Document:

EXHIBIT
10.1

 

SUMMARY SHEET:  VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
ANNUAL BASE SALARY

 

	
  Name

  	
   

  	
  Title

  	
   

  	
  Annual Base Salary

  	
   

  
	
  James K. Teringo, Jr.

  	
   

  	
  Vice President, General Counsel and Secretary

  	
   

  	
  $

  	
  120,000Exhibit 10.1

 

CONFIDENTIAL TREATMENT REQUESTED

UNDER 17 C.F.R. §§ 200.80(b)4, AND 240.24b-2

 

COLLABORATIVE RESEARCH AGREEMENT

 

This COLLABORATIVE RESEARCH AGREEMENT (“Agreement”)
is entered into as of May 24, 2005 by and between PFIZER INC,
a Delaware corporation, having an office at 235 East 42nd Street,
New York, New York 10017 and its Affiliates (“Pfizer”), and ISIS PHARMACEUTICALS, INC., a Delaware
corporation, having an office at 1896 Rutherford Road, Carlsbad, CA 92008 (“Isis”).

 

WHEREAS, Isis has
expertise in the discovery, research, and development of antisense
oligonucleotides; and

 

WHEREAS, Isis has
discovered and developed proprietary antisense 2’- MOE chemistry, methods of
use, design motifs and mechanism technology; and

 

WHEREAS, the parties
plan to seek patent protection for all Products which make up the subject
matter of this Agreement and the License Agreement; and

 

WHEREAS, Pfizer has
the capability to undertake research for the discovery and evaluation of agents
for treatment of disease and also the capability for clinical analysis,
manufacturing and marketing of such agents; and

 

WHEREAS, Pfizer and
Isis enter into this Agreement to discover and develop therapeutic antisense
oligonucleotide agents;

 

NOW, THEREFORE, the
parties agree as follows:

 

 

1.                                       Definitions.

 

The capitalized terms used in this Agreement, and not defined elsewhere
in it, shall have the meanings specified for such terms in Exhibit A.

 

2.                                       Collaborative Research Program.

 

2.1                                 Purpose. 
Isis and Pfizer shall conduct the Research Program throughout the
Contract Period.  The objective of the
Research Program is to discover and develop Products.

 

2.2                                 Research Plan. 
The Research Plan for the first Commitment Year is described in the
attached Exhibit I.  For each
Commitment Year after the first, the Research Plan shall be prepared by the
Research Committee for submission to and approval by Pfizer and Isis no later
than ninety (90) days before the end of the prior Commitment Year.  Each Research Plan for each succeeding
Commitment Year shall be appended to Exhibit I and made part of this
Agreement.

 

2.3                                 Exclusive Collaboration Gene
Targets.  Isis agrees, subject to Section 10.1 of
this Agreement and Section 11.1 of the License Agreement, that neither
Isis nor any Isis controlled entities shall conduct research itself or sponsor
any other research in the Area, or engage in any research sponsored by any
third party in the Area, without Pfizer’s prior written consent.

 

2.4                                 Substitution of [***].  If the Research Committee
determines that [***], Pfizer, at its election, may substitute [***], to be
mutually agreed upon by the parties, for [***].  Upon
substitution, the new [***] shall be deemed [***] and the removed [***] shall no longer be deemed [***].  The removed [***] will be subject
to Sections 10 and 11 of this Agreement. 
Pfizer shall provide Isis with written notice of the substituted [***] within sixty
(60) days of the Research Committee decision. 
Subject to the foregoing, Pfizer will have the right to make only [***] and at no time
will there be more than [***] ([***]) Exclusive Collaboration Gene Targets.

 

Isis
must accept such substituted [***] within [***] ([***])[***] of receipt of such written notice by Pfizer, unless:

 

(a)                                  such
substituted [***] (or any ASO
directed thereto) is subject to a written agreement between Isis and a third
party made prior to Isis’ receipt of such written notice which precludes Isis
from agreeing as set out in Section 2.3 or, [***];

 

2

 

(b)                                 it is, at the
time of receipt of such written notice, conducting or planning to conduct an
internal product discovery or development program relating to such substituted [***], independent
of the Research Program, as can be demonstrated by Isis’ written records.

 

2.5                                 [***].   The parties agree to conduct research on [***] as [***], pursuant to
the Research Plan.  The parties agree to
conduct research on [***]on a non-exclusive basis.  For the avoidance of doubt, Isis and Pfizer
shall have the right to collaborate with other parties and conduct internal
research on the [***]without limitation.

 

2.6                                 [***].  [***], and has filed a patent application claiming [***].  So long as [***], under Section 5.2(a) Pfizer has the right
to make and use [***], and pursuant to Section 5.3,
Pfizer has the right to have the [***]Patent
Rights assigned to it.

 

2.7                                 Research Committee.

 

2.7.1                        Purpose. 
Pfizer and Isis shall establish a Research Committee (the “Research
Committee”):

 

(a)                                  to review and evaluate progress under the
Research Plan;

 

(b)                                 to prepare the Research Plan for each
Commitment Year other than for the first Commitment Year; and

 

(c)                                  to coordinate and monitor publication of
research results obtained from and the exchange of information and materials
that relate to the Research Program.

 

2.7.2                        Membership. 
Pfizer and Isis each shall appoint, in its sole discretion, three
members to the Research Committee. 
Substitutes may be appointed at any time.

 

The members initially shall be:

 

Pfizer Appointees:

 

[***]

 

[***]

 

[***]

 

Isis Appointees:

 

[***]

 

[***]

 

[***]

 

3

 

2.7.3                        Chair. 
The Research Committee shall be chaired by two co-chairpersons, one
appointed by Pfizer and the other appointed by Isis.

 

2.7.4                        Meetings. 
The Research Committee shall meet at least quarterly, at places and on
dates selected by each party in turn. 
Representatives of Pfizer or Isis or both, in addition to members of the
Research Committee, may attend such meetings at the invitation of either party.

 

2.7.5                        Minutes. 
The Research Committee shall keep accurate minutes of its deliberations
which record all proposed decisions and all actions recommended or taken.  Drafts of the minutes shall be delivered to
all Research Committee members within ten (10) business days after each
meeting.  The party hosting the meeting
shall be responsible for the preparation and circulation of the draft
minutes.  Draft minutes shall be edited
by the co-chairpersons and shall be issued in final form only with their
approval and agreement.

 

2.7.6                        Decisions. 
All technical decisions of the Research Committee shall be made by
unanimous vote of the members present (so long as at least one Isis-appointed
member and one Pfizer-appointed member are present).  If a dispute, controversy or difference
between the parties arises over technical issues (in each case, a “Dispute”),
then such Dispute first shall be referred to the Research Committee to seek
resolution of the Dispute.  In such an
event, the Research Committee shall hold at least one (1) meeting within
thirty (30) days of the date on which the Dispute is referred to the Research
Committee by any member thereof.  In the
event that the Research Committee is unable to resolve the Dispute within
forty-five (45) days of the date on which the Dispute is referred to the
Research Committee, each party shall designate a member of its senior
management (not on the Research Committee) to discuss the Dispute in an effort
to settle it amicably during a period of no less than thirty (30) days.  Subject to Section 2.6.1 of the License
Agreement, Pfizer shall have all decision making authority regarding the
research, development and commercialization of Products.  However, under no circumstances shall Isis be
required to perform work outside the scope of the Research Plan or incur costs
beyond those provided for in this Agreement or the Research Plan.

 

2.7.7                        Expenses. 
Pfizer and Isis shall each bear all expenses of their respective members
related to their participation on the Research Committee.

 

4

 

2.8                                 Reports and Materials.

 

2.8.1                        Reports. 
During the Contract Period, Pfizer and Isis each shall furnish to the
Research Committee:

 

(a)                                  summary written reports within [***] ([***]) days
after the end of each three-month period commencing on the Effective Date,
describing its progress under the Research Plan; and

 

(b)                                 detailed written reports within [***] ([***]) days
after the end of each Commitment Year, describing the work accomplished by it
under the Research Plan during the Commitment Year and discussing and
evaluating the results of such work; and

 

(c)                                  detailed written reports within [***] ([***]) days
upon the completion of each research activity eligible for a milestone payment,
describing the work accomplished in the completion of each milestone.

 

2.8.2                        Materials. 
Isis and Pfizer shall, during the Contract Period, as a matter of course
as described in the Research Plan, or upon each other’s written or oral
request, furnish to each other samples of biochemical, biological or synthetic
chemical materials which are part of [***], Isis
Technology, Isis Know-how, Isis Licensed Technology, [***],
Program Technology or Program Know-how and which are necessary for each party
to carry out its responsibilities under the Research Plan.  Isis shall, upon request, deliver to Pfizer
samples of any material made pursuant to and during activities described in the
Research Plan.  To the extent that the
quantities of materials requested by either party exceed the quantities set
forth in the Research Plan, the requesting party shall reimburse the other
party for the reasonable costs of such materials if they are furnished.

 

2.8.3                        Restrictions on Transferring
Materials.  Pfizer and Isis recognize that the
biological, synthetic chemical and biochemical materials which are part of [***], Isis Technology, Isis Know-how, [***],
Isis Licensed Technology, Program Technology, or Program Know-how represent
commercial assets.  Therefore, throughout
the Contract Period and for [***] thereafter,
Isis and Pfizer agree not to transfer materials of the other party to any third
party except for agents, unless prior written consent for any such transfer is
obtained from the other party.  Isis and
Pfizer each represent that any employees, Affiliates, agents and any
consultants to whom materials of the other party are transferred are bound by
agreement to use such materials only as expressly permitted by this Agreement,
and by assignment obligations in favor of the transferring party as are appropriate
to effect the ownership provisions of Section 5.1.

 

5

 

2.9                                 Laboratory Facility and Personnel. 
Isis shall provide suitable laboratory facilities, equipment and
personnel for the work to be done by Isis in carrying out the Research Program.

 

2.10                           Diligent Efforts. 
Pfizer shall use Commercially Reasonable Efforts and Isis shall use
commercially reasonably efforts to achieve the objectives of the Research
Program and Research Plan.

 

3.              Funding.

 

3.1                                 Technology Access Fee. 
In consideration of disclosure to Pfizer of Isis’ proprietary 2’-MOE
chemistry and Isis’ related technical knowledge and expertise, Pfizer shall pay
to Isis a one-time, non-refundable, non-creditable technology access fee of one
million dollars ($1,000,000) upon execution of this Agreement.

 

3.2                                 Research Funding.

 

3.2.1                        Pfizer shall
fund the research to be performed by Isis, pursuant to the Research Plan, by
making payments upon initiation of the following activities:

 

(a)                                  [***]: $[***]

 

(b)                                 [***]: $[***]

 

(c)                                  [***]: $[***]

 

(d)                                 [***]: $[***]

 

3.2.2                        Pfizer may
further elect to fund certain research activities to be performed by Isis,
pursuant to the Research Plan, by providing written notice to Isis at least [***] ([***]) days in
advance of the desired initiation of the research.  Pfizer shall fund the elected research upon
initiation of the following activities:

 

(a)                                  [***]: $[***]

 

(b)                                 [***]: $[***]

 

(c)                                  [***]: $[***]

 

3.2.3                        Pfizer may
elect to fund research activities to be performed by Isis pursuant to the
Research Plan in addition to those designated in Sections 3.2.1 and 3.2.2.  Upon request of the Research Committee, Isis
shall submit to Pfizer a written quotation of the work to be performed, based
upon Isis’ reasonable costs.  Pfizer may
elect to fund such research activity

 

6

 

by providing written notice
to Isis at least [***] ([***]) days in advance of the desired initiation of the
research.

 

3.2.4                        Pfizer may
elect to purchase from Isis a supply of ASOs for the conduct of preclinical
studies at a price, per single order, of (a) for the first gram (or
fraction thereof), [***] dollars ($[***]) and (b) for each additional gram, [***] dollars ($[***]) provided
that, for each additional gram, the price will be pro-rated for amounts less
than an entire gram.  Pfizer shall
provide written notice to Isis of its election to purchase a specified quantity
of ASOs.

 

3.3                                 Research Milestone Payments.  Pfizer shall make research
milestone payments to Isis upon achievement of certain events as described in
the Research Plan, according to the following schedule:

 

(a)                                  [***]: $[***]

 

(b)                                 [***]: $[***]

 

(c)                                  [***]: $[***]

 

(d)                                 [***]: $[***]

 

(e)                                  Notwithstanding any
determination that any milestone in Sections 3.3(a)-(c) have not been
successfully met for an ASO against an Exclusive Collaboration Gene Target, if [***], then [***] shall [***].

