Document:

REGN-Ex_10.10.1-12/31/2014-10K

Exhibit 10.10.1

RESTATED AMENDMENT AGREEMENT
This Amendment Agreement (this “Amendment Agreement”) dated as of May 7, 2012, is by and between Regeneron Pharmaceuticals, Inc., a corporation organized and existing under the laws of the State of New York and having its principal office at 777 Old Saw Mill River Road, Tarrytown, New York 10591 (“Regeneron”), and Bayer Healthcare LLC, a limited liability company having a principal place of business at 511 Benedict Avenue, Tarrytown, NY 10591 (“Company”).  

INTRODUCTION

WHEREAS, Regeneron and BHC are Parties to a License and Collaboration Agreement, having an effective date of October 18, 2006, as amended on May 7, 2012 (the “LCA”); and

WHEREAS, Regeneron and BHC have mutually determined that, during the term of the Co-Promotion and Distribution Agreement, by and between Bayer Yakuhin, Ltd. (“BYL”), an Affiliate of BHC, and Santen Pharmaceutical Co., Ltd. (“Santen”), dated of even date herewith (the “Santen Co-Promotion Agreement”) which is being executed and delivered concurrently with the execution and delivery of this Amendment, Licensed Products will be Commercialized in Japan pursuant to the Santen Co-Promotion Agreement.  

WHEREAS, in connection with, and as a condition to Regeneron consenting to the Commercialization of Licensed Products in Japan pursuant to, the Santen Co-Promotion Agreement, this Amendment Agreement is being entered into to amend and supplement the LCA to (a) convert the financial arrangements with respect to the Commercialization of Licensed Products in Japan from a profit split as provided in the LCA to a purchase price adjustment payable by Bayer to Regeneron (subject to reversion to a profit split under certain circumstances), and (b) reflect the agreements among Company, BYL and Regeneron regarding the Commercialization of Licensed Products in Japan , including, in particular, the financial, governance and reporting provisions of the LCA with respect to Japan.

NOW, THEREFORE, in consideration of the foregoing, and the mutual promises and obligations set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
   
		
	1.
	Existing Definitions.  Capitalized terms used in this Amendment Agreement which are not defined herein and are defined in the LCA shall have the meanings ascribed to them in the LCA.  Capitalized terms used in this Amendment Agreement which are not defined herein and are not defined in the LCA shall have the meanings ascribed to them in the Santen Co-Promotion Agreement and such definitions are hereby deemed incorporated by reference into Article I of the LCA.

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	2.
	New Definitions.  Article 1 of the LCA is hereby amended to add the following definitions:   

		
	(a)
	“[****]” shall mean [****]. 

		
	(b)
	“Amendment Agreement” shall mean this Amendment Agreement, as it may be amended from time to time.    

		
	(c)
	“Bayer Market Net Sales” shall mean Net Sales in Japan calculated in accordance with the definition of Net Sales set forth in Article I of the LCA. 

		
	(d)
	“Bayer Sales” shall mean the number of units of Licensed Product sold by Bayer to Santen during the respective Quarter multiplied by [****] and multiplied by [****].

		
	(e)
	“BYL” shall mean Bayer Yakuhin Ltd., an Affiliate of Company.

		
	(f)
	“Japan Profit Share” shall have the meaning, and shall be calculated as, set forth in Schedule 2, Section I.B.

		
	(g)
	“Japan Purchase Price Adjustment” shall have the meaning, and shall be calculated as, set forth in Schedule 2, Section I.A.

		
	(h)
	“Japan Shared Promotion Expenses” shall have the meaning set forth in Schedule 2, Section I.B.(i).

		
	(i)
	“Santen” shall mean Santen Pharmaceutical Co., Ltd., a Japanese corporation having its principal place of business at 3-9-19, Shimoshinjo, Higashiyodogawa-ku, Osaka 533-8651, Japan.

		
	(j)
	“Santen Change of Control” shall mean any of the following events:  (a) Company or any of its Affiliates, alone or together, acquire(s) shares of capital stock of Santen representing a majority of the total voting power represented by all classes of capital stock then outstanding of Santen normally entitled to vote in the election of members of the board of directors (or analogous governing body) of Santen; (b) Santen consolidates with or merges with or into Company or any of its Affiliates; or (c) Santen conveys, transfers or leases all or substantially all of its assets to Company or any of its Affiliates.

		
	(k)
	“Santen Co-Promotion Agreement” shall mean the Co-Promotion and Distribution Agreement dated of even date herewith by and between BYL and Santen, as amended from time to time in accordance with the terms thereof and with the consent of Regeneron if required pursuant to the Amendment Agreement.

		
	(l)
	“Santen Market Net Sales” shall mean the number of units of Licensed Product sold by Santen to wholesalers or other Third Parties during the respective Quarter multiplied by [****] and multiplied by[****]. 

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	3.
	Amended Definitions.  The following definitions in Article I of or elsewhere in the LCA are hereby amended as follows: 

		
	(a)
	References in the LCA to “Agreement” shall mean the LCA, as amended by this Amendment Agreement.

