Exhibit 10.1

***Text Omitted and Filed Separately with the Securities and Exchange

Commission. Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

Contract Number: 43031148

COLLABORATION AND LICENSE AGREEMENT

Dated June 16, 2010

BY AND BETWEEN

BOEHRINGER INGELHEIM INTERNATIONAL GmbH

AND

NEUROCRINE BIOSCIENCES, INC.

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TABLE OF CONTENTS

 

  ARTICLE ONE - DEFINITIONS

   8   1.1    “Affiliate”    8   1.2    “BI Confidential Information”    8   1.3
   “BI Materials”    8   1.4    “BI Patent Rights”    9   1.5    “BI Technology”
   9   1.6    “Change of Control”    9   1.7    “Collaboration”    9   1.8   
“Collaboration Patent Rights”    9   1.9    “Collaboration Products”    9   1.10
   “Collaboration Scope”    9   1.11    “Collaboration Technology”    9   1.12
   “Combination Product”    9   1.13    “Commercially Reasonable Efforts”    10
  1.14    “Co-Packaged Product”    10   1.15    “Confidential Information”    10
  1.16    “Controls” or “Controlled”    10   1.17    “Default”    10   1.18   
“Exclusive Period”    10   1.19    “EMA”    10   1.20    “Effective Date”    10
  1.21    “FDA”    10   1.22    “Field of Use”    10   1.23    “First Commercial
Sale”    10   1.24    “Force Majeure”    10   1.25    “FTE”    11   1.26   
“Generic Competition”    11   1.27    “Generic Product(s)”    11   1.28    “GLP
Toxicology Study”    11   1.29    “GPR119 Agonist Compounds”    11

 

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  1.30    “Indication”    11   1.31    “Invoice”    11   1.32    “Joint
Confidential Information”    11   1.33    “Joint Ownership” or “Jointly Owned”
or “Jointly Own”    12   1.34    “MAA”    12   1.35    “Major European Country”
   12   1.36    “Milestones”    12   1.37    “NDA”    12   1.38    “Net Sales”
   12   1.39    “Neurocrine Confidential Information”    13   1.40   
“Neurocrine Materials”    14   1.41    “Neurocrine Patent Rights”    14   1.42
   “Neurocrine Technology”    14   1.43    “Party”    14   1.44    “Patent
Rights”    14   1.45    “Person”    14   1.46    “Phase I”    14   1.47   
“Phase II”    14   1.48    “Phase III”    14   1.49    “Program Patent Rights”
   14   1.50    “Program Technology”    15   1.51    “Program Materials”    15  
1.52    “Regulatory Approval”    15   1.53    “Regulatory Filings”    15   1.54
   “Research Plan”    15   1.55    “Research Program”    15   1.56   
“Royalties”    15   1.57    “Start of Pre-Development”    15   1.58    “Steering
Committee”    15   1.59    “Technology”    15

 

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  1.60    “Territory”    15   1.61    “Third Party(ies)”    15   1.62    “Third
Party Royalties”    15   1.63    “Valid Claim”    16

  ARTICLE TWO - REPRESENTATIONS, WARRANTIES AND COVENANTS

   16   2.1    Mutual Representations and Warranties    16   2.2    Specific
Neurocrine Warranties    17   2.3    Specific BI Warranties    17   2.4    Use
of Technology    18   2.5    Exclusive Collaborative Effort    18   2.6   
Commercially Reasonable Efforts    18   2.7    Disclaimer    18

  ARTICLE THREE – LICENSES

   18   3.1    License Grant to BI    18   3.2    Neurocrine Retained Licenses
   18   3.3    Program Technology    19   3.4    Disclosure    19   3.5    Data
   19   3.6    Materials    19   3.7    Invention Assignment Agreements    20

  ARTICLE FOUR - STEERING COMMITTEE

   20   4.1    Creation; Authority    20   4.2    Responsibilities    20   4.3
   Meetings    20   4.4    Decisions of the Committee    20   4.5    Reporting
and Disclosure    21   4.6    Annual Reporting    21

  ARTICLE FIVE - RESEARCH PROGRAM

   21   5.1    Goals of the Collaboration    21   5.2    Research Program    21

 

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  5.3    Collaboration Product Development and Commercialization    23

  ARTICLE SIX - FEES, ROYALTIES AND MILESTONES

   23   6.1    Technology Access Fee    23   6.2    Royalties    23   6.3   
Royalty Adjustments    23   6.4    Term of Royalty    24   6.5    Reports and
Payments    24   6.6    Development Milestones    25   6.7    Sales Milestones
   26

  ARTICLE SEVEN - CONFIDENTIALITY, PUBLICATION AND PUBLIC ANNOUNCEMENTS

   27   7.1    Confidentiality    27   7.2    Authorized Disclosure    27   7.3
   Publications    28   7.4    Publicity    28  

ARTICLE EIGHT - INDEMNIFICATION

   29   8.1    Indemnification by BI    29   8.2    Indemnification by
Neurocrine    29   8.3    Procedure    29

  ARTICLE NINE - TERM AND TERMINATION

   30   9.1    Term    30   9.2    Termination for Convenience    30   9.3   
Termination for Cause    31   9.4    Effects of Termination    31   9.5   
Bankruptcy    32   9.6    Change of Control    33

  ARTICLE TEN - INTELLECTUAL PROPERTY

   33   10.1    Ownership, Filing, Prosecution and Maintenance    33   10.2   
Extension of Patent Rights    34   10.3    Interference, Opposition,
Reexamination and Reissue    34

 

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  10.4    Enforcement of Patent Rights    34   10.5    Paragraph IV Notices   
35   10.6    Infringement Defense    35   10.7    No Challenge    35   10.8   
Inventorship    35

  ARTICLE ELEVEN - MISCELLANEOUS

   35   11.1    Governing Law    35   11.2    Arbitration    35   11.3    Jury
Waiver    36   11.4    Assignment    36   11.5    Further Actions    37   11.6
   Force Majeure    37   11.7    Correspondence and Notices    37   11.8   
Amendment    38   11.9    Waiver    38   11.10    Counterparts    38   11.11   
Descriptive Headings    38   11.12    Severability    38   11.13    Entire
Agreement of the Parties    38   11.14    Independent Contractors    38   11.15
   No Trademark Rights    38   11.16    Accrued Rights; Surviving Obligations   
38   11.17    Export    39

 

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EXHIBIT INDEX

 

Exhibit A

 

[…***…]

Exhibit B

  Neurocrine Patent Rights

Exhibit C

  Research Plan

Exhibit D

  Invoice Requirements

Exhibit E

  Pre-Approved Announcement Regarding The Collaboration

 

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COLLABORATION AND LICENSE AGREEMENT

THIS COLLABORATION AND LICENSE AGREEMENT (this “Agreement”), dated as of
June 16, 2010, is made by and between Neurocrine Biosciences, Inc., 12780 El
Camino Real, San Diego, California, U.S.A. 92130 (“Neurocrine”) and Boehringer
Ingelheim International GmbH, Binger Strasse 173, 55216 Ingelheim am Rhein,
Germany (“BI”).

WHEREAS, BI is engaged in the research, development and commercialization of
human pharmaceutical products, […***…] the discovery and development of glucose
dependent insulin secretagogues including G-protein coupled receptor 119
(“GPR119”) agonists;

WHEREAS, Neurocrine is engaged in the research and development of human
pharmaceutical products, and is the owner of certain proprietary compounds,
information and know how relating to glucose dependant insulin secretagogues
including GPR119 and small molecule agonists thereto, which may be useful in the
discovery and development of human pharmaceutical products;

WHEREAS, BI and Neurocrine have agreed to collaborate, on the terms and
conditions set forth herein, in the research, development and commercialization
of GPR119 Agonist Compounds (as defined below);

NOW, THEREFORE, in consideration of the mutual representations, warranties and
covenants contained herein and other good and valuable consideration, the
Parties agree as follows:

ARTICLE ONE - DEFINITIONS

When used in this Agreement, each of the following terms shall have the meanings
set forth in this Article One. Any terms defined elsewhere in this Agreement
should be given equal weight and importance as though set forth in this Article
One.

 

1.1 “Affiliate” shall mean a Person that, directly or indirectly, through one or
more intermediates, controls, is controlled by, or is under common control with
the Person specified. For the purposes of this definition, control shall mean
the direct or indirect ownership of, (a) in the case of corporate entities,
securities authorized to cast more than fifty percent (50%) of the votes in any
election for directors or (b) in the case of non-corporate entities, more than
fifty percent (50%) ownership interest with the power to direct the management
and policies of such non-corporate entity. Notwithstanding the foregoing, the
term “Affiliate” shall not include subsidiaries in which a Party or its
Affiliates owns a majority of the ordinary voting power to elect a majority of
the board of directors, but is restricted from electing such majority by
contract or otherwise, until such time as such restrictions are no longer in
effect.

 

1.2 “BI Confidential Information” shall mean Confidential Information owned by
BI and/or its Affiliates or otherwise designated as BI Confidential Information
hereunder but shall not include Joint Confidential Information.

 

1.3 “BI Materials” shall mean BI proprietary research materials including, but
not limited to, assays, physical databases of chemical structures of compounds,
reagents and materials derived therefrom. BI Materials will not include Program
Materials or Collaboration Products. BI will own BI Materials supplied by BI to
Neurocrine hereunder.

 

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1.4 “BI Patent Rights” shall mean all Patent Rights filed or to be filed by BI
arising out of […***…] execution of this Agreement, and/or (b) the collaborative
Research Program with BI inventorship only.

 

1.5 “BI Technology” shall mean, all Technology (i) owned or Controlled by BI
and/or its Affiliates on the Effective Date or during the term of the Research
Program and relating to Collaboration Products and/or (ii) arising out of the
conduct solely by BI of the Research Program in each case as necessary or useful
to make, have made, use, sell, offer for sale, have sold and import
Collaboration Products including synthetic processes to produce Collaboration
Products and all related chemical and biological data. BI Technology shall
specifically include but not be limited to the BI Patent Rights. BI Technology
shall not include Program Technology.

 

1.6 “Change of Control” shall mean any of the following events (i) the
acquisition by any person or group or entity of “beneficial ownership” (as
hereinafter defined) directly or indirectly, of more than fifty percent (50%) of
the shares of Neurocrine’s capital stock or other voting securities, the holders
of which have general voting power under ordinary circumstances to elect at
least a majority of Neurocrine’s board of directors or equivalent body (the
“Voting Stock”); (ii) the approval by the shareholders of Neurocrine of a merger
share exchange, reorganization, consolidation or other similar transaction of
Neurocrine and the consummation of such transaction (a “Transaction”), other
than a Transaction which would result in the beneficial owners of Voting Stock
of Neurocrine immediately prior thereto continuing to beneficially own (either
by such voting Stock remaining outstanding or being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the Voting
Stock of Neurocrine or such surviving entity immediately after such Transaction;
or (iii) the approval by the shareholders of Neurocrine of a complete
liquidation or dissolution of Neurocrine or a sale or disposition of all or
substantially all of the assets of Neurocrine and the consummation of such
Transaction. For the purpose of this definition, “beneficial ownership” shall
mean ownership of a security by any person or group or entity who, directly or
indirectly, through any contract, arrangement, understanding, relationship, or
otherwise has or shares: (X) voting power which includes the power to vote, or
to direct the voting of, such security; and/or (Y) investment power which
includes the power to dispose or to direct the disposition of such security.
Change of Control shall not include any public offering of the shares of
Neurocrine.

 

1.7 “Collaboration” shall mean the research collaboration between BI and
Neurocrine pursuant to the terms and conditions of this Agreement.

 

1.8 “Collaboration Patent Rights” shall mean the BI Patent Rights, the
Neurocrine Patent Rights and the Program Patent Rights.

 

1.9 “Collaboration Products” shall mean all GPR119 Agonist Compounds encompassed
by the Collaboration Patent Rights.

 

1.10 “Collaboration Scope” shall mean the discovery, characterization,
optimization, research, development and commercialization of GPR119 Agonist
Compounds.

 

1.11 “Collaboration Technology” shall mean the Neurocrine Technology, BI
Technology and Program Technology and specifically shall include the
Collaboration Patent Rights.

 

1.12 “Combination Product” shall mean a pharmaceutical formulation containing as
its active ingredients both a Collaboration Product and one or more other
therapeutically active ingredients.

 

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1.13 “Commercially Reasonable Efforts” shall mean efforts and resources commonly
used in the pharmaceutical industry for a product at a similar stage in its
research, development, commercialization or product life and is of similar
market potential taking into account efficacy, safety, regulatory authority
approved labeling and pricing, the competitiveness of alternative products in
the marketplace, the patent and other proprietary position of the product, the
likelihood of Regulatory Approval given the regulatory structure involved, the
profitability of the product, and other relevant factors. Commercially
Reasonable Efforts shall be determined on a market-by-market and
country-by-country basis for a particular product, and it is anticipated that
the level of effort will change over time, reflecting changes in the status of
the Collaboration Product and the market involved.

