EXHIBIT 10.1
***Confidential treatment has been requested for portions of this exhibit. The
copy filed herewith omits the information subject to the confidentiality
request. Omissions are designated as [***]. A complete version of this exhibit
has been filed separately with the Securities and Exchange Commission.
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EXECUTION COPY
EXCLUSIVE LICENSE, DEVELOPMENT AND
COMMERCIALIZATION AGREEMENT
BY AND BETWEEN
MSD WARWICK (MANUFACTURING) LTD.
AND
DOV PHARMACEUTICAL, INC.
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EXCLUSIVE LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
THIS AGREEMENT (including all exhibits, schedules and other attachments,
this "Agreement"), effective as of the Closing Date (defined below), by and
between MSD WARWICK (MANUFACTURING) LTD., a corporation organized and existing
under the laws of Bermuda ("MERCK"), with a principal place of business at
Chesney House, 96 Pitts Bay Road, Pembroke HM 08, Bermuda and DOV
Pharmaceutical, Inc., a corporation organized and existing under the laws of
Delaware, with a principal place of business at 433 Hackensack Avenue,
Hackensack, NJ 07601 ("DOV").
RECITALS:
WHEREAS, DOV has developed DOV Know-How (as hereinafter defined) and has
rights to DOV Patent Rights (as hereinafter defined); and
WHEREAS, MERCK and DOV desire to enter into a collaboration to develop the
Compound (as hereinafter defined) upon the terms and conditions set forth
herein; and
WHEREAS, MERCK desires to obtain a license under the DOV Patent Rights and
DOV Know-How, upon the terms and conditions set forth herein and DOV desires to
grant such a license; and
WHEREAS, MERCK desires to obtain a right of first refusal to obtain the
rights to develop DOV 102,677 for the treatment and/or prevention of anxiety
and/or depression;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the Parties hereby agree as follows:
1. DEFINITIONS
Unless specifically set forth to the contrary herein, the following terms,
whether used in the singular or plural, shall have the respective meanings set
forth below:
1.1 "ACT" shall mean, as applicable, the United States Federal Food, Drug and
Cosmetic Act, 21 U.S.C. ss.ss. 301 et seq., and/or the Public Health
Service Act, 42 U.S.C. ss.ss. 262 et seq., as such may be amended from
time to time.
1.2 "AFFILIATE" shall mean, in relation to a Party, any corporation or entity
that, directly or indirectly owns, is owned by or is under common
ownership with such Party. For purposes of this definition, the term "own"
(as used in the terms "owns," "owned by" and "under common ownership")
means direct or indirect beneficial or legal ownership of fifty percent
(50%) or more of the voting interest in, or fifty percent (50%) or more of
the equity of or the right to appoint fifty percent (50%) or more of the
directors or managers of that corporation or other business entity or the
power to direct or cause the direction of the management and policies of
such corporation or entity, whether pursuant to the ownership of voting
securities, by contract or otherwise.
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1.3 "ASYMMETRIC PROCESS" shall mean, (i) with regard to the manufacture of DOV
21,947 , a process whereby no significant amount of DOV 102,677 is created
and (ii) with regard to the manufacture of DOV 102,677, a process whereby
no significant amount of DOV 21,947 is created.
1.4 "BANKRUPTCY EVENT" is defined in Section 9.3.2.
1.5 "CALENDAR QUARTER" shall mean the respective periods of three (3)
consecutive calendar months ending on March 31, June 30, September 30 and
December 31.
1.6 "CALENDAR YEAR" shall mean each successive period of twelve (12) months
commencing on January 1 and ending on December 31.
1.7 "CHANGE OF CONTROL" is defined in Section 12.2.
1.8 "CLINICAL TRIAL" shall mean a Phase I Clinical Trial, Phase II Clinical
Trial, Phase III Clinical Trial and/or Phase IV Clinical Trial.
1.9 "CLOSING DATE" shall mean the date upon which the HSR Conditions have been
met.
1.10 "COLLABORATION TERM" shall mean the duration of the Collaboration, as
described more fully in Section 2.7.
1.11 "COLLABORATION" shall mean the activities undertaken by the Parties hereto
as set forth in Article 2.
1.12 "COMBINATION DRUG" shall mean a Product that includes one or more active
ingredients other than Compound in combination with Compound. All
references to Product in this Agreement shall be deemed to include
Combination Drug.
1.13 "COMMERCIALLY REASONABLE EFFORTS" shall mean with respect to the efforts
to be expended by a Party with respect to any objective, reasonable,
diligent, good faith efforts to accomplish such objective as such Party
would normally use to accomplish a similar objective under similar
circumstances, it being understood and agreed that with respect to the
research, development or commercialization of Compound or Product, such
efforts shall be substantially equivalent to those efforts and resources
commonly used by a Party for a similar pharmaceutical product owned by it
or to which it has rights, which product is at a similar stage in its
development or product life and is of similar market potential taking into
account efficacy, safety, approved labeling, the competitiveness of
alternative products in the marketplace, the patent and other proprietary
position of the product, the likelihood of regulatory approval given the
Regulatory Authority involved, the profitability of the product including
the royalties payable to licensors of patent or other intellectual
property rights, alternative products and other relevant factors.
Expenditures by MERCK for development of the Product or Compound that are
comparable to expenditures by MERCK for similar products or compounds at a
similar commercial value and stage of development shall be evidence of
Commercially Reasonable Efforts. Commercially Reasonable Efforts shall be
determined on a market-by-market and Indication-by-Indication basis for a
particular Compound or Product, and it is anticipated that the level of
effort will be different for different markets, and will change over time,
reflecting changes in the status of the Product and the market(s)
involved. The royalties and other payments made or required to be made
hereunder or under the Wyeth Agreement shall not be factors in determining
whether a Party has used Commercially Reasonable Efforts, (that is, a
Party may not apply lesser resources or efforts in support of a Product or
Compound because such Product or Compound is subject to a royalty on sales
or to any other payments under this Agreement or the Wyeth Agreement).
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1.14 "COMMITTEE" shall mean the joint development committee established to
facilitate the Collaboration, as more fully described in Section 2.3.1.
1.15 "COMPOUND" shall mean DOV 21,947, and/or DOV 216,303. For avoidance of
doubt, "Compound" does not include DOV 102,677.
1.16 "CONFIDENTIAL INFORMATION" shall mean any Information disclosed by either
Party that such Party has either marked as confidential or proprietary, or
has identified in writing as confidential or proprietary within thirty
(30) days of disclosure to the other Party ; provided, however, that
(subject in all cases to Article 4 below, including without limitation
Sections 4.2 and 4.4) information regarding the Collaboration, or a
disclosing Party's business plans, strategies, technology, manufacturing,
research and development, and products or services shall be deemed
Confidential Information of the disclosing Party even if not so marked or
identified.
1.17 "CONTROL", "CONTROLS" OR "CONTROLLED BY" shall mean, with respect to any
item of or right under DOV Patent Rights, DOV Know-How, MERCK Patent
Rights, MERCK Know-How or MERCK Termination Know-How, the possession of
(whether by ownership or license, other than pursuant to this Agreement),
or the ability of a Party and/or its Controlled Affiliates to grant access
to, or a license or sublicense of, such item or right as provided for
herein without violating the terms of any agreement or other arrangement
with any Third Party existing at the time such Party would be required
hereunder to grant the other Party such access or license or sublicense.
For avoidance of doubt, intellectual property rights that are Controlled
by a Controlled Affiliate of a Party shall be deemed to be Controlled by
such Party.
1.18 "CONTROLLED AFFILIATE" shall mean, in relation to a Party, any corporation
or entity that, directly or indirectly controls, is controlled by or is
under common control with such Party. For purposes of this definition, the
term "control" (as used in the terms "controls," "controlled by" and
"under common control") means direct or indirect beneficial or legal
ownership of more than fifty percent (50%) of the voting interest in, or
more than fifty percent (50%) of the equity of or the right to appoint
more than fifty percent (50%) of the directors or managers of that
corporation or other business entity or the power to direct or cause the
direction of the management and policies of such corporation or entity,
whether pursuant to the ownership of voting securities, by contract or
otherwise.
1.19 "CO-PROMOTION AGREEMENT" shall have the meaning provided for in paragraph
2 of Schedule 3.7.
1.20 "CRO" is defined in Section 2.2.1 hereof.
1.21 "DDMAC" shall mean the United States Food and Drug Administration Division
of Drug Marketing, Advertising, and Communications.
1.22 "DETAIL" shall mean a product presentation in a face-to-face meeting in an
individual or group practice setting between a professional sales
representative and a Target Prescriber in which one or more key product
benefits are verbally presented in a balanced manner. For avoidance of
doubt, a Detail does not include a reminder or sample drop. "Detailing"
shall mean the act of presenting a Detail.
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1.23 "DOV 21,947" shall mean the compound having a chemical name
(+)-1-(3,4-dichlorophenyl)-3-azabicyclo[3.1.0]hexane, including all
solvates, Prodrugs, salts and polymorphs thereof.
1.24 "DOV 102,677" shall mean the compound having a chemical name
(-)-1-(3,4-dichlorophenyl)-3-azabicyclo[3.1.0]hexane, including all
solvates, Prodrugs, salts and polymorphs thereof.
1.25 "DOV 216,303" shall mean the compound having a chemical name
(+)-1-(3,4-dichlorophenyl)-3-azabicyclo[3.1.0]hexane, including all
solvates, Prodrugs, salts and polymorphs thereof.
1.26 "DOV INFORMATION AND INVENTIONS" shall mean all protocols, formulas, data,
Inventions, know-how and trade secrets, patentable or otherwise, resulting
from the Collaboration developed or invented solely by employees of DOV or
other persons not employed by MERCK acting on behalf of DOV.
1.27 "DOV KNOW-HOW" shall mean all information and materials, including but not
limited to discoveries, improvements, processes, methods, protocols,
formulas, data (including data and results from research, preclinical
development and Clinical Trials), inventions (including without limitation
DOV Information and Inventions and DOV's and/or any of its Controlled
Affiliates' rights in Joint Information and Inventions), know-how and
trade secrets, patentable or otherwise, which (i) are Controlled by DOV
and/or any of its Controlled Affiliates as of the Closing Date or become
Controlled by DOV and/or its Controlled Affiliates during the term of this
Agreement, (ii) are not generally known and (iii) are necessary or useful
to MERCK in connection with the Collaboration or the research,
development, manufacture, marketing, use or sale of Compound or Product in
the Territory, excluding, however, any MERCK Know-How.
1.28 "DOV PATENT RIGHTS" shall mean any and all Patent Rights Controlled by DOV
or its Controlled Affiliates as of the Closing Date or become Controlled
by DOV and/or its Controlled Affiliates during the term of this Agreement
that (i) would be practiced by the manufacture, use, sale, offer for sale
or importation of Compound or Product; or (ii) claim or cover DOV
Information and Inventions, including, but not limited to, those Patent
Rights listed on Schedule 1.28.
1.29 "DRUG DEVELOPMENT PLAN" shall mean the preclinical and clinical
development plan for Compound(s) and Product(s), developed in accordance
with the Collaboration as described in Article 2.
1.30 "EMEA" shall mean the European Agency for the Evaluation of Medicinal
Products (a cross-national Regulatory Authority in the European Union) and
any successor Governmental Authority having substantially the same
function.
1.31 "EXECUTION DATE" shall mean the date of last execution by both Parties.
1.32 "FDA" shall mean the United States Food and Drug Administration, and any
successor Governmental Authority having substantially the same function.
1.33 "FIELD" shall mean (i) in the case of DOV 21,947, the use of DOV 21,947
and/or pharmaceutical preparations in final form containing DOV 21,947 for
the treatment and/or prevention and/or diagnosis of diseases and/or
medical conditions in humans and/or animals; and (ii) in the case of
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DOV 216,303, the use of DOV 216,303 and/or pharmaceutical preparations in
final form containing DOV 216,303 for the treatment and/or prevention
and/or diagnosis of depression, anxiety or addiction in humans and/or
animals.
1.34 "FILING" of an NDA shall mean the acceptance by a Regulatory Authority of
an NDA for filing.
1.35 "FIRST COMMERCIAL SALE" shall mean, with respect to any Product, the first
sale by MERCK or a Related Party for end use or consumption of such
Product in a country, excluding, however, any sale or other distribution
for use in a Clinical Trial.
1.36 "FIRST POSITION DETAIL" shall mean a Detail where key product messages and
benefits are presented in the first position and at least [***]% of the
time available is spent on this presentation.
1.37 "GLP" or "GOOD LABORATORY PRACTICE" shall mean the applicable then-current
standards for laboratory activities for pharmaceuticals or biologicals, as
set forth in the Act and any regulations or guidance documents promulgated
thereunder, as amended from time to time, together with any similar
standards of good laboratory practice as are required by any Regulatory
Authority in the Territory.
1.38 "GMP" OR "GOOD MANUFACTURING PRACTICE" shall mean the applicable
then-current standards for United States Good Manufacturing Practices, as
specified in the United States Code of Federal Regulations and any
regulations or guidance documents promulgated thereunder, as amended from
time to time, together with any similar standards of good manufacturing
practice as are required by any Regulatory Authority in the Territory.
1.39 "GOVERNMENTAL AUTHORITY" means any government, any governmental entity,
department, commission, board, agency or instrumentality, and any court,
tribunal or judicial or arbitral body, whether federal, state or local,
including, without limitation, the U.S. Federal Trade Commission.
1.40 "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of 1974,
as amended, 15 U.S.C. ss.18A.
1.41 "HSR CLEARANCE DATE" means the earliest date on which both Parties or
their Controlled Affiliates have actual knowledge that all applicable
waiting periods under the HSR Act with respect to the transactions
contemplated hereunder have expired or have been terminated.
1.42 "HSR CONDITIONS" shall have the meaning provided in Section 11.2.
1.43 "HSR FILING" means filings by MERCK or its Controlled Affiliates and DOV
with the United States Federal Trade Commission and the Antitrust Division
of the United States Department of Justice of a Notification and Report
Form for Certain Mergers and Acquisitions (as that term is defined in the
HSR Act) with respect to the matters set forth in this Agreement, together
with all required documentary attachments thereto.
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1.44 "IND" shall mean an investigational new drug application, clinical study
application, clinical trial exemption, or similar application or
submission for approval to conduct human clinical investigations filed
with or submitted to a Regulatory Authority in conformance with the
requirements of such Regulatory Authority.
1.45 "INDICATION" shall mean the primary prophylactic and/or therapeutic
purpose for which a Product is developed specifically directed towards
obtaining Regulatory Approval for use of such Product pursuant to an
approved label claim. A single Indication shall include the primary
disease and variants or sub-divisions or sub-classifications within such
primary disease. For example, for purposes of this Agreement, treatment
and/or prevention of anxiety is a single Indication; treatment of a
particular phobia would be treated as a sub-classification within the
single Indication of anxiety. Treatment and prophylaxis of the same
general psychiatric disorder (e.g. anxiety) as defined by the DSM-IV
(i.e., Diagnosis and Statistical Manual) shall be treated as the same
Indication. However, treatment of depression shall be deemed a different
Indication from treatment of anxiety.
1.46 "INFORMATION" shall mean any and all information and data, including
without limitation all MERCK Know-How, MERCK Termination Know-How, DOV
Know-How, and all other scientific, preclinical, clinical, regulatory,
manufacturing, marketing, financial and commercial information or data,
whether communicated in writing or orally or by any other method, that is
provided by one Party (or such Party's Controlled Affiliates) to the other
Party in connection with this Agreement.
1.47 "INITIATES" shall mean, with respect to a Clinical Trial, the
administration of the first dose to a patient in such Clinical Trial.
1.48 "INVENTION" shall mean any process, method, composition of matter, article
of manufacture, discovery or finding that is (i) conceived as a result of
the Collaboration; or (ii) is conceived as a result of the practice of DOV
Patent Rights during or after the term of the Collaboration.
