Collaboration And License Agreement Dated June 9, 2005

EXHIBIT 10.8


COLLABORATION AND LICENSE AGREEMENT

between

TORAY INDUSTRIES, INC. and

ACOLOGIX, INC.


TABLE OF CONTENTS

Page ARTICLE 1 DEFINITIONS 1 ARTICLE 2 CO-DEVELOPMENT OF INJECTION PRODUCTS IN EUROPE 9 2.1

Joint Development and Commercialization Committee 9 2.2

European Co-Development Plan and Budget 10 2.3

Co-Development of Injection Products in Europe 10 2.4

Co-Funding Obligation 11 2.5

Reports; Records 13 ARTICLE 3 COMMERCIALIZATION OF INJECTION PRODUCTS IN EUROPE 13 3.1

Injection Product Election 13 3.2

Commercialization by Acologix 14 3.3

Commercialization by a Third Party 15 ARTICLE 4 DEVELOPMENT AND COMMERCIALIZATION IN NORTH AMERICA 17 4.1

Development and Commercialization of Products 17 4.2

Transfer of Data and Documentation 18 4.3

Trademarks 19 4.4

Reports; Records 20 4.5

Development Product Supply 20 ARTICLE 5 LICENSES AND COVENANTS NOT TO COMPETE 20 5.1

Injection Products in Europe 20 5.2

Products in North America 21 5.3

Option for Topical/Oral Products in Europe 21 5.4

Topical/Oral Products in the Reserved Field 22 5.5

Acologix License 23 5.6

Covenants Not to Compete 23 5.7

No Other Rights; No Implied Licenses 23 ARTICLE 6 SUPPLY 23 6.1

Manufacturing and Supply 23 6.2

Definitive Supply Agreements 23 6.3

Forecasts/Orders 24 6.4

Precedence 24 6.5

Pricing and Payment 25 6.6

Supply Elections in North America 25 6.7

Backup Supply Storage 25 6.8

Records 27 6.9

Audit 27 ARTICLE 7 PAYMENTS 28 7.1

Upfront Payments and Equity Issuance 28 7.2

Development Milestones 29 7.3

Products in Europe 30 7.4

Products in North America 31 7.5

Additional Terms 32 ARTICLE 8 PAYMENTS, BOOKS AND RECORDS 33 8.1

Reports; Payments 33 8.2

Payment Method 34 8.3

Place of Royalty Payment; Currency Conversion 34 8.4

Records; Inspection 34 8.5

Withholding Taxes 34 ARTICLE 9 INTELLECTUAL PROPERTY 35 9.1

Ownership of Inventions 35 9.2

Patent Prosecution 35 9.3

Enforcement 36 9.4

Patent Term Extension; Data Exclusivity 37 ARTICLE 10 CONFIDENTIALITY 37 10.1

Confidentiality 37 10.2

Permitted Use and Disclosures 38 10.3

Additional Nondisclosure 38 10.4

Publication 39 ARTICLE 11 REPRESENTATIONS AND WARRANTIES 39 11.1

Mutual Representations and Warranties 39 11.2

Representations and Warranties of Toray 39 ARTICLE 12 INDEMNIFICATION; PHARMACOVIGILANCE 40 12.1

