Exhibit 10.1
CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
COLLABORATION AND LICENSE AGREEMENT
DATED AS OF DECEMBER 15, 2004
BY AND BETWEEN
CANCERVAX CORPORATION
AND
SERONO TECHNOLOGIES S.A.
TABLE OF CONTENTS
PAGE
ARTICLE 1 DEFINITIONS.......................................................................... 2
ARTICLE 2 LICENSES AND RELATED RIGHTS AND OBLIGATIONS.......................................... 17
2.1 License Grants from CancerVax to Serono................................................. 17
2.2 License Grants from Serono to CancerVax................................................. 18
2.3 Sublicensing and Subcontracting......................................................... 18
2.4 Know-How Use and Transfer Restrictions.................................................. 19
2.5 No Implied License; Retained Rights..................................................... 19
2.6 Exclusivity............................................................................. 20
2.7 Third Party Licenses.................................................................... 21
ARTICLE 3 COLLABORATION management............................................................. 22
3.1 Alliance Manager........................................................................ 22
3.2 Committees.............................................................................. 22
3.3 Steering Committee...................................................................... 23
3.4 Development Team........................................................................ 24
3.5 Product Team............................................................................ 25
ARTICLE 4 DEVELOPMENT OF PRODUCT............................................................... 26
4.1 Development Transfer Plan............................................................... 26
4.2 Development Activities.................................................................. 27
4.3 Development Plan........................................................................ 27
4.4 Development Efforts..................................................................... 28
4.5 Development Funding..................................................................... 29
4.6 Certain Clinical Trials................................................................. 29
ARTICLE 5 REGULATORY MATTERS................................................................... 30
5.1 Access to Data; Notice; Comments........................................................ 30
5.2 Clinical Trial Data..................................................................... 31
5.3 Filings with Governmental Authorities................................................... 31
5.4 Communication with Governmental Authorities............................................. 31
5.5 Step-In Rights.......................................................................... 33
5.6 Regulatory Information.................................................................. 34
5.7 Recalls................................................................................. 35
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5.8 Events Affecting Integrity or Reputation................................................ 35
5.9 Medical Inquiries....................................................................... 35
5.10 Pricing and Reimbursement............................................................... 36
5.11 Costs................................................................................... 36
ARTICLE 6 COMMERCIALIZATION.................................................................... 36
6.1 Commercialization Activities............................................................ 36
6.2 U.S. Commercialization.................................................................. 37
6.3 ROW Commercialization................................................................... 41
ARTICLE 7 CO-PROMOTION......................................................................... 43
7.1 Sales Force............................................................................. 43
7.2 Sales Force Training.................................................................... 44
7.3 [***]................................................................................... 45
7.4 Detailing............................................................................... 46
7.5 Alternative Performance................................................................. 48
7.6 Costs of Co-Promotion................................................................... 48
ARTICLE 8 SUPPLY............................................................................... 48
8.1 Supply for Development.................................................................. 48
8.2 Supply for Commercialization............................................................ 49
ARTICLE 9 FINANCIAL PROVISIONS................................................................. 49
9.1 Up-front Payments....................................................................... 49
9.2 Milestone Payments...................................................................... 50
9.3 Profit Sharing for the Product in the United States..................................... 51
9.4 Payment of Royalties on Net Sales of the Product in the ROW............................. 51
9.5 Reports and Reconciliation Payments..................................................... 53
9.6 Currencies.............................................................................. 55
9.7 Manner of Payments...................................................................... 55
9.8 Interest on Late Payments............................................................... 56
9.9 Tax Withholding......................................................................... 56
9.10 Tax Matters............................................................................. 56
9.11 Financial Records; Audits............................................................... 58
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE 10 CONFIDENTIAL INFORMATION............................................................. 59
10.1 Confidential Information................................................................ 59
10.2 Other Permitted Disclosure and Use...................................................... 60
10.3 Publications............................................................................ 60
10.4 Public Announcements.................................................................... 61
10.5 Equitable Relief........................................................................ 61
ARTICLE 11 REPRESENTATIONS AND WARRANTIES; COVENANTS............................................ 62
11.1 Mutual Representations and Warranties................................................... 62
11.2 Additional Serono Representations and Warranties........................................ 62
11.3 Additional CancerVax Representations and Warranties..................................... 62
11.4 Covenants............................................................................... 64
11.5 Disclaimer of Warranty.................................................................. 64
ARTICLE 12 INDEMNIFICATION...................................................................... 65
12.1 Indemnification by Serono............................................................... 65
12.2 Indemnification by CancerVax............................................................ 65
12.3 Procedure for Indemnification........................................................... 65
12.4 Right to Counsel........................................................................ 66
12.5 [***]................................................................................... 66
12.6 Insurance............................................................................... 67
12.7 Limitation of Liability................................................................. 67
ARTICLE 13 PATENT AND INFRINGEMENT.............................................................. 67
13.1 Inventions.............................................................................. 67
13.2 Patent Filing, Prosecution and Maintenance.............................................. 67
13.3 Infringement............................................................................ 68
13.4 Enforcement Against Third Parties....................................................... 69
13.5 [***] .................................................................................. 71
13.6 Patent Marking.......................................................................... 71
ARTICLE 14 TRADEMARK AND COPYRIGHT.............................................................. 71
14.1 Product Trademarks...................................................................... 71
14.2 Display; Approval; Quality Control...................................................... 72
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(continued)
PAGE
14.3 Enforcement............................................................................. 72
14.4 Housemarks.............................................................................. 72
14.5 Copyrights.............................................................................. 73
ARTICLE 15 TERM AND TERMINATION................................................................. 74
15.1 Term.................................................................................... 74
15.2 Rights of Termination................................................................... 74
15.3 Effect of Expiration or Termination..................................................... 74
15.4 Effect of Termination for Bankruptcy Events............................................. 77
15.5 Survival................................................................................ 77
ARTICLE 16 DISPUTE RESOLUTION................................................................... 77
[***]
[***]
ARTICLE 17 LIMITATIONS ON PURCHASES OF EQUITY SECURITIES........................................ 78
17.1 Purchases of Equity Securities.......................................................... 78
17.2 Exceptions for Purchasing Securities of CancerVax....................................... 79
ARTICLE 18 MISCELLANEOUS........................................................................ 80
18.1 Registration and Filing of this Agreement............................................... 80
18.2 Accounting Procedures................................................................... 80
18.3 Patient Information..................................................................... 80
18.4 Non-Solicitation........................................................................ 80
18.5 Force Majeure........................................................................... 81
18.6 Further Assurances...................................................................... 81
18.7 Relationship of the Parties; Expenses................................................... 81
18.8 No Third Party Beneficiaries............................................................ 82
18.9 Notices................................................................................. 82
18.10 Assignment and Delegation............................................................... 83
18.11 Severability............................................................................ 83
18.12 Headings; Construction; Certain Conventions............................................. 83
18.13 Entire Agreement; Amendments............................................................ 84
18.14 Waiver.................................................................................. 84
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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(continued)
PAGE
18.15 Remedies Cumulative..................................................................... 84
18.16 Governing Law........................................................................... 84
18.17 Counterparts; Fax Signatures............................................................ 84
v
SCHEDULES
Schedule 1.13 CancerVax Patents
EXHIBITS
Exhibit A Terms for Manufacturing and Supply Agreement
Exhibit B Stock Purchase Agreement
Exhibit C Registration Rights Agreement
Exhibit D Form of Press Release
COLLABORATION AND LICENSE AGREEMENT
This COLLABORATION AND LICENSE AGREEMENT (this "Agreement"), dated as
of December 15, 2004 (the "Effective Date"), is made by and between CancerVax
Corporation, a Delaware corporation having its principal office at 2110
Rutherford Road, Carlsbad, California, 92008, USA ("CancerVax"), and Serono
Technologies S.A., a Swiss corporation having its principal office at Zone
Industrielle de l'Ouriettaz, 1170 Aubonne, SWITZERLAND ("Serono"). CancerVax and
Serono may each be referred to as a "Party" or together, the "Parties".
RECITALS
WHEREAS, CancerVax is engaged in the discovery, development and
commercialization of biological drug products for the treatment, control and
prevention of cancer, and is currently developing a drug product candidate,
known as Canvaxin(TM) (and more specifically defined below as the Product), for
the treatment of patients with Stage III and Stage IV melanoma;
WHEREAS, Serono has significant experience in the world-wide
development and commercialization of drug products, and can make significant
contributions to the successful development and commercialization of the
Product;
WHEREAS, the Parties desire to collaborate in connection with the
Development and Commercialization of the Product on the terms and subject to the
conditions of this Agreement, which collaboration would include, in summary,
joint Development of the Product by the Parties, joint Commercialization and
Co-Promotion of the Product by the Parties in the United States and
Commercialization of the Product exclusively by Serono in the ROW;
WHEREAS, CancerVax and Serono (or one or more of their respective
Affiliates) are executing the Stock Purchase Agreement and the Registration
Rights Agreement concurrently with the execution of this Agreement, each to be
effective as of the Effective Date; and
WHEREAS, CancerVax and Serono (or one or more of their respective
Affiliates) will execute at a later date a Pharmacovigilance Agreement, a
Manufacturing and Supply Agreement and, in connection with and pursuant to the
terms of the Manufacturing and Supply Agreement, a Quality Agreement, and may
execute, at a later date, a Technology Transfer Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, covenants and agreements contained herein, CancerVax and
Serono, intending to be legally bound, hereby agree as follows:
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ARTICLE 1
DEFINITIONS
For purposes of this Agreement, in addition to the other terms defined
elsewhere in this Agreement (as set forth in the chart below), the following
initially capitalized terms, whether used in the singular or plural, shall have
the following meanings:
1.1 "Adverse Drug Experience" means any of the following: an "adverse drug
experience," a "life-threatening adverse drug experience," a "serious
adverse drug experience," or an "unexpected adverse drug experience,"
as those terms are defined at either 21 C.F.R. Section 312.32 or 21
C.F.R. Section 314.80, or their equivalents under Laws of jurisdictions
outside the United States.
1.2 "Affiliate" means any Person directly or indirectly controlled by,
controlling, or under common control with, a Person, but only for so
long as such control shall continue. For purposes of this definition,
"control" (including, with correlative meanings, "controlled by",
"controlling," and "under common control with") means, with respect to
a Person, possession, direct or indirect, of (a) the power to direct or
cause direction of the management and policies of such Person (whether
through ownership of securities or partnership or other ownership
interests, by contract or otherwise) or (b) at least fifty percent
(50%) of the voting securities (whether directly or pursuant to any
option, warrant or other similar arrangement) or other comparable
equity interests of such Person. For the avoidance of doubt, neither of
the Parties shall be deemed to be an Affiliate of the other.
1.3 "Allocable Overhead" means [***]
1.4 "Approval" means a Marketing Authorization and its related pricing,
labeling and reimbursement approvals, and similar final approvals from
a Governmental Authority necessary to Commercialize a product.
1.5 "BLA" means a biologics license application, a supplemental biologics
license application, a marketing authorization application or any
similar application, or any amendment to any of the foregoing, filed
with the FDA or any other Governmental Authority to obtain Marketing
Authorization for a biological or pharmaceutical product in the country
or territory over which such Governmental Authority has jurisdiction.
1.6 "BLA Acceptance" means the receipt of notice from the relevant
Governmental Authority that a BLA for the Product has met all the
criteria for filing acceptance.
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.7 "Business Day" means any day that is not a Saturday, Sunday, or a day
on which banking institutions in Aubonne, Switzerland or San Diego,
California, United States are required by Law to be closed for
business.
1.8 "Calendar Quarter" means for each Calendar Year, each of the three (3)
month periods ending March 31, June 30, September 30, and December 31;
provided, that the first calendar quarter for the first Calendar Year
shall extend from the Effective Date to the end of the first complete
calendar quarter in which it falls.
1.9 "Calendar Year" means, for the first calendar year, the period
commencing on the Effective Date and ending on December 31 of the
calendar year during which the Effective Date occurs, and each
successive period beginning on January 1 and ending twelve (12)
consecutive calendar months later on December 31.
1.10 "Call" means a face-to-face meeting in an individual, hospital or group
setting between a Sales Representative and one or more Target
Prescribers.
1.11 "CancerVax Housemark" means the name and logo of CancerVax.
1.12 "CancerVax Know-How" means the proprietary Know-How owned or Controlled
by CancerVax as of the Effective Date or during the Term that is
necessary or actually used to Develop, Manufacture, Commercialize or
use the Product in the Field, including the Cell Lines, but excluding
Serono Know-How licensed to CancerVax by Serono under this Agreement.
1.13 "CancerVax Patents" means those Patent Rights owned or Controlled by
CancerVax as of the Effective Date or during the Term that cover the
Development, Manufacture, Commercialization or use of the Product in
the Field, including the Patent Rights set forth in Schedule 1.13, as
amended and updated by CancerVax from time to time.
1.14 "CancerVax Technology" means CancerVax Patents, CancerVax Know-How and
CancerVax's rights to and interests in any Joint Technology.
1.15 "Cell Lines" means [***]
1.16 "Claims" means all charges, complaints, Recall obligations and
liabilities, actions, suits, proceedings, hearings, investigations,
claims and demands.
1.17 "Change of Control" means (a) a merger, reorganization or consolidation
of a Party with a Third Party that results in the shareholders of such
Party receiving less than fifty percent (50%) of the combined voting
power of the surviving entity immediately after such merger,
reorganization or consolidation, (b) a Third Party, together with its
Affiliates, becoming the direct or beneficial owner of fifty percent
(50%) or more of the combined voting power of the outstanding
securities or outstanding share of common stock of such Party, or (c)
the sale or other transfer of all or substantially all of such Party's
assets which relate to this Agreement to a Third Party.
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.18 "Commercial Expenses" means [***]:
1.18.1 [***]
1.18.2 [***]
1.18.3 [***]
1.18.4 [***]
1.18.5 [***]
1.18.6 [***]
1.18.7 [***]
1.18.8 [***]
1.18.9 [***]
1.18.10 [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.18.11 [***]
1.18.12 [***] and
1.18.13 [***]
but specifically excluding [***]
1.19 "Commercialization" means any and all activities directed to marketing,
promoting, distributing, importing for sale, offering for sale, and
selling a product, including Co-Promoting and regulatory activities
directed to obtaining pricing and reimbursement approvals, but not
including Manufacturing. When used as a verb, "Commercialize" means to
engage in Commercialization.
1.20 "Commercialization Plan" means either the U.S. Commercialization Plan
or the ROW Commercialization Plan, or both, as the context requires.
1.21 "Commercially Reasonable Efforts" means [***]
1.22 "Competing Product" means [***]
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.23 "Confidential Information" means all secret, confidential or
proprietary information or data, whether provided in written, oral,
graphic, video, computer, or other form, provided or transmitted by or
on behalf of one Party (the "Disclosing Party") to the other Party (the
"Receiving Party"), including information relating to the Disclosing
Party's existing or proposed research, Development efforts, Patent
Rights, Know-How, business, finances (including all financial
information subject to review under or prepared by accountants pursuant
to Section 9.11) or products (including the Product training materials
contemplated by Section 7.2.1, the Development Plan and the
Commercialization Plans), the terms of this Agreement and any other
materials that have not been made available by the Disclosing Party to
the general public. Notwithstanding the foregoing sentence,
Confidential Information shall not include any information or materials
that:
1.23.1 were already known to the Receiving Party (other than under an
obligation of confidentiality) at the time of disclosure by
the Disclosing Party, to the extent the Receiving Party has
documentary evidence to that effect;
1.23.2 were generally available to the public or otherwise part of
the public domain at the time of disclosure by the Disclosing
Party;
1.23.3 became generally available to the public or otherwise part of
the public domain after disclosure or development, as the case
may be, other than through any act or omission of the
Receiving Party in breach of the Receiving Party's
confidentiality obligations to the Disclosing Party;
1.23.4 were disclosed to the Receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no
obligation to the Disclosing Party not to disclose such
information to others; or
1.23.5 were independently discovered or developed, as the case may
be, by or on behalf of the Receiving Party by Persons without
the use of or access to the Disclosing Party's Confidential
Information, to the extent the Receiving Party has documentary
evidence to that effect.
1.24 "Controlled" means, with respect to any intellectual property right,
that the relevant Party has a license to such intellectual property
right and has the ability to grant to the other Party a sublicense to
such intellectual property right as provided for herein without
violating the terms of such license.
1.25 "Co-Promotion" means the joint promotion of the Product in the United
States by both Parties (or their respective Affiliates) under the same
Product Trademark(s) as set forth in
-6-
ARTICLE 7. "Co-Promote" when used a verb shall mean to engage in such
Co-Promotion.
1.26 "Cost of Goods" means [***]
1.27 "Detail" or "Detailing" means, with respect to the Product, the
activity undertaken by a Sales Representative during a Call in which
one or more Product benefits are verbally presented to one or more
Target Prescribers, but shall exclude discussions at conventions,
marketing meetings or seminars, and all forms of communication not
involving face-to-face contact by a Sales Representative and a Target
Prescriber.
1.28 "Development" or "Develop" means non-clinical and clinical drug
development activities reasonably related to the development and
submission of information to a Governmental Authority for purposes of
obtaining Marketing Authorization, including clinical and non-clinical
studies, test method development and stability testing, process
development, formulation development, delivery system development,
quality assurance and quality control development and statistical
analysis, and activities related to Manufacturing scale-up, but not
including Manufacturing for commercial supply. When used as a verb,
"Develop" means to engage in Development.
1.29 "Development Expenses" means [***]
1.29.1 [***]
1.29.2 [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.29.3 [***]
1.29.4 [***]
1.29.5 [***]
1.29.6 [***]
1.29.7 [***]
1.29.8 [***]
1.29.9 [***] and
1.29.10 [***]
but specifically excluding [***]
1.30 "Directly Comparable Product" means [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.31 "Distribution Expenses" means [***]
1.32 "Distributable Profit" means [***] less the following amounts (such
items, "Shared Expenses"):
1.32.1 [***]
1.32.2 [***]
1.32.3 [***]
1.32.4 [***]
1.32.5 [***]
1.32.6 [***]
1.32.7 [***] and
1.32.8 [***]
but specifically excluding [***]
1.33 "European Union" or "EU" means the countries of the European Union, as
it is constituted as of the Effective Date.
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.34 "Existing Third Party Agreement" means the Cross-License Agreement
between CancerVax, Inc. and the John Wayne Cancer Institute, dated July
24, 1998, and assigned to CancerVax on July 31, 2000.
1.35 "FDA" means the United States Food and Drug Administration and any
successor agency thereto.
1.36 "Field" means all preventative and therapeutic uses in human diseases.
1.37 "First Commercial Sale" means the first commercial sale of a product to
an end user in a country after receipt of Approval for such country.
1.38 "FTE Rate" means [***] per full time equivalent personnel. Such rate
shall be reviewed on an annual basis and adjusted as the Parties may
agree to reflect, among other things, [***]
1.39 "Governmental Authority" means any applicable government authority,
court, tribunal, arbitrator, agency, legislative body, commission or
other instrumentality of (a) any government of any country, (b) any
state, province, county, city or other political subdivision thereof,
or (c) any supranational body, including the European Commission.
1.40 "Housemark" means, when used in connection with CancerVax, the
CancerVax Housemark, and, when used in connection with Serono, the
Serono Housemark.
1.41 "Invention" means any new or useful process, manufacture, compound,
composition of matter, improvement, discovery, claim, formula, process,
trade secret, technology and know-how (including confidential data and
Confidential Information), [***] including any synthesis, preparation,
recovery and purification processes and techniques, control methods and
assays, chemical data, toxicological and pharmacological data and
techniques, clinical data, medical uses, product forms, product
formulations and specifications, whether patentable or unpatentable
(but not patented), [***]
1.42 "Joint Technology" means any Patent Rights or Know-How arising from
Inventions that is determined to be jointly owned by the Parties
pursuant to Section 13.1.
1.43 "Know-How" means any technical information, know-how and materials,
including all biological, chemical, pharmacological, toxicological,
clinical, assay and other information, data, discoveries, inventions,
improvements, processes, formulae and trade secrets, whether patentable
or unpatentable (but not patented).
1.44 "Knowledge" of CancerVax means, [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.45 "Label-Enabling Clinical Trial" means a clinical trial of the Product
in human patients the results of which could be used to support the
Marketing Authorization for the Product in a country or to expand the
Product's labeling, including for additional indications.