1.49 "JOINT INFORMATION AND INVENTIONS" shall mean all protocols, formulas,
data, Inventions, know-how and trade secrets, patentable or otherwise,
resulting from collaborative activities occurring prior to the Closing
Date, or during the Collaboration or resulting from the practice of the
DOV Patent Rights during or after the term of the Collaboration developed
or invented jointly by employees of MERCK and DOV or others acting on
behalf of MERCK and DOV.
1.50 "JOINT PATENT RIGHTS" shall mean any and all Patent Rights that claim or
cover any Joint Information or Inventions.
1.51 "LAUNCH DATE" shall mean the date subsequent to receiving the necessary
Regulatory Approvals in the United States when the Parties will initiate
Detailing activities in the United States, as such date is determined by
MERCK.
1.52 "MAJOR MARKET" shall mean any one of the following countries: United
States, Japan, the United Kingdom, France, Germany, Italy or Spain.
1.53 "MARKETING AUTHORIZATION" shall mean (i) for the United States, the
approval of an NDA, and (ii) for any foreign jurisdiction, the approval
from the relevant Regulatory Authority necessary to market and sell a
Product in that country, including, without limitation, all applicable
pricing and government reimbursement approvals.
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1.54 "MERCK INFORMATION AND INVENTIONS" shall mean all protocols, formulas,
data, Inventions, know-how and trade secrets, patentable or otherwise,
resulting from the Collaboration or resulting from the practice of DOV
Patent Rights during or after the term of the Collaboration, developed or
invented solely by employees of MERCK or other persons not employed by DOV
acting on behalf of MERCK.
1.55 "MERCK KNOW-HOW" shall mean all information and materials, including but
not limited to discoveries, improvements, processes, methods, protocols,
formulas, data (including data and results from research, preclinical
development and Clinical Trials), inventions (including without limitation
MERCK Information and Inventions and MERCK's and/or any of its Controlled
Affiliates' rights in Joint Information and Inventions), know-how and
trade secrets, patentable or otherwise, which during the term of this
Agreement, (i) are Controlled by MERCK and/or any of its Controlled
Affiliates, (ii) are not generally known and (iii) are necessary or useful
to DOV in connection with the Collaboration.
1.56 "MERCK PATENT RIGHTS" shall mean any and all Patent Rights Controlled by
MERCK and/or any of MERCK's Controlled Affiliates, that (i) would be
practiced by the manufacture, use, sale, offer for sale or importation of
Compound or Product; or (ii) claim or cover MERCK Information and
Inventions or MERCK's rights in Joint Information and Inventions.
1.57 "MERCK TERMINATION KNOW-HOW" shall mean all information and materials,
including but not limited to discoveries, improvements, processes,
methods, protocols, formulas, data (including data and results from
research, preclinical development and Clinical Trials), inventions
(including without limitation MERCK Information and Inventions and MERCK's
and/or any of its Controlled Affiliates' rights in Joint Information and
Inventions), know-how and trade secrets, patentable or otherwise, which
during the term of this Agreement, (i) are Controlled by MERCK and/or any
of MERCK's Controlled Affiliates, (ii) are not generally known, and (iii)
are necessary for the research, development, manufacture, marketing, use
or sale of Compound or Product in the Territory, excluding, however, any
DOV Know-How. The MERCK Termination Know-How shall include the information
of the type set forth in Schedule 1.57.
1.58 "MOTHER LIQUOR" shall mean a liquid stream (i) containing the negative
isomer after recovery of the desired positive isomer, or (ii) containing
the positive isomer after recovery of the desired negative isomer.
1.59 "NDA" shall mean a New Drug Application or Biologics License Application
submitted to the FDA, or a Worldwide Marketing Application, Marketing
Authorization Application or similar application filed with a Regulatory
Authority to obtain approval for marketing a biological or pharmaceutical
product in a foreign country or group of countries.
1.60 "NET SALES" shall mean the gross invoice price of Product sold by MERCK or
any Related Party to the first Third Party, after deducting, if not
previously deducted, from the amount invoiced or received:
(a) trade and quantity discounts actually allowed or taken other than
early pay cash discounts;
(b) amounts allowed or taken by reason of returns, rebates, chargebacks
and other allowances;
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(c) retroactive price reductions that are actually allowed or granted and
that are specifically identifiable as relating to Products; and
(d) a fixed amount equal to [***] percent ([***]%) of the amount invoiced
to cover bad debt, sales or excise taxes, early payment cash discounts,
custom duties, and other governmental charges, sales commissions paid to
Third Party distributors and/or selling agents, and the cost of devices or
delivery systems used for dispensing or administering Product;
With respect to sales of Combination Drugs, Net Sales shall be calculated
on the basis of the gross invoice price of Product(s) containing the same
strength of Compound sold without other active ingredients. In the event
that Product is sold only as a Combination Drug, (y) with respect to any
Combination Drug in which Compound is combined only with one or more
active ingredients the manufacture, use, sale, offer for sale or
importation of which active ingredient(s) would not practice any Patent
Right Controlled by MERCK, MERCK's Controlled Affiliates or a Third Party,
Net Sales shall be calculated on the basis of the gross invoice price of
the Combination Drug and (z) with respect to any Combination Drug in which
Compound is combined only with one or more active ingredients the
manufacture, use sale, offer for sale or importation of which active
ingredient(s) would practice any Patent Right Controlled by MERCK, MERCK's
Controlled Affiliates, or a Third Party, DOV and MERCK shall, prior to any
sales of such Combination Drug, negotiate in good faith to agree in
writing on the relative value of Compound and each other active ingredient
in such Combination Drug, which determination shall be based upon sales
prices for comparable products. Such relative value(s) shall be used in
calculating Net Sales. The deductions set forth in paragraphs (a) through
(d) above will be applied in calculating Net Sales for a Combination Drug.
1.61 "PARTY" shall mean MERCK and DOV, individually, and "PARTIES" shall mean
MERCK and DOV, collectively.
1.62 "PATENT RIGHTS" shall mean patents and patent applications in the
Territory (which for the purposes of this Agreement shall be deemed to
include certificates of invention and applications for certificates of
invention), including provisionals, divisions, continuations,
continuations-in-part, reissues, renewals, extensions, supplementary
protection certificates, and the like of any such patents and patent
applications, and foreign equivalents thereof, and shall include patents
whose term has been extended by statutory patent term adjustments or
extensions in any jurisdiction in the Territory, including but not limited
to those patent term adjustments and extensions granted under 37 C.F.R.
ss.ss. 1.701 - 1.705, 35 U.S.C. ss. 154(b), or 35 U.S.C. ss. 156.
1.63 "PIVOTAL CLINICAL TRIAL" shall mean an adequate and well-controlled
Clinical Trial designed to demonstrate efficacy of a Product intended to
form the basis of Filing an NDA .
1.64 "PHASE I CLINICAL TRIAL" shall mean a human clinical trial in any country
that would satisfy the requirements of 21 CFR 312.21(a).
1.65 "PHASE II CLINICAL TRIAL" shall mean a human clinical trial in any country
that would satisfy the requirements of 21 CFR 312.21(b).
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1.66 "PHASE III CLINICAL TRIAL" shall mean a human clinical trial in any
country that would satisfy the requirements of 21 CFR 312.21(c).
1.67 "PHASE IV CLINICAL TRIAL" shall mean a human clinical trial following the
approval of an NDA, including any human clinical trial in any country
consistent with the description set forth in 21 CFR 312.85.
1.68 "PRODRUG" shall mean a compound that, upon metabolism within the body, is
converted to DOV 21,947, DOV 216,303 or DOV 102,677, the in vivo
pharmacological activity of which substantially derives from the in vivo
presence of the DOV 21,947, DOV 216,303 or DOV 102,677, respectively, into
which the compound is converted.
1.69 "PRODUCT(S)" shall mean any pharmaceutical preparation in final form,
including without limitation any Combination Drug, containing Compound (i)
for sale by prescription, over-the-counter or any other method, or (ii)
for administration to human patients in a Clinical Trial.
1.70 "REGULATORY AUTHORITY" shall mean any applicable government regulatory
authority, including the FDA in the United States and the EMEA in the
European Union, involved in granting approvals for manufacturing and
marketing a Product in the United States, or for manufacturing, marketing,
reimbursement and/or pricing of a Product in any other country in the
Territory.
1.71 "RELATED PARTY" shall mean each of MERCK, its Affiliates, and their
respective sublicensees (which term does not include distributors to whom
MERCK sells, without restriction, Product or Compound), as applicable;
provided, however, that a manufacturer that is sublicensed by MERCK solely
for the purpose of manufacturing (and not for the purpose of developing,
marketing or selling) Compound or Product for MERCK and whose Patent
Rights are not Controlled by Merck shall not be deemed a "Related Party".
1.72 "SPECIALIST" shall mean a psychiatrist or neurologist, or such other
specialist medical or health care professional authorized to prescribe
Product under the laws of the jurisdiction in which such medical or health
care professional is practicing, to the extent that such psychiatrist,
neurologist or other specialist is approved by MERCK.
1.73 "SPECIALTY SALES REPRESENTATIVES" shall mean employees of DOV performing
the sales promotion of pharmaceutical products to Target Prescribers.
1.74 "SUCCESSFUL COMPLETION" of a Pivotal Clinical Trial shall mean the
achievement of a [***] and [***].
1.75 SYMMETRIC PROCESS" shall mean, (i) with regard to the manufacture of DOV
21,947, a process whereby a significant amount of DOV 102,677 is made, and
(ii) with regard to the manufacture of DOV 102,677, a process whereby a
significant amount of DOV 21,947 is made
1.76 "TARGET PRESCRIBER" shall mean a Specialist identified as a member of the
target audience to whom DOV shall direct a Detail as determined by MERCK
in its marketing plans for Product.
1.77 "TERRITORY" shall mean all of the countries in the world, and their
territories and possessions.
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1.78 "THIRD PARTY" shall mean an entity other than MERCK and its Related
Parties, and DOV and its Affiliates.
1.79 "VALID PATENT CLAIM" shall mean a claim of an issued patent included
within the DOV Patent Rights or Joint Patent Rights that claims the use or
composition of matter of Compound or Product, or a claim of an issued
patent included within the MERCK Patent Rights that claims a composition
of matter of Compound or Product, the term and statutory extensions, if
any, of which patent have not yet expired, which claim has not been
revoked or held unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction (which decision is not
appealable or has not been appealed within the time allowed for appeal),
and which claim has not been disclaimed, denied or admitted to be invalid
or unenforceable through reissue, re-examination or disclaimer or
otherwise.
1.80 "WYETH" shall mean Wyeth Holdings Corporation, a Maine corporation.
1.81 "WYETH AGREEMENT" shall mean the certain Amended and Restated License
Agreement between DOV and Wyeth, effective as of May 29, 1998, relating to
the license of DOV 216,303, as amended and restated on February 25, 2004.
2. COLLABORATION
2.1 DRUG DEVELOPMENT PLAN.
DOV and MERCK shall engage in the Collaboration upon the terms and
conditions set forth in this Agreement. The activities to be undertaken in the
course of the Collaboration shall be set forth in the Drug Development Plan set
forth as Schedule 2.1 and incorporated by reference herein. The Drug Development
Plan is subject to modification by MERCK, subject in all respects to and in
accordance with the terms and conditions of this Agreement. MERCK shall present
any modifications (and if timing permits proposed modifications) of the Drug
Development Plan to the Committee for review and discussion, and shall consider
in good faith DOV's input with regard to such modifications. The Drug
Development Plan shall include the preclinical development and pre-Marketing
Authorization Clinical Trials that MERCK plans to conduct, and shall include a
plan describing with specificity the Clinical Trials to be undertaken to achieve
the Development Milestones and Product Profile Milestones set forth in Sections
5.3 and 5.4, and the projected time frame for these Clinical Trials. For
avoidance of doubt, MERCK shall have the right to reasonably determine the
appropriate Clinical Trials to be performed to achieve Development Milestones
and Product Profile Milestones. Notwithstanding anything herein to the contrary,
the Drug Development Plan shall provide for conducting Clinical Trials the
successful outcome of which will result in the achievement of the milestones
provided for in Sections 5.3(a) and 5.4 of this Agreement, where the Clinical
Trials are adequately designed and powered to provide data that has both
statistical and clinical significance.
2.2 CONDUCT OF COLLABORATION.
2.2.1 MERCK shall be responsible for all formulation, preclinical development,
clinical development and regulatory work, and manufacturing of clinical
supplies pursuant to the Drug Development Plan. Merck shall use
Commercially Reasonable Efforts to perform the Drug Development Plan.
MERCK shall be responsible for all regulatory activities, both prior to
and after obtaining Marketing Authorization, including global safety
reporting. MERCK shall be entitled to utilize the services of Third
Parties to perform its Collaboration activities. To the extent MERCK
determines to use DOV as a Contract Research Organization ("CRO"), such
activities shall be pursuant to an agreement containing customary terms
and conditions and commercial terms negotiated in good faith between the
Parties. Pursuant to such an agreement, DOV shall use only Clinical Trial
facilities approved in advance by MERCK, and shall be entitled to utilize
the service of Third Parties to perform its activities as a CRO only upon
MERCK's prior written consent. Notwithstanding any such consent, each
Party shall remain at all times fully liable for its respective
responsibilities under the Collaboration.
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2.2.2 DOV and MERCK shall conduct any activities that either Party performs
pursuant to the Collaboration in compliance with all applicable laws,
rules and regulations, including, without limitation, Good Laboratory
Practice and Good Manufacturing Practice, to the extent applicable. It is
not contemplated that DOV shall use animals in performing its activities
under the Collaboration. Each Party hereby certifies that it has not
employed or otherwise used in any capacity, and will not employ or
otherwise use in any capacity, the services of any person debarred under
United States law, including but not limited to 21 U.S.C. ss. 335(a), in
performing any portion of the Collaboration.
2.3 JOINT DEVELOPMENT COMMITTEE. The Parties hereby establish a committee to
facilitate the Collaboration as follows:
2.3.1 COMPOSITION OF THE JOINT DEVELOPMENT COMMITTEE. The Collaboration shall be
conducted under the direction of a joint development committee (the
"Committee") comprised of three representatives of MERCK and three
representatives of DOV. Each Party may change its representatives to the
Committee from time to time, in its sole discretion, effective upon notice
to the other Party of such change. These representatives shall have
appropriate technical credentials, experience and knowledge, and ongoing
familiarity with the Collaboration. Additional representatives or
consultants may from time to time, by mutual consent of the Parties, be
invited to attend Committee meetings, subject to such representative's or
consultant's written agreement to comply with the requirements of Article
4. The Committee shall be chaired by a representative of MERCK, and MERCK
will have final decision making authority on all issues related to the
research, development, regulatory approval, manufacturing and
commercialization of Compounds and Products. DOV shall have a right to
review and provide comments on the Drug Development Plan, and in the event
DOV has a substantive dispute in regard to the Drug Development Plan, the
Parties' representatives may refer the issue in dispute to the appropriate
Executive Vice President, MERCK Research Laboratories, for MERCK and the
Chief Executive Officer for DOV. In the event that the appropriate
Executive Vice President of MERCK Research Laboratories or the Chief
Executive Officer of DOV requests, in writing within fifteen (15) business
days after the referral of the dispute to such parties, or within such
extended period agreed upon by such executives, such executives shall meet
in-person to attempt to resolve the dispute. If unresolved, the final
resolution and/or course of conduct shall be determined by MERCK's
President, MERCK Research Laboratories, in such executive's sole
discretion. Each Party shall bear its own expenses related to the
attendance of such meetings by its representatives. Each Party shall
provide Committee members with reasonable access during regular business
hours to all its records and documents that are related to the
Collaboration or to the development of the Product.
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2.3.2 MEETINGS. The Committee shall meet in accordance with a schedule
established by mutual written agreement of the Parties, but no less
frequently than once per Calendar Quarter, with the location for such
meetings alternating between DOV and MERCK facilities (or such other
location as may be determined by the Committee). Alternatively, the
Committee may meet by means of teleconference, videoconference or other
similar communications equipment. The Committee shall confer regarding the
status of the Collaboration, review relevant data and the progress of the
Drug Development Plan, consider and advise on any technical issues that
arise relating to the Collaboration that may be referred to, or invited
for referral by, the Committee. MERCK will provide DOV with copies of any
minutes taken of Committee meetings.