 

1.14 “Co-Packaged Product” shall mean a single packaged product containing a
Collaboration Product and one or more other therapeutically, diagnostically or
prophylactically active products as separate components in a co-packaged form.

 

1.15 “Confidential Information” shall mean with respect to each Party and its
Affiliates, non-public proprietary data or information which belongs in whole or
in part to such Party and its Affiliates, and/or information designated as
Confidential Information of such Party and its Affiliates hereunder.

 

1.16 “Controls” or “Controlled” shall mean with respect to Technology, the
possession of the ability to grant licenses or sublicenses, other than pursuant
to this Agreement, without the payment of additional consideration or the
violation of the terms of any agreement or other arrangement with, or the rights
of, any Third Party.

 

1.17 “Default” shall mean with respect to a Party that (i) any representation or
warranty of such Party set forth herein shall have been untrue in any material
respect when made or (ii) such Party shall have failed to perform any material
obligation set forth in this Agreement.

 

1.18 “Exclusive Period” shall mean […***…].

 

1.19 “EMA” shall mean the European Medicines Agency or successor agencies.

 

1.20 “Effective Date” shall mean the date first written above.

 

1.21 “FDA” shall mean the Federal Food and Drug Administration of the United
States Department of Health and Human Services or any successor agency thereof.

 

1.22 “Field of Use” shall mean all uses, including, but not limited to,
therapeutic, prophylactic and diagnostic uses in humans and animals.

 

1.23 “First Commercial Sale” shall mean with respect to any Collaboration
Product holding Regulatory Approval for commercial sale, the first transfer by
BI, its Affiliates and/or its sublicensees of the Collaboration Product to a
Third Party in exchange for cash or some equivalent to which value can be
assigned.

 

1.24

“Force Majeure” shall mean any occurrence beyond the reasonable control of a
Party that prevents or substantially interferes with the performance by the
Party of any of its obligations hereunder, if such occurs by reason of any act
of God, flood, fire, explosion, earthquake, strike, lockout, labor dispute,
casualty or accident; or war, revolution, civil commotion, acts of public
enemies, blockage or embargo; or any injunction, law, order, proclamation,
regulation, ordinance,

 

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demand or requirement of any government or of any subdivision, authority or
representative of any such government; or breakdown of plant, inability to
procure or use materials, labor, equipment, transportation, or energy sufficient
to meet manufacturing needs without the necessity of allocation; or any other
cause whatsoever, whether similar or dissimilar to those above enumerated,
beyond the reasonable control of such Party, if and only if the Party affected
shall have used reasonable efforts to avoid such occurrence and to remedy it
promptly if it shall have occurred.

 

1.25 “FTE” shall mean a full time equivalent Neurocrine employee year consisting
of a total of […***…] per year of work on or directly related to the Research
Program.

 

1.26 “Generic Competition” means, on a country by country and Collaboration
Product by Collaboration Product basis, that the following conditions are met:
(x) one or more Third Parties is selling a Generic Product in a country during a
calendar quarter, and (y) […***…] of such Generic Product(s) sold in such
country by the Third Party(ies) in such calendar quarter is […***…] of
Collaboration Products sold in that country by BI, its Affiliates and
sublicensees. Unless otherwise agreed by the Parties,

  […***…] of each Generic Product sold during a calendar quarter shall be deemed
to be the volume of sales of the Generic Product in such country in that
calendar quarter as reported by IMS Health, Incorporated, of Fairfield,
Connecticut (together with its affiliates “IMS”) or any successor to IMS or any
other independent sales auditing firm reasonably agreed upon by the Parties.

 

1.27 “Generic Product(s)” shall mean and include products (other than
Collaboration Products developed and commercialized by BI pursuant to this
Agreement) that contain principally the same active pharmaceutical ingredient as
a Collaboration Product.

 

1.28 “GLP Toxicology Study” means a toxicological study of twenty eight
(28) days or greater duration enabling the performance of first clinical studies
in humans as stipulated in ICH guideline M3(R2), performed under current GLP
regulations.

 

1.29 “GPR119 Agonist Compounds” shall mean compounds that (i) stimulate the
human GPR119 receptor activity with […***…].

 

1.30 “Indication” shall mean an individual disease or clinical condition with
respect to which at least one adequate and well–controlled clinical study is
required to support inclusion of such disease or condition in the indication
statement of the package insert of a product approved for marketing and
commercialization. For avoidance of doubt, a label enhancement or elaboration or
expansion of an approved Indication is not a separate Indication even if one or
more studies are performed to receive such enhancement or expansion.

 

1.31 “Invoice” means an original invoice sent by Neurocrine to BI as specified
in Exhibit D.

 

1.32 “Joint Confidential Information” shall mean Confidential Information
Jointly Owned by BI and Neurocrine or otherwise designated as Joint Confidential
Information hereunder.

 

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1.33 “Joint Ownership” or “Jointly Owned” or “Jointly Own” shall mean that every
Party shall own fifty percent (50%) undivided interest. Except as expressly
provided in this Agreement and subject to any restrictions herein, with respect
to Collaboration Patent Rights each joint owner may only assign, license, sell
or otherwise encumber or transfer any such interest with the prior written
approval of the other Party, which shall not be unreasonably withheld. Any such
approved assignment, license or other disposition of Collaboration Technology
Patent Rights shall at all times be and remain subject to the rights granted and
accompanying conditions and obligations with respect thereto under this
Agreement. Each Party waives the right it may have under any jurisdiction to
assign, license, sell or otherwise encumber or transfer any such interest in
Collaboration Technology Patent Rights without consent of the other Party.

 

1.34 “MAA” shall mean a Marketing Authorization Application covering a
Collaboration Product, filed with the European Medicines Agency.

 

1.35 “Major European Country” shall mean the United Kingdom, Germany, Spain,
Italy or France.

 

1.36 “Milestones” shall mean the payments to be made upon occurrence of certain
events as set forth in Article Six of this Agreement.

 

1.37 “NDA” shall mean a New Drug Application covering a Collaboration Product
filed with the FDA pursuant to 21 CFR 314 required for marketing approval of a
pharmaceutical product.

 

1.38 “Net Sales” shall mean the gross receipts from sales of Collaboration
Products in the Territory by BI, its Affiliates or sublicensees (“the Selling
Party”) to Third Parties in the Territory less deductions actually allowed,
granted, accrued or specifically allocated to Collaboration Product by the
Selling Party using generally accepted accounting standards for:

 

  (a) packing, handling and transportation charges not already covered in the
cost of goods sold, including insurance, for transporting Collaboration Product;

 

  (b) sales and excise taxes, use taxes, tariffs and import/export duties paid
or allowed by the Selling Party and any other governmental charges imposed upon
the production, importation, use or sale of such Collaboration Product,
including value-added taxes;

 

  (c) any adjustments arising from consumer discount programs or other similar
programs, and any rebates, chargeback rebates, compulsory rebates, trade,
quantity and cash discounts (including non-discretionary early settlement
discounts), and other usual and customary discounts to customers allowed on
Collaboration Product;

 

  (d) allowances or credits to customers on account of rejection or return of
Collaboration Product, including but not limited to recalls or damaged goods;

 

  (e) allowances or credits to customers on account of retroactive price
reductions affecting such Collaboration Product;

 

  (f) Collaboration Product rebates and Collaboration Product charge backs
including those granted to managed care entities and government agencies, their
respective purchasers, or reimbursers, including any mandatory rebates;

 

  (g) deductions for actual bad debts to the extent relating to the
Collaboration Product; and

 

  (h) discounts or rebates applied on bundle or sales package containing the
Collaboration Product consistent with BI’s practices for its other products.

Sales between BI, its Affiliates and/or its/their sublicensees shall be excluded
from the computation of Net Sales and no payments will be payable on such sales
except where such Affiliates or sublicensees are end users but Net Sales shall
include the subsequent final sales to Third Parties by such Affiliates or
sublicensees.

 

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In the event a Collaboration Product is sold as a Combination Product or
Co-Packaged Product, Net Sales of the Combination Product or Co-Packaged Product
will be calculated as follows:

 

  (a) If the Combination Product or Co-Packaged Product, the Collaboration
Product and the other product are sold separately, Net Sales of the
Collaboration Product portion of Combination Products and Co-Packaged Products
will be calculated by multiplying the total Net Sales of the Combination Product
or Co-Packaged Product by the fraction A/(A+B), where A is the average gross
selling price in the applicable country in the Territory of the Collaboration
Product sold separately in the same formulation and dosage, and B is the sum of
the average gross selling prices in the applicable country in the Territory of
all other therapeutically, diagnostically or prophylactically active ingredients
or products in the Combination Product or Co-Packaged Product sold separately in
the same formulation and dosage, during the applicable calendar quarter.

 

  (b) If the Combination Product or the Co-Packaged Product and the
Collaboration Product are sold separately, but the average gross selling price
of the other product(s) cannot be determined, Net Sales of the Combination
Product or the Co-Packaged Product shall be equal to the Net Sales of the
Combination Product or Co-Packaged Product multiplied by the fraction A/C
wherein A is the average gross selling price of the Collaboration Product and C
is the average gross selling price of the Combination Product or Co-Packaged
Product.

 

  (c) If the Combination Product or the Co-Packaged Product and the other
product(s) are sold separately, but the average gross selling price of the
Collaboration Product cannot be determined, Net Sales of the Combination Product
and/or Co-Packaged Product shall be equal to the Net Sales of the Combination
Product and/or Co-Packaged Product multiplied by the following formula: one
(1) minus B/C wherein B is the average gross selling price of the other
product(s) and C is the average gross selling price of the Combination Product
and/or Co-Packaged Product.

 

  (d) If the Combination Product or Co-Packaged Product are sold separately, but
the average gross selling price of neither the Collaboration Product nor the
other product(s) can be determined, Net Sales of the Combination Product or
Co-Packaged Product shall be equal to Net Sales of the Combination Product or
Co-Packaged Product multiplied by a mutually agreed percentage.

The average gross selling price for such other product(s) contained in the
Combination Product or Co-Packaged Product shall be calculated for each calendar
year by dividing the sales amount by the units of such other product(s), as
published by IMS or another mutually agreed independent source.

In the initial calendar year during which a Combination Product or Co-Packaged
Product is sold, a forecasted average gross selling price shall be used for the
Collaboration Product, other product(s), or Combination Product and/or
Co-Packaged Product. Any over or under payment due to a difference between
forecasted and actual average gross selling prices shall be paid or credited in
the second royalty payment of the following calendar year. In the following
calendar year the average gross selling price of the previous year shall apply
from the second royalty payment on.

 

1.39 “Neurocrine Confidential Information” shall mean Confidential Information
owned by Neurocrine or otherwise designated as Neurocrine Confidential
Information hereunder but shall not include Joint Confidential Information.

 

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1.40 “Neurocrine Materials” shall mean Neurocrine proprietary research materials
including, but not limited to, assays, physical databases of chemical structures
of compounds, reagents and materials derived therefrom. Neurocrine Materials
will not include Program Materials or Collaboration Products. Neurocrine will
own Neurocrine Materials supplied by Neurocrine to BI hereunder.

 

1.41 “Neurocrine Patent Rights” shall mean all Patent Rights filed or to be
filed by Neurocrine arising out of […***…] (b) the collaborative Research
Program with Neurocrine inventorship only.

 

1.42 “Neurocrine Technology” shall mean all Technology (i) owned or Controlled
by Neurocrine on the Effective Date or during the term of the Research Program
relating to Collaboration Products and/or (ii) arising out of the conduct solely
by Neurocrine of the Research Program in each case as necessary or useful to
make, have made, use, sell, offer for sale, have sold and import Collaboration
Products including synthetic processes to produce Collaboration Products and all
related chemical and biological data. Neurocrine Technology shall specifically
include but not be limited to the Neurocrine Patent Rights. Neurocrine
Technology shall not include Program Technology.

 

1.43 “Party” shall mean BI or Neurocrine, as the case may be, and their
respective Affiliates and “Parties” shall mean BI and Neurocrine and their
respective Affiliates.

 

1.44 “Patent Rights” shall mean the rights and interests in and to all issued
patents and pending patent applications in any country, including, without
limitation, all provisional applications, substitutions, continuations,
continuations-in-part, divisions, and renewals, all letters patent granted
thereon, and all patents-of-addition, reissues, reexaminations and extensions or
restorations by existing or future extension or restoration mechanisms,
including, without limitation Supplementary Protection Certificates or the
equivalent thereof.

 

1.45 “Person” shall mean any individual, firm, corporation, partnership, limited
liability company, trust, unincorporated organization or other entity or a
government agency or political subdivision thereto, and shall include any
successor (by merger or otherwise) of such Person.

