Non-exclusive License And Research Collaboration Agreement

Exhibit 10.1


[Confidential Portions Omitted]


NON-EXCLUSIVE LICENSE AND RESEARCH COLLABORATION AGREEMENT


by and between


MERCK & CO., INC.


and


GENETRONICS BIOMEDICAL CORPORATION


and


GENETRONICS, INC.


*Confidential portion omitted and filed separately with the Commission.


TABLE OF CONTENTS


1.

DEFINITIONS


2.

RESEARCH PROGRAM


2.1

General


2.2

Conduct of Collaboration


2.3

Use of Collaboration Funding


2.4

Joint Collaboration Committee


2.5

Exchange of Information


2.6

Records and Reports


2.7

Collaboration Information and Inventions


2.8

Collaboration Term


2.9

Materials


3.

LICENSE; EXCHANGE OF INFORMATION; DEVELOPMENT AND COMMERCIALIZATION


3.1

License Grant


3.2

Trademark License


3.3

Supply of Genetronics Device


3.4

No Implied Licenses


4.

CONFIDENTIALITY AND PUBLICATION


4.1

Nondisclosure Obligation


4.2

Publication


4.3

Publicity/Use of Names


5.

PAYMENTS; ROYALTIES AND REPORTS


5.1

License Fee


5.2

Collaboration Funding


5.3

Milestone Payments


5.4

Royalties


5.5

Reports; Payment of Royalty


5.6.

Audits


5.7

Payment Exchange Rate


5.8

Income Tax Withholding


6.

REPRESENTATIONS AND WARRANTIES


6.1

Representations and Warranties of Genetronics


6.2

Representations and Warranties of Merck


6.3

Indemnification


6.4

Claims Procedures.


6.5

Limited Liability


7.

REGULATORY AFFAIRS


7.1

Regulatory Approvals


7.3

Medical Inquiries


7.4

Adverse Experience and Reaction Reporting


8.

PATENT PROVISIONS


8.1

Filing, Prosecution and Maintenance of Patents


8.2

Interference, Opposition, Reexamination and Reissue


8.3

Enforcement and Defense


8.4

Patent Term Restoration


9.

TERM AND TERMINATION


9.1

Term and Expiration


9.2

Termination Without Cause


9.3

Termination for Cause


9.4

Effect of Expiration or Termination; Survival


10.

MISCELLANEOUS


10.1

Force Majeure


10.2

Assignment/ Change of Control


10.3

Severability


10.4

Notices


10.5

Applicable Law


10.6

Dispute Resolution


10.7

Entire Agreement; Amendments


10.8

Headings


10.9

Independent Contractors


10.10

Waiver


i


10.11

Cumulative Remedies


10.12

Waiver of Rule of Construction


10.13

Counterparts


SCHEDULE 1.29

GENETRONICS PATENT RIGHTS


SCHEDULE 3.3

SUPPLY OF GENETRONICS DEVICES


SCHEDULE 4.3

PRESS RELEASE


ii


NON-EXCLUSIVE LICENSE AND RESEARCH COLLABORATION AGREEMENT


THIS AGREEMENT, effective as of the date that the Agreement is last signed by both Parties (the "Effective Date"), by and between Merck & Co., Inc., a corporation organized and existing under the laws of New Jersey, with an address at One Merck Drive, Whitehouse Station, NJ 08889-0100 ("Merck"), on the one hand, and Genetronics Biomedical Corporation, a corporation organized and existing under the laws of Delaware, ("GBC") and Genetronics, Inc., a corporation organized and existing under the laws of the state of California ("GI"), on the other hand, each with an address at 11199 Sorrento Valley Road, San Diego, CA 92121-1334, United States of America (GEB and GI shall be known together as "Genetronics").


RECITALS :


WHEREAS , Genetronics has developed or otherwise Controls Genetronics Technology (as hereinafter defined) and has rights to Genetronics Patent Rights (as hereinafter defined);


WHEREAS , Merck and Genetronics desire to enter into a collaboration to develop Genetronics Device(s) and Merck Product(s) in the Field upon the terms and conditions set forth herein;


WHEREAS , Merck desires to obtain a license under the Genetronics Patent Rights and Genetronics Technology, upon the terms and conditions set forth herein and Genetronics desires to grant such a license;


NOW, THEREFORE , in consideration of the foregoing premises and the mutual covenants herein contained, the Parties hereby agree as follows:


1. DEFINITIONS Unless specifically set forth to the contrary herein, the following terms, whether used in the singular or plural, shall have the respective meanings set forth below:


1.1 "Act" shall mean, as applicable, the United States Federal Food, Drug and Cosmetic Act, 21 U.S.C. a7a7 301 et seq., and/or the Public Health Service Act, 42 U.S.C. a7a7 262 et seq., as such may be amended from time to time.


