EXHIBIT 10.1
TO
ICOS Corporation's
Form 10-Q
For the Quarter Ended
June 30, 1997
"[ * ]" = omitted, confidential material, which material has been
separately filed with the Securities and Exchange Commission pursuant to a
request for confidential treatment.
FIRST AMENDMENT TO
R & D COLLABORATION/LICENSE AGREEMENT
This Amendment is entered into as of June 27, 1997 by and between ICOS
Corporation, a Delaware corporation ("ICOS"), and Abbott Laboratories, an
Illinois corporation ("Abbott").
RECITALS
A. ICOS and Abbott entered into an R&D Collaboration/License Agreement
dated as of April 1, 1995 (the "R&D Agreement").
B. ICOS and Abbott desire to amend certain terms of the R&D Agreement to
expand the scope of their R&D collaboration and to have Abbott perform certain
research work for ICOS.
AMENDMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, the parties agree as follows:
1. Field and Excluded Field. The terms "Field" and "Excluded Field"
shall be amended to read in their entirety as follows:
1.9 "Excluded Field" means small molecules (a) whose primary
site of interaction is outside a cell with respect to ICAM-2,
ICAM-3, ICAM-4, ICAM-5, p150/95, alpha-4 or alpha-D integrins or any
other ICAMs or integrins that are discovered outside of the Research
Program, including small molecules that bind to or compete in
binding to the extracellular domain of ICAM-2, ICAM-3, ICAM-4,
ICAM-5, p150/95, alpha-4 or alpha-D integrins or any other ICAMs or
integrins that are discovered outside of the Research Program, or
(b) whose primary site of interaction is inside a cell with respect
to ICAM-4, alpha-D integrin or any other ICAMs or integrins that are
discovered outside of the Research Program. Small molecules that
bind to or compete in binding to the extracellular domain of ICAM-1,
LFA-1 or MAC-1 are specifically excluded from the Excluded Field.
1.13 "Field" means small molecules (a) whose primary site of
interaction is inside a cell with respect to ICAM-1, ICAM-2, ICAM-3,
LFA-1, MAC-1, p150/95 or alpha-4 integrins and that (i) modulate the
affinity or avidity of LFA-1, MAC-1, p150/95 or alpha-4 integrins
for their ligands or (ii) modulate the intracellular signal
transduction activities or the intracellular transcription,
translation or post-translational processing for expression of
ICAM-1, ICAM-2, ICAM-3, LFA-1, MAC-1, p150/95, or alpha-4 integrins
or (b) whose primary site of interaction is outside a cell with
respect to ICAM-1, LFA-1 and MAC-1, including small molecules
that bind to or compete in binding to the extracellular domain of
ICAM-1, LFA-1 or MAC-1. Specifically excluded from the "Field"
is the Excluded Field. Proteins and peptides with more than 11
amino acids and oligonucleotides with more than 25 nucleotides
are not small molecules and, therefore, are excluded from the
"Field" except when they are dimers or multimers of peptides of
less than 12 amino acids or dimers or multimers of oligonucleotides
of less than 26 nucleotides.
2. New Definition. The following new definitions are added to Section
1 of the R&D Agreement:
1.41 "Intracellular Program Product" means any Program
Product which contains a Research Compound whose primary site of
interaction in the Field is inside a cell.
1.42 "Extracellular Program Product" means any Program
Product which contains a Research Compound whose primary site of
interaction in the Field is outside a cell.
1.43 "Competitive Extracellular Program Products" means an
Extracellular Program Product marketed by Abbott or any of its
Affiliates or sublicensees (an "Abbott Extracellular Program
Product") which directly competes with any product marketed by
ICOS or its Affiliates or sublicensees: (i) that is already
on the market in any Major Market Country at the time of the
first commercial sale of such Abbott Extracellular Program
Product in any Major Market Country; and (ii) that does not have
competition from any other pharmaceutical product against the
same molecular target which is already on the market in such Major
Market Country at the time of the first commercial sale of such
Abbott Extracellular Program Product.
1.44 The term "SAR by NMR", which stands for "Structure
Activity Relationship" by "Nuclear Magnetic Resonance", shall mean
the process of drug design through the use of NMR [ * ].
3. Term. The initial term of the Research Program shall be extended
from three (3) to four (4) years from the Effective Date by revising Section 2.3
of the R&D Agreement to read in its entirety as follows:
2.3 Term. The initial term of the Research Program shall be four
(4) years from the Effective Date (i.e., initial Research Term).
The Research Term may be extended on a year-to-year basis for up
to one (1) additional year after the end of the initial Research
Term upon mutual agreement of the parties, the discussion for
such extensions to begin six (6) months prior to the end of the
Research Term. The scope of the Research Program under Section 2.1
and funding to be provided to ICOS by Abbott under Section 2.2
may also be expanded, upon mutual written agreement of the parties.
