Exhibit 10.2

 

***Text Omitted and Filed Separately with the Securities and Exchange Commission
Confidential Treatment Requested Under 17 C.F.R. Sections 200.80(b)(4) and
230.406

 

 

Execution Version

 

 

Collaboration and License Agreement

 

 

 

 

This Agreement is entered into with effect as of the Effective Date (as defined
below)

 

by and between

 

 

F. Hoffmann-La Roche Ltd

 

with an office and place of business at Grenzacherstrasse 124, 4070 Basel,
Switzerland ("Roche Basel")

 

 

and

 

 

Hoffmann-La Roche Inc.

 

with an office and place of business at 150 Clove Road, Suite 8, Little Falls,
New Jersey 07424, U.S.A. ("Roche US"; Roche Basel and Roche US together referred
to as "Roche")

 

on the one hand

 

 

and

 

 

Blueprint Medicines Corporation

 

with an office and place of business at 38 Sidney Street, Suite 200, Cambridge,
Massachusetts 02139,  U.S.A. ("BPM")

 

on the other hand.

 

 

 

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

 

 

Table of Contents

 

 

 

 

Page

 

 

 

 

1.

Definitions

1 

 

1.1

Affiliate

1 

 

1.2

Agreement

2 

 

1.3

Agreement Term

2 

 

1.4

Allocable Overhead

2 

 

1.5

Animal POC

2 

 

1.6

Applicable Law

2 

 

1.7

Backup Compound

2 

 

1.8

BPM Group

2 

 

1.9

BPM IP

2 

 

1.10

BPM Net Sales

3 

 

1.11

BPM Patent Rights

4 

 

1.12

BPM Sole IP

4 

 

1.13

BPM Technology

4 

 

1.14

BPM Territory

4 

 

1.15

Business Day

4 

 

1.16

Calendar Quarter

4 

 

1.17

Calendar Year

4 

 

1.18

CCS Criteria

4 

 

1.19

Change of Control

5 

 

1.20

Change of Control Group

5 

 

1.21

Clinical Study

5 

 

1.22

CLS Achieved

5 

 

1.23

CLS Criteria

5 

 

1.24

Collaboration Compound

5 

 

1.25

Collaboration Compound IP

5 

 

1.26

Collaboration Target

5 

 

1.27

Combination Product

5 

 

1.28

[…***…]

6 

 

1.29

Commercially Reasonable Efforts

6 

 

1.30

Companion Diagnostic

6 

 

1.31

Composition of Matter Claim

6 

 

1.32

Compound Criteria

7 

 

1.33

Compulsory Sublicense Compensation

7 

 

1.34

Confidential Information

7 

 

1.35

Continuation Election Notice

7 

 

1.36

Control

7 

 

1.37

Cover

8 

 

1.38

CRO

8 

 

1.39

Development Costs

8 

 

1.40

Development Plan

8 

 

1.41

Effective Date

9 

 

1.42

EU

9 

 

1.43

Excluded Field

9 

 

1.44

Excluded Targets

9 

 

1.45

Expert

9 

 

1.46

Exploit

9 

 

 

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

 

 

1.47

FBMC

9 

 

1.48

FDA

9 

 

1.49

FDCA

9 

 

1.50

Field

9 

 

1.51

Filing

9 

 

1.52

First Commercial Sale

10 

 

1.53

GAAP

10 

 

1.54

Generic Product

10 

 

1.55

Handle

10 

 

1.56

IFRS

10 

 

1.57

IND

10 

 

1.58

Indication

10 

 

1.59

Initiation

11 

 

1.60

Initiation of GLP Tox Study

11 

 

1.61

Insolvency Event

11 

 

1.62

Invention

11 

 

1.63

JDC

11 

 

1.64

Joint IP

11 

 

1.65

Joint Know-How

11 

 

1.66

Joint Patent Rights

11 

 

1.67

JOT

11 

 

1.68

JRC

12 

 

1.69

Know-How

12 

 

1.70

Lead Nomination

12 

 

1.71

Lead Optimization

12 

 

1.72

Lead Series Identified Criteria

12 

 

1.73

Leftover Targets

12 

 

1.74

Library Compound

12 

 

1.75

Licensed Product

12 

 

1.76

Major Countries

12 

 

1.77

[…***…]

12 

 

1.78

MTD

12 

 

1.79

NDA

13 

 

1.80

Net Sales

13 

 

1.81

Option Data Criteria

13 

 

1.82

Option Data Package

13 

 

1.83

Option Data Package Trigger

14 

 

1.84

Option Exercise Date

14 

 

1.85

Option Exercise Notice

14 

 

1.86

Option Period

14 

 

1.87

Option Right

14 

 

1.88

Other Compound

14 

 

1.89

Out of Pocket Costs

14 

 

1.90

Party

15 

 

1.91

Part 1

15 

 

1.92

Part 2

15 

 

1.93

Patent Rights

15 

 

1.94

Person

15 

 

1.95

Pharmacovigilance Agreement

15 

 

1.96

Phase I Development Costs

15 

 

1.97

Phase I Plan

16 

 

1.98

Phase I Program

16 

 

1.99

Phase I Study

16 

 

 

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

 

 

1.100

Phase II Study

16 

 

1.101

Phase III Study

16 

 

1.102

Pivotal Study

16 

 

1.103

Post-Marketing Study

16 

 

1.104

Product

16 

 

1.105

Program

17 

 

1.106

Regulatory Approval

17 

 

1.107

Regulatory Authority

17 

 

1.108

Research Plan

17 

 

1.109

Research and Development Term

17 

 

1.110

Roche Clinical Compounds

17 

 

1.111

Roche Group

17 

 

1.112

Roche Know-How

18 

 

1.113

Roche Marketed Products

18 

 

1.114

Roche Patent Rights

18 

 

1.115

Roche Sole IP

18 

 

1.116

Roche Territory

18 

 

1.117

ROW

18 

 

1.118

Royalty Term

18 

 

1.119

Sales

19 

 

1.120

Screening

19 

 

1.121

Screening Hit

19 

 

1.122

Sublicensee

20 

 

1.123

Target

20 

 

1.124

Target Hypothesis

20 

 

1.125

Target Validation

20 

 

1.126

Terminated Target

20 

 

1.127

Territory

20 

 

1.128

Third Party

20 

 

1.129

US

20 

 

1.130

US$

20 

 

1.131

Valid Claim

20 

 

1.132

Additional Definitions

21 

2.

Grant of License and Exclusivity

22 

 

2.1

Licenses

23 

 

2.2

Right of First Negotiation and […***…]

25 

 

2.3

Sublicenses

26 

 

2.4

BPM Third Party Payments

27 

 

2.5

Exclusivity

28 

3.

Option of Roche

30 

 

3.1

Option Right

30 

 

3.2

Information Sharing for Option Rights

32 

4.

Research Collaboration

32 

 

4.1

Conduct of the Research

32 

 

4.2

Records; Reports

36 

5.

Conduct of the Phase I Program

36 

 

5.1

Phase I Program

36 

 

5.2

Records; Reports

37 

6.

Diligence

38 

7.

Development

38 

 

7.1

Scope

38 

 

7.2

Management

38 

 

7.3

Development of Program 2 and Program 4

38 

 

 

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

 

8.

Governance

42 

 

8.1

Joint Research Committee

42 

 

8.2

JDC

42 

 

8.3

Members

43 

 

8.4

Responsibilities of the JRC

43 

 

8.5

Responsibilities of the JDC

44 

 

8.6

Meetings

45 

 

8.7

Minutes

45 

 

8.8

Decisions

46 

 

8.9

Information Exchange

46 

 

8.10

Alliance Director

46 

 

8.11

Limitations of Authority

47 

 

8.12

Expenses

47 

 

8.13

Lifetime

47 

 

8.14

Other Committees

47 

9.

Manufacture and Supply

47 

 

9.1

Manufacturing Right

47 

 

9.2

Technology Transfer

48 

 

9.3

Inspection Right

48 

 

9.4

Review of Draft CRO Agreements

48 

10.

Regulatory

48 

 

10.1

Responsibility

48 

 

10.2

Reporting Adverse Events

50 

11.

Commercialization

51 

 

11.1

Responsibility

51 

 

11.2

Updates

51 

 

11.3

Recalls, Market Withdrawals or Corrective Actions.

51 

12.

Payment

52 

 

12.1

Initiation Payment

52 

 

12.2

Pre-Option Exercise Fees

52 

 

12.3

Costs for Work Conducted Under Research Plans

52 

 

12.4

Option Exercise Fee

52 

 

12.5

Phase I Development Cost Share

53 

 

12.6

Development Cost Share

53 

 

12.7

Development Event Payments

54 

 

12.8

Sales Based Event

55 

 

12.9

Royalty Payments

55 

 

12.10

Disclosure of Payments

59 

 

12.11

Only One Royalty

59 

13.

Accounting and reporting

59 

 

13.1

Timing of Payments

59 

 

13.2

Late Payment

59 

 

13.3

Method of Payment

59 

 

13.4

Currency Conversion

59 

 

13.5

Reporting

59 

14.

Taxes

60 

15.

Auditing

61 

 

15.1

Right to Audit

61 

 

15.2

Audit Reports

61 

 

15.3

Over- or Underpayment

62 

16.

Intellectual Property

62 

 

16.1

Ownership of Inventions

62 

 

16.2

Patent Rights Owned Jointly

63 

 

 

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

 

 

16.3

German Statute on Employee’s Inventions

63 

 

16.4

Trademarks and Labeling

63 

 

16.5

Prosecution by BPM

64 

 

16.6

Prosecution of Other Patent Rights

65 

 

16.7

Patent Coordination Team

65 

 

16.8

Unified Patent Court (Europe)

65 

 

16.9

CREATE Act

66 

 

16.10

Infringement

66 

 

16.11

Defense

67 

 

16.12

Common Interest Disclosures

68 

 

16.13

Hatch-Waxman

68 

 

16.14

Patent Term Extensions

69 

17.

Representations and Warranties

69 

 

17.1

Third Party Patent Rights

69 

 

17.2

Ownership of Patent Rights

69 

 

17.3

Inventors

69 

 

17.4

Grants

69 

 

17.5

Authorization

69 

 

17.6

Validity of Patent Rights

70 

 

17.7

Ownership and Validity of Know-How

70 

 

17.8

No Claims

70 

 

17.9

No Conflict

70 

 

17.10

No Other Representations

70 

18.

Indemnification

70 

 

18.1

Indemnification by Roche

70 

 

18.2

Indemnification by BPM

70 

 

18.3

Procedure

71 

19.

Liability

71 

 

19.1

Limitation of Liability

71 

 

19.2

Disclaimer

71 

20.

Obligation Not to Disclose Confidential Information

71 

 

20.1

Non-Use and Non-Disclosure

71 

 

20.2

Permitted Disclosure

72 

 

20.3

Press Releases

72 

 

20.4

Publications

72 

 

20.5

Commercial Considerations

73 

21.

Term and Termination

74 

 

21.1

Commencement and Term

74 

 

21.2

Termination

74 

 

21.3

Consequences of Termination

76 

 

21.4

Survival

81 

22.

Bankruptcy

82 

23.

Miscellaneous

82 

 

23.1

Governing Law

82 

 

23.2

Disputes

82 

 

23.3

Arbitration

82 

 

23.4

Assignment

85 

 

23.5

Debarment

85 

 

23.6

Independent Contractor

85 

 

23.7

Unenforceable Provisions and Severability

85 

 

23.8

Waiver

86 

 

23.9

Appendices

86 

 

23.10

Entire Understanding

86 

 

 

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

 

 

 

23.11

Amendments

86 

 

23.12

Invoices

86 

 

23.13

Notice

86 

 

23.14

Counterparts

87 

 

23.15

Performance by Affiliates

87 

 

23.16

Force Majeure

88 

 

23.17

Compliance with Export Regulations

88 

 

23.18

Interpretation

88 

 

23.19

Waiver of Rule of Construction

88 

 

23.20

Headings

89 

 

 

 

 

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

 

 

Collaboration and License Agreement

 

 

WHEREAS, BPM owns or controls a proprietary uniquely annotated small molecule
library addressing the entire kinome, including well-characterized library
sub-sets suited for screening purposes, and provides significant chemistry and
preclinical development expertise and experience in bringing hits from this
library through lead optimization and GLP Tox Studies to Phase I Study in an
efficient manner; and

 

WHEREAS, BPM has proprietary bioinformatics expertise including algorithms for
mining of genomic information which supports elucidation of new targets or
provides differentiated insights on biology of known targets; and

 

WHEREAS, Roche has expertise in the research, development, manufacture and
commercialization of pharmaceutical products, and owns or controls […***…]; and

 

WHEREAS, Roche is a leader in the field of cancer immunotherapy clinical
development including combination trials; and

 

WHEREAS, Roche and BPM wish to combine their respective expertise to develop
products against three (3) selected targets ([…***…],  […***…] and […***…]) as
well as up to an additional two (2) targets selected from a collaboratively
shared screening and target validation effort based on BPM Technology (defined
below) and Roche’s proprietary assays and know-how in cancer immunotherapy; and

 

WHEREAS, BPM is willing to grant to Roche rights to opt-into each of these five
(5) programs at a defined point in time and to use BPM’s intellectual property
rights to Exploit Collaboration Compounds, Products and Licensed Products in the
Territory for use in the Field (as such terms are respectively defined below),
as contemplated herein; and

 

WHEREAS, Roche and BPM agree that BPM will perform certain activities to Exploit
the Collaboration Compounds, Products and Licensed Products for use in the Field
(as such terms are respectively defined below).

 

NOW, THEREFORE, in consideration of the mutual covenants and promises contained
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereto, intending to
be legally bound, do hereby agree as follows:

 

1.    Definitions

As used in this Agreement, the following terms, whether used in the singular or
plural, shall have the following meanings:

 

1.1    Affiliate

The term “Affiliate” shall mean, with respect to a Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with such Person. As used in this definition of “Affiliate,” the term “control”
shall mean the direct or indirect ownership of more than fifty percent

 

1

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

 

(>50%) of the stock having the right to vote for directors thereof or the
ability to otherwise control the management of such Person whether through the
ownership of voting securities, by contract, resolution, regulation or
otherwise. Anything to the contrary in this paragraph notwithstanding, neither
[…***…] and/or its subsidiaries (if any) nor […***…] and/or its subsidiaries (if
any) shall be deemed as Affiliates of Roche unless Roche provides written notice
to BPM of its desire to include […***…] and/or their respective subsidiaries (as
applicable) as Affiliate(s) of Roche.

 

1.2    Agreement

The term “Agreement” shall mean this document including any and all appendices
and amendments to it as may be added and/or amended from time to time in
accordance with the provisions of this Agreement.

 

1.3    Agreement Term

The term “Agreement Term” shall mean the period of time commencing on the
Effective Date and, unless this Agreement is terminated sooner as provided in
Article 21, expiring on the date when no royalty or other payment obligations
under this Agreement are or will become due.

 

1.4    Allocable Overhead

The term “Allocable Overhead” shall mean costs incurred by a Party or for its
account which are attributable to a Party’s supervisory or support services /
functions, occupancy costs, corporate bonus (to the extent not charged directly
to department), and its payroll, information systems, human relations or
purchasing functions and which are allocated to company departments based on
space occupied or headcount or other activity-based method.  Allocable Overhead
shall not include any costs attributed to a Party’s direct personnel costs or
Out of Pocket Costs or to general corporate activities including, by way of
example, executive management, investor relations, business development, legal
affairs and finance.

 

1.5    Animal POC

The term “Animal POC” shall mean the demonstration of efficacy of Collaboration
Compounds in at least one animal model performed by or on behalf of Roche during
Lead Optimization.

 

1.6    Applicable Law

The term “Applicable Law” shall mean any law, statute, ordinance, code, rule or
regulation that has been enacted by a government authority (including without
limitation, any Regulatory Authority) and is in force as of the Effective Date
or comes into force during the Agreement Term, in each case to the extent that
the same is applicable to the Parties’ respective rights or the performance by
the Parties of their respective obligations under this Agreement.

 

1.7    Backup Compound

The term “Backup Compound” shall mean, on a Collaboration
Target-by-Collaboration Target basis, any Collaboration Compound made under the
Research Plan for a given Collaboration Target that is intended to replace a
more advanced Collaboration Compound in the event development of such more
advanced Collaboration Compound is terminated, […***…].

 

1.8    BPM Group

The term “BPM Group” shall mean collectively BPM, its Affiliates and its
Sublicensees.

 

1.9    BPM IP

The term “BPM IP” shall mean (a) Know-How and Patent Rights that BPM and its
Affiliates Control (i) as of the Effective Date, and/or (ii) during the
Agreement Term to the extent used by BPM or its Affiliates to perform activities
under this Agreement (but excluding Supplemental Studies

 

2

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

 

unless Roche opts-in pursuant to Section 7.2), (b) BPM’s interest in any Joint
IP, and (c) BPM Sole IP, and in each case ((a) through (c)) that are necessary
or useful for the Exploitation of Collaboration Compounds, Products or Licensed
Products, but excluding BPM Technology, Collaboration Compound IP and Other
Compound IP. The foregoing Patent Rights in the BPM IP shall be listed in
Appendix 1.9 of this Agreement and updated from time to time (but failure to
list same will not exclude them as BPM IP).  For clarity, after any Change of
Control of BPM, no Know-How or Patent Rights of any BPM Affiliate that becomes a
BPM Affiliate after the Change of Control of BPM shall become “BPM IP” hereunder
unless such Know-How or Patent Rights are intentionally used by BPM in BPM’s
performance of research, development or commercialization activities under this
Agreement. 

 

1.10   BPM Net Sales

The term “BPM Net Sales” shall mean the net sales on behalf of BPM and any of
its Affiliates or Sublicensees for any Licensed Product sold to Third Parties
(other than Sublicensees) in bona fide, arms-length transactions, as determined
in accordance with GAAP, less the following deductions:  (a) normal trade and
cash discounts, (b) amounts repaid or credited by reasons of defects,
rejections, recalls or returns, (c) rebates and chargebacks to customers and
Third Parties (including Medicare, Medicaid, Managed Healthcare and similar
types of rebates), (d) any amounts recorded in gross revenue associated with
goods provided to customers for free, (e) amounts provided or credited to
customers through coupons and other discount programs, (f) delayed ship order
credits, discounts or payments related to the impact of price increases between
purchase and shipping dates, (g) fee for service payments to customers for any
non-separable services (including compensation for maintaining agreed inventory
levels and providing information), (h) a fixed deduction of […***…] for direct
expenses related to the sales of Licensed Product(s) for distribution and
warehousing expenses and uncollectible amounts on previously sold Licensed
Products, (i) taxes and any other governmental charges or levies imposed upon or
measured by the Exploitation of a Licensed Product (excluding income or
franchise taxes) as well as government mandated fees and taxes and other
government charges, including any fees, taxes or other charges specifically
attributable to a Licensed Product that become due in connection with any
healthcare reform, change in government pricing or discounting schemes, or other
action of a government or regulatory body, and (j) other reductions or
specifically identifiable amounts deducted for reasons similar to those listed
above in accordance with GAAP.  For clarity, no deduction may be taken more than
once in the calculation of BPM Net Sales.

 

In the case of any sale or other disposal of a Licensed Product between or among
BPM and any of its Affiliates or Sublicensees, for resale, BPM Net Sales shall
be calculated only on the value charged or invoiced on the first arm’s-length
sale thereafter to a Third Party (other than a Sublicensee).  In the case of any
sale that is not invoiced or is delivered before invoice, BPM Net Sales shall be
calculated at the time all the revenue recognition criteria under GAAP are
met.  Notwithstanding the foregoing, the following will not be included in BPM
Net Sales: (i) sales between or among BPM and its Affiliates or Sublicensees
(but BPM Net Sales will include sales to the first Third Party (other than a
Sublicensee) by BPM or its Affiliates or Sublicensees); (ii) samples of Licensed
Product used to promote additional BPM Net Sales, in amounts consistent with
normal business practices of BPM or its Affiliates or Sublicensees; and (iii)
disposal or use of Licensed Products in Clinical Studies or under compassionate
use, patient assistance, named patient use, or test marketing programs or
non-registrational studies or other similar programs or studies where the
Licensed Product is supplied without charge or at the actual manufacturing cost
thereof (without allocation of indirect costs or any mark-up).

 

3

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

 

 

With respect to a Combination Product, BPM Net Sales of such Combination Product
eligible for royalties shall be adjusted to subtract the Relative Commercial
Value of any Other Component of such Combination Product in accordance with
Section 12.9.4.

 

To the extent that BPM or its Affiliates or Sublicensees receives consideration
other than or in addition to cash upon the sale of a Licensed Product, or the
performance of any services (including preliminary treatments or follow-up
treatments) related to such Licensed Product, BPM Net Sales will include the
fair market value of such additional consideration.

 

1.11   BPM Patent Rights

The term “BPM Patent Rights” shall mean all Patent Rights contained in the BPM
IP.

 

1.12   BPM Sole IP

The term “BPM Sole IP” shall mean all Patent Rights and Know-How arising from a
BPM Invention.

 

1.13   BPM Technology 

The term “BPM Technology” shall mean BPM’s proprietary library (in the form as
of the Effective Date or during the Research and Development Term) and related
Patent Rights and Know-How against the kinome and its annotation.

 

1.14   BPM Territory

The term “BPM Territory” shall mean, with respect to Program 2 and Program 4,
the US.

 

1.15   Business Day

The term “Business Day” shall mean 9:00am to 5:00pm local time on a day other
than a Saturday, Sunday or bank or other public or federal holiday in
Switzerland or Massachusetts, US.

 

1.16   Calendar Quarter

The term “Calendar Quarter” shall mean each period of three (3) consecutive
calendar months, ending March 31, June 30, September 30, and December 31.

 

1.17   Calendar Year

The term “Calendar Year” shall mean the period of time beginning on January 1
and ending December 31, except for the first year which shall begin on the
Effective Date and end on December 31.

 

1.18   CCS Criteria

The term “CCS Criteria” shall mean the criteria set forth in Appendix 1.18 of
this Agreement that constitute clinical candidate selection, unless such
criteria are modified by the JRC.

 

1.19   Change of Control

The term “Change of Control” shall mean, with respect to a Party: (a) the
acquisition (in a transaction or series of related transactions) by any Third
Party, together with its Affiliates, of beneficial ownership of fifty percent
(50%) or more of the then outstanding securities or combined voting power of
such Party, other than acquisitions by employee benefit plans sponsored or
maintained by such Party; (b) the consummation of a business combination
(including a merger or consolidation) involving such Party with a Third Party,
unless, following such business combination, the stockholders of such Party
immediately prior to such business combination beneficially own directly or
indirectly more than fifty percent (>50%) of the then outstanding securities or
combined voting power of the surviving entity or the parent of the surviving
entity immediately after such business combination; or (c) the sale or other
transfer to a Third Party of

 

 

4

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

 

all or substantially all of such Party’s and its Affiliates’ assets or business
relating to the subject matter of the Agreement.

 

1.20   Change of Control Group

The term “Change of Control Group” shall mean with respect to a Party, the
person or entity, or group of persons or entities, that is the acquirer of, or a
successor to, a Party in connection with a Change of Control, together with
affiliates of such persons or entities that are not Affiliates of such Party
immediately prior to the completion of such Change of Control of such Party.

 

1.21   Clinical Study

The term “Clinical Study” shall mean any Phase I Study, Phase II Study, Phase
III Study, Pivotal Study, Post-Marketing Study, Supplemental Study or other
study in humans to obtain information regarding the product, including
information relating to the safety, tolerability, pharmacological activity,
pharmacokinetics, dose ranging or efficacy of the product, as applicable.

 

1.22   CLS Achieved

The term “CLS Achieved” shall mean that a Product contains a Collaboration
Compound meeting the CLS Criteria, unless such criteria are modified by the JRC.

 

1.23   CLS Criteria

The term “CLS Criteria” shall mean the criteria set forth in Appendix 1.23 of
this Agreement that constitute clinical lead selection, unless such criteria are
modified by the JRC.

 

1.24   Collaboration Compound

The term “Collaboration Compound” shall mean any compound made under the
Research Plan for a given Collaboration Target that satisfies the Compound
Criteria. A Collaboration Compound includes all salts, polymorphs, metabolites,
prodrugs, isomers, enantiomers and stereoisomers of such Collaboration Compound,
in each case that satisfies the Compound Criteria. 

 

1.25   Collaboration Compound IP

The term “Collaboration Compound IP” shall mean all Patent Rights and Know-How
Covering Collaboration Compounds and that is generated by either Party
individually or both Parties jointly pursuant to a Research Plan or Phase I
Plan. 

 

1.26   Collaboration Target

The term “Collaboration Target” shall mean (i) each of […***…] (Uniprot
[…***…]), […***…]  ([…***…] is Uniprot […***…] and […***…] is Uniprot […***…])
and […***…] (Uniprot […***…]) and (ii) each of the Targets selected from the
Pool to pursue in Part 2 or mutually selected by the Parties in Part 2 […***…],
for each of (i) and (ii) subject to exchange of such Target pursuant to Sections
4.1.5 or 4.1.6, as applicable.  For clarity, the Collaboration Targets shall not
include any Excluded Targets, Leftover Targets or Terminated Targets.

 

1.27   Combination Product

The term “Combination Product” shall mean

 

(a)  a single pharmaceutical formulation (whether co-formulated or administered
together via the same administration route) containing as its active ingredients
both a Collaboration Compound and one or more other therapeutically or
prophylactically active ingredients (each an “Other Component”), or

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(b)  a combination therapy comprised of a Collaboration Compound and one or more
Other Component(s), whether priced and sold in a single package containing such
multiple products, packaged separately but sold together for a single price, or
sold under separate price points but labeled for use together.

 

in each case, including all dosage forms, formulations, presentations, and
package configurations.  Drug delivery vehicles, adjuvants and excipients will
not be deemed to be “active ingredients”, except in the case where such delivery
vehicle, adjuvant or excipient is recognized by the FDA as an active ingredient
in accordance with 21 C.F.R. 210.3(b)(7).  All references to Products or
Licensed Products in this Agreement shall be deemed to include Combination
Products.

 

1.28   […***…]

 

1.29   Commercially Reasonable Efforts

The term “Commercially Reasonable Efforts” shall mean, with respect to the
performance of an obligation under this Agreement, such level of efforts and
resources consistent with the efforts Roche or BPM, as applicable, devotes to a
similar obligation at the same stage of research, development or
commercialization, as applicable, for its own internally developed
pharmaceutical products in a similar area with similar market potential, at a
similar stage of their product life, taking into account the existence of other
competitive products in the market place or under development, the proprietary
position of the product, the regulatory structure involved, the anticipated
profitability of the product and other relevant factors. It is understood that
such level of efforts or resources may change from time to time based upon
changing scientific, business and marketing and return on investment
considerations; provided, however, that the payments required to be made by a
Party to the other Party pursuant to this Agreement will not be taken into
account.

 

However, Roche (and its Affiliates) does not always seek to market its own
products in every country or seek to obtain Regulatory Approval in every country
or for every potential Indication. As a result, the exercise of diligence by
Roche under this standard is to be determined by judging Roche’s efforts in (i)
the Major Countries, taken as a whole, and (ii) the Territory excluding the
Major Countries, taken as a whole.

 

1.30   Companion Diagnostic

The term “Companion Diagnostic” shall mean any product or service that:

(a)  identifies a person having a disease or condition, or a molecular genotype
or phenotype that predisposes a person to such disease or condition, for which a
Product or Licensed Product could be used to treat and/or prevent such disease
or condition;

(b)  defines the prognosis or monitors the progress of a disease or condition in
a person for which a Product or Licensed Product could be used to treat and/or
prevent such disease or condition;

(c)  is used to select a therapeutic or prophylactic regimen, wherein at least
one (1) potential therapeutic or prophylactic regimen involves a Product or
Licensed Product, and where the selected regimen is determined, based on the use
of such product or service, to likely be effective and/or to be safe for a
person; and/or

(d)  is used to confirm a Product or Licensed Product’s biological activity
and/or to optimize dosing or the scheduled administration of a Product or
Licensed Product.

 

1.31   Composition of Matter Claim 

The term "Composition of Matter Claim" shall mean, for a given Licensed Product
in a given country of the Territory, a Valid Claim of the Collaboration Compound
IP or BPM IP or any Patent Rights owned or in-licensed by Roche or its
Affiliates (only in the case of sales of Licensed Product

 

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in the BPM Territory for Program 2 and Program 4) that Covers the composition of
matter of the Collaboration Compound that is included in such Licensed Product,
in whole or as a component thereof.

 

1.32   Compound Criteria

The term “Compound Criteria” shall mean the criteria, on a Collaboration
Target-by-Collaboration Target basis, that are (i) determined by the JRC, (ii)
approved by the Parties, and (iii) documented as part of the applicable Research
Plan.

 

1.33   Compulsory Sublicense Compensation

The term “Compulsory Sublicense Compensation” shall mean, for a given country or
region, the compensation paid to the Roche Group or the BPM Group (as
applicable) by a Third Party (a “Compulsory Sublicensee”) under a license or
sublicense of any applicable Patent Rights granted to the Compulsory Sublicensee
(the “Compulsory Sublicense”) through the order, decree or grant of a
governmental authority having competent jurisdiction in such country or region,
authorizing such Third Party to manufacture, use, sell, offer for sale, import
or export a Licensed Product in such country or region.

 

1.34   Confidential Information

The term “Confidential Information” shall mean any and all information, data or
know-how (including Know-How), whether technical or non-technical, oral or
written, that is disclosed by one Party or its Affiliates (“Disclosing Party”)
to the other Party or its Affiliates (“Receiving Party”). Confidential
Information shall not include any information, data or know-how that:

(i)    was generally available to the public at the time of disclosure, or
becomes available to the public after disclosure by the Disclosing Party other
than through fault (whether by action or inaction) of the Receiving Party or its
Affiliates,

(ii)    can be evidenced by written records to have been already known to the
Receiving Party or its Affiliates prior to its receipt from the Disclosing
Party,

(iii)   is obtained by the Receiving Party at any time lawfully from a Third
Party under circumstances permitting its use or disclosure,

(iv)   is developed independently by the Receiving Party or its Affiliates as
evidenced by written records other than through knowledge of Confidential
Information, or

(v)    is approved in writing by the Disclosing Party for release by the
Receiving Party.

 

The terms of this Agreement shall be considered Confidential Information of the
Parties.

 

1.35   Continuation Election Notice

The term “Continuation Election Notice” shall mean the notice BPM provides to
Roche under Section 21.3.1 describing (i) BPM’s bona fide intention(s) to
continue ongoing development and commercialization of Licensed Product(s) and
(ii) BPM’s request for Roche’s continuation of activities during the termination
period or transfer of the data, material and information relating to the
Licensed Product(s) in accordance with Section 21.3.1.

 

1.36   Control

The term “Control” shall mean (as an adjective or as a verb including
conjugations and variations such as “Controls” “Controlled” or “Controlling”)
(a) with respect to Patent Rights and/or Know-How, the possession by a Party of
the ability to grant a license or sublicense of such Patent Rights and/or
Know-How without violating the terms of any agreement or arrangement between
such Party and any other party and (b) with respect to proprietary materials,
the possession by a Party of the ability to supply such proprietary materials to
the other Party as provided herein without violating the terms of any agreement
or arrangement between such Party and any other party or

 

7

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without being obligated to pay any royalties or other consideration therefor,
except for that which BPM or its Affiliates in-licenses and under which Roche
elects to take a sublicense and agrees to make the associated payments pursuant
to Section 2.4 which shall be considered under the Control of BPM or its
Affiliates.    

 

1.37   Cover

The term “Cover” shall mean (as an adjective or as a verb including conjugations
and variations such as “Covered,” “Coverage” or “Covering”) that the
Exploitation of a given compound, formulation or product would infringe a Valid
Claim in the absence of a license under or ownership in the Patent Rights to
which such Valid Claim pertains. The determination of whether a compound,
formulation, process or product is Covered by a particular Valid Claim shall be
made on a country-by-country basis.

 

1.38   CRO

The term “CRO” shall mean a contract research organization or a contract
manufacturing organization, a list of approved CROs is attached as Appendix
1.38, as such appendix may be amended or restated from time to time in
accordance with the terms of this Agreement.

 

1.39   Development Costs

The term “Development Costs” shall mean as to each Collaboration Target in the
Field in the Territory, those (i) costs and expenses directly incurred
(including personnel costs and Allocable Overhead associated with employees and
contractors of a Party) with the performance of any clinical development
activities (other than Phase I Studies) for Collaboration Compounds, Products or
Licensed Products for such Collaboration Target, (ii) fees charged by Third
Party service providers and other Out of Pocket Costs reasonably incurred in
connection with the performance of any Clinical Study (other than Phase I
Studies) with respect to Collaboration Compounds, Products, Licensed Products,
or Companion Diagnostics for such Collaboration Target, and (iii) all costs
associated with research or development of Companion Diagnostics, in each case,
that are recorded as an expense in accordance with IFRS or GAAP as applicable
and consistently applied. In addition, Development Costs shall include (A) the
cost of additional studies on the toxicological, pharmacokinetic, metabolic or
clinical aspects of such Product or Licensed Product conducted by individual
investigators or consultants and (B) expenses for data management, statistical
designs and studies, document preparation, and other expenses associated with
the clinical testing program for additional studies. For clarity, Development
Costs for each Product or Licensed Product shall include (a) manufacturing and
supply costs and expenses associated with such Product or Licensed Product, and
(b) costs related to preparing the initial regulatory dossier for such Product
or Licensed Product.  All manufacturing and supply costs and expenses for Roche
Clinical Compounds and Roche Marketed Products shall be at Roche’s sole expense.

 

For clarity, Development Costs shall exclude (A) capital expenditures, (B) Phase
I Development Costs, and (C) for Program 2 and Program 4, any costs and expenses
associated with Supplemental Studies (other than Supplemental Studies that a
Party opts-in to pursuant to Section 7.2).

 

1.40   Development Plan

The term “Development Plan” shall mean, for each Program, the plan for the
clinical development of Licensed Products for such Program in the Field in the
Territory, which plan shall include a budget for each of Program 2 and Program 4
and the planned Clinical Studies for the […***…] Label Pursuits for each of
Program 2 and Program 4.

 

 

8

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1.41   Effective Date

The term “Effective Date” shall mean March 14, 2016.

 

1.42   EU

The term “EU” shall mean the European Union and all its then-current member
countries.

 

1.43   Excluded Field

The term “Excluded Field” shall mean […***…].

 

1.44   Excluded Targets

The term “Excluded Targets” shall mean the Targets listed in Appendix 1.44 of
this Agreement.

 

1.45   Expert

The term “Expert” shall mean a person with no less than ten (10) years of
pharmaceutical industry experience and expertise having occupied at least one
senior position within a large pharmaceutical company relating to drug
discovery, product development (in the case of Section 2.5.2) or
commercialization and/or licensing (in the case of Section 12.9.4) but excluding
any current or former employee or consultant of either Party or its Affiliates.
Such person shall be fluent in the English language.