Acologix Indemnity 40 12.2

Toray Indemnity 41 12.3

Indemnification Procedure 41 12.4

Insurance 42 ARTICLE 13 TERM AND TERMINATION 42 13.1

Term 42 13.2

Termination for Breach 42 13.3

Termination for Failure to Use Commercially Reasonable Efforts 43 13.4

Termination For Bankruptcy 44 13.5

Disputed Breach 44 13.6

Termination for Convenience 45 13.7

Effect of Breach or Termination 45 ARTICLE 14 DISPUTE RESOLUTION 48 14.1

Escalation to Senior Executives 48 14.2

Arbitration of Disputes 48 14.3

Expedited Arbitration 49 14.4

Injunctive Relief 50 ARTICLE 15 MISCELLANEOUS 50 15.1

Governing Laws 50 15.2

Waiver 50 15.3

Assignment 50 15.4

Independent Contractors 50 15.5

Compliance with Laws 50 15.6

Patent Marking 50 15.7

Notices 51 15.8

Severability 51 15.9

Advice of Counsel 51 15.10

Complete Agreement 51 15.11

Headings 52 15.12

Counterparts 52

EXHIBIT INDEX

Exhibit 1.48 Toray Patent Rights

Exhibit 2.2 Plan & Budget Summary

COLLABORATION AND LICENSE AGREEMENT

This COLLABORATION AND LICENSE AGREEMENT (the " Agreement" ), effective as of June 9, 2005 (the " Effective Date" ), is made by and between Toray Industries, Inc., a Japanese corporation, having a principal place of business at Toray Bldg., 2-1, Nihonbashi-Muromachi 2-chome, Chuo-ku, Tokyo 103-8666, Japan (" Toray" ), and Acologix, Inc., a Delaware corporation, having offices at 3960 Point Eden Way, Hayward, CA 94545, U.S.A. (" Acologix" ) (each a " Party ," together the " Parties" )

BACKGROUND

WHEREAS, Toray owns or controls certain patent and know-how rights with respect to the Compound (as defined below);

WHEREAS, Toray desires for Acologix to share the financial burden of Phase III clinical trials for an injection formulation of the Compound in Europe which are currently planned to begin 2005;

WHEREAS, Toray desires to expedite the development and commercialization of products incorporating the Compound in North America through partnership with Acologix; and

WHEREAS, Acologix desires to obtain from Toray the licenses set forth herein, and Toray desires for the reasons described above to grant such licenses to Acologix, all on the terms and conditions set forth in this Agreement.

NOW, THEREFORE, for and in consideration of the covenants, conditions and undertakings hereinafter set forth, it is agreed by and between the Parties as follows: ARTICLE 1

DEFINITIONS

As used herein, the following terms will have the meanings set forth below: 1.1 " Affiliate" of a Party means any corporation or other business entity which during the Term of this Agreement controls, is controlled by or is under common control with such Party but only for so long as such entity controls, is controlled by, or is under common control with such Party. For the purposes of this definition, with respect to a particular entity " control" means the ownership directly or indirectly of fifty percent (50%) or more of the stock entitled to vote for the election of directors, and for nonstock organizations, of the equity interests entitled to control the management of such entity.

1.2 " Business Day" means a day other than Saturday, Sunday or any day on which the Bank of Japan or commercial banks located in New York, New York are authorized or obligated by applicable Laws to close.


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1.3 " Co-Development Term" means the period commencing on the Effective Date and continuing until responsibility for the costs of Development activities directed at obtaining or expanding Regulatory Approval for Injection Products in Europe is assumed entirely by Acologix or one or more Third Parties in accordance with the Injection Product Election and the terms and conditions of Article 3. For clarity: (i) if Acologix is assigned responsibility for Commercialization of Injection Products in Europe in the Injection Product Election, the Co-Development Term shall terminate upon the First IP Approval; and (ii) if the Injection Product Election provides for Toray to assume responsibility for Commercialization of Injection Products in Europe by licensing to a Third Party, the Co-Development Term shall terminate on the date upon which a European Partner assumes responsibility for the costs of Development activities directed at obtaining or expanding Regulatory Approval for Injection Products in Europe pursuant to a European License from Toray.

1.4 " Commercialization" means activities directed to obtaining pricing and reimbursement approvals, marketing, promoting, distributing, importing or selling a Product. " Commercialize" means to engage in Commercialization. 1.5 " Commercially Reasonable Efforts" means efforts and resources normally used by a similarly situated therapeutic pharmaceutical company for a product owned by it or to which it has exclusive rights, which is of similar market potential at a similar stage in its development or product life, taking into account issues of safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the compound or product, the regulatory and reimbursement structure involved, the profitability of all applicable products, and other relevant commercial, scientific and other factors.

