EXHIBIT 10.22
AMENDMENT NO. 1 TO
RESEARCH AND LICENSE AGREEMENT
This Amendment No. 1 modifies the Research and License Agreement dated
December 18, 1997 ("Original Agreement") between Heska Corporation and 3-
Dimensional Pharmaceuticals Inc.
1. Expiration. Termination or Extension of Research Term. Section 9.1.2 of the
-----------------------------------------------------
Original Agreement is amended to extend the Research Term to July 14, 2000,
which is six months from the Project Team meeting held on January 14, 2000.
2. Research Funding. Section 3 of the Original Agreement is amended to
----------------
include the following:
During the extended Research Term Heska will pay to 3DP the amount of [**]
in two equal installments in consideration for 3DP's dedication of [**]
FTE's during this extension. The first installment of [**] shall be paid
within 15 days of complete execution of this Amendment. The second
installment of [**] shall be paid on or before April 14, 2000.
3. No Other Changes. Except as expressly modified by this Amendment, all
provisions of the Original Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, this Amendment has been executed by the duly authorized representatives of the parties.
SIGNED:
Heska Corporation 3-Dimensional Pharmaceuticals Inc.
By: /s/ Ronald L. Hendrick By: /s/ Scott Horvitz
------------------------------- ------------------------------ Name: Ronald L. Hendrick Name: /s/ Scott Horvitz
----------------------------- ---------------------------- Title: Executive Vice President, Title: Executive Vice President,
Chief Financial Officer Finance & Adm.
---------------------------- --------------------------- Date: February 25, 2000 Date: February 17, 2000
----------------------------- ----------------------------
**Certain portions of this Exhibit have been omitted based upon a request for confidential treatment that has been filed with the Commission. The omitted portions have been filed separately with the Commission.
RESEARCH AND LICENSE AGREEMENT
THIS IS A RESEARCH AND LICENSE AGREEMENT ("Agreement") dated as of December 18, 1997 between 3-Dimensional Pharmaceuticals Inc., a Delaware corporation ("3DP"), and the Heska Corporation ("Heska").
BACKGROUND
----------
3DP has developed and owns certain patented and proprietary technology which is registered under the name "DirectedDiversity(R)" and which may be useful in developing certain compounds.
Heska desires to fund a research project whereby 3DP will use its technologies to attempt to develop an array of administered compounds with the goal of [**] in non-human animals.
Heska desires to obtain and 3DP desires to grant an exclusive worldwide license in such compounds, provided that 3DP will retain all rights to the compounds for all human applications, on the terms and conditions contained herein.
TERMS
-----
NOW, THEREFORE, in consideration of the mutual covenants and obligations contained herein, and intending to be legally bound hereby, the parties agree as follows:
1. Definitions. For purposes of this Agreement the following terms shall have
----------- the following meanings:
1.1 "Abbreviated NADA" shall mean the application described at 21 U.S.C.
---------------- (S) 360b(n) (1994).
1.2 "Affiliate" shall mean any corporation, firm, partnership or other
--------- entity, which, at the time in question, is directly or indirectly owned by or controlled by, or under common control with, Heska or 3DP, as the case may be. For the purposes of this definition, "control" shall mean the ownership, directly or indirectly, of more than 50% of the voting stock or shareholders' equity of a corporation or, in the case of a non-corporate entity, the right to receive more than 50% of either the profits or the assets upon dissolution.
1.3 "Candidate Compound" shall mean any Test Compound or Derivative
------------------ Compound which has demonstrated activity in the Primary Field in Initial Screening.
**Certain portions of this Exhibit have been omitted based upon a request for confidential treatment that has been filed with the Commission. The omitted portions have been filed separately with the Commission.
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1.4 "Commercialization" shall mean the process of commercializing a
----------------- Development Compound or Heska Compound, including without limitation the manufacturing, marketing and distribution of the resulting Product or Heska Product after receipt of applicable Regulatory Approvals.
1.5 "Companion Animal" shall mean dog or cat.
----------------
1.6 "Competitive Program" shall mean a small molecule drug discovery
------------------- program that is based on the compounds that (i) are listed in Exhibit 1.12, (ii)
------------ [**], (iii) [**] as the target of such program, which compounds are for use as [**] but excluding any program relating to [**].
