Sample Business Contracts
Collaboration and License Agreement - Pharmacopeia Inc. and N.V. Organon
Collaboration Forms
COLLABORATION AND LICENSE AGREEMENT
This COLLABORATION AND LICENSE AGREEMENT (the "Agreement"), effective as of the 25th day of February 2002 (the "Effective Date"), is made by and between Pharmacopeia, Inc., a Delaware corporation, having a principal place of business at 3000 Eastpark Boulevard, Cranbury, New Jersey 08512 ("Pharmacopeia"), and N.V. Organon, a Dutch Company limited by Shares, having a principal place of business at Kloosterstraat 6, 5342 AB Oss, The Netherlands ("Organon").
BACKGROUND
WHEREAS, Pharmacopeia has internal expertise in the screening and optimization of compounds;
WHEREAS, Organon is interested in utilizing the expertise of Pharmacopeia in the identification of Lead Compounds against certain Targets; and
WHEREAS, Organon and Pharmacopeia wish to enter into a Research Collaboration the objective of which will be for Pharmacopeia to deliver eight (8) Lead Series and for Organon to develop market and sell Collaboration Products.
NOW THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth in this Agreement, the Parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the meanings set forth below:
1.1 "Affiliate" means any Person controlled by, controlling, or under common control with a Party. For the purpose of this Section 1.1 only, "control" shall refer to (a) the possession, directly or indirectly, of the power to direct the management or policies of a Person, whether through the ownership of voting securities, by contract or otherwise, or (b) the ownership, directly or indirectly, of at least fifty percent (50%) (or, if less, the maximum ownership interest permitted by law) of the voting securities or other ownership interest of a Person.
1.2 "Assay" collectively refers to the Primary Assay and the Secondary Assay.
1.3 "Assay Improvements" have the meaning set forth in Section 2.3.
1.4 "Collaboration Product" means any therapeutic or prophylactic product that contains a Lead Compound or Derivative Compound thereof.
1.5 "Columbia License" means that certain license agreement effective as of July 16, 1993, as amended and restated as of October 6, 1995, entered by and between Pharmacopeia and the Trustees of Columbia University in the City of New York and the Cold Spring Harbor Laboratory.
1.6 "Combination Product" means (1) a Collaboration Product that comprises two (2) or more active ingredients, at least one of which is a Lead Compound or a Derivative Compound thereof.
1.7 "Confidential Information" as to each Party, means such Party's confidential information, Patent Rights and Know-how, all the data and materials of that Party relating to the Research Collaboration, the Target Information, Lead Compounds, Organon Compounds, Derivative Compounds thereof and Collaboration Products, and including without limitation, all research, technical, clinical development, manufacturing, marketing, financial, personnel, and other business information and plans of such Party, which if disclosed in written, graphic or electronic form, is marked or otherwise
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designated as "confidential" or "proprietary" and, if disclosed orally, is summarized and designated as "confidential" or "proprietary" in a writing provided to the Party receiving it no later than thirty (30) days from such disclosure.
1.8 "Controls" or "Controlled" means possession of the ability to grant licenses or sublicenses without violating the terms of any agreement or other arrangement with, or the rights of, any Third Party.
1.9 "Derivative Compound" means a compound which is a chemical modification of a Lead Compound or other active structure disclosed by Pharmacopeia to Organon, having activity against the same Target as such Lead Compound or other active structure, which (i) results from a chemical synthesis program based on Lead Compound or other active structure disclosed by Pharmacopeia to Organon, or (ii) is based on structure-function data relating thereto, or (iii) is based on Developed Technology. For clarification purposes it is understood that Organon can independently find compounds against the Target from its own discovery activities. These compounds will not be designated as Derivative Compounds if Organon, as shown by contemporaneous documentation, has developed these compounds independently of the intellectual property described in subsections (i)-(iii) above. Further, it is understood that Derivative Compounds with respect to a Target shall not include a compound if information about such compound's activity against the Target already was in the public domain.
1.10 "Developed Technology" means any and all data or information whether tangible or intangible, including without limitation the Parties' Know-how and Patent Rights, which (i) is necessary to make or use Lead Compounds, or to develop, make, use or sell Collaboration Products based thereon, and (ii) which was conceived or reduced to practice during and in the course of the Research Collaboration, by employees or agents of Organon, Pharmacopeia and any of their respective Affiliates, either alone or jointly. Developed Technology shall not include Pharmacopeia Base Technology, Organon Base Technology or Excluded Technology.
1.11 "Development Candidate" means any Lead Compound or Derivative Compound with respect to which Organon has elected to pursue a GLP Toxicity Study.
1.12 "Excluded Technology" means any and all technical data or information, whether tangible or intangible, including without limitation Know-how and Patent Rights owned or Controlled by Pharmacopeia or its Affiliates relating to the Columbia License, the creation or use of encoded combinatorial chemical compound libraries, tag or marker compound engineering and decoding, computer software, or high throughput screening assays.
1.13 "Exclusivity Period" has the meaning set forth in Section 4.1.
1.14 "Fair Market Value" means the cash consideration, which a willing seller would realize from an unrelated willing buyer in an arm's length sale of an identical item sold in the same quantity and at the same time and place of the transaction.
1.15 "FDA" means the U.S. Food and Drug Administration, any successor thereto, or any corresponding foreign registration or regulatory authority.
1.16 "First Commercial Sale" means, with respect to a Collaboration Product in any country, the first sale for use or consumption by the general public of such Collaboration Product in such country after all Regulatory Approvals have been obtained in such country.
1.17 "FTE" means a full-time equivalent Pharmacopeia or Organon scientist.
1.18 "Fully Allocated Manufacturing Cost" means the cost of direct materials, direct labor (which includes fringe benefits), other direct manufacturing costs, including but not limited to, factory costs and indirect costs, such as supervisory and support labor, supplies, utilities, machinery and equipment maintenance costs (including associated depreciation) and plant operating and maintenance costs (including associated depreciation).
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1.19 "Inactive Compound" means a Pharmacopeia Compound that was screened in the Research Collaboration against a Target and was not found to show activity against such Target. This activity can be agonistic or antagonistic or modulatory in nature.
1.20 "IND" means an Investigational New Drug Application, as defined in the U.S. Food, Drug and Cosmetic Act and the regulations promulgated thereunder for initiating clinical trials in the United States, or any corresponding foreign application, registration or certification.
1.21 "Initial Research Term" means the period commencing on the Effective Date and ending five (5) years thereafter.
1.22 "Joint Research Committee" or "JRC" means the entity organized to supervise the Research Collaboration and acting pursuant to Article 3.