1.6 " Compound" means the compound identified as (E)-N-[17-(cyclopropylmethyl)-4,5 a -epoxy-3,14-dihydroxymorphinan-6 b -yl]-3-(furan-3-yl)-N-methylprop-2-enamide monohydrochloride, which is specified by Toray as TRK-820.

1.7 " Controlled" or " Controls" , when used in reference to intellectual property, means the legal authority or right of a Party hereto (or any of its Affiliates) to grant a license or sublicense of intellectual property rights to another Party, or to otherwise disclose proprietary or trade secret information to such other Party, without breaching the terms of any agreement with a Third Party, or misappropriating the proprietary or trade secret information of a Third Party.

1.8 " Covered" or " Covering" means, with respect to a particular Valid Claim and a Product, that the manufacture, use, sale, offer for sale or importation of such Product, but for the licenses granted herein, would infringe such Valid Claim. 1.9 " Development" means non-clinical and clinical drug development activities related to the development and submission of information to a Regulatory Authority, including, without limitation, toxicology, pharmacology and other discovery and pre-clinical efforts, test method development and stability testing, formulation development, delivery system development, quality assurance and quality control development, statistical analysis, and clinical


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studies (including, without limitation, pre- and post-approval studies). Development specifically excludes regulatory activities directed to obtaining pricing and reimbursement approvals and all other Commercialization activities. " Develop" means to engage in Development.

1.10 " Drug Substance" means a quantity of the Compound in bulk form.

1.11 " EMEA" means the European Medicines Agency, or any successor agency thereto.

1.12 " EU" means the European Union, which as of the Effective Date consists of Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and the United Kingdom, and that certain portion of Cyprus included in such organization. In the event that the European Union adds one or more new member nations during the Term of this Agreement, the Parties will discuss in good faith whether to amend the definition of " EU" to include such nation(s).

1.13 " Europe" means the EU and Switzerland.

1.14 " European Co-Development Plan and Budget" or alternatively the " Plan & Budget" means the plan and budget in the English language for the joint development of Injection Products in Europe as set forth in Exhibit 2.2 hereto and as may be revised from time to time in accordance with Section 2.2 and/or Section 2.4.

1.15 " European Development Costs" means payments actually made by a Party to a Third Party in connection with Development activities directed at obtaining Regulatory Approval for Injection Products in Europe. It is understood and acknowledged that European Development Costs shall include only those payments: [***]. Expenses incurred by a Party for equipment, materials and supplies shall not be charged as European Development Costs unless such equipment, materials or supplies are used exclusively in connection with activities under the European Co-Development Plan and Budget. [***]

1.16 " FDA" means the United States Food and Drug Administration and any successor thereto having substantially the same functions. 1.17 " First Commercial Sale" means, with respect to a particular Product and territory, the first bona fide commercial sale of such Product following Regulatory Approval to market such Product to a Third Party in such territory by or under authority of a Party, its Affiliates or Sublicensees.


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*** Confidential treatment request pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.


1.18 " First IP Approval" means the first Regulatory Approval for an Injection Product in Europe.

1.19 " GAAP" means United States Generally Accepted Accounting Principles (as consistently applied by the applicable Party and its Affiliates).

1.20 " GMP" means the then-current good manufacturing practices required by: (a) the provisions of 21 C.F.R., parts 210 and 211 and all applicable rules, regulations, orders and guidances (as the same may from time to time be amended); (b) ICH, Guidance for Industry Q7a Good Manufacturing Practice Guidance for Active Pharmaceutical Ingredients (as the same may from time to time be amended); (c) the provisions of Chapter II of EC Commission Directive 91356EEC together with the Guide to Good Manufacturing Practice published by the EC Commission in 1992 (ISBN 92-826-3180-X) (as the same may from time to time be amended); and (d) any other applicable Laws, guidelines, regulations and industry standards, that apply to any manufacturing or processing activities hereunder, or the facilities in which any such activities are performed.

1.21 " IND" means an Investigational New Drug Application (as defined in the United States Food, Drug and Cosmetic Act, as amended, and the regulations promulgated thereunder), or any corresponding application, registration or certification with a Regulatory Body in any jurisdiction.