		
	(b)
	“Consolidated Payment Report”. The definition of “Consolidated Payment Report” set forth in Article I of the LCA is amended by adding the following sentence at the end thereof:  "In addition, the Consolidated Payment Report shall also include for such Quarter (i) if the Santen Co-Promotion Agreement is in effect and the Japan Purchase Price Adjustment is applicable for such Quarter and, in accordance with Schedule 2, is calculated based on Santen Market Net Sales, (A) Santen Market Net Sales, (B) the applicable NHI Price and (C) unit sales of the Licensed Product in Japan, (ii) if the Japan Purchase Price Adjustment is applicable for such Quarter and is calculated based on Bayer Market Net Sales in accordance with Schedule 2, Bayer Market Net Sales, and (iii) if the Santen Co-Promotion Agreement is in effect and the Japan Profit Share is applicable for such Quarter, (A) Bayer Sales, (B) COGS applicable to Bayer Sales and (C) Japan Shared Promotion Expenses incurred by BYL (following reconciliation with Santen) and by Regeneron, if any."           

		
	(c)
	“Net Sales”. The definition of “Net Sales” set forth in Article I of the LCA is amended by adding the following sentence at the end thereof:  “So long as the Santen Co-Promotion Agreement remains in effect, Net Sales excludes sales of Licensed Products in the Field in Japan.”  

		
	(d)
	“Shared Promotion Expenses”. The definition of “Shared Promotion Expenses” in Article I of the LCA is amended by adding the following sentence at the end thereof:  “So long as the Santen Co-Promotion Agreement is in effect, Shared Promotion Expenses excludes any of the items listed in this definition to the extent related to the Commercialization of Licensed Products in Japan.”

		
	4.
	Schedule 2.  Schedule 2 of the LCA is deleted in its entirety and replaced with the Amended and Restated Schedule 2 attached to this Amendment Agreement, and all references to Schedule 2 in this Amendment Agreement, or in the LCA from and after the date of this Amendment Agreement, refer to such Amended and Restated Schedule 2.

		
	5.
	Regeneron Consent to Sublicense Grant.  Regeneron hereby expressly agrees and consents for the Initial Term to a sublicense by BHC to BYL of BHC’s rights under the Regeneron Intellectual Property granted by Regeneron to BHC pursuant to the LCA, provided such sublicense is in compliance with Section 4.3 of the LCA unless agreed in writing by Regeneron with BHC, and to BYL’s further sublicense of such rights to Santen, to the extent that they comprise Licensed Intellectual Property, pursuant to the terms of the Santen Co-Promotion Agreement, provided that such agreement and consent shall not alter or affect in any manner BHC’s obligations or Regeneron’s rights under the 

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LCA which shall remain in full force and effect, including without limitation under such Section 4.3.
		
	6.
	Commercialization Governance.  For so long as the Santen Co-Promotion Agreement remains in effect, all management and governance of the Commercialization efforts for the Licensed Product in Japan shall be determined under the LCA as if such efforts were conducted by Company alone (it being understood that for so long as the Santen Co-Promotion Agreement remains in effect, Company may fulfill its obligations under the first two sentences of Section 6.6 and Section 6.7 of the LCA through Santen), except that Regeneron shall not participate in the Joint Steering Committee (as defined in the Santen Co-Promotion Agreement) for Japan.  For the avoidance of doubt, Company must still prepare and present to the JCC the Country Commercialization Plan for Japan in accordance with Section 6.3 of the LCA.  If the Santen Co-Promotion Agreement is no longer in effect, this Section 6 of this Amendment shall have no further force or effect and the management and governance of the Commercialization efforts for the Licensed Product in Japan shall again be governed by and subject to the LCA in all respects.  Company shall provide to Regeneron, within ten (10) Business Days of receipt, all reports and information provided to BYL or Company under Section 3.3 of the Santen Co-Promotion Agreement.  Notwithstanding anything to the contrary in this Section 6, Company shall provide, or shall cause BYL to provide, to Regeneron such other reports and information required to be provided under the LCA in the form required by the LCA. 

		
	7.
	Section 9.3(f).  Section 9.3(f) of the LCA is amended by adding the following at the end thereof:  “provided, that if the Santen Co-Promotion Agreement is in effect and the Japan Profit Share is applicable, within forty-five (45) days following the end of each Quarter commencing after the First Commercial Sale in Japan (or such earlier agreed upon calendar Quarter, if appropriate), each Party that has (or whose Affiliate has) incurred Japan Shared Promotion Expenses in that Quarter shall deliver electronically to the other Party a written report setting forth in reasonable detail the Japan Shared Promotion Expenses incurred by that Party or its Affiliates in such Quarter”.  

		
	8.
	Section 9.3(g).  Section 9.3(g) of the LCA is amended by adding immediately after the words “for such Quarter” the following: “and, if the Santen Co-Promotion Agreement is in effect and the Japan Profit Share is applicable, Company shall deliver electronically to Regeneron a written report setting forth (i) COGS applicable to Bayer Sales and (ii) COGS incurred by Company or its Affiliates applicable to Net Sales in the Territory excluding Japan”. 

		
	9.
	Section 11.6.  Section 11.6 of the LCA is amended by adding the following at the end of the first sentence of such Section (after the word “materials” and before the period):  “;and provided further that if including Regeneron’s name with equal prominence on materials exclusively related to each Licensed Product in the Field as provided above is prohibited under applicable Laws, Company will use Commercially Reasonable Efforts to include, to the extent permitted by applicable Laws, a reference to Regeneron and its 

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contribution to such Licensed Product (e.g., ‘EYLEA was jointly developed by Regeneron and Bayer HealthCare’). 
		
