Research & License Agmnt Btwn Company & Dupont

EXHIBIT 10.19


COLLABORATIVE RESEARCH AND LICENSE AGREEMEENT


This Collaborative Research and License Agreement is made and effective as of October 12, 1998 (the "Effective Date"), by and between 3-Dimensional Pharmaceuticals, Inc., a corporation having its principal place of business at Eagleview Corporate Center, 665 Stockton Drive, Suite 104, Exton, PA 19341, U.S.A. ("3DP"), and E.I. DuPont de Nemours & Co., a corporation having its principal place of business at 1007 Market Street, Wilmington, Delaware 19898, U.S.A. ("DuPont"). 3DP and DuPont may be referred to herein as a "Party" or, collectively, as "Parties".


WHEREAS, 3DP is engaged in discovery research for a variety of biologically active compounds and the development of technologies to facilitate such research, and 3DP has patented systems for generating chemical compounds having desired properties;


WHEREAS, DuPont is engaged in research and development of biologically active compounds and the development of technology for the control of pests and disease.


WHEREAS, 3DP and DuPont desire to enter into a research and development collaboration to discover, identify, and evaluate compounds that have the property of [**]; and DuPont may develop, manufacture, distribute, market and sell world-wide products containing one or more of such [**] products;


NOW, THEREFORE, in consideration of the various promises and undertakings set forth herein, the Parties agree as follows:


1. DEFINITIONS
Unless otherwise specifically provided herein, the following terms shall have the following meanings:


1.1 "Active Compound" means any composition of matter that has been shown to have [**] and [**] activity in the course of the Research Program.


1.2 "Active Compound Patents" means any Patents that claim: (1) Active Compounds that are first conceived by either Party in the course of the Research Program; or (2) methods of making or using Active Compounds, where such methods are first conceived by either Party in the course of the Research Program.


1.3 "Affiliate" of a Party means: (1) any corporation owning or directly or indirectly controlling at least fifty percent (50%) of the stock normally entitled to vote for election of directors of a party, and (2) any corporation owned or directly or indirectly controlled by a party, or by a corporation defined by subparagraph (1) above, through


** 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.


ownership of at least fifty percent (50%) of stock normally entitled to vote for election of directors.


1.4 "Agreement" shall mean the present agreement including its appendices.


1.5 "Commercialization Candidate" means a Development Candidate that meets DuPont's formal criteria for marketing.


1.6 "Confidential Information" means all information that has or could have commercial value or other utility in a Party's business, or the unauthorized disclosure of which could be detrimental to the Party's interests, including confidential information, inventions, know-how, data and materials relating to the Research Program or to the Licensed Products, and shall include without limitation research, technical, clinical development, manufacturing, marketing, financial, personnel and other business information and plans, whether in oral, written, graphic or electronic form.


1.7 "Custom Accessible Libraries" means any DirectedDiversity Chemical Library derived from using 3DP DirectedDiversity Technology and structure activity data provided by DuPont, and includes synthetically accessible compounds generated by 3DP and DuPont in the course of the Research Program derived from any source other than DuPont Compounds or a DuPont Compound Library or the Available Chemicals Directory.


1.8 "Development Candidate" means an Active Compound that has commercially useful properties and has been selected for advanced field testing.


1.9 "DirectedDiversity Chemical Library" means a computer-generated library of compounds containing integrated structure-activity and synthesis data.


1.10 "DuPont" means E.I. DuPont de Nemours & Co. and Affiliates.


1.11 "DuPont Compounds" means any compound developed or obtained by DuPont outside of the Research Program.


1.12 "DuPont Compound Library" means any collection of DuPont Compounds or an electronic data file describing such a collection of DuPont Compounds, for example DuPont's CBCH compound file.


1.13 "DuPont Custom Accessible Libraries" means any DirectedDiversity Chemical Library derived from using 3DP DirectedDiversity Technology and structure activity data provided by DuPont, and includes synthetically accessible compounds generated by 3DP and DuPont in the course of the Research Program derived only from DuPont Compounds or a DuPont Compound Library.


1.14 "DuPont Patents" means any Patents owned or controlled by DuPont.


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1.15 "Effective Date" means the effective date of this Agreement as set forth in the first paragraph hereof.


1.16 "Field" means [**]


1.17 "Joint Project Team" means the committee to be formed pursuant to Article 4 of this Agreement.


1.18 "Licensed Product" means any product containing an Active Compound.


1.19 "Major Market" means Brazil, Canada, China, France, Germany, Italy, Japan, Russia, Spain, United Kingdom and United States.


1.20 "Net Sales" means the gross invoiced sales price charged to third parties for all Licensed Products sold by DuPont and its Affiliates to such third parties after deduction of the following items: (i) customary trade, quantity and case discounts, wholesaler-charge backs, or rebates (including rebates to governmental agencies); provided that such discounts, charge backs and rebates are not applied disproportionately with respect to particular products sold; (ii) customary credits or allowances for rejection or return of previously sold Licensed Products; (iii) any direct tax or government charge (other than an income tax) levied on the sale, transportation or delivery of a Licensed Product and borne by the seller thereof; and (iv) any charge for freight or insurance if separately stated.


