Delaware | 2834 | 90-0475355 | ||
(State or other jurisdiction of
incorporation or organization) |
(Primary Standard Industrial
Classification Code Number) |
(I.R.S. Employer
Identification Number) |
Peter H. Jakes, Esq.
William H. Gump, Esq. Willkie Farr & Gallagher LLP 787 Seventh Avenue New York, New York 10019 (212) 728-8000 |
Cheston J. Larson, Esq.
Divakar Gupta, Esq. Latham & Watkins LLP 12636 High Bluff Drive, Suite 400 San Diego, California 92130 (858) 523-5400 |
Large accelerated filer o | Accelerated filer o | Non-accelerated filer þ | Smaller reporting company o |
Proposed Maximum
|
Amount of
|
|||||
Title of Each Class of
|
Aggregate Offering
|
Registration
|
||||
Securities to be Registered | Price(1)(2) | Fee(3) | ||||
Common Stock, par value $0.001 per share
|
$160,425,000 | $18,626 | ||||
(1) | Estimated solely for purposes of determining the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended. |
(2) | Includes shares of common stock which may be purchased by the underwriters to cover over-allotments, if any. |
(3) | Of this amount, the registrant previously paid $17,357 in connection with the initial filing of this Registration Statement. |
The
information in this prospectus is not complete and may be
changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell these
securities and we are not soliciting offers to buy these
securities in any state or other jurisdiction where the offer or
sale is not permitted.
|
Per Share
|
Total | |||||||
Initial public offering price
|
$ | $ | ||||||
Underwriting discounts and commissions
|
$ | $ | ||||||
Proceeds to Clovis, before expenses
|
$ | $ |
J.P. Morgan | Credit Suisse |
Leerink Swann |
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F-1
EX-1.1
EX-3.1
EX-5.1
EX-10.2
EX-10.3
EX-10.5
EX-10.7
EX-10.27
EX-10.28
EX-10.29
EX-10.30
EX-10.31
EX-23.1
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Focus on oncology.
The oncology market
is characterized by a number of disorders with high rates of
recurrence and a limited response from current therapies or
treatments.
Focus on compounds where improved outcomes are associated
with specific biomarkers.
Our strategy to
date has been to prioritize opportunities in which a strong
biological hypothesis has been established linking a specific
characteristic or biological state of a cell, or biomarker, with
improved outcomes for the product candidate.
Combine companion diagnostics with drug development
efforts to realize superior clinical
outcomes.
A companion diagnostic is a test or
measurement intended to assist physicians in making treatment
decisions for their patients. Companion diagnostics do so by
evaluating the presence of biomarkers, and physicians use this
information to select a specific drug or treatment to which
their patient will most likely respond. Our development strategy
is based on the premise that we can utilize effective companion
diagnostics to identify different patient subsets who we believe
will uniquely benefit from our product candidates.
Manage and control global development activities and
regulatory operations.
We believe our
development and regulatory experience enables us to devise time-
and cost-efficient strategies to develop and obtain regulatory
approvals for new drugs, and to identify the regulatory pathway
that allows us to get a product candidate to market as quickly
as possible.
Seek and maintain global commercial
rights.
We believe that it is very important
to maintain global rights to our product candidates, and that we
can build our own commercial organizations in major
pharmaceutical markets as well as a network of third-party
distributors in smaller markets.
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3
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We have incurred significant losses since our inception and
anticipate that we will continue to incur losses for the
foreseeable future. We are a clinical-stage company with no
approved products, and no historical revenues, which makes it
difficult to assess our future viability.
If we fail to obtain additional financing, we may be unable to
complete the development and commercialization of our product
candidates, or continue our development programs. In addition,
the report of our independent registered public accounting firm
on our financial statements appearing at the end of this
prospectus contains an explanatory paragraph stating that our
recurring losses raise substantial doubt about our ability to
continue as a going concern.
We are heavily dependent on the success of our three product
candidates, two of which are in clinical development, and one of
which is in preclinical development, and we cannot give any
assurance that any of our product candidates will receive
regulatory approval, which is necessary before they can be
commercialized.
Clinical drug development involves a lengthy and expensive
process with an uncertain outcome, and results of earlier
studies and trials may not be predictive of future trial results.
The regulatory approval processes of the FDA and similar foreign
authorities is lengthy, time consuming and inherently
unpredictable, and if we are ultimately unable to obtain
regulatory approval for our product candidates, our business
will be substantially harmed.
Failure to successfully validate, develop and obtain regulatory
approval for companion diagnostics could harm our drug
development strategy.
Our commercial success depends upon attaining significant market
acceptance of our product candidates, if approved, among
physicians, patients, healthcare payors and major operators of
cancer clinics.
We face significant competition from other biotechnology and
pharmaceutical companies and our operating results will suffer
if we fail to compete effectively.
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If our efforts to protect the proprietary nature of the
intellectual property related to our technologies are not
adequate, we may not be able to compete effectively in our
market.
Other factors identified elsewhere in this prospectus, including
those set forth under Risk Factors.
5
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9,300,000 shares
20,765,590 shares
Up to 1,395,000 shares
We estimate that the net proceeds from this offering will be
approximately $121.2 million, or approximately
$139.4 million if the underwriters exercise their
over-allotment option in full, assuming an initial public
offering price of $14.00 per share, the midpoint of the price
range set forth on the cover page of this prospectus, after
deducting estimated underwriting discounts and commissions and
estimated offering expenses payable by us. We expect to use the
proceeds of this offering to fund our clinical trials related to
CO-101 and CO-338, to advance the development of CO-1686, our
preclinical product candidate, and for working capital and
general corporate purposes. See Use of Proceeds for
a more complete description of the intended use of proceeds from
this offering.
You should read Risk Factors for a discussion of
factors you should carefully consider before deciding to invest
in our common stock.
CLVS
883,953 shares of our common stock issuable upon the
exercise of stock options outstanding as of September 30,
2011 at a weighted-average exercise price of $4.35 per
share;
1,250,000 shares of our common stock reserved for future
issuance under our 2011 Equity Incentive Plan, or the 2011 Plan,
which will become effective immediately prior to the completion
of this offering, plus the number of shares of our common
stock available for grant under our 2009 Equity Incentive Plan,
or the 2009 Plan, as of the closing of this offering (which as
of September 30, 2011 was 170,274), which shares will be
added to the shares to be reserved under our 2011 Plan upon the
effectiveness of the 2011 Plan, plus any annual increases in the
number of shares of common stock reserved for future issuance
under the 2011 Plan pursuant to an evergreen
provision and any other shares that may become issuable
under the 2011 Plan pursuant to its terms, as more fully
described in Executive and Director
CompensationEmployee Benefit Plans2011 Equity
Incentive Plan; and
189,656 shares of our common stock reserved for future
issuance under our 2011 Employee Stock Purchase Plan, or the
ESPP, which will become effective immediately prior to the
completion of this offering, plus any annual increases in the
number of shares of our common stock reserved for future
issuance under the ESPP pursuant to an evergreen
provision and any other shares that may become issuable
under the ESPP
6
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pursuant to its terms, as more fully described in
Executive and Director CompensationEmployee Benefit
Plans2011 Employee Stock Purchase Plan.
no exercise by the underwriters of their over-allotment option
to purchase up to 1,395,000 additional shares of common stock
from us;
the consent of the requisite holders of our preferred stock for
the conversion of their shares of preferred stock into common
stock;
the implementation of a 1 for 2.9 reverse stock split, effective
as of September 22, 2011; and
the filing of our amended and restated certificate of
incorporation and the adoption of our amended and restated
bylaws immediately prior to the completion of this offering.
7
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Period from
Cumulative from
April 20, 2009
April 20, 2009
Year Ended
(inception) to
Nine Months Ended
(inception) to
December 31,
December 31,
September 30,
September 30,
2010
2009
2011
2010
2011
(Unaudited)
(Unaudited)
(Unaudited)
(In thousands, except per share amounts)
$
$
$
$
$
22,323
1,762
28,286
13,672
52,371
4,302
2,209
4,824
3,065
11,335
12,000
13,085
7,000
2,000
32,085
(38,625
)
(17,056
)
(40,110
)
(18,737
)
(95,791
)
795
(43
)
(552
)
340
200
$
(37,830
)
$
(17,099
)
$
(40,662
)
$
(18,397
)
$
(95,591
)
$
(28.55
)
$
(15.38
)
$
(26.80
)
$
(13.91
)
$
(72.25
)
1,325
1,112
1,517
1,323
1,323
$
(4.41
)
$
(4.09
)
$
(12.58
)
8,570
9,939
7,598
As of September 30, 2011
Pro Forma
Actual
Pro
Forma
(2)
As
Adjusted
(3)(4)
(Unaudited)
(Unaudited)
(Unaudited)
(In thousands)
$22,028
$
22,028
$
143,258
16,385
16,385
137,615
26,388
26,388
147,618
35,602
75,499
$(93,552
)
$
17,549
$
138,779
8
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(1)
See Note 11 within the notes to our consolidated financial
statements which are included elsewhere in this prospectus for a
description of the method used to compute basic and diluted loss
per common share.
(2)
Pro forma to reflect (i) the conversion of all outstanding
shares of our convertible preferred stock into
7,244,523 shares of common stock immediately prior to the
closing of this offering; and (ii) the conversion of
$35.0 million in aggregate principal amount of our 5%
convertible promissory notes due 2012 (including accrued and
unpaid interest thereon) into 2,559,774 shares of our
common stock immediately prior to the closing of this offering,
assuming an initial public offering price of $14.00 per share,
the midpoint of the price range set forth on the cover page of
this prospectus, and assuming the conversion occurs on
November 18, 2011.
(3)
Pro forma as adjusted to further reflect the sale of
9,300,000 shares of our common stock offered in this
offering, assuming an initial public offering price of $14.00
per share, the midpoint of the price range set forth on the
cover page of this prospectus, after deducting estimated
underwriting discounts and commissions and estimated offering
expenses payable by us.
(4)
A $1.00 increase or decrease in the assumed initial public
offering price of $14.00 per share, the midpoint of the price
range set forth on the cover page of this prospectus, would
increase or decrease the pro forma as adjusted amount of each of
cash, cash equivalents and available for sale securities and
each of working capital, total assets and total
stockholders equity (deficit) by approximately
$8.8 million, assuming that the number of shares offered by
us, as set forth on the cover page of this prospectus, remains
the same, and after deducting estimated underwriting discounts
and commissions and estimated offering expenses payable by us.
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10
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obtaining regulatory approval to commence a trial;
reaching agreement on acceptable terms with prospective contract
research organizations, or CROs, and clinical trial sites, the
terms of which can be subject to extensive negotiation and may
vary significantly among different CROs and trial sites;
obtaining institutional review board, or IRB, approval at each
site;
recruiting suitable patients to participate in a trial;
developing and validating companion diagnostics on a timely
basis;
having patients complete a trial or return for post-treatment
follow-up;
clinical sites deviating from trial protocol or dropping out of
a trial;
adding new clinical trial sites; or
manufacturing sufficient quantities of product candidate for use
in clinical trials.
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the FDA or comparable foreign regulatory authorities may
disagree with the design or implementation of our clinical
trials;
we may be unable to demonstrate to the satisfaction of the FDA
or comparable foreign regulatory authorities that a product
candidate is safe and effective for its proposed indication;
the results of clinical trials may not meet the level of
statistical significance required by the FDA or comparable
foreign regulatory authorities for approval;
we may be unable to demonstrate that a product candidates
clinical and other benefits outweigh its safety risks;
the FDA or comparable foreign regulatory authorities may
disagree with our interpretation of data from preclinical
studies or clinical trials;
the data collected from clinical trials of our product
candidates may not be sufficient to support the submission of an
NDA or other submission or to obtain regulatory approval in the
United States or elsewhere;
the FDA or comparable foreign regulatory authorities may fail to
approve the manufacturing processes or facilities of third-party
manufacturers with which we contract for clinical and commercial
supplies;
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the FDA or comparable foreign regulatory authorities may fail to
approve the companion diagnostics we contemplate developing with
partners; and
the approval policies or regulations of the FDA or comparable
foreign regulatory authorities may significantly change in a
manner rendering our clinical data insufficient for approval.
regulatory authorities may withdraw approvals of such product;
regulatory authorities may require additional warnings on the
label;
we may be required to create a medication guide outlining the
risks of such side effects for distribution to patients;
we could be sued and held liable for harm caused to
patients; and
our reputation may suffer.
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restrictions on the marketing or manufacturing of the product,
withdrawal of the product from the market, or voluntary or
mandatory product recalls;
fines, warning letters or holds on clinical trials;
refusal by the FDA to approve pending applications or
supplements to approved applications filed by us, or suspension
or revocation of product license approvals;
product seizure or detention, or refusal to permit the import or
export of products; and
injunctions or the imposition of civil or criminal penalties.
the efficacy and safety as demonstrated in clinical trials;
the timing of market introduction of such product candidate as
well as competitive products;
the clinical indications for which the drug is approved;
the approval, availability, market acceptance and reimbursement
for the companion diagnostic;
acceptance by physicians, major operators of cancer clinics and
patients of the drug as a safe and effective treatment;
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the potential and perceived advantages of such product candidate
over alternative treatments, especially with respect to patient
subsets that we are targeting with such product candidate;
the safety of such product candidate seen in a broader patient
group, including its use outside the approved indications;
the cost of treatment in relation to alternative treatments;
the availability of adequate reimbursement and pricing by
third-party payors and government authorities;
relative convenience and ease of administration;
the prevalence and severity of adverse side effects; and
the effectiveness of our sales and marketing efforts.
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a covered benefit under its health plan;
safe, effective and medically necessary;
appropriate for the specific patient;
cost-effective; and
neither experimental nor investigational.
an annual, nondeductible fee on any entity that manufactures or
imports certain branded prescription drugs and biologic agents,
beginning in 2011;
an increase in the minimum rebates a manufacturer must pay under
the Medicaid Drug Rebate Program;
a new Medicare Part D coverage gap discount program, under
which manufacturers must agree to offer 50 percent
point-of-sale
discounts off negotiated prices of applicable brand drugs to
eligible beneficiaries during their coverage gap period, as a
condition for the manufacturers outpatient drugs to be
covered under Medicare Part D, beginning in 2011;
extension of manufacturers Medicaid rebate liability to
covered drugs dispensed to individuals who are enrolled in
Medicaid managed care organizations, effective March 23,
2010;
expansion of the entities eligible for discounts under the
Public Health Service pharmaceutical pricing program, effective
January 2010;
a licensure framework for follow-on biologic products; and
a new Patient-Centered Outcomes Research Institute to oversee,
identify priorities in, and conduct comparative clinical
effectiveness research.
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the demand for any drug products for which we may obtain
regulatory approval;
our ability to set a price that we believe is fair for our
products;
our ability to generate revenues and achieve or maintain
profitability;
the level of taxes that we are required to pay; and
the availability of capital.
21
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managing our clinical trials effectively;
identifying, recruiting, maintaining, motivating and integrating
additional employees;
managing our internal development efforts effectively while
complying with our contractual obligations to licensors,
licensees, contractors and other third parties;
improving our managerial, development, operational and finance
systems; and
expanding our facilities.
22
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the federal Anti-Kickback Statute, which prohibits, among other
things, persons from knowingly and willfully soliciting,
receiving, offering or paying remuneration, directly or
indirectly, to induce, or in return for, the purchase or
recommendation of an item or service reimbursable under a
federal healthcare program, such as the Medicare and Medicaid
programs;
federal civil and criminal false claims laws and civil monetary
penalty laws, which prohibit, among other things, individuals or
entities from knowingly presenting, or causing to be presented,
claims for payment from Medicare, Medicaid, or other third-party
payers that are false or fraudulent;
the federal Health Insurance Portability and Accountability Act
of 1996, or HIPAA, which created new federal criminal statutes
that prohibit executing a scheme to defraud any healthcare
benefit program and making false statements relating to
healthcare matters;
HIPAA, as amended by the Health Information Technology and
Clinical Health Act, or HITECH, and its implementing
regulations, which imposes certain requirements relating to the
privacy, security and transmission of individually identifiable
health information; and
state law equivalents of each of the above federal laws, such as
anti-kickback and false claims laws which may apply to items or
services reimbursed by any third-party payer, including
commercial insurers, and state laws governing the privacy and
security of health information in certain circumstances, many of
which differ from each other in significant ways and may not
have the same effect, thus complicating compliance efforts.
decreased demand for our product candidates or products that we
may develop;
injury to our reputation;
withdrawal of clinical trial participants;
initiation of investigations by regulators;
costs to defend the related litigation;
a diversion of managements time and our resources;
substantial monetary awards to trial participants or patients;
product recalls, withdrawals or labeling, marketing or
promotional restrictions;
loss of revenues from product sales; and
the inability to commercialize our product candidates.
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Others may be able to make compounds that are similar to our
product candidates but that are not covered by the claims of the
patents that we own or have exclusively licensed.
We or our licensors or strategic partners might not have been
the first to make the inventions covered by the issued patent or
pending patent application that we own or have exclusively
licensed.
We or our licensors or strategic partners might not have been
the first to file patent applications covering certain of our
inventions.
Others may independently develop similar or alternative
technologies or duplicate any of our technologies without
infringing our intellectual property rights.
It is possible that our pending patent applications will not
lead to issued patents.
Issued patents that we own or have exclusively licensed may not
provide us with any competitive advantages, or may be held
invalid or unenforceable, as a result of legal challenges by our
competitors.
27
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Our competitors might conduct research and development
activities in countries where we do not have patent rights and
then use the information learned from such activities to develop
competitive products for sale in our major commercial markets.
We may not develop additional proprietary technologies that are
patentable.
The patents of others may have an adverse effect on our business.
our failure to commercialize our product candidates, if approved;
actual or anticipated adverse results or delays in our clinical
trials;
unanticipated serious safety concerns related to the use of any
of our product candidates;
adverse regulatory decisions;
changes in laws or regulations applicable to our product
candidates, including but not limited to clinical trial
requirements for approvals;
disputes or other developments relating to proprietary rights,
including patents, litigation matters and our ability to obtain
patent protection for our product candidates;
our decision to initiate a clinical trial, not to initiate a
clinical trial or to terminate an existing clinical trial;
our dependence on third parties, including CROs as well as our
partners that provide us with companion diagnostic products;
additions or departures of key scientific or management
personnel;
failure to meet or exceed any financial guidance or expectations
regarding development milestones that we may provide to the
public;
actual or anticipated variations in quarterly operating results;
failure to meet or exceed the estimates and projections of the
investment community;
28
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overall performance of the equity markets and other factors that
may be unrelated to our operating performance or the operating
performance of our competitors, including changes in market
valuations of similar companies;
conditions or trends in the biotechnology and biopharmaceutical
industries;
introduction of new products offered by us or our competitors;
announcements of significant acquisitions, strategic
partnerships, joint ventures or capital commitments by us or our
competitors;
our ability to maintain an adequate rate of growth and manage
such growth;
issuances of debt or equity securities;
significant lawsuits, including patent or stockholder litigation;
sales of our common stock by us or our stockholders in the
future;
trading volume of our common stock;
publication of research reports about us or our industry or
positive or negative recommendations or withdrawal of research
coverage by securities analysts;
ineffectiveness of our internal controls;
general political and economic conditions;
effects of natural or man-made catastrophic events; and
other events or factors, many of which are beyond our control.
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authorizing the issuance of blank check preferred
stock, the terms of which may be established and shares of which
may be issued without stockholder approval;
limiting the removal of directors by the stockholders;
creating a staggered board of directors;
prohibiting stockholder action by written consent, thereby
requiring all stockholder actions to be taken at a meeting of
our stockholders;
eliminating the ability of stockholders to call a special
meeting of stockholders;
permitting our board of directors to accelerate the vesting of
outstanding option grants upon certain transactions that result
in a change of control; and
establishing advance notice requirements for nominations for
election to the board of directors or for proposing matters that
can be acted upon at stockholder meetings.
We will indemnify our directors and officers for serving us in
those capacities or for serving other business enterprises at
our request, to the fullest extent permitted by Delaware law.
Delaware law provides that a corporation may indemnify such
person if such person acted in good faith and in a manner such
person reasonably believed to be in or not opposed to the best
interests of the registrant and, with respect to any criminal
proceeding, had no reasonable cause to believe such
persons conduct was unlawful.
33
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We may, in our discretion, indemnify employees and agents in
those circumstances where indemnification is permitted by
applicable law.
We are required to advance expenses, as incurred, to our
directors and officers in connection with defending a
proceeding, except that such directors or officers shall
undertake to repay such advances if it is ultimately determined
that such person is not entitled to indemnification.
We will not be obligated pursuant to our bylaws to indemnify a
person with respect to proceedings initiated by that person
against us or our other indemnitees, except with respect to
proceedings authorized by our board of directors or brought to
enforce a right to indemnification.
The rights conferred in our bylaws are not exclusive, and we are
authorized to enter into indemnification agreements with our
directors, officers, employees and agents and to obtain
insurance to indemnify such persons.
We may not retroactively amend our bylaw provisions to reduce
our indemnification obligations to directors, officers,
employees and agents.
34
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the success and timing of our preclinical studies and clinical
trials;
our ability to obtain and maintain regulatory approval of our
product candidates, and the labeling under any approval we may
obtain;
our plans to develop and commercialize our product candidates;
our ability, with partners, to validate, develop and obtain
regulatory approval of companion diagnostics for our product
candidates;
the loss of key scientific or management personnel;
the size and growth of the potential markets for our product
candidates and our ability to serve those markets;
regulatory developments in the United States and foreign
countries;
the rate and degree of market acceptance of any of our product
candidates;
our use of the proceeds from this offering;
the accuracy of our estimates regarding expenses, future
revenues, capital requirements and needs for additional
financing;
our ability to obtain and maintain intellectual property
protection for our product candidates;
the successful development of our sales and marketing
capabilities;
the success of competing drugs that are or become
available; and
the performance of third-party manufacturers.
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| approximately $50.0 million to fund our clinical trials and other development activities related to CO-101; |
| approximately $25.0 million to fund our clinical trials and other development activities related to CO-1686; |
| approximately $30.0 million to fund our clinical trials and other development activities related to CO-338; and |
| the remainder for working capital and general corporate purposes. |
| completion of our LEAP trial of CO-101; | |
| completion of our Phase II trial of CO-101 as a second-line treatment for pancreatic cancer patients with an absence of hENT1 expression; | |
| completion of the dose ranging portion of our Phase I/II trials of CO-338 as monotherapy and in combination with chemotherapy in solid tumors; and | |
| filing of an IND and initiation of our Phase I/II trial of CO-1686 in NSCLC. |
37
an actual basis;
a pro forma basis giving effect to:
(1)
the conversion of all outstanding shares of our convertible
preferred stock into 7,244,523 shares of common stock
immediately prior to the closing of this offering; and
(2)
the conversion of $35.0 million in aggregate principal
amount of our 5% convertible promissory notes due 2012
(including accrued and unpaid interest thereon) into
2,559,774 shares of our common stock immediately prior to
the closing of this offering, assuming an initial public
offering price of $14.00 per share, the midpoint of the price
range set forth on the cover page of this prospectus, and
assuming the conversion occurs on November 18,
2011; and
a pro forma as adjusted basis giving additional effect to the
sale of 9,300,000 shares of our common stock offered in
this offering, assuming an initial public offering price of
$14.00 per share, the midpoint of the price range set forth on
the cover page of this prospectus, after deducting estimated
underwriting discounts and commissions and estimated offering
expenses payable by us.
As of September 30, 2011
Pro Forma
Actual
Pro Forma
as
Adjusted
(1)
(unaudited)
(dollars in thousands)
$19,992
$
19,992
$
141,222
35,602
75,499
2
11
21
1,989
113,316
234,536
48
48
48
(95,591
)
(95,826
)
(95,826
)
(93,552
)
17,549
$
138,779
$17,549
$
17,549
$
138,779
38
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(1)
A $1.00 increase (decrease) in the assumed initial public
offering price of $14.00 per share, the midpoint of the price
range set forth on the cover page of this prospectus, would
increase (decrease) the pro forma as adjusted amount of each of
cash and cash equivalents, additional paid-in capital, total
stockholders equity (deficit) and total capitalization by
approximately $8.8 million, assuming that the number of
shares offered by us, as set forth on the cover page of this
prospectus, remains the same and after deducting estimated
underwriting discounts and commissions and estimated offering
expenses payable by us.
883,953 shares of our common stock issuable upon the
exercise of stock options outstanding as of September 30,
2011 at a weighted-average exercise price of $4.35 per share;
1,250,000 shares of our common stock reserved for future
issuance under our 2011 Plan, which will become effective
immediately prior to the completion of this offering, plus the
number of shares of our common stock available for grant under
our 2009 Plan as of the closing of this offering (which as of
September 30, 2011 was 170,274), which shares will be added
to the shares to be reserved under our 2011 Plan upon the
effectiveness of the 2011 Plan, plus any annual increases in the
number of shares of common stock reserved for future issuance
under the 2011 Plan pursuant to an evergreen
provision and any other shares that may become issuable
under the 2011 Plan pursuant to its terms, as more fully
described in Executive and Director
CompensationEmployee Benefit Plans2011 Equity
Incentive Plan; and
189,656 shares of our common stock reserved for future
issuance under our ESPP, which will become effective immediately
prior to the completion of this offering, plus any annual
increases in the number of shares of our common stock reserved
for future issuance under the ESPP pursuant to an
evergreen provision and any other shares that may
become issuable under the ESPP pursuant to its terms, as more
fully described in Executive and Director
CompensationEmployee Benefit Plans2011 Employee
Stock Purchase Plan.
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$
14.00
$
(56.31
)
57.84
1.53
$
5.15
$
6.68
$
7.32
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Shares Purchased
Total Consideration
Average Price
Number
Percent
Amount
Percent
per Share
(dollars in thousands, except per share amounts)
11,465,590
55
%
$
112,452
46
%
$
9.81
9,300,000
45
%
130,200
54
%
14.00
20,765,590
100
%
$
242,652
100
%
$
11.69
883,953 shares of our common stock issuable upon the
exercise of stock options outstanding as of September 30,
2011 at a weighted-average exercise price of $4.35 per share;
1,250,000 shares of our common stock reserved for future
issuance under our 2011 Plan, which will become effective
immediately prior to the completion of this offering, plus the
number of shares of our common stock available for grant under
our 2009 Plan as of the closing of this offering (which as of
September 30, 2011 was 170,274), which shares will be added
to the shares to be reserved under our 2011 Plan upon the
effectiveness of the 2011 Plan, plus any annual increases in the
number of shares of common stock reserved for future issuance
under the 2011 Plan pursuant to an evergreen
provision and any other shares that may become issuable
under the 2011 Plan pursuant to its terms, as more fully
described in Executive and Director
CompensationEmployee Benefit Plans2011 Equity
Incentive Plan; and
189,656 shares of our common stock reserved for future
issuance under our ESPP, which will become effective immediately
prior to the completion of this offering, plus any annual
increases in the number of shares of our common stock reserved
for future issuance under the ESPP pursuant to an
evergreen provision and any other shares that may
become issuable under the ESPP pursuant to its terms, as more
fully described in Executive and Director
CompensationEmployee Benefit Plans2011 Employee
Stock Purchase Plan.
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Period from
Cumulative from
April 20, 2009
April 20, 2009
Year Ended
(Inception) to
Nine Months Ended
(Inception) to
December 31,
December 31,
September 30,
September 30,
2010
2009
2011
2010
2011
(unaudited)
(unaudited)
(unaudited)
(in thousands, except per share amounts)
$
$
$
$
$
22,323
1,762
28,286
13,672
52,371
4,302
2,209
4,824
3,065
11,335
12,000
13,085
7,000
2,000
32,085
(38,625
)
(17,056
)
(40,110
)
(18,737
)
(95,791
)
795
(43
)
(552
)
340
200
$
(37,830
)
$
(17,099
)
$
(40,662
)
$
(18,397
)
$
(95,591
)
$
(28.55
)
$
(15.38
)
$
(26.80
)
$
(13.91
)
$
(72.25
)
1,325
1,112
1,517
1,323
1,323
$
(4.41
)
$
(4.09
)
$
(12.58
)
8,570
9,939
7,598
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As of December 31,
As of September 30,
2010
2009
2011
(unaudited)
(in thousands)
$22,299
$57,311
$22,028
19,886
57,349
16,385
26,200
59,574
26,388
35,602
75,499
75,499
75,499
(54,749
)
(17,058
)
(93,552
)
43
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
44
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In May 2011, we issued $20.0 million aggregate principal
amount of 5% convertible promissory notes due 2012 to raise
additional working capital to advance the development programs
of our product candidates and for general corporate purposes.
The notes accrue interest at an annual rate of 5% and mature on
May 25, 2012. Upon the completion of this offering, the
principal balance and all accrued and unpaid interest due on the
notes will be converted into shares of our common stock at a per
share price equal to the initial public offering price shown on
the cover page of this prospectus.
