CONFIDENTIAL
EXHIBIT 10.24
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
DEVELOPMENT, LICENSE AND COMMERCIALIZATION AGREEMENT
BY AND AMONG
IDENIX PHARMACEUTICALS, INC.,
IDENIX (CAYMAN) LIMITED
AND
NOVARTIS PHARMA AG
MAY 8, 2003
TABLE OF CONTENTS
Page
---- ARTICLE 1. DEFINITIONS..................................................................................... 1
ARTICLE 2. MANAGEMENT OF COLLABORATION..................................................................... 28
2.1 General.................................................................................. 28
2.2 Alliance Management Representatives...................................................... 28
2.3 Committees............................................................................... 29
ARTICLE 3. DESIGNATION OF PRODUCTS......................................................................... 37
3.1 HBV Products............................................................................. 37
3.2 HCV Option............................................................................... 37
3.3 ODC Options.............................................................................. 38
3.4 Rejected Compounds....................................................................... 41
ARTICLE 4. DEVELOPMENT OF PRODUCTS......................................................................... 42
4.1 Idenix Development Activities............................................................ 42
4.2 Development Plan......................................................................... 42
4.3 Development Budget....................................................................... 43
4.4 Development Responsibilities............................................................. 44
4.5 Interferon............................................................................... 44
4.6 Global Harmonized Clinical Trials........................................................ 44
4.7 Regulatory Filings and Approvals......................................................... 44
4.8 Manufacturing Capability Development..................................................... 48
ARTICLE 5. PRODUCT COMMERCIALIZATION....................................................................... 48
5.1 Supply of Product........................................................................ 48
5.2 Commercialization of Products in Co-Marketing Countries.................................. 48
5.3 Commercialization of Products in Co-Commercialization Countries.......................... 49
5.4 Co-Commercialization Plans............................................................... 49
5.5 Distribution and Sale of Product......................................................... 50
5.6 Field Forces............................................................................. 50
5.7 Detailing................................................................................ 52
5.8 Training................................................................................. 54
5.9 Promotional Materials.................................................................... 55
5.10 Promotional Claims/Compliance............................................................ 56
5.11 Reporting of Net Sales and Expenses...................................................... 56
5.12 Country Co-Promotion Reports............................................................. 56
5.13 Co-Promotion Payments.................................................................... 56
5.14 Medical and Consumer Inquiries........................................................... 58
5.15 Commercially Reasonable Efforts in the Novartis Territory................................ 58
5.16 Customer Referrals....................................................................... 58
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5.17 Compliance with Laws..................................................................... 58
5.18 Pirate Goods............................................................................. 58
5.19 Phase IV Clinical Trials................................................................. 59
5.20 Market Exclusivity Extensions............................................................ 59
ARTICLE 6. LICENSE GRANTS.................................................................................. 59
6.1 Idenix Grants............................................................................ 59
6.2 Novartis Grants.......................................................................... 63
6.3 Additional License Provisions............................................................ 66
ARTICLE 7. EXCLUSIVITY..................................................................................... 67
7.1 Competing Products....................................................................... 67
7.2 Limitation of Restrictions............................................................... 67
ARTICLE 8. FINANCIAL PROVISIONS............................................................................ 68
8.1 License Payment.......................................................................... 68
8.2 Operating Funds.......................................................................... 68
8.3 Development Expenses..................................................................... 69
8.4 Registration Expenses.................................................................... 71
8.5 Approval Milestones...................................................................... 72
8.6 Sales Milestones......................................................................... 74
8.7 Payments for Third Party Intellectual Property........................................... 75
8.8 Milestones for Other Products............................................................ 76
8.9 Sumitomo Payments........................................................................ 77
8.10 Audits................................................................................... 77
8.11 Tax Matters.............................................................................. 77
8.12 United States Dollars.................................................................... 78
8.13 Currency Exchange........................................................................ 78
8.14 Certain Payment Procedures............................................................... 78
8.15 Late Payments............................................................................ 78
ARTICLE 9. CONFIDENTIAL INFORMATION........................................................................ 78
9.1 Confidential Information................................................................. 78
9.2 Employee and Advisor Obligations......................................................... 79