1.2 "Additional Antigen" shall mean an Antigen other than an Initial Antigen, and any Constructs thereof, in each case in the Field.


1.3 "Affiliate" shall mean (i) any corporation or business entity of which fifty percent (50%) or more of the securities or other ownership interests representing the equity, the voting stock or general partnership interest are owned, controlled or held, directly or indirectly, by Merck or Genetronics; or (ii) any corporation or business entity which, directly or indirectly, owns, controls or holds fifty percent (50%) (or the maximum ownership interest permitted by law) or more of the


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securities or other ownership interests representing the equity, the voting stock or, if applicable, the general partnership interest, of Merck or Genetronics.


1.4 "Animal Indication" shall mean an Indication for the treatment and/or prevention of disease(s) or medical condition(s) in animals other than humans.


1.5 "Antigen" shall mean a distinct and uniquely identifiable macromolecular species that is capable, under appropriate conditions, of inducing a specific immune response.


1.6 "Calendar Quarter" shall mean the respective periods of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31.


1.7 "Calendar Year" shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31.


1.8 "Clinical Trial" shall mean a Phase I Clinical Trial, Phase II Clinical Trial and/or Phase III Clinical Trial.


1.9 "Collaboration Term" shall mean the duration of the Collaboration, as described more fully in Section 2.8.


1.10 "Collaboration" shall mean the research and development activities undertaken by the Parties relating to the Genetronics Device as set forth in Article 2.


1.11 "Committee" shall mean the joint collaboration committee established to facilitate the Collaboration, as more fully described in Section 2.4.1.


1.12 "Confidential Information" shall mean any and all information and data, including without limitation all Merck Know-How, Genetronics Technology, and all other scientific, pre-clinical, clinical, regulatory, manufacturing, marketing, financial and commercial information or data, whether communicated in writing or orally or by any other method, which is provided by one Party to the other Party in connection with this Agreement.


1.13 " Constructs" shall mean any post-translational modifications or variants of the Antigen, and any proteins, protein-constructs, or other immunogens derived from an Antigen.


1.14 "Control", "Controls" or "Controlled by" shall mean with respect to any item of or right under Genetronics Patent Rights or Genetronics Technology or Merck Know-How, the possession of (whether by ownership or license, other than pursuant to this Agreement), or the ability of a Party to grant access to, or a license or sublicense of, such item or right as provided for herein without violating the terms of any agreement or other arrangement with any Third Party existing at the time such Party would be required hereunder to grant the other Party such access or license or sublicense. For avoidance of doubt, patent rights and know-how Controlled by Genetronics Biomedical Corporation shall be deemed to be Genetronics Patent Rights and Genetronics Technology "Controlled" by Genetronics.


1.15 "Derived" or "derived" shall mean obtained, created, synthesized or otherwise generated from, or discovered, designed or developed using.


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1.16 "Device Custom Know-How" shall mean the Merck Specifications for the Genetronics Applicator and/or Genetronics Custom Components, any materials used solely pursuant to Merck Specifications to develop and/or manufacture the Genetronics Applicator and/or Genetronics Custom Components (including blanks used for manufacture of the Genetronics Applicator and/or Genetronics Custom Components), and any enhancements and/or modifications to the Genetronics Applicator and/or Genetronics Custom Components developed solely pursuant to Merck Specifications (and not used more generally by Genetronics in any products for other customers), in each case for which Genetronics' design and development costs are funded by Merck as part of the Collaboration


1.17 "Expiration" of the Agreement shall have the meaning provided for in Section 9.1.


1.18 "Field" shall mean the Genetronics Device-assisted delivery of a DNA vaccine for prophylactic and/or therapeutic use in diseases or medical conditions in animals or humans involving [*]. For avoidance of doubt, the Field does not include diseases or medical conditions outside (i) or (ii) above, and would not, for example, include prevention and/or treatment [*], but would include, for example, [*].


