License And Research Agreement

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R a7a7 200.80(b)4, AND 240.24b-2

Execution Version



LICENSE AND RESEARCH AGREEMENT



This License and Research Agreement (together with all Exhibits, Schedules and other attachments hereto, this " Agreement "), is dated as of the 7th day of January, 2008 (the " Execution Date "), by and between Genzyme Corporation, a Massachusetts corporation (" Genzyme ") and Isis Pharmaceuticals, Inc., a Delaware corporation (" Isis "). Genzyme and Isis each may be referred to herein individually as a " Party " or collectively as the " Parties ."



WITNESSETH:



WHEREAS, simultaneously with this Agreement, Isis and Genzyme will enter into that certain Stock Purchase Agreement of even date herewith in the form attached hereto as Exhibit A (the " Stock Purchase Agreement ") pursuant to which Genzyme is purchasing the Shares;



WHEREAS, Isis possesses certain intellectual property with respect to certain oligonucleotide-based therapeutic compounds;



WHEREAS, Isis desires to grant to Genzyme, and Genzyme desires to obtain, a license under certain Isis intellectual property to advance mipomersen, formerly known as ISIS 301012, and related compounds targeting apoB, through human clinical trials and ultimately commercialize it as a product; and



WHEREAS, Isis and Genzyme desire to enter into a research agreement under which Isis will conduct research related to certain gene targets selected by Genzyme.



NOW, THEREFORE, in consideration of the Parties92 willingness to enter into the Stock Purchase Agreement and the respective covenants, representations, warranties and agreements set forth herein, the Parties hereto agree as follows:



ARTICLE 1.
DEFINITIONS



For purposes of this Agreement, the following capitalized terms will have the following meanings. Capitalized terms used without definition in this Agreement will have the meanings ascribed to them in the Product Term Sheet and the Research Term Sheet.



1.1. " AAA " has the meaning set forth in Section 6.2.2 (Binding Arbitration With Respect to Agreement Terms).



1.2. " Action " has the meaning set forth in Section 6.3.1 (Jurisdiction).



1.3. " Additional Third Party Agreement " has the meaning set forth in Section 2.1.6 (Additional Rights after Effective Date).



1.4. " Affiliate " of an entity means any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such first entity. For purposes of this definition only, "control" (and, with correlative



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meanings, the terms "controlled by" and "under common control with") means the possession of the actual power to direct the management or policies of an entity, whether through the ownership of voting securities or by contract relating to voting rights or corporate governance. In addition, [***] will not be considered an Affiliate of Isis.



1.5. " apoB " means apolipoprotein B.



1.6. " Bankruptcy Code " has the meaning set forth in Section 8.14 (Rights in Bankruptcy).



1.7. " Confidential Information " has the meaning set forth in Section 8.1.1 (Non-Disclosure).



1.8. " Control " or " Controlled " means, with respect to any Know-How, Patent or other intellectual property right or Regulatory Materials, possession by a Party (including its Affiliates) of the right (whether by ownership, license or otherwise) to grant to the other Party a license or a sublicense under such Know-How, Patent or other intellectual property right or access to Regulatory Materials without violating the terms of any agreement or other arrangement with any Third Party.



1.9. " Diligence Period " means the period beginning on the Execution Date and ending on the earlier of (a) the date that is [***] after the Execution Date or (b) the date the Parties enter into the More Detailed Product Agreement. The Parties92 goal is to conclude diligence and enter into the More Detailed Product Agreement by [***].



1.10. " Disclosure Schedule " means the schedule (dated as of the Execution Date and updated pursuant to Section 5.4 ( Right to Update Disclosure Schedule Prior to Effective Date) ) delivered by Isis to Genzyme that includes exceptions to Isis92 representations and warranties in Section 5.2 (Product Representations and Warranties) and Section 5.3 (Research Representations and Warranties) hereof.



1.11. " Dispute " has the meaning set forth in Section 6.1.1 (Escalation).



1.12. " Effective Date " has the meaning set forth in Section 7.1.2 (Effective Date).



1.13. " Encumbered Follow-On Product " has the meaning set forth in Section 2.2 (Follow-On Product).



1.14. " Executives " has the meaning set forth in Section 6.1.1 (Escalation).



