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Codevelopment And License Agmt.

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Sectors: Biotechnology / Pharmaceuticals
Governing Law: New York, View New York State Laws
Effective Date: December 29, 1995
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EXHIBIT 10.47


***Omitted Information Denoted by Asterisks (***) Has Been Separately Filed with the Commission and is Subject to a Confidential Treatment Request***


CODEVELOPMENT AND LICENSE AGREEMENT


THIS CODEVELOPMENT AND LICENSE AGREEMENT (the "Agreement") is entered into and effective this 29th day of December 1995, by and between HOUSTON BIOTECHNOLOGY INCORPORATED, a Delaware corporation located in The Woodlands, Texas ("Licensor"), and SANTEN PHARMACEUTICAL CO., LTD., a company located in Osaka, Japan ("Licensee").


WITNESSETH:


WHEREAS, Licensor is the exclusive worldwide licensee of certain patent rights owned by Baylor College of Medicine ("Baylor") pursuant to an agreement between Licensor and Baylor dated as of June 19, 1984 (the "Baylor License"), all of which patent rights are described on Schedule A hereto (collectively, the "Patent Rights").


WHEREAS, Licensor has developed a product coming within such Patent Rights, the 4197X-RA Immunotoxin (the "Immunotoxin"), for the treatment and prevention of secondary cataract (or lens capsule opacification), has developed technical know how related to the manufacture, testing, formulation, packaging and administration of the Immunotoxin, has conducted and is conducting preclinical and clinical trials with the Immunotoxin, and is developing the Immunotoxin for the purpose of obtaining marketing approval of the U.S. Food and Drug Administration (the "FDA") and similar agencies in major countries around the world.


WHEREAS, Licensee desires to obtain from Licensor a nontransferable, exclusive license under the Patent Rights and to use the Licensed Know How and to sell the Licensed Product in the Licensed Territory (as those terms are hereinafter defined), and Licensor is willing to grant such license to Licensee subject to the terms and conditions of this Agreement;


WHEREAS, Licensee has the experience and technical know how to conduct preclinical and clinical studies with respect to the Licensed Product, to obtain government approvals for the sale of the Licensed Product and effectively to exploit the Licensed Product in the Licensed Territory;


WHEREAS, Licensor and Licensee desire to enter into this Agreement to define the terms and conditions on which Licensor will license the Licensed Product under the Patent Rights and Licensed Know How to Licensee;


NOW, THEREFORE, for and in consideration of the mutual covenants and conditions hereinafter set forth, the parties agree as follows:


1. DEFINITIONS


Whenever used in this Agreement, the following terms shall have the meanings set forth below:


(a) "Affiliate" shall mean any person or entity that controls,
is controlled by, or is under common control with, any other person or
entity. For purposes of this definition, "control" means beneficial
ownership, directly or indirectly, of more than fifty percent (50%) of
the outstanding voting securities or equity of such entity (or other
equivalent ownership interest with respect to an entity other than a
corporation).


(b) "Bridge Study" shall mean the first human clinical study
by Licensor using the Refined Immunotoxin, as further described on
Schedule B to this Agreement as modified, amended or updated by
Licensor from time to time.


(c) "Improvement" shall mean any development by Licensor or
Licensee, including know how, that enhances the effectiveness of the
Licensed Product, other than manufacturing process improvements, and
excluding distinguishable compounds. For purposes of this Agreement,
the Refined Immunotoxin shall constitute an Improvement to the Licensed
Product.


(d) "Invention" shall mean a patentable discovery related or
relating to the Licensed Product made by Licensor or Licensee during
the term of this Agreement.


(e) "Licensed Indication" shall mean prevention and treatment
of secondary cataract and lens capsule opacification.


(f) "Licensed Know How" shall mean all information in the
possession of Licensor, in addition to the Patent Rights, of benefit to
Licensee in the performance of its obligations under this Agreement,
whether or not patentable, constituting materials, methods, processes,
trade secrets, techniques and data, and which Licensor is free to
license or disclose to Licensee without violating existing contractual
obligations to third parties, or contractual obligations entered into
after the date of this Agreement pursuant to which new information is
obtained, licensed or developed; provided, however, Licensed Know How
shall not include any information independently developed by Licensee
prior to, during or after the term of this Agreement.


