Collaboration Agreement

Exhibit 10.12





COLLABORATION AGREEMENT





TULARIK, INC.





KNOLL AG





[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933 as amended.

Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of the Securities Act of 1933, as amended.





COLLABORATION AGREEMENT



This Collaboration Agreement is entered into as of the first day of November, 1998 (the "Effective Date") by and between Tularik Inc., a Delaware corporation ("Tularik"), and Knoll Ag, a corporation organized under the laws of Germany ("Knoll").





Whereas, Tularik has developed proprietary screening assays and other proprietary technology useful in the identification of compounds that directly agonize or antagonize certain targets for the therapeutic treatment of obesity and related diseases in humans; and



Whereas, Knoll and Tularik both possess substantial libraries of natural and synthetic compounds that have potential therapeutic pharmaceutical utility; and



Whereas, Tularik and Knoll desire to establish a cooperative research relationship where the compound libraries of each Party will be screened using the Tularik Assays (as hereinafter defined); and



Whereas, the Parties wish to develop and market novel therapeutic products based on compounds identified during such research; and



Now, Therefore, in consideration of the foregoing and the covenants and promises contained herein, the Parties agree as follows:



ARTICLE 1 Definitions



As used herein, the following terms shall have the following meanings:



1.1 "Additional Target" shall mean a Target that is added to Appendix A pursuant to Section 2.7.2(i) and that it is not a Substitute Target. An "Additional Target" may or may not also be a [ * ].



1.2 "Affiliate" shall mean any company or entity controlled by, controlling or under common control with a Party and shall include without limitation any company fifty percent (50%) or more of whose voting stock or participating profit interest is owned or controlled, directly or indirectly, by a Party, and any company that owns or controls, directly or indirectly, fifty percent (50%) or more of the voting stock of a Party.



1.3 "Agreement" shall mean this Collaboration Agreement.

1.4 "At Risk" shall mean a Body Mass Index greater than or equal to [ * ] but less than [ * ], which may be revised from time to time in accordance with generally accepted international and national scientific practice.



1.5 "Body Mass Index" shall mean weight in kilograms divided by height in meters squared (kg/m2), as such index shall be revised from time to time in accordance with generally accepted international and national scientific practice.



1.6 "Collaboration Program" shall mean the research and development program in the Field conducted pursuant to this Agreement.



1.7 "Collaboration Program Term" shall mean the period during which the Collaboration Program is to be conducted as provided in Section 15.1.



1.8 "Commercialization Notice" shall have the meaning set forth in Section 5.1.



1.9 "Compound Libraries" means the Knoll Compound Library, the Tularik Compound Library and the Research Compound Library.



1.10 "Compound Opportunity" shall have the meaning set forth in Section 2.7.1.



1.11 "Confidential Information" shall mean, subject to the limitations set forth in Section 13.1 hereof, all information relating to the Collaboration Program disclosed by one Party to the other Party pursuant to this Agreement.



1.12 "Contribution Royalty" shall mean a royalty determined in accordance with the procedure set forth in Section 4.4.6.



1.13 "Current Program Target" shall mean one of the Program Targets included on Appendix A at any given point in time. As of the Effective Date, the two Current Program Targets are (1) [ * ] and (2) [ * ]. In the event Additional Targets or Substitute Targets are added to Appendix A pursuant to Section 2.7.2, at the time such targets are added, they shall be deemed to be Current Program Targets.



1.14 "Developing Party" shall have the meaning given in Section 4.3.2 of this Agreement.



1.15 "Development" shall mean the standard, internal program established by a Party for drug development, which shall commence at the sole discretion of that Party, but in no event shall such program be considered to have commenced prior to the start of [ * ].



1.16 "Effective Date" shall have the meaning given in the introductory paragraph of this Agreement.



1.17 "Extra-Field Products" shall mean products based upon or incorporating Research Compounds to be commercialized (i) [ * ]; and (ii) [ * ], as set forth in this Agreement.





[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of this Securities Act of 1933, as amended.





"Extra-Field Products" include Knoll Extra-Field Products, Tularik Extra-Field Products and Third Party Extra-Field Products.