1.19 "Filing" of an IND or NDA shall mean the acceptance by a Regulatory Authority of an IND or NDA for filing.


1.20 "First Commercial Sale" shall mean, with respect to any Merck Product, the first sale for end use or consumption of such Merck Product in a country, excluding, however, any sale or other distribution for use in a Clinical Trial.


1.21 "Full Time Equivalent" or "FTE" shall mean the equivalent of a full-time scientist's or consultant's work time over a twelve-month period (including an allocation for normal vacations, sick days and holidays). The portion of an FTE year devoted by a scientist or consultant to the Collaboration shall be determined by dividing the total number of hours during any twelve-month period devoted by such employee to the Collaboration by 1880.


1.22 "Genetronics Applicator" shall mean a product for which the design and development costs are funded by Merck as part of the Collaboration (including any custom software designed for use with a Merck Product), which product is designed for use solely with the Genetronics Generator (and, if applicable the Genetronics Custom Components) and the Merck Product, and which product is intended to be disposed of after one administration to a patient of a Merck Product, or after a defined number of such administrations of Merck Product.


1.23 "Genetronics Custom Components" shall mean a product for which the design and development costs are funded by Merck as part of the Collaboration (including any custom software designed for use with a Merck Product), which product is designed for use solely with the Genetronics Generator, Genetronics Applicator and the Merck Product, which product is not intended to be disposed of after one administration to a patient of a Merck Product, or after a defined number of such administrations of Merck Product.


1.24 "Genetronics Device" shall mean, the Genetronics Applicator, Genetronics Custom Components, and/or Genetronics Generator (we should check to be consistent throughout in use of the term device as the collective equipment).


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1.25 "Genetronics Generator" shall mean an electroporation device, including any software that is not custom designed for use with a Merck Product, for which the manufacture and/or use with Merck Products in the Field would infringe the Genetronics Patent Rights or utilize the Genetronics Technology, including but not limited to generation equipment.


1.26 "Genetronics Device Modification" shall mean any enhancement or modification, whether or not patentable, in the design, manufacture and parameters of the Genetronics Device. Device Custom Know-How shall not be deemed to be Genetronics Device Modifications to the extent that the same are designed and developed solely pursuant to Merck Specifications, are for use solely with a Merck Product, and the cost of design and development was funded by Merck as part of the Collaboration.


1.27 "Genetronics Information and Inventions" shall mean all protocols, formulas, data, Inventions, know-how and trade secrets, patentable or otherwise, resulting from the Collaboration developed or invented solely by employees of Genetronics or other persons not employed by Merck acting on behalf of Genetronics, but not including any Target Antigen or Target Antigen Modification.


1.28 "Genetronics Intellectual Property" shall mean Genetronics Patent Rights and Genetronics Technology.


1.29 "Genetronics Patent Rights" shall mean any and all patents and patent applications in the Territory (which for the purposes of this Agreement shall be deemed to include certificates of invention and applications for certificates of invention) which are Controlled by Genetronics during the Term, including, but not limited to, those listed on Schedule 1.29, which: (i) have been filed as of the Effective Date or are filed during the Collaboration Term and contain applicable claims to the Field, the practice of which would but for a license thereto comprise an infringement, or otherwise claim administration of vaccines by means of or with the assistance of electroporation; or (ii) claim or cover Genetronics Device Modifications, Genetronics Information and Inventions or Joint Information and Inventions; or (iii) are divisions, continuations, continuations-in-part, reissues, renewals, extensions, supplementary protection certificates, and the like of any such patents and patent applications, and any foreign equivalents thereof.


1.30 "Genetronics Technology" shall mean (a) Genetronics Information and Inventions, Genetronics' rights in Joint Information and Inventions, the Genetronics Device, Device Modifications, and Device Custom Know-How; and (b) any and all information and materials (including any Target Antigen Modifications provided by Genetronics to Merck), discoveries, improvements, processes, methods, protocols, formulas, data, inventions, know-how and trade secrets, patentable or otherwise, which are (i) Controlled by Genetronics as of the Effective Date and which are necessary or useful to Merck in the administration of Merck Products by means of or with the assistance of electroporation (including but not limited to all electroporation equipment, designs thereof, and methods of use thereof, electroporation parameters provided to Merck by Genetronics, and proprietary know-how of Genetronics for gene delivery into tissues using Genetronics electroporation equipment) and (ii) either trade secrets of Genetronics or comprise a parameter claimed under Genetronics Patent Rights.


