kl02015_ex4-4.htm


    
      

    

     

    Exhibit
4.4


    


    


    


    Material
Transfer

    


    and

    


    License
Option Agreement

    


    


    


    


    


    between

    


    Helix
BioPharma Corporation

    


    and

    


    Schering
Corporation

    


    


    


    


    


    December
2000

    


    CONFIDENTIAL TREATMENT
REQUESTED

     

    INFORMATION
FOR WHICH CONFIDENTIAL TREATMENT HAS BEEN REQUESTED IS OMITTED AND IS IDENTIFIED
BY THREE ASTERISKS, AS FOLLOWS “* * *”, AN UNREDACTED VERSION OF THIS DOCUMENT
HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    MATERIAL TRANSFER &
LICENSE OPTION AGREEMENT

    


    This
Agreement, effective the latest of the signature dates, is by and between the
following parties:

    


    Helix
BioPharma Corp., having a principal place of business at 3-305 Industrial
Parkway South, Aurora, Ontario  L4G 6X7, Canada (hereinafter referred
to as “Helix”); and

    


    Schering
Corporation, having a principal place of business at 2000 Galloping Hill Road,
Kenilworth, New Jersey 07033 (hereinafter referred to as
“Schering”).

    


    WHEREAS,
Schering has developed certain Material and Proprietary Information (each as
defined below) and desires to protect its proprietary rights in and to the
Material and Proprietary Information;

    


    WHEREAS,
Helix has developed certain Proprietary Information, which includes the Biphasix
Technology (as defined below), and desires to protect its proprietary rights in
and to the Proprietary Information;

    


    WHEREAS
Helix desires to obtain quantities of the Material from Schering for use in the
development of a topical formulation using Helix’ proprietary Biphasix
technology; and

    


    WHEREAS
Schering, being the owner of the entire right, title and interest in the
Material, is willing to provide Helix with the Material for the sole purpose of
conducting such Development Program;

    


    NOW,
THEREFORE, in consideration of the transfer of Material to Helix and to protect
the interests and rights of Schering and Helix, the parties have agreed to the
following:

    


    1.         Definitions:

    


    “Affiliate” shall mean any individual
or entity directly or indirectly controlling, controlled by or under common
control with, a party to this Agreement.  For purposes of this
Agreement, the direct or indirect ownership of fifty percent (50%) or more of
the outstanding voting securities of an entity, or right to receive fifty
percent (50%) or more of the profits or earning of an entity shall be deemed to
constitute control.  Such other relationship as in fact results in
actual control over the management, business and affairs of an entity shall also
be deemed to constitute control.

    


    “Agreement Product” shall mean a
topical formulation of interferon alpha-2b, recombinant, formulated using
Biphasix Technology.

    


    “Biphasix Technology” shall mean the
Helix Patents, the subject matter claimed in the Helix Patents and all of Helix’
know-how related to the practice of such subject matter.

    


    “Development Program” shall mean all
the work necessary to prepare a dossier that would be acceptable to the Canadian
Health Protection Branch (“Health Canada”), the European Union’s Committee for
Proprietary Medicinal Products (“CPMP”) and the US Food and Drug Administration
(“FDA”) for regulatory approval of the Agreement Product for the treatment of


     

     

    
      
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    genital
warts due to HPV infection (the “Primary Indication”) and cervical dysplasia
(the “Secondary Indication”).   The Development Program shall
include, without limitation all preclinical, clinical, pharmacokinetic and
toxicology studies necessary to support such regulatory approvals for the
Agreement Product.

    


    “Helix Patents” shall mean the U.S.
patent applications and patents listed on Exhibit A and all divisions,
continuations, continuations-in-part, reexaminations, reissues, extensions,
registrations and supplementary protection certificates thereof, and all
corresponding foreign patent applications and patents.

    


    “Material” shall mean interferon
alpha-2b, recombinant, meeting the specifications identified in Exhibit
B.

