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Strategic Collaboration and License Agreement
Strategic Collaboration and License Agreement (214K)
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STRATEGIC COLLABORATION AND
LICENSE AGREEMENT
This Strategic Collaboration and License Agreement (the "Agreement")
is effective as of March 11, 2004 (the "Effective Date") between Isis
Pharmaceuticals, Inc., a Delaware corporation having an address at 2292 Faraday
Avenue, Carlsbad, CA 92008 ("Isis") and Alnylam Pharmaceuticals, Inc., a
Delaware corporation having an address at 790 Memorial Drive, Suite 202,
Cambridge, MA 02139 (together with its wholly owned subsidiaries Alnylam U.S.,
Inc., a Delaware corporation, and Alnylam Europe AG, a company organized under
the laws of Germany, "Alnylam"). Isis and Alnylam may be referred to herein as
the "Parties," or each individually as a "Party."
GUIDING PRINCIPLES
Isis is the leader in RNA-based drug discovery, has created
technology, intellectual property, expertise, facilities and resources to
discover and develop oligonucleotide drugs;
Alnylam is the leader in RNAi therapeutics, has developed and
acquired intellectual property, expertise and technology in RNAi therapeutics,
and is conducting research and drug discovery focused on Double Stranded RNA
drugs;
Isis and Alnylam desire to create a long-term strategic relationship
that will enhance the positions of both companies in RNA-based drug discovery;
Isis will continue to pursue RNA-based drug discovery technology very
broadly including all potential mechanisms of action. Isis will work with
Alnylam as Isis' primary means of participating in the potential value of Double
Stranded RNA Products, and will not enter into any collaborations with Third
Parties the primary purpose of which is to discover Double Stranded RNA
Products; and
Alnylam will focus on RNAi therapeutics and the use of Double
Stranded RNA.
The objectives of the strategic relationship are to:
- Enhance the leadership of Alnylam in RNAi therapeutics.
- Enhance the potential of Alnylam to develop Double Stranded RNA drugs.
- Defer Alnylam investments in Chemistry, Manufacturing and Controls (CMC).
- Enhance the patent positions of each Party with respect to Double Stranded
RNA drugs.
- Provide Isis with a means for participating in the success of RNAi
therapeutics.
ARTICLE 1
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DEFINITIONS; EXHIBITS AND SCHEDULES
1.1 Capitalized terms used herein and not defined elsewhere herein have
the meanings set forth in Exhibit 1.1.
1.2 On or before March 19, 2004, the Parties shall both execute a mutually
satisfactory addendum transmittal instrument (the "Addendum Transmittal")
delivering all Exhibits and Schedules identified herein as attached to the
Addendum Transmittal.
ARTICLE 2
EQUITY INVESTMENT
2.1 Isis will purchase from Alnylam Pharmaceuticals, Inc., and Alnylam
Pharmaceuticals, Inc. will sell to Isis, 1,666,667 shares of Series D Preferred
Stock, at $6.00 per share (i.e., at an aggregate purchase price of $10,000,002),
on the terms contained in the Equity Documents.
ARTICLE 3
MANUFACTURING SERVICES RELATIONSHIP
3.1 At Alnylam's request, on the terms and conditions of the Manufacturing
Services Term Sheet attached hereto as Exhibit 3.1 attached to the Addendum
Transmittal, Isis and Alnylam will negotiate in good faith a manufacturing
services agreement (the "Manufacturing Services Agreement"), pursuant to which
Isis will provide Alnylam with manufacturing and related services relating to
Double Stranded RNA Products.
ARTICLE 4
COLLABORATIVE RESEARCH EFFORTS
4.1 Research Management Committee.
(A) To promote the success of the collaboration objectives and RNAi
technology, the Parties will establish a Research Management Committee ("RMC"),
which will be comprised of equal numbers of representatives of each of the
Parties and will meet at least twice per calendar year, alternating venues
between the vicinities of Cambridge, Massachusetts and Carlsbad, California, to
share scientific direction and data, to coordinate basic research experiments,
and to facilitate the guiding principles of the collaboration.
(B) Intellectual property representatives of each Party will be
invited to participate in RMC meetings and such meetings will provide a forum to
discuss patent prosecution and enforcement issues and to allocate responsibility
for the filing and prosecution of any Joint Patents.
(C) The Parties will use the RMC as a forum to update one another
regarding their respective Future Chemistry and Motif and Mechanism Patents.
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(D) The RMC will establish a clearance policy that will govern any
publication or presentation by a Party in which such Party proposes to include
any previously undisclosed information or intellectual property Controlled by
the other Party.
(E) The RMC will continue in existence for three (3) years after the
Effective Date, subject to extension by mutual agreement of the Parties. Upon
termination of the RMC, the Parties will agree upon a strategy to make decisions
about the items in Sections 4.1 (b), (c), and (d).
ARTICLE 5
LICENSES GRANTED BY ISIS TO ALNYLAM
5.1 License Grants. Subject to the terms and conditions of this Agreement,
including, but not limited to, the restrictions set forth in Section 5.3, Isis
grants Alnylam the following licenses:
(A) Under Isis Current Motif and Mechanism Patents and Isis Current
Chemistry Patents, a license to research, develop, make, have made, use, import,
offer to sell and sell Double Stranded RNA and Double Stranded RNA Products.
(B) Subject to the terms of Section 11.8, under Isis Future Motif
and Mechanism Patents, Isis Future Chemistry Patents and Isis' rights in Joint
Patents, a license to research, develop, make, have made, use, import, offer to
sell and sell Double Stranded RNA and Double Stranded RNA Products.
(C) Under the Isis Current Motif and Mechanism Patents and Isis
Current Chemistry Patents, a license to research, develop, make, have made, use,
import, offer to sell and sell MicroRNA Products.
(D) Subject to the terms of Section 11.8, under the Isis Future
Motif and Mechanism Patents and Isis Future Chemistry Patents, a license to
research, develop, make, have made, use, import, offer to sell and sell MicroRNA
Products.
(E) A royalty-free, fully paid, license to practice any Know-How
disclosed to Alnylam during the performance of this Agreement, subject to the
non-disclosure but not the non-use provisions contained in Article 12.
(F) A fully paid, royalty-free nonexclusive license under Isis
Manufacturing Patents to research, develop, make, have made, use and import
Alnylam Products for Research Use.
5.2 License Exclusivity, Territory and Sublicenses.
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(A) Subject to the terms and conditions of this Agreement, including
the restrictions set forth in Section 5.3, the licenses from Isis to Alnylam
granted in Sections 5.1(a) and (b) are worldwide and co-exclusive (with Isis),
with the exclusive right to grant Naked Sublicenses, and the licenses from Isis
to Alnylam granted in Sections 5.1 (c), (d), (e) and (f) are worldwide and
nonexclusive. Alnylam is not permitted to grant sublicenses under the licenses
granted in Sections 5.1(a) through 5.1(e), except that Alnylam is permitted to
grant (i) sublicenses in connection with a Bona Fide Drug Discovery
Collaboration, (ii) sublicenses in connection with a Development Collaboration,
(iii) Naked Sublicenses and (iv) sublicenses under the license granted in
Section 5.1(e) in connection with the discovery, development or
commercialization of any product. Alnylam is not permitted to grant sublicenses
under the licenses granted in Section 5.1(f).
(B) If Alnylam, on its own or through an Affiliate or collaborator
in a Bona Fide Drug Discovery Collaboration, has not reached the [**] stage of
development with any Alnylam Product by [**], the exclusive right to grant Naked
Sublicenses under the licenses granted in Sections 5.1(a) and 5.1(b) will
convert to a nonexclusive right.
(C) Alnylam cannot sublicense its right to grant Naked Sublicenses
under this Agreement except that Alnylam may permit its sublicensees to grant
further sublicenses in connection with an Alnylam Product.
(D) Notwithstanding the foregoing, Isis may (i) complete its pending
transaction with [**], provided that in such transaction Isis only grants to
[**] a nonexclusive license under Isis Current Motif and Mechanism Patents and
Isis Current Chemistry Patents for the manufacture and sale of chemically
modified oligonucleotides for research use only and (ii) continue to grant
licenses to Third Parties for the purpose of manufacturing and selling
oligonucleotides; provided that, to the extent such licenses cover Double
Stranded RNA, Isis will restrict such licenses to non-therapeutic uses.
5.3 Limitations on Licenses.
(A) The licenses granted under Section 5.1 above are not intended to
grant any rights to Alnylam to practice the Isis Excluded Technology. If Alnylam
wishes to license any Isis Excluded Technology for which Isis has the right to
grant a license or sublicense, Isis will negotiate in good faith an appropriate
license.
(B) Notwithstanding the licenses granted to Alnylam under Section
5.1, Isis retains its rights in the Isis Patent Rights and in the Joint Patents
(i) exclusively for the Isis Exclusive Targets and (ii) exclusively for the Isis
Encumbered Targets. Once a particular contractual restriction expires on an Isis
Encumbered Target, Alnylam's licenses under Section 5.1 will no longer be
limited under this Section 5.3(b) for such target and such target shall no
longer be an Isis Encumbered Target. Isis will update the [**] (as defined in
the letter agreement dated March 9, 2004 between Alnylam and Isis) provided to
Alnylam prior to the Effective Date and subsequent [**] provided to Alnylam
from time to time to remove targets that are no longer Isis Encumbered Targets
promptly upon receipt of a written request from Alnylam to update such [**],
but will not be required to update such [**] more frequently than once a
calendar quarter.
(C) Licenses to Isis Patent Rights that are joint patents with Third
Parties (i.e., invented by one or more Isis inventors and one or more non-Isis
inventors) are licensed subject to the retained rights of any non-Isis inventors
and their assignees and licensees. Any
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such retained rights of non-Isis inventors and their assignees and licensees
existing as of the Effective Date are set forth in Exhibit 5.3(c) attached to
the Addendum Transmittal.
(D) Licenses to Isis Patent Rights that are subject to contractual
obligations between Isis and Third Parties in effect as of the Effective Date
are licensed subject to the restrictions and other terms described in Exhibit
5.3(d) attached to the Addendum Transmittal. Alnylam hereby agrees to comply,
and to cause its sublicensees to comply, with such restrictions and other terms.
5.4 Alnylam Covenant Regarding Sublicensing of Isis Patent Rights. Alnylam
shall use good faith efforts to include sublicenses under the licenses under the
Isis Patent Rights granted to Alnylam in Sections 5.1(a) and 5.1(b) in any Third
Party collaboration or license agreement in which Alnylam grants rights to
develop and commercialize Double Stranded RNA Products, unless the technology
covered by such licensed Isis Patent Rights would not reasonably be expected to
advance the goals of such Third Party collaboration or license relationship.
ARTICLE 6
LICENSES GRANTED BY ALNYLAM TO ISIS
6.1 License Grants. Subject to the terms and conditions of this Agreement,
including, but not limited to, the restrictions set forth in Section 6.5,
Alnylam grants Isis the following licenses:
(A) A fully-paid, royalty-free, nonexclusive license under Alnylam
Current Motif and Mechanism Patents and Alnylam Current Chemistry Patents to
research, develop, make, have made, use and import Isis Products for Research
Use.
(B) Subject to the terms of Section 11.8, a fully paid, royalty-free
nonexclusive license under Alnylam Future Motif and Mechanism Patents and
Alnylam Future Chemistry Patents to research, develop, make, have made, use and
import Isis Products for Research Use.
(C) A nonexclusive license under Alnylam Current Motif and Mechanism
Patents and Alnylam Current Chemistry Patents to research, develop, make, have
made, use, import, offer to sell and sell Isis Single Stranded Products
(D) Subject to the terms of Section 11.8, a nonexclusive license
under Alnylam Future Motif and Mechanism Patents and Alnylam Future Chemistry
Patents to research, develop, make, have made, use, import, offer to sell and
sell Isis Single Stranded Products.
(E) Under the Alnylam Current Motif and Mechanism Patents and
Alnylam Current Chemistry Patents, a nonexclusive license to research, develop,
make, have made, use, import, offer to sell and sell MicroRNA Products.
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(F) Subject to the terms of Section 11.8, under the Alnylam Future
Motif and Mechanism Patents and Alnylam Future Chemistry Patents, a nonexclusive
license to research, develop, make, have made, use, import, offer to sell and
sell MicroRNA Products.
(G) A worldwide, royalty-free, fully paid, nonexclusive license to
practice any Know-How disclosed to Isis during the performance of this
Agreement, subject to the non-disclosure but not the non-use provisions
contained in Article 12.
6.2 License Option. For each Gene Target in the Isis Target Pool (as
further described below) Alnylam grants Isis an exclusive option to obtain (on a
Reserved Target-by-Reserved Target basis), subject to the terms and conditions
of this Agreement, including, but not limited to, the restrictions set forth in
Section 6.5, a license under (i) Alnylam Current Motif and Mechanism Patents and
Alnylam Current Chemistry Patents and (ii) subject to the terms of Section 11.8,
Alnylam Future Motif and Mechanism Patents, Alnylam Future Chemistry Patents and
Alnylam's rights in Joint Patents, to research, develop, make, have made, use,
import, offer for sale and sell Double Stranded RNA and Double Stranded RNA
Products.
(A) This license, when the option is exercised, will be exclusive
with respect to Isis Exclusive Targets and co-exclusive (with Alnylam) with
respect to Isis Co-Exclusive Targets.
(B) This option will expire on a Reserved Target-by-Reserved Target
basis if Isis has not paid Alnylam the option fee set forth in Section 8.1 below
before the earlier of (i) [**] with respect to such Reserved Target, (ii) the
[**] anniversary of the date such Reserved Target [**] or the [**] anniversary
of the date such Reserved Target [**] and Isis is [**] or (iii) the date [**]
with respect to such Reserved Target.
(C) For any Reserved Target for which Isis obtains a license from
Alnylam under this Section 6.2, Isis will use Commercially Reasonable Efforts
(either on its own or in an Antisense Drug Discovery Program or Development
Collaboration) to develop and commercialize Double Stranded RNA Products that
modulate such Reserved Target.
6.3 Sublicenses.
(A) With respect to any license granted by Alnylam pursuant to
Section 6.1(a), 6.1(b) or 6.2, Isis may only grant a sublicense to a Third Party
solely for the purpose of enabling such Third Party to collaborate with Isis in
an Antisense Drug Discovery Program or to develop and commercialize an Isis
Product in a Development Collaboration. With respect to any license granted by
Alnylam pursuant to Section 6.1(c), 6.1(d), 6.1(e), 6.1(f) or 6.1(g), Isis may
grant a sublicense to a Third Party in connection with the discovery,
development or commercialization of any product.
(B) Notwithstanding anything in this Agreement to the contrary, Isis
may not enter into any drug discovery collaboration the primary purpose of which
is to discover Double Stranded RNA Products and/or to develop Double Stranded
RNA Products to any point up to the [**].