2.4 EXCHANGE OF INFORMATION. DOV shall transfer copies of all documents and
materials Controlled by DOV or DOV's Controlled Affiliates embodying the DOV
Know-How and the subject matter of the DOV Patent Rights to MERCK within thirty
(30) days after the Closing Date of this Agreement (the "Initial Transition
Period") and provide MERCK reasonable technical support from DOV technical and
scientific personnel during this the Initial Transition Period relating to the
use of such DOV Know-How and the practice of such DOV Patent Rights, solely to
the extent permitted under the licenses granted to MERCK herein. Following the
Initial Transition Period, from time to time upon MERCK's reasonable request,
DOV shall provide reasonable technical support from DOV technical and scientific
personnel, relating to the use of DOV Know-How and the practice of DOV Patent
Rights, solely to the extent permitted under the licenses granted to MERCK
herein. In furtherance of the foregoing, DOV shall cooperate with MERCK, and
shall cause its Controlled Affiliates and Third Party manufacturers to cooperate
with MERCK, in order to accomplish an orderly transition of manufacturing
technology for Compound to MERCK.
2.5 RECORDS AND REPORTS.
2.5.1 DOV RECORDS. If DOV is utilized as a CRO, DOV shall maintain records, in
sufficient detail and in good scientific manner appropriate for patent and
regulatory purposes, which shall fully and properly reflect all work done
and results achieved in the performance of the Collaboration by DOV.
2.5.2 COPIES AND INSPECTION OF RECORDS. MERCK shall have the right, during
normal business hours and upon reasonable notice, to inspect and copy all
such records of DOV referred to in Section 2.5.1. MERCK shall maintain
such records and the information disclosed therein in confidence in
accordance with Section 4.1. MERCK shall have the right to arrange for its
employees and/or consultants involved in the activities contemplated
hereunder to visit the offices and laboratories of DOV and any of its
Third Party contractors as permitted under Section 2.2 during normal
business hours and upon reasonable notice, to discuss the Collaboration
work and its results in detail with the technical personnel and any
permitted Third Party contractors of DOV. Upon request, DOV shall provide
copies of the records described in Section 2.5.1.
2.5.3 QUARTERLY REPORTS. The Parties shall each prepare a written report, which
shall be delivered to the other Party at least fifteen (15) days prior to
each quarterly meeting of the Committee, which report shall inform the
Committee of the work performed to date on the Collaboration, evaluate the
work performed in relation to the goals of the Collaboration and provide
such other information as may be reasonably requested by the Committee (a
"Collaboration Quarterly Report"). The MERCK Collaboration Quarterly
Report shall include Information in sufficient detail that performance by
MERCK of the Drug Development Plan and progress achieved in performing the
Drug Development Plan may be ascertained.
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2.5.4 LDRC AND EDRC REPORTS. Only to the extent applicable to Compounds and
Products, during the Collaboration Term, MERCK shall provide to DOV
progress reports provided in accordance with MERCK's regular business
practices to MERCK's Early Development Review Committee ("EDRC") and Late
Development Review Committee ("LDRC"), or the respective successors to
such committees, in order to keep DOV informed of the progress of the
conduct of activities under the Collaboration and the development of the
Compounds and Products.
2.6 INFORMATION AND INVENTIONS. The entire right, title and interest in:
(a) DOV Information and Inventions shall be owned solely by DOV;
(b) MERCK Information and Inventions shall be owned solely by MERCK; and
(c) Joint Information and Inventions shall be owned jointly by DOV and
MERCK. Each of the Parties, as owners of a joint and undivided
interest in the Joint Information and Inventions and Joint Patent
Rights, shall have the right to exploit and to grant licenses in and
to such Joint Information and Inventions and/or Joint Patent Rights,
without an accounting or obligation to, or other consent required
from, the other Party, unless otherwise specified in this Agreement.
Each Party further agrees to execute such documents as the other
Party may reasonably require to give effect to the intent of this
Section 2.6(c). For avoidance of doubt, this Section 2.6(c) shall
not supersede the licenses and other rights granted pursuant to
Article 3.
Each Party shall promptly disclose to the other Party, in writing, the
development, making, conception or reduction to practice of Joint
Information and Inventions or, respectively, DOV Information and
Inventions and MERCK Information and Inventions.
2.7 COLLABORATION TERM AND TERMINATION. Except as otherwise provided herein, the
term of the Collaboration shall commence on the Closing Date and continue until
approval of the NDA by the FDA for the first Product.
2.8 DEVELOPMENT REPORTS FOLLOWING TERMINATION OF COLLABORATION. Notwithstanding
any other provision of this Agreement, following the termination of the
Collaboration, MERCK shall provide a development report to DOV upon DOV's
request no more frequently than semianually, which report shall include (i) an
update describing the development efforts of MERCK and its Controlled Affiliates
pertaining to the Compound and the Product, and (ii) a description of clinical
studies commenced to achieve Development Milestones or Product Profile
Milestones as described in Section 5.3 or Section 5.4, respectively.
3. LICENSE; EXCHANGE OF INFORMATION; DEVELOPMENT AND COMMERCIALIZATION
3.1 LICENSE GRANT.
3.1.1 DOV hereby grants to MERCK an exclusive license (even as to DOV, except as
set forth in Section 3.1.2 below) in the Territory under DOV Patent
Rights, DOV's and its Controlled Affiliates' rights in Joint Patent
Rights, and DOV Know-How, with a right to sublicense, to make, have made,
use, offer to sell, sell or import Compound(s) and Product(s) in the
Field. For the avoidance of doubt, DOV reserves all rights not expressly
licensed to MERCK under this Agreement (e.g., DOV reserves the right to
make, use, sell, offer to sell and import DOV 216,303 outside of the
Field).
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3.1.2 DOV hereby retains the right in the Territory under DOV Patent Rights and
DOV Know-How, to make or have made DOV 21,947 for the purposes of (i)
making, having made, using, offering for sale, selling or importing DOV
102,677 and/or any pharmaceutical preparation or preparations containing
DOV 102,667 and (ii) conforming to any then-applicable requirements of a
Regulatory Authority, provided that DOV may not use DOV 21,947 for any
other purposes or provide DOV 21,947 to any other person other than for
the purpose of having DOV 102,677 made, and any DOV 21,947 in DOV's or any
of its Controlled Affiliates' or any Third Party's possession after
completion of the process of making DOV 102,677 shall be promptly
destroyed.
3.2. NON-EXCLUSIVE LICENSE GRANTS.
3.2.1 In the event that the making, having made, use, offer for sale, sale or
import by MERCK, or MERCK's Related Parties, of Compound(s) or Product(s)
in the Field would infringe during the term of this Agreement a claim of
an issued patent Controlled by DOV or its Controlled Affiliates and which
patent is not covered by the grant in Section 3.1, DOV hereby grants to
MERCK, to the extent DOV is legally able to do so, a non-exclusive,
sublicensable, royalty-free license in the Territory under any such issued
patent for MERCK and MERCK's Related Parties to make, have made, use,
sell, offer for sale or import Compound(s) and Product(s) in the
Territory.
3.2.2 DOV hereby grants to MERCK a non-sublicenseable, non-exclusive license to
use DOV 102,677 for the purpose of developing an assay relating to DOV
21,947 that quantifies the level, if any, of DOV 102,677 present in DOV
21,947 in vitro or in vivo.
3.2.3 MERCK hereby grants to DOV a non-sublicenseable, non-exclusive license to
use DOV 21,947 for the purpose of developing an assay relating to DOV
102,677 that quantifies the level, if any, of DOV 21,947 present in DOV
102,677 in vitro or in vivo.
3.3. SUBLICENSES.
3.3.1 MERCK may grant written sublicenses of the licenses granted it under
Sections 3.1 and 3.2 above (each, a "Sublicense Agreement"), provided,
however, that no sublicense granted under this Agreement shall be valid
unless each sublicensee (a "MERCK Sublicensee") agrees in writing in such
Sublicense Agreement:
(i) to exercise its rights under the sublicense in accordance with the
applicable terms of this Agreement;
(ii) to maintain records that Merck would be required to retain under
this Agreement and to permit auditors of DOV to inspect such records
on the same basis as such records could be inspected if retained by
MERCK;
(iii) to, in the event of a Bankruptcy Event affecting MERCK, (a) transfer
to DOV any MERCK Termination Know-How to which such MERCK
Sublicensee has access no later than 60 days after the effective
date of such Bankruptcy Event, (b) transfer to DOV any Information
or Joint Information and Inventions to which such MERCK Sublicensee
has access and that is necessary or useful to the prosecution of DOV
Patent Rights or Joint Patent Rights no less than 30 days before any
application deadline applicable to any DOV Patent Right or Joint
Patent Right; (c) transfer to DOV title to or sponsorship of any
IND, NDA or other regulatory filing held in the name of such MERCK
Sublicensee pertaining to the Compound or the Product, or if such
transfer is not legally permissible or such items do not relate
solely to Compound
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or Product, to grant DOV the right, with right to sublicense, to
access, use and cross-reference such data, filings and approvals
from Regulatory Authorities, which right shall be exclusive
(including as to the MERCK Sublicensee) with respect to Compound or
Product; and (d) provide to DOV reasonable technical support from
technical and scientific personnel to effect the complete transfer
of MERCK Termination Know-How to which such MERCK Sublicensee has
access, including Information necessary for the use of any MERCK
Termination Know-How and the practice of any MERCK Patent Rights and
Joint Patent Rights in relation to Compound or Product; and (e)
provide that all of the provisions of the foregoing clauses (a)
through (d) shall survive any termination of the applicable
Sublicense Agreement;
(iv) to observe all other applicable terms of this Agreement; and
(v) that (a) DOV shall be a third party beneficiary under the applicable
Sublicense Agreement solely for purposes of enforcing its rights in
the event of a Bankruptcy Event affecting MERCK; and (b) that in
such a Bankruptcy Event, if the Sublicense Agreement by MERCK is
rejected and the MERCK Sublicensee does not elect to treat the
Sublicense Agreement as terminated, then the MERCK Sublicensee
shall, at DOV's option, enter into a license agreement with DOV on
the same terms and conditions as the applicable Sublicense
Agreement.
3.3.2 (a) Contemporaneously with the execution of a Sublicensee Agreement, MERCK
shall obtain from each MERCK Sublicensee a written acknowledgement (the
"Sublicensee Acknowledgement") stating that the Sublicense Agreement
executed between such MERCK Sublicensee and MERCK contains those
provisions required by Section 3.3.1 of this Agreement. During the first
twelve months following the Closing Date, MERCK shall promptly provide DOV
with a copy of each Sublicense Acknowledgement. Thereafter, MERCK will
provide DOV with copies of any additional Sublicense Acknowledgements upon
request, but no more frequently than once per year.
(b) MERCK shall maintain a list of MERCK Sublicensees and a general
description of the subject matter of each Sublicense Agreement (the
"Sublicensee List"). During the first twelve months following the
Execution Date, the Sublicensee List shall be updated contemporaneously
upon the execution of each Sublicense Agreement and provided promptly to
DOV following the execution of each Sublicense Agreement. Thereafter,
MERCK will provide DOV with a copy of the updated Sublicensee List upon
request, but no more frequently than once per year. .
3.3.3 MERCK unconditionally guarantees the performance of all MERCK Sublicensees
in accordance with the terms of this Agreement, and MERCK shall be
responsible for enforcing the provisions of any sublicense agreement to
ensure that the MERCK Sublicensees do not breach the terms of this
Agreement.
3.3.4 In the event of a Bankruptcy Event affecting MERCK, any and all Sublicense
Agreements shall immediately terminate.
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3.4. RIGHT OF FIRST REFUSAL FOR DOV 102,677.
3.4.1.RIGHT OF FIRST REFUSAL. In the event that DOV desires to commercialize DOV
102,677 or a Product containing it for the treatment and/or prevention of
depression and/or anxiety in humans and/or animals, MERCK will have a
right of first refusal with regard to obtaining exclusive rights to such
commercialization. In such a circumstance, DOV shall present a good faith
offer for the commercialization rights for DOV 102,677. Thereafter, after
a sixty (60) day period of good faith negotiation, if it is reasonably
apparent that the Parties are unable to reach agreement with regard to the
terms and conditions under which MERCK may obtain exclusive rights to
commercialize DOV 102,677 for the treatment and/or prevention of
depression and/or anxiety in humans and/or animals, then DOV shall be free
to commercialize DOV 102,677 itself or to negotiate with Third Parties
with respect to the commercialization of DOV 102,677 through a
collaboration or by such Third Party, provided, however, that
prior to entering into an agreement granting rights to a Third Party for
commercializing DOV 102,677 for lesser compensation than DOV's last offer
to MERCK, DOV shall offer the compensation and other relevant material
terms to MERCK in writing. If MERCK does not accept such compensation and
other relevant material in writing within thirty (30) days, it will be
deemed to have waived its rights.
3.5. NO IMPLIED LICENSES. Except as specifically set forth in this Agreement,
neither Party shall acquire any license or other intellectual property
interest, by implication or otherwise, in any Information disclosed to it
under this Agreement or under any patents or patent applications
Controlled by the other Party or its Controlled Affiliates.
3.6. DEVELOPMENT AND COMMERCIALIZATION.
MERCK shall use Commercially Reasonable Efforts to develop and
commercialize a Product containing at least one of the Compounds at its own
expense. For avoidance of doubt, a temporary suspension, not to exceed six
months, of the development or commercialization of a Product due to MERCK's
reasonable determination that the Product is materially unsafe for use in humans
shall not cause MERCK to be in breach of this Section 3.6. For the avoidance of
doubt, in the event of any such suspension, the provisions of Article 10 shall
apply.
3.7. OPTION FOR DOV TO CO-PROMOTE PRODUCTS IN UNITED STATES.
3.7.1.MERCK hereby grants DOV an option to co-promote the Product in the United
States only (the "Co-promotion Option") by Detailing Product to
Specialists designated by MERCK as Target Prescribers, subject to the
provisions of this Section 3.7, and conditioned on DOV and MERCK entering
into a Co-Promotion Agreement on terms and conditions consistent with
Schedule 3.7.
3.7.2.MERCK shall determine the Launch Date of the Product, and shall keep DOV
apprised at quarterly Committee meetings of any changes in the projected
Launch Date for the Product, so that DOV has reasonable notice of the
projected Launch Date. DOV will notify MERCK in writing of its intent to
exercise the Co-Promotion Option twenty-four (24) months prior to the
projected Launch Date as communicated by MERCK (the "Exercise Date"). If
DOV chooses to exercise the Co-Promotion Option, MERCK and DOV will enter
into a Co-Promotion Agreement consistent with the terms and conditions set
forth in Schedule 3.7 no later than eighteen (18) months before the Launch
Date.
3.7.3.If DOV exercises the Co-Promotion Option, DOV shall be required to
commence Detailing on the Launch Date for the Product, and shall be
required to deploy a sufficient number of Specialty
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*** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO THIS MATERIAL.
Sales Representatives as determined by MERCK, based on the reach and
frequency of Detailing that MERCK determines is desirable to the Target
Prescribers. For avoidance of doubt, DOV shall be required to deploy a
minimum of [***] and, unless otherwise agreed upon in writing, a maximum
of [***] Specialty Sales Representatives, with the specific number of such
Specialty Sales Representatives to be determined by MERCK based on the
desired reach and frequency of Detailing to Target Prescribers, and
communicated by MERCK to DOV at least sixty (60) days before the Exercise
Date. In the event that DOV has an existing sales force that is detailing
a DOV product to the same Target Prescribers and employs more
representatives than the required number of Specialty Sales
Representatives as determined by MERCK, MERCK shall consider in good faith
utilizing such existing DOV sales force. Compensation in any event shall
be as described in Paragraph 2(e) of Schedule 3.7.
3.7.4. The Co-Promotion Option shall lapse if:
(a) DOV does not notify MERCK in writing of its intent to exercise the
Co-Promotion Option by the Exercise Date; or
(b) DOV cannot provide the number of Specialty Sales Representatives
provided for in Section 3.7.3, unless otherwise agreed to by the
Parties; or
(c) The Agreement is terminated pursuant to Article 9.
