Product shall mean any human pharmaceutical formulation for which either party has an ownership interest as of 4/12/95 or thereafter acquires an ownership interest or rights by means of a patent or know-how license during the term of this Agreement, and shall include (a) all bulk forms of a Product ("Bulk Product"); (b) Product which has been vialed but is not finished or packaged ("Vialed Product"); and (c) finished, packaged final dosage units of a Product ("Finished Product").
In the case of Genentech, Product shall include:
a) Canada Products;
b) Genentech Products;
c) IDEC Product;
d) Scios Product;
e) In-Licensed Products; and
f) DNase.
Canada Products shall mean the pharmaceutical products Activase (tissue plasminogen activator), Protropin and Nutropin (human growth hormones), Actimmune (interferon gamma) and Pulmozyme (dornase alpha) each as sold in Canada.
Genentech Product shall mean a human pharmaceutical formulation for which Genentech (i) has an ownership interest outside the U.S. as of 4/12/95 or (ii) thereafter has or acquires an ownership interest during the life of this Agreement but (iii) does not include Canada Products, DNase, IDEC Product, Scios Product and In-Licensed Products, human growth hormone products, tissue plasminogen activator products and interferon gamma products.
IDEC Product shall mean all of those products which are the subject of the Collaboration Agreement between Genentech and IDEC effective as of 3/16/95.
Scios Product shall mean all of those products which are the subject of the Collaboration Agreement between Scios Nova and Genentech dated 12/94 (see separate contract analysis), including Auriculin®, Natrecor® and/or any form or dosage of each partys small molecule, peptide or protein compound(s), which no later than ___(CON) has been synthesized and shown to produce biological activity from direct signalling through the guanylate cyclase A receptor within the Field (the treatment, prevention or diagnosis, in humans, of acute renal failure).
In-Licensed Product shall mean any human pharmaceutical formulation to which, subsequent to 4/25/95, Genentech acquires rights in the Roche Territory by means of a patent and/or knowhow license from a third party.
DNase shall mean a mucus-dissolving enzyme as defined in the DNase Supply Agreement.
On 7/1/99 ("Restatement Date"), the parties amended and restated the Agreement (99 Restatement).
B. Research Period:
Roche’s option to license Products from Genentech (see Section II.J) shall expire 10 years from the Effective Date.
Per the 99 Restament, the Options (see Section II.J) shall terminate on October 25, 2015 except as follows:
i) if Roche has paid an Option Extension Fee for a Product, Roche shall retain an option for that Product exercisable at the Phase III Completion Date for that Product;
ii) for a Product for which filing of an NDA has occurred but which has not yet reached the Phase II Completion Date, Roche shall continue to have an option exercisable at the Phase II Completion Date; and
iii) for any Product for which the 60 day period to exercise an option has arisen, that option shall continue for the remaining portion of that 60 day period.
Effective Date shall mean the date that the Amendment and Restatement of Article Third of the Certificate of Incorporation of Genentech amending the terms of the Redeemable Common Stock, par value $0.02, of Genentech becomes effective. [See also Section I.T]
C. Cost Sharing & Reimbursement Basis:
Roche shall reimburse Genentech 50% of all of Genentech’s Development Costs incurred in connection with a Product for which Roche has been granted a license.
The following provisions originally agreed remain valid after the 99 Restatement:
With respect to Canada Products, Genentech shall be reimbursed for 10% of Development Costs. For Products to which Genentech can only license Canadian rights to Roche, the 50% reimbursement of Development shall be reduced to 10%.
Development Costs shall comprise those costs, both direct and indirect, required to obtain the authorization to manufacture, formulate, fill, ship and/or sell the Product in commercial quantities to third parties in the U.S. incurred by Genentech up to the Phase II Completion Date (the date by which Genentech determines that it has clinical trial data and other information sufficient to undertake a Phase III trial). Development Costs after the Phase II Completion Date shall be limited to all such costs incurred (i) to the extent such costs result in the development of data, information, processes, materials or the like which are used by Roche in a filing for a registration or for the commercialization of that Product and (ii) to the extent such costs are incurred in any development of a process or processes used to manufacture the Product for supply to Roche.