1.18 "FDA" shall mean the United States Food and Drug Administration.



1.19 "Field" shall mean the research, development and commercialization of products that are agonists or antagonists of the Program Targets and are useful in the Indications.



1.20 "FTE" shall mean full-time equivalents.



1.21 "Hit" means a Library Compound that agonizes or antagonizes a Program Target in an HTS performed as part of the Research Program.



1.22 "HTS" means high throughput screening.



1.23 "IND" stands for "Investigational New Drug Application" and shall mean an application for approval by the FDA, or the equivalent non-U.S. regulatory authority, to commence human clinical testing of a drug.



1.24 "Independent Research" shall have the meaning set forth in Section 3.1.2.



1.25 "Indications" means the [ * ] human patients and, in addition, may include the [ * ]. Treatment shall include any [ * ] used in combination with Program Products.



1.26 "Inventing Party" means the Party whose employees, agents or consultants have made an Invention.



1.27 "Invention" means any possibly patentable discovery or invention, whether patentable or not, made during the course of the Collaboration Program and within the scope of the Research Plan. Determination of inventorship shall be made in accordance with the patent laws of the United States of America.



1.28 [ * ]



1.29 [ * ].



1.30 "Knoll Compound Library" means the compound library consisting of Knoll Substances.



1.31 "Knoll Extra-Field Products" shall mean all Extra-Field Products synthesized by Knoll or its Affiliates.



1.32 "Knoll Know-How" shall mean all materials, know-how and information (a) that exists as of the Effective Date, (b) that Knoll owns, controls or to which it has a license (with the right to sublicense), during the Collaboration Program Term and (c) that would be infringed or misappropriated by the conduct of the Research Program or the development, manufacture, use or sale of Program Products. Knoll Know-How shall not include Knoll Patents.





[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of this Securities Act of 1933, as amended.





1.33 "Knoll Patents" shall mean any and all patents (other than Program Patents), both foreign and domestic, that have not been held invalid or unenforceable by a court of competent jurisdiction from which no appeal has been or can be taken, including without limitation all extensions, reissues, renewals, reexaminations, supplementary protection certificates and inventors' certificates, (a) that (i) are issued as of the Effective Date, (ii) subsequently issue from applications (including substitutions, divisionals, continuations and continuations-in-part) pending as of the Effective Date or (iii) issue from any such applications subsequently filed on inventions made as of the Effective Date, (b) that Knoll owns, controls or to which it has a license (with the right to sublicense), during the term of this Agreement and (c) that would be infringed by the conduct of the Research Program or the development, manufacture, use or sale of Program Products.



1.34 "Knoll Substances" shall mean those natural extracts, natural compounds and synthetic compounds that either Knoll or its Affiliates owns or has the right to license or sublicense as of the Effective Date or from time to time during the Collaboration Program Term independently of the Collaboration Program.



1.35 "Knoll Technology" shall mean, collectively, the Knoll Know-How, the Knoll Patents and the Knoll Substances.



1.36 "Knoll Territory" shall mean [ * ].



1.37 "Library Compound" means a compound from a Knoll Compound Library or a Tularik Compound Library.



1.38 "License Agreement" shall mean the license agreement or agreements to be entered into between the Parties substantially in the form attached hereto as Appendix C.



1.39 "NDA" stands for "New Drug Application" and shall mean an application for regulatory approval by the FDA, or an equivalent non-U.S. authority, required for the marketing and sale of a pharmaceutical product in a given jurisdiction.



1.40 "New Target Candidates" shall mean any Target that is not, and has not been, a Program Target. [ * ].



1.41 "New Targets" shall mean Additional Targets and Substitute Targets.



1.42 "Obese" shall mean a Body Mass Index greater than or equal to [ * ], which may be revised from time to time in accordance with generally accepted international and national scientific practice.



1.43 "Overweight" shall mean a Body Mass Index greater than or equal to [ * ] but less than [ * ], which may be revised from time to time in accordance with generally accepted international and national scientific practice.



1.44 "Party" shall mean either Tularik or Knoll.





[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of this Securities Act of 1933, as amended.





1.45 "Patents" shall mean Program Patents and/or Research Compound Patents.



