Provision Language
Definitions
“Available Product” shall mean a human therapeutic product that (a) has previously received final approval from the FDA for marketing in the United States and (b) is suitable for administration to patients in its currently marketed formulation for the treatment of spinal muscular atrophy.
“Company Base IP” shall mean any new and useful composition of matter, process, product by process, machine or manufacture, know-how, discovery, improvement, Patent, or other intellectual property (“IP”) or any new and useful improvement thereof, whether or not patentable, which (i) is discovered, conceived, developed or first reduced to practice by or on behalf of Company as of or prior to the Effective Date, (ii) is an improvement to any IP discovered, conceived, developed or first reduced to practice by or on behalf of Company as of or prior to the Effective Date, regardless of when such improvement is discovered, conceived, developed or first reduced to practice, or (iii) is discovered, conceived, developed or first reduced to practice by, or otherwise comes under the Control of, Company during the Research Term and does not constitute Data or a Research Invention.
“Company Know-How” shall mean Information that: (a) is developed or acquired by or on behalf of Company in the course of performing the Research; and/or (b) is otherwise Controlled by Company and is directed to any Drug Target, Hit, Lead Candidate, Drug Candidate or Product first identified or synthesized in the conduct of the Research, formulations of any of the foregoing, and/or processing technology with respect thereto; provided, however, that the Company Know-How excludes the Company Patents and the Company Base IP.
“Company Patents” shall mean Patents that: (a) claim Information developed or acquired by or on behalf of Company in the course of performing the Research; and/or (b) are otherwise Controlled by Company and claim any Drug Target, Hit, Lead Candidate, Drug Candidate or Product first identified or synthesized in the course of the Research, formulations of any of the foregoing, and/or processing technology with respect thereto; provided, however, that the Company Patents exclude the Company Base IP and the Company Know-How.
“Company Technology” shall mean Company Know-How and Company Patents.
“Data” means all data generated as a result of the Research or as a result of Company’s or its Affiliate’s or Licensee’s research, Development, or commercialization of Drug Candidates or Products. (Second Amendment)
“Drug Candidate” shall mean a Hit, Lead Candidate or any metabolite, prodrug, solvate (including without limitation any hydrate), ester, salt, stereoisomer, racemate, tautomer or polymorph of such Hit or Lead Candidate that is first synthesized or identified in the conduct of the Research and that exhibits desired levels of activity against the applicable Drug Target.
“Drug Target” shall mean a gene or other biological target described in the Research Plan or mutually agreed upon by both parties as having potential application for the identification and development of Drug Candidates for the prevention or treatment of SMA.
“Hit” – 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 (Cl. 2.4(a)).
“Lead Candidate” – compounds that have suitable properties for administration to humans (Cl. 2.4(a)).
“Reversion Candidate” means (a) each Development Candidate and (b) each Lead Candidate designated as such pursuant to Second Amendment Section 5(b)(vi) or 5(c)(i). [Second Amendment]
RECITALS
WHEREAS , it is the further intent of the Foundation and Company that patents and other intellectual property developed by Company as a result of the Research shall be retained by Company, but that a mechanism be provided for transfer of rights to the patents and other intellectual property developed by Company as a result of the Research and relating to a particular Research Project (as defined below) to the Foundation if Company elects not to pursue commercial development of any drug candidates identified during such Research Project.
6. OWNERSHIP AND USE OF DATA AND INTELLECTUAL PROPERTY
6.1 Ownership; Reversionary License
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(c) Reversionary Licenses to Data and Company Technology. With respect to Research Projects in which [**], in the event that:
(i) Company elects not to continue the Research or subsequent development of at least one Drug Candidate or Product relating to any Research Project in the Field; or
(ii) Company fails to use commercially reasonable efforts to conduct development and commercialization of at least one commercially viable Drug Candidate arising in the Field, and is unable to remedy such failure to comply within [**] days after notice thereof from the Foundation; or
(iii) Company is otherwise in material breach of this Agreement with respect to such Research Project and is unable to remedy such breach within [**] days after notice of such breach from the Foundation;
then, in any such case, Company shall, and it hereby does, grant to the Foundation an exclusive worldwide license, including the right to grant sublicenses, under any Company Technology resulting from such Research Project that relates to a pharmaceutical preparation, composition of matter, method of manufacture and/or method of use of such Drug Candidate Lead Candidates, Drug Candidates and Products in the Field, solely for the purpose of researching, developing, making, having made, using, selling, having sold, offering for sale and importing Drug Targets, Lead Candidates, Drug Candidates and Products in the Field (each such license with respect to a particular Research Project being referred to herein as a “Reversionary License”), and use of such Data by the Foundation or its sublicensee(s) as reasonably necessary or appropriate to exploit such Reversionary License shall not represent a violation of Section 5.1 above; provided, however, that in the case of Research Project B such license shall not be granted if (x) the Company project team, with the concurrence of the Foundation or its advisors, determines that the compounds identified in the conduct of Research Project B are not more active than the [**] in the applicable assay(s), or are more active but [**] for [**], and Company does not pursue development and commercialization of such compounds; or (y) the Foundation chooses not to [**] of Research Project B [**]; and provided, further, that the Reversionary License with respect to a particular Research Project shall not become effective (I) if the parties mutually agree, after good faith discussions based on [**] of such Research Project, that such Research Project [**], (II) Company [**] in such Research Project that [**], or (III) Company [**] in such Research Project that [**] but the [**] of the research for such Research Project. If the Reversionary License covers a Product which, as of the date of effectiveness of the Reversionary License, has [**], and the Reversionary License was granted pursuant to Section 6.1(a)(i), then Foundation [**] a [**] of such Product in the [**] such Product [**] in [**]. In any [**] in the [**], the Reversionary License [**].
