Joint Venture Agreement With Genovo, Inc.

ARIAD PHARMACEUTICALS, INC. HAS OMITTED FROM THIS EXHIBIT 10.25 PORTIONS OF THE AGREEMENT FOR WHICH ARIAD PHARMACEUTICALS, INC. HAS REQUESTED CONFIDENTIAL TREATMENT FROM THE SECURITIES AND EXCHANGE COMMISSION. THE PORTIONS OF THE AGREEMENT FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED ARE MARKED WITH AN ASTERISK AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.


[EXECUTION COPY]


JOINT VENTURE AGREEMENT


BETWEEN GENOVO, INC.


AND


ARIAD GENE THERAPEUTICS, INC.


FEBRUARY 14, 1997 2
[EXECUTION COPY]


JOINT VENTURE AGREEMENT


This JOINT VENTURE AGREEMENT (the "Agreement") is entered into as of February 14, 1997, by and between GENOVO, INC., a Delaware corporation, having an address of P.O. Box 42884, Philadelphia, PA 19101 ("GENOVO") and ARIAD GENE THERAPEUTICS, INC. ("AGT"), a subsidiary of ARIAD PHARMACEUTICALS, INC. ("ARIAD"), a Delaware corporation, having an address of 26 Landsdowne Street, Cambridge, Massachusetts 02139.


WHEREAS, AGT is the owner and/or licensee of and has expertise in the development and use of gene expression, regulation and apoptosis technologies; and


WHEREAS, GENOVO is the owner and/or licensee of and has expertise in the development and use of technologies for gene therapy utilizing viral and other vectors; and


WHEREAS, the parties desire to enter into a joint venture (the "Joint Venture") for the purposes of further developing their respective gene expression, regulation and apoptosis and gene delivery technologies and of jointly commercializing such technologies.


NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the parties hereto, intending to be legally bound, hereby agree as follows:


1. DEFINITIONS


Whenever used in this Agreement with an initial capital letter, the terms defined in this Section 1 shall have the meanings specified.


1.1 "AFFILIATE" means any corporation, firm, partnership or other entity which directly or indirectly controls or is controlled by or is under common control with a party to this Agreement. "Control" means ownership, directly or through one or more Affiliates, of more than fifty percent (50%) of the shares of stock entitled to vote for the election of directors, in the case of a corporation, or more than fifty percent (50%) of the 3 equity interests in the case of any other type of legal entity, status as a general partner in any partnership, or any other arrangement whereby a party controls or has the right to control the Board of Directors or equivalent governing body of a corporation or other entity. Notwithstanding the foregoing, regardless of its percentage ownership in GENOVO, Biogen, Inc. shall not be deemed an Affiliate of GENOVO.


1.2 "ANNUAL R&D PLAN" means the written plan describing the research and development activities to be carried out during each calendar year pursuant to this Agreement. Each Annual R&D Plan will be set forth in a written document prepared by AGT and GENOVO and approved by the R&D Steering Committee and will include a budget for such research and development activities which shall be approved by the Management Committee.


1.3 "APOPTOSIS DIMERIZER" means an organic small-molecule compound that regulates or controls protein clustering in cells for use in the Field for the purpose of inducing apoptosis of the engineered cells.


1.4 "AGT BACKGROUND TECHNOLOGY" means Technology of AGT that exists as of the Effective Date and that is useful in Gene Therapy, including, without limitation, gene expression, gene regulation, and inducible apoptosis technology for use in Gene Therapy. AGT Background Technology is listed or described on Exhibit 1.4.


1.5 "AGT COMMERCIALIZATION REIMBURSEMENT ACCOUNT" means the Commercialization Reimbursement Account established by AGT pursuant to Section 8.4.1 hereof.


1.6 "AGT CONSULTATIVE DECISION" means a Consultative Decision which shall be made by AGT, subject to the terms hereof, if, after appropriate consultations and discussions by the Management Committee, the Management Committee shall be unable to reach a decision concerning the subject matter thereof. All Consultative Decisions which are AGT Consultative Decisions are specifically identified as such hereunder, including without limitation, the decision identified as such in Section 5.3 hereof.