If Roche exercises any of the Options, Roche shall pay Genentech:
a) with respect to Scios Product, a one time fee of $25 million in lieu of paying one-half of the Development Costs for Scios Product, assuming that a second Phase III Trial will be required for registration of Scios Product in the U.S.; if only one Phase III Trial is necessary, the parties will negotiate a higher one time fee;
b) also with respect to Scios Product, the reimbursement of Genentechs milestone obligations to Scios Nova as follows:
i) either $15 million (if Auriculin®) or $7.5 million (all others) upon Net Sales of $150 million in the Licensed Territory in any 12 month period; and
ii) either $5 million (if Auriculin®) or $2.5 million (all others) or upon regulatory approval in Japan.
c) with respect to IDEC Product, a one time fee of $10 million in lieu of paying one-half of the Development Costs for IDEC Product;
d) also with respect to IDEC Product, the reimbursement of Genentechs milestone obligations to IDEC as follows:
i) $10 million upon regulatory approval in the first major European Country; and
ii) $2.5 million upon the Patent Milestone Event; and
iii) $2.5 million if Genentech exercises an option to obtain a co-exclusive license in Asia upon request of Roche;
e) with respect an In-Licensed Product, Roche agrees to pay to Genentech a license fee or similar acquisition fee for rights in the Roche Territory and any milestone or similar payments related to the achievement of progress either in development, registration or sales in the Roche Territory. [See also Section I.W].
The following provisions were added per the 99 Restatement:
If Roche exercises its option for a license for a Product after notice of the Phase III Completion Date for that Product, Genentech shall be reimbursed by Roche for 50% of all of Genentech's Development Costs incurred prior to Phase II Completion Date, and 75% of all of Genentech's Development Costs incurred after Phase II Completion Date.
Upon exercise of the Options and thereafter, (1) if Roche exercises its option after the date of such Product's NDA filing, the parties shall each bear 50% of the Global Development Costs for that Product after the license; and (2) if Roche exercises its option for such Product after the Phase II Completion Date, Roche shall bear 75% of the Global Development Costs and Genentech shall bear 25% of the Global Development Costs for that Product after the license, with the following exceptions:
(a) with respect to Canada Products, Genentech shall be reimbursed for 10% of all of Genentech's Development Costs incurred for development of a Canada Product;
(b) with respect to IGF-1 Products, Roche shall bear 60% of all Global Development Costs incurred for development for any diabetes indication and Genentech shall bear 40% of such Global Development Costs;
(c) with respect to NGF Product, Roche shall bear 60% of all of Global Development Costs and Genentech shall bear 40% of such costs; provided that any costs related to AIDS related neuropathies shall be fully borne by Genentech only;
(d) with respect to any additional indications or new formulations or new dosing schedules for a Product other than the indication or formulation or dosing schedule for which the Product is being developed for initial registration and where the additional indication or new formulation or new dosing schedule would require a separate Phase III Trial for registration, (x) if Roche exercises its option associated with the Phase II Completion Date, each Party shall bear 50% of the Global Development Costs; and (y) if Roche exercise its option associated with the Phase III Completion Date, Roche shall bear 75% and Genentech shall bear 25% of such costs incurred; and
(e) if Roche exercises its option for a Product after notice of the Phase III Completion Date, no Global Development Costs will be shared for the completion of any clinical development or filing or preparation necessary for either party's registration for the indication which was the subject of the related Phase III Trial.
If Roche has paid an Option Extension Fee for a Product, $5 million shall be credited against the Development Costs reimbursable by Roche at the time of the exercise of the option following receipt of notice of the Phase III Completion Date.
Global Development Costs shall mean the costs specifically attributable to the development of a Product and actually incurred after the date of ROCHE's decision to exercise its option for a GENENTECH or an In-Licensed Product through the date of marketing approval or termination of development efforts of the final indication or formulation or dosing for which marketing approval is sought in the USA and/or the Collaborative Countries.