 

1.46 “Phase I” in the United States means a human clinical trial that meets the
requirements of 21 CFR 312.21(a) designed to provide evidence of safety and
tolerability, metabolism and pharmacological activity, adverse experience with
increasing doses and, possibly, early evidence of efficacy of a Product. Any
clinical study in healthy volunteers is a Phase I study. Phase I in EU and Japan
means studies that meet with these regulatory bodies’ requirements for similar
types of studies.

 

1.47 “Phase II” in the United States means a human clinical trial that meets the
requirements of 21 CFR 312.21(b) designed to explore the dose relationship of a
Product against some clinical efficacy measure for an Indication in patients
with the disease or condition under study. Phase II in EU and Japan means
studies that meet with these regulatory bodies’ requirements for similar types
of studies.

 

1.48 “Phase III” in the United States means a pivotal human clinical trial that
meets the requirements of 21 CFR 312.21(c) designed to generate the information
about effectiveness and safety needed to evaluate the over-all benefit-risk
relationship of a Product and provide adequate basis for Regulatory Approval for
marketing a Product. Phase III in EU and Japan means studies that meet with
these regulatory bodies’ requirements for similar types of studies.

 

1.49

“Program Patent Rights” shall mean the Patent Rights claiming inventions and
discoveries arising from the […***…]. “Program Patent Rights” shall include
Patent Rights from any patent

 

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application filed by either Party which relates to an invention arising from
[…***…] where it is determined that in respect of subsequent subject matter
included in such application […***…] as a result of relevant work conducted
[…***…]

 

1.50 “Program Technology” shall mean Technology, which is discovered or invented
jointly by Neurocrine personnel and BI personnel as a result of the
Collaboration.

 

1.51 “Program Materials” shall mean and include clones, cell lines, assays,
databases, electronic and physical databases of chemical structures, which, in
each case, are developed, by Neurocrine and/or BI during the course of conduct
of the Research Program. Program Materials will not include Collaboration
Products.

 

1.52 “Regulatory Approval” shall mean the technical, medical and scientific
licenses, registrations, authorizations and approvals (including, without
limitation, approvals of Investigational Drug Applications, New Drug
Applications and equivalents, supplements and amendments, pre- and post-
approvals, pricing and third party reimbursement approvals, and labeling
approvals) of any national, supra-national, regional, state or local regulatory
agency, department, bureau, commission, council or other governmental entity,
necessary for the development, manufacture, distribution, marketing, promotion,
offer for sale, use, import, export or sale of Collaboration Product(s) in a
regulatory jurisdiction.

 

1.53 “Regulatory Filings” shall mean, collectively, Investigational New Drug
Applications, Product License Applications, Drug Master Files, NDAs and/or any
other equivalent or comparable filings as may be required by Regulatory
Authorities to obtain Regulatory Approvals.

 

1.54 “Research Plan” shall mean the collaborative research plan as described in
Section 5.2(c).

 

1.55 “Research Program” shall mean the GPR119 collaborative research program
conducted by Neurocrine and BI in accordance with the provisions of Article Five
hereof.

 

1.56 “Royalties” shall mean those royalties payable pursuant to Article Six of
this Agreement.

 

1.57 “Start of Pre-Development”, shall mean when a GPR119 Agonist Compound
subject to the Collaboration Patent Rights

  […***…].

 

1.58 “Steering Committee” shall have the meaning set forth in Article Four
hereof.

 

1.59 “Technology” shall mean proprietary data, information and all intellectual
property, including but not limited to, trade secrets, know-how, inventions and
technology, whether patentable or not, and Patent Rights directed to products,
processes, formulations and/or methods but which term shall specifically exclude
copyright and all registered and unregistered trademarks.

 

1.60 “Territory” shall mean the world.

 

1.61 “Third Party(ies)” shall mean any Person other than Neurocrine, BI and
their respective Affiliates.

 

1.62 “Third Party Royalties” shall mean royalties payable by Neurocrine, BI, its
Affiliates or sublicensees to a Third Party (or multiple Third Parties) to make,
have made, use, sell, offer for sale or import Collaboration Products where the
royalty payable to such Third Party is based on Patent Rights owned or
Controlled by such Third Party.

 

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1.63 “Valid Claim” shall mean (a) a claim in an issued patent that has not:
(i) expired or been canceled; (ii) been declared invalid by an unreversed and
unappealable or unappealed decision of a court or other appropriate body of
competent jurisdiction; (iii) been admitted to be invalid or unenforceable
through reissue, disclaimer or otherwise, or (iv) been abandoned in accordance
with or as permitted by the terms of this Agreement or by mutual written
agreement of the Parties; or […***…] and which has not been canceled, withdrawn
from consideration, finally determined to be unallowable by the applicable
governmental authority or court for whatever reason (and from which no appeal is
or can be taken), or abandoned.

ARTICLE TWO - REPRESENTATIONS, WARRANTIES AND COVENANTS

 

2.1 Mutual Representations and Warranties. Each Party hereby represents,
warrants and covenants to the other Party that:

 

  (a) the execution, delivery to the other Party and performance by it of this
Agreement and its compliance with the terms and provisions of this Agreement
does not and will not conflict, in any material respect, with or result in a
breach of any of the terms or provisions of (i) any other contractual
obligations of such Party, (ii) the provisions of its charter, operating
documents or bylaws, or (iii) any order, writ, injunction or decree of any court
or governmental authority entered against it or by which it or any of its
property is bound except where such breach or conflict would not materially
impact the Party’s ability to meet its obligations hereunder;

 

  (b) this Agreement is a legal and valid obligation binding upon such Party and
enforceable in accordance with its terms except as (i) enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium, or similar laws
affecting the enforcement of creditors’ rights and (ii) equitable principles of
general applicability;

 

  (c) such Party is a corporation duly organized, validly existing and in good
standing under the laws of the state or other jurisdiction of incorporation or
formation and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof except where failure to be in
good standing would not materially impact the Party’s ability to meet its
obligations hereunder;

 

  (d) such Party is duly authorized, by all requisite corporate action, to
execute and deliver this Agreement and the execution, delivery and with respect
to Neurocrine the performance of this Agreement by Neurocrine does not require
shareholder action or approval and with respect to BI the performance of this
Agreement by BI has been approved by all necessary shareholder action, and the
Person executing this Agreement on behalf of such Party is duly authorized to do
so by all requisite corporate action; and

 

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  (e) no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority is required on the part of such Party in connection
with the valid execution, delivery and performance of this Agreement, except for
any filings under any applicable securities laws and except where the failure to
obtain any of the foregoing would not have a material adverse impact on the
ability of such Party to meets its obligations hereunder.

 

2.2 Specific Neurocrine Warranties. Neurocrine warrants and represents to BI
that as of the Effective Date:

 

  (a) it has the full right, power and authority to grant the licenses granted
to BI under Article Three hereof;

 

  (b) all Patent Rights included within the Neurocrine Technology are existing
and, to its knowledge, are not invalid or unenforceable, in whole or in part;

 

  (c) (i) it is the sole and exclusive owner or the exclusive licensee of the
Neurocrine Technology, including, without limitation, all Patent Rights included
therein, and (ii), to its knowledge, no Person has any right, title or interest
in or to the Neurocrine Technology;

 

  (d) all inventors (who are known as of the date this Agreement is signed by
each of the Parties) of any inventions included within the Neurocrine Technology
have assigned their entire right, title and interest in and to such inventions
and the corresponding Patent Rights to Neurocrine; and

 

  (e) there are no claims, judgments or settlements against or owed by
Neurocrine or, to its knowledge, pending or threatened claims or litigation
relating to the Neurocrine Technology.

 

2.3 Specific BI Warranties. BI warrants and represents to Neurocrine that as of
the Effective Date:

 

  (a) it has the full right, power and authority to grant the licenses granted
to Neurocrine under Articles Three and, if granted, under Article Nine, hereof;

 

  (b) all Patent Rights included within the BI Technology are existing and, to
its knowledge, are not invalid or unenforceable, in whole or in part;

 

  (c) (i) it is the sole and exclusive owner or the exclusive licensee of the BI
Technology, including, without limitation, all Patent Rights included therein,
and (ii), to its knowledge, no Person has any right, title or interest in or to
the BI Technology;

 

  (d) all inventors (who are known as of the date this Agreement is signed by
each of the Parties) of any inventions included within the BI Technology have
assigned their entire right, title and interest in and to such inventions and
the corresponding Patent Rights to BI; and

 

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  (e) there are no claims, judgments or settlements against or owed by BI or, to
its knowledge, pending or threatened claims or litigation relating to the BI
Technology.

 

2.4 Use of Technology. Neurocrine warrants that it will not use the BI
Technology unless specifically licensed hereunder. BI warrants that it will not
use the Neurocrine Technology unless specifically licensed hereunder.

 

2.5 Exclusive Collaborative Effort. Subject to […***…] rights hereunder, and
except where the Parties shall determine otherwise (in which event such work
shall be considered part of this Collaboration), Neurocrine and BI will each
work exclusively with one another and will not […***…] during the Exclusive
Period. For avoidance of doubt and subject to the licenses granted in this
Agreement, during the term of the Research Program, […***…], excluding any
[…***…], and further excluding any
[…***…], for all purposes outside the […***…]. For further avoidance of doubt,
it shall be deemed no violation of this Section 2.5, if any Party may in their
discovery, characterization, optimization, research, development and
commercialization of compounds […***…], make, use or sell compounds […***…].
During the term of the Research Program, each Party shall
[…***…] as soon as such […***…] is reasonable from a standpoint of a […***…].
Once a compound is identified as
[…***…] such compound will, if the compound (i) […***…] and (ii) is not within
[…***…] as the case may be, become part of the Collaboration Technology […***…].

 

2.6 Commercially Reasonable Efforts. Neurocrine and BI shall each use
Commercially Reasonable Efforts to perform their respective obligations under
the Research Program and meet the goals of the Collaboration.

 

2.7 Disclaimer. EXCEPT AS EXPRESSLY PROVIDED HEREIN EACH PARTY MAKES NO OTHER
REPRESENTATION OR WARRANTY, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE WITH RESPECT TO ANY MATERIALS, INCLUDING WITHOUT LIMITATION BI
TECHNOLOGY AND NEUROCRINE TECHNOLOGY. ADDITIONALLY, EXCEPT AS EXPRESSLY SET
FORTH IN SECTION 2.2, NEUROCRINE MAKES NO REPRESENTATION OR WARRANTY, EITHER
EXPRESS OR IMPLIED, THAT THE MANUFACTURE, USE OR SALE OF ANY COLLABORATION
PRODUCT WILL NOT INFRINGE THE INTELLECTUAL PROPERTY RIGHTS OF ANY THIRD PARTY.

ARTICLE THREE - LICENSES

 

3.1 License Grant to BI. Neurocrine hereby grants to BI the sole and exclusive
right and license, with the right to sublicense, under Neurocrine’s right title
and interest in the Collaboration Technology (including the Neurocrine
Technology and Neurocrine’s interest in any Program Technology), to research,
develop, make, have made, register, use, sell, offer for sale, have sold and
import Collaboration Products in the Field of Use in the Territory.

 

3.2 Neurocrine Retained Licenses. The exclusive licenses granted to BI in
Section 3.1 above, shall be subject to the retention by Neurocrine or grant to
Neurocrine as the case may be of a nonexclusive royalty free, worldwide right
and license, to use the Neurocrine Technology and Program Technology for
research purposes […***…] in all cases subject to Section 2.5 and provided that
Neurocrine will not have a license to use the […***…] for research purposes
[…***…]. Notwithstanding the foregoing upon BI’s payment to Neurocrine of the
[…***…] for a Collaboration Product, or any subsequent achievement of the
[…***…] where no payments are due Neurocrine, […***…].

 

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3.3 Program Technology. Except as otherwise set forth in Section 3.2 and 3.5,
the Program Technology will be […***…]. For the avoidance of doubt […***…].
Pursuant to the exclusive license granted to BI in Section 3.1 BI will have the
exclusive right and license under the Program Technology and under the Program
Patent Rights to research, develop, make, have made, register, use, offer to
sell, import, or export Collaboration Products in the Field of Use in the
Territory. Subject to the licenses granted under this Agreement, BI and
Neurocrine will each have the right under the Program Technology to research,
develop, make, have made, register, use, offer to sell, import, or export
products […***…]. Upon expiration of the Exclusive Period and subject to the
licenses granted under this Agreement and Section 3.2, […***…]. For avoidance of
doubt, each Party will have the right to […***…] as set forth herein […***…]
exclusive licenses granted to BI in Section 3.1 above […***…] as described in
Section 3.2 and 3.3.

