EXHIBIT 10.22
*** TEXT OMITTED AND FILED SEPARATELY
PURSUANT TO A CONFIDENTIAL TREATMENT REQUEST
UNDER 17 C.F.R. SECTION 200.80(b)(4)
AND RULE 406 UNDER THE SECURITIES
ACT OF 1933, AS AMENDED
COLLABORATION AGREEMENT
THIS COLLABORATION AGREEMENT (the "AGREEMENT") is made and entered into as
of August 20, 2004 (the "SIGNING DATE") by and between STRUCTURAL GENOMIX, INC.
located at 10505 Roselle Street, San Diego, CA 92121 ("SGX"), and F. HOFFMANN-LA
ROCHE LTD, located at Grenzacherstrasse 124, 4070 Basel, Switzerland, and
HOFFMANN-LA ROCHE INC., located at 340 Kingsland Street, Nutley, New Jersey
07110, USA ( "ROCHE"). SGX and Roche may be referred to herein individually as a
"Party" and collectively as the "Parties."
BACKGROUND
WHEREAS, SGX is in the business of structure directed drug discovery;
WHEREAS, Roche is in the business of discovering, developing,
manufacturing and commercializing pharmaceuticals;
WHEREAS, SGX and Roche wish to enter into a collaborative research program
to identify and generate lead compounds against certain targets; and
NOW, THEREFORE, in consideration of the foregoing and the covenants and
promises contained in this Agreement, the Parties hereby agree as follows:
1. DEFINITIONS
1.1 "Affiliate" means
(a) an organization, which directly or indirectly controls a party
to this Agreement;
(b) an organization, which is directly or indirectly controlled by
a party to this Agreement;
(c) an organization, which is controlled, directly or indirectly,
by the ultimate parent company of a party.
Control as per 1.1 (a) to 1.1(c) is defined as owning more than fifty percent of
the voting stock of a company or having otherwise the power to govern the
financial and the operating policies or to appoint the management of an
organization. With respect to Roche the term "Affiliate" shall not include
Genentech, Inc., 1 DNA Way, South San Francisco, California 94080-4990, U.S.A.
("Genentech") or Chugai Pharmaceutical Co., Ltd, 1-9, Kyobashi 2-chome, Chuo-ku,
Tokyo, 104-8301, Japan ("Chugai"), respectively,
unless Roche opts for such inclusion of Genentech and/or Chugai by giving
written notice to SGX.
1.2 "Clinical Candidate Selection" means the first dose in an animal GLP
toxicology study.
1.3 "Collaboration" means the activities conducted by the Parties in
connection with the Collaboration Plan.
1.4 "Collaboration Plan" means the plan of research attached as Exhibit
A to this Agreement, as may be amended from time to time by the JSC in
accordance with Section 2.6.
1.5 "Collaboration Product" means any product that comprises or contains
or is developed or manufactured based on a Licensed Compound.
1.6 "Collaboration Target" means the protein target known as
[...***...], or the additional target selected pursuant to Section 2.4. D).
1.7 "Commercially Reasonable Efforts" mean efforts consistent with those
generally utilized by companies of a similar size for their own internally
developed pharmaceutical products of similar market potential, at a similar
stage of their product life taking into account the existence of other
competitive products in the market place or under development, the proprietary
position of the product, the regulatory structure involved, the anticipated
profitability of the product and other relevant factors. With respect to Roche,
it is understood that such Product potential may change from time to time based
upon changing scientific, business and marketing and return on investment
considerations. Notwithstanding the foregoing, the Parties also acknowledge that
Roche (and its Affiliates) do not always seek to market its own products in
every such country or seek to obtain regulatory approval in every such country
or for every potential indication. As a result, the exercise by Roche of
Commercially Reasonable Efforts is to be determined by judging its efforts taken
as a whole.
1.8 "Controls" or "Controlled" means possession of the ability to grant
the licenses or sublicenses as provided for herein, without violating the terms
of any agreement or other arrangement with a Third Party.
1.9 "Derived Compound" means an analog, homolog, isomer, isostere or
other derivative that Roche makes from, derives from or bases upon any compound
within the Early Lead Series by one or more modifications that results in a
compound having a superior profile against an [...***...] target, in one or more
respects, as a candidate for further development than the compound within the
Early Lead Series from which it is derived and which is identified, by or on
behalf of Roche or any of its Affiliates or sub-licensEeS during the Term of the
Collaboration or within [...***...] ([...***...]) years after the Term of the
Collaboration ends. The term "Derivative" shall not include any derivatives made
by Roche or any of its Affiliates or sub-licensees without the use of SGX
BackgroUnD Technology.
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1.10 "Development Event" means any of the events described in Section
3.3.
1.11 "Early Lead Series" means the collection of compounds within a
single chemical series identified in the course of the Collaboration either: (a)
(i) which contains compounds that satisfy the criteria described in Part 1 of
Exhibit B, (ii) in which each of the criteria in Part 2 of Exhibit B are covered
by compounds within the series taken as a whole (but not necessarily by any one
compound), and (iii) is designated by the JSC as an "Early Lead Series" under
Section 2.4(a); or (b) which is designated by the JSC as an "Early Lead Series"
under Section 2.4(b).
1.12 "Effective Date" means October 1, 2004.
1.13 "First Commercial Sale" means the first sale of a Collaboration
Product to a Third Party following the receipt of any Regulatory Approval
required for the sale of Collaboration Product.
1.14 "Fragment" means a compound used in the SGX FAST(TM) screen.
1.15 "Initiation" means the first dosing of the first patient in the
applicable clinical study.
1.16 "JSC" has the meaning ascribed such term in Section 2.6.
1.17 "Know-How" means all ideas, inventions, instructions, designs,
processes, formulas, software, materials, methods, processes, techniques, and
data and all intellectual property rights therein. 1.18 "Licensed Compound"
means a compound within an Early Lead Series or a Derived Compound.
1.19 "Net Sales" "Adjusted Gross Sales" means the amount of gross sales
of the Product invoiced by Roche, its Affiliates and its sub-licensees to
independent third parties less deductions of returns (including allowances
actually given for spoiled, damaged, out-dated, rejected, returned Product sold,
withdrawals and recalls) and return reserves, rebates (price reductions, rebates
to social and welfare systems, charge backs and charge back reserves, government
mandated rebates and similar types of rebates e.g., P.P .R.S, Medicaid), cash
discounts, volume (quantity) discounts granted at the time of invoice, taxes
(value added or sales taxes, government mandated exceptional taxes and other
taxes directly linked to the gross sales amount). "Net Sales" means the amount
calculated by subtracting from the amount of Adjusted Gross Sales a lump sum
deduction of [...***...] percent ([...***...]%) of Adjusted Gross Sales in lieu
of those sales related deductions which are not accounted for on a product by
product basis (e.g. outward freights, postage charges, transportation insurance,
packaging materials for dispatch of goods, custom duties, bad debt, discounts
granted later than at the time of invoicing). Notwithstanding the foregoing,
amounts received by Roche, its Affiliates and sub-licensees for the sale of
Product among Roche, its Affiliates or sub-licensees for resale shall not be
included in the computation of Adjusted Gross Sales and Net Sales.
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1.20 "Patent Rights" means patent applications filed in any country
worldwide, including provisionals, utilities, continuations (in whole or in
part), divisionals, reissues, reexaminations, and foreign counterparts thereof,
any patents issued on such applications and any extensions of term,
registrations or confirmations of such patents. 1.21 "Phase 1", "Phase 2" and
"Phase 3" means Phase 1, Phase 2 and Phase 3 clinical trials, respectively, in
each case as prescribed by the U.S. Food and Drug Administration or any
successor entity (the "FDA"), and agencies of other governments of other
countries having similar jurisdiction over the development, manufacturing and
marketing of pharmaceuticals.
1.22 "Regulatory Approval" means the approval of the U.S. Food and Drug
Administration or any regulatory body with similar regulatory authority in any
other jurisdiction in the world, necessary for the marketing and sale of a
pharmaceutical or biotechnology product in the United States, one or more
countries in the European Union or Japan 1.23 "Roche Background Technology"
means Patent Rights and Know-How which are owned or Controlled by Roche on the
Effective Date or during the Term of the Collaboration and are necessary for the
conduct of the Collaboration, including without limitation, Roche Materials.
1.24 "Roche Materials" means all biological and chemical materials,
including but not limited to the biological and chemical materials embodying the
Collaboration Target, any protein, clone or vector used to express the
Collaboration Target, assay protocols and materials, and any compounds provided
by Roche to SGX for the purpose of performing the Collaboration Plan.
