Exhibit 10.34

 

SUPPLEMENTAL MABA AMENDMENT TO

STRATEGIC ALLIANCE AGREEMENT

 

This Amendment to the Strategic Alliance Agreement (this “Amendment”) is entered
into effective as of October 3, 2011 (the “Effective Date of this Amendment”),
between Theravance, Inc., a Delaware corporation (“Theravance”) and Glaxo Group
Limited, a private company limited by shares registered under the laws of
England and Wales (“GSK”) and amends and supplements the Strategic Alliance
Agreement entered into as of March 30, 2004, as amended and supplemented on
September 13, 2004, February 11, 2005, February 8, 2006, February 27, 2006,
February 27, 2009, June 22, 2009 and July 16, 2010 (the “Agreement”).  All
capitalized terms not defined in this Amendment shall have the meaning ascribed
to them in the Agreement.

 

WHEREAS, GSK desires to receive from Theravance and Theravance desires to grant
to GSK the right to Develop and Commercialize additional Muscarinic
Antagonist-Beta2 Agonist (“MABA”) compounds discovered by Theravance on an
exclusive, worldwide basis in order to combine Theravance’s and GSK’s activities
with respect to MABA compounds in accordance with the terms and conditions of
the Agreement as amended and supplemented by this Amendment.

 

NOW, THEREFORE, in consideration of the foregoing premises and the
representations, covenants and agreements contained herein, Theravance and GSK,
intending to be legally bound, hereby agree as follows:

 

1.                                      Definitions:

 

1.1                               “Combination Supplemental MABA Alliance
Product” means a Supplemental MABA Alliance Product that contains one or more
therapeutically active agents in addition to the Theravance Compound.

 

1.2                               “MABA Alliance Product” shall mean the
Alliance Product GSK961081 discovered in the course of the MABA Alliance
Program.

 

1.3                               “MABA Alliance Program” shall mean the
Alliance Program in respect of which GSK exercised its Opt-In Right on 21
March 2005.

 

1.4                               “Supplemental MABA Alliance Products” shall
mean the following Theravance Compounds: [***], and each such Supplemental MABA
Alliance Product can be used as a single agent and/or in combination with other
therapeutically active components for human pharmaceutical applications.  The
term “Supplemental MABA Alliance Product” shall also include any formulation of
excipients, stabilizers, propellants, or other components necessary to prepare
and deliver a pharmaceutically effective dose of such Theravance Compound and
any other therapeutically active component together with any delivery device.

 

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1.5                               “Supplemental MABA Alliance Program” shall
mean all activities with respect to the Development and Commercialization of the
Supplemental MABA Alliance Products.

 

1.6                               “Supplemental MABA Development Milestone”
shall have the meaning set forth in Section 6.2(i) of this Amendment.

 

1.7                               “Supplemental MABA Technology Transfer
Package” means all Theravance Confidential Information and Theravance Know-How
relating to the Supplemental MABA Alliance Products.  Any material supplied by
Theravance to GSK as contemplated hereunder shall comply with any specification
agreed by GSK and Theravance.

 

1.8                               Notwithstanding the definition of the term
“Alliance Product” in the Agreement, “Alliance Product” shall include the
Supplemental MABA Alliance Products in the following sections of Article 1: 
Sections 1.8, 1.19, 1.21, 1.22, 1.24, 1.33, 1.34, 1.41, 1.46, 1.47, 1.58, 1.59,
1.69, 1.71, 1.75, 1.85 through 1.90, 1.93, 1.94, 1.103, 1.110 through 1.112,
1.116, 1.117, 1.121 and 1.122.

 

1.9                               Notwithstanding the definition of the term
“Alliance Program” in the Agreement, “Alliance Program” shall include the
Supplemental MABA Alliance Program in the following sections of Article 1: 
Sections 1.9 and 1.33.

 

2.                                      License.  Notwithstanding the definition
of the term “Alliance Product” in the Agreement, “Alliance Product” shall
include the Supplemental MABA Alliance Products in Article 2 of the Agreement.

 

3.                                      Governance.

 

3.1                               Notwithstanding the definition of the term
“Alliance Product” in the Agreement, “Alliance Product” shall include the
Supplemental MABA Alliance Products in Sections 3.2 through 3.6 of the
Agreement; provided, however, that:

 

(i)                                     In Section 3.2.3(g), reference to GSK’s
termination rights under Article 14 shall also include GSK’s termination rights
under Section 10.2 of this Amendment.

