Research Development And Collaboration Agreement

EXHIBIT 10.5


RESEARCH, DEVELOPMENT AND
COLLABORATION AGREEMENT


WARNER-LAMBERT COMPANY


AND


GENVEC, INC.


JULY 21, 1997


[*]=CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


TABLE OF CONTENTS
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1. DEFINITIONS.......................................................... 2


1.1 "Affiliate"..................................................... 2
1.2 "Agency"........................................................ 2
1.3 "Background Technology"......................................... 2
1.4 "Bulk Product".................................................. 2
1.5 "Collaboration Product"......................................... 2
1.6 "Collaboration Technology"...................................... 2
1.7 "Control"....................................................... 2
1.8 "Co-Promotion Country".......................................... 2
1.9 "Core U.S. Dossier"............................................. 3
1.10 "Cost of Manufacture"........................................... 3
1.11 "Data Package".................................................. 3
1.12 "Derivation".................................................... 3
1.13 "Development"................................................... 3
1.14 "Development Candidate"......................................... 3
1.15 "Development Costs"............................................. 3
1.16 "Development Plan".............................................. 4
1.17 "Drug Development Committee".................................... 4
1.18 "Effective Date"................................................ 4
1.19 "Executive Committee"........................................... 4
1.20 "Field"......................................................... 4
1.21 "Finished Product".............................................. 4
1.22 "GAAP".......................................................... 4
1.23 "Gene Therapy".................................................. 4
1.24 "IND"........................................................... 4
1.25 "Invention(s)".................................................. 4
1.26 "Know-How"...................................................... 4
1.27 "Net Sales"..................................................... 4
1.28 "Party"......................................................... 5
1.29 "Patent Rights"................................................. 5
1.30 "Phase I", "Phase II", and "Phase III".......................... 5
1.31 "Pivotal"....................................................... 6
1.32 "Pre-Clinical Activities"....................................... 6
1.33 "Pre-Clinical Development Criteria"............................. 6
1.34 "Product Configuration"......................................... 6
1.35 "Product License Application" or "PLA".......................... 6
1.36 "Project Team Leader"........................................... 6
1.37 "Regulatory Approval"........................................... 6
1.38 "Research Management Committee"................................. 6
1.39 "Research Plan"................................................. 6
1.40 "Research Program".............................................. 6


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1.41 "Scientific FTE"................................................ 6
1.42 "Scios Agreement"............................................... 6
1.43 "Second Source"................................................. 7
1.44 "Stock Purchase Agreement"...................................... 7
1.45 "Sublicensee"................................................... 7
1.46 "Term of the Agreement"......................................... 7
1.47 "Term of the Research Program".................................. 7
1.48 "Territory"..................................................... 7
1.49 "Third Party"................................................... 7
1.50 "VEGF".......................................................... 7
1.51 "Valid Claim"................................................... 7


2. RESEARCH PROGRAM..................................................... 7


2.1 Collaborative Research.......................................... 7
2.2 Research Program Expenses....................................... 8
2.3 Records; Reports................................................ 10
2.4 Term and Termination of Research Program........................ 11
2.5 Field Restriction............................................... 12
2.6 Gene Therapy Products Outside the Field......................... 14


3. COMMITTEES........................................................... 14


3.1 Executive Committee............................................. 14
3.2 Research Management Committee................................... 15
3.3 Drug Development Committee...................................... 16
3.4 Meetings........................................................ 17
3.5 Dispute Resolution.............................................. 17


4. DEVELOPMENT.......................................................... 17


4.1 Selection of Development Candidates and
Collaboration Products........................................ 17
4.2 Collaborative Development....................................... 18
4.3 Pre-Clinical Activities......................................... 18
4.4 Development Plan................................................ 18
4.5 Funding of Pre-Clinical Activities and Development.............. 19
4.6 Drug Approval Applications...................................... 19
4.7 Compliance...................................................... 19
4.8 Suspension or Termination of Collaborative Development.......... 20


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5. LICENSE GRANTS....................................................... 21


