Research And Option Agreement Dated 11/2/99

EXHIBIT 10.1


***Text Omitted and Filed Separately
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(b)(4),
200.83 and 240.24b-2


RESEARCH AND OPTION AGREEMENT


between


BOEHRINGER INGELHEIM INTERNATIONAL GmbH 55218 Ingelheim GERMANY


(hereinafter referred to as "BII")


and


GENETRONICS, INC. 11199 Sorrento Valley Road San Diego California 92121-1334 USA


(hereinafter referred to as "GENETRONICS")


2


TABLE OF CONTENTS


1. DEFINITIONS...............................................................4


2. CONDUCT OF RESEARCH.......................................................8


3. CONSIDERATION............................................................10


4. RESEARCH OPTION..........................................................11


5. DEVELOPMENT AND LICENSE OPTION...........................................13


6. OPTION FEE...............................................................14


7. WARRANTIES AND LIABILITIES...............................................14


8. CONFIDENTIALITY..........................................................16


9. INVENTIONS...............................................................18


10. PATENTS..................................................................18


11. PUBLICATIONS.............................................................20


12. TERM AND TERMINATION.....................................................21


13. CONCLUDING PROVISIONS....................................................22


APPENDIX 1 RESEARCH PLAN......................................................25


APPENDIX 2 LICENSE TERMS......................................................31


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WITNESSETH:


WHEREAS, BII has expressed an interest in the application of in vivo electroporation for the delivery of DNA in solution, or in particles, into human skin or other tissue; and


WHEREAS, BII has extensive expertise in the field of gene transfer and tumor vaccines and has developed a variety of approaches to tumor vaccination; and


WHEREAS, Genetronics has broad technology and expertise in the field of in vivo electroporation for intradermal and transdermal delivery of genes and drugs and has, over a period of years, expended considerable effort and resources in the development of technology in the area of electroporation and related technologies for drug and gene delivery, and has accumulated extensive experience in such areas; and


WHEREAS, BII and Genetronics have entered into discussions and have agreed upon the content of a research project which will include the use of technologies and methodologies proprietary to either Genetronics or BII; and


WHEREAS, Genetronics is willing to perform the Research Program in collaboration with BII; and


WHEREAS, BII is willing to provide the funding for the Research Program; and


WHEREAS, BII wishes to obtain an option right with respect to a license to develop and commercialize electrically assisted DNA vaccine delivery and Genetronics is willing to grant such option;


NOW, THEREFORE, and in consideration of the foregoing premises and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties agree as follows:


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1. DEFINITIONS


1.1 "Affiliates" shall mean any company or business entity which controls,
is controlled by, or is under common control with either Genetronics or
BII. For this purpose "control" shall mean direct or indirect beneficial
ownership of at least fifty per cent (50%) of the voting share capital
in such company or other business entity.


1.2 "BII Invention" shall mean any patentable and/or non-patentable
invention made solely by one or more BII employees, without inventive
contribution of Genetronics employees, pursuant to the Research Program
or in relation to the development, manufacture, marketing or sale of a
Product-Kit.


1.3 "BII Technology" shall mean (i) all Patent Rights and Know How owned by
or licensed to BII as of the Effective Date that are directly related to
tumor antigens, DNA encoding tumor antigens, tumor vaccines, vaccine
formulations, gene transfer technology and/or tumor vaccination, (ii)
all BII Inventions and BII Research Program Know How that are not within
Genetronics Core Technology, and (iii) all Genetronics Inventions,
Genetronics Research Program Know How, Joint Inventions, and Joint
Research Program Know How that are not within Genetronics Core
Technology and are directly related to tumor antigens, DNA encoding
tumor antigens, tumor vaccines, vaccine formulations, gene transfer
technology, and/or tumor vaccination.


1.4 "BII Patent Rights" shall mean any and all Patent Rights in BII
Technology owned by or licensed to BII.


1.5 "BII Product" shall mean one or more nucleic acids encoding [...***...]
and all other material for inclusion in a Product-Kit with the exception
of any components purchased from Genetronics or a Genetronics Affiliate.


1.6 "Biological Material" shall mean all composition of matter provided to
Genetronics by or on behalf of BII for performance of the Research
Program.