2 4 1.7 "AGT DECISION" means a decision with respect to a Joint Venture matter which AGT shall make in its sole discretion, subject to the terms hereof, without the necessity of prior consultations or discussions by the Management Committee or between the parties. All decisions which are AGT Decisions are specifically identified as such hereunder, including without limitation, those decisions identified as such in Sections 4.2.1, 8.1.2 and 8.2.1 hereof.


1.8 "AGT DEVELOPMENT REIMBURSEMENT ACCOUNT" means the Development Reimbursement Account established by AGT pursuant to Section 4.5 hereof.


1.9 "AGT PROGRAM TECHNOLOGY" has the meaning set forth in Section 6.2.1 hereof.


1.10 "AGT TECHNOLOGY" means AGT Background Technology and AGT Program Technology. For the avoidance of doubt, AGT Technology shall not include any genes to which AGT has rights as of the Effective Date or thereafter acquires rights, but shall include (i) those genes contemplated in Section 8.1.3 hereof (ii) genes listed on Exhibit 1.4 and (iii) genes whose function is to regulate expression using Dimerizer Drugs or induce apoptosis using Apoptosis Dimerizers.


1.11 "COMMERCIALIZATION PLAN" means the written plan describing the efforts of the Joint Venture to commercially develop Products, Dimerizer Drugs and Apoptosis Dimerizers in the Field or, alternatively, to seek partners for the commercial development of Products, Dimerizer Drugs and Apoptosis Dimerizers in the Field, pursuant to the terms of this Agreement. The Commercialization Plan shall be prepared by the parties, and approved by the Management Committee and may be amended by the Management Committee from time to time.


1.12 "COMMERCIALIZATION PROGRAM" means those efforts of the Joint Venture directed at developing, licensing, registering, manufacturing, marketing, promoting, distributing and selling Products, Dimerizer Drugs, and Apoptosis Dimerizers either through the Joint Venture itself, by either party alone as


3 5 permitted hereunder, or by the Joint Venture in conjunction with Licensees or other third parties.


1.13 "CONFIDENTIAL INFORMATION" means all tangible embodiments of Technology and all information (including but not limited to information about any element of Technology) which is disclosed by one party to the other hereunder or under the Superseded Confidentiality Agreement (as defined in Section 13.12) except to the extent that such information (i) as of the date of disclosure is demonstrably known to the party receiving such disclosure or its Affiliates, as shown by written documentation, other than by virtue of a prior confidential disclosure to such party or its Affiliates; (ii) as of the date of disclosure is in, or subsequently enters, the public domain, through no fault or omission of the party receiving such disclosure; or (iii) as of the date of disclosure or thereafter is obtained from a third party free from any obligation of confidentiality to the disclosing party.


1.14 "CONSULTATIVE DECISION" means a decision on a Joint Venture matter which shall be made by the Management Committee after appropriate consultations and discussions by the Management Committee or, if the Management Committee shall be unable to reach a decision concerning the subject matter, by AGT if the decision is identified as an AGT Consultative Decision hereunder or by GENOVO if the decision is identified as a GENOVO Consultative Decision hereunder.


1.15 "DEVELOPMENT PHASE" means those activities of the R&D Program the objective of which is to pursue the preclinical (in accordance with Good Laboratory Practices and other applicable regulatory requirements) and clinical development and testing of particular Products and associated Dimerizer Drugs and Apoptosis Dimerizers which are part of a Development Project which has been designated as a Development Project and approved by the Management Committee in writing pursuant to Section 8.1.2 hereof. The Development Phase may be conducted simultaneously with activities in the Research Phase.


4 6 1.16 "DEVELOPMENT PROJECT" has the meaning set forth in Section 3.4(iv) hereof.


1.17 "DIMERIZER DRUG" means an organic small-molecule compound that regulates or controls protein clustering in cells for use in the Field, but shall not include use to induce apoptosis.


1.18 "EFFECTIVE DATE" means the date first written above.


