Exhibit 10.28
*** Text Omitted and Filed Separately to the Commission
Confidential Treatment Requested
DEVELOPMENT AND LICENSE AGREEMENT
          This Development and License Agreement (“Agreement”) is entered into
effective as of May 15, 2000 (the “Effective Date”) between Alkermes Controlled
Therapeutics Inc. II (“ACTII”) and Amylin Pharmaceuticals, Inc. (“Amylin”).
RECITALS
          WHEREAS, ACTII owns or has licensed from third parties certain
intellectual property rights relating to injectable, sustained release
formulation systems, including the Medisorb® microsphere system (the “System,”
as defined below);
          WHEREAS, Amylin owns or has licensed from third parties certain
intellectual property rights relating to Field Products (as defined below);
          WHEREAS, ACTII and Amylin previously entered into a Feasibility Study
Agreement dated as of June 24, 1999 between ACTII and Amylin, as extended
pursuant to the Feasibility Study Extension Agreement dated February 15, 2000
(collectively, the “Feasibility Agreement”);
          WHEREAS, based upon the results to date of the study performed
pursuant to the Feasibility Agreement, the Parties have determined that the use
of ACTII’s System formulations for AC2993 shows sufficient promise to justify
further development pursuant to this Agreement; and,
          WHEREAS, ACTII and Amylin wish to enter into this Agreement, in
accordance with the terms set forth herein.
          NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, intending to be legally bound hereby,
agree as follows:
          1.    Definitions. The following terms shall have the following
meanings:
                       1.1      “AC2993” means synthetic exendin-4.
                       1.2      “ACTII Know-How” means any and all confidential
information, data and knowledge related to the subject matter of ACTII Patents
including, without limitation, any know-how, trade secrets, techniques,
strategies, methods, processes, practices, skills, experience, documents,
apparatus, devices, assays, screens, databases, database structures and data
analysis methods. ACTII Know-How does not include ACTII Patents.
                       1.3      “ACTII Patents” means all patents and patent
applications owned or controlled by ACTII relating to the System that are
necessary or useful in the manufacture or use of products in the Field,
including those patents and patent applications listed on Exhibit A hereto,
together with any patents resulting therefrom, including divisionals,
continuations, continuations-in-part, continued prosecution applications,
reissues, re-examinations, extensions of term, substitutions, revalidations,
renewals, supplemental protection certificates, registrations

 

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and confirmations thereof, and any other patent or patent application that
covers an Invention which is owned (either jointly or solely by ACTII) or
controlled by ACTII. ACTII Patents does not include ACTII Know How.
                       1.4      “Affiliate” means any entity controlled by,
controlling or under common control of any entity. For purposes of this
Section 1.4, “control” denotes the ownership of fifty per cent (50%) or more of
the voting stock or voting equity interests.
                       1.5      “Amylin Patents and Proprietary Information”
means (i) the patents and patent applications necessary or useful in the
development of a product in the Field under this Agreement, initially AC2993,
together with any patents resulting therefrom, including divisionals,
continuations, continuations-in-part, continued prosecution applications,
reissues, re-examinations, extensions of term, substitutions, revalidations,
renewals, supplemental protection certificates, registrations and confirmations
thereof, and (ii) the proprietary information, including data, results,
knowledge, materials, compositions, formulas, specifications, designs, devices,
methods, processes and techniques, whether patentable or not, developed,
conceived, discovered, synthesized or acquired by Amylin, and/or its Affiliates,
necessary or useful in the development of a product in the Field under this
Agreement, initially AC2993.
                       1.6      “Average 20-Day Trailing Price” means, on any
day, the average of the closing prices, as reported on the Nasdaq National
Market, for Amylin’s common stock for the 20 trading days immediately preceding
such day.
                       1.7      “Clinical Trial” means a human clinical trial
conducted in normal volunteers or patients and designed to evaluate safety,
efficacy or required dosage regimen of a Product.
                       1.8      “Co-Marketer” means any co-marketer,
co-detailer, marketing partner, distributor, wholesaler, consignee or other
person or entity acting under an arrangement that is the functional equivalent
of a license or sublicense, but excluding distribution, wholesaling and
consignment arrangements where the distributor, wholesaler or consignee is not
obligated, in addition to selling a Product, to undertake any significant
promotional or similar marketing efforts with respect to the Product.
                       1.9      “Commercially Reasonable Efforts” means a
Party’s efforts to develop, market, or distribute a Product, as applicable,
depending on such Product’s stage of development or commercialization, at a
level consistent with the efforts that are devoted (or would be devoted) by that
Party to other products of comparable commercial potential at a similar stage of
development or commercialization.
                       1.10      “Confidential Information”means information
relating to the subject matter of this Agreement, provided by the Disclosing
Party to the Receiving Party and identified as “Confidential”; provided,
however, that Confidential Information shall not include any such information
that:
                                      (a) was known to the Receiving Party at
the time of disclosure by the Disclosing Party (other than through receipt from
the Disclosing Party or its Affiliates), as can be established by written
documentation; or

 

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                                      (b) was generally available to the public
or was otherwise part of the public domain at the time of such disclosure or
became generally available to the public or otherwise part of the public domain
after such disclosure other than through any act or omission of the Receiving
Party in breach of this Agreement; or
                                      (c) became known to the Receiving Party
after disclosure by the Disclosing Party through a non-confidential disclosure
from a source that had a lawful right to disclose such information to others; or
                                      (d) was independently developed by the
Receiving Party where such independent development can be established by written
documentation.
                       1.11      “Disclosing Party” means a Party that discloses
its Confidential Information to the other Party.
                       1.12      “FDA” means the U.S. Food and Drug
Administration.
                       1.13      “Field” means System formulations of Field
Products.
                       1.14      “Field Products” means [***]
                       1.15      “FTE Hourly Rate” means [***]
                       1.16      “Inventions” means any inventions or
discoveries, whether or not patentable, conceived pursuant to the Product
Development Plan during the term of this Agreement or within three (3) months
thereafter.
                       1.17      “Joint Inventions” has the meaning given to it
in Section 10.2 (a).
                       1.18      “Major European Market Country” means each of
France, Germany, Italy, Spain and the United Kingdom.
                       1.19      “Major Market Country” means each of France,
Germany, Italy, Spain, the United Kingdom, the United States and Japan.
                       1.20      “NDA” means a New Drug Application filed with
the FDA.
                       1.21      “Net Sales” means [***]
          If ACTII is receiving royalties under this Agreement from any Product
sold in a form containing Product and at least one other ingredient, product or
component which is Therapeutically Active, Net Sales for such combination
Product will be calculated by multiplying actual Net Sales of such combination
Product by the fraction A/(A+B) where A is the invoice price of the Product if
sold separately, and B is the invoice price of any other ingredient which is
Therapeutically Active in the combination, if sold separately. If, on a
country-by-country basis, the other ingredient which is Therapeutically Active
in the combination is not sold separately in said country, Net Sales for the
purpose of determining royalties of the combination Product shall be calculated
by multiplying actual Net Sales of such

 

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combination Product by the fraction A/C where A is the invoice price of the
Product, if sold separately, and C is the invoice price of the combination
Product. If, on a country-by-country basis, neither the Product nor the other
ingredient which is Therapeutically Active of the combination Product is sold
separately in said country, Net Sales for the purpose of determining royalties
of the combination Product shall be determined by the Parties in good faith. In
general, the Parties agree to negotiate in good faith for an equitable
determination of Net Sales of Product, on a country-by-country basis, in the
event that Amylin or its Affiliates, sublicensees or Co-Marketers sell Product
in such a manner that gross sales of the same are not readily identifiable.
                       1.22      “Party” means each of ACTII and Amylin.
                       1.23      “Phase III Clinical Trial” means a large-scale
human clinical trial conducted in patients and designed to indicate a
statistically significant level of efficacy for a Product in the treatment of
the disease state being studied and required to obtain clinical registration of
the Product with health regulatory authorities such as the FDA.
                       1.24      “Product” means any Field Product the
manufacture, use, sale, offer for sale, or import of which, but for the licenses
granted in this Agreement, would infringe a Valid Claim of any of the ACTII
Patents.
                       1.25      “Product Development Plan” has the meaning
given to it in Section 4.3(d)(i).
                       1.26      “Project Working Team” means the working team
formed pursuant to Section 4.3(a).
                       1.27      “Receiving Party” means a Party that receives
Confidential Information from the Disclosing Party.
                       1.28      “Regulatory Approval” means approval of an NDA
by the FDA or approval of a comparable application or set of applications by a
comparable regulatory authority in a country other than the United States,
together with satisfaction of any related regulatory and notification
requirements of the FDA or such other regulatory authority.
                       1.29      “Steering Committee” means the committee formed
pursuant to Section 4.2(a).
                       1.30      “System” refers to methods for preparing
microspheres/microparticles by combining two phases by mixing or other means of
blending to form an emulsion, which is then subjected to one or more extraction
steps to remove drug/polymer solvents and complete the formation of
microspheres/microparticles, and to the microspheres/microparticles prepared
thereby. The first phase comprises active ingredient, polymer, and polymer
and/or drug solvents. The second phase comprises water and an emulsifying agent.
By way of further clarification, the emulsion could comprise two phases (e.g.,
oil in water) or multiple phases (e.g., water in oil in water), depending on the
choice of solvents for the drug and polymer.

 

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                       1.31      “Therapeutically Active” means biologically
active but shall not include diluents, vehicles or specific adjuvants or any
other ingredient (other than a Product) which does not have any, or only
incidental, therapeutic properties when present alone.
                       1.32      “Valid Claim” means a claim of an issued patent
which claim has not lapsed, been canceled or become abandoned and has not been
declared invalid or unenforceable by an unreversed and unappealable decision or
judgment of a court or other appropriate body of competent jurisdiction, and
that has not been admitted to be invalid through disclaimer or found to be
unenforceable through reissue.
                       1.33      “Warrant” means a warrant for one share of the
common stock of Amylin, exercisable at any time on or after the date on which
the warrant is issued. [***]
          2.    License Grants.
                       2.1      Grants.
                                 (a) Subject to the limitations, terms and
conditions set forth in this Agreement, ACTII hereby grants to Amylin an
exclusive (even as to ACTII, except as provided in Section 2.1(b), below),
worldwide license in the Field under ACTII Patents and ACTII Know-How, together
with the right to grant sublicenses, to make, have made, use, import, offer to
sell, sell and have sold Products.
                                 (b) Subject to the limitations, terms and
conditions set forth in this Agreement, Amylin hereby grants to ACTII a
non-exclusive, non-transferable, worldwide, royalty-free license, without the
right to grant sublicenses, under the Amylin Patents and Proprietary Information
to carry out its duties and obligations with respect to Field Products under
this Agreement.
                       2.2      Commercialization by Amylin. Amylin shall use
Commercially Reasonable Efforts to develop Products for marketing or
distribution in all Major Market Countries and to take such other actions as are
necessary to obtain government approvals to market the Products in such markets
throughout the world as Amylin believes appropriate, and thereafter to use
Commercially Reasonable Efforts to market or distribute such Products in such
markets.
          3.    Payments to ACTII.
                       3.1      Feasibility Study Completion Milestone. At [***]
Amylin shall pay to ACTII [***] and shall issue to ACTII [***] Warrants
exercisable at a purchase price equal to the Average 20-Day Trailing Price on
the Effective Date of this Agreement. If Amylin does not make the payment and
issue the Warrants as provided in the Section 3.1 as set forth above, the
Agreement shall automatically terminate and neither Party shall have any
obligation to the other.
                       3.2      Development Funding.According to Section 4,
Amylin will pay to ACTII the FTE Hourly Rate for all work performed by ACTII
under the Product Development Plan.

 

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                       3.3      Milestones.The following milestone payments
shall be paid in accordance with the following schedule for the first Product to
reach each milestone in the Field, said milestone payments to be made within
thirty (30) days of the milestone date:

              Milestone     Milestone Payment    
 
                     
[***]
    [***]    
 
                     
Enrollment of first patient in a Phase III Clinical Trial
    $5,000,000     
 
                     
First commercial sale of a Product in the United States
    $7,000,000     
 
                     
First commercial sale of a Product in a Major European Market Country
    $7,000,000     
 
                   

All milestone payments are non-refundable and non-creditable.
                       3.4      Payment for Products Manufactured by ACTII.
According to Section 6, Amylin will pay to ACTII a transfer price based on Net
Sales of all Products manufactured by ACTII.
                       3.5      Royalties on Products Not Manufactured by ACTII.
For all Products that are not manufactured by ACTII and are instead manufactured
by a third party pursuant to Section 6.2 (“Failure to Supply”), below, Amylin
shall pay to ACTII a royalty on Net Sales at the rate of [***]. For all Products
that are not manufactured by ACTII and are instead manufactured by a third party
pursuant to Section 6.3 (“Second Source”), below, Amylin shall pay to ACTII a
royalty on Net Sales at the rate of [***]. The royalty payable under this
Section 3.5 will be payable only once with respect to a particular sale of a
Product regardless of there being more than one patent or Valid Claim applicable
to such Product.
                       3.6      Transfer Price and Royalty Terms. This
Section 3.6 shall apply to both the transfer price payable under Section 3.4 and
the royalty payable under Section 3.5.
                                 (a)      [***]
                                 (b)      Mode of Payment. Royalty and transfer
price payments shall be made within thirty (30) days after the end of the
calendar quarter for all Net Sales invoiced by Amylin, its Affiliates,
sublicensees and Co-Marketers in such calendar quarter. Each royalty and
transfer price payment shall be accompanied by a detailed statement that shall
include for each country in which sales of Products occurred: (a) the gross
sales and Net Sales in such country’s currency or in the Euro, if applicable;
(b) the applicable exchange rate for converting such currency to United States
Dollars and gross sales and Net Sales in United States Dollars; (c) an
accounting of all deductions taken in the calculation of Net Sales; (d) a
separate accounting for all combination Products sold and the formulas used in
the calculation of the royalty owed thereon; and (e) the royalty payable in
United States Dollars. Such statement shall

 

