Provision Language
Definitions
“AMC Countries” means those countries which are eligible to participate in the COVAX AMC from time to time (listed in Annex E as at the Effective Date).
“Pandemic Period” means the period of time beginning on 30 January 2020, when the World Health Organization (or “WHO”) declared COVID-19 to be a Public Health Emergency of International Concern (or “PHEIC”), and ending on the earlier of (1) the date on which WHO declares that the COVID-19 PHEIC is over or (2) the date determined by CEPI, in its reasonable discretion in consultation with the Awardee and based on epidemiological data published by WHO, including.
16. Commercial Benefits
16.1 Commercial Benefits. CEPI is required by its own funders to obtain a share of any Awardee’s Commercial Benefits as a contribution to support CEPI’s programme activities. For clarity, examples of Commercial Benefits include the sales of a Project Vaccine at market prices, commercial licensing of Project IP, receipt of government–granted incentives such as Priority Review Vouchers and revenue from the commercialisation of combination, derivative or follow–on products (including antibody products, assays and vaccines) or application of production technology resulting in whole or part from CEPI funding.
16.2 Waiver of Commercial Benefits. In consideration for Awardee’s acceptance and compliance with the provisions of Clause 15, CEPI agrees to forgo any share of potential Commercial Benefits otherwise applicable under Sub–Clause 16.1 during the Pandemic Period. Following the Pandemic Period and except during a period of regional Outbreak pursuant to Section 15.5.(c), the Awardee shall promptly notify CEPI of any Commercial Benefits in respect of any sales of a Project Vaccine for which CEPI provides funding through Phase 2 clinical studies (or any Project Vaccine if (i) this Agreement is terminated by CEPI pursuant to Clause 20.2 or Clause 20.3(c) – (e); or (ii) Awardee does not accept further funding from CEPI offered on similar terms to those set out in this Agreement) in any country other than an AMC Country. Following receipt by CEPI of any such notice, Awardee and CEPI shall discuss the sharing of such Commercial Benefits in the Field, commensurate with CEPI’s funding contributions and stage of investment, through an appropriate mechanism agreed in good faith by the Parties within ninety (90) days.
Amendment Agreement
1.5 Waiver of Commercial benefits. Clause 16.2 of the Annex A: Terms and Conditions shall be amended to retain only the first sentence, and so shall read as follows:
1.5.1 In consideration for Awardee’s acceptance and compliance with the provisions of Clause 15, CEPI agrees to forgo any share of potential Commercial Benefits otherwise applicable under Sub-Clause 16.1 during the Pandemic Period.
1.6 Commercial Benefits Following Pandemic Period. Clause 16.3 of the Annex A: Terms and Conditions shall be inserted as follows (such that it reflects the second and third sentence of the previous Clause 16.2, with modifications):
1.6.1 Following the Pandemic Period and except during a period of regional Outbreak pursuant to Section 15.5.(c), theAwardee shall promptly notify CEPI of any Commercial Benefits, including in respect of any sales of a ProjectVaccine for which CEPI provides funding beyond the completion of Phase 2 clinical studies (or any Project Vaccine if(i) this Agreement is terminated by CEPI pursuant to Clause 20.2 or Clause 20.3(c) – (e); or (ii) Awardee does not accept further funding from CEPI offered on similar terms to those set out in this Agreement) in any country other than an AMC Country. Following receipt by CEPI of any such notice, Awardee and CEPI shall work in good faith to effect the sharing of such Commercial Benefits in the Field according to terms in Annex I for a Project Vaccine for which CEPI has provided funding.
1.8 Annex I. Commercial Benefits. A new annex, “Annex I. Commercial benefits”, shall be added as follows:
Subject to Clause 16.3 of this Agreement the following terms would apply to the sharing of Commercial Benefits in respect of any sales or other exploitation of a Project Vaccine for which CEPI provides at least **% of funding for phase 3 clinical studies including all costs approved by CEPI associated with the phase 3 study and any associated manufacturing and process development costs during phase 3 that are required to generate data for inclusion in a Biological License Application (BLA) to the U.S Food and Drug Administration (FDA) or equivalent (“Phase 3 Funding”):
Royalties: [***]% of Net Sales on amounts above $[***]/annum, excluding the sales of Project Vaccine allocated under VBI’s Volume Commitments to CEPI specified in Annex H.
Anti-Stacking Provision: In the event that VBI requires a royalty-bearing license to third party intellectual property,the royalties owed to CEPI will be reduced by [***]% of the royalties payable to a third party, provided that the maximum permitted reduction in CEPI’s royalty shall be [***]%.
Sublicensing: In the event of Sublicensing, CEPI would receive [***]% of any and all compensation paid by a Sublicensee to Awardee of Affiliate, including but not limited to: i) upfront payments, ii) development milestones, iii) earn-outs, iv) royalties paid to VBI or its Affiliate, v) the value of any premium paid above fair market value for any Sublicensing arrangement that includes the purchase or option to purchase shares in VBI or Affiliate. CEPI is not entitled to royalties on Net Sales of Project Vaccine sold by a Sublicensee.
If CEPI provides less than [***]% of Phase 3 Funding the sharing of Commercial Benefits in respect of any sales or other exploitation of a Project Vaccine, the royalties and sublicensing payments above which are applicable to at least [***]% ofPhase 3 Funding shall be adjusted as per the tiers indicated below. For the avoidance of doubt the anti-stacking reduction shall continue to apply without adjustment:
- equal to or less than [***]% of Phase 3 Funding: no royalties or sublicensing payments shall apply;
- greater than [***]% and less than [***]% of Phase 3 Funding: a royalty of [***]% of Net Sales and/or a [***]% share of any Sublicensing shall apply;
- equal to [***]% of Phase 3 Funding: a [***]% royalty of Net Sales and/or a [***]% share of any Sublicensing shall apply; and
- greater than [***]% and less than [***]% of Phase 3 Funding: the rates applicable to at least [***]% of Phase 3 Funding, multiplied by a discounted factor determined according to the following formula: [***]% + [***]% for every[***]% increase in Phase 3 funding above [***]%.
As an example for the above tier applicable to Phase 3 Funding greater than [***]% and less than [***]%, if CEPI were to provide [***]% of Phase 3 Funding, the following would apply:
- a royalty payment of [***]% (i.e., [***]% multiplied by a discount factor of [***], calculated as follows: [***]; and/or
- a Sublicensing payment of [***]% (i.e., [***]% multiplied by a discount factor of [***], calculated as follows: [***].