In June 2011, we entered into a license agreement with Pfizer as
further described under the heading Product License
Agreements. Pursuant to the terms of the license
agreement, we made an up-front payment by issuing Pfizer
$7.0 million principal amount of a 5% convertible
promissory note due 2012. Pfizer concurrently purchased for cash
an additional $8.0 million principal amount of another 5%
convertible promissory note due 2012, bringing the total
principal amount of the notes issued to Pfizer to
$15.0 million. These convertible promissory notes have
substantially the same terms as the $20.0 million aggregate
principal amount of convertible promissory notes described in
the preceding paragraph, including identical interest
provisions, maturity date, and conversion features.
45
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license fees related to the acquisition of in-licensed products,
which are reported on our statements of operations as acquired
in-process research and development;
employee-related expenses, including salaries, benefits, travel
and stock-based compensation expense;
expenses incurred under agreements with CROs and investigative
sites that conduct our clinical trials and preclinical studies;
the cost of acquiring, developing and manufacturing clinical
trial materials;
costs associated with preclinical activities and regulatory
operations; and
activities associated with the development of companion
diagnostics for our product candidates.
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Period from
April 20, 2009
Cumulative from
Year Ended
(Inception) to
Nine Months Ended
April 20, 2009
December 31,
December 31,
September 30,
(Inception) to
2010
2009
2011
2010
September 30, 2011
(unaudited, in thousands)
(in thousands)
$
10,000
$
13,085
$
$
$
23,085
14,461
371
15,417
8,707
30,249
24,461
13,456
15,417
8,707
53,334
2,000
2,000
2,000
2,432
4,532
1,154
6,964
4,432
4,532
3,154
8,964
7,000
7,000
1,359
1,359
8,359
8,359
5,430
1,391
6,978
3,811
13,799
$
34,323
$
14,847
$
35,286
$
15,672
$
84,456
increased personnel expenses to support the growth in research
and development activities; and
increased expenses related to becoming a publicly traded
company, including increased legal and accounting services,
addition of new headcount to support compliance and
communication needs, and increased insurance premiums.
47
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fees paid to CROs in connection with clinical studies;
fees paid to investigative sites in connection with clinical
studies;
fees paid to vendors in connection with preclinical development
activities;
fees paid to vendors associated with the development of
companion diagnostics; and
fees paid to vendors related to product manufacturing,
development and distribution of clinical supplies.
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Period from April 20
Nine Months
Year Ended
(Inception) Through
Ended
December 31,
December 31,
September 30,
2010
2009
2011
2010
(unaudited)
(unaudited)
80
%
80
%
74
%
84
%
2.10
%
2.33
%
2.21
%
2.25
%
5.6
5.3
6.0
5.4
49
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Underlying equity value To estimate the value of our
total equity (including both common and preferred equity), we
utilized the marketable equity value based on the most recent
rounds our preferred stock issuances, which we believed to be
the most indicative of our value.
Volatility We estimated volatility based on
comparison to volatility of publicly-traded comparable companies.
Time to liquidity We estimated time to a liquidity
event based on the forecasted time to significant clinical
development events for our product candidates which we believed
could lead to an initial public offering, or IPO, or other type
of liquidation event for our stockholders.
Risk-free interest rate We determined the risk-free
interest rate based on the yield of a U.S. Treasury bill
with a maturity date closest to the estimated time to a
liquidation event for our stockholders.
Discounts for lack of marketability Because we are a
privately-held company, shares of our common stock are highly
illiquid and, as such, warrant a discount in value from their
estimated marketable price. We estimate the discount
factor for illiquidity using legal guidelines from U.S. Tax
Court cases regarding privately-held business valuations,
fundamental business factors, and empirical studies on the
discount for lack of marketability. We corroborated the discount
factor based on the value of a put option compared to the value
of common stock using a Black-Scholes option pricing model.
December 31,
2009
2010
1 Yr. Liquidity
2 Yr. Liquidity
$89.7
$99.0
$104.4
80%
70%
70%
3 yrs.
1 yr.
2 yrs.
1.69%
0.29%
0.61%
55%
40%
50%
$3.08
$3.10
$3.45
$3.28
50
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completing this IPO, or the IPO scenario;
remaining as a private company and selling the company at a
future date, or the merger and acquisition, or M&A,
scenario; and
remaining as a private company and executing an IPO at a future
date, or the Future IPO scenario.
Liquidity Scenario
Initial Public
Offering
Future IPO
M&A
80%
10%
10%
10/1/2011
6/30/2014
6/30/2014
$124.6
$120.0
$120.0
28%
N/A
N/A
N/A
100%
100%
N/A
0.81%
0.81%
N/A
50%
50%
$12.47
$5.57
$4.93
$
11.02
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Number of
Shares
Common Stock
Underlying
Exercise
Fair Value per
Options
Price per
Share on Grant
Granted
Share
Date
260,348
$
0.29
$
0.29
34,482
$
0.29
$
0.29
12,069
$
0.29
$
0.29
4,311
$
0.29
$
0.29
114,309
$
3.08
$
3.08
29,309
$
3.08
$
3.08
12,069
$
3.08
$
3.08
1,034
$
3.08
$
3.08
4,310
$
3.08
$
3.08
31,897
$
3.08
$
3.08
48,273
$
3.08
$
3.08
534,449
$
3.28
$
11.02
5,173
$
3.28
$
11.02
12,412
$
3.28
$
11.02
48,274
$
3.28
$
11.02
5,172
$
11.02
$
11.02
194,647
$
11.02
$
11.02
The contemporaneous valuation prepared as of June 30, 2011
contained multiple liquidity scenarios, including an initial
public offering with an anticipated completion date of
October 1, 2011 and two scenarios that assumed we remained
as a private company for an extended period of time. If we had
considered only the October 1, 2011 initial public offering
scenario with 100% probability, the contemporaneous valuation
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We believe that it is reasonable to expect that the completion
of an initial public offering could increase the value of our
common stock as a result of the significant increase in our
liquidity as well as the ability to buy and sell these
securities. However, it is not possible to measure the potential
increase in value with precision or certainty.
We would also note that a number of the most-recently completed
initial public offerings by companies in the biotech and
specialty pharmaceutical industries were completed at a discount
to the midpoint of their filing ranges. Therefore, it is
possible that the price at which this offering is completed will
be lower than the midpoint of the price range set forth on the
cover page of this prospectus.
Nine Months Ended
September 30,
Increase
2011
2010
(Decrease)
(unaudited, in thousands)
$
$
$
28,286
13,672
14,614
4,824
3,065
1,759
7,000
2,000
5,000
(40,110
)
(18,737
)
21,373
(552
)
340
(892
)
$
(40,662
)
$
(18,397
)
$
22,265
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Period from
April 20, 2009
Year ended
(Inception) to
December 31,
December 31,
Increase
2010
2009
(Decrease)
$
$
$
22,323
1,762
20,561
4,302
2,209
2,093
12,000
13,085
(1,085
)
(38,625
)
(17,056
)
21,569
795
(43
)
838
$
(37,830
)
$
(17,099
)
$
20,731
increase of $5.5 million related to the commencement of our
pivotal clinical trial for CO-101 in January 2010;
increase of $4.7 million for CO-101 drug product
development, clinical supply manufacturing and distribution;
increase of $2.3 million associated with CO-1686 product
development and IND enabling activities;
increase of $2.0 million for the initiation of additional
supporting CO-101 clinical studies;
increase of $1.1 million for companion diagnostic
development related to both CO-101 and
CO-1686; and
increase of $4.0 million to salaries, benefits and other
personnel costs to support the growth in our 2010 development
activities.
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Period from
April 20, 2009
Year Ended
(Inception) to
Nine Months Ended
December 31,
December 31,
September 30,
2010
2009
2011
2010
(unaudited)
(unaudited)
$
(34,011
)
$
(17,955
)
$
(27,165
)
$
(16,174
)
(12,821
)
(270
)
9,169
(16,922
)
29
75,536
27,441
2
39
$
(46,803
)
$
57,311
$
9,484
$
(33,094
)
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the number and characteristics of the product candidates,
companion diagnostics, and indications we pursue;
the achievement of various development, regulatory and
commercial milestones resulting in required payments to partners
pursuant to the terms of our license agreements;
the scope, progress, results and costs of researching and
developing our product candidates and related companion
diagnostics and conducting clinical and preclinical trials;
the timing of, and the costs involved in, obtaining regulatory
approvals for our product candidates and companion diagnostics;
the cost of commercialization activities, if any, of our product
candidates are approved for sale, including marketing and
distribution costs;
the cost of manufacturing any of our product candidates we
successfully commercialize;
the costs involved in preparing, filing, prosecuting,
maintaining, defending and enforcing patent claims, including
litigation costs and outcome of such litigation; and
the timing, receipt and amount of sales, if any, of our product
candidates.
Less than
More than
Total
1 Year
1 to 3 Years
3 to 5 Years
5 Years
$
2,198
$
665
$
1,140
$
393
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CO-101
-Our most advanced product candidate, CO-101, is
currently in a pivotal clinical study comparing CO-101 to
gemcitabine in patients with metastatic pancreatic cancer for
use as an initial therapy recommended for treatment of the
disease, or a so-called first-line treatment. We
expect to complete enrollment for this trial in the first
quarter of 2012 and report top line results as to overall
survival in the prespecified hENT1-low patient subset in the
fourth quarter of 2012. CO-101 is a novel, patented,
lipid-conjugated form of the anti-cancer drug gemcitabine that
is designed to treat patients with pancreatic cancer whose
tumors express low amounts of a membrane transporter protein on
the surface of the cancer cell known as hENT1 and are thus
expected to be resistant to standard gemcitabine-based therapy.
Based on the published results of multiple studies assessing the
correlation of hENT1 expression to survival outcomes in
pancreatic cancer patients treated with gemcitabine, which found
similar distributions of pancreatic cancer patients with low
expressions of hENT1, we believe that approximately 50% of
pancreatic cancer patients express low levels of hENT1, and thus
derive little or no benefit from gemcitabine therapy. We have
partnered with Ventana Medical Systems for the development and
commercialization of a companion diagnostic for the assessment
of hENT1 levels.
CO-1686
-Our second product candidate, CO-1686, is an
orally available, small molecule covalent inhibitor of the
cancer-causing mutant forms of EGFR for the treatment of NSCLC.
Because CO-1686 targets both the initial activating mutations as
well as the primary resistance mutation, T790M, it has the
potential to treat NSCLC patients with EGFR mutations, both as a
first-line treatment, or as a therapy recommended for patients
when a first-line treatment has been ineffective, a so-called
second-line treatment. CO-1686 is currently in
preclinical development and we plan to file an Investigational
New
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Drug application, or IND, in the first quarter of 2012. We have
designed an accelerated clinical development program for
CO-1686, and if successful, have a goal of filing a New Drug
Application, or NDA, for an initial indication within
approximately four years of filing our IND. We have partnered
with Roche Molecular Systems, Inc., or Roche, for the
development and commercialization of a companion diagnostic for
EGFR mutations.
CO-338
-Our third product candidate, CO-338, is an orally
available, small molecule PARP inhibitor being developed for use
as monotherapy or in combination with chemotherapeutic agents
for the treatment of various cancers. CO-338 is currently in a
dose ranging Phase I clinical trial in combination with
carboplatin chemotherapy for the treatment of solid tumors. This
program is supplemented by two investigator-sponsored trials of
CO-338 for the treatment of breast and ovarian cancers. We
intend to initiate a Phase I monotherapy study of the oral
formulation in the fourth quarter of 2011 to determine an
appropriate dose and schedule for long term administration.
Focus on oncology.
The oncology market
is characterized by a number of disorders with high rates of
recurrence and a limited response from current therapies or
treatments. Many of these therapies include severe side effects.
New oncology product candidates addressing unmet medical needs
or providing superior safety profiles are frequently the subject
of expedited regulatory reviews and, if approved, can experience
rapid adoption rates. We believe that the increasing role of
targeted therapies and companion diagnostics to identify
selected patient subsets in oncology presents the potential for
improved patient outcomes.
Focus on compounds where improved outcomes are associated
with specific biomarkers.
Our licensing
strategy to date has been to prioritize opportunities in which a
strong biological hypothesis has been established linking a
specific characteristic or biological state of a cell, or
biomarker, with improved outcomes for the product candidate. As
evidenced by the proliferation of studies focused on the
biomarkers of specific cancers, significant progress has been
made over the last several years in the identification of
molecular targets and pathways that more narrowly specify the
causes of cancer and the variation in responses to different
therapies experienced by patient subsets with a particular
cancer or tumor type. In certain cases, the underlying science
has progressed to the point that subset patient populations
deriving little or no benefit from existing therapies can be
identified and targeted by newly developed therapies, such as
our product candidates. We believe that the identification of
such subsets, and the correlation of their specific
characteristics to the drug under development, should increase
the clinical benefit to targeted patients and the probability of
success in our clinical trials. Such patient identification
should also enable us to design clinical trials that may be
completed more rapidly than has traditionally been the case,
and, if successful, to achieve clinical outcomes for the
targeted group that are sufficiently attractive to support the
risk/benefit metrics of healthcare payors.
Combine companion diagnostics with drug development
efforts to realize superior clinical
outcomes.
A companion diagnostic is a test or
measurement intended to assist physicians in making treatment
decisions for their patients. Companion diagnostics do so by
identifying the presence of biomarkers, and physicians use this
information to select a specific drug or treatment to which
their patient will most likely respond. Our development strategy
is based on the premise that we can utilize effective companion
diagnostics to identify different patient subsets who we believe
will uniquely benefit from our product
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candidates. We are partnering to develop these companion
diagnostics for use in the clinical development and ultimate
commercial utilization of our product candidates. Because we do
not develop diagnostics internally, we are able to select from
among all available technologies when choosing a partner for our
programs under development. This flexibility allows us to choose
the most appropriate partner and diagnostic platform for each
program under development and affords us the best chance of
clinical success. We have partnered with experienced diagnostic
companies that we believe have the ability and commitment to
gain the required regulatory approvals and support global
commercialization for these companion diagnostics.
Manage and control global development activities and
regulatory operations.
We believe our
development and regulatory experience enables us to devise time-
and cost-efficient strategies to develop and obtain regulatory
approvals for new drugs, and to identify the regulatory pathway
that allows us to get a product candidate to market as quickly
as possible. Unlike many early stage biotechnology and
pharmaceutical companies that have development or regulatory
capabilities only in the country in which they are located, we
have assembled an experienced team with a successful track
record at managing global clinical development activities, and
with multinational expertise in obtaining regulatory approvals
for new drugs and in maintaining compliance with the regulations
governing the sales, marketing and distribution of
pharmaceutical products. We believe we can manage a global
development program without local partners. We manage critical
functions in house, including clinical development,
biostatistics, pharmaceutical development, molecular diagnostics
and clinical and regulatory operations, and we outsource certain
activities where economically and strategically appropriate.
Seek and maintain global commercial
rights.
We believe that it is very important
to maintain global rights to our product candidates, and that we
can build our own commercial organizations in major
pharmaceutical markets as well as a network of third-party
distributors in smaller markets. We believe there are a
relatively small number of oncologists practicing in each of the
major pharmaceutical markets and an even smaller number of
oncology opinion leaders who significantly influence the types
of drugs prescribed in cancer therapy. We therefore believe that
we can effectively reach the oncology markets with a relatively
small sales and marketing organization focused on these
physicians and oncology opinion leaders. As a result, we plan to
maintain commercial autonomy and will not require a
pharmaceutical partner for commercialization activities. By
managing the global sales and marketing of our products on our
own, we believe we can provide uniform marketing programs and
consistent product positioning, pricing and labeling. Finally,
by controlling commercial activities ourselves in major markets,
we will retain the vast majority of the revenues from our
product candidates.
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Ability to analyze accessible tissue:
Patients with
metastatic pancreatic cancer typically have liver metastases
which can be biopsied quite easily and analyzed by IHC;
Simple assay/local analysis:
IHC is a standard
laboratory technique that is widely utilized and does not
require samples to be sent off-site for analysis;
Based on existing technology:
Ventana utilized
established IHC diagnostic techniques to develop a validated
hENT1 IHC assay using knowledge already gained from IHC hENT1
assays developed by academics;
Regulatory precedent:
IHC IVDs have previously been
approved by the FDA as companion diagnostics for cancer
therapeutics, including Ventanas PATHWAY HER-2/neu assay
intended to assist in the assessment of breast cancer patients
for whom Herceptin treatment is considered; and
Reimbursement:
IHC diagnostic kits are widely
reimbursed by health care payors.
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potential to effectively treat patients with T790M mutant EGFR
NSCLCa large and growing group of patients, which have
been identified with greater frequency due to recently approved
guidelines, who today have no effective therapy;
potential to effectively treat patients with initial activating
mutations in the EGFR who receive first-generation
TKIs, but develop resistance due to the acquired T790M mutation;
CO-1686 would be expected to prevent resistance through this
mechanism and may thus cause responses of greater duration than
seen with first generation TKIs and extend progression-free
survival; and
it would not be expected to inhibit normal EGFR in skin or
intestine, and thus would be less likely to cause skin rash and
diarrhea, which are dose limiting with all other EGFR inhibitors.
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monotherapy in germ-line BRCA patients (mostly breast and
ovarian cancer although a few patients develop tumors in
pancreas and prostate);
monotherapy (induction
and/or
maintenance therapy) in patients with high BRCA-ness tumors; and
combination therapy with cytotoxic chemotherapy or radiation or
targeted therapy in other tumors.
it is a very potent inhibitor of PARP-1 and PARP-2 proteins;
it is available in both oral and IV. In combination with
intravenous cytotoxic chemotherapy, it is possible that brief,
high-intensity PARP inhibition is optimal for efficacy, and an
intravenous formulation may be a preferred option under such
conditions;
the oral formulation offers good bioavailability and low
inter-individual pharmacokinetic variability;
CO-338 can be used as monotherapy in germ-line BRCA patients and
has shown activity in this setting (with the IV
formulation);
CO-338 can be used in combination with cytotoxic chemotherapy
and can be safely given at doses shown to be highly PARP
inhibitory, as suggested by the trial results described below;
and
CO-338 can likely be used as oral maintenance therapy after
cytotoxic chemotherapy.
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submission to the FDA of an IND which must become effective
before human clinical trials may begin and must be updated
annually;
completion of extensive preclinical laboratory tests and
preclinical animal studies, all performed in accordance with the
FDAs Good Laboratory Practice, or GLP, regulations;
performance of adequate and well-controlled human clinical
trials to establish the safety and efficacy of the product
candidate for each proposed indication;
submission to the FDA of an NDA after completion of all pivotal
clinical trials;
a determination by the FDA within 60 days of its receipt of
an NDA to file the NDA for review;
satisfactory completion of an FDA pre-approval inspection of the
manufacturing facilities at which the active pharmaceutical
ingredient, or API, and finished drug product are produced and
tested to assess compliance with cGMP regulations; and
FDA review and approval of an NDA prior to any commercial
marketing or sale of the drug in the United States.
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Phase I.
Phase I includes the initial
introduction of an investigational new drug into humans. Phase I
clinical trials are typically closely monitored and may be
conducted in patients with the target disease or condition or in
healthy volunteers. These studies are designed to evaluate the
safety, dosage tolerance, metabolism and pharmacologic actions
of the investigational drug in humans, the side effects
associated with increasing doses, and if possible, to gain early
evidence on effectiveness. During Phase I clinical trials,
sufficient information about the investigational drugs
pharmacokinetics and pharmacological effects may be obtained to
permit the design of well-controlled and scientifically valid
Phase II clinical trials. The total number of participants
included in Phase I clinical trials varies, but is generally in
the range of 20 to 80.
Phase II.
Phase II includes controlled
clinical trials conducted to preliminarily or further evaluate
the effectiveness of the investigational drug for a particular
indication(s) in patients with the disease or condition under
study, to determine dosage tolerance and optimal dosage, and to
identify possible adverse side effects and safety risks
associated with the drug. Phase II clinical trials are
typically well-controlled, closely monitored, and conducted in a
limited patient population, usually involving no more than
several hundred participants.
Phase III.
Phase III clinical trials are
generally controlled clinical trials conducted in an expanded
patient population generally at geographically dispersed
clinical trial sites. They are performed after preliminary
evidence suggesting effectiveness of the drug has been obtained,
and are intended to further evaluate dosage, clinical
effectiveness and safety, to establish the overall benefit-risk
relationship of the investigational drug product, and to provide
an adequate basis for product approval. Phase III clinical
trials usually involve several hundred to several thousand
participants.
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Centralized procedure.
The EMA implemented the
centralized procedure for the approval of human medicines to
facilitate marketing authorizations that are valid throughout
the European Union. This procedure results in a single marketing
authorization issued by the EMA that is valid across the
European Union, as well as Iceland, Liechtenstein and Norway.
The centralized procedure is compulsory for human medicines that
are: derived from biotechnology processes, such as genetic
engineering, contain a new active substance indicated for the
treatment of certain diseases, such as HIV/AIDS, cancer,
diabetes, neurodegenerative disorders or autoimmune diseases and
other immune dysfunctions, and officially designated orphan
medicines.
For medicines that do not fall within these categories, an
applicant has the option of submitting an application for a
centralized marketing authorization to the EMA, as long as the
medicine concerned is a significant therapeutic, scientific or
technical innovation, or if its authorization would be in the
interest of public health.
National authorization procedures.
There are
also two other possible routes to authorize medicinal products
in several countries, which are available for investigational
drug products that fall outside the scope of the centralized
procedure:
Decentralized procedure.
Using the
decentralized procedure, an applicant may apply for simultaneous
authorization in more than one European Union country of
medicinal products
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that have not yet been authorized in any European Union country
and that do not fall within the mandatory scope of the
centralized procedure.
Mutual recognition procedure.
In the mutual
recognition procedure, a medicine is first authorized in one
European Union Member State, in accordance with the national
procedures of that country. Following this, further marketing
authorizations can be sought from other European Union countries
in a procedure whereby the countries concerned agree to
recognize the validity of the original, national marketing
authorization.
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An annual, nondeductible fee on any entity that manufactures or
imports certain branded prescription drugs and biologic agents;
A new Medicare Part D coverage gap discount program, in
which pharmaceutical manufacturers who wish to have their drugs
covered under Part D must offer discounts to eligible
beneficiaries during their coverage gap period (the donut
hole); and
A new formula that increases the rebates a manufacturer must pay
under the Medicaid Drug Rebate Program.
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continue with the clinical development of our product
candidates, including the clinical trials for CO-101 and
CO-338; and
continue with the preclinical development of CO-1686, looking
toward the filing of an IND in the first quarter of 2012, and
the commencement of a Phase I clinical trial in the first half
of 2012.
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F-17
Age
Position
48
President and Chief Executive Officer; Director
49
Executive Vice President and Chief Financial Officer
45
Executive Vice President of Clinical and Pre-Clinical
Development and Chief Medical Officer
58
Executive Vice President, Technical Operations and Chief
Regulatory Officer
40
Senior Vice President of Commercial Operations
58
Director
69
Director
72
Director
56
Director
59
Director
52
Director
70
Director
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for any breach of the directors or officers duty of
loyalty to us or our stockholders;
for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law;
under Section 174 of the Delaware General Corporation Law
(unlawful dividends or stock repurchases); or
for any transaction from which a director or officer derives an
improper personal benefit.
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Patrick J. Mahaffy, our President and Chief Executive Officer;
Erle T. Mast, our Executive Vice President and Chief Financial
Officer;
Gillian C. Ivers-Read, our Executive Vice President, Technical
Operations and Chief Regulatory Officer; and
Andrew R. Allen, our Executive Vice President of Clinical and
Pre-Clinical Development and Chief Medical Officer.
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Base salary: Base salary is a fixed portion of overall
compensation that is set based on factors such as the scope of
an employees responsibilities, and which provides income
regardless of our short-term performance. Our board of directors
does not believe that base salary creates an incentive for our
employees to take undue risks.
Bonus programs: Bonuses are designed to reward employees for
achieving annual company-wide performance goals that are
important to our success, and intended to compensate our
employees for achieving such goals. Although the board of
directors has historically based bonuses on the achievement of
company-wide goals, the actual amount of any bonus is subject to
board of directors discretion. For these reasons, our board of
directors does not believe that our bonus programs encourage
employees to take risks which could have an adverse effect on us.
Equity compensation: Equity awards are designed to encourage our
employees to align their interests with the long-term interests
of our stockholders. Our board of directors believes that equity
compensation discourages our employees from taking unnecessary
risks because the ultimate value of the equity awards is
determined based on the long-term appreciation in the value of
our stock.
All Other
Salary
Bonus
compensation
(1)
Total
Year
($)
($)
($)
($)
2010
375,000
75,000
9,800
459,800
2010
325,000
52,000
9,208
386,208
2010
325,000
52,000
9,208
386,208
2010
325,000
52,000
9,208
386,208
(1)
Represents the matching contributions made during 2010 to our
401(k) plan on behalf of each named executive officer.
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Market value of
Number of shares or
shares or units of
units of stock that
stock that have
have not vested
not vested
(#)
(1)
($)
(2)
273,438
896,877
91,146
298,959
91,146
298,959
91,146
298,959
(1)
The restricted stock held by the named executive officers was
granted in May 2009 and was 25% vested as of the date of grant,
and thereafter 1/48th of the remaining restricted stock vests on
each monthly anniversary of the date of grant thereafter. In the
event that a named executive officers employment is
terminated by us without cause within six months
following a change in control of the Company, 100% of the
unvested shares of restricted stock will immediately vest upon
such termination.
(2)
Represents the estimated market value of the shares on
December 31, 2010 of $3.28 per share.
Restricted stock awards
Number of shares
Value realized on
acquired on vesting (#)
vesting
($)
(1)
113,147
348,493
37,715
116,162
37,715
116,162
37,715
116,162
(1)
Represents the aggregate value realized upon vesting based on
the estimated market value on each applicable vesting date of
$3.08 per share.
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Option awards
($)
(1)(2)
Total ($)
13,800
13,800
13,800
13,800
13,800
13,800
13,800
13,800
13,800
13,800
13,800
13,800
13,800
13,800
(1)
The directors each received a grant of options to purchase
6,897 shares of our common stock on December 2, 2010.
As of December 31, 2010, each of the directors other than
Dr. Blair had a total of 32,760 options outstanding.
As of December 31, 2010, Dr. Blair had exercised
25,863 options for shares of our restricted common stock
and had 6,897 options outstanding.
(2)
Amount represents the fair value of the awards on the date of
grant computed in accordance with FASB ASC Topic 718. The
assumptions used in the valuation of these awards are consistent
with the valuation methodologies specified in the notes to our
financial statements included elsewhere in this prospectus.
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Principal
Series A-1
Series A-2
Series B
Amount of
Convertible
Convertible
Convertible
Convertible
Common
Preferred
Preferred
Preferred
Promissory
Stock
Stock
Stock
Stock
Notes
1,206,897
1,206,897
2,612,330
$4,784,000
1,206,897
1,206,897
2,612,330
$4,784,000
862,069
862,069
1,865,950
$3,418,000
517,241
517,241
1,119,570
$2,050,000
517,241
517,241
1,119,570
$2,050,000
603,449
51,724
51,724
111,957
$206,000
201,150
6,897
6,897
14,928
$28,000
201,150
10,345
10,345
22,391
$40,000
201,150
6,897
6,897
14,928
$28,000
103,448
103,448
223,914
$410,000
17,241
17,241
37,319
$68,000
$0.0029
$2.00
$3.00
$4.62
N/A
N/A
$5.80
$8.70
$13.40
$14.00
*
May 12, 2009
May 15, 2009
November 9, 2009
November 18, 2009
May 25, 2011
*
Assuming an initial public offering price of $14.00 per share,
the midpoint of the price range set forth on the cover page of
this prospectus.
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each person or group of affiliated persons who are known by us
to own beneficially more than 5% of our common stock;
each member of our board of directors and each of our named
executive officers; and
all members of our board of directors and our named executive
officers as a group.
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Prior to This Offering
After This Offering
Number of
Percent of
Number of
Percent of
Shares
Shares
Shares
Shares
Beneficially
Beneficially
Beneficially
Beneficially
Owned
Owned
Owned
Owned
2,115,950
(1)
18.5
%
2,981,085
14.4
%
2,083,190
(2)
18.2
%
2,948,325
14.2
%
1,488,055
(3)
13.0
%
2,106,009
10.1
%
892,771
(4)
7.8
%
1,263,542
6.1
%
892,773
(5)
7.8
%
1,263,544
6.1
%
1,096,378
(6)
9.6
%
1,096,378
5.3
%
899,694
7.8
%
936,770
4.5
%
282,066
(7)
2.4
%
287,009
1.4
%
287,896
(8)
2.5
%
291,467
1.4
%
282,066
(9)
2.4
%
287,009
1.4
%
86,206
(10)
*
86,206
*
1,533,226
(11)
13.3
%
2,151,180
10.3
%
2,128,361
(12)
18.5
%
2,993,496
14.4
%
2,128,363
(13)
18.5
%
2,993,498
14.4
%
937,942
(14)
8.1
%
1,308,713
6.3
%
223,723
(15)
1.9
%
297,876
1.4
%
45,171
(16)
*
45,171
*
74,904
(17)
*
87,263
*
8,909,618
74.0
%
11,765,658
55.1
%
*
Represents beneficial ownership of less than 1% of our common
stock.