1.25 "Royalty Term" means the obligation of Roche to pay royalties under
Section 3.4 shall continue for each Collaboration Product on a Collaboration
Product-by-Collaboration Product and country-by-country basis, until the later
of (i) the expiry of the last Valid Claim in such country claiming such
Collaboration Product and (ii) [...***...] years after the First Commercial Sale
of such Collaboration Product. With regard to the calculation of the [...***...]
year period, the EU shall be considered as one country.
1.26 "SGX Background Technology" means Patent Rights and Know-How which
are owned or Controlled by SGX on the Effective Date or during the Term of the
Collaboration and are necessary for the conduct of the Collaboration or the
exercise of Roche's license rights under Section 4.1(a), including without
limitation compounds within Early Lead Series, but excluding any methods or
technologies comprising SGX's fragment based FAST(TM) lead discovery
technologies, other than synthetic protocols required for the synthesis of
compounds contained within Early Lead Series.
1.27 "SGX Materials" means (1) the biological and chemical materials
embodying compounds within an Early Lead Series or a structure of the
Collaboration Target; and (2) any protein, clone, or vector used to express the
Collaboration Target;
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in each case which are developed by SGX in the course of the Collaboration for
the purpose of performing the Collaboration Plan.
1.28 "Term of the Collaboration" means the period commencing on the
Effective Date, and terminating on the [...***...] anniversary of the Effective
Date, which period may be extended by up to [...***...] ([...***...]) months at
Roche's discretion, upon writteN NOTICE.
1.29 "Third Party or Third Parties" means any entity other than Roche or
SGX or their respective Affiliates.
1.30 "Valid Claim" means a claim in any (i) unexpired and issued Patent
Right owned or Controlled by SGX or Roche claiming composition of matter of
compounds that has not been (x) held permanently revoked, unenforceable or
invalid by a final unappealable decision of a court or government agency of
competent jurisdiction over such claim or (y) admitted to be invalid or
unenforceable through disclaimers, consent decrees or otherwise, or (ii) pending
patent application that is a Patent Right owned or Controlled by SGX or Roche
claiming composition of matter of compounds.
2. COLLABORATION.
2.1 Collaboration. Subject to the terms and conditions of this Agreement
Roche and SGX will use commercially reasonable efforts to conduct the
Collaboration in accordance with the Collaboration Plan.
2.2 Provision of Roche Background Technology. Promptly following the
Signing Date and during the Term of the Collaboration, Roche will provide SGX
with reasonable quantities of such Roche Materials and other Roche Background
Technology as agreed to by Roche that are necessary for the conduct of the
Collaboration by SGX.
2.3 Provision of SGX Background Technology. During the Term of the
Collaboration, SGX will provide Roche with reasonable quantities of available
SGX Materials and other SGX Background Technology as agreed by the JSC necessary
for Roche to conduct the Collaboration and exercise its applicable rights under
Article 4.1(a).
2.4 Early Lead Series.
(a) During the Term of the Collaboration, in accordance with the
Collaboration Plan, SGX will provide the JSC with details (and materials for
testing by Roche) of any collection of compounds identified in the Collaboration
which SGX believes to meet the criteria for an Early Lead Series in Section
1.10(a)(i) and (ii). Within thirty (30) days following review of the data by the
JSC, the JSC will formally designate any such collection of compounds as an
Early Lead Series if the collection meets the required criteria in Section
1.10(a)(i) and (ii) and if such collection of compounds is patentably distinct
from any previously designated Early Lead Series.
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Upon designation by the JSC of any such Early Lead Series, SGX will provide
Roche with any information or materials, generated under the Collaboration
concerning such Early Lead Series, including but not limited to X-ray
diffraction data, protocols for chemical synthesis, and all assay data, which
has not already been provided.
(b) In the event that a collection of compounds does not meet all
of the criteria in Part B of Exhibit B, upon the request of SGX, the JSC may
designate such collection as an Early Lead Series, notwithstanding that all of
the criteria have not been met.
(c) Roche shall have the right, but not the obligation to accept
more than three Early Lead Series under the Collaboration.
(d) If by the start of the [...***...] month, SGX has not
commenced Fragment elaboration for the Collaboration Target, Roche has the right
to nominate a substitute target in consultation with SGX. Upon acceptance of
such substitute target bY the JSC, such target shall be deemed a Collaboration
Target.
2.5 Records; Reports. At least quarterly during the Term of the
Collaboration SGX will have the obligation to prepare and provide to the JSC a
detailed written report summarizing the progress of the work performed by SGX in
the course of the Collaboration during the preceding quarter. Promptly upon
expiry of the Term of the Collaboration, SGX shall provide a final written
report summarizing its activities during the Collaboration and the results
thereof. Upon the written request of Roche and not more than once in each
calendar year, SGX will permit Roche, at Roche's expense, to have access during
normal business hours to those records of SGX that may be necessary to verify
the basis for any other payments hereunder.
2.6 Joint Steering Committee.
(a) Formation. SGX and Roche will establish a joint steering
committee ("JSC") to oversee the Collaboration.
(b) Membership. The JSC shall be comprised of three (3)
representatives from Roche and three (3) representatives from SGX, designated by
the Parties promptly following the Effective Date. Each Party may replace its
JSC representatives at any time, with written notice to the other Party. The JSC
may name additional members to the JSC from time to time so long as each Party
has an equal number of members. In addition, with prior mutual approval, either
Party may invite non-voting employees, consultants or scientific advisors to
attend meetings of the JSC. One of the three Roche representatives shall be the
appointed Roche Global Alliance Director. The Global Alliance Director will act
as the primary contact person for all non-scientific matters including payment,
third party license and patent related matters.
(c) Decisions. Each Party shall have one vote on the JSC. All
decisions of the JSC shall be made by unanimous vote. Any matter which the JSC
is unable to agree upon shall be submitted to the Chief Executive Officer of SGX
and the
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Head of Pharma Partnering of Roche for resolution. All decisions that cannot be
agreed upon by the SGX CEO and the Roche Head of Pharma Partnering shall be made
by [...***...] reasonably taking into consideration the position of [...***...],
excluding decisions relating to the activities carried out by [...***...] under
the Collaboration Plan, which will be made by [...***...] reasonably taking into
consideration the position of [...***...].
(d) Project Team. The JSC shall establish a project team (the
"Project Team") comprising at least three (3) representatives from Roche and
three (3) representatives from SGX, designated by the Parties promptly following
the Effective Date. The JSC may expand the size of the Project Team, in its sole
discretion, provided that the Project Team shall always comprise an equal number
of representatives from Roche and SGX. Each Party may replace its Project Team
representatives at any time, with written notice to the other Party. The Project
Team will direct the performance of the Collaboration and shall meet to
discharge its responsibilities via videoconference, teleconference or in person
on an at least bi-weekly basis, or as the Project Team may agree. Meetings of
the Project Team may be held only if a quorum of at least one (1) representative
of each Party participates. Within thirty (30) days of the end of each calendar
quarter the Project Team shall submit a quarterly report to the JSC describing
the performance of the Collaboration during such calendar quarter. Each Party
will be responsible for paying its own expenses in connection with participating
in the meetings of the Project Team.
(e) Responsibilities. The JSC will review, and monitor the
performance of the Collaboration. The JSC will be responsible for (i)
supervising the Project Team, (ii) modifying or amending the Collaboration Plan
as appropriate subject to the final sentence of this Section 2.6(e); (iii)
confirming the achievement of the event in Section 3.2(a) and designating
compound collections as Early Lead Series in accordance with Section 2.4. Any
amendments to the Collaboration Plan which alter the financial terms or
materially alter the nature or scope of the Collaboration must be agreed in
writing by the Parties.
(f) Meetings. The JSC shall meet at least quarterly. The Parties
shall mutually agree upon times and places for such meetings (alternating
between San Diego, CA and Palo Alto, CA, or as the JSC may otherwise agree), to
discharge its responsibilities. If mutually agreed by the Parties, such meeting
may be held via videoconference or teleconference. Each Party will be
responsible for paying its own expenses in connection with participating in the
meetings of the JSC. The JSC shall prepare written minutes of each meeting and a
written record of all JSC decisions, whether made at a JSC meeting or otherwise.
2.8 Permitted Activities.
(a) By SGX. SGX agrees that SGX will not use any Confidential
Information of Roche to replicate any Roche Material for any purpose other than
as provided herein and shall destroy all proprietary Roche Materials after
expiry of the Term of the Collaboration.
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(b) By Roche. After the expiry of the Collaboration, Roche shall
destroy all chemical materials within the SGX Materials received from SGX and
not designated as Early Lead Series under this Agreement.
3. CONSIDERATION
3.1 Research Fees.
(a) Within thirty (30) days after the Effective Date Roche will
pay to SGX a non-refundable, non-creditable upfront fee of $[...***...].
(b) During the Term of the Collaboration, Roche will pay to SGX
research payments of $[...***...] per calendar quarter, payable on the first day
of each calendar quarter, commencing on the Effective Date.
