Multi-antigen Research License And Option Agreement

EXECUTION COPY


CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


MULTI-ANTIGEN RESEARCH LICENSE AND OPTION AGREEMENT


This MULTI-ANTIGEN RESEARCH LICENSE AND OPTION AGREEMENT (this "Agreement"), effective December 31, 1999 (the "Effective Date"), is made by and between ABGENIX, INC., a Delaware corporation ("ABX") and JAPAN TOBACCO INC., a Japanese corporation ("JTI") with reference to the following facts and circumstances.


RECITALS


A. WHEREAS, in 1991, Cell Genesys, Inc. ("CGI") and JT Immunotech USA Inc., a wholly-owned indirect subsidiary of JTI, formed Xenotech L.P. ("XT"), a California limited partnership, to develop and commercialize products based upon human monoclonal antibodies derived from transgenic mice ("XenoMouse Animals," as further described herein);


B. WHEREAS, CGI assigned to ABX (its wholly-owned subsidiary at such time), its interest in XT, and in 1997, JT Immunotech USA Inc. merged into JT America Inc. ("JTA") (a wholly-owned subsidiary of JTI) and its interest in XT was assigned to JTA through operation of law;


C. WHEREAS, JTA has agreed to sell to ABX its interest in XT pursuant to the terms of a Limited Partnership Interest and Stock Purchase Agreement of even date herewith;


D. WHEREAS, JTI desires to continue to use such XenoMouse Animals to generate antibodies to certain antigens; and


E. WHEREAS, ABX is willing to grant to JTI, and JTI desires to acquire from ABX, an option to enter into one or more license agreements with ABX with respect to antibody products derived from immunization of XenoMouse Animals with antigens selected by JTI, all as described fully below and on the terms and conditions set forth herein.


NOW THEREFORE, for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, the Parties agree as follows:


1. DEFINITIONS


For purposes of this Agreement, capitalized terms set forth in this Agreement and not otherwise defined herein shall have the meaning set forth in the Common Definitions Exhibit attached hereto as Exhibit A.


2. RESEARCH LICENSE; SUPPLY OF MICE; MATERIALS OWNERSHIP


2.1 RESEARCH LICENSE.


2.1.1 LICENSE GRANT.


(a) Subject to the terms and conditions of this Agreement, ABX hereby grants to JTI, and the Majority-Owned Affiliates of JTI, solely as needed to exercise the


[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


rights that may be granted in accordance with Section 2.3.5, a paid-up, non-exclusive license and/or sublicense of its rights, as the case may be, under the Licensed Technology, without the right to grant further sublicenses, to (i) [*] solely for use in the Research Field in connection with activities described in subsections (ii) and (iii) of this Section 2.1.1, (ii) immunize such XenoMouse Animals solely with those Antigens that are Permitted Antigens at the time of immunization and (iii) use the Research Program Materials and Information solely for conducting research and development work within the scope of the Research Field.


(b) Subject to the terms and conditions of this Agreement, ABX hereby grants to JTI, and the Majority-Owned Affiliates of JTI solely as needed to practice the rights that may be granted in accordance with Section 2.3.5, a paid-up, non-exclusive license and/or sublicense, as the case may be, of its rights in the ABX Materials and Information and all intellectual property rights Controlled by ABX related thereto that are not licensed to JTI pursuant to the license in subsection (a) above, solely to the extent that the ABX Materials and Information are necessary or useful to JTI's practice of the license granted in subsection (a) above.


2.1.2 LIMITATIONS.


(a) At such time as any Permitted Antigen becomes a Product Antigen under the terms and conditions of this Agreement (i.e. JTI has exercised its Option with regard to such Permitted Antigen as further described in Section 3.4), the research licenses and/or sublicenses described above shall become exclusive licenses and/or sublicenses with respect to such Product Antigen as set forth herein. The license and/or sublicense rights granted under Section 2.1.1 shall terminate with regard to a particular Permitted Antigen on the effective date of a Product License Agreement, if any, between ABX and JTI relating to such Permitted Antigen. The Parties acknowledge that, notwithstanding any license or sublicense from ABX to JTI of ABX's rights within the Research Field under this Agreement, the rights granted to ABX by ABX's licensors may not be exclusive.


(b) JTI shall practice the licenses granted to it pursuant to Section 2.1 solely at its facility in Yokohama, Japan and/or another facility in Japan that is owned by or under the control of JTI.


(c) JTI shall not, and shall ensure that its Affiliates do not, use the Licensed Technology or ABX Materials and Information for any purpose other than is expressly permitted under this Section 2.1. Without limiting the generality of the foregoing, JTI shall not, and shall ensure that its Affiliates do not, immunize any XenoMouse Animal with any Excluded Antigen.


