EXHIBIT 10.16

 

CONFIDENTIAL TREATMENT REQUESTED

 

AMENDMENT NO. 5 TO

 

DRUG DISCOVERY COLLABORATION AGREEMENT

 

THIS AMENDMENT NO.5 TO DRUG DISCOVERY COLLABORATION AGREEMENT (“Amendment”),
effective February 18, 2016 (the “Amendment Date”), is by and between Array
BioPharma Inc., a Delaware corporation (“Array”), and Loxo Oncology, Inc., a
Delaware corporation (“Loxo”).

 

WHEREAS, the parties previously entered into that certain Drug Discovery
Collaboration Agreement dated as of July 3, 2013, as amended by Amendment No.1
To Drug Discovery Collaboration Agreement dated November 26, 2013, Amendment
No.2 To Drug Discovery Collaboration Agreement dated April 10, 2014, Amendment
No. 3 To Drug Discovery Collaboration Agreement dated October 13, 2014, and
Amendment No.4 To Drug Discovery Collaboration Agreement dated March 31, 2015
(collectively, the “Agreement”) and the parties wish to amend the Agreement in
certain respects on the terms and conditions set forth herein.

 

WHEREAS, as of the Amendment Date, Array and Loxo have identified LOXO-101, a
Lead Compound directed to Trk, which is currently the subject of clinical
testing by Loxo.

 

WHEREAS, the Parties desire to perform additional research under the Discovery
Program with respect to Trk to identify one or more Backup Lead Compounds (as
defined below) for potential advancement into clinical development.

 

WHEREAS, as of the Amendment Date, Loxo has designated seven (7) Targets for
which research activities have been discontinued and has made the Extension
Payment.

 

WHEREAS, as of the Amendment Date, the Parties have agreed to add a new Target
to Exhibit B.

 

NOW THEREFORE, capitalized terms not defined in this Amendment shall have the
meaning ascribed in the Agreement, and the parties hereby agree as follows:

 

1.                                      “Backup Lead Compound” shall mean an
Active Compound that meets the definition of Section 1.1(ii) that is selected
for clinical development in accordance with Section 2.5.

 

2.                                      Section 2.1 of the Agreement is hereby
deleted and the following substituted therefor:

 

Goals.  The goals of the Discovery Program with respect to the Targets and Trk
are (i) the discovery and optimization of Clinical Candidates directed to each
of the Targets and to Trk, (ii) the identification of one (1) Lead Compound
directed to each of the Targets (iii) the identification of one or more Backup
Lead Compounds, (iv) chemistry, manufacturing and control activities directed to
and manufacture of quantities of the Lead Compounds sufficient to perform a
Phase la (i.e. dose escalation) and a Phase lb (i.e. dose level expansion)
clinical trial [*], respectively, and (v) the conduct of IND-Enabling Studies on
the Trk Lead Compound and one (1) Lead Compound directed to a Target (selected
by Loxo), in all cases pursuant to the Discovery Plan; provided, that Array
shall not be required to perform GLP toxicology testing on the Trk Lead Compound
and a Lead Compound directed to a Target (selected by Loxo) more than once. With
respect to Amendment 5 Triage Targets, an additional goal of the Discovery
Program is to perform early screening and lead identification to identify any of
such Targets that will be the subject of further research to identify Lead
Compounds directed thereto, as described above.

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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3.                                      Section 2.4 of the Agreement is hereby
deleted and the following substituted therefor:

 

Discovery Program Staffing.  During the Discovery Program and subject to Loxo
funding such FTE’s pursuant to Section 5.1, Array shall devote that number of
FTE’s to the conduct of the Discovery Program specified in the Discovery Plan.
The Discovery Plan shall specify [*] Array FTEs at any time during the Discovery
Program Term; provided, however, that during the period beginning on the
Amendment Date and ending on [*], the Discovery Plan shall specify an additional
[*] FTEs (i.e., for a total of [*] FTEs). Thereafter, Loxo shall have the right,
upon [*] months written notice to Array, to increase the number of Array FTEs to
be used under the Discovery Program by [*]FTEs (i.e., for a total of up to [*]
FTEs). If Loxo exercises such right, then Loxo shall also have the right, upon
[*] months written notice to Array, to decrease the number of Array FTEs to be
used under the Discovery Program; provided that the Discovery Plan shall specify
no fewer than [*] Array FTEs at any time during the Discovery Program Term.

