Collaborative Research & License Agreement

EXHIBIT 10.123


COLLABORATIVE RESEARCH AND LICENSE AGREEMENT


BETWEEN


AXYS PHARMACEUTICALS, INC.


AND


CYTOVIA, INC.


2


COLLABORATIVE RESEARCH AND LICENSE AGREEMENT


THIS COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (this "Agreement") is entered into and effective as of March 15, 2000, by and between AXYS PHARMACEUTICALS, INC., a Delaware corporation having its principal place of business at 180 Kimball Way, South San Francisco, CA 94080 ("Axys"), and CYTOVIA, INC., a Delaware corporation having a place of business at 6650 Nancy Ridge Dr., San Diego, CA 92121 ("Cytovia"). Axys and Cytovia may be referred to herein individually as a "Party" or, collectively, as "Parties."


RECITALS


WHEREAS, Cytovia and its Affiliates possess proprietary technology and know-how related to modulation of caspases; and


WHEREAS, Axys and its Affiliates are engaged in the research, development and marketing of products for the treatment of, among other things, diseases within the field of cancer; and


WHEREAS, Axys and Cytovia desire to collaborate in the discovery, development and commercialization of products for use in the prevention, and/or treatment of certain human diseases as identified below.


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


ARTICLE 1


DEFINITIONS


Capitalized terms not otherwise defined herein will have the meaning set forth below:


1.1 "AFFILIATE" with respect to either Party, will mean any Person controlling, controlled by, or under common control with such Party. For the purposes of this Section 1.1 only, "control" will refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, or (b) the ownership, directly or indirectly, of at least 50% (or, if less, the maximum ownership interest permitted by law) of the voting securities or other ownership interest of a Person.


1.2 "AXYS COMPOUNDS" means the compounds contributed by Axys pursuant to Section 2.2(a).


1.3 "AXYS KNOW-HOW" means all Information Controlled by Axys at any time during the Research Term or during the term of this Agreement that is necessary or useful for the identification, development synthesis, assaying, manufacture, use or sale of Lead Compounds, Candidate Compounds, Back-Up Compounds, Released Compounds, Clinical Development Compounds, Licensed Products or Released Products, but excluding Research Technology


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


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Patent Rights and any Information that Axys is restricted from disclosing due to confidentiality obligations to any Third Party and provided that after the period in which the license granted in Section 3.1(a)(ii) is in effect, that Axys will have no obligation to disclose to Cytovia any Axys Know- How obtained, discovered or developed after such period.


1.4 "AXYS PATENTS" means all Patent Rights that are Controlled by Axys that claim (i) Lead Compounds, Candidate Compounds, Back-Up Compounds, Released Compounds, Clinical Development Compounds, Licensed Products or Released Products, (ii) the manufacture or use of Lead Compounds, Candidate Compounds, Back-Up Compounds, Released Compounds, Clinical Development Compounds, Licensed Products, or Released Products or (iii) methods or materials used for discovering, identifying, or assaying for, Lead Compounds, Candidate Compounds, Back-Up Compounds, Released Compounds, Clinical Development Compounds, Licensed Products or Released Products, in each case where such Patent Rights claim inventions made prior to the Effective Date.


1.5 "BACK-UP COMPOUND" means any Candidate Compound that has been selected by Axys as a back-up compound with respect to a particular Clinical Development Compound, as provided in Section 5.1(a)(iv), together with any salt, solvate or prodrug of such selected back-up compound.


1.6 "CANDIDATE COMPOUND" means any Lead Compound that is recommended by the JRC for further optimization and IND-enabling studies, pursuant to Section 5.1(a)(iii), and any derivative, analog or homolog of a compound contributed or developed by either Party hereunder and designated by the JRC as a Candidate Compound pursuant to Section 5.1(b), together with any salt, solvate or prodrug of such selected compound.


1.7 "CLINICAL DEVELOPMENT COMPOUND" will have the meaning ascribed to such term in Section 5.1(a)(iv).


1.8 "COMMERCIALIZATION BUDGET" will have the meaning ascribed to such term in Section 5.2(b).


1.9 "COMMERCIALIZATION PLAN" will have the meaning ascribed to such term in Section 5.2(b).


