Document:

Exhibit 10.9

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

CONFIDENTIAL

 

FORMULATION DEVELOPMENT AGREEMENT

 

This FORMULATION DEVELOPMENT AGREEMENT (this “Agreement”) is entered into as of June l, 2007 (the “Effective Date”) by and between Aridis Pharmaceuticals, LLC, a California corporation with its business at 5941 Optical Court, San Jose, CA 95138 (“Aridis”) and PATH Vaccine Solutions, a nonprofit organization and affiliate of PATH organized as a separate legal entity under the laws of the State of Washington, having a primary place of business at 1455 NW Leary Way, Seattle, WA 98107 (“PVS”).

 

RECITALS

 

WHEREAS, PATH is an international, nonprofit, non-governmental organization whose mission is to improve the health of people around the world by advancing technologies, strengthening systems, and encouraging healthy behaviors.  PATH identifies, develops and applies appropriate and innovative solutions to public health problems, especially in low-resource settings, and shares knowledge, skills, and technologies with governmental and nongovernmental partners in developing countries and with groups in need;

 

WHEREAS, the mission of PVS is to accelerate the development of a rotavirus vaccine for pediatric indications and ensure its availability, affordability and accessibility for the developing world.  The objective of the PATH rotavirus program is to reduce the number of deaths and hospitalizations of children in the developing world due to rotavirus infection through advanced development and introduction of safe, affordable and efficacious new rotavirus vaccines;

 

WHEREAS, Aridis has expertise in the field of formulation development for vaccines and holds proprietary rights in technology for such formulation development;

 

WHEREAS, if a rotavirus vaccine formulation is successfully developed in accordance with the provisions of this Agreement, Aridis shall make available to PVS and its designated vaccine manufacturers the selected rotavirus vaccine formulations for use by such manufacturers in the manufacture and distribution of a rotavirus vaccine in accordance with PVS’ mission in Developing Countries; and

 

WHEREAS, Aridis and PVS wish to enter into an Agreement to formalize their collaboration on the development of select rotavirus vaccine formulations under conditions as set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties and covenants set forth in this Agreement, Aridis and PVS agree as follows:

 

1.                                      DEFINITIONS

 

1.1                               “Affiliate” shall mean, with respect to any Party, any other individual or entity directly or indirectly controlling, controlled by or under common control with such Party.  For

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

purposes of this Section 1.1, “control” means the beneficial ownership, directly or indirectly, of fifty percent (50%) or more of the equity or the outstanding voting shares or securities, or the right to receive fifty percent (50%) or more of the profits or earnings of an entity, or the ability to direct or cause the direction of the management or policies of an entity.

 

1.2                               “ATCC License” shall have the meaning as set forth in Section 5.3 herein.

 

1.3                               “Background Intellectual Property” shall mean any and all information, data (including research data), know-how, methods, formulas, formulations, compositions, materials, manufacturing know-how (including methods and standard operating procedures), computer programs, test results and trade secrets, owned or controlled by Aridis as of the Effective Date of this Agreement for which a license is required in order to practice the Project Intellectual Property for the manufacture, use or sale of the Primary Formulation or Optional Formulation developed under the scope of the Project.  Specifically excluded from this definition are (i) those rights held by Aridis under license to the U.S. DHHS National Institute of Health technology known as “Multivalent Human Bovine Rotavirus Vaccine,” DHHS reference No. E-015-98/0; (ii) those intellectual property rights owned, controlled or licensed by Aridis where the practice of such intellectual property would require the payment of consideration or fulfillment of obligations to a third party; (iii) rights to technologies unrelated to formulation which cover distinct therapeutic compounds, methods or product types (such as a Shigella vaccine form, for example); and (iv) clinical data.

 

1.4                               “Budget’ shall mean the budget for performing the Project, including payment schedule and deliverables, as mutually agreed upon by the Parties, a copy of which is attached hereto as Appendix A, and incorporated herein.

 

1.5                               “Developing Countries” shall mean those countries identified by the World Bank as of the Effective Date as having “low income economies,” or “lower-middle income economies” or “upper-middle income economies,” and which are set forth in Appendix C, attached hereto, as may be amended from time to time by the World Bank.

 

1.6                               “Dispute” shall have the meaning as set forth in Section 13.6 herein.

 

1.7                               “Electing Party” and “Non-Electing Party” shall have the meaning as set forth in Section 12.4 herein.

 

1.8                               “Enabling Technology” shall have the meaning as set forth in Section 4.2 herein.

 

1.9                               “Milestones” shall mean the goals, go-no-go decision points, deadlines and deliverables for the development of select rotavirus vaccine formulations as set forth in Appendix B of this Agreement and incorporated herein.

 

1.10                        “Notice of Breach” and “Notice of Termination” shall have the meaning as set forth in Section 12.2 herein.

 

1.11                        “Optional Formulation” shall have the meaning as set forth in Section 2.1 herein.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

1.12                        “Parties” shall mean Aridis and PVS together and “Party” shall mean any one of them.

 

1.13                        “Patent Rights” shall mean (i) all patents and patent applications owned by Aridis and/or its Affiliates or sublicensees, or to which Aridis and/or its Affiliate(s) or sublicensees otherwise have the right to grant licenses, existing as of the Effective Date or coming into existence at any time thereafter, which generally or specifically claim or cover processes or formulations for Rotavirus Vaccine; (ii) all patents issued with respect to the applications described above; and (iii) all divisionals, continuations, continuations-in-part, re-examinations, re-issues and extensions of such patents and applications.  A list of Aridis’ Patent Rights as of the Effective Date is attached hereto as Appendix D and incorporated into this Agreement.  Aridis shall provide PVS with written updates of the list of Patent Rights or more frequent updates when, in Aridis’ reasonable judgment, modifications may have bearing on or be relevant to the Project.

 

1.14                        “Primary Formulation” shall have the meaning as set forth in Section 2.1 herein.

 

1.15                        “Private Sector” shall mean those entities not included within the definition of Public Sector as defined herein.

 

1.16                        “Project Plan “ shall mean the scope of work to be undertaken by Aridis in performance of its obligations under this Agreement as defined in Appendix B and incorporated herein as may be amended from time to time upon mutual written approval of the Parties.

 

1.17                        “Project Intellectual Property” shall mean any and all inventions (whether patentable or not), proprietary information, know-how, technology, formulae, processes (including all SOPs), trade secrets, materials, technical data and any other information for or related to the formulations developed for Rotavirus Vaccine, or as invented, developed or acquired by, or come into the possession or control (by licensure or otherwise) of Aridis, all where arising out of performance by Aridis of the work under the Project Plan.

 

1.18                        “Public Sector” shall mean governmental health ministries and other governmental agencies of Developing Countries, the Global Fund for Children’s Vaccines, the WHO, World Bank, UNICEF and other governmental and non-profit charitable agencies or organizations, including PATH, and shall include without limitation United States and European governmental agencies (e.g. USAID, DANIDA, DFID and GTZ) that may purchase vaccines for delivery, distribution and/or sale to Developing Countries.

 

1.19                        “Rotavirus Vaccine” shall mean a multivalent vaccine for the prevention of rotavirus infection having a bovine parenteral virus backbone developed under license from the U.S. DHHS National Institute of Health technology known as “Multivalent Human Bovine Rotavirus Vaccine,” DHHS reference No. E-015-98/0 NIH, select formulations of which shall be as developed under this Agreement.

 

1.20                        “SOPs” shall mean standard operating procedures for the development of selected formulations of the Rotavirus Vaccine.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

1.21                        “Term” shall have the meaning as set forth in Section 12.1 herein.

 

2.                                      PROJECT PLAN

 

2.1                               The Scope of Work.  The Parties shall mutually develop and agree upon Milestones, including decision points as part of the Project Plan, attached hereto and made a part of this Agreement as Appendix B, which sets forth the scope of work for the vaccine formulation development activities to be conducted under this Agreement, it being understood that Appendix B shall initially include the scope of work for Phase I of the Project Plan, Phase II to be agreed upon by the Parties upon successful completion of Phase I and included as part of Appendix B at such time.  The Project Plan may be modified from time to time by the mutual agreement of the Parties as select formulations for Rotavirus Vaccine are identified.  The Project Plan will be comprised of two Phases, Phase I will include the identification and development of both a liquid formulation and one or more powder formulations.  Phase II will be the optimization of the formulation as selected by PVS upon the completion of Phase I.  It is anticipated by the Parties that the formulation to be initially selected by PVS for optimization may be a liquid formulation, and once selected this formulation will be referred to as the “Primary Formulation” in this Agreement.  It being under stood that prior to the start of Phase II, PVS will determine the formulation to be taken forward for optimization by Aridis and such formulation shall be designated as the Primary Formulation, and PVS may select a second formulation to be used as an optional formulation for Rotavirus Vaccine in Developing Countries (“Optional Formulation”).

 

2.2                               Conduct of the Project Plan.  Aridis shall allocate a sufficient amount of time and effort, using personnel with sufficient skills and experience, together with sufficient equipment, supplies and facilities to perform its obligations for the vaccine formulation development work as identified in the Project Plan, including without limitation, (i) in a good scientific manner; (ii) in accordance with all applicable laws and regulations (including those pertaining to animal or human use or testing); (iii) in accordance with good research practices incorporating mutually agreed standards and procedures; and (iv) with diligence, using reasonable best efforts to meet all Milestones under the Project Plan.  Successful completion of Phase I of the Plan shall be the selection by PVS of a Primary Formulation developed by Aridis under Phase I of the Plan and within the Budget for Phase I as specified in Appendix A.

 

2.2.1                     For the avoidance of doubt, it is understood and agreed by the Parties that Aridis’ obligation under this Agreement is to use reasonable best efforts as described in this Section 2.2 to perform in accordance with the Project Plan, and such reasonable best efforts shall not include an obligation to expend resources in excess of that specified in the Budget or Project Plan without the mutual prior written agreement of the Parties.

 

2.2.2                     Aridis shall be obligated to use reasonable best efforts to meet the Milestone completion dates as set forth in Appendix B, it being understood and agreed that completion of a Milestone by the designated date does not guarantee that completion of such Milestones will result in a successful formulation acceptable for use with the Rotavirus Vaccine; provided that, the steps undertaken by Aridis in completion of a Milestone meet the criteria as set forth in this Section 2.2.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

2.2.3                     It is agreed that the deliverables to be provided to PVS or its designees by Aridis in accordance with the Project Plan, shall include data, information, study reports, and certain formulation test materials and/or reagents.  It is not anticipated that biological materials will be a part of the deliverables provided to PVS or its designees hereunder.

 

2.3                               Scientific/Technical Management Committee.  PVS and Aridis shall form a Scientific/Technical Management Committee.  The purpose of such Committee shall be to review, evaluate and offer input with respect to the efforts and activities under the Project Plan on an ad hoc basis.  Without limiting the foregoing, the Committee shall be responsible for overseeing the Project Plan in a manner consistent with the Agreement, including, but not limited to, (i) reviewing the progress of the Project Plan, including by way of example, review of Aridis activities and progress; (ii) providing technical guidance and recommendations in support of the selected formulations; and (iii) such other matters as from time to time the Parties consider necessary for the advancement of the Project Plan.

 

2.4                               Reports.

 

2.4.1                     Regular Progress Reports.  Aridis shall submit to PVS bi-annual written progress and financial reports.  Such reports shall also summarize the financial expenditures incurred by Aridis in implementing the Project Plan.  Upon completion of Phase I of the Project Plan, Aridis shall promptly submit a written report to PVS summarizing Aridis’ progress and results in implementing the Plan.  In addition, Aridis shall submit to PVS a final written progress and financial report, with substantiating documentation, within three (3) months following the completion of the Plan or termination of this Agreement if termination occurs prior to completion of the Plan.  The form of financial report is as set forth in Appendix E.

 

2.4.2                     Disclosure of Inventions and Improvements; Disclosure of Data and Information.  In addition to the foregoing reporting requirements, Aridis shall promptly disclose to PVS in writing (i) Project Intellectual Property; (ii) Background Intellectual Property; and (iii) all data, information and other documentation developed, acquired, controlled or otherwise obtained by Aridis, rights to which are specifically excluded from the definition of Background Information under Subsection l .3(ii) to the extent such data, information and other documentation is used or included by Aridis in the Project Plan.

 

2.5                               Books and Records.  Aridis shall keep complete and accurate books and records, including financial records, pertaining to its implementation of the Project Plan for a minimum of five (5) years after the completion or termination of this Agreement.  Such books and records shall be made available to PVS or its designee upon request.  PVS shall have the right, with at least seven (7) days written notice, to conduct audits of the activities undertaken by Aridis in implementing the Project Plan.

 

3.                                      PAYMENTS BY PVS; INDIRECT SUPPORT

 

3.1                               PVS Funding.  In consideration of Aridis’ performance of its obligations under this Agreement and the Project Plan, PVS shall pay to Aridis, subject to the terms of this Agreement, an amount not to exceed the total Budget as set forth in Appendix A during the Term

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

of the Agreement, subject at all times to PVS’ right, described in Section 12.2 below, to terminate this Agreement and the funding of the Project Plan.  The agreed upon Budget including payment schedule and deliverables is as set forth in Appendix A.  PVS shall only be obligated to pay those sums as set forth in the Budget that are the responsibility of PVS in accordance with schedule of payment and deliverables as set forth therein, it being understood that prior to commencement of Phase II, the statement of work for Phase II shall be agreed to by the Parties in conformance with the Budget for Phase II as set for in Appendix A.

 

3.2                               Indirect Support by PVS.  In addition to the funding provided by PVS directly to Aridis as set forth in Section 3.1 hereunder, PVS shall provide certain materials, either itself or through its designee, as set forth in the Project Plan.  Such materials are included within the definition of Enabling Technology as specifically set forth in Section 4.2.

 

3.3                               Use of PVS Funds.  Aridis shall use all funds received from PVS hereunder, including any interest earned on funds advanced, in accordance with the Budget and the Plan.  Without the prior express written permission of PVS, the total payments to Aridis under this Agreement shall not exceed the Budget agreed in advance by PVS.  PVS shall only pay Aridis for actual expenses (including overhead where specifically noted in the approved Budget) incurred up to the approved budgeted amounts as set forth in the Plan.  To the extent funds provided by PVS remain unspent due to modification of the Budget or termination of the Agreement, such unexpended funds shall be returned to PVS as set forth in Section 12.6.

 

3.4                               No Other Payments.  Other than the payments as set forth in Section 3.1 herein, all costs and expenses incurred in connection with the performance of the Project Plan and other obligations of Aridis hereunder shall be borne exclusively by Aridis without further reimbursement or compensation directly or indirectly by PVS, unless PVS in its discretion elects in writing to undertake additional funding commitments due to a modification or amendment to the Plan.

 

4.                                      OWNERSHIP OF INTELLECTUAL PROPERTY, DATA AND INFORMATION

 

4.1                               Ownership of Inventions and Prosecution of Patents.

 

4.1.1                     Subject to the provisions of this Agreement, as between PVS and Aridis, title to any inventions conceived or reduced to practice solely by an Aridis employee in the course of implementing the Project Plan shall be owned by Aridis, shall be included within the definition of Project Intellectual Property hereunder, and shall be subject to the grant of rights specified herein.  Inventions developed jointly by employees, Affiliates or consultants of PVS and employees and Affiliates of Aridis shall be jointly owned in accordance with U.S. patent laws and regulations and shall be included within the definition of Project Intellectual Property.  Aridis may file patent applications on any such inventions at their sole cost and expense.  If Aridis chooses not to file for patent protection with respect to any jointly owned inventions developed hereunder, Aridis shall notify PVS in writing of such decision within sufficient time to allow action to be taken by PVS without the loss of potential patent rights, and shall provide PVS with the opportunity to file, at PVS’ sole cost and expense, patent applications on any such jointly owned invention conceived or reduced to practice in the course of the Project Plan.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

4.1.2                     Aridis shall not abandon any patent application, patent or other right included within the scope of the Project Intellectual Property or the Background Intellectual Property, the effect of which would be to limit or prevent PVS from practicing the intellectual property rights licensed to PVS under this Agreement, without disclosure to PVS and arrangement by mutual agreement with PVS for the protection of PVS license rights.

 

4.1.3                     Except as expressly provided in this Agreement, PVS shall receive no rights under the Aridis Background Intellectual Property and Project Intellectual Property.

 

4.2                               Enabling Technology. It is understood and agreed to by Aridis that Project Intellectual Property and the underlying Background Intellectual Property as licensed to PVS by Aridis hereunder shall be used by PVS for the advancement of the Primary Formulation and/or the Optional Formulation developed by Aridis under the Project Plan and shall be made available in accordance with Article 5 to PVS designated manufacturers for the advancement of a Rotavirus Vaccine in Developing Countries.

 

4.2.1                     Information, reagents and materials, including but not limited to (a) qualified cell lines, (b) production processes and formulations, (c) assay design and reagents, and (d) packaging design, some or all of which may be made available to Aridis by PVS or its designees or, in the case of a formulation, developed by Aridis under the Project Plan is defined as “Enabling Technology.”

 

4.2.2                     Should Aridis elect to develop and manufacture a Rotavirus Vaccine, PVS shall, upon such written notification from Aridis and to the extent reasonable based on good faith negotiations by the Parties, provide Aridis with access to Enabling Technology with the right to use such Enabling Technology in the commercial development of a Rotavirus Vaccine.  Acceptance and use of Enabling Technology shall obligate Aridis to the global access provisions as set forth in Article 6.

 

4.3                               No Impairment of Rights.  Neither Party shall grant any rights or licenses, or enter into any contract, agreement or transaction that would impair or be inconsistent with the rights and licenses that may be granted to the other Party under this Agreement.

 

5.                                      GRANT OF LICENSE; FIELD OF USE

 

5.1                               Grant of Rights to PVS.  In consideration for the funding and indirect support provided by PVS to Aridis hereunder, Aridis hereby grants to PVS a non-exclusive license, with right to sublicense, at no additional fee, charge or royalty obligation, under the Aridis Project Intellectual Property and underlying Aridis Background Intellectual Property to the extent necessary for PVS, its Affiliates and sublicensees to make, use and sell the Primary Formulation and the Optional Formulation in the Field within the Territory and with the Scope as specified in Table I below.  Table I herein summarizes the rights granted by Aridis to PVS hereunder, where the license granted to PVS as implemented for use in Developing Countries shall include the right to have manufactured the selected formulations worldwide for use solely in Developing Countries.  License rights as granted by Aridis to PVS hereunder as applied to the Field of pneumococcal disease and enteric disease shall be limited to Developing Countries; however,

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Aridis shall discuss with PVS in good faith possible partnering or licensing opportunities with designated PVS commercial collaborators to extend the license rights proposed by PVS to such commercial collaborator to include Developed Country rights to the extent such rights are available from Aridis at that time.

 

Table I

 

	
Field
    	
 
    	
Territory
    	
 
    	
Scope
    
	
Rotavirus Vaccine
    	
 
    	
Developing Countries
    	
 
    	
Non-exclusive
    
	
Pneumococcal disease and enteric disease:
   Shigellae (all forms)
   Entertoxogenic E. coli (multiple components of ETEC)
    	
 
    	
Developing Countries
    	
 
    	
Non-exclusive
    

 

5.2                               Grant of Rights to Aridis.  Pursuant to Section 4.1, ownership of Project Intellectual Property shall be held by Aridis, provided however, use of the Project Intellectual Property and the underlying Background Intellectual Property by Aridis shall be in conformance with the license rights granted to PVS as set forth in Section 5.1 and as further defined by the terms of this Agreement.  Should Aridis elect to make, use or sell a Rotavirus Vaccine in Developing Countries as formulated using the Enabling Technology, Aridis shall undertake the commercial terms for global access as set forth in Article 6.  Table II summarized the obligations of Aridis hereunder.

 

Table II

 

	
Field
    	
 
    	
Territory
    	
 
    	
Scope
    
	
Rotavirus Vaccine
    	
 
    	
Developed Countries
    	
 
    	
Exclusive (non-exclusive with respect to PVS   manufacturing rights asset forth in Section 5. I)
    
	
Rotavirus vaccine
    	
 
    	
Developing Countries
    	
 
    	
Non-exclusive (subject to commercial terms for   global access as set forth in Article 6)
    
	
Pneumococcal and enteric disease vaccines
    	
 
    	
Worldwide
    	
 
    	
Non-exclusive ( exclusive as to   Developed Countries rights but subject to good faith discussion obligations   as set forth in Section 5.1)
    
	
Other diseases and other fields of use
    	
 
    	
Worldwide
    	
 
    	
Exclusive
    

 

5.3                               Sublicense under PVS-ATCC License Agreement.  In order to facilitate the work to be conducted by Aridis under the Project Plan, PVS may by mutual agreement with Aridis provide certain ATCC materials to Aridis.  Such ATCC materials would be provided to Aridis as a sublicensee of PVS under the PVS-ATCC License Agreement dated as of February 7, 2007 (the “ATCC License’’), and the use of such ATCC materials would be limited to those activities as set forth in the Project Plan.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

5.3.1                     In conformance with the terms of the ATCC License, Aridis will agree in writing prior to receipt of such ATCC materials to be bound by all applicable terms, conditions, obligations (including reporting, and inspections) and other restrictions of the rights granted by ATCC to PVS under the ATCC License that protect or benefit ATCC’s rights and interests.

 

5.3.2                     Prior to the receipt of ATCC materials by Aridis hereunder, Aridis shall execute a material transfer agreement with ATCC, substantially in the form attached hereto as Appendix F, before any ATCC material is transferred to Aridis.  The transfer of ATCC material from ATCC to Aridis shall be direct from ATCC’s storage facility.

 

6.                                      COMMERCIAL TERMS FOR GLOBAL ACCESS

 

6.1                               Obligations of Global Access.  In the event that Aridis elects to commercialize a Rotavirus Vaccine in the Developing Countries under terms as set forth in Section 5.2 of this Agreement development of which incorporates or utilizes the Enabling Technology, Aridis shall negotiate in good faith with PVS to insure that the terms under which Aridis is introducing a Rotavirus Vaccine into Developing Countries, either itself or through a commercial partner, provides for availability of a Rotavirus Vaccine to Public Sector purchasers in or for Developing Countries at a preferential price and supply to that provided to Private Sector purchasers in the Developing Countries.  The following provisions in this Article 6 shall be used as the basis for the good faith negotiation of an agreement for the commercialization and supply of a Rotavirus Vaccine in Developing Countries by Aridis.  Such negotiations shall be undertaken between Aridis and PVS upon written notice by Aridis to PVS of Aridis’ intent to enter the Developing Countries market with a Rotavirus Vaccine.  In such negotiations PVS shall in its reasonable discretion take into account the degree to which Enabling Technology has enabled the Aridis Rotavirus Vaccine.

 

6.2                               Supply for Commercial Sale.  Upon an election to make and sell a Rotavirus Vaccine to Public Sector purchasers in Developing Countries, Aridis shall manufacture, supply and sell, or cause to be manufactured, supplied and sold, the Rotavirus Vaccine for use in designated Developing Countries for a period of time to be agreed upon by the Parties following licensure of a Rotavirus Vaccine in a Developing Country.  Aridis shall fill, or cause to be filled, Developing Country requirements for Rotavirus Vaccines by using commercially reasonable efforts to supply Rotavirus Vaccines to Public Sector purchasers in such quantities and timeframes sufficient to fulfill the purchase orders for use in Developing Countries.

 

6.3                               Public Sector Pricing.  Aridis shall provide Rotavirus Vaccine to Public Sector purchasers at a price to be determined by the Parties, it being understood that in accordance with achievement of the mission of PVS to make available to Developing Countries a Rotavirus Vaccine that is safe, efficacious, accessible and affordable, the Public Sector price for such Rotavirus Vaccine shall be at a substantial discount to the Private Sector price for the same Rotavirus Vaccine.

 

6.4                               Selection of Developing Countries by Aridis.  Should Aridis intend to deliver Rotavirus Vaccine into Developing Countries classified as “upper middle income” countries by the World Bank, Aridis may petition PVS for full or partial exclusivity in those territories with

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

respect to the rights otherwise granted to PVS under Section 5.1, subject to determination in PVS’s sole discretion that such exclusivity would not be inconsistent with any PVS obligations and in accordance with its objectives (including its mission to accelerate the development of a rotavirus vaccine and ensure its availability, affordability and accessibility for the developing world).

 

7.                                      CONFIDENTIALITY

 

7.1                               Exchange of Confidential Information.  During the course of this Agreement, Aridis and PVS (the “Disclosing Party,” as the case may be) may provide the other Party (the “Receiving Party”) with certain information, data or material in writing that the Disclosing Party has prominently marked or otherwise prominently identified as confidential or proprietary in nature (“Confidential Information’’).  Without limiting the Parties’ rights under this Agreement, the Receiving Party will use its commercially reasonable efforts to hold such Confidential Information in confidence and to prevent disclosure to third parties in the manner the Receiving Party treats its own similar confidential information (except that disclosure may be made to third parties working with the Receiving Party in connection with development of the Rotavirus Vaccine who are under similar confidentiality obligations).