AMENDMENT No. 1 TO SPONSORED RESEARCH AGREEMENT
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2. Additional Research. The Parties agree to the modification of the Research Plan attached as Exhibit A-1 to allow for PTC to perform early structure-activity relationship work on Hits identified under each of the three Research Projects (the “Additional Research”). The goal of such research will be the presentation by PTC of a list characterized Lead Candidates for further discussions with Foundation with respect to prioritization and potential funding of Lead Optimization by Foundation. The expected duration of such research is [**] months. The Foundation shall have the exclusive option (the “Option”) to continue funding development of all Lead Candidates presented by the company at the end of the Amendment Term (as defined below) through the identification of a Drug Candidate suitable for an IND filing, subject to the following terms and conditions: (a) the Foundation may exercise the Option by providing written notice to PTC of its intent to so fund development within [**] days following the date on which the Final Report (as defined below) is transmitted to Foundation; (b) following such written notice, the Parties shall negotiate in good faith for a period of no longer than [**] days the budget and terms and conditions of such proposed funding, and (c) if the Parties are unable to reach agreement within such [**] day period, then Foundation’s rights under the Option shall expire. Notwithstanding the foregoing, in no case shall the Option preclude PTC from entering into partnering arrangements or other agreements with commercial partners with respect to the Research Projects, so long as PTC is in compliance with the other terms of the Agreement and this Amendment.
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5. Foundation Negotiation Rights. During the Research Term and any subsequent extension of the collaboration and for the [**] month period thereafter, before entering into any written agreement with any third party under which PTC is obligated to conduct screening of its library for small molecules that modulate the expression of Drug Targets in exchange for funding, PTC shall first conduct good faith negotiations with Foundation with respect to provision of such funding by Foundation. Notwithstanding the foregoing, PTC’s obligations under this First Amendment Section 5 shall neither prohibit nor in any way limit (a) PTC’s ability to fulfill contractual commitments to third parties in effect as of the Amendment Effective Date, (b) PTC’s ability to enter into license agreements or otherwise collaborate with third parties with respect to compounds or programs directed against SMA developed by such third parties; nor (c) PTC’s ability to enter into any agreements or arrangements with respect to modulation of genes relevant to SMA via nonsense suppression.
6. Coordination of Funding. During the Research Term and any subsequent extension of the collaboration and for the [**] month period thereafter, should PTC require additional funds for the conduct of any Research Project, the Foundation will be consulted prior to any fundraising efforts for such Research Project. Should PTC identify an opportunity for agreement with any third party or parties with respect to additional or continued funding specifically directed to Research Projects, it will provide reasonable advance notice to Foundation, and the parties will negotiate in good faith (involving such third party or parties as appropriate) to develop a structure that supports such additional funding, based on the following principles: (a) entities co-funding a Research Project should share information on the Research with each other, subject to appropriate confidentiality provisions, (b) governance with respect to co-funded Research Projects should be via a joint steering committee including representatives of Foundation, PTC, and any third parties, (c) within the steering committee for a particular co-funded Research Project, role in decision-making with respect to matters within the sole purview of funding entities (including but not limited to strategic discussions as outlined in section 2.4 of the Agreement) should be [**], and (d) entities that have provided funding to a co-funded Research Project should have an opportunity (subject to compliance with the terms of their respective funding agreements) to continue their support of such Research Project. For clarity, PTC’s obligations under this First Amendment Section 6 shall in no way limit PTC’s ability to engage in general fund-raising activities and to enter into agreements relating thereto.
AMENDMENT No. 2 TO SPONSORED RESEARCH AGREEMENT
2. Continuing Research
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(g) If (i) it becomes evident to either party at any time, based on budget forecasts or progress in the Research Plan, that a [**] may [**] for [**], or that the [**], or (ii) the [**] is [**] (each of the foregoing, a “Cost/Timeline Issue”), then either party may, on written notice to the other, call a special meeting of the JSC to address such Cost/Timeline Issue. At such meeting, representatives of each party shall present information in their control with respect to the reasons for such Cost/Timeline Issue, and (if applicable) each party’s plan or recommendation for addressing such Cost/Timeline Issue. The JSC shall review and address such Cost/Timeline Issue, and shall determine which of the following actions the parties shall pursue:
(1) develop, approve, and follow an amendment to the Research Plan (such amendment, the “Corrective Plan”) to address the Cost/Timeline Issue, which may (subject to the written consent of the affected party in such party’s sole discretion) require either party to [**] the DC Research, or provide that the [**] in which case (x) the [**] shall be [**] and/or, if the [**] is more than [**] years after the Second Amendment Effective Date, then the Research Term shall be deemed amended to extend until the earliest of (i) the date upon which the JSC first designates a Development Candidate, (ii) the [**], or (iii) the effective date of any termination of the Research Term pursuant to Second Amendment Section 3, and (y) in addition to their other obligations under the Agreement, the parties shall duly perform their respective obligations pursuant to such Corrective Plan; provided, however, that after the adoption of a Corrective Plan, failure to achieve the [**] or [**] shall not be deemed, by itself, to be a breach of this Agreement, but shall entitle either party to terminate the Research Term pursuant to Second Amendment Section 3
(2) restructure the Research Plan and related budget in a manner that resolves the Cost/Timeline Issue; provided, however, that such restructuring shall not obligate either party to [**] of the [**] or be deemed to [**]; or
(3) determine that continuation of the DC Research would be futile, in which case the JSC shall recommend to the parties that they terminate the DC Research; provided further, that following such recommendation either party shall have the right to terminate the Research Term pursuant to Second Amendment Section 3.