 

1.46   Exploit

The term “Exploit” shall mean (including conjugations and variations such as
“Exploiting” or “Exploitation”) to research, have researched, develop, have
developed, register, have registered, use, have used, make, have made, import,
have imported, export, have exported, market, have marketed, distribute, have
distributed, sell, have sold and offer for sale and have offered for sale,
including all research, development, manufacturing and commercialization
activities.

 

1.47   FBMC

The term “FBMC” shall mean the sum of (a) the cost of goods produced, determined
in accordance with IFRS or GAAP guidelines as consistently applied by Roche or
BPM in the ordinary course of its business, including direct labor, material,
payments to Third Parties for costs incurred and product testing costs of
Collaboration Compounds, Products or Licensed Products, as well as Allocable
Overhead, and (b) any other Out of Pocket Costs borne by Roche or BPM for the
packaging, transport, customs clearance, and storage of Collaboration Compounds,
Products or Licensed Products (e.g., containers, freight, duties, insurance and
warehousing).

 

1.48   FDA

The term “FDA” shall mean the Food and Drug Administration of the United States
of America.

 

1.49   FDCA

The term “FDCA” shall mean the Food, Drug and Cosmetics Act.

 

1.50   Field

The term “Field” shall mean any use other than the Excluded Field.

 

1.51   Filing

The term “Filing” shall mean the filing of an application by the FDA as defined
in the FDCA and applicable regulations, or the equivalent application to the
equivalent agency in any other country or group of countries, the official
approval of which is required before any lawful commercial sale or marketing of
Licensed Products.

 

 

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1.52   First Commercial Sale

The term “First Commercial Sale” shall mean, on a country-by-country and
Licensed Product-by-Licensed Product basis, the first commercial sale of a
Licensed Product to a Third Party by the Roche Group or by the BPM Group, as
applicable, in such country following the receipt of any Regulatory Approval
required for the sale of such Licensed Product in such country, or if no such
Regulatory Approval is required, the date of the first commercial sale of a
Licensed Product in such country to a Third Party by (i) the Roche Group in such
country or (ii) the BPM Group in the BPM Territory, as applicable.

 

1.53   GAAP

The term “GAAP” shall mean US Generally Acceptable Accounting Principles.

 

1.54   Generic Product

The term “Generic Product” shall mean, with respect to a particular Licensed
Product and on a country-by-country basis, a generic pharmaceutical product that
is marketed for sale by a Third Party (not licensed, supplied or otherwise
permitted by the Roche Group or the BPM Group) and that: (i) (a) contains the
same or substantially the same active ingredient as the Collaboration Compound
in such Licensed Product; and (b) is approved for use in such country by a
Regulatory Authority through an Abbreviated New Drug Application as defined in
the FDCA, and the regulations promulgated thereunder, pursuant to Article 10.1
of Directive 2001/83/EC of the European Parliament and Council of 6 November
2001, or any enabling legislation thereof, or pursuant to any similar
abbreviated route of approval in such country; or (ii) (a) contains the same or
substantially the same active ingredient as the Collaboration Compound in such
Licensed Product; and (b) is approved for use in such country by a Regulatory
Authority through a regulatory pathway referencing clinical data first submitted
by the Roche Group or the BPM Group for obtaining Regulatory Approval for such
Licensed Product.

 

1.55   Handle

 

The term “Handle” shall mean preparing, filing, prosecuting (including
interference and opposition proceedings) and maintaining (including
interferences, reissue, re-examination, pre- and post-grant reviews,
inter-parties reviews, derivation proceedings and opposition proceedings, patent
term adjustment and extensions (including those arising from Regulatory
Approvals), supplementary protection certificates and other similar
proceedings), but not with respect to any infringement or other enforcement
activities.

 

1.56   IFRS

The term “IFRS” shall mean International Financial Reporting Standards.

 

1.57   IND

The term “IND” shall mean an application as defined in the FDCA and applicable
regulations promulgated by the FDA, or the equivalent application to the
equivalent agency in any other country or group of countries, the filing of
which is necessary to commence clinical testing of the Products and/or Licensed
Products in humans.

 

1.58   Indication 

The term “Indication” shall mean a disease (i) for which the Licensed Product is
indicated for treatment and (ii) that is described in the Licensed Product label
as required by the Regulatory Approval granted by the applicable Regulatory
Authority.  […***…].

 

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1.59   Initiation

The term “Initiation” shall mean the date that a human is first dosed with the
Product or Licensed Product, as applicable, in a Clinical Study approved by the
respective Regulatory Authority.

 

1.60   Initiation of GLP Tox Study

The term “Initiation of GLP Tox Study” shall mean the date of the approval by
the JRC of the final protocol for a study of the relationship between dose and
its effects on the exposed animal, where (i) the study is to be conducted in
accordance with Good Laboratory Practice standards and (ii) the study has been
designed in expectation that the results may support establishment of a safe
starting dose of the Product in human clinical studies (a “GLP Tox Study”).

 

1.61   Insolvency Event

The term “Insolvency Event” shall mean circumstances under which a Party (i) has
a receiver or similar officer appointed over all or a material part of its
assets or undertaking; (ii) passes a resolution for winding-up (other than a
winding-up for the purpose of, or in connection with, any solvent amalgamation
or reconstruction) or a court makes an order to that effect or a court makes an
order for administration (or any equivalent order in any jurisdiction);
(iii) enters into any composition or arrangement with its creditors (other than
relating to a solvent restructuring); (iv) ceases to carry on business; or
(v) is unable to pay its debts as they become due in the ordinary course of
business.

 

1.62   Invention

The term “Invention” shall mean an invention that is conceived in connection
with any activity carried out pursuant to this Agreement. Under this definition,
but subject to Section 16.1, an Invention may be made by employees, consultants
or contractors of BPM solely or jointly with a Third Party (a “BPM Invention”),
by employees, consultants or contractors of the Roche Group solely or jointly
with a Third Party (a “Roche Invention”), or jointly by employees, consultants
or contractors of BPM and employees, consultants or contractors of the Roche
Group with or without a Third Party (a “Joint Invention”).

 

1.63   JDC

The term “JDC” shall mean the joint development committee that oversees all
activities pursuant to the Phase I Plans and all clinical development of
Licensed Products by the Parties after exercise of an Option Right, and is
described in Section 8.2.

 

1.64   Joint IP

The term “Joint IP” shall mean all Joint Patent Rights and Joint Know-How.

 

1.65   Joint Know-How

The term “Joint Know-How” shall mean all Know-How that is conceived jointly by
the Parties or their Affiliates or their Sublicensees in connection with any
activity carried out pursuant to this Agreement.  For clarity, Joint Know-How
shall include all Know-How within the Biomarker IP.

 

1.66   Joint Patent Rights

The term “Joint Patent Rights” shall mean all Patent Rights arising from a Joint
Invention.  For clarity, Joint Patent Rights shall include all Patent Rights
within the Biomarker IP.

 

1.67   JOT 

The term “JOT” shall mean a joint operating team if established by the JRC under
Section 8.4 or the JDC under Section 8.5.

 

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1.68   JRC

The term “JRC” shall mean the joint research committee that oversees all
activities under the Research Plans, and is described in Section 8.1.

 

1.69   Know-How

The term “Know-How” shall mean data, knowledge and information, including
materials, samples, chemical manufacturing data, toxicological data,
pharmacological data, preclinical data, assays, platforms, formulations,
specifications, quality control testing data, that are necessary or useful for
the discovery, manufacture, development or commercialization of Products and/or
Licensed Products.

 

1.70   Lead Nomination

The term “Lead Nomination” shall mean the preclinical development activities
performed for each Collaboration Target at the beginning of Part 1 and for
Collaboration Targets selected in Part 2 after Target Validation with the goal
to identify Collaboration Compounds which satisfy the Lead Series Identified
Criteria.

 

1.71   Lead Optimization

The term “Lead Optimization” shall mean the preclinical development activities
performed for each Collaboration Target following Lead Nomination, with the goal
to identify Collaboration Compounds suitable for GLP Tox Studies and meeting CCS
Criteria.

 

1.72   Lead Series Identified Criteria

The term “Lead Series Identified Criteria” shall mean the lead series identified
criteria set forth in Appendix 1.72 of this Agreement, unless such criteria are
modified by the JRC.

 

1.73   Leftover Targets

The term “Leftover Targets” shall mean those Collaboration Targets for which an
Option Right has not been exercised by Roche, including those (i) in the Pool
after the JRC’s right to replace Collaboration Targets in the Pool has ended
pursuant to Section 4.1.6, and/or (ii) that have been replaced with a new
Collaboration Target, or for which further preclinical development activities
are not pursued under Part 2.

 

1.74   Library Compound 

The term “Library Compound” shall mean any compound included in BPM Technology
but excluding any Other Compound or Collaboration Compound.

 

1.75   Licensed Product

The term “Licensed Product” shall mean a Product to which Roche has exercised
its Option Right to the corresponding Collaboration Target.  For clarity, a
Reversion Product shall not be considered a Licensed Product.

 

1.76   Major Countries 

The term “Major Countries” shall mean […***…].

 

1.77   […***…]

 

1.78   MTD

The term “MTD” shall mean, for each Collaboration Target, the dose and schedule
that will be used for the Product […***…] in the expansion part of the first
Phase I Study or in the first Phase II Study, if no expansion is planned for the
first Phase I Study. The MTD may be the maximum

 

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tolerated dose, as defined in the Phase I Study protocol for each Collaboration
Target, or it may be a lower dose. The MTD for each Collaboration Target will be
confirmed by the JDC. 

 

1.79   NDA

The term “NDA” shall mean a new drug application, including all necessary
documents, data, and other information concerning a Licensed Product, required
for Regulatory Approval of the Licensed Product as a pharmaceutical product by
the FDA or an equivalent application to the equivalent agency in any other
country or group of countries (e.g. the marketing authorization application
(MAA) in the EU).

 

1.80   Net Sales

The term “Net Sales” shall mean, for a Licensed Product in a particular period,
the amount calculated by subtracting from the Sales of such Licensed Product for
such period: (i) a lump sum deduction of […***…] of Sales in lieu of those
deductions that are not accounted for on a Licensed Product-by-Licensed Product
basis (e.g., freight, postage charges, transportation insurance, packing
materials for dispatch of goods, custom duties); (ii) uncollectible amounts
accrued during such period based on a proportional allocation of the total bad
debts accrued during such period and not already taken as a gross-to-net
deduction in accordance with the then currently used IFRS in the calculation of
Sales of such Licensed Product for such period; (iii) credit card charges
(including processing fees) accrued during such period on such Sales and not
already taken as a gross-to-net deduction in accordance with the then currently
used IFRS in the calculation of Sales of such Licensed Product for such period;
and (iv) government mandated fees and taxes and other government charges accrued
during such period not already taken as a gross-to-net deduction in accordance
with the then currently used IFRS in the calculation of Sales of such Licensed
Product for such period, including, for example, any fees, taxes or other
charges that become due in connection with any healthcare reform, change in
government pricing or discounting schemes, or other action of a government or
regulatory body. For clarity, no deductions taken in calculating Sales under
Section 1.119 may be taken a second time in calculating Net Sales.

 

With respect to a Combination Product, Net Sales of such Combination Product
eligible for royalties shall be adjusted to subtract the Relative Commercial
Value of any Other Component of such Combination Product in accordance with
Section 12.9.4.

 

To the extent that Roche or its Affiliates or Sublicensees receives
consideration other than or in addition to cash upon the Sale of a Licensed
Product, or the performance of any services (including preliminary treatments or
follow-up treatments) related to such Licensed Product, Net Sales will include
the fair market value of such additional consideration.

 

1.81   Option Data Criteria

The term “Option Data Criteria” shall mean, for each Collaboration Target, the
categories of information (including the criteria within such categories) for a
Product in accordance with the Phase I Plan with respect to such Collaboration
Target, which categories are set forth in Appendix 1.81, and the criteria within
such categories will be determined on a Collaboration Target-by-Collaboration
Target basis and finalized by the JDC prior to the filing of the first IND for
such Collaboration Target. 

 

1.82   Option Data Package

The term “Option Data Package” shall mean, for each Collaboration Target, (i) a
document setting forth the available data resulting from the Phase I Studies
conducted by BPM for such Collaboration Target, including the applicable Option
Data Criteria, (ii) the availability of the data

 

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for such Phase I Studies in an organized and clean format in the Clinical Study
database for such Collaboration Target through the Option Data Package Trigger
for such Collaboration Target, and (iii) if applicable, the availability of the
data of any Phase I Studies conducted by Roche in an organized and clean format
for a […***…] through the Option Data Package Trigger for such […***…].  For
clarity, “BPM’s Portion” of the Option Data Package shall mean the items set
forth in clauses (i) and (ii) of this Section 1.82.

 

1.83   Option Data Package Trigger

The term “Option Data Package Trigger” shall mean, for each Collaboration
Target, the earlier of (a) the date the JDC has determined that the Option Data
Criteria have been met, or (b) the cut-off date determined by the JDC pursuant
to Section 3.1.3.

 

1.84   Option Exercise Date

The term “Option Exercise Date” shall mean, on a Collaboration
Target-by-Collaboration Target basis, the date on which an Option Exercise
Notice delivered by Roche to BPM for such Collaboration Target pursuant to
Section 3.1.3 takes effect.

 

1.85   Option Exercise Notice

The term “Option Exercise Notice” shall mean the written notice Roche delivers
to BPM to exercise its Option Right with respect to a Collaboration Target.

 

1.86   Option Period

The term “Option Period” shall mean, for each Collaboration Target, the period
beginning the date the MTD for the first Product for such Collaboration Target
is designated by the JDC and ending upon the earliest of (i) the date that such
Collaboration Target becomes a Leftover Target, (ii) […***…] after Roche’s
receipt of the Option Data Package for such Collaboration Target, (iii) the date
such Collaboration Target becomes a Terminated Target, (iv) the date upon which
a Product (including Backup Compounds) for such Collaboration Target is no
longer in GLP Tox Studies, in Phase I Studies, or progressing from GLP Tox
Studies to Phase I Studies, or (v) […***…] after achievement of Lead Series
Identified Criteria has been confirmed by the JRC for such Collaboration Target
if Initiation of the GLP Tox Study has not been achieved for such Collaboration
Target prior to such date. 

 

1.87   Option Right

The term “Option Right” shall mean, with respect to a Collaboration Target,
Roche’s right to obtain an exclusive (subject to BPM’s retained rights if
applicable) commercial license with respect to that Collaboration Target in
accordance with Section 3.1.

 

1.88   Other Compound

The term “Other Compound” shall mean any compound made under the Research Plan
for a given Collaboration Target that does not satisfy the Compound Criteria as
determined by the JRC and is not a Library Compound as of the Effective
Date.  An Other Compound includes all salts, polymorphs, metabolites, prodrugs,
isomers, enantiomers and stereoisomers of such compound, in each case that do
not satisfy the Compound Criteria and are not a Library Compound as of the
Effective Date.

 

1.89   Out of Pocket Costs

The term “Out of Pocket Costs” shall mean, with respect to certain activities
hereunder direct expenses paid or payable by either Party or its Affiliates to
Third Parties and specifically identifiable and incurred to conduct such
activities for Collaboration Compounds, Products, Licensed Products or Companion
Diagnostics, as applicable, including payments to contract

 

14

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personnel (including contractors, consultants, CROs and subcontractors) in each
case pursuant to the Phase I Plans or Development Plans.

 

1.90   Party

The term “Party” shall mean BPM or Roche, as the case may be, and “Parties”
shall mean BPM and Roche collectively.

 

1.91   Part 1

The term “Part 1” shall mean the activities under the Research Plan and Phase I
Plan for the Collaboration Targets […***…],  […***…], and […***…].

 

1.92   Part 2

The term “Part 2” shall mean the activities under Screening, Target Validation
and the Research Plans and Phase I Plans for the Targets selected for activities
in Part 2 that become Collaboration Targets.

 

1.93   Patent Rights

The term “Patent Rights” shall mean all rights under any patent or patent
application, in any country of the Territory, including any patents issuing on
such patent application, and further including any substitution, extension or
supplementary protection certificate, reissue, reexamination, renewal, division,
continuation or continuation-in-part of any of the foregoing.

 

1.94   Person

The term “Person” shall mean any natural person, corporation, unincorporated
organization, partnership, association, sole proprietorship, joint stock
company, joint venture, limited liability company, trust or government, or any
other similar entity.

 

1.95   Pharmacovigilance Agreement 

The term “Pharmacovigilance Agreement” shall mean an agreement entered into by
the Parties to set forth the protocols and procedures for reporting adverse
events and complying with reporting requirements set forth by Regulatory
Authorities.

 

1.96   Phase I Development Costs

The term “Phase I Development Costs” shall mean, with respect to each Phase I
Plan, and subject to the cap in Section 5.1.3, those (i) costs and expenses
directly incurred (including personnel costs and Allocable Overhead associated
with employees and contractors of a Party)  with the performance of any Phase I
Studies for Collaboration Compounds or Products for such Collaboration Target,
(ii) costs associated with research or development of Companion Diagnostics, and
(iii) fees charged by Third Party service providers and other Out-of-Pocket
Costs reasonably incurred in connection with the performance of any Phase I
Study with respect to Collaboration Compounds or Products for such Collaboration
Target, in each case, in accordance with the applicable Phase I Plan and that
are recorded as an expense in accordance with IFRS or GAAP as applicable
consistently applied. Phase I Development Costs shall include (A) the cost of
studies on the toxicological, pharmacokinetic, metabolic, pharmacodynamic or
clinical aspects of such Product conducted by individual investigators or
consultants in accordance with the applicable Phase I Plan and (B) expenses for
data management, statistical designs and studies, document preparation, and
other expenses associated with the clinical testing program for the applicable
Phase I Plan.  For clarity, Phase I Development Costs for each Product shall
include (i) manufacturing and supply costs and expenses associated with the
Phase I Plan for such Product, and (ii) costs related to preparing and filing
Filings associated with the Phase I Plan for such Product (including associated
filing fees, translation expenses, and legal and other

 

15

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professional service fees).  All manufacture and supply costs and expenses for
Roche Clinical Compounds and Roche Marketed Products shall be at Roche’s sole
expense.  For clarity, Phase I Development Costs shall exclude (a) capital
expenditures, and (b) Development Costs.

 

1.97   Phase I Plan

The term “Phase I Plan” shall mean, for each Collaboration Target, a plan and
budget describing the one or more Phase I Studies to be conducted with respect
to such Collaboration Target in the Field that will be established and approved
by the JDC, with the goal to provide the Option Data Package for such
Collaboration Target.

 

1.98   Phase I Program

The term “Phase I Program” shall mean the activities undertaken by the Parties
pursuant to the Phase I Plans for all Collaboration Targets.

 

1.99   Phase I Study

The term “Phase I Study” shall mean a human clinical trial in any country that
would satisfy the requirements of 21 C.F.R. §  312.21(a) (FDCA), as amended from
time to time, and the foreign equivalent thereof.

 

1.100  Phase II Study

The term “Phase II Study” shall mean a human clinical trial, for which the
primary endpoints include a determination of dose ranges and/or a preliminary
determination of efficacy in patients being studied as described in 21 C.F.R. §
312.21(b) (FDCA), as amended from time to time, and the foreign equivalent
thereof.

 

1.101  Phase III Study

The term “Phase III Study” shall mean a human clinical trial that is
prospectively designed to demonstrate statistically whether a product is safe
and effective for use in humans in a manner sufficient to obtain regulatory
approval to market such product in patients having the disease or condition
being studied as described in 21 C.F.R. § 312.21(c) (FDCA), as amended from time
to time, and the foreign equivalent thereof.

 

1.102  Pivotal Study

The term “Pivotal Study” shall mean, with respect to any Licensed Product, a
Clinical Study that at the time of commencement (or any later expansion of
patient enrollment, if applicable), is expected by the JDC to be the basis for
Regulatory Approval of such Licensed Product. 

 

1.103  Post-Marketing Study

The term “Post-Marketing Study” shall mean a non-human or human clinical study
of a Licensed Product initiated after receipt of Regulatory Approval for such
Licensed Product in a country or territory, which is required by the Regulatory
Authority in such country or territory to maintain the Regulatory Approval for
such Licensed Product in such country or territory.

 

1.104  Product

The term “Product” shall mean, on a Collaboration Target-by-Collaboration Target
basis, any pharmaceutical product that, prior to Roche’s exercise of its Option
Right for such Collaboration Target, contains a Collaboration Compound with
respect to such Collaboration Target generated under a Research Plan, including
without limitation any Combination Product.  One Product can be distinguished
from another Product by containing a different Collaboration Compound as its
active pharmaceutical ingredient.  For clarity, a Reversion Product will not be
considered a Product.

 

16

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1.105  Program

The term “Program” shall mean the program to develop and commercialize Licensed
Products directed to a specific Collaboration Target in the Field in the
Territory.  Subject to the program switch right in Section 3.1.4, a Program
shall be numbered in accordance with the order in which Roche exercises its
Option Right so that “Program 1” is the Program to develop and commercialize
Licensed Products directed to the first Collaboration Target for which Roche
exercises its Option Right; “Program 2” is the Program to develop and
commercialize Licensed Products directed to the second Collaboration Target for
which Roche exercises its Option Right; “Program 3” is the Program to develop
and commercialize Licensed Products directed to the third Collaboration Target
for which Roche exercises its Option Right; “Program 4” is the Program to
develop and commercialize Licensed Products directed to the fourth Collaboration
Target for which Roche exercises its Option Right; and “Program 5” is the
Program to develop and commercialize Licensed Products directed to the fifth
Collaboration Target for which  Roche exercises its Option Right.

 

1.106  Regulatory Approval

The term “Regulatory Approval” shall mean any approvals, licenses, registrations
or authorizations by Regulatory Authority, necessary for the manufacture and
sale of a Licensed Product in the Field in a regulatory jurisdiction in the
Territory.

 

1.107  Regulatory Authority

The term “Regulatory Authority” shall mean any national, supranational (e.g.,
the European Commission, the Council of the European Union, the European
Medicines Agency), regional, state or local regulatory agency, department,
bureau, commission, council or other governmental entity including the FDA, in
each country involved in the granting of Regulatory Approval for the Licensed
Product.

 

1.108  Research Plan

The term “Research Plan” shall mean, for each Collaboration Target, a plan
describing the screening activities and preclinical development of Library
Compounds, Other Compounds and Collaboration Compounds (including Backup
Compounds) for such Collaboration Target in the Field up to and including GLP
Tox Studies and that is approved by the JRC. Each Research Plan shall also
comprise the properties and their related criteria to be measured at defined
points of preclinical development.

 

1.109  Research and Development Term

The term “Research and Development Term” shall mean the period beginning upon
the Effective Date and ending upon the earlier of (i) the exercise of the last
Option Right available for exercise, or (ii) the expiration of the Option Period
for the last Collaboration Target available for exercise.

 

1.110  Roche Clinical Compounds

The term “Roche Clinical Compounds” shall mean clinical-stage compounds
controlled by Roche or its Affiliates (but not Products or Licensed Products)
and provided for combination Clinical Studies with Products or Licensed
Products. 

 

1.111  Roche Group

The term “Roche Group” shall mean collectively Roche, its Affiliates and its
Sublicensees.

 

17

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1.112  Roche Know-How

The term “Roche Know-How” shall mean (a) all Know-How that Roche and its
Affiliates Controls as of the Effective Date or during the Agreement Term to the
extent used by Roche or its Affiliates to perform activities under this
Agreement (including Roche Sole IP and Roche’s interest in Joint IP) (but
excluding Supplemental Studies unless BPM opts-in pursuant to Section 7.2), and
(b) with respect to Program 2 and Program 4, any Know-How that Roche or its
Affiliates uses in Exploiting any Licensed Products for Program 2 and Program 4
(as applicable) (but excluding Supplemental Studies unless Roche opts-in
pursuant to Section 7.2), and in each case (a) and (b) that is necessary or
useful to perform activities under this Agreement.

 

1.113  Roche Marketed Products

The term “Roche Marketed Products” shall mean marketed products controlled by
Roche or its Affiliates (but not Products or Licensed Products) and provided for
combination Clinical Studies with Products or Licensed Products. 

 

1.114  Roche Patent Rights

The term “Roche Patent Rights” shall mean (a) all Patent Rights that Roche and
its Affiliates Controls as of the Effective Date or during the Agreement Term to
the extent used by Roche or its Affiliates to perform activities under this
Agreement (including Roche Sole IP and Roche’s interest in Joint IP) (but
excluding Supplemental Studies unless BPM opts-in pursuant to Section 7.2), and
(b) with respect to Program 2 and Program 4, any Patent Rights that Roche or its
Affiliates uses in Exploiting any Licensed Products for Program 2 and Program 4
(as applicable) (but excluding Supplemental Studies unless Roche opts-in
pursuant to Section 7.2), and in each case (a) and (b) that are necessary or
useful to perform the activities under this Agreement.  The Patent Rights
identified in Appendix 1.114 (“Excluded Patent Rights”) are specifically
excluded from the Roche Patent Rights.

 

1.115  Roche Sole IP

The term “Roche Sole IP” shall mean all Patent Rights and Know-How arising from
a Roche Invention and all […***…].

 

1.116  Roche Territory

The term “Roche Territory” shall mean (a) in the case of Program 1, Program 3,
and Program 5, all countries of the world, and (b) in the case of Program 2 and
Program 4, ROW.

 

1.117  ROW

The term “ROW” shall mean all countries of the world excluding the US.

 

1.118  Royalty Term

The term “Royalty Term” shall mean, for each Licensed Product, on a
country-by-country basis, the period of time beginning with First Commercial
Sale of a Licensed Product in a country and ending on the latest of (i) […***…]
after First Commercial Sale in such country of such Licensed Product, (ii) the
last to expire Composition of Matter Claim, and (iii) the end of any regulatory
exclusivity for such Licensed Product. To the extent the only Valid Claim in the
Collaboration Compound IP or BPM IP or any patent rights owned or in-licensed by
Roche (only pursuant to Program 2 or Program 4) Covers an approved use of a
Licensed Product, the Royalty Term shall expire on a country-by-country basis on
the later of (a) […***…] after First Commercial Sale in such country of such
Licensed Product or (b) the end of the first Calendar Quarter in which a Generic
Product enters the market in such country.

 

18

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1.119  Sales

The term “Sales” shall mean, for a Licensed Product in a particular period, the
sum of (i) and (ii):

 

(i)   the amount stated in the Roche Holding AG “Sales” line of its externally
published audited consolidated financial statements with respect to such
Licensed Product for such period (excluding sales to any Sublicensees that are
not Affiliates of Roche). This amount reflects the gross invoice price at which
such Licensed Product was sold or otherwise disposed of (other than for use as
clinical supplies or free samples) by Roche and its Affiliates to such Third
Parties (excluding sales to any Sublicensees that are not Affiliates of Roche)
in such period reduced by gross-to-net deductions, if not previously deducted
from such invoiced amount, taken in accordance with the then currently used
IFRS.

 

By way of example, the gross-to-net deductions taken in accordance with IFRS as
of the Effective Date include the following:

 

(a)      credits, reserves or allowances granted for (i) damaged, outdated,
returned, rejected, withdrawn or recalled Licensed Product, (ii) wastage
replacement and short-shipments; (iii) billing errors and (iv) indigent patient
and similar programs (e.g., price capitation);

 

(b)      governmental price reductions and government mandated rebates;

 

(c)      chargebacks, including those granted to wholesalers, buying groups and
retailers;

 

(d)      customer rebates, including cash sales incentives for prompt payment,
cash and volume discounts; and

 

(e)      taxes and any other governmental charges or levies imposed upon or
measured by the import, export, use, manufacture or sale of a Licensed Product
(excluding income or franchise taxes).

 

For purposes of clarity, sales by Roche and its Affiliates to any Sublicensee
shall be excluded from “Sales”. 

 

(ii)  for Sublicensees that are not Roche Affiliates (and excluding Compulsory
Sublicensees), the sales amounts reported to Roche and its Affiliates in
accordance with the Sublicensee contractual terms and their then-currently used
accounting standards. For the purpose of clarity, any such Sublicensee sales as
reported to Roche in accordance with Compulsory Sublicense agreements shall be
excluded from the sales amount.

 

1.120  Screening

The term “Screening” shall mean the activities performed jointly by Roche and
BPM at the beginning of Part 2 in accordance with this Agreement. The JRC shall
approve the Screening plan and any changes thereto.

 

1.121  Screening Hit

The term “Screening Hit” shall mean any Library Compound identified as a hit
after Screening.

 

19

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1.122  Sublicensee

The term “Sublicensee” shall mean an entity to which Roche or BPM, as
applicable, has licensed or sublicensed rights (through one or multiple tiers),
other than through a Compulsory Sublicense, pursuant to this Agreement.

 

1.123  Target

The term “Target” shall mean any protein identified by its Entrez/HUGO number,
including all splice variants, mutants, natural variants, and the like
reasonably associated with such Entrez/HUGO number, which may be inhibited or
modulated by Library Compounds, Other Compounds, Collaboration Compounds,
Products, and/or Licensed Products.

 

1.124  Target Hypothesis

The term “Target Hypothesis” shall mean any hypothesis for a Screening Hit
established by both Parties.

 

1.125  Target Validation

The term “Target Validation” shall mean the activities, including further in
vitro assays, performed jointly by Roche and BPM following Screening in Part 2
to achieve validation of the Collaboration Targets for which a Target Hypothesis
has been established. The JRC shall approve the Target Validation plan and any
changes thereto.

 

1.126  Terminated Target

The term “Terminated Target” shall mean any Collaboration Target that has under
Section 21.3.1 become a “Terminated Target.”

 

1.127  Territory

The term “Territory” shall mean (i) with respect to Roche, the Roche Territory,
and (ii) with respect to BPM, the BPM Territory.

 

1.128  Third Party

The term “Third Party” shall mean a person or entity other than (i) BPM or any
of its Affiliates or (ii) a member of the Roche Group.

 

1.129  US

The term “US” or “United States” shall mean the United States of America and its
territories and possessions.

 

1.130  US$

The term “US$” shall mean US dollars.

 

1.131  Valid Claim

The term “Valid Claim” shall mean a claim in any (i) unexpired and issued patent
that has not been disclaimed, revoked or held invalid by a final non-appealable
decision of a court of competent jurisdiction or government agency, or (ii)
pending patent application being prosecuted in good faith and has been pending
for no more than […***…] from the earliest priority date.

 

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1.132  Additional Definitions

Each of the following definitions is set forth in the Section of this Agreement
indicated below:

 

Definition

Section

AAA

23.3

Accounting Period

13.1

Acquired Party

21.2.3

Alliance Director

8.10

Allowable Exception

7.3.3

Arbitral Tribunal

23.3.1

Bankruptcy Code

22

Biomarker IP

16.1

BPM

Preamble

BPM Deferral Election

7.3.4

BPM Invention

1.62

BPM Member

8.3

BPM Other Program

2.5.4

BPM Specific Patent Rights

16.5(a)

BPM Trademarks

16.4

BPM’s Portion

1.82

Breaching Party

21.2.1

Chairperson

8.3

[…***…]

[…***…]

Compulsory Profit Share Percentage

12.9.8

Compulsory Sublicense

1.33

Compulsory Sublicensee

1.33

CREATE Act

16.9

Decision Period

16.10

Deferrable Amount

7.3.4

Development Event

12.7

Disclosing Party

1.34

Excluded Patent Rights

1.114

Exclusive Terms Period

2.2

Expedited Arbitration

23.3.3

Expedited Dispute

23.3.3

Expert Committee

12.9.4

Finance Officers

12.5

[…***…]

[…***…]

Global Trademarks

16.4

GLP Tox Study

1.60

[…***…]

[…***…]

H-W Suit Notice

16.13

Indemnified Party

18.3

Indemnifying Party

18.3

Initiating Party

16.10

Insulated Chemistry Expert

4.1.5

Joint Invention

1.62

Label Pursuit

7.3.1

Members

8.3

 

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Definition

Section

Non-Acquired Party

21.2.3

Non-Breaching Party

21.2.1

Non-Selling Party

11.2

Option Exercise Fee

12.4

Other Component

1.27(a)

Other Compound IP

16.1

Patent Term Extensions

16.14

Payment Currency

13.3

Peremptory Notice Period

21.2.1

Pool

4.1.6

Program 1

1.105

Program 2

1.105

Program 3

1.105

Program 4

1.105

Program 5

1.105

Publishing Notice

20.4

Publishing Party

20.4

Receiving Party

1.34

Redacted Agreement

20.5

Register

16.8

Relative Commercial Value

12.9.4

Reversion License

21.3.1(f)

Reversion Product

21.3.1

Roche

Preamble

Roche Basel

Preamble

Roche Invention

1.62

Roche Member

8.3

[…***…]

[…***…]

Roche Transfer Activities

21.3.4.4(d)

Roche US

Preamble

[…***…]

[…***…]

Samples

21.3.4.4(b)

Selling Party

11.2

Sensitive Information

21.2.3

Settlement

16.10

Shared Development Cost Budget

7.3.3

SPCs

16.14

Suit Notice

16.10

Supplemental Study

7.3.2

Supplemental Study Opt-In Right

7.3.2

Supply Agreement

9.1

Switch

3.1.4

Technology Transfer

9.2

Third Party Acquisition

2.5.4

 

2.     Grant of License and Exclusivity

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2.1     Licenses

 

2.1.1   Research Cross Licenses

Subject to the terms and conditions of this Agreement, Roche hereby grants to
BPM a non-transferable (except as provided in Section 23.4), sublicensable
(subject to Section 2.3.2), non-exclusive license under Roche Know-How and Roche
Patent Rights for BPM to perform its research activities under the Research
Plans and development activities under the Phase I Plans, in each case in the
Field and during the Research and Development Term.

 

Subject to the terms and conditions of this Agreement, BPM hereby grants to
Roche a non-transferable (except as provided in Section 23.4), sublicensable
(subject to Section 2.3.1), non-exclusive license under BPM IP and Collaboration
Compound IP for Roche to perform its research activities under the Research
Plans and development activities under the Phase I Plans, in each case in the
Field and during the Research and Development Term.

 

2.1.2   Development and Commercial License for Program 1, Program 3 and Program
5

Subject to Roche exercising its Option Right with regard to a Collaboration
Target for Program 1, Program 3 or Program 5 (as applicable) as set forth in
Section 3.1, BPM hereby grants to Roche, effective upon the Option Exercise Date
for such Collaboration Target, a non-transferable (except as provided in Section
23.4), sublicensable (subject to Section 2.3.1), exclusive (even as to BPM but
subject to BPM’s retained rights, as applicable) license under BPM IP and
Collaboration Compound IP to Exploit Licensed Products and Companion Diagnostics
for Program 1, Program 3 or Program 5 (as applicable) in the Field in the Roche
Territory.