 

7.2                               Disclosure to Third Parties.  In support of the PVS rotavirus vaccine program, either Party may disclose, under appropriate confidentiality provision no less restrictive than the confidentiality and non-use provisions under this Agreement, Confidential Information of the other Party to members of PVS supported working groups and technical advisory groups or to consultants or development partners of PVS or Aridis, respectively, as reasonably necessary for consultation directed toward the advancement of the PVS rotavirus vaccine program.  Notwithstanding the foregoing, the Receiving Party shall have no such non-disclosure obligations with respect to any information identified as Confidential Information and disclosed by the other party that (i) is or becomes publicly available through no breach of this Agreement; (ii) is rightfully in the Receiving Party’s possession prior to the Disclosing Party’s disclosure; (iii) is disclosed to the Receiving Party by an independent third party under no obligation of confidentiality; (iv) is independently developed by the Receiving Party as can be demonstrated by documentary evidence; or (v) is required to be disclosed by the Receiving Party under any applicable law, rule or regulation of any government in any country, but only to the extent of such required disclosure.  Without limiting the foregoing, PVS shall have the right to include Confidential Information as part of PVS’ reports to its donors to the extent such Confidential Information is reasonably necessary to be included within PVS reports of its rotavirus vaccine program activities (in summary or general descriptive form to the extent reasonably feasible, and otherwise so as to minimize disclosure of information not required to be disclosed).

 

8.                                      REPRESENTATIONS AND WARRANTIES

 

8.1                               PVS Representations and Warranties.  PVS represents and warrants that:

 

8.1.1                     PVS has the right, power and authority to enter into this Agreement and to perform PVS’ obligations hereunder.

 

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Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

8.1.2                     This Agreement has been duly executed and delivered by PVS and is a legal, valid and binding obligation enforceable against PVS in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, arrangement, moratorium and other laws relating to or affecting creditors’ rights generally and equitable principles.

 

8.1.3                     The execution, delivery and performance of this Agreement, and the rights granted hereunder, do not conflict with, violate or breach any agreement to which PVS is a party, and there are no agreements, assignments or encumbrances in existence inconsistent with the provisions of this Agreement.

 

8.2                               Aridis Representations and Warranties.  Aridis represent and warrant that:

 

8.2.1                     Aridis has the right, power and authority to enter into this Agreement and to perform its obligations hereunder and grant the rights granted herein.

 

8.2.2                     This Agreement has been duly executed and delivered by Aridis and is a legal, valid and binding obligation enforceable against Aridis in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, arrangement, moratorium and other laws relating to or affecting creditors’ rights generally and equitable principles.

 

8.2.3                     The execution, delivery and performance of this Agreement, and the rights granted hereunder, do not conflict with, violate or breach any agreement to which Aridis is a party, and there are no agreements, assignments or encumbrances in existence inconsistent with the provisions of this Agreement.  Aridis will not grant any license or other right in the Background Intellectual Property and/or the Project Intellectual Property that interferes with, conflicts with or is inconsistent with any of or Aridis’ obligations or PVS’ license, rights or entitlements under this Agreement.

 

8.2.4                     As of the Effective Date, Aridis has no actual knowledge of, and without having performed any investigation as to such likelihood, is not aware of any potential claim by a third party of infringement by Aridis as to its Background Intellectual Property and Aridis will in good faith endeavor not to develop Project Intellectual Property that to its knowledge could infringe the intellectual property rights of a third party.

 

8.2.5                     Should Aridis identify third party technology of possible interest for incorporation into the Project Plan, Aridis will first consult with PVS and the parties shall mutually agree upon a course of action.

 

8.2.6                     Aridis will apply the funding it receives from PVS under this Agreement directly and solely toward implementing and achieving the objectives of the Project.

 

8.2.7                     In the event PVS terminates this Agreement pursuant to Section 12.3 or 12.4, the license granted to PVS under this Agreement shall remain valid and enforceable and shall not be impaired, modified or terminated in any way as a result of such termination.

 

11

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

8.3                               Disclaimer of Certain Warranties.  Except as specifically set forth in Section 8.1 and 8.2, ARIDIS AND PVS EACH MAKE NO WARRANTIES TO THE OTHER, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, ANY WARRANTIES WITH RESPECT TO THE COMPLETION, SUCCESS OR PARTICULAR RESULTS OF THE PROJECT, STABILITY OR VIABILITY OF THE FINAL FORMULATION, OR THE CONDITION, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROJECT RESULTS.

 

9.                                      LIMITATIONS ON LIABILITY

 

9.1                               Aridis Obligations.  Aridis shall be liable for its actions in accordance with the terms of this Agreement for (i) the performance of the Project Plan by Aridis; (ii) the acts of Aridis in connection with this Agreement; and (iii) the breach (by act or omission) of any of Aridis’ obligations, representations or warranties under this Agreement; except only to the extent such actions were caused by the gross negligence or willful misconduct of PVS.  Aridis shall not be liable under a claim of product liability for any product developed, used or sold incorporating the formulation data or information or other deliverable hereunder or Background Intellectual Property rights or Project Intellectual Property rights delivered to PVS under this Agreement.

 

9.2                               Limitation of Liability.  IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, EXEMPLARY, PUNITIVE, SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF PROFIT) OF ANY KIND WHATSOEVER ARISING FROM THIS AGREEMENT OR AN ACT OR OMISSION BY EITHER PARTY, WHETHER BASED ON BREACH OF CONTRACT, BREACH OF WARRANTY, TORT OR ANY OTHER LEGAL THEORY.

 

10.                               INSURANCE

 

10.1                        Form of Insurance Coverage.  Aridis shall, at all times during the term of this Agreement, obtain and maintain at its own cost and expense, comprehensive commercial general liability insurance, and other insurance as may be commercially appropriate from time to time, with respect to its activities hereunder and insuring against risks therefrom.

 

10.2                        In the event Aridis elects to receive ATCC materials from PVS under a sublicense to the ATCC License as set forth in Section 5.3 of this Agreement, the insurance maintained by Aridis hereunder shall be in such amounts as Aridis and PVS may agree, based upon standards prevailing in the international vaccine industry at the time, but at least in the following amounts: Three Million US Dollars (US $3,000,000) per occurrence and Ten Million US Dollars (US $10,000,000) in the aggregate for damage, injury and/or death to persons, unless such coverage is not obtainable, in which case the parties will discuss appropriate adjustments.

 

10.3                        Verification of Insurance Coverage.  Upon execution of this Agreement and on an annual basis thereafter during the term of this Agreement, Aridis shall provide PVS with certificates of insurance for all relevant current insurance.

 

12

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

11.                               PUBLICATIONS: RELEASE OF INFORMATION

 

11.1                        Publications.  Subject to the confidentiality provisions of Section 7 of this Agreement, the Parties shall have the right to publish or present the technical data, clinical data or results of any test or clinical trial relating to the Project, in any peer review journal, similar publication or oral presentation to the general public; provided that before making such publication or presentation, each Party shall provide a draft manuscript or abstract to each other Party for its review and comment at least thirty (30) days prior to the proposed date of publication or presentation.  A Party may request the removal of any of its Confidential Information contained in the proposed publication or presentation, may request the deletion of its name which the Party, in its sole discretion, considers inappropriate, and, in the event a Party determines a need to delay the publication or presentation to protect or preserve exclusive Patent Rights, request such delay.  The non-publishing Party(ies) may comment on the publication and the publishing Party shall consider these comments seriously and give good faith consideration to revising the publication where appropriate.  The publishing Party shall delay the publication or presentation for up to ninety (90) days from the date of a non-publishing Party’s request as necessary to permit filings to preserve or protect Patent Rights.  Scientists at Aridis and PVS will be expected to treat matters of authorship in a proper, collaborative spirit, giving credit where it is due and proceeding in a manner that fosters cooperation and communication, but will not do anything in this regard that will jeopardize the issuance of a valid patent.  The provisions of this Section shall survive the termination of this Agreement.

 

11.2                        Use of Names.  Neither Party shall use the name of the other in any public documents, publicity or advertising without the prior written consent of the Party.  This obligation does not prohibit PVS from disclosing Aridis as a collaborator in the PVS rotavirus program to other PVS collaborators or potential collaborators, nor does it prohibit Aridis from acknowledging the PVS funding received by Aridis under this Agreement to potential partners or investors of Aridis.  Unless PVS informs Aridis otherwise, any publication or presentation shall state the following in an appropriate location: “Funded in whole or in part by the PATH Vaccine Solution Rotavirus Vaccine Program.”

 

11.3                        Public Statements.  Any press release, public statement or public announcement with respect to the Project shall be subject to the mutual written approval of the Parties.  PVS shall not refer to Aridis or any of its representative, officer or director in any Rotavirus Vaccine presentation, Rotavirus Vaccine packaging or promotional materials without the prior written approval of Aridis.

 

12.                               TERMINATION

 

12.1                        Term.  The initial Term of this Agreement shall be for a period of eighteen (18) months from the Effective Date, it being understood that the Term of this Agreement is in accordance with the time frame for development through the completion of Phase I of the Project.  The Parties will meet prior to the completion of Phase I to determine the scope of work to be continued under Phase II of the Project and shall amend the Budget (Appendix A), Project Plan (Appendix B), and Term of the Agreement accordingly.  The Parties may amend the Term of this Agreement by a written instrument signed by both Parties.

 

13

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

12.2                        Termination upon Completion of Phase I.  Subject to the provisions of Section 12.6 below, PVS may terminate this Agreement and its funding of the Project at its election upon sixty (60) days written notice to Aridis.  Either Party at its election may terminate this Agreement at the completion of Phase I and have no further obligations under this Agreement save for those terms that survive termination including the income rights and obligations as set forth in Sections 5.1 and 5.2.  Upon termination of this Agreement as provided hereunder, PVS shall have no further payment obligation to Aridis; provided that PVS shall pay or reimburse Aridis for all activities authorized by PVS and achieved as of the effective date of termination.

 

12.3                        Termination for Breach.  Subject to the provisions of Section 12.6 below, in the event that either Party shall breach any of the material terms, conditions or agreements contained in this Agreement and fail to remedy such breach within thirty (30) days of written notice thereof (the “Notice of Breach”) from the non-breaching Party, the non-breaching Party may terminate this Agreement, by giving the breaching Party a second notice (the “Notice of Termination”), which notice shall terminate this Agreement effective ten (10) days following the breaching Party’s receipt of such notice.

 

12.4                        Termination in Event of Bankruptcy.  Subject to the provisions of Section 12.6 below, a Party (the “Electing Party”) shall have the right to terminate this Agreement effective immediately upon written notice to the other Party (the “Non-Electing Party”) if: (a) the Non-Electing Party makes an assignment for the benefit of creditors; (b) a receiver is appointed for the Non-Electing Party and is not removed within sixty (60) days, or such assignment is not withdrawn within sixty (60) days; or (c) the Non-Electing Party files a voluntary petition in bankruptcy or is otherwise a party to proceedings in bankruptcy, reorganization or the appointment of a receiver, trustee, or custodian for or over its property and such proceedings, if involuntary are not vacated, set aside or stayed within sixty (60) days after commencement.  The termination shall become effective on the date of receipt of the notice by the Electing Party to the Non-Electing Party.

 

12.5                        Mutual Termination.  In addition to the foregoing, this Agreement may be terminated upon the mutual written agreement of the Parties only if the Parties set forth their agreement to terminate in a written document signed by a senior executive of each Party.

 

12.6                        Effect of Termination.

 

12.6.1              If this Agreement is terminated by PVS or Aridis, with respect to any activity not yet completed, Aridis shall promptly refund to PVS all unspent funds paid by PVS to Aridis, less (i) any non-cancelable amounts paid or non-cancelable obligations incurred prior to termination; and (ii) those funds as agreed to by PVS in support of the wind down of Aridis activities upon such notice of termination.

 

12.6.2              The parties acknowledge and agree that the mission of PVS to accelerate development of a Rotavirus Vaccine and to ensure its widespread and timely availability and accessibility for use in Developing Countries will be substantially impaired if this Agreement is terminated.  Therefore, in the event of termination of this Agreement by either Party for any of the reasons as set forth in Section 12.2, 12.3 , 12.4 or 12.5, upon such termination, the following

 

14

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

provisions and terms shall automatically become and/or continue to be effective: (a) except for termination due to breach or voluntary termination by PVS prior to completion of Phase I and through no breach of Arid is, the grant of license by Aridis to PVS pursuant to Section 5.1 shall survive; (b) Aridis promptly shall provide to PVS all know-how, and materials not already provided to PVS necessary for the further development of the selected formulations and rights as granted under Section 4.2 and Section 5.1; and (c) Aridis shall execute and deliver such documents and instruments as PVS may reasonably request to further evidence or give effect to this Section 12.6.2.

 

12.6.3              In the event of termination of this Agreement by either Party, then upon such termination, the following provisions and terms shall automatically become and continue to be effective:  (a) Aridis shall have the right to continue the Project under its own funding and resources and shall have the right to use for commercial purposes all Project Intellectual Property; and (b) PVS shall have the rights as set forth in Sub-Section 12.6.2.

 

12.6.4              Upon termination of this Agreement, neither Party shall use the name of the other Party without the express written permission of the other Party.

 

12.7                        Termination of Funding Obligations.  After fulfilling its financial commitments specified in Section 3.1, PVS shall have no further funding obligations under this Agreement.

 

12.8                        Survival.  The provisions of Articles 4, 5 (survival of the licenses granted by Aridis is governed by Section 12.6.2 above), 6, 7, 8, 9 and 13 and Sections 11.2, 12.6 and 12.8 shall survive the expiration or termination of this Agreement to the extent such terms by their nature continue following termination.

 

13.                               MISCELLANEOUS

 

13.1                        No Agency or Joint Venture.  Nothing in this Agreement shall be deemed to create an agency or partnership relationship or joint venture between the Parties.  Each Party shall be solely responsible for all taxes, benefits, withholding, worker’s compensation, unemployment insurance and similar requirements pertaining to its own employees.  Neither Party’s employees shall be deemed agents or employees of the other Party and neither Party shall have the power or authority to obligate or bind the other Party.

 

13.2                        Notices.  Any notices required to be given or which shall be given under this Agreement shall be in writing delivered by recognized commercial overnight courier service, personal delivery, confirmed facsimile or by certified or registered mail addressed to the parties as shown below, and shall be deemed to have been given or made as of the date received:

 

15

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

For PVS:

 

PATH Vaccine Solutions
 (PVS) 1455 NW Leary Way
 Seattle, WA 98107
 Attention: Director of Legal Affairs 
 Fax: 206-285-6619
 Tel: 206-285-3500

 

with a copy to:

 

PVS Rotavirus Vaccine 
 Program 1455 NW Leary Way
 Seattle, WA 98107
 Attention: Senior Program Administer 
 Fax: 206-285-6619
 Tel: 206-285-3500

 

For Aridis:

 

Aridis Pharmaceuticals, LLC 
 5941 Optical Court
 San Jose, CA 95138 
 Fax: 408-960-3822
 Tel: 408-385-1742

 

13.3                        Assignment.  This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns, collaborators and sublicensees.  Neither Party may assign or otherwise transfer this Agreement without the prior written consent of the other Party.

 

13.4                        Governing Law.  The validity, interpretation, construction and effect of this Agreement and the legal relationship of the parties to it shall be governed by and in accordance with the laws of the State of California, without regard to it or any other jurisdictions choice of law provisions.

 

13.5                        Voluntary Resolution of Disputes.  In the event of any dispute, controversy or claim between the Parties based on, arising out of or related to this Agreement (a “Dispute”), the Parties shall attempt in good faith to resolve such dispute promptly, voluntarily and amicably.  The Vaccine Development Committee shall first attempt to resolve the dispute.  If reasonably necessary to promote the prompt resolution of the dispute, either Party may, by written notice to the other, escalate the voluntary dispute resolution process to include the President or Chief Executive Officer of each Party or a senior officer designated by such President or Chief Executive Officer.  The designated officers of each Party shall use reasonable efforts to resolve the dispute within forty-five (45) days after the dispute is referred to them.

 

16

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

13.6                        Force Majeure.  Aridis shall not be responsible to PVS for delay in performing any of the tasks in the Project where such delay is due to force majeure causes beyond the control of Aridis, including fire, flood, explosion, lightning, windstorm, earthquake, civil commotion, riot, war, strikes, or any other cause beyond the control of Aridis.  Should the force majeure event continue for a period of more than six (6) months, PVS shall have the right, at its sole discretion, to terminate this Agreement in accordance with Section 12.2.

 

13.7                        Other Documents.  From time to time as appropriate, the Parties shall prepare, execute and deliver such other documents as may be reasonably necessary or appropriate to give effect to or implement the intentions, agreements and undertakings of the Parties set forth in this Agreement.

 

13.8                        Severability.  In the event any portion of this Agreement shall be held illegal, void or ineffective, the remaining portions hereof shall remain in full force and effect.  If any of the terms or provisions of this Agreement are in conflict with any applicable statute or rule of law, then such terms or provisions shall be deemed inoperative to the extent that they may conflict therewith and shall be deemed to be modified to conform with such statute or rule of law.  In the event that the terms and conditions of this Agreement are materially altered as a result of this Section 13.8, the parties will renegotiate the terms and conditions of this Agreement to resolve any inequities.

 

13.9                        Entire Agreement.  This Agreement embodies the entire understanding and agreement between Aridis and PVS with respect to the subject matter contained herein, and any prior or contemporaneous representations, either oral or written, are hereby superseded.  No amendments or modifications to this Agreement (including, without limitation, changes to the Project Plan), or waivers of any rights under this Agreement, shall be effective unless and until made in writing and signed and delivered by authorized representatives of the Parties.

 

13.10                 Execution in Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original as against any party whose signature appears hereon, and all of which shall together constitute one and the same instrument.  This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of both of the parties.

 

17

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

IN WITNESS WHEREOF, Aridis and PVS have executed and delivered this Agreement in duplicate originals by and through their duly authorized representatives below.

 

	
ARDIS PHARMACEUTICAL,   LLC
    	
 
    	
PATH VACCINE SOLUTIONS
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Eric Patzer
    	
 
    	
By:
    	
/s/ Christopher   J. Elias
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Name:
    	
Eric Patzer
    	
 
    	
Name:
    	
Christopher J.   Elias
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Title:
    	
President
    	
 
    	
Title:
    	
Chair
    

 

 

APPENDICES

 

	
Appendix A
    	
 
    	
Budget (including Deliverables and Payment Schedule)
    
	
 
    	
 
    	
 
    
	
Appendix B
    	
 
    	
Project Plan
    
	
 
    	
 
    	
 
    
	
Appendix C
    	
 
    	
List of Developing Countries
    
	
 
    	
 
    	
 
    
	
Appendix D
    	
 
    	
Aridis Patent Rights
    
	
 
    	
 
    	
 
    
	
Appendix E
    	
 
    	
Financial Report Form
    
	
 
    	
 
    	
 
    
	
Appendix F
    	
 
    	
Form of MTA for ATCC Materials
    

 

18

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPENDIX A
 Budget
 Advancing Rotavirus Vaccine Development (ARVAC) Project

 

	
BUDGET CATEGORY
    	
 
    	
INITIAL PERIOD
   (18 months)
    	
 
    	
SECOND PERIOD
   (18 months)
    	
 
    
	
PERSONNEL 
    (Salary and fringe benefits) b
    	
 
    	
$
    	
537,195
    	
a
    	
$
    	
557,904a
    	
 
    
	
CONSULTANT COSTS c
    	
 
    	
$
    	
50,000
    	
 
    	
—
    	
 
    
	
EQUIPMENT d
    	
 
    	
$
    	
80,000
    	
 
    	
$
    	
40,000
    	
 
    
	
SUPPLIES e
    	
 
    	
$
    	
60,000
    	
 
    	
$
    	
51,000
    	
 
    
	
TRAVEL f
    	
 
    	
$
    	
42,000
    	
 
    	
$
    	
42,000
    	
 
    
	
OTHER EXPENSES g
    	
 
    	
$
    	
100,600
    	
 
    	
$
    	
100,600
    	
 
    
	
SUBTOTAL DIRECT COSTS
    	
 
    	
$
    	
869,795
    	
 
    	
$
    	
791,504
    	
 
    
	
ADMINISTRATIVE EXPENSES h
    	
 
    	
$
    	
130,159
    	
 
    	
$
    	
108,621
    	
 
    
	
TOTAL COSTS
    	
 
    	
$
    	
999,954
    	
 
    	
$
    	
900,125
    	
 
    

 

a Personnel costs for each 18 month period are itemized on page 2.

b Fringe benefits - 18%.

c Consultant costs - consultant has extensive experience in analytical characterization of viral vaccines.  Consultant will provide analytical and scientific input regarding formulations and will devote the equivalent of 25 days to this project at a per diem rate of $2,000.

d A freeze drier will be needed to accommodate the additional capacity requirements of this project and to provide adequate separation between this project and other infectious agents in the lab that utilize a freeze dried formulation.  Cost estimates for a freeze drier are $80,000 to be purchased in the initial period.  During the second period, milling equipment will be needed to convert bulk dried material to a powder at a cost of $20,000.  In addition 4°C and 25°C stability chambers will be needed for scale-up of the liquid and powder processes at a cost of $20,000.

e Lab supplies are $15,000 per full time equivalent (FTE), which is the standard rate in NIH grants.  In the initial period 4 FTE x 15,000 = $60,000.  In the second period 3.4 FTE x $15,000 = $51,000.

f Travel expenses include two international meetings per funding period for two key personnel for a total of four meetings.  Cost estimate is $8,500 per meeting x 4 = $34,000.  Two domestic meetings are included for two personnel to attend scientific meetings and/or visit consultant lab.  Cost estimate is $2,000 per trip x 4 = $8,000 total.  Total travel costs= $34,000 + $8,000 = $42,000.

g Other expenses include grant management costs ($52,000) for record keeping (scientific and financial) and project management.  This project will also incur an expansion into an adjacent laboratory at an additional cost of $2,700 per month for a total of $48,600 ($2,700 x 18 month).

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

h Includes indirect/overhead expenses at -15% of direct costs.

 

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

BUDGET FOR INITIAL (1st) 18 MONTH PERIOD DIRECT COSTS ONLY

 

	
ROLE ON 
   PROJECT
    	
 
    	
EFFORT ON 
   PROJECT(%)
    	
 
    	
ANNUAL 
   SALARY
    	
 
    	
SALARY REQUESTED
   FOR
   18 MONTHS
    	
 
    	
FRINGE 
   BENEFITS (18%)
    	
 
    	
TOTAL
    	
 
    
	
Principal Investigator
    	
 
    	
50
    	
 
    	
158,000
    	
 
    	
118,500
    	
 
    	
21,330
    	
 
    	
139,830
    	
 
    
	
Sr. Manager
    	
 
    	
100
    	
 
    	
104,000
    	
 
    	
156,000
    	
 
    	
28,080
    	
 
    	
184,080
    	
 
    
	
Res. Associate
    	
 
    	
100
    	
 
    	
53,000
    	
 
    	
79,500
    	
 
    	
14,310
    	
 
    	
93,810
    	
 
    
	
Res. Assistant
    	
 
    	
100
    	
 
    	
45,000
    	
 
    	
67,500
    	
 
    	
12,150
    	
 
    	
79,650
    	
 
    
	
Res. Assistant
    	
 
    	
50
    	
 
    	
45,000
    	
 
    	
33,750
    	
 
    	
6,075
    	
 
    	
39,825
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUBTOTALS
    	
 
    	
455,250
    	
 
    	
81,945
    	
 
    	
537,195
    	
 
    

 

BUDGET FOR 2nd 18 MONTH PERIOD DIRECT COSTS ONLY

 

	
ROLE ON 
   PROJECT
    	
 
    	
EFFORT ON 
   PROJECT(%)
    	
 
    	
ANNUAL 
   SALARY
    	
 
    	
SALARY REQUESTED
   FOR
   18 MONTHS
    	
 
    	
FRINGE 
   BENEFITS (18%)
    	
 
    	
TOTAL
    	
 
    
	
Principal Investigator
    	
 
    	
40
    	
 
    	
158,000
    	
 
    	
94,800
    	
 
    	
17,064
    	
 
    	
111,864
    	
 
    
	
Sr. Manager
    	
 
    	
100
    	
 
    	
104,000
    	
 
    	
156,000
    	
 
    	
28,080
    	
 
    	
184,080
    	
 
    
	
Res. Associate
    	
 
    	
100
    	
 
    	
53,000
    	
 
    	
79,500
    	
 
    	
14,310
    	
 
    	
93,810
    	
 
    
	
Tech Transfer Manager
    	
 
    	
100
    	
 
    	
95,000
    	
 
    	
142,500
    	
 
    	
25,650
    	
 
    	
168,150
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SUBTOTALS
    	
 
    	
472,800
    	
 
    	
85,104
    	
 
    	
557,904
    	
 
    

 

3

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Payment Schedule

 

·                                          [***] upon execution of the contract

 

·                                          [***] after six months of implementation upon receipt and approval of the narrative and financial reports

 

·                                          [***] after twelve months of implementation upon receipt and approval of the narrative and financial reports

 

·                                          [***] Up to $50,000 upon receipt and approval of all end of project deliverables (these being the study reports specified in the Project Plan)

 

4

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPENDIX B
  Project Plan
 UK Bovine Vaccine Project Plan for Phase I Formulation Development

 

PROJECT OBJECTIVES AND SCOPE

 

The goal of this project is to develop a rotavirus formulation using GRAS (Generally Regarded as Safe) ingredients that is superior to the current dosage formulation currently being used which is a single dose lyophilized formulation stored at 2-8°C reconstituted with liquid antacid (citrate and bicarbonate). The criteria for success are defined as follows:

 

·                                          Stability: A vaccine formulation that is stable when stored at 2-8°C for at least one year with 0.5 log FFU/dose per serotype is desirable and should be the goal of project. However if the new formulation has superior attributes to the current lyophilized formulation that enhanced commercial acceptability (e.g. stable at higher temperatures, supports a less expense delivery device, etc.) then virus loss> 0.5 log FFU/dose per serotype may be acceptable.