(h) If the members of the JSC fail to unanimously agree upon one of the three actions described in Second Amendment Section 2(g) (1), (2) and (3), then the matter shall be referred to the parties’ Chief Executive Officers, and if the parties’ Chief Executive Officers do not agree upon one of such three actions within [**] days after matter referral, then either party shall have the right to terminate the Research Term pursuant to Second Amendment Section 3. If the affected party does not approve the Corrective Plan within [**] days after it is first formally proposed, then either party shall have the right to terminate the Research Term pursuant to Second Amendment Section 3.
3. Special Termination. In addition to the rights to terminate this Agreement as provided in Article 7 of the Agreement, either party shall have the rights to terminate the Research Term as provided in Second Amendment Section 2(g)(1), 2(g)(3) or 2(h) (any such termination of the Research Term, a “Special Termination”). Upon written notice from one party to the other party consistent with the provisions of Second Amendment Section 2(g)(1), 2(g)(3) or 2(h) and specifically identifying the circumstances giving rise to a right of Special Termination, a Special Termination shall go into effect and neither party shall have any rights or obligations with respect to the other party pursuant to this Agreement except as specifically set forth in this Second AmendmentSection 3. Upon the effectiveness of a Special Termination:
(a) subject to Second Amendment Section 3(b), Foundation shall automatically have a worldwide, fully-paid up and royalty-free, nonexclusive, nontransferable (except in connection with the assignment of this Agreement pursuant to Section 9.1 of the Agreement), sublicensable (solely as set forth in this Second Amendment Section 3(a)) right (i) under the Company Technology, Licensee Technology, Data, Licensee Data and Company Base IP, to make, have made and import Reversion Candidates and to use Reversion Candidates for its own internal purposes and for pre-clinical research activities ([**] any pre-clinical research performed under good laboratory practice guidelines (such pre-clinical research, “GLP Research”)) in the Field,(ii) to access or reference any filings made by Company or its agents with Regulatory Authorities with respect to any Reversion Candidate, (iii) to receive within [**] months of the effectiveness of the Special Termination copies of all Data and Licensee Data and all reports and other information that were (or should have been) accessible to Foundation prior to the Special Termination via the shared electronic collaboration space described in Second Amendment Section 4(a), (iv) to receive within [**] months of the effectiveness of the Special Termination reasonable quantities of existing stock of materials (other than (1) materials that are [**] or(2) materials that [**]) in Company’s possession or under its control and (xx) that are specific to, or were used or were contemplated to be used in, the DC Research, and are not commercially available from Third Parties, (yy) that are reasonably necessary for continued research or preclinical testing of Reversion Candidates or were used in, or were contemplated to be used, in the DC Research, and (zz) the transfer of which would not infringe any Third Party intellectual property rights (and no non-infringing alternative is identified after a reasonable inquiry), trigger a breach of any contractual obligations of Company with respect to a Third Party (other than a Licensee), or [**] trigger any contractual obligation to make payments to a Third Party (other than a Licensee); provided, however, that any subsequent transfers of such materials by Foundation to Third Parties shall be subject to the terms of a materials transfer agreement reasonably acceptable to Company, and (v) to gain access [**] to reasonable quantities of Company’s existing stock of Reversion Candidates for its own internal purposes and for pre-clinical research activities ([**] any GLP Research) in the Field; such right to be sublicensable by Foundation to (1) a contract research organization or non-academic Foundation collaborator only upon prior written notice to Company or (2) an academic or governmental Foundation collaborator only with the prior written consent of Company, such consent not to be unreasonably withheld or delayed and only to be withheld based on objective criteria determined by the JSC within [**] months after the Second Amendment Effective Date. At Foundation’s request and expense,Company shall provide Foundation with reasonable assistance to facilitate Foundation’s practice of the foregoing right, including disclosure of Company Know-How, provision of technical assistance and facilitation of Foundation’s efforts to obtain supply of Reversion Candidates from the Third Party who supplied such Reversion Candidate to Company prior to the Special Termination; […]
8. Development of Products
(a) Article 3 of the Agreement (captioned “Development of Products”) shall, as of the Second Amendment Effective Date, be amended and restated as follows:
“3. DEVELOPMENT OF PRODUCTS.
“3.1 Development Plan and Development Deadline Document. Upon selection of a Development Candidate, the JSC will meet to prepare a plan for the Development of such Development Candidate (such plan, the “Development Plan” for such Development Candidate”) and to conduct a formal review of and prepare a comprehensive update to Exhibit SA-4A to the Second Amendment (the “Development Deadline Document”) that reflects anticipated activities directed towards Development and commercialization of such Development Candidate through Regulatory Approval in the United States, in each case taking into consideration available information concerning such Development Candidate, the interests of SMA patients, the intellectual property and regulatory landscape and the commercial potential of the Development Candidate. The parties acknowledge and agree that Exhibit SA-4A takes into account many delays in Development and receipt of Regulatory Approval that, while possible, are not anticipated as of the Second Amendment Effective Date to be likely; Company’s expectations, as of the Second Amendment Effective Date, of the activities required to obtain RegulatoryApproval and its goal timelines for completing such activities are set forth in Exhibit SA-4B. When preparing the Development Plan and updating the Development Deadline Document for each Development Candidate, the JSC shall consider whether to obtain, (a) “Orphan Product” designation from the FDA, and (b) research funding from the FDA’s Office of Rare Diseases or other government agencies to support human clinical trials conducted for such Development Candidate, in each case taking into consideration the protection of intellectual property rights and confidential information. The Development Plan shall set forth, in at least the level of detail included in the Company’s or its Licensee’s plans for developing other preclinical or clinical (whichever reflects the status of the Development Candidate at such time) pharmaceutical products, both major and minor Development activities planned to be conducted with respect to such Development Candidate by or on behalf of Company or its Affiliates or Licensees, the anticipated timeline for performing such activities, the goals of such activities and the anticipated timeline for achieving such goals. The Development Deadlines Document shall set forth the deadline by which each major Development activity must be performed by on behalf of Company or its Affiliates or Licensees if the Company wishes to avoid granting the Foundation the right to obtain a Reversionary License pursuant to Section 3.3 of the Agreement. No change can be made to any Development Plan or Development Deadline Document without the approval of the JSC unless such change is approved by the parties’ respective Chief Executive Officers pursuant to Second Amendment Section 5(d) or 5(e), is implemented by Baseball Arbitration in accordance with Second Amendment Sections 5(d) and 17, or is approved by the Foundation in accordance with Second Amendment Section 9(b)(1).
