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Under 17 C.F.R. Sections 200.80(b)(4) and 240.24b-2"
EXHIBIT 10.38
================================================================================
LICENSE AND CO-DEVELOPMENT AGREEMENT
BY AND BETWEEN
NOVARTIS INTERNATIONAL PHARMACEUTICAL LTD.
AND
ANADYS PHARMACEUTICALS, INC.
================================================================================
1. DEFINITIONS AND INTERPRETATION....................................................... 1
2. LICENSE.............................................................................. 12
3. OPTION RIGHTS........................................................................ 13
4. GOVERNANCE........................................................................... 18
5. DISCLOSURE OF ANADYS KNOW-HOW & TECHNOLOGY TRANSFER.................................. 20
6. DEVELOPMENT.......................................................................... 21
7. COMMERCIALIZATION.................................................................... 25
8. CO-PROMOTION OPTION.................................................................. 26
9. FINANCIAL PROVISIONS................................................................. 28
10. REPORTS AND PAYMENT TERMS............................................................ 32
11. INTELLECTUAL PROPERTY RIGHTS......................................................... 34
12. EXCLUSIVITY.......................................................................... 39
13. CONFIDENTIALITY...................................................................... 40
14. TERM AND TERMINATION................................................................. 41
15. EFFECT OF TERMINATION................................................................ 43
16. REPRESENTATIONS AND WARRANTIES....................................................... 44
17. INDEMNIFICATION AND LIABILITY........................................................ 46
18. PUBLICATIONS AND PUBLICITY........................................................... 48
19. GENERAL PROVISIONS................................................................... 49
EXHIBIT A - ANADYS COMPOUNDS
EXHIBIT B - ANADYS PATENTS
EXHIBIT C - FULLY BURDENED MANUFACTURING COSTS
EXHIBIT D - THIRD PARTY MANUFACTURING CONTRACTS
EXHIBIT E - SAMPLE INVOICE
LICENSE AND CO-DEVELOPMENT AGREEMENT
This AGREEMENT is made as of this 1st day of June, 2005 (the
"EXECUTION DATE"), by and between Novartis International Pharmaceutical Ltd., a
limited company organized and existing under the laws of Bermuda ("NOVARTIS")
and Anadys Pharmaceuticals, Inc., a corporation organized and existing under the
laws of the State of Delaware ("ANADYS"). Novartis and Anadys are each referred
to individually as a "PARTY" and together as the "PARTIES."
RECITALS
WHEREAS, Anadys owns or controls the Anadys Patents and Anadys
Know-How (each as defined below) relating to the Anadys Compounds (as defined
below);
WHEREAS, Novartis wishes to obtain, and Anadys wishes to grant,
rights to the Anadys Compounds in the Primary Fields and ID Field (each as
defined below);
WHEREAS, the Parties wish to jointly develop the Lead Compound and
related Product (each as defined below) in the Primary Fields on a worldwide
basis;
WHEREAS, Novartis will have the right to commercialize the Products
on a worldwide basis in the Primary Fields and the option to obtain rights to
commercialize Products on a worldwide basis in the ID Field, subject to Anadys'
option to co-promote the Product in the Primary Fields in the United States; and
WHEREAS, the Parties acknowledge that the primary objective of the
collaboration will be to develop the Lead Compound as [...***...] with
[...***...] for the treatment of hepatitis C infected patients with such Product
meeting the specifications of the Target Product Profile (as defined below).
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the Parties agree as follows.
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. Unless the context otherwise requires, the terms in
this Agreement with initial letters capitalized, shall have the
meanings set forth below, or the meaning as designated in the
indicated places throughout this Agreement.
"ACCOUNTING STANDARDS" means, with respect to Anadys, US GAAP (United
States Generally Accepted Accounting Principles) and, with respect to
Novartis, IFRS (International Financial Reporting Standards), in each
case, as generally and consistently applied throughout such Party's
organization.
"AFFILIATE" means, in relation to a Party, any entity or person that
controls, is controlled by, or is under common control with that Party;
provided, however, [...***...]. For the purpose of this definition,
"control" shall mean direct or indirect ownership of more than fifty
percent (50%) of the shares of stock entitled to vote for the election of
directors, in the
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case of a corporation, or more than fifty percent (50%) of the equity
interest in the case of any other type of legal entity, or any other
arrangement whereby the entity or person has the power to elect a majority
of the board of directors or equivalent governing body of a corporation or
other entity, or the ability to cause the direction of the management or
policies of a corporation or other entity.
"ALLIANCE MANAGER" shall have the meaning set out in Clause 4.1.
"ANADYS COMPOUNDS" means (a) ANA975 Compound [...***...], (b) the
compounds identified in Exhibit A ([...***...]); and (c) any other
compounds that [...***...] and owned or controlled by Anadys or its
Affiliates as of the Effective Date or thereafter during the term of this
Agreement ([...***...] of [...***...]). [...***...].
"ANADYS KNOW-HOW" means any Know-How owned or controlled (including
through a license with the right to sublicense to Novartis hereunder) by
Anadys or its Affiliates as of the Effective Date or thereafter during the
term of this Agreement relating to the Anadys Compounds and/or Products,
their use, formulation, preparation or manufacture or which is necessary
or useful for the development, manufacture, import, use or sale of the
Anadys Compounds and/or Products.
"ANADYS PATENTS" or "ANADYS PATENT RIGHTS" means the Patent Rights
identified in Exhibits B-1 and B-2 and any other Patent Rights owned or
controlled (including through a license with the right to sublicense to
Novartis hereunder) by Anadys or its Affiliates as of the Effective Date
or thereafter during the term of this Agreement having claims covering the
Anadys Compounds and/ or Products, their use, formulation, preparation or
manufacture or having claims which are necessary or useful for the
development, manufacture, import, use or sale of the Anadys Compounds
and/or Products.
"ANADYS TECHNOLOGY" means the Anadys Know-How and Anadys Patent Rights.
"ANADYS TLR7 COMPOUND" means a TLR7 Compound that is owned or controlled
(including through a license with the right to sublicense to Novartis
hereunder) by Anadys.
"ANA380 COMPOUND" means the compound identified by the IUPAC name:
[...***...], which is licensed from LG Life Sciences, Ltd. ("LG LIFE
SCIENCES") to Anadys under the license agreement between LG Life Sciences
and Anadys dated April 18, 2004 and the related Patent Rights and
Know-How.
"ANA975 COMPOUND" means the compound identified by the IUPAC name:
[...***...].
"CALENDAR QUARTER" shall mean the respective periods of three consecutive
calendar months ending on March 31, June 30, September 30 and December 31.
"CHANGE OF CONTROL" means any of the following events: (a) any Third Party
(or group of Third Parties acting in concert) becomes the beneficial
owner, directly or indirectly, of more than fifty percent (50%) of the
total voting power of the stock then outstanding of Anadys normally
entitled to vote in elections of directors (other than as a result of a
bona fide equity financing transaction with arm's length financial
investors); (b) Anadys consolidates with or merges into another
corporation or entity, or any corporation or entity consolidates with or
merges into Anadys, in either event pursuant to a transaction in which
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more than fifty percent (50%) of the total voting power of the stock
outstanding of the surviving entity normally entitled to vote in elections
of directors is not held by the parties holding at least fifty percent
(50%) of the outstanding shares of Anadys preceding such consolidation or
merger; or (c) Anadys conveys, transfers or leases all or substantially
all of its assets to a Third Party.
"CLAIMS" means all Third Party demands, claims, actions, proceedings and
liability (whether criminal or civil, in contract, tort or otherwise) for
losses, damages, legal costs and other expenses of any nature whatsoever
and all costs and expenses incurred in connection therewith.
"COLLABORATION TLR7 COMPOUND" means an Anadys TLR7 Compound or a Novartis
TLR7 Compound that has been designated as an "Collaboration TLR7 Compound"
in accordance with Clause 3.5.
"COMMERCIALIZATION BUDGET" means the estimated Commercialization Costs for
a particular year, as set forth in a Rolling Forecast.
"COMMERCIALIZATION COSTS" means, with respect to the Lead Compound and
corresponding Product, expenses and other costs incurred by or on behalf
of a Party that are directly related to the sale, promotion, pre-marketing
and marketing of such Lead Compound and Product in the US. Without
limitation of the generality of the foregoing, Commercialization Costs
shall include (a) all reasonable costs and expenses paid to Third Parties
by the Parties or their Affiliates in respect of Product marketing efforts
in the US, (b) the direct costs of internal sales and marketing personnel
and field sales force (for the avoidance of doubt, excluding the costs of
managerial, financial, legal and business development personnel) engaged
in the sale, promotion, pre-marketing and marketing of such Product in the
US, which will be accounted for based on a commercially reasonable
methodology and rate to be agreed upon by the US JMC, with the same
methodology and rate applying to both Parties, (c) the direct cost of each
Party's managed care organization engaged in activities with respect to
the Product in the US, (d) the cost of Commercialization Studies of such
Product for the US market, and (e) the costs of samples of the Product and
promotional materials supplied. For purposes of calculating
Commercialization Costs, the costs of detailing sales calls will be
allocated as a set amount based on the position of the Product in a sales
call as established by the US JMC (e.g., first, second and third position
details would represent [...***...]%,[...***...]% and [...***...]%,
respectively, of the cost of the call), with the same cost per call
applying to both Parties. No cost or expense item included in
Commercialization Costs shall include any [...***...] (it being understood
that any personnel costs that are based on a set rate will not be
considered to include any [...***...]). In addition, to the extent the
activities giving rise to any item of Commercialization Costs relate to,
or are conducted for the benefit of, multiple products and one or more of
such products are not Product or multiple territories and one of which is
the US, then such item of expense shall be allocated on a pro rata basis
among such Product and other product(s) or among the US and other
territories based upon a methodology to be established by the US JMC and
applied equally to both Parties.
"COMMERCIALIZATION STUDY" means [...***...].
"COMPETITIVE PRODUCT" means, in a country where a particular Product is
being commercialized by or on behalf of Novartis (or its Affiliate or
sublicensee), a product
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being commercialized in such country by a Third Party (other than a
sublicensee of Novartis and other than a Third Party commercializing or
distributing Product on behalf Novartis, its Affiliates or sublicensees),
which product is a preparation in final form containing [...***...], any
compound that is [...***...] or any compound that is [...***...] of the
foregoing, and which is [...***...] as the Product being commercialized by
or on behalf of Novartis (or its Affiliate or sublicensee) in such
country.
"CONFIDENTIAL INFORMATION" means all Know-How and other proprietary
information and data of a financial, commercial or technical nature which
the disclosing Party or any of its Affiliates has supplied or otherwise
made available to the other Party, whether made available orally, in
writing or in electronic form, including information comprising or
relating to concepts, discoveries, inventions, data, designs or formulae
in relation to this Agreement.
"CO-PROMOTION OPTION" means the option described in Clause 8.
"CO-PROMOTION OPTION PERIOD" means the period from the completion of the
final study report from the first Phase 3 Clinical Trial for the Product
until [...***...] ([...***...])[...***...] after the [...***...] for the
Product in the US; provided, however, that if the JDC determines that the
Product is likely to receive priority review by the FDA (which
determination of likelihood shall be made by the JDC [...***...]
([...***...])[...***...] prior to [...***...]), the Co-Promotion Option
Period shall end [...***...] ([...***...])[...***...] prior to the
[...***...].
"CO-PROMOTION PERIOD" means the period, if any, commencing on the exercise
of the Co-Promotion Option by Anadys and continuing for so long as the
Parties co-promote the Product in the US for the Primary Fields in
accordance with this Agreement.
"DEVELOPMENT BUDGET" means the budget for the development activities to be
undertaken by the Parties under the Development Plan.
"DEVELOPMENT BUDGET CAP" means the agreed upon maximum Development Budget
to be shared by the Parties for the initial[...***...] ([...***...]) year
period following the Execution Date, subject to Clause 6.5.
"DEVELOPMENT COSTS" means expenses and other costs incurred by or on
behalf of a Party that are directly related to the development of the Lead
Compound and corresponding Product in accordance with the Development
Plan, including the costs of pre-clinical activities, DMPK, supply of
clinical material, manufacturing scale-up, CMC and toxicology activities,
clinical trials (including Development Studies), the preparation,
collation and/or validation of data from clinical trials and the
preparation of medical writing and publishing; provided that Development
Costs shall exclude the cost of Commercialization Studies. Without
limitation of the generality of the foregoing, Development Costs include:
(a) direct project related expenses paid by a Party or its Affiliates to
Third Parties and specifically identifiable and incurred to develop such
Product, such expenses to have been recorded as income statement items in
accordance with the Party's Accounting Standards and not including
[...***...] amounts, [...***...] or [...***...];
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(b) the direct and indirect costs of internal scientific, medical or
technical personnel of a Party or its Affiliates (including [...***...]
and other [...***...] (which are included in the [...***...]), but for the
avoidance of doubt, not including the costs of
[...***...],[...***...],[...***...],[...***...], or [...***...] and
[...***...]) engaged in development of Product, which costs shall be
determined based on the [...***...];
(c) the cost of [...***...] and [...***...] of such Product, including
costs for the [...***...] and/or [...***...] and [...***...] (any
[...***...] by Anadys prior to the Effective Date will be [....***...]
when [...***...] or [...***...], which costs shall not exceed
$[...***...]);
(d) the costs of filings to obtain Regulatory Approvals for such Product;
(e) the costs of [...***...],[...***...],[...***...] and/or [...***...] of
such Product at [...***...] and [...***...];
(f) the costs of [...***...], [...***...], [...***...]and/or [...***...]
of [...***...], Anadys Compounds to the extent required by Regulatory
Authorities in connection with Regulatory Approval of Product; and
(g) the costs for prosecuting, obtaining and maintaining the [...***...]
pursuant Clause [...***...] and [...***...] and [...***...] of the costs
for [...***...],[...***...] and [...***...] the [...***...] and
[...***...] pursuant Clause [...***...].
For purposes of clarification, effective as of the Effective Date, any and
all of the foregoing costs and expenses incurred by or on behalf of either
Party during the period from the Execution Date to the Effective Date
shall be included as Development Costs for purposes of this Agreement
(including, without limitation, Section 6.5) provided that such costs and
expenses are incurred in accordance with the Development Plan mutually
agreed upon by the Parties as of the Execution Date (including the
Development Budget included therein).
No cost or expense item included in Development Costs shall include any
[...***...] or [...***...] (it being understood that [...***...]
determined based on the [...***...] will not be considered to include any
[...***...] or [...***...]). Without limiting the generality of the
foregoing, in order to ensure that subcontracting to Affiliates does not
result in unnecessary increases in Development Costs, the Parties agree
that Development Costs for any activity subcontracted by either Party to
its Affiliate shall be calculated in the same manner as if such activity
were performed by the Party itself.
"DEVELOPMENT PLAN" means the development plan setting out: (a) the
activities to be undertaken by the Parties in connection with the
development of the [...***...] Compound and corresponding Product
(including [...***...],[...***...],[...***...] and [...***...],[...***...]
and [...***...] to be used in any clinical trials to be undertaken by the
Parties), which activities are relevant to obtaining Regulatory Approval
in the [...***...], and the allocation of the activities between the
Parties; and (b) the activities to be undertaken by Novartis in connection
with the development of the [...***...] Compound and corresponding Product
(including [...***...], [...***...], [...***...] and [...***...],
[...***...] and [...***...] to be used in any clinical trials to be
undertaken by the Parties), which activities are not relevant to obtaining
Regulatory Approval in the [...***...] ([...***...]); and including, in
each case, the Development Budget
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with the estimated Development Costs for such activities. The portion of
the Development Plan for all activities to be conducted up to initiation
of the [...***...] (including the budget for such activities) has been
agreed upon by the Parties as of the Execution Date, subject to Clause
4.2. A draft of the portion of the Development Plan for activities to be
conducted from and after initiation of the [...***...] (including the
budget for such activities) has been agreed upon by the Parties as of the
Execution Date, and such draft will be finalized by the JDC, and approved
in writing by the JSC, within [...***...] ([...***...]) days of the
Effective Date.
"DEVELOPMENT STUDY" means a clinical study for a Product in a country
commenced prior to or after receipt of Regulatory Approval of the
corresponding NDA or MAA for such Product in such country that the JDC
determines is intended to support or maintain a filing with a Regulatory
Authority for such Product (e.g., to support expanded labeling for such
Product, or to satisfy requirements imposed by Regulatory Authorities in
connection with the Regulatory Approval).
"EFFECTIVE DATE" means the date this Agreement enters into effect as
determined in accordance with Clause 19.16.
"ENCUMBRANCE" means any claim, charge, equitable interest, hypothecation,
lien, mortgage, pledge, option, license, assignment, power of sale,
retention of title, right of pre-emption, right of first refusal or
security interest of any kind.
"FIRST COMMERCIAL SALE" means, with respect to a Product, the first arm's
length sale to a Third Party for use or consumption of any such Product in
a country after receipt of Regulatory Approval in such country or, if no
such Regulatory Approval is required, the date upon which such Product is
first commercially launched in such country.
"FTE RATE" means [...***...] (consisting of a total of [...***...]), to be
pro-rated on a daily basis if necessary ([...***...] to be [...***...] by
[...***...] to produce the [...***...] consisting of [...***...]); such
rate to exclude [...***...] activities and be restricted to [...***...].
For the avoidance of doubt, such rate shall include all [...***...].
"FULLY BURDENED MANUFACTURING COSTS" shall have the meaning set forth in
Exhibit C.
"HBV FIELD" means the treatment, diagnosis or prevention of hepatitis B
virus ("HBV").
"HCV FIELD" means the treatment, diagnosis or prevention of hepatitis C
virus ("HCV").
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules promulgated thereunder.
"HSR FILING DATE" shall have the meaning set forth in Clause 19.16.
"ID FIELD" means the treatment, diagnosis or prevention of infectious
diseases outside of the Primary Fields.
"IND" means an Investigational New Drug application in the US filed with
the Food and Drug Administration (or any successor entity) ("FDA") or the
corresponding application for the investigation of Products in any other
country or group of countries, as defined in
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the applicable laws and regulations and filed with the Regulatory
Authority of a given country or group of countries.
"JOINT DEVELOPMENT COMMITTEE" or "JDC" means the committee established as
set out in Clause 4.4.