1.23 "Know-how" means all inventions, technology, or other information discovered or developed by or for a Party as of the Effective Date, or in connection with and during the Research Collaboration, whether or not patentable, constituting materials, methods, processes, techniques or data, necessary for the development, manufacture or use of Lead Compounds or Derivative Compounds, or for the manufacture, use or sale of a Collaboration Product.
1.24 "Lead Compound" means a Pharmacopeia Compound which meets the criteria set forth in Section 2.4 and is available for license to Organon pursuant to the terms and conditions of this Agreement. For clarification purposes it is understood that Organon can independently find compounds against the Target from its own discovery activities. These compounds will not be designated as Lead Compounds if Organon, as shown by contemporaneous documentation, has developed these compounds independently of the intellectual property described in Section 1.9(i)(iii). Further, it is understood that Lead Compounds with respect to a Target shall not include a compound if information about such compound's activity against the Target already was in the public domain.
1.25 "Lead Series" has the meaning set forth in Section 2.4.
1.26 "Library" means any chemical compound library prepared by or on behalf of Pharmacopeia and screened during the Research Term, excluding any chemical compound library used in Pharmacopeia's collaboration with Schering-Plough
1.27 "Library Compound" means any compound that was, prior to the Effective Date, or is, at any time during the Research Term, contained in a Library.
1.28 "NDA" means a New Drug Application, as defined in the U.S. Food, Drug and Cosmetic Act and the regulations promulgated thereunder, or any corresponding foreign application, registration or certification.
1.29 "Net Sales" as to Organon, means the amount invoiced and any other amounts or rebates received by Organon, its Affiliates or Sublicensees for the worldwide sale of Collaboration Products to bona fide independent Third Parties and as to Pharmacopeia, the amount invoiced and any other amounts or rebates received by Pharmacopeia or its Affiliates for the worldwide sale of Collaboration Products to bona fide independent Third Parties less to the extent paid, allowed or given: (i) outer packing, freight or transportation charges and insurance relating thereto, (ii) sales, value added and excise taxes or customs duties paid by the selling party, and any other governmental charges (excluding income taxes) actually imposed upon the sale of the Collaboration Products, (iii) reasonable distributors' fees, rebates or allowances, actually granted, allowed or incurred, (iv) trade and prompt payment discounts, quantity discounts, cash discounts or reasonable charge-backs actually granted, allowed or incurred in the ordinary course of business in connection with the sale of the Collaboration Products, and (v) reasonable allowances or credits to customers, not in excess of the selling price of the Collaboration Products, on account of rejection, outdating, recalls or return of, or price adjustments regarding the Collaboration Products.
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A "sale" as to Organon shall include any transfer or other disposition for consideration of a Collaboration Product, and Net Sales shall include the fair market value of all other consideration received by Organon, its Affiliates or its Sublicensees from the sale or distribution of a Collaboration Product, whether such consideration is in cash, payment in kind, exchange or another form. In the event that a Collaboration Product is packaged with other Organon products, any discount applied to such Collaboration Product to determine Net Sales shall be no greater than the average discount of the entire package. A "sale" as to Pharmacopeia shall include any transfer or other disposition for consideration of a Collaboration Product, and Net Sales shall include the fair market value of all other consideration received by Pharmacopeia or its Affiliates from the sale or distribution of a Collaboration Product, whether such consideration is in cash, payment in kind, exchange or another form. In the event that a Collaboration Product is packaged with other Pharmacopeia products, any discount applied to such Collaboration Product to determine Net Sales shall be no greater than the average discount of the entire package
The sale of a Collaboration Product between Organon, its Affiliates or Sublicensees solely for the research or clinical testing of such Collaboration Product or for indigent or similar public support or compassionate use programs shall be excluded from the computation of Net Sales. All sales of Collaboration Products between Organon and its Affiliates or its Sublicensees shall be disregarded for purposes of computing Net Sales, unless such a purchaser is the end-user of such Collaboration Product. The sale of a Collaboration Product between Pharmacopeia or its Affiliates solely for the research or clinical testing of such Collaboration Product or for indigent or similar public support or compassionate use programs shall be excluded from the computation of Net Sales. All sales of Collaboration Products between Pharmacopeia and its Affiliates or its Sublicensees shall be disregarded for purposes of computing Net Sales, unless such a purchaser is the end-user of such Collaboration Product.
To calculate the value of Net Sales of Combination Products, the gross sales of such Products will be multiplied by the fraction A/(A + B) where A is the fair market value of the Lead Compound or Derivative Compound when sold separately, and B is the fair market value of the other active ingredient when sold separately. Allowed deductions may then be subtracted from the proportion of gross sales attributable to the Lead Compound or Derivative Compound to compute Net Sales.
1.30 "Non-Designated Lead Compound" has the meaning set forth in Section 2.4(c).
1.31 "Organon Base Technology" means any and all technical data or information, whether tangible or intangible, including without limitation Organon's know-how and Patent Rights (i) which is necessary to conduct the Research Collaboration, and (ii) which Organon owns or Controls as of the Effective Date or during the Research Term, and conceives or reduces to practice outside the Collaboration, without any intellectual contribution from Pharmacopeia.
1.32 "Organon Compound" has the meaning set forth in Section 2.5.
1.33 "Party" means Pharmacopeia or Organon. Pharmacopeia and Organon shall be collectively referred to as the Parties.
1.34 "Patent Committee" means that committee to be formed pursuant to Section 3.5.
1.35 "Patent Rights" means any and all patents and patent applications (which shall be deemed to include certificates of invention and applications for certificates of invention) which as of the Effective Date or during the term of this Agreement are owned or Controlled by Pharmacopeia or Organon, that claim a Lead Compound or Derivative Compound, or method of use or process for the synthesis thereof or composition of matter containing such Lead Compound or Derivative Compound and the divisions, continuations, confirmations, re-examinations, any provisional applications, supplementary protection certificates or the like of any such patents and patent applications.
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1.36 "Person" means any natural person, corporation, firm, business trust, joint venture, association, organization, company, partnership or other business entity, or any government or agency or political subdivision thereof.
1.37 "Pharmacopeia Compound" means a Library Compound or a compound identified by Pharmacopeia in the Research Collaboration.
1.38 "Phase I," "Phase II" and "Phase III" means Phase I (or Phase I/II), Phase II (or Phase II/III) and Phase III clinical trials, respectively, in each case as prescribed by applicable FDA IND Regulations, or any corresponding foreign statutes, rules or regulations.
1.39 "Pharmacopeia Base Technology" means any and all technical data or information, whether tangible or intangible, including without limitation Pharmacopeia's Know-how and Patent Rights (i) which is necessary to conduct the Research Collaboration, to make or use Lead Compounds, or to develop, make, use or sell Collaboration Products, and (ii) which Pharmacopeia owns or Controls as of the Effective Date or during the Research Term, and conceives or reduces to practice outside the Collaboration, without any intellectual contribution from Organon. Pharmacopeia Base Technology shall not include Excluded Technology.