(1)
Includes 2,048,256 shares of common stock owned by Domain
Partners VII, L.P., 34,934 shares of common stock owned by
DP VII Associates, L.P. and 32,760 shares of common stock
owned by Domain Associates, L.L.C. With respect to the shares
owned by Domain Partners VII, L.P. and DP VII Associates, L.P.,
James C. Blair, Brian H. Dovey, Jesse I. Treu,
Kathleen K. Schoemaker, Brian K. Halak and Nicole Vitullo, the
managing members of One Palmer Square Associates VII, L.L.C.,
the general partner of Domain Partners VII, L.P. and DP VII
Associates, L.P., share voting and investment power with respect
to these shares. With respect to the shares owned by Domain
Associates, L.L.C., voting and investment power is shared among
the managing members, James C. Blair, Brian H. Dovey, Jesse I.
Treu, Kathleen K. Schoemaker, Brian K. Halak and Nicole Vitullo.
Domain Associates is located at One Palmer Square,
Suite 515, Princeton, NJ 08542.
(2)
Includes (i) 2,076,294 shares of common stock held of
record by New Enterprise Associates 13, L.P. (NEA 13); and
(ii) 6,896 shares of common stock held of record by
NEA Ventures 2009, L.P. (Ven 2009). The shares directly held by
NEA 13 are indirectly held by NEA Partners 13, L.P. (NEA
Partners 13), the sole general partner of NEA 13, NEA 13 GP, LTD
(NEA 13 LTD), the sole general partner of NEA Partners 13 and
each of the individual directors of NEA 13 LTD. The individual
Directors (collectively, the Directors) of NEA 13
LTD, M. James Barrett (a member of our board of directors),
Peter J. Barris, Forest Baskett, Ryan D. Drant, Patrick J.
Kerins, Krishna Kittu Kolluri, C. Richard Kramlich,
David M. Mott, Scott D. Sandell, Ravi Viswanathan and Harry R.
Weller, share voting and investment power with respect to these
shares. The shares directly held by Ven 2009 are indirectly held
by Karen P. Welsh, the general partner of Ven 2009. NEA 13, NEA
Partners 13, NEA 13 LTD and the Directors share voting and
dispositive power with regard to the shares directly held by NEA
13. Karen P. Welsh, the general partner of Ven 2009, holds
voting and dispositive power over the shares held by Ven 2009.
All indirect holders of the above-referenced shares disclaim
beneficial ownership of all applicable shares except to the
extent of their actual pecuniary interest therein. The principal
business address of New Enterprise Associates, Inc. is 1954
Greenspring Drive, Suite 600, Timonium, MD 21093.
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(3)
Includes 1,478,741 shares of common stock held of record by
Versant Venture Capital IV, L.P. and 9,314 shares of common
stock owned by Versant Side Fund IV, L.P. Voting and
investment power over the shares held of record by Versant
Venture Capital IV, L.P., and Versant Side Fund IV, L.P. is held
by Versant Ventures IV, LLC, their sole general partner.
Brian G. Atwood, a member of our board of directors, is a
managing member of Versant Ventures IV, LLC but he disclaims
beneficial ownership of these securities, except to the extent
of his pecuniary interest therein, and the options held by him.
The individual managing members of Versant Ventures IV, LLC are
Brian G. Atwood, Bradley J. Bolzon, Samuel D. Colella, Ross A.
Jaffe, William J. Link, Kirk G. Nielsen, Robin L. Praeger,
Rebecca B. Robertson, Camille D. Samuels, Charles M. Warden and
Kevin J. Wasserstein, all of whom share voting and investment
power with respect to these shares. Each individual managing
member disclaims beneficial ownership of these shares, except to
the extent of their pecuniary interest in such shares. The
address of each entity affiliated with Versant Ventures is 3000
Sand Hill Road, Building Four, Suite 210, Menlo Park, CA 94025.
(4)
Includes 875,302 shares of common stock owned by Aberdare
Ventures IV, L.P. and 17,469 shares of common stock owned
by Aberdare Partners IV, L.P. Mr. Klingenstein is a
managing member of Aberdare GP IV, LLC, the general partner of
Aberdare Ventures IV, L.P. and Aberdare Partners IV, L.P. With
respect to the shares owned by Aberdare Ventures IV, L.P. and
Aberdare Partners IV, L.P., voting and investment power is
shared among Mr. Klingenstein, Sami Hamade and John H.
Odden, the managing members of Aberdare GP IV, LLC.
Mr. Klingenstein disclaims beneficiary ownership of such
shares except to the extent of his pecuniary interest therein.
Aberdare Ventures is located at One Embarcadero Center,
Suite 4000, San Francisco, CA 94111.
(5)
Abingworth LLP is the Manager of Abingworth
Bioventures V L.P. The investment committee of
Abingworth LLP comprising Dr. Joseph Anderson, Michael
Bigham, Dr. Stephen Bunting and Dr. Jonathan MacQuitty
share voting and investment power with respect to these shares,
and disclaim beneficial ownership except to the extent of their
pecuniary interest therein. Abingworth LLP is located at
38 Jermyn Street, London, SW1Y 6DN, United Kingdom.
(6)
Pfizer Inc. is located at 235 East 42nd Street, New York, NY
10017.
(7)
Includes 68,965 shares of common stock subject to
outstanding options which are exercisable within the next
60 days.
(8)
Includes 68,965 shares of common stock subject to
outstanding options which are exercisable within the next
60 days.
(9)
Includes 68,965 shares of common stock subject to
outstanding options which are exercisable within the next
60 days.
(10)
Includes 86,206 shares of common stock subject to
outstanding options which are exercisable within the next
60 days.
(11)
Includes 45,171 shares of common stock subject to
outstanding options which are exercisable within the next
60 days, 1,478,741 shares of common stock owned by
Versant Venture Capital IV, L.P. and 9,314 shares of common
stock owned by Versant Side Fund IV, L.P. Versant Ventures
IV, L.L.C. is the general partner of Versant Venture Capital IV,
L.P. and Versant Side Fund IV, L.P. Versant Ventures IV, L.L.C.
shares voting and dispositive power over the shares of common
stock held by Versant Venture Capital IV, L.P. and Versant Side
Fund IV, L.P. Mr. Atwood is a managing member of Versant
Ventures IV, L.L.C. Mr. Atwood disclaims beneficial
ownership of these securities, except to the extent of his
pecuniary interest therein.
(12)
Includes 45,171 shares of common stock subject to
outstanding options which are exercisable within the next
60 days. See footnote (2) above regarding
Dr. Barretts relationship with New Enterprise
Associates, Inc. and its affiliated entities. Dr. Barrett
disclaims beneficial ownership of the shares held by NEA 13 and
Ven 2009, referenced in footnote (2) above, except to the
extent of his actual pecuniary interest therein.
Dr. Barrett does not have voting or dispositive power over
the shares held of record by Ven 2009.
(13)
Includes 12,413 shares of common stock subject to
outstanding options which are exercisable within the next
60 days, 2,048,256 shares of common stock owned by
Domain Partners VII, L.P., 34,934 shares of common stock
owned by DP VII Associates, L.P. and 32,760 shares of
common stock owned by Domain Associates, L.L.C. Dr. Blair
is a managing member of One Palmer Square Associates VII,
L.L.C., which is the general partner of Domain Partners VII,
L.P. and DP VII Associates, L.P. Dr. Blair is also a
managing member of Domain Associates, L.L.C. Dr. Blair
disclaims beneficial ownership of these shares except to the
extent of his pecuniary interest in such shares.
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(14)
Includes 45,171 shares of common stock subject to
outstanding options which are exercisable within the next
60 days, 875,302 shares of common stock owned by
Aberdare Ventures IV, L.P. and 17,469 shares of common
stock owned by Aberdare Partners IV, L.P. Mr. Klingenstein
is a managing member of Aberdare GP IV, LLC, the general partner
of Aberdare Ventures IV, L.P. and Aberdare Partners IV, L.P.
With respect to the shares owned by Aberdare Ventures IV, L.P.
and Aberdare Partners IV, L.P., voting and investment power is
shared among the managing members of Aberdare GP IV, LLC.
Mr. Klingenstein disclaims beneficiary ownership of such
shares except to the extent of his pecuniary interest therein.
(15)
Includes 45,171 shares of common stock subject to
outstanding options which are exercisable within the next
60 days.
(16)
Includes 45,171 shares of common stock subject to
outstanding options which are exercisable within the next
60 days.
(17)
Includes 45,171 shares of common stock subject to
outstanding options which are exercisable within the next
60 days.
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the number of directors will be fixed from time to time
exclusively pursuant to a resolution adopted by our board of
directors, but must consist of not less than three directors,
which will prevent stockholders from circumventing the
provisions of our classified board of directors;
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directors may be removed only for cause; and
vacancies on our board of directors may be filled only by a
majority of directors then in office, even though less than a
quorum.
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1% of the number of shares of our common stock then outstanding,
which will equal approximately 207,656 shares, or
221,606 shares if the underwriters exercise their
over-allotment option in full, immediately after this offering,
based on the number of shares of our common stock outstanding as
of September 30, 2011; or
the average weekly trading volume of our common stock on the
NASDAQ Global Market during the four calendar weeks preceding
the filing of a notice on Form 144 with respect to the sale.
during the last 17 days of the
180-day
restricted period we issue an earnings release or announce
material news or a material event; or
prior to the expiration of the
180-day
restricted period, we announce that we will release earnings
results during the
16-day
period beginning on the last day of the
180-day
period,
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the history of, and prospects for, our company and the industry
in which we compete;
our past and present financial performance;
an assessment of our management;
the present state of our development;
the prospects for our future earnings;
the prevailing conditions of the applicable U.S. securities
market at the time of this offering;
market valuations of publicly traded companies that we and the
representatives of the underwriters believe to be comparable to
us; and
other factors deemed relevant.
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a nonresident alien individual;
a corporation (or any other entity treated as a corporation for
U.S. federal income tax purposes) created or organized in
or under the laws of a jurisdiction other than the United
States, any state thereof or the District of Columbia;
an estate other than one the income of which is subject to
U.S. federal income taxation regardless of its
source; or
a trust other than a trust if it (A) is subject to the
primary supervision of a court within the United States and the
control of one or more U.S. persons having the authority to
control all substantial decisions of the trust, or (B) has
a valid election in effect to be treated as a U.S. person.
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the gain is effectively connected with the
non-U.S. holders
conduct of a trade or business in the United States (and, if
required by an applicable income tax treaty, is attributable to
a U.S. permanent establishment); or
we are or have been a U.S. real property holding
corporation, as defined below, at any time within the five-year
period preceding the disposition or the
non-U.S. holders
holding period, whichever period is shorter (the relevant
period).
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Number of
Shares
9,300,000
Without
With full
over-allotment
over-allotment
exercise
exercise
$
$
$
$
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the information set forth in this prospectus and otherwise
available to the representatives;
our prospects and the history and prospects for the industry in
which we compete;
an assessment of our management;
our prospects for future earnings;
the general condition of the securities markets at the time of
this offering;
the recent market prices of, and demand for, publicly traded
common stock of generally comparable companies; and
other factors deemed relevant by the underwriters and us.
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to legal entities which are authorized or regulated to operate
in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
to any legal entity which has two or more of (1) an average
of at least 250 employees during the last financial year;
(2) a total balance sheet of more than 43,000,000 and
(3) an annual net turnover of more than 50,000,000,
as shown in its last annual or consolidated accounts;
to fewer than 100 natural or legal persons (other than qualified
investors as defined in the E.U. Prospectus Directive) subject
to obtaining the prior consent of the book-running managers for
any such offer; or
in any other circumstances which do not require the publication
by the Issuer of a prospectus pursuant to Article 3 of the
Prospectus Directive.
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F-2
F-3
F-4
F-5
F-6
F-7
F-1
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F-2
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Cumulative
Period from
from
For the Year
April 20, 2009
April 20, 2009
Ended
(Inception) to
(Inception) to
December 31,
December 31,
Nine Months Ended September 30,
September 30,
2010
2009
2011
2010
2011
(unaudited)
(unaudited)
(unaudited)
(in thousands, except per share amounts)
$
$
$
$
$
22,323
1,762
28,286
13,672
52,371
4,302
2,209
4,824
3,065
11,335
12,000
13,085
7,000
2,000
32,085
(38,625
)
(17,056
)
(40,110
)
(18,737
)
(95,791
)
795
(43
)
(552
)
340
200
$
(37,830
)
$
(17,099
)
$
(40,662
)
$
(18,397
)
$
(95,591
)
$
(28.55
)
$
(15.38
)
$
(26.80
)
$
(13.91
)
$
(72.25
)
1,325
1,112
1,517
1,323
1,323
$
(4.41
)
$
(4.09
)
$
(12.58
)
8,570
9,939
7,598
F-3
Table of Contents
December 31,
September 30, 2011
2010
2009
September 30, 2011
Pro Forma
(unaudited)
(unaudited)
(in thousands, except for share amounts)
$
10,508
$
57,311
$
19,992
$
19,992
11,791
2,036
2,036
1,826
1,105
401
401
1,096
66
2,662
2,662
25,221
58,482
25,091
25,091
951
264
1,263
1,263
810
28
18
34
34
$
26,200
$
59,574
$
26,388
$
26,388
Liabilities and stockholders deficit
$
1,400
$
534
$
2,938
$
2,938
3,195
388
4,273
4,273
740
211
1,495
1,495
35,602
5,335
1,133
44,308
8,706
115
133
133
9,916
9,916
9,916
15,135
15,135
15,135
50,448
50,448
50,448
1
1
2
11
137
40
1,989
113,316
42
48
48
(54,929
)
(17,099
)
(95,591
)
(95,826
)
(54,749
)
(17,058
)
(93,552
)
17,549
$
26,200
$
59,574
$
26,388
$
26,388
F-4
Table of Contents
(A Development Stage Enterprise)
Consolidated Statements of
Convertible Preferred Stock and Stockholders
Deficit
Deficit
Accumulated
Accumulated
Convertible
Additional
Other
During
Total
Preferred Stock
Common Stock
Paid-In
Comprehensive
Development
Stockholders
Comprehensive
Shares
Amount
Shares
Amount
Capital
Income
Stage
Deficit
Loss
(in thousands, except for share amounts)
$
$
$
$
$
$
1,206,899
1
2
3
21,009,196
75,499
114,659
33
33
4
4
(17,099
)
(17,099
)
$
(17,099
)
21,009,196
75,499
1,321,558
1
39
(17,099
)
(17,059
)
$
(17,099
)
15,518
29
29
68
68
42
42
$
42
(37,830
)
(37,830
)
(37,830
)
21,009,196
75,499
1,337,076
1
136
42
(54,929
)
$
(54,750
)
$
(37,788
)
324,217
1
1,051
1,052
802
802
(36
)
(36
)
$
(36
)
42
42
42
(40,662
)
(40,662
)
(40,662
)
21,009,196
$
75,499
1,661,293
$
2
$
1,989
$
48
$
(95,591
)
$
(93,552
)
$
(40,656
)
2,559,774
2
35,835
(235
)
35,602
(235
)
(21,009,196
)
(75,499
)
7,244,523
7
75,492
75,499
$
11,465,590
$
11
$
113,316
$
48
$
(95,826
)
$
17,549
$
(40,891
)
F-5
Table of Contents
Cumulative
Period from
from
For the
April 20, 2009
April 20, 2009
Year Ended
(Inception) to
Nine Months
(Inception) to
December 31,
December 31,
Ended September 30,
September 30,
2010
2009
2011
2010
2011
(unaudited)
(unaudited)
(unaudited)
(in thousands)
$
(37,830
)
$
(17,099
)
$
(40,662
)
$
(18,397
)
$
(95,591
)
83
6
133
55
222
68
4
802
42
874
320
121
212
441
(18
)
(16
)
(16
)
(34
)
7,000
7,000
2,896
(1,527
)
2,503
1,293
3,872
(1,040
)
(84
)
25
(283
)
(1,099
)
866
534
1,550
352
2,950
644
211
1,379
568
2,234
(34,011
)
(17,955
)
(27,165
)
(16,174
)
(79,131
)
(770
)
(270
)
(445
)
(417
)
(1,485
)
(27,008
)
(27,090
)
(27,008
)
14,957
9,614
10,585
24,571
(12,821
)
(270
)
9,169
(16,922
)
(3,922
)
75,503
75,503
(1,514
)
(1,514
)
29
33
1,052
2
1,114
27,903
27,903
29
75,536
27,441
2
103,006
39
39
(46,803
)
57,311
9,484
(33,094
)
19,992
57,311
10,508
57,311
$
10,508
$
57,311
$
19,992
$
24,217
$
19,992
F-6
Table of Contents
1.
Nature of
Business
2.
Summary
of Significant Accounting Policies
F-7
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.
Summary
of Significant Accounting Policies (Continued)
F-8
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.
Summary
of Significant Accounting Policies (Continued)
Estimated
Useful Life
3 years
6 years
7 years
10 years
F-9
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.
Summary
of Significant Accounting Policies (Continued)
F-10
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2.
Summary
of Significant Accounting Policies (Continued)
3.
Property
and Equipment
September 30,
December 31,
2011
2010
2009
$
437
$
419
$
170
403
287
140
139
49
313
116
45
109
83
79
6
1,485
1,040
270
(222
)
(89
)
(6
)
$
1,263
$
951
$
264
4.
Fair
Value Measurements
Level 1:
Quoted prices in active markets for identical assets or
liabilities. The Companys Level 1 assets and
liabilities consist of money market investments.
Level 2:
Observable inputs other than Level 1 prices, such as quoted
prices for similar assets or liabilities in active markets or
other inputs that are observable or can be corroborated by
observable market data
F-11
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4.
Fair
Value Measurements (Continued)
for substantially the full term of the assets or liabilities.
The Companys Level 2 assets and liabilities include
U.S. government obligations, U.S. government agency
obligations and corporate debt securities.
Level 3:
Unobservable inputs that are supported by little or no market
activity.
Balance
Level 1
Level 2
Level 3
$
18,311
$
18,311
$
$
2,036
2,036
$
20,347
$
18,311
$
2,036
$
$
7,010
$
7,010
$
$
4,109
4,109
3,656
3,656
4,026
4,026
$
18,801
$
7,010
$
11,791
$
$
57,000
$
57,000
$
$
$
57,000
$
57,000
$
$
5.
Available
for Sale Securities
Cost or
Amortized
Fair Market
Cost Value
Value
$
2,030
$
2,036
$
2,030
$
2,036
$
7,663
$
7,675
4,087
4,116
$
11,750
$
11,791
F-12
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5.
Available
for Sale Securities (Continued)
Cost or
Gross
Gross
Amortized
Unrealized
Unrealized
Fair Market
Cost Value
Gains
(Losses)
Value
$
2,030
$
6
$
$
2,036
$
4,095
$
14
$
$
4,109
4,002
24
4,026
3,653
4
(1
)
3,656
$
11,750
$
42
$
(1
)
$
11,791
6.
Convertible
Promissory Notes
Immediately prior to the closing of a Qualified IPO (as defined
below) the Notes shall automatically convert into shares of our
common stock at a per share price equal to the price to the
public for common stock issued in the Qualified IPO. A
Qualified IPO is defined as an initial public
offering with gross proceeds of at least $50 million with a
per share price of at least $26.80 deemed to occur by the
consent of the holders of 55% of the Companys convertible
preferred stock.
Upon the completion of an equity financing other than a
Qualified IPO and at the election of holders of at least 55% of
the outstanding principal amount of the Notes, the Notes will
convert into shares of the securities issued in the equity
financing at the per share price of the securities issued in
such equity financing.
Upon the maturity date of the Notes, they will automatically
convert into either (1) shares of our Series C
convertible preferred stock at $4.62 per share, or
(2) shares of the most recent class of securities issued by
the Company, if the Company has undertaken an offering of such
securities for cash after the issuance of Series C
convertible preferred stock at the price per share to the
purchasers of the new securities.
Upon an event of default, as defined in the agreements governing
the Notes, and at the election of holders of at least 55% of the
outstanding principal amount of the Notes, the Notes will
convert into Series C convertible preferred stock or into a
more recent class of securities issued by the Company for cash
as described in the preceding bullet point.
F-13
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7.
Convertible
Preferred Stock and Stockholders Deficit
F-14
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7.
Convertible
Preferred Stock and Stockholders Deficit
(Continued)
F-15
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
7.
Convertible
Preferred Stock and Stockholders Deficit
(Continued)
8.
Share-Based
Compensation
Weighted-
Weighted-
Average
Average
Remaining
Aggregate
Option Shares
Exercise
Contractual
Intrinsic
Outstanding
Price
Term (Years)
Value
$
311,210
0.29
(114,659
)
0.29
196,551
0.29
9.69
241,201
3.08
(15,518
)
1.84
422,234
$
1.83
9.14
$
612,320
366,750
$
1.74
9.12
$
562,522
105,753
$
0.77
8.85
$
265,377
Weighted-
Weighted-
Average
Average
Remaining
Aggregate
Option Shares
Exercise
Contractual
Intrinsic
Outstanding
Price
Term (Years)
Value
422,234
$
1.83
800,127
5.21
(324,217
)
3.24
(14,191
)
3.08
883,953
$
4.35
9.12
$
5,894,551
760,290
$
4.22
9.07
$
5,170,000
187,714
$
1.10
8.18
$
1,861,273
F-16
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8.
Share-Based
Compensation (Continued)
Period from
April 20, 2009
Nine Months Ended
Year Ended
(Inception) to
September 30, 2011
December 31, 2010
December 31, 2009
$
8.71
$
2.10
$
0.20
$
226,800
$
19,100
$
$
1,050,873
$
28,500
$
33,250
Nine Months Ended
Year Ended December 31,
September 30, 2011
2010
2009
2.21
%
2.10
%
2.33
%
74
%
80
%
80
%
6.0
5.6
5.3
(a)
Risk-free interest rate:
The rate is based on the yield
on the grant date of a zero-coupon U.S. Treasury bond whose
maturity period approximates the options expected term.
(b)
Volatility:
The expected volatility was estimated using
peer data of companies in the biopharmaceutical industry with
similar equity plans.
(c)
Expected life:
The expected life of the award was
estimated using peer data of companies in the biopharmaceutical
industry with similar equity plans.
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8.
Share-Based
Compensation (Continued)
Total
Available
Shares of
Shares or
for Grant or
Common
Options
Future
Stock
Outstanding
Issuance
Reserved
422,234
482,046
904,280
5,044,828
5,044,828
5,044,828
5,044,828
10,919,540
10,919,540
15,287,356
15,287,356
21,431,430
15,769,402
37,200,832
Total
Available
Shares of
Shares or
for Grant or
Common
Options
Future
Stock
Outstanding
Issuance
Reserved
883,953
170,274
1,054,227
5,044,828
5,044,828
5,044,828
5,044,828
10,919,540
10,919,540
15,287,356
15,287,356
7,954,545
7,954,545
21,893,149
23,412,175
45,305,324
9.
Commitments
December 31, 2010
$
665
751
389
203
190
$
2,198
F-18
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10.
License
Agreements
F-19
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10.
License
Agreements (Continued)
11.
Net Loss
Per Common Share
For the
Period
Cumulative
Year Ended
from April 20, 2009
Nine Months
from April 20, 2009
December 31,
(Inception) to
Ended September 30,
(Inception) to
2010
December 31, 2009
2011
2010
September 30, 2011
422
197
884
346
884
7,245
7,245
7,245
7,245
7,245
2,657
2,657
7,667
7,442
10,786
7,591
10,786
12.
Income
Taxes
Year Ended December 31,
2010
2009
(34.0
)%
(34.0
)%
(3.6
)
(4.4
)
(12.9
)
0.3
50.2
38.4
%
%
F-20
Table of Contents
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12.
Income
Taxes (Continued)
December 31,
2010
2009
$
9,386
$
1,562
9,229
5,003
7,186
57
6
25,858
6,571
(25,510
)
(6,541
)
348
30
(321
)
(19
)
(27
)
(11
)
(348
)
(30
)
$
$
13.
Employee
Benefit Plan
F-21
Table of Contents
J.P.
Morgan
Credit Suisse
Leerink
Swann
Table of Contents
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13.
Other
expenses of issuance and distribution.
Amount
to be Paid
$
18,626
16,543
125,000
1,330,000
551,331
300,000
3,500
5,000
30,000
$
2,380,000
Item 14.
Indemnification
of directors and officers.
II-1
Table of Contents
Item 15.
Recent
sales of unregistered securities.
(1)
On May 12, 2009, we sold an aggregate of
1,206,899 shares of our common stock at a price per share
of $0.0029 to accredited investors, for an aggregate purchase
price of $3,500.
(2)
On May 15, 2009, we sold an aggregate of
5,044,828 shares of our
series A-1
convertible preferred stock at a price per share of $2.00
(conversion price of $5.80 per share) to accredited investors,
for an aggregate purchase price of $10,089,656.
II-2
Table of Contents
(3)
On November 9, 2009, we sold an aggregate of
5,044,828 shares of our
series A-2
convertible preferred stock at a price per share of $3.00
(conversion price of $8.70 per share) to accredited investors,
for an aggregate purchase price of $15,134,484.
(4)
On November 18, 2009, we sold an aggregate of
10,919,540 shares of our series B convertible
preferred stock at a price per share of $4.62 (conversion price
of $13.40 per share) to accredited investors, for an aggregate
purchase price of $50,448,275.
(5)
On May 25, 2011, we sold $20,000,000 aggregate principal
amount of our 5% convertible promissory notes due 2012 to
accredited investors, for an aggregate purchase price of
$20,000,000.
(6)
On June 2, 2011, we sold $15,000,000 aggregate principal
amount of our 5% convertible promissory notes due 2012 to Pfizer
Inc., an accredited investor, $7.0 million of which were
issued as consideration for the execution of our license
agreement with Pfizer Inc. for
CO-338
and
$8.0 million of which were issued for an investment of
$8.0 million of cash by Pfizer Inc.
(7)
From April 20, 2009 through October 28, 2011, we
issued an aggregate of 456,041 shares of our common stock
at prices ranging from $0.29 to $3.28 per share to certain of
our employees and directors pursuant to the exercise of stock
options under the Clovis Oncology, Inc. 2009 Equity Incentive
Plan (the 2009 Plan) for an aggregate purchase price
of $1,127,622.
(1)
From April 20, 2009 through October 28, 2011, we
granted stock options to purchase an aggregate of
1,358,054 shares of our common stock with exercise prices
ranging from $0.29 to $11.02 per share, to certain of our
employees and directors under our 2009 Plan in connection with
services provided by such parties to us.
Item 16.
Exhibits
and financial statement schedules.
II-3
Table of Contents
Item 17.
Undertakings.
(a)
The undersigned registrant hereby undertakes to provide to the
underwriters at the closing specified in the underwriting
agreement certificates in such denominations and registered in
such names as required by the underwriters to permit prompt
delivery to each purchaser.
(b)
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
our amended and restated certificate of incorporation or bylaws,
or otherwise, the registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act and will be governed by the final
adjudication of such issue.
(c)
The undersigned registrant hereby undertakes that:
(1)
For purposes of determining any liability under the Securities
Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by
the registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of
this registration statement as of the time it was declared
effective; and
(2)
For the purpose of determining any liability under the
Securities Act of 1933, each post-effective amendment that
contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
II-4
Table of Contents
By:
Title:
President and Chief Executive Officer
President and Chief Executive Officer; Director
(Principal Executive Officer)
October 31, 2011
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer
and Principal Accounting Officer)
October 31, 2011
Director
October 31, 2011
Director
October 31, 2011
Director
October 31, 2011
Director
October 31, 2011
Director
October 31, 2011
Director
October 31, 2011
Director
October 31, 2011
By:
II-5
Table of Contents
Exhibit
Number
Exhibit Description
1
.1
Form of Underwriting Agreement (including form of
lock-up
agreement).
3
.1
Amended and Restated Certificate of Incorporation of Clovis
Oncology, Inc., as amended, as currently in effect.
3
.2
Bylaws of Clovis Oncology, Inc., as currently in effect.
3
.3
Form of Amended and Restated Certificate of Incorporation of
Clovis Oncology, Inc., to be effective upon the closing of this
offering.
3
.4
Form of Amended and Restated Bylaws of Clovis Oncology, Inc., to
be effective upon the closing of this offering.
4
.1
Form of Common Stock Certificate of Clovis Oncology, Inc.
4
.2
Clovis Oncology Inc. Investor Rights Agreement, dated as of
May 15, 2009, between Clovis Oncology, Inc., certain
investors named therein.
5
.1
Opinion of Willkie Farr & Gallagher LLP regarding the
validity of the securities being registered.
10
.1*
Amended and Restated License Agreement, dated as of
November 10, 2010, by and between Clovis Oncology, Inc. and
Clavis Pharma ASA.
10
.2*
Amended and Restated Strategic License Agreement, dated as of
June 16, 2011, by and between Clovis Oncology, Inc. and
Avila Therapeutics, Inc.
