Exhibit 10.45

 

CONFIDENTIAL

EXECUTION COPY

 

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R §§ 200.80(B)4, AND 240.24B-2

 

COLLABORATION, LICENSE AND DEVELOPMENT AGREEMENT

 

BETWEEN

 

ISIS PHARMACEUTICALS, INC.,

 

AND

 

ASTRAZENECA AB

 

--------------------------------------------------------------------------------

 

COLLABORATION, LICENSE AND DEVELOPMENT AGREEMENT

 

This COLLABORATION, LICENSE AND DEVELOPMENT AGREEMENT (the “Agreement”) is
entered into as of the 7th day of December, 2012 (the “Effective Date”) by and
between ISIS PHARMACEUTICALS, INC., a Delaware corporation, having its principal
place of business at 2855 Gazelle Court, Carlsbad, CA 92010 (“Isis”), and
ASTRAZENECA AB, a company incorporated in Sweden under no. 556011-7482 with
offices at SE-151 85 Södertälje, Sweden (“AstraZeneca”). AstraZeneca and Isis
each may be referred to herein individually as a “Party” or collectively as the
“Parties.” Capitalized terms used in this Agreement, whether used in the
singular or the plural, have the meaning set forth in APPENDIX 1. All attached
appendices and schedules are a part of this Agreement.

 

RECITALS

 

WHEREAS, Isis has expertise in discovering and developing antisense drugs for
cancer and is (i) developing ISIS-STAT3Rx in a Phase 1/2 Trial in patients with
cancer, (ii) working to identify an antisense oligonucleotide targeting the gene
target, [***] for the treatment of cancer, and (iii) conducting drug discovery
efforts for numerous other cancer targets;

 

WHEREAS, AstraZeneca has expertise in developing and commercializing human
therapeutics, and is interested in developing and commercializing ISIS-STAT3Rx,
and drugs targeting [***] and other cancer targets; and

 

WHEREAS, AstraZeneca desires Isis to (i) grant AstraZeneca an exclusive license
to Isis’ STAT3 Program and [***] Program, (ii) conduct research and development
activities for the STAT3 Program and [***] Program, and (iii) collaborate with
Isis to identify a development candidate for each of three separate
cancer-related genes, and with respect to drugs targeting such genes, to grant
an option to exclusively license the programs associated with such genes;

 

NOW, THEREFORE, in consideration of the respective covenants, representations,
warranties and agreements set forth herein, the Parties hereto agree as follows:

 

ARTICLE 1.
STAT3 DEVELOPMENT PROGRAM

 

1.1.                   STAT3 Program Overview. The intent of the STAT3 Program
is (i) for Isis to complete the ongoing Phase 1/2 Trial for ISIS-STAT3Rx; and
(ii) for AstraZeneca to perform all other preclinical, clinical (including
conducting the [***]), regulatory and commercial activities related to STAT3
Products. The purpose of this Section 1.1 is to provide a high-level overview of
the roles, responsibilities, rights and obligations of each Party under this
Agreement with regard to ISIS-STAT3Rx, and therefore this Section 1.1 is
qualified in its entirety by the more detailed provisions of this Agreement set
forth below.

 

2

--------------------------------------------------------------------------------

 

1.2.                   STAT3 Research and Development Responsibilities.

 

1.2.1.                  STAT3 Research and Development Plan Activities;
Timelines. Isis will use Commercially Reasonable Efforts to conduct the Isis
Conducted Activities designated under the STAT3 Research and Development Plan in
accordance with the timelines specified therein, and AstraZeneca will use
Commercially Reasonable Efforts to conduct the AstraZeneca Conducted Activities
designated under the STAT3 Research and Development Plan in accordance with the
timelines specified therein.

 

1.2.2.                  STAT3 Research and Development Plan. The Parties will
continue to develop and refine the STAT3 Research and Development Plan initially
agreed at the Effective Date as needed and update it at least once each six
months, and submit it to the JSC for its review and comment. Subject to
Section 4.1.4, any material changes to the STAT3 Research and Development Plan
must be mutually agreed to by the Parties in accordance with the provisions of
Section 4.1.3. On a rolling basis, the STAT3 Research and Development Plan will
contain activities for at least the next [***], including the key Development
and regulatory decisions for ISIS-STAT3Rx and the key factors that will be
considered when making such Development and regulatory decisions.

 

1.2.3.                  Phase 1/2 Trial.

 

(a)                                 High Response Outcome Analysis. A “High
Response Outcome” is achieved when the [***].

 

(b)                                 Medium Response Outcome Analysis. A “Medium
Response Outcome” is achieved if, [***]. If there has not been a [***] in at
least [***] of the evaluable DLBCL Patients in the Phase 1/2 Trial, then there
has been a “Low Response Outcome.”

 

For purposes of this Agreement, “Durable Response” means [***].  DLBCL Patients
who achieve a Durable Response at [***] of treatment with ISIS-STAT3Rx but who
are discontinued from the Phase 1/2 Trial before 24 weeks of treatment due to
electing to receive a bone marrow transplant (a “BMT Patient”) will be [***];
provided, however, that no more than [***] BMT Patients will be [***] for
purposes of determining whether a High Response Outcome has been achieved and no
more than [***] BMT Patient will be [***] for purposes of determining whether a
Medium Response Outcome has been achieved.

 

(c)                                  Target Knock-Down. “Target Knock-Down”
means [***]. The [***] sample must contain [***]. The [***] sample will be taken
within [***]. Analysis can be based on results from [***].  The JSC will
unanimously decide on [***].  The selected pathology laboratory that conducts
Target Knockdown analysis will report the results of this analysis to the JSC
which will review whether the Target Knockdown criteria have

 

3

--------------------------------------------------------------------------------

 

been achieved.  The success criteria for Target Knock-Down requires [***]. The
JSC will review the [***] on an ongoing basis with respect to quality of
samples, post-treatment sampling time point, and technical challenges associated
with measuring the [***]. If the JSC unanimously agree to a change in the Target
Knock-Down criteria based on this ongoing data review, the criteria to meet the
Target Knock-Down component of the response outcome will be amended. If there is
a High Response Outcome and at least [***], then Target Knock-Down will [***].

 

(d)                     Safety Concern. For purposes of this Agreement, “Safety
Concern” means [***].

 

(e)                      Notice of High Response Outcome, Medium Response
Outcome or Low Response Outcome. Promptly following Isis’ determination that a
High Response Outcome, Medium Response Outcome or Low Response Outcome has
occurred, Isis will provide AstraZeneca with written notice (an “Outcome
Notice”) of whether (i) there is a High Response Outcome (and whether at least
[***]), Medium Response Outcome or Low Response Outcome, (ii) there is a Safety
Concern, and (iii) Target Knock-Down was achieved, and will include with such
Outcome Notice the available components of the Phase 1/2 Trial Data Package.
AstraZeneca may dispute Isis’ determination regarding any of items (i), (ii) or
(iii) described in this Section 1.2.3(e), by providing Isis written notice
thereof within 30 days of AstraZeneca’s receipt of the Outcome Notice (in which
case Section 1.2.4 will apply); otherwise the determinations set forth in the
Outcome Notice will be binding on the Parties.

 

(f)                       AstraZeneca’s Response to the Phase 1/2 Trial Data
Package.

 

(i)                                    If either (a) Target Knock-Down was not
achieved and there was [***]; or (b) there is a Low Response Outcome; or
(c) there is a Safety Concern (in each case whether determined under
Section 1.2.3(e) or the Third Party expert under Section 1.2.4), then within 10
Business Days of the Outcome Notice or determination of the Third Party expert
under Section 1.2.4 (as applicable) if AstraZeneca either (x) provides Isis with
a written notice that it wishes to terminate the license granted by Isis to
AstraZeneca under Section 6.1.1, or (y) does not provide any written notice as
to whether or not it wishes to terminate the license or continue with the
license, the license granted by Isis to AstraZeneca under Section 6.1.1 will
terminate and no milestone payment for ISIS-STAT3Rx will be payable.

 

(ii)                                If either (a) AstraZeneca provides Isis with
a written notice that it wishes to continue with the license under Section 6.1.1

 

4

--------------------------------------------------------------------------------

 

despite its option to terminate its license to STAT3 Products under
Section 1.2.3(f)(i) within the timeline specified therein, or (b) if such
Section 1.2.3(f)(i) does not apply, then in the case of a High Response Outcome,
Medium Response Outcome or Low Response Outcome (in each case whether determined
under Section 1.2.3(e) or the Third Party expert under Section 1.2.4), the
applicable milestone payment under TABLE 1 in Section 8.4 will become due
following such determination, and AstraZeneca will pay Isis such milestone
payment within 30 days after receipt of an invoice from Isis.  In addition, if
there is a Medium Response Outcome, at the next meeting of the JSC, AstraZeneca
will indicate whether it plans to [***].

 

(g)                                 AstraZeneca’s Continued Development
Following Phase 1/2 Trial Data Package. Without limiting Section 1.2.1 or
Section 7.1:

 

(i)                                    If the license granted by Isis to
AstraZeneca under Section 6.1.1 is not terminated under Section 1.2.3(f)(i) and
there is a High Response Outcome (or there is a Medium Response Outcome but
AstraZeneca plans to [***]), then provided Isis has supplied the API to
AstraZeneca in accordance with Section 4.6.1(b)(i), AstraZeneca will initiate a
clinical study for ISIS-STAT3Rx in accordance with the STAT3 Research and
Development Plan within [***] after AstraZeneca’s receipt of such Phase 1/2
Trial Data Package; and

 

(ii)                                If the license granted by Isis to
AstraZeneca under Section 6.1.1 is not terminated under Section 1.2.3(f)(i) and
there is a Medium Response Outcome (and AstraZeneca does not plan to [***]),
provided Isis has supplied the API to AstraZeneca in accordance with
Section 4.6.1(b)(i), AstraZeneca will initiate a Clinical Study within [***]
after AstraZeneca’s receipt of such Phase 1/2 Trial Data Package.

 

(h)                     Subsequent [***] Development within [***] after a Medium
Response Outcome. If AstraZeneca pays Isis the milestone payment under Column 2
of TABLE 1 in Section 8.4 for a Medium Response Outcome, but initiates a
Clinical Study to evaluate ISIS-STAT3Rx as a [***] in DLBCL Patients within
[***] after AstraZeneca’s Initiation of a Clinical Study to evaluate ISIS-STAT3
Rx as a [***] in DLBCL Patients, then (A) within 30 days after AstraZeneca’s
receipt of an invoice from Isis, AstraZeneca will pay Isis an amount equal to
$[***] ([***]), and (B) so long as AstraZeneca is developing or commercializing
ISIS-STAT3Rx as a [***] in DLBCL Patients (i) with respect to any unachieved
milestone events, in lieu of paying Isis the milestone payments under Column 2
of TABLE 1 in Section 8.4, AstraZeneca will pay to Isis the milestone payments
as set forth in

 

5

--------------------------------------------------------------------------------

 

Column 1 of TABLE 1 in Section 8.4 when a milestone event listed in TABLE 1 is
achieved by a STAT3 Product, and (ii) the High Response Outcome royalty rates
set forth in Section 8.8 will apply to STAT3 Products.

 

(i)                        Subsequent [***] Development more than [***] after a
Medium Response Outcome. If AstraZeneca pays Isis the milestone payment under
Column 2 of TABLE 1 in Section 8.4 for a Medium Response Outcome but
subsequently Initiates a Clinical Study to evaluate ISIS-STAT3Rx as a [***] in
DLBCL Patients more than [***] after AstraZeneca’s Initiation of a Clinical
Study to evaluate ISIS-STAT3Rx as a [***] in DLBCL Patients, then AstraZeneca
will continue to pay Isis the milestone payments under Column 2 of TABLE 1 in
Section 8.4, AstraZeneca will have no obligation to pay Isis such $[***] payment
or the milestone payments as set forth in Column 1 of TABLE 1 in Section 8.4,
and the High Response Outcome royalty rates set forth in Section 8.8 will not
apply to STAT3 Products.

 

1.2.4.                  Disputes Regarding High Response Outcome, Medium
Response Outcome, Low Response Outcome, Safety Concern or Target Knock-Down. If
under Section 1.2.3(e) AstraZeneca timely disputes whether (i) a High Response
Outcome, Medium Response Outcome or Low Response Outcome has been achieved
(including whether the [***]), (ii) there is a Safety Concern, or (iii) Target
Knock-Down was achieved, then the Parties will promptly (but no later than 15
days after the dispute arises) engage and refer such dispute to a mutually
agreed upon single, independent Third Party oncologist with expertise in the
area and appropriate professional credentials.  Within 30 days of receiving the
Phase 1/2 Trial Data Package, to the extent disputed by the Parties, such Third
Party expert will determine whether there is a High Response Outcome, Medium
Response Outcome, or Low Response Outcome and whether there is a Safety Concern,
and/or if there is Target Knock-Down. The determination of the Third Party
expert engaged under the preceding sentence will be final and binding on the
Parties. The costs of any Third Party expert engaged under this Section 1.2.4
will be paid by the Party against whose position the Third Party expert’s
determination is made.

 

ARTICLE 2.

[***] RESEARCH AND DEVELOPMENT PROGRAM

 

2.1.                            [***] Program Overview. The intent of the [***]
Program is (i) for Isis to discover a development candidate for [***] and
complete IND-Enabling Toxicology Studies with such development candidate, and
(ii) for AstraZeneca to perform, among other activities, in vitro and in vivo
experiments to support the selection of the [***] Development Candidate, and all
other preclinical, clinical, regulatory and commercial activities related to
[***] Products. The purpose of this Section 2.1 is to provide a high-level
overview of the roles, responsibilities, rights and obligations of each Party
under this Agreement with regard to the [***] Research and Development Plan, and
therefore

 

6

--------------------------------------------------------------------------------

 

this Section 2.1 is qualified in its entirety by the more detailed provisions of
this Agreement set forth below.

 

2.2.                            [***] Research and Development Responsibilities.

 

2.2.1.                  [***] Research and Development Plan Activities;
Timelines. Isis will use Commercially Reasonable Efforts to conduct the Isis
Conducted Activities designated under the [***] Research and Development Plan
(which is attached hereto as APPENDIX 2) in accordance with the timelines
specified therein, and AstraZeneca will use Commercially Reasonable Efforts to
conduct the AstraZeneca Conducted Activities designated under the [***] Research
and Development Plan in accordance with the timelines specified therein. In
addition, with respect to the [***] Program:

 

(a)                                 Isis will use Commercially Reasonable
Efforts to designate an [***] Lead Candidate by [***]; and

 

(b)                                 subject to Section 2.2.3 and
Section 2.2.4, Isis will initiate IND-Enabling Toxicology Studies no later than
[***] after AstraZeneca notifies Isis of the Selection of the [***] Development
Candidate under Section 2.2.3.

 

2.2.2.                  [***] Research and Development Plan. The Parties will
continue to develop and refine the [***] Research and Development Plan initially
agreed at the Effective Date as needed, and update it at least once each six
months, and submit it to the JSC for its review and comment. Subject to
Section 4.1.4, any material changes to the [***] Research and Development Plan
must be mutually agreed to by the Parties in accordance with the provisions of
Section 4.1.3. On a rolling basis, the [***] Research and Development Plan will
contain activities for at least the next [***], including the key Development
and regulatory decisions for the [***] Development Candidate and the key factors
that will be considered when making such Development and regulatory decisions.
In addition, once the [***] Development Candidate is selected under
Section 2.2.3, the JSC will work to establish a plan for IND filing support and
activities, which plan will include a timeline and responsibilities for filing
the IND and will specify that AstraZeneca will [***]. To the extent that
AstraZeneca has not fully used the [***] available to it pursuant to
Section 6.5.1 or Section 7.1.5, then AstraZeneca shall be entitled to allocate
such [***] to the activities to be performed by Isis pursuant to this
Section 2.2.2.

 

2.2.3.                  [***] Development Candidate. Isis will use Commercially
Reasonable Efforts to designate an [***] Lead Candidate by [***]. AstraZeneca
shall be entitled to participate with Isis in the identification of an [***]
Lead Candidate and a back-up and Isis will notify AstraZeneca in writing
promptly after designating an [***] Lead Candidate and, together with such
notice, Isis will provide AstraZeneca the applicable Lead Candidate Data
Package. As promptly as possible (but no later than [***] after AstraZeneca
receives such Lead Candidate Data Package) (such [***] deadline, which
AstraZeneca has determined is sufficient for AstraZeneca to complete its
candidate selection

 

7

--------------------------------------------------------------------------------

 

identification criteria analysis, the “[***] Development Candidate Decision
Deadline”), AstraZeneca will determine whether to select the [***] Lead
Candidate (or another [***] Compound) as the [***] Development Candidate. In
addition, during such [***] period, AstraZeneca will keep the JSC apprised of
AstraZeneca’s progress in making a decision regarding which [***] Compound
AstraZeneca may select as the [***] Development Candidate to enable Isis to plan
as early as possible for manufacturing of the [***] Development Candidate for
IND-Enabling Toxicology Studies. If the JSC determines that any back up [***]
Compound(s) to the proposed [***] Lead Candidate should be considered alongside
the proposed [***] Lead Candidate, then the JSC may unanimously agree to extend
the [***] Development Candidate Decision Deadline if the JSC determines
AstraZeneca should have additional time to consider both candidates before
making a decision as to which may be selected as the [***] Development
Candidate. If AstraZeneca selects the [***] Lead Candidate or any other [***]
Compound as the [***] Development Candidate, then AstraZeneca will notify Isis
of such selection by the [***] Development Candidate Decision Deadline, and will
pay Isis the [***] Development Candidate milestone payment under Section 8.5
within 30 days after AstraZeneca’s receipt of an invoice from Isis. Subject to
Section 2.2.4, if AstraZeneca either (i) provides a written notice that it has
not selected the [***] Lead Candidate or any other [***] Compound as the [***]
Development Candidate by the [***] Development Candidate Decision Deadline or
(ii) does not provide Isis any written notice as to whether or not AstraZeneca
has selected the [***] Lead Candidate or any other [***] Compound as the [***]
Development Candidate by the [***] Development Candidate Decision Deadline, then
the license granted by Isis to AstraZeneca under Section 6.1.2 will terminate
and no milestone payment for such [***] Development Candidate will be payable.

 

2.2.4.                  Failure to Designate an [***] Lead Candidate or Select
an [***] Development Candidate.

 

(a)                                 JSC Decides to Perform Additional Work. If
AstraZeneca has not selected the [***] Lead Candidate or any other [***]
Compound as the [***] Development Candidate by the [***] Development Candidate
Decision Deadline but AstraZeneca informs Isis that it believes further work to
pursue an [***] Development Candidate should be pursued, then, within 30 days
after the [***] Development Candidate Decision Deadline, the JSC may unanimously
decide to pursue further work to identify other [***] Compounds for
consideration as the [***] Development Candidate under a mutually agreed amended
[***] Research and Development Plan, in which case the license granted by Isis
to AstraZeneca under Section 6.1.2  will not terminate as provided in
Section 2.2.3.

 

(b)                                 Isis Fails to Designate an [***] Lead
Candidate by [***]; the JSC Decides Not to Perform Additional Work. If (A) Isis,
having used

 

8

--------------------------------------------------------------------------------

 

Commercially Reasonable Efforts, does not designate an [***] Lead Candidate by
[***], or (B) Isis has designated an [***] Lead Candidate by [***], but
AstraZeneca has not selected the [***] Lead Candidate or any other [***]
Compound as the [***] Development Candidate by the [***] Development Candidate
Decision Deadline and the JSC has not unanimously decided to pursue further work
to identify other [***] Compounds for consideration as the [***] Development
Candidate under a mutually agreed amended [***] Research and Development Plan,
then, if AstraZeneca elects to abandon its rights to [***] and terminate the
license granted by Isis to AstraZeneca under Section 6.1.2, no [***] milestone
payment will be payable but AstraZeneca may elect to add an additional Oncology
Target to the Oncology Collaboration by providing Isis written notice of such
election (together with the gene target AstraZeneca proposes to add to the
Oncology Collaboration, including the gene name and the NCBI accession number or
nucleic acid sequence for such gene target, and any Patent Rights comprised in
AstraZeneca Background IP consistent with the process described in Section 3.3.5
below) on or before (X) [***], in the case of item (A) above, or (Y) within
[***] after the last to occur in item (B) above, as applicable. If AstraZeneca
timely provides Isis with such an election notice, and Isis and AstraZeneca
mutually agree on the proposed target, then, upon Isis’ receipt of AstraZeneca’s
written agreement to be responsible for any Target Encumbrances that Isis
notifies AstraZeneca as being applicable to such proposed target and related
Products, (i) such proposed target will be an Oncology Target and the Oncology
Collaboration will be expanded to a total of four Oncology Targets, (ii) Isis’
obligations and AstraZeneca’s rights under this Agreement with respect to the
[***] Research and Development Plan (including the [***] Development Candidate
and all other [***] Compounds) will terminate, and (iii) the license granted by
Isis to AstraZeneca under Section 6.1.2 will terminate and no [***] milestone
payment will be payable.

 

2.2.5.                  Notice of Completion of IND-Enabling Toxicology Studies;
IND Support Package. Isis will notify AstraZeneca in writing within 30 days
after Isis achieves Completion of the IND-Enabling Toxicology Studies under the
[***] Research and Development Plan and, together with such notice, will deliver
to AstraZeneca the IND Support Package.

 

ARTICLE 3.

ONCOLOGY COLLABORATION; OPTIONS

 

3.1.                            Oncology Collaboration Overview. The intent of
the Oncology Collaboration is (i) for Isis to generate an Oncology Lead
Candidate for each of the Oncology Collaboration Programs, (ii) with respect to
each such Oncology Lead Candidate, for AstraZeneca to perform certain in vitro
and in vivo (animal) experiments to support their designation,

 

9

--------------------------------------------------------------------------------

 

and (iii) for AstraZeneca to conduct IND-Enabling Toxicology Studies with the
Oncology Development Candidate. For each Oncology Collaboration Program,
AstraZeneca will have an exclusive option to further develop and commercialize
Products under an exclusive license from Isis. The purpose of this Section 3.1
is to provide a high-level overview of the roles, responsibilities, rights and
obligations of each Party under this Agreement with regard to the Oncology
Collaboration Programs, and therefore this Section 3.1 is qualified in its
entirety by the more detailed provisions of this Agreement set forth below. Both
Parties agree that while the primary focus of the collaboration is oncology, if
the JSC unanimously agrees, then targets outside oncology could be included in
this Agreement either during the selection process described below or as
Substituted Targets.

 

3.2.                            Oncology Research and Development Plan
Activities and Term.

 

3.2.1.                  Oncology Research and Development Plan Activities;
Timelines. Each Oncology Research and Development Plan will be mutually agreed
to by the Parties, and subject to Section 4.1.4 any material changes to a
Collaboration Plan will be mutually agreed to by the Parties in accordance with
the provisions of Section 4.1.3. Isis will use Commercially Reasonable Efforts
to conduct the Isis Conducted Activities designated under each Oncology Research
and Development Plan in accordance with the timelines specified therein, and
AstraZeneca will use Commercially Reasonable Efforts to conduct the AstraZeneca
Conducted Activities designated under each Oncology Research and Development
Plan in accordance with the timelines specified therein. In addition Isis will
use Commercially Reasonable Efforts to designate an Oncology Lead Candidate with
respect to a particular Oncology Target. Both Parties will use their
Commercially Reasonable Efforts to agree to the Reserved Targets in accordance
with the timelines in Section 3.3.5 and to designate the Oncology Targets in
accordance with the timelines in Section 3.3.6.

 

3.2.2.                  Oncology Collaboration Term. The period during which the
Parties will conduct the Oncology Collaboration (such period, the “Oncology
Collaboration Term”) will begin on the Effective Date and will end on the [***]
anniversary of the Effective Date; provided that if one or both Substitute
Targets are substituted into the Oncology Collaboration in accordance with
Section 3.3.7 below or an additional Oncology Target is added to the Oncology
Collaboration in accordance with Section 2.2.4, then, in order to provide
sufficient time to perform such additional activities with respect to such
Substitute Target or additional Oncology Target, the Oncology Collaboration Term
for all Oncology Collaboration Programs will be extended for an additional [***]
from the date the last Substitute Target or additional Oncology Target was
included in the Oncology Collaboration.

 

3.3.                            Oncology Collaboration.

 

3.3.1.                  Oncology Research and Development Plans. The Oncology
Collaboration

 

10

--------------------------------------------------------------------------------

 

will be carried out in accordance with a written research and development plan
that sets forth all research and development activities of the Parties with
respect to each Oncology Target through AstraZeneca’s Completion of the
IND-Enabling Toxicology Studies (each such plan, an “Oncology Research and
Development Plan”). Each time the Parties have designated one of the three
Oncology Targets in accordance with Section 3.3.6, the JSC will unanimously
agree on an Oncology Research and Development Plan for each such Oncology
Target. Each Oncology Research and Development Plan will include a description
of the specific activities to be performed by the Parties in support of the
Oncology Collaboration Program, the specific criteria to achieve Target Sanction
status for the Oncology Target, the specific activities to be performed to
achieve an Oncology Development Candidate and projected timelines for completion
of such activities. A template Oncology Research and Development Plan for
guidance on the expected activities of each Party is attached hereto as APPENDIX
3, which will be used by the JSC as a starting point when creating each Oncology
Research and Development Plan. The Parties will continue to develop and refine
each Oncology Research and Development Plan initially agreed as needed, and
update it at least once every six months, and submit it to the JSC for its
review and comment.  AstraZeneca will ensure on a rolling basis that each
Oncology Research and Development Plan contains activities for at least the next
[***], including the key Development and regulatory decisions for the Oncology
Development Candidate and the key factors that will be considered when making
such Development and regulatory decisions, and will be consistent in scope with
the STAT3 Research and Development Plan and [***] Research and Development Plan.
For clarity, Isis will not be obligated to initiate work on more than [***]
Oncology Targets (excluding a Substitute Target) in any rolling [***] period
during the Oncology Collaboration Term to ensure even utilization of resources
unless agreed otherwise unanimously by the JSC. Lastly, once an Oncology
Development Candidate is selected under Section 3.3.3, the JSC will work to
establish a plan for IND filing support and activities, which plan will include
a timeline and responsibilities for filing the IND and will specify that
AstraZeneca will reimburse Isis for its time incurred in performing Isis’
designated responsibilities in connection with the IND filing to the extent
those responsibilities are not Isis Conducted Activities, at the FTE rate, and
any of Isis’ reasonable travel expenses for travel requested by AstraZeneca, and
its outside consultants’ costs and consultants’ reasonable travel expenses
incurred by Isis in performing such activities agreed in advance by AstraZeneca.
To the extent that AstraZeneca has not fully used the [***] available to it
pursuant to Section 6.5.1 or Section 7.1.5, then AstraZeneca shall be entitled
to allocate such [***] to the activities to be performed by Isis pursuant to
this Section 3.3.1.

 

3.3.2.                  Target Sanction. The JSC will determine if an Oncology
Target has achieved Target Sanction status based on the specific criteria
determined by the JSC.  The JSC will record in the minutes of the JSC each time
an Oncology Target

 

11

--------------------------------------------------------------------------------

 

has achieved Target Sanction status.

 

3.3.3.                  Oncology Development Candidate Selection. Isis will
notify AstraZeneca in writing promptly after designating an Oncology Lead
Candidate and, together with such notice, Isis will provide AstraZeneca the
applicable Lead Candidate Data Package. As promptly as possible (but no later
than [***] after AstraZeneca receives such Lead Candidate Data Package) (each
such [***] deadline, which AstraZeneca has determined is sufficient for
AstraZeneca to complete its candidate selection identification criteria
analysis, an “Oncology Development Candidate Decision Deadline”), AstraZeneca
will determine whether to select the Oncology Lead Candidate (or another
Oncology Compound) as an Oncology Development Candidate. In addition, during
such [***] period, AstraZeneca will keep the JSC apprised of AstraZeneca’s
progress in making a decision regarding which Oncology Compound AstraZeneca may
select as the Oncology Development Candidate to enable Isis to plan as early as
possible for manufacturing of the Oncology Development Candidate for
IND-Enabling Toxicology Studies. If the JSC determines that any back up Oncology
Compound to the proposed Oncology Lead Candidate should be considered alongside
the proposed Oncology Lead Candidate, then the JSC may unanimously agree to
extend the Oncology Development Candidate Decision Deadline if the JSC
determines AstraZeneca should have additional time to consider both candidates
before making a decision as to which may be selected as the Oncology Development
Candidate. If AstraZeneca selects the Oncology Lead Candidate or any other
Oncology Compound as an Oncology Development Candidate, then AstraZeneca will
notify Isis of such selection by the Oncology Development Candidate Decision
Deadline, and will pay Isis the Designation of Oncology Development Candidate
milestone payment under Section 8.6 within 30 days after AstraZeneca’s receipt
of an invoice from Isis. In addition, provided Isis has supplied the API to
AstraZeneca in accordance with Section 4.6.1(b)(iii), AstraZeneca will initiate
IND-Enabling Toxicology Studies under the applicable Oncology Research and
Development Plan no later than [***] days after AstraZeneca pays Isis the
Designation of Oncology Development Candidate milestone payment under
Section 8.6.

 

If AstraZeneca either (i) does not provide Isis written notice that AstraZeneca
has selected the Oncology Lead Candidate or any other Oncology Compound as the
Oncology Development Candidate by the Oncology Development Candidate Decision
Deadline, or (ii), provides Isis written notice that AstraZeneca has not
selected the Oncology Lead Candidate or any other Oncology Compound as the
Oncology Development Candidate by the Oncology Development Candidate Decision
Deadline, then such Oncology Collaboration Program will no longer be a part of
this Agreement and AstraZeneca’s Option for (and Isis’ obligations with respect
to) such Oncology Collaboration Program will terminate and no milestone payments
for such Oncology Collaboration Program will be payable.

 

12

--------------------------------------------------------------------------------

 

3.3.4.                  Notice of Completion of IND-Enabling Studies; IND
Support Package. AstraZeneca will notify Isis in writing within 30 days after
each time Completion of the IND-Enabling Toxicology Studies is achieved under an
applicable Oncology Research and Development Plan and, together with such
notice, will deliver to Isis the applicable IND Support Package, always provided
that the Parties may mutually agree that an IND-Enabling Toxicology Study should
not be completed (for example if there is an unacceptable toxicity in the
study).

 

3.3.5.                  Reserved Targets. The Parties will select certain gene
targets to be reserved (each such reserved gene target, a “Reserved Target”) for
potential selection as Oncology Targets under this Agreement according to the
following schedule:

 

(a)                                 Within [***] after the Effective Date, Isis
and AstraZeneca will mutually agree on a pool of [***] oncology gene targets to
be reserved for selection of the first Oncology Target under this Agreement;

 

(b)                                 Within [***] after the Effective Date, Isis
and AstraZeneca will mutually agree on a second pool of [***] oncology gene
targets to be reserved for selection of the second Oncology Target under this
Agreement; and

 

(c)                                  Within [***] after the Effective Date, Isis
and AstraZeneca will mutually agree on a third pool of [***] oncology gene
targets to be reserved for selection of the third Oncology Target under this
Agreement.

 

As part of the process for determining which gene targets will be reserved as
Reserved Targets for potential selection as Oncology Targets, during the
relevant time periods described above during which the Parties will consider
gene targets to be Reserved Targets, AstraZeneca will inform Isis (A) if any of
AstraZeneca’s JSC or JPC members have knowledge (without conducting any
additional investigation) of any additional Third Party licenses or other
intellectual property rights that AstraZeneca requires in order for AstraZeneca
to conduct its obligations under the Collaboration Plans if such Reserved Target
was selected as an Oncology Target, and (B) if any Patent Rights comprised in
AstraZeneca Background IP relate to any proposed gene targets, and whether
AstraZeneca has the ability to grant a license or sublicense hereunder to such
Patent Rights without violating the terms of any agreement with any Third Party.
If AstraZeneca reports any of the conditions set forth in (A) or (B) of this
Section 3.3.5(c) exist, then unless otherwise agreed by the Parties, such gene
target will not be reserved as a Reserved Target for potential selection as an
Oncology Target. Within [***] days after the Parties agree upon each pool of
[***] Reserved Targets, Isis will inform AstraZeneca of any known encumbrances
related to the Reserved Targets under any Third Party agreement to which Isis or
its Affiliate is a party, including any payment obligations such as milestone
and royalty payments (such encumbrances for which AstraZeneca is so notified,
the “Target Encumbrances”). The JSC will maintain the list of Reserved Targets
and will attach to the minutes of the JSC meeting any changes to such list of
Reserved Targets.

 

13

--------------------------------------------------------------------------------

 

3.3.6.                  Selection of the Three Oncology Targets. Within [***]
after a designation of a pool of [***] Reserved Targets under
Section 3.3.5, Isis and AstraZeneca will mutually agree on and designate one
Reserved Target to be an Oncology Target that is the subject of an Oncology
Collaboration Program. After selecting the Oncology Target, the remaining [***]
unselected Reserved Targets will no longer be Reserved Targets, and Isis’
obligations and AstraZeneca’s rights under this Agreement with respect to such
Reserved Targets (including but not limited to Section 5.1) will terminate.
AstraZeneca will be responsible for any payment obligations arising from the
Target Encumbrances identified in accordance with Section 2.2.4(b),
Section 3.3.5 or Section 3.3.7 (other than Isis Supported Pass-Through Costs)
applicable to such Oncology Targets and related Products. If Isis fails to
notify AstraZeneca of a Target Encumbrance in accordance with Section 2.2.4(b),
Section 3.3.5 or Section 3.3.7, such un-notified Target Encumbrance shall remain
the responsibility of Isis. For clarity, this process will occur [***] times to
nominate the [***] Oncology Targets and be complete no later than [***] from the
Effective Date, and is illustrated in SCHEDULE 3.3.6, after which any remaining
Reserved Targets will no longer be Reserved Targets.