Such costs shall comprise those costs, both direct and indirect including Allocable Overhead (i.e. fully burdened costs), required to obtain the authorization to manufacture, formulate, fill, ship and/or sell a Product in commercial quantities in the USA and/or the Collaborative Countries to third parties.
Such Global Development Costs shall include but are not limited to costs of development including cost of studies on the toxicological, pharmacokinetical, metabolical or clinical aspects of a Product conducted internally or by individual investigators or consultants, manufacturing process development and scale up costs, qualification lots, costs for preparing, submitting, reviewing or developing data or information necessary for the purpose of submission to the FDA, EMEA or other governmental authority in order to obtain and/or maintain approval of a Product in the USA and/or the Collaborative Countries.
These costs shall include expenses for data management, statistical designs and studies, document preparation, and other administration expenses associated with the clinical testing program.
D. Upfront Payment:
None
E. Benchmark Amounts:
See Section I.C
F. Technology Acquisition Fees:
None
G. Payment Schedule:
Genentech shall choose one of the following methods for reimbursement of Development Costs incurred prior to Roches exercise of option, the choice being subject to Roche's consent which shall not be unreasonably withheld:
A) Lump sum payment equal to 50% of the cumulative Development Costs incurred prior to Roche's exercise of such option, due 30 days after Roche's exercise of such option, or
B) Quarterly payments equal to 150% of the Development Costs incurred after Roche's exercise of a Product option until such time as the cumulative amount paid thereunder equals 50% of the cumulative Development Costs incurred prior to Roche's exercise of such option plus interest at LIBOR from the date of such option exercise.
Per the 99 Restatement, reimbursement for Global Development Costs shall be paid quarterly.
H. Budgets:
N/A
I. Reimbursement Start Date:
N/A
J. Regulatory Filings:
Genentech shall be solely responsible for the development of its Products in the US and in the Roche Territory with respect to Products not licensed to Roche.
Per the 99 Restatement, following exercise of the Options, the parties shall share Global Development Costs as described in Section II.C.
The Dossiers for Canada Product, including all data, results, and documents with respect to pertinent Registrations in Canada, shall be transferred by Genentech to Roche, and Roche shall be entitled to use the Dossiers and all such data, information, results, and documents for its own purposes consistent with the terms of this Agreement.
K. Special Capital Requirements
N/A
L. Patent Ownership:
Each party shall own its own. Joint inventions shall be owned jointly.
M. Patent Filing Costs:
Each party shall be responsible for its own. With respect to joint inventions, the party from whom the majority of the data underlying such patent application arises shall have the right to undertake such filings, prosecutions and maintenance at its sole expense.
Genentech will register in each major country in the Roche Territory, at its own expense, at least one Trademark for each Product for which Roche has exercised its option.
N. Patent Defense Costs:
Each party shall be responsible for its own.
O. 3rd-Party Patents:
If the settlement of a lawsuit related to a Product requires any payments to a third party or license from a third party, Genentech agrees to reduce the royalty for that Product in that country by one-half of the amount of any such payments, up to a maximum reduction of 2% of the royalty due on Net Sales of that Product in that country. In such case, there shall be no additional reduction in royalties on Net Sales of that Product for that country because of dominating third party patent rights.
If as a result of an agreement between the parties, Genentech acquires a license to such patent or other intellectual property, the associated intellectual property acquisition and licensing costs shall be deemed to be part of Genentech's Fully Burdened Manufacturing Cost.
P. Non-Compete Provisions:
No provision
Q. Publications:
Roche shall be free to publish the results of the development activities to the extent that such publication will not result in the disclosure of Information of Genentech.
Roche shall submit to Genentech any such proposed publication at least 30 days in advance to allow Genentech to review such planned publication. Genentech will promptly report any decisions regarding the existence of patentable inventions, and should any patentable inventions be identified, Roche agrees to delay disclosure for a reasonable time period to allow filing of such patent applications.
In addition, Genentech shall have the authority to require deletion from any such planned publication of any Information of Genentech.
Information shall include all data provided to Roche for its evaluation in connection with the exercise of any option as well as any know-how, so long as such know-how is not generally ascertainable from publicly available information.