6.4 Target Pool.
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(A) Reserved Target Slots. Initially, Isis will have a pool (the
"Isis Target Pool") containing up to [**] slots for which Isis can designate
certain Gene Targets solely for Antisense Drug Discovery Programs (each such
slot, a "Target Slot" and any Gene Target occupying such a slot, a "Reserved
Target"); provided, however, that on January 1 of each year starting with
January 1, [**], Isis will gain the right to purchase one additional Target Slot
by paying Alnylam [**] per each additional Target Slot, which additional Target
Slot shall be a Co-Exclusive Target Slot except as otherwise provided in Section
6.4(f). These rights are cumulative and, subject to Section 17.2(c) do not
expire during the License Term. Furthermore, in the event that Isis pays the
$[**] license option fee for a Reserved Target pursuant to section 8.1, such
Reserved Target will be considered to have graduated from the Isis Target Pool,
and, subject to Section 6.4(e), Isis will be permitted to designate a new
Reserved Target to fill the open Target Slot in the Isis Target Pool.
(B) Initial Designations; Conversion of Target Slots. Initially,
subject to Section 6.4(e), Isis can designate up to [**] Reserved Targets as
Isis Exclusive Targets (the "Isis Exclusive Targets", and each Target Slot
occupied by an Isis Exclusive Target, an "Exclusive Target Slot") and up to [**]
Reserved Targets as Isis Co-Exclusive Targets (the "Isis Co-Exclusive Targets",
and each Target Slot occupied by an Isis Co-Exclusive Target, a "Co-Exclusive
Target Slot"). On January 1 of each year starting with January 1, [**], one of
the [**] initial Co-Exclusive Target Slots will convert into an Exclusive Target
Slot such that the initial [**] Target Slots will all be Exclusive Target Slots
by January 1, [**]. Subject to section 6.4(f), the Isis Co-Exclusive Target in a
Co-Exclusive Target Slot that converts to an Exclusive Target Slot will become
an Isis Exclusive Target.
(C) Removing/Adding/Redesignating Targets. After the Effective Date
and no more than [**] period (a "Target Reallocation Period"), Isis may do any
of the following:
(i) Remove a Gene Target from the Isis Target Pool (which,
following such removal will create an open Target Slot);
(ii) Add a new Gene Target to any open Target Slot (subject to
the procedures and provisions of Section 6.4(e); or
(iii) Redesignate an Isis Co-Exclusive Target as an Isis
Exclusive Target, provided that (A) an open Exclusive Target
Slot is available, which may be made available by Isis's
simultaneous redesignation of an Isis Exclusive Target as an
Isis Co-Exclusive Target, and (B) Alnylam does not have an
Active Program with respect to such Isis Co-Exclusive Target
or has not entered into a Bona Fide Drug Discovery
Collaboration or Development Collaboration that prevents
Alnylam from granting Isis an exclusive license with respect
to such Isis Co-Exclusive Target.
Notwithstanding the foregoing provisions of this Section 6.4(c), in
any Target Reallocation Period, Isis cannot remove or redesignate, or any
combination thereof, a number of Reserved Targets that exceeds the number
calculated by dividing the then current number of Target Slots by [**]and
rounding down to the nearest whole number. For the purpose of the limitation
described in the immediately preceding sentence, (x) removing a Gene Target from
the Isis Target Pool and then filling the open Target Slot created by such
removal shall
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count as a single removal and (y) redesignating an Isis Co-Exclusive Target as
an Isis Exclusive Target and simultaneously redesignating an Isis Exclusive
Target as an Isis Co-Exclusive Target in order to make available an open
Exclusive Target Slot to permit the former redesignation shall count as a single
redesignation. Once Isis removes a Gene Target from the Isis Target Pool, Isis
will be prevented from later adding such Gene Target to the Isis Target Pool
until [**] have passed from the date Isis removed such Gene Target.
(D) New Target Request. When Isis wishes to add a new Gene Target to
occupy a vacant Target Slot, it will provide Alnylam with written notice (the
"Request Notice") of the Gene Target it wishes to add (the "Proposed Reserved
Target"). The Request Notice will include the gene name, the NCBI accession
number or nucleic acid sequence for the Proposed Reserved Target and whether
Isis wants the Proposed Reserved Target, if accepted, to be an Isis Exclusive
Target or an Isis Co-Exclusive Target.
(E) New Target Rejection/Approval. Within [**] of receipt of the
Request Notice, Alnylam will give Isis written notice if any of the criteria set
forth below applied to such Proposed Reserved Target at the time of Alnylam's
receipt of the Request Notice. If, at such time, the Proposed Reserved Target is
(i) subject to Alnylam's own Active Program [**], (ii) encumbered by a
contractual obligation between Alnylam and a Third Party that would preclude
Alnylam from granting a license under Section 6.2 with respect to the Proposed
Reserved Target or (iii) the subject of Alnylam's good faith negotiations to
enter into a contractual obligation within the [**] following receipt of the
Request Notice with a Third Party (as supported by a written request from such
Third Party) that would preclude Alnylam from granting a license under Section
6.2 with respect to the Proposed Reserved Target, then the Proposed Reserved
Target will be rejected and will not become a Reserved Target. If the Proposed
Reserved Target is not rejected under this subsection (e), the Proposed Reserved
Target will become an Isis Co-Exclusive Target or an Isis Exclusive Target (as
set forth in the Request Notice). If Alnylam can only grant a license to a
Proposed Reserved Target on a co-exclusive basis, it will notify Isis in
writing. Isis will then have the option to accept the Proposed Reserved Target
as one of its Isis Co-Exclusive Targets. Alnylam will promptly notify Isis in
writing if a rejected Proposed Reserved Target later becomes available to be
designated as a Reserved Target or if an Isis Co-Exclusive Target later becomes
available to be designated as an Isis Exclusive Target.
(F) Target Redesignation Procedures. In each year that a
Co-Exclusive Target Slot converts to an Exclusive Target Slot pursuant to
section 6.4(b), Isis will provide Alnylam with written notice designating which
Isis Co-Exclusive Target (the "Proposed Redesignated Target") it wishes to
become an Isis Exclusive Target occupying the new Exclusive Target Slot. Alnylam
will have [**] after the receipt of such notice either to confirm that the
Proposed Redesignated Target has become an Isis Exclusive Target or to disallow
such redesignation. Alnylam may only disallow such redesignation if, at the time
of Alnylam's receipt of Isis' notice regarding the Proposed Redesignated Target,
Alnylam has an Active Program with respect to such Proposed Redesignated Target
or has entered into a contractual obligation with a Third Party that prevents
Alnylam from granting Isis an exclusive license with respect to such Proposed
Redesignated Target. In the event that Alnylam disallows the redesignation of a
Proposed Redesignated Target, Isis will use the same procedure to designate
another Isis Co-Exclusive Target as a Proposed Redesignated Target, and Alnylam
will follow the same procedure to confirm or disallow the redesignation
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of such Proposed Redesignated Target as an Isis Exclusive Target. In the event
that Isis has proposed all of the then-existing Isis Co-Exclusive Targets as the
Proposed Redesignated Target and Alnylam has disallowed each such proposal, then
(i) if the calendar year is [**], Isis will have the right to purchase an
additional [**] Target Slot in [**], or (ii) if the calendar year is [**] Isis'
right to purchase a [**] Target Slot in pursuant to section 6.4(a) will become a
right to purchase an Exclusive Target Slot in such year, or (iii) if the
calendar year is [**] or later, Isis's right to purchase a [**] pursuant to
section 6.4(a) will become a right to purchase a [**], provided, however, that
in no event shall the number of Exclusive Target Slots held by Isis exceed [**].
(G) Diligence on Rejected Targets. If (i) Alnylam rejects a Proposed
Reserved Target under Section 6.4(e) above and (ii) Alnylam has [**] with
respect to such rejected Proposed Reserve Target by the [**] anniversary of the
date Alnylam rejected such Proposed Reserved Target if Alnylam is working on
such target alone, or the [**] anniversary of the date Alnylam rejected such
Proposed Reserved Target if such rejected Proposed Reserved Target is subject to
a contractual obligation between Alnylam and a Third Party that would preclude
Alnylam from granting a license under Section 6.2 with respect to the rejected
Proposed Reserved Target but Alnylam is [**], then [**] such rejected Proposed
Reserved Target [**].
(H) Diligence Obligations in Third Party Contractual Obligations.
With the goal of minimizing contractual encumbrances on Alnylam Patent Rights
with respect to Gene Targets in the absence of a reasonable intent to discover
and develop products that modulate such Gene Targets by Third Parties with which
Alnylam enters into such contractual obligations, Alnylam intends to seek
reasonable diligence obligations from Third Parties in negotiating contracts
between Alnylam and such Third Parties that would constitute contractual
obligations of Alnylam that would preclude Alnylam from granting licenses to
Isis under Section 6.2 with respect to Proposed Reserved Targets or that would
prevent Alnylam from granting Isis exclusive licenses with respect to Proposed
Redesignated Targets; provided that Isis hereby acknowledges that such diligence
obligations are often heavily negotiated in biotechnology license and
collaboration agreements and that this Section 6.4(h) shall not prevent Alnylam
from entering into contracts between Alnylam and Third Parties in accordance
with Alnylam's reasonable business judgment.
(I) Confidentiality. The fact that Isis has designated or removed a
particular Gene Target within the Isis Target Pool is Confidential Information
of Isis, or that Alnylam has rejected a particular Gene Target proposed for a
Target Slot or disallowed the redesignation of a particular Gene Target is
Confidential Information of Alnylam, subject to the provisions of Article 12.
Neither Party shall disclose such Confidential Information of the other Party to
any Third Party, including its Third Party collaborators, or use such
Confidential Information of the other Party to guide its own (or its Third Party
collaborators') decisions to pursue particular Gene Targets, but Alnylam can use
such Confidential Information of Isis to decline a Third Party's request for a
license to such Gene Target.
6.5 Limitations on Licenses.
(A) The licenses granted under Sections 6.1 and 6.2 above are not
intended to grant any rights to Isis to practice the Alnylam Excluded
Technology. If Isis wishes to license any Alnylam Excluded Technology for which
Alnylam has the right to grant a sublicense, Alnylam will negotiate in good
faith an appropriate license.
(B) Licenses to Alnylam Patent Rights that are joint patents with
Third Parties (i.e., invented by one or more Alnylam inventors and one or more
non-Alnylam inventors)
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are licensed subject to the retained rights of any non-Alnylam inventors and
their assignees and licensees. There are no Alnylam Current Chemistry Patents or
Alnylam Current Motif and Mechanism Patents subject to such retained rights.
(C) Licenses to Alnylam Patent Rights that are subject to
contractual obligations between Alnylam and Third Parties in effect as of the
Effective Date are licensed subject to the restrictions and other terms
described in Exhibit 6.5(c) attached to the Addendum Transmittal. Isis hereby
agrees to comply, and to cause its sublicensees to comply, with such
restrictions and other terms.
(D) Notwithstanding anything to the contrary herein, the licenses to
Alnylam Patent Rights hereunder initially shall not include licenses to Patents
licensed by Alnylam from Stanford University under any agreement between Alnylam
and Stanford University in effect as of the Effective Date; provided that if any
such licensed Patents become issued Patents, Isis shall have the option of
expanding its licenses to Alnylam Patent Rights hereunder to include such issued
Patents by notifying Alnylam of such election and agreeing to pay to Alnylam, in
addition to all amounts otherwise payable to Alnylam hereunder (and without any
right under Section 8.2 to reduce such otherwise payable amounts as a
consequence of such additional payment amounts), all amounts that (i) become
payable by Alnylam to Stanford University as a result of such expansion of Isis'
licenses and Isis' (and its Affiliates' and sublicensees') exercise of its
rights thereunder and (ii) are described on Exhibit 6.5(d) attached hereto.
ARTICLE 7
LICENSE FEES AND ROYALTIES PAYABLE TO ISIS
7.1 License Fees. Alnylam will pay an initial, irrevocable, noncreditable
and non-refundable license fee of $5,000,000 to Isis, $3,000,000 of which will
be due within 5 business days of the Effective Date and the remaining $2,000,000
of which will be due on January 3, 2005.
7.2 Royalties. Subject to the terms and conditions of, and during the term
of, this Agreement, Alnylam will pay to Isis royalties on sales of Alnylam
Products by Alnylam, its Affiliates or sublicensees (except Naked Sublicensees)
equal to [**]% of Net Sales. Alnylam may reduce the royalty due under this
section by [**]% of any additional royalties that Alnylam owes to Third Parties
on such Alnylam Product that arise from Alnylam acquiring access to new
technologies after the Effective Date; provided, however that (a) the royalty
due under this section can never be less than a floor of [**]% and (b)
additional royalties arising as the result of the addition, pursuant to Section
11.8, of Isis Future Chemistry Patents or Isis Future Motif and Mechanism
Patents to the Isis Patent Rights licensed to Alnylam cannot be used to reduce
the royalty.
7.3 Development Milestones.
(A) Alnylam, its Affiliates or sublicensees (except Naked
Sublicensees) will pay to Isis the following milestone payments for each Alnylam
Product within [**] after the first achievement of each of the following events:
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{TABLE}
{CAPTION}
MILESTONE EVENT MILESTONE PAYMENT
--------------- -----------------
{S} {C}
Initiation of Phase I Trial US$[**]
Initiation of Phase III Trial US$[**]
Filing IND US$[**]
Marketing Approval US$[**]
{/TABLE}
Each milestone payment under this Section 7.3(a) will only be due on [**]
Alnylam Product that modulates a particular Gene Target to trigger such
milestone payment, whether such milestone is achieved by Alnylam or an Affiliate
or sublicensee of Alnylam.
(B) Alnylam, its Affiliates or sublicensees will pay to Isis a
milestone payment of US$[**] for the [**] MicroRNA Product that is an Alnylam
Product that modulates a particular Gene Target within [**] after such MicroRNA
Product reaches the initiation of [**], and not for any other MicroRNA Product
that is an Alnylam Product that modulates the particular Gene Target.
7.4 Sublicensing Revenue on Naked Sublicenses. Alnylam will pay Isis [**]%
of Sublicense Revenue from Naked Sublicenses granted by Alnylam and its
Affiliates under this Agreement.
