CONFIDENTIAL TREATMENT REQUESTED
Exhibit 10.4
RESEARCH COLLABORATION
AND LICENCE AGREEMENT
BY AND BETWEEN
ASTRAZENECA UK LIMITED
AND
AVANIR PHARMACEUTICALS
(i)
TABLE OF CONTENTS
1 DEFINITIONS.......................................................... 1
2 CONSTRUCTION......................................................... 17
3 GRANT OF RIGHTS...................................................... 17
4 CONFIRMATORY PATENT LICENCES......................................... 22
5 THE RESEARCH COLLABORATION........................................... 23
6 MANAGEMENT OF THE RESEARCH COLLABORATION............................. 27
7 REPORTS.............................................................. 37
8 DEVELOPMENT PROJECT.................................................. 38
9 RESEARCH FUNDING..................................................... 41
10 CONSIDERATION........................................................ 43
11 REIMBURSEMENT OF DEVELOPMENT STOCK AND PRE-CLINICAL STUDIES.......... 57
12 OWNERSHIP OF INTELLECTUAL PROPERTY................................... 60
13 ADVERSE EVENT REPORTING.............................................. 62
14 CONFIDENTIALITY & NON-DISCLOSURE..................................... 62
15 TRADEMARKS........................................................... 67
16 REPRESENTATIONS, WARRANTIES AND COVENANTS............................ 68
17 INDEMNITY............................................................ 72
18 MAINTENANCE AND PROSECUTION OF PATENTS............................... 77
19 ENFORCEMENT OF PATENTS............................................... 81
20 POTENTIAL THIRD PARTY RIGHTS......................................... 83
21 TERM AND TERMINATION................................................. 86
22 FORCE MAJEURE........................................................ 96
23 ASSIGNMENT........................................................... 97
24 SEVERABILITY......................................................... 99
(ii)
25 GOVERNING LAW; DISPUTE RESOLUTION.................................... 99
26 INTERPRETATION OF CERTAIN EVIDENCE................................... 100
27 NOTICES.............................................................. 101
28 RELATIONSHIP OF THE PARTIES.......................................... 102
29 ENTIRE AGREEMENT..................................................... 102
30 ENGLISH LANGUAGE..................................................... 102
31 AMENDMENT............................................................ 103
32 WAIVER AND NON-EXCLUSION OF REMEDIES................................. 103
33 EQUITABLE RELIEF..................................................... 103
34 FURTHER ASSURANCE.................................................... 104
35 EXPENSES............................................................. 104
SCHEDULES
Research Plan Schedule 1
Licensed Know-How Schedule 2
IND Filing Plan Schedule 3
Licensed Patents and Applications Schedule 4
Confirmatory Patent Licenses Schedule 5
Key Personnel and AstraZeneca Principal Scientist Schedule 6
Press Release Schedule 7
Page 1 of 1
CONFIDENTIAL TREATMENT REQUESTED
RESEARCH COLLABORATION AND LICENCE AGREEMENT
This Research Collaboration and Licence Agreement (the "Agreement") is made
effective as of the 8th day of July 2005 (the "Effective Date") by and between:
(1) ASTRAZENECA UK LIMITED, a company incorporated in England whose registered
office is at 15 Stanhope Gate, London, WIK 1LN, England ("ASTRAZENECA");
and
(2) AVANIR PHARMACEUTICALS, a company incorporated in California, with offices
at 11388 Sorrento Valley Road, Suite 200, San Diego, CA 92121, USA
("AVANIR").
RECITALS
(A) WHEREAS, Avanir is engaged in research regarding reverse cholesterol
transportation involving reverse cholesterol transport promotors, and
Avanir has in the course thereof developed the AVP 26452 Compound and the
Back-Up Compounds (as such terms are defined below); and
(B) WHEREAS, AstraZeneca and its Affiliates have specialised experience in,
among other things, the research, development, manufacturing and
commercialisation of pharmaceutical compounds worldwide; and
(C) WHEREAS, the Parties wish to engage in a research collaboration utilising
the Parties' respective knowledge, skills and proprietary technology to
develop the Back-Up Compounds or Collaboration Compounds (as defined below)
up to the selection of Candidate Drug (as defined below); and
(D) WHEREAS, the Parties wish AstraZeneca to be responsible, as a general
matter, for clinical development and commercialisation of the AVP 26452
Product (as defined below); and
(E) WHEREAS, the Parties wish AstraZeneca, after the selection of Candidate
Drug, to be responsible for developing and commercialising the Licensed
Products (as defined below); and
Page 1 of 104
CONFIDENTIAL TREATMENT REQUESTED
(F) WHEREAS, the Parties wish to collaborate as set forth above, and Avanir
desires to grant a licence to AstraZeneca, and AstraZeneca desires to take
a licence, to develop and commercialise the Licensed Products, in
accordance with the terms and conditions set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties, intending to be
legally bound, agree as follows:
1 DEFINITIONS
Unless otherwise specifically provided herein, the following terms, when
used with a capital letter at the beginning, shall have the following
meanings:
1.1 "AFFILIATE" means, with respect to a Person, any Person that controls, is
controlled by or is under common control with, such first Person. For
purposes of this definition only, "control" means (a) to possess, directly
or indirectly, the power to direct the management or policies of a Person,
whether through ownership of voting securities, by contract relating to
voting rights or corporate governance or otherwise, or (b) to own, directly
or indirectly, more than fifty percent (50%) of the outstanding voting
securities or other voting ownership interest of such Person.
1.2 "ANNUAL NET SALES" means the Net Sales made during a given Calendar Year.
1.3 "APPLICABLE LAW" means the applicable laws, rules and regulations,
including any rules, regulations, guidelines or other requirements of the
Health Authorities, that may be in effect from time to time in the
Territory.
1.4 "ASTRAZENECA BACKGROUND TECHNOLOGIES" means any (a) Information, discovery,
invention, products, cultures, biological materials and other materials and
compositions (including Collaboration Materials provided by AstraZeneca to
Avanir hereunder), owned or Controlled by AstraZeneca or its Affiliates at
the Effective Date or during the Collaboration Term and introduced at its
sole discretion to Avanir under the Research
Page 2 of 104
CONFIDENTIAL TREATMENT REQUESTED
Collaboration by AstraZeneca or its Affiliates and (b) IP Protection Rights
pertaining to any of the foregoing.
1.5 "ASTRAZENECA IMPROVEMENTS" means all Results that constitute Improvements
to the AstraZeneca Background Technologies.
1.6 "ASTRAZENECA PATENTS" means Patents with respect to AstraZeneca
Improvements.
1.7 "ASTRAZENECA INFORMATION" has the meaning set forth in Section 14.1.2.
1.8 "ASTRAZENECA PRINCIPAL SCIENTIST" means the principal scientist designated
by AstraZeneca to be responsible for all Research Collaboration activities
undertaken by AstraZeneca and serving as the primary contact for Avanir on
all matters related to the Research Collaboration. The AstraZeneca
Principal Scientist is listed in Schedule 6 hereto.
1.9 "AVANIR PRINCIPAL SCIENTIST" has the meaning defined in Section 5.2.
1.10 "AVP 26452 COMPOUND" means Avanir's proprietary compound referred to as AVP
26452 with the chemical structure set forth in item 1.3 of the Research
Plan and any metabolites, salts, esters, free acid forms, free base forms,
pro-drug forms, racemates and all optically active forms thereof.
1.11 "AVP 26452 PRODUCT" means products in final forms suitable for human,
veterinary or agricultural use that contain the AVP 26452 Compound as the
sole active ingredient.
1.12 "BACK-UP COMPOUND(S)" means any compound, other than the AVP 26452
Compound, and any metabolites, salts, esters, free acid forms, free base
forms, pro-drug forms, racemates and all optically active forms of such
compound covered or claimed by the Licensed Patents.
1.13 "BACK-UP PRODUCT" means products in final forms suitable for human,
veterinary or agricultural use that contain a Back-Up Compound as the sole
active ingredient.
1.14 "BREACHING PARTY" has the meaning set forth in Section 21.5.
1.15 "CALENDAR QUARTER" means each successive period of three (3) calendar
months commencing on 1st January, 1st April, 1st July and 1st October.
Page 3 of 104
CONFIDENTIAL TREATMENT REQUESTED
1.16 "CALENDAR YEAR" means each successive period of twelve (12) calendar months
commencing on 1st January.
1.17 "CANDIDATE DRUG" or "CD" means a Licensed Compound satisfying the relevant
pharmacological and pharmaceutical criteria for clinical testing
established by AstraZeneca at its sole discretion and selected by
AstraZeneca in its sole discretion as a candidate for clinical development
or, if not meeting such criteria, nevertheless is so selected by
AstraZeneca.
1.18 "***" has the meaning defined in Section 11.1.2.
1.19 "***" has the meaning defined in Section 11.1.2.
1.20 "CARDIOVASCULAR EVENTS" means stroke, myocardial infarction and
cardiovascular death.
1.21 "CHANGE OF CONTROL" with respect to any Person, means an event in which:
1.21.1 any other Person or group of Persons not then beneficially owning
more than fifty percent (50%) of the voting power of the outstanding
securities of such Person acquires beneficial ownership of securities
of such first Person representing more than fifty percent (50%) of the
voting power of the then outstanding securities of such first Person
with respect to the election of directors of such first Person; or
1.21.2 such Person enters into a merger, consolidation or similar
transaction with another Person and the holders of such first Person
do not hold a majority in interest of the voting securities of such
surviving entity immediately following such transaction.
1.22 "COLLABORATION COMPOUND" means any Hit, Lead or other compound, other than
the AVP 26452 Compound or the Back-Up Compounds, discovered, identified or
otherwise selected by AstraZeneca or the Parties jointly as a direct result
of Hit Optimisation or Lead Optimisation and any metabolites, prodrugs,
racemates, isomers, enantiomers, salts,
- ----------
*** Certain confidential portions of this Exhibit were omitted by means of
blackout of the text (the "Mark"). This Exhibit has been filed separately
with the Secretary of the Commission without the Mark pursuant to the
Company's Application Requesting Confidential Treatment under Rule 24b-2
under the 1934 Act.
Page 4 of 104
CONFIDENTIAL TREATMENT REQUESTED
esters and free acid forms of any of the foregoing, for which compound the
first application for a Joint Patent or an AstraZeneca Patent containing a
Valid Claim claiming the compound as a composition of matter is made
anywhere in the world within *** years from the expiration or termination
of the Collaboration Term.
1.23 "COLLABORATION PRODUCT" means products in final forms suitable for human,
veterinary or agricultural use that contain a Collaboration Compound as the
sole active ingredient.
1.24 "COLLABORATION MATERIALS" means any compounds, cells, cell lines, DNA and
RNA molecules, plasmids, proteins, crystals, coordinates, antibodies,
antibody coding DNA sequences, antibody coding expression vectors and
antibody expressing transfected cell lines and other materials and any
replications of any of the foregoing, that one Party provides to the other
Party to enable such Party to perform work under the Research
Collaboration; provided, however, that "Collaboration Materials" shall
exclude all Collaboration Results.
1.25 "COLLABORATION RESULTS" means Results that are discovered, conceived,
reduced to practice or otherwise generated through work performed under the
Research Collaboration, provided, however, that Collaboration Results shall
exclude all AstraZeneca Improvements.
1.26 "COLLABORATION TERM" has the meaning set forth in Section 21.2.
1.27 "COLLABORATION YEAR" means the twelve-month period starting on the
Effective Date and any immediately subsequent twelve-month period.
1.28 "COMBINATION PRODUCTS" means products in final forms suitable for human,
veterinary or agricultural uses that contain a Licensed Compound as an
active ingredient together with one or more other active ingredients that
are sold either as a fixed dose or as separate doses in a single package.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 5 of 104
CONFIDENTIAL TREATMENT REQUESTED
1.29 "COMMERCIALLY REASONABLE EFFORTS" means, with respect to the research,
development, Manufacture or commercialisation of a Licensed Compound or
Licensed Product, as the case may be, efforts and resources commonly used
in the research-based pharmaceutical industry for compounds or products
with similar commercial and scientific potential at a similar stage in
their lifecycle, taking into consideration their safety and efficacy, their
cost to develop, the competitiveness of alternative products, the
anticipated or, if applicable, actual claim structure and the nature and
extent of their market exclusivity (including Patent coverage and
regulatory exclusivity), the likelihood of regulatory approval, their
estimated profitability, including the amounts of marketing and promotional
expenditures with respect to the Licensed Products and Competing Products
and all other relevant factors. Commercially Reasonable Efforts shall be
determined on a market-by-market basis for each Licensed Compound and each
Licensed Product, as applicable; provided, however, that should what would
otherwise constitute Commercially Reasonable Efforts with respect to an
individual market conflict with, or otherwise not constitute, Commercially
Reasonable Efforts with respect to a group of markets out of which such
market is a part then Commercially Reasonable Efforts shall be determined
for such group of markets as a whole.
1.30 "COMPETING PRODUCT" has the meaning set forth in Section 10.5.1 a).
1.31 "COMPLAINING PARTY" has the meaning set forth in Section 21.5.
1.32 "CONFIDENTIAL INFORMATION" has the meaning set forth in Section 14.1.1.
1.33 "CONTROL" means, with respect to any item of Information, Patent or IP
Protection Right, possession of the right, whether directly or indirectly,
and whether by ownership, licence or otherwise, to assign, or grant a
licence, sublicence or other right to or under, such Information, Patent or
IP Protection Right as provided for herein without violating the terms of
any agreement or other arrangement with any Third Party.
1.34 "DEVELOPMENT PROJECT" means any activities hereunder by or on behalf of
AstraZeneca or its Affiliates outside of the Research Collaboration with
the aim of developing a Licensed Product.
Page 6 of 104
CONFIDENTIAL TREATMENT REQUESTED
1.35 "DEVELOPMENT REPORT" has the meaning set forth in Section 8.4.
1.36 "DEVELOPMENT RESULTS" means any and all Results not constituting
Collaboration Results or AstraZeneca Improvements.
1.37 "DISCLOSING PARTY" has the meaning set forth in Section 14.1.1.
1.38 "DISTRIBUTOR" has the meaning set forth in Section 3.4.
1.39 "EFFECTIVE DATE" has the meaning set forth in the preamble to this
Agreement.
1.40 "EUROPE" means the European Economic Area as it may be constituted from
time to time.
1.41 "EXPLOIT" means to make, have made, import, use, sell, or offer for sale,
including to research, develop, register, modify, enhance, improve,
Manufacture, have Manufactured, hold/keep (whether for disposal or
otherwise), formulate, optimise, have used, export, transport, distribute,
promote, market or have sold or otherwise dispose or offer to dispose of, a
product or process.
1.42 "EXPLOITATION" means the act of Exploiting a product or process.
1.43 "FDA" means the United States Food and Drug Administration and any
successor agency thereto.
1.44 "FIRST COMMERCIAL SALE" means the first sale for monetary value for use or
consumption by a member of the general public of a Licensed Product in a
country in the Territory after Health Registration Approval for the sale of
such Licensed Product has been obtained in such country. For the avoidance
of doubt, sales prior to ***, shall not be construed as a First Commercial
Sale.
1.45 "FORCE MAJEURE" has the meaning set forth in Section 22.1.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 7 of 104
CONFIDENTIAL TREATMENT REQUESTED
1.46 "FORCE MAJEURE PARTY" means a Party prevented or delayed in its performance
under this Agreement by an event of Force Majeure.
1.47 "FTE" means the equivalent of one (1) researcher being at least a graduate
or a similarly qualified employee of Avanir having the requisite skills to
fulfil Avanir's obligations under this Agreement and devoting the
equivalent hours of a full time employee. For purposes of this Agreement,
"full time" shall mean *** hours per Calendar Year as determined in
accordance with Avanir's regular project hour reporting system.
1.48 "FTE RATE" means the price of one (1) FTE per single Calendar Year. The FTE
Rate shall be *** U.S. Dollars ($***). The FTE Rate reflects the fully
burdened costs for an FTE. AstraZeneca shall not be responsible for any
Avanir ***, including *** costs, incurred in pursuit of the Research
Collaboration and the consultation services rendered by Avanir under this
Agreement, above and beyond the FTE Rate, or for ***.
1.49 "GRANT-BACK PATENTS" shall have the meaning set forth in Section 21.7.3.
1.50 "HEALTH AUTHORITY" means any applicable supra-national, federal, national,
regional, state, provincial or local regulatory agency, department, bureau,
commission, council or other government entity regulating or otherwise
exercising authority with respect to the Exploitation of Licensed Compounds
or Licensed Products in the Territory.
1.51 "HEALTH REGISTRATION APPROVAL" means, with respect to a country in the
Territory, any and all approvals, licences, registrations or authorisations
of any Health Authority necessary to commercially distribute, sell or
market a Licensed Product in such country, including, where reasonably
required to engage in such activities, (a) pricing or reimbursement
approval in such country, (b) pre- and post-approval marketing
authorisations (including any prerequisite Manufacturing approval or
authorisation related thereto), (c) labelling approval and (d) technical,
medical and scientific licences.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 8 of 104
CONFIDENTIAL TREATMENT REQUESTED
1.52 "HIT" means any compound identified under the Research Collaboration and
selected by the RCMC or by AstraZeneca, as applicable, as a candidate for
Hit Optimisation.
1.53 "HIT OPTIMISATION" means chemical structure modification performed as part
of the Research Collaboration or by or on behalf of AstraZeneca, as
applicable, starting from a Hit and aiming at the identification of
compounds with properties meeting the Lead criteria defined in the Research
Plan.
1.54 "IF" has the meaning set forth in Section 6.3.2.
1.55 "IMPROVEMENTS" means any improvements, adaptations, modifications or
upgrading, and any IP Protection Rights related thereto.
1.56 "IND" means an investigational new drug application filed with the FDA for
authorisation to commence human clinical trials in the U.S., and its
equivalent in other countries or regulatory jurisdictions in the Territory.
1.57 "INDEMNIFICATION CLAIM NOTICE" has the meaning set forth in Section 17.3.
1.58 "INDEMNIFIED PARTY" means a Party seeking to recover a Loss under Section
17.1 or 17.2.
1.59 "INDEMNIFYING PARTY" means a Party from whom recovery of a Loss is sought
under Section 17.1 or 17.2.
1.60 "INDEMNITEE" has the meaning set forth in Section 17.3.
1.61 "INDIRECT TAXES" means value added taxes, sales taxes, consumption taxes
and other similar taxes.
1.62 "INFORMATION" means all technical, scientific and other know-how and
information, trade secrets, knowledge, technology, means, methods,
processes, practices, formulae, instructions, skills, techniques,
procedures, experiences, ideas, technical assistance, designs, drawings,
assembly procedures, computer programs, apparatuses, specifications, data,
results and other material, including: the process and results of
high-throughput screening, gene expression, genomics, proteomics and other
drug discovery and development technology; biological, chemical,
pharmacological, toxicological,
Page 9 of 104
CONFIDENTIAL TREATMENT REQUESTED
pharmaceutical, physical and analytical, pre-clinical, clinical, safety,
manufacturing and quality control data and information, including study
designs and protocols; assays and biological methodology; Manufacturing and
quality control procedures and data, including test procedures; and
synthesis, purification and isolation techniques, (whether or not
confidential, proprietary, patented or patentable) in written, electronic
or any other form now known or hereafter developed, but excluding the
Regulatory Documentation.
1.63 "INFRINGEMENT SUIT" has the meaning set forth in Section 20.3.
1.64 "IP" has the meaning set forth in Section 21.10.
1.65 "IP PROTECTION RIGHTS" means any and all legal means of establishing rights
in and to ideas, inventions, discoveries, know-how, data, databases,
documentation, reports, materials, writings, designs, computer software,
processes, principles, methods, techniques and other information, including
Patents, trade marks, service marks, trade names, registered designs,
design rights, copyrights (including rights in computer software and
database rights) and any rights or property similar to any of the foregoing
in any part of the world, whether registered or not, together with the
right to apply for the registration of any such rights.
1.66 "JOINT EXECUTIVE COMMITTEE" or "JEC" means the joint committee established
by the Parties pursuant to Article 6.2.1.
1.67 "JOINT PATENTS" means Patents with respect to Collaboration Results.
1.68 "KEY PERSONNEL" has the meaning set forth in Section 5.2.
1.69 "KNOWLEDGE" means a Party's and its Affiliates' understanding in good faith
of the relevant facts and information resulting from the reasonable conduct
of its business affairs, but without the requirement of performing an
investigation with respect to any such facts and information.
1.70 "LEAD COMPOUND" or "LEAD" means a compound identified through Hit
Optimisation under the Research Collaboration or by AstraZeneca, as
applicable, that has been selected by the RCMC or AstraZeneca, whichever is
applicable, as a candidate for Lead Optimisation.
Page 10 of 104
CONFIDENTIAL TREATMENT REQUESTED
1.71 "LEAD OPTIMISATION" means chemical structure modification performed under
the Research Collaboration or by or on behalf of AstraZeneca, whichever is
applicable, starting from a Lead Compound and aiming at the identification
of compounds with properties meeting the relevant CD criteria established
by AstraZeneca at its sole discretion.
1.72 "LICENSED COMPOUNDS" means the AVP 26452 Compound, Back-Up Compound(s) and
Collaboration Compounds.
1.73 "LICENSED IMPROVEMENT" means, subject to the limitations set forth in the
next succeeding paragraph, any Improvement with respect to a Licensed
Compound or Licensed Product or relating to the Exploitation thereof
Controlled by Avanir or its Affiliates, not constituting a Development
Result, whether or not patentable, that is conceived, reduced to practice,
developed or discovered or otherwise made outside the Research
Collaboration during the term of this Agreement by or on behalf of Avanir
or its Affiliates or by the Parties or their respective Affiliates jointly,
or their respective employees and agents (whether alone or jointly with
others), or otherwise Controlled by Avanir or its Affiliates at any time
prior to and at the Effective Date or during any period in which
AstraZeneca owes royalties to Avanir pursuant to Section 10.2, and which
AstraZeneca has not rejected pursuant to Section 12.4.1.
An Improvement mentioned in the foregoing paragraph conceived, reduced to
practice, developed or discovered, otherwise made or otherwise Controlled
by or on behalf solely of Avanir or its Affiliates shall be deemed a
Licensed Improvement only to the extent it relates to the Licensed Patents
and to the extent such Improvement conceived, reduced to practice,
developed or discovered or otherwise made by or on behalf of Avanir or its
Affiliates, and not with AstraZeneca or its Affiliates, has application
outside such area it may be utilised by Avanir for any purpose other than
to (a) conduct any activity with, for the benefit of, or sponsored by, any
Person, that has as its goal or intent discovering,
Page 11 of 104
CONFIDENTIAL TREATMENT REQUESTED
identifying, Exploiting or otherwise commercialising products within *** or
their associated mechanisms, or (b) grant any licence or other rights to
any Person to utilise any IP Protection Rights Controlled by Avanir or its
Affiliates (including, for the avoidance of doubt, any Licensed Patents,
Licensed Know-How, Joint Patents or Collaboration Results) for the purpose
of discovering, identifying, Exploiting or otherwise commercialising
products within *** or their associated mechanisms.
1.74 "LICENSED KNOW-HOW" means the Information set out and described in Schedule
2, which is in the Control of Avanir or its Affiliates as of the Effective
Date, being Information that is not generally known and is necessary or
useful for the Exploitation of the Licensed Compounds or the Licensed
Products, including any Information with respect to Licensed Improvements,
as mentioned in Section 12.4.1, but excluding any Information to the extent
covered or claimed by the Licensed Patents.
1.75 "LICENSED PATENTS" means (a) all patent applications and patents set forth
in Schedule 4 hereto, (b) any Patents with respect to such patent
applications or patents, and (c) any Patents claiming or covering any
Licensed Improvements.
1.76 "LICENSED PRODUCTS" means the Products and the Combination Products.
1.77 "LOSSES" means any and all direct or indirect liability, damage, loss or
expense, including interest, penalties and lawyers' fees and disbursements.
In calculating Losses, the duty to mitigate on the part of the Party
suffering the Loss shall be taken into account.
1.78 "MAJOR MARKET" means (a) ***, (b) ***, or (c) ***.
1.79 "MANUFACTURE" and "MANUFACTURING" means, with respect to a product or
compound, the synthesis, manufacturing, processing, formulating, packaging,
labelling, holding and quality control testing of such product or compound.
