Provision Language
Definitions
“Additional Research” – early structure-activity relationship work on Hits identified under each of the three Research Projects (First Amendment, Cl. 2).
2. CONDUCT OF THE RESEARCH
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2.4 The Research.
(a) During the Research Term, Company shall conduct each of the Research Projects in accordance with this Agreement and the Research Plan. Company shall disclose the results of all Research activities to the Foundation in accordance with Section 2.7. Company may select, after disclosing the applicable criteria to the Foundation, one or more compounds that have been validated in secondary assay(s) and have suitable in vitro potency, or otherwise meet the criteria set forth in the Research Plan (or otherwise mutually agreed upon by the parties) for further evaluation (each such compound being hereinafter referred to as a “Hit” ), following which, as more fully described in the Research Plan, Company shall: (i) assess each Hit (and, as the parties deem appropriate consistent with the Research Plan, any analog, derivative or formulation thereof) with the goal of identifying one or more compounds that have suitable properties for administration to humans (each such compound being hereinafter referred to as a “Lead Candidate” ); and (ii) evaluate and, if appropriate based on such evaluation, optimize each Lead Candidate for therapeutic administration to humans.
(b) The parties shall mutually agree upon a strategy for medicinal chemistry follow-up on Lead Candidates and further pharmacology studies, formulation development, safety and toxicity studies, dosing studies or other preclinical work at Company, or at Company’s option, through external collaboration or licensing with a Third Party. As promptly as practicable after identification of one or more Lead Candidates, Company shall provide the Foundation with total cost estimates for continued Lead Optimization and development of such Lead Candidates, and the Foundation may elect to fund, in the form of cash payments to Company, some, all or none of this work upon reasonable advance notice to Company . In addition, the Foundation may act to secure funding from Third Parties, and/or assist Company to obtain alternative sources of external funding, and in each case such funding would be administered through and governed by this Agreement as specified in a written agreement with any such Third Party, such Agreement to specify the impact of such alternative sources of funding on the payment obligations of the Company under Section 4.3.
(c) Company shall disclose the results of all Research activities regarding Hits and Lead Candidates to the Foundation in accordance with Section 2.7, and the parties shall consult with each other with the objective of identifying at least one Drug Candidate suitable for progression to the preparation and filing of an IND in the Field and, contingent on the effectiveness of such IND, progressing such Drug Candidate into human clinical trials in the most expeditious manner.
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2.7 Communication; Research Reports. On a regular basis during the Research Term (but no less frequently than [**]), the parties shall conduct meetings, either in person or by telephone or video conference, to discuss the progress of the Research and strategies for achieving the objectives of the Research in an expeditious manner . Company shall keep the Foundation fully informed as to all results and discoveries (including, without limitation, assay development and all Hits and potential Lead Candidates and Drug Candidates) made in the course of performing activities under the Research Program at these meetings . In furtherance of the foregoing, on a [**] basis, Company shall prepare, and deliver to the Foundation no later than [**] days after the conclusion of [**] during the Research Term, a reasonably detailed written summary report of the results and progress of the Research during [**] (each, a “Research Report” ) . In addition, the Foundation may, at its option, during the Research Term, schedule up to [**] formal program review meetings with Company personnel and those of Foundation’s Third Party advisors who (i) have agreed to confidentiality restrictions substantially similar to those contained in this Agreement, and (ii) are reasonably acceptable to Company . Such meetings will be held at the times and locations mutually agreed upon by the parties . The purpose of such meetings will be to review the progress of the Research relative to the Research Plan.
3. DEVELOPMENT OF PRODUCTS.
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3.3 Disclosure Regarding Company Efforts. Company will keep the Foundation appropriately informed about clinical trial progress and commercialization efforts with respect to Products, and in any event, Company shall provide the Foundation with [**] written reports summarizing any significant development or commercialization events that have occurred during the applicable [**]-month period, provided that such reports may be incorporated into any Research Reports then being prepared and delivered under Section 2.7.
4. PAYMENTS
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4.4 Reporting of Product Revenues. From and after such time as Company first receives any Product Revenues and until such time as Company has paid in full the amount due under Section 4.3 (if any), Company shall deliver to the Foundation (or a Third Party designated in writing by the Foundation) quarterly written reports of Product Revenues received by Company and its Affiliates, which reports shall indicate the total Product Revenues received. Company shall keep, and shall cause its Affiliates to keep, complete and accurate records pertaining to the receipt of Product Revenues in sufficient detail to permit the Foundation to confirm the accuracy of such reports.