1.7 "Controlled" shall mean, with respect to a particular Patent, Patent
---------- Application, item of Know-How or Material, that a Party (a) owns or has a license to such Patent, Patent Application, item of Know-How or Material, and (b) has the ability to grant to the other Party access to and a license or sublicense, as applicable, to such Patent, Patent Application, item of Know-How or Material as provided herein at the time such access or license is required to be granted.
1.8 "Derivative Compound" shall mean any compound that is an analog,
------------------- homolog, isomer or other chemical derivative of a Test Compound and that was made by Heska based on Heska's knowledge of such Test Compound or information about its activity in the Fields derived from the Research. Derivative Compounds are not Test Compounds.
1.9 "Development Compound" shall mean any Candidate Compound that has
-------------------- been selected for Development by Heska pursuant to Section 4.1 for use in the Primary Field.
1.10 "Development" shall mean the process of creating data and dossiers for
----------- the purposes of obtaining Regulatory Approval for the purpose of Commercialization of any Development Compound, including without limitation the conduct of all appropriate target animal studies on such Development Compound.
1.11 "Effective Date" shall be December __, 1997.
--------------
1.12 "Existing Compound" shall mean any of the compounds set forth in
----------------- Exhibit 1.12 of this Agreement. ------------
1.13 "First Commercial Sale" shall mean the first sale by Heska of a
--------------------- Product after Regulatory Approval thereof.
1.14 "Fields" shall mean the Primary Field and the Other Fields.
------
**Certain portions of this Exhibit have been omitted based upon a request for confidential treatment that has been filed with the Commission. The omitted portions have been filed separately with the Commission.
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1.15 "FDA" shall mean the U.S. Food and Drug Administration.
---
1.16 "FTE" shall mean a full-time scientific or technical personnel
--- equivalent who (i) has a Ph.D. and at least 2 years, or a master's degree and at least 3 years, of experience in the pharmaceutical or combinatorial chemistry industry or (ii) has been approved by the Project Team.
1.17 "FTE Year" shall mean one or more FTEs working for the summed
-------- equivalent of one year on the Research, excluding administrative or management time.
1.18 "Heska Compound" shall mean any Derivative Compound or Test Compound,
-------------- which Derivative Compound or Test Compound is developed by Heska for use in the Other Fields.
1.19 "Heska Intellectual Property" shall mean (a) the Heska Patents; and
--------------------------- (b) all Know-How and Materials existing as of the Effective Date that are Controlled by Heska and that are necessary for or reasonably useful to any aspect of the Research activities to be conducted by 3DP hereunder, including without limitation the manufacture of Test Compounds; and (c) all Results that are made, created, developed or generated solely by employees, directors, agents, consultants or others working on behalf of Heska; and (d) any and all intellectual property rights (other than Patents or Patent Applications) appurtenant to the Results described in subsection (c).
1.20 "Heska Patents" shall mean (a) all Patents and Patent Applications
------------- existing as of the Effective Date that are Controlled by Heska and that claim any aspect of the Research activities to be conducted by 3DP hereunder, including without limitation the manufacture of Test Compounds; and (b) all Patents and Patent Applications that claim any inventions in the Results that are made, created, developed or generated solely by employees, directors, agents, consultants or others working on behalf of Heska.
1.21 "Heska Product" shall mean any product (including any formulation
------------- thereof) containing a Heska Compound, which product is marketed and sold for use in the Other Fields and not in the Primary Field.
1.22 "Initial Screening" shall mean the initial efficacy screens of Test
----------------- Compounds and Derivative Compounds for use in the Primary Field performed by Heska on suitable screening models (such as an artificial dog model) pursuant to Section 2.2.2.
1.23 "Initial Animal Studies" shall mean target non-human animal safety and
---------------------- efficacy studies performed by Heska pursuant to Section 2.2.4 on the Candidate Compounds for use in the Primary Field to prepare the data needed to select Development Compounds.
1.24 "Joint Intellectual Property" shall mean (a) all Results that are
--------------------------- made, created, developed or generated jointly by employees, directors, agents, consultants or others working on behalf of Heska and
**Certain portions of this Exhibit have been omitted based upon a request for confidential treatment that has been filed with the Commission. The omitted portions have been filed separately with the Commission.