 

For any milestones achieved by Pfizer, within
[***] days of such achievement Pfizer
will provide Isis written notice of such achievement.

 

3.4                                 Research Payments for [***]
Substitution.  In the event
that Pfizer elects to substitute [***] pursuant to Section 2.4, Pfizer shall pay Isis (a) [***],[***]dollars ($[***]) and (b) [***],[***]dollars ($[***]).

 

3.5                                 US Funds. 
Each payment pursuant to this Agreement shall be paid by Pfizer in U.S.
currency by wire transfer in immediately available funds to an account
designated by Isis, or by other mutually acceptable means within [***] ([***]) days
after receipt and acceptance by Pfizer of the invoice from Isis.

 

3.6                                 Records. 
Isis will maintain all data and information that relate to supporting
Pfizer’s intellectual property position (including the disks and/or tapes upon
which such data is stored, and laboratory notebooks, documents, reports and
other material(s) prepared by Isis or its

 

7

 

agents) in confidential storage for a period of [***] ([***]) years
following the earlier of the expiration or termination of this Agreement.

 

4.                                      Treatment of Confidential
Information.

 

4.1                                 Confidentiality.

 

(a)                                  Subject to permitted disclosure under
Sections 4.1(c) and 4.5 and the obligations set forth in Section 4.3
and the publication rights set forth in Section 4.2, Pfizer and Isis each
agree that, during the term of this Agreement and for [***] thereafter,
it will keep confidential all Isis Confidential Information or Pfizer
Confidential Information, as the case may be, that is disclosed to it, or to
any of its Affiliates, pursuant to this Agreement.  Subject to Section 11, Program
Technology and Program Know-how shall be deemed Pfizer Confidential
Information.

 

(b)                                 Neither Pfizer nor Isis shall use the
other’s Confidential Information except as expressly permitted in this
Agreement.

 

(c)                                  Pfizer and Isis each agree that any
disclosure of the other’s Confidential Information to any of its officers,
employees, agents or Affiliates shall be made only if and to the extent
necessary to carry out its responsibilities under this Agreement and shall be
limited to the maximum extent possible consistent with such
responsibilities.  Pfizer and Isis each
agree not to disclose the other’s Confidential Information to any individual
entity or party for whom disclosure is not expressly permitted under this Section under
any circumstance without written permission from the other party.  Each party shall take such action to preserve
the confidentiality of each other’s Confidential Information as it would
customarily take to preserve the confidentiality of its own Confidential
Information.  Each party, upon the other’s
request, will return all the Confidential Information disclosed to the other
party pursuant to this Agreement, including all copies and extracts of
documents, within sixty (60) days of the request upon the termination of this
Agreement except for one (1) copy which may be kept for the purpose of
complying with continuing obligations under this Agreement.

 

(d)                                 Isis and Pfizer each represent that all
of its employees, Affiliates, agents, and any consultants to such party, who
shall have access to [***], Isis
Technology, Isis Know-how, Isis Manufacturing Technology, Isis Manufacturing
Know-how, [***], Isis Licensed Technology,
Program Technology, Program Know-how, Pfizer Confidential Information or Isis

 

8

 

Confidential Information are bound by agreement to
maintain such information in confidence and to use such information only as
expressly permitted in this Agreement.

 

4.2                                 Publication. 
Notwithstanding any matter set forth in this Agreement to the contrary,
results obtained in the course of the Research Program may be submitted for
publication following scientific review by the Research Committee and
subsequent written approval by both parties.

 

4.3                                 Publicity. 
The press release announcing the signing of the transaction contemplated
by this Agreement is attached as Exhibit J hereto and shall be promptly
disseminated by Isis following signing by both parties.  Except as required by law or permitted in
this Agreement, neither party may disclose the terms of this Agreement nor the
research described in it without the prior written consent of the other party.

 

4.4                                 Disclosure of Inventions. 
Each party shall promptly inform the other in writing about all
inventions that are conceived, made or developed in the course of carrying out
the Research Program by employees of, or consultants to, either of them solely,
or jointly with employees of, or consultants to, the other.

 

4.5                                 Permitted Disclosure.  If either party is requested
to disclose the other’s Confidential Information in connection with a legal or
administrative proceeding or is otherwise required by law to disclose the other’s
Confidential Information, such party will give the other party prompt written
notice of such request.  The party whose
Confidential Information is to be disclosed may seek and pay for an appropriate
protective order or other remedy or waive compliance with the provisions of
this Agreement.  If such party seeks a
protective order or other remedy, the other party will cooperate.  If such party fails to obtain a protective
order or waive compliance with the relevant provisions of this Agreement, the
other party will disclose only that portion of such party’s Confidential
Information which its legal counsel determines it is required to disclose.  The parties agree that Isis will have the
right to disclose the information required [***].

 

5.                                      Intellectual Property Rights. 
The following provisions relate to rights in the intellectual property
developed by Isis, Pfizer, or both in performance of the Research Program.

 

5.1                                 Ownership. 
All Isis Confidential Information, Isis Technology, Isis Know-how, Isis
Manufacturing Technology, Isis Manufacturing Know-how, [***],
Isis Technology Patent

 

9

 

Rights, Isis Manufacturing Patent Rights, and [***] shall be owned by Isis.  All Pfizer Confidential Information and [***] shall be owned by Pfizer.  Subject to Section 11, all Program
Technology, Program Know-how, and Program Technology Patent Rights shall be
owned by Pfizer.

 

5.2                                 Grants of Research Licenses.

 

(a)                                  Isis Research License. 
Isis grants to Pfizer and its agents a non-exclusive, non-transferable,
irrevocable, worldwide, royalty-free, perpetual license, to make and use [***]for all research purposes.  Isis grants to Pfizer and its agents a
non-exclusive, non-transferable, worldwide, royalty free license to make and
use [***] under Isis’ interests in [***], to perform Pfizer’s obligations under this Agreement.

 

(b)                                 Pfizer Research License. 
Pfizer grants to Isis and its agents a nonexclusive, non-transferable,
irrevocable, worldwide, royalty-free, perpetual license, to make and use [***]for all research purposes under Pfizer’s interest in [***].

 

(c)                                  For clarity, this Section 5.2 does
not grant either party or its agents any right to make and use the other’s
Confidential Information, [***] in the
sale or manufacture for sale of products or processes.  No additional rights are granted to agents of
either party, except as expressly provided for herein.

 

5.3                                 Assignment of [***]. 
So long as [***], upon
Pfizer’s written request but subject to Section 11, Isis will assign [***] to Pfizer.  Upon
assignment, [***] shall be deemed Program
Technology, and [***] shall be deemed Program
Technology Patent Rights.

 

6.                                      Provisions Concerning the Filing,
Prosecution and Maintenance of Patent Rights.  Subject to Section 11
of this Agreement, the following provisions relate to the filing, prosecution
and maintenance (and the cost thereof) of Program Technology Patent Rights and [***] during the term of this Agreement:

 

6.1                                 Filing, Prosecution and
Maintenance by Isis.  With respect to [***],
until the assignment described in Section 5.3, Isis shall have the
exclusive right and (so long as [***])
obligation:

 

(a)                                  to file applications for letters patent
on any invention deemed patentable included in such Patent Rights; provided,
however, that Isis shall consult with Pfizer regarding countries in which such
patent applications should be filed and shall file patent applications in

 

10

 

those countries where Pfizer requests that Isis file
such applications; and, further provided, that Isis, at its option and
exercise, may file in countries where Pfizer does not request that Isis file
such applications;

 

(b)                                 to take all reasonable steps to prosecute
all pending and new patent applications included within such Patent Rights;

 

(c)                                  to respond to oppositions, nullity
actions, re-examinations, revocation actions and similar proceedings filed by
third parties against the grant of letters patent for such applications; and

 

(d)                                 to maintain in force any letters patent
included in such Patent Rights by duly filing all necessary papers and paying
any fees required by the patent laws of the particular country in which such
letters patent were granted.

 

6.2                                 Filing, Prosecution and
Maintenance by Pfizer.  With respect to Program
Technology, Pfizer (using in-house or outside counsel, at its discretion) shall
have the exclusive right and obligation:

 

(a)                                  to file applications for letters patent
on any invention deemed patentable included in the Program Technology; provided,
however, that Pfizer shall consult with Isis as to the countries in which such
patent applications should be filed;

 

(b)                                 to take all reasonable steps to prosecute
all pending and new patent applications included within Program Technology
Patent Rights;

 

(c)                                  to respond to oppositions, nullity
actions, re-examinations, revocation actions and similar proceedings filed by
third parties against the grant of letters patent for such applications;

 

(d)                                 to maintain in force any letters patent
included in Program Technology Patent Rights by duly filing all necessary
papers and paying any fees required by the patent laws of the particular
country in which such letters patent were granted; and Isis shall cooperate
fully with, and take all necessary actions requested by, Pfizer in connection
with the preparation, prosecution and maintenance of any letters patent included
in Program Technology Patent Rights. 
Pfizer will reimburse Isis for reasonable expenses incurred for
personnel travel and time spent out of office in connection with the foregoing.

 

(e)                                  If Pfizer does not wish to exercise its
right to file any application for letters patent on patentable inventions
relating to the Program Technology, then Pfizer shall

 

11

 

provide Isis adequate written notice prior to any
deadline with the U.S. Patent and Trademark Office or patent office of the [***] or [***], and Isis
will have the right to prepare and file such application(s) at its sole
expense.  Isis will solely own all
related patent applications and letters patent issuing therefrom and grant
Pfizer a nonexclusive, non-transferable, irrevocable, worldwide, royalty-free,
perpetual research license under its rights to such patent applications and
letters patent.

 

(f)                                    Pfizer shall notify Isis in a timely
manner of any decision to abandon a pending application or an issued patent
included in Program Technology Patent Rights. 
Thereafter, Isis shall have the option, at its expense, of continuing to
prosecute any such pending patent application or of keeping the issued patent
in force.  Isis will own all related
patent applications and letters patent issuing therefrom and grant Pfizer a
nonexclusive, non-transferable, irrevocable, worldwide, royalty-free, perpetual
research license under its rights to such patent applications and letters
patent.

 

6.3                                 Copies of Documents.  
Prior to filing, Isis shall provide to Pfizer copies of all patent
applications that pursuant to Section 6.1 of this Agreement, Isis is
obligated to file, prosecute and maintain, for the purpose of obtaining
substantive comment of Pfizer’s patent counsel. 
Each party (the “Prosecuting Party”) shall provide to the other party
every twelve (12) months a report detailing the status of all patent
applications for which the Prosecuting Party is, under Section 6.1 or Section 6.2
of this Agreement, obligated to file, prosecute and maintain.  Pfizer will have final authority on matters
relating to patent applications and patents for which Pfizer will assume
filing, prosecution and maintenance costs.

 

6.4                                 Reimbursement of Costs for
Filing, Prosecuting and Maintaining Patent Rights. 
At least ninety (90) days prior to a patent filing deadline, Pfizer will
notify Isis in writing of those countries in which Pfizer requests the [***]be filed, prosecuted and maintained.  Within [***] ([***]) days of receipt of invoices from Isis, Pfizer shall
reimburse Isis for all the costs of filing, prosecuting, responding to
opposition and maintaining the [***]in
countries where Pfizer requests that the [***] be filed,
prosecuted and/or maintained, including costs incurred prior to the Effective
Date.  Such reimbursement shall be in
addition to payments under Section 3. 
However, Pfizer may, upon [***] ([***]) days notice, request that Isis discontinue the
filing, prosecution or maintenance of the Isis [***]
in any country and discontinue reimbursing Isis for the costs of filing,
prosecuting, responding to opposition or maintaining the [***]
in such

 

12

 

country.  Isis
shall pay all costs in those countries in which Pfizer does not request that
Isis file, prosecute or maintain the [***], but in
which Isis, at its option, elects to do so.

 

6.5                                 After the assignment described in Section 5.3,
Pfizer shall have the right to file on behalf of and as an agent for Isis all
applications and take all actions necessary to obtain patent extensions
pursuant to 35 U.S.C. Section 156 and foreign counterparts for Patent
Rights assigned under Section 5.3. 
Isis agrees to sign, at Pfizer’s expense, such further documents and
take such further actions as may be requested by Pfizer in this regard.

 

6.6                                 Neither party may disclaim a Valid Claim
within Program Technology Patent Rights without the consent of the other.

