) the Isis Know-How and Isis Manufacturing Patents claiming inventions made [***] the Effective Date solely to the extent necessary or useful to manufacture a Compound and/or Product for and on behalf of BMS (or its Affiliate or Licensee) and (ii) the Isis Know-How [***] the Effective Date and Isis Manufacturing Patents [***] the Effective Date solely to the extent necessary to manufacture a Compound and/or Product for and on behalf of BMS (or its Affiliate or Licensee).
“Isis Program Patent Rights” has the meaning set forth in Section 8.1.
“Isis Technology” means collectively the Isis Know-How and the Isis Patent Rights.
“Joint Invention” has the meaning set forth in Section 8.1
“Joint Patent” means any Patent that claims, and only to the extent that it claims, a Joint Invention(s).
“Joint Research Committee” or “JRC” has the meaning set forth in Section 3.3.
“JRC Charter” has the meaning set forth in Section 3.3.
“JNDA” means a New Drug Application filed with the Koseisho required for marketing approval for the applicable Product in Japan.
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“JNDA Approval” means the Approval of a JNDA by the Koseisho for the applicable Product in Japan.
“Know-How” means technical information and materials, including without limitation, technology, software, instrumentation, devices, data, biological materials, assays, constructs, compounds, inventions, practices, methods, knowledge, know-how, trade secrets, skill and experience.
“Koseisho” means the Japanese Ministry of Health and Welfare, or any successor agency thereto.
“Licensee” means any Third Party which is sublicensed by BMS or any of its Affiliates to market and sell Product, but shall not include any wholesaler or distributor.
“Losses” has the meaning set forth in Section 11.1.
“Major European Country” means France, Germany, Italy, Spain or the United Kingdom.
“MAA Approval” shall be achieved upon receiving the first Approval for the applicable Product in any of the Major European Countries.
“MAA Filing” means filing with the EMEA of a marketing authorization application (“MAA”) for the applicable Product under the centralized European procedure. If the centralized EMEA filing procedure is not used, MAA Filing will be achieved upon the first filing of an MAA for the applicable Product in any Major European Country.
“MOE Gapmer” means a single stranded ASO of less than [***] nucleotides (i) wherein [***] backbone linkages are modified by substituting a sulfur at the non-bridging oxygen (phosphorothioate) and (ii) comprising a region of at least [***] unsubstituted 2’ deoxy nucleotides with the remaining nucleotides having a 2’-O-(methoxyethyl) substitution at the 2’ position.
“NDA” means a New Drug Application filed with the FDA after completion of clinical trials to obtain marketing approval for the applicable Product in the United States.
“NDA Approval” means the Approval of an NDA by the FDA for the applicable Product in the U.S.
“NDA Filing” means the acceptance by the FDA of the filing of an NDA for the applicable Product.
“Net Sales” means, with respect to any Product, the amount billed by BMS, an Affiliate of BMS, or any permitted Licensee for sales of such Product in arm’s length transactions to Third Parties, after deduction (if not already deducted in the amount invoiced) of the following items with respect to sales of such Product:
(a) trade, cash, and/or quantity discounts, retroactive price reductions, charge-back payments and rebates actually taken and allowed, including discounts or rebates to governmental or managed care organizations;
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(b) credits or allowances given or recorded for rejection or return of previously sold Product (including, without limitation, returns of Product in connection with recalls or withdrawals);
(c) freight out, postage, shipping and insurance charges actually incurred for delivery of such Product;
(d) any tax, tariff, duty or government charge (including any tax such as a value added or similar tax or government charge other than an income tax) levied on the sale, transportation or delivery of a Product and borne by the seller thereof without reimbursement from any Third Party; and
(e) amounts written off by reason of uncollectible debt.
Net Sales and all of the foregoing deductions from the gross invoiced sales prices of Product shall be determined in accordance with BMS’s standard accounting procedures and in accordance with GAAP. In the event that BMS, its Affiliates or Licensees make any adjustments to such deductions after the associated Net Sales have been reported pursuant to this Agreement, the adjustments shall be reported and reconciled with the next report and payment of any royalties due. In the case of any Combination Product sold in the Territory, Net Sales for such Combination Product shall be calculated by multiplying actual Net Sales of such Combination Product by the fraction A/(A+B) where A is the invoice price of the Product if sold separately without the other active ingredient(s), and B is the total invoice price of the other active ingredient(s) in the Combination Product, if sold separately. If, on a country-by-country basis, such other active ingredient(s) in the Combination Product are not sold separately in said country, Net Sales for the purpose of determining royalties of the Combination Product shall be calculated by multiplying actual Net Sales of such Combination Product by the fraction A/D, where A is the invoice price of the Product if sold separately, and D is the invoice price of the Combination Product. If neither the Product nor such other active ingredient(s) are sold separately in a given country, the Parties shall in good faith, determine Net Sales for such Combination Product by mutual agreement.
In the event, in a particular country, BMS or any of its Affiliates sells a Product to an unaffiliated distributor or wholesaler at a price that is less than an arm’s length price and such distributor or wholesaler pays BMS or its Affiliates any additional amount related to such sale, then BMS will adjust such selling price for purposes of calculating Net Sales so as to bring it to an arm’s length basis.