1.46 "Laws" or "Law" means all applicable laws, statutes, rules,
regulations, ordinances and other pronouncements having the binding
effect of law of any Governmental Authority.
1.47 "Losses" means any and all damages (including all incidental,
consequential, statutory, and treble damages), awards, deficiencies,
settlement amounts, assessments, fines, dues, penalties, costs, fees,
liabilities, obligations, taxes, liens, losses and expenses (including
court costs, interest and reasonable fees of attorneys, accountants and
other experts) actually incurred by a Party or required to be paid by a
Party to a Third Party with respect to a Claim by reason of any
judgment, order, decree, stipulation or injunction, or any settlement
entered into in accordance with the provisions of this Agreement,
together with all documented out-of-pocket costs and expenses incurred
in complying with any judgments, orders, decrees, stipulations and
injunctions that arise from or relate to a Claim of a Third Party.
1.48 "Manufacturing" means any and all activities relating to acquiring
materials for, producing, manufacturing, processing, filling,
finishing, packaging, labeling or quality control testing a product, or
having performed any such activity. When used as a verb, "Manufacture"
means to engage in Manufacturing.
1.49 "Marketing Authorization" means, with respect to a country, the
regulatory authorization required to market and sell a product in such
country as granted by the relevant Governmental Authority.
1.50 "Net Sales" means [***] less the following deductions [***]
1.50.1 [***]
1.50.2 [***]
1.50.3 [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.50.4 [***]
1.50.5 [***]
1.50.6 [***]
1.50.7 [***] and
1.50.8 [***]
Net Sales shall be determined from books and records maintained in accordance
with Section 18.2.
If the Product is sold in the form of a combination product containing one or
more products, active ingredients, devices, equipment or components that are
themselves not the Product (a "Combination Product"), then for the purpose of
calculating Royalties owed on sales of the Combination Product, Net Sales shall
be calculated as follows: [***]
Notwithstanding the foregoing, if the Product is sold by a Party, its Affiliates
or sublicensees to a Third Party in a given country in a given Calendar Quarter
under a bundled arrangement with such Party's other products, then the Net Sales
[***]
Transfers or dispositions of the Product to Third Parties for compassionate use,
preclinical, clinical, Manufacturing, regulatory or Governmental Authority
purposes shall not be deemed to be "sales", unless [***]
1.51 "Patent Rights" means all existing patents and patent applications and
all patent applications hereafter filed, including any continuations,
continuations-in-part, divisions, provisionals, or any substitute
applications, any patent issued with respect to any such
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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patent applications, any reissue, reexamination, renewal, or extension
(including any supplementary protection certificate) of any such
patent, and any confirmation patent or registration patent or patent of
addition based on any such patent, and all foreign counterparts of any
of the foregoing, or as applicable portions thereof or individual
claims therein.
1.52 "Person" means any natural person, corporation, general partnership,
limited partnership, joint venture, proprietorship, or other business
organization.
1.53 "Phase III Clinical Trial" means a clinical trial of the Product in
human patients with disease being studied that is of appropriate size
and design to establish the safety and efficacy of the Product and is
intended to be the final stage of clinical testing prior to and in
support of obtaining Marketing Authorization for the Product in the
U.S. or the EU, which trial shall be deemed initiated upon the first
administration of the Product to a patient in such trial.
1.54 "Phase IV Clinical Trial" means a clinical trial of the Product in
human patients (including investigator initiated trials and clinical
experience trials) that is conducted for a purpose other than to obtain
or support the initial Marketing Authorization for the Product in a
country, and excluding Label-Enabling Clinical Trials.
1.55 "Primary Detail" means a Detail for the Product in which the Product
receives the predominant portion of emphasis and time during the Call
(i.e., no other product receives more emphasis or time during the
Call).
1.56 "Product" means the injectible biopharmaceutical preparation containing
the Cell Lines as the drug substances in final form for administration
to humans that is currently identified as Canvaxin(TM).
1.57 "Product Trademarks" means any and all trademarks, logos, designs,
slogans and other product markings, as well as trade dress, used during
the Term to identify or brand the Product or otherwise in connection
with the Commercialization of the Product, including the trademark
Canvaxin(TM), but excluding the Housemarks.
1.58 "Promotional Materials" means all written, printed, video or graphic
advertising, promotional, educational and communication materials
(other than Product labeling) for marketing, advertising and promotion
of the Product for use by sales forces (including the Sales Forces),
advertisements, direct mail pieces or other marketing initiatives, in
accordance with the terms of the applicable Commercialization Plan.
1.59 "Related Agreements" means the Stock Purchase Agreement, the
Registration Rights Agreement, the Pharmacovigilance Agreement, the
Technology Transfer Agreement, the Manufacturing and Supply Agreement
and the Quality Agreement.
1.60 "ROW" means all countries in the world (including all states,
provinces, territories, protectorates, possessions and other similar
subdivisions thereof) other than the United States.
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1.61 "Sales Representative" means an individual who engages in Detailing and
other promotional efforts with respect to the Product and who has been
trained in accordance with Section 7.2.
1.62 "Second Indication" means [***]
1.63 "Secondary Detail" means a Detail for the Product in which the Product
receives the second most emphasis and time during the Call (i.e., at
most, only one other product receives greater emphasis and time during
the Call).
1.64 "Serono Housemark" means the name and logo of Serono or an Affiliate of
Serono as identified by Serono to CancerVax from time to time.
1.65 "Serono Know-How" means the proprietary Know-How owned or Controlled by
Serono as of the Effective Date or during the Term that is necessary or
actually used to Develop, Manufacture, Commercialize or use Product in
the Field but excluding CancerVax Know-How licensed to Serono under
this Agreement.
1.66 "Serono Patents" means those Patent Rights owned or Controlled by
Serono as of the Effective Date or during the Term that cover the
Development, Manufacture, Commercialization or use of the Product in
the Field.
1.67 "Serono Technology" means Serono Patents, Serono Know-How and Serono's
rights to and interests in any Joint Technology.
1.68 "Shared Existing Royalties" means all amounts owed by CancerVax under
Section 4.4 of the Existing Third Party Agreement, but not amounts owed
by CancerVax under Section 4.3 or any other Section of the Existing
Third Party Agreement.
1.69 "Target Prescriber" means a subset of those practitioners with
authority to prescribe a pharmaceutical product or issue hospital
orders for a pharmaceutical product in the United States as identified
in the U.S. Commercialization Plan.
1.70 "Term" means the period commencing with the Effective Date and expiring
as specified in Section 15.1 or as otherwise terminated pursuant to
ARTICLE 15.
1.71 "Third Party" means a Person who is not a Party or an Affiliate of a
Party.
1.72 "Third Party License" means any agreement entered into by a Party with
a Third Party in accordance with Section 2.7, whereby royalties, fees
or other payments are to be made to the Third Party, but excluding the
Existing Third Party Agreement and the Other Third Party Agreements.
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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1.73 "United States" or "U.S." means the United States of America and its
states, territories, protectorates and possessions, including the
District of Columbia, the Commonwealth of Puerto Rico and Guam.
1.74 Other Terms.
"Agreement" shall have the meaning set forth in the first paragraph of this
Agreement.
"Alleged Infringement" shall have the meaning set forth in Section 13.4.1.
"Alliance Manager" shall have the meaning set forth in Section 3.1.
"Auditing Party" shall have the meaning set forth in Section 9.11.2.
"Bankrupt Party" shall have the meaning set forth in Section 15.4.
"Breaching Party" shall have the meaning set forth in Section 15.2.2.
"CancerVax" shall have the meaning set forth in the first paragraph of this
Agreement.
"CancerVax Report" shall have the meaning set forth in Section 9.5.3.
"Code" shall have the meaning set forth in Section 15.4.
"Combination Product" shall have the meaning set forth in Section 1.50.
"Competing Product Notice" shall have the meaning set forth in Section 2.6.5.
"Competing Product Party" shall have the meaning set forth in Section 2.6.5.
"Competing Product Prohibition Period" shall have the meaning set forth in
Section 2.6.1.
"Controlling Party" shall have the meaning set forth in Section 13.3.1.
"Co-Promotion Costs" shall have the meaning set forth in Section 7.6.
"Copyrighted Works" shall have the meaning set forth in Section 14.5.
"Deemed Partnership" shall have the meaning set forth in Section 9.10.3.
"Defaulting Party" shall have the meaning set forth in Section 5.5.
"Detail Requirements" shall have the meaning set forth in Section 7.4.2.
"Determination" shall have the meaning set forth in Section 9.10.1.
"Development Plan" shall have the meaning set forth in Section 4.3.1.
"Development Transfer Plan" shall have the meaning set forth in Section 4.1.
"Differential Expense" shall have the meaning set forth in Section 9.5.4(c).
"Disclosing Party" shall have the meaning set forth in Section 1.23.
"DT" shall have the meaning set forth in Section 3.2.
"Effective Date" shall have the meaning set forth in the first paragraph of this
Agreement.
"Exchange Act" shall have the meaning set forth in Section 17.1.1.
"Force Majeure Event" shall have the meaning set forth in Section 18.5.
"Incurred Shared Expenses" shall have the meaning set forth in Section 9.5.4(a).
"Indemnified Party" shall have the meaning set forth in Section 12.3.1.
"Indemnifying Party" shall have the meaning set forth in Section 12.3.1.
"Internal Detailing Report" shall have the meaning set forth in Section 7.4.3.
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"Joint Committees" shall have the meaning set forth in Section 3.2.
"Lead Patent Party" shall have the meaning set forth in Section 13.4.2.
"Manufacturing and Supply Agreement" shall have the meaning set forth in Section
8.2.
"Marketing Plan" shall have the meaning set forth in Section 6.2.4.
"Medical Affairs Plan" shall have the meaning set forth in Section 6.2.4.
"Milestone Payment" shall have the meaning set forth in Section 9.2.
"Minimum Sales Representatives" shall have the meaning set forth in Section
7.1.1.
"Negotiating Party" shall have the meaning set forth in Section 2.7.
"New Indication" shall have the meaning set forth in Section 4.6.
"Parties" and "Party" shall have the meanings set forth in the first paragraph
of this Agreement.
"Patent Infringement Claim" shall have the meaning set forth in Section 13.3.1.
"Pharmacovigilance Agreement" shall have the meaning set forth in Section 5.6.3.
"Provisional Development Plan" shall have the meaning set forth in Section
3.3.2.
"Provisional U.S. Commercialization Plan" shall have the meaning set forth in
Section 6.2.2.
"PT" shall have the meaning set forth in Section 3.2.
"Recalls" shall have the meaning set forth in Section 5.7.
"Receiving Party" shall have the meaning set forth in Section 1.23.
"Reconciliation Payment" shall have the meaning set forth in Section 9.5.4(f).
"Reconciliation Report" shall have the meaning set forth in Section 9.5.4.
"Recording Party" shall have the meaning set forth in Section 9.11.1.
"Registration Rights Agreement" shall have the meaning set forth in Section
9.1.2.
"Relinquished Details" shall have the meaning set forth in Section 7.5.1.
"ROW Commercialization Plan" shall have the meaning set forth in Section 6.3.1.
"ROW Report" shall have the meaning set forth in Section 9.5.1.
"Royalties" shall have the meaning set forth in Section 9.4.1.
"Sales Force" shall have the meaning set forth in Section 7.1.1.
"SC" shall have the meaning set forth in Section 3.2.
"SC Establishment Date" shall have the meaning set forth in Section 3.3.1.
"Serono" shall have the meaning set forth in the first paragraph of this
Agreement.
"Serono Report" shall have the meaning set forth in Section 9.5.2.
"Shared Expenses" shall have the meaning set forth in Section 1.32.
"Stock Purchase Agreement" shall have the meaning set forth in Section 9.1.2.
"Tax Matters Partner" shall have the meaning set forth in Section 9.10.4.
"Tax Proceeding" shall have the meaning set forth in Section 9.10.2.
"Technology Transfer Agreement" shall have the meaning set forth in Section
8.2.2.
"Terminating Party" shall have the meaning set forth in Section 15.4.
"Third Party Claim" shall have the meaning set forth in Section 12.3.1.
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"Total Shared Expenses" shall have the meaning set forth in Section 9.5.4(b).
"U.S. Commercialization Plan" shall have the meaning set forth in Section 6.2.1.
ARTICLE 2
LICENSES AND RELATED RIGHTS AND OBLIGATIONS
2.1 License Grants from CancerVax to Serono.
2.1.1 Technology License. Subject to the terms and conditions of
this Agreement, CancerVax hereby grants to Serono a license
(with the right to grant sublicenses in accordance with
Section 2.3) under the CancerVax Technology to Develop
Commercialize, Manufacture or use the Product in the Field
anywhere in the world, each of the foregoing solely to the
extent necessary to fulfill its obligations, exercise its
rights or carry out the activities contemplated under this
Agreement.
2.1.2 Trademark License. Subject to the terms and conditions of this
Agreement, CancerVax hereby grants to Serono a license (with
the right to grant sublicenses in accordance with Section 2.3)
to use the Product Trademarks and the CancerVax Housemark,
solely with respect to the Product in the Field, solely to the
extent necessary to fulfill its obligations, exercise its
rights or carry out the activities contemplated under this
Agreement, in accordance with ARTICLE 14.
2.1.3 Certain Limitations. Serono shall not exercise anywhere in the
world its license under Section 2.1.1 to Manufacture the
Product except as contemplated under Section 8.2.2 or the
Manufacturing and Supply Agreement. Notwithstanding anything
to the contrary in this Agreement or the Manufacturing and
Supply Agreement, but subject to the last sentence of Section
18.10, Serono shall have no right to sublicense or subcontract
its right to Manufacture the Product, except in respect of
activities undertaken in connection with or following primary
packaging of the Product.
2.1.4 Nature of Rights. The licenses granted to Serono under
Sections 2.1.1 and 2.1.2 shall be co-exclusive with CancerVax
in the United States and exclusive (even as to CancerVax) in
the ROW, each with respect to the Product in the Field;
provided, that CancerVax shall retain non-exclusive rights to
Develop or Manufacture the Product in the ROW pursuant to
Section 2.5.
2.1.5 Third Party Rights. Subject to the terms and conditions of
this Agreement and the Manufacturing and Supply Agreement,
CancerVax shall not grant, or allow its Affiliates to grant,
to any Third Party any license rights under the CancerVax
Technology to Develop, Manufacture, Commercialize or use the
Product in the Field except as reasonably necessary and
permitted to fulfill its obligations or exercise its rights
under this Agreement or the Manufacturing and Supply
Agreement, and in no event shall such grant have a material
adverse effect on the rights or benefits of Serono hereunder.
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2.2 License Grants from Serono to CancerVax.
2.2.1 Technology License. Subject to the terms and conditions of
this Agreement, Serono hereby grants to CancerVax a
co-exclusive license (with the right to grant sublicenses in
accordance with Section 2.3) under the Serono Technology to
Develop, Commercialize, Manufacture or use the Product in the
Field anywhere in the world, each of the foregoing solely to
the extent necessary to fulfill its obligations, exercise its
rights or carry out the activities contemplated under this
Agreement..
2.2.2 Freedom to Operate. Subject to the terms and conditions of
this Agreement, Serono shall not assert or cooperate with or
authorize its Affiliates or any Third Party to assert, any
claim for patent infringement based on (a) the
Commercialization or Manufacture of the Product or (b) the
research, Development or use of the Product anywhere in the
world (each of the foregoing except to the extent required to
defend an infringement action) in each case to the extent such
activities are conducted by CancerVax or its Affiliates,
sublicensees, customers, contractors or any others authorized,
directly or indirectly, by CancerVax in accordance with the
terms and conditions of this Agreement.
2.2.3 Trademark License. Subject to the terms and conditions of this
Agreement, Serono hereby grants to CancerVax a non-exclusive
license (with the right to grant sublicenses in accordance
with Section 2.3) to use the Serono Housemark, solely with
respect to the Product in the Field, solely to the extent
necessary to fulfill its obligations, exercise its rights or
carry out the activities contemplated under this Agreement, in
accordance with ARTICLE 14.
2.2.4 Third Party Rights. Subject to the terms and conditions of
this Agreement and the Manufacturing and Supply Agreement,
Serono shall not grant, or allow its Affiliates to grant, to
any Third Party any license rights under the Serono Technology
to Develop, Manufacture, Commercialize or use the Product in
the Field except as reasonably necessary and permitted to
fulfill its obligations or exercise its rights under this
Agreement or the Manufacturing and Supply Agreement, and in no
event shall such grant have a material adverse effect on the
rights or benefits of CancerVax hereunder.
2.3 Sublicensing and Subcontracting.
2.3.1 Certain Sublicense Requirements. Serono may only grant
sublicenses with respect to the Commercialization of the
Product as provided in this Section 2.3.1. CancerVax may only
grant sublicenses as provided in this Section 2.3.1. A
sublicensing Party may (a) without the consent of the other
Party, grant sublicenses to such Party's Affiliates or
commercial distributors, each only to the extent required in
the ordinary course of business as conducted with such Party's
other products, or (b) with the other Party's consent, such
consent not to be unreasonably withheld, conditioned or
delayed, as part of a license of rights to the Product in the
Field, in each case where the sublicensee has first agreed in
writing
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that such sublicensee is subject to the terms and conditions
of this Agreement and in the case of clause (b), a copy of the
proposed sublicense shall have been provided to the other
Party for review (financial terms not relating to this
Agreement may be redacted) prior to execution.
2.3.2 General Application. For all sublicenses under Section 2.3.1,
the identity of each sublicensee shall be notified to the
other Party and a copy of each sublicense agreement (except
those between a Party and its Affiliates) shall be provided to
the other Party (financial terms not relating to this
Agreement may be redacted) prior to execution. Each Party
shall remain strictly liable for any act or omission of any
sublicensee or subcontractor (excluding any sublicensee or
subcontractor that is the other Party or one of the other
Party's Affiliates).
2.4 Know-How Use and Transfer Restrictions.
2.4.1 Obligations of Serono. Notwithstanding anything to the
contrary in this Agreement or any Related Agreement, Serono
shall use the CancerVax Know-How solely for purposes of
fulfilling its obligations or exercising its rights under this
Agreement, and not for any other use or purpose, without the
prior express written consent of CancerVax. Furthermore,
except as otherwise expressly provided in this Agreement,
Serono (a) shall not transfer or provide access to the
CancerVax Know-How to any Third Party and (b) shall limit
access to the CancerVax Know-How to those of its employees,
advisors or agents who have a need to know in connection with
the fulfillment of its obligations or the exercise of its
rights under this Agreement.
2.4.2 Obligations of CancerVax. Notwithstanding anything to the
contrary in this Agreement or any Related Agreement, CancerVax
shall use the Serono Know-How solely for purposes of
fulfilling its obligations or exercising its rights under this
Agreement, and not for any other use or purpose, without the
prior express written consent of Serono. Furthermore, except
as otherwise expressly provided in this Agreement, CancerVax
(a) shall not transfer or provide access to the Serono
Know-How to any Third Party and (b) shall limit access to the
Serono Know-How to those of its employees, advisors or agents
who have a need to know in connection with the fulfillment of
its obligations or the exercise of its rights under this
Agreement.
2.5 No Implied License; Retained Rights. Nothing in this Agreement shall be
deemed to constitute the grant of any license or other right to either
Party in respect of any intellectual property of the other Party,
except as expressly set forth herein, and no license rights shall be
created hereunder by implication, estoppel or otherwise. Neither Party
shall represent to any Third Party that it enjoys or exercises any
proprietary or property right or otherwise has any other right, title
or interest in the intellectual property of the other Party except for
such rights as are expressly set forth herein. Any rights of a Party
not expressly granted to the other Party under the provisions of this
Agreement shall be retained by such Party. In addition, each Party
shall retain rights in its
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intellectual property to the extent necessary for it to carry out the
activities contemplated under this Agreement.
2.6 Exclusivity.
2.6.1 Restrictions on Serono's Commercialization. [***] (such
period, the "Competing Product Prohibition Period"), neither
Serono nor any of its Affiliates shall Commercialize a
Competing Product, or assist or cooperate with any Person in
any way in connection with such Commercialization. If,
following the Competing Product Prohibition Period, Serono or
any of its Affiliates Commercializes a Competing Product, or
assists or cooperates with any Person in any way in connection
with such Commercialization, CancerVax may terminate this
Agreement and the Manufacturing and Supply Agreement upon
thirty (30) days' prior written notice; provided, that Serono
shall, at CancerVax's election, to be made within thirty (30)
days following delivery of such notice of termination to
Serono, continue to supply the Product to CancerVax, its
Affiliate or designee, to the extent that Serono is supplying
Product for Commercialization in the ROW, for a period of
[***] at [***].