·                                          Buffer: A successful formulation will contain sufficient amount of antacids to buffer against stomach acids and transit through to the gut.

·                                          Cost effective: The manufacturing process for a successful formulation must be implementable at commercial scale in a developing world manufacturing setting.

·                                          Intellectual property: A successful formulation will not infringe any other patents (prior art for rotavirus vaccines).

·                                          Vaccine serotypes studied: A successful formulation must work with UK x Human reassortants for Serotype G1, G2, G4 and G9.

 

Project execution

 

Phase I is anticipated to be approximately 18 months in duration. At the completion of Phase I, Aridis will present to PVS and the UK bovine rotavirus vaccine (BRV) manufacturing partners the liquid and powder blend formulations Aridis believes meets the goals of the project. If sufficient data are available that demonstrates one or more formulation options to be superior to the existing formulation, PVS will decide whether to authorize Aridis to continue formulation development (Phase II) in cooperation with the BRV manufacturing partners and a delivery device/packaging company. This phase will evaluate delivery devices for the new formulations.

 

A superior formulation will include one or more of the following:

 

·                                          Buffer and vaccine together in one formulation

·                                          Any formulation that is liquid stored at 2-8°C

·                                          A formulation that lends itself to a more convenient delivery device

·                                          A formulation that leads to a cheaper delivery device

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

·                                          A formulation process that is determined to be less expense than lyophilization in terms of capital expense or unit cost

·                                          Increased stability resulting in less virus needed at the time of formulation

·                                          Increased stability at temperatures above 25°C

 

Project milestones and work plan

 

(All time periods originate from the date Aridis receives materials from PVS to initiate formulation activities)

 

Liquid Formulation

 

	
Month 0- 4
    	
 
    	
Develop a multidimensional phase diagram using high   throughput appropriate analytical tests (possible methods include high   resolution 2nd derivative UV spectroscopy, intrinsic and   extrinsic fluorescence spectroscopy, circular dichroism, and dynamic light   scattering) to map the pH, ionic strength, and temperature regimes where the   vaccine is most physically stable. These analytical tests will define   solution conditions that avoid viral aggregation, protein structural changes,   membrane changes, disassembly, etc. that are potential pathways leading   to poor storage stability. Data provided to PVS at the completion of this   milestone. If the data from these studies demonstrate that virus serotypes   other than G1, G2, G4 and G9 be evaluated in subsequent studies or additional   data is obtained from other sources, Aridis and PVS will work together to   make the necessary adjustments in the virus serotypes evaluated.
    
	
 
    	
 
    	
 
    
	
Month 4 and 5
    	
 
    	
Select excipients, formulations, and additives to   develop a refrigerator stable liquid formulation. Stabilizer classes that   have been successfully used previously include non- reducing polysaccharides   (sucrose, trehalose, etc.), synthetic polymers and biopolymers   (hydrolyzed gelatin, polyvinyl pyrrolidone, etc.), small charged amino   acids (arginine, lysine, etc.) and surfactants (pluronics, Tweens).   Candidate antacids (citrate, sodium bicarbonate, etc.) will also be   screened together with stabilizers. The stabilizers selected and formulations   to be studies provided to PVS.
    
	
 
    	
 
    	
 
    
	
Month 6 to 11
    	
 
    	
A minimum of 15 formulations combinations will be   tested using monovalent vaccine preparations of G9 and G1 serotype viruses   for stability under 2-8°C, and 25°C (accelerated) storage conditions.
    
	
 
    	
 
    	
 
    
	
Month 12 to 17
    	
 
    	
Up to 5 lead formulation candidates will be tested   as a tetravalent vaccine consisting of G1, G2, G4 and G9 for stability under   real-time at 2-8°C storage condition.
    
	
 
    	
 
    	
 
    
	
Month 18
    	
 
    	
Present final results to PVS on lead candidate.
    

 

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Powder Formulation

 

	
Month 0-1
    	
 
    	
Review data from PVS on the Wyeth powder blend   formulation process.
    
	
 
    	
 
    	
 
    
	
Month 2 to 4
    	
 
    	
Prepare spray dried and bulk lyophilized   preparations of two rotavirus serotypes, G1 and G9 serotypes. Prepare antacid   buffer salts.
    
	
 
    	
 
    	
 
    
	
Month 5 to 6
    	
 
    	
Prepare powder blends of bivalent virus with and   without antacid buffer salts for stability evaluation under l 5°C, and 25°C   (accelerated) storage conditions.
    
	
 
    	
 
    	
 
    
	
Month 7 to 10
    	
 
    	
Evaluate the stability of all 4 powder formulations:   Gl/G9 bulk lyophilized; Gl/G9 spray dried; Gl/G9 with buffer salts; Gl/G9   without buffer salts.
    
	
 
    	
 
    	
 
    
	
Month 11 to 13
    	
 
    	
Prepare a tetravalent powder blend (G1, G2, G4 and   G9) using one manufacturing process (spray dried or bulk lyophilized) and   evaluate stability at 2-8°C.
    
	
 
    	
 
    	
 
    
	
Month 18
    	
 
    	
Present the manufacturing process and stability data   to PVS.
    

 

Materials to be provided by PVS (or through its designee):

 

1.                                      5 liters of post filtered monovalent bulk of serotypes G1, G2, G4 and G9 and 50 ml of G3 and GS stored at -70°C from Shantha, Biotech. If more vaccine bulks is needed, Shantha Biotech will supply to Aridis upon request.

 

2.                                      1ml of 1:100 dilution of monoclonal antibodies to G2, G3 and 20 vials of 1 ml each of G1, G4. Reagent supplies for GS and G9 will be determined later by PVS. If more reagent is needed, PVS or its affiliates will supply to Aridis upon request.

 

Deliverable at the end of Phase I

 

Aridis will provide PVS with an abbreviated technology transfer package of sufficient detail to allow a third party to implement the final liquid and powder formulation which has demonstrated to be an improvement over the existing formulation. Aridis will also provide in this abbreviated technology transfer package all stability data used to support the formulation selected for Phase II as well as data from formulations that were not selected. The written package will include the raw materials and solutions that were used in the final formulations studies, a brief description of the manufacturing process, any special equipment used in the formulation; unique facility requirements; process flow diagrams, process operating ranges such as mixing times, temperature conditions, etc. needed to prepare the formulation. All of the above information will

 

3

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

be provided on the formulation or formulations that Aridis and PVS agree warrant further development.

 

For clarification, the Phase 1 program comprises formulation development and stability testing but not process optimization or scale-up, and the abbreviated data package is not expected to be a manufacturing grade technology transfer package sufficient to allow third party manufacture without further development. Such manufacturing process, process flow and process operating ranges as are developed per this Project Plan - in addition to formulation and stability data - shall be shared.

 

Formulation, stability and other related data regarding formulations other than the Primary Formulation and Optional Formulation may be provided in summary form.

 

Scope of Work for Phase II Formulation Development

 

Prior to commencement of Phase II of the Project Plan, the Parties will develop a mutually agreeable Phase II Project Plan in accordance with the following objectives:

 

There are two objectives of the Phase II formulation development proposal: First, to continue the development at Aridis of a single formulation selected from the Phase I development program (either liquid or powder blend formulation) in sufficient detail to allow for a smooth transfer of the formulation technology to the developing country rotavirus vaccine manufacturer. Second, to work closely with PVS in selecting a contractor to develop a delivery device that is compatible with the formulation selected for Phase II and meets the needs of the developing world manufacturer.

 

Activities that will be included in the first objective include scale up of the formulation process in sufficient scale to permit the selection of appropriate equipment and identification of raw material suppliers to carry out the formulation process at commercial manufacturing scale. This objective will also include conducting real time stability studies at the recommended storage conditions and one higher temperature for a shorter duration on 3 pentavalent vaccine formulations containing the GI, G2, G3, G4 and G9 serotypes that were produced at a larger scale of production.

 

The second objective will involve providing samples of the formulation selected to the delivery device contractor. These samples will match as closely as possible to the final vaccine formulation selected for Phase II development except no live virus will be present. The chemical properties, ingredients and concentrations will be provided to the contractor to assist in the development of the delivery device. Aridis will work closely with the delivery device contractor to evaluate minor changes in the formulation that may be necessary to allow the formulation to adapt to the delivery device. Arid is will be expected to conduct stability studies in the delivery device selected, the extent to which will be dependent on the ability of Aridis or a contract manufacturing organization to fill the live virus vaccine formulation into the delivery device selected for development.

 

4

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPENDIX C
  World Bank List of Developing Countries

 

	
Low-income economies   (59)
    	
 
    	
 
    	
 
    	
 
    
	
Afghanistan

Bangladesh

Benin

Bhutan

Burkina Faso

Burundi

Cambodia

Cameroon

Central African Republic

Chad

Comoros

Congo, Dem. Rep.

Congo, Rep.

Cote d’Ivoire

Eritrea

Ethiopia

Gambia, The

Ghana

Guinea

Guinea-Bissau
    	
 
    	
Haiti

India

Kenya

Korea, Dem Rep.

Kyrgyz Republic

Lao PDR

Lesotho

Liberia

Madagascar

Malawi

Mali

Mauritania

Moldova

Mongolia

Mozambique

Myanmar

Nepal

Nicaragua

Niger

Nigeria
    	
 
    	
Pakistan

Papua New Guinea

Rwanda

Sao Tome and Principe

Senegal

Sierra Leone

Solomon Islands

Somalia

Sudan

Tajikistan

Tanzania

Timor-Leste

Togo

Uganda

Uzbekistan

Vietnam

Yemen, Rep.

Zambia

Zimbabwe
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Lower-middle-income   economies
    	
 
    	
 
    	
 
    	
 
    
	
Albania

Algeria

Angola

Armenia

Azerbaijan

Belarus

Bolivia

Bosnia and Herzegovina

Brazil

Bulgaria

Cape Verde

China

Colombia

Cuba

Djibouti

Dominican Republic

Ecuador

Egypt, Arab Rep.
    	
 
    	
El Salvador

Fiji

Georgia

Guatemala

Guyana

Honduras

Indonesia

Iran, Islamic Rep.

Iraq

Jamaica

Jordan

Kazakhstan

Kiribati

Macedonia, FYR

Maldives

Marshall Islands

Micronesia, Fed. Sts.

Morocco
    	
 
    	
Namibia

Paraguay

Peru

Philippines

Romania

Samoa

Serbia and Montenegro

Sri Lanka

Suriname

Swaziland

Syrian Arab Republic

Thailand

Tonga

Tunisia

Turkmenistan

Ukraine

Vanuatu

West Bank and Gaza
    

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

	
Upper-middle-income   economies (40)
    
	
American Samoa

Antigua and Barbuda

Argentina

Barbados

Belize

Botswana

Chile

Costa Rica

Croatia

Czech Republic

Dominica

Equatorial Guinea

Estonia

Gabon
    	
 
    	
Grenada

Hungary

Latvia

Lebanon

Libya

Lithuania

Malaysia

Mauritius

Mayotte

Mexico

Northern Mariana Islands

Oman

Palau

Panama
    	
 
    	
Poland

Russian Federation

Seychelles

Slovak Republic

South Africa

St. Kitts and Nevis

St. Lucia

St. Vincent and the Grenadines

Trinidad and Tobago

Turkey

Uruguay

Venezuela, RB
    

 

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPENDIX D
  Aridis Patent Rights

 

This Appendix is to list Aridis Patent Rights as of the Effective Date pursuant to section 1.13 of the Agreement. Certain patent applications are under consideration by Aridis and will be included in this Appendix D by amendment to be completed by Aridis promptly upon filing with the U.S. Patent Office or any equivalent foreign agency.

 

The Appendix shall note all relevant application numbers, application types, filing dates, inventors, assignees, government or other reserved rights noted in the application, and application titles.

 

3

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPENDIX E
 Financial Report Form

 

Recipient: Aridis Pharmaceuticals

Period of Agreement:

Period of this Report: From        , 20  , to       , 20

Dated Submitted:

 

	
 
    	
 
    	
A
    	
 
    	
B
    	
 
    	
C
    	
 
    	
D
    	
 
    	
E
    	
 
    
	
Budget Categories
    	
 
    	
Budget (in U.S.
   dollars)
    	
 
    	
Expenses this 
   Report
    	
 
    	
Total Expenses 
   Previous 
   Reports
    	
 
    	
Total Expenses 
   (8 + C)
    	
 
    	
Budget Balance 
   (A- D)
    	
 
    
	
Personnel
    	
 
    	
537,195
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Consultants
    	
 
    	
50,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supplies
    	
 
    	
60,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Travel and per diem
    	
 
    	
42,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Equipment
    	
 
    	
80,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other project costs
    	
 
    	
100,600
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Indirect Expenses
    	
 
    	
130,159
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COSTS (US$)
    	
 
    	
999,954
    	
 
    	
 
    	
 
    	
 
    	
 
    	
(*)
    	
 
    	
 
    	
 
    

 

	
Status of Cash on Hand
    	
 
    	
 
    
	
Payments Received to Date
    	
 
    	
 
    
	
Expenses to Date (*)
    	
 
    	
 
    
	
Balance
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Status of Interest Earned
    	
 
    	
 
    
	
Total Interest Earned Previous Reports
    	
 
    	
 
    
	
Interest Earned this Reporting Period
    	
 
    	
 
    
	
Total Interest Earned to Date
    	
 
    	
 
    

 

	
Signature:
    	
 
    	
 
    
	
Title:
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    

 

CERTIFICATION

 

The undersigned hereby certifies:

 

a.           That payment of the sum claimed under the cited Agreement is proper and due and that appropriate refund to PVS will be made upon request by PVS in the event of misrepresentation and/or nonperformance, in whole or in part, under the Agreement or for any breach of the terms of the Agreement, the amount of the refund to reimburse PVS for such misrepresentation, nonperformance, or breach; and

 

b.           That information in the Financial Report is correct and such detailed supporting information as PVS may require will be furnished to PVS on request; and

 

c.             That all requirements called for by the Agreement to the date of this certification have been met

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Appendix F 

(Form of Material Transfer Agreement)

 

Material Transfer Agreement

 

This Material Transfer Agreement (hereafter “Agreement”) is between you (“ Sublicensee” or “you”) and American Type Culture Collection, a not-for-profit organization (“ATCC” or “we” or  “us”).

 

The parties are entering into this Agreement in connection with your sublicense agreement (the “Sublicense”) with PATH Vaccine Solutions (“PVS”). PVS and ATCC have entered into a License Agreement dated as of       , 2006 (the “License”).

 

Scope of Use

 

YOU MAY MAKE AND USE THE MATERIAL PROVIDED TO YOU UNDER THE SUBLICENSE (“MATERIAL”) AND ALL REPLICATES AND DERIVATIVES FOR PURPOSES PERMITTED IN THE SUBLICENSE ONLY. THE MATERIAL IS NOT INTENDED FOR USE IN HUMANS. SUBLICENSEE AGREES THAT MATERIAL DESIGNATED AS BIOSAFETY LEVEL 2 OR 3 CONSTITUTES KNOWN PATHOGENS AND THAT OTHER MATERIAL NOT SO DESIGNATED AND REPLICATES OR DERIVATIVES MAY BE PATHOGENIC UNDER CERTAIN CONDITIONS. SUBLICENSEE ASSUMES ALL RISK AND RESPONSIBILITY IN CONNECTION WITH THE RECEIPT, HANDLING, STORAGE, DISPOSAL, TRANSFER AND USE OF THE MATERIAL INCLUDING WITHOUT LIMITATION TAKING ALL APPROPRIATE SAFETY AND HANDLING PRECAUTIONS TO MINIMIZE HEALTH OR ENVIRONMENTAL RISK.

 

Sublicensee shall not distribute, sell, lend or otherwise transfer the Material, Replicates, or Derivatives (the “Biological Material”) for any reason. Except as expressly permitted in the Sublicense, any commercial use of the Biological Material is prohibited without ATCC’s prior written authorization. Your use of the Biological Materials requires a sublicense from PATH.

 

For purposes of this Agreement, “Replicate” means any biological or chemical material that represents a substantially unmodified copy of the Material such as, but not limited to, material produced by growth of cells or microorganisms or amplification of Material. “Derivative” means material created from the Material that is substantially modified to have new properties.

 

Warranty; Warranty Disclaimer

 

The Material provided to you under this Agreement is subject to a warranty provided by ATCC to PVS in the License. EXCEPT AS EXPRESSLY PROVIDED TO PVS IN THE LICENSE, THE MATERIAL AND ANY TECHNICAL INFORMATION AND ASSISTANCE PROVIDED BY ATCC ARE PROVIDED AS IS, WITHOUT WARRANTIES OF ANY KIND, EXPRESS OR

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

IMPLIED, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TYPICALITY, SAFETY, AND ACCURACY.

 

Compliance With Laws

 

SUBLICENSEE IS SOLELY RESPONSIBLE FOR COMPLIANCE WITH ALL APPLICABLE FOREIGN AND DOMESTIC, FEDERAL, STATE AND LOCAL LAWS, STATUTES, ORDINANCES AND REGULATIONS. Without limiting the generality of the foregoing, any shipment of the Material to countries outside the United States must comply with all applicable U.S. laws, including the U.S. export control laws and related regulations.

 

Indemnification

 

Sublicensee hereby agrees to indemnify, defend and hold harmless ATCC, its officers, agents,  employees and its contributors, against all third party claims, losses, expenses and damages (including reasonable attorneys’ fees) arising out of or relating to the use, receipt, handling, storage, transfer, disposal and other activities relating to the Biological Material or products related to the Biological Material. All non-monetary settlements will be subject to ATCC’s consent.

 

Limitation of Liability

 

IN NO EVENT WILL ATCC OR ITS CONTRIBUTORS BE LIABLE FOR ANY  INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY  KIND IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT,  BIOLOGICAL MATERIALS OR PRODUCTS RELATED TO BIOLOGICAL  MATERIALS (WHETHER IN CONTRACT, TORT, NEGLIGENCE, STRICT  LIABILITY, STATUTE OR OTHERWISE) EVEN IF ATCC HAS BEEN ADVISED OF  THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL ATCC’S  CUMULATIVE LIABILITY IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT, THE SUBLICENSE, BIOLOGICAL MATERIALS OR PRODUCTS RELATED TO BIOLOGICAL MATERIALS EXCEED THE FEES PAID BY PVS TO ATCC UNDER THE LICENSE. THE PROVISIONS OF THIS SECTION SHALL SURVIVE THE EXPIRATION OR TERMINATION OF THIS AGREEMENT.

 

Sublicensee agrees that the limitations of liability set forth in this Agreement shall apply even if a  limited remedy provided hereunder fails of its essential purpose.

 

Intellectual Property; Identification

 

ATCC shall retain ownership of all right, title and interest in the Biological Material. ATCC also retains rights to any intellectual property it owns in the Biological Material.  Sublicensee retains ownership of those substances created through the use of the Biological Material, but which do not contain Biological Material. Sublicensee will notify ATCC of any Derivatives it creates from ATCC Material and make such Derivatives available to ATCC. The Biological Material is subject to the restrictions noted in the “Scope of Use” section above. ATCC retains all right, title and interest in the trademarks registered or owned by the ATCC and any and all ATCC catalog numbers or ATCC specific designations of Material sold by the ATCC. ATCC also retains rights to any intellectual property it owns in the Material.

 

Sublicensee is responsible for ensuring that all permits required for Sublicensee to receive Material are obtained and that sufficient proof of such permits is provided to ATCC.

 

Termination:

 

This Agreement shall survive the termination of the Sublicense provided that said Sublicense is

 

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

assigned to ATCC. In all other instances, or upon termination of any assigned Sublicense, this Agreement shall terminate and Sublicensee shall destroy all stocks of Biological Material and provide by ATCC with written notification of that fact. The following provisions shall survive termination of this Agreement: Indemnification, Limitation of Liability, and Intellectual Property; Identification.

 

Miscellaneous

 

This Agreement shall be governed by the laws of the State of New York, without reference to its choice of law rules. Sublicensee may not assign or otherwise transfer this Agreement or any rights or obligations under this Agreement, whether by operation of law or otherwise. Any attempted assignment or transfer will be void and of no force or effect. This Agreement and all documents incorporated herein by reference constitute the entire agreement between ATCC and Sublicensee with respect to the Biological Material and supersede all previous agreements or representations; This Agreement may not be modified, changed or terminated orally. No change, modification, addition or amendment shall be valid unless in writing and signed by an authorized representative of
 each of the parties hereto.

 

This Agreement shall be signed in two counterparts each of which shall be deemed to be an original, and both of which taken together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized officers.

 

 

	
For ATCC
    	
 
    	
For Sublicensee
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Signature   
    	
 
    	
Signature   
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Title
    	
 
    	
Title
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date
    	
 
    	
Date
    

 

3Exhibit 10.10

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

	

    	
 
    
	
 
    
	
 
    
	
 
    
	
 
    	
Executed
    

 

December 30, 2016

 

Vu Truong, CEO

 

Aridis Pharmaceuticals, Inc.

 

5941 Optical Court

 

San Jose, California  95138

 

	
Development Program:
    	
 
    	
Inhaled Gallium Citrate Anti-Infective
    
	
 
    	
 
    	
 
    
	
Amount of Award:
    	
 
    	
$2,902,097.00
    
	
 
    	
 
    	
 
    
	
Name of Awardee:
    	
 
    	
Aridis Pharmaceuticals, Inc. (“Aridis”)
    

 

Dear Dr. Truong:

 

We are pleased to inform you that the Cystic Fibrosis Foundation Therapeutics, Inc. (“CFFT”) is hereby issuing an award for the Development Program described in Exhibit A and disbursed in accordance with Exhibit B up to the amount indicated above.  The awardee, Aridis, shall be responsible for the payment of all of the remaining costs required to complete the Development Program and for costs associated with the further development and commercialization of the Product.  Each party’s obligations hereunder will commence and apply upon the execution of this Agreement.  CFFT has determined that the Award is consistent with its charitable mission to cure and mitigate the effects of cystic fibrosis and that the Development Program is unlikely to be completed or could be significantly delayed without the Award.  The Award is subject to the following terms, conditions and policies of this Letter Agreement (“Agreement”):

 

1.                                      Disbursement of Award; CFFT Know-How; Reports.

 

(a)                                 The Award will be disbursed by CFFT to Aridis in accordance with the Milestone Payment Schedule set forth in Exhibit B.  Upon completion of the Development Program, any CFFT funds not expended on the Development Program must be returned to CFFT, and upon such return, the amounts of such returned funds will not be included as part of the “Award” for purposes of calculating any payment due to CFFT pursuant to Paragraph 2 (a) and (b).

 

1

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

(b)                                 To the extent CFFT shall provide or make available to Aridis any information, expertise, know-how or other intellectual property related to cystic fibrosis or the treatment, prevention, or cure thereof (“CFFT Know-How”) to Aridis, CFFT hereby grants to Aridis a royalty-free, irrevocable, non-exclusive, transferable, sublicensable (through multiple tiers), worldwide right and license under all of CFFT’s rights in such CFFT Know-How to assist Aridis and for Aridis to research, develop, commercialize, make, have made, use, sell, have sold, offer for sale, import, export and otherwise exploit the Product.