1.40 "Potential Lead Compound" has the meaning set forth in Section 2.4.
1.41 "Primary Assay" means on a Target-by-Target basis, the primary assay provided by Organon for screening in the Research Collaboration.
1.42 "Proposed Target" has the meaning set forth in Section 2.2.
1.43 "Regulatory Agency" means the FDA or the applicable department, bureau or other governmental regulatory authority in each country in the Territory involved in the granting of Regulatory Approvals.
1.44 "Regulatory Approval" means any and all approvals (including price reimbursement approvals), licenses, registrations, or authorizations of any Regulatory Agency, necessary for the manufacture, use, storage, import, transport or sale of a Collaboration Product.
1.45 "Research Collaboration" means the research activities undertaken by the Parties pursuant to Article 2.
1.46 "Research Plan" on a Target-by-Target basis, means all information relating to the Parties' respective activities with respect to a Target, including but not limited to the Target Information. Minutes of JRC meetings, if signed by a JRC representative of each Party, shall be deemed included within the Research Plan.
1.47 "Research Term" is defined in Section 15.2.
1.48 "Research Year One" means the period commencing at the end of the Start-Up Phase and ending twelve (12) months thereafter.
1.49 "Research Year Two" means the period commencing at the end of Research Year One and ending twelve (12) months thereafter.
1.50 "Research Year Three" means the period commencing at the end of Research Year Two and ending twelve (12) months thereafter.
1.51 "Research Year Four" means the period commencing at the end of Research Year Three and ending twelve (12) months thereafter.
1.52 "Reverted Lead Compound" has the meaning set forth in Section 5.4.2.
1.53 "Secondary Assay" means on a Target-by-Target basis, one or more assays provided by Organon, such as for example an assay for the characterization of selectivity or in vitro efficacy of a Pharmacopeia Compound against a Target.
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1.54 "Start-Up Phase" means the period commencing on the Effective Date and ending six (6) months thereafter.
1.55 "Sublicensee" as to each Party means a Person other than an Affiliate of a Party to whom has been granted sublicense rights under the license granted each Party hereunder, which rights include at least the right to sell a Collaboration Product. As used in this Agreement, "Sublicensee" shall also include a Third Party to whom a Party has granted a sublicense under this Agreement to distribute such Collaboration Product, provided that such Third Party has the primary responsibility for marketing and promotion, at its expense, of such Collaboration Product within countries in the Territory for which such distribution rights are granted, which marketing and promotional activities are not subsidized directly or indirectly by that Party, such as, without limitation, through a specific allowance or a guaranteed selling margin for such Third Party meant to cover its expenses. Third Parties that are permitted to manufacture or finish Collaboration Products for supply to a Party, its Affiliates or Sublicensees are not "Sublicensees."
1.56 "Sublicense Income" means, as it relates to Pharmacopeia, any consideration paid to Pharmacopeia by each Sublicensee gaining rights pursuant to the provisions of Section 5.6.2, such consideration, including without limitation sublicense initiation fees, milestones and royalties paid by each Sublicensee to Pharmacopeia.
1.57 "Target" has the meaning set forth in Section 2.2.
1.58 "Target Information" means on a Target-by-Target basis, all information relating to the identity of the Target, any modifications that Organon proposes to the standard criteria for a Lead Compound set forth in Table 1, the chemistry and protocol of the Primary Assay, any reference standards and Secondary Assay to be run at Organon or transferred to Pharmacopeia as the case may be, and any other enabling information relevant to the conduct of the activities of the Parties hereunder. "Target Information" shall also include on a Target-by-Target basis, any relevant Organon or third party patent application or patent of which Organon is aware, as well as the status of Organon's efforts in connection with its development of compounds against a target. For the avoidance of doubt, compound structure information shall not be part of Target Information.
1.59 "Territory" means all the countries of the world.
1.60 "Third Party" means any Person other than Organon, its Affiliates or Sublicensees and Pharmacopeia or its Affiliates.
1.61 "Wind-Down Phase" means the period commencing at the end of Research Year Four and ending six (6) months thereafter.
ARTICLE 2
RESEARCH COLLABORATION
2.1 Goals of Research Collaboration.
2.1.1 General. Each Party shall (i) undertake an interactive, cooperative role in the Research Collaboration with the other Party as set forth in the Research Plan, and such other activities which from time to time, the JRC decides are necessary for the continuing success of the Research Collaboration; (ii) use commercially reasonable efforts to diligently perform its activities pursuant the Research Plan, including, without limitation, by using personnel with sufficient skills and experience together with sufficient equipment and facilities, to carry out such Party's obligations under the Research Collaboration and to accomplish the objectives of the Research Collaboration; and (iii) conduct the Research Collaboration in good scientific manner, and in compliance in all material respects with all requirements of applicable laws, rules and regulations, and all other requirements of any good laboratory practices to attempt to achieve its objectives efficiently and expeditiously.
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2.1.2 Activities of Pharmacopeia. In consideration for the funding provided by Organon, Pharmacopeia shall utilize the appropriate screening and optimization resources to screen an average of not less than five (5) Targets per Research Year and to deliver to Organon not less than eight (8) Lead Series, each series against a distinct Target by the end of the Research Term, such delivery to begin on or about the end of Research Year One. (The delivery of both an antagonist series and agonist series against the same Target they shall be considered two separate Lead Series, to the extent requested by Organon and agreed by Pharmacopeia). It is expected that the foregoing can be accomplished through the screening of Pharmacopeia Compounds against no more than thirty (30) Targets to be supplied by Organon as provided herein. In addition to the foregoing, Pharmacopeia shall provide Organon with the necessary feedback on the progress of its screening and optimization efforts to enable Organon to provide Pharmacopeia the support it requires to conduct its activities hereunder.
2.1.3 Activities of Organon. During the Research Term, Organon shall identify and make available to Pharmacopeia at least thirty (30) targets to enable Pharmacopeia to select a subset of such targets that shall become the focus of the activities of Pharmacopeia hereunder. Organon shall begin making such targets available by making available to Pharmacopeia no less than six (6) targets on or about the Effective Date and making available to Pharmacopeia five (5) more targets, prior to the end of the Start-Up Phase. Following the Start-Up Phase, Organon shall continue making available to Pharmacopeia at least eight (8) targets per Research Year, at the rate of no less than two (2) targets per calendar quarter. With each such target, Organon shall also provide to Pharmacopeia all pertinent Target Information and key reagents essential to run the Assay. In addition, with respect to each target, Organon shall make available to Pharmacopeia any Secondary Assay that (i) is required to confirm that a Pharmacopeia Compound potentially meets the criteria for a Lead Compound and (ii) is not already in Pharmacopeia's possession. In addition to the foregoing, Organon shall support the Research Collaboration, by making available to Pharmacopeia any other information, except for the structure information regarding Organon Compounds (as defined in section 2.5) that is essential for Pharmacopeia to continue its activities hereunder, and if requested by Pharmacopeia, Organon shall concurrently apply its resources to conduct all essential testing and confirmation of Pharmacopeia Compounds provided by Pharmacopeia to assist Pharmacopeia in determining whether such Pharmacopeia Compounds potentially meet the criteria for a Lead Compound.