10
.3*
License Agreement, dated as of June 2, 2011, by and between
Clovis Oncology, Inc. and Pfizer Inc.
10
.4+
Clovis Oncology, Inc. 2009 Equity Incentive Plan.
10
.5+
Clovis Oncology, Inc. 2011 Equity Incentive Plan.
10
.6+
Form of Clovis Oncology, Inc. 2009 Equity Incentive Plan Stock
Option Agreement.
10
.7+
Form of Clovis Oncology, Inc. 2011 Equity Incentive Plan Stock
Option Agreement.
10
.8+
Employment Agreement, dated as of August 24, 2011, between
Clovis Oncology, Inc. and Patrick J. Mahaffy.
10
.9+
Employment Agreement, dated as of August 24, 2011, between
Clovis Oncology, Inc. and Erle T. Mast.
10
.10+
Employment Agreement, dated as of August 24, 2011, between
Clovis Oncology, Inc. and Gillian C. Ivers-Read.
10
.11+
Employment Agreement, dated as of August 24, 2011, between
Clovis Oncology, Inc. and Andrew R. Allen.
10
.12+
Indemnification Agreement, dated as of May 15, 2009,
between Clovis Oncology, Inc. and John C. Reed.
10
.13+
Indemnification Agreement, dated as of May 15, 2009,
between Clovis Oncology, Inc. and Paul Klingenstein.
10
.14+
Indemnification Agreement, dated as of May 15, 2009,
between Clovis Oncology, Inc. and James C. Blair.
10
.15+
Indemnification Agreement, dated as of May 15, 2009,
between Clovis Oncology, Inc. and Edward J. McKinley.
10
.16+
Indemnification Agreement, dated as of May 15, 2009,
between Clovis Oncology, Inc. and Thorlef Spickschen.
10
.17+
Indemnification Agreement, dated as of May 15, 2009,
between Clovis Oncology, Inc. and M. James Barrett.
Table of Contents
Exhibit
Number
Exhibit Description
10
.18+
Indemnification Agreement, dated as of May 15, 2009,
between Clovis Oncology, Inc. and Brian G. Atwood.
10
.19+
Indemnification Agreement, dated as of May 12, 2009,
between Clovis Oncology, Inc. and Patrick J. Mahaffy.
10
.20+
Indemnification Agreement, dated as of May 12, 2009,
between Clovis Oncology, Inc. and Erle T. Mast.
10
.21+
Indemnification Agreement, dated as of May 12, 2009,
between Clovis Oncology, Inc. and Gillian C. Ivers-Read.
10
.22+
Indemnification Agreement, dated as of May 13, 2009,
between Clovis Oncology, Inc. and Andrew R. Allen.
10
.23+
Restricted Stock Purchase Agreement, dated as of May 12,
2009, between Clovis Oncology, Inc. and Patrick J. Mahaffy.
10
.24+
Restricted Stock Purchase Agreement, dated as of May 12,
2009, between Clovis Oncology, Inc. and Erle T. Mast.
10
.25+
Restricted Stock Purchase Agreement, dated as of May 12,
2009, between Clovis Oncology, Inc. and Gillian C. Ivers-Read.
10
.26+
Restricted Stock Purchase Agreement, dated as of May 12,
2009, between Clovis Oncology, Inc. and Andrew R. Allen.
10
.27*
Companion Diagnostics Agreement, dated as of April 19,
2011, by and between Clovis Oncology, Inc. and Roche Molecular
Systems, Inc.
10
.28*
Master Service Agreement, dated as of March 23, 2010, by
and between Clovis Oncology, Inc. and Ventana Medical Systems,
Inc., together with the related Individual Project Agreement,
dated as of March 25, 2010.
10
.29+
Clovis Oncology, Inc. 2011 Employee Stock Purchase Plan.
10
.30+
Clovis Oncology, Inc. 2011 Cash Bonus Plan.
10
.31+
Offer of Employment Letter, dated August 5, 2011, by and
between Clovis Oncology, Inc. and Steven L. Hoerter.
21
.1
List of Subsidiaries of Clovis Oncology, Inc.
23
.1
Consent of Ernst & Young LLP.
23
.2
Consent of Willkie Farr & Gallagher LLP (included in
Exhibit 5.1).
24
.1
Power of Attorney.
+
Indicates management contract or compensatory plan.
*
Confidential treatment has been requested with respect to
certain portions of this exhibit. Omitted portions have been
filed separately with the Securities and Exchange Commission.
Previously filed.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Very truly yours,
CLOVIS ONCOLOGY, INC. |
||||
By: | ||||
Name: | ||||
Title: | ||||
J. P. MORGAN SECURITIES LLC | ||||
|
||||
By:
|
||||
|
|
|||
|
||||
CREDIT SUISSE SECURITIES (USA) LLC | ||||
|
||||
By:
|
||||
|
|
|||
|
Title: |
Underwriter | Number of Underwritten Shares | Number of Directed Shares | ||||||
J. P. Morgan Securities LLC
|
||||||||
Credit Suisse Securities
(USA) LLC
|
||||||||
Leerink Swann LLC
|
||||||||
|
||||||||
Total
|
||||||||
|
[
NAME OF STOCKHOLDER
]
|
||||
By: | ||||
Name: | ||||
Title: |
-2-
-3-
-4-
-5-
-6-
-7-
-8-
-9-
-10-
-11-
-12-
-13-
-14-
-15-
-16-
-17-
-18-
-19-
-20-
/s/ Patrick J. Mahaffy | ||||
Patrick J. Mahaffy, | ||||
President and Chief Executive Officer |
-21-
The total number of shares of stock that the Corporation shall have authority to issue is 97,922,093 shares, consisting of 58,000,000 shares of Common Stock, $0.001 par value per share, and 39,922,093 shares of Preferred Stock, $0.001 par value per share. The Preferred Stock will be issued in four series. The first Series of Preferred Stock shall be designated Series A-1 Preferred Stock and shall consist of 5,044,828 shares. The second Series of Preferred Stock shall be designated Series A-2 Preferred Stock and shall consist of 5,044,828 shares. The third Series of Preferred Stock shall be designated Series B Preferred Stock and shall consist of 10,919,540 shares. The fourth Series of Preferred Stock shall be designated Series C Preferred Stock and shall consist of 18,912,897 shares. |
/s/ Patrick J. Mahaffy | ||||
Name: | Patrick J. Mahaffy | |||
Title: | President and Chief Executive Officer | |||
-2-
/s/ Patrick J. Mahaffy | ||||
Name: | Patrick J. Mahaffy | |||
Title: | President and Chief Executive Officer | |||
-3-
Re: | Registration Statement on Form S-1 |
- 2 -
Page | |||||
1.
|
Definitions | 1 | |||
|
|||||
2.
|
Collaboration Program | 8 | |||
|
|||||
3.
|
Governance | 9 | |||
|
|||||
4.
|
Development and Commercialization | 11 | |||
|
|||||
5.
|
License Grants | 12 | |||
|
|||||
6.
|
Payments and Royalties | 14 | |||
|
|||||
7.
|
Ownership of Collaboration Program Know-How | 21 | |||
|
|||||
8.
|
Patent Prosecution and Maintenance | 22 | |||
|
|||||
9.
|
Patent Enforcement and Defense | 24 | |||
|
|||||
10.
|
Confidentiality | 26 | |||
|
|||||
11.
|
Warranties; Limitations of Liability; Indemnification | 28 | |||
|
|||||
12.
|
Term and Termination | 31 | |||
|
|||||
13.
|
General Provisions | 34 |
Avila Patents as of the Effective Date
Targets
Collaboration Plan
Initial Agreed Compound Profile
Proposed Prosecution and Maintenance Activities for Subject Patents
Joint Press Release
1
2
3
4
5
6
Defined Term
|
Location | ||||
Additional Reporting Period
|
Section 4.5 | ||||
Agreed Compound Profile
|
Section 2.1(c) | ||||
Agreement
|
Preamble | ||||
A&R Date
|
Preamble | ||||
Avila
|
Preamble | ||||
Avila Indemnitees
|
Section 11.6(a) | ||||
Avila Program Director
|
Section 3.1 | ||||
Clovis
|
Preamble | ||||
Clovis Indemnitees
|
Section 11.6(b) | ||||
Clovis Program Director
|
Section 3.1 | ||||
Collaboration Plan
|
Section 2.1(b) | ||||
Collaboration Program Term
|
Section 2.1(c) | ||||
Competitive Infringement
|
Section 9.1 | ||||
Confidentiality Agreement
|
Section 10.4 | ||||
Confidential Information
|
Section 10.1(a) | ||||
Cost Estimate
|
Section 6.4(e)(i) | ||||
Disclosing Party
|
Section 10.1(a) | ||||
Drug Company
|
Section 13.3 | ||||
Effective Date
|
Preamble | ||||
Expert
|
Section 13.1(d)(i) | ||||
First Line Notice
|
Section 6.4(e)(i) | ||||
Hatch-Waxman Time Period
|
Section 9.2(a)(iii) | ||||
Indemnification Claim Notice
|
Section 11.6(c) | ||||
Indemnified Party
|
Section 11.6(c) | ||||
Industry Transaction
|
Section 13.3 | ||||
Issuing Party
|
Section 10.3(b) | ||||
JAMS
|
Section 13.1(c) | ||||
Joint Collaboration Program IP
|
Section 7.2(b) | ||||
JSC
|
Section 3.2(a) | ||||
Losses
|
Section 11.6(a) | ||||
Milestone Event
|
Section 6.3(a) | ||||
Milestone Payment
|
Section 6.3(a) | ||||
Other Product
|
Section 5.6 | ||||
Option Exercise Notice
|
Section 6.4(e)(i) | ||||
Original Agreement
|
Preamble | ||||
Other Patents
|
Section 8.1 | ||||
Party and Parties
|
Preamble | ||||
Program Directors
|
Section 3.1 | ||||
Receiving Party
|
Section 10.1(a) | ||||
Release
|
Section 10.3(b) | ||||
Reviewing Party
|
Section 10.3(b) | ||||
7
Defined Term
|
Location | ||||
Sole Collaboration Program IP
|
Section 7.2(b) | ||||
Specific Patent
|
Section 8.1(b) | ||||
Subject Patent
|
Section 8.1 | ||||
Term
|
Section 12.1 | ||||
Third Party Claims
|
Section 11.6(a) | ||||
8
9
10
11
12
13
14
Milestone Event
|
Milestone Payment | ||||
Upon the effectiveness of the first IND filing for Licensed Product
|
Four Million Dollars (U.S.$4,000,000) | ||||
Upon start of the first Phase 2 Study for Licensed Product
|
*** | ||||
Upon acceptance of the filing of the first NDA in the United States or MAA in the EU for Licensed Product
a) First of the United States or EU
b) Second of the United States or EU
|
*** *** |
||||
Upon the first approval of an NDA for Licensed
Product by the FDA
|
*** |
||||
Upon the first approval of an MAA for Licensed
Product by the EMA
|
*** |
||||
W. Upon start of the first Phase 3 Study (or, if
earlier, as such times as the first Phase 2 Study
is determined to be the pivotal study) for
Licensed Product in a Second Indication*
|
*** |
||||
X. Upon acceptance of the filing of an NDA in the
United States or MAA in the EU for Licensed
Product in a Second Indication*
|
*** |
||||
Upon the approval of an NDA for Licensed Product
by the FDA in a Second Indication
|
*** |
||||
Upon the approval of an MAA for Licensed Product
by the EMA in a Second Indication
|
*** |
||||
15
Milestone Event | Milestone Payment | ||||
Upon Net Sales in any Calendar Year arising from the
worldwide sale or distribution of all Licensed Products
exceeding *** for the first time
|
*** | ||||
Upon Net Sales in any Calendar Year arising from the
worldwide sale or distribution of all Licensed Products
exceeding *** for the first time
|
*** | ||||
Upon Net Sales in any Calendar Year arising from the
worldwide sale or distribution of all Licensed Products
exceeding *** for the first time
|
*** | ||||
Milestone Event | Milestone Payment | ||||
Start of a registration study for Japan for Licensed
Product (as such study is agreed with Japanese health
authorities)
|
*** | ||||
Upon the filing of the first regulatory application for
Regulatory Approval in Japan of Licensed Product
|
*** | ||||
Upon the first Regulatory Approval in Japan of Licensed
Product
|
*** | ||||
16
Annual Worldwide Net Sales | Royalty Rate | ||||||
of all Licensed Products | |||||||
Up to ***
|
*** | ||||||
From *** up to ***
|
*** | ||||||
From *** up to ***
|
*** | ||||||
Over ***
|
*** | ||||||
Annual Net Sales for Asia | Royalty Rate | ||||||
of all Licensed Products | |||||||
Up to ***
|
*** | ||||||
From *** up to ***
|
*** | ||||||
From *** up to ***
|
*** | ||||||
Over ***
|
*** | ||||||
Annual Net Sales Worldwide Other than for Asia | Royalty Rate | ||||||
of all Licensed Products | |||||||
Up to ***
|
*** | ||||||
From *** up to ***
|
*** | ||||||
From *** up to ***
|
*** | ||||||
Over ***
|
*** | ||||||
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
If to Avila:
|
Avila Therapeutics, Inc. | |
|
100 Beaver Street | |
|
Waltham, MA 02453 | |
|
Attention: Chief Executive Officer | |
|
Facsimile: 781-891-0069 | |
|
||
With a copy to:
|
Goodwin | Procter LLP | |
|
53 State Street | |
|
Boston, MA 02109 | |
|
Attention: Kingsley L. Taft, Esq. | |
|
Facsimile: 617-523-1231 | |
|
||
If to Clovis:
|
Clovis Oncology, Inc. | |
|
2525 28 th Street | |
|
Boulder, CO 80301 | |
|
Attention: Chief Executive Officer | |
|
Facsimile: 303-245-0361 | |
|
||
With a copy to:
|
Willkie Farr & Gallagher LLP | |
|
787 Seventh Avenue | |
|
New York, NY 10019 | |
|
Attention: Peter H. Jakes | |
|
Facsimile: (212) 728-8111 |
37
38
By:
|
/s/ KATRINE BOSLEY | |||
|
(Signature) | |||
|
||||
Name:
|
Katrine Bosley | |||
|
||||
Title:
|
President and CEO | |||
|
||||
Date:
|
June 16, 2011 | |||
|
||||
Clovis Oncology, Inc. | ||||
|
||||
By:
|
/s/ PATRICK J. MAHAFFY | |||
|
(Signature) | |||
|
||||
Name:
|
Patrick J. Mahaffy | |||
|
||||
Title:
|
President and CEO | |||
|
||||
Date:
|
June 16, 2011 |
|
|||||||||||||||||
*** | |||||||||||||||||
|
|||||||||||||||||
|
|||||||||||||||||
Title | Appln | Country | Inventors | Status as of the | |||||||||||||
Type | Effective Date | ||||||||||||||||
|
|||||||||||||||||
***
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | ||||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
a
|
|||||||||||||||||
*** | |||||||||||||||||
|
|||||||||||||||||
|
|||||||||||||||||
Title | Appln | Country | Inventors | Status as of the | |||||||||||||
Type | Effective Date | ||||||||||||||||
|
|||||||||||||||||
***
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | ||||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
|
*** | *** | *** | *** | |||||||||||||
|
|||||||||||||||||
b
a
a
Collaboration Plan Budget (000s) | ||||||||
|
||||||||
2010 | 2011 | |||||||
|
||||||||
Reimbursement for Avila FTEs
|
$ | * | ** | $ | * | ** | ||
|
||||||||
Clovis Internal Expenses
|
* | ** | * | ** | ||||
|
||||||||
External Costs
|
||||||||
Discovery
|
* | ** | * | ** | ||||
Non-clinical
|
* | ** | * | ** | ||||
CMC
|
* | ** | * | ** | ||||
Diagnostics
|
* | ** | * | ** | ||||
Clinical, Regulatory and Other
|
* | ** | * | ** | ||||
|
||||||||
Total
|
* | ** | * | ** |
b
Attribute | Criteria (method) | Desired Limit |
a
a
|
Avilas oral, small molecule program targets cancer-causing mutant forms of the EGF
receptor (EGFR)
|
||
|
Innovative treatment approach for non-small cell lung cancer (NSCLC) patients with
disease resistant to current therapy
|
||
|
Potency against key disease mutation, T790M, while minimizing activity against the
wild-type (normal) EGFR to increase therapeutic index and avoid side effects of current
standard of care
|
||
|
Clovis to lead accelerated clinical development plan including companion diagnostic to
prospectively identify T790M-positive NSCLC patients
|
1 |
Tarceva and Iressa are registered trademarks
of F. Hoffman-La Roche and AstraZeneca, respectively.
|
a
b
c
1. |
DEFINITIONS
|
1.1. |
Affiliate
means, with respect to a Party, any Person that controls, is
controlled by, or is under common control with that Party. For the purpose of this
definition,
control
shall refer to: (a) the possession, directly or indirectly, of
the power to direct the management or policies of an entity, whether through the
ownership of voting securities, by contract or otherwise, or (b) the ownership,
directly or indirectly, of fifty percent (50%) or more of the voting securities of such
entity.
|
||
1.2. |
Applicable Laws
means all applicable laws, statutes, rules, regulations and
guidelines, including, without limitation, all good manufacturing practices and all
applicable standards or guidelines promulgated by the appropriate Regulatory Authority.
|
||
1.3. |
Business Day
means any day other than a Saturday, a Sunday or a day on which
commercial banks located in New York, New York are authorized or required by law to
remain closed.
|
||
1.4. |
Calendar Quarter
means the respective periods of three (3) consecutive
calendar months ending on March 31, June 30, September 30 and December 31.
|
||
1.5. |
Calendar Year
means any twelve (12) month period commencing on January 1.
|
1.6. |
Collaboration Agreement
means the Collaboration Agreement between PFIZER, MDx
Health, SA, University of Newcastle upon Tyne and Cancer Research Technology Limited
(formerly Cancer Research Campaign Technology Limited) entered into as of
14
th
December 2010.
|
||
1.7. |
Collaboration and License Agreement
means the Collaboration and License
Agreement entered into as of 23
rd
September 1997 between Cancer Research
Campaign Technology Limited, University of Newcastle upon Tyne and Agouron
Pharmaceuticals, Inc (now an Affiliate of PFIZER), as amended by a First Amendment to
Collaboration and License Agreement dated 23 January 2000, as amended by a Second
Amendment to Collaboration and License Agreement dated 23 January 2001, and as amended
by an Amendment dated 1 January 2006 between Cancer Research Technology Limited
(formerly Cancer Research Campaign Technology Limited) and PFIZER.
|
||
1.8. |
Commercialize
or
Commercialization
means to manufacture for sale, market,
promote, otherwise offer for sale, distribute, and sell.
|
||
1.9. |
Commercially Reasonable Efforts
means, with respect to the Development or
Commercialization of a Product, that level of efforts and resources commonly dedicated
in the research-based pharmaceutical industry by a company to the development or
commercialization, as the case may be, of a product of similar commercial potential at
a similar stage in its lifecycle, in each case taking into account issues of safety and
efficacy, product profile, the proprietary position, the then current competitive
environment for such product and the likely timing of such products entry into the
market, the regulatory environment and status of such product, and other relevant
scientific, technical and commercial factors.
|
||
1.10. |
Compound
means the compound designated by PFIZER as PF-01367338, that
inhibits poly (ADP-ribose) polymerase (PARP) and all salts, polymorphs and
formulations thereof.
|
||
1.11. |
Control
or
Controlled
means, with respect to any Intellectual Property
Rights, the legal authority or right (whether by ownership, license or otherwise) of a
Party to grant a license or a sublicense of or under such Intellectual Property Rights
to the other Party without breaching the terms of any agreement with a Third Party.
For clarity, if a Party only can grant a license or sublicense to Intellectual
Property, or provide access to a material or document, of a limited scope due to an
encumbrance imposed by a Third Party, Control or Controlled shall be construed to
so limit the license or sublicense to such Intellectual Property or the provision of,
or provision of access to, such materials or documents (as applicable).
|
||
1.12. |
Develop
or
Development
means to conduct research and development
activities (including related manufacturing activities) under conditions designed to
yield data suitable for inclusion in an application for Regulatory Approval of a
Product by the FDA or a comparable agency in another country or regulatory jurisdiction
within the Territory.
|
- 2 -
1.13. |
Distributor
means a Third Party, other than a sublicensee of LICENSEE, that
(i) purchases any Products in finished form from or at the direction of LICENSEE or any
of its Affiliates or sublicensees, and (ii) has the right to Commercialize such
Products in one or more regions, or has an option to do the foregoing.
|
||
1.14. |
Existing Trials
means the PFIZER 1014 Study and the Other Compound Studies.
|
||
1.15. |
FDA
means the United States Food and Drug Administration, or a successor
federal agency thereto.
|
||
1.16. |
Field
means all human and animal therapeutic, prophylactic and diagnostic
uses of the Product, including the treatment of human disease with the Product.
|
||
1.17. |
First Commercial Sale
means with respect to a Product, the first sale for
use or consumption of the Product following receipt of Regulatory Approval for such
Product in a country in the Territory.
|
||
1.18. |
GAAP
means the generally accepted accounting principles in the United
States, consistently applied.
|
||
1.19. |
IND
means: (a) an investigational new drug application filed with the FDA
for authorization for the investigation of the Product, and (b) any of its foreign
equivalents as filed with the applicable Regulatory Authorities in other countries or
regulatory jurisdictions in the Territory, as applicable.
|
||
1.20. |
Indication
for a Product means the use of such Product for treating a
particular disease or medical condition.
|
||
1.21. |
Intellectual Property Rights
means all trade secrets, copyrights, patents
and other patent rights, Trademarks, moral rights, know-how and any and all other
intellectual property or proprietary rights now known or hereafter recognized in any
jurisdiction.
|
||
1.22. |
Know-How
means all confidential and proprietary information and data
Controlled by PFIZER as of the Effective Date related to the Compound or related to the
Product as it exists on the Effective Date contained within the Documentation
transferred pursuant to Section 3.
|
||
1.23. |
Licensed Technology
means collectively, the Patent Rights and Know-How.
|
||
1.24. |
MAA
means a Marketing Authorization Application filed with the EMA under the
centralized European procedure (including amendments and supplements thereto).
|
||
1.25. |
Milestone
means each milestone as set forth in Sections 5.1.2 and 5.1.3.
|
||
1.26. |
NDA/BLA
means: (a) a new drug application or a new biologic
license application filed with the FDA for authorization for marketing the Product, and
(b)
|
- 3 -
any of its foreign equivalents as filed with the applicable Regulatory Authorities
in other countries or regulatory jurisdictions in the Territory, as applicable.
|
|||
1.27. |
Net Sales
means the gross amount invoiced by or on behalf of LICENSEE, its
Affiliates and their respective sublicensees (each a Selling Party) for sales of the
Product, less the following deductions if and to the extent they are included in the
gross invoiced sales price of the Product or otherwise directly incurred by LICENSEE,
its Affiliates and their respective sublicensees with respect to the sale of the
Product: (a) rebates, quantity and cash discounts, and other usual and customary
discounts to customers, (b) taxes and duties paid, absorbed or allowed which are
directly related to the sale of the Product, (c) credits, allowances, discounts and
rebates to, and chargebacks for spoiled, damaged, out-dated, rejected or returned
Product, (d) actual freight and insurance costs incurred in transporting the Product to
customers, provided that in no event shall deductions for freight and insurance exceed
three percent (3%) of the gross amount invoiced, (e) discounts or rebates or other
payments required by Applicable Law, including any governmental special medical
assistance programs, and (f) customs duties, surcharges and other governmental charges
incurred in connection with the exportation or importation of the Product.
Subsections (a) through (f) shall be collectively referred to as
Deductions
.
|
||
The following principles shall apply in the calculation of Net Sales:
|
1.27.1. Products will be considered sold when a sale by a Selling Party is
recognized in accordance with revenue recognition policies mandated by GAAP.
|
|||
1.27.2. Nothing herein will prevent a Selling Party from selling, distributing or
invoicing Products at a discounted price for shipments to Third Parties in
connection with clinical studies, compassionate sales, or an indigent program or
similar bona fide arrangements in which the Selling Party agrees to forego a normal
profit margin for good faith business reasons.
|
|||
1.27.3. A sale or transfer of Products between any of the Selling Parties will not
result in any Net Sales, and Net Sales instead will be based on subsequent sales or
distribution to a non-Selling Party, unless such Products are consumed by a Selling
Party in the course of its commercial activities. Sales to Distributors shall be
treated identically to any other sales to Third Parties
|
|||
1.27.4. In the case of any sale or other disposal of Product for non-cash
consideration, Net Sales shall be calculated as the fair market price of the
Product in the country of sale or disposal. Notwithstanding the foregoing,
provision of the Product for the purpose of conducting pre-clinical or clinical
research shall not be deemed to be a sale, so long as the Product is provided at a
price which does not exceed the reasonably estimated cost of production and
distribution thereof.
|
|||
1.27.5. Net Sales means, in the case of Combination Product which is defined as
any pharmaceutical product containing: (a) the Product and (b) one or more other
active therapeutically active ingredients, which is not a Product:
|
- 4 -
(a) |
if LICENSEE and/or its Affiliates and/or any Third Party
separately sells in such country during such year when it sells such
Combination Product both (1) one or more Products as a single chemical entity,
and (2) other products containing active ingredient(s) as a single entity that
are also contained in such Combination Product, the Net Sales attributable to
such Combination Product during such year shall be calculated by multiplying
actual Net Sales of such Combination Product by the fraction A/(A+B) where: A
is LICENSEEs (or its Affiliates or Third Parties, as applicable) average Net
Sales price per daily dose during such year for each Product in such
Combination Product in such country and B is the sum of the average of
LICENSEEs (or its Affiliates or Third Parties, as applicable) Net Sales price
per daily dose during such year in such country, for each product(s)
containing, the active ingredient(s) in such Combination Product (other than
the Product);
|
||
(b) |
if LICENSEE and/or its Affiliates and/or any Third Party
separately sells, in such country during such year when it sells such
Combination Product, one or more Products as a single chemical entity but do
not separately sell, in such country, other products containing active
ingredient(s) that are also contained in such Combination Product, the Net
Sales attributable to such Combination Product during such year shall be
calculated by multiplying the Net Sales of such Combination Product by the
fraction A/C where: A is LICENSEEs (or its Affiliates or Third Parties, as
applicable) average Net Sales price per daily dose during such year for each
Product in such Combination Product in such country, and C is LICENSEEs (or
its Affiliates or Third Parties, as applicable) average Net Sales price per
daily dose during such year for the Combination Product in such country; and
|
||
(c) |
if LICESEE and/or its Affiliates and/or Third Parties do not
separately in such country during such year sell each Product contained in the
Combination Product, then the Net Sales attributable to such Combination
Product shall be D/(D+E) where D is the fair market value of the portion of the
Combination Product that contains the Product and E is the fair market value of
the portion of the Combination Product containing the other active
ingredient(s) included in such Combination Product, as such fair market values
are determined by mutual agreement of the parties.
|
||
1.27.6. Net Sales shall be calculated in accordance with GAAP generally and
consistently applied.
|
1.28. |
Other Compound Studies
means those studies in addition to the Pfizer 1014
Study that are listed in Schedule B-1.
|
||
1.29. |
Patent Rights
means all of PFIZERS rights in patents and patent
applications listed in Schedule A in so far as they related to the Compound, and all
continuations, divisionals and renewals of such patents and patent applications, any
continuations-in-part (to the extent the claims thereof are entirely supported by the
patents and patent applications to which it claims priority), and any other subsequent
filings in
|
- 5 -
any country in the Territory, in each case to the extent claiming priority from such
patents and patent applications, all letters of patent granted with respect to any
of the foregoing, and all patents of addition, restorations, extensions,
supplementary protection certificates, registration or confirmation patents,
reissues and re-examinations of any of the foregoing. Patent Rights shall also
include any patent applications or patents referred to in Section 14.1.4 of this
Agreement.
|
|||
1.30. |
Person
means an individual, corporation, partnership, limited liability
company, trust, business trust, association, joint stock company, joint venture, pool,
syndicate, sole proprietorship, unincorporated organization, governmental authority or
any other form of entity not specifically listed herein.
|
||
1.31. |
PFIZER 1014 Study
means the PFIZER sponsored clinical study of the Compound
known as A4991014.
|
||
1.32. |
Product
means any and all pharmaceutical, diagnostic or veterinary products:
(i) for which the manufacture, use, offer for sale, sale, import or export would, if
not for the license granted to LICENSEE, infringe a valid claim of a Patent Right in
the country for which such products are used, offered for sale, sold, manufactured or
imported; or (ii) that contain the Compound.
|
||
1.33. |
Regulatory Approval
means, with respect to the Product in any country or
jurisdiction, any approval (including where required, pricing and reimbursement
approvals), registration, license or authorization that is required by the applicable
Regulatory Authority to market and sell the Product in such country or jurisdiction.
|
||
1.34. |
Regulatory Authority
means any governmental agency or authority responsible
for granting Regulatory Approvals for the Product in the Territory.
|
||
1.35. |
Regulatory Filings
means, with respect to the Product, any submission to a
Regulatory Authority of any appropriate regulatory application, including, without
limitation, any IND, NDA/BLA, any submission to a regulatory advisory board, any
marketing authorization application, and any supplement or amendment thereto.
|
||
1.36. |
Royalty Term
means, on a Product-by-Product and country-by country basis,
the period commencing on the First Commercial Sale of the Product in a country and
expiring upon the later of: (a) expiration or abandonment of the last Valid Claim of
the Patent Rights which covers the Use of the Product in such country , or (b) ten (10)
years following the date of First Commercial Sale of the Product in such country.
|
||
1.37. |
Territory
means worldwide.
|
||
1.38. |
Third Party
means any Person other than a Party or an Affiliate of a Party.
|
||
1.39. |
Trademarks
has the meaning as set forth in Section 13.4.5(c).
|
||
1.40. |
Use
means to make, have made, use, sell, offer for sale, and import and export.
|
- 6 -
1.41. |
Valid Claim
means either: (a) a claim of an issued and unexpired patent
included within the Patent Rights, which has not been permanently revoked or declared
unenforceable or invalid by an unreversed and unappealable or unreversed and unappealed
decision of a court or other appropriate body of competent jurisdiction, or (b) a claim
of a pending patent application included within the Patent Rights, which claim was
filed in good faith and has not been abandoned or finally disallowed without the
possibility of appeal or refiling of such application.
|
2. |
LICENSE GRANT
|
2.1. |
License Grant.
|
||
2.1.1.
