Document:

Unassociated Document

     

    

    Pacific
      Northwest

    National
      Laboratory

    Operated
      by Battelle for the

    U.S.
      Department of Energy

    

    

    February
      14, 2005

    

    

    Mr.
      Don
      Segna

    IsoRay
      Medical Inc.

    350
      Hills
      Street, St. 106

    Richland,
      WA 99352

    

    Dear
      Don:

    

    (1)
      CRADA PNNL/245 “Y-90
      Process Testing for IsoRay”,
      Effective December 22, 2004

    (2)
      Amendment 1 to CRADA PNNL/245, Effective February 14, 2005

    

    I
      am
      pleased to inform you that the subject CRADA, including Amendment 1, is now
      in
      effect. Battelle and IsoRay can now begin work under the terms of the CRADA
      and
      amended SOW. Enclosed is an original signature page signed by both Battelle
      and
      DOE Contracting Officers, as well as a fully executed Amendment 1 with DOE
      approval. If you have any questions about the CRADA or Amendment during the
      course of work, please contact me at the numbers listed below.

    

    Please
      note that your next payment of $26,766 is due to Battelle no
      later
      than
      March 1, 2005. Your payment should be sent to my attention. Your third and
      last
      payment of $26,765 is due to Battelle no later than April 1, 2005. 

    

    We
      are
      pleased to once again have IsoRay Medical as a CRADA participant.

    

    Sincerely,

    

    /s/
      Meg
      L. Soldat

    

    Meg
      L.
      Soldat

    CRADA
      Manager

    Intellectual
      Property Legal Services

    

    Enc.

    

    Cc:
      Larry
      Greenwood

    

    

    902
      Battelle Boulevard •
      P.O.
      Box
      999 •
      Richland,
      WA 99352

    

    Telephone
      509-375-2703 •
      Email
      Meg.Soldat@pnl.gov •
      Fax
      509-375-4487

    Amend.
      1
      Rev. 1/PNNL/245

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    AMENDMENT
      NO. 1

    STEVENSON-WYDLER
      (15 USC 3710)

    COOPERATIVE
      RESEARCH AND DEVELOPMENT

    AGREEMENT
      (hereinafter “CRADA”)
      No. 245

    

    BETWEEN

    

    BATTELLE

    as
      operator of Pacific Northwest National Laboratory

    under
      its U.S. Department of Energy Contract

    No.
      DE-AC05-76RLO 1830 (hereinafter “Contractor”)

    

    AND

    

    ISORAY
      MEDICAL INC.

    

    WHEREAS
      both Parties have entered into the above-certified CRADA and desire to amend
      the
      CRADA payment terms and duration;

    

    NOW
      THEREFORE, the Parties hereby agree to the following modifications:

    

    1.
      Amend
ARTICLE
      III. TERM,
      FUNDING AND COSTS
      as
      follows:

    

    (i)
      Delete Paragraph III.A. in its entirety and replace with the
      following:

    

    
      	 	
              A.

            	
              The
                effective date of this CRADA shall be the latter date of (1) the
                date on
                which is signed by the last of the Parties hereto or (2) the date
                on which
                it is approved by DOE.

            

    

    

    The
      work
      to be performed under this CRADA shall be completed within four (4) months
      from
      the effective date.

    

    (ii)
      Delete Paragraph III.E. in its entirety and replace with the
      following:

    

    
      	 	
              E.

            	
              Upon
                execution of this Amendment 1 by Participant, Participant shall provide
                Contractor with an initial payment of $26,766. On or before thirty
                (30)
                days from the date Participant executes this Amendment, Participant
                shall
                provide Contractor with a second payment of $26,766. On or before
                sixty
                (60) days from the date Participant executes this Amendment, Participant
                shall provide Contractor with a final payment of $26,765. No work
                will
                begin before the receipt of the initial cash advance. Failure of
                Participant to provide the necessary advance funding is cause for
                termination of the CRADA

            

    

    

    2.
      Amend
APPENDIX
      A -
      STATEMENT OF WORK
      to
      correct the funds-in cost information. A revised Appendix A is
      attached.

    

    Amend.
      1/PNNL/245

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    All
      other
      terms, conditions, rights, liabilities and obligations of the CRADA shall remain
      unchanged and in full force and effect.