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be deemed Confidential Information of Amylin. The rate of exchange to be used in
any currency conversion to United States Dollars shall be the rate reported in
the Wall Street Journal for the purchase of United States Dollars with such
currency on the last business day in Geneva, Switzerland for the quarter for
which the report is being prepared. All royalty and transfer price payments
hereunder shall be made to ACTII in United States Dollars by bank wire transfer
in immediately available funds to a bank account designated by ACTII. All
payments hereunder shall be made net of any withholding taxes, duties, levies,
fees or charges required to be withheld under the law on behalf of ACTII. Amylin
shall make any withholding payment due on behalf of ACTII and shall promptly
provide ACTII with written documentation of any such payment.
                                 (c)      Records Retention; Audit. Amylin
agrees to keep for at least five (5) years records of all sales of Products in
sufficient detail to permit ACTII to confirm the accuracy of Amylin’s royalty
calculations. At ACTII’s request upon at least forty-five (45) days’ prior
written notice, and at the expense of ACTII, Amylin shall permit a nationally
recognized independent certified public accountant appointed by ACTII, and
reasonably acceptable to Amylin, to examine these records solely to the extent
necessary to verify such calculations, provided that such accountant has entered
into a confidentiality agreement with Amylin or ACTII substantially similar to
the confidentiality provisions of this Agreement, limiting the use and
disclosure of such information to those comparable of a royalty statement
provided pursuant to Section 3.6(b) hereof. Such examination may occur only once
in each calendar year and may apply only to records pertaining to the preceding
five (5) calendar years. Results of any such examination shall be made available
to ACTII and to Amylin. If such examination reveals an uncontested underpayment
of royalties by five percent (5%) or more, Amylin shall pay all costs of such
examination. In the event such accountant concludes that additional royalties
are owed, the additional royalties shall be paid within thirty (30) days after
the date Amylin receives the accountant’s written report reflecting such
conclusion. Amylin shall either (i) keep for at least five (5) years copies of
records of its Affiliates, sublicensees and Co-Marketers sufficient for auditing
purposes under this Section 3.5(c) or (ii) secure the right for ACTII to conduct
an audit of the records of Amylin’s Affiliates, sublicensees and Co-Marketers
under this Section 3.6(c) including records pertaining to gross sales and all
deductions taken in the calculation of Net Sales. This Section 3.6(c) shall
survive any termination of this Agreement for two (2) years.
                                 (d)      Termination of Obligation to Pay
Royalties. Notwithstanding anything in this Agreement to the contrary, Amylin’s
obligation to pay royalties on Net Sales of a Product shall cease on a
country-by-country basis upon the later of (i) ten (10) years from first
commercial sale of Product, and (ii) the expiration or invalidation of the last
Valid Claim of all patents within the ACTII Patents covering Product in such
country.
                                 (e)      Late Payments. Any payment due
pursuant to Sections 3, 4 or 6 which is not made by the date it is due will
accrue simple interest from that date to the date of actual payment at a rate of
[***] per annum, computed for the number of days actually elapsed and a year of
365 days.
          4.    Product Development Program.

 

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                       4.1      Scope. ACTII shall have principal responsibility
for the formulation and non-clinical development of a Product for use in the
Field, including formulation, development and optimization, stability testing,
manufacturing of clinical supplies, process scale-up and process validation.
Amylin shall have principal responsibility for toxicological and clinical
development of a Product through Regulatory Approval and sole responsibility for
commercialization of a Product. Each Party shall use Commercially Reasonable
Efforts in performing its functions under the Product Development Plan.
                       4.2      Steering Committee.
                                 (a) Within thirty (30) days after the date of
this Agreement, the Parties shall form a Steering Committee consisting of an
equal number of representatives of each Party. The Steering Committee shall have
general authority over the strategic direction and overall management of the
Product Development Plan and shall operate and have the further authority
described in this Section 4.2.
                                 (b) ACTII and Amylin shall each appoint three
(3) representatives as their representatives to serve on the Steering Committee.
A Party may change its representatives from time to time by giving written
notice to the other Party.
                                 (c) The Steering Committee shall generally meet
at such times as it may decide and at least once per calendar quarter. The
location of Steering Committee meetings shall alternate between ACTII’s offices
and Amylin’s offices unless otherwise agreed by the Parties, with the first
meeting being held at Amylin’s office. Minutes of a meeting setting forth
decisions of the Steering Committee shall be prepared by the Party hosting the
meeting. Minutes will become official when agreed to by all members of the
Steering Committee. Each Party will bear all expenses associated with attendance
of its representatives at meetings. If the Steering Committee members all agree,
a meeting may be held by telephone.
                                 (d) Decisions of the Steering Committee shall
be made by unanimous vote, with each member having one vote. If the Steering
Committee is unable to reach a unanimous vote on any issue, the issue shall be
referred to the President of ACTII (or successor position), and the Vice
President of Corporate Development of Amylin (or successor position) for
resolution. These individuals shall, as soon as practicable, attempt in good
faith to decide the issue. If the issue is not decided within fifteen (15) days
after it has been referred to such individuals, it shall be referred to Amylin’s
Chief Executive Officer (or successor position), who shall make the final
decision regarding such issue.
                                 (e) Within fifteen (15) days after the receipt
of the proposed Product Development Plan or any amendments thereto from the
Project Working Team or any appeals of decisions of the Project Working Team,
the Steering Committee shall meet to consider approval of such plan or
amendments, or appeal of such decision, as applicable. The Steering Committee
shall periodically review the Product Development Plan from a strategic
perspective, the status of efforts to implement it and to make any changes to it
that it deems necessary to accomplish the purpose of this Agreement. The
Steering Committee shall also settle any disputes among the Project Working
Team.

 

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                       4.3      Project Working Team.
                                 (a) Within thirty (30) days after the date of
this Agreement, the Parties shall form a Project Working Team, which shall
consist of representatives of each Party. Either party may change its
representatives on the Project Working Team at any time by giving written notice
to the other Party. The Project Working Team shall be responsible for the
preparation, modification (if appropriate) and implementation of the Product
Development Plan. Although each Party has been given principal responsibility
for certain activities, all significant decisions with respect to such
activities (other than those relating to commercialization of Product which
shall be the sole responsibility of Amylin) shall be made by the Project Working
Team. The Project Working Team shall operate under the terms of and shall carry
out the further responsibilities described in this Section 4.3.
                                 (b) The Project Working Team shall meet as
frequently as necessary to accomplish the objectives of the Product Development
Plan but at least once every calendar quarter. It is anticipated that meetings
will occur monthly at the commencement of the work and will be needed less
frequently as the collaboration progresses. The location of the meetings will
alternate between the offices of ACTII and Amylin, unless the Parties agree
otherwise. Meetings of the Project Working Team can be conducted by telephone by
decision of the Project Working Team. Each Party will bear all expenses
associated with attendance of its representatives at meetings of the Project
Working Team.
                                 (c) Except as provided in the succeeding
sentence of this paragraph, decisions of the Project Working Team shall be made
by consensus when possible, and otherwise by majority vote, subject to the right
of either Party to appeal any decision of the Project Working Team to the
Steering Committee. Amylin’s representatives on the Project Working Team shall
have the sole right to determine how to proceed with respect to any
commercialization activity related to a Product. No vote of the Project Working
Team shall be taken unless a majority of the members of the Project Working Team
are present, including at least one (1) representative of each Party. The
Project Working Team shall keep minutes of any meeting at which a decision is to
be reached and shall circulate such minutes to all members of the Project
Working Team and the Steering Committee. Responsibility for the preparation of
the minutes shall rest with the hosting party. Minutes shall be deemed approved
unless any member of the Project Working Team objects to the accuracy of such
minutes within five (5) days of receipt. A Party desiring to appeal a decision
of the Project Working Team to the Steering Committee shall make its appeal in
writing to all Steering Committee members within five (5) days of receipt of the
minutes for the meeting at which the decision was made. Action pursuant to any
decision appealed to the Steering Committee shall be suspended pending a
determination by the Steering Committee to accept, reject or modify the decision
of the Project Working Team. A Party may at any time request reconsideration of
any issue if it in good faith believes that substantial changes in circumstances
have occurred that necessitate such reconsideration.
                                 (d) (i) The Project Working Team shall develop,
and present to the Steering Committee for consideration, a detailed development
plan to address fully, consistent with the terms of this Agreement, the key
elements reasonably necessary for the research, development, formulation, and
manufacture of Products through Regulatory Approval and the budgeted FTEs and
other expenses related to all work to be conducted under the development

 

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plan (“Product Development Plan”). The Product Development Plan shall be based
on an initial product development plan, a first draft of which is attached as
     Exhibit B to this Agreement. The Product Development Plan shall be
completed to the satisfaction of the Parties prior to the time set forth in
Section 3.1 above. and prior to the time that Amylin elects to make the payment
and issue the Warrants as provided therein. The product to be the subject of the
initial product development plan shall be AC2993. Should Amylin determine at any
time during the course of this Agreement that it wishes to develop and
commercialize an additional Field Product, or that it wishes to discontinue
development and commercialization of AC2993 and instead develop and
commercialize a different Field Product, the Parties will negotiate in good
faith whether to develop such additional or different Field Product and, if so,
any appropriate alterations or additions to the provisions of this Agreement,
including but not limited to its financial provisions. In the event that Amylin
discontinues the development and commercialization of AC2993 and the Parties are
unable to agree upon the development of a different Field Product within
180 days of such discontinuation, then this Agreement shall terminate as if
Amylin had terminated this Agreement under Section 9.2(b). The Project Working
Team shall be responsible for implementing the Product Development Plan,
addressing fully the appropriate strategy for development and Regulatory
Approval of Product, developing the responsibilities and procedures for handling
any and all regulatory issues related to a Product and for addressing all issues
that develop during the course of implementing the Product Development Plan.
Such implementation efforts shall include: (A) establishing comprehensive and
detailed plans designed to accomplish the goals of the Product Development Plan,
including a plan pursuant to which ACTII will perform technical and scientific
work under this Agreement, (B) allocating tasks and coordinating activities
required to carry out the objectives of the Product Development Plan,
(C) monitoring progress of the Product Development Plan, (D) monitor the FTEs
worked and expenditures made under the Product Development Plan and
(E) discharging such other obligations as are assigned to the Project Working
Team under this Agreement or by the Steering Committee.
                                        (ii) The Project Working Team may
propose modifications to the Product Development Plan to the Steering Committee
for its approval. No modification may be implemented unless approved by the
Steering Committee.
                       4.4      Quarterly Reports. Within 30 days following the
end of each calendar quarter each Party shall provide the Steering Committee and
the Project Working Team with quarterly status reports summarizing its research
and development efforts under the Product Development Plan during such quarter.
This report shall include a general summary of important events and milestones
achieved, personnel changes, learning points and such other matters as the Party
believes are relevant or that the Steering Committee may request.
                       4.5      Governance Following Product Launch. As soon as
practicable following launch of the Product in a Major Market Country, the
Parties shall meet to review whether it is appropriate to continue the Product
Development Plan under the day-to-day management of the Project Working Team, or
whether the objectives of the Project Working Team have been substantially
achieved and it is appropriate to disband or reorganize the Project Working
Team. Regardless of whether the Parties elect to disband or reorganize the
Project Working Team, the Steering Committee shall continue to provide overall
direction to development of Product.

 

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                       4.6      Other Working Teams. The Steering Committee and
Project Working Team, with the approval of the Steering Committee, may appoint
one or more other working teams (“Working Teams”) to perform such functions as
the Steering Committee or Project Working Team, as applicable, may determine.
Unless a Party elects not to participate on a particular Working Team, all
Working Teams shall have at least one representative of each Party. Working
Teams may provide advice and make recommendations to the Project Working Team,
but shall have no authority to bind the Project Working Team or either Party.
                       4.7      Development Funding to ACTII. In order to
facilitate Amylin’s accomplishment of the development program, ACTII shall
employ such ACTII FTEs as the Project Working Team reasonably deems appropriate
in accordance with the Product Development Plan and subject to the following
provisions:
                                 (a)      ACTII Development Funding and
Reimbursement of Third Person Costs. Amylin shall pay ACTII for work performed
by it under the Product Development Plan according to the FTE Hourly Rate. In
the event that third persons are utilized by ACTII to perform services for the
Product Development Plan, Amylin shall only reimburse ACTII’s actual costs
incurred in connection with such third persons, as opposed to reimbursement
through the FTE Hourly Rate.
                                 (b)      Quarterly Report/Invoice. Within
thirty (30) days following the end of each calendar quarter, ACTII shall provide
Amylin with a report detailing third person costs incurred as described in
Section 4.7(a), together with the actual time spent by ACTII personnel
(including a breakdown of the names of the employees working on the development
program and the number of hours billed under the Product Development Plan by
each employee during such calendar quarter). Amylin, or its representatives,
shall have the right to audit (with financial and scientific representatives)
ACTII records with respect to such reports, in accordance with Section 4.7(d).
                                 (c)      Payments. Amylin shall make the
payments due under this Section 4.7 on a calendar quarter basis to ACTII net
thirty (30) days after Amylin’s receipt of the invoice as described in
Section 4.7(b).
                                 (d)      Records Retention; Audit. ACTII agrees
to keep for at least five (5) years all records of time spent by ACTII personnel
working on the development program and in sufficient detail to permit Amylin to
confirm the accuracy of ACTII’s invoices under Section 4.7(b). At Amylin’s
request upon at least forty-five (45) days’ prior written notice, and at the
expense of Amylin, ACTII shall permit a nationally recognized independent
certified public accountant or independent scientific expert, in both cases,
appointed by Amylin and reasonably acceptable to ACTII, to examine these records
solely to the extent necessary to verify such invoices, provided that such
accountant or scientific expert has entered into a confidentiality agreement
with ACTII substantially similar to the confidentiality provisions of this
Agreement, limiting the use and disclosure of such information to those
comparable of an invoice statement provided pursuant to Section 4.7(b) hereof.
Such examination may occur only once in each calendar year and may apply only to
records pertaining to the preceding five (5) calendar years. Results of any such
examination shall be made available to Amylin and to ACTII. If such examination
reveals an uncontested overpayment under Section 4.7 by five percent (5%) or

 