“3.2 Diligence. Prior to selection of a Development Candidate, Company shall (i) perform the activities set forth in the Research Plan in a timely and complete manner, (ii) use Commercially Reasonable Efforts to achieve the goals of the DC Research within the time and budget allotted therefor in the Research Plan, and (iii) also have the research and Development obligations set forth in Section 2.5 of the Agreement. Following selection of a Development Candidate, Company shall use Commercially Reasonable Efforts to Develop and commercialize (whether directly, through an Affiliate, or in collaboration with one or more Third Parties, through licensing or some combination of the foregoing, all in compliance with the other applicable terms of this Agreement), for the treatment, mitigation or prevention of SMA or any other disease, indication or medical condition approved in writing by Foundation, at least one Product from such Development Candidate. In the event that the Development of a Development Candidate [**] toxicology studies governed by good laboratory practices (“GLP Toxicology Studies”) that causes Company to [**] that [**] is [**], then Company shall promptly notify Foundation in writing and Company shall spend up to [**] dollars ($[**]) Developing a Reversion Candidate through the start of GLP Toxicology Studies, provided that such Development does not [**] to [**] that such [**]. Upon the initiation of GLP Toxicology Studies for such Reversion Candidate, it shall be deemed a Development Candidate and Company shall have the diligence obligations set forth in the second sentence of this Section 3.2 of the Agreement. In the event that the Development of a Development Candidate [**] of [**] that [**] to [**] that such [**], then Company shall promptly notify Foundation in writing and Company shall, within [**] days of such notice, notify Foundation that Company has decided to do one of the following: (a) Develop one or more potential or actual Reversion Candidates or Lead Candidates at its own expense and in accordance with the terms and conditions of this Agreement, (b) Develop one or more potential or actual Reversion Candidates or Lead Candidates if Foundation is willing to pay for [**] percent ([**]%) of the costs of such Development for a [**] month period while the parties negotiate in good faith a separate agreement governing the further Development of such potential or actual Reversion Candidates or Lead Candidate(s); provided , that in the event the parties are unable to reach such separate agreement following good faith negotiations, then Company shall have [**] days following the end of such [**] month period to notify the Foundation of its decision to elect either option (a) or (c), or (c) stop all Development work on potential and actual Reversion Candidates or Lead Candidates and Development Candidates. If Company chooses option (a), then Company shall use Commercially Reasonable Efforts to Develop such Reversion Candidates and/or Lead Candidates through the start of GLP Toxicology Studies; upon the initiation of GLP Toxicology Studies for any such Reversion Candidate or Lead Candidate, it shall be deemed a Development Candidate and Company shall have the diligence obligations set forth in the second sentence of this Section 3.2 of the Agreement. If Company chooses option (c), then upon written notice (a “Reversion Notice”) to Company, Foundation shall have the Reversionary License and other rights set forth in Section 6.1(c)(2) of the Agreement.
“3.3 Development Benchmarks. Following designation of a Development Candidate, and in addition to Company’s general diligence obligation set forth in Section 3.2 of the Agreement, Company shall useCommercially Reasonable Efforts to perform the activities set forth in the Development Plan in accordance with the timeline specified therein and to complete each activity set forth in the Development Deadline Document prior to the applicable deadline specified therein, as such Development Plan or Development Deadline Document may be amended consistent with the terms of this Agreement, with respect to Development of a Product based on such Development Candidate; provided, however, that:
“(a) the JSC shall conduct a formal review of and comprehensive update to such Development Plan and Development Deadline Document on an annual basis to reflect, on a good faith basis, information from the DC Research, ongoing clinical or supportive non-clinical trials, or other factors that may impact the activities, timelines, milestones and goals set forth such Development Plan or the deadlines set forth in such Development Deadline Document;
“(b) a failure of Company, despite Commercially Reasonable Efforts, to meet any deadline set forth in a particular Development Deadline Document (as amended by the JSC) with respect to the relevant Development Candidate (each, a “Benchmark Trigger”) shall not create a breach of the Agreement, but shall instead trigger the availability of a right on the part of Foundation to obtain a Reversionary License in accordance with the following terms:
“(i) if Foundation believes a Benchmark Trigger has occurred, it shall provide written notice to Company setting forth in reasonable detail those aspects of the Development DeadlineDocument that have created such Benchmark Trigger.
“(ii) Company shall have [**] days to respond to a notice of Benchmark Trigger, which response shall either be (1) to cure the Benchmark Trigger (if it is capable of being cured), or(2) to propose a corrective plan to address the Benchmark Trigger, which shall take the form of a proposed amendment to the Development Deadline Document.
“(iii) if Company proposes a corrective plan to address the Benchmark Trigger, Foundation shall have [**] days to accept or reject such corrective plan. The parties may extend such [**] day period by mutual consent to engage in good faith negotiations directed towards arriving at a mutually-agreeable form of such corrective plan with respect to such Benchmark Trigger.