1.15. " Follow-On Product " means all pharmaceutical compositions, formulations, dosage forms, delivery systems and presentations that contain [***] (alone or with other active ingredients) other than Mipomersen.



1.16. " Follow-On Product Encumbrances " has the meaning set forth in Section 2.2.2 .



1.17. " General Representations and Warranties " has the meaning set forth in Section 5.1 (Representations and Warranties of Both Parties).



1.18. " HSR " means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.



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1.19. " In-Licensed Third Party IP " means Patents or Know-How Controlled by Isis that are in-licensed by Isis pursuant to a Third Party Agreement.



1.20. " Isis Core Technology Patents " means all Patents, other than the Product-Specific Patents or Isis Manufacturing and Analytical Patents, Controlled by Isis or any of its Affiliates as of the Execution Date hereof or during the term of the Product License that are necessary or useful for the development and commercialization of Product, including the Patents identified on Schedule 1.20 .



1.21. " Isis Manufacturing and Analytical Know-How " means Know-How other than Product Know-How Controlled by Isis or its Affiliates as of the Execution Date hereof or during the term of the Product License that relates to the synthesis or analysis of Products independent of sequence or chemical modification.



1.22. " Isis Manufacturing and Analytical Patents " means Patents Controlled by Isis or its Affiliates as of the Execution Date hereof or during the term of the Product License that claim methods and materials used in the synthesis or analysis of Products independent of sequence or chemical modification, including the Patents identified on Schedule 1.22 . Isis Manufacturing and Analytical Patents do not include the Product-Specific Patents and the Isis Core Technology Patents.



1.23. " Isis Manufacturing and Analytical Technology " means the Isis Manufacturing and Analytical Know-How and Isis Manufacturing and Analytical Patents solely to the extent necessary or useful to manufacture a Product.(1)



1.24. " Know-How " means technical information and materials, including technology, software, instrumentation, devices, data, compositions, formulas, biological materials, assays, constructs, compounds, discoveries, inventions, procedures, processes, practices, protocols, methods, techniques, results of experimentation or testing, knowledge, trade secrets, skill and experience, whether or not patentable or copyrightable.



1.25. " Licensed IP " means the Licensed Patents, the Product Know-How and the Isis Manufacturing and Analytical Know-How; provided, however , that (a) for any such Know-How or Patent that becomes Controlled by Isis after the Execution Date pursuant to an Additional Third Party Agreement, the provisions of Section 2.1.6 (Additional Rights after Effective Date) will govern whether such Know-How or Patent will be






(1) As part of its collaboration with other pharmaceutical partners, Isis has an arrangement where Isis can share manufacturing technology improvements made by such pharmaceutical partners with other Third Parties so long as such Third Parties similarly agree to share their manufacturing technology improvements. Genzyme may decide to participate in this arrangement if Genzyme wishes.



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included as Licensed IP, and (b) with respect to any Follow-On Product, the provisions of Section 2.2 (Follow-On Product) will govern the extent to which In-Licensed Third Party IP will be included in Licensed IP.



1.26. " Licensed Patent(s) " means the Product-Specific Patents, Isis Core Technology Patents and the Isis Manufacturing and Analytical Patents.



1.27. " Mipomersen " means mipomersen sodium, formerly known as ISIS 301012.



1.28. " More Detailed Product Agreement " has the meaning set forth in Section 2.1.2 (More Detailed Product Agreement).



1.29. " More Detailed Research Agreement " has the meaning set forth in Section 2.3 (Research Option Agreement).



1.30. " Patent(s) " means (a) patents and patent applications in any country or jurisdiction, (b) all priority applications, divisionals, continuations, substitutions, and continuations-in-part of any of the foregoing, and (c) all patents issuing on any of the foregoing patent applications, together with all registrations, reissues, renewals, re-examinations, confirmations, supplementary protection certificates, and extensions of any of (a), (b) or (c).



