Exhibit 10.1


 


	
  CONFIDENTIAL
  TREATMENT REQUESTED

  	
   

  
	
  UNDER
  17 C.F.R §§ 200.80(b)4, AND 240.24b-2

  	
  EXECUTION COPY

  



 


AMENDMENT #1 TO THE PRODUCT
DEVELOPMENT AND COMMERCIALIZATION AGREEMENT


 


This
AMENDMENT #1 TO THE PRODUCT DEVELOPMENT AND
COMMERCIALIZATION AGREEMENT (this “Amendment”)
is entered into and made effective as of the 24th day of February 2010
(the “Amendment Date”) by and
between Regulus Therapeutics Inc., a Delaware corporation having its principal
place of business at 1896 Rutherford Road, Carlsbad, CA 92008 (“Regulus”), and Glaxo Group Limited, a
company existing under the laws of England and Wales, having its registered
office at Glaxo Wellcome House, Berkeley Avenue, Greenford, Middlesex, UB6 0NN,
England (“GSK”).  Regulus and GSK are each referred to herein
by name or as a “Party” or,
collectively, as “Parties.”


 


RECITALS


 


WHEREAS, Regulus and GSK are parties to the Product
Development and Commercialization Agreement dated April 17, 2008 (the “Agreement”) and the Exclusive License and
NonExclusive Option Agreement dated February 24, 2010 (the “SPC-3649 Agreement”;


 


WHEREAS, GSK desires to include mir-122 as one of
the four Collaboration Targets (and thereby including Regulus’ drug discovery
and development program focused on mir-122) under the Agreement, and Regulus
desires to grant GSK such inclusion;


 


WHEREAS, the Parties desire to waive Section 12.4
of the Agreement in its entirely in connection with such inclusion of mir-122
as one of the four Collaboration Targets; and


 


WHEREAS, on or about the Amendment Date, Regulus
shall deliver to GSK a convertible promissory note pursuant to which GSK shall
lend Regulus the amount specified therein (the “Second Convertible Promissory Note”).


 


NOW, THEREFORE, in consideration of the
premises and mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Parties, intending to be hereby bound, do hereby agree as follows:


 


1.1          Interpretation.


 


1.1.1       The capitalized terms
used and not otherwise defined in this Amendment shall have the meanings set
forth in the Agreement.


 

















 


1.1.2       Other
Defined Terms.


 


(a)           “Lead
Compound” means the Collaboration Compound in the Regulus Mir-122
Program that is most advanced with respect to the Research Plan and Early
Development Plan for the Regulus Mir-122 Program.


 


(b)           “Mir-122”
means the miRNA having the miRBase Accession Number [***], and the sequence
[***].


 


(c)           “Regulus(‘)
Mir-122 Program” shall mean any miRNA Compound designed to interfere
with or inhibit (i.e. “directed to” or “directed against”) Mir-122, which
compound was either (i) identified or discovered by Regulus or any of its
Affiliates or any of its Founding Companies prior to the Amendment Date or (ii) is
discovered or identified by or on behalf of Regulus or any of its Affiliates in
accordance with the applicable Research Program).


 


(d)           “[***]” means
(a) the proprietary [***] compound [***] on the Amendment Date [***], and (b) any
and all salts, crystalline and amorphous forms, and solvates (including
hydrates) thereof.  The sequence and
chemistry of SPC-3649 is described in PCT Publication [***], published
[***].  Solely with respect to Section 1.4
of this Amendment, the definition of [***] may be expanded as set forth in Section 1.4.2
of this Amendment.


 


(e)           “Stanford” means
The Board of Trustees of the Leland Stanford Junior University.


 


(f)            “Stanford
License Agreement” means the Co-Exclusive License Agreement dated August 31,
2005 among Stanford and the Parent Companies (as assigned by Isis to Regulus on
July 13, 2009).


 


(g)           “Stanford
Patent(s)” means any Patent Right licensed under the Stanford
License Agreement.  A list of the
Stanford Patents as of the Amendment Date is attached hereto under Exhibit I.


 


1.1.3       Amendment
and Restatement of Section 1.59 of Agreement.  Section 1.59 (definition of
Field) of the Agreement, is hereby amended, restated and replaced in its
entirety by the following:


 


“1.59  “Field” shall mean (a) the
treatment and/or prophylaxis of any or all Indications and (b) also, to
the extent that Regulus or GSK, whichever is the licensing Party hereunder,
Controls diagnostic rights, the diagnosis of any or all Indications, to the
extent such diagnostic rights are necessary 


 


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or important to Commercialize a
Licensed Product or where the absence of Control by the Commercializing Party,
of diagnostic rights could reasonably be considered to materially adversely
affect the sales of the Licensed Product; provided, however, that solely
with respect to [***], “Field” shall be limited to the treatment and/or
prophylaxis of hepatitis C virus.”


 


1.1.4       All references to “Dollars”
mean U.S. Dollars.  The use of the
singular form of a defined term also includes the plural form and vice versa, except where expressly noted.
The use of the word “including” shall mean “including without limitation”.  The use of the words “herein,” “hereof” or “hereunder,”
and words of similar import, refer to this Amendment in its entirety and not to
any particular provision hereof.