 

3.4 Disclosure. During the term of this Agreement, the Parties will as promptly
as practicably possible disclose to one another all data, information,
inventions, techniques and discoveries (whether patentable or not) arising out
of the conduct of the Research Program and all inventions, techniques and
discoveries (whether patentable or not) included in the Technology licensed
hereunder.

 

3.5 Data. Subject to the licenses retained and granted herein, all data and
information arising out of the Research Program will be owned by BI and will be
BI Confidential Information.

 

3.6 Materials.

 

  (a) Program Materials. During the term of this Agreement, upon request by
either Party, the Party to whom the request is made will promptly provide to the
other Party such quantities of Program Materials as shall be reasonably
available in excess of its own needs for such other Party to carry out its
respective responsibilities under this Agreement. Subject to the licenses set
forth in this Article Three, each Party may use the Program Materials created or
developed by such Party for any purpose.

 

  (b) Neurocrine Materials. During the term of this Agreement, Neurocrine will
promptly supply to BI Neurocrine Materials reasonably (both in quantity and
identity) requested by BI provided (i) such Neurocrine Materials are reasonably
and readily available to Neurocrine in excess of Neurocrine’s own requirements,
and (ii) supply of such Neurocrine Materials will not, in Neurocrine’s sole
judgment, (A) conflict with Neurocrine’s internal or collaborative research
programs, (B) conflict with Neurocrine’s internal policies regarding such
materials or (C) violate any agreement to which Neurocrine is a party. Any
Neurocrine Materials provided to BI hereunder together with materials derived
therefrom (i) may only be used by BI and BI’s permitted sublicensees in the
conduct of the Research Program and/or in the discovery and/or development of
Collaboration Products, (ii) may not be supplied to Third Parties, other than
Third Parties that, with the approval of the Steering Committee, are under
contract with one of the Parties to perform services in support of the Research
Program, without Neurocrine’s prior written consent which can be withheld for
any reason in Neurocrine’s sole discretion and (iii) will, at Neurocrine’s
option and at Neurocrine’s request be returned to Neurocrine or destroyed. The
provision of Neurocrine Materials hereunder will not constitute any grant,
option or license under any Neurocrine Patent Rights, except as expressly set
forth herein.

 

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  (c) BI Materials. During the term of this Agreement, BI will promptly supply
to Neurocrine BI Materials reasonably (both in quantity and identity) requested
by Neurocrine pursuant to the carrying out of its obligations under the Research
Program provided (i) such BI Materials are reasonably and readily available to
BI in excess of BI’s own requirements, and (ii) supply of such BI Materials will
not, in BI’s sole judgment, (A) conflict with BI’s internal or collaborative
research programs, (B) conflict with BI’s internal policies regarding such
materials or (C) violate any agreement to which BI is a party. Any BI Materials
provided to Neurocrine hereunder together with materials derived therefrom
(i) may only be used by Neurocrine in the conduct of the Research Program,
(ii) may not be supplied to Third Parties, other than Third Parties that, with
the approval of the Steering Committee, are under contract with one of the
Parties to perform services in support of the Research Program, without BI’s
prior written consent which can be withheld for any reason in BI’s sole
discretion and (iii) will, at BI’s option and at BI’s request be returned to BI
or destroyed. The provision of BI Materials hereunder will not constitute any
grant, option or license under any BI Patent Rights, except as expressly set
forth herein.

 

3.7 Invention Assignment Agreements. All Neurocrine and BI personnel involved
with and conducting activities subject to and under the Research Program will
have executed Neurocrine’s or BI’s, as the case may be, standard non-disclosure
and invention assignment agreement.

ARTICLE FOUR - STEERING COMMITTEE

 

4.1 Creation; Authority. Within […***…] of the Effective Date, Neurocrine and BI
will form a Steering Committee to oversee, review and co-ordinate the Research
Program. The Steering Committee will consist of three (3) each of BI and
Neurocrine representatives. Upon termination or expiration of the Research
Program, the Steering Committee will be disbanded. At any time during this
Agreement, […***…] for the Collaboration but all other terms and obligations set
forth herein will remain in full force and effect. […***…].

 

4.2 Responsibilities. The Steering Committee will be responsible for:
(i) overseeing the activities of the Parties under the Research Program
including without limitation monitoring its progress, (ii) reviewing and
amending the Research Program, Research Plan, budgets, and generally
coordinating activities; (iii) establishing, as necessary or appropriate,
additional joint subcommittees and delegate responsibilities to such joint
subcommittees; and (iv) considering and acting upon such other matters that fall
within the scope of the Research Program and associated activities.

 

4.3 Meetings. The Steering Committee shall meet no less frequently than
quarterly. Steering Committee meetings may be by teleconference or by
videoconference as well as in person, with at least one face-to-face meeting per
annum, the location of such face-to-face meeting to alternate between Biberach,
Germany, or such other location that BI should designate, and San Diego,
California, or such other location as Neurocrine should designate. Each Party
shall be responsible for expenses incurred by its employees and its members of
the Steering Committee incurred in attending or otherwise participating in
Steering Committee meetings.

 

4.4

Decisions of the Committee. All decisions of the Steering Committee shall be
made in good faith, be in the best interests of the Collaboration to further the
goals of the Collaboration and Research Program, and shall be made unanimously.
Each Party, through its representative members of the Steering Committee, shall
collectively have one vote for decision making purposes. In the event the
Steering Committee shall be unable to reach an unanimous decision on any matter,
the matter

 

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shall be submitted to the Vice President Research of Neurocrine and the Senior
Vice President Research of BI (collectively the “Party Executives”) for
discussion in good faith based on the goals of the Collaboration. If the Party
Executives cannot agree within […***…] of the matter having been referred to
them, […***…].

 

4.5 Reporting and Disclosure.

 

  (a) Reports. Prior to each quarterly meeting of the Steering Committee, the
Parties will distribute to each other written copies of all materials intended
to be submitted at the Steering Committee meeting. In the event that after
receipt of any such report, either Party shall request additional data or
information relating to the Research Program data or Technology licensed
hereunder, the Party to whom such request is made shall promptly provide to the
other Party such data or information that such Party reasonably believes is
necessary for the continued conduct of the Research Program.

 

  (b) Meetings. At the meetings of the Steering Committee, BI and Neurocrine
will, among other activities, review in reasonable detail (i) all data and
information generated in the conduct of the Research Programs by each Party and
(ii) all Program Technology licensed hereunder developed by the Parties.

 

4.6 Annual Reporting. Following termination or expiration of the Research
Program, for the term of this Agreement, BI will provide Neurocrine with annual
reports each year within […***…] summarizing BI’s progress during the previous
calendar year toward research, development and commercialization of
Collaboration Products.

ARTICLE FIVE - RESEARCH PROGRAM

 

5.1 Goals of the Collaboration. The goals of the Collaboration, expressed herein
as an intent (rather than creating any express or implied liability on the part
of either Party), shall be to […***…] research and discovery of GPR119 Agonist
Compounds for the treatment of Type 2 Diabetes and related metabolic diseases.
It is a further goal of the Collaboration to provide to BI a Collaboration
Product that is […***…] treatment of Type 2 Diabetes.

 

5.2 Research Program. Under the terms and conditions set forth herein, BI and
Neurocrine will collaborate in the conduct of a collaborative research program,
in accordance with the Research Plan, to discover, identify, characterize,
optimize, and research GPR119 Agonist Compounds.

 

  (a) Term. The initial term of the Research Program will be […***…] from the
Effective Date. BI may unilaterally, in its sole discretion, decide to extend
the term of the Research Program by […***…]. To give effect to the foregoing,

  […***…], BI shall provide notice and inform Neurocrine whether BI is electing
to extend the Research Program
[…***…]. Unless otherwise agreed by the Parties, the extension of the Research
Program for […***…] as set forth in subsection (d) below.

 

  (b) Goals. The goal of the Research Program will be to […***…], such that BI,
at its sole discretion, may […***…].

 

  (c)

Research Plan. The initial […***…] Research Plan is attached hereto as Exhibit
C. The Research Plan will be updated on an annual basis by the Steering
Committee, and more

 

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frequently if the Steering Committee determines it is necessary to carry out its
responsibilities under section 4.2. The Research Plan will specifically include
detailed plans for the following year including staffing levels and activities
as well as a more general plan for the remaining term of the Collaboration.
Other than the initial Research Plan as reflected in Exhibit C, all subsequent
Research Plans shall be prepared jointly by the Parties through the Steering
Committee. The Research Plan may be modified or amended (i) upon the written
approval of the Steering Committee, or (ii) at BI’s sole discretion followed by
the approval of the Steering Committee. If the Research Plan is extended
pursuant to Section 5.2 (a), the Parties shall as soon as practicably thereafter
commence the drafting of a suitable supplement to the then existing Research
Plan in effect.

 

  (d) Funding of the Research Program.

(i) FTE Costs. BI will fund Neurocrine’s FTE activities in the conduct of the
Research Program by reimbursing Neurocrine for the actual number of FTEs
Neurocrine dedicated to the Research Program, […***…] FTEs per year over the
course

[…***…] of the Research Program, at a rate of […***…] per year per Neurocrine
FTE. In the event the Steering Committee shall elect to request that Neurocrine
devote more than the above number of Neurocrine FTEs to the conduct of the
Research Program in any year, BI will provide such funding for each additional
Neurocrine FTE at a rate of […***…] per FTE per year. If BI decides to extend
the Research Program […***…] as set forth in Section 5.2(a), the Parties will
negotiate in good faith the number of Neurocrine FTEs required during […***…].

(ii) External and Third Party Costs. […***…] Third Party and external costs and
expenses approved by the Steering Committee. Third Party contractors will be
used whenever BI’s and/or Neurocrine’s internally dedicated FTEs are
insufficient to meet the timelines established by the Steering Committee or when
Third Party contractors will best meet the goals of the Collaboration, […***…].
In some instances, the Steering Committee may elect to request that Neurocrine
act as a Third Party contractor to the Research Program and in such event,
[…***…] as agreed between Neurocrine and the Steering Committee.

(iii) Payment, Records and Audit. Neurocrine shall submit an Invoice to BI
[…***…] after each calendar quarter ending March, June, September, and December,
detailing with supportive documentation, the FTE Costs applicable to
Neurocrine’s efforts for such applicable quarterly period. Neurocrine’s Chief
Financial Officer shall certify the accuracy of each such Invoice submitted.
Unless otherwise specified in the Research Plan, FTE numbers budgeted for the
full year will be deemed budgeted in equal amounts for each calendar quarter
during such year, prorated as appropriate for the first and last calendar
quarters under which the Research Program is in effect. BI shall pay each
Invoice received within […***…]. For the duration of the Research Program
Neurocrine shall maintain and shall cause its Affiliates and sublicensees to
maintain, complete and accurate books and records regarding the Neurocrine FTEs,
as necessary to allow the accurate calculation of payments due hereunder.
Neurocrine will retain these records for […***…] BI shall have the right to
engage an independent accounting firm reasonably acceptable to Neurocrine[…***…]
which shall have the right to examine in confidence the relevant Neurocrine
records as may be reasonably necessary to determine and/or verify the amount of
payments due hereunder. Such examination shall be conducted during Neurocrine’s
normal business hours, […***…] prior written notice to Neurocrine

 

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and shall take place at the Neurocrine facility(ies) where such records are
maintained. In the event there was an over-payment by BI hereunder, Neurocrine
shall […***…] make payment to BI of any overpayment amounts. In the event that
there was an under-payment by BI hereunder, BI shall […***…] pay Neurocrine the
excess amount. In the event any payment by BI shall prove to have been incorrect
by more than […***…] to BI’s detriment, Neurocrine will pay the reasonable fees
and costs of BI’s independent auditor for conducting such audit.

 

5.3 Collaboration Product Development and Commercialization. Upon completion of
the Research Program, BI will be responsible for, and make all decisions with
respect to, formulation, pre-clinical development, clinical development,
manufacturing and commercialization of Collaboration Products.

ARTICLE SIX - FEES, ROYALTIES AND MILESTONES

 

6.1 Technology Access Fee. In consideration for the license rights granted
hereunder, […***…] the Effective Date, the receipt of an Invoice from
Neurocrine, and the receipt of a duly signed original of the Agreement , BI will
pay to Neurocrine ten million dollars ($10,000,000) as a technology access fee.

 

6.2 Royalties. BI will pay to Neurocrine royalties based on Net Sales of
Collaboration Products in the Territory. The royalties will have increasing
tiers based on annual Net Sales of Collaboration Products in the Territory as
set forth below:

 

[...***...]

   [...***...]

[...***...]

   [...***...]

[...***...]

   [...***...]

[...***...]

   [...***...]