	10.
	Calculation of the Japan Profit Split.  Unless the Japan Profit Share is applicable as provided in Section 11 or Section 12 of this Amendment Agreement, the Japan Profit Split (as defined in Schedule 2, Section I.) shall be calculated as the Japan Purchase Price Adjustment, as defined in and in accordance with Schedule 2, Section I.A.

		
	11.
	Bayer Renegotiation Option.   If the actual [****] in a given calendar year is less than [****] of the Assumed [****] for such calendar year as set forth in the table in Schedule 2A attached to this Amendment Agreement, either Party may request in writing that the Japan Purchase Price Adjustment set forth in Schedule 2, Section I.A., be renegotiated to reflect the changed circumstances and to restore the economic basis of such financial arrangements.  The Parties agree to renegotiate in good faith for thirty (30) days following the written request by a Party for renegotiation of such Japan Purchase Price Adjustment pursuant to this Section 11.  If the Parties do not reach written agreement on adjustments to the Japan Purchase Price Adjustment within such thirty (30)- day period, the Japan Profit Split (as defined in Schedule 2, Section I.) shall thereafter be the Japan Profit Share, as defined in and calculated in accordance with Schedule 2, Section I.B., beginning in the next calendar Quarter commencing on or after the expiration of the thirty (30)-day period referenced above in this Section 11.

		
	12.
	Launch Delay Option.   In the event that the First Commercial Sale of a Licensed Product in Japan occurs after [****], either Party may request in writing that the schedule of annual Baseline A Santen Market Net Sales forth in Schedule 2,  Section I.A., and, if the delay materially adversely affects the economic basis of the financial arrangements regarding the Commercialization of Licensed Products in Japan provided for in this Amendment Agreement (including Schedule 2), the Japan Purchase Price Adjustment, be renegotiated to reflect the delayed launch date and to restore the economic basis of such financial arrangements.  The Parties agree to renegotiate in good faith for thirty (30) days following such a written request.  If the Parties do not reach written agreement on a revised schedule of Baseline A Santen Market Net Sales and, if applicable, revised Japan Purchase Price Adjustment, within such thirty (30)-day period, the Japan Profit Split (as defined in Schedule 2, Section I.) shall thereafter be the Japan Profit Share, as defined in and calculated in accordance with Schedule 2, Section I.B., beginning in the next calendar Quarter commencing on or after the expiration of the thirty (30)-day period referenced above in this Section 12.  If the schedule of Baseline A Santen Market Net Sales is adjusted, the schedule of Baseline B and Baseline C Santen Market Net Sales will also be adjusted proportionately.

		
	13.
	[****].

Beginning with the first commercial sale in Japan of [****], Company shall pay to Regeneron a royalty of [****] of Net Sales [****] in Japan (calculated consistent with Section 1.65 of the LCA) until the earlier of: (i) the expiration or termination of the Santen Co-Promotion Agreement, or (ii) a Santen Change of Control.  [****]. 

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	14.
	Calculation of Sales Milestones Payments.  For so long as the Santen Co-Promotion Agreement is in effect, Santen Market Net Sales shall be added to Net Sales in calculating aggregate Net Sales for purposes of determining the achievement of the sales milestone events described on Schedule 3 to the LCA.  If the Santen Co-Promotion Agreement is no longer in effect, Bayer Market Net Sales shall be utilized in calculating aggregate Net Sales for such purposes.

		
	15.
	Restrictions on BYL Actions under Santen Co-Promotion Agreement.   

		
	(a)
	Company will not, and will ensure that BYL does not, without Regeneron's prior written consent (such consent regarding subparagraphs (ii) and (iv) below not to be unreasonably withheld, delayed or conditioned):

		
	(i)
	Agree to any amendment or modification of, waive or fail to enforce any material rights or grant any consent or approval under (including without limitation to permit Santen to conduct any Non-Approval Trial related to the Licensed Product in Japan), extend the Initial Term of, or terminate in part, the Santen Co-Promotion Agreement;

		
	(ii)
	Agree to or permit  any Public Relations Activity related to the Licensed Product in Japan;

		
	(iii)
	Agree to or permit any reduction in the Minimum Audited Detail, or any downward revision in the Market Share Target percentage; 

		
	(iv)
	Enter into or thereafter amend any of the agreements referred to in Section 6.2 or 7.13 of the Santen Co-Promotion Agreement; 

		
	(v)
	Accept Santen's rejection of any delivery of Licensed Product if such rejection is based on actions or omissions of Regeneron in connection with the Manufacture of such Licensed Product, unless Regeneron has confirmed in writing the basis for such rejection in its reasonable judgment prior to such acceptance. For the avoidance of doubt, neither Santen nor BYL shall be required to introduce to the market or keep on the market any Licensed Product that they have tendered for rejection; 

		
	(vi)
	Resolve or agree to resolve any dispute under the Santen Co-Promotion Agreement if such resolution would diminish the economic benefit reasonably expected to accrue to Regeneron pursuant to the Japan Purchase Price Adjustment or Japan Profit Split, as applicable, or would adversely affect the Collaboration in the Territory outside Japan; or 

		
	(vii)
	Agree, pursuant to Section 7.11 of the Santen Co-Promotion Agreement, on an extension of the Minimum Remaining Shelf-Life of the Licensed Product to be delivered to Santen. 