1.80 "NET SALES" means the gross invoiced amount on sales of the Licensed
Products by AstraZeneca and its Affiliates to Third Parties (including
Distributors) after deduction of:
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 12 of 104
CONFIDENTIAL TREATMENT REQUESTED
(a) normal and customary trade, quantity or prompt settlement
discounts (including chargebacks and allowances) actually
allowed;
(b) amounts *** or *** by reason of *** determined by AstraZeneca or
its Affiliates in good faith and pursuant to standard industry
practice;
(c) *** and similar payments made with respect to *** such as, by way
of illustration and not in limitation of the Parties' rights
hereunder, ***;
(d) ***; and
(e) any other similar deductions that are actually credited to the
customer and are consistent with generally accepted accounting
principles, or in the case of non-United States sales, other
applicable accounting standards; and
(f) as an allowance for ***, *** percent (***%) of the amount arrived
at after the application of the provisions of items (a) to (e)
above.
Net Sales shall be calculated using AstraZeneca's internal, externally
audited, systems used to report such sales, which reporting is done in
accordance with International Accounting Standards (IAS) consistently
applied, as adjusted for any of items (a) to (f) above not taken into
account in such systems.
1.81 "NOTICE PERIOD" has the meaning set forth in Section 21.5.
1.82 "OTHER INDICATION" means a medical indication, other than (i) ***; or (ii)
***.
1.83 "PARTY" means either AstraZeneca or Avanir and "Parties" means both
AstraZeneca and Avanir.
1.84 "PATENTS" means (a) all national, regional and international patents and
patent applications, including provisional patent applications, (b) all
patent applications filed
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 13 of 104
CONFIDENTIAL TREATMENT REQUESTED
either from such patents, patent applications or provisional applications
or from an application claiming priority from either of these, including
divisionals, continuations, continuations-in-part, provisionals, converted
provisionals, and continued prosecution applications, (c) any and all
patents that have issued or in the future issue from the foregoing patent
applications ((a) and (b)), including utility models, petty patents and
design patents and certificates of invention, (d) any and all extensions or
restorations by existing or future extension or restoration mechanisms,
including revalidations, reissues, re-examinations and extensions
(including any supplementary protection certificates and the like) of the
foregoing patents or patent applications ((a), (b) and (c)), and (e) any
similar rights, including so-called pipeline protection, or any
importation, revalidation, confirmation or introduction patent or
registration patent or patent of additions to any such foregoing patent
applications and patents.
1.85 "PAYMENTS" has the meaning set forth in Section 10.15.1.
1.86 "PERSON" means a sole proprietorship, partnership, limited partnership,
limited liability partnership, corporation, limited liability company,
business trust, joint stock company, trust, unincorporated association,
joint venture or other similar entity or organisation, including a
government or political subdivision, department or agency of a government,
or an individual.
1.87 "PHASE II CLINICAL TRIAL" means either a) a clinical trial performed in
patients with the primary objective of establishing proof of concept,
assessing safety and tolerability or demonstration of a pharmacological
effect of a Licensed Product, or b) a clinical study performed in patients
to assess safety, tolerability and efficacy for the purpose of identifying
suitable doses for a Phase III Clinical Trial.
1.88 "PHASE III CLINICAL TRIAL" means a large scale, multi-centre, human
clinical trial (excluding dose ranging studies) to be conducted in a number
of patients estimated to be sufficient to primarily establish efficacy of a
Licensed Product in the claim of e.g. dyslipidemia or antiatherosclerosis
or any other claimed major medical indication and at a standard suitable to
obtain a Health Registration Approval in a Major Market.
Page 14 of 104
CONFIDENTIAL TREATMENT REQUESTED
1.89 "PRODUCTS" means the AVP 26452 Product, Back-Up Products and Collaboration
Products.
1.90 "RCMC" has the meaning defined in Section 6.1.1.
1.91 "RECEIVING PARTY" has the meaning set forth in Section 14.1.1.
1.92 "REGULATORY DOCUMENTATION" means all applications, registrations, licences,
authorisations and approvals (including all Health Registration Approvals),
all correspondence submitted to or received from Health Authorities
(including minutes and official contact reports relating to any
communications with any Health Authority) and all supporting documents and
all clinical studies and tests, relating to any Licensed Compounds or
Licensed Products, and all data contained in any of the foregoing,
including all IND applications, Health Registration Approvals, regulatory
drug lists, advertising and promotion documents, adverse event files and
complaint files.
1.93 "RESEARCH COLLABORATION" means the research collaboration outlined in the
Research Plan to be carried out during the Collaboration Term; provided,
however, that with respect to each individual Licensed Compound the
Research Collaboration shall cease on the date of AstraZeneca's selection
of such Licensed Compound as a Candidate Drug. For the avoidance of doubt,
(i) any research or development concerning the Licensed Compounds or the
Licensed Products beyond the Research Collaboration will be part of the
Development Project, and (ii) notwithstanding the fact that the Research
Collaboration may have ceased with respect to one or more Licensed
Compounds the Research Collaboration shall, unless terminated earlier in
accordance with the terms and conditions of this Agreement, continue for
the duration of the Collaboration Term.
1.94 "RESEARCH PLAN" means the research plan attached hereto as Schedule 1
outlining the Research Collaboration and each Party's undertakings and
obligations, including the allocation of Key Personnel and other FTEs by
Avanir, in relation thereto as may be amended from time to time in
accordance with Section 6.1.2.
1.95 "RESULTS" means ideas, inventions, discoveries, know-how, data,
documentation, reports, materials, writings, designs, computer software,
processes, principles, methods,
Page 15 of 104
CONFIDENTIAL TREATMENT REQUESTED
techniques and other information, recorded in any form, that are
discovered, conceived, reduced to practice or otherwise generated through
work performed under this Agreement by or on behalf of either Party or by
the Parties jointly, and any IP Protection Rights pertaining to any of the
foregoing.
1.96 "***" has the meaning defined in Section 11.1.1.
1.97 "***" has the meaning defined in Section 11.1.3.
1.98 "SUBLICENSEE" has the meaning set out in Section 3.3.
1.99 "SUCCESSFUL PROOF OF CONCEPT" means agreement of the Parties in writing
that there exists evidence of an effect (whether a clinical outcome or
other bio marker) indicating a high chance of achieving a result of a Phase
III Clinical Trial in an indication in which the Licensed Product concerned
could be expected to generate peak Annual Net Sales of at least *** U.S.
Dollars ($***), or initiation of the next step of clinical assessment by
AstraZeneca after having discovered such effect.
1.100 "SURROGATE MARKER" means a marker accepted by the Health Authority in a
Major Market as a substitute for showing a reduction of the risk of ***.
1.101 "TERRITORY" means all countries in the world, except for those countries
in which this Agreement is terminated pursuant to Sections 21.3, 21.4 or
21.5.
1.102 "THIRD PARTY" means any Person not including the Parties, the Parties'
respective Affiliates or Sublicensees.
1.103 "THIRD PARTY CLAIM" has the meaning set forth in Section 17.1.
1.104 "TRADEMARK" means any word, name, symbol, colour, designation or device or
any combination thereof, including any trademark, trade dress, brand mark,
trade name, brand name, logo or business symbol used by AstraZeneca in
connection with the Licensed Compounds or Licensed Products.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 16 of 104
CONFIDENTIAL TREATMENT REQUESTED
1.105 "TRIGGERING EVENT" has the meaning set forth in Section 20.1.
1.106 "UNITED STATES" or "U.S." means the United States of America, including
its territories, possessions and Puerto Rico.
1.107 "VALID CLAIM" shall mean, with respect to a Licensed Product in a
particular country, any claim of a Licensed Patent, a Joint Patent or an
AstraZeneca Patent that claims (i) the Licensed Compound included in such
Licensed Product as a composition of matter; (ii) the formulation of such
Licensed Product or (iii) a method related to, or a use of, the Licensed
Compound or Licensed Product; provided such claims were filed
contemporaneously with, or after, the claims described in clause (i) above;
and provided, further, that a claim described in either clause (ii) or
clause (iii) above could be reasonably considered to be the reason that
generic competition (as defined in Section 10.5.1 (a)) has not occurred, as
determined on a country-by-country basis, and either:
(a) with respect to a granted and unexpired Licensed Patent, Joint
Patent or AstraZeneca Patent in such country, (i) has not been
held permanently revoked, unenforceable or invalid by a decision
of a court or other governmental agency of competent
jurisdiction, which decision is unappealable or unappealed within
the time allowed for appeal, and (ii) has not been abandoned,
disclaimed, denied or admitted to be invalid or unenforceable
through reissue or disclaimer or otherwise; or
(b) with respect to a pending Licensed Patent, Joint Patent or
AstraZeneca Patent application, was filed and is being prosecuted
in good faith and has not been abandoned or finally disallowed
without the possibility of appeal or re-filing of the
application, provided that such claim has not been pending for
more than *** years.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 17 of 104
CONFIDENTIAL TREATMENT REQUESTED
2 CONSTRUCTION
Except where the context requires otherwise, whenever used the singular
includes the plural, the plural includes the singular, the use of any
gender is applicable to all genders and the word "or" has the inclusive
meaning represented by the phrase "and/or". Whenever this Agreement refers
to a number of days, unless otherwise specified, such number refers to
calendar days. The headings of this Agreement are for convenience of
reference only and do not define, describe, extend or limit the scope or
intent of this Agreement or the scope or intent of any provision contained
in this Agreement. The term "including" or "includes" as used in this
Agreement means including, without limiting the generality of any
description preceding such term. The wording of this Agreement shall be
deemed to be the wording mutually chosen by the Parties and no rule of
strict construction shall be applied against any Party.
3 GRANT OF RIGHTS
3.1 Licence Grants to AstraZeneca. Subject to the terms and conditions of this
Agreement, Avanir hereby grants to AstraZeneca an exclusive (including with
regard to Avanir and its Affiliates), subject to a retained right thereto
for the sole purpose of Avanir carrying out its obligations under the
Research Collaboration, right and licence in the Territory, with the right
to grant sublicenses pursuant to Section 3.3, under Avanir's and its
Affiliates' rights, titles, and interests in and to the Licensed Patents,
the Licensed Know-How, the Collaboration Results, the Joint Patents and the
Licensed Improvements to (i) Exploit the Licensed Compounds and the
Licensed Products for all purposes and (ii) use and otherwise Exploit the
Licensed Know-How and the Collaboration Results in connection with the
purposes set forth in clause (i) immediately preceding.
3.2 Licence Grants to Avanir. AstraZeneca hereby grants to Avanir a
non-exclusive right and licence, without the right to grant sublicenses,
under AstraZeneca's rights, titles, and interests in and to the AstraZeneca
Background Technologies, the AstraZeneca Improvements, the AstraZeneca
Patents, the Joint Patents and the Collaboration Results that are disclosed
or otherwise provided by AstraZeneca to, or discovered by, Avanir during
the Collaboration Term (a) solely to the extent required by Avanir to
perform the
Page 18 of 104
CONFIDENTIAL TREATMENT REQUESTED
Research Collaboration during the Collaboration Term, and (b) to use and
otherwise Exploit such AstraZeneca Background Technologies and AstraZeneca
Improvements as necessary or useful to exercise Avanir's rights under the
grant under (a).
3.3 Sublicenses. AstraZeneca shall, subject to Section 10.4, have the right to
grant sublicenses, through multiple tiers of sublicensees, under the
licences granted in Section 3.1, to its Affiliates and to any other Persons
in the Territory or in any country of the Territory. Where AstraZeneca
grants a sublicense to a Person that is not an Affiliate of AstraZeneca,
and such Person is not a Distributor, such Person shall be a "SUBLICENSEE"
for purposes of this Agreement. AstraZeneca shall ensure that all Persons
to which it grants sublicenses will comply with all terms and conditions of
this Agreement and AstraZeneca shall remain liable for any breach of this
Agreement by a Sublicensee. AstraZeneca shall provide notice of the
granting of any sublicence hereunder promptly following the making of such
grant. Such notice shall identify the Sublicensee, the territory of the
sublicence and a copy of those provisions of the sublicense that relate to
performance of this Agreement.
3.4 Distributorships. AstraZeneca shall have the right, in its sole discretion,
to appoint its Affiliates, and AstraZeneca and its Affiliates shall have
the right, in their sole discretion, to appoint any other Persons, in the
Territory or in any country of the Territory, to distribute, market and
sell the Licensed Products (with or without packaging rights), in
circumstances where the Person purchases its requirements of Licensed
Products from AstraZeneca or its Affiliates but does not otherwise make any
royalty or other payment to AstraZeneca with respect to its IP Protection
Rights. Where AstraZeneca or its Affiliates appoints such a Person that is
not an Affiliate of AstraZeneca, that Person shall be a "DISTRIBUTOR" for
purposes of this Agreement. The term "packaging rights" in this Section 3.4
shall mean the right for the Distributor to package Licensed Products
supplied in unpackaged bulk form into individual ready-for-sale packs.
3.5 Co-Promotion Rights. For the avoidance of doubt, AstraZeneca and its
Affiliates shall have the right, in their sole discretion, to co-promote
the Licensed Products with any
Page 19 of 104
CONFIDENTIAL TREATMENT REQUESTED
other Person, or to appoint one or more Third Parties to promote the
Licensed Products without AstraZeneca carrying out any promotion in all or
any part of the Territory.
3.6 Commercially Viable Use of Avanir's Sales Force. In anticipation of the
Health Registration Approval of the initial Licensed Product in the United
States, AstraZeneca and Avanir shall meet and confer to establish the terms
and conditions, beyond those set forth herein, upon which AstraZeneca will,
should AstraZeneca determine in its then current sales and marketing plan a
need to have the Licensed Product concerned promoted among *** in second or
third-line promotional activities, use Avanir's sales force to support
AstraZeneca's sales efforts in the United States in respect of such initial
Licensed Product by way of second or third line promotional activities in
the segment of ***. Such right of Avanir shall always be subject to the
provisos that (i) each member of Avanir's sales force intended to support
AstraZeneca as described hereunder meets the then applicable AstraZeneca
standard quality criteria for sales representatives; (ii) such Avanir
personnel shall be deployed only pursuant to the relevant sales and
marketing plan by AstraZeneca for the initial Licensed Product; (iii)
AstraZeneca's obligation to compensate Avanir for such services be limited
to ***; and (iv) that such detail calls by Avanir shall not in any given
calendar quarter exceed *** percent (***%) of the aggregate detail calls
with specialists by AstraZeneca's or its Affiliates' sales forces for the
initial Licensed Product in such calendar quarter. Notwithstanding the
foregoing to the contrary, in the event that AstraZeneca decides to
outsource sales or promotional activities pertaining to the Licensed
Product in the neuro-specialist field in the U.S. beyond the activities of
Avanir pursuant to this Section 3.6, AstraZeneca shall meet and confer with
Avanir on such subject for the purpose of providing Avanir an opportunity
to seek such business if it so desires.
3.7 No Conflicts.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 20 of 104
CONFIDENTIAL TREATMENT REQUESTED
3.7.1 Within the scope of the Research Collaboration, and to the extent
Applicable Law permits Avanir to conduct research and development
activities with respect to Licensed Compounds or Licensed Products
notwithstanding the exclusive licence grants to AstraZeneca under
Section 3.1, Avanir agrees that neither it nor its Affiliates will
publish or present any material or file any Patent applications with
respect to such activities without the consent of AstraZeneca.
3.7.2 Subject to Avanir's rights and obligations under the Research
Collaboration, and during the Collaboration Term and for *** years
after its termination or expiration, or, if this Agreement is
terminated by AstraZeneca pursuant to Section 21.5, for a period of
*** year after such termination, Avanir covenants that it and its
majority-owned subsidiaries (and its other Affiliates which are
Affiliates both as of the Effective Date and during the periods
referred to above) shall not, and that it shall use its best
reasonable efforts to cause its Affiliates other than those mentioned
above not to, (a) conduct any activity with, for the benefit of, or
sponsored by, any Person, that has as its goal or intent discovering,
identifying, Exploiting or otherwise commercialising *** or their
associated mechanisms, or (b) grant any licence or other rights to any
Person to utilise any IP Protection Rights Controlled by Avanir or its
majority-owned subsidiaries (or its other Affiliates which are
Affiliates both as of the Effective Date and during the period
referred to above), or by such Affiliates of Avanir other than those
referred to above to the extent Avanir has the ability to prevent such
grant provided always that Avanir uses its best reasonable efforts in
this regard, (including, for the avoidance of doubt, any Licensed
Patents, Licensed Know-How, Joint Patents or Collaboration Results)
for the express purpose of discovering, identifying, Exploiting or
otherwise commercialising *** or their associated mechanisms. Avanir
agrees that it will not create Affiliates after the Effective Date for
the
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 21 of 104
CONFIDENTIAL TREATMENT REQUESTED
purpose of obviating compliance with this Section 3.7.2. The Parties
acknowledge that all restrictions contained in this Section 3.7.2 are
reasonable, valid and necessary for the adequate protection of the
Licensed Product business and because of the disclosure of
Confidential Information by AstraZeneca, and that AstraZeneca would
not have entered into this Agreement without the protection afforded
it by this Section 3.7.2.
3.8 Exclusivity Term. AstraZeneca's exclusive position granted by Section 3.1
shall expire with respect to each separate Licensed Product, on a
country-by-country basis, on the date when AstraZeneca's obligation to pay
royalties with respect to such Licensed Product pursuant to Section 10.2 or
Section 10.4, as applicable, expires. Upon expiration of the royalty term
set forth in Section 10.8 with respect to a Licensed Product in a country,
AstraZeneca's licence with respect to such Licensed Product in such country
shall become non-exclusive, fully paid-up, perpetual and irrevocable and
the Net Sales of such Licensed Product in such country shall be excluded
from the royalty calculations in Sections 10.2 (including the thresholds
and ceilings) or 10.4, as applicable. AstraZeneca and its Affiliates and
Sublicensees following such expiration shall be allowed to continue
Exploiting such Licensed Product and using all Licensed Know-How and
Collaboration Results in connection therewith on a non-exclusive basis in
such country with no further consideration to Avanir.
3.9 Regulatory Documentation. The Parties acknowledge that Avanir will prepare
in conjunction with AstraZeneca and submit the first IND application
concerning the AVP 26452 Compound in accordance with the IND filing plan
attached hereto as Schedule 3. Furthermore, in the event that in response
to the submission of the IND, the Regulatory Authority poses questions to
Avanir or otherwise requires additional data, Avanir and AstraZeneca shall
cooperate to meet and confer as required to formulate an action plan in
response to such request. It is acknowledged that AstraZeneca may ask
Avanir to manage the single and multiple ascending dose studies associated
with the IND filing and
Page 22 of 104
CONFIDENTIAL TREATMENT REQUESTED
Avanir agrees (at AstraZeneca's request) to make up to *** FTEs available
to manage such studies. AstraZeneca shall reimburse Avanir for the work of
such FTEs at the FTE rate. AstraZeneca may from time to time during the
term of this Agreement reasonably request Avanir to make, at AstraZeneca's
cost, applications for an IND in addition to that mentioned above in this
Section 3.9 or other regulatory approvals whether in Avanir's or in
AstraZeneca's or any of its Affiliates' name and Avanir undertakes to
comply with any such reasonable request. Without exception, AstraZeneca
will, as between AstraZeneca and Avanir, be the owner of any Regulatory
Documentation relating to any such applications for an IND or regulatory
approvals as mentioned in this Section 3.9 (including IND applications and
approvals).
Notwithstanding what is stated above in this Section 3.9 should the first
IND Application either (a) not have been submitted by ***, or (b) not have
become effective within *** of submission, AstraZeneca shall have the
right, in its sole discretion, upon written notice to Avanir either to
require Avanir to transfer such IND Application to it or to instruct Avanir
in the conduct of remedial measures to allow such IND Application to be
submitted and to become effective, as the case may be. Upon transfer of
such IND Application, AstraZeneca shall be responsible for preparing and
submitting such IND Application.
4 CONFIRMATORY PATENT LICENCES
Avanir shall if requested to do so by AstraZeneca promptly enter into
confirmatory licence agreements in the form or substantially the form set
out in Schedule 5 for purposes of recording the licences granted under this
Agreement with such Patent Offices in the Territory as AstraZeneca
considers appropriate. Until the execution of any such confirmatory
licences, so far as may be legally possible, Avanir and AstraZeneca shall
have the same rights in respect of the Licensed Patents and the Joint
Patens and be under
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 23 of 104
CONFIDENTIAL TREATMENT REQUESTED
the same obligations to each other in all respects as if the said
confirmatory licences had been executed.
5 THE RESEARCH COLLABORATION
5.1 Conduct of Research Collaboration. During the Collaboration Term and under
the direction and supervision of the RCMC, each Party shall (a) perform or
cause to be performed its obligations under the Research Plan in good
scientific manner and in compliance in all material aspects with all
Applicable Law, including, unless otherwise set forth in the Research Plan,
good laboratory practices and good clinical practices, and (b) allocate the
time, effort, equipment and skilled personnel to complete such activities
as set forth in the Research Plan. Following the Effective Date, the
Parties shall promptly commence the Research Collaboration. Avanir
undertakes insofar as it relates to animal care in the activities to be
carried out by it hereunder to comply with the AAALAC standards and shall
use its best reasonable efforts to comply with the AstraZeneca
International Policy on Animal Care and Use to the extent stricter than the
AAALAC standards.
5.2 Facilities and Key Personnel. Avanir shall provide facilities, equipment
and manpower that are reasonably necessary to carry out the work undertaken
by Avanir under the Research Collaboration at Avanir's facilities at 11388
Sorrento Valley Road, Suite 200, in San Diego, California, USA, and, after
AstraZeneca's prior written approval, at such other facilities which Avanir
may come to occupy of an appropriate standard for performing research in
accordance with Good Laboratory Practice and otherwise in accordance with
the Research Plan. Subject to Section 5.3, the foregoing undertaking shall
not be construed to prevent Avanir from relying upon subcontractors for the
performance of activities under the Research Plan which are, or would be,
of a type typically performed by subcontractors. The principal scientist
designated by Avanir (the "AVANIR PRINCIPAL SCIENTIST") shall be
responsible for all Research Collaboration activities undertaken by Avanir
and shall supervise the work of all personnel engaged by Avanir in the
Research Collaboration. The Avanir Principal Scientist shall serve as the
primary contact for AstraZeneca on all matters related to the Research
Collaboration.
Page 24 of 104
CONFIDENTIAL TREATMENT REQUESTED
The Avanir Principal Scientist and other scientific and technical personnel
of Avanir considered by AstraZeneca to be of key importance for the conduct
of the Research Collaboration (the "KEY PERSONNEL") are listed on Schedule
6 hereto. Avanir shall not substitute persons for the Key Personnel or
materially reduce the time commitment of any Key Personnel to the Research
Collaboration without the prior written approval of AstraZeneca, which
approval with respect to the Key Personnel shall not be unreasonably
withheld or notice whether approval is granted unreasonably delayed. In the
event that any Key Personnel are no longer employed by Avanir or are
otherwise incapable of performing their obligations under this Agreement
(e.g., become disabled), the Parties shall meet and discuss in good faith
how best to proceed provided, however, that in case the Principal Scientist
terminates his employment with Avanir or leaves the employment for any
other reason (including death) during the *** Collaboration Year, Avanir
shall have a reasonable opportunity to find a replacement of comparable
experience and stature satisfactory to AstraZeneca; provided, however, if
Avanir is unable to hire a reasonably satisfactory replacement within ***
days of the date the Principal Scientist terminates or leaves his
employment, AstraZeneca shall have the right to terminate the Research
Collaboration by providing *** days' written notice thereby ending the
Collaboration Term. Upon such termination AstraZeneca shall be under no
obligation to provide Avanir with any further compensation pursuant to
Article 9 and the provisions of Section 21.6 (y) shall apply.
5.3 Subcontracting. Avanir shall be solely responsible for successfully
completing its activities set forth in the Research Plan. Avanir shall
conduct and carry out the activities provided for under the Research
Collaboration primarily through its employees at the site identified under
Section 5.2. Avanir, prior to engaging a subcontractor to carry out any
significant portion of such activities shall seek the consent of
AstraZeneca which shall not be unreasonably withheld or notice whether
consent is provided unreasonably
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 25 of 104
CONFIDENTIAL TREATMENT REQUESTED
delayed. Any subcontract shall be subject to the applicable terms and
conditions of this Agreement, including Articles 14 and Section 16.1, and,
upon AstraZeneca's request, Avanir shall require each such subcontractor to
enter into an undertaking, pursuant to which the terms and conditions of
this Agreement shall apply directly between such subcontractor and
AstraZeneca, prior to disclosing to such subcontractor any of AstraZeneca's
Confidential Information; provided, however, that Avanir shall remain
ultimately responsible for the performance of its obligations under this
Agreement. Any fees or costs due any such subcontractor shall be at the
sole expense of Avanir.