 


1.2          Addition of
Mir-122 as Collaboration Target and Program.


 


1.2.1       The Parties hereby agree
that, effective as of the Amendment Date, Mir-122 shall be added as one of the
four Collaboration Targets and that Regulus’ Mir-122 Program will be added as a
Program under the Agreement.  The Parties
agree that for purposes of adding the Regulus Mir-122 Program to the Agreement,
the provisions of Section 3.2.1 will be deemed to be satisfied. Regulus
will conduct the Regulus Mir-122 Program in accordance with the terms and
conditions of the Agreement, including the provisions of Article 3 of the
Agreement. Regulus will prepare and present a Research Plan for the Regulus
Mir-122 Program to the Mir-122 Joint Program Subcommittee for approval within
sixty (60) days of the Amendment Date. The Research Collaboration Term for the
Regulus Mir-122 Program will commence as of the Amendment Date. GSK shall have
a Program Option with respect to Regulus’ Mir-122 Program, in accordance with the
terms and conditions of the Agreement; provided, however,
the restrictions set forth in Section 4.1.3 and Article 7 of the
Agreement will not restrict or prevent Regulus or its Parent Companies from
practicing outside the Field with respect to [***].


 


1.2.2       Within thirty (30) days of
the Amendment Date, the parties will form a Joint Program Subcommittee under Section 2.2.1
of the Agreement that is specifically related to Regulus’ Mir-122 Program (the “Mir-122 Joint Program Subcommittee”).  For purposes of clarity, with respect to the
Regulus Mir-122 Program, any reference in the Agreement to the Joint Program
Subcommittee will be a reference to the Mir-122 Joint Program Subcommittee.


 


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1.3          Waiver.  For so long as GSK has not breached its
payment obligation under Section 5.1, 5.3 and 5.4 of the SPC-3649
Agreement (and such breach has not been cured by the ninetieth (90th) day following Regulus’ written notice
to GSK of such breach), Regulus hereby waives all of its right under Section 12.4
of the Agreement.


 


1.4          Future Rights.


 


1.4.1       If, at any point, after the Amendment Date, Regulus, or any of its
Affiliates or Parent Companies engages [***] in discussions of an arrangement
likely to result in the creation of Third Party License Pass-Through Costs
related to the acquisition of the right to Develop or Commercialize [***],
Regulus will notify GSK of such discussions, and Regulus will keep GSK
reasonably informed as to the status and contents of such discussions and will
consider in good faith any GSK comments with regard to the amount or structure
of any Third Party License Pass-Through Costs payable for [***]; provided, however, this obligation will not apply to
confidential discussions related to the acquisition of all or substantially all
of [***] business.  Also, if, at any
point, after the Amendment Date Regulus, or any of its Affiliates or Parent
Companies Controls the right to Develop and/or Commercialize [***] in
the Field, then Regulus will
promptly (but in any case within thirty (30) days) provide written notice to
GSK and GSK will then have forty-five (45) days to conduct a due diligence
evaluation of [***] and notify Regulus in writing whether GSK elects that [***]
be added as a part of the Regulus Mir-122
Program as a Collaboration Compound. Along with such notice Regulus will send
to GSK all information and data related to [***], including details of any
Third Party License Pass-Through Costs payable for [***] reasonably necessary
for GSK to conduct an evaluation of [***]. If GSK fails to notify
Regulus within such forty- five (45) day period that GSK would like to add
[***] to the Regulus Mir-122 Program, Regulus (or the applicable Parent Company) will be free to Develop and/or
Commercialize [***] without any obligation to GSK.  If GSK elects to add [***] to the Regulus
Mir-122 Program, GSK shall obtain the
rights thereto as set forth in Section 1.2 herein; provided, GSK
agrees to pay [***] the costs (including but not limited to any upfront
payments and equity premiums) to acquire control of [***] and [***] any Third
Party License Pass-Through Costs applicable to [***], as Program-Specific
Technology in accordance with Section 6.8.2 of the Agreement.  Once [***] becomes a Collaboration Compound,
GSK will pay to Regulus all previously unpaid milestones set forth in Section 6.4
of the Agreement, and as amended by Section 1.6 hereto for Milestone
Events that have been achieved by [***] prior to the time it became a
Collaboration Compound.  By way of example
only, if Regulus acquires Control of [***] after Phase 2 


 


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Clinical Trials have been initiated with
[***] and GSK has not yet paid Regulus any milestones for the Regulus Mir-122
Program, GSK would pay Regulus the amounts corresponding to the Candidate
Selection, Initiation of Phase 1 Clinical Trials and Initiation of Phase 2
Clinical Trials Milestone Events.  For
clarity purposes, such milestone(s) shall not be paid more than once with
respect to Collaboration Compounds in the Regulus Mir-122 Program.  If, prior to GSK’s exercise of its Program
Option for the Regulus Mir-122 Program, Regulus’ Mir-122 Program is terminated
such that it is no longer a Program under the Agreement, then GSK’s right to
add [***] to the Regulus Mir-122 Program under this Section 1.4 shall
automatically terminate.


 


1.4.2       If in the same
transaction (or series of transactions) that Regulus, its Affiliate or Parent
Companies (as the case may be) obtained Control of [***], such Person also
acquired Control of another miRNA Compound designed to interfere with or
inhibit (i.e. “directed to” or “directed against”) Mir-122 (each a “Backup Mir-122 Compound”) in the Field, then solely with
respect to this Section 1.4, the definition of [***] will include such
Backup Mir-122 Compound(s).