1.46 "Pharmaceutical Market" shall mean [ * ].



1.47 "Prior Interest" means a compound that, at the time of identification as a Validated Hit: [ * ].



1.48 "Program Know-How" shall mean any know-how developed by either Party pursuant to the Collaboration Program during the Collaboration Program Term. Program Know-How shall not include Program Patents.



1.49 "Program Patents" shall mean any and all patents and patent applications, both foreign and domestic, that have not been held invalid or unenforceable by a court of competent jurisdiction in a decision from which no appeal has been or can be taken, including without limitation all extensions, reissues, reexaminations, renewals, supplementary protection certificates and inventors' certificates, which cover inventions or discoveries made by either Party or both Parties pursuant to the Collaboration Program during the Collaboration Program Term. Program Patents shall not include any Research Compound Patents.



1.50 "Program Product" shall have the meaning set forth in Section 5.1.



1.51 "Program Target" shall mean one of the targets included on Appendix A at any time during the Collaboration Program Term.



1.52 "Program Technology" shall mean all Program Patents and Program Know- How.



1.53 "Regulatory Approval" means all approvals (including pricing and reimbursement approvals), product and/or establishment licenses, registrations or authorizations of any regional, federal, state or local regulatory agency, department, bureau or other governmental entity, necessary for the manufacture, use, storage, import, export, transport or sale of Program Products in a regulatory jurisdiction.



1.54 "RC" shall stand for "Research Committee" and shall mean that committee formed pursuant to Section 2.2.1 hereof.



1.55 "Research Compound" means any compound that is based upon any Hit and that is made, created, discovered, identified, invented, synthesized, optimized or acquired by either Party pursuant to the Research Plan, in the course of the Collaboration Program or at the direction of the RC.



1.56 "Research Compound Inventions" shall have the meaning given in Section 4.3.



1.57 "Research Compound Library" means all Research Compounds. The Research Compound Library shall not include any Knoll Substances or Tularik Substances.



1.58 "Research Compound Patents" shall mean any and all patents and patent applications, both foreign and domestic, that have not been held invalid or unenforceable by a





[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of this Securities Act of 1933, as amended.





court of competent jurisdiction in a decision from which no appeal has been or can be taken, including without limitation all extensions, reissues, reexaminations, renewals, supplementary protection certificates and inventors' certificates, which cover Research Compound Inventions made by either Party or both Parties pursuant to the Collaboration Program during the Collaboration Program Term. Research Compound Patents shall not include any patents or patent applications claiming Program Patents.



1.59 "Research Opportunity" shall have the meaning set forth in Section 2.7.1.



1.60 "Research Plan" shall mean a detailed plan for conducting the Collaboration Program directed toward the Field attached hereto as Appendix B, as amended from time to time by the RC in accordance with Section 2.3.



1.61 "Research Program" shall mean the components of the Collaboration Program in the Field occurring prior to the commencement of Development for each Validated Hit or Program Product, as described in the Research Plan.



1.62 "Screening Library" means the Knoll Compound Library or the Tularik Compound Library.



1.63 "SC" shall stand for "Steering Committee" and shall mean that committee formed pursuant to Section 2.2.2 hereof.



1.64 "Section 12.4 Termination" shall have the meaning set forth in Section 15.1.



1.65 "Substitute Targets" shall mean a Target that is substituted for a Current Program Target pursuant to Section 2.7.2(ii). Thereafter, such Substitute Target shall be deemed to be a Current Program Target. A "Substitute Target" may or may not also be a [ * ].



1.66 "Tail Period" shall mean the [ * ] period commencing on the date the Collaboration Program Term expires or is terminated.



1.67 "Targets" shall mean biochemical components of a system determined by Tularik to have potential to be agonized or antagonized by Research Compounds or Library Compounds for use in the Indications.



1.68 "Third Party" shall mean a person or entity other than Tularik, Knoll or an Affiliate of either Tularik or Knoll.



1.69 "Third Party Extra-Field Products" shall mean all Extra-Field Products synthesized by a Third Party.



1.70 [ * ].



1.71 "Tularik Assays" shall mean those biochemical and cell-based assays developed by, or on behalf of, Tularik for the Research Program.