3.8. SUPPLY BY MERCK TO DOV OF MOTHER LIQUOR CONTAINING DOV 102, 677.
3.8.1.In the event that MERCK develops an Asymmetric Process for the
manufacture of DOV 21,947, MERCK shall have no obligation to supply to DOV
Mother Liquor containing DOV 102,677. In the event that MERCK manufactures
DOV 21,947 using a Symmetric Process, MERCK shall, upon DOV's request and
subject to the terms and conditions of this Section 3.8, supply to DOV
such quantities of the Mother Liquor containing DOV 102,677 that are
obtained by MERCK and its Controlled Affiliates in the course of such
manufacturing process (except such small quantities of Mother Liquor
needed by MERCK for development of assays, analytical methods and other
similar purposes).
3.8.2.Any quantities of such Mother Liquor supplied by MERCK shall be supplied
"where is" and "as is", with no warranty as to the quality of the Mother
Liquor or its fitness for use for any purpose. Title and risk of loss
shall shift to DOV upon delivery by MERCK at MERCK's site of manufacture.
DOV shall develop appropriate packaging and labeling for such Mother
Liquor, and provide such packaging and labeling to MERCK.
3.8.3.DOV shall pay for any transportation or insurance costs associated with
the delivery of such quantities of Mother Liquor, and shall reimburse
MERCK for out of pocket costs incurred by MERCK in the recovery, storage,
packaging and labeling of such Mother Liquor.
3.8.4.DOV shall have reasonable access to MERCK's and MERCK's Controlled
Affiliates' data in order to support its submissions to Regulatory
Authorities relating to DOV 102,677; provided, however, that such access
shall be limited to employees of DOV, and shall not be extended to
consultants, partners, agents, licensees or other Third Parties, other
than those consultants or independent Third Parties involved with the
analysis of studies being conducted or data being collected for the
purpose of gaining Marketing Authorization, or involved with the
preparation or submission of materials to Regulatory Authorities; and
provided, further that MERCK shall be reimbursed for its and its
Controlled Affiliates' fully allocated costs for supporting such
submissions to Regulatory Authorities.
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3.8.5.Any obligation of MERCK or its Controlled Affiliates under this Section
3.8 to supply Mother Liquor to DOV shall immediately cease upon any Change
of Control in which a Major Pharma Entity (as defined in Section 12.2)
obtains control of DOV by acquiring DOV's assets or voting equity
securities (by asset purchase, merger, consolidation, reorganization or
otherwise), or upon the granting by DOV to any Third Party of any license,
promotion rights, distribution rights or other rights relating to DOV
102,677.
3.9. ASYMMETRIC TECHNOLOGY. (a) In the event that MERCK develops an Asymmetric
Process for manufacture of DOV 21,947, MERCK shall so notify DOV. MERCK
shall thereafter, upon DOV's request, provide technical information
necessary to permit DOV to manufacture DOV 102,677 using such Asymmetric
Process ("MERCK Asymmetric Technology"). To the extent DOV utilizes such
MERCK Asymmetric Technology, and to the extent that the use of the MERCK
Asymmetric Technology in the making or having made of DOV 102,677 would
infringe during the term of this Agreement a claim of an issued patent
Controlled by MERCK or its Controlled Affiliates, MERCK hereby grants to
DOV, to the extent MERCK or its Controlled Affiliates are legally able to
do so, a non-exclusive, fully paid-up, sublicensable, royalty-free license
in the Territory under the MERCK Asymmetric Technology and any such issued
patent for DOV, DOV's Controlled Affiliates and its and their sublicensees
to make or have made DOV 102,677 in the Territory.
(b) In the event that DOV develops an Asymmetric Process for manufacture
of DOV 102,677, DOV shall so notify MERCK. DOV shall thereafter, upon MERCK's
request, provide technical information necessary to permit MERCK to manufacture
DOV 21,947 using such Asymmetric Process ("DOV Asymmetric Technology"). To the
extent MERCK or its Controlled Affiliates utilizes such DOV Asymmetric
Technology, and to the extent that the use of the DOV Asymmetric Technology in
the making or having made of DOV 21,947 would infringe during the term of this
Agreement a claim of an issued patent Controlled by DOV or its Controlled
Affiliates, DOV hereby grants to MERCK, to the extent DOV or its Controlled
Affiliates are legally able to do so, a non-exclusive, fully paid-up,
sublicensable, royalty-free license in the Territory under the DOV Asymmetric
Technology and any such issued patent for MERCK, MERCK's Controlled Affiliates
and its and their sublicensees to make or have made DOV 21,947 in the Territory.
4. CONFIDENTIALITY AND PUBLICATION
4.1 NONDISCLOSURE OBLIGATION. Except to the extent expressly authorized by this
Agreement or otherwise agreed in writing by the Parties, the Parties agree that
each Party (the "Receiving Party") shall keep confidential and shall not publish
or otherwise disclose and shall not use for any purpose any Confidential
Information furnished to it by, or otherwise belonging to, the other Party (the
"Disclosing Party") pursuant to this Agreement, except that a Receiving Party
may disclose Confidential Information of the Disclosing Party to its employees
and consultants who are required to have access to the Confidential Information
in connection with the exercise of Receiving Party's rights and performance of
its obligations under this Agreement. Each Party may use Confidential
Information of the other Party only to the extent required to accomplish the
purposes of this Agreement. The Receiving Party will use at least the same
standard of care as it uses to protect its own Confidential Information to
ensure that its employees, agents, consultants and other representatives do not
disclose or make any unauthorized use of such Confidential Information. Each
Party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the other Party's Confidential Information.
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4.2 EXCEPTIONS. The obligations of confidentiality and non-use contained in
Section 4.1 will not apply to the extent it can be established by the Receiving
Party by competent proof that such Confidential Information:
(a) is now, or hereafter becomes, through no act or failure to act on
the part of the Receiving Party, generally known or available;
(b) is known by the Receiving Party at the time of receiving such
information, other than under a duty of confidentiality owed to the
Disclosing Party, as evidenced by its records;
(c) is hereafter furnished to the Receiving Party by a Third Party that
does not owe a duty of confidentiality to the Disclosing Party in
relation to such Confidential Information;
(d) is independently developed by the Receiving Party without the aid,
application or use of Confidential Information of the Disclosing
Party, as evidenced by its records; or
(e) is the subject of a written permission to disclose provided by the
Disclosing Party.
4.3 TERMS OF AGREEMENT. This Agreement and the terms hereof will be considered
Confidential Information of both Parties. Notwithstanding the foregoing, either
Party may disclose such terms as are required to be disclosed under strictures
of confidentiality (i) to bona fide potential sublicensees or (ii) for fund
raising or financing efforts to investors and lenders and bona fide potential
investors and lenders, provided, however, that the term of confidentiality for
such entities shall be no less than ten (10) years. In addition, the Agreement
and terms hereof may be disclosed as otherwise required pursuant to applicable
law, regulation or stock market or stock exchange rule (e.g., rules or
regulations of the United States Securities and Exchange Commission, the Nasdaq
or the NYSE); provided that a Party proposing to make such a disclosure as
required by law, rule or regulation shall inform the other Party a reasonable
time prior to such required disclosure, shall provide the other Party with a
copy of the text of such proposed disclosure sufficiently in advance of the
proposed disclosure to afford such other Party a reasonable opportunity to
review and comment upon the proposed disclosure (including, if applicable, the
redacted version of this Agreement) and shall reasonably consider, consistent
with applicable law, rule and regulation (including interpretations thereof),
the requests of the other Party regarding confidential treatment for such
disclosure.
4.4 AUTHORIZED DISCLOSURE.
4.4.1 The Receiving Party may disclose Confidential Information belonging to the
Disclosing Party to the extent such disclosure is reasonably necessary in
the following instances:
(a) filing or prosecuting Patent Rights relating to the Collaboration;
(b) regulatory filings;
(c) prosecuting or defending litigation;
(d) complying with applicable court orders or governmental regulations;
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(e) disclosure to Affiliates, sublicensees, employees, consultants,
agents or other Third Parties in connection with due diligence or
similar investigations by such Third Parties, in each case who agree
to be bound by similar terms of confidentiality and non-use at least
equivalent in scope to those set forth in this Article 4; and
(f) disclosure deemed necessary by counsel to the Receiving Party to be
disclosed to such Party's attorneys, independent accountants or
financial advisors for the sole purpose of enabling such attorneys,
independent accountants or financial advisors to provide advice to
the Receiving Party, on the condition that such attorneys,
independent accountants and financial advisors agree to be bound by
the confidentiality and non-use obligations contained in this
Agreement; provided, however, that the term of confidentiality for
such attorneys, independent accountants and financial advisors shall
be no less than ten (10) years.
Notwithstanding the foregoing, in the event a Party is required to make a
disclosure of the other Party's Confidential Information pursuant to
Sections 4.3 or 4.4, it will seek to secure confidential treatment of such
information at least as diligently as such Party would use to protect its
own Confidential Information.
4.4.2 MERCK may disclose Confidential Information belonging to DOV to the extent
such disclosure is reasonably deemed necessary by MERCK to be disclosed to
Related Parties, agents, consultants, and/or other Third Parties for any
and all purposes MERCK and its Affiliates reasonably deem necessary or
advisable for the research and development, manufacturing and/or marketing
of the Product (or for such entities to determine their interest in
performing such activities in accordance with this Agreement on the
condition that such Third Parties agree to be bound by the confidentiality
and non-use obligations contained in this Agreement; provided, however,
that the term of confidentiality for such Third Parties shall be no less
than ten (10) years.
4.5 DOV KNOW-HOW. DOV agrees to keep confidential all DOV Know-How exclusively
licensed to MERCK pursuant to this Agreement, subject to the exceptions set
forth in Sections 4.2 and 4.4.1 (i.e., as if DOV were the Receiving Party of the
DOV Know-How for purposes of such Sections 4.2 and 4.4.1).
4.6 PUBLICATION. MERCK shall have the right to publish results of the
Collaboration without restriction. Except for disclosures permitted pursuant to
Section 4.1 and 4.2, if DOV, its employees or consultants wish to make a
publication, DOV shall deliver to MERCK a copy of the proposed written
publication or an outline of an oral disclosure at least sixty (60) days prior
to submission for publication or presentation, and MERCK shall provide its
comments with respect to such publication or disclosure within thirty (30)
business days of receiving such written copy. The review period may be extended
for an additional thirty (30) days if MERCK can demonstrate a reasonable need
for such extension, including but not limited to the preparation and filing of
patent applications. MERCK shall have the right (a) to propose reasonable
modifications to the publication or presentation for patent reasons or trade
secret reasons or (b) to request a reasonable delay in publication or
presentation in order to protect patentable information. If MERCK requests a
delay, DOV shall delay submission or presentation for a period of forty-five
(45) days from the date DOV delivers the aforesaid copy or outline to MERCK to
enable patent applications protecting MERCK's rights in such information to be
filed in accordance with Article 7 below. Upon expiration of sixty (60) days,
DOV shall be free to proceed with the publication or presentation. If MERCK
requests modifications to the publication or presentation, DOV shall edit such
publication to prevent disclosure of trade secret or proprietary business
information prior to submission of
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the publication or presentation. MERCK and DOV will each comply with standard
academic practice regarding authorship of scientific publications and
recognition of contribution of other Parties in any publications relating to the
Collaboration.
4.7 PUBLICITY/USE OF NAMES. Neither Party shall use the name, trademark, trade
name or logo of the other Party, its Affiliates or their respective employees in
any publicity, promotion, news release or disclosure relating to this Agreement
or its subject matter, without the prior express written permission of the other
Party, except as may be required by law or expressly permitted by Section 4.3
above. Promptly after the Execution Date, the Parties will release a mutually
agreeable press release, which release shall be consistent with the requirements
of the Wyeth Agreement.
5. PAYMENTS; ROYALTIES AND REPORTS
5.1 EXECUTION FEE. In consideration for DOV's granting of the license under the
DOV Patent Rights and DOV Know-How, MERCK shall pay DOV an amount equal to
thirty-five million dollars ($US 35 million) within ten (10) business days of
the Closing Date. This payment is not refundable or creditable against any other
payments or obligations of MERCK coming due and does not create any future
performance obligations on the part of DOV.
5.2 COLLABORATION FUNDING.
5.2.1 MERCK shall pay for all costs and expenses incurred in performance of the
Drug Development Plan, including manufacture and formulation of Compound
and Product, costs incurred in all research and development, preclinical
and clinical trials, pre-marketing and post-marketing studies and
surveillance and manufacture of clinical supplies. None of these costs and
expenses shall offset or be credited against any fees, royalties or other
payments required to be made by MERCK to DOV under this Agreement.
5.2.2 To the extent that MERCK determines to use DOV as a CRO, DOV and MERCK
shall negotiate competitive rates for the performance of such functions in
connection with the negotiation of a definitive agreement pursuant to
Section 2.2.
5.3 DEVELOPMENT MILESTONE PAYMENTS
Subject to the terms and conditions of this Agreement, MERCK shall pay to
DOV the following payments based on the achievement of the following milestones
("Development Milestones"):
(a) MERCK shall make the following payments for the first achievement of
the following Development Milestones by MERCK or any Related Party for any
Product:
(i) [***] $US [***]
(ii) [***] $US [***]
(iii) [***] $US [***]
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(iv) [***] $US [***]
(v) [***] $US [***]
(vi) [***] $US [***]
(vii) [***] $US [***]
(viii) [***] $US [***]
(b) MERCK shall make the following payments for the achievement by MERCK
or any Related Party of the following Development Milestones for a second
Indication for the first Product:
(i) [***] $US [***]
(ii) [***] $US [***]
(c) The above Development Milestones are not refundable or creditable
against any other payments or obligations of MERCK coming due and do not create
any future performance obligations on the part of DOV, except as expressly set
forth in this Agreement. These payments shall not be triggered by any clinical
development work performed by DOV (i) prior to the Closing Date or (ii) after
the Closing Date if such work is not in the performance of activities as a CRO
pursuant to the Drug Development Plan. MERCK shall notify DOV in writing within
thirty (30) days following the achievement of each Development Milestone, and
shall make the appropriate payment within thirty (30) days after the achievement
of such Development Milestone. The milestone payment shall be payable only upon
the initial achievement of such Development Milestone and no amounts shall be
due hereunder for subsequent or repeated achievement of such Development
Milestone.
(d) (i) If during the Term of the Agreement, MERCK has not Initiated the
first Phase II Clinical Trial for DOV 21,947 by [***], MERCK shall make a
payment to DOV of [***] dollars ($US $[***]).
(ii) If during the Term of the Agreement, MERCK has not Initiated
the first Phase II Clinical Trial for DOV 21,947 by [***], MERCK shall pay DOV
an additional [***] dollars ($US [***]).
(iii) If during the Term of the Agreement, MERCK has not Initiated
the first Phase II Clinical Trial for DOV 21,947 by [***], MERCK shall pay DOV
an additional [***] dollars ($US [***]); thereafter during the Term of the
Agreement MERCK shall pay DOV an additional [***] dollars ($US [***]), due on
[***] of each Calendar Year unless MERCK has, prior [***] of such Calendar Year,
Initiated the first Phase II Clinical Trial for DOV 21,947.
(iv) Payments pursuant to this Section 5.3(d) are conditioned on
DOV's timely fulfillment of all of its material obligations under the Agreement
that would reasonably have an effect on the commencement of the applicable Phase
II Clinical Trial, and all such payments shall be fully creditable against
subsequent Development Milestones payable by MERCK to DOV.
5.4 PRODUCT PROFILE MILESTONES
5.4.1 In the event the DOV 21,947 development program generates adequately
powered data to support inclusion of the following statements in Sections
5.4.1(a) or (b) based upon clinically significant
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data about [***] in either (i) the [***] for a Product, or (ii) in an
[***] in the United States, MERCK shall pay additional milestones
("Product Profile Milestones"), as follows:
(a) [***]:
(i) [***], or $US [***]
(ii) [***] $US [***]
(b) [***]:
In at least [***] as measured by: $US [***]
(i) [***],
(ii) [***],
(iii) [***], or
(iv) [***].
