Collaborative Agreement Among F. Hoffmann-la Roche Ltd, Hoffmann-la Roche Inc. And Genentech, Dated April 13, 2004

EXHIBIT 10.21


COLLABORATIVE


AGREEMENT


AMONG


F. HOFFMANN-LA ROCHE LTD


HOFFMANN-LA ROCHE INC.


AND


GENENTECH, INC.


A G R E E M E N T


This agreement ("Agreement") is effective as of April 13, 2004 is among

F. Hoffmann-La Roche Ltd, Grenzacherstrasse 124, CH 4002 Basel, Switzerland ("Roche Basel");

Hoffmann-La Roche Inc., 340 Kingsland Street, Nutley, New Jersey 07110 ("Roche Nutley", collectively, Roche Basel and Roche Nutley are referred to as "ROCHE");

and

Genentech, Inc., One DNA Way, South San Francisco, California 94080 USA ("GENENTECH")

WHEREAS, GENENTECH, and ROCHE have each established independent pharmaceutical research efforts.

WHEREAS, GENENTECH and ROCHE wish to potentially conduct joint research on molecules in areas of mutual interest, such as oncology, immunology and protein therapeutics, with any specific joint research to be mutually agreed to by them as provided herein;

WHEREAS, GENENTECH and ROCHE believe that sharing certain responsibilities for research, development, and commercialization with respect to select molecules will maximize opportunities to identify and develop such molecules in a more efficient manner than either company might accomplish independently;

WHEREAS, GENENTECH and ROCHE believe that this Agreement may provide an economic benefit to both of them and has the potential to hasten the commercialization of such molecules;

WHEREAS, Roche Holdings Ltd., a corporation organized under the laws of Switzerland, and GENENTECH concluded, effective September 8, 1990, a Mutual Confidentiality Agreement ("Mutual Confidentiality Agreement") covering the ongoing disclosure of all confidential scientific, financial, technical and business information of any nature in any tangible form of expression among GENENTECH on the one hand and Roche Holdings Ltd. and its subsidiaries and affiliates throughout the world, except GENENTECH, on the other hand.

NOW, THEREFORE, ROCHE AND GENENTECH AGREE AS FOLLOWS:


ARTICLE I - DEFINITIONS

Capitalized terms used in this Agreement and the Financial Appendix attached to this Agreement shall have the meanings set forth below:

1.1 "Affiliate" shall mean --

a) an organization greater than fifty percent (>50%) of the voting stock of which is owned and/or controlled directly or indirectly by either Party;

b) an organization which directly or indirectly owns and/or controls greater than fifty percent (>50%) of the voting stock of either Party; or

c) an organization which is directly or indirectly under common control of either Party through common share holdings.

The foregoing notwithstanding, for the purposes of this Agreement, GENENTECH shall not be considered to be an Affiliate of ROCHE and ROCHE shall not be considered to be an Affiliate of GENENTECH.


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1.2 "Agreement" shall mean this Agreement, including all Appendices attached hereto, together with any valid amendments or modifications of the foregoing, and any agreements entered into in connection with this Agreement.

1.3 "Approval Application" or "Registration" shall mean the submission to an appropriate regulatory authority of an appropriate application seeking approval for the sale of a Product in any country.

1.4 "Clinical Requirements" shall mean the quantities of a Drug Candidate or Product which are required by a Party for the conduct of preclinical and clinical studies of that Drug Candidate or Product by that Party. The term Clinical Requirements as used herein with respect to a Party shall also include the Clinical Requirements of that Party's permitted licensees, if any.

1.5 "Commercial Requirements" shall mean the quantities of a Product which are required by a Party for or in connection with that Party's sale of that Product. The term Commercial Requirements as used herein with respect to a Party shall also include the Commercial Requirements of that Party's permitted licensees or distributors if any.

1.6 "Development Costs" shall have the meaning set forth in the Financial Appendix to this Agreement.