1.10 "CONFIDENTIAL INFORMATION" means a Party's confidential information, inventions, know-how, data and materials relating to (i) the Research, (ii) a Party's activities during the license period, and pursuant to the licenses, set forth in Sections 3.1(a)(ii) or 3.2(a)(ii), or (iii) the Lead Compounds, Candidate Compounds, Back-Up Compounds, Released Compounds, Clinical Development Compounds, Licensed Products or Released Products including without limitation research data and results, technical and scientific information, clinical development data and results, manufacturing, marketing, financial, personnel and other business information and plans, which, if disclosed in written, graphic or electronic form, is marked or otherwise designated as "confidential" or "proprietary" and, if disclosed orally, is summarized and designated as "confidential" or "proprietary" in a writing provided to the receiving Party not later than sixty (60) days after such disclosure. All information presented at


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


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the JRC or JDC meetings will be rebuttably presumed to be Confidential Information, regardless of whether it would otherwise qualify as such pursuant to the preceding sentence.


1.11 "CONTROL" means, with respect to an item of Information or an intellectual property right, possession of the ability, whether arising by ownership or license, to grant a license or sublicense as provided for herein under such item or right without violating the terms of any agreement or other arrangements with any Third Party.


1.12 "CYTOVIA COMPOUNDS" means the compounds contributed by Cytovia pursuant to Section 2.2(b).


1.13 "CYTOVIA KNOW-HOW" means all Information Controlled by Cytovia at any time during the Research Term or during the term of this Agreement that is necessary or useful for the identification, development, synthesis, assaying, manufacture, use or sale of Lead Compounds, Candidate Compounds, Back-Up Compounds, Released Compounds, Clinical Development Compounds, Licensed Products or Released Products, but excluding Research Technology Patent Rights and any Information that Cytovia is restricted from disclosing due to confidentiality obligations to a Third Party and provided that after the period in which the license granted in Section 3.2(a)(ii) is in effect, Cytovia will have no obligation to disclose to Axys any Cytovia Know-How obtained, discovered or developed after such period.


1.14 "CYTOVIA PATENTS" means all Patent Rights that are Controlled by Cytovia that claim (i) Lead Compounds, Candidate Compounds, Back-Up Compounds, Released Compounds, Clinical Development Compounds, Licensed Products, or Released Products, (ii) the manufacture or use of Lead Compounds, Candidate Compounds, Back-Up Compounds, Released Compounds, Clinical Development Compounds, Licensed Products, or Released Products, or (iii) methods or materials useful for discovering, identifying, or assaying for, Lead Compounds, Candidate Compounds, Back-Up Compounds, Released Compounds, Clinical Development Compounds, Licensed Products, or Released Products in each case where such Patent Rights claim inventions made prior to the Effective Date. Without limiting the foregoing, the Cytovia Patents will also include, when filed with the appropriate patent authority, Cytovia's existing draft patent applications, which have not been filed with a patent authority as of the Effective Date, that disclose the Cytovia Compounds and are identified by Cytovia's internal docket number as [ * ], and such applications, when so filed, will not be included in the Research Technology Patent Rights.


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


1.16 "EXCLUDED COMPOUND" means an Axys Compound that has been selected by Axys or Axys Advanced Technologies, Inc. ("AAT") for any licensee of Axys or AAT (i) for development and commercialization (other than pursuant to this Agreement) or (ii) pursuant to any exclusivity rights or rights to restrict use.


1.17 "FAIR MARKET VALUE" means the cash consideration which a willing seller would realize from an unaffiliated, unrelated and willing buyer in an arm's length sale of an identical item sold in the same quantity and at the same time and place of the transaction.


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


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1.18 "FDA" means the United States Food and Drug Administration, or the successor federal agency thereto.


1.19 "FIELD" means any and all uses for the prevention or treatment of [*].


1.20 "FIRST COMMERCIAL SALE" means, with respect to any Licensed Product or Released Product in any country, the first sale for use or consumption by the general public of such Licensed Product or Released Product in such country after all Regulatory Approvals have been obtained in such country.


1.21 "FTE" means a full-time scientific person dedicated by Cytovia or Axys to the Research, or in the case of less than a full-time dedicated scientific person, a full-time, equivalent scientific person year, based upon a total of forty-seven (47) weeks (i.e., one thousand eight hundred eighty (1,880) hours) per year of scientific work on or directly related to the Research. Scientific work on or directly related to the Research to be performed by a Party's employees may include, without limitation, and to the extent consistent with the Party's past practices, experimental laboratory work, recording and writing up results, reviewing literature and references, holding scientific discussions, attending appropriate meetings, seminars and symposia, managing and directing scientific staff, carrying out management duties related to the Research, including attendance at JRC meetings.