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more, ACTII shall pay all costs of such examination. In the event such
accountant or scientific expert concludes that an overpayment was made by Amylin
under Section 4.7, ACTII will credit such overpayment amount against future
amount owed by Amylin to ACTII. This Section 4.7(d) shall survive any
termination of this Agreement for two (2) years.
                       4.8      Supply for Development. Amylin shall supply
ACTII, without cost to ACTII, with sufficient quantities of Field Products for
ACTII to conduct all the activities described in the Product Development Plan.
          5.    Clinical Studies; Supply of Field Products and Product. Amylin
shall be responsible for all clinical trials or studies at its own cost, as
shall be provided in the Development Plan. Amylin will supply ACTII, without
cost to ACTII, with sufficient quantities of Field Products necessary for ACTII
to produce and provide to Amylin the Products needed for such studies, and
Amylin will compensate ACTII for technical and scientific time devoted to the
production of such Products at the FTE Hourly Rate. Payments to ACTII under this
Section 5 shall be made within thirty (30) days after receipt of invoices
therefor, and the provisions of Section 4.7(d) regarding retention of records
and audits by Amylin shall apply with regard to payments under this Section 5.
          6.    Manufacturing Rights; Transfer Price.
                       6.1      Manufacturing Agreement. For a period of five
(5) years after the first commercial sale in a Major Market Country of a System
formulation of AC2993 developed pursuant to a Product Development Plan, ACTII
will be the exclusive manufacturer of such Product, and as such shall
exclusively manufacture and supply such Product, in the amounts and at such
delivery times as required by Amylin, its Affiliates, sublicensees and
Co-Marketers. Upon commencement of Phase III Clinical Trials for a System
formulation of AC2993 developed pursuant to a Product Development Plan, or
sooner if agreed by Amylin and ACTII, the Parties shall negotiate in good faith
and enter into a manufacturing and supply agreement (the “Manufacturing
Agreement”) on the terms provided in this Section 6 and such other terms to be
mutually agreed upon, including but not limited to, provisions dealing with
forecasting of Amylin’s requirements for Product, delivery times and terms,
rejection of Product, recall of Product, inspection of ACTII’s manufacturing
facilities, indemnification, Amylin’s and ACTII’s responsibilities with respect
to compliance with global governmental regulations and force majeure. The
agreement shall provide that Amylin will supply sufficient quantities of Field
Products for use in the manufacture of Products for commercialization at no cost
to ACTII. Under the agreement Amylin shall pay ACTII a transfer price equal to
the greater of (a) [***] Net Sales of such Product and (b) [***] for each
monthly dose of such product. Such [***] price shall be adjusted annually by
ACTII in accordance with the annual percentage change in the Consumer Price
Index (U.S. Bureau of Labor Statistics for all urban consumers, U.S. City
Average – all items less food and energy (October 1999 equals 178.3 (Reference
CUUR0000 SAOL1E)). The Parties shall also negotiate in good faith provisions for
inclusion in the agreement regarding payment by Amylin to ACTII of some portion
of the transfer price at the time of shipment of Product and quarterly
reconciliation of the balance of the transfer price owed on Net Sales of
Products. In the event that the Product is not approved as a monthly dose, the
Parties shall negotiate in good faith the appropriate minimum payment per dose
to be paid by

 

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Amylin to ACTII. The agreement shall also include provisions regarding the
manufacturing options provided to Amylin in Sections 6.2 and 6.3 below.
                       6.2      Failure to Supply. Should ACTII ever fail to
supply any or all of Amylin’s (as well as any Affiliate, sublicensee or
Co-Marketer of Amylin’s) needs for Products to the extent Amylin has forecasted
such needs, ACTII shall have the first right to secure a third party to
manufacture that amount of Product which ACTII has failed or anticipates failing
to supply. Such third party shall be approved by Amylin, which approval may not
be unreasonably withheld. In the event that ACTII is unable to secure a third
party manufacturer, or ACTII continues to fail to supply all of Amylin’s (as
well as any Affiliate, sublicensee or Co-Marketer of Amylin’s) needs for
Products for more than three (3) months, Amylin may do any of the following:
(i) elect to make nonexclusive the license grant to ACTII granted in accordance
with Section 6.1, above, (ii) terminate the Manufacturing Agreement with ACTII
for ACTII’s breach (should said breach be material), and (iii) either by itself
and/or by utilizing the services of a third party, manufacture and supply
Products or components thereof (without an obligation to pay to ACTII any
transfer price payments on Products manufactured by Amylin or such third party).
Any Products sold by Amylin, its Affiliates, sublicensees or Co-Marketers under
this Section 6.2 shall be subject to the applicable royalty payment provided in
Section 3.5, above.
                       6.3      Second Source. After the expiration of ACTII’s
manufacturing exclusivity period of five (5) years, as described in Section 6.1,
above, Amylin may do any of the following: (i) elect to make nonexclusive the
license grant to ACTII granted in accordance with Section 6.1, above,
(ii) either by itself and/or by utilizing the services of a third party,
manufacture and supply Products or components thereof (without an obligation to
pay to ACTII any transfer price payments on Products manufactured by Amylin or
such third party). Any Products sold by Amylin, its Affiliates, sublicensees or
Co-Marketers under this Section 6.3 shall be subject to the applicable royalty
payment provided in Section 3.5, above.
                       6.4      ACTII Cooperation. In the event Amylin exercises
its rights pursuant to Sections 6.2 or 6.3, above, to provide for manufacture of
Product not by ACTII, ACTII shall transfer to Amylin or a third party, as
appropriate, any ACTII Know-How required to enable Amylin or such third party to
manufacture Product and provide such assistance as is reasonably necessary to
assist such manufacture and supply. Amylin shall pay ACTII the FTE Hourly Rate
for time spent by ACTII personnel in such technology transfer.
          7.    Representations and Warranties.
                       7.1      Representations and Warranties of ACTII. ACTII
hereby represents and warrants that:
                                 (a)      ACTII Patents and ACTII Know-How.
ACTII is the owner or exclusive licensee of ACTII Patents and ACTII Know-How.
ACTII has the legal right and authority to license ACTII Patents and ACTII
Know-How to Amylin as contemplated by this Agreement. To ACTII’s knowledge, none
of the ACTII Patents is subject to any invalidity proceedings in front of, or
has been found to be invalid by, a court of competent jurisdiction, and that
none of the subject matter of the ACTII Patents is subject to any proceedings
alleging infringement of third party rights in front of, or has been found to
infringe third party rights by, a

 

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court of competent jurisdiction. To ACTII’s knowledge, none of the ACTII
Know-How is subject to any proceedings alleging misappropriation of any of said
ACTII Know-How from a third party. ACTII agrees that, at a time not later than
the time Amylin elects to make the payment and issue the Warrants provided in
Section 3.1 above, it will agree to amend this Agreement to include its further
representation and warranty that at least one Valid Claim, or at least one claim
of a pending patent application within ACTII Patents, in each Major Market
Country will cover a System formulation of AC2993 to be developed and
commercialized under this Agreement.
                                 (b)      Corporate Power. ACTII is duly
organized and validly existing under the laws of the state of its incorporation
and has the full right and corporate authority to execute and deliver this
Agreement and to carry out the provisions hereof, without the consent or
approval of any third party.
                                 (c)      No Conflicts. ACTII’s obligations and
duties hereunder are not contrary to, or in conflict with, any of its
obligations and duties to third parties.
                                 (d)      Binding Agreement. This Agreement is a
legal and valid obligation binding upon ACTII and is enforceable against ACTII
in accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws of general
application relating to or affecting creditors’ rights, and as may be limited by
general principles of equity. The execution, delivery and performance of this
Agreement by ACTII do not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or to which it may be
bound, nor do the execution, delivery and performance of this Agreement by ACTII
violate any law or regulation of any court, governmental body or administrative
or other agency having authority over it.
                                 (e)      Investment Representations. ACTII is
aware of Amylin’s business affairs and financial condition and has acquired
sufficient information about Amylin to reach an informed and knowledgeable
decision to acquire any Warrants pursuant to this Agreement. ACTII will acquire
each Warrant, if issued, for investment for ACTII’s own account only and not
with a view to, or for resale in connection with, any “distribution” thereof
within the meaning of the Securities Act of 1933, as amended (the “Act”). ACTII
understands that neither the Warrants issuable pursuant to this Agreement nor
the shares of Common Stock issuable upon exercise of such Warrants (the “Warrant
Shares”) have been or will be registered under the Act by reason of a specific
exemption therefrom, which exemption depends upon, among other things, the bona
fide nature of ACTII’s investment intent as expressed herein. ACTII further
acknowledges and understands that (i) the Warrants and the Warrant Shares must
be held indefinitely unless the Warrants or the Warrant Shares, as the case may
be, are subsequently registered under the Act or an exemption from such
registration is available, and (ii) that the certificates evidencing the
Warrants and the Warrant Shares will be imprinted with a legend which prohibits
the transfer of the Warrants and the Warrant Shares unless the Warrants or the
Warrant Shares, as the case may be, are registered or such registration is not
required in the opinion of counsel for Amylin. ACTII further warrants and
represents it has the capacity to protect its own interests in connection with
the purchase of the Warrants and the Warrant Shares by virtue of the business or
financial expertise of its officers and directors or of professional

 

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advisors to ACTII who are unaffiliated with and who are not compensated by
Amylin or any of its affiliates, directly or indirectly.
                       7.2      Representations and Warranties of Amylin. Amylin
hereby represents and warrants that:
                                 (a)      Amylin Patents. Amylin is the owner or
exclusive licensee of Amylin Patents. Amylin has the legal right and authority
to license Amylin Patents to ACTII as contemplated by this Agreement. To
Amylin’s knowledge, none of the Amylin Patents is subject to any invalidity
proceedings in front of, or has been found to be invalid by, a court of
competent jurisdiction, and none of the Amylin Patents is subject to any
proceedings alleging infringement of third party rights in front of, or has been
found to infringe third party rights by, a court of competent jurisdiction. To
Amylin’s knowledge, none of the Amylin Proprietary Information is subject to any
proceedings alleging misappropriation of any of said Amylin Proprietary
Information from a third party.
                                 (b)      Corporate Power. Amylin is duly
organized and validly existing under the laws of the jurisdiction of its
incorporation and has the full right and corporate authority to execute and
deliver this Agreement and to carry out the provisions hereof, without the
consent or approval of any third party.
                                 (c)      No Conflicts. Amylin’s obligations and
duties hereunder are not contrary to, or in conflict with, any of its
obligations and duties to third parties.
                                 (d)      Binding Agreement. This Agreement is a
legal and valid obligation binding upon Amylin and is enforceable against Amylin
in accordance with its terms, subject to the effect of bankruptcy, insolvency,
reorganization, receivership, moratorium and other similar laws of general
application relating to or affecting creditors’ rights, and as may be limited by
general principles of equity. The execution, delivery and performance of this
Agreement by Amylin do not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or to which it may be
bound, nor do the execution, delivery and performance of this Agreement by
Amylin violate any law or regulation of any court, governmental body or
administrative or other agency having authority over it.
                       7.3      Disclaimer of Additional Warranties. EXCEPT AS
OTHERWISE PROVIDED IN THIS AGREEMENT, EACH PARTY DISCLAIMS ANY AND ALL
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD
PARTY RIGHTS, AND TITLE.
          8.    Use of Materials and Information.
                       8.1      Use of Materials. ACTII agrees not to use any
materials provided by Amylin, and Amylin agrees not to use any materials
provided by ACTII, except as contemplated by this Agreement.
                       8.2      Protection of Confidential Information. Each
Party, as a Receiving Party, agrees that it will exercise reasonable care,
including not less than the same steps it takes to

 

