COLLABORATIVE RESEARCH AGREEMENT AS OF 1-28-98

SCHERING-PLOUGH

RESEARCH INSTITUTE





COLLABORATIVE RESEARCH AGREEMENT







COLLABORATIVE RESEARCH AGREEMENT





This Collaborative Research Agreement (the "Agreement"), effective as of January 28, 1998 (the "Effective Date") is made by and between Abgenix, Inc., a Delaware corporation having its principal place of business at 7601 Dumbarton Circle, Fremont, California 94555 ("ABX") and Schering-Plough Research Institute, a Delaware corporation having its principal place of business at 2015 Galloping Hill Road, Kenilworth, New Jersey 07033 ("SPRI").



WHEREAS SPRI and ABX are interested in conducting research regarding antibodies derived from XenoMouse(TM) Animals (described below) that bind to [*], as set forth below;



NOW THEREFORE, in consideration of the mutual promises contained in this Agreement, the parties agree as follows:



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



1.1 "Antibody" shall mean a composition comprising a whole antibody or fragment thereof, said antibody or fragment having been derived in whole or part from immunization of the XenoMouse Animals with the Target Antigen, or having been derived from nucleotide sequences encoding, or amino acid sequences of, such an antibody or fragment.



1.2 "Research" shall mean the research activities set forth in Exhibit A.



1.3 "Target Antigen" shall mean [*].



1.4 "XenoMouse Animals" shall mean one or more transgenic mice available for use by ABX that produce human antibodies when immunized with antigens.



2. RESEARCH PROGRAM



2.1 Research Program Activities. Subject to the terms and conditions set forth in this Agreement, the parties shall conduct the Research as set forth in Exhibit A on a collaborative basis with the goal of generating and studying Antibodies that bind to the Target Antigen. Each party shall use commercially reasonable efforts to conduct the Research in accordance with Exhibit A within the time schedules contemplated therein. The parties will confer at mutually agreed times, no less than [*] in person or by telephonic conference call, to discuss the status of the research project pursuant to Exhibit A. The obligation of each party to use commercially reasonable efforts to conduct the





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Research in accordance with Exhibit A is expressly conditioned upon the performance by each party of its obligations to the other party under this Agreement, including but not limited to, the obligations set forth in Exhibit A.



2.2 SPRI Responsibilities. Promptly following execution of this Agreement, SPRI will provide to ABX reasonable quantities of the materials set forth in Exhibit A. Upon request by ABX, SPRI agrees to provide reasonable assistance to ABX in performance of the Research. SPRI shall provide a reasonably detailed report to ABX showing the data generated pursuant to item I of Exhibit A, promptly after completion of the tasks set forth in item I of Exhibit A.



2.3 ABX Responsibilities. After receiving Target Antigen materials from SPRI for immunization, ABX shall use commercially reasonable efforts to immunize XenoMouse Animals with the Target Antigen [*] and in accordance with Exhibit A during the term of this Agreement. ABX shall provide a reasonably detailed report to SPRI showing the data generated pursuant to items E and F of Exhibit A, promptly after completion of the tasks set forth in items E and F of Exhibit A.



2.4 Payments. SPRI shall pay to ABX [*] Such payments shall be nonrefundable and noncreditable. It is understood that if SPRI enters into a definitive Research, Option and License Agreement, it will make all the payments described under this Section 2.4 regardless of whether or not the goal described in Exhibit A was met. Each of SPRI and ABX shall be solely responsible for its own out-of-pocket costs and disbursements incurred, and for providing the necessary facilities, supplies (except for materials to be provided pursuant to Exhibit A), personnel and other resources necessary in the performance of the Research and its obligations under this Agreement.



2.5 Exclusivity. In consideration of the payment to ABX hereunder, during the term of this Agreement, ABX shall not actively solicit or enter into any agreement with a third party pursuant to which ABX would convey or grant rights to such third party regarding [*] In addition, during the term of this Agreement, ABX shall not offer the [*] to any third party for purposes of discussing or evaluating a possible business relationship relating to such Antibodies, nor enter into any agreements which would otherwise diminish the rights granted to SPRI under this Agreement, without the prior written consent of SPRI. ABX shall not, without SPRI's written consent, use for the benefit of any third party, or provide to any third party, the XenoMouse Animals immunized in the course of performing the Research or any materials derived from such XenoMouse Animals in the course of performing the Research.



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2.6 Material Transfer Terms.