“(iv) if Company fails to respond to a Benchmark Trigger notice or cure the applicable Benchmark Trigger within [**] days of such Benchmark Trigger Notice, or, following the acceptance of a corrective plan for a Benchmark Trigger by Foundation fails to use Commercially Reasonable Efforts to execute such corrective plan, or following a PTC Corporate Change the entity primarily responsible for Company’s obligations under this Agreement fails to provide an M&A Certification as more fully set forth in Second Amendment Section 9(b)(4), then immediately as of such occurrence Foundation shall have the right to obtain the Reversionary License and other rights set forth in Section 6.1(c)(2) of the Agreement (a “Buy-Out Right”).
“(v) Foundation may exercise its Buy-Out Right by providing written notice (a “Buy-Out Notice”) to Company and the first installment payment described in Section 6.1(c)(3)(iii)(A) of the Agreement, such Buy-Out Notice to be effective upon the occurrence of both (A) receipt by Company and (B) availability of funds with respect to such first installment payment (provided that such funds shall be deemed to be available on the [**] business day after the Company’s receipt of such initial payment if the Company does not deposit such payment within [**] after such receipt). Upon the effectiveness of such Buy-Out Notice, the terms of Section 6.1(c)(2) of the Agreement shall apply.
“(vi) notwithstanding the foregoing, if Foundation fails to exercise a Buy-Out Right within [**] years of the date of the accrual of such Buy-Out Right, and other than with respect to the circumstances giving rise to such Buy-Out Right Company is in compliance with the terms of this Agreement, then such Buy-Out Right shall lapse and no longer be exercisable by Foundation. For clarity, the foregoing operates on a Buy-Out Right by Buy-Out Right basis, with Foundation having a full [**] year period to exercise each Buy-Out Right.
“3.4 Decisions to Discontinue Development or Commercialization.
(a) At the request of Company, the JSC shall determine, based on a comparison of test data for a particular Development Candidate (both alone and in combination with another treatment) and for the applicable Available Product and through the application of objective criteria previously established by the JSC (or by a mutually agreed independent technical expert if the JSC is not able to agree upon such objective criteria within [**] days after either party provides written notice to the other that it intends to arrange for a technical expert to decide such criteria), which criteria shall include without limitation [**] and [**], whether such Development Candidate (both alone and in combination with another treatment) appears to be less desirable as a therapeutic option in the Field than such Available Product. If, following such a determination, Company informs Foundation in writing that it intends to cease further Development and commercialization of the applicable Development Candidate, then Foundation shall have: (i) upon Foundation’s written notice to Company (such notice, a “Reversion Notice”), a Reversionary License and all other rights set forth in Section 6.1(c)(2) of the Agreement if such Available Product [**] (a “[**]”), or (ii) a Buy-Out Right if such Available Product is a [**], such right to be exercisable by Foundation on the terms provided in Sections 3.3(b)(v) and (vi) of the Agreement.
(b) Company shall notify Foundation in writing if Company has, in its good faith judgment, decided that a particular Development Candidate is not commercially viable, which decision shall not be based, in whole or in part, upon the size of the addressable patient population for such Development Candidate. Such notice shall include a written explanation of the basis for Company’s decision. Unless the parties enter into a separate agreement pursuant to which [**] the Development or commercialization of such Development Candidate, Foundation shall, upon written notice to Company (such notice, a “Reversion Notice”), have a Reversionary License and all other rights set forth in Section 6.1(c)(2) of the Agreement.
(c) Company shall notify Foundation in writing if Company has, in its good faith judgment, determined that (i) based on advice of outside patent counsel, the pharmaceutical preparation, composition of matter, method of manufacture or method of use of a particular Development Candidate is covered by at least one issued and apparently valid and enforceable United States Patent of a Third Party and (ii) it is not possible for Company (or its Affiliate or Licensee, as applicable) to obtain a license under such Third Party Patents on commercially reasonable terms (a “Third Party Patent License”). Upon receipt of such notice from Company and provision by Foundation of a written notice to Company (such notice, a “Reversion Notice”), Foundation shall have a Reversionary License and all other rights set forth in Section 6.1(c)(2) of the Agreement.
(d) Company shall notify Foundation in writing if Company has, in its good faith judgment, decided to cease all Development and commercialization of a particular Development Candidate and it believes that such cessation is not a breach of the obligations set forth in Section 3.2 of the Agreement. Such notice shall include a written explanation of the basis for Company’s belief. Unless the Foundation notifies Company in writing that it does not agree with such belief and that Company is obligated to continue Development and commercialization of such Development Candidate in accordance with Sections 3.2 and 3.3 of the Agreement, then upon Foundation’s written notice to Company (such notice, a “Reversion Notice”), Foundation shall have a Reversionary License and all other rights set forth in Section 6.1(c)(2) of the Agreement.”