 

3.3.7.                  Rights of Substitution.

 

(a)                                 Generally. At any time during the first
[***] years of the Oncology Collaboration Term, AstraZeneca will have the right,
subject to the limits set forth below, to propose that research and development
activities be discontinued with respect to an Oncology Target for which [***] (a
“Discontinued Target”), and to propose that a new oncology target be substituted
for such Discontinued Target in accordance with the procedures set out below in
Section 3.3.7(b) (such notice, a “Substitute Notice” and such newly proposed
oncology target, a “Proposed Substitute Target”).

 

(b)                                 Proposing the Substitute Target. Within 30
days after Isis’ receipt of a Substitute Notice, Isis and AstraZeneca will
discuss and mutually agree whether such Proposed Substitute Target will become
an Oncology Target. Isis will, within [***] days after Isis’ receipt of any
Substitute Notice, inform AstraZeneca of any Target Encumbrances applicable to
the Proposed Substitute Target. If Isis and AstraZeneca mutually agree that the
Proposed Substitute Target will become an Oncology Target, then such Proposed
Substitute Target (a “Substitute Target”) will become an Oncology Target upon
(i) Isis’ receipt of AstraZeneca’s written agreement to be responsible for any
payment obligations arising from the Target Encumbrances identified in
accordance with this Section 3.3.7(b) (other than Isis Supported Pass-Through
Costs) applicable to such Substitute Target and related Products, and (ii) if
the Substitute Target is substituted in as an Oncology Target after the
Discontinued Target achieved Target Sanction status, Isis’ receipt of the
payment in accordance with Section

 

14

--------------------------------------------------------------------------------

 

3.3.7(d) below. For clarity, any Discontinued Target will no longer be an
Oncology Target and will therefore no longer be a part of the Oncology
Collaboration under this Agreement, and Isis’ obligations and AstraZeneca’s
rights under this Agreement with respect to such Discontinued Target (including
but not limited to Section 5.1.1) will terminate.

 

(c)                                  Number of Substitute Targets.
Notwithstanding anything to the contrary contained in this Agreement, in no
event will AstraZeneca have the right to designate more than [***] Substitute
Targets under this Section 3.3.7; provided that no more than [***] of such [***]
Substitute Targets can be substituted in for an Oncology Target that has reached
[***] status.

 

(d)                                 Payment for the Substitute Target. If a
Substitute Target is substituted in as an Oncology Target after [***] status for
a Discontinued Target under this Section 3.3.7, AstraZeneca will pay Isis $[***]
within 30 days after such Substitute Target is substituted in as an Oncology
Target.

 

3.3.8.                  Oncology Research and Development Plans. If a Substitute
Target is substituted in under Section 3.3.7, within 30 days after such
substitution the Parties will mutually agree on an Oncology Research and
Development Plan for such new Oncology Target using the template Oncology
Research and Development Plan attached hereto as APPENDIX 3 as a starting point,
subject to review and comment by the JSC, and remove any Oncology Research and
Development Plan with respect to the Discontinued Target.

 

3.4.                            Expiration of Oncology Collaboration Term. On an
Oncology Collaboration Program-by-Oncology Collaboration Program basis, if,
despite the Parties’ Commercially Reasonable Efforts, by the expiration of the
Oncology Collaboration Term, Isis has not designated an Oncology Lead Candidate
with respect to a particular Oncology Target, then (i) the Parties’ will no
longer have an obligation to perform any activities under this ARTICLE 3 with
respect to such Oncology Collaboration Program; (ii) any Oncology Collaboration
Program that has not reached the Development Candidate stage will no longer be
considered an Oncology Collaboration Program and the applicable gene target
associated therewith will no longer be an Oncology Target under this Agreement;
(iii) the Parties’ respective obligations and AstraZeneca’s rights under this
Agreement with respect to such Oncology Target and any Compounds targeting such
Oncology Target will then terminate, and Isis will be free to Develop and
Commercialize on its own or with a Third Party such Oncology Target and any ASOs
targeting such Oncology Target; (iv) Isis will have exclusive rights (and
AstraZeneca will, and hereby does grant Isis an exclusive license) to all data,
results and information generated under the Oncology Collaboration Program for
such Oncology Target to research, develop, manufacture and commercialize ASOs
targeting such Oncology Target and AstraZeneca will promptly transfer to Isis
copies of all such data, results and information in AstraZeneca’s possession,
provided that if within five years after the expiration of the Oncology
Collaboration Term for such Oncology Target, Isis is not Developing ASOs for
such Oncology Target, such rights and license shall become non-

 

15

--------------------------------------------------------------------------------

 

exclusive and (v) AstraZeneca will and hereby does grant Isis an irrevocable,
royalty free non exclusive license to any Know-How and/or Patent Rights
generated by AstraZeneca under the Oncology Collaboration Program for such
Oncology Target to research, develop, manufacture and commercialize ASOs
targeting such Oncology Target.  With regard to the Jointly-Owned Collaboration
Technology for such Oncology Collaboration Program, Isis will control the
Jointly-Owned Patents that result, and AstraZeneca will assign ownership to Isis
on condition that Isis grants AstraZeneca an irrevocable, royalty-free,
non-exclusive license for any purpose. For clarity, except to the extent
expressly set forth in the foregoing, the expiration of the Oncology
Collaboration Term will not affect the Parties’ respective rights and
obligations with respect to any Oncology Collaboration Program that has reached
the Development Candidate stage by the end of the Oncology Collaboration Term
and for which AstraZeneca has timely exercised its Option under Section 3.5.

 

3.5.                            Options. On an Oncology Target-by-Oncology
Target basis, AstraZeneca has an exclusive option which it may exercise at any
time on or before 5:00 p.m. (Pacific time) on the [***] day (each, an “Option
Deadline”) following the earlier of (i) [***], or (ii) [***] (each, an “Option”)
to obtain from Isis the license set forth in Section 6.1.3 below. AstraZeneca
will notify Isis whether AstraZeneca is exercising its Option to license the
applicable Oncology Target (and all Products included in the applicable Oncology
Collaboration Program) by notifying Isis in writing on or before the applicable
Option Deadline.

 

3.5.1.                  If AstraZeneca notifies Isis in writing by the Option
Deadline that AstraZeneca is exercising the Option, AstraZeneca shall pay Isis
the license fee set forth in Section 8.2 within 30 days after AstraZeneca’s
receipt of an invoice from Isis for such license fee, and Isis will, and hereby
does, grant to AstraZeneca the license set forth in Section 6.1.3 below.

 

3.5.2.                  If AstraZeneca either (i) notifies Isis in writing by
the Option Deadline that AstraZeneca is not exercising the Option, or (ii) does
not provide any written notice to Isis by the Option Deadline as to whether or
not AstraZeneca is exercising the Option, then AstraZeneca’s Option will expire
and no license fee is payable under Section 8.2 with respect to such Option. In
such a case, AstraZeneca will have no further rights to (and Isis will have no
further obligations with respect to) such Oncology Target (including all
Compounds included in the applicable Oncology Collaboration Program) and the
gene target to which such Compounds are directed will no longer be an Oncology
Target. Following any expiration of an Option under this Section 3.5.2, subject
to agreeing otherwise as provided in Section 3.3.4, AstraZeneca will [***] and,
upon [***], will promptly transfer to Isis all data, results and information
related to the testing and studies with respect to the applicable Oncology
Target in the possession of AstraZeneca and its contractors.

 

16

--------------------------------------------------------------------------------

 

ARTICLE 4.

COLLABORATION MANAGEMENT; ADMINISTRATION; COSTS AND EXPENSES AND MANUFACTURING

 

4.1.                   Collaboration Management.

 

4.1.1.                  JSC. The Parties will establish a joint steering
committee (“JSC”) for the STAT3 Program, [***] Program, and the Oncology
Collaboration Programs, to provide advice and make recommendations on the
conduct of activities under the respective Collaboration Plans, which advice and
recommendations will be consistent with each Collaboration Plan. The JSC will
consist of three representatives appointed by Isis and three representatives
appointed by AstraZeneca. Each JSC member will be a senior development leader or
have similar experience and expertise as a senior development leader. Each Party
will designate one of its three representatives who is empowered by such Party
to make decisions related to the performance of such Party’s obligations under
this Agreement to act as the co-chair of each JSC. The co-chairs will be
responsible for overseeing the activities of its JSC consistent with the
responsibilities set forth in Section 4.1.2. SCHEDULE 4.1.1 sets forth certain
JSC governance matters agreed to as of the Effective Date. The JSC will
determine the JSC operating procedures at its first meeting, including the JSC’s
policies for replacement of JSC members, policies for participation by
additional representatives or consultants invited to attend JSC meetings, and
the location of meetings, which will be codified in the written minutes of the
first JSC meeting. Each Party will be responsible for the costs and expenses of
its own employees or consultants attending JSC meetings.

 

4.1.2.                  Role of the JSC. Without limiting any of the foregoing,
the JSC will perform the following functions, some or all of which may be
addressed directly at any given JSC meeting:

 

(a)                                 Maintain the list of Reserved Targets;

 

(b)                                 Maintain the list of Oncology Targets that
are the subject of the Oncology Collaboration Programs;

 

(c)                                  Set the Target Sanction criteria for each
Oncology Target;

 

(d)                                 Consider whether and for how long a back up
candidate for the [***] Lead Candidate or the Oncology Lead Candidate shall be
considered in parallel with the [***] Lead Candidate or Oncology Lead Candidate
(as applicable).

 

(e)                                  Create each Oncology Research and
Development Plan using the template attached hereto as APPENDIX 3 as a starting
point;

 

17

--------------------------------------------------------------------------------

 

(f)                                   review the overall progress of the
activities under the applicable Collaboration Plan, including forecasts of costs
associated with supplies of API/finished Product;

 

(g)                                 review and provide advice on the applicable
Collaboration Plan;

 

(h)                                 subject to Section 4.1.3(a), materially
amend the applicable Collaboration Plan upon unanimous consent; and

 

(i)                                    such other review and advisory
responsibilities as may be assigned to the JSC pursuant to this Agreement.

 

4.1.3.                  Collaboration Program Decision Making.

 

(a)                                 AstraZeneca shall have the final decision
making authority with respect to amendments to a Collaboration Plan which are
not material as provided in Section 4.1.3(b).

 

(b)                                 A proposed amendment to a Collaboration Plan
shall be regarded as material for the purposes of this Section 4.1.3 if it would
result in either (i) [***], or (ii) [***].

 

(c)                                  If a proposed material amendment to a
Collaboration Plan cannot be unanimously agreed to by the JSC or the Parties and
the change could be materially detrimental to the further development of a
Product then the co-chairs shall continue to revise the Collaboration Plan until
such time as a unanimous decision can be reached, and at any time either Party
may refer the matter to the Senior Representatives in accordance with
Section 14.1, which Senior Representatives shall be asked to use their good
faith efforts to mutually agree on an acceptable way forward. Once the matter
has been referred to the Senior Representatives, if after negotiating in good
faith pursuant to Section 14.1.1, undertaken with reasonable promptness and
including a detailed comparison of the proposed amendment to the Collaboration
Plan against the AstraZeneca performance metrics described in the document
provided by AstraZeneca to Isis entitled [***] attached hereto as SCHEDULE
4.1.3(c), the Senior Representatives fail to reach an amicable agreement within
90 days, then AstraZeneca shall have the final decision making authority (1) if
[***], or (2) if [***], or (3) if [***].

 

(d)                                 “Initial Research and Development Plan”
means, as applicable (i) the STAT3 Research and Development Plan or [***]
Research and Development Plan (as each such plan is attached to this Agreement
on the Effective Date) or (ii) with respect to each Oncology Development
Candidate, the first Oncology Research and Development Plan agreed to by the
Parties following designation of such Oncology Development Candidate.

 

18

--------------------------------------------------------------------------------

 

(e)                                  Isis and AstraZeneca will conduct the
Collaboration Plans giving due consideration to the recommendations and advice
of the JSC, in accordance with their obligations under Section 1.2.1,
Section 2.2.1 and Section 3.3.1. With respect to the STAT3 Research and
Development Plan, [***] Research and Development Plan and each Oncology Research
and Development Plan agreed to by the Parties following designation of the
applicable Oncology Development Candidate, AstraZeneca will have the final
decision-making authority regarding the [***], and [***].

 

(f)                                   Notwithstanding the foregoing, in all
cases where AstraZeneca has final decision making authority Isis will have no
obligation to perform any activity that (A) [***], (B) [***], or (C) [***].

 

4.1.4.                  Term of the JSC. Isis’ obligation to participate in
relation to a Collaboration Plan in the JSC will terminate on the date Isis
completes all the Isis Conducted Activities under such Collaboration Plan.
Thereafter, Isis will have the right, but not the obligation, to participate in
the JSC meetings in relation to such Collaboration Plan upon Isis’ request.
After the [***] for a Product specified in the Collaboration Plan, in respect of
such Collaboration Plan, the JSC shall cease to be responsible for making
decisions (and for the avoidance of doubt, without limiting the foregoing, the
provisions of Section 4.1.3 shall cease to apply) and AstraZeneca shall have
full decision making authority and may make amendments to such Collaboration
Plan (including with respect to the [***] program under such Collaboration
Plan), subject to AstraZeneca’s continuing obligation to use Commercially
Reasonable Efforts under this Agreement; provided, however, that, with respect
to the [***] for such Product, AstraZeneca’s decision making will be consistent
with the Collaboration Plan approved by the JSC at the time such [***] (taking
into consideration [***]). The JSC shall become a forum for the Parties to share
information regarding the Collaboration Plan and the Product, and the Parties
shall decide on the number and frequency of meetings required of the JSC in
respect of such Collaboration Plan in its new role.

 

4.2.                            Alliance Managers. Each Party will appoint a
representative to act as its alliance manager (each, an “Alliance Manager”).
Each Alliance Manager will be responsible for supporting the JSC and performing
the activities listed in SCHEDULE 4.2.

 

4.3.                            Disclosure of Results. Each Party will promptly
disclose to the other Party the results of all work performed by the Parties
under the Collaboration Plans in a reasonable manner as such results are
obtained. Isis and AstraZeneca will provide reports and analyses at each JSC
meeting, and more frequently on reasonable request by the JSC, detailing the
current status of each Collaboration Plan. The results, reports, analyses and
other information regarding the Collaboration Plans disclosed by one Party to
the other Party pursuant hereto may be used only in accordance with the rights
granted and other terms and conditions under this Agreement. Any reports
required, excluding reports

 

19

--------------------------------------------------------------------------------

 

needed for submission to a Regulatory Agency, under this Section 4.3 may take
the form of and be recorded in minutes of the JSC that will contain copies of
any slides relating to the results and presented to the JSC. Reports needed to
support regulatory submissions and updates to a Regulatory Agency will be
provided in a timely manner and in a format consistent with industry practice as
agreed upon by the JSC.

 

4.4.                            Materials Transfer. In order to facilitate the
activities under the Collaboration Plans, either Party may provide to the other
Party certain materials for use by the other Party in furtherance of the
Collaboration Plans. All such materials will be used by the receiving Party in
accordance with the terms and conditions of this Agreement solely for purposes
of exercising its rights and performing its obligations under this Agreement,
and the receiving Party will not transfer such materials to any Third Party
unless expressly contemplated by this Agreement or upon the written consent of
the supplying Party. Except as expressly set forth herein, THE MATERIALS ARE
PROVIDED “AS IS” AND WITHOUT ANY REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, INCLUDING ANY IMPLIED WARRANTY OF MERCHANTABILITY OR OF FITNESS FOR ANY
PARTICULAR PURPOSE OR ANY WARRANTY THAT THE USE OF THE MATERIALS WILL NOT
INFRINGE OR VIOLATE ANY PATENT OR OTHER PROPRIETARY RIGHTS OF ANY THIRD PARTY.

 

4.5.                            Collaboration Costs and Expenses.

 

4.5.1.                  STAT3 Program and [***] Program.

 

(a)                                 R&D Research and Development Plan Costs.
Except as otherwise provided below and under Section 4.5.1(b), Isis will be
responsible for all costs and expenses associated with the Isis Conducted
Activities designated under the R&D Research and Development Plan, and
AstraZeneca will be responsible for all costs and expenses associated with any
AstraZeneca Conducted Activities designated under the R&D Research and
Development Plan. With respect to the [***] Program, Isis will be responsible
for providing API to AstraZeneca in accordance with Section 4.6.1.

 

(b)                                 Other STAT3 Program and [***] Program Costs.

 

(i)                                    Under the R&D Research and Development
Plan. AstraZeneca will be responsible for paying Isis any costs and expenses
associated with Isis’ regulatory support and safety reporting work for the [***]
([***]) and, in accordance with Section 4.6.1, the cost of the API and finished
Product for the [***]. In addition, AstraZeneca will be responsible for paying
as a lump sum any Additional Plan Costs resulting from AstraZeneca-Initiated
Changes. Isis will permit AstraZeneca to review and approve the Additional Plan
Costs before implementing any AstraZeneca-Initiated Changes. Isis and
AstraZeneca will update the R&D Research and

 

20

--------------------------------------------------------------------------------

 

                                                Development Plan with any such
revised studies and Isis will invoice AstraZeneca for any such approved
Additional Plan Costs within 30 days after such Additional Plan Costs are
approved. AstraZeneca will pay the invoices submitted pursuant to this
Section 4.5.1(b)(i) for such [***]-related work costs and approved Additional
Plan Costs within 30 days after AstraZeneca’s receipt of the applicable invoice.

 

(ii)                                Generally. Except as otherwise provided
under this Section 4.5.1, AstraZeneca will be solely responsible for the costs
and expenses related to the Development, Manufacture and Commercialization of
STAT3 Products and [***] Products, including the AstraZeneca Conducted
Activities.

 

4.5.2.                  Oncology Collaboration Program Costs and Expenses.

 

(a)                                 Oncology Research and Development Plan Costs
Paid by Isis. Until AstraZeneca exercises the Option for a particular Oncology
Collaboration Program, except as otherwise provided under Section 3.3.4 or
Section 4.5.2(b), Isis will be responsible for all costs and expenses associated
with the Isis Conducted Activities designated under each Oncology Research and
Development Plan and AstraZeneca will be responsible for all costs and expenses
associated with the AstraZeneca Conducted Activities designated under each
Oncology Research and Development Plan. With respect to each Oncology
Collaboration Program, Isis will be responsible for providing API to AstraZeneca
in accordance with Section 4.6.1.

 

(b)                                 Oncology Research and Development Plan Costs
Paid by AstraZeneca.

 

(i)                                    Before Option Exercise. Before Option
exercise, AstraZeneca will be responsible for all costs and expenses associated
with the AstraZeneca Conducted Activities designated under each Oncology
Research and Development Plan. In addition, AstraZeneca will be responsible for
paying as a lump sum any Additional Plan Costs resulting from
AstraZeneca-Initiated Changes. Isis will permit AstraZeneca to review and
approve the Additional Plan Costs before implementing any AstraZeneca-Initiated
Changes. Isis and AstraZeneca will update the applicable Oncology Research and
Development Plan with any such revised studies and Isis will invoice AstraZeneca
for any such approved Additional Plan Costs within 30 days after such Additional
Plan Costs are approved. AstraZeneca will pay the invoices submitted pursuant to
this Section 4.5.2(b)(i) for such approved Additional Plan Costs within 30 days
after AstraZeneca’s receipt of the applicable invoice.

 

21

--------------------------------------------------------------------------------

 

(ii)                                After Option Exercise. After Option
exercise, AstraZeneca will be solely responsible for the costs and expenses
related to the Development, Manufacture and Commercialization of Products,
including all AstraZeneca Conducted Activities.

 

4.6.                            Collaboration Manufacturing and Supply.

 

4.6.1.                  Supplies for Activities under the Collaboration Plans.

 

(a)                                 Isis Conducted Activities. [***], Isis will
supply API and finished Product sufficient to support the Isis Conducted
Activities designated under a given Collaboration Plan, including but not
limited to the API to support the IND Enabling Toxicology Studies for the [***]
Program.

 

(b)                                 AstraZeneca Conducted Activities. In
addition, with respect to the AstraZeneca Conducted Activities, Isis will supply
(the “Initial Supply”):

 

(i)                                    STAT3 Program Supply. API and finished
Product sufficient to support the [***] that will be conducted by AstraZeneca
under the STAT3 Research and Development Plan;

 

(ii)                                [***] Program Supply. The quantity of API
[***] (which will be set forth in the [***] Research and Development Plan) to
support the [***] for the [***] Development Candidate; and

 

(iii)                            Oncology Programs. The quantity of API [***]
for each Oncology Development Candidate, and the quantity of API [***] (which
will be set forth in the applicable Oncology Research and Development Plan) for
each Oncology Development Candidate.

 

In each of the foregoing cases in this Section 4.6.1(b), AstraZeneca will pay
Isis for such API and/or finished Product at [***], within 60 days after
AstraZeneca’s receipt of the applicable invoice. Other than the finished Product
sufficient to support the [***] under the STAT3 Research and Development Plan,
AstraZeneca is responsible for supplying finished Product for all AstraZeneca
Conducted Activities. In addition, should AstraZeneca require additional API or
research-grade Compound for the STAT3 Program or the [***] Program for
pre-clinical studies in [***] not covered by the STAT3 or [***] Research and
Development Plan or in connection with the Oncology Research and Development
Plans, then, at AstraZeneca’s reasonable request, Isis will use its reasonable
endeavors to provide (A) such API to AstraZeneca at [***], or (B) such
research-grade Compound for such [***] studies [***] of such Compound (and for
any additional quantities of research-grade Compound, at [***].

 

22

--------------------------------------------------------------------------------

 

It is intended that the API lot used for [***] under a given Collaboration Plan
will be of sufficient size to also use in the [***] of the relevant Product.

 

(c)                                  Initial Supply Payment and Delivery
Schedule. The Parties will mutually agree on the respective delivery and payment
schedule for the Initial Supply consistent with the applicable Collaboration
Plan.

 

(d)                                 Manufacturing Services Agreement. Each of
the Parties agrees and acknowledges that a mutually agreed manufacturing
services agreement (“MSA”) is required to be put in place to govern the supply
arrangements by Isis, which shall be negotiated in good faith between the
Parties following the Effective Date. The Parties’ objective is that the MSA
shall be entered into within [***] after the Effective Date and shall include,
amongst other appropriate and detailed provisions, the provisions set out in
Schedule 4.6.1(d).

 

4.6.2.                  After Isis Completes the Isis Conducted Activities. Once
Isis completes the Isis Conducted Activities designated under a given
Collaboration Plan, in addition to the Initial Supply, Isis will sell to
AstraZeneca, if AstraZeneca desires, any other inventory of cGMP API, finished
Product and packaged clinical trial material in Isis’ possession [***]. In
addition, if requested by AstraZeneca, Isis will negotiate in good faith to
provide:

 

(a)              additional API supply for [***], and

 

(b)              if AstraZeneca [***].

 

4.7.                            Applicable Laws and Bioethics. The Research to
be conducted by each Party (including by its subcontractors) pursuant to this
Agreement shall be carried out in good scientific manner, and in compliance with
all Applicable Laws, as well as the AstraZeneca bioethics policy attached at
SCHEDULE 4.7, to attempt to achieve efficiently and expeditiously the objectives
of the applicable Collaboration Plan. In respect of any Isis Conducted
Activities to be initiated after the Effective Date, Isis and AstraZeneca will
mutually agree on [***] and, prior to award of the work, shall work together to
secure compliance with AstraZeneca’s bioethics policy. Where a [***], the
Parties will discuss and agree whether such [***]. Insofar as the requirements
of complying with such policy will result in additional [***] costs being
charged to Isis for work [***] for Isis Conducted Activities, compared to [***],
AstraZeneca agrees to be responsible for such additional costs [***]. The
Parties will agree when such costs will be invoiced by Isis and AstraZeneca will
pay such costs to Isis within 60 days after AstraZeneca’s receipt of an invoice
from Isis. The Parties’ agreement under this Section 4.7 can be through the JSC.

 

23

--------------------------------------------------------------------------------

 

ARTICLE 5.
EXCLUSIVITY COVENANTS

 

5.1.                            Exclusivity Covenants.

 

5.1.1.                  Isis’ and AstraZeneca’s Exclusivity Covenants. Except in
the performance of its obligations under this Agreement and except as set forth
in Section 5.1.2 or Section 5.1.3, on a Gene Target-by-Gene Target basis, Isis
and AstraZeneca will not work independently or for or with any of its Affiliates
or any Third Party (including the grant of any license to any Third Party) with
respect to:

 

(a)                                 STAT3 and [***]. (A) The discovery, research
or development of an ASO that is designed to bind to the RNA that encodes STAT3
or [***] in the Field until [***]; and (B) on a country-by-country basis,
commercializing an ASO that is designed to bind to the RNA that encodes STAT3 or
[***] in the Field until [***];

 

(b)                                 Reserved Targets. The discovery, research or
development of an ASO that is designed to bind to the RNA that encodes any of
the Reserved Targets, from the date each such oncology gene target becomes a
Reserved Target under Section 3.3.5 until the date such Reserved Target ceases
to be a Reserved Target by operation of Section 3.3.6;

 

(c)                                  Oncology Targets During the Option Period.
The discovery, research or development of an ASO that is designed to bind to the
RNA that encodes any Oncology Target, from the date each Oncology Target is
agreed to by the Parties until the earlier of the date (y) AstraZeneca exercises
the applicable Option for such Oncology Target, or (z) such Option expires
unexercised or is terminated; and

 

(d)                                 Oncology Targets After Option Exercise. The
discovery, research or development of an ASO that is designed to bind to the RNA
that encodes an Oncology Target in the Field for which AstraZeneca has exercised
its Option in accordance with this Agreement, (A) with respect to discovery,
research or development of an ASO that is designed to bind to the RNA that
encodes such Oncology Target, until [***], and (B) on a country by country basis
with respect to commercialization of an ASO that is designed to bind to the RNA
that encodes such Oncology Target in the Field, until [***].

 

5.1.2.                  Isis Follow-On Products. Notwithstanding the provisions
of Section 5.1.1, on a Gene Target-by-Gene Target basis, if (A) AstraZeneca does
not ask Isis to identify a follow-on product for a Gene Target by [***], or
(B) Isis identifies a follow-on product for a Gene Target at AstraZeneca’s
request, but thereafter AstraZeneca does not use Commercially Reasonable Efforts
to continue to develop and commercialize such follow-on compound, then Isis (for
itself or with or for a Third Party) will be permitted to (i) discover, research
and

 

24

--------------------------------------------------------------------------------

 

develop an ASO designed to bind to the RNA that encodes such Gene Target that is
not the Product being developed by AstraZeneca (an “Isis Follow-On Product”),
and (ii) after [***] for a Product, commercialize an Isis Follow-On Product.

 

5.1.3.                  Limitations and Exceptions to Each Party’s [***] Rights.

 

(a)                                 Exception and Limitations. The Parties
acknowledge and agree that, in addition to playing a role in cancer, the gene
target, [***], is also known to potentially play a role outside of oncology
(e.g., [***]), and therefore targeting [***] with an [***] ASO is a possible
approach for the treatment of non-oncology diseases. In exchange for
AstraZeneca’s agreement to not develop or commercialize an ASO targeting [***]
for [***] and to not develop or commercialize an [***] for [***], Isis has
agreed to [***] ASOs outside of [***] that [***].

 

Therefore, with respect to [***], the Parties memorialize the foregoing general
principles by hereby agreeing to the following specific restrictions and
limitations:

 

(i)                        AstraZeneca’s [***] Field.

 

(1)               [***]. AstraZeneca does not have the right under Section 6.1.2
(nor does AstraZeneca have a license under Section 6.1.2 of this Agreement) to
research, develop, manufacture, have manufactured, register, market and/or
commercialize any ASO that is designed to bind to the RNA that encodes [***],
for the diagnosis, prevention and/or treatment of [***].

 

(2)               [***] and Other Indications. AstraZeneca has the right under
Section 6.1.2 (and has a license under Section 6.1.2 of this Agreement) to
research, develop, manufacture, have manufactured, register, market and/or
commercialize, on its own or with a Third Party (including granting an option or
a license to a Third Party to do so), any ASO that is designed to bind to the
RNA that encodes [***] for the diagnosis, prevention and/or treatment of:

 

a.                                      [***]. Any [***] disease in humans or
animals for any [***] indication using any [***] ([***]); and

 

b.                                      All Other Indications. Any indications
other than [***] and [***], using any [***] other than [***],

 

25

--------------------------------------------------------------------------------

 

(such field described in this Section 5.1.3(a)(i), the “AstraZeneca
[***]-Field”).

 

(ii)       Isis’ [***] Field. Isis has the right (including to grant an option
or a license to a Third Party) to research, develop, manufacture, have
manufactured, register, market and commercialize, on its own or with a Third
Party (including granting an option or a license to a Third Party to do so), any
ASO that has all of the following attributes:

 

(1)               is for the diagnosis, prevention and/or treatment of any
disease in humans or animals other than for [***];

 

(2)               [***];

 

(3)               [***]; and

 

(4)               [***] (each such [***] Compound, an “[***] Lead Compound”).

 

Each such [***] ASO Isis is permitted to exploit is an “Isis [***]-Field ASO,”
and the field described in this Section 5.1.3(a)(ii) is the “Isis [***]-Field.”

 

(b)                                 Other Limitations and Exceptions to Isis’
Exclusivity Covenants. Notwithstanding anything to the contrary in this
Agreement, Isis’ practice of the following will not violate Section 5.1.1 or
Section 5.1.2:

 

(i)                                    Performance of the Isis Conducted
Activities;

 

(ii)                                Any activities permitted under the Prior
Agreements as such agreements are in effect on the Effective Date and have been
disclosed to AstraZeneca (and not as such Prior Agreements may be amended after
the Effective Date); and

 

(iii)                            The granting of, or performance of obligations
under, Permitted Licenses.

 

(c)                                  Other Limitations and Exceptions to
AstraZeneca’s Exclusivity Covenants. Notwithstanding anything to the contrary in
this Agreement, AstraZeneca’s performance of the AstraZeneca Conducted
Activities will not violate Section 5.1.1 or Section 5.1.2.

 

Nothing in this ARTICLE 5 will require AstraZeneca to make any explicit
statements on the [***] Product label in order to comply with AstraZeneca’s
obligations in Section 5.1.3(a)(i).

 

26

--------------------------------------------------------------------------------

 

5.2.                   Effect of Exclusivity on Indications. The Compounds are
designed to bind to the RNA that encodes the Gene Targets in the Field, which
are known to play a role in cancer. Isis and AstraZeneca are subject to
exclusivity obligations under Section 5.1.1 and Section 5.1.2; however, the
Parties acknowledge and agree that each Party (on its own or with a Third Party)
may continue to discover, research, develop, manufacture and commercialize
products that are designed to bind to the RNA that encodes a gene that is not a
Gene Target (except, with respect to [***], Isis may do so with Isis [***]-Field
ASOs) for any indication, even if such products are designed to treat cancer.

 

ARTICLE 6.
LICENSE GRANTS; TECHNOLOGY TRANSFER AND SUPPORT

 

6.1.                            License Grants to AstraZeneca.

 

6.1.1.                  STAT3 Development and Commercialization License. Subject
to the terms and conditions of this Agreement, Isis hereby grants to AstraZeneca
a worldwide, exclusive (including with regard to Isis and its Affiliates),
royalty-bearing, sublicensable (in accordance with Section 6.1.4 below) license
under the Licensed Technology to research, Develop, Manufacture, have
Manufactured (in accordance with Section 6.1.4 below), register, market and
Commercialize STAT3 Products in the Field.

 

6.1.2.                  [***] Development and Commercialization License. Subject
to the terms and conditions of this Agreement (including the provisions of
Section 5.1.3(a)(i)), Isis hereby grants to AstraZeneca a worldwide, exclusive
(including with regard to Isis and its Affiliates), royalty-bearing,
sublicensable (in accordance with Section 6.1.4 below) license under the
Licensed Technology to research, Develop, Manufacture, have Manufactured (in
accordance with Section 6.1.4 below), register, market and Commercialize [***]
Products in the Field.

 

6.1.3.                  Oncology Target Development and Commercialization
Licenses. On an Oncology Target-by-Oncology Target basis, subject to the terms
and conditions of this Agreement, effective upon AstraZeneca’s exercise of the
Option for such Oncology Target in accordance with Section 3.5, Isis grants to
AstraZeneca a worldwide, exclusive (including with regard to Isis and its
Affiliates), royalty-bearing, sublicensable (in accordance with Section 6.1.4
below) license under the Licensed Technology to research, Develop, Manufacture,
have Manufactured (in accordance with Section 6.1.4 below), register, market and
Commercialize Oncology Products in the Field.

 

27

--------------------------------------------------------------------------------

 

6.1.4.                  Sublicense Rights.

 

(a)                                 Right to Grant Sublicenses. Subject to the
terms and conditions of this Agreement, AstraZeneca will have the right to grant
sublicenses through multiple tiers of sublicenses under the licenses granted
under Section 6.1.1, Section 6.1.2 and Section 6.1.3 above:

 

(i)                                    under the Isis Core Technology
Patents, Isis Product-Specific Patents and Isis Know-How to an Affiliate of
AstraZeneca or a Third Party; and

 

(ii)                                under the Isis Manufacturing and Analytical
Patents and Isis Manufacturing and Analytical Know-How solely to (y) an
Affiliate of AstraZeneca or (z) a Third Party with a valid license granted by
Isis under the Isis Manufacturing and Analytical Patents and Isis Manufacturing
and Analytical Know-How to manufacture Products in a manufacturing facility
owned or operated by such Third Party (each, a “Licensed CMO”);

 

provided that each such sublicense is for the continued development, manufacture
and/or commercialization of a Product, and is subject to, and consistent with,
the terms and conditions of this Agreement. AstraZeneca shall use reasonable
efforts to ensure that all Persons to which it grants sublicenses comply with
such terms and conditions.

