Collaboration Agreement

COLLABORATION AGREEMENT
(K-ras PRODUCTS)


BY AND BETWEEN


RHONE-POULENC RORER PHARMACEUTICALS, INC.


AND


INTROGEN THERAPEUTICS, INC.


OCTOBER 7, 1994


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TABLE OF CONTENTS


PAGE
---- 1. DEFINITIONS....................................................... 1


2. NORTH AMERICAN DEVELOPMENT........................................ 5
2.1 Early Stage Development Program........................ 5
2.2 Collaboration Products................................. 5
2.3 Development Activities................................. 5
2.4 Reports and Records.................................... 6
2.5 Review of Publication.................................. 7


3. DEVELOPMENT COMMITTEE............................................. 8
3.1 Development Committee.................................. 8
3.2 Membership............................................. 8
3.3 Development Committee Meetings......................... 8
3.4 North American Plans and Budgets....................... 8
3.5 Plans for Later Stage Development...................... 9
3.6 Decision Making........................................ 9


4. EARLY STAGE DEVELOPMENT PROGRAM FUNDING........................... 10
4.1 Funding of Early Stage Development Program............. 10
4.2 Term of Early Stage Development Program................ 10
4.3 Excess Early Stage Development Program Costs........... 10
4.4 Capital Equipment...................................... 10
4.5 Payments............................................... 10
5.1 RPRP Territory......................................... 11
5.2 Co-Exclusive Territory................................. 11
5.3 Other Territory........................................ 11
5.4 Use of Clinical Data................................... 11
5.5 Development Committee Review........................... 12
5.6 Further Studies........................................ 12


6. EXCLUSIVITY....................................................... 12
6.1 Option to Commercialize................................ 12
6.2 Exclusivity............................................ 13
6.3 Right of First Discussion in Expanded Field............ 13


7. MARKETING RIGHTS.................................................. 13
7.1 RPRP Territory......................................... 13
7.2 Co-Exclusive Territory................................. 13
7.3 North America.......................................... 14
7.4 Other Territory........................................ 14


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TABLE OF CONTENTS
(CONTINUED)


PAGE
----
7.5 Sublicensees........................................... 15
7.6 Covenants.............................................. 15


8. ROYALTIES......................................................... 15
8.1 Running Royalties...................................... 15
8.2 Royalty Offset......................................... 15


9. THIRD PARTY ROYALTIES............................................. 17
9.1 RPRP Obligations....................................... 17
9.2 Introgen Obligations................................... 18
9.3 North America.......................................... 18
9.4 Efforts to Obtain Sublicense Rights.................... 18


10. PAYMENTS; BOOKS AND RECORDS....................................... 18
10.1 Royalty Reports and Payments........................... 18
10.2 Payment Method......................................... 19
10.3 Late Payment........................................... 19
10.4 Currency Conversion.................................... 19
10.5 No Withholding Taxes................................... 19
10.6 Records; Inspection.................................... 19


11. DUE DILIGENCE..................................................... 20
11.1 Due Diligence.......................................... 20


12. MANUFACTURING RIGHTS.............................................. 20
12.1 RPRP Territory......................................... 20
12.2 Co-Exclusive Territory................................. 20
12.3 North America.......................................... 20
12.4 Other Territory........................................ 21
12.5 Supply Agreements...................................... 21


13. LICENSE GRANTS.................................................... 21
13.1 Grant to RPRP.......................................... 21
13.2 Grant to Introgen...................................... 21
13.3 Grant to Joint Venture................................. 21
13.4 Sublicenses............................................ 21
13.5 Improvements by Introgen............................... 22
13.6 No Rights Beyond Collaboration Products................ 22


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TABLE OF CONTENTS
(CONTINUED)


PAGE
---- 14. INTELLECTUAL PROPERTY............................................. 22
14.1 Ownership of Inventions................................ 22
14.2 Patent Prosecution..................................... 23
14.3 Defense of Third Party Infringement Claims............. 24
14.4 Enforcement............................................ 24