For the avoidance of doubt, the thresholds referred to in this Section 6.2 are
thresholds for, and determined on, a Collaboration Product by Collaboration
Product basis. BI’s royalty obligations under this Section 6.2 shall become
effective in each country in the Territory at such time as BI, its Affiliates or
sublicensee has commenced the First Commercial Sale of Collaboration Product in
such country. For the purposes of Royalty payments, all formulations (e.g.,
tablets, gel caps, topical formulations, parenteral formulations, sustained
release formulations, etc.) of a Collaboration Product […***…].

 

6.3 Royalty Adjustments. Royalties on a Collaboration Product are subject to
reductions as a result of the events set forth below; provided, however, in no
event will Royalties on a Collaboration Product in any country in any calendar
quarter be reduced by more than […***…] of the amounts set forth in Section 6.2
by reason of the reductions set forth in (a) and (b) below.

 

  (a) Royalty Adjustment for NonPatent Products. If during any given calendar
quarter, the making, use or sale of a Collaboration Product would not infringe
any Valid Claims within the basic composition-of-matter Collaboration Patent
Rights in a country, the royalty on Net sales of Collaboration Products in that
country for that calendar quarter will be reduced by […***…] of the rates set
forth in Section 6.2 above.

 

  (b) Third Party Royalties. In the event BI is required to obtain a license and
make payments to a Third Party in order to make, have made, use, offer to sell,
import, or export a Collaboration Product in a country, […***…] of such payment
shall be creditable against payments due to Neurocrine for such Collaboration
Product.

 

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  (c) Generic Products. If, during a given calendar quarter, there is Generic
Competition in a particular country then, for each such country in which there
is Generic Competition, the Royalties payable to Neurocrine for the Net Sales of
such Collaboration Product in such country for such calendar quarter and all
future calendar quarters will be reduced by

  […***…] of the royalty rate(s) set forth in Section 6.2 above.

 

6.4 Term of Royalty. Royalties will be payable on a country by country and a
Collaboration Product by Collaboration Product basis until the later of (i) the
last to expire of the basic composition-of-matter Patent Rights included within
the Collaboration Technology, containing a Valid Claim which would be infringed
by the sale of such Collaboration Product in such country or (ii) […***…]
following the First Commercial Sale in such country. Upon the expiration of BI’s
final remaining obligation to pay Royalties to Neurocrine hereunder with respect
to a Collaboration Product in each such country, BI shall have a fully paid,
irrevocable, exclusive and unrestricted license under the Collaboration
Technology to make, have made, use, sell, and offer to sell and import such
Collaboration Product in each such country.

 

6.5 Reports and Payments.

 

  (a) Cumulative Royalties. The obligation to pay Royalties under this Article
Six shall be imposed only once (i) with respect to any sale of the same unit of
Collaboration Product and (ii) with respect to a single unit of Collaboration
Product regardless of how many Valid Claims of Patent Rights included in the
Collaboration Technology would, but for this Agreement, be infringed by the
making, using or selling of such Collaboration Product.

 

  (b) Statements and Payments. BI shall deliver to Neurocrine within […***…]
after the end of each calendar quarter, a report certified by BI as accurate to
the best of its ability based on information then available to BI, setting forth
for such calendar quarter the following information on a Collaboration Product
by Collaboration Product basis: (i) Net Sales of the Collaboration Product,
(ii) the basis for any adjustments to the Royalty payable for the sale of the
Collaboration Product and (iii) the Royalty due hereunder for the sale of the
Collaboration Product. The total Royalty due for the sale of Collaboration
Products during a calendar quarter shall be remitted as soon as practicable, and
in all cases within […***…] after such report is made.

 

  (c) Taxes and Withholding. If laws or regulations require withholding of BI of
any taxes imposed upon Neurocrine on account of any royalties and advance
payments, paid under this Agreement, such taxes shall be deducted by BI as
required by law from such remittable royalty and advance payment and shall be
paid by BI to the proper tax authorities. Official receipts of payment of any
withholding tax shall be secured and sent to Neurocrine as evidence of such
payment. The Parties shall exercise their best efforts to ensure that any
withholding taxes imposed are reduced as far as possible under the provisions of
any relevant tax treaty.

 

  (d)

Currency. All amounts payable and calculations hereunder shall be in United
States dollars. As applicable, Net Sales shall be translated into United States
dollars in accordance with BI’s customary and usual translation procedures,
consistently applied. If governmental regulations prevent remittances from a
foreign country with respect to sales made in that country, the royalties shall
continue to accrue but the obligation of BI to pay

 

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royalties on sales in that country shall be delayed until such remittances are
possible. Neurocrine shall have the right, upon giving written notice to BI, to
receive payment in that country in local currency.

 

  (e) Maintenance of Records; Audit. For a period of […***…], BI shall maintain
and shall cause its Affiliates and sublicensees to maintain complete and
accurate books and records in connection with the sale of Collaboration Products
hereunder, as necessary to allow the accurate calculation of Royalties and
Milestones due hereunder including any records required to calculate any Royalty
reductions hereunder. […***…] Neurocrine shall have the right to engage an
independent accounting firm reasonably acceptable to BI, at Neurocrine’s
expense, which shall have the right to examine in confidence the relevant BI
records as may be reasonably necessary to determine and/or verify the amount of
Royalty and Milestone payments due hereunder. Such examination shall be
conducted during BI’s normal business hours, after […***…] prior written notice
to BI and shall take place at the BI facility(ies) where such records are
maintained. In the event there was an under-payment by BI hereunder, BI shall
promptly (but in no event later than […***…] after BI’s receipt of the
independent auditor’s report) make payment to Neurocrine of any short-fall. In
the event that there was an over-payment by BI hereunder, Neurocrine shall
promptly (but in no event later than […***…] after Neurocrine’s receipt of the
independent auditor’s report so correctly concluding) refund to BI the excess
amount. In the event any payment by BI shall prove to have been incorrect by
more than […***…] to Neurocrine’s detriment, BI will pay the reasonable fees and
costs of Neurocrine’s independent auditor for conducting such audit.

 

6.6 Development Milestones. In consideration for the license rights granted by
Neurocrine to BI hereunder, BI will notify Neurocrine within […***…] of the
occurrence of the Development Milestone events set forth below. BI shall make
the payments, in all cases in U.S. Dollars, as set forth below for such event
within […***…] after receipt of Neurocrine’s Invoice.

 

  (a) […***…] Milestones. The following […***…] milestone shall be payable
[…***…] Collaboration Products:

 

[...***...]

  

[...***...]

Initiation of [...***...]

   [...***...]

Initiation of [...***...]

   [...***...]

The “Initiation […***…] milestone event is deemed to occur, on a Collaboration
Product by Collaboration Product basis, when […***…] or other […***…] is
initiated, as detailed […***…] section of the […***…] set forth in Exhibit C.

If a […***…] for a Collaboration Product is initiated prior to achieving the
Initiation of […***…] Milestone, the Initiation of […***…] Milestone will be due
and payable upon initiation of such […***…].

In the event the Initiation of […***…] Milestone in subsection (b) below is
achieved prior to achievement of the […***…] Milestone[…***…] Milestone will be
due and payable.

 

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  (b) […***…] Milestones. The following milestones will be payable […***…] for
the […***…] Collaboration Product to achieve the event in the […***…]. For
avoidance of doubt, in the event that development of the […***…] Collaboration
Product […***…] the events set forth below, only those […***…] Milestones that
have not been […***…] and paid at the time the […***…] to achieve the […***…]
Milestone event in […***…]:

 

[...***...]

  

[...***...]

Initiation of [...***...]

  

[...***...]

Initiation of [...***...]

  

[...***...]

Initiation of [...***...]

  

[...***...]

[...***...]

  

[...***...]

[...***...]

  

[...***...]

[...***...]

  

[...***...]

[...***...]

  

[...***...]

 

  (c) […***…] Milestones. The following milestones will be payable for the first
time a Collaboration Product achieves such event […***…] to achieve such events.
For avoidance of doubt, in the event that development of a Collaboration Product
[…***…] Milestones that have not […***…] and paid at the time the Collaboration
Product […***…] Milestone event[…***…]:

 

[...***...]

  

[...***...]

Initiation of […***…]

  

[...***...]

[…***…]

  

[...***...]

[…***…]

  

[...***...]

[…***…]

  

[...***...]

 

  (d) In all cases, the […***…] in which a Milestone is achieved […***…] for the
purposes of that Milestone and earns the […***…] Milestone payment, and in all
cases, the […***…] in which a Milestone is achieved is considered […***…] for
the purposes of that Milestone and earns […***…] and in all cases, […***…] in
which a Milestone is achieved is considered […***…] for the purposes of that
Milestone and earns the […***…]. Subject to Articles 6.6(b) and 6.6(c), […***…]
Milestone has been paid[…***…].

 

  (e) The milestone payments as set forth above in Section 6.6 (a) through
(c) are not to be achieved by any Combination Product, if […***…].

 

6.7 Sales Milestones. Within […***…] annual Net Sales of Collaboration
Product(s) […***…] as detailed below, BI will make the following payments, in
U.S. Dollars:

 

Event

  

[...***...]

Annual Net Sales of Collaboration Product(s) [...***...]

  

[...***...]

Annual Net Sales of Collaboration Product(s) [...***...]

  

[...***...]

Annual Net Sales of Collaboration Product(s) [...***...]

  

[...***...]

For the purposes of Sales Milestone payments [...***...].

 

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ARTICLE SEVEN - CONFIDENTIALITY, PUBLICATION AND PUBLIC ANNOUNCEMENTS

 

7.1 Confidentiality. Except to the extent expressly authorized by this Agreement
or otherwise agreed in writing, the Parties agree that, for the term of this
Agreement and for ten (10) years thereafter, each Party (the “Receiving Party”),
receiving hereunder any information designated hereunder as Confidential
Information of the other Party or information of the other Party marked
“Confidential” (in either case, the “Disclosing Party”), shall keep such
information confidential and shall not publish or otherwise disclose or use for
any purpose other than as provided for in this Agreement except, to the extent
that it can be established:

 

  (a) by the Receiving Party that the Confidential Information was already known
to the Receiving Party (other than under an obligation of confidentiality), at
the time of disclosure by the Disclosing Party and such Receiving Party has
documentary evidence to that effect;

 

  (b) by the Receiving Party that the Confidential Information was generally
available to the public or otherwise part of the public domain at the time of
its disclosure to the Receiving Party;

 

  (c) by the Receiving Party that the Confidential Information became generally
available to the public or otherwise part of the public domain after its
disclosure or development, as the case may be, and other than through any act or
omission of a party in breach of this confidentiality obligation;

 

  (d) by the Receiving Party that the Confidential Information was disclosed to
that Party, other than under an obligation of confidentiality, by a Third Party
who had no obligation to the Disclosing Party not to disclose such information
to others;

 

  (e) by the Receiving Party that the Confidential Information was independently
discovered or developed by the Receiving Party without the use of the
Confidential Information belonging to the other Party and the Receiving Party
has documentary evidence to that effect.

 

7.2 Authorized Disclosure.

 

  (a) Each Party. Each Party may disclose Confidential Information belonging to
the other Party to the extent such disclosure is reasonably necessary to:

 

  (i) file or prosecute patent applications claiming inventions included within
the Collaboration Technology,

 

  (ii) prosecute or defend litigation,

 

  (iii) exercise rights hereunder provided such disclosure is covered by terms
of confidentiality similar to those set forth herein, and

 

  (iv) comply with applicable governmental laws and regulations.

In the event a Party shall deem it necessary to disclose pursuant to this
Section 7.2 (a), Confidential Information belonging to the other Party, the
Disclosing Party shall to the extent possible give reasonable advance notice of
such disclosure to the other Party and take reasonable measures to ensure
confidential treatment of such information.

 

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  (b) Use. BI shall have the right to use Neurocrine Confidential Information in
the conduct of the Research Program and in developing and commercializing
Collaboration Products. Neurocrine shall have the right to use BI Confidential
Information in the conduct of the Research Program. Each Party will have the
right, subject to the licenses granted herein, to use the Joint Confidential
Information in their internal research and development of products.

 

7.3 Publications. The Steering Committee will develop a publication plan for the
Collaboration. Each Party will submit to the Steering Committee (and after the
Steering Committee has been disbanded, to BI) for review and approval all
proposed academic, scientific and medical publications, including oral
presentations and abstracts, relating to the Research Program, Collaboration
Products and/or Collaboration Technology for review in connection with, but not
limited to, the preservation of exclusive Patent Rights and/or to determine
whether Confidential Information should be modified or deleted. No such proposed
publication shall be submitted to any Third Party without having been approved
and released by the Steering Committee, or BI if applicable. For the sake of
clarity BI shall have the final decision making authority regarding the content,
suitability, or acceptability of any and all information contained in such
proposed publications. The Steering Committee shall have no less than […***…] to
review each proposed publication. The review period may be extended for an
additional […***…] in the event the nonpublishing Party can demonstrate to the
Steering Committee a reasonable need for such extension including, but not
limited to, the preparation and filing of patent applications. Such period may
be further extended by the Steering Committee. BI and Neurocrine will each
comply with standard academic practice regarding authorship of scientific
publications and recognition of contribution of other parties in any
publications relating to the Research Program, Collaboration Products and/or
Collaboration Technology. Notwithstanding the foregoing, the Parties shall
endeavor as far as possible, for ease and convenience, to agree on a universal
basis joint authorship in respect of such publications.