3.2 Research Events. Within thirty (30) days of the date of achievement
of the applicable research event described below during the Term of the
Collaboration, Roche will pay, to SGX the following non-refundable and
non-creditable event payments:
(a) The first crystal structure that reveals density of
a Fragment bound to the Collaboration Target
with at least [...***...] A resolution, where data
completeness in the final resolution shell is
greater than or equal to [...***...]%, and the fragment
position and orientation is clearly interpretable $[...***...]
(b) upon designation by the JSC of the first
Early Lead Series $[...***...]
(c) upon designation by the JSC of each subsequent
Early Lead Series $[...***...]
per series
3.3 Development Events. Within thirty (30) days of the date of
achievement of the applicable Development Event described below, Roche will pay
to SGX the following non-refundable event payments on a Collaboration
Product-by-Collaboration Product basis:
(a) Clinical Candidate Selection $[...***...]
(b) Initiation of Phase 1 $[...***...]
(c) Initiation of Phase 2 $[...***...]
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(d) Initiation of Phase 3 $[...***...]
(e) Receipt of first Regulatory Approval $[...***...]
Roche shall make each of such payments only once for the first occurrence of the
requisite event for the Collaboration Product regardless of how many times the
event may be subsequently achieved with the particular Collaboration Product.
Roche shall make each of such payments for the first Collaboration Product to
achieve the applicable event, provided that (i) if Roche ceases all development
of a particular Collaboration Product after having made one or more payments
with respect to such Collaboration Product under this Section 3.3 following
accomplishment of any Development Event, there shall be no payment due upon the
accomplishment of that same Development Event with respect to a subsequent
Collaboration Product; and (ii) if Roche has received Regulatory Approval for a
Collaboration Product and continues development of an additional Collaboration
Product ("Subsequent Product"), payments will be due under this Section 3.3 for
the achievement of Development Events by the Subsequent Product (including those
Development Events which may have been achieved by the Subsequent Product prior
to such receipt of Regulatory Approval).
3.4 Royalties. Roche will pay to SGX during the Royalty Term the
following royalties on Net Sales of Collaboration Products by or on behalf of
Roche or its Affiliates or Sublicensees on a Collaboration
Product-by-Collaboration Product basis on the following tiers:
Net Sales up to US $[...***...] [...***...]%
Net Sales from US $[...***...] to US $[...***...] [...***...]%
Net Sales over US $[...***...] [...***...]%
3.5 Combination Products. In the event the Collaboration Product is sold
as part of a combination product containing a Licensed Compound and one or more
other pharmaceutically active ingredients, the Net Sales of the Collaboration
Product shall be determined by multiplying the Net Sales (as determined in the
manner described above) of the combination product by the fraction A/B, where A
is the weighted average sale price of the Collaboration Product containing the
Licensed Compound alone as a pharmaceutically active ingredient (in the same
strength as contained in the combination product) when sold separately in
finished form, and B is the weighted average sale price of the Collaboration
Product sold as part of a combination product when sold separately in finished
form. In the event that such average sale price cannot be determined for the
Collaboration Product containing the Licensed Compound alone as a
pharmaceutically active ingredient, Net Sales shall be mutually agreed by the
parties based on the relative value contributed by each pharmaceutically active
ingredient contained in such Collaboration Product, and such agreement shall not
be unreasonably withheld.
3.6 Third Party Royalties. In the event that Roche, is required to pay
royalties to a Third Party for licenses to composition of matter patents
claiming compounds within an Early Lead Series, Roche may offset up to
[...***...] percent ([...***...]%) of such amounts due
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Third Parties against payments due SGX under Section 3.4 above; PROVIDED,
HOWEVER, that Roche may not offset these amounts against more than [...***...]
percent ([...***...]%) of the royalties otherwise due SGX in any calendar
quarter. Any amount that has not been so offset may be offset against royalties
due in subsequent calendar quarters, subject to the limitation set forth in the
previous sentence.
3.7 Withholding Taxes. All amounts due under this Agreement shall be
paid without deduction, set-off or counterclaim and shall be made in full
without deduction of income, value added or other taxes, charges or duties that
may be imposed. If any payment due under this Agreement is or will be subject to
any tax, including withholding tax, Roche shall pay to SGX the amount that will
ensure SGX receives and retains a net sum equal to the payment it would have
received had the payment not been subject to such tax.
3.8 Reports; Payments. The royalties due under Section 3.4 shall be paid
quarterly within forty-five (45) days after the close of each calendar quarter,
or earlier if practicable, immediately following each quarterly period in which
such royalties are earned. With each such quarterly payment, Roche shall furnish
SGX a royalty statement setting forth in reasonable detail Collaboration
Product-by- Collaboration Product basis: (i) Adjusted Gross Sales; (ii) Net
Sales; and (iii) the royalties due SGX in such quarter.
3.9 Currency Conversion. All amounts required to be paid under this
Agreement shall be paid in United States dollars. Whenever calculation of Net
Sales requires conversion from any foreign currency, Roche shall convert the
amount of Net Sales in foreign currencies as computed in the Roche's central
Swiss Francs Sales Statistics for the countries concerned. Roche shall first
convert the amount of Net Sales into Swiss Francs and then into United States
dollars, using the YTD average exchange rate, in accordance with Roche's then
current standard practices.
3.10 Late Payments. Any payments or portions thereof due hereunder which
are not paid on the date such payments are due, shall bear interest at the rate
equal to the lesser of the prime rate as reported by the Chase Manhattan Bank,
New York, New York, plus [...***...] percent ([...***...]%) or the maximum
amount permitted by law, compounded monthly. This Section 3.10 shall in no way
limit any other remedies available to SGX.
3.11 Audits. Roche shall maintain accurate books and records which enable
the calculation of royalties payable under this Agreement to be verified. Roche
shall maintain the books and records for each quarterly period for three (3)
years after the submission of the corresponding report under Section 3.8. Upon
thirty (30) days prior notice to Roche, Roche's independent accountants,
reasonably acceptable to SGX, may have access to Roche's books and records after
executing a reasonable confidentiality agreement, during Roche's normal business
hours at mutually agreed times to conduct a review or audit no more than once
per calendar year, and no more than once with respect to any time period, for
the sole purpose of verifying the accuracy of Roche's payments and compliance
with this Agreement. The accounting firm shall report to SGX only whether there
has been a royalty underpayment and, if so, the extent thereof. Any such
inspection shall be at SGX's expense, however, in the event that an inspection
reveals
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underpayment of 5% or more in any audit period, Roche shall pay the costs of the
inspection. Roche shall promptly pay to SGX any underpayment identified in such
audit, with interest from the date such amount(s) were due at the prime rate
reported by the Chase Manhattan Bank, New York, New York plus [...***...]
percent ([...***...]%). The failure of SGX to request verification of any
payment calculation during which corresponding records are required to be
retained under this Section 3.11 shall be considered acceptance of such
reporting by SGX.
4. LICENSES
4.1 Licenses to Roche. Subject to the terms and conditions of this
Agreement, SGX hereby grants to Roche, the following licenses:
(A) [...***...], [...***...], [...***...] license (with the right
to grant sublicenses in accordance with Section 4.3 below) under SGX's Patent
Rights and Know-How in Early Lead Series, to make, have made, use, import, offer
for sale and sell Collaboration Products.
(B) [...***...], [...***...], [...***...] license (with the right
to grant sublicenses in accordance with Section 4.3 below) under SGX's interest
in SGX Background Technology relating to Early Lead Series, to use and modify
such SGX Background Technology solely as necessary for Roche to exercise its
rights under Section 4.1(a) above.
4.2 Cross Licenses. Each Party hereby grants to the other, a
non-exclusive, non-transferable, royalty-free license to use and practice Roche
Background Technology and SGX Background Technology, solely to conduct the
Collaboration.
4.3. Sublicenses. Roche may sublicense the rights granted in Section 4.1
to its Affiliates and to Third Parties who are bona fide collaborators of Roche
with respect to the Early Lead Series for which rights are being sublicensed.
Each such sublicense granted by Roche shall be consistent with all of the terms
and conditions of this Agreement. Roche as the sublicensor, shall remain
responsible for all of each such sublicensee's obligations under this Agreement.
4.4 Product Development. During the term of this Agreement, Roche will
keep SGX informed of its activities in connection with the development of Early
Lead Series' and Collaboration Products, including without limitation, the
achievement of events under Section 3.3. On a half-yearly basis up to Initiation
of Phase 1 trials, and on a yearly basis thereafter during the term of the
Agreement, Roche will provide SGX with a written summary report detailing such
events and activities. When a registration package requesting approval for
commercial sale of any Collaboration Product is first filed in any country, and
when approval is received, Roche will immediately notify SGX in writing.