Patent Rights
. Subject to the terms and conditions of this Agreement PFIZER
hereby grants to LICENSEE an exclusive (even as to PFIZER except as expressly
provided in Section 2.3 below (Retained Rights)), sublicensable (subject to
Section 2.2), royalty-bearing right and license under the Patents Rights to Use the
Product in the Field within the Territory. For clarity, the license rights include
an exclusive sub-license of PFIZERs rights under the Collaboration and License
Agreement and the Collaboration Agreement.
|
|||
2.1.2.
Know How
. Subject to the terms and conditions of this Agreement including
the Retained Rights, PFIZER hereby grants to LICENSEE a non-exclusive,
sublicensable (subject to Section 2.2), royalty-bearing right and license to use
the Know-How for the purpose of the Development and Commercialization of the
Product in the Field within the Territory.
|
|||
2.1.3.
Affiliates
. To the extent that any of the Licensed Technology is Controlled
by an Affiliate of PFIZER, then promptly following the Effective Date, PFIZER shall
procure that such Affiliate undertakes all necessary actions to give effect to the
licenses granted under this Section. In addition, during the course of the
implementation by the Parties of the Transition Plan, to the extent (i) requested
by LICENSEE, (ii) reasonably practicable and (iii) any such assignment would not
jeopardize any intellectual property rights of PFIZER, the Parties will seek to
obtain the consent of the Third Party to the Collaboration Agreement and the
Collaboration and License Agreement to an assignment of one or both of such
agreements to LICENSEE.
|
|||
2.2. |
Sublicense Rights
. LICENSEE may, subject to Section 2.6, sublicense the rights
granted to it by PFIZER under this Agreement to any of its Affiliates or to any Third
Party which has reasonably demonstrated the necessary financial and technical capacity
to carry out the LICENSEEs obligations under this Agreement. Any and all sublicenses
shall be subject to the following requirements:
|
||
2.2.1. All sublicenses shall be subject to and consistent with the terms and
conditions of this Agreement and shall: (a) preclude the assignment or further
sub-licensing of such sublicense without the prior written approval of PFIZER
(
provided
,
however
, that the foregoing restriction on further
sublicensing shall not apply if the sub-licensee is a publicly-traded company with
a market capitalization
|
- 7 -
of at least $1 Billion at the time of the proposed transaction), and (b) include
PFIZER as a third party beneficiary under the sublicense with the right to enforce
the terms of such sublicense. In no event shall any sublicense relieve LICENSEE of
any of its obligations under this Agreement.
|
|||
2.2.2. LICENSEE shall furnish to PFIZER a true and complete copy of each sublicense
agreement and each amendment thereto, within thirty (30) days after the sublicense
or amendment has been executed.
|
2.3. |
Retained Rights
. LICENSEE acknowledges and agrees that PFIZER retains the
right to make, have made and use and have used the Licensed Technology for all internal
research purposes and LICENSEE hereby grants to PFIZER a worldwide, irrevocable,
non-exclusive, fully paid up license (with the right to sub-license to any Affiliate
without the need for LICENSEES consent) to such Licensed Technology for such purposes
without the consent of LICENSEE.
|
||
2.4. |
Residuals
. PFIZER may use for any purpose the Residuals resulting from access
to or work with the Compound, Product and Know-How. As used herein,
Residuals
means
information in non-tangible form which may be retained by persons who have had access
to the Compound, Product and Know-How, including ideas, concepts, know-how or
techniques contained therein.
|
||
2.5. |
No Additional Rights
. Nothing in this Agreement shall be construed to confer
any rights upon LICENSEE by implication, estoppel, or otherwise as to any technology or
Intellectual Property Rights of PFIZER or it Affiliates other than the Licensed
Technology.
|
||
2.6. |
Rights of First Negotiation
. If LICENSEE decides, other than as part of a
merger or sale of LICENSEE as a whole or a sale of substantially all of the assets of
LICENSEE , to seek to sublicense the Licensed Technology to a Third Party in any one of
the following territories: US, UK, Germany, France, Spain, Italy, China or Japan for
Development and/or Commercialization of a Product, then LICENSEE shall first notify
PFIZER in writing of its plans for such a sublicense, including the specific territory
to be covered (Transaction Notice). If PFIZER desires to evaluate whether to seek
such sublicense in such notified territory (the Subject Territory) for itself, then
PFIZER shall notify LICENSEE within thirty (30) days of receipt of the Transaction
Notice (Negotiation Notice). For the sixty (60) days following receipt of the
Negotiation Notice (Exclusivity Period), PFIZER shall have the exclusive right to
negotiate an exclusive sublicense to the Product in the Subject Territory with
LICENSEE, such negotiations to include at least one face-to-face meeting and to be
conducted on a good faith basis using reasonable efforts. If PFIZER does not provide
such Negotiation Notice to LICENSEE, does not provide a written proposal during the
Exclusivity Period, or the two Parties do not come to agreement during the Exclusivity
Period, then LICENSEE shall be free to pursue such a sublicense with any Third Party;
provided, however,
that LICENSEE shall not be entitled to subsequently grant
Development or Commercialization rights to a Third Party for the Subject Territory
unless, in the reasonable and informed good faith judgment of the Board of Directors of LICENSEE, the terms and
|
- 8 -
provisions of the proposed agreement with such Third Party
are, in the aggregate, more favorable to LICENSEE than the terms and provisions set
forth in the last offer submitted in writing by PFIZER to LICENSEE in the course of
the negotiations between PFIZER and LICENSEE.
|
3. |
TRANSFER ACTIVITIES
|
3.1. |
Transition Coordinators
. Each Party shall appoint one Transition coordinator
(each a Transition Coordinator and collectively, the Transition Coordinators) who
shall serve as the principal contacts for PFIZER and LICENSEE for matters relating to
the implementation of the Technical Transfer Transition Plan (Transition Plan) and
shall have the authority from the Party that designated such Coordinator to modify the
Transition Plan. The initial Transition Coordinator for LICENSEE
shall be ***,
and the initial Transition Coordinator for PFIZER shall be ***. Any
Transition Coordinator may be replaced by the Party so appointing him or her from time
to time upon notice to the other Party.
|
||
The Transition Coordinators shall meet, in person or by telephone, not less than
once every week during the first three (3) months of the implementation of the
Transition Plan to (i) review the progress being made under the Transition Plan,
(ii) discuss future activities to be conducted under the Transition Plan and the
extent to which additional resources need to be applied by either Party or both to
complete the transition, and (iii) review and agree upon any necessary or desired
revisions to the Transition Plan. Upon the request of either Transition
Coordinator, other personnel from a Party may attend and participate in such
meetings. It is the objective of the Parties, working through their Transition
Coordinators, and in accordance with the terms and conditions of this Agreement
including the Schedules hereto, to insure as smooth and efficient a transition from
PFIZER to LICENSEE as reasonably practical of all relevant documentation, materials,
contractual obligations and regulatory responsibilities related to the Compound, the
Product and the Existing Trials.
|
|||
3.2. |
Initial Transfer
. PFIZER shall use reasonable efforts to: (a) make available
to LICENSEE currently available records as set forth in
Schedule B
which exist
and are Controlled by PFIZER as of the Effective Date and are necessary for LICENSEE to
continue Developing the Product (collectively,
Documentation
), and (b) perform other
activities with respect to Regulatory Filings and/or Regulatory Approvals as set forth
in
Schedule B
(where the activities under subsections (a) and (b) shall be
collectively referred to as
Transfer Activities
). PFIZER shall use reasonable
efforts to perform the Transfer Activities and complete such Activities within the time
periods specified in
Schedule B
, and PFIZER shall provide written notice to
LICENSEE upon completion of such efforts (
PFIZER Transfer Notice
).
|
||
3.3. |
Existing Trials and Agreements.
In connection with its efforts to Develop the
Product, LICENSEE shall assume all financial responsibility, at its sole cost, for the
Existing Trials with effect from the Effective Date. For clarity, the obligations in
the preceding sentence include the assumption of financial responsibility for
outstanding financial obligations related to the Existing Trials as particularized in
the Third Party
|
- 9 -
Agreements set out in
Schedule B-
1. In addition, LICENSEE shall assume
operational responsibility for the Existing Trials under the time lines and
mechanisms set out in Section 4.3.1 and Schedule B and the Transition Plan that will
be developed under the terms of Schedule B.
|
|||
3.4. |
Follow-up Period
. For a period of six (6) months following LICENSEEs receipt
of the PFIZER Transfer Notice, if LICENSEE discovers or learns of any incomplete
Transfer Activities, LICENSEE shall provide written notice to PFIZER, and PFIZER shall
use reasonable efforts to perform such Transfer Activities provided that PFIZERs
efforts to engage in the Transfer Activities under this Section 3 shall not exceed a
total of forty (40) hours.
|
4. |
DEVELOPMENT, MANUFACTURING, REGULATORY AND COMMERCIALIZATION
|
4.1. |
Development
.
|
||
4.1.1. LICENSEE shall itself, or through its Affiliates or sublicensees, use
Commercially Reasonable Efforts to Develop the Product in the Territory, and
LICENSEE shall undertake all Development activities at its sole expense. Without
limiting the foregoing, in connection with its efforts to Develop the Product,
LICENSEE shall bear all responsibility and expense for filing Regulatory Filings in
LICENSEEs name and obtaining Regulatory Approval for the Product. LICENSEEs
Development activities will be undertaken in accordance with a Development plan
(the Development Plan), the initial Development Plan being attached to the
Agreement as Schedule D (the Initial Development Plan). PFIZER acknowledges that
(a) the Initial Development Plan has been based on the due diligence carried out by
LICENSEE prior to the Effective Date, largely utilizing information furnished to
LICENSEE by PFIZER; (b) such Plan is predicated, in part, on clinical data that has
not yet been generated; and (c) such Plan is subject to revision from time to time
to take into account, among other factors: safety or efficacy concerns, matters
related to Patent coverage, or issues related to present or future marketability or
profitability, including existing or anticipated competition, and that such
revisions may include seeking regulatory approval for different indications than
are contained in the Initial Development Plan. Each Development Plan or amendment
shall be treated by both Parties as a good faith statement of LICENSEEs intentions
for the Development of the Product, but such Development Plan shall not be deemed
to be a contractual commitment by LICENSEE to undertake all of the efforts
described in such Plan or to refrain from making adjustments to such Plan that, in
LICENSEEs reasonable judgment, are necessary in light of factors described in the
preceding sentence. LICENSEE shall provide to PFIZER reports regarding LICENSEEs
progress and future plans, including amendments to the Development Plan, every six
(6) months during the terms of this Agreement, and Pfizer will be provided with an
opportunity to comment on all amendments to the Development Plan as well as all
Development and Commercialization activities.
|
- 10 -
4.1.2. Notwithstanding the provisions of the foregoing Section 4.1.1, LICENSEE
shall, at a minimum, complete the PFIZER 1014 Study as well as initiating and
completing the Phase I Monotherapy Study as described in Schedule D. The
initiation of the Phase I Monotherapy Study will occur no later than by the end of
the first quarter of 2012.
|
|||
4.2. |
Commercialization
. LICENSEE shall itself, or through its Affiliates,
sublicensees or Distributors, use Commercially Reasonable Efforts to Commercialize the
Product in the U.S., the European Union, major Asian markets (which shall include
China, Japan and South Korea) and in each other country within the Territory where
Commercializing the Products would be Commercially Reasonable. LICENSEE shall
undertake such activities at its sole expense.
|
||
4.3. |
Regulatory and Pharmacovigilance.
|
||
4.3.1. Within ten (10) days after the Effective Date, PFIZER shall notify the
appropriate Regulatory Authorities and any necessary Third Party that it is
transferring responsibility for the PFIZER 1014 Study so as to permit an assignment
to LICENSEE of the existing IND for the Product and its foreign Regulatory
Authority counterparts as promptly as possible.
|
|||
4.3.2. During the implementation of the Transition Plan, the safety units of each
of the Parties shall discuss whether or not it may be necessary to put in place a a
written agreement for exchanging adverse event and other safety information
relating to the Product prior to PFIZERs transfer of the existing IND to LICENSEE,
and if they agree that such an agreement is necessary, they shall promptly meet and
agree upon such an agreement (the Pharmacovigiance Agreement). Such
Pharmacovigilance Agreement shall ensure that adverse events and other safety
information is exchanged upon terms that will permit each Party to comply with
Applicable Laws and requirements of Regulatory Authorities
|
|||
4.3.3. In the event that one or more Regulatory Authorities contact PFIZER
regarding an audit of any of the research and development done prior to the
Effective Date, by, or under the direction of, PFIZER regarding the Compound or the
Product, PFIZER shall promptly notify LICENSEE and shall coordinate with LICENSEE
and provide reasonable co-operation to furnish or provide access to such Regulatory
Authority as may be required to comply with the audit so requested.
|
|||
4.4. |
Manufacturing.
Subject to Section 2.3 and subject to any rights needed by
PFIZER in order to complete the manufacturing of drug substance or drug product of the
Product for LICENSEE contemplated by this Agreement, LICENSEE shall have the sole right
to manufacture, or have manufactured, Products, and it shall be entitled to use, and to
sublicense the manufacturing rights under the Patent Rights for such purposes. Except
as provided below, LICENSEE shall be responsible for all aspects of manufacturing of
the Product.
|
- 11 -
4.4.1. PFIZER shall transfer free of charge (except for transportation costs which
shall be borne by LICENSEE) existing inventories of API inventory and bulk drug
inventory (as further particularized in Schedule E hereto) to LICENSEE including
documentation to support the use of those materials in clinical trials.
|
|||
4.4.2. PFIZER shall also provide background research information and technical
assistance as reasonably requested by LICENSEE, including analytical methods
utilized by PFIZER in the manufacture of the drug substance and drug product, to
support development of the Product in the Field and in the Territory All
manufacturing development expenses incurred from and after the Effective Date shall
be the responsibility of LICENSEE.
|
|||
4.4.3. Prior to the Effective Date, PFIZER had already scheduled a production run
of drug product of the Product (as further particularized in Schedule E hereto and
PFIZER hereby undertakes to complete such production run and sell such drug product
to LICENSEE in the quantities, at a price and with scheduled delivery dates as set
forth in Schedule E if requested by LICENSEE.
|
|||
4.4.4. In addition, PFIZER hereby undertakes to manufacture additional drug
substance and drug product of the Product for LICENSEE (as further particularized
in Schedule E hereto) and to sell such drug product to LICENSEE in the quantities,
at a price and with scheduled delivery dates as set forth in Schedule E if
requested by LICENSEE.
|
5. |
PAYMENT TERMS
|
5.1. |
Payment Terms
.
|
||
5.1.1.
Equity
. In partial consideration of the licenses and rights granted to
LICENSEE hereunder, LICENSEE shall, contemporaneously with the execution of this
Agreement and pursuant to a Convertible Note Agreement signed by PFIZER and
LICENSEE on the date hereof, issue to PFIZER seven million dollars ($7,000,000) of
aggregate principal amount of its 5% Convertible Promissory Notes due 2012, in the
form attached to such Convertible Note Agreement.
|
|||
5.1.2.
Milestone Payments
. LICENSEE shall notify PFIZER as soon as practicable
upon achievement of each Milestone. In further consideration of the licenses and
rights granted to LICENSEE, within fifteen (15) days upon achievement of each
Milestone set forth below, LICENSEE shall pay to PFIZER the corresponding
non-creditable and non-refundable milestone payment (each, a
Milestone Payment
).
|
- 12 -
(i) |
Development and Regulatory Milestones.
|
DEVELOPMENT | MILESTONE | ||||
AND REGULATORY MILESTONES | PAYMENT | ||||
PAYABLE UNDER THE | |||||
COLLABORATION AND LICENSE AGREEMENT | |||||
Commencement of Pivotal Registration Study
|
US$*** | ||||
Acceptance for filing by the FDA of an NDA for the first Indication
|
US$*** | ||||
Acceptance for filing by the EMA of an MAA for the first Indication
|
US$*** | ||||
Grant of the first NDA approval of a Product in the USA
|
US$*** | ||||
Granting of the first European approval located in a country located in the European Union
|
US$*** | ||||
(ii) |
Product Approval and Sales Milestones
|
PRODUCT APPROVAL | MILESTONE | ||||
AND SALES MILESTONES | PAYMENT | ||||
Upon FDA approval of an NDA for 1
st
Indication in US
|
US$*** | ||||
Upon EMA approval of an MAA for 1
st
Indication in EU
|
US$*** | ||||
Upon FDA approval of an NDA for a 2
nd
Indication in US
|
US$*** | ||||
Upon EMA approval of an MAA for a 2
nd
Indication in EU
|
US$*** | ||||
Upon FDA approval of an NDA for a 3
rd
Indication in US
|
US$*** | ||||
Upon EMA approval of an MAA for a 3rd Indication in EU
|
US$*** | ||||
The completion of the Calendar Year in which Net Sales first
exceed $***
|
US$*** | ||||
The completion of the Calendar Year in which Net Sales first
exceed $***
|
US$*** | ||||
The completion of the Calendar Year in which Net Sales first
exceed $***
|
US$*** | ||||
- 13 -
(b) |
As used, herein:
|
(i) |
Commencement
when used with respect to a
clinical trial, means the first dosing of the first patient for such
trial.
|
||
(ii) |
Pivotal Registration Study
means a clinical
study designed to provide the efficacy data required to enable an NDA
to be filed in the USA or an MAA to be filed in the EU.
|
(c) |
For the avoidance of doubt: (i) each Milestone Payment shall be
payable only once upon achievement of the applicable Milestone; and (ii)
satisfaction of a Milestone by a sublicensee or assignee of, or Third Party
retained by, LICENSEE or its Affiliates shall be deemed to have been satisfied
by LICENSEE for purposes of this Section 5.1.2.
|
5.1.3. Royalty Payments.
|
(a) |
In consideration of the licenses and rights granted to LICENSEE
hereunder
,
LICENSEE shall pay to PFIZER the royalties of *** percent (*** %) on
Net Sales during the Royalty Term.
|
||
(b) |
In addition, through the payments made to PFIZER below in this
sub-clause 5.1.3(b) LICENSEE shall assume responsibility for payment of the
following royalties under the Collaboration and License Agreement:
|
||
*** % of Net Sales in any Calendar Year up to $*** Million;
|
|||
*** % of Net Sales in any Calendar Year over $*** Million and up to $***
Million; and
|
|||
*** % of Net Sales in any Calendar Year over $*** Million
|
|||
For the purposes of this sub-clause 5.1.3(b) Net Sales shall have the
meaning set out in the Collaboration and License Agreement.
|
|||
(c) |
LICENSEE shall pay to PFIZER the applicable Royalties set out
in sub-sections (a) and (b) above (collectively Royalties) within thirty (30)
days following the expiration of each Calendar Quarter after the date of the
First Commercial Sale. Royalties will be payable on a country by country basis
commencing as of the First Commercial Sale of a Product in each country until
expiration of the Royalty Term for such Product in each country.
|
||
(d) |
If LICENSEE (a) reasonably determines in good faith that, in
order to avoid infringement of any patent not licensed hereunder, it is
reasonably necessary to obtain a license from a Third Party in order to sell or
offer for sale a Product in a country in the Territory and to pay a royalty
under such license (including in connection with the settlement of a patent
infringement claim),
|
- 14 -
or (b) shall be subject to a final court or other binding order or ruling
requiring any payments, including the payment of a royalty to a Third Party
patent holder in respect of sales of any Product in a country in the
Territory, then*** of such third party royalties shall be deductible from
the amount of LICENSEEs royalty payments under Section 5.1.3 (a) with
respect to Net Sales for such Product in such country,
provided
,
however
,
that in no event will a deduction, or deductions, under this Section 5.1(d),
in the aggregate, reduce any royalty payment made by LICENSEE under Section
5.1.3(a) in respect of Net Sales of such Product by more than ***.
|
|||
(e) |
All payments shall be accompanied by a report that includes
reasonably detailed information regarding a total monthly sales calculation of
gross sales of Products on a country by country basis and Net Sales of Product
(including all Deductions) and all Royalties payable to PFIZER for the
applicable Calendar Quarter (including any foreign exchange rates employed).
|
5.1.4.
Other Payments
. LICENSEE shall pay to PFIZER any other amounts due under
this Agreement within thirty (30) days following receipt of invoice.
|
|||
5.1.5.
Late Payments
. Any late payments shall bear interest, to the extent
permitted by law, at five percent (5%) above the Prime Rate of interest as reported
in the
Wall Street Journal
on the date payment is due.
|
|||
5.2. |
Payment Method
.
|
||
5.2.1. With respect to Net Sales invoiced in U.S. dollars, the Net Sales and the
amounts due for Royalties hereunder will be expressed in U.S. dollars. With respect
to Net Sales invoiced in a currency other than U.S. dollars, payments will be
calculated based on currency exchange rates for the Calendar Quarter for which
remittance is made for Royalties. Conversion of Net Sales recorded in local
currencies to U.S. dollars will be performed in a manner consistent with PFIZERs
normal practices used to prepare its audited financial statements for external
reporting purposes, provided that such practices use a widely accepted source of
published exchange rates. For purposes of calculating the Net Sales thresholds set
forth in Sections 5.1.2 and 5.1.3(b), the aggregate Net Sales with respect to each
Calendar Quarter within a Calendar Year will be calculated based on the currency
exchange rates for the Calendar Quarter in which such Net Sales occurred, in a
manner consistent with the exchange rate procedures set forth in the immediately
preceding sentence.
|
|||
5.2.2. All payments from LICENSEE to PFIZER shall be made by wire transfer in U.S.
Dollars to the credit of such bank account as may be designated by PFIZER in
writing to LICENSEE. Any payment which falls due on a date which is not a Business
Day may be made on the next succeeding Business Day.
|
- 15 -
5.3. |
Taxes
.
|
||
5.3.1. It is understood and agreed between the Parties that any amounts payable by
LICENSEE to PFIZER hereunder are exclusive of any and all applicable sales, use,
VAT, GST, excise, property, and other taxes, levies, duties or fees (collectively,
Taxes
) which shall be added thereon as applicable. LICENSEE shall be responsible
for billing and collection from its customers and remitting to the appropriate
taxing authority any and all Taxes which it is required to collect or remit. Each
Party shall be responsible for its own income and property taxes.
|
|||
5.3.2. LICENSEE may withhold from payments due to PFIZER amounts for payment of any
withholding tax that is required by law to be paid to any taxing authority with
respect to such payments. LICENSEE will provide PFIZER all relevant documents and
correspondence, and will also provide to PFIZER any other cooperation or assistance
on a reasonable basis as may be necessary to enable PFIZER to claim exemption from
such withholding taxes and to receive a refund of such withholding tax or claim a
foreign tax credit. LICENSEE will give proper evidence from time to time as to the
payment of any such tax. The Parties will cooperate with each other in seeking
deductions under any double taxation or other similar treaty or agreement from time
to time in force. Such cooperation may include LICENSEE making payments from a
single source in the U.S., where possible. Apart from any such permitted
withholding and those deductions expressly included in the definition of Net Sales,
the amounts payable LICENSEE to PFIZER hereunder will not be reduced on account of
any taxes, charges, duties or other levies. Notwithstanding the foregoing, if
LICENSEE is required to make a payment to PFIZER subject to a deduction of
withholding tax (a LICENSEE Withholding Tax Action) then, the sum payable by
LICENSEE (in respect of which such deduction or withholding is required to be made)
shall be increased to the extent necessary to ensure that PFIZER receives a sum
equal to the sum which it would have received had no such LICENSEE Withholding Tax
Action occurred, if (i) such withholding or deduction obligation arises as a direct
result of any action by LICENSEE, including any assignment or sublicense, or any
failure on the part of LICENSEE to comply with applicable tax laws or filing or
record retention requirements, that has the effect of modifying the tax treatment
of the Parties hereto, and (ii) such tax cannot be recovered by PFIZER or credited
to PFIZER.
|
|||
5.3.3. The Parties agree to cooperate and produce on a timely basis any tax forms
or reports, including an IRS Form W-8BEN, reasonably requested by the other Party
in connection with any payment made by LICENSEE to PFIZER under this Agreement.
|
6. |
RECORDS; AUDIT RIGHTS
|
6.1. |
Relevant Records
.
|
||
6.1.1.
Relevant Records
. LICENSEE shall keep, and will cause each of its
Affiliates or sublicensees, as applicable, to keep, accurate books and records of
accounting for the purpose of calculating all Milestone Payments and Royalties
|
- 16 -
(collectively,
Fees
) (collectively,
Relevant Records
). For the three (3) years
following the end of the Calendar Year to which each will pertain, such Relevant
Records will be kept by LICENSEE or such Affiliate or sublicensee at each of their
principal place of business.
|
|||
6.1.2.
Audit Request
. At the request of PFIZER, LICENSEE shall, and, shall cause
each of its Affiliates or sublicensees to, permit PFIZER and its representatives
(including an independent auditor), at reasonable times and upon reasonable notice,
to examine the Relevant Records. Such examinations may not (i) be conducted for
any Calendar Year more than three (3) years after the end of such year, (ii) be
conducted more than once in any twelve (12) month period or (iii) be repeated for
any Calendar Year. Such audit shall be requested in writing at least seven (7)
days in advance, and shall be conducted during LICENSEEs normal business hours and
otherwise in manner that minimizes any interference to LICENSEEs business
operations.
|
|||
6.1.3.
Audit Fees and Expenses
. PFIZER shall bear any and all fees and expenses it
may incur in connection with any such audit of the Relevant Records; provided,
however, in the event an audit reveals an underpayment of LICENSEE of more than
five percent (5%) as to the period subject to the audit, LICENSEE shall reimburse
PFIZER for any reasonable and documented out-of-pocket costs and expenses of the
audit within thirty (30) days after receiving invoices thereof.
|
|||
6.1.4.
Payment of Deficiency
. Unless disputed as described below, if such audit
concludes that additional payments were owed or that excess payments were made
during such period, LICENSEE will pay the additional royalties or amounts or PFIZER
will reimburse such excess payments, with interest from the date originally due as
provided in Section 5.1.7, within sixty (60) days after the date on which a written
report of such audit is delivered to the Parties. In the event of a dispute
regarding such Relevant Records, the Parties will work in good faith to resolve the
disagreement. If the Parties are unable to reach a mutually acceptable resolution
of any such dispute within thirty (30) days, such dispute will be resolved in
accordance with Section 16.3.2. PFIZER shall treat all information subject to
review under this Section 6.1 in accordance with the confidentiality provisions of
Section 9 and the Parties will cause any auditor or arbitrator to enter into a
reasonably acceptable confidentiality agreement with LICENSEE obligating such firm
to retain all such financial information in confidence pursuant to such
confidentiality agreement.
|
7. |
INTELLECTUAL PROPERTY RIGHTS
|
7.1. |
Pre-existing IP
. Subject only to the rights expressly granted to the other
Party under this Agreement, each Party shall retain all rights, title and interests in
and to any Intellectual Property Rights that are owned, licensed or sublicensed by such
Party prior to or independent of this Agreement.
|
||
7.2. |
Developed IP
. LICENSEE shall own all rights, title and interests in and to any
Intellectual Property Rights that are both: (a) related to the Product, and (b)
|
- 17 -
conceived solely by LICENSEE, its Affiliates or sublicensees following the Effective
Date (collectively,
Developed IP
).
|
|||
7.3. |
Patent Prosecution and Maintenance of Patent Rights
|
(a) |
LICENSEE shall be responsible for filing, prosecuting
(including in connection with any reexaminations, oppositions and the like) and
maintaining the Patent Rights in the Territory. LICENSEE shall file, prosecute
and maintain the Patent Rights using qualified outside patent counsel and
foreign patent associates selected by LICENSEE;
provided
that
LICENSEE identifies such counsel for PFIZER in advance and PFIZER consents to
such counsel (such consent not to be unreasonably withheld or delayed).