 

(b)                     Enforcing Sublicense Agreements. If, within [***] days
after first learning of any breach of such sublicense terms, AstraZeneca fails
to take any action to enforce the sublicense terms of a sublicense granted
pursuant to this Section 6.1.4, which failure, in Isis’ good faith
determination, could cause [***], AstraZeneca hereby grants Isis the right to
enforce such sublicense terms on AstraZeneca’s behalf and will cooperate with
Isis (which cooperation will be at AstraZeneca’s sole expense and will include,
AstraZeneca joining any action before a court or administrative body filed by
Isis against such Sublicensee if and to the extent necessary for Isis to have
legal standing before such court or administrative body) in connection with
enforcing such terms. AstraZeneca will provide Isis with written notice of any
sublicense  granted pursuant to this Section 6.1.4 that grants a Third Party
rights to commercialize or manufacture a Product, within 30 days after the
execution thereof, and if requested by Isis, a true and complete copy of any
such sublicense or any sublicense that is the subject of a breach of terms
sublicensed under this Agreement within 10 days of Isis’ request, subject to
AstraZeneca being entitled to make appropriate redaction for commercially
sensitive information provided it is not relevant to enforcement or is not
reasonably necessary for Isis to determine AstraZeneca’s compliance with the
terms of this Agreement.

 

28

--------------------------------------------------------------------------------

 

(c)                      Requests to Grant Sublicenses to CMOs. In addition, if
AstraZeneca provides Isis with a written request that Isis grant a license under
the Isis Manufacturing and Analytical Patents and Isis Manufacturing and
Analytical Know-How to a CMO designated by AstraZeneca that is not a Licensed
CMO, solely for such CMO to manufacture Products for AstraZeneca, its Affiliate
or Sublicensee in a manufacturing facility owned or operated by such CMO, Isis
will offer to grant such a license to such CMO on terms that are substantially
similar to the terms Isis has previously agreed to with its Licensed CMOs.

 

(d)                     Effect of Termination on Sublicenses. If this Agreement
terminates for any reason, any Sublicensee will, from the effective date of such
termination, automatically become a direct licensee of Isis with respect to the
rights sublicensed to the Sublicensee by AstraZeneca; so long as (i) such
Sublicensee is not in breach of its sublicense agreement, (ii) such Sublicensee
agrees in writing to comply with all of the terms of this Agreement to the
extent applicable to the rights originally sublicensed to it by AstraZeneca, and
(iii) such Sublicensee agrees to pay directly to Isis such Sublicensee’s
payments under this Agreement to the extent applicable to the rights sublicensed
to it by AstraZeneca. AstraZeneca agrees that it will confirm clause (i) of the
foregoing in writing at the request and for the benefit of Isis and if
requested, the Sublicensee.

 

(e)                      Master Services Agreements and Material Transfer
Agreements.   This Section 6.1.4 is not intended to require AstraZeneca to amend
the standard terms and conditions of a master services agreement with a Third
Party in place as of the Effective Date to conduct preclinical and/or clinical
research and development on AstraZeneca’s behalf, or material transfer
agreements with academic collaborators or non-profit institutions, entered into
after the Effective Date by AstraZeneca in connection with the Licensed
Technology. However, after the Effective Date such agreements shall be subject
to the approval of Isis for so long as Isis had decision making authority on the
JSC, such approval not to be unreasonably withheld or delayed.

 

6.1.5.                  Consequence of Natural Expiration of this Agreement. On
a Product-by-Product basis, if with respect to a particular Product this
Agreement expires (i.e., is not terminated early) in a particular country in
accordance with Section 12.1 then, in addition to the terms set forth in
Section 12.3.1(c), Section 12.3.1(e), Section 12.3.1(f) and
Section 12.3.1(g), Isis will and hereby does grant to AstraZeneca a perpetual,
nonexclusive, worldwide, royalty-free, fully paid-up, sublicensable license
under the Licensed Know-How to Manufacture, Develop and Commercialize the
Product that is the subject of such expiration in such country.

 

6.1.6.                  No Implied Licenses. All rights in and to Licensed
Technology not expressly licensed to AstraZeneca under this Agreement are hereby
retained by Isis or its

 

29

--------------------------------------------------------------------------------

 

Affiliates. All rights in and to AstraZeneca Technology not expressly licensed
or assigned to Isis under this Agreement, are hereby retained by AstraZeneca or
its Affiliates. Except as expressly provided in this Agreement, no Party will be
deemed by estoppel or implication to have granted the other Party any license or
other right with respect to any intellectual property.

 

6.1.7.                  License Conditions; Limitations. Subject to Section 8.9,
the licenses granted under Section 6.1.1, Section 6.1.2 and Section 6.1.3 and
the sublicense rights under Section 6.1.4 are subject to and limited by (i) any
applicable Target Encumbrances, (ii) in respect of the licenses granted under
Section 6.1.1 and Section 6.1.2, the Prior Agreements as such agreements are in
effect on the Effective Date and have been disclosed to AstraZeneca (and not as
such Prior Agreement may be amended after the Effective Date), (iii) the Isis
In-License Agreements as such agreements are in effect on the Effective Date
(and not as such Isis In-License Agreements may be amended after the Effective
Date); and (iv) the granting of, or performance of obligations under, Permitted
Licenses.

 

6.1.8.                  Trademarks for Products. To the extent that (i) Isis
owns any trademark(s) specific to a Product licensed under Section 6.1.1,
Section 6.1.2 or Section 6.1.3, and (ii) AstraZeneca reasonably believes such
trademark(s) are necessary or useful for such Product, then upon AstraZeneca’s
request and at AstraZeneca’s sole cost and expense, Isis will assign its rights
and title to such trademark(s) to AstraZeneca sufficiently in advance of the
First Commercial Sale of a Product. Other than any such trademarks, AstraZeneca
is solely responsible for all trademarks, trade dress, logos, slogans, designs,
copyrights and domain names used on or in connection with Products licensed
under Section 6.1.1, Section 6.1.2 or Section 6.1.3.

 

6.1.9.                  [***]

 

6.2.                            License Grant to Conduct the Isis and
AstraZeneca Conducted Activities.

 

6.2.1                     As of the Effective Date, AstraZeneca hereby grants to
Isis a worldwide, co-exclusive, royalty-free, fully paid up, license (with the
right to sublicense to Third Parties solely to perform the Isis Conducted
Activities) under the (i) Licensed Technology licensed to AstraZeneca under
Section 6.1.1 and Section 6.1.2, and (ii) the AstraZeneca Technology, in each
case for the sole purpose of Isis performing the Isis Conducted Activities under
this Agreement.

 

6.2.2                     On an Oncology Target-by-Oncology Target basis, as of
the Effective Date and until the Option Deadline, Isis hereby grants to
AstraZeneca a worldwide, non-exclusive, royalty-free, license (with the right to
sublicense to Third Parties solely to perform the AstraZeneca Conducted
Activities) under the Licensed Technology for the sole purpose of AstraZeneca
performing the AstraZeneca Conducted Activities under this Agreement.

 

30

--------------------------------------------------------------------------------

 

6.3.                            Assignment of Isis Product-Specific Patents;
Grant Back to Isis.

 

6.3.1.                  On a Gene Target-by-Gene Target basis, with respect to
any Gene Target for which AstraZeneca has an exclusive license under
Section 6.1.1, Section 6.1.2 and Section 6.1.3,  at AstraZeneca’s request at any
time after completion of the first Phase 2 Trial for the applicable Product,
after discussion at the JPC, Isis will assign to AstraZeneca, Isis’ ownership
interest in:

 

(a)                                 with respect to STAT3 Products or Oncology
Products (as the case may be), all Isis Product-Specific Patents within the
Licensed Patents that are owned by Isis (whether solely owned or jointly owned
with one or more Third Parties); and

 

(b)                                 with respect to [***] Products, all
Assignable [***] Product-Specific Patents within the Licensed Patents that are
owned by Isis (whether solely owned or jointly owned with one or more Third
Parties).

 

6.3.2.                  AstraZeneca grants to Isis a worldwide, exclusive,
sublicensable license under any Patent Rights assigned to AstraZeneca under
Section 6.3.1 (i) for all purposes outside of the Field (except to license or
Commercialize a compound from the STAT3, [***] or Oncology Product Specific
Patents that specifically claim the STAT3 Product, [***] Product or Oncology
Product being Developed and Commercialized by AstraZeneca), and (ii) to
research, Develop, Manufacture, have Manufactured, register, market and
Commercialize Isis Follow-On Products in accordance with Section 5.1.2, in each
case to the extent permitted by this Agreement.

 

6.4.                            Subcontracting. Subject to the terms of this
Section 6.4, each Party will have the right to engage Third-Party subcontractors
to perform certain of its obligations under this Agreement. Any subcontractor to
be engaged by a Party to perform a Party’s obligations set forth in this
Agreement will meet the qualifications typically required by such Party for the
performance of work similar in scope and complexity to the subcontracted
activity and will enter into such Party’s standard nondisclosure agreement
consistent with such Party’s standard practices. Any Party engaging a
subcontractor hereunder will remain responsible and obligated for such
activities and will not grant rights to such subcontractor that interfere with
the rights of the other Party under this Agreement.

 

6.5.                            Technology Transfer. After (i) the Effective
Date, in the case of the Licensed Know-How licensed to AstraZeneca under
Section 6.1.1 and Section 6.1.2, or (ii) on an Oncology Target-by-Oncology
Target basis, the date the license under Section 6.1.3 is granted to AstraZeneca
for such Oncology Target, Isis will deliver to AstraZeneca the following
Licensed Know-How pursuant to a technology transfer plan to be mutually agreed
by Isis and AstraZeneca:

 

6.5.1.                  Licensed Know-How - Generally. Copies of Licensed
Know-How (other than the Isis Manufacturing and Analytical Know-How) in the
Field in Isis’

 

31

--------------------------------------------------------------------------------

 

possession that has not previously been provided hereunder, for use solely in
accordance with the licenses granted under Section 6.1.1, Section 6.1.2 or
Section 6.1.3, as the case may be, to AstraZeneca together with all regulatory
documentation (including drafts) related to each Product (except that the
[***]). To assist with the transfer of such Licensed Know-How, Isis will make
its personnel reasonably available to AstraZeneca during normal business hours
for up to [***] ([***]) of Isis’ time to transfer such Licensed Know-How under
this Section 6.5.1. Thereafter, if requested by AstraZeneca, Isis will provide
AstraZeneca with a reasonable level of assistance in connection with such
transfer, which AstraZeneca will reimburse Isis for its time incurred in
providing such assistance at the FTE rate, and any of Isis’ reasonable travel
expenses for travel requested by AstraZeneca, and any outside consultants’ costs
and consultants’ reasonable travel expenses incurred by Isis agreed in advance
by AstraZeneca.

 

6.5.2.                  Isis Manufacturing and Analytical Know-How. Solely for
use by AstraZeneca, its Affiliates or a Third Party acting on AstraZeneca’s
behalf to Manufacture API in AstraZeneca’s own or an Affiliate’s manufacturing
facility, copies of the Isis Manufacturing and Analytical Know-How relating to
Products in Isis’ possession that has not previously been provided hereunder,
which is necessary for the exercise by AstraZeneca, its Affiliates or a Third
Party of the Manufacturing rights granted under Section 6.1.1, Section 6.1.2 or
Section 6.1.3, as the case may be. AstraZeneca will reimburse Isis for its time
incurred in performing such technology transfer at the FTE rate, and any of
Isis’ reasonable travel expenses for travel requested by AstraZeneca, and any of
its outside consultants’ costs and consultants’ reasonable travel expenses
incurred by Isis agreed in advance by AstraZeneca.

 

ARTICLE 7.

DEVELOPMENT, MANUFACTURING AND COMMERCIALIZATION

 

7.1.                            AstraZeneca Diligence. Commencing on (i) the
Effective Date, with respect to STAT3 Products and [***] Products licensed to
AstraZeneca under Section 6.1.1 and Section 6.1.2, and (ii) on an Oncology
Target-by-Oncology Target and Product-by-Product basis, the date Isis grants
AstraZeneca the license under Section 6.1.3 related to such Oncology Target,
except for the Isis Conducted Activities that do not involve Additional Plan
Costs, AstraZeneca is solely responsible for all Development, Manufacturing and
Commercialization activities, and for all costs and expenses associated
therewith, with respect to the Development, Manufacture and Commercialization of
Products.

 

7.1.1.                  Integrated Development Plans. AstraZeneca will prepare a
Development and global integrated Product plan outlining key aspects of the
Development of each Product licensed by AstraZeneca under Section 6.1.1,
Section 6.1.2 and Section 6.1.3 through Approval as well as key aspects of
worldwide regulatory

 

32

--------------------------------------------------------------------------------

 

strategy, market launch, and Commercialization (each plan, an “Integrated
Development Plan” or “IDP”). On a Product-by-Product basis, for each Product
licensed by AstraZeneca under Section 6.1.1, Section 6.1.2 or Section 6.1.3, as
the case may be, AstraZeneca will prepare the IDP no later than [***] for such
Product, and the IDP will contain information consistent with AstraZeneca’s
Development and Commercialization plans for its similar products at similar
stages of development. Once AstraZeneca has prepared such plans, AstraZeneca
will update the IDP consistent with AstraZeneca’s standard practice and provide
such updates to Isis Annually. AstraZeneca and Isis will meet on a yearly basis
to discuss the draft of the IDP and AstraZeneca will consider, in good faith,
any proposals and comments made by Isis for incorporation in the final
IDP. Notwithstanding the foregoing, on a Gene Target-by-Gene Target basis,
AstraZeneca’s obligations to provide Isis with information or reports under this
Section 7.1.1 will terminate if Isis independently or for or with an Affiliate
or Third Party engages in any activity to discover, research or develop an ASO
designed to bind to the RNA that encodes such Gene Target in the Field other
than in the course of performing its obligations under, or to the extent
permitted by, this Agreement.

 

7.1.2.                  Investigator’s Brochure. Within 30 days after the
Effective Date, Isis will provide to AstraZeneca the then current version of the
Investigator’s Brochure for ISIS-STAT3Rx. AstraZeneca will keep Isis reasonably
informed with respect to the status, activities and progress of Development of
Products licensed by AstraZeneca hereunder by providing updated versions of the
Investigator’s Brochure to Isis Annually and when Development of the Products
results in any substantive change to the safety or risk to the Products. On a
Product-by-Product basis, AstraZeneca’s obligations under this Section 7.1.2
will terminate if Isis independently or for or with an Affiliate or Third Party
engages in any activity to discover, research or develop an ASO designed to bind
to the RNA that encodes the Gene Target targeted by such Product in the Field
other than in the course of performing its obligations under, or to the extent
permitted by, this Agreement.

 

7.1.3.                  Participation in Regulatory Meetings. Each Party will
provide the other Party with as much advance written notice as practicable of
any meetings such Party has or plans to have with a Regulatory Authority
regarding pre-approval or Approval matters for a Product (or, in the case of
Isis as the invitee, that relate to Isis’ antisense oligonucleotide platform),
and will allow one representative of the invited Party to participate (as an
observer) in any such meeting that is [***] (e.g., meetings regarding [***]) The
costs associated with such observer attendance will be met by the invitee Party,
except if Isis’ presence has been specifically requested by AstraZeneca, in
which case AstraZeneca will reimburse Isis for its time incurred in attending at
the FTE Rate. To the extent that AstraZeneca has not fully used the [***]
available to it pursuant to Section 6.5.1 or Section 7.1.5, then AstraZeneca
shall be entitled to

 

33

--------------------------------------------------------------------------------

 

allocate such [***] to the activities to be performed by Isis pursuant to this
Section 7.1.3.

 

7.1.4.                  Regulatory Communications. Each Party will provide the
other Party with copies of documents and communications submitted to (including
such drafts as the providing Party considers reasonably practicable but to
include at least one pre finalization draft thereof) and received from
Regulatory Authorities that materially impact the Development or
Commercialization of Products for the other Party’s review and comment, and the
submitting Party will consider in good faith including any comments provided by
the reviewing Party to such documents and communications.

 

7.1.5.                  Assistance with Regulatory Filings. On a Gene
Target-by-Gene Target basis, following Lead Candidate designation for an
applicable Gene Target, upon AstraZeneca’s written request, Isis will assist
AstraZeneca in preparing regulatory filings for the Products (including INDs and
other regulatory filings for which AstraZeneca is the sponsor) and, except with
respect to regulatory filing-related activities outlined in Section 7.1.3 and
Section 7.1.4, such regulatory filings assistance will be [***].  Thereafter,
upon AstraZeneca’s written request, Isis will assist AstraZeneca in preparing
regulatory filings for the Products at the FTE Rate, and any of Isis’ reasonable
travel expenses for travel requested by AstraZeneca, and any of its outside
consultants’ costs and consultants’ reasonable travel expenses incurred by Isis
agreed in advance by AstraZeneca. An estimate of such costs and expenses will be
provided to AstraZeneca before initiation of agreed work.

 

7.1.6.                  Class Generic Claims. To the extent AstraZeneca intends
to make any claims in a Product label or regulatory filing that are class
generic to ASOs or Isis’ generation 2.0 or 2.5 chemistry platform(s),
AstraZeneca will provide such claims and regulatory filings to Isis in advance
and will consider in good faith any proposals and comments made by Isis.

 

7.1.7.                  Applicable Laws. AstraZeneca will perform its activities
pursuant to this Agreement in compliance with good laboratory and clinical
practices and cGMP, in each case as applicable under the laws and regulations of
the country and the state and local government wherein such activities are
conducted.

 

7.2.                            Isis’ Antisense Safety Database.

 

7.2.1.                  Isis maintains an internal database that includes
information regarding the tolerability of its drug compounds, individually and
as a class, including information discovered during pre-clinical and clinical
development (the “Isis Internal ASO Safety Database”). In an effort to maximize
understanding of the safety profile and pharmacokinetics of Isis compounds,
AstraZeneca will cooperate in connection with populating the Isis Internal ASO
Safety Database. To the extent collected by AstraZeneca and in the form in which
AstraZeneca uses/stores such information for its own purposes, AstraZeneca will
provide

 

34

--------------------------------------------------------------------------------

 

Isis with information concerning toxicology, pharmacokinetics, safety
pharmacology study(ies), serious adverse events and other safety information
related to Products licensed by AstraZeneca under this Agreement as soon as
practicable following the date such information is available to AstraZeneca (but
not later than 30 days after AstraZeneca’s receipt of such information). In
connection with any reported serious adverse event, AstraZeneca will provide
Isis all serious adverse event reports, including initial, interim, follow-up,
amended, and final reports. In addition, with respect to Products, AstraZeneca
will provide Isis with copies of Annual safety updates filed with each IND and
the safety sections of any final Clinical Study reports within 30 days following
the date such information is filed or is available to AstraZeneca, as
applicable. Furthermore, AstraZeneca will promptly provide Isis with any
supporting data and answer any follow-up questions reasonably requested by Isis.
All such information disclosed by AstraZeneca to Isis will be AstraZeneca
Confidential Information; provided, however, that so long as Isis does not
disclose the identity of a Product or AstraZeneca’s identity, Isis may disclose
any such AstraZeneca Confidential Information to (i) Isis’ other partners
pursuant to Section 7.2.2 below if such information is regarding class generic
properties of ASOs, or (ii) any Third Party. AstraZeneca will deliver all such
information to Isis for the Isis Internal ASO Safety Database to Isis
Pharmaceuticals, Inc., 2855 Gazelle Court, Carlsbad, California 92010,
Attention: Chief Medical Officer (or to such other address/contact designated in
writing by Isis). AstraZeneca will also cause its Affiliates and Sublicensees to
comply with this Section 7.2.1.

 

7.2.2.                  From time to time, Isis utilizes the information in the
Isis Internal ASO Safety Database to conduct analyses to keep Isis and its
partners informed regarding class generic properties of ASOs, including with
respect to safety. As such, if and when Isis identifies safety or other related
issues that may be relevant to a Product (including any potential class-related
toxicity), Isis will promptly inform AstraZeneca of such issues and provide the
data supporting Isis’ conclusions.

 

7.3                   Pharmacovigilance; ISIS-STAT3 Rx Safety Reporting.

 

7.3.1                     The Parties acknowledge that until [***] Isis will
remain the holder of the original IND for ISIS-STAT3Rx (although this does not
preclude AstraZeneca opening its own US IND for ISIS-STAT3Rx during that period)
and that because AstraZeneca will conduct a Clinical Study in [***] in
accordance with the STAT3 Research and Development Plan during such period, it
is important that Isis and AstraZeneca coordinate their respective
ISIS-STAT3Rx clinical trial and pre-clinical activities, including the
collection and reporting of adverse events involving ISIS-STAT3Rx. Within [***]
days after the Effective Date, the Parties will develop and agree in writing on
a Drug Safety Information Agreement that will include safety data delivery
procedures governing the collection, investigation, reporting, and delivery of
information from AstraZeneca to Isis

 

35

--------------------------------------------------------------------------------

 

concerning any adverse experiences, and any product quality and product
complaints involving adverse experiences related to ISIS-STAT3Rx, sufficient to
enable Isis to comply with its legal and regulatory obligations and internal
processes and consistent with the terms of this Agreement. Upon transfer of
Isis’ ISIS-STAT3Rx IND to AstraZeneca and assumption by AstraZeneca of
regulatory responsibilities under the IND, AstraZeneca will assume
responsibility for the global safety database related to ISIS-STAT3Rx, and will
be solely responsible for reporting to Regulatory Authorities in accordance with
the Applicable Law for expeditable adverse events and for periodic safety
reporting relating to the safety of ISIS-STAT3Rx and will furnish copies of such
reports to Isis. The Drug Safety Information Agreement will be revised following
the closure of Isis’ IND.

 

7.3.2                     Within [***] after the Effective Date with respect to
the STAT3 Program, and prior to the [***] with respect to each of the other
Collaboration Programs, the Parties shall enter into a mutually agreed
pharmacovigilance agreement (the “Pharmacovigilance Agreement”). The Parties
shall comply with the provisions of such agreement. If there is any
inconsistency between this Agreement and the Pharmacovigilance Agreement as it
relates to Product safety, the terms of the Pharmacovigilance Agreement will
prevail to the extent of such inconsistency.

 

ARTICLE 8.
FINANCIAL PROVISIONS

 

8.1.                   STAT3 and [***] License Fee; Oncology Target Option Fees.
Within 30 days following the Effective Date, AstraZeneca will pay Isis an
up-front fee of $25,000,000, allocated as follows:

 

(i)                                    $[***] in partial consideration for the
licenses granted by Isis to AstraZeneca under Section 6.1.1 for STAT3 Products;

 

(ii)                                $[***] in partial consideration for the
licenses granted by Isis to AstraZeneca under Section 6.1.2 for [***] Products;
and

 

(iii)                            An initial payment of $[***] in partial
consideration for the Options granted by Isis to AstraZeneca under Section 3.5
for each Oncology Target.

 

8.2.                   Oncology Target License Fees. On an Option-by-Option
basis, following AstraZeneca’s written notice to Isis stating that AstraZeneca
is exercising such Option in accordance with this Agreement, AstraZeneca will
pay Isis a license fee of $[***] within 30 days after AstraZeneca’s receipt from
Isis of an invoice for such license fee (for a total of $[***] if AstraZeneca
exercises all three of its Options hereunder or, a total of $[***] if a fourth
Oncology Collaboration Program is added under Section 2.2.4 (for a total of four
Options) and AstraZeneca exercises all four of its Options hereunder).

 

36

--------------------------------------------------------------------------------

 

8.3.                   Remaining Payment for the Options to the Oncology
Targets. In partial consideration for the Options granted by Isis to AstraZeneca
under Section 3.5 for each Oncology Target, within [***] days following the
Effective Date, AstraZeneca shall notify Isis whether it wishes to continue with
the Oncology Collaboration, and if it does will pay Isis $6,000,000 within 30
days after AstraZeneca’s receipt from Isis of an invoice from Isis for such
amount. For the avoidance of doubt, only one payment of $6,000,000 is payable
under this Section 8.3. If AstraZeneca either (i) does not notify Isis in
writing within [***] days following the Effective Date that it wishes to proceed
with the Oncology Collaboration, or (ii) notifies Isis in writing that
AstraZeneca is not proceeding, then all of the Options will expire and the
remaining payment of $6,000,000 under this Section 8.3 shall not be payable.

 

8.4.                   Milestone Payments for Achievement of Milestone Events by
a STAT3 Product. If there is a High Response Outcome in the Phase 1/2 Trial and
the license granted by Isis to AstraZeneca under Section 6.1.1 is not terminated
under Section 1.2.3(f)(i) above, then, in accordance with Section 8.7.5,
AstraZeneca will pay to Isis the milestone payments as set forth in Column 1 of
TABLE 1 below when a milestone event listed in TABLE 1 is first achieved by a
STAT3 Product. If there is a Medium Response Outcome (or a Low Response Outcome)
in the Phase 1/2 Trial and the license granted by Isis to AstraZeneca under
Section 6.1.1 is not terminated under Section 1.2.3(f)(i) above, then, in
accordance with Section 8.7.5 and subject to the terms of Section 1.2.3(h),
AstraZeneca will pay to Isis the milestone payments as set forth in Column 2 of
TABLE 1 below when a milestone event listed in TABLE 1 is first achieved by a
STAT3 Product:

 

TABLE 1

 

 

 

Column 1

 

Column 2

 

 

 

 

 

STAT3 Product Milestone

 

STAT3 Product Milestone
Event

 

STAT3 Product Milestone
Event Payment for High
Response Outcome

 

Event Payment for Medium
Response Outcome or Low
Response Outcome

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

[***]

 

$

[***]

 

$

[***]

 

 

37

--------------------------------------------------------------------------------

 

8.5.                   Milestone Payments for Achievement of Milestone Events by
an [***] Product. In accordance with Section 8.7.5, AstraZeneca will pay to Isis
the milestone payments as set forth in TABLE 2 below when a milestone event
listed in TABLE 2 is first achieved by an [***] Product:

 

TABLE 2

 

[***] Product Milestone Event 

 

[***] Product Milestone Event Payment

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

 

8.6.                   Milestone Payments for Achievement of Milestone Events by
an Oncology Product. On an Oncology Target-by-Oncology Target basis, in
accordance with Section 8.7.5, AstraZeneca will pay to Isis the milestone
payments as set forth in TABLE 3 below when

 

38

--------------------------------------------------------------------------------

 

a milestone event listed in TABLE 3 is first achieved by an Oncology Product
targeting such Oncology Target:

 

TABLE 3

 

Oncology Product Milestone Event 

 

Oncology Product Milestone Event
Payment

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

[***]

 

$

[***]

 

 

8.7.                   Limitations on Milestone Payments; Exceptions; Notice.

 

8.7.1.                  Each milestone payment set forth in TABLE 1 and TABLE 2
above will be paid only once upon the first achievement of the milestone event
regardless of how many Products achieve such milestone event.

 

8.7.2.                  Each milestone payment set forth in TABLE 3 above will
be paid only once per each Oncology Target upon the first achievement of the
milestone event regardless of how many Products for such Oncology Target achieve
such milestone event.

 

8.7.3.                  If a particular milestone event is not achieved because
Development or Commercial activities transpired such that achievement of such
earlier milestone event was unnecessary or did not otherwise occur, then upon

 

39

--------------------------------------------------------------------------------

 

achievement of a later milestone event the milestone event payment applicable to
such earlier milestone event will also be due. For example, if a Party proceeds
directly to [***] without achieving the [***] then upon achieving the [***]
milestone event, both the [***] and [***] milestone event payments are due.
Similarly, if a Party proceeds directly to [***] without achieving the [***]
then upon achieving the [***] milestone event, both the [***] and [***]
milestone event payments are due.

 

8.7.4.                  In addition, if a particular milestone event is achieved
contemporaneously or in connection with another milestone event, then upon
achievement of one such milestone event the other milestone event will also be
deemed achieved and the milestone payments for both milestone events are due.
For example, if AstraZeneca achieves the [***] milestone event and the [***]
([***]) that was the subject of such milestone event [***], then both the [***]
and the [***] milestone event payments are due. Similarly, if AstraZeneca
achieves the [***] milestone event and the [***] ([***]) that was the subject of
such milestone event [***], then both the [***] and the [***] milestone event
payments are due.

 

8.7.5.                  Each time a milestone event is achieved under this
ARTICLE 8, AstraZeneca will send Isis, or Isis will send AstraZeneca, as the
case may be, a written notice thereof promptly (but no later than five Business
Days) following the date of achievement of such milestone event.
Thereafter, Isis will promptly invoice AstraZeneca for the achievement of any
milestone event under this ARTICLE 8 and such milestone payment will be due
within 30 days after AstraZeneca’s receipt of such invoice.

 

8.8.                            Royalty Payments to Isis.

 

8.8.1.                  AstraZeneca Full Royalty. As partial consideration for
the rights granted to AstraZeneca hereunder, subject to the provisions of this
Section 8.8.1 and Section 8.8.2, AstraZeneca will pay to Isis royalties on
Annual worldwide Net Sales of Products sold by AstraZeneca, its Affiliates or
Sublicensees, on a country-by-country and Product-by-Product basis, in each case
in the amounts as follows in TABLE 4 below (the “AstraZeneca Full Royalty”):

 

40

--------------------------------------------------------------------------------

 

TABLE 4

 

Royalty
Tier

 

Annual Worldwide Net Sales of
STAT3 Products 

 

High
Response
Outcome
Royalty
Rate

 

Medium
Response
Outcome/Low
Response
Outcome
Royalty
Rate

 

1

 

For the portion of Annual Worldwide Net Sales < $[***]

 

[***]

%

[***]

%

2

 

For the portion of Annual Worldwide Net Sales > $[***] but < $[***]

 

[***]

%

[***]

%

3

 

For the portion of Annual Worldwide Net Sales > $[***] but < $[***]

 

[***]

%

[***]

%

4

 

For the portion of Annual Worldwide Net Sales > $[***]

 

[***]

%

[***]

%

 

Royalty
Tier

 

Annual Worldwide Net Sales of
[***] Products

 

Royalty
Rate

 

 

 

1

 

For the portion of Annual Worldwide Net Sales < $[***]

 

[***]

%

 

 

2

 

For the portion of Annual Worldwide Net Sales > $[***] but < $[***]

 

[***]

%

 

 

3

 

For the portion of Annual Worldwide Net Sales > $[***]

 

[***]

%

 

 

 

Royalty
Tier

 

Annual Worldwide Net Sales of
Oncology Products

 

Royalty
Rate

 

 

 

1

 

For the portion of Annual Worldwide Net Sales < $[***]

 

[***]

%

 

 

2

 

For the portion of Annual Worldwide Net Sales > $[***] but < $[***]

 

[***]

%

 

 

3

 

For the portion of Annual Worldwide Net Sales > $[***] but < $[***]

 

[***]

%

 

 

4

 

For the portion of Annual Worldwide Net Sales > $[***]

 

[***]

%

 

 

 

41

--------------------------------------------------------------------------------

 

Annual worldwide Net Sales will be calculated by taking the aggregate sum of Net
Sales of Products for all countries worldwide.

 

(a)                                 AstraZeneca will pay Isis royalties on Net
Sales of Products arising from named patient and other similar programs under
Applicable Laws, and AstraZeneca will provide reports and payments to Isis
consistent with Section 8.10. No royalties are due on Net Sales of Products
arising from compassionate use and other programs providing for the delivery of
Product at no cost. The sales of Products arising from named patient,
compassionate use, or other similar programs will not be considered a First
Commercial Sale for purposes of calculating the Royalty Period.

 

(b)                                 For purposes of clarification, any Isis
Product-Specific Patents assigned to AstraZeneca as set forth in Section 6.3.1
will still be considered Isis Product-Specific Patents for determining the
royalty term and applicable royalty rates under this ARTICLE 8.

 

8.8.2.                  Application of Royalty Rates. All royalties set forth
under Section 8.8.1 are subject to the provisions of this Section 8.8.2, and are
payable as follows:

 

(a)                     Royalty Period. AstraZeneca’s obligation to pay Isis the
AstraZeneca Full Royalty above with respect to a Product will continue on a
country-by-country and Product-by-Product basis from the date of First
Commercial Sale of such Product until the later of the date of expiration of (i)
the last Valid Claim within the Licensed Patents Covering such Product in the
country in which such Product is made, used or sold, (ii) the data exclusivity
period conferred by the applicable Regulatory Authority in such country with
respect to such Product (e.g., such as in the case of an orphan drug), and (iii)
the [***] ([***]) anniversary of the First Commercial Sale of such Product in
such country (such royalty period, the “Royalty Period”).

 

(b)                    Limitation on Aggregate Reduction for AstraZeneca
Royalties. In no event will the aggregate royalty offsets under Section
8.9.2(a)(i) and Section 8.9.4(b) reduce the royalties payable to Isis on Net
Sales of a Product in any given period to an amount that is less than the
greater of [***].

 

(c)                      End of Royalty Obligation. On a country-by-country and
Product-by-Product basis, other than [***], AstraZeneca’s obligation to make
royalty payments hereunder in such country will end on the expiration of the
Royalty Period in such country.

 

42

--------------------------------------------------------------------------------

 

8.9.                   Third Party Payment Obligations.

 

8.9.1.                  Existing In-License Agreements.

 

(a)                                 Isis’ Existing In-License Agreements.
Certain of the Licensed Technology Controlled by Isis as of the Effective Date
licensed to AstraZeneca under Section 6.1.1 and Section 6.1.2 or that may be
licensed to AstraZeneca under Section 6.1.3, as the case may be, are in-licensed
or were acquired by Isis under the agreements with Third Party licensors or
sellers listed in APPENDIX 6 (such license or purchase agreements being the
“Isis In-License Agreements”), and certain milestone or royalty payments and
license maintenance fees may become payable by Isis to such Third Parties under
the Isis In-License Agreements based on the Development or Commercialization of
a Product by AstraZeneca, its Affiliate or Sublicensee under this Agreement. Any
payment obligations arising under the Isis In-License Agreements:

 

(i)                                    as they apply to STAT3 Products or [***]
Products, will be paid by [***] as [***], and

 

(ii)                                as they apply to Isis Product Specific
Patents licensed in connection with the applicable Oncology Product after Option
exercise, will be paid by [***] as [***], and

 

(iii)                            in connection with the applicable Oncology
Product as they apply to Isis Core Technology Patents and Isis Manufacturing and
Analytical Know-How and Isis Manufacturing and Analytical Patents will be paid
by [***] as [***].