R. Core Technology:
Each owns its own.
S. Cancellation Amounts:
None
T. Termination:
The Agreement may be terminated by either party upon uncured material breach by the other party.
If at any time during the term of the Agreement, Roche's equity ownership of Genentech securities is less than 50% of all then outstanding securities, Roches right to exercise any unexercised options shall terminate immediately.
The followign provision was deleted on the 99 Restatement:
Roche shall have the right to terminate its license for a Product in the Roche Territory upon 6 months prior written notice to Genentech if Roche has completed at least one Phase III Trial for that Product and such results are unable to support a Registration of if results of other preclinical or clinical trials establish that further development would not provide data sufficient to support registration of the Product in a country as follows:
Germany
Italy
France
United Kingdom
Spain
Japan
Canada
Mexico
Brazil
Argentina
People's Republic of China
Turkey
South Korea
Australia
Per the 99 Restatement, Roche shall have the right to terminate its license for a Product in the Roche Territory upon 30 days prior written notice to Genentech.
U. Product Reversion:
To Genentech upon the original agreement.
Per the 99 Restatement:
1) Genentech shall have an nonexclusive license to all Roche Patents and Know-How related to any terminated Product upon termination;
2) upon expiration, Roche shall have a fully paid-up license;
3) if Roche terminates the Agreement for reasons other than safety reasons, Roche shall continue to remain liable for all of its obligations with respect to said Product, including its obligations with respect to payment of its portion of Global Development Costs, for a period of 12 months from the date of the termination notice or 6 months from the date of termination notice if at least one Phase III Trial for that Product has been completed and the results of that Trial or results of other preclinical or clinical trials establish that further development would not provide data sufficient to support are insufficient to support a Registration of the Product in any following country:
Germany
Italy
France
United Kingdom
Spain
Japan
Canada
Mexico
Brazil
Argentina
People's Republic of China
Turkey
South Korea
Australia;
provided that if Genentech enters in a license agreement with a third party with respect to such Product in the Roche Territory within 12 months from the date of termination notice, Roche shall be relieved of its obligations to pay its share of Global Development Costs to the extent the third party licensee is obligated to pay those same costs; and
4) if Roche's termination of the license is for safety reasons, Roche shall continue to remain liable for all obligations with respect to that Product to the extent they are incurred primarily to support Registration of that Product, for a period not to exceed 6 months from the date of termination, in the Roche Territory.
V. Change in Control:
Assignable with the prior consent only (see also Section I.T).
W. Options/Other:
With respect to future prospective in-licenses from third parties where Genentech is the prospective licensee and the license involves Products with rights in the Roche Territory, the parties shall discuss in advance the nature of reasonable terms for the Roche Territory. Any final license agreement with respect to the Roche Territory shall be on terms mutually acceptable to both parties, and the parties shall discuss and agree to a worldwide development and commercialization strategy with respect to such Product.
If at any time prior to the first Phase II Completion Date investigating a Genentech Product or In-Licensed Product, Genentech decides to discontinue sole development of such a Product and to license a third party the rights to that Product, Genentech shall not enter into any material licensing or marketing agreement with respect to any products, processes, inventions or developments made by Genentech or any subsidiary of Genentech unless it shall have first negotiated in good faith with Roche for a reasonable period of not less than three nor more than six months.
Per the 99 Restatement, upon termination of the development of a Product, the obligation to manufacture and supply Clinical Requirements or Commercial Requirements of that Product shall terminate in the following manner:
1) if termination is for reasons related to the safety of the Product, such obligation shall terminate immediately; and
2) if termination is for reasons other than safety, such obligation shall continue until the earlier of 2 years from the date of termination notice; or on the date the non-supplying party advises the supplying party that no such further supply is required; and
3) the non-supplying party shall have the royalty-free right and license to produce and supply all of its Clinical Requirements and Commercial Requirements for use and sale in the applicable Territory thereafter.
