Document:

Exhibit 10.6

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

CONFIDENTIAL

	
 
    

 

ASSET PURCHASE AGREEMENT

 

between

 

KINIKSA PHARMACEUTICALS, LTD.

 

and

 

BIOGEN MA INC.

 

dated as of September 7, 2016

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

TABLE OF CONTENTS

 

	
1.
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    
	
 
    	
1.1
    	
Defined Terms
    	
1
    
	
 
    	
1.2
    	
Construction of Certain   Terms and Phrases
    	
13
    
	
 
    	
 
    	
 
    
	
2.
    	
PURCHASE AND SALE OF   ASSETS
    	
14
    
	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
Purchase and Sale of   Assets
    	
14
    
	
 
    	
2.2
    	
Excluded Assets
    	
14
    
	
 
    	
2.3
    	
Assumed Liabilities
    	
14
    
	
 
    	
2.4
    	
Excluded Liabilities
    	
15
    
	
 
    	
2.5
    	
License Grants;   Obligations of Kiniksa Under Retained Contracts
    	
15
    
	
 
    	
2.6
    	
Support by Biogen
    	
18
    
	
 
    	
2.7
    	
Exclusivity
    	
19
    
	
 
    	
 
    	
 
    
	
3.
    	
DEVELOPMENT AND   COMMERCIALIZATION OF PRODUCTS
    	
20
    
	
 
    	
 
    	
 
    
	
 
    	
3.1
    	
Responsibility
    	
20
    
	
 
    	
3.2
    	
Diligence
    	
20
    
	
 
    	
3.3
    	
Reports
    	
20
    
	
 
    	
3.4
    	
Right of First   Negotiation
    	
21
    
	
 
    	
 
    	
 
    
	
4.
    	
PROSECUTION/INFRINGEMENT   OF ACQUIRED PATENTS
    	
24
    
	
 
    	
 
    	
 
    
	
 
    	
4.1
    	
Prosecution of Acquired   Patents
    	
24
    
	
 
    	
4.2
    	
Infringement
    	
25
    
	
 
    	
 
    	
 
    
	
5.
    	
PURCHASE PRICE AND   OTHER PAYMENTS
    	
26
    
	
 
    	
 
    	
 
    
	
 
    	
5.1
    	
Purchase Price
    	
26
    
	
 
    	
5.2
    	
Milestone Payments
    	
26
    
	
 
    	
5.3
    	
Payment of Royalties;   Royalty Rates
    	
30
    
	
 
    	
5.4
    	
Payments Under Retained   Contracts
    	
32
    
	
 
    	
5.5
    	
Payments in Dollars
    	
33
    
	
 
    	
5.6
    	
Foreign Currency   Exchange
    	
33
    
	
 
    	
5.7
    	
Overdue Payments
    	
33
    
	
 
    	
5.8
    	
Taxes
    	
33
    
	
 
    	
 
    	
 
    
	
6.
    	
REPRESENTATIONS AND   WARRANTIES
    	
34
    
	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
Mutual Warranties
    	
34
    
	
 
    	
6.2
    	
Additional Biogen   Warranties
    	
34
    
	
 
    	
6.3
    	
No Other Warranties
    	
37
    

 

i

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

	
7.
    	
CONFIDENTIALITY
    	
37
    
	
 
    	
 
    	
 
    
	
 
    	
7.1
    	
Confidential   Information
    	
37
    
	
 
    	
7.2
    	
Restrictions
    	
38
    
	
 
    	
7.3
    	
Exception
    	
38
    
	
 
    	
7.4
    	
Publication by Biogen
    	
38
    
	
 
    	
7.5
    	
Terms of this   Agreement; Publicity
    	
39
    
	
 
    	
 
    	
 
    
	
8.
    	
TERM; TERMINATION;   EFFECT OF TERMINATION
    	
40
    
	
 
    	
 
    	
 
    
	
 
    	
8.1
    	
Term
    	
40
    
	
 
    	
8.2
    	
Right to Terminate
    	
40
    
	
 
    	
8.3
    	
Effect of Termination
    	
41
    
	
 
    	
8.4
    	
Kiniksa Rights in Lieu   of Termination
    	
46
    
	
 
    	
8.5
    	
Surviving Obligations
    	
46
    
	
 
    	
 
    	
 
    
	
9.
    	
SURVIVAL;   INDEMNIFICATION; INSURANCE; LIMITATIONS
    	
46
    
	
 
    	
 
    	
 
    
	
 
    	
9.1
    	
Survival of   Representations and Warranties
    	
46
    
	
 
    	
9.2
    	
Indemnification by   Kiniksa
    	
47
    
	
 
    	
9.3
    	
Indemnification By   Biogen
    	
48
    
	
 
    	
9.4
    	
Limitation on   Indemnification
    	
49
    
	
 
    	
9.5
    	
Sole Remedy
    	
49
    
	
 
    	
9.6
    	
Insurance
    	
49
    
	
 
    	
9.7
    	
LIMITATION OF DAMAGES
    	
49
    
	
 
    	
 
    	
 
    
	
10.
    	
MISCELLANEOUS
    	
50
    
	
 
    	
 
    	
 
    
	
 
    	
10.1
    	
Entire Agreement;   Amendment
    	
50
    
	
 
    	
10.2
    	
Section 365(n) of   the Bankruptcy Code
    	
50
    
	
 
    	
10.3
    	
Governing Law;   Jurisdiction
    	
50
    
	
 
    	
10.4
    	
Notice
    	
51
    
	
 
    	
10.5
    	
Compliance With Law;   Severability
    	
52
    
	
 
    	
10.6
    	
Successors and Assigns
    	
52
    
	
 
    	
10.7
    	
Waivers
    	
52
    
	
 
    	
10.8
    	
Force Majeure
    	
53
    
	
 
    	
10.9
    	
No Third Party   Beneficiaries
    	
53
    
	
 
    	
10.10
    	
Headings; Schedules and   Exhibits
    	
53
    
	
 
    	
10.11
    	
Counterparts
    	
53
    
	
 
    	
10.12
    	
Further Assurances
    	
53
    

 

ii

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

SCHEDULES

 

	
Schedule   A
    	
Purchased   Assets
    
	
 
    	
 
    
	
1.
    	
Acquired Patent Rights
    
	
 
    	
 
    
	
2.
    	
Acquired Know-How
    
	
 
    	
 
    
	
3.
    	
Assigned Contract
    
	
 
    	
 
    
	
4.
    	
Inventory
    
	
 
    	
 
    
	
Schedule   B
    	
Selected   Obligations under Sigma Agreement
    
	
Schedule   C
    	
Determination   of Applicable Multiplier
    
	
Schedule   D
    	
Background   Licensed Patent Rights
    
	
 
    	
 
    
	
Schedule E
    	
Retained Contracts
    
	
Schedule F
    	
Description of BIIB069
    
	
 
    	
 
    
	
Schedule G
    	
Completion of   Technology Transfer
    
	
Schedule H
    	
Individuals for   Purposes of Knowledge
    
	
 
    	
 
    
	
Schedule I
    	
Exceptions to Biogen   Obligations/Representations in Sections 2.6.6 and 6.2.4(g) and (l)
    
			

 

EXHIBITS

 

Exhibit A               Patent Assignment Agreement

 

iii

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (this “Agreement”) is made and entered into as of September 7, 2016 (the “Effective Date”), between Biogen MA Inc., a Massachusetts corporation (“Biogen”), and Kiniksa Pharmaceuticals, Ltd., a Bermuda exempted company (“Kiniksa”).  Kiniksa and Biogen are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

 

RECITALS

 

WHEREAS, Biogen is engaged, among other things, in the development of BIIB069 (as defined below); and

 

WHEREAS, Biogen desires to sell to Kiniksa, and Kiniksa desires to purchase from Biogen, certain assets of Biogen used in or relating to BIIB069 and Kiniksa is willing to assume certain liabilities of Biogen relating to BIIB069, all upon the terms and conditions set forth herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants, representations and warranties herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the Parties hereby agree as follows:

 

1.          DEFINITIONS

 

1.1                               Defined Terms.  As used in this Agreement, the following defined terms shall have the meanings specified below:

 

“Acquired Antibody” means (a) BIIB069 and [***] Antibody that is Covered by one or more claims within the Acquired Patent Rights and (b) [***] BIIB069 or [***] that, in each case, [***].

 

“Acquired Know-How” means all Know-How that is (a) owned or Controlled by Biogen as of the Effective Date, and (b) used or generated by Biogen solely in connection with its research and development of BIIB069 prior to the Effective Date.  The Acquired Know-How is described on Part 2 of Schedule A attached hereto.

 

“Acquired Patent Rights” means (a) the patent applications listed on Part 1 of Schedule A attached hereto and (b) any divisionals, continuations, continuations-in-part, substitutions, patents of addition, reissues, extensions, re-examinations or renewal applications related to, or claiming priority to, the foregoing (including any supplemental patent certificates) or any confirmation patent or registration patent, and all patents issuing on, and all foreign counterparts of, any of the foregoing.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

“Affiliate” means, with respect to any Person, any other Person which controls, is controlled by or is under common control with such Person, for as long as such control exists.

 

For purposes of this definition, “control” shall mean the direct or indirect ownership of more  than fifty percent (50%) of the voting or economic interest of a Person, or the power, whether pursuant to contract, ownership of securities or otherwise, to direct the management and policies of a Person.  For clarity, once a Person ceases to be an Affiliate of a Party, then, without any further action, such Person shall cease to have any rights under this Agreement by reason of being an Affiliate of such Party.

 

“Annual Net Sales” shall mean the cumulative worldwide Net Sales of an applicable Product in any Calendar Year.

 

“Antibody” means any immunoglobulin molecule [***] whether in [***] or any other [***] form, and will include (a) any [***] (b) any [***], and (c) any [***].

 

“Applicable Multiplier” means the percentage used to determine the portion of the milestone payments and royalty payments due and payable by Biogen with respect to any Biogen Products developed and commercialized by Biogen pursuant to Section 8.3(e)(iv) following termination of this Agreement, as determined in accordance with Schedule C attached hereto.

 

“Assigned Contract” means the Contract relating to BIIB069 listed on Part 3 of Schedule A attached hereto to which Biogen or its Affiliates are bound including, without limitation, (a) all rights to receive payments under such Contract on and after the Effective Date, and (b) all of the claims or rights of action of Biogen or its Affiliates existing as of the Effective Date or arising after the Effective Date under such Contract.

 

“Background Licensed Patent Rights” means any Patent Rights that are (a) owned or Controlled by Biogen or its Affiliates as of the Effective Date and (b) actually used by Biogen or its Affiliates to manufacture BIIB069 prior to the Effective Date.  For purposes of clarity, Background Licensed Patent Rights excludes the Acquired Patent Rights.

 

“Background Sublicensed Intellectual Property” means the intellectual property rights relating to BIIB069 that are in-licensed by Biogen pursuant to the Retained Contracts.

 

“BIIB069” means the Antibody described on Schedule F attached hereto.

 

“BLA” or “Biologics License Application” means a request for permission to introduce, or deliver for introduction, a biologic product into interstate commerce pursuant to the FDCA.

 

“Business Day” means a day other than Saturday, Sunday or any day on which commercial banks located in New York, New York are authorized or obligated by Law to close.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

“Calendar Quarter” means the period beginning on the Effective Date and ending on the last day of the Calendar Quarter in which the Effective Date falls, and thereafter each successive period of three (3) consecutive calendar months ending on March 31, June 30, September 30 and December 31; provided, that, the final Calendar Quarter shall end on the last day of the Term.

 

“Calendar Year” means the period beginning on the Effective Date and ending on December 31 of the Calendar Year in which the Effective Date falls, and thereafter each successive period of twelve (12) months commencing on January 1 and ending on December 31; provided, that, the final Calendar Year shall end on the last day of the Term.

 

“CDA” means the Confidentiality Agreement dated as of November 19, 2015 (the “CDA Effective Date”) by and between Kiniksa and Biogen.

 

“Clinical Trial” means, collectively, any Phase I Clinical Trial, Phase II Clinical Trial or Phase III Clinical Trial.

 

“Combination Product” means (a) any single product in finished form containing as active ingredients both (i) a Product and (ii) one or more other pharmaceutically-active compounds or substances; (b) any Product sold with another product(s) for a single invoice price; or (c) any Product sold as part of a bundle with other product(s) or service(s) (i.e., where a Product and such other product(s) or services are sold for a single invoice price or where a discount, rebate or other amount that reduces the price of a Product is provided in exchange for (or otherwise conditioned upon) the purchase of such other product(s) or services), to the extent not described in clause (a) or (b).

 

“Commercialization” or “Commercialize” means any and all activities directed to the offering for sale and sale of an Acquired Antibody or a Product including (a) activities directed to marketing, promoting, detailing, distributing, manufacturing, importing, selling and offering to sell that Acquired Antibody or Product; (b) interacting with Regulatory Authorities regarding the above; and (c) seeking pricing approvals and reimbursement approvals (as applicable) for that Product.  When used as a verb, “to Commercialize” and “Commercializing” means to engage in Commercialization and “Commercialized” has a corresponding meaning.

 

“Commercially Reasonable Efforts” means with respect to the Development and Commercialization of an Acquired Antibody or Product by Kiniksa, the efforts and resources comparable to those undertaken by [***] in pursuing the development and commercialization of a compound that is of a similar market potential or profit potential and at a similar stage of development as such Acquired Antibody or Product.  For purposes of the above, all relevant factors as measured by the facts and circumstances at the time such efforts are due shall be taken into account, including, as applicable and without limitation, mechanism of action; efficacy and safety; product profile; actual or anticipated Regulatory Authority approved labeling; the nature and extent of market exclusivity (including patent coverage, proprietary position and regulatory exclusivity), costs; time required for and likelihood of obtaining Marketing Authorization

 

3

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

(including reimbursement approval); the competitiveness of alternative products in the marketplace; and actual or projected profitability but excluding the effect of any consideration owed to Biogen or its Affiliates under this Agreement.  Without limiting the foregoing, in circumstances where using Commercially Reasonable Efforts as defined above requires Kiniksa to take affirmative action, Kiniksa shall (a) assign responsibility for such obligations to specific employee(s) who are held accountable for progress and monitor such progress, each in a timely manner consistent with the nature of such obligations, (b) set and seek to achieve specific objectives for carrying out such obligations and (c) make and implement decisions and allocate resources designed to advance progress with respect to such objectives.

 

“Completion of Technology Transfer” has the meaning set forth in Schedule G attached hereto.

 

“Contracts” means any and all binding commitments, contracts, purchase orders,  licenses, or other agreements, whether written or oral.

 

“Control” means, with respect to any Know-How or Patent Rights, the possession by a Party of the right to transfer or grant a license, sublicense or other rights to such Know-How or Patent Rights, as provided herein, without violating the terms of any agreement or arrangement with, infringing the Patent Rights of, or misappropriating the proprietary or trade secret information of, any Third Party and without violating any applicable Law.

 

“Court” means any court or arbitration tribunal of the United States, any domestic state, or any foreign country, and any political subdivision thereof.

 

“Cover” means, when referring to an Acquired Antibody or Product: (a) with respect to a patent, that, in the absence of a license granted to a Person under a claim included in such patent, the practice by such Person of a specified activity with respect to such Product or Acquired Antibody would infringe such claim (without regard to the validity or enforceability of such claim), or (b) with respect to a patent application, that, in the absence of a license granted to a Person under a claim included in such patent application, the practice by such Person of a specified activity with respect to such Product or Acquired Antibody would infringe such claim if such patent application were to issue as a patent.

 

“Development” or “Develop” means, with respect to any Acquired Antibody or Product, all non-clinical and clinical development activities with respect to such Acquired Antibody or Product that are undertaken by Kiniksa after the Effective Date, including formulation, process development, manufacturing scale-up, development-stage manufacturing, analytical method validation, manufacturing process validation, cleaning validation, quality assurance/quality control, statistical analysis, report writing, preclinical and clinical studies, clinical trial design and operations, clinical pharmacology studies, health economics and outcomes research studies, pharmacovigilance studies, the preparation and filing of Regulatory Filings and all regulatory affairs related to the foregoing.  When used as a verb, “Developing” means to engage in

 

4

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Development and “Developed” has a corresponding meaning.

 

“Development Cost Breakeven Date” means, with respect to any Biogen Product that is commercialized by Biogen after the effective date of termination pursuant to Section 8.3, the date on which Kiniksa has recouped from the payments made by Biogen pursuant to Section 8.3(e)(iv), an amount equal to (a) [***] plus (b) [***], plus (c) [***].

 

“Development Costs” means the aggregate out-of-pocket and internal costs incurred by Kiniksa, or for its account, determined in accordance with U.S. GAAP and the customary accounting principles of Kiniksa, consistently applied, that are allocable to the Development of an Acquired Antibody and/or Product.

 

“Distributor” means any Third Party which purchases its requirements for a Product in a country from Kiniksa or its Affiliates or licensees and is appointed as a distributor to distribute, market and resell such Product in such country, even if such Third Party is granted ancillary rights to develop, package or obtain regulatory approvals of such Product in order to distribute, market or sell such Product in such country.

 

“Dollar” means United States dollar, and “$” shall be interpreted accordingly.

 

“EMA” means the European Medicines Agency or any successor agency or authority thereto.

 

“Encumbrance” means any encumbrance, claim, mortgage, pledge, assessment, security interest, option, license, right of first refusal or preemptive right, hypothecation, equitable interest, preference, right of possession, deed of trust, lease, lien, levy, restriction on transferability, defect in title, charge or other encumbrance of any kind, whether voluntarily incurred or arising by operation of Law, any obligation to pay Taxes, any conditional sale or title retention agreement or other agreement granting any of the foregoing in the future or otherwise.

 

“Exploit” or “Exploitation” means to research, develop, make, have made, use, offer for sale, sell, import, export or otherwise exploit, or transfer possession of or title in, a compound or product.

 

“FDA” means the United States Food and Drug Administration or any successor agency or authority thereto.

 

“FDCA” means the United States Federal Food, Drug, and Cosmetic Act, as amended.

 

“Field” means any and all uses.

 

“First Commercial Sale” means, with respect to any Product in any country in the

 

5

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Territory, the first sale, transfer or disposition for value to an end user of that Product in that country after Marketing Authorization for that Product has been received in that country; provided, that, the following shall not constitute a First Commercial Sale: (a) any sale to an Affiliate or licensee (unless the Affiliate or licensee is the last entity in the distribution chain of the Product), (b) any transfers of a Product without consideration or for nominal consideration for use in any Clinical Trial, or for any bona fide charitable, compassionate use or indigent patient program purpose where Products are sold at or below cost of goods sold or as a sample.

 

“Force Majeure” means any occurrence beyond the reasonable control of a Party that (a) prevents or substantially interferes with or delays the performance by such Party of any of its obligations hereunder and (b) occurs by reason of any act of God, flood, fire, explosion, earthquake, strike, lockout, labor dispute, casualty or accident, or war, revolution, civil commotion, act of terrorism, blockage or embargo, or any injunction, law, order, proclamation, regulation, ordinance, demand or requirement of any Governmental Entity or of any subdivision, authority or representative of any such Governmental Entity.

 

“FTE” means the equivalent of the work of one employee full time for one year consisting of at least a total of 45.5 weeks or 1,820 hours per year (excluding vacations and holidays).  For purposes of clarity, no one person shall be permitted to account for more than one FTE.

 

“FTE Rate” means [***] per FTE per year.

 

“GLP” or “Good Laboratory Practice” means all applicable then-current standards for laboratory activities for pharmaceuticals, as set forth in the FDA’s Good Laboratory Practice regulations as defined in 21 C.F.R. Part 58 or the Good Laboratory Practice principles of the Organization for Economic Co-Operation and Development (OECD), and such standards of good laboratory practice as are required by the European Union and other organizations and governmental agencies in countries in which a Product is intended to be sold, to the extent such standards are not less stringent than United States Good Laboratory Practice.

 

“GMP” or “Good Manufacturing Practice” means all applicable then-current standards for manufacturing, including, as applicable, (a) the principles detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. §§ 201, 211, 600 and 610 and all applicable FDA guidelines and requirements, (b) European Directive 2003/94/EC for medicines and investigational medicines for human use and the applicable guidelines stated in the Eudralex guidelines, (c) the principles detailed in the applicable ICH guidelines, (d) the conduct of an inspection by a Qualified Person and the execution by such Qualified Person of an appropriate certification of inspection; and (e) the equivalent applicable Law in any relevant country, each as may be amended and applicable from time to time.

 

“Governmental Entity” means any court, tribunal, arbitrator, Regulatory Authority, agency, commission, department, ministry, official or other instrumentality of the United States or other country, or any supra-national organization, or any foreign or domestic, state, county,

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

city or other political subdivision.

 

“IND” means (a) an Investigational New Drug Application (as defined in the FDCA and the regulations promulgated thereunder) or any successor application or procedure required to initiate clinical testing of a therapeutic product in humans in the United States; (b) the equivalent of an Investigational New Drug Application that is required in any other country or region before beginning clinical testing of a therapeutic product in humans in such country or region (including any Clinical Trial Authorization (“CTA”) required to initiate clinical testing of a therapeutic product in humans in the United Kingdom); and (c) all supplements and amendments to any of the foregoing.

 

“Indemnifying Party” means the Biogen Indemnifying Party or the Kiniksa Indemnifying Party, as the case may be.

 

“Indemnified Party” means the Biogen Indemnified Party or the Kiniksa Indemnified Party, as the case may be.

 

“Indication” means any human indication, disease or condition in the Field, which can be treated, prevented, cured or the progression of which can be delayed, excluding an expansion of label claim for an already approved indication.  For example, [***]: (a) [***], or (b) [***].

 

“Initiation” means with respect to a Clinical Trial, the first date that a subject (healthy volunteer or patient) is first dosed in such Clinical Trial.

 

“Inventory” means the inventory of BIIB069 listed as Inventory in Part 4 of Schedule A attached hereto.

 

“Kiniksa Know-How” means any Know-How, other than the Acquired Know-How and the Know-How included in the Background Sublicensed Intellectual Property, that is owned or Controlled by Kiniksa and which relates to, or is used by Kiniksa in connection with, the Development and Commercialization, including the manufacture, use, offer for sale, sale or importation, of any Acquired Antibody or Product.

 

“Kiniksa Patent Rights” means any Patent Rights, other than the Acquired Patent Rights, the Background Licensed Patent Rights and the Patent Rights included in the Background Sublicensed Intellectual Property, that are owned or Controlled by Kiniksa that contain one or more claims that Cover any Acquired Antibody or Product, including the Development, Commercialization, manufacture, use, offer for sale, sale or importation of any such Acquired Antibody or Product.

 

“Kiniksa Third Party Agreement” means any agreement by and between Kiniksa and any Third Party pursuant to which Kiniksa Controls any Kiniksa Know-How and/or Kiniksa Patent Rights.

 

7

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

“Know-How” means, collectively, any knowledge, information, techniques, technology, trade secrets, inventions (whether patentable or not), discoveries, methods, know-how, data and results (including complementarity determining region (CDR) sequence information and pharmacological and toxicological data and results), analytical and quality control data and results, regulatory documents, and other information, compositions of matter, cells, cell lines, assays, animal models and other physical, biological, or chemical material.

 

“Knowledge” means, with respect to Biogen, the actual knowledge of the individuals listed on Schedule H attached hereto.

 

“Law” means any federal, state, local or foreign law, statute, code or ordinance, or any rule or regulation promulgated by any Governmental Entity including all decisions of any Courts having the effect of law in each such jurisdiction.

 

“Liability” means any and all debts, liabilities and obligations, whether known or unknown, asserted or unasserted, determinable or otherwise, accrued or fixed, absolute orcontingent, liquidated or unliquidated, incurred or consequential, or matured or unmatured, including, without limitation, those arising under any Law, Litigation, Order, or Contract.

 

“Litigation” means any suit, action, arbitration, cause of action, claim, complaint, criminal prosecution, investigation, inquiry, demand letter, judicial, arbitration or other administrative proceeding, whether at law or at equity, before or by any Court, Governmental Entity, arbitrator or other tribunal.

 

“Marketing Authorization” means, with respect to a Product, the regulatory approval required by applicable Law to sell such Product in a country or region in the Territory.  For purposes of clarity, (a) “Marketing Authorization” in the United States means final approval of an NDA, sNDA or BLA permitting marketing of such Product in interstate commerce in the United States; and (b) “Marketing Authorization” in Europe means marketing authorization for such Product granted either by a Regulatory Authority in any country in Europe or by the EMA pursuant to Council Directive 2001/83/EC, as amended, or Council Regulation 2309/93/EEC, as amended.

 

“NDA” means a New Drug Application, as defined in the FDCA and regulations promulgated thereunder or any successor application or procedure required to sell any Product in the United States.

 

“Net Sales” means, with respect to a Product in any country in the Territory, the gross amount invoiced by Kiniksa, its Affiliates, or licensees for the sale or other disposition of such Product in such country to Third Parties, including Distributors (“Gross Sales”), less the following deductions (such deductions, collectively, “Sales Returns and Allowances”):

 

(a)            sales returns and allowances actually paid, granted or accrued on the Product, including trade, quantity, prompt pay and cash discounts and any other adjustments, including

 

8

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

those granted on account of price adjustments or billing errors;

 

(b)              credits or allowances given or made for rejection, recall, return or wastage replacement of Product or for rebates or retroactive price reductions (including Medicare, Medicaid, managed care and similar types of rebates and chargebacks);

 

(c)           taxes, duties or other governmental charges levied on or measured by the billing amount for such Product, as adjusted for rebates and refunds, but which shall not include any tax, duty, or other charge imposed on or measured by net income (however denominated) or any franchise taxes, branch profits taxes, or similar tax; and

 

(d)         charges for freight, customs and insurance directly related to the distribution of the Product and wholesaler and Distributor administration fees;

 

in each case, to the extent such deductions: (i) are reasonable and customary, (ii) included in the gross invoiced sales price for the Product or otherwise directly paid, allowed, accrued, or incurred by such Party, its Affiliates or licensees with respect to the sale of such Product (iii) applicable and in accordance with standard allocation procedures, (iv) have not already been deducted or excluded, (v) are incurred in the ordinary course of business in type and amount consistent with good industry practice, and (vi) are determined in accordance with, and as recorded in revenues under, US GAAP.

 

For purposes of clarity, (1) Net Sales shall not be imputed to transfers of Product (i) without consideration or for nominal consideration for use in any Clinical Trial or any other human studies reasonably necessary to comply with any applicable Law or regulation or any request by a Regulatory Authority, (ii) for any bona fide charitable, compassionate use or indigent patient or other similar program purpose where Products are sold at or below cost of goods sold, or (iii) in commercially reasonable quantities as samples for promotional purposes; (2) in the case of any transfer of any Product between or among Kiniksa and its Affiliates or licensees for resale, Net Sales shall be determined based on the sale made by such Affiliate or licensee to a Third Party (including any Distributors).

 

Notwithstanding the foregoing, in the event a Product is sold as a component of a Combination Product in any country in the Territory in any Calendar Quarter, Net Sales shall be calculated by multiplying the Net Sales of the Combination Product (calculated in the same manner as set forth above as if the Combination Product were a Product) in such country during such Calendar Quarter by the fraction A/(A+B), where A is the average Net Sales of the Product when sold separately in such country during such Calendar Quarter and B is the average Net Sales of the other pharmaceutically active compounds or substances included in the Combination Product (calculated in the same manner as set forth above as if the other pharmaceutically active compounds or substances were a Product) when sold separately in such country during such Calendar Quarter.  In the event that no separate sales of the Product or any other pharmaceutically active compounds or substances included in a Combination Product are made by Kiniksa, its Affiliates or licensees in a country during a Calendar Quarter in which such

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Combination Product is sold in such country, the average Net Sales in the above described equation shall be replaced with reasonable good faith estimate of the fair market value, as mutually determined by the Parties, of the Product and each of the other pharmaceutically active compounds or substances included in such Combination Product.

 

“Order” means any judgment, order, writ, injunction, ruling, stipulation, determination, award or decree of or by, or any settlement under the jurisdiction of, any Court or Governmental Entity.

 

“OSMR” means the oncostatin M receptor, one of the receptor proteins for oncostatin M that in humans is encoded by the OSMR gene.

 

“Patent Rights” means the rights and interests in and to issued patents and pending patent applications (which, for purposes of this Agreement, include certificates of invention, applications for certificates of invention and priority rights) in any country or region, including any divisionals, continuations, continuations-in-part, substitutions, patents of addition, reissues, extensions, re-examinations or renewal applications related to, or claiming priority to, the foregoing (including any supplemental patent certificates) or any confirmation patent or registration patent, and all patents issuing on, and all foreign counterparts of, any of the foregoing.

 

“Permitted Encumbrances” means (a) statutory liens with respect to the payment of Taxes, in all cases which are not yet due or payable; and (b) statutory liens of landlords, suppliers, mechanics, carriers, materialmen, warehousemen, service providers or workmen and other similar liens imposed by applicable Law created in the ordinary course of business and which liens (i) do not constitute a default or breach under the Assigned Contract and (ii) have not had, and would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Purchased Assets.

 

“Person” means any natural person, corporation, general partnership, limited partnership, limited liability company, proprietorship, joint venture, other business organization, trust, entity, union, association or Governmental Entity.

 

“Phase I Clinical Trial” means a human clinical trial for any Product in any country that would satisfy the requirements of 21 CFR 312.21(a).  For clarity, a Phase Ia or Phase Ib clinical trial shall be classified as a “Phase I Clinical Trial.”

 

“Phase II Clinical Trial” means a human clinical trial conducted in any country that would satisfy the requirements of 21 CFR 312.21(b) and is intended to explore one or more doses, dose response, and duration of effect, and to generate initial evidence of clinical activity and safety, for any Product in the target patient population.  For clarity, a Phase IIa or Phase IIb clinical trial shall be classified as a “Phase II Clinical Trial.”

 

“Phase III Clinical Trial” means a clinical trial in an extended human patient population

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

designed to obtain data determining efficacy and safety of any Product to support Marketing Authorizations in the proposed therapeutic Indication, as more fully defined in 21 C.F.R. §312.21(c), or its successor regulation, or the equivalent in any foreign country.  For clarity, a Phase IIIa or Phase IIIb clinical trial shall be classified as a “Phase III Clinical Trial.”

 

“Product” means any product (a) that contains or incorporates any Acquired Antibody or (b) the manufacture, use or sale of which is Covered by a Valid Claim.

 

“Product Trademarks” means any trademark used by Kiniksa in connection with the Commercialization of any Product.

 

“Regulatory Authority” means any national, supra-national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity with authority over the distribution, importation, exportation, manufacture, production, use, storage, transport, clinical testing, marketing, pricing or sale of a Product, including the FDA, the EMA, and the European Commission.

 

“Regulatory Filing” means, collectively: (a) any IND, CTA, MAA, BLA, establishment license application, drug master file, application for designation as an “Orphan Drug” under the Orphan Drug Act, for “Fast Track” status under Section 506 of the FDCA (21 U.S.C. § 356) or for a Special Protocol Assessment under Section 505(b)(4)(B) and (C) of the FDCA (21 U.S.C. § 355(b)(4)(B)) and all other similar filings (including counterparts of any of the foregoing in any country or region in the Territory); (b) all supplements and amendments to any of the foregoing; and (c) all data and other information contained in, and correspondence relating to, any of the foregoing.

 

“Retained Contracts” means the Contracts listed on Schedule E attached hereto.

 

“Royalty Term” means with respect to each Product, the period beginning on the date of First Commercial Sale of such Product in any country in the Territory and ending on the latest of (a) the expiration of the last to expire Valid Claim that Covers the composition of matter, manufacture, use or sale of such Product in such country, (b) the expiration of regulatory exclusivity in such country, and (c) ten (10) years from the date of the First Commercial Sale of such Product in such country.

 

“Tax” or “Taxes” means all income, excise, gross receipts, ad valorem, sales, use, employment, environmental, franchise, profits, gains, property, transfer, value added, payroll, escheat or abandoned property, intangibles or other taxes, fees, stamp taxes, duties, charges, levies or assessments of any kind whatsoever (whether payable directly or by withholding), together with any interest and any penalties, additions to tax or additional amounts imposed by any Governmental Entity with respect thereto, whether as a primary obligor, as a result of being a transferee, successor or a member of an affiliated, consolidated, unitary, combined or other group, by contract, pursuant to Law or otherwise.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

“Territory” means worldwide.

 

“Third Party” means a Person other than Kiniksa, Biogen or their respective Affiliates.

 

“Third Party Intellectual Property” means any intellectual property rights generated prior to the Effective Date under a Contract between Biogen or its Affiliates and a Third Party in the Exploitation of the Acquired Antibody that are not Controlled by Biogen or its Affiliates.

 

“US GAAP” means United States Generally Accepted Accounting Principles.

 

“Valid Claim” means (a) an issued and unexpired patent claim within the Acquired Patent Rights, the Kiniksa Patent Rights, the Background Licensed Patent Rights or the Background Sublicensed Intellectual Property; or (b) a claim of a pending patent application within the Acquired Patent Rights, the Kiniksa Patent Rights, the Background Licensed Patent Rights or the Background Sublicensed Intellectual Property and that, in the case of any such patent application, was filed in good faith, has not been pending for more than [***]) years, and has not been abandoned or finally disallowed.

 

Additional Definitions.  In addition, each of the following definitions shall have the respective meanings set forth in the section of this Agreement indicated below:

 

	
Definition
    	
 
    	
Section
    
	
 
    	
 
    	
 
    
	
Agreement
    	
 
    	
Preamble
    
	
Amgen
    	
 
    	
2.5.2
    
	
Amgen Agreement
    	
 
    	
2.5.2
    
	
Annual [***]
    	
 
    	
3.3.2
    
	
Assigned Kiniksa Agreements
    	
 
    	
8.3(e)(ii)
    
	
Assumed Liabilities
    	
 
    	
2.3
    
	
ATCC Agreement
    	
 
    	
Schedule E
    
	
Bioequivalence
    	
 
    	
5.3.2(c)
    
	
Bioequivalent
    	
 
    	
5.3.2(c)
    
	
Biogen
    	
 
    	
Preamble
    
	
Biogen Indemnified Parties
    	
 
    	
9.2
    
	
Biogen Product
    	
 
    	
8.3(e)(iv)
    
	
CDA Effective Date
    	
 
    	
CDA definition
    
	
Change of Control Transaction
    	
 
    	
3.4.2
    
	
Claims
    	
 
    	
9.2
    
	
Competing Drug
    	
 
    	
5.3.2(c)
    
	
Confidential Information
    	
 
    	
7.1
    
	
CTA
    	
 
    	
IND definition
    
	
Data Package
    	
 
    	
3.4.1(b)
    
	
Diligence Period
    	
 
    	
3.4.1(c)
    
	
Effective Date
    	
 
    	
Preamble
    

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

	
Exchange Act
    	
 
    	
3.4.2
    
	
Excluded Assets
    	
 
    	
2.2
    
	
Excluded Liabilities
    	
 
    	
2.4
    
	
Exclusivity Period
    	
 
    	
2.7
    
	
Exclusivity Term
    	
 
    	
3.4.1(d)
    
	
Exempt Transaction
    	
 
    	
3.4.3
    
	
Gross Sales
    	
 
    	
Definition of Net Sales
    
	
ICH
    	
 
    	
3.2
    
	
Infringement
    	
 
    	
4.2.1
    
	
Infringement Notice
    	
 
    	
4.2.1
    
	
Infringement Response
    	
 
    	
4.2.2
    
	
Issuing Party
    	
 
    	
7.5.2
    
	
Kiniksa
    	
 
    	
Preamble
    
	
Kiniksa Election Notice
    	
 
    	
8.4
    
	
Kiniksa Indemnified Parties
    	
 
    	
9.3
    
	
Kiniksa Supply Agreement
    	
 
    	
8.3(e)(vi)
    
	
Losses
    	
 
    	
9.2
    
	
Negotiation Notice
    	
 
    	
3.4.1(b)
    
	
Non-Assignable Kiniksa Agreements
    	
 
    	
8.3(e)(ii)
    
	
Notice Review Period
    	
 
    	
3.4.1(b)
    
	
Party/Parties
    	
 
    	
Preamble
    
	
Patent Assignment Agreement
    	
 
    	
2.6.2
    
	
Purchased Assets
    	
 
    	
2.1
    
	
Recovery
    	
 
    	
4.2.5
    
	
Release
    	
 
    	
7.5.2
    
	
Report
    	
 
    	
3.3.1
    
	
Retained Contract Payments
    	
 
    	
5.4
    
	
Reviewing Party
    	
 
    	
7.5.2
    
	
Right of First Negotiation
    	
 
    	
3.4
    
	
ROFN Transaction
    	
 
    	
3.4.1(a)
    
	
Sales Returns and Allowances
    	
 
    	
Definition of Net Sales
    
	
Sigma Agreement
    	
 
    	
Schedule E
    
	
Technology Transfer Fees
    	
 
    	
5.1.2
    
	
Term
    	
 
    	
8.1
    
	
Transfer Taxes
    	
 
    	
5.8.2
    
	
Trigger Notice
    	
 
    	
3.4.1(a)
    
	
Unsolicited Offer
    	
 
    	
3.4.1(b)
    
	
Upfront Fee
    	
 
    	
5.1.1
    

 

1.2                               Construction of Certain Terms and Phrases.  Unless the context of this Agreement otherwise requires: (a) words of any gender include each other gender; (b) words using the singular or plural number also include the plural or singular number, respectively; (c) the terms “hereof,” “herein,” “hereby” and derivative or similar words refer to this entire

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Agreement; (d) the terms “Article” or “Section” refer to the specified Article or Section of this Agreement; (e) the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or”; and (f) the term “including” means “including without limitation.” Whenever this Agreement refers to a number of days, such number shall refer to calendar days unless Business Days are specified.