 

(b)                                 AstraZeneca’s Existing In-License
Agreements. AstraZeneca will be solely responsible for any Third Party
Obligations that become payable by AstraZeneca to Third Parties under any
agreements or arrangements AstraZeneca has with such Third Parties as of the
Effective Date, based on the Development or Commercialization of a Product by
AstraZeneca, its Affiliate or Sublicensee under this Agreement. Any such payment
obligations will be paid by AstraZeneca as AstraZeneca Supported Pass-Through
Costs under this Agreement.

 

8.9.2.                  New In-Licensed Additional Product-Specific Patents.

 

(a)                                 Additional STAT3/[***] Product-Specific
Patents.

 

(i)                        AstraZeneca or Isis, as the case may be, will
promptly provide the other Party written notice of any additional Third Party
Patent Rights necessary to practice an Isis Product-Specific Patent to
Commercialize a STAT3 Product or [***] Product (“Additional STAT3/[***]
Product-Specific Patents”) it believes it has identified and AstraZeneca will
have the first right, but not the obligation, to negotiate with,

 

43

--------------------------------------------------------------------------------

 

and obtain a license from the Third Party Controlling such Additional
STAT3/[***] Product-Specific Patents. If AstraZeneca obtains any such Additional
STAT3/[***] Product-Specific Patents then, subject to Section 8.8.2(b),
AstraZeneca may offset an amount equal to [***]% of any [***] paid by
AstraZeneca to such Third Party with respect to such Product against any [***].
[***].

 

(ii)                    If, however, AstraZeneca elects not to obtain such a
license to such Additional STAT3/[***] Product-Specific Patents, AstraZeneca
will so notify Isis, and Isis may obtain such a license to such Additional
STAT3/[***] Product-Specific Patents and will include such Additional
STAT3/[***] Product-Specific Patents in the license granted to AstraZeneca under
Section 6.1.1 or Section 6.1.2 (as applicable) if AstraZeneca agrees in writing
to pay Isis as AstraZeneca Supported Pass-Through Costs any and all costs
arising under such Third Party agreement as they apply to STAT3 Products or
[***] Products.

 

(b)                                 Additional Oncology Collaboration
Product-Specific Patents.

 

(i)                        Prior to Option Exercise. If, after an Oncology
Target is selected but prior to Option exercise for a particular Oncology
Target, Isis obtains Third Party Patent Rights necessary to Commercialize an
Oncology Product where such Patent Right would have satisfied the definition of
an Isis Product-Specific Patent had Isis Controlled such Patent Rights on the
Effective Date, then to the extent Controlled by Isis, Isis will include such
Third Party Patent Rights in the license to be granted to AstraZeneca under
Section 6.1.3 if AstraZeneca agrees in writing to pay Isis as AstraZeneca
Supported Pass-Through Costs any and all costs arising under such Third Party
agreement as they apply to such Oncology Products.

 

(ii)                    After Option Exercise.

 

(1)               On an Oncology Target-by-Oncology Target basis, after Option
exercise, AstraZeneca or Isis, as the case may be, will promptly provide the
other Party written notice of any additional Third Party Patent Rights necessary
to practice an Isis Product-Specific Patent to Commercialize an Oncology Product
(“Additional Oncology Product-Specific Patents”) it believes it has identified
and AstraZeneca will have the first right, but not the obligation, to negotiate
with, and obtain a license from the Third Party Controlling such

 

44

--------------------------------------------------------------------------------

 

Additional Oncology Product-Specific Patents. If AstraZeneca obtains any such
Additional Oncology Product-Specific Patents then any and all Third Party
Obligations arising under such Third Party agreement will be paid by AstraZeneca
as AstraZeneca Supported Pass-Through Costs.

 

(2)               If, however, AstraZeneca elects not to obtain such a license
to such Additional Oncology Product-Specific Patents, AstraZeneca will so notify
Isis, and Isis may obtain such a license to such Additional Oncology
Product-Specific Patents and will include such Additional Oncology
Product-Specific Patents in the license granted to AstraZeneca under Section
6.1.3 if AstraZeneca agrees in writing to pay Isis as AstraZeneca Supported
Pass-Through Costs any and all costs arising under such Third Party agreement as
they apply to such Oncology Products.

 

8.9.3.                  Additional Core IP In-License Agreements. Isis will
negotiate with, and use Commercially Reasonable Efforts to obtain a license
from, any Third Party controlling intellectual property that is necessary to
practice an Isis Core Technology Patent to Commercialize a Product (“Additional
Core IP”). For clarity, Additional Core IP does not include any Patent Rights
claiming (or intellectual property related to) specific drug compositions,
sequences, therapeutic methods, formulation or delivery technology,
manufacturing or analytical methods, or other active ingredients. If Isis
obtains such a Third Party license, Isis will include such Additional Core IP in
the license granted to AstraZeneca under Section 6.1.1, Section 6.1.2 or Section
6.1.3 (as the case may be), and any financial obligations under such Third Party
agreement will be paid solely by [***] as [***].

 

8.9.4.                  Disputes Regarding Additional STAT3/[***]
Product-Specific Patents and Additional Core IP.

 

(a)                                 If Isis does not agree that certain
intellectual property identified by AstraZeneca pursuant to Section 8.9.2(a) is
an Additional STAT3/[***] Product-Specific Patent, or if AstraZeneca does not
agree that a license is not necessary to practice an Isis Core Technology Patent
to Commercialize a Product as provided in Section 8.9.3, Isis or AstraZeneca, as
applicable will send written notice to such effect to the other Party, and the
Parties will engage a mutually agreed upon independent Third Party intellectual
property lawyer with expertise in the patenting of ASOs, and appropriate
professional credentials in the relevant jurisdiction, to determine the question
of whether or not such Third Party intellectual property is an Additional
STAT3/[***] Product-Specific Patent or whether a license is necessary to
practice an Isis Core Technology Patent to Commercialize a Product. The
determination of the Third Party expert engaged under the preceding sentence
will be binding on the Parties solely for purposes of

 

45

--------------------------------------------------------------------------------

 

determining whether [***]. The costs of any Third Party expert engaged under
this Section 8.9.4 will be paid by the Party against whose position the Third
Party lawyer’s determination is made.

 

(b)                                 Notwithstanding the determination of the
Third Party lawyer under Section 8.9.4(a), if a Third Party Controlling an
Additional STAT3/[***] Product-Specific Patent is awarded a judgment from a
court of competent jurisdiction arising from its claim against AstraZeneca
asserting that [***], AstraZeneca will be permitted to [***].

 

8.10.                     Payments.

 

8.10.1.           Commencement. Beginning with the Calendar Quarter in which the
First Commercial Sale for a Product is made and for each Calendar Quarter
thereafter, AstraZeneca will make royalty payments to Isis under this Agreement
within [***] following the end of each such Calendar Quarter. Each royalty
payment will be accompanied by a report, summarizing Net Sales for Products
during the relevant Calendar Quarter and the calculation of royalties due
thereon, including country, units, sales price and the exchange rate used. If no
royalties are payable in respect of a given Calendar Quarter, AstraZeneca will
submit a written royalty report to Isis so indicating together with an
explanation as to why no such royalties are payable. In addition, beginning with
the Calendar Quarter in which the First Commercial Sale for a Product is made
and for each Calendar Quarter thereafter, within [***] following the end of each
such Calendar Quarter, AstraZeneca will provide Isis a preliminary, non-binding
Product sales estimate for such Calendar Quarter.

 

8.10.2.           Mode of Payment. All payments under this Agreement will be (i)
payable in full in U.S. dollars, regardless of the country(ies) in which sales
are made, (ii) made by wire transfer of immediately available funds to an
account designated by Isis in writing, and (iii) non-creditable (except as
otherwise provided in Section 8.11),  and non-refundable. Whenever for the
purposes of calculating the royalties payable under this Agreement conversion
from any foreign currency will be required, all amounts will first be calculated
in the currency of sale and then converted into United States dollars by
AstraZeneca in accordance with the rates of exchange for the relevant month for
converting such other currency into US Dollars used by AstraZeneca’s internal
accounting systems, which are independently audited on an annual basis and which
are in accordance with generally accepted accounting principles, fairly applied
and as employed on a consistent basis throughout AstraZeneca’s operations.

 

8.10.3.           Records Retention. Commencing with the First Commercial Sale
of a Product, AstraZeneca will keep complete and accurate records pertaining to
the sale of Products for a period of [***] after the year in which such sales
occurred, and in sufficient detail to permit Isis to confirm the accuracy of the
Net Sales or royalties paid by AstraZeneca hereunder.

 

46

--------------------------------------------------------------------------------

 

8.11.            Audits. During the Agreement Term and for a period of [***]
thereafter, at the request and expense of Isis, AstraZeneca will permit an
independent certified public accountant of nationally recognized standing
appointed by Isis and reasonably acceptable to AstraZeneca, at reasonable times
and upon reasonable notice, but in no case more than [***], to examine such
records as may be necessary for the purpose of verifying the calculation and
reporting of Net Sales and the correctness of any royalty payment made under
this Agreement for any period within the preceding [***]. As a condition to
examining any records of AstraZeneca, such auditor will sign a nondisclosure
agreement reasonably acceptable to AstraZeneca in form and substance. Any and
all records of AstraZeneca examined by such independent certified public
accountant will be deemed AstraZeneca’s Confidential Information. Upon
completion of the audit, the accounting firm will provide both AstraZeneca and
Isis with a written report disclosing whether the royalty payments made by
AstraZeneca are correct or incorrect and the specific details concerning any
discrepancies (“Audit Report”). If, as a result of any inspection of the books
and records of AstraZeneca, it is shown that AstraZeneca’s payments under this
Agreement were more or less than the royalty amount which should have been paid,
then the relevant Party will make all payments required to be made by paying the
other Party the difference between such amounts to eliminate any discrepancy
revealed by said inspection within 45 days of receiving the Audit Report, with
interest calculated in accordance with Section 8.13; provided, however, that any
such payment by Isis to AstraZeneca will be [***]. Isis will pay for such audit,
except that if AstraZeneca is found to have underpaid Isis by more than [***] of
the amount that should have been paid for the audited period, AstraZeneca will
reimburse Isis the reasonable fees and expenses charged by the accounting firm
for the audit.

 

8.12.                     Taxes.

 

8.12.1.                 Taxes On Income. Each Party alone will be solely
responsible for paying any and all Taxes (other than withholding taxes required
by Applicable Law to be paid by AstraZeneca or Isis (as the case may be) levied
on account of, or measured in whole or in part by reference to, the income of
such Party.

 

8.12.2.                 Indirect Taxes All payments are exclusive of Indirect
Taxes. If any Indirect Taxes are chargeable in respect of any payments, the
paying Party shall pay such Indirect Taxes at the applicable rate in respect of
such payments following receipt, where applicable, of an Indirect Taxes invoice
in the appropriate form issued by the receiving Party in respect of those
payments.

 

The Parties shall issue invoices for all amounts payable under this Agreement
consistent with Indirect Tax requirements and irrespective of whether the sums
may be netted for settlement purposes. If such amounts of Indirect Taxes are
refunded by the applicable Governmental Authority or other fiscal authority
subsequent to payment, the Party receiving such refund will transfer such amount
to the paying Party within forty-five (45) days of receipt. The Parties agree to
reasonably cooperate to provide any information required by the Party pursuing a
refund of Indirect Taxes paid.

 

47

--------------------------------------------------------------------------------

 

8.12.3.                 Withholding Tax. To the extent the paying Party is
required to deduct and withhold taxes on any payment, the paying Party will pay
the amounts of such taxes to the proper governmental authority for the account
of the receiving Party and remit the net amount to the receiving Party in a
timely manner. The paying Party will promptly furnish the receiving Party with
proof of payment of such taxes. If documentation is necessary in order to secure
an exemption from, or a reduction in, any withholding taxes, the Parties will
provide such documentation to the extent they are entitled to do so. In
accordance with the procedures set forth in Section 11.3 and Section 11.4, (i)
the receiving Party will also indemnify the paying Party for any tax, interest
or penalties imposed on the paying Party if the paying Party improperly reduces
or eliminates withholding tax based upon representations made by the receiving
Party, and (ii) Isis will indemnify AstraZeneca for any withholding tax incurred
on Isis Supported Pass-Through Costs that arises because these costs are deemed
to not be beneficially owned by Isis.

 

8.12.4.                 Tax Cooperation. At least 15 days prior to the date a
given payment is due under this Agreement, the non-paying Party will provide the
paying Party with any and all tax forms that may be reasonably necessary in
order for the paying Party to lawfully not withhold tax or to withhold tax at a
reduced rate with respect to such payment under an applicable bilateral income
tax treaty. Following the paying Party’s timely receipt of such tax forms from
the non-paying Party, the paying Party will not withhold tax or will withhold
tax at a reduced rate under an applicable bilateral income tax treaty, if
appropriate under the Applicable Laws. The non-paying Party will provide any
such tax forms to the paying Party upon request and in advance of the due date.
Each Party will provide the other with reasonable assistance to enable the
recovery, as permitted by Applicable Law, of withholding taxes resulting from
payments made under this Agreement, such recovery to be for the benefit of the
Party who would have been entitled to receive the money but for the application
of withholding tax under this Section 8.12.

 

The provisions of this Section 8.12 are to be read in conjunction with the
provisions of Section 14.3 below.

 

8.13.                        Interest. Any undisputed payments to be made
hereunder that are not paid on or before the date such payments are due under
this Agreement, and any payments that are pending resolution of any dispute
(including under Section 1.2.4) unless the dispute is ruled in favour of the
paying Party, will bear interest at a rate per annum equal to the lesser of (i)
the rate announced by Bank of America (or its successor) as its prime rate in
effect on the date that such payment would have been first due plus 1% or (ii)
the maximum rate permissible under applicable law.

 

48

--------------------------------------------------------------------------------

 

ARTICLE 9.
INTELLECTUAL PROPERTY

 

9.1.                            Ownership.

 

9.1.1.                  Isis Technology and AstraZeneca Technology. As between
the Parties, Isis will own and retain all of its rights, title and interest in
and to the Licensed Know-How and Licensed Patents and AstraZeneca will own and
retain all of its rights, title and interest in and to the AstraZeneca Know-How
and AstraZeneca Patents, subject to any assignments, rights or licenses
expressly granted by one Party to the other Party under this Agreement. For
clarity, except as otherwise expressly provided in this Agreement, the scope of
licenses granted by AstraZeneca under this Agreement shall not include
AstraZeneca Background Intellectual Property.

 

9.1.2.                  Agreement Technology. Each Party will promptly disclose
to the other Party in writing, and will cause its Affiliates to so disclose, the
discovery, development, or creation of any invention made solely or jointly by
the Parties in connection with the performance of obligations under this
Agreement. Except as otherwise expressly permitted under this Agreement, neither
Party or their Affiliates or respective Sublicensees shall license or exploit
the Jointly-Owned Collaboration Technology outside the scope of this Agreement
without the consent of the other Party, such consent not to be unreasonably
withheld.

 

9.1.3.                  Joint Patent Committee.

 

(a)                     The Parties will establish a “Joint Patent Committee” or
“JPC.”  The JPC will serve as the primary contact and forum for discussion
between the Parties with respect to intellectual property matters arising under
this Agreement, and will cooperate with respect to the activities set forth in
this ARTICLE 9. A strategy will be discussed with regard to (x) prosecution and
maintenance, defense and enforcement of Isis Product-Specific Patents,
AstraZeneca Product-Specific Patents and Jointly-Owned Collaboration Patents
that would be and/or are licensed to AstraZeneca under Section 6.1.1, Section
6.1.2 or Section 6.1.3, (y) defense against allegations of infringement of Third
Party Patent Rights, and (z) licenses to Third Party Patent Rights or Know-How,
in each case to the extent such matter would be reasonably likely to have a
material impact on this Agreement or the licenses granted hereunder. In
addition, the JPC will ensure that all Patent Rights claiming (i) the specific
composition of matter (the exact sequence and chemistry) of the [***]
Development Candidate and the other [***] Lead Compounds and/or an Oncology
Development Candidate, and/or (ii) methods of using such [***] Development
Candidate and such [***] Lead Compounds and/or an Oncology Development Candidate
as a prophylactic, therapeutic or diagnostic, will be separated into their own
patent applications separate from other subject matter to ensure any such claims
are licensed to AstraZeneca under Section 6.1.2 and assigned as Assignable [***]
Product-Specific Patents and/or Isis Product Specific Patents under Section
6.3.1. Isis’ obligation to participate in the JPC will terminate on

 

49

--------------------------------------------------------------------------------

 

the date Isis is no longer obligated to participate in the JSC. Thereafter, Isis
will have the right and expects, but is not obligated, to participate in JPC
meetings. In the case of existing Licensed Patents as of the Effective Date
(e.g., STAT3) that are necessary or useful to exploit a STAT3 Compound/Product
in the Field, the Parties are obligated to participate in JPC meetings to
cooperate with respect to the activities set forth in this ARTICLE 9.

 

(b)                     In addition, the JPC will be responsible for the
determination of inventorship. The determination of inventorship will be made in
accordance with United States patent laws and therefore this will determine if
the invention is solely or jointly owned by the relevant Party or Parties. The
JPC will comprise an equal number of members from each Party, which may be one
from each Party. The Joint Patent Committee will meet as often as agreed by them
(and at least semi-Annually), to discuss matters arising out of the activities
set forth in this ARTICLE 9. The JPC will determine by unanimous consent the JPC
operating procedures at its first meeting, including the JPC’s policies for
replacement of JPC members, and the location of meetings, which will be codified
in the written minutes of the first JPC meeting. To the extent reasonably
requested by either Party, the Joint Patent Committee will solicit the
involvement of more senior members of their respective legal departments (up to
the most senior intellectual property attorney, where appropriate) with respect
to critical issues, and may escalate issues to the Senior Representatives for
input and resolution pursuant to Section 14.1.1. Each Party’s representatives on
the Joint Patent Committee will consider comments and suggestions made by the
other in good faith. If either Party deems it reasonably advisable, the Parties
will enter into a mutually agreeable common interest agreement covering the
matters contemplated by this Agreement.

 

9.2.                   Prosecution and Maintenance of Patents.

 

9.2.1.                  Patent Filings. The Party responsible for Prosecution
and Maintenance of any Patent Rights as set forth in Section 9.2.2, Section
9.2.3 or Section 9.2.4 will endeavor to obtain patent protection for the Product
as it Prosecutes and Maintains its other patents Covering products in
development, using counsel of its own choice but reasonably acceptable to the
other Party, in such countries as the responsible Party sees fit.

 

9.2.2.                  Licensed Patents and AstraZeneca Patents.

 

(a)                     Isis Core Technology Patents and Isis Manufacturing and
Analytical Patents. During the Agreement Term, Isis will control and be
responsible for all aspects of the Isis Core Technology Patents, Isis
Manufacturing and Analytical Patents and, subject to Section 9.2.4, Licensable
[***] Product-Specific Patents.

 

50

--------------------------------------------------------------------------------

 

(b)                     Isis Product-Specific Patents and Jointly-Owned
Collaboration Patents. On a Gene Target-by-Gene Target basis, so long as the
applicable license to AstraZeneca under Section 6.1.1, Section 6.1.2 or
Section 6.1.3 (as applicable) is in effect, AstraZeneca will control and be
responsible for all aspects of the Prosecution and Maintenance of:

 

(i)                                    With respect to STAT3 Products and
Oncology Products licensed to AstraZeneca, the Isis Product-Specific Patents and
Jointly-Owned Collaboration Patents; and

 

(ii)                                With respect to [***] Products, the
Assignable [***] Product-Specific Patents,

 

In each case to the same extent Isis had the right to control and was
responsible for such Prosecution and Maintenance immediately prior to such
license, subject to Section 9.2.3 and Section 9.2.4, and AstraZeneca will grant
Isis the license set forth in Section 6.3.2.

 

(c)                      AstraZeneca Patents. AstraZeneca will control and be
responsible for all aspects of the Prosecution and Maintenance of all
AstraZeneca Patents, subject to Section 9.2.3 and Section 9.2.5.

 

9.2.3.                  Jointly-Owned Collaboration Patents. Isis will control
and be responsible for all aspects of the Prosecution and Maintenance of
Jointly-Owned Collaboration Patents that (i) do not Cover Products, and
(ii) have not been licensed to AstraZeneca under Section 6.1.1, Section 6.1.2 or
Section 6.1.3 (as applicable) that Cover Products. AstraZeneca will control and
be responsible for all aspects of the Prosecution and Maintenance of
Jointly-Owned Collaboration Patents licensed to AstraZeneca under Section 6.1.1,
Section 6.1.2 or Section 6.1.3 (as applicable) that Cover Products.

 

9.2.4.                  Prosecution of Licensable [***] Product-Specific
Patents.

 

(a)                                 Prosecution Principles. Because the license
granted by Isis to AstraZeneca under Section 6.1.2 is limited in scope to the
AstraZeneca [***]-Field, Isis may have an additional licensee under the
Licensable [***] Product-Specific Patents to exploit Isis [***]-Field ASOs in
the Isis [***]-Field (an “Isis [***]-Field ASO Licensee”). The purpose of this
provision is to foster the full and complete development, maintenance, and
protection of the Licensable [***] Product-Specific Patents and to protect the
rights of all interested parties, by outlining (i) the procedures for filing,
prosecuting, and maintaining the Licensable [***] Product-Specific Patents,
(ii) Isis’ commitment to fairly control filing, prosecution, and maintenance of
the Licensable [***] Product-Specific Patents, and (iii) equitable cost-sharing
allocations between AstraZeneca and the Isis [***]-Field ASO Licensee related
thereto.

 

51

--------------------------------------------------------------------------------

 

(b)                                 Procedures for Prosecution of Licensable
[***] Product-Specific Patents. Isis will have the sole right and responsibility
to obtain, prosecute, and maintain throughout the world (in such countries as
are commercially appropriate) the Licensable [***] Product-Specific Patents
using Commercially Reasonable Efforts with the objective of obtaining maximum
claim coverage for all compounds and products (including [***] Compounds and
[***] Products and their uses in the Field), with Patent Costs shared equally
between the Isis [***]-Field ASO Licensee and AstraZeneca (collectively, the
“Participating Parties”), or shared equally between AstraZeneca and Isis if no
such Isis [***]-Field ASO Licensee exists. Isis, as controlling party (or its
outside counsel), will provide the Participating Parties with an update of the
filing, prosecution, and maintenance status for each of such Licensable [***]
Product-Specific Patent on a periodic basis and will reasonably consult and
cooperate with the Participating Parties with respect to the preparation,
filing, prosecution, and maintenance of such Licensable [***] Product-Specific
Patents, including providing the Participating Parties with drafts of proposed
filings as soon as reasonably possible after such drafts are prepared and, in
any case, in sufficient time to allow the Participating Parties to review and
comment before such filings are due. Isis (or its outside counsel) will provide
the Participating Parties with copies of any documents relating to the filing,
prosecution, and maintenance of such Licensable [***] Product-Specific Patents
promptly upon their being filed or received. For clarity, Isis may cease
prosecuting or maintaining particular applications or patents in the Licensable
[***] Product-Specific Patents in selected jurisdictions, if Isis determines
that it is not commercially reasonable to continue such efforts; provided,
however, that Isis will not discontinue such prosecution or maintenance with
respect to a particular issued Licensable [***] Product-Specific Patent that
Covers the [***] product, [***] Development Candidate or any other [***] Lead
Compounds, or the use thereof and will not discontinue such prosecution or
maintenance without first notifying AstraZeneca, and AstraZeneca will have the
right, but not the obligation, to prosecute and maintain such Licensable [***]
Product-Specific Patent in the applicable country at its own expense with
counsel of its own choice by providing written notice to Isis within 30 days
after AstraZeneca receives such discontinuance notice from Isis.

 

9.2.5.                  Other Matters Pertaining to Prosecution and Maintenance
of Patents.

 

(a)                                 Each Party will keep the other Party
informed through the Joint Patent Committee as to material developments with
respect to the Prosecution and Maintenance of the Product-Specific Patents or
Jointly-Owned Collaboration Patents for which such Party has responsibility for
Prosecution and Maintenance pursuant to Section 9.2.2, Section 9.2.3,
Section 9.2.4 or this Section 9.2.5, including by providing copies of material
data as it arises, any office actions or office action responses or

 

52

--------------------------------------------------------------------------------

 

other correspondence that such Party provides to or receives from any patent
office, including notice of all interferences, reissues, re-examinations,
oppositions or requests for patent term extensions, and all patent-related
filings, and by providing the other Party the timely opportunity to have
reasonable input into the strategic aspects of such Prosecution and Maintenance.

 

(b)                     If AstraZeneca elects (i) not to file and prosecute
patent applications for the Jointly-Owned Collaboration Patents or Isis
Product-Specific Patents that have been licensed or assigned to AstraZeneca
under this Agreement or the AstraZeneca Product-Specific Patents
(“AstraZeneca-Prosecuted Patents”) in a particular country, (ii) not to continue
the prosecution (including any interferences, oppositions, reissue proceedings,
re-examinations, and patent term extensions, adjustments, and restorations) or
maintenance of any AstraZeneca-Prosecuted Patent in a particular country, or
(iii) not to file and prosecute patent applications for the
AstraZeneca-Prosecuted Patent in a particular country following a written
request from Isis to file and prosecute in such country, then AstraZeneca will
so notify Isis promptly in writing of its intention (including a reasonably
detailed rationale for doing so) in good time to enable Isis to meet any
deadlines by which an action must be taken to establish or preserve any such
Patent Right in such country; and Isis will have the right, but not the
obligation, to file, prosecute, maintain, enforce, or otherwise pursue such
AstraZeneca-Prosecuted Patent in the applicable country at its own expense with
counsel of its own choice. In such case, AstraZeneca will cooperate with Isis to
file for, or continue to Prosecute and Maintain or enforce, or otherwise pursue
such AstraZeneca-Prosecuted Patent in such country in Isis’ own name, but only
to the extent that AstraZeneca is not required to take any position with respect
to such abandoned AstraZeneca-Prosecuted Patent that would be reasonably likely
to adversely affect the scope, validity or enforceability of any of the other
Patent Rights being prosecuted and maintained by AstraZeneca under this
Agreement. Notwithstanding anything to the contrary in this Agreement, if Isis
assumes responsibility for the Prosecution and Maintenance of any such
AstraZeneca-Prosecuted Patent under this Section 9.2.5(b), Isis will have no
obligation to notify AstraZeneca if Isis intends to abandon such
AstraZeneca-Prosecuted Patent.

 

(c)                      The Parties, through the Joint Patent Committee, will
cooperate in good faith to determine if and when any divisional or continuation
applications will be filed with respect to any Jointly-Owned Collaboration
Patents or Product-Specific Patents, and where a divisional or continuation
patent application filing would be practical and reasonable, then such a
divisional or continuation filing will be made.

 

53

--------------------------------------------------------------------------------

 

(d)                     If the Party responsible for Prosecution and Maintenance
pursuant to Section 9.2.3 intends to abandon such Jointly-Owned Collaboration
Patent without first filing a continuation or substitution, then such Party will
notify the other Party of such intention at least 60 days before such
Jointly-Owned Collaboration Patent will become abandoned, and such other Party
will have the right, but not the obligation, to assume responsibility for the
Prosecution and Maintenance thereof at its own expense (subject to
Section 9.3.1) with counsel of its own choice, in which case the abandoning
Party will, and will cause its Affiliates to, assign to the other Party (or, if
such assignment is not possible, grant a fully-paid exclusive license in) all of
their rights, title and interest in and to such Jointly-Owned Collaboration
Patents. If a Party assumes responsibility for the Prosecution and Maintenance
of any such Jointly-Owned Collaboration Patents under this Section 9.2.5(d),
such Party will have no obligation to notify the other Party of any intention of
such Party to abandon such Jointly-Owned Collaboration Patents.

 

(e)                      In addition, the Parties will consult, through the
Joint Patent Committee, and take into consideration the comments of the other
Party for all matters relating to interferences, reissues, re-examinations and
oppositions with respect to those Patent Rights in which such other Party
(i) has an ownership interest, (ii) has received a license thereunder in
accordance with this Agreement, or (iii) may in the future, in accordance with
this Agreement, obtain a license or sublicense thereunder.

 

9.3.                            Patent Costs.

 

9.3.1.                  Jointly-Owned Collaboration Patents. Unless the Parties
agree otherwise, Isis and AstraZeneca will share equally the Patent Costs
associated with the Prosecution and Maintenance of Jointly-Owned Collaboration
Patents; provided that, either Party may decline to pay its share of costs for
filing, prosecuting and maintaining any Jointly-Owned Collaboration Patents in a
particular country or particular countries, in which case the declining Party
will, and will cause its Affiliates to, assign to the other Party (or, if such
assignment is not possible, grant a fully-paid exclusive license in) all of
their rights, titles and interests in and to such Jointly-Owned Collaboration
Patents.

 

9.3.2.                  Licensed Patents and AstraZeneca Patents. Except as set
forth in Section 9.2.4 and Section 9.3.1, each Party will be responsible for all
Patent Costs incurred by such Party prior to and after the Effective Date in all
countries in the Prosecution and Maintenance of Patent Rights for which such
Party is responsible under Section 9.2.

 

9.4.                   Defense of Claims Brought by Third Parties.

 

9.4.1.                  Oncology Products — Prior to Option Exercise. If a Third
Party initiates a Proceeding claiming a Patent Right owned by or licensed to
such Third Party is

 

54

--------------------------------------------------------------------------------

 

infringed by the Development, Manufacture or Commercialization of any Oncology
Product being researched or developed under an Oncology Collaboration Program
with respect to which AstraZeneca has not yet exercised its Option, Isis will
have the first right, but not the obligation, to defend against any such
Proceeding at its sole cost and expense. If Isis elects to defend against such
Proceeding, then Isis will have the sole right to direct the defense and to
elect whether to settle such claim; provided, however, Isis will not settle such
Proceeding without the prior written consent of AstraZeneca (such consent not to
be unreasonably withheld, conditioned or delayed). AstraZeneca will reasonably
assist Isis in defending such Proceeding and cooperate in any such litigation at
the request and expense of Isis. Isis will provide AstraZeneca with prompt
written notice of the commencement of any such Proceeding that is of the type
described in this Section 9.4, and Isis will keep AstraZeneca apprised of the
progress of such Proceeding. If Isis elects not to defend against such a
Proceeding, then Isis will so notify AstraZeneca in writing within 60 days after
Isis first receives written notice of the initiation of such Proceeding, and
AstraZeneca will have the right, but not the obligation, to defend against such
Proceeding at its sole cost and expense and thereafter AstraZeneca will have the
sole right to direct the defense thereof, including the right to settle such
claim (but only with the prior written consent of Isis, which consent will not
be unreasonably withheld, delayed or conditioned). In any event, the Party not
defending such Proceeding will reasonably assist the other Party and cooperate
in any such litigation at the request and expense of the Party defending such
Proceeding. Each Party may at its own expense and with its own counsel join any
defense initiated or directed by the other Party under this Section 9.4. Each
Party will provide the other Party with prompt written notice of the
commencement of any such Proceeding under this Section 9.4, and such Party will
promptly furnish the other Party with a copy of each communication relating to
the alleged infringement that is received by such Party.

 

9.4.2.                  STAT3 Products, [***] Products and Oncology Products
After Option Exercise. If a Third Party initiates a Proceeding claiming a Patent
Right owned by or licensed to such Third Party is infringed by the Development,
Manufacture or Commercialization of any (i) STAT3 Product or [***] Product being
developed or commercialized by AstraZeneca under a license granted under
Section 6.1.1 or Section 6.1.2, or (ii) Oncology Product being developed or
commercialized by AstraZeneca under a license granted under Section 6.1.3, then
in any of those cases AstraZeneca will have the first right, but not the
obligation, to defend against any such Proceeding at its sole cost and expense.
If AstraZeneca elects to defend against such Proceeding, then AstraZeneca will
have the sole right to direct the defense and to elect whether to settle such
claim (but only with the prior written consent of Isis, not to be unreasonably
withheld, conditioned or delayed). Isis will reasonably assist AstraZeneca in
defending such Proceeding and cooperate in any such litigation at the request
and expense of AstraZeneca. AstraZeneca will provide Isis with prompt written
notice of the commencement of any such Proceeding that is of the type described
in this Section 9.4, and AstraZeneca will keep Isis apprised of the progress of
such Proceeding. If AstraZeneca elects not to defend against a

 

55

--------------------------------------------------------------------------------

 

Proceeding, then AstraZeneca will so notify Isis in writing within 60 days after
AstraZeneca first receives written notice of the initiation of such Proceeding,
and Isis will have the right, but not the obligation, to defend against such a
Proceeding at its sole cost and expense and thereafter Isis will have the sole
right to direct the defense thereof, including the right to settle such claim
(but only with the prior written consent of AstraZeneca, which consent will not
be unreasonably withheld, delayed or conditioned). Notwithstanding the
foregoing, if [***]; provided, however, [***]. In any event, the Party not
defending such Proceeding will reasonably assist the other Party and cooperate
in any such litigation at the request and expense of the Party defending such
Proceeding. Each Party may at its own expense and with its own counsel join any
defense initiated or directed by the other Party under this Section 9.4. Each
Party will provide the other Party with prompt written notice of the
commencement of any such Proceeding under this Section 9.4, and such Party will
promptly furnish the other Party with a copy of each communication relating to
the alleged infringement that is received by such Party. Notwithstanding the
foregoing, if a Proceeding described under this Section 9.4.2 involves one or
more Licensable [***] Product-Specific Patents and there is an Isis [***]-Field
ASO Licensee as contemplated under Section 9.2.4, then the defense against any
such Proceeding will be conducted in the collective interest of, such Isis
[***]-Field ASO Licensee and AstraZeneca, and this Section 9.4.2 will be read
and construed in a manner that is consistent with the principles described in
Section 9.2.4 except that AstraZeneca will retain sole control in respect of the
defense strategy for the Assignable [***] Product-Specific Patents.