5.1 Grant by GenVec................................................. 21
5.2 Grant by Warner................................................. 22
5.3 Licenses to Affiliates.......................................... 22
5.4 Sublicenses..................................................... 22
5.5 Cross-Licenses.................................................. 22
5.6 Retained Rights................................................. 22
5.7 Covenant Not to Sue............................................. 23
5.8 No Unauthorized Use............................................. 23
5.9 No Implied Licenses............................................. 23


6. CONSIDERATION........................................................ 23


6.1 Technology Access Fee........................................... 23
6.2 Purchase of GenVec Stock........................................ 23
6.3 Research Program and Development Funding........................ 23
6.4 Milestone Payments.............................................. 24
6.5 Royalties....................................................... 25
6.6 Third Party Royalties........................................... 26
6.7 Withholding Taxes............................................... 27
6.8 Guaranty........................................................ 27


7. BOOKS AND RECORDS.................................................... 27


7.1 Royalty Reports and Payments.................................... 27
7.2 Payment Method; Late Payments................................... 28
7.3 Currency Conversion............................................. 28
7.4 Restrictions on Payments........................................ 28
7.5 Records; Inspection............................................. 28


8. COMMERCIALIZATION IN THE TERRITORY................................... 29


8.1 Collaboration Product Development............................... 29
8.2 Due Diligence................................................... 29
8.3 Commercialization Outside the Territory
and Co-Promotion Countries.................................... 31


9. CO-PROMOTION OPTION.................................................. 31


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10. TRADEMARKS........................................................... 32


10.1 Warner Trademarks............................................... 32
10.2 GenVec Trademarks............................................... 32
10.3 Use of Trademarks............................................... 32


11. SUPPLY OF COLLABORATION PRODUCTS..................................... 33


11.1 Manufacture of Bulk Product by GenVec........................... 33
11.2 Manufacture of Finished Product by Warner....................... 33
11.3 Warner's Right to Identify and Qualify Second
Source for Bulk Product....................................... 34
11.4 Use of Second Source for Bulk Product........................... 34
11.5 Terms of Manufacture and Supply................................. 34
11.6 Technology Transfer............................................. 35


12. REGULATORY AFFAIRS................................................... 35


12.1 Side Effects.................................................... 35
12.2 Regulatory and Other Inquiries.................................. 36
12.3 Product Recall.................................................. 36
12.4 Access to Regulatory Filings.................................... 36
12.5 Regulatory Matters.............................................. 36


13. DEVICE DELIVERY...................................................... 37


13.1 Device Plan..................................................... 37
13.2 Device Agreement................................................ 37


14. INTELLECTUAL PROPERTY................................................ 37


14.1 Ownership of Technology......................................... 37
14.2 Solely-Owned Patent Rights...................................... 38
14.3 Jointly Owned Inventions........................................ 38
14.4 Enforcement..................................................... 39
14.5 Allegations of Infringement by Third Parties.................... 40
14.6 Independent Inventions.......................................... 41


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15. OTHER ACTIVITIES..................................................... 41


15.1 Product Configurations.......................................... 41
15.2 No Competing Products........................................... 41
15.3 Independent R&D................................................. 42


16. REPRESENTATIONS AND WARRANTIES....................................... 42


16.1 Legal Authority................................................. 42
16.2 No Conflicts.................................................... 42
16.3 Others Bound.................................................... 42
16.4 Disclaimer...................................................... 42
16.5 Disclaimer of Warranties........................................ 42


17. CONFIDENTIALITY...................................................... 43


17.1 Confidential Information........................................ 43
17.2 Permitted Disclosures........................................... 43
17.3 Publicity....................................................... 44
17.4 Publication..................................................... 44


18. INDEMNIFICATION...................................................... 45


18.1 Warner.......................................................... 45
18.2 GenVec.......................................................... 45
18.3 Procedure....................................................... 45
18.4 Insurance....................................................... 46


19. TERM AND TERMINATION................................................. 46


19.1 Term............................................................ 46
19.2 Termination for Cause........................................... 46
19.3 Effect of Bankruptcy............................................ 46
19.4 Termination Relating to Competing Products...................... 46
19.5 Termination of Research Program................................. 47
19.6 Effect of Termination........................................... 47
19.7 Survival........................................................ 48


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20. DISPUTE RESOLUTION................................................... 48