 

2.          PURCHASE AND SALE OF ASSETS

 

2.1                               Purchase and Sale of Assets.  Upon the terms and subject to the conditions set forth in this Agreement, Biogen hereby sells, conveys, assigns, transfers and delivers to, and shall cause its Affiliates to sell, convey, assign, transfer and deliver to, Kiniksa, and Kiniksa hereby purchases and acquires from each of Biogen or its Affiliates, as the case may be, all of Biogen’s and its Affiliates’ right, title and interest in and to the following assets described or set forth on Schedule A attached hereto (collectively, the “Purchased Assets”) free and clear of all Encumbrances (other than Permitted Encumbrances):

 

(a)                                 the Acquired Patent Rights;

 

(b)                                 the Acquired Know-How;

 

(c)                                  the Assigned Contracts; and

 

(d)                                 the Inventory.

 

2.2                               Excluded Assets.  Notwithstanding the provisions of Section 2.1, no right, title or interest is being sold, assigned, transferred, conveyed or delivered to Kiniksa in or to (a) any of the property and assets of Biogen that are not listed on Schedule A or (b) any rights or claims of Biogen under this Agreement (collectively, the “Excluded Assets”).

 

2.3                               Assumed Liabilities.  Subject to the terms and conditions of this Agreement, on and after the Effective Date, Kiniksa shall assume and agree to pay, perform and discharge the following Liabilities of Biogen (the “Assumed Liabilities”):

 

(a)                                 all Liabilities and obligations resulting from the ownership, use, operation or maintenance of the Purchased Assets and/or the Exploitation of any Acquired Antibody and/or Product, by Kiniksa to the extent that such Liability arises from any event, condition or circumstance occurring after the Effective Date and not resulting from any breach by Biogen of any of its obligations under this Agreement;

 

(b)                                 all Liabilities arising under the Assigned Contracts after the Effective Date to the extent that such Liabilities are not attributable to any failure by Biogen or any of its Affiliates to comply with the terms thereof prior to the Effective Date;

 

(c)                                  all Liabilities for Transfer Taxes described in Section 5.8.2; and

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

all Taxes imposed on the Purchased Assets or that otherwise arise with respect to the use of the Purchased Assets, in each case, for any taxable period (or portion thereof) beginning after the Effective Date.

 

2.4                               Excluded Liabilities.  Biogen shall retain, and shall be responsible for paying, performing and discharging when due, and Kiniksa shall not assume or have any responsibility for paying, performing or discharging, any Liabilities of Biogen and its Affiliates other than the Assumed Liabilities (the “Excluded Liabilities”).  Without limiting the foregoing, neither Kiniksa nor its Affiliates shall be obligated to assume, and neither of them does assume, and each of them hereby disclaims responsibility for, any of the following Liabilities of Biogen and its Affiliates:

 

(a)                                 any Liability attributable to any asset, property or right that is not included in the Purchased Assets;

 

(b)                                 any Liability attributable to the research, development or other activity conducted by Biogen or any Affiliate related to the Acquired Antibody on or prior to the Effective Date;

 

(c)                                  all Liabilities arising under the Assigned Contracts prior to the Effective Date to the extent that such Liabilities are not attributable to any failure by Kiniksa or any of its Affiliates to comply with the terms thereof after the Effective Date; and

 

(d)                                 all Taxes imposed on the Purchased Assets or that otherwise arise with respect to the use of the Purchased Assets, in each case, for any taxable period (or portion thereof) ending on or prior to the Effective Date; all Taxes of Biogen or any of its Affiliates that are or may become payable with respect to all taxable periods, including any Liability for such Taxes that arise as a result of the transactions contemplated by this Agreement but excluding any Transfer Taxes described in Section 5.8.2; and, except as otherwise provided in Section 5.8.3, all Taxes required to be withheld or deducted by applicable Law in connection with the transactions contemplated by this Agreement.

 

2.5                               License Grants; Obligations of Kiniksa Under Retained Contracts.

 

2.5.1                     Grant of License/Sublicense by Biogen to Kiniksa.  Biogen hereby grants, on behalf of itself and its Affiliates, to Kiniksa a non-exclusive, sublicensable (through multiple tiers of sublicensees, but subject to Section 3.4), license under the Background Licensed Patent Rights and sublicense under the Background Sublicensed Intellectual Property, in each case, for the Exploitation of Acquired Antibodies and/or Products for use in the Field and in the Territory.

 

2.5.2                     Grant of License by Kiniksa to Biogen.  Kiniksa hereby grants, on behalf of itself and its Affiliates, to Biogen a worldwide, non-exclusive, fully paid, royalty-free, sublicensable (through multiple tiers of sublicensees), perpetual license (which is irrevocable,

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

and not subject to termination for any reason) under the Acquired Patent Rights in the Territory, wherein such license is limited to making, using or selling any Antibody or antigen binding portion of an Antibody that [***] OSMR.  Kiniksa acknowledges that Biogen and/or its Affiliates is/are obligated under the Asset Purchase Agreement between Amgen Inc. (“Amgen”) and Biogen, dated as of August 12, 2013 (the “Amgen Agreement”), to sublicense such Acquired Patent Rights to Amgen.

 

2.5.3                     Obligations of Kiniksa Under Retained Contracts.  Kiniksa hereby agrees to be bound by and comply with, and agrees to cause its Affiliates and sublicensees to be bound by and comply with, all of the terms, conditions, obligations, and any restriction of rights, applicable to a sublicensee of Biogen under either of the Retained Contracts.  Without limiting the foregoing, Kiniksa hereby agrees as follows in connection with the exercise of its rights and the performance of its obligations under this Agreement:

 

(a)                                 Specific Obligations of Kiniksa under ATCC Agreement.

 

(i)                                     All capitalized terms used in this Section 2.5.3(a) and not otherwise defined shall have the respective meanings set forth in the ATCC Agreement.

 

(ii)                                  In accordance with Section 8.3 of the ATCC Agreement, Kiniksa shall comply with, and shall contractually obligate its Related Parties to comply with, all United States laws and regulations controlling the export and re-export of certain commodities and technical data, including without limitation, all Export Administration Regulations of the United States Department of Commerce (as presently promulgated or hereinafter modified or amended).

 

(iii)                                   In accordance with Section 8.4 of the ATCC Agreement, Kiniksa shall obtain, and shall contractually obligate its Related Parties to obtain, all authorities, consents and clearances required for the purchase, importation, exportation transportation, distribution, demonstration and Sale of Products under this Agreement that are Biogen Products for purposes of the ATCC Agreement to and within the Territory.  Kiniksa shall further comply with, and shall contractually obligate its Related Parties to comply with, all applicable foreign and domestic, federal, state and local statutes, ordinances and regulations in connection with its purchase, importation, exportation transportation, distribution, demonstration and Sale of Products under this Agreement that are Biogen Products for purposes of the ATCC Agreement.

 

(iv)                              To the extent Kiniksa uses any Biological Materials in the Development and/or Commercialization of any Acquired Antibody or Product under this Agreement, Kiniksa certifies, and shall contractually obligate its Related Parties to certify, in accordance with Section 11.1 of the ATCC Agreement, that Kiniksa and its Related Parties, as applicable, shall:

 

(A)                               ensure that only qualified personnel work with such Biological Material in proper facilities;

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

(B)                               provide sufficient internal security to assure access to such Biological Material only by those individuals authorized to work with them;

 

(C)                               not transfer, export, resell, or otherwise dispose of any such Biological Material to any Third Parties under any circumstances without written authorization by Biogen and ATCC and the appropriate government agencies or as explicitly provided for in the ATCC Agreement;

 

(D)                               not permit access to such Biological Materials by foreign entities or individuals when to do so would be in violation of export control laws;

 

(E)                                comply with all applicable federal, state or local laws and regulations pertaining to such Biological Material or their handling, storage, use transportation; and

 

(F)                                 unless requested otherwise by Biogen or ATCC, destroy all such Biological Material according to accepted practices for destruction of biohazardous material upon completion of work or expiration or termination of this Agreement or a subsequent license with Biogen for the ATCC Materials, whichever occurs first, as set forth in ARTICLE 12 of the ATCC Agreement.

 

(b)                                 Specific Obligations of Kiniksa under Sigma Agreement.

 

(i)                                     All capitalized terms used in this Section 2.5.3(b) and not otherwise defined shall have the respective meanings as set forth in the Sigma Agreement.

 

(ii)                                  Kiniksa hereby agrees that it shall be bound by the terms of the Sigma Agreement set forth on Schedule B attached hereto.

 

(iii)                               Kiniksa hereby further agrees, in accordance with Section 2.2 of the Sigma Agreement, that each sublicense granted by Kiniksa or its Affiliates, their sublicensees or their further sublicensees (whether direct or indirect) shall include the first two sentences of Section 2.5 of the Sigma Agreement and the terms and conditions set forth in Exhibit B of the Sigma Agreement (each of which is set forth on Schedule B attached hereto).

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

2.6                               Support by Biogen.

 

2.6.1                    Technology Transfer.  Biogen shall transfer to Kiniksa the Acquired Know-How and the Inventory listed on Parts 2 and 4 of Schedule A, respectively, in accordance with the protocols and timeframes listed on Schedule G attached hereto.  The Completion of Technology Transfer for purposes of Schedule G shall be deemed to have occurred on the first anniversary of the Effective Date, unless the Parties otherwise agree that such transfer is completed upon an earlier date (as determined by the completion of activities provided on such Schedule G).  Subject to Section 2.6.4, to the extent reasonably requested by Kiniksa, [***] at any time prior to the [***] anniversary of the Effective Date, Biogen shall provide reasonable consulting support to Kiniksa in connection with its Exploitation of Products.  Kiniksa acknowledges that (a) any materials comprising Inventory transferred by Biogen to Kiniksa under this Agreement are experimental in nature and may have unknown characteristics and therefore agrees to use prudence and reasonable care in the use, handling, storage, transportation and disposition and containment of any such materials and (b) if Kiniksa chooses to use such materials in any human application, including in the conduct of any Clinical Trial, it shall do so at its own risk.

 

2.6.2                     Patent Rights Transfer.  Promptly (and in no event later than thirty (30) days) following the Effective Date, Biogen shall provide Kiniksa, or Kiniksa’s designated attorneys, with copies of the file histories and supporting data of the pending patent application (provisional and otherwise) within the Acquired Patent Rights in Biogen’s possession, and shall promptly take any actions necessary to obtain and provide to Kiniksa, or Kiniksa’s designated attorneys, copies of any such file histories not in Biogen’s possession; provided, that, Biogen shall use reasonable efforts to ensure that such copies of the file histories will be complete. Additionally, Biogen shall, from time to time, take such actions as are reasonably requested by Kiniksa to perfect the transfer of Biogen’s right, title and interest in the Acquired Patent Rights to Kiniksa, including the execution of (a) any documents needing inventor signature, (b) the patent assignment agreement attached hereto as Exhibit A (the “Patent Assignment Agreement”) and (c) any other patent assignments that may be reasonably required in any other jurisdiction.

 

2.6.3                     Other Cooperation.  Subject to Section 2.6.4, Biogen agrees to use reasonable efforts to (a) make its employees, agents and consultants reasonably available to, and at the expense of, Kiniksa (or to Kiniksa’s authorized attorneys, agents or representatives), and provide contact information in Biogen’s possession and control with respect to the listed inventors of the Acquired Patent Rights, to the extent, in any case, reasonably necessary to enable Kiniksa or its designees to undertake preparation of U.S. and foreign applications claiming priority to Acquired Patent Rights and prosecution and maintenance of such applications.

 

2.6.4                     Cost of Biogen Support.  The Parties hereby agree that the consulting support and other cooperation activities provided by Biogen under Sections 2.6.1 and 2.6.3 shall be provided at Biogen’s sole expense for up to [***] hours of such consulting support and cooperation activities and thereafter at Kiniksa’s sole expense (including Biogen’s employee

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

costs at the FTE Rate).

 

2.6.5                     Maintenance of Retained Contracts.  Biogen agrees that it will not, and will ensure that its Affiliates do not, without Kiniksa’s prior written consent (a) sell, assign, transfer, convey, deliver or otherwise divest its interests in any of the Retained Contracts to a Third Party, (b) mortgage or otherwise encumber its interests in any of the Retained Contracts, in a manner that adversely affects, or would reasonably be expected to adversely affect, Kiniksa’s rights or obligations under this Agreement, (c) amend any of the Retained Contracts in a manner that adversely affects the rights granted to Kiniksa under this Agreement or (d) undertake any action that would constitute a material breach of, and allow the Third Party that is a party to any Retained Contract to terminate, any Retained Contract.

 

2.6.6                     Completeness of Patent Rights and Know-How.  Except as set forth in Schedule I attached hereto, Biogen agrees that, if at any time after the Effective Date, Biogen becomes aware (including as a result of written notice from Kiniksa) and determines that any Patent Rights or Know-How that (a) were owned or Controlled by Biogen as of the Effective Date and used by Biogen in, and necessary for, the Exploitation of BIIB069 as it existed as of the Effective Date were not included in the Acquired Patent Rights or Acquired Know-How or (b) were owned by Biogen or licensed to Biogen as of the Effective Date as part of the Background Licensed Patent Rights or Background Sublicensed Intellectual Property, as applicable, and were not included in the license grant to Kiniksa in Section 2.5.1, then Biogen shall promptly notify Kiniksa of such determination.  Biogen shall promptly take such actions as may be reasonably necessary to deliver such Patent Rights or Know-How, as applicable, to Kiniksa, in a manner consistent with the assignment and delivery terms of this Agreement applicable to Acquired Patent Rights or Acquired Know-How, as the case may be, or license such Patent Rights or Know-How to Kiniksa as Background Licensed Patent Rights or Background Sublicensed Intellectual Property, as the case may be, in a manner consistent with Section 2.5.1.

 

2.7                               Exclusivity.  In consideration of the transactions contemplated hereby, during the period beginning on the Effective Date and, subject to Section 8.3(b) of this Agreement, continuing until [***] (the “Exclusivity Period”), neither Kiniksa nor any of its Affiliates shall, directly or indirectly, (i) conduct any activity, either on its own or for its benefit, or with, for the benefit of, or sponsored by, any Third Party, or grant any license to any Third Party to utilize any Know-How or Patent Rights owned or controlled by Kiniksa or any of its Affiliates, that, in any case, involves the identification, generation, research, development, manufacture, commercialization, sales, marketing, promotion or distribution of any compound or biologic that [***] or (ii) appoint, grant any right or license to or otherwise authorize any Third Party to perform any of the foregoing activities, other than, in any such case, the Development and Commercialization of Acquired Antibodies and Products pursuant to this Agreement (whether by sale, license, sublicense or other transfer).

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

3.          DEVELOPMENT AND COMMERCIALIZATION OF PRODUCTS

 

3.1                               Responsibility.  Kiniksa shall have the sole right and responsibility, at its sole cost and expense, for the conduct of all Development and Commercialization activities applicable to Acquired Antibodies and Products for use in the Field and in the Territory after the Effective Date, including without limitation, (a) all pre-marketing, marketing, promotion, sales, distribution, import and export activities (including securing reimbursement, sales and marketing and conducting any post-marketing trials or databases and post-marketing safety surveillance); (b) making all Regulatory Filings for any Acquired Antibody and/or Product and otherwise seeking all Marketing Authorization for any Product within the Territory, as well as all correspondence and communications with Regulatory Authorities regarding such matters; (c) conducting all manufacturing development and/or manufacturing activities with respect to the Acquired Antibodies and Products; (d) reporting of all adverse events to Regulatory Authorities if and to the extent required by applicable Law; (e) submitting applications for reimbursement with respect to any Product in any country in the Territory and (f) booking all sales of Products in the Territory.

 

3.2                               Diligence.  Kiniksa shall use Commercially Reasonable Efforts to Develop and Commercialize all Acquired Antibodies and Products and to commit such resources (including employees, consultants, contractors, facilities, equipment and materials) as are necessary to conduct such Development and Commercialization activities.  Kiniksa shall perform its obligations under this Agreement in good scientific manner and in compliance with all applicable Law.  For purposes of clarity, with respect to each Development and/or Commercialization activity that will or would reasonably be expected to be submitted to a Regulatory Authority in support of a Regulatory Filing or Marketing Authorization, Kiniksa shall comply in all material respects with GLPs, GMPs or Good Clinical Practices (or, if and as appropriate under the circumstances, International Council for Harmonisation (“ICH”) guidance or other comparable regulation and guidance of any Regulatory Authority in any country or region in the Territory).

 

3.3                               Reports.

 

(b)                                                                                                                                 Records; Reports.  Kiniksa shall (a) maintain records of its Development and Commercialization activities with respect to Acquired Antibodies and Products under this Agreement in sufficient detail and in good scientific manner, which shall reflect work performed and results achieved in the conduct of such Development and Commercialization activities and keep Biogen reasonably informed regarding the Development and Commercialization activities conducted with respect to Acquired Antibodies and Products by providing Biogen with reports at least [***] summarizing the activities undertaken by Kiniksa, its Affiliates and its licensees for the relevant [***] period (each, a “Report”).

 

3.3.1                     Content of Reports.  Any Reports provided pursuant to Section 3.3.1 will include at least information regarding: (a) completed activities with respect to the Development of Acquired Antibodies and Products as well as the anticipated Development activities planned in the subsequent [***]; (b) activities with respect to the milestone events described in Section 5.2 including, when such milestone events are expected to be achieved and whether or not such

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

milestone events have been achieved; (c) an updated list of the Acquired Patent Rights or Kiniksa Patent Rights; and (d) the anticipated date and actual date, as applicable, of the First Commercial Sale of each Product in each country of the Territory; provided, however, that after a Product receives Marketing Authorization, the information required in (a) will only need to be provided [***] and will include planned activities for the subsequent [***].  In addition, in order to enable Biogen to prepare its quarterly and annual public disclosures regarding Biogen’s results of operations, on a Product- by-Product basis, upon the earlier of (i) [***] year prior to the anticipated First Commercial Sale of such Product in any country in the Territory, or (ii) the date of Kiniksa’s submission of a Regulatory Filing for a Product in such country, and on a [***] basis thereafter, Kiniksa shall prepare a commercialization report, which report shall include a timeline for achieving First Commercial Sale, a non-binding [***] good faith rolling forecast of Gross Sales and Net Sales of Products in the Field in the Territory, broken down by Calendar Quarters (such forecast, an “Annual [[***]]”).  Thereafter, Kiniksa shall provide to Biogen an updated Annual [***] each Calendar Year of the Term.

 

3.4                               Right of First Negotiation.  Biogen shall have a right of first negotiation, as provided in this Section 3.4, to negotiate with Kiniksa for an agreement providing for the grant to Biogen or its Affiliates of the right to Exploit any Product in the Field and in the Territory under the circumstances described below (each, a “Right of First Negotiation”).

 

3.4.1                     Procedure.

 

(a)                                 If Kiniksa and/or an Affiliate determines to seek or seeks to (including without limitation by determination of its Board of Directors or management and/or through the commencement of negotiations), directly or indirectly through Kiniksa and/or an Affiliate, (i) grant a license or sublicense to a Third Party to Exploit any Product, or (ii) assign, transfer or sell to any Third Party all or any portion of its rights to Exploit any Product, including through a Change of Control Transaction (as defined in Section 3.4.2 below), but excluding any Exempt Transaction (as defined in Section 3.4.3 below) (each transaction described in (i) or (ii) above, a “ROFN Transaction”), then Kiniksa will notify Biogen in writing which notice shall include a description of the assets or products that are the subject of the ROFN Transaction and provide to Biogen (A) a confidential summary of the Product and any other products and programs that are part of the ROFN Transaction; provided, that, solely to the extent that (y) the ROFN Transaction is with respect to a Change of Control Transaction involving an Unsolicited Offer (as defined below) and (z) [***] of any other products and programs of Kiniksa (other than the Product) if the Board of Directors or similar governing body of Kiniksa determines in good faith, after consultation with outside counsel, that such action would be [***], (B) the intended scope, if applicable (i.e., field and territory), and form of the ROFN Transaction and (C) the Notice Review Period applicable to such ROFN Transaction as provided in Section 3.4.1(b)(i) or (ii) below (each a “Trigger Notice”).

 

(b)                                 If Biogen desires to evaluate a ROFN Transaction after receipt of the Trigger Notice, Biogen will provide Kiniksa with a written notice (each, a “Negotiation Notice”) as soon as reasonably possible but not longer than (i) within [***] days after Biogen’s

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

receipt of the Trigger Notice if the Trigger Notice is with respect to a Change of Control Transaction with a Third Party that provided Kiniksa with a written bonafide, arms- length, unsolicited offer (which was not directly or indirectly solicited or induced by Kiniksa or its employees, directors, agents or representatives) (each an “Unsolicited Offer”), or (ii) within [***] days after Biogen’s receipt of the Trigger Notice in all other cases (each, the “Notice Review Period”).  As soon as reasonably practicable but not longer than the later of [***] days after Biogen’s receipt of the Trigger Notice or [***] Business Days after Kiniksa’s receipt of a Negotiation Notice, Kiniksa will provide Biogen with confidential materials and data with respect to (1) the Product and (2) any other products and programs that are part of the ROFN Transaction if the ROFN Transaction is with respect to (A) a Change of Control Transaction involving an Unsolicited Offer or (B) the Product together with any products or programs other than the Product,; provided, that, solely to the extent that (y) the ROFN Transaction is with respect to a Change of Control Transaction involving an Unsolicited Offer and (z) [***] Kiniksa will not be obligated under this Section 3.4.1(b) to provide Biogen with any other information regarding any other products and programs of Kiniksa (other than the Product) that are [***] Kiniksa determines in good faith, after consultation with outside counsel, that such action would be inconsistent with its fiduciary duties to the stockholders of Kiniksa under applicable law, which shall include in any case (1) an update of the information previously provided by Kiniksa in accordance with Section 3.3.2 for the Product (and, subject to the limitation in subsection (b)(2) above, any other information, products and programs that are the subject of or part of the ROFN Transaction), (2) to the extent not included as part of the foregoing update, any material clinical data and preclinical data with respect to the Product (and, subject to the limitation in subsection (b)(2) above, any other information, products and programs that are the subject of or part of the ROFN Transaction) Controlled by Kiniksa (each, a “Data Package”), and (3) such other information relating to the foregoing in Kiniksa’s Control that Biogen may reasonably request at any time during the Diligence Period, which Data Package and additional requested information provided by Kiniksa to Biogen shall be Confidential Information of Kiniksa for purposes of this Agreement.

 

(c)                                  During the period commencing on the date of receipt by Biogen of a Data Package and continuing for a period of (i) [***] days in the case where the Data Package is delivered with respect to a Change of Control Transaction involving an Unsolicited Offer, or (ii) [***] days in all other cases (each, the “Diligence Period”), Biogen will complete its diligence and Biogen and Kiniksa shall have periodic meetings (either in person or by phone) to discuss Biogen’s progress and to answer any questions related to diligence.

 

(d)                         During the period commencing on the date of receipt by Biogen of a Data Package and continuing for a period of (i) [***] days in the case where the Data Package is delivered with respect to a Change of Control Transaction involving an Unsolicited Offer, or (ii) [***] days in all other cases (each, the “Exclusivity Term”, which Exclusivity Term shall include the Diligence Period), Kiniksa will [***]; provided, that, to the extent that (i) [***] and (ii) the proposed ROFN Transaction is with respect to a Change of Control Transaction involving an Unsolicited Offer, Kiniksa shall be entitled during the Exclusivity Term to [***]

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

to any Third Party if the Board of Directors or similar governing body of Kiniksa determines in good faith, after consultation with outside counsel, that the failure to take such action would be inconsistent with its fiduciary duties to the stockholders of Kiniksa under applicable law.  During the Exclusivity Term, Kiniksa will exclusively negotiate in good faith with Biogen for, and Biogen will negotiate in good faith with Kiniksa for (A) in the case where the Data Package is with respect to a Change of Control Transaction involving an Unsolicited Offer, a term sheet, if accepted by each Party in its sole discretion, for an exclusive license or asset purchase of the Product or a Change of Control Transaction by and between the Parties, which term sheet shall include an extension of the Exclusivity Term sufficient for the Parties to negotiate and finalize an agreement with respect to the transaction and other terms acceptable to Kiniksa, in its sole discretion, or (B) in all other cases, an exclusive license or asset purchase agreement for the Product, or acquisition agreement with respect to Kiniksa, in each case on terms that are acceptable to each Party in its sole discretion; provided, that, Kiniksa shall be entitled to negotiate with Third Parties with respect to a Change of Control Transaction involving an Unsolicited Offer during the Exclusivity Term if the Board of Directors or similar governing body of Kiniksa determines in good faith, after consultation with outside counsel, that a failure to take such action would be inconsistent with its fiduciary duties to the stockholders of Kiniksa under applicable law.  For the avoidance of doubt, each Party shall be entitled to reject any and all proposals made by the other Party during any Exclusivity Term in its sole discretion, without penalty.  Notwithstanding anything to the contrary, nothing in this Section 3.4 shall be deemed to prevent Biogen from making an offer, solicited or unsolicited, at any time relative to an acquisition of Kiniksa.

 

(e)                                  If (i) Biogen (A) does not deliver a Negotiation Notice to Kiniksa within the applicable Notice Review Period, or (B) fails to notify Kiniksa in writing that it wants to pursue an ROFN Transaction with respect to the Product or Change of Control Transaction, as the case may be, after review of the Data Package by the end of the applicable Diligence Period, or (ii) Biogen and Kiniksa do not mutually agree on the terms of a transaction (or a term sheet for the same, as applicable) within the Exclusivity Term, Kiniksa will be free to negotiate an ROFN Transaction for such Product, which may include a Change of Control Transaction, with any Third Party.  Notwithstanding the prior sentence, if Kiniksa does not enter into a definitive agreement for a ROFN Transaction with respect to the Product or a Change of Control Transaction with any Third Party on or before [***] days from the date of expiration of the applicable period in subsections (i)(A), (i)(B) or (ii) above (or, if such definitive agreement is entered into within that period, such transaction is not consummated on or before [***] months after the expiration of such [***] period or is not consummated on or before [***] months after the expiration of such one [***] period solely to the extent the ROFN Transaction is with respect to a Change of Control Transaction with a Third Party that has [***]), Kiniksa shall provide Biogen with written notice and Biogen’s Right of First Negotiation in this Section 3.4 shall immediately apply once again to such Product; provided, that, Kiniksa may [***] period during which Kiniksa has the right to enter into a definitive agreement for such ROFN Transaction (including a Change of Control Transaction) by an additional [***] days by providing written notice to Biogen [***] on or before the expiration of such [***] day period.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

3.4.2                    Definition of Change of Control Transaction.  For the purposes of this Section 3.4, a “Change of Control Transaction” means (a) a transaction or series of related transactions pursuant to which any Third Party or group of related Third Parties (e.g., two or more Third Parties that act as a group for purposes of Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)) directly or indirectly would first become the beneficial owner of capital stock representing fifty percent (50%) or more of the total voting rights of Kiniksa and/or an Affiliate then outstanding or would first acquire the power to elect or appoint fifty percent (50%) or more of the members of the Board of Directors of Kiniksa and/or an Affiliate, (b) a transaction in which Kiniksa and/or an Affiliate proposes to sell to a Third Party all or substantially all of its assets, or (c) a merger transaction with a Third Party in which the stockholders of record of Kiniksa and/or an Affiliate immediately prior to the consummation of such transaction would not beneficially own capital stock representing fifty percent (50%) or more of the total voting rights of the surviving entity after the consummation of such transaction.

 

3.4.3                     Definition of Exempt Transaction.  For the purposes of this Section 3.4, an “Exempt Transaction” means any transaction by and between Kiniksa and (a) any Third Party engaged by Kiniksa to perform designated research or development activities (including drug development and/or manufacturing services) with respect to the Product, including any services or sponsored research agreement with a contract research organization, a contract manufacturing organization and/or university or other non-profit institution, or (b) any Third Party appointed by Kiniksa or any of its Affiliates (including a contract sales organization) to distribute, market or sell any Product, where such Third Party purchases its requirements of such Product from Kiniksa or its Affiliates for a transfer price but does not make any royalty, profit share or similar payment to Kiniksa based on sales of such Product.

 

3.4.4                     Termination of Right of First Negotiation.  Biogen’s Right of First Negotiation described in this Section 3.4 will terminate and be of no further effect on the earliest of (a) the date upon which Kiniksa has a first commercial sale of the Product in the United States; (b) the [***] year anniversary of the Effective Date; or (c) with respect to a Change of Control Transaction, upon the consummation of a bonafide Change of Control Transaction between Kiniksa and a Third Party that has [***] after application of any of subsections 3.4.1(e)(i)(A), (e)(i)(B) or (e)(ii), to the extent applicable, and within the time periods specified in subsection 3.4.1(e).

 

4.          PROSECUTION/INFRINGEMENT OF ACQUIRED PATENTS

 

4.1                               Prosecution of Acquired Patents.

 

4.1.1                     Responsibilities of Kiniksa.  Kiniksa, acting through patent counsel or agents of its choice, shall be solely responsible for the preparation, filing, prosecution and maintenance of all Acquired Patent Rights throughout the Territory.  All patent costs and expenses incurred by Kiniksa in connection with the preparation, filing, prosecution and maintenance of such Acquired Patent Rights shall be the sole responsibility of Kiniksa.  Kiniksa hereby acknowledges its duties, including the duty of disclosure under 37 CFR 1.56 with respect

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

to the Acquired Patent Rights.

 

4.1.2                     Patent Term Extensions.  Kiniksa shall use reasonable efforts to obtain all patent term extensions or supplemental protection certificates or their equivalents in any country where applicable to the Acquired Patent Rights.  Biogen shall cooperate with Kiniksa with respect to such matters, including by timely conferring with Kiniksa to ensure compliance with applicable filing deadlines, and conferring with Kiniksa on the procedures to be followed by Kiniksa to ensure such compliance.

 

4.2                               Infringement.

 

4.2.1                     Notice.  If either Party becomes aware of (a) any suspected infringement or misappropriation of any Acquired Patent Rights or (b) the submission by any Third Party of an abbreviated BLA under the Biologics Price Competition and Innovation Act for any Product (each, an “Infringement”), that Party shall promptly notify the other Party and provide it with all details of such Infringement of which it is aware (each, an “Infringement Notice”).

 

4.2.2                     Kiniksa Right.  Kiniksa shall have the first right, but not the obligation, to address such Infringement in the Territory that involves such Acquired Patent Rights by taking reasonable steps, which may include the initiation of legal proceedings or actions to persuade the infringer to desist, compromise or otherwise settle such Infringement (each, an “Infringement Response”); provided, that: (a) Kiniksa shall keep Biogen informed about such Infringement Response and Biogen shall provide all reasonable cooperation to Kiniksa in connection with such Infringement Response; and (b) Kiniksa shall not take any position with respect to, or compromise or settle, any such Infringement in any way without first providing Biogen with (i) notice of Kiniksa’s preferred course of action and (ii) an opportunity to provide comments, which comments Biogen will provide promptly and in any event within seven (7) days from receipt of such notice from Kiniksa and which comments Kiniksa will consider in good faith; and (c) if Kiniksa does not intend to prosecute or defend an Infringement with respect to any Acquired Patent Rights, or ceases to diligently pursue an Infringement Response with respect to such an Infringement, it shall inform Biogen in such a manner that such Infringement Response will not be prejudiced and Section 4.2.3 shall apply.  All costs, including, without limitation, attorneys’ fees, relating to such Infringement Response shall be borne solely by Kiniksa.

 

4.2.3                     Biogen Right.  If (a) Kiniksa informs Biogen that it does not intend to pursue any Infringement Response with respect to any Acquired Patent Rights, (b) within [***] days after the receipt of notice of any such Infringement, Kiniksa has not commenced to take any Infringement Response with respect thereto, or (c) if Kiniksa ceases to reasonably pursue any such Infringement Response, then Biogen shall have the right, but not the obligation, to direct Kiniksa to take appropriate action to address such Infringement, including by instructing Kiniksa to initiate an Infringement Response or to continue prosecution of any legal proceedings initiated by Kiniksa; provided, that, Biogen shall first provide Kiniksa with a reasonable opportunity to explain the rationale for not pursuing or continuing such Infringement Response,

 

25

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

which Biogen will consider in good faith.  In the event Biogen directs Kiniksa to pursue an Infringement Response, Kiniksa shall (i) to the extent it is not prohibited from doing so, join Biogen as a plaintiff in such Infringement action, (ii) keep Biogen fully informed about such Infringement Response and (iii) take any actions that may be reasonably requested by Biogen with respect to that Infringement Response.  Kiniksa shall not take any position with respect to, or compromise or settle, any such Infringement in any way other than as directed by Biogen in writing.  All costs, including, without limitation, attorneys’ fees, relating to such Infringement Response shall be borne solely by Biogen.  Notwithstanding the foregoing, Biogen may not compel Kiniksa to pursue an Infringement Response if Kiniksa reasonably determines that (a) such action would reasonably be expected to result in an action or proceeding seeking to invalidate any Acquired Patent Rights or declare any of the Acquired Patent Rights unenforceable or not infringed, and (b) the ability of Kiniksa to prevail in such invalidity, unenforceability or non-infringement action is uncertain.

 

4.2.4                     Cooperation.  In any Infringement Response instituted under this Section 4.2, the Parties shall cooperate with and assist each other in all reasonable respects.

 

4.2.5                     Allocation of Recoveries.  Any settlements, damages or monetary awards (collectively, a “Recovery”) recovered by either Party pursuant to any Infringement Response shall, after reimbursing the Parties for their reasonable out-of-pocket expenses in making such recovery (which amounts shall be allocated pro rata if insufficient to cover the totality of such expenses) be allocated as follows: (a) to the extent such Infringement Response is instituted by Kiniksa, [***]; provided, that, [***]; and (b) [***].

 

5.          PURCHASE PRICE AND OTHER PAYMENTS

 

5.1                               Purchase Price.

 

5.1.1                     Upfront Fee.  Within thirty (30) days of the Effective Date, Kiniksa shall pay Biogen a one-time, non-refundable, non-creditable upfront fee in the amount of Eleven Million Five Hundred Thousand Dollars ($11,500,000) (the “Upfront Fee”), payable by electronic funds transfer of immediately available funds to an account or accounts specified to Kiniksa by Biogen in writing at least five (5) Business Days prior to the date thereof.

 

5.1.2                     Technology Transfer Fee.  Within thirty (30) days of the Completion of Technology Transfer, Kiniksa shall pay Biogen a one-time, non-refundable, non-creditable technology transfer fee in the amount of Five Hundred Thousand Dollars ($500,000) (the “Technology Transfer Fee”), payable by electronic funds transfer of immediately available funds to an account or accounts specified to Kiniksa by Biogen in writing at least five (5) Business Days prior to the date thereof.

 

5.2                               Milestone Payments.

 

5.2.1                     Development, Regulatory and Commercialization Milestones.  Kiniksa

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

shall make the following one-time, non-refundable, non-creditable payments to Biogen within forty-five (45) days after the first achievement of each of the following milestone events by Kiniksa, its Affiliates, Distributors and/or licensees with respect to each Product that achieves each such milestone:

 

 

 

	
Milestone Event
    	
 
    	
Milestone Payment
   ($ U.S. Dollars)
    
	
Initiation of   Phase I Clinical Trial with a Product
    	
 
    	
$
    	
4,000,000
    
	
[***]
    	
 
    	
$
    	
[***]
    

 

	
Milestone Event
    	
 
    	
Milestone Payment
   ($U.S. Dollars)
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    

 

27

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission. 

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    

 

28

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    

 

5.2.2                     No Additional Milestone Payments.  For purposes of clarity, (i) to the extent that any Product achieves the [***] milestone events [***], no additional milestone payments will be due and payable with respect to such Product pursuant to Section 5.2.1, (ii) to the extent that any Product achieves any [***] milestone event [***], no additional milestone payments will be due and payable with respect to such Product pursuant to Section 5.2.1, and (iii) [***].  For example, [***], then [***] and so on.

 

5.2.3                     Sales Milestones.  In addition to the milestone payments contemplated by Section 5.2.1, Kiniksa shall make each of the following one-time, non-refundable, non-creditable payments to Biogen within forty-five (45) days after the first occurrence of the corresponding milestone event by Kiniksa, its Affiliates and/or licensees with respect to any Product:

 

	
Milestone Event
    	
 
    	
Milestone Payment
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    
	
[***]
    	
 
    	
$
    	
[***]
    

 

29

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

5.2.4                     Notice and Payment of Milestones.  Kiniksa shall provide Biogen with prompt written notice upon the occurrence of each milestone event set forth in Section 5.2.1 and/or Section 5.2.3.  If Biogen believes any such milestone event has occurred and has not received a written notice of same from Kiniksa, it shall so notify Kiniksa in writing and shall provide to Kiniksa documentation or other information that supports its belief.  Any dispute under this Section 5.2.4 that relates to whether or not a milestone event has occurred shall be referred to both Party’s executive officers by either Party, and, to the extent not resolved by the executive officers within thirty (30) days, shall be resolved in accordance with Section 10.3.