 

(c)                                  During the Development Program, Aridis agrees to provide CFFT and the Project Advisory Group (“PAG”) specified below with a reasonably detailed, written report every three (3) months, summarizing progress toward achieving the goals of the Development Program.  In addition, Aridis shall prepare and deliver to CFFT a closing report within thirty (30) days after the completion of the Development Program.  Following the completion of the Development Program, Aridis shall continue to report to CFFT once per year on the progress of its development activities regarding the Product until the earlier of First Commercial Sale of the Product (as defined below) or such time as Aridis (or its Affiliates or licensee or sublicensees of either) ceases development of the Product in the Field.

 

2.                                      Payments to CFFT.  In consideration of license under Paragraph 1(b), Aridis agrees to make the following payments to CFFT:

 

(a)                                 Aridis shall pay to CFFT a one-time amount equal to the Cap.  Such amount shall be paid in as few as three (3) and not more than five (5) annual installments, as follows:  within ninety (90) days of the end of the calendar year in which the First Commercial Sale occurs, and within ninety (90) days of the end of each subsequent calendar year until the Cap is paid, Aridis shall pay up to [***] of Net Sales for that calendar year (except that in the fifth installment, if any, Aridis shall pay the remaining unpaid portion of the Cap, regardless of the percentage of Net Sales or fraction of Cap such payment would represent).

 

(b)                                 In addition to the amount payable pursuant to subparagraph (a) above, Aridis shall pay to CFFT a one-time amount equal to the Actual Award within sixty (60) days after the end of the first calendar year during which aggregate Net Sales of the Product exceed [***].

 

(c)                                  In the event that Aridis licenses rights to the Product in the Field to a third party, sells the Product, or consummates a Change of Control Transaction (collectively, a “Disposition Transaction”) prior to the First Commercial Sale, Aridis shall pay to CFFT an amount equal to:

 

2

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

(i) Two (2) times the Actual Award, if the Change of Control Transaction occurs prior to the completion of the first Phase IIb (or equivalent) clinical study with respect to the Product; and (ii) four (4) times the Actual Award if the Change of Control Transaction occurs after the completion of the clinical trial specified in (i) above.  The Disposition Payment shall be made within sixty (60) days after the closing of a Disposition Transaction.  Notwithstanding the payment of the Disposition Payment, the payments specified in subparagraphs (a) and (b), if not paid in full after the Disposition Payment, shall survive, provided that the amount specified in subparagraph (a) shall be reduced by the Disposition Payment.  If any portion of the Cap in subparagraph (a) has been paid prior to the Disposition Payment, then the Cap shall be reduced by such amount previously paid.

 

3.                                      Commercially Reasonable Efforts.  Aridis (or its Affiliates or licensees or sublicensees of either) shall use Commercially Reasonable Efforts to conduct the Development Program during the term of this Agreement.  After the Development Program is completed, Aridis shall exercise Commercially Reasonable Efforts to continue to develop the Product (the “Post-Development Program Obligation”) until the earlier of the First Commercial Sale of the Product, or such time as Aridis (or its Affiliates or licensees or sublicensees of either) ceases development of the Product in the Field.

 

4.                                      Program Advisory Group (“PAG”).

 

(a)                                 Aridis and CFFT shall form a PAG.  The PAG serves the function of allowing CFFT to monitor the use of its funding.  The PAG shall terminate and cease to exist on the earlier of (i) the First Commercial Sale of the Product, or (ii) the termination of this Agreement.  The PAG shall consist of two (2) individuals appointed by Aridis and two (2) individuals appointed by CFFT.  One of such individuals from Aridis and CFFT, respectively, shall be the principal liaison to the Development Program.  A party may replace the individuals appointed by such party and designate a different individual as the principal liaison upon written notice to the other party.

 

(b)                                 The role of the PAG shall be to discuss and propose amendments to the Development Program, including the budget, to determine whether payment milestones have been achieved, and provide recommendations on other issues raised by either party relating to the Development Program, provided that no change to the Development Program shall be made without the written agreement of both parties.

 

(c)                                  Each party shall be responsible for its own expenses in connection with attending and participating in the PAG.

 

3

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

5.                                      Interruption License.  Aridis hereby grants the Interruption License (as defined below) to CFFT, which Interruption License shall be effective as provided below.  Upon written notice from CFFT following an Interruption (the “Interruption Notice”), Aridis shall elect, within thirty (30) days of such Interruption Notice, one of the following options by written notice to CFFT:

 

(a)                                 Aridis shall reasonably demonstrate, in the form of a written progress report, that an Interruption has not occurred, or that Aridis, an Affiliate thereof, or a licensee or sublicensee of either of the foregoing is exercising Commercially Reasonable Efforts to develop the Product in accordance with Paragraph 3;

 

(b)                                 Aridis shall provide CFFT with written notice within such thirty (30) day-period that Aridis, an Affiliate thereof, or a licensee or sublicensee of either of the foregoing, has plans to resume Commercially Reasonable Efforts to develop the Product in accordance with Paragraph 3 and resumes such Commercially Reasonable Efforts within the ninety (90) day period following such notice;

 

(c)                                  The Interruption License shall become effective, as set forth below; or

 

(d)                                 In lieu of the Interruption License, within thirty (30) days of the Interruption Notice, Aridis shall pay to CFFT the greater of (A) two (2) times the Actual Award, and (B) the total of the Actual Award plus Interest up to the time of such election; and in the event of such payment, this Paragraph 5 and Paragraph 2 shall no longer be applicable.

 

If Aridis has elected (a) or (b) above within thirty (30) days of the Interruption Notice, the Interruption Notice shall be deemed satisfied and be of no further force or effect unless CFFT notifies Aridis within thirty (30) days after receipt of Aridis’ progress report under (a) above or provides notice under (b) above that CFFT disputes such progress report or notice, as the case may be.  If CFFT provides timely notice of its dispute, the parties shall resolve such dispute in accordance with the dispute resolution provision of this Agreement.

 

If Aridis has elected (a) or (b) above, CFFT has disputed such election, the resolution of the dispute is concluded and the final outcome of such dispute resolution is that such election was defective, Aridis shall have the right to elect (c) and (d) above within thirty (30) days of the final outcome.  If Aridis does not make such election within such thirty (30)-day period, Aridis shall be deemed to have made the election specified in (c) above.  If Aridis has made (or is deemed to have made) the election specified in (c) above, the Interruption License shall be effective upon such election (or deemed election) (such date, the “Interruption License Effective Date”).  The Interruption License

 

4

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

shall mean an exclusive (even as to Aridis), worldwide license to CFFT under the Aridis Development Program Technology to manufacture, have manufactured, license, use, sell, offer to sell, and support the Product in the Field.  Under the Interruption License, in lieu of any further payments to CFFT hereunder, Aridis and CFFT shall share on a 50-50 basis all compensation and consideration received from any third party in connection with the license, sale or other transfer of the Development Program Technology, whether in the form of an option or signing fee, license fees, milestone payments, royalties or otherwise, provided that CFFT’s share of any such compensation and consideration shall be increased by [***], and Aridis’ share shall be reduced by like percentage points, for each [***] additional investment in the development of the Product and/or the Research Program Technology made by CFFT after the Interruption License Effective Date, except that, in no event shall Aridis’ share in any compensation and consideration received be reduced below [***].  Aridis shall deliver to CFFT, within ninety (90) days after the Interruption License Effective Date, a copy of all materials and data in its possession or control constituting Development Program Technology, to the extent required by CFFT to make, use, or sell the Product in the Field and to the extent that Aridis has the right to provide such materials and data.  The Interruption License shall be deemed to constitute intellectual property as defined in Paragraph 365(n) of the U.S. Bankruptcy Code; provided, however, that nothing in this Agreement shall be deemed to constitute a present exercise of such rights and elections.  Aridis agrees that CFFT, as a licensee of such rights, shall retain and may exercise all of its rights and elections under the U.S. Bankruptcy Code.  CFFT’s rights to the Interruption License shall be enforceable against any assignee, licensee or other transferee of the Product and the Development Program Technology.

 

6.                                      Indemnification

 

(a)                                 Aridis shall indemnify, defend and hold harmless CFFT, its Affiliates, and their respective directors, officers, employees, consultants, committee members, volunteers, agents and representatives and their respective successors, heirs and assigns (each, an “CFFT Indemnitee”), from and against any and all claims, suits and demands of third parties and losses, liabilities, damages for personal injury, property damage or otherwise, costs, penalties, fines and expenses (including court costs and the reasonable fees of attorneys and other professionals) payable to such third parties arising out of, and relating to any such third party claims resulting from:

 

(i)                                     the conduct of the Development Program by Aridis or its Affiliates or their respective directors, officers, employees, consultants, agents, representatives, licensees, sublicensees, subcontractors and/or investigators (each, an “Aridis Party”) under this Agreement and/or pursuant to one or more agreements between Aridis and any Aridis Party, or any actual or alleged violation of law resulting therefrom;

 

5

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

(ii)                                  Aridis’ or its Affiliates’ development, manufacture, or commercialization of the Product developed in whole or in part as a result of the Development Program;

 

(iii)                               any claim of infringement or misappropriation with respect to the conduct of the Development Program by or on behalf of Aridis or its Affiliates, or Aridis’ or its Affiliates’ third party licensees’ or sublicensees’ manufacture, use, sale, or import of the Product developed in whole or in part as a result of the Development Program; and

 

(iv)                              any tort claims of personal injury (including death) relating to or arising out of any such injury sustained as the result of, or in connection with, the conduct of the Development Program by or on behalf of Aridis or its Affiliates, or Aridis’ or its Affiliates’ third party licensees’ or sublicensees’; in each case, (A) other than CFFT’s or any of CFFT’s licensees’ or sublicensees’ development, manufacture or commercialization of the Product developed in whole or in part as a result of the Development Program following the Interruption License Effective Date, and (B) except to the extent the claim, suit, demand, liability, damage, or loss results from the negligence, willful misconduct or other fault of a CFFT Indemnitee.

 

(b)                                 CFFT shall indemnify, defend and hold harmless Aridis, its Affiliates and their respective directors, officers, employees, consultants, agents and representatives and their respective successors, heirs and assigns (“each an Aridis Indemnitee”) from and against any and all claims, suits and demands of third parties and losses, liabilities, damages for personal injury, property damage or otherwise, costs, penalties, fines and expenses (including court costs and the reasonable fees of attorneys and other professionals) payable to such third parties arising out of, resulting from, or relating to any exercise of any rights under the Interruption License by or on behalf of CFFT, any designee, assignee or successor in interest thereto, or any licensee or sublicensee of any of the foregoing, except to the extent the claim, suit, demand, liability, damage or loss results from the negligence or willful misconduct of a Aridis Indemnitee after the effective date of the Interruption License.

 

(c)                                  A party entitled to indemnification under this Paragraph 6 (the “Indemnified Party”) will promptly notify the other party (the “Indemnifying Party”) of any claims, suits, demands, losses, liabilities, damages, costs, penalties, fines, or expenses subject to indemnification under this Paragraph 6 of which it is made aware.  The Indemnified Party will cooperate, and exert efforts to cause other Indemnified Parties to cooperate, in assisting the Indemnifying Party in presenting a

 

6

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

defense, if requested to do so.  The Indemnifying Party shall have sole control to select defense counsel, direct the defense of any such complaint or claim, and the right to settle claims at the Indemnifying Party’s sole expense, provided that any such settlement does not incur non-indemnified liability for or admit fault by any Indemnified Party and fully releases the Indemnified Party for all liability that would otherwise be paid or satisfied by the Indemnifying Party.  In the event a claim or action is or may be asserted, the Indemnified Party shall have the right to select and to obtain representation by separate legal counsel.  If the Indemnified Party exercises such right, all costs and expenses incurred for such separate counsel shall be borne by the Indemnified Party.  No Indemnified Party shall settle or enter into any voluntary disposition of any matter subject to indemnification under this Paragraph 6 without the prior written consent of the Indemnifying Party, such consent not to be unreasonably withheld.

 

7.                                      Insurance.  Aridis shall maintain at its own expense, with a reputable insurance carrier, coverage for Aridis, its Affiliates, and their respective employees written on a per occurrence basis commensurate with a reasonable assessment of the risks associated with the development efforts being conducted by Aridis, the following policies:  Commercial general liability insurance, including contractual liability as respects this Agreement for bodily injury and property damage and, no later than the first use administration of the Product to a human subject, the Product liability and clinical trials liability.

 

Maintenance of such insurance coverage will not relieve Aridis of any responsibility under this Agreement for damage in excess of insurance limits or otherwise.  On or prior to the Effective Date of this Agreement, Aridis shall provide CFFT with an insurance certificate from the insurer(s), broker(s) or agent(s) (hereinafter collectively the “Insurance Providers”) evidencing the applicable insurance coverage.  At its request, during the term of this Agreement CFFT may review Aridis’ insurance coverage with relevant Aridis personnel no more than one time per year.

 

8.                                      Intellectual Property Rights.  All inventions, data, know-how, information, results, analyses, and other intellectual property rights resulting from the Development Program shall, as between the parties, be owned by Aridis and the preparation, filing and maintenance of all patents and patent applications resulting from the Development Program shall, as between the parties, be the sole responsibility, and under the sole control, of Aridis.  Subject to Paragraph 5, CFFT hereby assigns and transfers to Aridis all of CFFT’s right, title, and interest in and to inventions, data, know-how, information, results, analyses, and other intellectual property rights resulting from the Development Program, CFFT’s access to, or knowledge or use of, any Aridis Development Program Technology, the Product, or confidential or proprietary information of Aridis, and all intellectual property rights related to any of the foregoing, free and clear of all liens, claims, and encumbrances.

 

7

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

9.                                      Termination of Agreement.

 

(a)                                 This Agreement will expire upon the completion of the Development Program if Aridis is not subject to a Post-Development Program Obligation unless sooner terminated as provided in this Paragraph 9(a).  Either party may terminate this Agreement for cause, without prejudice to any other remedies available to the terminated party with respect thereto, by providing the other party with written notice of such cause and intent to terminate; provided, however, that the other party shall have thirty (30) days following the receipt of written notice to cure such cause.  For this Paragraph 9, “cause” shall mean (i) a party’s material breach of its covenants or obligations under this Agreement or (ii) a bankruptcy or similar filing by a party or a proceeding under the applicable bankruptcy laws or under any dissolution or liquidation law or statute now or hereafter in effect and filed against such party or all or substantially all of its assets if such filing is not dismissed within sixty (60) days after the date of its filing.

 

(b)                                 The following provisions shall survive the termination of this Agreement:  Paragraphs 2, 5, 6, 8, 9, 10 (solely with respect to the confidentiality obligations therein), 11, and 12.

 

10.                               Audits.  At the request of CFFT, from time to time, Aridis shall permit CFFT, upon reasonable notice, to audit and examine such books and records of Aridis as may be necessary for verifying Aridis’ expenditures of the Award and the payment of royalties, if any, but no more frequently than once every calendar year.  All non-public information made available by Aridis as part of any such audit, as part of any other reports (whether written or non-written), or otherwise under this Agreement (including, but not limited to, in connection with the PAG) shall be regarded as Aridis’ confidential information under the confidentiality agreement between the parties, and CFFT hereby covenants that, except to the extent required by law (provided that CFFT promptly notifies Aridis of such requirement and permits Aridis to seek, and reasonably cooperates with Aridis at Aridis’ expense in seeking, a protective order therefor or other confidential treatment thereof), it shall not use any such information for any purpose other than determining whether Aridis has complied with its obligations hereunder (provided that CFFT may also use information provided through the PAG to further the purposes of the PAG hereunder) or, in the event of the grant of the Interruption License, the exercise thereof, or disclose any such information to any third party, and shall maintain such information in confidence in a manner at least as restrictive as its manner of treating its own confidential information of similar

 

8

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

nature and in any event not less than with a reasonable degree of care.  CFFT shall pay the cost of any such audit unless the audit discloses a deficiency of more than five 5% in any payment made to CFFT, in which event, Aridis shall reimburse CFFT for the cost of the audit.  In addition, all payments and other items found to be erroneous as a result of the audit shall be corrected.

 

11.                               Miscellaneous.

 

(a)                                 Governing Law.  This Agreement shall be governed by and construed in accordance with the internal laws of the State of Maryland

 

(b)                                 Dispute Resolution.

 

(i)                                     In the event of any dispute, claim or controversy arising out of, relating to or in any way connected to the interpretation of any provision of this Agreement, or the rights or obligations of either party under this Agreement (a “Dispute”), either party may at any time provide the other party written notice specifying the terms of such Dispute in reasonable detail.  As soon as practicable after receipt of such notice, an officer of each party shall meet at a mutually agreed upon time and location to engage in good faith discussions for the purpose of resolving such Dispute.  If the Dispute is not resolved within thirty (30) days of such notice, either party may institute arbitration in accordance with (ii) below.

 

(ii)                                  In the event any Dispute is not resolved in accordance with (i) above, such Dispute shall be resolved by final and binding arbitration.  Whenever a party decides to institute arbitration proceedings, it shall give written notice to that effect to the other party.  Arbitration shall be held in Washington, D.C., according to the then-current commercial arbitration rules of the Center for Public Resources (“CPR”), except to the extent such rules are inconsistent with this subparagraph.  The arbitration will be conducted by one (1) independent, neutral arbitrator who shall be mutually acceptable to both parties, such acceptance not to be unreasonably withheld, and who shall be appointed in accordance with CPR rules.  If the parties are unable to mutually agree on such an arbitrator within 20 business days of the notice of the institution of the arbitration proceedings, then either party shall have the arbitrator be appointed in accordance with CPR rules.  Any arbitrator chosen hereunder shall have educational training and industry experience sufficient to demonstrate a reasonable level of relevant scientific, financial, medical and industry knowledge.  The arbitrator shall use his/her best efforts to conduct and conclude the proceedings within thirty (30) days of the final arbitration hearing.  No arbitrator shall have the power to award punitive damages and such award is expressly prohibited.  The proceedings and decisions of the arbitrator shall be confidential, final and

 

9

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

binding on all of the parties.  Judgment on the award so rendered may be entered in any court having jurisdiction thereof.  The parties shall share the costs of arbitration according to the decision of the arbitrator.  Nothing in this subparagraph will preclude either party from seeking equitable or injunctive relief, or interim or provisional relief, from a court of competent jurisdiction, including a temporary restraining order, preliminary injunction, or any other form of permanent or interim equitable or injunctive relief, concerning a dispute either prior to or during any arbitration.

 

(c)                                  This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same Agreement.  Facsimile and other electronically scanned signatures shall have the same effect as their originals.

 

(d)                                 All communications between the parties with respect to any of the provisions of this Agreement will be sent to the addresses set out below, or to such other addresses as may be designated by one party to the other by notice pursuant hereto, by prepaid, certified air mail (which shall be deemed received by the other party on the seventh (7th) business day following deposit in the mail), or other electronic means of communication (each of which shall be deemed received when transmitted), with confirmation by first class letter, postage pre-paid, given by the close of business on or before the next following business day:

 

if to CFFT, to:

 

Preston Campbell, III, M.D.
 6931 Arlington Rd.
 Suite 200
 Bethesda, Maryland  20814
 Phone:  301-907-2541
 Fax:  301-907-2699
 Email:  pcampbell@cff.org

 

with a copy to:

 

Schaner & Lubitz, PLLC
 6931 Arlington Rd., Suite 200
 Bethesda, Maryland  20814
 Attn:  Kenneth I. Schaner, Esq.
 Phone:  240-482-2848
 Fax:  202-470-2241
 E-mail:  ken@schanerlaw.com

 

10

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

if to Aridis, to:

 

Aridis Pharmaceuticals, Inc.
 5941 Optical Court
 San Jose, California  95138
 Attn:  Vu Truong, CEO
 Phone:  408-385-1742
 Fax:  408-960-3822
 E-mail:  truongv@aridispharma.com

 

(e)                                  The paragraph headings are for convenience only and will not be deemed to affect in any way the language of the provisions to which they refer.

 

(f)                                   This Agreement may not be assigned by any party without the consent of the other party, except that either Party may assign this Agreement without such consent to an Affiliate of such party or in connection with the transfer, whether by sale of assets, merger or otherwise, of all or substantially all of the assets or business of such party to which this Agreement relates, provided that the assignee agrees in a writing delivered to the other Party that he or she agrees to be bound by this Agreement.  Any assignment that is not in accordance with this subparagraph 11(f) will be null and void ab initio.

 

(g)                                  Nothing herein contained shall be deemed to create an agency, joint venture, amalgamation, partnership or similar relationship between CFFT and Aridis.  Notwithstanding any of the provisions of this Agreement, neither party to this Agreement shall at any time enter into, incur, or hold itself out to third parties as having authority to enter into or incur, on behalf of the other party, any commitment, expense, or liability whatsoever, and all contracts, expenses and liabilities in connection with or relating to the obligations of each party under this Agreement shall be made, paid, and undertaken exclusively by such party on its own behalf and not as an agent or representative of the other.

 

(h)                                 Aridis shall submit any proposed press release or other public announcement, other than an academic, scholarly, or scientific publication, concerning the terms of this Agreement or this Award to the Public Affairs Department of CFFT prior to its public release with sufficient time prior to its public release to allow for review and comments, except to the extent any such release or announcement is required by law, rule, or regulation or the rules of any securities exchange.  CFFT’s support for the Development Program shall be acknowledged in any publications relating to the Development Program.  Nothing in this Agreement shall prohibit Aridis from disclosing the terms of this Agreement pursuant to federal securities laws or the rules of any securities exchange.

 

11

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

(i)                                     The parties agree that they intend to advance the body of general scientific knowledge of cystic fibrosis and its potential therapies and cures and the parties acknowledge that Aridis intends to, as commercially and scientifically reasonable based on the results of the Development Program, submit for publication the results of the Development Program in a scientific peer-reviewed publication on a timely basis and provide CFFT with copies of at least one public forum presentation annually.

 

(j)                                    In accordance with the U.S. Department of the Treasury Anti-Terrorist Financing Guidelines, Aridis shall take reasonable steps to ensure that the payments received from CFFT are not distributed to terrorists or their support networks or used for activities that support terrorism or terrorist organizations.  Aridis certifies that it is in compliance in all material respects with all laws, statutes and regulations restricting U.S. persons from dealing with any individuals, entities, or groups subject to Office of Foreign Assets Control (OFAC) sanctions.

 

(k)                                 Aridis shall provide CFFT on the effective date of this Agreement with a description of its other sources of support and update that description from time to time during the Development Program.

 

(l)                                     Aridis shall provide CFFT with a copy of its public filings, such as annual reports, with governmental units from time to time during the Development Program.

 

12.                               Definitions.

 

(a)                                 Unless otherwise defined in this letter, the following shall apply:

 

·                  “Actual Award” means the total amount of the Award actually paid to Aridis.

 

·                  “Affiliate” shall mean, with respect to a party, any entity, which directly or indirectly controls, is controlled by, or is under common control with, such party.  For these purposes, “control” shall refer to (a) the ownership, directly or indirectly, of at least fifty percent (50%) of the voting securities or other ownership interest of an entity; or (b) the possession, directly or indirectly, of the power to direct the management or policies of an entity, whether through the ownership of voting securities, by contract or otherwise.

 

·                  “Aridis Development Program Technology” shall mean all technology, in whole or in part, discovered, developed, or controlled, by Aridis or its Affiliates, as a result of the Development Program under this Agreement (solely for purposes of the Interruption License), including, without limitation, technology owned or controlled by Aridis prior to Aridis’ performance of the Development Program under this Agreement that is necessary in the performance of the Development Program under

 

12

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

this Agreement.  Without limitation, Aridis Development Program Technology shall include data, technical information, source codes, know-how, inventions (whether or not patented), trade secrets, laboratory notebooks, and processes and methods.

 

·                  “Cap” shall mean five (5) times the Actual Award if the First Commercial Sale occurs on or before December 31, 2022, and six (6) times the Actual Award if the First Commercial Sale occurs after that date.

 

·                  “Change of Control Transaction” shall mean the consummation of a transaction, whether in a single transaction or in a series of related and substantially contemporaneous transactions, constituting (i) a merger, share exchange or other reorganization, (ii) the sale by one or more stockholders of Aridis of stock representing a majority of the voting power of the stock of Aridis then outstanding to one or more related parties, or (iii) a sale of all or substantially all of the assets of Aridis (or of that portion of its assets related to the subject matter of this Agreement), in each case in which the stockholders of Aridis immediately prior to such transaction do not own a majority of the voting power of the acquiring, surviving or successor entity, as the case may be, immediately following such transaction; provided that a Change of Control Transaction shall not include an initial public offering or a bona fide financing transaction for the benefit of Aridis (i.e. in which Aridis raises capital for general working or business purposes) in which voting control of Aridis transfers to one or more persons or entities who acquire shares of Aridis, and the existing Aridis stockholders receive no consideration directly or indirectly in connection with the transaction or initial public offering.