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protect its own proprietary and confidential information, to protect the
confidentiality of the Disclosing Party’s Confidential Information. Each
Receiving Party shall protect and keep confidential and shall not use, publish
or otherwise disclose to any third party, except as contemplated by this
Agreement or with the Disclosing Party’s written consent, the Disclosing Party’s
Confidential Information for a period of five (5) years following the
termination of this Agreement. Joint Inventions shall constitute Confidential
Information.
                       8.3      Exceptions.
                                 (a)      Use. Notwithstanding any provision of
this Section 8 to the contrary and subject to the disclosure and publication
limitations set forth in this Section 8, both Parties shall be entitled to
research, develop and commercialize Inventions jointly owned by the Parties;
provided, however, that, except pursuant to Section 2.1 hereof, ACTII shall have
no right to research, develop or commercialize Products before termination of
this Agreement. Provided further, however, that nothing in this Section shall
constitute or be construed as constituting or granting to a Party any license in
or to any patents or other intellectual property of the other Party.
                                 (b)      Disclosure. Each Receiving Party shall
also be entitled to disclose to consultants and other third parties if necessary
for any purpose contemplated by or related directly to this Agreement the
Disclosing Party’s Confidential Information; provided that the third party
recipient of any Confidential Information shall first execute a confidentiality
undertaking containing provisions at least as protective as those set forth in
this Section 8, and provided further that ACTII may not disclose in conjunction
with any disclosure of Inventions jointly owned by the Parties, either
explicitly or implicitly, the identity of Amylin or the identity or structure of
AC2993 or the identity of the indication without the prior consent of Amylin.
Amylin shall also be entitled to disclose ACTII’s Confidential Information to
regulatory and other government authorities for the purpose of seeking
Regulatory Approval and other necessary or appropriate regulatory or government
review or approvals of the Product pursuant to this Agreement, and both Parties
shall be entitled to disclose Inventions jointly developed by personnel of both
Parties to regulatory and other government authorities for the purpose of
seeking Regulatory Approval and other necessary or appropriate regulatory or
government review or approvals of products pursuant to their rights set forth in
this Section 8. Amylin shall also be entitled to disclose the results of the
Feasibility Study to third parties, provided that the results are disclosed only
to third parties who are bound by written agreement to maintain the
confidentiality of such results and that such results be used for the sole
purpose of business development.
                                 (c)      Publications. Each Party shall consult
with the other Party prior to any oral presentation or the submission of any
manuscript for publication or presentation if the presentation or manuscript
relates to injectable, sustained release formulations of [***]. Such
consultation shall include providing a copy of a summary of the oral
presentation and draft of any related abstract or the proposed manuscript to the
reviewing Party at least thirty (30) days prior to the proposed date of
presentation or submission to a publisher, incorporating appropriate changes as
are reasonably proposed by the reviewing Party into the presentation or
manuscript, and deleting Confidential Information that the reviewing Party does
not agree should be published or presented. If the reviewing Party does not
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initial consultation or notice of intention to publish, then the requesting
Party shall be free to publish as proposed. This Section 8.4 does not control
the filing of any patent application or other patent-related filing; instead,
Section 10.2 shall control the parties’ obligations with regard to prior
notification, consultation, disclosure and publication when filing any patent
application or other patent-related filing which incorporates any Confidential
Information.
                       8.4      Required Disclosures. In the event that a
Receiving Party is required by applicable statute or regulation or by judicial
or administrative process to disclose any part of the Disclosing Party’s
Confidential Information, the Receiving Party shall (a) promptly notify the
Disclosing Party of each such requirement and identify the documents so required
thereby, so that the Disclosing Party may seek an appropriate protective order
or other remedy and/or waive compliance by the Receiving Party with the
provisions of this Agreement; and (b) consult with the Disclosing Party on the
advisability of taking legally available steps to resist or narrow the scope of
such requirement. If, in the absence of such a protective order or such a waiver
by the Disclosing Party of the provisions of this Agreement, the Receiving Party
is nonetheless required by mandatory applicable law to disclose any part of such
Confidential Information, the Receiving Party may disclose such Confidential
Information without liability under this Agreement, except that the Receiving
Party shall (i) furnish only that portion of such Confidential Information which
is legally required and (ii) use its best efforts to obtain an order or other
reliable assurance that confidential treatment shall be accorded to the portion
of such Confidential Information so required to be disclosed.
                       8.5      Return of Confidential Information. In the event
of termination of this Agreement, at any time thereafter upon the request of the
Disclosing Party, the Receiving Party shall promptly return to the Disclosing
Party or destroy (at the Disclosing Party’s option) any of the Disclosing
Party’s Confidential Information responsive to such request, including all
copies thereof, except that the Receiving Party may retain one copy of the
Confidential Information to be used solely to determine the scope of its
obligations under this Agreement. The return and/or destruction of such
Confidential Information as provided above shall not relieve the Receiving Party
of its other obligations under this Agreement.
          9.    Term; Termination.
                       9.1      Term; Expiration at Full Term. This Agreement
shall commence as of the Effective Date hereof and, unless terminated in
accordance with this Section 9, will continue until and expire upon the later of
(i) ten (10) years from the first commercial sale of Product or (ii) the
expiration or invalidation of the last Valid Claim of all patents within the
ACTII Patents. Upon expiration of this Agreement under this Section 9.1, all
licenses granted pursuant to this Agreement shall become non-exclusive,
worldwide, fully paid-up licenses.
                       9.2      Unilateral Termination by Amylin.
                                 (a)      Termination Prior to Satisfactory
Completion of Feasibility Study. Amylin may terminate this Agreement at any time
prior to giving notice that the results of the studies completed by ACTII under
the Feasibility Agreements are satisfactory to Amylin, in Amylin’s sole
discretion. Upon termination by Amylin under this Section 9.2(a), Amylin shall
have no further obligation under this Agreement.

 

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                                 (b)      General Termination. Amylin may
terminate this Agreement at any time prior to the filing of an NDA for Product
by giving ninety (90) days prior written notice to ACTII. After the filing of an
NDA for Product, Amylin may terminate this Agreement at any time by giving one
hundred eighty (180) days prior written notice to ACTII. Upon termination by
Amylin under this Section 9.2(b), Amylin shall be obligated to reimburse ACTII
within thirty (30) days after receipt of an invoice therefor for any expenses
incurred by ACTII prior to or in connection with such termination of this
Agreement.
                                 (c)      Licenses Terminated. Upon termination
by Amylin under this Section 9.2, all license rights granted under this
Agreement shall automatically terminate and revert in their entirety back to the
granting party.
                       9.3      Breach. Any material breach by either Party of
its material obligations contained in this Agreement shall entitle the other
Party (the      “Non-Defaulting Party”) to give to the Party in default (the
“Defaulting Party”) written notice specifying the nature of the default and
requiring it to cure such default. If such default is not cured within sixty
(60) days after the receipt of such notice, the Non-Defaulting Party shall be
entitled, without prejudice to any of its other rights conferred on it by this
Agreement, by law or in equity, immediately to terminate this Agreement by
giving written notice to the Defaulting Party. Any dispute between the Parties
to be resolved under this agreement as to whether a product is covered by a
Valid Claim of any ACTII Patent shall not be grounds for termination. If ACTII
terminates this Agreement under this Section 9.3 due to Amylin’s breach, all
license rights granted by ACTII under this Agreement shall automatically
terminate and revert in their entirety back to ACTII. If Amylin terminates this
Agreement under this Section 9.3 due to ACTII’s breach, then Amylin’s licenses
granted pursuant to Section 2.1(a) shall survive and Amylin shall owe ACTII
[***] of the royalty on Net Sales of Products that would have otherwise been
owed under this Agreement pursuant to Section 3.5, above.
                       9.4      Insolvency or Bankruptcy. ACTII may, in addition
to any other remedies available to it by law or in equity, terminate this
Agreement, by written notice to Amylin in the event Amylin shall have become
insolvent or bankrupt, or shall have made an assignment for the benefit of its
creditors, or there shall have been appointed a trustee or receiver of Amylin
for all or a substantial part of its property, or any case or proceeding shall
have been commenced or other action taken by or against Amylin in bankruptcy or
seeking reorganization, liquidation, dissolution, winding-up, arrangement,
composition or readjustment of its debts or any other relief under any
bankruptcy, insolvency, reorganization or other similar act or law of any
jurisdiction now or hereafter in effect, or there shall have been issued a
warrant of attachment, execution, distraint or similar process against any
substantial part of the property of Amylin, and any such event shall have
continued for sixty (60) days undismissed, unbonded and undischarged.
                       9.5      No Termination upon ACTII’s Bankruptcy. All
rights and licenses granted under or pursuant to this Agreement by ACTII to
Amylin are, and shall otherwise be deemed to be, for purposes of Section 365(n)
of the United States Bankruptcy Code, as amended from time to time (the
“Bankruptcy Code”), licenses of rights to “intellectual property” as defined
under Section 101(35A) of the Bankruptcy Code. The Parties agree that Amylin, as
a licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights

 

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and elections under the Bankruptcy Code. The Parties further agree that, in the
event of the commencement of a bankruptcy proceeding by or against ACTII under
the Bankruptcy Code that is not dismissed within sixty (60) days after it is
filed, Amylin shall be entitled to a complete duplicate of (or complete access
to, as appropriate) any such intellectual property and all embodiments of such
intellectual property, including without limitation all intellectual property
necessary or useful to give Amylin the capability of manufacturing Products, and
the same, if not already in its possession, shall be promptly delivered to
Amylin (i) upon any such commencement of a bankruptcy proceeding upon written
request therefor by Amylin, unless ACTII elects to continue to perform all of
its obligations under this Agreement, or (ii) if not delivered under (i) above,
upon the rejection of this Agreement by or on behalf of ACTII, upon written
request therefor by Amylin.
                       9.6      Accrued Rights; Survival. Termination of this
Agreement for any reason shall be without prejudice to any rights which shall
have accrued to the benefit of either Party prior to such termination. Such
termination shall not relieve either Party from obligations including those
under the following provisions which shall survive termination of this
Agreement, Sections 3.6(b), (c), and (e), 4.7(d) 8, 9, 10.1, 11, 12.1, 12.8 and
12.17, or any other obligations which are expressly indicated to survive
termination of this Agreement.
                       9.7      Selling Rights Upon Termination. Upon any
termination of this Agreement, Amylin shall have the right to sell its inventory
of Products for a period of six (6) months from the date of termination provided
that Amylin complies with the provisions of Sections 3.4 through 3.6 and
Section 6.1 hereof.
          10.    Rights to Intellectual Property.
                       10.1      Ownership of Inventions. Any and all
Inventions, whether made solely by personnel of a Party or jointly by personnel
of the Parties, shall be the property of the Parties as follows:
                                      (a)      Amylin Ownership. [***]
                                      (b)      ACTII Ownership. [***]
                                      (c)      All Other Inventions. The United
States laws of inventorship shall govern the ownership of all other Inventions
that are neither assigned to Amylin nor ACTII pursuant to the ownership
provisions of Sections 10.1(a) and (b).
          Each Party shall cooperate with the other in completing any patent
applications relating to both solely and jointly developed Inventions that will
be owned by the other Party. Each Party shall also cooperate with the other in
executing and delivering any instrument required to assign, convey or transfer
to such other Party its interest should such assignment, conveyance or transfer
be required by the terms of this Agreement.
          Furthermore, upon the discovery, generation or development of a
particular Invention, the Party so discovering, generating or developing shall
promptly disclose to the other Party the particular Invention at issue and in no
event shall a Party file a patent on such particular

 

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Invention until ownership as described in this Section 10.1 is determined by the
Parties after such Parties have had a reasonable opportunity to review and
discuss the particular Invention at issue.
                       10.2      Prosecution and Maintenance of Patents.
                                    (a)      ACTII’s Obligations to Prosecute.
ACTII shall file and control prosecution and maintenance of patent applications
for all ACTII Patents, including ACTII Patents claiming Inventions owned by
ACTII, and, subject to the consultation rights granted to Amylin in
Section 10.2(b) below, patents claiming Inventions owned jointly by ACTII and
Amylin (“Joint Inventions”) and be responsible for related interference
proceedings in accordance with reasonable commercial standards and reasonable
principles of intellectual property protection, all at ACTII’s expense. ACTII
shall endeavor to ensure that all ACTII Patents, and patents claiming Joint
Inventions are filed before any public disclosure of the inventions claimed
therein to maximize the scope of protection of such patents filed outside the
United States. ACTII shall furnish Amylin with copies of all substantive
communications between ACTII and applicable patent offices regarding patents and
patent applications claiming Inventions.
                                    (b)      Consultation; No Disclosure by
Amylin. ACTII and Amylin shall discuss and evaluate Joint Inventions and confer
with each other regarding the advisability of filing patent applications in the
United States and in foreign countries to cover Joint Inventions. ACTII shall
provide to Amylin (i) draft patent applications, and (ii) draft official
correspondence to national or international patent authorities which purports to
amend the scope of the claims presented in the originally filed application,
each to be provided sufficiently in advance of filing for Amylin to have the
opportunity to comment thereon, and at least 30 days prior to the contemplated
filing date whenever possible. Any reasonable requests made by Amylin pertaining
to such drafts shall be reflected in such drafts, provided that Amylin provides
such input to ACTII sufficiently in advance of such proposed submission date to
permit inclusion therein. Amylin shall endeavor to delay any public disclosure
of the subject matter of any patent application filed or to be filed by ACTII
under this Agreement until after filing by ACTII of such patent application.
                                    (c)      Amylin’s Standby Filing Rights. If
ACTII elects not to seek or maintain patent protection for any Invention at all
or in any particular country, ACTII shall provide Amylin prompt notice of such
election, and Amylin may file and control the prosecution and maintenance of
patent applications, at its expense, with respect to Inventions everywhere or in
particular countries, as the case may be. In the event Amylin elects to file or
maintain such a patent application, ACTII will grant any necessary authority to
Amylin to do so everywhere or in such particular country, as appropriate, and
will cooperate as is reasonable, at Amylin’s expense, with Amylin’s prosecution
and maintenance efforts. ACTII shall delay any public disclosure of the subject
matter of such patent application until after filing by Amylin of such patent
application.
                       10.3      Infringement by Third Parties.
                                    (a)      Notice. Any Party learning of any
activities of a third party which are believed to infringe or misappropriate the
ACTII Patents or patents that claim Joint

 

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Inventions in the Field or any claim of a third party that any of the ACTII
Patents are invalid or unenforceable shall promptly notify the other Party of
such activities or such claim.
                                      (b)      Prosecution of Actions Involving
Product.
                                                (i) Amylin shall have the
primary right, but not the obligation, to institute, prosecute and control any
action or proceeding with respect to any infringement/misappropriation of any of
the ACTII Patents or patents claiming Joint Inventions arising from the use
thereof and involving Product, by counsel of its own choice. ACTII shall
cooperate with Amylin at Amylin’s request in the prosecution of such action or
proceeding. If Amylin reasonably determines that ACTII is an indispensable party
to the action, ACTII hereby consents to be joined. In such event, ACTII shall
have the right to be represented in that action by counsel of its own choice and
at ACTII’s expense.
                                                (ii) If Amylin fails to bring an
action or proceeding within a period of ninety (90) days after receiving written
notice from ACTII or otherwise having knowledge of that
infringement/misappropriation of ACTII Patents or patents claiming Joint
Inventions involving Products, as described in Section 10.3(b)(i), ACTII shall
have the right to bring and control any such action by counsel of its own choice
and expense. IF ACTII reasonably determines that Amylin is an indispensable
party to the action, Amylin hereby consents to be joined. In such event, Amylin
shall have the right to be represented in that action by counsel of its own
choice and at Amylin’s expense.
                                                (iii) No settlement, consent
judgment or other voluntary final disposition of a suit under this
Section 10.3(b) may be entered into without the joint consent of Amylin and
ACTII (which consent shall not be unreasonably withheld).
                                                (iv) If Amylin brings action,
any damages or other monetary awards recovered by Amylin attributable to sales
of Products, shall be applied pro-rata to defray the reasonable costs and
expenses incurred in the action by both Parties. Any remaining recovery shall be
used to reimburse Amylin for lost profits, to the extent the recovery or
settlement is calculated on the basis of lost profits, and ACTII for lost
royalties or transfer price payments on account of lost sales. Any remaining
recovery shall be allocated to Amylin.
                                                (v) If Amylin fails to bring
action and ACTII brings action, any damages or other monetary awards recovered
by ACTII attributable to sales of Product derived therefrom, shall be applied
pro-rata to defray the reasonable costs and expenses incurred in the action by
both Parties. If any balance remains it shall be allocated to ACTII.
                                      (c)      Infringement of ACTII Patents or
Patents Claiming Joint Inventions Outside Field. In the event that any ACTII
Patents or patents claiming Join Inventions that have application outside the
Field are infringed outside the Field by a third person, the Party first having
knowledge of such infringement shall notify the other as set forth above and the
Parties shall consult with each other as to how they should proceed, but each
Party shall be free to pursue or protect its own respective interests to the
extent it is legally entitled to do so. ACTII hereby agrees to use commercially
reasonable efforts to diligently enforce such ACTII Patents or patents claiming
Joint Inventions that have application outside the Field.

