Feasibility Evaluation & Development Option Agreement

FEASIBILITY EVALUATION/DEVELOPMENT OPTION AGREEMENT


This FEASIBILITY EVALUATION/DEVELOPMENT OPTION AGREEMENT, ("Agreement") is entered into this 4th day of August, 1995, by and between VAXCEL, INC., having its offices at 3000 Northwoods Parkway, Suite 200, Norcross, GA 30071 ("VAXCEL") and CONNAUGHT LABORATORIES, INC., having its offices at P.O. Box 187, Rt. 611, Swiftwater, PA 18370 ("CLI").


RECITALS


A. VAXCEL and CLI have entered into discussions with respect to the development of human vaccines utilizing antigen and vaccine development technology of CLI and adjuvant technology of VAXCEL, and have signed a Confidential Disclosure Agreement dated December 15, 1994 ("Confidentiality Agreement") in that regard.


B. The parties wish to evaluate the feasibility of enhanced immune responses to CLI's Antigen (as defined in Section 1.2) in VAXCEL's Optivax System (as defined in Section 1.6). Following successful feasibility evaluation, negotiation of definitive license and supply agreement covering the further development, manufacture, and marketing of VAXCEL's Optivax System with CLI's Antigen in a final vaccine formulation will be conducted.


NOW, THEREFORE, VAXCEL and CLI, in consideration of their mutual promises and intending to be legally bound, do hereby agree that the following terms and conditions shall govern the interim relationship between the parties:


1. DEFINITIONS


For purposes of this Agreement, the following terms shall have the respective meanings set forth below:


1 2
1.1 "Affiliate" shall mean a corporation or any other entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the designated party, but only for so long as the relationship exists. "Control" shall mean ownership of shares of stock having at least fifty percent (50%) of the voting power entitled to vote for the election of directors in the case of a corporation, and at least fifty percent (50%) of the interests in profits in the case of a business entity other than a corporation, or, in either case, the maximum allowed by law if less than fifty percent (50%), on a country-by country basis, of the voting power or percentage interest in profits.


1.2 "Antigen" shall mean CLI's recombinant lipidated outer surface protein A (OspA) from Borrelia burgdorferi, the causative agent of Lyme Disease, provided by CLI for the Program.


1.3 "Confidential Information" shall mean (i) in the case of CLI, Technical Information concerning the Antigen as such (or the use or manufacture thereof, except in the Product or with the Optivax System) owned by or licensed to CLI prior to the date hereof or developed by CLI after the date hereof outside the Program, and (ii) in the case of VAXCEL, Technical Information concerning the Copolymer and/or Optivax System (or the use or manufacture thereof exclusive of Antigen or its use in the Product), or otherwise useful to the Program, owned by or licensed to VAXCEL prior to the date hereof or developed by VAXCEL or its licensors after the date hereof outside the Program. By way of illustration, but not limitation, Confidential Information may include patents, patent applications, formulations, know-how, manufacturing processes, inventions, products, processes, methods, techniques, formulas, compositions, compounds, projects, plans, research or clinical data, development plans, customers, suppliers, investors, etc.


1.4 "Copolymer" shall mean the polyoxyethylene/polyoxypropylene copolymer adjuvant designated by VAXCEL as CRL-1005.


1.5 "Development Costs" shall mean the costs of the Program as incurred by CLI and VAXCEL in conducting the Work Plan under this Agreement and determined in accordance with Exhibit B hereof.


2 3
1.6 "Optivax System" shall mean any technology or know-how which utilizes, is based on or arises out of the use of the Copolymer or that uses VAXCEL Technical Information. The term "System" shall include anything incorporated in or used in conjunction with the Product, other than the Antigen, which affects or may affect the stability, pharmacokinetics, pharmacodynamics or absorption of Antigen. For this Agreement, the route of administration is by parenteral injection.


1.7 "Product" shall mean the vaccine in which Antigen is incorporated in or combined with VAXCEL Optivax System under the Program.


1.8 "Program" shall mean the collaboration between VAXCEL and CLI for the feasibility evaluation and interim development of Product as provided in this Agreement, including the work to be conducted by each of the parties as set forth in the work plan attached as Exhibit A ("Work Plan").


1.9 "Program Information" shall mean any Technical Information developed or acquired by either party under or in connection with the Program. Program Information shall include any methods for Product development, formulation or manufacturing developed for, under or as a result of the Program, or using or resulting from any Program Information. Program Information shall not include CLI's or VAXCEL's Confidential Information.


1.10 "Technical Information" shall mean technology and information, know-how, trade secrets, data, including improvements and modifications to any thereof, relating to the Antigen, Copolymer, Optivax System, or Product or otherwise necessary or useful to the Program, which a party hereto has the lawful and contractual right to disclose to the other party. Technical Information shall include, without limitation, processes and analytical methodology used in development, testing, analysis and manufacture, and medical, clinical, toxicological and other scientific data. Notwithstanding the foregoing, Technical Information shall not include patents or trademarks.


3 4 2. PRODUCT DEVELOPMENT PROGRAM


2.1 Upon execution of this Agreement, VAXCEL and CLI shall commence the Program pursuant to the initial Work Plan attached hereto as Exhibit A. CLI shall ensure that any Product feasibility evaluation and/or development shall be performed in accordance with U.S. Food and Drug Administration and cGLP regulations. Within thirty (30) days following completion of pre-clinical studies, CLI shall provide VAXCEL with a written report of the results, and such report and the data shall be deemed Program Information and shall be jointly owned by CLI and VAXCEL in accordance with Section 3.1.


