Exhibit 10.7(a)
Execution Copy
First Amendment to Exclusive License Agreement
Between
University of Arizona and Oncothyreon, Inc.,
Effective 29 July 2004
     This First Amendment (“Amendment”), effective on the date of last
authorized signature affixed hereto (“Amendment Effective Date”), is by and
between the Arizona Board of Regents on behalf of the University of Arizona,
having an office at 888 N. Euclid Avenue, Room 204, Tucson, Arizona 85721
(“LICENSOR”), and Oncothyreon, Inc., having its principal office at 2601 Fourth
Avenue, Suite 500, Seattle, Washington 98121 (“LICENSEE”).
     WHEREAS, LICENSOR is authorized to act in this Amendment on behalf of the
Burnham Institute and the University of Pittsburgh of the Commonwealth System of
Higher Education under an Inter-institutional Agreement effective 9/28/2002; and
     WHEREAS, LICENSOR and Pro1X Pharmaceuticals Corporation, which was
subsequently acquired by LICENSEE, entered into an Exclusive License Agreement,
effective 29 July 2004 (“Agreement”), that, by assignment of the Agreement,
granted to LICENSEE exclusive rights in Licensed Patents described in Sec. 1.2
of the Agreement; and
     WHEREAS, LICENSOR and LICENSEE wish to amend Section 1.2 of the Agreement
to add certain Licensed Patents to the Agreement and to amend Section 4 Fees,
Royalties, Payments And Milestones.
     All defined terms used herein that are not defined herein shall have the
meaning ascribed to them in the Agreement.
     NOW, THEREFORE, the parties agree as follows:

  1.   Sec. 1.2 shall be replaced in its entirety as follows:

  1.2   The LICENSOR wishes to exercise its right to administer and license
valuable intangible property rights in the patent rights described in the
following patent applications and issued patents:

  1.2.1   U.S. Patent No. 5,378,725 issued 1/3/1995 assigned to the Arizona
Board of Regents and Eli Lilly and Company, now abandoned;     1.2.2   U.S.
Patent Application No. 10/245,780 filed 9/16/2002, now U.S. Patent No. 6,703,414
issued 3/09/2004 assigned to Arizona Board of Regents, and The Burnham
Institute;

 

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  1.23   U.S. Patent Application No. 10/245,779 filed 9/16/2002, now U.S. Patent
No. 7,081,475 issued 7/25/2006 assigned to Arizona Board of Regents and
University of Pittsburgh;     1.2.4   U.S. Patent Application No. 11/279,000
filed 4/07/2006, now U.S. Patent No. 7,335,679 issued 2/26/2008 assigned to
Arizona Board of Regents and University of Pittsburgh;     1.2.5   U.S. Patent
Application No. 11/178,553 filed 7/11/2005, now U.S. Patent No. 7,446,124 issued
11/04/2008 assigned to Arizona Board of Regents, Prolx Pharmaceuticals, Inc. and
University of Pittsburgh;     1.2.6.   U.S. Patent Application No. 11/618,036
filed 12/30/2005;     1.2.7   U.S. Patent Application No. 11/858,508 filed
9/20/2007;     1.2.8   U.S. Patent Application No. 12/235,730 filed 9/23/20008  
  1.2.9   U.S. Patent Application No. 12/752,935 filed 4/1/2010

      and any equivalent foreign patents and patent applications, including any
reissues, continuations, divisionals, and extensions, but excluding
continuation-in-part applications, based on the subject matter claimed in or
covered therein.

     2. The last sentence of Section 3.2 is hereby deleted. The remainder of
Section 3.2 shall continue with full force and effect.
     3. Sec. 4 shall be replaced in its entirety as follows:

  4.1   In consideration for the licenses granted herein, LICENSEE has paid in
full an upfront License Fee of Ten Thousand Dollars ($10,000). One half of the
payment was due within fourteen (14) days of the Effective Date; the balance was
due six (6) months after the Effective Date.     4.2   LICENSEE agrees to pay an
Amendment Fee of Thirty Thousand Dollars ($30,000) for each issued patent, added
to Section 1.2 of this Agreement by mutual written consent of the parties after
the Amendment Effective Date; and LICENSEE agrees to pay an Amendment Fee of
Fifteen Thousand Dollars ($15,000) for each patent application, added to
Section 1.2 of this Agreement by mutual written consent of the parties after the
Amendment Effective Date. As such, as of the Amendment Effective Date, an
Amendment Fee of Thirty Thousand Dollars ($30,000) shall be payable by LICENSEE
to LICENSOR within thirty (30) days of LICENSEE’s receipt of the applicable
invoice from LICENSOR. For clarification, the Amendment Fee will be due only for
the

 