1.19 "FIELD". Subject to any modifications to be made as set forth in Section 2.5 hereof, "Field" means Gene Therapy in which [*]. The definition of Field shall not include Gene Therapy in the Liver/Lung Field of Use.


1.20 "FULLY BURDENED COST" shall be determined in accordance with generally accepted accounting principles and shall include the following direct and indirect costs incurred by AGT in the production of Dimerizer Drug and Apoptosis Dimerizer and by GENOVO in the production of Products: salaries, benefits, supplies, production materials, travel, packaging, shipping and other costs directly identifiable to the production of the Dimerizer Drug, Apoptosis Dimerizer or Products plus an allocable share of the associated manufacturing overhead costs based on not less than [*] utilization of plant capacity for those departments in which work is performed in the production of the Dimerizer Drug, Apoptosis Dimerizer or Products less all realized credits (including, without limitation, tax credits) directly identifiable to the production of the Dimerizer Drug, Apoptosis Dimerizer or Products. Such costs shall not include product and process development costs, royalties owed to third parties, selling or general and administrative expenses.


The amount to be allocated for departmental manufacturing overhead costs shall be determined by computing the percent of direct labor and materials dollars applicable to the work performed in the production of the Dimerizer Drug, Apoptosis Dimerizer or Products in a given department as a proportion to all direct labor and material dollars charged to projects in that department, and multiplying that percent by the total overhead dollars related to that department. The percentage amounts used to determine the allocated amounts will be calculated using the


5 7 manufacturer's accounting system which will compute such rates on a systematic, rational and consistent basis and shall be the same as used by the manufacturing party in the preparation of its annual audited financial statements (except for the [*] utilization factor discussed above). Should the manufacturer change its method of allocating overhead (including changes in the nature of costs included in overhead) to its products, it will so advise the other party, and the parties will renegotiate the basis for allocating such costs to the work performed in the production of Dimerizer Drug, Apoptosis Dimerizers or Products.


1.21 "GENE THERAPY" means (i) direct in vivo administration of genetic material into a patient [*], or (ii) direct in vivo administration of [*], for prophylactic or therapeutic purposes in humans.


1.22 "GENOVO BACKGROUND TECHNOLOGY" means Technology of GENOVO that exists as of the Effective Date and that is useful in Gene Therapy, including, without limitation, viral and other vectors for use in Gene Therapy. GENOVO Background Technology is listed or described on Exhibit 1.22.


1.23 "GENOVO COMMERCIALIZATION REIMBURSEMENT ACCOUNT" means the Commercialization Reimbursement Account established by GENOVO pursuant to Section 8.4.2 hereof.


1.24 "GENOVO CONSULTATIVE DECISION" means a Consultative Decision which shall be made by GENOVO, subject to the terms hereof, if, after appropriate consultations and discussions by the Management Committee, the Management Committee shall be unable to reach a decision concerning the subject matter thereof. All Consultative Decisions which are GENOVO Consultative Decisions are specifically identified as such hereunder, including without limitation, those decisions identified as such in Section 5.3 hereof.


1.25 "GENOVO DECISION" means a decision with respect to a Joint Venture matter which GENOVO shall make in its sole discretion, subject to the terms hereof, without the necessity of prior consultations or discussions by the Management Committee or between the parties. All decisions which are GENOVO Decisions


6 8 are specifically identified as such hereunder, including without limitation, those decisions identified as such in Sections 4.2.1, 8.1.2 and 8.2.2 hereof.


1.26 "GENOVO DEVELOPMENT REIMBURSEMENT ACCOUNT" means the Development Reimbursement Account established by GENOVO pursuant to Section 4.5 hereof.


1.27 "GENOVO PROGRAM TECHNOLOGY" has the meaning set forth in Section 6.2.2 hereof.


1.28 "GENOVO TECHNOLOGY" means GENOVO Background Technology and GENOVO Program Technology. For the avoidance of doubt, GENOVO Technology shall not include any genes to which GENOVO has rights as of the Effective Date or thereafter acquires rights, but shall include (i) those genes contemplated in Section 8.1.3 hereof, (ii) genes listed on Exhibit 1.22, and (iii) genes whose function is to enable Vectors to function in Gene Therapy or which are part of Vectors.