5.4.2 In the event the DOV 21,947 development program generates data as set
forth in either 5.4.1(a) or (b), fifty percent (50%) of the applicable
Product Profile Milestone(s) will be pre-paid at the same time as the
Product Development Milestone set forth in Section 5.3(a)(iii) for the
[***], and the remaining fifty percent (50%) will be pre-paid at the same
time as the Product Development Milestone set forth in Section 5.3(a)(vi)
([***]).
5.4.3 In the event that MERCK receives an Adverse FDA Decision (defined below)
with regard to a statement as described in Section 5.4.1(a) or Section
5.4.1(b), MERCK shall credit the Product Profile Milestone previously paid
for pursuant to Section 5.4.1(a) or Section 5.4.1(b) against royalty
payments made by MERCK to DOV pursuant to Section 5.6, which credit will
be spread equally over the first five years following the Launch Date (or
if an Adverse FDA Decision is received by MERCK after the Launch Date,
over the first five years following notification to MERCK of the Adverse
DDMAC Decision), or such longer period as necessary to obtain a full
credit of such Product Profile Milestone. Such credit shall be MERCK's
sole remedy, and DOV's entire liability, for an Adverse FDA Decision.
For purposes of this Section 5.4.3, an "Adverse FDA Decision" shall
be defined as occurring in the event that a decision is made by the FDA as
set forth in either clause (a) or (b) of this Section 5.4.3.
(a) An Adverse FDA Decision shall be deemed to occur if MERCK submits data
to the FDA for inclusion of a statement in the FDA-approved labeling of
the Product as set forth in Section 5.4.1(a) or (b), and if, after MERCK
exercises Commercially Reasonable Efforts to obtain the inclusion of a
such a statement in the FDA-approved labeling of the Product, the FDA
determines that the data presented by MERCK to support such a statement is
not sufficient to support inclusion of such statement in the approved
labeling for the Product. If MERCK obtains an Adverse FDA Decision
pursuant to Section 5.4.3(a) relating to labeling as set forth in either
Section 5.4.1(a) or (b), MERCK shall not be required to seek to publish or
distribute advertisements or promotional labeling inconsistent with such
Adverse FDA Decision.
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(b) In addition to Section 5.4.3(a), an Adverse FDA Decision shall be
deemed to occur if, after MERCK exercises Commercially Reasonable Efforts
to publish or distribute advertisements or promotional labeling as set
forth in Section 5.4.1(a) or (b), DDMAC objects to the inclusion of such
statement in advertisements or promotional labeling, and if MERCK after
exercising Commercially Reasonable Efforts to persuade DDMAC of the
appropriateness of such statement, is unsuccessful in persuading DDMAC or
other appropriate officials of the FDA to either (i) withdraw its
objection, or (ii) state that it will not take enforcement action with
regard to such statement in advertisements or promotional labeling as set
forth in Section 5.4.1(a) or (b), or (iii) state that it will not take
action against MERCK with respect to the continued use of such statement
in advertisements or promotional labeling.
5.4.4 If, subsequent to receiving an Adverse FDA Decision pursuant to either
Section 5.4.3(a) or (b), MERCK obtains data from Clinical Trials for a
Product to support inclusion of the statements in Sections 5.4.1(a) or (b)
based upon clinically significant data in either the FDA-approved label
for the Product or promotional or advertising statements (as provided in
Section 5.4.1(i) or (ii)), MERCK shall exercise Commercially Reasonable
Efforts to either (i) obtain FDA approval for inclusion of a statement in
the FDA-approved labeling of the Product as set forth in Section 5.4.1(a)
or (b), or (ii) to publish or distribute advertisements or promotional
labeling as set forth in Section 5.4.1(a) or (b).
(a) In the event that, after receiving an Adverse FDA Decision, MERCK
obtains FDA approval for inclusion of a statement in the FDA-approved
labeling of the Product as set forth in Section 5.4.1(a) or (b), MERCK
shall cease to take a credit against royalties as set forth in Section
5.4.3, and shall, within thirty (30) days of such FDA approval, refund to
DOV the amount previously credited against royalties relating to such
statement.
(b) In the event that MERCK publishes or distributes advertisements or
promotional labeling as set forth in Section 5.4.1(a) or (b) without
obtaining FDA approval for inclusion of such statement in the FDA-approved
labeling of the Product, and if MERCK does not receive an Adverse FDA
Decision regarding the inclusion of such statements in advertisements or
promotional labeling within six (6) months of the initial publication or
distribution of such advertisements or promotional labeling, MERCK shall
thereafter cease to take a credit against royalties as set forth in
Section 5.4.3, and shall immediately upon the expiration of such six (6)
month period refund to DOV the amount previously credited against
royalties relating to such statement.
5.5 SALES MILESTONE PAYMENTS
Subject to the terms and conditions of this Agreement, MERCK shall pay to
DOV the following payments based on the achievement of the following milestones
("Sales Milestones"):
(i) Upon achievement of worldwide Net Sales of Product
in one Calendar Year of [***] dollars (US [***]) $US [***]
(ii) Upon achievement of worldwide Net Sales of Product
in one Calendar Year of [***] dollars (US [***]) $US [***]
(iii) Upon achievement of worldwide Net Sales of Product
in one Calendar Year of [***] dollars (US [***]) $US [***]
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None of the payments attributable to Sales Milestones is refundable or
creditable against any other payments or obligations of MERCK coming due and do
not create any future performance obligations on the part of DOV. MERCK shall
notify DOV in writing within thirty (30) days following the end of each Calendar
Year in which a Sales Milestone is achieved, and shall make the appropriate
payment within thirty (30) days after the end of the Calendar Year in which such
Sales Milestone is achieved. The milestone payment shall be payable only upon
the initial achievement of such Sales Milestone and no amounts shall be due
hereunder for subsequent or repeated achievement of such Sales Milestone. For
avoidance of doubt, each Sales Milestone is separately achievable, and the
achievement of all Sales Milestone will yield aggregated payments by MERCK to
DOV of $US [***]. If Net Sales of Product reach $US [***] in one year, a Sales
Milestone payment of $US [***] will be due. If thereafter, Net Sales of Product
reach $US [***] in a second year, a Sales Milestone payment of $US [***] will be
due. If thereafter Net Sales of Product reach $US [***] in a third year, a Sales
Milestone payment of $US [***] will be due.
5.6 ROYALTIES
5.6.1 ROYALTIES PAYABLE BY MERCK. Subject to the terms and conditions of this
Agreement, MERCK shall pay DOV royalties, calculated on a
Product-by-Product basis, as set forth in this Section 5.6.1.
5.6.1.1 PATENT ROYALTIES. For those countries where the sale of a Product by
MERCK or its Related Parties would, but for either the existence of the
license grants provided in Sections 3.1 and 3.2, or MERCK's Control of
those MERCK Patent Rights claiming or covering compositions of matter of
Product or Compound, infringe a Valid Patent Claim, MERCK shall pay
royalties to DOV in an amount equal to the following percentage of Net
Sales of Products:
(a) [***] of worldwide Net Sales in each Calendar Year up to and
including [***] dollars ($US [***]);
(b) [***] of worldwide Net Sales in each Calendar Year for the portion
of Net Sales exceeding [***] dollars ($US [***]), up to and
including [***] dollars ($US [***]);
(c) [***] of worldwide Net Sales in each Calendar Year for the portion
of Net Sales exceeding [***] dollars ($US [***]), up to and
including [***] dollars ($US [***]); and
(d) [***] of worldwide Net Sales in each Calendar Year for the portion
of Net Sales exceeding [***] dollars ($US [***]).
5.6.1.2 KNOW-HOW ROYALTY. In countries where the sale of Product would not
result in a royalty payment obligation under Section 5.6.1.1, MERCK shall
pay royalty rates that shall be set at [***] percent ([***]%) of the
applicable royalty rate determined according to Section 5.6.1.1.
5.6.1.3 Royalty tiers pursuant to 5.6.1.1 and 5.6.1.2 shall be calculated based
on worldwide Net Sales of each Product, provided that the determination of
whether the royalty shall be calculated under 5.6.1.1 or 5.6.1.2 shall be
determined on a country-by-country basis. Royalties on each Product at the
rates set forth above shall continue on a country-by-country basis until
the expiration of the later of: (i) the last-to-expire Valid Patent Claim;
and (ii) ten (10) years after First Commercial Sale of such Product in
such country (the "Royalty Period"). All royalties are subject to the
following conditions:
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(a) that only one royalty shall be due with respect to the same unit of
Product;
(b) that no royalties shall be due upon the sale or other transfer among
MERCK or any Related Party, but in such cases the royalty shall be
due and calculated upon MERCK's or the Related Party's Net Sales to
the first Third Party;
(c) that no royalties shall accrue on the sale or other disposition of
Product by MERCK or its Related Parties for use in a Clinical Trial;
and
(d) that no royalties shall accrue on the disposition of Product in
reasonable quantities by MERCK or its Related Parties as samples
(promotion or otherwise) or as donations (for example, to non-profit
institutions or government agencies for a non-commercial purpose).
5.6.2 CHANGE IN SALES PRACTICES. The Parties acknowledge that during the term of
this Agreement, MERCK's sales practices for the marketing and distribution
of Product may change to the extent to which the calculation of the
payment for royalties on Net Sales may become impractical or even
impossible. In such event the Parties agree to meet and discuss in good
faith new ways of compensating DOV to the extent currently contemplated
under Section 5.6.1.
5.6.3 ROYALTIES FOR BULK COMPOUND. In those cases where MERCK or a Related Party
sells bulk Compound rather than Product to a Third Party, the royalty
obligations of Section 5.6.1 shall apply to such sale of bulk Compound.
5.6.4 COMPULSORY LICENSES. If MERCK or a Related Party, as a condition of
obtaining or maintaining Marketing Authorization in a country, is required
to grant a compulsory license to a Third Party with respect to Product in
any country in the Territory, and the royalty rate under such compulsory
license is lower than the royalty rate provided by Section 5.6.1, then the
royalty rate to be paid by MERCK on Net Sales under the applicable
compulsory license in that country under Section 5.6.1 shall be reduced to
the rate paid by the compulsory licensee.
5.6.5 THIRD PARTY LICENSES. In the event that one or more patent licenses from
other Third Parties are required by MERCK or its Related Parties in order
to make, have made, use, offer to sell, sell or import Compound
(hereinafter "Third Party Patent Licenses"), [***] percent ([***]%) of the
consideration actually paid under such Third Party Patent Licenses by
MERCK or its Related Parties for sale of such Compound or Product in a
country for a Calendar Quarter shall be creditable against the royalty
payments due DOV by MERCK with respect to the sale of such Compound or
Products in such country; provided, however, that in no event shall the
royalties owed by MERCK to DOV for such Calendar Quarter in such country
be reduced by more than [***] percent ([***]%).
5.7 REPORTS; PAYMENT OF ROYALTY. During the term of this Agreement following the
First Commercial Sale of a Product, MERCK shall furnish to DOV a quarterly
written report for the Calendar Quarter showing the Net Sales of all Products
subject to royalty payments sold by MERCK and its Related Parties in the
Territory during the reporting period and the royalties payable under this
Agreement. Reports shall be due on the thirtieth (30th) day following the close
of each Calendar Quarter. Royalties shown to have accrued by each royalty report
shall be due and payable on the date such royalty report is due. MERCK shall
keep complete and accurate records in sufficient detail to enable the royalties
payable hereunder to be determined.
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5.8 AUDITS.
(a) Upon the written request of DOV and not more than once in each
Calendar Year, MERCK shall permit an independent certified public
accounting firm of nationally recognized standing selected by DOV
and reasonably acceptable to MERCK, at DOV's expense, to have access
during normal business hours to such of the records of MERCK as may
be reasonably necessary to verify the accuracy of the Development,
Product Profile and Sales Milestones and royalty reports hereunder
for any year ending not more than [***] ([***]) months prior to the
date of such request. The accounting firm shall disclose to DOV only
whether the royalty reports are correct or incorrect and the amount
of any discrepancy. No other information shall be provided to DOV.
(b) If such accounting firm correctly identifies a discrepancy made
during such period, the appropriate Party shall pay the other Party
the amount of the discrepancy within thirty (30) days of the date
DOV delivers to MERCK such accounting firm's written report so
correctly concluding, or as otherwise agreed upon by the Parties.
The fees charged by such accounting firm shall be paid by DOV;
provided, however, that if such audit uncovers a non-payment or an
underpayment of milestone payments or royalties by MERCK during the
audited period that exceeds the greater of [***] dollars ($US [***])
or percent ([***]%) of the total milestone payments or royalties
owed, then the fees of such accounting firm shall be paid by MERCK.
(c) MERCK shall include in each sublicense granted by it pursuant to
this Agreement a provision requiring the sublicensee to make reports
to MERCK, to keep and maintain records of sales made pursuant to
such sublicense and to grant access to such records by DOV's
independent accountant to the same extent required of MERCK under
this Agreement.
(d) DOV shall treat all financial information subject to review under
this Section 5.8 or under any sublicense agreement in accordance
with the confidentiality and non-use provisions of this Agreement,
and shall cause its accounting firm to enter into an acceptable
confidentiality agreement with MERCK and/or its Related Parties
obligating it to retain all such information in confidence pursuant
to such confidentiality agreement.
5.9 PAYMENT EXCHANGE RATE. All payments to be made by MERCK to DOV under this
Agreement shall be made in United States dollars and may be paid by check made
to the order of DOV or bank wire transfer in immediately available funds to such
bank account in the United States as may be designated in writing by DOV from
time to time. In the case of sales outside the United States, the rate of
exchange to be used in computing the monthly amount of currency equivalent in
United States dollars due DOV shall be made at the monthly rate of exchange
utilized by MERCK in its worldwide accounting system, prevailing on the third to
the last business day of the month preceding the month in which such sales are
recorded by MERCK.
5.10 DOV 216,303 COMPETITION WITH DOV 21,947. If, during the term of this
Agreement MERCK reasonably demonstrates that the sale by prescription of a
finished pharmaceutical product containing DOV 216,303 by DOV, Wyeth or any
Affiliate or licensee of DOV or Wyeth has adversely affected MERCK's sales by
prescription of DOV 21,947 for an Indication for which MERCK has obtained
Marketing Authorization, upon MERCK's request the parties shall negotiate in
good faith to determine either (i) a commercially reasonable amount of monetary
compensation that DOV should pay MERCK, or (ii) any other reasonable adjustment
of payments made under this Agreement, in either such case to compensate MERCK
for such lost sales. The Parties agree that disputes arising under this Section
5.10 shall be governed by the dispute resolution procedures set forth in Section
12.6.
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5.11 INCOME TAX WITHHOLDING. If laws, rules or regulations require withholding
of income taxes or other taxes imposed upon payments set forth in this Article
5, MERCK shall make such withholding payments as may be required and shall
subtract such withholding payments from the payments set forth in this Article
5. MERCK shall submit appropriate proof of payment of the withholding taxes to
DOV within a reasonable period of time.