2.1.3 NO OTHER RIGHTS. No implied licenses or rights are conveyed to JTI hereunder. JTI shall only be authorized to use the ABX Materials and Information and the materials derived in whole or part from the XenoMouse Animals (including without limitation Antibodies) solely as expressly provided in this Article 2.


[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


2.2 USE OF XENOMOUSE ANIMALS AND ABX MATERIALS AND INFORMATION.


2.2.1 XENOMOUSE ANIMALS.


(a) Subject to the terms and conditions of this Agreement, JTI and Majority-Owned Affiliates of JTI, solely as needed to practice any rights that may be granted in accordance with Section 2.3.5, shall have the right, but not the obligation, to maintain the [*] JTI shall use such XenoMouse Animals (the "Original Strains"), and any other XenoMouse Animals it acquires pursuant to this Agreement, solely for the purposes set forth in this Agreement in accordance with the terms hereof.


(b) If JTI elects not to continue to maintain the XenoMouse Animals included on Schedule 2 to Exhibit A, JTI shall either return such XenoMouse Animals to ABX or destroy such XenoMouse Animals, as ABX in its sole discretion may direct.


2.2.2 CERTAIN STRAINS. As soon as practicable following the Effective Date, ABX shall transfer to JTI [*] as provided on Schedule 2 of Exhibit A. In addition, as soon as ABX has developed the [*] described on Schedule 2 of Exhibit A and has [*] ABX shall provide to JTI sufficient quantities of such [*] together with appropriate quantities of [*]


2.2.3 NEW STRAINS. If ABX develops and has reasonably available for licensing and shipment to JTI a strain of transgenic mice that produces human antibodies, which strain was not included on Schedule 2 to Exhibit A on the Effective Date (a "New Strain," provided that a "New Strain" shall not include any transgenic mice that, irrespective of whether such mice produce human antibodies, are developed principally for one or more uses other than the generation of human antibodies (i.e., as a model to study diseases or conditions)), then ABX shall inform JTI of the availability of such New Strain and discuss with JTI whether JTI desires to obtain a license to use such transgenic animals from the New Strain to maintain in [*] in accordance with Section 2.2.1. In such event, the Parties shall negotiate in good faith appropriate terms and conditions of an amendment to this Agreement pursuant to which JTI may receive a certain number of animals from the New Strain. If JTI chooses to receive animals from the New Strain and the Parties execute such an amendment, then ABX shall provide JTI with a reasonable number of [*] from the New Strain, any such animals shall be added to Schedule 2 to Exhibit A, and JTI's use of such New Strain animals shall be subject to the terms and conditions of this Agreement, including without limitation Section 2.2.1. In the event that JTI and ABX execute such an amendment to this Agreement, (a) JTI shall agree to be bound by all other obligations, terms or conditions imposed by ABX upon the New Strain, including without limitation any reporting, indemnification, use restrictions or diligence requirements; (b) any New Strain Intellectual Property shall become part of the Licensed Technology; and (c) ABX shall modify Exhibit B to reflect New Strain Intellectual Property, if any, with respect to such New Strain.


[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


Notwithstanding anything to the contrary in this Agreement, ABX shall not be obligated to develop any New Strains.


2.2.4 LIMITATIONS. JTI shall not sell, have sold, (sub)license, assign, lease, or offer to sell, (sub)license, assign or lease, otherwise transfer title to, or distribute, commercialize or clinically develop any Antibody, ABX Materials and Information, Product or materials derived from XenoMouse Animals (or Genetic Materials encoding the foregoing) without first entering into a Product License Agreement with ABX that covers such materials; provided that prior to execution of a Product License Agreement, JTI may provide to a Third Party subcontractor amounts of a given Antibody solely for such Third Party to use such Antibody in an assay that determines the functional activity thereof, provided that such subcontractor has executed an agreement providing restrictions on use of and access to such Antibody consistent with this Article 2.


2.2.5 SUPPLY OF XENOMOUSE ANIMALS IN CERTAIN CIRCUMSTANCES. Each Party agrees to transfer [*] XenoMouse Animals [*] in the event that such [*] such XenoMouse Animals are [*] provided that the transferring Party shall not be required to provide such [*] the other Party if doing so would require efforts that are not commercially reasonable. Such [*] will be provided to a Party without charge, except that the Party [*] shall [*] XenoMouse Animals.


2.3 MATERIAL TRANSFER TERMS.


2.3.1 JTI shall use all ABX Materials and Information solely in accordance with the terms and conditions of this Agreement.