"JOINT STEERING COMMITTEE" or "JSC" means the committee established as set
out in Clause 4.2.
"KNOW-HOW" means all technical information, know-how and data, including
inventions, discoveries, trade secrets, specifications, instructions,
processes, formulae, materials, expertise and other technology applicable
to formulations, compositions, products or their manufacture, development,
registration, use or marketing or methods of assaying or testing them or
processes for their manufacture, formulations containing them,
compositions incorporating or comprising them and including all
biological, chemical, pharmacological, biochemical, toxicological,
pharmaceutical, physical and analytical, safety, quality control,
manufacturing, preclinical and clinical data, instructions, processes,
formulae, expertise and information, relevant to the development,
manufacture, use or sale of and/or which may be useful in studying,
testing, development, production or formulation of products, or
intermediates for the synthesis thereof.
"LEAD COMPOUND" means the Anadys Compound selected by the JSC for lead
development in the Primary Fields in accordance with the Development Plan,
which, as of the Effective Date, is the ANA975 Compound.
"MAA" means an application for the authorization for marketing of a
Product in any country or group of countries outside the United States, as
defined in the applicable laws and regulations and filed with the
Regulatory Authority of a given country or group of countries.
"MILESTONES" means the milestones relating to the Product as set out in
Clause 9.2.
"MILESTONE PAYMENTS" means the payments due by Novartis to Anadys upon the
achievement of the corresponding Milestones as set out in Clause 9.2.
"NDA" means a New Drug Application in the United States for authorization
for marketing of a Product, as defined in the applicable laws and
regulations and filed with the FDA.
"NET SALES" means the gross amounts invoiced by or on behalf of Novartis,
its Affiliates and their respective sublicensees for sales of Products to
Third Parties that are not affiliates or sublicensees of the selling party
(unless such affiliate or sublicensee is the end user of such Product, in
which case the amount billed therefor shall be deemed to be the amount
that would be billed to a Third Party end user in an arm's-length
transaction), less the following deductions, determined in accordance with
[...***...], to the extent included in the [...***...] of any Product or
otherwise directly paid or incurred by [...***...] with respect to the
sale of such Product:
(a) normal and customary trade and quantity discounts actually allowed and
properly taken directly with respect to sales of the Product; (b) amounts
repaid or credited by reasons of
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defects, rejection, recalls, returns, rebates and allowances of goods or
because of retroactive price reductions specifically identifiable to the
Product; (c) chargebacks and other amounts paid on sale or dispensing of
such Product; (d) amounts payable resulting from governmental, regulatory
or agency mandated rebate programs; (e) tariffs, duties, excise, sales,
value-added and other taxes (other than taxes based on income); (f)
retroactive price reductions that are actually allowed or granted; (g)
cash discounts actually granted for timely payment; (h) delayed ship order
credits actually granted; (i) discounts actually granted pursuant to
indigent patient programs and patient discount programs, including,
without limitation, "Together Rx" and coupon discounts; (j) all freight,
postage and insurance included in the invoice price; (k) amounts repaid or
credited for uncollectible amounts on previously sold products; and (l)
[...***...] in gross amounts invoiced for Products, [...***...] for
[...***...] to [...***...] and [...***...] in [...***...] to [...***...]
in [...***...] net sales of [...***...].
All the foregoing as determined in accordance with [...***...], which are
in accordance [...***...]. In no event shall any item of Commercialization
Costs or Fully Burdened Manufacturing Costs be deducted in determining Net
Sales under this Agreement.
In the event the Product is sold in a finished dosage form containing an
Anadys Compound in combination with one or more other active ingredients
(a "COMBINATION PRODUCT"), the Net Sales of the Product, for the purposes
of this Agreement, shall be determined by multiplying the Net Sales (as
defined above) of the Combination Product by the fraction, A/(A+B) where A
is the weighted (by sales volume) average sale price in a particular
country of the Product when sold separately in finished form and B is the
weighted average sale price in that country of the other product(s) sold
separately in finished form. In the event that such average sale price
cannot be determined for both the Product and the other product(s) in
combination, Net Sales for purposes of determining royalty payments shall
be agreed by the Parties based on the relative value contributed by each
component, such agreement shall not be unreasonably withheld.
"NOVARTIS TLR7 COMPOUND" means a TLR7 Compound that is owned or controlled
(including through a license) by Novartis.
"PATENT RIGHTS" means all patents and patent applications, including all
divisionals, continuations, substitutions, continuations-in-part,
re-examinations, reissues, additions, renewals, extensions, registrations,
and supplemental protection certificates and the like of any of the
foregoing.
"PHASE 2b CLINICAL TRIAL" means a controlled clinical study of the Product
in human patients to evaluate its safety and efficacy in the proposed
therapeutic indication at multiple doses and/or regimens, as more fully
defined under the rules and regulations of the FDA (including in 21 C.F.R.
Part 312.21(b), as amended and updated).
"PHASE 2b HBV EFFICACY" means the occurrence of either of the following:
(a) receipt of results of a Phase 2b Clinical Trial for the HBV indication
of the Lead Compound using a [...***...] of the Lead Compound (or such
other [...***...] as is selected by the JSC) demonstrating [...***...] and
[...***...] into a [...***...] as determined by the JSC; or (b) a decision
by the JSC to initiate a Phase 3 Clinical Trial of the Lead Compound in
HBV patients based on the Target Product Profile.
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"PHASE 2b HCV CLINICAL TRIAL" means a Phase 2b Clinical Trial in
[...***...] with [...***...] for [...***...] (or other duration that the
JSC agrees supports progression into a Phase 3 Clinical Trial), the trial
protocol for which will be established by the JDC (or an appropriate
committee established by the JDC) and approved by the JSC. For the
avoidance of doubt, [...***...].
"PHASE 2b HCV EFFICACY" means the occurrence of either of the following:
(a) receipt of results of a Phase 2b HCV Clinical Trial using a
[...***...] of the Lead Compound (or such other [...***...] as is selected
by the JSC) demonstrating [...***...] and [...***...] into a [...***...]
as determined by the JSC; or (b) a decision by the JSC to initiate a Phase
3 Clinical Trial of the Lead Compound in HCV patients based on the Target
Product Profile.
"PHASE 3 CLINICAL TRIAL" means a pivotal clinical study of a Product in
patients which protocol is designed to establish efficacy and safety of
such Product for the purpose of preparing and submitting a NDA to the FDA
or a MAA to another Regulatory Authority.
"PHASE 3 CONFIRMATION OF EFFICACY" means the occurrence of either of the
following: (a) receipt of results of a Phase 3 Clinical Trial for the HCV
indication of the Lead Compound using a [...***...] of the Lead Compound
(or such other [...***...] as is selected by the JSC) demonstrating
[...***...] and [...***...] sufficient as defined by the Development Plan
to [...***...] and filing of an NDA or a MAA filing with the EMEA for the
Lead Compound as determined by the JSC based on the Target Product
Profile; or (b) a decision by the JSC to file an NDA or a MAA with the
EMEA for the Lead Compound based on the Target Product Profile.
"PRIMARY FIELDS" means the HCV Field and HBV Field. "PRIMARY FIELD" shall
mean either the HCV Field or the HBV Field, as applicable.
"PRODUCT" means a product incorporating or comprising the Lead Compound or
any other Anadys Compound in finished dosage pharmaceutical form,
including, in each case, all formulations and modes of administration
thereof, the development, manufacture, sale or use of such Lead Compound
or other Anadys Compound (a) would, but for the license granted hereunder,
infringe the Anadys Patent Rights or (b) incorporates or embodies Anadys
Know-How.
"PRODUCT PROFIT" means Net Sales of Products by Novartis, its Affiliates
and sublicensees in the US, less the following amounts: (a) the Fully
Burdened Manufacturing Costs of Products sold in the US; (b) an amount
equal to [...***...] percent ([...***...]%) of the [...***...] amount for
[...***...]; and (c) the direct cost of each Party's Scientific Operations
organization engaged in activities with respect to the Product in the US
and each Party's medical education activities relating to the Product in
the US. No cost item subject to inclusion in the calculation of Product
Profits will be included more than once in calculating Product Profits.
"PROOF OF CONCEPT - [...***...]" means the occurrence of either of the
following: (a) receipt of results from the [...***...] of[...***...] -
[...***...] for the [...***...] of the Lead Compound demonstrating a
[...***...] in at least [...***...] of [...***...] or greater at
[...***...] ([...***...])[...***...] (or such other [...***...]that is
accepted by the JSC) and an acceptable [...***...] and [...***...]
([...***...])[...***...] as [...***...]; or (b) a
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decision by the JSC to initiate the Phase 2b HCV Clinical Trial of the
Lead Compound based on the Target Product Profile.
"PROOF OF CONCEPT - [...***...]" means the occurrence of either of the
following: (a) [...***...] of [...***...] from the [...***...] of
[...***...] - [...***...] for the [...***...] of the Lead Compound
demonstrating a [...***...] in at least [...***...] of [...***...] or
greater at [...***...] ([...***...])[...***...] (or such other [...***...]
that is accepted by the JSC) and a [...***...] that is [...***...] to the
[...***...] and an acceptable clinical safety profile that [...***...]
([...***...])[...***...] as [...***...]; or (b) a decision by the JSC to
initiate the Phase 2b HCV Clinical Trial of the Lead Compound based on the
Target Product Profile.
"PROOF OF CONCEPT TRIAL - [...***...]" means the proof of concept trial
(designated as the [...***...] by [...***...] as of the Effective Date)
that (a) consists of at least [...***...],[...***...], and (b) uses an
[...***...] (or other [...***...] approved by the JDC) of the Lead
Compound.
"PROOF OF CONCEPT TRIAL - [...***...]" means a clinical trial undertaken
pursuant to the Development Plan approved by the JDC that (a) consists of
at least [...***...],[...***...], (b) [...***...] ([...***...]) for the
[...***...] of [...***...] the [...***...] and [...***...], (c) includes a
[...***...], and (d) [...***...] a [...***...] of the Lead Compound.
"REGULATORY APPROVAL" means, with respect to a Product, any approval
(including pricing approval), registration, license or authorization from
a Regulatory Authority with respect to the manufacture, development,
commercialization, sale, storage or transport of such Product in a country
or other jurisdiction that is necessary to market and sell such Product in
such country or jurisdiction.
"REGULATORY AUTHORITY" means any governmental agency or authority
responsible for granting Regulatory Approvals for Products, including the
FDA, the European Medicines Agency (or any successor entity) ("EMEA") and
any national regulatory authorities.
"ROYALTY PAYMENTS" means the royalty due by Novartis to Anadys on Net
Sales as set out in Clause 9.3.
"SALES REPORT" means a written report or reports showing each of: (a) the
[...***...] of each Product in each country in the world during the
reporting period by Novartis and each Affiliate and sublicensee; (b) the
number of Products sold in each country in the world during the reporting
period by Novartis and each Affiliate and sublicensee, and if applicable,
the average sale price during the reporting period for each Product in any
Combination Product; (c) the royalties, payable in United States Dollars,
which shall have accrued under Clause 9.3 in respect of such sales and the
basis of calculating those royalties; (d) withholding taxes, if any,
required by law to be deducted in respect of any such sales; and (e) the
US Dollar and local currency Net Sales by country.
"TARGET PRODUCT PROFILE" means the target product profile setting out the
specifications for the Product to be developed under this Agreement as
agreed to by the Parties as of the Effective Date. The JSC shall
periodically (but at least annually) review and, as appropriate, update
the Target Product Profile.
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"TECHNOLOGY TRANSFER PERIOD" shall mean the period beginning on the
Effective Date and ending [...***...] ([...***...])[...***...] thereafter
(subject to extension as reasonably necessary and mutually agreed by the
Parties).
"THIRD PARTY" means any entity or person other than a Party or an
Affiliate of a Party.
"TLR7 COMPOUND" means a [...***...] whose [...***...] is as an [...***...]
or [...***...] of the Toll-Like Receptor 7, but excluding the Anadys
Compounds.
"TLR7 DRUG CANDIDATE" has the meaning provided in Clause 3.5(a).
"TLR7 OPTION PERIOD" means the period commencing on the Effective Date and
continuing until the [...***...] of the Effective Date.
"TLR7 PRODUCT" means a product incorporating or comprising a Collaboration
TLR7 Compound in finished dosage pharmaceutical form, including, in each
case, all formulations and modes of administration thereof.
"US JMC" means the committee established as set out in Clause 4.5.
"USD" or "US$" means the lawful currency of the United States.
"VALID CLAIM" means a claim of an issued patent that has not expired or
been revoked, held invalid or unenforceable by a patent office, court or
other governmental agency of competent jurisdiction in a final and
non-appealable judgment (or judgment from which no appeal was taken within
the allowable time period) or a claim within a patent application that has
not been revoked, cancelled, withdrawn, held invalid or abandoned and
which has not been pending for more than [...***...] from the date of its
first filing.
1.2 INTERPRETATION. In this agreement unless otherwise specified:
(a) "includes" and "including" shall mean includes and including without
limitation;
(b) a Party includes its permitted assignees and/or the respective
successors in title to substantially the whole of its undertaking;
(c) a statute or statutory instrument or any of their provisions is to
be construed as a reference to that statute or statutory instrument
or such provision as the same may have been or may from time to time
hereafter be amended or re-enacted;
(d) words denoting the singular shall include the plural and vice versa
and words denoting any gender shall include all genders;
(e) the Exhibits and other attachments form part of the operative
provision of this Agreement and references to this Agreement shall,
unless the context otherwise requires, include references to the
recitals and the Exhibits and attachments;
(f) the headings in this Agreement are for information only and shall
not be considered in the interpretation of this Agreement; and
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(g) general words shall not be given a restrictive interpretation by
reason of their being preceded or followed by words indicating a
particular class of acts, matters or things.
2. LICENSE
2.1 ANADYS TECHNOLOGY LICENSE. Subject to the terms and conditions of
this Agreement, Anadys hereby grants to Novartis an exclusive (even
as to Anadys), worldwide, sub-licensable (subject to Clause 2.2),
royalty-bearing license, under the Anadys Technology, (a) to
develop, make, have made, use, sell, have sold, offer for sale and
import the Anadys Compounds and Products in the Primary Fields and
(b) to develop, make and have made the Anadys Compounds and Products
in the ID Field (but without any right to sell or commercialize in
the ID Field, subject to Clause 3.1). The exclusivity of the
foregoing license to commercialize Products in the Primary Fields in
the US is subject to the Co-Promotion Option of Anadys as set out in
Clause 8. Anadys will not have any right to develop, make, have
made, use, sell, have sold, offer for sale or import the Anadys
Compounds or Products in any field, except under this Agreement, and
will not license, directly or indirectly, any Third Party the right
to perform any of the foregoing activities with respect to Anadys
Compounds or Products in any field.
2.2 SUBLICENSE RIGHTS. Novartis may sublicense the rights granted to it
by Anadys under this Agreement at any time. However, in respect of
the license to the Lead Compound in the Primary Fields, Novartis may
only sublicense its rights (a) [...***...], (b) [...***...] (i) at
Novartis' option after the [...***...] and the [...***...] (if any),
(ii) during the [...***...] and [...***...] (if any) upon the prior
written approval of Anadys (not to be unreasonably withheld or
delayed) and subject to Clause 6.10 and 7.3, or (iii) at any time to
Affiliates of Novartis. Novartis shall provide Anadys with written
notice of the grant of any such sublicense within [...***...]
([...***...])[...***...] thereafter. Notwithstanding the foregoing,
Novartis may sublicense the right to commercialize and distribute
the Product based on the Lead Compound to [...***...] provided,
however, that Novartis shall not (and shall not permit its
Affiliates to) [...***...] with respect to [...***...] such Product
or any Anadys Compound, nor include any [...***...] of [...***...]
of the [...***...] without the prior written consent of Anadys.
During the Co-Promotion Period, in the event Novartis plans to
sublicense its right to commercialize and/or distribute the Product
based on the Lead Compound to any other Third Party, Novartis shall
provide written notice of such determination to Anadys and shall
offer to Anadys substantially the same terms and conditions it plans
to offer any such third party. Upon Anadys' written request made
within [...***...] ([...***...])[...***...] after receipt of such
notice, Novartis will grant Anadys a [...***...]
([...***...])[...***...] exclusive negotiation period during which
the Parties will negotiate in a good faith attempt to agree to the
sublicensing terms for the commercialization and/or distribution of
the Product [...***...].
2.3 DEVELOPMENT LICENSES. Each Party hereby grants to the other Party a
non-exclusive, non-sublicensable (except to Affiliates) license to
its Patent Rights and Know-How solely to the extent necessary to
permit such other Party to
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perform its responsibilities relating to the Anadys Compound or
Product under the Development Plan during the term of this
Agreement.
2.4 RETAINED RIGHTS. Subject to the licenses granted to each Party and
the other terms of the Agreement, Anadys will retain all other
rights under the Anadys Technology that are not expressly granted to
Novartis and Novartis will retain all rights to its Know-How and
Patent Rights.
2.5 DILIGENCE. Novartis shall use commercially reasonable efforts,
[...***...] the usual practice [...***...] in pursuing the
development, commercialization and marketing of [...***...] similar
pharmaceutical products with similar market potential and at a
similar stage in development, to develop, commercialize and market
at least one Product in the HCV Field
[...***...],[...***...],[...***...],[...***...],[...***...],
[...***...] and [...***...]. Subject to compliance with the
foregoing, the commercialization and marketing of Products shall be
[...***...]. For the avoidance of doubt, [...***...] has [...***...]
this [...***...] to [...***...], [...***...] or [...***...] of
Products [...***...] the [...***...],[...***...] to [...***...] the
[...***...].
3. OPTION RIGHTS
3.1 ID FIELD LICENSE OPTION. During the term of this Agreement, Novartis
will have the exclusive option ("ID FIELD LICENSE OPTION") to obtain
an exclusive (even as to Anadys), worldwide, royalty-bearing
license, with the right to sublicense, under the Anadys Technology,
to research, develop, make, have made, use, sell, have sold, offer
for sale and import one or more Anadys Compounds and Products in the
ID Field or, solely if Novartis selects a different Anadys Compound
than the Lead Compound, in the HBV Field. Novartis may exercise the
ID Field License Option with respect to one or more Anadys
Compounds, at any time and from time to time during the term of this
Agreement, by providing written notice of such exercise to Anadys.