 

5.3                               Payment of Royalties; Royalty Rates.

 

5.3.1                     Payment of Royalties.  Subject to Section 5.3.2, Kiniksa shall pay Biogen a royalty on Annual Net Sales of each Product by Kiniksa, its Affiliates, and licensees in each Calendar Year (or partial Calendar Year), commencing with the First Commercial Sale of such Product in any country in the Territory and ending upon the last day of the Royalty Term for such Product in such country, at the following rates:

 

	
Annual Net Sales Increment
    	
 
    	
Royalty Rate (%)
    
	
Annual portion less than [***]
    	
 
    	
[***]
    
	
Annual portion equal to or greater than [***]
    	
 
    	
[***]
    
	
Annual portion equal to or greater than [***]
    	
 
    	
[***]
    

 

For purposes of clarity, (i) each royalty rate will only apply to the corresponding tier of annual Net Sales, and (ii) the determination of the royalty rate under this Section 5.3.1 shall be based on aggregate, worldwide Annual Net Sales in each Calendar Year rather than on a country-by- country basis.

 

5.3.2                     Adjustments to Royalties.

 

(a)                                 No Patent Coverage.  Notwithstanding anything to the contrary in Section 5.3.1, if any Product is sold by Kiniksa in a country and is not Covered by a Valid Claim of [***] in such country and such Product does not otherwise have regulatory exclusivity in such country, the royalty rates in such country shall be reduced by [***] of the rates set forth in Section 5.3.1, continuing until the last day of the applicable Royalty Term with respect to such Product in such country.  The Parties hereby acknowledge and agree that royalties that are payable for a Product for which no [***] exist shall be in consideration of (i) Biogen’s expertise and know-how concerning its development of the Acquired Know-How prior to the Effective Date; (ii) the transfer to Kiniksa hereunder of Acquired Know-How that is not within the claims of any Patent Rights Controlled by Biogen; and (iii) the “head start” afforded to Kiniksa by each of the foregoing.

 

(b)                                 Royalty Stacking.  The amount of royalties payable to Biogen under Section 5.3.1 for any Product in any country shall be reduced by [***] paid by Kiniksa or

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

any of its Affiliates to any Third Party in consideration for the license of [***] the manufacture, use or sale of the Product in such country in the absence of such a license; provided, that, in no event shall the royalty payments owed under Section 5.3.1 with respect to a Product in a country be reduced by operation of this Section 5.3.2(b) by more than [***] of what would otherwise be owed under Section 5.3.1; provided, further, that, (i) Kiniksa will be entitled to carry forward and apply against royalty payments due and payable in subsequent Calendar Years any amounts with respect to which Kiniksa would have been entitled to make a deduction pursuant to this Section 5.3.2(b) but for such maximum annual reduction and (ii) the right of Kiniksa to carry forward any amounts pursuant to this Section 5.3.2(b) will expire upon the expiration of the Term.

 

(c)                                  Competing Drugs.  In the event that one or more Third Parties (other than an Affiliate or licensee of Kiniksa) sell a Competing Drug (as defined below) in any country in which a Product is then being sold by Kiniksa then, (i) during any Calendar Quarter in which sales of the Competing Drug by such Third Parties are equal to or greater than [***] of aggregate unit sales of Products and Competing Drugs in such country (as measured by prescriptions or other similar information available from a Third Party data provider and applicable to such country) the applicable royalties in effect with respect to such Product in such country as specified in Section 5.3.1 shall be reduced by [***] and (ii) during any Calendar Quarter in which sales of the Competing Drug by such Third Parties are equal to or greater than [***] of aggregate unit sales of Products and Competing Drugs in such country (as measured by prescriptions or other similar information available from a Third Party data provider and applicable to such country) the applicable royalties in effect with respect to such Product in such country as specified in Section 5.3.1 shall be reduced by [***].  Notwithstanding the foregoing, (a) Kiniksa’s obligation to pay royalties at [***] of the applicable royalty rates shall be reinstated on the first day of the Calendar Quarter immediately following the Calendar Quarter in which sales of such Competing Drugs account for less than [***] but equal to or greater than [***] of aggregate unit sales of Products and Competing Drugs in such country and (b) Kiniksa’s obligation to pay royalties at the full royalty rates shall be reinstated on the first day of the Calendar Quarter immediately following the Calendar Quarter in which sales of such Competing Drugs account for less than [***] of aggregate unit sales of Products and Competing Drugs in such country.  For purposes of this Section 5.3.2(c), (a) a “Competing Drug” means, with respect to a Product, a therapeutic product that (i) [***], (ii) [***] and (iii) [***] and (b) “Bioequivalent” or “Bioequivalence” means, a biological product that (i) is highly similar to the Product notwithstanding minor differences in clinically inactive components; and (ii) has no clinically meaningful differences between the biological product and the Product in terms of the safety, purity, and potency.

 

5.3.3                     Maximum Reduction Amount.  Notwithstanding anything to the contrary in this Section 5.3.3, in no event will the reductions in Section 5.3.2(a) and/or Section 5.3.2(b) and/or Section 5.3.2(c) reduce the royalty rates under Section 5.3.1 in any Calendar Year to less than [***] of the royalty rates set forth in Section 5.3.1.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

5.3.4                     Payment Dates and Reports.  Royalty payments shall be made by Kiniksa with respect to each Product within forty-five (45) days after the end of each Calendar Quarter in which a sale of such Product is made, commencing with the Calendar Quarter in which the First Commercial Sale of such Product occurs.  Kiniksa shall also provide, at the same time each such payment is made, a report showing: (a) the Net Sales of each Product by type of Product and country in the Territory; (b) the total amount of deductions from Gross Sales to determine Net Sales; (c) the applicable royalty rates for each Product on a country-by-country basis in each country in the Territory after applying any adjustments set forth in Section 5.3.2 above; (d) a calculation of the amount of royalty due to Biogen; and (e) the expected date of expiration of regulatory exclusivity of each Product in each country in the Territory where such Product is being sold.

 

5.3.5                     Records; Audit Rights.  Kiniksa and its Affiliates and licensees shall keep and maintain for [***] years from the date of each payment of royalties hereunder complete and accurate records of Gross Sales and Net Sales by Kiniksa and its Affiliates and licensees in sufficient detail to allow royalties to be determined accurately.  Biogen shall have the right for a period of [***] years after receiving any such payment to appoint at its expense an independent certified public accountant reasonably acceptable to Kiniksa to audit the relevant records of Kiniksa and its Affiliates and licensees to verify that the amount of such payment was correctly determined.  Kiniksa and its Affiliates and licensees shall each make its records available for audit by such independent certified public accountant during regular business hours at such place or places where such records are customarily kept, upon thirty (30) days written notice from Biogen.  Such audit right shall not be exercised by Biogen more than once in any Calendar Year or more than once with respect to sales of a particular Product in a particular period.  All records made available for audit shall be deemed to be Confidential Information of Kiniksa.  The results of each audit, if any, shall be binding on both Parties absent manifest error. In the event there was an underpayment by Kiniksa hereunder, Kiniksa shall promptly (but in any event no later than thirty (30) days after Kiniksa’s receipt of the report so concluding) make payment to Biogen of any shortfall.  Biogen shall bear the full cost of such audit unless such audit discloses an underreporting by Kiniksa of [***] percent ([***]%) of the aggregate amount of royalties payable in any Calendar Year, in which case Kiniksa shall reimburse Biogen for all costs incurred by Biogen in connection with such audit.

 

5.4                               Payments Under Retained Contracts.  Kiniksa hereby acknowledges that Biogen is obligated to make payments owed to certain Third Parties under the Retained Contracts on and after the Effective Date.  Kiniksa shall be responsible for making payments to Biogen for the amount of such payments, including a portion of the annual maintenance fees that are applicable to the Development and/or Commercialization by Kiniksa of Acquired Antibodies and/or Products as set forth on Schedule E (“Retained Contract Payments”).  Kiniksa shall make such Retained Contract Payments directly to Biogen, and in each such instance, Kiniksa shall make the requisite payments to Biogen and provide the necessary reporting information to Biogen in sufficient time to enable Biogen to comply with its obligations under such Retained Contracts.  Kiniksa shall be entitled to credit up to [***] of any

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

and all such Retained Contract Payments against royalty payments due and payable by Kiniksa to Biogen under Section 5.3.

 

5.5                               Payments in Dollars.  All payments made by Kiniksa under this Article 5 shall be made by wire transfer from a banking institution in United States Dollars in accordance with instructions given by Biogen in writing to Kiniksa from time to time.

 

5.6                               Foreign Currency Exchange.  If, in any Calendar Quarter, Net Sales are made in any currency other than United States Dollars, such Net Sales shall be converted into United States Dollars as follows:

 

(A/B), where

 

A = foreign “Net Sales” (as defined above) in such Calendar Quarter expressed in such foreign currency; and

 

B = the applicable foreign exchange conversion rate, expressed in local currency of the foreign country per United States Dollars (using, as the applicable foreign exchange rate, the average of the daily closing rates published in Bloomberg or any other mutually agreed upon source, for such Calendar Quarter).

 

5.7                               Overdue Payments.  All undisputed payments not made by Kiniksa to Biogen when due under this Agreement shall [***] from the due date until paid in full or, if less, the maximum interest rate permitted by applicable Law.  Any such overdue payment shall, when made, be accompanied by, and credited first to, all interest so accrued.  If Kiniksa has a good faith dispute regarding a payment to be made to Biogen, Kiniksa may withhold payment for the disputed amount; provided; that, Kiniksa pays all undisputed amounts and notifies Biogen in writing of the specific amount and nature of the dispute on or before the due date for the payment.

 

5.8                               Taxes.

 

5.8.1                     Payments.  The payments set forth in Article 5 shall not be reduced by any Transfer Taxes which, if charged, shall be payable by Kiniksa pursuant to Section 5.8.2.

 

5.8.2                     Transfer Taxes.  All transfer, documentary, sales, use, valued-added, gross receipts, stamp, registration or other similar transfer Taxes incurred in connection with the transfer and sale of the Purchased Assets or the license of the Acquired Know-How as contemplated by the terms of this Agreement (“Transfer Taxes”), including all recording or filing fees, notarial fees and other similar costs, that may be imposed, payable, collectible or incurred shall be borne by Kiniksa.  The Parties have determined that the value of the tangible property transferred pursuant to Section 2.1 is [***] of the payment made pursuant to Section 5.1 is allocated to consideration for such tangible property.  Each Party shall cooperate and provide such assistance to the other Party, including the provision of such documentation as may be required by a tax authority or other Governmental Entity, as may be reasonably necessary in

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

order to reduce or eliminate the amount of any Transfer Taxes described in the first sentence of this Section 5.8.2 in a manner consistent with applicable Laws.

 

5.8.3                    Tax Withholding.  Kiniksa and its Affiliates shall be entitled to deduct and withhold any Taxes, withholding or similar amount required by applicable Law to be deducted and withheld (other than with respect to any Transfer Taxes for which Kiniksa is responsible pursuant to Section 5.8.2) with respect to any amount payable to Biogen, any of its Affiliates or any Person described in clause (b) of Section 10.6 in connection with the transactions and/or payments contemplated by this Agreement.  Kiniksa shall use commercially reasonable efforts to notify Biogen in writing of such withholding requirements prior to making the payment to Biogen and to provide such assistance to Biogen, including the provision of such documentation as may be required by a Tax authority or other Governmental Entity, as may be reasonably necessary in Biogen’s efforts to claim an exemption from or reduction of such Taxes.  Kiniksa will, in accordance with Law, withhold Taxes from the amount due, remit such Taxes to the appropriate tax authority or other Governmental Entity, and furnish Biogen with proof of payment of such Taxes within fifteen (15) days following payment thereof.  If Taxes are paid to a tax authority or other Governmental Entity, Kiniksa shall use commercially reasonable efforts to provide such assistance to Biogen (at Biogen’s expense) as is reasonably required to obtain a refund of Taxes withheld, or obtain a credit with respect to Taxes paid.  If [***] Kiniksa will [***] minus (i) [***]; provided, however, that Kiniksa shall not be required to [***] but for [***].

 

6.          REPRESENTATIONS AND WARRANTIES

 

6.1                               Mutual Warranties.  Each of Kiniksa and Biogen represents and warrants to the other Party that:

 

(a)                                 it is duly organized and validly existing under the Law of the jurisdiction of its incorporation, and has full corporate power and authority to enter into this Agreement and to carry out the provisions hereof;

 

(b)                                 it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the individual executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate action; and

 

(c)                                  this Agreement is legally binding upon it and enforceable in accordance with its terms.  The execution, delivery and performance of this Agreement by it does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material applicable Law.

 

6.2                               Additional Biogen Warranties.  Biogen represents and warrants to Kiniksa that, as of the Effective Date:

 

6.2.1                     Title to Assets.  Biogen or its Affiliates have good and valid title to all of

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

the Purchased Assets in their entirety (subject to the grant back license to Biogen in Section 2.5.2) free and clear of all Encumbrances, except for Permitted Encumbrances.

 

6.2.2                     No Debarment.  Neither Biogen nor its Affiliates’ employees who have been involved in the Exploitation of BIIB069, nor, to Biogen’s Knowledge, any employees of their respective licensees, contractors, agents and consultants who have been involved, on behalf of Biogen, in the Exploitation of BIIB069:

 

(a)                                 is debarred under Section 306(a) or 306(b) of the FD&C Act or by the analogous applicable Laws of any Regulatory Authority;

 

(b)                                 has been charged with, or convicted of, any felony or misdemeanor within the ambit of 42 U.S.C. §§ 1320a-7(a), 1320a-7(b)(l)-(3), or pursuant to the analogous applicable Laws of any Regulatory Authority, or is proposed for exclusion, or the subject of exclusion or debarment proceedings by a Regulatory Authority; or

 

(c)                                  is excluded, suspended or debarred from participation, or otherwise ineligible to participate, in any U.S. or non-U.S. healthcare programs (or has been convicted of a criminal offense that falls within the scope of 42 U.S.C. §1320a-7 but not yet excluded, debarred, suspended, or otherwise declared ineligible), or excluded, suspended or debarred by a Regulatory Authority from participation, or otherwise ineligible to participate, in any procurement or non- procurement programs.

 

6.2.3                     Litigation and Claims.  There is no action, suit, claim, proceeding or investigation pending that has been served on Biogen, and to the Knowledge of Biogen, there is no other action, suit, claim, proceeding or investigation pending or threatened against Biogen before or by any federal, state, municipal or other governmental court, agency or instrumentality, which would prevent Biogen’s performance of this Agreement and the transactions contemplated hereby.

 

6.2.4                     Intellectual Property Rights.

 

(a)                                 Biogen has sufficient legal and/or beneficial ownership and/or rights in the Acquired Patent Rights and Acquired Know-How necessary to assign and transfer to Kiniksa the Acquired Patent Rights and Acquired Know-How in accordance with the terms of this Agreement.

 

(b)                                 None of the Acquired Patent Rights or Acquired Know-How constitute Third Party Intellectual Property.

 

(c)                                  The Acquired Patent Rights have been duly filed in the jurisdictions identified in Part 1 of Schedule A, are pending, have not been abandoned or allowed to lapse, and have not been held invalid or unenforceable by a decision of a court or other governmental agency of competent jurisdiction, in whole or in part, nor to Biogen’s

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Knowledge, is there any reason for the Acquired Patent Rights to be deemed invalid or held unenforceable by a decision of a court or other governmental agency of competent jurisdiction.

 

(d)                                 To the Knowledge of Biogen, there are no oppositions, cancellations, interferences or Litigation proceedings pending or expressly threatened in writing, challenging the ownership, validity or enforceability of any of the Acquired Patent Rights, or, to the Knowledge of Biogen, any of the Background Licensed Patent Rights.

 

(e)                                  Part 1 of Schedule A accurately sets forth for each provisional or pending patent application in the Acquired Patent Rights, the application number, date of filing and title for each country, and listing, as applicable, deadlines for any renewals or other required filings or payments within ninety (90) days after the Effective Date.

 

(f)                                   Neither Biogen, nor any of Biogen’s Affiliates, has received from any Person, any actual or, to the Knowledge of Biogen, threatened claim that the use of the Acquired Patent Rights, Acquired Know-How, Background Licensed Patent Rights, Background Sublicensed Patent Rights, as has been and is now being conducted, presently infringes or constitutes a misappropriation of any registered patents of any Person.  Biogen has not granted any licenses or covenants not to sue under the Acquired Patent Rights, except under the Amgen Agreement.  Biogen has paid all licensing fees, royalties, profit participations and other payments that were due or payable by Biogen or any of its Affiliates in connection with its use or practice of the Acquired Patent Rights, Acquired Know-How and Background Licensed Patent Rights prior to the Effective Date.  Biogen has paid all licensing fees, royalties, profit participations and other payments that were due or payable by Biogen or any of its Affiliates through the Effective Date in connection with its use or practice of the Background Sublicensed Patent Rights prior to the Effective Date.

 

(g)                                  Except as described on Schedule I attached hereto, (i) the list of Acquired Patent Rights included on Part 1 of Schedule A and, (ii) to the Knowledge of Biogen, the list of Acquired Know-How included on Part 2 of Schedule A attached hereto, the list of Background Licensed Patent Rights included on Schedule D attached hereto, and the Background Sublicensed Intellectual Property in-licensed by Biogen pursuant to the Retained Contracts is a complete and accurate list of all Know-How and Patent Rights owned or Controlled by Biogen or its Affiliates prior to the Effective Date that were used by Biogen in, and necessary for, the Exploitation of the Acquired Antibody as it exists as of the Effective Date.  To Biogen’s Knowledge, neither Biogen nor its Affiliates own or Control any intellectual property rights other than the intellectual property rights set forth in the list of Acquired Patent Rights and Acquired Know-How included on Parts 1 and 2 of Schedule A attached hereto, the list of Background Licensed Patent Rights included on Schedule D attached hereto, and the Background Sublicensed Intellectual Property in-licensed by Biogen pursuant to the Retained Contracts that were used by Biogen in, and necessary for, the Exploitation of the Acquired Antibody as it exists as of the Effective Date.

 

(h)                                 Biogen is the sole and exclusive owner of, or Controls, the

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Background Licensed Patent Rights included on Schedule D attached hereto

 

(i)                                     Biogen has the ability to grant to Kiniksa the licenses or sublicenses to the Background Licensed Patent Rights and Background Sublicensed Patent Rights, as the case may be, granted to Kiniksa under this Agreement.

 

(j)                                    To Biogen’s Knowledge, Biogen has complied in all material respects with all applicable Laws in connection with the prosecution and maintenance of the Acquired Patent Rights claiming any Acquired Antibody or any aspect of the Exploitation thereof, in the Field and in the Territory.

 

(k)                                 To Biogen’s Knowledge, Biogen has disclosed to the U.S. Patent and Trademark Office all information in Biogen’s possession or control as of the Effective Date that is required to be disclosed under 37 C.F.R. § 1.56 for prosecuting the Acquired Patent Rights.

 

(l)                                     Except as set forth on Schedule I attached hereto, Biogen is not directly or indirectly (i) conducting, participating in or sponsoring any activities that are directed toward the research, development, manufacture, sales, marketing, promotion or distribution of any compound or biologic that [***] or (ii) seeking to appoint, grant any right or license to or otherwise authorize any Third Party to perform any of the foregoing, or (iii) actively seeking to acquire any right or license to any compound or biologic that [***].

 

(m)                             Biogen has not received written notice that it has materially breached its obligations under the Assigned Contract in a manner that has, or would reasonably be expected to have, a material adverse effect on the rights granted to Kiniksa under this Agreement.

 

(n)                                 Biogen has not received written notice that it has materially breached its obligations under any of the Retained Contracts in a manner that has, or would reasonably be expected to have, a material adverse effect on the rights granted to Kiniksa under this Agreement.

 

6.3                               No Other Warranties.  EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE VI, BOTH PARTIES DISCLAIM ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, WITH REGARD TO THE PURCHASED ASSETS AND THIS AGREEMENT, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY AND NON- INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS.

 

7.          CONFIDENTIALITY

 

7.1                               Confidential Information.  The term “Confidential Information” shall mean

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

(a) the Acquired Know-How, (b) the Acquired Patent Rights, (c) information provided by Kiniksa under any Report, and (d) information provided by Kiniksa pursuant to Section 3.4; except that with respect to (c) or (d), such information shall not be considered Confidential Information to the extent that it can be established that such Confidential Information (i) was already known by Biogen at the time of disclosure to Biogen, (ii) was generally available to the public or otherwise part of the public domain at the time of its disclosure to Biogen, (iii) became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of Biogen in breach of this Agreement, (iv) was disclosed to Biogen, by a Third Party whose disclosure does not, to Biogen’s knowledge, constitute a breach of an obligation to Kiniksa, or (v) was subsequently developed by Biogen without the aid, use or application of the Confidential Information as demonstrated by competent written records.  For purposes of clarity, on and after the Effective Date, all Confidential Information shall be considered the property of Kiniksa.

 

7.2                               Restrictions.  For a period of [***] years after the Effective Date, Biogen will keep all Confidential Information in confidence with the same degree of care with which Biogen holds its own confidential information but in no event with less than a reasonable degree of care.  Notwithstanding anything to the contrary in the foregoing, Biogen’s obligations of confidentiality and non-use with respect to any documents identified as “Extended Confidentiality” in Part 2 of Schedule A attached hereto shall survive for a period of [***] years after the Effective Date.  Biogen will not use or disclose Confidential Information except in connection with the performance of its obligations under this Agreement.  Biogen has the right to disclose Confidential Information without Kiniksa’s prior written consent, to the extent and only to the extent reasonably necessary, to Biogen’s Affiliates and their employees, subcontractors, consultants or agents who have a need to know such Confidential Information in order to perform its obligations under this Agreement and who are required to comply with the restrictions on use and disclosure in this Section 7.2; provided, that, Biogen assumes responsibility and remains liable for the compliance of such Affiliates and their employees, subcontractors, consultants and agents with such obligations.  Biogen will use reasonable measures and precautions to cause those Persons to comply with the restrictions on use and disclosure in this Section 7.2.

 

7.3                               Exception.  Biogen’s obligation of nondisclosure and the limitations upon the right to use the Confidential Information will not apply to the extent that Biogen can demonstrate that the Confidential Information is or becomes public knowledge through no act or omission of Biogen or any of its Affiliates.  Disclosure of Confidential Information shall not be prohibited to the extent required to comply with applicable laws or regulations, or with a valid court or administrative order, provided that the Biogen: (a) promptly notifies the Kiniksa in writing of the existence, terms and circumstances of such required disclosure; (b) consults with the Kiniksa on the advisability of taking legally available steps to resist or narrow such disclosure; and (c) takes all reasonable and lawful actions to obtain confidential treatment for such disclosure.

 

7.4                               Publication by Biogen.  If Biogen wishes to make a publication or presentation

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

with respect to any Acquired Antibody or Product, Biogen shall (a) obtain the prior written consent of Kiniksa, which consent shall not be unreasonably withheld, conditioned or delayed;

 

(b) deliver to Kiniksa a copy of the proposed written publication or an outline of the proposed presentation at least thirty (30) days prior to submission for publication or presentation in order to give Kiniksa the opportunity to comment on such publication or presentation; and (c) consider all reasonable comments and proposed changes of Kiniksa to the proposed publication or presentation, provided, however, that Biogen shall not disclose any Confidential Information of Kiniksa in any such publication or presentation without Kiniksa’s prior written consent.

 

7.5                               Terms of this Agreement; Publicity.

 

7.5.1                    Restrictions.  The Parties agree that neither Party shall (i) disclose the existence or terms of this Agreement or the terms of any term sheet or agreement negotiated pursuant to Section 3.4, or (ii) issue any press release or public statement disclosing information relating to this Agreement or the transactions contemplated hereby or the terms hereof, or the terms of any term sheet or agreement negotiated pursuant to Section 3.4, without prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed (or as such consent may be obtained in accordance with Section 7.5.2).  Notwithstanding the foregoing, either Party may disclose the existence and terms of this Agreement to its Affiliates, and to its (actual or potential) permitted licensees, sublicensees, acquirers or assignees and subcontractors (and their advisors) and to investment bankers, investors, lenders, accountants and legal advisors and to such Party’s directors, employees, contractors and agents, who have a need to know such Confidential Information.  Each Party shall advise any such permitted licensees, sublicensees, acquirers or assignees, subcontractors (and their advisors), investment bankers, investors, lenders, accountants and legal advisors and such Party’s directors, employees, contractors and agents who receive Confidential Information of the confidentiality obligations set forth in Article 7, and such Party shall take steps to ensure (through enforcement of written agreements or otherwise) that they comply with such obligations as if they had been a Party hereto; provided, however, that such Party shall remain responsible for any failure by any Person who receives such information from such Party pursuant to this Section 7.5 to treat such information as required under this Article 7.

 

7.5.2                     Review.  In the event either Party (the “Issuing Party”) is required by Law or the rules or regulations of any applicable United States securities exchange or regulatory or governmental body to which the relevant Party is subject to issue a press release or other public statement disclosing information relating to this Agreement or the transactions contemplated hereby or the terms hereof, the Issuing Party will provide the other Party (the “Reviewing Party”) with a copy of the proposed press release or public statement (the “Release”).  The Issuing Party will specify with each such Release, taking into account the urgency of the matter being disclosed, a reasonable period of time within which the Receiving Party may provide any comments on such Release (but in no event less than five (5) Business Days, unless earlier disclosure is required) and if the Receiving Party fails to provide any comments during the response period called for by the Issuing Party, the Reviewing Party will

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

be deemed to have consented to the issuance of such Release.  If the Receiving Party provides any comments, the Parties will consult on such Release and work in good faith to prepare a mutually acceptable Release.  Either Party may subsequently publicly disclose any information previously contained in any Release so consented to.  For the avoidance of doubt, Kiniksa, in its sole discretion, may disclose the results or status of research, development or any Clinical Trial conducted by Kiniksa or any health or safety matter related to any Acquired Antibodies or Products.

 

8.          TERM; TERMINATION; EFFECT OF TERMINATION

 

8.1                               Term.  This Agreement shall commence on the Effective Date and shall continue in full force and effect, unless otherwise terminated pursuant to Section 8.2, until the expiration of all payment obligations under this Agreement with respect to the last Product in all countries in the Territory (the “Term”).

 

8.2                               Right to Terminate.

 

8.2.1                     Termination by Kiniksa.  Kiniksa may terminate this Agreement, effective at any time, by providing not less than ninety (90) days’ prior written notice to Biogen.

 

8.2.2                     Termination by Mutual Consent.  The Parties may terminate this Agreement, effective at any time, by mutual written consent.

 

8.2.3                     Termination for Breach.  If a Party materially breaches this Agreement, the non-breaching Party may provide the breaching Party with a written notice specifying the nature of the breach, and stating its intention to terminate this Agreement if such breach is not cured.  Subject to Section 8.2.4, if the material breach is not cured within ninety (90) days (or thirty (30) days with respect to breach of a payment obligation) after the receipt of such notice, the non-breaching Party shall be entitled, without prejudice to any of its other rights under this Agreement, and in addition to any other remedies available to it by law or in equity, to terminate this Agreement by providing written notice to the other Party.  The applicable cure period shall be tolled pending resolution of any bona fide dispute between the Parties as to whether any such material breach has occurred.

 

8.2.4                     Termination of Rights of Kiniksa Under ATCC Agreement.  If Kiniksa breaches any of its material obligations under the ATCC Agreement, Biogen may provide Kiniksa with a written notice specifying the nature of the breach, and stating its intention to terminate the sublicense under the ATCC Agreement granted to Kiniksa by Biogen under this Agreement if such breach is not cured.  If the breach is not cured within ninety (90) days (or sixty (60) days for non-payment) after the receipt of such notice, Biogen shall be entitled, without prejudice to any of its other rights under this Agreement, and in addition to any other remedies available to it by law or in equity, to terminate the sublicense under the ATCC Agreement granted to Kiniksa under this Agreement by providing written notice to Kiniksa.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

8.3                               Effect of Termination.  If this Agreement is terminated pursuant to Section 8.2, the following shall apply:

 

(a)                                 the licenses and rights granted by Biogen to Kiniksa pursuant to Section 2.5.1 shall terminate;

 

(b)                                 solely to the extent the effective date of termination is prior to the expiration of the Exclusivity Period, the obligations of Kiniksa in Section 2.7 shall survive and shall continue in full force and effect for a period of [***] months from the effective date of termination;

 

(c)                                  Kiniksa shall, within [***] days of the effective date of such termination, take such actions and execute such documents, as may be reasonably required to re- assign to Biogen all of its right, title and interest in and to the Purchased Assets, including the Acquired Patent Rights and Acquired Know-How;

 

(d)                                 upon the written request of Biogen, Kiniksa shall grant Biogen an exclusive, worldwide, perpetual, freely sublicensable license, under any Kiniksa Know-How and/or Kiniksa Patent Rights used in, and necessary for, the Exploitation of Acquired Antibodies and Products in the Territory as of the effective date of termination;

 

(e)                                  to the extent that that Biogen provides the written request described in subsection (d), Kiniksa shall promptly (and in any event within [***] days, except as otherwise provided below) take the following actions and the following provisions shall apply:

 

(i)                        Kiniksa shall provide Biogen with a reasonably detailed summary, together with reasonable supporting documents, of the aggregate Development Costs incurred by Kiniksa with respect to each Acquired Antibody and/or Product through the effective date of termination;

 

(ii)                     Kiniksa shall (A) promptly provide Biogen with copies of any and all Kiniksa Third Party Agreements and (B) take such steps as may be reasonably required to assign such Kiniksa Third Party Agreements that relate solely to the Acquired Antibody and/or Product to Biogen (such agreements “Assigned Kiniksa Agreements”); provided, that, if any Kiniksa Third Party Agreement is not assignable or transferable pursuant to this subsection (ii) (such agreements, “Non-Assignable Kiniksa Agreements”) then Kiniksa shall (1) continue to use commercially reasonable efforts to obtain consent to assign such Non- Assignable

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Kiniksa Agreements to Biogen as soon as practicable after the effective date of termination and shall upon receipt thereof, promptly assign to Biogen such Non-Assignable Kiniksa Agreements, and (2) cooperate, and cause its Affiliates to cooperate, with Biogen in any reasonable arrangement designed to provide Biogen with all of the benefits of, subject to the related obligations under, such Non- Assignable Kiniksa Agreements as if the appropriate assignment had been obtained;

 

 

(iii)             to the extent there are any Non-Assignable Kiniksa Agreements as provided in subsection (ii), (A) Biogen shall be responsible for (1) making any payments (including royalties, milestones and other amounts) incurred and payable by Kiniksa to any Third Parties after the effective date of termination under any such Non-Assignable Kiniksa Agreements that are applicable to the development and/or commercialization by Biogen of Acquired Antibodies and/or Products by making such payments directly to Kiniksa, and in each instance Biogen shall make the requisite payments to Kiniksa and provide the necessary reporting information to Kiniksa in sufficient time to enable Kiniksa to comply with its obligations under the Non-Assignable Kiniksa Agreements, and (2) complying with any other obligations included in the Kiniksa Non-Assignable Agreements that are applicable to the development and/or commercialization of Acquired Antibodies and/or Products; (B) Kiniksa shall be responsible for paying or providing to any such Third Party any payments or reports made or provided by Biogen under this Section 8.3(e)(iii) and will provide Biogen with written notice of its compliance with such obligations; (C) Kiniksa shall not [***] and will not undertake any action that would [***]; and (D) upon written notice to Kiniksa, Biogen, may, at any time and in its sole discretion, [***], upon which [***] for purposes of this Section 8.3(e)(iii) and Biogen shall have no further obligations to Kiniksa with respect to [***];

 

(iv)            to the extent that at any time on and after the effective date of termination, Biogen, in its sole discretion, determines to develop and/or commercialize any Product (each, a “Biogen Product”) (it being acknowledged by Kiniksa that Biogen shall have no obligation to develop or commercialize any Product after the effective date of termination and will not be subject to any diligence obligations, including the diligence obligations of Kiniksa in Section 3.2, in connection therewith), (A) Biogen shall pay Kiniksa an amount equal to the Applicable Multiplier times any milestone payments and

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

royalty payments that would otherwise be due and payable by Kiniksa for Products pursuant to Section 5.2 and Section 5.3 to the extent applicable to the development or commercialization of such Biogen Product by Biogen; (B) the terms set forth in Section 5.2 and Section 5.3, and all related obligations (including the right to offset and/or reduce payments in accordance with Section 5.3.2) shall apply mutatis mutandis to each such Biogen Product; (C) the obligation of Biogen to make any royalty payments with respect to any Biogen Product under this Section 8.3(e)(iv) shall terminate on [***]; (D) the obligation of Biogen to make any milestone payments with respect to any Biogen Product under this Section 8.3(e)(iv) shall terminate [***]; and (E) the [***] on and after the effective date of termination; provided, that, if the Agreement is terminated by Kiniksa pursuant to Section 8.2.3, then the obligation of Biogen to [***] on the date on which Biogen has [***];

 

(v)              upon the written request of Biogen (which request may specify any or all of the actions in clauses (A) through (G) below), Kiniksa shall promptly (and in any event within [***] days after such request, except as otherwise provided below, or except as otherwise not possible within [***] days due to applicable regulatory procedures in a jurisdiction, in which case such actions shall be taken as promptly as reasonably possible): (A) at Biogen’s election, execute an assignment to Biogen of, or a grant to Biogen of an exclusive, worldwide, license under, all Product Trademarks Controlled by Kiniksa and applicable to any Products solely for use in connection with the Commercialization of such Products in the Territory, if any, other than any such Product Trademarks that incorporate the Kiniksa name or logo, or any tagline used in connection with Kiniksa’s business; (B) transfer to Biogen all of its right, title and interest in and to all Regulatory Filings and Marketing Authorizations then in its name applicable to any Acquired Antibodies and/or Products, if any, and all Confidential Information Controlled by it as of the date of termination relied on by such Regulatory Filings and Marketing Authorizations; (C) notify the applicable Regulatory Authorities and take any other action reasonably necessary to effect such transfer; (D) provide Biogen with copies of all correspondence between Kiniksa and such Regulatory Authorities relating to such Regulatory Filings and Marketing Authorizations; (E) unless expressly prohibited by any Regulatory Authority, transfer sponsorship and control to Biogen of all Clinical Trials of any Acquired Antibodies and/or Products being conducted by or on behalf of Kiniksa as of the effective date of termination and continue to conduct such Clinical

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Trials after the effective date of termination to enable such transfer to be completed without interruption of any such trial for up to [***] months from the effective date of termination; (F) cooperate with Biogen, cause its Affiliates to cooperate with Biogen, and use Commercially Reasonable Efforts to require any Third Party with which Kiniksa has an agreement with respect to the conduct of Clinical Trials for any Acquired Antibodies and/or Products (including, without limitation, agreements with contract manufacturing organizations, contract research organizations, clinical sites and investigators) to cooperate with Biogen in order to accomplish the transfer to Biogen of rights to those held by Kiniksa under its agreements with such Third Parties as of the effective date of termination; and (G) provide Biogen with copies of all reports and data, including clinical data, generated or obtained by Biogen or its Affiliates pursuant to this Agreement that relate to any Acquired Antibodies and/or Products that have not previously been provided to Biogen;

 

(vi)            upon the written request of Biogen, Kiniksa shall promptly, and in any event within [***] days after such request: (A) take such steps as may be reasonably necessary to assign to Biogen Kiniksa’s rights under any supply agreement by and between Kiniksa and any Third Party manufacturer to the extent that it provides for the supply of any Acquired Antibodies and/or Products (each, a “Kiniksa Supply Agreement”) to the extent permitted by the terms of the Kiniksa Supply Agreement; (B) consent to the supply by the Third Party manufacturer to Biogen of Biogen’s requirements of such Acquired Antibodies and Products, to the extent permitted under the terms of the Kiniksa Supply Agreement; or (C) provide Biogen or its designee with reasonable assistance in order to facilitate (1) the transfer to Biogen of the manufacturing processes for such Acquired Antibodies and Products and any related manufacturing Know-How, in each case used by Kiniksa or such Kiniksa Third Party manufacturer with respect such Acquired Antibodies and Products, and (2) the qualification of Biogen’s or its designee’s facility as required by any Regulatory Authority in order for Biogen or its designee to manufacture quantities of such Acquired Antibodies and Products.  Without limiting the generality of the foregoing, to the extent Biogen requests that Kiniksa undertake the steps in subsection (C) above, Kiniksa shall, and shall use Commercially Reasonably Efforts to cause any applicable Affiliate or Kiniksa Third Party manufacturer to:

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

(I)                                   make available to Biogen or its designee all Know- How Controlled by Kiniksa and used by Kiniksa or such Kiniksa Third Party manufacturer with respect the manufacture of the Acquired Antibodies and Products, including documentation constituting material support, performance advice, shop practice, specifications as to materials to be used, control methods, standard operating procedures, and any other such material that is reasonably necessary or useful to enable Biogen or its designee to manufacture such Acquired Antibodies and Products;

 

(II)                              have the appropriate employees, representatives and consultants of the applicable Affiliate or Kiniksa Third Party manufacturer meet with employees of Biogen or its designee at the facilities of Biogen or its designee, from time to time as reasonably requested by Biogen, to assist with the working up and use of the process to manufacture such Acquired Antibodies and Products and with the training of Biogen’s or its designee’s personnel to the extent reasonably necessary or useful to enable Biogen or its designee to manufacture such Acquired Antibodies and Products; and

 

(III)                         take such steps as are reasonably necessary to assist Biogen or its designee in obtaining or varying any necessary Regulatory Approval with respect to Biogen’s or its designee’s manufacture of such Acquired Antibodies and Products; and

 

(IV)                          provide such other assistance as Biogen may reasonably request to enable Biogen or its designee to manufacture such Acquired Antibodies and Products;

 

(V)                               each Party shall take such actions as may be reasonably necessary to complete the successful transfer to Biogen of the Acquired Antibodies and Products; and

 

(VI)                          each Party shall promptly return all Confidential Information of the other Party that are not subject to a continuing license hereunder; provided, that, each Party may retain one copy of the Confidential Information of the other Party in its archives solely for the purpose of establishing the contents thereof and ensuring compliance with its obligations hereunder.

