Exhibit 10.19


 


CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
ASTERISKS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF
1934, AS AMENDED.


 


FIRST AMENDMENT

TO

RESEARCH COLLABORATION AND LICENSE AGREEMENT


 


This FIRST AMENDMENT TO RESEARCH COLLABORATION AND
LICENSE AGREEMENT (this “First Amendment”) dated as of October 20,
2004, is entered into by and between Merck & Co., Inc. (“MERCK”)
and ARENA PHARMACEUTICALS, INC., (“ARENA”) and amends that certain Research
Collaboration and License Agreement between MERCK and ARENA, effective as of October 21,
2002 (the “Agreement”).


 


MERCK and ARENA, for good and valuable
consideration, the receipt and sufficiency of which are hereby mutually
acknowledged, and intending to be legally bound hereby, agree as follows:


 


1                                         DEFINITIONS AND GENERAL TERMS


 


1.1                                 All capitalized terms used and not defined in
this First Amendment shall have the meaning as set out in the Agreement.


 


1.2                                 The term “Effective
Date of this First Amendment” shall be October 20, 2004.


 


1.3                                 Except as modified by this First Amendment,
the terms of the Agreement shall continue in full force and effect without
modification.


 


1.4                                 Notwithstanding anything else to the contrary
in this First Amendment, this First Amendment shall not be effective unless and
until the transactions contemplated by the Stock Purchase Agreement dated October 20,
2004, by and between MERCK and ARENA shall have closed.


 


2                                         ACTIVE COMPOUND DESIGNATION


 


The Parties hereby designate the compound identified
as *********** (and more specifically described in Exhibit 1 to this First
Amendment) an “Active Compound”.


 


3                                         EXCHANGE OF INFORMATION BETWEEN
SEPARATE PROGRAMS


 


The Parties agree that it would be beneficial to
both the collaborative Program and the Merck Internal Program (as such program
has been previously identified by Merck to Arena) to have useful scientific
information flow between the Merck Internal Program and the Program.  Consequently, MERCK shall disclose Merck
Internal Program Information (defined in Section 4.2 of this First
Amendment) to ARENA.  ARENA shall only be
entitled to use such Merck Internal Program Information to conduct the Program
research activities assigned to Arena under the Research Plan.  MERCK is entitled to use Program Information
and Inventions and Collaboration Information and Inventions in the Merck
Internal Program.


 


CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS MARKED BY
ASTERISKS


 


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4                                         AMENDMENTS TO THE AGREEMENT


 


As
of the Effective Date of this First Amendment, the Parties amend the Agreement
as follows:


 


4.1                                      The definition of “Active Compound” in
subsections 1.1(a) and (b) is amended to delete the words “for selectivity,
activity and potency in in vitro assays”.


 


4.2                                      The definition of “Merck Know-How” is deleted
in its entirety and replaced with the following:


 


“1.23                 “Merck Know-How” means: (A) all Merck Internal Program
Information (defined below), and (B) all other information,
materials (including compounds), and technology, including but not limited to,
discoveries, processes, methods, protocols, formulas, data, inventions
(including, Merck Program Information and Inventions, and Merck’s rights in
Collaborative Information and Inventions), know-how and trade secrets,
patentable or otherwise, which during the term of this Agreement are: (a) owned
or Controlled by MERCK; (b) not generally known; and (c) are necessary or
useful to ARENA in the performance of ARENA’s obligations under the Program,
but excluding Merck Patents and Collaboration Patents.  “Merck Internal Program
Information” means information, data, materials and know-how
developed by MERCK in the course of its research and development activities
specific to the Merck Internal Program, which are: (a) owned or Controlled by
MERCK; (b) not generally known; and (c) as reasonably determined by MERCK,
necessary or useful for the success of the Program, or necessary or useful to ARENA
in the performance of ARENA’s obligations under the Program.


 


4.3                                      The definition of “Program Term” is deleted
in its entirety and replaced with the following:


 


“Program Term” means
the period from the Effective Date until the fifth anniversary of the Effective
Date, or until such earlier date when the Program is terminated pursuant to Section 2.8,
or the Agreement is terminated pursuant to Article VIII.


 


4.4                                      The following subsection (e) is added to
Section 2.2 the Agreement:


 


“(e)                            From the second
anniversary date of the Effective Date until the end of the Program Term, ARENA
shall dedicate *********** FTEs to the Program to work directly and
exclusively on the Program, and MERCK will provide
funding for that number of FTEs at the Annual FTE Rate.  The JRC is entitled to modify the number of
ARENA FTEs dedicated to the Program, if such decision is unanimous.  For clarity, Merck shall not be entitled to
unilaterally change the number of ARENA FTEs dedicated to the Program and
funded by MERCK that would result in a reduction of FTEs.”