 

3.2                               Notwithstanding the definition of the term
“Alliance Program” in the Agreement, “Alliance Program” shall include the
Supplemental MABA Alliance Program in Sections 3.2.3 and 3.3, and the Parties
hereby agree that it is appropriate for one Joint Program Committee to manage
both the MABA Alliance Program and the Supplemental MABA Alliance Program.

 

3.3                               The Parties hereby agree to amend and restate
Section 3.2.5(b) of the Agreement with respect to all Alliance Products and
Supplemental MABA Alliance Products as follows:

 

“With respect to any issue, if the Joint Steering Committee cannot reach
consensus within ten (10) Business Days after the matter has been brought to the
Joint Steering Committee’s attention, then such issue shall be referred to the
Chief

 

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Executive Officer of Theravance and either the Chairman of GSK R&D (if the issue
relates to a discovery and/or development matter) or the Chief Executive Officer
of GSK (or one of his direct reports designated by him) (if the issue relates to
a commercial matter) (collectively, the “Officers”) for resolution.  The Parties
accept that the use of the Officers for resolution of any unresolved issues will
be on an exceptional basis.  In the event that the use of the Officers occurs on
more than two occasions in any consecutive twelve (12) month period and such
disputes are not related to Commercial Conflict issues, then GSK will from then
on retain the final vote within the Joint Steering Committee for all issues
other than Commercial Conflict.  If the Officers are unable to reach consensus
within thirty (30) days after the matter has been referred to them, the final
decision on such disputed issue will reside with GSK; provided, however, that if
the disputed issue involves [***], then the final decision will be made by
binding arbitration (“Arbitration”).  Either Party can initiate Arbitration on
[***] to the other Party.  The Arbitration shall be conducted pursuant to the
American Arbitration Association (“AAA”) Commercial Arbitration Rules then in
effect, except that notwithstanding those rules, the following provisions shall
apply to the Arbitration hereunder.

 

(i)                                     Panel.  The Arbitration shall be
conducted by a panel of three (3) arbitrators (the “Arbitration Panel”) in
[***].  The Arbitration Panel shall consist of one arbitrator selected by each
of the Parties from a pool of arbitrators to be presented to the Parties by AAA
from the AAA’s National Roster.  Each of these two arbitrators shall have
expertise in pharmaceutical product Development and Commercialization, and these
two arbitrators shall jointly select the chairman from a pool of arbitrators to
be presented to the Parties by AAA from the AAA’s National Roster.

 

(ii)                                  Process.  The time periods set forth in
the AAA rules shall be followed, unless a Party can demonstrate to the
Arbitration Panel that the urgency of the dispute or other reasons warrant
contraction of one or more of the timetables.  For good cause shown, the
Arbitration Panel may contract such timetables.  Within such time frames, each
Party shall have the right to conduct such discovery as would be permitted by
the Federal Rules of Civil Procedure.  Interpretation of and enforcement of this
Section 3.2.5(b) shall be governed by the Federal Arbitration Act.  The
Arbitration Panel shall apply the Federal Rules of Evidence to the hearing.  The
fees of the Arbitration Panel and AAA shall be paid by the losing Party, which
shall be designated by the Arbitration Panel or in such proportions as may be
designed by the Arbitration Panel where a Party does not prevail with respect to
all issues.

 

(iii)                               Confidentiality.  The Arbitration proceeding
shall be confidential and the Arbitration Panel shall issue appropriate
protective orders to safeguard each Party’s Confidential Information.  Except as
required by Law, no Party shall make (or instruct the Arbitration Panel to make)
any public announcement with respect to the proceedings or decision of the
Arbitration Panel without prior written consent of each other Party.  The
existence of a dispute submitted to

 

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Arbitration, and the outcome, shall be kept in confidence by the Parties and the
Arbitration Panel except as, in the opinion of either Party’s counsel, may be
required by Law.

 

(iv)                              Findings of Arbitration Panel. The decision of
the Arbitration Panel will be final and binding on the Parties; provided that
either Party shall retain all rights to bring an action against the other for
damages and other monetary relief related to or arising out of the issue decided
by the Arbitration Panel.”

 

4.                                      Material and Tech Transfer;
Development.  Article 4 of the Agreement shall not apply to the Supplemental
MABA Alliance Products and instead the Parties agree as follows:

 

4.1                               Delivery of Supplemental MABA Alliance
Products.  As soon as reasonably practicable but in any event within [***] after
the Effective Date of this Amendment, Theravance shall deliver to GSK existing
stock of each Supplemental MABA Alliance Product as well as the Supplemental
MABA Technology Transfer Package.  For the avoidance of doubt, Theravance’s
delivery of material and information pursuant to this Section 4.1 constitutes
the entirety of Theravance’s information and material delivery obligations with
regard to the Supplemental MABA Alliance Program, and Theravance shall be
responsible for no further research or development of the Supplemental MABA
Alliance Products thereafter provided that in the event that Theravance does
obtain any further information in respect of the Supplemental MABA Alliance
Products, it shall promptly disclose such information to GSK.