1.22 " Injection Product" means any Product that is not a Topical/Oral Product.

1.23 " Japanese Licensee" means that Third Party with which Toray entered into an agreement prior to the Effective Date, whereby Toray granted such Third Party certain rights related to the Development and Commercialization of Products in Japan, as well as the Existing Preferential Rights.

1.24 " Know-How" means any data, inventions, methods, proprietary information, processes, techniques, technology, or material (including biological or other materials), and any intellectual property rights (other than Patent Rights) therein. 1.25 " Laws" means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law of any federal, national, multinational, state, provincial, county, city or other political subdivision, agency or other body, domestic or foreign.

1.26 " MAA" means a New Drug Application (as defined in the United States Food, Drug and Cosmetic Act, as amended (an " NDA" ), and the regulations promulgated thereunder), or any corresponding application, registration or certification for Regulatory Approval of a Product with a Regulatory Body in any jurisdiction, including without limitation an MAA with the EMEA.

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1.27 " Manufacture" and " Manufacturing" mean, with respect to a product or compound, the manufacturing, processing, formulating, packaging, labeling, storing and quality control testing of such product or compound.

1.28 " Net Sales" means the actual amounts invoiced for Products sold by a Person and its Affiliates to a Third Party (excluding any sales among such Person and its Affiliates where the Affiliate is not itself the user of the Product) less the following amounts related to the Products: (a) credits, allowances, discounts, rebates, and chargebacks for spoiled, damaged, outdated, rejected, and returned Products, (b) freight and insurance costs incurred with respect to the shipment of the Products to customers, (c) duties, surcharges and other governmental charges, (d) sales, use, value-added, excise and other similar taxes (excluding income taxes), (e) cash, quantity, trade and similar discounts, rebates, allowances and other price reductions actually granted or paid by a Person and its Affiliates to the extent that such reductions relate to sales of the Products, and (f) actual uncollectible amounts. If a sale, transfer or other disposition with respect to a product is made for consideration other than cash or is not at arm' s length, then the Net Sales from such sale, transfer or other disposition shall be the arm' s length fair market value thereof. For purposes of this Agreement, " sale" means any transfer or other distribution or disposition, but shall not include transfers or other distributions or dispositions of product, at no charge, for pre-clinical, clinical or regulatory purposes or in connection with patient assistance programs or other charitable purposes or to physicians or hospitals for promotional purposes. In the event that a Product is sold that includes more than one active ingredient, Net Sales for purposes of determining payments under this Agreement shall be limited to the portion of the Net Sales (determined in accordance with the preceding paragraph) allocated to the Compound rather than the other active ingredient(s), as determined by good faith negotiations between the Parties 1.29 " North America" means the United States, Canada and Mexico. 1.30 " Option Field" means the Development and Commercialization of Topical/Oral Products in Europe outside the Reserved Field, provided that the Option Field may be expanded to include the Reserved Field as set forth in Section 5.4 or as otherwise agreed by the Parties. 1.31 " Patent Rights" means any patents, patent applications, certificates of invention, or applications for certificates of invention and any supplemental protection certificates, together with any extensions, registrations, confirmations, reissues, substitutions, divisions, continuations or continuations-in-part, reexaminations or renewals thereof, and any foreign counterparts to any of the foregoing.

1.32 " Person" means any individual, firm, corporation, partnership, limited liability company, trust, business trust, joint venture company, governmental authority, association or other entity.


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1.33 " Phase II Trials" means human clinical trials, the principal purpose of which is to evaluation of both clinical efficacy and safety of an investigational product, and/or to obtain a preliminary evaluation of the dosage regimen of an investigational product, as more fully defined in 21 C.F.R. a7312.21(b) or similar clinical study in a country other than the United States.