5.4 Collaboration Materials and Information Transfer.
5.4.1 Avanir shall, and shall cause its majority-owned subsidiaries and its
other Affiliates (which are its Affiliates both as of the Effective
Date and at all relevant times thereafter) and use its best reasonable
efforts to cause its Affiliates other than those referred to above,
without additional compensation and at Avanir's sole expense, provide
to AstraZeneca copies of any Licensed Know-How which could be
reasonably considered material to the Research Collaboration, not
previously provided to AstraZeneca, promptly after the Effective Date.
Upon AstraZeneca's request to Avanir, Avanir shall promptly provide to
AstraZeneca any copies of additional Licensed Know-How and originals
of Licensed Know-How in those cases where AstraZeneca has a need for
the same in connection with the filing and prosecution of patents.
5.4.2 During the Research Collaboration each Party shall, and shall cause
its majority-owned subsidiaries and its other Affiliates (which are
its Affiliates both as of the Effective Date and at all relevant times
thereafter) and use its best reasonable efforts to cause its
Affiliates other than those mentioned above, in accordance with the
criteria and mechanisms established by the RCMC, disclose and make
available to the other Party, in whatever form such Party may
reasonably request all Collaboration Results promptly upon the earlier
of the conception or reduction to practice, discovery, development or
making of such Collaboration Results.
Page 26 of 104
CONFIDENTIAL TREATMENT REQUESTED
5.4.3 Each Party shall, and shall cause its majority-owned subsidiaries and
its other Affiliates (which are its Affiliates both as of the
Effective Date and at all relevant times thereafter) and use its best
reasonable efforts to cause its Affiliates other than those referred
to above, in accordance with the criteria and mechanisms established
by the RCMC, disclose and make available to the other Party, in
whatever form such Party may reasonably request all Collaboration
Material promptly upon the Effective Date or upon the earlier of the
conception or reduction to practice, discovery, development or making
of such Collaboration Material; provided, however, that,
notwithstanding the foregoing, AstraZeneca shall only be required to
provide or disclose to Avanir such Collaboration Materials and other
information as it determines, in its sole discretion, is reasonably
necessary for Avanir to perform its activities under the Research
Collaboration and AstraZeneca retains the right, in its reasonable
discretion, to withdraw any such Collaboration Material information
from the Research Collaboration upon written notice to Avanir.
5.5 Cooperation. Each Party shall cooperate with any and all reasonable
requests for assistance from the other Party with respect to the activities
under the Research Collaboration, including by making its employees,
consultants and other scientific staff available upon reasonable notice
during normal business hours at their respective places of employment to
consult with such other Party on issues arising in connection with the
Research Collaboration.
5.6 Regulatory Records. Avanir and AstraZeneca each shall maintain, or cause to
be maintained, records of its respective activities under the Research
Collaboration in sufficient detail and in good scientific manner
appropriate for patent and regulatory purposes, which shall be complete and
accurate and shall fully and properly reflect all work done and results
achieved in the performance of its respective activities under the Research
Collaboration, and which shall be retained by such Party for at least five
(5) years after the termination of the Research Collaboration, or for such
longer period as may be required by Applicable Law; provided always that
before destroying any such
Page 27 of 104
CONFIDENTIAL TREATMENT REQUESTED
record upon expiration of such period Avanir shall offer AstraZeneca in
writing to transfer such record to AstraZeneca and shall, should
AstraZeneca declare that it wishes to have such record transferred,
transfer it to AstraZeneca, at AstraZeneca's cost, without unreasonable
delay. AstraZeneca shall preserve such records for the benefit of, and
transfer to, Avanir in anticipation of a termination of this Agreement that
could result in the transfer of such documents to Avanir. Each Party shall
have the right, during normal business hours and upon reasonable notice, to
inspect and copy any such records contemplated by this Section 5.6.
6 MANAGEMENT OF THE RESEARCH COLLABORATION
6.1 Research Collaboration Management Committee.
6.1.1 Responsibilities of RCMC. The Research Collaboration Management
Committee (the "RCMC") established by the Parties oversees the
initiation, planning and performance of the activities under the
Research Collaboration. In particular, the responsibilities of the
RCMC shall include: (a) for the period following the first
Collaboration Year, consider and propose to the JEC the number of FTEs
at Avanir to be funded under the Collaboration Term by AstraZeneca as
set forth in Section 9.1; (b) establishing reporting criteria and
mechanisms for making Collaboration Results available to the other
Party; (c) establishing criteria and mechanisms for disclosing and
making available to the other Party Collaboration Materials; (d)
establishing prioritisation criteria for specific components under the
Research Collaboration, including setting proposed dates for
experimental initiation and completion of each stage of the Research
Collaboration; (e) determining within fifteen (15) days of the
completion of each stage of the Research Collaboration pertaining to a
specific Licensed Compound whether the completion thereof has been
successful and deciding whether or not to continue the Research
Collaboration into the next stage (i.e., making "stop/go decisions");
(f) monitoring workflow, including experimental sample transfer,
sample analysis and data quality control, data analysis and
summarisation, software installation (access), training and
maintenance; (g) monitoring of sample throughput, and
Page 28 of 104
CONFIDENTIAL TREATMENT REQUESTED
overall Research Collaboration progress; (h) to the extent permitted
by the Research Plan, assigning tasks and responsibilities taking into
account each Party's respective specific capabilities and expertise in
order to avoid duplication and enhance efficiency and synergies; (i)
monitoring timely execution of the Research Collaboration, including
compliance with budgets and timelines; and (j) reviewing and approving
any amendments to the Research Plan, which to the extent they place
additional responsibilities on Avanir shall require the express
written consent of Avanir.
6.1.2 Research Plan. The Parties acknowledge and agree that the Research
Plan attached hereto as of the Effective Date sets forth the goals and
objectives of the Research Collaboration and the broad terms of the
Parties' respective undertakings to achieve those goals and
objectives, and the funding of FTEs provided for under Section 9.1
represents AstraZeneca's total financial obligation for all services
to be rendered and expenses to be incurred by or on behalf of Avanir
as necessary to achieve the goals and objectives of the Research
Collaboration. The Parties further acknowledge and agree that the
Research Plan will be amended by the RCMC from time to time during the
Collaboration Term for each stage of the Research Collaboration to
identify and define the specific undertakings of the Parties required
to implement the Research Collaboration.
6.1.3 Formation of RCMC. The RCMC shall consist of six (6) members with the
requisite experience and seniority to enable them to make decisions on
behalf of the Parties with respect to the initiation, planning and
performance of the activities of the Research Collaboration, with
equal numbers appointed by the respective Party, which shall include
the Avanir Principal Scientist and the AstraZeneca Principal Scientist
acting as Co-Chairs. Each Party shall have the right to replace its
respective RCMC representatives upon written notice to the other
Party, provided that any such substitute representative shall have
substantially the equivalent experience and seniority as the
representative that such person replaces. Each Party shall be entitled
to bring for an agenda item at a
Page 29 of 104
CONFIDENTIAL TREATMENT REQUESTED
meeting of the RCMC such minimum numbers of advisors, consultants and
other visitors which such Party considers in good faith necessary or
useful to such Party to protect its interest regarding the business to
be dealt with under such agenda item. If such visitors are not
employees of a Party, their attendance at the RCMC meeting shall be
further conditioned upon agreement with the inviting Party over
confidentiality and non-use obligations no less burdensome than set
forth herein.
6.1.4 Disputes. The RCMC shall endeavour to reach consensus on all matters
brought before it with each Party having a single vote, irrespective
of the number of representatives actually in attendance at a meeting;
provided, however, that in the event the RCMC is unable to resolve an
outstanding matter before it, such matter shall be resolved by the
JEC.
Should the RCMC not be able to reach consensus on what proposal to
bring to the JEC concerning such matter referred to under Section
6.1.1 (a), each Party may bring its respective proposal to the JEC
which shall then consider the proposals and make a decision in
accordance with Section 6.2.4. The matter shall be deemed brought to
the attention of the JEC when the first Party's proposal has been
submitted to the JEC.
6.1.5 Meetings. The RCMC shall meet at least quarterly and more frequently
when required. Regular quarterly meetings shall be scheduled on a
recurring schedule to be established by the RCMC (e.g. the first
Tuesday of January, April, July and October at 9:30 a.m. at the place
of meeting, if held in person), or at such other mutually agreeable
times no less than three (3) months in advance, except for the initial
meeting of the RCMC, which shall be at a mutually agreeable time and
place. Any such regular meeting falling on a holiday when commercial
banks are closed in any of Great Britain, Sweden or the United States
shall be postponed until the next succeeding day when commercial banks
are open for business in all three jurisdictions. The meetings shall
be held by means of teleconference or videoconference or, when held in
person, at AstraZeneca AB's facilities in Molndal, Sweden, or at other
locations *** mutually
*** Portions of this page have been omitted pursuant to a request for
Confidential treatment and filed separately with the Commission.
Page 30 of 104
CONFIDENTIAL TREATMENT REQUESTED
agreed upon by the Parties. Subject to what is stated in Section
6.1.6, a quorum of the RCMC shall exist whenever there is present at a
meeting each of the Co-Chairs or their respective designees. In
addition, the RCMC may act without a formal meeting by a written
memorandum signed by the Co-Chairs of the RCMC. Whenever any action by
the RCMC is required hereunder during a time period in which the RCMC
is not scheduled to meet, either Co-Chair shall have the right to call
a special meeting or the Co-Chairs may cause the RCMC to take the
action without a meeting in the applicable time period. Any such
additional meetings shall be held at places and on dates selected by
the Co-Chairs.
6.1.6 Quorum. Notwithstanding what is stated in Section 6.1.5, the Co-Chair
of AstraZeneca may call for a meeting to be held on a business day
when commercial banks are open for business in Great Britain, Sweden
and the United States by notifying Avanir no later than thirty (30)
days in advance of a meeting of the RCMC of the exact date, time and
location for the meeting. Provided that (i) such notice has been
timely issued and that the meeting is held on the date, time and place
so indicated, or (ii) that Avanir confirms that it has been properly
notified about the meeting, quorum shall be considered constituted at
that meeting unless all members of one Party fail to attend the
meeting because of illness, where no substitution could be reasonably
arranged, breakdown in general communications, travel difficulties
beyond the reasonable control of such Party, or by other similar
reasons. No meeting shall be called for a day on which the commercial
banks are closed in any of Great Britain, Sweden or the United States.
For the purpose of agreeing that Avanir has been properly notified of
the meeting in the case under (ii), attendance to a meeting without
express objection thereto shall be sufficient.
6.1.7 Expenses. Avanir and AstraZeneca each shall bear all expenses of its
RCMC members related to such members' participation on the RCMC and
attendance at RCMC meetings.
Page 31 of 104
CONFIDENTIAL TREATMENT REQUESTED
6.1.8 Minutes. The RCMC shall keep accurate minutes of its deliberations,
which minutes shall record all proposed decisions and all actions
recommended or taken, all proposals to the JEC on the number of FTEs
at Avanir to be funded by AstraZeneca in a subsequent Collaboration
Year in accordance with Section 9.1, Research Collaboration progress
reports provided to the RCMC pursuant to Section 7.1 and Collaboration
Results generated of interest in the Research Collaboration.
Furthermore, all CDs and pre-CDs selected by AstraZeneca during the
Collaboration Term shall be recorded in the minutes of the RCMC.
Drafts of minutes shall be delivered to the Co-Chairs of the RCMC
within twenty (20) days after the respective meeting. The Parties, on
an alternating basis, shall prepare and circulate the draft minutes.
Draft minutes shall be edited by the Co-Chairs and shall be issued in
final form only with the approval and agreement of the Co-Chairs, such
issuance not subject to final determination by the JEC in the event of
a dispute.
6.2 Joint Executive Committee.
6.2.1 Formation of the JEC. The Parties shall establish a Joint Executive
Committee (the "JEC") to resolve any outstanding matter before the
RCMC that the RCMC is unable to resolve. The JEC shall consist of four
(4) members with equal numbers appointed by each Party with the
requisite experience and seniority to enable them to resolve any
matter brought before them and make any necessary decisions on behalf
of the Parties with respect to any such matter. Furthermore, the JEC
shall include a Co-Chair to be designated by each Party. Each Party
shall have the right to replace its respective JEC representatives
upon written notice to the other Party, provided that any such
substitute representative shall have substantially the equivalent
experience and seniority as the representative that such person
replaces.
6.2.2 Meetings. The JEC shall meet within fifteen (15) days from when a
matter in dispute is first brought to the attention of the JEC by the
RCMC and when otherwise required for the purpose of the Research
Collaboration. The meetings
Page 32 of 104
CONFIDENTIAL TREATMENT REQUESTED
shall be held by means of teleconference or videoconference or, when
held in person, at AstraZeneca AB's facilities in Molndal, Sweden, or
at other locations *** mutually agreed upon by the Parties. Subject to
what is stated in Section 6.2.3, a quorum of the JEC shall exist
whenever there is present at a meeting each of the Co-Chairs or their
respective designees. The JEC shall endeavour to reach consensus on
all matters brought before it with each Party having a single vote,
irrespective of the number of representatives actually in attendance
at a meeting. Avanir and AstraZeneca each shall bear all expenses of
its JEC members related to such members' participation on the JEC and
attendance at JEC meetings.
6.2.3 Quorum. Notwithstanding what is stated in Section 6.2.2, the Co-Chair
of AstraZeneca may call for a meeting by notifying Avanir no later
than thirty (30) days in advance of a meeting of the JEC of the exact
date, time and location for the meeting. Provided that (i) such notice
has been timely issued and that the meeting is held on the date, time
and place so indicated, or (ii) that Avanir confirms that it has been
properly notified about the meeting, quorum shall be considered
constituted at that meeting unless all members of one Party fail to
attend the meeting because of illness, where no substitution could be
reasonably arranged, breakdown in general communications, travel
difficulties beyond the reasonable control of such Party, or by other
similar reasons. No meeting shall be called for a day on which the
commercial banks are closed in any of Great Britain, Sweden or the
United States. For the purpose of agreeing that Avanir has been
properly notified of the meeting in the case under (ii), attendance to
a meeting without express objection thereto shall be sufficient.
6.2.4 Decision-making. Any final decision mutually agreed to by the JEC
shall be in writing and shall be conclusive and binding on the
Parties. If such resolution regarding the initiation, planning or
performance of the activities of the Research
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 33 of 104
CONFIDENTIAL TREATMENT REQUESTED
Collaboration as described in Section 6.1.1 is unattainable by the JEC
within *** days from the date the matter in dispute is first brought
to the attention of the JEC, the dispute shall be resolved in
accordance with ***; provided, however, that, subject to Section
6.1.2, if the matter in dispute would result in additional expense
being incurred by Avanir for activities not contemplated in the
Research Plan, then AstraZeneca shall reimburse Avanir for such
additional expense.
6.2.5 Minutes. The JEC shall keep accurate minutes of its deliberations,
which minutes shall record all proposed decisions and all actions
recommended or taken. Drafts of minutes shall be delivered to the
Co-Chairs of the JEC within twenty (20) days after the respective
meeting. The Parties, on an alternating basis, shall prepare and
circulate the draft minutes. Draft minutes shall be edited by the
Co-Chairs and shall be issued in final form only with the approval and
agreement of the Co-Chairs.
6.3 Upon Expiration or Termination of the Collaboration Term. Upon expiration
or termination of the Collaboration Term the following shall apply:
6.3.1 Dissolution of the RCMC and the JEC. The RCMC and the JEC shall be
dissolved and Avanir shall provide AstraZeneca with consultation
services, including reviewing and contributing to proposed
publications concerning the Licensed Compounds or Licensed Products,
as AstraZeneca may reasonably request for the Development Project,
including by making Avanir's employees, consultants and other
scientific staff available upon reasonable notice during normal
business hours at their respective places of employment to consult
with AstraZeneca on issues arising during the Development Project, or
in connection with Exploitation of Licensed Compounds, Products or
Results. AstraZeneca shall reimburse Avanir for out-of-pocket costs
incurred in connection with such consultation services and should the
time devoted by Avanir to such services
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 34 of 104
CONFIDENTIAL TREATMENT REQUESTED
exceed *** FTE days in any Calendar Year, AstraZeneca shall compensate
Avanir for any additional agreed upon FTE days. Prior to performing
services in excess of the *** day allotment, Avanir shall notify
AstraZeneca in writing that the said allotment has been utilised. For
purposes of this Section 6.3.1, the daily FTE rate shall be determined
by dividing the FTE Rate by ***.
6.3.2 The Parties shall establish an Information Forum (the "IF"),
consisting of between four (4) and eight (8) members with equal
numbers appointed by the respective Party for the purpose of
AstraZeneca gaining from the experience and expertise of Avanir and
for keeping Avanir updated on AstraZeneca's activities in the
Development Project. The IF shall meet on dates mutually agreed by the
Parties once a year at a location suitable to both parties or by
teleconference, videoconference or by other jointly suitable means.
Avanir and AstraZeneca each shall bear all expenses of its IF members
related to such members' participation on the IF and attendance at IF
meetings.
6.3.3 Avanir shall cease any and all use of the Licensed Know How, the
Collaboration Results, the AstraZeneca Background Technologies, the
AstraZeneca Improvements and any other AstraZeneca Confidential
Information.
6.3.4 Avanir shall deliver or return, as applicable, all data, files,
records and other materials in its possession or control containing or
comprising all AstraZeneca Background Technologies, AstraZeneca
Improvements and AstraZeneca's Confidential Information (except one
copy of AstraZeneca's Confidential Information which may be retained
by Avanir solely for archival purposes).
6.3.5 Avanir's obligation under Sections 6.3.1 through 6.3.4 shall, in
addition to, and without limiting, what is stated therein, apply to
each separate Licensed Compound which AstraZeneca has selected as a
Candidate Drug in which
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 35 of 104
CONFIDENTIAL TREATMENT REQUESTED
situation such obligations shall refer to such individual Licensed
Compound or Licensed Improvement thereon, provided, however, that the
RCMC and the JEC shall not be dissolved, and the IF not be
established, until the expiration or termination of the Collaboration
Term.
6.3.6 Information Updates Regarding the AVP 26452 Compound and Other
Compounds. At each quarterly meeting of the RCMC during the
Collaboration Term, AstraZeneca shall provide Avanir an update on
AstraZeneca's activities and progress regarding the AVP 26452 Compound
and any other Licensed Compounds that has been selected as a CD by
AstraZeneca. Such updates shall cover general information on
AstraZeneca's development activities in the preceding quarter and a
summary of the activities planned in the next twelve (12) months. For
the avoidance of doubt, after the termination or expiration of the
Collaboration Term, the AVP 26452 Compound and such other Licensed
Compounds that have been selected as a CD by AstraZeneca shall be
included in the regular information updates process for the
Development Program as set forth in Sections 6.3.2 and 8.4.
Page 36 of 104
CONFIDENTIAL TREATMENT REQUESTED
6.4 Transfer upon Termination of the Collaboration Term.
Upon expiration or termination of the Collaboration Term the following
shall apply:
6.4.1 Avanir shall, and shall cause its majority-owned subsidiaries and its
other Affiliates (which are its Affiliates both as of the Effective
Date and at all relevant times thereafter) and use its best reasonable
efforts to cause its Affiliates other than those referred to above to,
without additional compensation, disclose and make available to
AstraZeneca, to the extent not done so already, in whatever form
AstraZeneca may reasonably request, Regulatory Documentation, copies
of Licensed Know-How, Collaboration Results and any other Information
claimed or covered by any Licensed Patent or Joint Patent or otherwise
relating, directly or indirectly, to any Licensed Compound, Licensed
Product or Licensed Improvement, and thereafter and throughout the
term of the Agreement immediately upon the earlier of the development,
making, conception or reduction to practice of each such Regulatory
Documentation, Licensed Know-How or other Information.
6.4.2 Avanir's obligation under Section 6.4.1 and under Section 6.4.4
shall, in addition to, and without limiting, what is stated therein,
apply to each separate Licensed Compound which AstraZeneca has
selected as a Candidate Drug in which situation such obligations shall
refer to such Regulatory Documentation, Licensed Know-How,
Collaboration Results and Information relating directly or indirectly
to that particular Licensed Compound or Licensed Improvement thereon.
6.4.3 Avanir warrants that it will perform a reasonably diligent search for
Licensed Know-How and Regulatory Documentation relevant to the safety,
efficacy and Exploitation of Licensed Compounds and Licensed Products
in existence as of the termination or expiration of the Collaboration
Term and that all such located Licensed Know-How and Regulatory
Documentation will be disclosed to AstraZeneca upon termination or
expiration of the Collaboration Term.
Page 37 of 104
CONFIDENTIAL TREATMENT REQUESTED
6.4.4 Avanir, at its ***, will provide AstraZeneca with all reasonable
assistance required in order to transfer the Licensed Know-How to
AstraZeneca in a timely manner following termination or expiration of
the Collaboration Term. Without prejudice to the generality of the
foregoing, if visits of Avanir's representatives to AstraZeneca's
facilities are reasonably requested by AstraZeneca for purposes of
transferring the Licensed Know-How to AstraZeneca or for purposes of
AstraZeneca acquiring expertise on the practical application of the
Licensed Know-How or assisting on issues arising during such
Exploitation, Avanir will send appropriate representatives to
AstraZeneca's facilities, provided that AstraZeneca shall reimburse
Avanir for its reasonable and verifiable expenses of travel and
accommodations for such representatives and such persons' working
hours actually devoted to such transfer or assistance at the FTE Rate.
7 REPORTS
7.1 Research Collaboration Progress Reports. No later than five (5) business
days prior to each quarterly RCMC meeting, the Parties shall provide the
RCMC with a detailed written progress report in English containing
specifications and other information on all Collaboration Results generated
by such party under the Research Collaboration and not previously reported
to the RCMC. The RCMC may provide further instructions on the timing and
content of these reports.
7.2 Copyrights. Copyrights to reports provided for hereunder are part of the
Collaboration Results. Neither Party shall, without the prior written
approval of the other Party, attribute to the other Party any abstract or
interpretation of any such report for sales or promotion purposes.
Notwithstanding the foregoing, each Party shall be entitled to make such
number of copies of Collaboration Results as is reasonably required to
perform its obligations under this Agreement and for archival purposes.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 38 of 104
CONFIDENTIAL TREATMENT REQUESTED
8 DEVELOPMENT PROJECT
8.1 Diligence Obligations. AstraZeneca undertakes to:
8.1.1 use Commercially Reasonable Efforts at its own cost and expense to
develop a Licensed Product and to conduct all development necessary to
obtain Health Registration Approvals for a Licensed Product for use in
humans (including the indication for ***) in each of the Major Markets
and throughout the Territory; and
8.1.2 use Commercially Reasonable Efforts to commercialise a Licensed
Product for use in humans (including the indication for ***) in each
of the Major Markets and throughout the Territory; provided, however,
that such obligations are expressly conditioned upon Avanir and its
Affiliates performing their respective obligations hereunder,
including the completion of the activities under the Research
Collaboration and the information disclosure requirements pursuant to
Section 5.4, and such obligations of AstraZeneca shall be delayed or
suspended as long as any such condition exists; and provided further,
for the avoidance of doubt, that AstraZeneca shall not be obligated to
obtain Health Registration Approval for, or commercialise, more than
one Licensed Product in any Major Market and throughout the Territory.
In the event that AstraZeneca decides to discontinue the development
or commercialisation of a Licensed Product in favour of another
Licensed Product, its obligations under this Section 8.1.2. shall
cease with respect to such initial Licensed Product in favour of such
other Licensed Product. AstraZeneca shall perform its obligation under
this Section 8.1.2. in good scientific manner and in compliance in all
material respects with all Applicable Law.
8.1.3 Should the use by AstraZeneca of its Commercially Reasonable Efforts
have as a consequence that AstraZeneca would be obligated to carry out
some or all of the
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 39 of 104
CONFIDENTIAL TREATMENT REQUESTED
activities provided for in Section 8.1.1 or 8.1.2 in a country in
which such activities would not, in AstraZeneca's reasonable
judgement, make commercial sense then AstraZeneca shall,
notwithstanding what is stated in Sections 8.1.1 and 8.1.2 and
following consultation with Avanir, be allowed to refrain from
carrying out such activity(ies) in such country, other than a Major
Market, ***.
8.1.4 Upon satisfaction of its obligations under Sections 8.1.1 and 8.1.2,
AstraZeneca shall be deemed to have satisfied all diligence
obligations owed to Avanir hereunder, with respect to the Exploitation
of the Licensed Compounds, Licensed Products or Collaboration Results,
and shall have no other obligation, express or implied, to Exploit the
Licensed Compounds, Licensed Products or Collaboration Results.