2.2 Selection of Targets. As provided in Section 2.1.3, in the course of the Research Collaboration, Organon shall make available to Pharmacopeia at least thirty (30) targets, from which Pharmacopeia shall select a subset that will become the focus of the Parties' activities in the Research Collaboration. At any one time, Organon shall make available such targets in multiples at any one time for consideration by Pharmacopeia. Each target made available to Pharmacopeia shall be referred to as a "Proposed Target." Pharmacopeia shall inform Organon if it has previously screened against a proposed Target, or is prevented from screening a proposed Target pursuant to Third Party obligations. For each Proposed Target, Organon shall make available to Pharmacopeia the Target Information, and such other information as Pharmacopeia may reasonably request. For each Proposed Target, Pharmacopeia shall review and if need be discuss with Organon the Target Information. For each Proposed Target, Pharmacopeia shall assess whether the criteria for Lead Compound designation set forth in Section 2.4(a) is applicable to such Proposed Target and shall determine whether such criteria need to be modified to enable Pharmacopeia to accomplish the goals of the Research Collaboration with respect to such Proposed Target. If the Target Information for any given Target requires a modification of the criteria in Table 1, the JRC shall discuss such modification and shall redefine such criteria. Following such modification, if any, Pharmacopeia shall notify Organon whether it accepts the Proposed Target, and following such acceptance, the Proposed Target shall be deemed a "Target" for purposes of this Agreement. Any target which is not selected by Pharmacopeia as it is made available by Organon may be selected at a later date by Pharmacopeia subject to approval by Organon, which approval shall not be unreasonably withheld, and subject to the procedure set forth in this Section.
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2.3 Assay Development. It is anticipated that the Assay has been developed and validated by Organon prior to validation by Pharmacopeia. An Assay shall be considered validated if it meets the criteria set in Exhibit A. On a Target-by-Target basis, Pharmacopeia shall provide up to one (1) FTE month without additional charge to Organon for validation of the Assay for a particular Target. Insofar as the Assay requires additional development by Pharmacopeia or the use of any key reagents that have not been supplied by Organon, the Parties shall mutually agree on the payment of additional fees pursuant to Section 6.2. The Parties agree that all improvements and modifications directly relating to the Assay (collectively the "Assay Improvements") made solely by Pharmacopeia shall be owned by Pharmacopeia. All Assay Improvements that are made jointly by the Parties shall be jointly owned by the Parties. Each Party agrees to grant to the other Party license rights in its interest in Assay Improvements as provided herein.
2.4 Lead Compounds.
(a) For each Target, Pharmacopeia will endeavor to identify those Pharmacopeia Compounds that meet the criteria set forth in Table 1. The Parties agree that the criteria set forth in Table 1 are consistent with the criteria that Organon applies in its internal programs. The Lead Compound criteria in Table 1 shall apply uniformly on a Target-by-Target basis. If the characteristics of the Proposed Target warrant it, the criteria in Table 1 may be amended by the JRC to accommodate such characteristics, provided, however, that on balance the set of criteria for any Lead Compound for a Proposed Target shall not be made more stringent than the criteria set forth in Table 1. In addition, the JRC will determine which criteria are considered to be essential and which criteria need to be substantially met. For those criteria that need to be substantially met, the JRC will define the boundaries within which certain material characteristics of a Lead Compound at least should fall. It is understood by both Parties that the boundaries of one of the criteria might depend on the other criteria. The Parties agree that if a Pharmacopeia Compound meets all the criteria set forth in Table 1 (as it may have been amended by the JRC), such Pharmacopeia Compound shall be automatically designated as a "Lead Compound." Without limitation of the foregoing, the JRC may, at any time, review the progress of the Research Collaboration. In such an event, the JRC may determine that, with respect to the any Pharmacopeia Compound, the Research Collaboration with respect to such Pharmacopeia Compound has, notwithstanding the express criteria set forth in Table 1, on balance achieved a stage of development consistent with such criteria, and therefore, such Pharmacopeia Compound shall be designated as a Lead Compound.
Table 1
Criteria *** | ||
*** | *** |
(b) On an on-going basis, throughout the Research Term, Pharmacopeia shall conduct screening of its Libraries and optimization efforts to identify Pharmacopeia Compounds that have the potential to meet the criteria for a Lead Compound (each such Pharmacopeia Compound a "Potential Lead Compound"). On an on-going basis, Organon shall provide to Pharmacopeia technical support, including any and all in vivo testing of a potential Lead Compound, that is reasonably required to enable such Potential Lead Compound to be designated as a Lead Compound. To enable Organon to provide such technical support, Pharmacopeia will provide Organon sufficient quantities of each such Potential Lead Compound. The transfer of such Potential Lead Compound to Organon is solely for the purpose of conducting its activities hereunder and for no other purpose. Following the receipt of a Potential Lead Compound, Organon agrees not to conduct or have conducted any chemical analysis of such Potential Lead Compound and not to use any Potential Lead Compound for any purpose except as set forth herein. Organon shall communicate to Pharmacopeia on an on-going basis, the results of its testing
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or confirmation activities. The Parties agree that if Organon is unable to provide feedback to Pharmacopeia in connection with its confirmation or testing activities relating to a specific Lead Compound criteria within a period of time consistent with the nature of the assay or activities to be conducted by Organon (typically on the order of two (2) months), the Parties shall identify a Third Party to carry out such confirmation or testing activities, at the sole expense of Organon. If no Third Party is able to be identified, such criteria will not apply in the designation of the Lead Compound. On an as needed basis, the Parties may agree on a commercially reasonable set of additional activities to be carried by either or both Parties to enable the designation of one or more such Potential Lead Compounds as a Lead Compound. If a Potential Lead Compound is designated as a Lead Compound, following such designation, Pharmacopeia shall deliver to Organon the structure and enabling synthetic information with respect to such Lead Compound. In addition, Pharmacopeia will provide all data it has developed in the course of developing such Lead Compound which is reasonably required to enable Organon to further optimize such Lead Compound. On a Target-by Target basis, the series of Potential Lead Compounds having activity with respect to a particular Target and that have been designated as a Lead Compound shall form a "Lead Series."