1.7 "Drug Candidate" shall mean a Molecule resulting from the joint research efforts of the Parties pursuant to a Joint Research Plan, including all derivatives of that specific molecule as well as its precursors, that has been selected by the JRC and by each Party's internal selection process to enter Phase I Clinical Trials.

1.8 "Effective Date" shall mean the date set forth in the introductory paragraph of this Agreement.

1.9 "Fully Burdened Manufacturing Cost" shall have the meaning set forth in the Financial Appendix to this Agreement.

1.10 "Joint Collaboration" shall mean a specific joint effort agreed to by the Parties that is based on and governed by a specific Joint Research Plan focused on a Target agreed to by the Joint Research Committee in writing and is specifically designed to identify one or more Drug Candidates to that Target and to subsequently develop and commercialize a Product or Products containing or based on such Drug Candidate or Drug Candidates.

1.11 "Joint Development Plan" shall mean a written, comprehensive description of the prospective development efforts of each of the Parties to achieve Approval Application/Registration and subsequent approval for the sale of a Product in the Major Countries with respect to the Product which the Parties have agreed to in writing, and which shall be subsequently appended to this Agreement.

1.12 "Joint Research Plan" shall mean a written, comprehensive description of the previous and prospective research efforts of each of the Parties hereunder with respect to a specific Joint Collaboration for the identification of a Drug Candidate, which the Parties have each agreed to in writing.

1.13 "Know-How" shall mean any and all proprietary technical information, know-how, data, test results, knowledge, techniques, discoveries, inventions, specifications, designs, regulatory filings, and other information (whether or not patentable) which are now or hereafter during the term of this Agreement in the possession or control of a Party and are unique to a Drug Candidate or Product or to the development, manufacture, use or sale of a Drug Candidate or Product or which arise from or as a result of the efforts performed or costs borne by a Party under the Joint Research Plan or Joint Development Plan; provided, however, that Know-How shall not include any of the foregoing (i) which are now or until the identification of a Drug Candidate in the possession or control of a Party as a result of a license taken from a third party and which such Party is not free to transfer or license to the other Party or which such Party may transfer or license but such transfer or license would necessitate the payment of a fee or royalty to the licensor at the time of transfer or license or subsequently (unless provision is made hereunder for the payment of such fee or royalty) or (ii) which are known from publicly available information.

1.14 "Major Country" shall mean the US, Italy, France, United Kingdom, Germany or Japan.


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1.15 "Manufacturing Technology" shall mean all Know-How of a Party necessary to make or have made a Product in the manner that such Product is manufactured by that Party to produce Clinical Requirements and/or Commercial Requirements.

1.16 "Molecule" shall mean a molecule, such as a compound, antibody or peptide, which is selected for further research in a Joint Collaboration.

1.17 "Net Sales" shall have the meaning set forth in the Financial Appendix to this Agreement.

1.18 "Operating Profits and Losses" shall have the meaning set forth in the Financial Appendix to this Agreement.

1.19 "Party" shall mean GENENTECH or ROCHE and, when used in the plural, shall mean both of them.

1.20 "Patents" shall mean any and all patent applications and patents (including inventor's certificates) throughout the world, including any substitutions, extensions, reissues, renewals, divisions, continuations or continuations-in-part thereof or therefor which are now or hereafter during the term of this Agreement owned or controlled by a Party and which, but for the licenses granted herein, would be infringed by the development, manufacture, use or sale of a Drug Candidate or a Product; provided, however, that Patents shall not include any of the foregoing which are now owned or controlled by a Party as a result of a license taken from a third party and which such Party is not free to transfer or license to the other Party or which the Party may transfer or license but such transfer or license would necessitate the payment of a fee or royalty at the time of transfer or license or subsequently (unless provision is made hereunder for the payment of such fee or royalty) to the licensor.