 

4.2                               Obligations for Development.

 

(i)                                     GSK hereby agrees to exercise Diligent
Efforts to move one Supplemental MABA Alliance Product forward in Development
provided always that it is understood and hereby acknowledged by the Parties
that any GSK decision to pursue Development of a Combination Supplemental MABA
Alliance Product as against a single agent Alliance Product (or vice versa)
and/or a certain Supplemental MABA Alliance Product as opposed to any other
Supplemental MABA Alliance Product shall not, for the avoidance of doubt,
constitute a breach of GSK’s Diligent Efforts obligations under the Agreement or
this Amendment.  GSK shall have the overall responsibility for, and use Diligent
Efforts in, the performance of all such Development activities which shall
include, where applicable, relevant regulatory filings (as contemplated under
Article 8 of the Agreement) for any such Supplemental MABA Alliance
Product(s) moved forward in Development.  Further, GSK shall use Diligent
Efforts to advance such Supplemental MABA Alliance Product(s) through
Development in accordance with the Go/No-Go checkpoints identified in the
then-current Development Plan for such Supplemental MABA Alliance Product. GSK
shall also use Diligent Efforts to develop an optimal formulation of such
Supplemental MABA Alliance Product.  As of the Effective Date of this Amendment,
GSK shall bear all subsequent costs and expenses associated with the Development
of any Supplemental MABA Alliance Product.

 

(ii)                                  For the avoidance of doubt, it is each
Party’s intention that [***] such time as [***] from the MABA Alliance Program
or the Supplemental MABA Alliance Program; [***] Theravance Compounds in the
MABA Alliance Program and the Supplemental

 

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MABA Alliance Program and [***] pursuant to Section 14.5.2(b) of the Agreement,
as amended by Section 10.3 of this Amendment.  [***] Develop at least one
Supplemental MABA Alliance Product and [***] Develop the MABA Alliance Product
pursuant to the Agreement, [***] the Supplemental MABA Alliance Program pursuant
to the terms of Section 14.5.2(b) of the Agreement, as amended by Section 10.3
of this Amendment, and Theravance shall be entitled to develop and commercialize
all compounds from such program outside of the Alliance alone or with a Third
Party pursuant to Section 14.5 of the Agreement as amended by this Amendment.

 

(iii)                               The Specific Alliance Product Development &
Commercialization Appendix applicable to the MABA Alliance Program shall apply
to the Supplemental MABA Alliance Program except where otherwise decided by the
Joint Program Committee or the Joint Steering Committee, as applicable, save
that the Technology Transfer Appendix shall be as set out in Schedule
4.2(iii) to this Amendment.

 

4.3                               Decisions with Respect to Supplemental MABA
Alliance Products.

 

(i)                                     GSK shall have the sole discretion with
respect to Development decisions for Supplemental MABA Alliance Products subject
to and in accordance with Sections 3.2.5 and 3.3.5 of the Agreement, as amended
by this Amendment, and Section 4.2 of this Amendment.

 

(ii)                                  GSK will provide the Joint Program
Committee with (i) a notification within thirty (30) days of the initiation
(i.e. the first person dosed) of any Study involving a Supplemental MABA
Alliance Product, and (ii) a “top line results” report within [***] following
the last person dosed/last visit in any Study involving a Supplemental MABA
Alliance Product.

 

4.4                               Development Timelines.  It is hereby
acknowledged that the Parties’ mutual strategic objective is to move one
Supplemental MABA Alliance Product into Development at the earliest opportunity
([***]), to initiate and undertake clinical Development of at least one
Supplemental MABA Alliance Product having regard to progress made with respect
to the MABA Alliance Product currently in clinical Development and to move at
least one MABA Alliance Product or one Supplemental MABA Alliance Product into
subsequent Commercialization at the earliest opportunity.  GSK will consult with
the Joint Program Committee and will share, modify and further develop all
applicable Development Plans and timelines in that forum.  GSK will use Diligent
Efforts to secure the necessary resources and will keep the Joint Program
Committee informed on the progress of individual studies and activities relating
to Supplemental MABA Alliance Products in accordance with Section 3.2.3 of the
Agreement as amended by this Amendment.