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	(b)
	If BYL is entitled to terminate the Santen Co-Promotion Agreement, Company and BYL will consult with Regeneron regarding the advisability of such termination, but BYL will have the ultimate decision on whether to terminate. Upon such termination, the Existing LCA, as amended by this Amendment Agreement, will govern Commercialization of the Licensed Product in Japan.  

		
	(c)
	For so long as the Santen Co-Promotion Agreement is in effect, Company will not and will ensure that BYL does not make any sales of Licensed Products in Japan. The foregoing does not apply to sales of Licensed Product by Company or BYL to Santen as contemplated by the Santen Co-Promotion Agreement, or any other Commercialization activities expressly provided in the Santen Co-Promotion Agreement to be performed by Company or BYL.  

		
	16.
	Supply Chain.  Notwithstanding the obligations set forth in the Santen Co-Promotion Agreement, Company and BYL will maintain a minimum inventory of [****] of work-in-process inventory of Licensed Product allocated for Japan for the first [****] following the First Commercial Sale in Japan, and thereafter, a minimum inventory of [****] of work-in-process inventory of Licensed Product allocated for Japan.  The foregoing requirements shall be reviewed by the parties in good faith if [****].  For purposes of this paragraph 16, “work in progress inventory” shall mean Licensed Product in vials or syringes prior to labeling or blistering, filled vials or syringes of Licensed Product that are labeled or blistered prior to sterilization, or sterilized and filled vials or blisters of Licensed Product that are labeled or blistered prior to packaging.  

		
	17.
	Public Announcement.  The Company and Regeneron will mutually agree upon the contents of any press release regarding the Santen Co-Promotion Agreement and this Amendment Agreement.  Any other press release or public announcement concerning the Santen Co-Promotion Agreement or this Amendment Agreement shall be governed by Section 16.4 of the LCA.  To the extent that a Party concludes in good faith that it is or may be required to file or register this Amendment Agreement or a notification thereof with any Governmental Authority in accordance with applicable Laws, such Party may do so subject to the provisions of Sections 16.4 and 20.8 of the LCA.     

		
	18.
	Continuing Effect.  Except as specifically modified by this Amendment Agreement, all of the provisions of the LCA are hereby ratified and confirmed to be in full force and effect, and shall remain in full force and effect.

		
	19.
	Company Representation; Performance by BYL.  Company hereby represents and warrants to Regeneron that neither Company, BYL nor any of their Affiliates doing business principally in Japan has any current or planned agreement, arrangement or understanding with Santen or any of its Affiliates, other than the Santen Co-Promotion Agreement.  Company shall cause BYL to perform all its obligations under the Santen Co-Promotion Agreement and will notify Regeneron if it or any of its Affiliates enters into any such agreement, arrangement or understanding with Santen or any of its Affiliates, other than the Santen Co-Promotion Agreement. For the avoidance of doubt, the foregoing representation and warranty, and the requirement to notify Regeneron, does 

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not apply to agreements, such as routine Confidentiality Agreements, Material Transfer Agreements or the like, that do not relate to new business opportunities that have not been disclosed to Regeneron. 
		
	20.
	No Offset.  For the avoidance of doubt, Bayer will have no right to offset the Japan Purchase Price Adjustment with any Bayer COGS, Shared Promotion Expenses or Japan Shared Promotion Expenses, as defined in Schedule 2, Section I.B.(i).    

		
	21.
	Entire Agreement; Successors and Assigns.  The LCA, this Amendment Agreement, and any written agreements executed by both Parties pertaining to the subject matter therein or herein, contain the complete understanding and entire agreement of the Parties hereto with respect to subject matter hereof and thereof and said documents supersede all prior understandings and agreements, whether written or oral, relating to the subject matter hereof and thereof.  This Amendment Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

		
	22.
	Headings.  Headings in this Amendment Agreement are for convenience of reference only and shall not be considered in construing this Amendment Agreement.

		
	23.
	Counterparts.  This Amendment Agreement may be executed in counterparts and by facsimile signatures, each of which shall be deemed an original, and shall become a binding agreement when one or more counterparts have been signed by each Party and delivered to the other Party.

		
	24.
	Miscellaneous. The provisions of Section 20.1 of the LCA shall apply, mutatis mutandis, to this Amendment Agreement.  If there is a direct conflict between the provisions of the LCA and this Amendment Agreement, this Amendment Agreement shall govern.  This Amendment Agreement may be amended only by a writing executed by an authorized representative of each of the Parties.  

[Signatures appear on following page]

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IN WITNESS WHEREOF, each of the Parties has caused this Amendment to be executed as of the date hereof by a duly authorized corporate officer.

BAYER HEALTHCARE LLC

By:     /s/ R. Scott Meece                 
Name:     R. Scott Meece 
Title:     General Counsel, Senior Vice President and     Secretary

Date:    December 30, 2014

REGENERON PHARMACEUTICALS, INC.