 

·                  “Commercially Reasonable Efforts” shall mean the level of effort, expertise and resources that is substantially and materially consistent with industry standards for companies of similar size and financial resources to research, develop and commercialize the Product, provided such research, development and commercialization is technically feasible, devoting the degree of attention and diligence to such efforts that is substantially and materially consistent with industry standards for a product at a comparable stage in development, with similar market potential, and taking into account material issues of safety and efficacy, proprietary position, competitive environment, regulatory environment, and other relevant scientific technical and commercial issues that are not subject to correction with reasonable efforts;

 

·                  “Field” shall mean the treatment of cystic fibrosis and other pulmonary diseases.

 

·                  “First Commercial Sale” shall mean the date on which the Product is first sold in a country in a bona fide commercial sale following marketing authorization of the Product in such

 

13

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

country by, on behalf of or under the authority of the Company or any of the Company’s Affiliates or licensees or sublicensees in an arm’s-length transaction to a third party.  Sales for clinical study purposes or compassionate, named patient or similar use shall not constitute a First Commercial Sale.

 

·                  “Interest” shall mean the prime rate applicable during the relevant time period, as published in the Wall Street Journal, plus five (5) percentage points.

 

·                  “Interruption” shall mean the cessation by the Company (including for this purpose its Affiliates and licensees and sublicensees) of Commercially Reasonable Efforts to develop a Product for more than one hundred eighty (180) consecutive days at any time before the First Commercial Sale of the Product.  For clarity, delays resulting from events outside of Aridis’ reasonable control (e.g., technical difficulties, shortages of supplies or materials, delays in preclinical or clinical studies or regulatory processes, etc.) will not be deemed cessation of Commercially Reasonable Efforts.

 

·                  “Net Sales” shall mean for any period, the gross amount received for sales of the Product in the Field by Aridis or any Aridis Affiliate or any licensee or sublicensee of either as applicable (a “Selling Person”), to a non-Affiliate of the Selling Person, less the following deductions, in each case to the extent specifically related to the Product and taken by the Selling Person or otherwise paid for or accrued by the Selling Person (“Permitted Deductions”):

 

trade, cash, promotional and quantity discounts and inventory management fees paid to wholesalers;

 

tariffs, duties, excises and taxes on sales (including sales or use taxes or value added taxes) to the extent imposed upon and paid directly with respect to such sales (and excluding national, sales or local taxes based on income);

 

freight, insurance, packing costs and other transportation charges allocated to the sale;

 

amounts repaid or credits taken by reason of damaged goods, rejections, defects, expired dating, recalls or returns or because of retroactive price reductions, billing errors, or trial prescriptions;

 

charge back payments, rebates and discounts granted to (i) managed healthcare organizations, (ii) federal, state or provincial or local governments or other agencies, (iii) purchasers and reimbursers or (iv) trade customers, including wholesalers and chain and pharmacy buying groups;

 

discounts paid under state legislated or seller-sponsored discount prescription drug programs or reductions for coupon and voucher programs; and

 

documented custom duties actually paid by the Selling Person.

 

14

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Sales of the Product between or among Aridis and its Affiliates and any licensee or sublicensee of either for resale, or for use in the production or manufacture of the Product, shall not be included within Net Sales; provided, however, that any subsequent sale of the Product (or any Product produced or manufactured using the Product) by Aridis or its Affiliate or licensee or sublicensee to another non-Affiliate third party shall be included within Net Sales.  Net Sales shall exclude any sale or other distribution for use in a clinical trial or other Development activity, for compassionate or named-patient use or for test marketing.

 

·                  “Product” shall mean any product in any form, dosage or preparation containing gallium citrate or gallium nitrate citrate as an active ingredient intended for treatment of patients in the Field.

 

We are pleased to make the Award described in this Agreement.  Please indicate your agreement to the terms set forth in this Agreement by signing below.

 

	
Sincerely,
    
	
 
    
	
Cystic   Fibrosis Foundation Therapeutics, Inc.
    
	
 
    
	
By:
    	
/s/ Preston W. Campbell
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Preston W. Campbell
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
President
    	
 
    
	
 
    
	
Agreed:
    
	
 
    
	
Aridis, Inc.
    
	
 
    
	
By:
    	
/s/ Vu Truong
    	
 
    
	
 
    	
 
    	
 
    
	
Name:
    	
Vu Truong
    	
 
    
	
 
    	
 
    	
 
    
	
Title:
    	
CEO
    	
 
    

 

15

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Exhibit A

 

Development Program Plan and Budget

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

Exhibit B

 

Payment Schedule

 

	
Milestone
    	
 
    	
Milestone Payment
    	
 
    	
Expected Milestone
   Estimated Completion Date
    
	
Contract execution
    	
 
    	
[***]
    	
 
    	
December 2016
    
	
Identification of NOAEL   of either gallium citrate or gallium nitrate citrate from non-GLP 7-day, 2   species tox studies
    	
 
    	
[***]
    	
 
    	
March 2017
    
	
First animal from each   species dosed in 4-week GLP inhalational toxicology studies
    	
 
    	
[***]
    	
 
    	
April 2017
    
	
Completion of 4-week   GLP inhalational toxicology studies
    	
 
    	
[***]
    	
 
    	
September 2017
    
	
Therapeutics   Development Network Protocol Review Committee approval of CF clinical study
    	
 
    	
[***]
    	
 
    	
October 2017
    
	
IND opened
    	
 
    	
[***]
    	
 
    	
December 2017
    
	
First CF patient, first   dose in Phase 2A clinical study
    	
 
    	
[***]
    	
 
    	
February 2018
    
	
Median CF patient,   first dose in Phase 2A clinical study
    	
 
    	
[***]
    	
 
    	
July 2018
    
	
Last CF patient, last   visit in Phase 2A clinical study
    	
 
    	
[***]
    	
 
    	
December 2018
    
	
Final integrated   clinical and statistical report reviewed and approved by CFFT
    	
 
    	
[***]
    	
 
    	
March 2019
    

 

Payments shall be made by CFFT within forty-five (45) days of receipt from Aridis of the corresponding invoice and supporting documentation verifying occurrence of such milestone and PAG verification.

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

TECHNICAL ABSTRACT

 

	
APPLICANT NAME
    	
DATE SUBMITTED
    
	
Truong, Vu
    	
8/10/2016 8:34:43 PM
    

 

TITLE OF PROJECT (Titles exceeding 81 characters, including spaces and punctuation, will be truncated.)

Inhaled Gallium Citrate Anti-Infective in CF

 

This Abstract will become public information; therefore, do not include proprietary/confidential information.

 

The overall objective of this proposal is to develop an inhalable, broad spectrum therapy to improve lung function in CF patients based on the potent anti-infective property of gallium citrate.  Gallium citrate represent a new class of anti-infective which exhibits a unique mechanism of action involving iron metabolism interference that is different from all current antibiotics.  This drug candidate exhibits strong biofilm activity, long lung half-life, and absence of detectable drug resistance.  Gallium citrate is the active species formed when blending citrate buffer with gallium nitrate, which is similar to Ganite®, a drug that has been studied for its anti-infective properties by Dr. Pradeep Singh and others.  Gallium citrate exhibits in vitro activity against a broad spectrum of Gram (-) and Gram (+) bacteria, which is indistinguishable from Ganite.  A recent proof-of-concept open label phase 1 clinical study conducted by Dr. Christopher Goss et al. with an IV Ganite formulation in CF patients showed preliminary hint of improvement in lung function, despite relatively low lung uptake of the drug.  Such data provided a strong rationale for local inhaled delivery.  The inhaled formulation that has been developed for this drug candidate is compatible with several commercially available nebulizers (e.g. PARI eFlow, Aerogen Aeroneb Go) that are being used by many CF patients.  We propose to extend these studies by completing inhalation toxicology testing, followed by phase 1 and 2A clinical trials in CF patients.

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

LAY ABSTRACT

 

	
APPLICANT NAME
    	
DATE SUBMITTED
    
	
Truong, Vu
    	
8/10/2016 8:34:43 PM
    

 

TITLE OF PROJECT (Titles exceeding 81 characters, including spaces and punctuation, will be truncated.)

Inhaled Gallium Citrate Anti-Infective in CF

 

This Abstract will become public information; therefore, do not include proprietary/confidential information.

 

We are developing an inhaled antimicrobial therapy called PanaecinTM with broad spectrum activity against bacteria, fungi, and viruses to treat chronic lung infections in cystic fibrosis (CF) patients.  This gallium-based therapy works differently than current antibiotics and relies on its ability to interfere with iron uptake and metabolism in microorganisms.  It essentially employs a “Trojan horse” type of mechanism tricking the microorganism into ingesting gallium rather than iron.  Since iron is essential for growth and survival, the bacteria starve for iron and cannot grow.  Laboratory studies have shown that Panaecin exhibits broad spectrum antimicrobial activity against many of the bacteria that are found in the lungs of CF patients including Pseudomonas aeruginosa, Stenotrophomonas maltophilia, Burkholderia cepacia, B. cenocepacia, and Staphylococcus aureus.  Furthermore, Panaecin was 10-fold more potent than current inhaled therapies against P. aeruginosa and also exhibits several key advantages including a long residence time in the lung (possibly reducing dosing frequency), no detectable development of drug resistance (minimizing “drug holidays”) and strong activity against bacteria growing in biofilms.  We have also shown that an inhaled form of this drug can protect animals from pneumonia caused by P. aeruginosa.  A recent proof-of-concept phase 1 clinical study with an intravenously administered form of a gallium complex in CF patients indicated that it was safe and there was a preliminary hint of lung function improvement.  This proposal is designed to first demonstrate the safety of inhaled Panaecin in animals, followed by phase 1 and phase 2 clinical trials in CF patients to demonstrate safety and efficacy, respectively.

 

 

Portions of this Exhibit, indicated by the mark “[***],” were omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment pursuant to Rule 406 of the Securities Act of 1933, as amended

 

APPLICANT:  Truong, Vu

 

PROPOSED BUDGET

 

	
 
    	
 
    	
Period 1
    	
 
    	
Period 2
    	
 
    	
Period 3
    	
 
    	
Period 4
    	
 
    	
Period 5
    	
 
    
	
Start Date   (mm/dd/yyyy)
    	
 
    	
Sep 01, 2016
    	
 
    	
Sep 01, 2017
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
End Date   (mm/dd/yyyy)
    	
 
    	
Aug 31, 2017
    	
 
    	
Mar 31, 2019
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Personnel   Direct Costs
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Salaries &   Wages
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Fringe Benefits
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SubTotal:   Personnel Costs
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Non -   Personnel Direct Costs
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Consultant Costs
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Equipment
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supplies
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Travel (North   American Continent ONLY)
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Patient Care   In-Patient
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Patient Care   Out-Patient
    	
 
    	
0.00
    	
 
    	
1736197.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Alterations and   Renovations
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other Expenses
    	
 
    	
1165900.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Consortium &   Contractual Direct
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Sub Total:   Non-Personnel costs:
    	
 
    	
1165900.00
    	
 
    	
1736197.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL DIRECT   COSTS
    	
 
    	
1165900.00
    	
 
    	
1736197.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Indirect   Costs (i.e. overhead costs, facilities and administrative   costs)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
INDIRECT COSTS
    	
 
    	
0.00
    	
 
    	
0.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL COSTS
    	
 
    	
1165900.00
    	
 
    	
1736197.00
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

 

P.I. Vu Truong, Ph.D.

 

THERAPEUTICS DEVELOPMENT AWARD

 

TABLE OF CONTENTS / CHECKLIST

 

Number pages consecutively at the bottom of the page.  Type the name of the Principal Investigator at the top of each page.

 

	
SECTION 1*
    	
PAGES   1-5
    
	
Face Page
    	
1-2
    
	
Lay Abstract
    	
3
    
	
Technical Abstract
    	
4
    
	
Proposed Budget
    	
5
    
	
(*SECTION 1   is automatically assembled by Proposal Central. Pagination is not required.)
    	
 
    
	
 
    	
 
    
	
SECTION 2
    	
 
    
	
Table of Contents
    	
6
    
	
Detailed   Budget(s) for each year of support
    	
7
    
	
Budget   Justifications(s)
    	
10
    
	
Biographical Sketches   of Key Personnel
    	
41
    
	
Facilities Available
    	
59
    
	
 
    	
 
    
	
SECTION 3 -   Research Plan (30 page max)
    	
 
    
	
Specific Aims
    	
64
    
	
Milestones Timetable   Outline
    	
64
    
	
Significance
    	
65
    
	
Experimental Design,   Methods and Milestones
    	
73
    
	
Consultants/Collaborative   Arrangements
    	
83
    
	
Literature Cited
    	
84
    
	
 
    	
 
    
	
SECTION 4 -   Appendix / other attachments
    	
(Pagination not necessary.)
    
	
Contents:   Summary results of the 14-days exploratory toxicology study
    	
 
    

 

 

DETAILED BUDGET FOR YEAR 1

 

From: September 1, 2016 Through: August 31, 2017

 

	
Personnel (Applicant Organization Only)
    	
 
    	
TOTALS
    	
 
    
	
Name
    	
 
    	
Position Title
    	
 
    	
%
    	
 
    	
Hours per
   Week
    	
 
    	
Salary
    	
 
    	
Fringe
   Benefits
    	
 
    	
CFFT
    	
 
    	
Sponsor
   Matching Costs
    	
 
    
	
Vu Truong, Ph.D.
    	
 
    	
PI
    	
 
    	
20
    	
 
    	
8
    	
 
    	
55,000
    	
 
    	
20
    	
%
    	
—
    	
 
    	
66,000
    	
 
    
	
Eric Patzer,   Ph.D.
    	
 
    	
Co-investigator
    	
 
    	
20
    	
 
    	
8
    	
 
    	
55,000
    	
 
    	
20
    	
%
    	
—
    	
 
    	
66,000
    	
 
    
	
Andrew Kelson,   Ph.D.
    	
 
    	
Co-investigator
    	
 
    	
40
    	
 
    	
16
    	
 
    	
54,400
    	
 
    	
20
    	
%
    	
—
    	
 
    	
65,280
    	
 
    
	
Phillip   Lovalenti, Ph.D.
    	
 
    	
Co-investigator
    	
 
    	
35
    	
 
    	
14
    	
 
    	
58,800
    	
 
    	
20
    	
%
    	
—
    	
 
    	
70,560
    	
 
    
	
Guy Lalonde,   Ph.D.
    	
 
    	
Co-investigator
    	
 
    	
18
    	
 
    	
7
    	
 
    	
25,000
    	
 
    	
20
    	
%
    	
—
    	
 
    	
30,000
    	
 
    
	
Luisa Yee
    	
 
    	
Manager
    	
 
    	
50
    	
 
    	
20
    	
 
    	
63,780
    	
 
    	
20
    	
%
    	
—
    	
 
    	
76,536
    	
 
    
	
Heeral Kothari
    	
 
    	
Res Asst
    	
 
    	
50
    	
 
    	
20
    	
 
    	
30,227
    	
 
    	
20
    	
%
    	
—
    	
 
    	
36,272
    	
 
    
	
Hong Yang
    	
 
    	
Res Asst
    	
 
    	
50
    	
 
    	
20
    	
 
    	
24,000
    	
 
    	
20
    	
%
    	
—
    	
 
    	
28,800
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Subtotals
    	
 
    	
 
    	
 
    	
 
    	
 
    	
—
    	
 
    	
439,448
    	
 
    
	
Consultant Costs
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Brian Rogers
    	
 
    	
 
    	
 
    	
 
    	
 
    	
49,000
    	
 
    
	
Elizabeth   Leininger, Ph.D.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
75,000
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
124,000
    	
 
    
	
Equipment   (Itemize)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
—
    	
 
    
	
Supplies (Itemize   by category)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Laboratory   supplies
    	
 
    	
 
    	
 
    	
15,000
    	
 
    
	
Animals for   efficacy testing
    	
 
    	
 
    	
 
    	
15,000
    	
 
    
	
Assay reagents
    	
 
    	
 
    	
 
    	
15,000
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
45,000
    	
 
    
	
Travel
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Annual Meeting
    	
 
    	
 
    	
 
    	
2,000
    	
 
    
	
GLP Tox site   visit
    	
 
    	
 
    	
 
    	
7,500
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
9,500
    	
 
    
	
Patient Care Costs
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other Expenses   (Itemize by category)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Liquid Aerosol   Development, aerosol characterization, assay devt, animal PK/biodistribution
    	
 
    	
 
    	
 
    	
 
    	
 
    	
1,150,000
    	
 
    
	
Gallium Citrate   process development & manufacturing (GMP)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
121,994
    	
 
    
	
Gallium Citrate   ICH Stability testing
    	
 
    	
 
    	
 
    	
 
    	
 
    	
48,750
    	
 
    
	
Fill/Finish of   final drug product
    	
 
    	
 
    	
 
    	
450,000
    	
 
    
	
non-GLP research   toxicology studies
    	
 
    	
370,230
    	
 
    	
 
    	
 
    
	
GLP Toxicology   studies, genetic tox and safety pharmacology
    	
 
    	
795,670
    	
 
    	
 
    	
 
    
	
IND filing
    	
 
    	
 
    	
 
    	
50,000
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
1,165,900
    	
 
    	
1,820,744
    	
 
    
	
TOTAL   DIRECT COSTS
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Component   I -
    	
Discovery and/or Preclinical Development Phase: CFFT   contributions not to exceed $200,000
    	
 
    	
1,165,900
    	
 
    	
2,438,692
    	
 
    
	
Component   II -
    	
Clinical Phase: CFFT contributions not to exceed   $750,000
    	
 
    	
 
    	
 
    	
 
    	
 
    
																	

 

 

DETAILED BUDGET FOR YEAR 2

 

From: September 1, 2017   Through: August 31, 2018

 

	
Personnel (Applicant Organization Only)
    	
 
    	
TOTALS
    	
 
    
	
Name
    	
 
    	
Position Title
    	
 
    	
%
    	
 
    	
Hours per
   Week
    	
 
    	
Salary
    	
 
    	
Fringe
   Benefits
    	
 
    	
CFFT
    	
 
    	
Sponsor
   Matching Costs
    	
 
    
	
Vu Truong, Ph.D.
    	
 
    	
PI
    	
 
    	
20
    	
 
    	
8
    	
 
    	
55,000
    	
 
    	
20
    	
%
    	
—
    	
 
    	
66,000
    	
 
    
	
Eric Patzer,   Ph.D.
    	
 
    	
Co-investigator
    	
 
    	
20
    	
 
    	
8
    	
 
    	
55,000
    	
 
    	
20
    	
%
    	
—
    	
 
    	
66,000
    	
 
    
	
Andrew Kelson,   Ph.D.
    	
 
    	
Co-investigator
    	
 
    	
30
    	
 
    	
12
    	
 
    	
40,800
    	
 
    	
20
    	
%
    	
—
    	
 
    	
48,960
    	
 
    
	
Phillip   Lovalenti, Ph.D.
    	
 
    	
Co-investigator
    	
 
    	
35
    	
 
    	
6
    	
 
    	
25,200
    	
 
    	
20
    	
%
    	
—
    	
 
    	
30,240
    	
 
    
	
Yu Ping Yen,   Ph.D.
    	
 
    	
Clinical Ops
    	
 
    	
28
    	
 
    	
11
    	
 
    	
62,500
    	
 
    	
20
    	
%
    	
—
    	
 
    	
75,000
    	
 
    
	
Paul-Andre de   Lame, M.D.
    	
 
    	
CMO
    	
 
    	
24
    	
 
    	
9.5
    	
 
    	
83,333
    	
 
    	
20
    	
%
    	
—
    	
 
    	
100,000
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Subtotals
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
386,200
    	
 
    
	
Consultant Costs
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Elizabeth   Leininger, Ph.D.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
50,000
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
50,000
    	
 
    
	
Equipment   (Itemize)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supplies   (Itemize by category)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Assay reagents
    	
 
    	
 
    	
 
    	
 
    	
 
    	
15,000
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
15,000
    	
 
    
	
Travel
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Annual Meeting
    	
 
    	
 
    	
 
    	
 
    	
 
    	
2,000
    	
 
    
	
Clinical site   visits
    	
 
    	
 
    	
 
    	
 
    	
 
    	
9,000
    	
 
    
	
QA site visit
    	
 
    	
 
    	
 
    	
 
    	
 
    	
2,500
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
13,500
    	
 
    
	
Patient Care   Costs
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Phase 1/2a   Safety, tolerability & PK Clinical Trial in healthy & CF   adults
    	
 
    	
 
    	
 
    	
1,157,465
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
1,157,465
    	
 
    	
 
    	
 
    
	
Other Expenses   (Itemize by category)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL   DIRECT COSTS
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Component   I -
    	
Discovery and/or Preclinical Development Phase: CFFT   contributions not to exceed $200,000
    	
 
    	
1,157,465
    	
 
    	
464,700
    	
 
    
	
Component   II - 
    	
Clinical Phase: CFFT contributions not to exceed   $750,000
    	
 
    	
 
    	
 
    	
 
    	
 
    
																	

 

 

DETAILED BUDGET FOR YEAR 3

 

From: September 1, 2018   Through: March 31, 2019

 

	
Personnel (Applicant Organization Only)
    	
 
    	
TOTALS
    	
 
    
	
Name
    	
 
    	
Position Title
    	
 
    	
%
    	
 
    	
Hours per
   Week
    	
 
    	
Salary
    	
 
    	
Fringe
   Benefits
    	
 
    	
CFFT
    	
 
    	
Sponsor
   Matching Costs
    	
 
    
	
Vu Truong, Ph.D.
    	
 
    	
PI
    	
 
    	
20
    	
 
    	
8
    	
 
    	
55,000
    	
 
    	
20
    	
%
    	
—
    	
 
    	
66,000
    	
 
    
	
Eric Patzer,   Ph.D.
    	
 
    	
Co-investigator
    	
 
    	
20
    	
 
    	
8
    	
 
    	
55,000
    	
 
    	
20
    	
%
    	
—
    	
 
    	
66,000
    	
 
    
	
Andrew Kelson,   Ph.D.
    	
 
    	
Co-investigator
    	
 
    	
40
    	
 
    	
12
    	
 
    	
40,800
    	
 
    	
20
    	
%
    	
—
    	
 
    	
48,960
    	
 
    
	
Phillip   Lovalenti, Ph.D.
    	
 
    	
Co-investigator
    	
 
    	
35
    	
 
    	
6
    	
 
    	
25,200
    	
 
    	
20
    	
%
    	
—
    	
 
    	
30,240
    	
 
    
	
Yu Ping Yen,   Ph.D.
    	
 
    	
Clinical Ops
    	
 
    	
9
    	
 
    	
3.6
    	
 
    	
20,250
    	
 
    	
20
    	
%
    	
—
    	
 
    	
24,300
    	
 
    
	
Paul-Andre de   Lame, M.D.
    	
 
    	
CMO
    	
 
    	
10
    	
 
    	
4
    	
 
    	
35,000
    	
 
    	
20
    	
%
    	
—
    	
 
    	
42,000
    	
 
    
	
Subtotals
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
277,500
    	
 
    
	
Consultant Costs
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Elizabeth   Leininger, Ph.D.
    	
 
    	
 
    	
 
    	
 
    	
 
    	
25,000
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
25,000
    	
 
    
	
Equipment   (Itemize)
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Supplies   (Itemize by category)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Travel
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Annual Meeting
    	
 
    	
 
    	
 
    	
2,000
    	
 
    
	
Clinical site   visits
    	
 
    	
 
    	
 
    	
9,000
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
11,000
    	
 
    
	
Patient Care   Costs
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Phase 1/2a   Safety, tolerability & PK Clinical Trial in healthy & CF   adults
    	
 
    	
578,732
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
578,732
    	
 
    	
 
    	
 
    
	
Other Expenses   (Itemize by category)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Subtotal
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
TOTAL   DIRECT COSTS
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Component   I -
    	
Discovery and/or Preclinical Development Phase: CFFT   contributions not to exceed $200,000
    	
 
    	
578,732
    	
 
    	
313,500
    	
 
    
	
Component   II -
    	
Clinical Phase:   CFFT contributions not to exceed $750,000
    	
 
    	
 
    	
 
    	
 
    	
 
    
																	

 

 

BUDGET JUSTIFICATION

 

	
Year: all
    	
 
    	
From: September 1, 2016
    	
 
    	
Through: March 31, 2019
    
	
Direct Costs:
   CFFT - $2,902,097
   Sponsor - $3,216,892
    	
 
    	
Indirect Costs:
    Not allowed.
    	
 
    	
Total Costs: $6,228,401
    

 

Provide justification by major categories.  Please note that indirect costs are not allowed.