15. REPRESENTATIONS AND WARRANTIES.................................... 25
15.1 Warranties............................................. 25
15.2 Disclaimer of Warranties............................... 25
15.3 Effect of Representations and Warranties............... 26


16. CONFIDENTIALITY................................................... 26
16.1 Confidential Information............................... 26
16.2 Permitted Disclosures.................................. 26


17. INDEMNIFICATION................................................... 27
17.1 Indemnification of Introgen............................ 27
17.2 Indemnification of RPRP................................ 27
17.3 Procedure.............................................. 28


18. TERM AND TERMINATION.............................................. 28
18.1 Term................................................... 28
18.2 Termination for Cause.................................. 28
18.3 Termination for Convenience by RPRP.................... 28
18.4 Effect of Breach or Termination........................ 29
18.5 Survival............................................... 30


19. MISCELLANEOUS..................................................... 30
19.1 Governing Law.......................................... 30
19.2 Force Majeure.......................................... 30
19.3 No Implied Waivers; Rights Cumulative.................. 30
19.4 Independent Research................................... 31
19.5 Independent Contractors................................ 31
19.6 Notices................................................ 31
19.7 Assignment............................................. 32
19.8 Modification........................................... 32
19.9 Severability........................................... 32
19.10 Non-Disclosure......................................... 32
19.11 Entire Agreement....................................... 32
19.12 Counterparts........................................... 33


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TABLE OF CONTENTS
(CONTINUED)


19.13 Headings............................................... 33
19.14 Patent Marking......................................... 33
19.15 Export Laws............................................ 33


EXHIBITS


A - Existing Introgen Licensed Patents


B - European Countries


C - Initial Program Plan and Budget


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COLLABORATION AGREEMENT
(K-Ras PRODUCTS)


This AGREEMENT (the "Agreement"), effective as of October 7, 1994 (the "Effective Date"), is made by and between Rhone-Poulenc Rorer Pharmaceuticals Inc., a Pennsylvania corporation having offices at 500 Arcola Road, P.O. Box 1200, Collegeville, Pennsylvania 19426-0107 ("RPRP"), and Introgen Therapeutics, Inc., a Delaware corporation having offices at 301 Congress Avenue, Suite 2025, Austin, Texas 78701 ("Introgen").


RECITALS


A. Introgen has established expertise related to gene therapy and RPRP has established a major research program in the field of gene therapy for the treatment of human cancer.


B. The parties desire to establish a collaborative relationship to develop and commercialize novel gene therapy products as set forth below.


C. Introgen and RPRP's parent, Rhone-Poulenc Rorer Inc., have also entered into a Stock Purchase Agreement of even date herewith, pursuant to which RPRP is acquiring Introgen Preferred Stock.


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:


1. DEFINITIONS


1.1 "Affiliate" shall mean any entity which controls, is controlled or is under common control with RPRP or Introgen. An entity shall be regarded as in control of another entity if it owns or controls at least thirty-five percent (35%) of the shares of the subject entity entitled to vote in the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority). A "Controlled Affiliate" shall mean an entity that is controlled by a party wherein such percentage is at least fifty percent (50%).


1.2 "Co-exclusive Territory" shall mean Japan, North and South Korea, Taiwan, the People's Republic of China and India.


1.3 "Collaboration Products" shall mean the gene therapy products within the Field which are being developed by Introgen and RPRP from time to time pursuant to the Early Stage Development Program, as specified in the Program Plan and Budget in effect at the time, and as further defined in Section 6.1 below. 7
1.4 "Development Committee" shall have the meaning set forth in Article 3 herein.


1.5 "Early Stage Development" shall mean that part of the Early Stage Development Program comprising the research, preclinical and clinical activities with respect to approved Collaboration Products in North America through the completion of Phase I clinical trials.