 


1.5          Purchase of Regulus
Promissory Note.  GSK agrees to lend
Regulus an additional Five Million U.S. Dollars ($5,000,000).  The loan shall be evidenced by a convertible
promissory note, in the form of the Second Convertible Promissory Note,
attached hereto as Exhibit A. 
Within [***] Business Days of the date on or after the Amendment Date
that GSK receives an invoice from Regulus therefor, (a) GSK shall pay
Regulus Five Million U.S. Dollars ($5,000,000) by wire transfer of immediately
available funds to an account designated by Regulus in writing and (b) Regulus
shall simultaneously deliver to GSK the executed Second Convertible Promissory
Note in the amount of Five Million U.S. Dollars ($5,000,000).


 


1.6          Amendment to Milestone
Payments.  Notwithstanding Section 6.4
of the Agreement, there shall be no Discovery Milestone payment with respect to
the Regulus Mir-122 Program, and instead the payment due upon the Regulus
Mir-122 Program reaching Candidate Selection Stage shall be [***], payable
within [***] days of receipt by GSK of an invoice sent from Regulus on or after
the date of achievement of such Milestone Event.


 


1.7                          Press
Release; Disclosure of Amendment.  On
or promptly after the Amendment Date, the Parties shall individually or jointly
issue a public announcement of the execution of this Amendment in form and
substance substantially as set forth on Exhibit B.


 


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1.8          Representations and
Warranties of Regulus.  Regulus
hereby represents and warrants to GSK, as of the Amendment Date, that:


 


1.8.1       Regulus is the owner of, or
otherwise has the right to grant all rights and licenses it purports to grant
to GSK with respect to Regulus’ Mir-122 Program under this Amendment;


 


1.8.2       Regulus has not withheld
from GSK any material data or any material correspondence, including to or from
any Regulatory Authority in Regulus’ possession that would be material and
relevant to a reasonable assessment of the scientific, commercial, safety,
regulatory and commercial liabilities and commercial value of  Regulus’ Mir-122 Program; and


 


1.8.3       To the best of its knowledge
and belief, without having conducted any special inquiry, no written claims
have been made against Regulus or its Founding Companies alleging that any of
the Regulus Patents are invalid or unenforceable or infringe any intellectual
property rights of a Third Party.


 


1.9          Severability.  If any provision hereof should be held
invalid, illegal or unenforceable in any jurisdiction, the Parties shall
negotiate in good faith a valid, legal and enforceable substitute provision
that most nearly reflects the original intent of the Parties and all other
provisions hereof shall remain in full force and effect in such jurisdiction
and shall be liberally construed in order to carry out the intentions of the
Parties hereto as nearly as may be possible. 
Such invalidity, illegality or unenforceability shall not affect the
validity, legality or enforceability of such provision in any other
jurisdiction.


 


1.10        Headings.  Headings used herein are for convenience only
and shall not in any way affect the construction of or be taken into
consideration in interpreting this Amendment.


 


1.11        Further Actions.  Each Party shall execute, acknowledge and
deliver such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the expressly stated purposes
and the clear intent of this Amendment.


 


1.12        Counterparts.  This Amendment may be signed in counterparts,
each and every one of which shall be deemed an original, notwithstanding
variations in format or file designation which may result from the electronic
transmission, storage and printing of copies of this Amendment from separate
computers or printers.  Facsimile
signatures and signatures transmitted via PDF shall be treated as original
signatures.


 


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1.13        Effect of
the Agreement.  Unless
otherwise explicitly amended or changed hereby, all other terms and conditions
of the Agreement shall remain in full force and effect.


 


1.14   Stanford License Considerations. 
For purposes of clarification, with respect to any sublicense granted by
Regulus to GSK under the Stanford Patents, GSK acknowledges and agrees that (a) such
sublicense is subject and subordinate to the terms and conditions of the
Stanford License Agreement, (b) Stanford is a third party beneficiary to
this Agreement as it relates to Articles 8, 9 and 10 of the Stanford License
Agreement, such that Stanford may directly enforce Articles 8, 9 and 10 of the
Stanford License Agreement against GSK, and (c) if Stanford terminates the
Stanford License Agreement as it relates to Regulus (but not as it relates to
the Agreement or this Amendment, GSK will assume (and be directly liable to
Stanford for) all Third Party License Pass-Through Costs and all Third Party
and Parent-Originated Rights and Obligations due Stanford in connection with
the  Agreement and this Amendment; provided,
that if, by operation of this Section 1.14 GSK actually pays any such
costs or fees to Stanford in satisfaction of any amounts owed under Section 4.5,
Article 7 or Section 13.2 of the Stanford License Agreement, then GSK
shall have the right, in addition to all other rights available at law and in
equity, to [***] such payments against any other amounts GSK may owe to Regulus
under the Agreement or this Amendment. 
If GSK exercises its right of [***] under this Section 1.14, then
GSK will provide written notice to Regulus of such [***] claim.


 


1.15.  Updates
to Certain Schedules and Exhibits.


 


1.15.1     Schedule 6.8.2 of the
Agreement is amended to include the Patent Rights listed in Exhibit C-1
attached to this Amendment.


 


1.15.2     Exhibit B of the
Agreement is amended to include the Patent Rights listed in Exhibit C -2
attached to this Amendment.


 


1.15.3     Exhibit C of the
Agreement is amended to include the Patent Rights listed in Exhibit C -3
attached to this Amendment.


 


1.15.4     Exhibit D of the
Agreement is amended to include the Patent Rights listed in Exhibit C -4
attached to this Amendment.


 


1.15.5     Exhibit F of the
Agreement is amended to include the In-License Agreement listed in Exhibit C
-5 attached to this Amendment.