 

BUDGET JUSTIFICATION FOR ALL THREE YEARS

 

Key Personnel

 

1.                                      Vu Truong, Ph.D. - Principal Investigator

 

Dr. Truong Aridis’ Chief Scientific Officer at Aridis will have overall responsibility for managing the scientific and technical aspects of the project.  This takes advantage of both his core area of expertise, as well as his experience managing technically diverse projects.  Dr. Truong has more than 15 years of experience in formulation and stabilization of macromolecules.  He is one of the leading researchers studying the biopreservation and delivery of biologicals.

 

2.                                      Eric J. Patzer, Ph.D., Aridis - Co-investigator

 

Dr. Patzer has over 30 years of experience managing large organizations including project management departments of up to 10 professionals, and spanning all product development stages from early preclinical development to commercialization.  He was the project leader of the FluMist® (intranasal influenza) vaccine during preclinical and clinical development and has managed all of the major activities proposed in this grant application (formulation development, preclinical testing, clinical manufacturing, GLP toxicology studies).  He will provide the overall senior level guidance to the project and will be responsible for oversight of the financial, resource allocation, timelines and business relationships of the project.

 

3.                                      Phillip Lovalenti, Ph.D., Aridis — Director

 

Dr. Lovalenti will be leading the final fill/finish of the drug product.  He has over 15 years’ experience in pharmaceutical formulation development, drug delivery and sustained release formulations.  Prior to joining Aridis, he developed spray drying processes for manufacturing sustained release drug formulations and also developed formulations for intravenous and intranasal delivery.  He will work closely with Dr. Truong and have primary responsibility to develop the final container and fill.

 

4.                                      Andrew Kelson, Ph.D. - Director

 

He will be assisting Vu Truong in the overall technical oversight of the project including assay development.  Dr. Kelson has over 20 years of experience in the pharmaceutical industry most recently as Group Leader at Telik and has worked on the synthesis and scale-up of small molecule drugs.  He has typically initiated projects using a medicinal synthetic approach for producing milligram to gram quantities of material to produce a safe, efficient and continuous process that can then be scaled up to produce over 1kg of API.  He has been involved in preparation of Master Batch Records and analytical methods that were transferred to an external CRO for the production of over 10 kg of cGMP grade API.

 

 

5.                                      Paul-Andre de Lame, M.D. - Chief Medical Officer

 

Dr. de Lame is a seasoned industry executive with over 30 years of experience in the biopharmaceutical industry in clinical development of major cardiovascular, metabolic and anti-infective agents.  His strategic leadership has been instrumental in the success of several blockbusters, including enalapril (Vasotec®, Renitec®), and atorvastatin (Lipitor®).  As an industry physician and expert medical monitor, he has been part on an ongoing basis of significant research programs related to heart failure, ischemic heart disease, and metabolic disorders assessing treatment interventions ranging from drugs and biologics to medical devices and stem cell therapy.  Dr. de Lame was a key contributor to the clinical development effort for several vaccines and antibiotics, and the life cycle management of imipenem/cilastatin (Tienam®, Primaxin®), norfloxacin, and several medical devices.  He will be in charge of the clinical development of gallium citrate.

 

Other Personnel

 

6.                                      Guy Lalonde, Ph.D. - Preclinical Scientist

 

Dr. Lalonde is an experienced scientist with over 15 years’ experience across a wide range of drug discovery, pre-clinical research and development functions.  He most recently worked at Nektar Therapeutics where he was responsible for selection of candidate compounds following aerosol administration.  He developed rat and dog metabolic PK/PD models, as well as immunoassays, binding assays and cell based functional assays for the characterization of pharmacokinetic, pharmacological and potential toxicological properties of candidate compounds.  In this capacity he managed CRO execution of animal studies of candidate compounds in support of IND-enabling studies.  He will participate in the analysis of the animal efficacy and toxicokinetoc/PK studies in year 1.

 

7.                                      Yu Ping Yen, Ph.D. - VP Clinical Operations

 

Dr. Yen has more than 25 years of experience in successfully managing clinical operations with a proven track record in delivering strong supportive clinical data culminating in multiple NDA/BLA and PMA/510(k) product approvals in the US and EU.  She has led highly motivated in-house clinical and cross-functional teams, vendors and CROs in strategic planning and execution of early to late phase clinical trials in oncology, immunotherapy, CNS, CVD and upper respiratory disorders.  She has a thorough knowledge of FDA regulatory requirements and ICH/GCP guidelines, and has authored and supported the clinical sections of multiple global regulatory submissions.  She will be involved in the clinical development strategy and will be instrumental in implementing the phase 1 and 2A clinical trials in year 2 and 3.

 

8.                                      Luisa Yee - Senior Manager

 

Ms. Yee has over 20 years of experience in R&D laboratories developing and validating analytical assays including antimicrobial susceptibility assays.  She will bring a level of experience to this project, which will ensure that experiments are well designed and executed, so that there is a timely execution of the project goals.  She will perform antimicrobial testing and provide analytical support for all process and formulation development, preclinical animal PK, efficacy and GLP Tox studies, and manufacturing support.  She will oversee the work of the two research associates (H. Kothari and H Yang).

 

9.                                      Two Research Associates (H. Kothari, H. Yang)

 

They will work with Ms. Yee to provide analytical support and antimicrobial susceptibility testing to the project.

 

 

Key Consultants:

 

Brian Rogers, Ph.D., DABT

 

Dr. Rogers has an extensive background in preclinical toxicology and safety assessment of both small and large biological molecules.  He has 24 years of industrial toxicology experience in biotechnology and pharmaceuticals, including 5 years at Genentech with a wide variety of drug products, routes of administration, and clinical indications.  He has assessed the safety implications of product impurities, contamination, and occupational exposure to selected drugs and chemicals.  Dr. Rogers has extensively interacted with the FDA in correspondence and in face-to-face meetings and has authored over 60 IND and NDA/BLA nonclinical sections for over 75 development projects.  He will have responsibility for the design and execution of the preclinical toxicology studies and will prepare the Preclinical Toxicology section of the IND for submission to the FDA.  He is currently a consultant to Aridis on the design and implementation of the GLP toxicology studies.

 

Elizabeth Leininger, Ph.D.

 

Dr. Leininger is a Regulatory Affairs and Quality professional with over 20 years of experience at CBER/FDA, the BioPharmaceutical Industry and as a consultant.  She has been involved in global strategic development, licensing and post-marketing regulatory activities of products and has experience in the evaluation, development and implementation of Quality Systems, including documentation, training, auditing and gap analysis.  Dr. Leininger has considerable experience interacting with the FDA and other regulatory agencies and has prepared, reviewed and submitted regulatory documents for clinical and CMC sections of new drugs under development, specifically pre-IND documents, US INDs, amendments, comparability protocols, orphan drug applications, master files, facility design packages, meeting requests, briefing documents, EU IMPD/CTDs and Canadian CTAs.

 

Consultant Costs:

 

·                  Dr. Brian Rogers - $49,000 (year 1) for consulting services for the design and implementation of the research and GLP toxicology studies for the IND for submission.

·                  Dr. Elizabeth Leininger - $125,000 for regulatory consultant, who will advise and compile document for pre- IND meeting, IND filing, and preparation of clinical data for FDA submission ($75K in year 1, $50K in year 2 and $25K in year 3).

 

Travel Costs: Dr. Truong (Principal Investigator) one trip annually to attend annual review meetings ($2,000 per trip.  Three trips per year in years 2 & 3 for clinical consultant Yu Ping Yen for clinical site visits (3K/trip).  Regulatory/QA consultant Elizabeth Leininger one trip per year in year 1 & 2 to visit preclinical & clinical sites ($2.5K/trip).  Two trips in year 1 for toxicologist Brian Rogers to visit LRRI for the preclinical animal toxicology study ($2.5k/trip).

 

Supplies: $30,000 year 1, $15,000 for year 2 for analytical testing of preclinical and clinical samples and stability studies of the GMP clinical lots.

 

Subawards/Consortium/Contractual costs:

 

IIT Research Institute (IITRI) will provide the Non-GLP pilot dose ranging studies in rats and dogs ($370,230), the 4 week GLP toxicology study in rats and dogs ($715,740) and the Ames, micronucleus, chromosome aberration and hERG assays ($79,930) all in year 1for a total cost of $1,165,900.

 

 

Aridis Pharmaceuticals, Inc.

 

Clinical Budget Summary
  STUDY NUMBER:  AR-501-002
 VERSION DATE:  9-Aug-2016

 

	
Total Study Budget Estimate
    	
 
    	
 
    	
 
    	
$
    	
1,736,197.28
    	
 
    
	
Payment   Schedule (Tentative)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
At the   time of Contract Signing (Non-Refundable)
    	
 
    	
 
    	
 
    	
20
    	
%
    
	
At   Start of Screening
    	
 
    	
 
    	
 
    	
25
    	
%
    
	
At Time   of First Dose
    	
 
    	
 
    	
 
    	
20
    	
%
    
	
At the time   of the last shipment of primary samples
    	
 
    	
 
    	
 
    	
20
    	
%
    
	
At time   of Data Entry Completion
    	
 
    	
 
    	
 
    	
10
    	
%
    
	
At time   of IRB Close Out
    	
 
    	
 
    	
 
    	
5
    	
%
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Assumptions
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Number   of Study Sites
    	
 
    	
3
    	
 
    	
 
    	
 
    
	
Number   of Subjects
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Healthy   Volunteers
    	
 
    	
12
    	
 
    	
 
    	
 
    
	
Cystic Fibrosis Patients
    	
 
    	
18
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
30
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Budget   Estimate Details
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Clinical   Cost
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Per subject -   Healthy volunteers
    	
 
    	
$
    	
37,699.58
    	
 
    	
 
    	
 
    
	
Per subject -   Cystic Fibrosis Patients
    	
 
    	
$
    	
25,000.00
    	
 
    	
 
    	
 
    
	
Total for study
    	
 
    	
 
    	
 
    	
$
    	
902,395.01
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Other   Costs - Healthy Volunteers Portion
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
SNBL Study   Coordination
    	
 
    	
 
    	
 
    	
$
    	
28,180.54
    	
 
    
	
Additional costs
    	
 
    	
 
    	
 
    	
$
    	
17,746.13
    	
 
    
	
Screen Failures
    	
 
    	
$
    	
1,661.30
    	
 
    	
 
    	
 
    
	
N
    	
 
    	
12
    	
 
    	
 
    	
 
    
	
Total for study
    	
 
    	
 
    	
 
    	
$
    	
19,935.60
    	
 
    
	
Stipend for   Enrolled Subjects
    	
 
    	
$
    	
4,350.00
    	
 
    	
 
    	
 
    
	
N
    	
 
    	
12
    	
 
    	
 
    	
 
    
	
Total for study
    	
 
    	
 
    	
 
    	
$
    	
52,200.00
    	
 
    
	
Stipend for   Alternates
    	
 
    	
$
    	
110.00
    	
 
    	
 
    	
 
    
	
N
    	
 
    	
4
    	
 
    	
 
    	
 
    
	
Total for study
    	
 
    	
 
    	
 
    	
$
    	
440.00
    	
 
    
	
Stipend for   Screen Failures
    	
 
    	
$
    	
35.00
    	
 
    	
 
    	
 
    
	
N
    	
 
    	
12
    	
 
    	
 
    	
 
    
	
Total for study
    	
 
    	
 
    	
 
    	
$
    	
420.00
    	
 
    
	
Advertising
    	
 
    	
 
    	
 
    	
$
    	
1,500.00
    	
 
    
	
Stipend -   Unscheduled Visit
    	
 
    	
$
    	
50.00
    	
 
    	
As Incurred
    	
 
    
	
Courier Fees   (World Courier)
    	
 
    	
$
    	
1,000.00
    	
 
    	
As Incurred
    	
 
    
	
Attorney’s Fees
    	
 
    	
$
    	
1,500.00
    	
 
    	
As Incurred
    	
 
    

 

 

	
Other   Costs - entire study
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Start-up cost
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Per site
    	
 
    	
$
    	
14,850.00
    	
 
    	
 
    	
 
    
	
Total for study
    	
 
    	
 
    	
 
    	
$
    	
44,550.00
    	
 
    
	
Study Management
    	
 
    	
 
    	
 
    	
$
    	
75,000.00
    	
 
    
	
Site monitoring
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Per visit
    	
 
    	
$
    	
2,500.00
    	
 
    	
 
    	
 
    
	
Number of visits
    	
 
    	
15
    	
 
    	
$
    	
37,500.00
    	
 
    
	
Medical   monitoring
    	
 
    	
 
    	
 
    	
$
    	
25,000.00
    	
 
    
	
Safety   management
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Per month
    	
 
    	
$
    	
2,000.00
    	
 
    	
 
    	
 
    
	
Number of months
    	
 
    	
16
    	
 
    	
$
    	
32,000.00
    	
 
    
	
Contract &   budget negotiation
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Per site
    	
 
    	
$
    	
2,500.00
    	
 
    	
 
    	
 
    
	
N sites
    	
 
    	
4
    	
 
    	
$
    	
10,000.00
    	
 
    
	
DSMB
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Per meeting
    	
 
    	
$
    	
10,000.00
    	
 
    	
 
    	
 
    
	
N meetings
    	
 
    	
14
    	
 
    	
$
    	
140,000.00
    	
 
    
	
Data Management   System
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
EDC system   license
    	
 
    	
$
    	
17,810.00
    	
 
    	
 
    	
 
    
	
Inventory module
    	
 
    	
$
    	
3,810.00
    	
 
    	
 
    	
 
    
	
Randomization   module
    	
 
    	
$
    	
5,710.00
    	
 
    	
 
    	
 
    
	
Build
    	
 
    	
$
    	
22,000.00
    	
 
    	
 
    	
 
    
	
Total for study
    	
 
    	
 
    	
 
    	
$
    	
49,330.00
    	
 
    
	
Data Management   Resources
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
FTE
    	
 
    	
0.75
    	
 
    	
 
    	
 
    
	
Per month
    	
 
    	
$
    	
12,500.00
    	
 
    	
 
    	
 
    
	
Number of months
    	
 
    	
24
    	
 
    	
 
    	
 
    
	
Total for study
    	
 
    	
 
    	
 
    	
$
    	
225,000.00
    	
 
    
	
Statistics
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Protocol design   and randomization schedule
    	
 
    	
$
    	
5,000.00
    	
 
    	
 
    	
 
    
	
Statistical   Analysis Plan (SAP)
    	
 
    	
$
    	
7,500.00
    	
 
    	
 
    	
 
    
	
Analysis, table,   listings and figures
    	
 
    	
$
    	
50,000.00
    	
 
    	
 
    	
 
    
	
PK analysis
    	
 
    	
$
    	
7,500.00
    	
 
    	
 
    	
 
    
	
Contribution to   CSR
    	
 
    	
$
    	
5,000.00
    	
 
    	
 
    	
 
    
	
Total for study
    	
 
    	
 
    	
 
    	
$
    	
75,000.00
    	
 
    

 

 

 

July 29, 2016
 IITRI Proposal No.: 143-4-5716-018

 

Guy Lalonde, Ph.D.
 Director R&D
 ARIDIS Pharmaceuticals
 5941 Optical Court
 San Jose, CA  95138

 

Dear Guy:

 

IIT Research Institute (IITRI) is pleased to respond to your request for a proposal to conduct a series of inhalation toxicology studies in rats and dogs to support your project for an inhaled formulation of an anti-infective drug candidate.  The combined capabilities of IITRI and pathology subcontractor, Charles River Laboratories, Pathology Associates (CRL-PA) will provide ARIDIS Pharmaceuticals with the needed expertise to conduct these studies successfully in a timely manner.

 

Scope of Work.  The proposed program will have a series of preclinical studies of an anti-infective drug formulation.  The route of administration of the drug is via inhalation using a commercial nebulizer device.  The aim of the preclinical studies is to demonstrate safety of drug formulation at several fold higher than the clinical dose.  The tasks to be executed in the program are:

 

1)                                     Nebulizer performance and aerosol characterization (Task IA) and setup and validation of analytical method to determine gallium levels in rat and dog plasma (Task 1 B)

2)                                     Non-GLP single dose study in rats (Phase A)

3)                                     Non-GLP single dose, dose-escalation study in dogs (Phase A)

4)                                     Non-GLP 7-day, dose-range finding study in rats (Phase B)

5)                                     Non-GLP 7-day, dose-range finding study in dogs (Phase B)

6)                                     GLP 4-week rat inhalation toxicology study with two week recovery

7)                                     GLP 4-week dog inhalation toxicology study with two week recovery

8)                                     In-vivo micronucleus study in rats with i.v. administration of test material

9)                                     Ames assay

10)                              Chromosomal aberration assay in human lymphocytes

11)                              hERG assay

 

Supporting Documentation.  A more detailed outline for each of the above described study is provided in the Attachment.

 

Study Costs.  The GLP studies will be conducted in compliance with US FDA Good Laboratory Practice Regulations (21 CFR Part 58).  The total price of this testing program is $1,165,900.  An itemized costing follows:

 

 

	
Study Task
    	
 
    	
GLP
    	
 
    	
Cost($)
    
	
IA. Nebulizer Performance, Aerosol Characterization
    	
 
    	
No
    	
 
    	
27,500
    
	
IB. Validation of Analytical Method to Determine
    	
 
    	
No
    	
 
    	
 
    
	
Gallium Levels in Rat and Dog Plasma
    	
 
    	
 
    	
 
    	
14,590
    
	
2. Single Dose, Dose-Range Finding (Phase A)-Rats
    	
 
    	
No
    	
 
    	
35,730
    
	
3. Single Dose, Dose-Range Finding (Phase A)-Dogs
    	
 
    	
No
    	
 
    	
55,260
    
	
4. 7-day Dose-Range Finding (Phase B)-Rats
    	
 
    	
No
    	
 
    	
105,050
    
	
5. 7-day Dose-Range Finding (Phase B)-Dogs
    	
 
    	
No
    	
 
    	
132,030
    
	
6. 4-week Study in Rats with 2 week recovery
    	
 
    	
Yes
    	
 
    	
316,810
    
	
7. 4-week Study in Dogs with 2 week recovery
    	
 
    	
Yes
    	
 
    	
398,930
    
	
8. in-Vivo Micronucleus
    	
 
    	
Yes
    	
 
    	
35,390
    
	
9. Ames Assay
    	
 
    	
Yes
    	
 
    	
14,320
    
	
10. Chromosome Aberration Assay
    	
 
    	
Yes
    	
 
    	
22,520
    
	
11. hERG Assay
    	
 
    	
Yes
    	
 
    	
7,700
    
	
Total
    	
 
    	
 
    	
 
    	
1,165,900
    

 

This cost includes the submission of draft final reports (one per study task) to the Sponsor, a revised final report and the archiving of all appropriate data and specimens for one year.  The GLP-compliant phases of this study and its report will be audited and inspected by the IITRI Quality Assurance Unit.

 

Project Timeline.  Task 1 will be initiated within 3 weeks of contract authorization and receipt of test material.  Once we know the start date of the project a firm and detailed timeline will be provided.

 

The proposed payment schedule is:

 

For Tasks 1, 2, 3, 4, 5, 8, 9, 10, 11

 

40%           advance payment upon authorization to proceed with the task; IITRI will submit an invoice upon task authorization

40% upon study plan/ protocol approval

15% upon Completion of Laboratory/ in-life work

5% upon submission of the draft report.

 

For Tasks 6 and 7

 

30%           upon authorization to proceed with the task; IITRI will submit an invoice upon task authorization

20% upon protocol approval

20% upon one month after study start

25% upon completion of in-life

5% upon submission of the draft report.

 

IITRI would be pleased to perform the proposed study on a fixed price basis.  We are enclosing a copy of our Agreement for Research Services for your review.  Our proposal will be considered to be in effect for a period of ninety (90) days from the date of its submission.  To initiate the testing program, please sign the Agreement and return a copy.  The individual who will represent IITRI on any contractual negotiations which may be required is Mr. Michael McGibbon, Vice President and Director for Administration.  He can be contacted at 312-567-4170.  If you have technical questions regarding this proposal or need clarifications, please call me at 312-567-4285.

 

2

 

IIT Research Institute looks forward to working with ARIDIS Pharmaceuticals on this program.

 

 

Respectfully submitted,
  IIT Research Institute

 

Narayanan Rajendran, Ph.D.
 Vice President and Manager,
 Inhalation Toxicology Division

 

Approved:

 

Michael C. McGibbon
 Vice President and
 Director for Administration

 

cc:                                Inhalation Toxicology Files
 Michael McGibbon

 

This proposal includes data that shall not be disclosed outside the Client’s organization and shall not be duplicated, used, or disclosed - in whole or in part - for any purpose other than to evaluate this proposal.  If, however, a contract is awarded to this offeror as a result of - or in connection with - the submission of these data, the Client shall have the right to duplicate, use, or disclose the data to the extent provided in the resulting contract.  This restriction does not limit the Client’s right to use information contained in these data if it is obtained from another source without restriction.  The data subject to this restriction are contained in all sheets.

 

3

 

Attachment

 

Study Outlines

 

4

 

Task 1A: Nebulizer Selection and Aerosol Characterization

 

a.                                      Nebulizer performance and aerosol Characterization

 

Test atmospheres containing test material will be generated using a solution of the test material and an appropriate nebulizer.  Based on previous studies, AeroNeb solo from Aerogen will be used.  The main parameters for performance evaluation of the nebulizer are:

 

1)  aerosolization rate
 2)  Amount and stability of aerosol output

 

Appropriate target concentrations will be established by proper dilution.  Once IITRI receives specific information about the test material, we will design aerosol generation/dilution interfaces for use in inhalation exposure studies.

 

b.                                      Test Atmosphere Concentration Monitoring

 

Based on our understanding of the test material property, we propose the following: Test atmospheres containing the test material will be monitored continuously with a real time aerosol sensor.  Additionally, aerosol samples will be collected from an unused animal exposure port by appropriate particulate filters for gravimetric measurements.  Selected filters can be submitted for analysis to verify gravimetric measurement as well as to demonstrate test article integrity after nebulization.

 

c.                                       Aerosol Particle Size Measurement

 

Aerosol particle size distribution in the test atmosphere will be determined with a cascade impaction device.  The data will be used to calculate mass median aerodynamic diameter (MMAD) and geometric standard deviation (GSD).

 

Task 1B: Analytical Method Setup and Validation - Measurement of Gallium in Rat and Dog plasma

 

Setup and validate analytical method for concentration measurement in plasma samples from rats and dogs using ICP / MS

 

1)                                     Setup and validate an analytical method to support GLP studies

2)                                     Generate validation report.

 

5

 

Task 2: Dose-Range Finding Toxicology Study Phase A—Rats

 

	
Exposure
   Group
    	
 
    	
Maximum Daily
   Exposure Duration,
   (hours)
    	
 
    	
Number of Animals
    
	
 
    	
 
    	
 
    	
 
    	
M
    	
 
    	
F
    
	
Low
    	
 
    	
6
    	
 
    	
3
    	
 
    	
3
    
	
Mid
    	
 
    	
6
    	
 
    	
3
    	
 
    	
3
    
	
Hi
    	
 
    	
6
    	
 
    	
3
    	
 
    	
3
    

 

	
Toxicology
   Study Parameter
    	
 
    	
Comment
    
	
 
    	
 
    	
 
    
	
Regulatory
    	
 
    	
Non-GLP; Guide for Care and Use   of Laboratory Animals (1996)
    
	
 
    	
 
    	
 
    
	
Objective
    	
 
    	
To determine maximum tolerated dose (MTD) by single   exposure
    
	
 
    	
 
    	
 
    
	
Species
    	
 
    	
Sprague Dawley
    
	
 
    	
 
    	
 
    
	
Duration
    	
 
    	
Single Exposure as described in the table above and   observe for 3 days then discard.
    
	
 
    	
 
    	
 
    
	
Administration
    	
 
    	
By nose-only inhalation of test material at   concentration to be determined.
    
	
 
    	
 
    	
 
    
	
Housing
    	
 
    	
Single-housed
    
	
 
    	
 
    	
 
    
	
Mortality
    	
 
    	
2x daily; 1x daily on weekends and holidays
    
	
 
    	
 
    	
 
    
	
Clinical signs
    	
 
    	
2x daily
    
	
 
    	
 
    	
 
    
	
Body weights
    	
 
    	
Upon receipt, randomization on Study Day 1 and daily   till termination
    
	
 
    	
 
    	
 
    
	
Food Consumption
    	
 
    	
None Required
    
	
 
    	
 
    	
 
    
	
Respiratory Physiology
    	
 
    	
None Required
    
	
 
    	
 
    	
 
    
	
Necropsy
    	
 
    	
On Day 4; no tissue collection.
    