If the use of the ICOS Research Patent Rights in the Research
Program is substantially impaired because such use infringes the
issued patent(s) of a third party(ies) covering similar subject
matter (in whole or in part), then the parties shall discuss and
agree upon a modification to the Research Program to avoid such
infringement. In the event the parties are unable to agree upon
such modification, Abbott may terminate the term of the Research
Program and its continued funding obligation under Section 2.2
upon one hundred and eighty (180) days' notice to ICOS, in which
event the licenses granted under Section 4.1 shall also terminate.
4. Milestone Payments. Abbott's obligation to make milestone
payments shall be modified to cover both Intracellular Program Products and
Extracellular Program Products by revising Section 6.3 of the R&D Agreement
to read in its entirety as follows:
6.3 Milestone Payments
(a) Abbott shall pay ICOS the following amounts with respect
to each Intracellular Program Product within [ * ] after the
occurrence of the event indicated:
Event Amount
[ * ] [ * ]
(b) Abbott shall pay ICOS the following amount within
[ * ] after the occurrence of the event indicated with
respect to the first Extracellular Program Product to achieve the
event:
Event Amount
[ * ] [ * ]
No milestone payments shall be due and payable on Extracellular Program Products
beyond the first Extracellular Program Product to achieve the event.
5. Royalties. The royalties due and payable by Abbott under the R&D
Agreement shall be modified to provide for [ * ] by revising Section
6.1(a) to read in its entirety as follows:
(i) Abbott shall pay ICOS the following royalty on the Net Sales
during the Royalty Period of Program Products, except Competitive
Extracellular Program Products, containing the same Research
Compound (or a salt, prodrug or trivial variation thereof) even
though such Program Products may have different indications, dose
form, unit size, etc.:
Net Sales During Calendar Year Royalty Rate
[ * ] [ * ]
(ii) Abbott shall pay ICOS the following royalties on the Net Sales
during the Royalty Period of Competitive Extracellular Program
Products containing the same Research Compound (or a salt, prodrug
or trivial variation thereof) even though the Extracellular Program
Products may have different indications, dose form, unit size, etc:
Net Sales During Calendar Year Royalty Rate
[ * ] [ * ]
(iii) No multiple royalties shall be payable on the same Net
Sales of a Program Product under either clause (i) or (ii) because
such Program Product or its manufacture, use or sale is covered by
more than one Valid Claim included in a licensed patent or more than
one patent in the licensed patents.
(iv) The milestone payments for a Program Product under Section
6.3 shall be fully credited against future royalties due hereunder
on the Program Product through a [ * ] in the royalty rates
set forth in this Section 6.1 (a)(i) or (ii), as the case may be.
(v) Royalties shall be paid to ICOS within (i) [ * ] after
the end of each calendar quarter with respect to the Net Sales of
Program Products accruing during the quarter in the United States
(not including Puerto Rico) and (ii) within [ * ] after the
end of each fiscal quarter ending with last day of February, May,
August and November with respect to Net Sales of Program Products
accruing during the quarter outside of the United States or
in Puerto Rico. With each royalty payment, Abbott shall deliver to
ICOS a statement setting forth by country and Program Product the
Net Sales during the quarter and a calculation of the royalties due
thereon. All royalties shall be paid in U.S. dollars, such
royalties being converted, where applicable, from the currency of
the country where the Net Sales accrued at the financial exchange
rate quoted by The Wall Street Journal (Midwest Edition)
(or if not published, another appropriate publication) for the
last business day of the quarter to which the royalty payment
relates. All royalty payments shall be made by means of bank
wire transfer (in immediately available funds) or a check drawn
on a United States bank.
(vi) At the end of the Royalty Period as to each Program Product,
no further royalties shall accrue and the license under Section 4.2
shall become fully paid-up and nonexclusive and shall not be subject
to termination pursuant to Section 14.2 (assuming all milestone
payments and accrued royalties with respect to such Program
Product are paid); provided, however, that, with respect to any
ICOS Product Know How that covers method(s) of making Research
Compound for the Program Product, such license for the Program
Product that Abbott, its Affiliates or its sublicensees has been
selling shall continue to be exclusive (fully paid-up and
nonterminable) if (i) Abbott notifies ICOS of the specific ICOS
Product Know How that Abbott wishes to continue to license
exclusively and (ii) such ICOS Product Know How has not lost its
trade secret protection other than through fault or other action of
ICOS or its Related Parties.
6. SAR by NMR.
(i) Abbott shall apply SAR by NMR to certain targets
designated by ICOS in the Excluded Field. Initially, Abbott shall
apply the SAR by NMR to [ * ] by ICOS. Abbott shall promptly
commence such work after [ * ]. Abbot will be able to provide
results to ICOS [ * ]. (ii) Abbott shall also apply the
SAR by NMR to research ICAM-1, MAC-1 and LFA-1 in the new
extracellular part of the Field which was added by this Amendment.