 


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1.16        Candidate
Selection Criteria; Target Product Profile,  PoC Criteria.  The parties agree that (i) the Candidate Selection Criteria for
Regulus’ Mir-122 Program are set forth on Exhibit J attached to this
Amendment; (ii) the initial draft Target Product Profile for Regulus’
Mir-122 Program is set forth on Exhibit K attached to this Amendment; and (iii) the
initial draft PoC Criteria for Regulus’ Mir-122 Program are set forth on Exhibit L
attached to this Amendment.


 


* - * - * - *


 


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IN WITNESS WHEREOF, the Parties have caused
this Amendment to be executed by their duly authorized representatives as of
the Amendment Date.


 


	
  Regulus
  Therapeutics Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Kleanthis G.
  Xanthopoulos

  	
   

  	
   

  
	
  Name:

  	
  Kleanthis
  G. Xanthopoulos

  	
   

  	
   

  
	
  Title:

  	
  President
  and CEO

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Glaxo
  Group Limited

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Victoria Whyte

  	
   

  	
   

  
	
  Name:

  	
  Victoria
  Whyte

  	
   

  	
   

  
	
  Title:

  	
  For
  and on behalf of the Wellcome Foundation Limited

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  	
   

  
										



 
















 


EXHIBIT A


 


Second
Convertible Promissory Note


 


See attached.


 

















 


THIS NOTE AND ANY SHARES ACQUIRED UPON CONVERSION OF THIS NOTE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER SUCH ACT OR
PURSUANT TO AN OPINION OF COUNSEL SATISFACTORY TO REGULUS THERAPEUTICS, ALNYLAM
OR ISIS, AS APPLICABLE, THAT SUCH REGISTRATION IS NOT REQUIRED.


 


CONVERTIBLE
PROMISSORY NOTE


 


	
  $5,000,000

  	
   

  	
  February24, 2010

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  No. 2

  	
   

  



 


FOR
VALUE RECEIVED, Regulus Therapeutics Inc., a Delaware corporation (the “Maker”),
promises to pay to Glaxo Group Limited or its assigns (the “Holder”) the
principal sum of $5,000,000, together with interest on the unpaid principal
balance of this Note from time to time outstanding at the rate per annum equal
to [***] (as defined below) until paid in full. Subject to the conversion
provisions set forth herein, all principal and accrued interest shall be due
and payable on the earlier to occur of [***] (the “Anniversary Date”) or (ii) a
Change in Control (as defined below).


 


Interest
on this Note shall be computed on the basis of a year of 365 days for the
actual number of days elapsed and shall accrue, [***] on the last day of each
[***] and as of the Anniversary Date (or any payment date prior thereto).  All payments by the Maker under this Note
shall be in immediately available funds.


 


1.             Definitions.  For purposes of this Note:


 


(a)           “Change in
Control” shall mean (i) any merger or consolidation to which the Maker
is a party (except any merger or consolidation in which the holders of voting
securities of the Maker immediately prior to such merger or consolidation
continue to hold, immediately following such merger or consolidation and in
approximately the same relative proportions as they held voting securities of
the Maker, at least 51% of the voting power of the securities of (A) the
surviving or resulting corporation, or (B) the parent corporation of the
surviving or resulting corporation if the surviving or resulting corporation is
a wholly-owned subsidiary of such parent corporation immediately following such
merger or consolidation), (ii) the reduction below 50% in the aggregate
beneficial ownership by the Guarantors (as defined below) of the outstanding
voting power of the Maker or (iii) the sale of all or substantially all of
the assets of the Maker. Notwithstanding the foregoing, a Qualified Financing
will not be considered a Change in Control.


 


(b)           “Guarantors”
shall mean Alnylam Pharmaceuticals, Inc., a Delaware corporation (“Alnylam”)
and Isis Pharmaceuticals, Inc., a Delaware corporation (“Isis”).


 





















 


(c)           “License and
Option Agreement” shall mean the Product Development and Commercialization
Agreement by and between the Maker and Holder dated April 17, 2008, as
amended.


 


(d)           “Prime Rate”
shall mean for any [***] the prime rate of interest as of the first day of each
such [***] as published from time to time by The Wall Street Journal, National
Edition.


 


(e)           “Qualified
Financing” shall mean the first issuance of [***] by the Maker to bona fide
institutional investors, with immediately available gross proceeds to the Maker
of at least [***] (excluding any amount of this Note or other indebtedness of
the Maker that convert into equity as part of such financing).


 


2.             Automatic Conversion Upon Qualified Financing. 
Effective upon the closing of a Qualified Financing, all of the
outstanding principal and accrued interest under this Note (the “Outstanding
Amount”) will automatically be converted into shares of the same class and
series of capital stock of the Maker issued to other investors on the same
basis as the investment by such investors in the Qualified Financing (the “Qualified
Financing Securities”) and at a conversion price equal to the price per share
of Qualified Financing Securities paid by the other investors in the Qualified
Financing (the “Qualified Financing Price”), with any resulting fraction of a
share rounded down to the nearest whole share. 
Notwithstanding the foregoing, if the conversion of this Note pursuant
to this Section 2(a) would otherwise result in the Holder, together
with its affiliates, owning more than [***] of the outstanding capital stock of
the Maker, calculated on an as-converted fully-diluted basis (including as
outstanding shares of capital stock issuable upon exercise or conversion of all
outstanding stock options, warrants or other convertible securities of the
Maker, including any other convertible securities held by GSK), immediately
following the conversion of the Note [***], the Outstanding Amount shall be
converted either pursuant to the first sentence of this Section 2(a) or,
[***], into (i) that number of shares of Qualified Financing Securities that
would result in the Maker reaching, but not exceeding, [***], and (ii) an
amount in cash equal to the difference between (A) the product of (1) the
number of [***] Shares issued upon conversion, multiplied by (2) the
Qualified Financing Price and (B) the Outstanding Amount.  The Maker shall notify the Holder in writing
of the anticipated occurrence of a Qualified Financing at least [***] days
prior to the closing date of the Qualified Financing.