1.21 "Phase I Clinical Trial" shall mean a controlled study in humans of the safety of a Product for a specific indication or indications in healthy volunteers or patients having the disease or condition for which the Product is being studied.

1.22 "Phase II Clinical Trial" shall mean a controlled study in humans of both the safety and efficacy of a Product for a specific indication or indications in patients having the disease or condition for which the Product is being studied.

1.23 "Phase III Clinical Trial" shall mean a controlled study in humans of the efficacy and safety of a Product which is prospectively designed to demonstrate statistically whether the Product is effective for use in a particular indication in a manner sufficient to obtain regulatory approval to market that Product in one or more particular countries and, where a Joint Development Committee exists for a Product, a study which a Joint Development Committee designates as a Phase III Clinical Trial.

1.24 "Product" shall mean any pharmaceutical formulation containing a Drug Candidate. The term Product shall include: (a) all bulk forms of the active ingredient of the Product ("Bulk Product"); (b) all forms of the Product which are finished but not packaged ("Finished Product"); or (c) finished, packaged final dosage units of Product ("Final Product").

1.25 "Responsible Party" shall mean that Party, pursuant to Section 7.1, which is responsible for the development of a manufacturing process and facilities for a Drug Candidate and Product for a particular Joint Collaboration.

1.26 "ROW" shall mean all countries of the world except the US.

1.27 "Target" shall mean a molecule or variants of that molecule to which a Drug Candidate or Product, as its primary mechanism of action, physically binds to or interacts with.

1.28 "Territory" shall mean the US and ROW.

1.29 "US" shall mean the United States of America, its territories and possessions.


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Other capitalized terms that are used in this Agreement and not defined above are defined in the Financial Appendix to this Agreement or as follows:

Claims

Section 12.2

Decision Point

Section 3.9

Genentech Opt-in Option 1

Section 4.3c(b)

Genentech Opt-in Option 2

Section 4.3c(c)

Information

Section 10.1

JCC

Section 5.7

JDC

Section 4.4a

JFC

Section 6.1

JRC

Section 3.1

Lead Party

Section 5.1

Licensee

Section 8.1

Licensor

Section 8.1

Management Committee

Section 2.1

Non-terminating Party

Section 13.3

Opt-out Option

Section 4.3a(a)

Principal Party

Section 11.2

Roche Opt-in Option 1

Section 4.3b(b)

Roche Opt-in Option 2

Section 4.3b(c)

Terminating Party

Section 13.3

ARTICLE II - MANAGEMENT OF THE COLLABORATION

2.1

Management Committee. Within sixty (60) days after the Effective Date, the Parties shall form a management committee comprised of three (3) representatives from ROCHE, including initially its Head of Global Research, and three (3) representatives from GENENTECH, including initially its Head of Research ("Management Committee"). The Management Committee shall meet at least once per year to review the research, development and commercialization status of Molecules, Drug Candidates, and Products. The Management Committee shall be responsible for reviewing and approving the worldwide budget (including but not limited to worldwide inventory levels) submitted by the joint research committee ("JRC"), joint development committee ("JDC") and/or joint commercialization committee ("JCC") (as applicable). The Management Committee shall have the authority to create other committees as needed and oversee the activities of all other committees. Each Party shall be free to change any or all of its representation effective immediately upon written notice to the other Party. All decisions of the Management Committee shall require consensus of the representatives of the Committee to be effective, provided, however, that in cases where such consensus cannot be reached, the matter will be referred to a senior officer at ROCHE and a senior officer at GENENTECH for decision.

2.2

Other Committees. Initially, the Parties shall form a JRC as set forth in Section 3.1 below and a joint finance committee ("JFC") as set forth in Section 6.1 below. Thereafter, as the need arises, the Management Committee may form a JDC as set forth in Section 4.4a below and a JCC as set forth in Section 5.7 below.

2.3

Review of Status. From time to time, the Parties shall review the committee structure and composition set forth in this Agreement with a view towards simplifying the committee system where feasible.