 

With respect to the Excluded Field, under this Agreement, Roche shall not (and
shall require its Affiliates and Sublicensees to not) research, develop,
manufacture or commercialize any Library Compound, Collaboration Compound, Other
Compound, Product or Licensed Product for Program 1, Program 3 or Program 5 (as
applicable) in the Excluded Field.  For clarity, the foregoing restriction does
not apply to any of Roche’s or its Affiliate’s or Sublicensee’s research,
development, manufacture or commercialization programs or activities outside of
this Agreement.

 

Notwithstanding any other provision of this Agreement, for the purposes of the
license grants under this Section 2.1.2 with respect to any Licensed Product
that is a Combination Product, (i) such license will only include a license with
respect to the Collaboration Compound in such Combination Product, and (ii) in
no event is a license granted hereunder with respect to any Other Component of a
Combination Product.

 

2.1.3   Development and Commercial Licenses for Program 2 and Program 4

Subject to Roche exercising its Option Right with regard to a Collaboration
Target for Program 2 or Program 4 (as applicable) as set forth in Section 3.1,
BPM hereby grants to Roche, effective upon the Option Exercise Date for such
Collaboration Target, a non-transferable (except as provided in Section 23.4),
sublicensable (subject to Section 2.3.2), exclusive (even as to BPM but subject
to BPM’s retained rights, as applicable) license under BPM IP and Collaboration
Compound IP to Exploit Licensed Products and Companion Diagnostics for Program 2
or Program 4 (as applicable) in the Field in the Roche Territory.

 

Notwithstanding the foregoing, for Program 2 or Program 4, BPM retains the right
under the BPM IP and Collaboration Compound IP, with the right to grant licenses
through multiple tiers, to

 

23

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develop each Product or Licensed Product (as applicable) in the Field anywhere
in the world, in each case solely as and to the extent permitted in any Phase I
Plan or Development Plan or as otherwise permitted under Section 7.2 or
elsewhere under this Agreement, and in each case, solely for Regulatory Approval
and commercialization in the BPM Territory.

 

With respect to the Excluded Field, under this Agreement, Roche shall not (and
shall require its Affiliates and Sublicensees to not) research, develop,
manufacture or commercialize any Library Compound, Collaboration Compound, Other
Compound, Product or Licensed Product for Program 2 or Program 4 in the Excluded
Field.  For clarity, the foregoing restriction does not apply to any of Roche’s
or its Affiliate’s or Sublicensee’s research, development, manufacture or
commercialization programs or activities outside of this Agreement.

 

Notwithstanding any other provision of this Agreement, for the purposes of the
license grants under this Section 2.1.3 with respect to any Licensed Product
that is a Combination Product, (i) such license will only include a license with
respect to the Collaboration Compound in such Combination Product, and (ii) in
no event is a license granted hereunder with respect to any Other Component of a
Combination Product.

 

Subject to Roche exercising its Option Right with regard to a Collaboration
Target for Program 2 or Program 4 (as applicable), Roche hereby grants to BPM,
effective upon the Option Exercise Date for such Collaboration Target, a
non-transferable (except as provided in Section 23.4), sublicensable (subject to
Section 2.2 and Section 2.3.2), exclusive (even as to Roche but subject to
Roche’s retained rights, as applicable) license, under Roche Know-How and Roche
Patent Rights to Exploit Licensed Products and Companion Diagnostics for Program
2 or Program 4 (as applicable) in the Field in the BPM Territory. 

 

2.1.4   Manufacturing Licenses

Subject to the terms and conditions of this Agreement, BPM hereby grants to
Roche a non-transferable (except as provided in Section 23.4), sublicensable
(subject to Section 2.3.1), worldwide, non-exclusive license under BPM IP and
Collaboration Compound IP for Roche to manufacture and have manufactured
Collaboration Compounds, Products and Licensed Products solely to perform its
activities under Section 9.1.

 

Subject to the terms and conditions of this Agreement, Roche hereby grants to
BPM a non-transferable (except as provided in Section 23.4), sublicensable
(subject to Sections 9.3 and 9.4), worldwide, non-exclusive license under Roche
Patent Rights, Roche Know-How and […***…] for BPM to manufacture and have
manufactured Collaboration Compounds, Products and Licensed Products solely to
perform its activities under Section 9.1.

 

Subject to the terms and conditions of this Agreement, Roche hereby grants to
BPM a non-transferable (except as provided in Section 23.4), sublicensable
(subject to Sections 9.3 and 9.4), worldwide, non-exclusive license under
[…***…] for BPM to manufacture and have manufactured Other Compounds and any
derivatives thereof. 

 

2.1.5   Licenses to Conduct Supplemental Studies

Subject to the terms and conditions of this Agreement, BPM hereby grants to
Roche a non-transferable (except as provided in Section 23.4), sublicensable
(subject to Section 2.3.1),

 

24

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worldwide, non-exclusive license under BPM IP and Collaboration Compound IP for
Roche to conduct Supplemental Studies in compliance with Section 7.3.2.

 

Subject to the terms and conditions of this Agreement, Roche hereby grants to
BPM a non-transferable (except as provided in Section 23.4), sublicensable
(subject to Section 2.3.2), worldwide, non-exclusive license under Roche Patent
Rights and Roche Know-How for BPM to conduct Supplemental Studies in compliance
with Section 7.3.2.

 

2.1.6   Rights of Reference

Each Party hereby grants to the other Party, and at the request of the other
Party will grant to the other Party’s Affiliates, a “Right of Reference”, as
that term is defined in 21 C.F.R. § 314.3(b) (or any successor rule or analogous
law recognized outside of the United States), to, and a right to copy, access,
and otherwise use, all information and data (including all CMC information as
well as data made, collected or otherwise generated in the conduct of any
Clinical Studies or upon exercise of the Supplemental Study Opt-In Right,
Supplemental Studies, or early access/named patient programs for the applicable
Products or Licensed Products) included in or used in support of any regulatory
filing, Regulatory Approval, drug master file or other regulatory documentation
(including orphan drug applications and designations) maintained on behalf of
such Party (or its Affiliates) that relates to any Product or Licensed Product,
to the extent necessary or useful to obtain Regulatory Approval of a Product or
Licensed Product in the BPM Territory or the Roche Territory, as applicable, and
such Party will provide a signed statement to this effect, if requested by the
other Party, in accordance with 21 C.F.R. § 314.50(g)(3) (or any successor or
analogous law outside of the United States).  In addition, upon reasonable
request of either Party (on behalf of itself or a Sublicensee), the other Party
will obtain and provide to the requesting Party certificates or other formal or
official attestations concerning the regulatory status of the Products or
Licensed Products in the BPM Territory or the Roche Territory, as applicable
(e.g., Certificates of Free Sale, Certificates for Export, Certificates to
Foreign Governments), at the requesting Party’s request, and provided further
that such attestations are reasonably necessary for the requesting Party to
exercise its rights under this Agreement.  Notwithstanding anything to the
contrary in this Agreement other than for safety concerns, neither Party will
withdraw or inactivate any regulatory filing that the other Party references or
otherwise uses pursuant to this Section 2.1.6.

 

2.2     Right of First Negotiation and […***…]

During the Agreement Term, if BPM elects to sublicense or divest to a Third
Party part or all of its development or commercialization rights in the BPM
Territory pursuant to Program 2 and/or Program 4, then BPM shall promptly notify
Roche of its decision to do so and Roche shall have a right of first negotiation
to enter into an exclusive negotiation period with BPM in order to reach agreed
terms for such a sublicense or divestment.  Roche shall inform BPM within
[…***…] after receipt of notification from BPM (“Exclusive Terms Period”) as to
whether Roche is interested in entering into an exclusive negotiation period. If
Roche provides written notice to BPM during the Exclusive Terms Period, then the
Parties shall negotiate a term sheet within an additional […***…] period. If the
Parties are able to agree upon a term sheet within the […***…] period, then the
Parties shall negotiate a definitive agreement within an additional […***…]
negotiation period. 

 

If the Parties are unable to reach terms on a term sheet in such […***…] period
or on a definitive agreement in the additional […***…] negotiation period, then,
at BPM’s written election, BPM shall have the right to either (a) negotiate and,
subject to […***…], enter into a sublicense or divestment agreement with a Third
Party in accordance with Section 2.3.2, or (b) commence Expedited

 

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Arbitration proceedings by providing written notice to Roche to resolve any
disputed terms in such term sheet or definitive agreement.  […***…]  If Roche
provides written notice to discontinue such Expedited Arbitration proceedings
within such […***…] period, then […***…] shall terminate and BPM shall have the
right to negotiate and enter into a sublicense or divestment agreement with a
Third Party in accordance with Section 2.3.2.  […***…]     

 

If BPM negotiates a sublicense or divestment agreement with a Third Party after
either (1) the Parties are unable to reach terms of a term sheet within the
[…***…] period or terms of a definitive agreement within the additional […***…]
negotiation period and either (x) BPM does not exercise its right to commence
Expedited Arbitration proceedings or (y) BPM provides written notice to
discontinue such Expedited Arbitration proceedings, or (2) Roche does not
exercise such right of first negotiation during the Exclusive Terms Period, then
[…***…]. 

 

In all events, this Section 2.1.5 will not apply to (A) any Change of Control of
BPM or other permitted assignment of this Agreement under Section 23.4, (B) any
bona fide agreement with a CRO, under which such CRO performs contract services
on behalf of BPM or any of its Affiliates for the research, development,
manufacture or commercialization of any Collaboration Compound, Other Compound,
Product or Licensed Product as permitted under this Agreement on a
fee-for-services basis, it being understood that under an agreement for such
fee-for-services, fees paid to the Third Party for such services may include
milestones or royalties, (C) any agreement permitted in compliance with the
terms of this Agreement with any academic institution or other not-for-profit
Third Party regarding any Collaboration Compound, Other Compound, Product or
Licensed Product, or (D) any agreement with a distributor regarding any Licensed
Product for Program 2 and Program 4 in the BPM Territory.

 

If Roche does not exercise such right of first negotiation during the Exclusive
Terms Period, then BPM shall have the right to negotiate and, subject to […***…]
enter into a sublicense or divestment agreement with a Third Party in accordance
with Section 2.3.2.

 

2.3     Sublicenses

 

2.3.1   Roche’s Scope of Permissible Sublicensing

The license granted by BPM to Roche in Section 2.1.2 and Section 2.1.3 may be
sublicensed by Roche through multiple tiers, provided that (i) Roche will ensure
that the financial terms included in Section 12 that are applicable to the scope
of the sublicense granted remain unchanged, (ii) BPM’s obligations to such
sublicensed Affiliate or Sublicensee will be no broader than BPM’s obligations
were to Roche under this Agreement prior to Roche’s grant of such a sublicense,
(iii) Roche will be liable for any act or omission of any such sublicensed
Affiliate or Sublicensee that is a breach of any of Roche’s obligations under
this Agreement as though the same were a breach by Roche, and BPM will have the
right to proceed directly against Roche without any obligation to first proceed
against such sublicensed Affiliate or Sublicensee, (iv) Roche will ensure that
Roche receives from the Sublicensee all rights necessary for Roche to grant to
BPM the rights and licenses upon termination of the Agreement set forth in
Section 21.3 and (v) such sublicensed Affiliate or Sublicensee will undertake
obligations of confidentiality and non-use regarding Confidential Information
that are at least as protective as those undertaken by Roche with respect to
Confidential Information pursuant to Section 20 hereof.  Roche, as soon as
reasonably practicable thereafter, shall provide BPM with a copy of any executed
sublicense agreement with a Third Party other than […***…], or a Third Party
acting only as a distributor (which copy may be redacted to remove provisions
which are not necessary to monitor compliance with this Section 2.3.1).

 

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The license granted by BPM to Roche in Section 2.1.1 may be sublicensed by Roche
to a permitted CRO to perform Roche’s assigned responsibilities under the
Research Plans and Phase I Plans upon prompt written notice to BPM.

 

The license granted by BPM to Roche in Section 2.3.1 may be sublicensed by Roche
to a permitted CRO to perform Roche’s assigned responsibilities under Section
9.1.

 

2.3.2   BPM’s Scope of Permissible Sublicensing

The license granted by Roche to BPM in Section 2.1.3 may be sublicensed by BPM
through multiple tiers, provided that (i) BPM will ensure that the financial
terms included in Section 12 that are applicable to the scope of the sublicense
granted remain unchanged, (ii) Roche’s obligations to such sublicensed Affiliate
or Sublicensee will be no broader than Roche’s obligations were to BPM under
this Agreement prior to BPM’s grant of such a sublicense, and (iii) BPM will be
liable for any act or omission of any such sublicensed Affiliate or Sublicensee
that is a breach of any of BPM’s obligations under this Agreement as though the
same were a breach by BPM, and Roche will have the right to proceed directly
against BPM without any obligation to first proceed against such sublicensed
Affiliate or Sublicensee, (iv) BPM will ensure that BPM receives from the
Sublicensee all rights necessary for BPM to grant to Roche the rights and
licenses upon termination of the Agreement set forth in Section 21.3 and (v)
such sublicensed Affiliate or Sublicensee will undertake in writing obligations
of confidentiality and non-use regarding Confidential Information that are at
least as protective as those undertaken by BPM with respect to Confidential
Information pursuant to Section 20 hereof.

 

The license granted by Roche to BPM in Section 2.1.1 may be sublicensed by BPM
to a permitted CRO to perform BPM’s assigned responsibilities under the Research
Plans and Phase I Plans upon written notice to Roche.

 

2.4    BPM Third Party Payments

 

BPM will be responsible for all payments associated with any agreements related
to the BPM IP that exist as of the Effective Date, except as otherwise agreed to
in writing.  For clarity, to the extent payments under those agreements are
incurred by BPM pursuant to the Research Plan or Phase I Plan, such payments
will not be reimbursed by Roche unless they are specifically included under the
Research Plan budget or Phase I Plan budget as an amount to be reimbursed by
Roche.

 

In the event that, after the Effective Date and prior to any Change of Control
of BPM, BPM in-licenses BPM IP that would be deemed Controlled for purposes of
the licenses granted to Roche under Section 2.1 but for BPM owing payments under
the agreement for such in-licensed BPM IP on account of any sublicense granted
thereunder to Roche or its Affiliates or Sublicensees, BPM will notify Roche of
the existence of and anticipated amounts of such payments and Roche will have
the right to decline a sublicense to such in-licensed BPM IP or take such
sublicense, in which case Roche agrees to comply with any obligations under such
agreement of BPM that apply to Roche and of which Roche was informed by BPM,
including any obligation to make such payments.  In the event Roche elects to
take such sublicense, Roche will make such payments to BPM within thirty (30)
days of receiving an invoice from BPM for the same.

 

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2.5     Exclusivity

 

2.5.1   BPM Exclusivity with regard to Collaboration Targets

On a Collaboration Target-by-Collaboration Target basis, BPM and its Affiliates
shall work exclusively with Roche during the Option Period with respect to such
Collaboration Target. BPM and its Affiliates shall continue to work exclusively
with Roche on each Collaboration Target for which Roche exercises its Option
Right until the earliest of (i) (a) for Program 1, Program 3 and Program 5, the
First Commercial Sale by the Roche Group in the Roche Territory of the first
Licensed Product with respect to such Collaboration Target, or (b) for Program 2
and Program 4, the First Commercial Sale by the Roche Group or the BPM Group in
the Territory of the first Licensed Product with respect to such Collaboration
Target, (ii) such Collaboration Target becomes a Leftover Target, or (iii) such
Collaboration Target becomes a Terminated Target.

 

2.5.2   BPM Exclusivity with regard to Cancer Immunotherapy

BPM and its Affiliates shall work exclusively with Roche in the field of cancer
immunotherapy until Target Validation for Part 2 is completed and the Pool is
established by the JRC, but in any event for no more than thirty (30) months
after the Effective Date. […***…]  Excluded Targets and Leftover Targets (and
research and development activities with respect thereto), and customary
screening and early-stage chemistry and biology work performed by and on behalf
of BPM in the ordinary course, shall not be subject to or otherwise prohibited
by this Section 2.5.2.  The conduct of general screening activities by or on
behalf of BPM or its Affiliates shall not be deemed a breach of this Section
2.5.2 unless and until BPM or its Affiliates decides to pursue a Target for
additional development.

 

2.5.3   BPM Rights if Roche is not Exclusive for a Collaboration Target

If Roche or its Affiliates gain access (such as through licensing or acquisition
from a Third Party) to a compound or product targeting a Collaboration Target
prior to exercising its Option Right for such Collaboration Target, then Roche
shall immediately notify BPM in writing and BPM shall have the right upon
written notice to Roche to terminate (i) Roche’s Option Right to such
Collaboration Target and (ii) all activities under the Research Plan and Phase I
Plan for such Collaboration Target.  If BPM opts for such termination, then such
Collaboration Target will become a Leftover Target and all associated
Collaboration Compounds and Products will become Reversion Products.  […***…] 

 

If Roche or its Affiliates gain access (e.g., via licensing or acquisition or
internal program, or any other way) to a compound or product targeting a
Collaboration Target after exercising its Option Right for such Collaboration
Target, then without affecting the rights and obligations of the parties under
this Agreement, for clarity, BPM shall have no right of termination as set forth
above and Roche shall continue to use Commercially Reasonable Efforts to develop
and commercialize Licensed Products corresponding to such Collaboration Target. 

 

In the case of Program 2 or Program 4, if Roche or its Affiliates gain access
(e.g., via licensing or acquisition or internal program, or any other way) to a
compound or product targeting a Collaboration Target of such Program 2 or
Program 4 and exercises its Option Right for such Collaboration Target (before
or after gaining such access), and such compound or product has initiated (i.e.,
the date that a human is first dosed with the compound or product in a human
clinical study) (i) a Phase II Study in the case of a compound or product
accessed from a Third Party or internally (other than from […***…]) or (ii) a
Phase III Study in the case of a compound or product

 

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accessed from […***…], then BPM’s obligation of exclusivity under Section 2.5.1
with respect to such Collaboration Target shall automatically and immediately
terminate. Roche shall as soon as practicable notify BPM in writing upon any
such initiation of such Phase II Study or Phase III Study (as applicable).

 

2.5.4   Limitations on BPM Exclusivity Obligations

The Parties hereby acknowledge and agree that (I) after expiration of the
obligations set forth in Section 2.5.2, Sections 2.5.1 and 2.5.2 will not apply
to any compound or product that is intended to modulate (including inhibit) any
target(s) other than a Collaboration Target; and (II) BPM retains (for itself
and its Affiliates and licensees and subcontractors) (A) the right to research
(but not preclinically or clinically develop or commercialize) Collaboration
Compounds, Products and Licensed Products outside of the applicable Research
Plans, (B) the right, solely to the extent reasonably necessary for any such
research, to manufacture Collaboration Compounds, Products and Licensed Products
outside of the applicable Research Plans, and (C) the rights under the license
grants in Section 2.1 or elsewhere in this Agreement or elsewhere retained under
this Agreement.

 

Notwithstanding Section 2.5.1 and Section 2.5.2, and subject to the next
paragraph, in the event that BPM or its Affiliates acquire a Third Party or a
portion of the business of a Third Party (whether by merger, stock purchase,
purchase of assets, in-license or other means) (a “Third Party Acquisition”)
that is, prior to such Third Party Acquisition, conducting a research,
development or commercialization program or activities that, if conducted by BPM
at such time, would be a breach of BPM’s exclusivity obligation in Section 2.5.1
or Section 2.5.2 (a “BPM Other Program”), BPM may elect […***…].  BPM will not
be deemed in breach of Section 2.5.1 and Section 2.5.2 with respect to such BPM
Other Program so long as BPM complies with the terms of Section 2.5.1 and
Section 2.5.2 and provided that such BPM Other Program is conducted
independently of BPM’s activities under this Agreement and without any use of
any Roche Know-How, Roche Patent Rights or Roche Confidential Information or
material use (other than the retained rights above) of the Collaboration
Compounds.

 

In the event of a Change of Control of BPM, the exclusivity obligations of BPM
set forth in Section 2.5.1 and Section 2.5.2 will not apply to any research,
development or commercialization program or activities that, if conducted by BPM
at such time would be a breach of BPM’s exclusivity obligations in Section 2.5.1
or Section 2.5.2, (I) is owned, in-licensed or otherwise controlled by a Third
Party described in the definition of “Change of Control” or its Affiliates prior
to the closing of such Change of Control or (II) becomes owned, in-licensed or
otherwise controlled by such Third Party or its Affiliates (other than by BPM or
any of its direct or indirect subsidiary Affiliates) after the closing of such
Change of Control, in each case ((I) and (II)) if such BPM Other Program is
conducted independently of BPM’s activities under this Agreement and without any
use of any Roche Know-How, Roche Patent Rights or Roche Confidential Information
or material use (other than the retained rights above) of the Collaboration
Compounds. 

 

With respect to the two preceding paragraphs of this Section 2.5.4, BPM and its
Affiliates (including such Third Party and its Affiliates under the preceding
paragraph) will adopt reasonable procedures (which include appropriate
administrative, physical and technical safeguards, including underlying
operating system and network security controls and other firewalls) to prevent
the use of any Roche Know-How, Roche Patent Rights or Roche Confidential
Information or material use (other than the retained rights above) of the
Collaboration Compounds in a manner that is not in compliance with the two
preceding paragraphs of this Section 2.5.4.

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3.     Option of Roche

 

3.1     Option Right

 

3.1.1   General

On a Collaboration Target-by-Collaboration Target basis, Roche is granted up to
five (5) exclusive Option Rights to obtain an exclusive or co-exclusive license
to Exploit Products containing a Collaboration Compound directed to the
Collaboration Target to which the Option Right pertains in the Field in the
Territory.  Once the Option Right for a Collaboration Target is exercised, such
Products become “Licensed Products” and the program for the development and
commercialization of such Licensed Products becomes a “Program.”  The
designation of a Program as Program 1, Program 2, Program 3, Program 4 or
Program 5 will occur as specified in the definition of Program.

 

3.1.2   Grant of Option Right

On a Collaboration Target-by-Collaboration Target basis, BPM hereby grants to
Roche during the Option Period an exclusive Option Right for each Collaboration
Target to obtain the licenses set forth in Section 2.1.2, Section 2.1.3 and
Section 2.1.4 with respect to such Collaboration Target, Licensed Products and
Program. 

 

3.1.3   Exercise of Option Right

In the event the Option Data Package Trigger is determined pursuant to Section
1.83(a),for each Collaboration Target, within […***…] after the Option Data
Package Trigger, (i) each Party will deliver its portion of the Option Data
Package with respect to such Collaboration Target, and (ii) BPM will afford
Roche the information rights under Section 3.2.  In the event that Roche
determines that BPM’s Portion of an Option Data Package for a Collaboration
Target is incomplete or insufficient, then Roche shall provide written notice to
BPM identifying all such deficiencies.  If BPM disputes the existence of any
such deficiencies, BPM may, at its election, refer such dispute for resolution
in accordance with Section 8.8.3.  If BPM’s Portion of such Option Data Package
for a Collaboration Target is determined to be incomplete or insufficient, BPM
shall promptly upon curing all deficiencies re-deliver an updated version of
BPM’s Portion of such Option Data Package for such Collaboration Target to
Roche; provided that Roche may not request a further updated version of BPM’s
Portion of such Option Data Package for such Collaboration Target for a period
of […***…]. 

 

On a Collaboration Target-by-Collaboration Target basis, Roche shall have the
right to exercise its Option Right during the Option Period for a given
Collaboration Target.  Roche will exercise an Option Right for a Collaboration
Target, if at all, by properly delivering an Option Exercise Notice for such
Collaboration Target at any time during the Option Period for such Collaboration
Target.

 

In the event the Option Data Package Trigger is not determined pursuant to
Section 1.83(a), the JDC will set a cut-off date for the data resulting from the
Phase I Studies conducted by the Parties for each Collaboration Target so that
such data may be included in an Option Data Package for such Collaboration
Target in a timely fashion. Such cut-off date shall be determined as follows: 

 

(a)  […***…] 

 

(b)  […***…]    

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In the event that (a) a Product is for a […***…], (b) such Product satisfies all
Option Data Criteria other than the […***…], and (c) Roche wishes to extend the
Option Period for such Collaboration Target until all of the Option Data
Criteria are satisfied (but in any event no longer than the […***…] anniversary
of the date the MTD for the first Combination Product for such […***…] is
confirmed by the JDC plus […***…]), then Roche shall provide written notice to
BPM of Roche’s election to extend the Option Period and pay to BPM an Option
Period extension fee equal to (v) […***…] for the first Collaboration Target for
which Roche exercises its extension right under this Section 3.1.3, (w) […***…]
for the second Collaboration Target for which Roche exercises its extension
right under this Section 3.1.3, (x) […***…] for the third Collaboration Target
for which Roche exercises its extension right under this Section 3.1.3, (y)
[…***…] for the fourth Collaboration Target for which Roche exercises its
extension right under this Section 3.1.3, and (z) […***…] for the fifth
Collaboration Target for which Roche exercises its extension right under this
Section 3.1.3.  Such Option Period extension fee shall be due and payable by
Roche to BPM within thirty (30) days after the determination that such Product
satisfies all Option Data Criteria other than the […***…].  The Parties agree
that […***…] of any such Option Period extension fee payment […***…] in
accordance with Section 12.4, provided that (i) each Option Period extension fee
payment […***…] only if Roche exercises its Option Right for such Collaboration
Target, and (ii) any amounts that are […***…] in accordance with Section 12.4
(but may not be applied to any other payments under this Agreement).  […***…]
for each Collaboration Target […***…] will be due and payable after Roche’s
exercise of its Option Right for such Collaboration Target in accordance with
Section 12.4.  In the event that (a) a Product is for a […***…], (b) such
Product satisfies all Option Data Criteria other than the […***…], and (c) Roche
does not pay the Option Period extension fee as set forth above, then such
[…***…] shall be a Terminated Target.

 

For any Collaboration Target to which Roche does not timely exercise its Option
Right, then, effective as of the expiration of the Option Period for such
Collaboration Target, (a) all research and development activities with respect
to such Collaboration Target shall terminate, (b) such Collaboration Target
shall become a Leftover Target, (c) BPM shall retain all rights, title and
interest in and to all Library Compounds, Other Compounds, Collaboration
Compounds and Products for such Collaboration Target, (d) all rights and
obligations (including the licenses to Roche) under this Agreement with respect
to such Collaboration Target shall terminate, (e) the right of first negotiation
and matching right under Section 2.2 with respect to such Collaboration Target
shall terminate, and (f) the exclusivity provisions under Section 2.5 shall
terminate.  For clarity, if Roche does not timely exercise its Option Right
related to a given Collaboration Target, and BPM desires to continue to
research, develop or commercialize such Collaboration Compound or Product in
combination with a Roche Clinical Compound or Roche Marketed Products, then
Roche will consider, at its sole discretion, supplying such Roche Clinical
Compound or Roche Marketed Products to BPM or its designee pursuant to a supply
agreement on terms and conditions to be agreed upon by the Parties in good
faith.

 

3.1.4   One Time Program Switch Right

After Roche’s receipt of the first Option Data Package for a Collaboration
Target or at the end of the Option Period for the first Collaboration Target,
Roche shall have a one-time right to exercise its Option Right for such
Collaboration Target by declaring such Collaboration Target as “Program 2”,
thereby declaring the next most advanced Collaboration Target as designated by
the JRC or JDC (as applicable) as “Program 1” (the “Switch”).  If Roche elects
to make the Switch, then Roche shall provide written notice to BPM prior to
expiration of the Option Period for the first Collaboration Target of Roche’s
election to make the Switch and identify the Collaboration Target

 

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that will be “Program 2” and the Collaboration Target that will be “Program
1”.  If Roche makes the Switch, then Roche shall pay both the Program 1 Option
Exercise Fee and the Program 2 Option Exercise Fee as set forth in Section 12.4,
subject to the limitations in the following paragraph.

 

In the event that Products for Program 1 and Program 2 are each being developed
or planned to be developed in Phase I Studies as Products for a […***…] pursuant
to Section 5.1.3, then, simultaneously with the Switch, Roche shall exercise its
Option Right with respect to the next most advanced Collaboration Target as
designated by the JRC or JDC (as applicable) making it “Program 1”.  The Program
1 Option Exercise Fee shall be payable as set forth in Section 12.4, i.e.
[…***…] within […***…] after Roche exercises its Option Right and receipt of an
invoice from BPM.  If such next most advanced Collaboration Target has reached
MTD more than […***…] prior to the Switch election, then the Program 2 Option
Exercise Fee (i.e., […***…]) shall be payable at the same time as the Program 1
Option Exercise Fee.  If such next most advanced Collaboration Target has either
not yet reached MTD or not reached MTD within […***…] preceding the Switch, then
the Program 2 Option Exercise Fee (i.e., […***…]) shall be payable only
(i) after BPM has provided Roche with the Option Data Package for the
Collaboration Target declared as Program 1 as per the Switch, and Roche has
determined, within […***…] after Roche receives the Option Data Package, to not
exercise its termination right with respect to the Collaboration Target declared
as Program 1 as per the Switch, or (ii) upon Roche Initiating a Clinical Study
of a Product or Licensed Product against the Collaboration Target declared as
Program 1 as per the Switch. For clarity, if either Program 1 or Program 2 or
both are being developed as a […***…] and Roche elects to make the Switch,
payments of the Option Exercise Fee for each such Program shall be in accordance
with Section 3.1.3 and Section 12.4.

 

3.2     Information Sharing for Option Rights

After the Option Data Package Trigger for each Collaboration Target and for the
remainder of the Option Period with respect to such Collaboration Target, (i)
Roche shall have the right to perform reasonable due diligence (including visits
to the facilities in which the data were generated and interviews with the
persons generating the data) with respect to such Collaboration Target and the
applicable Collaboration Compounds and Products, and (ii) representatives of
Roche shall have the opportunity to ask questions of and receive answers from
representatives of BPM related to the work that has been conducted and the data
that have been generated with respect to such Collaboration Target and the
applicable Collaboration Compounds and Products. BPM shall respond to Roche’s
inquiries in a timely fashion and without delay and shall not withhold any
material information regarding such Collaboration Target and the applicable
Collaboration Compounds and Products from Roche in response to Roche’s
inquiries.  For clarity, the disclosure and use of any structures or structural
information of the Collaboration Compounds and Products pursuant to this Section
3.2 will be subject to the terms of Section 4.1.4, mutatis mutandis. 

 

4.     Research Collaboration

 

4.1     Conduct of the Research

 

4.1.1   Scope

On a Collaboration Target-by-Collaboration Target basis, BPM shall have lead
responsibility for the conduct of all research of Library Compounds, Other
Compounds and Collaboration Compounds in the Field in the Territory.  The
activities conducted under each Research Plan will be overseen by the JRC.  For
clarity, prior to exercise of its Option Right for a Collaboration Target,

 

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Roche and its Affiliates shall not conduct any research activities under this
Agreement with respect to such Collaboration Target except as expressly
permitted in the Research Plans.  It is understood and agreed that (a) Roche
shall not, under this Agreement, research, develop, manufacture or commercialize
any Library Compounds, Other Compounds or Collaboration Compounds (and
corresponding Products) unless such activities are included in a Research Plan
or Phase I Plan, and (b) on a Collaboration Target-by-Collaboration Target
basis, upon the start of the first GLP Tox Study of a Collaboration Compound
satisfying the CCS Criteria for such Collaboration Target (e.g., the most
advanced such Collaboration Compound for such Collaboration Target), BPM shall
not be required under this Agreement to conceive or make any new compounds as
potential Collaboration Compounds for such Collaboration Target.

 

4.1.2   Diligent Efforts

On a Collaboration Target-by-Collaboration Target basis, Roche and BPM shall
each use Commercially Reasonable Efforts to perform their respective tasks and
obligations in conducting all activities ascribed to it in the then-current
Research Plan for such Collaboration Target in the Field, in accordance with the
time parameters set forth therein.

 

4.1.3   Research Plans

Unless decided otherwise by the JRC, the Research Plans will be updated at least
annually by the JRC and approved by the JRC. The Research Plans will set forth
(i) the scope of the research and the resources that will be dedicated to the
activities contemplated, including the responsibilities of each Party,
(ii) specific objectives for each year, which objectives will be updated or
amended, as appropriate, by the JRC as research progresses, and (iii) key
deliverables for each Party. The Parties shall prepare a Research Plan for (a)
the first three (3) Collaboration Targets (each of […***…],  […***…] and
[…***…]), within thirty (30) days after the Effective Date, and (b) for each
additional Collaboration Target, within thirty (30) days after the designation
of such Target as a Collaboration Target, which the JRC shall minute.  The JRC
shall review the Research Plans on an ongoing basis and may amend the Research
Plans.  Any such changes shall be reflected in written amendments to the
Research Plans.

 

4.1.4   Backup Compounds

The JRC and JDC shall ensure that the Research Plan and Phase I Plan for each
Collaboration Target contains a plan for the research and development of Backup
Compounds.  […***…].  Progress of up to […***…] Collaboration Compounds
satisfying CCS Criteria through GLP Tox Studies for a Collaboration Target shall
be at BPM’s sole expense.  Additional Backup Compounds may be progressed through
a GLP Tox Study at Roche’s sole discretion and expense (including any supply
thereof) as part of the Research Plan and under the supervision of the JRC,
provided that BPM will have the right to conduct (or have conducted) any such
GLP Tox Study, and if BPM elects such right then Roche shall reimburse BPM for
any personnel costs, Allocable Overhead or Out of Pocket Expenses incurred by
BPM with respect thereto.  All Phase I Development Costs for the first Backup
Compound for a Collaboration Target in a Phase I Study shall be shared as set
forth in Section 12.5 (including subject to the cap stated therein); provided
that BPM shall only be obligated to fund one (1) Collaboration Compound for a
Collaboration Target at a time in a Phase I Study.  Thereafter, all Phase I
Development Costs for any Backup Compound for a Collaboration Target in a Phase
I Study shall be at Roche’s sole expense and discretion (including any supply
thereof) as part of the Phase I Plan and under the supervision of the JDC,
provided that BPM will have the right to conduct (or have conducted) any such
Phase I

 

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Study, and if BPM elects such right then Roche shall reimburse BPM for any Phase
I Development Costs incurred by BPM with respect thereto. 

 

4.1.5   Part 1 Activities

In Part 1, the Parties will work on the three (3) specified Collaboration
Targets: […***…],  […***…] and […***…]. Prior to the JRC determining that
[…***…] has satisfied […***…], the Parties may upon mutual written agreement
replace […***…] with another Collaboration Target. The Parties will select an
additional two (2) Collaboration Targets in Part 2, as described in
Section 4.1.6.

 

For each Collaboration Target, BPM will select Library Compounds of different
scaffolds offering different starting chemistry points, and exhibiting adequate
kinase potency, activity in binding, enzyme and/or biochemical and cell-based
assays, kinase selectivity, and ADME characteristics.