2.6.2 [***]
2.6.3 Restrictions on CancerVax's Commercialization. During the
Competing Product Prohibition Period, neither CancerVax nor
any of its Affiliates shall Commercialize a Competing Product,
or assist or cooperate with any Person in any way in
connection with such Commercialization. If, following the
Competing Product Prohibition Period, CancerVax or any of its
Affiliates Commercializes a Competing Product, or assists or
cooperates with any Person in any way in connection with such
Commercialization, subject to Serono providing thirty (30)
days' prior written notice to CancerVax and to Serono's
payment to CancerVax [***] (a) CancerVax shall no longer have
any rights or responsibilities under Sections 6.1.1, 6.1.2 and
6.2 and ARTICLE 7, (b) the PT will be disbanded, (c) the DT
will cease to have responsibilities under Section 3.4.3(d) and
(d) the dispute resolution provisions under Section 16.1 [***]
2.6.4 Effect of Invalidity. In the event of the invalidity or
unenforceability under Law of Section 2.6.1 or 2.6.3, the
Parties agree that such invalidity shall not affect the
validity of the remaining provisions of this Agreement.
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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2.6.5 [***]
2.7 Third Party Licenses.
2.7.1 Determination; Negotiation; Entry. In the event either Party
reasonably determines that a Third Party License may be
required anywhere in the world because, but for such license,
the Development, Manufacture, Commercialization or use of the
Product would infringe on a Third Party's Patent Rights, it
shall promptly notify the SC. If the SC determines it is a
reasonable course of action to seek to enter into such Third
Party License (taking into account factors that include the
likelihood and presumption of validity of a Third Party's
Patent Rights from a practical and legal standpoint in the
relevant country, the cost of obtaining a Third Party License
and the risks of not obtaining such Third Party License), it
shall so notify the Parties in writing, designating a lead
Party to negotiate such Third Party License, which party shall
be the Controlling Party if a Controlling Party has already
been designated pursuant to Section 13.3.1 (the "Negotiating
Party"). Upon the decision of the SC, the Negotiating Party
shall enter into good faith discussions with such Third Party
in order to obtain such Third Party License to such Patent
Rights, in close consultation with the SC. The final terms and
conditions of any Third Party License [***] Unless otherwise
agreed by the Parties, the Negotiating Party shall enter into
the Third Party License.
2.7.2 Unavailability of Third Party License. If such a Third Party
License is unavailable or its terms are unacceptable to either
Party, then [***]
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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ARTICLE 3
COLLABORATION MANAGEMENT
3.1 Alliance Manager. Promptly, but in no event later than ten (10)
Business Days, following the Effective Date, each of CancerVax and
Serono shall appoint a representative (and may replace or temporarily
substitute such representative at its sole discretion) who possesses a
general understanding of the collaboration to act as its contact person
and alliance manager ("Alliance Manager"). Each Alliance Manager shall
be charged with serving as a contact point for the other Party and
coordinating and maintaining a collaborative work environment within
and among the Parties.
3.2 Committees. The collaboration under this Agreement shall generally be
conducted under the supervision of a Steering Committee ("SC") as
described in Section 3.3, a Development Team ("DT") as described in
Section 3.4, a Product Team ("PT") as described in Section 3.5, and, as
and when appropriate, such other committees or teams as may be
reasonably necessary or advisable from time to time, as determined and
established by the SC (the SC, DT, PT and other committees and teams
collectively, the "Joint Committees"). The following provisions shall
apply to all the Joint Committees:
3.2.1 Structure. Each Party shall appoint its respective
representatives to the Joint Committees from time to time, and
may replace or temporarily substitute one or more of its
representatives at its sole discretion, effective upon notice
to the other Party. Each of these representatives shall have
appropriate technical credentials, experience, knowledge and
decision-making authority, and shall maintain ongoing
familiarity with the collaboration hereunder. The Parties
shall cause their respective representatives on the Joint
Committees to use diligent efforts, acting in good faith, to
resolve all matters presented to them as expeditiously as
possible. Each Joint Committee shall have two (2)
co-chairpersons, one (1) of which shall be designated by
CancerVax and one (1) of which shall be designated by Serono.
All decisions of a committee shall be by unanimous vote of its
co-chairpersons, each co-chairperson having one (1) vote,
subject to Section 3.2.4. Each Joint Committee may elect a
secretary for the purposes of maintaining minutes in
accordance with Section 3.2.3.
3.2.2 Meetings. Once established, the chairpersons of each Joint
Committee shall call meetings once every Calendar Quarter or
more frequently as reasonably requested by one of the Parties;
provided, that the SC shall meet upon demand of either Party.
Meetings may be held in person, by telephone or by video
conference call, and the location of each meeting shall be as
agreed by the Parties. Each Party shall be entitled to invite
additional representatives or consultants to attend meetings
where appropriate, subject to advance written notice to the
other Party and no reasonable objection by such Party and, to
the extent such representative or consultant is not an
employee of such Party or such Party's Affiliate, to written
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agreement of such individual to comply with the
confidentiality provisions of this Agreement.
3.2.3 Meeting Minutes. Minutes of each Joint Committee meeting shall
be finalized and distributed no later than thirty (30) days
after such meeting. The chairpersons of such committee shall
each review and approve the final minutes prior to issuance.
Any differences of opinion regarding decisions or
recommendations on the part of the respective co-chairs shall
be duly noted as such. Minutes will be deemed approved unless
either of the co-chairs of the relevant Joint Committee
objects to the accuracy of such minutes by providing written
notice to the other members of such Joint Committee and the
Alliance Managers within fourteen (14) days of receipt of such
minutes. In the event of any such objection that is not
resolved by such Joint Committee (mediated to the extent
necessary by the Alliance Managers), such minutes will be
amended to reflect such unresolved dispute.
3.2.4 [***]
3.3 Steering Committee.
3.3.1 Structure. Unless otherwise agreed by the Parties, the SC
shall consist of eight (8) members in total, with an equal
number of members from each of Serono and CancerVax. Each of
Serono and CancerVax shall notify the other as to its
designees, who shall all be senior executives of their
respective designating Parties. The Parties shall notify each
other as to their respective initial designees within thirty
(30) days following the Effective Date, and the SC shall be
deemed to be established on the date by which each Party shall
have notified the other Party as to their respective initial
designees (the "SC Establishment Date"). [***]
3.3.2 First Meeting. The first meeting of the SC shall occur as soon
as reasonably practicable following the SC Establishment Date,
but in no event later than thirty (30) days following the SC
Establishment Date, unless agreed otherwise by the Parties.
The principal purpose of this initial meeting shall be to (a)
review the current status of Development of the Product, (b)
approve a provisional Development Plan provided to it by
CancerVax (the "Provisional Development Plan") and (c)
constitute and designate the members of the DT.
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3.3.3 Responsibilities. The SC shall be responsible for:
(a) setting the overall Product Development strategy, the
Product Commercialization strategy for the United
States, and monitoring and ensuring the compatibility
of the global Product Commercialization strategy;
(b) generally overseeing the Product Development,
Manufacture and Commercialization efforts of the
Parties, including establishment and oversight of the
other Joint Committees;
(c) approving the Provisional Development Plan;
(d) reviewing and approving the Development Plan and U.S.
Commercialization Plan (including their respective
budgets) and reviewing and commenting on the ROW
Commercialization Plan
(e) consulting with CancerVax regarding Recalls in the
United States for safety reasons or mandated by
Governmental Authorities and approving voluntary
Recalls in the United States, in each case pursuant
to Section 5.7;
(f) approving deviations from Development Plan pursuant
to Section 4.3.3 or Commercialization Plan budget
pursuant to Section 6.2.3 during the Calendar Year;
(g) the resolution of issues referred to it by the other
Joint Committees and other disputes in accordance
with Section 3.2.4; and
(h) performing such other functions as appropriate to
further the purposes of this Agreement as determined
by the Parties, including periodic review of
performance against goals.
3.3.4 Authority. Nothing herein shall limit the authority of the SC
to meet and discuss the progress of the collaboration at their
mutual convenience.
3.4 Development Team. The DT shall be responsible for designing and
implementing all Development and Manufacturing activities for the
Product leading to Approvals and throughout the Product's lifecycle,
subject to oversight of the SC.
3.4.1 Structure. The DT shall consist of a number of members to be
agreed upon by the SC from time to time, with an equal number
of members to be designated by each Party. The SC shall
designate such members, who shall be employees of their
respective Parties in the areas of: research and development,
manufacturing, commercial and regulatory affairs. The SC shall
agree upon the number of members of the DT and designate the
initial members at the initial meeting of the SC. [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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3.4.2 First Meeting. The first meeting of the DT shall occur as soon
as reasonably practicable following designation of its members
in accordance with Section 3.4.1, but in no event later than
thirty (30) days following such designation, unless agreed
otherwise by the Parties. The purpose of this initial meeting
shall be to (a) review the current status of Development of
the Product and (b) agree on a timeline for finalizing the
Development Plan (and associated budget) in accordance with
Section 4.3.2.
3.4.3 Responsibilities. The DT shall be responsible for:
(a) developing and implementing the Development Transfer
Plan in accordance with Section 4.1;
(b) coordinating day-to-day Development activities
relating to the Product and allocating Product
Development tasks between the Parties;
(c) preparing the Development Plan and monitoring
progress against the Development Plan and actual
costs against budgeted costs;
(d) making recommendations to include within the
Development Plan the development of any New
Indication for the Product;
(e) providing forecasts of Product requirements for
Development purposes, including second source needs
and inventory levels; and
(f) performing such other functions as appropriate to
further the purposes of this Agreement as determined
by the SC, including periodic review of performance
against goals.
3.5 Product Team. The PT shall be responsible for (a) planning and
implementing all Commercialization activities for the Product in the
United States and (b) designing and implementing all post-Approval
clinical and medical development activities for the Product, in each
case subject to oversight of the SC.
3.5.1 Structure. The PT shall consist of a number of members to be
agreed upon by the SC from time to time, with an equal number
of members to be designated by each Party. The SC shall
designate such members, who shall be commercial, regulatory,
marketing and medical managers of their respective Parties.
The SC shall designate the initial members within ninety (90)
days following the Effective Date. [***]
3.5.2 First Meeting. The first meeting of the PT shall occur as soon
as reasonably practicable following designation of its members
in accordance with Section 3.5.1, but in no event later than
thirty (30) days following such designation, unless agreed
otherwise by the Parties.
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the Commission. Confidential treatment has been requested with respect to the
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3.5.3 Responsibilities. The PT shall be responsible for the
following:
(a) serving as a forum for the coordination of the global
Product Commercialization, the goal of which is a
uniform global marketing message for the Product;
(b) preparing the U.S. Commercialization Plan, including
the Marketing Plan and the Medical Affairs Plan (and
their respective budgets), and maintaining forecast
budgets for the next two (2) succeeding Calendar
Years;
(c) making recommendations to include within the U.S.
Commercialization Plan the development of any new
product presentation, formulation or usage for the
Product;
(d) providing forecasts of commercial supply requirements
for the Product in the United States, including,
subject to the Manufacturing and Supply Agreement,
optimal inventory levels and safety stock targets;
(e) monitoring progress of the Parties' activities
against the U.S. Commercialization Plan and actual
U.S. Commercialization Plan costs against budgeted
U.S. Commercialization Plan costs;
(f) reviewing the ROW Commercialization Plan;
(g) coordinating with the DT with respect to regulatory
issues and future Product Development activities to
be undertaken pursuant to the Development Plan;
(h) developing positioning and market strategies
consistent with the U.S. Commercialization Plan, and
developing advertising and Promotional Materials,
designing packaging (in cooperation with the DT), and
planning and overseeing educational and professional
symposia and speaker programs for the Product in the
United States; and
(i) performing such other functions as appropriate to
further the purposes of this Agreement as determined
by the SC, including periodic reviews of performance
against goals.
ARTICLE 4
DEVELOPMENT OF PRODUCT
4.1 Development Transfer Plan. [***]
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4.2 Development Activities. In preparing the Development Plan, the DT will
allocate Product Development tasks in a manner designed to expedite the
Development of the Product and to reflect, on a territorial basis, the
Parties' respective rights and responsibilities for the
Commercialization of the Product. Each Party will use Commercially
Reasonable Efforts to accomplish the tasks that it is assigned under
the Development Plan. The Parties recognize that Serono and CancerVax
may mutually benefit from designing clinical trials and conducting
other Product Development activities in a manner that optimizes their
usefulness throughout the world, and each Party will use Commercially
Reasonable Efforts to achieve this result. In no event, without the
consent of the SC, shall either Party adopt a Product Development
strategy that would reasonably be expected to cause a material adverse
effect on the other Party's Development of the Product. If the DT
determines that such a material adverse effect would reasonably be
expected to occur, then the DT shall prepare a proposal designed to
minimize any such material adverse effect across the entire world in a
manner consistent with the terms of this Agreement, with priority given
to minimizing the effect on those countries that have the most
significant commercial value or potential. Such proposal shall be
subject to review and approval by the SC.
4.3 Development Plan.
4.3.1 Purpose. The DT shall prepare a written plan for such
worldwide Product Development efforts (including clinical
trials, other than Phase IV Clinical Trials, and target
product profiles), which shall set forth the annual work plan
and budget (as further described in Section 4.5.1) and shall
assign responsibilities to the Parties, subject to the
principles set forth in Section 4.2 and any allocation of
responsibilities set forth in this Agreement (as agreed,
approved and amended from time to time pursuant hereto, the
"Development Plan"). For clarity, unless the context clearly
indicates to the contrary, references herein to the
"Development Plan" shall mean the Provisional Development Plan
or the then-current Development Plan, as the case may be.
4.3.2 Provisional Development Plan. At the first meeting of the DT,
CancerVax shall present to the DT the Provisional Development
Plan previously approved by the
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omitted portions.
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SC, and the DT shall review the Provisional Development Plan
and, within thirty (30) days of such meeting, or such other
period of time as may be required and agreed by the co-chairs,
shall make any revisions to the Provisional Development Plan
as it may deem necessary. Such revised Provisional Development
Plan shall be submitted by the DT to the SC. The SC shall,
within thirty (30) days of receipt of such revised Provisional
Development Plan, meet to review, modify (as it may deem
necessary) and approve such revised Provisional Development
Plan, which thereafter shall become the Development Plan.
[***]
4.3.3 Changes to Development Plan. The Development Plan shall be
subject to ongoing revision through the normal activity of the
DT; provided, that any change or addition to the Development
Plan that, either alone or together with any other change(s)
made to the Development Plan by the DT since the last formal
approval of the Development Plan by the SC, would result in a
change in the overall Development Plan budget last formally
approved by the SC, or in Development Expenses to be incurred
in any Calendar Year, [***]
4.4 Development Efforts.
4.4.1 Efforts. Each of CancerVax and Serono shall use Commercially
Reasonable Efforts to execute and perform, or cause to be
performed, the activities assigned to it in the Development
Plan or under this Agreement, and to cooperate with the other
Party in carrying out the Development Plan, in each case in
good scientific manner and in compliance with all Laws
(including good clinical and laboratory practices).
4.4.2 Progress Reports. Each Party shall receive regular updates on
Product Development activities through the direct
participation of its members of the DT and circulation of DT
meeting minutes. In addition, each Party shall separately
notify the other Party in a timely fashion of any anticipated
or actual deviation from timelines set forth in the
Development Plan.
4.4.3 Right to Audit. Each Party shall (a) use Commercially
Reasonable Efforts to ensure that the other Party's authorized
representatives, to the extent not prohibited by Law, upon
reasonable advance notice and no more frequently than twice
per Calendar Year, and (b) ensure that Governmental
Authorities, to the extent required by Law, may, in each case
during regular business hours, (x) examine and inspect the
facilities of such Party (or, subject to any Third Party
confidentiality restrictions or obligations, of any
subcontractor or sublicensee used by it) used in Development
of the Product and (y) inspect all its (or, subject to Law and
any Third Party confidentiality restrictions or obligations,
any
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subcontractor's or sublicensee's) data, documentation and work
product generated in the Development of the Product, including
medical records of any patient participating in any clinical
study, subject to such Party's record retention policies then
in effect. For clarity, financial audits shall be governed by
Section 9.11.
4.5 Development Funding.
4.5.1 Development Budget. The Development budget for the Product
shall be set forth in the Development Plan and shall be
sufficient to fund Product Development. The Development budget
for the current and the next two (2) succeeding Calendar Years
shall be specified in detail; provided, that the budgets for
the next two (2) succeeding Calendar Years need only be good
faith estimates.
4.5.2 Sharing of Development Expenses. The Parties shall, pursuant
to the mechanism provided in Section 9.5.4, share equally all
Development Expenses. Each Party shall charge all such
expenses incurred to a separate account created by it on its
books and records solely for the purpose of tracking
Development Expenses for the Product. Financial audits shall
be governed by Section 9.11.
4.6 Certain Clinical Trials.
4.6.1 Development of Additional Indications Outside the Development
Plan. Notwithstanding anything to the contrary in this
Agreement, the Development Plan will not include Product
Development activities for any indication(s) in the Field
other than [***] (a "New Indication"), unless and until the
Development of a New Indication has been [***]
4.6.2 Unilateral Clinical Trials By CancerVax. Notwithstanding
anything to the contrary in this Agreement, in the event
CancerVax wishes to conduct a clinical trial for the Product
[***]
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4.6.3 Unilateral Clinical Trials By Serono. Notwithstanding anything
to the contrary in this Agreement, in the event Serono wishes
to conduct a clinical trial for the Product [***]
ARTICLE 5
REGULATORY MATTERS
5.1 Access to Data; Notice; Comments. Each Party shall have access to all
data generated pursuant to the Development Plan or contained or
referenced in regulatory submissions or applications for Approvals
(e.g., INDs, BLAs and their foreign counterparts), including all
reports, correspondence and conversation logs, in each case to the
extent reasonably necessary or useful to either Party in the
fulfillment of its obligations or exercise of its rights under this
Agreement to Develop, Manufacture or Commercialize the Product. Each
Party shall provide appropriate notification of such right of the other
Party to the Governmental Authorities. Each Party agrees to consider
all comments provided pursuant to this ARTICLE 5 in good faith, taking
into account the best interest of the Product on a global basis,
subject to legal, moral and financial considerations.
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5.2 Clinical Trial Data. All clinical data, database information and
reports related to clinical trials for the Product for [***] and all of
Serono's rights to use such data and reports shall terminate upon the
termination or expiration of this Agreement. All such data and reports
shall be centralized and held at a location to be chosen by the DT,
with a duplicate set available to each Party for deposit at a site of
its own selection. The Parties will have equal access to such data and
reports, and neither Party shall be entitled to access any data that is
not available at the same time to the other Party (e.g., access to
unblinded data from an ongoing, blinded clinical trial).
5.3 Filings with Governmental Authorities. CancerVax will be responsible
for and will use Commercially Reasonable Efforts in applying for,
obtaining, supporting and maintaining Approvals for the Product in the
United States and Serono will be responsible for and will use
Commercially Reasonable Efforts in applying for, obtaining, supporting
and maintaining Approvals for the Product in the ROW. Upon reasonable
request by the responsible Party, the other Party shall use
Commercially Reasonable Efforts to assist the responsible Party in
applying for, obtaining, supporting and maintaining the Approvals for
the Product for which the responsible Party is responsible. The
responsible Party will be the owner of any Approvals received by it for
the Product. Upon receipt of an Approval for the Product, the
responsible Party shall have authority and responsibility to and will
use Commercially Reasonable Efforts to maintain and seek appropriate
revisions of the conditions, if applicable, of each such Approval.