If such research is successful in identifying any Research
Compounds, Abbott shall [ * ] that Abbott will conduct for
ICOS for each Research Compound identified by Abbott [ * ].
ICOS shall identify the new targets to be researched by Abbott.
Abbott estimates that it will take approximately [ * ] to
complete such research work for each additional target.
(iii) Abbott shall inform ICOS at least once a quarter of the
progress and any material developments with respect to the research
work that it is performing for ICOS and shall, within [ * ]
after the completion of such research work for each target,
provide ICOS with a written report summarizing its activities and
results. It is recognized and agreed that (A) with respect
to Excluded Products, any small molecules resulting from the SAR by
NMR will be treated as Research Compounds and (B) all information
from SAR by NMR activities for ICOS designated targets shall be
exclusively licensed to ICOS pursuant to Section 4.4 for Excluded
Products and for the development of small molecules in the
Excluded Field.
(iv) ICOS can propose additional targets for SAR by NMR beyond
the research work provided in clause (i) and (ii) hereof, and Abbott
shall reasonably consider such proposal, provided that it would not
detrimentally affect Abbott's research programs. If accepted by
Abbott, ICOS shall cover the cost of such additional research work,
and the milestone payments and royalties required by Exhibit B of
this Agreement shall apply to products resulting from such
additional research work.
7. Exhibit B shall be revised to read in its entirety in the form of
Exhibit B which is attached to this Amendment.
8. ICOS shall, within [ * ] after the execution of this
Amendment, (i) provide to Abbott reagents in the expanded portion of the field
(ICAM-1, MAC-1 and LFA-1) in sufficient quantity and purity to enable Abbott to
conduct NMR and to conduct high throughput screening and (ii) provide to Abbott
any Research Compounds previously discovered by ICOS in the expanded portion of
the Field. In addition, each party acknowledges its obligations under Section
2.5(c) of the R&D Agreement to keep the other party fully and promptly
informed as to all of its discoveries and technical developments under the
Research Program, including discoveries and technical developments in the
expanded portion of the Field.
9. Except as specifically modified by this Amendment, the terms and
conditions of the R&D Agreement are ratified by the parties as being in full
force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year first above written.
ICOS CORPORATION ABBOTT LABORATORIES
By: /s/ W. Michael Gallatin By: /s/ Paul N. Clark
Title: Vice President and Title: President, Pharmaceutical
Scientific Director Products Division
[*] Confidential Treatment Requested
EXHIBIT B
ROYALTIES ON EXCLUDED PRODUCTS
A. Definitions. As used in this Exhibit B:
"Abbott Compound" means a small molecule that (1) was first discovered in
the Research Program to have activity in the Excluded Field and for which
structural information and the information related to such activity was provided
to ICOS and (2) is a Research Compound.
"Derived Product" means an Excluded Product containing a Research Compound
whose structure was derived by ICOS from an Abbott Compound (or a salt or
prodrug thereof).
"Direct Product" shall mean an Excluded Product containing a Research
Compound that is an Abbott Compound (or a salt, prodrug or trivial chemical
variation (e.g., methylated analog) thereof).
"SAR by NMR Product" shall mean an Excluded Product containing a Research
Compound whose structure was developed by the SAR by NMR research work performed
by Abbott for ICOS (or a salt, prodrug or trivial chemical variation thereof).
"Final Product" means a Derived Product, Direct Product, or SAR by NMR
Product.
The definitions of "Net Sales" and "Royalty Period" shall be applied
mutatis mutandis to ICOS and Final Products. All other terms shall have the
meaning set forth in this Agreement.
B. Royalties. Subject to the terms of this Exhibit B, ICOS shall pay
Abbott a royalty on the Net Sales during the Royalty Period of Excluded Products
that are Final Products as follows:
(1) On a country-by-country basis with respect to each Final Product
that is made, used or sold in a country in which it is covered by a patent
(until the date set forth in Section 1.37(a) with respect Valid Claims covering
use or method of manufacture),the royalty rate shall be:
Product Rate
Direct Product [ * ]
Derived Product [ * ]
SAR by NMR Product [ * ]
SAR by NMR Products
-------------------
Net Sales During Contract Year Royalty Rate
[ * ] [ * ]
(2) On a country-by-country basis with respect to each Final Product
that is made, used and sold in a country in which it is not covered by a patent,
the royalty rate shall be:
Product Royalty Rate on Net Sales
Direct Product [ * ]
Derived Product [ * ]
SAR by NMR Product [ * ]
Only one of the above royalty rates shall apply at any time to a Final
Product; however, if a Final Product is subject to two (2) different royalty
rates [ * ]. No multiple royalties shall be payable on the same Net Sales
of an Excluded Product because the Excluded Product or its manufacture, use or
sale is covered by more than one Valid Claim included in a licensed patent or
more than one patent in the licensed patents.