LICENSEE shall be responsible for all costs and expenses in connection with
such filing, prosecution and maintenance;
provided
that
if
LICENSEE provides PFIZER with a written request to abandon, or not file a
patent application included in, any of the Patent Rights at least sixty (60)
days in advance of the relevant deadline: (a) LICENSEE shall no longer be
responsible for such costs and expenses relating to filing, prosecuting and
maintaining (as applicable) such Patent Right; (b) PFIZER may, or may allow a
Third Party to, file, prosecute and maintain (in its sole discretion) such
Patent Right; (c) upon PFIZERs request, LICENSEE shall promptly provide all
files related to filing, prosecuting and maintaining such Patent Right to
counsel designated by PFIZER; and (d) the term Patent Rights automatically
shall be modified to exclude such Patent Right as of the date LICENSEE provides
such written request to PFIZER.
|
||
(b) |
Upon the written request of PFIZER, LICENSEE shall provide
PFIZER with (1) material correspondence with the relevant patent offices
pertaining to LICENSEEs prosecution of the Patent Rights and (2) a report
detailing the status of all Patent Rights. Upon the written request of PFIZER,
LICENSEE shall provide PFIZER a reasonable opportunity to review and comment on
proposed material submissions to any patent office with respect to the Patent
Rights prior to submission and LICENSEE shall reasonably consider any comments
provided by PFIZER.
|
8. |
ACTUAL OR THREATENED INFRINGEMENT, DISCLOSURE OR MISAPPROPRIATION.
|
(a) |
Notification
. Each Party shall promptly notify the
other Party in writing of its becoming aware of (a) any actual or threatened
infringement, misappropriation or other violation or challenge to the validity,
scope or enforceability by a Third Party of any Licensed Technology (
Third
Party Infringement
) or (b) initiation by a Third Party of an opposition
proceeding against any Patent Rights, or initiation by LICENSEE of an
opposition against a Third Party or any allegation by a Third Party that
Intellectual Property owned by it is infringed, misappropriated or violated by
the Development, Commercialization and/or Use of any Product (
Defense
Action
).
|
- 18 -
(b) |
LICENSEE shall have the first right (but not the obligation),
at its own expense, to control enforcement of the Licensed Technology against
any Third Party Infringement. Prior to commencing involvement in any such
suit, action or proceeding, LICENSEE shall consult with PFIZER and shall
consider PFIZERs recommendations regarding the proposed suit, action or
proceeding, except to the extent delay would result in the loss of rights by
LICENSEE or PFIZER. LICENSEE shall give PFIZER timely notice of any proposed
settlement of any such suit, action or proceeding that LICENSEE controls and
LICENSEE shall not settle, stipulate to any facts or make any admission with
respect to any Third Party Infringement without PFIZERs prior written consent
(not to be unreasonably withheld or delayed) if such settlement, stipulation or
admission would: (a) adversely affect the validity, enforceability or scope, or
admit non-infringement, of any of the Licensed Technology; (b) give rise to
liability of PFIZER or its Affiliates; (c) grant to a Third Party a license or
covenant not to sue under, or with respect to, any Intellectual Property
Controlled by PFIZER (including the Licensed Technology); or (d) otherwise
impair PFIZERs, any of its Affiliates rights in any Licensed Technology or
PFIZERs or any of its Affiliates rights in this Agreement.
|
||
(c) |
PFIZER shall have the right (but not the obligation) to
control, enforcement of the Licensed Technology against any Third Party
Infringement if LICENSEE provides PFIZER with written notice that it is not
exercising its right to control such enforcement or if such Third Party does
not desist such Third Party Infringement or LICENSEE fails to initiate, or file
the relevant response to (as applicable), a suit, action or proceeding with
respect to such Third Party Infringement upon the earlier of: (a) expiration
of the ninety (90) day period following first receipt by either Party of notice
from the other Party of such Third Party Infringement or (b) fifteen (15) prior
to the deadline for filing, or filing the applicable response to (as
applicable), such suit, action or proceeding (including suits, actions or
proceedings based on a Third Partys filing of a Paragraph IV Certification
under 21 CFR §314.94(a)(12)(i)(A)(4)).
|
||
(d) |
Notwithstanding anything to the contrary herein, the Party that
is not controlling the suit, action or proceeding pertaining to enforcement of
the Licensed Technology against Third Party Infringement as described in this
Section 8 may, at its sole discretion and expense (subject to Section 8(f)),
join as a party to such suit, action or proceeding;
provided
that
such Party shall join as a party to such suit, action or
proceeding upon the reasonable request and expense of the Party controlling
such action if necessary for standing purposes. The Party that is not
controlling such a suit, action or proceeding shall have the right to be
represented by counsel (which shall act in an advisory capacity only, except
for matters solely directed to such Party) of its own choice and at its own
expense (subject to Section 8(f)) in any such suit, action or proceeding.
|
- 19 -
(e) |
Any and all recoveries resulting from a suit, action or
proceeding relating to a claim of Third Party Infringement shall first be
applied to reimburse each Partys costs and expenses in connection with such
suit, action or proceeding, with any remaining recoveries retained by the Party
that controlled such suit, action or proceeding pursuant to this Section 8(e)
(the
Remaining Recoveries
). Notwithstanding the foregoing, LICENSEE
shall pay PFIZER a Royalty in accordance with Section 5.1.3 on the Remaining
Recoveries retained or received by LICENSEE as if such Remaining Recoveries
retained or received by LICENSEE were Net Sales in the Calendar Year in which
the recoveries were retained or received.
|
||
(f) |
Upon LICENSEEs request, PFIZER shall reasonably cooperate with
LICENSEE, to the extent necessary to defend LICENSEE or any sublicensee of
LICENSEE in a Defense Action related to LICENSEEs or its sublicensees Use of
the Compound (as such Compound exists as of the Effective Date) or the Know-How
(in accordance with Section 2). LICENSEE shall have all authority with respect
to any Defense Action, including the right to exclusive control of the defense
of any such suit, action or proceeding and the exclusive right to compromise,
litigate, settle or otherwise dispose of any such suit, action, or proceeding;
provided
that
LICENSEE shall keep PFIZER timely informed of the
proceedings and filings, and provide PFIZER with copies of all material
communications, pertaining to each Defense Action and LICENSEE shall not
settle, stipulate to any facts or make any admission with respect to any
Defense Action without PFIZERs prior written consent (not to be unreasonably
withheld or delayed) if such settlement, stipulation or admission would (a)
adversely affect the validity, enforceability or scope, or admit infringement,
of any of the Licensed Technology; (b) give rise to liability of PFIZER or its
Affiliates; (c) grant to a Third Party a license or covenant not to sue under,
or with respect to, any Intellectual Property Controlled by PFIZER (including
the Licensed Technology); or (d) otherwise impair PFIZER or any of its
Affiliates rights in any Licensed Technology or PFIZERs or any of its
Affiliates rights in this Agreement.
|
9. |
CONFIDENTIALITY
|
9.1. |
Definition
.
Confidential Information
means the terms and provisions of this
Agreement and other proprietary information and data of a financial, commercial or
technical nature that the disclosing Party or any of its Affiliates has supplied or
otherwise made available to the other Party or its Affiliates, which are: (a) disclosed
in writing or (b) if disclosed orally, summarized in writing and provided to the
receiving Party after disclosure. All Know-How shall be considered PFIZERs
Confidential Information
|
||
9.2. |
Obligations
. The receiving Party shall protect all Confidential Information
against unauthorized disclosure to Third Parties with the same degree of care as the
receiving Party uses for its own similar information, but in no event less than a
reasonable degree of care. The receiving Party may disclose the Confidential
|
- 20 -
Information to its Affiliates, and their respective directors, officers, employees,
subcontractors, sublicensees, consultants, attorneys, accountants, banks and
investors (collectively,
Recipients
) who have a need-to-know such information for
purposes related to this Agreement, provided that the receiving Party shall hold
such Recipients to written obligations of confidentiality with terms and conditions
at least as restrictive as those set forth in this Agreement.
|
|||
9.3. |
Exceptions
.
|
||
9.3.1. The obligations under this Section 9 shall not apply to any information to
the extent the receiving Party can demonstrate by competent evidence that such
information:
|
(a) |
is (at the time of disclosure) or becomes (after the time of
disclosure) known to the public or part of the public domain through no breach
of this Agreement by the receiving Party or any Recipients to whom it disclosed
such information;
|
||
(b) |
was known to, or was otherwise in the possession of, the
receiving Party prior to the time of disclosure by the disclosing Party;
|
||
(c) |
is disclosed to the receiving Party on a non-confidential basis
by a Third Party who is entitled to disclose it without breaching any
confidentiality obligation to the disclosing Party; or
|
||
(d) |
is independently developed by or on behalf of the receiving
Party or any of its Affiliates, as evidenced by its written records, without
use or access to the Confidential Information.
|
9.3.2. The restrictions set forth in this Section 9 shall not apply to any
Confidential Information that the receiving Party is required to disclose under
Applicable Laws or a court order or other governmental order or to enforce any
Patent Rights under Section 8, provided that the receiving Party: (a) provides the
disclosing Party with prompt notice of such disclosure requirement if legally
permitted, (b) affords the disclosing Party an opportunity to oppose or limit, or
secure confidential treatment for such required disclosure and (c) if the
disclosing Party is unsuccessful in its efforts pursuant to subsection (b),
discloses only that portion of the Confidential Information that the receiving
Party is legally required to disclose as advised by the receiving Partys legal
counsel.
|
|||
9.3.3. In the event that PFIZER wishes to assign, pledge or otherwise transfer its
rights to receive some or all of the Milestone Payments and Royalties payable
hereunder, PFIZER may disclose to a Third Party Confidential Information of
LICENSEE in connection with any such proposed assignment, provided that PFIZER
shall hold such Third Parties to written obligations of confidentiality with terms
and conditions at least as restrictive as those set forth in this Agreement.
|
|||
9.3.4. In the event that LICENSEE wishes to enter into a sublicense in accordance
with Section 2, LICENSEE may disclose to a Third Party Confidential
|
- 21 -
Information of PFIZER in connection with any such proposed sublicense, provided
that LICENSEE shall hold such Third Parties to written obligations of
confidentiality with terms and conditions at least as restrictive as those set
forth in this Agreement.
|
|||
9.4. |
Right to Injunctive Relief
. Each Party agrees that breaches of this Section 9
may cause irreparable harm to the other Party and shall entitle such other Party, in
addition to any other remedies available to it (subject to the terms of this
Agreement), the right to seek injunctive relief enjoining such action.
|
||
9.5. |
Ongoing Obligation for Confidentiality
. Upon expiration or termination of this
Agreement, the receiving Party shall, and shall cause its Recipients to, destroy,
delete or return (as requested by the disclosing Party) any Confidential Information of
the disclosing Party, except for one copy which may be retained in its confidential
files for archive purposes.
|
10. |
REPRESENTATIONS, WARRANTIES AND COVENANTS
|
10.1. |
Representations and Warranties by Each Party
. Each Party represents and
warrants to the other Party as of the Effective Date that:
|
(a) |
it is a corporation duly organized, validly existing, and in
good standing under the laws of its jurisdiction of formation;
|
||
(b) |
it has full corporate power and authority to execute, deliver,
and perform under this Agreement, and has taken all corporate action required
by Applicable Law and its organizational documents to authorize the execution
and delivery of this Agreement and the consummation of the transactions
contemplated by this Agreement;
|
||
(c) |
this Agreement constitutes a valid and binding agreement
enforceable against it in accordance with its terms;
|
||
(d) |
all consents, approvals and authorizations from all
governmental authorities or other Third Parties required to be obtained by such
Party in connection with this Agreement have been obtained; and
|
||
(e) |
the execution and delivery of this Agreement and all other
instruments and documents required to be executed pursuant to this Agreement,
and the consummation of the transactions contemplated hereby do not and shall
not: (i) conflict with or result in a breach of any provision of its
organizational documents, (ii) result in a breach of any agreement to which it
is a party that would impair the performance of its obligations hereunder; or
(iii) violate any Applicable Law.
|
10.2. |
Representations and Warranties by PFIZER
.
|
||
10.2.1. PFIZER represents and warrants to LICENSEE as of the Effective Date that:
|
- 22 -
(a) |
PFIZER Controls the Patent Rights and the Know-How, and is
entitled to grant the licenses specified herein; PFIZER has not caused any
Patent Rights to be subject to any liens or encumbrances and PFIZER has not
granted to any Third Party any rights or licenses under any of the Patent
Rights or Know-How that would conflict with the licenses granted to Licensee
hereunder; and PFIZER does not hold Control any patents that dominate the
Patent Rights;
|
||
(b) |
PFIZER is not subject to any royalty or similar payment
obligation to any Third Party with respect to the grant of rights to PFIZER to
practice the Licensed Technology, except as set forth in the Collaboration and
License Agreement (a true copy of which, including all amendments, has been
provided to LICENSEE). The Collaboration and License Agreement remains in full
force and effect and, to PFIZERs Knowledge, Cancer Research Technology Limited
is not in material breach under the Collaboration and License Agreement. PFIZER
has paid all amounts due and payable under the Collaboration and License
Agreement to the extent accrued on or before the Effective Date and is not in
material breach of the Collaboration and License Agreement;
|
||
(c) |
to its Knowledge, the Patent Rights have been procured from the
respective Patent offices in accordance with Applicable Law;
|
||
(d) |
to its Knowledge, PFIZER has not received any communication
from a Third Party alleging that the Use of the Product in the Field within the
Territory infringes, misappropriates or otherwise violates the Intellectual
Property Rights of a Third Party;
|
||
(e) |
to its Knowledge, there is no claim pending or threatened by
PFIZER alleging that a Third Party is or was infringing, misappropriating or
otherwise violating the Licensed Technology in the Field within the Territory;
and
|
||
(f) |
PFIZER has not, up through and including the Effective Date,
Knowingly withheld any material information, including reports of Adverse Event
Experiences and warning letters from Regulatory Authorities, in PFIZERs
possession from LICENSEE in connection with its due diligence relating to the
Compound, Products, this Agreement and the underlying transaction. To PFIZERs
Knowledge, the clinical data related to Compound or Product that PFIZER has
provided to LICENSEE prior to the Effective Date was, when access was provided
to LICENSEE, up-to-date and accurate in all material respects and PFIZER has
provided LICENSEE with any material updates to such clinical data that have
occurred since the time such access was provided to LICENSEE.
|
10.2.2. As used in Section 10.2.1, Knowledge means first hand and actual
knowledge of the officers of PFIZER and is not meant to require or imply that any
particular inquiry or investigation has been undertaken including, without
limitation, obtaining any type of search (independent of that performed by the
|
- 23 -
actual governmental authority during the normal course of patent prosecution, as
applicable, in a jurisdiction) or opinion of counsel.
|
|||
10.3. |
Covenants and Representations and Warranties by LICENSEE
. LICENSEE represents
warrants and covenants to PFIZER as of the Effective Date that:
|
(a) |
it shall, and shall ensure all Third Parties that it engages,
comply with all Applicable Law with respect to the performance of its
obligations hereunder.
|
||
(b) |
Without limiting the generality of Section 10.3(a), LICENSEE
shall comply with the U.S. Foreign Corrupt Practices Act of 1977 (as modified
or amended). LICENSEE represents warrants and covenants that it has not and
will not directly or indirectly offer or pay, or authorize such offer or
payment of, any money, or transfer anything of value, to improperly seek to
influence any Government Official. If LICENSEE is itself a Government
Official, LICENSEE represents warrants and covenants that it has not accepted,
and will not accept in the future, such a payment or transfer. As used herein,
Governmental Official means: (a) any elected or appointed government official
(e.g., a member of a ministry of health), (b) any employee or person acting for
or on behalf of a government official, agency, or enterprise performing a
governmental function, (c) any political party officer, employee, or person
acting for or on behalf of a political party or candidate for public office,
(d) an employee or person acting for or on behalf of a public international
organization, or (e) any person otherwise categorized as a government official
under local law. Government is meant to include all levels and subdivisions
of non-U.S. governments (i.e., local, regional, or national and administrative,
legislative, or executive).
|
10.4. |
No Other Warranties.
EXCEPT AS EXPRESSLY STATED IN THIS SECTION 10, NEITHER
PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, STATUTORY OR OTHERWISE, INCLUDING BUT NOT LIMITED TO WARRANTIES OF TITLE,
NON-INFRINGEMENT, VALIDITY, ENFORCEABILITY, MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. ANY INFORMATION PROVIDED BY PFIZER OR ITS AFFILIATES IS MADE
AVAILABLE ON AN AS IS BASIS WITHOUT WARRANTY WITH RESPECT TO COMPLETENESS, COMPLIANCE
WITH REGULATORY STANDARDS OR REGULATIONS OR FITNESS FOR A PARTICULAR PURPOSE OR ANY
OTHER KIND OF WARRANTY WHETHER EXPRESS OR IMPLIED.
|
11. |
INDEMNIFICATION
|
11.1. |
Indemnification by LICENSEE
. LICENSEE agrees to indemnify, hold harmless and
defend PFIZER and its Affiliates, and their respective officers, directors, employees,
contractors, agents and assigns (collectively,
PFIZER Indemnitees
), from and against
any Claims arising or resulting from: (a) the Development of a Product by LICENSEE, its
Affiliates, subcontractors or sublicensees, (b) the
|
- 24 -
Commercialization of a Product by LICENSEE, its Affiliates, subcontractors or
sublicensees, (c) the negligence, recklessness or wrongful intentional acts or
omissions of LICENSEE, its Affiliates, subcontractors or sublicensees, (d) breach by
LICENSEE of any representation, warranty or covenant as set forth in this Agreement
or (e) breach by LICENSEE of the scope of the license set forth in Section 2.1. As
used herein,
Claims
means collectively, any and all Third Party demands, claims,
actions and proceedings (whether criminal or civil, in contract, tort or otherwise)
for losses, damages, liabilities, costs and expenses (including reasonable
attorneys fees).
|
|||
11.2. |
Indemnification Procedure
. In connection with any Claim for which PFIZER
seeks indemnification from LICENSEE pursuant to this Agreement, PFIZER shall: (a) give
LICENSEE prompt written notice of the Claim; provided, however, that failure to provide
such notice shall not relieve LICENSEE from its liability or obligation hereunder,
except to the extent of any material prejudice as a direct result of such failure; (b)
cooperate with LICENSEE, at LICENSEEs expense, in connection with the defense and
settlement of the Claim; and (c) permit LICENSEE to control the defense and settlement
of the Claim; provided, however, that LICENSEE may not settle the Claim without
PFIZERs prior written consent, which shall not be unreasonably withheld or delayed, in
the event such settlement materially adversely impacts PFIZERs rights or obligations.
Further, PFIZER shall have the right to participate (but not control) and be
represented in any suit or action by advisory counsel of its selection and at its own
expense.
|
12. |
LIMITATION OF LIABILITY
|
12.1. |
Consequential Damages Waiver
. EXCEPT FOR A BREACH OF SECTION 9 OR OBLIGATIONS
ARISING UNDER SECTION 11, NEITHER PARTY SHALL BE LIABLE FOR ANY INDIRECT OR
CONSEQUENTIAL, DAMAGES, INCLUDING DAMAGES FOR LOST PROFITS OR LOST REVENUES REGARDLESS
OF WHETHER IT HAS BEEN INFORMED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH DAMAGES OR THE
TYPE OF CLAIM, CONTRACT OR TORT (INCLUDING NEGLIGENCE).
|
12.2. |
Liability Cap
. EXCEPT FOR PFIZERS BREACH OF SECTION 9, IN NO EVENT SHALL
PFIZERS LIABILITY FOR DAMAGES IN CONNECTION WITH THIS AGREEMENT EXCEED THE CAP,
REGARDLESS OF WHETHER PFIZER HAS BEEN INFORMED OF THE POSSIBILITY OR LIKELIHOOD OF SUCH
DAMAGES OR THE TYPE OF CLAIM, CONTRACT OR TORT (INCLUDING NEGLIGENCE). Cap means ***
Dollars ($***).
|
13. |
TERM; TERMINATION
|
13.1. |
Term
. The term of this Agreement shall commence as of the Effective Date and
shall expire upon the last-to-expire Patent Right in every country within the Territory
or ten (10) years from the First Commercial Sale of the last Product to be introduced
in any country within the Territory, whichever is later.
|
- 25 -
13.2. |
Termination for Cause
. Each Party shall have the right, without prejudice to
any other remedies available to it at law or in equity, to terminate this Agreement in
the event the other Party breaches any of its material obligations hereunder and fails
to cure such breach within sixty (60) days of receiving notice thereof;
provided
,
however
, if such breach is capable of being cured, but cannot
be cured within such sixty (60) day period, and the breaching Party initiates actions
to cure such breach within such period and thereafter diligently pursues such actions,
the breaching Party shall have such additional period as is reasonable to cure such
breach, but in no event will such additional period exceed sixty (60) days. Any
termination by a Party under this Section 13.2 shall be without prejudice to any
damages or other legal or equitable remedies to which it may be entitled from the other
Party. For the avoidance of doubt, LICENSEEs failure to use Commercially Reasonable
Efforts to Develop and Commercialize the Product shall constitute a material breach by
LICENSEE under this Agreement.
|
13.3. |
Termination by LICENSEE
. LICENSEE will have the right to terminate this
Agreement in full ninety (90) days after delivery of written notice to PFIZER if the
Board of Directors of LICENSEE concludes due to scientific, technical, regulatory or
commercial reasons, including (i) safety or efficacy concerns, including adverse events
of the Product, (ii) concerns relating to the present or future marketability or
profitability of the Product, (iii) reasons related to Patent coverage or (iv) existing
and anticipated competition, renders the Development of the Product or the
Commercialization of the Product no longer commercially practicable for LICENSEE.
Notwithstanding the foregoing, LICENSEE shall not have the right to terminate the
Agreement under this Section 13.3 prior to the completion of the trial activities
specified in Section 4.1.2 other than for reasons of safety or efficacy as specified in
the protocols for such trial activities.
|
13.4. |
Termination for a Bankruptcy Event
. Each Party shall have the right to
terminate this Agreement in the event of a Bankruptcy Event with respect to the other
Party.
Bankruptcy Event
means the occurrence of any of the following: (a) the
institution of any bankruptcy, receivership, insolvency, reorganization or other
similar proceedings by or against a Party under any bankruptcy, insolvency, or other
similar law now or hereinafter in effect, including any section or chapter of the
United States Bankruptcy Code, as amended or under any similar laws or statutes of the
United States or any state thereof (the
Bankruptcy Code
), where in the case of
involuntary proceedings such proceedings have not been dismissed or discharged within
ninety (90) days after they are instituted, (b) the insolvency or making of an
assignment for the benefit of creditors or the admittance by a Party of any involuntary
debts as they mature, (c) the institution of any reorganization, arrangement or other
readjustment of debt plan of a Party not involving the Bankruptcy Code, (d) appointment
of a receiver for all or substantially all of a Partys assets, or (e) any corporate
action taken by the board of directors of a Party in furtherance of any of the
foregoing actions.
|
13.5. |
Effect of Termination or Expiration.
|
- 26 -
13.5.1. Upon termination or expiration of this Agreement, LICENSEE shall pay to
PFIZER all amounts due to PFIZER as of the effective date of termination or
expiration within thirty (30) days following the effective date of termination or
expiration.
|
|||
13.5.2. Upon expiration of this Agreement, PFIZER hereby grants to LICENSEE a
royalty-free right and license to use the Know-How for the purpose of the
Development and Commercialization of the Product in the Field within the Territory.
|
|||
13.5.3. Subject to Section 13.5.5(d), upon termination of this Agreement, LICENSEE
shall have the right to sell its remaining inventory of Product following the
termination of this Agreement so long as LICENSEE has fully paid, and continues to
fully pay when due, any and all Royalties and Milestone Payments owed to PFIZER,
and LICENSEE otherwise is not in material breach of this Agreement.
|
|||
13.5.4. A termination of this Agreement, other than a termination under Section
13.3, will not automatically terminate any sublicense granted by LICENSEE pursuant
to Section 2.2 with respect to a non-Affiliated sublicensee, provided that (i) such
sublicensee is not then in breach of any provision of this Agreement or the
applicable sublicense agreement, (ii) PFIZER will have the right to step into the
role of LICENSEE as sublicensor, with all the rights that LICENSEE had under such
sublicense prior to termination of this Agreement (including the right to receive
any payments to LICENSEE by such Sublicensee that accrue from and after the date of
the termination of this Agreement) and (iii) PFIZER will only have those
obligations to such Sublicensee as PFIZER had to LICENSEE hereunder. LICENSEE
shall include in any sublicense agreement a provision in which said sublicensee
acknowledges its obligations to PFIZER hereunder and the rights of PFIZER to
terminate this Agreement with respect to any sublicensee for material breaches of
this Agreement by such sublicensee. The failure of LICENSEE to include in a
sublicense agreement the provision referenced in the immediately preceding sentence
will render the affected sublicense void
ab initio
.
|
|||
13.5.5. With the exception of termination of this Agreement by LICENSEE pursuant to
Section 13.2, upon termination of this Agreement:
|
(a) |
LICENSEE hereby grants to PFIZER a non-exclusive, fully
paid-up, royalty-free, worldwide, transferable, perpetual and irrevocable
license, with the right to sublicense, to Use any and all Developed IP for Use
of the Product.
|
||
(b) |
To the extent permitted by applicable Regulatory Authorities,
LICENSEE shall: (i) transfer to PFIZER all Regulatory Filings and Regulatory
Approvals held by LICENSEE with respect to the Product, and (ii) to the extent
subsection (i) is not permitted by the applicable Regulatory Authority, permit
PFIZER to cross-reference and rely upon any Regulatory Approvals and Regulatory
Filings filed by LICENSEE with respect to the Product.
|
- 27 -
(c) |
LICENSEE, if requested in writing by PFIZER, shall provide any
and all (i) material correspondence with the relevant patent offices pertaining
to the LICENSEEs prosecution of the Patent Rights to the extent not previously
provided to PFIZER during the course of the Agreement and (ii) a report
detailing the status of all Patent Rights at the time of termination or
expiration.
|
||
(d) |
Effective as of the date of termination, LICENSEE hereby grants
to PFIZER a fully paid-up, royalty-free, worldwide, transferable,
sublicensable, perpetual and irrevocable license to use the Trademarks
identifying a Product for the purpose of manufacturing, marketing, distributing
and selling the Product. As used herein,
Trademarks
means all registered and
unregistered trademarks, service marks, trade dress, trade names, logos,
insignias, domain names, symbols, designs, and combinations thereof.
|
||
(e) |
LICENSEE will responsibly wind-down, in accordance with
accepted pharmaceutical industry norms and ethical practices, any on-going
clinical studies for which it has responsibility hereunder in which patient
dosing has commenced or, if reasonably practicable and requested by PFIZER,
allow PFIZER or its CRO to complete such trials (and then assign all related
Regulatory Documentation and investigator and other agreements relating to such
studies). LICENSEE shall be responsible for any Development costs associated
with such wind-down. PFIZER shall pay all Development Costs incurred by either
Party to complete such studies should PFIZER request that such studies be
completed. During any such winding down of ongoing trials, LICENSEE shall
provide such knowledge transfer and other training to PFIZER or its Affiliates
or a Third Party that is designated in writing by PFIZER (
Designated
Affiliate/Third Party
) as reasonably necessary for PFIZER or the Designated
Affiliate/Third Party to continue such trial. In connection with such
transfer, LICENSEE shall, at PFIZERs option: (i) transfer to PFIZER or the
Designated Affiliate/Third Party all Product at the cost paid by LICENSEE to
manufacture such Product, (ii) transfer to PFIZER or the Designated
Affiliate/Third Party all LICENSEE Inventory owned by LICENSEE at the cost paid
by LICENSEE for such LICENSEE Inventory, and (iii) assign to PFIZER or the
Designated Affiliate/Third Party any agreements with Third Parties with respect
to the Development or Commercialization of the Product. As used herein,
LICENSEE Inventory
means all components and works in process produced or held
by LICENSEE with respect to the manufacture of Products.
|
13.6. |
Survival
. Expiration or termination of this Agreement shall not relieve the
Parties of any obligation accruing hereunder prior to such expiration or termination.