 


3.             Repayment.


 


(a)           If no Qualified
Financing or Change of Control has occurred prior to the Anniversary Date, the
Outstanding Amount, if any, will be [***] or, at the election of Regulus and
with the consent of Alnylam and/or Isis, as the case may be, registered and
unrestricted shares of Alnylam common stock and/or Isis common stock, with a
value equal to [***] of the then Outstanding Amount, provided that shares of
Alnylam and/or Isis common stock, as the case may be, are then traded on a
national securities exchange and provided further that the average daily trading
volume for such shares, as the case may be, is greater than [***] of the shares
proposed to be issued to the Holder.  For
purposes of this Section 3(a), the value of one share of common stock
shall be equal to the average closing price per share of such common stock, as
reported on the national securities exchange on which the stock is then traded,
during the [***] trading day period ending on (and including) the day that is
two days prior to the Anniversary Date.


 





















 


(b)           In the event
the Holder terminates the License and Option Agreement without cause or the
Maker terminates the License and Option Agreement as a result of a material
breach by the Holder, this Note may be prepaid in cash, in whole but not in
part and without any pre-payment penalty, prior to the Anniversary Date at the
election of the Maker and without the prior written consent of the Holder.


 


4.             Events of Default.  This
Note shall become immediately due and payable without notice or demand (but
subject to the conversion rights set forth herein) upon the occurrence at any
time of any of the following events of default (individually, an “Event of
Default” and collectively, “Events of Default”):


 


(a)           the Maker fails to pay any of the principal or interest under this
Note within 10 days of Maker’s receipt of written notice that such amount is
due and payable;


 


(b)           the Maker or either Guarantor files any petition or
action for relief under any bankruptcy, reorganization, insolvency or
moratorium law or any other law for the relief of, or relating to, debtors, now
or hereafter in effect, or seeks the appointment of a custodian, receiver, trustee
(or other similar official) of the Maker or either Guarantor or all or any
substantial portion of the Maker’s or either Guarantor’s assets, or makes any
assignment for the benefit of creditors or takes any action in furtherance of
any of the foregoing, or fails to generally pay its debts as they become due;


 


(c)           an involuntary petition is filed, or any proceeding
or case is commenced, against the Maker or either Guarantor (unless such
proceeding or case is dismissed or discharged within 60 days of the filing or
commencement thereof) under any bankruptcy, reorganization, arrangement,
insolvency, adjustment of debt, liquidation or moratorium statute now or hereafter in effect,
or a custodian, receiver, trustee, assignee for the benefit of creditors (or
other similar official) is applied or appointed for the Maker or either
Guarantor or to take possession, custody or control of any property of the
Maker or either Guarantor, or an order for relief is entered against the Maker
or either Guarantor in any of the foregoing; or


 


(d)           termination of the License and Option
Agreement by the Holder (or its assignee or successor under the License and
Option Agreement) by reason of breach of the License and Option Agreement by
the Maker.


 


Upon
the occurrence of an Event of Default, the Holder shall have then, or at any
time thereafter, all of the rights and remedies afforded creditors generally by
the applicable federal laws or the laws of the Commonwealth of Massachusetts.


 


5.             Guaranty.


 


(a)           Guaranty of
Payment. The Guarantors hereby jointly and severally guaranty to the Holder
the due and full payment within [***] of delivery of the Guaranteed Default
Notice (as defined below) and the performance of all of the indebtedness of the
Maker to 


 

















 


the
Holder for principal and accrued interest under this Note (the “Obligations”).
Subject to the conditions set forth herein, this Guaranty is an absolute,
unconditional, joint and several and continuing guaranty of the full and
punctual payment and performance of all of the Obligations and not of their
collectibility only.  Payments by the
Guarantors hereunder may be required by the Holder on any number of
occasions.  All payments by the
Guarantors hereunder shall be made to the Holder, in the manner and at the
place of payment specified therefor in this Note.  Notwithstanding the foregoing, the right of
the Holder to demand and receive payment of any Obligation under this Section 5
shall be subject to the following conditions precedent:  (i) the requested amount has become due
and payable under this Note, (ii) the Holder has given written notice of
the amount due to the Maker and the Guarantors, (iii) notwithstanding the
notice delivered by the Holder under clause (ii), the Maker has not paid the
Holder or its assigns such amount in full within 15 days of Maker’s receipt of
such notice (a “Guaranteed Default”), and (iv) the Guarantors have
received written notice from the Holder of such Guaranteed Default (the “Guaranteed
Default Notice”).