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4.7 Audits. The Foundation shall have the right to cause an independent, certified public accountant reasonably acceptable to Company to audit the records of Company and its Affiliates to confirm the accuracy of Company’s reports of Product Revenues for a period covering not more than the preceding [**] years . Such audits may be exercised during normal business hours upon reasonable prior written notice to Company and no more than [**] per year . Prompt adjustments shall be made by the parties to reflect the results of such audit. The Foundation shall bear the full cost of such audit unless such audit discloses an underreporting of Product Revenues by Company of more than [**]% during any calendar year, in which case, Company shall bear the full cost of such audit.
AMENDMENT No. 1 TO SPONSORED RESEARCH AGREEMENT
3. Research Reports. In lieu of the Research Reports that would otherwise be due from PTC under Section 2.7 of the Agreement during the Research Term, PTC shall make the following reports: (a) [**] months following the Amendment Effective Date, a summary report showing progress with respect to the Additional Research and identifying any limiting factors or other considerations that may affect completion of the Additional Research (the “Mid-Stage Report”), and (b) within [**] days of completion of the Additional Research, a final report containing the recommendations by PTC for selection of compounds for further research and potential Lead Optimization (the “Final Report”). In addition, PTC will make itself available for Research Team conference calls following its internal research update meetings, which are expected to occur every [**] weeks, for informal discussion of the program.
AMENDMENT No. 2 TO SPONSORED RESEARCH AGREEMENT
4. Research Reports and Access to Information. In lieu of the Research Reports and other information and communications that would otherwise be due from Company under Sections 2.4 and 2.7 of the Agreement during the Research Term, or pursuant to Section 3 of the First Amendment, Company shall make the following reports and information available:
(a) Information. Promptly after the Second Amendment Effective Date, Company will establish a shared electronic collaboration space that enables designated representatives of Foundation to access and provide information on the progress of the DC Research. For clarity, the persons listed on Exhibit SA-5 of this Second Amendment are, as of the Second Amendment Effective Date, designated representatives of Foundation for such purpose. Foundation may remove any such designated representative at any time upon written notice to Company. Foundation may also appoint new designated representatives subject to the conditions specified in Second Amendment Section 18(f). Such information shall include agendas and minutes of team meetings, presentations, correspondence between the parties, and data and reports from the DC Research, as well as monthly FTE reports (which reports shall be posted no later than [**] days after the end of the applicable month and shall list the number of hours that each person (identified by name and general job description (e.g., “chemist”)) worked on the DC Research during such month). Company shall post data from the ongoing conduct of the DC Research to such electronic collaboration space on a regular and continuing basis; provided, that (i) the frequency of such posting may be adjusted by consent of the JSC, and (ii) in the absence of any such consent, Company shall post such data at the same time and in the same format as made available to Company’s internal project leadership team (a sample of which format is appended as Exhibit SA-2). Company shall have the right to limit access to sensitive data (by way of example, but not limited to, non-public chemical structures) to a mutually-agreeable list of representatives of Foundation. Such list, as of the Second Amendment Effective Date, is set forth on Exhibit SA-6. Foundation may remove any such representative from such list at any time upon written notice to Company. Foundation may also add new representatives to such list subject to the conditions specified in Second Amendment Section 18(f).
(b) Reports. (i) Within [**] days of the end of each [**] or at least [**] prior to any [**] meeting of the JSC (whichever comes first), or such other regular times as the parties may otherwise agree, Company shall provide to Foundation with a reasonably detailed written summary report of the results (including Company’s analysis thereof) and progress of the DC Research during such [**] and expectations for DC Research to be conducted during the immediately subsequent [**], and (ii) within [**] days of completion of the DC Research or termination of the DC Research on account of a Special Termination or pursuant to Article 7 of the Agreement, Company shall provide to Foundation a final report summarizing the status and accomplishments of the DC Research and containing the recommendations by Company with respect to selection of a Development Candidate with respect to one Research Project and for further research towards a potential Development Candidate with respect to the other Research Project. Company will promptly provide all information reasonably requested by Foundation regarding the DC Research described in any report provided pursuant to this Section 4(b) of this Second Amendment.