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by employees, directors, agents, consultants or others working on behalf of 3DP; and (b) any and all intellectual property rights appurtenant to the Results described in subsection (a), including without limitation any and all Patents or Patent Applications that claim inventions in such Results.
1.25 "Joint Patents" shall mean all Patents and Patent Applications
------------- included in the Joint Intellectual Property.
1.26 "Know-How" shall mean any and all information, expertise, data,
-------- results, techniques, methods, trade secrets, know-how, ideas, inventions, discoveries, developments, concepts, formulas, designs, specifications or procedures.
1.27 "Licensed Product" shall mean any product (including any formulation
---------------- thereof) containing any Development Compound, which product is sold for use in the Primary Field and is claimed by a Valid Claim.
1.28 "Materials" shall mean all chemical, biological and physical tangible
--------- materials, as well as any other materials ordinarily engendered by such tangible materials.
1.29 "NADA" shall mean a New Animal Drug Application as provided in the
---- Federal Food, Drug and Cosmetic Act, 21 U.S.C. (S) 360b(b) (1994).
1.30 "NADA Approval" shall mean the order issued by the Secretary approving
------------- a NADA or an Abbreviated NADA.
1.31 "Net Sales" shall mean, with respect to a Product sold, the invoiced
--------- sales price of such Product billed to third party purchasers who are not Affiliates or sublicensees of Heska, less actual amounts for (a) credits, allowances, discounts and rebates to, and charge backs from the account of, such independent customers for damages or rejected Product or out of date Product returned in accordance with Heska policies; (b) freight and insurance costs as set forth on the invoice for transporting such Products to such customers; (c) quantity and trade discounts and other price reductions and commissions paid to third parties with respect to the sale of Products; (d) sales, use, value-added and other direct taxes incurred; and (e) customs, duties, surcharges and other governmental charges incurred in connection with the exportation or importation of the Products. Sales between or among Heska and its Affiliates or permitted sublicensees shall be excluded from the computation of Net Sales. Net Sales shall include the subsequent final sales to Third Parties by such Affiliates or permitted sublicensees. In the event that a Product is sold or distributed for use in combination with or as a component of another product or products (a "Combination Product"), the calculation of "Net Sales" from such Combination Product shall be determined by multiplying the Net Sales of the Combination Product by a fraction, the numerator of which is the fair market value of the Product in such Combination Product, and the denominator of which is the sum of the fair market value of the Product and the fair market value of the other products in the Combination Product. In the event that a Product is sold or distributed as part of a bundle of other
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products where the bundle is sold at one total price and there is no separate invoiced selling price for the Product along (a "Bundled Product"), the calculation of "Net Sales" for the Product sold in such Bundle Product shall be determined by multiplying the Net Sales for the Bundled Product (calculated as provided above for the total invoiced price for such Bundled Product), by a fraction, the numerator of which is the fair market value of the Product included in such Bundled Product and the denominator is the sum of the fair market values of all the products, including the Product, included in such Bundled Product. As used herein, the "fair market value" of a particular product shall be the average invoiced selling price for such product when sold alone during the quarter for which Net Sales are being calculated hereunder, if such amount can be calculated, and otherwise will be the amount that the selling party reasonably could expect to charge for an independent sale of such product to a willing third party purchaser during such period.
1.32 "Other Fields" shall mean any use of a compound other than (a) in or
------------ on a human, or (b) in the Primary Field.
1.33 "Party" or "Parties" shall mean, respectively, 3DP or Heska, and 3DP
----- ------- and Heska.
1.34 "Patent" or "Patents" shall mean an issued United States or foreign
------ ------- patent or supplementary protection certificate, including all provisional applications, substitutions, extensions, reissues, reexaminations, renewals, patents of addition, divisionals, continuations, continuations-in-part and inventors' certificates and all foreign counterparts of the foregoing.
1.35 "Patent Application" shall mean an application for a Patent.
------------------
1.36 "Pivotal Animal Study" shall mean any test performed for regulatory
-------------------- submission by Heska or other studies in preparation for such submission pursuant to Section 4.2 on non-human animals to establish the safety and efficacy of a Development Compound.
1.37 "Post Launch Year" shall mean, for any Product, the 12-month period
---------------- beginning on the first day that the Product first receives Regulatory Approval and ending on the first anniversary and each 12-month period thereafter.
1.38 "Primary Field" shall mean any use of a compound in or on a [**].