 

4.                                      Section 2.5 is hereby deleted and the
following substituted therefor:

 

Selection of Lead Compound or Backup Lead Compound.  Based upon the Clinical
Candidate Criteria and the results of the Discovery Program, during the
Discovery Program Term the JRC may designate a Clinical Candidate for selection
by Loxo as a Lead Compound or Backup Lead Compound. If the JRC determines that a
particular Active Compound does not strictly meet the Clinical Candidate
Criteria, but should be considered as a potential Lead Compound or Backup Lead
Compound, then the JRC may select such Active Compound as a Lead Compound or
Backup Lead Compound. Upon approval by Loxo, the Active Compound or Clinical
Candidate so designated by the JRC shall be deemed the Lead Compound or Backup
Lead Compound, as applicable. Loxo may approve, or withhold its approval of, the
designation of any Active Compound as the Lead Compound or Backup Lead Compound
in Loxo’s sole discretion, whether or not such Active Compound meets the
Clinical Candidate Criteria, and an Active Compound shall not be deemed the Lead
Compound or the Backup Lead Compound unless so approved by Loxo. Any Active
Compound with respect to which Array (pursuant to the Discovery Plan or with JRC
approval) or Loxo initiates IND-Enabling Studies shall be deemed a Lead Compound
or Backup Lead Compound, whether or not so designated.

 

5.                                      Section 2.6 of the Agreement is hereby
deleted and the following substituted therefor:

 

Term of Discovery Program. The Discovery Program Term shall commence on the
Effective Date and shall end on September 30, 2017. Loxo may extend the
Discovery Program Term for up to one (1) additional one (1) year renewal period
by providing written notice to Array at least three (3) months before the end of
the initial Discovery Program Term.

 

6.                                      The list of Targets on Exhibit B is
hereby deleted and the attached Exhibit B substituted therefor. Each of the
other Targets previously listed on Exhibit B have ceased to be Targets under the
Agreement, either as of the date on which Loxo designated such Target for
discontinuation or, if not so designated, as of the Amendment Date.

 

7.                                      Section 2.10 is hereby deleted in its
entirety and the following substituted therefor:

 

2.10.1 Triage Targets.  With respect to at least one (1) of Targets 3, 4, or 5
from Exhibit B (the “Amendment 5 Triage Targets”), Loxo shall, on or before
June 30, 2016, either (i) designate in writing such Amendment 5 Triage
Target(s) as an Identified Target for discontinuation followed by substitution
pursuant to the procedure set forth in Section 2.10.2 below (it being understood
that (a) substitutes may be identified in the discontinuation notice or a
subsequent notice, which subsequent notice may be delivered at any time on or
before the date that is six (6) months before the end of the

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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Discovery Program Term and (b) following such discontinuation and substitution,
six (6) Targets shall continue to be listed in Exhibit B), or (ii) notify Array
in writing that such Loxo wishes the right to file non-provisional patent
applications or publish

 

Collaboration Know-How with respect to such Amendment 5 Triage
Target(s) pursuant to Section 2.10.3 below; in either case, such Amendment 5
Triage Target shall cease to be an Amendment 5 Triage Target (but, in the case
of (ii) above, shall remain a Target under this Agreement).

 

2.10.2 Target Substitution.  On or before the date that is six (6) months before
the end of the Discovery Program Term, but in no case more than two times in any
one calendar year, Loxo may determine that research activities with respect to
any one of the Amendment 5 Triage Targets should be discontinued (for example,
and without limitation, because an Amendment 5 Triage Target has not yielded
sufficient progress, or scientific literature suggests such Amendment 5 Triage
Target is intractable or is not therapeutically relevant or for safety issues)
and want to replace such Amendment 5 Triage Target with a substitute. Upon such
designation, such discontinued Target shall cease to be a Target under this
Agreement, and Exhibit B shall be deemed to be updated accordingly. Upon such
determination by Loxo, Loxo shall provide written notice to Array of the
Amendment 5 Triage Target that Loxo desires to remove from Exhibit B (each such
Target, an “Identified Target”) and will include in such notification up to
three (3) suggested substitutes for each such Identified Target. After receipt
of such notice, Array will promptly inform Loxo whether, as of the date of such
written notice, the addition of such suggested substitute target would not:
(i) violate any agreement that Array has with a Third Party; (ii) add a target
that is the subject of Array’s own active and ongoing research (with existing
commitment and expenditure of resources for such target), was the subject of
previous significant research at Array, or is the subject of drugs in Array’s
clinical development pipeline or marketed product portfolio or is the subject of
drugs that Array has the right to combine with drugs in its proprietary
development pipeline; or (iii) add a target that Array is engaged in active,
ongoing substantial negotiations (i.e., has agreed a term sheet containing
material business terms) with a Third Party with respect to such target. If none
of (i), (ii) or (iii) apply to any given suggested substitute target, such
target shall be deemed an “Available Target”. Loxo may select the suggested
substitutes for an identified Target from, among others, the potential
substitutes listed on Exhibit C hereto. As of the Amendment Date, none of (i),
(ii) or (iii) apply to any of the potential substitute targets listed on
Exhibit C. Six months after the Amendment Date, Loxo shall eliminate at least
three (3) potential substitute targets listed on Exhibit C. Twelve (12) months
after the Amendment 5 Date, none of the current targets on Exhibit C will remain
on Exhibit C. For clarity, a maximum of six (6) total targets can be maintained
on Exhibit C until the six (6) month anniversary of the Amendment Date; and a
maximum of three (3) total targets can be maintained on Exhibit C during the
period between the six (6) month and the twelve (12) month anniversary of the
Amendment Date.