Combination Products: Where Product is sold in the form of a combination product containing one or more active ingredients in addition to an Active Compound, Net Sales for such Combination Product will be calculated by multiplying actual Net Sales of such combination Product by the fraction A/(A+B) where A is the net invoice price of Product to an end use customer containing such Active Compound, if sold separately, and B is the net invoice price of a product to an end use customer containing any other component or components in the combination, if sold separately. If, on a country-by-country basis, the other active component or components in the combination are not sold separately in said country, Net Sales for the purpose of determining royalties on the Combination Product shall be calculated by multiplying actual Net Sales of such Combination Product by the fraction A/C where A is the invoice price of Product containing the Active Compound, if sold separately, and C is the invoice price of the Combination Product. If, on a country-by-country basis, neither the Product nor the other active component or components of the Combination Product is sold separately in said country, Net Sales for the purposes of determining royalties of the combination Product shall be reasonably allocated between the Product and the other active components based upon their relative value as determined by the Parties hereto in good faith.


** 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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1.21 "Patents" means all U.S. patent applications or issued patents, including provisionals, divisionals, continuations, continuations-in-part, reissues and extensions derived therefrom, as well as all foreign patents and foreign patent counterparts to the foregoing.


1.22 [**]


1.23 "Research Program" means the joint research program that will be implemented pursuant to the research plan described in Article 2.


1.24 "Research Program Patents" means any Patents, other than Active Compound Patents and 3DP DirectedDiversity Technology, that claim inventions, discoveries or knowhow conceived or reduced to practice by either Party in the course of the Research Program.


1.25 "Research Term" means an initial period of three (3) years in which the Parties conduct research pursuant to the Research Program. This Research Term may be extended pursuant to Section 6.1 or can be shortened pursuant to Section 9.2 of this Agreement.


1.26 [**]


1.27 "Target Leads" means any compound selected for evaluation of its [**] from any source, including but not limited to Custom Accessible Libraries, 3DP Accessible Libraries, DuPont Compound Libraries and the Available Chemicals Directory (which is a commercially available directory).


1.28 "3DP Accessible Libraries" means any DirectedDiversity Chemical Library that is generated by 3DP outside of the Research Program.


1.29 "3DP Compounds" means any compounds that are developed by 3DP outside of the Research Program, including but not limited to compounds that are actually synthesized by 3DP or contained in a 3DP Accessible Library.


1.30 "3DP DirectedDiversity Technology" means 3DP Patents and know-how that relate to generating and utilizing a DirectedDiversity Chemical Library, including but not limited to U.S. Patent Nos. 5,463,564; 5,574,656; and 5,684,711. This term also includes any discoveries, improvements, inventions and modifications made in the Research Program to the extent that they relate to 3DP DirectedDiversity Technology. This term does not include the SAR models as described in Article 2 of this Agreement.


1.31 "3DP Patents" means any Patents owned or controlled by 3DP.


1.32 "Territory" means the entire world.


** 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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1.33 "Valid Claim" means a claim of a Patent that has not lapsed or become abandoned or been declared invalid or unenforceable by a court or agency of competent jurisdiction from which no appeal can be or has been taken.


2. RESEARCH PROGRAM AND RESEARCH PLAN


A. Discovery Phase I. Discovery Phase I will be implemented pursuant to
----------------- the confidentiality conditions of Article 3 below. The objective of this Phase I is to utilize 3DP DirectedDiversity Technology and DuPont knowledge and expertise to identify a first set of Target Leads to be screened for [**] against the Target. It is anticipated that this Discovery Phase I will be completed within three (3) months from the time that 3DP is provided access by DuPont to the DirectedDiversity Workstation described in Section 3.1 below.


2.1 DuPont will furnish to 3DP structure and activity data on the [**] or additional properties of agrochemical utility of DuPont Compounds screened against the Target, including both compounds that are active and compounds that are inactive.


2.2 3DP and DuPont will use 3DP's DirectedDiversity Technology to compute a chemical descriptor matrix to describe and map into a chemical descriptor space those DuPont Compounds for which [**] is provided by DuPont in Section 2.1.


2.3 3DP and DuPont will develop a Structure Activity Relationship ("SAR") model based on the descriptor matrix described in Section 2.2 and other relevant information that may be available to 3DP.


2.4 The chemical descriptor matrix of Section 2.2 and the SAR of Section 2.3 will be used to map DuPont Compounds, as they may be described in the DuPont Chemical Library, into the chemical descriptor space described in Section 2.2.