 

Such Library Compounds shall be derivatized by BPM to improve potency,
selectivity and ADME profile characteristics (via application of applicable
kinase binding assays, cellular target engagement measurements, and in vitro
ADME profiling), and thereby establish structure-activity relationships of
different compound series, including Other Compounds and Collaboration
Compounds. […***…].  

 

Further optimization of potency, selectivity and ADME profile characteristics of
Library Compounds, Collaboration Compounds and Other Compounds by BPM during
Lead Optimization shall enable in vivo Animal POC experiments of selected
Collaboration Compounds by Roche or a CRO (provided that Roche shall continue to
bear responsibility for the conduct of such experiments). Additional
ADME/PK/safety/stability testing and pre-formulation activities performed by BPM
during Lead Optimization shall help identify Collaboration Compounds meeting CLS
Criteria and finally CCS Criteria. The JRC shall discuss the use of CROs for
such activities. Any CRO recommended by the JRC shall either be listed in
Appendix 1.38 or otherwise approved by Roche (such approval not be unreasonably
withheld, conditioned or delayed). […***…]. At Lead Nomination and/or during
Lead Optimization, as per Section 8.4, the JRC will also recommend whether
Roche’s chemistry resources should be included in Lead Optimization to address
issues including BPM resource constraints or to assist with problem-solving. In
summary, the work during Lead Optimization is being performed by BPM, with Roche
providing protein crystallography and modeling support and input to the
preclinical evaluation, and the JRC recommending further Roche contributions
including chemistry resources.  For clarity, except as provided for in Section
21.2.3, the Roche Group is granted no right under this Agreement to perform any
medicinal chemistry activities with respect to Library Compounds, Other
Compounds, Collaboration Compounds, Products or Licensed Products under this
Agreement unless authorized by the JRC or by the mutual agreements of the
Parties.

 

A chemistry expert at Roche (“Insulated Chemistry Expert”) shall be designated
in writing by Roche to review structures of Other Compounds and Collaboration
Compounds at the start of the collaboration and throughout the Lead Nomination
phase. The Insulated Chemistry Expert shall independently handle the structural
information and no structures provided by BPM to the Insulated Chemistry Expert
can be shared with any other individuals within Roche other than members of
senior management specified on Appendix 4.1.5 acting in their decision making
capacity. For clarity, these structures cannot be used for any other purpose,
including any research purpose.  Appropriate safeguards will be established by
Roche that are intended to prevent any inadvertent disclosure or improper use of
these structures and any structural information related to such structures. From
Lead Nomination onwards and throughout Lead Optimization, the structures of
Other Compounds and Collaboration Compounds in the Lead

 

34

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Optimization phase shall be shared with the Roche project team members
(including Collaboration Compounds meeting Lead Series Identified Criteria, CLS
Criteria and CCS Criteria).

 

In order to enable manufacture of batches of selected Collaboration Compounds
for GLP Tox Studies, BPM or Roche (as determined by the JRC) shall initiate
activities for manufacturing process optimization (including establishment of an
entry into GLP Tox manufacturing process), entry into GLP Tox formulations, GLP
analytics including establishment of specifications for drug substance and drug
product at the appropriate time point after CLS, with specifications aligned by
the JRC in accordance with Section 8.4. […***…] At the meeting of CCS Criteria,
an entry-into-human formulation strategy shall also be available and aligned by
the JRC.

 

Subject to Section 4.1.4, GLP Tox Studies, after confirmation of Collaboration
Compound exposure with the GLP Tox batch, shall be performed by BPM in both
rodent and non-rodent species […***…], at BPM’s expense, as a final step of the
preclinical phase at a CRO approved by Roche (such approval not to be
unreasonably withheld, conditioned or delayed) unless the CRO is already listed
in Appendix 1.38.

 

4.1.6     Part 2 Activities

Part 2 shall start with Screening of Library Compounds selected by both Parties
(e.g., the diversity set comprised in BPM Technology) in both assays performed
by BPM (Jurkat-cell based) and by Roche ([…***…]), and the screening and
validation phase of Part 2 shall end on the earlier of […***…]. It is
anticipated that the Screening phase will last approximately […***…]. Screening
Hits shall be selected by the JRC and taken forward into Target Validation, with
the Target Validation plan approved by the JRC, including any Library Compound
derivatization during the Target Validation phase to test Library Compounds,
Other Compounds and Collaboration Compounds. It is anticipated that at least
[…***…] as a shared effort between BPM and Roche with studies being performed by
both Parties. Target Validation aims to deliver a pool of validated
Collaboration Targets as determined by the JRC (“Pool”). For Collaboration
Targets selected in Part 2, a Research Plan will be established prior to
initiating Lead Nomination Activities based on Library Compounds, Other
Compounds or Collaboration Compounds identified during the respective Target
Validation. The JRC shall select the Collaboration Targets from the Pool to be
further pursued in Part 2 for Lead Nomination. If the JRC is unable to reach
consensus on the selection of Collaboration Targets to pursue in Part 2, then
Roche and BPM shall each select one (1) Collaboration Target for Part
2.  Activities from Lead Nomination onwards for such selected Part 2
Collaboration Targets shall follow the outline described under Part 1
activities. If Collaboration Compounds for a given Target from this Part 2 fail
no later than in in vivo Animal POC experiments performed by or on behalf of
Roche, and provided there are additional Collaboration Targets remaining in the
Pool, then the JRC may replace a Collaboration Target with another Collaboration
Target from the Pool. The JRC’s replacement right shall not exceed two (2)
Collaboration Target replacements, and shall not extend beyond completion of
Animal POC experiments for such Collaboration Targets. If the JRC is unable to
reach consensus on a replacement for a Collaboration Target, then
[…***…].  After the JRC’s right to replace Collaboration Targets from the Pool
has ended pursuant to this Section 4.1.6, all Collaboration Targets still then
within the Pool shall automatically become Leftover Targets, and both Parties
shall have rights to further research and develop compounds and products related
to any Leftover Targets outside of the Agreement without any financial
obligations owed to the other Party.  For clarity, (a) the JRC shall have the
right to replace […***…] as set forth in Section 4.1.5, (b) the JRC shall have
the right to replace the fourth or fifth Collaboration Targets no later than in
in vivo Animal POC experiments for such Collaboration Target as set forth in
this Section 4.1.6, and (c) the JRC shall have no right to replace […***…] or
[…***…].

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4.2   Records; Reports

 

4.2.1   Progress Reports

At least quarterly during the Research and Development Term, (i) BPM shall
prepare and provide to the JRC a detailed summary of the progress of the work
performed by BPM under the Research Plans during the preceding Calendar Quarter
and (ii) Roche shall update the JRC with a detailed summary of the progress of
the work performed by Roche under the Research Plans during the preceding
Calendar Quarter.  Promptly upon expiry of the Research and Development Term,
each Party shall provide a final written report to the JRC summarizing its
activities under the Research Plans and the results thereof.

 

4.2.2   Research Records

Each Party shall maintain records of all research conducted under the Research
Plans (or cause such records to be maintained) in sufficient detail and in good
scientific manner as will properly reflect all work done and results achieved by
or on behalf of such Party in the performance of activities under the Research
Plans. All laboratory notebooks shall be maintained for no less than the term of
any Patent Rights issuing therefrom.

 

5.     Conduct of the Phase I Program

 

5.1     Phase I Program

 

5.1.1   Scope

On a Collaboration Target-by-Collaboration Target basis, BPM shall have the lead
responsibility for the conduct of all Phase I Studies (even if Roche elects to
exercise its Option Right before the completion of Phase I Studies), other than
those Phase I Studies involving Roche Clinical Compounds or Roche Marketed
Products, in accordance with the Phase I Plans.  Roche shall have the right to
conduct all Phase I Studies involving Roche Clinical Compounds or Roche Marketed
Products in accordance with the Phase I Plans. The activities conducted in
connection with the Phase I Program will be overseen by the JDC.  For clarity,
Roche and its Affiliates shall not conduct any Phase I Studies with respect to
such Collaboration Target except as expressly permitted in the Phase I Plans.

 

5.1.2   Diligent Efforts

For each Collaboration Target, Roche and BPM shall each use Commercially
Reasonable Efforts to perform their respective tasks and obligations in
conducting all activities ascribed to it in the then-current Phase I Plan for
such Collaboration Target, in accordance with the time parameters set forth
therein.

 

5.1.3   Phase I Plan

The JDC shall strive by consensus to prepare a Phase I Plan for each
Collaboration Target no later than thirty (30) days after the start of GLP Tox
Studies for such Collaboration Target.  Each Collaboration Target will be
designated by the JDC as either a […***…] or a […***…] in the applicable Phase I
Plan.  […***…], the JDC shall amend the Phase I Plan for such Collaboration
Target (if needed). 

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BPM shall prepare the initial draft of each Phase I Plan for any […***…], unless
the combination is with a Roche Clinical Compound or Roche Marketed Product, in
which case Roche shall prepare the initial draft of each such Phase I Plan.  The
JDC shall review each Phase I Plan on an ongoing basis and may amend such Phase
I Plan.  Any such changes shall be reflected in written amendments to such Phase
I Plan. The Parties will conduct the Phase I Program in accordance with the
Phase I Plans. Each Phase I Plan will set forth (i) the scope of the initial
Phase I Studies for such Collaboration Target and the resources that will be
dedicated to the activities contemplated within the scope of such Phase I
Studies, including the responsibilities of each Party, (ii) projected patient
enrollment rates consistent with Roche’s historic enrollment rates for similar
drug candidates in Phase I Studies, (iii) specific objectives for Calendar Year
end in which such initial Phase I Studies are conducted, which objectives will
be updated or amended, as appropriate, by the JDC as development progresses, and
(iv) a rolling two (2) year budget for such anticipated activities to be
performed during the then-current Calendar Year and the next Calendar Year, and
a forecast of the budgets for each subsequent Calendar Year thereafter through
completion of all development activities set forth in such Phase I Plan;
provided that BPM shall have no obligation to incur any Phase I Development
Costs in excess of […***…] for all Phase I Studies for each Phase I Plan for
each Collaboration Target as further described in Section 12.5. […***…]. 

 

5.1.4   Phase I Studies

BPM shall keep Roche informed and consult with Roche as needed through the JDC
on the progress of Phase I Studies conducted by BPM. 

 

5.1.5   Duration

On a Collaboration Target-by-Collaboration Target basis, the Phase I Program for
a Collaboration Target shall commence on the start of the first Phase I Plan for
such Collaboration Target and shall continue until the expiration of the Option
Period for such Collaboration Target.   […***…].   

 

5.2     Records; Reports

 

5.2.1   Progress Reports

At least quarterly during the Phase I Program, (i) BPM shall prepare and provide
to the JDC a detailed summary of the progress of the work performed by BPM under
the Phase I Plans during the preceding Calendar Quarter and (ii) Roche shall
prepare and provide to the JDC a detailed summary of the progress of the work
performed by Roche under the Phase I Plans during the preceding Calendar
Quarter. Promptly upon expiry of the Research and Development Term, each Party
shall provide a final written report to the JDC summarizing its activities under
the Phase I Plans and the results thereof.

 

5.2.2   Phase I Records

Each Party shall maintain records of all Phase I Studies conducted under the
Phase I Plans (or cause such records to be maintained) in sufficient detail and
in good scientific manner as will properly reflect all work done and results
achieved by or on behalf of such Party in the performance of activities under
the Phase I Plans.  All laboratory notebooks shall be maintained for no less
than the term of any Patent Rights issuing therefrom.

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6.     Diligence

 

Each Party shall use Commercially Reasonable Efforts in the conduct of each
Research Plan and Phase I Plan. 

 

For any Collaboration Target for which Roche exercises its Option Right, Roche
shall use Commercially Reasonable Efforts to further develop (pursuant to the
agreed Development Plan) and commercialize at least one (1) Licensed Product in
at least one (1) Indication in the Field in the Roche Territory.

 

For Program 2 and Program 4, BPM shall use Commercially Reasonable Efforts to
further develop (pursuant to the agreed Development Plan) and commercialize at
least one (1) Licensed Product in at least one (1) Indication in the Field in
the BPM Territory.

 

7.     Development

 

7.1     Scope

Subject to the terms of this Section 7, after exercise of its Option Right for a
Collaboration Target and other than with respect to the Phase I Program, (i)
subject to Section 7.3, Roche shall have responsibility for the conduct of all
clinical development for Licensed Products in the Field in the Territory subject
to the applicable sharing of Phase I Development Costs and Development Costs,
(ii) Roche shall have responsibility for the design and conduct of all research
and development of Companion Diagnostics for Licensed Products in the Field in
the Territory, and (iii) Roche shall have the responsibility for the design of,
and the right to conduct, all Clinical Studies for a given Collaboration Target
involving Roche Clinical Compounds or Roche Marketed Products. Clinical
development of Licensed Products in the Field in the Territory shall be overseen
by the JDC subject to Section 7.3.

 

7.2     Management

 

For development of Licensed Products in Program 1, Program 3, and Program 5,
Roche shall keep BPM informed of clinical development activities for Licensed
Products in the Field in the Roche Territory and share the Development Plan
through the JDC. Roche shall be responsible for all decision making with respect
to clinical development of Licensed Products in Program 1, Program 3 and Program
5 in the Field in the Roche Territory.

 

7.3     Development of Program 2 and Program 4

 

7.3.1   Consensus and Label Pursuits

For development of Licensed Products in Program 2 and Program 4, the Parties
shall strive to reach consensus on the Development Plan through the JDC with the
intent to establish a global clinical plan that benefits both Parties in their
respective regions for commercialization. If the JDC is unable to agree on
elements of the Development Plan (as to Indications, Label Pursuits, or design
of the global Clinical Studies), then Roche shall have final say with respect to
the Development Plan where such Development Plan shall include no more than a
total of […***…] (each a “Label Pursuit”) of which no more than a total of
[…***…] Label Pursuits may include simultaneous Pivotal  Studies) unless the
Parties mutually agree otherwise, provided that if the Parties mutually agree to
co-formulate a Combination Product involving Roche Clinical Compounds or Roche
Marketed Products, then the Parties shall mutually agree to the applicable
portion of the Development Plan. By way of example, triple negative breast
cancer and hormone-receptor positive breast cancer shall be considered two (2)
distinct Label Pursuits.

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7.3.2   Supplemental Studies

Roche shall have responsibility for the conduct of all Clinical Studies for
Licensed Products in the Field in the Territory pursuant to the Development Plan
other than Supplemental Studies.  In addition, after the first Regulatory
Approval for a Licensed Product, to the extent that (a) a Party desires to
conduct any Clinical Studies in a Label Pursuit for such Licensed Product that
is not included in the Development Plan, (b) a Party desires to conduct any
Clinical Studies for such Licensed Product that are specific to a Party’s
portion of the Territory, or (c) a Party desires to conduct any Post-Marketing
Studies or other post-marketing commitments as mandated or agreed to be conduct
with a Regulatory Authority for such Licensed Product, in each case ((a)-(c))
for such Licensed Product that the other Party does not desire to co-fund (each
a “Supplemental Study”), the Party desiring to conduct such Supplemental
Study(ies) may do so at its own cost and expense in its Territory or in the
other Party’s Territory, subject to the following limitations in this Section
7.3.2.

 

If a Party wants to conduct a Supplemental Study for a Licensed Product in the
other Party’s Territory, such Supplemental Study shall require the consent of
such other Party, which consent shall not be unreasonably withheld by such other
Party; provided that such consent may be reasonably withheld by such other Party
if such other Party determines in good faith using industry-reasonable criteria
that such Supplemental Study would likely cause commercial harm to such other
Party or its Affiliates or Sublicensees in such other Party’s respective
Territory.  At the request of the Party proposing to conduct such Supplemental
Study, such other Party shall explain at the JDC the basis for its determination
to withhold its consent to such Supplemental Study in such other Party’s
Territory.  If the Party proposing to conduct the Supplemental Study believes
that it is impractical or such Party will be unable to fulfill a post-marketing
commitment mandated or agreed to with a Regulatory Authority unless such
Supplemental Study is conducted in the other Party’s Territory, the Party
proposing to conduct such Supplemental Study shall have the burden of
demonstrating that it is impractical or unable to conduct such Supplemental
Study unless such Supplemental Study is conducted in the other Party’s
Territory.

 

The other Party shall have the right (but not the obligation) (the “Supplemental
Study Opt-In Right”) to access any study reports and data of such Supplemental
Study(ies) that such other Party did not co-fund for purposes of Filing for
Regulatory Approval in such other Party’s Territory by paying […***…] of the
Development Costs incurred by the Party conducting such Supplemental Study. 

 

For clarity, for Program 2 and Program 4 (i) conduct of Clinical Studies
(including Supplemental Studies) in non-oncology Indications shall require
mutual agreement of the Parties, and (ii) conduct of Clinical Studies (including
Supplemental Studies) using Roche Marketed Products shall require the written
consent of Roche.

 

7.3.3   Shared Development Costs

Within sixty (60) days after exercising its Option Right with respect to each of
Program 2 and Program 4, Roche shall provide BPM with an initial Development
Plan and a budget for such Program outlining the planned activities and related
Development Costs (“Shared Development Cost Budget”) for such Development Plan.
The Shared Development Cost Budget shall include the anticipated Development
Costs pursuant to the Development Plan for the remainder of the then current
Calendar Year and each of the next two (2) Calendar Years expected to be
incurred by each Party and in total. Thereafter, annually, the Development Plan
and the Shared Development Cost Budget shall be updated by the JDC such that the
Shared Development Cost

 

39

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Budget shall always reflect the planned activities under the Development Plan
for three (3) Calendar Years. If a Party’s actually incurred Development Costs
for the current Calendar Year exceeds […***…] of its portion of the Shared
Development Cost Budget, such excess portion of Development Costs shall be
entirely borne by the Party that exceeded its portion of the Shared Development
Cost Budget provided that (A) BPM approved the amount included in the Shared
Development Cost Budget specifically attributable to the activities conducted by
BPM under such Shared Development Cost Budget, and (B) the JDC shall have the
right during a Calendar Year to update the Shared Development Cost Budget in the
event of (i) faster than planned Clinical Study enrollment, (ii) written
guidance or requirements from a Regulatory Authority that would result in
amendments to the Development Plan or (iii) mutual agreement by the Parties to
amend the Development Plan, each of (i), (ii) and (iii) an “Allowable
Exception”.  Additional Development Costs incurred in a Calendar Year resulting
from an Allowable Exception shall be subject to sharing of Development Costs
pursuant to Section 12.6.

 

7.3.4   Deferrable Amounts

If the annual update to the Development Plan for such Program results in the
Shared Development Cost Budget for the first remaining Calendar Year of the
Shared Development Cost Budget increasing by more than […***…] from the then
current Shared Development Cost Budget for the then-current Calendar Year or the
second remaining Calendar Year increasing by more than […***…] from the then
current Shared Development Cost Budget for such Program for the then-current
Calendar Year, after taking into consideration any Allowable Exceptions, then
BPM shall have the right to elect not to pay its share of actually incurred
Development Costs for such Program for such Calendar Year exceeding such
percentage of the previous Shared Development Cost Budget for such Program for
such Calendar Year (such amount a “Deferrable Amount” and such election a (“BPM
Deferral Election”)). If BPM makes a BPM Deferral Election, Roche may elect to
either (i) deduct or withhold payments payable to BPM under Section 12.7, 12.8
or 12.9 until […***…] of the Deferrable Amount is repaid to Roche or (ii)
increase the royalty rates payable by BPM to Roche under Section 12.9.3 by
[…***…] (e.g., the first royalty tier would become […***…]) until […***…] of the
Deferrable Amount is repaid to Roche, provided that at any time BPM may elect to
repay […***…] of such Deferrable Amount in part or in full to Roche in
cash.  Notwithstanding the foregoing, BPM shall not have the right to make a BPM
Deferral Election for any Calendar Year after the First Commercial Sale in the
United States for any Licensed Product under this Agreement.

 

The following is an example that illustrates a possible scenario involving a
Licensed Product for a […***…]:

 

In this example, the Shared Development Cost Budget was provided to BPM in June
2019 in millions of US dollars (US$ Millions) and BPM approved the costs of
activities performed by BPM.

 

 

 

 

 

 

June-Dec 2019 (budgeted)

Jan-Dec 2020 (budgeted)

Jan-Dec 2021 (budgeted)

 

 

 

 

Roche

[…***…]

[…***…]

[…***…]

 

 

 

 

BPM

[…***…]

[…***…]

[…***…]

 

 

 

 

Total

[…***…]

[…***…]

[…***…]

 

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The Shared Development Cost Budget was provided to BPM for 2020, 2021 and 2022
in millions of US dollars (US$ Millions) and BPM approved costs of activities
performed by BPM.

 

 

 

 

 

 

 

June-Dec 2019

Jan-Dec 2020

Jan-Dec 2021

Jan-Dec 2022

 

(Actual)

(Budgeted)

(Budgeted)

(Budgeted)

 

 

 

 

 

Roche

[…***…]

[…***…]

[…***…]

[…***…]

 

 

 

 

 

BPM

[…***…]

[…***…]

[…***…]

[…***…]

 

 

 

 

 

Total

[…***…]

[…***…]

[…***…]

[…***…]

 

As a consequence:

 

- For 2019, both parties share […***…] the amount of […***…]  + […***…]  =
[…***…]

 

- For 2019, Roche bears on its own the amount of […***…], which […***…] of the
originally budgeted amount of […***…]

 

- BPM can elect the BPM Deferral Election for 2020 because the increase in total
budget from […***…] to […***…] is […***…]

 

(For the below sections we assume that BPM made such election.)

 

- No Deferral Election can be made for 2021 because the increase in total budget
from […***…] to […***…] is […***…]

 

The Shared Development Cost Budget provided to BPM for 2021, 2022 and 2023 in
millions of US dollars (US$ Millions) and BPM approved costs of activities
performed by BPM.

 

 

 

 

 

 

 

 

June-Dec 2019

Jan-Dec 2020

Jan-Dec 2021

Jan-Dec 2022

Jan-Dec 2023

 

(Actual)

(Actual)

(Budgeted)

(Budgeted)

(Budgeted)

 

 

 

 

 

 

Roche

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

 

 

 

 

 

 

BPM

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

 

 

 

 

 

 

Total

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

 

As a consequence:

 

- For 2020, because of BPM’s deferral election, both parties share […***…] the
amount of […***…]

 

- BPM pays on its own the […***…], which exceeds the […***…] % of the previously
budgeted amount of […***…]

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- Roche pays on its own the remaining […***…]  ([…***…] total less […***…]shared
costs less […***…] solely borne by BPM)

 

- Roche is entitled to a repayment of […***…] % of BPM's share of the […***…].

 

- BPM's share of the […***…] equals […***…] and Roche's reimbursement equals
[…***…][…***…]

 

- No Deferral Election for 2021 because the increase in total budget from
[…***…] to […***…] is […***…]

- No Deferral Election for 2022 because the increase in total budget from
[…***…] to […***…] is […***…]

 

7.3.5   Updates

For Program 2 and Program 4, each Party will periodically provide to the JDC, on
a Calendar Quarter basis, or more frequently as reasonably requested by the JDC,
an update regarding development activities conducted by or on behalf of such
Party with respect to Licensed Products for such Program, as well as any
Supplemental Studies, conducted by or on behalf of such Party with respect to
Licensed Products for such Program.  The Parties will periodically report to the
JDC, but in no event less than on a Calendar Quarter basis, regarding their
respective activities conducted under the Development Plan for Licensed Products
for such Program. In addition, each Party will promptly share with the other
Party all material developments and information that it comes to possess
relating to the development of any Licensed Products for such Program and all
other data and information that either Party may reasonably request to support
Filings in a mutually agreed format, including (a) safety concerns for Licensed
Products for such Program, and (b) study reports and data generated from
Clinical Studies of such Licensed Products for such Program; provided however,
that excluding safety concerns or as required under the Pharmacovigilance
Agreement, a Party will not be obligated to share any study reports and data
generated from Supplemental Studies conducted by or on behalf of such Party
unless the non-proposing Party has not exercised its Supplemental Study Opt-In
Right other than to permit the non-proposing Party to determine whether to
exercise its Supplemental Study Opt-in Right.

 

7.3.6   Records

Each Party will maintain scientific records, in sufficient detail and in sound
scientific manner appropriate for Patent and regulatory purposes and in
compliance with cGCP with respect to activities intended to be submitted in
regulatory filings (including INDs and BLAs), which will fully and accurately
reflect all work done and results achieved in the performance of the Development
activities, Clinical Studies (including Supplemental Studies) with respect to
Licensed Products by such Party.

 

8.     Governance

 

8.1     Joint Research Committee

Within thirty (30) days after the Effective Date, the Parties shall establish a
JRC to oversee all activities under the Research Plans.

 

8.2     JDC

 

Within thirty (30) days after the first Collaboration Compound achieving CLS
Criteria, the Parties shall establish a JDC to oversee development of Products
and Licensed Products.

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8.3     Members

The JRC and JDC shall each be composed of six (6) persons (“Members”). Roche and
BPM each shall be entitled to appoint three (3) Members with appropriate
seniority, responsibilities and functional expertise within the applicable Party
to make decisions arising within the scope of the JRC’s or JDC’s, as applicable
(each such appointee of Roche, a “Roche Member,” and each such appointee of BPM,
a “BPM Member”); provided that one Roche Member shall have CMC-related
decision-making authority on behalf of Roche at all times. Each Party may
replace any of its Members and appoint a person to fill the vacancy arising from
each such replacement. A Party that replaces a Member shall notify the other
Party at least ten (10) days prior to the next scheduled meeting of the JRC or
JDC, as applicable. Both Parties shall use reasonable efforts to keep an
appropriate level of continuity in representation. Both Parties may invite a
reasonable number of additional experts and/or advisors to attend part or the
whole meeting with prior written notification to the JRC or JDC, as applicable.
Members may be represented at any meeting by another person designated by the
absent Member. Each committee is chaired by a Member (“Chairperson”). The JRC
shall be chaired by a BPM Member.  The JDC shall be chaired by a Roche Member.

 

8.4     Responsibilities of the JRC

The JRC shall have the responsibility and authority to:

 

(a)        approve each Research Plan and any revisions thereto;

 

(b)        review and oversee the execution of the Research Plans;

 

(c)        approve the Screening plan and any changes thereto;

 

(d)        select Screening Hits for Target Validation;

 

(e)        select Collaboration Targets in Part 2 in accordance with Section
4.1.6;

 

(f)        approve the Target Validation plan and any changes thereto;

 

(g)        approve validated Collaboration Targets to be allocated to the Pool
in Part 2;

 

(h)        maintain a list of Collaboration Targets;

 

(i)        establish timelines for research decision points;

 

(j)        determine Compound Criteria;

 

(k)        determine whether criteria have been met (Compound Criteria, Lead
Series Identified Criteria, CLS Criteria, CCS Criteria);

 

(l)        select all Backup Compounds;

 

(m)        maintain a list of all Collaboration Compounds, including Backup
Compounds;

 

(n)        determine and maintain a list of all Collaboration Targets in order
of advancement of status;

 

(o)        review the research efforts of the Parties;

 

(p)        identify appropriate resources necessary to conduct the Research
Plans (including recommending whether Roche’s chemistry resources should be
included in Lead Optimization, e.g. in order to increase the number of parallel
activities on multiple series in a Research Plan or for multiple Research Plans
or to address specific optimization questions in Lead Optimization);

 

(q)        determine when and where to perform any pre-formulation activities,
salt screening, and polymorph screening in accordance with CLS Criteria and CCS
Criteria;

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(r)        align on the drug substance and drug product specifications for the
batches used for the GLP Tox Studies;

 

(s)        align on the drug substance and drug product strategy, including
stability program, and its execution for the drug product used for the GLP Tox
Studies and Phase I Studies;

 

(t)        determine whether drug substance and/or drug product batches for
Phase I Studies shall be made at a CRO acceptable to Roche or by Roche itself
using its facilities;

 

(u)        oversee manufacture and release of drug substance and drug product
batches to be used for Phase I Studies;

 

(v)        review the GLP Tox Study protocol e.g. with respect to study design,
dose selection or GLP exposure measurements;

 

(w)        determine whether drug substance and/or drug product batches for
GLP-Tox Studies  shall be made at a CRO acceptable to Roche or by Roche itself
using its facilities;

 

(x)        oversee manufacture and release of drug substance and drug product
batches to be used in GLP-Tox Studies;

 

(y)        establish, set expectations and mandates for, oversee and disband
JOTs;

 

(z)        recommend action items to each Party’s respective decision making
bodies; and

 

(aa)        attempt to resolve any disputes on an informal basis.

 

The JRC shall have all responsibility and authority regarding overseeing
activities under the Research Plans, other than as expressly set forth in this
Agreement. The JRC shall have no responsibility and authority other than that
expressly set forth in this Section, unless mutually agreed by the Parties.

 

8.5     Responsibilities of the JDC

The JDC shall have the responsibility and authority to:

 

(a)        develop and approve initial Phase I Plans and any revisions thereto;

 

(b)        approve Development Plans and any revisions thereto;

 

(c)        review and oversee the execution of the Phase I Plans and Development
Plans;

 

(d)        oversee the initial Phase I Studies for Products prior to Roche’s
exercise of an Option Right;

 

(e)        determine and maintain a list of all Collaboration Targets in order
of advancement of status;

 

(f)        designate the MTD for each Product;

 

(g)        designate the cut-off date for the data resulting from the Phase I
Studies conducted by the Parties for each Collaboration Target in accordance
with Section 3.1.3;

 

(h)        oversee development of Licensed Products after Roche’s exercise of an
Option Right;

 

(i)        establish timelines and criteria for development decision points;

 

(j)        determine whether development criteria have been met;

 

(k)        review the development efforts of the Parties, including for
Companion Diagnostics;

 

(l)        identify appropriate resources necessary to conduct the Phase I Plans
and Development Plans;

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(m)        review and approve Phase I Development Costs and Development Costs in
accordance with the allocations set forth in Sections 12.5 and 12.6;

 

(n)        depending on the Clinical Studies following Phase I Studies, devise
at the latest upon start of Phase I Studies the appropriate CMC-strategy for
drug substance and drug product to be used in either Phase II Studies or Phase
III Studies and oversee its execution (with Roche deciding where such
manufacture of Phase II and Phase III Study supply, both for drug substance and
drug product, should occur (including prior to Roche exercising its Option
Right);

 

(o)        define the drug substance and drug product specifications for the
batches used for Phase I Studies and any batches made prior to Roche exercising
its Option Right for the subsequent Phase II Studies and/or Phase III Studies
after Option Right exercise;

 

(p)        determine whether a […***…] or should be re-designated pursuant to
Section 5.1.3;

 

(q)        establish, set expectations and mandates for, oversee and disband
JOTs;

 

(r)        recommend action items to each Party’s respective decision making
bodies; and

 

(s)        attempt to resolve any disputes on an informal basis.

 

The JDC shall have all responsibility and authority regarding the clinical
development of Products and Licensed Products, other than as expressly set forth
in this Agreement. The JDC shall have no responsibility and authority other than
that expressly set forth in this Section, unless mutually agreed by the Parties.

 

8.6     Meetings

The Chairperson or his/her delegate will be responsible for sending invitations
and agendas for all JRC or JDC, as applicable, meetings to all Members of each
committee at least ten (10) days before the next scheduled meeting of the JRC or
JDC, as applicable. During the Research and Development Term, the venue for the
meetings shall be agreed by the JRC or JDC, as applicable. The JRC or JDC, as
applicable shall hold meetings at least once per Calendar Quarter, either in
person or by tele-/video-conference, and in any case as frequently as the
Members of the JRC or JDC, as applicable may agree shall be necessary, but not
more than six (6) times each Calendar Year. After the Research and Development
Term the JDC shall meet once per Calendar Quarter, provided that if there is no
on-going development for either Program 2 or Program 4, the JDC shall meet twice
per Calendar Year. The Alliance Director of each Party may attend the JRC and/or
JDC meetings as a permanent participant.

 

8.7     Minutes

The Chairperson of a committee will be responsible for designating a Member to
record in reasonable detail and circulate draft minutes of meetings to all
members of the committee for comment and review within twenty (20) days after
the relevant meeting. The Members of the committee shall have ten (10) days to
provide comments. The Party preparing the minutes shall incorporate timely
received comments and distribute finalized minutes to all Members of the
committee within thirty-five (35) days of the relevant meeting. The Chairperson
approves the final version of the minutes before its distribution.

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8.8     Decisions

 

8.8.1  Decision Making Authority

The JRC shall decide matters within its responsibilities set forth in
Section 8.4.  The JDC shall decide matters within its responsibilities set forth
in Section 8.5. 

 

8.8.2  Consensus; Good Faith

In general, the Parties intend to govern this collaboration through empowered
joint committees that operate by consensus while making its decisions with
speed. The Parties recognize that there may be exceptions to this principle
where reaching consensus is not possible and one Party will need to make a final
decision on a given matter in order to preserve the importance of progressing
with speed.  With this in mind, the Members of a committee shall act in good
faith to cooperate with one another and seek agreement with respect to issues to
be decided by that committee. The Parties shall endeavor to make decisions by
consensus.

 

8.8.3  Pre-Exercise of Option Right Escalation

If the JRC or JDC is unable to decide a matter arising before Roche’s exercise
of its Option Right by consensus, then such matter shall be referred to the
Chief Executive Officer of BPM or equivalent position or his/her nominee and the
Head of Roche Partnering or equivalent position or his/her nominee for
resolution, who together shall use reasonable and good faith efforts to reach a
decision by consensus within thirty (30) days after the date such matter is
referred to them. If the Parties still fail to reach a decision within such
thirty (30) days, then the final decision shall be BPM’s in the case of a
decision by the JRC and Roche’s in the case of a decision by the JDC, which
shall be exercised in good faith. Any such decision shall constitute a decision
of the JRC or JDC, as applicable.  Notwithstanding the above, (a) decisions that
impact the payment of fees under Section 12.2, the use of Roche facilities or
resources pursuant to Section 4.1.5 or Section 8.4 or the use of each Party’s
resources outside of the scope of this Agreement shall require consensus and
shall not be subject to this Section 8.8.3, (b) Roche shall have the final
decision-making authority with respect to the design of each Phase I Plan, (c)
Roche shall have the final decision-making authority with respect to the conduct
of any Clinical Studies of a Product or Licensed Product in combination with
either a Roche Marketed Product or a Roche Clinical Compound that Roche elects
to conduct, and (d) BPM shall have the final decision-making authority with
respect to the conduct of all other Phase I Clinical Studies.

 

8.9     Information Exchange

BPM and Roche shall exchange the information in relation to its activities under
this Agreement through the JRC or JDC, as applicable, and BPM and Roche may ask
reasonable questions in relation to the above information and offer advice in
relation thereto and each Party shall give due consideration to the other
Party’s input. Notwithstanding the above, a committee may determine other routes
of information exchange.