 

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                       10.4      Infringement of Third Parties.
                                    (a)      Notice. If either Party believes
that patent rights held by a third party may be necessary or useful to make,
have made, use, sell, supply or import Products or learns of a third party who
has filed suit or has threatened to file suit because of a claim that a Product
may be infringing such third party’s rights, they shall promptly notify the
other Party in writing. The Parties shall then meet to discuss in good faith
whether or not both Parties agree that such third party rights may be necessary
or useful to make, have made, use, sell, supply or import a Product and whether
such possible infringement, or the claims in such infringement suit or
threatened suit are based on an allegation that any of the Field Products (but
not the Product incorporating such Field Product), infringes such third party
patents. In the event the Parties are unable to so agree, the matter will be
decided in accordance with the dispute resolution provisions of Section 12.17.
                                    (b)      Defense, Settlement or Securing
Third Party Rights.
                                               (i)      By ACTII. If it is
determined, either by mutual agreement or as a result of the dispute resolution
procedures that such third party’s rights are necessary and not based on
allegations related to infringement of third party rights by any of the Field
Products (excluding the Product incorporating such Field Product), then ACTII
shall be responsible to defend any suit alleging infringement of a third party,
seek to settle any suit or threatened suit, or secure the rights of such third
party for use in the Field. ACTII shall not settle or secure such third party
rights without Amylin’s prior approval, which shall not be unreasonably
withheld. The Parties shall share equally any payments or royalties owed to the
third party for settling such suit or for securing such third party rights.
                                               (ii)      By Amylin. If it is
determined, either by mutual agreement or as a result of the dispute resolution
procedures that such third party’s rights are necessary and are based on
allegations related to related to infringement of third party rights by any of
the Field Products (excluding the Product incorporating such Field Product),
then Amylin shall be responsible to defend any suit alleging infringement of a
third party, seek to settle any suit or threatened suit, or secure the rights of
such third party for use in the Field. Amylin shall be solely responsible for
any payments or royalties owed to the third party for settling such suit or for
securing such third party rights.
                                                (iii)      Amylin Standby Right
to Secure Third Party Rights. In the event that ACTII is unable to secure the
rights of a third party under Section 10.4(b)(i), unless ACTII is diligently
defending such infringement action, Amylin may secure such rights from the third
party, after obtaining ACTII’s prior approval, which shall not be unreasonably
withheld.
          11.    Indemnification.
                       11.1      Indemnification by Amylin. Amylin hereby agrees
to indemnify and hold harmless ACTII and its Affiliates and each of their
respective agents, employees, officers and directors (the “ACTII Indemnitees”)
from and against any and all suits, claims, actions, demands, liabilities,
expenses and/or losses, including reasonable investigation expenses, legal
expenses and attorneys’ fees (“Losses”) resulting directly from (a) any material
breach of this

 

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Agreement by Amylin, (b) the marketing, packaging, testing, labeling,
manufacture, use or sale of Field Products or Products or (c) the performance of
the Product Development Plan by Amylin (except that Amylin shall not indemnify
ACTII for Losses resulting from the Product Development Plan or flaws or
omissions in the Product Development Plan itself) except to the extent such
Losses are required to be indemnified by ACTII pursuant to Section 11.2 hereof,
and except to the extent such Losses are attributable to the gross negligence or
willful misconduct of any ACTII Indemnitee.
                       11.2      Indemnification by ACTII. ACTII hereby agrees
to indemnify and hold harmless Amylin and its Affiliates and each of their
respective agents, employees, officers and directors (the “Amylin Indemnitees”)
from and against any and all Losses resulting directly from (a) any material
breach of this Agreement by ACTII, (b) the manufacture and supply of Product by
ACTII under this Agreement or (c) the performance of the Product Development
Plan by ACTII (except that ACTII shall not indemnify Amylin for Losses resulting
from the Product Development Plan or flaws or omissions in the Product
Development Plan itself), except to the extent such Losses are attributable to
the gross negligence or willful misconduct of any Amylin Indemnitee.
                       11.3      Notification of Claims; Condition to
Indemnification Obligations. As a condition to a Party’s right to receive
indemnification under this Section 11, it shall (a) notify the other Party as
soon as it becomes aware of a claim or Action for which indemnification may be
sought pursuant hereto, (b) cooperate with the indemnifying Party in the defense
of such claim or suit, and (c) permit the indemnifying Party to control the
defense of such claim or suit, including without limitation the right to select
defense counsel. In no event, however, may the indemnifying Party compromise or
settle any claim or suit in a manner which admits fault or negligence on the
part of the indemnified party or includes injunctive relief without the prior
written consent of the indemnified party. The indemnifying Party shall have no
liability under this Section 11 with respect to claims or suits settled or
compromised without its prior written consent.
                       11.4      Limitation on Liability. ACTII does not
represent, warrant or guarantee that its efforts under the Product Development
Plan will produce any particular results or that any Product resulting therefrom
will be merchantable or satisfactory for any particular purpose. Amylin does not
represent, warrant or guarantee that its efforts under the Product Development
Plan will produce any particular results or that any Product resulting therefrom
will be merchantable or satisfactory for any particular purpose. Except pursuant
to their indemnification and hold harmless obligations set forth in this
Section 11, neither Party shall be responsible or liable in contract or in tort
to the other Party for any special, indirect, incidental or consequential
damages, including but not limited to loss of product, profits or revenues,
damage or loss from operation or non-operation of plant.
                       11.5      Insurance. Each Party shall maintain and keep
in force for the term of this Agreement comprehensive general liability
insurance including products/completed operations, contractual and broad form
property damage covering its indemnification obligations hereunder with a
minimum limit of [***] per annum combined single limit for bodily injury and
property damage. It is understood that such insurance shall not be construed to
limit a Party’s liability with respect to such indemnification obligations. Such
insurance shall be placed with a first

 

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class insurance carrier with at least a BBB rating by Standard & Poors. Promptly
after execution and delivery of this Agreement, each Party shall furnish a
certificate of insurance to the other Party evidencing the foregoing
endorsements, coverage and limits, and providing that such insurance shall not
expire or be canceled or modified without at least thirty (30) days prior notice
to the other Party.
                   11.6      Survival. This Section 11 shall survive termination
or expiration of this Agreement for two (2) years.
          12.    Miscellaneous Provisions.
                   12.1      Acts and Omissions. Each Party assumes any and all
risks of personal injury and property damage attributable to the acts or
omissions of it and its officers, employees and agents in the performance of
this Agreement.
                   12.2      Compliance with Law. The parties shall perform all
Actions under this Agreement in accordance with all applicable laws, rules and
regulations.
                   12.3      Notices. All notices and other communications
required or permitted hereunder shall be effective upon receipt and shall be in
writing and may be delivered in person, by facsimile, overnight delivery service
or United States mail, in which event it may be mailed by first-class, certified
or registered, postage prepaid, addressed to the parties as follows:
If to Amylin:
General Counsel
Amylin Pharmaceuticals, Inc.
9373 Towne Centre Drive
San Diego, CA 92121
Fax: 858-552-1936
If to ACTII:
President
Alkermes Controlled Therapeutics Inc. II
64 Sidney Street
Cambridge, MA 02139
Fax: 617-494-9263
or to such other addresses as may from time to time be given in writing by
either Party to the other pursuant to the terms hereof.
                   12.4      No Third-Party Beneficiaries. Nothing in this
Agreement is intended to confer on any person other than the Parties or their
permitted assigns, any benefits, rights or remedies.
                   12.5      Independent Contractors. The parties hereto shall
be independent contractors with respect to each other, and neither shall be
deemed to be the agent, principal,

 

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employee, servant, joint venturer or partner of the other for any purpose which
could impose liability upon one Party for the act or failure to act of the other
Party.
                       12.6      Entire Agreement. This Agreement and the
Exhibits attached hereto, together with the Feasibility Agreement, constitute
the entire agreement between the parties concerning the subject matter hereof
and supersede all prior understandings and agreements, whether written or oral.
                       12.7      Severability. Any of the provisions of this
Agreement which are determined to be invalid or unenforceable in any
jurisdiction shall be ineffective to the extent of such invalidity or
unenforceability in such jurisdiction, without rendering invalid or
unenforceable the remaining provisions hereof or affecting the validity or
enforceability of any of the terms of this Agreement in any other jurisdiction.
                       12.8      Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Delaware, without
giving effect to the principles of conflict of laws.
                       12.9      Assignment. Neither Party shall assign any of
its rights or delegate any of its obligations hereunder without the other
Party’s prior written consent except pursuant to: (i) a merger, consolidation or
reorganization of the assigning Party or the sale of substantially all of the
assets of the assigning Party; (ii) with respect to Amylin, as incident to the
establishment of a corporate partnership arrangement with respect to any of the
Field Products; or (iii) an assignment to any Affiliate of the assigning Party
if the assigning Party remains liable and responsible for the performance and
observance of all the Affiliate’s duties and obligations hereunder.
                       12.10      No Waiver. A waiver by either Party of a
breach or violation of any provision of this Agreement will not constitute or be
construed as a waiver of any subsequent breach or violation of that provision or
as a waiver of any breach or violation of any other provision of this Agreement.
                       12.11      Amendments. This Agreement may not be amended,
supplemented or otherwise modified except by an instrument in writing signed by
both parties.
                       12.12      Headings. Any headings and captions included
herein are for convenience of reference only and shall not be used to construe
this Agreement.
                       12.13      Counterparts. This Agreement shall become
binding when any one or more counterparts hereof, individually or taken
together, shall bear the signature of each of the parties hereto. This Agreement
may be executed in counterparts, each of which shall be an original as against
any Party whose signature appears thereon, but all of which together shall
constitute but one and the same instrument.
                       12.14      Publicity. The Parties shall each have the
right, upon its election, to issue a press release containing, and publicly
disclose, some or all of the information included in Exhibit C and such further
information as the Parties shall mutually approve in each Party’s sole
discretion. Except as set forth in the immediately preceding sentence, each
Party agrees not to

 

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make any disclosure or written dissemination with respect to this Agreement or
its terms without giving the other Party a reasonable opportunity to comment
thereon and obtaining the other Party’s prior written consent, which consent
will not be unreasonably withheld, provided that such opportunity and such
consent will not be required where such disclosure or dissemination (a) is
required by law; or (b) is reasonably necessary in connection with any potential
transaction referred to in Section 12.9 or contemplated by this Agreement.
                       12.15      Adverse Event Reports. In order to comply with
adverse event reporting regulations of the FDA (as provided in Title 21 of the
Code of Federal Regulations) and other international regulatory agencies, each
Party acknowledges that once the parties hereunder are selling and/or clinically
testing in humans any Product they must report promptly to each other the
occurrence of adverse events regarding Products for timely reporting to the FDA
and other reporting agencies.
                       12.16      No Trademark Rights. Except as otherwise
provided herein, no right, express or implied, is granted by this Agreement to
use in any manner the marks “Amylin,” “Medisorb®,” or any other trade name or
trademark of Alkermes, ACTII or Amylin, in connection with the performance of
this Agreement.
                       12.17      Dispute Resolution. Except as otherwise
provided in Section 4, the Parties agree that any claim or controversy arising
pursuant to this Agreement, or the rights or obligations of the Parties
hereunder shall be resolved solely by application of the procedures set forth in
this Section 12.17. These procedures, however, may be modified by written
agreement of the Parties with respect to any particular dispute.
                                      (a)      Settlement Meeting. In the event
any such claim or controversy arises, the Parties shall first attempt to settle
their differences amicably between themselves. Either Party may initiate such
informal dispute resolution by sending written notice of the dispute to the
other Party, and within twenty (20) days after receipt of such notice
appropriate representatives of the Parties, each with full authority from the
chief executive officer of the Party to settle the dispute, shall meet for
attempted resolution of the claim or controversy by good faith negotiations. If
the representative of either Party intends to be accompanied at the settlement
meeting by counsel, the other Party shall be given at least seven (7) days
notice of such intention and may also be accompanied by counsel. All
negotiations pursuant to this Section 12.17 shall be confidential and treated as
compromise and settlement negotiations and shall not be admissible in any
arbitration or other proceeding
                                      (b)      Arbitration. If such
representatives are unable to resolve such dispute within thirty (30) days
following the day of the settlement meeting, either Party may demand arbitration
by sending written notice to the other Party. Such arbitration shall be
administered by the American Arbitration Association (“AAA”) in accordance with
its Commercial Arbitration Rules. The arbitration proceedings shall be conducted
before one arbitrator in Denver, Colorado or any other place selected by mutual
agreement of the Parties. The arbitrator shall apply the governing law set forth
in Section 13.8 hereof. If the Parties are unable to agree upon a single
arbitrator within sixty (60) days after arbitration is demanded, three
(3) arbitrators shall be used, one selected by each Party within ten (10) days
after the conclusion of the sixty (60) day period and a third selected by the
first two within ten (10) days thereafter.