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4.5 Diligence. Roche will use Commercially Reasonable Efforts to
discover and develop Early Lead Series and commercialize Collaboration Products
including using Commercially Reasonable Efforts to bring at least one
Collaboration Product to the market, to obtain Regulatory Approval to market
such Collaboration Product, to launch and market such Collaboration Product and
promote and meet the market demand therefor. Notwithstanding the above, Roche
will have the right at its sole discretion to discontinue development of an
Early Lead Series and/or commercialization of a Collaboration Product in any
country on written notice to SGX, subject to Section 4.6.
4.6 Lack of Diligence. In the event that Roche fails to use or continue
to use diligent efforts to actively develop at least one Early Lead Series or at
least one Collaboration Product in accordance with Section 4.5 above, or
notifies SGX that it will not conduct further development or commercialization
with respect to a at least one Early Lead Series or at least one Collaboration
Product, then SGX may terminate Roche's rights under this Agreement with respect
to Early Lead Series upon written notice to Roche, provided that Roche will have
a period of [...***...] ([...***...]) months following receipt of such notice to
demonstrate to SGX's reasonable satisfaction that it has not failed to use or
continue to use diligent efforts in accordance with Section 4.5 or to initiate
diligent efforts in accordance with Section 4.5. In the event that Roche's
rights terminate pursuant to this Section 4.6, the Parties will negotiate in
good faith for a period of [...***...] days, immediately following the
termination of Roche's rights by SGX, (i) at Roche's option, an agreement under
which SGX would receive compensation from Roche and would not develop and
commercialize an Early Lead Series or Collaboration Products developed
therefrom, or (ii) the appropriate consideration for a license grant (as
described below) from Roche to SGX. In the event that the Parties do not reach
an agreement under subsection (i) above, SGX will thereafter have the exclusive
right to develop and commercialize Early Lead Series and corresponding
Collaboration Products alone or with Third Parties. and Roche shall grant to SGX
an exclusive, worldwide, royalty bearing license (with the right to sublicense)
under Roche's interest in any Patent Rights or Know How owned or Controlled by
Roche relating to such Early Lead Series and corresponding Collaboration
Products to the extent necessary to make, have made, import, offer for sale and
sell products. In addition, SGX will not sublicense such Patent Rights or
Know-How of Roche to a Third Party, without first offering Roche the opportunity
to enter into such an agreement with SGX on terms no more favorable to SGX as
those SGX proposes to offer to a Third Party.
5. INTELLECTUAL PROPERTY
5.1 Ownership of Technology.
(a) Ownership by SGX. Title to all SGX Background Technology,
shall be owned by SGX.
(b) Ownership by Roche. Title to all Roche Background Technology,
shall be owned solely by Roche.
***CONFIDENTIAL TREATMENT REQUESTED
12
(c) Law. Inventorship of inventions and, subject to the terms of
this Agreement, ownership rights with respect thereto, shall be determined in
accordance with the patent laws of the United States.
5.2 Patent Prosecution.
(a) Prosecution by SGX or Roche. SGX shall be responsible, at its
sole discretion and expense, for the preparation, filing, prosecution and
maintenance of the patent applications and patents within Patent Rights within
SGX Background Technology in countries selected by SGX, and for conducting any
interferences, reexaminations, reissues, oppositions, or request for patent term
extension relating thereto. Roche shall be responsible, at its sole discretion
and expense, for the preparation, filing, prosecution and maintenance of the
patent applications and patents within Patent Rights within Roche Background
Technology, in countries selected by Roche, and for conducting any
interferences, reexaminations, reissues, oppositions, or request for patent term
extension relating thereto.
(b) Early Lead Series. [...***...] shall have the first right, at
its sole expense, for the preparation, filing, prosecution and maintenance of
the patent applications and patents claiming Licensed Compounds. On an Early
Lead Series by Early Lead Series basis, in the event that [...***...] elects not
to file a patent application covering (i) compounds within an Early Lead Series
within twelve (12) months of delivery of such Early Lead Series to Roche, and
(ii) Derived Compounds within four (4) years after the expiry of the Term of the
Collaboration, [...***...] shall have the right, at its expense, to file,
prosecute and maintain such patent applications. Furthermore, in the event that
[...***...] elects not to pursue prosecution or maintenance of any patent
applications or patents claiming Licensed Compounds, [...***...] shall give
[...***...] not less than sixty (60) days notice before any relevant deadline or
any permitted public disclosure, and [...***...] shall have the right to pursue,
at its sole discretion and expense, prosecution and maintenance of such patent
applications or patents. The Party responsible for prosecution and maintenance
(the "Responsible Party), shall keep the other Party (the "Non-Responsible
Party") fully informed as to the status of such patent matters, including,
without limitation, by providing the Non-Responsible Party the opportunity, at
the Non-Responsible Party's expense, to review and comment on any documents
relating to such patent applications and patents which will be filed in any
patent office at least thirty (30) days before such filing, and promptly
providing the Non-Responsible Party with copies of any documents relating to
such patent applications and patents which the Responsible Party receives from
such patent offices, including notice of all interferences, reissues,
reexaminations, oppositions or requests for patent term extensions. At the
Responsible Party's request and expense, the Non-Responsible Party will
reasonably cooperate and assist the Responsible Party in the preparation, filing
and prosecution of patent applications claiming compounds within an Early Lead
Series and in the event of an interference, reissue, reexamination, opposition
or request for patent term extension.
5.3 Patent Enforcement. In the event either Party becomes aware of any
interference, opposition, or request for reexamination, or similar proceedings,
involving a
***CONFIDENTIAL TREATMENT REQUESTED
13
patent application or patent filed in accordance with Section 5.2(a) or 5.2(b),
it shall promptly notify the other Party hereto, and the Parties shall agree on
the steps which shall be taken to protect the pertinent patent. In the event
either Party becomes aware of any possible infringement of a patent filed in
accordance with Section 5.2(a) or 5.2(b) or misappropriation of an invention
within the Collaboration, it shall promptly notify the other Party hereto,
providing a written description of the potentially infringing or
misappropriation activities. SGX shall have the right, but not the obligation to
institute, prosecute and control any action or proceeding with respect to
infringement of patents within SGX Background Technology. Roche shall have the
right, but not the obligation, to institute, prosecute and control any action or
proceeding with respect to infringement of patents within Roche Background
Technology or compounds within Early Lead Series'. If a Party given the right to
enforce a patent pursuant to this Section fails to bring an action or
proceeding, or take other actions (e.g., commence settlement discussions)
against a suspected infringer within a period of ninety (90) days after having
notice of such infringement, the other Party shall have the right to bring and
control an action against such infringer by counsel of its own choice, and the
non-enforcing Party shall have the right to be represented in any such action by
counsel of its own choice at its own expense. The Party controlling an action
involving any infringement of a patent under this Section shall consider in good
faith the interests of the other Party in so doing, and shall not settle or
consent to an adverse judgment in any such action which would have a material
adverse effect on the rights or interests of the other Party without the prior
express written consent of such other Party. If one Party brings any such action
or proceeding, the other Party agrees to be joined as a Party plaintiff if
necessary to prosecute the action and to give the first Party reasonable
assistance and authority to file and prosecute the suit. In each case relating
to infringement of a patent under this Section, each Party shall bear the costs
of its enforcement of such rights discussed in this section and retain for its
own account any amounts received from Third Parties.
5.4 Allegations of Infringement by Third Parties. Roche will be
responsible for any threatened or actual claims for Third Party patent
infringement or other Third Party intellectual property rights arising out of
the manufacture, use, sale or importation of Collaboration Products to which
Roche retains a license. Upon receiving notice of such actual or threatened
claims, Roche shall promptly meet with SGX to discuss the course of action to be
taken to resolve or defend such infringement litigation. If Roche is not named
as a Party in such claim, suit or proceeding ("Suit"), Roche may at its own
expense and through counsel of its own choice, seek leave to intervene in such
Suit. SGX agrees not to oppose such intervention. If Roche, and not SGX, is
named as a Party to such Suit, Roche shall have the right to control the defense
and settlement of such Suit, at its own expense, using counsel of its own
choice, however, SGX, at its own expense, and through counsel of its own choice,
may seek to intervene if the Suit relates to the commercialization of the
Collaboration Product and in such event, Roche agrees not to oppose such
intervention. If SGX shall at any time, tender its defense to Roche, then Roche
shall defend SGX in such Suit, at Roche's own expense and through counsel of its
own choice and Roche shall control the defense and settlement of such Suit;
provided Roche shall not enter into any agreement which makes any admission
regarding (i) wrongdoing on the part of SGX, or (ii) the invalidity,
unenforceability or absence of infringement of any Patent Rights owned by SGX,
without the prior written consent of
14
SGX, which consent shall not be unreasonably withheld or delayed. The Parties
shall cooperate with each other in connection with any such Suit and shall keep
each other reasonably informed of all material developments in connection with
any such Suit.