 

4.5                               Activity Outside of the Alliance.

 

(i)                                     The Parties hereby agree that for so
long as the Supplemental MABA Alliance Products have not been returned to
Theravance pursuant to Section 14.5.2(b) of the Agreement, neither GSK nor
Theravance shall, whether alone or with a Third Party, conduct a clinical study
with respect to a MABA compound (or product containing a MABA compound) outside
of the Agreement or this Amendment.

 

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(ii)                                  The Parties however acknowledge that the
research, Development and Commercialization objectives of the Alliance are
intended to be complementary to GSK’s other research, development and
commercialization efforts outside the Alliance.  Accordingly and subject to the
provisions of Section 4.5(i) of this Amendment, the Parties agree that GSK shall
be free to discover and develop other compounds for the treatment of diseases
targeted by Supplemental MABA Alliance Products outside of this Amendment and
the Agreement, subject to GSK’s obligations under this Amendment and under the
Agreement with respect to any Supplemental MABA Alliance Product and the MABA
Alliance Product.

 

5.                                      Commercialization.  Notwithstanding the
definition of the term “Alliance Product” in the Agreement, “Alliance Product”
shall include the Supplemental MABA Alliance Products in Sections 5.1 through
5.3 of the Agreement.

 

6.                                      Financial Provisions.

 

6.1                               Up-Front Payment.  Section 6.1 of the
Agreement shall not apply to the Supplemental MABA Alliance Products and instead
GSK shall, within [***] of the Effective Date of this Amendment, pay to
Theravance a non-refundable amount of One Million United States Dollars
($1,000,000).

 

6.2                               Milestones.  Except as otherwise set forth
below, Section 6.2 of the Agreement shall not apply to the Supplemental MABA
Alliance Products and instead the following Development milestone payment terms
shall apply:

 

(i)                                     In further consideration for the
acquisition of license rights relating to the Supplemental MABA Alliance
Products under the Theravance Patents and Theravance Know-How, GSK shall also
pay to Theravance the payments set forth below for each such Development
milestone achieved (each, a “Supplemental MABA Development Milestone”); provided
always that each such payment shall be made only one time upon the first
achievement of such Supplemental MABA Development Milestone by the first
Supplemental MABA Alliance Product, regardless of how many times such
Supplemental MABA Development Milestones are achieved by one or more
Supplemental MABA Alliance Products and regardless of whether the Supplemental
MABA Alliance Product is a single-agent or a Combination Supplemental MABA
Alliance Product, and no payment shall be owed for a Supplemental MABA
Development Milestone which is not achieved (except that, upon achievement of a
Development Milestone for a particular Supplemental MABA Alliance Product, any
previous Development Milestone for that Supplemental MABA Alliance Product for
which payment was not made shall be deemed achieved and payment therefore shall
be made).  The Development milestones specified in Section 6.2.2 of the
Agreement for “Filing for Regulatory Approval” and “Launch” shall apply to the
Supplemental MABA Alliance Products and, when applied to the Supplemental MABA
Alliance Products, shall constitute Supplemental MABA Development Milestones.

 

Milestones 

 

Amount

 

Initiation of [***]

 

[***]

 

Successful Completion of [***]

 

[***]

 

 

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Initiation of [***]

 

[***]

 

 

 

 

 

Filing for Regulatory Approval and Launch milestones as per Section 6.2.2 of the
Agreement

 

 

Notwithstanding the definition of the term “Alliance Product” in the Agreement,
“Alliance Product” shall include the Supplemental MABA Alliance Products in the
definitions specified in Section 6.2.2, and all of the definitions set forth in
Section 6.2.2 shall apply to the Supplemental MABA Alliance Products.

 

(ii)                                  Notification and Payment.  In the event a
Supplemental MABA Alliance Product achieves a Supplemental MABA Development
Milestone, GSK shall promptly, but in no event more than [***] after the
achievement of each such Supplemental MABA Development Milestone, notify
Theravance in writing of the achievement of same. For all Supplemental MABA
Development Milestones achieved GSK shall promptly, but in no event more than
[***] after notification of the achievement of each such Supplemental MABA
Development Milestone, remit payment to Theravance for such Supplemental MABA
Development Milestone.

