Exhibit 1.24
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Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
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Confidential 11/15/00
MEMORANDUM OF UNDERSTANDING
This Memorandum of Understanding ("MOU") is made as of this 15th day of
November, 2000 by and among AltaRex Corp., an Alberta, Canada company, having
U.S. offices at 610 Lincoln Street, Waltham, MA, USA (hereinafter "AltaRex") and
Dompe Farmacutici S.p.A., an Italian company, having offices at Via San Martino,
12, 20122, Milano, Italy (hereinafter "Dompe"). This MOU replaces and supercedes
in its entirety the MOU between AltaRex and Dompe dated November 10, 2000.
The purpose of this MOU is to set forth the mutual understanding of AltaRex and
Dompe (the "Parties") regarding the terms of a Collaboration and Distribution
Agreement between the two companies by which Dompe will act as exclusive
distributor for AltaRex's OvaRex(TM) MAb (the "Product") in Italy, Switzerland,
Austria, Spain, Portugal, the Republic of San Marino, the State of the Vatican
City and certain Eastern European countries (Ukraine, Belarus, Hungary, Poland,
Czech Republic, Yugoslavia, Lithuania, Estonia and Latvia) (the "Territory") as
well as provisions for investments in Common Shares of AltaRex. The Parties will
further enter into discussions regarding the possible inclusion of Russia into
the Territory for a period not to exceed 120 days from the date of the signing
of this MOU, during which period AltaRex will not discuss with others the
licensure of Product for Russia.
This MOU is a binding commitment with respect to the investment provisions as
outlined in Section 9. Further, this MOU is intended to provide a general
framework for a more detailed Distribution Agreement (the "Agreement"). The
Parties agree to work together in good faith in order to complete such an
Agreement within 90 days of signing of this MOU.
1. DISTRIBUTION AGREEMENT
AltaRex hereby grants Dompe exclusive distribution rights for the Product in the
Territory. AltaRex also grants to Dompe a Right of First Offer ("ROFO") for the
Territory to enter into negotiation over a ninety day period on each additional
antibody for cancer ("Other Products") when each antibody enters Phase II
clinical trials in the United States or Europe. At the moment, Other Products
refer to BrevaRex(R), AR54, ProstaRex(TM) and GivaRex(TM) antibodies.
Pursuant to this agreement between Dompe and AltaRex, Dompe will commercialize
the Product either directly or indirectly in the Territory. Dompe shall also be
responsible for obtaining pricing authorization from the Italian authorities and
shall make reasonable efforts to obtain a price consistent with other worldwide
pricing policies and practices for the Product at the time regulatory approval
is obtained by AltaRex. In establishing a price in Italy, Dompe shall advise
AltaRex and its other partners of its discussions with Italian authorities.
2. CLINICAL DEVELOPMENT
Upon the availability of cell culture-produced OvaRex(TM) MAb, AltaRex will
supply, [**] to Dompe, sufficient OvaRex(TM) MAb for a [**] patient trial of the
Product to be conducted in the Territory. Such trial (either as a separate trial
or as part of a multicenter, multinational trial) shall be conducted by Dompe
using a protocol supplied by AltaRex and agreed upon by the Parties.
Confidential Page 2 11/15/00
Any and all other costs for such trial will be borne exclusively by Dompe. The
data resulting from such trial, and any other pertinent information thereto,
will be the property of AltaRex.
Dompe shall be given access to clinical and other data available to AltaRex and
its other licensees and other resellers, to the extent such data may be useful
in order to obtain required pricing approval in the Territory and for marketing
purposes.
3. TERM OF THE AGREEMENT
The initial term of the Agreement shall be ten (10) years starting from the
commercialization date of the Product. Thereafter, the Agreement will provide
for automatic 24 month renewals (each 24 month renewal an "Extension Term")
unless either Party gives the other written notice of its intention not to renew
the Agreement, provided that either Party gives notice of its intention not
later than 24 months prior to the expiration of the initial term or not later
than 12 months prior to the expiration of any Extension Period.