(c) Availability for Communications. In addition to the foregoing and to Company’s obligations under Section 2.5 of the Agreement, Company will make appropriate representatives of the scientific team conducting the DC Research available for conference calls and meetings with appropriate representatives of Foundation at reasonable times and places for informal discussion of the progress of the DC Research. In further addition, the Foundation may, at its option, during the Term, schedule up to [**] formal program review meetings with Company personnel and those of Foundation’s Third Party advisors who (i) have been designated by Foundation in compliance with Second Amendment Section 18(f), and (ii) are reasonably acceptable to Company. Such meetings will be held at the times and locations mutually agreed upon by the parties. The purpose of such meetings will be to review the progress of the Research relative to the Research Plan.
6. Information Concerning other SMA Efforts. The parties acknowledge that a goal of Foundation in funding the DC Research is to identify and advance the compound most likely to advance rapidly to human clinical trials directed towards the treatment, mitigation or prevention of SMA, and that therefore the parties may have an interest in negotiating funding of other research and development efforts conducted by Company instead of, or in addition to, the Research Projects. In furtherance of this objective, Company will make available to Foundation on a confidential basis regular reports with respect to progress and summary data with respect to Company’s other internal efforts directed towards the approval of a compound for the treatment, mitigation or prevention of SMA. In addition, Company will make available to Foundation general product profiles showing, on a comparative basis, the status of potential Development Candidates from the DC Research against other potential therapeutic agents being pursued by Company in the treatment, mitigation or prevention of SMA (whether internal or in collaboration with Third Parties) in the format provided in Exhibit SA-3 to this Second Amendment; provided, however, that such obligation shall not require Company to breach any condition of any agreement in effect as of the Second Amendment Effective Date. Company will use Commercially Reasonable Efforts to ensure that it is able to share the information specified in this Second Amendment Section 6 with respect to any Third Party agreements entered in to following the Second Amendment Effective Date, and may only enter into such Third Party Agreements if it notifies Foundation reasonably in advance of entering in to such agreements to allow further discussions and potential negotiations with such Third Party with respect to such sharing of information. If, based on information made available pursuant to this Second Amendment Section 6, either party is of the opinion that a change in funding or approach may be advisable, then such party may propose to the JSC, and the JSC shall conduct, an evaluation of the merits of such proposed change that includes a report and recommendation thereon to the parties.
7. Foundation Access to Company Meetings Following Declaration of a Development Candidate. Following the JSC’s determination that a particular compound is a Development Candidate and through the earlier of Regulatory Approval, abandonment of Development of such Development Candidate, or the granting of a Reversionary License to Foundation, Company shall invite a representative of Foundation (to be designated by Foundation) to observe regularly scheduled monthly meetings of the Company team charged with Development of such Development Candidate, subject to the terms of Second Amendment Section 18(f); provided, however, that failure of Foundation to designate such representative or failure of such representative to attend such meetings shall not constitute a breach of this Agreement. Company may request that Foundation representative recuse themselves from such meetings (or portions of such meetings) (a) that do not relate specifically to a Development Candidate, (b) to prevent the breach of an applicable legal or regulatory obligation of confidentiality or privacy or avoid a conflict of interest, (c) to protect the attorney-client privilege, and/or (d) to preserve intellectual property rights.
10. Partnering
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(b) During any period in which Company is not actively pursuing Collaboration Activities, Company shall report to the JSC on [**] basis Company’s views of the partnering/collaboration marketplace for drug discovery and lead optimization efforts at a similar stage to efforts under the DC Research or, if a Development Candidate has been declared, the partnering/collaboration marketplace for development candidates at a similar stage of development to such Development Candidate.
11. Company Payments to Foundation and Related Provisions
Sections 4.3, 4.4, 4.5, 4.6 and 4.7 of the Agreement (captioned “Milestone Donation by Company”, “Reporting of Product Revenues”, “Exchange Rate; Manner and Place of Payment”, “Taxes” and “Audits”, respectively) shall, as of the Second Amendment Effective Date, be amended and restated as follows:
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“4.4 Reporting of Net Sales and PTC License Income. From and after such time as Company first receives any Net Sales or PTC License Income and until such time as Company has paid in full the amount due under Section 4.3 of the Agreement (if any), Company shall deliver to the Foundation (or a Third Party designated in writing by the Foundation) quarterly written reports of Net Sales and PTC License Income received by Company and its Affiliates, which reports shall (a) separately indicate the total Net Sales and PTC License Income received, (b) show how Net Sales were calculated from the gross amounts received by Company and its Affiliates, with each deduction from gross amounts being separately itemized, (c) show how PTC License Income was calculated, and (d) itemize any amounts received by Company and its Affiliates from a Licensee that were excluded from PTC License Income and the rationale for such exclusion. Company shall keep, and shall cause its Affiliates to keep, complete and accurate records pertaining to the receipt of Net Sales and PTC License Income in sufficient detail to permit the Foundation to confirm the accuracy of such reports.