5.4 Communication with Governmental Authorities. In connection with the
Development, Manufacture and Commercialization of the Product, and in
accordance with the Development Plan and subject to the oversight of
the SC, except as otherwise provided in the Manufacturing and Supply
Agreement:
5.4.1 In the United States. CancerVax shall be responsible for and
act as the sole point of contact for communications with
Governmental Authorities in the United States. Any
correspondence directed to Serono from Governmental
Authorities in the United States shall promptly, but in no
event more than two (2) Business Days after such receipt or
contact, be forwarded to CancerVax for coordination of
response. Subject to the provisions of the Pharmacovigilance
Agreement, Serono shall not, without the consent of CancerVax
(which consent shall not be unreasonably withheld or delayed),
correspond or communicate with any Governmental Authority in
the United States concerning the Product, or otherwise take
any action with any Governmental Authority in the United
States concerning any Approval under which the Product is sold
or any application for the same, except as may be required by
Law (and then only pursuant to the terms of this Section
5.4.1, Section 5.5 and the Pharmacovigilance Agreement to the
extent reasonably possible). Furthermore, Serono shall,
promptly upon receipt of any contact with or communication
from any Governmental Authority relating to the Product, but
in no event more than two (2) Business Days after such receipt
or
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contact, forward a copy or description of the same to
CancerVax and respond to all reasonable inquiries by CancerVax
relating thereto. If Serono is advised by its counsel that it
must communicate with any Governmental Authority in the United
States concerning the Product notwithstanding the first
sentence of this Section 5.4.1, then Serono shall promptly,
but in no event more than two (2) Business
Days later, advise CancerVax of the same and provide CancerVax
in advance with a copy of any proposed written communication
with such Governmental Authority and comply with any and all
reasonable requests of CancerVax concerning any meeting or
written or oral communication with such Governmental
Authority.
5.4.2 In the ROW. Serono (or one of its Affiliates) shall be
responsible for and act as the sole point of contact for
communications with Governmental Authorities in the ROW. Any
correspondence directed to CancerVax from Governmental
Authorities in the ROW shall promptly, but in no event more
than two (2) Business Days after such receipt or contact, be
forwarded to Serono for coordination of response. Subject to
the provisions of Section 5.5 and the Pharmacovigilance
Agreement, CancerVax shall not, without the consent of Serono
(which consent shall not be unreasonably withheld or delayed),
correspond or communicate with any Governmental Authority in
the ROW concerning the Product, or otherwise take any action
with any Governmental Authority in the ROW concerning any
Approval under which the Product is sold or any application
for the same, except as may be required by Law (and then only
pursuant to the terms of this Section 5.4.2, Section 5.5 and
the Pharmacovigilance Agreement to the extent reasonably
possible). Furthermore, CancerVax shall, promptly upon receipt
of any contact with or communication from any Governmental
Authority relating to the Product, but in no event more than
two (2) Business Days after such receipt or contact, forward a
copy or description of the same to Serono and respond to all
reasonable inquiries by Serono relating thereto. If CancerVax
is advised by its counsel that it must communicate with any
Governmental Authority in the ROW concerning the Product
notwithstanding the first sentence of this Section 5.4.2, then
CancerVax shall promptly, but in no event more than two (2)
Business Days later, advise Serono of the same and provide
Serono in advance with a copy of any proposed written
communication with such Governmental Authority and comply with
any and all reasonable requests of Serono concerning any
meeting or written or oral communication with such
Governmental Authority.
5.4.3 Certain Obligations. The Party responsible for communications
with and to any Governmental Authority relating to the Product
shall issue a report to the other Party within five (5)
Business Days after completion of each Calendar Quarter,
apprising the other Party of all material regulatory
communications with Governmental Authorities relating to the
Product for such Calendar Quarter. In the event that the other
Party desires to discuss any such regulatory communication,
the other Party may, from time to time, discuss such matters
with the responsible Party's regulatory department or through
the Joint Committees. In addition and subject to Section
5.6.2, the Party responsible for preparing
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communications with and to any Governmental Authority shall
(a) provide the DT with a copy of any material documents to be
submitted to, and correspondence with, Governmental
Authorities, sufficiently in advance of the intended
submission dates to enable the DT to review and provide
recommendations to the submitting Party concerning the content
thereof and (b) within five (5) Business Days after completion
of any inspections by any Governmental Authority with respect
to the Product, provide to the other Party a summary of such
inspection, the outcome and, as soon as available, any
corrective actions, all to the extent related directly and
solely to the Product.
5.4.4 Participation in U.S. Meetings. Serono will have the right to
identify up to two (2) mutually acceptable representatives to
participate as an observer in all material meetings and other
contact with the Governmental Authorities pertaining to the
Product in the United States. To the extent reasonably
possible, CancerVax shall provide Serono with reasonable
advance notice of all such meetings and other contact and
advance copies of all related documents and other relevant
information relating to such meetings or other contact.
5.4.5 Participation in ROW Meetings. CancerVax will have the right
to identify up to two (2) mutually acceptable representatives
to participate as an observer in all material meetings and
other contact with the Governmental Authorities pertaining to
the Product in the ROW. To the extent reasonably possible,
Serono shall provide CancerVax with reasonable advance notice
of all such meetings and other contact and advance copies of
all related documents and other relevant information relating
to such meetings or other contact.
5.5 Step-In Rights. In the event that either Party fails to use
Commercially Reasonable Efforts to seek or maintain any Approval in any
country as provided in the Development Plan or either Commercialization
Plan (such Party, the "Defaulting Party"), in addition to any other
rights or remedies that the other Party may have, such Party shall have
the right to seek or maintain such Approval, either in such Party's or
the Defaulting Party's name, upon sixty (60) days prior written notice
to the Defaulting Party. In such event, the Defaulting Party shall
cooperate with the other Party's efforts to seek or maintain such
Approval in such country and, if necessary, shall designate the other
Party as its agent for such purpose; provided, that if the Defaulting
Party provides the other Party with assurances reasonably satisfactory
to the other Party of such Defaulting Party's plan for immediately
resuming Commercially Reasonable Efforts to seek or maintain such
Approval within such sixty (60) day period, then the other party shall
not undertake such efforts to obtain such Approval for so long as the
Defaulting Party continues to use Commercially Reasonable Efforts to
seek or maintain such Approval.
5.6 Regulatory Information.
5.6.1 Assistance. Each Party agrees to provide the other Party (at
the first Party's expense) with all reasonable assistance and
take all actions reasonably requested by the other Party that
are reasonably necessary to enable the other Party to comply
with any Laws applicable to the Product, including each Party
meeting its
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reporting and other obligations to maintain and update any
Approvals for the Product.
5.6.2 Notice. Each Party shall provide the other Party with notice,
within twenty-four (24) hours, of notification or other
information which it receives (directly or indirectly) from,
any Governmental Authority (and providing, as soon as
reasonably possible, copies of any associated written
requests) that (a) raises any material concerns regarding the
safety or efficacy of the Product, (b) indicates or suggests a
Claim of a Third Party arising in connection with the Product
or (c) is reasonably likely to lead to a Recall; provided,
that neither Party shall be obliged to disclose information in
breach of any contractual restriction that it could not
reasonably have avoided. Information that shall be disclosed
(to the extent it relates to the subject matter of clauses (a)
through (c), inclusive) pursuant to this Section 5.6.1 shall
include:
(a) inspections by a Governmental Authority of
Manufacturing, distribution or other related
facilities concerning the Product;
(b) inquiries by a Governmental Authority concerning
clinical investigation activities (including
inquiries of investigators, clinical monitoring
organizations and other related parties) with respect
to the Product;
(c) any material communication (in any form, including
written, oral or electronic form) from a Governmental
Authority involving the Manufacture or
Commercialization of the Product, or any other
Governmental Authority reviews or inquiries relating
to a any event set forth in this Section 5.6.1;
(d) an initiation of any Governmental Authority
investigation, detention, seizure, or injunction
concerning the Product; and
(e) any other regulatory action (e.g., proposed labeling
or other registrational dossier changes and Recalls)
which would affect the Product in any country.
5.6.3 Exchange of Drug Safety Information. As soon as reasonably
necessary, the Parties shall enter into a Pharmacovigilance
and Global Safety Reporting Agreement reasonably acceptable to
both Parties in respect of the Product (the "Pharmacovigilance
Agreement"). Each Party shall ensure that, in the Development,
Manufacture or Commercialization of the Product, it and each
of its respective Affiliates will record, investigate,
summarize and review all Adverse Drug Experiences in
accordance with Law and the Pharmacovigilance Agreement. Each
Party shall require that such Affiliates (a) adhere to all
requirements of Laws which relate to the reporting and
investigation of Adverse Drug Experiences and (b) keep such
Party informed of such events. The Pharmacovigilance Agreement
will provide that CancerVax shall be responsible for
maintenance of the global safety database and global safety
monitoring, except
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to the extent prohibited by Law; provided, that any
communication or notification of a Government Authority
arising from such monitoring or maintaining the global safety
database will be reviewed by the SC prior to such
communication or notification and subject to Section 5.4.
5.7 Recalls. CancerVax, in close consultation with the SC and the CEOs of
both Parties, shall make any decisions with respect to any recall,
market withdrawals or any other corrective action related to the
Product (collectively, "Recalls") in the United States for safety
reasons or as may be mandated by Governmental Authorities in the United
States, and shall have responsibility for executing such Recalls.
Serono, in close consultation with the SC and the CEOs of both Parties,
shall make all decisions with respect to Recalls in the ROW for safety
reasons or as may be mandated by Governmental Authorities in the ROW,
and shall have responsibility for executing such Recalls. The SC shall
make any decisions with respect to any Recalls in the United States or
the ROW for any other reason (i.e., voluntary Recalls), and, unless
otherwise agreed by the Parties, CancerVax shall have responsibility
for executing such Recalls in the United States and Serono shall have
the responsibility for executing such Recalls in the ROW. Each Party
shall promptly notify the other Party of any decision by such Party to
conduct any Recalls for safety reasons or as mandated by Governmental
Authorities; provided, that, if reasonably practicable, such notice
shall occur prior to such action so as to permit the notified Party a
reasonable opportunity to consult with the notifying Party with respect
thereto. Each Party shall promptly notify the other Party of any
recommendation by such Party to conduct a Recall for any other reason,
for consideration by the SC.
5.8 Events Affecting Integrity or Reputation. The Parties shall notify each
other immediately of any circumstances of which they are aware and
which could impair the integrity and reputation of the Product or if a
Party is threatened by the unlawful activity of any Third Party in
relation to the Product, which circumstances shall include, by way of
illustration, deliberate tampering with or contamination of the Product
by any Third Party as a means of extorting payment from the Parties or
another Third Party. In any such circumstances, the Parties shall use
Commercially Reasonable Efforts to limit any damage to the Parties or
to the Product. The Parties shall promptly call a SC meeting to discuss
and resolve such circumstances.
5.9 Medical Inquiries. Serono shall be responsible for responding to
medical inquiries and for developing, in consultation with CancerVax
medical affairs personnel, standardized medical information letters as
soon as practicable after new scientific or clinical information
becomes available. Serono will provide electronic copies of all final
medical information letters to CancerVax simultaneously with providing
such letters to Serono's own Sales Force. Serono shall identify to
CancerVax the Person or Persons to whom CancerVax and its Affiliates
shall refer all medical questions or inquiries from members of the
medical and paramedical professions and consumers regarding the
Product. As soon as reasonably necessary, Serono shall, in consultation
with CancerVax medical affairs personnel, develop a set of standard
operating procedures for responding promptly to medical questions or
inquiries from members of the medical and paramedical professions and
consumers relating to the Product. In addition, Serono will ensure that
it
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has or will develop processes to train personnel to respond
consistently to such questions or inquiries.
5.10 Pricing and Reimbursement. [***]
5.11 Costs. Except as otherwise expressly provided in this ARTICLE 5, [***]
ARTICLE 6
COMMERCIALIZATION
6.1 Commercialization Activities.
6.1.1 Promotion. The Parties shall Co-Promote the Product in the
United States in accordance with ARTICLE 7. Serono shall be
responsible for Commercializing the Product in the ROW in its
sole discretion, subject to this Agreement, including Section
6.3.5 and ARTICLE 14.
6.1.2 Booking, Processing and Distribution. Serono shall have the
sole right and responsibility to (a) receive and accept orders
for the Product from customers in the ROW, (b) distribute the
Product to customers in the ROW, (c) control invoicing and
collection of accounts receivable for Product sales in the
ROW, (d) grant any discounts, rebates, chargebacks or
allowances in the ROW, (e) contract with managed care
organizations, hospital systems, group purchasing
organizations, physician networks and any other private or
government healthcare provider or reimbursement entity in the
ROW and (f) record Product sales in its books of account for
sales in the ROW. CancerVax shall have the sole right and
responsibility to (x) unless otherwise agreed by the Parties,
distribute the Product to customers in the United States and
(y) record Product sales in its books of account for sales in
the United States. In accordance with the U.S.
Commercialization Plan, Serono shall, unless otherwise agreed
by the Parties, (i)
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receive and accept orders for the Product from customers in
the United States, (ii) on behalf of CancerVax, invoice and
collect accounts receivable for Product sales in the United
States, (iii) subject to Section 5.10, grant any discounts,
rebates, chargebacks or allowances in the United States and
(iv) contract with managed care organizations, hospital
systems, group purchasing organizations, physician networks
and any other private or government healthcare provider or
reimbursement entity in the United States.
6.1.3 Returns. If any quantities of the Product sold in the ROW are
returned to CancerVax, CancerVax shall immediately notify
Serono and ship them to the facility designated by Serono,
with any reasonable or authorized shipping or other documented
direct cost to be paid by Serono. CancerVax, at its option,
may advise the customer who made the return that the Product
should have been returned to Serono, but shall take no other
steps in respect of any return without the consent of Serono,
such consent not to be unreasonably withheld or delayed. At
Serono's request, CancerVax shall destroy the Product, the
cost of such destruction (by either Party) to be deemed a
Commercial Expense. If any quantities of the Product sold in
the United States are returned to Serono, Serono shall
immediately notify CancerVax and ship them to the facility
designated by CancerVax, with any reasonable or authorized
shipping or other documented direct cost to be paid by
CancerVax. Serono, at its option, may advise the customer who
made the return that the Product should have been returned to
CancerVax, but shall take no other steps in respect of any
return without the consent of CancerVax, such consent not to
be unreasonably withheld or delayed. At CancerVax's request,
Serono shall destroy the Product, the cost of such destruction
(by either Party) to be deemed a Commercial Expense.
Notwithstanding anything to the contrary in this Section
6.1.3, if Product is returned due to a Manufacturing defect
within the scope of the Manufacturing and Supply Agreement,
then the Manufacturing and Supply Agreement shall control,
including as to the Party responsible for all costs associated
with such return.
6.2 U.S. Commercialization.
6.2.1 U.S. Commercialization Plan. The PT shall prepare a written
plan for the Product Commercialization efforts in the United
States, which shall set forth the goals and objectives for
Commercialization of the Product in the pertinent Calendar
Year (including determinations of Product Trademarks, subject
to Section 14.1.1 and the proviso to (b)), a budget therefor
(as further described below) and applicable items described in
Section 6.2.4, and shall assign responsibilities to the
Parties, subject to any allocation of responsibilities set
forth in this Agreement (as agreed, approved and amended from
time to time pursuant hereto, the "U.S. Commercialization
Plan"). In connection with the preparation and implementation
of the U.S. Commercialization Plan, CancerVax and Serono will
make available to the PT global marketing intelligence and
market research information then in their possession
pertaining to the Product, the usage of the Product and market
trends. For clarity, unless the context clearly indicates to
the contrary, references herein to the "U.S. Commercialization
Plan" shall mean the
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Provisional U.S. Commercialization Plan or the then-current
U.S. Commercialization Plan, as the case may be.
6.2.2 Provisional U.S. Commercialization Plan. Within thirty (30)
days of the formation of the PT, CancerVax shall submit to the
PT a preliminary U.S. Commercialization Plan for 2005,
including a budget [***] (the "Provisional U.S.
Commercialization Plan"), [***] At the first meeting of the
PT, the PT shall review the Provisional U.S. Commercialization
Plan and, within thirty (30) days of such meeting, or such
other period of time as may be required and agreed by the
co-chairs of the PT, shall make any revisions to the
Provisional U.S. Commercialization Plan as it may deem
necessary. Such revised Provisional U.S. Commercialization
Plan shall be submitted by the PT to the SC. The SC shall,
within thirty (30) days of receipt of such revised Provisional
U.S. Commercialization Plan, meet to review, modify (as it may
deem necessary) and approve such revised Provisional U.S.
Commercialization Plan, which thereafter shall become the U.S.
Commercialization Plan for 2005. In addition, on or before
October 1, 2005, the PT shall prepare a U.S. Commercialization
Plan for 2006. The SC shall review and approve such U.S.
Commercialization Plan within ninety (90) days following its
submission by the PT, but in any event before such U.S.
Commercialization Plan is implemented.
6.2.3 Subsequent U.S. Commercialization Plan. The U.S.
Commercialization Plan shall be subject to ongoing revision
through the normal activity of the PT; provided, that any
revisions that in themselves or together with all other
revisions result in a change in the budget [***] On or before
September 30 of each Calendar Year during the Term, the PT
shall formally review and update the U.S. Commercialization
Plan and prepare a revised U.S. Commercialization Plan for the
following Calendar Year. The SC shall review and approve such
annual U.S. Commercialization Plan within ninety (90) days
following its submission by the PT, but in any event before
such U.S. Commercialization Plan is implemented.
6.2.4 Contents of U.S. Commercialization Plan. The U.S.
Commercialization Plan shall consist of a marketing plan (the
"Marketing Plan") and a medical affairs plan (the "Medical
Affairs Plan"). Each Marketing Plan shall contain at a
minimum:
(a) plans for branding and positioning;
(b) promotional campaigns and messaging by audience;
(c) life cycle plans including future presentations,
formulations, usage or dosage forms;
(d) competitive analysis;
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(e) plans and strategies for major meetings and
conventions;
(f) headcount plans for marketing and market research;
(g) market research plans;
(h) distribution plans;
(i) strategies with respect to managed care
organizations, hospital systems, group purchasing
organizations, physician networks and any other
private or government healthcare providers or
reimbursement entities;
(j) pricing and reimbursement plans;
(k) high-level sales plans and activities, including
Sales Force matters and appropriate Co-Promotion
activities, the minimum number of Details required
from each Party and plans and a budget for an annual
joint training session pursuant to Section 7.2.2;
(l) concepts for development of appropriate sales
training and Promotional Materials;
(m) sales forecast by year for five (5) years with market
sensitivities incorporated; and
(n) a budget for Commercial Expenses pursuant to Section
6.2.8.
Each Medical Affairs Plan shall contain at a minimum:
(o) Phase IV Clinical Trial plans and post-marketing
surveillance initiatives for the Product;
(p) market and key opinion leader development plans,
including continuing medical education plans;
(q) publication plans;
(r) plans to ensure appropriate medical information
responses;
(s) safety monitoring plans; and
(t) plans and expected activities for field based medical
affairs personnel.
6.2.5 Efforts. Each of CancerVax and Serono shall use Commercially
Reasonable Efforts to execute and perform, or cause to be
performed, the activities assigned to it in the U.S.
Commercialization Plan or this Agreement and to cooperate with
the other Party in carrying out the U.S. Commercialization
Plan and Co-Promoting the Product. The Parties shall use
Commercially Reasonable Efforts to ensure compliance with the
American Medical Association Guidelines on Gifts
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to Physicians from Industry, the U.S. Office of the Inspector
General's Compliance Program Guidelines for Pharmaceutical
Manufacturers, the Pharmaceutical Researchers and
Manufacturers of America Code on Interactions with Healthcare
Professionals, and all Accreditation Council for Continuing
Medical Education guidelines, in each case as then in effect,
or such other polices or procedures of such nature as may be
agreed by the Parties from time to time.
6.2.6 Progress Reports. Each Party shall receive regular updates on
Product Commercialization activities through the direct
participation of its members of the PT, and circulation of the
related meeting minutes. In addition, the PT shall provide the
SC with reports of the Parties' respective Product
Commercialization activities in the United States within
thirty (30) days after the end of each Calendar Quarter.
6.2.7 Promotional Materials.
(a) Creation of Promotional Materials. The Parties will
jointly, through the PT, create and develop
Promotional Materials for use in the United States,
subject to Section 14.2. The Parties will also
jointly, through the PT, select an advertising and/or
public relations agency or agencies to support
Commercialization of the Product, and each Party will
have equal access to the services provided by such
agency or agencies.