(c) At any time during the Research Term, Pharmacopeia may elect to discontinue its activities with respect to a particular Target, and may elect to proceed with its activities with respect to the remainder of the Targets. If Pharmacopeia elects to discontinue its activities with respect to a particular Target, it will notify Organon of its decision not to continue, the reason for discontinuing and the stage of the project at the moment of discontinuation. In the event that prior to discontinuing its activities, Pharmacopeia has identified one or more Potential Lead Compounds with respect to a particular Target and such Potential Lead Compounds failed to meet the criteria for a "Lead Compound," Organon shall acquire no license or other rights with respect to such Potential Lead Compounds and the exclusivity set forth in Section 4.1 with respect to such Target shall expire. Such Potential Lead Compounds shall be referred to as "Non-Designated Lead Compounds" *** In addition, the provisions of Section 5.6.1 shall apply to such Non-Designated Lead Compounds.
2.5 Organon Compounds. It is understood that Organon may be conducting its own internal screening and optimization activities with respect to one or more targets which have been selected as a Target as provided hereunder. Organon shall keep Pharmacopeia informed on a consistent basis of the foregoing activities. If Organon elects to develop one or more of its own compounds having activity against such Target, then such compounds shall be designated as an "Organon Compound". On a Target-by-Target basis, the Parties agree that the designation of an Organon Compound shall not preempt the designation of a Lead Compound.
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2.6 Development Candidate. During the period that Organon has a license under Section 5.4 to a Lead Compound, Organon may designate any Lead Compound or Derivative Compound as a Development Candidate. Organon shall provide written notice to Pharmacopeia to such effect and such designation shall trigger the milestone payment for initiation of GLP Toxicity Studies set forth in Section 7.1.
2.7 Third Party Licenses. Pharmacopeia may request that Organon acquire rights from Third Parties to technology necessary for the conduct of the activities of the Parties with respect to a particular Target. The JRC shall endeavor to minimize the need for such licenses; provided, however, if the JRC is unable to agree whether a particular license is necessary to conduct the activities of the Parties with respect to a particular Target, Pharmacopeia may decline to screen against such Target. If Pharmacopeia declines to screen against such Target, this shall not be considered a breach of this Agreement by Pharmacopeia or a ground for termination of the Research Collaboration by Organon.
2.8 Records and Reports. Each Party shall maintain records in sufficient detail and in good scientific manner appropriate for patent and FDA purposes and so as to properly reflect all work done and results achieved in the performance of this Agreement (including all data in the form required under any applicable governmental regulations and as directed by the JRC). Such records shall include applicable books, records, reports, research notes, charts, graphs, comments, computations, analyses, recordings, photographs, computer programs and documentation thereof, samples of materials and other graphic or written data generated in connection with the Research Collaboration, including any data required to be maintained pursuant to applicable governmental regulations. During the Research Term, each Party shall respond to reasonable requests from the other for information based on such records.
ARTICLE 3
JOINT RESEARCH COMMITTEE; JOINT PATENT COMMITTEE
3.1 Joint Research Committee. Organon and Pharmacopeia agree to establish a Joint Research Committee ("JRC") to oversee, review, manage and direct the Research Collaboration, and, in coordination with the Patent Committee, provide advice in connection with intellectual property issues relating to the Developed Technology. The responsibilities of the JRC shall include: (i) monitoring and reporting the progress of the Research Collaboration and ensuring open and frequent exchange between the Parties; (ii) establishing criteria for the selection of Lead Compounds for each Target pursuant to section 2.4, (iii) resolving any conflicts between the Parties, (iv) approving and administering the Research Plan, and (v) coordinating with the Patent Committee all patent activities as they relate to the results of the Research Collaboration, and in keeping with the overall patent strategy delineated by the Patent Committee.
3.2 Membership. The JRC shall include three (3) voting representatives of each of the Parties, and each Party's representatives shall be selected by that Party. Each Party may replace its representatives at any time, upon written notice to the other Party. From time to time, the JRC may establish subcommittees, to oversee particular projects or activities, and such subcommittees will be constituted as the JRC determines, in its sole discretion.
3.3 Meetings and Minutes. During the Research Term, unless otherwise agreed to by the Parties, the JRC shall meet at least quarterly, or more frequently as agreed by the Parties, at such locations or by such teleconferencing means as the Parties may determine from time to time. In addition to regularly scheduled meetings, the JRC representatives will communicate regularly by telephone, electronic mail, facsimile and/or videoconference. Other representatives of Pharmacopeia or Organon may attend JRC meetings as nonvoting observers. Each Party shall be responsible for all of its expenses associated with attending the JRC meetings. Pharmacopeia shall prepare written minutes of each JRC meeting and shall prepare a written record of all JRC voting and decisions, whether made at a JRC
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meeting or otherwise. The written minutes of each JRC meeting and the written record of all JRC voting and decisions shall be submitted to Organon for review, and upon signature by Organon, shall become final.
3.4 Decision-Making. Decisions of the JRC shall be made by unanimous vote, and each Party shall have a single vote. In the event that unanimity is not achieved within the JRC, the matter shall be referred to Pharmacopeia's Executive Vice President, Chief Operating Officer (or designee of similar rank) and the Research Director (or designee of similar rank) of Organon, who shall promptly meet and endeavor in good faith to resolve such matter in a timely manner. In the event such individuals are unable to resolve such dispute, the matter shall be referred to the Chief Executive Officer of Pharmacopeia and the Managing Director, Research and Development, of Organon, who shall promptly meet and endeavor to reach consensus in a timely manner. In the event that such individuals are unable to resolve such dispute, the matter shall be referred to the Chairman of Pharmacopeia and the President of Organon, who shall promptly meet and endeavor to reach consensus in a timely manner. If such individuals cannot resolve such dispute, then such dispute shall be subject to the dispute resolution provisions set forth in Section 16.19.
3.5 Patent Committee. Upon recommendation of the JRC, the Parties shall form a patent committee ("Patent Committee") to be in existence as long as Patent Rights within the Developed Technology are being filed and/or prosecuted. Each Party shall designate at least one chemist and one patent attorney or equally qualified legally trained personnel, as its representatives on the Patent Committee. The Patent Committee shall be responsible for recommending patent filings and coordinating patent-related matters, including, but not limited to, the determination of inventorship according to U.S. Patent Law, and the preparation, filing and prosecution of patent applications. Any disputes of the Patent Committee during the Research Term shall be handled pursuant to Section 3.4. Any disputes of the Patent Committee after the end of the Research Term shall be handled pursuant to Section 16.19. Unless otherwise agreed by the Parties, the Patent Committee shall meet at least semiannually. Such meetings shall be held at mutually agreed times and locations. Each Party shall bear its own expenses associated with such meetings and the activities of the Patent Committee; provided, however, that each Party shall bear the expense of providing the other Party with copies of all Patent Rights filed pursuant to this Agreement including all correspondence with U.S. and foreign patent offices.