 

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The arbitrator or arbitrators shall be accredited by the AAA and shall be
individuals with knowledge of and experience with the pharmaceutical industry.
                                      (c)      Award. The arbitrator(s) shall
have authority to award any remedy or relief that a Colorado court could order
or grant, including, without limitation, specific performance of any obligation
created under this Agreement, the issuance of an injunction or the imposition of
sanctions for abuse or frustration of the arbitration process as well as to
allocate between the Parties the costs of arbitration in such equitable manner
as they determine. The arbitrator(s) may not make any ruling, finding or award
that does not conform to the terms and conditions of this Agreement. Pending the
issuance of the decision of the arbitrator(s), the Parties shall continue to
operate under this Agreement as it existed on the date the arbitration was
initiated; provided, however, that the decision of the arbitrator(s) shall be
retroactive to such date. The Parties hereby exclude any right of appeal to any
court on the merits of the dispute. Subject to the previous sentence, the
arbitral award (i) shall be final and binding upon the Parties; and (ii) may be
entered in any court of competent jurisdiction.
                                      (d)      Discovery. The arbitrator(s)
shall have discretion to order a prehearing exchange of information by the
Parties, including, without limitation, production of directly relevant
documents, exchanges of testimony, summaries of proposed witnesses and
depositions of the Parties. All issues regarding compliance with discovery
requests shall be decided by the arbitrator(s).
                                      (e)      Injunctive and Other Relief.
Nothing contained in this Section 12.17 or any other provisions of this
Agreement shall be construed to limit or preclude a Party from bringing any
action in any court of competent jurisdiction for injunctive or other
provisional relief to compel the other Party to comply with its obligations
hereunder before or during the pendency of arbitration proceedings.
                       12.18      Electronic Documents. Upon either Party’s
request in order to facilitate compliance with the securities laws of the United
States, the other Party shall provide an electronic version of any document it
has in such format that has previously been provided to the requesting Party.
The Parties agree to accommodate reasonable requests for confidential treatment
of documents filed with the SEC, such that no Confidential Information of either
Party is publicly disclosed by such filing.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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          IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective duly authorized officers as of the day and year
first above written.

              ALKERMES CONTROLLED
THERAPEUTICS INC. II
 
       
 
  By:   /s/ Michael Landine        
 
       
 
  Title:   Vice President        
 
       
 
            AMYLIN PHARMACEUTICALS, INC.
 
       
 
  By:   /s/ Daniel M. Bradbury        
 
       
 
  Title:   Senior Vice President, Corporate Development        

 

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     EXHIBIT A
     ACTII PATENTS
Exhibit A-1
MEDISORB PATENTS
1. “PREPARATION OF BIODEGRADABLE MICROPARTICLES CONTAINING A BIOLOGICALLY ACTIVE
AGENT”
US:
US Patent No. 5,650,173; issued July 22, 1997 [***]
US Patent No. 5,654,008; issued August 5, 1997 [***]
Foreign: [***]

2.  
“PREPARATION OF EXTENDED SHELF-LIFE BIODEGRADABLE, BIOCOMPATIBLE MICROPARTICLES
CONTAINING A BIOLOGICALLY ACTIVE AGENT”

US:
US Patent No. 5,792,477; Issued August 11, 1998
US Patent No. 5,916,598; Issued June 29, 1999
[***]
Foreign: [***]

3.  
[***]

4.  
[***]

5.  
[***]

 

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EXHIBIT B

The two pages of Exhibit B have been omitted entirely and have been filed
separately with the Secretary of the Commission.
     PROGRAM DEVELOPMENT PLAN
Exhibit B-1
-DRAFT-
DEVELOPMENT WORK PLAN
ALKERMES AC2993 SUSTAINED-RELEASE DEPOT
[***]

 

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EXHIBIT C
PRE-APPROVED INFORMATION FOR PRESS RELEASE
CONTACT:
Alice P. Bahner
Amylin Pharmaceuticals, Inc.
Senior Director, Corporate Development
(858) 552-2200
www.amylin.com
Richard F. Pops
Alkermes, Inc.
Chief Executive Officer
(617) 494-0171
www.alkermes.com
FOR IMMEDIATE RELEASE
AMYLIN PHARMACEUTICALS AND ALKERMES SIGN AGREEMENT FOR
DEVELOPMENT OF LONG-ACTING FORMULATION OF AC2993
(SYNTHETIC EXENDIN-4)
     San Diego, CA - May 15, 2000 - Amylin Pharmaceuticals, Inc. (Nasdaq: AMLN)
and Alkermes, Inc. (Nasdaq: ALKS) today announced that they have signed an
agreement for the development, manufacture and commercialization of an
injectable long-acting formulation of AC2993 (synthetic exendin-4), Amylin’s
second diabetes drug candidate. The development program will utilize Alkermes’
patented and proprietary Medisorb(R) injectable sustained release drug delivery
technology. Based upon results obtained to date from initial feasibility
studies, the goal of the new Alkermes-Amylin agreement is a formulation that
would allow once a month administration of AC2993 for the treatment of type 2
diabetes.
     “With this technology, we hope to develop and commercialize a more
convenient delivery system for AC2993,” said Joseph C. Cook, Jr., Chairman of
the Board and Chief Executive Officer of Amylin Pharmaceuticals. “We are
encouraged by results of Phase 2 clinical studies of AC2993 in the treatment of
type 2 diabetes, and we plan to continue with development of AC2993 in its
current formulation in parallel with our work with Alkermes on a long-acting
formulation of AC2993.”
     Under the terms of the agreement, Alkermes has granted to Amylin an
exclusive, worldwide license to their formulation technology for the development
and commercialization of injectable sustained release formulations of exendins,
such as AC2993, and other related compounds that Amylin may develop. In
exchange, Alkermes will receive funding for research and development

 

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and milestone payments comprised of cash and warrants for Amylin common stock
upon achieving certain development and commercialization goals. Alkermes will
also receive a combination of royalty payments and manufacturing fees based on
any future product sales. Alkermes will initially be responsible for developing
and testing several formulations, manufacturing any products commercialized as a
result of the agreement, and Amylin will be responsible for conducting clinical
trials, securing regulatory approvals and marketing on a worldwide basis.
     “This collaboration is an example of our interest in applying our drug
delivery technologies to exciting new product candidates earlier in the
development process,” said Richard Pops, Chief Executive Officer of Alkermes.
“Our goal is to continue to leverage our experience in developing advanced
formulations of protein and peptide drugs.”
     Alkermes is a leader in the development of products based on sophisticated
drug delivery technologies. The Company has several areas of focus:
(i) controlled, sustained release of injectable drugs lasting several days to
several weeks, utilizing its ProLease(R) and Medisorb (R) technologies; (ii) the
development of pharmaceutical products based on proprietary pulmonary drug
delivery technologies utilizing its AIR technology, (iii) oral delivery of drugs
using the RingCap(TM) and DST technologies, and (iv) the delivery of drugs into
the brain past the blood-brain barrier, utilizing its Cereport(R) technology. In
addition to its Cambridge, Massachusetts headquarters, research and
manufacturing facilities, Alkermes operates research and manufacturing
facilities in Ohio and a medical affairs office in Cambridge, England.
     Amylin Pharmaceuticals is engaged in the discovery and development of
potential drug candidates for the treatment of metabolic disorders. The Company
is developing SYMLIN for the treatment of people with diabetes who use insulin.
The Company has completed its Phase 3 clinical trials for SYMLIN and is planning
for a submission to the FDA for approval to market SYMLIN in the US for the
treatment of type 1 diabetes and insulin-using type 2 diabetes in the fourth
quarter of 2000, with a submission for regulatory approval in Europe to follow
later in 2000 or early in 2001. Amylin Pharmaceuticals’ second diabetes drug
candidate, AC2993, is in Phase 2 evaluation for the treatment of type 2
diabetes. The Company’s third drug candidate, AC3056, is currently undergoing
preclinical evaluation as a potential treatment for metabolic disorders relating
to cardiovascular disease. The Company is considering a wide range of
commercialization options for SYMLIN, including some combination of (1) a
worldwide distribution arrangement with a major pharmaceutical company,
(2) regional distribution and marketing arrangements, and (3) performance of
some commercialization activities by Amylin Pharmaceuticals. The Company is also
examining collaborative research, development and commercialization
opportunities for AC2993. Further information on Amylin Pharmaceuticals and its
pipeline in metabolism is available at www.amylin.com.
     This press release contains forward-looking statements about Alkermes’ and
Amylin’s plans. These forward-looking statements involve risks and
uncertainties. The actual results could differ materially from those discussed
in this press release, due to risks and uncertainties including those regarding
the formulation and development of AC2993, the timing of submission of
applications for marketing approvals for SYMLIN and, if approvals are obtained,
time to market thereafter and the ability of Amylin to commercialize SYMLIN, the
ability of Amylin to enter

 

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into sales, distribution, marketing and/or corporate partnering agreements with
respect to SYMLIN and AC2993, and the results of Amylin’s preclinical and
clinical studies of its product candidates, including AC2993 and AC3056.
Additional risks and uncertainties are described in Amylin’s most recently filed
SEC documents, such as its Annual Report on Form 10-K for the fiscal year ended
December 31, 1999 under the heading “Risk Factors,” and its subsequently filed
Quarterly Reports on Form 10-Q, and in Alkermes’ SEC filings, such as its Annual
Report on Form 10-K for the fiscal year ended March 31, 1999 under the heading
“Risk Factors.”

 

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*** Text Omitted and Filed Separately to the Commission
Confidential Treatment Requested
AMENDMENT TO DEVELOPMENT AND LICENSE AGREEMENT
          THIS AMENDMENT TO DEVELOPMENT AND LICENSE AGREEMENT (the “Amendment”)
is entered into as of October 24, 2005 (the “Amendment Effective Date”) by and
between AMYLIN PHARMACEUTICALS, INC., a Delaware corporation (“Amylin”), and
ALKERMES CONTROLLED THERAPEUTICS INC. II, a Pennsylvania corporation (“ACTII”).
          WHEREAS, ACTII and Amylin are parties to that certain Development and
License Agreement dated May 15, 2000 (the “Agreement”); and
          WHEREAS, the Parties desire to amend the Agreement as set forth in
this Amendment.
          NOW, THEREFORE, in consideration of the premises and the covenants
herein contained, the Parties hereby agree to amend the Agreement as follows:
1.          Definitions.
               1.1      All capitalized terms used but not otherwise defined
herein shall have the meanings given to them in the Agreement.
               1.2     Section 1.16 of the Agreement is hereby amended and
restated in its entirety as follows:
                     “1.16     “Inventions” means any inventions or discoveries,
whether or not patentable, conceived pursuant to (i) the Product Development
Plan during the term of this Agreement or within three (3) months thereafter and
(ii) the Project Plan or the provision of Ongoing Technical Support during the
term of the Tech Transfer Agreement or within three (3) months thereafter.”
              1.3     Section 1.29 of the Agreement is hereby amended and
restated in its entirety as follows:
                      “1.29     [INTENTIONALLY OMITTED]”
               1.4     The following new sections, beginning with Section 1.34,
are hereby inserted at the end of Section 1 of the Agreement:
                      “1.34     “API” shall have the meaning assigned to it in
the Tech Transfer Agreement.”
                      “1.35     “Core Oversight Group” means a group formed
pursuant to Section 4.2.1(a).”

 

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                    “1.36     “Executive Committee” means a committee formed
pursuant to Section 4.2.2(a).”
                    “1.37     “Exenatide LAR” shall have the meaning assigned to
it in the Tech Transfer Agreement.”
                    “1.38     “First Commercial Sale” means, with respect to
Exenatide LAR, the first commercial sale of such product in a country after all
Regulatory Approvals for such product have been obtained in such country.”
                    “1.39     “Four-Week Exenatide LAR” means a Product that is
a formulation of API and that is designed to deliver API over a four-week period
of time.”
                    “1.40      “Lilly” means Eli Lilly and Company.”
                    “1.41      “Ongoing Technical Support” shall have the
meaning assigned to it in the Tech Transfer Agreement.”
                    “1.42      “Project” shall have the meaning assigned to it
in the Tech Transfer Agreement.”
                    “1.43      “Project Plan” shall have the meaning assigned to
it in the Tech Transfer Agreement.”
                    “1.44     “RACI Task Analysis” means a list of the major
tasks required to perform the Product Development Plan to be agreed by the
Parties, including for each task: the person or Party that is responsible for
final decision making; the person or Party that is required to approve steps in
the process; the person or Party that needs to be consulted for input and
direction, but not approve decisions; and the person or Party that needs to be
updated or informed, as such RACI Task Analysis may be amended from time to time
as provided herein.”
                    “1.45     “Tech Transfer” shall have the meaning assigned to
it in the Tech Transfer Agreement.”
                    “1.46      “Tech Transfer Agreement” means the Technology
Transfer and Construction Management Agreement to be entered into between ACTII
and Amylin concurrently herewith, as may be amended in accordance with its
terms.”
2.                      NON-SUIT
             2.1      Section 2.1 of the Agreement is hereby amended by adding
the following provision:
                     “(c)     Amylin and its Affiliates, sublicensees and
agents, agree, on a worldwide basis, not to sue ACTII or its Affiliates, or any
third party collaborating with ACTII

 

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or its Affiliates, for developing, making, having made, using, selling, offering
to sell or importing a product outside the Field under patent rights held by
Amylin or its Affiliates, or either of their sublicenses or agents, that cover
or are an improvement to the process for the manufacture of Exenatide LAR
transferred to Amylin by ACTII pursuant to the Tech Transfer Agreement.”
3.                        PAYMENTS TO ACTII
          3.1      Section 3.4 of the Agreement is hereby amended and restated
in its entirety as follows:
                 “3.4     Payment for Four-Week Exenatide LAR. According to
Section 6, Amylin shall pay to ACTII a transfer price based on Net Sales of all
Four-Week Exenatide LAR manufactured by ACTII. For all Four-Week Exenatide LAR
that is not manufactured by ACTII and is instead manufactured by a third party
pursuant to Section 6.2 (“Failure to Supply”), below, Amylin shall pay to ACTII
a royalty on Net Sales at the rate of [***] percent ([***]%). For all Four-Week
Exenatide LAR that is not manufactured by ACTII and is instead manufactured by a
third party pursuant to Section 6.3 (“Second Source”), below, Amylin shall pay
to ACTII a royalty on Net Sales at the rate of [***] percent ([***]%). The
royalty payable under this Section 3.4 will be payable only once with respect to
a particular sale of Four-Week Exenatide LAR regardless of there being more than
one Valid Claim of an ACTII Patent applicable to such Product”
          3.2      Section 3.5 of the Agreement is hereby amended and restated
in its entirety as follows:
                 “3.5     Royalties on Products Not Manufactured by ACTII. Until
December 31st of the tenth full calendar year following the year in which the
First Commercial Sale of Exenatide LAR occurs, Amylin shall pay to ACTII a
royalty on Net Sales of Exenatide LAR at the following rates: (i) eight percent
(8%) of Net Sales of the first 40,000,000 units of Exenatide LAR sold or
commercially disposed of for value during any full calendar year, or portion
thereof, during such period and (ii) five and one-half percent (5.5%) of Net
Sales of the remaining units of Exenatide LAR sold or commercially disposed of
for value during such full calendar year, or portion thereof, during such
period. Except as otherwise provided in this Agreement, Amylin shall pay to
ACTII a royalty on Net Sales of Products not manufactured by ACTII at the rate
of five and one-half percent (5.5%). The royalty payable under this Section 3.5
will be payable only once with respect to a particular sale of a Product
regardless of there being more than one Valid Claim of an ACTII Patent
applicable to such Product.”
4.                        PRODUCT DEVELOPMENT PROGRAM
          4.1      Section 4.1 of the Agreement is hereby amended and restated
in its entirety as follows:
                 “4.1      Scope. ACTII shall have principal responsibility for
the formulation and non-clinical development of a Product for use in the Field,
including formulation,