1.29 "IND" means an Investigational New Drug application, as defined in the United States Food, Drug and Cosmetic Act, as amended, and applicable regulations promulgated thereunder, or the equivalent in any other country.


1.30 "JOINT DECISION" means a decision with respect to a Joint Venture matter which shall be made by the Management Committee or the R&D Steering Committee after appropriate consultations and discussions concerning the same by the representatives of AGT and GENOVO to said Committee. Joint Decisions shall include any decisions expressly identified as such hereunder and any other decisions specifically reserved to the Management Committee or R&D Steering Committee hereunder.


1.31 "JOINT PATENT RIGHTS" means Patent Rights with respect to Joint Technology.


1.32 "JOINT TECHNOLOGY" has the meaning set forth in Section 6.2.3.


1.33 "JOINT VENTURE" means the association of AGT and GENOVO established pursuant to Article 2 of this Agreement for the purposes set forth therein.


7 9 1.34 "LICENSEE" means a third party licensee of rights from the Joint Venture or a strategic partner of the Joint Venture.


1.35 "LIVER/LUNG FIELD OF USE" means [*].


1.36 "MANAGEMENT COMMITTEE" means the committee of AGT and GENOVO representatives established pursuant to Section 3.1 hereof to administer the affairs of the Joint Venture.


1.37 "MOLECULAR CONJUGATES" means a complex of protein and DNA.


1.38 "NDA" means a New Drug Application or Product License Application, as defined in the United States Food, Drug and Cosmetic Act, as amended, and applicable regulations promulgated thereunder, or any other application for authorization to sell a Product, Dimerizer Drug or Apoptosis Dimerizer filed with the United States Food and Drug Administration, or the equivalent in any other country.


1.39 "PATENT RIGHTS" means the rights and interests in and to issued patents and pending patent applications (which for purposes of this Agreement shall be deemed to include certificates of invention and applications for certificates of invention and priority rights) in any country, including all provisional applications, substitutions, continuations, continuations-in-part, divisions, and renewals, all letters patent granted thereon, and all reissues, reexaminations and extensions thereof, whether owned or licensed in by a party with the right to sublicense. "AGT Patent Rights" means Patent Rights with respect to AGT Technology. "GENOVO Patent Rights" means Patent Rights with respect to GENOVO Technology.


1.40 "PRODUCT" means DNA or RNA, alone or contained within a Vector, including, without limitation, therapeutic genes, regulatory genes, apoptosis-inducing genes, promoters and enhancers, for use in the Field developed or to be developed by the Joint Venture itself, by either party alone as permitted hereunder, or by the Joint Venture in conjunction with Licensees or other third parties; provided that "Product" shall not include any nucleic acid or a functional analog, derivative or homologue thereof which is complementary to a segment of DNA of a gene or such gene's cognate RNA and which upon delivery by any means,


8 10 alters the transcription, processing, elaboration, RNA expression or protein production of or by such gene (e.g., antisense, ribozyme or triplex products).


1.41 "R&D PROGRAM" means the collaborative research and development program in the Field, consisting of the Research Phase and the Development Phase, to be conducted by AGT and GENOVO pursuant to Article 4 of this Agreement and reflected in the Annual R&D Plans.


1.42 "R&D STEERING COMMITTEE" or "RDSC" means the committee created pursuant to Section 4.6.


1.43 "RESEARCH PHASE" means those activities of the R&D Program the objective of which is to develop and demonstrate the functionality of a system for Gene Therapy utilizing the AGT Technology and the GENOVO Technology and thereafter to improve and further develop such system and to identify candidate Products, Dimerizer Drugs and Apoptosis Dimerizers. The Research Phase may be conducted simultaneously with activities in the Development Phase.


1.44 "TECHNOLOGY" means and includes all inventions, discoveries, improvements, trade secrets and proprietary methods and materials, whether or not patentable, including but not limited to, samples of, methods of production or use of, and structural and functional information pertaining to, chemical compounds, DNA vectors, cells, antibodies, other proteins or other biological substances, including DNA sequence information and information pertaining to the three-dimensional structure of proteins and other substances; other data; formulations; techniques; and know-how; including any negative results. "Technology" of a party includes Technology owned by a party or licensed to that party with a right to grant sublicenses.