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      first issued patent, or first patent application, that covers an invention
that falls outside of patent rights described in Sec. 1.2 above. Additional fees
will not be required for equivalent foreign patents or patent applications, or
for any patents or applications for reissues, continuations, divisional, or
extensions.     4.3.   LICENSEE agrees to cover the costs incurred in connection
with the preparation, filing and prosecution of the Licensed Applications and
the maintenance of Licensed Patents. After the Effective Date, and during the
term of this Agreement, LICENSEE agrees to assume responsibility for future
patent prosecution and maintenance costs as provided in Section 7.1 of this
License Agreement.     4.4   LICENSEE shall pay to LICENSOR milestone royalties
related to Regulatory Approval for Licensed Products as follows:

  (1)   $25,000 within thirty (30) days after the first Regulatory Approval of
an Investigational New Drug (“IND”) or equivalent;     (2)   $50,000 within
thirty (30) days after the first Regulatory Approval of any Phase II or
equivalent tests; and

      With respect to each Licensed Product thereafter:

  (3)   $125,000 within thirty (30) days after the first Regulatory Approval of
any Phase III or equivalent tests and $62,500 within (30) days for each Licensed
Product receiving Regulatory Approval of any Phase III or equivalent test
thereafter; and     (4)   $250,000 within thirty (30) days after the approval of
the first Regulatory Approval of any New Drug Approval (“NDA”) or its equivalent
and $125,000 within thirty (30) days for each Licensed Product receiving
Regulatory Approval of any NDA or its equivalent thereafter.

      LICENSEE may investigate more than one Licensed Product through Phase II
tests without paying more than one set of milestone royalties. If LICENSEE
should choose to submit multiple NDAs covering the same Licensed Product or an
NDA covering more than one Licensed Product, then the milestone royalties
relating to additional Licensed Products are as set forth in 4.4(3) and (4)
above being reduced by fifty percent (50%) of the first amount due. If, after
obtaining Regulatory Approval for an NDA or its equivalent, LICENSEE attempts to
develop additional Licensed Products, milestone royalties relating to such
products will be reduced by fifty percent (50%).

 

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  4.5   In addition, LICENSEE shall pay LICENSOR earned royalties on Net Sales
of Licensed Product sold by LICENSEE or any sublicensee, regardless of tier, in
the country in which the Licensed Product is made, used or sold. The royalty
shall be three percent (3%) of Net Sales for Licensed Products in the field of
diagnostics and four and one-half percent (4.5%) of Net Sales for Licensed
Products in the field of therapeutics.     4.6   LICENSEE shall pay LICENSOR ten
percent (10%) of any SUBLICENSING INCOME. For clarity, no amount shall be due to
LICENSOR under this Section until LICENSEE has recouped the costs incurred by
LICENSEE in connection with the research and development of Licensed Products
prior to the grant of such sublicense; accordingly, the total of such costs, as
reasonably documented by LICENSEE, shall be deducted from SUBLICENSING INCOME
for purposes of calculating the amounts due under this Section. In addition, to
the extent SUBLICENSING INCOME represents an unallocated combined payment for
both a sublicense of the Licensed Patents as well as other intellectual
property, undertakings or subject matter, such SUBLICENSING INCOME from such
sublicensing arrangement for calculating payments due to LICENSOR will be as
reasonably allocated by LICENSEE between such Licensed Patents and such other
intellectual property, undertakings or subject matter. Notwithstanding
Section 16.3, if a dispute between the parties arises as to the amount of
SUBLICENSING INCOME payable to LICENSOR hereunder, then, upon written request by
either party, the matter shall be resolved by final, binding arbitration
conducted by the Judicial Arbitration and Mediation Services, Inc. (or any
successor entity thereto) (“JAMS”) under its rules of arbitration then in effect
by a single arbitrator. Unless otherwise mutually agreed upon by the parties,
the arbitration proceedings shall be conducted in Tucson, Arizona. The parties
shall share equally the cost of the arbitration charged by JAMS. In the event of
such dispute, LICENSEE shall not be deemed in breach of this Agreement by reason
of the disputed amount, unless LICENSEE fails to pay the amount determined to be
due within thirty (30) days after the final written determination of the
arbitrator. Furthermore, payments due as a percentage of SUBLICENSING INCOME may
be offset against any payments due pursuant to this Agreement thereafter.      
  For the purposes of this Agreement, “SUBLICENSING INCOME” means the amount of
any cash payment actually received by LICENSEE during the term of this Agreement
from an unaffiliated third party in consideration for the grant of a sublicense
under the Licensed Patents, excluding the following: (a) reimbursement or
prepayment of costs incurred by LICENSEE or its affiliates in performing
obligations owed to the sublicensee under the applicable sublicense agreement,
including without limitation, in performing

 