 

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development and optimization, stability testing, manufacturing of clinical
supplies (except as provided below), process scale-up, process validation and
preparation of the chemistry, manufacturing and controls (CMC) section of the
NDA for Exenatide LAR. Amylin shall have principal responsibility for
toxicological and clinical development of a Product through Regulatory Approval
and sole responsibility for commercialization of a Product. Amylin and ACTII
agree to use the RACI Task Analysis as a tool to assign responsibilities for
decision making and to ensure information flow at the Project Working Team level
with respect to performance by the Parties under the Product Development Plan.
The RACI Task Analysis with respect to the Product Development Plan may be
amended from time to time during the term of this Agreement upon mutual written
agreement of ACTII and Amylin. The Parties acknowledge that as a result of such
amendment, responsibilities for decision making may shift from one Party to
another. Each Party shall use Commercially Reasonable Efforts in performing its
functions under the Product Development Plan. Subsequent to Tech Transfer except
as otherwise agreed by the Parties, Amylin shall be responsible for the
manufacture of any clinical supplies of Products other than pilot phase material
to be used in clinical studies prior to Phase III Clinical Trials. ACTII
acknowledges that Lilly may collaborate with Amylin in the development of a
Product, as a potential sublicensee of certain of Amylin’s rights hereunder.”
          4.2     Section 4.2 of the Agreement is hereby amended and restated in
its entirety as follows:
                  “4.2     Governance.
                          4.2.1      Core Oversight Group.
                         (a)     The committee known as the Steering Committee
that was initially formed by the Parties under the Agreement shall after the
Amendment Effective Date be known as the Core Oversight Group. The Core
Oversight Group shall operate and have the authority described in this Section
4.2, including the general authority over the management of the Product
Development Plan and the Project Working Team, and shall have the further
authority over the management of the Project as described in Article 3 of the
Tech Transfer Agreement.
                         (b)     ACTII and Amylin shall each appoint three
(3) representatives as their representatives to serve on the Core Oversight
Group. A Party may change its representatives from time to time by giving
written notice to the other Party.
                         (c)     The Core Oversight Group shall generally meet
at such times as it may decide and at least once per calendar quarter. The
location of Core Oversight Group meetings shall alternate between ACTII’s
offices and Amylin’s offices unless otherwise agreed by the Parties. Minutes of
a meeting setting forth decisions of the Core Oversight Group shall be prepared
by the Party hosting the meeting. Minutes will become official when agreed to by
all members of the Core Oversight Group. Each Party will bear all expenses
associated with attendance of its representatives at meetings. If the Core
Oversight Group members all agree, a meeting may be held by telephone.

 

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                         (d)     Decisions of the Core Oversight Group shall be
made by unanimous vote, with each member having one vote. If the Core Oversight
Group is unable to reach a unanimous vote on any issue, the issue shall be
referred to the Executive Committee for resolution.
                         (e)     Within fifteen (15) days after the receipt of a
proposed Product Development Plan or any amendments thereto from the Project
Working Team or referral of any matter on which the Project Working Team did not
reach consensus, the Core Oversight Group shall meet to consider the resolution
of such matter or recommending approval of such proposed Product Development
Plan or amendments to the Executive Committee, as applicable. The Core Oversight
Group shall also settle any disputes among the Project Working Team.
                         4.2.2 Executive Committee.
                         (a)     Within thirty (30) days after the Amendment
Effective Date, the Parties shall form an Executive Committee. The Executive
Committee shall operate and have the authority described in this Section 4.2,
including the general authority over the progress, budget and strategic
direction of the Product Development Plan, and shall have the further authority
over the progress, budget and strategic direction of the Project as described in
Article 3 of the Tech Transfer Agreement.
                         (b)     ACTII and Amylin shall each appoint two
(2) representatives as their representatives to serve on the Executive
Committee. A Party may change its representatives from time to time by giving
written notice to the other Party.
                         (c)     The Executive Committee shall generally meet at
such times as it may decide and at least twice per calendar year. The location
of Executive Committee meetings shall alternate between ACTII’s offices and
Amylin’s offices unless otherwise agreed by the Parties, with the first meeting
being held at Amylin’s office. Minutes of a meeting setting forth decisions of
the Executive Committee shall be prepared by the Party hosting the meeting.
Minutes will become official when agreed to by all members of the Executive
Committee. Each Party will bear all expenses associated with attendance of its
representatives at meetings. If the Executive Committee members all agree, a
meeting may be held by telephone.
                         (d)     Decisions of the Executive Committee shall be
made by unanimous vote, with each member having one vote. Except as otherwise
specifically set forth in Sections 3.3(a)(i) and (iii) of the Tech Transfer
Agreement, if the Executive Committee is unable to reach a unanimous vote on any
issue over which it has decision-making authority, the issue shall be referred
to Amylin’s Chief Executive Officer (or successor position), who shall make the
final decision regarding such issue.
                         (e)     Within fifteen (15) days after the receipt of a
proposed Product Development Plan or any amendments thereto from the Core
Oversight Group or referral of any dispute by the Core Oversight Group, the
Executive Committee shall meet to consider approval of such plan or amendments
or resolution of such dispute. The Executive Committee, or the Core Oversight
Group if and to the extent so designated by the Executive Committee, shall

 

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periodically review the Product Development Plan from a strategic perspective,
the status of efforts to implement it and shall make any changes to the Product
Development Plan that it deems necessary to accomplish the purpose of this
Agreement.”
               4.3     Subsections (c) and (d) to Section 4.3 of the Agreement
are hereby amended and restated in their entirety as follows:
                       “(c)     As a general principle, the Project Working Team
will use the RACI Task Analysis to agree to responsibilities, approvals,
consultations and information flow under the Product Development Plan. Except as
provided in the succeeding sentence of this paragraph, in the event that the
Project Working Team members do not reach consensus with respect to a matter
that is within the purview of the Project Working Team within fifteen (15) days
after the meeting in which they consider such matter, such matter may be
referred by either Party to the Core Oversight Group for resolution. Amylin’s
representatives on the Project Working Team shall have the sole right to
determine how to proceed with respect to any commercialization activity related
to a Product. No vote of the Project Working Team shall be taken unless a
majority of the members of the Project Working Team are present, including at
least one (1) representative of each Party. The Project Working Team shall keep
minutes of any meeting at which a decision is to be reached and shall circulate
such minutes to all members of the Project Working Team and the Core Oversight
Group. Responsibility for the preparation of the minutes shall rest with the
hosting party. Minutes shall be deemed approved unless any member of the Project
Working Team objects to the accuracy of such minutes within five (5) days of
receipt. A Party desiring to refer a matter on which consensus has not been
reached by the Project Working Team to the Core Oversight Group shall make its
referral in writing to all Core Oversight Group members within twenty (20) days
of the meeting at which the matter was considered. Action pursuant to any matter
referred to the Core Oversight Group shall be suspended pending a determination
by the Core Oversight Group or the referral of the matter to the Executive
Committee for resolution. A Party may at any time request reconsideration of any
issue if it in good faith believes that substantial changes in circumstances
have occurred that necessitate such reconsideration.
                         (d) (i)     The Project Working Team shall develop, and
present to the Core Oversight Group for consideration, a detailed development
plan to address fully, consistent with the terms of this Agreement, the key
elements reasonably necessary for the research, development, formulation, and
manufacture of Products through Regulatory Approval and the budgeted FTEs and
other expenses related to all work to be conducted under the development plan
(“Product Development Plan”). The Product Development Plan shall be based on an
initial product development plan, a first draft of which is attached as
Exhibit B to this Agreement. The product to be the subject of the initial
product development plan shall be Exenatide LAR. Should Amylin determine at any
time during the course of this Agreement that it wishes to develop and
commercialize an additional Field Product, or that it wishes to discontinue
development and commercialization of Exenatide LAR and instead develop and
commercialize a different Field Product, the Parties will negotiate in good
faith whether to develop such additional or different Field Product and, if so,
any appropriate alterations or additions to the provisions of this Agreement,
including but not limited to its financial provisions. In the event that Amylin
discontinues the development and commercialization of Exenatide LAR and the

 

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Parties are unable to agree upon the development of a different Field Product
within 180 days of such discontinuation, then this Agreement shall terminate as
if Amylin had terminated this Agreement under Section 9.2(b). The Project
Working Team shall be responsible for implementing the Product Development Plan,
addressing fully the appropriate strategy for development and Regulatory
Approval of a Product, developing the responsibilities and procedures for
handling any and all regulatory issues related to a Product and for addressing
all issues that develop during the course of implementing the Product
Development Plan. Such implementation efforts shall include: (A) establishing
comprehensive and detailed plans designed to accomplish the goals of the Product
Development Plan, including a plan pursuant to which ACTII will perform
technical and scientific work under this Agreement, (B) allocating tasks and
coordinating activities required to carry out the objectives of the Product
Development Plan, (C) monitoring progress of the Product Development Plan,
(D) monitoring the FTEs worked and expenditures made under the Product
Development Plan and (E) discharging such other obligations as are assigned to
the Project Working Team under this Agreement or by the Core Oversight Group.
                               (ii)     The Project Working Team may propose
modifications to the Product Development Plan to the Core Oversight Group for
its approval and recommendation to the Executive Committee. No modification may
be implemented unless approved by the Executive Committee or any authorized
designee.”
             4.4      Sections 4.4, 4.5 and 4.6 of the Agreement are hereby
amended and restated in their entirety as follows:
                     “4.4      Quarterly Reports. Within 30 days following the
end of each calendar quarter each Party shall provide the Core Oversight Group
and the Project Working Team with quarterly status reports summarizing its
research and development efforts under the Product Development Plan during such
quarter. This report shall include a general summary of important events and
milestones achieved, personnel changes, learning points and such other matters
as the Party believes are relevant or that the Core Oversight Group may request.
                     4.5      Governance Following Product Launch. As soon as
practicable following launch of the Product in a Major Market Country, the
Parties shall meet to review whether it is appropriate to continue the Product
Development Plan under the day-to-day management of the Project Working Team, or
whether the objectives of the Project Working Team have been substantially
achieved and it is appropriate to disband or reorganize the Project Working
Team. Regardless of whether the Parties elect to disband or reorganize the
Project Working Team, the Executive Committee shall continue to provide overall
direction to development of Products.
                     4.6      Other Working Teams. The Core Oversight Group and
Project Working Team, with the approval of the Core Oversight Group, may appoint
one or more other working teams (“Working Teams”) to perform such functions as
the Core Oversight Group or Project Working Team, as applicable, may determine.
Unless a Party elects not to participate on a particular Working Team, all
Working Teams shall have at least one representative of each

 

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Party. Working Teams may provide advice and make recommendations to the Project
Working Team, but shall have no authority to bind the Project Working Team or
either Party.”
5.                        FOUR-WEEK EXENATIDE LAR
          5.1     Section 6 of the Agreement is hereby amended and restated in
its entirety as follows:
         “6      Four-Week Exenatide LAR.
                  6.1     Manufacturing Agreement. In the event Amylin decides
to proceed with the development and commercialization of Four-Week Exenatide
LAR, then Amylin and ACTII shall proceed in accordance with Section 4.3(d)(i).
If the Parties negotiate a Four-Week Exenatide LAR Product Development Plan,
then ACTII shall have the option to be the exclusive manufacturer of Four-Week
Exenatide LAR for a period of [***] ([***]) [***] after the first commercial
sale in a Major Market Country of Four-Week Exenatide LAR, and, if ACTII
exercises this option, ACTII shall exclusively manufacture and supply Four-Week
Exenatide LAR, in the amounts and at such delivery times as required by Amylin,
its Affiliates, sublicensees and Co-Marketers. ACTII shall decide whether to
exercise this option prior to the commencement of Phase III Clinical Trials for
Four-Week Exenatide LAR. Upon ACTII’s exercise of this option and prior to the
commencement of Phase III Clinical Trials for Four-Week Exenatide LAR, or sooner
if agreed by Amylin and ACTII, the Parties shall negotiate in good faith and
enter into a manufacturing and supply agreement (the “Manufacturing Agreement”)
on the terms provided in this Section 6 and such other terms to be mutually
agreed upon, including but not limited to, provisions dealing with ACTII’s
responsibility to incur all capital expenditures necessary to develop
manufacturing capability for Four-Week Exenatide LAR (subject to the last
sentence of this Section 6.1), minimum purchase requirements for Four-Week
Exenatide LAR, forecasting of Amylin’s requirements for Four-Week Exenatide LAR,
delivery times and terms, rejection of Four-Week Exenatide LAR, recall of
Four-Week Exenatide LAR, inspection of ACTII’s manufacturing facilities,
indemnification, and Amylin’s and ACTII’s responsibilities with respect to
compliance with global governmental regulations and force majeure. The agreement
shall provide that Amylin will supply sufficient quantities of API for use in
the manufacture of Four-Week Exenatide LAR for commercialization at no cost to
ACTII. Under the agreement Amylin shall pay ACTII a transfer price equal to the
greater of (a) [***]% of Net Sales of Four-Week Exenatide LAR and (b) [***]
dollars ($[***]) for each dose of Four-Week Exenatide LAR. Such $[***] price
shall be adjusted annually by ACTII in accordance with the annual percentage
change in the Consumer Price Index (U.S. Bureau of Labor Statistics for all
urban consumers, U.S. City Average — all items less food and energy
(October 1999 equals 178.3 (Reference CUUR0000 SAOL1E)). The Parties shall also
negotiate in good faith provisions for inclusion in the agreement regarding
payment by Amylin to ACTII of some portion of the transfer price at the time of
shipment of Four-Week Exenatide LAR and quarterly reconciliation of the balance
of the transfer price owed on Net Sales of Four-Week Exenatide LAR. The
agreement shall also include provisions regarding the manufacturing options
provided to Amylin in Sections 6.2 and 6.3 below. In addition the agreement
shall include provisions regarding the reimbursement of ACTII by Amylin of any
costs and expenses ACTII has incurred to design, construct, commission or
validate any manufacturing facility, or portion thereof, including the