2. Product License(s)
A. License Holder/Type:
Genentech grants to Roche:
a) an exclusive license to register, use, sell and market Canada Products in Canada;
b) an exclusive license to register, use, sell and market DNase in the Roche Territory;
c) an exclusive license to register, use, sell and market all other Products in the Roche Territory, subject to Roches timely exercise of its option with respect to any such Product (see Section II.J);
d) an exclusive license to use the appropriate Trademarks in Canada for Canada Products in the Roche Territory for DNase and any other Trademarks upon the exercise of the option for a Product;
e) an exclusive license to make and/or have made Finished Product from Vialed Product or to make and/or have made Vialed Product from Bulk Product for for each Canada Product in Canada and any other Products in the Roche Territory, dependent on the parties' mutual agreement un such matter (see Section III.A).
Roche grants to Genentech a perpetual, royalty-free, non-exclusive license to register, make, have made, use, sell and market in the US i) the Canada Products and DNase and ii) any Genentech Product, IDEC Product or Scios Product for which Roche exercises its option (see Section II.J also).
With respect to the parties current collaborations on IIb/IIIa antagonists and ras farnesyl-transferase inhibitors, Genentech will have the sole, royalty-free right in the US, and Roche shall have the sole, royalty-free right in the Roche Territory to register, use, sell and market all products resulting from such collaborations.
[This Agreement supersedes the following existing agreements:
a) the Agreement between Roche, Genentech, and Genentech Europe regarding commercialization of DNase in Collaborative Countries;
b) the Agreement between Roche, Genentech, and Genentech Europe Limited regarding commercialization of DNase in Rest Of World;
c) the Agreement among Roche, Nippon Roche K.K., Genentech and Genentech Biopharmaceuticals Ltd. regarding commercialization of DNase in Japan.
The Parties intend to effect a transfer of the operations of Genentech Canada Ltd, Genentech Europe Limited and Genentech Ltd. (Japan) to Roche.]
B. Product Field of Use:
All uses.
C. Territory Splits:
Roche Territory mean all countries of the world except the U.S. and its territories and possessions.
Collaborative Countries shall mean Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Ireland, Luxembourg, Netherlands, Norway, Portugal, Spain, Switzerland, Sweden, United Kingdom and any additional countries that may subsequently become members of the EEC.
Per the 99 Restatement, Asia shall mean Japan, Bangladesh, Myanmar, Cambodia, Indonesia, People's Republic of China, Hong Kong, Republic of Korea, Laos, Malaysia, Papua New Guinea, Philippines, Singapore, Sri Lanka, Republic of China (Taiwan) and Thailand.
D. Royalty Rate:
Roche shall pay Genentech the following royalties:
a) 20% of Net Sales of DNase in each of the Collaborative Countries and Canada;
b) 12.5% of Net Sales on the first $100 million in aggregate Net Sales of DNase in countries other than the Collaborative Countries and Canada and thereafter a royalty of 15% on aggregate Net Sales of DNase in such countries in excess of $100 million;
b) 20% of Net Sales of each Canada Product;
d) 12.5% of Net Sales on the first $100 million in aggregate Net Sales of each Genentech Product licensed in the Roche Territory after Phase II Completion Date and a royalty of 15% on aggregate Net Sales of such Genentech Product in excess of $100 million; provided that if Roche has paid an Option Extension Fee (see Section II.J) for a Product, $5 million shall be credited against royalties payable Genentech by Roche in the first calendar year of sales by Roche in which Net Sales of that product exceed $100 million U.S.(this credit provision added per the 99 Restatement);
e) 20% of Net Sales of IDEC Product in each country of the Roche Territory for so long as Genentech is paying a royalty to IDEC in that country; thereafter, 10% of Net Sales for aggregate annual Net Sales of up to $75 million in all countries in that year and 8% for aggregate annual Net Sales over $75 million in all countries in that year;
f) 20% on annual Net Sales of Scios Product in each country of the Roche Territory for so long as Genentech is paying a royalty to Scios Nova in that country; thereafter, 10% of Net Sales for aggregate annual Net Sales of up to $150 million in all countries in that year and of 8% for aggregate annual Net Sales of over $150 million in all countries in that year; and
g) with respect to Scios Products, Roche shall be bound to copromotion in Canada and the sharing of operating profits and losses with respect to Canada pursuant the Scios Nova Agreement.