 


CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS MARKED BY
ASTERISKS


 


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4.5                                      The final sentence of Section 2.6, Joint
Research Committee, is deleted in its entirety and
replaced with the following:


 


“Notwithstanding and without limiting the foregoing,
a Senior Vice President of Merck Research Laboratories is not entitled to (i)
make a final decision under this Subsection regarding a change in the
number of ARENA FTEs dedicated to the Program and funded by MERCK that would
result in a reduction or an addition of FTEs, (ii) unilaterally amend the
Research Plan, (iii) modify the criteria set out in Attachment A, or (iv) make
a determination that a compound is not an Active Compound or release an Active
Compound from the Program.”


 


4.6                                      Section 2.8, Early Termination of the
Program, is deleted in its entirety and replaced
with the following:


 


“2.8                        Early Termination of the Program.  MERCK
is entitled to terminate the Program:


 


(a)                                  as set out in Article VIII;


 


(b)                                 for Technical Grounds, at any time upon thirty
(30) days prior written notice from MERCK.


 


(c)                                  in the event of a “Change of Control” (as
defined in Section 9.3) of ARENA by giving thirty (30) days advance
written notice to ARENA.


 


In the event of any termination under this Section,
MERCK will not be obligated to make any remaining FTE payments for Program
activities scheduled to take place after the termination date. ARENA and MERCK
shall each continue to use its diligent efforts to perform the activities
assigned to it under the Research Plan until the effective date of termination,
provided, however,
neither ARENA nor MERCK shall have any further obligation to conduct research
activities under this Agreement after the effective date of the termination of
the Program. For the avoidance of doubt,
the JRC must unanimously agree that Technical Grounds have occurred. In
the event of a termination of the Program for Technical Grounds under Section 2.8(b),
all licenses granted to MERCK under this Agreement become non-exclusive and
ARENA is released from its obligation of exclusivity under Section 2.4,
and MERCK is released from its obligations under Sections 2.9.3 and 3.3, but
not its obligations, if any, under Article V.


 


4.7                                      The penultimate sentence of Section 4.4
is deleted and replaced with the following:


 


“Except where and to the extent a Party determines
disclosure is required under applicable governing law or regulation, each Party
will allow the other Party at least two (2) business days or such other amount
of time as is reasonable under the circumstances to review and comment upon any
public announcement and


 


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press releases. 
If a Party determines that applicable governing law or regulation would
not allow a two business day review period, the disclosing Party shall notify
the other Party of such requirement and use its reasonable commercial efforts
to allow the other Party to review and comment upon such announcement in
advance of the disclosure.”


 


4.8                                      Section 5.4.1 (d) is deleted in its
entirety and replaced with the following:


 


“(d)                           Royalty tiers pursuant to Section 5.4.1(a) and Section 5.4.1(b)
shall be calculated based on worldwide Net Sales of Products in the Territory, provided that the determination of
whether the royalty shall be calculated under Section 5.4.1(a) or Section 5.4.1(b)
shall be determined on a country-by-country basis.”


 


4.9                                      Section 5.4.2 is deleted in its entirety
and replaced with the following:


 


“5.4.2                  Intentionally left blank.”


 


4.10                                The reference to “Section 2.8(d)” in subsection 8.2(b)
is deleted and replaced with “Section 2.8(b)”.


 


4.11                                The reference to “Section 2.8(e)” in subsection 9.3(b)
is deleted and replaced with “Section 2.8(c)”.


 


4.12                                Attachment A is deleted in its entirety and
replaced with the Attachment A to this First Amendment, which is hereby made
part of the Agreement.


 


5                                         RESEARCH PLAN


 


Immediately following the Effective Date of this
First Amendment, the JRC will update the Research Plan to reflect the
allocation of ARENA FTEs.  Until further
modified by the JRC, the Parties will continue to work under the existing
Research Plan to the extent practicable, and, to the extent not practicable,
the Research Plan shall mean work carried out to better understand the Targets
and to discover Active Compounds and Program Compounds.


 


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IN WITNESS WHEREOF, each of the Parties has caused
this First Amendment to be duly executed in the name of and on its behalf, as
of the Effective Date of this First Amendment.


 


 


	
   

  	
  ARENA PHARMACEUTICALS, INC.

  	
   

  	
  MERCK & CO, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Jack Lief

  	
   

  	
  By:

  	
   /s/ Raymond V. Gilmartin

  	
   

  
	
   

  	
  Name: Jack Lief

  	
   

  	
  Name: Raymond V. Gilmartin

  
	
   

  	
  Title:
  President & CEO

  	
   

  	
  Title:
  Chairman, President & CEO

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
    10/20/2004

  	
   

  	
   

  	
    10/20/2004

  	
   

  
	
   

  	
  Date

  	
   

  	
  Date

  
								



 


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ATTACHMENT A


 


Active Compound Criteria


 


Potency: *************************************************************************************************

***************************************************
*********************************************


 


Selectivity: ***********************************************************************************************

*********************************************************************************************************

**************


 


 


CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE PORTIONS MARKED BY
ASTERISKS


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EXHIBIT 1 to FIRST AMENDMENT


 


[***EXHIBIT 1 TO FIRST
AMENDMENT DELETED,

CONFIDENTIAL TREATMENT REQUESTED***]


 


 


CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED FOR THE PORTIONS MARKED BY ASTERISKS


 


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