 

6

 

Task 3: Dose-Range Finding Toxicology Study Phase—A-Dogs

 

	
Exposure
   Group
    	
 
    	
Maximum Daily
   Exposure Duration,
   (hours)
    	
 
    	
Number of Animals
    
	
 
    	
 
    	
 
    	
 
    	
M
    	
 
    	
F
    
	
Low
    	
 
    	
1.5 /session
    	
 
    	
1
    	
 
    	
1
    
	
Mid
    	
 
    	
1.5 /session
    	
 
    	
 
    	
 
    	
 
    
	
Hi
    	
 
    	
1.5/session
    	
 
    	
 
    	
 
    	
 
    

 

	
Toxicology
   Study Parameter
    	
 
    	
Comment
    
	
 
    	
 
    	
 
    
	
Regulatory
    	
 
    	
Non-GLP; Guide for Care and Use   of Laboratory Animals (1996)
    
	
 
    	
 
    	
 
    
	
Objective
    	
 
    	
To determine maximum tolerated dose (MTD) by single   exposure
    
	
 
    	
 
    	
 
    
	
Species
    	
 
    	
Beagle Dog
    
	
 
    	
 
    	
 
    
	
Duration
    	
 
    	
Single Exposure as described in the table above and   observe for 4-days then use the same animals for the next round. Maximum   exposure duration of 1.5 hrs/ session; To meet dose criteria, if required, up   to two sessions per day possible.
    
	
 
    	
 
    	
 
    
	
Administration
    	
 
    	
By oronasal administration of test material at   concentration to be determined.
    
	
 
    	
 
    	
 
    
	
Housing
    	
 
    	
Single-housed
    
	
 
    	
 
    	
 
    
	
Mortality
    	
 
    	
2x daily; 1x daily on weekends and holidays
    
	
 
    	
 
    	
 
    
	
Clinical signs
    	
 
    	
2x daily
    
	
 
    	
 
    	
 
    
	
Body weights
    	
 
    	
Upon receipt, randomization on Study Day 1 and daily   till termination
    
	
 
    	
 
    	
 
    
	
Food Consumption
    	
 
    	
None Required
    
	
 
    	
 
    	
 
    
	
Necropsy
    	
 
    	
None; animals returned to stock colony.
    

 

7

 

Task 4: Dose-Range  Finding Toxicology Study Phase B—Rats

 

	
 
    	
 
    	
Maximum
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Daily
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Exposure
    	
 
    	
Number of
    	
 
    	
 
    
	
Exposure
    	
 
    	
Duration,
    	
 
    	
Animals,
    	
 
    	
Number of Animals in Subgroup a
    
	
Group
    	
 
    	
(hours)
    	
 
    	
Total
    	
 
    	
 

Core b
    	
 
    	
Recovery
    	
 
    	
Toxicokinetic c
    
	
 
    	
 
    	
 
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    
	
Vehicle Control
    	
 
    	
6
    	
 
    	
5
    	
 
    	
5
    	
 
    	
5
    	
 
    	
5
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    
	
Low
    	
 
    	
6
    	
 
    	
15
    	
 
    	
15
    	
 
    	
5
    	
 
    	
5
    	
 
    	
—
    	
 
    	
—
    	
 
    	
10
    	
 
    	
10
    
	
Mid
    	
 
    	
6
    	
 
    	
15
    	
 
    	
15
    	
 
    	
5
    	
 
    	
5
    	
 
    	
—
    	
 
    	
—
    	
 
    	
10
    	
 
    	
10
    
	
High
    	
 
    	
6
    	
 
    	
15
    	
 
    	
15
    	
 
    	
5
    	
 
    	
5
    	
 
    	
—
    	
 
    	
—
    	
 
    	
10
    	
 
    	
10
    
	
Total
    	
 
    	
 
    	
 
    	
50
    	
 
    	
50
    	
 
    	
20
    	
 
    	
20
    	
 
    	
 
    	
 
    	
 
    	
 
    	
30
    	
 
    	
30
    

 

a These rats will be subgroups of the total animals; b these rats will be necropsied one day after last exposure; c TK subgroup will have 3 subgroups of 3/s/g with one extra animal to serve as replacement, these rats will not be necropsied.

 

	
Toxicology
   Study Parameter
    	
 
    	
Comment
    
	
 
    	
 
    	
 
    
	
Regulatory
    	
 
    	
Non-GLP; Guide for Care and Use   of Laboratory Animals (1996)
    
	
 
    	
 
    	
 
    
	
Objective
    	
 
    	
To determine maximum tolerated dose (MTD)
    
	
 
    	
 
    	
 
    
	
Species
    	
 
    	
Sprague Dawley
    
	
 
    	
 
    	
 
    
	
Duration
    	
 
    	
7 consecutive days exposure, once daily.
    
	
 
    	
 
    	
 
    
	
Administration
    	
 
    	
By nose-only inhalation of test material at   concentration to be determined (TBD).
    
	
 
    	
 
    	
 
    
	
Housing
    	
 
    	
Single-housed
    
	
 
    	
 
    	
 
    
	
Mortality
    	
 
    	
2x daily; 1x daily on weekends and holidays
    
	
 
    	
 
    	
 
    
	
Clinical signs
    	
 
    	
2x daily
    
	
 
    	
 
    	
 
    
	
Body weights
    	
 
    	
Upon receipt, randomization on Study Day 1 and twice   weekly till termination
    
	
 
    	
 
    	
 
    
	
Food Consumption
    	
 
    	
consistent with body weights
    
	
 
    	
 
    	
 
    
	
Toxicokinetics
    	
 
    	
Blood will be drawn from the retro-orbital sinus   from TK rats (subgroups assigned to designated-time points). Each animal will   be bled no more than three times within 24 hours and to the maximum extent   possible, will have two hour period between consecutive bleeds. No necropsy   on TK animals; euthanize and 
    

 

8

 

	
 
    	
 
    	
discard after last sample collection. Samples taken   on Day 1 and last day of dosing at up to 8 time points (TBD).
    
	
 
    	
 
    	
 
    
	
TK Sample Analysis
    	
 
    	
Samples will be shipped to Sponsor for analysis.
    
	
 
    	
 
    	
 
    
	
Clinical Pathology
    	
 
    	
All core animals at termination.
    
	
 
    	
 
    	
 
    
	
Respiratory Physiology
    	
 
    	
None Required
    
	
 
    	
 
    	
 
    
	
Necropsy
    	
 
    	
On Day 8; standard tissue collection and preserved   for possible histopathology evaluation. Organ weights; bone marrow smears   collected, fixed and stored.
    

 

9

 

Task 5: Dose-Range  Finding Toxicology Study Phase B—Dogs

 

	
 
    	
 
    	
Maximum
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Daily
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Exposure
    	
 
    	
Number of
    	
 
    	
 
    
	
Exposure
    	
 
    	
Duration,
    	
 
    	
Animals,
    	
 
    	
Number of Animals in Subgroup a
    
	
Group
    	
 
    	
(hours)
    	
 
    	
Total
    	
 
    	
Core b
    	
 
    	
Recovery
    	
 
    	
Toxicokinetic c
    
	
 
    	
 
    	
 
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    
	
Vehicle Control
    	
 
    	
1.5 / session
    	
 
    	
2
    	
 
    	
2
    	
 
    	
2
    	
 
    	
2
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    	
 
    	
—
    
	
Low
    	
 
    	
1.5 / session
    	
 
    	
2
    	
 
    	
2
    	
 
    	
2
    	
 
    	
2
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    	
 
    
	
Mid
    	
 
    	
1.5 / session
    	
 
    	
0
    	
 
    	
0
    	
 
    	
0
    	
 
    	
0
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    	
 
    
	
High
    	
 
    	
1.5 / session
    	
 
    	
2
    	
 
    	
2
    	
 
    	
2
    	
 
    	
2
    	
 
    	
—
    	
 
    	
—
    	
 
    	
 
    	
 
    	
 
    
	
Total
    	
 
    	
 
    	
 
    	
6
    	
 
    	
6
    	
 
    	
6
    	
 
    	
6
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

a These dogs will be subgroups of the total animals; b these dogs will be necropsied one day after last exposure; c no additional animals; samples collected from core animals.

 

	
Toxicology
   Study Parameter
    	
 
    	
Comment
    
	
 
    	
 
    	
 
    
	
Regulatory
    	
 
    	
Non-GLP; Guide for Care and Use of Laboratory   Animals (1996)
    
	
 
    	
 
    	
 
    
	
Objective
    	
 
    	
To determine maximum tolerated dose (MTD)
    
	
 
    	
 
    	
 
    
	
Species
    	
 
    	
Beagle Dog
    
	
 
    	
 
    	
 
    
	
Duration
    	
 
    	
7 consecutive days exposure, once daily. Maximum   exposure duration of 1.5 hrs/ session; if dose criteria requires, up to two   sessions per day possible.
    
	
 
    	
 
    	
 
    
	
Administration
    	
 
    	
By oronasal administration of test material at   concentration to be determined.
    
	
 
    	
 
    	
 
    
	
Housing
    	
 
    	
Single-housed
    
	
 
    	
 
    	
 
    
	
Mortality
    	
 
    	
2x daily; 1x daily on weekends and holidays
    
	
 
    	
 
    	
 
    
	
Clinical signs
    	
 
    	
2x daily
    
	
 
    	
 
    	
 
    
	
Body weights
    	
 
    	
Upon receipt, randomization, on Study Day 1 and   twice weekly till termination consistent with body weights
    
	
 
    	
 
    	
 
    
	
Food Consumption
    	
 
    	
Blood will be drawn from the cephalic or jugular   vein from all dogs.
    

 

10

 

	
Toxicokinetics
    	
 
    	
Samples taken on Day 1 and last day of dosing at 8   time points (maximum) from test article groups and twice from control group.
    
	
 
    	
 
    	
 
    
	
Clinical Pathology
    	
 
    	
All animals prestudy and at termination.
    
	
 
    	
 
    	
 
    
	
TK Sample Analysis
    	
 
    	
Samples will be shipped to Sponsor for analysis.
    
	
 
    	
 
    	
 
    
	
Respiratory Physiology
    	
 
    	
None Required
    
	
 
    	
 
    	
 
    
	
Necropsy
    	
 
    	
On Day 8; standard tissue collection and preserved   for possible histopathology evaluation. Organ weights; bone marrow smears   collected, fixed and stored.
    

 

11

 

Task 6: 4-Week Repeat Dose Inhalation Study in Rats

 

	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
Number of Animals in subgroup a
    	
 
    
	
 
    	
 
    	
Exposure
    	
 
    	
Number of
    	
 
    	
Core Toxicology
    	
 
    
	
Exposure Group
    	
 
    	
Duration, hr
    	
 
    	
Animals Total
    	
 
    	
Main b
    	
 
    	
Recovery
    	
 
    	
TK
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    	
 
    
	
1 (Vehicle   Control)
    	
 
    	
TBD
    	
 
    	
19
    	
 
    	
19
    	
 
    	
10
    	
 
    	
10
    	
 
    	
5
    	
 
    	
5
    	
 
    	
4
    	
 
    	
4
    	
 
    
	
2 (Air Control)
    	
 
    	
 
    	
 
    	
14
    	
 
    	
14
    	
 
    	
10
    	
 
    	
10
    	
 
    	
0
    	
 
    	
0
    	
 
    	
4
    	
 
    	
4
    	
 
    
	
3 (Low)
    	
 
    	
TBD
    	
 
    	
20
    	
 
    	
20
    	
 
    	
10
    	
 
    	
10
    	
 
    	
0
    	
 
    	
0
    	
 
    	
10
    	
 
    	
10
    	
 
    
	
4 (Mid)
    	
 
    	
TBD
    	
 
    	
20
    	
 
    	
20
    	
 
    	
10
    	
 
    	
10
    	
 
    	
0
    	
 
    	
0
    	
 
    	
10
    	
 
    	
10
    	
 
    
	
5 (High)
    	
 
    	
TBD
    	
 
    	
25
    	
 
    	
25
    	
 
    	
10
    	
 
    	
10
    	
 
    	
5
    	
 
    	
5
    	
 
    	
10
    	
 
    	
10
    	
 
    
	
Total
    	
 
    	
 
    	
 
    	
98
    	
 
    	
98
    	
 
    	
50
    	
 
    	
50
    	
 
    	
10
    	
 
    	
10
    	
 
    	
38
    	
 
    	
38
    	
 
    

 

a These rats will be subgroups of the total animals; b these rats will be necrops1ed one day after last exposure; c TK subgroup in dosed exposure groups will have 3 subgroups of 3/s/g with one extra animal to serve as replacement and in control groups 1 subgroup of 3/s/g with one extra animal, TK rats will not be necropsied.

 

	
Toxicology Study Parameter
    	
 
    	
Comment
    
	
 
    	
 
    	
 
    
	
Regulatory
    	
 
    	
Good Laboratory Practice Regulations, 21CFR58; and Guide for Care and Use of Laboratory Animals (1996)
    
	
 
    	
 
    	
 
    
	
Species
    	
 
    	
Sprague Dawley
    
	
 
    	
 
    	
 
    
	
Duration
    	
 
    	
28 consecutive days exposure, once daily.
    
	
 
    	
 
    	
 
    
	
Administration
    	
 
    	
By nose-only inhalation of test material at   concentration to be determined.
    
	
 
    	
 
    	
 
    
	
Recovery
    	
 
    	
Recovery groups maintained for 2 weeks post   exposure.
    
	
 
    	
 
    	
 
    
	
Housing
    	
 
    	
Single-housed
    
	
 
    	
 
    	
 
    
	
Mortality
    	
 
    	
2x daily
    
	
 
    	
 
    	
 
    
	
Clinical signs
    	
 
    	
At least once daily till necropsy as appropriate
    
	
 
    	
 
    	
 
    
	
Body weights
    	
 
    	
Upon receipt, for randomization prior to day 1, then   weekly. Fasted weight on Day 29.
    
	
 
    	
 
    	
 
    
	
Food Consumption
    	
 
    	
Consistent with body weight determination
    
	
 
    	
 
    	
 
    
	
Toxicokinetics
    	
 
    	
Blood will be drawn from the retro-orbital sinus   from TK rats (3/s/g/timepoint).
    

 

12

 

	
 
    	
 
    	
Samples taken on Days 1 (first dose) and 28 (last   dose) at up to 8 time points. Each animal will be bled no more than three   times within 24 hours and to the maximum extent possible, will have two hour   period between consecutive bleeds. No necropsy on TK animals; euthanize and   discard after last sample collection.
    
	
 
    	
 
    	
 
    
	
TK Sample Analysis
    	
 
    	
Samples will be shipped to Sponsor for analysis.
    
	
 
    	
 
    	
 
    
	
Respiratory Function
    	
 
    	
Minute volumes will be determined pretreatment and   on weeks 1, 4 and 6 (recovery animals) for 4 animals/sex/dosed groups at pre   dose, as soon as possible post exposure and approximately 2 hours post   exposure if the post exposure measurement shows an effect.
    
	
 
    	
 
    	
 
    
	
Clinical Pathology
    	
 
    	
Hematology, coagulation and blood chemistry on all   animals at termination (terminal and recovery necropsy).
    
	
 
    	
 
    	
 
    
	
Urinalysis
    	
 
    	
Consistent with clinical pathology
    
	
 
    	
 
    	
 
    
	
Ophthalmology
    	
 
    	
pretreatment, prior to terminal sacrifice and at   recovery necropsy if effects are seen at terminal necropsy
    
	
 
    	
 
    	
 
    
	
Necropsy
    	
 
    	
Necropsy on Day 29 (terminal) and 43 (recovery);   terminal necropsy over two days and one day for recovery groups. Collect all   tissues (standard FDA tissue list).
    
	
 
    	
 
    	
 
    
	
Histopathology
    	
 
    	
Full tissue list evaluation for control group and   High dose group animals in Main study. Lungs, trachea and larynx for all the   remaining terminal necropsy animals. Read down for low dose groups and   recovery animals at additional cost. Bone marrow smears collected, fixed and   stored.
    
	
 
    	
 
    	
 
    
	
Organ weights
    	
 
    	
Absolute and relative-to-body weight: lung, liver,   heart, kidney, brain, ovaries or testes and spleen for all animals.
    

 

13

 

Task 7: 4-Week Inhalation Toxicity Study in Dogs

 

	
 
    	
 
    	
Exposure
    	
 
    	
Number of
    	
 
    	
Number of Animals in
    	
 
    
	
 
    	
 
    	
Duration,
    	
 
    	
Animals
    	
 
    	
subgroup a
    	
 
    
	
Exposure Group
    	
 
    	
hr
    	
 
    	
Total
    	
 
    	
Toxicity b
    	
 
    	
 Recovery c
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    	
 
    	
M
    	
 
    	
F
    	
 
    
	
1 (Vehicle   Control)
    	
 
    	
TBD
    	
 
    	
6
    	
 
    	
6
    	
 
    	
4
    	
 
    	
4
    	
 
    	
2
    	
 
    	
2
    	
 
    
	
2 (Air Control)
    	
 
    	
TBD
    	
 
    	
4
    	
 
    	
4
    	
 
    	
4
    	
 
    	
4
    	
 
    	
0
    	
 
    	
0
    	
 
    
	
3 (Low)
    	
 
    	
TBD
    	
 
    	
4
    	
 
    	
4
    	
 
    	
4
    	
 
    	
4
    	
 
    	
0
    	
 
    	
0
    	
 
    
	
4 (Mid)
    	
 
    	
TBD
    	
 
    	
4
    	
 
    	
4
    	
 
    	
4
    	
 
    	
4
    	
 
    	
0
    	
 
    	
0
    	
 
    
	
5 (High)
    	
 
    	
TBD
    	
 
    	
6
    	
 
    	
6
    	
 
    	
4
    	
 
    	
4
    	
 
    	
2
    	
 
    	
2
    	
 
    
	
Total
    	
 
    	
 
    	
 
    	
98
    	
 
    	
98
    	
 
    	
50
    	
 
    	
50
    	
 
    	
10
    	
 
    	
10
    	
 
    

 

a These dogs will be subgroups of the total animals; b these dogs will be necrops1ed one day after last exposure; c these dogs will be necropsied after two weeks of recovery period

 

	
Toxicology
   Study Parameter
    	
 
    	
Comment
    
	
 
    	
 
    	
 
    
	
Regulatory
    	
 
    	
Good Laboratory Practice Regulations, 21CFR58; and Guide for Care and Use of Laboratory Animals (1996)
    
	
 
    	
 
    	
 
    
	
Species
    	
 
    	
Beagle Dog
    
	
 
    	
 
    	
 
    
	
Duration
    	
 
    	
7days/week for at least 4 weeks exposure, once daily   (maximum exposure duration of 90 minutes/day). Recovery groups maintained for   2 weeks without exposure to test material.
    
	
 
    	
 
    	
 
    
	
Administration
    	
 
    	
By oronasal administration of test material at   concentration to be determined.
    
	
 
    	
 
    	
 
    
	
Recovery
    	
 
    	
Recovery groups maintained for 2 weeks post   exposure.
    
	
 
    	
 
    	
 
    
	
Housing
    	
 
    	
Single-housed
    
	
 
    	
 
    	
 
    
	
Mortality
    	
 
    	
2x daily
    
	
 
    	
 
    	
 
    
	
Clinical signs
    	
 
    	
At least twice daily till necropsy as appropriate
    
	
 
    	
 
    	
 
    
	
Body weights
    	
 
    	
Upon receipt, three days prior to day 1, then twice   weekly. Fasted weight on the necropsy day.
    
	
 
    	
 
    	
 
    
	
Food Consumption
    	
 
    	
Consistent with body weight determination
    
	
 
    	
 
    	
 
    
	
Body Temperature
    	
 
    	
None
    

 

14

 

	
Toxicokinetics
    	
 
    	
None included
    
	
 
    	
 
    	
 
    
	
TK Sample Analysis
    	
 
    	
Samples will be shipped to Sponsor for analysis.
    
	
 
    	
 
    	
 
    
	
Pulmonary Function
    	
 
    	
Minute volumes will be determined during prestudy, weeks   1 and 4 for 4 animals/sex/group at pre dose, as soon as possible post   exposure and approximately 2 hours post exposure if the post exposure   measurement shows an effect.
    
	
 
    	
 
    	
 
    
	
ECG
    	
 
    	
Obtained for all animals twice during pretest and   during weeks 4 and 6, the last week of exposure and recovery.
    
	
 
    	
 
    	
 
    
	
Clinical Pathology
    	
 
    	
Hematology, coagulation, blood chemistry at pretest,   on all animals at termination (terminal and recovery necropsy).
    
	
 
    	
 
    	
 
    
	
Urinalysis
    	
 
    	
Consistent with clinical pathology
    
	
 
    	
 
    	
 
    
	
Ophthalmology
    	
 
    	
pretreatment, prior to terminal sacrifice and at   recovery necropsy if effects are seen at terminal necropsy
    
	
 
    	
 
    	
 
    
	
Necropsy
    	
 
    	
Necropsy over three days; two for terminal and one   for recovery groups. Collect all tissues (standard FDA tissue list).
    

 

15

 

Task 8: In-Vivo Micronucleus Assay in Rats

 

The in vivo micronucleus assay is used for the detection of chromosome damage or mitotic apparatus dysfunction in the bone marrow of animals, usually rodents.  The assay is used to identify substances that cause cytogenetic damage resulting in the formation of micronuclei.  Micronuclei are chromosome fragments or entire chromosomes that lag behind at the anaphase stage of mitosis.  During erythroblast progression into red blood cells in the bone marrow the main nucleus is extruded at a defined stage of development.  Micronuclei, formed prior to nuclear extrusion, persist in the cytoplasm of the immature red blood cell, or polychromatic erythrocyte, and are visible as small chromatin containing bodies.  An increase in the frequency of micronucleated polychromatic erythrocytes serves as an indicator of induced chromosome damage.

 

The experimental design of a routine micronucleus assay in rats is shown in the following Table:

 

	
 
    	
 
    	
 
    	
 
    	
Number Of Rats (Males
   per Group)
    	
 
    
	
Group
    	
 
    	
Test Material
    	
 
    	
24 Hour
    	
 
    	
48 Hour
    	
 
    
	
1
    	
 
    	
Vehicle Control
    	
 
    	
6
    	
 
    	
6
    	
 
    
	
2
    	
 
    	
Positive Control
    	
 
    	
6
    	
 
    	
—
    	
 
    
	
3
    	
 
    	
Test Material - Dose 1 (low)
    	
 
    	
6
    	
 
    	
—
    	
 
    
	
4
    	
 
    	
Test Material - Dose 2 (mid)
    	
 
    	
6
    	
 
    	
—
    	
 
    
	
5
    	
 
    	
Test Material - Dose 3 (high)
    	
 
    	
6
    	
 
    	
6
    	
 
    

 

Test material will be administered intravenously.  A pilot study with three groups of 3 animals will be conducted to determine maximum tolerated dose.  Twenty four hours after dosing the animals are euthanized and bone marrow is flushed from the tibia/fibula into labeled centrifuged tubes from each animal in groups 1-5.  The cells are centrifuged and re-suspended in calf serum.  Bone marrow cells are smeared onto labeled glass slides, fixed, air dried and stained with Acridine Orange.  The slides are coded an at least 2000 polychromatic erythrocytes (PCEs) will be screened for the presence of micronuclei (MN) using a fluorescent microscope.  In addition, to determine whether the test substance is toxic to bone marrow cells, at least 1000 erythrocytes will be examined to determine the proportion of PCE relative to total erythrocytes.  Forty-eight hours after dosing, the remaining animals (from Groups 1 and 5) are euthanized; bone marrow cells are obtained, processed and analyzed just like the cells sampled at twenty four hours.  After all of the slides have been analyzed the frequency of MN-PCE for each for each test group will be analyzed with an analysis of variance and, if necessary, by pair wise comparison of treated versus control group by Dunnet’s test.

 

16

 

Task 9: Ames Assay

 

The Ames test or Salmonella reverse mutation assay assesses the impact of chemicals or their metabolites on prokaryotic DNA.  Each test will include an initial assay followed by a confirmatory assay.  The test article will be tested in five bacterial strains, four Salmonella typhimurium strains (TA98, TA100, TA1535 and TA1537) and one E.coli strain (WP2 uvrA).  The S. typhimurium tester strains detect histidine (his) reversion (his “7 his+) at G-C sites and have an rfa (deep rough) mutation that eliminates a polysaccharide side chain of the lipopolysaccharide layer coating the bacterial surface, thereby increasing permeability to larger molecules.  The four S. typhimurium strains also have a deletion of a gene coding for the DNA excision repair system (uvrB), which increases the sensitivity of the bacteria to mutagens.  E. coli strain WP2 uvrA detects tryptophan (trp) reversion (trp· “7 trp+) at A-T sites and also has a deletion of a gene coding for the DNA excision repair system (uvrA), also increasing the sensitivity of the bacteria to mutagens.  At least 5 concentrations of test article will be tested in triplicate cultures in the presence and absence of S9 metabolic activation using the plate incorporation method.  Strain appropriate and ±S9 appropriate positive control cultures will also be included in the assay.  Forty eight to seventy two hours after test article treatment initiation the revertant colonies on the plates will be counted and the mean response of each dose level tested for each strain will be analyzed by comparing the counts of the test article treated plates with the vehicle control counts of the vehicle control.  Each strain and each metabolic activation test system (±S9) will be analyzed separately.