By:    /s/ Murray A. Goldberg             
Name:    Murray A. Goldberg 
Title:    Senior Vice President

Date:    December 30, 2014

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AMENDED AND RESTATED SCHEDULE 2 
 
Quarterly True-Up

At the end of each Quarter, the Parties will calculate the net payment one Party shall be required to make to the other Party (the “Quarterly True-Up”) equal to (a) the Territory Profit Split for such Quarter (as set forth in Part I), plus (b) the Regeneron Reimbursement Amount for such Quarter (as set forth in Part II), plus or minus (c) the Global True-Up (as set forth in Part III), minus (d) the Global Development Balance Payment (commencing in the Quarter of the First Commercial Sale in a Major Market Country) (as set forth in Part IV).  In the event that the Quarterly True-Up is an amount greater than zero, such amount shall be payable by Company to Regeneron in accordance with the terms set forth in Article 9.  In the event that the Quarterly True-Up is an amount less than zero, the absolute value of such amount shall be payable by Regeneron to Company in accordance with the terms set forth in Article 9.  An example of the Quarterly True-Up is shown in Part V.

I.  TERRITORY PROFIT SPLIT
The “Territory Profit Split” shall mean the sum of fifty percent (50%) of Territory Profits in the Quarter plus the Japan Profit Split in the Quarter.  “Territory Profits” shall mean aggregate Net Sales in the Territory, excluding Japan, in the Quarter less the sum of aggregate COGS and aggregate Shared Promotion Expenses incurred by both Parties in the Territory, excluding Japan, in the Quarter.  

The “Japan Profit Split” shall equal the US Dollar equivalent (calculated in accordance with Section 9.6) of (a) either (i) the Japan Purchase Price Adjustment, as defined below, or (ii) the Japan Profit Share, as defined below, as applicable for such Quarter, plus (b) the Regeneron Detail Default Payment, if any.  The “Regeneron Detail Default Payment” shall equal [****] of the Detail Default Payment paid by Santen to the BYL in a Quarter, if any.

10

An example of a calculation of the Territory Profit Split in a Quarter would be:

	
					
	 
	Aggregate
	Company

	Regeneron

	 

	 
	 
	 
	 
	 

	Net Sales in the Territory*
	1000
	1000
	 
	 

	 
	 
	 
	 
	 

	COGS*

	(50)
	(50)
	0
	 

	 
	 
	 
	 
	 

	Shared Promotion Expenses*
	(350)
	(300)
	(50)
	 

	 
	 
	 
	 
	 

	Territory Profits
	600
	 
	 
	 

	

50% of Territory Profits
	

300
	 
	 
	 

	Japan Profit Split
	100
	 
	 
	 

	Territory Profit Split
	400
	 
	 
	 

* Excluding Japan

		
	A.
	JAPAN PURCHASE PRICE ADJUSTMENT

The Japan Purchase Price Adjustment mechanism shall always apply unless the Parties cannot reach agreement for adjustments pursuant to paragraphs 9 and 10, in which case the Japan Profit Share will apply.
For each calendar year through December 31, 2021 that the Santen Co-Promotion Agreement is in effect, the “Japan Purchase Price Adjustment” shall equal the sum of (i) 33.5% of Santen Market Net Sales up to Baseline A Santen Market Net Sales for such year, (ii) [****] of Santen Market Net Sales  in excess of Baseline A Santen Market Net Sales up to Baseline B Santen Market Net Sales for such year, (iii) [****] of Santen Market Net Sales in excess of Baseline B Santen Market Net Sales up to Baseline C Santen Market Net Sales for such year, and (iv) 40.0% of Santen Market Net Sales in excess of Baseline C Santen Market Net Sales.  
For each calendar year through [****] that the Santen Co-Promotion Agreement is not in effect, the Japan Purchase Price Adjustment shall equal [****] of Bayer Market Net Sales.  
From and after a Santen Change of Control, and in any event after [****], the Japan Purchase Price Adjustment shall equal [****] of Bayer Market Net Sales.  
Baseline A Santen Market Net Sales, Baseline B Santen Market Net Sales, and Baseline C Santen Market Net Sales are set forth below:

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	Santen Market Net Sales 
(in millions of Yen)
	 

	Year
	Baseline A
	Baseline B 
(=[****] of Baseline A) 
	Baseline C  
(=[****] of Baseline A)
	 

	2012
	[****]
	[****]
	[****]
	 

	2013
	[****]
	[****]
	[****]
	 

	2014
	[****]
	[****]
	[****]
	 

	2015
	[****]
	[****]
	[****]
	 

	2016
	[****]
	[****]
	[****]
	 

	2017
	[****]
	[****]
	[****]
	 

	2018
	[****]
	[****]
	[****]
	 

	2019
	[****]
	[****]
	[****]
	 

	2020
	[****]
	[****]
	[****]
	 

	2021
	[****]
	[****]
	[****]
	 

When the Santen Co-Promotion Agreement is in effect, the Japan Purchase Price Adjustment for a Quarter shall be calculated based on Santen Market Net Sales in such Quarter using a rate(s) based on aggregate year-to-date Santen Market Net Sales in accordance with the formula set forth above.

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A series of examples of the calculation of the Japan Purchase Price Adjustment is set forth below:
[****]

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B.  JAPAN PROFIT SHARE
The Japan Profit Share applies only if the Parties cannot reach agreement for adjustments pursuant to paragraphs 11 and 12, otherwise the Japan Purchase Price Adjustment mechanism will apply.
Japan Profit Share – Santen Co-Promotion Agreement in Effect

If the Santen Co-Promotion Agreement is in effect, the “Japan Profit Share” shall equal fifty percent (50%) of Japan Profits in the Quarter.  “Japan Profits” for this Paragraph (i) shall mean Bayer Sales in the Quarter less the sum of COGS applicable to Bayer Sales and Japan Shared Promotion Expenses incurred by BYL (following reconciliation with Santen) (and Regeneron, if any) in Japan in the Quarter.  “Japan Shared Promotion Expenses” shall mean the sum of (a) Promotional Expenses (as defined in the Santen Co-Promotion Agreement) and (b) [****] of the Promotion Fee (as defined in the Santen Co-Promotion Agreement).  The other [****] of the Promotion Fee will be borne by the Company and will not be included as a part of the calculation of Japan Profits.