20.1 Mediation....................................................... 48
20.2 Venue........................................................... 48


21. MISCELLANEOUS........................................................ 49


21.1 Governing Law.................................................. 49
21.2 Waiver......................................................... 49
21.3 Assignment..................................................... 49
21.4 Notices........................................................ 49
21.5 Performance Warranty........................................... 50
21.6 Force Majeure.................................................. 50
21.7 Independent Contractors........................................ 50
21.8 Advice of Counsel.............................................. 50
21.9 Severability................................................... 50
21.10 Patent Marking................................................. 50
21.11 Further Assurances............................................. 51
21.12 Compliance with Laws........................................... 51
21.13 No Implied Licenses or Warranties.............................. 51
21.14 Entire Agreement............................................... 51
21.15 Headings....................................................... 51
21.16 Counterparts................................................... 51


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EXHIBIT 10.5
------------


RESEARCH, DEVELOPMENT AND COLLABORATION AGREEMENT


This RESEARCH, DEVELOPMENT AND COLLABORATION AGREEMENT (the "Agreement"), effective as of July 21, 1997, is made by and between Warner-Lambert Company, a Delaware corporation, with a principal place of business at 201 Tabor Road, Morris Plains, New Jersey 07950 ("Warner"), and GenVec, Inc., a Delaware corporation, with a principal place of business at 12111 Parklawn Drive, Rockville, Maryland 20852 ("GenVec").


BACKGROUND


A. GenVec has expertise in the field of gene therapy and is developing novel, proprietary materials and methods for use in the Field.


B. Warner is in the business of and has expertise in developing, manufacturing and commercializing pharmaceuticals.


C. Warner and GenVec wish to enter into a collaborative effort to share such expertise, to conduct research and development with respect to potential Collaboration Products for use in the Field and, if successful, Warner shall market certain Collaboration Products for use in the Field in the Territory, and the Parties may co-promote certain of such Collaboration Products for use in the Field in the Co-Promotion Countries (the "Collaboration").


D. Warner and GenVec wish to establish a framework for such Collaboration consisting of (i) the Research Program, (ii) the Pre-Clinical Activities, (iii) the Development and (iv) the commercialization, and possible co-promotion of Collaboration Products, each as defined and described further below.


E. Of even date herewith, GenVec and Warner have entered into a Stock Purchase Agreement, pursuant to which GenVec may offer to Warner, and in such event Warner shall purchase shares of GenVec preferred and/or common stock.


F. Warner will enter into a Guaranty pursuant to which Warner will guarantee a line of credit on behalf of GenVec, and in connection therewith GenVec and Warner will enter into a Security Agreement and any other agreements as provided for therein.


NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises, contained herein, GenVec and Warner agree as follows:


1. DEFINITIONS


The following capitalized terms shall have the meanings indicated for purposes of this Agreement:


1.1 "Affiliate" shall mean any corporation, association or other entity
--------- which directly or indirectly controls, is controlled by or is under common control with the party in question. As used in this definition of "Affiliate," the term "control" shall mean direct or indirect beneficial ownership of more than fifty percent (50%) of the voting or income interest in such corporation or other business entity.


1.2 "Agency" shall mean the Food and Drug Administration of the United
------ States or any successor entity (the "FDA"), and agencies of other governments of other countries having similar jurisdiction over the development, manufacturing, and marketing of pharmaceuticals.


1.3 "Background Technology" shall mean all technology that a Party owns or
--------------------- Controls on the Effective Date and has the right to contribute to the Collaboration which is necessary for the design, development, testing, use, manufacture or sale of Product Configurations, Development Candidates and Collaboration Products for use in the Field, including all such United States and foreign patents and patent applications (including, without limitation, all reissues, extensions, substitutions, confirmations, registrations, revalidations, additions, continuations, continuations-in-part, and divisions thereof) and other proprietary information, data and know-how existing on the Effective Date.


1.4 "Bulk Product" shall mean the purified active ingredient of any
------------ Collaboration Product, in bulk form.


1.5 "Collaboration Product" shall mean a Product Configuration in
--------------------- Development pursuant to this Agreement through and including commercial sales.