1.31. " Permitted Licenses " means licenses granted by Isis after the Execution Date to any Third Party under the Isis Core Technology Patents or the Isis Manufacturing and Analytical Technology (but not under the Product-Specific Patents or for use of [***] to (a) use oligonucleotides (or supply oligonucleotides to end users) in quantities not to exceed [***](2) per oligonucleotide per end user solely to conduct Pre-Clinical Research, or (b) enable such Third Party to [***], where such Third Party is primarily engaged in providing contract manufacturing or services and is not engaged in drug discovery, development or commercialization. Notwithstanding the foregoing, Permitted Licenses do not include any licenses that allow (i) a Third Party to make, use or sell an oligonucleotide having the same [***] as a Product or Isis92 preferred [***], (ii) a Third Party to manufacture any nucleic acid that [***] apoB that will be incorporated into a therapeutic product for use in human clinical trials or for commercial sale or (iii) Isis to directly supply to a Third Party any [***] apoB.



1.32. " Pre-Clinical Research " means pre-clinical research including gene function, gene expression and target validation research using cells and animals, which may include small pilot toxicology studies but excludes pharmacokinetic and toxicology studies






(2) Quantity subject to confirmation by the Parties during the Diligence Period.



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required to meet the regulations for filing an IND, clinical development and commercialization.



1.33. " Product " means all pharmaceutical compositions, formulations, dosage forms, delivery systems and presentations that contain Mipomersen or any Follow-On Product, including all pharmaceutically acceptable salts, solvates, hydrates, hemihydrates, metabolites, pro-drug forms, stereoisomers, enantiomers, racemates and all optically active forms thereof.



1.34. " Product Know-How " means Know-How Controlled by Isis on the Execution Date or during the term of the Product License relating to or otherwise necessary for the development and commercialization of Product. Product Know-How does not include the Isis Manufacturing and Analytical Know How.



1.35. " Product License " has the meaning set forth in Section 2.1 (Grant).



1.36. " Product Representations and Warranties " has the meaning set forth in Section 5.2 (Product Representations and Warranties).



1.37. " Product-Specific Patents " means Patents Controlled by Isis or any of its Affiliates as of the Execution Date and during the term of the Product License claiming or covering (a) [***] apoB; (b) the sequence of apoB; (c) the specific composition of matter of a Product; and (d) methods of using Product as a therapeutic, methods of using Product to modulate apoB, and methods of using the product to inhibit expression of apoB, including the Patents identified on Schedule 1.37 ; provided, however , that if a Patent satisfies the criteria set forth above but also applies to gene targets other than apoB, such Patent will be considered an Isis Core Technology Patent.



1.38. " Product Term Sheet " means the term sheet attached hereto as Exhibit B.



1.39. " Regulatory Materials " means any regulatory submissions, notifications, registrations, approvals and/or other filings and correspondence made to or with a regulatory authority in any country or jurisdiction in the Territory, and any other records required to be maintained for possible audit by a regulatory authority that may be necessary or useful to develop, manufacture, market, sell or otherwise commercialize Product in the Territory.



1.40. " Research Option Agreement " has the meaning set forth in Section 2.3 (Research OptionAgreement).



1.41. " Research Term Sheet " means the term sheet attached hereto as Exhibit C .



1.42. " SEC " means Securities and Exchange Commission.



1.43. " Shares " means the shares of Isis92 Common Stock purchased by Genzyme pursuant to the Stock Purchase Agreement.



1.44. " Territory " means worldwide.



1.45. " Third Party " means a person or entity other than the Parties and their respective



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Affiliates.



1.46. " Third Party Agreement " means any agreements pursuant to which Isis obtains rights applicable to the development or commercialization of Product or Follow-On Product.



ARTICLE 2.
LICENSE AND RESEARCH AGREEMENTS



2.1. Product License .



2.1.1. Grant . Isis hereby grants to Genzyme an exclusive license, (with the limited right to sublicense as set forth in Section 2.1.3 (Limited Right to Sublicense)), under the Licensed IP to research, develop, make, have made, use, sell, offer for sale, have sold, import and export Products in the Territory for therapeutic purposes on the terms and conditions set forth in the Product Term Sheet and this Agreement (the " Product License "). Notwithstanding the foregoing, (a) the exclusive license to the Isis Core Technology Patents will be subject to the licenses granted by Isis to Third Parties identified on Schedule 2.1.1 and Isis92 right to grant Permitted Licenses, and (b) with respect to any Follow-On Product, the provisions of Section 2.2 (Follow-On Product) will govern the extent to which In-Licensed Third Party IP is included within Licensed IP.