 

6.3                               Royalties.  Section 6.3 of the Agreement shall
not apply to the Supplemental MABA Alliance Products and instead the following
royalties shall apply to net sales of any Supplemental MABA Alliance Product:

 

(i)  Patent Royalty.  As further consideration for the acquisition of license
rights under the Theravance Patents under this Amendment, and in those Countries
of the Territory in which there is a Valid Claim of a Theravance Patent covering
the Supplemental MABA Alliance Product in the Country of sale at the time such
Net Sales occur (for the avoidance of doubt, “covering” as used in this
Section and subsequent Sections shall include the making, using, selling,
offering for sale, or importing the Supplemental MABA Alliance Product), GSK
shall pay Theravance, within [***] after the end of each Calendar Quarter,
royalty payments for each such Supplemental MABA Alliance Product based on Net
Sales in such Calendar Quarter on a Country by Country basis, as follows:

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

(ii)                                  Decreased Royalty.  As further
consideration for the acquisition of license rights under the Theravance Patents
under this Amendment, and in those Countries of the Territory where an
obligation to pay royalties under Section 6.3(i) of this Amendment has applied
during the Term but is no longer applicable (as a result of subsequent
expiration or termination of the last Valid Claim of a Theravance Patent
covering the Supplemental MABA Alliance Product in the Country of sale at the
time such Net Sales occur), GSK shall pay Theravance, within [***] after the end
of each Calendar Quarter, royalty payments for each such Supplemental MABA
Alliance Product based on Net Sales in such Calendar Quarter on a Country by
Country basis, as follows:

 

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[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

(iii)                               Know-How Royalty.  As further consideration
for the acquisition of Theravance Know-How by GSK under this Amendment, and in
those countries which are not subject to the royalty obligation referred to in
Section 6.3(i) or (ii) of this Amendment, GSK shall pay Theravance, within [***]
after the end of each Calendar Quarter, royalty payments for each such
Supplemental MABA Alliance Product based on Net Sales in such Calendar Quarter
on a Country by Country basis, as follows:

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

[***]

 

 

(iv)                              Royalty on Combination Supplemental MABA
Alliance Products.  For the purpose of determining royalty payments on
Supplemental MABA Alliance Products, if the Combination Supplemental MABA
Alliance Product is commercialized, then (irrespective of (a) whether the
relevant Theravance single agent in such Combination Supplemental MABA Alliance
Product is also separately commercialized for which Theravance is receiving
separate royalty payments and (b) how many therapeutically active agents are
contained in such Combination Supplemental MABA Alliance Product) [***] of the
royalty rates referred to in Section 6.3(i), (ii) and (iii) of this Amendment
inclusive (whichever is applicable) shall apply.

 

(v)                                 Estimates.  The quarterly royalty payments
made hereunder may be based on estimated Net Sales.  Within thirty (30) days
after the end of each Calendar Quarter, GSK shall calculate the actual amount of
Net Sales for the previous Calendar Quarter and either credit or debit the
difference between such actual and projected amount on the succeeding Calendar
Quarter’s royalty payment to Theravance. GSK will also provide Theravance with
those estimates of future Net Sales as it provides in accordance with its own
internal procedures.

 

(vi)                              Duration of Royalty Payments.

 

(a)                                 Commencement.  All royalties payable
hereunder shall be paid on a Country-by-Country basis from the date of first
commercial sale of each Supplemental MABA Alliance Product in a particular
Country.

 

(b)                                 Duration of Full Patent Royalties.  Royalty
obligations under Section 6.3(i) of this Amendment in each Country of the
Territory shall remain until the expiration or termination of the last Valid
Claim of a Theravance Patent covering the Supplemental MABA Alliance Product in
such Country.

 

(c)                                  Duration of Decreased Patent Royalties. 
Royalty obligations under Section 6.3(ii) of this Amendment in each Country of
the Territory shall apply for a maximum period of [***] from First Commercial
Sale of the relevant Supplemental MABA

 

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Alliance Product in each such Country (where, for the avoidance of doubt, such
period would include, and not be additional to, the time for which a full patent
royalty was previously payable under Section 6.3(i)).

 

(d)                                 Duration of Know-How Royalties.      Royalty
obligations under Section 6.3(iii) of this Amendment in each Country of the
Territory shall apply for a maximum period of ten (10) years from First
Commercial Sale of the relevant Supplemental MABA Alliance Product in each such
Country.

 

6.4                               In each of the following Sections of the
Agreement, notwithstanding the definition of the term “Alliance Product” in the
Agreement, “Alliance Product” shall include the Supplemental MABA Alliance
Products:  Sections 6.4 through 6.10 (except that references to Sections 6.1,
6.2 and 6.3 in Section 6.9 shall instead refer to Sections 6.1, 6.2 and 6.3 of
this Amendment).

 

7.                                      Communications, Promotional Materials
and Samples; Regulatory Matters; Orders and Supply and Returns; Confidential
Information.