6. CONFIDENTIALITY AND PUBLICITY
6.1 Confidential Information. Except as expressly provided herein, the
Parties agree that, for the term of this Agreement and for [...***...]
([...***...]) years thereafter, the receiving Party, or any Affiliate thereof,
shall not publish or otherwisE disclose to Third Parties (other than consultants
and agents of a Party engaged in the Collaboration) and shall not use for any
purpose, except as expressly permitted herein any information or material
furnished to it by the other Party hereto pursuant to this Agreement
("Confidential Information"). Notwithstanding the foregoing, it is understood
and agreed that Confidential Information shall not include information or
material that, in each case as demonstrated by written documentation:
(a) was already known to the receiving Party, or an Affiliate
thereof, other than under an obligation of confidentiality, at the time of
disclosure;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving Party;
(c) became generally available to the public or otherwise part of
the public domain after its disclosure and other than through any act or
omission of the receiving Party, or an Affiliate thereof, in breach of this
Agreement; or
(d) was subsequently lawfully disclosed to the receiving Party, or
an Affiliate thereof, by a person other than a Party hereto or independently
developed by the receiving Party or an Affiliate thereof without reference to
any Confidential Information disclosed by the disclosing Party.
6.2 Permitted Disclosures. Notwithstanding the provisions of Section 6.1
above, each Party hereto may disclose the other's Confidential Information to
the extent such disclosure is reasonably necessary in filing or prosecuting
patent applications, prosecuting or defending litigation, complying with
applicable governmental regulations, or submitting information to tax or other
governmental authorities, provided that if a Party is required to make any such
disclosure of another Party hereto's Confidential Information, to the extent it
may legally do so, it will give reasonable advance written notice to the other
Party of such disclosure so that the other Party may attempt to secure
confidential treatment of such Confidential Information prior to its disclosure
(whether through protective orders or otherwise).
6.3 Publication. Any public disclosure (oral, written or graphic) by
seither Party describing the scientific results of the Collaboration will
require prior review and written approval of the other Party at least thirty
(30) days prior to its submission for publication or other public disclosure. If
the reviewing Party so requests, the proposed
***CONFIDENTIAL TREATMENT REQUESTED
15
public disclosure will be delayed for forty-five (45) days from the date of each
request for the filing of patent application(s) related to the proposed public
disclosure to seek appropriate patent protection for any material in such
publication or presentation which it reasonably believes is patentable. Roche
also shall have the right to require deletion of its Confidential Information
that may be in any such proposed publication, prior to such publication. In the
event that either Party submits any manuscript or other publication relating to
any scientific results of the Collaboration, it will consider and acknowledge
the contributions of the other Party, including, as appropriate, co-authorship.
6.4 Publicity. The Parties agree to make a mutually agreed press release
regarding this Agreement promptly following the Effective Date. Neither Party
may make any public announcements relating to this Agreement without the other
Party's prior written consent, which consent will not be unreasonably withheld,
or delayed for a period of more than thirty (30) days after request for consent
is sought. Except as expressly provided in this Agreement, each Party agrees not
to disclose any terms of this Agreement to any Third Party without the prior
written consent of the other Party; provided however, that disclosures may be
made as required by securities or other applicable laws, or to actual or
prospective investors, or to a Party's professional advisors. Notwithstanding
the foregoing, Roche has the right to disclose a copy of this Agreement to
Chugai and/or Genentech for the sole purpose of assessing their interest therein
and provided that Chugai and/or Genentech are bound by confidentiality
obligations substantially similar to Roche's confidentiality obligations under
this Agreement.
7. INDEMNIFICATION
7.1 Indemnification of SGX. Roche shall indemnify, defend, and hold
harmless SGX, the directors, officers, and employees of SGX and the successors
and assigns of any of the foregoing (the "SGX Indemnitee(s)") from and against
all claims, losses, costs, and liabilities (including, without limitation,
payment of reasonable attorneys' fees and other expenses of litigation), and
shall pay any damages (including settlement amounts) finally awarded, with
respect to any claim, suit or proceeding (any of the foregoing, a "Claim")
brought by Third Party against a SGX Indemnitee, arising out of or relating to:
(a) the exercise by Roche of the rights granted Roche under this Agreement; (b)
a material breach by Roche of its obligations under this Agreement; (c) a breach
of Roche's representations and warranties under Section 8; (d) any products
developed, manufactured, used, sold or otherwise distributed by or on behalf of
Roche or its Affiliates (including without limitation, product liability
claims); (e) the gross negligence or willful misconduct of Roche; (f) the use,
handling, transfer or storage of the SGX Materials received from SGX hereunder;
or (g) a claim that the use by SGX or by Roche of the Collaboration Target, DNA
coding for the Collaboration Target, structures of Collaboration Targets, or
Roche Materials, infringes the intellectual property rights of a Third Party; or
except, in each case, to the extent caused by the gross negligence or willful
misconduct of a SGX Indemnitee.
16
7.2 Indemnification of Roche. SGX shall indemnify, defend and hold
harmless Roche, the directors, officers, and employees of Roche, and the
licensors, successors and assigns of any of the foregoing (the "Roche
Indemnitee(s)") from and against all Claims brought by Third Party against a
Roche Indemnitee, arising out of or relating to: (a) the performance by SGX of
the Collaboration, except to the extent such Claim arises out of or relates to a
claim the use by SGX of the Collaboration Target, DNA coding for the
Collaboration Target, the structure of the Collaboration Target or Roche
Materials, infringes the intellectual property rights of a Third Party; (b) the
exercise by SGX of the rights granted SGX under this Agreement; (c) a material
breach by SGX of its obligations under this Agreement; (d) a breach of SGX's
representations and warranties under Section 8; or (e) the handling, transfer or
storage of Roche Materials; (f) the negligence or willful misconduct of SGX;
except, in each case, to the extent due to the gross negligence or willful
misconduct of a Roche Indemnitee.
7.3 Indemnification Procedures. An Indemnitee that intends to claim
indemnification under this Article 7 shall promptly notify the other Party (the
"Indemnitor") in writing of any claim in respect of which the Indemnitee intends
to claim such indemnification, and the Indemnitor shall have sole control of the
defense and/or settlement thereof, provided that the indemnified Party may
participate in any such proceeding with counsel of its choice at its own
expense. The indemnity agreement in this Article 7 shall not apply to amounts
paid in settlement of any Claim if such settlement is effected without the
consent of the Indemnitor, which consent shall not be withheld unreasonably. The
failure to deliver written notice to the Indemnitor within a reasonable time
after the commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability to the
Indemnitee under this Article 7 but the omission so to deliver written notice to
the Indemnitor shall not relieve the Indemnitor of any liability that it may
have to any Indemnitee other than under this Article 7. The Indemnitee under
this Article 7, its employees and agents, shall cooperate fully with the
Indemnitor and its legal representatives and provide full information in the
investigation of any Claim covered by this indemnification. Neither Party shall
be liable for any costs or expenses incurred by the other Party without its
prior written authorization.
8. REPRESENTATIONS AND WARRANTIES
8.1 Each Party. Each Party represents and warrants to the other (i) that
it has the legal power, authority and right to enter into this Agreement and to
perform its respective obligations under this Agreement; (ii) that it is not a
Party to any agreement or arrangement with any Third Party or under any
obligation or restriction which in any way limits or conflicts with its ability
to fulfill any of its obligations under this Agreement, (including without
limitation, the licenses granted in Article 4), and shall not enter into any
such agreement or arrangement during the term of this Agreement; (iii) each
employee or person engaged in the Collaboration on behalf of Roche or SGX has
entered into a written agreement which provides for the assignment to Roche or
SGX,
17
respectively, of all inventions and discoveries made by such employee or person
during the course of his or her employment or engagement with Roche or SGX.
8.2 Disclaimer. SGX and Roche specifically disclaim any guarantee that
the Collaboration will be successful, in whole or in part. EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED IN THIS AGREEMENT, ROCHE AND SGX MAKE NO REPRESENTATIONS AND
EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE SGX BACKGROUND
TECHNOLOGY, ROCHE BACKGROUND TECHNOLOGY, SGX MATERIALS, ROCHE MATERIALS OR
LICENSED COMPOUNDS, INCLUDING WITHOUT LIMITATION, ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR NON-INFRINGEMENT OF THE
INTELLECTUAL PROPERTY OR OTHER RIGHTS OF ANY THIRD PARTY.