(g) "Licensed Product" shall mean the Immunotoxin and
Improvements thereto (including the Refined Immunotoxin), as further
described in Schedule C to this Agreement.


(h) "Licensed Territory" shall mean Japan.


(i) "Manufacturing Cost" shall mean the fully burdened cost
per Unit of manufacturing Licensed Product, calculated by using the
direct and indirect cost of labor, materials and overheads computed in
accordance with standard cost accounting principles consistently
applied, and divided by the number of Units produced.


(j) "Milestone Product Development Payments" shall mean the
Milestone Product Development Payments made to Licensor by Licensee as
described in Section 3.


(k) "Net Sales" shall mean the revenues earned by Licensee
from Sales of the Licensed Product, net of all applicable discounts,
returns and credits in the ordinary course of business. Net Sales does
not include any sales, use, VAT or other similar taxes.


(l) "Net Sales Price per Unit" shall mean Net Sales divided by
the number of Units Sold for comparable periods.

(m) "Prime Rate" shall mean the prime lending rate or
reference rate announced from time to time by Bank of America.


(n) "Product Development Payments" shall mean the Product
Development Payments to be made to Licensor by Licensee as described in
Section 3.


(o) "Refined Immunotoxin" shall mean the Immunotoxin in its
most refined condition as of the date of this Agreement, as further
described in Schedule C to this Agreement.


(p) "Sale", "Sold" or "Sell" shall mean the transfer or
similar disposition on an arm's-length basis of Licensed Product for
value or use of Licensed Product to provide non-experimental services
to a third party for a fee determined on an arm's-length basis.
Licensed Product shall be considered Sold when invoiced. The use of
Licensed Product in clinical trials and for promotional demonstration
shall not be considered uses for which a royalty is payable.


(q) "Unit" shall mean a single dose of Licensed Product.


2. LICENSE


2.1 Licensor hereby grants to Licensee an exclusive license under the Patent Rights to use the Licensed Product in clinical trials and for such other purposes as are reasonably necessary to permit Licensee to cause the Licensed Product to be approved for Sale in the Licensed Territory and to Sell directly or indirectly through third party distributors the Licensed Product in the Licensed Territory for the Licensed Indication, and an exclusive license to use the Licensed Know How in the Licensed Territory for the Licensed Indication (the "License").


2.2 (a) Licensee shall not use the Licensed Product for purposes other than those specifically authorized herein, nor make any Sale of Licensed Product outside the Licensed Territory or other than for the Licensed Indication. All Licensed Product purchased by Licensee shall be purchased exclusively from Licensor.


(b) Ninety days prior to the start of each quarter, Licensee shall give Licensor written notice of its requirements of Licensed Product for such quarter, and Licensor shall use its commercially reasonable best efforts to provide Licensee with its requirements. In fulfilling its obligations hereunder, Licensor may contract with third parties to manufacture Licensed Product. Licensee agrees to purchase from Licensor all of the Licensed Product it has notified Licensor that it requires.


(c) In the event Licensor consistently is unable to provide Licensee's requirements of Licensed Product, Licensee shall have the right and license under the Patent Rights to manufacture and have manufactured, the Licensed Product (which shall include the right to use the Licensed Know How in connection with such manufacture), subject to Licensee's obligations to pay royalties to Licensor as provided in Article 4 of the Agreement.


2.3 Except as otherwise provided in Article 11, the License granted hereby is non-transferable by Licensee, directly or indirectly, and Licensee may not grant any sublicenses of the Licensed Product or the Licensed Know How.


2.4 During the term of this Agreement so long as Licensee is continuing to make discretionary Milestone Product Development Payments and Product Development Payments for the development of the Licensed Product and so long as Licensee is obligated to make royalty payments under Article 4 of this Agreement, Licensee agrees that it will not, directly or indirectly, for its own account or that of an Affiliate undertake the formulation of clinical programs, conduct clinical trials, attempt to have approved for sale in the Licensed Territory or sell in the Licensed Territory any product for the Licensed Indication comprised of a protein conjugated to a toxin that is selective for and kills or inhibits the proliferation of lens epithelial cells other than the Licensed Product.