 

Array may also suggest Available Targets to Loxo by providing written notice to
Loxo. Upon submission by either Party of an Available Target, the Parties agree
to perform a feasibility assessment regarding the Available Target(s) to assess
the merits of adding such Target to the Discovery Plan. This feasibility
assessment shall be concluded within ninety (90) days for all Available Targets
identified in Loxo’s or Array’s notice (“Evaluation Period”). Following
completion of such assessment the parties may by mutual agreement decide to
replace any Identified Target with the applicable Available Target, provided
that Loxo shall have a one-time right to override Array’s refusal to replace one
Identified Target with an Available Target upon written notice to Array. Upon
replacement of an Identified Target with an Available Target pursuant to the
foregoing sentence, such Identified Target shall cease

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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to be a Target, the selected Available Target shall deemed a Target for purposes
of this Agreement, and Exhibit B shall be deemed to be updated accordingly. An
Available Target that becomes a Target shall not be subject to substitution for
the term of this Agreement. If a suggested substitute target is not included in
Exhibit B, then the fact that Loxo or Array proposed such target or is otherwise
interested in such target (or molecules directed to such target), shall be
Confidential Information of the Party proposing such target. Without limiting
Section 4.3 of the Agreement, each Party agrees not to conduct (or commit to
conduct) any activity, whether alone or with any Affiliate or Third Party, with
respect to any target proposed by the other Party during the Evaluation Period
other than for the purpose of assessing its chemical feasibility. In addition,
each Party, when proposing a target to the other Party under this
Section 2.10.2, shall not disclose to such other Party any Confidential
Information regarding such target without such other Party’s prior consent.

 

2.10.3 Patent Matters.  On or before the date that is six (6) months before the
end of the Discovery Program Term or any applicable renewal period, Loxo shall
(i) only have the right, at its discretion, to file provisional patent
applications covering the applicable Active Compounds to the Amendment 5 Triage
Targets and will not convert such provisional patent applications to a
non-provisional patent application or otherwise prosecute any non-provisional
patent application covering such Active Compounds and (ii) not publish any
Collaboration Know-How with respect to activities directed to an Amendment 5
Triage Target. If Loxo wishes to (y) file a non-provisional patent application
covering the applicable Active Compounds to a particular Amendment 5 Triage
Target (whether by de novo filing of a non-provisional patent application
covering such Active Compounds or by converting a provisional patent application
covering such Active Compounds to a non-provisional patent application) or
(z) publish any Collaboration Know-How with respect to activities directed to a
particular Amendment 5 Triage Target, Loxo shall provide written notice to Array
of its intent to do so. Upon receipt of such notice, such Target shall remain on
Exhibit B, but it shall no longer be deemed an Amendment 5 Triage Target, and
Sections 2.10.1 and 2.10.2 and the first sentence of this paragraph shall no
longer apply to such Target. For clarity, Loxo shall not be restricted from
filing patent applications, whether provisional or non- provisional, with
respect to Active Compounds to Targets other than Amendment 5 Triage Targets.

 

8.                                      The first paragraph of Section 4.3 is
hereby amended and the following added at the end thereof:

 

In addition, except to the extent required for Array to fulfill its obligations
under this Agreement, with respect to any Target added to Exhibit B after the
Amendment Date, for as long as Loxo (or a sublicensee or other Third Party on
Loxo’s behalf) (a) has an active research and/or development program for such
Target, where such program could result in Array accruing milestone payments and
royalties; or (b) is commercializing a Product for such Target, Array shall not
conduct, participate in, license or fund, directly or indirectly, alone or with
any Affiliate or Third Party, discovery research with respect to a product
comprising a small molecule that, as a primary mechanism of action for
therapeutic or prophylactic effect, binds to and modulates the activity of such
Target.