 

7.1                               Notwithstanding the definition of the term
“Alliance Product” in the Agreement, “Alliance Product” shall include the
Supplemental MABA Alliance Products in Articles 7 through 10 of the Agreement
provided that the transfer of the stock of Supplemental MABA Alliance Products
to GSK shall take place pursuant to Section 4.1 of this Amendment and not
Section 9.2.1 of the Agreement.

 

8.                                      Representations and Warranties.

 

8.1                               Mutual.  Theravance and GSK each represents
and warrants to the other as of the Effective Date of this Amendment the
representations and warranties set forth in Section 11.1 of the Agreement,
except that references therein to “this Agreement” shall refer instead to the
Agreement as amended by this Amendment.

 

8.2                               Additional GSK.  GSK further represents,
warrants and covenants to Theravance as of the Effective Date of this Amendment
that:

 

(i)                                     neither GSK nor any of its Affiliates is
a Party to or otherwise bound by any oral or written contract or agreement that
will result in any Person obtaining any interest in, or that would give to any
Person any right to assert any claim in or with respect to, any of GSK’s rights
granted under this Amendment; and

 

(ii)                                  GSK’s valuation of the Supplemental MABA
Alliance Products does not meet the size-of-transaction threshold for reporting
under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

 

8.3                               Additional Theravance.  Theravance further
represents and warrants and covenants to GSK as of the Effective Date of this
Amendment that:

 

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(i)                                     Theravance has not received notice from
any Third Party of a claim that an issued patent of such Third Party would be
infringed by the manufacture, distribution, marketing or sale of the
Supplemental MABA Alliance Products;

 

(ii)                                  To Theravance’s knowledge, none of
Theravance’s current patent rights relating to the Supplemental MABA Alliance
Products are subject to any pending or any threatened re-examination,
opposition, interference or litigation proceedings;

 

(iii)                               Theravance has not received notice from any
Third Party of a claim asserting the invalidity, misuse, unregisterability or
unenforceability of any of Theravance’s current patent rights relating to the
Supplemental MABA Alliance Products, or challenging its right to use or
ownership of any of Theravance’s current patent rights relating to the
Supplemental MABA Alliance Products or Theravance’s know-how relating to the
Supplemental MABA Alliance Products, or making any adverse claim of ownership
thereof;

 

(iv)                              Theravance has not received notice from any
Third Party that any trade secrets or other intellectual property rights of such
Third Party would be misappropriated by the development and reduction to
practice of Theravance’s current patent rights relating to the Supplemental MABA
Alliance Products and Theravance’s know-how relating to the Supplemental MABA
Alliance Products; and

 

(v)                                 Theravance will not at any time during the
Term disclose to any Third Party(ies) and/or publish in the public domain any
proprietary and secret Theravance Know-How relating to the Supplemental MABA
Alliance Products that is proprietary and secret as of the Effective Date of
this Amendment.

 

8.4                               The Parties hereby agree to amend and restate
Section 11.4 of the Agreement with respect to all Alliance Products and
Supplemental MABA Alliance Products as follows:

 

“Each Party hereby covenants and agrees during the Term that it shall carry out
its obligations or activities hereunder in accordance with (i) the terms of this
Agreement; (ii) all applicable Laws (which shall include without limitation
applicable anti-corruption laws); and (iii) GSK’s ‘Prevention of Corruption —
Third Party Guidelines’.”

 

8.5                               Notwithstanding the definition of the term
“Alliance Product” in the Agreement, “Alliance Product” shall include the
Supplemental MABA Alliance Products in Section 11.5.

 

9.                                      Indemnification; Patents and
Inventions.  Notwithstanding the definition of the term “Alliance Product” in
the Agreement, “Alliance Product” shall include the Supplemental MABA Alliance
Products in Articles 12 and 13 of the Agreement, and notwithstanding the
definition of the term “Alliance Program” in the Agreement, “Alliance Program”
shall include the Supplemental MABA Alliance Program in Article 13; provided,
however, that:

 

9.1                               in the context of Supplemental MABA Alliance
Products, (i) references to the “Alliance Program Acceptance Date” shall instead
refer to the Effective Date of this

 

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Amendment and (ii) reference to Article 14 (in Section 13.6) shall refer to
Article 14 of the Agreement as amended by this Amendment.

 

9.2                               For the avoidance of doubt, pursuant to the
fourth sentence of the second paragraph of Section 13.1, GSK shall reimburse
Theravance for all reasonable expenses incurred from the Effective Date to the
Effective Date of this Amendment in connection with OUS patent applications
corresponding to the Supplemental MABA Alliance Products.