Upon exercise of the ID Field License Option, the Parties will
negotiate in a good faith attempt to agree the terms and conditions
for the license to the applicable Anadys Compound and corresponding
Product. The Parties agree that the Co-Promotion Option shall not
apply to such a license.
3.2 DEFAULT FOR SUBSEQUENT INDICATIONS. If the proposed license under
Section 3.1 is for the Lead Compound in an indication outside of the
Primary Fields or for an Anadys Compound that has previously been
optioned under the ID Field License Option in a subsequent
indication and the Parties cannot agree on the terms and conditions
of the applicable license within [...***...]
([...***...])[...***...] of Novartis' exercise of the ID Field
License Option, Novartis will have the right to obtain (and Anadys
will grant) the license to the applicable Anadys Compound and
corresponding Product in the indication under the terms and
conditions of this Agreement as are applicable to the Lead Compound
and its corresponding Product; provided, however, that (a) Anadys
will not obtain a Co-Promotion Option for the Product, (b) Novartis
will conduct all development at its own expense, (c) Novartis will
pay a royalty [...***...], and (d) no [...***...] on the [...***...]
or [...***...] of the applicable Anadys Compound or Product. For the
avoidance of doubt, the foregoing default position will not apply to
an [...***...]
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(other than the [...***...]) for [...***...] or for [...***...]
being optioned for [...***...].
3.3 ANA380 OPTION RIGHT.
(a) [...***...], Anadys hereby grants to Novartis an exclusive option
("ANA380 OPTION") during the [...***...] ([...***...]) [...***...]
period following the Effective Date ("ANA380 OPTION PERIOD") to
[...***...] an [...***...] (or the [...***...] to [...***...] has
[...***...],[...***...] license to [...***...] and [...***...] based
on the [...***...] under the [...***...] and [...***...] of
[...***...] including the [...***...]. Novartis may exercise the
ANA380 Option [...***...].
(b) It is understood by Novartis that as of the Effective Date, Anadys
has the rights to the ANA380 Compound in all countries in the world,
except the following: South Korea, North Korea, China, Taiwan, Hong
Kong, Macao, Bangladesh, Bhutan, Nepal, India, Sri Lanka, Pakistan,
Thailand, Laos, Myanmar, the Philippines, Vietnam, Indonesia,
Singapore, Malaysia, Brunei and Cambodia. During the ANA380 Option
Period, Anadys will [...***...] (excluding [...***...] and
[...***...]) to the ANA380 Compound [...***...] in order to
[...***...] Novartis, upon agreement between Novartis and Anadys,
with [...***...]. In the event Anadys [...***...] (which [...***...]
(but excluding [...***...] and [...***...]) without [...***...] or
[...***...] with [...***...] and [...***...] that is acceptable to
Novartis) to the ANA380 Compound from [...***...] within [...***...]
of the Effective Date and Novartis decides to exercise its ANA380
Option, Novartis will [...***...] of [...***...] within [...***...]
([...***...]) [...***...] Anadys. In the event that Anadys
[...***...] to the ANA380 Compound [...***...] within the
[...***...] ([...***...])[...***...] period after the Effective Date
and Novartis [...***...] the ANA380 Option with respect to
[...***...], [...***...] to Novartis [...***...] of the [...***...]
of [...***...] within [...***...] ([...***...])[...***...] of such
[...***...], Novartis will have no [...***...] to [...***...] noted
above, and the [...***...] Option (unless exercised as noted above)
shall terminate as of such [...***...].
(c) Upon Novartis' exercise of the ANA380 Option, the Parties will
negotiate in a good faith attempt to agree commercially reasonable
terms and conditions for the license described in sub-Clause (a).
The Parties agree that [...***...] ($[...***...]) (or [...***...]
($[...***...]) where Novartis is exercising the ANA380 Option to
[...***...] has [...***...] as of the Effective Date) [...***...]
the [...***...] by Novartis for the ANA380 Option under this Clause
will be [...***...] any [...***...] to be agreed by the Parties
under the terms and conditions of such license (it being understood
that if the [...***...] to [...***...] for such license is less than
$[...***...], Anadys shall not be obligated to [...***...] of the
[...***...] Novartis). In the event the Parties cannot agree on the
terms and conditions within [...***...] of Novartis' exercise of the
option, Anadys will have the right to discuss with Third Parties the
licensing of the ANA380 Compound. However, for a period of
[...***...] ([...***...])[...***...] after the end of such
[...***...] period, Anadys shall not [...***...] with respect to the
ANA380 Compound that provides such [...***...], than those
[...***...]. If Anadys proposes [...***...] during such [...***...]
([...***...])[...***...]
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period, Anadys will [...***...] and [...***...] with [...***...]
([...***...])[...***...] to review and [...***...] for the ANA380
Compound. In connection therewith, Anadys shall [...***...] and
[...***...] to the [...***...] to the [...***...] (it being
understood that all of such [...***...] shall be [...***...] of
Anadys for purposes of this Agreement). In the event that
[...***...] to [...***...] to the ANA380 Compound [...***...],
Anadys [...***...] with [...***...] on [...***...].
3.4 OTHER FIELDS. In the event that Novartis wishes to develop and
commercialize a particular Anadys Compound or Product for one or
more disease indications outside of the Primary Fields and ID Field,
Novartis may provide Anadys with written notice thereof, and the
Parties will negotiate in good faith for up to [...***...]
([...***...]) [...***...]regarding the economic and other terms
under which Anadys would grant such a license; [...***...].
3.5 TLR7 OPTION.
(a) During the [...***...] in respect of [...***...] and during the
[...***...] (subject to sub-clause (f) after the [...***...]) in
respect of [...***...], either Party (the "NOMINATING PARTY") may at
any time propose an Anadys TLR7 Compound or Novartis TLR7 Compound,
as applicable, to the other Party as a candidate for development in
the Primary Fields under this Agreement (a "TLR7 DRUG CANDIDATE").
As promptly as practicable following such notice, the Nominating
Party shall provide to the other Party such available preclinical
data in such Party's possession regarding such TLR7 Drug Candidate
as is reasonably necessary to enable the other Party to evaluate
such TLR7 Drug Candidate. For the avoidance of doubt, neither Party
is obligated to nominate any TLR7 Compound for development under
this Agreement and, after the [...***...], Novartis may [...***...]
of any Novartis TLR7 Compound not included in this Agreement in the
Primary Fields by itself or with any Third Party(ies).
(b) In the event Novartis proposes a TLR7 Drug Candidate as the
Nominating Party during the TLR7 Option Period, Novartis may, at any
time upon written notice to Anadys, designate such TLR7 Drug
Candidate as a Collaboration TLR7 Compound.
(c) In the event Anadys proposes a TLR7 Drug Candidate as the Nominating
Party under Clause 3.5(a), Novartis shall have [...***...]
([...***...]) [...***...] after the date upon which Anadys provides
to Novartis the data relating to such TLR7 Drug Candidate under
Clause 3.5(a) to notify Anadys in writing whether it wishes to
designate such TLR7 Drug Candidate as a Collaboration TLR7 Compound
for purposes of this Agreement. If Novartis does not designate a
TLR7 Drug Candidate proposed by Anadys as the Nominating Party as a
Collaboration TLR7 Compound, then after the expiration of the TLR7
Option Period, the provisions of sub-clause (f) shall apply with
respect to such TLR7 Drug Candidate.
(d) Promptly following the designation of an Anadys TLR7 Compound as a
Collaboration TLR7 Compound, the Parties will negotiate in a good
faith attempt to agree the terms and conditions for the license to
such Collaboration TLR7 Compound and corresponding TLR7 Product
(which may include co-promotion
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rights for the US). If the Parties cannot agree on the terms and
conditions of the applicable license, Novartis will have the right
to obtain (and Anadys will grant) the license to such Collaboration
TLR7 Compound and corresponding TLR7 Product in the Primary Fields
on the same terms as this Agreement and the following economic
terms:
(i) [...***...];
(ii) Anadys will share the development and commercialization costs
for such TLR7 Product in accordance with the provisions of
this Agreement relevant to the Lead Compound and corresponding
Product;
(iii) Milestone Payment obligations as set forth in Clause 9.2,
subject to the provisions of Clauses 9 and 10; [...***...];
and
(iv) [...***...].
For purposes of this Clause 3.5(d), all defined terms and all
Clauses referenced above shall be construed as though references to
"Products" in the applicable definition (or in the definition of
defined terms used therein) or Clause were references to "TLR7
Products."
In the event the Parties cannot agree on the terms and conditions of
the applicable license and Novartis does not elect to obtain the
license on the foregoing terms, then after [...***...], the
provisions of sub-clause (f) shall apply with respect to such TLR7
Drug Candidate.
(e) Promptly following the designation of a Novartis TLR7 Compound as a
Collaboration TLR7 Compound, Novartis will have the right to develop
and commercialize such Collaboration TLR7 Compound and corresponding
TLR7 Product in the Primary Fields, and Anadys may select either of
the following options, in its discretion:
(i) Anadys will bear a share of Development Costs with respect to
such Collaboration TLR7 Compound in accordance with Clause
6.5, in which case Novartis shall pay royalties to Anadys on
Net Sales of the corresponding TLR7 Product in the Primary
Fields at the following rates:
(1) [...***...]% of aggregate annual Net Sales in the US;
and
(2) [...***...]% of aggregate annual Net Sales outside of
the US.
Any such royalty payable by Novartis to Anadys under this Clause
3.5(e)(i) will be subject to the provisions of Clauses 9 and 10,
except that it will continue in effect until the earlier of (x)
[...***...], and (y) the [...***...] pursuant to Clause [...***...]
or [...***...]; or
(ii) Anadys will [...***...] with respect to such Collaboration
TLR7 Compound, in which case Novartis shall pay royalties to
Anadys on Net
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Sales of the corresponding TLR7 Product in the Primary Fields
at the following rates:
(1) [...***...]% of aggregate annual Net Sales in the
US; and
(2) [...***...]% of aggregate annual Net Sales outside
of the US; and
Any such royalty payable by Novartis to Anadys under this Clause
3.5(e)(ii) will be subject to the provisions of Clauses 9 and 10,
except that it will continue in effect until the earlier of (x)
[...***...], and (y) the [...***...] by [...***...] pursuant to
[...***...] or [...***...]; provided, however, that [...***...] will
[...***...] this [...***...] there [...***...] been a [...***...] of
a [...***...] on an [...***...] this [...***...].
For the avoidance of doubt, no Milestone Payments shall be payable,
and there will be no co-promotion rights, with respect to TLR7
Products incorporating or comprising a Novartis TLR7 Compound. For
purposes of this Clause 3.5(e), all defined terms and all Clauses
referenced above shall be construed as though references to
"Products" in the applicable definition (or in the definition of
defined terms used therein) or Clause were references to "TLR7
Products."
(f) In the event that Anadys wishes to pursue development in the Primary
Field(s) of a TLR7 Drug Candidate that is not designated a
Collaboration TLR7 Compound under sub-clause (c) or a Collaboration
TLR7 Compound that the Parties do not jointly develop as described
in Clause (d), Anadys may pursue the development of such Anadys TLR7
Compound in the Primary Field(s) itself or in connection with Third
Parties [...***...] of the [...***...]. However, in the event that
Anadys decides to develop or enter into a license or other
arrangement in respect of development and/or commercialization of
such Anadys TLR7 Compound in the Primary Field(s) with a Third
Party, [...***...] will [...***...] and, upon [...***...] to
[...***...] delivered within [...***...] ([...***...])[...***...] of
such [...***...]by [...***...], the [...***...] will enter into
[...***...] in a good faith attempt to [...***...] and [...***...]
for a [...***...] to such [...***...] TLR7 Compound in the
[...***...] Fields (unless the [...***...] have already [...***...]
to [...***...] to the [...***...] and [...***...] in [...***...]
with [...***...] ([...***...])). In the [...***...] the [...***...]
on the terms and conditions [...***...] of [...***...] notice (or
where the [...***...] to [...***...] to the terms and conditions in
[...***...] with [...***...] ([...***...])),[...***...] will have
the [...***...] to [...***...] with [...***...] the [...***...]or
[...***...] of such [...***...] TLR7 Compound in the [...***...]
Fields. However, [...***...] the [...***...] of [...***...] into
[...***...] with [...***...] with [...***...] to [...***...] of
[...***...] in the [...***...] that [...***...] with [...***...] and
[...***...] as [...***...] than [...***...]. If [...***...] into
[...***...] on [...***...] will [...***...]such [...***...] and
[...***...] to [...***...] and [...***...] with [...***...]
([...***...])[...***...] and [...***...] and [...***...]for
[...***...]. In connection therewith, [...***...] shall [...***...]
with [...***...] and information relating to such [...***...] TLR7
Compound to the [...***...] to [...***...] (it being understood that
all of such data and information shall be deemed Confidential
Information of Anadys for purposes of
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this Agreement). In the event that [...***...] to [...***...] a
[...***...] to such TLR7 Compound [...***...] and [...***...],
Anadys [...***...] the [...***...] to [...***...] the [...***...]
with [...***...] on [...***...].
3.6 [...***...]. During the [...***...],[...***...] will [...***...] its
[...***...] for any TLR7 Compounds that it develops in the ID Field.
During the [...***...], Anadys will provide to Novartis a
description of each such TLR7 Compound that Anadys nominates for
pre-clinical development, along with available supporting
information in sufficient detail to allow Novartis to analyze the
compound and evaluate its potential (it being understood that all of
such information shall be deemed Confidential Information of Anadys
for purposes of this Agreement). Upon Novartis' written request made
within [...***...] ([...***...])[...***...] after receipt of such
description and supporting information, [...***...] will [...***...]
a [...***...] ([...***...]) [...***...] the [...***...] in
[...***...] to [...***...] to an [...***...] for [...***...].
4. GOVERNANCE
4.1 ALLIANCE MANAGERS. Within fifteen (15) days of the Effective Date,
each Party will appoint a senior representative having a general
understanding of pharmaceutical development and commercialization
issues to act as its alliance manager under this Agreement
("ALLIANCE MANAGER"). The Alliance Managers will be primarily
responsible for facilitating the flow of information and otherwise
promoting communication, coordination and collaboration within and
among the Joint Steering Committee and the sub-committees (JDC and
US JMC) and between the Parties; providing single point
communication for seeking consensus both internally within the
respective Party's organization and together regarding key global
strategy and planning issues, as appropriate, including facilitating
review of external corporate communications; and raising cross-Party
and/or cross-functional disputes to the JSC in a timely manner. Each
Party may replace its Alliance Manager on written notice to the
other Party.
4.2 JOINT STEERING COMMITTEE.
(a) The Parties will establish a Joint Steering Committee, composed of
two senior executives of Anadys and two senior executives of
Novartis (each of which senior executives shall have a general
understanding of pharmaceutical development and commercialization
issues) and each Party's Alliance Manager.
(b) Within [...***...] ([...***...]) days of the Effective Date, each
Party will designate its initial members to serve on the JSC and
notify the other Party of the dates of availability for the first
meeting of the JSC. Each Party may replace its representatives on
the JSC on written notice to the other Party.
(c) The JSC will: (i) oversee the collaborative activities of the
Parties under this Agreement; (ii) review the efforts of the Parties
in performing their respective development activities hereunder;
(iii) review and approve recommendations made by the JDC regarding
proposed amendments to the Development Plan, except as otherwise
provided in this Agreement; (iv) as necessary or appropriate,
establish additional joint subcommittees and delegate
responsibilities to such joint
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subcommittees; and (v) consider and act upon such other matters as
specified in this Agreement. Each Party may from time to time invite
a reasonable number of participants, in addition to its
representatives, to attend JSC meetings in a non-voting capacity.
Novartis shall appoint one of its representatives on the JSC to act
as chairperson of the JSC. The chairperson shall set agendas for JSC
meetings, provided that the agendas will include any matter
requested by either Party. The chairperson shall be responsible for
recording, preparing and, within a reasonable time, issuing draft
minutes of each JSC meeting, which draft minutes shall be subject to
review and approval by all JSC members.
(d) The JSC will also be responsible for resolving disputes that may
arise between the Parties or among the Parties' respective
representatives on the JDC. Decisions of the JSC shall be made by
unanimous vote, with each Party's representatives to the JSC
collectively having one vote. In the event of a disagreement among
the JSC, the matter shall be referred to the [...***...] (or a
designee with similar authority to resolve such dispute) and the
Chief Executive Officer of Anadys, who shall attempt in good faith
to resolve such disagreement. If they [...***...] such [...***...]
within [...***...] ([...***...]) [...***...] of the matter being
referred to them, then the [...***...] and/or [...***...] of
[...***...] shall be [...***...] in [...***...] will [...***...]
with [...***...] to [...***...] and [...***...] to [...***...] in
[...***...] its [...***...]. [...***...]in [...***...] in
[...***...] its [...***...] the [...***...]:
(i) to modify or amend the terms and conditions of this Agreement;
(ii) to modify or amend the Development Plan in any manner that
would [...***...] to [...***...] of [...***...] percent
([...***...]%)[...***...] in [...***...];
(iii) to delay materially (whether by material modification of the
Development Plan or otherwise) the conduct of the activities
to be conducted up to initiation of the Phase 2B HCV Clinical
Trial as set forth in the initial Development Plan as of the
Effective Date, unless the delay is as a result of [...***...]
the Lead Compound [...***...] a [...***...] with respect to
the Lead Compound that [...***...] and [...***...] under the
Development Plan or other [...***...] that [...***...] and
[...***...] under the Development Plan;
(iv) to [...***...] the standards set out in the [...***...]; or
(v) to determine any such issue in a manner that would conflict
with the express terms and conditions of this Agreement.
4.3 MEETINGS OF THE JOINT STEERING COMMITTEE. The JSC shall meet
quarterly and at such other times as the Parties may agree. The
first meeting of the JSC shall be held as soon as reasonably
practicable, but in no event later than [...***...] ([...***...])
days after the Effective Date. Meetings shall be held at such place
or places as are mutually agreed or by teleconference or
videoconference; provided, however, that there shall be at least one
face-to-face meeting per calendar year.
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4.4 JOINT DEVELOPMENT COMMITTEE. The Parties will establish a Joint
Development Committee, with equal representation from both Parties,
which shall oversee all development activities (including clinical
development) with respect to the Lead Compound and corresponding
Product in the Primary Fields during the term of this Agreement.