 

7.4 Publicity. The Parties agree on the importance of coordinating their public
announcements respecting this Agreement and the subject matter thereof (other
than academic, scientific or medical publications that are subject to the
publication provision set forth above). The Parties agree that the public
announcement of the execution of this Agreement shall be in the form of the
press release attached as Exhibit E. Any other publication, news release or
other public announcement relating to this Agreement or to the performance
hereunder, may only be made by Neurocrine or BI subject to the provisions of
this Article 7 and with the review and prior written approval of the other
Party, such approval not to be unreasonably withheld or delayed beyond
[…***…] following submission of the approving Party of a draft of the respective
disclosure. In no event shall such statements or disclosures disclose, if
previously undisclosed, the stage of development of Collaboration Products
and/or the financial terms of this Agreement; provided, however, that any
disclosure which is required by applicable law, including disclosures required
by the U.S. Securities and Exchange Commission or made pursuant to the
requirements of the national securities exchange or other recognized stock
market on which such Party’s securities are traded, as advised by the disclosing
Party’s counsel, may be made without the prior consent of the other Party,
although, to the extent practicable and in opinion of counsel to the disclosing
Party consistent with such Party’s disclosure obligations, the other Party shall
be given […***…] advance notice of any such legally required disclosure to
comment and reasonably consider such comments provided by such Party on the
proposed disclosure. Notwithstanding the foregoing, it is agreed that the review
requirements set forth in this Section 7.4 shall not apply to release or
presentation of information regarding this Agreement or Collaboration Products
to the extent such information has been previously disclosed by no breach of the
confidentiality obligations contained in this Agreement and so is no longer
Confidential Information.

 

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ARTICLE EIGHT - INDEMNIFICATION

 

8.1 Indemnification by BI. BI will indemnify, defend and hold harmless
Neurocrine, its licensees, sublicensees and Affiliates, and each of its and
their respective employees, officers, directors and agents (each, a “Neurocrine
Indemnified Party”) from and against any and all liability, loss, damage,
expense (including reasonable attorneys’ fees and expenses) and cost
(collectively, a “Liability”) which the Neurocrine Indemnified Party may be
required to pay to one or more Third Parties resulting from or arising out of
(i) any claims of any nature (other than claims by Third Parties relating to
patent infringement) arising out of (y) the conduct of the Research Program or
use of Collaboration Technology of by, on behalf of or under authority of, BI
(other than by a Neurocrine Indemnified Party) or (z) research, development
and/or commercialization of Collaboration Products by, on behalf of or under
authority of, BI (other than by Neurocrine Indemnified Party) and/or (ii) any BI
representation or warranty set forth herein being untrue in any material respect
when made, except in each case, to the extent caused by the negligence or
willful misconduct of Neurocrine or any Neurocrine Indemnified Party.
Notwithstanding the foregoing, BI shall have no obligation to defend, indemnify
or hold harmless any Neurocrine Indemnified Party from and against any Liability
arising out of or resulting from the infringement of a Third Party Patent Right.

 

8.2 Indemnification by Neurocrine. Neurocrine will indemnify, defend and hold
harmless BI, its licensees, sublicensees and Affiliates, and each of its and
their respective employees, officers, directors and agents (each, a “BI
Indemnified Party”) from and against all Liability which the BI Indemnified
Party may be required to pay to one or more Third Parties arising out of (i) any
claims of any nature (other than claims by Third Parties relating to patent
infringement) arising out of (x) the conduct of the Research Program or use of
Collaboration Technology of by, on behalf of or under authority of, Neurocrine
(other than by a BI Indemnified Party) or (y) research, development and/or
commercialization of Collaboration Products by, on behalf of or under authority
of, Neurocrine (other than by a BI Indemnified Party) and/or (ii) any Neurocrine
representation or warranty set forth herein being untrue in any material respect
when made, except in each case, to the extent caused by the negligence or
willful misconduct of BI or any BI Indemnified Party. Notwithstanding the
foregoing, Neurocrine shall have no obligation to defend, indemnify or hold
harmless any BI Indemnified Party from and against any Liability arising out of
or resulting from the infringement of a Third Party Patent Right.

 

8.3

Procedure. Each Party will notify the other in the event it becomes aware of a
claim for which indemnification may be sought hereunder. In case any proceeding
(including any governmental investigation) shall be instituted involving any
Party in respect of which indemnity may be sought pursuant to this Article
Eight, such Party (the “Indemnified Party”) shall promptly notify the other
Party (the “Indemnifying Party”) in writing and the Indemnifying Party and
Indemnified Party shall meet to discuss how to respond to any claims that are
the subject matter of such proceeding. The Indemnifying Party, upon request of
the Indemnified Party, shall retain counsel reasonably satisfactory to the
Indemnified Party to represent the Indemnified Party and shall pay the fees and
expenses of such counsel related to such proceeding. In any such proceeding, the
Indemnified Party shall have the right to retain its own counsel, but the fees
and expenses of such counsel shall be at the expense of the Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have mutually
agreed to the retention of such counsel or (ii) the named parties to any such
proceeding (including any impleaded parties) include both the Indemnifying Party
and the Indemnified Party and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. All such fees and expenses shall be reimbursed as they are incurred. The
Indemnifying Party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a

 

29

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final judgment for the plaintiff, the Indemnifying Party agrees to indemnify the
Indemnified Party from and against any loss or liability by reason of such
settlement or judgment. The Indemnifying Party shall not, without the written
consent of the Indemnified Party, effect any settlement of any pending or
threatened proceeding in respect of which the Indemnified Party is, or arising
out of the same set of facts could have been, a party and indemnity could have
been sought hereunder by the Indemnified Party, unless such settlement includes
an unconditional release of the Indemnified Party from all liability on claims
that are the subject matter of such proceeding.

ARTICLE NINE - TERM AND TERMINATION

 

9.1 Term. Unless earlier terminated by mutual agreement of the Parties or
pursuant to the provisions of this Article Nine, this Agreement will continue in
full force and effect.

 

9.2 Termination for Convenience. Notwithstanding anything contained herein to
the contrary, BI shall have the right to terminate this Agreement at any time in
its sole discretion by giving Neurocrine […***…] prior written notice provided
however that if such termination is to occur during the term of the Research
Program […***…] prior written notice will be required. If BI terminates this
Agreement pursuant to this Section 9.2, (a) BI will pay all amounts due and
owing to Neurocrine as of the termination date, and (b) BI shall continue to be
obligated during the termination notice period to perform all of its obligations
under this Agreement, […***…]. In addition, as a result of such termination by
BI:

 

  (a) All BI licenses and rights to the Neurocrine Technology will terminate;

 

  (b) All Neurocrine Confidential Information provided to BI in tangible form
and all substances or compositions provided by Neurocrine to BI will be returned
to Neurocrine except that BI may retain one copy of the Neurocrine Confidential
Information solely for legal archive purposes;

 

  (c) All BI Confidential Information provided to Neurocrine in tangible form
and all substances or compositions delivered or provided to Neurocrine by BI
shall be returned to BI except that Neurocrine may retain one copy of the BI
Confidential Information solely for legal archive purposes;

 

  (d) BI will transfer to Neurocrine such […***…] and information reasonably
necessary to allow Neurocrine to […***…] including transfer to Neurocrine of any
[…***…]

 

  (e) BI will transfer to Neurocrine […***…] generated on Collaboration
Products;

 

  (f) BI will transfer and assign […***…] as well as all other documents and/or
information reasonably requested by Neurocrine to enable Neurocrine to continue
the development and commercialization of Collaboration Products; and

 

  (g)

BI will, at its sole discretion, either (i) grant to Neurocrine […***…] license
under the […***…] and any other […***…] […***…] BI that BI has […***…] of the
Collaboration Products and would be […***…] by Neurocrine […***…] set forth in
subsection (e) above and without […***…] Neurocrine would […***…] development
and commercialization of Collaboration Products (provided this shall not include
[…***…] other than Collaboration Products) […***…] solely to make, have made,
use, import, offer for sale and sell Collaboration Products in the Field of Use
in the Territory, or (ii) assign

 

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it’s rights and interest in the […***…] […***…] to make, have made, use, import,
offer for sale and sell Collaboration Products in the Field of Use in the
Territory, in each case (i) or (ii) […***…] as stipulated in this Agreement
[…***…] for the […***…] of the appropriate […***…] not already achieved and/or
[…***…] and in addition, […***…].

 

9.3 Termination for Cause. A Party (the “Non-Defaulting Party”) shall have the
rights set forth under Sections 9.3 and 9.4, upon Default by the other Party
(the “Defaulting Party”), which Default remains uncured for […***…] in the case
of non-payment of any amount due […***…] for all other Defaults, each measured
from the date written notice of such Default is provided to the Defaulting
Party. The Non-Defaulting Party shall provide written notice to the Defaulting
Party, which notice shall identify the Default, the intent to so terminate and
the actions or conduct that it considers would be an acceptable cure of such
Default. In case the Defaulting Party disputes the Default under this
Section 9.3, then the issue of whether the Non-Defaulting Party may properly
terminate this Agreement on expiration of the applicable cure period shall be
resolved in accordance with Section 11.2. If as a result of such dispute
resolution process, it is determined that the alleged Defaulting Party committed
a Default and the Defaulting Party does not cure such Default […***…] after the
date of such arbitration award (the “Additional Cure Period”), then such
termination shall be effective as of the expiration of the Additional Cure
Period. If the Parties dispute whether such Default was so cured, either Party
alone may request the same arbitration tribunal to determine whether it was so
cured, and the Parties shall cooperate to allow such determination to be made
[…***…] after such request by either Party. Such dispute resolution proceeding
does not suspend any obligations of either Party hereunder, and each Party shall
use reasonable efforts to mitigate any damage. If as a result of such dispute
resolution proceeding it is determined that the alleged Defaulting Party did not
commit such Default (or such Default was cured in accordance with this
Section 9.3, the Additional Cure Period), then no termination shall be
effective, and this Agreement shall continue in full force and effect.
Notwithstanding the foregoing, Neurocrine shall not have the right to terminate
this Agreement for BI’s Default following the initiation of […***…] provided
that BI pays Neurocrine the amount of such damages that have been awarded by a
dispute resolution proceeding pursuant to Section 11.2 and the underlying Party
shall bear the costs and fees incurred by the other Party (including reasonable
attorney costs).

 

9.4 Effects of Termination

 

  (a) Neurocrine. Upon Default by Neurocrine that remains uncured for the
applicable period described in this Section, in addition to any other remedies
available to BI at law or in equity, such remedies subject to Section 11.2, BI
may in its discretion (i) terminate the Agreement, or (ii) exercise an
alternative remedy as set forth below hereunder. For the avoidance of doubt,
except as set forth in this clause (a), all rights and obligations under this
Agreement shall continue unaffected upon Default by Neurocrine, unless this
Agreement is terminated by BI pursuant to Section 9.2. Following the occurrence
of an event that would allow BI to terminate this Agreement under Section 9.3
and subject to the conditions set forth in such Section 9.3, the following shall
apply as an alternative remedy to such termination right and without
consideration (except as otherwise stated below) in lieu of termination of this
Agreement:

 

  aa) Any BI Confidential Information provided to Neurocrine pursuant to this
Agreement and all substances or compositions provided by BI to Neurocrine will
be promptly returned to BI except that Neurocrine may retain one copy of the BI
Confidential Information solely for legal archive purposes;

 

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  bb) BI shall be released of its ongoing disclosure and information exchange
obligations under Article 3 and 7;

 

  cc) The Steering Committee shall not meet anymore, except to address matters
relating to […***…]

 

  dd) […***…]

In addition to (aa)-(dd) above, BI may submit the issue of the Neurocrine
Default to the arbitration procedure set forth in Section 11.2. The arbitrators
will be empowered to determine whether a Default has occurred and set the
appropriate remedy for such Default. In the event a Neurocrine Default has a
material adverse effect on BI’s ability to develop and commercialize
Collaboration Products hereunder, the arbitrators will have the authority to
adopt all appropriate remedies including […***…].

 

  (b) BI. Upon Default by BI, in addition to any other remedies available to
Neurocrine at law or in equity, such remedies subject to Section 11.2,
Neurocrine may terminate this Agreement and the provisions of Section 9.2 shall
apply.