ARTICLE III - RESEARCH AND DEVELOPMENT UP TO PHASE I

3.1 Creation of Joint Research Committee. The Parties shall form a JRC consisting of three (3) representatives of each Party. Each Party shall notify the other Party within thirty (30) days after the Effective Date of its initial appointees to the JRC. Each Party shall be free to change any or all of its representatives effective immediately


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upon written notice to the other Party. Upon three (3) months prior written notice to the other Party, either Party can terminate the Joint Research Committee and any prospective duties of the Joint Research Committee. Such termination shall not terminate any Joint Research Plan then in effect.

3.2 Meetings. The JRC shall meet periodically as the Parties may agree. In addition, if the JRC has not met for a period of more than six (6) months, then either Party may call a meeting of the JRC on thirty (30) days' prior written notice to the other Party. The sites of the meetings shall alternate between the principal research sites of the Parties unless otherwise agreed. The Party hosting the meeting shall designate the chairperson for that meeting, and the Party visiting the other shall designate the secretary for that meeting. By mutual agreement of the Parties, the JRC may meet by video-conference or use other means of conducting joint meetings.

3.3 Decision-making. All decisions and recommendations of the JRC shall require consensus of the representatives of the Committee to be effective. If consensus cannot be reached, GENENTECH shall have the final decision-making authority with respect to whether or not to conduct research efforts to be performed by GENENTECH, and ROCHE shall have the final decision-making authority with respect to whether or not to conduct research efforts to be performed by ROCHE.

3.4 Duties of the JRC. The Parties will disclose, to the extent each so unilaterally determines, to each other in confidence through the JRC their research efforts in oncology, immunology and protein therapeutics for the purpose of identifying projects for potential collaboration. The JRC shall direct all research efforts pursuant to this Agreement where the Parties have agreed to a Joint Collaboration. The JRC shall establish a Joint Research Plan for each Joint Collaboration. It shall be responsible for making any other decisions it is required to make pursuant to this Agreement and making recommendations to the Parties regarding other decisions necessary or appropriate to implement research efforts under a Joint Research Plan.

3.5 Joint Research Plan. The purpose of a Joint Research Plan is to identify and select a Drug Candidate for pre-clinical and clinical development. A Joint Research Plan should attempt to avoid unnecessary duplication by the Parties, maximize utilization of the resources of the Parties, and appropriately allocate responsibilities and contributions of the Parties. The Parties shall share equally the total costs incurred in implementing the responsibilities and obligations under a Joint Research Plan provided that such costs have been mutually agreed to in advance. The JRC and JFC shall jointly prepare the budget for the Joint Research Plan. Consistent with the above principles, a Joint Research Plan should include --

(a) identification of the prior efforts of the Parties related to the subject of the particular Joint Collaboration;

(b) identification of specific tasks for each of the Parties;

(c) identification of resource requirements of the Joint Research Plan and allocation of those resources between the Parties; and

(d) timelines for each stage of the process of identifying a Drug Candidate.

From time to time, the JRC may agree to update and amend a Joint Research Plan by changing its scope or the responsibilities of the Parties and in such case such amendment shall be effective only if committed to writing and signed by both Parties.

3.6 Exclusivity. If a Target is selected for research by the JRC, then during the term of the Joint Research Plan neither Party shall conduct research activities utilizing such Target other than those activities set forth in the Joint Research Plan. If a Party terminates its research efforts under a Joint Research Plan pursuant to Section 3.8, then that Party shall not conduct research on that Target for two (2) years after such termination. Notwithstanding the foregoing, if a Party terminates its research efforts under a Joint Research Plan pursuant to Section 3.8, the previous sentence shall not restrict either Party from licensing from a third party any molecule falling within the limitations set forth therein, provided that such molecule is the subject of human clinical trials at the time of licensing.