1.22 "IND" means an investigational new drug application filed with the FDA for approval to commence human clinical trials of a pharmaceutical agent, or the equivalent in other countries or regulatory jurisdictions.


1.23 "INFORMATION" means any data, results, inventories, information, know-how, processes, machines, trade secrets, techniques, methods, development, material, or compositions of matter of any type or kind.


1.24 "JOINT RESEARCH COMMITTEE" OR "JRC" means that committee to be formed pursuant to Section 4.1.


1.25 "JOINT DEVELOPMENT COMMITTEE" OR "JDC" means that committee to be formed pursuant to Section 4.2.


1.26 "KNOW-HOW" means Axys Know-How and/or Cytovia Know-How.


1.27 "LEAD COMPOUND" means a compound contributed by the Parties pursuant to Section 2.2(a) or Section 2.2(b) that is identified as meeting the criteria for a Lead Compound set forth in Schedule 1.27 by the JRC pursuant to Section 5.1(a)(ii), and any derivative, analog or homolog of a compound contributed or developed by either Party pursuant to the Research and designated by the JRC as a Lead Compound pursuant to Section 5.1(b).


1.28 "LICENSED PRODUCT" means any product, including any formulation thereof, containing or comprising a Clinical Development Compound for use within the Field.


1.29 "LICENSED PRODUCT PATENT" will have the meaning ascribed to such term in Section 6.4.


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


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1.30 "MAJOR PHARMACEUTICAL MARKET" means each of [ * ].


1.31 "MATERIALS" will have the meaning ascribed to such term in Section 2.8.


1.32 "NET SALES" means the gross amounts received by a Party or any of its Affiliates or Sublicensees (each, a "Seller"), from all sales by Seller of any Licensed Product or Released Product, as reflected in Seller's books and records maintained in accordance with the accounting principles used by the applicable entity consistently applied across all of its products (which principles will comply with Generally Accepted Accounting Principles, where applicable), less the following deductions with respect to such sale, to the extent included in the amounts invoiced or subsequently actually allowed and taken, (i) all trade, cash and quantity credits, discounts, refunds or rebates or retroactive price reductions; (ii) allowances or credits for returns or rejected product; (iii) handling fees and restocking expenses for returned or rejected products; (iv) freight, transportation, postage and insurance paid by Seller; (v) sales taxes, tariffs, duties and other governmental charges (including value added tax) actually paid in connection with the sale (but excluding what are commonly known as income taxes), and (vi) reasonable and customary accrual-basis deductions from such gross amounts consistent with Seller's accounting policy, as the case may be, for governmental chargebacks or rebates (including without limitation Medicaid rebates). A "sale" will not include transfers or dispositions for charitable or promotional purposes or for preclinical, clinical, regulatory or governmental purposes prior to receiving marketing approval. In the event a Licensed Product or Released Product is sold in the form of a combination product containing one or more active ingredients which are themselves not Licensed Products or Released Products, the Net Sales will be calculated by multiplying the sales price of such combination product by the fraction A/(A+B) where A is the invoice price or Fair Market Value, whichever is greater, of the Licensed Product or Released Product and B is the total invoice price or Fair Market Value, whichever is greater, of the other product(s).


1.33 "PATENT RIGHT" means (i) an issued and existing letters patent, including any extensions, supplemental protection certificates, registrations, confirmations, reissues, reexaminations or renewals thereof, (ii) pending applications, including any continuation, divisional, or continuation-in-part application thereof, for any of the foregoing, and (iii) all counterparts to any of the foregoing issued by or filed in any country or other jurisdiction.


1.34 "PERSON" means any natural person, corporation, firm, business trust, joint venture, association, organization, company, limited liability company, partnership or other business entity, or any government or agency or political subdivision thereof.


1.35 "PHASE I" means that portion of the clinical development program which generally provides for the first introduction into humans of a pharmaceutical product with the primary purpose of determining safety, metabolic and pharmacokinetic properties and clinical pharmacology of the product.