[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of this Securities Act of 1933, as amended.





1.72 "Tularik Compound Library" means the library consisting of Tularik Substances.



1.73 "Tularik Extra-Field Products" shall mean all Extra-Field Products synthesized by Tularik or its Affiliates.



1.74 "Tularik Know-How" shall mean all materials, know-how and information (a) that exists as of the Effective Date, (b) that Tularik owns, controls or to which it has a license (with the right to sublicense), during the Collaboration Program Term and (c) that would be infringed or misappropriated by the conduct of the Research Program or the development, manufacture, use or sale of Program Products. Tularik Know-How shall not include Tularik Patents.



1.75 "Tularik License Agreement" shall mean a license agreement or license agreements entered into between the Parties pursuant to this Agreement and substantially in the form of the License Agreement, with such changes as are necessary to reflect the grant of licenses from Knoll to Tularik and the consideration for such licenses described in this Agreement.



1.76 "Tularik Partner" shall mean one or more of: (i) [ * ]; (ii) any Affiliates of the foregoing; and (iii) any successors of an entity described in clause (i) or (ii).



1.77 "Tularik Patents" shall mean any and all patents (other than Program Patents), both foreign and domestic, that have not been held invalid or unenforceable by a court of competent jurisdiction in a decision from which no appeal has been or can be taken, including without limitation all extensions, reissues, renewals, reexaminations, supplementary protection certificates and inventors' certificates, (a) that (i) are issued as of the Effective Date, (ii) subsequently issue from applications (including substitutions, divisionals, continuations and continuations-in-part) pending as of the Effective Date or (iii) issue from any such applications subsequently filed on inventions made as of the Effective Date, (b) that Tularik owns, controls or to which it has a license (with the right to sublicense) during the term of this Agreement and (c) that would be infringed by the conduct of the Research Program or the development, manufacture, use or sale of Program Products.



1.78 "Tularik Product" shall have the meaning given in Section 5.3.1.



1.79 "Tularik Substances" shall mean those natural extracts, natural compounds and synthetic compounds that Tularik owns or has the right to license or sublicense as of the Effective Date or from time to time during the Collaboration Program Term independently of the Collaboration Program. "Tularik Substances" shall not include compounds that (i) prior to the Effective Date, [ * ]; or (ii) are natural extracts, natural compounds or synthetic compounds [ * ] as of the Effective Date or from time to time during the Collaboration Program Term [ * ].



1.80 "Tularik Technology" shall mean, collectively, the Tularik Assays, the Tularik Know-How, the Tularik Patents and the Tularik Substances.



1.81 "Tularik Territory" shall mean [ * ].





[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of this Securities Act of 1933, as amended.





1.82 [ * ] shall mean a biochemical component of a system that [ * ] that is determined by the RC to have potential to be agonized or antagonized by Research Compounds or Library Compounds for use against the Indications.



1.83 "Validated Hit" means a Library Compound or Research Compound that agonizes or antagonizes a Program Target in confirmatory screening of Hits as part of the Research Program.



ARTICLE 2 Program; Development.



2.1 Research Program. Tularik and Knoll shall conduct the Research Program pursuant to the Research Plan. The goals and progress of the Research Program shall be determined by and monitored under the direction of the RC as set forth in Section 2.2. The Parties shall commence the Research Program upon the Effective Date.



2.2 Research Program Management.



2.2.1 Research Committee ("RC").



(a) Tularik and Knoll will each appoint three (3) representatives to the RC, which shall exist for the Collaboration Program Term and then be dissolved.



(b) Each representative to the RC shall have appropriate technical credentials and knowledge and ongoing familiarity with the Research Program. Tularik's initial representatives to the RC will be [ * ]. Knoll's initial representatives to the RC will be [ * ]. Either Party may change any or all of its appointments to the RC at any time upon giving written notice to the other Party. Each Party will designate one of its RC representatives to serve as the liaison between the Parties and to undertake and coordinate any day-to-day communications as may be required by and between the Parties. Tularik shall designate the chairperson of the RC.