For each annual increase in Net Sales of Activase in Canada in excess of 110% of 1994 Net Sales of Activase in Canada, Roche agrees to make an additional payment to Genentech of 10% of Net Sales of Activase in Canada for that year in excess of 1994 Net Sales; provided, however, that the total of such annual payments shall not exceed $27 million.
In addition, Roche shall pay to Genentech a royalty for the use of each Trademark in each country in the Roche Territory at a rate of 2% of Net Sales by Roche in such country of the Product represented by the Trademark for so long as the Trademark is used.
Per the 99 Restatement, if there is one or more products generically equivalent to a Product competing with that Product and having a market share in that country of at least 25% of the market (in units), Genentech and Roche shall negotiate in good faith a modification to the royalty term or rate.
[See Section II. F also.]
E. Right to Sublicense:
Yes with Genentech's prior consent which shall not be unreasonably withheld.
F. Term/Patent Life:
Royalty obligations shall continue until the latter to occur of (i) the last expiration of a valid claim of a Genentech Patent which the sale of that Product would infringe in that country but for the license granted herein or (ii) a period of 25 years from the date of the first commercial introduction in that country.
The following provisions were added per the 99 Restatement:
If Roche's equity ownership of Genentech securities is less than 50% of all such securities then outstanding (the "Divestiture Date"), the royalty obligation for a Product in each country shall be reduced to the latter to occur of (i) the last expiration of a Valid Claim of a Genentech Patent licensed; or (ii) a period of 10 years from the date of First Commercial Introduction in that country.
If because of the immediate applicability of the shortened term for the payment of royalties for a Product, royalties would no longer be payable in a country after the Divestiture Date, Roche shall continue to pay royalties on that Product in that country over the following period in a decreasing manner as follows:
Period % of applicable royalty
Divestiture Date to end of that calendar year 100;
First full calendar year after Divestiture Date 80;
Second full calendar after Divestiture Date 60;
Third full calendar year after Divestiture Date 40;
Fourth full calendar year after Divestiture Date 20;
Fifth full calendar year after Divestiture Date and thereafter 0; and
Thereafter, Roche shall have a fully paid-up license for such Product.
G. Adv/Min Royalty & Diligence Requirement
Best efforts shall mean efforts equivalent to that used by Roche to develop, promote and sell Roches major pharmaceutical products.
If Roche fails to exercise its best efforts to commercialize a Product in a country, then Genentech shall have the right (i) to terminate Roches license if registration for the Product has not been initiated or (ii) to convert the license to a non-exclusive one if registration has been initiated.
H. Royalty Accounting:
Net Sales shall mean the gross invoice price for sales of the product less:
a) deductions of returns;
b) rebates (price reductions including Medicare or similar types of rebates);
c) volume discounts; and
d) sales taxes and other taxes directly linked to sales.
In addition to this above computed adjusted gross invoice price, for all other expenses like sales deductions (outward freights, transportation insurance, packing materials for dispatch of goods, custom duties), sales expenses (discounts granted later than at the time for invoicing), cash discounts and other direct expenses, there shall be a lump sum deduction of 3%.
Requesting party shall pay costs.
I. Patent-Royalty Tie-In:
NA
J. Options/Other:
Genentech grants to Roche an option, on a Product-by-Product basis, for an exclusive license in the Roche Territory to register, use, sell, market and, to the extent contractually able to grant such rights, to make Vialed Product from Bulk Product, for the following:
1) each Genentech Product;
2) In-Licensed Product;
3) IDEC Product (except that a co-exclusive license in Asia is contingent upon Genentech's option); and/or
4) Scios Product ("Options").
Upon the occurrence of the Phase II Completion Date,Genentech shall so notify Roche and the Commercialization Committee shall meet. Roche shall have 30 days to exercise its option after the commencement of such meeting.