 

9.4.3.                  Discontinued Product. If a Third Party initiates a
Proceeding claiming that any Patent Right or Know-How owned by or licensed to
such Third Party is infringed by the Development, Manufacture or
Commercialization of a Discontinued Product, Isis will have the first right, but
not the obligation, to defend against and settle such Proceeding at its sole
cost and expense. AstraZeneca will reasonably assist Isis in defending such
Proceeding and cooperate in any such litigation at the request and expense of
Isis. Each Party may at its own expense and with its own counsel join any
defense directed by the other Party. Isis will provide AstraZeneca with prompt
written notice of the commencement of any such Proceeding, or of any allegation
of infringement of which Isis becomes aware and that is of the type described in
this Section 9.4.3, and Isis will promptly furnish AstraZeneca with a copy of
each communication relating to the alleged infringement received by Isis.

 

9.4.4.                  Interplay Between Enforcement of IP and Defense of Third
Party Claims.   Notwithstanding the provisions of Section 9.4.1 and
Section 9.4.3, to the extent that a Party’s defense against a Third Party claim
of infringement under this Section 9.4 involves (i) the enforcement of the other
Party’s Know-How or Patent Rights, or (ii) the defense of an invalidity claim
with respect to such other Party’s Know-How or Patent Rights, then, in each
case, the general

 

56

--------------------------------------------------------------------------------

 

concepts of Section 9.5 will apply to the enforcement of such other Party’s
Know-How or Patent Rights or the defense of such invalidity claim (i.e., each
Party has the right to enforce its own intellectual property, except that the
relevant Commercializing Party will have the initial right, to the extent
provided in Section 9.5, to enforce such Know-How or Patent Rights or defend
such invalidity claim, and the other Party will have a step-in right, to the
extent provided in Section 9.5, to enforce such Know-How or Patent Rights or
defend such invalidity claim).

 

9.5.                   Enforcement of Patents Against Competitive Infringement.

 

9.5.1.                  Duty to Notify of Competitive Infringement. If either
Party learns of an infringement, unauthorized use, misappropriation or
threatened infringement by a Third Party to which such Party does not owe any
obligation of confidentiality with respect to any Product-Specific Patents by
reason of the development, manufacture, use or commercialization of a product
directed against the RNA that encodes a Gene Target in the Field (“Competitive
Infringement”), such Party will promptly notify the other Party in writing and
will provide such other Party with available evidence of such Competitive
Infringement; provided, however, that for cases of Competitive Infringement
under Section 9.5.6 below, such written notice will be given within 10 days.

 

9.5.2.                  Control of Competitive Infringement Proceedings. For any
Competitive Infringement with respect to a Product (except for a Discontinued
Product) licensed to AstraZeneca under Section 6.1.1, Section 6.1.2 or
Section 6.1.3 (as applicable) that occurs after AstraZeneca is granted such
license, so long as part of such Proceeding AstraZeneca also enforces any Patent
Rights Controlled by AstraZeneca (including any Isis Product-Specific Patents
assigned by Isis to AstraZeneca under this Agreement) being infringed that Cover
such Product, then AstraZeneca will have the first right, but not the
obligation, to institute, prosecute, and control a Proceeding with respect
thereto by counsel of its own choice at its own expense, and Isis will have the
right, at its own expense, to be represented in that action by counsel of its
own choice, however, AstraZeneca will have the right to control such litigation.
If AstraZeneca fails to initiate a Proceeding within a period of 90 days after
receipt of written notice of such Competitive Infringement (subject to a 90 day
extension to conclude negotiations, if AstraZeneca has commenced good faith
negotiations with an alleged infringer for elimination of such Competitive
Infringement within such 90 day period), Isis will have the right to initiate
and control a Proceeding with respect to such Competitive Infringement by
counsel of its own choice, and AstraZeneca will have the right to be represented
in any such action by counsel of its own choice at its own expense.
Notwithstanding the foregoing, if [***]; provided, however, [***].
Notwithstanding the foregoing, if a Competitive Infringement described under
this Section 9.5 involves one or more Licensable [***] Product-Specific Patents
and there is an Isis [***]-Field ASO Licensee as contemplated under
Section 9.2.4, then the

 

57

--------------------------------------------------------------------------------

 

institution, prosecution, and control of a Proceeding with respect thereto will
be conducted in the collective interest of, such Isis [***]-Field ASO Licensee
and AstraZeneca, and this Section 9.5 will be read and construed in a manner
that is consistent with the principles described in Section 9.2.4 except that
AstraZeneca will retain sole control in respect of the defense strategy for the
Assignable [***] Product-Specific Patents.

 

9.5.3.                  Joinder.

 

(a)                     If a Party initiates a Proceeding in accordance with
this Section 9.5, the other Party agrees to be joined as a party plaintiff where
necessary and to give the first Party reasonable assistance and authority to
file and prosecute the Proceeding. Subject to Section 9.5.4, the costs and
expenses of each Party incurred pursuant to this Section 9.5.3(a) will be borne
by the Party initiating such Proceeding.

 

(b)                     If one Party initiates a Proceeding in accordance with
this Section 9.5.3, the other Party may join such Proceeding as a party
plaintiff where necessary for such other Party to seek lost profits with respect
to such infringement.

 

9.5.4.                  Share of Recoveries. Any damages or other monetary
awards recovered with respect to a Proceeding brought pursuant to this
Section 9.5 will be shared as follows:

 

(a)                                 the amount of such recovery will first be
applied to the Parties’ reasonable out-of-pocket costs incurred in connection
with such Proceeding (which amounts will be allocated pro rata if insufficient
to cover the totality of such expenses); then

 

(b)                                 any remaining proceeds will be allocated as
follows: (A) if Isis initiates the Proceeding pursuant to Section 9.4.1,
Section 9.4.2 or Section 9.4.3, [***]; (B) if AstraZeneca initiates the
Proceeding pursuant to Section 9.4.1, AstraZeneca will receive and retain [***]%
the remaining proceeds and Isis will receive and retain [***]% of the remaining
proceeds; and (C) if AstraZeneca initiates the Proceeding pursuant to
Section 9.4.2, [***].

 

9.5.5.                  Settlement. Notwithstanding anything to the contrary in
this ARTICLE 9, neither Party may enter a settlement, consent judgment or other
voluntary final disposition of a suit under this ARTICLE 9 that disclaims,
limits the scope of, admits the invalidity or unenforceability of, or grants a
license, covenant not to sue or similar immunity under a Patent Right Controlled
by the other Party without first obtaining the written consent of the Party that
Controls the relevant Patent Right.

 

9.5.6.                  35 USC 271(e)(2) Infringement. Notwithstanding anything
to the contrary in this Section 9.5, solely with respect to Licensed Patents
that have not been

 

58

--------------------------------------------------------------------------------

 

assigned to AstraZeneca under this Agreement for a Competitive Infringement
under 35 USC 271(e)(2), the time period set forth in Section 9.5.2 during which
a Party will have the initial right to bring a Proceeding will be shortened to a
total of 25 days, so that, to the extent the other Party has the right, pursuant
to such Section to initiate a Proceeding if the first Party does not initiate a
Proceeding, such other Party will have such right if the first Party does not
initiate a Proceeding within 25 days after such first Party’s receipt of written
notice of such Competitive Infringement.

 

9.6.                            Other Infringement.

 

9.6.1.                  Jointly-Owned Collaboration Patents. With respect to the
infringement in the Field of a Jointly-Owned Collaboration Patent which is not a
Competitive Infringement, the Parties will cooperate in good faith to bring suit
together against such infringing party or the Parties may decide to permit one
Party to solely bring suit. Any damages or other monetary awards recovered with
respect to a Proceeding brought pursuant to this Section 9.6.1 will be shared as
follows: (i) the amount of such recovery will first be applied to the Parties’
reasonable out-of-pocket costs incurred in connection with such Proceeding
(which amounts will be allocated pro rata if insufficient to cover the totality
of such expenses); (ii) (A) if the Parties jointly initiate a Proceeding
pursuant to this Section 9.6.1, [***]; and (B) if only one Party initiates the
Proceeding pursuant to this Section 9.6.1, [***].

 

9.6.2.                  Patents Solely Owned by Isis. Isis will retain all
rights to pursue an infringement of any Patent Right solely owned by Isis which
is other than a Competitive Infringement and Isis will retain all recoveries
with respect thereto.

 

9.6.3.                  Patents Solely Owned by AstraZeneca. AstraZeneca will
retain all rights to pursue an infringement of any Patent Right solely owned by
AstraZeneca which is other than a Competitive Infringement and AstraZeneca will
retain all recoveries with respect thereto.

 

9.7.                   Patent Listing.

 

9.7.1.                  AstraZeneca’s Obligations. AstraZeneca will promptly,
accurately and completely list, with the applicable Regulatory Authorities
during the Agreement Term, all applicable Patent Rights that Cover a Product
licensed to AstraZeneca under Section 6.1.1, Section 6.1.2 or Section 6.1.3 (as
applicable). Prior to such listings, the Parties will meet, through the Joint
Patent Committee, to evaluate and identify all applicable Patent Rights, and
AstraZeneca will have the right to review, where reasonable, original records
relating to any invention for which Patent Rights are being considered by the
Joint Patent Committee for any such listing. Notwithstanding the preceding
sentence, AstraZeneca will retain final decision-making authority as to the
listing of all applicable Patent Rights for a Product that are not Isis Core

 

59

--------------------------------------------------------------------------------

 

Technology Patents, Isis Manufacturing and Analytical Patents or Licensable
[***] Product-Specific Patents, regardless of which Party owns such Patent
Rights.

 

9.7.2.                  Isis’ Obligations. Isis will promptly, accurately and
completely list, with the applicable Regulatory Authorities during the Agreement
Term, all applicable Patent Rights that Cover a Discontinued Product. Prior to
such listings, the Parties will meet, through the Joint Patent Committee, to
evaluate and identify all applicable Patent Rights, and Isis will have the right
to review, where reasonable, original records relating to any invention for
which Patent Rights are being considered by the Joint Patent Committee for any
such listing. Notwithstanding the preceding sentence, Isis will retain final
decision-making authority as to the listing of all applicable Patent Rights for
such Discontinued Products, as applicable, regardless of which Party owns such
Patent Rights.

 

9.8.                   CREATE Act. Notwithstanding anything to the contrary in
this ARTICLE 9, neither Party will have the right to make an election under the
CREATE Act when exercising its rights under this ARTICLE 9 without the prior
written consent of the other Party, which will not be unreasonably withheld,
conditioned or delayed. With respect to any such permitted election, the Parties
will use reasonable efforts to cooperate and coordinate their activities with
respect to any submissions, filings or other activities in support thereof. The
Parties acknowledge and agree that this Agreement is a “joint research
agreement” as defined in the CREATE Act.

 

9.9.                   Obligations to Third Parties. Notwithstanding any of the
foregoing, each Party’s rights and obligations with respect to Licensed
Technology under this ARTICLE 9 will be subject to the Third Party rights and
obligations under any (i) Third Party agreements the restrictions and
obligations of which AstraZeneca has agreed to under Section 8.9.2(a)(ii),
Section 8.9.2(b)(i) or Section 8.9.2(b)(ii)(2), (ii) Prior Agreements, and
(iii) Isis In-License Agreements; provided, however, that, to the extent that
Isis has a non-transferable right to prosecute, maintain or enforce any Patent
Rights licensed to AstraZeneca hereunder and, this Agreement purports to grant
any such rights to AstraZeneca, Isis will act in such regard with respect to
such Patent Rights at AstraZeneca’s direction.

 

9.10.            Additional Rights and Exceptions. Notwithstanding any provision
of this ARTICLE 9, but subject to Section 9.2.4 and Section 9.4.4, Isis retains
the sole right to Prosecute and Maintain Isis Core Technology Patents, Isis
Manufacturing and Analytical Patents and Licensable [***] Product-Specific
Patents during the Agreement Term and to control any enforcement of Isis Core
Technology Patents and Isis Manufacturing and Analytical Patents, and will take
the lead on such enforcement solely to the extent that the scope or validity of
any Patent Rights Controlled by Isis and Covering the Isis Core Technology
Patents or Isis Manufacturing and Analytical Patents is at risk.

 

9.11.            Patent Term Extension. The Parties will cooperate with each
other in gaining patent term extension wherever applicable to a Product, and
AstraZeneca will determine which Isis Product-Specific Patents will be extended.
For clarity, with respect to any Isis

 

60

--------------------------------------------------------------------------------

 

Product-Specific Patent for which AstraZeneca has an exclusive license under
Section 6.1.1, Section 6.1.2 or Section 6.1.3 (as applicable), as between
AstraZeneca and any Third Party granted a license by Isis outside the Field
under any such Isis Product-Specific Patents, AstraZeneca will determine which
Isis Product-Specific Patents will be extended.

 

9.12.            No Challenge. As a material inducement for Isis entering into
this Agreement, AstraZeneca covenants to Isis that during the Agreement Term,
solely with respect to rights to the Licensed Patents that are included in a
license granted or that may be granted to AstraZeneca under Section 6.1.1,
Section 6.1.2 or Section 6.1.3 (as applicable), AstraZeneca, its Affiliates or
Sublicensees will not, in the United States or any other country, (a) commence
or otherwise voluntarily determine to participate in (other than as may be
necessary or reasonably required to assert a cross-claim or a counter-claim or
to respond to a court request or order or administrative law request or order)
any action or proceeding, challenging or denying the enforceability or validity
of any claim within an issued patent or patent application within such Licensed
Patents, or (b) direct, support or actively assist any other Person (other than
as may be necessary or reasonably required to assert a cross-claim or a
counter-claim or to respond to a court request or order or administrative law
request or order) in bringing or prosecuting any action or proceeding
challenging or denying the validity of any claim within an issued patent or
patent application within such Licensed Patents. For purposes of clarification
and without limiting any other available remedies, subject to any applicable
cure period provided herein for breaches of this Section 9.12 that are curable
(i.e., which would allow AstraZeneca the opportunity to rescind any wrongfully
brought actions by it, its Affiliates, or Sublicensees), if AstraZeneca takes
any of the actions described in clause (a) or clause (b) of this Section 9.12,
AstraZeneca will have materially breached this Agreement and Isis may terminate
this Agreement under Section 12.2.2(b).

 

ARTICLE 10.
REPRESENTATIONS AND WARRANTIES

 

10.1.            Representations and Warranties of Both Parties. Each Party
hereby represents and warrants as of the Effective Date, and covenants, to the
other Party that:

 

10.1.1.                     it has the power and authority and the legal right
to enter into this Agreement and perform its obligations hereunder, and that it
has taken all necessary action on its part required to authorize the execution
and delivery of this Agreement and the performance of its obligations hereunder;

 

10.1.2.                     this Agreement has been duly executed and delivered
on behalf of such Party and constitutes a legal, valid and binding obligation of
such Party and is enforceable against it in accordance with its terms subject to
the effects of bankruptcy, insolvency or other laws of general application
affecting the enforcement of creditor rights and judicial principles affecting
the availability of specific performance and general principles of equity,
whether enforceability is considered a proceeding at law or equity;

 

61

--------------------------------------------------------------------------------

 

10.1.3.                     all necessary consents, approvals and authorizations
of all Regulatory Authorities and other parties required to be obtained by such
Party in connection with the execution and delivery of this Agreement and the
performance of its obligations hereunder have been obtained;

 

10.1.4.                     the execution and delivery of this Agreement and the
performance of such Party’s obligations hereunder (a) do not conflict with or
violate any requirement of Applicable Law or any provision of the certificate of
incorporation, bylaws or any similar instrument of such Party, as applicable, in
any material way, and (b) do not conflict with, violate, or breach or constitute
a default or require any consent not already obtained under, any contractual
obligation or court or administrative order by which such Party is bound;

 

10.1.5.                     All employees, consultants, or (sub)contractors
(except academic collaborators or Third Parties under the Permitted Licenses or
Prior Agreements) of such Party or Affiliates performing development activities
hereunder on behalf of such Party are, and such Party hereby covenants to the
other Party that they will be, obligated to assign all right, title and interest
in and to any inventions developed by them, whether or not patentable, to such
Party or Affiliate, respectively, as the sole owner thereof;

 

10.1.6.                     Such Party will, and such Party hereby covenants to
the other Party that it will, perform its activities pursuant to this Agreement
in compliance with good laboratory and clinical practices and cGMP and
Applicable Law, in each case as applicable under the laws and regulations of the
country and the state and local government wherein such activities are
conducted, and with respect to the care, handling and use in development
activities hereunder of any non-human animals by or on behalf of such Party,
will at all times comply (and will ensure compliance by any of its
subcontractors) with all applicable national, federal, state and local laws,
regulations and ordinances in performing its obligations under this Agreement;
and

 

10.1.7.                     Such Party is not debarred under the United States
Federal Food, Drug and Cosmetic Act or comparable Applicable Laws and it does
not, and will not during the Agreement Term, employ or use the services of any
person or entity who is debarred, in connection with the development,
manufacture or commercialization of the Compounds or Products. If either Party
becomes aware of the debarment or threatened debarment of any person or entity
providing services to such Party, including the Party itself and its Affiliates
or Sublicensees, which directly or indirectly relate to activities under this
Agreement, the other Party will be immediately notified in writing.

 

10.2.            Representations, Warranties and Covenants of Isis. Isis hereby
represents and warrants to AstraZeneca, as of the Effective Date, that:

 

10.2.1.                     Isis is the owner of, or otherwise has the right to
grant all rights and licenses it purports to grant to AstraZeneca with respect
to the Licensed Technology

 

62

--------------------------------------------------------------------------------

 

 

under this Agreement for Compounds identified by Isis on or before the Effective
Date or Oncology Collaboration Programs as they exist on the Effective Date;

 

10.2.2.                     To Isis’ Knowledge, all Licensed Patents that are
owned by Isis (“Isis Owned Patents”) have been filed and maintained properly and
correctly in all material respects.

 

10.2.3.                     Isis has not previously entered into any agreement,
whether written or oral, with respect to, or otherwise assigned, transferred,
licensed, conveyed or otherwise encumbered its right, title or interest in or
to, the Licensed Technology (including by granting any covenant not to sue with
respect thereto) in such a way as to make the representation set forth in
Section 10.2.1 not true, and it will not enter into any such agreements or grant
any such right, title or interest to any Person that is inconsistent with the
rights and licenses granted to AstraZeneca under this Agreement;

 

10.2.4.                     To Isis’ Knowledge, each of the Isis Owned Patents
properly identifies each and every inventor of the claims thereof as determined
in accordance with the laws of the jurisdiction in which such Patent Right is
issued or such application is pending;

 

10.2.5.                     Isis has not received any written claim alleging
that any of the Isis Owned Patents are invalid or unenforceable, including any
Isis Owned Patents required in order for Isis to conduct its obligations under
the Collaboration Plans as they exist on the Effective Date, in each case with
respect to the Compounds and Products identified by Isis on or before the
Effective Date;

 

10.2.6.                     Isis has not received any written claim alleging
that any of Isis’ activities relating to the Compounds and Products identified
by Isis on or before the Effective Date infringe any intellectual property
rights of a Third Party;

 

10.2.7.                     To Isis’ Knowledge, (i) the licenses granted to Isis
under the Isis In-License Agreements are in full force and effect, (ii) Isis has
not received any written notice, and is not aware, of any breach by any party to
the Isis In-License Agreements, and (iii) Isis’ performance of its obligations
under this Agreement (including the Collaboration Plans as they exist on the
Effective Date) will not constitute a breach of Isis’ obligations under the Isis
In-License Agreements and the licenses granted to Isis thereunder;

 

10.2.8.                     To Isis’ Knowledge, Isis does not require any
additional licenses or other intellectual property rights in order for Isis to
conduct its obligations under the Collaboration Plans as they exist on the
Effective Date, in each case with respect to the Compounds identified by Isis on
or before the Effective Date;

 

10.2.9.                     To Isis’ Knowledge, in respect of the pending United
States patent applications included in the Isis Owned Patents, Isis has
submitted all material prior art of

 

63

--------------------------------------------------------------------------------

 

which it is aware in accordance with the requirements of the United States
Patent and Trademark Office;

 

10.2.10.              To Isis’ Knowledge, neither Isis nor its Affiliates owns
or Controls any Patent Rights or Know How covering formulation or delivery
technology as of the Effective Date that would be necessary or useful in order
for AstraZeneca to further Develop or Commercialize Compounds contemplated under
the Collaboration Plans as they exist on the Effective Date;

 

10.2.11.              APPENDIX 10 (Prior Agreements) is a complete and accurate
list of all agreements between Isis and Third Parties as of the Effective Date
with respect to the Gene Targets included in this Agreement as of the Effective
Date, that create material Third Party Obligations that affect the rights
granted by Isis to AstraZeneca under this Agreement. The Prior Agreements have
not been materially amended or extended since first being placed in the Isis
data room to which AstraZeneca was given access during the negotiation of this
Agreement and subject to redactions represent a true and complete and accurate
copy thereof, and any such redactions are of information not necessary to
disclose to understand the implications of such Prior Agreements to this
Agreement; and

 

10.2.12.              Isis has conducted, and has required its contractors and
consultants to conduct, any and all preclinical and clinical studies related to
the Compounds and Products in compliance with good laboratory and clinical
practices and cGMP and Applicable Law, in each case as applicable under the laws
and regulations of the country and the state and local government wherein such
activities were conducted.

 

10.2.13.              Isis has made available to AstraZeneca all material
Regulatory Documentation for ISIS-STAT3Rx. Isis has prepared, maintained and
retained such Regulatory Documentation required to be maintained or reported
pursuant to and in accordance with Applicable Law and such Regulatory
Documentation does not contain any materially false or misleading statements.

 

10.3.                     Representations, Warranties and Covenants of
AstraZeneca. AstraZeneca hereby represents and warrants to Isis that as of the
Effective Date, except as explicitly disclosed in writing by AstraZeneca to Isis
there are no Patent Rights comprised in AstraZeneca Background IP related to
STAT3 or [***] with respect to which AstraZeneca does not have the ability to
grant a license or sublicense hereunder to Isis without violating the terms of
any agreement with any Third Party.

 

10.4.                     DISCLAIMER OF WARRANTY. EXCEPT FOR THE EXPRESS
WARRANTIES SET FORTH IN THIS ARTICLE 10, ASTRAZENECA AND ISIS MAKE NO
REPRESENTATIONS AND GRANT NO WARRANTIES, EXPRESS OR IMPLIED, EITHER IN FACT OR
BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND ASTRAZENECA AND ISIS EACH
SPECIFICALLY DISCLAIM ANY WARRANTIES, WHETHER WRITTEN OR ORAL, OR EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTY OF

 

64

--------------------------------------------------------------------------------

 

QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY
WARRANTY AS TO THE VALIDITY OF ANY PATENT RIGHTS OR THE NON-INFRINGEMENT OF ANY
INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

 

ARTICLE 11.
INDEMNIFICATION; INSURANCE

 

11.1.            Indemnification by AstraZeneca. AstraZeneca agrees to defend
Isis, its Affiliates and their respective directors, officers, stockholders,
employees and agents, and their respective successors, heirs and assigns
(collectively, the “Isis Indemnitees”), and will indemnify and hold harmless the
Isis Indemnitees, from and against any liabilities, losses, costs, damages, fees
or expenses payable to a Third Party, and reasonable attorneys’ fees and other
legal expenses with respect thereto (collectively, “Losses”) arising out of any
claim, action, lawsuit or other proceeding by a Third Party (collectively,
“Third Party Claims”) brought against any Isis Indemnitee and resulting from or
occurring as a result of: (a) any activities conducted by an AstraZeneca
employee, consultant or (sub)contractor in the performance of the AstraZeneca
Conducted Activities, (b) the Development or Commercialization of any Compound
or Product by AstraZeneca or its Affiliates, Sublicensees or contractors,
(c) any breach by AstraZeneca of any of its representations, warranties or
covenants pursuant to this Agreement, or (d) the negligence or willful
misconduct of AstraZeneca or any AstraZeneca Affiliate or Sublicensee in the
performance of this Agreement; except in any such case to the extent such Losses
result from: (i) the negligence or willful misconduct of any Isis Indemnitee,
(ii) any breach by Isis of any of its representations, warranties, covenants or
obligations pursuant to this Agreement, or (iii) any breach of Applicable Law by
any Isis Indemnitee.

 

11.2.            Indemnification by Isis. Isis agrees to defend AstraZeneca, its
Affiliates and their respective directors, officers, stockholders, employees and
agents, and their respective successors, heirs and assigns (collectively, the
“AstraZeneca Indemnitees”), and will indemnify and hold harmless the AstraZeneca
Indemnitees, from and against any Losses arising out of Third Party Claims
brought against any AstraZeneca Indemnitee and resulting from or occurring as a
result of: (a) any activities conducted by an Isis employee, consultant or
(sub)contractor in the performance of the Isis Conducted Activities; (b) any
breach by Isis of any of its representations, warranties or covenants pursuant
to this Agreement, (c) the negligence or willful misconduct of any Isis
Indemnitee or any (sub)contractor of Isis in the performance of this Agreement,
or (d) the Development or Commercialization of any Discontinued Product by Isis
or its Affiliates, Sublicensees or contractors; except in any such case to the
extent such Losses result from: (i) the negligence or willful misconduct of any
AstraZeneca Indemnitee, (ii) any breach by AstraZeneca of any of its
representations, warranties, covenants or obligations pursuant to this
Agreement, or (iii) any breach of Applicable Law by any AstraZeneca Indemnitee.

 

65

--------------------------------------------------------------------------------

 

11.3.            Notice of Claim. All indemnification claims provided for in
Section 11.1 and Section 11.2 will be made solely by such Party to this
Agreement (the “Indemnified Party”). The Indemnified Party will give the
indemnifying Party prompt written notice (an “Indemnification Claim Notice”) of
any Losses or the discovery of any fact upon which the Indemnified Party intends
to base a request for indemnification under Section 11.1 or Section 11.2, but in
no event will the indemnifying Party be liable for any Losses to the extent such
Losses result from any delay in providing such notice. Each Indemnification
Claim Notice must contain a description of the claim and the nature and amount
of such Loss (to the extent that the nature and amount of such Loss is known at
such time). The Indemnified Party will furnish promptly to the indemnifying
Party copies of all papers and official documents received in respect of any
Losses and Third Party Claims.

 

11.4.            Defense, Settlement, Cooperation and Expenses.

 

11.4.1.           Control of Defense. At its option, the indemnifying Party may
assume the defense of any Third Party Claim by giving written notice to the
Indemnified Party within 30 days after the indemnifying Party’s receipt of an
Indemnification Claim Notice. The assumption of the defense of a Third Party
Claim by the indemnifying Party will not be construed as an acknowledgment that
the indemnifying Party is liable to indemnify the Indemnified Party in respect
of the Third Party Claim, nor will it constitute a waiver by the indemnifying
Party of any defenses it may assert against the Indemnified Party’s claim for
indemnification. Upon assuming the defense of a Third Party Claim, the
indemnifying Party may appoint as lead counsel in the defense of the Third Party
Claim any legal counsel selected by the indemnifying Party. In the event the
indemnifying Party assumes the defense of a Third Party Claim, the Indemnified
Party will as soon as is reasonably possible deliver to the indemnifying Party
all original notices and documents (including court papers) received by the
Indemnified Party in connection with the Third Party Claim. Should the
indemnifying Party assume the defense of a Third Party Claim, except as provided
in this Section 11.4.1, the Indemnified Party will be responsible for the legal
costs or expenses subsequently incurred by such Indemnified Party in connection
with the analysis, defense or settlement of the Third Party Claim.

 

11.4.2.           Right to Participate in Defense. Without limiting
Section 11.4.1, any Indemnified Party will be entitled to participate in, but
not control, the defense of such Third Party Claim and to employ counsel of its
choice for such purpose; provided, however, that such employment will be at the
Indemnified Party’s own cost and expense unless (a) the employment thereof has
been specifically authorized by the indemnifying Party in writing, (b) the
indemnifying Party has failed to assume the defense and employ counsel in
accordance with Section 11.4.1 (in which case the Indemnified Party will control
the defense), or (c) the interests of the Indemnified Party and the indemnifying
Party with respect to such Third Party Claim are sufficiently adverse to
prohibit the representation by the same counsel of both Parties under

 

66

--------------------------------------------------------------------------------

 

Applicable Law, ethical rules or equitable principles in which case the
indemnifying Party will be responsible for any such costs and expenses of
counsel for the Indemnified Party.

 

11.4.3.           Settlement. With respect to any Third Party Claims relating
solely to the payment of money damages in connection with a Third Party Claim
and that will not admit liability or violation of Law on the part of the
Indemnified Party or result in the Indemnified Party’s becoming subject to
injunctive or other relief or otherwise adversely affecting the business of the
Indemnified Party in any manner (such as granting a license or admitting the
invalidity of a Patent Right Controlled by an Indemnified Party), and as to
which the indemnifying Party will have acknowledged in writing the obligation to
indemnify the Indemnified Party hereunder, the indemnifying Party will have the
sole right to consent to the entry of any judgment, enter into any settlement or
otherwise dispose of such Loss, on such terms as the indemnifying Party, in its
sole discretion, will deem appropriate. With respect to all other Losses in
connection with Third Party Claims, where the indemnifying Party has assumed the
defense of the Third Party Claim in accordance with Section 11.4.1, the
indemnifying Party will have authority to consent to the entry of any judgment,
enter into any settlement or otherwise dispose of such Loss provided it obtains
the prior written consent of the Indemnified Party (which consent will not be
unreasonably withheld). The indemnifying Party will not be liable for any
settlement, consent to entry of judgment, or other disposition of a Loss by an
Indemnified Party that is reached without the written consent of the
indemnifying Party. Regardless of whether the indemnifying Party chooses to
defend or prosecute any Third Party Claim, no Indemnified Party will admit any
liability with respect to or settle, compromise or discharge, any Third Party
Claim without the prior written consent of the indemnifying Party, such consent
not to be unreasonably withheld.

 

11.4.4.           Cooperation. Regardless of whether the indemnifying Party
chooses to defend or prosecute any Third Party Claim, the Indemnified Party
will, and will cause each other Indemnified Party to, cooperate in the defense
or prosecution thereof and will furnish such records, information and testimony,
provide such witnesses and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested in connection
therewith. Such cooperation will include access during normal business hours
afforded to indemnifying Party to, and reasonable retention by the Indemnified
Party of, records and information that are reasonably relevant to such Third
Party Claim, and making Indemnified Parties and other employees and agents
available on a mutually convenient basis to provide additional information and
explanation of any material provided hereunder, and the indemnifying Party will
reimburse the Indemnified Party for all its reasonable out-of-pocket costs and
expenses in connection therewith.

 

67

--------------------------------------------------------------------------------

 

11.4.5.           Costs and Expenses. Except as provided above in this
Section 11.4, the costs and expenses, including attorneys’ fees and expenses,
incurred by the Indemnified Party in connection with any claim will be
reimbursed on a Calendar Quarter basis by the indemnifying Party, without
prejudice to the indemnifying Party’s right to contest the Indemnified Party’s
right to indemnification and subject to refund in the event the indemnifying
Party is ultimately held not to be obligated to indemnify the Indemnified Party.

 

11.5.            Insurance.

 

11.5.1.           Isis’ Insurance Obligations. Isis will maintain, at its cost,
reasonable insurance against liability and other risks associated with its
activities contemplated by this Agreement, including but not limited to its
indemnification obligations herein, in such amounts and on such terms as are
customary for prudent practices for biotech companies of similar size and with
similar resources in the pharmaceutical industry for the activities to be
conducted by it under this Agreement taking into account the scope of
development of products. Isis will furnish to AstraZeneca evidence of any
insurance required under this Section 11.5.1, upon request.

 

11.5.2.           AstraZeneca’s Insurance Obligations. AstraZeneca hereby
represents and warrants to Isis that it will maintain, at its cost, reasonable
insurance against liability and other risks associated with its activities
contemplated by this Agreement (including product liability), including but not
limited to its indemnification obligations herein, in such amounts and on such
terms as are customary for prudent practices for large companies in the
pharmaceutical industry for the activities to be conducted by AstraZeneca under
this Agreement. AstraZeneca will maintain such self insurance throughout the
Agreement Term and for five years thereafter, and will furnish to Isis evidence
of such insurance, upon request.

 

11.6.            LIMITATION OF CONSEQUENTIAL DAMAGES. EXCEPT FOR (a) CLAIMS OF A
THIRD PARTY THAT ARE SUBJECT TO INDEMNIFICATION UNDER THIS ARTICLE 11 OR
SECTION 12.3.2(i), (b) CLAIMS ARISING OUT OF A PARTY’S WILLFUL MISCONDUCT, (c) A
PARTY’S BREACH OF ARTICLE 5, OR A BREACH OF SECTION 12.3.1(a) BY ASTRAZENECA OR
ITS AFFILIATES OR (d) CLAIMS ARISING OUT OF A PARTY’S BREACH OF ITS
CONFIDENTIALITY OBLIGATIONS UNDER THIS AGREEMENT, NEITHER PARTY NOR ANY OF ITS
AFFILIATES WILL BE LIABLE TO THE OTHER PARTY TO THIS AGREEMENT OR ITS AFFILIATES
FOR ANY INCIDENTAL, CONSEQUENTIAL, SPECIAL, PUNITIVE OR OTHER INDIRECT DAMAGES
OR LOST OR IMPUTED PROFITS OR ROYALTIES, LOST DATA OR COST OF PROCUREMENT OF
SUBSTITUTE GOODS OR SERVICES, WHETHER LIABILITY IS ASSERTED IN CONTRACT, TORT
(INCLUDING NEGLIGENCE AND STRICT PRODUCT LIABILITY), INDEMNITY OR CONTRIBUTION,
AND IRRESPECTIVE OF WHETHER THAT PARTY OR ANY REPRESENTATIVE OF THAT PARTY HAS
BEEN

 

68

--------------------------------------------------------------------------------

 

ADVISED OF, OR OTHERWISE MIGHT HAVE ANTICIPATED THE POSSIBILITY OF, ANY SUCH
LOSS OR DAMAGE.