 

8.10    Alliance Director

Each Party shall appoint one (1) person to be its point of contact with
responsibility for facilitating communication and collaboration between the
Parties (each, an “Alliance Director”). The Alliance Directors shall be
permanent participants of committee meetings (but not Members of the committees)
and may attend JOT meetings as appropriate. The Alliance Directors shall
facilitate resolution of potential and pending issues and potential disputes to
enable the committees to reach consensus and avert escalation of such issues or
potential disputes.

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8.11     Limitations of Authority

No committee shall have any authority to amend or waive any terms of this
Agreement, nor shall any committee have the authority to determine whether a
Party is in breach of this Agreement.

 

8.12     Expenses

Each Party shall be responsible for its own expenses including travel and
accommodation costs incurred in connection with the JRC, JDC and any other
committees established under this Agreement.

 

8.13     Lifetime

The JRC shall exist for so long as work is being conducted under a Research Plan
in accordance with this Agreement.  The JDC shall exist for so long as a Product
or Licensed Product remains in clinical development under a Development Plan.
The lifetime of any other committee established pursuant to Section 8.14 will be
agreed to by the Parties at the time of inception.

 

8.14     Other Committees

The Parties may mutually agree to establish such additional joint committees as
deemed necessary to achieve the objectives and intent of this Agreement. Any
additional committees shall be required to consist at all times of an equal
number of BPM Members and Roche Members.

 

9.     Manufacture and Supply

 

9.1  Manufacturing Right

Prior to Roche’s exercise of its Option Right for a Collaboration Target, the
JRC will determine which Party has responsibility for the manufacture of
Collaboration Compounds and Products, subject to the oversight of the JRC, in
accordance with the applicable Research Plan and Phase I Plan for such
Collaboration Target.  If requested by a Party, the other terms under which a
Party will manufacture and supply Collaboration Compounds and Products to the
other Party will be set forth in one or more manufacturing and supply agreements
to be entered into between the Parties (each a “Supply Agreement”).  Such Supply
Agreements will contain customary terms and conditions, including quality and
supply failure remedies, and otherwise be consistent with this Agreement and
Roche quality standards.  If the Parties cannot agree to the terms of a Supply
Agreement within ninety (90) days of initiation of discussions, such matter will
be decided by the Expert Committee in accordance with the terms and conditions
set forth in Section 12.9.4, mutatis mutandis.  

 

After Roche’s exercise of its Option Right for a Collaboration Target, subject
to the oversight of the JDC, Roche shall have the right to manufacture all
Licensed Products for such Collaboration Target throughout the Territory,
subject to this Section 9.1. For Licensed Products in the BPM Territory pursuant
to Program 2 and Program 4, (i) Roche, at its option, can elect to transfer the
manufacturing process to BPM (or a CRO that is reasonably acceptable to Roche)
whereby BPM (or such CRO) would then have responsibility to manufacture its own
supply of such Licensed Product at its own costs; or (ii) BPM, at its option,
can elect to use a CRO that is acceptable to Roche to perform such manufacturing
activities on behalf of BPM in the BPM Territory if such CRO provides a price
that is at least […***…] lower than the per unit cost for a Licensed Product
than offered by Roche taking into account projected supply volume discounts. The
costs of any such manufacturing process transfer pursuant to clause (i) of the
preceding sentence shall be shared equally by the Parties, and pursuant to
clause (ii) of the preceding sentence shall be borne solely by BPM. For Licensed
Products supplied to BPM by Roche in the United States pursuant to Program 2 and
Program 4, Roche shall supply such Licensed Products for clinical supply at

 

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[…***…] and for commercial supply at […***…][…***…]. The other terms under which
Roche will manufacture and supply Licensed Products to BPM will be set forth in
one or more Supply Agreements.  Such Supply Agreements will contain customary
terms and conditions, including quality and supply failure remedies, and
otherwise be consistent with this Agreement and Roche quality standards.  If the
Parties cannot agree to the terms of a Supply Agreement within ninety (90) days
of initiation of discussions, such matter will be decided by the Expert
Committee in accordance with the terms and conditions set forth in Section
12.9.4, mutatis mutandis.  At BPM’s request, the Parties will include provisions
in such Supply Agreements relating to the manufacture and supply of Companion
Diagnostics or Roche Marketed Products for use with Licensed Products for
Program 2 and Program 4. Either Party shall have the right to manufacture at
risk, or have a CRO approved by Roche manufacture at risk, a Product prior to
Roche exercising its Option Right for a Collaboration Target.  If Roche
exercises its Option Right for a Collaboration Target and Roche accepts the
quality of a batch of the applicable Product, then the cost to manufacture such
batch shall be a Development Cost.  If Roche does not exercise its Option Right
for a Collaboration Target, then the cost to manufacture such batch of the
applicable Product shall be borne by the Party that manufactured or had
manufactured the batch.

 

9.2     Technology Transfer

Roche shall have the right, but not obligation, to request a Technology Transfer
(as defined below) at any time however no later than […***…] after exercising
its Option Right for a given Program. Within […***…] upon such request of Roche,
BPM shall complete the transfer of all its Know-How within the BPM IP relating
to the manufacturing of the Collaboration Compounds, Products and Licensed
Products to Roche and/or one or more CROs designated by and contracting directly
with Roche with the goal of enabling Roche and/or its designated CRO to
manufacture Collaboration Compounds, Products and Licensed Products (“Technology
Transfer”). The Parties will agree in good faith on a Technology Transfer
protocol defining the scope and conditions of transfer. The cost of such
Technology Transfer shall be shared equally.

 

BPM shall maintain in full force and effect all agreements relating to the
manufacture of Collaboration Compounds and Products with Third Parties in effect
as of the date of Roche’s request of transfer so that Roche has uninterrupted
access to clinical supply prior to and during any manufacturing transition from
BPM to Roche.

 

9.3     Inspection Right

Roche shall have the right, at any time prior to exercising its Option Right to
conduct an inspection (including a cGMP audit) of BPM’s manufacturing sites at
BPM or at the CRO’s facility, as applicable and, with respect to CROs, subject
to confidentiality obligations.  BPM shall cooperate in good faith in all
respects to allow Roche to expediently complete its due diligence. 

 

9.4     Review of Draft CRO Agreements

Prior to entering into any new CRO agreements for manufacturing, including
supply and quality agreements, related to Collaboration Compounds or Products,
BPM shall provide Roche with any draft agreements with CROs for Roche to review
and comment. BPM shall consider in good faith all reasonable comments of Roche.

 

10.     Regulatory

 

10.1  Responsibility

Prior to Roche’s exercise of its Option Right for a Collaboration Target, (a)
BPM shall own and file all INDs and hold the regulatory responsibility under
each Phase I Plan for each Collaboration Target that is designated as a […***…],
and for each […***…] not involving a Roche Marketed Product or a Roche Clinical
Compound and (b) Roche shall own and file all INDs and hold the

 

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regulatory responsibility under each Phase I Plan for each Collaboration Target
that is designated as a […***…] that involves a Roche Marketed Product or a
Roche Clinical Compound; provided in each case ((a) and (b)) that a Party shall
only file an IND pursuant to the JDC deciding to do so.  The responsible Party
shall be responsible for pursuing, compiling and submitting the IND and all
related Filing documentation, and for interacting with Regulatory Authorities,
for such Collaboration Target; provided that the other Party shall have the
right to review and comment on any material Filing prior to submission to the
relevant Regulatory Authority, and, if the other Party exercises such right, the
responsible Party will reasonably consider to consult with and address any
concerns raised by the other Party in connection with such
activities.  Additionally, promptly following submission of any material Filing,
the responsible Party shall provide the other Party with the technical format
data, the case file and any regulatory dossiers containing information necessary
or useful to the responsible Party in connection with its Filings for all
Licensed Products including, but not limited to Clinical Study dossiers,
regulatory correspondence, Regulatory Authority meeting minutes and study
reports from completed non-clinical and Clinical Studies in a format that is
agreed to by the Parties.  The responsible Party or its Affiliates shall own and
file in their discretion all Filings and INDs for such Collaboration Target in
the Field in all countries. For all completed study reports, the responsible
Party shall provide necessary documentation to confirm data reliability, as
required by Article 43 of the Japanese Pharmaceutical Affairs Law Enforcement
Regulations and related notifications, including, but not limited to original
author signatures, raw data lists, GLP and GCP compliance information. The
responsible Party shall supply the other Party with a copy of all material
communications related to such Collaboration Target in the Field to or from the
Regulatory Authorities for all Major Countries. Upon request of the other Party,
the responsible Party shall supply the other Party with a copy of all such
communications to or from the Regulatory Authorities for all Major Countries.

 

After Roche’s exercise of its Option Right for a Collaboration Target, subject
to Sections 7.2, 12.5 and 12.6, Roche shall be solely responsible for all
regulatory affairs related to Licensed Products in the Field in the Roche
Territory including the preparation and Filings, as well as any or all
Regulatory Approvals required to Exploit Licensed Products in the Field in the
Roche Territory. Roche shall be responsible for pursuing, compiling and
submitting all Filing documentation, and for interacting with Regulatory
Authorities, for all Licensed Products in all countries in the Roche Territory;
provided that for Program 2 and Program 4, BPM shall have the right to review
and comment on any material Filing for Program 2 or Program 4 prior to
submission to the relevant Regulatory Authority, and, if BPM exercises such
right, Roche will reasonably consider to consult with and address any concerns
raised by BPM in connection with such activities.  Roche will use Commercially
Reasonable Efforts, to the extent reasonably practicable, to permit BPM to have,
at BPM’s expense, one (1) mutually acceptable representative of BPM attend,
solely as a non-participating observer, material, substantive meetings,
including pre-IND and end of Phase II Study meetings, with the Regulatory
Authorities pertaining to all Licensed Products in Program 2 or Program
4.  Additionally, promptly following submission of any material Filing for
Program 2 or Program 4, Roche shall provide BPM with the technical format data,
case file and any regulatory dossiers containing information necessary or useful
to BPM in connection with its Filings for all Licensed Products including, but
not limited to Clinical Study dossiers, regulatory correspondence, Regulatory
Authority meeting minutes and study reports from completed non-clinical and
Clinical Studies in a format that is agreed to by the Parties.  Roche or its
Affiliates shall own and file in their discretion all Filings and Regulatory
Approvals for all Licensed Products in the Field in all countries of the Roche
Territory. For all completed study reports, BPM shall provide necessary
documentation to confirm data reliability, as required by Article 43 of the
Japanese Pharmaceutical Affairs Law Enforcement Regulations and related
notifications, including, but not limited to original author signatures, raw
data lists, GLP and GCP compliance information. Roche shall supply BPM with a
copy of all material communications related to Licensed Products in the

 

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Field to or from the Regulatory Authorities for all Major Countries in the Roche
Territory. Upon request of BPM, Roche shall supply BPM with a copy of any
communications to or from the Regulatory Authorities for all Major Countries in
the Roche Territory.  Such terms shall apply mutatis mutandis with respect to
Licensed Products for Program 2 and Program 4 in the BPM Territory (i.e., BPM
shall have all such rights and obligations in lieu of Roche), other than
Combination Products in Program 2 or Program 4 that include a Roche Marketed
Product, in which case Roche shall be solely responsible for all regulatory
affairs worldwide related to such Combination Product in Program 2 or Program 4
as set forth above.  For Combination Products in Program 2 or Program 4 that
include a Roche Marketed Product, Roche will provide BPM with reasonable advance
notice of all substantive meetings with the Regulatory Authorities pertaining to
each such Combination Product, or with as much advance notice as practicable
under the circumstances. 

 

Prior to Roche’s starting Clinical Study enrollment activities for Licensed
Products, BPM shall transfer to Roche all relevant historical clinical safety
data.  Safety information on serious adverse events shall be provided in CIOMS
format and safety information on non-serious adverse events shall be provided in
English Line Listing format.

 

At a date to be defined by Roche after exercise of an Option Right for a
Collaboration Target, BPM shall transfer and assign to Roche all INDs with
respect to Products for such Collaboration Target in the Field in its possession
and control, except for filings with a US Regulatory Authority in the case of
Program 2 and Program 4. Prior to the transfer, BPM shall provide to Roche
copies of all material correspondence with the Regulatory Authorities with
respect to such Products for such Collaboration Target. In addition, at a date
defined by Roche after exercise of an Option Right for a Collaboration Target,
BPM shall transfer and assign to Roche any regulatory dossiers containing
information necessary or useful to Roche in connection with its Filings for all
Licensed Products for such Collaboration Target in the Field in the Roche
Territory, including, but not limited to Clinical Study dossiers, regulatory
correspondence, Regulatory Authority meeting minutes and study reports from
completed non-clinical and Clinical Studies. For all completed study reports for
Licensed Products for such Collaboration Target in the Roche Territory, BPM
shall provide to Roche necessary documentation to confirm data reliability, as
required by Article 43 of the Japanese Pharmaceutical Affairs Law Enforcement
Regulations and related notifications, including original author signatures, raw
data lists, GLP and GCP compliance information. All documentation is to be
provided in English.

 

10.2     Reporting Adverse Events

 

10.2.1  Report

The Parties agree to inform each other about serious adverse events occurring or
having occurred in connection with the use of a Product or Licensed Product that
comes into its knowledge. The Parties agree to handle data and information about
adverse events occurring or having occurred in connection with the use of a
Product or Licensed Product according to the guidelines in the respective
territory, for example, those recited in the FDCA and the similar requirements
of the Canadian or European regulatory authorities, requirements of the
Regulatory Authority and/or requirements of any other relevant Regulatory
Authority in the Territory.

 

BPM shall be solely responsible for reporting adverse drug experiences to
Regulatory Authorities in the BPM Territory in the case of Program 2 and Program
4. In all other cases, Roche, as the party owning the Filings and Regulatory
Approvals shall be solely responsible for reporting adverse drug experiences to
the regulatory authorities in the Roche Territory.

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10.2.2  Pharmacovigilance Agreement

The Parties mutually agree to execute a separate Pharmacovigilance Agreement as
deemed applicable by the Parties specifying the procedures and timeframes for
compliance with Applicable Law pertaining to safety reporting of each Product
and Licensed Product and their related activities.

 

11.     Commercialization

 

11.1  Responsibility

Roche, at its own expense, shall have sole responsibility and decision making
authority for the marketing, promotion, sale and distribution of Licensed
Products in the Roche Territory and shall book all Sales in the Roche
Territory.  For Program 2 and Program 4, BPM, at its own expense, shall have
sole responsibility and decision making authority for the marketing, promotion,
sale and distribution of Licensed Products in the BPM Territory and shall book
all Sales in the BPM Territory subject to Section 12.9.4.

 

11.2  Updates

Upon request of the Party not selling a Licensed Product in a particular region
(the “Non-Selling Party”), the Party selling the Licensed Product in the
particular regions (“Selling Party”) shall update the Non-Selling Party
regarding the commercialization of the Licensed Product (i) in the Roche
Territory in the Field by Roche, its Affiliates and Sublicensees, in the case
where Roche is the Selling Party, or (ii) in the BPM Territory in the Field by
BPM, its Affiliates and Sublicensees, in the case where BPM is the Selling
Party. By November 15 of each Calendar Year, the Selling Party also shall
provide a non-binding forecast of its annual sales of Licensed Products to the
Non-Selling Party for the subsequent Calendar Year. If the Non-Selling Party
requests an update, the Selling Party shall provide a high level summary, in
writing and/or through a meeting (face to face/ tele-presence/videoconference or
telephone). The Non-Selling Party shall not request an update more frequently
than once per Calendar Year. In addition, upon reasonable request by the
Non-Selling Party in connection with financing, partnering, other strategic
transaction or Non-Selling Party's reporting obligations under securities laws,
the Selling Party shall provide a high level summary regarding the
commercialization of the Licensed Product in the Roche Territory or BPM
Territory, as applicable, in the Field by the Selling Party, its Affiliates and
Sublicensees.

 

11.3  Recalls, Market Withdrawals or Corrective Actions.

In the event that any Regulatory Authority issues or requests a recall or takes
a similar action in connection with a Licensed Product in the Field in the
Territory, or in the event either Party determines that an event, incident or
circumstance has occurred that may result in the need for a recall or market
withdrawal of a Licensed Product in the Field in its Territory, the Party
notified of such recall or similar action, or the Party that desires such recall
or similar action, will as promptly as possible, notify the other Party by
telephone or e-mail.  Each Party, in consultation with the other Party, will
decide whether to conduct a recall of a Licensed Product in its own Territory
and the manner in which any such recall will be conducted (except in the case of
a government mandated recall, when such Party may act without such advance
notice but will notify the other Party as soon as possible thereafter).  Except
as may otherwise be agreed to by the Parties, each Party will bear the expense
of any such recall in its own Territory.  Each Party will make available all of
its pertinent records that may be reasonably requested by the other Party in
order for a Party to effect a recall of a Licensed Product in its Territory. The
Parties’ rights and obligations under this Section 11.3 will be subject to the
terms of any Supply Agreement(s) and any Pharmacovigilance Agreement entered
into between the Parties.  In the event of a conflict between the provisions of
any such Supply Agreements and Pharmacovigilance Agreement and

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this Section 11.3, the provisions of such Supply Agreement and Pharmacovigilance
Agreement will govern.

 

12.     Payment

 

12.1  Initiation Payment

Within […***…] after the Effective Date and receipt of an invoice from BPM,
Roche shall pay to BPM forty-five million US dollars (US$45,000,000). Such
payment will be non-refundable, non-creditable and not subject to set-off.

 

12.2  Pre-Option Exercise Fees

Roche shall pay to BPM up to a total of […***…] US dollars […***…], upon the
achievement of milestone events with respect to Products. The event payments
under this Section 12.2 shall be paid by Roche according to the following
schedule of events.

 

op

 

Event

US Dollars (in
millions)

[…***…]

[…***…]

[…***…]

[…***…]

[…***…] (per each Collaboration Target, up to […***…] in total payments for all
five Collaboration Targets)

[…***…]

[…***…] (per each Collaboration Target, up to […***…] in total payments for all
five Collaboration Targets)

[…***…]

[…***…] (per each Collaboration Target, up to […***…] in total payments for all
five Collaboration Targets)

[…***…]

 

Any such payments shall be paid by Roche to BPM within […***…] after the
occurrence of the applicable event and receipt of an invoice from BPM.  Each
payment will be non-refundable, non-creditable and not subject to set-off.

 

12.3  Costs for Work Conducted Under Research Plans

Except as otherwise provided in this Agreement, each Party shall be responsible
for its own costs incurred in the conduct of each Research Plan.

 

12.4  Option Exercise Fee

If Roche exercises its Option Right with respect to a Collaboration Target, then
Roche shall pay to BPM a fee (“Option Exercise Fee”) to exercise such Option
Right as follows:

 

Exercise of Option Right

US Dollars (in millions)

Program 1

[…***…]

Program 2

[…***…]

Program 3

[…***…]

Program 4

[…***…]

Program 5

[…***…]

 

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Subject to the provisions of Sections 3.1.3 and 3.1.4, any such payments shall
be paid by Roche to BPM […***…] after the occurrence of the applicable event and
receipt of an invoice from BPM.  Each Option Exercise Fee will be
non-refundable, non-creditable and not subject to set-off.

 

12.5  Phase I Development Cost Share

All Phase I Development Costs will be shared […***…] by BPM and […***…] by
Roche; provided that BPM shall only be responsible for up to a maximum of
[…***…] of Phase I Development Costs for all Phase I Studies conducted pursuant
to a Phase I Plan for each Collaboration Target (it being understood that such
[…***…] cap shall apply on a Collaboration Target-by-Collaboration Target basis
and thus to all Products (including any Backup Compounds) for any such
Collaboration Target), and any Phase I Development Costs in excess of such
[…***…] cap for a Collaboration Target shall be at Roche’s sole expense;
provided that if (a) there is a failure of a Product in a Phase I Study prior to
the designation of the MTD for such Product for a Collaboration Target and (b)
the Parties conduct a Phase I Study with a Backup Compound for a Collaboration
Target, then the cap for such Collaboration Target shall be increased to a
maximum of […***…] (it being understood that such […***…] cap shall apply on a
Collaboration Target-by-Collaboration Target basis and thus to all Products
(including any Backup Compounds) for any such Collaboration Target), and any
Phase I Development Costs in excess of such […***…] cap for a Collaboration
Target shall be at Roche’s sole expense.  For clarity, the allocation of Phase I
Development Costs set forth in this Section 12.5 will apply regardless of
whether Roche has exercised its Option Right for a Collaboration Target.
Commencing the first Calendar Quarter immediately following initiation of the
Phase I Program, within fifteen (15) days after the end of each Calendar Quarter
during which either Party incurs any Phase I Development Costs, both Parties
shall submit to a finance officer designated by BPM and a finance officer
designated by Roche (the “Finance Officers”) a report setting forth a good faith
estimate of the Phase I Development Costs it incurred in such Calendar Quarter,
as detailed in the Phase I Plans, as approved by the JDC.  Within forty-five
(45) days following the end of such Calendar Quarter, each Party shall update
such report to reflect the final amount of Phase I Development Costs incurred by
such Party; provided that if there are any Phase I Development Costs incurred in
such Calendar Quarter that a Party is unable to timely include in such financial
report, then such amount shall be included and reconciled in the financial
report in a future Calendar Quarter.  Each such report shall specify in
reasonable detail costs incurred and shall include reasonably detailed
supporting information. Within fifteen (15) days after receipt of such reports,
the Finance Officers shall confer and agree in writing on whether a
reconciliation payment is due from one Party to the other Party, and if so, the
amount of such reconciliation payment, so that the Parties share Phase I
Development Costs in accordance with this Section 12.5.  The Party required to
pay such reconciliation payment shall make such payment to the other Party
within sixty (60) days after the end of each Calendar Quarter; provided,
however, that in the event of any disagreement with respect to the calculation
of such reconciliation payment, any undisputed portion of such reconciliation
payment shall be paid in accordance with the foregoing timetable and the
remaining, disputed portion shall be paid within ten (10) Business Days after
the date on which the Parties, using good faith efforts, resolve the dispute.

 

12.6  Development Cost Share

All Development Costs for each Program will be shared by BPM and Roche as
summarized in the following table.

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Exercise of Option Right

Development Cost Share

Program 1, Program 3, and Program 5

100% paid by Roche

Program 2 and Program 4

[…***…] (Roche: BPM)

 

[…***…]                      (Roche:BPM)

[…***…]

 

Notwithstanding the foregoing, Developments Costs after the preparation of the
initial regulatory dossier for a Licensed Product for Program 2 and Program 4,
costs related to preparing and filing subsequent Filings with respect to such
Licensed Product (including associated filing fees, translation expenses, and
legal and other professional service fees) will be the responsibility of each
Party in its respective Territory with respect to such Licensed Products. After
receipt of Regulatory Approval for such Licensed Product in a country, all costs
and expenses incurred will be the responsibility of each Party in its respective
Territory with respect to such Licensed Product.

 

For clarity, the allocation of Development Costs set forth in this Section 12.6
will apply regardless of whether Roche has exercised its Option Right for a
Collaboration Target.

 

Commencing the first Calendar Quarter immediately following a Party incurring
Development Costs under this Agreement and continuing thereafter so long as a
Party incurs Development Costs under this Agreement for which reconciliation
will be provided, within fifteen (15) days after the end of each Calendar
Quarter during which either Party incurs any Development Costs, each Party shall
submit to a finance designee of the other Party a report setting forth a good
faith estimate of the Development Costs it incurred in such Calendar Quarter for
such Collaboration Target, as detailed in the Development Plan, as approved by
the JDC.  Within forty-five (45) days following the end of such Calendar
Quarter, each Party shall update such report to reflect the final amount of
Development Costs incurred by such Party; provided that if there are any
Development Costs incurred in such Calendar Quarter that a Party is unable to
timely include in such financial report, then such amount shall be included and
reconciled in the financial report in a future Calendar Quarter.  Each such
report shall specify in reasonable detail costs incurred and shall include
reasonably detailed supporting information. Within fifteen (15) days after
receipt of such reports, the finance designees from both Parties shall confer
and agree in writing on whether a reconciliation payment is due from one Party
to the other Party, and if so, the amount of such reconciliation payment, so
that the Parties share Development Costs in accordance with this
Section 12.6.  The Party required to pay such reconciliation payment shall make
such payment to the other Party within sixty (60) days after the end of each
Calendar Quarter; provided, however, that in the event of any disagreement with
respect to the calculation of such reconciliation payment, any undisputed
portion of such reconciliation payment shall be paid in accordance with the
foregoing timetable and the remaining, disputed portion shall be paid within ten
(10) Business Days after the date on which the Parties, using good faith
efforts, resolve the dispute.

 

12.7  Development Event Payments

For each of Program 1, Program 3, and Program 5, Roche shall pay BPM the
following one-time milestone event payments for the first achievement of each of
the corresponding milestone events (each, a “Development Event”) by the first
Licensed Product for such Program to achieve such event:

 

Development Event for First Licensed Product

US Dollars (in millions)

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

 

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[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

Total

[…***…]

 

Notwithstanding the foregoing, for the purposes of construing the payments
specified in the above table, if a Development Event is skipped (i.e., a later
Development Event payment is payable before an earlier Development Event
payment), or if Regulatory Approval is achieved in any jurisdiction with respect
to a Licensed Product for a Collaboration Target without all of the preceding
Development Event payments applicable to a Licensed Product having been
achieved, then the skipped Development Event(s) will be deemed to have been
achieved upon the achievement of the subsequent Development Event(s) or upon
Regulatory Approval as applicable.  Upon the achievement of a Development Event,
Roche shall timely notify BPM and Development Event payments shall be paid by
Roche to BPM […***…] from occurrence of the applicable event and receipt of an
invoice from BPM.  Subject to Section 7.3 and Section 12.9.6, each Development
Event Payment will be non-refundable, non-creditable and not subject to set-off
with respect to undisputed amounts.

 

12.8  Sales Based Event

For the first Licensed Product pursuant to each of Program 1, Program 3, and
Program 5, Roche shall pay BPM the following one-time milestone event payment
for the first achievement of such milestone event by the first Licensed Product
for such Program to achieve such event:

 

 

 

Calendar Year Net Sales Threshold

US Dollars (in millions)

Calendar Year Net Sales in the Territory of a Licensed Product exceed […***…]

[…***…]

 

Each sales milestone payment shall be deemed earned upon achievement of the
corresponding sales milestone, and Roche shall make the corresponding sales
milestone payment within […***…] after the end of the Calendar Year in which the
sales milestone threshold was achieved. Subject to Section 7.3, each sales
milestone payment will be non-refundable, non-creditable and not subject to
set-off with respect to undisputed amounts.

 

12.9  Royalty Payments

 

12.9.1  Royalty Term

Royalties shall be payable by the Selling Party on Net Sales or BPM Net Sales,
as applicable, of Licensed Products until the expiry of the Royalty Term.
Thereafter, on a Licensed Product-by-Licensed Product and country-by-country
basis, the licenses granted shall be fully paid up, irrevocable and
royalty-free.

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12.9.2  Royalty Rates on Licensed Products for the Program 1, Program 3, and
Program 5

Roche shall, on a Licensed Product-by-Licensed Product basis for each Licensed
Product for Program 1, Program 3 or Program 5, pay to BPM royalties on Calendar
Year Net Sales of a given Licensed Product in the Roche Territory as follows:

 

 

 

Portion of Calendar Year Net Sales of a Licensed Product:

Rate:

Up to […***…]

[…***…]

More than […***…] and up to […***…]

[…***…]

More than […***…] and up to […***…]

[…***…]

More than […***…]

[…***…]

 

For example, if worldwide Net Sales of a Licensed Product for Program 1 for a
given Calendar Year are […***…], then royalties payable to BPM on such Net Sales
of such Licensed Product for that Calendar Year shall equal […***…] calculated
as follows:

[…***…]

For the purpose of calculating royalties payable on a Licensed Product for
Program 1, Program 3 or Program 5, Calendar Year Net Sales and the royalty rates
shall be subject to the adjustments under Sections 12.9.4 - 12.9.6 below, as
applicable.

 

12.9.3  Royalty Rates on Licensed Products for Program 2 and Program 4

Roche shall, on a Licensed Product-by-Licensed Product basis for each Licensed
Product for Program 2 or Program 4, pay to BPM royalties on Calendar Year Net
Sales of a given Licensed Product in the Roche Territory as follows:

 

 

 

Portion of Calendar Year Net Sales of a Licensed Product:

Rate:

Up to […***…]

[…***…]

More than […***…] and up to […***…]

[…***…]

More than […***…] and up to […***…]

[…***…]

More than […***…]

[…***…]

 

Subject to Section 7.3, BPM shall, on a Licensed Product-by-Licensed Product
basis for each Licensed Product for Program 2 and Program 4, pay to Roche
royalties on Calendar Year BPM Net Sales of a given Licensed Product in the BPM
Territory as follows:

 

 

 

Portion of Calendar Year BPM Net Sales of a Licensed Product:

Rate:

Up to […***…]

[…***…]

More than […***…] and up to […***…]

[…***…]

More than […***…] and up to […***…]

[…***…]

More than […***…]

[…***…]

 

For the purpose of calculating royalties of a Licensed Product, Calendar Year
Net Sales or BPM Net Sales, as applicable, and the royalty rates shall be
subject to the adjustments under Sections 12.9.4 - 12.9.6 below, as applicable.

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12.9.4  Combination Product

If the Selling Party or its Affiliates intend to sell a Combination Product,
then the Parties shall meet approximately one (1) year prior to the anticipated
First Commercial Sale of such Combination Product in the Territory to negotiate
in good faith and agree to an appropriate adjustment to Net Sales to reflect the
relative commercial value contributed by the components of the Combination
Product (the “Relative Commercial Value”).  If, after such good faith
negotiations not to exceed ninety (90) days, the Parties cannot agree to an
appropriate adjustment, the dispute shall be initially referred to the executive
officers of the Parties in accordance with Section 23.2. Should the Parties fail
to agree within sixty (60) days of such referral, then the Relative Commercial
Value shall be determined by the Expert Committee under the procedures set forth
below.

 

If the Parties are unable to agree on the Relative Commercial Value, then Roche
will select one (1) individual who would qualify as an Expert, BPM will select
(1) individual who would qualify as an Expert, and those two (2) individuals
shall select one (1) individual who would qualify as an Expert and who shall be
chairman of a committee of the three Experts (the “Expert Committee”), each with
a single deciding vote. The Expert Committee will promptly hold a meeting to
review the issue under review, at which it will consider memoranda submitted by
each Party at least fifteen (15) days before the meeting, as well as reasonable
presentations that each Party may present at the meeting. The determination of
the Expert Committee as to the issue under review will be binding on both
Parties. The Parties will share equally in the costs of the Expert Committee.
Unless otherwise agreed to by the Parties, the Expert Committee may not decide
on issues outside the scope mandated under terms of this Agreement.  If the
Expert Committee is unable to come to a determination within sixty (60) days of
such meeting, the matter will be decided pursuant to Section 23.3.

 

[…***…]

 

12.9.5  Royalty Reductions

If royalties on a Licensed Product are payable only on the basis of clause (i)
of the Royalty Term definition in Section 1.118 in a country, then the royalties
in such country payable on Net Sales or BPM Net Sales, as applicable, for such
Licensed Product shall be reduced by […***…].  The royalty rate tier applicable
to the Calendar Year Net Sales or BPM Net Sales, as applicable, of such Licensed
Product in such country will be applied pro rata on a Calendar
Quarter-by-Calendar Quarter basis, with reference to the aggregate worldwide
Calendar Year Net Sales or BPM Net Sales, as applicable, for each Licensed
Product.

 

Notwithstanding the foregoing, in addition, on a country-by-country basis, upon
the first entry in a country of a Generic Product with respect to a Licensed
Product, the applicable royalty rate for Calendar Year Net Sales or BPM Net
Sales, as applicable, in such country for such Licensed Product shall be reduced
as follows:

 

a)        If at any time after entry of a Generic Product in a country there has
been a decline of the quarterly Net Sales of the applicable Licensed Product in
such country greater than […***…] of the average level of the quarterly Net
Sales of such Licensed Product achieved in the […***…] consecutive Calendar
Quarters immediately prior to such entry, then the royalty payments due to BPM
or Roche, as applicable, for such Licensed Product in such country shall be
reduced by […***…] for the remainder of the Royalty Term.

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b)        If at any time after entry of a Generic Product in a country there has
been a decline of the quarterly Net Sales of the applicable Licensed Product in
such country greater than […***…] of the average level of the quarterly Net
Sales of such Licensed Product achieved in the […***…] consecutive Calendar
Quarters immediately prior to such entry, then the royalty payments due to BPM
or Roche, as applicable, for such Licensed Product in such country shall be
reduced by […***…] for the remainder of the Royalty Term.

 

12.9.6  Third Party Payments

If Roche (or BPM in the US in the case of Program 2 or Program 4) is obligated
to remit payments to a Third Party in relation to Third Party issued patents
that would allegedly be infringed by the marketing of a Licensed Product, then
Roche (or BPM) shall be permitted to offset up to […***…] of any payments paid
to such Third Party against any royalty payments and Development Event payments
after the first NDA Filing Development Event payment for such Licensed Product
otherwise payable by Roche to BPM (or by BPM to Roche in the case of Program 2
or Program 4) for such Licensed Product in the applicable Calendar Quarter.
Roche’s ability to make such deductions to Development Event payments pursuant
to Section 12.7 shall be limited to […***…] of any individual Development Event
payment after the first NDA Filing Development Event payment for such Licensed
Product.  For clarity, amounts paid by Roche to BPM (or by BPM to Roche in the
case of Program 2 or Program 4) for such Licensed Product with respect to any
Calendar Quarter will not be reduced as a result of this Section 12.9.6 below
[…***…] of the amount that would otherwise have been payable hereunder. […***…]
owed by Roche to BPM (or by BPM to Roche in the case of Program 2 or Program 4)
for such Licensed Product. For any payments made by Roche (or BPM) to Third
Parties in relation to Third Party issued patents that are (i) used by Roche (or
BPM) for both Licensed Products and other products (including Roche Clinical
Compounds or Roche Marketed Products) or applications, the Parties will agree on
an equitable apportionment of such payments to reflect the fair value
attributable to the Licensed Products under this Section 12.9.6 as compared to
other products (including Roche Clinical Compounds or Roche Marketed Products)
or applications, so that Roche’s or BPM’s right […***…] under this Section
12.9.6 is limited to fair value attributable to the Licensed Products only.  If
the Parties are unable to agree on an equitable apportionment of such payments,
then either Party may refer such dispute to Expedited Arbitration.

 

12.9.7  Maximum Deductions

Notwithstanding anything foregoing, in no event shall the royalty paid for Net
Sales of Licensed Products hereunder be reduced by more than an amount equal to
[…***…] of the royalties otherwise due for Net Sales of such Licensed Products,
per the applicable royalty rates set forth above.