2.5 3DP and DuPont will utilize 3DP's DirectedDiversity Technology to select jointly between [**] compounds as candidates for acquisition or synthesis. These candidate compounds, which will be selected based on the SAR described in Section 2.3, may be drawn from any appropriate source, including but not limited to, 3DP Accessible Libraries, Custom Accessible Libraries, DuPont Chemical Libraries, DuPont Custom Accessible Libraries, the Available Chemicals Directory and other chemical and available chemical libraries.


2.6 3DP will provide synthesis protocols and consultations to DuPont for production of the compounds selected from the 3DP Accessible Libraries in Section 2.5.


B. Discovery Phase II. Discovery Phase II will be implemented pursuant to
------------------ the confidentiality conditions of Article 3 below. The objective of this task is to utilize 3DP DirectedDiversity Technology to identify a Target Lead having [**]. It is


** 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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anticipated that this Discovery Phase II will be completed within twelve (12) months from the completion of Phase 1.


2.7 DuPont will make a reasonable effort to acquire or synthesize the compounds identified in Section 2.5, and to screen these compounds for [**] against the Target.


2.8 From the screening results obtained pursuant to Section 2.7, 3DP and DuPont jointly will develop a second generation SAR and will select an additional set of between [**] Target Leads for acquisition or synthesis. These compounds are to be selected from any of the sources identified in Section 2.5. DuPont will make a reasonable effort to acquire or synthesize the Target Leads selected in this Section 2.8, and to screen these Target Leads for [**] against the Target.


C. Discovery Phase III. Discovery Phase III will be implemented pursuant
------------------- to the confidentiality conditions of Article 3 below. The objective of this task is to utilize 3DP DirectedDiversity Technology identify an Active Compound. It is anticipated that this Discovery Phase III will be completed within twenty- two (22) months from the completion of Phase II.


2.9 Based on the data developed in Phase II, or as soon as practically defined by a derived SAR obtained in paragraph 2.3, 3DP and DuPont will jointly develop more refined Custom Accessible Libraries. 3DP and DuPont will jointly determine the selection criteria of the Target Leads to be selected from the Custom Accessible Libraries. DuPont shall be responsible for developing the synthesis protocols of selected Target Lead compounds in the Custom Accessible Libraries and will validate production chemistry to produce the selected Target Lead compounds with high fidelity (typically >80% of library compounds synthesized at > 80% purity). DuPont will make a reasonable effort to acquire or synthesize the compounds selected from the Custom Accessible Libraries in this Section 2.9, and to screen the selected compounds for Protease Inhibition Activity against the Target.


2.10 3DP and DuPont will perform iterative cycles of selection, synthesis, acquisition, screening and SAR generation until Active Compounds are produced with commercially useful properties. Progress toward these properties will be evaluated no less frequently than every six (6) months by the Joint Project Team described in Article 4. Performance criteria that will define Active Compounds against the Target both in vitro and in vivo will be established that are mutually agreeable to DuPont and 3DP.


2.11 In the event that a suitable high resolution X-ray crystal structure of the Target becomes available during the course of the Program, 3DP- shall use this structural information to suggest other Target Leads from any appropriate and available source.


** 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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3. IMPLEMENTATION AND SECURITY FOR CONFIDENTIAL
INFORMATION


3.1 Access by DuPont to DirectedDiversity Workstation. In order to satisfy the confidentiality concerns of the Parties about their respective Confidential Information, particularly including but not limited to the 3DP DirectedDiversity Technology, 3DP Accessible Libraries, DuPont Compounds and the DuPont Compound Libraries, the Parties agree to utilize the following procedures and safeguards. A restricted access computer workstation will be established at a DuPont facility to be identified that is capable of operating the 3DP DirectedDiversity Technology and accessing 3DP Accessible Libraries and DuPont Compound Libraries. DuPont will provide the required hardware and system software and 3DP the required application software component of the 3DP DirectedDiversity Technology for the workstation. Access to this workstation will be limited to selected 3DP and DuPont employees. The software application component will be jointly operated by representatives of 3DP and DuPont. A dual password protection system will be used to ensure that there is at least one employee from both 3DP and DuPont present at all times when the workstation is being used interactively. Additional operational details regarding the workstation will be jointly determined.


3.2 Confidentiality Obligations. The Parties agree that, for the term of this Agreement and for five years thereafter, the "Receiving Party" shall keep completely confidential and shall not publish or otherwise disclose and shall not use for any purpose (except as expressly permitted hereunder) any Confidential Information furnished to it by the "Disclosing Party" pursuant to this Agreement (including without limitation, know-how), except to the extent that it can be established by the Receiving Party that such Confidential Information:


(a) was already known to the Receiving Party, other than under an
obligation of confidentiality from the Disclosing Party; at the time of
disclosure;


(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the Receiving Party;


(c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or
omission of the Receiving Party in breach of this Agreement;


(d) was subsequently lawfully disclosed to the Receiving Pa ...