 

6.7                                 Bankruptcy. 
All rights and licenses granted under or pursuant to any section of
this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n)
of the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as
defined under Section 101(35A) of the U.S. Bankruptcy Code.  The parties shall retain and may fully exercise
all of their respective rights and elections under the U.S. Bankruptcy
Code.  The parties agree that a party
that is a licensee of such rights under this Agreement shall retain and may
fully exercise all of its rights and elections under the U.S. Bankruptcy Code,
and that upon commencement of a bankruptcy proceeding by or against the
licensing party (such party, the “Involved Party”) under the U.S. Bankruptcy
Code, the other party (such party, the “Noninvolved Party”) shall be entitled
to a complete duplicate of or complete access to (as such Noninvolved Party
deems appropriate), any such intellectual property and all embodiments of such
intellectual property, provided the Noninvolved Party continues to fulfill its
payment or royalty obligations as specified herein in full.  Such intellectual property and all
embodiments thereof shall be promptly delivered to the Noninvolved Party (a) upon
any such commencement of a bankruptcy proceeding upon written request therefore
by the Noninvolved Party, unless the Involved Party elects to continue to
perform all of its obligations under this Agreement or (b) if not
delivered under (a) above, upon the rejection of this Agreement by or on
behalf of the Involved Party upon written request therefor by the Noninvolved
Party.  The foregoing is without
prejudice to any rights the Noninvolved Party may have arising under the U.S.
Bankruptcy Code or other applicable law.

 

7.                                      Acquisition of Rights from Third
Parties.  During the Contract Period, Isis and Pfizer
will each promptly notify each other of any and all opportunities to acquire in
any manner from

 

13

 

third parties, technology or patents or information
which may be useful in or may relate to the Research Program.  In the event Pfizer elects to license any
such technology, patents or information (which election shall be in Pfizer’s
sole and absolute discretion), Pfizer will be responsible for such licenses
(and payments thereunder).   Isis is
responsible for payments (if any) to maintain Isis’ license to Isis Licensed
Technology, until the respective expiration of the [***].  In the event Isis has acquired rights from a
third party to any technology that Pfizer deems necessary or useful to the
Research Program, Isis and Pfizer shall negotiate in good faith regarding a
license to such technology on commercially reasonable terms, provided that Isis
has the ability to grant such a license without violating the terms of any
agreement or arrangement with such third party.

 

8.                                      Other Agreements. 
Concurrently with the execution of this Agreement, Isis and Pfizer shall
enter into the License Agreement appended to this Agreement as Exhibit H.  This Agreement and the License Agreement are
the sole agreements with respect to the subject matter and supersede all other
agreements and understandings between the parties with respect to same.

 

9.                                      Term, Termination and
Disengagement.

 

9.1                                 Term. 
Unless sooner terminated or extended, this Agreement shall expire [***] from the Effective Date.

 

9.2                                 Events of Termination. 
The following events shall constitute events of termination (“Events of
Termination”):

 

(a)                                  Any material written representation or
warranty by Isis or Pfizer made under or in connection with this Agreement
shall prove to have been incorrect in any material respect when made.

 

(b)                                 Isis or Pfizer shall fail in any material
respect to perform or observe any material term, covenant or understanding
contained in this Agreement or the License Agreement, and any such failure
shall remain un-remedied for thirty (30) days after written notice to the
failing party.

 

(c)                                  If upon completion of the activities
detailed in [***], Pfizer may terminate this
Agreement at any time thereafter.

 

14

 

(d)                                 At any time, Pfizer may terminate this
Agreement without cause upon [***] written
notice to Isis.

 

(e)                                  In the event that [***],
Pfizer will have the right at any time thereafter to terminate this Agreement
upon [***] written notice to Isis.

 

9.3                                 Termination.

 

(a)                                  Upon the occurrence of any Event of
Termination described in Section 9.2(a) or 9.2(b), the party not
responsible may, by written notice to the other party, terminate this
Agreement.

 

(b)                                 If either party terminates this Agreement
pursuant to Section 9.3(a) or upon expiration of this Agreement
pursuant to Section 9.1, the License Agreement shall continue according to
its terms.

 

9.4                                 Termination of this Agreement in
accordance with Sections 9.2(c), 9.2(d), 9.2(e), or 9.3(a) will not
terminate the license granted pursuant to the first sentence of Section 5.2(a) or
the license granted pursuant to Section 5.2(b).

 

9.5                                 Termination of this Agreement for any
reason shall be without prejudice to:

 

(a)                                  the rights and obligations of the parties
set forth in any sections which provide by their terms for performance by
either party subsequent to termination;

 

(b)                                 Isis’ right to receive all payments
accrued under Section 3 and Section 6.4; or

 

(c)                                  any other remedies which either party may
otherwise have.

 

9.6                                 In the event that Pfizer terminates this
Agreement pursuant to Section 9.2(d), [***].

 

9.7                                 In the event that Pfizer terminates this
Agreement pursuant to Section 9.2(e), subject to the payment obligations
set forth in Section 3.3 (which section, as well as Section 3.5, will
survive such termination), Isis grants to Pfizer and its agents a
non-exclusive, non-transferable, worldwide, royalty free license to make and
use Isis Technology, Isis Licensed Technology, Isis Know-how, and [***]under Isis’ interests in Isis Technology Patent Rights,
[***], and Isis Licensed Technology
Patent Rights, to perform research on and development of the ASOs discovered or
developed by Isis in the course of the Research Program prior to the
termination of the Agreement.

 

15

 

10.                               Loss of Target
Exclusivity.

 

10.1                           Section 2.3 will terminate and be of
no further force or effect upon the occurrence of the earliest of any the
following events:

 

(a)                                  Upon termination of this Agreement by
Pfizer pursuant to Section 9.2(c) or 9.2(d),

 

(b)                                 Upon termination of this Agreement by
Isis pursuant to Section 9.3(a) or Section 10.3 of the License
Agreement,

 

(c)                                  Upon expiration of the License Agreement,

 

(d)                                 Upon termination of the License Agreement
by Pfizer pursuant to Section 10.2(c) of the License Agreement.

 

10.2                           Upon termination of Section 2.3 or
substitution of [***], Isis has the right to
conduct research itself or sponsor any other research on the Exclusive
Collaboration Gene Targets or removed [***], as
applicable, or engage in any research sponsored by any third party on the [***], as applicable, without Pfizer’s consent.

 

10.3                           Pfizer may elect to designate any
Exclusive Collaboration Gene Target as no longer subject to Section 2.3 by
written notice to Isis.  Such Exclusive
Collaboration Gene Targets will no longer be subject to Section 2.3 upon
the date of written notice by Pfizer.

 

11.                               Right of Reversion.

 

11.1                           All Patent Rights claiming the
pharmaceutical composition and/or use of ASOs and/or Products may transfer and
revert to Isis and upon the assignment described in Section 11.3, all
Program Technology and Program Know-how comprised of such pharmaceutical
composition and/or use of ASOs and/or Products shall be deemed Isis
Confidential Information, upon the earliest occurrence of any of the following
events (“Reversion Trigger Events”):

 

(a)                                  Upon termination of this Agreement by
Pfizer pursuant to Section 9.2(c) or 9.2(d),

 

(b)                                 Upon termination of this Agreement by
Isis pursuant to Section 9.3(a),

 

(c)                                  Upon termination of the License Agreement
by Pfizer pursuant to Section 10.2(c) of the License Agreement.

 

16

 

(d)                                 In addition, upon the substitution of [***]pursuant to Section 2.4, all Patent Rights
claiming the pharmaceutical composition and/or use of ASOs and/or Products [***] may transfer and revert to Isis, and upon the
assignment described in Section 11.3, all Program Technology and Program
Know-how comprised of such pharmaceutical composition and/or use of ASOs and/or
Products [***]shall be deemed Isis Confidential
Information.

 

(e)                                  At any time after the [***], upon Isis’ election by written notice to Pfizer,
Pfizer shall promptly assign all Patent Rights claiming the pharmaceutical
composition and/or use of ASOs and/or Products [***]to
Isis, and upon the assignment described in Section 11.3, all Program
Technology and Program Know-how comprised of such pharmaceutical composition
and/or use of ASOs and/or Products [***] shall be
deemed Isis Confidential Information.

 

11.2                           Isis must provide written notice to
Pfizer within [***] ([***])
days of any Reversion Trigger Event to inform Pfizer of its election to
exercise the right of reversion.

 

11.3                           Upon receipt of written notice by Isis to
exercise its right of reversion, Pfizer shall promptly assign all Patent Rights
claiming the pharmaceutical composition and/or use of ASOs and/or Products to
Isis and thereafter Isis will have the exclusive right, but not the obligation,
to prepare, file, prosecute, maintain and/or defend such Patent Rights.

 

11.4                           Upon Pfizer’s assignment of any Patent
Rights claiming the pharmaceutical composition and/or use of ASOs and/or
Products to Isis and any transfer or reversion of Program Know-how to Isis,
Isis will grant Pfizer and its agents a non-exclusive, non-transferable,
irrevocable, worldwide, royalty-free, perpetual license, to make and use such
Patent Rights and Program Know-how for all research purposes.

 

11.5                           Upon receipt of Isis’ election to
exercise its right of reversion, Pfizer shall promptly make available to and
transfer one copy or assign to Isis the following: [***].  Both parties shall have the right to use such
information as they see fit in the research, development and commercialization
of products.  [***].  Pfizer will also
participate in a technical transfer meeting of no more than two days duration
between the appropriate technical teams at Isis and Pfizer.  Isis shall indemnify and hold Pfizer (and all
officers, directors, employees, and agents of Pfizer) harmless for any and all
damages, settlements, costs, legal fees and other expenses incurred in
connection with a claim by a third party based on any action or omission of
Isis, its agents, employees, or officers, related to or with regard to any use of
such information or Isis’

 

17

 

development and commercialization of Products.  Pfizer shall have no liability whatsoever for
any inaccuracy or incompleteness in such information.

 

11.6                           [***].

 

12.                               Representations and Warranties. 
Isis and Pfizer each represents and warrants as follows:

 

12.1                           It is a corporation duly organized,
validly existing and is in good standing under the laws of the State of
Delaware, is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the conduct of its business or the
ownership of its properties requires such qualification and has all requisite
power and authority, corporate or otherwise, to conduct its business as now
being conducted, to own, lease and operate its properties and to execute,
deliver and perform this Agreement.

 

12.2                           The execution, delivery and performance
by it of this Agreement has been duly authorized by all necessary corporate
action and do not and will not (a) require any consent or approval of its
stockholders, (b) violate any provision of any law, rule, regulations,
order, writ, judgment, injunction, decree, determination award presently in
effect having applicability to it or any provision of its certificate of
incorporation or by-laws or (c) result in a breach of or constitute a
default under any material agreement, mortgage, lease, license, permit or other
instrument or obligation to which it is a party or by which it or its
properties may be bound or affected.

 

12.3                           This Agreement is a legal, valid and
binding obligation of it enforceable against it in accordance with its terms
and conditions, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws, from time
to time in effect, affecting creditor’s rights generally.

 

12.4                           It is not under any obligation to any
person, or entity, contractual or otherwise, that is conflicting or
inconsistent in any respect with the terms of this Agreement or that would
impede the diligent and complete fulfillment of its obligations hereunder.

 

12.5                           It has good and marketable title to or
valid leases or licenses for, all of its properties, rights and assets
necessary for the fulfillment of its responsibilities under the Research
Program, subject to no claim of any third party other than the relevant lessors
or licensors.

 

18

 

12.6                           Isis represents and warrants to Pfizer
that:

 

(a)                                  to its knowledge, as of the Effective
Date, the issued Isis Technology Patent Rights and Isis Manufacturing
Technology Patent Rights are valid and enforceable patents;

 

(b)                                 to its knowledge, as of the Effective
Date, the Isis Technology Patent Rights and Isis Manufacturing Technology
Patent Rights are not subject to any pending re-examination, opposition,
interference or litigation proceedings;

 

(c)                                  as of the Effective Date, it has license
rights to the Isis Licensed Technology Patent Rights;

 

(d)                                 to its knowledge, as of the Effective
Date, no additional third-party licenses (other than the Isis Licensed
Technology) are required to practice Isis Technology and Isis Manufacturing
Technology to discover, develop, commercialize and manufacture Products, except
licenses that may be required related directly to the Exclusive Collaboration
Gene Target down-regulated by a Product; and

 

(e)                                  it has the right to grant the licenses
granted and to convey the benefits of the covenants pursuant to this
Agreement.  Isis represents and warrants
that the licenses so granted do not conflict with or violate the terms of any
agreement between Isis and any third party.