Royalties shall be paid to Abbott within (i) [ * ] after the end of
each calendar quarter with respect to the Net Sales of Final Products accruing
during the quarter in the United States (not including Puerto Rico) and
(ii) within [ * ] after the end of each fiscal quarter with respect to
Net Sales of Final Products accruing during the quarter outside of the United
States or in Puerto Rico. With each royalty payment, ICOS shall deliver to
Abbott a statement setting forth by country and Final Product the Net Sales
during the quarter and a calculation of the royalties due thereon. All
royalties shall be paid in U.S. dollars, such royalties being converted, where
applicable, from the currency of the country where the Net Sales accrued the
financial exchange quoted by the Wall Street Journal (Midwest Edition) (or if
not published, another appropriate publication) for the last business day of
the quarter to which the royalty payment relates. All royalty payments shall be
made by means of bank wire transfer (in immediately available funds) or a check
drawn on a United States bank.
At the end of the Royalty Period as to each Final Product, no further
royalties shall accrue and the license under Section 4.4 shall become fully
paid-up and nonexclusive and shall not be subject to termination pursuant to
Section 14.2 (assuming all accrued royalties with respect to the Final
Product are paid); provided, however, that, with respect to any Abbott Product
Know How that covers method(s) of making Research Compound for the Final
Product, such license for the Final Product that ICOS, its Affiliates or its
sublicensee has been selling shall continue to be exclusive (fully paid-up and
nonterminable) if (i) ICOS notifies Abbott of the specific Abbott Product Know
How that ICOS wishes to continue to license exclusively and (ii) such Abbott
Product Know How has not lost its trade secret protection other than through
fault or other action of Abbott or its Related Parties.
C. Third-Party Royalties. In the event a license from a third party
(not an Affiliate of ICOS) is necessary to develop or market a Final Product,
[ * ] of any royalties due under such license for sales during a calendar
quarter may be deducted from the royalties due hereunder on Net Sales of the
Final Product during such quarter; provided, however, that the deduction
shall not reduce such royalties due hereunder by greater than [ * ].
D. Exclusion From Royalties. Notwithstanding the foregoing, no
royalties shall be due with respect to a Final Product incorporating an Abbott
Compound (or salt, prodrug or trivial chemical variation thereof) or any
compound derived therefrom if:
(1) Such Abbott Compound was a compound supplied or to be supplied to
ICOS as a Supplied Compound and was discovered in the Research Program to have
activity in the Excluded Field before (or at the same time as) it was discovered
in the Research Program to have activity (if at all) in the Field or
(2) ICOS can demonstrate, through suitable written evidence, that it
had the same or related structural information for such Abbott Compound from
other work or sources prior to receiving it from Abbott. ICOS shall notify
Abbott within [ * ] after receiving structural information for such
Abbott Compound from Abbott that it has the same or related structural
information from other work or other sources; otherwise, ICOS shall have the
burden of proving that such Abbott Compound or compound incorporated in the
Final Product was not derived from the structural information provided to ICOS
by Abbott.
E. Further Exclusion from Royalties. Notwithstanding the foregoing, no
royalties shall be due with respect to an SAR by NMR Product (or salt, prodrug
or trivial chemical variation thereof) or any compound derived therefrom if ICOS
can demonstrate through suitable written evidence, that the activity of such
molecule was known to or discovered by ICOS prior to receiving the information
from Abbott relating to its SAR by NMR research work on such molecule.
F. Books and Records. The provisions of Section 6.4 of this Agreement
shall apply mutatis mutandis.
G. Value of Collaboration and Know How. ICOS acknowledges that
Abbott's participation and work in the Research Program will be of substantial
value and that the Abbott proprietary technology licensed to ICOS for the
Research Program constitutes valuable and substantial trade secrets and know how
of Abbott. The parties acknowledge and agree that, for their mutual
convenience and after considering other alternatives, the payments to Abbott
set forth in this Exhibit B, including the structure and timing of royalty
payments, are an appropriate and mutually convenient way of compensating Abbott.
H. Milestone Payments. ICOS shall pay to Abbott the following amounts
within [ * ] after the occurrence of the event indicated with respect to
the first SAR by NMR Product:
Event Amount
[ * ] [ * ]
I. Milestone Credited. The milestone payments for an SAR by NMR
Product shall be fully credited against future royalties due hereunder on the
SAR by NMR Product through a [ * ] in the royalty rates set forth in
Paragraph B of this Exhibit B.
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[*] Confidential Treatment Requested