2.3.2 The transfer of physical possession of any ABX Materials and Information to JTI by ABX, and the physical possession and use of such ABX Materials and Information by JTI, shall not be (nor shall be construed as) a sale, lease, offer to sell or lease, or other transfer of title of such ABX Materials and Information to JTI.


2.3.3 JTI shall use the ABX Materials and Information and all materials derived from the ABX Materials and Information (including without limitation Research Program Materials and Information and Products) in compliance with all applicable national, state, and local laws and regulations, including without limitation all applicable National Institutes of Health guidelines. JTI acknowledges that the ABX Materials and Information, and all materials derived from the ABX Materials and Information (including without limitation Products), are experimental in nature and may have unknown characteristics. JTI shall use reasonable prudence and care in the use, handling, storage, transportation, disposition and containment of the ABX Materials and Information and all materials derived from the ABX Materials and Information (including without limitation Products). Except as otherwise permitted under a Product License Agreement, neither JTI nor its respective Affiliates or permitted transferees shall (nor shall JTI or permitted transferees attempt or purport to) administer any (a) Research Program Materials and Information or Products to humans, or (b) file or submit any regulatory application or other


[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


submission to obtain regulatory approval therefor. JTI shall not (and shall not attempt or purport to) administer any ABX Materials and Information to humans, or file or submit any regulatory application or other submission to obtain regulatory approval therefor.


2.3.4 Unless otherwise agreed by ABX in advance in writing, all XenoMouse Animals delivered to JTI shall be delivered to JTI's research facility located in Yokohama, Japan or another facility in Japan owned by and/or under the control of JTI or a Majority-Owned Affiliate of JTI, to the extent permitted under Section 2.3.5, and such XenoMouse Animals shall not be moved from or allowed to leave such facility (except for the return of XenoMouse Animals to ABX or upon destruction of the XenoMouse Animals by JTI).


2.3.5 JTI shall not: (i) transfer XenoMouse Animals to any Third Party or Affiliate of JTI, other than a Majority-Owned Affiliate that agrees in writing to be bound by the obligations of confidentiality, non-use, and restrictions on transfer set forth in this Agreement; nor (ii) sell, have sold, sublicense, assign, lease, offer to sell or lease, assign or otherwise transfer title to any XenoMouse Animal to any Third Party or Affiliate of JTI; except that JTI may provide XenoMouse Animals to the institutions listed on Exhibit D ("Permitted Transferees") pursuant to written agreements with each such institution providing restrictions on the transfer and use of and access to such XenoMouse Animals consistent with those provided under this Agreement; provided however that any such agreement between JTI and a Permitted Transferee shall provide for an allocation of intellectual property rights covering inventions made by such Permitted Transferee using such XenoMouse Animals consistent with the rights granted to ABX by JTI pursuant to this Agreement and any Product License Agreements, including without limitation Section 5.7.3 of this Agreement and Section 6.13 of any Product License Agreements.


2.4 NO RESEARCH BY ABX. It is understood that, except as the Parties may otherwise agree in writing, ABX shall not be responsible for conducting any research and development activities in connection with the creation, research and development of Products, including without limitation: immunizations of XenoMouse Animals with Antigens or Product Antigens, screening of Antibodies generated from such immunizations, creation of Antibody Cells, production of Antibodies to the Antigens or Product Antigens, or preclinical evaluation of Antibodies to the Antigens or Product Antigens.


2.5 THIRD PARTY RIGHTS. It is understood and agreed that (i) the grant of rights under this Article 2 shall be subject to and limited in all respects by the terms of the applicable ABX In-License(s) pursuant to which ABX has acquired or may acquire any Licensed Technology, including, without limitation, any rights granted to or retained by GenPharm International, Inc. under the GenPharm Cross License Agreement, and (ii) all rights or sublicenses granted under this Agreement shall be effective only to the extent that ABX shall have the right to grant such rights and sublicenses under such ABX In-Licenses.


2.6 UPDATED LISTS OF [*] ABX shall provide JTI with written updates to the list of [*] set forth in [*] at least semiannually. If JTI notifies ABX that, prior to its receipt of such updated list, JTI performed research and development work with respect to an Antigen that was deemed a Permitted Antigen at the time that such work was performed, but has become an [*] and JTI Controls any


[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


patents or patent applications covering such Antigen, then the Parties shall discuss in good faith possible mechanisms under which JTI may collaborate either with ABX or a Third Party, as applicable, to develop Products binding to such [*]; PROVIDED THAT neither JTI, ABX nor such Third Party shall have any obligation to enter into any agreement with respect thereto.