(b) Promotional Materials Inventory. The PT shall
determine which Party shall be responsible for
producing and, in the United States, distributing all
Promotional Materials, and the Sales Forces of both
Parties shall be provided with equal access to all
Promotional Materials. Subject to Serono's ownership
rights in the Serono Housemark and Copyrighted Works
as set forth in ARTICLE 14, and subject to
CancerVax's ownership rights in the CancerVax
Housemark and the Copyrighted Works as set forth in
ARTICLE 14, the Parties shall jointly own all right,
title and interest in and to such inventory of
Promotional Materials.
6.2.8 U.S. Commercialization Budget. The Commercialization budget
for the Product in the United States shall be (a) set forth in
and comprise part of the U.S. Commercialization Plan and (b)
divided as between the Marketing Plan and the Medical Affairs
Plan. Unless otherwise agreed by the Parties without resort to
the dispute resolution procedures of Section 16.2 [***]
6.2.9 Sharing of U.S. Commercial Expenses. The Parties shall,
pursuant to the mechanism provided in Section 9.5.4, share
equally all Commercial Expenses for the United States. Each
Party shall charge all such expenses incurred to a separate
account created by it on its books and records solely for the
purpose of
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tracking Commercial Expenses for the Product. Financial
audits shall be governed by Section 9.11.
6.3 ROW Commercialization.
6.3.1 ROW Commercialization Plan. Serono shall prepare a written
plan for the Product Commercialization in the ROW, which shall
set forth the goals and objectives for Commercialization of
the Product in the pertinent Calendar Year (including
determinations of Product Trademarks, subject to Section
14.1.1 and the proviso to (b)) and a budget therefor (as
amended from time to time pursuant hereto, the "ROW
Commercialization Plan"). In connection with the review of the
ROW Commercialization Plan, Serono will make available to the
PT global marketing intelligence and market research
information then in its possession pertaining to the Product,
the usage of the Product and market trends. The ROW
Commercialization Plan (including its budget) shall not
require CancerVax to conduct any activities, allocate any
resources, pay any costs or expenses or otherwise have any
obligations thereunder, other than (a) to supply the Product
in accordance with Section 8.2, (b) as specifically
contemplated under ARTICLE 5 or (c) as may otherwise be agreed
by the Parties.
6.3.2 Initial ROW Commercialization Plan. On or before October 1,
2006, Serono shall prepare the initial ROW Commercialization
Plan. The SC shall review and comment upon such ROW
Commercialization Plan within ninety (90) days following its
submission by Serono, and Serono shall consider any reasonable
recommendations of the SC in modifying such ROW
Commercialization Plan.
6.3.3 Subsequent ROW Commercialization Plan. Serono may, in its sole
discretion, make revisions to the ROW Commercialization Plan,
and shall, in the event that it makes any material changes to
the ROW Commercialization Plan, provide the SC with a copy of
any such revised ROW Commercialization Plan, and shall take
into consideration any reasonable recommendations of the SC.
On or before October 1 of each Calendar Year during the Term,
Serono shall formally review and update the ROW
Commercialization Plan and prepare a revised ROW
Commercialization Plan for the following Calendar Year. The SC
shall review and comment upon such revised ROW
Commercialization Plan within ninety (90) days following its
submission by Serono, and Serono shall consider any reasonable
recommendations of the SC in modifying such ROW
Commercialization Plan.
6.3.4 Contents of ROW Commercialization Plan. The ROW
Commercialization Plan shall contain, at a minimum, plans for
branding and positioning, promotional campaigns, competitive
analysis, plans and strategies for major meetings and
conventions, pricing and reimbursement plans, high-level sales
plans and marketing initiatives, sales forecast by year for
five (5) years with market sensitivities incorporated, Phase
IV Clinical Trial plans and post-marketing surveillance
initiatives for the Product, publication plans, and market and
key opinion leader development plans, including continuing
medical education plans.
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6.3.5 Efforts. Serono shall use Commercially Reasonable Efforts to
execute and perform, or cause to be performed, the ROW
Commercialization Plan. In addition, Serono shall use
Commercially Reasonable Efforts to promote sales of the
Product in the ROW in accordance with applicable Laws, and in
particular shall use Commercially Reasonable Efforts to launch
the Product and achieve First Commercial Sales [***] as soon
as practicable following receipt of Approval for the Product.
The Parties shall cooperate to ensure the global compatibility
of Commercialization of the Product. The Parties recognize
that Serono and CancerVax may mutually benefit from conducting
Product Commercialization activities in a manner that
optimizes their usefulness throughout the world, and each
Party will use Commercially Reasonable Efforts to achieve this
result. In no event, without the consent of the SC, shall
either Party adopt a Product Commercialization strategy that
would reasonably be expected to cause a material adverse
effect on the other Party's Commercialization of the Product.
If the SC determines that such a material adverse effect would
reasonably be expected to occur, then it shall seek to
minimize any such material adverse effect across the entire
world in a manner consistent with the terms of this Agreement,
with priority given to minimizing the effect on those
countries that have the most significant commercial value or
potential.
6.3.6 Progress Reports. During the period commencing with First
Commercial Sale in the ROW and ending on the tenth (10th)
anniversary thereof, Serono shall provide the SC with a
reasonably detailed report, including a summary of progress in
obtaining Marketing Authorizations and Approvals, progress
with respect to major marketing initiatives and the status of
clinical trials, for its Product Commercialization activities
in the ROW, within sixty (60) days after the end of each
Calendar Quarter. Following the end of such period and
continuing for the balance of the Term, Serono shall provide
such a report within sixty (60) days after the end of each
Calendar Year.
6.3.7 Promotional Materials. Serono shall create, develop, produce
and own (subject to CancerVax's ownership rights in the
CancerVax Housemark and Copyrighted Works as set forth in
ARTICLE 14) all Promotional Materials for use in the ROW,
subject to Section 14.2.
6.3.8 Commercial Expenses. Serono shall bear all costs and expenses,
including Commercial Expenses, incurred in connection with the
Commercialization of the Product in the ROW.
ARTICLE 7
CO-PROMOTION
7.1 Sales Force.
7.1.1 Minimum Support. Each Party shall use Commercially Reasonable
Efforts to provide sufficient United States marketing and
sales support for the Product,
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which shall include from each Party, unless otherwise agreed
by the Parties, (a) [***] Sales Representatives (the "Minimum
Sales Representatives"), (b) appropriate national account
managers (including public and private payers and management
of distribution partners), (c) appropriate sales force
management and training personnel, (d) appropriate field-based
personnel to support reimbursement and (e) appropriate field
medical affairs personnel (collectively, a Party's "Sales
Force"). All Sales Representatives shall have appropriate
levels of experience promoting and Detailing pharmaceutical
products, and each Party shall use Commercially Reasonable
Efforts to ensure [***] Each of such Sales Representatives
shall also have previously received training on proper
marketing and sales techniques to be used in promoting
pharmaceutical products in accordance with all Laws, and shall
meet any other minimum criteria set forth in the U.S.
Commercialization Plan.
7.1.2 Responsibility; Indemnification. Subject to Section 7.1.4,
each Party shall have sole responsibility for its respective
Sales Force and performing its obligations hereunder,
including recruiting, hiring, training (consistent with
Section 7.2), managing, compensating (consistent with Section
7.1.3), conducting performance reviews for, disciplining,
firing and otherwise controlling the individuals comprising
its Sales Force. Except as otherwise provided herein, each
Party shall provide the day-to-day management of its Sales
Force (including furnishing administrative support, financial
resources, equipment and supplies and monitoring Detail
reporting by its Sales Representatives in accordance with the
U.S. Commercialization Plan) and assure its Sales Force's
understanding and compliance with this Agreement and Laws.
Each Party shall indemnify the other Party pursuant to ARTICLE
12 in connection with any Losses resulting from a Claim by an
employee of the indemnifying Party participating in the Sales
Force arising out of the actions of the indemnifying Party
with respect to disciplining, terminating or reclassifying
such employee or other actions with respect to such employee
in the execution or performance of Co-Promotion activities
hereunder.
7.1.3 Compensation. Each Party shall pay compensation, determined
solely by such Party, to its Sales Representatives with
respect to the Product for each Calendar Year during the Term
in which the Parties have or are required to have Sales
Representatives; provided, [***]
7.1.4 Sales Force Issues. If either Party notifies the other that it
believes certain Sales Representatives or other Sales Force
personnel of the other Party may (a) have violated any Laws,
(b) be damaging relationships with health care professionals
or
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omitted portions.
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damaging the Product brand or (c) have failed to comply with
this Agreement, the notifying Party shall have the right to
request that the responsible Party immediately address the
performance of such individual, in addition to any other
rights or remedies available to such Party under this
Agreement, at Law or in equity. The responsible Party shall
promptly evaluate such issue in accordance with applicable
policies or as it may otherwise deem appropriate. The
responsible Party shall keep the other Party reasonably
informed of the progress of, and information learned during,
its evaluation. If determined by Serono, in the case of Serono
Sales Force personnel, or CancerVax, in the case of CancerVax
Sales Force personnel, any particular Sales Representative or
other Sales Force personnel of a Party shall be replaced and
removed from performance of Co-Promotion activities for the
Product pursuant to this Agreement.
7.1.5 [***]
7.2 Sales Force Training.
7.2.1 Training Materials.
(a) Development. Promptly after the Effective Date and in
no event later than one hundred twenty (120) days
prior to the anticipated date of receipt of Marketing
Authorization for the Product in the United States,
the PT shall develop (and periodically update) a
high-quality training program for the Product. The
training program will include live and
computer-implemented components and shall be
conducted in a manner to facilitate presentation of a
consistent message with respect to promotion of the
Product.
(b) Supply. All Product-specific training materials
developed pursuant to clause (a) above will be
prepared in compliance with all Laws, and a master
copy of all such training materials shall be made
available to each Party.
(c) Return; Confidentiality. Each Party shall require any
Sales Representative who ceases to be employed or to
participate in the promotion of the Product to return
to his or her respective employer all Product
training materials and all other Confidential
Information.
7.2.2 Training Sessions. The Parties shall provide equivalent sales
training on the Product to the Serono Sales Representatives
and the CancerVax Sales
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Representatives who will be performing Calls in the United
States; provided, that each Party may provide such general
sales method training to its own Sales Representatives as it
deems appropriate. The Parties shall conduct a joint training
session for Serono Sales Representatives and CancerVax Sales
Representatives at least once per Calendar Year at mutually
acceptable dates and times throughout the Term, which shall be
set forth in and budgeted for through the U.S.
Commercialization Plan. Each Party shall be responsible for
the travel and housing costs of its own Sales Representatives
for such training.
7.2.3 Training Requirements. Each Party shall use Commercially
Reasonable Efforts to ensure that its Sales Force personnel
complete the applicable training program by not later than
thirty days prior to the anticipated date of receipt of
Marketing Authorization for the Product in the United States
and complete periodic updates. Each Party shall allocate time,
as may be reasonably necessary, at any regional and national
sales or medical affairs personnel meeting held by it for
applicable update training with respect to the Product.
7.2.4 Management; Coordination Efforts. The PT shall implement
appropriate measures to ensure that the sales efforts of the
CancerVax Sales Force and Serono Sales Force for the Product
are coordinated.
7.2.5 Territory and Target Prescribers. The Parties, through the PT,
shall cooperate to prepare an initial proposal for territory
alignment and identification and allocation of Target
Prescribers for purposes of the U.S. Commercialization Plan.
Territory alignments, including sales districts and regions
throughout the United States, shall be initially determined
and maintained in a coordinated and unified manner to optimize
the Detailing coverage of the Target Prescribers.
7.2.6 Unified Presentation. The Parties intend that the Parties'
respective Sales Representatives present as a seamless
organization with respect to the Target Prescribers and that
the Target Prescribers will receive a comparable level of
information and customer service from each Party's Sales
Representatives.
7.3 [***]
7.4 Detailing.
7.4.1 Detailing Efforts. Each Party shall use Commercially
Reasonable Efforts to fulfill its Detailing and other
Co-Promotion obligations under this Agreement. All Detailing
and promotional activity shall be in accordance with the terms
of this Agreement and the then-current U.S. Commercialization
Plan. No Party shall be
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required to undertake any activity under this Agreement that
it believes, in good faith, would violate any Laws.
7.4.2 Detail Requirements. Subject to Section 7.1.5, the U.S.
Commercialization Plan shall set forth the number of Primary
Details and Secondary Details in respect of the Product to be
performed by the Parties' Sales Representatives in the United
States during each Calendar Year and the Target Prescribers
for such Details (the "Detail Requirements"). Unless otherwise
specified in the U.S. Commercialization Plan, each Party shall
use Commercially Reasonable Efforts to perform [***] of its
annual Detail Requirements in any one Calendar Quarter.
7.4.3 Detailing Reports. Within thirty (30) days following the end
of each Calendar Quarter, each Party shall provide the PT with
a report, in such detail and form as the PT shall require (the
"Internal Detailing Report"), based upon such Party's internal
Call reporting and Detailing auditing system, setting forth
the total number of Details actually performed by such Party
in the United States, including information as to whether each
Call presented the Product as a Primary Detail or a Secondary
Detail, segmented by specialty of the Target Prescribers
during the immediately preceding Calendar Quarter.
7.4.4 Detail Audit. At any time during the Term, but not more than
once every Calendar Year, each Party agrees to make available
to the other Party, upon reasonable advance notice, such books
and records necessary to verify the accuracy of such Internal
Detailing Report with respect to any Calendar Quarter ending
not more than four (4) Calendar Quarters prior to the date of
such request. Unless the auditing Party has notified the other
Party of an issue relating to verifying an Internal Detailing
Report for a particular Calendar Quarter, such other Party
shall be released from any liability or accountability to the
auditing Party for Detailing in any Calendar Quarter ending
more than four (4) Calendar Quarters prior to the initiation
of such verification process by the auditing Party. In the
event of an unresolved dispute regarding the number of Details
actually performed by a Party based on such Party's internal
Call reporting and Detail auditing system, the Parties hereby
agree that such Party's internal Call reporting and Detail
auditing system may be correlated (on a trend basis only) with
the Detailing audit data. Such correlation may be used by the
auditing Party in any court or arbitration proceeding with
respect to any dispute regarding Detailing under this
Agreement. If the results of an audit identify an
overstatement of Details by a Party in excess of ten percent
(10%) for any Calendar Year, then the overstating Party shall
bear the expense of such audit and shall promptly implement
corrective actions reasonably acceptable to the auditing party
to ensure accurate reporting thereafter. Repeated excessive
reporting shall be deemed a material breach of this Agreement.
7.4.5 Detail Shortfalls. In the event that a Party does not meet
[***] of the Detail Requirements assigned to it pursuant to
the U.S. Commercialization Plan (as such Detail Requirements
may be adjusted pursuant
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to Section 7.5.1) during any Calendar Year, such Party shall
be deemed to have caused a "Detail Shortfall" for such
Calendar Year. Promptly following the end of the first
Calendar Year with respect to which a Party has caused a
Detail Shortfall, such Party shall pay to the other Party an
amount equal to the "Detail Shortfall Cost" (as defined below)
for such Calendar Year (which amount shall not be subject to
offset or credit against amounts due pursuant to Section 9.5.4
but rather shall be paid directly to the other Party).
Promptly following the end of any second Calendar Year with
respect to which a Party has caused a Detail Shortfall, [***]
7.4.6 Detail Content. Neither Party shall make, nor permit its Sales
Representatives to make, any statement, representation or
warranty, oral or written, concerning the Product inconsistent
with, or contrary to, the approved Product labeling,
Promotional Materials, this Agreement and the U.S.
Commercialization Plan. In addition, each Party shall insure
that its Sales Representatives Detail the Product in a fair
and balanced manner consistent with the requirements of the
United States Food, Drug and Cosmetic Act, as amended, and the
regulations promulgated thereunder. CancerVax and Serono
representatives shall not engage in any pre-marketing
activities for the Product to the extent prohibited by Law.
7.4.7 Promotional Materials. Each Party shall, and shall cause its
Sales Force to, (a) use the Promotional Materials and Product
samples solely for the purposes of this Agreement and (b)
immediately cease the use of any Promotional Materials when
instructed to do so by the PT.
7.5 Alternative Performance.
7.5.1 Relinquishment of Detail Requirements. If, during the course
of performing its Detail Requirements, a Party determines in
good faith that it cannot perform the full amount of Detail
Requirements established for such Party in the U.S.
Commercialization Plan, then such Party shall notify the PT,
identifying the Detail Requirements it has the capacity and is
willing to perform. The PT may, with the other Party's
approval and acceptance, allocate any or all of the Detail
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Requirements that such Party does not have the capacity to
perform, to such other Party (the "Relinquished Details"). The
U.S. Commercialization Plan for such Calendar Year shall
identify any such adjustments to the Detail Requirements. If a
Party performs the Relinquished Details on behalf of the other
Party, then [***]
7.5.2 Subcontracting of Obligations. Serono shall be entitled to
subcontract its obligations to Co-Promote hereunder solely to
any Affiliate, which Serono shall cause, in the event of such
an arrangement, to execute and deliver to CancerVax the
acknowledgement on the signature page of this Agreement.
Serono shall be responsible for the performance of such
Affiliate in accordance with Section 2.3.2, and CancerVax
shall have the right to enforce the provisions of this ARTICLE
7 directly against such Affiliate.
7.6 Costs of Co-Promotion. Except for costs (a) agreed to be shared by the
Parties pursuant to Sections 1.18.5 and 1.18.7 or (b) incurred in
connection with the activities of the PT related to setting forth in
the U.S. Commercialization Plan and coordinating the execution of
Co-Promotion activities, each Party shall bear all its own costs and
expenses in connection with fulfilling its obligations and exercising
its rights to Co-Promote hereunder, including recruitment,
compensation, benefits, overhead expenses and deployment costs for
Sales Force personnel engaged in Co-Promotion pursuant to ARTICLE 7
(the "Co-Promotion Costs").
ARTICLE 8
SUPPLY
8.1 Supply for Development. CancerVax shall use Commercially Reasonable
Efforts to supply the Parties with Product for use in the Development
of the Product, as specified in the Development Plan, and for use in
Phase IV Clinical Trials, and shall deliver Product requested by Serono
as directed from time to time. The costs of such Product shall be
calculated as the Cost of Goods. Serono shall pay CancerVax for all
amounts of Product required by Serono pursuant to this Section 8.1, and
CancerVax shall accrue the Cost of Goods of all amounts of Product
required by CancerVax pursuant to this Section 8.1, and such payments
and accruals shall be deemed a Development Expense or a Commercial
Expense, as applicable.
8.2 Supply for Commercialization.
8.2.1 Initial Supply. CancerVax shall supply Product for sale in the
United States and the ROW in accordance with and subject to
the terms of a Manufacturing and
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Supply Agreement to be negotiated, agreed, executed and
delivered by the Parties within ninety (90) days following the
Effective Date (the "Manufacturing and Supply Agreement"),
which Manufacturing and Supply Agreement shall reflect the
terms and conditions attached hereto as Exhibit A.
8.2.2 Additional Supply. As soon as reasonably practicable following
[***] the Parties shall discuss in good faith, through the DT,
a plan to expand Manufacturing capacity for the Product to
meet expected market demand. To the extent that such plan
requires the construction of a new Manufacturing facility,
then, unless otherwise agreed in writing by the Parties,
Serono shall construct such facility at its sole cost and
expense and shall own and operate such facility, and shall
have the right to Manufacture Product for the ROW; provided,
that the Parties will enter into a technology transfer
agreement (the "Technology Transfer Agreement") at least
twelve (12) months prior to the anticipated undertaking of
such Manufacturing responsibility by Serono, or earlier if
reasonably required, governing, among other things, the
exchange of technical information and Know-How, access to
regulatory filings (each solely to the extent it relates to
Manufacture) and back-up supply arrangements. It is
anticipated that once such a facility is established, each
Party will act as the primary back-up supplier to the other.
The Technology Transfer Agreement shall not contemplate the
transfer of such CancerVax Know-How, except pursuant to the
Development Transfer Plan, unless and until Serono has
notified CancerVax that it intends to build a Manufacturing
facility for Product in accordance with this ARTICLE 8. The
Technology Transfer Agreement shall contemplate an appropriate
plan for return of CancerVax Know-How in connection with a
termination or expiration of this Agreement.
ARTICLE 9
FINANCIAL PROVISIONS
9.1 Up-front Payments. In partial consideration for the rights and licenses
granted to Serono under this Agreement:
9.1.1 Lump Sum. Within thirty (30) days following the Effective
Date, Serono shall pay or cause to be paid to CancerVax a
non-creditable amount of twenty-five million U.S. dollars
(U.S. $25,000,000) as partial reimbursement of CancerVax's
past research and Development expenditures in respect of the
Product.