    


    “Proprietary Information” shall mean
know-how and data, as well as trade secrets, technical information, tangible
materials, records and other proprietary technology belonging to one party which
is provided to the other party pursuant to this Agreement.  Schering’s
Proprietary Information shall include, without limitation, any of Schering’s
assays, test procedures, specifications, reference standards, data, processes or
methods relating to the Material or its use, which may be provided to Helix
under this Agreement.  Helix’s Proprietary Information shall include,
without limitation, all assays, test procedures, specifications, reference
standards, data, processes or methods relating to the Biphasix Technology or its
use, which may be provided to Schering under this Agreement.

    


    2. Schering shall provide to Helix,
without charge, sufficient quantities of the Material to enable Helix to conduct
the Development Program; provided that Schering’s obligation to provide Material
shall not exceed an aggregate total of *** without Schering’s prior written
approval.  The Material shall be manufactured in compliance with
current Good Manufacturing Practices (as established pursuant to the U.S. Food,
Drug and Cosmetics Act or otherwise by the U.S. Food and Drug
Administration).  The Material is owned by Schering and shall remain
the property of Schering.  Helix shall be responsible for the control
of the Material, which shall be stored in a locked, secured area, and shall not
distribute or release the Material to any third party, except as necessary for
the performance of the Development Program, without the prior written permission
of Schering.

    


    3.      The Material
shall be used by Helix solely in performance of the Development Program and
Helix shall not use any of the Material for any other purpose without the prior
written approval of Schering.  The Development Program shall be
conducted by Helix in accordance with the plan described in Exhibit C, which
shall be reviewed and approved in advance by Schering.  Any material
changes to the Development Program shall require Schering’s prior written
approval.  Helix shall use diligent efforts to conduct the Development
Program and maintain records and data during and after the term or early
termination of this Agreement in compliance with all applicable legal and
regulatory requirements, including without limitation, any applicable
requirements of the FDA.  Helix shall be solely responsible for the
costs and expenses of performing the Development Program.

    


    4. This Agreement, including the resulting
transfer of Material, constitutes the grant of the limited right to Helix to use
the Material solely to conduct the Development Program.  Helix shall
have no right to sublicense, assign or transfer any of its rights in the
Material to any third

     

     

    
      
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    party.  Schering
shall be free, in its sole discretion, to use the Material for its own purposes
and to distribute the Material to other parties.

    


    5.      In
consideration for the supplies of Material being provided by Schering hereunder,
Helix hereby grants to Schering an exclusive option and right of first refusal
to obtain a worldwide, exclusive license to make, have made, import, export,
use, offer for sale and sell pharmaceutical products containing alpha interferon
in combination with the Biphasix Technology, including without limitation, the
Agreement Product (the “Option”).  Schering may exercise the Option,
in its sole discretion, at any time during the Option Period (as defined below),
by providing Helix with written notice to that effect.  The “Option
Period” shall mean the period extending from the Effective Date until the date
which is sixty (60) days after Schering receives notice, as required under
Section 8(a), of the successful completion of Phase III clinical trials for the
Agreement Product under the Development Program.

    


    (a)   
Upon
exercising the Option, the parties shall have a period of ninety (90) days (the
“Negotiation Period”) to negotiate in good faith and enter into a mutually
acceptable license agreement for the Agreement Product (the License
Agreement”).  The License Agreement shall incorporate the basic
business terms set forth in Exhibit D, and such other terms and conditions,
consistent with the basic business terms, as are reasonable and customary in the
industry for such agreements.

     

    (b)   
Schering
shall have no obligation to enter into the License Agreement (nor any obligation
to make a determination of whether to enter into the License Agreement) prior to
its exercising the Option in accordance with this Section 5.

     

    (c)   
In the
event that Schering does not exercise the Option during the Option Period, then
the Option shall expire upon expiration of the Option Period.