8.3 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR COSTS OF SUBSTITUTE GOODS OR SERVICES, SPECIAL, CONSEQUENTIAL, INCIDENTAL,
OR INDIRECT DAMAGES (INCLUDING WITHOUT LIMITATION LOSS OF PROFIT) WHETHER OR NOT
THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH LOSS, HOWEVER CAUSED
AND ON ANY THEORY OF LIABILITY, ARISING OUT OF THIS AGREEMENT, PROVIDED HOWEVER,
THE PROVISIONS OF THIS SECTION WILL NOT APPLY TO BREACHES OF CONFIDENTIALITY
OBLIGATIONS UNDER THIS AGREEMENT. THESE LIMITATIONS SHALL APPLY NOTWITHSTANDING
ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY.
9. TERM AND TERMINATION
9.1 Term of the Agreement. The term of this Agreement shall commence on
the Effective Date and unless terminated earlier, will terminate upon the
expiration of the Royalty Term. Thereafter, the license shall be fully paid-up
and irrevocable.
9.2 Termination by Roche. After the expiry of the [...***...], Roche
shall have the right to terminate this Agreement in its entirety with
[...***...] ([...***...]) days prior written notice to SGX.
9.3 Termination for Cause. Upon any material breach of this Agreement by
either Roche or SGX (in such capacity the "Breaching Party"), the other Party
(in such capacity the "Non-Breaching Party") may terminate this Agreement by
ninety (90) days' written notice to the Breaching Party, specifying the material
breach. The termination becomes effective at the end of such ninety (90) day
period unless (i) the Breaching Party cures such breach during such ninety (90)
day period, or (ii) if such breach is not susceptible to cure within such ninety
(90) day period, the Breaching Party is diligently pursuing a cure (unless such
breach, by its nature is incurable, in which case this
***CONFIDENTIAL TREATMENT REQUESTED
18
Agreement may be terminated immediately). The Parties will use reasonable
efforts to work together to cure any breach.
9.4 Rights upon Termination for Material Breach. If the Non-Breaching
Party terminates this Agreement pursuant to Section 9.3:
(a) in the event that the Breaching Party is SGX the licenses
granted Roche under Section 4.1 will continue with respect to Early Lead Series'
developed prior to the effective date of termination, subject to the payment by
Roche of all amounts earned by SGX under Article 3 prior to the effective date
of termination and continued payment by Roche of amounts earned by SGX under
Article 3;
(b) in the event the Breaching Party is Roche the licenses granted
Roche under Section 4.1 will terminate concurrently.
9.5 Effect of Termination.
(a) Termination by Roche under 9.2. In case of a termination of
this Agreement by Roche in its entirety, Roche's rights and licenses under this
Agreement will terminate and the Parties will negotiate in good faith for a
period of [...***...] days, immediately following the notice of termination, (i)
at Roche's option, an agreement under which SGX would receive compensation from
Roche and would not develop and commercialize an Early Lead Series or
Collaboration Products developed therefrom, or (ii) the appropriate
consideration for a license grant (as described below) from Roche to SGX. In the
event that the Parties do not reach an agreement under subsection (i) above, SGX
will thereafter have the exclusive right to develop and commercialize Early Lead
Series and corresponding Collaboration Products alone or with Third Parties, and
Roche shall grant to SGX an exclusive, worldwide, royalty bearing license (with
the right to sublicense) under Roche's interest in any Patent Rights or Know How
owned or Controlled by Roche relating to such Early Lead Series and
corresponding Collaboration Products to the extent necessary to make, have made,
import, offer for sale and sell products.
(b) Accrued Rights and Obligations. Termination of this Agreement
for any reason shall not release any Party hereto from any liability which, at
the time of such termination, has already accrued to the other Party or which is
attributable to a period prior to such termination nor preclude either Party
from pursuing all rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement.
(c) Return of Confidential Information. Upon any termination of
this Agreement, SGX and Roche shall promptly return to the other Party or
destroy all Confidential Information received from the other Party, except to
the extent required to exercise any continuing rights of such Party (and in any
event, except one copy of which may be retained solely for archival purposes).
***CONFIDENTIAL TREATMENT REQUESTED
19
(d) Cross License. In the event of termination of this Agreement
by either Party pursuant to this Article 9, the licenses granted to SGX and
Roche in Section 4.2 shall terminate concurrently.
(e) Survival. The provisions of Articles 5, 6, 7, 8 and 10 and
Sections 3.3 - 3.11 shall survive the expiration or termination of this
Agreement for any reason..
9.6 Rights in Bankruptcy. All rights and licenses granted under or
pursuant to this Agreement by SGX and Roche are, and will otherwise be deemed to
be, for purposes of Section 365(n) of the United States Bankruptcy Code,
licenses of rights to "intellectual property" as defined under Section 101 of
the United States Bankruptcy Code. The Parties agree that the Parties, as
licensees of such rights under this Agreement, will retain and may fully
exercise all of their rights and elections under the United States Bankruptcy
Code. The Parties further agree that, in the event of the commencement of a
bankruptcy proceeding by or against a Party under the United States Bankruptcy
Code, the Party hereto that is not a Party to such proceeding will be entitled
to a complete duplicate of (or complete access to, as appropriate) any such
intellectual property and all embodiments of such intellectual property, which,
if not already in the non-subject Party's possession, will be promptly delivered
to it (a) upon any such commencement of a bankruptcy proceeding upon the
non-subject Party's written request therefor, unless the Party subject to such
proceeding continues to perform all of its obligations under this Agreement or
(b) if not delivered under clause (a) above, following the rejection of this
Agreement by or on behalf of the Party subject to such proceeding upon written
request therefor by the non-subject Party.
10 MISCELLANEOUS
10.1 Governing Law, Dispute Resolution and Arbitration.
(a) This Agreement and all acts and transactions pursuant hereto
and the rights and obligations of the Parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of Delaware,
without reference to rules of conflicts or choice of laws.
(b) Unless otherwise set forth in this Agreement, in the event of
any dispute in connection with this Agreement, such dispute shall be referred to
the respective executive officers of the parties designated below or their
designees, for good faith negotiations attempting to resolve the dispute. The
designated executive officers are as follows:
For SGX: CEO
For ROCHE: Head of Pharma Partnering
(c) Should the parties fail to agree within [...***...]
([...***...]) months after such dispute has first arisen, it shall be finally
settled by arbitration in accordance with the commercial arbitration rules of
the International Chamber of Commerce as in force at the
***CONFIDENTIAL TREATMENT REQUESTED
20
time when initiating the arbitration. Pre-trial discovery shall be conducted in
accordance with the arbitration rules of the ICC. The tribunal shall consist of
three arbitrators. The place of arbitration shall be New York City. The language
to be used shall be English.
10.2 Notices. Any notice required or permitted by this Agreement shall be
in writing and shall be sent by prepaid registered or certified mail, return
receipt requested, internationally recognized courier or personal delivery, or
by fax with confirming letter mailed under the conditions described above in
each case addressed to the other Party at the address shown below or at such
other address for which such Party gives notice hereunder. Such notice shall be
deemed to have been given when delivered:
If to SGX: Structural GenomiX, Inc.
10505 Roselle Street,
San Diego, CA 92121
Attn: Chief Executive Officer
Copy to: Corporate Counsel
If to Roche: F. Hoffmann-La Roche Ltd
attn.: Legal Department
Grenzacherstrasse 124
4070 Basel
Switzerland
With a copy to: Hoffmann-La Roche Inc.
attn.: Corporate Secretary
340 Kingsland Street
Nutley, New Jersey 07110
10.3 Force Majeure. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses (except for payment obligations)
on account of failure of performance by the defaulting Party if the failure is
occasioned by war, strike, acts of terrorism, fire, Act of God, earthquake,
flood, lockout, embargo, governmental acts or orders or restrictions, failure of
suppliers (including, without limitation, energy suppliers), or any other reason
where failure to perform is beyond the reasonable control and not caused by the
negligence, intentional conduct or misconduct of the nonperforming Party and the
nonperforming Party has exerted all reasonable efforts to avoid or remedy such
force majeure; provided, however, that in no event shall a Party be required to
settle any labor dispute or disturbance.
21
10.4 No Implied Rights. Only the rights granted pursuant to the express
terms of this Agreement shall be of any legal force or effect. No other rights
shall be created by implication, estoppel or otherwise.
10.5 Assignment. This Agreement shall not be assignable by either Party
to any Third Party hereto without the written consent of the other Party hereto,
except either Party may assign this Agreement, without such consent, to (i) an
Affiliate or (ii) an entity that acquires all or substantially all of the
business or assets of such Party to which this Agreement pertains, whether by
merger, reorganization, acquisition, sale, or otherwise. Any permitted assignee
shall assume all obligations of its assignor under this Agreement. Any purported
assignment or transfer in violation of this Section shall be void.