-------------
1.39 "Product" shall mean a Licensed Product or Heska Product.
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1.40 "Project Team" shall be the Project Team established by the Parties
------------ pursuant to Section 5.
**Certain portions of this Exhibit have been omitted based upon a request for confidential treatment that has been filed with the Commission. The omitted portions have been filed separately with the Commission.
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1.41 "Project Year" shall mean any of the 12-month periods during the
------------ Research Term beginning on the Effective Date or on an anniversary thereof.
1.42 "Regulatory Approval" shall mean, with respect to any country, filing
------------------- for and receipt of all regulatory agency registrations, approvals, licenses or marketing authorizations required from the applicable Regulatory Authorities for the marketing and sale of a Product for the indication for which it is being marketed in such country, including but not limited to, any NADA Approvals. "Regulatory Approval" shall also include pricing or reimbursement approval, to the extent that such approval is required from a Regulatory Authority to legally place the Product on the market in such countries.
1.43 "Regulatory Authority" shall mean the Governmental authority or entity
-------------------- responsible for authorizing the placement on the market in any country or territory in the Territory of any Product for commercial sale.
1.44 "Regulatory Filings" shall mean all applications, filings, materials,
------------------ studies, data and documents of any nature whatsoever filed with, prepared in connection with or necessary to support any application for a Regulatory Approval from a Regulatory Authority in any country or territory in the Territory.
1.45 "Research" shall mean all the research activities conducted by 3DP and
-------- Heska pursuant to Section 2.2 and the Research Plan.
1.46 "Research Funding" shall mean the funding provided under Section 3 of
---------------- this Agreement by Heska to 3DP for 3DP's efforts in conducting the Research.
1.47 "Research Plan" shall mean the research plan for the Research prepared
------------- by and agreed upon by the Project Team pursuant to Section 2.1, as amended from time to time by written agreement of the entire Project Team.
1.48 "Research Term" shall have the meaning attributed to it in Section
------------- 9.1.2.
1.49 "Results" shall mean any and all Know-How and Materials that are made,
------- created, or reduced to practice in the course of, or as a result of, the Research, as well as any and all reports resulting from testing conducted pursuant to the Research during the Research Term.
1.50 "Royalty Expiration Date" of a Product shall mean, on a country-by-
----------------------- country basis, the later to occur of:
1.50.1 the expiration date of the last to expire Valid Claim of a Patent Right in such country that claims the Product, its manufacture, or its use; and
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1.50.2 the expiration date of the ten-year period commencing on the Effective Date.
1.51 "Subsequent Development Compound" shall mean each Candidate Compound,
------------------------------- excluding Replacement Compounds as defined in Section 8.1, on which Heska conducts Development for use in the Primary Field as a Development Compound in addition to the Development Compound first selected for Development pursuant to Section 4.1.
1.52 "Territory" shall mean all the countries and territories of the world.
---------
1.53 "Test Compound" shall mean any compound discovered, synthesized or
------------- produced by 3DP pursuant to or in the course of the Research that has the potential for activity or efficacy in the Primary Field. It is understood that a Test Compound, as defined herein, may also meet the definition for Candidate Compound, Development Compound, Heska Compound or Product, and any such Test Compound will in such event be deemed to be, for purposes of this Agreement, a Test Compound as well as a Candidate Compound, Development Compound, Heska Compound or Product, as applicable.
1.54 "3DP Intellectual Property" shall mean (a) the 3DP Patents; and (b)
------------------------- all Know-How and Materials existing as of the Effective Date that are Controlled by 3DP and that are necessary for or reasonably useful to any aspect of the Research, Development and Commercialization activities to be conducted by Heska or its Affiliates or sublicensees pursuant to this Agreement, including without limitation the manufacture and use of Test Compounds and the sale of Products; and (c) all Results that are made, created, developed or generated solely by employees, directors, agents, consultants or others working on behalf of 3DP; and (d) any and all intellectual property rights (other than Patents or Patent Applications) appurtenant to the Results described in subsection (c).
1.55 "3DP Patents" shall mean (a) all Patents and Patent Applications
----------- existing as of the Effective Date that are Controlled by 3DP and that claim any aspect of the Research, Development and Commercialization activities to be conducted by Heska or its Affiliates or sublicensees pursuant to this Agreement, including without limitation the manufacture and use of Test Compounds and the sale of Products; and (b) all Patents and Patent Applications that claim any inventions in the Results that are made, created, developed or generated solely by employees, directors, agents, consultants or other working on behalf of 3DP.