 

17

 

Task 10: Chromosome Aberration Assay

 

Chromosome aberrations are a consequence of failure or error in repair mechanisms such that breaks either do not rejoin or rejoin inappropriately after treatment with test articles.  The chromosome aberration test in human lymphocytes is a standard in vitro assay for detecting structural damage to chromosomes or the mitotic apparatus using light microscopy.  Structural chromosome damage detected in this way is observed as chromosome breaks or rearrangements.  Numerical changes such as polyploidy may also indicate damage to the mitotic spindle apparatus.  Human peripheral blood lymphocytes (HPBL) will be used as the test system will be obtained from healthy donors.  Lymphocytes in peripheral blood are stimulated to divide in culture by treatment with phytohemagglutinin (PHA) for 48 hours.

 

Target concentrations for testing will be determined for the test article using OECD guideline limits, cytotoxicity, or solubility data.  Testing will be conducted in the presence and absence of S9 metabolic activation.  Exposure to the test article will be 3 hours and 24 hours in the absence of S9 metabolic activation and 3 hours in the presence of S9.  Cytotoxicity will be assessed using mitotic activity reduction of the treated cell cultures relative to the vehicle controls.

 

Appropriate positive controls for the S9 activated system and the non-activated system will be included.

 

Forty-eight hours following PHA addition, the culture medium will be replaced with fresh serum-free medium for the three-hour exposures or fresh complete medium for the 24-hour exposure.  The vehicle, the test article, or the positive control will be added to the appropriate culture and then incubated for three hours or 24 hours.  After the three-hour exposures, cultures will be rinsed and re-fed with fresh culture medium containing PHA.  Colcemid® will be added to all cultures for the final 2 ± 0.5 hours of incubation after which time the cells will be collected and prepared for analysis.

 

At least 1000 cells per slide will be counted to establish a mitotic index.  After the mitotic index has been determined for each culture, dose levels will be selected for chromosome analysis.  Doses selected for analysis will be the highest dose level tested where approximately a 50% reduction in the frequency of metaphase cells is observed relative to the vehicle controls.

 

The percentage of cells with structural aberrations will be the basis for evaluation.  Statistical analysis will consist of a one-way analysis of variance (ANOVA) to compare the percentage of cells with structural chromosome aberrations in the test article treated groups to the vehicle control groups.

 

18

 

Task 11: hERG Assay

 

Study Details: Cells expressing the hERG channel are dosed with test agent at 6 concentrations in duplicate for 5 minutes.  Membrane currents are measured using an automated patch clamp system.  Readout: IC50 and% inhibition at each test concentration.  Negative and positive controls will be included in the study.

 

19

 

 

AGREEMENT FOR RESEARCH SERVICES

 

This Agreement for Research Services (hereinafter referred to as “Agreement”) is made this  day of         2016 between IIT Research Institute (IITRI), an Illinois not-for-profit corporation, (hereinafter referred to as “IITRI”), having its corporate offices at 10 West 35th Street, Chicago, IL 60616, and ARIDIS Pharmaceuticals, Inc., (hereinafter referred to as “Client”) having offices or principal place of business at 5941 Optical Court, San Jose, CA 95138, (IITRI and Client hereinafter referred to collectively as the “Parties”).

 

ARTICLE I.       SCOPE OF WORK

 

IITRI hereby agrees to provide the services as set forth and defined in its Proposal to Client identified as Proposal Number 143-4-5716-018 entitled, “conduct a series of inhalation toxicology studies in rats and dogs to support your project for an inhaled formulation of an anti-infective drug candidate” dated July 29, 2016, which Proposal is incorporated herein by reference (hereinafter referred to as the “Proposal”).

 

ARTICLE II.       VALIDITY, ACCEPTANCE, TERM, AND TERMINATION

 

IITRI’s Proposal shall remain valid for a period of sixty (60) days from the Proposal’s submission date unless such validity period is extended, in writing, by IITRI.  Acceptance of this Proposal by the Client shall be evidenced by the Client’s execution of this Agreement.  In the event this Agreement is not executed by Client during the validity period, or any extension thereof, IITRI, in its sole discretion may modify the Proposal or withdraw it from further consideration.

 

This Agreement shall become effective upon its mutual execution by the Parties and shall terminate when IITRI has completed performance of its services as set forth in the Proposal.

 

IITRI may terminate this Agreement if Client fails to pay to IITRI any monetary obligation when due and such failure is not cured within ten (10) days after written notice to Client from IITRI.  Either IITRI or Client may terminate this Agreement upon a default of this Agreement.  The occurrence of any of the following shall constitute a default (“Default”) hereunder: (i) IITRI or Client fails to perform any provision of this Agreement and such failure is not cured within thirty (30) days after written notice from the non-defaulting Party, or (ii) any voluntary or involuntary proceedings are filed by or against IITRI or Client under bankruptcy, insolvency, or similar laws and, in case of any involuntary proceedings, are not dismissed within thirty (30) days after filing.  Upon termination for Default, IITRI shall be paid for all completed work, work in progress, and commitments incurred, up to and including the date of termination including anticipated profit for the services performed and Client shall be furnished all reports concerning services completed or in progress through and including the date of termination.

 

Client shall have the right to terminate this Agreement for its convenience at any time by giving IITRI not less than ten (10) days advanced written notice thereof.  In the event of termination by Client of this Agreement for any reason other than for default as set forth above, IITRI shall promptly cease working, except to the extent needed to safely finish any work in progress.  In the event of such termination, IITRI shall be paid for all completed work, work in progress, and commitments incurred, up to and including the date of termination including anticipated profit for the

 

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services performed, and shall be paid at its normal rates for reasonable termination costs, which include the time expended in properly and safely terminating its services, closing its files, and in completing work as necessary for the orderly closing of the project.  IITRI agrees, at the written request of Client, to generate a final report on the technical services performed to the date of termination, and all cost associated with the development of such report shall be included in the termination costs.

 

Either Party may immediately terminate this Agreement upon written notice to the other Party if conditions or hazards are encountered that differ materially from expected conditions and hazards and that make performance of the services impracticable.  Any such termination shall not be deemed a breach or default by the terminating Party and shall not give rise to any action for damages or other cause of action against the terminating Party, and the Parties agree to wind down this contract in accordance with the obligation that each owes to the other in the event of a termination for Default.

 

ARTICLE Ill.       RESEARCH RESULTS

 

The results of the services performed under this Agreement will be transmitted to the Client in writing as provided for in the Proposal.  The results of the research services performed hereunder will be kept in confidence by IITRI and will not knowingly be communicated to others without the Client’s express written consent.  IITRI MAKES NO REPRESENTATION, WARRANTY, OR GUARANTEE THAT THE RESULTS OF THE RESEARCH PERFORMED UNDER THIS AGREEMENT WILL CONFIRM ANY GIVEN HYPOTHESIS, MEET CLIENT’S EXPECTATIONS, OR PROVE USEFUL IN ANY WAY.

 

ARTICLE IV.       PAYMENT AND PRICING

 

Client agrees to pay IITRI for the services as set forth in the Proposal, a Fixed Price sum of [***].  The specific payment schedule for this Agreement is set forth in the Proposal.

 

Payment terms for this Agreement are net thirty (30) days with invoices considered past due after thirty (30) days from the date of the invoice.  Client agrees to pay a finance charge on past due accounts of one and one-half percent (l-1/2%) per month, or, if lower, the maximum permitted by law.  Should Client not pay IITRI for services rendered under this agreement within ninety (90) days of the invoice date, Client agrees to reimburse IITRI for all reasonable legal expenses, including attorney’s fees, incurred by IITRI in collecting those monies due under this agreement.

 

ARTICLE V.       CONFIDENTIAL INFORMATION

 

A.                                    Confidential information (“Confidential Information”) shall include (i) any proprietary information that is disclosed in a tangible format and marked or labeled as confidential, and (ii) any proprietary information that is disclosed orally, visually or in an intangible format that is identified at the time of disclosure as Confidential Information and which is subsequently confirmed, within ten (10) days after its disclosure, in writing to be such.  Confidential Information shall exclude:

 

1.                                      Information that is or which becomes publicly known through no fault of the receiving Party;

 

2.                                      Information known to the receiving Party prior to receipt from the disclosing Party, as evidenced by the receiving Party’ s written records;

 

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3.                                      Information that is disclosed to the receiving Party in good faith by a third party who has an independent right to such subject matter and information;

 

4.                                      Information that is independently developed by the receiving Party, as evidenced by the receiving Party’s written records;

 

5.                                      Information disclosed to the U.S. Government or others by the disclosing Party with “unlimited rights” or without restrictions by the disclosing Party; or

 

6.                                      Information approved for disclosure by the prior written consent of the disclosing Party.

 

A Party may disclose Confidential Information pursuant to subpoena, judicial action or national, state or local governmental regulations or requirements , provided that the Party so disclosing notifies the other Party of the need for such disclosure within a reasonable time given the circumstances so that such other Party, at its sole cost and expense, may, as it deems appropriate, seek to challenge the required disclosure or seek a protective order.

 

B.                                    A Party receiving Confidential Information hereunder shall protect the Confidential Information using the same safeguards that it employs to protect its own confidential information, but in no event shall such safeguards demonstrate less than a reasonable degree of care.  A Party receiving Confidential Information hereunder shall only use the same for the purpose of performing its obligations under this Contract, and in connection therewith, a Party shall not disclose Confidential Information to persons other than its employees who have been determined to have a need to know, have been made aware of the obligations set forth herein, and is obligated to adhere to those obligations.  Upon termination of this Agreement, the Parties shall surrender any Confidential Information transmitted to them by the other or certify that such information has been destroyed, except that one copy may be retained for archival purposes only.  The Parties’ obligations of confidentiality set forth herein shall survive for a period of five (5) years from the termination of this Contract.

 

C.                                    A Party receiving Confidential Information agrees that it shall remain, at all times, the property of the disclosing Party.  The Parties agree and acknowledge that the disclosing Party, by conveying Confidential Information to the receiving Party, (i) is not granting and does not grant, by implication or otherwise, the receiving Party a license of any kind under any patent, patent application, copyright, trade secret or the like, and (ii) is not making and does not make, by implication or otherwise, any representation, warranty, assurance, or guarantee of inducement to the receiving Party with respect to the infringement of patents or to the rights of others.

 

Exchange of Proprietary and/or Confidential Information by and between the Parties is contemplated throughout the term of this Agreement.  All provisions herein relating to holding in confidence all Proprietary and/or Confidential Information received from the other Party will remain in full force and effect for the period specified in this Article V.

 

ARTICLE VI.       NOTICES

 

Any notice given under this Agreement shall be in writing, shall reference this Agreement, and shall be deemed given when: (a) delivered personally; (b) sent by confirmed telex or facsimile; (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid; or (d) one (1) day after deposit with a commercial overnight carrier, with written verification of receipt.  Notwithstanding the foregoing, any notice given pursuant to Article II must be given by (c)

 

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or (d).  All communications will be sent to the addresses and persons set forth below or to such other address and persons as may be designated by a Party upon written notice to the other Party pursuant to this Article VI:

 

	
If to IITRI:
    	
 
    	
If to the Client:
    
	
 
    	
 
    	
 
    
	
IIT Research Institute
    	
 
    	
ARIDIS Pharmaceuticals, Inc.
    
	
10 West 35th Street
    	
 
    	
5941 Optical Court
    
	
Chicago, IL 60616-3799
    	
 
    	
San Jose, CA 95138
    
	
Attn.: Michael C. McGibbon
    	
 
    	
Attn.:
    
	
Vice-President and Director for Administration
    	
 
    	
Telephone:
    
	
Telephone: 312-567-4170
    	
 
    	
Facsimile:
    
	
Facsimile: 312-567-4106
    	
 
    	
E-mail:
    
	
E-mail: mmcgibbon@iitri.org
    	
 
    	
 
    

 

ARTICLE VII.       RIGHTS IN DATA

 

All reports, logs, field data, field notes, laboratory test data, calculations, estimates, and other technical documents prepared or generated by IITRI in providing research services or conducting studies under this Agreement for the Client (hereinafter collectively referred to as “Technical Data”) shall become the property of the Client and shall be delivered to the Client by IITRI upon completion of the Project, provided that Client grants IITRI a non-exclusive, royalty-free, world-wide license to use such Technical Data for non-commercial educational and research purposes.

 

IITRI will retain, without charge to the Client, all pertinent records relating to the research services performed or studies conducted hereunder for a period of one (I) year following submission of a final report to the Client.  During the one (1) year retention period, the records will be made available to Client at all reasonable times upon reasonable notice to IITRI.  Unless Client requests, in writing, that IITRI continue to retain such documents beyond said one (1) year period and agrees to reimburse IITRI for the costs and expense associated with such additional retention at a fee to be established at the time of such request, IITRI reserves the right, without further notice to the Client, to destroy or otherwise dispose of all retained data.

 

ARTICLE VIII.       PATENT RIGHTS

 

IITRI represents that it has a policy that requires assignment to IITRI of all inventions made by an employee during the course of the employee’s employment.

 

IITRI agrees that if, during the period of this Agreement, any of its employees conceive an invention in the course of working on any research service or studies authorized under this Agreement, IITRI shall promptly make such invention known to Client and, upon the request of Client, shall assign to Client any and all rights to said invention pursuant to the terms and conditions of this Agreement except that Client grants IITRI a non-exclusive, royalty-free, world-wide license to use such inventions for non-commercial educational and research purposes.  Thereafter, IITRI, upon request, shall provide reasonable assistance to Client’s patent attorney or agent in connection with the prosecution of any patent applications, provided that the Parties specifically agree that any expenses incurred by IITRI, such as charges for staff costs, travel, and other expenses incurred in connection

 

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with any assistance requested by Client, Client’s patent attorney or agent in the preparation and prosecution of patent applications, shall be reimbursed to IITRI by Client and that such reimbursement shall be in addition to, and shall not be considered a part of, the principal sum payable under this Agreement for research services or studies.

 

Notwithstanding the foregoing, all pre-existing inventions, patents, copyrights, know-how, trade secret, and such similar property of IITRI shall remain IITRI’s, and IITRI does not intend and does not hereby grant Client any interest in any such pre-existing invention, patent, copyright, know-how , trade secret, or similar property.

 

ARTICLE IX.       PUBLICATION

 

IITRI is a tax-exempt organization under Section 501(c)(3) of the Internal Revenue Code, and in accordance with the provisions of said Section 50l(c)(3) and applicable regulations and rulings thereunder, IITRI must serve public rather than private purposes.  Accordingly, IITRI reserves the right, at its discretion as to time and method, but consistent with the following terms, to timely publish or otherwise make publicly available its research:

 

A.                                    IITRI shall submit a complete copy of the proposed manuscript for publication or presentation materials or other public disclosure (collectively, “Materials”) to the Client at least sixty (60) days prior to any submission for publication or public disclosure.

 

B.                                    If Client determines that the Materials contain Proprietary and/or Confidential Information or patentable information, Client shall notify IITRI in writing within thirty (30) days of receipt of the Materials.  The written notification shall identify the Proprietary and/or Confidential Information or patentable information and may include suggestions designed solely to protect such information from disclosure.  If Client fails to respond within said thirty (30)-day period, IITRI may proceed with publication or public disclosure.

 

C.                                    In the event that Client makes any such suggestions, the parties shall use reasonable efforts to negotiate a mutually acceptable revision within fifteen (15) days after IITRI’s receipt of Client’ s notification.  If IITRI and Client have reasonably concluded that revision is not possible because any revision would still have the effect of prejudicing Client’ s ability to obtain a patent or similar instrument and IITRI reasonably concludes that publication is not possible without such information, IITRI can agree to delay publication but only for such period of time as is reasonably necessary for Client to establish its patent or other ownership rights therein.

 

Subject to the Client’ s consent, IITRI agrees to properly credit the contributions of the Client in any resulting publication.

 

ARTICLE X.       STANDARD OF CARE

 

IITRI shall render all services under this Agreement in a manner consistent with that level of care and skill ordinarily exercised by professionals currently practicing under similar conditions in the area where its services are performed.  IITRI MAKES NO REPRESENTATION, WARRANTY, OR GUARANTEE, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED AT LAW WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE, AS TO ITS FINDINGS, RECOMMENDATIONS, PLANS,

 

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SPECIFICATIONS, DRAWINGS, PROFESSIONAL JUDGMENT, ADVICE, OR ANY OTHER SERVICES FURNISHED BY IITRI TO CLIENT EXCEPT AS PROVIDED IN THE IMMEDIATELY PRECEDING SENTENCE.

 

Client acknowledges that no representation, guarantee, or warranty has been made or given by IITRI to Client regarding IITRI’s services under this Agreement or the results of such services except as set forth in this Article X.  Client’s exclusive remedy against IITRI for any wrongful act or omission of IITRI shall be an action for breach of this limited warranty, and IITRI’s aggregate liability to Client for all breaches of IITRI’s limited warranty shall be limited to the lesser of $100,000 or the amount paid by Client to IITRI under this Agreement.  Client understands and agrees that its agreement to so limit IITRI’s liability was a material inducement to IITRI to provide services to Client under this Agreement at the rates stated in IITRI’s Proposals and that if IITRI’s liability were not so limited , then IITRI either would not have entered into this Agreement or would charge substantially higher rates for services authorized under this Agreement.

 

Any claim made against IITRI for breach of its limited warranty must be made in writing and received by IITRI no more than one (1) year after IITRI has completed performance of services authorized under this Agreement.  If a claim is not received by IITRI within said one (1)-year period, then all such claims shall be deemed waived regardless of whether Client knew of or could have discovered the existence of the basis for such claim within that one (1)-year period.

 

ARTICLE XI.       INDEMNIFICATION

 

IITRI agrees to indemnify and hold Client, its directors, officers, employees, and agents harmless against any claims, arising from injury to or death of any third party or property damage that results from IITRI’s negligence or willful misconduct.  Client agrees to indemnify and hold IITRI, its Board of Governors, officers, employees, and agents harmless against any claims, arising from injury to or death of any third party or property damage that results from Client’ s negligence or willful misconduct.  Neither Party shall be obligated to indemnify the other except for claims, arising from the negligence or willful misconduct of the indemnifying Party.

 

IN NO EVENT SHALL EITHER IITRI OR CLIENT BE LIABLE TO ONE ANOTHER FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE, EXEMPLARY, OR ECONOMIC DAMAGES, INCLUDING LOSS OF BUSINESS OPPORTUNITY, WHATSOEVER, REGARDLESS OF THE LEGAL THEORY UNDER WHICH SUCH DAMAGES ARE INCURRED.

 

ARTICLE XII.       USE OF NAME

 

The name IIT Research Institute, IITRI, or any facsimile thereof shall not be used by Client for purposes of advertising, sales, promotion, or publicity in connection with services performed under this Agreement without IITRI’ s prior written consent.

 

ARTICLE XIII.        FORCE MAJEURE

 

IITRI shall have no liability for any failure to perform or delay in performance due to any circumstances beyond its reasonable control, including, but not limited to, strikes, riots, wars, fires, floods, explosions, acts of nature, acts of government, labor disputes, delays in transportation, or inability to obtain material or equipment.  In the event of any delay in performance due to any such

 

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circumstances, the time for performance of services authorized under this Agreement will be extended by a period of time necessary to overcome the effect of such delay, and Client will not be entitled to refuse performance or otherwise be relieved of any of its obligations under this Agreement.

 

ARTICLE XIV.        COVENANT AGAINST HIRING

 

During the term of this Agreement, including any extension or renewal thereof, and for a period of one (1) year thereafter, neither Party will knowingly solicit for hire any officer or technical or professional employee of the other assigned to render services under this Agreement without the prior written consent of the other Party.

 

Notwithstanding the foregoing, this covenant shall not apply in the event this Agreement is terminated by either Party for Default in accordance with the termination provision for Default contained in Article IV of this Agreement.  In addition , this clause is not intended to restrict employees of either Party from responding to employment advertisements and voluntarily applying for available employment in either Party’s company.

 

ARTICLE XV.       RELATIONSHIP OF PARTIES

 

It is the express intention of the Parties that in all matters, the Parties will act as “Independent Contractors” and not as an employee, agent, joint venture, or partner of the other Party.  Nothing in this Agreement shall be interpreted or construed as creating or establishing the relationship of employer and employee between the Parties, and that:

 

A.                                    The employees or agents of one Party will not be deemed to be employees or agents of the other for any purpose under any federal or state law, including, but not limited to Unemployment Insurance Law, Old Age Benefits Law or Social Security Law, Workman’s Compensation Law, or under Internal Revenue or War Tax Legislation, or under any industrial law or otherwise.

 

B.                                    That neither Party will have any right, power, or authority to create any obligation, express or implied, on behalf of the other except to the extent provided herein.

 

ARTICLE XVI.       ENTIRE AGREEMENT

 

This Agreement, as may be modified in accordance with the provisions of this Agreement by individual Proposals or by mutual written agreement of the Parties, constitutes the entire understanding of the Parties and supersedes any previous communications, oral or written, between the Parties.  No change or modification of this Agreement shall be valid unless contained in a writing signed by a duly authorized representative of each Party.  There are no understandings, agreements, representations, or warranties, express or implied, which are not specified herein respecting the subject matter hereof.  Further, it is the intent of the Parties that the terms and conditions of this Agreement shall prevail notwithstanding any different, conflicting, or additional terms or conditions that may appear on any purchase order, acknowledgement, or other writing not expressly incorporated into this Agreement.

 

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ARTICLE XVII.       APPLICABLE LAW

 

Each Party agrees to timely notify the other Party of any claim, dispute, or cause of action arising under or related to this Agreement, and to negotiate in good faith to resolve any such claim, dispute, or cause of action.  To the extent that such negotiations fail, the Parties agree that any lawsuit or cause of action brought by one Party against the other that arises out of or is related to this Agreement shall be filed and litigated only with a court of competent jurisdiction within the State of Illinois; and the Parties hereby consent and agree to the personal jurisdiction and venue of any state or federal court of competent jurisdiction located within the State of Illinois with respect to any such claim, dispute, or cause of action and waive any defense or objection to the exercise of personal jurisdiction and/or venue by any such court.  The Parties to this Agreement also consent and agree that this Agreement and the obligations of the Parties hereunder, shall be governed by, interpreted, construed, and enforced in accordance with the laws of the State of Illinois, without reference to its principles of conflict of laws.

 

ARTICLE XVIII.       ASSIGNMENT

 

Neither this Agreement nor any interest herein may be assigned, in whole or in part, by either Party without the prior written consent of the other Party, except that, without securing such prior consent, either Party shall have the right to assign this Agreement to any successor of such Party by way of merger or consolidation or the acquisition of substantially all of the assets of such Party; provided, however, that such successor shall expressly assume all of the obligations of such assigning Party under this Agreement.

 

ARTICLE XIX.       SEVERABILITY

 

In the event that any provision of this Agreement should be held void, voidable, or unenforceable, the remaining portions hereof shall remain in full force and effect.

 

ARTICLE XX.       PARTIES TO BENEFIT

 

All work performed and work product generated by IITRI under this Agreement is made exclusively for the benefit of the Client.  Disclosure of any work product generated by IITRI under this Agreement shall be limited solely to the Client, and shall conform to the requirements in ARTICLE V (CONFIDENTIAL INFORMATION) and Article IX (PUBLICATION) of this Agreement.  IITRI and the Client expressly exclude any and all third parties from the benefits of this Agreement.

 

In the event that Client furnishes any IITRI work product to a person who is not a Party to this Agreement, Client agrees to defend, indemnify, and hold harmless IITRI from and against all claims, damages, losses , and expenses brought or sustained by any third party that arise out of, are related to, or are based upon IITRI work product.

 

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IN WITNESS WHEREOF, a duly authorized representative of each Party has approved and executed this Agreement on the date first above written.

 

	
ARIDIS Pharmaceuticals, , Inc.
    	
 
    	
HT Research Institute
    
	
 
    	
 
    	
 
    
	
Printed Name
    	
 
    	
Printed Name
    
	
 
    	
 
    	
 
    
	
Signature
    	
 
    	
Signature
    
	
 
    	
 
    	
 
    
	
Title
    	
 
    	
Title
    
	
 
    	
 
    	
 
    
	
Date
    	
 
    	
Date
    

 

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