 

9.5 Bankruptcy. Each Party may, in addition to any other remedies available to
it by law or in equity, exercise the rights set forth below by written notice to
the other Party (the “Insolvent Party”), in the event the Insolvent Party shall
have become insolvent or bankrupt, or shall cease conducting business in the
ordinary course, or shall have made an assignment for the benefit of its
creditors, or there shall have been appointed a trustee or receiver of the
Insolvent Party or 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 the
Insolvent Party 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 the Insolvent Party, and
any such event shall have continued for […***…] undismissed, unbounded and
undischarged. All rights and licenses granted under or pursuant to this
Agreement by Neurocrine and BI are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to
“intellectual property” as defined under Section 101 of the Bankruptcy Code. The
Parties agree that the Parties as licensees of such rights under this Agreement
shall retain and may fully exercise all of their rights and elections under the
Bankruptcy Code. The Parties further agree that, in the event of the
commencement of a bankruptcy proceeding by or against either Party under the
Bankruptcy Code, the other Party 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, and the same, if not already in the
other Party’s possession, shall be promptly delivered to other Party (i) upon
any such commencement of a bankruptcy proceeding upon its written request
therefore, unless the Party subject to such proceeding elects to continue to
perform all of their obligations under this Agreement or (ii) if not delivered
under (i) above, upon the rejection of this Agreement by or on behalf of the
Party subject to such proceeding upon written request therefore by the other
Party.

 

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9.6 Change of Control. In the event of a Change of Control to a company […***…]
within its marketing or development portfolio, or to a company having
consolidated sales of ethical pharmaceutical products in the most recently
completed calendar year that place such company […***…] provided all payments
provided for herein are paid to Neurocrine’s successor, BI shall have the
following rights:

 

  a) BI shall be released of its ongoing disclosure and information exchange
obligations under […***…]

 

  b) The Steering Committee shall not meet anymore, except to address matters
relating to […***…].

ARTICLE TEN - INTELLECTUAL PROPERTY

 

10.1 Ownership, Filing, Prosecution and Maintenance.

 

  a) BI Patent Rights. BI shall solely own and shall, at its expense, be solely
responsible for the preparation, filing, prosecution and maintenance of BI
Patent Rights. BI shall have no obligation to continue the prosecution and/or
maintenance of any BI Patent Rights in any country and shall be free to abandon
such BI Patent Rights at its sole discretion.

 

  b) Program Patent Rights. […***…] the Program Patent Rights. […***…] for the
filing, prosecution, and maintenance of Program Patent Rights. Neurocrine agrees
that it will, and will cause its Affiliates to, (i) execute and file those
notices and other filings as BI shall request be made, from time to time, with
the United States Patent and Trademark Office (or any successor agency) or any
analogous patent office in the Territory with respect to the rights granted
under this Agreement, and (ii) execute and deliver to BI all assignments and
other instruments as BI shall request to effect the filing, prosecution and
maintenance of Program Patent Rights. BI will keep Neurocrine reasonably
informed of the status of the Program Patent Rights and will provide Neurocrine
with copies of all substantive documentation submitted to, or received from, the
patent offices in connection therewith. In all cases, […***…] with respect to
the filing, prosecution, and maintenance of Program Patent Rights. Neurocrine
agrees […***…] to cooperate with BI to execute assignment documents and other
documents and to take any other action reasonably requested by BI to effectuate
the intent of this Section 10.1(b).

 

  c) Neurocrine Patents Rights. […***…] the Neurocrine Patent Rights. […***…]
for the filing, prosecution, and maintenance of the Neurocrine Patent Rights.
Neurocrine agrees that it will, and will cause its Affiliates to, (i) execute
and file those notices and other filings as BI shall request be made, from time
to time, with the United States Patent and Trademark Office (or any successor
agency) or any analogous patent office in the Territory with respect to the
rights granted under this Agreement, and (ii) execute and deliver to BI all
assignments and other instruments as BI shall request to effect the filing,
prosecution and maintenance of the Neurocrine Patent Rights. BI will keep
Neurocrine reasonably informed of the status of the Neurocrine Patent Rights and
will provide Neurocrine with copies of all substantive documentation submitted
to, or received from, the patent offices in connection therewith. In all cases,
[…***…] with respect to the filing, prosecution, and maintenance of Neurocrine
Patent Rights. Neurocrine agrees […***…] to cooperate with BI to execute
assignment documents and other documents and to take any other action reasonably
requested by BI to effectuate the intent of this Section 10.1(c).

 

  d) […***…] Patent Rights on a Collaboration Product. Promptly following the
[…***…] in respect of a Collaboration Product, […***…] its rights, title and
interest in any […***…] that claims […***…]. Each such Patent so […***…] shall
be subject to all applicable licenses and payment and other obligations set
forth in this Agreement.

 

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  e) Abandonment of Patent Rights. […***…] may elect to discontinue payment for
the costs and expenses of preparation, filing, prosecution, validation or
maintenance of any […***…] on a country-by-country and
application-by-application or patent-by-patent basis, at any time and in its
sole discretion.

 

10.2 Extension of Patent Rights. At the time […***…] shall have the exclusive
right, but not the obligation, to seek, […***…] patent term extensions or
supplemental patent protection in any country in the Territory in respect of
Neurocrine Patent Rights, BI Patent Rights, or Program Patent Rights. […***…] to
obtain such patent term extensions or supplement protection, where applicable.
Neurocrine and BI shall cooperate in connection with all such activities,
[…***…] will give due consideration to all suggestions and comments […***…]
regarding any such activities, but in the event of a disagreement between the
Parties,
[…***…]. In the case where […***…] determines to seek such patent term
extensions or supplement patent protection in respect of […***…] shall appoint
[…***…] as […***…] for the sole purpose of submitting an application to extend
the term of such patent, an application for a Supplementary Protection
Certificate, or an equivalent thereof. […***…] shall co-operate with […***…] in
connection with any such application.

 

10.3 Interference, Opposition, Reexamination and Reissue. Each Party shall,
within […***…] of learning of such event, inform the other Party of any request
for, or filing or declaration of, any interference, opposition, or reexamination
relating to Neurocrine Patent Rights or Program Patent Rights. BI and Neurocrine
shall thereafter consult and cooperate fully to determine a course of action
with respect to any such proceeding. BI shall have the right to review and
approve any submission to be made in connection with such proceeding.

 

  a) Neurocrine shall not initiate any reexamination, interference or reissue
proceeding relating to Neurocrine Patent Rights or Program Patent Rights without
the prior written consent of BI, which consent shall not be unreasonably
withheld.

 

  b) In connection with any interference, opposition, reissue, or reexamination
proceeding relating to Neurocrine Patent Rights and Program Patent Rights, BI
and Neurocrine will cooperate fully and will provide each other with any
information or assistance that either may reasonably request. Neurocrine shall
keep BI informed of developments in any such action or proceeding, including, to
the extent permissible by law, consultation and approval of any settlement, the
status of any settlement negotiations and the terms of any offer related
thereto.

 

  c) […***…] of any interference, opposition, reexamination or re-issue
proceeding relating to the Neurocrine Patent Rights and Program Patent Rights.

 

10.4 Enforcement of Patent Rights.

 

  a) Notification. Each Party shall promptly notify each other of any
infringement of the Neurocrine Patent Rights, BI Patent Rights, or Program
Patent Rights which may come to its attention.

 

  b)

Patent Rights. Except as set forth below, BI shall have the right, but not the
obligation, in its own name, to enforce Neurocrine Patent Rights, BI Patent
Rights, and Program Patent

 

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Rights against any Third Party suspected of infringing a claim of such a Patent
Right in the Territory. BI shall have exclusive control over the conduct of any
such proceedings, including the right to settle or compromise such proceedings
consistent with the licenses hereunder, provided, however, that BI may not
settle or compromise any such action in a manner which diminishes the Patent
Rights relating to any Neurocrine Patent Rights or Program Patent Rights without
Neurocrine’s consent or which would impose any financial obligation on
Neurocrine without Neurocrine’s consent. The expenses of any proceeding […***…]
including legal fees and costs, shall be […***…]. Any award or recovery paid to
[…***…] as a result of such patent infringement proceedings (whether by way of
settlement or otherwise) shall first be applied toward […***…] and from the
remainder, if any […***…] as applied to the remainder as though such remainder
[…***…].

 

10.5 Paragraph IV Notices. If either Party receives a notice under 21 U.S.C.
§355(b)(2)(A)(iv) or 355(j)(2)(A)(vii)(IV) (a “Paragraph IV Notice”) concerning
Neurocrine Patent Rights, BI Patent Rights, or Program Patent Rights, then it
shall provide a copy of such Paragraph IV Notice to the other Party as soon as
practical, and in no event later than within […***…] after its receipt thereof.
[…***…] shall have the right […***…] to initiate patent infringement litigation
based on a Paragraph IV Notice concerning Neurocrine Patent Rights, BI Patent
Rights, and Program Patent Rights, […***…] upon request of
[…***…] shall reasonably cooperate […***…] in any such litigation, or file such
action in […***…] if required […***…] and shall join in any such litigation
[…***…]. Any award or recovery paid to […***…] as a result of such patent
infringement proceedings (whether by way of settlement or otherwise) shall first
be applied toward […***…] and from the remainder, if any, […***…] as applied to
the remainder as though such remainder […***…].

 

10.6 Infringement Defense. BI will defend and control any suit against any of
BI, BI’s Affiliates or sublicensees, alleging infringement of any patent or
other intellectual property right of a Third Party arising out of the
manufacture, use, sale, offer to sell or importation of a Collaboration Product
by BI, BI’s Affiliates or sublicensees in the Territory. BI shall be responsible
for the costs and expenses, including legal fees and costs, associated with any
suit or action. BI and Neurocrine will consult with one another and co-operate
in the defense of any such action. If BI finds it necessary or desirable to join
Neurocrine as a party to any such action, Neurocrine will execute all papers and
perform such acts as shall be reasonably required, […***…].

 

10.7 No Challenge. In the event either Party, its Affiliates or sublicensees
take, or assist any Third Party in taking, any action to challenge or contest
the title or validity of the Collaboration Patent Rights as they relate to the
making, having made, using, selling, offering for sale, importing of, or having
imported Collaboration Products in the Field of Use in the Territory, such
action […***…].

 

10.8 Inventorship. Inventorship with respect to all Patent Rights under this
Agreement shall be determined according to United States Law.

ARTICLE ELEVEN - MISCELLANEOUS

 

11.1 Governing Law. This Agreement shall be governed by and interpreted in
accordance with the internal laws of the State of New York, without regard to
its conflicts of laws rules.

 

11.2

Arbitration. The Parties shall negotiate in good faith and use reasonable
efforts to settle any dispute, controversy or claim arising from or related to
this Agreement or the breach thereof. If the

 

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Parties do not fully settle, and a Party wishes to pursue the matter, each such
dispute, controversy or claim that is not an “Excluded Claim” shall be finally
resolved by binding arbitration in accordance with the Rules of Arbitration of
the ICC (International Chamber of Commerce) and judgment on the arbitration
award may be entered in any court having jurisdiction thereof.

The arbitration shall be conducted by a panel of three (3) persons. Within
[…***…] after initiation of arbitration, each Party shall select one person to
act as arbitrator and the two Party-selected arbitrators shall select a third
arbitrator within […***…] of their appointment. If the arbitrators selected by
the Parties are unable or fail to agree upon the third arbitrator, the third
arbitrator shall be appointed by the ICC. The place of arbitration shall be New
York City, New York, and all proceedings and communications shall be in English.

Either Party may apply to the arbitrators for interim injunctive relief until
the arbitration award is rendered or the controversy is otherwise
resolved. Either Party also may, without waiving any remedy under this
Agreement, seek from any court having jurisdiction any injunctive or provisional
relief necessary to protect the rights or property of that Party pending the
arbitration award. The scope of the authority of the arbitrators shall be
limited to the strict application of law. The arbitrators shall have no
authority to award punitive or any other type of damages not measured by a
Party’s compensatory damages. Each Party participating in an arbitration
pursuant to the terms of this Agreement shall, subject to the award of the
arbitrators, […***…]. The arbitrators shall have the power to award recovery of
all costs (including reasonable attorney’s fees, administrative fees,
arbitrator’s fees and court costs) to the prevailing party.

Neither Party shall be required to give general discovery of documents, but may
be required only to produce specific, identified documents which are relevant or
considered relevant by the arbitrators to the dispute.

Except to the extent necessary to confirm an award or as may be required by law,
neither a Party nor an arbitrator may disclose the existence, content, or
results of arbitration without the prior written consent of both Parties. In no
event shall arbitration be initiated after the date when commencement of a legal
or equitable proceeding based on the dispute, controversy or claim would be
barred by the […***…].