1.56 "Third Party" shall mean any person other than a Party or its
----------- Affiliate.
1.57 "Valid Claim" shall mean a claim which (i) in the case of any
----------- unexpired United States or foreign Patent, shall not have been donated to the public, disclaimed, nor held invalid or unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision, or (ii) in the case of any United States or foreign Patent Application, shall not have been canceled, withdrawn, or abandoned without being refiled in another Patent Application or finally rejected by an administrative agency action from which no appeal can be taken, or shall have been pending for more than four years. For purposes of this definition,
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time periods shall be measured cumulatively for claims in a later filed Patent Application in a country which are substantially the same as claims in an earlier filed Patent Application in that country. If a claim of a Patent Application that ceased to be a Valid Claim under clause (ii) due to the passage of time later issues as part of a Patent described within clause (i) then it shall again be considered to be a Valid Claim effective as of the issuance of such Patent.
2. Research
--------
2.1 Preparation of Research Plan. Within sixty days after execution of
---------------------------- this Agreement, the Parties' representatives on the Project Team shall prepare a detailed research plan which shall set forth the Parties' respective obligations and responsibilities in connection with the Agreement through the selection of a Development Compound under Section 4.1. Once the Project Team has prepared the proposed research plan, it shall submit the proposed research plan to the appropriate members of management of both Parties for their review. Once the Parties mutually agree in writing that the proposed research plan is in an acceptable form, the proposed research plan shall become the Research Plan for purposes of this Agreement. Upon selection of the Development Compounds by Heska pursuant to Section 4.2, the Project Team shall meet only as needed to perform the functions as set forth in Section 5.2.
2.2 Research and Initial Screening. During the Research Term, pursuant to
------------------------------ the Research Plan and subject to the provisions of this Agreement, the parties will undertake the following Research:
2.2.1 3DP will use combinatorial or analog chemistry to discover, synthesize or produce Test Compounds for use in the Primary Field until a Development Compound is selected by Heska under Section 4.1.
2.2.2 3DP will provide Heska with up to [**] quantities of any synthesized Test Compounds for evaluation in the Initial Screening. Test Compounds will be validated by 3DP to be at least 80% pure. 3DP will provide to Heska information regarding the structure and purity of such Test Compounds as soon as practicable or as otherwise directed by the Project Team. Upon receipt by Heska from 3DP of any Test Compounds, Heska will perform the Initial Screening of such Test Compounds. Heska may also perform Initial Screening of Heska Compounds. Test Compounds showing activity for use in the Primary Field in the Initial Screening will be designated Candidate Compounds.
2.2.3 After the identification of Candidate Compounds that Heska believes have a likelihood of success in the Primary Field, Heska will provide 3DP notice of such Candidate Compounds selected by Heska (up to a total of ten compounds), and 3DP will promptly use commercially reasonable efforts to obtain a written opinion of independent patent counsel selected by 3DP, and reasonably
**Certain portions of this Exhibit have been omitted based upon a request for confidential treatment that has been filed with the Commission. The omitted portions have been filed separately with the Commission.
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acceptable to Heska, as to whether such Candidate Compounds may infringe on the issued patents, if any, that, in the reasonable opinion of such counsel, are relevant to such Candidate Compounds (the "Relevant Patents"). Heska may provide such notice on more than one occasion, until such time as Heska has received written opinions, subject to qualifications reasonably acceptable to Heska, of the patent counsel that a total of ten of such identified Candidate Compounds do not infringe the Relevant Patents. Promptly after Heska has received such written opinion, subject to qualifications reasonably acceptable to Heska, that one or more of such selected Candidate Compounds do not infringe the Relevant Patents, 3DP will use commercially reasonable efforts to produce within a reasonable time after Heska's written request five grams of each of the Candidate Compounds identified as non-infringing in such opinion, for Heska to use in the Initial Animal Studies for purposes of identifying Development Compounds. If additional quantities of a selected Candidate Compound are required for any purpose, the cost to produce the additional amounts of such selected Candidate Compounds will be borne by Heska. The quantities of Candidate Compounds produced ...
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