1.34 " Phase III Trials" means human clinical trials, the principal purpose of which is to establish substantial evidence of both safety and efficacy in patients with the disease or condition being studied, as more fully defined in 21 C.F.R. a7312.21(c) or similar clinical study in a country other than the United States. Phase III Trials shall also include any other human clinical trial intended to serve as a pivotal trial to support the submission of an application for Regulatory Approval.

1.35 " Preferred Stock" means the Series B Preferred Stock of Acologix. 1.36 " Product" means a pharmaceutical preparation which incorporates the Compound as an active drug substance.

1.37 " Qualified Equity Financing" means the issuance and sale to investors following the Effective Date of Acologix preferred stock in one transaction or series of related transactions, the gross proceeds of which are at least Ten Million Dollars ($10,000,000).

1.38 " Region" means either of Europe or North America.

1.39 " Regulatory Approval" means approval of the Regulatory Authority in a country necessary for the marketing and sale of a Product in the applicable country. As used herein, " Regulatory Approval" shall not include pricing or reimbursement approval.

1.40 " Regulatory Authority" means the FDA and any or all equivalent governmental authorities outside the United States whose approval is required for manufacture, marketing, promotion, sale or distribution of the Products. 1.41 " Regulatory Requirements" means (i) compliance with GMP; (ii) obtaining and maintaining all licenses, registrations and other authorizations required by Regulatory Authorities applicable to Manufacturing or processing or distribution activities hereunder or the facilities at which any such activities are performed; and (iii) all applicable Laws, guidelines, regulations and industry standards, that apply to any Manufacturing or processing activities hereunder, or the facilities in which any such activities are performed. 1.42 " Reserved Field" means therapeutic applications of Topical/Oral Products for human dermatological diseases or conditions, provided that therapeutic applications of Topical/Oral Products for uremic pruritus is not included within the Reserved Field.

1.43 " Sublicensee" means a Third Party expressly licensed by a Party to make, use, import, offer for sale or sell Product. For clarity, a European Partner licensed by Toray and a Third Party sublicensed by Acologix for North America shall each be deemed a " Sublicensee"


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for the purposes of this Agreement. The term " Sublicensee" shall not include distributors (i.e. a Third Party who purchases product from a Party for resale).

1.44 " Sublicense Fees" means all amounts recognized as revenue by a Party and its Affiliates in accordance with GAAP from a particular Sublicensee in consideration for and during the term of the relevant sublicense with such Sublicensee under the Toray Patent Rights, including amounts received by way of license issue fees, milestone payments and royalties on the sale or distribution of Products. Notwithstanding the foregoing, the following shall not be included in the definition of Sublicense Fees: (i) amounts received by such Party and its Affiliates as payment or reimbursement for research, development or other costs incurred by or for such Party and its Affiliates, including costs associated with materials, equipment or clinical testing (to the extent allocated and eventually used for such purposes); (ii) amounts received for services and products, equipment or securities (equity or debt); (iii) amounts paid to such Party or its Affiliates in consideration for licenses or other rights under Patent Rights or Know-How other than under the Toray Patent Rights licensed by Toray to Acologix hereunder; (iv) amounts in consideration for the sale of all or substantially all of the business or assets of such Party and its Affiliates, whether by merger, acquisition of stock or assets or otherwise; and (v) any governmental charges, including withholding or other taxes (but not income taxes), paid or payable by such Party and its Affiliates on amounts received in consideration for a sublicense under the Patent Rights and Know-How licensed hereunder. If such Party or its Affiliates receive non-cash consideration from such Sublicensee, then such consideration shall be included in Sublicense Fees (except to the extent that any of the foregoing exclusions apply) at the fair market value of such non-cash consideration. In the event that such Party or its Affiliates receive non-cash consideration that is not readily convertible into cash, the Parties shall discuss the timing and manner of payments to be made under this Agreement based on such Sublicense Fees.

1.45 " Third Party" means any Person or entity other than Toray and Acologix, and their respective Affiliates.

1.46 " Topical/Oral Product" means a Product formulated for either oral or topical delivery in humans.