3. OPTION TO ENTER INTO PRODUCT LICENSE AGREEMENT


3.1 OPTION. Subject to the terms and conditions set forth in this Agreement, ABX hereby grants to JTI an exclusive option (an "Option") to enter into a Product License Agreement with respect to those Permitted Antigens which have been designated as Product Antigens, as further described in Section 3.2. Each calendar year during the term of this Agreement, JTI may obtain up to [*] with respect to Product Antigens, pursuant to the procedures set forth in this Article 3.


3.2 DESIGNATION OF PRODUCT ANTIGENS.


3.2.1 NOTICE. For each Permitted Antigen for which JTI desires to obtain an Option, JTI shall provide ABX with written notice (each such notice an "Option Notice") stating that JTI desires to obtain an Option with respect to such Permitted Antigen and identifying in reasonable detail such Permitted Antigen.


3.2.2 ABX REVIEW.


(a) Within thirty (30) days of receiving an Option Notice from JTI (the "Review Period"), ABX shall notify JTI in writing as to whether any of the conditions set forth in this Section 3.2.2 (each such condition, an "Impediment") exist as of the date upon which ABX receives the Option Notice with respect to each Permitted Antigen which is the subject of such Option Notice, and shall represent the same in such notice. In such event, ABX shall provide to JTI a reasonable description of such Antigen, such Impediment and the date upon which such Impediment arose; PROVIDED THAT in the event that ABX reasonably believes that such a disclosure may cause ABX to breach a confidentiality obligation, the Parties shall discuss in good faith a reasonable resolution to such situation. If ABX notifies JTI that an Impediment exists with respect to the Permitted Antigen that is the subject of the Option Notice, JTI shall not have the right to obtain an Option for such Permitted Antigen. Impediments are as follows:


(i) The Permitted Antigen identified by JTI is not available to JTI for an Option because:


(1) ABX is a party to an existing exclusive product license agreement with a Third Party with respect to such Permitted Antigen; or


(2) ABX has granted an option to a Third Party to acquire a license to such Permitted Antigen, or is [*] with respect to such Permitted Antigen; or


[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


(3) ABX or its Affiliates are, at the time such Option Notice is given, engaged in good faith discussions with a Third Party whereunder ABX or its Affiliates may grant to such Third Party an exclusive license or option to obtain an exclusive license with respect to such Permitted Antigen, [*] relating to such Permitted Antigen;


(ii) Such Permitted Antigen is claimed or disclosed in an issued U.S. patent or a pending U.S. patent application, which U.S. patent or application is Controlled by ABX and contains one or more claims to the following: (1) [*] (2) [*] (3) [*] (4) [*] and [*] and (5) [*] or


(iii) ABX or its Affiliates have already initiated an active research program (either internally or externally with a Third Party) regarding such Permitted Antigen, have immunized XenoMouse Animals with such Permitted Antigen [*] of a XenoMouse Animal with such Permitted Antigen) and are diligently pursuing such research program (either internally or externally).


(b) If ABX notifies JTI that an Impediment exists under subsection (a)(i) above because of rights ABX granted to, or negotiations ABX is then conducting with a Third Party, then JTI may, in its sole discretion, request in writing that ABX notify such Third Party that JTI would be interested in discussing the terms of an agreement between JTI and such Third Party with respect to development of Products binding to the Permitted Antigen for which such Impediment exists. Following ABX's receipt of such request, ABX shall contact such Third Party on JTI's behalf and shall disclose to such Third Party JTI's interest in discussing such a licensing arrangement. JTI agrees that such a disclosure by ABX shall not be deemed a breach of any confidentiality obligations of ABX under this Agreement. Nothing in this subsection (b) shall obligate JTI, ABX or such Third Party to enter in any such agreement.


(c) If ABX notifies JTI that an Impediment exists under subsection (a)(ii) above, and JTI Controls a patent or patent application, whether U.S. or otherwise, containing one or more claims described in subsection (a)(ii), then upon JTI's written request, the Parties shall discuss in good faith possible mechanisms under which JTI and ABX may collaborate to develop Products binding to such [*] Nothing in this subsection (c) shall obligate either Party to enter into any agreement with the other Party with respect to such a collaboration or to grant a license to the other Party under such patents or patent applications.


[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


(d) If ABX notifies JTI that an Impediment exists under subsection (a)(iii) above, then upon JTI's written request, the Parties shall discuss in good faith possible mechanisms under which JTI and ABX may collaborate to develop Products binding to such [*] Nothing in this subsection (d) shall obligate either Party to enter into any agreement with the other Party with respect to such a collaboration or to grant a license to the other Party under such patents or patent applications.