6. REPRESENTATIONS AND WARRANTIES
6.1 REPRESENTATIONS AND WARRANTIES OF DOV. DOV represents and warrants to MERCK
that as of the date of this Agreement:
(a) to DOV's knowledge, the DOV Patent Rights and DOV Know-How exist and
are not invalid or unenforceable, in whole or in part;
(b) DOV is duly organized and validly existing under the laws of its
state of incorporation;
(c) DOV has the full corporate right, power and authority to enter into
this Agreement, to perform the Collaboration and to grant the
licenses granted under Article 3 hereof, provided, however, that any
DOV representation or warranty pertaining to DOV Patent Rights or to
the infringement of Third Party Patent Rights is made exclusively by
DOV in Sections 6.1(g) and 6.1(h) below and not this Section 6.1(c);
(d) to DOV's knowledge, this Agreement is legally binding upon DOV and
enforceable in accordance with its terms, and the execution,
delivery, and performance of this Agreement by DOV does not conflict
with any agreement, instrument or understanding, oral or written, to
which it is a party or by which it may be bound, nor violate any
material law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it;
(e) DOV has received from Wyeth an acknowledgment that DOV has provided
to Wyeth the information required under Section 4.1 of the Wyeth
Agreement, and that Wyeth has declined to exercise the right of
first refusal conferred by Section 4.1 of the Wyeth Agreement;
(f) DOV has not previously assigned, transferred, conveyed or otherwise
encumbered its right, title and interest in DOV Patent Rights or DOV
Know-How;
(g) to DOV's knowledge, it is the sole and exclusive owner or licensee
of the DOV Patent Rights and DOV Know-How, all of which are free and
clear of any liens, charges and encumbrances, and no other person,
corporate or other private entity, or governmental entity or
subdivision thereof, has any claim of ownership whatsoever with
respect to the DOV Patent Rights and DOV Know-How, or, in the case
of Wyeth, Wyeth has no basis for objecting to the sublicense
thereof;
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(h) to DOV's knowledge, the exercise of the license granted to MERCK
under the DOV Patent Rights and DOV Know-How, including without
limitation the development, manufacture, use, sale and import of
Compound and Products do not interfere with or infringe any
intellectual property rights owned or possessed by any Third Party;
(i) to DOV's knowledge, there are no claims, judgments or settlements
against or owed by DOV and no pending or threatened claims or
litigation relating to the DOV Patent Rights and DOV Know-How; and
(j) DOV has disclosed to MERCK all reasonably relevant information
regarding the DOV Patent Rights and DOV Know-How licensed under this
Agreement, including without limitation all patent opinions obtained
by DOV related thereto.
6.2 REPRESENTATIONS AND WARRANTIES OF MERCK. MERCK represents and warrants to
DOV that as of the date of this Agreement:
(a) MERCK has the full right, power and authority to enter into this
Agreement and to perform the Collaboration;
(b) MERCK is duly organized and validly existing under the laws of its
country of incorporation;
(c) to MERCK's knowledge, this Agreement is legally binding upon MERCK
and enforceable in accordance with its terms, and the execution,
delivery, and performance of this Agreement by MERCK does not
conflict with any agreement, instrument or understanding, oral or
written, to which it is a party or by which it may be bound, nor
violate any material law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it;
(d) MERCK is a direct or indirect wholly-owned subsidiary of Merck &
Co., Inc.; and
(e) MERCK is not actively engaged in the clinical development of any
compound for the Indication of depression (as defined under DSM-IV).
6.3 DISCLAIMER. THE FOREGOING WARRANTIES OF EACH PARTY ARE IN LIEU OF ANY OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES OF NONINFRINGEMENT, ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR ANY
IMPLIED WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE HEREBY
SPECIFICALLY EXCLUDED AND DISCLAIMED.
7. PATENT PROVISIONS
7.1 FILING, PROSECUTION AND MAINTENANCE OF PATENTS. DOV shall file, prosecute
and maintain in the Territory, upon appropriate consultation with MERCK, the DOV
Patent Rights licensed to MERCK under this Agreement. MERCK shall file,
prosecute and maintain in the Territory, upon appropriate consultation with DOV,
the Joint Patent Rights. With respect to DOV Information and Inventions, DOV may
elect not to file and if so, DOV shall notify MERCK and MERCK shall have the
right to file such patent applications. In such event, DOV shall execute such
documents and perform such acts at DOV's expense as may be reasonably necessary
in a timely manner to allow MERCK to continue such prosecution on behalf of and
in the name of DOV. In each case, the filing Party shall give the non-filing
Party an opportunity to review the text of the application before filing, shall
consult with the non-filing Party with respect thereto, and shall supply the
non-filing Party with a copy of the application as filed, together with notice
of its filing date and serial number. For those patents and patent applications
covered in this Section 7.1, each filing Party shall keep the non-filing Party
advised of the status of the actual and prospective patent filings and, upon
request, shall provide advance copies of any papers related to the filing,
prosecution and maintenance of such patent filings. DOV shall promptly give
notice to MERCK of the grant, lapse, revocation, surrender, invalidation or
abandonment of any DOV Patent Rights licensed to MERCK for which DOV is
responsible for the filing, prosecution and maintenance. With respect to all
filings hereunder, the filing Party shall be responsible for payment of all
costs and expenses related to such filings.
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7.2 OPTION OF MERCK TO PROSECUTE AND MAINTAIN PATENTS. DOV shall give notice to
MERCK of any desire to cease prosecution and/or maintenance of DOV Patent Rights
on a country by country basis in the Territory and, in such case, shall permit
MERCK, in its sole discretion, to continue prosecution or maintenance of such
DOV Patent Rights at its own expense. If MERCK elects to continue prosecution or
maintenance or to file based on DOV's election not to file pursuant to Section
7.1 above, DOV shall execute such documents and perform such acts at DOV's
expense as may be reasonably necessary for MERCK to perform such prosecution or
maintenance or filing on behalf of and in the name of DOV. All of the
out-of-pocket expenses and costs incurred by MERCK to continue prosecution and
maintenance of DOV Patent Rights shall be fully creditable against royalties due
under Section 5.6 of this Agreement; provided, however, that no royalty payment
when due, regardless of the number of such credits available to MERCK in
accordance with the terms of this Agreement, shall be reduced by more than fifty
percent (50%). Unused credits may be carried over into subsequent royalty
periods.
7.3 INTERFERENCE, OPPOSITION, REEXAMINATION AND REISSUE.
7.3.1 Each Party shall, within ten (10) days of learning of such event, inform
the other Party of any request for, or filing or declaration of, any
interference, opposition, reissue or reexamination relating to DOV Patent
Rights or Joint Patent Rights. MERCK and DOV shall thereafter consult and
cooperate fully to determine a course of action with respect to any such
proceeding. MERCK shall have the right to review and approve any
submission to be made in connection with such proceeding relating to DOV
Patent Rights.
7.3.2 DOV shall not initiate any reexamination, interference or reissue
proceeding relating to DOV Patent Rights without the prior written consent
of MERCK, which consent shall not be unreasonably withheld. MERCK shall
not initiate any reexamination, interference or reissue proceeding
relating to Joint Patent Rights without the prior written consent of DOV,
which consent shall not be unreasonably withheld.
7.3.3 In connection with any interference, opposition, reissue, or reexamination
proceeding relating to DOV Patent Rights or Joint Patent Rights, MERCK and
DOV will cooperate fully and will provide each other with any information
or assistance that either may reasonably request. Each Party shall keep
the other Party informed of developments in any such action or proceeding,
including, to the extent permissible by law, consultation on and approval
of any settlement, the status of any settlement negotiations and the terms
of any offer related thereto.
7.3.4 DOV shall bear the expense of any interference, opposition, reexamination,
or reissue proceeding relating to DOV Patent Rights. Both Parties shall
share equally the expense of any interference, opposition, reexamination
or reissue proceeding related to Joint Patent Rights.
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7.3.5 Regardless of which Party has the right to initiate and prosecute such
action, both Parties shall, as soon as practicable after receiving notice
of such certification, convene and consult with each other regarding the
appropriate course of conduct for such action. The non-initiating Party
shall have the right to be kept fully informed and participate in
decisions regarding the appropriate course of conduct for such action, and
the right to join and participate in such action.
7.4 ENFORCEMENT AND DEFENSE.
7.4.1 DOV shall give MERCK notice of either (i) any infringement of DOV Patent
Rights or (ii) any misappropriation or misuse of DOV Know-How that may
come to DOV's attention. MERCK and DOV shall thereafter consult and
cooperate fully to determine a course of action, including but not limited
to the commencement of legal action by either or both MERCK and DOV, to
terminate any infringement of DOV Patent Rights or any misappropriation or
misuse of DOV Know-How. However, DOV, upon notice to MERCK, shall have the
first right to initiate and prosecute such legal action at its own expense
and in the name of DOV and MERCK, or to control the defense of any
declaratory judgment action relating to DOV Patent Rights or DOV Know-How.
DOV shall promptly inform MERCK if it elects not to exercise such first
right and MERCK shall thereafter have the right to either initiate and
prosecute such action or to control the defense of such declaratory
judgment action in the name of MERCK and, if necessary, DOV; provided that
MERCK shall not admit the invalidity or fail to defend the validity of any
DOV Patent Right without DOV's prior consent which shall not be
unreasonably withheld. Each Party shall have the right to be represented
by counsel of its own choice.
7.4.2 In the event that DOV elects not to initiate and prosecute an action as
provided in Section 7.4.1, and MERCK elects to do so, the costs of any
agreed-upon course of action to terminate infringement of DOV Patent
Rights or misappropriation or misuse of DOV Know-How, including without
limitation the costs of any legal action commenced or the defense of any
declaratory judgment, shall be shared equally by DOV and MERCK.
7.4.3 For any action to terminate any infringement of DOV Patent Rights or any
misappropriation or misuse of DOV Know-How, in the event that MERCK is
unable to initiate or prosecute such action solely in its own name, DOV
will join such action voluntarily and will execute and cause its
Affiliates to execute all documents necessary for MERCK to initiate
litigation to prosecute and maintain such action. In connection with any
action, MERCK and DOV will cooperate fully and will provide each other
with any information or assistance that either may reasonably request.
Each Party shall keep the other informed of developments in any action or
proceeding, including, to the extent permissible by law, consultation on
and approval of any settlement, the status of any settlement negotiations
and the terms of any offer related thereto.
7.4.4 Any recovery obtained by either or both MERCK and DOV in connection with
or as a result of any action contemplated by this Section 7.4, whether by
settlement or otherwise, shall be shared in order as follows:
(a) the Party that initiated and prosecuted the action shall recoup all
of its costs and expenses incurred in connection with the action;
(b) the other Party shall then, to the extent possible, recover its
costs and expenses incurred in connection with the action; and
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(c) the amount of any recovery remaining shall then be allocated on a
[***]%/[***]% basis, with the Party that initiated and prosecuted
the action receiving [***]% of the recovery and the other Party
receiving [***]% of the recovery.
7.4.5 DOV shall inform MERCK of any certification regarding any DOV Patent
Rights it has received pursuant to either 21 U.S.C. ss.ss.355(b)(2)(A)(iv)
or (j)(2)(A)(vii)(IV) or its successor provisions, or any similar
provisions in a country in the Territory other than the United States, and
shall provide MERCK with a copy of such certification within five (5) days
of receipt. DOV's and MERCK's rights with respect to the initiation and
prosecution of any legal action as a result of such certification or any
recovery obtained as a result of such legal action shall be as defined in
Sections 7.4.1 through 7.4.4 hereof; provided, however, that DOV shall
exercise its first right to initiate and prosecute any action and shall
inform MERCK of such decision within ten (10) days of receipt of the
certification, after which time MERCK shall have the right to initiate and
prosecute such action.
7.5 PATENT TERM RESTORATION, EXTENSION OR ADJUSTMENT. The Parties hereto shall
cooperate with each other, including without limitation to provide necessary
information and assistance as the other Party may reasonably request, in
obtaining patent term restoration, extension or adjustment certificates or their
equivalents in any country in the Territory where applicable to DOV Patent
Rights or Joint Patent Rights. The Party responsible for prosecuting a patent
application included in the DOV Patent Rights or Joint Patent Rights shall apply
promptly for patent term restoration or adjustment after the application issues
as a U.S. or foreign patent, consistent with those procedures set forth in 35
U.S.C. ss.ss. 154(b) and 155A or their foreign equivalents. For any patent which
encompasses within its scope Compound or Product, either as a composition of
matter or as a process for using such composition, that has been subjected to
regulatory review by the FDA or comparable foreign regulatory agency, the owner
of record for such patent shall apply for patent term extension in accordance
with the procedures set forth in 35 U.S.C ss. 156. For any Product or Compound,
if the Party sponsoring the regulatory review thereof is not the owner of record
of all patents eligible for patent term extension under 35 U.S.C. ss. 156, the
Party sponsoring the regulatory review for Compound or Product shall inform the
owner of record promptly of any regulatory approval that triggers the aforesaid
obligation to apply for patent term extension. In the event that elections with
respect to obtaining such patent term restoration, extension or adjustment are
to be made, MERCK shall have the right to make the election and DOV agrees to
abide by such election.
7.6 WYETH AGREEMENT. The Parties acknowledge that DOV's rights to prosecute and
maintain DOV Patent Rights relating to DOV 216,303 are subject to the Wyeth
Agreement, and that this Article 7 shall be interpreted and applied in a manner
consistent with the relevant provisions of the Wyeth Agreement.
7.7 EFFECT OF CERTAIN TERMINATIONS. Notwithstanding the foregoing provisions of
Article 7 to the contrary, in the event of a termination of this Agreement by
either Party pursuant to Section 9.2 or by DOV pursuant to Section 9.3, MERCK
shall have no rights and DOV shall have no obligations under this Article 7 with
respect to DOV Patent Rights.
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8. INDEMNIFICATION
8.1 BY MERCK. MERCK agrees to indemnify, hold harmless and defend DOV and its
officers, directors, shareholders, employees, successors and assigns
(collectively, the "DOV Indemnified Parties") against any and all losses,
costs, expenses, fees or damages arising out of or relating to claims
asserted by any Third Party, whether governmental and private, arising out
of or relating to (i) personal injury arising from the development,
manufacture, use, sale or other disposition of Product by MERCK or its
Related Parties under this Agreement; (ii) MERCK's breach of any of its
representations and warranties set forth in Section 6.2 of this Agreement;
(iii) MERCK's failure to comply with all applicable laws, rules and
regulations; or (iv) the gross negligence or willful misconduct of any of
the MERCK Indemnified Parties as defined below, provided that MERCK shall
not be required to indemnify, hold harmless or defend any DOV Indemnified
Party against any claim arising out of or related to any DOV Indemnified
Party's (w) use, development and/or commercialization of any product
containing a Compound in the event of DOV's obtaining of rights relating
to Compounds and Products pursuant to Section 9.4.3; (x) use of Mother
Liquor provided by MERCK to DOV pursuant to Section 3.8; (y) gross
negligence or willful misconduct, or (z) failure to comply with all
applicable laws, rules and regulations.
8.2 BY DOV. DOV agrees to indemnify, hold harmless and defend MERCK and its
officers, directors, shareholders, employees, successors and assigns
(collectively, the "MERCK Indemnified Parties") against any and all
losses, costs, expenses, fees or damages arising out of or relating to
claims asserted by any Third Party, whether governmental and private,
arising out of or relating to (i) DOV's breach of any of its
representations and warranties set forth in Section 6.1 of this Agreement;
(ii) DOV's failure to comply with all applicable laws, rules and
regulations; (iii) in the event of DOV's obtaining of rights relating to
Compounds and Products pursuant to Section 9.4.3, DOV's use, development
and/or commercialization of any product containing a Compound; (iv) any
use by DOV or any other person of Mother Liquor provided by MERCK to DOV
pursuant to Section 3.8; or (v) the gross negligence or willful misconduct
of any of the DOV Indemnified Parties, provided that DOV shall not be
required to indemnify, hold harmless or defend any MERCK Indemnified Party
against any claim arising out of or related to any MERCK Indemnified
Party's (y) gross negligence or willful misconduct, or (z) failure to
comply with all applicable laws, rules and regulations.
8.3 PROCEDURE. If either Party is seeking indemnification under Sections 8.1
or 8.2 (the "Indemnified Party"), it shall inform the other Party (the
"Indemnifying Party") of the claim giving rise to the obligation to
indemnify pursuant to such section as soon as reasonably practicable after
receiving notice of the claim. The Indemnifying Party shall have the right
to assume the defense of any such claim for which it is obligated to
indemnify the Indemnified Party. The Indemnified Party shall cooperate
with the Indemnifying Party and the Indemnifying Party's insurer as the
Indemnifying Party may reasonably request, and at the Indemnifying Party's
cost and expense. The Indemnified Party shall have the right to
participate, at its own expense and with counsel of its choice, in the
defense of any claim or suit that has been assumed by the Indemnifying
Party. Neither Party shall have the obligation to indemnify the other
Party in connection with any settlement made without the Indemnified
Party's written consent, which consent shall not be unreasonably withheld
or delayed. If the Parties cannot agree as to the application of Sections
8.1 or 8.2 to any claim, pending resolution of the dispute pursuant to
Section 12.6, the Parties may conduct separate defenses of such claims,
with each Party retaining the right to claim indemnification from the
other Party in accordance with Sections 8.1 or 8.2 upon resolution of the
underlying claim.