Decisions of the JDC shall be made by unanimous vote, with each
Party's representatives to the JDC collectively having one vote.
Details regarding the composition of the JDC, meeting logistics and
specific responsibilities of the JDC will be established by the JSC.
Disputes within or issues that cannot be resolve by the JDC will be
raised to the JSC for resolution. The JDC may appoint a joint
project team, having an equal number of representatives of each
Party, which will meet telephonically or in person at least once
each month to review and direct day-to-day activities under the
Development Plan. Notwithstanding the foregoing, each Party shall
have the right to have its own internal project team, which will not
include any representation by the other Party.
4.5 US JOINT MARKETING COMMITTEE. In the event that Anadys exercises the
Co-Promotion Option, the Parties will establish a Joint Marketing
Committee for the US ("US JMC") during the Co-Promotion Period. The
US JMC shall be the primary forum for Anadys to provide its input
regarding commercial strategy with respect to the Product in the US
for the Primary Fields; provided, however, that all marketing
activities for the Products on a worldwide basis (including the US
and including decisions by the US JMC) will be determined and
controlled by Novartis, including the establishment of the pricing
for the Product. Details regarding the composition of the US JMC and
meeting logistics of the US JMC will be established by the JSC
following successful exercise of the Co-Promotion Option.
4.6 COSTS OF COMMITTEE PARTICIPATION. The Parties agree that the costs
incurred by each Party in connection with its participation in JSC,
JDC and US JMC meetings shall be borne solely by such Party and
shall not be included in Development Costs, Commercialization Costs
or Product Profit.
5. DISCLOSURE OF ANADYS KNOW-HOW & TECHNOLOGY TRANSFER
5.1 DISCLOSURE OF ANADYS KNOW-HOW. Within [...***...]
([...***...])[...***...] after the Effective Date, Anadys will
disclose to Novartis or its designated Affiliate all Anadys Know-How
(and any other information and documents known to Anadys relating to
the Anadys Compounds or Products), which may be necessary or useful
to Novartis to develop, manufacture, register, use or market the
Anadys Compounds and Products and practice the licenses granted
hereunder efficiently. As part of such disclosure, as soon as
reasonably practicable, Anadys will disclose to Novartis all Anadys
Know-How pertaining to the manufacture and development of the Anadys
Compounds and Products, including manufacturing batch records,
development reports, analytical results, raw material and excipient
sourcing information, quality audit findings and any other relevant
technical information. Anadys shall also cooperate and assist
Novartis in [...***...] of the [...***...] agreements listed on
Exhibit D hereto which Novartis, [...***...], deems useful and
necessary to further its obligations under this Agreement. In the
event of any such assignment, Novartis shall assume all
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obligations and liabilities accruing under such assigned contract(s)
from and after such assignment.
5.2 TECHNOLOGY TRANSFER. During the Technology Transfer Period, Anadys
shall provide to Novartis quantities of Anadys Compounds and/or
Products that it has in its possession that the JDC determines to be
necessary for Novartis to further its obligations under this
Agreement, and the costs thereof shall be included in Development
Costs. In connection with the Development Plan and during the
Technology Transfer Period, Anadys will provide reasonable
assistance to Novartis in connection with understanding and using
the Anadys Know-How for purposes consistent with the Development
Plan and the license granted to Novartis hereunder, including by
[...***...] to [...***...] in [...***...] of the [...***...] the
[...***...] and [...***...]. The costs of Anadys personnel providing
such assistance shall be included as Development Costs, based on
[...***...].
6. DEVELOPMENT
6.1 DEVELOPMENT PLAN. Each Party will use commercially reasonable
efforts to perform its obligations under the Development Plan within
the timeframes included in the Development Plan and within the
Development Budget. The Development Plan (including the Development
Budget) will be subject to amendment from time to time during the
term of the Agreement as determined by the JDC and approved by the
JSC ([...***...] for [...***...] which [...***...] within the
[...***...] of [...***...]), subject to Section 4.2(d)(ii). The JDC
will review the Development Plan (including the Development Budget)
at least every Calendar Quarter. The JDC will also monitor the
Parties' actual Development Costs versus the Development Budget and
determine the necessary payments due to each Party to allocate
Development Costs properly in accordance with Clause 6.5.
6.2 PRE-PROOF OF CONCEPT. Prior to completion of the [...***...] of
[...***...] - [...***...] of a Product incorporating the [...***...]
Compound, Anadys and Novartis will be jointly responsible for
implementing clinical development of such Product in the HCV Field
in accordance with the Development Plan. During such period, Anadys
will be the sponsor of any clinical trials commenced prior to the
Effective Date and will retain liability for such trials and the
activities related thereto. Notwithstanding the provisions of Clause
7.3, [...***...] bear the [...***...] for [...***...] and
[...***...] or [...***...] prior to the [...***...] of the
[...***...] of [...***...] for [...***...] in [...***...] or
[...***...] for which [...***...] is listed as [...***...].
[...***...] at [...***...] for [...***...] ([...***...])[...***...]
to [...***...]. Anadys' obligations under this Clause shall not in
any way relieve it from its obligations under Clause 5.
6.3 POST-PROOF OF CONCEPT. After completion of the [...***...] of
[...***...] - [...***...] of a Product incorporating the [...***...]
Compound, Anadys and Novartis shall be jointly responsible for
implementing clinical development of Products in the Primary Fields.
Novartis will lead development, including clinical development, of
the Lead Compound (in consultation with Anadys) and each Party will
be responsible for the activities allocated to it under the
Development
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Plan. Novartis will be solely responsible for development activities
relating to the commercialization of the Product [...***...],
provided, however, that the costs associated with such development
will be included in the Development Costs, subject to Section 6.5.
6.4 REMAINING PRE-CLINICAL ACTIVITIES. Pre-clinical studies started
prior to the Effective Date will be continued until completion by
Anadys or the applicable Third Party, unless the JSC decides that
Novartis should assume the completion of such studies. In accordance
with the Development Plan, any pre-clinical studies managed by
Anadys (other than the studies identified in Section 2 of the
Development Plan) shall require the approval of the Novartis JDC
members on the protocol and vendor selection. Novartis will lead the
completion of any other pre-clinical activities remaining as of the
Effective Date, unless otherwise stipulated in the Development Plan.
6.5 DEVELOPMENT COSTS. The Development Costs for activities incurred
from the Execution Date until expiration or termination of this
Agreement pursuant to and in accordance with the Development Plan
will be shared on an eighty and a half percent (80.5%) to Novartis
and nineteen and a half percent (19.5%) to Anadys basis. During the
[...***...] ([...***...])[...***...] period following the Effective
Date, Anadys shall not be obligated to bear its portion of the
Development Costs in excess of [...***...]% of the Development
Budget Cap, unless the JDC determines in good faith that such
additional costs are required to obtain Regulatory Approval of the
Product in the US (including, without limitation, as a result of the
failure of one or more of the development activities provided for in
the Development Plan and the Development Budget Cap). Each Party
will keep accurate records of its Development Costs and provide a
report detailing its Development Costs to the other Party within
[...***...] ([...***...])[...***...] of the end of each Calendar
Quarter. Promptly following exchange of such reports, the JDC will
reconcile the reports and determine the amount, if any, due from one
Party to the other to result in the appropriate allocation of the
Development Costs. The Party that is owed money as necessary to
result in the sharing of the Development Costs as above will invoice
the other Party, and such other Party will pay the invoiced amount
within [...***...] ([...***...])[...***...] of its receipt of the
invoice.
6.6 LEAD COMPOUND REPLACEMENT.
(a) During the term of this Agreement, the JSC may, at any time and from
time to time, designate another Anadys Compound as the Lead Compound
for the Primary Fields. In such event, the JDC will revise the
Development Plan in good faith to include any required changes.
Other than changes to the Development Plan, the provisions of this
Agreement in respect of the Lead Compound shall continue to apply to
the Parties. For the avoidance of doubt, no additional Milestone
Payments shall be due for Milestones completed by previous Anadys
Compounds for the same Primary Field and for which Novartis has
previously paid the corresponding Milestone Payment.
(b) In the event the JSC determines that the Lead Compound will not meet
the Target Product Profile and does not designate a replacement as
above, at Novartis'
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request, the JDC will revise the Development Plan to provide for the
activities necessary to advance the development of the Anadys
Compound(s) that the JSC determines may meet the Target Product
Profile in the Primary Fields. After the completion of such
development activities, the JSC may select one of such Anadys
Compounds as the Lead Compound if it deems appropriate.
6.7 REGULATORY.
(a) The JSC will approve the regulatory plans and strategies and the
schedule for regulatory submissions set by the JDC. Anadys will
provide Novartis with copies of any correspondence and documentation
it has submitted to, or received from, any Regulatory Authority
relating to the Anadys Compounds.
(b) Promptly following the Execution Date, Anadys shall provide to
Novartis an initial draft of the first IND for submission to the FDA
for the Lead Compound ("FIRST IND"), and Novartis shall provide any
initial comments to Anadys as promptly as practicable. Anadys shall
provide its proposed final draft of the First IND for review and
final comment by Novartis for at least [...***...]
([...***...])[...***...]. Anadys will consider in good faith
Novartis' comments provided to Anadys pursuant to this Clause
6.7(b). Anadys will then file the First IND and provide a copy to
Novartis, provided that Anadys shall not make such filing in the
event that, prior to the date that is [...***...]
([...***...])[...***...]days after Anadys provides to Novartis its
proposed final draft of the First IND, the JSC (or, if the Effective
Date has not yet occurred, Novartis) determines in good faith that
there is a significant deficiency in the First IND that is likely to
have a material adverse effect on the timelines for first dosing in
humans under the IND. For purposes of clarification, Novartis' right
to review and comment on the First IND pursuant to this Clause
6.7(b) shall not be construed to grant to Novartis any right or
license to the Anadys Technology, the Anadys Compounds or the
Products, and any such right or license shall become effective only
upon the occurrence of the Effective Date (if any).
(c) Within [...***...] ([...***...])[...***...] after achievement of
[...***...], Anadys will transfer the First IND to Novartis or its
designated Affiliate. Other than the First IND, all regulatory
filings submitted in connection with obtaining Regulatory Approvals
to test or market an Anadys Compound or Product, including all IND,
MAA and NDA submissions and other regulatory filings relating to the
Anadys Compounds and Products, shall be owned by, and submitted by
and in the name of, Novartis, its Affiliates or its designees.
Novartis shall be solely responsible for obtaining the Regulatory
Approvals for Products throughout the world, the costs for which
will be considered Development Costs, subject to Clause 6.5.
Notwithstanding any other provision of this Agreement to the
contrary, in no event shall [...***...] any regulatory filing or
correspondence submitted (or proposed to be submitted) to, or
received from, any Regulatory Authority with respect to any Anadys
Compound or Product, nor shall Novartis permit any of its Affiliates
or sublicensees to do any of the foregoing, [...***...].
(d) At Anadys' request from time to time, Novartis will provide Anadys
personnel with access to all regulatory files relating to Products
and will provide Anadys with copies of INDs, NDAs and MAAs for
Products.
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(e) Anadys shall fully cooperate with and provide reasonable assistance
to Novartis in connection with filings to any Regulatory Authority
relating to the Anadys Compounds or Products, including by executing
any required documents, providing access to personnel and providing
Novartis with copies of all reasonably required documentation.
(f) To the extent required, Anadys shall grant or cause to be granted to
Novartis and its Affiliates or sublicensees cross-reference rights
to any relevant drug master files and other filings submitted by
Anadys or its Affiliates with any Regulatory Authority with respect
to any Anadys Compound or Product. Notwithstanding any other
provision of this Agreement to the contrary, in no event shall
[...***...] to be [...***...] to [...***...] any [...***...] to
[...***...] or [...***...] by Anadys, Novartis, or any Affiliate or
sublicensee of Novartis with respect to any Anadys Compound or
Product, nor shall Novartis permit any of its Affiliates or
sublicensees to do any of the foregoing, [...***...].
(g) Novartis shall have the right to disclose the existence of, and the
results from, any clinical trials conducted under this Agreement in
accordance with its standard policies. Anadys shall have the right
to disclose the existence of, and the results from, any clinical
trials conducted under this Agreement upon prior review and approval
by the JSC or as otherwise permitted by Clause 13.
6.8 COMPLIANCE. Each Party agrees that in performing its obligations
under the Development Plan (a) it shall comply with all applicable
current international regulatory standards, including cGMP, cGLP,
cGCP and other rules, regulations and requirements and (b) it will
not employ or use any person that has been debarred under Section
306(a) or 306(b) of the U.S. Federal Food, Drug and Cosmetic Act.
6.9 ASSISTANCE. Anadys shall disclose to Novartis such Anadys Know-How
as is developed, obtained or possessed by Anadys or its Affiliates
during the term of this Agreement and which may be necessary or
useful to Novartis to develop, manufacture, register, use or market
the Anadys Compounds and Products and practice the licenses granted
hereunder. Novartis, its Affiliates and sublicensees shall use the
Anadys Know-How disclosed by Anadys hereunder solely for the purpose
of developing, manufacturing and commercializing Anadys Compound or
Product in accordance with the terms of this Agreement, and Anadys
shall at all times retain the right to practice or license such
Anadys Know-How for any purpose other than as set forth in Clause
12.2 and subject to the licenses granted to Novartis hereunder and
the other terms and conditions of this Agreement.
6.10 SUBCONTRACTING. Novartis may subcontract the performance of
development activities with respect to the Product that are
allocated as its obligation under the Development Plan (or are
otherwise under Novartis' control) to Affiliates or Third Parties
([...***...]) at its discretion, upon the approval of the JDC.
Anadys may subcontract the performance of development activities
with respect to the Product that are allocated as its obligation
under the Development Plan (or are otherwise under Anadys' control)
to Affiliates or Third Parties only upon Novartis' prior written
consent; provided, however, that such consent shall be deemed to
have been granted with respect to subcontracting activities referred
to
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in Section 3 of the initial Development Plan; and provided, further,
that if Novartis notifies Anadys through the JDC that it [...***...]
the [...***...], Anadys may, in [...***...] as a [...***...] in
[...***...] to a [...***...] (reasonably acceptable to Novartis) the
[...***...] of the [...***...] in accordance with the specifications
established by the JDC ([...***...] that [...***...] by [...***...]
in [...***...] be [...***...] by [...***...] to [...***...] as
[...***...] of the [...***...]).
7. COMMERCIALIZATION
7.1 COMMERCIALIZATION. Except for the opportunity for Anadys to provide
input into the marketing activities during any Co-Promotion Period
through the US JMC, Novartis will be solely responsible for all
aspects of worldwide commercialization of the Products, including
planning and implementation. Novartis will undertake such activities
at its sole expense, except in the event Anadys co-promotes the
Product in the US pursuant to the Co-Promotion Option.
7.2 US JMC. During the Co-Promotion Option Period, Novartis shall
consult with Anadys through the JSC and/or JDC regarding Novartis'
commercialization planning and strategy in the US for the Product in
the Primary Fields. In the event that Anadys exercises the
Co-Promotion Option, during the Co-Promotion Period, Novartis will
consult with Anadys through the US JMC regarding the
commercialization planning and strategy in the US for the Product in
the Primary Fields. Novartis will provide Anadys with an opportunity
to comment on and discuss such matters and will give good faith
consideration to Anadys' position in making decisions regarding
commercialization planning and strategy; provided, however, that all
such decisions will be at the sole discretion of Novartis.
7.3 MANUFACTURING. Unless otherwise noted in this Agreement, Novartis
will have the exclusive right to, and have the responsibility to,
manufacture and supply (or to have manufactured and supplied) the
Anadys Compounds and Products being developed or commercialized
under this Agreement. Novartis may subcontract or sublicense the
manufacture or supply of the Anadys Compounds or Products to
Affiliates or Third Parties ([...***...]) at its discretion, without
the consent of Anadys.
7.4 MANUFACTURING ASSISTANCE. Anadys shall fully cooperate with and
provide assistance to Novartis or its designee, through
documentation, consultation, training and face-to-face meetings, to
enable Novartis or its designee to proceed with manufacturing of the
Anadys Compounds and the Products and to obtain all appropriate
Regulatory Approvals for manufacturing (including qualification by
the applicable Regulatory Authority of manufacturing sites).
Novartis, its Affiliates and sublicensees shall use manufacturing
technology and improvements disclosed by Anadys hereunder solely for
the purpose of manufacturing Anadys Compound and Product in
accordance with the terms of this Agreement, and Anadys shall at all
times retain the right to practice or license such manufacturing
technology or improvements for any purpose other than as set forth
in Clause 12.2 and subject to the licenses granted to Novartis
hereunder and the other terms and conditions of this Agreement. The
costs of Anadys personnel providing
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cooperation and assistance pursuant to this Clause 7.4 shall be
included as Development Costs, based on the FTE Rate.
7.5 PHARMACOVIGILANCE Prior to the First Commercial Sale of the Product
under this Agreement, the Parties shall agree and implement a
procedure for the mutual exchange of adverse event reports and
safety information associated with the Product. Details of the
operating procedure respecting such adverse event reports and safety
information exchange shall be the subject of a mutually-agreed
pharmacovigilance agreement between the Parties. Such
pharmacovigilance agreement shall be implemented at a time
sufficient to permit compliance with applicable Regulatory Authority
guidelines and regulations.
8. CO-PROMOTION OPTION
8.1 CO-PROMOTION OPTION. During the Co-Promotion Option Period, Anadys
will have the option ("CO-PROMOTION OPTION") to obtain the right to
co-promote the Product solely in the US in the Primary Fields in
accordance with this Clause and the terms and conditions of this
Agreement. Anadys may exercise the Co-Promotion Option during the
Co-Promotion Option Period by providing written notice of such
exercise to Novartis and paying to Novartis thirty-five percent
(35%) of any Commercialization Costs incurred by Novartis prior to
the date Anadys exercises the Co-Promotion Option, whether incurred
during, or prior to, the Initial Period (as defined below in Clause
8.4). Upon the request of Anadys during the Co-Promotion Option
Period, Novartis will inform Anadys of the total Commercialization
Costs incurred by Novartis up to such point in order to allow Anadys
to exercise the Co-Promotion Option, and Anadys shall have the right
to audit such Commercialization Costs in accordance with Clause 10.5
prior to the expiration of the Co-Promotion Option Period.