8.2 Breach of Diligence Obligations.
8.2.1 Notification and Meeting. If at any time Avanir has a reasonable
basis to believe that AstraZeneca is in breach of its material
obligations under Section 8.1, then Avanir shall so notify
AstraZeneca, specifying the basis for its belief, and the Parties
shall meet within thirty (30) days after such notice to discuss in
good faith Avanir's concerns and AstraZeneca's development and
commercialisation plans with respect to the Licensed Compound and
Licensed Product.
8.2.2 Right of Termination. If, after such good faith discussions mentioned
in Section 8.2.1, (a) AstraZeneca is in breach of its obligations
under Section 8.1, and (b) AstraZeneca does not take reasonable steps
designed to rectify such breach within ninety (90) days of meeting
with Avanir pursuant to Section 8.2.1 (or, if such failure cannot be
rectified within such ninety (90)-day period, if AstraZeneca does not
commence actions to rectify such breach within such period and
thereafter
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 40 of 104
CONFIDENTIAL TREATMENT REQUESTED
diligently pursues such actions), Avanir may exercise its right of
termination provided under Section 21.5.
8.3 Services in Relation to the AVP 26452 Compound. Avanir shall provide
AstraZeneca with consultation services, including reviewing and
contributing to proposed publications concerning the AVP 26452 Compound, as
AstraZeneca may reasonably request for the Development Project, including
by making Avanir's employees, consultants and other scientific staff
available to consult with AstraZeneca on issues arising during the
pre-clinical or clinical development of the AVP 26452 Compound, or in
connection with Exploitation of the AVP 26452 Compound or the AVP 26452
Product. For this purpose AstraZeneca may use during the Collaboration Term
the FTEs at Avanir funded by AstraZeneca in accordance with Section 9.1 and
thus no additional funding shall be provided by AstraZeneca to Avanir to
obtain the consultation services provided for in this Section 8.3; unless
the delivery of such services rises to a level that makes it impracticable
for Avanir to fulfil its responsibilities under the Research Plan. After
termination or expiration of the Collaboration Term, the payment shall
follow the reimbursement scheme set forth in Section 6.3.1. The failure of
Avanir to fulfil its obligations to provide consultation services shall not
give rise to a right in AstraZeneca to terminate this Agreement. For the
avoidance of doubt, Avanir shall provide the services described in Section
3.9.
8.4 Reporting. Following termination or expiration of the Research
Collaboration AstraZeneca shall provide Avanir in reasonable connection to
the meetings in the IF with an annual report on the development (the
"DEVELOPMENT REPORT") of Licensed Products in the Territory in order to
keep Avanir informed of its progress. Such report shall cover, in relation
to Licensed Compounds and Licensed Products, general information on
AstraZeneca's development activities in the previous *** months, a summary
of the activities planned in the next *** months, and a timetable of
planned and actual
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 41 of 104
CONFIDENTIAL TREATMENT REQUESTED
submissions for Health Registration Approvals. If and when a Health
Registration Approval is obtained in any country of the Territory,
AstraZeneca shall promptly inform Avanir thereof.
8.5 Licensed Improvements. For purposes of the obligations in Sections 8.1, 8.2
and 8.3, a Licensed Product shall include any Licensed Improvement.
9 RESEARCH FUNDING
9.1 Funding.
9.1.1 Each Party shall assume responsibility for its own costs and expenses
for the Research Collaboration with the sole exception that
AstraZeneca shall provide funding to Avanir (i) during the first
Collaboration Year for *** FTEs; and (ii) for at least *** and no more
than *** FTEs per each Collaboration Year thereafter during the
Collaboration Term at the FTE Rate. Such AstraZeneca's obligation
shall be contingent upon Avanir making the corresponding number of
FTEs available for the Research Collaboration. In addition to being
available for the Research Collaboration such FTE's funded by
AstraZeneca in accordance herewith, shall also be available for such
consulting services provided for under Section 8.3.
9.1.2 The JEC shall no later than *** prior to the expiration of a certain
Collaboration Year decide in writing the number of FTEs to be funded
by AstraZeneca during the immediately subsequent Collaboration Year;
provided that the number of FTEs to be funded by AstraZeneca shall be
no less than *** FTEs in any given year during the Collaboration Term.
9.1.3 Subject to mutual agreement between the Parties, which agreement each
Party may enter into at its sole discretion, AstraZeneca may provide
funding for FTEs
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 42 of 104
CONFIDENTIAL TREATMENT REQUESTED
for a certain period of time, to be decided by the Parties, beyond the
third Collaboration Year.
9.2 Invoices. Thirty (30) days prior to the commencement of each Calendar
Quarter, Avanir shall invoice AstraZeneca for amounts due to Avanir from
AstraZeneca pursuant to Section 9.1 based on the FTE Rate for the ensuing
Calendar Quarter. Each invoice shall be sent to the AstraZeneca Principal
Scientist and shall be accompanied by a forecast of the number and purpose
of the FTEs to be provided by Avanir in the Research Collaboration during
such ensuing Calendar Quarter and a report from Avanir's time reporting
system on FTE effort spent in relation to the Research Collaboration during
the immediately preceding Calendar Quarter, if any. AstraZeneca hereby
acknowledges that Avanir does not maintain a timesheet system and that the
requirements of this Agreement do not require Avanir to implement any such
system. The Parties confirm, however, that such documentation mentioned in
Section 9.3.1 shall be required for the purpose of reporting FTEs devoted
to the Research Collaboration as set forth in this Section 9.2. No later
than thirty (30) days after the end of each Collaboration Year Avanir shall
send a report relating to the FTEs provided by Avanir to the Research
Collaboration during such Collaboration Year. Without prejudice to any
other remedy available to AstraZeneca, any amount paid by AstraZeneca for
which Avanir has not provided the corresponding number of FTEs during such
Collaboration Year may be deducted by AstraZeneca from subsequent payments
to be made by AstraZeneca to Avanir for FTE funding hereunder and, if
necessary to recover the amount, from milestone payments and royalty
payments.
Each invoice shall be payable to Avanir within thirty (30) days after
receipt by AstraZeneca of a correct invoice with supporting documentation.
Payment shall be made to such bank account as Avanir shall have notified
AstraZeneca in writing.
9.3 Records Retention; Audit.
9.3.1 Avanir shall keep or cause to be kept accurate records or books of
account in accordance with applicable generally accepted accounting
principles that, in reasonable detail, fairly reflect the reimbursable
FTEs. Such books and records shall include attendance records, records
of the allocation of FTEs to the Research
Page 43 of 104
CONFIDENTIAL TREATMENT REQUESTED
Collaboration, and the accomplishment of activities measured against
the Research Plan, and shall be maintained by Avanir for at least ***
years following the end of the Calendar Year to which they pertain or
such longer period of time required by Applicable Law.
9.3.2 Upon the written request of AstraZeneca, Avanir shall permit a
certified public accountant or a person possessing similar
professional status and associated with an independent accounting firm
reasonably acceptable to the Parties to inspect during regular
business hours and no more than once *** and going back no more than
*** years after receipt of the respective invoice and report pursuant
to Section 9.2, nor more than once with respect to any such year, all
or any part of Avanir's records and books necessary to verify such
invoices and reports. The accounting firm shall enter into appropriate
obligations with Avanir to treat all information it receives during
its inspection in confidence. The accounting firm shall disclose to
Avanir and AstraZeneca only whether such invoices and reports are
correct and details concerning any discrepancies, but no other
information shall be disclosed to AstraZeneca. The charges of the
accounting firm shall be paid by AstraZeneca, except that if the FTEs
allocated to the Research Collaboration were less than *** percent
(***%) of what was required from Avanir during the period under
review, the charges shall be paid by Avanir.
10 CONSIDERATION
10.1 Total obligation. The research funding to be provided by AstraZeneca to
Avanir pursuant to Article 9 together with the payments payable by
AstraZeneca to Avanir pursuant to this Article 10 represent all of
AstraZeneca's financial obligations to Avanir hereunder and Avanir shall
not be entitled to any additional compensation or remuneration from
AstraZeneca under this Agreement. In consideration of the licences and
other rights
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 44 of 104
CONFIDENTIAL TREATMENT REQUESTED
granted by Avanir to AstraZeneca herein and subject to the terms and
conditions of this Agreement, AstraZeneca shall make the following payments
to Avanir:
10.1.1 Research Reimbursement Payment. AstraZeneca shall pay to Avanir ten
million U.S. Dollars ($10,000,000) within fifteen (15) days of the
Effective Date.
10.1.2 Development Milestones. Within forty-five (45) days of achievement
of each respective milestone as described in this Section 10.1.2 for
the first Licensed Compound or Licensed Product, AstraZeneca shall
make the corresponding payment to Avanir as follows:
(a) *** U.S. Dollars ($***) following the earlier of (i) the ***, and
(ii) the ***;
(b) *** U.S. Dollars ($***) following the ***;
(c) *** U.S. Dollars ($***) following the ***;
(d) *** U.S. Dollars ($***) following the date of ***;
(e) *** U.S. Dollars ($***) following ***; and
(f) *** U.S. Dollars ($***) following ***; and
(g) *** U.S. Dollars ($***) following ***; and
(h) *** U.S. Dollars ($***) following ***; and
(i) *** U.S. Dollars ($***) following ***; and
(j) *** U.S. Dollars ($***) following ***;
provided always that (i) when a milestone payment becomes due under
any of sub-sections (h) through (j) the geographically corresponding
milestone payment under sub-sections (e) through (g) shall also become
due, unless, for the avoidance of doubt, such milestone has become due
at a previous occasion; and (ii) should the first milestone payment
under sub-sections (h) through (j) become
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 45 of 104
CONFIDENTIAL TREATMENT REQUESTED
due (the date thereof the "Due Date") after the first milestone
payment having become due under Section 10.1.5, then the aggregate
amount paid under Section 10.1.5 up until the Due Date shall be
deducted from the milestone payments to be made under sub-sections (h)
through (j) until fully deducted.
10.1.3 Milestones for Additional Indications. Within forty-five (45) days
of the achievement of each respective milestone as described in this
Section 10.1.3 for the first Licensed Compound or Licensed Product
within an Other Indication, AstraZeneca shall make the corresponding
payment to Avanir as follows:
(a) *** U.S. Dollars ($***) following ***;
(b) *** U.S. Dollars ($***) following ***;
(c) *** U.S. Dollars ($***) following ***; and
(d) *** U.S. Dollars ($***) following ***.
10.1.4 Commercial Milestones on Annual Net Sales. At the end of the
Calendar Quarter in which the Annual Net Sales of the first Licensed
Product exceeds each respective milestone set forth below for the
first time, AstraZeneca shall make the corresponding payment to
Avanir, as follows:
(a) *** U.S. Dollars ($***) within *** days of the end of the
Calendar Quarter in which the Annual Net Sales of a Licensed
Product exceeds for the first time *** U.S. Dollars ($***); and
(b) *** U.S. Dollars ($***) within *** days of the end of the
Calendar Quarter in which the Annual Net Sales of a Licensed
Product exceeds for the first time *** U.S. Dollar ($***); and
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 46 of 104
CONFIDENTIAL TREATMENT REQUESTED
(c) *** U.S. Dollars ($***) within *** days of the end of the
Calendar Quarter in which the Annual Net Sales of a Licensed
Product exceeds for the first time *** U.S. Dollars ($***).
For the avoidance of doubt, in order to qualify for a payment under a)
- d) the Annual Net Sales shall emanate from Licensed Products based
on the ***.
10.1.5 Commercial Milestones on Aggregate Net Sales. At the end of the
Calendar Quarter in which the cumulative Net Sales of the first
Licensed Product under a Health Registration Approval on the basis of
a Surrogate Marker for which no milestone under Section 10.1.2(h),(i)
or (j) has become due exceeds for the first time each respective
milestone set forth below, AstraZeneca shall make the corresponding
payment to Avanir, as follows:
(a) *** U.S. Dollars ($***) within *** days of the end of the
Calendar Quarter in which the cumulative Net Sales exceeds for
the first time *** U.S. Dollars ($***); and
(b) *** U.S. Dollars ($***) within *** days of the end of the
Calendar Quarter in which the cumulative Net Sales exceeds for
the first time *** U.S. Dollars ($***); and
(c) *** U.S. Dollars ($***) within *** days of the end of the
Calendar Quarter in which the cumulative Net Sales exceeds for
the first time *** U.S. Dollars ($***); and
(d) *** U.S. Dollars ($***) within *** days of the end of the
Calendar Quarter in which the cumulative Net Sales exceeds for
the first time *** U.S. Dollars ($***).
provided, however, that upon the first milestone payment under Section
10.1.2(h) through (j) becoming due, no further milestone payment under
this Section shall
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 47 of 104
CONFIDENTIAL TREATMENT REQUESTED
become due. For the avoidance of doubt, in order to qualify for a
payment under subsections (a) through (d) above, the Net Sales shall
emanate from Licensed Products based on ***.
10.1.6 Each of the payments under Section 10.1.2 through 10.1.5 shall be
made by AstraZeneca no more than once under this Agreement,
collectively amounting to an aggregate maximum amount of three hundred
and thirty million U.S. Dollars ($330,000,000), irrespective of the
number of Licensed Compounds or Licensed Products that have achieved
the milestone events set forth in Sections 10.1.2 through 10.1.5, or
the number of countries or Major Markets in which such milestone
events have been achieved.
10.2 Royalties
In addition to the payments under Section 10.1.2 through 10.1.5,
AstraZeneca shall pay Avanir, with respect to each Licensed Product, the
following royalties on the Annual Net Sales of Licensed Products, on a ***
basis, in the Territory (provided that calculations for the Combination
Products are to be made in accordance with the formula set out in Section
10.3 and provided further that calculations for Sublicensee income are to
be made in accordance with Section 10.4):
(a) *** percent (***%) of Net Sales for that portion of Annual Net
Sales of such Licensed Product in the Territory that is less than
*** U.S. Dollars ($***);
(b) *** percent (***%) of Net Sales for that portion of Annual Net
Sales of such Licensed Product in the Territory that equals or
exceeds *** U.S. Dollars ($***) but is less than *** U.S. Dollars
($***);
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 48 of 104
CONFIDENTIAL TREATMENT REQUESTED
(c) *** percent (***%) of Net Sales for that portion of Annual Net
Sales of such Licensed Product in the Territory that equals or
exceeds *** U.S. Dollars ($***) but is less than *** U.S. Dollars
($***); and
(d) ***percent (***%) of Net Sales for that portion of Annual Net
Sales of such Licensed Product in the Territory that equals or
exceeds *** U.S. Dollars ($***).
For the avoidance of doubt, the calculation of royalties under this Section
10.2 shall be conducted separately for each Licensed Product. Thus, if
AstraZeneca sells more than one Licensed Product in the Territory, the
thresholds and ceilings in subsections (a) to (d) shall apply *** where a
Licensed Product is deemed to be all Licensed Products based on the ***.
10.3 Combination Products. With respect to Combination Products, the Net Sales
used for the calculation of the royalties under Section 10.2 shall be
determined as follows:
A Net Sales of the Combination
----- X Product, where:
A+B
A = *** of the Licensed Product, containing the ***, in the given
country.
B = *** of the ready-for-sale form of a product containing the ***,
in the given country.
In the event, however, that, in a specific country, (a) the other
therapeutically active ingredient(s) in such Combination Product are not
sold separately in such country, Net Sales shall be adjusted by multiplying
*** of such Combination Product by the fraction
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 49 of 104
CONFIDENTIAL TREATMENT REQUESTED
A/C, where C is the ***, and (b) if a Licensed Product containing such
Licensed Compound(s) is not sold separately, Net Sales shall be calculated
by multiplying actual Net Sales of such Combination Product by the fraction
(C-B)/C, where B is the *** and C is the ***. The standard sales price for
the Licensed Product containing such Licensed Compound(s) and for each
other active ingredient shall be for a quantity comparable to that used in
such Combination Product and of the same class, purity and potency. If, in
a specific country, both a Licensed Product containing the Licensed
Compound(s) and a product containing the other active ingredients in such
Combination Product are not sold separately, a market price for such
Licensed Product and such other active ingredients shall be negotiated by
the Parties in good faith based upon the costs, overhead and profit as are
then incurred for such Combination Product and all products then being made
and marketed by AstraZeneca and having an ascertainable market price that
are comparable to such Licensed Product or such other active ingredients,
as applicable. If, in a specific country, the foregoing calculations do not
fairly represent the value of the various active ingredients included in a
Combination Product or such prices cannot be determined for all active
ingredients by using such aforesaid method, the allocation of Net Sales for
such Combination Product shall be negotiated by the Parties in good faith
based on the relative value contributed by each component, such agreement
not to be unreasonably withheld or delayed.
10.4 Sublicensees. AstraZeneca shall not grant sublicenses under any or all of
this Agreement in *** without the prior express written consent of Avanir;
provided, however, no such consent shall be required in the event (i)
AstraZeneca demonstrates that pursuant to each such sublicense, the
reasonably anticipated economic benefits to Avanir will be no less
favourable on the whole than if the definition of "Net Sales" had applied
equally to the gross invoiced amount on sales of the Licensed Product by
Sublicensees under the sublicensing arrangement proposed; (ii) that such
sublicense was granted in order to
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 50 of 104
CONFIDENTIAL TREATMENT REQUESTED
satisfy concerns of Competition/Anti Trust authorities in *** or that a
sublicence was otherwise compelled to be granted pursuant to Applicable
Law; or (iii) AstraZeneca confirms in writing to Avanir that it will pay
royalties to Avanir from the sublicensing arrangement proposed by applying
for such arrangement a definition of the Net Sales as mentioned under
sub-clause (i). With respect to sublicenses granted by AstraZeneca outside
the *** as set forth under sub-clause (ii)), AstraZeneca shall pay to
Avanir an amount equal to *** percent (***%) of all sublicensing revenues
received by it or its Affiliates from Sublicensees whether comprising
license fees, milestone payments, royalties in respect of sales of Licensed
Product or Licensed Compound by Sublicensees to Third Parties, or other
similar or dissimilar payments in respect of the sublicensing of rights
under this Agreement and the right to commercialise Licensed Products and
Licensed Compounds. All such amounts received by AstraZeneca and its
Affiliates upon which Avanir is paid *** percent (***%) shall be deemed to
be Net Sales for the purpose of deciding the Annual Net Sales under Section
10.2 and shall be counted before any Net Sales received by AstraZeneca by
other means.
10.5 Reduction of Royalty.
10.5.1 Competition.
(a) In the event that, in a country in the Territory, generic
competition with respect to a Licensed Product occurs by products
having (a) the same active compound as the Licensed Compound
included in such Licensed Product or (b) a similar molecule
(where "similar molecule" means a chemical compound that is
claimed or covered by a Licensed Patent, a Joint Patent or an
AstraZeneca Patent) (each such product, a "COMPETING PRODUCT"),
and Net Sales of Licensed Products in such country drop in excess
of *** percent (***%) in a given Calendar Quarter compared to the
immediately preceding Calendar Quarter, then, subject to Section
10.5.1
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 51 of 104
CONFIDENTIAL TREATMENT REQUESTED
(b), for purposes of calculating the royalties of such Licensed
Product under Section 10.2 *** percent (***%) of the Net Sales in
such country shall be disregarded.
(b) Should the situation contemplated in Section 10.5.1 (a) occur in
a country following the expiration of the period stated in
Section 10.8.1 (a) or 10.8.2 (a), as applicable, for such country
then for the purposes of calculating the royalties of such
Licensed Product under Section 10.2 *** percent (***%) of the Net
Sales in such country shall be disregarded.
(c) The calculation of the royalty reduction under this Section
10.5.1 shall be conducted separately for each Licensed Product
where each separate Licensed Product is deemed to be all Licensed
Products based on the ***.
(d) If the number of units sold of a Competing Product represents ***
percent (***%) of the aggregate number of units sold of all
products within the same ATC class as the Licensed Product
concerned, including Licensed Products, in a country in the
Territory as reported by IMS or any comparable reporting agency
in a Calendar Year, then AstraZeneca shall have the right to
withdraw the relevant Licensed Product from sale in the country,
but such withdrawal shall not constitute a termination of
AstraZeneca's rights to such Licensed Products in that country.
10.5.2 Compulsory Licences. In the event that a court or a governmental
agency of competent jurisdiction requires AstraZeneca or an
AstraZeneca Affiliate or Sublicensee to grant a compulsory licence to
a Third Party permitting such Third Party to make and sell the
Licensed Product in a country in the Territory, then for the purposes
of calculating the royalties of such Licensed Product under Section
10.2, the applicable royalty rate shall be *** to that applicable to
the compulsory
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 52 of 104
CONFIDENTIAL TREATMENT REQUESTED
license, if ***. The calculation of the royalty *** under this Section
10.5.2 shall be conducted separately for each Licensed Product.
10.5.3 No Valid Claim. In the event that, and in such case from and after
the date on which, a Licensed Product is Exploited in a country and is
not covered by a Valid Claim in such country, then for the purposes of
calculating the royalties of such Licensed Product under Section 10.2,
*** percent (***%) of the Net Sales in such country shall be
disregarded. The calculation of the royalty *** under this Section
10.5.3 shall be conducted separately for each Licensed Product.
10.6 Royalty Stacking.
10.6.1 For Licensed Products sold by AstraZeneca or its Affiliates to Third
Parties (including Distributors), where the sum of royalty payments
owed by AstraZeneca and its Affiliates to Avanir and any Third Parties
exceeds *** percent (***%) of Net Sales for a given Licensed Product,
the royalty rate payable to Avanir shall be *** such that the
aggregate royalty rate payable on such Licensed Product, were all
Third Party royalties similarly ***, does not exceed *** percent
(***%) of Net Sales thereof.
10.6.2 In the case of a Licensed Product developed or commercialised by a
Sublicensee of AstraZeneca, where the payment of royalties by
AstraZeneca to Avanir is based upon "Net Sales" of the Sublicensee as
contemplated in clause (iii) of Section 10.4, the royalty *** set
forth in Section 10.5 and Section 10.6.1, to the extent applicable,
will apply.
10.7 Any *** set forth in Sections 10.5 and 10.6 shall be applied to the royalty
rate payable to Avanir under Section 10.2 in the order in which the event
triggering such *** occurs. Notwithstanding the foregoing, in no event
shall the royalty rate payable to Avanir under Section 10.2 be *** by more
than *** percent (***%) in any Calendar Quarter as a result
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 53 of 104
CONFIDENTIAL TREATMENT REQUESTED
of the cumulative *** set forth in Sections 10.5 and 10.6, provided,
however, that in the event of a royalty *** under Section 10.5.1 b) the
royalty rate payable to Avanir under Section 10.2 may be *** by up to ***
percent (***%). Credits not exhausted in any Calendar Quarter may be
carried into future Calendar Quarters, subject to the foregoing sentence.
10.8 Royalty Term. AstraZeneca's obligation to pay royalties (for the avoidance
of doubt including such amounts paid by AstraZeneca to Avanir under Section
10.4) shall commence, on a country-by-country basis, with respect to each
separate Licensed Product, on the date of *** of such Licensed Product in
such country. The obligation shall expire, on a country-by-country basis,
with respect to each separate Licensed Product:
10.8.1 in the case of any ***, on the later to occur of (a) the ***
anniversary of the First Commercial Sale of each Licensed Product,
respectively, in *** and (b) the expiration date in such country of
the *** to expire of any issued Licensed Patent, Joint Patent or
AstraZeneca Patent that includes at least one Valid Claim covering the
sale of such Licensed Product in such country; or
10.8.2 in the case of any ***, on the later to occur of (a) the ***
anniversary of the First Commercial Sale of each Licensed Product,
respectively, in such country and (b) the expiration date in such
country of the *** to expire of any issued Licensed Patent, Joint
Patent or AstraZeneca Patent that includes at least one Valid Claim
covering the sale of such Licensed Product in such country.
10.9 Sales Subject to Royalties. Sales between AstraZeneca, its Affiliates and
Sublicensees shall not be subject to royalties hereunder. Royalties shall
be calculated on AstraZeneca's and its Affiliates' sale of the Licensed
Products to a Third Party (including Distributors). Royalties shall be
payable only once for any given batch of the Licensed Products. For
purposes of determining Net Sales, the Licensed Product shall be deemed
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 54 of 104
CONFIDENTIAL TREATMENT REQUESTED
to be sold when *** and a "sale" shall not include, and no royalties shall
be payable on, *** by AstraZeneca, its Affiliates or Sublicensees of free
samples of Licensed Products or clinical trial materials containing
Licensed Compound, or *** of Licensed Products to patients under *** in the
United States or any similar programmes in other countries or other
transfers or dispositions for *** other than as therapeutic pharmaceutical
product in humans where AstraZeneca receives no compensation or
identifiable benefit therefrom. For the avoidance of doubt, AstraZeneca
shall pay Avanir royalties on *** of Licensed Products or Licensed
Compounds in the circumstances described in the immediately preceding
sentence if such *** result in revenue to AstraZeneca.