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3.7 Outside Collaborations. If a Party wants to enter into an agreement with a third party concerning a Molecule, a Drug Candidate or a Product, then such Party shall consult with the other Party to see if the other Party has any reasonable objection to the agreement. If the other Party has a reasonable objection to the agreement, no such agreement shall be concluded until the objections are resolved. Neither Party, without consulting with and obtaining the written consent of the other Party, shall enter into an agreement with a third party concerning a Molecule, a Drug Candidate or a Product which results in any additional royalty required to be paid by the other Party with respect to such Molecule, Drug Candidate or Product or which creates a material encumbrance on the rights of the other Party which are granted in this Agreement with respect to such Molecule, Drug Candidate or a Product. Nothing herein shall be construed to prevent a Party from providing to any third party in any manner it chooses, any materials or reagents that result from its own efforts and were not received from the other Party.

3.8 Termination of Research Efforts.

(a) If one Party wishes to cease research efforts with respect to a Target, then it may do so. Such Party shall either (i) share equally all of the mutually agreed to costs in implementing the responsibilities and obligations of the Joint Research Plan for such Target, in which case the Joint Research Plan shall remain in effect, and retain a right to receive a royalty of one percent (1%) of worldwide Net Sales of products derived from Molecules identified under such Joint Research Plan or (ii) discontinue sharing costs in implementing the responsibilities and obligations under the Joint Research Plan for such Target, in which case the Joint Research Plan shall no longer remain in effect, and forfeit rights to receive remuneration under this Agreement.

(b) If a Party elects to proceed under Section 3.8(a)(i) above, then the research efforts that would have been performed by the Party that ceases to perform such research efforts may be performed by the Party actively fulfilling its obligations under the Joint Research Plan or by another party at the active Party's direction, provided that the total costs for the Joint Research Plan shall remain the same as mutually agreed to as set forth in Sections 3.5 and 2.1. In addition, the active Party shall have the sole right, but not the obligation, to conduct, either itself or together with any third party, the development and commercialization of the Molecules that were identified under such Joint Research Plan (and products derived therefrom) in all Territories and shall bear all prospective costs and expenses and all profits and losses associated with such development and commercialization, subject to payment of the royalty set forth in Section 3.8(a)(i) above. The obligation to pay such royalties (on a product-by-product and country-by-country basis) shall terminate fifteen (15) years after the first commercial sale of such product in such country.

(c) If a Party elects to proceed under Section 3.8(a)(ii) above, then the other Party shall have the sole right, but not the obligation, to conduct, either itself or together with any third party, the research, development and commercialization of the Molecules that were identified under such Joint Research Plan (and products derived therefrom) in all Territories and shall bear all prospective costs and expenses and all profits and losses associated with such research, development and commercialization.

(d) For clarity, if a Party elects to cease research efforts with respect to a Target under this Section 3.8, the following provisions shall not apply to such Target and Molecules identified under such Joint Research Plan: Sections 3.9, 6.1 through 6.5 and Articles IV, V, VII and IX.

3.9 Decision Point. Prior to the dosing of the first patient in a Phase I Clinical Trial, the Parties shall meet to discuss in good faith whether a Molecule should be designated a Drug Candidate and how such Drug Candidate shall be developed ("Decision Point"). The Parties agree that unless determined otherwise, each Drug Candidate shall be subject to Joint Development where both Genentech and Roche share equally in the development efforts and Development Costs. In lieu of Joint Development, the Parties may agree to: (1) Genentech Development, where GENENTECH is fully responsible for all development efforts and Development Costs, subject to ROCHE opt-in; or (2) Roche Development, where ROCHE is fully responsible for all development efforts and Development Costs, subject to GENENTECH opt-in.


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ARTICLE IVA - JOINT DEVELOPMENT

4.1a Decision for Joint Development. If the Parties agree to jointly develop a Drug Candidate, then the provisions of this Article IVA shall apply.