 

13.                               Covenants of Isis and Pfizer
Other Than Reporting Requirements.  Throughout
the Contract Period, Isis and Pfizer each shall:

 

(a)                                  maintain and preserve its corporate
existence, rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified as a foreign corporation in
good standing in each jurisdiction in which such qualification is from time to
time necessary or desirable in view of their business and operations or the
ownership of their properties.

 

(b)                                 comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
government authority to the extent necessary to conduct the Research Program.

 

19

 

14.                               Indemnification. 
Pfizer and Isis will indemnify, defend and hold each other harmless for
any and all damages, settlements, costs, legal fees and other expenses incurred
in connection with a claim by a third party against either party based on any
action or omission of the indemnifying party’s agents, employees, or officers
related to its obligations under this Agreement; provided, however, that the
foregoing shall not apply (i) if the claim is found to be based upon the
negligence, recklessness or willful misconduct of the party seeking
indemnification; or (ii) if such party fails to give the other party
prompt notice of any claim it receives and such failure materially prejudices
the other party with respect to any claim or action to which its obligation
pursuant to this Section 14 applies. 
Further, Pfizer will indemnify, defend and hold Isis (and all officers,
employees, consultants, directors, agents and Affiliates of Isis) harmless for
any and all damages, settlements, costs, legal fees and other expenses incurred
in connection with a claim by a third party against Isis based on the use by
Isis of the Exclusive Collaboration Gene Targets or the [***]in
accordance with the Research Plan.  The
indemnifying party, in its sole discretion, shall choose legal counsel, shall
control the defense of such claim or action and shall have the right to settle
same on such terms and conditions it deems advisable; provided, however,
that any settlement includes, as an unconditional term thereof, a full release
of the indemnified party from all liability with respect to such claim.  Pfizer and Isis at all times reserve the
right to retain counsel of its own to defend their respective interests.

 

15.                               Notices.  All notices shall be deemed given as of the
date received.  All notices shall be made
in writing, and mailed via certified mail, return receipt requested, courier,
or facsimile transmission addressed as follows, or to such other address as may
be designated from time to time:

 

	
  If to Pfizer:

  	
   

  	
  Pfizer Global R&D Headquarters

  
	
   

  	
   

  	
  50 Pequot Avenue

  
	
   

  	
   

  	
  New London, CT 06320

  
	
   

  	
   

  	
  Attn.: Executive Vice President, PGRD

  
	
   

  	
   

  	
  with copy to: General Counsel, PGRD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Invoices should be sent to the following
  address:

  

 

20

 

	
   

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  

 

	
  If to Isis:

  	
   

  	
  Isis Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  1896 Rutherford Road

  
	
   

  	
   

  	
  Carlsbad, CA 92008

  
	
   

  	
   

  	
  Attn: Executive Vice President

  
	
   

  	
   

  	
  With copy to: Vice-President, Legal

  

 

16.                               Governing Law. 
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.

 

17.                               Miscellaneous.

 

17.1                           Binding Effect. 
This Agreement shall be binding upon and inure to the benefit of the
parties and their respective legal representatives, successors and permitted
assigns.

 

17.2                           Headings. 
Paragraph headings are inserted for convenience of reference only and do
not form a part of this Agreement.

 

17.3                           Counterparts. 
This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original.  Signatures may be transmitted via facsimile;
thereby constituting the valid signature and delivery of this Agreement.

 

17.4                           Amendment; Waiver. 
This Agreement may be amended, modified, superseded or canceled, and any
of the terms may be waived, only by a written instrument executed by each party
or, in the case of waiver, by the party or parties waiving compliance.  The delay or failure of any party at any time
or times to require performance of any provisions shall in no manner affect the
rights at a later time to enforce the same. 
No waiver by any party of any condition or of the breach of any term
contained in this Agreement, whether by conduct, or otherwise, in any

 

21

 

one or more instances, shall be deemed to be, or
considered as, a further or continuing waiver of any such condition or of the
breach of such term or any other term of this Agreement.

 

17.5                           No Third Party Beneficiaries. 
No third party including any employee of any party to this Agreement,
shall have or acquire any rights by reason of this Agreement.  Nothing contained in this Agreement shall be
deemed to constitute the parties as partners with each other or any third
party.

 

17.6                           Assignment and Successors. 
This Agreement may not be assigned by either party, except that each
party may assign this Agreement and the rights and interests of such party, in
whole or in part, to any of its Affiliates, any purchaser of all or
substantially all of its assets or outstanding stock or to any successor
company resulting from any merger or consolidation of such party with or into
such corporation; provided, however, that no Pfizer Confidential Information
may be disclosed to any Isis acquirer or successor company as a result of a
merger or consolidation involving Isis without Pfizer’s prior written
consent.  Isis may assign its right to
payment hereunder.

 

17.7                           Force Majeure. 
Neither Pfizer nor Isis shall be liable for failure of or delay in
performing obligations set forth in this Agreement, and neither shall be deemed
in breach of its obligations, if such failure or delay is due to natural
disasters or any causes reasonably beyond the control of Pfizer or Isis.

 

17.8                           Severability. 
If any provision of this Agreement is or becomes invalid or is ruled
invalid by any court of competent jurisdiction or is deemed unenforceable, it
is the intention of the parties that the remainder of the Agreement shall not
be affected so long as the essential benefits of this Agreement remains
enforceable and obtainable.

 

17.9                           Survival of Terms.  In the event this Agreement expires or is
terminated, certain terms that by their nature are intended to survive the
expiration or termination of this Agreement, including but not limited to
Sections 2.3, 2.8.3, 3.6, 4, 5.2, 9.5, 9.6 (and, by reference, Sections 3.2.1
and 3.5), 9.7 (and, by reference, Sections 3.3 and 3.5), 10, 11, 14, 15, 16 and
17, shall survive and remain in full force until expiration or termination by
their respective terms.

 

22

 

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

 

 

	
  Pfizer Inc

  	
  Isis Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John L. LaMattina

  	
   

  	
  By:

  	
  /s/ B. Lynne Parshall

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  President, PGRD

  	
   

  	
  Title:

  	
  Executive Vice President & CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  05/23/05

  	
   

  	
  Date:

  	
  05/23/05

  	
   

  
									

 

23

 

	
  Exhibit List

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Exhibit A

  	
   

  	
  Definitions

  
	
  Exhibit B

  	
   

  	
  Exclusive Collaboration Gene Targets

  
	
  Exhibit C

  	
   

  	
  [***]

  
	
  Exhibit D

  	
   

  	
  [***]

  
	
  Exhibit E

  	
   

  	
  Isis Licensed Technology Patent Rights

  
	
  Exhibit F

  	
   

  	
  Isis Manufacturing Technology Patent Rights

  
	
  Exhibit G

  	
   

  	
  Isis Technology Patent Rights

  
	
  Exhibit H

  	
   

  	
  License Agreement

  
	
  Exhibit I

  	
   

  	
  Research Plan

  
	
  Exhibit J

  	
   

  	
  Press Release

  

 

 

Exhibit A

 

DEFINITIONS

 

1.1                                 “Affiliate”
means any corporation or other legal entity owning, directly or indirectly,
fifty percent (50%) or more of the voting capital shares or similar voting
securities of Pfizer or Isis; any corporation or other legal entity fifty
percent (50%) or more of the voting capital shares or similar voting rights of
which is owned, directly or indirectly, by Pfizer or Isis; or any corporation
or other legal entity fifty percent (50%) or more of the voting capital shares
or similar voting rights of which is owned, directly or indirectly, by a
corporation or other legal entity which owns, directly or indirectly, fifty
percent (50%) or more of the voting capital shares or similar voting securities
of Pfizer or Isis.

 

1.2                                 “Area”
means research or development with respect to Products to inhibit expression of
Exclusive Collaboration Gene Targets.

 

1.3                                 “ASO”
means a non-self-complementary single-stranded oligonucleotide or analog
thereof having a specific sequence that inhibits protein synthesis at the
nucleic acid level by specifically binding to the sequence of a messenger or
viral ribonucleic acid (RNA) by base-pairing, thus causing selective inhibition
of gene expression, that (i) hybridizes to an Exclusive Collaboration Gene
Target mRNA using [***] and (ii) down
regulates an Exclusive Collaboration Gene Target utilizing [***] mechanism.

 

1.4                                 “Commercially
Reasonable Efforts” means those efforts and resources that Pfizer would use
were it developing or commercializing its own pharmaceutical products that are
of similar market potential as the Licensed Products, taking into account
product labeling, present and future market potential, past performance,
financial return, present and future regulatory environment and competitive
market conditions, all as measured by the facts and circumstances at the time
such efforts are due.

 

1.5                                 “Commitment Year” means a twelve-month period commencing
on the Effective Date and each anniversary of the Effective Date during the
Contract Period.

 

1.6                                 “Confidential Information” means Isis Confidential Information
and/or Pfizer Confidential Information, as the case may be.

 

1.7                                 “Contract Period” means the period beginning on the
Effective Date and ending on the date on which the Research Agreement
terminates or expires.

 

1.8                                 “[***]” means [***].

 

A-1

 

1.9                                 “Effective Date” means May 24, 2005.

 

1.10                           “[***]” means [***],[***] corporation.

 

1.11                           “Exclusive Collaboration Gene
Target” means a target accepted by both parties to be
introduced into the Research Plan.  The
Exclusive Collaboration Gene Targets accepted by both parties upon initiation
of the Research Program are listed in Exhibit B to the Research Agreement.

 

1.12                           “[***]” means [***].

 

1.13                           “Isis Confidential Information” means all information which is disclosed
by Isis to Pfizer and designated “Confidential” in writing by Isis at the time
of disclosure to Pfizer to the extent that such information is not (i) as
of the date of disclosure to Pfizer, known to Pfizer other than by virtue of a
prior confidential disclosure to Pfizer by Isis; or (ii) disclosed in
published literature, or otherwise generally known to the public through no
fault or omission of Pfizer; or (iii) obtained by Pfizer from a third
party free from any obligation of confidentiality to Isis.

 

1.14                           “[***]” means [***].

 

1.15                           “[***]” means all
Patent Rights that claim [***] listed in Exhibit D to the Research Agreement.

 

1.16                           “Isis Know-how” means Know-how introduced into the
Research Program by Isis.

 

1.17                           “Isis Licensed Technology” means the
Technology acquired by Isis [***].

 

1.18                           “Isis Licensed Technology Patent
Rights” means all Patent Rights that claim Isis Licensed Technology listed in Exhibit E
to the Research Agreement.

 

1.19                           “Isis Manufacturing Know-how” means [***].

 

1.20                           “Isis Manufacturing Technology” means [***].

 

1.21                           “Isis Manufacturing Technology
Patent Rights” means Patent Rights controlled by Isis listed in Exhibit F
to the Research Agreement that claim Isis Manufacturing Technology.

 

1.22                           “Isis Technology” means
Technology [***].

 

1.23                           “Isis Technology Patent Rights” means all
Patent Rights that claim [***] listed in Exhibit G to the Research Agreement.

 

1.24                           “Know-how” means know-how, expertise, and trade
secrets that are held in confidence by either party.

 

A-2

 

1.25                           “License Agreement” means the
License and Royalty Agreement entered into by Pfizer and Isis and attached to the Research Agreement as Exhibit H.

 

1.26                           “Licensed Product” means any
Product the manufacture, use, sale, offer for sale or import of which, but for
the grant of licenses in the Research Agreement or License Agreement and
without regard to inventorship, would infringe any Valid Claim within Program
Technology Patent Rights, Isis Technology Patent Rights, Isis Licensed
Technology Patent Rights or [***].

 

1.27                           “Net Sales” means with respect to a Licensed Product, gross
sales of Pfizer (including its Affiliates) and its licensees of such Licensed Product to parties that are not Affiliates
(unless such Affiliate is the ultimate end-user of such Licensed Product), less
(i) bad debts related to such Licensed Product and (ii) sales returns
and allowances, including, without limitation, trade, quantity and cash
discounts and any other reductions, including, but not limited to, granted on
account of price reductions, billing errors, rejected goods, damaged or
defective goods, recalls, returns, rebates, chargeback rebates, reimbursements
or similar payments granted or given to wholesalers or other distributors,
buying groups, health care insurance carriers or other institutions, reductions
arising from consumer discount programs, including without limitation the
Pfizer ShareCard, customs or excise duties, sales tax, consumption tax, valued
added tax, and other taxes (except income taxes) or duties relating to sales,
any payment in respect of sales to any Governmental Authority in respect of any
government-subsidized program, [and freight and insurance (to the extent that
Pfizer bears the cost of freight and insurance for a Licensed Product)].  For
clarity, such sales shall not include units distributed for free (a) as
samples, (b) for use in clinical trials or (c) for humanitarian or
compassionate use.