Japan Profit Share – Santen Co-Promotion Agreement Not in Effect and no Japan Purchase Price Adjustment payable

If the Santen Co-Promotion Agreement is not in effect, the “Japan Profit Share” shall equal fifty percent (50%) of Japan Profits in the Quarter.  “Japan Profits” for this Paragraph (ii) shall mean Bayer Market Net Sales in the Quarter less the sum of COGS applicable to Bayer Market Net Sales and Shared Promotion Expenses incurred by BYL (and Regeneron, if any) in Japan in the Quarter.   

II.  REGENERON REIMBURSEMENT AMOUNT
The “Regeneron Reimbursement Amount” for a Quarter shall mean (a) Shared Promotion Expenses incurred by Regeneron in the Quarter (if any), plus (b) Commercial Supply Costs incurred by Regeneron in the Quarter (if any), plus (c) Development Costs incurred by Regeneron under the Territory Development Plan in the Quarter (if any).

An example of a calculation of the Regeneron Reimbursement Amount in a Quarter would be:  

Regeneron Shared Promotion Expenses    50

Regeneron Commercial Supply Costs    10

Regeneron Development Costs under Territory Development Plan    5

Regeneron Reimbursement Amount    65

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III.  GLOBAL TRUE-UP

The “Global True-Up” for a Quarter shall mean (a) fifty percent (50%) of the sum of (i) aggregate Development Costs incurred by both Parties under the Global Development Plan in the Quarter and (ii) aggregate Other Shared Expenses incurred by both Parties in the Quarter, minus (b) one hundred percent (100%) of the sum of (i) Development Costs incurred by Company under the Global Development Plan in the Quarter and (ii) Other Shared Expenses incurred by Company during the Quarter.  If the Global True-Up is a positive number, it shall be added in the calculation of the Quarterly True-Up and, if it is a negative number, the absolute value of such amount shall be subtracted in the calculation of the Quarterly True-Up. 

An example of a calculation of the Global True-Up in a Quarter would be:  
	
												
	 
	 
	Aggregate
	 
	Company
	 
	Regeneron
	Global True-Up

	Development Costs under Global Development Plan
	 
	80
	

	 
	30
	

	 
	50
	

	 

	Other Shared Expenses
	 
	40
	

	 
	35
	

	 
	5
	

	 

	Total
	 
	120
	

	 
	65
	

	 
	55
	

	(5
	)

IV.  GLOBAL DEVELOPMENT BALANCE PAYMENT

The “Global Development Balance” for a Quarter shall mean (a) twenty-five percent (25%) of the aggregate amount of Development Costs incurred by both Parties under the Global Development Plan from January 1, 2007 through the close of such Quarter ([****]), plus (b) fifty percent (50%) of the aggregate amount of Development Costs incurred by both Parties under the Territory Development Plan from the Effective Date through the close of such Quarter ([****]), less (c) the aggregate amount of Global Development Balance Payments included in the calculation of the Quarterly True-Up in all prior Quarters.  On the date of the First Commercial Sale in Japan, if the Japan Purchase Price Adjustment mechanism is applicable, the Global Development Balance shall never include Pre-Launch Marketing Expenses relating to Japan.  

The “Global Development Balance Payment” shall mean, [****]   

An example of a calculation of the Global Development Balance Payment in a Quarter would be:
	
				
	Territory Profit Split
	 
	400
	

	Global Development Balance
	 
	200
	

	[****]
	 
	[****]
	

	Global Development Balance Payment
	 
	[****]
	

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V.  EXAMPLE OF QUARTERLY TRUE-UP

An example of a calculation of the Quarterly True-up in a Quarter would be: 
	
				
	Territory Profit Split
	 
	400
	

	Regeneron Reimbursement Amount
	 
	65
	

	Global True-Up
	 
	(5
	)

	[****]
	 
	[****]
	

	Quarterly True-up
	 
	[****]
	

In this example, Company would pay Regeneron [****] in accordance with the terms set forth in Article 9.

 

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SCHEDULE 2A

Assumed [****] by Year in Yen

	
		
	Year
	Assumed [****]

	2012
	[****]

	2013
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	2014
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	2015
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	2016
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	2017
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	2018
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	2019
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	2026 and thereafter
	[****]

17REGN-Ex_10.21.2-12/31/2014-10K

Exhibit 10.21.2

Date:        November 25, 2014

		
	To:
	Regeneron Pharmaceuticals, Inc.

777 Old Saw Mill River Road
Tarrytown, NY 10591-6707
    
		
	Attention:
	Dominick Agron

VP and Treasurer
777 Old Saw Mill River Road
Tarrytown, NY 10591-6707

		
	Facsimile:
	(914) 847-1555

        
		
	From:
	Goldman, Sachs & Co.