 

For purposes of clarity, and without limiting Biogen’s obligations under Section 8.3(e)(iii), the costs and expenses incurred by Kiniksa in undertaking the actions set forth in subsection (i) through (vi) above shall be [***]; and

 

(f)                                   on and after the effective date of such termination, all Acquired

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Know-How and Acquired Patent Rights shall be considered Confidential Information of, and the property of, Biogen and the terms set forth in Section 7, and all related obligations of Biogen in Section 7, shall apply mutatis mutandis to Kiniksa.

 

8.4                               Kiniksa Rights in Lieu of Termination.  If Kiniksa has the right to terminate this Agreement pursuant to Section 8.2 for Biogen’s material breach, Kiniksa may elect to either

 

(i)           terminate this Agreement (in which case the provisions of Section 8.3 shall apply) or (ii) continue this Agreement, subject to the following provisions which shall be effective upon Kiniksa’s notice of such election pursuant to this clause (ii) (the “Kiniksa Election Notice”):

 

(a)                                 the licenses and rights granted by Biogen to Kiniksa pursuant to Section 2.5.1 shall remain in effect;

 

(b)                                 milestone and royalty payments due to Biogen pursuant to Sections5.2 and 5.3 on and after the effective date of termination shall be [***].

 

(c)                                  Nothing herein shall limit Kiniksa’s rights to pursue damages pursuant to a claim under this Agreement.  Except to the extent provided in this Section 8.4, this Agreement shall remain in full force and effect.

 

8.5 Surviving Obligations.  The following portions of this Agreement shall survive termination or expiration of this Agreement: Sections 2.3 (with respect to Assumed Liabilities prior to the effective date of termination), 2.4, 5.3.5, 5.5, 5.6, 5.7, 8.3, 8.4, 8.5, 10.1 (as applicable) and 10.3, 10.4, 10.5, 10.6, 10.7, 10.10, and Articles 1 (as applicable), 7 and 9 (for the time periods set forth therein).  All other portions of and obligations under this Agreement shall terminate (including Section 3.4) upon expiration or termination of this Agreement, except that expiration or termination of this Agreement shall not relieve the Parties of any liability or obligation which accrued hereunder prior to the effective date of such expiration or termination.

 

9.          SURVIVAL; INDEMNIFICATION; INSURANCE; LIMITATIONS

 

9.1                       Survival of Representations and Warranties.  Except for those representations and warranties contained in Sections 6.2.1, 6.2.4(h) and 6.2.4(i) of this Agreement (which shall survive indefinitely), (a) those representations and warranties contained in Sections 6.2.2 and 6.2.3 of this Agreement shall continue in full force and effect for a period of twelve (12) months from the Effective Date and (b) those representations and warranties contained in Sections 6.2.4 of this Agreement shall continue in full force and effect for a period of eighteen (18) months from the Effective Date.  Any claims for indemnification under Section 9.2 or Section 9.3 asserted in writing as provided for in this Article 9 prior to such expiration date, if any, applicable to the representation or warranty with respect to which such claim for indemnification is made shall survive until finally resolved and satisfied in full.  No Third Party other than the Indemnified Parties shall be a Third Party or other beneficiary of any representations, warranties, covenants and agreements in this Agreement and no such Third Party shall have any

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

rights of contribution with respect to such representations, warranties, covenants or agreements or any matter subject to or resulting in indemnification under this Article 9 or otherwise.  The representations, warranties, covenants and agreements set forth in this Agreement and in the Patent Assignment Agreement shall not be affected or diminished in any way by any investigation (or failure to investigate) at any time by or on behalf of the Party for whose benefit such representations, warranties, covenants and agreements were made.

 

9.2                               Indemnification by Kiniksa.  Subject to Sections 9.4 and 9.7, Kiniksa agrees to defend Biogen, its Affiliates and its (and its Affiliates’) directors, officers, employees and agents (the “Biogen Indemnified Parties”) at Kiniksa’s cost and expense, and will indemnify and hold Biogen and the other Biogen Indemnified Parties harmless from and against any claims, losses, costs, damages, fees or expenses (including legal fees and expenses) (collectively, “Losses”) resulting from any claims (including Third Party and product liability claims), actions or demands (collectively “Claims”) arising out of or otherwise relating to:

 

(a)                                 the negligence or willful misconduct of Kiniksa in connection with Kiniksa’s performance of this Agreement;

 

(b)                                 the material breach by Kiniksa of this Agreement, any Assigned Contract or the applicable terms of any Retained Contract, including any of the representations or warranties made hereunder by Kiniksa;

 

(c)                                  the Exploitation of any Acquired Antibody or Product by or on behalf of Kiniksa or its Affiliates on or after the Effective Date; or

 

(d)                                 the use by or on behalf of Kiniksa in any Clinical Trial of any materials provided by Biogen pursuant to Section 2.6.1.

 

except, in each case, to the extent such Losses arise out of or relate to such subsection (a), (b), (c) or (d) of Section 9.3.  In the event of any such Claim against the Biogen Indemnified Parties by a Third Party, Biogen shall promptly notify Kiniksa in writing of the Claim (provided, that, any failure or delay to so notify Kiniksa shall not excuse any obligations of Kiniksa except to the extent Kiniksa is actually prejudiced thereby) and Kiniksa shall solely manage and control, at its sole expense, the defense of the Claim and its settlement; provided, that, Kiniksa shall not settle any such Claim without the prior written consent of Biogen if such settlement does not include a complete release of Biogen Indemnified Parties from liability or if such settlement would involve undertaking an obligation (including the payment of money by a Biogen Indemnified Party), would bind or impair a Biogen Indemnified Party, or includes any admission of wrongdoing or that any intellectual property or proprietary right of Biogen is invalid or unenforceable.  The Biogen Indemnified Parties shall cooperate with Kiniksa and may, at their option and expense, be represented in any such action or proceeding by counsel of their own choosing.  With respect to any Claim subject to indemnification under this Section 9.2: (i) both Kiniksa and the Biogen Indemnified Parties, as the case may be, shall keep the other Person fully informed of the status of such Claim and any related proceedings at all stages thereof where

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

such Person is not represented by its own counsel, (ii) the Parties agree (each at its own expense) to render to each other such assistance as they may reasonably require of each other and to cooperate in good faith with each other in order to ensure the proper and adequate defense of any such Claim and (iii) the Parties agree to cooperate in such a manner as to preserve in full (to the extent possible) the confidentiality of all Confidential Information and information protected by the attorney-client and work-product privileges in any such action or proceeding.

 

9.3                               Indemnification By Biogen.  Subject to Sections 9.4 and 9.7, Biogen agrees to defend Kiniksa, its Affiliates and its (and its Affiliates’) directors, officers, employees and agents (the “Kiniksa Indemnified Parties”) at Biogen’s cost and expense, and will indemnify and hold Kiniksa and the other Kiniksa Indemnified Parties harmless from and against any Losses resulting from any Claims arising out of or otherwise relating to:

 

(a)                                 the negligence or willful misconduct of Biogen or its Affiliates in connection with such parties’ performance of this Agreement;

 

(b)                                 the material breach by Biogen of this Agreement including any of the representations or warranties made hereunder by Biogen;

 

(c)                                  the Exploitation of any Acquired Antibody or Product by or on behalf of Biogen or its Affiliates prior to the Effective Date; or

 

(d)                                 the Exploitation of any Acquired Antibody or Product by or on behalf of Biogen or its Affiliates following termination of this Agreement and reversion of rights pursuant to Section 8.3.

 

except, in each case, to the extent such Losses arise out of or relate to subsections (a), (b), or (c) of Section 9.2.  In the event of any such Claim against the Kiniksa Indemnified Parties by a Third Party, Kiniksa shall promptly notify Biogen in writing of the Claim (provided, that, any failure or delay to so notify Biogen shall not excuse any obligation of Biogen except to the extent Biogen is actually prejudiced thereby) and Biogen shall solely manage and control, at its sole expense, the defense of the Claim and its settlement; provided, that, Biogen shall not settle any such Claim without the prior written consent of Kiniksa if such settlement does not include a complete release of the Kiniksa Indemnified Parties from liability or if such settlement would involve undertaking an obligation (including the payment of money by an Kiniksa Indemnified Party), would bind or impair an Kiniksa Indemnified Party, or includes any admission of wrongdoing or that any intellectual property or proprietary right of Kiniksa is invalid or unenforceable.  The Kiniksa Indemnified Parties shall cooperate with Biogen and may, at their option and expense, be represented in any such action or proceeding by counsel of their own choosing.  With respect to any Claim subject to indemnification under this Section 9.3: (i) both Biogen and the Kiniksa Indemnified Parties, as the case may be, shall keep the other Person fully informed of the status of such Claim and any related proceedings at all stages thereof where such Person is not represented by its own counsel, (ii) the Parties agree (each at its own expense) to render to each other such assistance as they may reasonably require of each other and to

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

cooperate in good faith with each other in order to ensure the proper and adequate defense of any such Claim and (iii) the Parties agree to cooperate in such a manner as to preserve in full (to the extent possible) the confidentiality of all Confidential Information and information protected by the attorney-client and work-product privileges in any such action or prosecution.

 

9.4                               Limitation on Indemnification.  Notwithstanding anything to the contrary in Section 9.2 or 9.3, (a) no Indemnifying Party shall have any liability to the corresponding Indemnified Parties under Section 9.2 or Section 9.3 until the aggregate Losses of such Indemnified Parties exceed $50,000, after which the Indemnified Parties shall be entitled to all such Losses; and (b) Kiniksa’s recourse against Biogen with respect to any right to indemnification under Sections 9.3 (a), (b) or (c) shall be limited in amount to the lesser of (i) the aggregate amount of all payments made by Kiniksa to Biogen hereunder determined at the time of payment of any such indemnification Claim and (ii) $41,000,000, except in the cases of (A) fraud, willful misconduct or intentional misrepresentation or (B) with respect to any Excluded Liability, in which case there shall be no limit.

 

9.5                               Sole Remedy.  Except to the extent that a claim involves fraudulent or willful misconduct or intentional misrepresentation, the sole and exclusive remedy for any material breach or alleged material breach of any representation, warranty or covenant shall be indemnification in accordance with this Article 9.

 

9.6                              Insurance.  Kiniksa will maintain, at its cost, reasonable insurance against liability and other risks associated with its activities contemplated by this Agreement, provided, that, if Kiniksa is engaged in the Development of Acquired Antibodies or Products hereunder, Kiniksa will maintain, in force from thirty (30) days prior to the Initiation of any Clinical Trial, a clinical trials/product liability insurance policy providing coverage of at least [***] per claim and [***] annually in the aggregate; provided, further, that, if Kiniksa Commercializes any Product, such coverage shall be increased to at least [***] at least thirty (30) days prior to the date of anticipated First Commercial Sale of such Product.  Kiniksa shall provide thirty (30) days advance written notice to Biogen of the termination, cancellation or material alteration of the terms or conditions of its insurance policies.  If such policies are written on a claims made basis, they shall remain in effect for a minimum period of five (5) years after the termination or expiration of this Agreement and shall not be cancelled or subject to a reduction of coverage without the prior written authorization of Biogen.  Upon Biogen’s written request, Kiniksa shall provide Biogen certified copies of Kiniksa’s insurance policies to evidence the purchase and/or maintenance of such policies.  Maintenance of such insurance coverage shall not relieve Kiniksa of any responsibility under this Agreement for damages in excess of insurance limits or otherwise.

 

9.7                               LIMITATION OF DAMAGES.  IN NO EVENT SHALL EITHER PARTY BE LIABLE HEREUNDER TO THE OTHER PARTY FOR ANY PUNITIVE, RELIANCE, INDIRECT, SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING LOST REVENUE, LOST PROFITS, OR LOST SAVINGS) HOWEVER CAUSED AND UNDER ANY THEORY, EVEN IF IT HAS NOTICE OF THE POSSIBILITY OF SUCH DAMAGES.  THE LIMITATIONS SET FORTH IN THIS SECTION 9.7 SHALL NOT

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

APPLY WITH RESPECT TO (A) ANY BREACH OF ARTICLE 7 OR (B) THE INTENTIONAL MISCONDUCT OR FRAUD OF A PARTY.  NOTHING IN THIS SECTION 9.7 IS INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF A PARTY UNDER THIS ARTICLE 9 WITH RESPECT TO ANY DAMAGES PAID BY THE OTHER PARTY TO A THIRD PARTY IN CONNECTION WITH A THIRD PARTY CLAIM.

 

10.           MISCELLANEOUS

 

10.1                        Entire Agreement; Amendment.  This Agreement, all Schedules and Exhibits attached to this Agreement, and the Patent Assignment Agreement constitute the entire agreement between the Parties as to the subject matter hereof.  Except as set forth in this Section 10.1, (i) all prior and contemporaneous negotiations, representations, warranties, agreements, statements, promises and understandings with respect to the subject matter of this Agreement are hereby superseded and merged into, extinguished by and completely expressed by this Agreement and the Patent Assignment Agreement and (ii) none of the Parties shall be bound by or charged with any written or oral agreements, representations, warranties, statements, promises or understandings not specifically set forth in this Agreement.  No amendment, supplement or other modification to any provision of this Agreement shall be binding unless in writing and signed by both Parties.  Notwithstanding the foregoing, except with respect to any rights and obligations of the Parties with respect to the Acquired Know-How or the Acquired Patent Rights which shall be governed solely by this Agreement, (i) all rights and obligations of the Parties that arose under the CDA during the period commencing on the CDA Effective Date and continuing through the Effective Date, including any dispute or alleged breach by a Party of any of the terms of the CDA during such period, shall be governed solely by the terms of the CDA, (ii) the terms and conditions of the CDA shall survive solely for the limited purposes set forth in subsection (i) above and (iii) the CDA shall otherwise terminate as of the Effective Date.

 

10.2                        Section 365(n) of the Bankruptcy Code.  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 to the extent permitted thereunder.  The Parties shall retain and may fully exercise all of their respective rights and elections under the U.S. Bankruptcy Code.  Upon the bankruptcy of Biogen, Kiniksa shall further be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property, and such, if not already in its possession, shall be promptly delivered to Kiniksa, unless Biogen elects to continue, and continues, to perform all of its obligations under this Agreement.

 

10.3                        Governing Law; Jurisdiction.  This Agreement and its effect are subject to and shall be construed and enforced in accordance with the law of the State of New York, without regard to its conflicts of laws that would require the application of any other Law.  Each of the Parties hereby irrevocably and unconditionally consents to submit to the exclusive jurisdiction of the federal courts located in the Eastern District of the State of New York for any matter

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

arising out of or relating to this Agreement and the transactions contemplated hereby, and agrees not to commence any litigation relating thereto except in such courts.  Each of the Parties hereby irrevocably and unconditionally waives any objection to the laying of venue of any matter arising out of this Agreement or the transactions contemplated hereby in the courts of the State of New York and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such matter brought in any such court has been brought in an inconvenient forum.  The Parties agree that a final judgment in any such matter shall be conclusive and may be enforced in other jurisdictions by suits on the judgment or in any other manner provided by law.  Any proceeding brought by either Party under this Agreement shall be exclusively conducted in the English language.

 

10.4                        Notice.  All notices or communication required or permitted to be given by either Party hereunder shall be deemed sufficiently given if mailed by registered mail or certified mail, return receipt requested, or sent by overnight courier, such as Federal Express, to the other Party at its respective address set forth below (including a copy as designated below) or to such other address as one Party shall give notice of to the other from time to time hereunder.  Mailed notices shall be deemed to be received on the third (3rd) Business Day following the date of mailing.  Notices sent by overnight courier shall be deemed received the following Business Day.

 

If to Kiniksa:                                                                        Kiniksa Pharmaceuticals, Ltd.

 

Clarendon 
 House 2 
 Church Street

 

Hamilton HM
 11 Bermuda

 

Attention: Chief Legal Officer

 

With copies to:                                                               Kiniksa Pharmaceuticals Corp.

 

15 Walnut Street

 

Wellesley, MA 02481 
 Attention: Chief Legal 
 Officer

 

and:                                                                                                                       Latham & Watkins 
 LLP John Hancock 
 Tower 27th Floor

 

200 Clarendon Street

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Boston, MA 02116

 

Attn: Johan Brigham

 

If to Biogen:                                                                           Biogen MA 
 Inc. 225 
 Binney Street

 

Cambridge, MA 02142 
 Attn: General Counsel

 

10.5                        Compliance With Law; Severability.  Nothing in this Agreement shall be construed to require the commission of any act contrary to Law.  If any one or more provisions of this Agreement is held to be invalid, illegal or unenforceable, the affected provisions of this Agreement shall be curtailed and limited only to the extent necessary to bring it within the applicable legal requirements and the validity, legality and enforceability of the remaining provisions of this Agreement shall not in any way be affected or impaired thereby.

 

10.6                        Successors and Assigns.  This Agreement shall bind and inure to the benefit of the successors and permitted assigns of the Parties hereto.  Neither this Agreement nor any right, interest or obligation of a Party hereunder (including, with respect to Kiniksa, any of the Acquired Patent Rights or Acquired Know-How) may be assigned by either Party without the written consent of the other Party, except that each Party may assign this Agreement and the rights, obligations and interests of such Party under this Agreement (a) in whole or in part, to any of its Affiliates, or (b) subject to Kiniksa’s and its Affiliates’ obligations with respect to ROFN Transactions pursuant to Section 3.4, in whole, but not in part, to any purchaser of all or substantially all of its assets or all or substantially all of its assets to which this Agreement relates or to the purchaser of shares representing a majority of its common stock voting rights or to the surviving corporation resulting from any merger, consolidation, share exchange or other similar transaction; provided, that, (i) the assigning Party will provide the other Party with prompt written notice of assignment, (ii) the permitted assignee will assume all obligations of its assignor under this Agreement and the Patent Assignment Agreement (or as related to the assigned part where a partial assignment to an Affiliate), (iii) unless expressly so agreed in writing by the Parties, no permitted assignment will relieve the assignor of liability under this Agreement or the Patent Assignment Agreement, and (iv) any attempted assignment in contravention of this Section 10.6 shall be void.

 

10.7                        Waivers.  A Party’s consent to or waiver, express or implied, of any other Party’s breach of its obligations hereunder shall not be deemed to be or construed as a consent to or waiver of any other breach of the same or any other obligations of such breaching Party.  A Party’s failure to complain of any act, or failure to act, by the other Party, to declare the other Party in default, to insist upon the strict performance of any obligation or condition of this Agreement or to exercise any right or remedy consequent upon a breach thereof, no matter how long such failure continues, shall not constitute a waiver by such Party of its rights hereunder,

 

52

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

of any such breach, or of any other obligation or condition.  A Party’s consent in any one instance shall not limit or waive the necessity to obtain such Party’s consent in any future instance and in any event no consent or waiver shall be effective for any purpose hereunder unless such consent or waiver is in writing and signed by the Party granting such consent or waiver.

 

10.8                       Force Majeure.  Except for the obligation to pay money when due, neither Party shall be liable to the other for failure or delay in the performance of any of its obligations under this Agreement for the time and to the extent such failure or delay is caused by a Force Majeure.  The Party affected by the Force Majeure shall provide the other Party in writing with full particulars thereof as soon as it becomes aware of the same (including its best estimate of the likely extent and duration of the interference with its activities), and will use commercially reasonable efforts to overcome the difficulties created thereby and to resume performance of its obligations as soon as practicable.  For the avoidance of doubt, under no circumstances shall the alleged or actual inability to pay money be considered an event of Force Majeure.

 

10.9                        No Third Party Beneficiaries.  Nothing in this Agreement shall be construed as giving any Person, other than the Parties hereto and their successors and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof, except for the provisions of Article 9 (with respect to which the Persons to which Article 9 applies shall be Third Party beneficiaries in accordance with Article 9).

 

10.10                 Headings; Schedules and Exhibits.  Article and Section headings used herein are for convenient reference only, and are not a part of this Agreement.  All Schedules and Exhibits are incorporated herein by this reference.

 

10.11                 Counterparts.  This Agreement may be executed in counterparts by a single Party, each of which when taken together shall constitute one and the same agreement, and may be executed through the use of facsimiles or .pdf documents.

 

10.12                 Further Assurances.  From time to time after the Effective Date, and for no further consideration (except as expressly set forth in Section 2.5 and Section 2.6), Biogen shall execute, acknowledge and deliver such assignments, transfers, consents, assumptions and other documents and instruments and take such other actions as may be necessary or desirable to consummate and make effective the transactions contemplated by this Agreement.

 

(Signature Page Immediately to Follow)

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

IN WITNESS WHEREOF, this Agreement has been executed by the Parties hereto all as of the date first above written.

 

	
KINIKSA   PHARMACEUTICALS, LTD.
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ Thomas Beetham
    	
 
    
	
Name:
    	
Thomas Beetham
    	
 
    
	
Title:
    	
Executive Vice President
    	
 
    
	
 
    	
 
    	
 
    
	
BIOGEN MA INC.
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ John McDonald
    	
 
    
	
Name:
    	
John McDonald
    	
 
    
	
Title:
    	
VP, Business Development
    	
 
    

 

[Signature Page to Asset Purchase Agreement]

 

54

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule A

 

Purchased Assets

 

1.                                      Acquired Patent Rights

 

[***]

 

Schedule A-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

2.                                      Acquired Know-How

 

[***]

 

Schedule A-2

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

3.                                      Assigned Contracts

 

[***]

 

Schedule A-3

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

4.                                      Inventory

 

A.                                         [***]

 

[REDACTED]

 

B.                                     [***]

 

Schedule A-4

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

C.                                    [***]

 

Schedule A-5

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule B

 

Selected Obligations Under Sigma Agreement

 

[***]

 

Schedule B-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule C

 

Determination of Applicable Multiplier

 

[***]

 

Schedule C-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule D

 

Background Licensed Patent Rights

 

	
Publication
   Number
    	
 
    	
Title
    	
 
    	
Application
   Date
    	
 
    	
Publication
   Date
    	
 
    	
Inventor(s)
    	
 
    	
All IPC
    
	
 

[***]
    

 

Schedule D-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule E

 

Retained Contracts

 

1.             Non-Exclusive Biological Material License Agreement by and between American Type Culture Collection (ATCC) and Biogen MA Inc., effective August 12, 2015 (the “ATCC Agreement”).

 

2.             Non-Exclusive License Agreement by and between SIGMA-ALDRICH CO. LLC (Sigma) and Biogen Idec MA, Inc., effective September 24, 2014 (the “Sigma Agreement”).

 

Retained Contracts Payments

 

[***]

 

Schedule E-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule F

 

Description of BIIB069

[***]

 

Schedule F-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule G

 

Completion of Technology Transfer

 

[***]

 

Schedule G-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule H

 

Individuals for Purposes of Knowledge

 

[***]

 

Schedule H-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule I

 

Exceptions to Biogen Obligations/Representations in Sections 2.6.6 and 6.2.4(g) and (l)

[***]

 

Schedule I-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Exhibit A

 

Form of Patent Assignment Agreement

 

PATENT ASSIGNMENT AGREEMENT

 

THIS PATENT ASSIGNMENT AGREEMENT (this “Assignment”) is being entered into by and between Biogen MA Inc., a Massachusetts corporation (“Assignor”), and Kiniksa Pharmaceuticals, Ltd., a Bermuda exempted company (“Assignee”).

 

WHEREAS, Assignor is an owner of the patent rights listed on Attachment A (collectively, the “Patents”); and

 

WHEREAS, Assignor has agreed with Assignee for the transfer to Assignee of all of Assignor’s right, title and interest in and to said Patents and the inventions therein pursuant to a certain Asset Purchase Agreement between Assignor and Assignee, dated as of September  ,  2016 (the “Asset Purchase Agreement”).

 

NOW THEREFORE, pursuant to such Asset Purchase Agreement and in consideration of the mutual covenants, agreements, representations and warranties contained herein and in the Asset Purchase Agreement, Assignor hereby sells, assigns, transfers, and sets over to Assignee   or its heirs, successors, assigns, or other legal representatives the full and entire right, title, and interest in and to the Patents and the inventions therein, including the right of Assignee or its heirs, successors, assigns, or other legal representatives to: (a) file any nonprovisional patent applications and to otherwise seek any patent in the United States and any foreign jurisdiction claiming priority to the provisional patent application; (b) file any and all divisional, continuation, and continuation-in-part applications claiming priority to the  nonprovisional  patent application; and (c) seek reissues, reexaminations, adjustments, or extensions of any patent claiming priority to the provisional application which the Assignee may hold and enjoy    as fully and entirely as Assignor would have had this assignment and sale not been made and Assignor acknowledges that Assignee has all rights under all applicable intellectual property treaties and conventions and the full benefits thereof and all rights, privileges and advantages appertaining thereto, TO HOLD the same unto and to the use of Assignee, its successors and assigns during the residue of the respective terms for which the said Patents were or will be granted and during any such terms, and for any and all rights extending from, including any divisions, continuations, continuations-in-part, reissues, reexaminations adjustments and extensions;

 

AND, for the same consideration, Assignor hereby covenants and agrees to and with Assignee, its successors, legal representatives and assigns that Assignor will sign all papers and documents, take all lawful oaths, and do all acts necessary or required to be done for the

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

recordation of this assignment of the Patents and the inventions therein and other such acts that may be necessary or desirable to perfect the title to, including the invention, the provisional patent application, any application or applications claiming priority thereto and any patent or patents that may be obtained therefrom and Assignor further agrees to ratify and hereby ratifies any acts of Assignee in applying for a patent in Assignee’s own name in any jurisdiction where such procedure is proper and agrees to execute or have executed any documents or assignments where it is necessary that they be executed by the inventor(s) and Assignor further agrees to execute assignments of any patent applications claiming the invention, any patent applications filed which claim priority to the provisional patent application, and any patents issuing from such patent applications to Assignee;

 

AND, Assignor represents and warrants that Assignor has the full right to convey the entire interest of the Patents, the inventions therein and the applications and has not granted any rights inconsistent with the rights granted in this Assignment.

 

Executed as of this 7th day of September, 2016.

 

ASSIGNOR:

 

BIOGEN MA INC.

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

ASSIGNEE:

 

KINIKSA PHARMACEUTICALS, LTD.

 

2

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

	
By:
    	
 
    	
 
    
	
Name:
    	
 
    
	
Title:
    	
 
    

 

3

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

ATTACHMENT A

 

Assigned Patents

 

[***]

 

Exhibit A-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

AMENDMENT NO. 1 TO

ASSET PURCHASE AGREEMENT

 

This Amendment No. 1 to Asset Purchase Agreement (this “Amendment”) is dated as of July 31, 2017 (the “Amendment Effective Date”) by and between Biogen MA Inc., a Massachusetts corporation (“Biogen”), and Kiniksa Pharmaceuticals, Ltd., a Bermuda exempted company (“Kiniksa”). Kiniksa and Biogen are sometimes referred to herein individually as a “Party” and collectively as the “Parties”). Terms used in this Amendment and not otherwise defined shall have the respective meanings set forth in the APA (as defined below).

 

WHEREAS, pursuant to the terms of the Asset Purchase Agreement (the “APA”) dated as of September 7, 2016 (the “APA Effective Date”), by and between Biogen and Kiniksa, Biogen agreed to sell to Kiniksa, and Kiniksa agreed to purchase from Biogen, certain assets of Biogen used in or relating to BIIB069, all upon the terms and conditions set forth herein; and

 

WHEREAS, the Parties now wish to amend the APA to (a) provide for the transfer by Biogen to Kiniksa of certain quantities of an additional antibody of Biogen designated as BIIB22G11 and (b) clarify certain definitions under the APA related to BIIB22G11; and

 

WHEREAS, pursuant to Section 10.1 of the APA, no amendment, supplement or other modification to any provision of the APA shall be binding unless in writing and signed by both Parties.

 

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereto, intending to be legally bound, hereby agree as follows:

 

Amendments to APA.

 

The following new definition is hereby inserted in alphabetical order in Section 1.1 of the APA:

 

“BIIB22G11” means the Antibody described on Schedule F-1 attached hereto.”

 

The definition of “Acquired Antibody” in Section 1.1 of the APA is hereby deleted in its entirety and the following is hereby inserted in lieu thereof:

 

“Acquired Antibody” means (a) BIIB069, BIIB22G11 or any [***] Antibody that is Covered by one or more claims within the Acquired Patent Rights; (b) [***].

 

The definition of “Inventory” in Section 1.1 of the APA is hereby deleted in its entirety and the following is hereby inserted in lieu thereof:

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

“Inventory” means the inventory of BIIB069 and BIIB22G11 listed as Inventory in Part 4 of Schedule A attached hereto.”

 

Section 3.2 of the APA is hereby deleted in its entirety and the following is hereby inserted in lieu thereof:

 

3.2 Diligence.  Kiniksa shall use Commercially Reasonable Efforts to Develop and Commercialize Acquired Antibodies and Products [***] and to commit such resources (including employees, consultants, contractors, facilities, equipment and materials) as are necessary to conduct such Development and Commercialization activities.  Kiniksa shall perform its obligations under this Agreement in good scientific manner and in compliance with all applicable Law. For purposes of clarity, with respect to each Development and/or Commercialization activity that will or would reasonably be expected to be submitted to a Regulatory Authority in support of a Regulatory Filing or Marketing Authorization, Kiniksa shall comply in all material respects with GLPs, GMPs or Good Clinical Practices (or, if and as appropriate under the circumstances, International Council for Harmonisation (“ICH”) guidance or other comparable regulation and guidance of any Regulatory Authority in any country or region in the Territory).”

 

Part 4 of Schedule A to the APA is hereby amended by adding thereto the additional inventory of BIIB22G11 listed on Schedule A-1 attached hereto.

 

A new Schedule F-1 entitled “Description of BIIB22G11” is hereby added to the APA in the form of Schedule F-1 attached hereto.

 

Miscellaneous.  The Parties hereby confirm and agree that, except as amended hereby, the APA remains in full force and effect and continues to be a binding obligation of the Parties.  This Amendment may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[Remainder of page intentionally left blank]

 

2

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

IN WITNESS WHEREOF, the Parties hereto have executed this Amendment as of the Amendment Effective Date.

 

	
KINIKSA   PHARMACEUTICALS, LTD.
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/ Thomas Beetham
    	
 
    
	
Name:
    	
Thomas Beetham
    	
 
    
	
Title:
    	
Executive Vice President
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
BIOGEN MA INC.
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
/s/ John McDonald
    	
 
    
	
Name:
    	
John McDonald
    	
 
    
	
Title:
    	
Vice President, Business Development
    	
 
    
				

 

3

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule A-1

 

Part 4 - Inventory of BIIB22G11

 

[***]

 

Schedule A-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule F-1

 

Description of BIIB22G11

 

[***]

 

Exhibit F-1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.Exhibit 10.8

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

LICENSE AGREEMENT

 

between

 

MEDIMMUNE, LIMITED

 

and

 

KINIKSA PHARMACEUTICALS, LTD.

 

Dated as of December 21, 2017

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

TABLE OF CONTENTS

 

	
ARTICLE 1
    	
DEFINITIONS
    	
1
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 2
    	
GRANT OF RIGHTS
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.1
    	
Grants to Licensee
    	
17
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.2
    	
Sublicenses
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.3
    	
Retention of Rights;   Limitations Applicable to License Grants
    	
18
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.4
    	
Licensed Patent Rights   Transfer;
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.5
    	
Maintencance of   In-License Agreements
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.6
    	
Completeness of   Technology
    	
19
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
2.7
    	
Exclusivity
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 3
    	
PURCHASE AND SALE OF   ASSETS
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.1
    	
Purchase and Sale of Assets
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.2
    	
Excluded Assets
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.3
    	
Assumed Liabilities
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
3.4
    	
Excluded Liabilities
    	
20
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 4
    	
DEVELOPMENT, REGULATORY   AND COMMERCIALIZATION ACTIVITIES; TECHNOLOGY TRANSFER
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.1
    	
Development
    	
21
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.2
    	
Regulatory Activities
    	
22
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.3
    	
Commercialization
    	
23
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.4
    	
Statements and   Compliance with Applicable Law
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.5
    	
Manufacturing
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.6
    	
Subcontracting
    	
24
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.7
    	
Technology Transfer
    	
25
    
					

 

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4.8
    	
Cost of MedImmune   Support
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
4.9
    	
Disclosure of Excluded   Technology
    	
26
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 5
    	
PAYMENTS AND RECORDS
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.1
    	
Upfront Payment
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.2
    	
Milestones
    	
27
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.3
    	
Royalties
    	
29
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.4
    	
Mode of Payment;   Offsets
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.5
    	
Taxes
    	
31
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.6
    	
Anti-Tax Evasion
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.7
    	
Interest on Late   Payments
    	
32
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.8
    	
Financial Records
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.9
    	
Audit
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
5.10
    	
Audit Dispute
    	
33
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 6
    	
INTELLECTUAL PROPERTY
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.1
    	
Ownership of   Intellectual Property
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.2
    	
Maintenance and   Prosecution of Patents
    	
34
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.3
    	
Enforcement of Patents
    	
35
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.4
    	
Infringement Claims by   Third Parties
    	
37
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.5
    	
Invalidity or Unenforceability   Defenses or Actions
    	
38
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.6
    	
Third Party Patent   Rights
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
6.7
    	
Product Trademarks
    	
39
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 7
    	
CONFIDENTIALITY AND   NON-DISCLOSURE
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.1
    	
Confidentiality   Obligations
    	
40
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.2
    	
Permitted Disclosures
    	
41
    

 

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7.3
    	
Use of Name
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.4
    	
Public Announcements
    	
42
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.5
    	
Return of Confidential   Information
    	
43
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
7.6
    	
Privileged   Communications
    	
43
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 8
    	
REPRESENTATIONS AND   WARRANTIES
    	
44
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.1
    	
Mutual Representations   and Warranties
    	
44
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.2
    	
Additional   Representations and Warranties of MedImmune
    	
45
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.3
    	
Additional   Representations and Warranties of Licensee
    	
47
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.4
    	
Disclaimer of   Warranties
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.4
    	
DISCLAIMER OF   WARRANTIES
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.5
    	
ADDITIONAL WAIVER
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
8.6
    	
Anti-Bribery and   Anti-Corruption Compliance
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 9
    	
INDEMNITY
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.1
    	
Indemnification of   MedImmune
    	
50
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.2
    	
Indemnification of   Licensee
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.3
    	
Indemnification   Procedures
    	
51
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.4
    	
Special, Indirect   and Other Losses
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
9.5
    	
Insurance
    	
53
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 10
    	
TERM AND TERMINATION
    	
54
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.2
    	
Termination
    	
54
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.3
    	
Rights in Bankruptcy
    	
55
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.4
    	
Consequences of   Termination
    	
56
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
10.6
    	
Accrued Rights;   Surviving Obligations
    	
58
    
	
 
    	
 
    	
 
    	
 
    
	
ARTICLE 11
    	
MISCELLANEOUS
    	
58
    

 

iii

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

	
 
    	
11.1
    	
Force Majeure
    	
58
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.2
    	
Export Control
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.3
    	
Assignment
    	
59
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.4
    	
Severability
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.5
    	
Dispute Resolution
    	
60
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.6
    	
Governing Law
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.7
    	
Notices
    	
62
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.8
    	
Entire Agreement;   Amendments
    	
63
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.9
    	
English Language
    	
63
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.10
    	
Equitable Relief
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.11
    	
Waiver and   Non-Exclusion of Remedies
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.12
    	
No Benefit to Third   Parties
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.13
    	
Further Assurance
    	
64
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.14
    	
Relationship of the   Parties
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.15
    	
Non-Solicitation of   Employees
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.16
    	
References
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.17
    	
Construction
    	
65
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
11.18
    	
Counterparts
    	
66
    
	
 
    	
 
    	
 
    	
 
    
	
SCHEDULES
    	
 
    

 

Schedule 1.39                                            Exclusive Licensed Patents

 

Schedule 1.56                                            In-License Agreements

 

Schedule 1.74                                            Non-Exclusive Licensed Patents

 

Schedule 1.104                                     Transition Activites

 

iv

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule 3.1                                                   Purchased Assets

 

Schedule 8.2.3                                         Actions/Notices related to Exclusive Licensed Patents as at the Effective Date

 

v

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

LICENSE AGREEMENT

 

This License Agreement (the “Agreement”) is made and entered into effective as of December 21, 2017 (the “Effective Date”) by and between MedImmune, Limited, a limited liability company duly authorized and existing under the laws of England and Wales (“MedImmune”) and Kiniksa Pharmaceuticals, Ltd., a Bermuda exempted company (“Licensee”).  MedImmune and Licensee are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, MedImmune owns and controls certain intellectual property rights with respect to the Licensed Compound (as defined herein) and Licensed Products (as defined herein) in the Territory (as defined herein); and

 

WHEREAS, MedImmune wishes to grant a license to Licensee, and Licensee wishes to take a license, under such intellectual property rights to develop and commercialize Licensed Products in the Territory, in each case in accordance with the terms and conditions set out below.