1.36 "PHASE II" means that portion of the clinical development program which provides for the human clinical trials of a pharmaceutical product in a limited number of patients with the primary purpose of determining safety, dosing range and efficacy in the proposed therapeutic indication.


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


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1.37 "PHASE III" means that portion of the clinical development program which provides for the Pivotal Trials of a pharmaceutical product on sufficient numbers of patients to establish the safety and efficacy of a product for the desired label claims and indications to support Regulatory Approval of such product in a country or group of countries.


1.38 "PIVOTAL TRIAL" means a Phase III or Phase II/III clinical trial designed to support Regulatory Approval of a pharmaceutical product, whether or not on a provisional basis such as a "fast-track" product designation or a nonprovisional basis.


1.39 "PRODUCT DEVELOPMENT PLAN" will have the meaning ascribed to such term in Section 4.2(d).


1.40 "PRODUCT DEVELOPMENT BUDGET" will have the meaning ascribed to such term in Section 4.2(d).


1.41 "PROFIT OR LOSS" will have the meaning ascribed to such term in Exhibit A.


1.42 "PROFIT SHARE OPTION" will have the meaning ascribed to such term in Section 5.3.


1.43 "PROFIT SHARE OPTION PERIOD" will have the meaning ascribed to such term in Section 5.3.


1.44 "REGULATORY APPROVAL" means any and all approvals (including price and reimbursement approvals), licenses, registrations, or authorizations of any federal, national, state, provincial or local regulatory agency, department, bureau or other government entity, necessary for the manufacture, use, storage, import, transport and sale of a Licensed Product or Released Product in a country.


1.45 "RELATED COMPOUND" will have the meaning ascribed to such term in Section 5.4(c).


1.46 "RELEASED COMPOUND" will have the meaning ascribed to such term in Section 3.2(b).


1.47 "RELEASED PRODUCT" will have the meaning ascribed to such term in Section 3.2(b).


1.48 "RELEASED PRODUCT PATENT" will have the meaning ascribed to such term in Section 6.4.


1.49 "RESEARCH" means the collaborative research program undertaken by the Parties pursuant to this Agreement during the Research Term to discover, identify, synthesize and evaluate compounds contributed, discovered or identified by the Parties hereunder for use in the Field.


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


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1.50 "RESEARCH PLAN" means the specific plan for conducting the Research, as described in Section 2.1, which will be attached hereto as Exhibit B, as such plan may be amended or revised from time-to-time by the JRC.


1.51 "RESEARCH TECHNOLOGY" means all tangible and intangible Know-How, trade secrets, inventions (whether or not patentable), discoveries, developments, data, clinical and preclinical results, information, and physical, chemical or biological materials, and any replication of or any part of any of the foregoing, that was made by employees, agents or independent contractors of Axys and/or Cytovia, either alone or jointly, during the course of and in the conduct of the Research during the Research Term, or by employees, agents or independent contractors of either Party or jointly by employees, agents or independent contractors of Axys and Cytovia in connection with activities during the license period, and pursuant to the licenses, set forth in Sections 3.1(a)(ii) or 3.2(a)(ii).


1.52 "RESEARCH TECHNOLOGY PATENT RIGHTS" means all Patent Rights that cover Research Technology.


1.53 "RESEARCH TERM" means the period commencing on the Effective Date and (unless this Agreement is terminated earlier pursuant to Section 10.2) continuing for an initial term of [ * ]. Thereafter the Research Term may be renewed for [ * ]; provided, however, that the Parties mutually agree in writing to such renewal at least [ * ] prior to the expiration of the then current initial or renewal term, as applicable.


1.54 "SCREENING" will have the meaning ascribed to such term in Section 2.7.


1.55 "SCREENING TREE AND TIMELINE" will mean the screening protocol and timeline as set forth in Schedule 2.3(a).


1.56 "SUBLICENSEE" means a Person other than an Affiliate of a Party to which either Party has granted sublicense rights under the licenses granted such Party hereunder, which rights include at least the rights to make and sell Licensed Products or Released Products. Third Parties that are permitted only to distribute and resell finished Licensed Products or Released Products, or that manufacture or finish Licensed Products or Released Products for supply to either Party or any of their Affiliates, are not "Sublicensees."


1.57 "TERRITORY" means all countries, territories and protectorates throughout the world.


1.58 "THIRD PARTY" means any Person other than Axys, Cytovia or Affiliates of either of them, or any Sublicensee.