9.3 Term..................................................................................... 79
9.4 Publications............................................................................. 79
9.5 Publicity................................................................................ 80
ARTICLE 10. INTELLECTUAL PROPERTY OWNERSHIP, PROTECTION AND RELATED MATTERS................................ 80
10.1 Ownership of Inventions.................................................................. 80
10.2 Prosecution and Maintenance of Patent Rights............................................. 81
10.3 Third Party Infringement................................................................. 82
10.4 Claimed Infringement..................................................................... 83
10.5 Patent Invalidity Claim.................................................................. 84
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10.6 Patent Marking........................................................................... 84
10.7 Third Party Licenses..................................................................... 84
10.8 Trademarks............................................................................... 84
ARTICLE 11. REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANT; INDEMNIFICATION........................... 86
11.1 Representations and Warranties of Idenix................................................. 86
11.2 Representations and Warranties of Novartis............................................... 96
11.3 Additional Covenants..................................................................... 97
11.4 Disclaimer of Warranty................................................................... 98
11.5 Indemnification.......................................................................... 98
ARTICLE 12. TERM AND TERMINATION........................................................................... 101
12.1 Term..................................................................................... 101
12.2 Extension of Country Terms............................................................... 101
12.3 Termination For Material Breach.......................................................... 101
12.4 Termination by Novartis.................................................................. 101
12.5 Termination for Insolvency............................................................... 101
12.6 Effect of Termination.................................................................... 102
12.7 Survival................................................................................. 104
12.8 Non-Exclusive Remedy..................................................................... 104
ARTICLE 13. MISCELLANEOUS.................................................................................. 105
13.1 Choice of Law............................................................................ 105
13.2 Notices.................................................................................. 105
13.3 Severability............................................................................. 106
13.4 Captions................................................................................. 106
13.5 Integration.............................................................................. 106
13.6 Dispute Resolution....................................................................... 106
13.7 Independent Contractors; No Agency....................................................... 108
13.8 Assignment; Successors................................................................... 108
13.9 Execution in Counterparts; Facsimile Signatures.......................................... 108
13.10 Waivers.................................................................................. 108
13.11 No Consequential or Punitive Damages..................................................... 108
13.12 Bankruptcy............................................................................... 109
Exhibit A LdC Description Exhibit B LdT Description Exhibit C Idenix Patent Rights Exhibit D Supply Agreement Exhibit E Principles and Methods for Calculation of Net Present Value Exhibit F Financial Considerations for Other Products Exhibit G Procedures for Adverse Event and Other Safety Data Exchange
Notification and Reporting
Appendix 1 to Exhibit G
Appendix 2 to Exhibit G
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Exhibit H Development Plans and Development Budgets Exhibit I Promotion Expenses Exhibit J Third Party Intellectual Property Exhibit K Co-Marketing of Products Exhibit L Example of Benefit Allocation Adjustment Exhibit M Regulatory Tasks in U.S. Territory Exhibit N Example of Adjustment for Failure to Perform PDEs Exhibit O Commercialization and Marketing Guidelines Exhibit P Example of Idenix NPV Proportionate Development Expense Share Exhibit Q Examples of Backup HCV Development Expenses Exhibit R Sumitomo Settlement Agreement
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DEVELOPMENT, LICENSE AND COMMERCIALIZATION AGREEMENT
This Agreement is made and effective as of the 8th day of May, 2003 (the "Effective Date") by and among Idenix Pharmaceuticals, Inc., with offices at 125 CambridgePark Drive, Cambridge,
Massachusetts 02140, USA ("Idenix U.S."), Idenix (Cayman) Limited, with offices at c/o Walkers SPV Limited, Walker House, Mary Street, George Town, Grand Cayman, Cayman Islands ("Idenix Cayman" and, together with Idenix U.S., "Idenix"), and Novartis Pharma AG, with offices at Lichstrasse 35, 4056 Basel, Switzerland ("Novartis").
INTRODUCTION
1. Idenix controls or, during the Term (as defined below), may control certain rights in the HBV Drug Candidates (as defined below), HCV Drug Candidates (as defined below), Other Drug Candidates (as defined below) and certain patents, intellectual property and know-how related thereto;
2. Novartis has considerable knowledge and experience in developing and commercializing pharmaceutical products throughout the world and has in place large, well-experienced regulatory and marketing forces; and
3. On and subject to the terms and conditions set forth herein, Idenix and Novartis desire to develop and commercialize the Products (as defined below) in the territories designated below.
NOW, THEREFORE, for and in consideration of the mutual covenants contained herein, Idenix and Novartis hereby agree as follows:
ARTICLE 1.
DEFINITIONS
Unless specifically set forth to the contrary in this Agreement, the following terms, when capitalized, whether used in the singular or plural, shall have the respective meanings set forth below:
"1974 Convention". 1974 Convention shall have the meaning assigned to it in Section 13.1.
"AAA". AAA shall have the meaning assigned to it in Section 13.6(b)(i).
"Abandoning Party". Abandoning Party shall have the meaning assigned to it in Section 10.2(b).