3.2.3 ACCEPTANCE BY ABX. Upon the first to occur of (a) ABX giving notice to JTI that no Impediment exists with respect to the Permitted Antigen identified in the Option Notice (an "Acceptance Notice"), or (b) expiration of the Review Period if ABX does not notify JTI of an Impediment prior to such expiration, then ABX shall be deemed to have granted to JTI an Option with respect to such Permitted Antigen, and the Permitted Antigen which is subject of such Option shall be designated a "Product Antigen."


3.2.4 ACKNOWLEDGEMENT. JTI acknowledges and agrees that ABX currently has entered into, and may hereafter enter into, agreements with Third Parties granting such Third Parties rights to obtain an option or license to one or more Antigens, and that JTI therefore may be unable to obtain an Option with respect to any particular Antigen, regardless of the research and development activities that it undertakes hereunder with respect to such Permitted Antigen.


3.2.5 LIMITATIONS ON ABX.


(a) Upon a Permitted Antigen being designated a Product Antigen pursuant to Section 3.2.3, ABX shall cease any research or development it may be conducting with respect to such Product Antigen. ABX shall not conduct any research or development with respect to such Antigen for so long as such Antigen remains designated as a Product Antigen.


(b) Following the designation of a Permitted Antigen as a Product Antigen pursuant to Section 3.2.3, ABX agrees not to file any patent application claiming an Antigen Invention for such Product Antigen for so long as such Antigen remains designated as a Product Antigen. In the event that ABX has filed a patent application claiming an Antigen Invention for such Product Antigen prior to its designation as a Product Antigen hereunder, such patent application and any patents issuing therefrom shall be deemed to be included within the ABX Patent Rights, but only for so long as such Antigen remains a Product Antigen.


3.2.6 REMOVAL OF IMPEDIMENTS. If ABX notifies JTI that one or more Impediments exist with respect to a Permitted Antigen, then if and when all such Impediments cease to exist ABX shall promptly so notify JTI, and JTI may subsequently seek to have such Permitted Antigen designated a Product Antigen pursuant to this Section 3.2.


3.3 CONDITIONS OF OPTIONS.


3.3.1 TERM OF OPTIONS. With respect to [*] Option, the term of such Option shall begin on the earlier of (a) the date that JTI receives the Acceptance Notice for the Permitted Antigen that is the subject of the corresponding Option Notice, or (b) the date of expiration of the


[*] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


Review Period for such Permitted Antigen, and shall expire upon the first anniversary of such date, unless earlier terminated by JTI by written notice to ABX.


3.3.2 EXCLUSIVITY. During the term of an Option with respect to a Product Antigen, ABX shall not, itself or through a Third Party, cause or allow any Impediment described in Section 3.2.2 above to arise with respect to such Product Antigen.


3.3.3 EFFECT OF EXPIRATION OF OPTION. If an Option with respect to a Product Antigen expires or terminates prior to JTI's exercise of an Option under Section 3.4 with respect to such Product Antigen, then: (a) such Product Antigen shall cease to be a Product Antigen for purposes of this Agreement, (b) JTI shall have no right to exercise its Option for such Product Antigen (unless re-nominated as provided in the following sentence), and (c) ABX shall have no further obligations to JTI with respect to such Product Antigen. If the term of an Option for a Product Antigen expires during the term of this Agreement, then JTI shall have the right to nominate such former Product Antigen again to obtain an Option therefor on the terms and conditions of this Agreement by following the Product Antigen designation procedures set forth in Section 3.2; PROVIDED THAT any such Option that JTI obtains for a Product Antigen for which its Option expired or terminated previously shall be counted as one of the [*] under Section 3.1.


3.4 EXERCISE. JTI may exercise each of its Options in accordance with the following provisions:


3.4.1 EXERCISE NOTICE; TIMING OF NOTICE. JTI may exercise each Option at any time during the term of such Option by giving ABX express written notice stating that JTI is exercising such Option (the "Exercise Notice").


3.4.2 PRODUCT LICENSE AGREEMENT. Within thirty (30) business days after ABX receives the Exercise Notice for an Option, ABX and JTI shall enter into a Product License Agreement with respect to the applicable Product Antigen. ABX shall invoice JTI for the License Fee due therefor on or following the date that such Product License is so executed, and JTI shall pay such invoice within thirty (30) days of receipt. If JTI fails to timely pay to ABX the License Fee for such Product License Agreement (subject to any applicable cure provision), then the applicable Product License Agreement shall terminate and ABX shall have no further obligation to JTI regarding such Product License Agreement or such Product Antigen.


4. CONSIDERATION


4.1.1 PAYMENT. JTI shall pay to ABX four m ...