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      research, development, manufacture or other activities with respect to
Licensed Products, (b) a reasonable amount of any upfront payments, milestone
payments or other general payments that LICENSEE may set aside to offset any
otherwise unreimbursed costs and expenses that LICENSEE or its affiliates expect
to incur, but have not yet incurred, in the performance of their
responsibilities under the applicable sublicense agreement; (c) proceeds derived
from bona fide debt financing; (d) consideration received for the purchase of an
equity interest in LICENSEE; (e) amounts paid to LICENSEE as dividends or profit
distributions; (f) withholding taxes and other amounts actually withheld or
deducted from amounts paid to LICENSEE; and (g) amounts paid to LICENSEE as
earned royalties on sales by sublicensee(s) or otherwise calculated on the basis
of sales of Licensed Products.     47   LICENSEE shall pay to LICENSOR a minimum
annual royalty of One Hundred Thousand Dollars ($100,000) or twenty-five percent
(25%) of Net Sales for the same period, whichever is less, for the life of
LICENSOR’s Licensed Patents, beginning with the year of the First Commercial
Sate of Licensed Products. For the first year of commercial sales, the
LICENSEE’s obligation to pay the minimum annual royalty will be pro-rated for
the number of months remaining in that calendar year when commercial sales
commence and shall be due as specified under this Article. For subsequent years,
the earned royalty shall be paid to LICENSOR as specified in this Article and
shall be credited against the minimum annual royalty due for the calendar year
in which the minimum payment was made.     4.8   The royalty on sales in
currencies other than U.S. Dollars shall be calculated using the appropriate
foreign exchange rate for such currency quoted by the Wall Street Journal at the
close of business on the last banking day of each calendar quarter. Royalty
payments to LICENSOR shall be in U.S. Dollars.

  4.   Sec. 12.1(b) shall be replaced in its entirety as follows:

  12.1(b)   Subject to the provisions of Section 11.3 hereof, which describes
the only method by which LICENSOR shall be entitled to terminate this Agreement
on the basis of failure to use appropriate diligence, upon any material breach
or default under this Agreement by LICENSEE, LICENSOR may give written notice
thereof to LICENSEE, and LICENSEE shall have sixty (60) days thereafter to cure
such breach or default. If such breach or default is not so cured, LICENSOR may
then in its sole discretion and option (a) terminate this Agreement and the
licenses granted herein or (b) seek such other relief as may be provided by law
in such circumstances by giving written notice thereof to LICENSEE. However, if
LICENSEE disputes such alleged breach within such sixty (60) day period,
LICENSOR shall not have the right to terminate

 

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      this Agreement or seek such other relief as set forth in the previous
sentence unless it has been finally adjudicated and determined by a court of
competent jurisdiction that this Agreement was materially breached, and LICENSEE
fails to comply with its obligations hereunder within sixty (60) days after such
determination.

  5.   Sec. 12.1(e) shall be replaced in its entirety as follows:

  12.1(e)   In the event of termination of this Agreement for any reason, any
and all rights granted LICENSEE hereunder shall cease and terminate, and all
such rights shall revert to LICENSOR. For clarity and notwithstanding anything
herein to the contrary, upon any such termination, any sublicense granted by
LICENSEE hereunder shall survive, provided that upon request by LICENSOR, such
sublicensee promptly agrees in writing to be bound by the applicable terms of
this Agreement. LICENSEE shall diligently thereafter return to LICENSOR, or to
LICENSOR’s designated attorneys, any files or other documents in its possession
or in the possession of its attorneys relating solely to pending or issued
Licensed Patent(s), except that one copy of each such documents may be retained
by LICENSEE and its designee for the purpose of ensuring compliance hereunder.
LICENSEE shall also execute any and all documents necessary to return control of
said Licensed Patent(s) until such time as control has properly been transferred
to LICENSOR. Further, LICENSEE shall immediately return to LICENSOR all research
data, biological and other material (including but not limited to licensed cell
lines), prototypes, process information, clinical data and the like of LICENSOR
in its possession.

  6.   All other terms of the Agreement shall remain the same.

[signature page follows]

 

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     IN WITNESS WHEREOF, a duly authorized officer of each party hereto has
executed this First Amendment in duplicate originals by on the day and year
below written.

          ARIZONA BOARD OF REGENTS   ONCOTHYREON, INC.
On behalf of
THE UNIVERSITY OF ARIZONA
     
 
       
By:  
/s/ Patrick L. Jones, PhD, MBA   By:   /s/ Robert L. Kirkman, MD  
 
       
Name: Patrick L. Jones, PhD, MBA
    Name: Robert L. Kirkman, MD  
Title:   Director, Office of Technology
            Transfer
    Title:   President and CEO
 
       
Date: 27th September 2010
  Date: 24th September 2010