8.2 PRE-LAUNCH. Upon exercise of the Co-Promotion Option, Anadys will
establish, or will have established prior to such point, a
commercial organization of appropriate size [...***...] sufficient
to perform the required co-promotion activities, including, field
based sales representatives that have experience levels and
background equivalent to the Novartis sales organization and which
meet any other reasonable requirements established by Novartis in
consultation with the US JMC ("ANADYS SALES FORCE"), provided that
in no event shall Anadys be obligated to have an Anadys Sales Force
of more than [...***...] sales representatives at launch of the
Product or within the [...***...] following launch without Anadys'
prior written consent. Promptly following exercise of the
Co-Promotion Option, the US JMC shall establish commercially
reasonable parameters regarding the composition, qualifications and
training of the Anadys Sales Force, which shall be the same
standards required to be met by Novartis' sales force for the
Product. Novartis shall provide to the Anadys Sales Force, at the
facilities of Novartis or its designee, substantially the same
Product specific training as Novartis provides to its own US sales
force, subject to the last sentence of Clause 8.3. The Anadys Sales
Force will be hired, trained and in territory at least [...***...]
([...***...])[...***...] prior to the planned launch date of the
Product in the US. Anadys will have no right to sublicense the
co-promotion right nor to use any contract service organization to
conduct co-promotion activities, except that if Novartis or its
Affiliate uses any contract sales force in
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the US to promote the Product, then Anadys may negotiate and agree
to subcontract to the same contract sales force for purposes of its
Product promotion activities as well.
8.3 COMMERCIALIZATION COSTS. Subject to Clause 8.4, during the
Co-Promotion Period, the Parties will share the Commercialization
Costs for the Product in the US in the Primary Fields, with Anadys
funding thirty-five percent (35%) of the Commercialization Costs and
Novartis funding sixty-five percent (65%) of the Commercialization
Costs. Each Party will keep accurate records of its
Commercialization Costs and provide a report detailing its
Commercialization Costs to the other Party within [...***...]
([...***...])[...***...]of the end of each [...***...] during the
[...***...]. Promptly following exchange of such reports, the US JMC
will reconcile the reports and determine the amount, if any, due
from one Party to the other to result in the appropriate allocation
of the Commercialization Costs. The Party that is owed money as
necessary to result in the sharing of the Commercialization Costs as
above will invoice the other Party, and such other Party will pay
the invoiced amount within [...***...] ([...***...])[...***...] of
its receipt of the invoice. For the avoidance of doubt, with respect
to field sales force training, only Novartis' direct costs of
providing Product-specific training to each Party's field sales
force shall be included as Commercialization Costs.
8.4 ESTIMATED COMMERCIALIZATION COSTS. Prior to the [...***...]
preceding the planned launch of the Product [...***...], Novartis
will provide to Anadys a good faith estimate (the "INITIAL
FORECAST") of the planned Commercialization Costs for the period
beginning [...***...] prior to such planned Product launch in the US
and ending [...***...] after such planned launch (the "INITIAL
PERIOD"). Annually thereafter, Novartis will provide a rolling
[...***...] update (the "ROLLING FORECAST") of estimated
Commercialization Costs on a year-by-year basis. The estimated
Commercialization Costs for the Rolling Forecast will be set by
Novartis and except for the Initial Period will not subject to a
maximum cap amount; provided, however, that all estimates provided
under this Clause 8.4 shall be prepared in good faith and consistent
with Novartis' internal budget for such costs. In the event that
aggregate Commercialization Costs incurred prior to the end of the
Initial Period exceed [...***...] ($[...***...]), Anadys shall not
be obligated to bear its portion of the Commercialization Costs in
excess of [...***...] ($[...***...]). For each year of the
Co-Promotion Period after the Initial Period, Anadys shall not be
obligated to bear any portion of such Commercialization Costs in
excess of [...***...] percent ([...***...]%) of the
Commercialization Budget for such year as set forth in the most
recent Rolling Forecast provided under this Clause 8.4. The Parties
acknowledge and agree that, after delivery of the Initial Forecast,
the Parties may need to adjust the annual delivery date for Rolling
Forecasts hereunder in order to be consistent with Novartis'
internal fiscal planning processes and timelines. Accordingly, as
promptly as practicable following delivery of the Initial Forecast,
the Parties shall mutually agree in good faith on the annual due
date for Rolling Forecasts pursuant to this Clause 8.4.
8.5 DETAILS. During the Co-Promotion Period, Novartis will establish the
number of details to target Product prescribers to be performed by
each Party's field sales
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force in consultation with the US JMC. The costs associated with
such details will be included in the Party's Commercialization
Costs.
8.6 PROMOTIONAL ACTIVITIES. Novartis, in consultation with the US JMC,
shall establish the field force deployment, strategy, performance
standards and training procedure and a written plan for Product
commercialization activities in the US. Following establishment of
such written plan, the Parties shall use commercially reasonable
efforts to perform their respective activities in accordance with
such plan, and each Party's Commercialization Costs shall be
consistent with such plan. In addition, Novartis, in consultation
with the US JMC, shall establish commercially reasonable standards
required to be met by each Party's field sales force in connection
with the promotion and sale of the Product. During the Co-Promotion
Period, the Anadys Sales Force shall be required to meet the same
performance standards as the Novartis field sales force. Each Party
will cause its sales force and its other employees and agents to
comply with all applicable laws, regulations and industry guidelines
in connection with the promotion and sale of the Product. Neither
Party shall make any false or misleading representations to
customers or others regarding the other Party or its Affiliates or
the Product and will not make any representations, warranties or
guarantees with respect to the specifications, features or
capabilities of the Product that are not consistent with the
applicable current package insert or other documentation
accompanying or describing the Product, including the standard
limited warranty and disclaimers of Novartis or any of its
Affiliates, and that has been provided to Anadys. Neither Party
shall make any negative statements about any other products of the
other Party or any of its Affiliates in an effort to promote the
Product.
8.7 OUTSIDE CO-PROMOTION PERIOD. Outside of the Co-Promotion Period, (a)
Novartis will conduct the commercialization in the US in the Primary
Fields at its own expense; (b) Anadys will receive no Product
Profits; and (c) Anadys will receive the royalty set out in this
Agreement for sales of the Product [...***...].
8.8 [...***...]. In the event that (a) [...***...] fails to establish an
[...***...] that meets the parameters regarding its
[...***...],[...***...] and [...***...] established pursuant to
Clause [...***...], or (b) the [...***...] fails to meet the
performance standards established pursuant to Clause [...***...] for
[...***...] consecutive [...***...] (after receiving notice of its
failure to meet such standard for the first of such
[...***...]),[...***...] may [...***...] the [...***...] activities
of [...***...] and the [...***...] shall [...***...].
9. FINANCIAL PROVISIONS
9.1 UPFRONT PAYMENT. Novartis shall pay to Anadys a one-time,
non-refundable, non-creditable upfront payment of twenty million USD
(US$20,000,000) within thirty (30) days following receipt by
Novartis of an invoice in the form of Exhibit E from Anadys after
the Effective Date.
9.2 MILESTONE PAYMENTS. In consideration of the granting of the licenses
and rights to Novartis hereunder, after the achievement of each of
the following Milestones, Novartis shall make the corresponding
one-time, non-refundable, non-creditable Milestone Payment with
respect to the Lead Compound in the Primary Fields.
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28
(a) HCV Field Milestone Payments.
MILESTONE EVENT PAYMENT DUE (USD)
CLINICAL MILESTONES
[...***...] of the IND in the $10 MIllion
[...***...] that the [...***...]
[...***...] $[...***...]
[...***...] $[...***...]
[...***...] $[...***...]
[...***...] $[...***...]
FILING MILESTONES
[...***...] $[...***...]
REGULATORY APPROVAL MILESTONES
[...***...] $[...***...]
[...***...] $[...***...]
[...***...] $[...***...]
COMMERCIALIZATION MILESTONES
Upon the first occurrence of [...***...] $[...***...]
Upon the first occurrence of [...***...] $[...***...]
Upon the first occurrence of [...***...] $[...***...]
Upon the first occurrence of [...***...] $[...***...]
Upon the first occurrence of [...***...] $[...***...]
Upon the first occurrence of [...***...] $[...***...]
* Subject to the provisions of Clause 6.7(b), the Parties acknowledge and
agree that this Milestone may be triggered by an IND filing that occurs
prior to the Effective Date; provided, however, that, for the avoidance of
doubt, Novartis shall be under no obligation to pay any Milestone unless
and until this Agreement becomes effective.
(b) HBV Field Milestone Payments.
MILESTONE EVENT PAYMENT DUE (USD)
CLINICAL MILESTONE
[...***...] $[...***...]
REGULATORY APPROVAL MILESTONE
[...***...] $[...***...]
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29
(c) For the avoidance of doubt: (i) each Milestone Payment shall be
payable only on the first occurrence of the Milestone; (ii) none of
the Milestone Payments shall be payable more than once; (iii) should
the Lead Compound be replaced, no additional Milestone Payments
shall be due for Milestones completed by the previous Lead Compounds
for the same Primary Field; and (iv) if a Product achieves a
particular clinical, filing or regulatory approval Milestone in a
Primary Field but the Milestone Payment(s) for one or more preceding
Milestone(s) in the same Primary Field have not previously become
due or been paid, then upon achievement of such Milestone, the
previously-unpaid Milestone Payment(s) in such Primary Field shall
be due and payable concurrently with the Milestone Payment for the
achieved Milestone; provided, however, that in no event shall
achievement of [...***...] trigger a Milestone Payment obligation
for [...***...], but achievement of [...***...] shall trigger a
Milestone Payment obligation for [...***...] (to the extent not
previously triggered).
9.3 ROYALTY PAYMENTS. In consideration of the granting of the licenses
and rights to Novartis hereunder, Novartis will make royalty
payments to Anadys on Net Sales of Products (subject to Clause 3.1
for the ID Field) by Novartis, its Affiliates and their respective
sublicensees at the applicable rates set forth below. For the
avoidance of doubt, royalties shall be payable only once with
respect to the same unit of Product.
(a) In the US (provided that Novartis will have no obligation to pay
royalties on Net Sales of the Products in the Primary Fields in the
US during the Co-Promotion Period):
AGGREGATE ANNUAL NET SALES OF
PRODUCTS IN THE US ROYALTY RATE
Less than or equal to $[...***...] [...***...]%
Over $[...***...] [...***...]%
(b) Outside of the US:
AGGREGATE ANNUAL NET SALES
OF PRODUCTS OUTSIDE OF THE US ROYALTY RATE
Less than or equal to $[...***...] [...***...]%
Over $[...***...] [...***...]%
(c) For example, if Net Sales in a calendar year are $[...***...] in the
US and $[...***...] outside of the US, the royalty on such Net Sales
shall be equal to [...***...]% of $[...***...] and [...***...]% of
$[...***...] for [...***...] and [...***...]% of $[...***...] and
[...***...]% of $[...***...] for the sales outside of the US.
(d) In any country in which the sale of a Product will not infringe a
Valid Claim of the Anadys Patent Rights or the Joint Patent Rights,
Novartis shall pay a royalty
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30
in respect of Anadys Know-How equal to [...***...] percent
([...***...]%) of the royalties set forth above of the Net Sales of
such Product in such country for the Royalty Term as set out in
Clause 10.2.
9.4 THIRD PARTY OBLIGATIONS.
(a) In the event that Novartis is required to obtain a license from a
Third Party to Patent Rights that, in the absence of such license,
would be infringed by the manufacture, use, import or sale of the
Anadys Compound contained in a particular Product in a particular
country, Novartis may deduct [...***...] percent ([...***...]%) of
the royalties [...***...] actually [...***...] to such Third
Party(ies) for such [...***...] in such [...***...] against the
[...***...] due to [...***...] by [...***...] with respect to the
[...***...] of such [...***...] in such [...***...]; provided,
however, that in [...***...] shall the [...***...] due to
[...***...] from [...***...] with respect to [...***...] of such
[...***...] in such [...***...] be reduced by more than [...***...]
percent ([...***...]%) in any [...***...]. Any amount that
[...***...] is [...***...] to [...***...] that is reduced by the
[...***...] on the [...***...] shall be carried [...***...] and
[...***...] may deduct such [...***...] from [...***...] due to
[...***...] for [...***...] in such [...***...] until the full
amount that [...***...] was [...***...] to [...***...] is
[...***...] .
(b) Anadys shall remain responsible for the payment of royalty
obligations, if any, due to Third Parties under any Anadys
Technology which has been licensed to Anadys and is sublicensed to
Novartis hereunder. All such payments shall be made promptly by
Anadys. For the avoidance of doubt, any such payments made by Anadys
will not be considered Commercialization Costs under this Agreement.
(c) To the extent required under any license agreement pursuant to which
a Third Party licenses intellectual property to a Party in respect
of the Products, either Party may disclose to the Third Party
information regarding the development status and Net Sales of the
Products which are the subject of such license agreement; provided,
however, that such disclosure is limited to the amount required
under the license agreement and is subject to confidentiality
undertakings with respect to the information at least as restrictive
as the terms of this Agreement.
9.5 COMPETITIVE PRODUCTS. In the event that the Net Sales of the Product
in a country in any calendar year are reduced below a level of
[...***...] percent ([...***...]%) as compared with the Net Sales of
such Product in the preceding calendar year in such country and such
reduction is due to the marketing or sale of a Competitive Product
by a Third Party in such country, then the royalty rates applicable
to Net Sales of such Product in such country thereafter for the
remainder of the Royalty Term for such Product in such country shall
be reduced by [...***...] percent ([...***...]%); provided, however,
that if sales of such Competitive Product in such country
subsequently cease, then there shall be no reduction in royalties
for sales of such Product in such country occurring after cessation
of sale of such Competitive Product. However, in no event will the
royalties due to Anadys from Novartis with respect to the Net Sales
of such Product in such country be reduced by more than [...***...]
percent
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31
([...***...]%) by operation of the reductions to which Novartis is
entitled pursuant to this Clause and Clause 9.4 in the aggregate in
any Calendar Quarter. In addition, in no event shall Novartis be
entitled to any royalty reduction under this Clause 9.5 in any
country where Novartis has taken a royalty reduction pursuant to
Clause 9.3(d), and in no event shall Novartis be entitled to any
royalty reduction under Clause 9.3(d) in any country where Novartis
has taken a royalty reduction pursuant to this Clause 9.5. Any
amount that Novartis is entitled to deduct that is reduced by the
limitation on the deduction shall be carried forward and Novartis
may deduct such amount from subsequent royalties due to Anadys for
Net Sales in such country until the full amount that Novartis was
entitled to deduct is deducted.
9.6 CO-PROMOTION PRODUCT PROFITS. During the Co-Promotion Period, the
Parties will share the Product Profits in the US in the Primary
Fields, with Anadys receiving thirty-five percent (35%) of the
Product Profit and Novartis receiving sixty-five percent (65%) of
the Product Profit. Notwithstanding any co-promotion activities,
Novartis shall book all sales of the Products. For the avoidance of
doubt, during the Co-Promotion Period, Novartis will have no
obligation to pay royalties on Net Sales of the Products in the US
and the Commercialization Costs will be shared by the Parties as
described in Clause 8; provided, however, that any commercialization
and sales of the Product outside of the Primary Fields will be made
solely by Novartis; for which a royalty will be paid to Anadys as
determined pursuant to Clause 3.1 or 3.2.
10. REPORTS AND PAYMENT TERMS
10.1 PAYMENT TERMS.
(a) Novartis shall provide Anadys with written notice of the achievement
of each Milestone within [...***...] ([...***...])[...***...]after
such achievement, other than Milestones that are based on a written
determination by the JSC, which may be invoiced following such
written determination. After receipt of such notice (if applicable),
Anadys shall submit an invoice to Novartis substantially in the form
of Exhibit E with respect to the corresponding Milestone Payment,
provided that no such invoice shall be submitted prior to the
Effective Date and Novartis shall not be obligated to pay any
Milestone unless and until the Agreement becomes effective. Novartis
shall make the Milestone Payment within [...***...]
([...***...])[...***...] after receipt of the invoice.
(b) Within [...***...] ([...***...])[...***...] after each Calendar
Quarter during the term of this Agreement following the First
Commercial Sale of a Product, Novartis will provide to Anadys the
Sales Report. If Anadys has no comments on such report, Anadys shall
submit an invoice to Novartis substantially in the form of Exhibit E
with respect to such royalty amount. Novartis shall pay such royalty
amount within [...***...] ([...***...])[...***...] after receipt of
the invoice.
(c) During the Co-Promotion Period, within [...***...]
([...***...])[...***...] after each Calendar Quarter, Novartis will
provide to Anadys a written report showing the Product Profits for
the Calendar Quarter, including the Net Sales and Product Profits,
and the share of the Product Profits payable to Anadys. If Anadys
has no
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32
comments on such report, Anadys shall submit an invoice to Novartis
substantially in the form of Exhibit E with respect to the share of
the Product Profits payable to Anadys. Novartis will pay such the
amount of such share of the Product Profits within [...***...]
([...***...])[...***...] after receipt of the invoice.
10.2 ROYALTY TERM. Royalties will be payable on a Product-by-Product and
country-by-country basis until the later of (a) the expiration of
the last to expire Valid Claim of the Anadys Patent Rights claiming
the sale of such Product or the use for which the Product is being
sold in such country and (b) [...***...] ([...***...]) from the
First Commercial Sale of any such Product in such country ("ROYALTY
TERM"). Following the Royalty Term on a Product-by-Product and
country-by-country basis, Novartis' licenses with respect to such
Product shall continue in effect, but become fully paid-up,
royalty-free, non-exclusive, transferable, perpetual and
irrevocable.
10.3 CURRENCY. All payments under this Agreement shall be payable in US
dollars. When conversion of payments from any foreign currency is
required to be undertaken by Novartis, such conversion shall be made
using Novartis' then-current standard exchange rate methodology as
applied in its external reporting and consistent with Novartis'
Accounting Standards.
10.4 TAXES. Anadys will pay any and all taxes levied on account of any
payments made to it under this Agreement. If any taxes are required
to be withheld by Novartis, Novartis will (a) deduct such taxes from
the payment made to Anadys, (b) timely pay the taxes to the proper
taxing authority, and (c) send proof of payment to Anadys and
certify its receipt by the taxing authority promptly following such
payment.