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“4.7 Audits. The Foundation shall have the right to cause an independent, certified public accountant reasonably acceptable to Company to audit the records of Company and its Affiliates to confirm the accuracy of (a) Company’s reports of Net Sales and PTC License Income, (b) Company’s accounting pursuant to Second Amendment Section 2(d) or 4(a) of its use of internal resources and the out-of-pocket expenses that Company incurred in accordance with the Research Plan, (c) the amount specified in Second Amendment Section 2(d) as the amount spent by Company on DC Research between [**] and [**], and (d) Company’s invoice pursuant to Second Amendment Section 2(d) with respect to the amounts it spent between [**] and the Second Amendment Effective Date, in each case for a period covering not more than the preceding [**] years. Such audits may be exercised during normal business hours upon reasonable prior written notice to Company and no more than [**] per year. If an audit reveals that Company has underpaid any amount due to the Foundation, overcharged Foundation pursuant to Second Amendment Section 2(d) or overstated in Second Amendment Section 2(d) the amount that it spent on DC Research between [**] and [**], Company shall pay all such amounts to the Foundation within thirty (30) days of receiving the Foundation’s audit report. The Foundation shall bear the full cost of such audit unless such audit discloses (i) an underreporting of Net Sales or PTC License Income by Company of more than [**]% during any calendar year, (ii) an over-reporting of internal resources and the out-of-pocket expenses of more than [**]% during any calendar year or (iii) that Second Amendment Section 2(d) over-states by more than [**]% the amount that Company spent on DC Research between [**] and [**], in which case, Company shall bear the full cost of such audit.”
18. Miscellaneous
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(c) Testing by Foundation Partners. Upon the Foundation’s request, and under the supervision of the JSC with respect to design of the testing to be done and selection of appropriate compounds and (only during the Research Term) consistent with the then-current Research Plan, Company shall provide reasonable quantities of compounds synthesized or tested during the DC Research (“Research Compounds”) to other Foundation partners for testing on a blinded basis in assays already being run by such Foundation partner, provided that (i) after the end of the Research Term, such testing shall be limited to Reversion Candidates and shall not include, without the prior written consent of Company, any Development Candidate that is, at such time, the subject of a Company Clinical Trial, (ii) the Foundation or such Foundation partner shall disclose the results of such screening to Company and (iii) such testing shall be performed pursuant to a separate materials transfer agreement reasonably acceptable to Company and negotiated in good faith by the parties prior to provision of any Research Compounds or related information, which agreement shall contain reasonable and customary terms to protect the parties’ respective intellectual property rights. Without limiting the generality of the foregoing, each such materials transfer agreement shall provide that in no event shall any Research Compound become the property of the Foundation partner, nor shall any Research Compound become subject to royalty or other reach-through payment obligations to the Foundation partner as a result of such testing by such Foundation partner, and shall also require that a summary of the results of theresearch be provided to the Foundation. Foundation shall share all such research results with the JSC on a regular basis.
(d) Financial Reporting. For so long as it is not a publicly-traded company, (i) Company shall provide Foundation, within [**] days after the end of each of the first three quarters of the fiscal year of the Company, with a copy of the financial report for such quarter that Company generates for its investors, and (ii) Company shall use best its efforts to provide within [**] days, but in no event more than [**] days, after the end of the fiscal year of the Company, a copy of the annual audit report for such year that the Company generates for its investors. The financial reports provided pursuant to Second Amendment Section 18(d) (i) shall be prepared in accordance with generally accepted accounting principles consistently applied, and duly certified (subject to year-end audit adjustments) by the chief financial officer of the Company, and the annual audit report provided pursuant to Second Amendment Section 18(d)(ii) shall be duly certified by independent public accountants of recognized standing. [**], Company may request Foundation consider amending the provisions of this Second Amendment Section 18(d), and Foundation shall consider such request in good faith.