Without limiting the foregoing, the provisions of Sections 6, 7.1, 9, 11, 12, 13.5, 15,
16, 17.3 and 17.8 shall survive expiration or termination of this Agreement.
|
14. |
PUBLICITY AND PUBLICATIONS
|
14.1. |
Publicity and Publications.
|
- 28 -
14.1.1. Subject to PFIZERs rights pursuant to Section 13.5.5(d), neither Party
(nor any of its Affiliates or agents) shall use the Trademarks of the other Party
or its Affiliates in any press release, publication or other form of promotional
disclosure without the prior written consent of the other Party in each instance.
|
|||
14.1.2. Each Party agrees not to issue any press release or other public statement,
whether written, electronic, oral or otherwise, disclosing the existence of this
Agreement, the terms hereof or any information relating to this Agreement without
the prior written consent of the other Party,
provided
however
,
that neither Party will be prevented from complying with any duty of disclosure it
may have pursuant to Applicable Law or the rules of any recognized stock exchange
so long as the disclosing Party provides the other Party at least ten (10) Business
Days prior written notice to the extent practicable and only discloses information
to the extent required by Applicable Law or the rules of any recognized stock
exchange.
|
|||
14.1.3. LICENSEE acknowledges that PFIZER personnel may desire to publish in
scientific journals or present at scientific conferences scientific, pre-clinical
or clinical data derived from research and development related to the Compound that
was conducted by PFIZER prior to the Effective Date. Both Parties understand that
a reasonable commercial strategy may require delay of publication of information,
filing of patent applications, or, in some instances, disapproval of publication
altogether. Accordingly, no such publication will be submitted and no such
presentation shall be made without the prior written consent of LICENSEE, in its
sole discretion. Any such publication or presentation shall be submitted in
writing to LICENSEE for review by LICENSEEs management. After receipt of the
proposed publication by LICENSEEs managements, such written approval or
disapproval will be provided within thirty (30) days
|
|||
14.1.4. To the extent inventions are disclosed (or proposed to be disclosed) that
relate to the Compound in such publications, as to which PFIZER has not, prior to
the Effective Date, yet made patent filings, any patent applications filed
following the Effective Date at the discretion of either LICENSEE or PFIZER in
respect of such inventions, and any patents that issue therefrom shall be deemed to
be Patent Rights for all purposes of this Agreement.
|
15. |
LICENSEE INSURANCE
|
15.1. |
Insurance Requirements
. LICENSEE shall maintain during the term of this
Agreement and until the later of: (a) three (3) years after termination or expiration
of this Agreement, or (b) the date that all statutes of limitation covering claims or
suits that may be instituted for personal injury based on the sale or use of the
Product have expired, commercial general liability insurance from a minimum A- AM
Bests rated insurance company or insurer reasonably acceptable to PFIZER, including
contractual liability and product liability or clinical trials, if applicable, with
coverage limits of not less than *** (***) million US dollars per occurrence and ***
(***) million US dollars in the aggregate. LICENSEE has the right to provide the total
limits required by any combination of primary and umbrella/excess coverage. The
minimum level of insurance set forth herein shall not be construed to create a limit
|
- 29 -
on LICENSEEs liability hereunder. Such policies shall name PFIZER and its
Affiliates as additional insured and provide a waiver of subrogation in favor of
PFIZER and its Affiliates. Such insurance policies shall be primary and
non-contributing with respect to any other similar insurance policies available to
PFIZER or its Affiliates. Any deductibles for such insurance shall be assumed by
LICENSEE.
|
|||
15.2. |
Policy Notification
. LICENSEE shall provide PFIZER with original certificates
of insurance (which may be done through the submission of an electronic copy of such
certificate) evidencing such insurance: (a) promptly following execution by both
Parties of this Agreement, and (b) prior to expiration of any one coverage. PFIZER
shall be given at least thirty (30) days written notice prior to cancellation,
termination or any change to restrict the coverage or reduce the limits afforded.
|
16. |
DISPUTE RESOLUTION
|
16.1. |
General
. Except for disputes for which injunctive or other equitable relief
is sought to prevent the unauthorized use or disclosure of proprietary materials or
information or prevent the infringement or misappropriation of a Partys Intellectual
Property Rights, the following procedures shall be used to resolve all disputes arising
out of or in connection with this Agreement.
|
||
16.2. |
Dispute Escalation
. Promptly after the written request of either Party, each
of the Parties shall appoint a designated representative to meet in person or by
telephone to attempt in good faith to resolve any dispute. If the designated
representatives do not resolve the dispute within fifteen (15) Business Days of such
request, then an executive officer of each Party shall meet in person or by telephone
to review and attempt to resolve the dispute in good faith. The executive officers
shall have twenty (20) Business Days to attempt to resolve the dispute.
|
||
16.3. |
Arbitration.
|
||
16.3.1.
Full Arbitration
. Unless Section 16.3.2 is applicable, in the event the
Parties are not able to resolve such dispute through the dispute escalation
procedure described above, either Party may at any time after such 20 Business Day
period submit such dispute to be finally settled by arbitration administered in
accordance with the rules of Judicial Administration and Arbitration Services
(JAMS) in effect at the time of submission, as modified by this Section 16. The
arbitration will be heard and determined by three (3) arbitrators who are retired
judges or attorneys with at least ten (10) years of experience with intellectual
property license agreements in the pharmaceutical or biotechnology industry, each
of whom will be a neutral as to both Parties. Each Party will appoint one
arbitrator and the third arbitrator will be selected by the two Party-appointed
arbitrators, or, failing agreement within thirty (30) days following the date of
receipt by the respondent of the claim, by JAMS. Such arbitration will take place
in New York, NY. The arbitration award so given will be a final and binding
determination of the dispute, will be fully enforceable in any court of competent
jurisdiction, and will not include any damages expressly prohibited by Section 12.
Fees, costs and expenses of arbitration are to be divided by the Parties in the
following manner: LICENSEE
|
- 30 -
will pay for the arbitrator it chooses, PFIZER will pay for the arbitrator it
chooses, and the Parties will share payment for the third arbitrator. Except in a
proceeding to enforce the results of the arbitration or as otherwise required by
law, neither Party nor any arbitrator may disclose the existence, content or
results of any arbitration hereunder without the prior written agreement of both
Parties.
|
|||
16.3.2.
Accelerated Arbitration
. To the extent the arbitration matter involves a
dispute that is submitted to arbitration by a Party under Section 6.1.4 or any
dispute regarding the proper characterization of a dispute subject to resolution
under this Section 16.3.2 as opposed to Section 16.3.1, the following procedures
will also apply:
|
(a) |
For purposes of arbitration under this Section 16.3.2, the
arbitrator will be appointed pursuant to Section 16.3.1, but will be a single
independent, conflict-free arbitrator with the requisite licensing and
pharmaceutical industry experience (such arbitrator, the Expert). The
Parties may select a different Expert for each dispute depending on the nature
of the issues presented and desired expertise.
|
||
(b) |
Each Party will prepare and submit a written summary of such
Partys position and any relevant evidence in support thereof to the Expert
within thirty (30) days of the selection of the Expert. Upon receipt of such
summaries from both Parties, the Expert will provide copies of the same to the
other Party. The Expert will be authorized to solicit briefing or other
submissions on particular questions. Within fifteen (15) days of the delivery
of such summaries by the Expert, each Party will submit a written rebuttal of
the other Partys summary and may also amend and re-submit its original
summary. Oral presentations will not be permitted unless otherwise requested
by the Expert. The Expert will make a final decision with respect to the
arbitration matter within thirty (30) days following receipt of the last of
such rebuttal statements submitted by the Parties and will make a determination
by selecting the resolution proposed by one of the Parties that as a whole is
the most fair and reasonable to the Parties in light of the totality of the
circumstances and will provide the Parties with a written statement setting
forth the basis of the determination in connection therewith. For purposes of
clarity, the Expert will only have the right to select a resolution proposed by
one of the Parties in its entirety and without modification.
|
||
(c) |
The Parties further agree that the decision of the Expert will
be the sole, exclusive and binding remedy between them regarding determination
of the arbitration matter so presented. Confirmation of, or judgment upon any
award rendered pursuant to this Section 16.3.2 may be entered by any court of
competent jurisdiction. The Expert will have no authority to award any type of
damages excluded under Section 12.
|
16.3.3.
Injunctive Relief
. Notwithstanding the dispute resolution procedures set
forth in this Section 16, in the event of an actual or threatened breach hereunder,
the aggrieved Party may seek equitable relief (including restraining orders,
specific
|
- 31 -
performance or other injunctive relief) in any court or other forum, without first
submitting to any dispute resolution procedures hereunder.
|
|||
16.3.4.
Tolling
. The Parties agree that all applicable statutes of limitation and
time-based defenses (such as estoppel and laches) will be tolled while the dispute
resolution procedures set forth in this Section 16 are pending, and the Parties
will cooperate in taking all actions reasonably necessary to achieve such a result.
In addition, during the pendency of any arbitration under this Agreement initiated
before the end of any applicable cure period under Section 13.2, (i) this Agreement
will remain in full force and effect, (ii) the provisions of this Agreement
relating to termination for material breach will not be effective, (iii) the time
periods for cure under Section 13 as to any termination notice given prior to the
initiation of arbitration will be tolled, and (iv) neither Party will issue a
notice of termination pursuant to such sections, until the arbitral tribunal has
confirmed the existence of the facts claimed by a Party to be the basis for the
asserted material breach.
|
17. |
GENERAL PROVISIONS
|
17.1. |
Assignment
|
||
17.1.1. Neither Party may assign its rights and obligations under this Agreement
without the other Partys prior written consent, except that: (a) PFIZER may assign
to a Third Party its rights to receive some or all of the Fees payable hereunder,
(b) each Party may assign its rights and obligations under this Agreement to one or
more of its Affiliates without the consent of the other Party and (c) either Party
may assign this Agreement in the event of a Change in Control. As used herein,
Change in Control
means the acquisition of a party by a Third Party or the sale
of all or substantially all of its business to which this Agreement relates. The
assigning Party shall provide the other Party with prompt written notice of any
such assignment. Any permitted assignee pursuant to clauses (b) and (c) above
shall assume all obligations of its assignor under this Agreement, and no permitted
assignment shall relieve the assignor of liability for its obligations hereunder.
Any attempted assignment in contravention of the foregoing shall be void. As used
herein, Fees means collectively, any and all Milestone Payments and Royalties.
|
|||
17.1.2. Prior to any proposed assignment by the LICENSEE of any of the Licensed
Technology PFIZER shall have a right of first negotiation as more fully
particularized in Section 2.6.
|
|||
17.2. |
Severability
. Should one or more of the provisions of this Agreement become
void or unenforceable as a matter of law, then such provision will be ineffective only
to the extent of such prohibition or invalidity, without invalidating the remainder of
this Agreement, and the Parties agree to substitute a valid and enforceable provision
therefor which, as nearly as possible, achieves the desired economic effect and mutual
understanding of the Parties under this Agreement.
|
||
17.3. |
Governing Law; Exclusive Jurisdiction.
|
- 32 -
17.3.1. This Agreement shall be governed by and construed under the laws in effect
in the State of New York, US, without giving effect to any conflicts of laws
provision thereof or of any other jurisdiction that would produce a contrary
result, except that issues subject to the arbitration clause and any arbitration
hereunder shall be governed by the applicable commercial arbitration rules and
regulations.
|
|||
17.3.2. The courts of New York shall have exclusive jurisdiction over any action
for injunctive relief contemplated by Section 16.1 or for the enforcement of any
arbitral award resulting from arbitrations brought in accordance with Section 16,
and each of the Parties hereto irrevocably: (a) submits to such exclusive
jurisdiction for such purpose; (b) waives any objection which it may have at any
time to the laying of venue of any proceedings brought in such courts; (c) waives
any claim that such proceedings have been brought in an inconvenient forum, and (d)
further waives the right to object with respect to such proceedings that any such
court does not have jurisdiction over such Party. Notwithstanding the foregoing,
application may be made to any court of competent jurisdiction with respect to the
enforcement of any judgment or award.
|
|||
17.4. |
Force Majeure
. Except with respect to delays or nonperformance caused by the
negligent or intentional act or omission of a Party, any delay or nonperformance by
such Party (other than payment obligations under this Agreement) will not be considered
a breach of this Agreement to the extent such delay or nonperformance is caused by acts
of God, natural disasters, acts of the government or civil or military authority, fire,
floods, epidemics, quarantine, energy crises, war or riots or other similar cause
outside of the reasonable control of such Party (each, a
Force Majeure Event
),
provided that the Party affected by such Force Majeure Event will promptly begin
or resume performance as soon as reasonably practicable after the event has abated. If
the Force Majeure Event prevents a Party from performing any of its obligations under
this Agreement for one hundred eighty (180) days or more, then the other Party may
terminate this Agreement immediately upon written notice to the non-performing Party.
|
||
17.5. |
Waivers and Amendments
. The failure of any Party to assert a right hereunder
or to insist upon compliance with any term or condition of this Agreement shall not
constitute a waiver of that right or excuse a similar subsequent failure to perform any
such term or condition by the other Party. No waiver shall be effective unless it has
been given in writing and signed by the Party giving such waiver. No provision of this
Agreement may be amended or modified other than by a written document signed by
authorized representatives of each Party.
|
||
17.6. |
Relationship of the Parties
. Nothing contained in this Agreement shall be
deemed to constitute a partnership, joint venture, or legal entity of any type between
PFIZER and LICENSEE, or to constitute one Party as the agent of the other. Moreover,
each Party agrees not to construe this Agreement, or any of the transactions
contemplated hereby, as a partnership for any tax purposes. Each Party shall act
solely as an independent contractor, and nothing in this Agreement shall be construed
to give any Party the power or authority to act for, bind, or commit the other Party.
|
- 33 -
17.7. |
Successors and Assigns
. This Agreement shall be binding upon and inure to the
benefit of the Parties hereto and their respective successors and permitted assigns.
|
||
17.8. |
Notices
. All notices, consents, waivers, and other communications under this
Agreement must be in writing and will be deemed to have been duly given when: (a)
delivered by hand (with written confirmation of receipt), (b) sent by fax (with written
confirmation of receipt), provided that a copy is sent by an internationally recognized
overnight delivery service (receipt requested), or (c) when received by the addressee,
if sent by an internationally recognized overnight delivery service (receipt
requested), in each case to the appropriate addresses and fax numbers set forth below
(or to such other addresses and fax numbers as a Party may designate by written
notice):
|
17.9. |
Further Assurances
. LICENSEE and PFIZER hereby covenant and agree without the
necessity of any further consideration, to execute, acknowledge and deliver any and all
such other documents and take any such other action as may be reasonably necessary or
appropriate to carry out the intent and purposes of this Agreement.
|
||
17.10. |
No Third Party Beneficiary Rights
. This Agreement is not intended to and shall not
be construed to give any Third Party any interest or rights (including, without
limitation, any third party beneficiary rights) with respect to or in connection with
any agreement or provision contained herein or contemplated hereby.
|
||
17.11. |
Entire Agreement; Confidentiality Agreement.
|
(a) |
This Agreement, together with its Schedules, sets forth the
entire agreement and understanding of the Parties as to the subject matter
hereof and supersedes all proposals, oral or written, and all other prior
communications between the Parties with respect to such subject matter,
including, without limitation, that certain Confidentiality Agreement by and
between the Parties,
|
- 34 -
dated April 18, 2011 (
CDA
). The Parties acknowledge
and agree that, as of the Effective Date, all Evaluation Material (as defined in the CDA)
disclosed by PFIZER or its Affiliates pursuant to the CDA shall be
considered PFIZERs Confidential Information and subject to the terms set
forth in this Agreement.
|
|||
(b) |
In the event of any conflict between a material provision of
this Agreement and any Schedule hereto, the Agreement shall control.
|
17.12. |
Counterparts
. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one and
the same instrument.
|
||
17.13. |
Cumulative Remedies
. No remedy referred to in this Agreement is intended to be
exclusive, but each shall be cumulative and in addition to any other remedy referred to
in this Agreement or otherwise available under law.
|
||
17.14. |
Waiver of Rule of Construction
. Each Party has had the opportunity to consult with
counsel in connection with the review, drafting and negotiation of this Agreement.
Accordingly, any rule of construction that any ambiguity in this Agreement shall be
construed against the drafting Party shall not apply.
|
||
17.15. |
Construction.
For purposes of this Agreement: (a) words in the singular shall be held
to include the plural and vice versa as the context requires; (b) the words including
and include shall mean including, without limitation, unless otherwise specified;
(c) the terms hereof, herein, herewith, and hereunder, and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement; and (d) all references to
Section, Schedule and Exhibit, unless otherwise specified, are intended to refer
to a Section, Schedule or Exhibit of or to this Agreement.
|
- 35 -
PFIZER INC.
|
CLOVIS ONCOLOGY INC. | |
|
||
By:
/s/ GARRY NICHOLSON
|
By: /s/ PATRICK J. MAHAFFY | |
|
||
Name:
Garry Nicholson
|
Name: Patrick J. Mahaffy | |
|
||
Title:
President, General Manager
|
Title: President and CEO |
- 36 -
Pfizer
Ref. No. |
Country | Application Number |
Application
Date |
Patent Number | Grant Date | Expiration Date | Status |
1
1. |
Transitional Services
|
1.1 |
Transition Plan/Hours Cap/Additional Consulting Services
|
1.1.1 |
Detailed Transition Plan
. As soon as reasonably
possible after the Effective Date, the Transition Coordinators will work
together in good faith to agree upon a transition plan which will identify,
among other elements, joint functional area kick-off meetings and regular
meetings during the Initial Transition Period (as defined below), as
appropriate, to ensure transfer of project knowledge, to establish
communication plans with external collaborators and vendors such that
LICENSEE will begin to be included in ongoing activities and communications
as soon as possible following the Effective Date, and to prioritize the
transfer of documents and records, all within the framework of the following
Sections of this Schedule B. While the sections below set forth outside
completion dates for various tasks, both Parties shall use good faith efforts
to complete the various tasks earlier than such outside dates.
|
1.1.2 |
PFIZER shall make available to LICENSEE certain expertise
for consultation with LICENSEEs representatives via telephone or
correspondence for the purpose of conducting the following activities related
to the Transition Plan contemplated by this Schedule B: (a) conveying and
transferring information, (b) answering inquiries and (c) conducting research
for the purpose of responding to such inquiries (the activities pursuant to
these activities shall be collectively referred to as the Consulting
Services). LICENSEE shall reimburse PFIZER for any travel expenses incurred
by PFIZER if PFIZER representatives travel to LICENSEE site(s) or other
non-PFIZER locations, and time devoted to such travel and Consultation
Services at such locations shall be either Consulting Services or Additional
Consulting Services in accordance with Section 1.
|
1.1.3 |
PFIZER shall provide such Consulting Services upon
reasonable notice from LICENSEE to PFIZER and during PFIZERs normal business
hours. Such Consulting Services shall be provided by PFIZER at no charge for
the first three (3) months after the Effective Date (the Initial Transition
Period) for all consultations. For the three (3) month period following the
Initial Transition Period, PFIZER shall provide Consulting Services at no
charge for up to *** hours (the Hours Cap). The calculation of the Hours
Cap shall include the number of hours expended by PFIZER in answering
inquiries from LICENSEE related to Transition Plan, but shall not include the
hours of effort incurred by transferring to LICENSEE the Documentation of the
Included Assets. All hours of Consultation beyond *** hours shall be
considered Additional Consulting Services.
|
1.1.4 |
Any time devoted by PFIZER personnel on preparation or
review of publications (either sole PFIZER, joint PFIZER with external
collaborators or joint PFIZER and LICENSEE) of research results will not be
considered as Consulting Services and will not count against the Hours Cap.
|
1.1.5 |
Fees for any Additional Consulting Services shall include:
|
1.1.5.1 |
Any out-of-pocket travel and hotel costs and expenses incurred by
PFIZER representatives in performing the Consulting Services.
|
1.1.5.2 |
All hours of Consultation beyond *** hours shall be charged at a
rate of $*** per hour.
|
1.2 |
Document, Information, and Material Transfer
|
1.2.1 |
Initial Request
. No later than *** months
after the Effective Date (unless otherwise specified herein or agreed to in
writing by the Parties), PFIZER shall provide to LICENSEE all Licensed
Technology to the extent it exists as of the Effective Date; provided that
PFIZER has the right, but not the obligation to retain (a) copies of all such
documents and records, (b) copies of Regulatory Filings and correspondence,
and clinical trial data, and (c) any records reasonably required by PFIZER
for the conduct of its activities under the terms of its previous
obligations.
|
1.2.2 |
Records to be transferred
: Notwithstanding the
foregoing, the Parties agree as follows with respect to the Licensed
Technology (Included Assets): (i) no later than *** Business Days
after the Effective Date PFIZER shall provide electronic copies (in
Microsoft Office format and/or in other non-proprietary format) of relevant
documents, information, records, and data (Documentation), by a method
reasonably acceptable to LICENSEE. To the extent such Documentation exists
as of the Effective Date in an electronic format, including scanned versions
of a hardcopy, PFIZER shall provide to LICENSEE only an electronic copy of
such Documentation. For Documentation which does not exist in an electronic
format as of the Effective Date, PFIZER shall provide to LICENSEE a physical
copy of the Documentation. Notwithstanding the foregoing, in no event shall
PFIZER be required to provide: (i) data or records that include technology
or products other than those that relate to the Included Assets or (ii)
laboratory notebooks, personal notes of PFIZER employees or any of PFIZERs
contractors or subcontractors, or internal intra-PFIZER correspondence;
provided, however, PFIZER shall provide to LICENSEE summary information that
pertains to the Included Assets to the extent such summary information: (x)
exists as of the Effective Date; (y) is retained by or on behalf of PFIZER;
and (z) is reasonably retrievable by PFIZER.
|
1.3 |
Transfer of Specimens; Inventory
|
1.3.1 |
GLP Studies: Within *** Business Days of the
Effective Date, PFIZER shall identify and produce specimens/data records
that were identified in final reports of GLP studies as having been archived
at or by PFIZER. Such Items will be shipped within thirty (30) Business
Days following PFIZERs receipt of notice from LICENSEE to an archival
facility of LICENSEE choice at
|
LICENSEE expense and direction. This facility must be identified within
*** months of the Effective Date. LICENSEE shall bear all costs and
expenses incurred by PFIZER after the Effective Date related to packaging
and shipping the Items pursuant to this Section.
|
1.3.2 |
Items to be Transferred: For Items in the possession of
a Third Party, LICENSEE shall coordinate with such Third Party to transfer
the Items, including, without limitation, transfer of the GMP protocols,
receiving documentation, insurance requirements and temperature monitors.
For Items in the possession of PFIZER, PFIZER shall package and ship such
Items within thirty (30) Business Days following PFIZERs receipt of notice
from LICENSEE. This shipping notification must take place within the first
*** months after the Effective Date to allow sufficient time to
accomplish the transfer before the *** month transition period
completes. LICENSEE shall bear all costs and expenses incurred by PFIZER
after the Effective Date related to packaging and shipping the Items
pursuant to this Section.
|
1.4 |
Regulatory Applications
|
1.4.1 |
United States INDs
. Within *** Business
Days after written notification from LICENSEE that LICENSEE is able to
assume all clinical, regulatory, and safety obligations, PFIZER shall execute
all documents (in a form reasonably acceptable to LICENSEE) required to
transfer the sponsorship of all United States INDs for the Compound to
LICENSEE This transfer notification must take place within the first *** months after the Effective Date to allow for sufficient time to
accomplish the full IND transfer before the *** month transition period
completes.
|
1.4.2 |
Maintenance of IND
. For the period beginning on
the Effective Date and ending on the effective date of the transfer of the
applicable IND (i.e., the date that the LICENSEE serves official
confirmation of acceptance of Regulatory transfer of responsibility) PFIZER
shall continue to maintain the relevant INDs for the Compound, at LICENSEEs
direction and expense.
|
1.4.3 |
Electronic Versions of Documents
. Within *** Business Days after the Effective Date, PFIZER shall deliver electronic
files of the sections of all open INDs for the Compound, and any subsequent
updates thereto. For Regulatory filings other than INDs, PFIZER shall
deliver electronic versions of these filings within *** Business Days
of the Effective Date.
|
1.4.4 |
Other Regulatory Filings
. Where appropriate,
within thirty (30) Business Days after written notification from LICENSEE
that LICENSEE is able to assume all clinical, regulatory, and safety
obligations, PFIZER shall execute all documents (in a form reasonably
acceptable to LICENSEE) required to transfer the sponsorship of all other
Regulatory filings for the Compound to LICENSEE. This transfer notification
must take place within the first *** months after the Effective Date to
allow for sufficient time to accomplish the full IND transfer before the *** month transition period completes.
|
1.4.5 |
Trial Master Files
. PFIZER shall forward Trial
Master Files (TMFs) or equivalent, for all completed clinical studies for
the Compound (i.e, studies with signed-off final clinical study reports), to
LICENSEE, as promptly as practicable
|
but in no event no later than sixty (60) calendar days after receipt of
such written request from LICENSEE. This transfer notification must take
place within the first *** months after the Effective Date to allow
for sufficient time to accomplish the full document transfer before the
*** month transition period completes. This transfer is subject to the
conditions in Section 1.1.3 above. For study A4991014, which is currently
ongoing, the trial master file will remain at PFIZER until thirty (30)
calendar days after operational control has been transitioned to LICENSEE.
|
1.4.6 |
Interaction with Regulatory Authorities
. For the
period beginning on the Effective Date and ending on the effective date of
the transfer of the applicable Regulatory Filing, LICENSEE shall
lead
1
all interactions with any Regulatory Authority
relating to the Compound. Notwithstanding the foregoing, for the period
beginning after the Effective Date and ending on the effective date of the
transfer of the applicable Regulatory Filing in such country, if LICENSEE so
reasonably requests, PFIZER will participate, by telephone, in certain
interactions with Regulatory Authorities relating to the Compound, at
LICENSEEs direction and expense, provided that LICENSEE shall provide PFIZER
written notice at least ten (10) Business Days prior to any such meetings.
|
1.4.7 |
Ongoing Responsibilities
. In connection with the
United States IND, an annual report is due in ***. The data
cut-off for this report is ***. In order to allow for a smooth
transitioning of responsibility regarding this report: (a) after the
Effective Date, PFIZER shall continue to run the clinical safety tables for
this report, at its cost; (b) LICENSEE shall take responsibility for drafting
such annual report and submitting it to the FDA, and (c) PFIZER shall provide
Consulting Services for input and review on such annual report as may be
requested by LICENSEE according to the agreement on Consulting Services
described in Section 1.1.3 of this Schedule B.
|
1.5 |
Miscellaneous Carry-Over Activities
|
1.5.1 |
***
|
1.5.2 |
CRUK Resupply
. From its existing inventory of
drug product, PFIZER shall complete its commitment to package and ship at
its cost to Cancer Research UK (CRUK) the requested resupply of Product
for the CRUK IIR Phase II trial.
|
1.5.3 |
***
|
1.6 |
Safety Reporting
|
1.6.1 |
Unless otherwise directed by LICENSEE, PFIZER shall
submit PFIZER-generated CIOMS/serious adverse event reports for all
Compounds, to the relevant Regulatory Authority for the period beginning on
the Effective Date and ending on the effective date of the transfer of the
applicable IND to LICENSEE.
|
1.7 |
Pharmaceutical Sciences/Manufacturing
|
1.7.1 |
Document Transfer and Management
. PFIZER shall
disclose all Licensed Technology, including, summary reports, formulation
folders, data related to the pharmaceutical development of the Compounds, to
LICENSEE no later than *** Business Days after the Effective
Date.
|
1.7.2 |
Inventory Transfer and Management
. PFIZER shall
transfer all outstanding inventories of non-GMP and GMP API for the Compounds
to LICENSEE within *** Business Days after the Effective Date,
unless subject to a separate written supplies agreement. Such shipment will
occur following PFIZERs receipt of notice from LICENSEE to a storage
facility of LICENSEE choice at LICENSEE expense and direction. LICENSEE
shall bear all costs and expenses incurred by PFIZER after the Effective Date
related to packaging and shipping the Items pursuant to this Section. After
the Effective Date, except as permitted under a separate Supplies Agreement,
or as required for the completion of this Transition Plan, PFIZER shall not
provide any Compound(s), whether API or finished drug product, to any Third
Party without the prior consent of LICENSEE. After the Effective Date,
PFIZER shall not provide any documents, information or data relating to
Compound to any Third Party without the prior consent of LICENSEE.
|
1.7.2.1
1.7.2.2
1.7.2.3
1.7.2.4
1.7.2.5
1.7.2.6
1.7.2.7
1.7.3
customary invoice practices for on-going formulation, materials management and stability.
|
1.8 |
Intellectual Property
.
|
1.8.1 |
For *** days following the Effective Date, PFIZER
shall monitor the intellectual property within the Patent Rights definition
and promptly forward to LICENSEE (but not later than ten (10) Business Days
of receipt thereof by PFIZER) (a) all correspondence received by PFIZER from
the relevant patent offices with respect to such intellectual property, and
(b) a schedule of applicable extension and expiration dates. Other than the
foregoing responsibility, PFIZER shall have no obligations with respect to
prosecuting or maintaining the intellectual property, including, without
limitation, filing any assignments or applications for renewal with the
relevant government offices; excepting, however, PFIZER shall be obligated to
reasonably cooperate with any requests from LICENSEE pertaining to, or in
furtherance of, prosecuting or maintaining the Patent Rights and filing any
assignments related thereto.
|
1.9 |
Third Party Contracts
.
|
1.9.1 |
Assigned Agreements
. Any relevant Third Party
Contracts (whether identified in Schedule B-1 or otherwise) shall be dealt
with after the Effective Date by the Parties in such manner as they may
mutually agree consistent with the rights and obligations of the Parties
under the Agreement.
|
1.9.1.1 |
PFIZER shall cooperate with LICENSEE and interface with Third
Parties to achieve assignment or termination of existing Third Party
Contracts as mutually agreed by the Parties and to ensure transition
of all clinical trials and research relating to Compound, and
transfer of all materials and specimens
|
||
1.9.1.2 |
To the extent any Third Party Contracts related to the API or
finished drug product of the Compound, or to clinical trials ongoing
for the Product are Master Service Agreements which include other
activities of PFIZER, such Master Service Agreements shall not be
assigned to LICENSEE. PFIZER shall, however, identify such Master
Service Agreements and the services covered thereby, in connection
with the documentation transfer contemplated by Section 1.1 above,
including the identity and contact information of the Third Party
that is a party to such Master Service Agreement.
|
1.10 |
Subsequent Requests
. LICENSEE may request other documents, information,
records or data that are Licensed Technology on an as-needed basis during the *** month
Transition Period but no later than one month prior to the expiration of the *** month
Transition Period to accomplish the full document transfer with the *** Transition
Period. All such LICENSEE requests made after the Transition Period will be allocated
against the Consulting Services specified in Section 1.1.3 above.
|
2. |
Records, documents, samples and data to be transferred to LICENSEE
.
|
2.1 |
Pharmaceutical Product and Supplies
.
|
2.1.1 |
Existing physical material inventory held by PFIZER to
include Active Pharmaceutical Ingredient (API),( non-GMP and GMP) and
clinical supplies; unless otherwise subject to a Supplies Agreement.
|
2.1.2 |
Schedule of inventory held external to PFIZER including
quantity, expiration date and location
|
2.1.3 |
Records of Inventory and Supply.
|
2.1.4 |
Records pertaining to synthesis, formulation and
manufacture of the Compound
|
2.1.5 |
Summaries of GLP or GMP audits, copies of which shall be
transferred to LICENSEE.
|
2.2 |
Intellectual Property (IP)
.
|
2.2.1 |
A listing of all patents and patent applications
encompassed by the term Patent Rights, including U.S. and foreign
equivalents, with docket and status reports to be delivered to LICENSEE,
within *** Business Days of the Effective Date.
|
2.2.2 |
Copies of file wrappers for the PFIZER Product Patent
Rights will be Delivered to LICENSEE within *** calendar days of the
Effective Date. Records will be provided electronically in non-proprietary
format.
|
2.2.3 |
After entering into a Community of Interest Agreement,
Pfizer will provide copies of all written searches, prior art, and written
opinions of counsel related to the Patent Rights or Products.
|
2.2.4 |
LICENSEE shall inform PFIZER in writing within *** Business Days of the Effective Date the names of the outside counsel and
foreign patent counsel selected to maintain and prosecute the Patent Rights.