"Adjusted Earnings". Adjusted Earnings shall have the meaning assigned to it in Section 8.8(c).
"Adverse Reaction Reports". Adverse Reaction Reports shall have the meaning assigned to it in Section 4.7(i)(ii).
"Affiliate". Affiliate shall mean any corporation, company, partnership, joint venture and/or firm that controls, is controlled by, or is under common control with a Party. For purposes of this definition of "Affiliate", "control" shall mean (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the election of directors, and (b) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities. The Parties acknowledge that in the case of certain entities organized under the laws of certain countries outside the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty percent (50%), and that in such case such lower percentage shall be substituted in the preceding sentence; provided that such foreign investor has the power to direct the management and policies of such entity. Notwithstanding the foregoing, neither Party shall be considered an Affiliate of the other for purposes of this Agreement.
"Alliance Manager". Alliance Manager shall have the meaning assigned to it in Section 2.2.
"Alternative License Terms". Alternative License Terms shall have the meaning assigned to it in Section 3.3(c)(i).
"Alternative MR Terms". Alternative MR Terms shall have the meaning assigned to it in Section 3.3(b)(ii).
"Amended and Restated By-laws". Amended and Restated By-laws shall have the meaning assigned to it in the Stock Purchase Agreement.
"Ancillary Agreements". Ancillary Agreements shall have the meaning ascribed to it in the Stock Purchase Agreement.
"Annual Net Sales". Annual Net Sales shall mean, with respect to a Product, Net Sales of such Product during any Contract Year; provided, however, that, for purposes of determining whether the milestone events relating to the Sales Milestone Payments have occurred, only fifty percent (50%) of the applicable Net Sales of such Product in any country in the Co-Commercialization Countries shall be included in Annual Net Sales.
"API". API shall mean active pharmaceutical ingredient manufactured in bulk form.
"Applicable Law". Applicable Law shall have the meaning assigned to it in the Stock Purchase Agreement.
"Approval Milestone Payments". Approval Milestone Payments shall have the meaning assigned to it in Section 8.5(a).
"Approval Milestone Percentage". Approval Milestone Percentage shall have the meaning assigned to it in Section 8.8(c).
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"Audit Meeting". Audit Meeting shall have the meaning assigned to it in Section 11.3(a).
"Audit Report". Audit Report shall have the meaning assigned to it in Section 11.3(a).
"Backup HCV Development Expenses". Backup HCV Development Expenses shall have the meaning assigned to it in Section 8.3(b)(ii).
"Backup HCV Drug Candidate". Backup HCV Drug Candidate shall have the meaning assigned to it in Section 8.3(b)(ii).
"Backup HCV Drug Candidate Notice". Backup HCV Drug Candidate Notice shall have the meaning assigned to it in Section 8.3(b)(ii).
"Benefit Allocation". Benefit Allocation shall have the meaning assigned to it in Section 5.13(a).
"Blocking Third Party Intellectual Property Rights". Blocking Third Party Intellectual Property Rights shall mean, with respect to any country in the Territory, on a country-by-country basis, Patent Rights in such country owned or controlled by a Third Party which, in the absence of a license granted by such Third Party, would, in the reasonable judgment of Novartis (as supported by the written opinion of reputable independent patent counsel) or as otherwise agreed by the Parties, give such Third Party, were such Third Party to enforce its Patent Rights under applicable Law, the right to prohibit the applicable Selected Drug Candidate from being Developed or the applicable Product[s] from being Commercialized or Manufactured.
"Breaching Party". Breaching Party shall have the meaning assigned to it in Section 12.3.
"Business Day". Business Day shall mean a day on which banking institutions in both New York, New York and Basel, Switzerland are open for business.
"Candidate Intellectual Property". Candidate Intellectual Property shall have the meaning assigned to it in Section 11.1(f)(i).
"Candidates". Candidates shall have the meaning assigned to it in Section 11.1(f)(i).
"cGMP". cGMP shall mean the then-current good manufacturing practice legal, regulatory and administrative guidelines, standards, specifications and requirements which apply to the manufacture of a Product or the API therefor in a particular country in the world as promulgated by the relevant Regulatory Authority.
"Clinical Trial". Clinical Trial shall mean a Phase I Clinical Trial, Phase I/IIA Clinical Trial, Phase IIA Clinical Trial, Phase IIB Clinical Trial, Phase III Clinical Trial, Phase IIIB Clinical Trial, Phase IV Clinical Trial, Pivotal Clinical Trial or combination thereof.