9.1.2 Stock Purchase. Subject to the terms and conditions of this
Agreement and the Stock Purchase Agreement attached hereto as
Exhibit B (the "Stock Purchase Agreement"), including the
execution and delivery of the Registration Rights Agreement
attached hereto as Exhibit C (the "Registration Rights
Agreement"), both of which shall be executed by CancerVax and
an Affiliate of Serono simultaneously with this Agreement, on
the Closing Date (as defined in the Stock Purchase Agreement),
CancerVax agrees to issue and sell to such Affiliate of
Serono, and such Affiliate of Serono agrees to purchase from
CancerVax, one
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million (1,000,000) shares of CancerVax's
common stock at a purchase price per share of twelve U.S.
dollars (U.S. $12.00), for an aggregate purchase price of
twelve million U.S. dollars (U.S. $12,000,000).
9.2 Milestone Payments. In consideration for the successful achievement of
the Product Development and Commercialization events set forth below,
Serono shall pay CancerVax the amount set forth below (each, a
"Milestone Payment") within thirty (30) days after the first
achievement date for such Milestone Payment:
MILESTONE PAYMENT
MILESTONE PAYMENT TRIGGER (IN U.S. $ MILLIONS)
- ------------------------------------------ --------------------
[***] [***]
[***] [***]
[***] [***]
--------------------
[***] [***]
[***] [***]
[***] [***]
--------------------
[***] [***]
[***] [***]
[***] [***]
--------------------
[***] [***]
[***] [***]
[***] [***]
[***] [***]
===== ====================
[***] [***]
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[***] [***]
[***] [***]
[***] [***]
--------------------
[***] [***]
[***] [***]
[***] [***]
----- --------------------
[***] [***]
===== ====================
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
===== ====================
Total Milestone Payments 253
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respect to the omitted portions.
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Each Party shall promptly inform the other Party of the achievement of any
Milestone Payment triggering event. For clarity, each Milestone Payment will be
made only once, regardless of the number of times the corresponding triggering
event may be achieved.
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
9.3 Profit Sharing for the Product in the United States. CancerVax shall
receive fifty percent (50%) and Serono shall receive fifty percent
(50%) of the Distributable Profit for the Product with respect to sales
in the United States, to be calculated and paid in accordance with the
reconciliation and payment provisions of Sections 9.5.4 and 9.6 through
9.9, inclusive.
9.4 Payment of Royalties on Net Sales of the Product in the ROW.
9.4.1 Thresholds and Amounts. Subject to reduction and deductions
pursuant to Sections 0 and 9.4.5, Serono shall pay CancerVax
at the time of delivery of each ROW Report, on a
country-by-country basis, royalty payments on aggregate annual
Net Sales of the Product in the ROW ("Royalties"), as follows:
AGGREGATE ANNUAL NET SALES OF THE
PRODUCT IN THE ROW ROYALTY PAYMENT
(IN U.S. $ MILLIONS) PERCENTAGE OF NET SALES
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[***] [***]
[***] [***]
[***] [***]
[***] [***]
9.4.2 Certain Conditions. All Royalty payments shall be subject to
the following conditions:
(a) only one Royalty shall be due with respect to the
same unit of the Product; and
(b) no Royalties shall be due upon the sale or other
transfer among Serono, its Affiliates or its
sublicensees, but in such cases Royalties shall be
due and calculated upon Serono's, its Affiliate's or
sublicensees' Net Sales to the first independent
Third Party.
9.4.3 Directly Comparable Products. [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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9.4.4 Payment of Royalties Under the Existing Third Party Agreement.
Serono shall pay directly to the John Wayne Cancer Institute
one half (1/2) of the Shared Existing Royalties due under the
terms of the Existing Third Party Agreement according to the
terms of such agreement as of the Effective Date.
9.4.5 Royalty Deductions.[***]
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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9.4.6 Limitation. Notwithstanding anything to the contrary set forth
in this Agreement, no Royalty payment shall be reduced in the
aggregate by more than [***] by reason of any reductions or
deductions pursuant to Sections 9.4.3 or 9.4.5. [***]
9.5 Reports and Reconciliation Payments.
9.5.1 ROW Report. Within forty-five (45) days after the end of each
Calendar Quarter, Serono shall submit to CancerVax a written
report (each a "ROW Report") setting forth in reasonable
detail, the actual amounts of the following items:
(a) a statement of Net Sales in the ROW on a
country-by-country basis during such Calendar
Quarter;
(b) [***]
(c) a preliminary statement of Royalties due to
CancerVax, on a country by country as well as an
aggregate basis, based on such Net Sales and the
rates set forth in Section 9.4.1, then showing any
reduction of such Royalties by reason of a reduction
of rates pursuant to Section 0;
(d) [***]
(e) [***]
(f) [***]
(g) a calculation of an amount equal to the aggregate
amount described in (c) less the aggregate amounts
described in (d), (e) and (f);
(h) a statement of total Royalty payments due to
CancerVax; and
(i) [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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9.5.2 Serono Report. Within forty-five (45) days after the end of
each Calendar Quarter, Serono shall submit to CancerVax a
written report (each, a "Serono Report") setting forth in
reasonable detail the actual amounts of all Shared Expenses
incurred by Serono, including a calculation showing as
separate line items each component of Shared Expenses
described in Section 1.32.
9.5.3 CancerVax Report. Within forty-five (45) days after the end of
each Calendar Quarter, CancerVax shall submit to Serono a
written report (each, an "CancerVax Report") setting forth in
reasonable detail the actual amounts of the following items:
(a) Net Sales in the United States during such Calendar
Quarter, including a calculation showing as separate
line items each component of Net Sales described in
Section 1.50; and
(b) all Shared Expenses incurred by CancerVax, including
a calculation showing as separate line items each
component of Shared Expenses described in Section
1.32.
9.5.4 Financial Reconciliation. Within sixty (60) days after the end
of each Calendar Quarter, commencing with the first Calendar
Quarter following the Effective Date, Serono shall, using the
ROW Report, the Serono Report and the CancerVax Report,
prepare a reconciliation report for the Product (the
"Reconciliation Report"). The Reconciliation Report shall set
forth, in reasonable detail, the following:
(a) a statement of each Party's incurred portion of
Shared Expenses (such portion, a Party's "Incurred
Shared Expenses");
(b) a statement of total Shared Expenses, calculated by
adding each Party's Incurred Shared Expenses (the
"Total Shared Expenses");
(c) a calculation for each Party of an amount equal to
fifty percent (50%) of the Total Shared Expenses less
such Party's Incurred Shared Expenses (such Party's
"Differential Expense"), subject to adjustment to
account for any sharing of payments and fees under
any Third Party License applicable to the United
States other than on an equal basis, as determined by
the Parties pursuant to Section 2.7.1;
(d) a calculation of Distributable Profit (i.e., Net
Sales in the United States less total Shared
Expenses);
(e) subject to clause (f) below, a statement of any
amount owed by one Party to the other Party in
accordance with the following:
(i) If CancerVax's Differential Expense is
greater than zero (0) and greater than fifty
percent (50%) of Distributable Profit, then
CancerVax shall pay to Serono an amount
equal to the absolute
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difference between the Differential Expense
and fifty percent (50%) of the Distributable
Profit:
(ii) If CancerVax's Differential Expense is
greater than zero (0) but less than fifty
percent (50%) of Distributable Profit, then
Serono shall pay to CancerVax an amount
equal to the absolute difference between the
Differential Expense and fifty percent (50%)
of the Distributable Profit;
(iii) If CancerVax's Differential Expense is less
than zero (0) but greater than fifty percent
(50%) of Distributable Profit, then
CancerVax shall pay to Serono an amount
equal to the absolute difference between the
Differential Expense and fifty percent (50%)
of the Distributable Profit; and
(iv) If CancerVax's Differential Expense is less
than zero (0) but less than fifty percent
(50%) of Distributable Profit, then Serono
shall pay to CancerVax an amount equal to
the absolute difference between the
Differential Expense and fifty percent (50%)
of the Distributable Profit.
(f) any amount owed by one Party to the other Party
pursuant to (f) shall be added to or netted against
amounts due to CancerVax from Serono pursuant to
Section 9.5.1(h), such that only one payment (the
"Reconciliation Payment") will be made per Calendar
Quarter in respect of Royalties and Distributable
Profit for such Calendar Quarter.
9.5.5 Reconciliation Payment. Within ten (10) Business Days after
delivery by Serono of a Reconciliation Report to CancerVax,
Serono or CancerVax, as the case may be, shall pay the
Reconciliation Payment to the other Party.
9.6 Currencies. Payments under this Agreement shall be made in United
States dollars. Sales and expense data for each country shall be
converted into United States dollars using the applicable monthly
exchange rate for converting such local currency to United States
dollars in accordance with Serono's worldwide accounting systems. Such
rate of exchange as of the Effective Date of this Agreement is that
rate quoted by Reuters Ltd. prevailing on the last Business Day of the
month at 3:00 p.m. C.E.T. prior to the month in which Serono records
such sales and expenses in local currencies.
9.7 Manner of Payments. All sums due to CancerVax or Serono under this
ARTICLE 9 shall be payable by bank wire transfer in immediately
available funds to such bank account(s) as CancerVax and Serono,
respectively, shall designate from time to time. Each Party shall
endeavor to notify the other Party as to the date and amount of any
such wire transfer to the other Party at least two (2) Business Days
prior to such transfer, but in no event later than the Business Day of
such transfer.
9.8 Interest on Late Payments. If a Party shall fail to make a payment
pursuant to this ARTICLE 9 when due, any such late payment shall bear
interest, to the extent not
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prohibited by Law, at the average one (1)-month London Inter-Bank
Offering Rate (LIBOR) for the United States dollar as reported from
time to time in The Wall Street Journal, effective for the first date
on which payment was delinquent and calculated on the number of days
such payment is overdue or, if such rate is not regularly published, as
published in such source as the Parties agree.
9.9 Tax Withholding. Any taxes, levies or other duties paid or required to
be withheld or deducted under the appropriate Laws by one of the
Parties on account of monies payable to the other Party under this
Agreement shall be deducted from the amount of monies otherwise payable
to the other Party under this Agreement. The withholding Party shall
secure and send to the other Party within a reasonable period of time
proof of any such taxes, levies or other duties paid or required to be
withheld by the withholding Party for the benefit of the other Party.
The Parties shall cooperate reasonably with each other to ensure that
any amounts required to be withheld by either Party are reduced in an
amount to the fullest extent permitted by Law. Any interest, penalties
or other charges imposed by a Governmental Authority as a result of a
failure by the withholding party to pay such taxes, levies or other
duties shall be the responsibility of the withholding party. No
deduction shall be made, or a reduced amount shall be deducted, if the
other Party furnishes a document from the appropriate tax Governmental
Authorities to the withholding Party certifying that the payments are
exempt from such taxes, levies or other duties or subject to reduced
tax rates, according to the applicable convention for the avoidance of
double taxation.
9.10 Tax Matters. [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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[***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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9.11 Financial Records; Audits.
9.11.1 Financial Records. Each Party shall keep, and shall cause its
Affiliates and require its sublicensees to keep, such accurate
and complete records of Net Sales and its Commercial Expenses
and Development Expenses as are necessary to determine the
amounts due to Serono and CancerVax under this Agreement. Such
records shall be retained by each Party or any of its
Affiliates or sublicensees (in such capacity, the "Recording
Party") during the Term and, at a minimum, for [***]
thereafter.
9.11.2 Audits. During normal business hours and with reasonable
advance notice to the Recording Party, such records shall be
made available for inspection, review and audit, at the
request and expense of the other Party (the "Auditing Party"),
by an independent certified public accountant or non-U.S.
equivalent appointed by such Auditing Party and reasonably
acceptable to the Recording Party, for the sole purpose of
verifying the accuracy of the Recording Party's accounting
reports and payments made or to be made pursuant to this
Agreement, including any amounts charged by one Party to the
other Party, such as Cost of Goods; provided, that such audits
may not be performed by the Auditing Party [***] Such
accountants, prior to any review hereunder, shall have entered
into an appropriate confidentiality agreement with the
Recording Party on mutually acceptable terms and shall have
been instructed not to reveal to the Auditing Party the
details of its review, except for (a) such
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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information as is required to be disclosed under this
Agreement and (b) such information presented in a summary
fashion as is necessary to report the accountants' conclusions
to the Auditing Party. All costs and expenses incurred in
connection with performing any such audit shall be paid by the
Auditing Party unless the audit uncovers a net underpayment or
overreporting of expenses by a Recording Party [***] of total
amounts owed or expenses reported by such Recording Party for
the period covered by the audit, in which case the Recording
Party will bear the full cost of the audit for such Calendar
Year. The Auditing Party will be entitled to [***]
9.11.3 Binding Effect. If a Party fails to invoke its audit rights
pursuant to this Section 9.11 with respect to a Calendar Year
within [***] following the end of [***] the calculation of
royalties, Distributable Profits and Development Expenses with
respect to [***] shall be binding and conclusive upon the
other Party, and each Party and its Affiliates and
sublicensees shall be released from any liability or
accountability with respect to royalties, Distributable
Profits or Development Expenses, as the case may be.
ARTICLE 10
CONFIDENTIAL INFORMATION
10.1 Confidential Information. Each of Serono and CancerVax shall keep all
Confidential Information received from the other Party with the same
degree of care it maintains the confidentiality of its own Confidential
Information. Neither Party shall use such Confidential Information for
any purpose other than in performance of this Agreement or disclose the
same to any other Person other than to such of its agents, its
sublicensees, or the Inventors or Inventor's representative as
permitted in accordance with this Agreement and who have a need to know
such Confidential Information to implement the terms of this Agreement.
A Receiving Party shall advise any agent, permitted sublicense,
Inventor or Inventor's representative who receives such Confidential
Information of the confidential nature thereof and of the obligations
contained in this Agreement relating thereto, and the Receiving Party
shall ensure that all such agents comply with such obligations as if
they had been a Party hereto or confidentiality obligations that are
not less stringent that the confidentiality obligation contained
herein. Upon termination of this Agreement, at the request of the
Disclosing Party, the Receiving Party shall use Commercially Reasonable
Efforts to return or destroy all Confidential Information of the
Disclosing Party that remain in the Receiving Party's or its agents'
possession, except that the Receiving Party may keep one copy of the
Confidential Information in a secure location of the Receiving Party,
solely for purposes of establishing the extent of disclosure of
Confidential Information by the other Party hereunder and not for any
other use, reference or disclosure whatsoever. Notwithstanding anything
to the contrary in this Agreement but subject to Section 10.4 if
applicable, the Receiving Party shall have the
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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right to disclose any Confidential Information provided hereunder if,
in the reasonable opinion of the Receiving Party's legal counsel, such
disclosure is necessary to comply with the terms of this Agreement, or
the requirements of any Laws; provided, that where possible, the
Receiving Party shall notify the Disclosing Party of the Receiving
Party's intent to make such disclosure of Confidential Information
pursuant to the provision of the preceding sentence sufficiently prior
to making such disclosure so as to allow the Disclosing Party adequate
time to take whatever action the Disclosing Party may deem to be
appropriate to protect the confidentiality of the information.
10.2 Other Permitted Disclosure and Use.
10.2.1 Business Disclosure. Notwithstanding Section 10.1, a Party may
disclose Confidential Information belonging to the other Party
only to the extent such disclosure is reasonably necessary to
obtain Marketing Authorization of the Product, to gain or
maintain authorizations to conduct clinical trials or enforce
the provisions of this Agreement. If a Party deems it
necessary to disclose Confidential Information of the other
Party pursuant to this Section 10.2, such Party shall give
reasonable advance notice of such disclosure to the other
Party to permit such other Party sufficient opportunity to
object to such disclosure or to take measures to ensure
confidential treatment of such information.
10.2.2 Patent Disclosure. Notwithstanding Section 10.1, a Party may
disclose Confidential Information of the other Party to
Governmental Authorities in order to obtain Patent Rights, but
such disclosure may be only to the extent reasonably necessary
to obtain such Patent Rights or authorizations and shall be
pursuant only to an exercise of rights expressly granted under
this Agreement and in accordance herewith.
10.3 Publications. Subject to any Third Party rights existing as of the
Effective Date, including under the Existing Third Party Agreement,
each Party shall submit to the other Party for review and approval all
proposed academic, scientific and medical publications and public
presentations relating to the Product or any Development activities
under this Agreement for review in connection with preservation of
Patent Rights and trade secrets or to determine whether Confidential
Information should be modified or deleted from the proposed publication
or public presentation. Written copies of such proposed publications
and presentations shall be submitted to the non-publishing Party no
later than sixty (60) days before submission for publication or
presentation and the non-publishing Party shall provide its comments
with respect to such publications and presentations within thirty (30)
days of its receipt of such written copy. The review period may be
extended for an additional thirty (30) days if the non-publishing Party
can demonstrate a reasonable need for such extension including the
preparation and filing of patent applications. By written agreement,
this period may be further extended. No publication shall be made
unless and until the other Party's reasonable comments on the proposed
publication or presentation have been addressed and changes have been
agreed upon and any information has been removed that is determined by
the other Party to be its Confidential Information or that the other
Party desires to maintain in secrecy to preserve the value of its
rights under this Agreement. The Parties will each comply with
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standard academic practice regarding authorship of scientific
publications and recognition of contribution of other Persons in any
publications relating to the Product or any research or Development
activities under this Agreement.
10.4 Public Announcements. The Parties agree to issue the press release
attached hereto as Exhibit D within two (2) Business Days following the
Effective Date. Except as expressly permitted under this Section 10.4
or required by Law, neither Party will make any public announcement of
any information regarding this Agreement (or the existence of this
Agreement), the Product or any research, Development, Manufacturing or
Commercialization activities under this Agreement without the prior
written approval of the other Party. Either Party may issue press
releases or otherwise make public statements or disclosures (such as in
annual reports to stockholders or filings with the Securities and
Exchange Commission) as it determines, based on advice of counsel, are
reasonably necessary or advisable to comply with Laws or other rules or
regulations applicable to the listing or quoting of the securities of
either Party or its Affiliates on any stock or securities exchange;
provided, that a Party shall use Commercially Reasonable Efforts to
provide the other Party with an opportunity to review and comment on
such press release, statement or disclosure prior to its release and,
in such circumstance, shall consider in good faith the comments of such
other Party, including such Party's request for confidential treatment
of the information disclosed, it being expressly understood that in
certain circumstances, no such advance review will be possible (but in
such circumstances, the disclosing Party shall nonetheless use
Commercially Reasonable Efforts to provide advance notice to the other
Party). In addition, following the initial press release announcing
this Agreement as contemplated in the first sentence of this Section
10.4 or other public disclosure permitted by this Section 10.4, either
Party shall be free to disclose, without the other Party's prior
written consent, the existence of this Agreement, the identity of the
other Party and those terms of the Agreement that have already been so
publicly disclosed.
10.5 Equitable Relief. The Parties acknowledge and agree that the
restrictions set forth in this ARTICLE 10 are reasonable and necessary
to protect the legitimate interests of the Parties, that neither would
have entered into this Agreement in the absence of such restrictions
and that any breach or threatened breach by a Party of any provision of
this ARTICLE 10 will result in irreparable injury to the other Party
for which there will be no adequate remedy at Law. In such event, the
other Party shall be authorized and entitled to seek and obtain from
any court of competent jurisdiction injunctive relief, whether
preliminary or permanent, specific performance or any other type of
equitable relief available in connection with such breach, in addition
to any other rights or remedies available at Law or in equity. The
breaching Party agrees to waive any requirement that the non-breaching
Party (a) post bond or other security as a condition for obtaining any
such relief and (b) show irreparable harm, balancing of harms,
consideration of the public interest or inadequacy of monetary damages
as a remedy.