2.1.2. More Detailed Product Agreement . The Parties agree that the Product Term Sheet and this Agreement contain all material terms of the Product License and will form a legally binding and enforceable license and co-development agreement without need for execution of further documentation or any further action by any Party. The Parties also recognize that it may be desirable to agree upon other more detailed customary terms and conditions with respect to the Product License. Accordingly, as soon as reasonably practicable after the Effective Date, the Parties will negotiate and enter into a more detailed written license and co-development agreement that will include the terms set forth in the Product Term Sheet and any additional terms and conditions that are customary and reasonable for agreements of this type that may be agreed to by the Parties, including provisions relating to intellectual property ownership, prosecution and enforcement, regulatory interactions and approvals, term and termination, indemnification and confidentiality (the " More Detailed Product Agreement ").



2.1.3. Limited Right to Sublicense .



(a) The licenses granted to Genzyme under the Licensed IP are sublicensable only in connection with a sublicense of a Product to any Affiliate of Genzyme or to any Third Party, in each case for the continued research, development or commercialization of such Product in accordance with the terms of the Product License.



(b) Notwithstanding the foregoing, the licenses granted to Genzyme under the Isis Manufacturing and Analytical Technology are sublicensable to a Third Party [***] only upon the mutual agreement of the Parties.



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2.1.4. Upfront License Fee . Provided that this Agreement and the Product License have become effective and neither has not been terminated, Genzyme will pay to Isis the upfront license fee specified in the Product Term Sheet upon five (5) business days after the earlier of (a) expiration of the Diligence Period or (b) the Parties enter into the More Detailed Product Agreement.



2.1.5. Access . Isis will afford to Genzyme and its representatives reasonable access to and copies of all information (including reasonable access to knowledgeable employees and representatives of Isis to discuss such information) within the possession or control of Isis or any of its Affiliates pertaining to the development of the Product and the Licensed IP, including all Regulatory Materials related to the Product.



2.1.6. Additional Rights after Effective Date . After the Execution Date, Isis may wish to in-license or acquire rights to Know-How or Patents Controlled by Third Parties (such a Third Party in-license or acquisition agreement being an " Additional Third Party Agreement ") which, if so licensed or acquired, may be included in the Licensed IP licensed to Genzyme under Section 2.1.1 . In such event (and to the extent permitted by Isis92 confidentiality agreement with the applicable Third Party), Isis will notify Genzyme regarding the nature of the technology and status of negotiations related to the Additional Third Party Agreement through the JDC. Once Isis has executed such Additional Third Party Agreement, Isis will offer such Third Party Patents or Know-How to Genzyme (which offer will include a description of the payments paid or potentially payable by Isis thereunder). At such time, if Genzyme wishes to include such Third Party Patents or Know-How under the licenses granted under Section 2.1.1 , Genzyme will notify Isis of its desire to do so and the Parties will fairly and in good faith allocate upfront payments or ongoing payment obligations between Products and compounds that are not Products and other Isis licensees, if appropriate. As part of this allocation process, Isis will share with Genzyme, in reasonable detail, the assumptions and methodology Isis used to create the proposed allocation. If Genzyme does not agree to reimburse Isis for the amount of any upfront or similar acquisition payments fairly allocated to Product, and to be responsible for the payment of its share of any upfront, milestone and royalty payments, then the Know-How or Patents acquired or in licensed by Isis under the Additional Third Party Agreement will not be considered Licensed IP licensed to Genzyme under the Product License. When Genzyme pays its share of any upfront, milestone and royalty payments assumed by Genzyme under this Section 2.1.6 , such payments will be considered Program Costs for the applicable Product.



2.2. Follow-On Product . The Parties contemplate that after the Effective Date Genzyme, either on its own or in collaboration with Isis, may wish to research, develop and commercialize Follow-On Products. The scope of the In-Licensed Third Party IP included in Licensed IP under the Product License with respect to such Follow-On Products will be determined in accordance with the procedures set forth in this Section 2.2 . At the time Genzyme intends to designate a Follow-On Product as a development candidate, Genzyme will notify Isis in writing of such intention and will describe in



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reasonable detail the applicable Follow-On Product. Subject to Section 2.1.6 (Additional Rights after Effective Date), if a Follow-On Product utilizes any In-Licensed Third Party IP (an " Encumbered Follow-On Product "), such In-Licensed Third Party IP will be included in Licensed IP only to the extent set forth below:



2.2.1. If the applicable Third Party Agreement contains a contractual obligation that would preclude Isis from including such In-Licensed Third Party IP in Licensed IP with respect to such Encumbered Follow-On Product, then the In-Licensed Third Party IP that is the subject of such Third Party Agreement will not be included in Licensed IP.