7.5 Technology Access Fees from Bona Fide Collaborations.
(A) Alnylam will pay Isis a percentage of Technology Access Fees
received by Alnylam and its Affiliates pursuant to Bona Fide Drug Discovery
Collaborations and Development Collaborations entered into between Alnylam and a
Third Party. Such percentage will be calculated based on the year in which
Alnylam executes such Bona Fide Drug Discovery Collaboration or Development
Collaboration agreement using the following table:
{TABLE}
{CAPTION}
YEAR 2004/2005 2006 2007 2008+
---- --------- ---- ---- -----
{S} {C} {C} {C} {C}
APPLICABLE PERCENTAGE [**]% [**]% [**]% [**]%
{/TABLE}
(B) Notwithstanding the foregoing, for any Bona Fide Drug Discovery
Collaboration or Development Collaboration agreement, Alnylam will pay Isis a
minimum fee, payable upon the first Alnylam Product developed pursuant to such
Bona Fide Drug Discovery Collaboration agreement reaching [**] or within [**]
after the execution of such Development Collaboration agreement, equal to the
lesser of (i) $[**] or (ii) [**]% of the Technology Access Fees from such
collaboration; provided, however that Alnylam may credit any amounts paid Isis
pursuant to Section 7.5(a) above as the result of the same Bona Fide Drug
Discovery Collaboration or Development Collaboration agreement against this
minimum fee with such amounts credited only once, and provided further that if
following such payment, additional Technology Access Fees are owed to Isis for
such Bona Fide Drug Discovery Collaboration or Development Collaboration, the
amounts paid under this Section 7.5(b) (after crediting of any previous
Technology Access Fees paid under Section 7.5(a) in accordance with the
immediately preceding proviso) will be creditable against such future Technology
Access Fees. In addition, for each of (i) the Research Collaboration and License
Agreement between Merck and Co. and Alnylam dated September 8, 2003, as amended
through the Effective Date (the "Merck Agreement") and (ii) the Bona Fide Drug
Discovery Collaboration agreement currently being negotiated by Alnylam (the
"Pending Agreement"), if such agreement is executed within [**] the Effective
Date, [**] any Technology Access Fees [**] a fee of $1,000,000 for the [**]
Alnylam Product for a particular Gene Target from each such agreement that
reaches [**]; provided, however, that if Alnylam and Merck or Alnylam and the
potential new collaboration partner [**] Agreement or the Pending Agreement
after the Effective Date, then such [**] Agreement or Pending Agreement [**]
subject to all the terms and conditions of this Agreement, including but not
limited to the terms of this Section 7.5; provided further, however, that if the
inclusion by Alnylam of a sublicense under Isis Patent Rights licensed to
Alnylam in this Agreement plays a material role in increasing [**] Alnylam
pursuant to the Pending [**] Agreement, any such increase [**] shall be
considered to be Technology Access Fees subject to the provisions of section
7.5(a).
11
{PAGE}
ARTICLE 8
LICENSE FEES AND ROYALTIES PAYABLE TO ALNYLAM
8.1 Option Fee. For each Isis Reserved Target for which Isis exercises its
option granted pursuant to Section 6.2, Isis will pay Alnylam an irrevocable,
noncreditable and non-refundable option fee of $[**] due upon the date of
exercise. Isis may credit any $[**] payment made under Section 6.4(a) for the
Target Slot occupied by such Reserved Target against this option fee. The option
fee is only payable once per Gene Target.
8.2 Royalties. Subject to the terms and conditions of, and during the term
of, this Agreement, Isis will pay to Alnylam royalties on sales of Isis Products
by Isis, its Affiliates or sublicensees equal to [**]% of Net Sales. Isis may
reduce the royalty due under this section by [**]% of any additional royalties
that Isis owes to Third Parties on such Isis Product that arise from Isis
acquiring access to new technologies after the Effective Date; provided, however
that that (a) the royalty due under this section can never be less than a floor
of [**]%, (b) additional royalties arising as the result of the addition,
pursuant Section 11.8, of Alnylam Future Chemistry Patents or Alnylam Future
Motif and Mechanism Patents to the Alnylam Patent Rights licensed to Isis, or as
the result of an expansion of Isis' licenses pursuant to Section 6.5(d), cannot
be used to reduce the royalty and (c) Isis shall not be entitled to reduce,
pursuant to this sentence, its royalty obligation to Alnylam below a royalty
obligation equal to the lesser of (i) Alnylam's aggregate royalty obligations
[**] existing as of the Effective Date [**] and (ii) Alnylam's aggregate royalty
obligations [**] as such obligations may be reduced from time to time after the
Effective Date.
8.3 Development Milestones.
(A) Isis, its Affiliates or sublicensees will pay to Alnylam the
following milestone payments for each Isis Product within [**] after the first
achievement of each of the following events:
{TABLE}
MILESTONE EVENT MILESTONE PAYMENT
--------------- -----------------
{S} {C}
Initiation of Phase I Trial US$[**]
Initiation of Phase II Trial US$[**]
Filing NDA US$[**]
Marketing Approval US$[**]
{/TABLE}
Each milestone payment under this Section 8.3(a) will only be due on [**] Isis
Product that modulates a particular Gene Target to trigger such milestone
payment, whether such milestone is achieved by Isis or an Affiliate or
sublicensee of Isis.
(B) Isis, its Affiliates or sublicensees will pay to Alnylam a
milestone payment of US$[**] for the [**] Isis Single Stranded Product that is
an Isis Product that modulates a particular Gene Target within [**] after such
Isis Single Stranded Product reaches the initiation of IND-Enabling Studies and
not for any other Isis Single Stranded Product that modulates the particular
Gene Target.
12
{PAGE}
(C) Isis, its Affiliates or sublicensees will pay to Alnylam a
milestone payment of US$[**] for the [**] MicroRNA Product that is an Isis
Product that modulates a particular Gene Target within [**] after such MicroRNA
product reaches the initiation of [**], and not for any other MicroRNA Product
that is an Isis Product that modulates the particular Gene Target.
ARTICLE 9
OTHER PAYMENT TERMS
9.1 Payments. All payments by a Party under this Agreement will be made in
United States dollars by bank wire transfer in next day available funds to such
bank account in the United States designated in writing by Alnylam or Isis, from
time to time. Royalties payable under Sections 7.2 and 8.2 shall be payable on a
quarterly basis within 45 days after the end of each calendar quarter. The Party
with such royalty obligation (the "Royalty-Paying Party") shall provide the
other Party with a report setting forth (i) gross sales of Alnylam Products or
Isis Products, as applicable, by the Royalty-Paying Party, its Affiliates and
sublicensees, (ii) all deductions from such gross sales taken in calculating Net
Sales, (iii) Net Sales of Alnylam Products or Isis Products, as applicable, by
the Royalty-Paying Party, its Affiliates and sublicensees, (iv) royalties
payable based on such Net Sales and (v) all other information relevant to the
calculation of such royalties, on a product-by-product and country-by-country
basis, for each calendar quarter within [**] after the end of such calendar
quarter.
9.2 Late Payments; Collections. In the event that any payment, including
royalty, milestone, Sublicense Revenue or Technology Access Fee payments, due
hereunder is not made when due, the payment will bear interest from the date due
at the lesser of (i) 1.5% per month, compounded monthly, or (ii) the highest
rate permitted by law; provided, however, that in no event will such rate exceed
the maximum legal annual interest rate. If a Party disputes in writing the
amount of an invoice presented by the other Party within [**] of receipt of such
invoice, interest will only be due on the correct amount as later determined or
agreed. The payment of such interest will not limit a Party from exercising any
other rights it may have as a consequence of the lateness of any payment. In
addition, each Party agrees to pay all external costs of collection, including
reasonable attorneys' fees, incurred by the other Party in enforcing the payment
obligations after a due date has passed under this Agreement.
9.3 Audit Rights.
(A) Upon the written request of Isis or Alnylam, as the case may be,
and not more than once in each calendar year, Isis or Alnylam will permit the
other Party's independent certified public accountant to have access upon
reasonable advance notice and during normal business hours to its records as may
be reasonably necessary to verify the accuracy of the royalty reports hereunder
for the current year and the preceding 2 years prior to the date of such
request. The accounting firm will disclose to the auditing Party only whether
the royalty reports are correct or incorrect, the specific details concerning
any discrepancies, and the corrected amount of Net Sales and royalty payments.
No other information will be provided to the auditing Party. Once a Party has
audited a particular calendar year under this section, the Party will be
precluded from subsequently auditing such calendar year. In any sublicense
granted by a Party under this Agreement, such Party will
13
{PAGE}
endeavor to secure a similar audit right and if reasonably requested by the
other Party will enforce such audit right.
(B) If such accounting firm concludes that additional royalties were
owed during such period, the delinquent Party will pay the additional royalties
within 90 days of the date such Party receives the accounting firm's written
report. The fees charged by such accounting firm will be paid by the auditing
Party unless the additional royalties, milestones or other payments owed by the
audited Party exceed 5% of the royalties, milestones or other payments paid for
the time period subject to the audit, in which case the audited Party will pay
the reasonable fees and expenses charged by the accounting firm.
(C) Each Party will treat all financial information subject to
review under this Section 9.3 or under any sublicense agreement in accordance
with the confidentiality provisions of Article 12, and will cause its accounting
firm to enter into an acceptable confidentiality agreement obligating such firm
to retain all such financial information in confidence pursuant to such
confidentiality agreement.
9.4 Taxes. If laws, rules or regulations require withholding of income
taxes or other taxes imposed upon payments set forth in Article 7 or 8, each
Party will make such withholding payments as required and subtract such
withholding payments from the payments set forth in Article 7 or 8. Each Party
will submit appropriate proof of payment of the withholding taxes to the other
Party within a reasonable period of time. The Parties will cooperate to obtain
the appropriate tax clearance and/or recover any such withholdings if possible.
ARTICLE 10
ALNYLAM RIGHT OF FIRST NEGOTIATION; PREFERRED LICENSEE
10.1 Right of First Negotiation. Isis will notify Alnylam in writing once
(i) Isis, on its own with no subsequent rights to Third Parties, intends to
initiate [**]or (ii) if a Third Party with which Isis has a Development
Collaboration or a collaboration on [**] before or during clinical development
or commercialization with no subsequent rights to Third Parties. Alnylam will
have [**] from the receipt of such notice to notify Isis in writing whether or
not Alnylam wishes to negotiate with Isis regarding the development and/or
commercialization of such Isis Product. If Alnylam fails to respond to Isis'
notice within the [**] or if Alnylam declines in writing to exercise its right
of first negotiation, then Isis will be free to develop and commercialize
(either on its own or with a Third Party) the Isis Product. If Alnylam wishes to
negotiate a license or development or commercialization rights in such Isis
Product, the Parties will negotiate in good faith the terms of the license or
collaboration agreement. If, despite good faith negotiations, Alnylam and Isis
do not reach agreement within [**] from Alnylam's exercise of its right of first
negotiation, then Isis will be free to develop and commercialize (either on its
own or with a Third Party) the Isis Product; provided that during the period
prior to the latest of (x) the initiation of [**] the Isis Product, (y) the [**]
anniversary of the commencement of [**] for the Isis Product or (z) in the case
of an Isis Product [**] after the commencement of [**], Isis shall not enter
into a license or collaboration agreement with a Third Party for such Isis
Product on terms (the "More Favorable Terms") that are in the aggregate
materially more favorable to the Third Party than
14
{PAGE}
the terms on which Isis most recently offered in writing to grant such rights to
Alnylam without first offering the More Favorable Terms to Alnylam.
10.2 Preferred Licensee. If, after the Effective Date, Alnylam grants to
any Third Party that is not a Major Pharmaceutical Company a license under the
Alnylam Patent Rights to develop and commercialize Double Stranded RNA Products,
then if (a) either (i) the [**] terms of such license are more favorable to the
Third Party than the [**] terms hereunder with respect to Isis Products are to
Isis or (ii) the [**] covered by such license exceeds the [**] potentially
licensed to Isis hereunder for development and commercialization of Double
Stranded RNA Products, and (b) the roles to be played by Alnylam and such Third
Party in the development and commercialization of Double-Stranded RNA Products
under such Third Party license, the nature of the Gene Targets covered by such
Third Party license and any other relevant terms of such Third Party license do
not collectively justify the conditions described in the preceding clauses
(a)(i) and/or (a)(ii), then Alnylam shall modify the terms of its licenses to
Isis hereunder with respect to such conditions so that they are reasonably
equivalent to those granted to the Third Party.
ARTICLE 11
INTELLECTUAL PROPERTY
11.1 Ownership of Inventions.
(A) Each Party will solely own all inventions, technology,
discoveries, or other proprietary property (collectively, "Inventions") that are
made (as determined by U.S. rules of inventorship) solely by employees of or
consultants to that Party under this Agreement.
(B) Isis and Alnylam will jointly hold title to all Inventions,
whether or not patentable, that are made (as determined by the U.S. rules of
inventorship) jointly by employees of or consultants to Isis and Alnylam, as
well as to Patents filed thereon. Such Inventions will be "Joint Inventions,"
and Patents claiming such Joint Inventions will be "Joint Patents." Isis and
Alnylam will promptly provide each other with notice whenever a Joint Invention
is made. The Parties agree and acknowledge that, except insofar as this
Agreement provides otherwise, the default rights conferred on joint owners under
US patent law, including the right of each Party to independently practice,
license and use a Joint Patent, will apply in relation to the Joint Patents
throughout the world as though US patent law applied worldwide.
(C) The Parties agree, upon reasonable request, to execute any
documents reasonably necessary to effect and perfect each other's ownership of
any Invention.
11.2 Filing and Prosecution of Isis and Alnylam Patent Rights.
(A) Isis and Alnylam will work closely, through their interactions
on the RMC to ensure that, to the greatest degree permitted by United States and
foreign patent laws, Patents for inventions relating to all aspects of Double
Stranded RNA are obtained and shared.
15
{PAGE}
(B) Isis will be responsible for preparing, filing, prosecuting,
maintaining and taking such other actions as are reasonably necessary or
appropriate with respect to the Isis Patent Rights.
(C) Alnylam will be responsible for preparing, filing, prosecuting,
maintaining and taking such other actions as are reasonably necessary or
appropriate with respect to the Alnylam Patent Rights.
(D) Each Party will endeavor in good faith to coordinate its efforts
with those of the other Party to minimize or avoid interference with the
prosecution of the other Party's Patents. Neither Party will initiate or
participate in any opposition, reexamination, interference, litigation or other
proceeding for the purpose of narrowing or invalidating any claim in a Patent of
the other Party. Promptly after the Effective Date, Isis shall discontinue its
participation in the opposition proceeding relating to the following Patent
Controlled by Alnylam: EP 1,144,623 (Inventors: R. Kreutzer and S. Limmer).
(E) At either Party's request, the other Party will keep the
requesting Party continuously informed of and provide documentation of all
significant matters relating to the preparation, filing, prosecution and
maintenance of any designated Patent.
11.3 Filing and Prosecution of Jointly Owned Patents.
(A) The Research Management Committee will designate one of the
Parties as being the responsible Party for preparing, filing, prosecuting,
maintaining and taking such other actions as are reasonably necessary or
appropriate with respect to any Joint Patent.
(B) Each Party will keep the other Party continuously informed of
all significant matters relating to the preparation, filing, prosecution and
maintenance of Joint Patents, and shall provide the other Party with copies of
any substantial prosecution papers within thirty days of receipt.
11.4 Costs and Expenses.
(A) Each Party will bear its own costs and expenses in filing,
prosecuting, maintaining and extending the Alnylam Patent Rights and Isis Patent
Rights, respectively.