 


(b)           Waivers by
Guarantors; Holder’s Freedom to Act.  Each Guarantor agrees that the Obligations
will be paid and performed strictly in accordance with their respective terms,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Holder with
respect thereto.  Each Guarantor waives
promptness, diligences, presentment, demand, protest, notice of acceptance,
notice of any Obligations incurred and all other notices of any kind (except
the Guaranteed Default Notice and any other notice specifically required to be
given to such Guarantor under this Guaranty), all defenses which may be
available by virtue of any valuation, stay, moratorium law or other similar law
now or hereafter in effect, any right to require the marshalling of assets of
the Maker or any other entity or other person primarily or secondarily liable
with respect to any of the Obligations, any defense, setoff, counterclaim, or
claim of any nature or kind arising from the present or future lack of validity
or enforceability of any Obligation, and all suretyship defenses
generally.  Without limiting the
generality of the foregoing, each Guarantor agrees to the provisions of any
instrument evidencing or otherwise executed in connection with any Obligation
and agrees that the obligations of such Guarantor hereunder shall not be
released or discharged, in whole or in part, or otherwise affected by (a) the
failure of the Holder to assert any claim or demand or to enforce any right or
remedy against the Maker or any other entity or other person primarily or
secondarily liable with respect to any of the Obligations; (b) any
extensions, compromise, refinancing, consolidation or renewals of any
Obligation; (c) any change in the time, place or manner of payment of any
of the Obligations or any rescissions, waivers, compromise, refinancing,
consolidation or other amendments or modifications of any of the terms or
provisions of the Note or any other agreement evidencing, securing or otherwise
executed in connection with any of the Obligations, (d) the addition,
substitution or release of any entity or other person primarily or secondarily
liable for any Obligation; (e) the adequacy of any means of obtaining
repayment of any of the Obligations; or (f) any other act or omission
which might in any manner or to any extent vary the risk of such Guarantor or
otherwise operate as a release or discharge of such Guarantor, all of which may
be done without notice to such Guarantor. 
To the fullest extent permitted by law, each Guarantor hereby expressly
waives any and all rights or defenses arising by reason of (i) any “one
action” or “anti-deficiency” law which would otherwise prevent the Holder from
bringing any action, including any claim for a deficiency, or exercising any
other right or remedy (including any right of set-off), against such Guarantor
or (ii) any other law which in any other way would otherwise require any
election of remedies by the Holder.


 





















 


(c)           Unenforceability
of Obligations Against the Maker.  If for any reason the Maker has no legal
existence or is under no legal obligation to discharge any of the Obligations,
or if any of the Obligations have become irrecoverable from the Maker by reason
of the Maker’s insolvency, bankruptcy or reorganization or by other operation
of law or for any other reason, this Guaranty shall nevertheless be binding on
each of the Guarantors to the same extent as if such Guarantor at all times had
been the principal obligor on all such Obligations.  In the event that acceleration of the time
for payment of any of the Obligations is stayed upon the insolvency, bankruptcy
or reorganization of the Maker, or for any other reason, all such amounts
otherwise subject to acceleration under the terms of the Notes or any other
agreement evidencing, securing or otherwise executed in connection with any
Obligation shall be immediately due and payable by the Guarantors.


 


(d)           Waiver of
Rights Against Maker and Subrogation.  Until the final payment and performance in
full of all of the Obligations, each of the Guarantors shall not exercise and
hereby forbears from exercising any rights against the Maker or any other
person or entity (other than the other Guarantor) arising as a result of
payment by such Guarantor hereunder, by way of subrogation, reimbursement,
restitution, contribution or otherwise, and will not prove any claim in
competition with the Holder in respect of any payment hereunder in any bankruptcy,
insolvency or reorganization case or proceedings of any nature; the Guarantors
will not claim any setoff, recoupment or counterclaim against the Maker in
respect of any liability of the Guarantors to the Maker.


 


6.             Miscellaneous.


 


(a)           All payments by
the Maker under
this Note shall be made without set-off or counterclaim and be free and clear
and without any deduction or withholding for any taxes or fees of any nature
whatever, unless the obligation to make such deduction or withholding is
imposed by law.


 


(b)           No delay or
omission on the part of the Holder in exercising any right under this Note
shall operate as a waiver of such right or of any other right of the Holder,
nor shall any delay, omission or waiver on any one occasion be deemed a bar to or
waiver of the same or any other right on any future occasion.


 


(c)           The Maker and every endorser or
guarantor of this Note, regardless of the time, order or place of signing,
hereby waives presentment, demand, protest and notices of every kind and
assents to any permitted extension of the time of payment and to the addition
or release of any other party primarily or secondarily liable hereunder.


 





















 


(d)           Any notices,
requests and other communications hereunder shall be in writing and shall be
personally delivered or sent by express delivery service, registered or
certified air mail, return receipt requested, postage prepaid, or by facsimile
(confirmed by prepaid registered or certified air mail letter or by
international express delivery mail) (e.g., FedEx), and shall be deemed to have
been properly served to the addressee upon receipt of such written
communication, to the following addresses of the parties, or such other address
as may be specified in writing to the other parties hereto:


 


	
  if
  to Holder:

  	
   

  	
  Glaxo
  Group Limited

  
	
   

  	
   

  	
  980
  Great West Road

  
	
   

  	
   

  	
  Brentford,
  Middlesex TW8 9GS

  
	
   

  	
   

  	
  United
  Kingdom

  
	
   

  	
   

  	
  Facsimile:

  	
  44-20
  8049 6904

  
	
   

  	
   

  	
  Attention:

  	
  Company
  Secretary

  
	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
  GlaxoSmithKline

  
	
   

  	
   

  	
  200
  N 16th Street

  
	
   

  	
   

  	
  Mail
  Code FP2355

  
	
   

  	
   

  	
  Philadelphia,
  PA 19002

  
	
   

  	
   

  	
  Facsimile:

  	
  215-751-5349

  
	
   

  	
   

  	
  Attention:

  	
  Vice
  President Legal Operations

  
	
   

  	
   

  	
   

  	
  Corporate
  Functions - US

  
	
   

  	
   

  	
   

  
	
  if
  to Maker:

  	
   

  	
  Regulus
  Therapeutics Inc.