 

9.3                               the proviso to Section 13.1.5 of the Agreement
shall be taken to refer also to GSK’s proprietary Gemini technology.

 

10.                               Termination.

 

10.1                        Notwithstanding the definition of the term “Alliance
Product” in the Agreement, “Alliance Product” shall include the Supplemental
MABA Alliance Products in Sections 14.1 and 14.2 of the Agreement; provided,
however, that GSK may terminate the Development and Commercialization of the
Supplemental MABA Alliance Products pursuant to Section 10.2 of this Agreement.

 

10.2                        GSK Right to Terminate Development and
Commercialization of the Supplemental MABA Alliance Products.  GSK shall have
the right to terminate Development or Commercialization of any or all
Supplemental MABA Alliance Products on a country-by-country basis upon the
provision of ninety (90) days written notice to Theravance.  In the event of
termination of the Supplemental MABA Alliance Program under this Section 10.2,
each Supplemental MABA Alliance Product shall be a “Terminated Respiratory
Development Alliance Product” or “Terminated Respiratory Commercialized Alliance
Product” (as the case may be) which GSK shall return to Theravance pursuant to
Section 14.5.2(b) or 14.5.3(b), respectively, of the Agreement and Theravance
shall be entitled to develop and commercialize all compounds from such programs
outside of the Alliance alone or with a Third Party.  For the avoidance of
doubt, the provisions of this Section 10.2 do not affect the rights of GSK to
terminate Development of the MABA Alliance Program pursuant to Section 14.3 of
the Agreement or, after First Commercial Sale of the MABA Alliance Product, to
terminate Commercialization of the MABA Alliance Program pursuant to
Section 14.4 of the Agreement.

 

10.3                        Notwithstanding the definition of the term “Alliance
Product” in the Agreement, “Alliance Product” shall include the Supplemental
MABA Alliance Products in Sections 14.5.1, 14.5.2(b), 14.5.3(b), and 14.6
through 14.8 of the Agreement; provided, however, that:

 

(i)                                     In Section 14.5.2(b) of the Agreement,
any Supplemental MABA Alliance Product shall constitute an “alternative
Respiratory Development Alliance Product” for any other Supplemental MABA
Alliance Product or for any Theravance Compound in the MABA Alliance Program;

 

(ii)                                  The final sentence of
Section 14.5.2(b)(iv) is hereby amended to replace “Terminated Respiratory
Commercialized Alliance Product” with “Terminated Respiratory Development
Alliance Product” and the Parties agree that “GSK Property” shall also include
GSK’s proprietary Gemini technology;

 

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(iii)                               Section 14.5.2(b)(vii) shall not apply to
the Supplemental MABA Alliance Products, but it shall continue to apply to the
Theravance Compound in the MABA Alliance Program;

 

(iv)                              In Section 14.5.3(b) of the Agreement, any
Supplemental MABA Alliance Product shall constitute an “alternative Respiratory
Alliance Product” for any other Supplemental MABA Alliance Product or for any
Theravance Compound in the MABA Alliance Program; and

 

(v)                                 In Section 14.7 of the Agreement, in the
context of Supplemental MABA Alliance Products, the reference to Section 6.2 of
the Agreement shall instead refer to Section 6.2 of this Amendment.

 

10.4                        Notwithstanding the definition of the term “Alliance
Program” in the Agreement, “Alliance Program” shall include the Supplemental
MABA Alliance Program in Article 14.

 

11.                               Reversion Programs.  Notwithstanding
Section 4.2.2 of the Agreement regarding the timing and process pursuant to
which GSK may exercise its Opt-In Right with respect to the two remaining
non-respiratory Additional Discovery Programs (the AT1 Receptor-Neprilysin
Inhibitor (ARNI) program and the Monoamine Reuptake Inhibitor (MARIN) program)
(collectively, the “Remaining Additional Discovery Programs”), GSK hereby
releases Theravance from the Diligent Efforts and funding obligations set forth
in Section 4.1 and Section 4.2 of the Agreement with respect to the Remaining
Additional Discovery Programs, irrevocably waives its Opt-In Right with respect
to the Remaining Additional Discovery Programs and designates each such program
a Reversion Program effective upon the Effective Date of this Amendment. 
Accordingly, on the Effective Date of this Amendment each of the Remaining
Additional Discovery Programs shall revert in full to Theravance and Theravance
shall be entitled to pursue development and commercialization of all compounds
from such programs outside the Alliance alone or with a Third Party.

 

12.                               Investor Relations Planning.  As of the
Effective Date of this Amendment, the Parties shall have agreed upon a public
communications plan regarding this Amendment and the transactions contemplated
hereby.