    

    

    
      	
              ACCEPTED
                AND AGREED TO:

            	 	
              ACCEPTED
                AND AGREED TO:

            
	 	 	 
	
              FOR
                CONTRACTOR:

            	 	
              FOR
                PARTICIPANT:

            
	 	 	 
	
              By
                /s/
                Rod K. Quinn

            	 	
              By
                /s/
                Donald R. Segna

            
	 	 	 
	
              NAME
                Rod K. Quinn

            	 	
              NAME
                Donald R. Segna

            
	 	 	 
	
              TITLE
                Contracting Officer

            	 	
              TITLE
                VP
                Strategic Planning

            
	 	 	 
	
              DATE
                1/18/05

            	 	
              DATE
                1/14/05

            

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    Pacific
      Northwest

    National
      Laboratory

    Operated
      by Battelle for the

    U.S.
      Department of Energy

    January
      20, 2005

    

    Mr.
      Donald E. Moody

    Institutional
      Management Division

    Pacific
      Northwest Site Office

    U.S.
      Department of Energy

    Richland
      Field Office

    P.O.
      Box
      550, K8-50

    Richland,
      WA 99352

    

    Dear
      Mr.
      Moody

    

    Subject: Cooperative
      Research and Development Agreement (CRADA) Between Battelle Memorial Institute
      as operator of Pacific Northwest National Laboratory (PNNL) and IsoRay Medical
      Inc. (CRADA No. PNNL/245), Effective December 22, 2004

    Amendment
      1

    

    Attached
      is Amendment 1 to the above CRADA. The purpose of this Amendment is
      to:

    

    
      	
              ·

            	
              Revise
                the payment terms by requiring three equal payments over the next
                three
                months rather than one lump sum payment at the start of the CRADA
                project;
                and 

            
	 	 
	
              ·

            	
              Add
                one month to the CRADA project term to accommodate the delay in the
                start
                of the project from the original CRADA effective date (December 22,
                2004)
                until now when the payment terms were
                revised.

            

    

    

    If
      you
      approve of this Amendment, please have the appropriate party sign below and
      return this letter to my office. Please keep the attachment for your files.
      Thank you for your assistance in processing this Amendment.

    

    Sincerely,

    

    /s/
      Meg
      L. Soldat

    

    Meg
      L.
      Soldat

    CRADA
      Manager

    Intellectual
      Property Legal Services

    

    Att.

    

    DOE/PNSL
      Approval s   /s/ PJ     Date
      2/14/05

    

    

    902
      Battelle Boulevard •
      P.O.
      Box
      999 •
      Richland,
      WA 99352

    

    Telephone
      509-375-2703 •
      Email
      Meg.Soldat@pnl.gov •
      Fax
      509-375-4487

     

    SOW/PNNL/245

     

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

     

    APPENDIX
      A -
      STATEMENT OF WORK

    

    PACIFIC
      NORTHWEST NATIONAL LABORATORY (PNNL)

    AND

    IsoRay
      Medical Inc. (IsoRay)

    

    Y-90
      Process Testing for IsoRay

    

    I.
      PURPOSE

    

    The
      scope
      of work outlined in this project is intended to develop a new high purity,
      low
      waste, high efficiency process for separation of yttrium- 90 (Y-90) from
      strontium-90 (Sr-90). The objective of this project is to test a new process
      to
      milk highly purified Y-90 from its parent Sr-90. The goal is to exceed industry
      standards in purity and produce minimum waste in order to compete in the market
      with a superior product. The use of Y-90 as a medical isotope is a rapidly
      growing technology for treating various types of cancer. Several companies
      are
      currently producing Y-90 for cancer treatment. High purity is required because
      impurities will interfere with downstream isotope attachment to monoclonal
      antibodies and other bio molecules. In addition, the parent Sr-90 is a
      long-lived isotope, which deposits in bones and may expose the body to excessive
      radiation. There is a strong demand for Y-90 in the US and Europe as well.
      Single treatment centers are utilizing Curie quantities of Y-90 on a weekly
      basis. Some have expressed a desire for a more reliable supply with high purity.
      In addition, a recently approved product, Zevalin (trademark of Idec
      Pharmaceuticals Corporation), utilizes Y-90 and a number of clinical trials
      are
      underway in the US using Y-90 to treat cancer.