1.59 "VALID CLAIM" means a claim of an issued and unexpired patent which patent has not lapsed, been abandoned and which claim has not been canceled or declared invalid by an unreversed and unappealable decision or judgment of a court or other appropriate body of competent jurisdiction, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer.


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


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ARTICLE 2


COLLABORATIVE RESEARCH


2.1 RESEARCH PLAN. Within thirty (30) days following the Effective Date, the Parties will mutually agree upon a written Research Plan which will be generally consistent with the research plans discussed previously by the Parties in contemplation of this Agreement and will be attached hereto as Exhibit B and thereby become incorporated into this Agreement. The Parties will conduct the Research as generally specified in the Research Plan (as amended or revised by the JRC from time-to-time). The Research Plan, among other things, will specify the scientific direction, research objectives and research milestones, and will allocate Research responsibilities and resources between the Parties in a manner consistent with this Agreement. As promptly as practicable thereafter, subject to the terms and conditions herein, the Parties will each use commercially reasonable efforts to conduct the Research on a collaborative basis, with the goal of discovering, identifying, synthesizing and performing preclinical research on Lead Compounds and with the further goal of identifying and selecting certain Candidate Compounds that are suitable for development as Clinical Development Compounds and for commercialization as Licensed Products for use in the Field.


2.2 RESEARCH CONTRIBUTIONS. Without limiting the foregoing, the Parties agree to commit the resources set forth in this Section 2.2 to perform their obligations under the Research Plan:


(a) Axys will initially provide Cytovia with approximately [ * ] each of approximately four hundred thousand (400,000) compounds (each, an "Axys Compound") in a [ * ] format to be delivered to Cytovia in approximately equal installments over the first [ * ] of the Research Term, or as soon as reasonably practicable thereafter. After Cytovia completes its screening of such compounds, or within thirty (30) days after [ * ], whichever is earlier, the Parties will determine in good faith whether screening of additional compounds is appropriate. If such additional screening is agreed to, Axys will provide Cytovia with an additional quantity of compounds as determined by the JRC, not to exceed an additional three hundred thousand (300,000) compounds in total, as soon as reasonably practicable following such determination. Upon completion of all screening hereunder Cytovia will, at Axys' election, return or destroy remaining compound inventories provided by Axys to Cytovia.


(b) Cytovia will initially contribute to the Research, from its libraries of compounds, [ * ] compounds (each, a "Cytovia Compound"), identified by the Parties and set forth on the attached Schedule 2.2(b), which will be the subject of initial research related activities as provided in the Research Plan. If and at such time as a Cytovia Compound fails either the second or third of the Lead Compound tests set forth on Schedule 1.27, Cytovia will contribute an additional Cytovia Compound mutually identified and agreed to by the Parties from Cytovia's libraries of compounds which compound will become the subject of research activities under the Research Plan. Notwithstanding anything to the contrary herein, unless otherwise agreed by the Parties, Cytovia will only be required to contribute a maximum of [ * ] such replacement Cytovia Compounds (for a maximum total of [ * ] Cytovia Compounds contributed altogether). Cytovia will provide Axys with the synthetic route for the Cytovia Compounds and such quantities of such Cytovia Compounds as Axys reasonably requests for


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.


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purposes of performing its obligations under the Research Plan which, in any event, will not be less than [ * ] for each Cytovia Compound. Upon completion of all activities under the Research Plan, Axys will, at Cytovia's election, return or destroy remaining amounts Cytovia Compounds if Axys does not continue to develop such compound.


(c) Each Party will commit such number of its FTEs as specified from time-to-time in the Research Plan as necessary to conduct its responsibilities under the Research Plan or such other number of FTEs as the Parties may agree.


(d) The Parties will maintain and utilize scientific staff, laboratories, offices and other facilities consistent with their performance of activities under Section 2.2 and will use personnel with sufficient skills and experience as are required to accomplish efficiently and expeditiously the objectives of the Research as set forth in the Research Plan in good scientific manner and in compliance in all material respects with all requirements of applicable laws, rules and regulations, and all other requirements of applicable good laboratory practices.


2.3 RESPONSIBILITIES. The Research will be managed and directed on a day to day basis in accordance with the goals and objectives agreed upon by the JRC, as provided in ARTICLE 4 hereof, in accordance with the Research Plan. Without limiting the foregoing:


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