1.6 "Collaboration Technology" shall mean all Know-How and Patent Rights
------------------------ that a Party owns or Controls, which is conceived, reduced to practice or otherwise developed by GenVec (or its agents) or Warner (or its agents) or jointly by GenVec and Warner (or their respective agents) during the Term of the Research Program and in connection with the Collaboration, including, without limitation, improvements on the Background Technology.


1.7 "Control" shall mean possession of the ability to grant the licenses
------- or sublicenses as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.


1.8 "Co-Promotion Country" shall mean each of the United States of America
-------------------- (including its fifty (50) states, and its territories and possessions, including the District of Columbia, the Commonwealth of Puerto Rico) and Canada.


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1.9 "Core U.S. Dossier" shall have the meaning set forth in Section 4.4.
-----------------


1.10 "Cost of Manufacture" shall mean, with respect to any Bulk Product,
------------------- the fully allocated cost of manufacturing such Collaboration Product (in accordance with Good Manufacturing Practices), as determined in accordance with GAAP, consistently applied, including (i) all direct and indirect costs related to the manufacture of Collaboration Products, including without limitation, costs for labor, materials (including, without limitation, components of Collaboration Products) quality control, regulatory compliance, administrative expenses, subcontractors, fixed and variable manufacturing overhead costs and business unit or division costs reasonably allocable to the manufacture, packaging and labeling of Collaboration Products, excluding costs for excess manufacturing capacity not reasonably related to projected demand for Collaboration Products, or (ii) with respect to Collaboration Products purchased from a Third Party vendor, reasonable amounts actually paid to the vendor for such Collaboration Products.


1.11 "Data Package" shall mean all pre-clinical data and data from any
------------ Phase I and Phase II clinical trials conducted in connection with the Research Program or Development, data relating to reportable adverse events in respect of Collaboration Products and any data included in any IND filing with regard to a Product Configuration (or Collaboration Product) in the Territory.


1.12 "Derivation" shall mean a DNA sequence based on the human VEGF gene
---------- which (i) is a fragment isolated from the human VEGF gene, which fragment encodes a peptide with biological activity substantially functionally equivalent to the native VEGF protein, or (ii) is constructed or chemically synthesized based on information from the human VEGF gene DNA sequence or the human VEGF protein sequence.


1.13 "Development" shall mean the development of any Product Configuration
----------- from and after the filing of an IND, through and including product registration as described in Article 4.


1.14 "Development Candidate" shall mean a Product Configuration which meets
--------------------- the Pre-Clinical Development Criteria, and which the Executive Committee agrees should undergo further development pursuant to Section 4.1.2.


1.15 "Development Costs" shall mean all direct and indirect costs and
----------------- expenses, reasonably charged in any phase of the activities required to obtain Regulatory Approvals in the Territory with respect to any Collaboration Product, when approved and authorized by the Drug Development Committee as a part of the applicable Development Plan for such Collaboration Product. Development Costs shall include, without limitation, costs of: (i) pre-clinical studies conducted pursuant to a Development Plan, (ii) performance of clinical trials including clinical grants, (iii) clinical supplies (active substance, vialing, packing, labeling, delivery to study sites, etc.), (iv) formulation of the Collaboration Product, including stability and validation, (v) phase IV studies, (vi) costs associated with regulatory, medical, product surveillance and statistical services used to support clinical studies and regulatory filings for the Collaboration Product, and (vii) other research and development costs with respect to the Collaboration Product.


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1.16 "Development Plan" shall have the meaning set forth in Section 4.4.
----------------


1.17 "Drug Development Committee" shall have the meaning set forth in
-------------------------- Section 3.3.


1.18 "Effective Date" shall mean the date of this Agreement first written
-------------- above.


1.19 "Executive Committee" shall have the meaning set forth in Section 3.1.
-------------------


1.20 "Field" shall mean the research, drug discovery and development
----- collaboration aimed at therapeutic agents useful for Gene Therapy-based induction of angiogenesis and for the first two years of the Research Program shall include all clinical indications; provided, thereafter the Field shall be limited to the treatment of coronary artery disease ("CAD") and/or peripheral vascular disease ("PVD") and/or those other specific clinical indications selected by Warner pursuant to Section 2.5 below.

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