 

11.7.            Anti-Bribery and Corruption Compliance.

 

11.7.1              Each Party agrees, on behalf of itself, its officers,
directors and employees and on behalf of its Affiliates, agents,
representatives, consultants and subcontractors hired for activities undertaken
for or in connection with the performance of this Agreement (together with such
Party, the “Party Representatives”) that for the performance of its obligations
hereunder:

 

Party Representatives shall not directly or indirectly pay, offer or promise to
pay, or authorize the payment of any money, or give, offer or promise to give,
or authorize the giving of anything else of value, to:

 

(1)                                 any Government Official in order to
influence official action;

 

(2)                                 any Person (whether or not a Government
Official) (i) to influence such Person to act in breach of a duty of good faith,
impartiality or trust (“acting improperly”), (ii) to reward such Person for
acting improperly, or (iii) where such Person would be acting improperly by
receiving the money or other thing of value;

 

(3)                                 any other Person while knowing or having
reason to know that all or any portion of the money or other thing of value will
be paid, offered, promised or given to, or will otherwise benefit, a Government
Official in order to influence official action for or against either Party in
connection with the matters that are the subject of this Agreement; or

 

(4)                                 any Person to reward that Person for acting
improperly or to induce that Person to act improperly.

 

11.7.2              Party Representatives shall not, directly or indirectly,
solicit, receive or agree to accept any payment of money or anything else of
value in violation of the Anti-Corruption Laws.

 

11.7.3              Each Party acknowledges that its undertakings given in
Sections 11.7.1 and 11.7.2 are material to the other Party in entering into a
relationship with such Party.

 

11.7.4              Each Party, on behalf of itself and its Party
Representatives, represents and warrants to the other Party that for the term of
this Agreement and six years thereafter, it shall and shall procure that its
Party Representatives keep and maintain accurate books and reasonably detailed
records in connection with the performance of its obligation under this
Agreement including all records required to establish compliance with Sections
11.7.1 and 11.7.2 above.

 

69

--------------------------------------------------------------------------------

 

11.7.5              Each Party shall promptly provide the other Party with
written notice of the following events: (A) upon becoming aware of any breach or
violation by it or its Party Representatives of any representation, warranty or
undertaking set forth in Sections 11.7.1 and 11.7.2; and (B) upon receiving a
formal notification that it is the target of a formal investigation by a
Relevant Authority for a Material Anti-Corruption Law Violation or upon receipt
of information from any of its Party Representatives connected with this
Agreement that any of them is the target of a formal investigation by a Relevant
Authority for a Material Anti-Corruption Law Violation.

 

11.7.6              For the term of this Agreement and six years thereafter,
each Party shall for the purpose of auditing and monitoring the performance of
its compliance with the Agreement and particularly this Section 11.7 permit the
other Party, its Affiliates, any auditors of any of them and any Regulatory
Authority to have access to any premises of such Party or its Party
Representatives used in connection with this Agreement, together with a right to
access personnel and records that relate to this Agreement (“Audit”).

 

11.8                Each Party shall be responsible for any breach of any
representation, warranty or undertaking in this Section 11.7 or of the
Anti-Corruption Laws by any of its Party Representatives.

 

11.9                Each Party may disclose the terms of this Agreement or any
action taken under this Section 11.7 to prevent a potential violation or
continuing violation of applicable Anti-Corruption Laws, including the identity
of the other Party and the payment terms, to any governmental authority if such
Party determines, upon advice of counsel, that such disclosure is necessary.

 

ARTICLE 12.
TERM; TERMINATION

 

12.1.            Agreement Term; Expiration. This Agreement is effective as of
the Effective Date and, unless earlier terminated pursuant to the other
provisions of this ARTICLE 12, will continue in full force and effect until this
Agreement expires as follows:

 

12.1.1.           on a country-by-country and Product-by-Product basis, on the
date of expiration of all payment obligations by the Commercializing Party under
this Agreement with respect to such Product (or such Discontinued Product) in
such country; and

 

12.1.2.           in its entirety upon the expiration of all payment obligations
under this Agreement with respect to the last Product (or last Discontinued
Product) in all countries pursuant to Section 12.1.1.

 

70

--------------------------------------------------------------------------------

 

The period from the Effective Date until the date of expiration of this
Agreement pursuant to this Section 12.1 is the “Agreement Term.”

 

12.2.            Termination of the Agreement.

 

12.2.1.           AstraZeneca’s Termination for Convenience or Change of
Control.

 

(a)                                 Termination for Convenience. At any time
following payment by AstraZeneca of the upfront fee under Section 8.1, subject
to Section 12.3.1 below, AstraZeneca will be entitled to terminate this
Agreement in part with respect to STAT3 Products or [***] Products for
convenience by providing 90 days written notice to Isis of such termination. In
addition, at any time following payment by AstraZeneca of the upfront fee under
Section 8.1 and the payment under Section 8.3, subject to Section 12.3.1 below,
AstraZeneca will be entitled to terminate this Agreement in its entirety or in
part on a Product-by-Product, Gene Target-by-Gene Target basis for convenience
by providing 90 days written notice to Isis of such termination.

 

(b)                                 Change of Control Event. Prior to the Option
Deadline for an Oncology Target or until Isis has completed the Isis Conducted
Activities with respect to the STAT3 Program or [***] Program under the R&D
Research and Development Plan, AstraZeneca will have the right to terminate this
Agreement in whole or in part with respect to one or more Oncology Targets for
which AstraZeneca has not exercised its Option or with respect to a Licensed
Target, immediately upon written notice to Isis provided at any time within 30
Business Days following notification by Isis to AstraZeneca of the closing of a
Change of Control Event (and Isis shall be obliged to give notice on such
closing, and in the event it fails to do so, AstraZeneca’s right to terminate
may be exercised within 90 Business Days of such closing coming to AstraZeneca’s
Knowledge), if such closing occurs during the Oncology Collaboration Term or
before Isis has completed the Isis Conducted Activities with respect to the
STAT3 Program or [***] Program under the R&D Research and Development Plan (as
applicable). If at AstraZeneca’s discretion, AstraZeneca decides not to
terminate this Agreement with respect to a particular Gene Target pursuant to
this Section 12.2.1(b) following the closing of a Change of Control Event during
the Oncology Collaboration Term, then, subject to the below provisions in this
Section 12.2.1, Isis’ and AstraZeneca’s obligations under ARTICLE 3 to perform
the relevant Collaboration Program on such Gene Target will remain and Isis (or
its successor) will use commercially reasonable efforts to perform the Oncology
Collaboration Program on such Oncology Target in accordance with ARTICLE 3
while, to the extent reasonably practicable, maintaining confidentiality of
AstraZeneca’s Confidential Information from any entity acquiring Isis as a
result of the Change of Control Event. As soon as reasonably possible after the
public announcement of such a Change of

 

71

--------------------------------------------------------------------------------

 

Control Event, Isis (or its successor) and AstraZeneca will meet to discuss in
good faith how Isis (or its successor) will continue to perform its obligations
under this Agreement with respect to any Licensed Targets and Oncology Targets
for which AstraZeneca has not exercised its Option so that AstraZeneca can
consider whether to exercise its rights of termination under this
Section 12.2.1(b).  If AstraZeneca does not exercise its right of termination it
shall have the right, by providing Isis with written notice within 30 Business
Days following notification by Isis to AstraZeneca of the closing of a Change of
Control Event, to require that Isis ceases performing any or certain activities
and co-operate and take such measures as may be requested to ensure a prompt and
smooth transition of such activities to AstraZeneca or its designee. AstraZeneca
shall be entitled to deduct an amount equal to the [***]) from its next
applicable milestone or license fee payment as applicable. Without prejudice to
the foregoing, if requested by AstraZeneca such measures shall include a
technology transfer pursuant to the provisions of Section 6.5 or
Section 6.1.4(b), in either case without charge to AstraZeneca.  Furthermore, if
the surviving entity following such Change of Control Event is clinically
developing or commercializing a product that is directly competing with a
Product under this Agreement, then, solely with respect to the Product that is
subjected to such competition, AstraZeneca will no longer be bound by the
disclosure requirements of Section 4.3 hereof and may require that Isis cease to
participate in the JSC.

 

12.2.2.           Termination for Material Breach.

 

(a)                     AstraZeneca’s Right to Terminate. If AstraZeneca has
reason to believe that Isis is in material breach of this Agreement (other than
with respect to a failure to use Commercially Reasonable Efforts under
ARTICLE 1, ARTICLE 2 or ARTICLE 3, which is governed by Section 12.2.3 below),
then AstraZeneca may deliver notice of such material breach to Isis. If the
breach is curable, Isis will have 60 days to cure such breach. If Isis fails to
cure such breach within the 60 day period, or if the breach is not subject to
cure, AstraZeneca may terminate this Agreement in its entirety if such breach
relates to this Agreement in its entirety, or in relevant part on a
Product-by-Product, Gene Target-by-Gene Target basis if such breach does not
relate to this Agreement in its entirety, by providing written notice to Isis.

 

(b)                     Isis’ Right to Terminate. If Isis has reason to believe
that AstraZeneca is in material breach of this Agreement (other than with
respect to a failure to use Commercially Reasonable Efforts under ARTICLE 1,
ARTICLE 2, ARTICLE 3 or Section 7.1, which is governed by Section 12.2.3 below),
then Isis may deliver notice of such material breach to AstraZeneca. If the
breach is curable, AstraZeneca will have 60 days to cure such breach (except to
the extent such breach involves the failure to make a payment

 

72

--------------------------------------------------------------------------------

 

when due, which breach must be cured within 30 days following such notice). If
AstraZeneca fails to cure such breach within the 60 day or 30 day period, as
applicable, or if the breach is not subject to cure, Isis may terminate this
Agreement in its entirety if such breach relates to this Agreement in its
entirety, or in relevant part on a Product-by-Product, Gene Target-by-Gene
Target basis if such breach does not relate to this Agreement in its entirety,
by providing written notice to AstraZeneca.

 

12.2.3.           Remedies for Failure to Use Commercially Reasonable Efforts.

 

(a)                     If Isis fails to use Commercially Reasonable Efforts as
contemplated in ARTICLE 1, ARTICLE 2 or ARTICLE 3 (as determined in accordance
with Section 14.1), AstraZeneca will notify Isis and, within 30 days
thereafter, Isis and AstraZeneca will meet and confer to discuss and resolve the
matter in good faith, and attempt to devise a mutually agreeable plan to address
any outstanding issues related to Isis’ use of Commercially Reasonable Efforts
in ARTICLE 1, ARTICLE 2 or ARTICLE 3. Following such a meeting, if Isis fails to
use Commercially Reasonable Efforts as contemplated in ARTICLE 1, ARTICLE 2 or
ARTICLE 3, then subject to Section 12.2.4 below, AstraZeneca will have the
right, at its sole discretion, to terminate this Agreement in whole or in part
on a Product-by-Product, Gene Target-by-Gene Target basis.

 

(b)                     If AstraZeneca fails to use Commercially Reasonable
Efforts as contemplated in ARTICLE 1, ARTICLE 2, ARTICLE 3 or Section 7.1 (as
determined in accordance with Section 14.1), Isis will notify AstraZeneca and,
within 30 days thereafter, Isis and AstraZeneca will meet and confer to discuss
and resolve the matter in good faith, and attempt to devise a mutually agreeable
plan to address any outstanding issues related to AstraZeneca’s use of
Commercially Reasonable Efforts in ARTICLE 1, ARTICLE 2, ARTICLE 3 or
Section 7.1. Following such a meeting, if AstraZeneca fails to use Commercially
Reasonable Efforts as contemplated in ARTICLE 1, ARTICLE 2, ARTICLE 3 or
Section 7.1, then subject to Section 12.2.4 below, Isis will have the right, at
its sole discretion, to terminate this Agreement in part on a
Product-by-Product, Gene Target-by-Gene Target basis.

 

12.2.4.           Disputes Regarding Material Breach. Notwithstanding the
foregoing, if the Breaching Party in Section 12.2.2 or Section 12.2.3 disputes
in good faith the existence, materiality, or failure to cure of any such breach
which is not a payment breach, and provides notice to the Non-Breaching Party of
such dispute within such 60 day period, the Non-Breaching Party will not have
the right to terminate this Agreement in accordance with Section 12.2.2 or
Section 12.2.3, unless and until it has been determined in accordance with
Section 14.1 that this Agreement was materially breached by the Breaching Party
and the Breaching Party fails to cure such breach within 30 days following such
determination. It is understood and acknowledged that during the pendency of

 

73

--------------------------------------------------------------------------------

 

such dispute, all the terms and conditions of this Agreement will remain in
effect and the Parties will continue to perform all of their respective
obligations hereunder, including satisfying any payment obligations.

 

12.2.5.           Termination for Insolvency.

 

(a)                     Either Party may terminate this Agreement if, at any
time, the other Party files in any court or agency pursuant to any statute or
regulation of any state or country a petition in bankruptcy or insolvency or for
the appointment of a receiver or trustee of the Party or of substantially all of
its assets; or if the other Party proposes a written agreement of composition or
extension of substantially all of its debts; or if the other Party will be
served with an involuntary petition against it, filed in any insolvency
proceeding, and such petition will not be dismissed within 90 days after the
filing thereof; or if the other Party will propose or be a party to any
dissolution or liquidation; or if the other Party will make an assignment of
substantially all of its assets for the benefit of creditors.

 

(b)                     All rights and licenses granted under or pursuant to any
section of this Agreement are and will otherwise be deemed to be for purposes of
Section 365(n) of Title 11, United States Code (the “Bankruptcy Code”) or
analogous provisions of Applicable Law outside the US licenses of rights to
“intellectual property” as defined in Section 101(56) of the Bankruptcy Code or
analogous provisions of Applicable Law outside the US. The Parties will retain
and may fully exercise all of their respective rights and elections under the
Bankruptcy Code or analogous provisions of Applicable Law outside the US. Upon
the commencement of a bankruptcy proceeding of any Party, the non-bankrupt Party
will further be entitled to a complete duplicate of, or complete access to, any
such intellectual property, and all embodiments which, if not already in its
possession, will be promptly delivered to the non-bankrupt Party upon written
request.

 

12.3.            Consequences of Expiration or Termination of this Agreement.

 

12.3.1.           Consequence of Termination of this Agreement. If this
Agreement is terminated by a Party in accordance with this ARTICLE 12 in its
entirety or on a Product-by-Product, Gene Target-by-Gene Target basis (including
under Section 1.2.3, Section 2.2.3 or Section 2.2.4(b)) at any time and for any
reason, the following terms will apply to any such termination, but only to the
extent of any such termination (i.e., in part or in its entirety):

 

(a)                                 Licenses. The licenses granted by Isis to
AstraZeneca under this Agreement will terminate and AstraZeneca, its Affiliates,
Sublicensees and Distributors will cease selling Products; provided, that
AstraZeneca, its Affiliates, Sublicensees and Distributors shall have the right
to sell any

 

74

--------------------------------------------------------------------------------

 

remaining inventory of Product over a period of no greater than six months after
the effective date of such termination, and AstraZeneca will pay Isis royalties
in accordance with Section 8.8 on the Net Sales of such inventory of such
Products, to the extent not already paid.

 

(b)                                 Option. AstraZeneca’s Option will terminate
with respect to any terminated Oncology Target.

 

(c)                                  Exclusivity. Neither Party will have any
further obligations under Section 5.1 of this Agreement insofar as it relates to
such termination.

 

(d)                                 Collaboration Plans. Neither Party will have
any further obligations with respect to the terminated Collaboration Plan(s).

 

(e)                                  Return of Information and Materials. The
Parties will return (or destroy, as directed by the other Party) all data,
files, records and other materials containing or comprising the other Party’s
Confidential Information. Notwithstanding the foregoing, the Parties will be
permitted to retain one copy of such data, files, records, and other materials
for archival and legal compliance purposes.

 

(f)                                   Accrued Rights. Termination of this
Agreement for any reason will be without prejudice to any rights or financial
compensation that will have accrued to the benefit of a Party prior to such
termination. Such termination will not relieve a Party from obligations that are
expressly indicated to survive the termination of this Agreement. For purposes
of clarification, milestone payments under ARTICLE 8 accrue as of the date the
applicable milestone event is achieved even if the payment is not due at that
time.

 

(g)                                 Survival. The following provisions of this
Agreement will survive the expiration or earlier termination of this Agreement:
Section 3.4 (Expiration of Oncology Collaboration Term) (but only with respect
to the licenses and other rights granted by AstraZeneca to Isis therein),
Section 3.5.2 (Options) (but only until any initiated but uncompleted
IND-Enabling Toxicology Studies are completed), Section 6.1.4(d) (Effect of
Termination on Sublicenses), Section 6.1.5 (Consequence of Natural Expiration of
this Agreement), Section 6.3.2 (Grant-Back to Isis of Isis Product-Specific
Patents), Section 8.10.3 (Record Retention), Section 8.11 (Audits),
Section 8.12.3 (Withholding Tax) (but only with respect to any indemnification
obligations therein), Section 9.1.1 (Isis Technology and AstraZeneca
Technology), Section 9.1.2 (Agreement Technology), Section 12.2.5 (Termination
for Insolvency), Section 12.3 (Consequences of Termination of this Agreement),
ARTICLE 11 (Indemnification) (but excluding Section 11.7 through Section 11.9),
ARTICLE 13 (Confidentiality), ARTICLE 14 (Miscellaneous) and APPENDIX 1

 

75

--------------------------------------------------------------------------------

 

(Definitions) (to the extent definitions are embodied in the foregoing listed
Articles and Sections).

 

12.3.2.           Isis: Special Consequences of Certain Terminations. If
(A) this Agreement is terminated under Section 1.2.3, Section 2.2.3 or
Section 2.2.4(b) with respect to STAT3 or [***] (as applicable), (B) AstraZeneca
terminates the Agreement under Section 12.2.1 or (C) Isis terminates this
Agreement under Section 12.2.2(b), Section 12.2.3(b) or Section 12.2.5, then, in
addition to the terms set forth in Section 12.3.1, the following additional
terms will also apply:

 

(i)                                    AstraZeneca will and hereby does grant to
Isis:

 

(1)                    a sublicensable, worldwide, exclusive license or
sublicense, as the case may be, under all AstraZeneca Technology (excluding
AstraZeneca Background IP) Controlled by AstraZeneca as of the date of such
reversion that Covers the Discontinued Product; and

 

(2)                    a sublicensable, worldwide, non-exclusive license or
sublicense, as the case may be, under all AstraZeneca Background IP Controlled
by AstraZeneca as of the date of such reversion that Covers the Discontinued
Product;

 

in each case solely to Develop, make, have made, use, sell, offer for sale, have
sold, import and otherwise Commercialize the Discontinued Product in the Field
(such licenses will be sublicensable by Isis in accordance with Section 6.1.4,
mutatis mutandis); and provided that Isis shall, in accordance with ARTICLE 11,
indemnify and hold harmless AstraZeneca and its Affiliates and Sublicensees from
any Losses with respect to the Development and Commercialization of such
Discontinued Product under such licenses.

 

(ii)                                AstraZeneca will assign back to Isis any
Patent Rights that relate to the Discontinued Product previously assigned by
Isis to AstraZeneca under this Agreement;

 

(iii)                            AstraZeneca will transfer to Isis for use with
respect to the Development and Commercialization of the Discontinued Product,
any Know-How, data, results, regulatory information, filings, and files in the
possession of AstraZeneca, or copies thereof, as of the date of such termination
or reversion that relate solely to such Discontinued Product, and any other
information or material specified in Section 6.5;

 

(iv)                             AstraZeneca will grant to Isis a non-exclusive,
royalty-free, fully paid up license under any trademarks that are specific to

 

76

--------------------------------------------------------------------------------

 

a Discontinued Product solely for use with such Discontinued Product; provided,
however, that in no event will AstraZeneca have any obligation to license to
Isis any trademarks used by AstraZeneca both in connection with the Product and
in connection with the sale of any other product or service, including any
AstraZeneca- or AstraZeneca-formative marks;

 

(v)                                 Isis will control and be responsible for all
aspects of the Prosecution and Maintenance of all Jointly-Owned Collaboration
Patents, and AstraZeneca will provide Isis with (and will instruct its counsel
to provide Isis with) all of the information and records in AstraZeneca’s and
its counsel’s possession related to the Prosecution and Maintenance of such
Jointly-Owned Collaboration Patents only in respect of the Discontinued Product;

 

(vi)                             upon Isis’ written request pursuant to a
mutually agreed supply agreement, AstraZeneca will sell to Isis any bulk API and
finished Product in AstraZeneca’s possession related to the Compounds that are
the subject of the termination at the time of such termination, at a price equal
to AstraZeneca’s cost at the time such material was produced;

 

(vii)                         If Isis or any of its Affiliates or Sublicensees
Commercializes a Discontinued Product for which AstraZeneca has paid Isis the
license fee under Section 8.1(i), Section 8.1(ii) or Section 8.2 (as
applicable), then following the First Commercial Sale of such Discontinued
Product by Isis or its Affiliates or Sublicensees, Isis will pay AstraZeneca a
royalty of [***]% of Annual worldwide Net Sales of such Discontinued Product
until [***]; and

 

(viii)                     If there are any licensed rights granted by
AstraZeneca to Isis under Section 12.3.2(i)(2), the Parties shall negotiate in
good faith regarding a reasonable royalty for such Discontinued Product (not to
exceed [***]% of Annual worldwide Net Sales of such Discontinued Product) to be
paid by Isis to AstraZeneca for Discontinued Products covered by such licensed
rights, with such royalty payments beginning on the date [***] and ending on the
earlier of [***].

 

12.3.3.           AstraZeneca: Special Consequences of Certain Terminations.

 

(a)                                 If AstraZeneca terminates this Agreement
under Section 12.2.2(a), Section 12.2.3(a) or Section 12.2.5, all of the
provisions of Section 12.3.1 shall apply, except that AstraZeneca, its
Affiliates, Sublicensees and

 

77

--------------------------------------------------------------------------------

 

Distributors shall have the right to sell any remaining inventory of Product,
and AstraZeneca will pay Isis royalties in accordance with Section 8.8 on the
Net Sales of such inventory of such Products to the extent not already paid.

 

(b)                                 If AstraZeneca has the right to terminate
this Agreement under Section 12.2.2(a), Section 12.2.3(a) or Section 12.2.5, but
elects to continue the Agreement, the following provisions which shall be
effective upon AstraZeneca’s notice of such election, shall apply:

 

(i)                                    AstraZeneca may require that Isis ceases
performing any activities and co-operate and take such measures as may be
requested to ensure a prompt and smooth transition of such activities to
AstraZeneca or its designee; and may require that Isis cease to participate in
the JSC. Without prejudice to the foregoing, if requested by AstraZeneca such
measures shall include a technology transfer pursuant to the provisions of
Section 6.5 or Section 6.1.4(c), in either case without charge to AstraZeneca;
and

 

(ii)                                any money damages that may be awarded to
AstraZeneca arising from the circumstances which gave rise to the right to
terminate, and any costs (the amount of such costs as mutually agreed in good
faith by the Parties) incurred by AstraZeneca in connection with the transition
of Isis’ responsibilities under this Agreement to AstraZeneca or its designee
may be setoff against any monies owed by AstraZeneca to Isis as provided in
Section 14.2.2.

 

(c)                                  The provisions of this Section 12.3.3 will
not preclude any Party from pursuing all rights and remedies it may have
hereunder or at law or in equity with respect to any breach of this Agreement,
nor prejudice any Party’s right to obtain performance of any obligation.

 

ARTICLE 13.
CONFIDENTIALITY

 

13.1.            Confidentiality; Exceptions. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing, the Parties agree
that, during the Agreement Term and for five years thereafter, the receiving
Party (the “Receiving Party”) and its Affiliates will keep confidential and will
not publish or otherwise disclose or use for any purpose other than as provided
for in this Agreement any Confidential Information disclosed by the other Party
or its Affiliates (the “Disclosing Party”).

 

78

--------------------------------------------------------------------------------

 

13.2.            Prior Confidentiality Agreement. The Mutual Confidential
Disclosure Agreement executed by Isis and AstraZeneca on April 11, 2011
(including any and all amendments thereto) (the “CDA”) will govern disclosures
of Confidential Information (as defined in the CDA) between the Parties prior to
the Effective Date. All Confidential Information exchanged between the Parties
on or after the Effective Date under this Agreement will be subject to the terms
of this ARTICLE 13.

 

13.3.            Authorized Disclosure. Except as expressly provided otherwise
in this Agreement, a Receiving Party or its Affiliates may use and disclose to
Third Parties Confidential Information of the Disclosing Party as follows:
(i) solely in connection with the performance of its obligations or exercise of
rights granted or reserved in this Agreement under confidentiality provisions no
less restrictive than those in this Agreement, provided, that Confidential
Information may be disclosed by a Receiving Party to a governmental entity or
agency without requiring such entity or agency to enter into a confidentiality
agreement; (ii) to the extent reasonably necessary to file or prosecute patent,
copyright and trademark applications (subject to Section 13.4 below), complying
with applicable governmental regulations, obtaining Approvals, conducting
Pre-Clinical Studies or Clinical Studies, marketing the Product, or as otherwise
required by applicable law, regulation, rule or legal process (including the
rules of the SEC and any stock exchange); provided, however, that if a Receiving
Party or any of its Affiliates is required by law or regulation to make any such
disclosure of a Disclosing Party’s Confidential Information it will, except
where impracticable for necessary disclosures, give reasonable advance notice to
the Disclosing Party of such disclosure requirement and will use its reasonable
efforts to secure confidential treatment of such Confidential Information
required to be disclosed; (iii) in communication with actual or potential
lenders, investors, merger partners, acquirers, consultants, or professional
advisors on a need-to-know basis, in each case under confidentiality provisions
no less restrictive than those of this Agreement; (iv) to the extent such
disclosure is required to comply with existing expressly stated contractual
obligations owed to such Party’s or its Affiliates’ licensor with respect to any
intellectual property licensed to the other Party under this Agreement;
(v) subject to the terms of any protective order the Disclosing Party is using
to protect its own Confidential Information, to prosecute or defend litigation
as permitted by this Agreement, or (vi) as mutually agreed to in writing by the
Parties.

 

13.4.            Press Release; Publications; Disclosure of Agreement.

 

13.4.1.           Public Announcements – Generally. Upon execution of this
Agreement, the Parties will issue a joint press release announcing the existence
of this Agreement in a form and substance agreed to in writing by the Parties.
Except to the extent required to comply with Applicable Law, regulation, rule or
legal process or as otherwise permitted in accordance with this Section 13.4,
each Party agrees not to issue any other press release or other public statement
disclosing other information relating to this Agreement or the terms of this
Agreement or the transactions contemplated hereby without the prior written
consent of the other Party, which consent will not be unreasonably withheld or
delayed.

 

79

--------------------------------------------------------------------------------

 

13.4.2.           Use of Name. Except as set forth in Section 13.4.8, neither
Party will use the other Party’s name in a press release or other publication
without first obtaining the prior consent of the Party to be named.

 

13.4.3.           Notice of Significant Events. Each Party will immediately
notify (and provide as much advance notice as possible, but at a minimum three
Business Days advance notice to) the other of any significant event related to a
Product (including any data or regulatory advice or approval) so that the
Parties may analyze the need to or desirability of publicly disclosing or
reporting such event. Notwithstanding Section 13.4.1 above, any press release or
other similar public communication by either Party related to a Product’s
efficacy or safety data and/or results, will be submitted to the other Party for
review and approval at least three Business Days in advance of such proposed
public disclosure, which approval will not be unreasonably withheld or delayed.

 

13.4.4.           Disclosure of Information Related to Products. The Party that
has primary control of a Product (i.e., Isis, with respect to Products for which
AstraZeneca has not exercised its Option; and AstraZeneca, with respect to STAT3
Products, [***] Products and Products for which AstraZeneca has exercised its
Option) has the sole right, consistent with its practice with its other
products, to issue press releases or other similar public communications to
disclose the progress and results regarding such Product to the public in order
to satisfy its disclosure obligations under Applicable Law or to remain
consistent with its normal public disclosure practices (but for clarity, in
connection with the Oncology Collaboration, such disclosure would not involve
disclosing a Reserved Target or an Oncology Lead Candidate until such target had
become a Development Candidate) ; provided, that any proposed press release or
other similar public communication by such controlling Party disclosing
regulatory discussions, the efficacy or safety data or results related to the
Product or such controlling Party’s sales projections, (i) such controlling
Party will submit such proposed communication to the non-controlling Party for
review at least two Business Days in advance of such proposed public disclosure,
(ii) the non-controlling Party will have the right to review and recommend
changes to such communication, and (iii) the controlling Party will in good
faith consider any changes that are timely recommended by the non-controlling
Party. In addition, if at any time during such two Business Day review period,
the other Party informs such Party that its proposed public disclosure discloses
inventions made by either Party in the course of the research or development
under this Agreement that have not yet been protected through the filing of a
patent application, or the public disclosure could be expected to have a
material adverse effect on any Patent Rights or Know-How solely owned or
Controlled by such other Party, then such Party will either (x) delay such
proposed publication for a period of time reasonably necessary to permit the
timely preparation and first filing of patent application(s) on the information
involved, or (y) to the extent permitted by Applicable Law, remove the
identified information prior to disclosure. While the Parties acknowledge that
it may be

 

80

--------------------------------------------------------------------------------

 

interpreted that there is overlap between this Section 13.4.4 and
Section 13.4.5, for clarity, the Parties intend for this Section 13.4.4 to
address public disclosures that are not primarily of a scientific or scholarly
nature (which are meant to be disclosed in accordance with Section 13.4.5 below)
but rather this Section 13.4.4 is designed to address more urgent disclosures
required under Applicable Law or to provide investors with material information
regarding Products or this Agreement in a timely manner so that they may make
informed investment decisions in Isis’ or AstraZeneca’s stock.

 

13.4.5.           Scientific or Clinical Presentations. Regarding any proposed
scientific publications or public presentations related to summaries of results
from any Clinical Studies generated by Isis or AstraZeneca for a Product, the
Parties acknowledge that scientific lead time is a key element of the value of a
Product under this Agreement and further agree to use Commercially Reasonable
Efforts to control public scientific disclosures of the results of the research
or development activities under this Agreement to prevent any potential adverse
effect of any premature public disclosure of such results, for example, without
limitation, intellectual property protection, competitive intelligence,
prejudicing the optimal presentation at major meetings. For clarity, in
connection with the Oncology Collaboration, such disclosure would not involve
disclosing a Reserved Target or an Oncology Lead Candidate until such target had
become a Development Candidate unless agreed otherwise by the Parties. The
Parties will establish a procedure for publication review and each Party will
first submit to the other Party through the Joint Patent Committee an early
draft of all such publications or presentations, whether they are to be
presented orally or in written form, at least 30 days prior to submission for
publication including to facilitate the publication of any summaries of Clinical
Studies data and results as required on the clinical trial registry of each
respective Party. Each Party will review such proposed publication in order to
avoid the unauthorized disclosure of a Party’s Confidential Information and to
preserve the patentability of inventions arising from the Collaboration Plans.
If, during such 30 day period, the other Party informs such Party that its
proposed publication contains Confidential Information of the other Party, then
such Party will delete such Confidential Information from its proposed
publication. In addition, if at any time during such 30 day period, the other
Party informs such Party that its proposed publication discloses inventions made
by either Party in the course of the research or development under this
Agreement that have not yet been protected through the filing of a patent
application, or the public disclosure of such proposed publication could be
expected to have a material adverse effect on any Patent Rights or Know-How
solely owned or Controlled by such other Party, then such Party will either
(i) delay such proposed publication for up to 60 days from the date the other
Party informed such Party of its objection to the proposed publication, to
permit the timely preparation and first filing of patent application(s) on the
information involved or (ii) remove the identified disclosures prior to
publication.

 

81

--------------------------------------------------------------------------------

 

13.4.6.           SEC Filings. Each Party will give the other Party a reasonable
opportunity to review all material filings with the SEC describing the terms of
this Agreement prior to submission of such filings, and will give due
consideration to any reasonable comments by the non-filing Party relating to
such filing.

 

13.4.7.           Subsequent Disclosure. Notwithstanding the foregoing, to the
extent information regarding this Agreement or the Product has already been
publicly disclosed, either Party (or its Affiliates) may subsequently disclose
the same information to the public without the consent of the other Party.

 

13.4.8.           Acknowledgment. Each Party will acknowledge in any press
release, public presentation or publication regarding the collaboration or the
Product, the other Party’s role in discovering and developing the Product or
Discontinued Product, as applicable, that the Product is under license from Isis
and otherwise acknowledge the contributions from the other Party, and each
Party’s stock ticker symbol (e.g., Nasdaq: ISIS; NYE: AZN). Isis may include the
Product (and identify AstraZeneca as its partner for the Product) in Isis’ drug
pipeline.

 

ARTICLE 14.
MISCELLANEOUS

 

14.1.            Dispute Resolution.

 

14.1.1.           Resolution by Senior Representatives. The Parties will seek to
settle amicably any and all disputes, controversies or claims arising out of or
in connection with this Agreement. For clarity, any decision within the JSC’s
decision-making authority will be finally decided by the JSC. Any dispute
between the Parties which is outside the JSC’s decision-making authority will be
promptly presented to the Senior Vice President, Research of AstraZeneca and the
Chief Operating Officer of Isis (the “Senior Representatives”), or their
respective designees, for resolution. Such Senior Representatives, or their
respective designees, will meet in-person or by teleconference as soon as
reasonably possible thereafter, and use their good faith efforts to mutually
agree upon the resolution of the dispute, controversy or claim. Any dispute
within the JSC’s decision-making authority will not be subject to arbitration.