1.45 "TERM" means the term of this Agreement as set forth in Article 9.


1.46 "TERRITORY" means the world.


1.47 "TRANSACTION" has the meaning set forth in Section 8.1 hereof.


9 11 1.48 [*] Conjugate.


2. FORMATION OF THE JOINT VENTURE


2.1 FORMATION. The parties hereto hereby agree to associate themselves for the purpose of jointly creating Technology for use in the Field and developing, registering, licensing, manufacturing, marketing, promoting, distributing and selling Products, Dimerizer Drugs and Apoptosis Dimerizers in the Field in the Territory (the "Joint Venture"), through the Joint Venture itself, by either party alone as permitted hereunder, or by the Joint Venture in conjunction with Licensees or other third parties. Such Joint Venture shall be conducted, operated and administered solely in accordance with the terms of this Agreement, and no separate jointly owned corporate or other entity or entities shall be established for the purpose of conducting or administering the joint efforts and endeavors of the parties hereunder, except as contemplated in Section 2.9 hereof.


2.2 SHARING OF COSTS/EXPENSES AND PROCEEDS. AGT and GENOVO shall be equal participants in the Joint Venture and, subject to the provisions of Section 4.5 relating to funding of the Development Phase of the R&D Program and of Sections 8.3.2, 8.4.1 and 8.4.2 relating to the reimbursement to AGT and GENOVO, as the case may be, of certain costs relating to the Commercialization Program, AGT and GENOVO shall, as provided herein, share equally in the costs and proceeds of the Joint Venture. Each party hereby agrees to pay any obligations incurred by it in connection with its obligations hereunder on a timely basis.


2.3 [*]


2.4 PATENT RIGHTS. AGT and/or GENOVO, as the case may be, shall grant to each other such licenses or sublicenses to Patent Rights or Technology, if any, as the Management Committee shall deem reasonably necessary in order to effectuate or protect the activities in the Field contemplated by this Agreement. AGT hereby specifically grants to GENOVO a non-exclusive license under the AGT Technology and AGT Patent Rights for the purpose of


10 12 developing and manufacturing Vectors and Products for use in the R&D Program but not for any other purpose.


2.5 OTHER ACTIVITIES OF THE PARTIES. The parties hereby acknowledge that (i) [*]. The following Sections 2.5.1 and 2.5.2 apply solely with respect to such [*].


2.5.1. AGT Exclusion. Upon written notice to GENOVO given by AGT prior to [*], AGT shall have the right to exclude any or all of the following areas from the Field hereunder: (i) products designed to produce and/or deliver [*]; (ii) products for [*]; and (iv) products closely related to any of the foregoing which may be within modifications of the definitions of the areas described in clauses (i), (ii) and (iii) that occur as a result of [*] and which would not materially affect the scope of the remainder of the Field in a manner different from exclusion of the areas described in clauses (i), (ii) and (iii). Any such exclusion shall be deemed effective as of the Effective Date of this Agreement. AGT will provide GENOVO with a copy of any agreement relating to such exclusion or a detailed description of the terms thereof, with certain material terms redacted. After [*], AGT shall no longer have the right to exclude any or all of the foregoing areas from the Field or to enter into an agreement with respect to such areas in the Field except pursuant to this Agreement.


2.5.2. GENOVO Exclusion. (i) In the event GENOVO proposes to enter into an agreement with Biogen, Inc. with respect to [*] which would be in the Field if not excluded pursuant to this Section, GENOVO may give written notice (a "Preliminary Notice") to AGT of such desire, specifying the specific [*] involved and such other material terms and information as may be available with respect to the proposed transaction. AGT will use commercially reasonable efforts to respond to the Preliminary Notice within thirty (30) days of receipt thereof, indicating its then current view as to whether or not it is willing to consider the exclusion of such gene or genes from the Field upon receipt of a Definitive Notice.