9. PTC Corporate Change
(b) Parallel Notification Option. If with respect to a particular definitive written agreement that would result in the a PTC Corporate Change, Company has not given the M&A Approval Request provided for in Second Amendment Section 9(a), or if Company has given such M&A Approval Request and Foundation has either failed to respond within [**] days or responded by denying consent, then within [**] of entering into such definitive written agreement, Company shall provide written notice thereof to a designated representative of Foundation (the “M&A Notice”). Such M&A Notice shall include the identity of the proposed acquiring or merging entity or entities, the expected relationship (if any) between Company and its Affiliates, Company’s shareholders, and Company’s management following such PTC Corporate Change, and the expected impact of such PTC CorporateChange on Company’s obligations under the Agreement. Unless otherwise agreed by Foundation, (i) in connection with an M&A Notice given by Company or (ii) if Foundation does not respond to, or denies, an M&A Approval Request pursuant to Second Amendment Section 9(a), then the following terms and conditions shall apply effective upon Company’s entry into such definitive written agreement:
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(4) The entity that, following the PTC Corporate Change, will be principally responsible for the obligations of Company under the Agreement shall have [**] days following the consummation of such PTC Corporate Change to (A) have a member of the executive management team of such entity who is responsible for Development of products being developed by Company prior to the PTC Corporate Change participate in a meeting with representatives of Foundation at the Foundation’s headquarters to discuss 27 such entity’s plans for conducting the DC Research (if not completed prior to the PTC Corporate Change) and for Developing Products based on Development Candidates and (B) provide to Foundation a written certification (the “M&A Certification”) by an authorized officer of such entity (i) affirming such entity’s intention to perform the Company’s obligations under the Agreement, (ii) summarizing in reasonable detail such entity’s plans with respect to conduct of any part of the DC Research not performed by Company as of the effectiveness of the PTC Corporate Change, including a demonstration that sufficient funds, FTEs and other resources have been allocated to the performance of such DC Research, and (iii) summarizing in reasonable detail such entity’s plans with respect to execution of the Development Plan and completion of the activities set forth in the Development Deadline Document prior to the deadlines specified therein, including a demonstration that sufficient funds, FTEs and other resources have been allocated to the performance of such Development, and such entity’s business plans for the Development Candidates; provided , that failure to provide such M&A Certification in the time frame specified in this Second Amendment Section 9(b)(4) shall entitle Foundation to exercise the Buy-Out Right specified in Section 3.3(b)(iv) of the Agreement, such right to be exercisable by Foundation on the terms provided in Sections 3.3(b)(v) and (vi) of the Agreement.
12. Reversionary License
Section 6.1(c) of the Agreement (captioned “Reversionary Licenses to Data and Company Technology”) shall, as of the Second Amendment Effective Date, be amended and restated as follows:
“(c) Reversionary Licenses to Data and Company Technology.
“(1) In the event that:
“(i) During the term of the DC Research, Company fails to perform its obligations as set forth in Second Amendment Section 2 with respect to conduct of the DC Research, and does not remedy such failure to comply within [**] days after notice thereof from Foundation; provided, however, that in the event [**], the parties shall promptly meet to negotiate in good faith the [**], and Company’s right to cure any failure under this Section 6.1(c)(1)(i) shall be extended to the longer of (xx) [**] days after Foundation provides Company written notice that it wishes to terminate such good faith negotiations, or (yy) such other period as the parties may agree in connection with a mutually-agreed plan to address [**];
“(ii) Company is otherwise in material breach of this Agreement with respect to the DC Research and does not remedy such breach within [**] days after notice of such breach from Foundation; or
“(iii) Company is in material breach of its obligations set forth in Section 3.2 of the Agreement, and does not remedy such breach within [**] days after notice thereof from Foundation; “then, in any such case, Foundation shall have the option to declare the effectiveness of the terms and conditions specified in Section 6.1(c)(2) of the Agreement, such option to be exercised by providing written notice to Company (a “Reversion Notice”) within the [**] period following the last date on which Company could have cured such failure or breach pursuant to this Section 6.1(c)(1) of the Agreement.
“(2) Effective upon receipt of a Reversion Notice pursuant to Section 3.2, 3.4(a)(i), 3.4(b), 3.4(c) or 3.4(d) of the Agreement or within the time period specified in Second Amendment Section 3(d) or Section 6.1(c)(1) of the Agreement, or upon the effectiveness of a Buy-Out Notice pursuant to Section 3.3(b)(v) of the Agreement (regardless whether the Foundation obtained its Buy-Out Right pursuant to Section 3.3(b)(iv) of the Agreement, Section 3.4(a)(ii) of the Agreement or Second Amendment Section 9(b)(4)), the following terms and conditions shall apply:
“(i) Company shall, and it hereby does, grant to Foundation an exclusive worldwide license, including the right to grant sublicenses, under any Company Technology, Licensee Technology, Data or Licensee Data that relates to a pharmaceutical preparation, composition of matter, method of manufacture and/or method of use in the Field, of Reversion Candidates and/or Products containing one or more Reversion Candidates, solely for the purpose of researching, developing, making, having made, using, selling, having sold, offering for sale and importing Reversion Candidates and Products containing Reversion Candidates (such Products, “Reversion Products”) in the Field (such license being referred to herein as the “Reversionary License”). The Reversionary License shall be fully-paid up and royalty free unless the Foundation obtains the Reversionary License pursuant to (A) Section 3.3(b)(iv) of the Agreement, Section 3.4(a)(ii) of the Agreement, or Second Amendment Section 9(b)(4), in which case the licensing fees, royalties and other terms set forth in Section 6.1(c)(3) of the Agreement shall also apply or (B) Second Amendment Section 3(d) of the Agreement, in which case the royalties, [**], and other terms set forth in Section 6.1(c)(4) of the Agreement shall also apply;