1.31 "GLP" or "Good Laboratory Practice" shall mean the applicable then-current standards for laboratory activities for pharmaceuticals or biologicals, as set forth in the Act and any regulations or guidance documents promulgated thereunder, as amended from time to time, together with any


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similar standards of good laboratory practice as are required by any Regulatory Authority in the Territory.


1.32 "IND" shall mean an Investigational New Drug application, Clinical Study Application, Clinical Trial Exemption, or similar application or submission for approval to conduct human clinical investigations of a Merck Product filed with or submitted to a Regulatory Authority in conformance with the requirements of such Regulatory Authority.


1.33 "Indication" shall mean the primary prophylactic and/or therapeutic purpose for which the Merck Product is developed specifically directed towards obtaining regulatory approval for use of such Merck Product pursuant to an approved label claim. A single Indication shall include the primary disease and variants or sub-divisions or sub-classifications within such primary disease. For example, for purposes of the Agreement, [*] is a single Indication; treatment of and first line treatment of [*] shall be treated as sub-classifications within the single Indication of [*]. Treatment and prophylaxis of the same disease (e.g. [*]) shall be treated as the same Indication. However, treatment of any other type of [*], shall be deemed a different Indication from a [*] Indication. By analogy, a vaccine administered for different Indications (e.g. [*] for [*]) would be treated as different Indications.


1.34 "Initial Antigen(s)" shall mean [*].


1.35 "Invention" shall mean any process, method, composition of matter, article of manufacture, discovery or finding that is conceived and/or reduced to practice as a result of the Collaboration.


1.36 "Joint Information and Inventions" shall mean all protocols, formulas, data, Inventions, know-how and trade secrets, patentable or otherwise, resulting from the Collaboration developed or invented jointly by employees of Merck and Genetronics or others acting on behalf of Merck and Genetronics, but not including Genetronics Device Modifications or Device Custom Know-How, the Genetronics Generator, Genetronics Applicator, Genetronics Custom Components or the Genetronics Device (which shall be owned by Genetronics pursuant to Section 2.7(a)), or Target Antigens or Target Antigen Modifications (which shall be owned by Merck pursuant to Section 2.7(b)).


1.37 "Major Market" shall mean any one of the following countries: United States, Japan, the United Kingdom, France, Germany, Italy or Spain, provided, however, that where a milestone relates to a Filing with or Marketing Authorization by a Major Market country governed by a supranational body, such as the EMEA in the case of the European Union countries, the occurrence of said milestone for that Major Market shall refer to the occurrence of the milestone at the supranational level.


1.38 "Marketing Authorization" shall mean all approvals from the relevant Regulatory Authority necessary to market and sell a Merck Product in any country (including without limitation, all applicable pricing and governmental reimbursement approvals even if not legally required to sell Merck Product in a country).


1.39 "Merck Information and Inventions" shall mean all protocols, formulas, data, Inventions, know-how and trade secrets, patentable or otherwise, resulting from the Collaboration developed or invented solely by employees of Merck or other persons not employed by Genetronics acting on behalf of Merck, but not including (i) Genetronics Device Modifications or Device Custom Know-How or (ii) any Genetronics Intellectual Property falling under subsection (b) of "Genetronics Technology," as defined herein.


1.40 "Merck Know-How" shall mean any information and materials, including but not limited to discoveries, improvements, processes, methods, protocols, formulas, data, inventions (including


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without limitation Merck's Information and Inventions and Merck's rights in Joint Information and Inventions), know-how and trade secrets, patentable or otherwise (but expressly excluding Genetronics Intellectual Property, including but not limited to the Genetronics Device, Genetronics Device Modifications and Device Custom Know-How), which, during the term of this Agreement, (i) are in Merck's possession or control and (ii) are not generally known.