11 13
(ii) Upon written notice (a "Definitive Notice") to AGT given by GENOVO prior to [*], GENOVO shall have the right to request the Management Committee to approve the exclusion of any or all of the following areas from the Field hereunder: [*]. A Definitive Notice shall be accompanied by a copy of the proposed agreement or a detailed description of the terms thereof. GENOVO will advise AGT and the Management Committee of all material changes to the agreement or terms. The Management Committee shall not be required to act until a final form of the proposed agreement is furnished to the Management Committee, and shall only be required to consider exclusions if the relevant agreement is to be executed on or before [*]. Any such approval by the Management Committee shall require written consent of AGT, which shall not be unreasonably withheld if the proposed agreement is consistent with the Preliminary Notice, pursuant to a favorable AGT Decision before it shall become effective, such AGT Decision to be made within thirty days of the notice to AGT given by GENOVO hereunder, but in no event later than [*]. Notwithstanding the foregoing, no such exclusion will in any way limit the Joint Venture's ability to use GENOVO Technology except in conjunction with [*]. Any such exclusion shall be deemed effective as of the Effective Date of this Agreement. After [*], GENOVO shall no longer have the right to present a Preliminary Notice or Definitive Notice to the Management Committee or to enter into an agreement with respect to any genes in the Field except pursuant to this Agreement.


2.6 ADMINISTRATION. The program, operations and business of the Joint Venture shall be administered by the Management Committee and the R&D Steering Committee in accordance with the provisions of Articles 3 and 4 hereof.


2.7 ACCOUNTING INFORMATION. During the term of this Agreement, each party shall provide annual audited and quarterly unaudited consolidated corporate financial statements to the Chief Financial Officer or designee of the other party. Each party shall also provide quarterly accounting information to the Management Committee as specified in Sections 4.5 and 8.4 hereof,


12 14 as well as any other accounting information reasonably requested by the Management Committee.


2.8 PURPOSES AND SCOPE. The parties hereto understand and agree that this Joint Venture is limited solely to the Field in the Territory and to the activities, rights and obligations as set forth in this Agreement. Nothing in this Agreement shall be construed (i) to create or imply a general partnership between the parties, (ii) to make either party the agent of the other for any purpose, (iii) to alter, amend, supersede or vitiate any other arrangements between the parties with respect to any subject matters not covered hereunder, (iv) to give either party the right to bind the other, (v) to create any duties or obligations between the parties except as expressly set forth herein, or (vi) to grant any direct or implied licenses or any other right other than as expressly set forth herein.


2.9 LEGAL STRUCTURE. The parties acknowledge that it may be advisable and in their mutual interests and the interests of the Joint Venture for the business of the Joint Venture to be conducted in a limited liability partnership, limited liability company, corporation, or other type of legal structure instead of the structure set forth herein, if a material change in the Joint Venture's business or other changes in circumstances shall occur. In the event that the Joint Venture elects to pursue a Development Project pursuant to the terms of Article 8 hereof, except to the extent otherwise expressly agreed in writing, the parties shall conduct such activities only through such an alternative legal structure and under the terms of an agreement to be negotiated in good faith between the parties hereto. In addition, either party shall have the right at any time to recommend a change in the legal structure of the Joint Venture with respect to the activities to be conducted hereunder. Any such change shall be considered by the other party in good faith, but may only be made pursuant to a favorable AGT Decision and a favorable GENOVO Decision.


2.10 MUTUAL SUPPORT. Each Party shall, by meeting with existing or prospective investors, underwriters or investment


13 15 bankers to discuss the Joint Venture, reasonably assist the other, upon reasonable request, in any efforts of such other party to obtain additional financing during the term of this Agreement.


3. ADMINISTRATION OF THE JOINT VENTURE


3.1 DECISION MAKING. Subject to any express provisions of this Agreement designating decisions as Consultative Decisions, AGT Decisions or GENOVO Decisions, or otherwise specifically reserving to either AGT or GENOVO, as the case may be, the right to make unilateral decisions concerning the research, development, registration, supply, licensing and commercialization programs of the Joint Venture as provided her ...