 

1.28                           “Patent Rights” means all patent rights in and to
inventions including all the claims of patent applications and/or patents,
whether domestic or foreign, claiming such inventions, including all
continuations, continuations-in-part, divisions, and renewals, and letters of
patent granted thereon, and all reissues, re-examination and extensions
thereof.

 

1.29                           “Pfizer Confidential Information” means all information which is disclosed
by Pfizer to Isis and designated “Confidential” in writing by Pfizer at the
time of disclosure to Isis to the extent that such information is not (i) known,
as of the date of disclosure to Isis, other than by virtue of a prior
confidential disclosure to Isis by Pfizer; or (ii) disclosed in published

 

A-3

 

literature, or otherwise generally known to the public
through no fault or omission of Isis; or (iii) obtained by Isis from a
third party free from any obligation of confidentiality to Pfizer.

 

1.30                           “[***]” means [***].

 

1.31                           “Product” means any product for the treatment or
prevention of human health disease, comprising any single ASO, or combination
of non-complementary ASOs thereof, generated under the Research Plan.

 

1.32                           “Program Know-how” means Know-how that is or was developed by employees of or
consultants to Pfizer or Isis solely or jointly with each other in performance
of the Research Program.

 

1.33                           “Program Technology” means (a) Technology that is or was
developed by employees or agents of or consultants to Pfizer or Isis solely or
jointly with each other in performance of the Research Program and, (b) upon
the assignment described in Section 5.3 of the Research Agreement, [***].

 

1.34                           “Program Technology Patent Rights” means all
Patent Rights that claim Program Technology.

 

1.35                           “Research Agreement” means the Collaborative Research
Agreement between Pfizer and Isis
effective May 24, 2005.

 

1.36                           “Research Plan” means the written plan describing the research
in the Area to be carried out during each Commitment Year by Pfizer and Isis
pursuant to the Research Agreement.  Each
revision to the Research Plan will be attached to and made a part of the
Research Agreement as an amendment to Exhibit I to the Research Agreement.

 

1.37                           “Research Program” is the collaborative research program in
the Area conducted by Pfizer and Isis during the Contract Period pursuant to
the Research Plan.

 

1.38                           “Technology” means and includes all materials, technology,
and technical information covered by Patent Rights.

 

1.39                           “Valid Claim” means an unexpired issued claim
(including any extension pursuant to, inter alia, 35 U.S.C. 154(b) and 156
(the Patent Term Restoration Act)) within Patent Rights which has not been held
invalid or unenforceable by a final decision of a court or other governmental
agency of competent jurisdiction, unappealable or unappealed within the time
allowed for appeal, and which has not been admitted to be invalid or
unenforceable by the owner through reissue or disclaimer.  If there should be two or more such decisions
conflicting

 

A-4

 

with respect to the validity of the same claim the
decision of the higher or highest tribunal shall thereafter control; however,
should the tribunals be of equal dignity the decision or decisions holding the
claim invalid should prevail.

 

A-5

 

Exhibit B

 

Exclusive Collaboration Gene
Targets

 

[***]

 

B-1

 

Exhibit C

 

[***]

 

[***]

 

C-1

 

Exhibit D

 

[***]

 

[***]

 

D-1

 

Exhibit E

 

Isis Licensed Technology Patent
Rights

 

[***]

 

E-1

 

Exhibit F

 

Isis Manufacturing Technology
Patent Rights

 

[***]

 

F-1

 

Exhibit G

 

Isis Technology Patent Rights

 

[***]

 

G-1

 

Exhibit H

 

LICENSE AND ROYALTY AGREEMENT

 

This LICENSE AND ROYALTY AGREEMENT (“Agreement”) is
entered into as of May 24, 2005 (the “Effective Date”) by and between PFIZER INC and its Affiliates (“Pfizer”), a Delaware
corporation, having an office at 235 East 42nd Street, New York, New York 10017
and ISIS PHARMACEUTICALS, INC. (“Isis”),
a Delaware corporation, having an office at 1896 Rutherford Road, Carlsbad, CA
92008;

 

WHEREAS, Pfizer
desires to obtain an exclusive license under Isis’ right, title and interest in
the Isis Technology, Isis Technology Patent Rights, Isis Licensed Technology,
Isis Licensed Technology Patent Rights, [***], and [***], so that Pfizer can manufacture, use, sell, offer for
sale and import the Licensed Products; and

 

WHEREAS, Isis is willing to grant such license;

 

Therefore, in consideration of the mutual covenants and promises set
forth in this Agreement, the parties agree as follows:

 

1.                                      Definitions.  The
capitalized terms used in this Agreement, and not defined elsewhere in it,
shall have the meanings specified for such terms in Exhibit A of the
Research Agreement.

 

2.                                      Grant of Licenses, Term, Rights and Obligations.

 

2.1                                 Licenses
Granted to Pfizer.  Isis
hereby grants to Pfizer an exclusive, worldwide license, including the right to
grant sublicenses, to manufacture, use, sell, offer for sale and import
Licensed Products under all Isis’ right, title and interest in the Isis Technology
Patent Rights, [***], and Isis Licensed
Technology Patent Rights.  In addition,
Isis grants to Pfizer an exclusive, worldwide license, excluding the right to
grant sublicenses, to manufacture Licensed

 

H-1

 

Products under all Isis’ right, title and interest in the Isis
Manufacturing Technology, Isis Manufacturing Know-how, and Isis Manufacturing
Technology Patent Rights.  The licenses
granted are contingent upon Pfizer fulfilling its payment obligations to Isis
under Section 3.3 of the Research Agreement and Section 3 of this
Agreement and do not become effective until, with respect to each Licensed
Product, Pfizer has made the payment set forth in Section 3.3(d) of
the Research Agreement.

 

2.2                                 Assignment
of [***].  So long as [***], upon Pfizer’s written request but subject to Section 12,
Isis will assign [***] to Pfizer.  Upon assignment, [***] shall
be considered Program Technology, and [***] shall be
considered a part of Program Technology Patent Rights.

 

2.3                                 Term of Licenses.  The term of the licenses set forth in Section 2.1
shall commence on the Effective Date. 
The licenses granted in Section 2.1 to Pfizer under all Isis’
right, title and interest in Isis Technology Patent Rights, [***], and Isis Licensed Technology Patent Rights shall
terminate, on a country-by-country basis, upon the date of expiration of each
such Patent Right.

 

2.4                                 Paid-Up
License.  Upon the expiration
of each of Isis Technology Patent Rights, [***], and Isis
Licensed Technology Patent Rights, Pfizer shall have a paid-up, royalty-free
non-exclusive license to each such Patent Right.  If Pfizer desires to offer for sale Licensed
Products in countries in which the Royalty Payment Term set forth in Section 3.1.1
has expired and such Licensed Products are manufactured in a country in which
they are not covered by a Valid Claim in Program Technology Patent Rights, Isis
Technology Patent Rights, [***] or Isis
Licensed Technology Patent Rights, using a manufacturing process covered by a
Valid Claim in Isis Manufacturing Technology Patent Rights, Pfizer and Isis
shall negotiate in good faith regarding a license to such rights on
commercially reasonable terms.  [***].

 

2.5                                 [***].  [***], Pfizer
and Isis shall negotiate in good faith for a license to such technology on
commercially reasonable terms; provided, however, that Isis has the
ability to grant such license without violating the terms of any agreement or
other arrangement with any third party at the time such license is granted.

 

2.6                                 Pfizer
Obligations.

 

2.6.1                        Pfizer shall attempt to develop
and commercialize [***] using
Commercially Reasonable Efforts.  Pfizer
will have sole authority and discretion to make all decisions relating to the
development and commercialization (including termination) of Licensed

 

H-2

 

Products.

 

2.6.2                        If Pfizer grants a sublicense
pursuant to this Section 2, Pfizer shall guarantee that any sublicensee
fulfills all of Pfizer’s obligations under this Agreement; provided, however,
that Pfizer shall not be relieved of its obligations pursuant to this
Agreement.

 

2.7                                 Technical
Assistance.  Isis shall
provide to Pfizer or any sublicensee of Pfizer, at Pfizer’s request and
expense, during normal business hours and upon reasonable advance notice and
request, any technical assistance reasonably necessary to enable Pfizer or such
sub-licensee to manufacture, use, sell, offer for sale or import each Licensed
Product and to enjoy fully all the rights granted to Pfizer pursuant to this
Agreement; provided however, that Isis is reasonably capable of providing that
assistance and the terms upon which such assistance shall be provided are
mutually agreeable to Isis and Pfizer.

 

2.8                                 Research License.  Isis grants to Pfizer and its agents a
non-exclusive, non-transferable, irrevocable, worldwide, royalty-free,
perpetual license, to make and use Isis Know-how for all research
purposes.  Isis grants to Pfizer and its
agents a non-exclusive, non-transferable, worldwide, royalty free license to
make and use Isis Technology, Isis Know-how, Isis Licensed Technology, and [***] under Isis’ interests in Isis Technology Patent
Rights, Isis Know-how, [***], and Isis
Licensed Technology Patent Rights, to perform Pfizer’s obligations under this Agreement.

 

3.                                      Milestone Payments, Royalties, Accounting, Records.

 

3.1                                 Royalty Payment Term. 
Pfizer shall pay Isis a royalty based on the Net Sales of each Licensed
Product.

 

3.1.1                        In countries in which such
Licensed Product is covered by a Valid Claim in Program Technology Patent
Rights, Isis Technology Patent Rights, [***] or Isis
Licensed Technology Patent Rights, a royalty shall be paid with respect to each
such country from the date of first commercial sale (the date of the invoice of
Pfizer or any sublicense of Pfizer with respect to such sale) of such Licensed
Product in such country until the date on which such Licensed Product is no
longer covered by a Valid Claim in Program Technology Patent Rights, Isis
Technology Patent Rights, [***] or Isis
Licensed Technology Patent Rights in such country (“Royalty Payment Term”).

 

3.1.2                        If a Licensed Product is sold
in countries in which such Licensed Product is not

 

H-3

 

covered by a Valid Claim in Program Technology Patent Rights, Isis
Technology Patent Rights, [***] or Isis
Licensed Technology Patent Rights, and such Licensed Product is manufactured in
a country in which it is covered by a Valid Claim in Program Technology Patent
Rights, Isis Technology Patent Rights, [***] or Isis
Licensed Technology Patent Rights, Pfizer shall pay Isis a [***] royalty
based on the Net Sales of such Licensed Product pursuant to Section 3.2.2.

 

3.2                                 Royalty Rates.

 

3.2.1                        In
all countries in which a Licensed Product is covered by a Valid Claim in
Program Technology Patent Rights, Isis Technology Patent Rights, [***] or Isis Licensed Technology Patent Rights, the royalty paid by Pfizer to Isis shall be [***] percent ([***]%) of Net Sales
for such Licensed Product in such country.

 

3.2.2                        In countries in which a
Licensed Product is not covered by a Valid Claim in Program Technology Patent
Rights, Isis Technology Patent Rights, [***] or Isis
Licensed Technology Patent Rights and such Licensed Product is manufactured in
a country in which it is covered by a Valid Claim in Program Technology Patent
Rights, Isis Technology Patent Rights, [***] or Isis
Licensed Technology Patent Rights, the royalty paid by Pfizer to Isis shall be [***] percent ([***]%) of Net
Sales for such Licensed Product in such country.

 

3.3                                 Sales Milestones. 
Pfizer shall pay Isis the following sales milestones: (a) [***] dollars ($[***]) upon the
achievement by a Licensed Product of cumulative Net Sales of [***] dollars ($[***]) for [***] and (b) [***] dollars
($[***]) upon the achievement by a
Licensed Product of cumulative Net Sales of [***] dollars
($[***]) for [***].  Pfizer shall be obligated to pay these
milestones [***].  Pfizer shall be obligated to pay these
milestones with respect to [***].  [***].

 

3.4                                 Payment
Dates.  Royalties shall be
paid by Pfizer on Net Sales within [***] ([***]) days after the end of each calendar quarter in which
such Net Sales are made.  Such payments
shall be accompanied by a statement showing the Net Sales of each Licensed
Product by Pfizer or any sublicensee of Pfizer in each country, the applicable
royalty rate for such Licensed Product in each country, and a calculation of
the amount of royalty due, including any offsets and where each such Licensed
Product was manufactured.