(B) The Parties will pay equal shares of all costs and expenses in
filing, prosecuting, maintaining and extending the Joint Patents.
11.5 Enforcement.
(A) Each Party will promptly advise the other of any suspected or
actual infringement of the Isis Patent Rights, Alnylam Patent Rights, or Joint
Patents by any person that reasonably affects the other Party's business. The
notice shall set forth the facts of such infringement or misappropriation in
reasonable detail.
(B) Subject to subsections (c) and (h) below, Alnylam will have the
sole and exclusive right, in its sole discretion and at its expense, to assert
and enforce any Isis Patent Rights, Alnylam Patent Rights or Joint Patents
against any party engaging in an unlicensed or
16
{PAGE}
unauthorized making, having made, using, selling, offering for sale or importing
of any allegedly infringing Double Stranded RNA.
(C) For any enforcement by Alnylam under subsection (b) above that
includes Isis Patent Rights covering a [**] chemical modification, Isis will
actively participate in the planning and conduct of such enforcement and will
take the lead of such enforcement to the extent that the scope or validity of
any such Isis Patent Rights covering a [**] chemical modification is at risk.
(D) Except as set forth in Sections 11.5(b) and (h),
(I) Isis will have the sole and exclusive right, in its sole
discretion and at its expense, to assert and enforce any Isis Patent Rights;
(II) Alnylam will have the sole and exclusive right, in its
sole discretion and at its expense, to assert and enforce any Alnylam Patent
Rights; and
(III) The RMC will agree in advance on the enforcement of any
Joint Patent and will apportion enforcement responsibilities and recoveries
amongst the parties.
(E) The rights granted hereunder to Alnylam to enforce certain
licensed in or jointly owned Isis Patent Rights are further limited as described
in Exhibit 5.3(d) attached to the Addendum Transmittal. The rights granted
hereunder to Isis to enforce certain licensed in or jointly owned Alnylam Patent
Rights are further limited as described in Exhibit 6.5(c) attached to the
Addendum Transmittal.
(F) The nonenforcing Party will have the right, at its own expense,
to participate in the conduct of the enforcement action and to be represented in
such action by its own counsel.
(G) The enforcing Party will not enter into any settlement that
impacts the scope or interpretation of any claim of any Joint Patent or of any
Patent of the nonenforcing Party without prior written authorization of the
nonenforcing Party.
(H) If the Party with enforcement rights under section (b) or (d)
above (the "Enforcing Party") fails to initiate proceedings against any actual
or suspected infringement within [**] of receipt of written request for
enforcement from the other Party (the "Nonenforcing Party") and if the infringer
is directly competing with a Product (the "Affected Product") of such
Nonenforcing Party, then (i) if the license granted in this Agreement under
which the Nonenforcing Party is selling the Affected Product is exclusive or
co-exclusive, the Nonenforcing Party will have the right to assert and enforce
the patents that are allegedly being infringed, or (ii) if the license granted
in this Agreement under which the Nonenforcing Party is selling the Affected
Product is non-exclusive, the Nonenforcing Party will have obligation to pay
royalties during the period for which the Enforcing Party fails to initiate
proceedings or take other action (including without limitation entering into a
licensing arrangement) to eliminate such infringement; provided that the
provisions of the immediately preceding clause (ii) shall not apply if the
Enforcing Party elects to grant the Nonenforcing Party enforcement rights with
respect to such infringement. The Enforcing Party will not grant a license to
any such infringing Third Party with respect to any directly competitive
infringing product on terms materially more favorable (milestones and royalties)
than the terms of the license granted hereunder to the Nonenforcing Party or,
solely with
17
{PAGE}
respect to the Affected Product, will adjust the terms of such license so that
they are not materially less favorable than the terms of the license granted to
the infringing Third Party.
(I) Except as otherwise agreed to by the Parties as part of a
cost-sharing arrangement, any recovery realized as a result of such litigation,
after reimbursement of any reasonable litigation expenses of Isis and Alnylam,
shall be retained by the Party or Parties that brought and controlled such
litigation for purposes of this Agreement, except that any recovery realized as
a result of such litigation shall be treated as Net Sales of Isis Products or
Net Sales of Alnylam Products and distributed as such Net Sales would have been
distributed.
11.6 Manufacturing Patents. All provisions relating to Manufacturing
Patents shall be governed by the Manufacturing Services Agreement.
11.7 Third Party Patents. The Parties will consult about the need to
license any patents Controlled by Third Parties that would be useful or
necessary for either Party to research, develop, make, have made, use, sell,
offer for sale or import Double Stranded RNA Products. If it is agreed that
there is a desire to obtain a license or to acquire any such patent, the Parties
will negotiate in good faith regarding (i) the share of the financial
obligations relating to the license or acquisition that each Party will bear;
(ii) the compensation of any acquisition costs incurred in connection with
obtaining the Patent rights; and (iii) an agreement by the Parties to abide by
all terms of the agreement under which the patent rights are granted.
11.8 Future Licenses. If after the Effective Date, a Party (the
"Controlling Party") later invents or acquires rights or title to an invention
claimed by a Patent that (i) would be included in the Isis Future Chemistry
Patents or Isis Future Motif and Mechanism Patents if such Party is Isis or in
the Alnylam Future Chemistry Patents or Alnylam Future Motif and Mechanism
Patents if such Party is Alnylam (the "Additional Rights") and (ii) carry
financial or other obligations, then the Controlling Party must promptly notify
the non-Controlling Party of such acquisition or invention. If the
non-Controlling Party wishes to include such Additional Rights under the
licenses granted pursuant to Article 5 or 6, as applicable, the non-Controlling
Party will notify the Controlling Party of its desire to do so and will assume
all financial and other obligations to the Controlling Party's licensors or
collaborators, if any, arising from the grant to the non-Controlling Party of
such license. Any Additional Rights that do not carry financial or other
obligations shall be automatically included under the licenses granted pursuant
to Article 5 or 6, as applicable. If a Party pays any upfront payments or
similar acquisition costs to access Additional Rights, the Parties will
negotiate in good faith regarding sharing such acquisition costs and payments.
When acquiring or creating such Additional Rights, each Party will endeavor in
good faith to secure the right to sublicense such Additional Rights to the other
Party.
ARTICLE 12
18
{PAGE}
CONFIDENTIALITY
12.1 Nondisclosure Obligation. All Confidential Information disclosed by
one Party to the other Party hereunder will be maintained in confidence by the
receiving Party and will not be disclosed to a Third Party or Affiliate or used
for any purpose except as set forth below.
12.2 Permitted Disclosures. Except as otherwise provided herein, a Party
may disclose Confidential Information received from the other Party:
(A) to governmental or other regulatory agencies in order to obtain
Patents or approval to conduct clinical trials, or to gain Marketing Approval;
provided that such disclosure may be made only to the extent reasonably
necessary to obtain such Patents or approvals;
(B) to any adjudicative body as required by law, provided that prior
to such disclosure, the Party subject to such disclosure obligation (the
"Notifying Party") promptly notifies the other Party of such requirement so that
such other Party can seek a protective order, confidential treatment or other
appropriate remedy; and provided, further, that in the event that no such
protective order, confidential treatment or other remedy is obtained, or that
such other Party waives compliance with this section, the Notifying Party will
furnish only that portion of the other Party's Confidential Information that it
is advised by counsel it is legally required to furnish;
(C) to Affiliates, sublicensees, agents, consultants, and/or other
Third Parties for the development, manufacturing and/or marketing of Isis
Products or Alnylam Products (or for such parties to determine their interest in
performing such activities) in accord
402562
|
Alnylam Pharma
As referenced in this Strategic Collaboration and License Agreement:
Alnylam Pharmaceuticals, Inc – Agreement")
is effective as of March 11, 2004 (the "Effective Date") between Isis
Pharmaceuticals, Inc., a Delaware corporation having an address at 2292 Faraday
Avenue, Carlsbad, CA 92008 ("Isis") and Alnylam Pharmaceuticals, Inc ., a
Delaware corporation having an address at 790 Memorial Drive, Suite 202,
Cambridge, MA 02139 (together with its wholly owned subsidiaries Alnylam U.S.,
Inc., a Delaware corporation, and
_____________
Alnylam Pharmaceuticals, Inc – satisfactory addendum transmittal instrument (the "Addendum Transmittal")
delivering all Exhibits and Schedules identified herein as attached to the
Addendum Transmittal.
ARTICLE 2
EQUITY INVESTMENT
2.1 Isis will purchase from Alnylam Pharmaceuticals, Inc ., and Alnylam
Pharmaceuticals, Inc. will sell to Isis, 1,666,667 shares of Series D Preferred
Stock, at $6.00 per share (i.e., at an aggregate purchase price
_____________
Alnylam
Pharmaceuticals, Inc – the "Addendum Transmittal")
delivering all Exhibits and Schedules identified herein as attached to the
Addendum Transmittal.
ARTICLE 2
EQUITY INVESTMENT
2.1 Isis will purchase from Alnylam Pharmaceuticals, Inc., and Alnylam
Pharmaceuticals, Inc . will sell to Isis, 1,666,667 shares of Series D Preferred
Stock, at $6.00 per share (i.e., at an aggregate purchase price of $10,000,002),
_____________
Alnylam Pharmaceuticals, Inc – TABLE}
{S} {C}
Attention: Executive Vice President
Fax No.: +1 (760) 603-4652
with a copy to: Attention: General Counsel
Fax No.: +1 (760) 268-4922
if to Alnylam, to: Alnylam Pharmaceuticals, Inc .
790 Memorial Drive, Suite 202
Cambridge, MA 02139
Attention: President
Fax No.: +1 (617) 252-0011
with a copy to: Hale and Dorr LLP
60 State Street
Boston, Massachusetts
_____________
ALNYLAM PHARMACEUTICALS, INC – Party agrees to cause its Affiliates
to perform such obligations.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
{TABLE}
{S} {C}
ISIS PHARMACEUTICALS, INC. ALNYLAM PHARMACEUTICALS, INC .
By: /s/ B. Lynne Parshall By: /s/ Vincent J. Miles
-------------------------------- ---------------------------------
Name: B. Lynne Parshall Name: Vincent J. Miles
------------------------------- -------------------------------
Title: Executive Vice President Title: Senior Vice President,
------------------------------ ------------------------------
Business Development
------------------------------
{/TABLE}
_____________
dt 1399745
;
Amgen
As referenced in this Strategic Collaboration and License Agreement:
Amgen, Inc – only be
sublicensed in combination with a product that (i) uses such Patents and (ii)
employs as a material element other Isis Patent Rights.
5. AMGEN, GSK, CHIRON AND PFIZER.
Amgen, Inc ., Glaxo Smith Kline, Chiron Corporation and Pfizer, Inc. each have a
license to use some or all of the Patents identified by a "TV" in the Third
Party column
_____________
dt 1491895
;
Gen-Probe
As referenced in this Strategic Collaboration and License Agreement:
Gen-Probe Inc. – S} {C} {C} {C} {C} {C} {C}
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
{/TABLE}
{PAGE}
{TABLE}
{S} {C} {C} {C} {C} {C}
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**]
{/TABLE}
{PAGE}
3. GEN-PROBE AND NIH. (A)
The following Patents in-licensed from Gen-Probe Inc. and the National Institute
of Health are excluded:
U.S. Patent No. [**] entitled: [**];
U.S. Patent No. [**] entitled: [**]; and
U.S. Patent No. [**] entitled: [**]
4. MCGILL UNIVERSITY (B)
In
_____________
dt 1483445
;
|
Gilead Sciences
As referenced in this Strategic Collaboration and License Agreement:
GILEAD SCIENCES, INC – Field.
"Isis Field" means the use of [the Merck [**]] solely for the purposes of
developing [**].
Reference is made to the discussion regarding Merck nucleosides on the Excluded
Technology schedule.
2. GILEAD SCIENCES, INC .
Gilead has retained exclusive rights in the Patents identified by a "Gilead" in
the Third Party column to make, have made, use, import, export or sell compounds
and other
_____________
dt 1319673
;
ISIS Pharma
As referenced in this Strategic Collaboration and License Agreement:
Isis
Pharmaceuticals, Inc – AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
STRATEGIC COLLABORATION AND
LICENSE AGREEMENT
This Strategic Collaboration and License Agreement (the "Agreement")
is effective as of March 11, 2004 (the "Effective Date") between Isis
Pharmaceuticals, Inc ., a Delaware corporation having an address at 2292 Faraday
Avenue, Carlsbad, CA 92008 ("Isis") and Alnylam Pharmaceuticals, Inc., a
Delaware corporation having an address at 790 Memorial Drive, Suite
_____________
Isis Pharmaceuticals, Inc – by telephone), sent by nationally-recognized overnight courier or sent
by registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
{TABLE}
{S} {C}
if to Isis, to: Isis Pharmaceuticals, Inc .
Carlsbad Research Center
2292 Faraday Avenue
Carlsbad, CA 92008
{/TABLE}
23
{PAGE}
{TABLE}
{S} {C}
Attention: Executive Vice President
Fax No.: +1 (760) 603-4652
with a copy to:
_____________
ISIS PHARMACEUTICALS, INC – a Party, such Party agrees to cause its Affiliates
to perform such obligations.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
{TABLE}
{S} {C}
ISIS PHARMACEUTICALS, INC . ALNYLAM PHARMACEUTICALS, INC.
By: /s/ B. Lynne Parshall By: /s/ Vincent J. Miles
-------------------------------- ---------------------------------
Name: B. Lynne Parshall Name: Vincent J. Miles
------------------------------- -------------------------------
Title: Executive Vice President Title: Senior Vice President,
------------------------------ ------------------------------
_____________
Isis
Pharmaceuticals, Inc – its sublicensees of any Isis Product.
42
{PAGE}
ADDENDUM TRANSMITTAL
Reference is hereby made to the Strategic Collaboration and License
Agreement executed as of March 11, 2004 (the "Agreement"), between Isis
Pharmaceuticals, Inc ., a Delaware corporation, and Alnylam Pharmaceuticals,
Inc., a Delaware corporation.
Capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Agreement.
The
_____________
ISIS PHARMACEUTICALS, INC – Schedule 1-28
Schedule 1-30
Schedule 1-34
IN WITNESS WHEREOF, the Parties have executed this Addendum Transmittal as
of this 19th day of March, 2004.
{TABLE}
{S} {C}
ISIS PHARMACEUTICALS, INC . ALNYLAM PHARMACEUTICALS, INC.