 

14.1.2.           Request for Arbitration. If after negotiating in good faith
pursuant to Section 14.1.1, the Parties fail after good faith discussions
undertaken within reasonable promptness, to reach an amicable agreement within
90 days, then either Party may upon written notice to the other submit to
binding arbitration pursuant to Section 14.1.3 below. No statements made by
either Party during such discussions will be used by the other Party or
admissible in arbitration or any other subsequent proceeding for resolving the
dispute.

 

82

--------------------------------------------------------------------------------

 

14.1.3.           Arbitration.

 

(a)                                 Subject to Section 14.2, any dispute, claim
or controversy arising from or related in any way to this Agreement or the
interpretation, application, breach, termination or validity thereof, including
any claim of inducement of this Agreement by fraud or otherwise, not resolved
under the provisions of Section 14.1.1 will be resolved by final and binding
arbitration conducted in accordance with the terms of this Section 14.1.3. The
arbitration will be held in New York, New York, USA according to Rules of
Arbitration of the International Chamber of Commerce (“ICC”). The arbitration
will be conducted by a panel of three arbitrators with significant experience in
the pharmaceutical industry, unless otherwise agreed by the Parties, appointed
in accordance with applicable ICC rules. Any arbitration herewith will be
conducted in the English language to the maximum extent possible. The
arbitrators will render a written decision no later than six months following
the selection of the arbitrators, including a basis for any damages awarded and
a statement of how the damages were calculated. Any award will be promptly paid
in U.S. dollars free of any tax, deduction or offset. Each Party agrees to abide
by the award rendered in any arbitration conducted pursuant to this
Section 14.1.3. With respect to money damages, nothing contained herein will be
construed to permit the arbitrator or any court or any other forum to award
punitive or exemplary damages, except in the case of breach of ARTICLE 13. By
entering into this agreement to arbitrate, the Parties expressly waive any claim
for punitive or exemplary damages, except in the case of breach of ARTICLE 13.
Each Party will pay its legal fees and costs related to the arbitration
(including witness and expert fees). Judgment on the award so rendered will be
final and may be entered in any court having jurisdiction thereof.

 

(b)                                 EACH PARTY HERETO WAIVES ITS RIGHT TO TRIAL
OF ANY ISSUE BY JURY. EACH PARTY HERETO WAIVES ANY CLAIM FOR ATTORNEYS’ FEES AND
COSTS AND PREJUDGMENT INTEREST FROM THE OTHER.

 

14.1.4.           Court Actions. Nothing contained in this Agreement will deny
either Party the right to seek injunctive or other equitable relief from a court
of competent jurisdiction in the context of a bona fide emergency or prospective
irreparable harm, and such an action may be filed and maintained notwithstanding
any ongoing dispute resolution discussions or arbitration proceeding. In
addition, either Party may bring an action in any court of competent
jurisdiction to resolve disputes pertaining to the validity, construction,
scope, enforceability, infringement or other violations of patents or other
proprietary or intellectual property rights, and no such claim will be subject
to arbitration pursuant to Section 14.1.3.

 

14.2.            Governing Law; Jurisdiction; Equitable Relief, Losses.

 

14.2.1.           This Agreement will be governed by and construed and enforced
in accordance with the laws of the State of New York, USA, without reference to
any rules of

 

83

--------------------------------------------------------------------------------

 

conflicts of laws. For clarification, any dispute relating to the scope,
validity, enforceability or infringement of any Patents will be governed by and
construed and enforced in accordance with the patent laws of the applicable
jurisdiction.

 

14.2.2.           Each Party acknowledges and agrees that the restrictions set
forth in Section 5.1 of this Agreement are reasonable and necessary to protect
the legitimate interests of the other Party and that the other Party would not
have entered into this Agreement in the absence of such restrictions, and that
any breach or threatened breach of any of these provisions will probably result
in irreparable injury to the other Party for which there will be no adequate
remedy at law. In the event of a breach or threatened breach of any such
provision, each Party will be authorized and entitled to obtain from any court
of competent jurisdiction equitable relief, whether preliminary or permanent,
specific performance and an equitable accounting of all earnings, profits and
other benefits arising from such breach, which rights will be cumulative and in
addition to any other rights or remedies to which such Party may be entitled in
law or equity. Each Party agrees to waive any requirement that the other Party
(a) post a bond or other security as a condition for obtaining any such relief,
and (b) show irreparable harm, balancing of harms, consideration of the public
interest or inadequacy of monetary damages as a remedy. Nothing in this
Section 14.2.2 is intended, or should be construed, to limit a Party’s rights to
equitable relief or any other remedy for a breach of any other provision of this
Agreement. Except for (i) the offsets and credits explicitly set forth in
Section 8.9.2(a), Section 8.9.4(b) and Section 8.11, (ii) any amount awarded to
be paid by one Party to the other by the panel of arbitrators in a final and
binding arbitration proceeding adjudicated under Section 14.1.3, and (iii) any
offset of undisputed but unpaid amounts under this Agreement, neither Party will
have the right to setoff any amount it is owed or believes it is owed against
payments due or payable to the other Party under this Agreement.

 

14.2.3.           Neither Party will be entitled to recover any Losses relating
to any matter arising under one provision of this Agreement to the extent that
such Party has already recovered Losses with respect to such matter pursuant to
other provisions of this Agreement (including recoveries under Section 11.1 or
Section 11.2, and the offsets under Section 8.9.4(b)).

 

14.3.            Assignment and Successors. Neither this Agreement nor any
obligation of a Party hereunder may be assigned by either Party without the
consent of the other, which will not be unreasonably withheld, delayed or
conditioned, except that each Party may assign this Agreement and the rights,
obligations and interests of such Party, in whole or in part, without the other
Party’s consent, to any of its Affiliates, to any purchaser of all or
substantially all of its assets to which this Agreement relates or to any
successor corporation resulting from any merger, consolidation, share exchange
or other similar transaction; provided, if a Party transfers or assigns this
Agreement to [***] described in this Agreement, then such transferring Party (or
such Affiliate) (“Transferring Party”),

 

84

--------------------------------------------------------------------------------

 

will [***] due that the Transferring Party is obligated to pay to the
non-transferring Party (“Non-Transferring Party”) under ARTICLE 8 for the [***]
such that the Non-Transferring Party receives [***]. In addition, Isis may
assign or transfer its rights to receive payments under this Agreement (but no
liabilities), without AstraZeneca’s consent, to an Affiliate or to a Third Party
in connection with a payment factoring transaction; provided, however, that Isis
will provide AstraZeneca advance notice of any such proposed payment factoring
transaction giving AstraZeneca a reasonable opportunity to provides comments
(which Isis will consider in good faith); [***]. Any purported assignment or
transfer made in contravention of this Section 14.3 will be null and void.

 

To the extent the Non-Transferring Party utilizes a [***] in any year, the
Non-Transferring Party will [***] the Transferring Party [***]. To assist the
Transferring Party in determining when a [***] pursuant to the foregoing
sentence, beginning with the first Annual tax return for the year in which the
Transferring Party [***] payment under this Section 14.3, and each year
thereafter (including, for clarity, all years in which the Non-Transferring
Party [***] or [***]), the Non-Transferring Party will provide the Transferring
Party with the Non-Transferring Party s’ Annual tax returns (federal and state)
and, in years in which the Non-Transferring Party utilizes the [***], supporting
documentation for such [***].

 

14.4.            Force Majeure. No Party will be held responsible to the other
Party nor be deemed to be in default under, or in breach of any provision of,
this Agreement for failure or delay in performing any obligation of this
Agreement when such failure or delay is due to force majeure, and without the
fault or negligence of the Party so failing or delaying. For purposes of this
Agreement, force majeure means a cause beyond the reasonable control of a Party,
which may include acts of God; acts, regulations, or laws of any government;
war; terrorism; civil commotion; fire, flood, earthquake, tornado, tsunami,
explosion or storm; pandemic; epidemic and failure of public utilities or common
carriers. In such event the Party so failing or delaying will immediately notify
the other Party of such inability and of the period for which such inability is
expected to continue. The Party giving such notice will be excused from such of
its obligations under this Agreement as it is thereby disabled from performing
for so long as it is so disabled for up to a maximum of 90 days, after which
time the Parties will negotiate in good faith any modifications of the terms of
this Agreement that may be necessary to arrive at an equitable solution, unless
the Party giving such notice has set out a reasonable timeframe and plan to
resolve the effects of such force majeure and executes such plan within such
timeframe.  To the extent possible, each Party will use reasonable efforts to
minimize the duration of any force majeure.

 

14.5.            Notices. Any notice or request required or permitted to be
given under or in connection with this Agreement will be deemed to have been
sufficiently given if in writing and personally delivered or sent by certified
mail (return receipt requested), facsimile transmission (receipt verified), or
overnight express courier service (signature required), prepaid, to the Party
for which such notice is intended, at the address set forth for such Party
below:

 

85

--------------------------------------------------------------------------------

 

If to Isis, addressed to:

Isis Pharmaceuticals, Inc.

 

2855 Gazelle Court

 

Carlsbad, CA 92010

 

Attention: Chief Operating Officer

 

Fax: 760-918-3592

 

 

with a copy to:

Isis Pharmaceuticals, Inc.

 

2855 Gazelle Court

 

Carlsbad, CA 92010

 

Attention: General Counsel

 

Fax: 760-268-4922

 

 

If to AstraZeneca, addressed to:

AstraZeneca AB

 

SE-431 83 Molndal

 

Sweden

 

Attention: Legal Department

 

Fax: +46 31 7763871

 

 

with a copy to:

AstraZeneca UK Limited

 

Strategic Planning and Business Development

 

Alderley House Alderley Park

 

Macclesfield

 

Chehsire

 

SK10 4TF

 

Fax: +44 1625 518805

 

or to such other address for such Party as it will have specified by like notice
to the other Party; provided that notices of a change of address will be
effective only upon receipt thereof.  If delivered personally or by facsimile
transmission, the date of delivery will be deemed to be the date on which such
notice or request was given.  If sent by overnight express courier service, the
date of delivery will be deemed to be the next Business Day after such notice or
request was deposited with such service.  If sent by certified mail, the date of
delivery will be deemed to be the third Business Day after such notice or
request was deposited with the U.S. Postal Service. It is understood and agreed
that this Section is not intended to govern the day to day business
communications necessary between the parties in performing their duties, in due
course, under the terms of this Agreement.

 

14.6.            Export Clause. Each Party acknowledges that the laws and
regulations of the United States restrict the export and re-export of
commodities and technical data of United States origin.  Each Party agrees that
it will not export or re-export restricted commodities or the technical data of
the other Party in any form without the appropriate United States and foreign
government licenses.

 

14.7.            Waiver. Neither Party may waive or release any of its rights or
interests in this Agreement except in writing.  The failure of either Party to
assert a right hereunder or to insist upon compliance with any term or condition
of this Agreement will not constitute a

 

86

--------------------------------------------------------------------------------

 

waiver of that right or excuse a similar subsequent failure to perform any such
term or condition.  No waiver by either Party of any condition or term in any
one or more instances will be construed as a continuing waiver or subsequent
waiver of such condition or term or of another condition or term.

 

14.8.            Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable by a court of competent jurisdiction, such
adjudication will not affect or impair, in whole or in part, the validity,
enforceability, or legality of any remaining portions of this Agreement. All
remaining portions will remain in full force and effect as if the original
Agreement had been executed without the invalidated, unenforceable or illegal
part.

 

14.9.           Entire Agreement; Modifications. This Agreement (including the
attached Appendices and Schedules) sets forth and constitutes the entire
agreement and understanding between the Parties with respect to the subject
matter hereof, and all prior agreements, understanding, promises and
representations, whether written or oral, with respect thereto are superseded
hereby. Each Party confirms that it is not relying on any representations or
warranties of the other Party except as specifically set forth herein. No
amendment, modification, release or discharge will be binding upon the Parties
unless in writing and duly executed by authorized representatives of both
Parties.

 

14.10.    Relationship of the Parties. It is expressly agreed that the Parties
will be independent contractors of one another and that the relationship between
the Parties will not constitute a partnership, joint venture or agency.

 

14.11.    Interpretation. Except as otherwise explicitly specified to the
contrary, (a) references to a section, exhibit or schedule means a section of,
or schedule or exhibit to this Agreement, unless another agreement is specified,
(b) the word “including” (in its various forms) means “including without
limitation,” (c) the words “will” and “shall” have the same meaning,
(d) references to a particular statute or regulation include all rules and
regulations thereunder and any predecessor or successor statute, rules or
regulation, in each case as amended or otherwise modified from time to time,
(e) references to a particular Person include such Person’s successors and
assigns to the extent not prohibited by this Agreement, (f) unless otherwise
specified, “$” is in reference to United States dollars, and (g) the headings
contained in this Agreement, in any exhibit or schedule to this Agreement and in
the table of contents to this Agreement are for convenience only and will not in
any way affect the construction of or be taken into consideration in
interpreting this Agreement.

 

14.12.    Books and Records. Any books and records to be maintained under this
Agreement by a Party or its Affiliates or Sublicensees will be maintained in
accordance with generally accepted accounting principles, or in the case of
non-United States sales, other applicable accounting standards, consistently
applied.

 

14.13.    Further Actions. Each Party will execute, acknowledge and deliver such
further instruments, and do all such other acts, as may be necessary or
appropriate in order to carry out the expressly stated purposes and the clear
intent of this Agreement.

 

87

--------------------------------------------------------------------------------

 

14.14.    Construction of Agreement. The terms and provisions of this Agreement
represent the results of negotiations between the Parties and their
representatives, each of which has been represented by counsel of its own
choosing, and neither of which has acted under duress or compulsion, whether
legal, economic or otherwise. Accordingly, the terms and provisions of this
Agreement will be interpreted and construed in accordance with their usual and
customary meanings, and each of the Parties hereto hereby waives the application
in connection with the interpretation and construction of this Agreement of any
rule of law to the effect that ambiguous or conflicting terms or provisions
contained in this Agreement will be interpreted or construed against the Party
whose attorney prepared the executed draft or any earlier draft of this
Agreement.

 

14.15.    Supremacy. In the event of any express conflict or inconsistency
between this Agreement and any Schedule or Appendix hereto, the terms of this
Agreement will apply. The Parties understand and agree that the Schedules and
Appendices hereto are not intended to be the final and complete embodiment of
any terms or provisions of this Agreement, and are to be updated from time to
time during the Agreement Term, as appropriate and in accordance with the
provisions of this Agreement.

 

14.16.    Counterparts. This Agreement may be signed in counterparts, each of
which will be deemed an original, notwithstanding variations in format or file
designation which may result from the electronic transmission, storage and
printing of copies of this Agreement from separate computers or printers.
Facsimile signatures and signatures transmitted via electronic mail in PDF
format will be treated as original signatures.

 

14.17.    Compliance with Laws. Each Party will, and will ensure that its
Affiliates and Sublicensees will, comply with all relevant laws and regulations
in exercising its rights and fulfilling its obligations under this Agreement.

 

[SIGNATURE PAGE FOLLOWS]

 

* - * - * - *

 

88

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their representatives thereunto duly authorized as of the Effective Date.

 

 

ASTRAZENECA AB

 

 

 

 

 

 

By:

/s/ Jan-Olof Jacke

 

Name:

Jan-Olof Jacke

 

Title:

CFO AstraZeneca AB

 

 

SIGNATURE PAGE TO COLLABORATION, LICENSE AND DEVELOPMENT AGREEMENT

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their representatives thereunto duly authorized as of the Effective Date.

 

 

ISIS PHARMACEUTICALS, INC.

 

 

 

 

 

 

By:

/s/ B. Lynne Parshall

 

Name:

B. Lynne Parshall

 

Title:

Chief Operating Officer

 

 

SIGNATURE PAGE TO COLLABORATION, LICENSE AND DEVELOPMENT AGREEMENT

 

--------------------------------------------------------------------------------

 

 

List of Appendices and Schedules

 

APPENDIX 1 — Definitions

 

APPENDIX 2 —STAT3 Research and Development Plan and [***] Research and
Development Plan

 

APPENDIX 3 — Oncology Research and Development Plans

 

APPENDIX 4 — Isis’ Lead Candidate Checklist

 

APPENDIX 5 — Examples Illustrating Separate Indications

 

APPENDIX 6 — Isis In-License Agreements

 

APPENDIX 7 — Isis Core Technology Patents

 

APPENDIX 8 — Isis Manufacturing and Analytical Patents

 

APPENDIX 9 — Isis Product-Specific Patents

 

APPENDIX 10 — Prior Agreements

 

APPENDIX 11 — IND Support Package

 

SCHEDULE 3.3.6  — Flow chart of Reserved Target and Oncology Target selection

 

SCHEDULE 4.1.1 — JSC Governance

 

SCHEDULE 4.1.3(C) — AstraZeneca’s Performance Metrics

 

SCHEDULE 4.2 — Alliance Management Activities

 

SCHEDULE 4.6.1 — Isis’ Fully Absorbed Cost of Goods Methodology

 

SCHEDULE 4.6.1(D) — Manufacturing Services Agreement Principles

 

SCHEDULE 4.7 — Bioethics Policy

 

91

--------------------------------------------------------------------------------

 

APPENDIX 1

 

DEFINITIONS

 

For purposes of this Agreement, the following capitalized terms will have the
following meanings:

 

“$” means the lawful currency of the United States.

 

“Acceptance of Filing” means, with respect to an NDA, MAA or JNDA filed for a
Product, (a) in the United States, the receipt of written notice from the FDA in
accordance with 21 C.F.R. §314.101(a)(2) that such NDA is officially “filed,”
(b) in the European Union, receipt by AstraZeneca, its Affiliate or Sublicensee
of written notice of acceptance by the EMA of such MAA for filing under the
centralized European procedure in accordance with any feedback received from
European Regulatory Authorities; provided that if the centralized filing
procedure is not used, then Acceptance of Filing will be determined upon the
acceptance of such MAA by the applicable Regulatory Authority in a Major Country
in the EU, and (c) in Japan, receipt by AstraZeneca, its Affiliate or
Sublicensee of written notice of acceptance of filing of such JNDA from the
Koseisho (i.e., the Japanese Ministry of Health and Welfare, or any successor
agency thereto).

 

“Additional Core IP” has the meaning set forth in Section 8.9.3.

 

“Additional Plan Costs” means [***].

 

“Affiliate” of an entity means any corporation, firm, partnership or other
entity which directly or indirectly through one or more intermediaries controls,
is controlled by or is under common control with a Party to this Agreement. An
entity will be deemed to control another entity if it (i) owns, directly or
indirectly, at least 50% of the outstanding voting securities or capital stock
(or such lesser percentage which is the maximum allowed to be owned by a foreign
corporation in a particular jurisdiction) of such other entity, or has other
comparable ownership interest with respect to any entity other than a
corporation; or (ii) has the power, whether pursuant to contract, ownership of
securities or otherwise, to direct the management and policies of the entity.

 

“Agreement” has the meaning set forth in the Preamble of this Agreement.

 

“Agreement Term” has the meaning set forth in Section 12.1.

 

“Alliance Manager” has the meaning set forth in Section 4.2.

 

“Annual” or “Annually” means the period covering a Calendar Year or occurring
once per Calendar Year, as the context requires.

 

“Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act, as amended,
the UK Bribery Act 2010, as amended, and any other applicable anti-corruption
laws and laws for the prevention of fraud, racketeering, money laundering or
terrorism.

 

“API” means the bulk active pharmaceutical ingredient manufactured in accordance
with cGMP for a Product.

 

“Applicable Law” or “Law” means all applicable laws, statutes, rules,
regulations and other pronouncements having the effect of law of any federal,
national, multinational, state, provincial, county, city or other political
subdivision, agency or other body, domestic or foreign, including

 

92

--------------------------------------------------------------------------------

 

any applicable rules, regulations, guidelines, or other requirements of the
Regulatory Authorities that may be in effect from time to time.

 

“Approval” means (i) with respect to a Product in the EU, the earlier to occur
of (A) approval from the applicable Regulatory Authority in at least one member
state in the EU sufficient for the manufacture, distribution, use, marketing and
sale of such Product, including pricing approval, in such jurisdiction in
accordance with Applicable Laws, or (B) the first commercial sale of a Product
in the EU; and (ii) with respect to a Product in any regulatory jurisdiction
other than the EU, approval sufficient for the manufacture, distribution, use,
marketing and sale of such Product in such jurisdiction in accordance with
Applicable Laws.

 

“[***]” means [***].

 

“[***] Research and Development Plan” means the research and development plan
for the [***] Program (initially as attached hereto as Appendix 2) as amended
from time to time in accordance with this Agreement.

 

“[***] Compound” means any ASO that is designed to bind to the RNA that encodes
[***], where such ASO is (i) discovered or Controlled by Isis prior to the
Effective Date, or (ii) discovered by Isis in the performance of the [***]
Research and Development Plan.

 

“[***] Development Candidate” means the [***] Compound selected by AstraZeneca
as a Development Candidate.

 

“[***] Development Candidate Decision Deadline” has the meaning set forth in
Section 2.2.3.

 

“[***] Lead Candidate” means the Lead Candidate designated by Isis as a
potential [***] Development Candidate.

 

“[***] Lead Compound” has the meaning set forth in Section 5.1.3. The [***] Lead
Compound sequences will be set forth in the minutes of the JSC.

 

“[***] Product” means a finished product containing an [***] Compound as an
active pharmaceutical ingredient (including any salt, hydrate, solvate, or
prodrug thereof).

 

“[***] Program” means the research and development program for [***] Products
under this Agreement.

 

“ASO” means a single-stranded oligonucleotide compound, or analog, variant,
mimic, or mimetic thereof, having a sequence that is at least six bases long and
that modulates expression or splicing of a gene target via the binding,
partially or wholly, of such compound to the RNA of such gene target.

 

“Assignable [***] Product-Specific Patents” means Patent Rights Controlled by
Isis or any of its Affiliates on or after the Effective Date claiming: (i) the
specific composition of matter (the exact sequence and chemistry) of the [***]
Development Candidate and the other [***] Lead Compounds (or any [***] Product
incorporating such [***] Development Candidate or other [***] Lead Compounds),
and/or (ii) methods of using such [***] Development Candidate and such other
[***] Lead Compounds (or any [***] Product incorporating such [***] Development
Candidate or other [***] Lead Compounds) as a prophylactic, therapeutic or
diagnostic.

 

“AstraZeneca” has the meaning set forth in the Preamble of this Agreement.

 

“AstraZeneca [***]-Field” has the meaning set forth in Section 5.1.3(a)(i).

 

93

--------------------------------------------------------------------------------

 

“AstraZeneca Background Intellectual Property” means any Know-How and Patent
Rights that: (i) were Controlled by AstraZeneca prior to the Effective Date;
and/or (ii) are Controlled by AstraZeneca on or after the Effective Date that
were not created or acquired in connection with performance of any Collaboration
Plan and/or in connection with the exploitation of a Compound or Product, which
Patents and Know-How is necessary to Develop, register, Manufacture or
Commercialize a Product in the Field.

 

“AstraZeneca Conducted Activities” means, under a Collaboration Plan, any and
all research, pre-clinical and/or clinical activities that are not Isis
Conducted Activities.

 

“AstraZeneca Full Royalty” has the meaning set forth in Section 8.8.1.

 

“AstraZeneca Indemnitees” has the meaning set forth in Section 11.2.

 

“AstraZeneca-Initiated Changes” means any changes (including number of subjects,
duration of dosing, additional studies, additional endpoints, additional
analysis, etc.) to a Collaboration Plan that are requested by AstraZeneca
(including any changes requested or required by a Regulatory Authority).

 

“AstraZeneca Know-How” means any Know-How owned, used, developed by, or licensed
to AstraZeneca or its Affiliates, in connection with AstraZeneca’s performance
of its obligations under this Agreement, in each case to the extent Controlled
by AstraZeneca or its Affiliates at any time during the Agreement Term that is
necessary to Develop, register, Manufacture or Commercialize a Product in the
Field and such Know-How does not constitute AstraZeneca Background IP.

 

“AstraZeneca Patents” means any Patent Rights owned, used, developed by, or
licensed to AstraZeneca or its Affiliates that are invented by AstraZeneca or
its Affiliates or licensors in connection with AstraZeneca’s performance of its
obligations under this Agreement, in each case to the extent Controlled by
AstraZeneca or its Affiliates at any time during the Agreement Term that is
necessary or useful to Develop, register, Manufacture or Commercialize a Product
in the Field and such patents do not constitute AstraZeneca Background IP.

 

“AstraZeneca Product-Specific Patents” means all Product-Specific Patents owned,
used, created, developed by, or licensed to AstraZeneca or its Affiliates (i) as
of the Effective Date, or (ii) arising at any time during the Agreement Term, in
each case to the extent (x) Controlled by AstraZeneca or its Affiliates in
connection with performance of obligations under this Agreement, and (y) such
Product-Specific Patents do not constitute AstraZeneca Background IP.

 

“AstraZeneca-Prosecuted Patents” has the meaning set forth in Section 9.2.5(b).

 

“AstraZeneca Supported Pass-Through Costs” means [***].

 

“AstraZeneca Technology” means AstraZeneca’s interest in Jointly-Owned
Collaboration Technology, AstraZeneca Product-Specific Patents, AstraZeneca
Know-How, AstraZeneca Patents, including AstraZeneca Background Intellectual
Property, and any trademarks described in Section 6.1.8, owned, used, developed
by, or licensed to AstraZeneca or its Affiliates that are necessary or useful to
Develop, register, Manufacture or Commercialize a Product.

 

“Audit” has the meaning set forth in Section 11.7.6.

 

“Audit Report” has the meaning set forth in Section 8.11.

 

94

--------------------------------------------------------------------------------

 

“Bankruptcy Code” has the meaning set forth in Section 12.2.5(b).

 

“BMT Patient” has the meaning set forth in Section 1.2.3(b).

 

“Breaching Party” means the Party that is believed by the Non-Breaching Party to
be in material breach of this Agreement.

 

“Business Day” means any day other than a Saturday or Sunday on which banking
institutions in New York, US and London, England are open for business.

 

“Calendar Quarter” means a period of three consecutive calendar months ending on
the last day of March, June, September, or December, respectively, and will also
include the period beginning on the Effective Date and ending on the last day of
the Calendar Quarter in which the Effective Date falls.

 

“Calendar Year” means a year beginning on January 1 (or, with respect to 2012,
the Effective Date) and ending on December 31.

 

“CDA” has the meaning set forth in Section 13.2.

 

“cGMP” means current Good Manufacturing Practices as specified in the United
States Code of Federal Regulations, ICH Guideline Q7A, or equivalent laws,
rules, or regulations of an applicable Regulatory Authority at the time of
manufacture.

 

“Change of Control Event” means any (a) direct or indirect acquisition of all or
substantially all of the assets of Isis, (b) direct or indirect acquisition by a
Person, or group of Persons acting in concert, of [***]% or more of the voting
equity interests of Isis, (c) tender offer or exchange offer that results in any
Person, or group of Persons acting in concert, beneficially owning [***]% or
more of the voting equity interests of Isis, or (d) merger, consolidation, other
business combination or similar transaction involving Isis, pursuant to which
any Person owns all or substantially all of the consolidated assets, net
revenues or net income of Isis, taken as a whole, or which results in the
holders of the voting equity interests of Isis immediately prior to such merger,
consolidation, business combination or similar transaction ceasing to hold
[***]% or more of the combined voting power of the surviving, purchasing or
continuing entity immediately after such merger, consolidation, other business
combination or similar transaction, in all cases where such transaction is to be
entered into with any Person other than AstraZeneca or its Affiliates.

 

“CMO” means a Third Party primarily engaged in providing contract manufacturing
or services and is not engaged in drug discovery, development or
commercialization of pharmaceutical products.

 

“Claims” has the meaning set forth in Section 11.1.

 

“Clinical Study” or “Clinical Studies” means a Phase 1 Trial, Phase 2 Trial, a
Registration-Directed Trial, or such other study in humans that is conducted in
accordance with good clinical practices and is designed to generate data in
support or maintenance of an NDA, MAA, JNDA or other similar marketing
application.

 

“Collaboration Plan” means (i) the STAT3 Research and Development Plan, (ii) the
[***] Research and Development Plan, or (iii) any Oncology Research and
Development Plan.

 

95

--------------------------------------------------------------------------------

 

“Commercialize,” “Commercialization” or “Commercializing” means any and all
activities directed to marketing, promoting, detailing, distributing, importing,
having imported, exporting, having exported, selling or offering to sell a
Product following receipt of Approval for the Product in the applicable country,
including conducting pre-and post-Approval activities, including studies
reasonably required to increase the market potential of the Product and studies
to provide improved formulation and Product delivery, and launching and
promoting the Product in each country.

 

“Commercializing Party” means (a) AstraZeneca, with respect to a Product that is
being Developed and Commercialized by or on behalf of AstraZeneca, its
Affiliates or Sublicensees hereunder, and (b) Isis, with respect to a
Discontinued Product that is being Developed and Commercialized by or on behalf
of Isis, its Affiliates or Sublicensees hereunder.

 

”Commercially Reasonable Efforts” means that level of efforts and resources, at
the relevant point in time, commonly used in the pharmaceutical industry for a
product of similar commercial potential at a similar stage in its lifecycle,
taking into consideration relative safety and efficacy, product profile, the
competitiveness of the marketplace, market potential, the relative profitability
of the product (including pricing and reimbursement status) and other relevant
factors, including technical, legal, scientific and/or medical factors. Without
limiting any of the foregoing, (A) Commercially Reasonable Efforts as it applies
to AstraZeneca’s Development or Commercialization of a Product hereunder
includes the use of Commercially Reasonable Efforts to perform the
(i) AstraZeneca Conducted Activities under each Collaboration Plan in accordance
with the timelines set forth therein, and (ii) activities set forth in each
Integrated Product Plan; and (B) Commercially Reasonable Efforts as it applies
to Isis’ Development of a Product hereunder includes use of Commercially
Reasonable Efforts to perform the Isis Conducted Activities under each
Collaboration Plan in accordance with the timelines set forth therein.

 

“Competitive Infringement” has the meaning set forth in Section 9.5.1.

 

“Completion of the IND-Enabling Toxicology Studies” means [***].

 

“Compound” means (i) an [***] Compound, (ii) a STAT3 Compound, or (iii) an
Oncology Compound.

 

“Confidential Information” means any confidential or proprietary information or
materials, patentable or otherwise, in any form (written, oral, photographic,
electronic, magnetic, or otherwise) which is disclosed by the Disclosing Party
or otherwise received or accessed by the Receiving Party in the course of
performing its obligations or exercising its rights under this Agreement,
including trade secrets, Know-How, inventions or discoveries, proprietary
information, formulae, processes, techniques and information relating to the
past, present and future marketing, financial, and research and development
activities of any product or potential product or useful technology of the
Disclosing Party or its Affiliates and the pricing thereof. “Confidential
Information” does not include information that:

 

(a)                                was in the lawful knowledge and possession of
the Receiving Party or its Affiliates prior to the time it was disclosed to, or
learned by, the Receiving Party or its Affiliates, or was otherwise developed
independently by the Receiving Party or its Affiliates, as evidenced by

 

96

--------------------------------------------------------------------------------

 

written records kept in the ordinary course of business, or other documentary
proof of actual use by the Receiving Party or its Affiliates;

 

(a)                                 was generally available to the public or
otherwise part of the public domain at the time of its disclosure to the
Receiving Party or its Affiliates;

 

(b)                                 became generally available to the public or
otherwise part of the public domain after its disclosure and other than through
any act or omission of the Receiving Party or its Affiliates in breach of this
Agreement; or

 

(c)                                  was disclosed to the Receiving Party or its
Affiliates, other than under an obligation of confidentiality, by a Third Party
who had no obligation to the Disclosing Party or its Affiliates not to disclose
such information to others.

 

“Control” or “Controlled” means possession of the ability to grant a license or
sublicense hereunder without violating the terms of any agreement with any Third
Party; provided, however, that if a Party has a right to grant a license or
sublicense, with respect to an item of intellectual property to the other Party
only upon payment of compensation (including milestones or royalties) to a Third
Party (“Third Party Compensation”) (other than Isis Supported Pass-Through Costs
in the case of Isis, and other than AstraZeneca Supported Pass-Through Costs in
the case of AstraZeneca), then the first Party will be deemed to have “Control”
of the relevant item of intellectual property only if the other Party agrees to
bear the cost of such Third Party Compensation. Notwithstanding anything to the
contrary under this Agreement, with respect to any Third Party that becomes an
Affiliate of a Party after the Effective Date (including a Third Party
acquirer), no intellectual property of such Third Party will be included in the
licenses granted hereunder by virtue of such Third Party becoming an Affiliate
of such Party.

 

“Cover,” “Covered” or “Covering” means, with respect to a patent, that, but for
rights granted to a Person under such patent, the act of making, using or
selling by such Person would infringe a Valid Claim included in such patent, or
in the case of a patent that is a patent application, would infringe a Valid
Claim in such patent application if it were to issue as a patent.

 

“CREATE Act” means the Cooperative Research and Technology Enhancement Act of
2004, 35 U.S.C. § 103(c)(2)-(c)(3).

 

“CSID Criteria” means the candidate selection identification criteria used by
AstraZeneca to seek internal approval to advance a Development Candidate.

 

“Develop,” “Developing” or “Development” means with respect to a Product, any
and all discovery, characterization, or preclinical (including IND-Enabling
Toxicology Studies), clinical, or regulatory activity with respect to the
Product to seek Approval (including the submission of all necessary filings with
applicable Regulatory Authorities to support such preclinical and clinical
activities and Approval), including human clinical trials conducted after
Approval of a Product to seek Approval for additional indications for such
Product.

 

“Development Candidate” means, in the case of the [***] Program or an Oncology
Collaboration Program, a Compound that AstraZeneca has determined meets
AstraZeneca’s CSID Criteria and which it selects as ready to start IND-Enabling
Toxicology Studies as provided herein.