10.5 RECORDS AND AUDIT RIGHTS.
(a) Each Party shall keep complete, true and accurate books and records
in accordance with its Accounting Standards in sufficient detail for
the other Party to determine the payments due and costs incurred
under this Agreement, including the royalties, Development Costs
and, during the Co-Promotion Period, Commercialization Costs. Each
Party will keep such books and records for at least [...***...]
([...***...])[...***...] following the end of the fiscal year to
which they pertain.
(b) During the term of this Agreement and for three years thereafter,
each Party ("AUDITING PARTY") shall have the right to appoint an
independent, internationally recognized accounting firm ("AUDITOR")
to audit the relevant records of the other Party and its Affiliates
(and, in the case of Novartis, its sublicensees) which are
authorized to sell Products or required to perform obligations of
the Party pursuant to this Agreement ("AUDITED PARTY") to confirm
Net Sales, royalties, Development Costs, Commercialization Costs,
Product Profits and other payments for a period covering not more
than the preceding three fiscal years; provided, however, that the
Auditor is reasonably acceptable to the Audited Party and before
beginning its audit, executes an undertaking reasonably acceptable
to the Audited Party by which the Auditor shall keep confidential
all information
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33
reviewed during such audit. The Auditor shall have the right to
disclose to the Auditing Party its conclusions regarding the audit,
which will remain Confidential Information of the Audited Party,
subject to Clause 13.
(c) The Audited Party shall make its records (and those of its
Affiliates and sublicensees, as applicable) available for inspection
by the Auditor during regular business hours at the facility(ies) of
the Audited Party where such records are customarily kept, upon
reasonable notice from the Auditing Party solely to verify the
accuracy of the reports given, payments due and costs shared under
this Agreement. Such audit right may only be exercised once per
calendar year by the Auditing Party and only once with respect to
records covering any specific fiscal year.
(d) The Auditing Party shall bear the full cost of such audit, unless it
discloses an underpayment of royalties or Product Profits or
overbooking of costs by the Audited Party of more than [...***...]
percent ([...***...]%) of the amount of royalties or costs due or
incurred over the audited period, in which case, the Audited Party
shall bear the full cost of such audit and shall promptly remit to
the Auditing Party the amount of any underpayment of royalties or
the amount due because of any overbooking of costs.
10.6 INVOICING AND PAYMENT.
(a) Each Party shall provide to the other Party an invoice for all
amounts due to it under this Agreement substantially in the form set
out in Exhibit E. Unless otherwise noted, payments on such invoices
shall be made within [...***...] ([...***...])[...***...] of the
Party's receipt of the applicable invoice.
(b) Payments to each Party shall be made by electronic wire transfer of
immediately available funds to the account of the Party, as
designated in writing to the other Party.
(c) For the avoidance of doubt, no payments shall become due and payable
and neither Party will be obligated to reimburse the other Party for
any costs incurred by the other Party under or in connection with
this Agreement unless and until this Agreement becomes effective in
accordance with Clause 19.16.
11. INTELLECTUAL PROPERTY RIGHTS
11.1 OWNERSHIP OF INVENTIONS.
(a) All inventions arising from the Parties' activities under this
Agreement, including patent applications and patents covering such
inventions (collectively, "INVENTIONS"), made solely by employees or
consultants of a Party shall be owned by such Party.
(b) All Inventions made jointly by employees or consultants of both
Parties shall be owned jointly by the Parties in equal shares.
(c) Determination of inventorship shall be made in accordance with US
patent laws.
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(d) Anadys' rights in any Inventions made under this Agreement and its
interest in any Inventions owned jointly by the Parties shall be
included in the Anadys Technology for purposes of this Agreement.
(e) In the event of any disagreement between the Parties regarding the
inventorship or ownership of any Invention, the parties shall refer
such dispute to a neutral Third Party patent attorney or other
appropriately qualified person who is neither a current or former
employee or director of, nor a current or former consultant or
outside counsel to, either Party and who is mutually agreed upon by
the Parties.
11.2 PATENT PROSECUTION.
(a) The Anadys Patent Rights in existence as of the Effective Date are
listed in Exhibits B-1 and B-2 hereto. The Parties shall update such
Exhibits as appropriate (and at least once per Calendar Quarter) to
add to Exhibit B-1 each Anadys Patent filed after the Effective Date
that claims only Anadys Compound(s) or Product(s) and/or methods of
manufacturing or using Anadys Compound(s) or Product(s) and to add
to Exhibit B-2 each Anadys Patent filed after the Effective Date
that, in addition to claiming Anadys Compound(s) or Product(s)
and/or methods of manufacturing or using Anadys Compound(s) or
Product(s), claims compound(s) or product(s) other than Anadys
Compound(s) and Product(s) and/or methods of manufacturing or using
such compound(s) or product(s). Upon either Party's request, the
Parties shall discuss and consider in good faith filing separate
Patent Rights for, on the one hand, claims that solely cover Anadys
Compound(s) or Product(s) and/or methods of manufacturing or using
Anadys Compound(s) or Product(s), and, on the other hand, claims
that cover compound(s) or product(s) other than Anadys Compound(s)
and Product(s) and/or methods of manufacturing or using such
compound(s) or product(s).
(b) For purposes of this Clause, "JOINT PRODUCT PATENTS" means the
Patent Rights owned jointly by Anadys and Novartis that claim any
Anadys Compound or Product or the manufacture or use of any Anadys
Compound or Product under development or commercialization under
this Agreement. "JOINT NON-PRODUCT PATENTS" means all Patent Rights
owned jointly by Anadys and Novartis that are not Joint Product
Patents.
(c) Anadys will be solely responsible for filing, prosecuting and
maintaining the Anadys Patent Rights listed in Exhibit B-2, with
Novartis having the right to review and comment on drafts of
substantive patent submissions with respect thereto. Anadys will
keep Novartis regularly and fully informed of the status of such
Anadys Patent Rights and provide copies of all substantive
documentation submitted to, or received from, the patent offices in
connection therewith.
(d) Novartis will be solely responsible for filing, prosecuting and
maintaining any Patent Rights owned solely by Novartis at its own
expense.
(e) Novartis will be responsible for filing, prosecuting and maintaining
the Anadys Patent Rights listed in Exhibit B-1 and the Joint Product
Patents, with Anadys having the right to review and comment on
drafts of substantive patent submissions with respect thereto.
Novartis will keep Anadys regularly and fully
35
informed of the status of such Anadys Patent Rights and Joint
Product Patents and provide copies of all substantive documentation
submitted to, or received from, the patent offices in connection
therewith. Anadys will assist Novartis in connection with the
prosecution and maintenance of such Anadys Patent Rights and Joint
Product Patents, including by providing access to relevant persons
and executing all required documentation. If a Patent Right that was
initially a Joint Non-Product Patent subsequently becomes a Joint
Product Patent, Novartis will take over responsibility for the
filing, prosecution and maintenance of such Patent Right.
(f) The JSC shall decide on a case-by-case basis which Party will be
primarily responsible (the "RESPONSIBLE PARTY") for filing,
prosecuting and maintaining Joint Non-Product Patents, and the other
Party shall have the right to review and comment on drafts of
substantive patent submissions with respect thereto. The Responsible
Party will keep the other Party regularly and fully informed of the
status of such Joint Non-Product Patents and provide copies of all
substantive documentation submitted to, or received from, the patent
offices in connection therewith. At the Responsible Party's
reasonable request, the other Party will assist the Responsible
Party in connection with the prosecution and maintenance of such
Joint Non-Product Patents, including by providing access to relevant
persons and executing all required documentation. The Parties will
share equally the costs of filing, prosecuting and maintaining the
Joint Non-Product Patents. If a Patent Right that was initially a
Joint Product Patent subsequently becomes a Joint Non-Product
Patent, the JSC shall decide which Party will be primarily
responsible for filing, prosecuting and maintaining such Patent
Right. In the event that the Responsible Party wishes to cease
prosecution and/or maintenance of any Joint Non-Product Patent, or
either Party does not wish to bear its share of costs with respect
to a Joint Non-Product Patent, such Party shall provide the other
Party with prompt written notice thereof, and the other Party shall
have the right, in its discretion, to assume responsibility for such
Joint Non-Product Patent (including the costs thereof), in which
event such Joint Non-Product Patent will be assigned solely to the
continuing Party, but the non-continuing Party and its Affiliates
shall have a non-exclusive license under such Joint Non-Product
Patent in perpetuity.
(g) Novartis shall give timely notice to Anadys of any decision not to
file applications for, or to cease prosecution and/or maintenance
of, or not to continue to pay the expenses of prosecution and/or
maintenance of, any Anadys Patent Right or Joint Product Patent on a
country-by-country basis and, in such case, shall permit Anadys, at
its sole discretion and expense, to file or to continue prosecution
or maintenance of such Anadys Patent Right or Joint Product Patent.
If Anadys assumes responsibility for any Anadys Patent Right
pursuant to this Clause, the license granted by Anadys to Novartis
with respect to such Anadys Patent Right shall become non-exclusive.
If Anadys assumes responsibility for any Joint Product Patent
pursuant to this Clause, the Patent Right shall be deemed a Joint
Non-Product Patent. Novartis will provide such notice at least
[...***...] ([...***...])[...***...] prior to any filing or payment
due date, or any other due date that requires action, in connection
with such Patent Right.
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(h) The Parties agree that Joint Product Patents shall be exclusively
licensed to Novartis in accordance with the terms of this Agreement
and neither Party will use, or license or assign to any Third Party,
any rights to the Joint Product Patents without the other Party's
prior written consent. The Parties agree that Joint Non-Product
Patents shall be exclusively licensed to Novartis solely for the
purpose of manufacturing, developing and commercializing Anadys
Compounds and Products in accordance with the terms of this
Agreement, but that each Party may use, or license to any Third
Party, any rights to the Joint Non-Product Patents for any other
purpose without the other Party's prior written consent, provided
that neither Party shall assign to any Third Party its interest in
any Joint Non-Product Patent without the other Party's prior written
consent (not to be unreasonably withheld).
(i) The Parties agree that the costs for filing, prosecuting and
maintaining the Anadys Patent Rights listed in Exhibit B-1 (as
amended from time to time) and the Joint Product Patents will be
included as Development Costs for the purposes of this Agreement.
(j) As requested by Anadys from time to time pursuant to Clause 11.2(e),
the Parties shall discuss and consider in good faith not including
claims regarding solely-owned Inventions of a Party with claims
regarding jointly-owned Inventions in the same Patent Right filing.
In addition, as requested by Anadys from time to time pursuant to
Clause 11.2(e), the Parties shall discuss and consider in good faith
filing and maintaining separate Patent Rights for, on the one hand,
jointly-owned Inventions directed to the composition of matter, or
the manufacture, use or sale, of any Anadys Compound or Product
(collectively, "PRODUCT INVENTIONS"), and, on the other hand,
jointly-owned Inventions that are not Product Inventions.
11.3 PATENT INFRINGEMENT.
(a) Each Party will promptly notify the other of any infringement by a
Third Party of any Anadys Patent Rights, Joint Product Patents or
Joint Non-Product Patents of which it becomes aware, including any
"patent certification" filed by a Third Party FDA application which
references the foregoing (collectively "THIRD PARTY INFRINGEMENT").
The Parties will consult with each other through the JSC to
determine the response to any Third Party Infringement.
(b) If the JSC fails to agree on a joint program of action, Novartis
will have the first right to take any action in connection with the
Third Party Infringement as it reasonably determines appropriate,
and Anadys shall have the right, at its own expense, to be
represented in any such action by counsel of its own choice.
(c) If Novartis fails to bring an action or proceeding with respect to,
or to terminate, infringement of any such Anadys Patent Right, Joint
Product Patent or Joint Non-Product Patent (i) within [...***...]
([...***...]) days following the notice of alleged infringement or
(ii) prior to [...***...] ([...***...]) days before the time limit,
if any, set forth in the appropriate laws and regulations for the
filing of such actions, whichever comes first, Anadys shall have the
right to bring and control any such action at its own expense and by
counsel of its own choice, and Novartis
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37
shall have the right, at its own expense, to be represented in any
such action by counsel of its own choice; provided, however, that if
Novartis notifies Anadys in writing prior to [...***...]
([...***...]) [...***...] before such time limit for the filing of
any such action that Novartis intends to file such action before the
time limit, then Novartis shall be obligated to file such action
before the time limit, and Anadys will not have the right to bring
and control such action.
(d) In no event shall either Party, through any court action or
proceeding, any settlement arrangement or any proceeding, filing or
communication with any patent office, admit the invalidity of, or
otherwise impair the other Party's rights in, any Patent Right owned
by or jointly with the other Party, without the other Party's prior
written consent.
(e) At the request and expense of the Party controlling a Third Party
Infringement action, the other Party shall provide reasonable
assistance in connection therewith, including by executing any
required documents and joining as a party to the action if required.
(f) Any recoveries resulting from an action relating to a claim of Third
Party Infringement (after payment of each Party's costs and
expenses) will be retained by the Party that brought and controlled
such action; provided, however, that any portion of such recovery
(after payment of each Party's costs and expenses) that is
attributable to lost profits with respect to Products shall be paid
to or retained by Novartis, subject to a royalty payment to Anadys
of [...***...]% of the amount that would be due if such amount were
Net Sales under this Agreement.
11.4 DEFENSE OF ACTIONS. In the event that a declaratory judgment or
similar action alleging the invalidity or non-infringement of any of
the Anadys Patent Rights, Joint Product Patents or Joint Non-Product
Patents is initiated by any Third Party, each Party will promptly
notify the other. The Parties will consult with each other through
the JSC to determine the response to such claim. If the JSC fails to
agree on a joint program of action, Novartis shall have the right to
defend and control such action and, at Novartis' request and
expense, Anadys shall provide reasonable assistance to Novartis in
connection therewith, including by executing any required documents
and joining as a party to the action if required. Novartis shall
give Anadys timely notice of any proposed settlement of any such
proceeding relating to an Anadys Patent Right, Joint Product Patent
or Joint Non-Product Patent and shall not enter into such settlement
admitting the invalidity of, or otherwise impairing Anadys' rights
in, the Patent Rights without the prior written consent of Anadys.
11.5 TRADEMARKS. Novartis shall have the right to brand the Products
using Novartis related trademarks and trade names and any other
trademarks and trade names it determines appropriate for the
Product, which may vary by country or within a country ("PRODUCT
MARKS"). Novartis shall own all rights in the Product Marks and
register and maintain the Product Marks in the countries and regions
it determines reasonably necessary. Notwithstanding the foregoing,
and during the Co-Promotion Period and solely in the US, Novartis
shall include on the Product packaging the Anadys name or logo
("ANADYS MARK") and a disclosure that the Product is licensed from
Anadys in the manner and form as determined by the
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JSC. In such event, Anadys will grant Novartis the non-exclusive,
royalty-free right to use the Anadys Mark in connection with the
foregoing. Anadys or an Affiliate of Anadys shall retain the
ownership of the entire right, title and interest in and to the
Anadys Mark, and all goodwill associated with or attached to the
Anadys Mark arising out of the use thereof by Novartis, its
Affiliates and sublicensees shall inure to the benefit of Anadys.
Novartis agrees that it will not contest, oppose or challenge
Anadys' ownership of the Anadys Mark. Novartis agrees that it will
not at any time do or suffer to be done any act or thing that will
in any way impair Anadys' ownership of or rights in and to the
Anadys Mark or any registration thereof or that may depreciate the
value of the Anadys Mark or the reputation of Anadys. Novartis
agrees that in using Anadys Mark upon any Product packaging,
labeling, advertising or promotional materials, it will not
represent in any way that it has any right or title to the ownership
of the Anadys Mark or the registration thereof. Novartis shall
obtain the prior written approval of Anadys (not to be unreasonably
withheld or delayed) of the form and manner in which the Anadys Mark
will be used upon, in connection with, or in relation to, the
Products, or any packaging, labels, containers, advertisements and
other materials related thereto.
11.6 DRUG PRICE COMPETITION AND PATENT TERM RESTORATION ACT.
(a) The Parties agree to cooperate in an effort to avoid loss of any
Patent Rights which may otherwise be available to the Parties hereto
under the provisions of the Drug Price Competition and Patent Term
Restoration Act of 1984 or comparable laws outside the US, including
by executing any documents as may be reasonably required. In
particular, the Parties shall cooperate with each other in obtaining
patent term restoration or supplemental protection certificates or
their equivalents in any country and region where applicable to the
Anadys Patent Rights or Joint Product Patents. Anadys shall provide
all reasonable assistance to Novartis, including permitting Novartis
to proceed with applications for such in the name of Anadys, if so
required.
(b) The Parties shall cooperate in determining, if applicable, which of
Anadys Patent Rights the Parties will attempt to extend, which
determination shall be made by the JSC, except that Anadys will have
sole discretion whether to permit the extension of any Anadys Patent
Right listed in Exhibit B-2 (as amended from time to time).
(c) Anadys shall provide reasonable assistance to Novartis, including by
executing any required documents and providing any relevant patent
information to Novartis, so that Novartis, as NDA or MAA applicant,
may inform the FDA or other Regulatory Authority.
12. EXCLUSIVITY
12.1 NOVARTIS EXCLUSIVITY. During the term of this Agreement, Novartis
shall not, directly or indirectly, engage in or have conducted on
its behalf or for its benefit, any [...***...] or [...***...]
activities with respect to: (a) for any therapeutic application, (i)
the Anadys Compounds or (ii) compounds that are [...***...], or (b)
in the Primary Fields, [...***...] of any Anadys Compound or
[...***...];
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39
except, in each case, for activities conducted pursuant to and in
accordance with this agreement. During [...***...] and, if this
Agreement is terminated by Novartis pursuant to Clause [...***...]
prior to expiration of the [...***...], until the [...***...]of the
expiration of the [...***...] and the [...***...] anniversary of the
date of such termination, Novartis shall not, directly or
indirectly, engage in or have conducted on its behalf or for its
benefit, any [...***...] or [...***...] activities with respect to
any [...***...] in the Primary Fields; except for activities
conducted pursuant to and in accordance with this Agreement.