(c) The RC shall meet semi-annually, or more frequently as mutually agreed, such agreement not to be unreasonably withheld or delayed, during the Research Program Term to review the results of the Research Program and to revise the Research Plan, as needed. The RC will report to the SC on the outcome of such meetings.



(d) The RC shall carry out the following responsibilities:



(i) defining, periodically revising and recommending to the SC the yearly objectives of the Research Program;



(ii) co-ordinating activities required to carry out the Collaboration Program;



(iii) monitoring progress of the Collaboration Program;



(iv) delegating responsibility for the filing and prosecution of Program Patents on inventions jointly discovered in the course of the Collaboration Program Term; and





[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of this Securities Act of 1933, as amended.





(v) recommending Validated Hits according to the Research Plan to the SC for Development.



All actions taken and decisions made by the Research Committee shall be by unanimous agreement.



2.2.2 Steering Committee.



(a) Each Party shall appoint two (2) representatives to the SC, which shall exist for the Collaboration Program Term and then be dissolved.



(b) Tularik's initial representatives to the SC will be its [ * ]. Knoll's initial representatives to the SC will be [ * ]. Either Party may change its appointments to the SC at any time upon giving written notice to the other Party. Knoll shall designate the chairman of the SC.



(c) The SC will meet promptly after the Effective Date to establish such procedures and mechanisms as may be necessary for the operation of the SC and the RC to assure the efficient conduct of the Research Program. Thereafter, the SC will meet annually, or as otherwise mutually agreed, such agreement not to be unreasonably withheld or delayed, during the Collaboration Program Term.



(d) The SC shall have the authority to:



(i) recommend that Knoll approve or not approve the annual Research Plan based on recommendations made by the RC;



(ii) recommend Validated Hits for Development by Knoll; and



(iii) resolve disputes within the RC.



(e) Decisions of the SC shall be unanimous; [ * ].



(f) Anything in Section 2.2.2(e) to the contrary notwithstanding, the following decisions require the unanimous vote of the SC:



(i) [ * ];



(ii) [ * ];



(iii) [ * ]; and



(iv) [ * ].



2.2.3. Meetings. The SC and the RC may meet by telephone or in person at such times as are agreeable to the members of each such committee. The location of each SC and RC meeting will be determined alternately by each Party, with each Party bearing the expenses of its representatives attending SC or RC meetings. Tularik will determine the location of the first meeting of each committee. Members of a committee may be represented at any meeting by another member of the committee, or by a deputy, either of whom may cast the absent member's vote. The SC and



[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted and filed separately with the Securities and Exchange Commission pursuant to Rule 406 of this Securities Act of 1933, as amended.





RC shall issue agendas in advance of each meeting. The chairperson shall appoint someone to keep accurate minutes of the meetings, which shall be effective upon approval of the other Party, such approval not to be unreasonably withheld or delayed.



2.3 Research Program Review and Amendment. The RC will periodically review the Research Program, including all screening results and new developments regarding the Field, and propose changes to the Research Plan based upon the results of prior work and new developments in the Field.



2.4 Screening and Development. For the purpose of identifying Validated Hits that are suitable for designation as Program Products for development within the Field, Tularik shall develop and perform the Tularik Assays during the Collaboration Program Term to determine: (i) [ * ] of Library Compounds and Research Compounds; and (ii) [ * ] of such Library Compounds and Research Compounds. In addition, Tularik shall provide to Knoll the Tularik Assays to enable Knoll to perform screening of Knoll Substances during the Collaboration Program Term to identify Validated Hits that are suitable for designation as Program Products for use in the Field.



2.5 Validated Hit Optimization. Both Parties shall undertake, under the direction of the RC, target validation, medicinal chemistry, pharmacological profiling and other preclinical activities with respect to Validated Hits and otherwise as set forth in the Research Plan. Knoll shall perform such further preclinical or other activities as shall enable it to prepare one or more Validated Hits for Development; provided, however, that [ * ] on any Research Compound or Library Compound within the Field shall not be commenced by or on behalf of Knoll until [ * ].



2.6 Exchange of Data. All data and information obtained by either Party pursuant to the Research Program will be provided to the RC. Tularik shall apprise Knoll promptly following the discovery of compounds with [ * ]; provided, ...