ARTICLE 4
EXCLUSIVITY
4.1 Target. During the Exclusivity Period for each Target, Pharmacopeia shall not screen any Library Compound on its own behalf or on behalf of any Third Party against such Target. On a Target-by-Target basis, the "Exclusivity Period" shall mean the period beginning when Pharmacopeia initiates screening against the Target which has been designated pursuant to Section 2.2, and ending ***.
4.2 Use of Libraries. Except as provided herein, Organon shall have no exclusivity with respect to any Library or any Pharmacopeia Compound. It is understood that the Libraries are and will be regularly used by Pharmacopeia and may have been or may be provided to Third Parties for screening. Pharmacopeia shall have the right to screen the Libraries during the Research Term or thereafter on its own behalf or on the behalf of Third Parties, subject to the exclusivity provisions in Section 4.1 above.
4.3 Physical Ownership. Pharmacopeia shall retain physical ownership of the tangible property embodied in all Libraries. Organon shall retain physical ownership of all tangible material provided by Organon to Pharmacopeia hereunder. Any tangible material provided by Organon to Pharmacopeia shall only be used for the purposes of the Research Collaboration.
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4.4 Development. For as long as Organon is using due diligence with respect to the further optimisation and/or development of a Lead Compound or Derivative Compound, Pharmacopeia agrees not to pursue any optimisation and/or development of such Lead Compound or Derivative Compound or compounds falling under Patent Rights within the Developed Technology (i) claiming such Lead Compound or Derivative Compound or methods of making or using the same, and (ii) disclosing the utility of such Lead Compound or Derivative Compound against the Target.
ARTICLE 5
LICENSES
5.1 Organon Base Technology; Regulatory Filings. Organon shall own all rights, title and interest in and to Organon Base Technology and in all Regulatory Filings.
5.2. Developed Technology. Subject to the licenses expressly granted hereunder, Organon shall own all rights, title and interest in and to all Organon solely invented Developed Technology and an undivided one-half interest in jointly invented Developed Technology. Pharmacopeia shall own all rights, title and interest in and to all of Pharmacopeia solely invented Developed Technology and an undivided one-half interest in jointly invented Developed Technology.
5.3 Pharmacopeia Base Technology. Pharmacopeia shall own all rights, title and interest in and to Pharmacopeia Base Technology.
5.4. Licenses and Maintenance Payments.
5.4.1 Licenses. Subject to the terms and conditions of this Agreement, upon the designation of a Lead Compound, on a Lead Compound-by-Lead Compound basis, and Target-by-Target basis, Pharmacopeia grants Organon, and Organon accepts, an exclusive, worldwide license under the Pharmacopeia Base Technology and Pharmacopeia's interest in Developed Technology and a non-exclusive, worldwide license under Pharmacopeia's interest in Assay Improvements, to make, have made, and use Lead Compounds in order to make, have made, use, import, offer for sale and sell Collaboration Products based on such Lead Compounds. The foregoing license provides Organon no license under the Pharmacopeia Base Technology and Pharmacopeia's interest in the Developed Technology that relates to targets other than the applicable Target. Unless earlier terminated pursuant to this Agreement, this license grant shall remain in effect for the time period set forth in and subject to the provisions set forth herein, and so long as Organon has made all payments required hereunder.
5.4.2 License Maintenance Payment. Abandonment.
(a) If Organon has not initiated GLP Toxicity Studies with respect to any Lead Compound or corresponding Derivative Compound within *** from the designation of such a Lead Compound, Organon shall, if it so chooses, be entitled to a one-year extension to initiate GLP toxicity studies by making a payment to Pharmacopeia in the amount of *** for such extension;
(b) If Organon has not initiated Phase I clinical trials with respect to any Lead Compound or corresponding Derivative Compound within *** from the initiation of GLP toxicity studies with respect thereto, Organon shall, if it so chooses, be entitled to a one year extension to initiate Phase I clinical trials, by making a payment to Pharmacopeia in the amount of *** for such extension;
(c) If Organon has not initiated Phase III clinical trials with respect to any Lead Compound or corresponding Derivative Compound within *** from the initiation of Phase I clinical trials with respect thereto, Organon shall, if it so chooses, be entitled to a one-year extension to initiate Phase III clinical trials, by making a payment to Pharmacopeia in the
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amount of *** for such extension, or, if Organon deems it necessary to repeat Phase II trials and has demonstrated appropriate diligence, Organon shall be entitled to an extension of *** at no additional cost; and
(d) If Organon has not initiated NDA approval within *** from the initiation of Phase III clinical trials with respect to any Lead Compound or corresponding Derivative Compound, Organon shall, if it so chooses, be entitled to a *** extension to initiate NDA approval by making a payment to Pharmacopeia in the amount of *** for such extension.
If, at the end of any of the extensions provided in Sections 5.4.2.(a), 5.4.2(b), 5.4.2(c) or 5.4.2(d), Organon has not yet met the applicable development milestone, subject to (1) a review of Organon's progress, and (2) demonstration by Organon of appropriate diligence and commitment to future efforts in connection therewith, Pharmacopeia will agree to extend the applicable extension period to enable Organon to complete its activities upon payment of the applicable fees below. If the parties elect not to extend the respective extension period, or Organon has not diligently pursued development of a program, Pharmacopeia shall have the right to terminate all licenses with respect to the particular Lead Compound and the rights to such
Lead Compound, together with any corresponding Derivative Compounds and any Know-how associated therewith (cumulatively, a "Reverted Lead Compound"), shall revert back to Pharmacopeia, subject to the provisions of Section 5.6.2. The payments set forth in each of Sections 5.4.2(a), 5.4.2(b), 5.4.2(c) and 5.4.2(d) shall be non-refundable but fifty percent (50%) thereof shall be creditable against the milestone payment due upon actual accomplishment of such milestone.
(e) If Organon has not initiated GLP Toxicity Studies with respect to any Lead Compound or corresponding Derivative Compound, Organon shall be entitled to a *** year extension to initiate GLP toxicity studies by making a payment to Pharmacopeia in the amount of *** for such extension;
(f) If Organon has not initiated Phase I clinical trials with respect to any Lead Compound or corresponding Derivative Compound, Organon shall be entitled to a *** year extension to initiate Phase I clinical trials by making a payment to Pharmacopeia in the amount of *** for such extension;
(g) If Organon has not initiated Phase III clinical trials with respect to any Lead Compound or corresponding Derivative Compound, Organon shall be entitled to a *** year extension to initiate Phase III clinical trials by making a payment to Pharmacopeia in the amount of *** for such extension; and
(h) If Organon has not initiated NDA approval with respect to any Lead Compound or corresponding Derivative Compound, Organon shall be entitled to a *** year extension to initiate NDA approval by making a payment to Pharmacopeia in the amount of *** for such extension.