By: /s/ B. Lynne Parshall By: /s/ Vincent J. Miles
------------------------------------ --------------------------------
Name: B. Lynne Parshall Name: Vincent J. Miles
---------------------------------- ------------------------------
Title: Executive Vice President Title: Senior Vice President,
--------------------------------- -----------------------------
_____________
dt 1528731
;
More... |
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Strategic Collaboration and License Agreement
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STRATEGIC COLLABORATION AND
LICENSE AGREEMENT
This Strategic Collaboration and License Agreement (the "Agreement")
is effective as of March 11, 2004 (the "Effective Date") between Isis
Pharmaceuticals, Inc., a Delaware corporation having an address at 2292 Faraday
Avenue, Carlsbad, CA 92008 ("Isis") and Alnylam Pharmaceuticals, Inc., a
Delaware corporation having an address at 790 Memorial Drive, Suite 202,
Cambridge, MA 02139 (together with its wholly owned subsidiaries Alnylam U.S.,
Inc., a Delaware corporation, and Alnylam Europe AG, a company organized under
the laws of Germany, "Alnylam"). Isis and Alnylam may be referred to herein as
the "Parties," or each individually as a "Party."
GUIDING PRINCIPLES
Isis is the leader in RNA-based drug discovery, has created
technology, intellectual property, expertise, facilities and resources to
discover and develop oligonucleotide drugs;
Alnylam is the leader in RNAi therapeutics, has developed and
acquired intellectual property, expertise and technology in RNAi therapeutics,
and is conducting research and drug discovery focused on Double Stranded RNA
drugs;
Isis and Alnylam desire to create a long-term strategic relationship
that will enhance the positions of both companies in RNA-based drug discovery;
Isis will continue to pursue RNA-based drug discovery technology very
broadly including all potential mechanisms of action. Isis will work with
Alnylam as Isis' primary means of participating in the potential value of Double
Stranded RNA Products, and will not enter into any collaborations with Third
Parties the primary purpose of which is to discover Double Stranded RNA
Products; and
Alnylam will focus on RNAi therapeutics and the use of Double
Stranded RNA.
The objectives of the strategic relationship are to:
- Enhance the leadership of Alnylam in RNAi therapeutics.
- Enhance the potential of Alnylam to develop Double Stranded RNA drugs.
- Defer Alnylam investments in Chemistry, Manufacturing and Controls (CMC).
- Enhance the patent positions of each Party with respect to Double Stranded
RNA drugs.
- Provide Isis with a means for participating in the success of RNAi
therapeutics.
ARTICLE 1
1
{PAGE}
DEFINITIONS; EXHIBITS AND SCHEDULES
1.1 Capitalized terms used herein and not defined elsewhere herein have
the meanings set forth in Exhibit 1.1.
1.2 On or before March 19, 2004, the Parties shall both execute a mutually
satisfactory addendum transmittal instrument (the "Addendum Transmittal")
delivering all Exhibits and Schedules identified herein as attached to the
Addendum Transmittal.
ARTICLE 2
EQUITY INVESTMENT
2.1 Isis will purchase from Alnylam Pharmaceuticals, Inc., and Alnylam
Pharmaceuticals, Inc. will sell to Isis, 1,666,667 shares of Series D Preferred
Stock, at $6.00 per share (i.e., at an aggregate purchase price of $10,000,002),
on the terms contained in the Equity Documents.
ARTICLE 3
MANUFACTURING SERVICES RELATIONSHIP
3.1 At Alnylam's request, on the terms and conditions of the Manufacturing
Services Term Sheet attached hereto as Exhibit 3.1 attached to the Addendum
Transmittal, Isis and Alnylam will negotiate in good faith a manufacturing
services agreement (the "Manufacturing Services Agreement"), pursuant to which
Isis will provide Alnylam with manufacturing and related services relating to
Double Stranded RNA Products.
ARTICLE 4
COLLABORATIVE RESEARCH EFFORTS
4.1 Research Management Committee.
(A) To promote the success of the collaboration objectives and RNAi
technology, the Parties will establish a Research Management Committee ("RMC"),
which will be comprised of equal numbers of representatives of each of the
Parties and will meet at least twice per calendar year, alternating venues
between the vicinities of Cambridge, Massachusetts and Carlsbad, California, to
share scientific direction and data, to coordinate basic research experiments,
and to facilitate the guiding principles of the collaboration.
(B) Intellectual property representatives of each Party will be
invited to participate in RMC meetings and such meetings will provide a forum to
discuss patent prosecution and enforcement issues and to allocate responsibility
for the filing and prosecution of any Joint Patents.
(C) The Parties will use the RMC as a forum to update one another
regarding their respective Future Chemistry and Motif and Mechanism Patents.
2
{PAGE}
(D) The RMC will establish a clearance policy that will govern any
publication or presentation by a Party in which such Party proposes to include
any previously undisclosed information or intellectual property Controlled by
the other Party.
(E) The RMC will continue in existence for three (3) years after the
Effective Date, subject to extension by mutual agreement of the Parties. Upon
termination of the RMC, the Parties will agree upon a strategy to make decisions
about the items in Sections 4.1 (b), (c), and (d).
ARTICLE 5
LICENSES GRANTED BY ISIS TO ALNYLAM
5.1 License Grants. Subject to the terms and conditions of this Agreement,
including, but not limited to, the restrictions set forth in Section 5.3, Isis
grants Alnylam the following licenses:
(A) Under Isis Current Motif and Mechanism Patents and Isis Current
Chemistry Patents, a license to research, develop, make, have made, use, import,
offer to sell and sell Double Stranded RNA and Double Stranded RNA Products.
(B) Subject to the terms of Section 11.8, under Isis Future Motif
and Mechanism Patents, Isis Future Chemistry Patents and Isis' rights in Joint
Patents, a license to research, develop, make, have made, use, import, offer to
sell and sell Double Stranded RNA and Double Stranded RNA Products.
(C) Under the Isis Current Motif and Mechanism Patents and Isis
Current Chemistry Patents, a license to research, develop, make, have made, use,
import, offer to sell and sell MicroRNA Products.
(D) Subject to the terms of Section 11.8, under the Isis Future
Motif and Mechanism Patents and Isis Future Chemistry Patents, a license to
research, develop, make, have made, use, import, offer to sell and sell MicroRNA
Products.
(E) A royalty-free, fully paid, license to practice any Know-How
disclosed to Alnylam during the performance of this Agreement, subject to the
non-disclosure but not the non-use provisions contained in Article 12.
(F) A fully paid, royalty-free nonexclusive license under Isis
Manufacturing Patents to research, develop, make, have made, use and import
Alnylam Products for Research Use.
5.2 License Exclusivity, Territory and Sublicenses.
3
{PAGE}
(A) Subject to the terms and conditions of this Agreement, including
the restrictions set forth in Section 5.3, the licenses from Isis to Alnylam
granted in Sections 5.1(a) and (b) are worldwide and co-exclusive (with Isis),
with the exclusive right to grant Naked Sublicenses, and the licenses from Isis
to Alnylam granted in Sections 5.1 (c), (d), (e) and (f) are worldwide and
nonexclusive. Alnylam is not permitted to grant sublicenses under the licenses
granted in Sections 5.1(a) through 5.1(e), except that Alnylam is permitted to
grant (i) sublicenses in connection with a Bona Fide Drug Discovery
Collaboration, (ii) sublicenses in connection with a Development Collaboration,
(iii) Naked Sublicenses and (iv) sublicenses under the license granted in
Section 5.1(e) in connection with the discovery, development or
commercialization of any product. Alnylam is not permitted to grant sublicenses
under the licenses granted in Section 5.1(f).
(B) If Alnylam, on its own or through an Affiliate or collaborator
in a Bona Fide Drug Discovery Collaboration, has not reached the [**] stage of
development with any Alnylam Product by [**], the exclusive right to grant Naked
Sublicenses under the licenses granted in Sections 5.1(a) and 5.1(b) will
convert to a nonexclusive right.
(C) Alnylam cannot sublicense its right to grant Naked Sublicenses
under this Agreement except that Alnylam may permit its sublicensees to grant
further sublicenses in connection with an Alnylam Product.
(D) Notwithstanding the foregoing, Isis may (i) [**] provided that
[**] for the manufacture and sale of [**] for research use only and (ii)
continue to grant licenses to Third Parties for the purpose of manufacturing and
selling oligonucleotides; provided that, to the extent such licenses cover
Double Stranded RNA, Isis will restrict such licenses to non-therapeutic uses.
5.3 Limitations on Licenses.
(A) The licenses granted under Section 5.1 above are not intended to
grant any rights to Alnylam to practice the Isis Excluded Technology. If Alnylam
wishes to license any Isis Excluded Technology for which Isis has the right to
grant a license or sublicense, Isis will negotiate in good faith an appropriate
license.
(B) Notwithstanding the licenses granted to Alnylam under Section
5.1, Isis retains its rights in the Isis Patent Rights and in the Joint Patents
(i) exclusively for the Isis Exclusive Targets and (ii) exclusively for the Isis
Encumbered Targets. Once a particular contractual restriction expires on an Isis
Encumbered Target, Alnylam's licenses under Section 5.1 will no longer be
limited under this Section 5.3(b) for such target and such target shall no
longer be an Isis Encumbered Target. Isis will update [**] Alnylam [**] to
remove targets that are no longer Isis Encumbered Targets promptly upon receipt
of a written request from Alnylam [**], but will not be required to update [**]
more frequently than once a calendar quarter.
(C) Licenses to Isis Patent Rights that are joint patents with Third
Parties (i.e., invented by one or more Isis inventors and one or more non-Isis
inventors) are licensed subject to the retained rights of any non-Isis inventors
and their assignees and licensees. Any
4
{PAGE}
such retained rights of non-Isis inventors and their assignees and licensees
existing as of the Effective Date are set forth in Exhibit 5.3(c) attached to
the Addendum Transmittal.
(D) Licenses to Isis Patent Rights that are subject to contractual
obligations between Isis and Third Parties in effect as of the Effective Date
are licensed subject to the restrictions and other terms described in Exhibit
5.3(d) attached to the Addendum Transmittal. Alnylam hereby agrees to comply,
and to cause its sublicensees to comply, with such restrictions and other terms.
5.4 Alnylam Covenant Regarding Sublicensing of Isis Patent Rights. Alnylam
shall use good faith efforts to include sublicenses under the licenses under the
Isis Patent Rights granted to Alnylam in Sections 5.1(a) and 5.1(b) in any Third
Party collaboration or license agreement in which Alnylam grants rights to
develop and commercialize Double Stranded RNA Products, unless the technology
covered by such licensed Isis Patent Rights would not reasonably be expected to
advance the goals of such Third Party collaboration or license relationship.
ARTICLE 6
LICENSES GRANTED BY ALNYLAM TO ISIS
6.1 License Grants. Subject to the terms and conditions of this Agreement,
including, but not limited to, the restrictions set forth in Section 6.5,
Alnylam grants Isis the following licenses:
(A) A fully-paid, royalty-free, nonexclusive license under Alnylam
Current Motif and Mechanism Patents and Alnylam Current Chemistry Patents to
research, develop, make, have made, use and import Isis Products for Research
Use.
(B) Subject to the terms of Section 11.8, a fully paid, royalty-free
nonexclusive license under Alnylam Future Motif and Mechanism Patents and
Alnylam Future Chemistry Patents to research, develop, make, have made, use and
import Isis Products for Research Use.
(C) A nonexclusive license under Alnylam Current Motif and Mechanism
Patents and Alnylam Current Chemistry Patents to research, develop, make, have
made, use, import, offer to sell and sell Isis Single Stranded Products
(D) Subject to the terms of Section 11.8, a nonexclusive license
under Alnylam Future Motif and Mechanism Patents and Alnylam Future Chemistry
Patents to research, develop, make, have made, use, import, offer to sell and
sell Isis Single Stranded Products.
(E) Under the Alnylam Current Motif and Mechanism Patents and
Alnylam Current Chemistry Patents, a nonexclusive license to research, develop,
make, have made, use, import, offer to sell and sell MicroRNA Products.
5
{PAGE}
(F) Subject to the terms of Section 11.8, under the Alnylam Future
Motif and Mechanism Patents and Alnylam Future Chemistry Patents, a nonexclusive
license to research, develop, make, have made, use, import, offer to sell and
sell MicroRNA Products.
(G) A worldwide, royalty-free, fully paid, nonexclusive license to
practice any Know-How disclosed to Isis during the performance of this
Agreement, subject to the non-disclosure but not the non-use provisions
contained in Article 12.
6.2 License Option. For each Gene Target in the Isis Target Pool (as
further described below) Alnylam grants Isis an exclusive option to obtain (on a
Reserved Target-by-Reserved Target basis), subject to the terms and conditions
of this Agreement, including, but not limited to, the restrictions set forth in
Section 6.5, a license under (i) Alnylam Current Motif and Mechanism Patents and
Alnylam Current Chemistry Patents and (ii) subject to the terms of Section 11.8,
Alnylam Future Motif and Mechanism Patents, Alnylam Future Chemistry Patents and
Alnylam's rights in Joint Patents, to research, develop, make, have made, use,
import, offer for sale and sell Double Stranded RNA and Double Stranded RNA
Products.
(A) This license, when the option is exercised, will be exclusive
with respect to Isis Exclusive Targets and co-exclusive (with Alnylam) with
respect to Isis Co-Exclusive Targets.
(B) This option will expire on a Reserved Target-by-Reserved Target
basis if Isis has not paid Alnylam the option fee set forth in Section 8.1 below
before the earlier of (i) [**], (ii) the [**] anniversary of the date [**] or
the [**] anniversary of the date [**] and Isis is [**] or (iii) the date [**]
with respect to such Reserved Target.
(C) For any Reserved Target for which Isis obtains a license from
Alnylam under this Section 6.2, Isis will use Commercially Reasonable Efforts
(either on its own or in an Antisense Drug Discovery Program or Development
Collaboration) to develop and commercialize Double Stranded RNA Products that
modulate such Reserved Target.
6.3 Sublicenses.
(A) With respect to any license granted by Alnylam pursuant to
Section 6.1(a), 6.1(b) or 6.2, Isis may only grant a sublicense to a Third Party
solely for the purpose of enabling such Third Party to collaborate with Isis in
an Antisense Drug Discovery Program or to develop and commercialize an Isis
Product in a Development Collaboration. With respect to any license granted by
Alnylam pursuant to Section 6.1(c), 6.1(d), 6.1(e), 6.1(f) or 6.1(g), Isis may
grant a sublicense to a Third Party in connection with the discovery,
development or commercialization of any product.
(B) Notwithstanding anything in this Agreement to the contrary, Isis
may not enter into any drug discovery collaboration the primary purpose of which
is to discover Double Stranded RNA Products and/or to develop Double Stranded
RNA Products to any point up to the [**].
6.4 Target Pool.
6
{PAGE}
(A) Reserved Target Slots. Initially, Isis will have a pool (the
"Isis Target Pool") containing up to [**] slots for which Isis can designate
certain Gene Targets solely for Antisense Drug Discovery Programs (each such
slot, a "Target Slot" and any Gene Target occupying such a slot, a "Reserved
Target"); provided, however, that on January 1 of each year starting with
January 1, [**], Isis will [**] per each additional Target Slot, which
additional Target Slot shall be a Co-Exclusive Target Slot except as otherwise
provided in Section 6.4(f). These rights are cumulative and, subject to Section
17.2(c) do not expire during the License Term. Furthermore, in the event that
Isis pays the $[**] license option fee for a Reserved Target pursuant to section
8.1, such Reserved Target will be considered to have graduated from the Isis
Target Pool, and, subject to Section 6.4(e), Isis will be permitted to designate
a new Reserved Target to fill the open Target Slot in the Isis Target Pool.