2.2.2. If the applicable Third Party Agreement contains any potential encumbrances known by Isis and related to the potential Follow-On Product, including field or territory restrictions, covenants, or milestones, royalty, sublicense revenue or other payments (" Follow-On Product Encumbrances "), Isis will fully disclose to Genzyme such Follow-On Product Encumbrances and, if Genzyme agrees in writing to assume the Follow-On Product Encumbrances (with any payments being included in Program Costs for such Encumbered Follow-On Product), then the In-Licensed Third Party IP that is the subject of such Third Party Agreement will be included in Licensed IP.



2.2.3. If the applicable Third Party Agreement does not contain the obligations or encumbrances described in Sections 2.2.1 and 2.2.2 above, the In-Licensed Third Party IP that is the subject of such Third Party Agreement will automatically be included in Licensed IP.



2.2.4. If the applicable Third Party Agreement is or was also applicable to Mipomersen, then the In-Licensed Third Party IP that is the subject of such Third Party Agreement will automatically be included in the Licensed IP to the extent that (a) the terms of such Third Party Agreement do not preclude Isis from including it and (b) Genzyme agrees in writing to assume any applicable Follow-On Product Encumbrances associated with such Third Party Agreement.



2.2.5. Each time the Parties complete the process set forth above, Isis will update the schedules relating to Licensed Patents and Third Party Agreements, and Schedule 2.1.1 as appropriate.



2.3. Research Option Agreement . Isis and Genzyme hereby enter into a research agreement under which Isis will perform research on the terms and conditions set forth in the Research Term Sheet (the " Research Option Agreement "). The Parties agree that the Research Term Sheet and this Agreement contain all material terms of the Research Option Agreement and will form a legally binding and enforceable research agreement, without need for execution of further documentation or any further action by any Party. The Parties also recognize that it may be desirable to agree upon other more detailed customary terms and conditions with respect to the Research Option Agreement. Accordingly, as quickly as practicable following the Effective Date, the Parties will negotiate and enter into a more detailed research agreement that will include the terms set



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forth in the Research Term Sheet and any additional terms and conditions that are customary and reasonable for agreements of this type that may be agreed to by the Parties, including provisions relating to intellectual property ownership, prosecution and enforcement, regulatory matters, term and termination, indemnification and confidentiality (the " More Detailed Research Agreement ").



ARTICLE 3.
NON-COMPETE



3.1. Product . During the term of the Product License, Isis and its Affiliates will not, directly or indirectly, and will not collaborate with, license or otherwise authorize any Third Party to, research, develop or commercialize any [***] apoB, except pursuant to (a) the agreements identified on Schedule 2.1.1 , as they exist on the Execution Date, (b) Permitted Licenses, or (c) this Agreement, including the Product License, and the More Detailed Product Agreement.



ARTICLE 4.
[RESERVED]



ARTICLE 5.
REPRESENTATIONS AND WARRANTIES



5.1. Representations and Warranties of Both Parties . Each Party hereby represents and warrants to the other Party as of both the Execution Date and Effective Date (collectively, the " General Representations and Warranties ") that:



5.1.1. it is a duly organized and validly existing corporation under the laws of its jurisdiction of incorporation;



5.1.2. it has the power and authority and the legal right to enter into this Agreement and perform its obligations hereunder, and that it has taken all necessary action on its part required to authorize the execution and delivery of this Agreement and the performance of its obligations hereunder;



5.1.3. the execution and delivery of this Agreement, the Product License and the Research Option Agreement and the performance of such Party92s obligations hereunder do not conflict with or violate any requirement of applicable law or any provision of its articles of incorporation or similar organizational documents, its bylaws, or the terms or provisions of any agreement or other instrument to which it is a party or by which it is bound, or any order, award, judgment or decree to which it is a party or by which it is bound; and



5.1.4. ...