 

3.5                                 Royalty and
Sales Milestone Computation and Payment. 
The Net Sales used for computing the royalties and sales
milestones payable to Isis by Pfizer shall be computed and paid in US dollars
by wire transfer in immediately available funds to a U.S. account designated

 

H-4

 

by Isis, or by other mutually acceptable means.  For purposes of determining the amount of
royalties due, the amount of Net Sales in any foreign currency shall be
computed by converting such amount into U.S. dollars at the prevailing
commercial rate of exchange for purchasing dollars with such foreign currency
as published in the Wall Street Journal
for the close of the last business day of the calendar quarter for which the
relevant royalty payment is to be made by Pfizer.  For purposes of determining whether a sales
milestone (as set forth in Section 3.3) has been achieved, the amount of
Net Sales in any foreign currency shall be computed by converting such amount
into U.S. dollars at the prevailing commercial rate of exchange for purchasing
dollars with such foreign currency as published in the Wall Street
Journal for the close of the last business day of the calendar
quarter for which such Net Sales are made.

 

3.6                                 Records.  Pfizer shall keep for [***] ([***]) years
from the date of each payment of royalties complete and accurate records of
sales by Pfizer and its sublicensees of each Licensed Product, as well as any
offsets, in sufficient detail to allow the accruing royalties to be determined
accurately.  Isis shall have the right
for a period of [***] ([***])
years after receiving any report or statement with respect to royalties due and
payable to appoint an independent certified public accountant reasonably
acceptable to Pfizer to inspect the relevant records of Pfizer to verify such
report or statement. Pfizer shall make its records available for inspection by
such independent certified public accountant during regular business hours at
such place or places where such records are customarily kept, upon reasonable
notice from Isis, to verify the accuracy of the reports and payments.  Such inspection right shall not be exercised
more than once in any calendar year nor more than once with respect to sales in
any given period.  Isis agrees to hold in
strict confidence all information concerning royalty payments and reports, and
all information learned in the course of any audit or inspection, except to the
extent necessary for Isis to reveal such information in order to enforce its
rights under this Agreement or if disclosure is required by law.  The failure of Isis to request verification
of any report or statement during said [***]-year
period shall be considered acceptance of the accuracy of such report, and
Pfizer shall have no obligation to maintain records pertaining to such report
or statement beyond said [***]-year
period.  The findings of each inspection,
if any, shall be binding on both parties. 
The cost of such inspection will be borne by Isis, unless such
inspection discloses an underpayment of more than [***] percent
([***]%) from the amount of Net Sales or
royalties or other payments

 

H-5

 

due under this Agreement.  In
such case, (a) the cost of such inspection shall be borne by Pfizer and
Pfizer will promptly remit the amount of such underpayment and (b) such
inspection will not count as the exercise of an inspection right.

 

3.7                                 Development
Milestone Payments.  On [***] basis,
Pfizer shall pay Isis, within [***] ([***]) days of the date of each event set forth below (“Event”),
the payment listed opposite that Event with respect to Licensed Products which
selectively inhibit a particular Exclusive Collaboration Gene Target.  Payments shall be made in U.S. dollars by
wire transfer in immediately available funds to a U.S. bank account designated
by Isis, or other mutually acceptable means. 
Pfizer shall be obligated to pay such milestones [***].  [***].  All development milestone payments made by
Pfizer for [***] with respect to a Licensed
Product shall be [***].  All development milestone payments made by
Pfizer for [***] with respect to a Licensed
Product shall be [***].

 

In the event that a Licensed Product is approved for
multiple indications in the U.S., the parties agree that Pfizer will as
appropriate use data from an external physician audit such as that conducted by
Scott-Levin or IMS to measure the extent to which physicians recommend the use
of the Licensed Product in conjunction with patient visits for specifically
coded and identified medical conditions (ICD-9 codes).  The appropriate ICD-9 code or codes for such
data will be adopted by the parties within three (3) months, or as soon
thereafter as Scott-Levin or IMS provides relevant coding information, of the
first sale of a Licensed Product in the United States for the indications in
question.  [***].

 

In the event that a Licensed Product is approved for multiple
indications in countries outside the U.S., the parties will establish
appropriate procedures for measuring sales of the Licensed Product for the
indications in question within six (6) months of the first sale of the
Licensed Product in such countries for the indications in question.

 

H-6

 

 

	
  Event

  	
   

  	
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  1.

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
   

  	
  [***]

  	
   

  	
  $

  	
  [***]

  	
   

  

 

For the purposes of the foregoing, “IND” shall mean an
Investigational New Drug Application filed with the U.S. FDA, or a similar
filing made with a counterpart health regulatory authority in another country; “NDA/PLA”
shall mean a New Drug Application, Product License Application, or other
application for authority to market a Licensed Product filed with the U.S. FDA
or a counterpart health regulatory agency in another country.

 

3.8                                 Safety
Database.  Isis maintains a database that includes
information regarding the tolerability of its compounds, individually and as a
class, including information discovered during clinical development (the “Isis
Database”).  Pfizer will consider
entering into an agreement with Isis under which Pfizer will (a) cooperate
in connection with populating the Isis Database, (b) provide Isis with
copies of toxicology, pharmacokinetic and serious adverse event reports related
to ASOs and (c) in connection with any reported serious adverse event,
provide mutually agreed to patient data regarding such event.  Pfizer is not under any obligation to enter
into such an agreement.

 

4.                                      Third Party Manufacture
of Licensed Product.  In the event Pfizer decides to seek a third
party to manufacture clinical or commercial supplies of the Licensed Product,
Isis shall have the right to bid on any such contract.

 

H-7

 

5.                                      Legal Action.

 

5.1                                 Actual or
Threatened Disclosure or Infringement.  Isis will cooperate with Pfizer, at Pfizer’s expense, in any action taken by Pfizer to prevent unlawful
infringement of Program Technology Patent Rights.

 

5.2                                 Defense of
Infringement Claims.  Isis
will cooperate with Pfizer at Pfizer’s expense in the defense of any suit,
action or proceeding against Pfizer or any sublicensee of Pfizer alleging the
infringement of the intellectual property rights of a third party by reason of
the use of Program Technology Patent Rights, Program Know-how, [***], Isis Licensed Technology Patent Rights, Isis
Manufacturing Technology Patent Rights, Isis Manufacturing Know-how, or Isis
Technology Patent Rights in the manufacture, use or sale of a Licensed
Product.  Pfizer shall give Isis prompt
written notice of the commencement of any such suit, action or proceeding or
claim of infringement and will furnish Isis a copy of each communication
relating to the alleged infringement. 
With respect to a suit, action or proceeding against Pfizer or any
sublicensee related solely to the use of Program Technology or Program
Know-how, and subject to Section 12, Isis shall give to Pfizer all
authority (including the right to exclusive control of the defense of any such
suit, action or proceeding) and the exclusive right after consultation with
Isis, to compromise, litigate, settle or otherwise dispose of any such suit,
action or proceeding, at Pfizer’s expense, including by providing information
and assistance necessary to defend or settle any such suit, action or
proceeding; provided, however, Pfizer shall obtain Isis’ prior written
consent to such part of any settlement which contemplates payment or other
action by Isis or has a material adverse effect on Isis’ business.  With respect to any suit, action or
proceeding against Pfizer or any sublicensee related solely or partially to the
use of Isis Technology Patent Rights, Isis Manufacturing Technology Patent Rights,
Isis Licensed Technology Patent Rights, [***] prior to
assignment to Pfizer, Isis Know-how, Isis Manufacturing Know-how or Isis
Manufacturing Technology, Isis will actively participate in the planning and
conduct of such suit, action or proceeding, and Pfizer will not, without the
express prior written consent of Isis, (a) make any substantive decision
regarding strategy related to such suit, action or proceeding or (b) settle
such suit, action or proceeding.  If the
parties agree that Isis should institute or join any suit, action or proceeding
pursuant to this Section, Pfizer may, at Pfizer’s expense, join Isis as a
defendant if necessary or desirable, and Isis shall execute all

 

H-8

 

documents and take all other actions, including giving testimony, which
may reasonably be required in connection with the prosecution of such suit,
action or proceeding.

 

5.3                                 Hold
Harmless.  Isis agrees to
defend, indemnify and hold harmless Pfizer and any sublicensee of Pfizer, from
and against any loss or expense arising from any claim of a third party that
Isis did not have the right to grant Pfizer the licenses set forth in Section 2.1
of this Agreement and such third party’s rights are being infringed upon by
reason of Pfizer or any sublicensee of Pfizer exercising their rights granted
to Pfizer by Isis pursuant to this Agreement.

 

5.4                                 Third Party
Licenses.  Isis is responsible
for payments to maintain Isis’ licenses to Isis Licensed Technology, until the
respective expiration of the [***].  Subject to Section 6.5(d), [***] Licensed Products.

 

6.                                      Representation and Warranty.   Isis and Pfizer each
represents and warrants as follows:

 

6.1                                 It is a corporation duly organized,
validly existing and is in good standing under the laws of the State of
Delaware, is qualified to do business and is in good standing as a foreign
corporation in each jurisdiction in which the conduct of its business or the
ownership of its properties requires such qualification and has all requisite
power and authority, corporate or otherwise, to conduct its business as now
being conducted, to own, lease and operate its properties and to execute,
deliver and perform this Agreement.

 

6.2                                 The execution, delivery and performance
by it of this Agreement has been duly authorized by all necessary corporate
action and do not and will not (a) require any consent or approval of its
stockholders, (b) violate any provision of any law, rule, regulations,
order, writ, judgment, injunction, decree, determination award presently in
effect having applicability to it or any provision of its certificate of
incorporation or by-laws or (c) result in a breach of or constitute a
default under any material agreement, mortgage, lease, license, permit or other
instrument or obligation to which it is a party or by which it or its
properties may be bound or affected.

 

6.3                                 This Agreement is a legal, valid and
binding obligation of it enforceable against it in accordance with its terms
and conditions, except as such enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or similar laws, from time
to time in effect, affecting creditor’s rights generally.

 

H-9

 

6.4                                 It is not under any obligation to any person,
or entity, contractual or otherwise, that is conflicting or inconsistent in any
respect with the terms of this Agreement or that would impede the diligent and
complete fulfilment of its obligations hereunder.

 

6.5                                 Isis represents and warrants to Pfizer
that:

 

(a)                                  to its knowledge, as of the Effective
Date, the issued Isis Technology Patent Rights and Isis Manufacturing
Technology Patent Rights are valid and enforceable patents;

 

(b)                                 to its knowledge, as of the Effective
Date, the Isis Technology Patent Rights and Isis Manufacturing Technology
Patent Rights  are not subject to any
pending re-examination, opposition, interference or
litigation proceedings;

 

(c)                                  as of the Effective Date, it has license
rights to the Isis Licensed Technology Patent Rights;

 

(d)                                 to its knowledge, as of the Effective
Date, no additional third-party licenses (other than the Isis Licensed
Technology) are required to practice Isis Technology and Isis Manufacturing
Technology to discover, develop, commercialize and manufacture Products, except
licenses that may be required related directly to the Exclusive Collaboration
Gene Target down-regulated by a Product; and

 

(e)                                  it has the right to grant the licenses
granted and to convey the benefits of the covenants pursuant to this Agreement.  Isis represents and warrants that the
licenses so granted do not conflict with or violate the terms of any agreement
between Isis and any third party.

 

7.                                      Treatment of Confidential
Information.

 

7.1                                 Confidentiality.

 

(a)                                  Subject to permitted disclosure under
Sections 7.1(c) and 7.1(e), Pfizer and Isis each agree that during the
term of this Agreement and for [***] thereafter,
it will keep confidential all Isis Confidential Information or Pfizer
Confidential Information, as the case may be, that is disclosed to it, or to
any of its Affiliates, pursuant to this Agreement.  Subject to Section 12, Program
Technology and Program Know-how shall be deemed Pfizer Confidential
Information.

 

H-10

 

(b)                                 Neither Pfizer nor Isis shall use the
other’s Confidential Information except as expressly permitted in this
Agreement.

 

(c)                                  Pfizer and Isis each agree that any
disclosure of the other’s Confidential Information to any of its officers,
employees, agents or Affiliates shall be made only if and to the extent
necessary to carry out its responsibilities under this Agreement and shall be
limited to the maximum extent possible consistent with such
responsibilities.  Pfizer and Isis each
agree not to disclose the other’s Confidential Information to any individual,
entity or party for whom disclosure is not expressly permitted under this
Section, under any circumstance without written permission from the other
party.  Each party shall take such action
to preserve the confidentiality of each other’s Confidential Information as it
would customarily take to preserve the confidentiality of its own Confidential
Information.  Each party, upon the other’s
request, will return all the Confidential Information disclosed to the other
party pursuant to this Agreement, including all copies and extracts of
documents, within sixty (60) days of the request upon the termination of this
Agreement except for one (1) copy which may be kept for the purpose of
complying with continuing obligations under this Agreement.