The payments set forth in each of Sections 5.4.2.(e), 5.4.2(f), 5.4.2(g) or 5.4.2(h) will not be creditable against any milestone payments.
5.5 Research License. Subject to the terms and conditions of this Agreement, Organon grants Pharmacopeia a nonexclusive, royalty-free license, in the United States, without the right to sublicense, under all its rights in Developed Technology and Organon Base Technology useful for the conduct of Pharmacopeia's activities pursuant to the Research Plan or as otherwise provided herein.
Subject to the terms and conditions of this Agreement, Pharmacopeia grants Organon a nonexclusive, royalty-free license without the right to sublicense, under all its rights in Developed Technology and
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Pharmacopeia Base Technology useful for the conduct of Organon's activities pursuant to the Research Plan or as otherwise provided herein.
5.6 Other Licenses.
5.6.1 License to Non-Designated Lead Compounds and corresponding Products. Subject to the terms and conditions of this Agreement, Organon grants Pharmacopeia a worldwide, non-exclusive, royalty-free license with the right to sublicense under the Organon Base Technology and a worldwide, exclusive, royalty-free license with the right to sublicense under Organon's interest in the Developed Technology to make, have made, and use Non-Designated Lead Compounds in order to make, have made, use, import, offer for sale and sell products based thereon. The provisions of this Section shall survive termination or expiration of this Agreement. The license granted pursuant to this Section under the Organon Base Technology shall not include any rights to any tangible material which are deemed to be the Confidential Information of Organon and which are transferred to Pharmacopeia by Organon pursuant to the terms of this Agreement. In exchange for the licenses granted by Organon in this Section, in the event that Pharmacopeia seeks to out-license to a third party the rights to any Non-Designated Lead Compound, Pharmacopeia shall notify Organon that it seeks to license such rights (although Pharmacopeia shall not be required to identify any such third party). If a third party has offered Pharmacopeia commercial terms for such a license which Pharmacopeia is prepared to accept, Pharmacopeia shall notify Organon in writing of such terms. Organon shall have the right to obtain such license for itself (and thereby preclude such third party from obtaining such license), if Organon agrees, within fifteen (15) days after receiving such written notice from Pharmacopeia, to match the terms. If Organon does not agree within such fifteen-day period, to match the terms, then Organon shall have no further rights under this Section with respect to such Non-Designated Lead Compound, and Pharmacopeia shall have no obligation to provide any further notice of commercial terms of such license to Organon, and may grant such license to any third party on terms comparable or more favorable to Pharmacopeia than the terms disclosed to Organon.
5.6.2 License to Reverted Lead Compounds and Corresponding Products.
(a) Upon the request of Pharmacopeia and subject to the terms and conditions of this Agreement, Organon grants Pharmacopeia a worldwide, exclusive, license with the right to sublicense under the Organon Base Technology, Organon's interest in the Developed Technology and any other enabling technology Controlled by Organon to make, have made, and use Reverted Lead Compounds in order to make, have made, use, import, offer for sale and sell products based thereon. Such a license shall be subject to the payment obligations provided in Section 8.2.2.
(b) If Organon is unable to directly license or sublicense certain enabling technology to Pharmacopeia, Organon will use reasonable efforts to assist Pharmacopeia in obtaining the applicable license from a Third Party. To the extent that there will be an additional financial burden on Pharmacopeia due to the need to obtain from Third Parties such licenses to any enabling technology, the Parties will discuss reducing Pharmacopeia's payment obligations under Section 8.2.2. To the extent that there will be an additional financial burden on Organon due to a (sub)license from Third Parties to any enabling technology, the Parties will discuss increasing Pharmacopeia's payment obligation under Section 8.2.2. Upon Pharmacopeia's written request, not to be unreasonably denied by Organon, Organon shall allow Pharmacopeia access to all data and information (including but not limited to its regulatory filings) reasonably required by Pharmacopeia in connection with its development efforts relating to such Reverted Lead Compound.
5.7 Sublicenses. Subject to the terms and conditions of this Agreement and except as set forth herein, Organon shall have the right to sublicense the rights granted to it in Section 5.4, provided that
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Organon shall provide Pharmacopeia with at least the following information with respect to each Sublicensee: (i) the identity of the Sublicensee; (ii) a description of the Collaboration Product, and the rights granted to the Sublicensee; and (iii) the territory in which the Collaboration Product will be sold. Each such sublicense shall be consistent with all the terms and conditions of this Agreement, and shall be subject to the prior consent of Pharmacopeia, which consent shall not be unreasonably withheld. Organon shall remain primarily liable to Pharmacopeia for all of each such Sublicensee's applicable financial and other obligations under the sublicense. No sublicense granted by Organon may be assigned, transferred or further sublicensed to any Third Party without the prior written consent of Pharmacopeia, which consent shall not unreasonably be withheld.
Subject to the terms and conditions of this Agreement and except as set forth herein, Pharmacopeia shall have the right to sublicense the rights granted to it in Section 5.6, provided that Pharmacopeia shall provide Organon with at least the following information with respect to each Sublicensee: (i) the identity of the Sublicensee; (ii) a description of the Collaboration Product, and the rights granted to the Sublicensee; and (iii) the territory in which the Collaboration Product will be sold. Each such sublicense shall be consistent with all the terms and conditions of this Agreement, and shall be subject to the prior consent of Organon, which consent shall not be unreasonably withheld. Pharmacopeia shall remain primarily liable to Organon for all of each such Sublicensee's applicable financial and other obligations under the sublicense. No sublicense granted by Pharmacopeia may be assigned, transferred or further sublicensed to any Third Party without the prior written consent of Organon, which consent shall not unreasonably be withheld.
5.8 Third Party Rights.
5.8.1 Pharmacopeia Third Party Activities. It is understood that Pharmacopeia is in the business of providing libraries to Third Parties, and that Pharmacopeia will grant such Third Parties rights after the Effective Date to acquire licenses for compounds derived from such libraries similar to Organon's rights under this Article 5. Notwithstanding the licenses granted to Organon hereunder, a Third Party may acquire rights from Pharmacopeia with respect to one or more compounds of which Pharmacopeia is a sole or joint owner, which compounds were identified independently of Pharmacopeia's activities and knowledge gained under the Research Collaboration. Accordingly, Pharmacopeia's grant of rights under Section 5.4 shall be limited, and shall be subject to any grant of rights to a Third Party, to the extent that (i) such Third Party (either alone or jointly with Pharmacopeia) has filed a patent application with respect to such a compound prior to the filing by Organon (either alone or jointly with Pharmacopeia) of a patent application with respect to such a compound, or (ii) Pharmacopeia has previously granted such Third Party a license or other rights with respect to such a compound.