“(ii) Company shall, and it hereby does, grant to Foundation a fully-paid up, royalty-free, non- exclusive, and worldwide license, including the right to grant sublicenses, to (xx) Company Technology and Licensee Technology to the extent not exclusively licensed pursuant to Section 6.1(c)(2)(i) of the Agreement, (yy) Data and Licensee Data, and (zz) Company Base IP, in each case solely to the extent (1) reasonably necessary for Foundation to exercise its rights under the Reversionary License or (2) useful for Foundation to exercise its rights under the Reversionary License and used or contemplated to be used in the DC Research or pursuant to the Development Plan (as applicable); provided , that the license granted to Foundation in this Section 6.1(c)(2)(ii) of the Agreement [**] or [**] or [**];
“(iii) Company shall reasonably cooperate with Foundation in order to enable Foundation to continue, initiate or re-initiate the Development, manufacture and commercialization of the Reversion Candidates or Reversion Products, such cooperation and assistance to be provided in a timely manner (having regard to the nature of the cooperation or assistance requested) and including without limitation (in each case with respect to the Reversion Candidates or Reversion Products): (A) within [**] months of the Reversion Notice or Buy-Out Notice: (1) transferring or granting a right of reference to any INDs, NDAs, or similar regulatory filings made or obtained by Company or its Affiliate or Licensee; (2) providing a copy of all Data and Licensee Data and all reports and other information that were (or should have been) accessible to Foundation via the shared electronic collaboration space described in Second Amendment Section 4(a); and (3) providing reasonable quantities of existing stock of materials (other than (1) materials [**] or (2) materials [**] in Company’s possession or under its control and (xx) that are specific to, or were used or were contemplated to be used in, the DC Research or the Development Plan, and are not commercially available from Third Parties, (yy) that are reasonably necessary or useful for continued research, Development or commercialization of Reversion Candidates in the Field, and (zz) the transfer of which would not [**] trigger any contractual obligation to make payments to a Third Party (other than a Licensee); provided, however, that any subsequent transfers of such materials by Foundation to Third Parties shall be subject to the terms of a materials transfer agreement reasonably acceptable to Company; (B) permitting Foundation to purchase, for a period of up to [**] years (or less if Foundation obtains an alternative validated, supply source within such [**] year period), Reversion Candidates and Reversion Products [**], but only to the extent (1) such Reversion Candidates or Reversion Products are manufactured by Company itself (as opposed to under a Third Party manufacturing contract) or (2) such Reversion Candidates or Reversion Products are manufactured for the Company by a Third Party and the agreement pursuant to which such Reversion Candidates or Reversion Products are manufactured (xx) provides for manufacture of other active pharmaceutical ingredients or pharmaceutical products that are not Reversion Candidates or Reversion Products, (yy) is not assignable to Foundation or (zz) has not been assigned to Foundation; (C) permitting Foundation to purchase [**] all or any part of Company’s worldwide unsold inventory of such Development Candidate or Product together with any raw materials and work-in-process relating to such Development Candidate or Product; (D) upon Foundation’s request, using Commercially Reasonable Efforts to assign to Foundation any Third Party manufacturing contracts relating to Reversion Candidate or Reversion Product; (E) upon Foundation’s request, using Commercially Reasonable Efforts to assign to Foundation any Third Party license agreements relating to such Reversion Candidate or Reversion Product; and (F) providing prompt technical assistance as requested by Foundation [**] for [**] months after the Reversion Notice or Buy-Out Notice;
“(iv) Foundation, at its own expense, shall maintain clinical trial and/or product liability insurance, as applicable, in an amount consistent with industry standards and only if available on commercially reasonable terms, and shall [**] with respect to such insurance, with respect to losses arising out of or related to its activities pursuant to the Reversionary License and other rights granted in this Section 6.1(c)(2) of the Agreement, and Foundation shall provide a certificate of insurance evidencing such coverage to Company upon request;
“(v) At Foundation’s option, on a license-by-license basis, either (i) Foundation may request in writing that Company use Commercially Reasonable Efforts to secure the assignment to Foundation or its designee any licenses granted by Company to Licensees; or (B) upon written notice from Foundation all licenses granted by Company to Licensees shall automatically terminate and Licensees shall be obligated to perform the obligations set forth in this Section 6.1(c)(2) of the Agreement as if they were Company. Company shall include in each agreement with a Licensee an acknowledgement by Licensee of the foregoing and a provision that grants Foundation third party beneficiary status with respect to Licensee’s performance (or failure to perform) such obligations;
“(vi) The rights and obligations of the parties pursuant to Article 2 of the Agreement, Article 3 of the Agreement, Sections 4.3, 4.4, 4.5, 4.6, 4.7(a) and 6.3 of the Agreement, First Amendment Sections 5, 6 and 7, and Second Amendment Sections 2 (including Foundation’s obligations to fund the DC Research), 3, 4 (except for the final report described in Second Amendment Section 4(b)(ii)), 5, 6, 7, 9, 10, 13, 17, 18(a), 18(b), 18(c), 18(d)and 18(f) shall also terminate; and “(vii) Notwithstanding the foregoing provisions of Section 6.1(c)(2) of the Agreement, in no event shall Company be required to take any actions pursuant to Section 6.1(c)(2) of the Agreement that, in the good faith judgment of outside counsel to the Company, would infringe any Third Party intellectual property rights (and no non-infringing alternative is identified after a reasonable inquiry) or trigger a breach of any contractual obligations of Company with respect to a Third Party (other than a Licensee).”
“(3) In addition to the provisions of Section 6.1(c)(2) of the Agreement, if Foundation obtains the Reversionary License and other rights set forth in Section 6.1(c)(2) of the Agreement pursuant to Section 3.3(b)(iv) of the Agreement, Section 3.4(a)(ii) of the Agreement, or Second Amendment Section 9(b)(4), then (A) Foundation shall [**] and (B) Foundation shall make the following payments to Company with respect to such Reversionary License and rights:
“(i) If [**] pursuant to this Agreement (which, for clarity, [**] as of the accrual of the applicable Buy-Out Right, then Foundation shall pay to Company a licensing fee equal to [**] U.S. dollars ($[**]) as specified in (iii) below.
“(ii) In the alternative, if [**] with respect to [**] pursuant to this Agreement (which, for clarity, [**]) as of the accrual of the applicable Buy-Out Right, then Foundation shall pay, as specified in (iii) below, to Company a licensing fee that is equal to the sum of [**] U.S. dollars ($[**]) plus x , where x equals the lesser of (A) [**] and (B) [**] U.S. dollars ($[**]). For clarity, such licensing fee shall never exceed [**] U.S. dollars ($[**]).