 

12.9.8  Apportionment of Compulsory Sublicensee Consideration

Compulsory Sublicense Compensation received by the Selling Party from a
Compulsory Sublicensee shall be shared with the Non-Selling Party on an
equivalent profit share percentage (the “Compulsory Profit Share Percentage”)
calculated for the respective Calendar Year as follows:

 

[…***…]

 

At the end of the Calendar Year, the Selling Party shall pay to the Non-Selling
Party the Compulsory Sublicense Compensation under a given country or region of
the Territory multiplied

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by the Compulsory Profit Share Percentage. For clarity, any sales or payments by
Compulsory Sublicensees under a Compulsory Sublicense shall not be considered as
Net Sales or BPM Net Sales, as applicable, and shall not give rise to any
royalty payment under Section 12.9.2 of this Agreement.

 

12.10  Disclosure of Payments

Each Party acknowledges that the other Party may be obligated to disclose this
financial arrangement, including all fees, payments and transfers of value, as
may be advisable or required under Applicable Law, including the US Sunshine
Act.

 

12.11  Only One Royalty

Only one royalty will be due with respect to the sale of the same unit of
Licensed Product.  Only one royalty will be due hereunder on the sale of a
Licensed Product even if the manufacture, use, sale, offer for sale or
importation of such Licensed Product infringes more than one Composition of
Matter Claim.

 

13.     Accounting and reporting

 

13.1  Timing of Payments

The Selling Party shall calculate royalties on Net Sales or BPM Net Sales, as
applicable, quarterly as of March 31, June 30, September 30 and December 31
(each being the last day of an "Accounting Period”) and shall pay royalties on
Net Sales or BPM Net Sales, as applicable, […***…] after the end of each
Accounting Period in which such Net Sales or BPM Net Sales, as applicable,
occur.  Subject to Section 7.3 and Section 12.9.6, all payments of royalties are
non-refundable, non-creditable and not subject to set-off with respect to
undisputed amounts.

 

13.2  Late Payment

Any payment under this Agreement that is not paid on or before the date such
payment is due shall bear interest, to the extent permitted by Applicable Law,
at […***…], as reported by Reuters from time to time, calculated on the number
of days such payment is overdue.

 

13.3  Method of Payment

Royalties on Net Sales and all other amounts payable hereunder shall be paid in
US Dollars (the “Payment Currency”) to account(s) designated by the Party to
which payments are to be made.

 

13.4  Currency Conversion

When calculating the Sales of any Licensed Product that occur in currencies
other than the Payment Currency, Roche shall convert the amount of such sales
into Swiss Francs and then into the Payment Currency using Roche’s then-current
internal foreign currency translation method actually used on a consistent basis
in preparing its audited financial statements (at the Effective Date, YTD
average rate as reported by Reuters).

 

13.5  Reporting

 

Within ten (10) days after the end of a Calendar Quarter for which royalties are
payable to a Party under Section 12.9, the paying Party shall deliver to the
other Party in writing for the relevant Calendar Quarter, on a Licensed
Product-by-Licensed Product basis, an estimate of the Sales, in the case of
Roche, or BPM gross sales for Licensed Products, in the case of BPM.

 

With each payment Roche shall provide BPM in writing for the relevant Calendar
Quarter on a Licensed Product-by-Licensed Product basis the following
information:

 

(a)     Sales in Swiss Francs;

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(b)     Net Sales in Swiss Francs;

(c)     adjustments made pursuant to Section 12.9.4;

(d)     Net Sales in Swiss Francs after adjustments made pursuant to
Section 12.9.3 in Swiss Francs;

(e)     exchange rate used for the conversion of Net Sales from Swiss Francs to
the Payment Currency pursuant to Section 13.4;

(f)     Net Sales after adjustments made pursuant to Section 12.9.4 in the
Payment Currency;

(g)     royalty rate pursuant to Section 12.9.2;

(h)     adjustments made pursuant to Sections 12.9.5 and 12.9.6 (subject to the
cap in Section 12.9.7);

(i)     total royalty payable in the Payment Currency after adjustments made
pursuant to Sections 12.9.5 and 12.9.6 (subject to the cap in Section 12.9.7);
and

(j)     calculation and each Party’s amount of the Compulsory Profit Share
Percentage.

 

With each payment BPM shall provide Roche in writing for the relevant Calendar
Quarter on a Licensed Product-by-Licensed Product basis the following
information with regard to Program 2 and Program 4:

 

(a)     BPM Sales in US dollars;

(b)     BPM Net Sales in US dollars;

(c)     Adjustments made pursuant to Section 12.9.4;

(d)     BPM Net Sales in US dollars after adjustments made pursuant to
Section 12.9.4 in the US dollars;

(e)     royalty rate pursuant to Section 12.9.2;

(f)     adjustments made pursuant to Sections 12.9.5 and 12.9.6 (subject to the
cap in Section 12.9.7);

(g)     total royalty payable in US dollars after adjustments made pursuant to
Sections 12.9.5 and 12.9.6 (subject to the cap in Section 12.9.7); and

(h)     calculation and each Party’s amount of the Compulsory Profit Share
Percentage.

 

14.Taxes

The Non-Selling Party shall pay all sales, turnover, income, revenue, value
added, and other taxes levied on account of any payments accruing or made to the
Non-Selling Party under this Agreement.

 

Roche may withhold from payments due to BPM amounts for payment of any
withholding tax that is required by Applicable Law to be paid to any taxing
authority with respect to such payments. Roche will provide BPM all relevant
documents and correspondence, and will also provide to BPM any other cooperation
or assistance on a reasonable basis as may be necessary to enable BPM to claim
exemption from such withholding taxes and to receive a refund of such
withholding tax or claim a foreign tax credit. Roche will give proper evidence
from time to time as to the payment of any such tax. The Parties will cooperate
with each other in seeking deductions under any double taxation or other similar
treaty or agreement from time to time in force. Such cooperation may include
Roche making payments from a single source in the US, where necessary and
possible.

 

BPM may withhold from payments due to Roche amounts for payment of any
withholding tax that is required by Applicable Law to be paid to any taxing
authority with respect to such payments. BPM will provide Roche all relevant
documents and correspondence, and will also provide to Roche any other
cooperation or assistance on a reasonable basis as may be necessary to enable
Roche to claim exemption from such withholding taxes and to receive a refund of
such withholding

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tax or claim a foreign tax credit. BPM will give proper evidence from time to
time as to the payment of any such tax. The Parties will cooperate with each
other in seeking deductions under any double taxation or other similar treaty or
agreement from time to time in force. Such cooperation may include BPM making
payments from a single source in the US, where necessary and possible.

 

Apart from any such permitted withholding and those deductions expressly
included in the definitions of Net Sales or BPM Net Sales, the amounts payable
hereunder will not be reduced on account of any taxes, charges, duties or other
levies.

 

15.     Auditing

 

15.1  Right to Audit

The Selling Party shall keep, and shall require its Affiliates and Sublicensees
to keep, full, true and accurate books of account containing all particulars
that may be necessary for the purpose of calculating all royalties payable under
this Agreement. Each Party shall keep, and shall require its Affiliates and
Sublicensees to keep, full, true and accurate books of account containing all
particulars that may be necessary for the purpose of calculating all Phase I
Development Costs and Development Costs payable under this Agreement. Such books
of accounts shall be kept at their principal place of business. At the expense
of the auditing Party, the auditing Party shall have the right to engage an
internationally recognized independent public accountant reasonably acceptable
to the audited Party to perform, on behalf of the auditing Party, an audit of
such books and records of the audited Party and its Affiliates that are deemed
necessary by the independent public accountant to report on Net Sales of
Licensed Product, Phase I Development Costs and/or Development Costs for the
period or periods requested by the auditing Party and the correctness of any
financial report or payments made under this Agreement.

 

Upon timely request and at least sixty (60) working days' prior written notice
from the auditing Party, such audit shall be conducted in the countries
specifically requested by the auditing Party, during regular business hours in
such a manner as to not unnecessarily interfere with the audited Party's normal
business activities. Such audit shall be limited to results in the three (3)
Calendar Years prior to audit notification. Accordingly, if the auditing Party
does not request an audit of a given Calendar Year for a given country on or
before the third (3rd) anniversary of the end of such Calendar Year, then the
audited Party will be deemed to have accepted the payments and reports for such
country in such Calendar Year.

 

Such audit shall not be performed more frequently than once per Calendar Year
nor more frequently than once with respect to records covering any specific
period of time.

 

All information, data documents and abstracts herein referred to shall be used
only for the purpose of verifying royalty statements, shall be treated as the
audited Party’s Confidential Information subject to the obligations of this
Agreement and need neither be retained more than one (1) year after completion
of an audit hereof, if an audit has been requested; nor more than two (2) years
from the end of the Calendar Year to which each shall pertain; nor more than one
(1) year after the date of termination of this Agreement.

 

15.2  Audit Reports

The auditors shall only state factual findings in the audit reports and shall
not interpret this Agreement. The auditors shall share all draft audit reports
with the audited Party before the draft report is shared with the auditing Party
and before the final document is issued. The final audit report shall be shared
with the audited Party at the same time it is shared with the auditing Party.

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15.3  Over- or Underpayment

If the audit reveals an overpayment, the auditing Party shall reimburse the
audited Party for the amount of the overpayment within thirty (30) days. If the
audit reveals an underpayment, the audited Party shall make up such underpayment
with the next payment or, if no further payments are owed by the audited Party,
then the audited Party shall reimburse the auditing Party for the amount of the
underpayment within thirty (30) days. The auditing Party shall pay for the audit
costs if the underpayment of the audited Party exceeds […***…] of the aggregate
amount of payments owed with regard to the statements subject to the audit.
Section 13.2 shall apply to this Section 15.3.

 

16.     Intellectual Property

 

16.1  Ownership of Inventions

The following terms and conditions shall apply to the ownership of Inventions
unless provided for otherwise in this Agreement:

 

Each Party shall remain owner of its Patent Rights and Know-How.

 

BPM shall solely own Inventions solely related to any improvements to the BPM
Technology and all Patent Rights and Know-How relating thereto (which will be
treated as BPM Technology).

 

Prior to exercise of an Option Right for each Collaboration Target by Roche, all
Collaboration Compounds and all Other Compounds for a given Collaboration Target
or other Targets, including their methods of manufacture […***…] and use, and
all Patent Rights and Know-How relating thereto (including Collaboration
Compound IP) shall be solely owned by BPM (with all of the foregoing that are
not “Collaboration Compounds” or “Collaboration Compound IP” referred to herein
as “Other Compound IP”). 

 

[…***…]

 

All Patent Rights and Know-How generated under this Agreement to the extent
related to biomarkers or bioreagents, including their methods of manufacture and
use, (the “Biomarker IP”) shall be owned jointly by the Parties (with US rules
on joint ownership to apply worldwide).

 

After exercise of an Option Right for each Collaboration Target by Roche, all
Patent Rights and Know-How arising from the development or commercialization of
Licensed Products, including their methods of manufacture and use, that is
generated by (i) either Party individually shall be owned by such generating
Party or (ii) both Parties jointly shall be owned jointly by the Parties (with
US rules on joint ownership to apply worldwide).

 

Subsequent to exercise of an Option Right for a given Collaboration Target, the
Roche Group shall not generate additional compounds directed to such
Collaboration Target under this Agreement. 

 

Subject to the foregoing, all Patent Rights and Know-How generated under this
Agreement to the extent related to Collaboration Targets, including their
methods of manufacture and use (other than Collaboration Compound IP, BPM
Technology, Other Compound IP, Biomarker IP or […***…]), shall be owned jointly
by the Parties (with US rules on joint ownership to apply worldwide). 

 

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Inventorship for Inventions (including Patent Rights and Know-How) first made
during the course of the performance of activities under this Agreement will be
determined in accordance with United States patent laws for determining
inventorship.  BPM and Roche each shall require all of its employees,
consultants and contractors to assign all Inventions conceived by them to Roche
and/or BPM, to the extent required by this Agreement. 

 

Except as specifically set forth herein, this Agreement shall not be construed,
by estoppel, implication or otherwise, as (i) giving any of the Parties any
license, right, title, interest in or ownership to any Confidential Information;
(ii) granting any license or right under any Patent Rights or Know-How; or
(iii) representing any commitment by either Party to enter into any additional
agreement.  Notwithstanding anything in this Agreement to the contrary, all
in-licensed Patent Rights or Know-How Controlled by a Party hereto will be
subject to the applicable Third Party agreement.

 

16.2  Patent Rights Owned Jointly

Subject to the licenses granted in this Agreement, all Joint Patent Rights shall
be fully exploitable by both Parties without the consent of the other Party and
without the need by either Party to account to the other Party for such
exploitation.  At the reasonable written request of a Party, the other Party
will grant such consents in writing and confirm that no such accounting is
required to effect the foregoing regarding any such jointly-owned Patent
Rights.  Subject to in all events to the rest of this Section 16, the Handling
and enforcement of any Joint Patent Rights will be jointly managed by the
Parties on mutually agreeable terms to be entered into by the Parties at the
time any such Joint Patent Rights are first filed, and all recoveries and
out-of-pocket costs and expenses arising from those activities, absent further
agreement, will be shared equally by the Parties (provided that sufficient
advance written notice of any such costs or expenses is given to the Party not
incurring same), provided that if either Party elects not to pay any such costs
or expenses for any such Patent, the Parties will meet and agree upon an
equitable way to treat such Patent.  In the event that one Party desires to
proceed with any Handling or enforcement of a Joint Patent Right, and the other
Party does not, then the Party desiring to proceed may proceed with such action
at the proceeding Party’s expense, and the proceeding Party may abandon such
activities at any time without the consent of the other Party.

 

16.3  German Statute on Employee’s Inventions

In accordance with the German Statute on Employees’ Inventions, each Party
agrees to claim the unlimited use of any Invention conceived, reduced to
practice, developed, made or created in the performance of, or as a result of,
any research by employees of any German Affiliates or any other persons acting
on behalf of such German Affiliates. For the avoidance of doubt, each Party is
responsible for fulfilling the obligations towards their employees under the
German Statute of Employee’s Inventions.

 

16.4  Trademarks and Labeling

Roche shall own the global trademarks, logos, slogans and service marks used on
or in connection with Licensed Products (“Global Trademarks”) worldwide, and
shall, at its sole cost, be responsible for selection, procurement, maintenance,
and defense of all trademarks used on or in connection with Licensed Products
worldwide.  For Program 2 and Program 4, BPM shall have the right to provide
input for the Global Trademarks which Roche shall reasonably consider and BPM
shall either use the Global Trademarks or may use other trademarks or logos of
its own choosing and at its own expense on or in connection with Licensed
Products in the BPM Territory.  Roche shall have the first right to enforce the
Global Trademarks in the Roche Territory.  For Program 2 and Program 4, BPM
shall have the first right to enforce the Global Trademarks in the BPM
Territory.  If BPM does not timely enforce the Global Trademarks in the BPM
Territory, then

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Roche shall have the right to enforce the Global Trademarks in the BPM
Territory.  Prior to commercialization of any Licensed Product in the BPM
Territory bearing a Global Trademark, the Parties will enter into a trademark
license agreement setting forth customary terms and conditions for using the
Global Trademarks and ensuring quality and good will associated with the Global
Trademarks.  Notwithstanding the foregoing, BPM shall not be obligated to use
such Global Trademarks and may instead select and use its own trademarks, logos,
slogans and service marks on or in connection with Licensed Products for Program
2 and Program 4 in the BPM Territory (the “BPM Trademarks”).  If BPM elects to
use BPM Trademarks, BPM shall, at its sole cost, be responsible for selection,
procurement, maintenance, and defense of all such BPM Trademarks used on or in
connection with Licensed Products.

 

Roche shall have the right to obtain the International Non-proprietary Name
(INN) from the World Health Organization and the US Adopted Name (USAN) from the
US adopted Names Council (USANC) as the generic name(s) for the Licensed
Products worldwide.  The Parties shall consult with each other regarding the INN
and USAN prior to Roche obtaining the INN and USAN, and Roche shall in good
faith consider BPM’s input.

 

In the case of Program 2 and Program 4, if BPM elects to use the Global
Trademark, Roche shall grant BPM an exclusive, royalty-free license to use the
Global Trademarks for the purpose of Exploiting the Licensed Products in the BPM
Territory as permitted by this Agreement. Such trademark license shall be
non-transferable, except that the BPM shall have the right to sublicense such
rights to its Affiliates and Sublicensees in the BPM Territory.

 

Roche shall maintain all registrations of such Global Trademarks worldwide, and
BPM shall not file any identical or similar registrations or other filings in
respect of any of such Global Trademarks without Roche’s prior written
consent.  BPM shall maintain all registrations of such BPM Trademarks, and Roche
shall not file any identical registrations or other filings in respect of any of
such BPM Trademarks without BPM’s prior written consent. 

 

Each Party shall use the Global Trademarks in accordance with sound trademark
and trade name usage principles and in accordance with all Applicable Law as
reasonably necessary to maintain the validity and enforceability of the Global
Trademarks. BPM recognizes that Roche’s Global Trademarks represent a valuable
asset of Roche, and that substantial recognition and goodwill are associated
with such name, logo and trademarks. BPM hereby agrees that, without prior
written authorization of Roche, it shall not use such Global Trademarks for any
purpose except as expressly permitted under this Agreement.  Roche recognizes
that BPM Trademarks represent a valuable asset of BPM, and that substantial
recognition and goodwill are associated with such name, logo and trademarks.
Roche hereby agrees that, without prior written authorization of BPM, it shall
not use such BPM Trademarks for any purpose except as expressly permitted under
this Agreement.

 

16.5  Prosecution by BPM

(a)  Subject to the remainder of this Section 16.5, BPM shall […***…] (i) Handle
all BPM Patent Rights and Patent Rights within Collaboration Compound IP,
(ii) consult with Roche as to the Handling of such Patent Rights to the extent
that, on a Collaboration Target-by-Collaboration Target, any such BPM Patent
Rights Covers the chemical structure of any Collaboration Compound
(collectively, for such Collaboration Target, “BPM Specific Patent Rights”), and
(iii) furnish to Roche copies of all documents relevant to any such Handling for
such BPM Specific Patent Rights. BPM shall furnish such documents and consult
with Roche in sufficient time before any action by BPM is due to allow Roche to
provide comments thereon, which comments BPM must consider but BPM shall retain

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final decision-making authority with respect to such Handling. At BPM’s
reasonable request, Roche shall cooperate, in all reasonable ways with the
Handling of all such Patent Rights. BPM agrees to file patent applications in
all countries consistent with BPM’s customary practices for its other internal
programs. To the extent that Roche wishes for filings in additional countries,
Roche shall provide BPM a list of such countries and BPM agrees to file patent
applications in such additional countries […***…].

 

(b)  Subject to Section 16.10, after exercise of an Option Right for each
Collaboration Target, (i) Roche shall Handle, either directly or using the
mutually agreed outside counsel previously utilized by BPM […***…] all Patent
Rights within Collaboration Compound IP to the extent Covering a Licensed
Product in the Field for the applicable Program 1, Program 3 and Program 5,
(ii) Roche shall Handle in the Roche Territory, either directly or using the
mutually agreed outside counsel used by BPM […***…] all Patent Rights within
Collaboration Compound IP to the extent Covering a Licensed Product in the Field
for a given Collaboration Target for the applicable Program 2 and 4, and
(iii) BPM shall Handle in the BPM Territory, using mutually agreed upon outside
counsel in consultation with Roche […***…] all Patent Rights within
Collaboration Compound IP to the extent Covering a Licensed Product in the Field
for a given Collaboration Target for the applicable Program 2 and 4.  The
controlling Party under this Section 16.5(b) shall […***…] (1) consult with the
other Party as to the Handling of such Patent Rights, and (2) furnish to the
other Party copies of all documents relevant to any such Handling for such
Patent Rights.  The controlling Party shall furnish such documents and consult
with the other Party in sufficient time before any action by such controlling
Party is due to allow such other Party to provide comments thereon, which
comments such controlling Party must consider but the controlling Party shall
retain final decision-making authority with respect to such Handling. At such
controlling Party’s reasonable request, the other Party shall cooperate, in all
reasonable ways with the Handling of all such Patent Rights.  Notwithstanding
the foregoing in this Section 16.5(b), before abandoning any such Patent Rights
(including electing not to file any continuation Patent Rights upon issuance of
any Patent Rights), the applicable Controlling Party shall notify the other
Party in advance of such abandonment to allow such other Party to elect to
Handle such Patent Rights […***…].

 

16.6  Prosecution of Other Patent Rights

Roche shall […***…] Handle all Roche Patent Rights and Patent Rights within
Roche Sole IP other than Joint Patent Rights (which Joint Patent Rights will be
Handled under Section 16.5 if applicable or otherwise under
Section 16.2).  Subject to Section 16.5, BPM shall […***…] Handle all Patent
Rights within BPM Sole IP other than Joint Patent Rights (which Joint Patent
Rights will be Handled under Section 16.5 if applicable or otherwise under
Section 16.2).

 

16.7  Patent Coordination Team

Where the Parties need to consult with each other on the Handling of Patent
Rights, the Parties shall establish a patent coordination team and shall adopt
procedures for interacting on patent matters.  The patent coordination team
shall be subject to the oversight of the JDC.  The patent coordination team also
shall serve as a forum for promptly notifying the other Party when an Invention
is made by a Party.

 

16.8  Unified Patent Court (Europe)

At any time prior to the end of the “transitional period” as such term is used
in Article 83 of the Agreement on a Unified Patent Court between the
participating Member States of the European Union, for a given relevant EU
Patent Right, Roche may request in writing that BPM either (i) opt out from the
exclusive competence of the Unified Patent Court or (ii) if applicable, withdraw
a

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previously-registered opt-out, and BPM shall notify the Registry, pay any such
registry fee and take such other action as may be necessary to effect the
opt-out or opt-out withdrawal (“Register”).  BPM shall Register within five (5)
days of receipt of Roche’s written request, or such other time parameters
specified by Roche.

 

16.9  CREATE Act

It is the intention of the Parties that this Agreement is a “joint research
agreement” as that phrase is defined in the Cooperative Research and Technology
Enhancement Act of 2004, 35 U.S.C. § 103(c)(2)-(c)(3) (the “CREATE
Act”).  Notwithstanding anything to the contrary in this Agreement, each Party
will have the right to invoke the CREATE Act when exercising its rights under
this Agreement, but with respect to any Patent Rights with the BPM IP or
Collaboration Compound IP, only with the prior written consent of BPM in its
sole discretion, and with respect to any Patent Rights within the Roche IP, only
with the prior written consent of Roche in its sole discretion.  In the event
that a Party intends to invoke the CREATE Act, once agreed to by the other Party
if required by the preceding sentence, it will notify the other Party and the
other Party will cooperate and coordinate its activities with such Party with
respect to any filings or other activities in support thereof. 

 

16.10  Infringement

Each Party shall promptly provide written notice to the other Party during the
Agreement Term of any (i) known infringement or suspected infringement by a
Third Party of any BPM IP, Patent Rights within Collaboration Compound IP, Roche
Patent Rights or Joint Patent Rights, or (ii) known or suspected unauthorized
use or misappropriation by a Third Party of any BPM Know-How, Roche Know-How or
Joint Know-How, in each case if and to the extent involving any
commercialization of any Licensed Product (or other compounds that satisfy the
Compound Criteria) for the applicable Collaboration Target in the Field, and
shall provide the other Party with all evidence in its possession and Control
supporting such infringement or unauthorized use or misappropriation.

 

Within ten (10) Business Days after a Party provides or receives such written
notice (“Decision Period”), such Party in its Territory (i.e., Roche in the
Roche Territory and BPM in the BPM Territory), in its sole discretion, shall
decide whether or not to initiate a suit or action in the Territory regarding
such infringement or unauthorized use or misappropriation and shall notify the
other Party in writing of its decision in writing (“Suit Notice”).

 

If Roche decides to bring a suit or take action in the Roche Territory with
respect to such infringement or unauthorized use or misappropriation, once the
applicable Suit Notice is provided, Roche may immediately commence such suit or
take such action in the Roche Territory. In the event that Roche (i) does not in
writing advise BPM within the Decision Period that Roche will commence suit or
take action, or (ii) fails to commence suit or take action within a reasonable
time after providing Suit Notice, BPM shall thereafter have the right to
commence suit or take action in the Roche Territory and shall provide written
notice to Roche of any such suit commenced or action taken by BPM. If BPM
decides to bring a suit or take action in the BPM Territory with respect to such
infringement or unauthorized use or misappropriation, once the applicable Suit
Notice is provided, BPM may immediately commence such suit or take such action
in the BPM Territory. In the event that BPM (i) does not in writing advise Roche
within the Decision Period that BPM will commence suit or take action, or
(ii) fails to commence suit or take action within a reasonable time after
providing Suit Notice, Roche shall thereafter have the right to commence suit or
take action in the BPM Territory and shall provide written notice to BPM of any
such suit commenced or action taken by Roche.

 

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Upon written request, the Party bringing suit or taking action (“Initiating
Party”) shall keep the other Party informed of the status of any such suit or
action and shall provide the other Party with copies, to the extent the
Initiating Party is lawfully permitted to do so, of all substantive documents or
communications filed in such suit or action. The Initiating Party shall have the
sole and exclusive right to select counsel for any such suit or action, and any
actions that otherwise would have been Handled with respect to any Patent Rights
subject to this Section 16 will be controlled by the Initiating Party to the
extent reasonably related to such suit or action.

 

The Initiating Party shall, except as provided below, pay all expenses of the
suit or action, including the Initiating Party’s attorneys’ fees and court
costs. Any damages, settlement fees or other consideration received as a result
of such suit or action shall be allocated as follows:

 

(a)    First, to reimburse the Initiating Party for its costs and, if any
remains, to the other Party for any advisory counsel fees and costs; and

 

(b)    Second, the balance, if any, (1) to the extent a lost profits award,
shall be treated as Net Sales and subject to royalty obligations under this
Agreement, and (2) to the extent a royalty or other type of award, will be paid
[…***…].

 

If the Initiating Party believes it is reasonably necessary or desirable to
obtain an effective remedy, upon written request the other Party agrees to be
joined as a party to the suit or action but shall be under no obligation to
participate except to the extent that such participation is required as the
result of its being a named party to the suit or action. At the Initiating
Party’s written request, the other Party shall offer reasonable assistance to
the Initiating Party in connection therewith at no charge to the Initiating
Party except for reimbursement of reasonable out-of-pocket expenses incurred by
the other Party in rendering such assistance. The other Party shall have the
right to participate and be represented in any such suit or action by its own
counsel at its own expense.

 

The Initiating Party may settle, consent judgment or otherwise voluntarily
dispose of the suit or action (“Settlement”) without the written consent of the
other Party but only if such Settlement can be achieved without adversely
affecting the other Party (including any of its Patent Rights). If a Settlement
could adversely affect the other Party, then the written consent of the other
Party would be required, which consent shall not be unreasonably withheld,
conditioned or delayed.

 

16.11  Defense

If an action for infringement of Patent Rights or trade secrets misappropriation
is commenced against either Party, its licensees or its sublicensees related to
the conduct of the activities within the scope of the Research Plan, or the
development, manufacture, use or sale of a Product in the Roche Territory, then
Roche shall have the right (but not the obligation) to defend such action at its
own expense, and BPM shall assist and cooperate with Roche, at Roche’s expense,
to the extent necessary in the defense of such suit. Roche shall have the right
to settle the suit or consent to an adverse judgment thereto, in its sole
discretion, so long as such settlement or adverse judgment does not adversely
affect the rights of the BPM Group (including any Patent Rights owned or
in-licensed by any of them). Roche shall assume full responsibility for the
payment of any award for damages, or any amount due pursuant to any settlement
entered into by it with such Third Party. If an action for infringement of
Patent Rights or trade secrets misappropriation is commenced against either
Party, its licensees or its sublicensees related to the development,
manufacture, use or sale of a Product in the BPM Territory, then BPM shall have
the right (but not the obligation) to defend such action at its own expense, and
Roche shall assist and cooperate with BPM, at BPM’s expense, to the extent
necessary in the defense of such suit. BPM shall have the right to settle the
suit or consent to an adverse judgment thereto, in its sole discretion, so long

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as such settlement or adverse judgment does not adversely affect the rights of
the Roche Group (including any Patent Rights owned or in-licensed by any of
them). BPM shall assume full responsibility for the payment of any award for
damages, or any amount due pursuant to any settlement entered into by it with
such Third Party.

 

The Parties shall cooperate with each other in connection with any such claim,
suit or proceeding and shall keep each other reasonably informed of all material
developments in connection with any such claim, suit or proceeding.

 

Notwithstanding the above, neither Party shall enter into any settlement of any
such claim under this Section 16.11 without the prior written consent of the
other Party if such settlement would require such other Party to be subject to
an injunction or to make any monetary payment to such Party or any Third Party,
or admit any wrongful conduct by such other Party or its Affiliates, or would
limit or restrict the claims of or admit any invalidity and/or unenforceability
of any of the Patent Rights owned or in-licensed by such other Party, or have
any impact on activities outside the Field.

 

16.12  Common Interest Disclosures

With regard to any information or opinions disclosed pursuant to this Agreement
by one Party to each other regarding intellectual property and/or technology
owned by Third Parties, the Parties agree that they have a common legal interest
in determining whether, and to what extent, Third Party intellectual property
rights may affect the conduct of the activities under the Research Plans or
Library Compounds, Other Compounds, Collaboration Compounds, Products or
Licensed Products, and have a further common legal interest in defending against
any actual or prospective Third Party claims based on allegations of misuse or
infringement of intellectual property rights relating to the conduct of the
activities under the Research Plans or Library Compounds, Other Compounds,
Collaboration Compounds, Products or Licensed Products. Accordingly, the Parties
agree that all such information and materials obtained by BPM and Roche from
each other will be used solely for purposes of the Parties’ common legal
interests with respect to the conduct of this Agreement. All information and
materials will be treated as protected by the attorney-client privilege, the
work product privilege, and any other privilege or immunity that may otherwise
be applicable. By sharing any such information and materials, neither Party
intends to waive or limit any privilege or immunity that may apply to the shared
information and materials. Neither Party shall have the authority to waive any
privilege or immunity on behalf of the other Party without such other Party’s
prior written consent, nor shall the waiver of privilege or immunity resulting
from the conduct of one Party be deemed to apply against the other Party.

 

16.13  Hatch-Waxman

Notwithstanding anything herein to the contrary, should a Party receive a
certification for a Licensed Product pursuant to the Drug Price Competition and
Patent Term Restoration Act of 1984 (Public Law 98-417, known as the
Hatch-Waxman Act), as amended, or its equivalent in a country other than the US,
with respect to any activities under this Agreement in the Field, then such
Party shall immediately provide the other Party with a copy of such
certification. For each Licensed Product, Roche in the Roche Territory, and BPM
in the BPM Territory, shall have thirty (30) days from date on which it receives
or provides a copy of such certification to provide written notice to the other
Party (“H-W Suit Notice”) whether such first Party will bring suit, at its
expense, within a forty-five (45) day period from the date of such
certification. Should such thirty (30) day period expire without such first
Party bringing suit or providing such H-W Suit Notice, then such other Party
shall be free to immediately bring suit in its name.

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16.14  Patent Term Extensions

With respect to Patent Rights within the Collaboration Compound IP with
application in the Field, the Parties shall use Commercially Reasonable Efforts
to obtain all available patent term extensions, adjustments or restorations, or
supplementary protection certificates (“SPCs”, and together with patent term
extensions, adjustments and restorations, “Patent Term Extensions”, in each case
for such Patent Rights within Collaboration Compound IP with Field
applicability). For Licensed Products with application in the Field in the Roche
Territory, BPM shall execute such authorizations and other documents and take
such other actions as may be reasonably requested by Roche to obtain such Patent
Term Extensions, including designating Roche as its agent for such purpose as
provided in 35 USC § 156.  BPM shall retain those rights for Licensed Products
in the BPM Territory.  All filings for such Patent Term Extensions shall be made
by Roche for Licensed Products in the Roche Territory and by BPM for Licensed
Products in the BPM Territory; provided, that in the event that the lead Party
elects not to file for a Patent Term Extension, the lead Party shall
(a) promptly inform the other Party of its intention not to file and (b) grant
BPM the right to file for such Patent Term Extension. Each Party shall execute
such authorizations and other documents and take such other actions as may be
reasonably requested by the other Party to obtain such extensions. The Parties
shall cooperate with each other in gaining patent term restorations, extensions
and/or SPCs wherever applicable to such Patent Rights within Collaboration
Compound IP.

 

17.     Representations and Warranties

 

17.1  Third Party Patent Rights

[…***…] represents and warrants, as of the Effective Date, that it has no
knowledge of the existence of any patent or patent application owned by or
licensed to any Third Party that could prevent the activities contemplated by
this Agreement in the Territory.

 

17.2  Ownership of Patent Rights

[…***…]represents and warrants, as of the Effective Date, that it is the
exclusive owner of all right, title and interest in, or is the exclusive
licensee of, the […***…].

 

17.3  Inventors

[…***…]represents and warrants, as of the Effective Date, that (a) it has
obtained the assignment of, or an exclusive license under, all interest and all
rights or licenses thereunder with respect to the […***…] necessary to grant the
licenses granted hereunder and (b) all of its employees, officers and
consultants have executed agreements requiring assignment to it of all
Inventions made by such individuals during the course of and as a result of
their association with it.

 

17.4  Grants

To its knowledge and belief, each of BPM and Roche represents and warrants, as
of the Effective Date, that it has the lawful right to grant Roche or BPM,
respectively, and each of their Affiliates the rights and licenses described in
this Agreement.

 

17.5  Authorization

Each of BPM and Roche represents and warrants, as of the Effective Date, that
its execution, delivery and performance of this Agreement and all instruments
and documents to be delivered by it hereunder: (i) are within its corporate
power and authority; (ii) have been duly authorized by all necessary or proper
corporate action; (iii) are not in contravention of any provision any of its
formation or governance documents; (iv) to its knowledge, will not violate any
law or regulation or any order or decree of any court of governmental
instrumentality; (v) will not violate the terms of any indenture, mortgage, deed
of trust, lease, agreement, or other instrument to which it is a party

 

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or by which it or any of its property is bound, which violation would have an
adverse effect on its financial condition  or on its ability to perform its
obligations hereunder; and (vi) do not require any filing or registration with,
or the consent or approval of, any governmental body, agency, authority or any
other Person, which has not been made or obtained previously.

 

17.6  Validity of Patent Rights

[…***…] represents and warrants, as of the Effective Date, that it is not in
possession of information that could render invalid and/or unenforceable any
claims that are in any of the […***…].  […***…] has no knowledge of any
inventorship disputes concerning any […***…].

 

17.7  Ownership and Validity of Know-How

[…***…] represents and warrants, as of the Effective Date, that its Know-How is
legitimately in its possession and, to its knowledge, has not been
misappropriated from any Third Party. […***…] has taken reasonable measures to
protect the confidentiality of its Know-How.