Upon receipt of the names of the outside counsel and foreign patent counsel
PFIZER shall inform its outside patent counsel, and any annuity services,
that transfer of responsibility for Patent Rights to LICENSEEs counsel is
permitted or that it has no objection to Pfizers outside patent counsel or
annuity services representing Licensee in the future if they wish to do so.
LICENSEE is responsible for all costs and expenses incurred for the Patent
Rights *** days after the Effective Date.
|
2.3 |
Research and Development
.
|
2.3.1 |
Pre-clinical: Copies of all protocols, data, results, and
reports related to pivotal (e.g., GLP) pre-clinical studies for the
Compound(s):
|
2.3.1.1 |
Animal efficacy studies;
|
||
2.3.1.2 |
Animal safety and toxicity studies;
|
2.3.1.3 |
Specimens/data records associated with final reports of GLP toxicology
studies
|
||
2.3.1.4 |
Studies and reports prepared in support of IND submission(s);
|
||
2.3.1.5 |
For pre-clinical studies performed prior to the IND preparatory phase,
results will be provided in summary documents for studies or portions of
non-GLP studies already completed, where no report was intended to be
generated.
|
2.3.2 |
Clinical: Copies of all protocols and amendments, study
reports and results (including tables, figures and data) related to the
Compound(s).
|
2.3.3 |
Ongoing clinical studies
: the Parties will collaborate to
identify and prioritize the transfer of the working study management files
for study A4991014 and such other documents and data related to
such study as may not have been specifically identified in this Schedule B
but the transfer of which nevertheless would facilitate a smooth transition
of such trial. In addition, the Parties will meet during the first *** months following the Effective Date at the request of either Transition
Coordinator, to discuss such other exchanges of information or steps as shall
ensure a smooth transition of such trial.
|
2.4 |
Regulatory
.
|
2.4.1 |
Filings, correspondence, and teleconference and meeting
minutes by Regulatory Agencies and PFIZER or its subsidiaries with any
federal, state, local or foreign governmental agency since inception (in this
regard, all filings and correspondence with the FDA, or any other national
regulatory agency).
|
2.4.2 |
Copies of all Trial Master Files (TMFs) equivalent, for
all completed clinical studies for the Compound(s) (i.e, studies with
signed-off final clinical study reports and to include but not limited to
copies of all clinical trial protocols and amendments, IRB/EC approvals,
forms 1572, informed consent forms, financial disclosure forms, Investigator
Brochures, related to the Compounds).
|
*** | ||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||
Title | Project Status | Country | Tracking Number | Contract. Org. |
Investigator
Names |
Study Type | Cancer Types | Grant Requests |
Funding
Requested |
2011 Payable |
2012 and
Beyond |
|||||||||||||||||||||||||||||||||
***
|
||||||||||||||||||||||||||||||||||||||||||||
Title | Project Status | Country | Tracking Number | Contract. Org. |
Investigator
Names |
Study Type | Cancer Types | Grant Requests |
Funding
Requested LOC |
|||||||||||||||||||||||||||||||||||
|
|||
1. | In the genetic context of *** DNA damage repair defect ***, using PF-338 monotherapy, what is the degree and duration of tumor PARP inhibition needed to cause maximal tumor cell apoptosis and/or tumor shrinkage? | ||
|
|
|||
a. | A robust *** assay is needed to generate these data. | ||
|
|
|||
2. | In combination with *** in vivo , what is the degree and duration of tumor PARP inhibition needed to cause maximal tumor cell apoptosis and/or tumor shrinkage, and under what schedule? | ||
|
|||
|
|||
3. | In vivo, does assessment of PARP activity in *** correlate sufficiently with tumor PARP activity (and thus efficacy) to permit use of a *** assay to guide dose and schedule selection in humans? Is plasma exposure to drug an alternative metric to predict *** effect and efficacy? | ||
|
|
Safety observation period will be *** (one cycle)
|
|
|
||
|
Dose escalation will proceed from *** if DLTs (dose limiting toxicities) reported in each cohort are
<1/3 or <2/6 patients. It is possible that further dose escalation would be appropriate depending upon
tolerability, *** criteria.
|
|
|
||
|
DLTs will be defined by standard criteria.
|
|
|
||
|
The MTD will be defined as the maximum daily oral dose at which <33% of patients experience dose
limiting toxicities.
|
|
|
||
|
Patients enrolled in a lower dose cohort may be escalated one dose level if they experienced no DLT
during their safety observation period and if the safety observation perioed from the +1 cohort from their
dose level has been completed.
|
|
|
||
|
During the first cycle of treatment (Safety Assessment Period), patients will undergo safety, *** assessments. Central/core laboratories will be used for *** Local imaging assessments for antitumor efficacy (Response Evaluation Criteria in Solid Tumors [RECIST] 1.1 criteria) will be performed at Screening and after completion of every *** cycle. AEs will be assessed from the time first dose of drug is administered through *** after the last dose of PF-338. Other safety tests (vital signs, clinical laboratory tests, Eastern Cooperative Oncology Group [ECOG] performance status, and physical exam) will be collected. On-going, frequent analysis of the safety, *** data will be performed after completion of each cohort in the dose escalation phase before choosing to advance to the next dose cohort. | |
|
||
|
If continuous, daily dosing with an acceptable PID is not achieved, then dosing intervals of *** out of *** will be explored. | |
|
If *** out of *** dosing is not tolerated, then dosing intervals of *** out of *** will be explored. | |
|
||
|
B) Treatment Extension Period | |
|
Upon completion of the *** + safety assessment period (i.e., through ***), patients may continue to participate in an optional Treatment-Extension Period which begins on *** PF-338 will be administered daily during the Treatment Extension Period until tumor progression, intolerable toxicity, patient/physician request to discontinue or death. | |
|
||
|
C) Dose Expansion Period | |
|
Upon determination of the maximally tolerated dose and assessment of the ***, safety and *** data are completed, approximately *** patients will be enrolled at the MTD and monitored for tolerability and efficacy. These patients will have tumors with evidence of molecular defects that are believed to impair DNA repair capacity such that PARP inhibitor monotherapy may be of therapeutic benefit. |
Study Population
|
Key Inclusion Criteria: Dose escalation phase | |
|
||
|
Histologically confirmed, metastatic or locally advanced solid
tumor |
|
|
||
|
Progression on standard therapies
|
|
|
||
|
Performance Status (ECOG) 0 or 1
|
|
|
||
|
Key Inclusion Criteria: Dose expansion phase | |
|
||
|
Histologically confirmed, metastatic or locally advanced solid
tumor or advanced hematologic malignancy |
|
|
||
|
Progression on standard therapies
|
|
|
||
|
Evidence of tumor-related DNA repair defect, such as (but not
limited to) ***
|
|
|
||
|
Performance Status (ECOG) 0, 1 or 2
|
|
|
||
|
Key Exclusion Criteria | |
|
||
|
Any of the following criteria will exclude patients from study participation: | |
|
||
|
Treatment with a previous PARP inhibitor, during which the
patient progressed within *** of initiating treatment and/or within ***
of consideration for this study.
|
|
|
||
Study Treatment
|
PF-338 will be administered as a solid tablet formulation on a daily basis through *** for those patients enrolled in the dose escalation phase. | |
|
||
|
The optional Treatment Extension Period will start on *** and continue until patient experiences disease progression, unacceptable toxicity, request by patient or physician to discontinue, death or termination of the study. | |
|
||
|
PF-338 will be administered on a daily basis for those patients enrolled in the dose expansion phase until patient experiences disease progression, unacceptable toxicity, request by patient or physician to discontinue, death or termination of the study. The dose chosen for the expansion phase will be based on tolerability and optimal inhibition of PAR determined in the dose escalation phase. |
Withdrawal Criteria
|
Patients may repeat cycles of PF-338 treatment until at least one of the following criteria applies: | |
|
Disease progression (based on tumor scan or clinical
status)
|
|
|
Intercurrent illness that prevents administration of PF-338
|
|
|
Unacceptable toxicity
|
|
|
Patient withdrawal of consent to further study participation
|
|
|
Major noncompliance that may affect patient safety
|
|
|
Pregnancy
|
|
No go criteria
|
Inability to dose continuously for *** or greater and
achieve *** minimum PAR inhibition
|
*** |
|
Prepare and tablet a
***
kg blend into 40 mg tablets (~
***
anticipated)
|
||
|
Prepare and tablet a
***
kg blend into 60 mg tablets (~
***
anticipated)
|
||
|
Complete release testing for all lots and package into bulk drums for shipment (paid by
LICENSEE) to LICENSEE
|
|
Prepare and tablet
***
mg tablets (ratio of tablets TBD)
|
|
Prepare and tablet
***
mg tablets (ratio of tablets TBD)
|
||
|
Complete release testing for all lots and package into bulk drums for shipment (paid by
LICENSEE) to LICENSEE
|
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Holder
:
|
______________ | |
|
||
Date of Grant
:
|
______________ | |
|
||
Vesting Commencement Date
|
______________ | |
|
||
Number of Options
:
|
______________ | |
|
||
Exercise Price
:
|
$_____________ | |
|
||
Expiration Date
:
|
______________ | |
|
||
Type of Option
:
|
[Nonqualified Stock Option] [Incentive Stock Option] | |
|
||
Vesting Schedule
:
|
[Insert vesting schedule] | |
|
Notwithstanding the foregoing, in the event that the Holders employment or service with the Service Recipient is terminated by the Service Recipient without Misconduct [or resigns for Good Reason (as defined in that certain Employment Agreement by and between the Holder and the Company, dated as of [ ], 20[ ])] within twelve (12) months following a Change in Control of the Company, all of the Holders unvested Options shall vest in full upon such Termination. | |
|
||
Exercise of Options
:
|
To exercise a vested Option, the Holder (or his or her authorized representative) must give written notice to the Company, using the form of Option Exercise Notice attached hereto as Exhibit A , stating the number of Options which he or she intends to exercise. The Company will issue the shares of Stock with respect to which the Options are exercised upon payment of the shares of Stock acquired in accordance with Section 5(d) of the Plan, which Section 5(d) is incorporated herein by reference and made a part hereof; provided , however , that if the Holder wishes to use any method of exercise other than in immediately available funds in |
|
United States dollars, or by certified or bank cashiers check, the Holder shall have received the prior written approval of the Committee or its designee approving such method of exercise. | |
|
||
|
Upon exercise of Options, the Holder will be required to satisfy applicable withholding tax obligations as provided in Section 18 of the Plan. | |
|
||
Termination
:
|
Section 5(f) of the Plan regarding treatment of Options upon Termination is incorporated herein by reference and made a part hereof. | |
|
||
Additional Terms
:
|
Options shall be subject to the following additional terms: |
| Options shall be exercisable in whole shares of Stock only. | ||
| Each Option shall cease to be exercisable as to any share of Stock when the Holder purchases the share of Stock or when the Option otherwise expires or is forfeited. | ||
| Any certificates representing the Stock delivered to the Holder shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which such shares are listed, and any applicable federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions as the Committee deems appropriate. | ||
| This Option Agreement does not confer upon the Holder any right to continue as an employee or service provider of the Employer or any other member of the Company Group. | ||
| This Option Agreement shall be construed and interpreted in accordance with the laws of the State of Colorado, without regard to the principles of conflicts of law thereof. | ||
| The Holder agrees that the Company may deliver by email all documents relating to the Plan or these Options (including, without limitation, a copy of the Plan) and all other documents that the Company is required to deliver to its security holders (including, without limitation, disclosures that may be required by the Securities and Exchange Commission). The Holder also agrees that the Company may deliver these documents by posting them on a website maintained by the Company or by a third party under contract with the Company. If the Company posts |
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these documents on a website, it shall notify the Holder by email or such other reasonable manner as then determined by the Company. |
CLOVIS ONCOLOGY, INC. | HOLDER | |||||||
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By:
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Signature | Signature | ||||||
Title:
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Date: | |||||||
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Date:
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1. | By delivery of this Notice of Exercise, I am irrevocably electing to exercise options to purchase shares of Common Stock, par value $___ per share (Shares) of Clovis Oncology, Inc. (the Company) granted to me under the Companys Stock Incentive Plan (the Plan). |
2. | The number of Shares I wish to purchase by exercising my options is ________. |
3. | The applicable purchase price (or exercise price) is $____ per Share, resulting in an aggregate purchase price of $________ (the Aggregate Purchase Price). |
4. | I am satisfying my obligation to pay the Aggregate Purchase Price by: |
o | Delivering to the Company, with this Notice of Exercise, an amount equal to the Aggregate Purchase Price in immediately available United States dollars, or by certified or bank cashiers check. | ||
o | Authorizing the Company, through this Notice of Exercise, to effectuate a net exercise, pursuant to which I will receive the number of Shares exercised (as set forth in paragraph 2 above), reduced by the number of Shares equal to the Aggregate Purchase Price divided by the fair market value per Share on the date of exercise. I have attached to this Notice of Exercise the written communication confirming the consent of the Committee to my use of the net exercise procedure described herein. |
5. | To satisfy the applicable withholding taxes: |
o | I have enclosed an amount equal to the applicable withholding taxes in immediately available United States dollars, or by certified or bank cashiers check. | ||
o | I elect to have such amount satisfied by the use of Shares such that the number of Shares I receive upon exercise will be reduced (or further reduced if net exercise was chosen above) by a number of Shares with an aggregate fair market value on the date of exercise equal to any federal, state or local income or other taxes required by law to be withheld by the Company. I have attached to this Notice of Exercise the written communication confirming the consent of the Committee to my use of the withholding tax procedure described herein. |
6. | I hereby agree to be bound by all of the terms and conditions set forth in the Plan and any award agreement to which the options were granted under. If I am not the person to whom |
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the options were granted by the Company, proof of my right to purchase the Shares of the Company is enclosed. |
7. | I have been advised to consult with any legal, tax or financial advisors I have chosen in connection with the purchase of the Shares. |
Dated: _______________ | ||||||
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*
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(Optionees signature) | (Additional signature, if necessary) | |||||
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(Print name) | (Print name) | |||||
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(Full address) | (Full address) |
* | Each person in whose name Shares are to be registered must sign this Notice of Exercise. (If more than one name is listed, specify whether the owners will hold the Shares as community property or as joint tenants with the right of survivorship). |
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(i) | to approve any Stage Plans submitted to the JSC by the Project Team pursuant to Section 2.2 *** weeks prior to the relevant Stage Start Date; | ||
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(ii) | to approve any amended or modified Stage Plans submitted to the JSC by the Project Team pursuant to Section 2.3; | ||
*** | |||
(iv) | the resolution of any disputes referred to it by a Project Team in accordance with Section 3.1.4. |
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(i) | Clovis Oncology shall have final decision making authority with respect to all matters related to (1) the development of the Clovis Oncology Compound (including without limitation to design and conduct clinical trials involving the Clovis Oncology Compound), and (2) the commercialization of the Clovis Oncology Compound in the Territory |
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(including without limitation the decision of whether or not to sell or discontinue selling the Clovis Oncology Compound in a country or region). | |||
(ii) | RMS shall have final decision making authority with respect to matters related to (1) the design and configuration of the EGFR Assay and IVD, or (2) the commercialization of the EGFR Assay or IVD in the Territory other than in the USA, the European Union, Japan and China (including without limitation the decision of whether or not to sell or discontinue selling the IVD in a country or region other than in the USA, the European Union, Japan and China). |
(i) | to set each Stage Start Date *** weeks prior to the preliminary stage start date as set forth in the Preliminary Project Plan; |
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(ii) | to agree, approve and sign off Stage Plans pursuant to Section 2.2 *** weeks prior to the relevant Stage Start Date; | ||
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(iii) | periodic review and evaluation of the status, progress and results of work being performed under the Project Plan; and | ||
(iv) | to agree, approve and sign off amended or modified Stage Plans in accordance with Section 2.3. |
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If to Clovis Oncology:
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Clovis Oncology, Inc. | |
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2525 28th Street, Suite 100 | |
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Boulder, CO 80301 | |
Submit invoices to:
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Attention: Accounts Payable | |
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If to RMS:
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(Technical contact)
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RMS Molecular Systems, Inc. | |
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4300 Hacienda Drive | |
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Pleasanton, CA 94588 | |
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Attention: Genomics and Oncology Lifecycle Team Leader | |
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(Administrative contact)
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RMS Molecular Systems, Inc. | |
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4300 Hacienda Drive | |
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Pleasanton, CA 94588 | |
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Attention: Legal Department | |
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With a copy to:
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RMS Molecular Systems, Inc. | |
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4300 Hacienda Drive | |
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Pleasanton, CA 94588 | |
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Attention: Business Development |
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CLOVIS ONCOLOGY, INC. | ||||
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By:
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/s/ Patrick J. Mahaffy
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Name:
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Patrick J. Mahaffy
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Title:
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President & CEO
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ROCHE MOLECULAR SYSTEMS, INC. | ||||
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By:
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/s/ P. A. Brown
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Name:
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P.A. Brown
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Title:
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President & CEO RMS
19 April 2011 |
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Stage | Timeline |
State
Budget ($M) |
Deliverable | Payment Schedule | ||||||||||||
Initiation Intermediate Completion |
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1. | Background |
2. | Work Plan definitions |
3. | Purpose |
4. | Deliverables |
5. | Clovis Oncology Deliverables |
6. | RMS Deliverables |
7. | Budget |
8. | Assumptions (such as timelines, Specification of the Assay, number of samples tested etc.) |
Page 35 of 35
CLOVIS ONCOLOGY, INC. | VENTANA MEDICAL SYSTEMS, INC. | |||||||||
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/s/ Patrick J. Mahaffy | /s/ Doug Ward | ||||||||
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By:
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Patrick J. Mahaffy
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By: |
Doug Ward
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Date:
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March 23, 2010
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Date: |
25-MAR-2010
|
Name | Title | Phone & Fax | Address | Email Address | ||||
***
|
Head of Molecular Diagnostics | *** | *** | *** | ||||
***
|
Director Business Development | *** | *** | *** | ||||
***
|
Senior Scientist | *** | *** | *** | ||||
***
|
Project Manager | *** | *** | *** |
1) | Project 1: Antibody Screening | ||
2) | Project 2: Develop a PMA ready Class 1 Exempt IVD automated in-vitro Diagnostic IHC assay for hENT1 | ||
3) | Project 3: Clinical utility testing of hENT1 in a phase II clinical trial | ||
4) | Project 4: Preparation and submission of PMA Class 3 IVD application for hENT1 Companion Diagnostic |
| Companies: Clovis | ||
| Study Title : Screen hENT1 antibody for suitability on Ventanas automated system. | ||
| Study Identification: Clovis hENT1 BIOMARKER PROJECT | ||
| Proposed Study Initiation Date: Feb 2010 | ||
| Proposed Study End Date: March 2010 | ||
| Primary Ventana Contacts: *** | ||
| Primary Clovis Contacts: *** |
2
3
| Problems with quality, consistency, stability, or supply of antigen retrieval agents from an outside vendor (i.e. ficin) or from Ventana (i.e. citrate, EDTA, proteinase K) | ||
| Problems with quality, consistency, stability, or supply of primary antibodies from outside vendor or from Ventana | ||
| Problems with quality, consistency, stability of secondary and detection reagents from outside vendors or Ventana | ||
| Instrument failure (autostainers, microtomes, automatic cover-slipper, imaging microscope, etc.) | ||
| Loss of trained personnel due to attrition or illness |
4
5
6
7
| Company : Clovis | ||
| Study Title : TBD | ||
| Study Identification : Evaluation of hENT1 in a retrospective patient observational study and a prospective phase II clinical trial | ||
| Purpose : Evaluation of Tissue biomarkers by INC assay in patient biopsies for hENT1 | ||
| Assay(s) Requested : hENT1 IHC | ||
| Number of Specimens to be analyzed : *** | ||
| Maximum Number of Slides Needed for Analysis: TBD | ||
| Proposed Study Initiation Date : TBD | ||
| Proposed Study End Date : TBD |
8
9
Assay Protocol | ||||||
Priority | Biomarker Target | Number | ||||
1
|
H & E | |||||
2
|
Vimentin | 940 | ||||
3.
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hENT 1 | TBD | ||||
4.
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hENT 1 Negative | TBD |
10
11
12
| Problems with quality, consistency, stability, or supply of antigen retrieval agents from an outside vendor (i.e. ficin) or from Ventana (i.e. citrate, EDTA, proteinase K) | ||
| Problems with quality, consistency, stability, or supply of primary antibodies from outside vendor or from Ventana | ||
| Problems with quality, consistency, stability of secondary and detection reagents from outside vendors or Ventana | ||
| Instrument failure (autostainers, microtomes, automatic cover-slipper, imaging microscope, etc.) | ||
| Loss of trained personnel due to attrition or illness |
Preparation, Staining, and Pathology
Scoring Description |
ESTIMATED # OF
SPECIMENS |
COST PER
TEST ($) |
TOTAL $ |
13
Preparation, Staining, and Pathology
Scoring Description |
ESTIMATED # OF
SPECIMENS |
COST PER
TEST ($) |
TOTAL $
|
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| Translational Diagnostic Retrospective Clinical Sample Analysis - Itemized Fixed Costs |
Itemized Laboratory
Services |
Description of Services | Cost | Multiplier |
Total
Cost |
Preparation, Staining, and Pathology
Scoring Description |
ESTIMATED # OF
SPECIMENS |
COST PER
TEST ($) |
TOTAL $ |
15
Itemized Laboratory
Services |
Description of Services | Cost | Multiplier |
Total
Cost |
16
Itemized Laboratory
Services |
Description of Services | Cost | Multiplier |
Total
Cost |
17
18
Estimated Time to | ||||||
Milestones | Details | Complete | Cost | |||
1. Preparation and
Submission of
courtesy submission
to FDA for
Companion
Diagnostic hENT1
Assay (pre-IDE)
|
This includes FTE time from individuals on *Ventanas Core Team. They will develop, submit and discuss a pre-IDE with the FDA for a future PMA submission | *** | *** | |||
2. Perform
statistical
analysis of
Companion
Diagnostic hENT1
trial data
|
This includes FTE time from individuals on Ventanas Core Team. Statistical analysis will be performed on all the data generated to ensure that the most robust data set can be achieved. | *** | *** | |||
3. Databasing
|
Maintenance of data in a quality system that can be audited by the FDA for up to 10 years | *** | *** | |||
4. Write Study
Report for
Companion
Diagnostic hENT1
clinical trial
|
Ventana Core Team will be utilized to write a comprehensive study report from the data generated at all the sites and on all the samples | *** | *** | |||
5. Preparation of
PMA FDA application
for Companion
Diagnostic hENT1
|
Ventanas Core Team will perform a full review of PMA ensuring that all the modules** have been completed. | *** | *** | |||
6. Submission and
support of FDA of
PMA application to
the FDA for
Companion
Diagnostic hENT1
|
Ventanas regulatory group will submit the PMA application | *** | *** | |||
7. Preparation of
Technical File for
CE Mark
|
Ventanas Core Team will prepare the technical file ensuring module conformity | *** | *** | |||
8. Preparation of
Declaration of
Conformity
|
Ventanas Core Team will prepare and a Declaration of conformity for the product | *** | *** | |||
9. Register Product
Through Ventanas
Regulatory Group in
Europe
|
Ventana will have its European regulatory group submit the declaration of conformity for CE mark | *** | *** |
* | Ventana Core Team includes individuals from the following Ventana groups: regulatory, development, scientific affairs, statistics, clinical affair, medical affairs, quality, project management, marketing, manufacturing and members of the executive management team. |
19
** | There are multiple modules and the modules need to be consistent from module-to-module. |
| Invoice Number | ||
| Invoice Date | ||
| Clovis Protocol Number | ||
| Clovis Contract Number | ||
| Department Name | ||
| Account Code | ||
| Project Code (if applicable) |
20
| Description of Service with itemization | ||
| Total Amount Due | ||
| Payee Name and Tax ID Number | ||
| Payment Address | ||
| Contact Person for any Invoice Questions |
|
| Payee: | Ventana Medical Systems, Inc | |||
|
| Tax Payer ID#: | 94-2976937 | |||
|
| Address: | P.O. Box 3232 | |||
|
Carol Stream, IL 60132-3232 |
21
AGREED AND ACCEPTED
|
AGREED AND ACCEPTED | |||||
Clovis Oncology, Inc.
|
Ventana Medical Systems, INC. | |||||
|
||||||
/s/ Patrick J. Mahaffy
|
/s/ Doug Ward
|
|||||
|
||||||
Patrick J. Mahaffy
|
Doug Ward, GMTD
|
|||||
|
||||||
March 23, 2010
|
25-MAR-2010
|
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|
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|
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o | Ventana requisition form | ||
o | Specimen labels | ||
o | Bio-Hazard bag for shipping Paraffin Block | ||
o | 20 SuperFrost Plus Positively Charged microscope slides (depends on # of slides needed per study) | ||
o | 4 slide containers (depends on # of slides needed per study) | ||
o | 1 specimen kit foam padded boxes | ||
o | FedEx air bill | ||
o | Return shipping box |
o | Fine point permanent marking pen for labels | ||
o | Packing tape |
o | Ventana requisition form | ||
o | Specimen labels | ||
o | One 60 ml pre-filled polypropylene container that contains 30 ml of 10% neutral-buffered formalin | ||
o | One tissue cassette | ||
o | One 60 ml polypropylene container 95kPa approved | ||
o | Parafilm | ||
o | Specimen kit box (Foam Padded) | ||
o | Plastic document bag for the completed study requisition form | ||
o | Plastic bio-hazard bag for the polypropylene container and tissue cassette | ||
o | FedEx air bill | ||
o | Return shipping box | ||
o | Vermiculite packaging | ||
o | Return package label to be place on outside of shipping box Package Conforms to 49 CFR 173.4 |
o | Biopsy surgical tools (per institutional and protocol procedures) |
o | Ethanol V W R EM-EX0281-1 (product number) This is 70% Ethanol |
36
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| Group medical, dental and vision insurance plans; | ||
| Medical and dependent care flexible spending accounts; | ||
| 401(k) plan; | ||
| Life insurance plan; | ||
| Short and long term disability insurance plans; and | ||
| Health club membership reimbursement program. |
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Accepted: /s/ Steven Hoerter
|
Date: | August 8, 2011 |
Printed Name: Steven Hoerter
|
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