1.6 "Early Stage Development Program" shall have the meaning set forth in Section 2.1 herein.


1.7 "Early Stage Development Program Costs" shall mean all direct and indirect costs incurred by Introgen in conducting the Early Stage Development Program in accordance with the applicable approved Program Plan and Budget.


1.8 "Expanded Field" shall mean gene therapy products which [*]


1.9 "Field" shall mean gene therapy products for the delivery of a gene construct to patient cells via in vivo viral vectors or non-viral delivery systems which expresses a molecule that [*] in each case for the treatment or prevention of disease.


1.10 "FDA" means the U.S. Food and Drug Administration.


1.11 "IND" shall mean an investigational New Exemption for a Collaboration Product, as defined in the U.S. Food, Drug and Cosmetic Act and the regulations promulgated thereunder.


1.12 "Introgen Technology" shall mean Introgen Patents, Introgen Licensed Patents and Introgen Know-how.


1.12.1 "Introgen Patents" shall mean all patents and reissues, renewals and extensions thereof, and patent applications therefor, and any divisions, continuations, in whole or in part, thereof, which claim a process, composition of matter, or method of treatment used in the manufacture, sale or use of a Collaboration Product and that are owned by Introgen or its Controlled Affiliates during the term of this Agreement.


1.12.2 "Introgen Know-How" shall mean confidential information and materials, including, but not limited to, pharmaceutical, chemical, biological and biochemical products, technical and non-technical data, and information relating to the results of tests, assays, methods and processes, and drawings, plans, diagrams, specifications and/or other documents containing said information and data, discovered, developed or acquired by Introgen or its Controlled Affiliates during the term of this Agreement to the extent such relates to the manufacture, sale or use of a Collaboration Product and to the extent that Introgen or its Controlled Affiliates have the right to license or sublicense the same.


1.12.3 "Introgen Licensed Patents" shall mean all patents and reissues, renewals and extensions thereof, and patent applications therefor, and any divisions, continuations, in whole or in part, thereof, which claim a process, composition of matter, or method of treatment used in the


[*] Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.


-2- 8 manufacture, sale or use of a Collaboration Product, that are the subject of a license or license option to Introgen or its Controlled Affiliates, in each case to the extent that Introgen or its Controlled Affiliate has the right to license or sublicense the same during the term of this Agreement. Introgen Licensed Patents as of the Effective Date are listed on attached Exhibit A.


1.13 "Joint Venture" shall have the meaning set forth in Section 7.3.1 of this Agreement.


1.14 "Later Stage Clinical Development" shall mean all clinical research and regulatory affairs necessary to obtain all governmental approvals required to market each Collaboration Product for a particular indication in North America following the Early Stage Development for such Collaboration Product for such indication.


1.15 "Manufacturing Costs" with respect to units of a Collaboration Product means (i) those costs associated with manufacture of such units which would be viewed by the manufacturing party's independent auditor as costs that could be capitalized on the balance sheet as inventory and would include all raw material (including normal scrap) and actual direct labor costs and a proper accounting of actual manufacturing overhead allocated to such units. It would exclude any excess capacity, excess direct labor inefficiencies, unusable material, or any other costs related to such units not deemed to add value or not deemed to be ongoing in the production process for such product; and (ii) with respect to portions acquired from a non-Affiliate vendor, the amounts paid to the vendor.