(B) Initial Designations; Conversion of Target Slots. Initially,
subject to Section 6.4(e), Isis can designate up to [**] Reserved Targets as
Isis Exclusive Targets (the "Isis Exclusive Targets", and each Target Slot
occupied by an Isis Exclusive Target, an "Exclusive Target Slot") and up to [**]
Reserved Targets as Isis Co-Exclusive Targets (the "Isis Co-Exclusive Targets",
and each Target Slot occupied by an Isis Co-Exclusive Target, a "Co-Exclusive
Target Slot"). On January 1 of each year starting with January 1, [**], [**]
initial Co-Exclusive Target Slots will convert into an Exclusive Target Slot
such that the initial [**] Target Slots will all be Exclusive Target Slots by
January 1, [**]. Subject to section 6.4(f), the Isis Co-Exclusive Target in a
Co-Exclusive Target Slot that converts to an Exclusive Target Slot will become
an Isis Exclusive Target.
(C) Removing/Adding/Redesignating Targets. After the Effective Date
and no more than [**] period (a "Target Reallocation Period"), Isis may do any
of the following:
(i) Remove a Gene Target from the Isis Target Pool (which,
following such removal will create an open Target Slot);
(ii) Add a new Gene Target to any open Target Slot (subject to
the procedures and provisions of Section 6.4(e); or
(iii) Redesignate an Isis Co-Exclusive Target as an Isis
Exclusive Target, provided that (A) an open Exclusive Target
Slot is available, which may be made available by Isis's
simultaneous redesignation of an Isis Exclusive Target as an
Isis Co-Exclusive Target, and (B) Alnylam does not have an
Active Program with respect to such Isis Co-Exclusive Target
or has not entered into a Bona Fide Drug Discovery
Collaboration or Development Collaboration that prevents
Alnylam from granting Isis an exclusive license with respect
to such Isis Co-Exclusive Target.
Notwithstanding the foregoing provisions of this Section 6.4(c), in
any Target Reallocation Period, Isis cannot remove or redesignate, or any
combination thereof, a number of Reserved Targets that exceeds the number
calculated by dividing the then current number of Target Slots by [**]and
rounding down to the nearest whole number. For the purpose of the limitation
described in the immediately preceding sentence, (x) removing a Gene Target from
the Isis Target Pool and then filling the open Target Slot created by such
removal shall
7
{PAGE}
count as a single removal and (y) redesignating an Isis Co-Exclusive Target as
an Isis Exclusive Target and simultaneously redesignating an Isis Exclusive
Target as an Isis Co-Exclusive Target in order to make available an open
Exclusive Target Slot to permit the former redesignation shall count as a single
redesignation. Once Isis removes a Gene Target from the Isis Target Pool, Isis
will be prevented from later adding such Gene Target to the Isis Target Pool
until [**] have passed from the date Isis removed such Gene Target.
(D) New Target Request. When Isis wishes to add a new Gene Target to
occupy a vacant Target Slot, it will provide Alnylam with written notice (the
"Request Notice") of the Gene Target it wishes to add (the "Proposed Reserved
Target"). The Request Notice will include the gene name, the NCBI accession
number or nucleic acid sequence for the Proposed Reserved Target and whether
Isis wants the Proposed Reserved Target, if accepted, to be an Isis Exclusive
Target or an Isis Co-Exclusive Target.
(E) New Target Rejection/Approval. Within [**] of receipt of the
Request Notice, Alnylam will give Isis written notice if any of the criteria set
forth below applied to such Proposed Reserved Target at the time of Alnylam's
receipt of the Request Notice. If, at such time, the Proposed Reserved Target is
(i) subject to Alnylam's own Active Program [**], (ii) encumbered by a
contractual obligation between Alnylam and a Third Party that would preclude
Alnylam from granting a license under Section 6.2 with respect to the Proposed
Reserved Target or (iii) the subject of Alnylam's good faith negotiations to
enter into a contractual obligation within the [**] following receipt of the
Request Notice with a Third Party (as supported by a written request from such
Third Party) that would preclude Alnylam from granting a license under Section
6.2 with respect to the Proposed Reserved Target, then the Proposed Reserved
Target will be rejected and will not become a Reserved Target. If the Proposed
Reserved Target is not rejected under this subsection (e), the Proposed Reserved
Target will become an Isis Co-Exclusive Target or an Isis Exclusive Target (as
set forth in the Request Notice). If Alnylam can only grant a license to a
Proposed Reserved Target on a co-exclusive basis, it will notify Isis in
writing. Isis will then have the option to accept the Proposed Reserved Target
as one of its Isis Co-Exclusive Targets. Alnylam will promptly notify Isis in
writing if a rejected Proposed Reserved Target later becomes available to be
designated as a Reserved Target or if an Isis Co-Exclusive Target later becomes
available to be designated as an Isis Exclusive Target.
(F) Target Redesignation Procedures. In each year that a
Co-Exclusive Target Slot converts to an Exclusive Target Slot pursuant to
section 6.4(b), Isis will provide Alnylam with written notice designating which
Isis Co-Exclusive Target (the "Proposed Redesignated Target") it wishes to
become an Isis Exclusive Target occupying the new Exclusive Target Slot. Alnylam
will have [**] after the receipt of such notice either to confirm that the
Proposed Redesignated Target has become an Isis Exclusive Target or to disallow
such redesignation. Alnylam may only disallow such redesignation if, at the time
of Alnylam's receipt of Isis' notice regarding the Proposed Redesignated Target,
Alnylam has an Active Program with respect to such Proposed Redesignated Target
or has entered into a contractual obligation with a Third Party that prevents
Alnylam from granting Isis an exclusive license with respect to such Proposed
Redesignated Target. In the event that Alnylam disallows the redesignation of a
Proposed Redesignated Target, Isis will use the same procedure to designate
another Isis Co-Exclusive Target as a Proposed Redesignated Target, and Alnylam
will follow the same procedure to confirm or disallow the redesignation
8
{PAGE}
of such Proposed Redesignated Target as an Isis Exclusive Target. In the event
that Isis has proposed all of the then-existing Isis Co-Exclusive Targets as the
Proposed Redesignated Target and Alnylam has disallowed each such proposal, then
(i) if the calendar year is [**], Isis will have the right to [**], or (ii) if
the calendar year is [**] pursuant to section 6.4(a) will become a right to
purchase an Exclusive Target Slot in such year, or (iii) if the calendar year is
[**] or later, Isis's right to [**] pursuant to section 6.4(a) will become a
right to [**], provided, however, that in no event shall the number of Exclusive
Target Slots held by Isis exceed [**].
(G) Diligence on Rejected Targets. If (i) Alnylam rejects a Proposed
Reserved Target under Section 6.4(e) above and (ii) Alnylam has [**] by the [**]
anniversary of the date Alnylam rejected such Proposed Reserved Target if
Alnylam is working on such target alone, or the [**] anniversary of the date
Alnylam rejected such Proposed Reserved Target if such rejected Proposed
Reserved Target is subject to a contractual obligation between Alnylam and a
Third Party that would preclude Alnylam from granting a license under Section
6.2 with respect to the rejected Proposed Reserved Target but Alnylam is [**],
then [**] such rejected Proposed Reserved Target [**].
(H) Diligence Obligations in Third Party Contractual Obligations.
With the goal of minimizing contractual encumbrances on Alnylam Patent Rights
with respect to Gene Targets in the absence of a reasonable intent to discover
and develop products that modulate such Gene Targets by Third Parties with which
Alnylam enters into such contractual obligations, Alnylam intends to seek
reasonable diligence obligations from Third Parties in negotiating contracts
between Alnylam and such Third Parties that would constitute contractual
obligations of Alnylam that would preclude Alnylam from granting licenses to
Isis under Section 6.2 with respect to Proposed Reserved Targets or that would
prevent Alnylam from granting Isis exclusive licenses with respect to Proposed
Redesignated Targets; [**].
(I) Confidentiality. The fact that Isis has designated or removed a
particular Gene Target within the Isis Target Pool is Confidential Information
of Isis, or that Alnylam has rejected a particular Gene Target proposed for a
Target Slot or disallowed the redesignation of a particular Gene Target is
Confidential Information of Alnylam, subject to the provisions of Article 12.
Neither Party shall disclose such Confidential Information of the other Party to
any Third Party, including its Third Party collaborators, or use such
Confidential Information of the other Party to guide its own (or its Third Party
collaborators') decisions to pursue particular Gene Targets, but Alnylam can use
such Confidential Information of Isis to decline a Third Party's request for a
license to such Gene Target.
6.5 Limitations on Licenses.
(A) The licenses granted under Sections 6.1 and 6.2 above are not
intended to grant any rights to Isis to practice the Alnylam Excluded
Technology. If Isis wishes to license any Alnylam Excluded Technology for which
Alnylam has the right to grant a sublicense, Alnylam will negotiate in good
faith an appropriate license.
(B) Licenses to Alnylam Patent Rights that are joint patents with
Third Parties (i.e., invented by one or more Alnylam inventors and one or more
non-Alnylam inventors)
9
{PAGE}
are licensed subject to the retained rights of any non-Alnylam inventors and
their assignees and licensees. There are no Alnylam Current Chemistry Patents or
Alnylam Current Motif and Mechanism Patents subject to such retained rights.
(C) Licenses to Alnylam Patent Rights that are subject to
contractual obligations between Alnylam and Third Parties in effect as of the
Effective Date are licensed subject to the restrictions and other terms
described in Exhibit 6.5(c) attached to the Addendum Transmittal. Isis hereby
agrees to comply, and to cause its sublicensees to comply, with such
restrictions and other terms.
(D) Notwithstanding anything to the contrary herein, the licenses to
Alnylam Patent Rights hereunder initially shall not include licenses to Patents
licensed by Alnylam from [**] under any agreement between Alnylam and [**] in
effect as of the Effective Date; provided that if any such licensed Patents
become issued Patents, Isis shall have the option of expanding its licenses to
Alnylam Patent Rights hereunder to include such issued Patents by notifying
Alnylam of such election and agreeing to pay to Alnylam, in addition to all
amounts otherwise payable to Alnylam hereunder (and without any right under
Section 8.2 to reduce such otherwise payable amounts as a consequence of such
additional payment amounts), all amounts that (i) become payable by Alnylam to
[**] as a result of such expansion of Isis' licenses and Isis' (and its
Affiliates' and sublicensees') exercise of its rights thereunder and (ii) are
described on Exhibit 6.5(d) attached hereto.
ARTICLE 7
LICENSE FEES AND ROYALTIES PAYABLE TO ISIS
7.1 License Fees. Alnylam will pay an initial, irrevocable, noncreditable
and non-refundable license fee of $5,000,000 to Isis, $3,000,000 of which will
be due within 5 business days of the Effective Date and the remaining $2,000,000
of which will be due on [**].
7.2 Royalties. Subject to the terms and conditions of, and during the term
of, this Agreement, Alnylam will pay to Isis royalties on sales of Alnylam
Products by Alnylam, its Affiliates or sublicensees (except Naked Sublicensees)
equal to [**]% of Net Sales. Alnylam may reduce the royalty due under this
section by [**]% of any additional royalties that Alnylam owes to Third Parties
on such Alnylam Product that arise from Alnylam acquiring access to new
technologies after the Effective Date; provided, however that (a) the royalty
due under this section can never be less than a floor of [**]% and (b)
additional royalties arising as the result of the addition, pursuant to Section
11.8, of Isis Future Chemistry Patents or Isis Future Motif and Mechanism
Patents to the Isis Patent Rights licensed to Alnylam cannot be used to reduce
the royalty.
7.3 Development Milestones.
(A) Alnylam, its Affiliates or sublicensees (except Naked
Sublicensees) will pay to Isis the following milestone payments for each Alnylam
Product within [**] after the first achievement of each of the following events:
10
{PAGE}
{TABLE}
{CAPTION}
MILESTONE EVENT MILESTONE PAYMENT
--------------- -----------------
{S} {C}
[**] US$[**]
[**] US$[**]
[**] US$[**]
[**] US$[**]
{/TABLE}
Each milestone payment under this Section 7.3(a) will only be due on [**]
Alnylam Product that modulates a particular Gene Target to trigger such
milestone payment, whether such milestone is achieved by Alnylam or an Affiliate
or sublicensee of Alnylam.
(B) Alnylam, its Affiliates or sublicensees will pay to Isis a
milestone payment of US$[**] for [**] within [**] after such [**], and not for
any other [**].
7.4 Sublicensing Revenue on Naked Sublicenses. Alnylam will pay Isis [**]%
of Sublicense Revenue from Naked Sublicenses granted by Alnylam and its
Affiliates under this Agreement.
7.5 Technology Access Fees from Bona Fide Collaborations.
(A) Alnylam will pay Isis a percentage of Technology Access Fees
received by Alnylam and its Affiliates pursuant to Bona Fide Drug Discovery
Collaborations and Development Collaborations entered into between Alnylam and a
Third Party. Such percentage will be calculated based on the year in which
Alnylam executes such Bona Fide Drug Discovery Collaboration or Development
Collaboration agreement using the following table:
{TABLE}
{CAPTION}
YEAR 2004/2005 2006 2007 2008+
---- --------- ---- ---- -----
{S} {C} {C} {C} {C}
APPLICABLE PERCENTAGE [**]% [**]% [**]% [**]%
{/TABLE}
(B) Notwithstanding the foregoing, for any Bona Fide Drug Discovery
Collaboration or Development Collaboration agreement, Alnylam will pay Isis a
minimum fee, payable upon the first Alnylam Product developed pursuant to such
Bona Fide Drug Discovery Collaboration agreement reaching [**] or within [**]
after the execution of such Development Collaboration agreement, equal to the
lesser of (i) $[**] or (ii) [**]% of the Technology Access Fees from such
collaboration; provided, however that Alnylam may credit any amounts paid Isis
pursuant to Section 7.5(a) above as the result of the same Bona Fide Drug
Discovery Collaboration or Development Collaboration agreement against this
minimum fee with such amounts credited only once, and provided further that if
following such payment, additional Technology Access Fees are owed to Isis for
such Bona Fide Drug Discovery Collaboration or Development Collaboration, the
amounts paid under this Section 7.5(b) (after crediting of any previous
Technology Access Fees paid under Section 7.5(a) in accordance with the
immediately preceding proviso) will be creditable against such future Technology
Access Fees. [**] the Effective Date [**] the Effective Date, Alnylam [**]
Alnylam [**]; provided, however, that [**] Alnylam [**] Alnylam [**] the
Effective Date, [**] subject to all the terms and conditions of this Agreement,
including but not limited to the
11
{PAGE}
terms of this Section 7.5; provided further, however, that [**] Alnylam in this
Agreement [**] Alnylam pursuant to [**] the provisions of section 7.5(a).