1.7 "Confidential Information of BII" shall mean confidential information
disclosed by BII or an Affiliate of BII to Genetronics or an Affiliate
of Genetronics, including but not limited to BII Technology.


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1.8 "Confidential Information of Genetronics" shall mean confidential
information disclosed by Genetronics or its Affiliates to BII or its
Affiliates, including but not limited to Genetronics CoreTechnology and
Genetronics New Technology.


1.9 "Confidential Information" shall mean Confidential Information of
Genetronics and/or Confidential Information of BII.


1.10 "Effective Date" shall mean the date of execution by the last party to
sign this Agreement.


1.11 "Electrically Assisted Delivery" shall mean the delivery of matter
across biological barriers such as cell membranes or layer(s) of the
skin, facilitated by the effect of electrical fields or currents on such
biological barriers and/or on the matter to be delivered.


1.12 "Equipment" shall mean the equipment defined in Appendix 1.


1.13 "Extended Research Program" shall have the meaning set forth in Clause
4.1.


1.14 "Extended Research Program Plan" shall have the meaning set forth in
Clause 4.4.


1.15 "Field" shall mean the field of cancer DNA vaccines, specifically
defined to be [...***...] nucleic acids that code for tumor antigens,
which may be combined with [...***...] or formulation thereof that
elicits a [...***...] immune response against [...***...] or [...***...]
cancer cells or cancerous tissue when administered to [...***...] or
[...***...], respectively. For the sake of clarity, the Field does not
include HIV DNA vaccines.


1.16 "Genetronics Core Technology" shall mean (i) all Patent Rights and Know
How owned by or licensed to Genetronics as of the Effective Date that
are directly related to the Electrically Assisted Delivery of any
substance into or through organismal cells or tissues, and (ii) all
Genetronics Inventions, BII Inventions, Joint Inventions, and Research
Program Know How that are directly related to the Electrically Assisted
Delivery of any substance into or through organismal cells or tissues.


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1.17 "Genetronics Invention" shall mean any patentable and/or non-patentable
invention made solely by one or more Genetronics employees, without
inventive contribution of BII employees, pursuant to the Research
Program or in relation to the development, manufacture, marketing or
sale of a Product-Kit.


1.18 "Genetronics Patent Rights" shall mean any and all Patent Rights owned
by or licensed to Genetronics in Genetronics Core Technology and
Genetronics New Technology.


1.19 "Genetronics NewTechnology" shall mean all Genetronics Inventions and
Genetronics Research Program Know How that are not within Genetronics
Core Technology or BII Technology.


1.20 "Joint Invention" shall mean any patentable and/or non-patentable
invention made jointly by one or more BII employees together with one or
more Genetronics employees pursuant to the Research Program or in
relation to the development, manufacture, marketing or sale of
Product-Kit .


1.21 "Joint Patent Rights" shall mean Genetronics' and BII's joint Patent
Rights in Joint Technology


1.22 "Joint Technology" shall mean all Joint Inventions and all Joint
Research Program Know How that is not within BII Technology or
Genetronics Core Technology.


1.23 "Know How" shall mean information which is not known to the public
including information comprising or relating to inventions, including
patent applications in preparation, concepts, discoveries, data,
designs, formulae, ideas, experience; information comprising or relating
to material, methods, models, assays, research plans, procedures,
designs for experiments and tests and results of experimentation and
testing including results of research or development together with
processes including manufacturing processes, specifications, techniques,
chemical, pharmacological, toxicological, clinical, analytical and
quality control data, trial data, case report forms, data analyses,
reports or summaries and correspondence no matter whether contained in
written documents, tapes, discs, diskettes, CDROM and any other media on
which Know How can be permanently stored. The fact that an item is known
to the public shall not be taken to exclude the possibility that a
compilation including the item, and/or a development related to the
items, is (or


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remains) not known to the public.


1.24 "License Terms" shall mean the licensing terms referred to in Clause 5
below and attached hereto as Appendix 2.