 

17.8  No Claims

Each of BPM and Roche represents and warrants, as of the Effective Date, that
there are no claims or investigations, pending or threatened against it or any
of its Affiliates, at law or in equity, or before or by any governmental
authority relating to the matters contemplated under this Agreement or that
would materially adversely affect its ability to perform its obligations
hereunder.

 

17.9  No Conflict

To its knowledge, each of BPM and Roche represents and warrants, as of the
Effective Date that neither it nor any of its Affiliates is or will be under any
obligation to any person, contractual or otherwise, that is conflicting with the
terms of this Agreement or that would impede the fulfillment of BPM’s
obligations hereunder.

 

17.10  No Other Representations

EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THE FOREGOING REPRESENTATIONS
AND WARRANTIES ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OF PRODUCTS.

 

18.     Indemnification

 

18.1  Indemnification by Roche

Roche shall indemnify, hold harmless and defend BPM and its directors, officers,
employees and agents from and against any and all Third Party liabilities,
losses, expenses, cost of defense (including without limitation attorneys' fees,
witness fees, damages, judgments, fines and amounts paid in settlement) and any
amounts BPM becomes legally obligated to pay because of breach of contract by
Roche or any claim or claims against it to the extent that such claim or claims
arise out of Roche’s and its Affiliates’ actions or inactions in connection with
activities under this Agreement, including the Exploitation of any Library
Compounds, Other Compounds, Collaboration Compounds, Products or Licensed
Products, except to the extent such liabilities, losses, expenses, costs and
amounts are due to the breach of this Agreement by BPM or the gross negligence
or willful misconduct or failure to act of BPM.

 

18.2  Indemnification by BPM

BPM shall indemnify, hold harmless and defend Roche and its directors, officers,
employees and agents from and against any and all Third Party liabilities,
losses, expenses, cost of defense

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(including without limitation attorneys' fees, witness fees, damages, judgments,
fines and amounts paid in settlement) and any amounts Roche becomes legally
obligated to pay because of breach of contract by BPM or any claim or claims
against it to the extent that such claim or claims arise out of BPM’s and BPM’s
Affiliates’ actions or inactions in connection with activities under this
Agreement, including the Exploitation of any Library Compounds, Other Compounds,
Collaboration Compounds, Products or Licensed Products, except to the extent
such liabilities, losses, expenses, costs and amounts are due to the breach of
this Agreement by Roche or the gross negligence or willful misconduct or failure
to act of Roche.

 

18.3  Procedure

In the event of a claim by a Third Party against a Party entitled to
indemnification under this Agreement ("Indemnified Party"), the Indemnified
Party shall promptly notify the other Party ("Indemnifying Party") in writing of
the claim and the Indemnifying Party shall undertake and solely manage and
control, at its sole expense, the defense of the claim and its settlement. The
Indemnified Party shall cooperate with the Indemnifying Party and may, at its
option and expense, be represented in any such action or proceeding by counsel
of its choice. The Indemnifying Party shall not be liable for any litigation
costs or expenses incurred by the Indemnified Party without the Indemnifying
Party’s written consent. The Indemnifying Party shall not settle any such claim
unless such settlement fully and unconditionally releases the Indemnified Party
from all liability relating thereto, unless the Indemnified Party otherwise
agrees in writing.

 

19.     Liability

 

19.1  Limitation of Liability

Subject to Section 19.2, neither Party shall be liable to the other Party as a
result of failure or delay to develop and/or commercialize any Collaboration
Compound, Product or Licensed Product, as applicable, including but not limited
to, (a) a delay in timelines, (b) delay or failure to recruit patients, (c) a
change in its respective study protocols, or (d) failure of the other Party to
obtain Regulatory Approval for any Collaboration Compound, Product or Licensed
Product, as applicable.

 

19.2  Disclaimer

THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHER
REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN. BPM AND ROCHE
DISCLAIM ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO EACH
OF THEIR RESEARCH, DEVELOPMENT AND COMMERCIALIZATION EFFORTS HEREUNDER,
INCLUDING, WITHOUT LIMITATION, WHETHER THE PRODUCTS CAN BE SUCCESSFULLY
DEVELOPED OR MARKETED, THE ACCURACY, PERFORMANCE, UTILITY, RELIABILITY,
TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS, MERCHANTABILITY OR FITNESS
FOR ANY PARTICULAR PURPOSE WHATSOEVER OF THE PRODUCTS. EXCEPT FOR
INDEMNIFICATION UNDER ARTICLE 18 AND BREACH OF NON-DISCLOSURE AND NON-USE UNDER
ARTICLE 20, IN NO EVENT SHALL EITHER BPM OR ROCHE BE LIABLE FOR SPECIAL,
INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THIS AGREEMENT
BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.

 

20.     Obligation Not to Disclose Confidential Information

 

20.1  Non-Use and Non-Disclosure

Subject to the remainder of this Section 20, during the Agreement Term and for
five (5) years thereafter, a Receiving Party shall (i) treat Confidential
Information provided by Disclosing Party as it would treat its own information
of a similar nature, (ii) take all reasonable precautions not to

 

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disclose such Confidential Information to Third Parties, without the Disclosing
Party’s prior written consent, and (iii) not use such Confidential Information
other than for fulfilling its obligations or exploit its licenses and other
rights under this Agreement.

 

20.2  Permitted Disclosure

Notwithstanding the obligation of non-use and non-disclosure set forth in
Section 20.1, the Parties recognize the need for certain exceptions to this
obligation, specifically set forth below, with respect to press releases, patent
rights, publications, and certain commercial considerations.

 

20.3  Press Releases

The Parties may, individually or jointly, issue a press release announcing the
existence and selected key terms of this Agreement, in a form substantially
similar to the template attached as Appendix 20.3.

 

Roche shall issue press releases in accordance with its internal policy that
typically does not issue a second press release until Phase I proof of concept
has been achieved for a Product and Roche has exercised its Option Right with
respect to the Collaboration Target. Roche shall provide BPM with a copy of any
draft press release related to the activities contemplated by this Agreement at
least two (2) weeks prior to its intended publication for BPM's review. BPM may
provide Roche with suggested modification to the draft press release. Roche
shall consider BPM's suggestions in issuing its press release.

 

BPM shall only issue press releases related to the activities contemplated by
this Agreement that have either (i) been approved by Roche or (ii) are required
to be issued by BPM as a matter of law and BPM has received a competent legal
opinion to that effect. In all circumstances, BPM shall provide Roche with a
draft press release at least two (2) weeks prior to its intended publication for
Roche's review, unless a shorter time period is required as a matter of law and
BPM has received a competent legal opinion to that effect. During such period,
Roche shall (a) approve the draft press release and permit BPM to issue the
press release, (b) contact BPM to discuss modification to the draft press
release, or (c) contact BPM and disapprove the press release. If Roche asks for
modification, then BPM shall either make such modification or work with Roche to
arrive at a press release that Roche approves. Notwithstanding any of the
foregoing, BPM may issue a press release upon the achievement of any milestone
event (including the amount and payment of such milestone payment for any such
milestone event) without obtaining the consent of Roche announcing the
achievement of such event.

 

To ensure communication alignment, responses (if any) to inquiries by media or
other Third Parties after issuance of a permitted press release by BPM (solely
or jointly with Roche) shall consist solely of the press release language or
shall follow the response guidelines that may be mutually developed by the
Parties except to the extent additional or varying disclosure is required by a
Regulatory Authority, including the United States Securities and Exchange
Commission (or foreign equivalent) to comply with either Party’s disclosure
obligations as a public company.

 

20.4  Publications

During the Agreement Term, the following restrictions shall apply with respect
to disclosure by any Party of Confidential Information in any publication or
presentation:

 

Both Parties acknowledge that it is their policy for the studies and results
thereof to be registered and published in accordance with their internal
guidelines. Roche, in accordance with its internal policies and procedures,
shall have the right to publish all studies, clinical trials and results thereof
on the clinical trial registries that are maintained by or on behalf of Roche.
BPM shall not publish

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any studies, clinical trials or results thereof on its clinical trial registry,
provided however, that Roche’s clinical trial registry can be accessed via a
link from BPM’s clinical trial registry.

 

A Party ("Publishing Party") shall provide the other Party with a copy of any
proposed material publication or presentation at least thirty (30) days (or
sixty (60) days in the case of a manuscript) prior to submission for publication
so as to provide such other Party with an opportunity to recommend any changes
it reasonably believes are necessary to continue to maintain the Confidential
Information disclosed by the other Party to the Publishing Party in accordance
with the requirements of this Agreement. The incorporation of such recommended
changes shall not be unreasonably refused; and if such other Party notifies
("Publishing Notice") the Publishing Party in writing, within such thirty (30)
day period (or sixty (60) day period in the case of a manuscript) after receipt
of the copy of the proposed publication, presentation, or manuscript, that such
publication or presentation in its reasonable judgment (i) contains an
invention, solely or jointly conceived and/or reduced to practice by the other
Party, for which the other Party reasonably desires to obtain patent protection
or (ii) could be expected to have a material adverse effect on the commercial
value of any Confidential Information disclosed by the other Party to the
Publishing Party, the Publishing Party shall prevent such publication or delay
such publication for a mutually agreeable period of time. In the case of
inventions, a delay shall be for a period reasonably sufficient to permit the
timely preparation and filing of a patent application(s) on such invention, and
in no event less than ninety (90) days from the date of the Publishing Notice.

 

20.5  Commercial Considerations

Nothing in this Agreement shall prevent a Receiving Party or its Affiliates from
disclosing Confidential Information of the Disclosing Party and the existence
and terms of this Agreement to (i) governmental agencies to the extent required
or desirable to secure government approval for the development, manufacture or
commercialization of a Product or Licensed Product in the Territory or to obtain
patents in accordance with this Agreement; provided that such Confidential
Information will be disclosed only to the extent reasonably necessary to do so,
and where permitted, subject to confidential treatment, (ii) Third Parties
acting on behalf of the Receiving Party, to the extent reasonably necessary for
the Receiving Party to perform its obligations or exercise its rights under this
Agreement, (iii) Third Parties requesting Clinical Study data information (in
accordance with the Receiving Party’s then-current data sharing policy),
(iv) Third Parties to the extent reasonably necessary to market the Licensed
Products in the Territory, (v) its Affiliates, consultants, CROs, licensees or
Sublicensees, and its and their directors, officers, employees, agents or
advisors (including accountants, attorneys, consultants, bankers, financial
advisors and members of advisory boards) who reasonably require Confidential
Information, are informed of the confidential nature of such information and are
bound by non-use and confidentiality obligations with respect to such
Confidential Information, and (vi) any bona fide potential or actual sources of
debt or equity financing or parties to a merger, acquisition or similar
transaction (including attorneys, accountants, consultants, bankers or financial
advisors of the foregoing) who reasonably require such Confidential Information
as part of their due diligence investigations and who are informed of the
confidential nature of such information and this Agreement and are bound by
obligations of non-use and confidentiality with respect to such Confidential
Information. The Receiving Party may disclose Confidential Information of the
Disclosing Party to the extent that such Confidential Information is required to
be disclosed by the Receiving Party to comply with Applicable Law, including the
rules and regulations of the U.S. Securities and Exchange Commission (or
equivalent foreign agency) or a securities exchange on which its or its
Affiliate’s securities are listed (or to which an application for listing has
been submitted), to defend or prosecute litigation or to comply with
governmental regulations, provided that the Receiving Party provides prior
written notice of such disclosure to the Disclosing Party, such Confidential
Information is disclosed only to the extent reasonably necessary to do so and,

 

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to the extent practicable, takes reasonable and lawful actions to minimize the
degree of such disclosure.

 

The Parties acknowledge that either or both Parties may be obligated to make a
filing (including to file a copy of this Agreement) with the U.S. Securities and
Exchange Commission (or equivalent foreign agency) or a governmental
authority.  Each Party will be entitled to make such a required filing, provided
that it will (a) submit in connection with such filing the redacted copy of this
Agreement in a form mutually agreed to by the Parties (the “Redacted
Agreement”), (b) request, and use commercially reasonable efforts consistent
with Applicable Laws to obtain, confidential treatment of all terms redacted
from this Agreement, as reflected in the Redacted Agreement, for a period of at
least ten (10) years, (c) promptly deliver to the other Party any written
correspondence received by it or its representatives from the U.S. Securities
and Exchange Commission (or equivalent foreign agency) or a governmental
authority with respect to such confidential treatment request and promptly
advise the other Party of any other material communications between it or its
representatives with the U.S. Securities and Exchange Commission (or equivalent
foreign agency) or a governmental authority with respect to such confidential
treatment request, (d) upon the written request of the other Party, if legally
justifiable, request an appropriate extension of the term of the confidential
treatment period, and (e) if the U.S. Securities and Exchange Commission (or
equivalent foreign agency) or a governmental authority requests any changes to
the redactions set forth in the Redacted Agreement, use commercially reasonable
efforts consistent with Applicable Laws to support the redactions in the
Redacted Agreement as originally filed and not agree to any changes to the
Redacted Agreement without, to the extent practical, first discussing such
changes with the other Party and taking the other Party’s comments into
consideration when deciding whether to agree to such changes (provided that a
Party will only be required to make such efforts to support such redactions
once).  Each Party will be responsible for its own legal and other external
costs in connection with any such filing, registration or notification.

 

21.     Term and Termination

 

21.1  Commencement and Term

This Agreement shall commence upon the Effective Date and continue for the
Agreement Term.

 

21.2  Termination

 

21.2.1  Termination for Breach

A Party (“Non-Breaching Party”) shall have the right to terminate this Agreement
in its entirety or on a Collaboration Target-by-Collaboration Target or
Program-by-Program basis, in the event the other Party (“Breaching Party”) is
(i) in material breach of any of its material obligations under this Agreement
with respect to Program 1, Program 3, or Program 5, or (ii) in material breach
of any of its material obligations under this Agreement in a manner that
fundamentally frustrates the transactions contemplated by this Agreement with
respect to Program 2 or Program 4, in either (i) or (ii) to this Agreement or
such Collaboration Target or Program (as applicable).  The Non-Breaching Party
shall provide written notice to the Breaching Party, which notice shall identify
the breach and the Collaboration Target(s) or Program(s) for which, the
Non-Breaching Party intends to have this Agreement terminate. The Breaching
Party shall have a period of ninety (90) days after such written notice is
provided (“Peremptory Notice Period”) to cure such breach. If the alleged
Breaching Party has a bona fide dispute as to whether such breach occurred or
has been cured, it will so notify the Non-Breaching Party within the Peremptory
Notice Period, and the expiration of the Peremptory Notice Period shall be
tolled until such dispute is resolved pursuant to Section 23.2. Upon a
determination of breach or failure to cure, the Breaching Party may have

 

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the remainder of the Peremptory Notice Period to cure such breach. If such
breach is not cured within the Peremptory Notice Period, then absent withdrawal
of the Non-Breaching Party’s request for termination, this Agreement shall
terminate in its entirety or with respect to such Collaboration Target(s) or
Program(s) effective as of the expiration of the Peremptory Notice Period.

 

21.2.2  Insolvency

A Party shall have the right to terminate this Agreement if the other Party
incurs an Insolvency Event; provided, however, in the case of any involuntary
bankruptcy proceeding, such right to terminate shall only become effective if
the Party that incurs the Insolvency Event consents to the involuntary
bankruptcy or such proceeding is not dismissed within ninety (90) days after the
filing thereof.

 

21.2.3  Effects of Change of Control

If there is a Change of Control, then the Party experiencing such Change of
Control (“Acquired Party”) shall provide written notice to the other Party
(“Non-Acquired Party”) at least thirty (30) days prior to completion of such
Change of Control, subject to any confidentiality obligations of the Acquired
Party then in effect (but in any event shall notify the Non-Acquired Party
within fifteen (15) days after completion of such Change of Control).

 

The Change of Control Group in connection with such Change of Control shall not
utilize any of the Non-Acquired Party’s solely owned (with respect to the
Acquired Party) Know-How or Patent Rights licensed to the Acquired Party under
this Agreement, or Inventions or Confidential Information (but not Joint
Know-How, Joint Patent Rights or Joint Inventions) (such solely-owned items,
collectively, “Sensitive Information”), except as otherwise permitted by the
Agreement.

 

Following closing of the Change of Control, the Acquired Party and the Change of
Control Group shall adopt in writing reasonable procedures to prevent the
disclosure of Sensitive Information beyond the Acquired Party’s and the Change
of Control Group’s personnel who need to know the Sensitive Information solely
for the purpose of fulfilling the Acquired Party’s obligations, and exercising
the Acquired Party’s licenses and other rights, under this Agreement.

 

In addition, in the event that (a) BPM is acquired through a Change of Control
by a […***…] (based on […***…]) within […***…] after the Effective Date and (b)
within […***…] after such Change of Control, BPM experiences a significant delay
with respect to key deliverables included in the Research Plan for either
[…***…] or […***…] in effect as of the Change of Control and is unable to make
up such delay to the anticipated Research Plan for […***…] and/or […***…] as
applicable in the following […***…], then, in lieu of exercising Roche’s right
to terminate this Agreement in accordance with Section 21.2.1, for any
Collaboration Compounds that the JRC has determined have satisfied […***…] for
Collaboration Targets […***…] or […***…] (as applicable) prior to the closing of
such Change of Control, Roche shall have the right, upon written notice to BPM,
to step in and assume the medicinal chemistry efforts previously performed by
BPM for such Collaboration Compounds that the JRC has determined have satisfied
[…***…] as determined by the JRC.  All other activities pursuant to the Research
Plan shall be managed by the JRC in accordance with Section 8.4 and Section
4.1.3. For clarity, the foregoing rights (i) shall not apply to any Library
Compounds or Other Compounds that have not satisfied Lead Series Identified
Criteria for Collaboration Targets […***…] or […***…] (as applicable), or any
other Collaboration Targets, and (ii) shall terminate in full […***…] after the
Effective Date. 

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21.2.4  Termination by Roche without Cause

Prior to exercise of its first Option Right, Roche shall have the right to
terminate this Agreement as a whole or on a Collaboration
Target-by-Collaboration Target basis, upon one hundred twenty (120) days prior
written notice.  Following the exercise of its first Option Right, Roche shall
have the right to terminate this Agreement at any time as a whole, on a
Collaboration Target-by-Collaboration Target basis, on a Program-by-Program
basis, or, after First Commercial Sale, upon a country-by-country basis, upon
(a) prior to First Commercial Sale of the first Licensed Product for such
Collaboration Target or Program, one hundred twenty (120) days prior written
notice or (b) after the First Commercial Sale of the first Licensed Product for
such Collaboration Target or Program, one hundred eighty (180) days prior
written notice. The effective date of termination under this Section 21.2.4
shall be the date one hundred twenty (120) days (or one hundred eighty (180)
days as the case may be) after Roche provides such written notice to BPM.

 

21.2.5  Termination by BPM for Roche Suspension of Development

On a Program-by-Program basis, if (i) after the exercise of Roche’s Option Right
with respect to a Collaboration Target for such Program, […***…], and (ii) such
[…***…] was not due to events outside of the reasonable control of the Roche
Group […***…], then BPM will have the right, in its sole discretion, to
terminate this Agreement with respect to such Program upon […***…] written
notice to Roche.  In the event that the Roche Group does not proceed with
development of the applicable Program as a result of events outside its
reasonable control, the […***…].  

 

21.3  Consequences of Termination

 

21.3.1  Termination by BPM for Breach by Roche, Roche Insolvency, by Roche
Without Cause, or by BPM for Roche Suspension of Development or
Commercialization

Upon any termination by BPM for breach by Roche pursuant to Section 21.2.1 or
21.2.5 or for an Insolvency Event of Roche pursuant to Section 21.2.2 or by
Roche without cause pursuant to Section 21.2.4, on the effective date of
termination (a) the rights and licenses granted by BPM to Roche under this
Agreement shall terminate in their entirety or on a Collaboration
Target-by-Collaboration Target basis or Program-by-Program basis or on a
country-by-country basis, as applicable, (b) except as set forth in this Section
21.3.1, the rights and obligations of the Parties hereunder will terminate with
respect to the Collaboration Target, Program, or country and any applicable
Collaboration Target shall become a “Terminated Target,” and (c) Roche will
execute all documents and take all such further actions as may be reasonably
requested by BPM in order to give effect to the foregoing clauses.

 

If BPM desires to continue to Exploit Licensed Product(s) (or any derivatives,
improvements, modifications or enhancements against the applicable Target,
thereof) (collectively, the “Reversion Products”) in the Field after such
termination, BPM shall give a Continuation Election Notice to Roche within
ninety (90) days of the effective date of termination. If Roche receives such a
timely Continuation Election Notice, and to the extent reasonably requested by
BPM:

 

(a)         As promptly as practicable after the effective date of termination,
Roche shall, to the extent Roche has the right to do so under Applicable Law,
assign and transfer to BPM or BPM’s designee possession and ownership of all
governmental or regulatory filings, regulatory materials, pricing approvals and
Regulatory Approvals, all copies of material correspondence and conversation
logs relating to the Exploitation of the Reversion Products, all final
pre-clinical and clinical study reports and clinical study protocols, Global

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Trademarks, and all data, including non-clinical and clinical data and other
material sales and marketing related information in Roche’s possession and
control related to Reversion Product(s) or the corresponding Collaboration
Target(s) to the extent necessary or reasonably useful for BPM to continue to
Exploit the Reversion Product(s) in the Field.  All data and other information
shall be transferred in the form and format in which it is maintained by Roche.
Original paper copies shall only be transferred, if required by Applicable Law.
Roche shall not be required to prepare or finalize any new data, reports or
information solely for purposes of transfer to BPM.

 

(b)        Roche shall appoint BPM as Roche’s or Roche’s Affiliates’ (and to the
extent permitted by the applicable sublicense, its Sublicensees’) agent for all
Reversion Product-related matters involving Regulatory Authorities in the Roche
Territory until all Regulatory Approvals, regulatory materials, pricing
approvals and other governmental or regulatory filings required to be assigned
to BPM hereunder have, in fact, been assigned to BPM or its designee, but in no
event longer than the one (1) year anniversary of the effective date of
termination.  In the event of failure to obtain assignment of any of the items
required to be assigned under this Section 21.3.1, Roche hereby consents and
grants to BPM or its designee the right to access and reference (without any
further action required on the part of Roche, whose authorization to file this
consent with any Regulatory Authority is hereby granted) any such item with
respect to all Reversion Products.

 

(c)        If the effective date of termination is after First Commercial Sale
of a Reversion Product, then, to the extent permitted by Applicable Law, Roche
or its Affiliates (or to the extent permitted by the applicable sublicense, its
Sublicensees) will appoint BPM or its designee as its exclusive distributor of
such Reversion Products in the Roche Territory and grant BPM or its designee the
right to appoint sub-distributors, until such time as all Regulatory Approvals
in the Roche Territory have been transferred to BPM or its designee, but in no
event longer than the one (1) year anniversary of the effective date of
termination.

 

(d)        Roche shall assign and transfer all Clinical Study agreements, to the
extent such agreements have not been cancelled and are assignable without Roche
paying any material consideration or commencing litigation in order to effect an
assignment of any such agreement.

 

(e)        BPM shall, upon transfer from Roche pursuant to this Section 21.3.1,
have the right to disclose such filings, approvals and data to (i) governmental
agencies of the country to the extent required or desirable to secure government
approval for the development, manufacturing or sale of Reversion Product(s) in
the country, (ii) Third Parties acting on behalf of BPM, its Affiliates or
licensees, to the extent reasonably necessary for the Exploitation of Reversion
Product(s) in the country, and (iii) Third Parties to the extent reasonably
necessary to Exploit Reversion Product(s) in the country.

 

(f)        Roche shall grant (without any further action required on the part of
BPM) to BPM (a) an exclusive (even as to Roche), perpetual, irrevocable (except
as set forth below), license, with the right to grant sublicenses through
multiple tiers, under the Roche Patent Rights and Roche Know-How, including
Roche’s interest in the Joint Patent Rights and Joint Know-How, solely to the
extent necessary to allow BPM, its Affiliates or licensees to Exploit the
Reversion Product(s) in the Field in the terminated country(ies), and (b) a
non-exclusive, worldwide, perpetual, irrevocable (except as set forth below)
license, with the right to grant sublicenses through multiple tiers, under the
Roche Patent Rights and Roche Know-How, including Roche’s interest in the Joint
Patent Rights and Joint Know-How,

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solely to the extent necessary to allow BPM, its Affiliates or licensees to
research, have researched, develop, have developed, use, have used, make, have
made, import, have imported, export and have exported (including all research,
development and manufacturing activities) Reversion Product(s) in the Field
anywhere in the world in order to market, have marketed, distribute, have
distributed, sell, have sold and offer for sale and have offered for sale
(including all commercialization activities) such Reversion Product(s) in the
Field in the terminated country(ies) (collectively, the “Reversion
License”).  Royalties would be payable by BPM to Roche on worldwide BPM Net
Sales depending upon the stage of development of the applicable Reversion
Product at the time of termination as set forth in the following table:

 

Stage of Development of the applicable Reversion Product on the effective date
of termination

Royalty payable on portion of BPM Net Sales up to and including […***…]

Royalty payable on portion of BPM Net Sales greater than […***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

 

Payments would be made by BPM to Roche in a manner analogous to that set forth
in Section 12.9.1 and 12.9.3 (provided that BPM shall have no obligation to pay
royalties to Roche for Net Sales of Reversion Products for Program 2 or Program
4 in the BPM Territory), including adjustments in a manner analogous to those
set forth in Sections 12.9.4 - 12.9.6 and 12.9.8.  Notwithstanding anything to
the contrary in this Section 21.3.1(f), Roche will have the right to terminate
the licenses granted to BPM in this Section 21.3.1(f) with respect to a
Reversion Product in full upon one hundred and twenty (120) days’ prior written
notice to BPM in the event of any material breach by BPM of its payment
obligations under this Section 21.3.1(f).  Notwithstanding the foregoing, any
such termination under this Section 21.3.1(f) will not be effective if such
breach has been cured within one hundred and twenty (120) days after written
notice thereof is given by Roche to BPM specifying the nature of the alleged
breach.

 

For clarity, the Parties acknowledge and agree that with respect to any the
Roche Patent Rights or Roche Know-How that is in-licensed by the Roche Group,
BPM will be responsible for any payments due to a Third Party with respect
thereto and BPM’s rights will be subject to the terms of the applicable Third
Party agreement.  At BPM’s written request, the Parties will enter into
commercially reasonable prosecution and enforcement and defense terms for the
Roche Patent Rights or Roche Know-How with respect to the Reversion Products,
and BPM will bear the costs of such prosecution, enforcement and defense
activities to the extent related to such Reversion Products. 

 

(g)        Roche will promptly transfer and assign to BPM all of Roche’s and its
Affiliates’ rights, title and interests in and to Roche’s Global Trademark(s)
solely used to identify the Reversion Products (but not any house marks, or
logos or any trademark of Roche or its Affiliates, containing the word “Roche”
or any such Affiliate) owned by Roche and used for the Reversion Products in the
Field.

 

(h)       If BPM so requests, and to the extent permitted under Roche’s
obligations to Third Parties on the effective date of termination, Roche will
transfer to BPM any Third Party agreements relating solely to the Exploitation
of the Reversion Products to which Roche

 

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is a party, subject to any required consents of such Third Party, which Roche
will use Commercially Reasonable Efforts to obtain promptly.

 

(i)        Roche will execute all documents and take all such further actions as
may be reasonably requested by BPM in order to give effect to the foregoing
clauses.

 

21.3.2  Termination by Roche for Breach by BPM or BPM Insolvency

Upon material breach by BPM or BPM’s Insolvency, Roche shall have the right to
terminate this Agreement in accordance with Section 21.2.1 or Section 21.2.2, as
applicable.

 

If Roche exercises its aforementioned right to terminate, then, on the effective
date of termination, (a) all rights and licenses granted to either Party under
this Agreement with respect to such Collaboration Target(s) or Program(s) with
terminate; (b) except as set forth in this Section 21.3.2, the rights and
obligations of the Parties hereunder shall terminate with respect to such
Terminated Target(s) as of the effective date of such termination; and (c) BPM
will execute all documents and take all such further actions as may be
reasonably requested by Roche in order to give effect to the foregoing clauses.

 

In the event of a material breach of this Agreement by BPM with respect to
Program 2 or Program 4 (as applicable), then, following the expiration of all
applicable notice and cure periods, and, if any dispute is initiated under
Section 23.3.1 before the expiration of the applicable cure period with respect
to the basis for the asserted basis of such termination, the confirmation by the
arbitrators of the facts claimed by Roche to be the basis for termination under
Section 21.2.1, Roche may elect, at its sole option, upon written notice to BPM
that, in lieu of exercising its right to terminate this Agreement pursuant to
Section 21.2.1 for Program 2 or Program 4 (as applicable), the licenses and
other rights granted by BPM to Roche under this Agreement with respect to such
Program remain in effect in accordance with their respective terms; provided,
however, that (a) the Roche Territory for such Program shall mean all countries
of the world, and Roche will be deemed granted all rights and obligations
relating thereto, (b) Roche shall have the right to offset the full amount of
any losses incurred by Roche as a result of such material breach by BPM with
respect to such Program  from any future payments relating to such Program due
and payable to BPM under this Agreement, and (c) the Development Cost Share for
such Program shall be 100% paid by Roche. 

 

21.3.3  Sublicenses

Irrespective of anything to the contrary in this Agreement, any existing,
sublicense granted by Roche to Third Parties under Section 2.1.2 or Section
2.1.3 of this Agreement (and any further sublicenses thereunder) shall, upon the
written request of Roche, remain in full force and effect, provided that (i)
such Third Party Sublicensee is not then in breach of its sublicense agreement
(and, in the case of termination by BPM for breach by Roche, that such Third
Party Sublicensee and any further sublicensees did not cause the breach that
gave rise to the termination by BPM); and (ii) and such Third Party Sublicensee
agrees to be bound to BPM under the terms and conditions of such sublicense
agreement. 

 

21.3.4  Other Obligations

 

21.3.4.1  Obligations Related to Ongoing Activities

If BPM does not provide a timely Continuation Election Notice, then each Party
(a) shall have the right to cancel all ongoing obligations and (b) shall
complete all non-cancellable obligations.

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If BPM provides such timely Continuation Election Notice, then from the date of
notice of termination until the effective date of termination, Roche shall
continue all activities contemplated by this Agreement, including preparatory
activities, ongoing as of the date of notice of termination. However, Roche
shall not be obliged to initiate any new activities not ongoing at the date of
notice of termination.

 

After the effective date of termination, neither Roche nor BPM shall have an
obligation to perform and/or complete any activities except as expressly stated
herein.

 

Notwithstanding the foregoing, in case of termination by BPM under
Section 21.2.1, Section 21.2.2 or Section 21.2.5 or by Roche under
Section 21.2.4, upon the request of BPM, Roche shall complete any Clinical
Studies related to the Licensed Product(s) that are being conducted under its
IND(s) for the Licensed Product(s) and are ongoing as of the effective date of
termination; provided, however, that

 

(i)     both BPM and Roche in their reasonable judgment have concluded that
completing any such Clinical Studies does not present an unreasonable risk to
patient safety; and

 

(ii)    Roche shall have no obligation to recruit or enroll any additional
patients after the date of termination;

 

(iii)   Roche shall transfer all Clinical Studies to BPM as soon as practicable,
and

 

(iv)   BPM agrees to reimburse Roche for all of its Development Costs that arise
after the effective date of termination in completing such Clinical Studies.

 

In the event that BPM does not elect to have Roche complete any Clinical Studies
related to the Licensed Product(s) that are being conducted under Roche’s IND(s)
for the Licensed Product(s) and are ongoing as of the effective date of
termination, then Roche will wind down such ongoing Clinical Studies, subject to
the Parties’ sharing any remaining Phase I Development Costs or Development
Costs for such Clinical Studies. 

 

21.3.4.2  Obligations Related to Manufacturing

a)  Clinical Supplies

In the case of termination by BPM according to Section 21.2.1, Section 21.2.2 or
Section 21.2.5 or by Roche under Section 21.2.4, if BPM elects to develop the
Reversion Products, Roche shall transfer all existing and available clinical
material to BPM at […***…] and upon the request of BPM. After such transfer is
effectuated, (i) Roche shall have no obligation to perform any additional
activities concerning the clinical supplies (e.g., retesting, analyses) and (ii)
BPM shall assume all liability for the use of such material.  At BPM’s request,
immediately after notice of termination, Roche will cooperate to accelerate the
transfer of the technology necessary to manufacture the clinical material to BPM
or its designee as soon as practicable, and Roche will leverage its
relationships with CROs to enable BPM to assume responsibility for
manufacturing. 

 

b)  Commercial Supplies

In the case of termination by BPM according to Section 21.2.1 or Section 21.2.2
or by Roche under Section 21.2.4, if a Reversion Product is marketed in any
country of Territory on the date of the notice of termination of this Agreement,
upon the request of BPM, Roche shall manufacture and supply such Reversion
Product to BPM for a period that shall not exceed […***…] from the effective
date of the termination of this Agreement at […***…]. BPM shall use Commercially
Reasonable Efforts to take over the manufacturing as soon as reasonably possible
after the effective date of termination.

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21.3.4.3  Ancillary Agreements

Unless otherwise agreed by the Parties, the termination of this Agreement shall
cause the automatic termination of all ancillary agreements related hereto,
including but not limited to the Manufacturing and Supply Agreement(s), if any,
and the Pharmacovigilance Agreement.

 

21.3.4.4  Limitations on Grant-Backs; Transfer Expenses

For purposes of clarity, irrespective of anything to the contrary in this
Agreement:

 

(a)  All assignments, transfers and licenses from Roche to BPM or other
obligations of Roche under Section 21.3 are solely with respect to Reversion
Product(s) that are not Combination Product(s) or Companion Diagnostic(s). Such
transfers, licenses and obligations do not extend to other therapeutically
active ingredients or products, even if physically mixed, combined or packaged
together with a Reversion Product, and even if a Reversion Product is intended
(according to the investigation plan, proposed labeling or actual labeling, as
applicable) for use with such other therapeutically active ingredients or
products.

 

(b)  In connection with research studies or Clinical Studies, Roche may have
collected human samples and related clinical information for additional limited
research and development programs (“Samples”). Legal and contractual
restrictions may apply to such Samples, in particular as Samples may qualify as
personal identifiable information. BPM acknowledges and accepts that
notwithstanding anything herein, at the request of BPM and subject to BPM
compensating Roche for all costs incurred by Roche in transferring such Samples,
Roche shall use Commercially Reasonable Efforts to transfer any such Samples to
BPM to the extent permitted under Applicable Law and consistent with Roche’s
business practices.

 

(c)  Nothing in this Agreement shall be construed as granting BPM any license
under the Excluded Patent Rights.