 

NOW, THEREFORE, in consideration of the premises and the mutual promises and conditions set out herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

 

ARTICLE 1
 DEFINITIONS

 

Unless otherwise specifically provided herein, the following terms shall have the following meanings:

 

1.1.                            “Affiliate” means, with respect to a Party, any Person that, directly or indirectly, through one (1) or more intermediaries, controls, is controlled by or is under common control with such Party.  For purposes of this definition, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means: (i) the possession, directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance or otherwise; or (ii) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a business entity (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity).

 

1.2.                            “Agreement” has the meaning set out in the preamble.

 

1

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

1.3.                            “Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act, as amended, the UK Bribery Act 2010, as amended, and any other applicable anti-corruption laws and laws for the prevention of fraud, racketeering, money laundering or terrorism.

 

1.4.                            “Applicable Law” means applicable federal, state, regional, local or foreign laws, statues, codes or ordinance, rules and regulations, including any rules, regulations, guidelines or other requirements of the Regulatory Authorities, including all decisions of any Courts having the effect of law in each such jurisdiction, that may be in effect from time to time, including the FFDCA and the Anti-Corruption Laws.

 

1.5.                            “Arbitrators” has the meaning set out in Section 11.5.2.

 

1.6.                            “Assumed Liabilities” has the meaning set out in Section 3.3.

 

1.7.                            “Auditor” has the meaning set out in Section 5.10.

 

1.8.                            “Bioequivalent” means, a biological product that (i) is highly similar to the Licensed Product notwithstanding minor differences in clinically inactive components; and (ii) has no clinically meaningful differences between the biological product and the Licensed Product in terms of the safety, purity, and potency.

 

1.9.                            “Biologics License Application” or “BLA” means a Biologics License Application submitted to the FDA under subsection (a) or (k) of Section 351 of the FFDCA or any corresponding foreign application in the Territory, including, with respect to the European Union, a marketing authorization application filed with the EMA pursuant to the centralized approval procedure or with the applicable Regulatory Authority of a country in Europe (including Great Britain) with respect to the mutual recognition or any other national approval.

 

1.10.                     “Biosimilar Product” means with respect to a Licensed Product, a therapeutic product that (i) contains as an active ingredient any [***], (ii) is Bioequivalent to such Licensed Product, and (iii) is [***].

 

1.11.                     “Board of Directors” has the meaning set out in the definition of Change of Control.

 

1.12.                     “Breaching Party” has the meaning set out in Section 10.2.2.

 

1.13.                     “Business Day” means a day other than a Saturday or Sunday or a day on which commercial banking institutions in London, England or New York, NY USA are required to be closed.

 

2

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

1.14.                     “Calendar Quarter” means each successive period of three (3) calendar months commencing on January 1, April 1, July 1 and October 1, except that the first Calendar Quarter of the Term shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date and the last Calendar Quarter shall end on the last day of the Term.

 

1.15.                     “Calendar Year” means each successive period of twelve (12) calendar months commencing on January 1 and ending on December 31, except that the first Calendar Year of the Term shall commence on the Effective Date and end on December 31 of the year in which the Effective Date occurs and the last Calendar Year of the Term shall commence on January 1 of the year in which the Term ends and end on the last day of the Term.

 

1.16.                     “Change of Control” with respect to a Party, shall be deemed to have occurred if any of the following occurs after the Effective Date:

 

(i)                                     any “person” or “group” (as such terms are defined below) (i) is or becomes the “beneficial owner” (as defined below, except that a “person” or “group” shall be deemed to have “beneficial ownership” of all shares of capital stock or other equity interests if such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time), directly or indirectly, of shares of capital stock or other interests (including partnership interests) of such Party then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the directors, managers or similar supervisory positions (“Voting Stock”) of such Party representing fifty percent (50%) or more of the total voting power of all outstanding classes of Voting Stock of such Party or (ii) has the power, directly or indirectly, to elect a majority of the members of the Party’s board of directors or similar governing body (“Board of Directors”);

 

(ii)                                  such Party enters into a merger, consolidation or similar transaction with another Person (whether or not such Party is the surviving entity) and as a result of such merger, consolidation or similar transaction (i) the members of the Board of Directors of such Party immediately prior to such transaction constitute less than a majority of the members of the Board of Directors of such Party or such surviving Person immediately following such transaction or (ii) the Persons that beneficially owned, directly or indirectly, the shares of Voting Stock of such Party immediately prior to such transaction cease to beneficially own, directly or indirectly, shares of Voting Stock of such Party representing at least a majority of the total voting power of all outstanding classes of Voting Stock of the surviving Person in substantially the same proportions as their ownership of Voting Stock of such Party immediately prior to such transaction;

 

(iii)                               such Party sells or transfers to any Third Party, in one or more related transactions, properties or assets representing all or substantially all of such Party’s consolidated total assets to which this Agreement relates; or

 

3

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

(iv)                              the holders of capital stock of such Party approve a plan or proposal for the liquidation or dissolution of such Party.

 

For the purpose of this definition of Change of Control: (a) “person” and “group” have the meanings given such terms under Section 13(d) and 14(d) of the United States Securities Exchange Act of 1934 and the term “group” includes any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the aforesaid Act; (b) a “beneficial owner” shall be determined in accordance with Rule 13d-3 under the aforesaid Act; and (c) the terms “beneficially owned” and “beneficially own” shall have meanings correlative to that of “beneficial owner.”

 

1.17.                     “Combination Product” means a Licensed Product that is comprised of or contains the Licensed Compound as an active ingredient together with one (1) or more other active ingredients and is sold either as a fixed dose/unit or as separate doses/units in a single package.

 

1.18.                     “Commercialization” means any and all activities directed to the preparation for sale of, offering for sale of or sale of a Licensed Product, including activities related to Manufacturing for commercial sale, marketing, promoting, distributing and importing such Licensed Product and interacting with Regulatory Authorities regarding any of the foregoing.  When used as a verb, “to Commercialize” and “Commercializing” means to engage in Commercialization and “Commercialized” has a corresponding meaning.

 

1.19.                     “Commercialization Plan” has the meaning set out in Section 4.3.2.

 

1.20.                     “Commercially Reasonable Efforts” means, with respect to the performance of Development, Commercialization and Manufacturing activities with respect to the Licensed Compound or a Licensed Product by Licensee, the carrying out of such activities using efforts and resources comparable to [***].  For purposes of the above, all relevant factors as measured by the facts and circumstances at the time such efforts are due shall be taken into account, including, as applicable and without limitation, mechanism of action; efficacy and safety; product profile; actual or anticipated Regulatory Authority approved labeling; the nature and extent of market exclusivity (including patent coverage, proprietary position and regulatory exclusivity); costs; time required for and likelihood of obtaining Regulatory Approval; expected competitive position of any such Licensed Product vis-à-vis other therapies that have been or are reasonably expected to be developed, marketed and sold or used for the same or similar indications; the presence of third-party Intellectual Property that is reasonably expected to impact the marketability of any such products; regulatory landscape; anticipated pricing and reimbursement for any such Licensed Product; and actual or projected profitability.

 

1.21.                     “Confidential Information” has the meaning set out in Section 7.1.

 

4

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

1.22.                     “Control” means, with respect to any item of Information, Regulatory Documentation, material, Patent or other Intellectual Property, possession of the right, whether directly or indirectly and whether by ownership, license or otherwise (other than by operation of the license and other grants in Section 3), to grant a license, sublicense or other right (including the right to reference Regulatory Documentation) to or under such Information, Regulatory Documentation, material, Patent or other Intellectual Property as provided for herein without violating the terms of any agreement with any Third Party.

 

1.23.                     “Controlling Party” has the meaning set out in Section 6.5.

 

1.24.                     “Court” means any court or arbitration tribunal of the United States, any domestic state, or any foreign country, and any political subdivision thereof.

 

1.25.                     “Cover” means, when referring to a Licensed Compound or Licensed Product with respect to a Patent, that, in the absence of a license granted to a Person under a claim included in such Patent, the practice by such Person of a specified activity with respect to such Licensed Compound or Licensed Product would infringe such claim.

 

1.26.                     “[***]” means the [***].

 

1.27.                     “Development” means all activities related to research, pre-clinical and other non-clinical testing, test method development and stability testing, toxicology, formulation, process development, manufacturing scale-up, qualification and validation, quality assurance/quality control, clinical studies, including Manufacturing in support thereof, statistical analysis and report writing, the preparation and submission of Biologics License Applications, regulatory affairs with respect to the foregoing and all other activities necessary or reasonably useful or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a Regulatory Approval.  When used as a verb, “Develop” means to engage in Development.

 

1.28.                     “Development Plan” shall mean the [***] rolling plan for the Development of the Licensed Product for Commercialization in the Field in the Territory, which plan shall include the overall strategies and estimated timelines for Developing and submitting Regulatory Approvals for such Product within such [***] period in the Field in the Territory (inclusive of planned pre-clinical research and clinical development directed to the Licensed Product).

 

1.29.                     “Dispute” has the meaning set out in Section 11.5.

 

1.30.                     “Dollars” or “$” means United States Dollars.

 

1.31.                     “Effective Date” has the meaning set out in the preamble hereto.

 

5

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

1.32.                     “EMA” means the European Medicines Agency and any successor agency thereto.

 

1.33.                     “Enforcing Party” has the meaning set out in Section 6.3.2.

 

1.34.                     “European Union” means the economic, scientific and political organization of member states as it is constituted as of the Effective Date.

 

1.35.                     “Excluded Liabilities” has the meaning set out in Section 3.4.

 

1.36.                     “Excluded Technology” means certain materials and know-how relating to MedImmune’s [***], and certain related trade secrets.

 

1.37.                     “Exclusive Licensed Technology” means the Exclusive Licensed Patents and the Exclusive Licensed Know How.

 

1.38.                     “Exclusive Licensed Know How” means all Information Controlled by MedImmune or any of its Affiliates as of the Effective Date that solely and/or exclusively relates to, the Licensed Compound or a Licensed Product (including without limitation, any Information sublicensed under [***]). For clarity, Exclusive Licensed Know How excludes the Excluded Technology and Non-Exclusively Licensed Know How.

 

1.39.                     “Exclusive Licensed Patents” means the (i) Patents listed on Schedule 1.39, which include without limitation, the Patents in-licensed under [***], (ii) all patent applications filed either from and claiming priority to the foregoing patents, patent applications or provisional applications of clause (i) or filed from an application claiming priority to any of the patent applications in this clause (ii), including divisionals, continuations, continuations-in-part, provisionals, converted provisionals and continued prosecution applications; (iii) all patents that have issued or in the future issue from the foregoing patent applications; and (iv) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications.

 

1.40.                     “Exploit” means to make, have made, import, use, sell or offer for sale, including to research, Develop, Commercialize, register, Manufacture, have Manufactured, hold or keep (whether for disposal or otherwise), have used, export, transport, distribute, promote, market or have sold or otherwise dispose of a compound or product.  “Exploitation” means the act of Exploiting a compound, product or process.

 

1.41.                     “FDA” means the United States Food and Drug Administration and any successor agency thereto.

 

6

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

1.42.                     “FFDCA” means the United States Food, Drug, and Cosmetic Act, as amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions and modifications thereto).

 

1.43.                     “Field” means all human diagnostic, prophylactic and therapeutic uses.

 

1.44.                     “First Commercial Sale” means, with respect to a Licensed Product and a country, the first sale for monetary value for use or consumption by the end user of such Licensed Product in such country after Regulatory Approval for such Licensed Product has been obtained in such country; provided that the following shall not constitute a First Commercial Sale: (i) any sale to an Affiliate or licensee (unless the Affiliate or licensee is the last entity in the distribution chain of the Licensed Product), or (ii) any transfers of a Licensed Product without consideration or for nominal consideration for use in any clinical trial, or for any bona fide charitable, compassionate use or indigent patient program purpose where Licensed Products are sold at or below cost of goods sold or as a sample.

 

1.45.                     “FTE” means the equivalent of the work of one employee full time for one year consisting of at least a total of [***] weeks or [***] hours per year (excluding vacations and holidays).  For purposes of clarity, no one person shall be permitted to account for more than one FTE.

 

1.46.                     “FTE Rate” means $[***] per FTE per year.

 

1.47.                     “Governmental Entity” means any court, tribunal, arbitrator, Regulatory Authority, agency, commission, department, ministry, official or other instrumentality of the United States or other country, or any supra-national organization, or any foreign or domestic, state, county, city or other political subdivision.

 

1.48.                     “Government Official” means (i) any Person employed by or acting on behalf of a Governmental Entity, (ii) any political party, party official or candidate, (iii) any Person who holds or performs the duties of an appointment, office or position created by custom or convention, or (iv) any Person who holds himself out to be the authorized intermediary of any of the foregoing.

 

1.49.                     “IND” means (i) an investigational New Drug Application (as defined in the FFDCA and the regulations promulgated thereunder) or any successor application or procedure required to be filed with the FDA for authorization to commence clinical studies; (ii) its equivalent in other countries or regulatory jurisdictions before beginning clinical testing of a therapeutic product in humans in such country or region; and (iii) all supplements and amendments that may be filed with respect to the foregoing.

 

1.50.                     “Indemnification Claim Notice” has the meaning set out in Section 10.3.1.

 

7

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

1.51.                     “Indemnified Party” has the meaning set out in Section 9.3.1.

 

1.52.                     “Indication” means [***] Regulatory Approval (e.g., [***] such as (i) [***]; or (ii) [***], is not deemed to be a new indication for the purposes of this Agreement.

 

1.53.                     “Information” means all technical, scientific and other know-how and inventions, discoveries, improvements, information, trade secrets, business methods, knowledge, technology, means, methods, techniques, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, customer lists, cell lines, data, results and other material, including: biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing and quality control data and tangible or intangible information, including study designs and protocols, assays and biological methodology, in each case (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter developed.

 

1.54.                     “Infringement” has the meaning set out in Section 6.3.1.

 

1.55.                     “Initiation” means, with respect to a clinical study, the first dosing of the first human subject in such clinical study.

 

1.56.                     “In-License Agreements” means the licenses and other agreements entered into prior to the Effective Date by and between MedImmune or any of its Affiliates, on the one hand, and one (1) or more Third Parties on the other hand, that are necessary for, or were used in the Exploitation of the Licensed Compound and Licensed Product, and are listed on Schedule 1.56 (including without limitation, [***]).

 

1.57.                     “Intellectual Property” means any or all of the following and all rights in, arising out of, or associated therewith: (i) Patents; (ii) Information; (iii) all works of authorship, copyrights, copyrights registrations and applications therefor, and all other rights corresponding thereto throughout the world; (iv) all industrial designs and any registrations and applications therefor throughout the world; (v) all trade names, logos, common law trademarks and service marks, trademark and service mark registrations and applications therefor throughout the world and all goodwill associated therewith; (vi) all databases and data collections and all rights therein throughout the world; (vii) all moral and economic rights of authors and inventors, however denominated, throughout the world; (viii) all web addresses, sites and domain names and numbers; and (ix) any similar or equivalent rights to any of the foregoing anywhere in the world.

 

1.58.                     “Inventory” means the Licensed Compound and Licensed Product in its physical form as manufactured and currently stored by MedImmune, including without limitation, all non-cGMP drug substance, all cGMP drug substance, all finished drug

 

8

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

product (including without limitation, placebo product), all process intermediates (including without limitation, the reference standards and cells lines), GMCSFRa surrogate antibodies (i.e., Licensed Compound that is not Mavriliumumab) and corresponding cell lines expressing such antibodies, analytical reagents, development cell banks, master and working cell banks, and cell lines to the extent related to the Licensed Compound or Licensed Product, the details and amounts of which is set out in Schedule 3.1.

 

1.59.                     “Invoiced Sales” has the meaning set out in the definition of “Net Sales.”

 

1.60.                     “Issuing Party” has the meaning set out in Section 7.4.2.

 

1.61.                     “Knowledge” means the actual knowledge after performing a reasonably diligent investigation.

 

1.62.                     “Liability” means any and all debts, liabilities and obligations, whether known or unknown, asserted or unasserted, determinable or otherwise, accrued or fixed, absolute or contingent, liquidated or unliquidated, incurred or consequential, or matured or unmatured, including, without limitation, those arising under any Applicable Law, Litigation, order, or contract.

 

1.63.                     “Licensee Intellectual Property” means (i) all Intellectual Property, including any inventions, discoveries, Information, developments or modifications, whether or not patentable, that (a) are [***] related to the Licensed Compound or a Licensed Product for the Exploitation thereof [***], and (b) that are necessary to Develop, Manufacture, or Commercialize any Licensed Product, and (c) that are actually used during the Term by Licensee or its Affiliates in connection therewith, and (ii) all Regulatory Documentation (including any Regulatory Approvals) then owned or Controlled and/or created by Licensee or any of its Affiliates or its or their Sublicensees for the Exploitation of the Licensed Compound and Licensed Product(s) after the Effective Date.

 

1.64.                     “Licensee Representatives” has the meaning set out in Section 8.6.1.

 

1.65.                     “Licensed Compound” means (i) Mavrilimumab, a human monoclonal antibody targeting Granulocyte-Macrophage Colony Stimulating Factor Receptor Alpha (GMCSFRa) also known at MedImmune as CAM3001, and (ii) any other GMCSFRa antagonist Covered by one or more claims within the Licensed Patents.

 

1.66.                     “Licensed Formulation Patents” means any Patent claiming priority to U.S. patent application serial no. [***] related to the Licensed Compound [***].  For clarity, Licensed Formulation Patents are included in Non-Exclusive Licensed Patents, unless Licensee exercises the Option in Section 2.1(iii), in which case Licensed Formulation Patents are included in the Exclusive Licensed Patents.

 

9

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

1.67.                     “Licensed Know How” means the Exclusive Licensed Know How and the Non-Exclusive Licensed Know How.

 

1.68.                     “Licensed Patents” means the Exclusive Licensed Patents and the Non-Exclusive Licensed Patents.

 

1.69.                     “Licensed Product” means any product that is comprised of or contains the Licensed Compound.

 

1.70.                     “Licensed Product Agreement” means, with respect to a Licensed Product, any agreement entered into by and between Licensee or any of its Affiliates or its or their Sublicensees, on the one hand and one (1) or more Third Parties, on the other hand, that is necessary or reasonably useful for the Exploitation of such Licensed Product in the Field in the Territory, including (i) any agreement pursuant to which Licensee, its Affiliates or its or their Sublicensees receives any license or other rights to Exploit such Licensed Product, (ii) supply agreements pursuant to which Licensee, its Affiliates or its or their Sublicensees obtain or will obtain quantities of such Licensed Product, (iii) clinical trial agreements, (iv) contract research organization agreements, and (v) service agreements.

 

1.71                        “Licensed Technology” means the Exclusive Licensed Technology and Non-Exclusive Licensed Technology.

 

1.71.                     “Licensee” has the meaning set out in the preamble hereto.

 

1.72.                     “Licensee Representatives” has the meaning set out in Section 8.6.1.

 

1.73.                     “Litigation” means any suit, action, arbitration, cause of action, claim, complaint, criminal prosecution, investigation, inquiry, demand letter, judicial, arbitration or other administrative proceeding, whether at law or at equity, before or by any Court, Governmental Entity, arbitrator or other tribunal.

 

1.74.                     “Losses” has the meaning set out in Section 9.1.

 

1.75.                     “Manufacture” and “Manufacturing” means all activities related to the production, manufacture, processing, filling, finishing, packaging, labeling, shipping and holding of a product or any intermediate thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial manufacture and analytic development, product characterization, stability testing, quality assurance and quality control.

 

1.76.                     “Material Anti-Corruption Law Violation” means a violation of an Anti-Corruption Law relating to the subject matter of this Agreement that would, if it were

 

10

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

publicly known, in the reasonable view of MedImmune, have a material adverse effect on MedImmune or on the reputation of MedImmune because of its relationship with Licensee.

 

1.77.                     “MedImmune” has the meaning set out in the preamble hereto.

 

1.70                        “MedImmune Regulatory Documentation” means Regulatory Documentation Controlled by MedImmune or any of its Affiliates as of the Effective Date relating to, but not exclusively relating to, the Licensed Compound or Licensed Product in the Field in the Territory.

 

1.71                        “Net Sales” means, with respect to a Licensed Product for any period, the gross amounts invoiced by the Licensee or its Affiliates to Third Parties or Sublicensees for sales of the Licensed Product in the Territory (the “Invoiced Sales”), less the following deductions:

 

(i)                                     trade, quantity, governmental or cash discounts, credits, adjustments or allowances, including those granted on account of price adjustments, billing errors, sales returns, rejected goods or damaged goods or goods otherwise not in saleable condition;

 

(ii)                                  rebates and chargebacks allowed, given or accrued (including cash, Medicare, Medicaid, governmental and managed care rebates, hospital or other buying group chargebacks, and governmental taxes in the nature of a rebate based on usage levels or sales of the Licensed Product);

 

(iii)                               credits or allowances given or made for rejection, recall, return or wastage replacement of the Licensed Product;

 

(iv)                              taxes, duties or other governmental charges levied on or measured by the billing amount for Licensed Product (not offset or refunded, except in the case of value added taxes) assessed on the sale of the Licensed Product;

 

(v)                                 any other similar and customary deductions that are consistent with U.S. GAAP; and

 

(vi)                              charges or allowances for transportation costs, customs, distribution expenses, special packaging and related insurance charges, freight and insurance charges, taken in accordance with Purchaser’s standard practices, which charges or allowance will in no event exceed [***] of the amount arrived at after application of items (i) to (v) above.

 

For the avoidance of doubt, (a) in the case of any sale or other disposal of a Licensed Product between or among Licensee and its Affiliates for resale, invoiced sales and Net

 

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Sales shall be calculated only on the amount invoiced on the first arm’s length sale thereafter to a Third Party; and (b) Net Sales shall not be imputed to transfers of Licensed Product (I) without consideration or for nominal consideration for use in any clinical trial or any other human studies reasonably necessary to comply with any Applicable Law or regulation or any request by a Regulatory Authority, (II) for any bona fide charitable, compassionate use or indigent patient or other similar program purpose where Licensed Products are sold at or below cost of goods sold, or (III) in commercially reasonable quantities as samples for promotional purposes.

 

In the event that a Licensed Product is sold in any country in the form of a Combination Product, Net Sales of such Combination Product shall be adjusted by multiplying actual Net Sales of such Combination Product in such country calculated pursuant to the foregoing definition of “Net Sales” by the fraction A/(A+B), where A is the average invoice price in such country of any Licensed Product that contains the same Licensed Compound(s) as such Combination Product as its sole active ingredient(s), if sold separately in such country and B is the average invoice price in such country of each product that contains active ingredient(s) other than the Licensed Compound(s) contained in such Combination Product as its sole active ingredient(s), if sold separately in such country; provided that the invoice price in a country for each Licensed Product that contains only the Licensed Compound(s) and each product that contains solely active ingredient(s) other than the Licensed Compound(s) included in the Combination Product shall be for a quantity comparable to that used in such Combination Product and of substantially the same class, purity and potency.  If either such Licensed Product that contains the Licensed Compound(s) as its sole active ingredient or a product that contains an active ingredient (other than the Licensed Product) in the Combination Product as its sole active ingredient(s) is not sold separately in a particular country, the Parties shall negotiate in good faith a reasonable adjustment to Net Sales in such country that takes into account the medical contribution to the Combination Product of and all other factors reasonably relevant to the relative value of, the Licensed Compound(s), on the one hand and all of the other active ingredient(s), collectively, on the other hand.

 

Subject to the above, Net Sales shall be calculated in accordance with the standard internal policies and procedures of Licensee, its Affiliates or its or their Sublicensees, which must be in accordance with U.S. GAAP.

 

1.72.                     “Non-Breaching Party” has the meaning set out in Section 10.2.2.

 

1.72.                     “Non-Exclusive In-License Agreement” means In-License Agreements that are non-exclusively sublicensed to Licensee under Section 2.1(ii) and are listed on Schedule 1.56.

 

1.73.                     “Non-Exclusive Licensed Know How” means all Information Controlled by MedImmune or any of its Affiliates as of the Effective Date that is necessary for, or was

 

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used in, the Exploitation of the Licensed Compound or Licensed Products.  For clarity, Non-Exclusive Licensed Know How excludes Excluded Technology.

 

1.74.                     “Non-Exclusive Licensed Patents” means all Patents Controlled by MedImmune as of the Effective Date that are necessary for, or were used in, the Exploitation of the Licensed Compound or Licensed Products, including without limitation, (i) Patents owned by MedImmune or its Affiliates set forth on Schedule 1.74, and (ii) any Patents  sublicensed to Licensee under the Non-Exclusive In-License Agreements).  For clarity, Non-Exclusive Licensed Patents excludes Exclusive Licensed Patents.

 

1.75.                     “Non-Exclusive Licensed Technology” means the Non-Exclusive Licensed Patents and Non-Exclusive Licensed Know How.

 

1.76.                     “Option” shall have the meaning set out in Section 2.1(iv).

 

1.77.                     “Notice Period” shall have the meaning set out in Section 10.2.2.

 

1.78.                     “Party” and “Parties” have the meaning set out in the preamble hereto.

 

1.79.                     “Patents” means: (i) all national, regional and international patents and patent applications, including provisional patent applications; (ii) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority to either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals and continued prosecution applications; (iii) any and all patents that have issued or in the future issue from the foregoing patent applications ((i) and (ii)), including utility models, petty patents, innovation patents and design patents and certificates of invention; (iv) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((i), (ii) and (iii)); and (v) any similar rights, including so-called pipeline protection or any importation, revalidation, confirmation or introduction patent or registration patent or patent of additions to any of such foregoing patent applications and patents.

 

1.80.                     “Payment” has the meaning set out in Section 5.5.1.

 

1.81.                     “Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

1.82.                     “Product Trademarks” means the Trademark(s) used or to be used by Licensee or its Affiliates or its or their Sublicensees for the Commercialization of Licensed Products in the Territory (excluding, in any event, any corporate names and any Trademarks that consist of or include any corporate name or corporate logo of the Parties or their Affiliates or its or their (sub)licensees (or Sublicensees)).

 

1.70                        “Product Regulatory Documentation” means Regulatory Documentation Controlled by MedImmune or any of its Affiliates as of the Effective Date relating [***] to the Licensed Compound or Licensed Product in the Field in the Territory.

 

1.83.                     “Prosecuting Party” has the meaning set out in Section 6.2.2.

 

1.84.                     “Purchased Assets” has the meaning set out in Section 3.1.

 

1.85.                     “Release” has the meaning set out in Section 7.4.2.

 

1.86.                     “Regulatory Approval” means, with respect to a country in the Territory, any and all approvals (including Biologics License Applications), licenses, registrations or authorizations of any Regulatory Authority necessary to commercially distribute, sell or market a Licensed Product in such country, including, where applicable, (i) pricing or reimbursement approval in such country, (ii) pre- and post-approval marketing authorizations (including any prerequisite Manufacturing approval or authorization related thereto) and (iii) labeling approval.

 

1.87.                     “Regulatory Authority” means any applicable supra-national, federal, national, regional, state, provincial or local regulatory agencies, departments, bureaus, commissions, councils or other government entities regulating or otherwise exercising authority with respect to the Exploitation of Licensed Compound or Licensed Products in the Territory, including the FDA in the United States and the EMA in the European Union.

 

1.88.                     “Regulatory Documentation” means:  all (i) applications (including all INDs and Biologics License Applications), registrations, licenses, authorizations and approvals (including Regulatory Approvals); (ii) correspondence and reports submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority) and all supporting documents with respect thereto, including all adverse event files and complaint files; and (iii) clinical and other data contained or relied upon in any of the foregoing; in each case ((i), (ii) and (iii)) relating to the Licensed Compound or a Licensed Product.

 

1.89.                     “Regulatory Exclusivity Period” means, with respect to each Licensed Product in any country in the Territory, any period of data, market or other regulatory exclusivity (other than Patent exclusivity) granted or afforded by Applicable Law or by a Regulatory Authority in such country that confers exclusive marketing rights with respect to

 

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such Licensed Product in such country and prevents another party from using or otherwise relying on any Regulatory Approval.

 

1.90.                     “Retained Rights” mean (i) with respect to the Licensed Compound and Licensed Products in the Field in the Territory, the rights of MedImmune, its Affiliates and its and their licensors, (sub)licensees and contractors to perform its and their obligations under this Agreement; (ii) with respect to the Excluded Technology the rights of MedImmune, its Affiliates and its and their licensors, (sub)licensees and contractors, to develop, obtain and maintain regulatory approvals for and to Exploit any compound or product, other than the Licensed Compound or Licensed Products, in any field (including the Field) anywhere in the Territory.

 

1.91.                     “Reviewing Party” has the meaning set out in Section 7.4.2.

 

1.92.                     “Royalty Term” means, with respect to each Licensed Product and each country in the Territory, the period beginning on the date of the First Commercial Sale of such Licensed Product in such country and ending on the latest to occur of: (i) the expiration date of the last to expire Valid Claim of a Patent included in the Exclusive Licensed Patents that Covers the Licensee’s (or its Affiliate’s or Subliensee’s) manufacture, importation or sale of such Licensed Product in such country, (ii) the expiration of the Regulatory Exclusivity Period for such Licensed Product in such country, or (iii) the 10th anniversary of the First Commercial Sale of the Licensed Product in such country.

 

1.93.                     “Senior Officer” means, with respect to MedImmune, its Executive Vice President responsible for this Agreement, its Chief Executive Officer or President.

 

1.94.                     “Sublicensee” means a Person, other than an Affiliate, that is granted a sublicense by Licensee or its Affiliate under the grants in Section 2.1, as provided in Section 3.2.

 

1.95.                     “Tax” or “Taxes” means all income, excise, gross receipts, ad valorem, sales, use, employment, environmental, franchise, profits, gains, property, transfer, value added, payroll, escheat or abandoned property, intangibles or other taxes, fees, stamp taxes, duties, charges, levies or assessments of any kind whatsoever (whether payable directly or by withholding), together with any interest and any penalties, additions to tax or additional amounts imposed by any Governmental Entity with respect thereto, whether as a primary obligor, as a result of being a transferee, successor or a member of an affiliated, consolidated, unitary, combined or other group, by contract, pursuant to Applicable Law or otherwise.

 

1.96.                     “Term” has the meaning set out in Section 10.1.

 

1.97.                     “Termination Notice” has the meaning set out in Section 10.2.2.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

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1.98.                     “Territory” means worldwide.

 

1.99.                     “Third Party” means any Person other than MedImmune, Licensee and their respective Affiliates.

 

1.100.              “Third Party Claims” has the meaning set out in Section 9.1.

 

1.101.              “Third Party Infringement Claim” has the meaning set out in Section 6.4.

 

1.102.              “Third Party Patent Right” has the meaning set out in Section 6.6.

 

1.103.              “Trademark” means any word, name, symbol, color, shape, designation or any combination thereof, including any trademark, service mark, trade name, brand name, sub-brand name, trade dress, product configuration rights, program name, delivery form name, certification mark, collective mark, logo, tagline, slogan, design or business symbol, that functions as an identifier of source, origin or quality, whether or not registered, and all statutory and common law rights therein and all registrations and applications therefor, together with all goodwill associated with, or symbolized by, any of the foregoing.

 

1.104.              “Transition Activities” means the activities to be conducted by MedImmune and applicable timeframes, to transfer the Licensed Technology and the Licensed Compound to Licensee as set out in Schedule 1.104.

 

1.105.              “Transition Services Agreement” means a supplemental agreement to this Agreement that may be executed after the Effective Date, if required by the Parties, to more fully set out the Transition Activities.

 

1.106.              “United States” or “U.S.” means the United States of America and its territories and possessions (including the District of Columbia and Puerto Rico).

 

1.107.              “U.S. GAAP” means United States Generally Accepted Accounting Principles.

 

1.108.              “Valid Claim” means (i) a claim of any issued and unexpired Patent whose validity, enforceability or patentability has not been affected by (a) irretrievable or unrevivable lapse, abandonment, revocation, dedication to the public or disclaimer or (b) a holding, finding or decision of invalidity, unenforceability or non-patentability by a court, governmental agency, national or regional patent office or other appropriate body that has competent jurisdiction, such holding, finding or decision being final and unappealable or unappealed within the time allowed for appeal or (ii) a claim of a pending Patent application that was filed and is being prosecuted in good faith and has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application; provided, however, that Valid Claim will exclude any such pending claim in any such Patent

 

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application that has not been granted within [***] years after the earliest filing date from which such Patent application takes priority.

 

1.109.              “VAT” has the meaning set out in Section 5.6.2.

 

1.110.              “Voting Stock” has the meaning set out in the definition of “Change of Control.”

 

ARTICLE 2

GRANT OF RIGHTS

 

2.1.                            Grants to Licensee. Medimmune hereby grants to Licensee:

 

(i)                                     an exclusive (including with regard to MedImmune and its Affiliates) license (or sublicense), with the right to grant sublicenses through multiple tiers in accordance with Section 2.2, to the Exclusive Licensed Technology to Exploit the Licensed Compound and Licensed Products in the Field in the Territory;

 

(ii)                                  a non-exclusive license, with the right to grant sublicenses through multiple tiers in accordance with Section 2.2, to the Non-Exclusive Licensed Technology to Exploit the Licensed Compound and Licensed Products in the Field in the Territory and for no other purpose; and

 

(iii)                               a non-exclusive license and right of reference, with the right to grant sublicenses through multiple tiers and further rights of reference in accordance with Section 2.2, to the MedImmune Regulatory Documentation that MedImmune or its Affiliates Control as of the Effective Date as necessary for purposes of Exploiting the Licensed Compound and Licensed Products in the Field in the Territory; and

 

(iv)                              an exclusive option during the Term of this Agreement to add to the Exclusive Licensed Patents the Licensed Formulation Patents (the “Option”).  Licensee may exercise the Option, without any additional consideration, up to [***] upon providing written notice to MedImmune.  Upon MedImmune’s receipt of such written notice, MedImmune and Licensee shall cooperate with each other to take steps to file, if it has not already been done, a portfolio of Licensed Formulation Patents from the Non-Exclusive Licensed Patents that claim priority to U.S. patent application serial no. [***].  Such steps may include, for example, filing separate national and regional phase applications and/or divisional applications claiming priority directly or indirectly to U.S. patent application serial no. [***] relating to the Licensed Compound [***].  MedImmune shall consider in good faith the requests and suggestions of Licensee with respect to filing the portfolio of Licensed Formulation Patents; provided, however, that Licensee shall have the right to select in which jurisdictions in the Territory the Licensed Formulation Patents shall

 

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be filed.  Upon Licensee’s exercise of the Option, (a) all Licensed Formulation Patents shall be deemed Exclusive Licensed Patents, and (b) MedImmune and its Affiliates shall not prepare, file or prosecute patent claims that specifically relate to, or otherwise recite, the Licensed Compound in any Patents that claim priority directly or indirectly to U.S. patent application serial no. [***].

 

2.2.                      Sublicenses. Licensee is permitted to grant sublicenses under the licenses and rights of reference granted in Section 2.1, provided that any such sublicenses shall be (i) subject to MedImmune’s prior written consent and the prior written consent of any applicable Third Party licensor as required under any In-License Agreement, and (ii) consistent with, and expressly made subject to, the terms and conditions of this Agreement and the In-License Agreements.  Licensee shall cause each Sublicensee to comply with the applicable terms and conditions of this Agreement and the In-License Agreements, as if such Sublicensee were a Party to this Agreement.  Licensee hereby (x) guarantees the performance of its Affiliates and permitted Sublicensees that are sublicensed as permitted herein and the grant of any such sublicense shall not relieve Licensee of its obligations under this Agreement, except to the extent they are satisfactorily performed by such Sublicensee and (y) waives any requirement that MedImmune exhaust any right, power or remedy, or proceed against any Sublicensee for any obligation or performance under this Agreement prior to proceeding directly against Licensee.  Licensee will share such sublicense agreement with MedImmune within [***] days after its execution; provided that the financial terms of any such sublicense agreement to the extent not pertinent to an understanding of a Party’s obligations or benefits under this Agreement may be redacted.

 

2.3.                            Retention of Rights; Limitations Applicable to License Grants.

 

2.3.1.                  Retained Rights of MedImmune.  Notwithstanding anything to the contrary in this Agreement and without limitation of any rights granted or reserved to MedImmune pursuant to any other term or condition of this Agreement, MedImmune hereby expressly retains, on behalf of itself and its Affiliates (and on behalf of its licensors, (sub)licensees and contractors) all right, title and interest in and to the Excluded Technology.