2.6.1 Transfer by SPRI. SPRI agrees to provide the materials required to be provided to ABX pursuant to the Research (the "SPRI Materials") solely upon the following terms and conditions:



(a) All SPRI Materials provided to ABX by SPRI under this Agreement shall remain the property of SPRI, and the transfer of physical possession of any such materials to, and the physical possession of any such materials by, ABX shall not be (nor be construed as) a sale, lease, offer to sell or lease, or other transfer of title of such materials to ABX;



(b) All SPRI Materials shall remain in the control of ABX and shall not be transferred to any other party, and ABX shall use the SPRI Materials only for purposes of performing the Research and not for any other purpose; and



(c) ABX agrees to use the SPRI Materials in compliance with all applicable national, state, and local laws and regulations, including all applicable National Institutes of Health guidelines, and agrees that such materials will not be used in humans. ABX acknowledges that the SPRI Materials are experimental in nature and may have unknown characteristics and therefore agrees to use prudence and reasonable care in the use, handling, storage, transportation, disposition and containment of SPRI Materials and all derivatives thereof.



2.6.2 Transfer by ABX. ABX agrees to provide the XenoMouse Materials (as defined below) required to be provided to SPRI pursuant to the Research solely upon the following terms and conditions:



(a) All materials derived in whole or part from the XenoMouse Animals, including without limitation all Antibodies to the Target Antigen and all [*] derived from XenoMouse Animals under this Agreement (collectively, "XenoMouse Materials"), shall be the property of ABX, and the transfer of physical possession of any such materials to, and the physical possession of any such materials by, SPRI shall not be (nor be construed as) a sale, lease, offer to sell or lease, or other transfer of title of such materials to SPRI;



(b) All XenoMouse Materials shall remain in the control of SPRI and shall not be transferred to any other party, and SPRI shall use the XenoMouse Materials only for purposes of performing the Research and not for any other purpose; and



(c) SPRI agrees to use the XenoMouse Materials in compliance with all applicable national, state, and local laws and regulations, including all applicable National Institutes of Health guidelines, and agrees that such materials will not be used in humans. SPRI acknowledges that the XenoMouse Animals, and all materials derived in whole or part from the XenoMouse Animals, are experimental in nature and may have unknown





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characteristics and therefore agrees to use prudence and reasonable care in the use, handling, storage, transportation, disposition and containment of XenoMouse Materials and all derivatives thereof.



2.7 Research License. Each party hereby grants the other party a non-exclusive license to perform the Research activities set forth in Exhibit A under all patents and patent applications owned or controlled by the granting party that are necessary to perform such activities.





3. RESEARCH AND LICENSE OPTION



During the period commencing on the Effective Date and ending on [*] or (ii) termination of this agreement (the "Option Period"), SPRI, through a corporate affiliate, shall have the exclusive option to enter into a written definitive agreement ("Research, Option and License Agreement") that will provide for the additional research described in Exhibit B and an option to acquire a worldwide, exclusive (even as to ABX) license, including the right to sublicense, to develop, make, have made, use, export and import [*] derived from XenoMouse animals under this Agreement in order to develop, make, have made, use, sell, offer for sale, export and import [*] generated under this Agreement upon mutually agreeable terms and conditions to be set forth in the Research, Option and License Agreement. It is understood that any such license will be subject to non-exclusive grant of rights to GenPharm International Inc. ("GenPharm") under that certain Cross License Agreement effective as of March 26, 1997 by and among Abgenix, GenPharm and other parties named therein. The parties agree to negotiate the terms of the Research, Option and License Agreement in good faith during the Option Period, it being understood that, in addition to other key terms to be negotiated by the parties, the Research, Option and License Agreement shall provide for further research reimbursement fees, license fees, milestone payments, royalty and other key financial terms set forth on the attached term sheet as Exhibit C; and other customary terms and conditions for commercial agreements of this type, including, but not limited to, provisions relating to intellectual property, confidentiality and publication, representations and warranties of each party, diligence, indemnification, and reporting.



4. CONFIDENTIALITY



4.1 Confidentiality. During the term of this Agreement and for a period of ten (10) years following the expiration or termination of this Agreement ABX and SPRI shall keep completely confidential and shall not, without the prior written consent of the other party, publish or otherwise disclose, and shall not use for any purpose other than conducting the Research, any information furnished to it by the other party or generated pursuant to this Agreement, except to the extent that such information:



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(a) was already known to the receiving party, other than under an obligation of confidentiality, at the time of disclosure;

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