12.2 ANADYS EXCLUSIVITY. During the term of this Agreement, Anadys shall
not, directly or indirectly, engage in or have conducted on its
behalf or for its benefit, any [...***...] or [...***...] activities
with respect to: (a) for any therapeutic application, (i) the Anadys
Compounds or (ii) compounds that are [...***...], or (b) in the
Primary Fields, (i) any TLR7 Compound or (ii) [...***...] of any
Anadys Compound or [...***...]; except, in each case, for activities
conducted pursuant to and in accordance with this Agreement and
subject to the terms of Clause 3.5(f) with respect to TLR7 Compounds
after [...***...] of the [...***...].
12.3 [...***...] For the purposes of this Clause 12, "[...***...]
activities" means [...***...] in respect of the applicable compound
and [...***...] activities with respect thereto. For the avoidance
of doubt, notwithstanding this Clause 12 or any other provision of
this Agreement, either Party [...***...] (a) [...***...] with
respect to [...***...] as it determines appropriate, and (b) any
[...***...] with respect to [...***...] (subject to Clause
[...***...] with respect to [...***...]) as it deems appropriate.
13. CONFIDENTIALITY
13.1 DUTY OF CONFIDENCE. All Confidential Information disclosed by a
Party or its Affiliates under this Agreement will be maintained in
confidence and otherwise safeguarded by the recipient Party. The
recipient Party may only use the Confidential Information for the
purposes of this Agreement and pursuant to the rights granted to the
recipient Party under this Agreement. Each Party shall hold as
confidential such Confidential Information of the other Party or its
Affiliates in the same manner and with the same protection as such
recipient Party maintains its own confidential information. A
recipient Party may only disclose Confidential Information of the
other Party to employees, agents, contractors, consultants and
advisers of the Party and its Affiliates and sublicensees and to
Third Parties to the extent reasonably necessary for the purposes
of, and for those matters undertaken pursuant to, this Agreement;
provided that such persons and entities are bound to maintain the
confidentiality of the Confidential Information in a manner
consistent with the confidentiality provisions of this Agreement.
13.2 EXCEPTIONS. The mutual obligations under this Clause shall not apply
to any information to the extent the recipient Party can demonstrate
by competent evidence that such information:
(a) is (at the time of disclosure) or becomes (after the time of
disclosure) known to the public or part of the public domain through
no breach of this Agreement by the recipient Party or its
Affiliates;
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40
(b) was known to, or was otherwise in the possession of, the recipient
Party or its Affiliates prior to the time of disclosure by the
disclosing Party;
(c) is disclosed to the recipient Party or an Affiliate on a
non-confidential basis by a Third Party who is entitled to disclose
it without breaching any confidentiality obligation to the
disclosing Party or any of its Affiliates; or
(d) is independently developed by or on behalf of the recipient Party or
its Affiliates, as evidenced by its written records, without
reference to the Confidential Information disclosed by the
disclosing Party or its Affiliates under this Agreement.
13.3 AUTHORIZED DISCLOSURES.
(a) In addition to disclosures allowed under Clause 13.1, each Party may
disclose Confidential Information belonging to the other Party to
the extent such disclosure is necessary in the following instances:
(i) filing or prosecuting Patent Rights as permitted by this
Agreement; (ii) regulatory filings for Products such Party has a
license or right to develop hereunder; (iii) prosecuting or
defending litigation as permitted by this Agreement; and (iv)
complying with applicable court orders or governmental regulations.
(b) In the event Novartis or any of its Affiliates discloses
Confidential Information to any Regulatory Authority to obtain
Regulatory Approval for any Product and/or Anadys Compound, or
discloses such information in connection with the filing of a patent
application or the prosecution and maintenance of any patent,
Novartis shall give written notice of such disclosure to Anadys,
and, if requested, a copy of such disclosure, and shall obtain
confidential treatment for such disclosure to the extent permitted
by law or regulation.
(c) In the event the recipient Party is required to disclose
Confidential Information of the disclosing Party by law or in
connection with bona fide legal process, such disclosure shall not
be a breach of this Agreement; provided that the recipient Party (i)
informs the disclosing Party as soon as reasonably practicable of
the required disclosure, (ii) limits the disclosure to the required
purpose, and (iii) at the disclosing Party's request and expense,
assists in an attempt to object to or limit the required disclosure.
(d) Notwithstanding any other provision of this Agreement to the
contrary, in no event shall Novartis disclose any Confidential
Information of Anadys to [...***...], nor shall Novartis permit any
of its Affiliates to do so [...***...] to [...***...] to it in
[...***...]. In addition, in no event shall Novartis or any of its
Affiliates be obligated to disclose [...***...] of [...***...] to
Anadys.
14. TERM AND TERMINATION
14.1 TERM. The term of this Agreement will commence upon the Effective
Date and continue until the later of (a) the expiration of the
last-to-expire Valid Claim of the Anadys Patent Rights and (b) the
expiration of the last-to-expire Royalty Term, unless earlier
terminated as permitted by the Agreement.
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41
14.2 TERMINATION BY EITHER PARTY.
(a) If either Novartis or Anadys are in material breach of any material
obligation hereunder, the non-breaching Party may give written
notice to the breaching Party specifying the claimed particulars of
such breach, and in the event such material breach is not cured
within [...***...] ([...***...]) [...***...] after such notice, the
non-breaching Party shall have the right thereafter to terminate
this Agreement immediately by giving written notice to the breaching
Party to such effect; provided, however, that if such breach is
capable of being cured, but cannot be cured within such [...***...]
([...***...])[...***...] period, and the breaching Party initiates
actions to cure such breach within such period and thereafter
diligently pursues such actions, the breaching Party shall have such
additional period as is reasonable in the circumstances to cure such
breach. Any termination by any Party under this Clause shall be
without prejudice to any damages or other legal or equitable
remedies to which it may be entitled from the other Party.
(b) Either Anadys or Novartis may terminate this Agreement without
notice if the other Party becomes insolvent, makes or has made an
assignment for the benefit of creditors, is the subject of
proceedings in voluntary or involuntary bankruptcy instituted on
behalf of or against such Party (except for involuntary bankruptcy
proceedings which are dismissed within [...***...] ([...***...])
[...***...]), or has a receiver or trustee appointed for
substantially all of its property.
14.3 TERMINATION BY NOVARTIS. Novartis may terminate this Agreement
without cause at any time after the Effective Date on [...***...]
([...***...])[...***...] written notice to Anadys in its entirety or
on a Product-by-Product or country-by-country basis; provided,
however, that if Novartis terminates this Agreement without cause
prior to the [...***...] of the Effective Date, Novartis will
[...***...] the [...***...] the [...***...] the [...***...]. The
Parties agree that [...***...] will [...***...], that the
[...***...] the [...***...] will [...***...] the [...***...] the
[...***...] for such [...***...] that the Parties shall [...***...]
to [...***...] the [...***...]. Novartis will be under no obligation
to [...***...] to the [...***...] are [...***...]. without limiting
the generality of the foregoing, a [...***...] the [...***...] will
[...***...]) of [...***...] prior to the date [...***...] of
termination is provided and [...***...] be [...***...],[...***...]
the [...***...].
14.4 TERMINATION FOR FAILURE OF COMPOUND. Novartis may terminate this
Agreement entirely, or on a compound-by-compound basis, at any time
in the event that the [...***...] the [...***...] the [...***...] as
[...***...].
14.5 CHANGE OF CONTROL. In the event of a Change of Control of Anadys,
Novartis may, by written notice to Anadys (or the successor entity)
within [...***...] ([...***...])[...***...] after the Change of
Control is effective, terminate Anadys' (or the successor entity's)
interest and rights in the Development Plan, joint committees and/or
Co-Promotion Option (or co-promotion activities) in the US, and
otherwise maintain the Agreement in effect; provided, however, that
Anadys (or the successor entity) will continue to fund its share of
the Development Costs to the extent incurred in accordance with the
Development Plan in effect as of the effective date of termination
in accordance with the provisions of this Agreement, and Novartis
shall not be obligated to disclose any Confidential Information
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42
(other than such information as Novartis is obligated to disclose or
make available pursuant to Clauses 9 and 10).
15. EFFECT OF TERMINATION
15.1 TERMINATION BY NOVARTIS FOR CAUSE. Upon termination of this
Agreement by Novartis pursuant to Clause 14.2:
(a) any licenses granted by Novartis to Anadys will terminate and revert
to Novartis;
(b) any licenses granted by Anadys to Novartis will remain in effect in
accordance with their respective terms (including, without
limitation, Clauses 9 and 10), provided, however, that [...***...];
(c) Novartis will be entitled to seek any other available legal and/or
equitable remedies against Anadys for harm suffered by Novartis as a
result of the breach;
(d) the Co-Promotion Option or any existing co-promotion rights of
Anadys shall terminate, including any right to receive any portion
of the Product Profits after such termination; and
(e) the provisions of Clause 2.5 shall survive such termination.
15.2 TERMINATION BY ANADYS FOR BREACH OR BY NOVARTIS WITHOUT CAUSE OR FOR
FAILURE OF COMPOUND. Upon termination of this Agreement by Anadys
pursuant to Clause 14.2, or by Novartis pursuant to Clause 14.3 or
Clause 14.4:
(a) any licenses granted by either Party to the other will terminate and
revert to the granting Party;
(b) Novartis shall, and it hereby does, grant to Anadys a non-exclusive,
worldwide, fully-paid, irrevocable and perpetual license, including
the right to sublicense, under Novartis' interest in the Joint
Product Patents, to develop, make, have made, use, sell, have sold,
offer for sale and import Products;
(c) Anadys will have a right of first negotiation, exercisable by
written notice to Novartis at any time within [...***...]
([...***...]) [...***...]of such termination, to obtain a worldwide,
exclusive, royalty-bearing license, with the right to sublicense,
Under the Novartis Patent Rights and Joint Product Patents, to
develop, make, have made, use, sell, have sold, offer for sale and
import Products on commercially reasonable terms to be negotiated in
good faith by the Parties for up to an additional [...***...]
([...***...]) [...***...] following exercise of such right of first
negotiation;
(d) any exclusive license granted to Anadys as described in the
preceding sub-clause (c) will include the right to use clinical and
regulatory data and information generated by Novartis for regulatory
purposes relating to the Products;
(e) any exclusive license agreement entered into as described in
sub-clause (c) will provide for Novartis to transfer and assign to
Anadys all of its right, title and interest in and to all US and
foreign regulatory submissions and Regulatory
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43
Approvals with respect to the Products and all drug master files and
drug dossiers with respect to the Products (other than those related
to manufacturing facilities); and
(f) the provisions of Clauses 3.5(e) and 12.1 shall survive such
termination in accordance with their respective terms.
15.3 SURVIVAL. Expiration or termination of this Agreement shall not
relieve the Parties of any obligation accruing prior to such
expiration or termination. Without limiting the foregoing, the
obligations pursuant to Clauses 10, 11.1, 11.2(f), 15 (including the
additional Clauses that survive in accordance with the express terms
of Clause 15), 17, 18.2 and 19 shall survive expiration or
termination of this Agreement. The provisions of Clause 13
(Confidentiality) shall survive the termination or expiration of
this Agreement for a period of ten (10) years.
16. REPRESENTATIONS AND WARRANTIES
16.1 REPRESENTATIONS AND WARRANTIES BY EACH PARTY. Each Party represents
and warrants to the other that:
(a) it is a corporation duly organized, validly existing, and in good
standing under the laws of its jurisdiction of formation;
(b) it has full corporate power and authority to execute, deliver, and
perform this Agreement, and has taken all corporate action required
by law and its organizational documents to authorize the execution
and delivery of this Agreement and the consummation of the
transactions contemplated by this Agreement;
(c) this Agreement constitutes a valid and binding agreement enforceable
against it in accordance with its terms (except as the
enforceability thereof may be limited by bankruptcy, bank moratorium
or similar laws affecting creditors' rights generally and laws
restricting the availability of equitable remedies and may be
subject to general principles of equity whether or not such
enforceability is considered in a proceeding at law or in equity);
and
(d) the execution and delivery of this Agreement and all other
instruments and documents required to be executed pursuant to this
Agreement, and the consummation of the transactions contemplated
hereby do not and shall not (i) conflict with or result in a breach
of any provision of its organizational documents, (ii) result in a
breach of any agreement to which it is a party; or (iii) violate any
law.
16.2 REPRESENTATIONS AND WARRANTIES BY ANADYS. Anadys represents and
warrants to Novartis as of the Execution Date that:
(a) Exhibits B-1 and B-2 collectively set forth a complete and accurate
list of all Anadys Patent Rights in existence as of the Effective
Date;
44
(b) Anadys is the sole and exclusive owner or exclusive licensee of all
of the Anadys Patent Rights free from Encumbrances and is listed (or
is in the process of becoming listed) in the records of the
appropriate United States and/or foreign governmental agencies as
the sole and exclusive owner of record or exclusive licensee for
each registration, grant and application included in the Anadys
Patent Rights;
(c) Anadys has the right to grant to Novartis the licenses under the
Anadys Technology that it purports to grant hereunder;
(d) Anadys has the right to use and disclose and to enable Novartis to
use and disclose (in each case under appropriate conditions of
confidentiality) the Anadys Know-How free from Encumbrances (other
than Encumbrances imposed by this Agreement);
(e) to the knowledge of Anadys, the issued patents in the Anadys Patent
Rights are valid and enforceable without any claims, challenges,
oppositions, interference or other proceedings pending or threatened
and Anadys has filed and prosecuted patent applications within the
Anadys Patent Rights in good faith and complied with all duties of
disclosure with respect thereto. In addition, to Anadys' knowledge,
Anadys has not committed any act, or omitted to commit any act, that
may cause the Anadys Patent Rights to expire prematurely or be
declared invalid or unenforceable;
(f) except to the extent not yet due, all necessary and material
application, registration, maintenance and renewal fees in respect
of the Anadys Patent Rights in existence as of the Effective Date
have been paid and, except to the extent not yet due, all necessary
documents and certificates have been filed with the relevant
agencies for the purpose of maintaining such Anadys Patent Rights;
(g) Anadys has not granted, and will not grant during the term of this
Agreement, any Third Party, including any academic organization or
agency, any rights to the Anadys Compounds or Products;
(h) to the best of Anadys' knowledge, the development, manufacture, use
and sale of the Anadys Compounds do not infringe the patent rights
or misappropriate the know-how of any Third Party, nor has Anadys
received any written notice alleging such infringement;
(i) Anadys has not initiated or been a party to any proceedings or
claims in which it alleges that any Third Party is or was infringing
or misappropriating any Anadys Technology, nor have any such
proceedings been threatened by Anadys in writing, nor does Anadys
know of any valid basis for any such proceedings;
(j) Anadys has obtained from all individuals who participated in any
respect in the invention or authorship of any Anadys Technology
effective assignments of all ownership rights of such individuals in
such Anadys Technology, either pursuant to written agreement or by
operation of law;
45
(k) No officer or employee of Anadys is subject to any agreement with
any other Third Party which requires such officer or employee to
assign any interest in any Anadys Technology relating to the Anadys
Compounds to any Third Party;
(l) Anadys has taken all reasonable precautions to preserve the
confidentiality of the Anadys Know-How; and
(m) as of the Execution Date, [...***...] the [...***...].
16.3 COVENANTS OF ANADYS. Anadys covenants and agrees that it will not
grant any interest in the Anadys Patent Rights or Anadys Know-How
which is inconsistent with the terms and conditions of this
Agreement, nor shall Anadys assign its right, title or interest in
or to the Anadys Patent Rights to any Third Party.
16.4 NO OTHER WARRANTIES. Except as otherwise expressly set forth in this
agreement, each Party expressly disclaims any and all
representations or warranties of any kind, either express or
implied, including any warranties of merchantability or fitness for
a particular purpose.
17. INDEMNIFICATION AND LIABILITY
17.1 INDEMNIFICATION BY ANADYS. Anadys shall indemnify and hold Novartis
and its Affiliates, and their respective officers, directors,
employees, contractors, agents and assigns, harmless from and
against any Claims against Novartis or any of the foregoing persons
arising or resulting from:
(a) Anadys' actions in connection with the development or
commercialization of the Anadys Compounds and/or Products under this
Agreement;
(b) the negligence or willful misconduct of Anadys; or
(c) the breach of any of the covenants, warranties and representations
made by Anadys to Novartis under this Agreement.
Anadys shall only be obliged to so indemnify and hold Novartis
harmless to the extent that such Claims do not arise from the
breach, negligence or willful misconduct of Novartis.
17.2 INDEMNIFICATION BY NOVARTIS. Novartis shall indemnify and hold
Anadys and its Affiliates, and their respective officers, directors,
employees, contractors, agents and assigns, harmless from and
against any Claims against Anadys or any of the foregoing persons
arising or resulting from:
(a) Novartis', its Affiliates' and its sublicensees' actions in
connection with the development or commercialization of the Anadys
Compounds and/or Products under this Agreement;
(b) the negligence or willful misconduct of Novartis; or
(c) the breach of any of the covenants, warranties and representations
made by Novartis to Anadys under this Agreement.
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Novartis shall only be obliged to so indemnify and hold Anadys
harmless to the extent that such Claims do not arise from the
breach, negligence or willful misconduct of Anadys.
17.3 INDEMNIFICATION PROCEDURE.
(a) A Party hereto or any of its Affiliates seeking indemnification
hereunder ("INDEMNIFIED PARTY") shall notify the other Party
("INDEMNIFYING PARTY") in writing reasonably promptly after the
assertion against the Indemnified Party of any claim or allegation
by a Third Party ("THIRD PARTY CLAIM") in respect of which the
Indemnified Party intends to base a claim for indemnification
hereunder, but the failure or delay so to notify the Indemnifying
Party shall not relieve the Indemnifying Party of any obligation or
liability that it may have to the Indemnified Party except to the
extent that the Indemnifying Party demonstrates that its ability to
defend or resolve such Third Party Claim is adversely affected
thereby.
(b) Subject to the provisions of sub-Clauses (d) and (e) below, the
Indemnifying Party shall have the right, upon written notice given
to the Indemnified Party within thirty (30) days after receipt of
the notice from the Indemnified Party of any Third Party Claim to
assume the defense and handling of such Third Party Claim, at the
Indemnifying Party's sole expense, in which case the provisions of
sub-Clause (c) below shall govern.