 

(d)                                 Isis and Pfizer each represent that all
of its employees, Affiliates, agents, and any consultants to such party, who
shall have access to [***], Isis
Technology, Isis Know-how, Isis Manufacturing Technology, Isis Manufacturing
Know-how, [***], Isis Licensed Technology,
Program Technology, Program Know-how, Pfizer Confidential Information or Isis
Confidential Information are bound by agreement to maintain such information in
confidence and to use such information only as expressly permitted in this
Agreement.

 

(e)                                  Permitted Disclosure.  If either party is requested
to disclose the other’s Confidential Information in connection with a legal or
administrative proceeding or is otherwise required by law to disclose the other’s
Confidential Information, such party will give the other party prompt written
notice of such request.  The party whose
Confidential Information is to be disclosed may seek and pay for an appropriate
protective order or other remedy or waive compliance with the provisions of
this Agreement.  If such party seeks a
protective order or other remedy, the other party will cooperate.  If such party fails to obtain a protective
order or waive compliance with the relevant provisions of this Agreement, the
other party will disclose only that portion of such party’s Confidential
Information which its legal counsel determines it is required

 

H-11

 

to disclose.  The parties agree that Isis will have the
right to disclose the information required [***].

 

7.2                                 Publicity. 
Except as required by law or permitted in this Agreement, neither party
may disclose the terms of this Agreement without the prior written consent of
the other party.  Pfizer agrees that Isis
may use information made public by Pfizer on the development status of the
Licensed Products in the product/partner pipeline on its website.

 

8.                                      Provisions Concerning the Filing,
Prosecution and Maintenance of Patent Rights.   Subject to Section 12
of this Agreement, the following provisions relate to the filing, prosecution
and maintenance (and the cost thereof) of Program Technology Patent Rights and [***] during the term of this Agreement:

 

8.1                                 Filing, Prosecution and
Maintenance by Isis.  With respect to [***],
until the assignment described in Section 2.2, , Isis shall have the
exclusive right and (so long as [***])
obligation:

 

(a)                                  to file applications for letters patent
on any invention deemed patentable included in such Patent Rights; provided,
however, that Isis shall consult with Pfizer regarding countries in which such
patent applications should be filed and shall file patent applications in those
countries where Pfizer requests that Isis file such applications; and, further
provided, that Isis, at its option and exercise, may file in countries where
Pfizer does not request that Isis file such applications;

 

(b)                                 to take all reasonable steps to prosecute
all pending and new patent applications included within such Patent Rights;

 

(c)                                  to respond to oppositions, nullity
actions, re-examinations, revocation actions and similar proceedings filed by
third parties against the grant of letters patent for such applications; and

 

(d)                                 to maintain in force any letters patent
included in such Patent Rights by duly filing all necessary papers and paying
any fees required by the patent laws of the particular country in which such
letters patent were granted.

 

8.2                                 Filing, Prosecution and
Maintenance by Pfizer.  With respect to Program
Technology, Pfizer (using in-house or outside counsel, at its discretion) shall
have the exclusive right and obligation:

 

H-12

 

(a)                                  to file applications for letters patent
on any invention deemed patentable included in the Program Technology;
provided, however, that Pfizer shall consult with Isis as to the countries in
which such patent applications should be filed;

 

(b)                                 to take all reasonable steps to prosecute
all pending and new patent applications included within Program Technology
Patent Rights;

 

(c)                                  to respond to oppositions, nullity
actions, re-examinations, revocation actions and similar proceedings filed by
third parties against the grant of letters patent for such applications;

 

(d)                                 to maintain in force any letters patent
included in Program Technology Patent Rights by duly filing all necessary
papers and paying any fees required by the patent laws of the particular
country in which such letters patent were granted; and Isis shall cooperate
fully with, and take all necessary actions requested by, Pfizer in connection
with the preparation, prosecution and maintenance of any letters patent
included in Program Technology Patent Rights. 
Pfizer will reimburse Isis for reasonable expenses incurred for
personnel travel and time spent out of office in connection with the foregoing.

 

(e)                                  If Pfizer does not wish to exercise its
right to file any application for letters patent on patentable inventions
relating to the Program Technology, then Pfizer shall provide Isis adequate
written notice prior to any deadline with the U.S. Patent and Trademark Office
or patent office of the [***] or [***], and Isis will have the right to prepare and file such
application(s) at its sole expense.  Isis
will solely own all related patent applications and letters patent issuing
therefrom and grant Pfizer a nonexclusive, non-transferable, irrevocable,
worldwide, royalty-free, perpetual research license under its rights to such
patent applications and letters patent.

 

(f)                                    Pfizer shall notify Isis in a timely
manner of any decision to abandon a pending application or an issued patent
included in Program Technology Patent Rights. 
Thereafter, Isis shall have the option, at its expense, of continuing to
prosecute any such pending patent application or of keeping the issued patent
in force.  Isis will own all related
patent applications and letters patent issuing therefrom and grant Pfizer a
nonexclusive, non-transferable, irrevocable, worldwide, royalty-free, perpetual
research license under its rights to such patent applications and letters
patent.

 

H-13

 

8.3                                 Copies of Documents. 
Prior to filing, Isis shall provide to Pfizer copies of all patent
applications that pursuant to Section 8.1 of this Agreement, Isis is
obligated to file, prosecute and maintain, for the purpose of obtaining
substantive comment of Pfizer’s patent counsel. 
Each party (the “Prosecuting Party”) shall provide to the other party
every twelve (12) months a report detailing the status of all patent
applications for which the Prosecuting Party is, under Section 8.1 or Section 8.2
of this Agreement, obligated to file, prosecute and maintain.  Pfizer will have final authority on matters
relating to patent applications and patents for which Pfizer will assume
filing, prosecution and maintenance costs.

 

8.4                                 Reimbursement of Costs for
Filing, Prosecuting and Maintaining Patent Rights. 
At least ninety (90) days prior to a patent filing deadline, Pfizer will
notify Isis in writing of those countries in which Pfizer requests the [***] be filed, prosecuted and maintained.  Within [***] ([***]) days of receipt of invoices from Isis, Pfizer shall
reimburse Isis for all the costs of filing, prosecuting, responding to
opposition and maintaining the [***] in
countries where Pfizer requests that the [***] be filed,
prosecuted and/or maintained, including costs incurred prior to the Effective
Date.  Such reimbursement shall be in
addition to payments under Section 3. 
However, Pfizer may, upon [***] ([***]) days notice, request that Isis discontinue the
filing, prosecution or maintenance of the [***] in any
country and discontinue reimbursing Isis for the costs of filing, prosecuting,
responding to opposition or maintaining the [***]
in such country.  Isis shall pay all
costs in those countries in which Pfizer does not request that Isis file,
prosecute or maintain the [***], but in
which Isis, at its option, elects to do so.

 

8.5                                 After the assignment described in Section 2.2,
Pfizer shall have the right to file on behalf of and as an agent for Isis all applications
and take all actions necessary to obtain patent extensions pursuant to 35
U.S.C. Section 156 and foreign counterparts for Patent Rights assigned
under Section 2.2.  Isis agrees to
sign, at Pfizer’s expense, such further documents and take such further actions
as may be requested by Pfizer in this regard.

 

8.6                                 Neither party may disclaim a Valid Claim
within Program Technology Patent Rights without the consent of the other.

 

8.7                                 Bankruptcy. 
All rights and licenses granted under or pursuant to any section of
this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n)
of the U.S. Bankruptcy Code, licenses of rights to “intellectual property” as
defined under Section 101(35A) of the U.S. Bankruptcy Code.  The parties shall retain and may fully exercise
all of

 

H-14

 

their respective rights and elections under the U.S.
Bankruptcy Code.  The parties agree that
a party that is a licensee of such rights under this Agreement shall retain and
may fully exercise all of its rights and elections under the U.S. Bankruptcy
Code, and that upon commencement of a bankruptcy proceeding by or against the
licensing party (such party, the “Involved Party”) under the U.S. Bankruptcy
Code, the other party (such party, the “Noninvolved Party”) shall be entitled
to a complete duplicate of or complete access to (as such Noninvolved Party
deems appropriate), any such intellectual property and all embodiments of such
intellectual property, provided the Noninvolved Party continues to fulfill its
payment or royalty obligations as specified herein in full.  Such intellectual property and all
embodiments thereof shall be promptly delivered to the Noninvolved Party (a) upon
any such commencement of a bankruptcy proceeding upon written request therefore
by the Noninvolved Party, unless the Involved Party elects to continue to
perform all of its obligations under this Agreement or (b) if not
delivered under (a) above, upon the rejection of this Agreement by or on
behalf of the Involved Party upon written request therefor by the Noninvolved
Party.  The foregoing is without
prejudice to any rights the Noninvolved Party may have arising under the U.S.
Bankruptcy Code or other applicable law.

 

9.                                      Other Agreements.  Concurrently
with the execution of this Agreement, Isis and Pfizer shall enter into the
Research Agreement.  This Agreement and
the Research Agreement are the sole agreements with respect to the subject
matter and supersede all other agreements and understandings between the
parties with respect to same.

 

10.                               Termination
and Disengagement.

 

10.1                           Unless sooner terminated in accordance
with this Section 10, this Agreement will expire concurrently with the
last to expire Royalty Payment Term.

 

10.2                           Events of Termination. 
The following events shall constitute events of termination (“Events of
Termination”):

 

(a)                                  Any material written representation or
warranty by Isis or Pfizer made under or in connection with this Agreement
shall prove to have been incorrect in any material respect when made.

 

(b)                                 Isis or Pfizer shall fail in any material
respect to perform or observe any material term, covenant or understanding
contained in this Agreement or the Research

 

H-15

 

Agreement, and any such failure shall remain
un-remedied for thirty (30) days after written notice to the failing party.

 

(c)                                  At any time, Pfizer may terminate this
Agreement without cause upon [***] ([***])[***]written
notice to Isis.

 

10.3                           Upon the occurrence of any Event of
Termination described in Section 10.2(a) or 10.2(b), the party not
responsible may, by written notice to the other party, terminate this
Agreement.

 

10.4                           Termination of this
Agreement by either party, with or without cause, will not terminate the
license granted pursuant to the first sentence of Section 5.2(a) or
the license granted pursuant to Section 5.2(b) of the Research
Agreement.

 

10.5                           Termination of this
Agreement for any reason shall be without prejudice to:

 

(a)                                  the rights and obligations
of the parties set forth in any sections which provide by their terms for
performance by either party subsequent to termination;

 

(b)                                 Isis’ right to receive
all royalty, milestone or other payments accrued hereunder; or

 

(c)                                  any
other remedies which either party may otherwise have.

 

11.                               Loss of Target
Exclusivity.

 

11.1                           Section 2.3 of the Research
Agreement will terminate and be of no further force or effect upon the
occurrence of the earliest of any the following events:

 

(a)                                  Upon termination of the Research
Agreement by Pfizer pursuant to Section 9.2(c) or 9.2(d) of the
Research Agreement,

 

(b)                                 Upon termination of the Research
Agreement by Isis pursuant to Section 9.3(a) of the Research
Agreement or Section 10.3 of this Agreement,

 

(c)                                  Upon expiration of this Agreement,

 

(d)                                 Upon termination of this Agreement by
Pfizer pursuant to Section 10.2(c) of this Agreement.

 

11.2                           Upon termination of Section 2.3 of
the Research Agreement, Isis has the right to conduct research itself or
sponsor any other research on the Exclusive Collaboration Gene Targets or
engage in any research sponsored by any third party on the Exclusive
Collaboration Gene Targets without Pfizer’s consent.

 

H-16

 

11.3                           Pfizer may elect to designate any
Exclusive Collaboration Gene Target as no longer subject to Section 2.3 of
the Research Agreement by written notice to Isis.  Such Exclusive Collaboration Gene Targets
will no longer be subject to Section 2.3 of the Research Agreement upon the
date of written notice by Pfizer.