    

    PNNL
      is
      well experienced in Sr-90/Y-90, having conceived of several separation
      processes, developed and patented once, and sold high purity Y-90 produced
      from
      that patented process (under DOE’s
      National Isotopes Production and Distribution Program) from 1991 to 1998 with
      a
      28 fold sales increase during that time.

    

    Benefit
      to PNNL

    

    PNNL
      is
      seeking to expand its medical isotopes business as part of the business strategy
      for the Radiochemical Processing Laboratory. Battelle is working with IsoRay
      as
      well as a number of other companies for the beneficial use of isotopes for
      the
      treatment of cancer or other diseases, in line with the mission of
      DOE-NE.

    

    Benefit
      to IsoRay

    

    A
      successful CRADA project will allow IsoRay to enter the commercial market with
      an improved isotope that could lower the cost of treating various types of
      cancer while improving the treatment. Also it will bring some of the Y-90
      business back to the U.S. and provide high technology jobs to replace expected
      reduction of force on the Hanford site.

    

    II.
      APPROACH

    

    

    SOW/PNNL/245

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    IsoRay
      will provide their proprietary chemical processing methodology (Draft
      Provisional Patent Application, “Method
      of
      Separating and Purifying Yttrium-90 from Strontium-90”,
      Ref.
      480220.402P1, July 2004) and requirements for the performance of this project.
      PNNL will test 

    IsoRay’s
      proprietary new process to milk highly purified Y-90 from its parent Sr-90
      and
      determine how well the process works.

    

    Materials

    

    IsoRay
      will provide the Sr-90 for separation. PNNL is currently storing the Sr-90
      for
      IsoRay under project 45836. PNNL will supply laboratory reagents and
      supplies.

    

    Equipment

    

    IsoRay
      will provide laboratories and analytical capabilities for non-radioactive work.
      PNNL will provide hot cells, laboratories, and analytical capabilities for
      radioactive work.

    

    Test
      Plan

    

    A
      test
      plan has been prepared by the IsoRay technical point of contract (Lane A. Bray)
      for acceptance by PNNL staff. PNNL staff will evaluate the plan and provide
      any
      safety changes that may be required to obtain approval for use in the
      Radiological Process Laboratory (RPL, 325 building). As the testing progresses,
      changes may be developed, documented, and implemented by either IsoRay or PNNL
      staff.

    

    Task
      1: Prepare Materials and Equipment for Yttrium-90
      Production

    

    
      	
              ·

            	
              Prior
                to the start of radioactive work, IsoRay may set up equipment at
                their
                laboratory in the APEL facility for cold (non-radioactive) demonstration
                of developed method for and preparations of radioactive work. PNNL
                staff
                will become familiar with the separation operations and will simulate
                steps to be used for the radioactive work.

            
	 	 
	
              ·

            	
              PNNL
                staff will set up equipment and materials for separation chemistry
                with
                radioactive material in the RPL to ensure safety, operability, and
                ALARA.
                Procedures will be approved for use in the RPL prior to
                use.

            
	 	 
	
              ·

            	
              Radiological
                work permits (RWPs) will also need to be developed and approved for
                conducting this work in the RPL.

            

    

    

    Task
      2: Isotope Separation from IsoRay’s
      Sr-90 in Hot Cell

    

    
      	
              ·

            	
              The
                mini hotcell in Room 23 of the RPL will be used for the initial separation
                of yttrium-90 from strontium-90. Prior to use the cell will be cleaned
                by
                PNNL staff to remove waste materials and equipment as part of a legacy
                waste project. The cell will be wiped down and smears taken to determine
                whether unwanted radionuclides are present. The presence of Sr-Y-90
                contamination is acceptable but gamma-emitting fission products are
                not.

            

    

    

    

    SOW/PNNL/245

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              ·

            	
              Sr/Y
                separations will be conducted in the Room 23 mini cell by PNNL staff.
                The
                Sr-90 ampoule(s) will be combined and then split into two, equal,
                ~3.5
                Curie batches. Several separation runs will be conducted in order
                to
                produce ~
                2
                Ci of Y-90 per run for purity analysis and testing.