Within 45 days of the Effective Date, the Commercialization Committee shall meet to review summary results of clinical data for any Genentech Product and In-Licensed Product for which there has beena Phase II Completion Date as of the Effective Date and for the IDEC Productand Scios Product. Roche shall exercise or decline its option within 90 daysof the commencement of such meeting.
Per the 99 Restatement, the following provisions were added:
The Options shall be exercisable upon (i) such Product's filing of an IND; (ii) at the first Phase II Completion Date for such Product, or (iii) if Roche has paid Genentech the Option Extension Fee, at the Phase III Completion Date for such Product.
The Option Extension Fee shall be $10 million.
If at any time prior to NDA filing of a Genentech Product or In-Licensed Product, Genentech decides to discontinue sole development of such a Product and to license a third party the rights to that Product, that Product shall no longer be subject to the provisions of this Agreement.
If at any time upon or after NDA filing of a Genentech Product or In-Licensed Product, the occurrence of the first Phase II Completion Date for such a Product, or thereafter unless Roche has paid the Option Extension Fee, Genentech decides to discontinue sole development of such a Product and to license a third party the rights in the Roche Territory to that Product, but that Product is not subject of a license agreement, the terms of this Agreement (including but not limited to Roche's option rights) with regard those rights to such Product in the Roche Territory shall continue to remain in full force and effect; provided that if Roche has paid the Option Extension Fee, Genentech shall have no rights to grant rights to third parties to that Product in the Roche Territory.
If Roche determines that it has no interest in maintaining its future option rights it will so inform Genentech so that Genentech may pursue other development and commercial arrangements with others.
Roche grants Genentech the option (the "Opt-in Option") to participate and share in the development and commercialization of Xubix (GP-IIbIIIa), exercisable at any time up to and within 30 days after NDA approval of the first indication (acute or chronic therapy) in the United States for all indications.
Upon exercise of the Opt-in Option, Genentech shall reimburse Roche for 50% of Roche's Development Costs for Xubix (including Phase III Development Costs) incurred by Roche from and
after May 1, 1997 through the exercise date and for Phase III Development costs incurred prior to May 1, 1997; shall pay the additional sum of $25 million; and negotiate in good faith and enter into a more detailed commercialization and co-development agreement consistent with the following:
a) any Development Costs incurred after such opt-in date shall be equally shared;
b) Genentech and Roche shall have semi-exclusive rights in the United States, with Genentech and Roche co-promoting Xubix and sharing net profits on a basis of 60% to Genentech and 40% to Roche if the first indication for which marketing approval is sought is for acute therapy or on a 50/50 basis if the first indication is for chronic therapy;
c) Roche shall have the sole right in the Roche Territory to register, use, sell and market all Products resulting from such collaboration;
d) neither Party shall pay the other royalties for sales of any Xubix; provided that Roche shall pay Genentech a 6% royalty on Net Sales of Xubix if Genentech does not exercise the Opt-in Option;
e) such royalty obligation shall persist for the longer of (a) a period of 10 years from First Commercial Introduction of Xubix in that country or (b) until the last expiration of a valid claim of a Genentech Patent which the sale of Xubix would infringe in that country without the license granted in the IIbIIIa Agreement; and
f) if there are one or more products generically equivalent to Xubix which directly compete with Xubix in a country having a market share in that country of at least 25% of the market (in units) for Xubix, Genentech and Roche shall negotiate in good faith a modification to the royalty term or rate.
3. Manufacturing & Supply
A. Right Holder/Type:
All by Genentech, except that if Roche exercises its option for a license for a Product and such Product is a Small Molecule Product, Roche shall be responsible for the manufacture of Genentech's clinical requirements and commercial requirements of such Small Molecule Product in terms equivalent to those applicable to Genentech's supply to Roche.
Small Molecule Product shall mean a synthetic molecule that is not a protein or peptide.
If Roche exercises its Option for a Product, such Product shall be supplied as follows:
a) Scios Product shall be supplied by Scios Nova, under the terms and conditions to be negotiated;
b) IDEC Product shall be supplied by IDEC, under the terms and conditions specified in the IDEC Agreement; and
c) In-Licensed Product shall be supplied by the licensor, under the terms and conditions specified in the Agreement between Genentech and such licensor.