200 West Street
New York, NY 10282-2198

		
	Re:  
	Second Amendment of the Warrant Transaction between Goldman, Sachs & Co. and Regeneron Pharmaceuticals, Inc.

Dear Sir/Madam:

Goldman, Sachs & Co. (“GS&Co.”) and Regeneron Pharmaceuticals, Inc. (“Issuer”) are parties to a warrant transaction evidenced by the Master Terms and Conditions for Base Warrants Issued by Regeneron Pharmaceuticals, Inc. dated as of October 18, 2011, supplemented by the written confirmation dated as of October 18, 2011 (the “Confirmation”).  Terms used herein but are not otherwise defined shall have meanings assigned to them in the Confirmation.

Upon the effectiveness of this Amendment as set forth in Paragraph 1 below, all references in the Confirmation to the “Number of Warrants” will be deemed to be to the Number of Warrants as amended hereby and all references in the Confirmation to the “Transaction” will be deemed to be to the Transaction as amended hereby.

1.  Amendments.  Effective upon payment of the Amendment Payment on the Payment Date (as defined below), the Number of Warrants for each Component of the Transaction shall be reduced by 1/80th of the Applicable Number of Warrants (as defined below), with each such Number of Warrants rounded up to the nearest whole number, except that the Number of Warrants for the Component with the latest Expiration Date shall be reduced by the aggregate number resulting from such rounding.

2.  Amendment Payment.  In consideration of the amendment of the Transaction, Issuer agrees to pay to GS&Co. on the Payment Date an amount in USD (the “Amendment Payment”) equal to the product of the Applicable Number of Warrants and the Amendment Payment Amount per Warrant (each as defined below); provided that the Amendment Payment shall not exceed the Maximum Amendment Payment Amount (as defined below).

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	Applicable Number of Warrants:
	To be in the aggregate a number of Warrants as determined by GS&Co. with respect to which GS&Co. has closed out its Hedge Positions during the Unwind Period (as defined below); provided that the Applicable Number of Warrants shall not exceed the Maximum Number of Warrants (as defined below).

		
	Maximum Number of Warrants:  
	493,229

Amendment Payment Amount 
		
	per Warrant:
	As set forth in Annex A, to be the amount specified for the relevant Unwind Period Price. 

Maximum Amendment 
		
	Payment Amount:
	USD $148,500,000.

		
	Payment Date:
	The third Currency Business Day following the last day of the Unwind Period.

		
	Unwind Period:
	A number of Scheduled Trading Days selected by GS&Co. in its sole discretion, beginning on the Scheduled Trading Day immediately following the date hereof, and ending no later than February 12, 2015.

		
	Unwind Period Price:
	The volume-weighted average of the per Share prices at which GS&Co. purchases Shares in order to close out its Hedge Positions in respect of the Applicable Number of Warrants during the Unwind Period; provided that GS&Co. shall not effect any such purchases at a price per Share in excess of the Limit Price.

		
	Limit Price:
	USD $397.75 per Share.

3.  Representations and Warranties.

(a)     Each party represents to the other party that:

(i)    It is duly organized and validly existing under the laws of the jurisdiction of its organization or incorporation and, if relevant under such laws, in good standing.

(ii)    It has the power to execute this Amendment and any other documentation relating to this Amendment to which it is a party, to deliver this Amendment and any other documentation relating to this Amendment that it is required by this Amendment to deliver and to perform its obligations under this Amendment and has taken all necessary action to authorize such execution, delivery and performance.

(iii)    Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets.

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(iv)    All governmental and other consents that are required to have been obtained by it with respect to this Amendment have been obtained and are in full force and effect and all conditions of any such consents have been complied with.

(v)    Its obligations under this Amendment constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)).

(b)     Issuer represents and warrants to and for the benefit of GS&Co. as follows:

(i)    (A) On the date hereof, Issuer is not aware of any material non-public information regarding Issuer or the Shares and (B) its most recent Annual Report on Form 10-K, taken together with all reports and other documents subsequently filed by Issuer with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), when considered as a whole (with the more recent such reports and documents deemed to amend inconsistent statements contained in any earlier such reports and documents), does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances in which they were made, not misleading.

(ii)    On the date hereof and on the Payment Date, (A) the assets of Issuer at their fair valuation exceed the liabilities of Issuer, including contingent liabilities, (B) the capital of Issuer is adequate to conduct the business of Issuer and (C) Issuer has the ability to pay its debts and obligations as such debts mature and does not intend to, or does not believe that it will, incur debt beyond its ability to pay as such debts mature.

(iii)    Issuer acknowledges its responsibilities under applicable federal securities laws, including, without limitation, Rule 10b-5 under the Exchange Act, in relation to the Transaction and its amendment.

(iv)    Issuer is entering into this Amendment in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act (“Rule 10b5-1”) or any other antifraud or anti-manipulation provisions of the federal or applicable state securities laws and that it has not entered into or altered and will not enter into or alter any corresponding or hedging transaction or position with respect to the Shares.  Issuer acknowledges that it is the intent of the parties that this Amendment comply with the requirements of paragraphs (c)(1)(i)(A) and (B) of Rule 10b5-1 and this Amendment shall be interpreted to comply with the requirements of Rule 10b5-1(c). 