After completion of the feasibility work contemplated by the initial Work Plan, VAXCEL and CLI agree to cooperate in devising mutually agreeable Work Plans and cost estimates for further development of the Product; such Work Plans may include but are not limited to times for mutual reporting of results and times when crucial decisions are to be made. Each party agrees to use its reasonable efforts to review, execute and proceed diligently under the agreed-upon initial Work Plan and any additional or amended agreed-upon Work Plans and to report significant deviations therefrom, in a timely fashion. Each party agrees to revise such Work Plans from time to time so that the Work Plans may remain a good faith estimate of the work to be done and of Development Costs. The parties shall participate in periodic conferences to review the current Work Plan and the status of the Program. These conferences will be held on an "as needed" basis in the spirit of collaboration, but at least every sixty (60) days. Notwithstanding the foregoing, (i) all Work Plans, cost estimates and any major deviations therefrom shall be submitted in writing by the responsible party for the other party's approval and (ii) neither party shall be required to perform any work which would result in Development Costs exceeding approved cost estimates.


2.2 CLI and VAXCEL shall each pay for their respective Development Costs incurred in the performance of the Work Plan(s) under the Program. The approved guidelines for their respective Development Costs for both CLI and VAXCEL are attached hereto as Exhibit B. CLI shall pay Vaxcel a sum of twenty-five thousand dollars ($25,000) upon signing this Agreement. This payment is for exclusive rights to evaluate the Product according to the initial Work Plan and any additional or amended agreed-upon Work Plans.


4 5
In the event preclinical evaluation of the Product is successful, based on CLI's sole judgment, CLI will proceed to file an IND and initiate Phase I clinical trials on a timely basis and will pay VAXCEL a sum of twenty thousand dollars ($20,000), within thirty (30) days of the filing of an IND, for exclusive development rights to Product through Phase I clinical trials.


2.3 Except as specifically authorized by this Agreement, each party shall, for the term of this Agreement and after its expiration or termination for any reason, keep confidential and not disclose to others, and use only for the purposes authorized herein, all of the other party's Confidential Information and Program Information owned by the other party; provided, however, that the foregoing obligations shall not apply to the extent that any such information is:


(i) already known to the other party at the time of
disclosure, as evidenced by such party's written records made prior to
the date of the Confidentiality Agreement; or


(ii) publicly known prior to or after disclosure, other than
through unauthorized acts or omissions of the other party; or


(iii) disclosed in good faith to the other party by a third
party, lawfully and contractually entitled to make such disclosure; or


(iv) the subject of a written consent of the parties which
supplied such information, authorizing disclosure; or


(v) disclosed to a licensee, distributor or agent in
accordance with the Work Plan under a secrecy agreement, provided that
the material provisions of such secrecy agreement as to confidentiality
are the same as those in this Agreement; or


(vi) developed by the recipient independent of information
received, or performed, under this Agreement and evidenced by such
parties written records.


Notwithstanding the foregoing, such information may be (a) disclosed to government agencies and others where such information may be required to be included in patent applications or regulatory filings not prohibited by the terms of this Agreement; or (b) disclosed to the extent required by applicable laws or regulations or as ordered by a court or other regulatory body having competent jurisdiction.


5 6
Notwithstanding anything herein to the contrary, if no further agreement between the parties is reached, Vaxcel may use or disclose to others the information in the evaluation report, though not the report itself, provided: (a) all Confidential Information and Program Information related solely to the Antigen are deleted (except with respect to which vaccines were used in the Program); and (b) CLI is not identified by name as the collaborator.


Further, notwithstanding anything herein to the contrary, it is understood and agreed by the parties that Confidential Information and Program Information may be disclosed to and used by any Affiliate of the parties provided such Affiliate is bound by non-use and non-disclosure obligations consistent with the terms of this Agreement. In each of the foregoing cases, the other party will use its best efforts to limit the disclosure and maintain confidentiality to the extent possible.


Further, notwithstanding anything herein to the contrary, it is understood and agreed by the parties that VAXCEL may make public the existence of this Agreement, contingent upon CLI's prior written approval of any publication or announcement revealing the existence of this Agreement.


2.4 If any party desires to publish the results and/or evaluation of the Program, the publishing party shall provide the non-publishing party a copy of the manuscript of any proposed publication. The non-publishing party shall then have thirty (30) days to review and comment on the manuscript, and the publishing party agrees to delete any information identified by the non-publishing party as its Confidential Information and/or Program Information.


2.5 CLI shall indemnify, defend and hold harmless VAXCEL, its Affiliates, employees, directors and agents from and against any and all claims, liability, loss or expense incurred by any such person which arises out of the Program, unless such liability is due solely to such person's negligence or misconduct. VAXCEL shall indemnify, defend and hold harmless CLI, its Affiliates, employees, directors and agents from and against any and all claims, liability, loss or expense incurred by any such person which arises from VAXCEL's negligence or misconduct in its performance and/or obligations under the Program.


2.6 The Antigen by CLI and the Optivax System by VAXCEL are provided for this Program without warranty of title, noninfringement, merchantability or fitness for a particular use, purpose, or any other warranty, expressed or implied.


6 7 3. OWNERSHIP


3.1 Inventions and Program Information which are conceived, generated or first reduced to practice by either party or both parties under or as a result of the Program shall be jointly owned with undivided interest by the parties ("Joint Inventions"); provided, however, that inventions and Technical Information shall be: (i) the sole property of CLI, and not deemed to be Joint Inventions, if and to the extent related to the Antigen itself (e ...