     

    (d)   
During
the Option Period and the Negotiation Period, Helix shall not grant or offer to
grant a license, or assign, transfer or otherwise convey any rights, title or
interest in or to the Agreement Product, or under any patent applications or
patents owned or controlled by Helix which have claims covering the Agreement
Product, its manufacture or use, to any third party.  In addition,
during the Option Period and the Negotiation Period, Helix will not discuss or
evaluate a possible business relationship with any third party, or grant any
licenses or other rights to any third party, relating to the use of Biphasix
Technology in combination with  alpha interferon, nor enter into or
make any understandings or agreements with a third party which would otherwise
diminish the rights granted to Schering under this Agreement, without the prior
written consent of Schering.  Nothing herein shall be construed as
limiting Helix’ right to use the Biphasix Technology in connection with
compounds other than alpha interferon, or to make the Biphasix Technology
available to third parties for use in combination with compounds other than
alpha interferon.

     

    


    6.     
Each
party shall preserve any and all Proprietary Information received from the other
party as confidential and shall not use any such Proprietary Information except
as necessary to conduct the Development Program or as otherwise expressly
permitted hereunder.  The obligations of confidentiality and non-use
under this Agreement shall continue for a period of ten (10) years after the
expiration or termination of this Agreement, at which time it will
cease.  In the event the Proprietary Information is disclosed to the
receiving party in a manner other than in 

     

     

     

    
      
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    writing,
it shall be reduced to written form, marked “Confidential” and transmitted to
the receiving party within fifteen (15) business days of the initial
disclosure.  These confidentiality and non-use restrictions shall not
apply to any Proprietary Information:

    


    (a)  
which is
known by the receiving party prior to its communication by the disclosing party,
as evidenced by the receiving party’s written business records;

     

    (b)  
which is
a matter of public knowledge at the time of such disclosure by the disclosing
party;

     

    (c)  
which is
a matter of public knowledge, without fault on the part of the receiving party,
subsequent to disclosure by the disclosing party.

     

    (d)  
which is
disclosed to the receiving party by a third party lawfully having possession of
such Proprietary Information without an obligation of confidentiality to the
disclosing party;

     

    (e)  
which is
independently developed by the receiving party, or its parent corporation or
their respective Affiliates, without the aid, application or use of the
disclosing party’s Proprietary Information (and/or in the case of Helix the
Material) provided to the receiving party hereunder (and such independent
development can be properly demonstrated by the receiving party);
or

     

    (f)  
which is
required by law, regulation, rule, act, or order of any governmental authority
or agency to be disclosed; provided, however, that the
party required to disclose immediately notify the other party upon receiving
notice of requirement to disclose.

     

    


    7.     
Helix
shall use the Material in compliance with Good Laboratory Practices and Good
Clinical Practices (as set forth in the ICH guidelines) and all applicable laws,
rules and governmental regulations.  Helix represents and warrants
that it will not use in any capacity, in connection with the activities to be
performed under this Agreement, any individual or entity who has been debarred
pursuant to the Federal Food, Drug and Cosmetic Act, as amended.  THE
MATERIAL IS PROVIDED WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR
IMPLIED.  SCHERING MAKES NO REPRESENTATION OR WARRANTY THAT USE OF THE
MATERIAL WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT OF ANY THIRD
PARTY.

    


    8. Helix shall keep Schering informed of
the progress of the Development Program by providing semi-annual written reports
containing sufficient information to enable Schering to monitor the progress and
outcome of the Development Program. Helix shall provide Schering with a written
final report within sixty (60) days after completion of the Development Program
or termination of this Agreement.

    


    (a)   
Helix
shall provide written notice to Schering upon the successful completion of Phase
III clinical trials for the Agreement Product.  Such notice shall
include a detailed report of the data and results of all pre-clinical, clinical
and toxicology studies involving the Agreement Product sufficient to enable
Schering to independently 

     

     

    
      
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    evaluate
the outcome of such studies.  The Option Period described in Section 5
shall begin upon receipt by Schering of such notice.