10.10 Royalty Payments. The royalties shall be calculated quarterly as of the
last day of March, June, September and December respectively, for the
Calendar Quarter ending on that date. AstraZeneca shall pay the royalties
in conjunction with the delivery of a written report to Avanir within sixty
(60) days after the end of each Calendar Quarter that shows, with respect
to each country and each Licensed Product, the sales volume and Net Sales
of the Licensed Products during such Calendar Quarter.
10.11 Licensed Improvements. For purposes of this Article 10, Licensed Products
shall include Licensed Improvements, if any.
10.12 Records Retention; Audit.
10.12.1 Until the *** anniversary of the Calendar Year in which a Licensed
Product is sold, AstraZeneca shall keep or cause to be kept accurate
records or books of account in accordance with applicable generally
accepted accounting principles showing the information that is
necessary for the accurate determination of the royalties due
hereunder with respect to the sale of such Licensed Product.
10.12.2 Upon the written request of Avanir, AstraZeneca shall permit a
certified public accountant or a person possessing similar
professional status and associated with
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 55 of 104
CONFIDENTIAL TREATMENT REQUESTED
an independent accounting firm acceptable to the Parties to inspect
during regular business hours and no more than *** a year and no more
than once with respect to any such year and going back no more than
*** years preceding the current year, all or any part of AstraZeneca's
records and books necessary to check the accuracy of the royalties
paid. The accounting firm shall enter into appropriate obligations
with AstraZeneca to treat all information it receives during its
inspection in confidence. The accounting firm shall disclose to Avanir
and AstraZeneca only whether the royalty reports are correct and
details concerning any discrepancies, but no other information shall
be disclosed to Avanir. The charges of the accounting firm shall be
paid by ***, except that if the royalties have been understated by
more than the lesser of (i) *** percent (***%) and (ii) $***, the
charges shall be paid by ***. AstraZeneca shall promptly pay any
shortages in royalty payments regardless of amount, together with
interest calculated at the rate of *** percent (*** %) per month or
such lesser maximum rate permitted by law. Any failure by Avanir to
exercise its right under this Section 10.12.2 with respect to a
Calendar Year within the time period allotted therefore, shall
constitute a waiver by Avanir of its right to later object to any
payments made by AstraZeneca under this Agreement during such Calendar
Year.
10.13 Mode of Payment. All payments set forth in this Article 10 shall be
remitted by wire transfer to the following bank account of Avanir or such
other account as Avanir may designate in writing to AstraZeneca:
***
10.14 Currency. All payments required under Article 9 and this Article 10 shall
be made in U.S. Dollars. For the purpose of computing the Net Sales of
Licensed Products sold in a currency other than U.S. Dollars, such currency
shall be converted from local currency to
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 56 of 104
CONFIDENTIAL TREATMENT REQUESTED
U.S. Dollars by AstraZeneca in accordance with the rates of exchange for
the relevant month for converting such other currency into U.S. Dollars
used by AstraZeneca's internal accounting systems on a consistent
company-wide basis, which are independently audited on an annual basis.
10.15 Taxes.
10.15.1 General. The royalties, milestones and other amounts payable by
AstraZeneca to Avanir pursuant to this Agreement ("PAYMENTS") shall
not be reduced on account of any taxes unless required by Applicable
Law. Avanir alone shall be responsible for paying any and all taxes
(other than withholding taxes or deduction of tax at source required
by Applicable Law to be paid by AstraZeneca) levied on it by account
of its receipt of any Payments it receives under this Agreement.
AstraZeneca shall deduct or withhold from the Payments any taxes that
it is required by Applicable Law to deduct or withhold.
Notwithstanding the foregoing, if Avanir is entitled under any
applicable tax treaty to a reduction of the rate of, or the
elimination of, applicable withholding tax, it may deliver to
AstraZeneca or the appropriate governmental authority (with the
assistance of AstraZeneca to the extent that this is reasonably
required and is expressly requested in writing) the prescribed forms
necessary to reduce the applicable rate of withholding tax or to
relieve AstraZeneca of its obligation to withhold tax, and AstraZeneca
shall apply the reduced rate of withholding tax, or dispense with
withholding tax, as the case may be, provided that AstraZeneca has
received evidence, in a form satisfactory to AstraZeneca, of Avanir's
delivery of all applicable forms (and, if necessary, its receipt of
appropriate governmental authorization) at least fifteen (15) days
prior to the time that the Payments are due. If, in accordance with
the foregoing, AstraZeneca withholds any amount, it shall pay to
Avanir the balance when due, make timely payment to the proper taxing
authority of the withheld amount, and send to Avanir proof of such
payment within thirty (30) days following that payment. For the
purposes of this
Page 57 of 104
CONFIDENTIAL TREATMENT REQUESTED
Agreement, the stated amount of the Payments payable by AstraZeneca
shall include any sales tax that Avanir may be required to collect.
10.15.2 Indirect Taxes. Notwithstanding anything contained in Section
10.15.1, this Section 10.15.2 shall apply with respect to Indirect
Taxes. Each of the Parties shall be responsible for the payment of
Indirect Taxes assessed against it by law. If any Indirect Taxes are
chargeable in respect of any Payments, AstraZeneca shall pay such
Indirect Taxes at the applicable rate in respect of any such Payments
following the receipt, where applicable, of an Indirect Taxes invoice
in the appropriate form issued by Avanir in respect of those Payments,
such Indirect Taxes to be payable on the due date of the payment of
the Payments to which such Indirect Taxes relates.
10.15.3 Imports. For the avoidance of doubt, the Parties acknowledge and
agree that none of the milestones or royalties payable under this
Agreement are related to the licence (or right) to import or any
import of Licensed Products. The receiving Party shall be responsible
for any import clearance, including payment of any import duties and
similar charges, in connection with any Licensed Products transferred
to such Party under this Agreement. The Parties shall co-operate in
accordance with Applicable Law to ensure where permissible no duties
are paid on imported clinical products. Where duties are payable, the
Parties shall co-operate to ensure that the Party responsible for
shipping values the clinical product in accordance with Applicable
Laws and minimises where permissible any such duties and related
import taxes that are not reclaimable from the relevant authorities.
11 REIMBURSEMENT OF DEVELOPMENT STOCK AND PRE-CLINICAL STUDIES
11.1 Orders Placed with ***
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 58 of 104
CONFIDENTIAL TREATMENT REQUESTED
11.1.1 Development Stock. As of the Effective Date Avanir has ordered, for
the amount of *** kilograms of Good Manufacturing
Practices quality AVP 26452 Compound (the "***").
11.1.2 Preformulation, Formulation Development and Clinical Manufacturing.
As of the Effective Date Avanir has ordered, from *** of the AVP 26452
Compound (the "***") of a quality and with characteristics, and
otherwise in accordance with Good Manufacturing Practices and the
specifications and other terms, sufficient to use it for clinical
trials concerning the AVP 26452 Compound and otherwise in the
Development Project in accordance with Good Clinical Practice (the
"***"). The *** will be delivered by ***.
11.1.3 *** Toxicology Study in Monkeys. As of the Effective Date Avanir has
ordered, for an amount not exceeding *** U.S. Dollars ($***), from ***
toxicology study of AVP 26452 in monkeys (the "***"). The study will
be conducted in compliance with current Good Laboratory Practices and
will suitable for use in future regulatory filings.
11.2 Contractual Relationships. The Parties recognise that the ***, the *** and
the *** are contractual relationships solely between Avanir and ***, and
Avanir and ***, and Avanir and ***, respectively although under the terms
of these Orders Avanir has the right to assign its rights under each Order
to AstraZeneca. Upon AstraZeneca's written notice to Avanir, Avanir shall
assign the *** or the *** or the ***, whichever is provided for in the
notice, to AstraZeneca at no additional cost in accordance with its terms.
Unless and until such respective Order is so assigned to AstraZeneca Avanir
undertakes to use its reasonable commercial efforts at all times during the
term of the relevant Order to enforce its rights under such Order against
***, ***, or ***, whichever is applicable, and to allow AstraZeneca to
recommend action to be taken, and comment on each proposed
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 59 of 104
CONFIDENTIAL TREATMENT REQUESTED
action to be taken, which recommendations and comments Avanir shall take
into reasonable account.
11.3 Reimbursement for ***, *** and ***. AstraZeneca shall, under the express
condition that the *** is suitable for conversion into Good Manufacturing
Practices quality AVP 26452 Compound, that the *** are in compliance with
Section 11.1.2 hereof and that the *** is in compliance with Section
11.1.3, reimburse Avanir for any amounts paid to ***, *** and *** under the
orders mentioned under Section 11.1. The Parties hereby acknowledge a need
for receipt of *** of Licensed Product *** to conduct anticipated studies.
The *** presently calls for only ***. AstraZeneca shall reimburse to Avanir
the cost of procuring such *** of *** of Licensed Product (including the
***) provided, however, Avanir shall be responsible for such costs to the
extent they exceed, together with the costs under the current ***, ***
percent (***%) of the ***.
For the avoidance of doubt, in connection with any such reimbursement,
AstraZeneca shall be entitled to the benefit of any ***, whether credited
at the time of payment or paid thereafter to Avanir. Such *** shall be
deducted, in accordance with the terms of the respective Order provided
always, for the avoidance of doubt, that such terms are in compliance with
Section 11.1 hereof. Such reimbursement shall be made within *** days of
AstraZeneca receiving invoices thereon, such invoices to be issued (a) no
earlier than on the Effective Date for payments made by Avanir prior to the
Effective Date, and (b) no earlier than within *** days after payment is
made by Avanir, for any payments made after the Effective Date by Avanir.
Notwithstanding anything to the contrary stated herein, under no
circumstances will the amount reimbursable hereunder by AstraZeneca exceed
*** U.S. Dollars ($***). Immediately upon reimbursement by AstraZeneca
under this Section 11.3, all right, title and interest in and to the
Development Stock shall transfer from Avanir to AstraZeneca without
additional consideration.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 60 of 104
CONFIDENTIAL TREATMENT REQUESTED
12 OWNERSHIP OF INTELLECTUAL PROPERTY
12.1 Ownership of Collaboration Results. The Parties shall each own an ***
interest in any and all Collaboration Results. Each Party shall promptly
disclose to the other Party in writing the development, making, conception
or reduction to practice of any Collaboration Results, and shall, and does
hereby, assign, and shall cause its majority-owned subsidiaries (and its
other Affiliates which are Affiliates both as of the Effective Date and
during the relevant periods referred to above) and its and their employees
and agents, as applicable, and use its best reasonable efforts to cause its
Affiliates other than those referred to above, and its and their employees
and agents, as applicable, to so assign, to such other Party, without
additional compensation, such right, title and interest in and to any
Collaboration Results, as is necessary to fully effect the joint ownership
provided for in the foregoing sentence.
Assignment and transfer of all such Collaboration Results as contemplated
by this Section 12.1 shall occur instantly and automatically upon the
development, making, conception or reduction to practice of such
Collaboration Results, as the case may be, and shall not require any
further deeds or documents to be exchanged between the Parties.
12.2 Ownership of Development Results. AstraZeneca shall exclusively own all
Development Results. Avanir shall promptly disclose to AstraZeneca in
writing the development, making, conception or reduction to practice of any
Development Results, and shall, and does hereby, assign, and shall cause
its majority-owned subsidiaries (and its other Affiliates which are
Affiliates both as of the Effective Date and at the relevant periods
referred to above) and its and their employees and agents, as applicable
and use its best reasonable efforts to cause its Affiliates other than
those now mentioned and its and their employees and agents, as applicable,
to so assign, to AstraZeneca, without additional compensation, such right,
title and interest in and to any Development Results. Assignment and
transfer of all such Development Results shall occur instantly and
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 61 of 104
CONFIDENTIAL TREATMENT REQUESTED
automatically upon the development, making, conception or reduction to
practice of such Development Results, as the case may be, and shall not
require any further deeds or documents to be exchanged between the Parties.
12.3 AstraZeneca Improvements. AstraZeneca shall exclusively own all AstraZeneca
Improvements and AstraZeneca Patents. Avanir shall promptly disclose to
AstraZeneca in writing the development, making, conception or reduction to
practice of any Results that constitute AstraZeneca Improvements, and
shall, and does hereby, assign, and shall cause its Affiliates and its and
their employees and agents, as applicable, to so assign, to AstraZeneca,
without additional compensation, such right, title and interest in and to
any such Results. Assignment and transfer of all such Results shall occur
instantly and automatically upon the development, making, conception or
reduction to practice of such Results, as the case may be, and shall not
require any further deeds or documents to be exchanged between the Parties.
12.4 Improvements outside the Research Collaboration.
12.4.1 Avanir shall without delay disclose to AstraZeneca any Licensed
Improvements Controlled by Avanir or its majority-owned subsidiaries
(or its other Affiliates that are Affiliates both as of the Effective
Date and at all relevant times thereafter) and shall use its best
reasonable efforts to obtain rights to so disclose to AstraZeneca any
Licensed Improvements Controlled by any of its Affiliates other than
those referred to above outside the scope of the Research
Collaboration during any period in which AstraZeneca owes royalties to
Avanir pursuant to Section 10.2 or 10.4 and provide AstraZeneca with
all relevant Information and materials with respect to such Licensed
Improvements. AstraZeneca shall have the right, at any time, to reject
any such Licensed Improvement on written notice to Avanir, in which
event, this Agreement shall cease to apply to such Licensed
Improvement.
12.4.2 All Licensed Improvements shall automatically be included within the
scope of this Agreement, subject to AstraZeneca's right to reject any
such Licensed Improvement pursuant to Section 12.4.1. Any Information
with respect to such
Page 62 of 104
CONFIDENTIAL TREATMENT REQUESTED
Licensed Improvements that is not covered or claimed by a Patent and
which is not generally known and is necessary or useful for the
Exploitation of the Licensed Compounds or the Licensed Products shall
be considered Licensed Know-How, and the Parties will add such
Information to the Licensed Know-How Manual. Any Patents to the extent
covering Licensed Improvements shall be considered Licensed Patents.
13 ADVERSE EVENT REPORTING
13.1 On or within sixty (60) days of the Effective Date, the Parties will enter
into a safety agreement in the form of the agreement attached at Exhibit A
(the "SAFETY AGREEMENT"). In the event of any inconsistency between the
provisions of the Safety Agreement and the provisions of this Agreement,
the provisions of this Agreement shall prevail.
14 CONFIDENTIALITY & NON-DISCLOSURE
14.1 General Obligations
14.1.1 In this Agreement, "CONFIDENTIAL INFORMATION" shall, subject to
Section 14.3, mean any and all data, results, know-how (including the
Licensed Know-How), plans, business information and other Information,
whether oral or in writing or in any other form, disclosed before, on
or after the Effective Date by one Party to the other Party, including
the terms of this Agreement. For the avoidance of doubt, the
AstraZeneca Background Technologies and AstraZeneca Improvements shall
be deemed to constitute Confidential Information proprietary to
AstraZeneca. At all times during the term of this Agreement and for a
period of *** years following termination or expiration hereof, each
Party (the "RECEIVING PARTY") shall, and shall cause its officers,
directors, employees, agents, Affiliates and Sublicensees to, keep
confidential and not publish or otherwise disclose and not use,
directly or indirectly, for any purpose, any Confidential Information
provided to it by the
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 63 of 104
CONFIDENTIAL TREATMENT REQUESTED
other Party (the "DISCLOSING Party"), except to the extent such
disclosure or use is expressly permitted by the terms of this
Agreement or is reasonably necessary for the performance of this
Agreement.
14.1.2 Avanir recognises that by reason of AstraZeneca's status as an
exclusive licensee pursuant to the grants under Section 3.1,
AstraZeneca has an interest in Avanir's retention in confidence of
certain information of Avanir. Accordingly, until the expiration of
AstraZeneca's exclusive position with respect to a Licensed Product or
a Licensed Improvement under Section 3.7, or receipt of earlier
written consent from AstraZeneca, Avanir shall, and shall cause its
Affiliates and their respective officers, directors, employees and
agents to, keep completely confidential, and not publish or otherwise
disclose, and not use directly or indirectly for any purpose that
would cause such publication or disclosure inconsistent with this
Agreement, any such information relating to (a) such Licensed Product
or Licensed Improvement, including the Licensed Compounds included
therein and any Regulatory Documentation, including the Health
Registration Approvals, with respect thereto, (b) the Collaboration
Results relating thereto, or (c) the Exploitation of such Licensed
Product or Licensed Improvement, including any development, sales or
marketing plans therefore (the "ASTRAZENECA INFORMATION"), except to
the extent (x) the AstraZeneca Information is in the public domain
through no fault of Avanir, its Affiliates or any of their respective
officers, directors, employees or agents, (y) such disclosure or use
would be permitted under Section 14.2, or (z) such disclosure or use
is otherwise expressly permitted by the terms of this Agreement or is
reasonably necessary for the performance of this Agreement. For
clarification, the disclosure by Avanir to AstraZeneca, or any of its
Affiliates, or by AstraZeneca, or any of its Affiliates, to Avanir of
AstraZeneca Information shall not cause such information to cease to
be subject to the confidentiality provisions of this Section 14.1.
14.2 Permitted Disclosures. Each Party may disclose Confidential Information to
the extent that such disclosure is:
Page 64 of 104
CONFIDENTIAL TREATMENT REQUESTED
14.2.1 made in response to a valid order of a court of competent
jurisdiction or other competent authority; provided, however, that the
Receiving Party shall first have given notice to the Disclosing Party
and given the Disclosing Party a reasonable opportunity to quash any
such order or obtain a protective order requiring that the
Confidential Information and documents that are the subject of such
order be held in confidence by such court or authority or, if
disclosed, be used only for the purpose for which the order was
issued; and provided further that if such order is not quashed or a
protective order is not obtained, the Confidential Information
disclosed in response to such court or governmental order shall be
limited to that information that is legally required to be disclosed
in response to such court or governmental order;
14.2.2 made by the Receiving Party to a Health Authority as may be
necessary or useful in connection with any filing, application or
request for a Health Registration Approval; provided, however, that
reasonable measures shall be taken to assure confidential treatment of
such information, to the extent such protection is available;
14.2.3 made by the Receiving Party to a patent authority as may be
necessary or useful for purposes of obtaining or enforcing a Patent
(consistent with the terms and conditions of Article 19); provided,
however, that reasonable measures shall be taken to assure
confidential treatment of such information, to the extent such
protection is available;
14.2.4 otherwise required by law; provided, however, that the Receiving
Party shall (a) provide the Disclosing Party with reasonable advance
notice of and an opportunity to comment on any such required
disclosure to the extent practicable, (b) if requested by the
Disclosing Party, seek confidential treatment with respect to any such
disclosure to the extent available, and (c) use good faith efforts to
incorporate the comments of the Disclosing Party in any such
disclosure or request for confidential treatment; or
Page 65 of 104
CONFIDENTIAL TREATMENT REQUESTED
14.2.5 made by AstraZeneca or its Affiliates, Distributors or Sublicensees
to Third Parties as may be necessary or useful in connection with the
Exploitation of the Licensed Compounds, the Licensed Products or
Improvements as contemplated by this Agreement, including
subcontracting or sublicensing transactions in connection therewith.
Notwithstanding the foregoing, in the event that either Party is required
by Applicable Law or the requirements of a national securities exchange or
another similar regulatory body to disclose this Agreement, in whole or in
part, the Parties shall reasonably agree on a redacted version of this
Agreement as necessary to protect the Confidential Information of the
Parties prior to making such disclosure.
14.3 Exclusions. Notwithstanding the foregoing, Confidential Information shall
not include any information that:
14.3.1 is or hereafter becomes part of the public domain by public use,
publication, general knowledge or the like through no wrongful act,
fault or negligence on the part of the Receiving Party;
14.3.2 can be demonstrated by documentation or other competent proof to
have been in the Receiving Party's or its Affiliates' possession prior
to disclosure by the Disclosing Party;
14.3.3 is subsequently received by the Receiving Party or its Affiliates
from a Third Party or Sublicensee without any obligations who is not
bound by any obligation of confidentiality with respect to said
information;
14.3.4 is generally made available to Third Parties by the Disclosing Party
without restriction on disclosure; or
14.3.5 is independently developed by or for the Receiving Party or its
Affiliates without reference to the Disclosing Party's Confidential
Information.
Specific aspects or details of Confidential Information shall not be deemed
to be within the public domain or in the possession of the Receiving Party
merely because the Confidential Information is embraced by more general
information in the public domain
Page 66 of 104
CONFIDENTIAL TREATMENT REQUESTED
or in the possession of the Receiving Party. Further, any combination of
Confidential Information shall not be considered in the public domain or in
the possession of the Receiving Party merely because individual elements of
such Confidential Information are in the public domain or in the possession
of the Receiving Party unless the combination and its principles are in the
public domain or in the possession of the Receiving Party.
14.4 Publications and Presentations. The Parties acknowledge that scientific
publications must be strictly monitored to prevent any adverse effect from
premature publication of Results. Accordingly, Avanir shall not publish,
present or otherwise disclose any material related to the Exploitation of
the Licensed Compounds, the Licensed Products or Improvements without the
prior written consent of AstraZeneca.
14.5 Press Release. The Parties have agreed upon the content of a press release
which shall be issued substantially in the form attached hereto as Schedule
7, the release of which the Parties will coordinate in order to accomplish
the same promptly upon execution and delivery of this Agreement. Except to
the extent already disclosed in a press release or other public
communication, no public announcement concerning this Agreement, its
subject matter or the transactions described herein shall be made, either
directly or indirectly, by Avanir or AstraZeneca or their respective
Affiliates, except as may be legally required by applicable laws,
regulations, judicial order, or required by stock exchange or quotation
system rule without first obtaining the approval of the other Party and
agreement upon the nature, text, and timing of such announcement, which
approval and agreement shall not be unreasonably withheld or delayed. The
Party desiring to make any such voluntary public announcement shall provide
the other Party with a written copy of the proposed announcement in
reasonably sufficient time prior to public release to allow such other
Party to comment upon such announcement, prior to public release. In the
case of press releases or other public communications legally required, or
required by stock exchange or quotation system rule, to be made, the Party
making such press release or public announcement shall provide to the other
Party a copy of the proposed press release or public announcement in
written or electronic form upon such advance notice as is practicable under
the circumstances for the purpose of allowing the
Page 67 of 104
CONFIDENTIAL TREATMENT REQUESTED
notified Party to review and comment upon such press release or public
announcement. Under such circumstances, the releasing Party shall not be
obligated to delay making any such press release or public communication
beyond the time when the same is required to be made in order to facilitate
review and comment by the receiving Party.
14.6 Use of Name
14.6.1 Neither Party shall mention or otherwise use the name, insignia,
symbol, trademark, trade name or logotype of the other Party or its
Affiliates in any publication, press release, promotional material or
other form of publicity without the prior written consent of the other
Party (which shall not be unreasonably withheld or delayed), except
for those disclosures for which consent has previously been obtained.
The restrictions imposed by this Section 14.6.1 shall not prohibit
either Party from making any disclosure identifying the other Party
that is required by Applicable Law or the requirements of a national
securities exchange or another similar regulatory body, provided that
any such disclosure shall be governed by this Article 14. Further, the
restrictions imposed on each Party under this Section 14.6 are not
intended, and shall not be construed, to prohibit a Party from
identifying the other Party in its internal business communications,
provided that any Confidential Information in such communications
remains subject to this Article 14.
14.6.2 Notwithstanding the foregoing, AstraZeneca and its Affiliates and
Sublicensees shall have the right to use the name of Avanir and its
Affiliates to the extent necessary or useful in connection with the
Exploitation of the Licensed Compounds, Licensed Products and
Improvements as contemplated by this Agreement, including
subcontracting and sublicensing transactions in connection therewith.
15 TRADEMARKS
AstraZeneca shall have the sole right to select Trademarks for the
marketing and sale of the Licensed Products in the Territory. AstraZeneca
shall own such Trademarks and all
Page 68 of 104
CONFIDENTIAL TREATMENT REQUESTED
rights and goodwill with respect thereto. Avanir shall not, and shall cause
its majority-owned subsidiaries (and its other Affiliates that are
Affiliates both as of the Effective Date and at all relevant times) to use
its best reasonable efforts to cause its Affiliates other than those
referred to above, not to use any trademark that is the same as or
confusingly similar to, misleading or deceptive with respect to or that
dilutes the Trademarks.