            
	 	 
	
              ·

            	
              Following
                separation from the Sr, the Y fraction will be removed from the hot
                cell
                by PNNL staff and transferred to the Y-90 glovebox in the same room
                for
                additional purification and processing. 

            
	 	 
	
              ·

            	
              The
                purity and activity of the Y-90 product will be measured by PNNL
                using ICP
                metals analysis and beta/gamma
                counting.

            

    

    

    Task
      3: Data Analysis and Process Evaluation

    

    
      	
              ·

            	
              Data
                compiled throughout the execution of this scope and data collected
                from
                previous testing will be analyzed to determine process efficiencies
                jointly by IsoRay and PNNL. Deficiencies or process variability will
                be
                evaluated to determine root cause of the anomaly. 

            
	 	 
	
              ·

            	
              Process
                steps identified as suspect will be technically critiqued and recommended
                changes documented and approved by IsoRay staff. If appropriate,
                additional testing will be conducted to confirm the cause and validate
                the
                process change.

            

    

    

    Task
      4: Ship Product for Research

    

    
      	
              ·

            	
              IsoRay
                may request PNNL to ship a small amount of the final product to an
                investigator for purity and labeling of proteins for
                research.

            

    

     

    Waste
      Disposal

    

    All
      waste
      associated with activities related to this project will be properly disposed
      of
      by PNNL at IsoRay’s
      expense
      as part of this CRADA, including any required decontamination of equipment
      and
      facilities. Due to the short half life of Y-90 at 2.7 days, waste is expected
      to
      have minimal radioactivity. Small quantities of waste may also be generated
      from
      the hot cell containing low levels of Sr-90.

    

    Reporting

    

    A
      summary
      report detailing all testing will be prepared by PNNL and transmitted to IsoRay,
      as detailed in the CRADA agreement. The report will list any Subject Inventions
      that may arise from either party during the execution of this
      project.

    

    Project
      Management

    

    Project
      management activities will include the establishment of this project, laboratory
      procurements, and ensuring that project objectives, deliverables and schedules
      are met.

    

    SOW/PNNL/245

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    III.
      SCHEDULE, MILESTONES and DELIVERABLES

    

    A
      list of
      the project milestones is summarized below.

    

    PNNL
      milestones:

    

    

    
      	
              ·

            	
              Complete
                Project Readiness Activities

            	
              2
                Weeks from Project Start Date

            
	
              ·

            	
              Complete
                Isotope Separations

            	
              6
                Weeks from Project Start Date

            
	
              ·

            	
              Complete
                Analytical Measurements and Report

            	
              6
                Weeks from Project Start Date

            
	
              ·

            	
              Ship
                Final Product to Investigator

            	
              8
                Weeks from Project Start Date

            
	
              ·

            	
              Complete
                Final Summary Report

            	
              10
                Weeks from Project Start Date

            
	 	 	 

    

     

    IV.
      TOTAL COST AND RESOURCE CONTRIBUTIONS

    

    IsoRay
      will provide the Sr-90 used for this project and the chemical separations
      procedures. IsoRay staff will work with PNNL staff to evaluate methods and
      results. IsoRay will provide a 100% funds-in CRADA contribution of $80,297.
      PNNL
      is not making any in-kind contribution. 

    

    In-Kind
      Contribution

    

    
      	
              ·

            	 	 	
              Labor
                and overhead

            	 	
              $

            	
              2,500

            	 
	
               

            	 	 	
              Total
                in-kind contribution 

            	 	
              $

            	
              2,500

            	 

    

    

    Funds-In
      Contribution

    

    
      	
              §

            	 	 	
              Staff
                hours for direct scientific 

            	 	
              $

            	
              42,630

            	 
	
              §

            	 	 	
              Analytical
                Cost Center

            	 	
              $

            	
              34,233

            	 
	
              §

            	 	 	
              Supplies
                and Equipment

            	 	
              $

            	
              1,167

            	 
	
              §

            	 	 	
              Waste
                Disposal

            	 	
              $

            	
              1,452

            	 
	
              §

            	 	 	
              Shipping
                Costs

            	 	
              $

            	
              815

            	 
	
               

            	 	 	
              Total
                funds-in 

            	 	
              $

            	
              80,297

            	 

    

    

    V.
      PROGRAM MISSION IMPACT STATEMENT

    

    The
      proposed project provides opportunity for continued support in the development
      and deployment of medical isotopes for treatment of cancer. PNNL helped
      establish medical isotopes as a viable cancer treatment technology during the
      1990s with the Y-90 Program. PNNL continues to internally support research
      and
      development of medical isotopes and delivery systems. No negative impact is
      expected from the execution of the project in support of IsoRay. PNNL does
      not
      anticipate utilizing any background PNNL intellectual property during the
      execution of this work scope.