    


    (b)   
During
the Option Period Schering will be permitted to conduct a due diligence review
of the Agreement Product and the Development Program to enable it to determine
whether or not to exercise the Option.  Upon request, Helix shall
provide Schering with reasonable cooperation in the performance of such due
diligence, which shall include providing Schering access to any additional data,
information and results relating to the results of the Development Program which
may be reasonably necessary to complete the diligence evaluation.

    


    9. Any new invention, development,
biological material or discovery, whether patentable or not, resulting from the
performance of the Development Program, or from the use of Schering’s
Proprietary Information or the Material by Helix in connection therewith, or
otherwise relating to the Agreement Product shall be promptly disclosed in
writing to Schering (individually and collectively referred to herein as
“Invention”).  The parties acknowledge and agree that all rights,
title and interest in and to any Inventions shall be governed by the following
terms:

    
      	
                      (i)  

            	
              Inventions
      that relate solely to alpha interferon and/or the Material shall be solely
      owned by Schering (“Schering
Inventions”);

            


    

     

    
      	
              (ii)  

            	
              Inventions
      that relate solely to the Biphasix Technology shall be solely owned by
      Helix (“Helix Inventions”); and

            


    

     

    
      	
              (iii)  

            	
              Inventions
      which relate to the combination of the Biphasix Technology with alpha
      interferon and/or the Material shall be jointly owned by the parties
      (“Joint Inventions”), subject to the terms and conditions set forth
      herein.

            


    

     

    


    (a)   
Each of
Schering and Helix shall have sole responsibility, at such party’s sole
discretion and expense, for the preparation, filing, prosecution, maintenance,
enforcement and defense of patent applications and patents claiming Schering
Inventions or Helix Inventions, respectively.  The other party shall,
upon request, reasonably assist such party in connection with such
activities.  Reasonable assistance shall include causing the execution
of any patent assignments or other documents necessary to perfect the requesting
party’s title to the Schering Invention or Helix Invention as
applicable.

     

    (b)   
In the
event of any patentable Joint Invention, the parties shall consult and agree
upon mutually acceptable procedures and allocate responsibility for the
preparation, filing, prosecution, maintenance, enforcement and defense of patent
applications and patents.

     

    (c)   
Except as
expressly set forth herein, nothing contained in this Agreement shall be deemed
to grant or create either directly or by implication, estoppel or otherwise any
license, title or other rights under any patents, patent applications or other
proprietary interests to any materials, inventions or discoveries of either
party.

     

    


     

    
      
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    10.          
Helix shall notify Schering within twenty-four (24) hours after learning of any
serious and/or unexpected adverse drug reaction affecting any patient in the
Development Program.  Helix further agrees to follow up such
notification of adverse drug reaction with appropriate reports in compliance
with all applicable legal and regulatory requirements.  Helix shall
provide such notification to: Schering Corporation, 50 Lawrence Road,
Springfield, NJ  07081-3121, Attention:  Senior Director –
Medical and Safety Services, Telephone No.: (973) 921-7400, Facsimile No.: (973)
921-7424

    


    11.           Schering
shall indemnify, defend and hold harmless Helix and its Affiliates, and their
respective directors, officers, agents, and employees from and against any
demands, claims, actions, proceedings or costs of judgments which may be made or
instituted against any of them by reason of personal injury (including death) to
any person, or damage to property, to the extent caused by the use of the
Material to conduct the Development Program.  Notwithstanding the
foregoing, Schering shall have no indemnification obligation or liability and
Helix shall indemnify, defend and hold harmless Schering, its parent corporation
and Affiliates, and their respective officers, directors, agents, and employees
with respect to any demands, claims, actions, proceedings or costs of judgments
which may be made or instituted against any of them by reason of personal injury
(including death) to any person, or damage to property, to the extent caused by:
(i) failure of Helix to comply with any applicable FDA or other governmental or
state requirements, law, rules or regulations applicable to the performance of
its obligations under this Agreement; (ii) the breach by Helix of nay of its
covenants, representations or warranties under this Agreement; or (iii) a
negligent act or omission or willful misconduct by Helix, its directors,
officers, agents or employees related to the performance of the Development
Program.