(c) The Indemnifying Party shall select counsel reasonably acceptable to
the Indemnified Party in connection with conducting the defense and
handling of such Third Party Claim, and the Indemnifying Party shall
defend or handle the same in consultation with the Indemnified
Party, and shall keep the Indemnified Party timely apprised of the
status of such Third Party Claim. The Indemnifying Party shall not,
without the prior written consent of the Indemnified Party, agree to
a settlement of any Third Party Claim which could lead to liability
or create any financial or other obligation on the part of the
Indemnified Party for which the Indemnified Party is not entitled to
indemnification hereunder, or would involve any admission of
wrongdoing on the part of the Indemnified Party. The Indemnified
Party shall cooperate with the Indemnifying Party, at the request
and expense of the Indemnifying Party, and shall be entitled to
participate in the defense and handling of such Third Party Claim
with its own counsel and at its own expense. Notwithstanding the
foregoing, in the event the Indemnifying Party fails to conduct the
defense and handling of any Third Party Claim in good faith after
having assumed such, then the provisions of sub-Clause (e) below
shall govern.
(d) If the Indemnifying Party does not give written notice to the
Indemnified Party, within thirty (30) days after receipt of the
notice from the Indemnified Party of any Third Party Claim, of the
Indemnifying Party's election to assume the defense and handling of
such Third Party Claim, the provisions of sub-Clause (e) below shall
govern.
(e) The Indemnified Party may, at the Indemnifying Party's expense,
select counsel reasonably acceptable to the Indemnifying Party in
connection with conducting
47
the defense and handling of such Third Party Claim and defend or
handle such Third Party Claim in such manner as it may deem
appropriate, provided, however, that the Indemnified Party shall
keep the Indemnifying Party timely apprised of the status of such
Third Party Claim and shall not settle such Third Party Claim
without the prior written consent of the Indemnifying Party, which
consent shall not be unreasonably withheld. If the Indemnified Party
defends or handles such Third Party Claim, the Indemnifying Party
shall cooperate with the Indemnified Party, at the Indemnified
Party's request but at no expense to the Indemnified Party, and
shall be entitled to participate in the defense and handling of such
Third Party Claim with its own counsel and at its own expense.
17.4 MITIGATION OF LOSS. Each Indemnified Party will take, and will
procure that its Affiliates take, all such reasonable steps and
action as are necessary or as the Indemnifying Party may reasonably
require in order to mitigate any Claims under this Clause. Nothing
in this Agreement shall or shall be deemed to relieve any Party of
any common law or other duty to mitigate any losses incurred by it.
17.5 SPECIAL, INDIRECT AND OTHER LOSSES. IN NO EVENT SHALL EITHER PARTY
OR ANY OF ITS AFFILIATES BE LIABLE FOR SPECIAL, INDIRECT,
INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES OR FOR ANY ECONOMIC
LOSS OR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY, EXCEPT TO THE
EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS
PART OF A THIRD PARTY CLAIM.
17.6 NO EXCLUSION. Neither Party excludes any liability for death or
personal injury caused by its negligence or that of its employees,
agents or sub-contractors.
18. PUBLICATIONS AND PUBLICITY
18.1 PUBLICATIONS. Any proposed oral public disclosures or written
publications of Anadys relating to a Product and/or Anadys Compound
shall require the written consent of Novartis prior to their
release; provided, that the foregoing shall not apply to information
which is not of a scientific or technical nature and which is in the
public domain or any public disclosures required by law or
governmental regulation or by the rules of any recognized stock
exchange or quotation system.
18.2 PUBLICITY. Each Party agrees not to issue any press release or other
public statement, whether oral or written, disclosing the existence
of this Agreement, the terms hereof or any information relating to
this Agreement without the prior written consent of the other Party,
provided however, that neither Party will be prevented from
complying with any duty of disclosure it may have pursuant to law or
governmental regulation or pursuant to the rules of any recognized
stock exchange or quotation system and Novartis may issue press
releases and other public statements as it deems appropriate in
connection with the development and commercialization of Products
under this Agreement. In the event of a disclosure required by law,
governmental regulation or the rules of any recognized stock
exchange or quotation system, the Parties shall coordinate with each
other with respect to the timing, form and content of such required
disclosure to the extent practicable under the circumstances, and,
if so requested by the other Party, the
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Party subject to such obligation shall use commercially reasonable
efforts to obtain an order protecting to the maximum extent possible
the confidentiality of such provisions of this Agreement as
reasonably requested by the other Party. If the Parties are unable
to agree on the form or content of any required disclosure, such
disclosure shall be limited to the minimum required, as determined
by the disclosing Party in consultation with its legal counsel.
19. GENERAL PROVISIONS
19.1 ASSIGNMENT. Neither Party may assign its rights and obligations
under this Agreement without the other Party's prior written
consent, except that (a) either Party may assign its rights and
obligations under this Agreement or any part hereof to one or more
of its Affiliates without the consent of any other Party; and (b)
either Party may assign this Agreement in its entirety to a
successor to all or substantially all of its business (in the case
of Anadys, subject to Novartis' rights under Clause 14.5). The
assigning Party shall provide the other Party with prompt written
notice of any such assignment. Any permitted assignee shall assume
all obligations of its assignor under this Agreement, and no
permitted assignment shall relieve the assignor of liability
hereunder. Any attempted assignment in contravention of the
foregoing shall be void.
19.2 EXTENSION TO AFFILIATES. Each Party shall have the right to extend
the rights and immunities granted in this Agreement to one or more
of its Affiliates. All applicable terms and provisions of this
Agreement, except this right to extend, shall apply to any such
Affiliate to which this Agreement has been extended to the same
extent as such terms and provisions apply to the Party extending
such rights and immunities. The Party extending the rights and
immunities granted hereunder shall remain primarily liable for any
acts or omissions of its Affiliates.
19.3 SEVERABILITY. Should one or more of the provisions of this Agreement
become void or unenforceable as a matter of law, then this Agreement
shall be construed as if such provision were not contained herein
and the remainder of this Agreement shall be in full force and
effect, and the Parties will use their best efforts to substitute
for the invalid or unenforceable provision a valid and enforceable
provision which conforms as nearly as possible with the original
intent of the Parties.
19.4 GOVERNING LAW. This Agreement shall be governed by and construed
under the laws of the State of New York, USA, without giving effect
to the conflicts of laws provision thereof.
19.5 DISPUTE RESOLUTION. Any disputes between the Parties relating to
this Agreement shall be subject to [...***...] and the Parties
hereby waive any objection which they may have now or hereafter to
the laying of venue of any proceedings in [...***...] and to any
claim that such proceedings have been brought [...***...] and
further agree that [...***...].
19.6 FORCE MAJEURE. Neither Party shall be responsible to the other for
any failure or delay in performing any of its obligations under this
Agreement or for other nonperformance hereunder if such delay or
nonperformance is caused by strike,
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stoppage of labor, lockout or other labor trouble, fire, flood,
accident, war, act of terrorism, act of God or of the government of
any country or of any local government, or by cause unavoidable or
beyond the control of any Party hereto. In such event, the Party
affected will use commercially reasonable efforts to resume
performance of its obligations.
19.7 WAIVERS AND AMENDMENTS. The failure of any Party to assert a right
hereunder or to insist upon compliance with any term or condition of
this Agreement shall not constitute a waiver of that right or excuse
a similar subsequent failure to perform any such term or condition
by the other Party. No waiver shall be effective unless it has been
given in writing and signed by the Party giving such waiver. No
provision of this Agreement may be amended or modified other than by
a written document signed by authorized representatives of each
Party.
19.8 RELATIONSHIP OF THE PARTIES. Nothing contained in this Agreement
shall be deemed to constitute a partnership, joint venture, or legal
entity of any type between Anadys and Novartis, or to constitute one
as the agent of the other. Each Party shall act solely as an
independent contractor, and nothing in this Agreement shall be
construed to give any Party the power or authority to act for, bind,
or commit the other.
19.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Parties hereto and their respective
successors and permitted assigns.
19.10 NOTICES. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have
been duly given when (a) delivered by hand (with written
confirmation of receipt), (b) sent by fax (with written confirmation
of receipt), provided that a copy is sent by an internationally
recognized overnight delivery service (receipt requested), or (c)
when received by the addressee, if sent by an internationally
recognized overnight delivery service (receipt requested), in each
case to the appropriate addresses and fax numbers set forth below
(or to such other addresses and fax numbers as a Party may designate
by notice):
If to Anadys:
Anadys Pharmaceuticals, Inc.
3115 Merryfield Row
San Diego, CA 92121
USA
Attention: [...***...]
Fax: [...***...]
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If to Novartis:
Novartis International Pharmaceutical Ltd.
"Hurst Holme", 12 Trott Road
P.O. Box HM 2899
Hamilton, HM LX
Bermuda
Attn: [...***...]
Fax: [...***...]
with a copy to:
Novartis Pharma AG
Lichtstrasse 35
Post Office Box 4002
Basel, Switzerland
Attn: [...***...]
Fax: [...***...]
and
Novartis Pharma AG
Lichtstrasse 35
Post Office Box 4002
Basel,Switzerland
Attn: [...***...]
Fax: [...***...]
19.11 FURTHER ASSURANCES. Novartis and Anadys hereby covenant and agree
without the necessity of any further consideration, to execute,
acknowledge and deliver any and all such other documents and take
any such other action as may be reasonably necessary to carry out
the intent and purposes of this Agreement.
19.12 COMPLIANCE WITH LAW. Each Party shall perform its obligations under
this Agreement in accordance with all applicable laws. No Party
shall, or shall be required to, undertake any activity under or in
connection with this Agreement which violates, or which it believes,
in good faith, may violate, any applicable law.
19.13 NO THIRD PARTY BENEFICIARY RIGHTS. This Agreement is not intended to
and shall not be construed to give any Third Party any interest or
rights (including, without limitation, any third party beneficiary
rights) with respect to or in connection with any agreement or
provision contained herein or contemplated hereby.
19.14 ENTIRE AGREEMENT. This Agreement, together with its Exhibits and the
letter agreement between the parties dated of even date herewith
pursuant to which the Parties have approved the initial Development
Plan and Target Product Profile, sets forth the entire agreement and
understanding of the Parties as to the subject matter hereof and
supersedes all proposals, oral or written, and all other
communications between the Parties with respect to such subject
matter. In the
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event of any conflict between a substantive provision of this
Agreement and any Exhibit hereto, the substantive provisions of this
Agreement shall prevail.
19.15 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
19.16 HSR FILING. Each of Novartis and Anadys agrees to prepare and make
appropriate filings under the HSR Act relating to this Agreement and
the transactions contemplated hereby as soon as reasonably
practicable, but in any event within [...***...]
([...***...])[...***...]after the Execution Date (the "HSR FILING
DATE"). The parties agree to cooperate in the antitrust clearance
process and to furnish promptly to the FTC, the Antitrust Division
of the Department of Justice and any other agency or authority, any
information reasonably requested by them in connection with such
filings. Other than the provisions of this Clause 19.16 and
[...***...] and [...***...], the rights and obligations of the
Parties under this Agreement shall not become effective until the
waiting period provided by the HSR Act shall have terminated or
expired without any action by any government agency or challenge to
the transaction (the date of such termination or expiration shall be
the "EFFECTIVE DATE" of this Agreement). Upon the occurrence of the
Effective Date, all provisions of this Agreement shall become
effective automatically without the need for further action by the
Parties. In the event that antitrust clearance from the FTC and
Antitrust Division of the Department of Justice [...***...]
([...***...])[...***...], or [...***...], this Agreement may be
terminated by either Party. In the event a provision of this
Agreement needs to be deleted or substantially revised in order to
obtain regulatory clearance of this transaction, the parties will
negotiate in good faith in accordance with Clause 19.3.
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IN WITNESS WHEREOF, the Parties intending to be bound have caused
this Agreement to be executed by their duly authorized representatives.
NOVARTIS INTERNATIONAL ANADYS PHARMACEUTICALS, INC.
PHARMACEUTICAL LTD.
By: /s/ Emil Block By: /s/ Kleanthis G. Xanthopolous, Ph.D.
---------------------------- -------------------------------------
Name: Emil Block Name: Kleanthis G. Xanthopolous, Ph.D.
Title: Member of the Board of Title: President and CEO
Directors
By: /s/ Wendy Wiseman
----------------------------
Name: Wendy Wiseman
Title: Account Manager
53
EXHIBIT A
ANADYS COMPOUNDS
[...***...]
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EXHIBIT B - 1
ANADYS PATENTS
Patent Family A
PATENT APPLICATION
COUNTRY TITLE NUMBER/PATENT NUMBER FILING DATE STATUS
- ----------- ----------- -------------------- ----------- -----------
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
PATENT APPLICATION
COUNTRY TITLE NUMBER/PATENT NUMBER FILING DATE STATUS
- ----------- ----------- -------------------- ----------- -----------
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
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PATENT APPLICATION
COUNTRY TITLE NUMBER/PATENT NUMBER FILING DATE STATUS
- ----------- ----------- -------------------- ----------- -----------
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
PATENT APPLICATION
COUNTRY TITLE NUMBER/PATENT NUMBER FILING DATE STATUS
- ----------- ----------- -------------------- ----------- -----------
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
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Patent Family B
PATENT APPLICATION
COUNTRY TITLE NUMBER/PATENT NUMBER FILING DATE STATUS
- ----------- ----------- -------------------- ----------- -----------
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
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Patent Family C
PATENT APPLICATION
COUNTRY TITLE NUMBER/PATENT NUMBER FILING DATE STATUS
- ----------- ----------- -------------------- ----------- -----------
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
PATENT APPLICATION
COUNTRY TITLE NUMBER/PATENT NUMBER FILING DATE STATUS
- ----------- ----------- -------------------- ----------- -----------
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
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PATENT APPLICATION
COUNTRY TITLE NUMBER/PATENT NUMBER FILING DATE STATUS
- ----------- ----------- -------------------- ----------- -----------
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
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EXHIBIT B-2
ANADYS PATENTS
Patent Family D
PATENT APPLICATION
COUNTRY TITLE NUMBER/PATENT NUMBER FILING DATE STATUS
- ----------- ----------- -------------------- ----------- -----------
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
[...***...] [...***...] [...***...] [...***...] [...***...]
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EXHIBIT C
FULLY BURDENED MANUFACTURING COSTS
"Fully Burdened Manufacturing Costs" mean the total amount of the following:
[...***...], [...***...],[...***...] and [...***...]. All calculations hereunder
will be made using, and all defined and undefined terms will be construed in
accordance with, [...***...], consistently applied, and consistent with
generally accepted methods for costing for similar products in the
pharmaceutical industry. Notwithstanding any other provision of this [...***...]
to the contrary, no cost or expense item included in [...***...] shall include
any [...***...] or similar markups.
"[...***...]" mean the appropriate allocation (for [...***...] sales in the
[...***...]) of the total of the [...***...] and [...***...] to [...***...], as
determined in accordance with [...***...] Accounting Standards.
"[...***...]" mean the costs of [...***...] needed for the manufacturing
process and costs of [...***...] for these [...***...], in each case to
the extent directly attributable to [...***...].
"[...***...]" mean the direct and indirect costs of [...***...], plus an
appropriate share of costs of [...***...], determined in accordance with
the [...***...] for all other products manufactured in the applicable
facility.
[...***...] and [...***...] are to be established on a regular, standard
basis, as more fully described below:
Costs of [...***...] shall be based on a planned utilization of
[...***...] in the [...***...] process for [...***...]. [...***...]
are not to be included in [...***...] costs. [...***...] of
[...***...] are costs of depreciation or [...***...] of the
[...***...] accommodating that equipment plus [...***...] and
[...***...] for the building, and costs for [...***...], and other
[...***...] costs such as costs for [...***...] and [...***...]. The
building costs shall be allocated [...***...]using an appropriate
key such as [...***...].
[...***...] costs are costs for [...***...] which typically embraces
a controlling and [...***...] function, costs of indirect
[...***...] such as costs for a [...***...], costs of [...***...]
costs of [...***...] monitoring of [...***...], costs of [...***...]
of [...***...][...***...], costs for [...***...] and [...***...],
costs for [...***...] and [...***...], costs of [...***...], costs
for [...***...] of [...***...], and costs of [...***...].
[...***...]costs are costs of identifying and analyzing the
[...***...], costs of [...***...], costs of [...***...], costs of
[...***...], costs of [...***...], costs of [...***...], costs of
[...***...], costs of [...***...], costs [...***...].
[...***...] costs are costs for [...***...] of [...***...], costs of
[...***...], costs of [...***...].
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[...***...] costs shall mean costs of plant and production
management, costs for ensuring sufficient levels of safety, health
and environment such as [...***...]. Other [...***...] costs include
costs [...***...].
[...***...]costs are costs associated with the [...***...].
[...***...]costs are costs associated with the [...***...].
"[...***...]" means [...***...] used to determine the total
[...***...]attributable to Product.
"[...***...]" mean the costs of [...***...].
"[...***...]" mean any [...***...] on sales of [...***...] in the
[...***...] paid by [...***...] to [...***...] in consideration of the
[...***...] such [...***...] to [...***...] of a [...***...] under
[...***...] controlled by such [...***...] that, in the absence of such
license, would be [...***...] the
[...***...],[...***...],[...***...],[...***...]or use of the [...***...]in
[...***...].
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EXHIBIT D
THIRD PARTY MANUFACTURING CONTRACTS
1. [...***...]
2. [...***...]
3. [...***...]
4. [...***...]
5. [...***...]
a. [...***...]
b. [...***...]
c. [...***...]
6. [...***...]
7. [...***...]
8. [...***...]
9. [...***...]
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EXHIBIT E
SAMPLE INVOICE
SENDER'S LOGO INVOICE
INVOICE DATE:
Street MAY 11, 2006
Town, Country
Phone and Fax Nr. INVOICE NO.: XXXX
BILL TO: FOR:
Novartis Pharma AG [...***...]
[...***...] [...***...]
Att. Mr. XXXX
[...***...]
[...***...]
DESCRIPTION AMOUNT (USD)
----------- --------------
[...***...] US$ 000'000.00
(Or milestone payment for event Y, according to paragraph
XY of agreement ZZZZ dated ......)
Novartis Contract Code
Please specify the event for which the invoice is due
PLEASE REMIT BY WIRE TRANSFER WITHIN [__] DAYS TO:
Receiving Bank - ........
Swift Code - ........
ABA Number - ........
Credit Account - ........
Beneficiary - ........
TOTAL 000'000,00
If you have any questions concerning this invoice, contact ............
or e-mail to ........
VAT -Reg. No. Xxxxxxxxxx (if applicable)
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