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9. TERM AND TERMINATION
9.1 TERM AND EXPIRATION. This Agreement shall be effective as of the Closing
Date and, unless terminated earlier pursuant to Sections 9.2 or 9.3 below, this
Agreement shall continue in effect until expiration of all royalty obligations
hereunder. Upon expiration of this Agreement, MERCK's and DOV's licenses
pursuant to Section 3.1 and Section 3.2 shall become fully paid-up, perpetual
licenses.
9.2 TERMINATION BY MERCK WITHOUT CAUSE. Notwithstanding anything contained
herein to the contrary, MERCK shall have the right to terminate this Agreement
at any time in its sole discretion by giving [***] ([***]) days' advance written
notice to DOV. Prior to the effective date of the termination of this Agreement
pursuant to this Section 9.2, MERCK shall return or cause to be returned to DOV
all Information in tangible form received from DOV and all copies thereof;
provided, however, that MERCK may retain one copy of Information received from
DOV in its confidential files for record purposes.
9.3. TERMINATION FOR CAUSE. This Agreement may be terminated at any time during
the term of this Agreement:
9.3.1.upon written notice by either Party if the other Party is in breach of
any material obligation hereunder and has not cured such breach within
ninety (90) days after written notice requesting cure of the breach,
subject to Section 9.3.2; provided, however, that in the event of a good
faith dispute with respect to the existence of a material breach, the
ninety (90) day cure period shall be tolled until such time as the dispute
is resolved pursuant to Section 12.6 hereof; or
9.3.2.either Party upon the filing or institution of bankruptcy,
reorganization, liquidation or receivership proceedings, or upon an
assignment of a substantial portion of the assets for the benefit of
creditors by the other party (a "Bankruptcy Event"), provided, however,
that in the case of any involuntary bankruptcy proceeding such right to
terminate shall only become effective if the Party consents to involuntary
bankruptcy or such proceeding is not dismissed within ninety (90) days
after the filing thereof.
9.3.3.In the event that MERCK breaches a material obligation of the Agreement
after the First Commercial Sale in the United States, EMEA or Japan, and
such breach relates only to the development or commercialization of the
Product in a single country or group of countries, the Agreement shall be
terminable by DOV only in the country or group of countries to which such
breach relates. For avoidance of doubt, a failure of MERCK to exercise
Commercially Reasonable Efforts pursuant to Section 3.6 shall be deemed a
breach of a material obligation of MERCK.
9.4 EFFECT OF TERMINATION; SURVIVAL.
9.4.1 EFFECT ON LICENSES. (a) In the event of termination under Section 9.2
above or termination by DOV pursuant to Section 9.3 above, MERCK's
licenses pursuant to Sections 3.1 and 3.2 shall terminate as of such
termination date, provided, however, that MERCK shall have a fully
paid-up, non-exclusive license to use DOV Information and Inventions and
Joint Information and Inventions for internal research purposes only.
(b) In the event of termination by MERCK pursuant to Section 9.3 above,
all licenses pursuant to Sections 3.1 and 3.2 shall become perpetual
licenses, subject to the obligation to pay
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milestones and royalties as set forth in this Section 9.4.1(b), provided
that any license to DOV 216,303 will be subject to the terms and
conditions of the Wyeth Agreement, and MERCK's rights pursuant to Section
3.4 shall become perpetual. DOV shall, within thirty (30) days after the
effective date of such termination, return or cause to be returned to
MERCK all Information in tangible form, and all substances or compositions
delivered or provided by MERCK, as well as any other material provided by
MERCK in any medium. In the event of such a termination by MERCK, MERCK
shall continue to have an obligation to pay DOV milestones pursuant to and
under the terms set forth in Sections 5.3, 5.4 and 5.5, provided that the
amount of such milestone payments shall be [***] percent ([***]%) of the
amounts set forth in Sections 5.3, 5.4 and 5.5, and MERCK shall further
continue to have an obligation to pay DOV royalties pursuant to and under
the terms set forth in Section 5.6, provided that the amount of such
royalties shall be [***] percent ([***]%) of the amounts set forth in
Section 5.6.
9.4.2 PAYMENT OBLIGATIONS FOLLOWING TERMINATION. In the event of termination
under Section 9.2 or 9.3 above, each Party shall pay all amounts then due
and owing as of the effective date of such termination no later than sixty
(60) days after the effective date of such termination (such 60 day
period, the "Transition Period").
9.4.3 KNOW-HOW AND PATENT TRANSFERS, REGULATORY FILINGS AND LICENSES.
(a) In the event of termination by MERCK pursuant to Section 9.2 or by
DOV pursuant to Section 9.3 above, no later than the end of the
Transition Period, MERCK shall deliver to DOV the MERCK Termination
Know-How; provided; however, that MERCK and its Affiliates will
transfer to DOV any Information or Joint Information and Inventions
necessary or useful to the prosecution of DOV Patent Rights or Joint
Patent Rights no less than thirty (30) days before any application
deadline applicable to any DOV Patent Right or Joint Patent Rights.
(b) Effective only upon the event of termination of this Agreement under
Section 9.2 or by DOV pursuant to Section 9.3 above, (i) MERCK
hereby transfers, and agrees to transfer, to DOV title to or
sponsorship of any IND, NDA or other regulatory filing held in the
name of MERCK or its Related Parties pertaining to the Compound or
the Product or, (ii) if such transfer is not legally permissible or
such items do not relate solely to Compound or Product, MERCK hereby
grants, and agrees to grant, DOV the right, with the right to
sublicense, to access, use and cross-reference such data, filings
and approvals from Regulatory Authorities, which right shall be
exclusive (including as to MERCK) with respect to Compound and
Product.
(c) Effective upon the effective date of the termination of this
Agreement under Section 9.2 or 9.3 above, MERCK hereby grants to DOV
a paid-up, royalty-free, perpetual, irrevocable, exclusive (even as
to MERCK and its Affiliates) license, under MERCK Patent Rights,
MERCK's and its Controlled Affiliates' rights under Joint Patent
Rights, and MERCK Termination Know-How, to the extent that such
MERCK Patent Rights and MERCK Termination Know-How are exclusively
related to Compound(s) and/or Product(s), with a right to
sublicense, to make, have made, use, offer to sell, sell or import
Compound(s) and/or Product(s) for use and sale in the country or
countries to which such termination relates.
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(d) Effective upon the effective date of the termination of this
Agreement under Section 9.2 or 9.3 above, MERCK hereby grants to DOV
a paid-up, royalty-free, perpetual, irrevocable, non-exclusive
license, under MERCK Patent Rights, MERCK's and its Controlled
Affiliates' rights under Joint Patent Rights and MERCK Termination
Know-How that are not licensed under Section 9.4.3(b) and that are
related to Compound(s) and/or Product(s), with a right to
sublicense, to make, have made, use, offer to sell, sell or import
Compound(s) and/or Product(s) for use and sale in the country or
countries to which such termination relates.
(e) Following the effective date of the termination of this Agreement
under Section 9.2 or 9.3 above, neither MERCK nor its Controlled
Affiliates shall sue or otherwise assert any claim against (or
participate in or join or otherwise aid in any claim or action
against) DOV, any contract manufacturer of DOV and/or any
sublicensee of DOV to the extent that such claim is or would be
based on the manufacture, use, sale, offer for sale or importation
of Compound(s) and/or Product(s), which manufacture, use, sale,
offer for sale or importation is or would be alleged to infringe any
Patent Right (now or in the future) Controlled by MERCK or its
Controlled Affiliates .
(f) No later than the end of the Transition Period, MERCK and its
Controlled Affiliates shall transfer at no cost to DOV any Compound
or Product in MERCK's possession or in the possession of a Related
Party.
(g) During the Transition Period, MERCK and its Controlled Affiliates
shall provide reasonable technical support from technical and
scientific personnel of MERCK and its Affiliates to effect the
complete transfer of Information from MERCK to DOV, including
Information necessary for the use of MERCK Termination Know-How and
the practice of MERCK Patent Rights and Joint Patent Rights in
relation to Compound or Product.
9.4.4 Notwithstanding anything in this Section 9.4, MERCK shall not be required
to provide a license under MERCK Patent Rights or MERCK Termination
Know-How, for use of Compound(s) and/or Product(s) in humans as a result
of a termination of this Agreement, if (a) [***] and (b) either (i) [***]
or (ii) [***]. For the avoidance of doubt, (y) in the event of a
determination by MERCK that such Product is materially unsafe for use in
humans, the provisions of Article 10 shall apply and (z) nothing in this
Section 9.4.4 shall prevent DOV from exercising any of its rights under
Section 9.4.3 in connection with the use of Compound(s) and/or Product(s)
in non-humans.
9.5 SURVIVAL. Expiration or termination of this Agreement shall not relieve
the Parties of any obligation accruing prior to such expiration or
termination. Any expiration or termination of this Agreement shall be
without prejudice to the rights of either Party against the other accrued
or accruing under this Agreement prior to expiration or termination,
including without limitation the obligation to pay royalties for
Product(s) or Compound sold prior to such expiration or termination. The
provisions of Article 4 (other than Section 4.5) shall survive the
expiration or termination of this Agreement and shall continue in effect
for ten (10) years. In addition, the provisions of Articles 1, 6, 7
(subject to Section 7.7), 8, and 12 and Sections 9.4 and 9.5 shall survive
any expiration or termination of this Agreement.
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9.6 UNITED STATES BANKRUPTCY CODE. All licenses and rights to licenses granted
under or pursuant to this Agreement are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the United States Bankruptcy Code (the
"Code"), licenses of rights to "intellectual property" as defined under Section
101(35A) of the Code. Either Party, as a licensee of such rights under this
Agreement (the "non-Bankrupt party"), shall retain and may fully exercise all of
its rights and elections under the Code, and upon commencement of a bankruptcy
proceeding by or against the other Party (the "Bankrupt Party") under the Code,
shall be entitled to a complete duplicate of, or complete access to (as the
non-Bankrupt Party deems appropriate), any such intellectual property and all
embodiments of such intellectual property. Such intellectual property and all
embodiments thereof shall be promptly delivered to the non-Bankrupt Party (i)
upon any such commencement of a bankruptcy proceeding upon written request
therefor by the non-Bankrupt Party, unless the Bankrupt Party elects to continue
to perform all of its obligations under this Agreement or (ii) if not delivered
under (i) above, upon the rejection of this Agreement by or on behalf of the
Bankrupt Party upon written request therefor by the non-Bankrupt Party. The
foregoing provisions of Section 9.6 are without prejudice to any rights the
non-Bankrupt Party may have arising under the Code or other applicable law.
10. SAFETY ISSUES.
10.1 In the event that MERCK determines that the Product is materially
unsafe for use in humans, MERCK agrees to meet promptly with DOV following
such determination, (i) to show DOV all preclinical and clinical data
related to the Product, including the data demonstrating such material
lack of safety for use in humans; (ii) to explain to DOV the basis for
MERCK's reasonable determination that the Product is materially unsafe for
use in humans, including the factors supporting MERCK's decision; and
(iii) to discuss with DOV whether Compound or Product may be safe for
Indications other than those tested by MERCK, or may be safe using reduced
doses, or may be safe for administration to patient populations other than
those tested by MERCK.
10.2 [***].
11. CONDITIONS TO CLOSING; HSR ACT
11.1 HSR FILING.
(a) Each of MERCK and DOV shall, within fifteen (15) days after the
Execution Date, file with the United States Federal Trade Commission
and the Antitrust Division of the United States Department of
Justice, any HSR Filing required of it under the HSR Act with
respect to the transactions contemplated hereby. The Parties will
cooperate with one another to the extent necessary in the
preparation of any such HSR Filing. Each Party will be responsible
for its own costs, expenses, and filing fees associated with any HSR
Filing.
(b) In respect of any HSR Filing, each of MERCK and DOV will use its
good faith efforts to eliminate any concern on the part of any court
or Governmental Authority regarding the legality of the proposed
transaction, including cooperating in good faith with any government
investigation and the prompt production of documents and information
demanded by a second request for documents and of witnesses if
requested.
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11.2 CLOSING DATE OF AGREEMENT. The Closing Date shall not occur until such
time as (a) the waiting period under the HSR Act shall have expired or
earlier been terminated; (b) no injunction (whether temporary, preliminary
or permanent) prohibiting consummation of the transactions contemplated by
this Agreement or any material portion hereof shall be in effect; and (c)
no requirements or conditions shall have been imposed in connection
therewith which are not reasonably satisfactory to the Parties
(collectively, the "HSR Conditions").
11.3 PORTIONS OF AGREEMENT EFFECTIVE AS OF EXECUTION DATE. Notwithstanding
Section 11.2 and anything in this Agreement to the contrary, the following
provisions of the Agreement shall be in full force and effect as of the
Execution Date: Article 1 (Definitions), Article 4 (Confidentiality),
Article 6 (Representations and Warranties), Article 8 (Indemnification),
Article 9 (Termination) Article 11 (Conditions to Closing; HSR Act), and
Article 12 (Miscellaneous).
12. MISCELLANEOUS
12.1 FORCE MAJEURE. Neither Party shall be held liable to the other Party nor be
deemed to have defaulted under or breached this Agreement for failure or delay
in performing any obligation under this Agreement to the extent that such
failure or delay is caused by or results from causes beyond the reasonable
control of the affected Party, potentially including, but not limited to,
embargoes, war, acts of war (whether war be declared or not), insurrections,
riots, civil commotions, strikes, lockouts or other labor disturbances, fire,
floods, or other acts of God, or acts, omissions or delays in acting by any
Governmental Authority or the other Party. The affected Party shall notify the
other Party of such force majeure circumstances as soon as reasonably practical,
and shall promptly undertake all reasonable efforts necessary to cure such force
majeure circumstances.
12.2 ASSIGNMENT/ CHANGE OF CONTROL. Except as provided in this Section 12.2,
this Agreement may not be assigned or otherwise transferred, nor may any right
or obligation hereunder be assigned or transferred, by either Party without the
consent of the other Party. MERCK may, without DOV's consent, assign this
Agreement and its rights and obligations hereunder in whole or in part to a
MERCK Affiliate or in connection with a Change of Control (as defined below). In
the event of such Change of Control, MERCK will promptly (but in no event later
than five (5) days thereafter) notify DOV of such Change of Control. DOV may,
without MERCK's consent, assign this Agreement and its rights and obligations
hereunder (except as specified below) in connection with a Change of Control. In
the event of such Change of Control, DOV will promptly (but in no event later
than five (5) days thereafter) notify MERCK of such Change of Control. Any
assignee shall assume all assigned obligations of its assignor under this
Agreement. Any attempted assignment not in accordance with this Section 12.2
shall be void. In addition to MERCK's rights set forth above, in the event of a
Change of Control in which a Major Pharma Entity obtains control of DOV by
acquiring DOV's assets or voting equity securities (by asset purchase, merger,
consolidation, reorganization or otherwise) (a) all provisions of this Agreement
that require MERCK to provide information to DOV shall terminate, except (i)
royalty reports pursuant to Section 5.7; (ii) notices of the attainment of any
Development Milestone or Product Profile Milestone (as described in Section 5.3
or Section 5.4 hereunder); and (iii) disclosures to DOV required under Section
9.4.4 or Section 10; and (b) DOV's option to co-promote Product in the United
States pursuant to Section 3.7 shall terminate immediately upon such Change of
Control. A "Change of Control" of a Party shall be
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deemed to occur if such Party is involved in a merger, reorganization or
consolidation, or if there is a sale of all or substantially all of such Party's
assets or business relating to this Agreement or if a person or group other than
the current controlling person or group shall effectively acquire control of the
management and policies of such Party. Also, for purposes of this Section 12.2,
"Major Pharma Entity" shall mean any health care company, or group of health
care companies acting in concert to effect a Change of Control of DOV, for whom
the worldwide sales of pharmaceutical products (collectively in the case of such
a group of companies) in the Calendar Year that preceded the Change of Control
is in excess of [***] U.S. Dollars ($[***]), as reported by such entity or group
or as reported by IMS America Ltd. of Plymouth Meeting, Pennsylvania ("IMS") or
any successor to IMS. In the event of any permitted assignment for either Party
hereunder, no Patent Rights, or any Information for purposes of the definitions
of DOV Know-How, MERCK Know-How and MERCK Termination Know-How, of any Third
Party, or any of such Third Party's Affiliates that is an acquiring party shall
be deemed "Controlled" for any purpose hereunder if such Patent Rights or
Information were not so Controlled prior to such permitted assignment.