B. Bulk/Dosage Form:
Vialed Product, Bulk Product or Finished Product as agreed by the parties.
C. Territory:
Worldwide
D. Reimbursement Basis:
Except for IDEC Product and Scios Product, unless the terms and conditions applicable to an In-Licensed Product provide otherwise, commercial requirements shall be supplied by Genentech to Roche at Genentech's Fully Burdened Manufacturing Cost plus a margin of 20%; and such other amounts as specified in the Agreement regarding the Commercialization of Genentech's Products in the Roche Territory.
Genentech's Fully Burdened Manufacturing Cost shall comprise the sum of:
a) the cost of goods including direct labor and material and product testing costs as well as allocable overhead;
b) allocable intellectual property acquisition, licensing and royalty costs paid to third parties; and
c) any other costs borne by Genentech for transport, customs clearance and storage of (i.e., freight, duty, insurance and warehousing).
E. Proc. Dev. Terms:
All by Genentech except for Small Molecule Products. The fully burdened costs associated with the development of manufacturing process shall be included in the Development Costs.
The fully burdened costs associated with the development of a manufacturing process for any Small Molecule Product shall be shared by the parties in proportion to their expected share of the worldwide market.
F. Clinical Use Manufacturing:
Except for IDEC Product, Scios Product a Small Molecule Products, unless the terms and conditions applicable to an In-Licensed Product provide otherwise, all clinical requirements shall be supplied by Genentech at the Genentech 's Fully Burdened Manufacturing Cost.
G. Shipment Terms:
FOB Genentech's origin.
H. Financing:
The manufacturing party shall be solely responsible for the capital costs associated with each manufacturing facility.
I. Escape Clause:
Per the 99 Restatement, Roche shall have the right to manufacture Bulk Product or Vialed Product (i) if Roche can demonstrate that it is able to manufacture Bulk Product or Vialed Product at a lower price than the supply price of Genentech, or (ii) if Genentech is not able to supply Roche's Commercial Requirements in the Roche Territory, or (iii) if Genentech intends to have a third party toll manufacture Bulk Product or Vialed Product.
J. Product Liability:
Per the 99 Restatement, Roche indemnifies Genentech after the title has been transferred.
K. Options/Other:
DNase Supply Agreement between Roche and Genentech shall be amended to include Canada and Japan. All Vialed Product for clinical requirements shall be supplied by Genentech Europe to Roche at Genentech Europes Fully Burdened Manufacturing Cost, and all Bulk Product for commercial requirements shall be supplied at Genentech Europes Fully Burdened Manufacturing Cost plus a margin of 20%.
4. Collaboration Management
A. Representation:
The parties shall establish:
a) Commercialization Committee, consisting of five representatives from each party;
b) Management Committee, consisting of three representatives from each party;
c) Development Committee, consisting of three representatives from each party; and
d) Finance Committee, consisting of two representatives from each party.
B. Quorum:
Not specified
C. Basis of Actions:
Not specified
D. Meetings:
Management Committee shall meet at least once per year, Development Committee at least three times per year, and all other Committees shall meet on an as needed basis.
E. Disagreements:
Any dispute shall be referred to the CEO of Genentech and a member of Roches Executive Committee. If the parties are unable to settle such dispute, then such dispute shall be settled by arbitration according to the procedural rules of the International Arbitration Rules of the Zurich Chamber of Commerce if arbitration is requested by Genentech, or, per the 99 Restatement, under the AAA rules if requested by Roche.
F. Buyout/Windup:
NA
G. Options/Other:
None
5. Equity Investment
A. Type of Security:
NA
B. Pricing:
NA
C. Board Seat:
NA
D. Research Tie-Ins:
NA
E. Options & Rights:
None
6. Signatories
A. For Drug Company:
Rudolf Schaffner
Head of Licensing (per 99 Restatement signatories)
B. For Biotech Company:
Arthur D. Levinson
President & CEO (per 99 Restatement signatories)
Key: CON Confidential Treatment granted by SEC; material omitted from public filings. UKN Unknown NA Not applicable