 

2.3.2.                  In-License Agreements.  The licenses granted by MedImmune in Section 2.1 include sublicenses under the applicable license rights granted to MedImmune by Third Parties under the In-License Agreements, subject to this Section 2.3.2.  Any sublicense with respect to Information or other Intellectual Property of a Third Party hereunder and any right of Licensee (if any) to grant a further sublicense thereunder, shall be subject and subordinate to the terms and conditions of the applicable In-License Agreement, under which such sublicense is granted and shall be effective solely to the extent permitted under the terms of such In-License Agreement.  Without limitation of the foregoing, in the event and to the extent that any In-License Agreement requires that particular terms or conditions of such In-License Agreement be contained or incorporated in any agreement

 

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granting a sublicense thereunder, such terms and conditions are hereby deemed to be incorporated herein by reference and made applicable to the sublicense granted herein under such In-License Agreement.

 

2.3.3.                  No Other Rights Granted by MedImmune.  Except as expressly provided herein and without limiting the foregoing, MedImmune grants no other right or license.

 

2.3.4.                  No Other Rights Granted by Licensee.  Except as expressly provided herein, Licensee grants no other right or license to any other Patent, Trademark or other Intellectual Property not otherwise expressly granted herein.

 

2.4.                            Licensed Patent Rights Transfer.  Promptly (and in no event later than [***] days) following the Effective Date), MedImmune or its designated attorneys, shall provide Licensee, or Licensee’s designated attorneys, with its or its attorneys case files for the Licensed Patents . MedImmune shall promptly, upon receipt, forward to Licensee, or Licensee’s designated attorneys, any office actions, communications, and correspondence related to the Licensed Patents received by MedImmune after the Effective Date.  Additionally, MedImmune shall, from time to time, take such actions as are reasonably requested by Licensee to perfect the license of MedImmune’s right, title and interest in the Licensed Patents to Licensee.

 

2.5.                            Maintenance of In-License Agreements.  MedImmune agrees that it will not, and will ensure that its Affiliates do not, without Licensee’s prior written consent (i) sell, assign, transfer, convey, deliver or otherwise divest its interests in any of the In-License Agreements to a Third Party, (ii) mortgage or otherwise encumber its interests in any of the In-License Agreements, in a manner that significantly adversely affects, or would reasonably be expected to significantly adversely affect, Licensee’s rights or obligations under this Agreement, (iii) amend any of the In-License Agreements in a manner that significantly adversely affects the rights granted to Licensee under this Agreement, or (iv) undertake any action that would constitute a material breach of, and allow the Third Party that is a party to any In-License Agreements to terminate, any In-License Agreements.

 

2.6.                            Completeness of Technology.  MedImmune agrees that, if at any time after the Effective Date, MedImmune becomes aware as a result of written notice from Licensee and determines that any Intellectual Property, Inventory or Regulatory Documentation that was owned or Controlled by MedImmune as of the Effective Date and used by MedImmune in the Exploitation of the Licensed Compound or Licensed Products as it existed as of the Effective Date was not included in the Licensed Technology or MedImmune Regulatory Documentation, as applicable, was not included in the license grant to Licensee in Section 2.1 and is deemed necessary for, or was used in, the Exploitation of the Licensed Patents, then MedImmune shall promptly notify Licensee of such determination.  MedImmune shall promptly take such actions as may be reasonably necessary to license, provide a right of

 

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reference to or otherwise transfer such Intellectual Property, Inventory or Regulatory Documentation to Licensee as necessary, in a manner consistent with Sections 2.1 and 3.1, as applicable.

 

2.7.                            Exclusivity.  MedImmune shall not, and shall not permit any of its Affiliates to, distribute, market, promote, offer for sale or sell the Licensed Compound or Licensed Products directly or indirectly (i) to any Person for commercial use in the Territory.  If MedImmune or any of its Affiliates receives or becomes aware of the receipt by a (sub)licensee or distributor of any orders for any Licensed Compound or Licensed Product for commercial use in the Territory, such Person shall refer such orders to Licensee.  MedImmune shall cause its Affiliates to notify Licensee of any receipt of any orders for any Licensed Compound or Licensed Product for commercial use in the Territory.

 

ARTICLE 3

PURCHASE AND SALE OF ASSETS

 

3.1.                            Purchase and Sale of Assets.  Upon the terms and subject to the conditions set forth in this Agreement, MedImmune hereby sells, conveys, assigns, transfers and delivers to, and shall cause its Affiliates to sell, convey, assign, transfer and deliver to, Licensee, and Licensee hereby purchases and acquires from each of MedImmune or its Affiliates, as the case may be, all of MedImmune’s and its Affiliates’ right, title and interest in and to the assets described or set forth on Schedule 3.1 attached hereto, including without limitation the Inventory and Product Regulatory Documentation (collectively, the “Purchased Assets”).

 

3.2.                            Excluded Assets.  Notwithstanding the provisions of Section 3.1, but subject to Section 2.6, no right, title or interest is being sold, assigned, transferred, conveyed or delivered to Licensee in or to (i) any of the property and assets of MedImmune that are not listed on Schedule 3.1 (or licensed pursuant to Article 2 above), or (ii) any rights or claims of MedImmune under this Agreement (collectively, the “Excluded Assets”).

 

3.3.                            Assumed Liabilities.  Subject to the terms and conditions of this Agreement, on and after the Effective Date, Licensee shall assume and agree to pay, perform and discharge all Liabilities and obligations resulting from the ownership and Exploitation of any Purchased Assets or Licensed Product by Licensee to the extent that such Liability arises from any event, condition or circumstance occurring after the Effective Date and not resulting from (i) any breach by MedImmune (or its Affiliates) of any of its obligations under this Agreement, or (ii) MedImmune’s (or its Affiliates) gross negligence or willful misconduct (collectively, the “Assumed Liabilities”).

 

3.4.                            Excluded Liabilities.  MedImmune shall retain, and shall be responsible for paying, performing and discharging when due, and Licensee shall not assume or have any

 

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responsibility for paying, performing or discharging, any Liabilities of MedImmune and its Affiliates other than the Assumed Liabilities (collectively, the “Excluded Liabilities”).  Without limiting the foregoing, neither Licensee nor its Affiliates shall be obligated to assume, and neither of them does assume, and each of them hereby disclaims responsibility for, any of the following Liabilities of MedImmune and its Affiliates:

 

(i)                                     any Liability attributable to any tangible asset, property or right that is not included in the Purchased Assets;

 

(ii)                                  any Liability attributable to the research, development or other activity conducted by MedImmune or any Affiliate related to the Product on or prior to the Effective Date; and

 

(iii)                               any and all Taxes imposed on the Purchased Assets or that otherwise arise with respect to the use of the Purchased Assets, in each case, for any taxable period (or portion thereof) ending on or prior to the Effective Date, and all Taxes of MedImmune or any of its Affiliates that are or may become payable with respect to all taxable periods, including any Liability for such Taxes that arise as a result of the transactions contemplated by this Agreement.

 

ARTICLE 4
 DEVELOPMENT, REGULATORY AND COMMERCIALIZATION ACTIVITIES; TECHNOLOGY TRANSFER

 

4.1.                            Development.

 

4.1.1.                  Diligence.  After the Effective Date, subject to the Retained Rights, as between the Parties, Licensee shall be solely responsible for all aspects of the Development of the Licensed Compound and Licensed Products in the Field in the Territory at Licensee’s own cost and expense, including with respect to any clinical studies or other tests or studies necessary or useful to support the use of a Licensed Product.  Without limitation of Section 4.1.2, Licensee shall use Commercially Reasonable Efforts to Develop, and obtain and maintain Regulatory Approvals for, Licensed Products for use in the Field.

 

4.1.2.                  Development Plan.

 

(i)                                     Licensee will share its initial Development Plan and subsequent Development Plans with Medimmune on an annual basis.  Licensee will deliver to MedImmune each annual Development Plan not later than [***] days after the end of the Calendar Year.

 

(ii)                                  Without limitation of Section 4.1.1, Licensee shall perform the Development activities under the current Development Plan and shall use Commercially

 

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Reasonable Efforts to do so in accordance with the timelines set out in the then-current Development Plan.  Licensee shall perform or cause to be performed its Development activities hereunder in good scientific manner and in compliance with Applicable Laws.

 

4.1.3.                  Development Costs.  Licensee shall be responsible for all of its costs and expenses in connection with the Development of, and obtaining and maintaining Regulatory Approvals for, the Licensed Products in the Field in the Territory.

 

4.1.4.                  Development Records.  Licensee shall, and shall cause its Affiliates and its and their Sublicensees to, maintain, in good scientific manner, complete and accurate books and records pertaining to Development of Licensed Products hereunder, in sufficient detail to verify compliance with its obligations under this Agreement.  Such books and records shall (i) be appropriate for patent and regulatory purposes, (ii) be in compliance with Applicable Law, (iii) properly reflect the work done and results achieved in the performance of its Development activities hereunder, (iv) record only such activities and not include or be commingled with records of activities outside the scope of this Agreement, and (v) be retained by Licensee for at least [***] years after the expiration or termination of this Agreement in its entirety or for such longer period as may be required by Applicable Law.  Such books and records shall be subject to MedImmune’s audit rights set forth in Section 5.9.

 

4.1.5.                  Development Reports.  Without limiting Section 4.1.4, at the end of each Calendar Year during which Licensee is conducting Development activities hereunder, Licensee shall provide MedImmune with a summary written report of such Development activities it has performed, or caused to be performed, since the preceding report.  Each such summary report shall contain sufficient detail to enable MedImmune to reasonably assess Licensee’s compliance with its obligations set out in Sections 4.1.1 and 4.1.2, including:  (i) Licensee’s, or its Affiliates’ or its or their Sublicensees’ activities with respect to achieving Regulatory Approvals of Licensed Products and (ii) summaries of clinical study results and other Development activities.

 

4.2.                            Regulatory Activities.

 

4.2.1.                  Regulatory Approvals.  Subject to the Retained Rights, Licensee shall, at its own cost and expense, have the sole right to prepare, obtain and maintain Biologics License Applications (including the setting of the overall regulatory strategy therefor), other Regulatory Approvals and other submissions (including INDs) and to conduct communications with the Regulatory Authorities, for Licensed Products in the Field in the Territory in its name.

 

4.2.2.                  Global Safety Database.  Licensee shall establish, hold and maintain (at Licensee’s sole cost and expense) the global safety database for Licensed Products.  MedImmune shall transfer to Licensee the global safety database for the Licensed

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Compound and Licensed Products in existence as of the Effective Date and all Information in the possession and Control of MedImmune as necessary for Licensee to comply with its pharmacovigilance responsibilities in the Territory, including, as applicable, any adverse drug experiences (including those events or experiences that are required to be reported to the FDA under 21 C.F.R. sections 312.32 or 314.80 or to foreign Regulatory Authorities under corresponding Applicable Law outside the United States), from pre-clinical or clinical laboratory, animal toxicology and pharmacology studies, clinical studies and commercial experiences with a Licensed Product, in each case, in the form reasonably requested by Licensee.

 

4.3.                            Commercialization.

 

4.3.1.                  Diligence.  As between the Parties, Licensee shall be solely responsible for Commercialization of the Licensed Products in the Field throughout the Territory at Licensee’s own cost and expense.  Without limitation of Section 4.3.2, Licensee shall use Commercially Reasonable Efforts to Commercialize the Licensed Products.

 

4.3.2.                  Commercialization Plan.

 

(i)                                     The initial Commercialization of the Licensed Products in the Field in the Territory shall be conducted pursuant to a comprehensive, [***] plan (the “Commercialization Plan”).  At least [***] days prior to the anticipated date of the First Commercial Sale of any Licensed Product in the first country in the Territory, Licensee shall send to MedImmune the Commercialization Plan.  The Commercialization Plan shall include, with respect to the Territory:  (a) the general strategies for the promoting, marketing and distributing the Licensed Products; (b) pre-launch Commercialization activities and the expected date of launch; (c) the nature of promotional activities anticipated; (d) non-binding summary-level market and sales forecasts for the Licensed Products; (e) a non-binding projection of Net Sales for Licensed Products; (f) plans regarding distribution and supply chain management; and (g) reimbursement and pricing information.

 

(ii)                                  Without limitation of Section 4.3.1, Licensee shall perform the Commercialization activities under the applicable Commercialization Plan and shall use Commercially Reasonable Efforts to do so in accordance with the timelines and so as to achieve the objectives set out in the Commercialization Plan.

 

4.3.3.                  Commercialization Costs; Booking of Sales; Distribution.  Licensee shall be responsible for all of its costs and expenses in connection with the Commercialization of the Licensed Products in the Field in the Territory.  Licensee shall invoice and book sales, establish all terms of sale (including pricing and discounts) and warehouse and distribute the Licensed Products in the Field in the Territory and perform or cause to be performed all related services.  Licensee shall handle all returns, recalls or

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

withdrawals, order processing, invoicing, collection, distribution and inventory management with respect to the Licensed Products in the Territory.

 

4.3.4.                  Commercialization Records.  Licensee shall maintain complete and accurate books and records pertaining to Commercialization of Licensed Products hereunder, in sufficient detail to verify compliance with its obligations under this Agreement and which shall be in compliance with Applicable Law and properly reflect all work done and results achieved in the performance of its Commercialization activities.  Such records shall be retained by Licensee for at least [***] years after the expiration or termination of this Agreement in its entirety or for such longer period as may be required by Applicable Law.  Such books and records shall be subject to MedImmune’s audit rights set forth in Section 5.9.

 

4.3.5.                  Commercialization Reports.  Without limiting Section 4.3.4, within [***] days following the end of each Calendar Year during which Licensee is conducting Commercialization activities hereunder, Licensee shall provide to MedImmune with written summaries reporting of such Commercialization activities it has performed, or caused to be performed, since the preceding report.  Each such report shall contain sufficient detail to enable MedImmune to assess Licensee’s compliance with its obligations set out in Sections 4.3.1 and 4.3.2, including in each case:  [***].

 

4.4.                            Statements and Compliance with Applicable Law.  Licensee shall, and shall cause its Affiliates to, comply with all Applicable Laws with respect to the Exploitation of Licensed Products. Without limitation to the foregoing, Licensee shall in all material respects, conform its practices and procedures relating to the Commercialization of the Licensed Products and educating the medical community in the Territory with respect to the Licensed Products to any applicable industry association regulations, policies and guidelines, as the same may be amended from time to time, and Applicable Law.

 

4.5.                            Manufacturing.  As between the Parties, Licensee shall have the sole responsibility for, at its expense, Manufacturing (or having Manufactured) and supplying the Licensed Compound and Licensed Products for its Development and Commercialization activities in the Territory.

 

4.6.                            Subcontracting.  Licensee may subcontract with a Third Party to perform any or all of its obligations hereunder (including by appointing one or more distributors); provided, that (i) no such permitted subcontracting shall relieve Licensee of obligations hereunder (except to the extent satisfactorily performed by such subcontractor) or any liability and Licensee shall be and remain fully responsible and liable therefor, and (ii) the agreement pursuant to which Licensee engages any Third Party subcontractor must (a) be consistent in all material respects with this Agreement, (b) contain terms obligating such subcontractor to consistent with this Agreement in order to comply with the confidentiality, intellectual property and all other relevant provisions of this Agreement, and (c) contain

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

terms obligating such subcontractor to permit MedImmune rights of inspection, access and audit substantially similar to those provided to MedImmune in this Agreement. Licensee hereby waives any requirement that MedImmune exhaust any right, power or remedy, or proceed against any subcontractor for any obligation or performance under this Agreement prior to proceeding directly against Licensee.

 

4.7.                            Technology Transfer.

 

4.7.1.                  To enable Licensee to exercise the rights granted under this Agreement, MedImmune will promptly deliver or otherwise provide to Licensee and Licensee Representatives, Licensed Know-How and the Purchased Assets within the possession or Control of MedImmune or any of its Affiliates.  Without limiting the generality of the foregoing, and without limiting the delivery and provision of Licensed Know-How, MedImmune will promptly deliver, make available or otherwise provide to Licensee and Licensee Representatives, Licensed Know-How and the Purchased Assets in accordance with the requirements and timelines set forth in the Transition Activities.  Additionally, on a commercially reasonable schedule and in a commercially reasonable format to be agreed upon by the parties, MedImmune will deliver to Licensee or Licensee Representatives, any and all assays, documents, files, diagrams, specifications, designs, schematics, reports, records, data, results, publications, materials, prototypes, test devices, models and simulations, or other written, graphic, biologic, or other tangible material in MedImmune’s or its Affiliates’ possession in any media, to the extent it discloses or embodies Licensed Know-How.  Licensee acknowledges that (i) any materials comprising Inventory transferred by MedImmune to Licensee under this Agreement are experimental in nature and may have unknown characteristics and therefore agrees to use prudence and reasonable care in the use, handling, storage, transportation and disposition and containment of any such materials, and (ii) if Licensee chooses to use such materials in any human application, including in the conduct of any clinical trial, it shall do so at its own risk.

 

4.7.2.                  To the extent reasonably requested by Licensee (and for clarity, in addition to the timelines set forth in Transition Activities), MedImmune shall provide reasonable consulting support to Licensee and Licensee Representatives in connection with its Exploitation of Products.  MedImmune agrees to use reasonable efforts to (i) make its employees, agents and consultants reasonably available to Licensee (or to Licensee’s authorized attorneys and Licensee Representatives) in order for Licensee to fully Exploit the Licensed Products, and (ii) provide contact information in MedImmune’s possession and control with respect to the listed inventors of the Licensed Patents, to the extent, in any case, reasonably necessary to enable Licensee (or to Licensee’s authorized attorneys and Licensee Representatives) to undertake preparation of U.S. and foreign applications claiming priority to Licensed Patents and prosecution and maintenance of such applications.  MedImmune shall only be obligated to complete one (1) technology transfer of all Licensed Know How related to the Manufacture of the Licensed Compound to Licensee or Licensee

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Representatives, provided that such technology transfer is complete, as mutually agreed by the Parties, in accordance with the Transition Services Agreement.

 

4.7.3.                  In addition to the above, MedImmune will provide support to Licensee, as requested by Licensee, to (i) extend the expiration of dating for any Inventory (including without limitation, Licensed Compound drug substance as well as placebo), (ii) assist (including through Third Party service providers) with filling any Licensed Compound drug substance (and placebo) that is part of the Inventory, (iii) provide on-going stability testing for any such Inventory until the expiration of such Inventory (as extended), (iv) store such Inventory as requested by Licensee to the extent necessary to provide such stability testing, (v) provide other services in order to release Licensed Product drug product that was filled by MedImmune or Third Party service providers, as set out more fully in the Transition Activities.

 

4.7.4.                  In order to enable the seamless transfer of technology to Licensee (and/or Licensee Representatives), MedImmune will promptly provide letters of authorization to its Third Party service providers (as requested by Licensee), who have participated in Developing or Manufacturing the Licensed Compound in order to clarify that as of the Effective Date, Licensee has in-licensed and otherwise acquired the rights to the Licensed Compound and Licensed Technology.

 

4.7.5.                  Without limiting the foregoing, each Party shall execute and deliver such other instruments and do and perform such other acts and things as reasonably necessary for effecting completely the consummation of the transactions contemplated by this Agreement.

 

4.8.                            Cost of MedImmune Support.  The Parties hereby agree that the Transition Activities shall be provided at MedImmune’s sole expense for up to [***] hours as set out in Schedule 1.104 and/or theTransition Services Agreement, and thereafter at Licensee’s sole expense (including MedImmune’s employee costs at the FTE Rate).

 

4.9.                            Disclosure of Excluded Technology.  MedImmune agrees that in the event Licensee is required to disclose Excluded Technology to a Regulatory Authority to obtain Regulatory Approval or otherwise by Applicable Law, it will disclose the required information:

 

(i)                                     to the Licensee Representatives who have (a) a bona fide need to know such Excluded Technology (for example, those who are directly involved with the preparation, filing and maintenance of any such Regulatory Approval covering the Manufacture and Commercialization of a Product); and (b) who have been fully informed of the highly sensitive nature of the information and the need to maintain its secrecy and avoid inappropriate use.  Licensee further agrees to implement procedures via the use of a firewall

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

or other appropriate means to limit distribution of the Excluded Technology to those Licensee Representatives as described above.

 

(ii)                                  via a secure dataroom or portal where such dataroom or portal shall be the exclusive source for such Excluded Technology.

 

ARTICLE 5
 PAYMENTS AND RECORDS

 

5.1.                            Upfront Payment. In partial consideration of the rights granted by MedImmune to Licensee hereunder, no later than [***] days following the date that Licensee receives and invoice from MedImmune following the Effective Date, Licensee shall pay MedImmune a nonrefundable and noncreditable upfront amount equal to Eight Million Dollars ($8,000,000.00).

 

5.2.                            Milestones

 

5.2.1.                  Development and Regulatory Milestones.  Licensee shall inform MedImmune within [***] Business Days after the occurrence of each of the milestone events listed below.  In partial consideration of the rights granted by MedImmune to Licensee hereunder, Licensee shall pay to MedImmune the following one-time payments within [***] days after receipt of an invoice for the achievement of each of the following milestone events which shall be nonrefundable, noncreditable and fully earned upon the achievement of the applicable milestone event:

 

(i)                                     [***];

 

(ii)                                  [***];

 

(iii)                               [***];

 

(iv)                              [***];

 

(v)                                 [***];

 

(vi)                              [***];

 

(vii)                           [***];

 

(viii)                        [***];

 

(ix)                              [***];

 

(x)                                 [***]; and

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

(xi)                              [***].

 

Each milestone payment in this Section 5.2.1 shall be payable [***].  If, at any time, with respect to a Licensed Product, the achievement of a milestone described in Section 5.2.1 has occurred with respect to which a payment is due hereunder and any of the preceding milestones in this Section 5.2.1 have not been due or been paid , then each such skipped milestone payment shall become due and payable [***], with respect to which payment is due.

 

5.2.2.                  Commercial Milestones.  In partial consideration of the rights granted by MedImmune to Licensee hereunder, Licensee shall pay to MedImmune the following payments, which shall be nonrefundable, noncreditable and fully earned upon the achievement of the applicable milestone event:

 

(i)                                     Licensee shall pay to MedImmune [***] in the event that the [***];

 

(ii)                                  Licensee shall pay to MedImmune [***] in the event that the [***];

 

(iii)                               Licensee shall pay to MedImmune [***] in the event that the [***];

 

(iv)                              Licensee shall pay to MedImmune [***] in the event that the [***];

 

(v)                                 Licensee shall pay to MedImmune [***] in the event that the [***];

 

(vi)                              Licensee shall pay to MedImmune [***] in the event that the [***];

 

(vii)                           Licensee shall pay to MedImmune [***] in the event that the [***]; and

 

(viii)                        Licensee shall pay to MedImmune [***] in the event that [***].

 

Each such milestone payment shall be due within [***] days of the end of the Calendar Quarter in such Calendar Year in which such milestone was achieved.  In the event that in [***]. Each milestone payment in this Section 5.2.2 shall be payable only upon the first achievement of such milestone in a given Calendar Year and no amounts shall be due for subsequent or repeated achievements of such milestone in subsequent Calendar Years.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

5.2.3.                  Determination that Milestones Have Occurred.  Licensee shall notify MedImmune promptly of the achievement of each of the events identified as a milestone in Section 5.2.1 or Section 5.2.2.  In the event that, notwithstanding the fact that Licensee has not provided MedImmune such a notice, MedImmune believes that any such milestone has been achieved, it shall so notify Licensee in writing and the Parties shall promptly meet and discuss in good faith whether such milestone has been achieved.  Any dispute under this Section 5.2.3 regarding whether or not such a milestone has been achieved shall be subject to resolution in accordance with Section 11.5.

 

5.3.                            Royalties.

 

5.3.1.                  Royalty Rates and Reports.  As further consideration for the rights granted to Licensee hereunder, commencing upon the First Commercial Sale of a Licensed Product in the Territory, solely during the Royalty Term the Licensee shall pay to MedImmune a royalty on Net Sales of each Licensed Products in the Territory during each Calendar Year at the following rates:

 

(i)                                     for that portion of aggregate Net Sales of all Licensed Products in the Territory during a Calendar Year less than [***], a royalty rate of [***];

 

(ii)                                  for that portion of aggregate Net Sales of all Licensed Products in the Territory during a Calendar Year equal to or greater than [***], a royalty rate of [***];

 

(iii)                               for that portion of aggregate Net Sales of all Licensed Products in the Territory during a Calendar Year equal to or greater than [***], a royalty rate of [***];

 

(iv)                              for that portion of aggregate Net Sales of all Licensed Products in the Territory during a Calendar Year equal to or greater than [***], a royalty rate of [***];

 

(v)                                 for that portion of aggregate Net Sales of all Licensed Products in the Territory during a Calendar Year equal to or greater than [***], a royalty rate of [***];

 

(vi)                              for that portion of aggregate Net Sales of all Licensed Products in the Territory during a Calendar Year equal to or greater than [***], a royalty rate of [***]; and

 

(vii)                           for that portion of aggregate Net Sales of all Licensed Products in the Territory during a Calendar Year equal to or greater than [***] a royalty rate of twenty percent (20%).

 

5.3.2.                  Each such royalty payment shall be due within [***] days of the end of the Calendar Quarter in such Calendar Year in which such royalty is being achieved.  Licensee shall also provide, at the same time each such payment is made, a report showing:

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

(a) the Net Sales of each Product; (b) the total amount of deductions from Invoiced Sales to determine Net Sales; (c) the applicable royalty rates for each Product on a country-by-country basis in each country in the Territory after applying any adjustments set forth in Section 5.3.4 below; and (d) a calculation of the amount of royalty due to MedImmune.

 

5.3.3.                  Blended Royalty.  Licensee acknowledges that (i) the Licensed Know-How including the Information included in the MedImmune Regulatory Documentation licensed to Licensee are proprietary and valuable and that without the Licensed Know-How and such Information, Licensee would not be able to obtain and maintain Regulatory Approvals with respect to the Licensed Products, (ii) such Regulatory Approvals will allow Licensee to obtain and maintain regulatory exclusivity with respect to the Licensed Products in the Field in the Territory, (iii) access to the Licensed Know-How and the rights with respect to the MedImmune Regulatory Documentation have provided Licensee with a competitive advantage in the marketplace beyond the exclusivity afforded by the Licensed Patents and (iv) the milestone payments and royalties set out in Section 5.2 and Sections 5.3, respectively, are, in part, intended to compensate MedImmune for such exclusivity and such competitive advantage.  The Parties agree that the royalty rates set out in Section 5.3.1 reflect an efficient and reasonable blended allocation of the value provided by MedImmune to Licensee.

 

5.3.4.                  Royalty Reductions.

 

(i)                                     Know-How Only Royalty Reduction.  During the Royalty Term for a Licensed Product in a country in the Territory, the royalty rates will be reduced by [***] on a country-by-country basis if there is no Valid Claim of a Patent included in the Licensed Patents that Covers the Licensee’s (or its Affiliate’s or Subliensee’s, as applicable) manufacture, importation or sale of such Licensed Product in such country.

 

(ii)                                  Third Party Royalty Reduction. During the Royalty Term for a Licensed Product in a country in the Territory, the royalty rates will be reduced by [***] of any commercial milestones and/or royalties paid by Licensee (or by its sublicensees) to Third Parties for the Licensed Product. MedImmune shall be solely responsible for paying any and all royalties payable under the In-License Agreements and the royalties paid to MedImmune hereunder are the only royalties that Licensee is due to pay MedImmune (inclusive of any other party of an In-License Agreement); provided that such royalties shall not be offset pursuant to the Third Party Royalty Reduction described above.

 

(iii)                               Biosimilars.  If a Biosimilar Product is launched in a country and any such Biosimilar Product(s) collectively have more than [***] in such country then the royalty rates for such country will be reduced [***].

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

(iv)                              Maximum Reduction.  The annual total of the royalty rates due to MedImmune set out in (i) to (iii) above will not be reduced in aggregate by more than [***].

 

5.4.                            Mode of Payment; Offsets.  All payments to MedImmune under this Agreement shall be made by deposit of Dollars in the requisite amount to such bank account as MedImmune may from time to time designate by notice to Licensee.  For the purpose of calculating any sums due under, or otherwise reimbursable pursuant to, this Agreement (including the calculation of Net Sales expressed in currencies other than Dollars), Licensee shall use the Currency Conversion Policy.  For the purposes of this Section 5.4, Currency Conversion Policy means Medimmune’s currency conversion policy as of the Effective Date of this Agreement, which is the booking rate for the current month calculated from the average spot rate for [***] of the last [***] Business Days of the previous month, as such spot rate is taken from Reuters as at 08.30 a.m. GMT on each day.  Licensee shall have no right to offset, set off or deduct any amounts from or against the amounts due to MedImmune hereunder.  The Parties may revise the Currency Conversion Policy by mutual written agreement.

 

5.5.                            Taxes.

 

5.5.1.                  General.  The upfront fee, technology transfer fee, milestone payments and royalties payable by Licensee to MedImmune pursuant to this Agreement (each, a “Payment”) shall be paid free and clear of any and all Taxes (which, for clarity, shall be the responsibility of Licensee), except for any withholding Taxes required by Applicable Law.  Except as provided in this Section 5.5, MedImmune shall be solely responsible for paying any and all Taxes (other than withholding Taxes required by Applicable Law to be deducted from Payments and remitted by Licensee) levied on account of, or measured in whole or in part by reference to, any Payments it receives.  Licensee shall deduct or withhold from the Payments any taxes that it is required by Applicable Law to deduct or withhold.  Notwithstanding the foregoing, if MedImmune is entitled under any applicable tax treaty to a reduction of rate of, or the elimination of, applicable withholding tax, it may deliver to Licensee or the appropriate Governmental Authority (with the assistance of Licensee to the extent that this is reasonably required and is requested in writing) the prescribed forms necessary to reduce the applicable rate of withholding or to relieve Licensee of its obligation to withhold such tax and Licensee shall apply the reduced rate of withholding or dispense with withholding, as the case may be; provided that Licensee has received evidence of MedImmune’s delivery of all applicable forms (and, if necessary, its receipt of appropriate governmental authorization) at least [***] days prior to the ime that the Payments are due.  If, in accordance with the foregoing, Licensee withholds any amount, it shall pay to MedImmune the balance when due, make timely payment to the proper taxing authority of the withheld amount and send to MedImmune proof of such payment within [***] days following such payment.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

5.5.2.                  Value Added Tax.  Notwithstanding anything contained in Section 5.5.1, this Section 5.5.2 shall apply with respect to value added tax (“VAT”).  All Payments are exclusive of VAT.  If any VAT is chargeable in respect of any Payments, Licensee shall pay VAT at the applicable rate in respect of any such Payments following the receipt of a VAT invoice in the appropriate form issued by MedImmune in respect of those Payments, such VAT to be payable on the later of the due date of the payment of the Payments to which such VAT relates and [***] days after the receipt by Licensee of the applicable invoice relating to that VAT payment.

 

5.6.                            Anti-Tax Evasion.

 

5.6.1.                  In this Section 5.6, (i) references to “committing tax evasion” means (a) fraudulently or dishonestly failing to pay any amount of tax to the relevant tax authority within any applicable time limit for the payment of such tax without incurring interest and/or penalties; and (b) fraudulently or dishonestly claiming any relief, allowance, credit, deduction, exemption or set off in respect of any tax (or relevant to the computation of any income, profits or gains for the purposes of any tax), or any right to or actual repayment of or saving of tax; and (ii) “tax” or “taxation” means taxes on gross or net income, profits and gains, and all other taxes, levies, duties, imposts, charges and withholdings of any nature, including any excise, property, wealth, capital, value added, sales, use, occupation, transfer, franchise and payroll taxes and any national insurance or social security contributions, together with all penalties, charges, fees and interest relating to any of the foregoing or to any late or incorrect return in respect of any of them.

 

5.6.2.                  The Licensee undertakes that (i) neither it nor its Affiliates shall commit tax evasion; and (ii) it and its Affiliates shall maintain reasonable procedures designed to prevent the Licensee, its Affiliates and any of its employees from undertaking any activities which would facilitate or otherwise result in the Licensee or its Affiliates from committing tax evasion.

 

5.6.3.                  The Licensee shall promptly report any apparent breach of this Section 5.6 to MedImmune.  The Licensee shall reasonably cooperate with any regulator or public authorities in relation to any investigation relating to the matters referred to in this Section 5.6.

 

5.7.                            Interest on Late Payments.  If any payment due to either Party under this Agreement is not paid when due, then such paying Party shall pay interest thereon (before and after any judgment) at an annual rate (but with interest accruing on a daily basis) of [***] business day of each month, such interest to run from the date on which payment of such sum became due until payment thereof in full together with such interest., such interest to run from the date on which payment of such sum became due until payment thereof in full together with such interest.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

5.8.                            Financial Records.  Licensee shall and shall cause its Affiliates and its and their Sublicensees to, keep true and accurate financial books and records pertaining to the Commercialization of Licensed Products hereunder, including books and records of Invoiced Sales and Net Sales of Licensed Products, in sufficient detail to calculate and verify all amounts payable hereunder.  Licensee shall and shall cause its Affiliates and its and their Sublicensees to, retain such books and records until the later of (i) [***] years after the end of the period to which such books and records pertain, (ii) the expiration of the applicable tax statute of limitations (or any extensions thereof), and (iii) for such period as may be required by Applicable Law. for such period as may be required by Applicable Law.

 

5.9.                            Audit.  At the request of MedImmune, Licensee shall and shall cause its Affiliates and its and their Sublicensees to, permit MedImmune or an independent auditor designated by MedImmune and reasonably acceptable to Licensee, at reasonable times and upon reasonable advance written notice (not less than [***] days), to audit the books and records maintained pursuant to this Agreement, to ensure the accuracy of all reports and payments made hereunder.  Such audit right shall not be exercised by MedImmune more than once in any Calendar Year or more than once with respect to sales of a particular Licensed Product in a particular period.  All records made available for audit shall be deemed to be Confidential Information of Licensee.  Except as provided below the cost of this audit will be borne by MedImmune, unless the audit reveals, with respect to a period, a variance of more than [***] from the reported amounts for such period, in which case Licensee shall bear the cost of the audit.  Unless disputed pursuant to Section 5.10 below, and such audit concludes that, (i) additional amounts were owed by Licensee, Licensee shall pay the additional amounts, with interest from the date originally due, or (ii) excess payments were made by Licensee, MedImmune shall reimburse such excess payments; in either case (i) or (ii), within [***] days after the date on which such audit is completed by MedImmune.

 

5.10.                     Audit Dispute.  The results of each audit, if any, shall be binding on both Parties absent manifest error.  In the event of a dispute with respect to any audit under Section 5.9, MedImmune and Licensee shall work in good faith to resolve the disagreement.  If the Parties are unable to reach a mutually acceptable resolution of any such dispute within [***] days, the dispute shall be submitted for resolution to a certified public accounting firm jointly selected by each Party’s certified public accountants or to such other Person as the Parties shall mutually agree (the “Auditor”).  The decision of the Auditor shall be final and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Auditor shall determine.  Not later than [***] days after such decision and in accordance with such decision, Licensee shall pay the additional amounts, with interest from the date originally due, MedImmune shall reimburse the excess payments, as applicable. shall reimburse the excess payments, as applicable.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

ARTICLE 6
 INTELLECTUAL PROPERTY

 

6.1.                            Ownership of Intellectual Property.

 

6.1.1.                  Ownership of Technology.  As between the Parties, each Party shall own and retain all right, title and interest in and to any and all: (i) Information, and other Intellectual Property that is conceived, discovered, developed or otherwise made by or on behalf of such Party or its Affiliates or its or their (sub)licensees (or Sublicensee(s)), as applicable, under or in connection with this Agreement, whether or not patented or patentable and any and all Patents with respect thereto; and (ii) other Information, inventions, Patents and other Intellectual Property that are owned or otherwise controlled (other than pursuant to the license grants set out in Section 3.1 by such Party or its Affiliates or its or their (sub)licensees (or Sublicensees) (as applicable) outside of this Agreement.

 

6.1.2.                  Ownership of Product Trademarks.  As between the Parties, Licensee shall own all right, title and interest to the Product Trademarks in the Territory.

 

6.2.                            Maintenance and Prosecution of Patents.

 

6.2.1.                  In General.  As between the Parties, Licensee shall have the right and  assume responsibility for, through counsel of its choice, to prepare, file, prosecute and maintain the Exclusive Licensed Patents including directing any related interference, re-issuance, re-examination and opposition proceedings with respect thereto, in each case, at the sole cost and expense of Licensee.  If Licensee decides not to prepare, file, prosecute or maintain an Exclusive Licensed Patent in a country in the Territory, Licensee shall provide reasonable prior written notice to MedImmune of such intention and, MedImmune shall thereupon have the right, in its sole discretion, to abandon such Exclusive Licensed Patent or to assume the control and direction of the preparation, filing, prosecution and maintenance of such Exclusive Licensed Patent at MedImmune’s sole cost and expense in such country.  For the avoidance of doubt, MedImmune shall be responsible for any and all costs associated with the preparation, filing, prosecution and maintenance of Non-Exclusive Licensed Patents.