4. ORDERING AND FORECASTING
Upon the granting or marketing authorization in the Territory, Dompe shall
submit to AltaRex a forecast containing the unit volume of Product to be ordered
over the following 12 months for each country of the Territory. This forecast
will be updated quarterly and provided to AltaRex within 10 working days of the
beginning of each quarter. Irrevocable purchase orders for the Product shall be
placed not less than 3 months in advance of the required delivery date.
5. PURCHASE MINIMUM
During each year of the Agreement, Dompe agrees to purchase a designated number
of units ("Purchase Minimum") of the Product. The Purchase Minimum shall be
based on the registration of the Product by the Ministry of Health ("MOH") as
either a Class A drug (no prescribing limitations) or Class H drug (prescribing
limitations). If the Product is registered as a Class B or Class C drug, the
Parties shall negotiate in good faith a revised Purchase Minimum. During
contract years 1 through 3 the Purchase Minimum shall equal [**]% of the amount
set forth in a schedule to be defined by the Parties and attached to the final
Agreement as Appendix A.
6. REGULATORY APPROVAL
AltaRex at its own cost will be responsible for obtaining marketing
authorization in the Territory. Dompe shall furnish assistance to AltaRex in its
efforts to obtain marketing approval from the MOH. AltaRex and Dompe shall
cooperate fully with each other in submitting and prosecuting such applications
including a co-ordinated approach with Dompe for achieving an accelerated
approval in Italy.
7. PURCHASE PRICE
AltaRex will sell each unit of Product to Dompe for an amount equal to [**]
percent ([**]%) of the ex-factory reimbursed price for the Product established
by applicable government authorities
Confidential Page 3 11/15/00
in each market. If the ex-factory reimbursement price is lower than the expected
$[**] by an amount exceeding 10%, the Parties will negotiate an appropriate
solution in good faith. If, AltaRex has accepted a lower price in any European
Economic Community (EEC) country, Dompe will be able to commercialize the
Product in the Territory at that lower ex-factory reimbursement price.
8. MILESTONE PAYMENTS
Dompe agrees to pay to AltaRex U.S. $1.0 million upon the first
commercialization (marketing approval and reimbursement without restriction for
either the "watchful waiting" or the recurrent disease indication) of OvaRex(TM)
MAb in Spain and U.S. $0.250 million upon a similar commercialization approval
and reimbursement in Portugal.
9. INVESTMENT IN ALTAREX CORP. PUBLIC EQUITY
Simultaneous with the signing of this MOU, Dompe will pay to AltaRex a total of
U.S. $5,000,000 to buy Common Shares of AltaRex on a Private Placement basis at
the price of Canadian $0.55 (Canadian $2.20 post-consolidation), the closing
price of AltaRex shares on the Toronto Stock Exchange as of the end of day
Thursday, November 9, 2000. Shares purchased under the Private Placement will be
subject to 180 day lock-up period, the completion of a Subscription Agreement, a
Private Placement Questionnaire and Undertaking and a Personal Information Form
all of which must be signed by Dompe by 5:00 PM Boston time, Tuesday November
21, 2000. The funds will be held in escrow pending appropriate approval by
regulatory authorities in Canada. Dompe hereby represents and warrants to
AltaRex that such shares will be purchased by Dompe for investment purposes and
not for resale or distribution.
10. ADDITIONAL INVESTMENT IN ALTAREX CORP.
As a result of, and with the execution of the aforementioned purchase of Common
Shares, Dompe will have the option to purchase up to an additional US $5,000,000
in AltaRex Common Shares upon the listing of such shares on the NASDAQ or a
similar exchange in the United States in a separate private placement at a [**]%
discount to other potential investors at such time, subject to appropriate
regulatory approval. Such investment will be subject to any and all restrictions
imposed by applicable securities laws.
Confidential Page 4 11/15/00
IN WITNESS WHEREOF, the Parties have caused this MOU to be executed by their
duly authorized officers.
DOMPE
By: /s/ Sergio Dompe Date: November 15, 2000
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Print name and title: Sergio Dompe, Chief Executive Officer
ALTAREX CORP.
By: /s/ Richard E. Bagley Date: November 15, 2000
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Print name and title: Richard E. Bagley, President & Chief Executive Officer