 

97

--------------------------------------------------------------------------------

 

“Disclosing Party” has the meaning set forth in Section 13.1.

 

“Discontinued Product” means a Product that is the subject of a termination
under this Agreement.

 

“Discontinued Target” has the meaning set forth in Section 3.3.7(a).

 

[***]

 

“DLBCL Patient” means a patient that has diffuse large B-cell lymphoma.

 

“Draft Report” means a report containing the pharmacology, toxicology, and
pharmacokinetic data generated from an IND-Enabling Toxicology Study.

 

“Drug Safety Information Agreement” means an agreement between the Parties which
outlines the requirements and responsibilities for drug safety reporting and
monitoring for ISIS-STAT3Rx, as described in Section 7.3.1.

 

“Durable Response” has the meaning set forth in Section 1.2.3(b).

 

“Effective Date” has the meaning set forth in the Preamble of this Agreement.

 

“EMA” means the European Medicines Agency and any successor entity thereto.

 

“European Union” or “EU” means each and every country or territory that is
officially part of the European Union from time to time.

 

“FDA” means the United States Food and Drug Administration and any successor
entity thereto.

 

“Field” means (i) with respect to the practice of the Isis Core Technology
Patents and the Isis Manufacturing and Analytical Patents, (A) the prophylactic
or therapeutic use or form of administration in humans or animals of a STAT3
Product or Oncology Product for any indication, and (B) the prophylactic or
therapeutic use or form of administration in humans or animals of an [***]
Product in the AstraZeneca [***]-Field, and (ii) with respect to the practice of
the Isis Product-Specific Patents, (Y) the prophylactic, therapeutic or
diagnostic use or form of administration in humans or animals of a STAT3 Product
or Oncology Product for any indication, and (Z) the prophylactic, therapeutic or
diagnostic use or form of administration in humans or animals of an [***]
Product in the AstraZeneca [***]-Field.

 

“First Commercial Sale” means the first sale of a Product by AstraZeneca, its
Affiliate or its Sublicensee to a Third Party in a particular country after
Approval of such Product has been obtained in such country.

 

“FTE” means the efforts of one or more employees of Isis equivalent to the
efforts of one full-time Isis employee for one year, or in the case of less than
a full-time dedicated person, a full-time equivalent person-year based upon a
total of one thousand seven hundred and ten (1710) hours per year of work on the
development program.

 

“FTE Rate” means [***].

 

“Fully Absorbed Cost of Goods” means the costs incurred by Isis as determined
using the methodology set forth in SCHEDULE 4.6.1 fairly applied and as employed
on a consistent basis throughout Isis’ operations.

 

“Gene Target” means (i) a Licensed Target, or (ii) an Oncology Target. The term
“Gene Targets” means collectively Licensed Targets and Oncology Targets.

 

98

--------------------------------------------------------------------------------

 

“Government Official” means any Person employed by or acting on behalf of a
government, government-controlled entity or public international organization;
any political party, party official or candidate; any Person who holds or
performs the duties of an appointment, office or position created by custom or
convention; and any Person who hold himself out to be the authorized
intermediary of any of the foregoing.

 

“[***]” means a patient enrolled in a Clinical Study of ISIS-STAT3Rx that [***].

 

“[***]” means a Clinical Study in [***].

 

“High Response Outcome” has the meaning set forth in Section 1.2.3(a).

 

“ICC” has the meaning set forth in Section 14.1.3(a).

 

“IND” means an Investigational New Drug Application (as defined in the Food,
Drug and Cosmetic Act, as amended) filed with the FDA or its foreign
counterparts.

 

“IND-Enabling Toxicology Studies” means the pharmacokinetic and toxicology
studies required to meet the requirements for filing an IND, including API
manufacturing to support such activities.

 

“IND Support Package” means the package of written materials that will support
AstraZeneca’s IND filings, which package will include Draft Reports generated
from the studies listed on APPENDIX 11.

 

“Indemnified Party” has the meaning set forth in Section 11.3.

 

“Indemnification Claim Notice” has the meaning set forth in Section 11.3.

 

“Indication” means [***].

 

”Indirect Taxes” means value added taxes, sales taxes, consumption taxes and
other similar taxes required by law to be disclosed on the invoice.

 

“Initial Supply” has the meaning set forth in Section 4.6.1(b).

 

“Initiation” or “Initiate” means, with respect to any Clinical Study, dosing of
the first human subject in such Clinical Study.

 

“Integrated Development Plan” or “IDP” has the meaning set forth in
Section 7.1.1.

 

“Isis” has the meaning set forth in the Preamble of this Agreement.

 

“Isis [***]-Field” has the meaning set forth in Section 5.1.3(a)(ii).

 

“Isis [***]-Field ASO” has the meaning set forth in Section 5.1.3(a)(ii).

 

“Isis [***]-Field ASO Licensee” has the meaning set forth in Section 9.2.4(a).

 

“Isis Conducted Activities” means the research, pre-clinical and/or clinical
activities for which Isis is designated as responsible under any Collaboration
Plan.

 

“Isis Core Technology Patents” means all Patent Rights owned, used, developed
by, or licensed to Isis or its Affiliates, in each case to the extent Controlled
by Isis or its Affiliates on the Effective Date or at any time during the
Agreement Term, claiming subject matter generally applicable to ASOs, other than
Isis Product-Specific Patents or Isis Manufacturing and

 

99

--------------------------------------------------------------------------------

 

Analytical Patents. A list of Isis Core Technology Patents as of the Effective
Date is set forth on APPENDIX 7 attached hereto.

 

“Isis In-License Agreements” has the meaning set forth in Section 8.9.1(a).

 

“Isis Indemnitees” has the meaning set forth in Section 11.1.

 

“Isis Internal ASO Safety Database” has the meaning set forth in Section 7.2.

 

“Isis Know-How” means any Know-How, including Isis’ interest in any
Jointly-Owned Collaboration Know-How, owned, used, developed by, or licensed to
Isis or its Affiliates, in each case to the extent Controlled by Isis or its
Affiliates on the Effective Date or at any time during the Agreement Term that
is necessary or useful to Develop, register, Manufacture or Commercialize a
Product in the Field. Isis Know-How does not include the Isis Manufacturing and
Analytical Know-How.

 

“Isis Manufacturing and Analytical Know-How” means Know-How, including Isis’
interest in any Jointly-Owned Collaboration Know-How, that relates to the
synthesis or analysis of a Product regardless of sequence or chemical
modification, owned, used, developed by, or licensed to Isis or its Affiliates,
in each case to the extent Controlled by Isis or its Affiliates on the Effective
Date or at any time during the Agreement Term. Isis Manufacturing and Analytical
Know-How does not include the Isis Know-How.

 

“Isis Manufacturing and Analytical Patents” means Patent Rights, including Isis’
interest in any Jointly-Owned Collaboration Patents, that claim methods and
materials used in the synthesis or analysis of a Product regardless of sequence
or chemical modification, owned, used, developed by, or licensed to Isis or its
Affiliates, in each case to the extent Controlled by Isis or its Affiliates on
the Effective Date or at any time during the Agreement Term. A list of Isis
Manufacturing and Analytical Patents as of the Effective Date is set forth on
APPENDIX 8 attached hereto. Isis Manufacturing and Analytical Patents do not
include the Isis Product-Specific Patents or the Isis Core Technology Patents.

 

“Isis Owned Patents” has the meaning set forth in Section 10.2.2.

 

“Isis Product-Specific Patents” means all Product-Specific Patents, in each case
to the extent Controlled by Isis or its Affiliates on the Effective Date or at
any time during the Agreement Term. A list of Isis Product-Specific Patents as
of the Effective Date is set forth on APPENDIX 9 attached hereto.

 

“Isis Supported Pass-Through Costs” means [***].

 

“Japan NDA” or “JNDA” means the Japanese equivalent of an NDA filed with the
Koseisho (i.e., the Japanese Ministry of Health and Welfare, or any successor
agency thereto).

 

“Joint Patent Committee” or “JPC” has the meaning set forth in Section 9.1.3(a).

 

“Jointly-Owned Collaboration Know-How” means Know-How discovered, developed,
invented or created jointly in the performance of a Collaboration Plan by or on
behalf of both Parties or their respective Affiliates or Third Parties acting on
their behalf that is necessary or useful to Develop, register, Manufacture or
Commercialize a Product in the Field.

 

“Jointly-Owned Collaboration Patents” means any Patent Rights that claim or
cover Jointly-Owned Collaboration Know-How.

 

100

--------------------------------------------------------------------------------

 

“Jointly-Owned Collaboration Technology” means Jointly-Owned Collaboration
Know-How and Jointly-Owned Collaboration Patents.

 

[***]

 

“Know-How” means inventions, technical information, know-how and materials,
including technology, data, compositions, formulas, biological materials,
assays, reagents, constructs, compounds, discoveries, procedures, processes,
practices, protocols, methods, techniques, results of experimentation or
testing, knowledge, trade secrets, skill and experience, in each case whether or
not patentable or copyrightable.

 

“Knowledge” means a Party’s and its Affiliates’ good faith, actual understanding
of the facts and information as of the Effective Date; provided that, with
respect to information regarding the status of Patent Rights or other
intellectual property rights, “Knowledge” means such Party’s or its Affiliate’s
good faith, actual understanding of the facts and information as of the
Effective Date after performing a diligent investigation with respect to such
facts and information as is customary in the conduct of its business with
respect to such Patent Rights or other intellectual property rights (and not,
for clarity, a diligent investigation solely in connection with this Agreement).

 

“Lead Candidate” means, in the case of the [***] Program or an Oncology
Collaboration Program, a Compound that is reasonably determined by Isis’ RMC in
accordance with Isis’ standard procedures for designating development candidates
as ready to start IND-Enabling Toxicology Studies. The checklist Isis uses as of
the Effective Date when reviewing potential development candidates for approval
is attached hereto as APPENDIX 4.

 

“Lead Candidate Data Package” means, with respect to a Lead Candidate, the data
package Isis presented to its Research Management Committee to approve a
Compound as the Lead Candidate; provided such package contains the same level of
detail as the data packages Isis currently presents to its Research Management
Committee to approve Isis’ own internal development candidates and is consistent
with relevant Collaboration Plan agreed by the JSC for the [***] or the Oncology
Target, as applicable.

 

“Licensable [***] Product-Specific Patents” means Patent Rights Controlled by
Isis or any of its Affiliates on or after the Effective Date claiming both:

 

(i)                                    a sequence-based composition of matter
that generically encompasses the [***] Development Candidate or an [***] Lead
Compound (or any [***] Product incorporating such [***] Development Candidate or
any [***] Lead Compounds), or methods of using the [***] Development Candidate
or an [***] Lead Compound (or any [***] Product incorporating such [***]
Development Candidate or any [***] Lead Compounds), as a prophylactic,
therapeutic or diagnostic but, in each case, does not claim the specific [***]
Development Candidate or an [***] Lead Compound (or any [***] Product
incorporating such [***] Development Candidate or any [***] Lead Compounds) (the
exact sequence and chemistry); and

 

(ii)                                an Isis [***]-Field ASO, or method for [***]
of Isis [***] Field ASOs for the treatment of a [***] disease.

 

101

--------------------------------------------------------------------------------

 

“Licensed CMO” has the meaning set forth in Section 6.1.4(a)(ii).

 

“Licensed Know-How” means Isis Manufacturing and Analytical Know-How, and Isis
Know-How. For clarity, Licensed Know-How does not include any Know-How covering
formulation technology or delivery devices.

 

“Licensed Patents” means the Isis Product-Specific Patents, Isis Core Technology
Patents, Isis Manufacturing and Analytical Patents and Isis’ interest in
Jointly-Owned Collaboration Patents. For clarity, Licensed Patents do not
include any Patent Rights claiming formulation technology or delivery devices
unless such Patent Rights are included in the Jointly-Owned Collaboration
Patents.

 

“Licensed Target” means (i) STAT3, or (ii) [***]. The term “Licensed Targets”
means collectively STAT3 and [***].

 

“Licensed Technology” means any and all Licensed Patents, Licensed Know-How, and
any trademarks described in Section 6.1.8, to the extent necessary or useful to
Develop, register, Manufacture or Commercialize a Product in the Field.

 

“Losses” has the meaning set forth in Section 11.1.

 

“Low Response Outcome” has the meaning set forth in Section 1.2.3(b).

 

“MAA” means a marketing authorization application filed with the EMA after
completion of Clinical Studies to obtain Approval for a Product under the
centralized European filing procedure or, if the centralized EMA filing
procedure is not used, filed using the applicable procedures in any European
Union country.

 

“MAA Approval” means the Approval of an MAA by the EMA for a Product in any
country in the EU.

 

“Manufacture” or “Manufactured” or “Manufacturing” means any activity involved
in or relating to the manufacturing, quality control testing (including
in-process, release and stability testing), releasing or packaging, importing
and keeping, for pre-clinical and clinical purposes, of API or a Product in
finished form.

 

“Material Anti-Corruption Law Violation” means a violation of an Anti-Corruption
Law relating to the subject matter of this Agreement which would if it were
publicly known, in the reasonable view of AstraZeneca, have a material adverse
effect on Isis or on the reputation of AstraZeneca because of its relationship
with Isis.

 

“Medium Response Outcome” has the meaning set forth in Section 1.2.3(b).

 

“Minimum Third Party Payments” means ***].

 

[***]

 

“MSA” has the meaning set forth in Section 4.6.1(d).

 

“NDA” means a New Drug Application filed with the FDA after completion of
Clinical Studies to obtain Approval for a Product in the United States.

 

”Net Sales” means the gross invoiced amount on sales of Products by or on behalf
of AstraZeneca, its Affiliates, and Sublicensees to Third Parties (which will
include Distributors) after deduction of the following amounts, to the extent
taken:

 

102

--------------------------------------------------------------------------------

 

(a)         normal and customary trade, quantity or prompt settlement discounts
(including chargebacks and allowances) actually allowed;

 

(b)         amounts repaid or credited by reason of rejection, returns or
recalls of goods, rebates or bona fide price reductions determined by
AstraZeneca or its Affiliates in good faith;

 

(c)          rebates and similar payments made with respect to sales paid for by
any governmental or regulatory authority such as, by way of illustration and not
in limitation of the Parties’ rights hereunder, Federal or state Medicaid,
Medicare or similar state program in the United States or equivalent
governmental program in any other country;

 

(d)         any invoiced amounts which are not collected by AstraZeneca or its
Affiliates, including bad debts;

 

(e)          excise taxes, Indirect Taxes, customs duties, customs levies and
import fees imposed on the sale, importation, use or distribution of the
Products; and

 

(f)           any other similar and customary deductions that are consistent
with generally accepted accounting principles, or in the case of non-United
States sales, other applicable accounting standards; and

 

after deduction of (i) an allowance for transportation costs, distribution
expenses, special packaging and related insurance charges equal to [***] ([***])
of the amount arrived at after application of the provisions of items
(a) through (f) above; and (ii) the actual cost paid by AstraZeneca, its
Affiliates or Sublicensees for Devices.

 

Net Sales will be calculated using AstraZeneca’s internal audited systems used
to report such sales as adjusted for any of the items  above not taken into
account in such systems. Deductions pursuant to subsection (d) above will be
taken in the Calendar Quarter in which such sales are no longer recorded as a
receivable. As used above, the term “Device” means any device approved by a
Regulatory Authority for use with a Product that is necessary to administer the
Product to a patient (i.e. without such device the Product cannot be delivered
by any other means or methods).

 

If a Product is sold as part of a Combination Product (as defined below), the
Net Sales from such Product, for the purposes of determining royalty payments,
will be determined by multiplying the Net Sales (as determined without reference
to this paragraph) of the Combination Product by the fraction A/(A+B), where A
is the standard sales price of the ready-for-sale form of the Product,
containing the same amount of Compound as the sole active ingredient as the
Combination Product in question, in the given country when sold separately in
finished form; and B is the standard sales price of the ready-for-sale form of
the product containing the same amount of the other therapeutically active
ingredient(s) that is contained in the Combination Product in question, in the
given country, each during the applicable royalty period or, if sales of all
compounds did not occur in such period, then in the most recent royalty
reporting period. In the event, however, that if, in a specific country either
or both of the Compound and the other therapeutically active ingredient in such
Combination Product are not sold separately in such country, a market price for
such Product and such other active ingredient shall be negotiated by the Parties
in good faith for the purposes of performing the calculation above to determine
royalty payments on the Net Sales from such Combination Product.  As used above,
the term

 

103

--------------------------------------------------------------------------------

 

“Combination Product” means a Product that includes at least one additional
therapeutically active ingredient (whether coformulated or copackaged) and is
not a Compound.

 

“Non-Breaching Party” means the Party that believes the Breaching Party is in
material breach of this Agreement.

 

“Non-Transferring Party” has the meaning set forth in Section 14.3.

 

“Oncology Compound” means any ASO that is designed to bind to the RNA that
encodes an Oncology Target, where such ASO is discovered by Isis prior to the
Effective Date or in the performance of an Oncology Research and Development
Plan.

 

“Oncology Collaboration” means the conduct of the Oncology Collaboration
Programs in accordance with this Agreement.

 

“Oncology Collaboration Program” means a discovery research program focused on
discovering Oncology Compounds to select an Oncology Development Candidate in
accordance with the applicable Oncology Research and Development Plan.

 

“Oncology Collaboration Term” has the meaning set forth in Section 3.2.2.

 

“Oncology Development Candidate” means a Development Candidate selected by
AstraZeneca arising out of the work conducted under an Oncology Research and
Development Plan.

 

“Oncology Development Candidate Decision Deadline” has the meaning set forth in
Section 3.3.3.

 

“Oncology Lead Candidate” means Lead Candidate designated by Isis as a potential
Oncology Development Candidate

 

“Oncology Product” means a finished product containing an Oncology Compound as
an active pharmaceutical ingredient (including any salt, hydrate, solvate, or
prodrug thereof).

 

“Oncology Research and Development Plan” means any research and/or development
plan attached hereto as Appendix 3 for an Oncology Collaboration Program focused
on a particular Oncology Target as amended from time to time in accordance with
this Agreement.

 

“Oncology Target” means (i) any of the three Reserved Targets that are selected
under Section 3.3.6 to be the subject of an Oncology Collaboration Program,
(ii) any Substitute Target, or (iii) any oncology target added to this Agreement
under Section 2.2.4.

 

“Option” has the meaning set forth in Section 3.5.

 

“Option Deadline” has the meaning set forth in Section 3.5.

 

“Outcome Notice” has the meaning set forth in Section 1.2.3(e).

 

“Participating Parties” has the meaning set forth in Section 9.2.4(b).

 

“Party” or “Parties” means AstraZeneca and Isis individually or collectively.

 

“Party Representatives” has the meaning set forth in Section 11.7.1.

 

“Patent Costs” means the reasonable fees and expenses paid to outside legal
counsel, and filing, maintenance and other reasonable out-of-pocket expenses
paid to Third Parties, incurred in connection with the Prosecution and
Maintenance of Patent Rights.

 

104

--------------------------------------------------------------------------------

 

“Patent Rights” means (a) patents, patent applications and similar
government-issued rights protecting inventions in any country or jurisdiction
however denominated, (b) all priority applications, divisionals, continuations,
substitutions, continuations-in-part of and similar applications claiming
priority to any of the foregoing, and (c) all patents and similar
government-issued rights protecting inventions issuing on any of the foregoing
applications, together with all registrations, reissues, renewals,
re-examinations, confirmations, supplementary protection certificates, and
extensions of any of (a), (b) or (c).

 

“Permitted Licenses” means (1) licenses granted by Isis before or after the
Effective Date to any Third Party under the Isis Core Technology Patents, the
Isis Manufacturing and Analytical Patents, or the Isis Manufacturing and
Analytical Know-How (but not under the Isis Product-Specific Patents) to (a) use
oligonucleotides (or supply oligonucleotides to end users) solely to conduct
pre-clinical research, or (b) enable such Third Party to manufacture or
formulate oligonucleotides, where (i) such Third Party is primarily engaged in
providing contract manufacturing or services and is not primarily engaged in
drug discovery, development or commercialization of therapeutics; and (ii) Isis
does not assist such Third Party to identify, discover or make a Compound or
Product; and (2) material transfer agreements with academic collaborators or
non-profit institutions in connection with the Isis Conducted Activities
approved by AstraZeneca, such approval not to be unreasonably withheld or
delayed.

 

“Person” means any corporation, limited or general partnership, limited
liability company, joint venture, trust, unincorporated association,
governmental body, authority, bureau or agency, any other entity or body, or an
individual.

 

“Pharmacovigilance Agreement” has the meaning set forth in Section 7.3.2.

 

“Phase 1 Trial” means the initial clinical testing of a Product in humans
(first-in-humans study) with the intention of gaining a preliminary assessment
of the safety of such Product. “Phase 1 Trial” includes any clinical study
designated under a Collaboration Plan as a “Phase 1 Trial” or “Phase 1 Study.”

 

“Phase 1/2 Trial” means Isis’ ongoing Clinical Study described in the STAT3
Research and Development Plan, including the expansion cohort for such trial.

 

“Phase 1/2 Trial Data Package” means, with respect to the Phase 1/2 Trial, the
listing and tables of safety and efficacy data, radiographic scans of tumor
assessments, radiologist reports and summary of biomarker or other assay data
that was mutually agreed by Isis and AstraZeneca.

 

“Phase 2 Trial” means any Clinical Study in a single tumor type or enriched for
a tumor type that is intended to show safety and efficacy (which efficacy may be
shown by a biomarker or other assay) in the target population, at the intended
clinical dose or doses or range of doses, on a sufficient number of subjects and
for a sufficient period of time to confirm the optimal manner of use of the
Product prior to initiation of the Phase 3 Trials, and which itself provides
sufficient evidence of safety and efficacy to be included as a supportive study
to the Phase 3 Trial in filings with Regulatory Authorities. “Phase 2 Trial”
includes any clinical study designated under a Collaboration Plan as a “Phase 2
Trial,” “Phase 2a Trial,” Phase 2b Trial,” “Phase 2 Study,” Phase 2a Study” or
“Phase 2b Study.”

 

“Phase 3 Trial” or “Registration-Directed Trial” means a pivotal Clinical Study
(whether or not denominated as a “Phase 3” Clinical Study under applicable
regulations) in human patients that is of the size and design intended to
establish that a Product is safe and effective for its intended

 

105

--------------------------------------------------------------------------------

 

use; to define warnings, precautions and adverse reactions that are associated
with the Product in the dosage range to be prescribed; and is intended to
support Approval of such Product. “Phase 3 Trial” or “Registration-Directed
Trial” includes any clinical study designated under a Collaboration Plan as a
“Phase 3 Trial,” “Phase 3 Study” or “Registration Trial.”

 

“Pre-Clinical Studies” means in vitro and in vivo studies of one or more
Compounds, not in humans, including those studies conducted in whole animals and
other test systems, designed to determine the toxicity, bioavailability, and
pharmacokinetics of the Product and whether the Product has a desired effect.

 

“Prior Agreements” means the agreements listed on APPENDIX 10 attached hereto.

 

“Proceeding” means an action, suit or proceeding.

 

“Product” means, as applicable (i) a STAT3 Product, (ii) an [***] Product, or
(iii) an Oncology Product.

 

“Product-Specific Patents” means:

 

(A)                               with respect to [***] Products: (i) Assignable
[***] Product-Specific Patents; and (ii) Licensable [***] Product-Specific
Patents, or

 

(B)                               with respect to STAT3 Products and Oncology
Products: Patent Rights Controlled by a Party or any of its Affiliates on or
after the Effective Date claiming: (i) the specific composition of matter of a
STAT3 Product or Oncology Product, or (ii) methods of using such a Product as a
prophylactic, therapeutic or diagnostic.

 

“Proposed Substitute Target” has the meaning set forth in Section 3.3.7(a).

 

“Prosecution and Maintenance” or “Prosecute and Maintain” means, with regard to
a Patent Right, the preparing, filing, prosecuting and maintenance of such
Patent Right, as well as handling re-examinations, reissues, and requests for
patent term extensions with respect to such Patent Right, together with the
conduct of interferences, the defense of oppositions and other similar
proceedings with respect to the particular Patent Right. For clarification,
“Prosecution and Maintenance” or “Prosecute and Maintain” will not include any
other enforcement actions taken with respect to a Patent Right.

 

“R&D Research and Development Plan” means collectively the (i) STAT3 Research
and Development Plan, and (ii) [***] Research and Development Plan.

 

“Receiving Party” has the meaning set forth in Section 13.1.

 

“Regulatory Authority” means any governmental authority, including the FDA, EMA
or Koseisho (i.e., the Japanese Ministry of Health and Welfare, or any successor
agency thereto), that has responsibility for granting any licenses or approvals
or granting pricing or reimbursement approvals necessary for the marketing and
sale of a Product in any country.

 

“Regulatory Documentation” means any regulatory submissions, notifications,
registrations, approvals and/or other filings and correspondence made to or with
a Regulatory Authority in any country or jurisdiction, and any other records
required by Applicable Law to be maintained that may be necessary or useful to
develop, manufacture, market, sell or otherwise commercialize a Product in the
Field.

 

106

--------------------------------------------------------------------------------

 

“Relevant Authority” means any court or government body, whether national,
supra-national, federal, state, local, foreign or provincial, including any
political subdivision thereof, including any department, commission, board,
bureau, agency, or other regulatory or administrative governmental authority or
instrumentality, and further including any quasi-governmental Person or entity
exercising the functions of any of these.

 

“Research” means conducting the research activities with Compounds as set forth
in a Collaboration Plan, including pre-clinical research and lead optimization,
but specifically excluding Development and Commercialization. When used as a
verb, “Researching” means to engage in Research.

 

“Reserved Target” means any gene target reserved for potential selection as an
Oncology Target in accordance with Section 3.3.5.

 

“RMC” means Isis’ Research Management Committee, or any successor committee.

 

“Royalty Period” has the meaning set forth in Section 8.8.2(a).

 

“Safety Concern” has the meaning set forth in Section 1.2.3(d).

 

“Senior Representatives” has meaning set forth in Section 14.1.1.

 

“Service Provider” means the Third Party(ies) conducting the original and
revised studies under a Collaboration Plan.

 

“STAT3” means the gene, signal transduction and activation of transcription 3
(GenBank accession # NM_139276.2; Gene ID: 6774) (also known as acute-phase
response factor (APRF)), or any alternative splice variants, mutants,
polymorphisms and fragments thereof.

 

“STAT3/[***] Collaboration” means the conduct of the STAT3 Program and the [***]
Program in accordance with this Agreement.

 

“STAT3 Compound” means any ASO that is designed to bind to the RNA that encodes
STAT3, where such ASO is discovered or Controlled by Isis prior to the Effective
Date or in the performance of the STAT3 Research and Development Plan, including
the Compound known as ISIS-STAT3Rx (also referred to by compound number ISIS
481464).

 

“STAT3 Product” means any finished product containing a STAT3 Compound as an
active pharmaceutical ingredient (including any salt, hydrate, solvate, or
prodrug thereof).

 

“STAT3 Program” means the research and/or development program for STAT3 Products
under this Agreement.

 

“STAT3 Research and Development Plan” means the research and/or development plan
for the STAT3 Program (initially as attached hereto as Appendix 2) as amended
from time to time in accordance with this Agreement.

 

“Sublicensee” means a Third Party to whom a Party or its Affiliates or
Sublicensees has granted a sublicense or license under any Licensed Technology
or AstraZeneca Technology, as the case may be, licensed to such Party in
accordance with the terms of this Agreement.

 

“Substitute Notice” has the meaning set forth in Section 3.3.7(a).

 

“Substitute Target” has the meaning set forth in Section 3.3.7(b).

 

“Target Encumbrances” has the meaning set forth in Section 3.3.5.

 

107

--------------------------------------------------------------------------------

 

“Target Knock-Down” has the meaning set forth in Section 1.2.3(c).

 

“Target Sanction” means the stage at which an Oncology Target has demonstrated
sufficient therapeutic potential in pre-clinical disease models and has received
the recommendation of the JSC to expend resources to identify an Oncology
Development Candidate, all in accordance with the JSC’s standard processes.

 

“Third Party” means a Person or entity other than the Parties or their
respective Affiliates.

 

“Third Party Claims” has the meaning set forth in Section 11.1.

 

“Third Party Obligations” means any financial and non-financial encumbrances,
obligations, restrictions, or limitations imposed by an agreement between a
Party and a Third Party that relate to a Product or a Gene Target, including
field or territory restrictions, covenants, milestone payments, diligence
obligations, sublicense revenue, royalties, or other payments.

 

“Transferring Party” has the meaning set forth in Section 14.3.

 

“United States” or “U.S.” means the fifty states of the United States of America
and all of its territories and possessions and the District of Columbia.

 

“Valid Claim” means a claim (i) of any issued, unexpired United States or
foreign Patent Right, which will not, in the country of issuance, have been
donated to the public, disclaimed, nor held invalid or unenforceable by a court
of competent jurisdiction in an unappealed or unappealable decision, or (ii) of
any United States or foreign patent application within a Patent Right, which
will not, in the country in question, have been cancelled, withdrawn, abandoned
nor been pending for more than seven years, not including in calculating such
seven-year period of time in which such application is in interference or
opposition or similar proceedings or time in which a decision of an examiner is
being appealed. Notwithstanding the foregoing, on a country-by-country basis, a
patent application pending for more than seven years will not be considered to
have any Valid Claim for purposes of this Agreement unless and until a patent
meeting the criteria set forth in clause (i) above with respect to such
application issues.

 

108

--------------------------------------------------------------------------------

 

APPENDIX 2

 

STAT3 Research and Development Plan and [***] Research and Development Plan

 

[***]

 

109

--------------------------------------------------------------------------------

 

APPENDIX 3

 

Oncology Research and Development Plan

 

[***]

 

110

--------------------------------------------------------------------------------

 

APPENDIX 4

 

Isis’ Lead Candidate Checklist

 

[***]

 

111

--------------------------------------------------------------------------------

 

APPENDIX 5

 

Examples (not an exhaustive list) Illustrating Separate Indications

 

[***]

 

112

--------------------------------------------------------------------------------

 

APPENDIX 6

 

Isis In-License Agreements

 

(Relevant to the R&D Research and Development Plan as of the Effective Date)

 

[***]

 

113

--------------------------------------------------------------------------------

 

APPENDIX 7

 

Isis Core Technology Patents

 

[***]

 

114

--------------------------------------------------------------------------------

 

APPENDIX 8

 

Isis Manufacturing and Analytical Patents

 

[***]

 

115

--------------------------------------------------------------------------------

 

APPENDIX 9

 

Isis Product-Specific Patents

 

[***]

 

116

--------------------------------------------------------------------------------

 

APPENDIX 10

 

Prior Agreements

 

[***]

 

117

--------------------------------------------------------------------------------

 

APPENDIX 11

 

IND Support Package

 

[***]

 

118

--------------------------------------------------------------------------------

 

SCHEDULE 3.3.6

 

[***]

 

119

--------------------------------------------------------------------------------

 

SCHEDULE 4.1.1

 

JSC GOVERNANCE

 

(a)                                 The JSC will determine the JSC operating
procedures, including frequency of meetings (at least quarterly), location of
meetings, and responsibilities for agendas and minutes. The JSC will codify
these operating procedures in the written minutes of the first meeting.

 

(d)                                 The JSC may hold meetings in person or by
audio or video conference as determined by the JSC; but at least two meetings
per year will be in person (one held at Isis’ facilities, and the other held at
AstraZeneca’s facilities outside of the U.S.). Alliance Managers will attend JSC
meetings as participating non-members. In addition, upon prior approval of the
other Party, each Party may invite its employees or consultants to attend JSC
meetings, including any subject matter expert(s) with valuable knowledge of the
relevant Gene Target.

 

(e)                                  The co-chairs will be responsible for
ensuring that activities occur as set forth in this Agreement, including
ensuring that JSC meetings occur, JSC recommendations are properly reflected in
the minutes, and any dispute is given prompt attention and resolved in
accordance with Section 4.1.3, Section 9.1.3 and Section 14.1, as applicable.

 

(f)                                   The JSC members from the same Party will
collectively have one vote. The JSC will strive to make recommendations with
approval of both Isis members and AstraZeneca members, and record such
recommendations in the minutes of the applicable JSC meeting.

 

(g)                                 The JSC may form subcommittees and working
groups as it determines in order to carry out its activities under this
Agreement, all of which will dissolve when the JSC dissolves.

 

120

--------------------------------------------------------------------------------

 

SCHEDULE 4.1.3(C)

 

AstraZeneca’s Performance Metrics

 

[***]

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.2

 

Alliance Management Activities

 

Each Alliance Manager is responsible for:

 

(a)                                 Promoting the overall health of the
relationship between the Parties;

 

(h)                                 Developing a mutually agreed alliance launch
plan covering any activities and systems that the Parties need to implement
within the first 100 days after the Effective Date to support the Collaboration
Plans;

 

(i)                                    Organizing each JSC meeting, including
agendas, drafting minutes, and publishing final minutes;

 

(j)                                    Supporting the co-chairs of the JSC with
organization of meetings, information exchange, meeting minutes, and
facilitating dispute resolution as necessary;

 

(k)                                 Preparing status and progress reports on the
above as determined necessary by the JSC;

 

(l)                                    Ensuring compliance in maintaining the
Isis Internal ASO Safety Database as outlined in Section 7.2; and

 

(m)                             Ensuring proper approval of publications prior
to submission as required in Section 13.4.

 

(n)                                 Review Material Transfer Agreements.

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.6.1

 

Isis’ Fully Absorbed Cost of Goods Methodology

 

[***]

 

--------------------------------------------------------------------------------

 

SCHEDULE 4.6.1(d)

 

Manufacturing Services Agreement Principles

 

[***]

 

--------------------------------------------------------------------------------

 

Schedule 4.7

 

AstraZeneca Bioethics Policy

 

[***]

 

--------------------------------------------------------------------------------