    

    C/PNNL/245

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    VI.
      CONFLICTS OF INTEREST

    

    Signed
      statements certifying that no conflicts of interest are present for any of
      the
      Laboratory’s
      project
      principals are kept on file.

    

    VII.
      FAIRNESS OF OPPORTUNITY

    

    Pacific
      Northwest National Laboratory actions to assure Fairness of Opportunity in
      relation to this CRADA are documented in an accompanying letter to Don Moody.
      The selection of IsoRay as a CRADA partner has been made in an open and fair
      manner.

    

    This
      Agreement may be signed in one or more counterparts, each of which shall be
      deemed an original, and all of which taken together shall be deemed one and
      the
      same instrument.

    

    

    FOR
      CONTRACTOR:

    (Battelle
      Memorial Institute)

    

    BY
      Rod
      K. Quinn  

    

    SIGNATURE
      /s/
      Rod K. Quinn

    

    TITLE
      Contracting Officer

    

    DATE
      11/30/04

    

    

    U.S.
      DEPARTMENT OF ENERGY APPROVAL:

    

    BY
      Paul
      W. Kruger

    

    SIGNATURE
      /s/
      Paul W. Kruger

    

    TITLE
      Administrative Contracting Officer

    

    DATE
      12/23/04Unassociated Document

     

    

      AMENDMENT
        1 TO

      AGREEMENT
        45658

      

      BETWEEN

      

      BATTELLE
        MEMORIAL INSTITUTE

      PACIFIC
        NORTHWEST DIVISION

      which
        operates

      THE
        PACIFIC NORTHWEST NATIONAL LABORATORY

      under
        Prime Contract No. DE-AC06-76RL01830

      for
        the U.S. Department of Energy

      

      AND

      

      ISORAY
        MEDICAL, INC.

      

      

      The
        U.S. Department of Energy’s
        Contractor, Battelle Memorial Institute, Pacific Northwest Division
which
        operates the
        Pacific Northwest National Laboratory,
        is
        conducting for
        IsoRay Medical, Inc. (CLIENT)
        technical/research services in connection with Medical Isotope Production
        Support, under an Agreement dated February 24, 2004.

      

      Both
        Parties agree to amend the Agreement in accordance with Proposal dated February
        23, 2005, Amendment 1, as follows:

      

      Change
        CLIENT’s
        name
        from “IsoRay
        Products, LLC”
        to
“IsoRay
        Medical, Inc., 

      

      
        	
                ·

              	
                Amend
                  the completion date from September 30, 2005 to December 31,
                  2006.

              
	 	 
	
                ·

              	
                Amend
                  the total estimated cost from Eight Hundred Sixty-One Thousand
                  Two Hundred
                  Seventeen Dollars and No Cents ($861,217.00) to One Million Eight
                  Hundred
                  Forty-One Thousand Nine Hundred Eighty-Five Dollars and No Cents
                  ($1,841,985.00).

              
	 	 
	
                ·

              	
                Amend
                  the scope of the work in accordance with attached Statement of
                  Work dated
                  February 23, 2005.

              

      

      

      Except
        as
        amended herein, the conditions of the existing Agreement will remain in effect.
        This Amendment may be accepted within thirty (30) days from the date of
BATTELLE’s
        signature below.

      

      

      
        	
                 

                ISORAY
                  MEDICAL, INC.

              	
                BATTELLE
                  MEMORIAL INSTITUTE

                Pacific
                  Northwest Division

              
	
                By
                  /s/ Donald R. Segna

              	
                By
                  /s/ Alta Jones

              
	
                Name
                  Donald R. Segna

              	
                Name
                  Alta Jones

              
	
                Title
                  VP Strategic Planning

              	
                Title
                  Contracting Officer

              
	
                Date
                  2/22/05

              	
                Date
                  2-23-05

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