10.6 Partial Invalidity. If any provision of this Agreement is held to be
invalid by a court of competent jurisdiction, then the remaining provisions
shall remain, nevertheless, in full force and effect. The Parties agree to
renegotiate in good faith any provision held invalid and to be bound by the
mutually agreed substitute provision in order to give the most approximate
effect originally intended by the Parties
10.7 Independent Contractors. The relationship of Roche and SGX
established by this Agreement is that of independent contractors, and nothing
contained in this Agreement shall be construed to (i) give either Party the
power to direct or control the day-to-day activities of the other, (ii)
constitute the Parties as partners, joint venturers, co-owners or otherwise as
participants in a joint or common undertaking, or (iii) allow a Party to create
or assume any obligation on behalf of the other Party for any purpose
whatsoever.
10.8 No Waiver. No waiver of any term or condition of this Agreement
shall be valid or binding on either Party unless agreed in writing by the Party
to be charged. The failure of either Party to enforce at any time any of the
provisions of the Agreement, or the failure to require at any time performance
by the other Party of any of the provisions of this Agreement, shall in no way
be construed to be a present or future waiver of such provisions, nor in any way
affect the validity of either Party to enforce each and every such provision
thereafter.
10.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
22
10.10 Entire Agreement; Amendment. This Agreement, including the Exhibits
attached hereto, constitutes the entire agreement of the Parties with respect to
the subject matter hereof, and supersedes all prior or contemporaneous
understandings or agreements, whether written or oral, between Roche and SGX
with respect to such subject matter. No amendment or modification hereof shall
be valid or binding upon the Parties unless made in writing and signed by the
duly authorized representatives of both Parties.
IN WITNESS WHEREOF, the undersigned are duly authorized to execute this
Agreement on behalf of Roche and SGX as applicable.
F. HOFFMANN-LA ROCHE LTD
By: /s/ Rudolf W. Schaffner /s/ Melanie Frey Wick
----------------------------------------------
Name: Dr. Rudolf W. Schaffner Dr. Melanie Frey Wick
Legal Counsel
Title: Vice President, Head Licensing & Alliances
HOFFMANN-LA ROCHE INC.
By: /s/ Dennis E. Burns
----------------------------------------------
Name: Dennis E .Burns
Title: Vice President, Global Head of Business
Development
STRUCTURAL GENOMIX, INC.
By: /s/ M.G. Grey
----------------------------------------------
Name: M.G. Grey
Title: President
23
CONFIDENTIAL
EXHIBIT A - COLLABORATION PLAN
1. OVERALL GOAL
The goal of the SGX-Roche collaboration is to generate Early Lead Series that
inhibit [...***...] and have the potential to be optimized and developed into
[...***...]. The Plan involves applying SGX FAST(TM) technology to find novel
small molecule structures that reversibly inhibit [...***...], and meet the
criteria specified in Exhibit B).
This project will be initiated with a [...***...] screen of the SGX FAST(TM)
Fragment Library (using compound mixtures) against [...***...], in conjunction
with [...***...] screening of the fragment library ([...***...]). Fragments
identified from the [...***...] screen, and possibly the [...***...] screen,
will be prioritized for elaboration into unprecedented [...***...].
2. OVERVIEW OF THE FAST(TM) PROCESS
FAST(TM) begins with the establishment of robust methods for co-crystallization
and soaking to enable screening of the FAST(TM) fragment library against the
target. In addition, [...***...] assays for the target are developed, to enable
screening for very weaK binders (screen for [...***...] @ [...***...]), and to
allow for determination of [...***...] values for more potent elaborated
compounds.
Once the crystal soaking methods and [...***...] assays are [...***...],
[...***...], SGX, the FAST(TM) fragment library is screened. This includes both
a [...***...] screen of fragment mixtures ([...***...] fragments [...***...]),
plus a [...***...] screen of individual compounds to identify weak binders at
high ligand concentrations ([...***...]). Fragments identified as binding at the
active site, or a specific remote site on the target protein are then reviewed
and selected for elaboration, using criteria such as [...***...], [...***...],
[...***...], [...***...] and [...***...], and "[...***...]" in terms of chemical
elaboration.
The FAST(TM) Fragment library is a collection of ~1000 diverse low molecular
weight compounds that represent ring systems typically found in drugs and
drug-like molecules. These fragments have been selected using specific
"lead-like" criteria, including:
- [...***...]
- [...***...] or [...***...]
- [...***...]
- [...***...] for [...***...], [...***...], [...***...], [...***...],
[...***...].)
Each member of the FAST(TM) fragment library is amenable to rapid chemical
elaboration at two or three sites to provide access to enormous potential
chemical diversity using parallel organic synthesis. Initial fragment
elaboration involves using knowledge of the structure of the [...***...] and
advanced [...***...] tools ([...***...], [...***...], [...***...], [...***...])
to guide synthesis of small, focused linear (one-dimensional) libraries. These
linearly elaborated fragments are then evaluated with [...***...] assays and
[...***...] analyses to provide a set of compounds with enhanced activity and
SAR. Thereafter, optimal variations at each point of chemical diversity are
combined to synthesize focused
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combinatorial (two- or three-dimensional) libraries that are again evaluated
with assays and [...***...]. These focused combinatorial libraries typically
contain multiple novel compounds of low molecular weight ([...***...]) that bind
the target protein with [...***...] values and considerable selectivity. The
deliverables from this process are compounds with defined lead-like properties,
target activity, SAR, selectivity profiles, and co-crystal structures. The
identified compounds can be further elaborated via parallel synthesis or
medicinal chemistry optimization to provide more optimized lead series. The
leads or lead series can be profiled and advanced based on cellular or
functional assays, animal efficacy models, in vitro and in vivo ADME and in
vitro toxicology studies in concert with structural information.
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FIGURE 1. [...***...]
[...***...]
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3. FAST(TM) APPLIED TO [...***...]
SGX and Roche will collaborate on the discovery of Early Leads Series (see
Exhibit B for definition) against [...***...]. The crystal structure of
[...***...] has been determined by several research groups, including the
[...***...]. At least [...***...] potential inhibitory binding sites are present
on the surface of the enzyme: the [...***...]. At present, all [...***...] of
these potential inhibitor binding sites are of interest for drug discovery.
Information gained from this collaboration, or from other sources, may modify
that assumption. Prioritization of the fragment selection and elaboration for
the various sites will occur through discussions with the Joint Steering
Committee (JSC) and/or the Project Team throughout the course of the
collaboration.
SGX will apply its experience and expertise in high-throughput crystallographic
studies of protein-ligand complexes and integrated small molecule design and
discovery to rapidly identify Early Lead Series against [...***...]. Roche will
contribute specific expertise and experience, including [...***...],
[...***...], [...***...], [...***...], [...***...], [...***...].
3.1 TIMELINE
The projected timeline for the FAST(TM) project directed against [...***...] is
[...***...] months (as illustrated in Figure 1), with the goal of identifying
one or more Early Lead Series as defined in Exhibit A.
3.2 SUMMARY OF RESPONSIBILITIES
[...***...]
3.3 FAST(TM) TARGET SELECTION AND FAST(TM) READINESS
3.3.1 Protein Production and Crystallography
Roche will provide purified [...***...] protein, crystallization/soaking
protocols, and relevant [...***...] assay methods and information, to facilitate
initiation of the [...***...] FAST(TM) campaign. It is anticipated that protein
supply and crystallization conditions will be sufficiently robust to support the
FAST(TM) effort, which could require [...***...] crystals. Roche will provide
[...***...] of [...***...] at the initiation of the collaboration, which is
anticipated to yield [...***...]. Roche will provide [...***...] as requested by
the JSC and/or Project Team. The first step
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for SGX in the project will be to reproduce [...***...] system and determine a
[...***...] at [...***...]. SGX will develop appropriate crystallization,
co-crystallization, soaking and mixture soaking methods in-house to enable
[...***...]. Activities will include:
- - Reproduce [...***...] conditions
- - Verification of [...***...],[...***...]
- - Verification of [...***...]
- - Development and optimization of [...***...]
3.3.2 Biochemistry
Roche will provide protocols and know how to support SGX in establishing a
[...***...] assay ([...***...] template) for [...***...] to permit [...***...]
screening of the fragment library at high concentration ([...***...]) and
subsequent fragment elaboration. SGX will perform assays at either a [...***...]
location that permits use of [...***...] or at [...***...]. If assays are
performed at [...***...], [...***...] will provide access to the necessary
laboratory space and equipment and will facilitate the execution of the
necessary documentation to permit an [...***...] employee or employees to
conduct experiments within the [...***...] facilities. [...***...] will be
responsible for all personnel expenses related to conducting experiments at
[...***...] facilities.
3.3.3 Reference and Control Samples:
As requested by the JSC and/or Project Team, Roche will provide appropriate
amounts of specified public [...***...] for use in crystallization methods
development and assay development and validation.
3.4 IDENTIFICATION OF INITIAL FRAGMENT HITS
- - Crystallographic and biochemical screening of the SGX FAST(TM) Fragment
library against [...***...] will be performed to provide initial Fragments
for elaboration. A report containing results from the screen will be
generated for review by the JSC and/or Project Team.