12.3 SEVERABILITY. If any one or more of the provisions contained in this
Agreement is held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby, unless the absence
of the invalidated provision(s) adversely affects the substantive rights of the
Parties. The Parties shall in such an instance use their best efforts to replace
the invalid, illegal or unenforceable provision(s) with valid, legal and
enforceable provision(s) which, insofar as practical, implement the purposes of
this Agreement.
12.4 NOTICES. All notices which are required or permitted hereunder shall be in
writing and sufficient if delivered personally, sent by facsimile (and promptly
confirmed by personal delivery, registered or certified mail or overnight
courier), sent by nationally-recognized overnight courier or sent by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:
If to DOV, to: DOV Pharmaceutical, Inc.
433 Hackensack Avenue
Hackensack, NJ 07601
Attention: CEO
Facsimile No.: (201) 968-0986
and: Attention: Office of General Counsel
Facsimile No.: (201) 968-0986
If to MERCK, to: MSD Warwick (Manufacturing) Ltd.
Chesney House
96 Pitts Bay Road,
Pembroke HM 08,
Bermuda
Attention: Financial Director
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with a copy to: MERCK & Co., Inc.
One MERCK Drive
P.O. Box 100, WS3A-65
Whitehouse Station, NJ 08889-0100
Attention: Office of Secretary
Facsimile No.: (908)735-1246
and MERCK & Co., Inc.
One MERCK Drive
Attention: Chief Licensing Officer
P.O. Box 100, WS2A-30
Whitehouse Station, NJ 08889-0100
Facsimile: (908)735-1214
or to such other address(es) as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith. Any such notice
shall be deemed to have been given: (a) when delivered, if personally delivered
or sent by facsimile on a business day (or if delivered or sent on a
non-business day, then on the next business day); (b) on the business day after
dispatch, if sent by nationally-recognized overnight courier; or (c) on the
fifth (5th) business day following the date of mailing, if sent by mail.
12.5 APPLICABLE LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey and the patent laws of the
United States, without reference to any rules of conflict of laws or renvoi,
provided that any dispute relating to the scope, validity, enforceability,
infringement or misuse of any Patent Rights shall be governed by, and construed
and enforced in accordance with, the substantive laws of the jurisdiction in
which such Patent Right originates. The United Nations conventions on Contracts
for the International Sale of Goods shall not apply.
12.6 DISPUTE RESOLUTION.
12.6.1 The Parties shall negotiate in good faith and use reasonable efforts to
settle any dispute, controversy or claim arising from or related to
this Agreement or the breach thereof. If the Parties do not fully
settle, and a Party wishes to pursue the matter, each such dispute,
controversy or claim that is not an "Excluded Claim" shall be finally
resolved by binding arbitration in accordance with the Commercial
Arbitration Rules and Supplementary Procedures for Large Complex
Disputes of the American Arbitration Association ("AAA"), and judgment
on the arbitration award may be entered in any court having
jurisdiction thereof.
12.6.2 The arbitration shall be conducted by a panel of three persons
experienced in the pharmaceutical business. Within thirty (30) days
after initiation of arbitration, each Party shall select one person to
act as arbitrator; and the two Party-selected arbitrators shall select
a third arbitrator within thirty (30) days of their appointment. If the
arbitrators selected by the Parties are unable or fail to agree upon
the third arbitrator, the third arbitrator shall be appointed by the
AAA. The place of arbitration shall be New York, New York, and all
proceedings and communications shall be in English.
12.6.3 Either Party may apply to the arbitrators for interim injunctive relief
until the arbitration award is rendered or the controversy is otherwise
resolved. Either Party also may, without waiving any remedy under this
Agreement, seek from any court having jurisdiction any injunctive or
provisional relief necessary to protect the rights or property of that
Party pending the arbitration
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*** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO THIS MATERIAL.
award. The arbitrators shall have no authority to award punitive or any
other type of damages not measured by a Party's compensatory damages.
Each Party shall bear its own costs and expenses and attorneys' fees
and an equal share of the arbitrators' fees and any administrative fees
of arbitration.
12.6.4 Except to the extent necessary to confirm an award or as may be
required by law, neither a Party nor an arbitrator may disclose the
existence, content, or results of an arbitration without the prior
written consent of both Parties. In no event shall an arbitration be
initiated after the date when commencement of a legal or equitable
proceeding based on the dispute, controversy or claim would be barred
by the applicable New Jersey statute of limitations.
12.6.5 The Parties agree that, in the event of a dispute over the nature or
quality of performance under this Agreement, neither Party may
terminate this Agreement until final resolution of the dispute through
arbitration or other judicial determination. The Parties further agree
that any payments made pursuant to this Agreement pending resolution of
the dispute shall be refunded if an arbitrator or court determines that
such payments are not due.
12.6.6 In any arbitration on the issue of whether MERCK used Commercially
Reasonable Efforts to develop a Product pursuant to Section 3.6, MERCK
shall have the burden of proving that it has exercised Commercially
Reasonable Efforts, provided, however, that MERCK shall be presumed to
have met such obligation if MERCK does not materially deviate from the
objectives, plans and timelines described in the Drug Development Plan.
If MERCK does materially deviate from the objectives, plans and
timelines described in the Drug Development Plan, MERCK shall have the
burden of demonstrating that, under the circumstances, MERCK exercised
Commercially Reasonable Efforts to develop the Product.
12.6.7 [***].
12.6.8 As used in this Section, the term "Excluded Claim" shall mean a
dispute, controversy or claim that concerns (a) the validity or
infringement of a patent, trademark or copyright; or (b) any antitrust,
anti-monopoly or competition law or regulation, whether or not
statutory.
12.7 ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the entire
understanding of the Parties with respect to the Collaboration and the licenses
granted hereunder. Any other express or implied agreements and understandings,
either oral or written, with regard to the Collaboration or the licenses granted
hereunder (including but not limited to the Material Transfer Agreement dated
August 4, 2004) are superseded by the terms of this Agreement. This Agreement
may be amended, or any term hereof modified, only by a written instrument duly
executed by authorized representatives of both Parties hereto.
12.8 HEADINGS. The captions to the several Articles and Sections hereof are not
a part of this Agreement, but are merely for convenience to assist in locating
and reading the several Articles and Sections hereof.
12.9 INDEPENDENT CONTRACTORS. It is expressly agreed that DOV and MERCK shall be
independent contractors and that the relationship between the Parties shall not
constitute a partnership, joint venture or agency. Neither DOV nor MERCK shall
have the authority to make any statements, representations or commitments of any
kind, or to take any action, which shall be binding on the other Party, without
the prior written consent of the other Party.
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12.10 WAIVER. The waiver by either Party hereto of any right hereunder, or of
any failure of the other Party to perform, or of any breach by the other Party,
shall not be deemed a waiver of any other right hereunder or of any other breach
by or failure of such other Party, whether of a similar nature or otherwise.
12.11 CUMULATIVE REMEDIES. No remedy referred to in this Agreement is intended
to be exclusive, but each shall be cumulative and in addition to any other
remedy referred to in this Agreement or otherwise available under law.
12.12 WAIVER OF RULE OF CONSTRUCTION. Each Party has had the opportunity to
consult with counsel in connection with the review, drafting and negotiation of
this Agreement. Accordingly, the rule of construction that any ambiguity in this
Agreement shall be construed against the drafting Party shall not apply.
12.13 COUNTERPARTS. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date first set forth above.
MSD WARWICK (MANUFACTURING) LTD. DOV PHARMACEUTICAL, INC.
BY: /s/ Kevin Latham BY: /s/ Arnold S. Lippa
----------------------- ----------------------
NAME: Kevin Latham NAME: Arnold S. Lippa
TITLE: Vice President TITLE: Chief Executive Officer
DATE: August 5, 2004 DATE: August 5, 2004
Merck & Co., Inc. hereby makes the following limited guarantees of the
obligations of MSD Warwick (Manufacturing) Ltd. under this Agreement: (1) Merck
& Co., Inc. guarantees payment by MSD Warwick (Manufacturing) Ltd. of its
payment obligations pursuant to this Agreement, for the duration of such payment
obligations pursuant to this Agreement; (2) Merck & Co., Inc. guarantees the
solvency of MSD Warwick (Manufacturing) Ltd. during the term of this Agreement.
MERCK & CO., INC.
By: /s/ Judy C. Lewent
--------------------------------
Name: Judy C. Lewent
Title: Executive VP & CFO,
President Human Health Asia
/rsk
8/05/04
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SCHEDULE 1.28 DOV PATENT RIGHTS
-------------------------------
U.S. Pat. No. 6,372,919
U.S. Pat. No. 6,204,284
Schedule 1.28; Page 1
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SCHEDULE 1.57 MERCK TERMINATION KNOW-HOW
----------------------------------------
***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS ENTIRE SCHEDULE, WHICH
CONSISTS OF A TOTAL OF ONE PAGE. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
[***]
Schedule 1.57; Page 1
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SCHEDULE 2.1 DRUG DEVELOPMENT PLAN
PRELIMINARY PROPOSED DEVELOPMENT PROGRAM FOR [***]
***CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THIS ENTIRE SCHEDULE, WHICH
CONSISTS OF A TOTAL OF FIVE PAGES. A COMPLETE VERSION OF THIS SCHEDULE HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
[***]
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SCHEDULE 3.7 CO-PROMOTION OF PRODUCTS BY DOV
*** CONFIDENTIAL TREATMENT HAS BEEN REQUESTED AS TO THIS MATERIAL. A COMPLETE
VERSION OF THIS SCHEDULE HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.
1. GENERAL: This Schedule sets out the terms under which DOV may co-promote the
Product by Detailing to psychiatrists and neurologists, subject to the
negotiation and execution of a definitive Co-Promotion Agreement.
2. CO-PROMOTION AGREEMENT. Upon exercise by DOV of the Co-Promotion Option, and
pursuant to the procedures set forth in Section 3.7, the Parties shall enter
into an agreement relating to the Detailing of Products to Target Prescribers
(the "Co-Promotion Agreement"). The Co-Promotion Agreement shall include but not
be limited to the following provisions:
(a) Recruitment and Training. All DOV Specialty Sales Representatives
shall be recruited by DOV at DOV's sole expense. MERCK will assist
DOV in establishing skill and experience criteria for Specialty
Sales Representatives who are Detailing to Target Prescribers. At
the request of DOV, and at DOV's expense, MERCK will assist in the
recruitment of the Specialty Sales Representatives. DOV Specialty
Sales Representatives will be available for training [***] ([***])
months prior to the Launch Date and will be trained on the Product
by MERCK, subject to the remaining provisions of this paragraph. DOV
will be responsible for expenses including but not limited to
travel, lodging, meals and representative salary and benefits during
the training period. MERCK will be responsible for the costs of
MERCK employees providing the training, the training facility and
training materials. The training will be carried out at a MERCK
training facility and will be equivalent to the training received by
the corresponding MERCK specialty sales force. A component of the
training period includes training on selling skills which MERCK will
provide to DOV Specialty Sales Representatives if DOV agrees.
(b) Launch Meeting: DOV Specialty Sales Representatives will attend the
same launch meeting as the corresponding MERCK specialty sales
force.
(c) Position of Details: MERCK shall determine the Target Prescribers
and territory alignment for the Product. Details to be delivered by
DOV for the Product will be First Position Details for the duration
of the Co-Promotion Agreement unless otherwise agreed to by the
Parties.
(d) Content of Details. The form and content of all information
communicated in all Details or other communications to health care
professionals by DOV for the Product shall be those developed by
MERCK at its sole expense and in use by the corresponding MERCK
sales force. DOV will limit its claims of efficacy and safety for
the Product to those which are consistent with MERCK's approved
labeling for the product and shall provide appropriate balance in
all communications regarding the product. DOV shall Detail the
Product in strict adherence to all applicable legal, regulatory,
professional and policy requirements, including, but not limited to,
all applicable MERCK policies that have been communicated to DOV, as
they exist at the time of the Detail.
(e) Compensation. Commencing on the Launch Date, MERCK shall compensate
DOV, commensurate with MERCK standards, for all costs directly
related to a Specialty Sales Representative including salary and
benefits [***]. MERCK shall compensate DOV for
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100% of the cost of the Specialty Sales Representatives, limited to
those costs described above, if no other product is being Detailed
by the DOV Specialty Sales Representative. If there is a non-MERCK
product, in addition to the Product, also being Detailed by the DOV
Specialty Sales Representatives, then MERCK will compensate DOV for
a proportional share of a DOV Specialty Sales Representative's cost,
based on activity related to the Product. If 100% of a DOV Specialty
Sales Representative's expenses are being paid by MERCK, then MERCK
may at its discretion and at no additional cost, add a second MERCK
product to be Detailed by the DOV Specialty Sales Representative.
(f) Schedule of Payments. Within thirty (30) days of the end of each
Calendar Quarter, DOV shall submit to MERCK an invoice containing a
schedule of Specialty Sales Representative activities and expenses
for review and approval. MERCK shall make the required payments to
DOV within sixty (60) days after the invoice is approved.
(g) Performance Criteria. The Parties shall agree on a minimum number of
total Details to be conducted by DOV each year for Product based on
industry standard performance expectations of a Specialty Sales
Representative (calls and Details per day). Compensation to DOV as
provided above will be subject to adjustment if the minimum level of
such Details is not achieved.
(h) Sampling and Promotional Materials. DOV Specialty Sales
Representatives are required to use only promotional materials
provided to them by MERCK. MERCK shall provide samples and
promotional material to DOV Specialty Sales Representatives in a
manner and quantity consistent with its provision of samples and
promotional material to its own corresponding sales force.
(i) Maintenance and Audit of Records. Under the Co-Promotion Agreement,
DOV will be responsible for the maintenance of accurate records
corresponding to the invoice of the expenses and activities of its
Specialty Sales Representatives engaged in Detailing including,
without limitation, an accurate monthly record of the number of
Details, by position. MERCK shall have the right to review and audit
all such records.
(j) Exclusivity. During the term of any Co-Promotion Agreement, neither
DOV nor any DOV Affiliate shall use any Specialty Sales
Representatives that are used for Detailing the Product to Detail
any other non-MERCK product that is indicated for a similar
Indication as such Product.
(k) Term and Termination. The term of the Co-Promotion Agreement shall
continue until the last to expire Valid Patent Claim in the United
States, or as long as MERCK Details such Product in the United
States, whichever occurs later. The Co-Promotion Agreement shall be
subject to termination:
(i) by MERCK in the event of a DOV Change of Control;
(ii) by MERCK at any time, if evidence that DOV is not meeting
expected minimum Detail levels;
(iii) by DOV at any time with at least[***] ([***]) months prior
written notice;
(iv) by either Party immediately in the event of termination of the
Agreement, or upon twelve months written notice upon
expiration of the Agreement;
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(v) by either Party in the event of an uncured material breach by
the other Party, including, but not limited to, a violation by
DOV in promoting or Detailing the Product of any applicable
law, regulation or procedure applicable to the sale and
promotion of such a Product including any applicable MERCK
policy that was communicated to DOV; or;
(vi) by either Party in the event of other mutually agreed
termination events as set forth in the Co-Promotion Agreement
(breach, bankruptcy, etc.).
Schedule 3.7; Page 3