ARTICLE 8
LICENSE FEES AND ROYALTIES PAYABLE TO ALNYLAM
8.1 Option Fee. For each Isis Reserved Target for which Isis exercises its
option granted pursuant to Section 6.2, Isis will pay Alnylam an irrevocable,
noncreditable and non-refundable option fee of $[**] due upon the date of
exercise. Isis may credit any $[**] payment made under Section 6.4(a) for the
Target Slot occupied by such Reserved Target against this option fee. The option
fee is only payable once per Gene Target.
8.2 Royalties. Subject to the terms and conditions of, and during the term
of, this Agreement, Isis will pay to Alnylam royalties on sales of Isis Products
by Isis, its Affiliates or sublicensees equal to [**]% of Net Sales. Isis may
reduce the royalty due under this section by [**]% of any additional royalties
that Isis owes to Third Parties on such Isis Product that arise from Isis
acquiring access to new technologies after the Effective Date; provided, however
that that (a) the royalty due under this section can never be less than a floor
of [**]%, (b) additional royalties arising as the result of the addition,
pursuant Section 11.8, of Alnylam Future Chemistry Patents or Alnylam Future
Motif and Mechanism Patents to the Alnylam Patent Rights licensed to Isis, or as
the result of an expansion of Isis' licenses pursuant to Section 6.5(d), cannot
be used to reduce the royalty and (c) Isis shall not be entitled to reduce,
pursuant to this sentence, its royalty obligation to Alnylam below a royalty
obligation equal to the lesser of (i) Alnylam's aggregate royalty obligations
[**] existing as of the Effective Date [**] and (ii) Alnylam's aggregate royalty
obligations [**] as such obligations may be reduced from time to time after the
Effective Date.
8.3 Development Milestones.
(A) Isis, its Affiliates or sublicensees will pay to Alnylam the
following milestone payments for each Isis Product within [**] after the first
achievement of each of the following events:
{TABLE}
MILESTONE EVENT MILESTONE PAYMENT
--------------- -----------------
{S} {C}
[**] US$[**]
[**] US$[**]
[**] US$[**]
[**] US$[**]
{/TABLE}
Each milestone payment under this Section 8.3(a) will only be due on [**] Isis
Product that modulates a particular Gene Target to trigger such milestone
payment, whether such milestone is achieved by Isis or an Affiliate or
sublicensee of Isis.
(B) Isis, its Affiliates or sublicensees will pay to Alnylam a
milestone payment of US$[**] for the [**] that is an Isis Product that [**]
within [**] after such [**], and not for any other [**].
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{PAGE}
(C) Isis, its Affiliates or sublicensees will pay to Alnylam a
milestone payment of US$[**] for the [**] that is an Isis Product that [**]
within [**] after such [**], and not for any other [**].
ARTICLE 9
OTHER PAYMENT TERMS
9.1 Payments. All payments by a Party under this Agreement will be made in
United States dollars by bank wire transfer in next day available funds to such
bank account in the United States designated in writing by Alnylam or Isis, from
time to time. Royalties payable under Sections 7.2 and 8.2 shall be payable on a
quarterly basis within 45 days after the end of each calendar quarter. The Party
with such royalty obligation (the "Royalty-Paying Party") shall provide the
other Party with a report setting forth (i) gross sales of Alnylam Products or
Isis Products, as applicable, by the Royalty-Paying Party, its Affiliates and
sublicensees, (ii) all deductions from such gross sales taken in calculating Net
Sales, (iii) Net Sales of Alnylam Products or Isis Products, as applicable, by
the Royalty-Paying Party, its Affiliates and sublicensees, (iv) royalties
payable based on such Net Sales and (v) all other information relevant to the
calculation of such royalties, on a product-by-product and country-by-country
basis, for each calendar quarter within [**] after the end of such calendar
quarter.
9.2 Late Payments; Collections. In the event that any payment, including
royalty, milestone, Sublicense Revenue or Technology Access Fee payments, due
hereunder is not made when due, the payment will bear interest from the date due
at the lesser of (i) 1.5% per month, compounded monthly, or (ii) the highest
rate permitted by law; provided, however, that in no event will such rate exceed
the maximum legal annual interest rate. If a Party disputes in writing the
amount of an invoice presented by the other Party within [**] of receipt of such
invoice, interest will only be due on the correct amount as later determined or
agreed. The payment of such interest will not limit a Party from exercising any
other rights it may have as a consequence of the lateness of any payment. In
addition, each Party agrees to pay all external costs of collection, including
reasonable attorneys' fees, incurred by the other Party in enforcing the payment
obligations after a due date has passed under this Agreement.
9.3 Audit Rights.
(A) Upon the written request of Isis or Alnylam, as the case may be,
and not more than once in each calendar year, Isis or Alnylam will permit the
other Party's independent certified public accountant to have access upon
reasonable advance notice and during normal business hours to its records as may
be reasonably necessary to verify the accuracy of the royalty reports hereunder
for the current year and the preceding 2 years prior to the date of such
request. The accounting firm will disclose to the auditing Party only whether
the royalty reports are correct or incorrect, the specific details concerning
any discrepancies, and the corrected amount of Net Sales and royalty payments.
No other information will be provided to the auditing Party. Once a Party has
audited a particular calendar year under this section, the Party will be
precluded from subsequently auditing such calendar year. In any sublicense
granted by a Party under this Agreement, such Party will
13
{PAGE}
endeavor to secure a similar audit right and if reasonably requested by the
other Party will enforce such audit right.
(B) If such accounting firm concludes that additional royalties were
owed during such period, the delinquent Party will pay the additional royalties
within 90 days of the date such Party receives the accounting firm's written
report. The fees charged by such accounting firm will be paid by the auditing
Party unless the additional royalties, milestones or other payments owed by the
audited Party exceed 5% of the royalties, milestones or other payments paid for
the time period subject to the audit, in which case the audited Party will pay
the reasonable fees and expenses charged by the accounting firm.
(C) Each Party will treat all financial information subject to
review under this Section 9.3 or under any sublicense agreement in accordance
with the confidentiality provisions of Article 12, and will cause its accounting
firm to enter into an acceptable confidentiality agreement obligating such firm
to retain all such financial information in confidence pursuant to such
confidentiality agreement.
9.4 Taxes. If laws, rules or regulations require withholding of income
taxes or other taxes imposed upon payments set forth in Article 7 or 8, each
Party will make such withholding payments as required and subtract such
withholding payments from the payments set forth in Article 7 or 8. Each Party
will submit appropriate proof of payment of the withholding taxes to the other
Party within a reasonable period of time. The Parties will cooperate to obtain
the appropriate tax clearance and/or recover any such withholdings if possible.
ARTICLE 10
ALNYLAM RIGHT OF FIRST NEGOTIATION; PREFERRED LICENSEE
10.1 Right of First Negotiation. Isis will notify Alnylam in writing once
(i) Isis, on its own with no subsequent rights to Third Parties, intends to
initiate [**]or (ii) if a Third Party with which Isis has a Development
Collaboration or a collaboration on [**] before or during clinical development
or commercialization with no subsequent rights to Third Parties. Alnylam will
have [**] from the receipt of such notice to notify Isis in writing whether or
not Alnylam wishes to negotiate with Isis regarding the development and/or
commercialization of such Isis Product. If Alnylam fails to respond to Isis'
notice within the [**] or if Alnylam declines in writing to exercise its right
of first negotiation, then Isis will be free to develop and commercialize
(either on its own or with a Third Party) the Isis Product. If Alnylam wishes to
negotiate a license or development or commercialization rights in such Isis
Product, the Parties will negotiate in good faith the terms of the license or
collaboration agreement. If, despite good faith negotiations, Alnylam and Isis
do not reach agreement within [**] from Alnylam's exercise of its right of first
negotiation, then Isis will be free to develop and commercialize (either on its
own or with a Third Party) the Isis Product; provided that during the period
prior to the latest of (x) the [**] the Isis Product, (y) the [**] for the Isis
Product or (z) in the case of an Isis Product [**], Isis shall not enter into a
license or collaboration agreement with a Third Party for such Isis Product on
terms (the "More Favorable Terms") that are in the aggregate materially more
favorable to the Third Party than
14
{PAGE}
the terms on which Isis most recently offered in writing to grant such rights to
Alnylam without first offering the More Favorable Terms to Alnylam.
10.2 Preferred Licensee. If, after the Effective Date, Alnylam grants to
any Third Party that is not a Major Pharmaceutical Company a license under the
Alnylam Patent Rights to develop and commercialize Double Stranded RNA Products,
then if (a) either (i) the [**] terms of such license are more favorable to the
Third Party than the [**] terms hereunder with respect to Isis Products are to
Isis or (ii) the [**] covered by such license exceeds the [**] potentially
licensed to Isis hereunder for development and commercialization of Double
Stranded RNA Products, and (b) the roles to be played by Alnylam and such Third
Party in the development and commercialization of Double-Stranded RNA Products
under such Third Party license, the nature of the Gene Targets covered by such
Third Party license and any other relevant terms of such Third Party license do
not collectively justify the conditions described in the preceding clauses
(a)(i) and/or (a)(ii), then Alnylam shall modify the terms of its licenses to
Isis hereunder with respect to such conditions so that they are reasonably
equivalent to those granted to the Third Party.
ARTICLE 11
INTELLECTUAL PROPERTY
11.1 Ownership of Inventions.
(A) Each Party will solely own all inventions, technology,
discoveries, or other proprietary property (collectively, "Inventions") that are
made (as determined by U.S. rules of inventorship) solely by employees of or
consultants to that Party under this Agreement.
(B) Isis and Alnylam will jointly hold title to all Inventions,
whether or not patentable, that are made (as determined by the U.S. rules of
inventorship) jointly by employees of or consultants to Isis and Alnylam, as
well as to Patents filed thereon. Such Inventions will be "Joint Inventions,"
and Patents claiming such Joint Inventions will be "Joint Patents." Isis and
Alnylam will promptly provide each other with notice whenever a Joint Invention
is made. The Parties agree and acknowledge that, except insofar as this
Agreement provides otherwise, the default rights conferred on joint owners under
US patent law, including the right of each Party to independently practice,
license and use a Joint Patent, will apply in relation to the Joint Patents
throughout the world as though US patent law applied worldwide.
(C) The Parties agree, upon reasonable request, to execute any
documents reasonably necessary to effect and perfect each other's ownership of
any Invention.
11.2 Filing and Prosecution of Isis and Alnylam Patent Rights.
(A) Isis and Alnylam will work closely, through their interactions
on the RMC to ensure that, to the greatest degree permitted by United States and
foreign patent laws, Patents for inventions relating to all aspects of Double
Stranded RNA are obtained and shared.
15
{PAGE}
(B) Isis will be responsible for preparing, filing, prosecuting,
maintaining and taking such other actions as are reasonably necessary or
appropriate with respect to the Isis Patent Rights.
(C) Alnylam will be responsible for preparing, filing, prosecuting,
maintaining and taking such other actions as are reasonably necessary or
appropriate with respect to the Alnylam Patent Rights.
(D) Each Party will endeavor in good faith to coordinate its efforts
with those of the other Party to minimize or avoid interference with the
prosecution of the other Party's Patents. Neither Party will initiate or
participate in any opposition, reexamination, interference, litigation or other
proceeding for the purpose of narrowing or invalidating any claim in a Patent of
the other Party. Promptly after the Effective Date, Isis shall discontinue its
participation in the opposition proceeding relating to the following Patent
Controlled by Alnylam: EP 1,144,623 (Inventors: R. Kreutzer and S. Limmer).
(E) At either Party's request, the other Party will keep the
requesting Party continuously informed of and provide documentation of all
significant matters relating to the preparation, filing, prosecution and
maintenance of any designated Patent.
11.3 Filing and Prosecution of Jointly Owned Patents.
(A) The Research Management Committee will designate one of the
Parties as being the responsible Party for preparing, filing, prosecuting,
maintaining and taking such other actions as are reasonably necessary or
appropriate with respect to any Joint Patent.
(B) Each Party will keep the other Party continuously informed of
all significant matters relating to the preparation, filing, prosecution and
maintenance of Joint Patents, and shall provide the other Party with copies of
any substantial prosecution papers within thirty days of receipt.
11.4 Costs and Expenses.
(A) Each Party will bear its own costs and expenses in filing,
prosecuting, maintaining and extending the Alnylam Patent Rights and Isis Patent
Rights, respectively.
(B) The Parties will pay equal shares of all costs and expenses in
filing, prosecuting, maintaining and extending the Joint Patents.
11.5 Enforcement.
(A) Each Party will promptly advise the other of any suspected or
actual infringement of the Isis Patent Rights, Alnylam Patent Rights, or Joint
Patents by any person that reasonably affects the other Party's business. The
notice shall set forth the facts of such infringement or misappropriation in
reasonable detail.
(B) Subject to subsections (c) and (h) below, Alnylam will have the
sole and exclusive right, in its sole discretion and at its expense, to assert
and enforce any Isis Patent Rights, Alnylam Patent Rights or Joint Patents
against any party engaging in an unlicensed or
16
{PAGE}
unauthorized making, having made, using, selling, offering for sale or importing
of any allegedly infringing Double Stranded RNA.
(C) For any enforcement by Alnylam under subsection (b) above that
includes Isis Patent Rights covering a [**], Isis will actively participate in
the planning and conduct of such enforcement and will take the lead of such
enforcement to the extent that the scope or validity of any such Isis Patent
Rights covering a [**] is at risk.
(D) Except as set forth in Sections 11.5(b) and (h),
(I) Isis will have the sole and exclusive right, in its sole
discretion and at its expense, to assert and enforce any Isis Patent Rights;
(II) Alnylam will have the sole and exclusive right, in its
sole discretion and at its expense, to assert and enforce any Alnylam Patent
Rights; and
(III) The RMC will agree in advance on the enforcement of any
Joint Patent and will apportion enforcement responsibilities and recoveries
amongst the parties.
(E) The rights granted hereunder to Alnylam to enforce certain
licensed in or jointly owned Isis Patent Rights are further limited as described
in Exhibit 5.3(d) attached to the Addendum Transmittal. The rights granted
hereunder to Isis to enforce certain licensed in or jointly owned Alnylam Patent
Rights are further limited as described in Exhibit 6.5(c) attached to the
Addendum Transmittal.
(F) The nonenforcing Party will have the right, at its own expense,
to participate in the conduct of the enforcement action and to be represented in
such action by its own counsel.
(G) The enforcing Party will not enter into any settlement that
impacts the scope or interpretation of any claim of any Joint Patent or of any
Patent of the nonenforcing Party without prior written authorization of the
nonenforcing Party.