4.2a Joint Development. Subject to Article 4.3a below, the Parties will undertake using commercially reasonable efforts to develop a Drug Candidate, including performing preclinical and clinical research necessary to seek appropriate regulatory marketing approval or registration of a Product based on the Drug Candidate. The Parties shall share equally in the worldwide Development Costs, including the development of a manufacturing process for the Drug Candidate.

4.3a Opt-out Option.

(a) At any time until the approval of the first Approval Application/ Registration in a Major Country, each Party shall have the option ("Opt-out Option") to decline to participate in future development and commercialization efforts and Operating Profit and Loss sharing for a particular Drug Candidate. To exercise its Opt-out Option, the exercising Party must provide written notice of such to the other Party at least six (6) months in advance of such exercise if a Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical Trial is then underway or otherwise provide written notice of such to the other Party at least one (1) month in advance of such exercise. The Opt-out Party shall be responsible for its portion of Development Costs through the end of the month in which the Opt-out Option becomes effective. If one Party exercises its Opt-out Option, then the other Party shall have the sole right, but not the obligation, to conduct, either itself or together with any third party, the development and commercialization of the Drug Candidate and all Products resulting therefrom in the entire Territory and shall bear all prospective costs and expenses and all profits and losses associated with such development and commercialization except that with respect to any development effort such as a clinical study which has been agreed to by the JDC prior to the exercise of a Party's Opt-out Option and for which a binding contractual commitment has been entered into with a third Party, the Parties shall share such costs in accordance with Section 4.2a above. Upon a Party's exercise of its Opt-out Option with respect to a Drug Candidate, the Joint Development Plan for that Drug Candidate shall cease to be in effect.

(b) If both Parties exercise their respective Opt-out Option for a particular Drug Candidate and neither Party desires to pursue the development or commercialization of such Drug Candidate and Products resulting therefrom, then the Parties shall cooperate in seeking one or more suitable third parties to develop and commercialize such Drug Candidate and Products on terms and conditions mutually agreeable to both Parties and under which both Parties share the economic benefits of such an arrangement in the same proportion as they contributed to the worldwide Development Costs. Thus, if both Parties simultaneously exercise their Opt-out Option for a particular Drug Candidate, then the Parties would share equally the economic benefits derived from such an arrangement.

(c) If a Party exercises its Opt-out Option for a particular Drug Candidate and the other Party does not exercise its Opt-out Option for that particular Drug Candidate, then the Party exercising its Opt-out Option shall not develop or have developed (i) the Drug Candidate during the period that such Drug Candidate is actively being developed or commercialized by the other Party, (ii) any Molecule that was the subject of such Joint Collaboration during the period that such Drug Candidate is actively being developed or commercialized by the other Party, (iii) any molecule that is derived from a Molecule of such Joint Collaboration during the period that such Drug Candidate is actively being developed or commercialized by the other Party, or (iv) any molecule whose primary mechanism of action is directed at the Target that was the subject of the Joint Collaboration for a period of one (1) year following the exercise of that Opt-out Option. Notwithstanding the above, if a Party exercises its Opt-out Option for a particular Drug Candidate, then either Party may license from a third party any molecule with the characteristics set forth in clause (iv) above (and develop such molecule), provided that such molecule is the subject of human clinical trials at the time of licensing. For clarity, the restrictions under this Section 4.3a(c) shall terminate upon termination of the Agreement in its entirety.

4.4a Creation of Joint Development Committee. Upon agreement to jointly develop Drug Candidate, unless either Party exercises its Opt-out Option, the Management Committee shall create a JDC for that Joint Collaboration which


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shall consist of three (3) representatives of each Party. Each Party promptly shall notify the other Party of its initial appointees to that JDC. Each Party shall be free to change any or all of its representatives effective upon written notice to the other Party.

4.5a Meetings. The JDC shall meet regularly as it shall determine, but at least three (3) times per year, to discuss development of the Drug Candidate. The sites of the meetings shall alternate between the principal offices of the Parti ...