Net Sales shall not include (x) any payments among BMS, its Affiliates and Licensees, unless such paying party is the end user of the relevant Product or (y) any payments in consideration of supplies of the applicable Product for use in clinical trials.
“Objective” has the meaning set forth in Section 3.1.
“Pass Through Royalties” means any royalty on net sales of Product that becomes payable by Isis to a Third Party under an Isis In-License Agreement with respect to a Product Developed and Commercialized by BMS under this Agreement, where such royalty obligation is based on the manufacture, use or sale of the Product being Covered by an Isis Patent Right licensed to BMS under Section 2.1 which Isis Patent Right is licensed to Isis under such Isis In-License Agreement.
“Pass Through Obligations” means any development milestone payment or royalty on net sales of Product that becomes payable by Isis to a Third Party under an Isis In-License
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Agreement with respect to a Product Developed and Commercialized by BMS under this Agreement or any or other non-financial obligation, where such milestone payment, royalty payment or other obligation is based on the manufacture, use or sale of the Product being Covered by an Isis Patent Right licensed to BMS under Section 2.1 which Isis Patent Right is licensed to or acquired by Isis under such Isis In-License Agreement. Pass Through Obligations includes any Pass Through Royalties.
“Patents” means (a) patents and patent applications in any country or jurisdiction, (b) all priority applications, divisionals, continuations, and continuations-in-part of any of the foregoing, and (c) all patents issuing on any of the foregoing patent applications, together with all registrations, reissues, renewals, re-examinations, confirmations, supplementary protection certificates, and extensions of any of (a), (b) or (c).
“PCSK9” means proprotein convertase subtilisin/kexin type 9 (GenBank accession # NM_174936.2), or any [***], mutants, polymorphisms and fragments thereof.
“Permitted License” means a license granted by Isis to a Third Party (i) under the Isis Core Technology Patents or the Isis Manufacturing Patents (but not under the Product Specific Patents) to use ASOs (or supply ASOs to end users) [***] solely to conduct Research, or (ii) under the Isis Manufacturing Patents (but not under [***] Product Specific Patents) to enable such Third Party to [***] ASOs, where such Third Party is primarily engaged in providing contract manufacturing or services and is not engaged in drug discovery, development or commercialization; provided further, that any such license under clause (i) and (ii) shall be limited to patent claims that are generally [***] in general, and do not relate to any [***] sequence. For avoidance of doubt, Permitted License shall not include any license specific to any Compound or Product or under any Patent claim directed to or specific to any Compound or Product (including the use or manufacture thereof).
“Person” means any individual, firm, corporation, partnership, limited liability company, trust, business trust, joint venture company, governmental authority, association or other entity.
“Phase II Trial” means a human clinical trial of a Product, the principal purpose of which is a determination of preliminary short-term safety and efficacy in the target patient population, as described in 21 C.F.R. 312.21(b) for the United States, or a similar clinical study prescribed by the Regulatory Authorities in a foreign country.
“Phase IIb Trial” means a Phase II Trial, designed to support and immediately precede the initiation of a Phase III Trial program without any further Phase II Trials, to evaluate the dose-dependent effectiveness of a pharmaceutical product for a particular indication or indications in patients with the disease or condition under study and to determine the common side effects and risks associated with the pharmaceutical product.
“Phase IIb/III Trial” means a human clinical trial of a Product, the principal purpose of which is a further determination of efficacy and safety, in the target population, at the intended clinical dose or doses or range of doses, on a sufficient number of subjects and for a sufficient period of time to confirm the optimal manner of use of the Product (dose and dose regimen) prior to initiation of the pivotal Phase III Trials, and which itself provides sufficient evidence of safety and efficacy to be included as a Phase III Trial in filings with Regulatory Authorities.
“Phase III Trial” means a human clinical trial of a Product on a sufficient number of subjects that is designed to establish that a pharmaceutical product is safe and efficacious for its intended use, and to determine warnings, precautions and adverse reactions that are associated
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with such pharmaceutical product in the dosage range to be prescribed, which trial is intended to support Approval of a Product, as described in 21 C.F.R. 312.21(c) for the United States, or a similar clinical study prescribed by the Regulatory Authorities in a foreign country.
“Phase IV Trial” means a human clinical trial for a Product commenced after receipt of Approval in the country for which such trial is being conducted and that is conducted within the parameters of the Approval for the Product. Phase IV Trials may include, without limitation, epidemiological studies, modeling and pharmacoeconomic studies, investigator sponsored clinical trials of Product and post-marketing surveillance studies.
“Prior Third Party Agreements” means certain licenses granted prior to the Effective Date by Isis to Third Parties under a Patent Controlled by Isis under an agreement included in the agreements listed in Appendix 6.
“Product” means any pharmaceutical product containing a Compound (alone or with other active ingredients), in all forms, presentations, formulations and dosage forms.