5.8.2 No Liability. It is understood and agreed that, even if Pharmacopeia complies with its obligations under this Agreement, compounds provided to Third Parties in the course of Pharmacopeia's other business activities may result in Third Party patent rights, including patent rights owned by such Third Parties, or owned jointly by Pharmacopeia and such Third Parties, which could conflict with Patent Rights owned by Organon, or jointly owned by Organon and Pharmacopeia hereunder. Pharmacopeia shall use its reasonable efforts to avoid such conflict. Notwithstanding the foregoing, it is understood that, unless Organon is damaged as a proximate result of a material breach by Pharmacopeia of Section 4.1, or of any of the representations and warranties contained herein, then Pharmacopeia shall have no liability under this Agreement with respect to any such conflict.
5.9 Third Party Royalties. Organon shall be responsible for procuring such licenses as it deems, in its sole discretion, appropriate for the manufacture, use, marketing, sale or distribution of Collaboration Products by Organon, its Affiliates or Sublicensees and the payment of any amount due Third Parties under such licenses.
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5.10 Third Party Royalties with respect to Reverted Compounds. Pharmacopeia shall be responsible for procuring such licenses as it deems, in its sole discretion, appropriate for the manufacture, use, marketing, sale or distribution of Collaboration Products by Pharmacopeia, its Affiliates or Sublicensees and the payment of any amount due Third Parties under such licenses.
5.11 Commercialization Status. During the period from the end of the Research Term to the First Commercial Sale of a Collaboration Product, Organon or Pharmacopeia, as the case may be, shall keep the other Party informed of its development activities with respect to such Collaboration Product, including without limitation, the achievement of the milestones set forth in Section 7.1 and the commercialization of such Collaboration Product, by semi-annually providing Pharmacopeia with a written report stating the status of development of each such Collaboration Product.
5.12 No Implied Licenses. Only the licenses granted pursuant to the express terms of this Agreement shall be of any legal force or effect. No other license rights shall be created by implication, estoppel or otherwise.
ARTICLE 6
FUNDING
6.1 Funding. In consideration for Pharmacopeia's activities set forth herein, Organon agrees to pay Pharmacopeia at the rate of *** per Lead Series for a total of ***. Such payments shall be non-refundable and shall be made in *** quarterly installments of ***, on a quarterly basis, following a first installment of *** due within fifteen (15) business days from the Effective Date. In addition, to compensate Pharmacopeia for its efforts to make available resources to be used in the Collaboration in a timely manner, and to fund the start-up costs of the initial three (3) months of the Collaboration, Organon agrees to pay Pharmacopeia a non-refundable one time payment of *** due within fifteen (15) business days from the Effective Date. In the event that, before the end of the Research Term, Pharmacopeia completes its performance hereunder and is able to deliver all eight (8) Lead Series, the remaining payments due pursuant to this Section shall accelerate and shall be due promptly upon completion of performance by Pharmacopeia.
6.2 Assay Development. In the event that that Pharmacopeia shall conduct any additional assay validation as provided in Section 2.3, Organon shall pay to Pharmacopeia an amount equal to the number of FTE's to be utilized for such development multiplied by Pharmacopeia's FTE Rate for the agreed period of such development program. Solely for purposes of this Section 6.2, Pharmacopeia's "FTE Rate" shall be ***. In addition, in the event Organon agrees to the modification of an Assay, Organon shall reimburse Pharmacopeia for the cost of any reagents that Pharmacopeia needs to obtain to conduct its activities pursuant to this Section. Payments under this Section shall be made within thirty (30) days of receipt of an invoice.
6.3 No Withholding. All amounts paid to Pharmacopeia pursuant to Section 6.1 shall be made without withholding for taxes or other charges.
ARTICLE 7
MILESTONE PAYMENTS
7.1 Milestone Payments.
7.1.1 Milestone Payments for a Lead Compound.
(a) Organon shall pay to Pharmacopeia the following nonrefundable amounts within thirty (30) days following the first achievement by Organon, its Affiliates, Sublicensees or other designees, as the case may be, of each of the following milestones with respect to any
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Lead Compound, corresponding Derivative Compound (and each corresponding Collaboration Product) with respect to each Target:
Milestones for a Lead Compound | Amount | |
---|---|---|
*** | $*** | |
*** | $*** | |
*** | $*** | |
*** | $*** |
(b) It is understood and agreed that Organon shall not be required to pay the milestone payments set forth in this Section more than once for each Target, even if such milestone is achieved with respect to more than one Lead Compound with activity against such Target.
7.1.2 Delivery Payments. Organon shall pay to Pharmacopeia the following delivery payments in additions to all the payments accrued hereunder as follows: At the time that Pharmacopeia delivers to Organon the *** Lead Series, Organon shall pay Pharmacopeia a delivery payment of ***, due within thirty (30) days following such delivery. At the time that Pharmacopeia delivers to Organon each of the ***, *** and *** Lead Series, Organon shall pay to Pharmacopeia a delivery payment of ***, due within thirty (30) days following each such delivery.
7.1.3 No Withholding. All amounts paid to Pharmacopeia pursuant to this Section 7.1 shall be made without withholding for taxes or other charges.
7.2 Due Diligence. For each Lead Compound and corresponding Derivative Compound, Organon will use its diligent efforts, consistent with the usual practices followed by Organon in pursuing the commercialization and marketing of its other compounds of similar market potential, at a similar stage of its product life and deemed to have comparable commercial value by the Parties, at its own expense, to develop and commercialize such Lead Compound and corresponding Collaboration Product. Without limiting any of the foregoing, for each Lead Compound, Organon's efforts shall include without limitation the dedication of at least ten (10) FTE's at each stage of the development of such Lead Compound. In the event that Organon decides to out-license the applicable Lead Compound, rather than proceed with the development activities described in this Section, Organon agrees that Pharmacopeia shall have the right of first refusal to develop and commercialize such Lead Compound as a Reverted Lead Compound. For the avoidance of doubt, out-license shall mean providing a license to a Third Party by which Organon shall have no influence on the further development of the applicable Lead Compound.
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- Invoices. Unless otherwise specified in writing, all payments required according to the sections 6 and 7 of this Agreement shall be made by transfer to the bank account nominated by the receiving Party upon timely receipt of an invoice.
If invoice to Organon: | N.V. Organon | |
Purchase Accounting (KA1041) | ||
P.O. Box 20 | ||
5340 BH Oss | ||
The Netherlands | ||
Attn: Dr. T. de Boer (Research Alliance Manager) |