 

(d)  Within thirty (30) days after the date of a Continuation Election Notice,
BPM shall make a payment to Roche of […***…] as consideration for the transfer
activities performed by Roche under Sections 21.3.1 and 21.3.4 (“Roche Transfer
Activities”), which amount shall be creditable against any royalties payable by
BPM to Roche pursuant to Section 21.3.1(f).  Roche shall be under no obligation
to provide Roche Transfer Activities prior to receipt of the Minimum Transfer
Payment.

 

21.3.4.5  Royalty and Payment Obligations

Termination of this Agreement by a Party, for any reason, shall not release the
other Party from any obligation to pay royalties or make any other payments that
are payable prior to the effective date of termination. However, termination of
this Agreement by a Party, for any reason, will release a Selling Party from any
obligation to pay royalties or make any payments to the Non-Selling Party that
would otherwise become payable on or after the effective date of termination.

 

21.4  Survival

Last sentence of Section 2.1.4 (Licenses), last paragraph of Section 3.1.3
(Option Right), Section 16.1 (Ownership of Inventions), Section 16.2 (Patent
Rights Owned Jointly), Section 16.3 (German Statute on Employee’s Inventions),
Section 16.9 (CREATE Act), Section 16.12 (Common Interest Disclosures), Section
17.10 (No Other Representations), Section 21.3 (Consequences of Termination),
and Section 21.4 (Survival); Article 1 (Definitions, but only to the extent
necessary to interpret the Agreement), Article 12 (Payment, but only with
respect to any payments accrued thereunder prior to expiration or termination),
Article 13 (Accounting and

 

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Reporting, but only with respect to any payments accrued thereunder prior to
expiration or termination), Article 14 (Taxes), Article 15 (Auditing),
Article 18 (Indemnification), Article 19 (Liability), Article 20 (Obligation Not
to Disclose Confidential Information), Article 22 (Bankruptcy), and Article 23
(Miscellaneous) shall survive any expiration or termination of this Agreement
for any reason.  Expiration or termination of this Agreement for any reason will
not relieve the Parties of any liability or obligation which accrued hereunder
prior to the effective date of such termination or expiration, nor preclude
either 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.  For the
avoidance of doubt, termination of this Agreement will not affect any
Pharmacovigilance Agreement, which will continue to survive so long as any
Licensed Products thereunder are being commercialized. 

 

22.  Bankruptcy

All licenses (and to the extent applicable rights) granted under or pursuant to
this Agreement by a Party to the other are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of Title 11, US Code (the “Bankruptcy Code”)
licenses of rights to “intellectual property” as defined under Section 101(35A)
of the Bankruptcy Code. Unless Roche elects to terminate this Agreement, the
Parties agree that the Parties and their respective Sublicensees, as a licensees
or sublicensees of such rights under this Agreement, shall retain and may fully
exercise all of their rights and elections under the Bankruptcy Code (or any
foreign counterpart thereto), subject to the continued performance of its
obligations under this Agreement.

 

23.  Miscellaneous

 

23.1  Governing Law

This Agreement shall be governed by and construed in accordance with the laws of
the State of New York, without reference to its conflict of laws principles, and
shall not be governed by the United Nations Convention of International
Contracts on the Sale of Goods (the Vienna Convention).

 

23.2  Disputes

Unless otherwise set forth in this Agreement, in the event of any dispute in
connection with this Agreement, such dispute shall be referred to the respective
executive officers of the Parties designated below or their designees, for good
faith negotiations attempting to resolve the dispute. The designated executive
officers are as follows:

 

For BPM:

Chief Executive Officer

For Roche:

Head of Roche Partnering

 

23.3  Arbitration

Except as otherwise expressly set forth in this Agreement (including with
respect to any matters that are determined by Expedited Arbitration, Expert or
Expert Committee), should the Parties fail to agree within two (2) months after
such dispute has first arisen, it shall be finally settled by arbitration in
accordance with the Rules of American Arbitration Association (“AAA”) as in
force at the time when initiating the arbitration. The tribunal shall consist of
three (3) arbitrators. The place of arbitration shall be New York City, New
York, US and the arbitration will be governed by the Laws of the State of New
York. The language to be used shall be English.  Documents submitted in the
arbitration (the originals of which are not in English) shall be submitted
together with an English translation.

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23.3.1  Arbitrators

Each Party shall nominate one arbitrator who are retired judges or attorneys
with at least ten (10) years of relevant experience in the pharmaceutical or
biotechnology industry, each of whom will be impartial and independent. Should
the claimant fail to appoint an arbitrator in the request for arbitration within
thirty (30) days of being requested to do so, or if the respondent should fail
to appoint an arbitrator in its answer to the request for arbitration within
thirty (30) days of being requested to do so, the other Party shall request the
AAA to make such appointment.

 

The arbitrators nominated by the Parties shall, within thirty (30) days from the
appointment of the arbitrator nominated in the answer to the request for
arbitration, and after consultation with the Parties, agree and appoint a third
arbitrator, who will act as a chairman of the three arbitrator committee (the
“Arbitral Tribunal”). Should such procedure not result in an appointment within
the thirty (30) day time limit, either Party shall be free to request the AAA to
appoint the third arbitrator.

 

Where there is more than one (1) claimant and/or more than one (1) respondent,
the multiple claimants or respondents shall jointly appoint one (1) arbitrator.

 

If any Party-appointed arbitrator or the third arbitrator resigns or ceases to
be able to act, a replacement shall be appointed in accordance with the
arrangements provided for in this clause.

 

23.3.2  Decisions; Timing of Decisions

The arbitrators shall render a written opinion setting forth findings of fact
and conclusions of law with the reason therefor stated, within no later than six
(6) months from the date on which the arbitrators were appointed to the
dispute.  A transcript of the evidence adduced at the arbitration hearing shall
be made and, upon request, shall be made available to each Party.

 

The time periods set forth in the AAA Arbitration Rules shall be followed;
provided however that the arbitrators may modify such time periods as reasonably
necessary to render a written opinion in accordance with this Section 23.3.2.

 

The Arbitrator is empowered to award any remedy allowed by law, including money
damages, prejudgment interest and attorneys’ fees, and to grant final, complete,
interim, or interlocutory relief, including injunctive relief.

 

This arbitration agreement does not preclude either Party seeking conservatory
or interim measures from any court of competent jurisdiction including, without
limitation, the courts having jurisdiction by reason of either Party's domicile.
Conservatory or interim measures sought by either Party in any one or more
jurisdictions shall not preclude the Arbitral Tribunal granting conservatory or
interim measures. Conservatory or interim measures sought by either Party before
the Arbitral Tribunal shall not preclude any court of competent jurisdiction
granting conservatory or interim measures.

 

In the event that any issue shall arise which is not clearly provided for in
this Section 23.3, the matter shall be resolved in accordance with the AAA
Arbitration Rules.

 

Any arbitration proceeding hereunder shall be confidential and the arbitrators
shall issue appropriate protective orders to safeguard each Party’s Confidential
Information.  Except as required by Applicable Law or in a proceeding to enforce
the results of the arbitration, neither

 

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Party shall make (or instruct the arbitrators to make) any public announcement
with respect to the proceedings or decision of the arbitrators without prior
written consent of the other Party.  The existence of any dispute submitted to
arbitration, and the award, shall be kept in confidence by the Parties and the
arbitrators, except as required in connection with the enforcement of such award
or as otherwise required by Applicable Law.

 

Notwithstanding anything to the contrary in this Agreement, any and all issues
regarding the scope, construction, validity and/or enforceability of any Patent
Rights shall be determined in a court of competent jurisdiction under the local
patent laws of the jurisdictions having issued the Patent Rights in question.

 

Notwithstanding anything to the contrary in this Agreement, any and all issues
regarding a breach or alleged breach of a Party’s obligations under Article 20
(Obligation Not to Disclose Confidential Information) shall be determined in a
court of competent jurisdiction under the laws of the State of New York, with
express exclusion of its conflict of laws principles.

 

Fees, costs and expenses of arbitration are to be divided by the Parties in the
following manner: BPM will pay for the arbitrator it chooses, Roche will pay for
the arbitrator it chooses, and the Parties will share payment for the third
arbitrator.

 

23.3.3  Expedited Arbitration

If a Party exercises its rights under this Agreement to refer a dispute to
expedited arbitration (an “Expedited Dispute”), then the Parties will follow the
expedited dispute resolution process in this Section 23.3.3 (and not the dispute
resolution process at the beginning of this Section 23.3 of this Agreement)
(“Expedited Arbitration”).  The Parties agree and acknowledge that any good
faith dispute under Expedited Arbitration will not be deemed to be a material
breach of this Agreement.

 

The Expedited Dispute will be submitted to fast-track, binding arbitration in
accordance with the following:

 

(a)     Arbitration will be conducted in New York, New York under the rules of
the AAA for the resolution of commercial disputes in the most expedited manner
permitted by such rules.  The arbitration will be heard and determined by three
(3) arbitrators, each of whom will be impartial and independent.  Each Party
will appoint one (1) arbitrator and the third (3rd) arbitrator will be selected
by the two (2) Party-appointed arbitrators, or, failing agreement regard the
selection of such third (3rd) arbitrator within thirty (30) days following
appointment of the second arbitrator, the third (3rd) arbitrator will be
selected by the AAA.  Each arbitrator will be a professional in business or
licensing experienced in the valuation of biopharmaceutical products with at
least ten (10) years of experience in the pharmaceutical and life sciences
industries, including the conduct of research, development and commercialization
collaborations.  The cost of the arbitration will be borne equally by the
Parties.  Except in a proceeding to enforce the results of the arbitration or as
otherwise required by Applicable Laws, neither Roche nor BPM nor any arbitrator
may disclose the existence, content or results of any arbitration hereunder
without the prior written agreement of Roche and BPM.

 

(b)     Within thirty (30) days after such matter is referred to arbitration,
each Party will provide the arbitrators with a proposal and written memorandum
in support of its position regarding the Expedited Dispute, as well as any
documentary evidence it wishes to provide in support thereof

 

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(each a “Brief”) and the arbitrators will provide each Party’s Brief to the
other Party after it receives it from both Parties. 

 

(c)     Within thirty (30) days after a Party submits its Brief, the other Party
will have the right to respond thereto.  The response and any material in
support thereof will be provided to the arbitrators and the other Party.

 

(d)     The arbitrators will have the right to meet with the Parties as
necessary to inform the arbitrators’ determination and to perform independent
research and analysis.  Within thirty (30) days of the receipt by the
arbitrators of both Parties’ responses (or expiration of the thirty (30) day
period if any Party fails to submit a response), the arbitrators will deliver
their decision regarding the Expedited Dispute in writing; provided that the
arbitrators will select one of the resolutions proposed by the
Parties.  Notwithstanding anything herein to the contrary, the Parties shall
have the right to terminate such Expedited Arbitration in accordance with
Section 2.2 or upon mutual agreement prior to delivery of the arbitrators’
decision.

 

23.4  Assignment

Except as provided in this Section 23.4, neither Party shall have the right to
assign or otherwise transfer this Agreement or any part thereof, or its rights
or obligations under this Agreement absent the prior written consent of the
other Party. Notwithstanding the foregoing, either Party may, without the other
Party’s written consent, assign this Agreement and its rights and obligations
hereunder in whole or in part to any of its Affiliates in whole or to a party
that acquires, by or otherwise in the context of a merger, acquisition, sale,
reorganization, consolidation, Change of Control or other transaction involving
all or substantially all of the assets of the business of the assigning Party to
which the subject matter of this Agreement relates. Any permitted assignment
shall be binding on the successors of the assigning Party. Any purported
assignment in violation of this Section 23.4 will be void and of no force and
effect.

 

23.5  Debarment

Each Party represents and warrants that it has never been debarred under 21
U.S.C. §335a, disqualified under 21 C.F.R. §312.70 or §812.119, sanctioned by a
Federal Health Care Program (as defined in 42 U.S.C §1320 a-7b(f)), including
without limitation the federal Medicare or a state Medicaid program, or
debarred, suspended, excluded or otherwise declared ineligible from any other
similar Federal or state agency or program. In the event a Party receives notice
of debarment, suspension, sanction, exclusion, ineligibility or disqualification
under the above-referenced statutes, such Party shall immediately notify the
other Party in writing and such other Party shall have the right, but not the
obligation, to terminate this Agreement, effective, at such other Party’s
option, immediately or at a specified future date.

 

23.6  Independent Contractor

No employee or representative of either Party shall have any authority to bind
or obligate the other Party to this Agreement for any sum or in any manner
whatsoever or to create or impose any contractual or other liability on the
other Party without said Party's prior written approval. For all purposes, and
notwithstanding any other provision of this Agreement to the contrary, each
Party’s legal relationship to the other Party under this Agreement shall be that
of independent contractor, and nothing contained in this Agreement shall be
deemed or construed to create a partnership, joint venture, employment,
franchise, agency or fiduciary relationship between the Parties.

 

23.7  Unenforceable Provisions and Severability

If any of the provisions of this Agreement are held to be void or unenforceable,
then such void or unenforceable provisions shall be replaced by valid and
enforceable provisions that will achieve

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as far as possible the economic business intentions of the Parties. However the
remaining provisions of this Agreement will remain in full force and effect,
provided that the material interests of the Parties are not affected, i.e. the
Parties would presumably have concluded this Agreement without the unenforceable
provisions.

 

23.8  Waiver

The failure by either Party to require strict performance and/or observance of
any obligation, term, provision or condition under this Agreement will neither
constitute a waiver thereof nor affect in any way the right of the respective
Party to require such performance and/or observance. The waiver by either Party
of a breach of any obligation, term, provision or condition hereunder shall not
constitute a waiver of any subsequent breach thereof or of any other obligation,
term, provision or condition.

 

23.9  Appendices

All Appendices to this Agreement shall form an integral part to this Agreement.

 

23.10  Entire Understanding

This Agreement, together with the Pharmacovigilance Agreement and any supply
agreement entered into the Parties in connection with this Agreement, contains
the entire understanding between the Parties hereto with respect to the within
subject matter and supersedes any and all prior agreements, understandings and
arrangements, whether written or oral, including, effective as of the Effective
Date, that Non-Disclosure Agreement between BPM and Roche, effective as of
February 9, 2015, as amended by First Amendment, dated May 1, 2015 (provided
that all information disclosed or exchanged under such agreement will be treated
as Confidential Information hereunder).

 

23.11  Amendments

No amendments of the terms and conditions of this Agreement, including the
Appendices attached hereto, shall be binding upon either Party hereto unless in
writing and signed by both Parties.

 

23.12  Invoices

All invoices that are required or permitted hereunder shall be in writing and
sent by BPM to Roche at the following address or such other address as Roche may
later provide:

 

F. Hoffmann-La Roche Ltd

Kreditorenbuchhaltung

Grenzacherstrasse 124

4070 Basel

Switzerland

 

 

23.13  Notice

All notices that are required or permitted hereunder shall be in writing and
sufficient if delivered personally, sent by facsimile (and promptly confirmed by
personal delivery, registered or certified mail or overnight courier), sent by
nationally recognized overnight courier or sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:

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if to BPM, to:

 

 

Blueprint Medicines Corporation

38 Sidney Street, Suite 200

Cambridge, Massachusetts 02139

U.S.A.

Attn:  Chief Executive Officer

Facsimile No.: + 1 617 374-7588

 

 

and:

Attn: Legal Department

Facsimile No.:  + 1 617 374-7588

 

if to Roche, to:

F. Hoffmann-La Roche Ltd

Grenzacherstrasse 124

4070 Basel

Switzerland

Attn:  Legal Department

Facsimile No.:  +41 61 688 13 96

 

and:

Hoffmann-La Roche Inc.

150 Clove Road

Suite 8

Little Falls, New Jersey 07424

U.S.A.

Attn.  Corporate Secretary

Facsimile No.: +1 973 890-8433

 

or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith. Any such notice
will be deemed to have been given: (a) when delivered if personally delivered on
a Business Day (or if delivered or sent on a non-Business Day, then on the next
Business Day); (b) on the Business Day of receipt if sent by overnight courier
or facsimile; or (c) on the Business Day of receipt if sent by mail.

 

23.14  Counterparts

This Agreement may be executed in two (2) or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.  Counterparts may be delivered via facsimile, electronic
mail (including pdf or other electronic signature) or other transmission method
and any counterpart so delivered shall be deemed to have been duly and validly
delivered and be valid and effective for all purposes.

 

23.15  Performance by Affiliates

Each Party acknowledges and accepts that the other Party may exercise its rights
and perform its obligations (including granting or continuing licenses and other
rights) under this Agreement either directly or through one or more of its
Affiliates.  A Party’s Affiliates will have the benefit of all rights (including
all licenses and other rights) of such Party under this Agreement, but not be
subject to such Party’s obligation, unless expressly provided herein, or in the
case of a permitted assignment, in accordance with Section 23.4.  Accordingly,
in this Agreement “Roche” will be interpreted to mean “Roche or its Affiliates”
and “BPM” will be interpreted to mean “BPM or its Affiliates” where necessary to
give each Party’s Affiliates the benefit of the rights provided to such Party in
this Agreement and the ability to perform its obligations (including granting or
continuing

 

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licenses and other rights) under this Agreement; provided, however, that in any
event each Party will remain responsible for the acts and omissions, including
financial liabilities, of its Affiliates.

 

23.16  Force Majeure

Neither Party will be held liable to the other Party nor be deemed to have
defaulted under or breached this Agreement for failure or delay in performing
any obligation under this Agreement to the extent that such failure or delay is
caused by or results from causes beyond the reasonable control of the affected
Party, potentially including embargoes, war, acts of war (whether war be
declared or not), insurrections, riots, civil commotions, strikes, lockouts or
other labor disturbances, fire, earthquakes, floods, or other acts of God. The
affected Party will notify the other Party of such force majeure circumstances
as soon as reasonably practical, and will promptly undertake all reasonable
efforts necessary to cure such force majeure circumstances and resume
performance of its obligations hereunder.

 

23.17  Compliance with Export Regulations

Neither Party will export any technology licensed to it by the other Party under
this Agreement except in compliance with U.S. export Laws and regulations.

 

23.18  Interpretation

Except where the context expressly requires otherwise, (a) the use of any gender
herein will be deemed to encompass references to either or both genders, and the
use of the singular will be deemed to include the plural (and vice versa); (b)
the words “include”, “includes” and “including” will be deemed to be followed by
the phrase “without limitation” and will not be interpreted to limit the
provision to which it relates; (c) the word “shall” will be construed to have
the same meaning and effect as the word “will”; (d) any definition of or
reference to any agreement, instrument or other document herein will be
construed as referring to such agreement, instrument or other document as from
time to time amended, supplemented or otherwise modified (subject to any
restrictions on such amendments, supplements or modifications set forth herein);
(e) any reference herein to any Person will be construed to include the Person’s
successors and assigns; (f) the words “herein”, “hereof” and “hereunder”, and
words of similar import, will be construed to refer to this Agreement in each of
their entirety, as the context requires, and not to any particular provision
hereof; (g) all references herein to Articles, Sections, Exhibits or Schedules
will be construed to refer to Articles, Sections, Exhibits or Schedules of this
Agreement, and references to this Agreement include all Exhibits and Schedules
hereto; (h) the word “notice” means notice in writing (whether or not
specifically stated) and will include notices, consents, approvals and other
written communications contemplated under this Agreement; (i) provisions that
require that a Party, the Parties or any committee hereunder “agree,” “consent”
or “approve” or the like will require that such agreement, consent or approval
be specific and in writing, whether by written agreement, letter, approved
minutes or otherwise (but excluding e-mail and instant messaging); (j)
references to any specific law, rule or regulation, or article, section or other
division thereof, will be deemed to include the then-current amendments thereto
or any replacement or successor law, rule or regulation thereof; and (k) the
term “or” will be interpreted in the inclusive sense commonly associated with
the term “and/or”.

 

23.19  Waiver of Rule of Construction

Each Party has had the opportunity to consult with counsel in connection with
the review, drafting and negotiation of this Agreement. Accordingly, the rule of
construction that any ambiguity in this Agreement will be construed against the
drafting Party will not apply.

 

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23.20  Headings

The captions to the Sections hereof are not a part of this Agreement, but are
merely for convenience to assist in locating and reading the several Sections
hereof.

 

[Signature Page Follows]

 

 

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IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the
Effective Date.

 

 

Blueprint Medicines Corporation

 

 

 

 

 

 

 

 

 

 

/s/ Jeffrey Albers

 

 

Name:

Jeffrey Albers

 

 

Title:

Chief Executive Officer

 

 

 

 

 

 

 

 

F. Hoffmann-La Roche Ltd

 

 

 

 

 

 

 

 

 

 

 

/s/ Vikas Kabra

 

/s/ Stefan Arnold

Name:

Vikas Kabra

 

Name:

Stefan Arnold

Title:

Head of Transaction Excellence

 

Title:

Head Legal Pharma

 

 

 

 

 

 

 

 

 

Hoffmann-La Roche Inc.

 

 

 

 

 

 

 

 

 

 

 

/s/ John P. Parise

 

 

Name:

John P. Parise

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

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

 

 

Appendix 1.9

 

 

 

BPM Patent Rights

 

 

 

[…***…]

 

 

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

 

 

Appendix 1.18

 

 

 

CCS Criteria

 

 

 

[…***…]

 

 

Property

Minimum Acceptable

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

 

 

 

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Appendix 1.23

 

 

 

CLS Criteria

 

 

 

 

Property

Criteria/Purpose

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

 

 

 

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Appendix 1.38

 

 

 

Approved CROs

 

 

 

 

 

[…***…]

 

 

 

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

 

 

 

 

Appendix 1.44

 

 

 

Excluded Targets

 

 

 

 

 

[…***…]

 

 

 

 

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

 

 

Appendix 1.72

 

 

 

Lead Series Identified Criteria

 

 

 

 

Properties

Criteria/Purpose

[…***…]

 

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…] 

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

[…***…]

 

 

 

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Appendix 1.81

 

 

 

Option Data Package

 

 

 

Categories of information:

 

[…***…]

 

 

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

 

 

Appendix 1.114

 

 

 

Excluded Patent Rights

 

 

[…***…], which means (a) U.S. Patent No. […***…], issued […***…], and any and
all patents issuing from divisionals, continuations, or continuations-in part of
any application from which U.S. Patent No. […***…] claims priority, as well as
reissues, reexaminations, extensions, and foreign patent counterparts, including
inventors certificates, of any of the foregoing, and including any related
supplemental protection certificates; and (b) U.S. Patent No. […***…], issued
[…***…], and any and all patents issuing from divisionals, continuations, or
continuations-in-part of any application from which U.S. Patent No. […***…]
claims priority, as well as reissues, reexaminations, extensions, and foreign
patent counterparts, including inventors certificates, of any of the foregoing,
and including any related supplemental protection certificates.

 

[…***…], which means any of the U.S. patents listed below and any and all
patents issuing from divisionals, continuations or continuations-in-part, and
any reissues, reexaminations or extensions, of these patents or of any
application from which these U.S. patents claim priority, as well as foreign
counterparts, including inventors certificates, of the foregoing, and including
any related supplemental protection certificates:

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

[…***…], which means any of the U.S. patents/patent application listed below and
any and all patents issuing from divisionals, continuations or
continuations-in-part, and any reissues, reexaminations or extensions, of these
patents or of any application from which these U.S. patents claim priority, as
well as foreign counterparts, including inventors certificates, of the
foregoing, and including any related supplemental protection certificates:

 

 

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

 

 

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

U.S. Patent No. […***…]

 

[…***…], which means the following U.S. patent and any and all divisionals,
continuations, continuations-in-part of any application from which these U.S
patents claim priority, including reissues, reexaminations or extensions of
these patents and foreign counterparts and supplementary protection certificates
of the foregoing:

 

U.S. Patent No. […***…]

 

 

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

 

Appendix 4.1.5

 

 

 

Roche Senior Management

 

 

 

 

 

Global Head of Therapeutic Modalities

 

 

 

Global Head of Medicinal Chemistry

 

 

 

Global Head of Molecular Targeted Therapies in Oncology Discovery

 

 

 

Global Head of Oncology Discovery (Oncology DTA)

 

 

 

 

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

 

 

Appendix 20.3

 

 

 

Form of Press Release

 

 

 

 

 

[Attached]

 

 

 

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

 

Blueprint Medicines Announces Worldwide Collaboration to Accelerate and Expand
its Development of Novel Medicines in the Field of Cancer Immunotherapy

 

— Collaboration Combines Blueprint Medicines’ Proprietary Drug Discovery
Platform and Immunokinase Expertise with Roche’s Cancer Immunotherapy Expertise
—

 

— Blueprint Medicines to Receive $45 Million Upfront Payment and is Eligible to
Receive Additional Contingent Fees and Milestone Payments—

 

— Blueprint Medicines to Host Conference Call Today at 8:00 A.M. ET —

 

CAMBRIDGE, Mass., March 15, 2016 – Blueprint Medicines Corporation (NASDAQ:
BPMC), a leader in discovering and developing highly selective kinase medicines
for patients with genomically defined diseases, today announced that it has
entered into a worldwide collaboration and exclusive license agreement with F.
Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc. (collectively, Roche) for the
discovery, development and commercialization of up to five small molecule
therapeutics targeting kinases believed to be important in cancer immunotherapy.

 

Under the terms of the agreement, Blueprint Medicines will receive an upfront
cash payment of $45 million and will be eligible to receive up to an additional
approximately $965 million in contingent option fees and milestone payments
related to specified research, preclinical, clinical, regulatory and sales-based
milestones across all five potential programs. Of the total contingent payments,
up to approximately $215 million are for option fees and milestone payments for
research, preclinical and clinical development events prior to licensing across
all five potential programs.  In addition, the agreement provides for specified
royalties and cost sharing, which are described in more detail below.

 

Immunokinases are intracellular targets known to regulate numerous aspects of
immune response and represent an important opportunity for potentially
innovative approaches to enhance the immune system’s ability to recognize and
eradicate tumor cells. To date, cancer immunotherapies have demonstrated
important clinical benefits. However, most cancer immunotherapies have focused
on antibodies or combinations with existing approved therapies and have not yet
targeted immunokinases with small molecules.  This collaboration seeks to
develop new mechanisms of modulating the tumor immune response by targeting
immunokinases with the goal of enhancing response rates and broadening the
utility of using cancer immunotherapies to treat additional cancer types.

 

“We believe Blueprint Medicines’ proprietary drug discovery platform and
expertise in immunokinases, combined with our proven ability to move quickly
through drug discovery, is a perfect complement to Roche’s expertise with cancer
immunotherapy biology and in developing and commercializing innovative
therapies,” said Jeff Albers, Chief Executive Officer of Blueprint Medicines.
“Under this collaboration, Blueprint Medicines will lead preclinical research
and development through Phase 1 proof of concept for all five programs and
retain U.S. commercial rights for two programs. We believe this highly
collaborative relationship will enable us to accelerate our efforts in the
emerging field of cancer immunotherapy and to continue building a leading
biotechnology company.”

 

The collaboration provides for the worldwide development and commercialization
of immunokinases in the field of cancer immunotherapy for up to five small
molecule drug candidates as single products or possibly in combination with
Roche’s portfolio of therapeutics. Roche’s rights are structured as an option,
triggered upon achievement of Phase I proof-of-concept, for an exclusive license
to each drug candidate developed under the collaboration. Blueprint Medicines
will be primarily responsible for preclinical research and conduct of clinical
development for each

 

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

 

program prior to any exercise of Roche’s option for such program. If Roche
exercises an option for a program, Roche will be responsible for subsequent
global development for that program through registrational clinical trials. For
up to three of the five programs, if Roche exercises its option, Roche will
receive worldwide commercialization rights for the licensed product. For up to
two of the five programs, if Roche exercises its option, Blueprint Medicines
will retain commercialization rights in the United States for the licensed
product, and Roche will receive commercialization rights outside of the United
States for such licensed product. Blueprint Medicines will also retain worldwide
rights to any drug candidates for which Roche elects not to exercise the
applicable option.

 

For any licensed product for which Roche retains worldwide commercialization
rights, Blueprint Medicines will be eligible to receive tiered royalties ranging
from low double-digits to high-teens on future net sales of the licensed
product. For any licensed product for which Blueprint Medicines retains
commercialization rights in the United States, Blueprint Medicines and Roche
will be eligible to receive tiered royalties ranging from mid-single-digits to
low double-digits on future net sales in the other party’s respective
territories in which it commercializes the licensed product. Blueprint Medicines
and Roche will share the costs of Phase 1 development for each collaboration
target. In addition, Roche will be responsible for post-Phase 1 development
costs for each licensed product for which it retains global commercialization
rights, and Blueprint Medicines and Roche will share post-Phase 1 development
costs for each licensed product for which Blueprint Medicines retains
commercialization rights in the United States.

 

Conference Call Information

 

Blueprint Medicines will host a conference call and live audio webcast for
investors at 8:00 A.M. ET today. To participate in the conference call, please
dial 877-516-3348 (domestic) or 281-973-6089 (international) and refer to
conference ID 63223687. A live webcast of the conference call will be available
by visiting the Investors section of Blueprint Medicines' website at
http://ir.blueprintmedicines.com. The archived webcast will be available on
Blueprint Medicines' website approximately 2 hours after the call and will be
available for 30 days following the call.

 

About Blueprint Medicines

 

Blueprint Medicines is developing a new generation of highly selective and
potent kinase medicines to improve the lives of patients with genomically
defined diseases. The Company's approach is rooted in a deep understanding of
the genetic blueprint of cancer and other diseases driven by the abnormal
activation of kinases. Blueprint Medicines is advancing three programs in
clinical development for subsets of patients with gastrointestinal stromal
tumors, hepatocellular carcinoma and systemic mastocytosis, as well as multiple
programs in research and preclinical development. For more information, please
visit www.blueprintmedicines.com.

 

Cautionary Note Regarding Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, as amended, including, without
limitation, statements regarding the collaboration and license agreement among
Blueprint Medicines and Roche, including anticipated payments, as well as the
future development, manufacture and commercialization of cancer immunotherapies
under the agreement; Blueprint Medicines’ and Roche’s ability to successfully
develop and commercialize cancer immunotherapies; and Blueprint Medicines'
strategy and business plans. The words “may,” “will,” “could,” “would,”
“should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,”
“predict,” “project,” “potential,”

 

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

 

“continue,” “target” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking statements contain
these identifying words. Any forward-looking statements in this press release
are based on management's current expectations and beliefs and are subject to a
number of risks, uncertainties and important factors that may cause actual
events or results to differ materially from those expressed or implied by any
forward-looking statements contained in this press release, including, without
limitation, risks and uncertainties related to the delay of any current or
planned clinical trials or the development of Blueprint Medicines' drug product
candidates, including BLU-285 and BLU-554; Blueprint Medicines' advancement of
multiple early-stage efforts; Blueprint Medicines' ability to successfully
demonstrate the efficacy and safety of its drug product candidates; the
preclinical and clinical results for Blueprint Medicines' drug product
candidates, which may not support further development of such drug product
candidates; and actions of regulatory agencies, which may affect the initiation,
timing and progress of clinical trials. These and other risks and uncertainties
are described in greater detail in the section entitled “Risk Factors” in
Blueprint Medicines' Annual Report on Form 10-K for the year ended December 31,
2015, as filed with the Securities and Exchange Commission (SEC) on March 11,
2016, and other filings that Blueprint Medicines may make with the SEC in the
future. Any forward-looking statements contained in this press release represent
Blueprint Medicines' views only as of the date hereof and should not be relied
upon as representing its views as of any subsequent date. Blueprint Medicines
explicitly disclaims any obligation to update any forward-looking statements.

 

Contact:

 

Investor Relations:

Kristin Williams

Blueprint Medicines Corporation

617-714-6674

KWilliams@blueprintmedicines.com

 

 

 

Media Relations:

Dan Quinn

Ten Bridge Communications, Inc.

781-475-7974

dan@tenbridgecommunications.com

 

 

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AMENDMENT TO COLLABORATION AND LICENSE AGREEMENT

 

This Amendment, effective April 15, 2016 (“Effective Date”), is by and between
F. Hoffmann-La Roche Ltd, with an office and place of business at
Grenzacherstrasse 124, 4070 Basel, Switzerland and Hoffmann-La Roche Inc., with
an office and place of business at 150 Clove Road, Suite 8, Little Falls, New
Jersey 07424, U.S.A. (together referred to as “Roche”) and Blueprint Medicines,
located at 38 Sidney Street, Cambridge, Massachusetts 02139 (“Blueprint”).

 

WHEREAS, Blueprint and Roche entered into a Collaboration and License Agreement
dated March 14, 2016 (“Agreement”);

 

NOW THEREFORE, Roche and Blueprint hereby agree as follows:

 

The 5th paragraph of Section 4.1.5 of the Agreement shall be deleted in its
entirety and replaced by the following:

 

Two chemistry experts at Roche (“Insulated Chemistry Experts”) shall be
designated in writing by Roche to review structures of Other Compounds and
Collaboration Compounds at the start of the collaboration and throughout the
Lead Nomination phase. The Insulated Chemistry Experts shall independently
handle the structural information and no structures provided by BPM to the
Insulated Chemistry Experts can be shared with any other individuals within
Roche other than members of senior management specified on Appendix 4.1.5 acting
in their decision making capacity. For clarity, these structures cannot be used
for any other purpose, including any research purpose.  Appropriate safeguards
will be established by Roche that are intended to prevent any inadvertent
disclosure or improper use of these structures and any structural information
related to such structures. From Lead Nomination onwards and throughout Lead
Optimization, the structures of Other Compounds and Collaboration Compounds in
the Lead Optimization phase shall be shared with the Roche project team members
(including Collaboration Compounds meeting Lead Series Identified Criteria, CLS
Criteria and CCS Criteria).

 

 

All other terms defined in the Agreement are to be interpreted as defined
therein, and all other terms of the Agreement are to remain in full force and
effect.

 

This Amendment may be executed in counterparts, each of which shall be deemed an
original, but both of which together shall constitute one and the same
instrument.

 

 

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

 

 

IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by
their duly authorized representatives.

 

 

Blueprint Medicines Corporation

 

 

 

 

 

 

 

/s/ Jeffrey Albers

 

 

Name:

Jeffrey Albers

 

 

Title:

Chief Executive Officer and President

 

 

 

 

 

 

 

 

F. Hoffmann-La Roche Ltd

 

 

 

 

 

 

 

 

/s/ Stefan Arnold

 

/s/ Barbara Lueckel

Name:

Stefan Arnold

 

Name:

Dr. Barbara Lueckel

Title:

Head Legal Pharma

 

Title:

Head of Research & Technologies Partnering

 

 

 

 

 

 

 

 

 

Hoffmann-La Roche Inc.

 

 

 

 

 

 

 

 

/s/ John P. Parise

 

 

Name:

John P. Parise

 

 

Title:

Authorized Signatory

 

 

 

 

 

 

 

 

 

 

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