 

6.2.2.                  Prosecuting Party.  For purposes of this Section 6.2.2, the Party prosecuting, maintaining or undertaking other related activities with respect to a Patent shall be the “Prosecuting Party.”  The Prosecuting Party shall inform the other Party of all material steps with regard to the preparation, filing, prosecution and maintenance of the Exclusive Licensed Patents, by providing the non-Prosecuting Party with a copy of material communications to and from any patent authority in the Territory regarding such Patents and by providing the non-Prosecuting Party drafts of any material filings or responses to be made to such patent authorities in the Territory sufficiently in advance of submitting such filings or responses so as to allow for a reasonable opportunity for the non-Prosecuting Party to

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

review and comment thereon.  The Prosecuting Party shall consider in good faith the requests and suggestions of the non-Prosecuting Party with respect to such drafts and with respect to strategies for filing and prosecuting such Patents in the Territory.

 

6.2.3.                  Cooperation.  The non-Prosecuting Party shall, and shall cause its Affiliates to, assist and cooperate with the Prosecuting Party, as the Prosecuting Party may reasonably request from time to time, in the preparation, filing, prosecution and maintenance of the Exclusive Licensed Patents in the Territory under this Agreement, including that the non-Prosecuting Party shall, and shall reasonably endeavor to ensure that its Affiliates (i) offer its comments, if any, promptly, and (ii) provide access to relevant documents and other evidence and make its employees available at reasonable business hours; provided, however, that the Prosecuting Party shall reimburse the non-Prosecuting Party for its reasonable and verifiable out-of-pocket costs and expenses incurred in connection therewith.

 

6.2.4.                  Patent Term Extension and Supplementary Protection Certificate.  As between the Parties, Licensee shall have the sole right to make decisions regarding and to apply for, patent term extensions, in the Territory, including in the United States with respect to extensions pursuant to 35 U.S.C. §156 et. seq. and in other jurisdictions pursuant to supplementary protection certificates, and in all jurisdictions with respect to any other extensions that are now or become available in the future, wherever applicable, for the Exclusive Licensed Patents and the Licensed Products, in each case including whether or not to do so; provided that MedImmune shall consult with Licensee to determine the course of action with respect to such filings.  MedImmune shall provide prompt and reasonable assistance, as requested by Licensee, including by taking such reasonable action as patent holder as is required under any Applicable Law to obtain such extension or supplementary protection certificate.

 

6.2.5.                  Patent Listings.  As between the Parties, Licensee shall have the sole right to make decisions regarding and Licensee shall have the right to make all filings with Regulatory Authorities in the Territory with respect to the Exclusive Licensed Patents including as required or allowed (i) in the United States, in the FDA’s Purple Book and (ii) in the European Union, under the national implementations of Article 10.1(a)(iii) of Directive 2001/EC/83 or other international equivalents.

 

6.3.                            Enforcement of Patents.

 

6.3.1.                  Notice.  Each Party shall promptly notify the other Party in writing of (i) any alleged or threatened infringement of the Exclusive Licensed Patents, in any jurisdiction in the Territory or (ii) any certification, claim, demand, action or cause of action for declaratory relief alleging that any claim in an Exclusive Licensed Patent is invalid or unenforceable or alleging that any claim of an Exclusive Licensed Patent would not be infringed by the making, use, offer for sale, sale or import of a product or any equivalent or

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

similar certification or notice in any other jurisdiction in the Territory, in each case ((i) and (ii)) of which such Party becomes aware (an “Infringement”).

 

6.3.2.                  Enforcement of Patents.  As between the Parties, (i) Prosecuting Party pursuant to 6.2.2 shall have the first right, but not the obligation, to prosecute any Infringement with respect to the Exclusive Licensed Patents including as a defense or counterclaim in connection with any Third Party Infringement Claim, at Prosecuting Party’s sole cost and expense, using counsel of Prosecuting Party’s choice and (ii) MedImmune shall have the sole right, but not the obligation, to prosecute Infringement with respect to the Non-Exclusive Licensed Technology, including as a defense or counterclaim in connection with any Third Party Infringement Claim, at MedImmune’s sole cost and expense, using counsel of its choice.   For purposes of this Section 6.3, the Party prosecuting any Infringement pursuant to the foregoing sentence with respect to a Patent shall be the “Enforcing Party.”  In the event MedImmune prosecutes any such Infringement in the Field in the Territory, Licensee shall have the right to join as a party to such claim, suit or proceeding and participate with its own counsel at its sole cost and expense; provided that MedImmune shall retain control of the prosecution of such claim, suit or proceeding, including the response to any defense or defense of any counterclaim raised in connection therewith.  In the event Licensee prosecutes any such Infringement in the Field in the Territory, MedImmune shall have the right to join as a party to such claim, suit or proceeding and participate with its own counsel at its sole cost and expense; provided that Licensee shall retain control of the prosecution of such claim, suit or proceeding, including the response to any defense or defense of any counterclaim raised in connection therewith.  If the Enforcing Party or its designee does not take commercially reasonable steps to prosecute an Infringement in the Field (x) within [***] days following the first notice provided above with respect to such Infringement or (y) provided such date occurs after the first such notice of such Infringement is provided, [***] Business Days before the time limit, if any, set out in appropriate laws and regulations for filing of such actions, whichever comes first, then (1) the Enforcing Party shall so notify the non-Enforcing Party and (2) subject to any rights of any Third Parties under any In-License Agreements (or other applicable Third Party agreements existing as of the Effective Date) and upon the Enforcing Party’s written consent (such consent not to be unreasonably withheld, conditioned or delayed), the non-Enforcing may prosecute such alleged or threatened infringement in the Field at its sole cost and expense, whereupon the non-Enforcing Party shall be deemed the Enforcing Party with respect to such Infringement.

 

6.3.3.                  Cooperation.  The Parties agree to cooperate fully in any Infringement action pursuant to this Section 6.3, including by making the inventors, applicable records and documents (including laboratory notebooks) with respect to the relevant Patents available to the Enforcing Party on the Enforcing Party’s request.  With respect to an action controlled by the applicable Enforcing Party, the other Party shall, and shall cause its Affiliates to, assist and cooperate with the Enforcing Party, as the Enforcing

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Party may reasonably request from time to time, in connection with its activities set out in this Section, including where necessary, furnishing a power of attorney solely for such purpose or joining in, or being named as a necessary party to, such action, providing access to relevant documents and other evidence and making its employees available at reasonable business hours; provided that the Enforcing Party shall reimburse such other Party for its reasonable and verifiable out-of-pocket costs and expenses incurred in connection therewith.  Unless otherwise set out herein, the Enforcing Party shall have the right to settle such claim; provided that neither Party shall have the right to settle any Infringement litigation under this Section 6.3 in a manner that has a material adverse effect on the rights or interest of the other Party or in a manner that imposes any costs or liability on or involves any admission by, the other Party, without the express written consent of such other Party (which consent shall not be unreasonably withheld, conditioned or delayed).  In connection with any activities with respect to an Infringement action prosecuted by the applicable Enforcing Party pursuant to this Section 6.3 involving Patents Controlled by or licensed under Article 2 to the other Party, the Enforcing Party shall (i) consult with the other Party as to the strategy for the prosecution of such claim, suit or proceeding, (ii) consider in good faith any comments from the other Party with respect thereto and (iii) keep the other Party reasonably informed of any material steps taken and provide copies of all material documents filed, in connection with such action.

 

6.3.4.                  Recovery.  Except as otherwise agreed by the Parties in connection with a cost sharing arrangement, any recovery realized as a result of such litigation described above in this Section 6.3 (whether by way of settlement or otherwise) shall be first, allocated to reimburse the Parties for their costs and expenses in making such recovery (which amounts shall be allocated pro rata if insufficient to cover the totality of such expenses).  Any remainder after such reimbursement is made shall be [***]; provided, however, [***].

 

6.4.                            Infringement Claims by Third Parties.  If the Exploitation of a Licensed Product in the Territory pursuant to this Agreement results in, or is reasonably expected to result in, any claim, suit or proceeding by a Third Party alleging infringement by Licensee or any of its Affiliates or its or their Sublicensees, (a “Third Party Infringement Claim”), including any defense or counterclaim in connection with an Infringement action initiated pursuant to Section 6.3.2, the Party first becoming aware of such alleged infringement shall promptly notify the other Party thereof in writing.  As between the Parties, Licensee shall be responsible for defending any such claim, suit or proceeding, at its sole cost and expense using counsel of Licensee’s choice, in relation to technology licensed under any Exclusive Licensed Technology, and MedImmune shall be responsible for defending any such claim, suit or proceeding at proceeding at its sole cost and expense, using counsel of MedImmune’s choice in relation to technology licensed under any Non-Exclusive Licensed Technology.  MedImmune shall, and shall cause its Affiliates to, assist and cooperate with Licensee, as Licensee may reasonably request from time to time, in connection with its activities set out in this Section 6.4, including where necessary, furnishing a power of attorney solely for such

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

purpose or joining in, or being named as a necessary party to, such action, providing access to relevant documents and other evidence and making its employees available at reasonable business hours; provided that Licensee shall reimburse MedImmune for its reasonable and verifiable out-of-pocket costs and expenses incurred in connection therewith.  Licensee shall keep MedImmune reasonably informed of all material developments in connection with any such claim, suit or proceeding.  Licensee agrees to provide MedImmune with copies of all material pleadings filed in such action and to allow MedImmune reasonable opportunity to participate in the defense of the claims.  Any damages, or awards, including royalties incurred or awarded in connection with any Third Party Infringement Claim defended under this Section 6.4 shall be [***].

 

6.5.                            Invalidity or Unenforceability Defenses or Actions.   As between the Parties, (i) Prosecuting Party pursuant to 6.2.2 shall have the first right, but not the obligation, to defend and control the defense of the validity and enforceability of the Exclusive Licensed Patents at its sole cost and expense, using counsel of Prosecuting Party’s choice and including when such invalidity or unenforceability is raised as a defense or counterclaim in connection with an Infringement action initiated pursuant to Section 6.3.  For purposes of this Section 6.5, the Party prosecuting any Infringement pursuant to the foregoing sentence with respect to a Patent shall be the “Controlling Party.”  With respect to any such claim, suit or proceeding in the Territory, the non-Controlling Party may participate in such claim, suit or proceeding with counsel of its choice at its sole cost and expense; provided that the Controlling Party shall retain control of the defense in such claim, suit or proceeding.  If the Controlling Party or its designee elects not to defend or control the defense of the applicable Patents in a suit brought in the Territory or otherwise fails to initiate and maintain the defense of any such claim, suit or proceeding, then subject to any rights of Third Parties under any In-License Agreements (or other applicable Third Party agreements existing as of the Effective Date) the non-Controlling Party may conduct and control the defense of any such claim, suit or proceeding at its sole cost and expense.  The non-Controlling Party in such an action shall, and shall cause its Affiliates to, assist and cooperate with the Controlling Party, as such Controlling Party may reasonably request from time to time, in connection with its activities set out in this Section 6.5, including where necessary, furnishing a power of attorney solely for such purpose or joining in, or being named as a necessary party to, such action, providing access to relevant documents and other evidence and making its employees available at reasonable business hours; provided that the Controlling Party shall reimburse the non-Controlling Party for its reasonable and verifiable out-of-pocket costs and expenses incurred in connection therewith.  In connection with any activities with respect to a defense, claim or counterclaim relating to the Exclusive Licensed Patents, pursuant to this Section 6.5, the Controlling Party shall (x) consult with the non-Controlling Party as to the strategy for such activities, (y) consider in good faith any comments from the non-Controlling Party and (z) keep the non-Controlling Party reasonably informed of any material steps taken and provide copies of all material documents filed, in connection with such defense, claim or counterclaim.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

6.6.                            Third Party Patent Rights. Exploitation of the Licensed Compound or Licensed Product in the Field and in the Territory by Licensee, any of its Affiliates or any of its or their Sublicensees infringes or is reasonably expected to infringe any Patent of a Third Party in any country in the Territory (such right, a “Third Party Patent Right”), then, as between the Parties, Licensee shall have the first right, but not the obligation, to negotiate and obtain a license from such Third Party to such Third Party Patent Right as necessary or desirable for Licensee or its Affiliates or its or their Sublicensees to Exploit the Licensed Compound and Licensed Products in the Field in such country; provided that (i) [***], and (ii) [***].  Licensee shall provide prior notice to MedImmune before entering into any such license and will consult with Medimmune with respect to such matter (subject to Section 7.6 hereof) and consider feedback provided by MedImmune in good faith.

 

6.7.                            Product Trademarks.

 

6.7.1.                  Notice.  Each Party shall provide to the other Party prompt written notice of any actual or threatened infringement of the Product Trademarks in the Territory and of any actual or threatened claim that the use of the Product Trademarks in the Territory violates the rights of any Third Party, in each case, of which such Party becomes aware.

 

6.7.2.                  Prosecution of Product Trademarks.  Licensee shall be responsible for the registration, prosecution and maintenance of the Product Trademarks using counsel of its own choice.  All costs and expenses of registering, prosecuting and maintaining the Product Trademarks shall be borne solely by Licensee.

 

6.7.3.                  Enforcement of Product Trademarks.  Licensee shall have the right to take such action as Licensee deems necessary against a Third Party based on any alleged, threatened or actual infringement, dilution, misappropriation or other violation of or unfair trade practices or any other like offense relating to, the Product Trademarks by a Third Party in the Territory at its sole cost and expense and using counsel of its own choice.  Licensee shall retain any damages or other amounts collected in connection therewith.

 

6.7.4.                  Third Party Claims.  Licensee shall have the right to defend against any alleged, threatened or actual claim by a Third Party that the use or registration of the Product Trademarks in the Territory infringes, dilutes, misappropriates or otherwise violates any Trademark or other right of that Third Party or constitutes unfair trade practices or any other like offense or any other claims as may be brought by a Third Party against a Party in connection with the use of the Product Trademarks with respect to a Licensed Product in the Territory at its sole cost and expense and using counsel of its choice.  Any damages, or awards, including royalties incurred or awarded in connection with any such claim defended under this Section 6.7.4 shall be borne by Licensee.

 

6.7.5.                  Cooperation.  MedImmune shall, and shall cause its Affiliates to, assist and cooperate with Licensee, as Licensee may reasonably request from time to time, in

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

connection with its activities set out in this Section, including where necessary, furnishing a power of attorney solely for such purpose or joining in, or being named as a necessary party to, such action, providing access to relevant documents and other evidence and making its employees available at reasonable business hours; provided that Licensee shall reimburse MedImmune for its and its Affiliates’ reasonable and verifiable out-of-pocket costs and expenses incurred in connection therewith.

 

ARTICLE 7
 CONFIDENTIALITY AND NON-DISCLOSURE

 

7.1.                            Confidentiality Obligations.  Each Party shall and shall cause its officers, directors, employees, advisors and agents to, keep confidential and not publish or otherwise disclose to a Third Party and not use, directly or indirectly, for any purpose, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such disclosure or use is solely for the purpose of exercising its rights and performing its obligations hereunder.  “Confidential Information” means any technical, business or other information provided by or on behalf of one Party to the other Party in connection with this Agreement, whether prior to, on or after the Effective Date, including information relating to the terms of this Agreement, information relating to the Licensed Compound or any Licensed Product (including the Regulatory Documentation), any Development or Commercialization of the Licensed Compound or any Licensed Product, any know-how with respect thereto developed by or on behalf of the disclosing Party or its Affiliates, or the scientific, regulatory or business affairs or other activities of either Party.  For purposes of clarity, on and after the Effective Date, all Confidential Information concerning the Licensed Compound and any Licensed Product transferred to Licensee under this Agreement, shall be considered Confidential Information of Licensee, including any such Confidential Information generated by MedImmune prior to the Effective Date.  Notwithstanding the foregoing, the confidentiality and non-use obligations under this Section 7.1 with respect to any Confidential Information shall not include any information that:

 

(i)                                     is or hereafter becomes part of the public domain by public use, publication, general knowledge or the like through no breach of this Agreement by the receiving Party (or its affiliates);

 

(ii)                                  can be demonstrated by documentation or other competent proof to have been in the receiving Party’s (or its Affiliates) possession prior to disclosure by the disclosing Party without any obligation of confidentiality with respect to such information;

 

(iii)                               is subsequently received by the receiving Party (or its Affiliates)  from a Third Party who is not bound by any obligation of confidentiality with respect to such information;

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

(iv)                              has been published by a Third Party or otherwise enters the public domain through no fault of the receiving Party (or its Affiliates) in breach of this Agreement; or

 

(v)                                 can be demonstrated by documentation or other competent evidence to have been independently developed by or for the receiving Party (or its Affiliates)  without reference to the disclosing Party’s Confidential Information.

 

Specific aspects or details of Confidential Information shall not be deemed to be within the public domain or in the possession of the receiving Party merely because the Confidential Information is embraced by more general information in the public domain or in the possession of the receiving Party.  Further, any combination of Confidential Information shall not be considered in the public domain or in the possession of the receiving Party merely because individual elements of such Confidential Information are in the public domain or in the possession of the receiving Party unless the combination and its principles are in the public domain or in the possession of the receiving Party.

 

7.2.                            Permitted Disclosures. Each Party may disclose Confidential Information to the extent that such disclosure is:

 

(i)                                     made in response to a valid order of a court of competent jurisdiction or other supra-national, federal, national, regional, state, provincial and local Governmental Entity or regulatory body of competent jurisdiction or, if in the reasonable opinion of the receiving Party’s legal counsel, such disclosure is otherwise required by Applicable Law, including by reason of filing with securities regulators; provided, however, that the receiving Party shall first have given notice to the disclosing Party and given the disclosing Party a reasonable opportunity to quash such order or to obtain a protective order or confidential treatment requiring that the Confidential Information and documents that are the subject of such order be held in confidence by such court or agency or, if disclosed, be used only for the purposes for which the order was issued; and provided, further, that the Confidential Information disclosed in response to such court or governmental order shall be limited to that information which is legally required to be disclosed in response to such court or governmental order;

 

(ii)                                  made by or on behalf of the receiving Party to the Regulatory Authorities as required in connection with any filing, application or request for Regulatory Approval; provided, however, that reasonable measures shall be taken to assure confidential treatment of such information to the extent practicable and consistent with Applicable Law; or

 

(iii)                               made by or on behalf of the receiving Party to a patent authority as may be reasonably necessary or useful for purposes of obtaining or enforcing a

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Patent; provided, however, that reasonable measures shall be taken to assure confidential treatment of such information, to the extent such protection is available.

 

7.3.                            Use of Name. The use of name or Trademark of the other Party or any of its Affiliates or any of its or their (sub)licensees (or Sublicensees) (or any abbreviation or adaptation thereof) in any publication, press release, marketing and promotional material or other form of publicity without the prior written approval of such other Party is not permitted.  The restrictions imposed by this Section 7.3 do not restrict (i) either Party from making any disclosure identifying the other Party to the extent required in connection with its exercise of its rights or obligations under this Agreement and (ii) either Party from making any disclosure identifying the other Party that is required by Applicable Law or the rules of a stock exchange on which the securities of the disclosing Party are listed (or to which an application for listing has been submitted

 

7.4.                            Public Announcements and Non-Disclosure of Agreement.

 

7.4.1.                  Restrictions.  The Parties agree that neither Party shall (i) disclose the existence or terms of this Agreement or the terms of any term sheet or agreement negotiated pursuant to Section 2.1, or (ii) issue any press release or public statement disclosing information relating to this Agreement or the transactions contemplated hereby or the terms hereof, without prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed (or as such consent may be obtained in accordance with Section 7.4.2).  Notwithstanding the foregoing, either Party may disclose the existence and terms of this Agreement to its Affiliates, and to its (actual or potential) permitted licensees, sublicensees, acquirers or assignees and subcontractors (and their advisors) and to investment bankers, investors, lenders, accountants and legal advisors and to such Party’s directors, employees, contractors and agents, who have a need to know such Confidential Information.  Each Party shall advise any such permitted licensees, sublicensees, acquirers or assignees, subcontractors (and their advisors), investment bankers, investors, lenders, accountants and legal advisors and such Party’s directors, employees, contractors and agents who receive Confidential Information of the confidentiality obligations set forth in Article 7 for at least [***] years, and such Party shall take steps to ensure (through enforcement of written agreements or otherwise) that they comply with such obligations as if they had been a Party hereto; provided, however, that such Party shall remain responsible for any failure by any Person who receives such information from such Party pursuant to this Section 7.4 to treat such information as required under this Article 7.

 

7.4.2.                  Review.  In the event either Party (the “Issuing Party”) is required by Law or the rules or regulations of any applicable United States securities exchange or regulatory or governmental body to which the relevant Party is subject to issue a press release or other public statement disclosing information relating to this Agreement or the transactions contemplated hereby or the terms hereof, the Issuing Party will provide the

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

other Party (the “Reviewing Party”) with a copy of the proposed press release or public statement (the “Release”). The Issuing Party will specify with each such Release, taking into account the urgency of the matter being disclosed, a reasonable period of time within which the Receiving Party may provide any comments on such Release (but in no event less than [***] Business Days, unless earlier disclosure is required) and if the Receiving Party fails to provide any comments during the response period called for by the Issuing Party, the Reviewing Party will be deemed to have consented to the issuance of such Release. If the Receiving Party provides any comments, the Parties will consult on such Release and work in good faith to prepare a mutually acceptable Release. Either Party may subsequently publicly disclose any information previously contained in any Release so consented to. For the avoidance of doubt, Licensee, in its sole discretion, may disclose the results or status of research, development or any clinical trial conducted by Licensee or any health or safety matter related to any Licensed Compound or Licensed Products.

 

7.5.                            Return of Confidential Information.  Upon the effective date of the expiration or termination of this Agreement for any reason, either Party may request in writing and the non-requesting Party shall either, with respect to Confidential Information of the requesting Party to which such non-requesting Party does not retain rights under the surviving provisions of this Agreement, at the requesting Party’s election, (i) promptly destroy all copies of such Confidential Information in the possession or control of the non-requesting Party and confirm such destruction in writing to the requesting Party or (ii) promptly deliver to the requesting Party, at the non-requesting Party’s sole cost and expense, all copies of such Confidential Information in the possession or control of the non-requesting Party.  Notwithstanding the foregoing, the non-requesting Party shall be permitted to retain such Confidential Information (x) to the extent necessary or useful for purposes of performing any continuing obligations or exercising any ongoing rights hereunder and, in any event, a single copy of such Confidential Information for archival purposes and (y) any computer records or files containing such Confidential Information that have been created solely by such non-requesting Party’s automatic archiving and back-up procedures, to the extent created and retained in a manner consistent with such non-requesting Party’s standard archiving and back-up procedures, but not for any other uses or purposes.  All Confidential Information shall continue to be subject to the terms of this Agreement until [***].

 

7.6.                            Privileged Communications.  The Parties may, from time to time, disclose to one another privileged communications with counsel, including opinions, memoranda, letters and other written, electronic and verbal communications.  Such disclosures are made with the understanding that they shall remain confidential in accordance with this Article 7, that they will not be deemed to waive any applicable attorney-client or attorney work product or other privilege and that they are made in connection with the shared community of legal interests existing between MedImmune and Licensee, including the community of legal interests in avoiding infringement of any valid, enforceable patents of Third Parties prosecuting and maintaining the validity of the Licensed Patents.  In the event of any

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

litigation (or potential litigation) with a Third Party related to this Agreement or the subject matter hereof, the Parties shall, upon either Party’s request, enter into a reasonable and customary joint defense agreement.  In any event, each Party shall consult in a timely manner with the other Party before engaging in any conduct (e.g., producing information or documents) in connection with litigation or other proceedings that could conceivably implicate privileges maintained by the other Party.  Notwithstanding anything contained in this Section 7.6, nothing in this Agreement shall prejudice a Party’s ability to take discovery of the other Party in disputes between them relating to the Agreement and no information otherwise admissible or discoverable by a Party shall become inadmissible or immune from discovery solely by this Section 7.6.

 

ARTICLE 8
 REPRESENTATIONS AND WARRANTIES

 

8.1.                            Mutual Representations and Warranties.  MedImmune and Licensee each represents and warrants to the other, as of the Effective Date, and covenants, that:

 

8.1.1.                  It is a duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has all requisite power and authority, corporate or otherwise, to execute, deliver and perform this Agreement;

 

8.1.2.                  The execution and delivery of this Agreement and the performance by it of the transactions contemplated hereby have been duly authorized by all necessary corporate action and do not violate:  (i) such Party’s charter documents, bylaws or other organizational documents; (ii) in any material respect, any agreement, instrument or contractual obligation to which such Party is bound; (iii) any requirement of any Applicable Law; or (iv) any order, writ, judgment, injunction, decree, determination or award of any court or governmental agency presently in effect applicable to such Party;

 

8.1.3.                  This Agreement is a legal, valid and binding obligation of such Party enforceable against it in accordance with its terms and conditions, subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor rights, judicial principles affecting the availability of specific performance and general principles of equity (whether enforceability is considered a proceeding at law or equity);

 

8.1.4.                  It is not under any obligation, contractual or otherwise, to any Person that conflicts with or is inconsistent in any material respect with the terms of this Agreement or that would impede the diligent and complete fulfillment of its obligations hereunder; and

 

8.1.5.                  Neither Party nor any its or their Affiliates’ employees nor, to such Party’s Knowledge, any employees of their respective licensees, contractors, agents and

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

consultants who have been involved, on its behalf, in the Exploitation of the Licensed Product:

 

(i)                                     is debarred under Section 306(a) or 306(b) of the FFDCA or by the analogous Applicable Laws of any Regulatory Authority;

 

(ii)                                  has been charged with, or convicted of, any felony or misdemeanor within the ambit of 42 U.S.C. §§ 1320a-7(a), 1320a-7(b)(l)-(3), or pursuant to the analogous Applicable Laws of any Regulatory Authority, or is proposed for exclusion, or the subject of exclusion or debarment proceedings by a Regulatory Authority; or

 

(iii)                               is excluded, suspended or debarred from participation, or otherwise ineligible to participate, in any U.S. or non-U.S. healthcare programs (or has been convicted of a criminal offense that falls within the scope of 42 U.S.C. §1320a-7 but not yet excluded, debarred, suspended, or otherwise declared ineligible), or excluded, suspended or debarred by a Regulatory Authority from participation, or otherwise ineligible to participate, in any procurement or non-procurement programs.

 

8.2.                            Additional Representations and Warranties of MedImmune.  MedImmune further represents and warrants to Licensee, as of the Effective Date, that:

 

8.2.1.                  Title to Assets.  MedImmune or its Affiliates have good and valid title to all of the Purchased Assets in their entirety free and clear of all encumbrances and liabilities.  Schedule 3.1 is a complete list of all Purchased Assets, including the Inventory, as it exists as of the Effective Date.

 

8.2.2.                  Litigation and Claims.  There is no action, suit, claim, proceeding or investigation pending that has been served on MedImmune, and to the Knowledge of MedImmune, there is no other action, suit, claim, proceeding or investigation pending or threatened against MedImmune before or by any federal, state, municipal or other governmental court, agency or instrumentality, which would prevent MedImmune’s performance of this Agreement and the transactions contemplated hereby.

 

8.2.3.                  Intellectual Property Rights.

 

(i)                                     MedImmune has sufficient legal and/or beneficial ownership and/or rights in the Licensed Technology necessary to grant the licenses and sublicenses set forth in accordance with the terms of this Agreement.

 

(ii)                                  None of the Licensed Technology constitute Third Party Intellectual Property.

 

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Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

(iii)                               Schedule 1.39 lists and separately identifies each and every Exclusive Licensed Patent.  The list of Exclusive Licensed Patents included on Schedule 1.39 is a complete list of all Patents Controlled by MedImmune or its Affiliates prior to the Effective Date that [***] relate to the Licensed Compound or Licensed Products, or the Exploitation thereof, as the  Licensed Compound or Licensed Products exist as of the Effective Date.

 

(iv)                              MedImmune has diligently prosecuted the Exclusive Licensed Patents, taken all necessary actions and paid all necessary fees to maintain the Licensed Patents in full force and effect, including, to MedImmune’s Knowledge, complying with the duty of candor and disclosure to the United States Patent and Trademark Office and any relevant foreign patent office with respect to all Exclusive Licensed Patents and have made no misrepresentation in the Exclusive Licensed Patents. To MedImmune’s Knowledge, the Exclusive Licensed Patents are valid, subsisting and enforceable.

 

(v)                                 Schedule 8.2.3(v) accurately identifies and describes each action, filing and payment that MedImmune is aware of as of the Effective Date that must be taken or made on or before the date that is [***] months after the date of this Agreement to maintain such item of Exclusive Licensed Patents in full force and effect.

 

(vi)                              To MedImmune’s Knowledge, MedImmune has had and currently has all rights in Exclusive Licensed Patents necessary to carry out MedImmune’s former activities and current activities with respect to the Licensed Compound and Licensed Product (including, without limitation, the design, development, use and provision thereof) and there is no other Intellectual Property necessary to carry out MedImmune’s business as currently conducted.

 

(vii)                           Title to all Exclusive Licensed Patents owned or purported to be owned by MedImmune, whether beneficially or otherwise, is held by and in the name of MedImmune.  The transactions contemplated under this Agreement will not alter, impair or otherwise affect any rights of MedImmune in any Exclusive Licensed Patents.

 

(viii)                        No actual claims or, to MedImmune’s Knowledge, threatened claims challenging the validity, enforceability, effectiveness or ownership by MedImmune of any of the Exclusive Licensed Patents, exist, nor to MedImmune’s Knowledge is there any valid basis for such a claim.

 

(ix)                              There are no legal proceedings, including without limitation litigation, interference, re-examination, reissue, opposition, nullity, or cancellation proceedings, pending  with respect to any of the Exclusive Licensed Patents.

 

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(x)                                 Except as set forth on Schedule 8.2.3(x), to MedImmune’s Knowledge, there is no unauthorized use, infringement or misappropriation by any third party or current or former employee of MedImmune of any Exclusive Licensed Patents.

 

(xi)                              MedImmune has taken commercially reasonable measures to protect its ownership of, and rights in, all Licensed Technology.

 

(xii)                           MedImmune has not granted any licenses or covenants not to sue under the Exclusive Licensed Patents.

 

(xiii)                        MedImmune has paid all licensing fees, royalties, profit participations and other payments that were due or payable by MedImmune or any of its Affiliates in connection with its use or practice of the Exclusive Licensed Patents prior to the Effective Date.

 

(xiv)                       The In-License Agreements are a complete list of all agreements to which MedImmune is a party granting or assigning any right (whether contingent or otherwise) to own, use or practice any rights under any Licensed Technology.

 

(xv)                          All of the In-License Agreements are in force and effect in all material respects as of the date hereof and are binding and enforceable against MedImmune and, to MedImmune’s Knowledge, any other party to each such In-License Agreements

 

(xvi)                       Except as set forth on Schedule 8.2.3(xvi), (a) neither MedImmune nor, to MedImmune’s Knowledge, any other party thereto is in, or has received notice of, material breach or material default of any In-License Agreement, and (b) no event has occurred that with notice or lapse of time would constitute a material breach or material default under any In-License Agreement by MedImmune or, to MedImmune’s Knowledge, any other party to any In-License Agreement or would permit the modification or premature termination of any In-License Agreement by any other party thereto.

 

(xvii)                    MedImmune has delivered to Licensee, or made available to Licensee or its advisors, copies of each In-License Agreement and included all amendments or modifications thereto.

 

(xviii)                 As of the date hereof, MedImmune has not received any written notice from any third party asserting a claim, or threatening to make a claim, which would adversely affect the rights of Licensee as a sublicensee under any In-License Agreement.

 

8.3.                            Additional Representations and Warranties of Licensee.  As of the Effective Date, Licensee:  (i) has conducted its own investigation and analysis of (a) the Patent and other proprietary rights of Third Parties as such rights relate to the Exploitation of

 

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the Licensed Compound as contemplated hereunder and (b) the potential infringement thereof; (ii) understands the complexity and uncertainties associated with possible claims of Infringement of Patent or other proprietary rights of Third Parties, particularly those relating to pharmaceutical products; and (iii) acknowledges and agrees that it is solely responsible for the risks of such claims after the Effective Date.

 

8.4.                            DISCLAIMER OF WARRANTIES.   EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN THIS ARTICLE 8, BOTH PARTIES DISCLAIM ALL OTHER REPRESENTATIONS AND WARRANTIES, WHETHER WRITTEN OR ORAL OR EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF QUALITY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. FITNESS FOR A PARTICULAR USE OR PURPOSE OR ANY WARRANTY AS TO THE VALIDITY OF ANY PATENTS OR THE NON-INFRINGEMENT OF ANY INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

 

8.5.                            ADDITIONAL WAIVER.  LICENSEE AGREES THAT:  (i) THE LICENSED PATENTS ARE LICENSED “AS IS,” “WITH ALL FAULTS,” AND “WITH ALL DEFECTS,” AND LICENSEE EXPRESSLY WAIVES ALL RIGHTS TO MAKE ANY CLAIM WHATSOEVER AGAINST MEDIMMUNE FOR MISREPRESENTATION OR FOR BREACH OF PROMISE, GUARANTEE OR WARRANTY OF ANY KIND RELATING TO THE LICENSED PATENTS; (ii) LICENSEE AGREES THAT MEDIMMUNE WILL HAVE NO LIABILITY TO LICENSEE FOR ANY ACT OR OMISSION IN THE PREPARATION, FILING, PROSECUTION, MAINTENANCE, ENFORCEMENT, DEFENCE OR OTHER HANDLING OF THE LICENSED PATENTS; AND (iii) LICENSEE IS SOLELY RESPONSIBLE FOR DETERMINING WHETHER THE LICENSED PATENTS HAVE APPLICABILITY OR UTILITY IN LICENSEE’S CONTEMPLATED EXPLOITATION OF THE LICENSED PRODUCTS AND LICENSEE ASSUMES ALL RISK AND LIABILITY IN CONNECTION WITH SUCH DETERMINATION.

 

8.6.                            Anti-Bribery and Anti-Corruption Compliance.

 

8.6.1.                  Licensee agrees, on behalf of itself, its officers, directors and employees and on behalf of its Affiliates, agents, representatives, consultants and subcontractors hired in connection with the subject matter of this Agreement (together with Licensee, the “Licensee Representatives”) that in connection with the performance of its obligations hereunder:

 

(i)                                     The Licensee Representatives shall not directly or indirectly pay, offer or promise to pay or authorize the payment of any money or give, offer or promise

 

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to give or authorize the giving of anything else of value, to:  (a) any Government Official in order to influence official action; (b) any Person (whether or not a Government Official) (I) to influence such Person to act in breach of a duty of good faith, impartiality or trust (“acting improperly”), (II) to reward such Person for acting improperly or (III) where such Person would be acting improperly by receiving the money or other thing of value; (c) any Person (whether or not a Government Official) while knowing or having reason to know that all or any portion of the money or other thing of value will be paid, offered, promised or given to or will otherwise benefit, a Government Official in order to influence official action for or against either Party in connection with the matters that are the subject of this Agreement; or (d) any Person (whether or not a Government Official) to reward that Person for acting improperly or to induce that Person to act improperly.

 

(ii)                                  The Licensee Representatives shall not, directly or indirectly, solicit, receive or agree to accept any payment of money or anything else of value in violation of the Anti-Corruption Laws.

 

8.6.2.                  The Licensee Representatives shall comply with the Anti-Corruption Laws and shall not take any action that will, or would reasonably be expected to, cause MedImmune or its Affiliates to be in violation of any such laws.

 

8.6.3.                  Licensee shall promptly provide MedImmune with written notice of the following events:  (i) upon becoming aware of any breach or violation by Licensee or other Licensee Representative of any representation, warranty or undertaking set out in Sections 8.6.1 through 8.6.2 above; or (ii) upon receiving a formal notification that it is the target of a formal investigation by a governmental authority for a Material Anti-Corruption Law Violation or upon receipt of information from any of the Licensee Representatives connected with this Agreement that any of them is the target of a formal investigation by a governmental authority for a Material Anti-Corruption Law Violation.

 

8.6.4.                                                       If MedImmune becomes aware that Licensee (or any other Licensee Representative) is in actual and definite breach or violation of any representation, warranty or undertaking in Sections 8.6.1 through 8.6.2 or of the Anti-Corruption Laws, MedImmune shall have the right, in addition to any other rights or remedies under this Agreement or to which MedImmune may be entitled in law or equity, to (i) take such steps, including by requiring Licensee to agree to such additional measures, representations, warranties, undertakings and other provisions, in each case, as MedImmune believes in good faith are reasonably necessary in order to avoid a potential violation or continuing violation by MedImmune or any of its Affiliates of the Anti-Corruption Laws (“Provisions”) and (ii) terminate this Agreement terminate this Agreement for material breach in accordance with 10.2.2. in the event that:

 

(i)                                     Licensee refuses to agree to all of the Provisions required by MedImmune pursuant to this clause; provided that MedImmune has (I) provided

 

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Licensee an explanation in reasonable detail as to why MedImmune considers such provisions necessary, (II) given Licensee a reasonable opportunity to review and comment on the proposed Provisions and to provide its view as to the necessity or usefulness of these to address the event concerned, and (III) considered such comments in good faith; or

 

(ii)                                  MedImmune reasonably concludes that there is no Provision available that would enable MedImmune or its Affiliates to avoid a potential violation or continuing violation of applicable Anti-Corruption Laws.