 

9.                                      Section 5.2.1 of the Agreement is hereby
amended by deleting the last sentence thereof and substituting the following
therefor:

 

For purposes of this Section 5.2.1, the “Array FTE Rate” shall be equal to [*]
per FTE per year.

 

10.                               Within ten (10) days of the Amendment Date,
Loxo shall pay to Array the sum of [*], which amount is non-refundable and
non-creditable against any other payment due under the Agreement.

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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11.                               The first two sentences of Section 5.3.1 of
the Agreement are hereby replaced with the following:

 

5.3.1 Target Milestones. With respect to Lead Compounds directed to a Target,
Loxo shall pay Array the following payments on the first achievement by Loxo or
an Affiliate or a sublicensee of Loxo of the following milestone events, with
such payments due within thirty (30) days after applicable event occurs.
Additionally, with respect to Backup Lead Compounds directed to Trk, Loxo shall
pay Array the following payments on the first achievement by Loxo or an
Affiliate or a sublicensee of Loxo of the milestone events 1 and 2, with such
payments due within thirty (30) days after applicable event occurs. Each payment
shall be due only once for each Lead Compound directed to a Target or Backup
Lead Compound directed to Trk:

 

12.                               Section 5.3.2 of the Agreement is hereby
amended by deleting the last sentence of the introductory paragraph thereof and
substituting the following therefor:

 

Each payment shall be due only once for LOXO-101 and each Backup Lead Compound
directed to Trk:

 

13.                               The Parties acknowledge that, at the request
of Loxo, Array devoted [*] FTEs to the Discovery Program during the month of
January 2016 and has devoted [*] FTEs to the Discovery Program during the month
of February 2016. Loxo shall pay Array for such FTEs at the rate of [*] per FTE
per year.

 

14.                               Miscellaneous.

 

This Amendment shall be effective for all purposes as of the Amendment Date.
Except as expressly modified herein, the Agreement shall continue to remain in
full force and effect in accordance with its terms. This Amendment may be
executed in counterparts, each of which shall be deemed to be an original and
together shall be deemed to be one and the same document.

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first above written.

 

LOXO ONCOLOGY, INC.

ARRAY BIOPHARMA, INC.

 

 

 

 

 

 

By:

/s/ Joshua Bilenker

 

By:

/s/ John Moore

 

 

 

 

 

Name:

Joshua Bilenker

 

Name:

John R. Moore

 

 

 

 

 

Title:

CEO

 

Title:

Vice President and General Counsel

 

 

 

 

 

Date:

2/18/2016

 

Date:

2/18/2016

 

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT B

 

Targets

 

1.                                      The protein family commonly known as[*],
identified with the following SwissProt entries:

 

a)                                     [*]

 

b)                                     [*]

 

c)                                      [*]

 

d)                                     [*]

 

2.                                      The protein commonly known as [*],
identified with the following SwissProt entry:  [*]

 

3.                                      The protein family commonly known as
[*], identified with the following SwissProt entries:

 

a)                                     [*]

 

b)                                     [*]

 

4.                                      The protein commonly known as [*],
identified with the following SwissProt entry:
[*], and the protein commonly known as [*], identified with the following
SwissProt entry:

 

[*]

 

5.                                      The protein commonly known as [*],
identified with the following SwissProt entry:
[*]

 

6.                                      The protein commonly known as [*],
identified with the following SwissProt entry:
[*]

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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CONFIDENTIAL TREATMENT REQUESTED

 

EXHIBIT C

 

Potential Substitutes for Identified Targets

 

1.                                 The protein commonly known as [*], identified
with the following SwissProt entry:
[*]

 

2.                                 The protein commonly known as [*], identified
with the following SwissProt entry:
[*]

 

3.                                      The protein commonly known as [*],
identified with the following SwissProt entry:
[*]

 

4.                                 The protein commonly known as [*], identified
with the following SwissProt entry:
[*]

 

5.                                 The protein commonly known as [*], identified
with the following SwissProt entry:
[*]

 

6.                                 The protein commonly known as [*], identified
with the following SwissProt entry:
[*]

 

[*] Certain information in this document has been omitted and filed separately
with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions.

 

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