Exhibit 10.4


 


	
   

  	
  CONFIDENTIAL TREATMENT

  
	
   

  	
  REQUESTED

  
	
   

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

  
	
   

  	
  240.24b-2

  



 


NOTICE OF GRANT AWARD


	
  NIH
  CHALLENGE GRANTS AND PARTNERSHIP

  	
   

  	
  Issue
  Date:08/01/2005

  



 


Department
of Health and Human Services


National
Institutes of Health


NATIONAL
INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES


 


Grant
Number: 1 UC1 AI067232-01


Principal
Investigator:         PHD


Project
Title:  Multivariate pathogen diagnostic
products based upon de*


 


DIRECTOR


IBIS
THERAPEUTICS, INC.


1891
RUTHERFORD ROAD


CARLSBAD,
CA 92008


UNITED
STATES


 


Budget
Period:  08/01/2005 - 07/31/2008


Project
Period: 08/01/2005 - 07/31/2008


 


Dear
Business Official:


 


The
National Institutes of Health hereby awards a grant in the amount of $4,873,632(see
‘‘Award Calculation’’ in Section I) to ISIS PHARMACEUTICALS, INC. in
support of the above referenced project. This award is pursuant to the
authority of 42 USC 241 P.L. 106 - 113 and is subject to terms and conditions
referenced below. Acceptance of this award including the Terms and Conditions
is acknowledged by the grantee when funds are drawn down or otherwise obtained
from the grant payment system.


 


Award
recipients are responsible for reporting inventions derived or reduced to
practice in the performance of work under this grant.  Rights to inventions vest with the grantee
organization provided certain requirements are met and there is acknowledgement
of NIH support.  In addition, recipients
must ensure that patent and license activities are consistent with their
responsibility to make unique research resources developed under this award
available to the scientific community, in accordance with NIH policy.  For additional information, please visit http://www.iedison.gov.


 


If
you have any questions about this award, please contact the individual(s)
referenced in the information below.


 


	
  Sincerely
  yours,

  
	
   

  
	
   

  
	
  /s/
  Pamela G. Fleming

  	
   

  
	
  Pamela
  G. Fleming

  
	
  Grants
  Management Officer

  
	
  NATIONAL
  INSTITUTE OF ALLERGY AND INFECTIOUS DISEASES

  



 


See
additional information below


 





















 


SECTION I
- AWARD DATA - 1 UC1 AI067232-01


 


AWARD
CALCULATION (U.S. Dollars):


 


	
  Salaries and
  Wages

  	
   

  	
  $

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fringe Benefits

  	
   

  	
  $

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Personnel Costs

  	
   

  	
  $

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Consultant Services

  	
   

  	
  $

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Equipment

  	
   

  	
  $

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Supplies

  	
   

  	
  $

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Travel Costs

  	
   

  	
  $

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Other Costs

  	
   

  	
  $

  	
  ***

  	
   

  
	
  Federal Direct Costs

  	
   

  	
  $

  	
  ***

  	
   

  
	
  Federal F&A Costs

  	
   

  	
  $

  	
  ***

  	
   

  
	
  APPROVED BUDGET

  	
   

  	
  $

  	
  4,873,632

  	
   

  
	
  TOTAL FEDERAL AWARD AMOUNT

  	
   

  	
  $

  	
  4,873,632

  	
   

  



 


FISCAL
INFORMATION:


   CFDA     93.856


   Number:


EIN:
1330336973A1


Document
Number: UAI067232A


 


IC/  CAN /   FY2005


AI/8460938/   4,873,632


 


NIH
ADMINISTRATIVE DATA:


PCC:
M63  B / OC: 41.4L /Processed: PFLEMING
050728 0957


 


SECTION II
- PAYMENT/HOTLINE INFORMATION - 1 UC1 AI067232-01


 


For
Payment and HHS Office of Inspector General Hotline Information, see the NIH
Home Page at http://grants.nih.gov/grants/policy/awardconditions.htm


 


SECTION III
- TERMS AND CONDITIONS - 1 UC1 AI067232-01


 


This
award is based on the application submitted to, and as approved by, the NIH on
the above-titled project and is subject to the terms and conditions incorporated
either directly or by reference in the following:


 


a.
The grant program legislation and program regulation cited in this Notice of
Grant Award.


b.
The restrictions on the expenditure of federal funds in appropriations acts, to
the extent those restrictions are pertinent to the award.


c.
45 CFR Part 74 or 45 CFR Part 92 as applicable.