"Co-Brand" or "Co-Branding". Co-Brand or Co-Branding shall mean, with respect to a Product, the marketing and promotion of such Product under separate and distinct trademarks by each Party or its Affiliates in a Co-Branding Country pursuant to the applicable Country Co-
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Commercialization Plan, and where both brands are distributed and sold by the Lead Commercialization Party.
"Co-Branding Country". Co-Branding Country shall mean each Major EU Country in which Co-Promotion of Products is not permitted under local Law and Co-Marketing is not required under local Law.
"Co-Commercialization Country". Co-Commercialization Country shall mean each Co-Promotion Country and Co-Branding Country.
"Co-Commercialization Provisions". Co-Commercialization Provisions shall have the meaning assigned to it in Section 5.2.
"Collaboration Intellectual Property". Collaboration Intellectual Property shall mean Idenix Intellectual Property, Novartis Intellectual Property with respect to which Novartis grants to Idenix a license pursuant to Section 6.2 and Joint Intellectual Property.
"Collaboration Patent Rights". Collaboration Patent Rights shall mean those Patent Rights included in Collaboration Intellectual Property.
"Co-Market" or "Co-Marketing". Co-Market or Co-Marketing shall mean, with respect to a Product, the separate marketing and sale of such Product under separate and distinct trademarks by each Party or its Affiliates in a Co-Marketing Country.
Co-Marketing Country". Co-Marketing Country shall mean each Major EU Country in which Co-Promotion and Co-Branding are not permitted under local Law, but in which Co-Marketing is required under local Law.
"Combination Therapy". Combination Therapy shall mean either (a) a fixed dose product containing more than one (1) active pharmaceutical ingredient or (b) separate co-administration products sold in combination.
"Commencement Notice". Commencement Notice shall have the meaning assigned to it in Section 3.2(b).
"Commencement Notice Due Date". Commencement Notice Due Date shall have the meaning assigned to it in Section 3.2(b).
"Commercialize" or "Commercialization". Commercialize or Commercialization shall mean any and all activities directed to marketing, promoting, distributing, importing, offering for sale and/or selling a Product, which may include pre-launch market preparation, sampling and conducting Phase IIIB Clinical Trials and/or Phase IV Clinical Trials.
"Commercially Reasonable Efforts". Commercially Reasonable Efforts shall mean, with respect to the efforts to be expended by a Party with respect to any objective, reasonable, diligent, good faith efforts to accomplish such objective as such Party would normally use to accomplish a similar objective under similar circumstances, it being understood and agreed that (a) with respect to the research, Development or Commercialization of any Product, such efforts
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shall be substantially equivalent to those efforts and resources commonly used by a Party for a product owned by it or to which it has rights, which product is at a similar stage in its development or product life and is of similar market potential taking into account efficacy, safety, approved labeling, the competitiveness of alternative products in the marketplace, the patent and other proprietary position of the product, the likelihood of regulatory approval given the regulatory structure involved, the profitability of the product, alternative products and other relevant factors, and (b) with respect to the Commercialization of any Product by Novartis, such efforts shall include those "best practices" employed by Novartis with respect to the Commercialization of internally discovered and developed products. Commercially Reasonable Efforts shall be determined on a market-by-market and Product-by-Product basis, and it is anticipated that the level of effort will change over time, reflecting changes in the status of the Product and the market[s] involved.
"Company Contractor". Company Contractor shall have the meaning assigned to it in the Stock Purchase Agreement.
"Company Disclosure Schedule". Company Disclosure Schedule shall mean the disclosure schedule provided by Idenix U.S. to Novartis upon the date of execution of, and in connection with, the Stock Purchase Agreement.
"Company Material Adverse Effect". Company Material Adverse Effect shall have the meaning assigned to it in the Stock Purchase Agreement.
"Company Patents". Company Patents shall have the meaning assigned to it in Section 11.1(f)(i).
"Company Property". Company Property shall have the meaning assigned to it in Section 11.1(f)(i).
"Company Stock". Company Stock shall have the meaning assigned to it in the Stock Purchase Agreement.
"Competing Product". Competing Product shall mean [**] Idenix [**]. [**], Competing Products shall [**] Novartis [**] Novartis' [**] the Parties [**] hereunder.
"Competing Product Negotiation Period". Competing Product Negotiation Period shall have the meaning assigned to it in Section 7.1(b)(i).
"Competing Product Opportunity". Competing Product Opportunity shall have the meaning assigned to it in Section 7.1(a).
"Competing Product Opportunity Notice". Competing Product Opportunity Notice shall have the meaning assigned to it in Section 7.1(a).
"Completion Notice". Completion Notice sh ...