“Product Specific Patents” means all Patents (including all claims and the entire scope of claims therein) Controlled by Isis or its Affiliates on the Effective Date and/or at any time through the period ending on the [***] year anniversary of the expiration of the Research Term, in each case claiming inventions specifically directed to any Compounds or Products, including but not limited to patents and patent applications specifically claiming such Compounds or Products, methods of using such Compounds or Products, methods and materials specific to the synthesis of such Compounds or Products, and methods and materials specific to formulating and administering such Compounds or Products (including by way of example and without limitation, such Patents claiming (a) the sequence or a portion thereof corresponding to the PCSK9 gene sequence or a portion thereof, (b) the specific composition of matter of a Product, (c) methods of using a Product as a therapeutic or (d) methods of using a Compound as a therapeutic); provided however, that (x) for any such Patents that include Pass Through Obligations, the provisions of Section 5.5 will govern whether such Patent will be included as an Product Specific Patent Right and (y) unless the Parties otherwise agree in writing, Patents that include claims that are directed to subject matter and have a scope that is applicable to ASOs in general, and not specifically directed to a Compound or Product, shall be considered to be Isis Core Technology Patents (or Isis Manufacturing Patents, as applicable). For clarification, any Isis Program Patent Rights or any Joint Patent satisfying the definition above, will be considered a Product Specific Patent. The Product Specific Patents as of the Effective Date are listed in Appendix 2 attached hereto. For clarification, any such Product Specific Patent qualifying as a Product Specific Patent on the [***] year anniversary of the expiration of the Research Term shall remain a Product Specific Patent throughout the Term of the Agreement.
“Program Inventions” has the meaning set forth in Section 8.1.
“Program Leader” has the meaning set forth in Section 3.3.
“Program Patent Rights” has the meaning set forth in Section 8.1.
“Proof of Concept” means that a Compound or Product has demonstrated sufficient short-term safety and efficacy in a Phase II Trial to warrant the initiation of Phase IIb Trials (or, as applicable, the extension of a Phase II Trial into the Phase IIb Trial portion of the trial). For purposes of clarification, the dosing of the first human in a Phase IIb Trial (or, as applicable, in the Phase IIb Trial portion of a Phase II Trial) for a Product or Compound will conclusively demonstrate the achievement of Proof of Concept for such Compound or Product.
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“Ready for Pivotal Quality Trials” means that a Compound or Product has demonstrated sufficient safety profile and dose-dependent effectiveness for a particular indication(s) in Phase IIb Trials (or, as applicable, a Phase IIb/III Trial) to warrant the initiation of Phase III Trials (or, as applicable, the extension of the Phase IIb/III Trial into the the Phase III Trial portion of the Phase IIb/III Trial). For purposes of clarification, the dosing of the first human in a Phase III Trial (or, as applicable, in the Phase III Trial portion of a Phase IIb/III Trial) for a Product or Compound will conclusively demonstrate that such Compound or Product is Ready for Pivotal Quality Trials.
“Receiving Party” has the meaning set forth in Section 7.1.
“Regulatory Authority” means any governmental authority, including without limitation FDA, EMEA or Koseisho (i.e., the Japanese Ministry of Health and Welfare, or any successor agency thereto), that has responsibility for granting any licenses or approvals or granting pricing and/or reimbursement approvals necessary for the marketing and sale of a Product in any country.
“Regulatory Documentation” means all applications, registrations, licenses, authorizations and approvals (including all 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.
“Research” means pre-clinical research including gene function, gene expression and target validation research, which may include small pilot toxicology studies but excludes IND-Enabling Studies, clinical development and commercialization.
“Research Plan” has the meaning set forth in Section 3.4.
“Research Program” has the meaning set forth in Section 3.1.
“Research Program Costs” has the meaning set forth in Section 3.5.
“Research Results” means all data, information, trade secrets, inventions and Know-How which are discovered, made, reduced to practice, identified or developed in whole or in part by Isis in the course of the performance of the Research Program.
“Research Term” will have the meaning set forth in Section 3.2.
“Research Year” means each 12 month period during the Research Term, with the first Research Year beginning on the Effective Date.
“Royalty Term” has the meaning set forth in Section 5.9.
“Senior Representatives” has the meaning set forth in Section 13.4.
“Term” has the meaning set forth in Section 9.1.
“Territory” means all countries and jurisdictions throughout the world.
“Third Party” means any Person other than Isis or BMS or their respective Affiliates.
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“Valid Claim” means either (a) a claim of an issued and unexpired patent which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal and that is not admitted to be invalid or unenforceable through reissue, disclaimer or otherwise (i.e., only to the extent the subject matter is disclaimed or is sought to be deleted or amended through reissue), or (b) a claim of a pending patent application that has not been abandoned, finally rejected or expired without the possibility of appeal or refiling, provided however, that (x) Valid Claim will exclude any such pending claim in an application that has not been granted within [***] following the [***] filing date for such application (unless and until such claim is granted) and (y) Valid Claim will exclude any such pending claim that does not have a reasonable bona fide basis for patentability (such reasonable bona fide basis to be determined by outside counsel selected by the parties the event that the parties disagree as to whether there is a reasonable bona fide basis for patentability for such a claim).
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