(H) If the Party with enforcement rights under section (b) or (d)
above (the "Enforcing Party") fails to initiate proceedings against any actual
or suspected infringement within [**] of receipt of written request for
enforcement from the other Party (the "Nonenforcing Party") and if the infringer
is directly competing with a Product (the "Affected Product") of such
Nonenforcing Party, then (i) if the license granted in this Agreement under
which the Nonenforcing Party is selling the Affected Product is exclusive or
co-exclusive, the Nonenforcing Party will have the right to assert and enforce
the patents that are allegedly being infringed, or (ii) if the license granted
in this Agreement under which the Nonenforcing Party is selling the Affected
Product is non-exclusive, the Nonenforcing Party [**] during the period [**];
provided that the provisions of the immediately preceding clause (ii) shall not
apply if the Enforcing Party elects to grant the Nonenforcing Party enforcement
rights with respect to such infringement. The Enforcing Party will not grant a
license to any such infringing Third Party with respect to any directly
competitive infringing product on terms materially more favorable (milestones
and royalties) than the terms of the license granted hereunder to the
Nonenforcing Party or, solely with
17
{PAGE}
respect to the Affected Product, will adjust the terms of such license so that
they are not materially less favorable than the terms of the license granted to
the infringing Third Party.
(I) Except as otherwise agreed to by the Parties as part of a
cost-sharing arrangement, any recovery realized as a result of such litigation,
after reimbursement of any reasonable litigation expenses of Isis and Alnylam,
shall be retained by the Party or Parties that brought and controlled such
litigation for purposes of this Agreement, except that any recovery realized as
a result of such litigation shall be treated as Net Sales of Isis Products or
Net Sales of Alnylam Products and distributed as such Net Sales would have been
distributed.
11.6 Manufacturing Patents. All provisions relating to Manufacturing
Patents shall be governed by the Manufacturing Services Agreement.
11.7 Third Party Patents. The Parties will consult about the need to
license any patents Controlled by Third Parties that would be useful or
necessary for either Party to research, develop, make, have made, use, sell,
offer for sale or import Double Stranded RNA Products. If it is agreed that
there is a desire to obtain a license or to acquire any such patent, the Parties
will negotiate in good faith regarding (i) the share of the financial
obligations relating to the license or acquisition that each Party will bear;
(ii) the compensation of any acquisition costs incurred in connection with
obtaining the Patent rights; and (iii) an agreement by the Parties to abide by
all terms of the agreement under which the patent rights are granted.
11.8 Future Licenses. If after the Effective Date, a Party (the
"Controlling Party") later invents or acquires rights or title to an invention
claimed by a Patent that (i) would be included in the Isis Future Chemistry
Patents or Isis Future Motif and Mechanism Patents if such Party is Isis or in
the Alnylam Future Chemistry Patents or Alnylam Future Motif and Mechanism
Patents if such Party is Alnylam (the "Additional Rights") and (ii) carry
financial or other obligations, then the Controlling Party must promptly notify
the non-Controlling Party of such acquisition or invention. If the
non-Controlling Party wishes to include such Additional Rights under the
licenses granted pursuant to Article 5 or 6, as applicable, the non-Controlling
Party will notify the Controlling Party of its desire to do so and will assume
all financial and other obligations to the Controlling Party's licensors or
collaborators, if any, arising from the grant to the non-Controlling Party of
such license. Any Additional Rights that do not carry financial or other
obligations shall be automatically included under the licenses granted pursuant
to Article 5 or 6, as applicable. If a Party pays any upfront payments or
similar acquisition costs to access Additional Rights, the Parties will
negotiate in good faith regarding sharing such acquisition costs and payments.
When acquiring or creating such Additional Rights, each Party will endeavor in
good faith to secure the right to sublicense such Additional Rights to the other
Party.
ARTICLE 12
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{PAGE}
CONFIDENTIALITY
12.1 Nondisclosure Obligation. All Confidential Information disclosed by
one Party to the other Party hereunder will be maintained in confidence by the
receiving Party and will not be disclosed to a Third Party or Affiliate or used
for any purpose except as set forth below.
12.2 Permitted Disclosures. Except as otherwise provided herein, a Party
may disclose Confidential Information received from the other Party:
(A) to governmental or other regulatory agencies in order to obtain
Patents or approval to conduct clinical trials, or to gain Marketing Approval;
provided that such disclosure may be made only to the extent reasonably
necessary to obtain such Patents or approvals;
(B) to any adjudicative body as required by law, provided that prior
to such disclosure, the Party subject to such disclosure obligation (the
"Notifying Party") promptly notifies the other Party of such requirement so that
such other Party can seek a protective order, confidential treatment or other
appropriate remedy; and provided, further, that in the event that no such
protective order, confidential treatment or other remedy is obtained, or that
such other Party waives compliance with this section, the Notifying Party will
furnish only that portion of the other Party's Confidential Information that it
is advised by counsel it is legally required to furnish;
(C) to Affiliates, sublicensees, agents, consultants, and/or other
Third Parties for the development, manufacturing and/or marketing of Isis
Products or Alnylam Products (or for such parties to determine their interest in
performing such activities) in accordance with this Agreement on the condition
that such Affiliates, sublicensees and Third Parties agree to be bound by the
confidentiality obligations contained in this Agreement;
(D) if such disclosure is required by law or regulation (including
without limitation by rules or regulations of any securities exchange or
NASDAQ), provided that prior to such disclosure, the Notifying Party promptly
notifies the other Party of such requirement so that such other Party can seek a
protective order, confidential treatment or other appropriate remedy; and
provided, further, that in the event that no such protective order, confidential
treatment or other remedy is obtained, or that such other Party waives
compliance with this section, the Notifying Party will furnish only that portion
of the other Party's Confidential Information that it is advised by counsel it
is legally required to furnish; or
(E) as necessary if embodied in products to develop and
commercialize such products.
Either Party may disclose (i) a copy of this Agreement on a confidential basis
to prospective lenders and investors, (ii) a mutually agreed upon redacted copy
of this Agreement on a confidential basis to prospective collaborators and (iii)
the terms of this Agreement as required under applicable securities laws or
regulations (including without limitation under rules or regulations of any
securities exchange or NASDAQ); provided, however, that,
19
{PAGE}
subject to Section 6.4(i), Alnylam shall not disclose Isis' past or current
Reserved Targets without the express prior written consent of Isis.
12.3 Announcements; Publicity.
(A) Each Party understands that this Agreement is likely to be of
significant interest to investors, analysts and others, and that either Party
therefore may make public announcements with respect to this Agreement. The
Parties agree that any such announcement will not contain confidential business
or technical information unless disclosure of confidential business or technical
information is required by law or regulation, in which case they will make
reasonable efforts to minimize such disclosure of confidential business or
technical information to that required by law or regulation. Each Party agrees
to provide to the other Party a copy of any such public announcement as soon as
reasonably practicable under the circumstances prior to its scheduled release.
Except under extraordinary circumstances, each Party shall provide the other
with an advance copy of any press release at least two (2) business days prior
to the scheduled disclosure. The other Party shall have the right to
expeditiously review and recommend changes to any announcement regarding this
Agreement or the subject matter of this Agreement, provided
402585
|
Alnylam Pharma
As referenced in this Strategic Collaboration and License Agreement:
Alnylam Pharmaceuticals, Inc – Agreement")
is effective as of March 11, 2004 (the "Effective Date") between Isis
Pharmaceuticals, Inc., a Delaware corporation having an address at 2292 Faraday
Avenue, Carlsbad, CA 92008 ("Isis") and Alnylam Pharmaceuticals, Inc ., a
Delaware corporation having an address at 790 Memorial Drive, Suite 202,
Cambridge, MA 02139 (together with its wholly owned subsidiaries Alnylam U.S.,
Inc., a Delaware corporation, and
_____________
Alnylam Pharmaceuticals, Inc – satisfactory addendum transmittal instrument (the "Addendum Transmittal")
delivering all Exhibits and Schedules identified herein as attached to the
Addendum Transmittal.
ARTICLE 2
EQUITY INVESTMENT
2.1 Isis will purchase from Alnylam Pharmaceuticals, Inc ., and Alnylam
Pharmaceuticals, Inc. will sell to Isis, 1,666,667 shares of Series D Preferred
Stock, at $6.00 per share (i.e., at an aggregate purchase price
_____________
Alnylam
Pharmaceuticals, Inc – the "Addendum Transmittal")
delivering all Exhibits and Schedules identified herein as attached to the
Addendum Transmittal.
ARTICLE 2
EQUITY INVESTMENT
2.1 Isis will purchase from Alnylam Pharmaceuticals, Inc., and Alnylam
Pharmaceuticals, Inc . will sell to Isis, 1,666,667 shares of Series D Preferred
Stock, at $6.00 per share (i.e., at an aggregate purchase price of $10,000,002),
_____________
Alnylam Pharmaceuticals, Inc – TABLE}
{S} {C}
Attention: Executive Vice President
Fax No.: +1 (760) 603-4652
with a copy to: Attention: General Counsel
Fax No.: +1 (760) 268-4922
if to Alnylam, to: Alnylam Pharmaceuticals, Inc .
790 Memorial Drive, Suite 202
Cambridge, MA 02139
Attention: President
Fax No.: +1 (617) 252-0011
with a copy to: Hale and Dorr LLP
60 State Street
Boston, Massachusetts
_____________
ALNYLAM PHARMACEUTICALS, INC – Party agrees to cause its Affiliates
to perform such obligations.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
{TABLE}
{S} {C}
ISIS PHARMACEUTICALS, INC. ALNYLAM PHARMACEUTICALS, INC .
By: /s/ B. Lynne Parshall By: /s/ Vincent J. Miles
-------------------------------- ---------------------------------
Name: B. Lynne Parshall Name: Vincent J. Miles
------------------------------- -------------------------------
Title: Executive Vice President Title: Senior Vice President,
------------------------------ ------------------------------
Business Development
------------------------------
{/TABLE}
_____________
dt 1399750
;
Amgen
As referenced in this Strategic Collaboration and License Agreement:
Amgen, Inc – only be
sublicensed in combination with a product that (i) uses such Patents and (ii)
employs as a material element other Isis Patent Rights.
5. AMGEN, GSK, CHIRON AND PFIZER.
Amgen, Inc ., Glaxo Smith Kline, Chiron Corporation and Pfizer, Inc. each have a
license to use some or all of the Patents identified by a "TV" in the Third
Party column
_____________
dt 1491896
;
Gen-Probe
As referenced in this Strategic Collaboration and License Agreement:
Gen-Probe Inc. – S} {C} {C} {C} {C} {C} {C}
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
{/TABLE}
{PAGE}
{TABLE}
{S} {C} {C} {C} {C} {C}
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**]
{/TABLE}
{PAGE}
3. GEN-PROBE AND NIH. (A)
The following Patents in-licensed from Gen-Probe Inc. and the National Institute
of Health are excluded:
U.S. Patent No. [**] entitled: [**];
U.S. Patent No. [**] entitled: [**]; and
U.S. Patent No. [**] entitled: [**]
4. MCGILL UNIVERSITY (B)
In
_____________
dt 1483446
;
|
Gilead Sciences
As referenced in this Strategic Collaboration and License Agreement:
GILEAD SCIENCES, INC – Field.
"Isis Field" means the use of [the Merck [**]] solely for the purposes of
developing [**].
Reference is made to the discussion regarding Merck nucleosides on the Excluded
Technology schedule.
2. GILEAD SCIENCES, INC .
Gilead has retained exclusive rights in the Patents identified by a "Gilead" in
the Third Party column to make, have made, use, import, export or sell compounds
and other
_____________
dt 1319674
;
ISIS Pharma
As referenced in this Strategic Collaboration and License Agreement:
Isis
Pharmaceuticals, Inc – AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
STRATEGIC COLLABORATION AND
LICENSE AGREEMENT
This Strategic Collaboration and License Agreement (the "Agreement")
is effective as of March 11, 2004 (the "Effective Date") between Isis
Pharmaceuticals, Inc ., a Delaware corporation having an address at 2292 Faraday
Avenue, Carlsbad, CA 92008 ("Isis") and Alnylam Pharmaceuticals, Inc., a
Delaware corporation having an address at 790 Memorial Drive, Suite
_____________
Isis Pharmaceuticals, Inc – by telephone), sent by nationally-recognized overnight courier or sent
by registered or certified mail, postage prepaid, return receipt requested,
addressed as follows:
{TABLE}
{S} {C}
if to Isis, to: Isis Pharmaceuticals, Inc .
Carlsbad Research Center
2292 Faraday Avenue
Carlsbad, CA 92008
{/TABLE}
23
{PAGE}
{TABLE}
{S} {C}
Attention: Executive Vice President
Fax No.: +1 (760) 603-4652
with a copy to:
_____________
ISIS PHARMACEUTICALS, INC – a Party, such Party agrees to cause its Affiliates
to perform such obligations.
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Effective Date.
{TABLE}
{S} {C}
ISIS PHARMACEUTICALS, INC . ALNYLAM PHARMACEUTICALS, INC.
By: /s/ B. Lynne Parshall By: /s/ Vincent J. Miles
-------------------------------- ---------------------------------
Name: B. Lynne Parshall Name: Vincent J. Miles
------------------------------- -------------------------------
Title: Executive Vice President Title: Senior Vice President,
------------------------------ ------------------------------
_____________
Isis
Pharmaceuticals, Inc – its sublicensees of any Isis Product.
42
{PAGE}
ADDENDUM TRANSMITTAL
Reference is hereby made to the Strategic Collaboration and License
Agreement executed as of March 11, 2004 (the "Agreement"), between Isis
Pharmaceuticals, Inc ., a Delaware corporation, and Alnylam Pharmaceuticals,
Inc., a Delaware corporation.
Capitalized terms used herein and not defined herein shall have the
meanings ascribed to them in the Agreement.
The
_____________
ISIS PHARMACEUTICALS, INC – Schedule 1-28
Schedule 1-30
Schedule 1-34
IN WITNESS WHEREOF, the Parties have executed this Addendum Transmittal as
of this 19th day of March, 2004.
{TABLE}
{S} {C}
ISIS PHARMACEUTICALS, INC . ALNYLAM PHARMACEUTICALS, INC.
By: /s/ B. Lynne Parshall By: /s/ Vincent J. Miles
------------------------------------ --------------------------------
Name: B. Lynne Parshall Name: Vincent J. Miles
---------------------------------- ------------------------------
Title: Executive Vice President Title: Senior Vice President,
--------------------------------- -----------------------------
_____________
dt 1528732
;
Pfizer
As referenced in this Strategic Collaboration and License Agreement:
Pfizer, Inc – that (i) uses such Patents and (ii)
employs as a material element other Isis Patent Rights.
5. AMGEN, GSK, CHIRON AND PFIZER.
Amgen, Inc., Glaxo Smith Kline, Chiron Corporation and Pfizer, Inc . each have a
license to use some or all of the Patents identified by a "TV" in the Third
Party column for their own internal target validation research.
6.
_____________
dt 1334587
|