2.5 Licensor hereby grants Licensee a right of access to and use for the purposes of this Agreement of all experimental or other data in the possession of or reasonably available to Licensor which relate in any manner to the Licensed Product, including without limitation, all data which Baylor or Licensor has provided to the FDA or any other state, federal, foreign or local regulatory authority which relate in any manner to the Licensed Product. Licensee hereby grants Licensor a right of access to and use of all experimental or other data in the possession of or reasonably available to Licensee which relate in any manner to the Licensed Product, including without limitation, all data which Licensee has provided to the Japanese Ministry of Health and Welfare ("MHW") or any other regulatory authority which relate in any manner to the Licensed Product. Nothing in this section shall require either Licensor or Licensee to violate any confidentiality or other similar obligation.


2.6 Licensor shall promptly provide Licensee and shall continue to provide Licensee, during the term of this Agreement, with all requested information relating to (i) pharmacological, toxicological or clinical data, (ii) formulative or analytical data, and (iii) such other chemical, physical or biological data which Licensor may now or in the future possess or control which relates in any manner to the Licensed Product and which Licensor is permitted to disclose to Licensee.


2.7 The License granted hereby shall be exclusive only for so long as Licensee continues to make the discretionary Milestone Product Development Payments and Product Development Payments described in Article 3 hereof, and is not otherwise in default under its other obligations hereunder. In addition to any other remedies that Licensor may have hereunder, in the event that Licensee fails to make any Milestone Product Development Payment or Product Development Payment or is otherwise in default hereunder, Licensor may convert the License granted herein to a nonexclusive license.


2.8 The License granted herein shall be subject to termination only as set forth in Section 9 hereof.


3. LICENSEE'S OPTION TO MAKE MILESTONE PRODUCT DEVELOPMENT PAYMENTS AND PRODUCT
CODEVELOPMENT PAYMENTS; LICENSOR'S CLINICAL TRIALS


3.1 Licensee in its discretion may contribute research and development funds for services for the development of the Licensed Product by making the following Milestone Product Development Payments to Licensor:


Milestone 1 Product Development Payments:


(a) a payment of $166,667 within five days of the
date hereof; and


(b) a payment of $166,667 within thirty days of the
date hereof; and


(c) a payment of $166,667 within sixty days of the
date hereof; and


(d) a payment of $166,667 within ninety days of the
date hereof; and


(e) a payment of $83,332 within one hundred twenty
days of the date hereof.


Licensee shall give Licensor five (5) days advance written
notice of its decision not to make any of the foregoing discretionary
payments.


Milestone 2 Product Development Payments:


(f) Within sixty days of the delivery to Licensee of
the results of the interim report from the Bridge Study,
Licensee in its discretion may pay to Licensor the sum of
$1,000,000 as a Milestone Product Development Payment as
additional research and development funds for services for the
development of the Licensed Product.


(g) In the event Licensee does not make the payment
described in Section 3.1(f) within sixty days following
delivery of the results of the interim report, within thirty
days of the time that Licensor enrolls the first patient in
Phase III clinical trials on the Licensed Product, Licensee in
its discretion may pay to Licensor the $1,000,000 Milestone
Product Development Payment.


3.2 Upon Licensee's giving the five (5) days advance written notice of its decision not to make any of the discretionary Milestone 1 Product Development Payments or its failure to make any of the Milestone 2 Product Development Payments, other than that provided for in Section 3.1(f), when due, Licensor may terminate this Agreement, provided, however, that no termination of this Agreement shall relieve Licensor or Licensee of any of its undischarged obligations to the other.


3.3 Commencing January 1, 1996, until December 31, 2001, Licensee in its discretion may contribute additional research and development funds for services for the development of the Licensed Product by making quarterly Product Development Payments to Licensor in the amount of $250,000 each. The Product Development Payments shall be due and payable on February 14, May 15, August 15 and November 14 of each year in which such payments are to be made.


Licensee shall give Licensor sixty (60) days advance written notice of its decision not to make any of the foregoing discretionary payments.


3.4 Upon Licensee's giving the sixty (60) days advance written notice of its decision not to make any of the discretionary quarterly Product Development Payments provided for in Section 3.3, or its failure to make any of the Product Development Payments when due, Licensor may terminate this Agreement; provided, however, that no terminati
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