“(iii) Foundation shall pay the licensing fee set forth in (i) or (ii) above in three installments: (A) a first installment, equal to [**] percent ([**]%) of such license fee shall be paid by Foundation simultaneously with Foundation’s notice that it is exercising such Buy-Out Right; (B) a second installment, equal to [**] percent ([**]%) of such license fee shall be paid by Foundation by the [**]month anniversary of Foundation’s notice that it is exercising such Buy-Out Right, provided that Company has complied with its obligations pursuant to Section 6.1(c)(2) of the Agreement in good faith and responded promptly and adequately to any Foundation notices detailing any alleged lack of such good faith compliance; and (C) a final installment, equal to [**] percent ([**]%) of such license fee shall be paid by Foundation (x) by the [**]month anniversary of Foundation’s notice that it is exercising such Buy-Out Right, provided that Company has complied with its obligations pursuant to Section 6.1(c)(2) of the Agreement in good faith and responded promptly and adequately to any Foundation notices detailing any alleged lack of such good faith compliance, or (y) if earlier, the date upon which Foundation is satisfied that Company has fully performed all obligations of Company set forth in Section 6.1(c)(2) of the Agreement;
“(iv) [**], Foundation shall pay to Company the following percentage royalties (on a Reversion Product-by-Reversion Product basis) on product revenues (based on the definition of Product Revenues in the Agreement, but substituting “Reversion Product” for “Product” and “Foundation” for “Company” as the context requires) of any Reversion Product, such payments to be made on a quarterly basis in arrears no later than [**] days following the end of the applicable quarter:
[TABLE REDACTED]
“For the purposes of the foregoing table, [**] shall mean [**]. The royalties in the foregoing table shall commence, on a country-by-country basis, upon the first commercial sale (based on the definition of First Commercial Sale in the Agreement, but substituting “Foundation” for “Company” as the context requires) of the applicable Reversion Product in such country, and continue for the longer of (xx) [**] from the date of such first commercial sale or (yy) the date of expiration of the last Company Patent covering the applicable Reversion Product within the applicable country. Foundation shall comply with the applicable provisions of Sections 4.4, 4.5, 4.6 and 4.7 of the Agreement with respect to such royalty payments, substituting “Company” for “Foundation” and vice versa as the context may require.”
“(4) In addition to the provisions of Section 6.2(c)(2) of the Agreement, if Foundation obtains the Reversionary License and other rights set forth in Section 6.1(c)(2) of the Agreement pursuant to Section 3.2 of the Agreement or Second Amendment Section 3(d), then Foundation shall make the following payments to Company with respect to the Reversionary License and shall have the following obligations to Company: “
(i) Foundation shall (A) [**] and (B) make royalty payments to Company, on a Reversion Product-by-Reversion Product basis, equal to [**] percent ([**]%) of product revenues (based on the definition of Product Revenues in the Agreement, but substituting Reversion Product for Product and Foundation for Company as the context requires) of any Reversion Product, such payments to be made on a quarterly basis in arrears no later than [**] days following the end of the applicable quarter. Such royalty payments shall commence, on a country-by-country basis, upon the first commercial sale (based on the definition of First Commercial Sale in the Agreement, but substituting “Foundation” for “Company” as the context requires) of the applicable Reversion Product in such country, and continue for the longer of (xx) [**] from the date of such first commercial sale or (yy) the date of expiration of the last Company Patent covering the applicable Reversion Product within the applicable country. Foundation shall comply with the applicable provisions of Sections 4.4, 4.5, 4.6 and 4.7 of the Agreement with respect to such royalty payments, substituting “Company” for “Foundation” and vice versa as the context may require.” “(ii) Before granting any Third Party an exclusive sublicense of the Reversionary License for any purpose that includes commercializing any Reversion Product in the United States, [**], for a period of up to [**] months, [**] would be [**] and [**] to [**]. If the [**], by the end of such [**] month period, a [**] that set[**], then Foundation shall be free to grant such a sublicense to a Third Party [**].”
“(5) If Foundation makes a final decision, with respect to each and every Reversion Candidate, that it has no interest in performing or having performed (including through a sublicensee), at such time or at any point in the future, any further research, Development, or commercialization upon such Reversion Candidate pursuant to the Reversionary License, then it shall provide written notice thereof to Company, and Company shall be entitled to [**] and this Agreement on written notice to Foundation.”
18. Miscellaneous
(a) Compounds not Selected. During the Second Amendment Term and for the [**] period thereafter, should Company require additional funds for the conduct of research or Development in the Field of any Lead Candidate that was tested in the course of the DC Research but was not selected as a Reversion Candidate (such research and Development, “Non-DC Research”), Foundation will be consulted and provided the opportunity to fund such Non-DC Research in whole or in part prior to any fundraising efforts for such Non-DC Research. Should Company identify an opportunity for agreement with any Third Party or Third Parties with respect to such Non-DC Research during such [**] period, it will provide reasonable advance notice to Foundation, and the parties will negotiate in good faith (involving such Third Party or Third Parties as appropriate) to develop a structure that supports such additional funding, based on the following principles: (a) entities co-funding such Non-DC Research should share information on the Non-DC Research with each other, subject to appropriate confidentiality provisions, (b) governance with respect to co-funded Non-DC Research should be via a joint steering committee including representatives of Foundation, Company, and any Third Parties, and (c) entities that have provided funding to such co-funded Non-DC Research should have an opportunity (subject to compliance with the terms of their respective funding agreements) to continue their support of such Non-DC Research. For clarity, Company’s obligations under this Second Amendment Section 18(a) shall in no way limit Company’s ability to engage in general fund-raising activities and to enter into agreements relating thereto.