1.25 "Non-Exclusive License to Genetronics Core Technology" shall mean a
non-exclusive, royalty-bearing license to Genetronics Core Technology in
the Territory necessary to develop, make, use, sell, offer to sell, and
import Product-Kits for use in the Field and as referred to in Appendix
2 hereto attached.


1.26 "Net Sales" shall mean [...***...].


1.27 "Patent Rights " shall mean rights in all Know-How, patent applications
and patents, design patents, improvement patents and models and
certificates of addition and all foreign counterparts of them, including
any provisional applications, divisional applications and patents,
refilings, renewals, continuations, continuations-in-part, patents of
addition, extensions, reissues, substitutions, confirmations,
registrations, revalidation and additions of or to any of them, as well
as any supplementary protection certificates, and equivalent protection
rights in respect of any of them.


1.28 "Product-Kit" shall mean the finished product containing a BII Product
combined with components purchased from Genetronics or Genetronics
Affiliates for the Electrically Assisted Delivery of a BII Product. Each
Specified Product-Kit is a subset of Product-Kit and shall be considered
a Product-Kit for all purposes and definitions of this Agreement, except
as expressly stated otherwise.


1.29 "Research Program Know How" shall mean Know How that is created,
generated or developed by or on behalf of BII ("BII Research Program
Know How"), by or on behalf of Genetronics ("Genetronics Research
Program Know How"), or jointly ("Joint Research Program Know How")
pursuant to the Research Program or in relation to development,
manufacture, marketing or sale of the Product-Kit.


1.30 "Research Program" shall mean the research project entitled: "Delivery
of certain cancer DNA vaccines by in vivo electroporation or related
technologies" as set forth in detail in the Research Plan, which will be
conducted by Genetronics and BII in collaboration in the Field pursuant
to Clauses 2 and 7 of this Agreement. The Extended Research Program is a
subset of Research Program and shall be


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considered a Research Program for all purposes and definitions of this
Agreement, except as expressly stated otherwise.


1.31 "Research Plan" shall mean the project as described in the protocol and
the respective timelines attached hereto as Appendix 1, as amended from
time to time in writing with the mutual written consent of both parties.


1.32 "Territory" shall mean the world.


2. CONDUCT OF RESEARCH


2.1 The Research Program is a program for collaborative research under which
Genetronics shall, among other things, develop electrodes for the in
vivo electroporation of DNA encoding one or more tumor antigens to
elicit an antitumor immune response. Genetronics and BII will carry out
the research activities allocated to them in accordance with the
Research Plan set forth in Appendix 1 of this Agreement. The Research
Program shall begin on the Effective Date and shall terminate 18 months
thereafter, except as it may be extended pursuant to Clause 4 of this
Agreement.


2.2 Genetronics shall be responsible to perform all activities necessary to
conduct its part of the Research Program as described in the Research
Plan in Appendix 1 and within the timelines set forth therein at its own
cost and expense.


2.3 BII will use its experience and the BII Technology to discover, develop,
and/or acquire potential BII Products for use in the Research Program at
its own cost and expense.


2.4 The parties shall meet at least every six (6) months to discuss the
progress of the Research Program. The meetings shall be held at
locations that are agreed upon by the parties, and all expenses
associated with attending the meetings shall be borne by BII.


Each party shall provide the other party with all Know How in its
possession as of the Effective Date and during the term of the Research
Program, which it has the right to disclose, to the extent necessary for
the successful conduct of the Research Program.


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2.5 Genetronics shall furnish BII with interim reports of observations and
results of the different phases of the Research Program every 3rd month
(quarterly) after commencement of the Research Program.


2.5 Genetronics hereby nominates [...***...] as the project manager at
Genetronics, and BII hereby nominates [...***...] as the project manager
at BII, who shall be jointly responsible for coordinating all work to be
conducted under the Research Program.


Genetronics shall use its best reasonable efforts to ensure that there
are no changes in the person of the project manager. If a change,
nevertheless, occurs, Genetronics will promptly submit the name and
qualification of any planned replacement for the project manager,
whereupon BII shall, at its sole discretion, approve or reject any such
replacement within a reasonable time.


The parties shall each nominate a deputy for each of these individuals,
who shall be entitled to represent such individuals in the event of
absence of the same.