1.16 "Net Sales" shall mean the total amount invoiced to third parties in connection with sales or use of Collaboration Products by RPRP, its Affiliates or its permitted Sublicensees, less the following reasonable and customary accrual-basis deductions to the extent applicable to such invoiced amounts in accordance with U.S. generally accepted accounting practices, as consistently applied by both RPRP and RPR Inc. for financial reporting purposes: (i) all trade, cash and quantity credits, discounts, refunds or rebates (including without limitation Medicaid rebates); (ii) amounts for claims, allowances or credits for returns; retroactive price reductions; chargebacks; and (iii) packaging, handling fees and prepaid freight, sales taxes, duties and other governmental charges (including value added tax), but excluding what is commonly known as income taxes), in each case if charged separately on the invoice and paid by the customer. For the removal of doubt, Net Sales shall not include sales by RPRP to its Affiliate or its permitted Sublicensees for resale. A "sale" shall also include a transfer or other disposition for consideration other than cash, in which case such consideration shall be valued at the fair market value thereof. Transfers or dispositions for charitable or promotional purposes or for pre-clinical, clinical, regulatory or governmental purposes prior to receiving marketing approval are not considered a "sale;" provided that such transfers or dispositions are at a price less than [*] RPRP's Manufacturing Cost for the units so transferred or disposed.


1.17 "North America" shall mean Canada, the United States (and its territories and possessions including the commonwealth of Puerto Rico) and Mexico.


[*] Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.


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1.18 "PLA" and "ELA" means a Product License Application and an Establishment License Application, respectively, as defined in the Public Health Service Act, Biological Products and the regulations promulgated thereunder, viz. 21 CFR Part 600, or its foreign equivalents.


1.19 "Phase I" means Phase I clinical trials as prescribed by applicable FDA Regulations.


1.20 "Product Plan and Budget" shall have the meaning set forth in Section 3.4.2 below.


1.21 "Program Plan and Budget" shall have the meaning set forth in Section 3.4.1 hereof.


1.22 "RPR Inc." shall mean Rhone-Poulenc Rorer, Inc., a Pennsylvania Corporation.


1.23 "RPRP Development Costs" shall have the meaning set forth in Section 7.3.3 below.


1.24 "RPRP Technology" shall mean RPRP Patents, RPRP Licensed Patents and RPRP know-how.


1.24.1 "RPRP Patents" shall mean all patents and reissues, renewals and extensions thereof, and patent applications therefor, and any divisions, continuations, in whole or in part, thereof, which claim a process, composition of matter, or method of treatment used in the manufacture, sale or use of a Collaboration Product and that are owned by RPRP, RPR Inc. or their Controlled Affiliates during the term of this Agreement.


1.24.2 "RPRP Know-How" shall mean confidential information and materials, including, but not limited to, pharmaceutical, chemical, biological and biochemical products, technical and non-technical data, and information relating to the results of tests, assays, methods and processes, and drawings, plans, diagrams, specifications and/or other documents containing said information and data, discovered, developed or acquired by RPRP or its Controlled Affiliates during the term of this Agreement to the extent such relates to the manufacture, sale or use of a Collaboration Product and to the extent that RPRP, RPR Inc. or their Controlled Affiliates have the right to license or sublicense the same.


1.24.3 "RPRP Licensed Patents" shall mean all patents and reissues, renewals and extensions thereof, and patent applications therefor, and any divisions, continuations, in whole or in part, thereof, which claim a process, a composition of matter, or method of treatment used in the manufacture, sale or use of a Collaboration Product, that are the subject of a license or license option to RPRP, RPR Inc. or their Controlled Affiliates and to the extent that RPRP, RPR Inc. or their Controlled Affiliates have the right to license or sublicense the same during the term of this Agreement.


1.25 "RPRP Territory" means those Eastern and Western European countries set forth on Exhibit B hereto.


1.26 "Other Territory" shall mean [*]


[*] Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has been
requested with respect to the omitted portions.


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1.27 "Sublicensee" shall mean, with respect to a particular Collaboration Product, a third party to whom Introgen or RPRP has granted a license or sublicense under the RPRP Technology and/or Introgen Technology to make, use and sell such Collaboration Product. As used in this Agreement, "Sublicensee" shall also include a third party to whom Introgen or RPRP has granted the right to distribute such Collaboration Product, provided that such third party is responsible for the marketing and promotion of such products within the applicable territory.