1.41 "Merck Product(s )" shall mean any pharmaceutical or biological preparation which (i) contains a nucleic acid sequence encoding a Target Antigen or Target Antigen Modification or encoding any additional elements that facilitate an immune response to such Target Antigen or Target Antigen Modification; and (ii) is utilized in conjunction with a Genetronics Device, which preparation is either for sale by prescription, over-the-counter or any other method, or for administration to patients in Clinical Trials, or for administration to animals for the purpose of developing such preparation for animal use, for any and all uses in the Field. Each Merck Product containing nucleic acid sequences encoding for the same Target Antigen or unique combination of Target Antigens shall be deemed to be the same Merck Product, regardless of the formulation or other clinically active components contained in such Merck Product. By way of example, a Merck Product containing nucleic acids encoding for both [*] and [*] shall be deemed to be one Merck Product.


1.42 "Merck Specifications" shall mean those particular Specifications established pursuant to the Collaboration that are established by the Committee and are designed to uniquely distinguish a feature of the Genetronics Applicator and/or the Genetronics Custom Components from features similar in design or function developed or used by Genetronics in products for other Genetronics customers.


1.43 "NDA" shall mean a New Drug Application, Biologics License Application, Worldwide Marketing Application, Marketing Application Authorization, or similar application or submission for Marketing Authorization of a Merck Product filed with a Regulatory Authority to obtain marketing approval for a biological or pharmaceutical product in that country or in that group of countries.


1.44 "Net Sales" shall mean, with respect to any subject sale, the gross invoice price of Merck Product sold by Merck or its Related Parties to the first Third Party after deducting, if not previously deducted, from the amount invoiced or received:


(a) trade and quantity discounts other than early pay cash discounts;


(b) returns, rebates, chargebacks and other similar allowances;


(c) retroactive price reductions that are actually allowed or granted;


(d) sales commissions paid to Third Party distributors and/or selling agents;


(e) a fixed amount equal to [*] of the amount invoiced to cover bad debt, sales or excise taxes, early payment cash discounts, transportation and insurance, custom duties, and other governmental charges; and


(f) the standard inventory cost of devices or delivery systems used for dispensing or administering Merck Product, other than the Genetronics Device.


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1.45 "Option" shall have the meaning set forth in Section 3.1.2.


1.46 "Party" shall mean Merck and Genetronics, individually, and "Parties" shall mean Merck and Genetronics, collectively.


1.47 "Phase I Clinical Trial" shall mean a human clinical trial in any country for a Merck Product that would satisfy the requirements of 21 CFR Part 312.21(a).


1.48 "Phase II Clinical Trial" shall mean a human clinical trial in any country for a Merck Product that would satisfy the requirements of 21 CFR Part 312.21(b).


1.49 "Phase III Clinical Trial" shall mean a human clinical trial in any country for a Merck Product that would satisfy the requirements of 21 CFR Part 312.21(c).


1.50 "Regulatory Authority" shall mean any applicable government regulatory authority involved in granting approvals for the manufacturing, marketing, reimbursement and/or pricing of a Merck Product in the Territory, including, in the United States, the United States Food and Drug Administration and any successor governmental authority having substantially the same function.


1.51 "Related Party" shall mean each of Merck, its Affiliates, and their respective sublicensees (which term does not include distributors), as applicable.


1.52 "Specifications" shall mean the specifications for the Genetronics Device, generally, including electrical parameters.


1.53 "Supply Agreement" shall mean an agreement for the exclusive supply of Genetronics Generators, Genetronics Custom Components and Genetronics Applicators by Genetronics to Merck during the Term, entered into pursuant to procedures set forth in Section 3.3, and prior to the execution and delivery of such separate agreement, shall mean the terms set forth in Schedule 3.3 and incorporated into this Agreement.


1.54 "Target Antigen" shall mean, as applicable, an Initial Antigen or, upon exercise of the Option by Merck for a particular Additional Antigen, an Additional Antigen.


1.55 "Target Antigen Modification" shall mean any enhancement or modification, whether or not patentable, of a Target Antigen, including but not limited to any Constructs thereof.


1.56 "Term" shall have the meaning set forth in Section 9.1.


1.57 "Territory" shall mean all of the countries in the world, and their territories and possessions.


1.58 "Third Party" shall mean an entity other than Merck and its Related Parties, Genetronics and its Affiliates.


1.59 "Valid Patent Claim" shall mean a claim of an issued and unexpired patent included within the Genetronics Patent Rights (including extensions and/or restorations thereof), which claim has not been revoked or held unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction (which decision is not appealable or has not been appealed within the time allowed for appeal), and which claim has not been disclaimed, denied or admitted


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to be invalid or unenforceable through reissue, re-examination or disclaimer or otherwise. ...