2.6 Genetronics shall further provide BII with a complete and detailed draft
final report of observations and results of the Research Program to date
no later than 30 (thirty) days before completion of the Research Program
for BII's review and approval. Upon written request of BII provided no
later than 10 (ten) days after receipt of the draft final report,
Genetronics shall make any reasonable modifications in such draft final
report after receipt of BII's written request, such that a final report
shall be complete and provided to BII no later than 18 months after
beginning the Research Program. If BII does not timely request that
modifications be made to the draft final report, as set forth herein,
then the draft final report provided by Genetronics shall become the
final report.


2.7 Genetronics agrees to provide Equipment to BII promptly after initiation
of the Research Program. BII agrees it shall use the Equipment only
within the Field and only pursuant to the Research Program, and shall
abide by the following terms and conditions:


a. BII shall not analyze, have analyzed, structurally modify, or
have modified the Equipment in any way.


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b. Genetronics shall retain all right, title, and interest in the
Equipment provided to BII under this Agreement.


c. Under no circumstances is the Equipment to be used on humans.


d. BII shall not transfer the Equipment to a third party
non-Affiliate without the prior written permission of
Genetronics. BII shall have the right to transfer the Equipment
to an Affiliate pursuant to the Research Program, provided
however, BII shall inform Genetronics regularly on such
transfers.


The provisions of this Clause 2.7 shall apply accordingly for use
of the Biological Material to be supplied by BII to Genetronics.


2.8 Genetronics hereby grants BII a limited license to use Genetronics Core
Technology and Genetronics New Technology to the extent necessary for
BII to perform the Research Program as set forth in the Research Plan
for the term of this Agreement. BII hereby grants Genetronics a limited
license to use BII Technology to the extent necessary for Genetronics to
perform the Research Program as set forth in the Research Plan for the
term of this Agreement. Each party shall have the right to sublicense
such right to its Affiliate(s) solely for fulfilment of its obligations
under this Agreement. No other license is granted by one party to the
other pursuant to this Agreement.


2.9 Genetronics hereby assigns to BII its rights in any Genetronics
Invention, Research Program Know How, and Joint Invention that is not
within Genetronics Core Technology and that relates to tumor antigens,
DNA encoding tumor antigens, tumor vaccines, vaccine formulations, gene
transfer technology, and/or tumor vaccination. BII hereby assigns to
Genetronics its rights in any BII Invention, Research Program Know How,
and Joint Invention that is directly related to the Electrically
Assisted Delivery of any substance into or through organismal cells or
tissues.


3. CONSIDERATION


3.1 In consideration of the work to be conducted by Genetronics under the
Research Program, BII shall place at the disposal of Genetronics the
total sum of [...***...] which shall be payable according to the
provisions of this Clause 3. Said


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total sum shall be exclusive of value added tax which shall be added
thereon by BII, if applicable.


3.2 The sum referred to in Clause 3.1 above shall become duly payable in
accordance with the following schedule:


(i) [...***...] upon execution of this Agreement;


(ii) [...***...]


(iii) [...***...]


(iv) [...***...]


(v) [...***...]


(vi) [...***...] upon receipt of the final report of the Research
Program.


3.3 BII undertakes to make all payments due hereunder within 30 (thirty)
days of receipt of an invoice by Genetronics, detailing value added tax
separately as needed, to a bank account designated by Genetronics.


3.4 The sum referred to in Clause 3.1 above is inclusive of all costs and
expenses of Genetronics (internal and pass-through costs) incurred in
connection with the Research Program, except as explicitly provided
otherwise in this Agreement. Genetronics shall assign [...***...] to the
Research Program, [...***...] shall be a Ph.D. level scientist and
[...***...] shall be at the level of at least a research technician, and
[...***...] shall be qualified to perform the Research Program as set
forth in Appendix 1.


4. RESEARCH OPTION


4.1 BII has the right to request one 18 (eighteen) month extension of the
Research Program if BII, in its sole discretion, decides that further
basic research should be conducted. Such right shall be exercisable by
notice in writing to Genetronics within 3 (three) months after BII
receives the final report of the Research Program. If BII exercises its
option during such period, this Agreement shall be automatically


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...