    


    12.           This
Agreement shall terminate upon expiration of the Option Period.  In
addition, either party shall have the right to terminate this Agreement upon
thirty (30) days’ written notice in the event of a material breach of this
Agreement by the other party; unless the breach is cured during such thirty (30)
day period.  Notwithstanding the foregoing, Sections 6, 7, 8, 9, 10,
11, 13, 14, 15, 16 and 17, and any other applicable provisions extending into
the future shall survive the termination or expiration of this
Agreement.  Upon completion of the Development Program, or the earlier
termination of this Agreement, Helix shall cease use of and shall, at Schering’s
election, return to Schering or destroy any unused Material.  Upon
request, each of Schering and Helix shall return to the other party all copies
of the requesting party’s Proprietary Information in its possession, except for
one archival copy which may be retained by it for purposes of identifying its
obligations under this Agreement.

    


    13.           
Neither
party shall use the name of the other party (or the name of Schering, its parent
corporation or their respective Affiliates) for promotional purposes without the
prior written consent of the party whose name is proposed to be
used.  The parties agree that on or after the Effective Date that
Helix may issue an initial press release as set forth in Exhibit
E.  No other news release, publicity or other public announcement,
either written or oral, regarding the terms and/or existence of this Agreement,
or performance hereunder, shall be made by Schering or Helix without the prior
written approval of the other party; provided, however, that nothing
herein will be deemed to prevent either party from making such disclosures to
the extent required under applicable federal, state or provincial securities
laws or any rule or regulation of any nationally recognized securities exchange
(including, without limitation, the Toronto Stock Exchange), provided same is
accurate and complete.  In such event, however, the disclosing party


     

     

     

    
      
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    shall use
good faith efforts to consult with the other party prior to such disclosure and
where applicable, shall request confidential treatment to the extent
available.

    


    14.          
This
Agreement is not assignable by either party, whether by operation of law or
otherwise, without the prior written consent of the other party.

    


    15.          
This
Agreement shall be governed by and construed in accordance with the laws of New
York, excluding the choice of law provisions.

    


    16.           This
Agreement is intended to be severable.  Should any part or provision
of this Agreement be found to be unenforceable or invalid for any reason, the
remaining parts and provisions will remain in effect.

    


    17.          
This
Agreement constitutes the entire understanding of the parties with respect to
the subject matter hereof and hereby supersedes and replaces all prior
agreements and understandings with respect to the Material, and may be modified
only with written permission of both parties.

    


    


    IN WITNESS WHEREOF, the parties have
caused this Agreement to be executed by duly authorized representatives as of
the last date written below.

    


    HELIX
BIOPHARMA
CORP.                                                                        SCHERING
CORPORATION

    


    By:                 /s/ Donald
Segal                                   By:                 
/s/ David
Poorvin                                      

    


    Name:            Donald
Segal                                        
Name:            
David
Poorvin                                   

    


    Title:              Executive
Vice-President                                                         Title:              
Vice
President                                   

    


    Date:              December 18,
2000                                                                   
Date:             
December 13,
2000

    


     

     

     

     

    
      
        7 


      

      
         


        
          

        

      

      
         


      

    


    


    Exhibit
A

    


    


    Patents
and Patent Applications (U.S.)

    


    
      	
              Title

            	
              Application No.