 





















 


d.
The NIH Grants Policy Statement, including addenda in effect as of the
beginning date of the budget period.


e.
This award notice, INCLUDING THE TERMS AND CONDITIONS CITED BELOW.


 


(see
NIH Home Page at http://grants.nih.gov/grants/policy/awardconditions.htm
for certain references cited above.)


 


Carry
over of an unobligated balance into the next budget period requires Grants
Management Officer prior approval.


 


Treatment
of Program Income:


Additional
Costs


 


SECTION IV
- NIAID SPECIFIC TERMS OF AWARD -


 


THIS
AWARD CONTAINS GRANT SPECIFIC RESTRICTIONS. 
THESE RESTRICTIONS MAY ONLY BE LIFTED BY A REVISED NOTICE OF GRANT
AWARD.


 


This
award is made under the initiative, “Challenge Grants:  Biodefense and SARS Product Development”, RFA
AI-04-029, and is awarded at the NIAID Institute’s recommended level of
$4,873,632 total costs.


 


This
award is subject to the Terms and Conditions of Award as set forth in the
SPECIAL REQUIREMENTS section of RFA/PA AI-04-029, NIH Guide to Grants and
Contracts, 06/15/04. These special terms and conditions are incorporated in
this award by reference.


 


Copies
of the RFA may be accessed at the following Internet address: http://grants2.nih.gov/grants/guide/rfa-files/RFA-AI-03-016.html


 


The
conditions of award incorporate the details of the specific milestone and
timelines for achieving each milestone as described in the original grant
application dated 01/15/05, and include any modifications submitted by the
applicant on 06/15/05.


 


Milestone
Breakout (Time and Amount):


 


	
  MILESTONE 1:
  08/01/05 - 07/31/06

  	
   

  	
  $

  	
  ***

  	
   

  	
   

  	
   

  
	
  MILESTONE 2: 08/01/06 - 07/31/07

  	
   

  	
  $

  	
  ***

  	
   

  	
   

  	
   

  
	
  MILESTONE 3: 08/01/06 - 07/31/07

  	
   

  	
   

  	
   

  	
  $

  	
  ***

  	
   

  
	
  MILESTONE 4: 08/01/07 - 07/31/08

  	
   

  	
   

  	
   

  	
  $

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
  36 MONTHS

  	
   

  	
  $

  	
  4,873,632

  	
   

  	
   

  	
   

  
										



 


FUNDS
AVAILABLE ARE THOSE FOR THE ACHIEVEMENT OF MILESTONE #1 ($***) ALL FUNDS FOR
FUTURE MILESTONES ARE RESTRICTED FROM EXPENDITURE UNTIL DETERMINATION THAT MILESTONE
#1 GOALS ARE ACHIEVED.  RESTRICTED FUNDS MAY ONLY
BE USED UPON RECEIPT OF A REVISED AWARD LIFTING THE RESTRICTIONS.


 


To
achieve consideration of future milestones, the following information must be
submitted to NIAID Grants Management two months prior to the completion of the
next milestone:  1) 2590 application -
that includes a progress report; 2) Updated Product Development plans; 3)
updated information regarding assurances, budget and key personnel changes.


 


This
information should be sent to:


 





















 


Mary
Ledford, Grants Management Specialist


DEA,
NIAID, NIH, DHHS


Room 2129


6700-B
Rockledge Drive, MSC 7614


Bethesda,
MD 20892-7614 (Regular Mail)


Bethesda,
MD 20817 (Express Mail)


 


This
award may be adjusted in time or funding, as necessary, if the grantee fails to
meet the agreed upon milestones.   Any
changes in these items from the Notice of Grant Award will require concurrence
of NIH.


 


RESTRICTION:
Pending the establishment of a negotiated facilities and administrative
(F&A) cost rate, this award has been issued at the requested level,
however, only F&A costs of ***% salaries and wages for the achievement of
the first milestone ($***) may be expended/obligated at this time.   All other F&A costs are restricted from
drawdown.  The timeline to establish this
rate is *** days from the issuance of this Notice of Grant Award.  Immediately contact Ms. Ruth Bishop,
Office of Financial Management/NIH at (301) 496-2444 for assistance.


 


RESTRICTION:  The present award is being made without a
currently valid certification of Institutional Review Board (IRB) approval for
this project with the following restriction: 
Only activities that are clearly severable and independent from
activities that involve human subjects may be conducted under this award until
the project has received IRB approval consistent with 45 CFR Part 46 and
certification of IRB approval has been submitted to and accepted by the NIH
awarding component.