1.28 "Term of the Early Stage Development Program" shall be that period of time described in Section 4.2 below.


2. NORTH AMERICAN DEVELOPMENT


2.1 Early Stage Development Program. Subject to the terms and conditions set forth herein, RPRP and Introgen shall cooperate with respect to the Early Stage Development of Collaboration Products in accordance with an "Early Stage Development Program" for North America which shall be carried out in accordance with a Program Plan and Budget prepared and approved on an annual basis in accordance with Article 3.4 hereof. The Early Stage Development Program shall include all of the approved Program Plans and Budgets in effect from time to time. The activities conducted in connection with the Early Stage Development Program will be overseen and administered by the Development Committee, pursuant to Article 3 below. Introgen shall use its best efforts to conduct the Early Stage Development in accordance with such Program Plan and Budget and within the time schedules contemplated therein.


2.2 Collaboration Products. The Initial Collaboration Products to be developed hereunder will contain or employ Introgen's Retroviral K-ras related Transduction Vector and/or its Adenoviral K-ras related Transduction Vector. From time to time, upon agreement of RPRP and Introgen, new projects may be added to the Early Stage Development Program to be developed as Collaboration Products. Such projects may include RPRP or Introgen products. It is understood that RPRP may terminate its support for the development for any Collaboration Product as provided in Section 18.3.2 below or as otherwise agreed by the parties.


2.3 Development Activities.


2.3.1 Early Stage Development Program. Introgen will be responsible for conducting, directly or through third parties, all development of each new project and each Collaboration Product in North America through the completion of Early Stage Development in accordance with the Program Plan and Budget in effect from time to time. As soon as possible after completion of the necessary preclinical studies required by the applicable Product Plan and Budget for a Collaboration Product, Introgen shall be responsible for preparing, with the cooperation of RPRP, a data package for each Collaboration Product sufficient to meet IND requirements of the FDA.


-5- 11
2.3.2 Later Stage Clinical Development.


(a) In addition to the Early Stage Development Program, RPRP and Introgen will cooperate in the Later Stage Clinical Development of each Collaboration Product; provided, RPRP will be primarily responsible for conducting all such Later Stage Clinical Development, at RPRP's expense. Introgen shall be consulted and fully informed with respect to such Later Stage Clinical Development at all times through its representatives on the Development Committee. All Later Stage Clinical Development shall be monitored and managed by the Development Committee; [*].


(b) It is anticipated that RPRP will establish a committee of independent experts (the "External Review Committee") to provide advice with respect to Later Stage Clinical Development. The Chief Scientific Officer of Introgen, or other designee of Introgen, if a clinician of recognized stature, shall serve on and chair the External Review Committee; otherwise, RPRP and Introgen shall agree on the chair of such External Review Committee. In any event, Introgen shall have a representative on such External Review Committee.


(c) It is understood that additional preclinical studies may be required following the completion of Early Stage Development with respect to a Collaboration Product. The parties anticipate that, where appropriate, such work will be performed by Introgen and reimbursed by RPRP, as agreed from time to time by the Development Committee.


2.3.3 FDA Filings. Introgen shall be responsible for the preparation and filing of all IND's in North America with respect to the Collaboration Products, which shall be filed in Introgen's name; provided RPRP shall have a reasonable opportunity to review and comment upon such filings in advance of their filing. RPRP shall be responsible for all further submissions to existing INDs once Later Stage Clinical Development has begun, provided that Introgen is given a reasonable opportunity to review and comment upon such submissions prior to the filing of such submissions. Introgen shall cooperate in transferring to RPRP authority for such correspondence. RPRP, at its expense, shall prepare all PLAs and ELA's for filing in North America with respect to each Collaboration Product. All such PLA's and ELA's shall be filed in the names of RPRP and Introgen, to the extent permitted by applicable FDA regulations (taking into account the supply arrangements under Section 12.3. below) ...