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ARTICLE 11
REPRESENTATIONS AND WARRANTIES; COVENANTS
11.1 Mutual Representations and Warranties. CancerVax and Serono each
represents and warrants to the other as of the Effective Date that:
11.1.1 Authorization; No Conflict. The execution, delivery and
performance of this Agreement by such Party and all
instruments and documents to be delivered by such Party
hereunder (a) are within the corporate power of such Party,
(b) have been duly authorized by all requisite corporate
action, (c) do not conflict with any provision of the
organizational documents of such Party, (d) will not violate
any Laws or any order or decree of any court, in each case to
which such Party or its property is subject, and (e) will not
violate or conflict with any terms of any indenture, mortgage,
deed of trust, lease, agreement, or other instrument to which
such Party is a party (including, in the case of CancerVax,
the Existing Third Party Agreement), or by which such Party or
any of its property is bound, which violation would have a
material adverse effect on its financial condition as a whole
or on its ability to perform its obligations hereunder; and
11.1.2 Due Execution. This Agreement has been duly executed and
delivered by such Party and constitutes a legal, valid and
binding obligation of such Party, enforceable against such
Party in accordance with its terms, except as such
enforceability may be limited by applicable insolvency and
other Laws affecting creditors' rights generally, or by the
availability of equitable remedies.
11.2 Additional Serono Representations and Warranties. Serono further
represents and warrants to CancerVax that, as of the Effective Date:
11.2.1 [***]
11.2.2 [***]
11.2.3 neither it nor any of its Affiliates is a party to or
otherwise bound by any oral or written contract or agreement
that will result in any Person obtaining any interest in, or
that would give to any Person any right to assert any Claim in
or with respect to, any of Serono's rights under this
Agreement.
11.3 Additional CancerVax Representations and Warranties. CancerVax further
represents and warrants to Serono that, as of the Effective Date:
11.3.1 [***]
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the Commission. Confidential treatment has been requested with respect to
the omitted portions.
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[***]
***Certain information on this page has been omitted and filed separately with
the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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11.4 Covenants.
11.4.1 Compliance During Performance. Each Party agrees to carry out
the Development and Commercialization of the Product and its
other obligations or activities hereunder in accordance with
the terms of this Agreement and all Laws.
11.4.2 No Impairment of Performance or Rights. Neither Party shall
enter into any contracts, agreements, commitments or other
arrangements or take any other action or fail to take any
other action, in each case as would reasonably be expected to
(a) prevent it from performing its obligations hereunder in
accordance with the terms hereof or (b) conflict with or have
a material adverse effect on any rights granted to the other
Party hereunder.
11.4.3 Employees and Consultants. Each Party agrees that, prior to
permitting any of its employees or consultants to perform work
in connection with this Agreement, it shall require such
employees and consultants to execute agreements (a) assigning
(or requiring assignment) to such Party of all Inventions made
by such individuals during the course of and as the result of
their association with such Party and (b) obligating such
individuals to maintain as confidential all Confidential
Information of the other Party.
11.5 Disclaimer of Warranty. Except as otherwise expressly set forth in this
Agreement, nothing in this Agreement shall be construed as a warranty
or representation by either Party (a) that any Product made, used, sold
or otherwise disposed of under this Agreement is or will be free from
infringement of patents, copyrights, trademarks, industrial design or
other intellectual property rights of any Third Party, (b) regarding
the effectiveness, value, safety, non toxicity, patentability, or
non-infringement of any patent technology, the Product or any
information or results provided by either Party pursuant to this
Agreement, including CancerVax Know-How transferred pursuant to Section
4.1, or (c) that the Product will obtain Marketing Authorization or
Approval. Each Party explicitly accepts all of the same as experimental
and for development purposes, and without any express or implied
warranty from the other Party. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH
IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS, WAIVES, RELEASES,
AND RENOUNCES ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY
OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
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ARTICLE 12
INDEMNIFICATION
12.1 Indemnification by Serono. Subject to Sections 12.2, 12.7 and 13.3,
Serono shall defend, indemnify and hold harmless CancerVax and its
Affiliates and each of their officers, directors, shareholders,
employees, successors and permitted assigns from and against all Claims
of Third Parties, and all associated Losses, to the extent arising out
of [***]
12.2 Indemnification by CancerVax. Subject to Sections 12.1, 12.7 and 13.3,
CancerVax shall defend, indemnify and hold harmless Serono and its
Affiliates and each of their officers, directors, shareholders,
employees, successors and permitted assigns from and against all Claims
of Third Parties, and all associated Losses, to the extent arising out
of [***]
12.3 Procedure for Indemnification.
12.3.1 Notice. Each Party (the "Indemnified Party") will promptly
notify the other Party (the "Indemnifying Party") if it
becomes aware of a Claim of a Third Party (a "Third Party
Claim") for which indemnification may be available to it under
Section 12.1 or Section 12.2, and will give such information
with respect thereto as the Indemnifying Party shall
reasonably request and, if covered by such indemnification
obligation, the Indemnifying Party shall assume the defense of
such Claim in accordance with Section 12.3.2. If any
proceeding (including any investigation by any Governmental
Authority) is instituted involving any Party regarding which
indemnity may be sought pursuant to this ARTICLE 12, such
Party shall not make any admission concerning such Claim, but
shall promptly notify the other Party in writing and the
Indemnifying Party and Indemnified Party shall meet to discuss
how to respond to any Claims that are the subject
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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matter of such proceeding. The Indemnifying Party shall not be
obligated to indemnify the Indemnified Party to the extent any
admission made by the Indemnified Party or any failure by such
Party to notify the Indemnifying Party of the Claim materially
prejudices the defense of such Claim.
12.3.2 Defense of Claim. If the Indemnifying Party elects to defend a
Third Party Claim pursuant to Section 12.3.1, it shall give
notice to the Indemnified Party within forty-five (45) days
after the receipt of the notice from the Indemnified Party of
the potential indemnifiable Claim which involves (and
continues to involve) solely monetary damages The Indemnifying
Party shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and shall
pay the fees and expenses of such counsel related to such
proceeding. In any such proceeding, the Indemnified Party
shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of the
Indemnified Party unless the Indemnifying Party and the
Indemnified Party shall have agreed to the retention of such
counsel. The Indemnified Party shall not settle any Claim for
which it is seeking indemnification without the prior consent
of the Indemnifying Party which consent shall not be
unreasonably withheld, delayed or conditioned. The Indemnified
Party shall, if requested by the Indemnifying Party, cooperate
in all reasonable respects in the defense of such Claim that
is being managed and controlled by the Indemnifying Party. The
Indemnifying Party shall not, without the written consent of
the Indemnified Party (which consent shall not be unreasonably
withheld), effect any settlement of any pending or threatened
proceeding in respect of which the Indemnified Party is, or
arising out of the same set of facts could have been, a Party
and indemnity could have been sought hereunder by the
Indemnified Party, unless such settlement includes an
unconditional release of the Indemnified Party from all
liability on Claims that are the subject matter of such
proceeding.
12.4 Right to Counsel. Notwithstanding anything to the contrary contained
herein, an Indemnified Party shall be entitled to assume the defense of
any Third Party Claim with respect to the Indemnified Party, upon
written notice to the Indemnifying Party pursuant to this Section 12.4,
in which case the Indemnifying Party shall be relieved of liability
under Section 12.1 or 12.2, as applicable, solely for such Third Party
Claim.
12.5 [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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12.6 Insurance. During the Term and for five (5) years thereafter, each
Party shall obtain and maintain, at its sole cost and expense, product
liability and clinical trials insurance (including any self-insured
arrangements) in amounts, that are reasonable and customary in the U.S.
pharmaceutical and biotechnology industry for companies engaged in
comparable activities.
12.7 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER OR ANY OF ITS AFFILIATES FOR ANY CONSEQUENTIAL, INCIDENTAL,
INDIRECT, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES (INCLUDING LOST
PROFITS, BUSINESS OR GOODWILL) SUFFERED OR INCURRED BY SUCH OTHER PARTY
OR ITS AFFILIATES IN CONNECTION WITH A BREACH OR ALLEGED BREACH OF THIS
AGREEMENT. THE FOREGOING SENTENCE SHALL NOT LIMIT THE OBLIGATIONS OF
EITHER PARTY TO INDEMNIFY THE OTHER PARTY FROM AND AGAINST THIRD PARTY
CLAIMS UNDER THIS ARTICLE 12, INFRINGEMENT CLAIMS UNDER SECTION 13.3,
OR CLAIMS UNDER ARTICLE 10 (CONFIDENTIALITY).
ARTICLE 13
PATENT AND INFRINGEMENT
13.1 Inventions. Except as otherwise set forth in this Agreement, [***] All
such determinations shall be documented to ensure that any patent
applications reflect appropriate inventorship.
13.2 Patent Filing, Prosecution and Maintenance.
13.2.1 Record Keeping. Each Party shall maintain records in
sufficient detail and in good scientific manner appropriate
for patent purposes to properly reflect all work done and
results (including Inventions) achieved in conducting the
activities assigned to it pursuant to this Agreement and shall
respond to reasonable requests of the other Party for
information relating to the Product.
13.2.2 CancerVax and Joint Inventions. CancerVax shall be responsible
for (a) filing, prosecuting and maintaining CancerVax Patent
Rights and any Inventions owned or Controlled by CancerVax or
jointly owned or Controlled by the Parties, and (b) with
respect to CancerVax Patent Rights and Inventions owned or
Controlled by CancerVax or jointly owned or Controlled by the
Parties that are related to the Product or the Manufacture of
the Product, proceeding to initiate any interferences,
re-examinations, reissues and oppositions with respect
thereto. [***]
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omitted portions.
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13.2.3 Serono Inventions. Serono shall be responsible, [***] for (a)
filing, prosecuting and maintaining Serono Patent Rights and
any Inventions owned or Controlled by Serono and (b) with
respect to Inventions owned or Controlled by Serono,
proceeding to initiate any interferences, re-examinations,
reissues and oppositions with respect thereto.
13.2.4 Right to Consult. During the Term, each Party shall copy the
other Party, or have the other Party copied, on all
substantive documents to the extent directly relating to the
Product or the Manufacture of the Product received from or to
be filed in any patent office, promptly following receipt from
the patent office and within a reasonable time prior to filing
with the patent office, respectively, including copies of each
patent application, official action, response to official
action, declaration, information disclosure statement, request
for terminal disclaimer, request for patent term extension and
request for reexamination. Consistent with the foregoing, each
Party shall have the right to comment on the prosecution of
such Patent Rights to the extent such Patent Rights are
directly related to the Product or the Manufacture of Product
and provide such comments to such other Party's patent
counsel, and such other Party shall require its patent counsel
to consider all such comments in good faith. If a Party fails
to provide its comments with respect to the prosecution by the
other Party of such Patent Rights within at least two (2)
Business Days prior to the deadline for filing or otherwise
responding to the relevant correspondence in the relevant
patent office, having been given a reasonable amount of time
to do so, such other Party shall be free to act without
consideration of such Party's comments.
13.2.5 Abandonment of Prosecution. Each party will notify the other
Party in the event it desires to abandon its efforts to
prosecute, maintain or conduct any interferences,
re-examinations, reissues and oppositions directly relating to
the Product or the Manufacture of the Product under this
Section 13.2.5. Notification will be given within a reasonable
period (i.e., with sufficient time for such other Party to
take whatever action may be necessary) prior to the date on
which such Patent Rights will lapse or go abandoned (other
than for the purpose of filing a continuation or continuation
in part application). Such other Party will then have the
option, exercisable upon written notification to such Party,
to assume full responsibility, at its discretion and its sole
cost and expense to prosecute, maintain or conduct any
interferences, re-examinations, reissues and oppositions in
such country or countries.
13.2.6 Assistance. Each Party shall provide assistance to the other
Party as reasonably requested for purposes of this Section
13.2, including in the event that such Patent Rights are being
prosecuted by other Party.
13.3 Infringement.
13.3.1 [***]
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omitted portions.
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13.4 Enforcement Against Third Parties.
13.4.1 [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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[***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.
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13.5 [***]
13.6 Patent Marking. The Parties shall mark, and require their sublicensees
and subcontractors to mark Product sold or distributed pursuant to this
Agreement in accordance with the applicable patent Laws in the country
or countries of Manufacture or sale thereof, to the extent required by
Law.
ARTICLE 14
TRADEMARK AND COPYRIGHT
14.1 Product Trademarks.
14.1.1 Product Branding. Subject to the applicable Commercialization
Plan, the Parties shall use Commercially Reasonable Efforts to
use the Product Trademarks as the common brand name under
which Product will be marketed worldwide in order to maximize
brand equity and the corresponding return on Product
Development and Commercialization expenditures, unless on a
country-by-country basis, the SC otherwise reasonably
determines that use of such common Product Trademarks in a
particular country in the ROW would not be permitted by Law or
would not be beneficial from a commercial perspective. Serono
shall have the final decision-making authority on such
alternative trademarks in respect of the ROW, and CancerVax
shall have the final decision-making authority on such
alternative trademarks in respect of the United States.
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omitted portions.
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14.1.2 Ownership. All right, title and interest in Product Trademarks
shall be solely owned by CancerVax, except as expressly
provided herein. Serono agrees that it will not use marks that
are confusingly similar to the Product Trademarks for its
other products.
14.1.3 Registration. CancerVax shall file, prosecute, register and
maintain the Product Trademarks [***] CancerVax will allow
Serono to record itself as the exclusive licensee of the
Product Trademarks in ROW, and shall furnish reasonable
assistance to Serono in effectuating such recordation. The DT
shall coordinate and assign right and responsibility for
registration of domain names that include or are similar to
the Product Trademarks.
14.2 Display; Approval; Quality Control. All Product labeling, packaging and
Promotional Materials relating to Product shall display the appropriate
Product Trademarks in a form and style and with a placement determined
by the DT, subject to complying with all Laws and regulations and
obtaining all necessary Approvals. All uses of the Product Trademarks
shall be consistent with the quality control standards and reasonable
trademark usage guidelines as CancerVax may establish, in coordination
with the DT and Serono. Subject to Laws, unless otherwise agreed by the
Parties, (a) with respect to Product labeling, packaging and
Promotional Materials within the United States, the Serono Housemark
will be printed in the lower left-hand corner and the CancerVax
Housemark will be printed in the lower right-hand corner, and each of
the Serono Housemark and the CancerVax Housemark will be printed in
approximately the same font size in all such Product labeling,
packaging and Promotional Materials, and (b) Product labeling,
packaging and Promotional Materials in the ROW shall bear only the
Serono Housemark.
14.3 Enforcement. CancerVax and Serono shall reasonably cooperate with each
other to protect Product Trademarks. Each Party shall promptly notify
the other party of any known, threatened or suspected infringement,
imitation or unauthorized use of or unfair competition relating to
Product Trademarks. The SC shall determine whether and to what extent
to institute and prosecute or defend any actions or proceedings
involving or affecting Product Trademarks, and all settlements relating
thereto are subject to the SC's approval. The Parties shall reasonably
cooperate in any action taken to enforce or defend their rights in
Product Trademarks, including taking appropriate appeals.
14.4 Housemarks.
14.4.1 Scope of Use. The CancerVax Housemark and Serono Housemark
shall be displayed on Product labeling and other Promotional
Materials relating to the Product as set forth in Section
14.2. All right, title and interest to the Serono Housemark
shall be owned by Serono. All right, title, and interest to
the CancerVax Housemark shall be owned by CancerVax. All use
of the CancerVax Housemark and Serono Housemark shall be
consistent with the quality control standards and reasonable
trademark usage practices as Serono and CancerVax each apply
to their Housemarks, respectively.
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14.4.2 Ownership. Each Party shall retain all world-wide rights,
title and interest in and to its Housemark, except to the
extent expressly granted to the other Party herein. The other
Party shall include an appropriate trademark notice (e.g.,
(TM) or (R), as the case may be) with each use of any of the
other Party's Housemark.
14.4.3 Unauthorized Use. Each Party shall not permit any Person other
than its sublicensees of the Product to use the other Party's
Housemark without the other Party's prior written consent.
Each Party acknowledges that the other Party's Housemark
involves valuable proprietary rights of the other Party. Each
Party shall promptly notify the other Party of any
unauthorized use of the other Party's Housemark that comes to
such Party's attention, and use best efforts to terminate such
unauthorized use. Each Party maintains the exclusive right to
take action against any Person that infringes its Housemark.
14.4.4 Limitations. All uses by each Party of the other Party's
Housemark shall be subject to the other Party's review and
prior written approval. All goodwill arising out of the use of
a Party's Housemark by the other Party will inure to the sole
benefit of the Party that owns such marks. Each Party hereby
acknowledges the other Party's exclusive right, title and
interest in such other Party's Housemark and shall not contest
any part of that right, title and interest. In no event shall
a Party (a) represent in any way that it has or otherwise owns
any rights, title or interest in the other Party's Housemark
beyond the limited rights specifically granted herein, (b)
modify or impair any of the other Party's Housemarks or (c)
use the other Party's Housemark in a manner that is
derogatory, negative or otherwise injurious to the other Party
or would otherwise adversely affect the reputation or goodwill
of the other Party.
14.5 Copyrights. The Parties shall hold jointly an equal and undivided
interest in and to the copyrights in all Product labeling or
Promotional Materials relating to the Product (collectively, the
"Copyrighted Works"), and agree to execute documentation necessary to
effect this provision. Neither Party shall have any obligation to
account to the other for profits or to obtain any approval of the other
party to exploit, license or assign the jointly owned Copyrighted Works
by reason of such joint ownership. To the extent such materials include
or incorporate original work of authorship created by on Party prior to
the Effective Date, the other Party shall not use, or make any
proprietary claim with regard to, such pre-existing materials separate
and apart from their use and inclusion in Copyrighted Works relating to
Product. Each Party grants to the other a license to use such
pre-existing works only in connection with Product and in accordance
with the terms of this Agreement. The Parties shall cooperate with each
other to enforce and defend, including registering with the United
States Copyright Office or other Governmental Authorities, the Parties'
interest in the Copyrighted Works. Each Party will, if requested by the
PT, supply such documentation or other information required to support
any application or registration of the Copyrighted Works with any
applicable Governmental Authority, or to evidence or perfect their
rights in and to the Copyrighted Works under this Section 14.5.
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ARTICLE 15
TERM AND TERMINATION
15.1 Term. Unless terminated earlier pursuant to Section 15.2 or terminated
or extended by the written agreement of the Parties, this Agreement
shall commence on the Effective Date and shall continue in effect until
[***]
15.2 Rights of Termination.
15.2.1 Termination by Serono for Convenience. Serono shall have the
right to terminate this Agreement in its entirety at any time
in its sole discretion by providing CancerVax with written
notice [***] days in advance.
15.2.2 Termination by Either Party for Breach. Either Party may,
without prejudice to any other remedies available to it at law
or in equity, terminate this Agreement in the event that the
other Party (as used in this subsection, the "Breaching
Party") shall have materially breached its obligations under
this Agreement and the Breaching Party has not cured such
default within [***]
15.2.3 Termination by Either Party for Bankruptcy Events. Either
Party may terminate this Agreement upon the filing or
institution of bankruptcy, reorganization, liquidation or
receivership proceedings by or against the other Party, or
upon an assignment by the other Party of a substantial portion
of its assets for the benefit of creditors; provided, that in
the case of any involuntary bankruptcy proceeding, such right
to terminate shall only become effective if the bankrupt Party
consents to the involuntary bankruptcy or such proceeding is
not dismissed within ninety (90) days after the filing
thereof.
15.2.4 Termination in the Event of a Competing Product. CancerVax may
terminate this Agreement in accordance with Section 2.6.1, if
applicable.
15.3 Effect of Expiration or Termination.
15.3.1 All Instances. Upon expiration of the Term or its earlier
termination pursuant to Section 15.2, the Parties will
cooperate to wind down the collaboration and shall divide the
remaining assets as follows:
(a) Serono's licenses hereunder, including under Sections
2.1.1, 2.1.2 and 14.5 shall terminate as of such
termination date;
(b) CancerVax's licenses under Sections 2.2.3 and 14.5
shall terminate as of such termination date, but any
license pursuant to Section 2.2.1 shall continue in
accordance with its terms, except in the case of a
termination
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omitted portions.