 


No
funds may be drawn down from the payment system and no obligations may be made
against Federal funds for research involving human subjects by the grantee or
any other site engaged in such research for any period not covered by an
OHRP-approved Assurance and IRB approval consistent with 45 CFR Part 46.


 


Failure
to comply with the above requirements may result in suspension and/or
termination of this award, withholding of support, audit disallowances, and/or
other appropriate action.


 


See
the NIH Grants Policy Statement, December 2003, (http://grants2.nih.gov/grants/policy/nihgps_2003/NIHGPS_Part5.htm),
pages 54-56 for specific requirements related to the protection of human subjects,
which are applicable to and a term and condition of this award.


 


This
award is subject to the Clinical Terms of Award included in Monitoring of
Clinical Trials and Studies - NIAID (see NIH Guide for Grants and Contracts, July 8,
2002, NOT AI-02-032). These terms and conditions are hereby incorporated by
reference, and can be accessed via the following World Wide Web address: http://www.niaid.nih.gov/ncn/pdf/clinterm.pdf
All submissions required by the NIAID Clinical Terms of Award must be forwarded
electronically or by mail to the responsible NIAID Program Official identified
on this Notice of Grant Award.


 


Awardees
who conduct research involving Select Agents (see 42 CFR 73 for the Select
Agent list; and 7 CFR 331 and 9 CFR 121 for the relevant animal and plant
pathogens) must complete registration with CDC (or USDA, depending on the
agent) before using NIH funds. No funds can be used for research involving
Select Agents if the final registration certificate is denied.


 





















 


The
proposed research has been identified as involving an infectious agent that may
warrant a biocontainment safety level of BSL3 or higher, according to the
current edition of Biosafety in Microbiological and Biomedical Laboratories
(BMBL; http://www.cdc.gov/od/ohs/biosfty/bmbl4/bmbl4toc.htm). It is the responsibility
of the Grantee Organization to assure that ALL Personnel, including those at
associated institutions, handling these highly pathogenic infectious agents
have received appropriate training and are working in appropriate
biocontainment safety level facilities, as recommended in the current edition
of BMBL.


 


In
addition, it is a term and condition of NIH funding that all recombinant DNA
research must be reviewed and approved by local Institutional Biosafety
Committees, as described in the NIH Guidelines for Research Involving
Recombinant DNA Molecules (http://www4.od.nih.gov/oba/rac/guidelines_02/NIH_Gdlnes_lnk_2002z.pdf).


 


None
of the funds in this award shall be used to pay the salary of an individual at
a rate in excess of $180,100 per year. 
Therefore, this award and/or future years are adjusted accordingly, if
applicable.


 


Maria
Y. Giovanni, Program Official


Phone:
301-496-1884   Email: mg37u@nih.gov  Fax: 301-480-4528


 


Mary
K. Ledford, Grants Specialist


Phone:
301-402-6446   Email:
mledford@niaid.nih.gov Fax: 301-480-3780


 


SPREADSHEET


GRANT
NUMBER: 1 UC1 AI067232-01


 


P.I.:
***


INSTITUTION:
ISIS PHARMACEUTICALS, INC.


 


	
   

  	
   

  	
  YEAR 01

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Salaries and Wages

  	
   

  	
  ***

  	
   

  
	
  Fringe Benefits

  	
   

  	
  ***

  	
   

  
	
  Personnel Costs

  	
   

  	
  ***

  	
   

  
	
  Consultant Services

  	
   

  	
  ***

  	
   

  
	
  Equipment

  	
   

  	
  ***

  	
   

  
	
  Supplies

  	
   

  	
  ***

  	
   

  
	
  Travel Costs

  	
   

  	
  ***

  	
   

  
	
  Other Costs

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL FEDERAL DC

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL FEDERAL F&A

  	
   

  	
  ***

  	
   

  
	
  TOTAL COST

  	
   

  	
  4,873,632

  	
   

  



 


	
   

  	
   

  	
  YEAR 01

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  F&A Cost Rate 1

  	
   

  	
  ***

  	
  %

  
	
  F&A Cost Base 1

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  F&A Costs 1

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  F&A Cost Rate 2

  	
   

  	
  ***

  	
  %

  
	
  F&A Cost Base 2

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  F&A Costs 2

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  F&A Cost Rate 3

  	
   

  	
  ***

  	
  %

  
	
  F&A Cost Base 3

  	
   

  	
  ***

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  F&A Costs 3

  	
   

  	
  ***