16 REPRESENTATIONS, WARRANTIES AND COVENANTS
16.1 Avanir represents, warrants to AstraZeneca as of the Effective Date that:
16.1.1 Avanir is duly organized, validly existing and in good standing
under the laws of the State of California, with full corporate power
and authority to execute and deliver this Agreement and to perform its
obligations hereunder
16.1.2 This Agreement has been duly executed and delivered by Avanir and
constitutes the valid and binding obligation of Avanir, enforceable
against Avanir in accordance with its terms, subject to bankruptcy,
insolvency or similar laws of general application affecting the rights
of creditors, and subject to equitable principles limiting rights to
specific performance or other equitable remedies. The execution,
delivery and performance of this Agreement have been duly authorized
by all necessary action on the part of Avanir, its officers and
directors on behalf of Avanir and no other corporate proceedings on
the part of Avanir are necessary to authorize such execution, delivery
and performance.
16.1.3 Avanir, is the sole and exclusive owner of the entire right, title
and interest in the Licensed Patents and to its Knowledge the Licensed
Know-How, and is entitled to grant the licences herein. Avanir has not
placed, and to its Knowledge there does not exist, upon the Licensed
Patents and Licensed Know-How any encumbrance or lien. No claim has
been made to Avanir of ownership by any Third Party of any right or
interest in or to the Licensed Patents and Licensed Know-How. The
granting of the licenses to AstraZeneca hereunder does not violate any
right known to Avanir of any Third Party and, and to its Knowledge,
Avanir has
Page 69 of 104
CONFIDENTIAL TREATMENT REQUESTED
obtained all necessary consents from Third Parties in order to allow
it to enter into its obligations under this Agreement.
16.1.4 The Licensed Patents listed on Schedule 4 represent all Patents
within Avanir and its Affiliates' Control relating to the AVP 26452
Compound, the AVP 26452 Product, and the Back-Up Compound(s) as of the
Effective Date. The Licensed Patents have been filed and maintained
properly and correctly and all applicable fees have been paid on or
before the due date for payment. In respect of the pending United
States patent applications included in the Licensed Patents, Avanir
has presented all relevant prior art of which it and the inventors are
aware to the United States Patent and Trademark Office.
16.1.5 To the Knowledge of Avanir and its Affiliates, the Licensed Patents
and the Licensed Know-How existing as of the Effective Date are
subsisting and are not invalid or unenforceable, in whole or in part.
16.1.6 To the Knowledge of Avanir and its Affiliates, the disclosing,
copying, making, assigning, licensing or the Exploitation pursuant to
this Agreement of the Licensed Patents or Licensed Know-How hereunder
will not infringe or conflict with any Patent or other IP Protection
Right of any Person. To the Knowledge of Avanir and its Affiliates,
the conception, development and reduction to practice of the Licensed
Patents and Licensed Know-How existing as of the Effective Date have
not constituted or involved the misappropriation of trade secrets or
other rights or property of any Person.
16.1.7 As of the Effective Date, to the Knowledge of Avanir and its
Affiliates, there is no actual infringement or threatened infringement
of the Licensed Patents by any Person. Furthermore, there is no claim,
litigation, action, suit, proceeding investigation, arbitration
proceedings or other proceedings pending or, to the Knowledge of
Avanir and its Affiliates, threatened affecting, in whole or in part,
the Licensed Patents or Licensed Know-How at law, in equity or
otherwise, in, before, or by, any court, arbitration tribunal, or
governmental authority, and there is not currently outstanding any
unsatisfied judgment or outstanding order,
Page 70 of 104
CONFIDENTIAL TREATMENT REQUESTED
injunction, decree, stipulation or award (whether rendered by a court,
an administrative agency or by an arbitrator) domestic or foreign, or
arbitrator relating, in whole or in part, against any of the Licensed
Patents or the Licensed Know-How.
16.1.8 To the Knowledge of Avanir and its Affiliates the Licensed Know-How
has been kept confidential or has been disclosed to Third Parties only
under terms of confidentiality. To the Knowledge of Avanir and its
Affiliates no breach of such confidentiality has been committed by any
Third Party. For the avoidance of doubt, the chemical structures under
the Licensed Patents have not, other than to the extent they have been
part of a patent application that is in the public domain, been
disclosed to any Third Party.
16.1.9 Execution of this Agreement and consummation of the transactions
contemplated hereby and thereby will not: (i) result in the violation
of or conflict with any of the terms and provisions of the articles of
incorporation or by-laws of Avanir; (ii) result in a violation or
breach of, or constitute (with or without due notice or lapse of time
or both) a default (or give rise to any right of termination,
modification, cancellation or acceleration or loss of material
benefits) under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, contract, agreement, permit, license,
lease, purchase order, sales order, arrangement or other commitment or
obligation to which Avanir is a Party; or (iii) violate any order,
writ, injunction, decree, statute, treaty, rule or regulation
applicable to Avanir, except such violations, breaches or defaults
with respect to clauses (ii) and (iii) above which would not have a
material adverse effect, either alone or in the aggregate.
16.1.10 Avanir has not been debarred and is not subject to debarment
pursuant to Section 306 of the United States Federal Food, Drug, and
Cosmetic Act.
16.1.11 Avanir shall obtain from each of its Affiliates, sublicensees,
employees and agents rights to any and all Information that relate to
the Licensed Compounds or Licensed Products, such that AstraZeneca
shall, by virtue of this Agreement,
Page 71 of 104
CONFIDENTIAL TREATMENT REQUESTED
receive from Avanir, without payments beyond those required by
Articles 9 and 10, the licences and other rights granted to
AstraZeneca hereunder.
16.2 AstraZeneca represents and warrants to Avanir as of the Effective Date
that:
16.2.1 AstraZeneca is duly organized, validly existing and in good standing
under the laws of England with full power and authority to execute and
deliver this Agreement and to perform its obligations hereunder.
16.2.2 AstraZeneca represents and warrants to Avanir that this Agreement
has been duly executed and delivered by AstraZeneca and constitutes
the valid and binding obligation of AstraZeneca, enforceable against
AstraZeneca in accordance with its terms. The execution, delivery and
performance of this Agreement have been duly authorized by all
necessary action on the part of AstraZeneca, its officers and
directors on behalf of AstraZeneca.
16.2.3 AstraZeneca has not been debarred and is not subject to debarment.
16.3 Avanir hereby covenants to AstraZeneca that (i) it will assign to
AstraZeneca all of its rights, titles and interests in and to all
Regulatory Documentation, including, to the extent permitted by Applicable
Law, all Health Registration Approvals, Controlled by Avanir as of the
Effective Date and from time to time during the term of this Agreement;
(ii) it will duly execute and deliver, or cause to be duly executed and
delivered, such instruments and shall do and cause to be done such acts and
things, including the filing of such assignments, agreements, documents and
instruments, as may be necessary under, or as AstraZeneca may reasonably
request in connection with, or to carry out more effectively the purpose to
better assure and confirm unto AstraZeneca its rights under Section
16.3(i).; (iii) it will not enter into any agreement, whether written or
oral, inconsistent with the rights and licenses granted hereunder, and (iv)
to its Knowledge it will not use in any capacity, in connection with the
services to be performed under this Agreement, any Person who has been
debarred pursuant to Section 306 of the United States Federal Food, Drug,
and Cosmetic Act, or who is the subject of a conviction described in such
section. Avanir agrees to inform AstraZeneca in writing promptly if it or
any Person who is performing services hereunder is debarred or is the
subject of a
Page 72 of 104
CONFIDENTIAL TREATMENT REQUESTED
conviction described in Section 306, or if any action, suit, claim,
investigation or legal or administrative proceeding is pending or, to the
best of Avanir's or its Affiliates' Knowledge, is threatened, relating to
the debarment or conviction of Avanir or any Person performing services
hereunder.
16.4 AstraZeneca hereby covenants to Avanir that to its Knowledge it will not
use in any capacity, in connection with the services to be performed under
this Agreement, any Person who has been debarred pursuant to Section 306 of
the United States Federal Food, Drug, and Cosmetic Act, or who is the
subject of a conviction described in such section. AstraZeneca agrees to
inform Avanir in writing promptly if it or any Person who is performing
services hereunder is debarred or is the subject of a conviction described
in Section 306, or if any action, suit, claim, investigation or legal or
administrative proceeding is pending or, to AstraZeneca's or its
Affiliates' Knowledge, is threatened, relating to the debarment or
conviction of AstraZeneca or any Person performing services hereunder.
17 INDEMNITY
17.1 Indemnification of Avanir In addition to any other remedy available to
Avanir, AstraZeneca shall indemnify, defend and hold harmless Avanir, its
Affiliates and its and their respective former and current directors,
officers and employees in full and on demand, from and against any and all
Losses incurred by them to the extent resulting from or arising out of or
in connection with any claims made or suits brought by a Sublicensee or
Third Party (collectively, "THIRD PARTY CLAIMS") against Avanir, its
Affiliates or its or their respective former and current directors,
officers or employees that arise out of or result from:
(a) the development, manufacture, use, sale, storage or handling of a
Licensed Compound or Licensed Product by AstraZeneca or its
Affiliates or their representatives, agents, licensees,
Sublicensees or subcontractors, or any actual or alleged
violation of law resulting therefrom (with the exception of
Losses based on infringement or misappropriation of intellectual
property rights);
Page 73 of 104
CONFIDENTIAL TREATMENT REQUESTED
(b) the breach by AstraZeneca, its Affiliates or Sublicensees of any
of their material obligations, covenants, representations or
warranties set forth in this Agreement; or
(c) the use, storage or handling by any Third Party of a Licensed
Compound or a Licensed Product, the direct or indirect source of
which is AstraZeneca, its Affiliates or Sublicensees;
provided that the foregoing indemnification shall not apply to any Loss to
the extent such Loss is caused by the breach of this Agreement or the
negligence or wilful misconduct of Avanir or its Affiliates and their
current or former employees, officers and directors.
17.2 Indemnification of AstraZeneca In addition to any other remedy available to
AstraZeneca, Avanir shall indemnify, defend and hold harmless AstraZeneca,
its Affiliates, and Sublicensees and its and their respective former and
current directors, officers and employees in full and on demand, from and
against any and all Losses incurred by them to the extent resulting from or
arising out of or in connection with any Third Party Claims against
AstraZeneca, its Affiliates or its or their respective former or current
directors, officers or employees that arise out of or result from:
(a) negligence or wilful misconduct by Avanir or its Affiliates
concerning their participation in the Research Collaboration or
in performing consulting services or conducting IND studies under
this Agreement; or
(b) the breach by Avanir of any of its material obligations,
covenants, representations or warranties set forth in this
Agreement; or
(c) Avanir's handling of the Licensed Compounds under the Research
Collaboration; or
(d) Exploitation of any Licensed Compounds or Licensed Products by
Avanir, its Affiliates or sublicensees after a termination by
AstraZeneca pursuant to Section 21.3, 21.4 or 21.6 or by Avanir
pursuant to Section 21.5;
provided that the foregoing indemnification shall not apply to any Loss to
the extent such Loss is caused by the breach of this Agreement or the
negligence or wilful misconduct of
Page 74 of 104
CONFIDENTIAL TREATMENT REQUESTED
AstraZeneca, its Affiliates, or their Sublicensees and their current or
former employees, officers and directors.
17.3 Notice of Claim An Indemnified Party shall give the Indemnifying Party
prompt written notice of any Loss or discovery of fact upon which such
Indemnified Party intends to base a request for indemnification under
Section 17.1 or 17.2 (an "INDEMNIFICATION CLAIM NOTICE"). In no event shall
the Indemnifying Party be liable for any Loss that results from any delay
in providing the Indemnification Claim Notice. Each Indemnification Claim
Notice shall contain a description of the claim and the nature and amount
of the Loss claimed (to the extent that the nature and amount of such Loss
is known at such time). The Indemnified Party shall furnish promptly to the
Indemnifying Party copies of all papers and official documents received in
respect of any such Loss. For the avoidance of doubt, all indemnification
claims in respect of a Party, its Affiliates or their respective current or
former directors, officers, employees and agents (each, an "INDEMNITEE")
shall be made solely by such Party to this Agreement.
17.4 Indemnification Procedures. The obligations of an Indemnifying Party under
this Article 17 shall be governed by and contingent upon the following:
17.4.1 Assumption of Defence. At its option, the Indemnifying Party may
assume the defence of any Third Party Claim by giving written notice
to the Indemnified Party within fourteen (14) days after the
Indemnifying Party's receipt of an Indemnification Claim Notice. The
assumption of the defence of a Third Party Claim by the Indemnifying
Party shall not be construed as an acknowledgement that the
Indemnifying Party is liable to indemnify any Indemnitee in respect of
the Third Party Claim, nor shall it constitute a waiver by the
Indemnifying Party of any defences it may assert against any
Indemnified Party's claim for indemnification.
17.4.2 Control of Defence. Upon the assumption of the defence of a Third
Party Claim by the Indemnifying Party:
Page 75 of 104
CONFIDENTIAL TREATMENT REQUESTED
(a) the Indemnifying Party may appoint as lead counsel in the defence
of the Third Party Claim any legal counsel selected by the
Indemnifying Party, which shall be reasonably acceptable to the
Indemnified Party, and
(b) the Indemnifying Party shall not be liable to the Indemnified
Party for any legal expenses subsequently incurred by such
Indemnified Party or any Indemnitee in connection with the
analysis, defence or settlement of the Third Party Claim, except
as expressly provided in Section 17.4.3. In the event that it is
ultimately determined that the Indemnifying Party is not
obligated to indemnify, defend or hold harmless an Indemnitee
from and against the Third Party Claim, the Indemnified Party
shall reimburse the Indemnifying Party for any and all costs and
expenses (including lawyers' fees and costs of suit) and any Loss
incurred by the Indemnifying Party in its defence of the Third
Party Claim with respect to such Indemnified Party or Indemnitee.
17.4.3 Right to Participate in Defence. Without limiting Section 17.4.1
or17.4.2, any Indemnitee shall be entitled to participate in, but not
control, the defence of a Third Party Claim and to retain counsel of
its choice for such purpose; provided, however, that such retention
shall be at the Indemnitee's own expense unless, (a) the Indemnifying
Party has failed to assume the defence and retain counsel in
accordance with Section 17.4.1 (in which case the Indemnified Party
shall control the defence), or (b) the interests of the Indemnitee and
the Indemnifying Party with respect to such Third Party Claim are
sufficiently adverse to prohibit the representation by the same
counsel of both parties under Applicable Law, ethical rules or
equitable principles.
17.4.4 Settlement. With respect to Losses in connection with Third Party
Claims, where the Indemnifying Party has assumed the defence of a
Third Party Claim in accordance with Section 17.4.1, (i) the
Indemnifying Party shall have authority to consent to the entry of any
judgement, enter into any settlement or otherwise dispose of such
Losses, provided that it obtains the prior written consent of the
Page 76 of 104
CONFIDENTIAL TREATMENT REQUESTED
Indemnified Party which consent shall not be unreasonably withheld or
delayed and (ii) no Indemnified Party or Indemnitee shall admit any
liability with respect to, or settle, compromise or discharge, any
Third Party Claim without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld
or delayed.
17.4.5 Cooperation. If the Indemnifying Party chooses to defend or
prosecute any Third Party Claim, the Indemnified Party shall, and
shall cause each other Indemnitee to, cooperate in the defence or
prosecution thereof and shall furnish such records, information and
testimony, provide such witnesses and attend such conferences,
discovery proceedings, hearings, trials and appeals as may be
reasonably requested in connection therewith. Such cooperation shall
include access during normal business hours by the Indemnifying Party
to, and reasonable retention by the Indemnified Party of, records and
information that are reasonably relevant to such Third Party Claim,
and making the Indemnified Party, the Indemnitees and its and their
employees and agents available on a mutually convenient basis to
provide additional information and explanation of any records or
information provided, and the Indemnifying Party shall reimburse the
Indemnified Party for all of its related reasonable out-of-pocket
expenses.
17.4.6 Expenses. Except as expressly provided above, the reasonable and
verifiable costs and expenses, including fees and disbursements of
counsel, incurred by the Indemnified Party in connection with any
claim shall be reimbursed on a Calendar Quarter basis by the
Indemnifying Party, without prejudice to the Indemnifying Party's
right to contest the Indemnified Party's right to indemnification and
subject to refund in the event the Indemnifying Party is ultimately
held not to be obligated to indemnify the Indemnified Party.
17.5 Limitation of Liability. Neither Party shall be liable to the other for
consequential, indirect or punitive damages. The foregoing limitation is
not intended to limit a Party's obligations under Section 17.1 or Section
17.2. For the avoidance of doubt, no Party can recover from the other Party
more than once for a single cause of action under an
Page 77 of 104
CONFIDENTIAL TREATMENT REQUESTED
indemnity granted by an indemnifying Party pursuant to this Agreement. The
foregoing sentence shall not be construed to preclude recovery in respect
of multiple claims arising from a single event or series of events. Neither
Party shall have liability with respect to any breach of any of such
Party's representations and warranties under this Agreement for any
individual item where the Loss relating thereto is less than *** U.S.
Dollars ($***) but when a Loss exceeds such amount then the liable Party
shall be liable for the entire amount of the Losses. The foregoing shall
not be construed to limit liability pursuant to Section 17.1 or Section
17.2. Each Party shall take and shall cause its Affiliates to take all
reasonable steps to mitigate any Loss upon becoming aware of any event
which would reasonably be expected to, or does, give rise thereto,
including incurring costs only to the minimum extent necessary to remedy a
breach that gives rise to the Loss. EXCEPT AS EXPRESSLY SET FORTH IN THIS
AGREEMENT, AVANIR HEREBY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES,
WHETHER EXPRESS OR IMPLIED, AND FURTHER DISCLAIMS ANY EXPRESS OR IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY
ITEM LICENSED TO ASTRAZENECA PURSUANT TO THIS AGREEMENT.
18 MAINTENANCE AND PROSECUTION OF PATENTS
18.1 Licensed Patents. AstraZeneca, through counsel of its choosing that is
reasonably acceptable to Avanir, *** shall be responsible for obtaining,
prosecuting (including any interferences, reissue proceedings and
re-examinations), and maintaining throughout the world the Licensed
Patents. In this regard, AstraZeneca shall (a) file and prosecute Patent
applications to secure Patent rights for the Licensed Patents and such
other patentable Licensed Know-How in the Major Markets and such other
countries as determined by AstraZeneca or as mutually agreed by AstraZeneca
and Avanir; and (b) upon issuance, maintain such Patents in full force in
such countries. AstraZeneca shall regularly confer with Avanir regarding
strategies and tactics for the conduct of the
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 78 of 104
CONFIDENTIAL TREATMENT REQUESTED
foregoing activities. AstraZeneca shall give due regard to Avanir's views
in the conduct of the foregoing activities; and in particular to material
suggestions, which may be reasonably implemented provided that such
suggestions are otherwise consistent with AstraZeneca's direction.
Notwithstanding what is stated in the first sentence in the immediately
preceding paragraph AstraZeneca shall not prior to the *** select counsel
for obtaining, prosecuting and maintaining the Licensed Patents different
from the counsel that was used for these purposes by Avanir immediately
prior to the Effective Date unless such counsel has a conflict of interest
in relation to AstraZeneca's cardiovascular business or there are other
similar significant obstacles using such counsel. Upon AstraZeneca
selecting a different counsel the Parties will endeavour to establish
procedures to capture the experience and knowledge in the possession of
such Avanir's former counsel with respect to the Licensed Patents and the
prosecution thereof.
18.2 Election not to Prosecute. If AstraZeneca elects not to pursue or continue
the filing, prosecution (including any interferences, reissue proceedings
and re-examinations) or maintenance of a Licensed Patent, a Joint Patent or
an AstraZeneca Patent in a particular country, AstraZeneca shall so notify
Avanir promptly in writing and in good time to enable Avanir to meet any
deadlines by which an action must be taken to establish or preserve any
such rights in such Licensed Patent, such Joint Patent or such AstraZeneca
Patent in such country. Upon receipt of any such notice by AstraZeneca or
if, at any time, AstraZeneca fails to initiate any such action within ***
after a request by Avanir that it do so (or, if after initiating any
requested action, AstraZeneca at any time thereafter fails to diligently
pursue such action), with the consent of AstraZeneca, not to be
unreasonably withheld or notice whether consent has been given unreasonably
delayed, Avanir shall have the right, but not the obligation, to pursue the
filing or registration, or support the continued prosecution or
maintenance, of such Licensed Patent, Joint Patent
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 79 of 104
CONFIDENTIAL TREATMENT REQUESTED
or an AstraZeneca Patent at its expense in such country. For the avoidance
of doubt, if Valid Claims issue as a result of such activity, the
applicable royalty rate to be paid in such jurisdiction shall be that
applied to Valid Claims unless AstraZeneca at its discretion rejects such
Valid Claim, in which case the licence granted hereunder shall not cover
such Valid Claim and AstraZeneca shall have no rights under such Valid
Claim.
18.3 Collaboration Results, Joint Patents and AstraZeneca Patents. AstraZeneca,
through counsel of its choosing that is reasonably acceptable to Avanir,
*** shall be responsible for obtaining, prosecuting (including any
interferences, reissue proceedings and re-examinations), and maintaining
throughout the world the Joint Patents and the AstraZeneca Patents in its
reasonable discretion. In this regard, AstraZeneca shall (a) file and
prosecute Patent applications to secure Patent rights for the Joint
Patents, the AstraZeneca Patents in the Major Markets and such other
countries as determined by AstraZeneca or as mutually agreed by AstraZeneca
and Avanir; and (b) upon issuance, maintain such Patents in full force in
such countries. AstraZeneca shall regularly confer with Avanir regarding
strategies and tactics for the conduct of the foregoing activities.
AstraZeneca shall give due regard to Avanir's views in the conduct of the
foregoing activities; and in particular to material suggestions, which may
be reasonably implemented provided that such suggestions are otherwise
consistent with AstraZeneca's direction.
None of AstraZeneca, Avanir or any of their respective Affiliates or
Sublicensees shall Exploit any Joint Patent or Collaboration Results
outside the scope of this Agreement without the consent of the other Party,
and Avanir shall not assign, pledge, encumber or otherwise transfer any of
its rights in any Collaboration Results or Joint Patents without
AstraZeneca's prior written consent.
18.4 Cooperation
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 80 of 104
CONFIDENTIAL TREATMENT REQUESTED
18.4.1 Each Party shall, and shall cause its Affiliates to, assist and
cooperate with the other Party, as such other Party may reasonably
request from time to time in connection with its activities under
Sections 18.1 and 18.3. Each Party shall keep the other Party
currently informed of all steps to be taken in the preparation and
prosecution of all applications filed by such first Party (the
"PROSECUTING PARTY") according to Sections 18.1 and Section 18.3 and
shall furnish the non-Prosecuting Party with copies of such
applications for Patents, amendments thereto and other related
correspondence to and from patent offices, and, to the extent
reasonably practicable, permit the non-Prosecuting Party an
opportunity to offer its comments thereon before the Prosecuting Party
makes a submission to a patent office which could materially affect
the scope or validity of the patent coverage that may result. The
non-Prosecuting Party shall offer its comments, if any, promptly, but
in no event shall the Prosecuting Party be required to delay any such
submission.
18.4.2 The Prosecuting Party shall keep the non-Prosecuting Party apprised
of any activities related thereto by providing the other Party (i)
with a draft of new applications and foreign filing texts at least ***
before the intended filing; (ii) promptly with copies of all official
actions, amendments and responses, which affect the scope of any
claims; (iii) with foreseen amendments and responses to official
actions which affect the scope of any claim at least *** before the
action due date although it is expressly recognised that time-lines
now stated are indicative only and shall not be binding on the
Prosecuting Party.
18.4.3 Other than reasonably considering Avanir's comments, AstraZeneca or
its Affiliates shall have sole discretion with respect to the
preparation, filing, prosecution and maintenance of the Licensed
Patents, the Joint Patents and the AstraZeneca Patents.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 81 of 104
CONFIDENTIAL TREATMENT REQUESTED
18.4.4 The non-Prosecuting Party undertakes at the reasonable request of
the Prosecuting Party and at the Prosecuting Party's expense for the
non-Prosecuting Party's out-of-pocket costs to sign, or have signed,
any and all documents necessary in connection with the filing,
prosecution, maintenance, extension and enforcement of the Licensed
Patents, the Joint Patents and the AstraZeneca Patents, as the case
may be, and to take such other necessary actions as the Parties or
their Affiliates may reasonably request from each other in connection
with the Licensed Patents, the Joint Patents and the AstraZeneca
Patents.