 

12.                               Right of Reversion.

 

12.1                           All Patent Rights claiming the
pharmaceutical composition and/or use of ASOs and/or Products may transfer and
revert to Isis and upon the assignment described in Section 12.3, all
Program Technology and Program Know-how comprised of such pharmaceutical
composition and/or use of ASOs and/or Products shall be deemed Isis
Confidential Information, upon the earliest occurrence of any of the following
events (“Reversion Trigger Events”):

 

(a)                                  Upon termination of the Research
Agreement by Pfizer pursuant to Section 9.2(c) or 9.2(d) of the
Research Agreement,

 

(b)                                 Upon termination of the Research
Agreement by Isis pursuant to Section 9.3 (a) of the Research
Agreement,

 

(c)                                  Upon termination of this Agreement by
Pfizer pursuant to Section 10.2(c) of this Agreement.

 

12.2                           Isis must provide written notice to
Pfizer within [***] ([***])
days of any Reversion Trigger Event to inform Pfizer of its election to
exercise the right of reversion.

 

12.3                           Upon receipt of written notice by Isis to
exercise its right of reversion, Pfizer shall promptly assign all Patent Rights
claiming the pharmaceutical composition and/or use of ASOs and/or Products to
Isis and thereafter Isis will have the exclusive right, but not the obligation,
to prepare, file, prosecute, maintain and/or defend such Patent Rights.

 

12.4                           Upon Pfizer’s assignment of any Patent
Rights claiming the pharmaceutical composition and/or use of ASOs and/or
Products to Isis and any transfer or reversion of Program Know-how to Isis,
Isis will grant Pfizer and its agents a non-exclusive, non-transferable,
irrevocable, worldwide, royalty-free, perpetual license, to make and use such
Patent Rights and Program Know-how for all research purposes.

 

12.5                           Upon receipt of Isis’ election to
exercise its right of reversion, Pfizer shall promptly make available to and
transfer one copy or assign to Isis the following: [***].  Both parties shall have the right to use such
information as they see fit in the research, development

 

H-17

 

and commercialization of products.  [***].  Pfizer will also participate in a technical
transfer meeting of no more than two days duration between the appropriate
technical teams at Isis and Pfizer.  Isis
shall indemnify and hold Pfizer (and all officers, directors, employees, and
agents of Pfizer) harmless for any and all damages, settlements, costs, legal
fees and other expenses incurred in connection with a claim by a third party
based on any action or omission of Isis, its agents, employees, or officers,
related to or with regard to any use of such information or Isis’ development
and commercialization of Products. 
Pfizer shall have no liability whatsoever for any inaccuracy or
incompleteness in such information.

 

12.6                           [***].

 

13.                               Indemnification.  Pfizer and Isis will indemnify,
defend and hold each other harmless for any and all damages, settlements,
costs, legal fees and other expenses incurred in connection with a claim by a
third party against either party based on any action or omission of the
indemnifying party’s agents, employees, or officers related to its obligations
under this Agreement; provided, however, that the foregoing shall not apply (i) if
the claim is found to be based upon the negligence, recklessness or wilful
misconduct of the party seeking indemnification; or (ii) if such party
fails to give the other party prompt notice of any claim it receives and such
failure materially prejudices the other party with respect to any claim or
action to which its obligation pursuant to this Section 13 applies.  Notwithstanding the foregoing, Pfizer hereby
expressly agrees to indemnify, defend and hold harmless Isis (and all officers,
employees, consultants, directors, agents and Affiliates of Isis) for any and
all claims arising from clinical trials pursued by Pfizer or its Affiliates or
sublicensees, the sale of products, the exercise of rights granted to Pfizer
under this Agreement or Section 5.2 of the Research Agreement (including
without limitation product liability claims) and to claims arising from Patent
Rights in Program Technology. The indemnifying party, in its sole discretion,
shall choose legal counsel, shall control the defense of such claim or action
and shall have the right to settle same on such terms and conditions it deems
advisable; provided, however, that any settlement includes, as an
unconditional term thereof, a full release of the indemnified party from all
liability with respect to such claim. 
Pfizer and Isis at all times reserve the right to retain counsel of its
own to defend their respective interests.

 

H-18

 

14.                               Notices and
Reports.

 

14.1                           All
notices shall be deemed given as of the date received.  All notices shall be made in writing, and
mailed via certified mail, return receipt requested, courier, or facsimile
transmission addressed as follows, or to such other address as may be
designated from time to time:

 

	
  If to Pfizer:

  	
   

  	
  Pfizer Global R&D Headquarters

  
	
   

  	
   

  	
  50 Pequot Avenue

  
	
   

  	
   

  	
  New London, CT  06320

  
	
   

  	
   

  	
  Attn.: 
  Executive Vice President, PGRD

  
	
   

  	
   

  	
  with copy to:  General Counsel, PGRD

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Invoices should be sent to the following
  address:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  
	
   

  	
   

  	
  [***]

  

 

	
  If to Isis:

  	
   

  	
  Isis Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  1896 Rutherford Road

  
	
   

  	
   

  	
  Carlsbad, CA 92008

  
	
   

  	
   

  	
  Attn: Executive Vice President

  
	
   

  	
   

  	
   

  	
  With copy to: Vice-President, Legal

  

 

H-19

 

14.2                           Reports.  Pfizer agrees to keep Isis informed with
respect to activities and progress toward further research, development and
commercialization of Licensed Products. 
Pfizer agrees to provide to Isis every [***] a
summary of such activities and progress. 
In addition, each party will immediately notify (and, if possible,
provide as much advance notice as reasonably possible to) the other of any
event such party deems to be material related to each Licensed Product
(including any regulatory approval) so that the parties may analyze the need to
or desirability of publicly disclosing or reporting such event.

 

15.                               Governing Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of New York.

 

16.                               Miscellaneous.

 

16.1                           Binding
Effect.  This Agreement shall
be binding upon and inure to the benefit of the parties and their respective
legal representatives, successors and permitted assigns.

 

16.2                           Headings.  Paragraph headings are inserted for
convenience of reference only and do not form a part of this Agreement.

 

16.3                           Counterparts.  This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original.  Signatures may be transmitted via facsimile,
thereby constituting the valid signature and delivery of this Agreement.

 

16.4                           Amendment;
Waiver.  This Agreement may be
amended, modified, superseded or cancelled, and any of the terms may be waived,
only by a written instrument executed by each party or, in the case of waiver,
by the party or parties waiving compliance. 
The delay or failure of any party at any time or times to require
performance of any provisions shall in no manner affect the rights at a later
time to enforce the same.  No waiver by
any party of any condition or of the breach of any term contained in this
Agreement, whether by conduct, or otherwise, in any one or more instances,
shall be deemed to be, or considered as, a further or continuing waiver of any
such condition or of the breach of such term or any other term of this
Agreement.

 

16.5                           No Third
Party Beneficiaries.  No third
party including any employee of any party to this Agreement, shall have or
acquire any rights by reason of this Agreement. 
Nothing contained in this Agreement shall be deemed to constitute the
parties as partners with each other or any third party.

 

H-20

 

16.6                           Assignment
and Successors.  This
Agreement may not be assigned by either party, except that each party may
assign this Agreement and the rights and interests of such party, in whole or
in part, to any of its Affiliates, any purchaser of all or substantially all of
its assets or outstanding stock or to any successor company resulting from any
merger or consolidation of such party with or into such corporation; provided
however, that no Pfizer Confidential Information may be disclosed to any Isis
acquirer or successor company as a result of a merger or consolidation
involving Isis without Pfizer’s prior written consent.  Isis may assign its right to payment
hereunder.

 

16.7                           Force
Majeure.  Neither Pfizer nor
Isis shall be liable for failure of or delay in performing obligations set
forth in this Agreement, and neither shall be deemed in breach of its
obligations, if such failure or delay is due to natural disasters or any causes
reasonably beyond the control of Pfizer or Isis.

 

16.8                           Severability.  If any provision of this Agreement is or
becomes invalid or is ruled invalid by any court of competent jurisdiction or
is deemed unenforceable, it is the intention of the parties that the remainder
of the Agreement shall not be affected so long as the essential benefits of
this Agreement remains enforceable and obtainable.

 

16.9                           Survival of
Terms.  In the event this Agreement expires or is
terminated, certain terms that by their nature are intended to survive the expiration
or termination of this Agreement shall survive and remain in full force until
expiration or termination by their respective terms.

 

H-21

 

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

 

 

	
  Pfizer Inc

  	
  Isis Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John L. LaMattina

  	
   

  	
  By:

  	
  /s/ B. Lynne Parshall

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  President, PGRD

  	
   

  	
  Title:

  	
  Executive Vice President & CFO

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  05/23/05

  	
   

  	
  Date:

  	
  05/23/05

  	
   

  
										

 

H-22

 

Exhibit I

 

RESEARCH
PLAN

(Year 1)

 

[***]

 

I-1

 

Exhibit J

 

	
   

  	
  Contact: Claudine Prowse, Ph.D.

  
	
   

  	
   

  	
  Isis Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  760-603-2331

  
				

 

ISIS
PHARMACEUTICALS ANNOUNCES COLLABORATION WITH PFIZER TO DISCOVER ANTISENSE DRUGS
FOR THE TREATMENT OF EYE DISEASE

 

CARLSBAD, CA, May 24, 2005 – Isis Pharmaceuticals Inc. (NASDAQ: ISIS)
has entered into a multi-year drug discovery collaboration with Pfizer Inc
(NYSE: PFE) to identify second-generation antisense drugs for the treatment of
ophthalmic disease.  Under the terms of
the agreement, Isis will receive a technology access fee of $1 million,
research funding, and milestone payments. 
In addition, Isis will receive royalties on the sale of drugs resulting
from the collaboration.

 

Using
Isis’ proprietary second-generation antisense platform, the companies will work
together to identify antisense drugs against targets selected by Pfizer.  Pfizer will be responsible for clinical
development and commercialization of the antisense drugs.  Pfizer may develop the antisense drugs
identified in the collaboration for all human health indications.

 

“Isis
has already shown that antisense drugs can be effective in treating ocular
diseases, having discovered and developed Vitravene®. We are excited
to contribute to Pfizer’s leading ophthalmology program and at the same time
work with a recognized expert to extend the technology beyond our primary
therapeutic focus,” said C. Frank Bennett, Isis’ Vice President of Antisense
Research.

 

“This
new collaboration reflects our active strategy to work with recognized leaders
such as Pfizer to broaden and deepen our antisense pipeline moving forward.
Because the antisense technology platform that Isis has pioneered allows us to
very rapidly discover highly selective drugs to almost any gene target, we are
able not only to keep our own pipeline full, but also provide drug candidates
to partners,” added Dr. Bennett.

 

ABOUT ISIS PHARMACEUTICALS, INC.

 

Isis Pharmaceuticals, Inc. is exploiting
its expertise in RNA to discover and develop novel human therapeutic drugs for
its pipeline and for its partners. The company has successfully commercialized
the world’s first antisense drug and has 11 antisense products in development
to treat metabolic, cardiovascular and inflammatory diseases, and cancer.
Through its Ibis division, Isis is developing a system to identify infectious
organisms.  As an innovator in RNA-based drug
discovery and development,

 

J-1

 

Isis is the owner or exclusive licensee of
more than 1,500 issued patents worldwide. Additional information about Isis is
available at http://www.isispharm.com.

 

 This press release includes forward-looking statements concerning Isis’
collaboration with Pfizer Inc and the development, therapeutic potential and
safety of antisense drugs in treating ophthalmic disease. Any statement
describing our goals, expectations, intentions or beliefs is a forward-looking
statement and should be considered an at-risk statement, including those
statements that are described as Isis’ clinical goals.  Such statements are subject to certain risks
and uncertainties, particularly those inherent in the process of discovering,
developing and commercializing drugs that are safe and effective for use as
human therapeutics, in developing and commercializing technology and systems
used to identify infectious agents, and in the endeavor of building a business
around such products and services. Our forward-looking statements also involve
assumptions that, if they never materialize or prove correct, could cause our
results to differ materially from those expressed or implied by such
forward-looking statements.  Although our
forward-looking statements reflect the good faith judgment of our management,
these statements can only be based on facts and factors currently known by
us.  As a result, you are cautioned not
to rely on these forward-looking statements. 
These and other risks concerning Isis’ research and development programs
are described in additional detail in Isis’ Annual Report on Form 10-K for
the year ended December 31, 2004, and quarterly report on Form 10-Q
for the quarter ended March 30, 2005, which are on file with the U.S. Securities
and Exchange Commission (SEC).  Copies of
these and other documents are available from the company.

 

VitraveneÒ is a registered trademark of Novartis AG

 

# # #

 

J-2

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00089-of-00352.parquet"}]]