1.47 " Toray Know-How" means all Know-How that is (i) necessary or useful for the Development and/or Commercialization of the Compound and/or Products; and (ii) Controlled by Toray or its Affiliates as of the Effective Date or during the term of this Agreement.

1.48 " Toray Patent Rights" means those Patent Rights set forth in Exhibit 1.48 , and any extensions, registrations, confirmations, reissues, substitutions, divisions, continuations or continuations-in-part, reexaminations or renewals thereof, and any foreign counterparts to any of the foregoing as well as any Patent Rights that are (i) necessary or useful for the Development and/or Commercialization of the Compound and/or Products; and (ii) Controlled by Toray or its Affiliates during the Term of this Agreement.

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1.49 " Trademark" means any word, name, symbol, color, designation or device or any combination thereof, including, without limitation, any trademark, trade dress, brand mark, house mark, trade name, brand name, logo, or business symbol (whether or not registered or registerable) used or displayed with respect to any Product.

1.50 " Valid Claim" means (i) a claim of an issued and unexpired patent (or the equivalent in a supplementary protection certificate), which has not lapsed or become abandoned or been declared invalid or unenforceable by a court of competent jurisdiction or an administrative agency from which no appeal can be or is taken or (ii) a claim of a pending patent application, filed in good faith, which claim shall not have been canceled, withdrawn, abandoned or rejected by an administrative agency from which no appeal can be taken; provided that no more than [***] has passed since the filing date for such patent application.

1.51 Additional Terms . In addition to the foregoing, the following terms shall have the meaning defined in the corresponding Section below:


Definition Section
Defined

Definition Section
Defined

AAA 14.2.1

First Year 6.3.1

Abandonment 9.2.2

First Year Forecast 6.3.2

Acologix Know-How 13.7.1 (b)

Generic Competition 7.5.3

Acologix Patent Rights 5.5

Generic Product 7.5.3

Acologix Partner Percentage 7.3.3 (b)

Indemnification Claim 12.3

Acologix Termination Patent Rights 13.7.1 (b)

Indemnitee 12.3

Annual Forecast 6.3

Indemnitor 12.3

Annual Net Sales 7.3.1

Injection Product Election 3.1

Audited Party 6.9

JCAA 14.2.1

Auditing Party 6.9

JDCC 2.1

Competing T/O Products 7.3.2

Losses and Claims 12.1

Competitive Product 5.6

Plan & Budget Summary 2.2

Cumulative Repayment Amount 7.3.3 (c)

Purchase Price 6.5

Deferred Excess Amount 2.4.4 (a)

Related Party 6.9.1

Election Notice 3.1.1

Remaining Region 13.7.1

End of Phase II Meeting 13.3.4 (a)

Second Source 6.7.2 (a)

Equity Agreements 7.1.1

Supply Agreement 6.2

European License 3.3

Topical/Oral Product Competition 7.3.2

European Option 5.3

Toray Existing Patent Rights 9.2.1

European Partner 3.3

Term 13.1

Existing Preferential Right 5.4

Terminated Region 13.7.1

Filing Party 9.2.3

Termination Date 13.7.1


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*** Confidential treatment request pursuant to a request for confidential treatment filed with the Securities and Exchange Commission. Omitted portions have been filed separately with the Commission.


ARTICLE 2

CO-DEVELOPMENT OF INJECTION PRODUCTS IN EUROPE

2.1 Joint Development and Commercialization Committee. Within five (5) Business Days after the Effective Date, the Parties shall commence operation of a joint development and commercialization committee (" JDCC" ) to provide oversight and management of Development and Commercialization activities undertaken under this Agreement related to Injection Products in Europe. The JDCC will be composed of three (3) representatives of each Party who shall be appointed (and may be replaced at any time) by such Party on prior written notice to the other Party in accordance with this Agreement. At least one (1) representative of a Party on the JDCC shall be a member of the senior management of such Party, and the representatives shall have relevant experience and expertise in Development and Commercialization of pharmaceutical products.

2.1.1 Meetings . The JDCC shall meet [***] during the Co-Development Term or more frequently as the Parties a ...