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by Serono pursuant to Section 15.2.2 or 15.2.3, in
which case such license shall terminate;
(c) each Party shall, within thirty (30) days after such
termination, return or cause to be returned to the
other Party, at such other Party's cost, all
Confidential Information of the other Party in
tangible form and substances or compositions
delivered or provided by such other Party, as well as
any other material provided by the other Party in any
medium, except that CancerVax may, except in the case
of a termination by Serono pursuant to Section 15.2.2
or 15.2.3, retain any Confidential Information of
Serono applicable to any license pursuant to Section
2.2.1 in accordance with the terms of such license;
(d) each Party shall pay all amounts then due and owing
as of the termination date to the other Party;
(e) to the extent not prohibited by Law, the Parties
shall wind down any clinical trials that are underway
in respect of the Product, taking into account the
health and safety of the subjects enrolled therein,
or, if agreed by the Parties, transfer such trials to
CancerVax;
(f) Serono shall, as promptly as commercially
practicable, to the extent not prohibited by Law,
transfer to CancerVax, at CancerVax's cost,
possession and ownership of all correspondence with
Governmental Authorities, filings and approvals
(including all Approvals) to the extent relating to
the Development, Manufacture or Commercialization of
the Product;
(g) Serono shall, as promptly as commercially
practicable, to the extent not prohibited by Law, at
CancerVax's cost, (i) provide to CancerVax copies of
all data, reports, records and materials in Serono's
possession or control reasonably necessary for the
Development, Manufacture or Commercialization of the
Product, (ii) cooperate with CancerVax to effect the
return of CancerVax Know-How and (iii) to the extent
reasonably necessary for the Manufacture of the
Product, provide to CancerVax a technology transfer
package and assistance relating to Know-How that
cannot be reasonably conveyed pursuant to clause (i)
above;
(h) Serono shall reasonably cooperate with CancerVax to
permit CancerVax to, at CancerVax's option in its
sole discretion and at its cost, assume all rights
and obligations of Serono under any Third Party
contracts solely to the extent that they relate to
the Development, Manufacture or Commercialization of
the Product, and shall, as promptly as commercially
practicable, at Serono's cost, cancel and cease
operations under any such Third Party contracts not
so assumed by CancerVax;
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(i) Serono shall promptly take all steps necessary to
assign to CancerVax, at CancerVax's cost, (i) any
Product Trademarks in the ROW held in Serono's name
as permitted under this Agreement, other than the
Serono Housemark, (ii) ownership of copyrights in
Promotional Materials and other Copyrighted Works and
(iii) ownership of copyrights or other intellectual
property rights in any other reasonably usable
marketing materials; and each of the foregoing shall
also, if available, be provided in camera ready or
digital form;
(j) CancerVax may, in its sole discretion, purchase from
Serono at Serono's cost (i.e., in respect of
Promotional Materials for the United States, the
amount allocated to and incurred by Serono therefor
pursuant to Section 1.18.7, and in respect of
Promotional Materials for the ROW, the cost incurred
by Serono to produce such Promotional Materials), all
or any part of Serono's inventory of Promotional
Materials and any other reasonably usable marketing
materials, and Serono shall promptly deliver to
CancerVax, at CancerVax's cost and direction, any
such materials purchased by CancerVax and destroy any
such materials not purchased by CancerVax;
(k) Serono shall, as promptly as commercially
practicable, deliver to CancerVax or its designee or
dispose of, at CancerVax's direction, any
then-existing Product inventory (including any
labeling or packaging materials), which Product
inventory, if directed by CancerVax to be transferred
to it, shall be transferred on an "as-is" basis and
paid for by CancerVax, if in saleable condition, at
CancerVax's Cost of Goods;
(l) [***] and
(m) except as specified in this Section 15.3 and the
surviving obligations specified in Section 15.5, all
rights and obligations of the Parties under this
Agreement shall terminate as of the date of such
termination.
15.3.2 Additional Effect of Termination by Serono for Convenience or
by CancerVax for Competing Product. In addition to the effects
set forth in Section 15.3.1, upon any termination of this
Agreement by Serono pursuant to Section 15.2.1 or CancerVax
pursuant to Section 15.2.4, [***]
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15.4 Effect of Termination for Bankruptcy Events. In the event this
Agreement is terminated by a Party (as used in this subsection, the
"Terminating Party") pursuant to Section 15.2.3 due to the rejection of
this Agreement by or on behalf of the other Party (as used in this
subsection, the "Bankrupt Party") under Section 365 of the United
States Bankruptcy Code (the "Code"), all licenses and rights to
licenses granted under or pursuant to this Agreement by the Bankrupt
Party to the Terminating Party are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the Code, licenses of rights to
"intellectual property" as defined under Section 101(35A) of the Code.
The Parties agree that the Terminating Party, as a licensee of such
rights under this Agreement, shall retain and may fully exercise all of
its rights and elections under the Code, and that upon commencement of
a bankruptcy proceeding by or against the Bankrupt Party under the
Code, the Terminating Party shall be entitled to a complete duplicate
of or complete access to (as the Terminating Party deems appropriate),
any such intellectual property and all embodiments of such intellectual
property. Such intellectual property and all embodiments thereof shall
be promptly delivered to the Terminating Party (a) upon any such
commencement of a bankruptcy proceeding upon written request therefore
by the Terminating Party, unless the Bankrupt Party elects to continue
to perform all of its obligations under this Agreement or (b) if not
delivered under (a) above, upon the rejection of this Agreement by or
on behalf of the Bankrupt Party upon written request therefore by the
Terminating Party. The foregoing provisions of this Section 15.4 are
without prejudice to any rights the Terminating Party may have under
the Code or other Laws. Notwithstanding anything to the contrary in
this Agreement, (x) in the event that CancerVax is the Bankrupt Party,
the Co-Promotion rights hereunder shall convert automatically to a
license from CancerVax to Serono and (y) in the event Serono is the
Bankrupt Party and this Agreement is rejected by or on behalf of the
Bankrupt Party, the provisions of Section 15.3 shall apply.
15.5 Survival. Expiration or termination of this Agreement shall not relieve
the Parties of any obligation accruing, and shall be without prejudice
to the rights of either Party against the other Party accrued or
accruing, under this Agreement prior to such expiration or termination,
including the obligation to pay royalties or Distributable Profits, as
the case may be, with respect to Product sold prior to such expiration
or termination. The following provisions shall survive the expiration
or termination of this Agreement and shall continue in effect for the
period noted: [***]
ARTICLE 16
DISPUTE RESOLUTION
16.1 [***]
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omitted portions.
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ARTICLE 17
LIMITATIONS ON PURCHASES OF EQUITY SECURITIES
17.1 Purchases of Equity Securities. During the Term and for a period of
[***] thereafter, except pursuant to the Stock Purchase Agreement,
Serono and its Affiliates and any representatives of Serono or its
Affiliates will not (and will not assist or encourage other to)
directly or indirectly in any manner:
17.1.1 acquire, or agree to acquire, directly or indirectly, alone or
in concert with others, by purchase, gift or otherwise, any
direct or indirect beneficial ownership (within the meaning of
Rule l3d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) or interest in any securities or
direct or indirect rights, warrants or options to acquire, or
securities convertible into or exchangeable for, any
securities of CancerVax;
17.1.2 make, or in any way participate in, directly or indirectly,
alone or in concert with others, any "solicitation" of
"proxies" to vote (as such terms are used in the proxy rules
of the Securities and Exchange Commission promulgated pursuant
to Section 14 of the Exchange Act); provided, that the
prohibition in this Section 17.1.2 shall not apply to
solicitations exempted from the proxy solicitation rules by
Rule 14a-2 under the Exchange Act as such Rule 14a-2 is in
effect as of the date hereof;
17.1.3 form, join or in any way participate in a "group" within the
meaning of Section 13(d)(3) of the Exchange Act with respect
to any voting securities of CancerVax;
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17.1.4 acquire or agree to acquire, directly or indirectly, alone or
in concert with others, by purchase, exchange or otherwise,
(a) any of the assets, tangible or intangible, of CancerVax or
(b) direct or indirect rights, warrants or options to acquire
any assets of CancerVax, except for such assets as are then
being offered for sale by CancerVax;
17.1.5 enter into any arrangement or understanding with others to do
any of the actions restricted or prohibited under this ARTICLE
17; or
17.1.6 otherwise act in concert with others, to seek to offer to
CancerVax or any of its stockholders any business combination,
restructuring, recapitalization or similar transaction to or
with CancerVax or otherwise seek in concert with others, to
control, change or influence the management, board of
directors or policies of CancerVax or nominate any person as a
director of CancerVax who is not nominated by the then
incumbent directors, or propose any matter to be voted upon by
the stockholders of CancerVax.
17.2 Exceptions for Purchasing Securities of CancerVax.
17.2.1 Permitted Acquisitions. Nothing herein shall prevent:
(a) Serono from purchasing additional equity securities
of CancerVax if, after such purchase, Serono and its
Affiliates would own no greater percent of the total
voting power of all voting securities of CancerVax
then outstanding than Serono owned immediately
following the Effective Date;
(b) Serono or Serono's employees from purchasing
securities of CancerVax pursuant to (a) a pension
plan established for the benefit of Serono's
employees, (b) any employee benefit plan of Serono or
(c) any stock portfolios not controlled by Serono or
any of its Affiliates that invest in CancerVax among
other companies; or
(c) Serono from acquiring securities of another
biotechnology or pharmaceutical company that
beneficially owns any of CancerVax's securities.
17.2.2 Suspension of Standstill. The restrictions contained in
Section 17.1 shall be suspended during the period in which any
of the following has occurred: [***] provided, that the
restrictions shall be reinstated if [***]
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omitted portions.
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ARTICLE 18
MISCELLANEOUS
18.1 Registration and Filing of this Agreement. Subject to and in
furtherance of Section 10.4, to the extent, if any, that either Party
concludes in good faith that it or the other Party is required to file
or register this Agreement or a notification thereof with any
Governmental Authority, including the Securities and Exchange
Commission, the Competition Directorate of the Commission of the
European Union or the U.S. Federal Trade Commission, in accordance with
Law, such Party shall inform the other Party thereof. Should both
Parties jointly agree that either of them is required to submit or
obtain any such filing, registration or notification, they shall
cooperate, each at its own expense, in such filing, registration or
notification and shall execute all documents reasonably required in
connection therewith. In such filing, registration or notification, the
Parties shall request confidential treatment of sensitive provisions of
this Agreement, to the extent not prohibited by Law. The Parties shall
promptly inform each other as to the activities or inquiries of any
such Governmental Authority relating to this Agreement, and shall
reasonably cooperate to respond to any request for further information
therefrom on a timely basis.
18.2 Accounting Procedures. Each Party shall calculate all amounts hereunder
and perform other accounting procedures required hereunder and
applicable to it in accordance with either (a) United States generally
accepted accounting principles (US GAAP) or (b) the conventions, rules
and procedures promulgated by the International Accounting Standards
Committee (International Accounting Standards), whichever is normally
used by such Party to calculate its financial position, and in each
case consistently applied, including consistently applied throughout
the organization and across all products of such Party. In the event
that any discrepancy arises as to the outcome of such calculations or
as to financial terms and standards used in this Agreement by reason of
such use of different accounting principles, the Parties shall
cooperate in good faith to resolve such differences.
18.3 Patient Information. CancerVax and Serono agree to abide by all Laws
and Governmental Orders of all applicable Governmental Authorities
concerning the confidentiality or protection of patient identifiable
information and patients' protected health information, as defined by
U.S. C.F.R. Part 160 or personal data as defined by EU Directive
95/46/EC or any other applicable legislation.
18.4 Non-Solicitation. During the Term neither Party shall directly solicit,
recruit, induce, encourage or attempt to induce or encourage any
employee of the other Party who was involved in the Development,
Manufacture or Commercialization of the Product under this Agreement to
terminate his or her employment with such other Party and become
employed by or consult for such other Party whether or not such
employee is a full-time employee of such other Party, and whether or
not such employment is pursuant to a written agreement or is at-will;
provided, that in no event shall the foregoing apply to (a)
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unsolicited inquires made by an employee of a Party to the other Party,
(b) unsolicited inquiries received from an employee of a Party as the
result of a general notice or advertisement placed by the other Party,
(c) unsolicited inquiries received from a Third Party representing an
employee of a Party who is generally seeking alternate employment and
(d) candidates who are employees of the other Party put forward by a
Third Party conducting a search on behalf of a Party to fill a position
in the normal course of business; provided, that such candidate shall
have become a client of such Third Party during the course of such
search via unsolicited inquiry by such candidate to such Third Party.
18.5 Force Majeure. The occurrence of an event which materially interferes
with the ability of a Party to perform its obligations or duties
hereunder which is not within the reasonable control of the Party
affected or any of its Affiliates, not due to malfeasance by such Party
or its Affiliates, and which could not with the exercise of due
diligence have been avoided (each, a "Force Majeure Event"), including
an injunction, order or action by a Governmental Authority, fire,
accident, labor difficulty, strike, riot, civil commotion, act of God,
inability to obtain raw materials, delay or errors by shipping
companies or change in Laws, shall not excuse such Party from the
performance of its obligations or duties under this Agreement, but
shall merely suspend such performance during the continuation of the
Force Majeure Event. The Party prevented from performing its
obligations or duties because of a Force Majeure Event shall promptly
notify the other Party in writing of the occurrence and particulars of
such Force Majeure Event and shall provide the other Party, from time
to time, with its best estimate of the duration of such Force Majeure
Event and with notice of the termination thereof. The Party so affected
shall use Commercially Reasonable Efforts to avoid or remove such
causes of nonperformance as soon as is reasonably practicable. The
suspension of performance shall be of no greater scope and no longer
duration than is necessary based on such Party's Commercially
Reasonable Efforts. Upon termination of the Force Majeure Event, the
performance of any suspended obligation or duty shall promptly
recommence. The Party subject to the Force Majeure Event shall not be
liable to the other Party for any direct, indirect, consequential,
incidental, special, punitive, exemplary or other damages arising out
of or relating to the suspension or termination of any of its
obligations or duties under this Agreement by reason of the occurrence
of a Force Majeure Event, so long as such Party complies in all
material respects with its obligations under this Section 18.5.
18.6 Further Assurances. At the reasonable request of Party, the other Party
shall do, execute, acknowledge, deliver and file (or cause the same)
all such further acts, deeds, transfers, conveyances, assignments or
assurances as may be reasonably required to effect any provision of
this Agreement, including in particular those of Sections 15.3 and
15.4.
18.7 Relationship of the Parties; Expenses. Each Party shall bear its own
costs incurred in the performance of its obligations hereunder without
charge or expense to the other except as expressly provided in this
Agreement. Neither Party shall have any responsibility for the hiring,
termination or compensation of the other Party's employees or for any
employee benefits of such employee. No employee or representative of a
Party shall have any authority to bind or obligate the other Party to
this Agreement for any sum or in any
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manner whatsoever, or to create or impose any contractual or other
liability on the other Party without said Party's approval. For all
purposes, and notwithstanding any other provision of this Agreement to
the contrary, Serono's legal relationship under this Agreement to
CancerVax shall be that of independent contractor. This Agreement is
not a partnership agreement and nothing in this Agreement shall be
construed to establish a relationship of co-partners or joint venturers
between the Parties.
18.8 No Third Party Beneficiaries. None of the provisions of this Agreement
shall be for the benefit of or enforceable by any Third Party,
including any creditor of either Party hereto. No such Third Party
shall obtain any right under any provision of this Agreement or shall
by reasons of any such provision make any Claim in respect of any debt,
liability or obligation (or otherwise) against either Party.
18.9 Notices. All demands, notices, consents, approvals, reports, requests
and other communications hereunder must be in writing and will be
deemed to have been duly given only if delivered personally, or by mail
(first class, postage prepaid), or by overnight delivery using a
globally-recognized carrier, to the Parties at the following addresses:
(a) if to CancerVax, to:
CancerVax Corporation
2110 Rutherford Road
Carlsbad, CA 92008 USA
Attn: General Counsel
Facsimile No.: (760) 494-4282
(b) with a copy to:
Morgan, Lewis & Bockius LLP
502 Carnegie Center
Princeton, New Jersey 08540 USA
Attn: Manya S. Deehr, Esq.
Facsimile No.: (877) 432-9652
(c) if to Serono, to:
Serono Technologies S.A.
Zone Industrielle de l'Ouriettaz
1170 Aubonne, Switzerland
Attn: General Manager
Facsimile No.: 41-22-345-5081
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(d) with a copy to:
Serono International S.A.
15bis, Chemin des Mines
Case Postale 54
CH-1211 Geneve 20
Switzerland
Attn: General Counsel
Facsimile No.: 41-22-739-3070
or to such other address as the addressee shall have last furnished in
writing in accord with this provision to the addressor. All notices
shall be deemed effective upon receipt by the addressee.
18.10 Assignment and Delegation. [***]
18.11 Severability. In the event of the invalidity of any provisions of this
Agreement, the Parties agree that such invalidity shall not affect the
validity of the remaining provisions of this Agreement. With the
exception of Section 2.6, the Parties will replace an invalid provision
with valid provisions which most closely approximate the purpose and
economic effect of the invalid provision. With the exception of Section
2.6, in the event that the terms and conditions of this Agreement are
materially altered as a result of the preceding sentences, the Parties
shall renegotiate the terms and conditions of this Agreement in order
to resolve any inequities. Nothing in this Agreement shall be
interpreted so as to require either Party to violate any Laws.
18.12 Headings; Construction; Certain Conventions. The headings used in this
Agreement have been inserted for convenience of reference only and do
not define or limit the provisions
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hereof. The Schedules and Exhibits to this Agreement are incorporated
herein by reference and shall be deemed a part of this Agreement.
Unless otherwise expressly provided herein or the context of this
Agreement otherwise requires, (a) words of any gender include each
other gender, (b) words such as "herein", "hereof", and "hereunder"
refer to this Agreement as a whole and not merely to the particular
provision in which such words appear, (c) words using the singular
shall include the plural, and vice versa, (d) the words "include,"
"includes" and "including" shall be deemed to be followed by the phrase
"but not limited to", "without limitation", "inter alia" or words of
similar import, (e) the word "or" shall be deemed to include the word
"and" (e.g., "and/or") and (f) references to "ARTICLE," "Section,"
"subsection", "clause" or other subdivision, or to a Schedule or
Exhibit, without reference to a document are to the specified
provision, Schedule or Exhibit of this Agreement. This Agreement shall
be construed as if it were drafted jointly by the Parties.
18.13 Entire Agreement; Amendments. This Agreement, together with the Related
Agreements, constitutes the entire agreement between the Parties with
respect to the within subject matter and supersedes all previous
agreements and understandings between the Parties with respect thereto,
whether written or oral. This Agreement may be altered, amended or
changed only by a writing making specific reference to this Agreement
and signed by duly authorized representatives of CancerVax and Serono.
18.14 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 shall be effective unless set forth in a written instrument duly
executed by or on behalf of the Party waiving such term or condition.
No waiver by any Party of any term or condition of this Agreement, in
any one or more instances, shall be deemed to be or construed as a
waiver of the same or any other term or condition of this Agreement on
any future occasion.
18.15 Remedies Cumulative. Except as expressly set forth in this Agreement,
all rights and remedies available to a Party, whether under this
Agreement or afforded by Law, equity or otherwise, will be cumulative
and not in the alternative to any other rights or remedies that may be
available to such Party.
18.16 Governing Law. This Agreement shall be construed, and the respective
rights of the Parties determined, according to the substantive Laws of
the State of New York notwithstanding the provisions governing conflict
of Laws thereunder to the contrary, except matters of intellectual
property which shall be determined in accordance with U.S. federal
patent Laws or the intellectual property Laws relevant to the
intellectual property in question. The UNCITRAL Convention for the
International Sale of Goods, as well as any other unified Laws relating
to the conclusion and implementation of contracts for the international
sale of goods, shall not apply.
18.17 Counterparts; Fax Signatures. This Agreement may be executed in any two
(2) counterparts, including by facsimile, each of which, when executed,
shall be deemed to be an original and both of which together shall
constitute one and the same document.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, CancerVax and Serono, by their duly authorized
officers, have executed this Agreement as of the Effective Date.
CANCERVAX CORPORATION SERONO TECHNOLOGIES S.A.
By: /s/ David F. Hale By: /s/ Leon Bushara
--------------------------------- ------------------------------------
Name: David F. Hale Name: Leon Bushara
Title: President & CEO Title: Authorized Representative
Acknowledged solely in connection with
ARTICLE 7 (Co-Promotion) and ARTICLE 10 (Confidentiality)
as of , 20 :
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- ------------------------------------
By:
---------------------------------
Name:
Title:
SIGNATURE PAGE TO COLLABORATION AND LICENSE AGREEMENT
SCHEDULE 1.13
CANCERVAX PATENTS
[***]
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CONFIDENTIAL
EXHIBIT A
TERMS FOR MANUFACTURING AND SUPPLY AGREEMENT
- - [***]
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the Commission. Confidential treatment has been requested with respect to the
omitted portions.