 

8.6.5.                  Any termination of this Agreement pursuant to Section 8.6 shall be treated as a termination by MedImmune for Licensee’s breach and the consequences of termination set out in Section 10.2.2 shall apply

 

8.6.6.                  Licensee shall be responsible for any breach of any representation, warranty or undertaking in this Section 8.6 or of the Anti-Corruption Laws by any Licensee Representative.

 

8.6.7.                  MedImmune may disclose the terms of this Agreement or any action taken under this Section 8.6 to prevent a potential violation or continuing violation of applicable Anti-Corruption Laws, including the identity of Licensee or a Licensee Representative and the payment terms, to any governmental authority if MedImmune determines, upon advice of counsel, that such disclosure is necessary.

 

ARTICLE 9
 INDEMNITY

 

9.1.                            Indemnification by Licensee.  Licensee shall indemnity MedImmune, its Affiliates, its or their (sub)licensees and its and their respective directors, officers, employees and agents and defend and save each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including reasonable attorneys’ fees and expenses), (collectively, “Losses”) in connection with any and all suits, investigations, claims or demands of Third Parties (collectively, “Third Party Claims”) arising from or occurring as a result of:  (i) the breach by Licensee of this Agreement; (ii) the gross negligence or willful misconduct on the part of Licensee or its Affiliates or its or their Sublicensees or its or their distributors or contractors or its or their respective directors, officers, employees or agents in performing its or their obligations under this Agreement; or (iii) the Exploitation by Licensee or any of its Affiliates or its or their Sublicensees or its or their distributors or contractors of any Licensed Product or the Licensed Compound in or for the Territory, except, in each case ((i), (ii) and (iii)), for those Losses for which MedImmune has an obligation to indemnify Licensee pursuant to Section 9.2 hereof, as to which Losses each Party shall indemnify the other to the extent of their respective liability. hereof, as to which Losses each Party shall indemnify the other to the extent of their respective liability.

 

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In calculating Losses, the legal duty to mitigate on the part of the Party suffering such Loss is taken into account.

 

 

9.2.                            Indemnification by MedImmune.  MedImmune shall indemnify Licensee, its Affiliates and their respective directors, officers, employees and agents and defend and save each of them harmless, from and against any and all Losses in connection with any and all Third Party Claims arising from or occurring as a result of:  (i) the breach by MedImmune of this Agreement (ii) the gross negligence or willful misconduct on the part of MedImmune or its Affiliates or its or their respective directors, officers, employees or agents in performing its obligations under this Agreement; (iii) the Exploitation of the Licensed Compound by or on behalf of MedImmune or its Affiliates prior to the Effective Date; and (iv) the Exploitation of any Licensed Compound or Licensed Product by or on behalf of MedImmune or its Affiliates following termination of this Agreement and/or any rights granted pursuant to Section 10.4.2; except, in each case ((i) — (iv)), for those Losses for which Licensee has an obligation to indemnify MedImmune pursuant to Section 9.1 hereof, as to which Losses each Party shall indemnify the other to the extent of their respective liability for the Losses.

 

9.3.                            Indemnification Procedures.

 

9.3.1.                  Notice of Claim.  All indemnification claims in respect of a Party, its Affiliates or its or their (sub)licensees or their respective directors, officers, employees and agents shall be made solely by such Party to this Agreement (the “Indemnified Party”).  The Indemnified Party shall give the indemnifying Party prompt written notice (an “Indemnification Claim Notice”) of any Losses or discovery of fact upon which such indemnified Party intends to base a request for indemnification under this Article 9, but in no event shall the indemnifying Party be liable for any Losses that result from any delay in providing such notice.  Each Indemnification Claim Notice must contain a description of the claim and the nature and amount of such Loss (to the extent that the nature and amount of such Loss is known at such time).  The Indemnified Party shall furnish promptly to the indemnifying Party copies of all papers and official documents received in respect of any Losses and Third Party Claims.

 

9.3.2.                  Control of Defense.  The indemnifying Party shall have the right to assume the defense of any Third Party Claim by giving written notice to the Indemnified Party within [***] days after the indemnifying Party’s receipt of an Indemnification Claim Notice.  The assumption of the defense of a Third Party Claim by the indemnifying Party shall not be construed as an acknowledgment that the indemnifying Party is liable to indemnify the Indemnified Party in respect of the Third Party Claim, nor shall it constitute a waiver by the indemnifying Party of any defenses it may assert against the Indemnified Party’s claim for indemnification.  Upon assuming the defense of a Third Party Claim, the indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any

 

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legal counsel selected by the indemnifying Party; provided that it obtains the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed).  In the event the indemnifying Party assumes the defense of a Third Party Claim, the Indemnified Party shall immediately deliver to the indemnifying Party all original notices and documents (including court papers) received by the Indemnified Party in connection with the Third Party Claim.  Should the indemnifying Party assume the defense of a Third Party Claim, except as provided in Section 9.3.3, the indemnifying Party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by such Indemnified Party in connection with the analysis, defense or settlement of the Third Party Claim unless specifically requested in writing by the indemnifying Party.  In the event that it is ultimately determined that the indemnifying Party is not obligated to indemnify, defend or hold harmless the Indemnified Party from and against the Third Party Claim, the Indemnified Party shall reimburse the indemnifying Party for any and all reasonable and verifiable costs and expenses (including attorneys’ fees and costs of suit) and any Losses incurred by the indemnifying Party in accordance with this Section 9 in its defense of the Third Party Claim.

 

9.3.3.                  Right to Participate in Defense.  Any Indemnified Party shall be entitled to participate in the defense of such Third Party Claim and to employ counsel of its choice for such purpose; provided, however, that such employment shall be at the Indemnified Party’s sole cost and expense unless (i) the employment thereof has been specifically authorized in writing by the indemnifying Party in writing (in which case, the defense shall be controlled as provided in Section 9.3.2), (ii) the indemnifying Party has failed to assume the defense and employ counsel in accordance with Section 9.3.2 (in which case the Indemnified Party shall control the defense) or (iii) the interests of the indemnitee and the indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the representation by the same counsel of both Parties under Applicable Law, ethical rules or equitable principles (in which case, the Indemnified Party shall control its defense).

 

9.3.4.                  Settlement.  With respect to any Losses relating solely to the payment of money damages in connection with a Third Party Claim and that shall not result in the applicable indemnitee(s) becoming subject to injunctive or other relief or otherwise adversely affecting the business of the Indemnified Party in any manner and as to which the indemnifying Party shall have acknowledged in writing the obligation to indemnify the applicable indemnitee hereunder, [***].  With respect to all other Losses in connection with Third Party Claims, where the indemnifying Party has assumed the defense of the Third Party Claim in accordance with Section 9.3.2, [***].  If the indemnifying Party does not assume and conduct the defense of a Third Party Claim as provided above, the Indemnified Party may defend against such Third Party Claim; provided that [***].

 

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9.3.5.                  Cooperation.  Regardless of whether the indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party shall and shall cause each indemnitee to, cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith.  Such cooperation shall include access during normal business hours afforded to the indemnifying Party to and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim and making Indemnified Parties and other employees and agents available on a mutually convenient basis to provide additional information and explanation of any material provided hereunder and the indemnifying Party shall reimburse the Indemnified Party for all its, its Affiliates’ and its and their (sub)licensees’ or their respective directors’, officers’, employees’ and agents’, as applicable, reasonable and verifiable out-of-pocket expenses in connection therewith.

 

9.3.6.                  Expenses.  Except as provided above, the costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party and its Affiliates and its and their (sub)licensees and their respective directors, officers, employees and agents, as applicable, in connection with any claim shall be reimbursed on a Calendar Quarter basis by the indemnifying Party, without prejudice to the indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party.

 

9.4.                            Special, Indirect and Other Losses. EXCEPT (i) IN THE EVENT THE WILLFUL MISCONDUCT OR FRAUD OF A PARTY OR OF A PARTY’S BREACH OF ITS OBLIGATIONS UNDER ARTICLE 7, (ii) TO THE EXTENT ANY SUCH DAMAGES ARE REQUIRED TO BE PAID TO A THIRD PARTY AS PART OF A CLAIM FOR WHICH A PARTY PROVIDES INDEMNIFICATION UNDER THIS ARTICLE 9, NEITHER PARTY NOR ANY OF ITS AFFILIATES OR (SUB)LICENSEES SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL OR PUNITIVE DAMAGES OR FOR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY. SHALL BE LIABLE IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY OR OTHERWISE FOR ANY SPECIAL OR PUNITIVE DAMAGES OR FOR LOSS OF PROFITS SUFFERED BY THE OTHER PARTY.

 

9.5.                            Insurance.  Licensee shall have and maintain such types and amounts of insurance covering its Exploitation of the Licensed Products as is (i) [***] and (ii) otherwise required by Applicable Law.

 

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ARTICLE 10
 TERM AND TERMINATION

 

10.1.                     Term and Expiration. This Agreement commences on the Effective Date and, unless earlier terminated in accordance with this Article 10, continues in force and effect until the date of expiration of the Royalty Term in the last country for the last Indication in the Territory, (such period, the “Term”).  Following the expiration of the Royalty Term for a Licensed Product in a country, the grants in Section 2.1 shall become fully-paid, royalty-free, and irrevocable for such Licensed Product in such country.  Upon the expiration of the Term, the grants in Section 2.1 shall become non-exclusive, fully-paid royalty-free, and irrevocable.

 

10.2.                     Termination.

 

10.2.1.           By Licensee for Convenience.  Licensee may terminate this Agreement in its entirety for convenience upon providing ninety (90) days prior written notice to MedImmune.

 

10.2.2.           For Material Breach.  In the event that either Party (the “Breaching Party”) is in material breach in the performance of any of its obligations under this Agreement, in addition to any other right and remedy the other Party (the “Non-Breaching Party”) may have, the Non-Breaching Party may terminate this Agreement in its entirety, by providing ninety (90) days (the “Notice Period”) prior written notice (the “Termination Notice”) to the Breaching Party and specifying the breach and its claim of right to terminate; provided that (i) the termination shall not become effective at the end of the Notice Period if the Breaching Party cures the breach specified in the Termination Notice during the Notice Period (or, if such default cannot be cured within the Notice Period, if the Breaching Party commences actions to cure such breach within the Notice Period and thereafter diligently continues such actions)and (ii) with respect to an uncured material breach consisting of Licensee’s diligence obligations under Section 4.1.1 or Section 4.3.1, as applicable,.  For the purposes of termination “material breach” means a breach of obligations under this Agreement where such breach has a significant adverse effect on the other Party’s rights and obligations under this Agreement, including but not limited to, uncured non-payment of milestones and royalties and acts or omissions that result the inability of a Party to continue with the Development Plan and/or the Commercialization Pan for the Licensed Product.  If there is a bona fide dispute between the Parties as to whether any such material breach has occurred and/or as to the nature of a breach being a material breach, the Parties will resolve such dispute in good faith in accordance with Section 11.5 (Dispute Resolution).  During such dispute resolution procedure to determine whether a material breach has occurred, neither Party may terminate the Agreement.

 

10.2.3.           Termination by MedImmune for Patent Challenge.  In the event that Licensee or any of its Affiliates or Sublicensees, anywhere in the Territory, institutes,

 

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prosecutes or otherwise participates in (or in any way aids any Third Party in instituting, prosecuting or participating in), at law or in equity or before any administrative or regulatory body, including the U.S. Patent and Trademark Office or its foreign counterparts, any claim, demand, action or cause of action for declaratory relief, damages or any other remedy or for an enjoinment, injunction or any other equitable remedy, including any interference, re-examination, opposition or any similar proceeding, alleging that any claim in a Licensed Patent is invalid, unenforceable or otherwise not patentable or would not be infringed by Licensee’s activities absent the rights and licenses granted hereunder, MedImmune shall have the right to immediately terminate this Agreement in its entirety, including the rights of any Sublicensees, upon written notice to Licensee; provided, however, that MedImmune will not have the right to terminate this Agreement under this Section 10.2.3 for any such challenge by any Sublicensee if (i) Licensee terminates the Sublicense within [***]days of MedImmune’s notice to Licensee, or (ii) such challenge is dismissed within [***] days of MedImmune’s notice to Licensee under this Section 10.2.3 and not thereafter continued.

 

10.2.4.           Termination for Insolvency.  In the event that either Party (i) files for protection under bankruptcy or insolvency laws, (ii) makes an assignment for the benefit of creditors, (iii) appoints or suffers appointment of a receiver or trustee over substantially all of its property that is not discharged within [***] days after such filing, (iv) proposes a written agreement of composition or extension of its debts, (v) proposes or is a party to any dissolution or liquidation, (vi) files a petition under any bankruptcy or insolvency act or has any such petition filed against that is not discharged within [***] days of the filing thereof or (vii) admits in writing its inability generally to meet its obligations as they fall due in the general course, then the other Party may terminate this Agreement in its entirety effective immediately upon written notice to such Party.

 

10.3.                     Rights in Bankruptcy.  All rights and licenses granted under or pursuant to this Agreement by Licensee or MedImmune are and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, licenses of right to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code.  The Parties agree that the Parties, as licensees of such rights under this Agreement, shall retain and may fully exercise all of their rights and elections under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction.  The Parties further agree that, in the event of the commencement of a bankruptcy proceeding by or against either Party under the U.S. Bankruptcy Code or any analogous provisions in any other country or jurisdiction, the Party hereto that is not a Party to such proceeding shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, which, if not already in the non-subject Party’s possession, shall be promptly delivered to it (i) upon any such commencement of a bankruptcy proceeding upon the non-subject Party’s written request therefor, unless the Party subject to such proceeding elects to continue to perform all of its obligations under this Agreement, or (ii) if

 

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not delivered under clause (i) above, following the rejection of this Agreement by or on behalf of the Party subject to such proceeding upon written request therefor by the non-subject Party.

 

10.4.                     Consequences of Termination.

 

10.4.1.           Termination of the Agreement.  In the event of a termination of this Agreement in its entirety:

 

(i)                                     By Licensee for Convenience.  Sections 10.4.2 (i) through (viii) will apply.

 

(ii)                                  By Licensee for Material Breach by MedImmune or MedImmune’s insolvency under 10.2.4.  In the event of a Material breach of this Agreement by MedImmune, or MedImmune becomes insolvent, Licensee shall have the option to (a) terminate the Agreement and return the Licensed Technology and Licensed Products to MedImmune in accordance with Sections 10.4.2 (i) through (vii); or (b) retain Licensed Technology and Licensed Product and continue to Exploit the Licensed Products, whereby all payment obligations from Licensee to MedImmune shall be reduced by [***].  Such reduction in milestones and royalties will be Licensee’s sole remedy.  [***].

 

(iii)                               By MedImmune for Material Breach by Licensee or Licensee’s insolvency.  Sections 10.4.2 (i) through (viii) will apply.

 

10.4.2.           Applicable Termination Provisions.  The following shall apply to the termination events as described above:

 

(i)                                     all rights and licenses granted by MedImmune hereunder shall immediately terminate;

 

(ii)                                  Licensee shall and hereby does, and shall cause its Affiliates and its and their Sublicensees to, effective as of the effective date of termination assign to MedImmune all of its right, title and interest in and to (a) each Product Trademark and (b) all Regulatory Documentation (including any Regulatory Approvals) applicable to any Licensed Compound or Licensed Products or any Improvement thereto then owned or Controlled by Licensee or any of its Affiliates; provided that if any such Regulatory Documentation or Regulatory Approval is not immediately transferable in a country, Licensee shall provide MedImmune with all benefit of such Regulatory Documentation or Regulatory Approval, as applicable, and such assistance and cooperation as necessary or reasonably requested by MedImmune to timely transfer such Regulatory Documentation or Regulatory Approval, as applicable, to MedImmune or its designee [***];

 

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(iii)                               all Confidential Information of Licensee directly and solely relating to the Licensed Compound or any Licensed Product shall become Confidential Information of MedImmune;

 

(iv)                              Licensee shall and hereby does, and shall cause its Affiliates and its and their Sublicensees to, effective as of the effective date of termination, grant MedImmune an exclusive, license and right of reference, with the right to grant multiple tiers of sublicenses and further rights of reference, in and to the Licensee Intellectual Property. that are not assigned to MedImmune pursuant to clause (ii) above, to Exploit in the Territory any Licensed Compound or Licensed Product;

 

(v)                                 unless expressly prohibited by any Regulatory Authority, at MedImmune’s written request, Licensee shall and hereby does, and shall cause its Affiliates and its and their Sublicensees to, (a) transfer control to MedImmune [***] clinical studies involving Licensed Products or any Improvements thereto being conducted by or on behalf of Licensee, an Affiliate or a Sublicensee as of the effective date of termination and (b) continue to conduct such clinical studies, [***], for up to [***] months to enable such transfer to be completed without interruption of any such clinical study; provided that (x) MedImmune shall not have any obligation to continue any clinical study unless required by Applicable Law and (y) with respect to each clinical study for which such transfer is expressly prohibited by the applicable Regulatory Authority, if any, Licensee shall continue to conduct such clinical study [***];

 

(vi)                              at MedImmune’s written request, Licensee shall, and cause its Affiliates and its and their Sublicensees to, assign to MedImmune all Licensed Product Agreements, unless, with respect to any such Licensed Product Agreement, such Licensed Product Agreement expressly prohibits such assignment, in which case Licensee (or such Affiliate or Sublicensee, as applicable) shall cooperate with MedImmune in all reasonable respects to secure the consent of the applicable Third Party to such assignment and if any such consent cannot be obtained with respect to a Licensed Product Agreement, Licensee shall, and cause its Affiliates and its and their Sublicensees to, obtain for MedImmune substantially all of the practical benefit and burden under such Licensed Product Agreement, including by (a) entering into appropriate and reasonable alternative arrangements on terms agreeable to MedImmune and (b) subject to the consent and control of MedImmune, enforcing, at MedImmune’s cost and expense and for the account of MedImmune, any and all rights of Licensee (or such Affiliate or Sublicensee, as applicable) against the other party thereto arising out of the breach or cancellation thereof by such other party or otherwise;

 

(vii)                           at MedImmune’ written request, Licensee shall supply to MedImmune such quantities of the Licensed Compound and Licensed Products as MedImmune indicates in written forecasts and orders [***] pursuant to a supply agreement

 

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to be negotiated in good faith between the Parties to Manufacture such Licensed Compound and Licensed Products until [***] (a) [***], (b) [***] (c) [***]; provided that MedImmune promptly commence, and take steps to completed a process to establish such alternative source as soon as reasonably possible; and

 

(viii)                        In the event the Agreement is terminated by Licensee for convenience or by Medimmune for Licensee’s Material Breach, or by MedImmune under Section 10.2.3, Licensee will grant to MedImmune a non-exclusive, royalty free, subslicensable right and license to the Licensee Intellectual Property necessary for and actually used in connection with the Licensed Product to enable MedImmune to further Exploit the Licensed Product.  Should MedImmune desire an exclusive license to the Licensee Intellectual Property in order to Exploit the Licensed Product, the Parties will negotiate in good faith the terms of a royalty-bearing exclusive license to use such Licensee Intellectual Property.  In addition, should such termination take place after the Licensee has received Regulatory Approval of the Product in any Indication, the Parties shall negotiate in good faith a royalty on Net Sales of Licensed Product to Licensee [***].  If the Parties are unable to reach agreement on such terms, then either Party may elect to have such matter resolved subject to the dispute resolution provisions set forth in Section 11.5.

 

(ix)                              In the event Licensee terminates this Agreement for Material Breach by MedImmune, and does not wish to take its option in Section 10.4.1(ii) to continue Exploiting the Licensed Product, and if MedImmune wishes to Exploit the Licensed Product, Licensee will grant to MedImmune a royalty-bearing, non-exclusive or exclusive license as the case may be to the Licensee Intellectual Property and the Parties will [***] in good faith [***].  In addition, should such termination take place after the Licensee has received Regulatory Approval of the Product in an Indication, the Parties shall [***] to Licensee [***].  If the Parties are unable to reach agreement on such terms, then either Party may elect to have such matter resolved subject to the dispute resolution provisions set forth in Section 11.5.

 

10.5.                     Accrued Rights; Surviving Obligations.  Termination or expiration of this Agreement for any reason shall be without prejudice to any rights that shall have accrued to the benefit of a Party prior to such termination or expiration.  Such termination or expiration shall not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement.  Without limiting the foregoing, Articles 1, 7, 9, 10 and Sections 11.2, and 11.5 through 11.11 of this Agreement shall survive the termination or expiration of this Agreement for any reason.

 

ARTICLE 11
 MISCELLANEOUS

 

11.1.                     Force Majeure.  Neither Party shall be held liable or responsible to the other Party or be deemed to have defaulted under or breached this Agreement for failure or delay

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

in fulfilling or performing any term of this Agreement (other than an obligation to make payments) when such failure or delay is caused by or results from events beyond the reasonable control of the non-performing Party, including fires, floods, earthquakes, hurricanes, embargoes, shortages, epidemics, quarantines, war, acts of war (whether war be declared or not), terrorist acts, insurrections, riots, civil commotion, strikes, lockouts or other labor disturbances (whether involving the workforce of the non-performing Party or of any other Person), acts of God or acts, omissions or delays in acting by any governmental authority (except to the extent such delay results from the breach by the non-performing Party or any of its Affiliates of any term or condition of this Agreement).  The non-performing Party shall notify the other Party of such force majeure within [***] days after such occurrence by giving written notice to the other Party stating the nature of the event, its anticipated duration and any action being taken to avoid or minimize its effect.  The suspension of performance shall be of no greater scope and no longer duration than is necessary and the non-performing Party shall use commercially reasonable efforts to remedy its inability to perform.

 

11.2.                     Export Control.  This Agreement is made subject to any restrictions concerning the export of products or technical information from the United States or other countries that may be imposed on the Parties from time to time.  Each Party agrees that it will not export, directly or indirectly, any technical information acquired from the other Party under this Agreement or any products using such technical information to a location or in a manner that at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from the appropriate agency or other governmental entity in accordance with Applicable Law. This Agreement is made subject to any restrictions concerning the export of products or technical information from the United States or other countries that may be imposed on the Parties from time to time.  Each Party agrees that it will not export, directly or indirectly, any technical information acquired from the other Party under this Agreement or any products using such technical information to a location or in a manner that at the time of export requires an export license or other governmental approval, without first obtaining the written consent to do so from the appropriate agency or other governmental entity in accordance with Applicable Law.

 

11.3.                     Assignment.

 

11.3.1.           Neither Party may assign its rights whether by operation of law or otherwise, in whole or in part without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, except that the Party’s shall have the right, without such consent, (i) to perform any or all of its obligations and exercise any or all of its rights under this Agreement through any of its Affiliates or its or their (sub)licensees, and (ii) assign any or all of its rights and delegate any or all of its obligations hereunder to any of its Affiliates or its or their (sub)licensees, or to any successor in interest (whether by merger, acquisition, asset purchase or otherwise) to all or

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

substantially all of the business to which this Agreement relates; provided that MedImmune shall provide written notice to Licensee within [***] days after such assignment.  Any permitted successor of a Party or any permitted assignee of all of a Party’s rights under this Agreement that has also assumed all of such Party’s obligations hereunder in writing shall, upon any such succession or assignment and assumption, be deemed to be a party to this Agreement as though named herein in substitution for the assigning Party, whereupon the assigning Party shall cease to be a party to this Agreement and shall cease to have any rights or obligations under this Agreement.  All validly assigned rights of a Party shall inure to the benefit of and be enforceable by, and all validly delegated obligations of such Party shall be binding on and be enforceable against, the permitted successors and assigns of such Party; provided that such Party, if it survives, shall remain jointly and severally liable for the performance of such delegated obligations under this Agreement.  Any attempted assignment or delegation in violation of this Section 11.3.1 shall be void and of no effect.  Notwithstanding the foregoing, in the event a Party assigns its rights and obligations under this Agreement or otherwise makes Payments from a jurisdiction in which such Party is organized (each an “Assignment”), and [***].

 

11.3.2.           The rights to Information, materials and Intellectual Property: (i) controlled by a Third Party permitted assignee of a Party that immediately prior to such assignment (other than as a result of a license or other grant of rights, covenant or assignment by such Party or its Affiliates to, or for the benefit of, such Third Party); or (ii) controlled by an Affiliate of a Party that becomes an Affiliate through any Change of Control of such Party that were controlled by such Affiliate (and not such Party) immediately prior to such Change of Control (other than as a result of a license or other grant of rights, covenant or assignment by such Party or its other Affiliates to, or for the benefit of, such Affiliate), in each case ((i) and (ii)), [***].

 

11.4.                     Severability.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future law and if the rights or obligations of either Party under this Agreement will not be materially and adversely affected thereby, (i) such provision shall be fully severable, (ii) this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, (iii) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom, and (iv) in lieu of such illegal, invalid or unenforceable provision, there shall be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and reasonably acceptable to the Parties.  To the fullest extent permitted by Applicable Law, each Party hereby waives any provision of law that would render any provision hereof illegal, invalid or unenforceable in any respect. unenforceable in any respect.

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

11.5.                     Dispute Resolution.

 

11.5.1.           If a dispute arises between the Parties in connection with or relating to this Agreement or any document or instrument delivered in connection herewith (collectively, (i) and (ii), a “Dispute”), then either Party shall have the right to refer such Dispute to the Senior Officers for attempted resolution by good faith negotiations during a period of [***] Business Days.  Any final decision mutually agreed to by the Executive Officers shall be conclusive and binding on the Parties.

 

11.5.2.            If such Executive Officers are unable to resolve any such Dispute within such [***] Business Day period, either Party shall be free to institute binding arbitration in accordance with this Section 11.5.2 upon written notice to the other Party (an “Arbitration Notice”) and seek such remedies as may be available.  Upon receipt of an Arbitration Notice by a Party, the applicable Dispute shall be resolved by final and binding arbitration before a panel of three (3) experts with relevant industry experience (the “Arbitrators”).  The arbitration shall be administered by the American Arbitration Association in accordance with the then current Commercial Rules of the American Arbitration Association including the Procedures for Large, Complex Commercial Disputes (including the Optional Rules for Emergency Measures of Protection) (“AAA Rules”), except that any such arbitration must be conducted in accordance with the remainder of this Section 11.5.  Each of Licensee and MedImmune shall promptly select one (1) Arbitrator, which selections shall in no event be made later than [***] days after the notice of initiation of arbitration.  The third Arbitrator shall be chosen promptly by mutual agreement of the Arbitrator chosen by Licensee and the Arbitrator chosen by MedImmune, but in no event later than [***] days after the date that the last of such Arbitrators was appointed. The third appointed arbitrator shall serve as the chairman arbitrator and the chairman shall be a lawyer admitted to practice in New York, USA for at least fifteen (15) years, and who is experienced with disputes in Licensing transactions. The Arbitrators shall determine what discovery will be permitted, consistent with the goal of reasonably controlling the cost and time that the Parties must expend for discovery; provided that the Arbitrators shall permit such discovery as they deem necessary to permit an equitable resolution of the dispute.  The place of arbitration shall be New York, USA at a suitable venue to be agreed by the parties and arbitrators within [***] Business Days of the appointment of the chairman arbitrator.  The proceedings shall be conducted in the English language.  The Parties shall use reasonable efforts to expedite the arbitration if requested by either Party.  The Arbitrators shall, within [***] days after the conclusion of the arbitration hearing, issue a written award and statement of decision describing the essential findings and conclusions on which the award is based, including the calculation of any damages awarded.  The decision or award rendered by the Arbitrators shall be final and non-appealable, and judgment may be entered upon it in accordance with Applicable Law in England and Wales or any other court of competent jurisdiction.  The Arbitrators shall be authorized to award compensatory damages, but shall not be authorized to reform, modify or materially change this Agreement or any other agreements contemplated hereunder.

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

11.5.3.             Each Party shall bear its own counsel fees, costs, and disbursements arising out of the dispute resolution procedures described in this Section 11.5, and shall pay an equal share of the fees and costs of the Expert or Arbitrators, as applicable, and all other general fees related to any arbitration described in Section 11.5.2; provided, however, the Arbitrators shall be authorized to determine whether a Party is the prevailing Party, and if so, to award to that prevailing Party reimbursement for its reasonable counsel fees, costs and disbursements (including expert witness fees and expenses, photocopy charges, or travel expenses), or the fees and costs of the Arbitrators.  Unless the Parties otherwise agree in writing, during the period of time that any arbitration proceeding described in Section 11.5.2 is pending under this Agreement, the Parties shall continue to comply with all those terms and provisions of this Agreement that are not the subject of such pending arbitration proceeding.  Nothing contained in this Agreement shall deny any Party the right to seek injunctive or other equitable relief from a court of competent jurisdiction in the context of a bona fide emergency or prospective irreparable harm, and such an action may be filed and maintained notwithstanding any ongoing arbitration proceeding.  All arbitration proceedings and decisions of the Expert or Arbitrator, as applicable, under this 11.5.3  shall be deemed Confidential Information of both Parties under Article 7.

 

11.6.                     Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of [***] excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction.

 

11.7.                     Notices.

 

11.7.1.           Notice Requirements.  Any notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement shall be in writing, shall refer specifically to this Agreement and shall be deemed given only if delivered by hand or sent by facsimile transmission (with transmission confirmed) or by internationally recognized overnight delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified in Section 11.7.2 or to such other address as the Party to whom notice is to be given may have provided to the other Party in accordance with this Section 11.7.1.  Such Notice shall be deemed to have been given as of the date delivered by hand or transmitted by facsimile (with transmission confirmed) or on the second Business Day (at the place of delivery) after deposit with an internationally recognized overnight delivery service.  Any notice delivered by facsimile shall be confirmed by a hard copy delivered as soon as practicable thereafter.  This Section 11.7.1 is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement.

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

11.7.2.           Address for Notice.

 

If to Licensee:

Kiniksa Pharmaceuticals, Ltd.

Clarendon House

2 Church Street

Hamilton HM 11

Bermuda

Attention: Chief Legal Officer

 

With copies to:

Kiniksa Pharmaceuticals Corp.

15 Walnut Street

Wellesley, MA  02481

Attention: Legal Department

 

If to MedImmune, to:

 

Alliance Management

MedImmune

Milstein Building, Granta Park

Cambridge, CB21 6GH, UK

 

With copies to:

 

Deputy General Counsel, Corporate

MedImmune

Milstein Building, Granta Park

Cambridge, CB21 6GH, UK

 

11.8.                     Entire Agreement; Amendments.  This Agreement, together with the Schedules attached hereto, sets forth and constitutes the entire agreement and understanding between the Parties with respect to the subject matter hereof and all prior agreements, understandings, promises and representations, whether written or oral, with respect thereto are superseded hereby.  Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically set out in this Agreement.  No amendment, modification, release or discharge shall be binding on the Parties unless in writing and duly executed by authorized representatives of both Parties.  In the event of any inconsistencies between this Agreement and any schedules or other attachments hereto, the terms of this Agreement shall control.

 

11.9.                     English Language.  This Agreement shall be written and executed in and all other communications under or in connection with this Agreement shall be in, the English language.  Any translation into any other language shall not be an official version thereof

 

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and in the event of any conflict in interpretation between the English version and such translation, the English version shall control. in the event of any conflict in interpretation between the English version and such translation, the English version shall control.

 

11.10.              Equitable Relief.  In the event of a breach or threatened breach of any provision of Article 7, the non-breaching Party shall be authorized and entitled to seek from any court of competent jurisdiction injunctive relief, whether preliminary or permanent, which rights shall be cumulative and in addition to any other rights or remedies to which such non-breaching Party may be entitled in law or equity.  Both Parties agree to waive any requirement that the other (i) post a bond or other security as a condition for obtaining any such relief and (ii) show irreparable harm, balancing of harms, consideration of the public interest or inadequacy of monetary damages as a remedy.  Nothing in this Section 11.10 should be construed, to limit either Party’s right to equitable relief or any other remedy for a breach of any other provision of this Agreement.

 

11.11.              Waiver and Non-Exclusion of Remedies.  Any term or condition of this Agreement may be waived in writing at any time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set out in a written instrument duly executed by or on behalf of the Party waiving such term or condition.  The waiver by either Party hereto of any right hereunder or of the failure to perform or of a breach by the other Party shall not be deemed a waiver of any other right hereunder or of any other breach or failure by such other Party whether of a similar nature or otherwise.  The rights and remedies provided herein are cumulative and do not exclude any other right or remedy provided by Applicable Law or otherwise available except as expressly set out herein.

 

11.12.              No Benefit to Third Parties.  Except for any rights and immunities granted in this Agreement to any Affiliates, the Contracts (Rights of Third Parties) Act 1999 shall not apply to this Agreement.  Except as expressly provided in Article 10, no Person who is not a party to this Agreement (including any employee, officer, agent, representative or subcontractor of either Party) shall have the right (whether under the Contracts (Rights of Third Parties) Act 1999 or otherwise) to enforce any provision of this Agreement which expressly or by implication confers a benefit on that Person without the express prior agreement in writing of the Parties, which agreement must refer to this Section 11.12.

 

11.13.              Further Assurance.  Each Party shall duly execute and deliver or cause to be duly executed and delivered, such further instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and instruments, as may be necessary or as the other Party may reasonably request in connection with this Agreement or to carry out more effectively the provisions and purposes hereof or to better assure and confirm unto such other Party its rights and remedies under this Agreement.

 

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Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

11.14.              Relationship of the Parties.  MedImmune, on the one hand and Licensee, on the other hand, shall be independent contractors and that the relationship between the two Parties shall not constitute a partnership, joint venture or agency.  Neither MedImmune, on the one hand, nor Licensee, on the other hand, shall have the authority to make any statements, representations or commitments of any kind or to take any action, that will be binding on the other, without the prior written consent of the other Party to do so.  All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such first Party.

 

11.15.              Non-Solicitation of Employees.  Commencing on the Effective Date and for a period of [***] thereafter, neither Party shall, directly or indirectly, actively recruit or solicit any then-current employee of the other Party with whom such Party has come into contact or interacted for the purposes of performing this Agreement, without the prior consent of the other Party.  For purposes of this Section, “solicit” shall be deemed not to include: (i) circumstances where an employee of one Party or any of its Affiliates initially contacts the other Party or any of such Party’s Affiliates seeking employment; or (ii) general solicitations of employment not specifically targeted at such employees.

 

11.16.              References.  Unless otherwise specified, (i) references in this Agreement to any Article, Section or Schedule shall mean references to such Article, Section or Schedule of this Agreement, (ii) references in any Section to any clause are references to such clause of such Section and (iii) references to any agreement, instrument or other document in this Agreement refer to such agreement, instrument or other document as originally executed or, if subsequently amended, replaced or supplemented from time to time, as so amended, replaced or supplemented and in effect at the relevant time of reference thereto.

 

11.17.              Construction.  Except where the context otherwise requires, wherever used, the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or).  Whenever this Agreement refers to a number of days, unless otherwise specified, such number refers to calendar days.  The captions of this Agreement are for convenience of reference only and in no way define, describe, extend or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement.  The term “including,” “include,” or “includes” as used herein shall mean including, without limiting the generality of any description preceding such term.  The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party hereto. limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement.  The term “including,” “include,” or “includes” as used herein shall mean including, without limiting the generality of any description preceding such term.

 

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The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party hereto.

 

11.18.              Counterparts.  This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.  This Agreement may be executed by facsimile, PDF format via email or other electronically transmitted signatures and such signatures shall be deemed to bind each Party hereto as if they were original signatures electronically transmitted signatures and such signatures shall be deemed to bind each Party hereto as if they were original signatures.

 

[SIGNATURE PAGE FOLLOWS.]

 

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THIS AGREEMENT IS EXECUTED by the authorized representatives of the Parties as of the date first written above.

 

	
MEDIMMUNE, LIMITED
    	
KINIKSA   PHARMACEUTICALS, LTD.
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
[***]
    	
By:
    	
/s/ Thomas Beetham
    
	
 
    	
 
    
	
Name:
    	
[***]
    	
Name:
    	
Thomas Beetham
    
	
 
    	
 
    
	
Title:
    	
[***]
    	
Title:
    	
Executive Vice   President
    

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

SCHEDULES

 

	
Schedule 1.39
    	
 
    	
Exclusive Licensed Patents
    
	
 
    	
 
    	
 
    
	
Schedule 1.56
    	
 
    	
In-License Agreements
    
	
 
    	
 
    	
 
    
	
Schedule 1.74
    	
 
    	
Non-Exclusive Licensed Patents
    
	
 
    	
 
    	
 
    
	
Schedule 1.104
    	
 
    	
Transition Activities
    
	
 
    	
 
    	
 
    
	
Schedule 3.1
    	
 
    	
Purchased Assets
    
	
 
    	
 
    	
 
    
	
Schedule 8.2.3
    	
 
    	
Actions for Exclusive Licensed Patents as at the Effective Date
    

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule 1.39

 

[***]

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule 1.56

 

[***]

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule 1.74

 

[***]

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule 1.104

Transition Activities

 

[***]

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Schedule 3.1 Inventory

 

[***]

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

 

 

Confidential Treatment Requested by Kiniksa Pharmaceuticals, Ltd.

 

Schedule 8.2.3

 

[***]

 

Confidential Portions of this Exhibit marked as [***] have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission.

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