 

13.                               Supplemental MABA Alliance Program Closing
Condition.  The obligation of each Party to consummate the transactions
contemplated by this Amendment is subject to the satisfaction of the following
condition (the “Supplemental MABA Closing Condition”):  All filings under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 and any other similar laws
that are necessary in any jurisdiction with respect to the transaction
contemplated hereby shall have been made and any required waiting period under
such laws shall have expired or been terminated and any Governmental Authority
in a jurisdiction with an applicable mandatory pre-closing waiting period that
has power under or authority to enforce such laws shall have, if applicable,
approved, cleared or decided neither to initiate proceedings or otherwise
intervene in respect of the transaction contemplated hereby nor to refer the
transaction to any other competent Governmental Authority.  Each Party shall use
good faith efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other Party in doing,

 

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all things necessary, proper or advisable to consummate and make effective the
transaction contemplated by this Amendment, including, but not limited to
satisfaction of the Supplemental MABA Closing Condition and each Party shall
keep the other Party reasonably apprised of the status of matters relating to
the completion of same.  In connection with the foregoing, the Parties shall use
all reasonable efforts to make any such filing(s), if applicable, within five
(5) business days of the Effective Date of this Amendment.  In connection with
the foregoing, the Parties hereby agree to negotiate in good faith to make as
soon as practicable any modification or amendment to this Amendment that is
required by the United States Federal Trade Commission, Department of Justice or
equivalent Governmental Authority, provided that no Party shall be required to
agree to any modification or amendment that, in the reasonable opinion of
such Party’s external legal or financial counsel, would be adverse to such
Party. This Agreement may be terminated by either Party upon written notice any
time after December 31, 2011 if the transactions contemplated by this Agreement
shall not have been consummated by December 31, 2011 due to failure to satisfy
the Supplemental MABA Closing Condition; provided, however, that the
terminating Party shall not have breached in any material respect its
obligations under this Amendment in any manner that shall have been the
proximate cause of, or resulted in, the failure to satisfy the Supplemental MABA
Closing Condition or otherwise to consummate the transactions contemplated by
this Amendment by such date.

 

14.                               Entire Agreement.  This Amendment and the
Agreement constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof and thereof.

 

15.                               Governing Law.  This Agreement shall be
construed, and the respective rights of the Parties determined, according to the
substantive law of the State of Delaware notwithstanding the provisions
governing conflict of laws under such Delaware law to the contrary, except
matters of intellectual property law which shall be determined in accordance
with the intellectual property laws relevant to the intellectual property in
question.  Each Party hereby irrevocably submits to the exclusive jurisdiction
of said Court in respect of any claim relating to the validity, interpretation
and enforcement of this Amendment, and hereby waives, and agrees not to assert,
as a defense in any action, suit or proceeding in which any such claim is made
that it is not subject thereto or that such action suit or proceeding may not be
brought or is not maintainable in such courts, or that the venue thereof may not
be appropriate or that this agreement may not be enforced in or by such courts.

 

16.                               Severability.  In the event of the invalidity
of any provisions of this Amendment or if this Amendment contains any gaps, the
Parties agree that such invalidity or gap shall not affect the validity of the
remaining provisions of this Amendment.  The Parties will replace an invalid
provision or fill any gap with valid provisions which most closely approximate
the purpose and economic effect of the invalid provision or, in case of a gap,
the parties’ presumed intentions.  In the event that the terms and conditions of
this Amendment are materially altered as a result of the preceding sentences,
the Parties shall renegotiate the terms and conditions of this Amendment in
order to resolve any inequities.  Nothing in this Amendment shall be interpreted
so as to require any Party to violate any applicable laws, rules or regulations.

 

17.                               Counterparts.  This Agreement may be executed
in any number of counterparts, each of which shall be an original, but all of
which together shall constitute one instrument.

 

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IN WITNESS WHEREOF, the parties hereby have executed this Amendment on the dates
written below.

 

 

THERAVANCE, INC.

 

 

 

 

Date: October 3, 2011

By:

/s/ Rick E Winningham

 

 

 

 

Name:

Rick E Winningham

 

 

 

 

Title:

Chief Executive Officer

 

 

 

 

 

GLAXO GROUP LIMITED

 

 

 

 

Date: October 3, 2011

By:

/s/ Paul Williamson

 

 

 

 

Name:

Paul Williamson

 

 

 

 

Title:

Corporate Director

 

SIGNATURE PAGE TO AMENDMENT TO STRATEGIC ALLIANCE AGREEMENT

 

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