 

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purchase of equipment, to permit the manufacture of Four-Week Exenatide LAR in
the event that Amylin does not develop Four-Week Exenatide LAR and commercialize
it for a period of five (5) years after its first commercial sale in a Major
Market Country.
                  6.2     Failure to Supply. Should ACTII ever fail to supply
any or all of Amylin’s (as well as any Affiliate, sublicensee or Co-Marketer of
Amylin’s) needs for Four-Week Exenatide LAR to the extent Amylin has forecasted
such needs, ACTII shall have the first right to secure a third party to
manufacture that amount of Four-Week Exenatide LAR which ACTII has failed or
anticipates failing to supply. Such third party shall be approved by Amylin,
which approval may not be unreasonably withheld. In the event that ACTII is
unable to secure a third party manufacturer, or ACTII continues to fail to
supply all of Amylin’s (as well as any Affiliate, sublicensee or Co-Marketer of
Amylin’s) needs for Four-Week Exenatide LAR for more than [***] ([***]) [***],
Amylin may do any of the following: (i) elect to make nonexclusive the license
grant to ACTII with respect to Four-Week Exenatide LAR granted in accordance
with Section 6.1, above, (ii) terminate the Manufacturing Agreement with ACTII
for ACTII’s breach (should said breach be material), and (iii) either by itself
and/or by utilizing the services of a third party, manufacture and supply
Four-Week Exenatide LAR or components thereof (without an obligation to pay to
ACTII any transfer price payments on such Four-Week Exenatide LAR manufactured
by Amylin or such third party). Any Four-Week Exenatide LAR sold by Amylin, its
Affiliates, sublicensees or Co-Marketers under this Section 6.2 shall be subject
to the applicable royalty payment provided in Section 3.4, above.
                  6.3      Second Source. After the expiration of ACTII’s
manufacturing exclusivity period of [***] ([***]) [***], as described in
Section 6.1, above, Amylin may do any of the following: (i) elect to make
nonexclusive the license grant to ACTII with respect to Four-Week Exenatide LAR
granted in accordance with Section 6.1, above, or (ii) either by itself and/or
by utilizing the services of a third party, manufacture and supply Four-Week
Exenatide LAR or components thereof (without an obligation to pay to ACTII any
transfer price payments on such Four-Week Exenatide LAR manufactured by Amylin
or such third party). Any Four-Week Exenatide LAR sold by Amylin, its
Affiliates, sublicensees or Co-Marketers under this Section 6.3 shall be subject
to the applicable royalty payment provided in Section 3.4, above.
                  6.4     ACTII Cooperation. In the event Amylin exercises its
rights pursuant to Sections 6.2 or 6.3, above, to provide for manufacture of
Four-Week Exenatide LAR other than by ACTII, ACTII shall transfer to Amylin or a
third party, as appropriate, any ACTII Know-How required to enable Amylin or
such third party to manufacture Four-Week Exenatide LAR and provide such
assistance as is reasonably necessary to assist such manufacture and supply.
Amylin shall pay ACTII the FTE Hourly Rate for time spent by ACTII personnel in
such technology transfer.”
6.                          USE OF MATERIALS AND INFORMATION
          6.1     The following new section is hereby inserted at the end of
Section 8 of the Agreement:

 

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               “8.6     Disclosure to Collaboration Partner. Notwithstanding
anything to the contrary in this Agreement, Amylin may disclose the terms of
this Agreement and Confidential Information of ACTII to Lilly as necessary or
appropriate for the research, development or commercialization of Products;
provided that Lilly is subject to obligations of confidentiality comparable to
those contained herein.”
7.                          PROSECUTION AND MAINTENANCE OF PATENTS
          7.1     Subsections (a) and (b) of Section 10.2 of the Agreement are
hereby amended and restated in their entirety as follows:
                 “(a)     ACTII’s Obligations to Prosecute. ACTII shall file and
control prosecution and maintenance of patent applications for all ACTII
Patents, including ACTII Patents claiming Inventions owned by ACTII, and,
subject to consultation rights granted to Amylin in Section 10.2(b) below,
patents claiming Inventions owned jointly by ACTII and Amylin (“Joint
Inventions”) and be responsible for related interference proceedings in
accordance with reasonable commercial standards and reasonable principles of
intellectual property protection, all at ACTII’s expense. For prosecution and
maintenance of patents and patent applications claiming Joint Inventions, ACTII
shall use external counsel of its choosing, subject to the consent of the
General Counsel of Amylin, which consent shall not unreasonably be withheld.
ACTII shall endeavor to ensure that all ACTII Patents, and patents claiming
Joint Inventions are filed before any public disclosure of the inventions
claimed therein to maximize the scope of protection of such patents filed
outside the United States. ACTII shall furnish Amylin with copies of all
substantive communications between ACTII and applicable patent offices regarding
patents and patent applications claiming Inventions.
                 (b)     Consultation; No Disclosure by Amylin. ACTII and Amylin
shall discuss and evaluate Joint Inventions and confer with each other regarding
the advisability of filing patent applications in the United States and in
foreign countries to cover Joint Inventions. ACTII shall provide to Amylin
(i) draft patent applications, and (ii) draft official correspondence to
national or international patent authorities which purports to amend the scope
of the claims presented in the originally filed application, each to be provided
sufficiently in advance of filing for Amylin to have the opportunity to comment
thereon, and at least 30 days prior to the contemplated filing date whenever
possible. Any reasonable requests made by Amylin pertaining to such drafts shall
be reflected in such drafts, provided that Amylin provides such input to ACTII
sufficiently in advance of such proposed submission date to permit inclusion
therein. Amylin shall endeavor to delay any public disclosure of the subject
matter of any patent application filed or to be filed by ACTII under this
Agreement until after filing by ACTII of such patent application. Should the
respective patent counsel of ACTII and Amylin be unable to agree, within thirty
(30) days (or earlier if such time period might affect patentability) of a set
of claims being presented by one Party to the other, as to the inventorship of
any patent application claiming an Invention in which each Party claims its
employee or agent is an inventor, the Parties shall refer such dispute to a
neutral patent attorney or other appropriately qualified person mutually agreed
upon by the Parties. Such neutral third party shall be instructed to complete
his/her determination as to inventorship within thirty (30) days of referral of
the dispute (or earlier if such time period might affect patentability). Such
neutral third party’s determination

 

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regarding the referred issue shall be final and binding upon the Parties. The
Party whose position did not agree with the neutral third party’s determination
will pay the fees associated with such neutral third party decision, unless
neither Party’s position prevails in which case the Parties will share on a
50/50 basis the fees associated with such neutral third party’s decision.”
8.                           MISCELLANEOUS PROVISIONS
             8.1          Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to the principles of conflicts of laws.
             8.2          Entire Agreement. Except as specifically amended by
this Amendment, the Agreement shall remain in full force and effect. If there is
any inconsistency or conflict between any provision in this Amendment and any
provision in the Agreement, the provision in this Amendment shall control.
             8.3          Headings. Any headings and captions included herein
are for convenience of reference only and shall not be used to construe this
Amendment.
             8.4          Counterparts; Facsimile. This Amendment shall become
binding when any one or more counterparts hereof, individually or taken
together, shall bear the signature of each of the Parties hereto. This Amendment
may be executed in counterparts, each of which shall be an original as against
any Party whose signature appears thereon, but all of which together shall
constitute but one and the same instrument. This Amendment may be executed and
delivered by facsimile and upon such delivery the facsimile signature will be
deemed to have the same effect as if the original signature had been delivered
to the other Party.
             IN WITNESS WHEREOF, the Parties have duly executed and delivered
this AMENDMENT TO DEVELOPMENT AND LICENSE AGREEMENT as of the Amendment
Effective Date.

                  AMYLIN PHARMACEUTICALS, INC.   ALKERMES CONTROLLED
THERAPEUTICS INC. II    
 
               
By:
  /s/ Daniel M. Bradbury
 
  By:   /s/ Michael Landine
 
   
 
                Title: Chief Operating Officer   Title: Vice President,
Corporate
   
 
           Development    
 
 
 
     
 
   

 

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  Amylin Pharmaceuticals, Inc.   Tel (858) 552-2200
 
  9360 Towne Centre Drive   Fax (858) 552-2212
 
  San Diego, CA 92121 USA   www.amylin.com

July 13, 2006
Alkermes Controlled Therapeutics Inc. II
88 Sidney Street
Cambridge, MA 02139
Attn: Mike Landine
Dear Mr. Landine:
Amylin Pharmaceuticals, Inc. (“Amylin”) and Alkermes Controlled Therapeutics
Inc. II (“ACT II”) are parties to a Development and License Agreement effective
as of May 15, 2000, as amended (the “Development and License Agreement”),
pursuant to which the Parties are developing a synthetic exendin-4 long-acting
injectable product (“Exenatide LAR”) (capitalized terms used but not defined
herein shall have the meaning set forth in the Development and License
Agreement). The Parties now wish to amend the Development and License Agreement
to incorporate the following additional terms and conditions set forth in this
letter agreement (the “Letter Agreement”):
1.      In connection with the development of Exenatide LAR, Amylin and ACT II
have agreed to conduct a single species nonclinical carcinogenicity study, as
described in the March 16, 2006 meeting of the Core Oversight Group, which study
will have three arms - a diluent control arm, a placebo microsphere control arm
and an Exenatide LAR arm (the “Carcinogenicity Study”). In addition to its
existing obligations under the Development and License Agreement, ACT II has
agreed to supply Amylin solely for use in the Carcinogenicity Study and such
other studies as mutually agreed upon by both Parties, both placebo microspheres
(in the amount of either 240g or 1000g depending upon the final protocol(s) for
each of the Carcinogenicity Study and such other mutually agreed studies) and
diluent (in the amount of either 18.1L or 23.5L depending upon such final
protocol(s)). Amylin will compensate ACT II for the technical and scientific
time devoted to the production of these materials at the FTE Hourly Rate and
reimburse ACT II for any reasonable out-of-pocket expenses incurred in
connection with the supply of these materials. Payments to ACT II for the supply
of these materials shall be made within thirty days after receipt of invoices
therefor, and the provisions of Section 4.7(d) of the Development and License
Agreement regarding retention of records and audits by Amylin shall apply with
regard to payments under this Letter Agreement.
As additional consideration for ACT II’s supply of these materials, Amylin
agrees that ACT II will receive a separate report of any information, data
and/or results generated with respect to both the diluent control arm and the
placebo microsphere control arm of the Carcinogenicity Study as well as such
other information, data and/or results as may be mutually agreed upon by the
Parties in connection with any other studies mutually agreed upon by the Parties
(the “Data”). Amylin and ACT II agree that, subject to Section 8.3(c) of the
Development and License Agreement, ACT II has the right to use the Data for any
and all purposes, except the research, development and commercialization of a
Product prior to the termination of the Development and License Agreement. As
used in the prior sentence, the term “Product” means any Field Product the
manufacture, use, sale, offer for sale or import of which by a party, other than
one who has a right or license to the ACT II Patents, would infringe a Valid
Claim of any of the ACT II Patents. In addition Amylin agrees that ACT II will
have the right to review the final protocol for the Carcinogenicity Study, and
Amylin agrees to consider in

 

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good faith any comments suggested by ACT II with respect to such final protocol.
Amylin also agrees to furnish to ACT II copies of any proposed communications to
the FDA regarding the Carcinogenicity Study and to consider in good faith any
comments suggested by ACT II with respect thereto. Amylin will promptly inform
ACT II of any written or oral communications received from the FDA with respect
to the Carcinogenicity Study and provide to ACT II a copy of any such written
communications or notes of any such oral communications.
2.      Except as specifically amended herein, all provisions of the Development
and License Agreement shall remain in full force and effect in accordance with
their terms. In the event of a conflict between the provisions of the
Development and License Agreement and those of this Letter Agreement, this
Letter Agreement shall control. This Letter Agreement and the Development and
License Agreement constitute the entire agreement between the Parties regarding
the subject matter hereof, and supersede all prior understandings and
agreements, whether written or oral, regarding the subject matter hereof. No
amendment or modification of the terms and conditions of this Letter Agreement
shall be binding on either Party unless reduced to a writing referencing this
Letter Agreement and signed by an authorized officer of the Party to be bound.
3.      This Letter Agreement may be executed in two or more counterparts, each
of which shall be deemed an original for all purposes, but all of which together
shall constitute one and the same instrument. This Letter Agreement may be
executed and delivered by facsimile and upon such delivery the facsimile
signature will be deemed to have the same effect as if the original signature
had been delivered to the other Party.
4.      This Letter Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without giving effect to the principles
of conflict of laws.
If this Letter Agreement correctly sets forth our understanding, please sign in
the space provided below and return a copy of this Letter Agreement to me.
Sincerely yours,

          Amylin Pharmaceuticals, Inc.    
 
       
By:
  /s/ Lloyd A. Rowland
 
Lloyd A. Rowland
Vice President and General Counsel    
 
        Accepted and Agreed:    
 
        Alkermes Controlled Therapeutics Inc. II    
 
       
By:
  /s/ Michael Landine    
 
       
 
        Printed Name: Michael Landine     
 
        Title: Vice President      
 
        Date:7-17-06