- - Fragments may be identified as binding to multiple different sites on
[...***...]. SGX will recommend the selection of up to [...***...] Initial
Fragment Hits ([...***...]), present the recommendation rationale to the
JSC and/or Project Team for endorsement, and SGX will generate plans to
elaborate these fragments. The [...***...] Fragments will be distributed
across the potential inhibitor binding sites (up to 3 sites). The
elaboration plans will be reviewed by the JSC and/or Project Team and
prioritized if necessary.
- - SGX will conduct the following studies as needed: (1) [...***...] for
[...***...] from [...***...], [...***...] in the [...***...], (2)
[...***...] for [...***...], [...***...] in the [...***...].
- - Based upon the success of the initial screen and identified set of
fragments and discussion with the JSC and/or Project Team, Roche may
request [...***...] of the [...***...], or may request that a [...***...].
3.5 IDENTIFICATION OF ELABORATED FRAGMENTS
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- - The selected Initial Fragment Hits are computationally elaborated into
virtual libraries with each [...***...] combination being elaborated
independently to provide "linear libraries". The enumerated libraries are
subjected to the SGX proprietary docking and scoring process (AGILE).
The AGILE process involves:
1. Enumerating all possible [...***...] from [...***...] at each
"[...***...]".
2. Generating all [...***...] of each [...***...] in the context of the
[...***...] and [...***...], based on the observed [...***...] of
the [...***...].
3. [...***...] each [...***...] in the context of the [...***...].
4. [...***...] with [...***...] ([...***...]) [...***...] or
[...***...] ([...***...]).
5. Scoring [...***...] with [...***...] and prioritizing them for
synthesis.
- - The target library for the first round of synthesis is typically
[...***...] compounds for each [...***...] that is elaborated.
- - SGX will synthesize these small parallel libraries of Linear Elaborated
Fragments, one library per "[...***...]", using the computationally
selected fragments (i.e., for a fragment with [...***...] "[...***...]",
[...***...] small libraries will be synthesized, [...***...] at each
position - approximately [...***...] compounds per library).
- - SGX will perform co-crystal structure determinations for selected Linear
Elaborated Fragments.
- - Assays will be performed as described in 3.8 below.
3.6 MULTIPLY ELABORATED FRAGMENTS (EARLY LEADS)
- - Based on the results from the characterization of Linear Elaborated
Fragments, with the guidance of the JSC and/or Project Team, SGX will
generate plans for the second stage of fragment hit elaboration (Multiply
Elaborated Fragments). The effort will focus on elaboration of inhibitors
targeting a [...***...] (unless the JSC elects to the contrary) and will
involve multiple elaborations of [...***...] Fragments. Via the JSC,
[...***...] of any potential overlap of [...***...].
- - SGX will computationally select (using the AGILE process described above)
combinations of active Linear Elaborated Fragments for [...***...] of
[...***...] ([...***...]) to design small, focused combinatorial
libraries, for which [...***...] or [...***...] are [...***...]
(approximately [...***...] compounds per library).
- - SGX will synthesize small combinatorial libraries using parallel
synthesis.
- - SGX will perform co-crystal structure determinations for selected Multiply
Elaborated Fragments.
- - Assays will be performed as described in 3.8 below
- - Depending on the results from these first Multiply Elaborated Libraries,
it is anticipated that an additional round of elaboration/optimization
will be performed (typically on [...***...] fragment scaffolds) to provide
improved candidates for Early Lead Series.
3.7 OPTIMIZATION TO EARLY LEADS
- - As determined by the JSC and/or Project Team, additional optimization will
be undertaken in order to obtain an Early Lead Series meeting the target
criteria in Exhibit B.
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- - Planswill be generated using a combination of structure based design and
parallel synthesis, with additional consideration of properties and
medicinal chemistry design to address any identified liabilities of the
Early Lead Series. This effort may include [...***...] of smaller
[...***...] with [...***...] and/or [...***...]. Design efforts will
continue to draw on data from co-crystal structures of Elaborated
Fragments.
- - Via the JSC and/or Project Team, [...***...] of any potential overlap of
[...***...].
- - SGX will prepare the representative members of the Early Lead Series and
provide [...***...] (up to [...***...]) to Roche. Note: prior to this
point, SGX will typically provide [...***...] ([...***...] at [...***...]%
[...***...]) to Roche for [...***...].
- - SGX will conduct a [...***...] search around Early Lead series.
- - The JSC will review [...***...] and compounds/series will be nominated as
Early Lead Series meeting the defined criteria described in Exhibit B.
3.8 ASSAY RESPONSIBILITIES AND PROGRAM SCREENING CASCADE
The Project Team will establish a [...***...] as a general guide for assay
responsibilities of the parties. The cascade will take the following guidelines
into account:
- SGX will be responsible for [...***...] assays for compounds with
[...***...].
- Roche will be responsible for [...***...] assays at biochemical
compound [...***...]. Turn around on [...***...] assays performed at
Roche is expected to be [...***...] weeks after sample receipt.
Roche may choose to perform [...***...] assays on compounds with
[...***...], but shall have no obligation to do so.
- Roche will perform [...***...] assays for compounds with biochemical
compound [...***...] and [...***...] of [...***...]. Turn around on
the [...***...] assays performed at Roche is expected within
[...***...] from sample receipt. Roche may choose to perform
[...***...] assays on compounds with > [...***...], but shall have
no obligation to do so. [...***...]
- Turnaround time on all other assays performed by Roche, in
accordance with the Program Screening Cascade, is expected to be
[...***...] from sample receipt.
3.9 COMPOUND SHIPMENT
SGX will use best efforts to schedule compound shipments on days that are
compatible with Roche practices for compound acceptance and registration.
3.10 TRANSFER OF DATA AND INFORMATION
- - SGX will transfer all reduced [...***...] ([...***...]) collected on
[...***...] crystals and associated [...***...] ([...***...]) to Roche in
electronic format. Transfer of [...***...] data will be timely to allow
assessment of ongoing crystallographic effortS.
- - All assay data generated by SGX or Roche will be shared with the other
party in a format and within defined time to be determined by the JSC
and/or Project Team.
- - A mutually acceptable mechanism for electronic data sharing will be
established (e.g. a shared drive) by the Project Team.
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RELATED LITERATURE
1. [...***...]. [...***...]. [...***...].
2. [...***...]. [...***...] et. al., [...***...] [...***...].
3. [...***...]. [...***...].
4. [...***...]. [...***...], et. al., [...***...].
5. [...***...]. [...***...], et. al., [...***...], 32 pp.
6. [...***...]. [...***...] et. al., [...***...].
7. [...***...]. [...***...], et. al , [...***...].
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EXHIBIT B - COMPOUND CRITERIA
Definition: Early Lead Series
A prototypical [...***...] or [...***...] that demonstrate activity and
selectivity in the relevant [...***...] and can form the basis a [...***...]
effort. A lead series has a distinct [...***...] and provides a [...***...] that
can form the basis for a [...***...] position.
1) EARLY LEAD SERIES CRITERIA
- - Representative members of the [...***...] have been [...***...] and
[...***...] and [...***...].
- [...***...] have been [...***...] and [...***...]
- [...***...] for [...***...] are [...***...]
- - Representative members of the [...***...] the [...***...] in the
[...***...] ([...***...]).
- - [...***...] demonstrates [...***...] in the [...***...] ([...***...])
- [...***...].
- [...***...] toward [...***...] has been assessed with relevant
[...***...].
- - [...***...] assessed (i.e. [...***...], [...***...], [...***...]).
- - [...***...] issues assessed, [...***...] is [...***...]
2) [...***...] (TESTING TO BE PERFORMED BY [...***...])
- Specific criteria should be met for a representative set of
[...***...] within the [...***...]; [...***...] is required to meet
all the specified criteria.
- [...***...] to have ability to revise certain criteria as the
project progresses
- [...***...] to have the ability to determine that the [...***...]
has been met in certain circumstances where all criteria may not
have been reached.
1. [...***...]; [...***...]
2. [...***...], [...***...] ([...***...])
[...***...]
[...***...] (to be [...***...] to [...***...] for [...***...])
3. [...***...], [...***...]
[...***...]
4. [...***...] ([...***...]), [...***...]
[...***...]
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5. [...***...] ([...***...]), [...***...] [...***...]
6. a) [...***...]; [...***...]% [...***...]
[...***...]
or
b) [...***...] ([...***...]) [...***...]
7. [...***...]
[...***...], [...***...], [...***...], [...***...]
8. [...***...]
[...***...] ([...***...])
9. [...***...]
[...***...] ([...***...])
10. [...***...]
11. [...***...] with [...***...]
[...***...]
12. [...***...]
[...***...]
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PROPOSED TIMELINE
[...***...]
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