The Parties agree that, in the event of a dispute over the nature or quality of
performance under this Agreement, neither Party may terminate this Agreement
until final resolution of the dispute through arbitration or other judicial
determination. The Parties further agree that any payments made pursuant to this
Agreement pending resolution of the dispute shall be refunded if an arbitrator
or court determines that such payments are not due.

As used in this Section, the term “Excluded Claim” shall mean a dispute,
controversy or claim that concerns […***…].

 

11.3 Jury Waiver. Each of the Parties hereto irrevocably und unconditionally
waives trial by jury in any legal action or proceeding relating to this
Agreement.

 

11.4

Assignment. Neither this Agreement nor any interest hereunder shall be
assignable by either Party without the prior written consent of the other Party.
Notwithstanding the foregoing (a) each Party may assign this Agreement (i) by
operation of law in connection with a merger of a Party with or into another
person or to any successor; or (ii) to any of its Affiliates, provided that the
assigning Party remains primarily liable for all of its obligations hereunder;
and (b) each Party may sublicense its rights to the extent permitted under this
Agreement. This Agreement shall be

 

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binding upon the successors and permitted assigns of the Parties and the name of
a Party appearing herein shall be deemed to include the names of such Party’s
successors and permitted assigns to the extent necessary to carry out the intent
of this Agreement. Any assignment not in accordance with this Section11.4 shall
be void.

 

11.5 Further Actions. Each Party agrees to execute, acknowledge and deliver such
further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of the Agreement.

 

11.6 Force Majeure. No Party shall be liable to the other Party for loss or
damages or shall have any right to terminate this Agreement for any default or
delay attributable to any Force Majeure, if the Party affected shall give prompt
notice of any such cause to the other Party. The Party giving such notice shall
thereupon be excused from such of its obligations hereunder as it is thereby
disabled from performing for so long as it is so disabled, provided, however,
that such affected Party commences and continues to use its Commercially
Reasonable Efforts to cure such cause.

 

11.7 Correspondence and Notices.

 

  (a) Ordinary Notices. Correspondence, reports, documentation, and any other
communication in writing between the Parties in the course of ordinary
implementation of this Agreement shall be delivered by hand, sent by facsimile
transmission (receipt verified), transmitted electronically (confirmed by
delivery of the hardcopy original by overnight courier), or by airmail to the
employee or representative of the other Party who is designated by such other
Party to receive such written communication.

 

  (b) Extraordinary Notices. Extraordinary notices and other communications
hereunder (including, without limitation, any Invoice, notice of Force Majeure,
Default, termination, change of address, exercise of rights to negotiate
additional agreements, etc.) shall be in writing and shall be deemed given
(i) upon the date of personally delivery or by facsimile transmission (receipt
verified), provided that such date is a business day and if confirmed by
delivery of the hardcopy original by overnight courier or registered mail; or
(ii) one (1) day after dispatch by overnight courier; or (iii) five (5) days
after dispatch of registered or certified mail (return receipt requested),
postage prepaid, in each case (i), (ii) or (iii) to the Parties at the following
addresses (or at such other address for a Party as shall be specified by like
notice, provided, however, that notices of a change of address shall be
effective only upon receipt thereof):

All correspondence to BI shall be addressed as follows:

Boehringer Ingelheim International GmbH

Binger Strasse 173

55216 Ingelheim Rhein

Germany

Attention: Sr. V.P, and Head of P.M. Business Development and Licensing/Strategy

Facsimile: […***…]

With a copy to:

Head of Corporate Department Law

(address as above)

Facsimile: […***…]

 

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All correspondence to Neurocrine shall be addressed as follows:

Neurocrine Biosciences, Inc.

12780 El Camino Real

San Diego, California U.S.A. 92130

Attention: Chief Executive Officer

Cc: General Counsel and Secretary

 

11.8 Amendment. No amendment, modification or supplement of any provision of
this Agreement shall be valid or effective unless made in writing and signed by
a duly authorized officer of each Party.

 

11.9 Waiver. No provision of the Agreement shall be waived by any act, omission
or knowledge of a Party or its agents or employees except by an instrument in
writing expressly waiving such provision and signed by a duly authorized officer
of the waiving Party.

 

11.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original and all of which shall
constitute together the same document.

 

11.11 Descriptive Headings. The descriptive headings of this Agreement are for
convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.

 

11.12 Severability. In the event that any clause or portion thereof in this
Agreement is for any reason held to be invalid, illegal or unenforceable, the
same shall not affect any other portion of this Agreement, as it is the intent
of the Parties that this Agreement shall be construed in such fashion as to
maintain its existence, validity and enforceability to the greatest extent
possible. In any such event, this Agreement shall be construed as if such clause
of portion thereof had never been contained in this Agreement, and there shall
be deemed substituted therefore such provision as will most nearly carry out the
intent of the Parties as expressed in this Agreement to the fullest extent
permitted by applicable law unless doing so would have the effect of materially
altering the right and obligations of the Parties in which event this Agreement
shall terminate and all the rights and obligations granted to the Parties
hereunder shall cease and be of no further force and effect.

 

11.13 Entire Agreement of the Parties. This Agreement constitutes and contains
the complete, final and exclusive understanding and agreement of the Parties and
cancels and supersedes any and all prior negotiations, correspondence,
understandings and agreements whether oral or written, among the Parties
respecting the subject matter hereof and thereof.

 

11.14 Independent Contractors. The relationship between BI and Neurocrine
created by this Agreement is one of independent contractors and neither Party
shall have the power or authority to bind or obligate the other except as
expressly set forth in this Agreement.

 

11.15 No Trademark Rights. Expect as otherwise provided herein, no right,
express or implied, is granted by this Agreement to use in any manner the name
“Neurocrine Biosciences” “Boehringer Ingelheim,” or any other trade name or
trademark of the other Party or its Affiliates in connection with the
performance of this Agreement.

 

11.16

Accrued Rights; Surviving Obligations. Unless explicitly provided otherwise in
this Agreement, termination, relinquishment or expiration of the Agreement for
any reason shall be without prejudice to any rights which shall have accrued to
the benefit to any Party prior to such termination, relinquishment or
expiration, including damages arising from any breach hereunder.

 

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Such termination, relinquishment or expiration shall not relieve any Party from
obligations which are expressly indicated to survive termination or expiration
of the Agreement, including, without limitation, those obligations set forth in
Sections 2.5, 3.3, 3.5,11.1,11.2, 11.3, Articles Seven and Eight hereof.

 

11.17 Export. Notwithstanding anything to the contrary set forth herein, all
obligations of Neurocrine and BI are subject to prior compliance with United
States and foreign export regulations and such other United States and foreign
laws and regulations as may be applicable and to obtaining all necessary
approvals required by applicable agencies of the governments of the United
States and foreign jurisdictions. Neurocrine and BI will co-operate with one
another and provide assistance to one another as reasonably necessary to obtain
any required approvals.

[The remainder of this page is intentionally blank]

 

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IN WITNESS WHEREOF, duly authorized representatives of the Parties have duly
executed this Agreement to be effective as of the Effective Date.

BOEHRINGER INGELHEIM INTERNATIONAL GmbH.

 

 

/s/ Dr. Klaus Wilgenbus

     

/s/ Dr. Christian Hauke

By:

  Dr. Klaus Wilgenbus     By:   Dr. Christian Hauke

Title:

  Authorized Signatory     Title:   Authorized Signatory

NEUROCRINE BIOSCIENCES, INC.

 

 

/s/ Kevin C. Gorman

By:

  Kevin C. Gorman

Title:

  President and Chief Executive Officer

 

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Exhibit A

[…***…]

[…***…]

 

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Exhibit B

Neurocrine Patent Rights

[…***…]

 

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Exhibit C

Research Plan

[…***…]

 

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Exhibit D

Invoice Requirements

All payments under this Agreement shall be made by wire transfer to a bank
account to be designated on the Invoice which explicitly outlines the following
information:

 

  •  

Name and address of the providing entrepreneur

 

  •  

Name and address of the recipient

 

  •  

Bank and bank account details

 

  •  

VAT-ID number or taxpayer identification number

 

  •  

Date of invoice

 

  •  

Consecutive invoice-number or contract-number of the invoicing entrepreneur

 

  •  

BI-contract number as outlined on the first page of the agreement

 

  •  

Quantity and kind of deliveries or services

 

  •  

Due date of payments

 

  •  

Time of deliveries or services

 

  •  

Net consideration and currency, if necessary broken down into tax rates and
particular tax exemptions

 

  •  

Tax rate (if applicable)

 

  •  

Amount of VAT (if applicable)

 

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Exhibit E

Pre-approved Announcement Regarding the Collaboration

FOR IMMEDIATE RELEASE

Contact at Neurocrine Biosciences

Investor Relations

(858) 617-7600

NEUROCRINE BIOSCIENCES ANNOUNCES A WORLDWIDE COLLABORATION WITH BOEHRINGER
INGELHEIM TO RESEARCH AND DEVELOP GPR119 AGONISTS FOR TYPE II DIABETES

San Diego, CA/USA – June xx, 2010 - Neurocrine Biosciences, Inc. (NASDAQ: NBIX)
announced today that they have established a worldwide collaboration with
Boehringer Ingelheim to research and develop small molecule GPR119 agonists for
the treatment of Type II diabetes and other indications. The companies will work
jointly to identify and advance candidates into pre-clinical development.
Boehringer Ingelheim is responsible for the global development and
commercialization of potential GPR119 agonist products.

Under the terms of the collaboration agreement, Neurocrine Biosciences will
receive a $10 million upfront payment, research funding to support discovery
efforts and is eligible to receive up to $225 million in milestone payments
based on the achievement of development, regulatory and commercial goals as well
as royalty payments on any future product sales. Further financial details were
not disclosed.

“We are looking forward to working with a high-quality partner who shares our
commitment to thorough science and our collaborative culture. We are excited to
bring our technology platform “SiNERGTM,” a suite of assays and assay systems
that address parameters such as residence time, kinetics, allosteric
interactions and ligand-biased intracellular signaling pathways, coupled with
our integrated chemical synthetic, purification and analytical methodologies to
this collaboration,” said Dr. Dimitri E. Grigoriadis, Vice President Research at
Neurocrine. “Combining Boehringer Ingelheim’s research and development expertise
in metabolic disorders with Neurocrine’s unique capabilities in small molecule
discovery for GPCRs, provides a strong platform for development of new therapies
for Type II diabetes.”

About GPR119 Agonists

GPR119 is a G-protein coupled receptor (GPCR) that has been implicated as a
novel target for the treatment of Type II diabetes. The activation of GPR119
receptors located in the digestive system stimulates incretins, resulting in
increased insulin production, while activation of GPR119 receptors located on
pancreatic islet beta cells also stimulates insulin secretion.

About Type II Diabetes

Type II diabetes is characterized by the reduced ability to secrete and respond
to insulin. Drugs which can enhance the secretion of insulin in response to
rising blood glucose levels can improve blood glucose control without increased
risk of hypoglycemia. Nearly 25 million suffer from Type II diabetes in the
United States alone with a worldwide prevalence of nearly 200 million. Recent
estimates put the total direct and indirect costs of diabetes at $174 billion.

 

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About Neurocrine Biosciences, Inc.

Neurocrine Biosciences, Inc. is a biopharmaceutical company focused on
neurological and endocrine diseases and disorders. Our product candidates
address some of the largest pharmaceutical markets in the world including
endometriosis, anxiety, depression, pain, diabetes, irritable bowel syndrome,
insomnia, and other neurological and endocrine related diseases and disorders.
Neurocrine Biosciences news releases are available through the Company’s website
via the internet at http://www.neurocrine.com.

In addition to historical facts, this press release may contain forward-looking
statements that involve a number of risks and uncertainties. Among the factors
that could cause Neurocrine’s actual results to differ materially from those
indicated in the forward looking statements are risks and uncertainties
associated with Neurocrine’s business and finances and research programs in
general including, but not limited to, risk and uncertainties associated with,
or arising out of, drug discovery, pre-clinical and clinical development of
products and specifically risk that the GPR119 agonist program may not generate
any development candidates that lead to clinical testing or commercial products;
risk that GPR119 agonist compounds will not prove efficacious for the treatment
of type II diabetes; risk relating to Neurocrine’s reliance on its collaborator
for GPR119 agonist product development and commercialization; risk that
Neurocrine could fail to meet its obligations under the GPR119 agonist program
collaboration agreement which would cause it to forfeit certain rights and/or
reduce future product payments; uncertainties relating to patent protection for
GPR119 agonist compounds and intellectual property rights of third parties in
the GPR119 agonist field; impact of competitive products and technological
changes that may limit demand for Neurocrine’s products; and the other risks
described in Neurocrine’s report on Form 10-K for the year ended December 31,
2009 and most recent report on Form 10-Q filed for the third quarter ended,
March 31, 2010. Neurocrine undertakes no obligation to update the statements
contained in this press release after the date hereof.

 

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