  
	
   

  	
   

  	
  1896
  Rutherford Road

  
	
   

  	
   

  	
  Carlsbad,
  California 92008

  
	
   

  	
   

  	
  Facsimile:

  
	
   

  	
   

  	
  Attention:

  	
  President

  
	
   

  	
   

  	
   

  
	
  if
  to Guarantors:

  	
   

  	
  Alnylam
  Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  300
  Third Street, 3rd Floor

  
	
   

  	
   

  	
  Cambridge,
  MA 02142

  
	
   

  	
   

  	
  Facsimile:

  	
  617-551-8109

  
	
   

  	
   

  	
  Attention:

  	
  Vice
  President, Legal

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Isis
  Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  1896
  Rutherford Road

  
	
   

  	
   

  	
  Carlsbad,
  California 92008

  
	
   

  	
   

  	
  Facsimile:

  	
  760-268-4922

  
	
   

  	
   

  	
  Attention:

  	
  General
  Counsel

  



 


(e)           The Holder
agrees that no director or officer of the Maker or Guarantors shall have any
personal liability for the repayment of this Note.


 


(f)            This Note may
not be amended or modified except by an instrument executed by the Maker, the
Holder and each of the Guarantors.


 





















 


(g)           Until the conversion of this
Note, the Holder shall not have or exercise any rights by virtue hereof as a
member or stockholder of the Maker.


 


(h)           All rights and
obligations hereunder shall be governed by the laws of the Commonwealth of
Massachusetts (without
giving effect to principles of conflicts or choices of law) and this Note is
executed as an instrument under seal.


 


	
   

  	
   

  	
  MAKER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  REGULUS
  THERAPEUTICS INC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ALNYLAM
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ISIS
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
						



 
















 


EXHIBIT B


 


(Press Release)


 


Regulus Therapeutics and
GlaxoSmithKline Establish New Collaboration to Develop and Commercialize
microRNA Therapeutics Targeting miR-122


 


- miR-122 Represents a Novel “Host
Factor” Strategy for Treatment of Hepatitis C Infection —


 


- Further Demonstration of
Regulus Leadership in microRNA Science, Technology and Intellectual Property -


 


Carlsbad,
CA., February XX, 2010 — Regulus Therapeutics Inc.
today announced the establishment of a new collaboration with
GlaxoSmithKline (GSK) to develop and commercialize microRNA therapeutics
targeting microRNA-122 in all fields with Hepatitis C Viral infection (HCV) as
the lead indication.  Under the terms of
the new collaboration, Regulus will receive additional upfront and early-stage
milestone payments with the potential to earn more than $150 million in
miR-122-related combined payments, and tiered royalties up to
double digits on worldwide sales of products.


 


“This
new collaboration with GSK demonstrates the clear scientific leadership that
Regulus has established in advancing a whole new frontier of pharmaceutical
research.  microRNA therapeutics target
the pathways of human diseases, not just single disease targets, and hold
considerable promise as novel therapies across a broad range of unmet medical
needs,” said Kleanthis G. Xanthopoulos, Ph.D., President and Chief Executive
Officer of Regulus. “It also further validates Regulus’ microRNA product
platform built on fundamental biology of human diseases and intellectual
property, and also extends the therapeutic scope of our existing collaboration
formed with GSK in 2008.  Furthermore,
the funding from this alliance supports Regulus’ efforts in advancing high
impact, novel medicines based on microRNA biology to patients.”


 


The
collaboration provides GSK with access to Regulus’ comprehensive and robust
intellectual property estate.  Regulus
exclusively controls patent rights covering miR-122 antagonists and their use
as HCV therapeutics in the United States, Europe, and Japan, including but
not limited to the patent families which encompass:  the ‘Sarnow’ patent pertaining to the method
of use of anti-miR-122 to inhibit HCV replication, the ‘Esau’ patent
application claiming the use of anti-miRs targeting miR-122 as inhibitory
agents, the ‘Tuschl III’ patent claiming composition of matter for miR-122 and
complementary oligonucleotides, and the ‘Manoharan’ patent claiming antagomirs,
including antagomirs targeting miR-122.


 


miR-122
is a liver-expressed microRNA that has been shown to be a critical endogenous “host
factor” for the replication of HCV, and anti-miRs targeting miR-122 have been
shown to block HCV infection (Jopling et al. (2005) Science 309, 1577-81). In earlier work, scientists at
Alnylam and Isis demonstrated the ability to antagonize miR-122 in vivo using chemically modified single-stranded anti-miR
oligonucleotides. Further, work 


 

















 


by
Regulus scientists and collaborators showed that inhibiting miR-122 results in
significant inhibition of HCV replication in human liver cells, suggesting that
antagonism of miR-122 may comprise a novel “host factor” therapeutic strategy.
Regulus scientists have shown in multiple preclinical studies a robust HCV
antiviral effect following inhibition of miR-122.  Regulus plans to identify a clinical
development candidate in the second half of 2010 and file an investigational
new drug (IND) application in 2011.