18.4.5 Upon the request by a Party, to be put no more frequent than every
*** starting *** of the anniversary of the Effective Date, a Party
shall update the other on the status of all filings for Licensed
Patents, Joint Patents and AstraZeneca Patents including information
on the country particulars, filing status and other information that
such first Party may find relevant.
19 ENFORCEMENT OF PATENTS
19.1 Rights and Procedures. In the event that either Party supposes that a Third
Party or Sublicensee may be infringing any of the Licensed Patents, Joint
Patents or AstraZeneca Patents, such Party shall promptly notify the other
Party in writing, identifying the alleged infringer and the alleged
infringement complained of and furnishing the information upon which such
determination is based. AstraZeneca shall be entitled, in its sole
discretion but after notifying Avanir (if time permits), through counsel of
its choosing, to take any measures it deems appropriate to stop such
infringing activities by such Third Party or Sublicensee in any part of the
Territory or to grant to the infringing Third Party or Sublicensee adequate
rights and licences necessary for continuing such activities in the
Territory. Upon reasonable request by AstraZeneca, Avanir shall give
AstraZeneca all reasonable information and assistance, including allowing
AstraZeneca access to Avanir's files and documents and to Avanir's
personnel who may have
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 82 of 104
CONFIDENTIAL TREATMENT REQUESTED
possession of relevant information and, if necessary for AstraZeneca to
prosecute any legal action, joining in the legal action as a party at its
own expense. In the event AstraZeneca fails within *** following notice of
such infringement, or earlier notifies Avanir in writing of its intent not,
to take commercially appropriate steps to remove any infringement of any
Licensed Patent, Joint Patent or AstraZeneca Patent that is likely to have
a material adverse effect on the sale of the Licensed Product, and
AstraZeneca has not granted the infringing Third Party or Sublicensee
rights and licences to continue its otherwise infringing activities, Avanir
shall have the right to do so at Avanir's expense; provided, however, that
if AstraZeneca has commenced negotiations with an alleged infringer for
discontinuance of such infringement within such *** period, AstraZeneca
shall have an additional *** to conclude its negotiations before Avanir may
bring suit for such infringement. Upon reasonable request by Avanir and at
Avanir's cost and expense, AstraZeneca shall give Avanir all reasonable
information and assistance in connection with such suit for infringement.
19.2 Notwithstanding what is stated in Section 19.1, Avanir shall within ***
advise AstraZeneca of receipt of any notice of (a) any certification filed
under the U.S. "Drug Price Competition and Patent Term Restoration Act" of
1984 (21 United States Code Section 355(b)(2)(A)(iv) or (j)(2)(A)(vii)(IV))
("ANDA ACT") claiming that any Licensed Patent, Joint Patent or AstraZeneca
Patent is invalid or unenforceable or claiming that the Licensed Patents,
Joint Patents or AstraZeneca Patents will not be infringed by the
Manufacture, use, marketing or sale of a product for which an application
under the ANDA ACT is filed, or (b) any equivalent or similar certification
or notice in any other jurisdiction. The Parties' rights and obligations
with respect to any legal action as a result of such certification shall be
as set forth in this Article 19, provided that within *** of such notice
AstraZeneca shall notify Avanir as to whether or not it elects to prosecute
such infringement.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 83 of 104
CONFIDENTIAL TREATMENT REQUESTED
19.3 Recovery. Any amounts recovered by either Party pursuant to Section 19.1,
whether by settlement or judgment, shall be used to reimburse the Parties
for their reasonable costs and expenses in making such recovery (which
amounts shall be allocated pro rata if insufficient to cover the totality
of such expenses), with any remainder being retained by or paid to
AstraZeneca and, to the extent attributable to lost sales of Licensed
Products, being deemed "***" for which AstraZeneca shall pay Avanir any
royalties that may be owed with respect to such ***. The Party pursuing any
action under Section 19.1 will bear all payments awarded against or agreed
to be paid by such Party pursuant to such action, including any costs or
expenses incurred that exceed the amounts recovered by such Party, provided
that AstraZeneca shall have the right to offset *** percent (***%) of such
amounts (including such costs and expenses) against the milestone payments
and royalties payable under Article 10; and provided further that no
royalty payment when due, regardless of the amount or number of credits
available to AstraZeneca in accordance with this Agreement, shall be
reduced by more than *** percent (***%) in any Calendar Quarter. Credits
not exhausted in any Calendar Quarter may be carried into future Calendar
Quarters subject to the foregoing sentence.
20 POTENTIAL THIRD PARTY RIGHTS
20.1 Third Party Licences. If, in the opinion of AstraZeneca, the Exploitation
of the Licensed Compounds or Licensed Products by AstraZeneca, its
Affiliates or any of their Sublicensees infringes or misappropriates any
Patent or any IP Protection Right of a Third Party in any country, such
that AstraZeneca or any of its Affiliates, Distributors or Sublicensees, in
AstraZeneca's sole opinion, cannot Exploit the Licensed Compounds or the
Licensed Products in such country without infringing the Patent or IP
Protection Rights of such Third Party (a "TRIGGERING EVENT"), then,
AstraZeneca shall have the first right, but not the obligation, through
counsel of its choosing, to negotiate and obtain a licence from such Third
Party as reasonably necessary for AstraZeneca and its Affiliates
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 84 of 104
CONFIDENTIAL TREATMENT REQUESTED
and Sublicensees to Exploit the Licensed Compounds and Licensed Products in
such country. Nothing contained in this Section 20.1 shall be construed to
limit AstraZeneca's right to terminate this Agreement pursuant to Section
21.4.
20.2 Invalidity or Unenforceability Defences or Actions
20.2.1 In the event that a Third Party or Sublicensee asserts, as a defence
or as a counterclaim in any infringement action under Section 19.1,
that any Licensed Patent, Joint Patent or AstraZeneca Patent is
invalid or unenforceable, then the Party pursuing such infringement
action shall promptly give written notice to the other Party.
AstraZeneca shall have the first right, but not the obligation,
through counsel of its choosing, to respond to such defence or defend
against such counterclaim (as applicable), including the right to
settle or otherwise compromise such claim. If AstraZeneca notifies
Avanir in writing that it does not wish to respond to such defence or
defend against, or settle, such counterclaim (as applicable), Avanir
shall, at its sole cost and expense, have the right to respond to such
defence or defend against such counterclaim (as applicable); provided,
however, that Avanir shall obtain the written consent of AstraZeneca
prior to ceasing to defend, settling or otherwise compromising such
defence or counterclaim.
20.2.2 Similarly, if a Third Party or Sublicensee asserts, in a declaratory
judgment action or similar action or claim filed by such Third Party
or Sublicensee, that any Licensed Patent, Joint Patent or AstraZeneca
Patent is invalid or unenforceable, then the Party first becoming
aware of such action or claim shall promptly give written notice to
the other Party. AstraZeneca shall have the first right, but not the
obligation, through counsel of its choosing, to defend against such
action or claim, including the right to settle or otherwise compromise
such claim. If AstraZeneca notifies Avanir in writing that it does not
wish to respond to or defend against or settle such action or claim,
Avanir shall, at its sole cost and expense, have the right to defend
against such action or claim; provided, however,
Page 85 of 104
CONFIDENTIAL TREATMENT REQUESTED
that Avanir shall obtain the written consent of AstraZeneca prior to
ceasing to defend, settling or otherwise compromising any such action
or claim.
20.3 Third Party Litigation. In the event of any actual or threatened suit
against Avanir, AstraZeneca or its Affiliates, Sublicensees, Distributors
or customers alleging that the Exploitation of Licensed Compounds or
Licensed Products or that the Exploitation of a Licensed Patent, Joint
Patents, AstraZeneca Patent, the Licensed Know-How, the Collaboration
Results, or any part thereof by or on behalf of AstraZeneca under this
Agreement infringes the Patent or IP Protection Rights of any Person (an
"INFRINGEMENT SUIT"), the Party first becoming aware of such Infringement
Suit shall promptly give written notice to the other Party. AstraZeneca
shall have the first right, but not the obligation, through counsel of its
choosing, to assume direction and control of the defence of claims arising
therefrom (including the right to settle such claims at its sole
discretion). If AstraZeneca notifies Avanir in writing that it does not
wish to assume such direction and control, Avanir shall have the right, but
not the obligation to, at its sole cost and expense, defend against such
claims; provided, however, that Avanir shall obtain the written consent of
AstraZeneca prior to ceasing to defend, settling or otherwise compromising
such claims.
20.4 Cooperation. Avanir will provide to AstraZeneca all reasonable assistance
requested by AstraZeneca in connection with any action, claim or suit under
Section 20.2 or 20.3, including allowing AstraZeneca access to Avanir's
files and documents and to Avanir's personnel who may have possession of
relevant information. In particular Avanir will promptly make available to
AstraZeneca, ***, all information in its possession or control that it is
aware will assist AstraZeneca in responding to any such action, claim or
suit under Section 20.2 or 20.3.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 86 of 104
CONFIDENTIAL TREATMENT REQUESTED
21 TERM AND TERMINATION
21.1 Term. This Agreement shall become effective on the Effective Date and shall
continue in full force and effect, unless earlier terminated in accordance
with this Article 21, during the Collaboration Term and thereafter for as
long as AstraZeneca is pursuing pre-clinical research or other activities
or clinical development of one or more Licensed Compounds or
commercialising Licensed Products for which royalties are owed to Avanir
pursuant to Article 10.
21.2 Collaboration Term. The Collaboration Term shall commence on the Effective
Date and, unless the Agreement is terminated pursuant to Sections 21.3,
21.4, 21.5, 21.6 or 21.9 or the Research Collaboration is terminated by
AstraZeneca pursuant to Section 5.2, 21.6 or 21.9, continue until the later
of (a) the expiration of the *** Collaboration Year, and (b) such date
until which the Parties may have agreed that AstraZeneca shall provide
funding to Avanir in accordance with Section 9.1.
21.3 Termination by AstraZeneca. AstraZeneca shall have the right, in its sole
discretion, after the *** to terminate this Agreement in its entirety or
with respect to one or more countries in the Territory upon *** prior
written notice; provided, however, that during the Collaboration Term such
termination shall not take effect until *** of the date of such notice or
upon the date when the Collaboration Term expires (provided always that
such termination does never take effect prior to the expiration of the ***
notice period), whichever is the earlier.
In the event that AstraZeneca terminates this Agreement pursuant to this
Section 21.3 before the end of the Collaboration Term, AstraZeneca shall
make a lump sum payment to Avanir to compensate Avanir for such early
termination in an amount equal to the forecasted FTE funding due to Avanir
pursuant to Article 9.1 above for the *** following immediately after the
date of AstraZeneca providing notice of termination; provided,
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 87 of 104
CONFIDENTIAL TREATMENT REQUESTED
however, that AstraZeneca shall have no obligation to make such payment in
the event it terminates this Agreement pursuant to Section 21.5, 21.6 or
21.9.
21.4 Termination for Infringement of Third Party Rights.
21.4.1 If a Triggering Event occurs with respect to a country, AstraZeneca
shall have the right upon written notice to Avanir to terminate this
Agreement with respect to such country if at *** (a) AstraZeneca is
unable to obtain such a licence on commercially reasonable terms or
(b) AstraZeneca in good faith believes that negotiation with a Third
Party pursuant to Article 20 with respect to such country is not
likely to result in a commercially reasonable agreement; provided,
however, that AstraZeneca shall have the right to terminate this
Agreement with respect to all of Europe if such country is in Europe
and AstraZeneca shall have the right to terminate this Agreement in
its entirety if such country is or is in a Major Market.
21.4.2 If a Third Party institutes an Infringement Suit with respect to a
country, AstraZeneca shall have the right upon written notice to
Avanir to terminate this Agreement with respect to such country if (a)
within *** of filing, such Infringement Suit is not settled, dismissed
or otherwise disposed of on terms reasonably acceptable to
AstraZeneca, or (b) AstraZeneca in good faith believes that the
outcome of such Infringement Suit is not likely to be favourable;
provided, however, that AstraZeneca shall have the right to terminate
this Agreement with respect to all of Europe if such country is in
Europe and AstraZeneca shall have the right to terminate this
Agreement in its entirety if such country is or is in a Major Market.
21.5 Termination for Material Breach. In the event that either Party (the
"BREACHING PARTY") shall be in material default in the performance of any
of its material obligations under this Agreement, in addition to any other
right and remedy the other Party (the "COMPLAINING PARTY") may have, the
Complaining Party may terminate this Agreement in its entirety by
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 88 of 104
CONFIDENTIAL TREATMENT REQUESTED
*** prior written notice (the "NOTICE PERIOD") to the Breaching Party,
specifying the breach and its claim of right to terminate, provided always
that the termination shall not become effective at the end of the Notice
Period if the Breaching Party cures the breach complained about during the
Notice Period (or, if such default cannot be cured within such *** period,
if the Breaching Party commences actions to cure such default within the
Notice Period and thereafter diligently continues such actions); provided,
however, that in the event that AstraZeneca is the Party in material
default and the default is with respect to AstraZeneca's failure to comply
with its obligation to use Commercially Reasonable Efforts as required
under Section 8.1 with respect to the Licensed Products in a particular
***, Avanir shall have the right to terminate this Agreement only after it
complies with Section 8.2 and only with respect to such *** and not in its
entirety. It is understood that termination pursuant to this Section 21.5
shall be a remedy of last resort and may be invoked only in the case where
the breach cannot be reasonably remedied by the payment of money damages.
If either Party initiates a dispute resolution procedure as permitted under
this Agreement within *** following the end of the Notice Period to resolve
the dispute for which termination is being sought and is diligently
pursuing such procedure, including any litigation following therefrom, the
termination shall become effective only if and when allowed through such
dispute resolution procedure finally resolved. This Section 21.5 defines
exclusively the Parties' right to terminate in case of any material breach
of contract.
21.6 Change of Control. Upon a Change of Control of Avanir at any time during
the Collaboration Term, by which Avanir becomes controlled by a company
with a market capitalization in excess of *** U.S. Dollars ($***) and that
has material parts of its operations in the health care industry,
AstraZeneca shall have the right with immediate effect, by delivering
written notice of termination to Avanir at any time within *** after the
date of such Change of Control, to (a) terminate this Agreement in its
entirety; or (b)
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 89 of 104
CONFIDENTIAL TREATMENT REQUESTED
terminate only the Research Collaboration thereby ending the Collaboration
Term; or (c) terminate Sections 3.6, 6.3.2 and 8.4 and have the IF, if
established, dissolved. In the event AstraZeneca exercises the option under
(b), AstraZeneca shall be under no obligation to provide Avanir with any
further compensation pursuant to Article 9. Following such termination of
the Collaboration Term, (x) Sections 3.6, 6.3.2 and 8.4 shall immediately
cease to be in effect and the IF, if established, shall be dissolved, and
(y) Avanir shall promptly provide AstraZeneca with all Collaboration
Results generated by it under the Research Collaboration and not previously
provided to AstraZeneca and shall promptly return to AstraZeneca all
AstraZeneca Information and all other Confidential Information of
AstraZeneca, including any and all copies thereof, and those portions of
any documents, memoranda, notes, studies, analyses or other material
prepared by or on behalf of Avanir that incorporate or are derived from
such Confidential Information. For the avoidance of doubt, in the event of
such termination, Avanir shall have no further rights to use any
Collaboration Results, AstraZeneca Information or other Confidential
Information of AstraZeneca for any purpose. The Agreement shall remain
valid and in full force and effect in all other respects. Upon any other
Change of Control of Avanir during the Research Collaboration, AstraZeneca
shall be entitled with immediate effect by delivering written notice of
termination to Avanir to terminate the Research Collaboration upon its
reasonable determination during the *** period following the Change of
Control in case Avanir (i) has failed to provide the *** required by this
Agreement, (ii) has reassigned ***, (iii) has reprioritised its research
programs away from the Research Collaboration, or (iv) has otherwise
materially failed to deliver services as required under the Research Plan.
In such event, the consequences of termination of the Research
Collaboration shall be as set forth above following termination of the
Research Collaboration.
21.7 Consequences of Termination.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 90 of 104
CONFIDENTIAL TREATMENT REQUESTED
21.7.1 Return of Material; Termination of Rights.
(a) In the event of termination of this Agreement in its entirety by
AstraZeneca pursuant to Section 21.3, 21.4 or 21.6, or by Avanir
pursuant to Section 21.5: (i) all rights and licences granted to
AstraZeneca under this Agreement shall terminate, and (ii) each
Party shall return all data, files, records and other materials
in its possession or control containing or comprising the other
Party's Information, or other Confidential Information to which
such first Party does not retain rights hereunder (except one
copy of which may be retained by the returning Party solely for
archival purposes).
(b) In the event of termination of this Agreement with respect to one
or more countries by AstraZeneca pursuant to Section 21.3, 21.4
or 21.6, or by Avanir pursuant to Section 21.5: (i) all rights
and licences granted to AstraZeneca under this Agreement shall
terminate with respect to such country or countries, and (ii)
each Party shall return all data, files, records and other
materials in its possession or control containing or comprising
the other Party's Information or other Confidential Information
with respect to such country or countries to which such first
Party does not retain rights hereunder (except one copy of which
may be retained by the returning Party solely for archival
purposes). For the avoidance of doubt, AstraZeneca shall have the
right to retain all such Information, including Confidential
Information, that is necessary or useful for AstraZeneca to
Exploit Licensed Products and Improvements in the Territory.
(c) In the event of termination of this Agreement in its entirety or
for one or more countries by AstraZeneca pursuant to Section 21.5
or 21.9, Avanir shall deliver or otherwise return all data,
files, records and other materials in its possession or control
relating to the Licensed Compounds and Licensed Product or
containing or comprising AstraZeneca's Information or other
Confidential Information with respect to such country or
countries
Page 91 of 104
CONFIDENTIAL TREATMENT REQUESTED
regarding which the Agreement has been terminated (except one
copy of which may be retained by Avanir solely for archival
purposes) and, without prejudice to any licence or right granted
hereunder for any country regarding which this Agreement remains
in force, all licences and other rights granted by Avanir to
AstraZeneca under Article 3 shall continue in perpetuity and
shall be fully paid up and AstraZeneca shall have no further
obligations under Articles 9 and 10.
21.7.2 Transfer of Materials. In the event of termination of this Agreement
by AstraZeneca pursuant to Section 21.3, 21.4 or 21.6 or by Avanir
pursuant to Section 21.5, (a) a copy of any and all documentation and
data owned or controlled by AstraZeneca and in tangible form at the
time of termination of the Agreement that has been generated with
respect to Licensed Compounds, Licensed Products, their respective
manufacture and that which is necessary to enable Avanir to continue
development of a Licensed Product and the commercialisation thereof
(collectively, the "ASTRAZENECA PRODUCT DATA"), shall be provided to
Avanir, and Avanir may use such AstraZeneca Product Data at its
discretion on a non-exclusive basis, but only to the extent necessary
to enable Avanir to continue development of and to commercialise a
Licensed Product, and (b) if such termination occurs after a Licensed
Product has received Health Registration Approval (including price
approval, if applicable), AstraZeneca shall, if permitted under local
laws and regulations, promptly transfer to Avanir at Avanir's cost and
expense any and all Health Registration Approvals obtained for the
Licensed Products as well as any and all Regulatory Documentation and
regulatory applications submitted to Health Authorities for the
Licensed Product, provided that Avanir shall indemnify and hold
harmless AstraZeneca and its Affiliates, Distributors and Sublicensees
from any Losses with respect to the use of the AstraZeneca Product
Data or the Exploitation of Licensed Compounds or Licensed Products
under such Health Registration Approvals pursuant to Article 17 and
any such AstraZeneca Product Data shall be subject to the
confidentiality obligations set forth in Article 14. Avanir shall pay
to
Page 92 of 104
CONFIDENTIAL TREATMENT REQUESTED
AstraZeneca, in consideration for the foregoing transfer of the
AstraZeneca Product Data and, if applicable, the Health Registration
Approvals and other Regulatory Documentation following termination by
AstraZeneca in a situation where AstraZeneca considers termination of
this Agreement reasonably necessary in order to ***, or, under the
specific circumstance where upon termination at any time following
completion of a ***, a royalty of *** percent (***%) of Net Sales
(provided that, for purposes of this Section 21.7.2, references to
AstraZeneca in such definition shall be deemed to be references to
Avanir) of each Licensed Product Exploited by or on behalf of Avanir,
its Affiliates or sublicensees from the First Commercial Sale of each
such Licensed Product in a country until the *** anniversary of such
First Commercial Sale in such country.
21.7.3 Grant Back. In the event of termination of this Agreement in its
entirety by AstraZeneca pursuant to Section 21.3, 21.4 or 21.6 or by
Avanir pursuant to Section 21.5, Avanir shall have the right to elect,
on written notice to AstraZeneca, for a period of *** from such
termination, to obtain from AstraZeneca a non-exclusive,
royalty-bearing licence under any Grant-Back Patents to the extent
necessary for Avanir to continue the development and commercialisation
of Licensed Compounds as developed by AstraZeneca up to the point of
termination of this Agreement, provided that Avanir shall indemnify
and hold harmless AstraZeneca and its Affiliates, Distributors and
Sublicensees from any Losses with respect to the Exploitation of
Licensed Compounds or Licensed Products under such licence pursuant to
Article 17. Avanir shall pay AstraZeneca a royalty in respect of such
licence, on terms to be agreed between AstraZeneca and Avanir. Avanir
shall reimburse AstraZeneca for its reasonable costs and expenses
incurred in the filing, prosecution and maintenance of the Grant-Back
Patents. For the avoidance of doubt, the rights granted to Avanir
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 93 of 104
CONFIDENTIAL TREATMENT REQUESTED
hereunder are restricted solely to Licensed Compounds and Licensed
Products and AstraZeneca does not grant any rights whatsoever to any
other compounds or products or to any IP Protection Rights other than
to the Grant-Back Patents as set forth above. For purposes of this
Section 21.7.3, "GRANT-BACK PATENTS" means any Patents owned or
otherwise Controlled by AstraZeneca as of the effective date of such
termination that claim the Licensed Compounds or Licensed Products, as
applicable, solely as such Licensed Compounds or Licensed Products
exist as of the termination of this Agreement by AstraZeneca pursuant
to Section 21.3, 21.4 or 21.6 or by Avanir pursuant to Section 21.5,
and that, as of such termination, AstraZeneca is free to licence to
Avanir.
21.7.4 Supply Obligations. In the event of termination of this Agreement in
its entirety or with respect to one or more countries by AstraZeneca
pursuant to Section 21.3, 21.4 or 21.6 or by Avanir pursuant to
Section 21.5 and in order for Avanir to smoothly continue the
commercialisation of the Licensed Compounds and Licensed Products in
the Territory or such country(ies), as applicable, AstraZeneca shall,
with the limitations set out below and for a maximum period of ***
prior to Health Registration Approval or *** thereafter, supply Avanir
in a timely manner with sufficient amount of Licensed Compound or
Licensed Product in the Territory or such country(ies), as applicable,
at AstraZeneca's fully absorbed costs ***. AstraZeneca's undertaking
to supply is subject to AstraZeneca, upon termination of this
Agreement, having in its possession appropriate and regulatory
approved manufacturing methods and technologies for the Licensed
Compound and Licensed Product up and running in the scales they are to
be produced and available production capacity after meeting the
requirements of AstraZeneca, its Affiliates, Distributors and
Sublicensees, it being understood that AstraZeneca shall be under no
obligation to develop or acquire
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 94 of 104
CONFIDENTIAL TREATMENT REQUESTED
any manufacturing methods or other technologies in addition to what
has been developed at the date of termination by it or on its behalf
under this Agreement for the production of Licensed Compound and
Licensed Product nor to expand its production capacity to meet the
requirements of Avanir for Licensed Product. AstraZeneca does not
represent or warrant that AstraZeneca will be able to produce clinical
or commercial quantities of Licensed Product. The Parties will
separately negotiate in good faith the logistical and other terms and
conditions for such supplies, including appropriate provisions for the
indemnification by Avanir of AstraZeneca for Avanir's or its
Affiliates' Exploitation of the Licensed Compounds and Licensed
Products supplied by AstraZeneca.
21.7.5 Work-in-Progress. Upon termination of this Agreement with respect to
one or more countries by Avanir pursuant to Section 21.5, AstraZeneca
shall be entitled during the following ***, to finish any
work-in-progress and to sell any inventory of the Licensed Product
that remains on hand as of the date of the termination, so long as
AstraZeneca pays Avanir the royalties applicable to said subsequent
sales in accordance with the terms and conditions set forth in Section
10.2.