(v)    Issuer will not seek to control or influence GS&Co.’s decision to make any “purchases or sales” (within the meaning of Rule 10b5-1(c)(1)(i)(B)(3)) of Shares during the Unwind Period, including, without limitation, GS&Co.’s decision to enter into any hedging transactions.  Issuer represents and warrants that it has consulted with its own advisors as to the legal aspects of its adoption and implementation of this Amendment under Rule 10b5-1.

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(vi)    Issuer acknowledges and agrees that any amendment, modification, waiver or termination of this Amendment must be effected in accordance with the requirements for the amendment or termination of a “plan” as defined in Rule 10b5-1(c).  Without limiting the generality of the foregoing, any such amendment, modification, waiver or termination shall be made in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1, and no such amendment, modification or waiver shall be made at any time at which Issuer is aware of any material non-public information regarding Issuer or the Shares.

4.  Covenants of Issuer during Unwind Period.  Issuer agrees with GS&Co. that during the Unwind Period that:

(a)    the Shares or securities that are convertible into, or exchangeable or exercisable for Shares, are not, and shall not be, subject to a “restricted period,” as such term is defined in Regulation M and (B) Issuer shall not engage in any “distribution,” as such term is defined in Regulation M until the second Exchange Business Day immediately following the Unwind Period;

(b)    neither Issuer nor any “affiliated purchaser” (as defined in Rule 10b-18) shall directly or indirectly (including, without limitation, by means of any cash-settled or other derivative instrument) purchase, offer to purchase, place any bid or limit order that would effect a purchase of, or commence any tender offer relating to, any Shares (or an equivalent interest, including a unit of beneficial interest in a trust or limited partnership or a depository share) or any security convertible into or exchangeable or exercisable for Shares; provided that, for the avoidance of doubt, (i) for purposes of this Section 4(b) “affiliated purchaser” shall not include Sanofi or any of its directly or indirectly wholly owned subsidiaries; and (ii) this Section 4(b) shall not preclude Issuer from receiving (or retaining) any Shares in payment of the option exercise price or receiving (or retaining) any Shares in respect of tax withholding or other similar tax obligation in connection with the exercise, vesting or delivery of any awards granted under Issuer’s equity incentive award plans;  

(c)    it (A) will not make any public announcement (as defined in Rule 165(f) under the Securities Act) of any Merger Transaction or potential Merger Transaction unless such public announcement is made prior to the opening or after the close of the regular trading session on the Exchange for the Shares; and (B) shall promptly (but in any event prior to the next opening of the regular trading session on the Exchange) notify GS&Co. following any such announcement that such announcement has been made.

5.  GS&Co. Activities during Unwind Period.

(a)    GS&Co. agrees with Issuer that during the Unwind Period, GS&Co. shall use commercially reasonable efforts to make all purchases of Shares in a manner that would comply with the limitations set forth in clauses (b)(1), (b)(2), (b)(3), (b)(4) and (c) of Rule 10b-18, as if such rule were applicable to such purchases, taking into account any applicable Securities and Exchange Commission no-action letters as appropriate and subject to any delays between the execution and reporting of a trade of the Shares on the Exchange and other circumstances beyond GS&Co.’s control.

(b)    GS&Co. and Issuer agree and acknowledge that any transactions with respect to the Shares (including, without limitation, any hedging transactions) entered into by GS&Co. during the Unwind Period are entered into for GS&Co.’s own account and on its own behalf and not for the account of, or on behalf of, Issuer.

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6.  No Additional Amendments or Waivers.  Except as amended hereby, all the terms of the Transaction and provisions in the Confirmation shall remain and continue in full force and effect and are hereby confirmed in all respects.

7.  Counterparts.  This Amendment may be signed in any number of counterparts, each of which shall be an original, with the same effect as if all of the signatures thereto and hereto were upon the same instrument.

8.  Governing Law.  The provisions of this Amendment shall be governed by the New York law (without reference to choice of law doctrine).

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Please confirm that the foregoing correctly sets forth the terms of our agreement by executing this Amendment and returning it in the manner indicated in the attached cover letter. 

GOLDMAN, SACHS & CO.

By:          /s/ Daniela A. Rouse                
  Name:      Daniela A. Rouse                                        
  Title:      Vice President                            
 
                        

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Agreed and Accepted By: 
 
REGENERON PHARMACEUTICALS, INC.

By:           /s/ Dominick Agron 
  Name:    Dominick Agron 
  Title:      Vice President & Treasurer

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Annex A
	
		
	Unwind Period Price
	Amendment Payment Amount per Warrant

	$370.00
	$273.46

	$375.00
	$278.44

	$380.00
	$283.43

	$385.00
	$288.41

	$390.00
	$293.40

	$395.00
	$298.38

	$397.75
	$301.07

For an Unwind Period Price falling between the amounts appearing in such column, the Amendment Payment Amount per Warrant will be calculated by GS&Co. using linear interpolation.  If the Amendment Payment Amount per Warrant is otherwise not determinable pursuant to the foregoing because the Unwind Period Price is less than the lowest Unwind Period Price set forth above, the Amendment Payment Amount per Warrant will be determined by GS&Co. by linear extrapolation based on the two lowest Unwind Period Prices set forth above.  If the Amendment Payment Amount per Warrant is otherwise not determinable pursuant to the foregoing because the Unwind Period Price is greater than the highest Unwind Period Price set forth above, the Amendment Payment Amount per Warrant will be determined by GS&Co. by linear extrapolation based on the two highest Unwind Period Prices set forth above.    

8

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