 


About
microRNAs


 


The discovery of microRNA in humans is one of the most
exciting scientific breakthroughs in the last decade. microRNAs are small RNA
molecules, typically 20 to 25 nucleotides in length, that do not encode
proteins but instead regulate gene expression. Nearly 700 microRNAs have been
identified in the human genome, and more than one-third of all human genes are
believed to be regulated by microRNAs. As a single microRNA can regulate entire
networks of genes, these new molecules are considered the master regulators of
the genome. microRNAs have been shown to play an integral role in numerous
biological processes including the immune response, cell-cycle control,
metabolism, viral replication, stem cell differentiation and human development.
Many microRNAs are conserved across multiple species indicating the
evolutionary importance of these molecules as modulators of critical biological
pathways. Indeed, microRNA expression or function has been shown to be
significantly altered in many disease states, including cancer, heart failure
and viral infections. Targeting microRNAs opens the possibility of a novel
class of therapeutics and a unique approach to treating disease by modulating
entire biological pathways.


 


About Hepatitis C Virus (HCV)


 


HCV
infection is a disease with an estimated prevalence of 170 million patients
worldwide, with more than 3 million patients in the United States. HCV shows
significant genetic variation in worldwide populations due to its frequent
rates of mutation and rapid evolution. There are six genotypes of HCV, with
several subtypes within each genotype, which vary in prevalence across the
different regions of the world. The response to treatment varies from
individual to individual underscoring the inadequacy of existing therapies and
highlights the need for combination therapies that not only target the virus
but endogenous “host factors” as well. Strategies that include the Regulus
miR-122 antagonist as part of emerging combination therapies to shorten
duration of treatment and interferon use, improve the safety profile and
sustained virologic response (SVR), increase the barrier to drug resistance,
and address difficult-to-treat genotypes hold significant potential to expand
the limited therapies available to physicians treating HCV patients.


 


About Regulus Therapeutics Inc.


 


Regulus
Therapeutics is a biopharmaceutical company leading the discovery and development
of innovative new medicines based on microRNAs. 
Regulus is targeting microRNAs as a new class of therapeutics by working
with a broad network of academic collaborators and leveraging oligonucleotide
drug discovery and development expertise from its founding companies Alnylam
Pharmaceuticals (Nasdaq:ALNY) and Isis
Pharmaceuticals (Nasdaq:ISIS). Regulus is
advancing microRNA therapeutics towards 


 

















 


the
clinic in several areas including hepatitis C infection,
cardiovascular disease, fibrosis, oncology, immuno-inflammatory diseases, and
metabolic diseases. Regulus’
intellectual property estate contains both the fundamental and core patents in
the field as well as over 600 patents and more than 300 pending patent
applications pertaining primarily to chemical modifications of oligonucleotides
targeting microRNAs for therapeutic applications.  In 2008, Regulus entered into a major
alliance with GlaxoSmithKline to discover and develop microRNA therapeutics for
immuno-inflammatory diseases. For more information, visit
www.regulusrx.com.


 


Forward-Looking Statements


 


This press release includes
forward-looking statements regarding the future therapeutic and commercial
potential of Regulus’, Alnylam’s, and Isis’ business plans, technologies and
intellectual property related to microRNA therapeutics being discovered and
developed by Regulus, including statements regarding expectations around the
relationship between GSK and Regulus. 
Any statement describing Regulus’, Alnylam’s, and Isis’ goals,
expectations, financial or other projections, intentions or beliefs is a
forward-looking statement and should be considered an at-risk statement,
including those statements that are described as such parties’ goals.  Such statements are subject to certain risks
and uncertainties, particularly those inherent in the process of discovering,
developing and commercializing drugs that are safe and effective for use as
human therapeutics, and in the endeavor of building a business around such
products.  Such parties’ forward-looking
statements also involve assumptions that, if they never materialize or prove
correct, could cause their results to differ materially from those expressed or
implied by such forward-looking statements. 
Although these forward-looking statements reflect the good faith
judgment of the management of each such party, these statements are based only
on facts and factors currently known by Regulus’, Alnylam’s, and Isis’
management as the case may be.  As a
result, you are cautioned not to rely on these forward-looking statements.  These and other risks concerning Regulus’,
Alnylam’s, and Isis’ programs are described in additional detail in Alnylam’s
and Isis’ annual reports on Form 10-K for the year ended December 31,
2008, and their most recent quarterly reports on Form 10-Q which are on
file with the SEC.  Copies of these and
other documents are available from Alnylam or Isis.


 

















 


EXHIBIT C-1


 


Additions to Schedule 6.8.2 of the Agreement


 


[***]


 

















 


EXHIBIT C-2


 


Additions to Exhibit B of the Agreement


 


Patents and Applications Licensed to Regulus by Isis on the Effective
Date


 


[***]


 

















 


EXHIBIT C-3


 


Additions to Exhibit C of the Agreement


 


[***]


 

















 


EXHIBIT C-4


 


Additions to Exhibit D of the Agreement


 


Listing of Patent Rights Licensed to Regulus


 


[***]


 

















 


EXHIBIT C-5


 


Additions to Exhibit F of the Agreement


 


[***]


 





















 


EXHIBIT I


 


[***]


 





















 


EXHIBIT J


 


Candidate
Selection Criteria for Regulus’ Mir-122 Program


 


[***]


 





















 


EXHIBIT K


 


Draft Target
Product Profile for Regulus’ Mir-122 Program


 


[***]


 





















 


EXHIBIT L


 


Draft PoC
Criteria for Regulus’ Mir-122 Program


 


[***]