21.7.6 Unauthorised Sales. To the extent that Avanir has the right under
this Section 21.7.6 to Exploit Licensed Products in one or more
countries and to the extent permitted by law, Avanir shall have the
right, both for itself and for its Affiliates, to Manufacture,
distribute, market, promote, offer for sale and sell the Licensed
Product only in such countries, provided that:
(a) Avanir shall not, and shall not permit its subsidiaries or
authorize its other Affiliates or sublicensees to, engage in
active sales of the Licensed Product in any country in Europe in
which AstraZeneca's exclusive licence under this Agreement has
not terminated or expired; and
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 95 of 104
CONFIDENTIAL TREATMENT REQUESTED
(b) Avanir shall not, and shall not permit its subsidiaries or
authorize its other Affiliates to, distribute, market, promote,
offer for sale or sell the Licensed Product directly or
indirectly in any country outside of Europe in which
AstraZeneca's exclusive licence under this Agreement has not
terminated or expired.
AstraZeneca shall not be obligated to provide Avanir with any other IP
Protection Right or services than that which is explicitly provided
for under this Section 21.7.
21.7.7 Remedies. Early termination of this Agreement or the Research
Collaboration by a Party shall in no way affect or limit such Party's
right to claim against the other Party for any damages arising out of
the breach of this Agreement.
21.8 Accrued Rights; Surviving Obligations. The termination of this Agreement
shall not relieve the Parties from performing any obligations accrued prior
to the date this Agreement terminates. Each Party's obligations under
Sections 3.7.2, 5.6, 12.1, 12.2, 12.3, 21.7, 21.10 and this Section 21.8,
and Articles 1,14, 15, 17, 18, 25, 26, 27, 30, 32, 33, 35 shall survive the
termination or expiration of this Agreement.
21.9 Termination Upon Insolvency. Either Party may terminate this Agreement and
AstraZeneca may terminate only the Research Collaboration, thereby ending
the Collaboration Term, if, at any time, the other Party shall file in any
court or agency pursuant to any statute or regulation of any state, country
or jurisdiction, a petition in bankruptcy or insolvency or for
reorganization or for an arrangement or for the appointment of a receiver
or trustee of that Party or of its assets, or if the other Party proposes a
written agreement of composition or extension of its debts, or if the other
Party shall be served with an involuntary petition against it, filed in any
insolvency proceeding, and such petition shall not be dismissed within
sixty (60) days after the filing thereof, or if the other Party shall
propose or be a party to any dissolution or liquidation, or if the other
Party shall make an assignment for the benefit of its creditors. In case
AstraZeneca elects to terminate the Research Collaboration only AstraZeneca
shall be
Page 96 of 104
CONFIDENTIAL TREATMENT REQUESTED
under no obligation to provide Avanir with any further compensation
pursuant to Article 9 and what is stated in Section 21.6 (y) shall apply.
21.10 Rights in Bankruptcy. All rights and licences granted under or pursuant to
this Agreement by Avanir are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code or analogous
provisions of Applicable Law outside the United States, licences of right
to "intellectual property" as defined under Section 101 of the U.S.
Bankruptcy Code or analogous provisions of Applicable Law outside the
United States (hereinafter "IP"). The Parties agree that AstraZeneca, as
licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights and elections under the U.S. Bankruptcy Code or
any other provisions of Applicable Law outside the United States that
provide similar protection for IP. The Parties further agree that, in the
event of the commencement of a bankruptcy proceeding by or against Avanir
under the U.S. Bankruptcy Code or analogous provisions of Applicable Law
outside the United States, AstraZeneca shall be entitled to a complete
duplicate of (or complete access to, as appropriate) any such IP and all
embodiments of such IP, which, if not already in AstraZeneca's possession,
shall be promptly delivered to it upon AstraZeneca's written request
therefor.
22 FORCE MAJEURE
22.1 In this Agreement, "FORCE MAJEURE" means an event which is beyond a
non-performing Party's reasonable control, including an act of God, act of
the other Party, strike, lock-out or other industrial/labour disputes
(whether involving the workforce of the Party so prevented or of any other
Person), war, riot, civil commotion, terrorist act, malicious damage,
epidemic, quarantine, fire, flood, storm, natural disaster or compliance
with any law or governmental order, rule, regulation or direction
(including changes in the requirements of the Health Authorities), whether
or not it is later held to be invalid.
22.2 The Force Majeure Party shall, within thirty (30) days of the occurrence of
a Force Majeure event, give notice in writing to the other Party specifying
the nature and extent of the event of Force Majeure, its anticipated
duration and any action being taken to avoid or minimize its effect.
Subject to providing such notice and to Section 22.1, the
Page 97 of 104
CONFIDENTIAL TREATMENT REQUESTED
Force Majeure Party shall not be liable for delay in performance or for
non-performance of its obligations under this Agreement, in whole or in
part, nor shall the other Party have the right to terminate this Agreement,
except as otherwise provided in this Agreement, where non-performance or
delay in performance has resulted from an event of Force Majeure. The
suspension of performance allowed hereunder shall be of no greater scope
and no longer duration than is reasonably required.
22.3 The Force Majeure Party shall use reasonable endeavours, without being
obligated to incur any expenditure or cost, to (a) bring the Force Majeure
event to a close or (b) find a solution by which the Agreement may be
performed despite the continuation of the event of Force Majeure.
23 ASSIGNMENT
Neither Party may assign its rights or, except as provided in Sections 3.3,
3.4 or 5.3, delegate its obligations under this Agreement, whether by
operation of law or otherwise, in whole or in part without the prior
written consent of the other Party, which consent shall not be unreasonably
withheld or delayed, except that AstraZeneca shall always have the right,
without such consent to perform any or all of its obligations and exercise
any or all of its rights under this Agreement through any of its Affiliates
or Sublicensees, and may assign any or all of its rights and delegate any
or all of its obligations hereunder to any of its Affiliates. Either Party
may assign any or all of its rights and delegate any or all of its
obligations hereunder, subject to Section 21.6 in the case of an assignment
by Avanir, to any successor in interest (whether by merger, acquisition,
asset purchase or otherwise) to all or substantially all of the business to
which this Agreement relates provided that the assigning Party shall
provide written notice to the other within *** after such assignment or
delegation; provided, however, in the event that any such transaction
results in a Change of Control of AstraZeneca, Avanir shall be entitled to
request further written assurances from the resulting entity re-affirming
the commitment of the resulting
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 98 of 104
CONFIDENTIAL TREATMENT REQUESTED
entity to comply with the terms and conditions of this Agreement. Such
further written assurances shall be delivered within *** of request by
Avanir. Avanir may so request at any time during the *** period following
completion of the subject transaction.
Following the expiration of the Research Collaboration Avanir may assign
its right to receive payments under this Agreement to a Third Party,
provided always that any Indirect Taxes, other taxes or other costs that
might apply in addition to what would have been the case had payments been
made directly from AstraZeneca to Avanir as a consequence of such Avanir's
assignment shall be carried by Avanir in their entirety. Any other proposed
assignment by Avanir of its rights and obligations under this Agreement
shall require the prior written consent of AstraZeneca. No assignment shall
release either Party from responsibility for the performance of any accrued
obligation of such Party hereunder. No assignment or delegation under this
Agreement shall be effective until the assignee or delegate, as the case
may be, accepts the assignment or delegation in writing. This Agreement
shall be binding upon and enforceable against the successor to or any
permitted assignee or permitted delegate from either of the Parties hereto.
Any permitted successor of a Party or any permitted assignee of all of a
Party's rights under this Agreement that has also assumed all of such
Party's obligations hereunder in writing shall, upon any such succession or
assignment and assumption, be deemed to be a party to this Agreement as
though named herein in substitution for the assigning Party, whereupon the
assigning Party shall cease to be a party to this Agreement and shall cease
to have any rights or obligations under this Agreement. All validly
assigned rights of a Party shall inure to the benefit of and be enforceable
by, and all validly delegated obligations of such Party shall be binding on
and be enforceable against, the permitted successors and assigns of such
Party, provided that such Party, if it survives, shall remain jointly and
severally liable for the performance of such delegated obligations under
this
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 99 of 104
CONFIDENTIAL TREATMENT REQUESTED
Agreement. Any attempted assignment or delegation in violation of this
Article 23 shall be void.
24 SEVERABILITY
To the fullest extent permitted by Applicable Law, the Parties waive any
provision of law that would render any provision in this Agreement invalid,
illegal or unenforceable in any respect. If any provision of this Agreement
is held to be invalid, illegal or unenforceable, in any respect, then such
provision will be given no effect by the Parties and shall not form any
part of this Agreement. To the fullest extent permitted by Applicable Law
and if the rights or obligations of any Party will not be materially and
adversely affected, all other provisions of this Agreement shall remain in
full force and effect, and the Parties shall use their best efforts to
negotiate a provision in replacement of the provision held invalid, illegal
or unenforceable that is consistent with Applicable Law and achieves, as
nearly as possible, the original intention of the Parties.
25 GOVERNING LAW; DISPUTE RESOLUTION
25.1 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of New York, USA, excluding any conflicts or
choice of law rule or principle that might otherwise refer construction or
interpretation of this Agreement to the substantive law of another
jurisdiction.
25.2 Arbitration. In the event of any controversy or claim arising out of or
relating to any provision of this Agreement, the Parties shall try to
settle their differences amicably between themselves. Any unresolved
disputes arising between the Parties relating to, arising out of or in any
way connected with this Agreement or any term or condition hereof, or the
performance by either Party of its obligations hereunder, whether during
the term or after termination of this Agreement, shall be resolved by final
and binding arbitration. Whenever a Party shall decide to institute
arbitration proceedings, it shall give
Page 100 of 104
CONFIDENTIAL TREATMENT REQUESTED
written notice to that effect to the other Party. Arbitration shall be held
in ***, according to the rules of the International Chamber of Commerce
("ICC"). The arbitration will be conducted by a panel of three (3)
arbitrators appointed in accordance with ICC rules; provided that each
Party shall within thirty (30) calendar days after the institution of the
arbitration proceedings appoint one arbitrator each, and such arbitrators
shall select, if available, a third arbitrator within thirty (30) calendar
days thereafter. If the two first arbitrators are unable to select a third
arbitrator within such period, the third arbitrator shall be appointed in
accordance with ICC rules. All arbitrators eligible to conduct the
arbitration must agree to render their opinion(s) within thirty (30)
calendar days of the final arbitration hearing. No arbitrator (nor the
panel of arbitrators) shall have the power to award punitive damages under
this Agreement and such award is expressly prohibited. Decisions of the
arbitrators shall be confidential, final and binding on all of the Parties.
Judgment on the award so rendered may be entered in a court having
jurisdiction thereof. The losing Party to the arbitration (if any) as
determined by the arbitrators shall pay the costs of arbitration. The
proceedings, including any outcome, shall be confidential. Nothing in this
Section 25.2 will preclude either Party from seeking equitable relief in
accordance with Article 33 or interim or provisional relief from a court of
competent jurisdiction, including a temporary restraining order,
preliminary injunction or other interim equitable relief, concerning a
dispute either prior to or during any arbitration if necessary to protect
the interests of such Party or to preserve the status quo pending the
arbitration proceeding.
26 INTERPRETATION OF CERTAIN EVIDENCE
Any dispute with respect to whether a compound is a Collaboration Compound
shall be subject to the provisions of Article 25, provided that, whatever
the dispute resolution proceedings or procedures, the Parties agree that
AstraZeneca's internal laboratory books and records from the relevant
discovery process and its other relevant documentation
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 101 of 104
CONFIDENTIAL TREATMENT REQUESTED
(e.g., in-license agreements, invention disclosure documents or Patents
disclosing or covering such compound) shall provide presumptive evidence
with respect to any such dispute and Avanir shall bear the burden of
proving that such documentation is not accurate.
27 NOTICES
27.1 Notice Requirements Any notice, request, demand, waiver, consent, approval
or other communication permitted or required under this Agreement shall be
in writing, shall refer specifically to this Agreement and shall be deemed
given only if delivered by hand or sent by facsimile transmission (with
transmission confirmed) or by internationally recognised overnight delivery
service that maintains records of delivery, addressed to the Parties at
their respective addresses specified in Section 27.2 or to such other
address as the Party to whom notice is to be given may have provided to the
other Party in accordance with this Article 27. Such notice shall be deemed
to have been given as of the date delivered by hand or transmitted by
facsimile (with transmission confirmed) or on the second business day (at
the place of delivery) after deposit with an internationally recognised
overnight delivery service. Any notice delivered by facsimile shall be
confirmed by a hard copy delivered as soon as practicable thereafter. This
Article 27 is not intended to govern the day-to-day business communications
necessary between the Parties in performing their obligations under the
terms of this Agreement.
27.2 Address for Notice
For: AstraZeneca
15 Stanhope Gate
London, WIK 1LN, England
Facsimile: 44 20 7304 5151
For the attention of: Chris R. W. Petty, Assistant General Counsel
For: Avanir
11388 Sorrento Valley Road, Suite 200
San Diego, California 92121
Facsimile: (858) 658-7455
For the attention of: Chief Financial Officer
With a copy to:
Heller Ehrman LLP
Page 102 of 104
CONFIDENTIAL TREATMENT REQUESTED
4350 La Jolla Village Drive, 7th Floor
San Diego, CA 92122
Facsimile: (858) 450-8499
For the attention of: Richard A. Kaufman
28 RELATIONSHIP OF THE PARTIES
The status of a Party under this Agreement shall be that of an independent
contractor. Nothing contained in this Agreement shall be construed as
creating a partnership, joint venture or agency relationship between the
Parties or, except as otherwise expressly provided in this Agreement, as
granting either Party the authority to bind or contract any obligation in
the name of or on the account of the other Party or to make any statements,
representations, warranties or commitments on behalf of the other Party.
All persons employed by a Party shall be employees of such Party and not of
the other Party and all costs and obligations incurred by reason of any
such employment shall be for the account and expense of such Party.
29 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Parties with
respect to the subject matter of the Agreement. This Agreement supersedes
all prior agreements, whether written or oral, with respect to the subject
matter of the Agreement. Each Party confirms that it is not relying on any
representations, warranties or covenants of the other Party except as
specifically set out in this Agreement. Nothing in this Agreement is
intended to limit or exclude any liability for fraud. All Schedules
referred to in this Agreement are intended to be and are hereby
specifically incorporated into and made a part of this Agreement. In the
event of any inconsistency between any such Schedules and this Agreement,
the terms of this Agreement shall govern.
30 ENGLISH LANGUAGE
This Agreement is written and executed in the English language. Any
translation into any other language shall not be an official version of
this Agreement and in the event of any conflict in interpretation between
the English version and such translation, the English version shall
prevail.
Page 103 of 104
CONFIDENTIAL TREATMENT REQUESTED
31 AMENDMENT
Any amendment or modification of this Agreement must be in writing and
signed by authorised representatives of both Parties.
32 WAIVER AND NON-EXCLUSION OF REMEDIES
A Party's failure to enforce, at any time or for any period of time, any
provision of this Agreement, or to exercise any right or remedy shall not
constitute a waiver of that provision, right or remedy or prevent such
Party from enforcing any or all provisions of this Agreement and exercising
any rights or remedies. To be effective any waiver must be in writing. All
rights and remedies are cumulative and, except as expressly provided in
Section 21.5 and elsewhere in this Agreement, do not exclude any other
right or remedy provided by law or otherwise available.
33 EQUITABLE RELIEF
Avanir acknowledges and agrees that the restrictions set forth in Section
3.7.2 and Article 14 of this Agreement are reasonable and necessary to
protect the legitimate interests of AstraZeneca and that AstraZeneca would
not have entered into this Agreement in the absence of such restrictions,
and that any breach or threatened breach of any provision of Section 3.7.2
and Article 14 will result in irreparable injury to AstraZeneca for which
there will be no adequate remedy at law. In the event of a breach or
threatened breach of any provision of Section 3.7.2 and Article 14,
AstraZeneca shall be authorised and entitled to obtain from any court of
competent jurisdiction injunctive relief, whether preliminary or permanent,
specific performance and an equitable accounting of all earnings, profits
and other benefits arising from such breach, which rights shall be
cumulative and in addition to any other rights or remedies to which
AstraZeneca may be entitled in law or equity. Avanir agrees to waive any
requirement that AstraZeneca (a) post a bond or other security as a
condition for obtaining any such relief, and (b) show irreparable harm,
balancing of harms, consideration of the public interest or inadequacy of
monetary damages as a remedy. Nothing in this Article 33 is
Page 104 of 104
CONFIDENTIAL TREATMENT REQUESTED
intended, or should be construed, to limit AstraZeneca's rights to
equitable relief or any other remedy for a breach of any other provision of
this Agreement.
34 FURTHER ASSURANCE
Each Party shall perform all further acts and things and execute and
deliver such further documents as may be necessary or as the other Party
may reasonably require to implement or give effect to this Agreement. For
the avoidance of doubt, wherever in this Agreement an Affiliate of a Party,
which is an Affiliate both at the Effective Date and at times thereafter,
is either precluded from taking an action or is affirmatively required to
take an action, the Party with which such Affiliate is affiliated may not
obviate compliance with any such provision through the creation of an
Affiliate after the Effective Date.
35 EXPENSES
Except as otherwise expressly provided in this Agreement, each Party shall
pay the fees and expenses of its respective lawyers and other experts and
all other expenses and costs incurred by such Party incidental to the
negotiation, preparation, execution and delivery of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement in two (2)
original copies of which, each of the Parties have taken one each.
SIGNED for and on behalf of SIGNED for and on behalf of
AstraZeneca UK Limited Avanir Pharmaceuticals
/s/ Denise E Goode /s/ Charles Mathews
- ------------------------------------- ----------------------------------------
Signature Signature
Name: Denise E Goode Name: Charles Mathews
Title: Director, Global Licensing Title: Chairman of the Board of
By power of attorney Directors
Page 1 of 4
CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 1
RESEARCH PLAN
REVERSE CHOLESTEROL TRANSPORT PROMOTER
ASTRAZENECA AND AVANIR
Page 2 of 4
CONFIDENTIAL TREATMENT REQUESTED
***
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 3 of 4
CONFIDENTIAL TREATMENT REQUESTED
***
*** ***
*** ***
*** ***
*** ***
*** ***
***
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 4 of 4
CONFIDENTIAL TREATMENT REQUESTED
***
*** *** ***
*** *** *** ***
*** *** *** ***
*** *** ***
*** *** *** ***
*** *** ***
*** *** ***
***
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 1 of 1
SCHEDULE 2
Licensed Know-How
The Licensed Know-How is the information relating to the use of *** to affect
reverse cholesterol transport in animals which ***, possess, whether or not
reduced to writing, and which will be disclosed to the licensee.
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 1 of 3
SCHEDULE 3
IND FILING PLAN
***
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 1 of 1
CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 4
Licensed Patents and Applications
DATE
CASE NO. TITLE OF INVENTION COUNTRY STATUS APPLICATION NO. FILING DATE PATENT NO ISSUED PUBLICATION NO.
- -------- ------------------ ------- ------ --------------- ----------- --------- ------ ---------------
*** **** **** *** ***
***
*** *** *** *** ***
***
*** *** *** *** ***
*** ***
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Page 1 of 2
SCHEDULE 5
CONFIRMATORY PATENT LICENCES
Date: _______________________
Parties: ____________________
(1) 'The Licensor': ____________ having its registered office at __________.
(2) 'The Licensee': ____________ having its registered office at __________.
Recitals:
By an Agreement ('the Main Agreement') dated _________________ and made between
the Licensor and the Licensee the Licensor granted for the consideration therein
contained to the Licensee a licence under [Patent No _________________] ('the
Patent').
Operative provision:
In pursuance of the Main Agreement and for the consideration referred to in the
Main Agreement the Licensor hereby confirms the grant to the Licensee of the
exclusive licence from the Effective Date to manufacture, market, sell and
otherwise dispose of Licensed Products (as defined in the Main Agreement) for
the life of the Patent and subject to the provisions of the Main Agreement.
IN WITNESS of which this Agreement has been executed as a deed and delivered the
day and year first above written.
EXECUTED as a Deed by _________________ acting by:
[name of director] and:
[name of director/secretary]
Page 2 of 2
EXECUTED as a Deed by _________________ acting by:
[name of director] and:
[name of director/secretary]
Page 1 of 1
CONFIDENTIAL TREATMENT REQUESTED
SCHEDULE 6
KEY PERSONNEL AND
ASTRAZENECA PRINCIPAL SCIENTIST
Key Personnel at Avanir:
***
***
AstraZeneca Principal Scientist:
***
- ----------
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
SCHEDULE 7
PRESS RELEASE
For business / financial media only
ASTRAZENECA AND AVANIR ANNOUNCE GLOBAL ALLIANCE TO DISCOVER AND
DEVELOP NOVEL REVERSE CHOLESTEROL TRANSPORT ENHANCING COMPOUNDS
AstraZeneca today announced an exclusive global licensing and research
collaboration agreement with Avanir to discover, develop and commercialise
Reverse Cholesterol Transport (RCT) enhancing compounds for the treatment of
cardiovascular disease.
RCT enhancing compounds are aimed to enhance the flow of lipids from tissues,
such as blood vessel walls, and the transportation of lipids to the liver for
excretion by promoting a natural process known as reverse cholesterol transport.
Compounds that enhance this pathway may potentially reverse existing vascular
disease in comparison to current agents that have to date only been shown to
prevent disease progression.
"AstraZeneca has a strategic commitment to find new treatments for
dyslipidaemia, and Reverse Cholesterol Transport is an exciting therapeutic area
for us. We wish to build on our existing strengths and this alliance will open
up new opportunities for AstraZeneca in the treatment of cardiovascular disease"
said Gunnar Olsson, Head of Cardiovascular Therapy Area, AstraZeneca.
Under the terms of the agreement, Avanir will receive an upfront payment of $10
million. In addition, Avanir is eligible for milestone payments totaling $330
million, contingent upon achievement of development and regulatory milestones
and on achievement of sales targets, together with the payment of stepped
royalties rising from single digit to low double digit rates dependent on sales
achieved. AstraZeneca will assume responsibility for development, and for both
product discovery and development costs, and both parties will contribute
scientific expertise in the research collaboration.
"Reverse Cholesterol Transport is an attractive target for the development of
drugs for cardiovascular disease. AstraZeneca has a long-standing record of
achievement in the development and commercialization in the dyslipidaemia area.
Their leadership in
cardiovascular therapies makes them the ideal partner to maximize the potential
of this programme," said Martin Emanuele, VP Business Development, Avanir
Pharmaceuticals.
RCT is a natural process that involves flow of cholesterol from all tissues,
including the walls of blood vessels, and its subsequent transport to the liver
for metabolism and removal from the body. The process is complex, involving
several steps, and a variety of specialized transporter molecules and carrier
proteins to take cholesterol out of body tissues into the liver. Once
cholesterol is taken up by the liver, it can then be transported to the gall
bladder for excretion.
Enhancement of the reverse cholesterol pathway is promising because it is likely
to provide a more effective process for protecting blood vessels from vascular
disease induced by abnormal blood lipids. Currently available agents are
effective in prevention of the fuller development of additional lipid rich
plaque, but have yet to be proved effective in regressing or decreasing the
existing plaque burden. Enhancing the RCT pathway may be more effective at
reducing pre-existing vascular disease.
-ends-
X June 2005
FOR FURTHER INFORMATION CONTACT:
MEDIA ENQUIRIES:
Edel McCaffrey, Tel: +44 (0) 207 304 5034
Steve Brown, Tel: +44 (0) 207 304 5033
INVESTOR ENQUIRIES:
Mina Blair, Tel: +44 (0) 207 304 5084
Jonathan Hunt, Tel: +44 (0) 207 304 5087
NOTES TO EDITORS:
AstraZeneca is a major international healthcare business engaged in the
research, development, manufacture and marketing of prescription pharmaceuticals
and the supply of healthcare services. It is one of the world's leading
pharmaceutical companies with healthcare sales of over $21.4 billion and leading
positions in sales of gastrointestinal, cardiovascular, respiratory, oncology
and neuroscience products. AstraZeneca is listed in the Dow Jones Sustainability
Index (Global) as well as the FTSE4Good Index.
Avanir Pharmaceuticals is a drug discovery and development company focused on
developing and commercializing novel therapeutic products for the treatment of
chronic diseases. Avanir's product candidates address therapeutic markets that
include central nervous system and cardiovascular disorders, inflammation and
infectious disease. Further information about Avanir can be found at
www.avanir.com