            	
              Patent No. / Status

            
	
              Biphasic
      Multilamellar Lipid Vesicles

            	
              08/872,068

            	
              5,853,755

            
	
              Method
      for Preparing Biphasic Multilamellar Lipid Vesicles

            	
              09/042,097

            	
              5,993,851

            
	
              Topical
      Patch for Liposomal Drug Delivery System

            	
              08/342,962

            	
              5,718,914

            
	
              Composition
      and Method for Dermal and Transdermal Administration of a
      Cytokine

            	
              09/216,500

            	
              Pending

            
	
              Biphasic
      Lipid Vesicle Composition for Transdermal Administration of an
      Immunogen

            	
              09/141,875

            	
              5,993,852

            
	
              Composition
      for Transdermal and Dermal Administration of
    Interferon-alpha

            	
              60/195,549

            	
              Pending

            
	
              Composition
      for Transdermal Administration of Insulin

            	
              60/195,401

            	
              Pending

            
	
              Delivery
      of Polynucleotides Using Biphasic Lipid Vesicles

            	
              60/195,945

            	
              Pending

            


    

    



    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    Exhibit
B

    


    Specification Limits/Ranges
for Material (interferon alpha-2b)

    


    ***

     

     

     

     

     

     

     

     

     

     

     

     

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    Exhibit
C

    


    Development
Program

    


    ***

     

     

     

     

     

     

     

     

     

     

     

     

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    Exhibit
D

    


    Basic Business Terms for a
License Agreement


    


     

    


    
      	
              Grant:

            	
              Exclusive
      right to make, have made, import, export, use, offer for sale and sell
      pharmaceutical formulations of alpha interferon, including without
      limitation interferon alpha-2b, utilizing the Biphasix Technology within
      the Field, with right to
sublicense.

            


    

    


    
      	
              Field:

            	
              Topical
      alpha interferon formulations

            


    

    


    Territory:               
Worldwide

    


    Duration:               
Life of patents

    


    License
fees:                         $250K             
Exercise of option (within 60 days of phase III completion)

    $500K                      NDA
filing in the US for Primary Indication

    $500K                      HRD
filing in the EU for Primary Indication

    $2.0M                      NDA
approval in the US for Primary Indication

    $1.0M                      HRD
approval in the EU for Primary Indication

    $2.0M                      NDA
approval in the US for Secondary Indication

    $1.0M                      HRD
approval in the EU for Secondary Indication

    


    $3.0M                      When
Net Sales first reach $50M/yr.

    $5.0M                      When
Net Sales first reach $100M/yr.

    $8.0M                      When
Net Sales first reach $150M/yr.

    --------

    $23.25M                  Total
fees

    


    (Each of
the above license fees shall only be payable once on the first occurrence of the
relevant triggering event.)

    


    Royalty:                
5%  on Net Sales up to $50M

    6%  on Net Sales between
$50-$100M

    7%  on Net Sales over
$100M

     


    
      
         


      

      
         


        
          

        

      

      
         


      

    


    


    Exhibit
E

     

    Form of Initial Press
Release

    


     

    


    HELIX
BIOPHARMA GRANTS BIPHASTXTM LICENSE OPTION TO SCHERING-PLOUGH

    


    


    Helix
BioPharma today announced that it has signed an agreement with Schering-Plough
Corporation
of Kenilworth, N.1, which grants Schering-Plough the option to obtain an
exclusive

    worldwide
license to use Helix BioPharma's BIPHASIXTM technology in pharmaceutical
products
containing alpha interferon. As part of the license option, Schering-Plough will
supply

    Helix
BioPharma, at no charge, with a quantity of interferon alfa-2b for use in Helix
BioPharma's
planned development program for an interferon alfa-2b BIPHASIXTM cream
for

    the
treatment of genital warts and cervical dysplasia.

    


    Schering-Plough'
s option may be exercised at any time up to a specified period following the
successful
completion of Phase Ill clinical trials. Included in the option agreement are
terms for the grant
of a license to Schering-Plough that provides for milestone payments and
royalties on product
sales:

    


    "We are
very pleased to have signed this agreement with Schering-Plough, the world
leader in the
production and marketing of alpha interferon products, and we look forwardto
working with them on
this important project," said Jerome McElroy, President and Chairman of Helix
BioPharma: