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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K/A
(Amendment No. 1)
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
- ---- ACT OF 1934
For the fiscal year ended December 31, 1994
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OR
____ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____ to _____
Commission File Number 0-11749
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SCIOS NOVA INC.
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(Exact name of registrant as specified in its charter)
Delaware 95-3701481
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2450 Bayshore Parkway, Mountain View, California 94043-1173
- -----------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (415) 966-1550
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Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 par value
Class D Warrants to purchase Common Stock
Contingent Payment Rights
Common Share Purchase Rights
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The approximate aggregate market value of voting stock held by nonaffiliates of
the registrant as of March 17, 1995 was $275,306,188.
As of March 17, 1995, 35,446,030 shares of the registrant's Common Stock were
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
DOCUMENTS FORM 10-K PART
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Definitive Proxy Statement with respect to III
the 1995 Annual Meeting of Stockholders
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Part IV, Item 14(a)(3) (Exhibits) is hereby amended by refiling
Exhibit 10.32 attached hereto.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amendment to be
signed on its behalf by the undersigned, thereunto duly authorized.
SCIOS NOVA INC.
Date: July 21, 1995 By /s/ Richard L. Casey
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Richard L. Casey
Chairman of the Board, President and
Chief Executive Officer
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EXHIBIT 10.32
Confidential Treatment Requested
COLLABORATION AGREEMENT
THIS COLLABORATION AGREEMENT is made effective as of the 30th day of
December, 1994 (the "Effective Date") by and between SCIOS NOVA INC., a Delaware
corporation having its principal place of business at 2450 Bayshore Parkway,
Mountain View, California 94043 ("Scios Nova") and GENENTECH, INC., a Delaware
corporation having its principal place of business at 460 Point San Bruno
Boulevard, South San Francisco, California 94080 ("Genentech"), each on behalf
of itself and its Affiliates. Scios Nova and Genentech are sometimes referred to
herein individually as a "Party" and collectively as the "Parties," and
references to "Scios Nova" and "Genentech" shall include their respective
Affiliates.
RECITALS
1. Scios Nova is currently developing a natriuretic peptide designated as
Auriculin-Registered Trademark- anaritide acetate for use in the treatment,
prevention and diagnosis of acute renal failure.
2. Genentech has expertise in the area of development and marketing of
bio-pharmaceutical products and is currently researching and developing
natriuretic peptide products.
3. Scios Nova desires to grant to Genentech, and Genentech desires to
obtain, rights to co-promote Auriculin in the United States and Canada and to
develop and market Auriculin in the rest of the world, all on the terms and
conditions set forth herein.
4. If the development of Auriculin in the United States is successful,
the Parties desire to include in the collaboration certain additional
natriuretic peptide products of Genentech and Scios Nova for acute renal
failure, all on the terms and conditions set forth herein.
5. Simultaneously with the execution of this Agreement, Genentech will
purchase shares of Preferred Stock of Scios Nova for an aggregate purchase price
of $20 million and will agree to loan to Scios Nova an additional $30 million,
all according to the terms and conditions of a Preferred Stock Purchase
Agreement and Note Agreement of even date herewith.
ARTICLE 1.
DEFINITIONS
The following terms shall have the following meanings as used in this
Agreement:
1.1 "ADMINISTRATION COSTS" shall have the meaning defined in Exhibit A.
1.2 "AFFILIATE" means an entity that, directly or indirectly, through one
or more intermediaries, is controlled by Scios Nova or Genentech. As used
herein, the term "control" will mean the direct or indirect ownership of fifty
percent (50%) or more of the stock having the right to vote for directors
thereof or the ability to otherwise control the management of the corporation or
other business entity.
1.
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1.3 "ALLOCABLE OVERHEAD" shall have the meaning defined in Exhibit A.
1.4 "AURICULIN" means that certain natriuretic peptide product more
particularly described on Exhibit B attached hereto.
1.5 "COLLABORATION PRODUCT" means (a) Auriculin-Registered Trademark-,
initially, (b) Natrecor-Registered Trademark-, as and to the extent provided in
Section 2.7 below, and (c) as and to the extent provided in Sections 2.2 and 2.4
below, those additional Genentech Products and Scios Nova Products that may
hereafter be brought within the collaboration established under this Agreement
in accordance with the procedure in such Sections 2.2 and 2.4, all within the
Field unless specified to be outside the Field.
1.6 "COMMERCIALIZATION PLAN" means the comprehensive plan for the
commercialization of a Collaboration Product, as more specifically described in
Section 5.2.
1.7 "CONTROL" means possession of the ability to grant a license or
sublicense as provided for herein without violating the terms of any agreement
or other arrangement with any Third Party.
1.8 "COMBINATION PRODUCT ADJUSTMENT" means the following: in the event a
Collaboration or Independent Product is sold in the form of a combination
product containing one or more active ingredients in addition to a Collaboration
or Independent Product, Royalty-Bearing Sales or Net Sales for such combination
product will be adjusted by multiplying actual Royalty-Bearing Sales, or Net
Sales as applicable, of such combination product by the fraction A/(A + B) where
A is the invoice price of the Collaboration Product, or Independent Product as
applicable, if sold separately, and B is the invoice price of any other active
component or components in the combination, if sold separately. If, on a
country-by-country basis, the other active component or components in the
combination are not sold separately in said country, Royalty-Bearing Sales or
Net Sales shall be calculated by multiplying actual Royalty-Bearing Sales or Net
Sales of such combination product by the fraction A/C where A is the invoice
price of the Product if sold separately, and C is the invoice price of the
combination product. If, on a country-by-country basis, neither the Product nor
the other active component or components of the combination product is sold
separately in said country, Royalty-Bearing Sales or Net Sales shall be
determined by the Parties in good faith. In any event, however, the Royalty-
Bearing Sales or Net Sales of a combination product shall not be reduced by more
than 50% from the actual sales of such Product by reason of the adjustment
provisions contained herein.
1.9 "CO-PROMOTE" means to promote jointly Collaboration Products through
Genentech, Scios Nova and their respective sales forces under a single trademark
in a given country in the Co-Promotion Territory.
1.10 "CO-PROMOTION TERRITORY" means the United States and Canada.
1.11 "COST OF GOODS SOLD" in the Co-Promotion Territory shall have the
meaning defined in Exhibit A and in the Licensed Territory, shall mean the fully
burdened cost of the
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Collaboration Product in bulk form. The fully burdened cost of the
Collaboration Product will be determined in accordance with generally accepted
accounting principles in the United States as applied by the Party performing or
contracting for each stage of the bulk manufacturing process and will include
direct labor, material, product testing costs and Allocable Overhead.
1.12 "DEVELOPMENT COSTS" in the Co-Promotion Territory shall have the
meaning defined in Exhibit A and in the Licensed Territory, shall mean costs,
including Allocable Overhead, required to obtain the authorization and/or
ability to manufacture, formulate, fill, ship and/or sell a Collaboration
Product in the Field in commercial quantities in the Licensed Territory.
Development Costs shall include but are not limited to the cost of studies on
the toxicological, pharmacokinetic, metabolic or clinical aspects of a
Collaboration Product conducted internally or by individual investigators, or
consultants necessary for the purpose of obtaining and/or maintaining approval
of a Collaboration Product in the Field by a government organization in a
country of the Licensed Territory, and costs for preparing, submitting,
reviewing or developing data or information for the purpose of submission to a
governmental authority to obtain and/or maintain approval of a Collaboration
Product in the Field in a country of the Licensed Territory. In addition,
Development Costs in the Licensed Territory shall include the cost of post-
launch clinical studies in support of a Collaboration Product in the Field in
the Licensed Territory. Development Costs in the Licensed Territory shall
include expenses for compensation, benefits and travel and other employee-
related expenses, as well as data management, statistical designs and studies,
document preparation, and other expenses associated with the clinical testing
program.
1.13 "DEVELOPMENT PLAN" means the comprehensive plan for the development of
Collaboration Products, designed to generate the preclinical, clinical and
regulatory information required for filing Drug Approval Applications in the Co-
Promotion Territory, as more specifically described in Section 4.2 below.
Development shall refer to all activities related to preclinical testing,
toxicology, formulation, process development, manufacturing scale-up, quality
assurance/quality control, clinical studies and regulatory affairs for a
Collaboration Product in connection with obtaining Regulatory Approvals of such
Products.
1.14 "DISTRIBUTION COSTS" shall have the meaning defined in Exhibit A.
1.15 "DRUG APPROVAL APPLICATION" means an application for Regulatory
Approval required for commercial sale or use of a Product as a drug in the Field
in a regulatory jurisdiction.
1.16 "FIELD" means the treatment, prevention or diagnosis, in humans, of
acute renal failure from any cause whatsoever, whether primary or secondary to
another medical condition.
1.17 "GENENTECH KNOW-HOW" means Information which (i) Genentech discloses
to Scios Nova under this Agreement and (ii) is within the Control of Genentech.
Notwithstanding anything herein to the contrary, Genentech Know-how shall
exclude Genentech Patents.
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1.18 "GENENTECH PATENT" means the rights granted by any governmental
authority under a Patent which covers a method, apparatus, material,
manufacture, use, treatment, process, compound, composition, or product-by-
process useful in the Field, which Patent is owned or Controlled by Genentech,
including its interest in any Patents owned jointly by the Parties as provided
hereunder.
1.19 "GENENTECH PRODUCT" means any Product researched or developed by or on
behalf of Genentech. Genentech will be the Lead Party for all Collaboration
Products that were initially Genentech Products.
1.20 "GROSS SALES" shall have the meaning defined in Exhibit A.
1.21 "INDEPENDENT PRODUCT" means (i) any Scios Nova Product or Genentech
Product as to which the other Party's rights under Section 2.2 or 2.4 have
expired or (ii) any Collaboration Product for which a Party has terminated its
participation in development pursuant to Section 4.5 hereunder.
1.22 "INFORMATION" means techniques and data relating to the Field,
including, but not limited to, inventions, practices, methods, knowledge,
knowhow, skill, experience, test data including pharmacological, toxicological
and clinical test data, analytical and quality control data, marketing, pricing,
distribution, cost, sales, manufacturing, patent data or descriptions.
1.23 "JOINT COMMERCIALIZATION COMMITTEE" OR "JCC" means that Operating
Committee established pursuant to Section 3.3 below.
1.24 "JOINT DEVELOPMENT COMMITTEE" OR "JDC" means that Operating Committee
established pursuant to Section 3.2 below.
1.25 "JOINT FINANCE COMMITTEE" OR "JFC" means that Operating Committee
established pursuant to Section 3.4 below.
1.26 "LEAD PARTY" means Scios Nova, for Scios Nova Products, and Genentech,
for Genentech Products.
1.27 "LICENSED TERRITORY" means worldwide, excluding the Co-Promotion
Territory.
1.28 "MAJOR EUROPEAN COUNTRY" means [ ].
1.29 "MANAGEMENT COMMITTEE" means that committee established pursuant to
Section 3.1 below.
1.30 "MARKETING ACTIVITIES" means the advertising, marketing and promotion
of Collaboration Products, and related professional education, through any
proper means, including, without limitation, (i) advertisements appearing in
journals, newspapers, magazines or other
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media, including direct mail and electronic media, (ii) seminars and
conventions, (iii) sample packages of Collaboration Products, promotional
literature, visual aids, three dimensional promotional items, and other selling
materials, (iv) market research, (v) symposia and opinion leader development
activities, (vi) pharmacoeconomics, and (vii) reimbursement planning and
management (including uninsured patients programs if adopted by the Parties);
PROVIDED, HOWEVER, that such term shall exclude direct sales force activity.
Any Marketing Activities undertaken prior to Regulatory Activities must be
permitted by the applicable laws and regulations of the applicable country.
1.31 "MARKETING COSTS" shall have the meaning defined in Exhibit A.
1.32 "NATRECOR" means that certain natriuretic peptide Product more
particularly described on Exhibit C attached hereto.
1.33 "NET SALES" shall have the meaning defined in Exhibit A.
1.34 "NON-NATRIURETIC PRODUCT" means any form or dosage of a compound for
human pharmaceutical use for which there is a Phase III Decision Date by
[ ], for the same indication or indications in the Field as a
Collaboration Product is being developed or commercialized hereunder as of such
Phase III Decision Date.
1.35 "OPERATING COMMITTEE" means a committee established by the Management
Committee, including, but not limited to, the Joint Development Committee, Joint
Commercialization Committee and Joint Finance Committee.
1.36 "OPERATING PROFITS OR LOSSES" shall have the meaning defined in
Exhibit A.
1.37 "PATENT" means (i) valid and enforceable letters patent, including any
extension, registration, confirmation, reissue, continuation, division,
continuation-in-part, re-examination or renewal thereof and (ii) pending
applications for letters patent.
1.38 "PATENT COSTS" means the fees and expenses paid to outside legal
counsel and experts, and filing and maintenance expenses, incurred after the
Effective Date in connection with the establishment and maintenance of rights
under Patents covering any Collaboration Product, including costs of patent
interference, reexamination, reissue, opposition and revocation proceedings.
1.39 "PHASE II CLINICAL TRIAL" means such studies in humans of the safety,
dose ranging and efficacy of a Product which have generated sufficient data to
commence Phase III Clinical Trials.
1.40 "PHASE III CLINICAL TRIAL" means a controlled study in humans of the
efficacy and safety of a Product which is prospectively designed to demonstrate
statistically whether the Product is effective for use in a particular
indication in a manner sufficient to obtain regulatory
5.
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approval to market that Product and, in the case of Collaboration Products,
which the Joint Development Committee designates as a Phase III Clinical Trial.
1.41 "PHASE III DECISION DATE" means the date [ ] after
availability to the non-developing Party of a reasonably comprehensive summary
of both efficacy and safety data from the completed Phase II Clinical Trials of
the Product or Non-Natriuretic Product, as the case may be, in the Field.
1.42 "PRODUCT" means any form or dosage of a small molecule, peptide or
protein compound for human pharmaceutical use that, no later than
[ ], has been synthesized and shown to produce biological
activity from direct signalling through the guanylate cyclase A receptor.
Products include candidate compounds and the results of research by either
Party designed to identify Products.
1.43 "REGULATORY APPROVAL" means any approvals (including pricing and
reimbursement approvals), licenses, registrations or authorizations of any
federal, state or local regulatory agency, department, bureau or other
governmental entity, necessary for the manufacture and sale of Products in a
regulatory jurisdiction.
1.44 "ROYALTY-BEARING SALES" means the gross amount invoiced (a) by
Genentech or its permitted sublicensees for sales to an unrelated Third Party of
a Collaboration Product in the Licensed Territory or (b) by either Party or its
permitted sublicensees for sales to an unrelated Third Party of an Independent
Product in any country in the world, less (i) trade, cash and quantity discounts
or rebates (provided that any such adjustments based on overall purchases by the
customer of the selling Party may be included in the allowance determination
only to the extent of the pro rata amount of such adjustments attributable to
the products included in such overall purchase), (ii) credits or allowances
given or made for rejection or return of, and for uncollectible amounts on,
previously sold products or for retroactive price reductions (including rebates
similar to Medicare), (iii) taxes, duties or other governmental charges levied
on or measured by the billing amount, as adjusted for rebates and refunds,
(iv) charges for freight and insurance directly related to the distribution of
Products (to the extent not paid by the Third Party customer), and (v) credits
or allowances given or made for wastage replacement, indigent patient and
similar programs, and adjusted by the Combination Product Adjustment, if
applicable.
1.45 "SALES COSTS" shall have the meaning defined in Exhibit A.
1.46 "SALES REPRESENTATIVE" means an employee of either Party or its
Affiliates (i) who is responsible for contacting customers and others who can
buy or influence the buying decision on the applicable Collaboration Product in
the applicable country in the Co-Promotion Territory, and (ii) whose success at
such activities is a significant factor in the ongoing employment of the
individual, and shall exclude an employee of either Party or an Affiliate
engaged in telemarketing, professional education, and similar indirect
activities in support of direct selling.
6.
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1.47 "SALES TARGETS" means the aggregate target of Gross Sales for a Party
for a defined time period, as determined by the JCC pursuant to Section 5.3(a)
below.
1.48 "SCIOS NOVA KNOW-HOW" means Information which (i) Scios Nova discloses
to Genentech under this Agreement and (ii) is within the Control of Scios Nova.
Notwithstanding anything herein to the contrary, Scios Nova Know-how shall
exclude Scios Nova Patents.
1.49 "SCIOS NOVA PATENT" means the rights granted by any governmental
authority under a Patent which covers a method, apparatus, material,
manufacture, use, treatment, process, compound, composition or product-by-
process useful in the Field, which Patent is owned or Controlled by Scios Nova,
including its interest in any Patents owned jointly by the Parties as provided
hereunder.
1.50 "SCIOS NOVA PRODUCT" means (a) Auriculin-Registered Trademark-,
initially, (b) Natrecor-Registered Trademark-, as and to the extent provided in
Section 2.7 below and (c) any Product researched or developed by or on behalf of
Scios Nova. Scios Nova will be the Lead Party (unless otherwise provided) for
all Collaboration Products that were initially Scios Nova Products.
1.51 "SUBLICENSE REVENUES" means all revenues received from Third Parties
as consideration for sublicensing of the manufacture, distribution, use or sale
of Collaboration Products in the Co-Promotion Territory.
1.52 "THIRD PARTY" means any entity other than Scios Nova or Genentech.
1.53 "THIRD PARTY ROYALTIES" means royalties payable to a Third Party in
connection with Products.
ARTICLE 2.
SCOPE OF COLLABORATION
2.1 INITIAL PRODUCTS. Each of the Parties has carried on research and
development with respect to natriuretic peptides that are Products, and the
Parties have established this collaboration to develop such Products in the
Field. The Parties will focus their initial efforts on the development of
Auriculin in the Field. With respect to Products other than Auriculin, each
Party developing such other Products (a "developing Party") wishes to grant to
the other Party (a "non-developing Party") the right to elect to bring into the
collaboration any Product of the developing Party, subject to the terms and
conditions of this Agreement. Subject to such terms and conditions, each Party
has the right to continue, at its own expense and discretion, its research and
development programs with respect to natriuretic peptides.
2.2 AURICULIN NDA NOT FILED BY DECEMBER 31, 1997. If, by December 31,
1997, Scios Nova has not filed an NDA for Auriculin for the treatment of acute
renal failure or if within sixty (60) days of such filing the FDA has not
accepted for review an NDA which was filed by December 31, 1997, Genentech may,
in its sole discretion, elect one of the following options:
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(i) Genentech may elect to extend to [ ] the period of
time in which Scios Nova may file for purposes of Section 2.4 below, an NDA for
Auriculin for the treatment of acute renal failure;
(ii) Genentech may elect to cause Scios Nova to bring into the
collaboration for the Field any other Scios Nova Product, or to bring into the
collaboration for the Field any Genentech Product, and such Products(s) shall
thereafter be a "Collaboration Product" for purposes of this Agreement; or
(iii) Genentech may elect to terminate this Agreement as provided in
Section 15.2(b).
Such election must be made by Genentech within sixty (60) days of the later of
(A) December 31, 1997 if Scios Nova has not filed an NDA for Auriculin by such
date or (B) the date upon which Scios Nova notifies Genentech that the FDA has
not accepted for review an NDA filed by December 31, 1997. If no election is
made prior to the end of such election period, this Agreement shall terminate
automatically pursuant to Section 15.2(b). In addition, Genentech's right to
include Scios Nova Products hereunder shall terminate in its entirety on
[ ].
2.3 MUTUAL AGREEMENT TO TERMINATE AURICULIN DEVELOPMENT. If the Parties
mutually agree that the development of Auriculin in the Field should be
discontinued prior to December 31, 1997, the Parties shall endeavor to select
either a Scios Nova Product or a Genentech Product to be developed by Scios Nova
as the first Collaboration Product. If, within sixty (60) days of such decision
to discontinue development of Auriculin, the Parties are not able to agree on
another product to develop, then Genentech shall have the rights under Section
2.2.
2.4 AURICULIN NDA FILED BY DECEMBER 31, 1997. If, by December 31, 1997,
Scios Nova has filed an NDA for Auriculin for the treatment of acute renal
failure and the FDA has accepted such NDA for review within sixty (60) days of
such filing, each Party shall thereafter have the right to require the other
Party to contribute any or all of its Products, on a product-by-product basis,
to the collaboration for use in the Field. Upon the exercise of such right by
the non-developing Party as to a Product of a developing Party, such Product
shall become a Collaboration Product for all purposes of this Agreement. Such
right as to a Product may be exercised by providing written notice to the
developing Party at any time after such FDA acceptance of an Auriculin NDA and
prior to the Phase III Decision Date; PROVIDED, HOWEVER, that if Genentech has
commenced Phase III trials of any Genentech Product in the Field prior to FDA
acceptance of an NDA for Auriculin filed before December 31, 1997, Scios Nova
shall have ninety (90) days from the date of such FDA acceptance within which to
make the Product Election as to such first Genentech Product. In addition, each
Party's right to include the other Party's Products hereunder shall terminate in
its entirety on [ ].
8.
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2.5 DEVELOPMENT COSTS.
(a) Scios Nova shall bear all Development Costs for development of
the first Collaboration Product for marketing in the Field in the Co-Promotion
Territory through the date of Regulatory Approval of the first Collaboration
Product in the United States, and the Parties shall share Development Costs
incurred thereafter in the manner set forth in this Agreement. All Development
Costs of any other Collaboration Product incurred pursuant to an approved
Development Plan for such Collaboration Product shall be shared by the Parties
in the Co-Promotion Territory in the manner set forth in this Agreement;
PROVIDED, HOWEVER, that no payment from Genentech to Scios Nova shall be made
until a Collaboration Product receives Regulatory Approval for sale in the
United States. Subject to the foregoing, the Development Costs of the Product
in the Co-Promotion Territory that were incurred after commencement of the IND-
enabling toxicology studies for the Product through the date the Product is
brought into the collaboration shall be charged to the collaboration as
described on Exhibit A upon election to bring a Product into the collaboration;
PROVIDED, HOWEVER, that if Genentech elects to bring in a Genentech Product
pursuant to Section 2.2(ii), such Development Costs shall not be charged to the
collaboration.
(b) In no instance, however, shall either Party be obligated to
fund development of more than one (1) Collaboration Product in the Co-Promotion
Territory at any one time.
(c) If Genentech elects to bring a Scios Nova Product into the
collaboration pursuant to Section 2.2, Scios Nova may elect to continue to
develop Auriculin in the Co-Promotion Territory at its own expense.
Notwithstanding Section 2.4(a), Genentech shall in no event be required to bear,
or reimburse Scios Nova for, any Development Costs incurred with respect to such
development of Auriculin after the date of Genentech's election under
Section 2.2.
2.6 INDEPENDENT PRODUCT. If a Party does not elect to include a Product
pursuant to Section 2.2 or 2.4 prior to the Phase III Decision Date of that
Product in the Field, the non-developing Party's right to include such Product
as a Collaboration Product hereunder shall terminate and such Product shall be
deemed an Independent Product herein. Thereafter, the developing Party may, in
its sole discretion and at any time, continue or discontinue the development and
commercialization of the Independent Product at its own expense. The developing
Party shall have a worldwide, exclusive license (with right of sublicense),
under the non-developing Party's Patents and Know-how and in the Field, to
develop, make, have made, use, sell, offer for sale, have sold and import such
Independent Product. In the event the developing Party commercializes an
Independent Product, the developing Party shall pay the other Party a royalty on
Royalty-Bearing Sales for such Independent Product under Section 7.5(c).
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2.7 UNDERSTANDINGS RELATING TO NATRECOR.
(a) RIGHT TO COLLABORATE INSIDE THE FIELD. Pursuant to
Section 2.2(ii), Genentech shall have the right to include Natrecor as a
Collaboration Product in the Field; PROVIDED, HOWEVER, that such right shall not
be exercisable at any time after [ ] Genentech may exercise such
right by delivering written notice to Scios Nova. Upon such exercise, the
Parties shall collaborate for the development and commercialization of Natrecor
as provided herein; PROVIDED, HOWEVER, that the development of Natrecor in the
Field shall not adversely affect the development and commercialization of
Natrecor outside the Field so long as Scios Nova is developing Natrecor in any
indication or the Parties agree to collaborate with respect to Natrecor in such
other indications pursuant to Section 2.7(b). Subject to Section 2.5, at the
time of Genentech's notice of its exercise of rights hereunder, the Development
Costs for Natrecor shall be allocated and charged to the collaboration as
provided in Exhibit A.
(b) RIGHT OF FIRST NEGOTIATION OUTSIDE THE FIELD. If Scios Nova,
in its sole discretion, elects to develop Natrecor for indications other than
acute renal failure in collaboration with or under license to any Third Party,
Scios Nova shall promptly notify Genentech in writing of its desire to do so and
promptly thereafter provide to Genentech a summary of all data relating to
Natrecor then held by Scios Nova. Genentech shall have thirty (30) days after
receipt of such data within which to notify Scios Nova, in writing, of its
desire to exercise its right of first negotiation with respect to Natrecor. If
Genentech fails to notify Scios Nova within such period, its right of first
negotiation under this Section 2.7(b) shall terminate, and Genentech shall have
no interest in or right to Natrecor (except as provided in Section 2.7(a)
above). If Genentech gives Scios Nova timely notice of its exercise of its
right of first negotiation, the Parties shall negotiate exclusively and in good
faith for a period of up to ninety (90) days from receipt of such data the terms
for a collaboration on Natrecor outside of the Field. If the Parties fail to
reach agreement during such a period, Scios Nova shall have the right to enter
into a collaboration or license agreement with any Third Party and Genentech
shall have no interest in or right to Natrecor outside of the Field.
(c) COVENANT REGARDING DEVELOPMENT IN THE FIELD. During the term
of this Agreement, Scios Nova shall not, without the prior written consent of
Genentech, (i) conduct, cause any Third Party to conduct or knowingly permit any
licensee of Scios Nova to conduct a human clinical trial within the Field with
respect to Natrecor, (ii) publish any data from any human clinical trial which
would promote Natrecor for use in the Field or otherwise promote Natrecor for
use in the Field through publications, symposia, advertising or the like or
(iii) knowingly furnish Natrecor to any Third Party for such purposes. Scios
Nova will include a covenant to such effect in any Third Party license of any of
its rights to Natrecor.
2.8 NON-NATRIURETIC PRODUCTS.
(a) Neither Party shall commercialize, directly or indirectly, any
Non-Natriuretic Product in the Field prior to [ ] without first
offering to the other Party the opportunity to negotiate a collaboration with
respect to such Non-Natriuretic Product for use in the Field under this
Agreement. If, by [ ], Scios Nova has filed an
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NDA for Auriculin for the treatment of acute renal failure and the FDA has
accepted such NDA for review within sixty (60) days of such filing, the Parties
shall continue to be bound until [ ] to such obligation to first
offer the other Party an opportunity to negotiate a collaboration with respect
to use in the Field of any Non-Natriuretic Product that has reached a Phase III
Decision Date by [ ]. If, by December 31, 1997, Scios Nova has
not filed such an NDA or if within sixty (60) days of such filing the FDA has
not accepted for review an NDA which was filed by December 31, 1997, Scios Nova
shall continue to be bound until [ ] to such obligation to first
offer Genentech an opportunity to negotiate with Scios Nova a collaboration with
respect to the use in the Field of any Scios Nova Non-Natriuretic Product that
has reached a Phase III Decision Date by [ ].
(b) The Party desiring to commercialize such a Non-Natriuretic
Product shall notify the other Party in writing and provide the other Party with
copies of all data relating to such Non-Natriuretic Product then held by the
commercializing Party. The other Party shall have thirty (30) days after
receipt of such data in which to give the commercializing Party written notice
if the other Party desires to exercise its right of first negotiation with
respect to such Non-Natriuretic Product. If the non-commercializing Party fails
to notify the commercializing Party within such period, the right of first
negotiation under this Section 2.8(b) with respect to such Non-Natriuretic
Product shall terminate, and the non-commercializing Party shall have no
interest in or right to such Non-Natriuretic Product. If the non-
commercializing Party gives the commercializing Party timely notice of its
exercise of its right of first negotiation, the Parties shall negotiate
exclusively and in good faith for a period of up to ninety (90) days from
receipt of such data the terms for a collaboration on such Non-Natriuretic
Product inside the Field. If the Parties fail to reach agreement during such a
period, the commercializing Party shall have the right to enter into a
collaboration or license agreement with any Third Party or commercialize the
Non-Natriuretic Product itself and the non-commercializing Party shall have no
interest in or right to such Non-Natriuretic Product.
2.9 NO LICENSE. Except as otherwise provided herein, Scios Nova shall not
license, sublicense or otherwise transfer its rights in the Field under any
Scios Nova Patents, Scios Nova Know-how, Genentech Patents or Genentech Know-how
with respect to any Scios Nova Product, and Genentech shall not license,
sublicense or otherwise transfer its rights in the Field under any Scios Nova
Patents, Scios Nova Know-how, Genentech Patents or Genentech Know-how with
respect to any Genentech Product in the Co-Promotion Territory, until such time
as the other Party's rights to such Genentech Product or Scios Nova Product, as
appropriate have terminated; PROVIDED, HOWEVER, that the developing Party shall
have the right to license or sublicense such rights for the purposes of
manufacturing a Product.
2.10 INFORMATION. In order to keep each Party informed about the
development of additional Products, each Party agrees to provide the other
Party, for so long as the other Party has a prospective right under this
Article 2 with respect to that Product, with a semi-annual written report on the
status, results and plans for development of each Genentech Product or Scios
Nova Product, as appropriate. In addition, each Party shall present to the
other Party, the results of its Phase II Clinical Trials with such additional
Product. Each Party shall also provide the other from time to time with such
information as the other Party may reasonably request to
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evaluate any additional Product. If a Party is considering the exercise of any
of its rights hereunder with respect to the other Party's Product, it may
request from the other Party a good faith estimate of Development Costs incurred
to date with respect to such Product, and the other Party shall provide such
estimate within thirty (30) days of receipt of such request.
ARTICLE 3.
MANAGEMENT OF THE COLLABORATION
3.1 MANAGEMENT COMMITTEE.
(a) Within thirty (30) days of the Effective Date, the Parties will
establish a Management Committee to oversee and manage the collaboration in the
Co-Promotion Territory contemplated by this Agreement. The Management Committee
will be composed of two representatives appointed and replaced by Scios Nova and
two representatives appointed and replaced by Genentech. Such representatives
will be senior officers and/or managers of their respective companies who do not
simultaneously sit on an Operating Committee. The Management Committee will
meet at least once each calendar quarter, or more frequently, as agreed by the
Management Committee, and will operate by consensus. If the Management
Committee is unable to resolve a dispute regarding any issue presented to it,
such dispute shall be resolved in accordance with Article 17 below.
(b) The Management Committee shall perform the following functions:
(i) determine the overall strategy for the collaboration in
the manner contemplated by this Agreement;
(ii) coordinate the activities of the Parties hereunder;
(iii) establish a governance structure for the collaboration
including overseeing the establishment and organization of one or more Operating
Committees, or other structures to implement this Agreement. The establishment
of certain Operating Committees is provided for in Sections 3.2, 3.3 and 3.4 of
this Agreement. Each Operating Committee contemplated by this Agreement shall
be subordinate to the Management Committee. If any Operating Committee
contemplated by this Agreement is not constituted or continued, any reference to
such Committee in this Agreement shall be deemed to be a reference to the
Management Committee or such other committees or structures to which the
Management Committee may delegate responsibility;
(iv) settle disputes or disagreements that are unresolved by
an Operating Committee unless otherwise indicated in this Agreement;
(v) approve any agreements with Third Parties to be made by
either or both Parties regarding a Collaboration Product and which have a value
in excess of $[ ] or which involve the license of any rights related to
the development, manufacture or marketing
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of a Collaboration Product in the Co-Promotion Territory (except as otherwise
expressly provided in this Agreement);
(vi) review and approve each Development Plan, including each
annual update, submitted to it pursuant to Section 4.2;
(vii) review and approve each Commercialization Plan,
including each annual update, submitted to it pursuant to Section 5.2; and
(viii) perform such other functions as appropriate to further
the purposes of this Agreement as determined by the Parties.
3.2 JOINT DEVELOPMENT COMMITTEE.
(a) Within thirty (30) days of the Effective Date, the Parties will
establish the Joint Development Committee to oversee and control development of
Collaboration Products in the Co-Promotion Territory and in the Field. The JDC
will be composed of two representatives appointed and replaced by each of Scios
Nova and Genentech. Such representatives will include individuals with
expertise and responsibilities in the areas of preclinical development, clinical
development, process sciences, manufacturing or regulatory affairs. The JDC
will meet at least once each calendar quarter, or more frequently, as agreed by
the JDC. The JDC will operate by consensus. If the JDC is unable to resolve a
dispute regarding any issue presented to it, such dispute shall be resolved in
accordance with Article 17 below.
(b) The JDC shall coordinate, expedite and control the development
of Collaboration Products to obtain Regulatory Approvals in the Co-Promotion
Territory as set forth in Article 4. The JDC will develop and recommend to the
Management Committee Development Plans (including annual development budgets),
will determine which Collaboration Products (other than Auriculin) will be
developed, will facilitate the flow of information with respect to development
work being conducted for each Collaboration Product on a worldwide basis, and
will discuss and cooperate regarding such worldwide development.
(c) The JDC shall also be the forum for exchange of information on
Scios Nova Products and Genentech Products that have not yet become
Collaboration Products.
(d) The JDC shall have no involvement in the development of
Independent Products, which shall be solely the responsibility of the developing
Party, or in the development of Collaboration Products in the Licensed
Territory, which shall be the responsibility of Genentech, subject to the terms
and conditions of this Agreement.
(e) The JDC will cease operations and have no further function
hereunder on the later of (i) the date on which the Parties are no longer
developing any Collaboration Product in the Co-Promotion Territory or
(ii) [ ].
3.3 JOINT COMMERCIALIZATION COMMITTEE.
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(a) Within thirty (30) days after the availability of data from
Scios Nova's Phase III trial for Auriculin currently in progress as of the
Effective Date, the Parties will determine whether to establish the Joint
Commercialization Committee. When established, the JCC shall be composed of two
representatives appointed and replaced by each of Scios Nova and Genentech. The
JCC will be an operational committee made up of individuals with expertise and
responsibilities in the areas of product development and marketing, sales
management or market research. The JCC will meet on a quarterly basis, except
that from submission of an NDA for a Collaboration Product in the Co-Promotion
Territory until the end of the second year of sales in the Co-Promotion
Territory, the JCC shall meet every two (2) weeks to prepare for and oversee the
launch of Collaboration Products. The JCC will operate by consensus. If the
JCC is unable to resolve a dispute regarding any issue presented to it, such
dispute shall be resolved in accordance with Article 17 below.
(b) The purposes of the JCC shall be to (i) monitor, review and
direct the commercialization of Collaboration Products in the Co-Promotion
Territory pursuant to the Commercialization Plan, including oversight of
planning, annual budgeting, manufacturing, marketing, sales and distribution,
and licensing of Collaboration Products, (ii) in conjunction with the JFC
monitor and review budgets and actual expenses incurred in the manufacture,
marketing, sale and distribution of Collaboration Products, (iii) select
trademarks for Collaboration Products (other than Auriculin or Natrecor) and
(iv) facilitate cooperation regarding the worldwide commercialization and
marketing activities of the Parties.
(c) The JCC shall have no involvement in the commercialization of
Independent Products, which shall be solely the responsibility of the marketing
party, or in the commercialization of Collaboration Products in the Licensed
Territory, which shall be the responsibility of Genentech, subject to the terms
and conditions of this Agreement.
(d) The JCC will cease operations and have no further function
hereunder on the date on which the Parties are no longer sharing Operating
Profits or Losses with respect to any Collaboration Product in the Co-Promotion
Territory.
3.4 JOINT FINANCE COMMITTEE.
(a) Within thirty (30) days of the Effective Date, the Parties will
establish the Joint Finance Committee to be composed of two representatives
appointed and replaced by each of Scios Nova and Genentech. Such
representatives will include individuals with expertise and responsibilities in
the areas of accounting, cost allocation, budgeting and financial reporting.
The JFC will operate by consensus. If the JFC is unable to resolve a dispute
regarding any issue presented to it, such dispute shall be resolved in
accordance with Article 17 below.
(b) The JFC shall operate under the direction of the Management
Committee to provide services to and consult with the JDC and the JCC in order
to address the financial, budgetary and accounting issues which arise in
connection with each Development Plan and annual update thereto prepared
pursuant to Section 4.2 and each Commercialization Plan and
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annual update thereto prepared pursuant to Section 5.2. The JFC's functions
shall include the functions described in Exhibit A.
(c) The JFC shall have no involvement in the development of
Independent Products, which shall be solely the responsibility of the developing
Party, or in the development of Collaboration Products in the Licensed
Territory, which shall be the responsibility of Genentech, subject to the terms
and conditions of this Agreement.
(d) The JFC will cease operations and have no further function
hereunder on the date on which the Parties are no longer sharing Operating
Profits or Losses with respect to any Collaboration Product in the Co-Promotion
Territory.
3.5 COLLABORATION CHAIRPERSON. Within sixty (60) days of the Effective
Date, Scios Nova shall designate a Collaboration Chairperson for Auriculin,
subject to Genentech's consent, and thereafter the Lead Party shall designate a
Collaboration Chairperson for its Collaboration Products within sixty (60) days
after such Collaboration Product is contributed to the collaboration, as
provided in Section 2.2 or 2.4. Such Collaboration Chairperson shall be a vice
president, unless otherwise agreed, and shall serve as an ex-officio member of
the Management Committee and each Operating Committee and shall be entitled to
call and take minutes of meetings of each Committee.
ARTICLE 4.
DEVELOPMENT IN THE CO-PROMOTION TERRITORY
4.1 DEVELOPMENT EFFORTS. Scios Nova and Genentech each agree to
collaborate diligently in the development of Collaboration Products in the Field
and to use commercially reasonable and diligent efforts to develop and bring
Collaboration Products to market in the Field as soon as practicable. The
Parties further agree to execute and substantially perform the Development Plan
and to cooperate with the other in carrying out the Development Plan. As used
in this Agreement, the term commercially reasonable and diligent efforts will
mean those efforts consistent with the exercise of prudent scientific and
business judgment, as applied to other pharmaceutical products of similar
potential and market size by the Party in question.
4.2 DEVELOPMENT PLAN.
(a) The development of each Collaboration Product in the Co-
Promotion Territory shall be governed by a comprehensive Development Plan. The
Lead Party shall prepare the Development Plan, in consultation with the JFC as
to financial, budgetary and accounting issues, and in accordance with its
customary standard for a product of market significance comparable to that of
the Collaboration Product in question, taking into consideration factors such as
market conditions, regulatory factors, competition, and the costs and profits of
the Product in question. Scios Nova has prepared, and Genentech has reviewed
and approved, the Development Plan for Auriculin; the JDC or Management
Committee may hereafter modify such Development Plan as provided in this
Agreement. As to all other Collaboration Products, within ninety (90) days
after selection for development by the JDC as provided in Section 3.2, the Lead
Party shall
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submit its proposed Development Plan to the JDC and the Management Committee for
approval or modification. Thereafter, each Development Plan shall be updated
annually by the Lead Party, in consultation with the JFC as to financial,
budgetary and accounting issues, and submitted to the JDC and Management
Committee for review, modification and approval not later than ninety (90) days
prior to January 1 of a calendar year hereunder. Each Development Plan will be
subject to JDC and Management Committee approval and neither Party may proceed
with development of a Collaboration Product without such JDC and Management
Committee approval. During the applicable calendar year, any Development Plan
may be modified by the Lead Party, in consultation with the JFC with respect to
financial, budgetary and accounting issues, PROVIDED, HOWEVER, that any
modification shall be subject to the approval of the JDC and Management
Committee.
(b) Each Development Plan shall describe the proposed overall
program of development for the Collaboration Product, including preclinical
studies, toxicology, formulation, process development, manufacturing scale-up,
quality assurance/quality control, clinical studies and regulatory plans and
other key elements of obtaining Regulatory Approval in the Co-Promotion
Territory. The Development Plan shall include a summary of estimated
Development Costs of the program expected during the development process through
obtaining Regulatory Approval for each proposed indication and a detailed and
specific plan and budget for all development activities proposed for the
following calendar year for the Collaboration Product.
(c) The JDC shall determine whether the Phase II data are
sufficient to enable the Parties to begin a Phase III Clinical Trial of a
Collaboration Product in the Co-Promotion Territory. If the JDC determines the
Phase II data are sufficient, it shall determine a budget for the Phase III
Clinical Trials, in consultation with the JFC and subject to the approval of the
Management Committee. Each Party shall have thirty (30) days from the date on
which the Management Committee approves such Phase III budget in which to
determine whether it intends to participate in developing the applicable
Collaboration Product through such Phase III Clinical Trials. If a Party so
elects to participate in Phase III Clinical Trials, it shall bear one-half of
the Development Costs set forth in such Development Plan regardless of whether
it later decides to terminate participation in such Phase III Clinical Trials
(unless otherwise provided in Section 2.5). This Section 4.2(c) shall not apply
to the development of Auriculin.
4.3 DRUG APPROVAL APPLICATIONS. Consistent with the Development Plan, the
Lead Party shall file Drug Approval Applications and seek Regulatory Approvals
for Collaboration Products in the Co-Promotion Territory. Prior to submitting
any Drug Approval Applications, the Parties, through the JDC, shall consult,
cooperate in preparing and mutually agree on such Applications and their content
and scope. The Lead Party shall own all regulatory submissions including all
Drug Approval Applications for Collaboration Products in the Co-Promotion
Territory and the other Party shall have a permanent and irrevocable right of
access and reference thereto, with appropriate notification of such right to the
applicable regulatory authorities. The other Party shall have the right to make
any other use of the Drug Approval Application that it would normally make had
it been a joint owner. The Parties will endeavor to include on all package
labels and inserts for Collaboration Products sold in the Co-Promotion Territory
the
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names and logos of Scios Nova and Genentech with equal prominence, to the extent
permitted by the applicable regulatory authorities.
4.4 TERMINATION AND CONTINUING OBLIGATION FOR FUNDING DEVELOPMENT COSTS.
(a) Except as provided in Section 4.5 below, effective upon thirty
(30) days notice, either Party may elect to terminate (or elect not to
participate in) the development and commercialization of any Collaboration
Product in the Co-Promotion Territory at any time before Regulatory Approval for
sale therein and thereby terminate its responsibility for bearing further
Development Costs, and any other responsibilities, for such Collaboration
Product, as specified herein. In the event a Party gives a notice of
termination under this Section 4.5, the terminating Party (i) shall remain
responsible for its share of Development Costs for the Collaboration Product in
the Co-Promotion Territory in the Field until either (A) the effective date of
the termination or (B) if such effective date of termination occurs after the
decision of the JDC to undertake a specific Phase III Clinical Trial, through
completion of such Phase III Clinical Trials as determined in Section 4.2(c)
above, and (ii) shall make its personnel and other resources available to the
other Party as necessary to effect an orderly transition of development
responsibilities, with the costs of such personnel and resources to be borne by
the other Party after the effective date of the termination. If a Party elects
not to continue paying Development Costs for a Product, monies previously paid
for such Development Costs shall not be refunded.
(b) As of the effective date of any such termination, the
Collaboration Product that is the subject of the termination shall become an
Independent Product, the terminating Party shall no longer have any right in the
Co-Promotion Territory under the non-terminating Party's Patents and Know-how
with respect to such Independent Product and the non-terminating Party shall
have the exclusive right (with right of sublicense) in the Co-Promotion
Territory under the terminating Party's Patents and Know-how and in the Field,
to develop, make, have made, use, sell, offer for sale, have sold and import
such Independent Product. In the event the non-terminating Party commercializes
an Independent Product, the non-terminating Party shall pay the terminating
Party a royalty on Royalty-Bearing Sales for such Independent Product under
Section 7.5(d) or (e).
(c) Notwithstanding any decision of Scios Nova to opt out of
development of Natrecor in the Field, Scios Nova shall have the right to
continue to manufacture Natrecor so long as it continues to develop or
commercialize Natrecor outside the Field and fulfills its commitment to supply
Genentech with reasonable quantities of Natrecor for use in the Field as
provided in Article 8.
4.5 TERMINATION WITH RESPECT TO AURICULIN.
(a) If, at any time prior to January 1, 1998, either (i) Scios Nova
believes that the development of Auriculin should be discontinued and Genentech
believes such development should be continued, and/or (ii) Scios Nova does not
desire to develop Natrecor in the Field and Genentech desires to have Natrecor
developed in the Field, the Parties shall attempt to resolve such dispute in
accordance with Section 17.1. If the CEOs are unable to agree on whether to
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discontinue such development after full discussion by the JDC and the Management
Committee, either Party may invoke the special arbitration mechanism in this
Section 4.5 by providing written notice to the other Party.
(b) Within fifteen (15) days after receipt of such notice, each
Party shall select a nephrologist with expertise in acute renal failure and
experience in drug development, which nephrologists shall select a third
nephrologist with expertise in acute renal failure and experience in drug
development within fifteen (15) days of their selection. The Parties shall have
thirty (30) days in which to submit to such panel of nephrologists such data and
information as each Party believes necessary for the panel to make the
determinations described in (c) and (d) below. The panel shall, within thirty
(30) days after receipt of such information, hold a joint meeting with the
Parties and render a decision in writing solely on the questions of whether
there is sufficient data to support continued development of Auriculin and/or
Natrecor.
(c) If the panel decides that there is sufficient data suggesting
that continued development of Auriculin as a product in the Field is warranted,
Scios Nova shall continue such development in the Field in the Co-Promotion
Territory, in accordance with the Development Plan to be reviewed by the JDC and
reviewed and approved by the Management Committee, until the earlier of (i) the
completion of the second Phase III Clinical Study of Auriculin in the Field in
the United States, or (ii) December 31, 1997. Thereafter, pursuant to Section
4.4 above, Scios Nova will have the right to terminate development and
commercialization of Auriculin in the Field and Genentech will have the right to
independently develop and commercialize Auriculin in the Field as an Independent
Product, subject to the royalty obligation for such Independent Product under
Section 7.5(d) or (e) and any other obligations regarding an Independent Product
set forth herein.
(d) If the panel decides that there is not sufficient data to
continue development of Auriculin, but determines that there is sufficient data
suggesting that Natrecor should be developed as a product in the Field, Scios
Nova shall thereafter develop Natrecor in the Field in the Co-Promotion
Territory, in accordance with a Development Plan to be reviewed by the JDC and
reviewed and approved by the Management Committee until the earlier of (i) the
completion of a Phase II Clinical Trial (for the purposes of this Section 4.5
only, a Phase II Clinical Trial shall mean such studies in humans of the
efficacy and safety of a Product which is designed to generate sufficient data
to commence Phase III Clinical Trials) or (ii) December 31, 1997. Thereafter,
pursuant to Section 4.4 above, Scios Nova will have the right to terminate
development and commercialization of Natrecor in the Field and Genentech will
have the right to independently develop and commercialize Natrecor in the Field
as an Independent Product, subject to the royalty obligation for such
Independent Product under Section 7.5(d) or (e) and any other obligations
regarding an Independent Product set forth therein.
(e) If the panel decides that there is not sufficient data to
develop either Auriculin or Natrecor in the Field, Scios Nova will have the
right to terminate development and commercialization of Auriculin and Natrecor
in the Field and Genentech will have the right to independently develop and
commercialize Auriculin and Natrecor in the Field as an Independent Product,
subject to the royalty obligation for such Independent Products.
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(f) The decisions of the panel shall be binding on the Parties and
neither Party shall have the right to invoke Section 17.2 with respect to the
issues decided by the panel. Costs of the panel shall be borne equally.
ARTICLE 5.
COMMERCIALIZATION IN THE CO-PROMOTION TERRITORY
5.1 COMMERCIALIZATION EFFORTS. Scios Nova and Genentech each agree to
(i) collaborate diligently in the commercialization of the Collaboration
Products and (ii) use commercially reasonable and diligent efforts to
commercialize the Products promptly and in such a manner as to maximize
Operating Profits. The Parties shall be guided by a standard of []
]
striving to balance as best they can the legitimate interests and concerns of
the Parties and to realize the economic potential of the Collaboration Products.
In conducting commercialization activities under this Agreement, neither Party
shall significantly prejudice the value of a Collaboration Product by reason of
its activities outside of the Field, although neither Party shall be prohibited
from exercising any election provided in this Agreement. In conducting
commercialization activities under this Agreement, neither Party shall permit
its own tax considerations to affect Operating Profits or Losses negatively,
except to the extent such tax considerations are equally applicable to both
Parties.
5.2 COMMERCIALIZATION PLAN.
(a) The commercialization of each Collaboration Product in the Co-
Promotion Territory shall be governed by a comprehensive Commercialization Plan.
The Lead Party or, in the case of the First Collaboration Product, Genentech,
shall develop prior to launch and for the first two (2) years thereafter, in
consultation with the JFC with respect to financial, budgetary and accounting
issues, an initial Commercialization Plan in accordance with its customary
standard for a product of market significance comparable to that of the
Collaboration Product in question, taking into consideration factors such as
market conditions, regulatory factors, competition and the costs and profits of
the Product in question. Each Party agrees to consult and work with the other
Party to develop mutually agreed Commercialization Plans. The Lead Party or
Genentech, as provided herein, shall submit the Commercialization Plan to the
JCC for review and to the Management Committee for review and approval no later
than six (6) months after the time of filing for Regulatory Approval in any
country in the Co-Promotion Territory. Thereafter, each Commercialization Plan
shall be updated annually by the Lead Party or Genentech, as provided herein, in
consultation with the JFC with respect to financial, budgetary and accounting
issues, and submitted to the JCC and the Management Committee for review and
approval not later than ninety (90) days prior to January 1 of a calendar year
hereunder. Each Commercialization Plan will be subject to JCC and Management
Committee approval within thirty (30) days after such submission. Neither Party
may proceed with the commercialization of a Collaboration Product without such
JCC and Management Committee approval. During the applicable calendar year, any
Commercialization Plan may be modified by the Lead Party or Genentech, as
provided herein, in consultation with the JFC with respect to financial,
budgetary and accounting issues,
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PROVIDED, HOWEVER, that any modification shall be subject to the approval of the
JCC and Management Committee.
(b) Each Commercialization Plan as approved by the JCC and
Management Committee shall describe the overall plan for commercializing the
applicable Collaboration Product. Each such Commercialization Plan shall
include (i) Marketing Activities, (ii) a comprehensive marketing, sales,
pricing, manufacturing, distribution and licensing strategy for the applicable
Collaboration Product in all applicable countries, including the Third Parties
to be utilized and the arrangements with them that have been or are proposed to
be agreed upon (including policies and procedures for adjustments, rebates,
bundling and the like), (iii) estimated launch date, market and sales forecasts,
in units of product and local currency, and competitive analysis for the
applicable Collaboration Product, and (iv) a detailed budget of the Marketing
Costs and Sales Costs to be incurred prior to launch of the Collaboration
Product in the Co-Promotion Territory. Prior to such launch of the applicable
Collaboration Product, the Commercialization Plan shall be updated by the Lead
Party or Genentech, as provided herein, in consultation with the JFC with
respect to financial, budgetary and accounting issues, and approved by the JCC
and Management Committee to include (A) updated market and sales forecasts in
units of Collaboration Product and local currency (including monthly sales
forecasts), (B) each Party's Sales Target under the Plan and (C) a detailed
budget for the costs to be incurred in connection with performing such Plan.
5.3 SALES EFFORTS IN THE CO-PROMOTION TERRITORY.
(a) As part of the Commercialization Plan for the Co-Promotion
Territory for each year, the JCC and Management Committee shall determine the
targeted level of Gross Sales of the applicable Collaboration Product for the
calendar year covered by such Plan and the targeted level of Gross Sales for
each potential market or account (I.E.,group purchasing organizations, managed
care organizations, tertiary care hospitals, primary care hospitals, etc.),
taking into account the relative difficulty of selling into such market or
account and the relative potential of each such market or account. The JCC and
Management Committee shall also include in the Commercialization Plan each
Party's Sales Target for such markets, based on each Party's agreed level of
Sales Target as set forth in Section 5.3(b) below, and shall review and approve
each Party's annual budget for Sales Costs. The Parties agree to allocate such
markets and accounts in an unbiased manner based on objective, quantifiable
information and market research data with the objectives of allocating to each
Party markets and accounts from which each such Party will have the opportunity
to attain its Sales Target and of maximizing Operating Profits. Notwithstanding
the commercially reasonable and diligent efforts of the Parties to effect an
objective allocation of individual accounts and markets between the Parties, the
Parties recognize that it may be necessary from time to time for the JCC to
reassign individual accounts in order to give each Party responsibility for a
set of accounts or markets that in the aggregate represent the targeted market
opportunity for each Party. The JCC shall review the allocation of accounts not
more frequently than once per year and at the end of the year. All adjustments
by the JCC in the allocation of accounts shall be made as quickly as practicable
with a view to minimizing the dislocation of employees of a Party or their
incentives, such as by making the
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minimum number of adjustments and making adjustments with respect to accounts
primarily when turnover occurs in the field representatives for such account.
(b) [ ] shall have the obligation to attain []
] of the total Sales Target for each Collaboration Product in the Co-
Promotion Territory for each Plan year, PROVIDED, HOWEVER, in the first two (2)
years of commercial sales of the first Collaboration Product Scios Nova will
have the right to select an obligation for (i) [ ], (ii) []
] or (iii) [ ] of the targeted level of Gross Sales
and Genentech will provide the remainder of the targeted level of Gross Sales in
such years. Scios Nova shall notify Genentech no later than one (1) month after
submission of an NDA for such Collaboration Product in the Co-Promotion
Territory (provided that Genentech has submitted and the JCC has reviewed an
initial Commercialization Plan no later than sixty (60) days before the NDA
filing) of what level of the targeted level of Gross Sales Scios Nova intends to
commit for the first two (2) years after launch.
(c) After the first two years after the commercial introduction of
a Collaboration Product, if either Party fails to achieve its Sales Target with
respect to a Collaboration Product in a country in the Co-Promotion Territory,
the Parties will meet to discuss the circumstances giving rise to the shortfall.
Thereafter, if a Party does not achieve at least [ ] of
its Sales Target (as set forth in the applicable Commercialization Plan) in a
given calendar year, there shall be no adjustment to such Party's share of
Operating Profits or Losses for the first such occurrence. Thereafter, if a
Party does not achieve at least [
] of its Sales Target in any calendar year, Operating Profits or
Losses for such year shall be allocated (i) [ ] to the
performing Party and [ ] to the under-performing Party if
the under-performing party achieves at least [ ] of its Sales
Target in such year and (ii) [ ] to the performing Party and
[ ] to the under-performing Party if the under-performing Party
achieves less than [ ] of its Sales Target in such year. Such
adjustment to Operating Profits or Losses shall be the performing Party's sole
and exclusive remedy with respect to the under-performing Party's failure to
achieve its Sales Target in such year so long as the under-performing Party's
efforts have been made in good faith. If both Parties underperform in any year,
there shall be no automatic adjustment and the Parties shall meet to discuss in
good faith whether there should be an adjustment to the division of Operating
Profits or Losses.
(d) The Parties shall recover their Sales Costs in accordance with
Exhibit A.
The JCC, in consultation with the JFC, will determine appropriate
mechanisms to optimize Operating Profits from sales of Collaboration Products in
other countries in the Co-Promotion Territory in light of the Parties'
respective resources at the time.
(f) To the extent not prohibited under agreements with Third Party
suppliers, each Party shall make available to the other Party information
concerning its systems and methods for distribution, marketing and sales
management. The Lead Party shall endeavor to adopt systems and methods which
optimize the commercialization of each Collaboration Product and are convenient
to the other Party. If the Lead Party elects to adopt all or part of a system
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of the other Party, then the other Party shall provide (to the extent it is
contractually able to do so) all software and information and reasonably assist
the Lead Party to implement such system. If Scios Nova so adopts a system from
Genentech, then Scios Nova shall have the right to use it in marketing any of
its products outside of the collaboration.
5.4 RIGHT TO ENGAGE THIRD PARTIES. If a Party determines that it needs
promotion support to achieve its Sales Target under the applicable
Commercialization Plan and the other Party does not provide it, then such Party
may, at its cost and with the approval of the JCC and the Management Committee,
contract for additional promotion support from a Third Party. Any other use of
Third Parties such as the sublicensing of Third Parties with respect to Co-
Promotion must be approved by the JCC and the Management Committee.
5.5 SALES AND DISTRIBUTION. Unless otherwise agreed, the Lead Party shall
have the sole responsibility with respect to the following (PROVIDED, HOWEVER,
that Genentech shall have the sole responsibility with respect to the following
in the first two (2) years after launch of the first Collaboration Product if
Scios Nova elects not to supply [ ] of the targeted level of
Gross Sales in such years as provided in Section 5.3(b)):
(a) Booking sales for and distributing the Collaboration Products
for which it is acting as Lead Party. If the other Party receives any orders
for such Products, it shall refer such to the Lead Party. The Parties agree
that within the Co-Promotion Territory, no Collaboration Product will be bundled
with any other pharmaceutical product marketed by a Party for the benefit of
such other product.
(b) Handling all returns of the Collaboration Products for which it
is acting as Lead Party. If such a Product is returned to the other Party, it
shall promptly be shipped to the facility responsible for shipment of such
Product in the country in question to the attention of the Returned Goods
Department or another location as may be designated by the Lead Party.
(c) Handling all recalls of the Collaboration Products for which it
is acting as Lead Party. The other Party will make available to the Lead Party,
upon request, all of its pertinent records which the Lead Party may reasonably
request to assist the Lead Party in effecting any recall.
(d) Handling all aspects of order processing, invoicing and
collection, Product distribution, inventory and receivables, and collection of
data of sales to hospitals and other end users (E.G., DDD data).
5.6 MARKETING AND PROMOTIONAL MATERIALS. All marketing and promotional
materials related to Collaboration Products shall be prepared by the Lead Party,
or Genentech, in the case of the first Collaboration Product, prior to launch
and for the first two (2) years thereafter, subject to review and approval by
the JCC. The Lead Party shall be entitled to select any Third Parties involved
in the preparation of such materials, subject to JCC approval as part of
determining the annual budget under the Commercialization Plan. With respect to
written and visual promotional or educational materials, to the extent such
materials identify or otherwise make reference to
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either of the Parties, Scios Nova and Genentech shall both be presented and
described with equal prominence and emphasis as having joined and participated
in the development and joint commercialization of the applicable Collaboration
Product, as permitted by the applicable laws and regulations of each country in
which such materials are to be presented. All documentary information,
promotional material and oral presentations (where practical) regarding the
detailing and promoting of Collaboration Products shall state this arrangement
and display the names and logos of Scios Nova and Genentech with equal
prominence.
5.7 TRAINING PROGRAM. Genentech shall develop training programs relating
to the Collaboration Products for the sales forces of each respective Party and
for any Third Parties engaged in selling or promotion, and shall assign
responsibility to itself, the other Party or a Third Party for the preparation
of materials and conduct of training. The Parties agree to utilize such
training programs on an ongoing basis to assure a consistent, focused
promotional strategy. The initial training shall be carried out at a time which
is mutually acceptable to the Parties, and which is prior to but reasonably near
the date on which Regulatory Approval is expected. As additional members are
added to the Parties' respective sales forces, training will be given to groups
of the newly selected members.
ARTICLE 6.
DEVELOPMENT AND COMMERCIALIZATION IN LICENSED TERRITORY
6.1 DEVELOPMENT EFFORTS. Genentech will use commercially reasonable and
diligent efforts to select Collaboration Products for development and to develop
each Collaboration Product, including pursuing preclinical development and
clinical development of such Collaboration Product and obtaining Regulatory
Approvals therefor in all countries in the Licensed Territory, taking into
account the scientific and commercial potential of such Collaboration Products,
including, without limitation, each of the potential indications in the Field
for such Products.
6.2 DEVELOPMENT MILESTONES FOR THE LICENSED TERRITORY. In any event, and
unless the Parties otherwise agree in writing, all of Genentech's rights as to
the Licensed Territory under this Agreement shall, at Scios Nova's option, be
converted to a non-exclusive license if Genentech fails to file a Drug Approval
Application for Auriculin with the Committee for Proprietary Medicinal Products
("CPMP"), (or if the CPMP is not operative at such time with the appropriate
regulatory authorities in two Major European Countries), within one year of the
filing of an NDA in the United States for Auriculin that the FDA has accepted,
PROVIDED, HOWEVER, that if Genentech demonstrates that the CPMP or such
regulatory authorities require a substantially different data package than that
submitted with such NDA, the Parties will discuss in good faith an extension to
such deadline, but in no event (other than force majeure event as provided in
Section 18.4) shall such deadline be extended beyond the first anniversary of
receipt of Regulatory Approval of Auriculin in the United States.
6.3 DEVELOPMENT MILESTONES FOR JAPAN. Prior to the [ ] of
receipt of the data from Scios Nova's current Phase III Clinical Trial,
Genentech shall provide Scios Nova with written notice as to whether Genentech
intends to develop and market Auriculin in Japan
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and if so, also provide its proposed development and commercialization strategy
for Auriculin in Japan. If Genentech notifies Scios Nova that it does not
intend to develop and market Auriculin in Japan or fails to provide notice that
it is proceeding, Genentech's rights under this Agreement will terminate as to
Japan effective upon receipt of such notice. If Genentech notifies Scios Nova
that it does intend to develop and market Auriculin in Japan, it shall use
commercially reasonable and diligent efforts to execute substantially the
development strategy and associated development plan for Auriculin in Japan,
unless the applicable regulatory authorities require additional pre-clinical and
clinical studies or the like. In addition, on or before January 1 of each year
thereafter, Genentech shall provide to Scios Nova a status report and updated
development plan for Auriculin in Japan. The Parties intend that the
development plan will become more detailed as Genentech develops Auriculin in
Japan. This Section 6.3 shall be in addition to the general diligence
obligation set forth in Section 6.1 which shall not be affected hereby.
6.4 MARKETING EFFORTS. Genentech will use commercially reasonable and
diligent efforts to commercialize each Collaboration Product that receives
Regulatory Approval in each country in which such approval is granted, taking
into account the scientific and commercial potential for such Collaboration
Product, including without limitation each of the potential indications
therefor.
6.5 MARKETING MILESTONES.
(a) If Genentech fails to make its first commercial sale of a
Collaboration Product in a particular country in the Licensed Territory within a
[ ] period after Genentech has received Regulatory Approval in
that country, then, at Scios Nova's election, Genentech's rights under this
Agreement with respect to such Collaboration Product shall become non-exclusive
in that country. Such rights shall become nonexclusive immediately upon receipt
of written notice from Scios Nova.
(b) If Genentech fails to make its first commercial sale of a
Collaboration Product in two Major European Countries within a [ ]
period after Genentech has received Regulatory Approval of such Collaboration
Product in each such Major European Country, then, at Scios Nova's election,
Genentech's rights under this Agreement with respect to such Collaboration
Product shall become non-exclusive as to the Licensed Territory. Such rights
shall become non-exclusive immediately upon receipt of written notice from Scios
Nova.
(c) In any event, and unless the Parties otherwise agree,
Genentech's rights under this Agreement will become non-exclusive if Genentech
fails to pay Scios Nova aggregate royalties under Section 7.5(a) as to Scios
Nova Products of at least [ ] for the Licensed Territory in any calendar
year after the fourth calendar year following the first commercial sale of a
Collaboration Product in any Major European Country; PROVIDED, HOWEVER, that Net
Sales in the United States of such Collaboration Product(s) equal or exceed []
] in such calendar year (net of Third Party royalty offsets provided in
Sections 9.6 and 12.5). Such rights shall become non-exclusive immediately upon
receipt of written notice from Scios Nova.
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(d) Genentech's obligations under this Section 6.5 shall be
extended or abated to the extent that any failure to perform such marketing
milestone is delayed or prevented primarily because of (i) any material failure
of Scios Nova, its licensees or suppliers to perform hereunder, (ii) an action
of Scios Nova, its licensees or suppliers which causes such failure, (iii) the
revocation of the applicable Regulatory Approval outside of Genentech's control
or (iv) a legal prohibition from marketing imposed by a competent authority in
the applicable jurisdiction.
(e) Effective upon the conversion of any of Genentech's rights to
non-exclusive, Scios Nova and its sublicensees shall have a permanent and
irrevocable right of access and reference to all regulatory submissions
including all Drug Approval Applications and Regulatory Approvals for the
Collaboration Product or Products and in such country or countries as to which
Genentech's rights have become non-exclusive, and Genentech shall notify the
applicable regulatory authorities no later than thirty (30) days thereafter. If
such right of access and reference is not sufficient to permit Scios Nova or its
sublicensees to file Drug Approval Applications and receive Regulatory Approval
for the sale of the applicable Collaboration Product in the applicable country,
Genentech shall, within sixty (60) days of receipt of notice from Scios Nova,
provide Scios Nova with the complete data package that Genentech used in such
regulatory submissions in order to allow Scios Nova or its sublicensees to file
such Drug Approval Applications in its own name.
6.6 DEVELOPMENT COSTS, MARKETING COSTS AND COST OF GOODS SOLD. Genentech
shall bear all Development Costs and Marketing Costs related to the development
and commercialization of the Collaboration Products in the Licensed Territory.
Development Costs and Marketing Costs which are used in both the Licensed
Territory and Co-Promotion Territory shall be allocated as described in Exhibit
A. Genentech will also have the obligations with respect to the manufacture and
purchase of Collaboration Products, as provided in Article 8 below.
6.7 COOPERATION ON DEVELOPMENT AND MARKETING EFFORTS. To facilitate
cooperation between the Parties on the worldwide development and marketing of
Collaboration Products, Genentech shall prepare and submit to the JDC or JCC, as
appropriate, and the Management Committee for review and comment a status report
of Genentech's development and commercialization plans and programs for each
Collaboration Product. Such status report shall be submitted to the JDC and
Management Committee (a) with respect to Auriculin, within ninety (90) days
after the JDC and Management Committee determine to proceed with filing an NDA
in the Co-Promotion Territory and (b) with respect to other Collaboration
Products, within ninety (90) days after the JDC and Management Committee have
selected a Collaboration Product for development as provided in Section 3.2.
Thereafter, Genentech shall submit a revised and updated development and
commercialization status report to the JDC or JCC, as appropriate, and the
Management Committee at least semi-annually so long as such Collaboration
Product remains under development or is being marketed in the Licensed
Territory. Genentech shall consider in good faith any comments made by Scios
Nova in connection with such reports, but shall not be required to incorporate
such comments into the development and commercialization plan. Genentech will
provide a written response with respect to any comments not incorporated in the
revised development or commercialization plan. In addition, Genentech agrees to
provide such
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information regarding its development and marketing of Collaboration Products as
Scios Nova may reasonably request.
ARTICLE 7.
MILESTONES, PROFIT SHARING AND ROYALTIES
7.1 MILESTONE PAYMENTS.
(a) Genentech shall make the following payments to Scios Nova,
within 30 days after the first achievement of each of the milestones by
Auriculin:
MILESTONE PAYMENT
NDA approval in the Field and in the United States $30.0 million
Upon Royalty-Bearing Sales in the Licensed Territory [ ]
(excluding Japan) of [ ] in any 12
month period
Upon Regulatory Approval in Japan [ ]
Once each such milestone has been paid, Genentech shall have no obligation to
make the analogous milestone payment under Section 7.1(b).
(b) If a Collaboration Product that is a Scios Nova Product other
than Auriculin first meets any of the following milestones, then the remaining
milestone payments under Section 7.1(a) shall no longer apply and Genentech
shall make the following milestone payments to Scios Nova, within 30 days after
the first achievement of each of the milestones by such other Scios Nova
Product.
MILESTONE PAYMENT
NDA approval in the Field and in the United States [ ]
Upon Royalty-Bearing Sales in the Licensed Territory [ ]
(excluding Japan) of [ ] in any 12
month period
Upon Regulatory Approval in Japan [ ]
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If each such milestone is subsequently met by Auriculin, then and only then,
Genentech shall pay again the milestones set forth in this Section 7.1(b) within
30 days after the achievement of each of the milestones by Auriculin.
7.2 SHARE OF OPERATING PROFITS OR LOSSES. Scios Nova and Genentech shall
share in Operating Profits or Losses from sales of Collaboration Products in the
Co-Promotion Territory as provided in Exhibit A.
7.3 TERM OF OPERATING PROFITS OR LOSSES. The Parties shall share
Operating Profits or Losses hereunder in the Co-Promotion Territory until the
Parties mutually agree to terminate the collaboration in the Co-Promotion
Territory or as provided in Section 7.4 below.
7.4 SALE OR PURCHASE OF CO-PROMOTION RIGHTS.
(a) Either Party may, by written notice by certified mail, return
receipt requested, to the other Party (the "Auction Notice"), indicate a single
price (the "Auction Price") at which such Party (the "Offering Party") would be
willing to sell all of its rights hereunder with respect to the Collaboration
Products in the Co-Promotion Territory (the "Sales Option") or purchase from the
other Party all of the rights held by such other Party hereunder with respect to
the Collaboration Products in the Co-Promotion Territory (the "Purchase
Option"). This right will be exercisable at any time after the tenth
anniversary of the first commercial sale in the Co-Promotion Territory of the
first Collaboration Product or earlier, if (i) a single stockholder or group of
affiliated stockholders who would be required to file a Schedule 13D under the
Securities Act of 1934, as amended, acquires voting stock of Scios Nova so that
its total holdings of such stock equal or exceed fifty percent (50%) of the
then outstanding voting stock of Scios Nova, or (ii) a Third Party acquires all
or substantially all of the assets of Scios Nova, in which case Genentech must
exercise such right with ninety (90) days after the date on which such
stockholder or group of stockholders passes the fifty percent (50%) threshold or
the date of such acquisition. Scios Nova shall promptly notify Genentech of
such event. The Auction Price may be in the form of (i) cash, (ii) a royalty on
sales of the Collaboration Product(s) in the Co-Promotion Territory or (iii)
some combination of the foregoing.
(b) Within ninety (90) days of receipt of the Auction Notice, the
Party receiving such notice (the "Receiving Party") shall notify the Offering
Party in writing whether it elects to exercise the Sales Option or the Purchase
Option; PROVIDED, HOWEVER, if the Receiving Party does not notify the Offering
Party of its election within such period, the Receiving Party shall be deemed to
have elected to the Sales Option and thereby to have sold its rights hereunder
with respect to the Collaboration Products in the Co-Promotion Territory. If
the Offering Party has not received a response from the Receiving Party within
seventy (70) days after the Offering Party sends its initial notice hereunder,
the Offering Party shall on the seventieth (70th) day after sending such initial
notice, deliver a second notice by certified mail, return receipt requested.
(c) On that date which is ninety (90) days after receipt of
notification pursuant to Section 7.4(b),
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(i) if the Sales Option was elected (or deemed to be
elected) pursuant to Section 7.4(b), all rights held by the Offering Party
hereunder with respect to the Collaboration Products in the Co-Promotion
Territory shall terminate and the Receiving Party shall pay the Offering Party
[ ] of the Auction Price that is payable in cash on such date;
(ii) if the Purchase Option was elected pursuant to Section
7.4(b), all rights held by the Receiving Party hereunder with respect to the
Collaboration Products in the Co-Promotion Territory shall terminate and the
Offering Party shall pay the Receiving Party [ ] of the Auction
Price that is payable in cash on such date;
(iii) the purchasing Party's rights under the selling Party's
Patents and Know-how shall become exclusive (with right of sublicense) in the
Field and in the Co-Promotion Territory and the selling Party's license under
the purchasing Party's Patents and Know-how in the Field and in the Co-Promotion
Territory shall terminate; and
(iv) the selling Party shall use commercially reasonable and
diligent efforts to transfer to the purchasing Party any technology, materials,
data and regulatory submissions so as to fully enable the purchasing Party to
develop and commercialize the Collaboration Products. The remaining [ ]
of the Auction Price that is payable in cash shall be paid upon the earlier to
occur of (A) thirty (30) days of the date thereafter on which the purchasing
Party manufactures and sells any Collaboration Product in the Co- Promotion
Territory or (B) the date on which such technology transfer is substantially
complete.
7.5 ROYALTIES.
(a) Genentech shall pay Scios Nova a royalty on Royalty-Bearing
Sales of Collaboration Products that were initially Scios Nova Products in the
Licensed Territory as follows: (i) the royalty rate shall be [ ]
of the first [ ] of Royalty-Bearing Sales in the Licensed Territory in
any calendar year, and (ii) the royalty rate shall be []
] of Royalty-Bearing Sales on amounts exceeding [ ] of Royalty-
Bearing Sales in the Licensed Territory in any calendar year.
(b) Genentech shall pay Scios Nova a royalty of [ ]
on Royalty-Bearing Sales in the Licensed Territory of Collaboration Products
that were initially Genentech Products.
(c) If either Party commercializes an Independent Product pursuant
to Section 2.6, it shall pay the other Party a royalty of [ ] of
Royalty-Bearing Sales of such Product if the manufacture, use or sale of such
Product is covered by such other Party's Patent in the country of manufacture or
sale, and [ ] of Royalty-Bearing Sales in such country, if not.
(d) If either Party commercializes an Independent Product which has
been converted from a Collaboration Product to an Independent Product pursuant
to Section 4.5 hereof subsequent to the first Regulatory Approval for sale of a
Collaboration Product, the
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commercializing Party shall pay the terminating Party a royalty on Royalty-
Bearing Sales of such Independent Product as follows:
(i) if such termination is effective prior to the Phase III
Decision Date, the royalty rate shall be [ ] of Royalty-Bearing
Sales; and
(ii) if such termination is effective on or after the Phase III
Decision Date, the royalty rate shall be [ ] of the first []
] of Royalty-Bearing Sales worldwide in any calendar year and []
] of Royalty-Bearing Sales on amounts exceeding [ ] of Royalty-Bearing
Sales worldwide in any calendar year; and
(iii) notwithstanding Sections 7.5(d)(i) and (ii), if Scios Nova
elects to terminate its participation with respect to any Genentech Product and
such termination is effective prior to the Phase III Decision Date (A) the
royalty rate in the Licensed Territory shall be []
] of Royalty-Bearing Sales if the manufacture, use or sale of such
Independent Product is covered by a Scios Nova Patent in the country of
manufacture or sale or [ ]
of Royalty-Bearing Sales if the manufacture, use or sale of such Independent
Product is not covered by a Scios Nova Patent in such country and if Scios Nova
bore one-half of the Development Costs for such Product through Phase II
Clinical Trials and (B) the royalty rate in the Co-Promotion Territory shall be
that rate otherwise provided for in Section 7.5(d)(i) or 7.5(d)(ii).
(e) If either Party commercializes an Independent Product which has
been converted from a Collaboration Product to an Independent Product pursuant
to Section 4.5 hereof prior to the first Regulatory Approval for sale of a
Collaboration Product, the commercializing Party shall pay the terminating Party
a royalty on Royalty-Bearing Sales of such Independent Product as follows:
(i) if such termination is effective prior to the Phase III
Decision Date, the royalty rate shall be [ ] of
Royalty-Bearing Sales; and
(ii) if such termination is effective on or after the Phase III
Decision Date, the royalty rate shall be [ ] on the first []
] of Royalty-Bearing Sales worldwide in any calendar year and [ ]
on amounts exceeding [ ] of Royalty-Bearing Sales in any calendar year;
and
(iii) notwithstanding Sections 7.5(e)(i) and (ii), if Scios Nova
elects to terminate its participation with respect to any Genentech Product and
such termination is effective prior to Phase III Decision Date (A) the royalty
rate in the Licensed Territory shall be []
] of Royalty-Bearing Sales if the manufacture, use or
sale of such Independent Product is covered by a Scios Nova Patent in the
country of manufacture or sale and []
] of Royalty-Bearing Sales if the manufacture, use or
sale of such Independent Product is not covered by a Scios Nova Patent in such
country and if Scios Nova bore one-half of the Development Costs for such
Product through Phase II Clinical Trials and (B) the royalty
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rate in the Co-Promotion Territory shall be that rate otherwise provided for in
Section 7.5(e)(i) or 7.5(e)(ii).
7.6 ROYALTY PAYMENT REPORTS. Royalty payments under this Agreement shall
be made to the receiving Party or its designee quarterly within sixty (60) days
following the end of each calendar quarter for which royalties are due from the
selling Party. Each royalty payment shall be accompanied by a report
summarizing the Royalty-Bearing Sales during the relevant three-month period.
7.7 TERM OF ROYALTY OBLIGATIONS.
(a) Genentech shall pay royalties hereunder with respect to each
Collaboration Product in each country until the later to occur of (i) the
expiration of the last to expire of the Scios Nova Patents or Genentech Patents
specifically covering the manufacture, use or sale of such Product in such
country, or (ii) [ ] years from the date of first commercial sale in such
country. In consideration of the assignment of trademark rights in the Licensed
Territory, Genentech shall, in addition, thereafter pay a royalty of []
] of Royalty-Bearing Sales of Auriculin or Natrecor, as applicable, until the
date [ ] years from the date of the first commercial sale of Auriculin
or Natrecor, as applicable, in such country.
(b) The Parties shall pay royalties hereunder with respect to (x)
each Independent Product which became an Independent Product pursuant to Section
2.6 above and (y) any Genentech Product which became a Collaboration Product
pursuant to Section 2.2(ii) and which thereafter became an Independent Product
pursuant to Section 4.4, in each country from the date of first commercial sale
of any Collaboration Product until the first to occur of (i) the date on which
neither Party is no longer selling any Collaboration Product hereunder or
(ii) the later to occur of (A) the expiration of the last to expire of the Scios
Nova Patents or Genentech Patents specifically covering the manufacture, use or
sale of such Product in such country or (B) ten (10) years from the date of
first commercial sale of such Product in such country.
(c) The Parties shall pay royalties hereunder with respect to each
Independent Product which became an Independent Product pursuant to Section 4.4
above (other than any Genentech Product which became a Collaboration Product
pursuant to Section 2.2(ii) and which thereafter became an Independent Product
pursuant to Section 4.4), in each country from the date of first commercial sale
of such Independent Product until the later to occur of (i) the expiration of
the last to expire of the Scios Nova Patents or Genentech Patents specifically
covering the manufacture, use or sale of such Product in such country or (ii) []
] years from the date of first commercial sale of such Product in such
country.
(d) Upon expiration of the royalty term for a Collaboration Product
in a country as described above, the Party paying such royalties shall
thereafter have a nonexclusive, paid-up license to make, use, sell, offer for
sale, have sold and import that Collaboration Product in that country.
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7.8 TAXES. The Party receiving royalties shall pay any and all taxes
levied on account of, or measured exclusively by, royalties it receives under
this Agreement. If laws or regulations require that taxes be withheld, the
selling Party will (i) deduct those taxes from the remittable royalty,
(ii) timely pay the taxes to the proper taxing authority, and (iii) send proof
of payment to the other Party within sixty (60) days following that payment.
The selling Party agrees to take all lawful and reasonable efforts to minimize
such taxes to the other Party.
7.9 BLOCKED CURRENCY. In each country where the local currency is blocked
and cannot be removed from the country, at the election of the selling Party,
royalties accrued in that country shall be paid to the receiving Party in the
country in local currency by deposit in a local bank designated by the receiving
Party.
7.10 FOREIGN EXCHANGE. For the purpose of computing Royalty-Bearing Sales
for Products sold in a currency other than United States Dollars, such currency
shall be converted into United States Dollars in accordance with such Party's
customary and usual translation procedures consistently applied.
7.11 PAYMENTS TO OR REPORTS BY AFFILIATES. Any payment required under any
provision of this Agreement to be made to either Party or any report required to
be made by any Party shall be made to or by an Affiliate of that Party if
designated by that Party as the appropriate recipient or reporting entity.
7.12 SALES BY SUBLICENSEES. In the event either Party grants licenses or
sublicenses to others to make or sell Independent Products, or Genentech grants
such rights with respect to sales of Collaboration Products in the Licensed
Territory, such licenses or sublicenses shall include an obligation for the
licensee or sublicensee to account for and report its Royalty-Bearing Sales of
such Products on the same basis as if such sales were Royalty-Bearing Sales by
the Party granting the license or sublicense, and such Party shall pay royalties
to the Party receiving royalties under this Agreement as if the Royalty-Bearing
Sales of the sublicensee were Royalty-Bearing Sales of the Party granting the
license or sublicense.
7.13 SPILLOVER SALES.
(a) For the purposes of this Section 7.13, the term "Spillover Sales"
means
[]
]
(b) The Parties shall not be required hereunder to account for
Spillover Sales unless and until (i) the first Collaboration Product has
received Regulatory Approval for sale, (ii) a Product has received Regulatory
Approval for sale in the same country and (iii) the Parties have established the
existence for such Spillover Sales as provided in this Section 7.13.
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(c) At any time after a Product has received Regulatory Approval for
sale in a country in which a Collaboration Product has received such Approval in
the Field, a Party may invoke this Section 7.13 by providing the other Party
written notice and by requesting an initial study of Spillover Sales at the
requesting Party's expense, based on data obtained from IMS of America or
equivalent ("IMS") in the United States (and other countries to the extent that
IMS obtains data from such country). If such initial study discloses Spillover
Sales of greater than [ ] of Gross Sales of Collaboration Products
in that country, the requesting Party may proceed with an audit of Spillover
Sales as provided in Section 7.13(d) below.
(d) If following the initial study under Section 7.13(c) IMS
concludes that Spillover Sales may exceed [ ] of Gross Sales of
Collaboration Products, then the requesting Party may invoke an audit of
Spillover Sales by providing the other Party written notice and the results of
the IMS analysis. The audit will be performed by a market research
organization other than IMS that is selected by the JCC. If the JCC is unable
to agree on a market research organization within thirty (30) days of such
notice, then the selection shall be handled pursuant to Article 17 below.
(e) The requesting Party shall bear the costs of the audit, unless
the audit discloses Spillover Sales of greater than [ ] of Gross
Sales of Collaboration Products, in which case the Party enjoying the net
benefit from the Spillover Sales shall bear the costs. If the audit shows
Spillover Sales of less than [ ], no further audit may be
conducted for the next two calendar years.
(f) The audit shall be performed according to a methodology that
meets the criteria set forth on Exhibit D. In this regard, the Parties agree to
define an exact audit methodology meeting such criteria starting approximately
six (6) months after receipt of Regulatory Approval for sale of any
Collaboration Product. Such methodology shall include the selection of the firm
to conduct the audit, or designation of not more than three acceptable firms.
If the Parties are unable to agree on such a methodology within twelve (12)
months after receipt of such Regulatory Approval, each Party will appoint an
expert and the experts will appoint a third expert. Each Party's expert will
propose a methodology for the audit and the third expert will define the
methodology to be used, which may or may not be the same methodology as proposed
by either Party. In such event, each Party shall bear the fees and expenses of
its own expert and the fees and expenses of the third expert shall be divided
equally.
(g) If the audit discloses Spillover Sales of greater than
[ ] of Gross Sales of Collaboration Products, the Party selling
the Product shall (i) pay a royalty of [ ] of the
Spillover Sales in the Co-Promotion Territory to the collaboration (which
shall be included as Other Operating Income/Expense) and (ii) pay a royalty
of [] ] of the Spillover Sales in the Licensed Territory, all of which
the recipient shall be entitled to retain; PROVIDED, HOWEVER, that to the
extent that the Spillover Sales were made by third party licensee of a
Party, that Party's royalty obligation under this clause (ii) shall be
limited to the lesser of the Party's actual royalty receipts in the Field
from its licensee(s) or [ ] of such licensee's Spillover Sales.
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(h) If a Party selling a Product believes that Spillover Sales would
be a negative number (i.e., that sales of the Collaboration Product outside of
the Field for approved indications of the Product exceed sales of the Product
within the Field), then it may invoke the same procedure outlined above, subject
to the same rules regarding allocation of expense, the ability to proceed with
an audit of Spillover Sales, and a royalty payable by the collaboration to the
Party harmed by the Spillover Sales.
ARTICLE 8.
MANUFACTURE AND SUPPLY
8.1 PROCESS DEVELOPMENT, MANUFACTURING APPROVALS. Scios Nova will use
commercially reasonable and diligent efforts, at its own expense, to develop a
process for the manufacture of Auriculin and to scale up that process to a scale
sufficient to manufacture and supply the anticipated demand for Auriculin in the
United States at the time of NDA approval and in Europe at the time of CPMP
approval (or equivalent) in Europe and at the time of Regulatory Approval in
Japan. The continued development of the process for the manufacture of
Auriculin as well as the scale up of that process and all material issues
incident to the development of the ability to produce Auriculin for commercial
purposes in sufficient quantity and in a timely manner will be within the
purview of the Joint Development Committee. The costs associated with the
development and scale up of a process to manufacture Auriculin for sale in the
Co-Promotion Territory will be a Development Cost. Scios Nova will use its
commercially reasonable and diligent efforts to make necessary filings to
obtain, or to cause [ ] (pursuant to a Supply Agreement, dated
March 21, 1994, between Scios Nova and [ (the "["]
] Agreement")), [ ] or any other Third Party
supplier of Auriculin to make necessary filings to obtain, at Scios Nova's
expense, Regulatory Approval for its part of the manufacture for sale of
Auriculin in the Co-Promotion Territory as part of the approval of an NDA for
Auriculin in the United States and the equivalent in Canada and to either make
necessary filings to obtain, or cause [ ], [ ] or any
other Third Party supplier of Auriculin to make necessary filings to obtain,
Regulatory Approval for its part of the manufacture for sale of Auriculin in the
countries in the Licensed Territory as part of the approval of Auriculin for use
and sale in those countries. Scios Nova will provide, or will cause a Third
Party supplier of Auriculin to provide, Genentech, at Genentech's expense, with
all information that was used or intended to be used in regulatory submissions
for Regulatory Approval for the sale of Auriculin and Scios Nova Products in the
Licensed Territory or alternatively provide Genentech with right of reference to
any filing with a Regulatory Authority which is necessary for approval. With
respect to other Collaboration Products, the Lead Party (in the case of Scios
Nova with respect to the Co-Promotion Territory and the Licensed Territory and
in the case of Genentech with respect to the Co-Promotion Territory) shall have
the same obligations and responsibilities described above with respect to each
Collaboration Product for which it is a Lead Party.
8.2 MANUFACTURE AND SUPPLY OF PRODUCTS.
(a) Scios Nova will use commercially reasonable and diligent efforts,
pursuant to a Supply Agreement to be entered into between the Parties prior to
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the date of the first submission by Genentech of an application or registration
for Regulatory Approval for such Product in the Licensed Territory to
manufacture Scios Nova Products and to supply Genentech in a timely manner with
such quantities of Scios Nova Products in bulk form as Genentech may
reasonably order from time to time for sale of such Scios Nova Products in the
Licensed Territory. In addition, Scios Nova will use commercially reasonable
and diligent efforts, pursuant to a Supply Agreement to be entered into between
the Parties prior to the date of the first submission of an application for
Regulatory Approval of such Product in the Co-Promotion Territory, to
manufacture or have manufactured Scios Nova Products in finished form for sale
in the Co-Promotion Territory and to supply in timely manner to that Party
responsible for distributing the Product in the Co-Promotion Territory.
(b) Genentech will use commercially reasonable and diligent efforts,
pursuant to a Supply Agreement to be entered into between the Parties prior to
the date of the first submission by Genentech of an application for Regulatory
Approval for such Product in the Co-Promotion Territory, to manufacture
Genentech Products for the sale of such Genentech Products in the Co-Promotion
Territory and to supply them in a timely manner to that Party responsible for
distributing the Product in the Co-Promotion Territory.
8.3 THIRD PARTY SUPPLY.
(a) The Lead Party may contract with a Third Party for the
manufacture and supply of all or any portion a Collaboration Product. In such
event, the Lead Party shall notify the other Party in writing of its intention
to contract with a Third Party for such supply.
(b) During the sixty (60) day period following such notice from the
Lead Party, the other Party shall have the right to decide to produce either
itself and/or through a Third Party, that portion of the Collaboration Product
for sale in the Licensed Territory that the Lead Party proposes to contract to a
Third Party. If the other Party decides to produce such quantities of the
Collaboration Product for sale in the Licensed Territory either itself and/or
through a Third Party, it shall notify the Lead Party in writing of such during
such sixty (60) day period.
(c) In addition, during such sixty (60) day period, the other Party
shall have the right to offer to produce itself that portion of the
Collaboration Product for sale in the Co-Promotion Territory that the Lead Party
proposes to contract to a Third Party. If the other Party decides to offer to
produce that portion of the Collaboration Product for sale in the Co-Promotion
Territory, it shall notify the Lead Party in writing of such during such sixty
(60) day period and shall include with such notice the terms of its offer to
produce the Collaboration Product for sale in the Co-Promotion Territory,
including price, quantity, quality, and capacity. The Lead Party shall accept
such offer if it is competitive with the terms a Third Party would be willing to
offer.
(d) In the event that the other Party exercises its rights to
manufacture in the Licensed Territory, or in the event that the Lead Party
accepts the non-Lead Party to supply for the Co-Promotion Territory, the Lead
Party shall promptly provide free of charge (except for any of the Lead Party's
reasonable out-of-pocket expense which shall be reimbursed to it) to the other
Party and/or the Third Party all process and manufacturing technology in its
possession and
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reasonably necessary to enable the other Party concurrently to manufacture the
Collaboration Product (subject to the assumption by such other Party of any
obligations with any Third Party licensor). The other Party shall thereafter
have a royalty-free, non-exclusive license to make and have made the
Collaboration Product pursuant to this Agreement for sale in the Licensed
Territory or the Co-Promotion Territory, as appropriate. The Lead Party shall
provide reasonable assistance (to be mutually agreed to) to the other Party in
such transfer with the goal of assuring that the needs of the Parties for a
supply a Collaboration Product for preclinical studies, clinical trials and
commercial sales are met in the applicable Territory.
(e) If the other Party does not exercise its rights under this
Section 8.3, or the Parties cannot agree on the terms of supply in the Co-
Promotion Territory, and the Lead Party contracts out the supply of such to a
Third Party, the Lead Party shall nevertheless remain responsible to the other
Party for an adequate supply of Collaboration Product (subject to the provisions
to this Agreement) at a cost which is comparable to that of products similar to
the Collaboration Product.
(f) This Section 8.3 shall not apply to the manufacture and supply of
Auriculin pursuant to agreements with [ ] and []
] or to the manufacture and supply of Natrecor pursuant to
agreements in effect as of the date on which Natrecor is included as a
Collaboration Product hereunder, subject to Section 2.7(a) above.
8.4 SPECIFICATIONS, COORDINATION WITH THIRD PARTY MANUFACTURERS OF
AURICULIN.
(a) The Parties agree that the manufacture of Collaboration Products
and the production of Collaboration Products as finished product must be in full
compliance with all aspects of current cGMPS for bulk product and final vial
production and shall be subject to a joint audit by Scios Nova and Genentech
(whether together or through a designee) of bulk drug manufacture, final drug
manufacture including aseptic filling operations and analytical testing and the
data resulting therefrom. In addition, the manufacture of Collaboration
Products for supply to Genentech for sale in the Licensed Territory must be in
full compliance with requirements in the various countries in the Licensed
Territory.
(b) If Genentech reasonably believes that a Third Party manufacturer
of Auriculin is or will be unable to meet the supply schedule for Auriculin, it
may so notify Scios Nova and Scios Nova will use commercially reasonable and
diligent efforts to cause the Third Party to address such inability to the
reasonable satisfaction of Genentech. If Scios Nova is unable to rectify the
inability of Third Party manufacturer, the Parties will discuss and implement a
coordinated strategy to cause the Third Party manufacturer to address such
inability and Genentech will be entitled to participate in discussions with such
Third Party manufacturer.
8.5 TRANSFER PRICE OF PRODUCTS. The Lead Party shall be entitled to
charge the collaboration its Cost of Goods Sold, on a Product-by-Product basis,
for Collaboration Products so supplied for sale in the Co-Promotion Territory.
The transfer price for Scios Nova Products supplied to Genentech for sale in the
Licensed Territory will be the Cost of Goods Sold plus [ ].
Scios Nova will invoice Genentech for shipments of such Scios Nova Products to
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the Licensed Territory on a shipment by shipment basis. Genentech shall pay
each invoice within thirty (30) days of receipt of the invoice.
8.6 MANUFACTURE OF COLLABORATION PRODUCTS FOR CLINICAL TRIALS.
(a) Scios Nova will supply in accordance with a mutually agreeable
supply schedule, reasonable quantities of Auriculin [ ] for clinical
trials in the Co-Promotion Territory.
(b) Scios Nova shall supply to Genentech, []
], reasonable quantities of
Collaboration Products that were initially Scios Nova Products (including
Auriculin) for preclinical studies and clinical trials in the Licensed
Territory.
(c) The Lead Party will supply, in accordance with a mutually
agreeable supply schedule, reasonable quantities of Collaboration Products
(other than Auriculin) for which it is Lead Party for preclinical studies and
clinical trials in the Co-Promotion Territory and shall charge the collaboration
the cost thereof as a Development Cost with respect to those quantities used in
the Co-Promotion Territory as described in Exhibit A.
8.7 SHORTAGE OF SUPPLY, INVENTORY.
(a) In the event that the Lead Party is unable to manufacture
sufficient quantities of Collaboration Products, the Parties shall
negotiate in good faith an allocation between the Co-Promotion Territory
and the Licensed Territory of the available Collaboration Product as well
as that to be subsequently manufactured. If the Parties are unable to
agree on such an allocation, then the Parties will allocate all available
and future quantities of the Collaboration Product, after taking into
account the inventories of the Collaboration Product in the countries in
which the Parties are marketing, between the Co-Promotion Territory and
the Licensed Territory based on
[ ] or, if the Collaboration
Product is not then being sold in both Territories, based on forecasted
supply schedules for the following [ ] (reasonably
determined by the JCC with respect to the Co-Promotion Territory and by
Genentech with respect to the Licensed Territory). The JCC and the JFC
will decide on an appropriate level of inventory for each Collaboration
Product in the Co-Promotion Territory prior to the launch of such Product.
(b) With respect to Natrecor, the Parties shall first negotiate in
good faith an allocation of supply inside the Field and outside the Field. If
the Parties are unable to agree on such an allocation, the Parties will first
allocate all available and future quantities of Natrecor, after taking into
account the inventories of Natrecor in the countries in which the Parties are
marketing, inside the Field and outside the Field based on the average numbers
of units invoiced [ ] or if Natrecor is not then being sold
inside and outside the Field, based on forecasted supply schedules for the
following [ ] (reasonably determined by the JCC with respect
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to sales in the Field in the Co-Promotion Territory, Genentech with respect to
sales in the Field in the Licensed Territory and Scios Nova with respect to
worldwide sales outside the Field). Thereafter, the Parties shall allocate
Natrecor between the Co-Promotion Territory and the Licensed Territory as
provided in Section 8.7(a).
8.8 INABILITY TO SUPPLY.
(a) If the Lead Party is unable for any reason to supply all of the
reasonably forecasted supply schedule for Collaboration Products for clinical
trials or commercial use as required as by this Agreement or is unable to
produce the commercial supply at a gross profit margin acceptable to the JCC as
falling within industry norms for this type of product and such inability
results in, or is reasonably likely to have, an adverse material impact on the
ability to conduct clinical trials of the Collaboration Product or to sell a
Collaboration Product as permitted hereunder or to have an adverse material
impact on the ability of the other Party to exercise its rights or fulfill its
obligations hereunder, the other Party shall provide notice of such adverse
material impact or the likelihood of such adverse material impact to the Lead
Party. The Parties will promptly thereafter meet to discuss the causes and
potential solutions to such inability to supply cost effectively the
Collaboration Product.
(b) The Lead Party shall have one hundred twenty (120) days after the
receipt of such notice from the other Party to cure such inability. If the Lead
Party does not cure or substantially cure such inability during the one hundred
twenty (120) day period or does not demonstrate to the other Party's
satisfaction that it will be able to substantially cure such inability within
the sixty (60) days next following the above one hundred twenty (120) day
period, then in addition to any other right or remedy the other Party may have
available, then (i) with respect to the Co-Promotion Territory, the JCC shall
recommend to the Parties a proposed solution to the inability to supply, which
may include the use of Third Party suppliers, or the grant to the other Party of
a non-exclusive right to manufacture the applicable Collaboration Product and
(ii) with respect to the Licensed Territory, the other Party shall thereafter
have, upon written notice to the Lead Party, the co-exclusive right and license
to produce and supply Collaboration Product for clinical trials and commercial
use in the Licensed Territory.
(c) If the other Party receives the right to manufacture and supply a
Collaboration Product hereunder, the Lead Party shall promptly provide to the
other Party or its designee, all of the technology and materials in the Lead
Party's possession and reasonably necessary to produce and supply the
Collaboration Product. The exercise of the right granted in this Section 8.8
will not preclude the other Party from pursuing any right which it may have
because of the Lead Party's inability to supply the requirements of a
Collaboration Product for clinical trials and commercial sale.
8.9 TERMINATION OF PARTICIPATION. If a Party elects to terminate its
participation in the development and commercialization of a Collaboration
Product pursuant to Section 4.5, and if such Party has the obligation to
manufacture and supply that Collaboration Product, it shall immediately provide
to the other Party if the other Party so requests all process and manufacturing
technology, material and data and, provide access to regulatory filings
sufficient
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to enable the other Party concurrently to produce and supply the non-terminating
Party's requirements of such Collaboration Product. Until the earlier of (i)
the date the other Party is able to manufacture and supply its own requirements
of Collaboration Products or (ii) two years, the obligation of the terminating
Party to manufacture and supply such Collaboration Product shall remain in
effect but the manufacturing Party shall be paid by the other Party the Cost of
Goods Sold for supply of such Product. The transferring Party shall provide
reasonable assistance to the other Party with respect to such transfer so as to
permit the other Party to begin manufacturing and supplying its requirements as
soon as possible to minimize any disruption in the continuity of supply. In
addition, the transferring Party shall provide a right of reference and access
to the other Party to all of the transferring Party's appropriate regulatory
filings for the manufacture of the Collaboration Product. This Section 8.9
shall not apply to the manufacture and supply of Natrecor.
8.10 TERM OF SUPPLY. Scios Nova's obligation to manufacture and supply
Scios Nova Products in the Co-Promotion Territory and Genentech's obligation to
manufacture and supply Genentech Products in the Co-Promotion Territory shall
terminate on the earlier to occur of the exercise of the Purchase Option or
Sales Option pursuant to Section 7.4 or the mutual agreement of the Parties to
terminate their rights and obligations to Co-Promote. Scios Nova's obligation
to manufacture and supply Scios Nova Products in the Licensed Territory shall
terminate at such time as Genentech no longer is obligated to pay Scios Nova
royalties in the Licensed Territory. At least twenty-four (24) months prior to
such termination, the Party whose obligation to manufacture and supply a
Collaboration Product is terminating shall provide to the other Party if the
other Party so requests all process and manufacturing technology, materials and
data and provide access to regulatory filings sufficient to enable the other
Party to produce and supply the other Party's requirements of Collaboration
Product and the other Party shall have a royalty-free, nonexclusive right, under
the transferring Party's Patents and Know-how, to make and have made that
Collaboration Product, subject to any royalty obligation to a Third Party. The
transferring Party shall provide reasonable assistance to the other Party with
respect to such transfer so as to permit the other Party to begin manufacturing
and supplying its requirements as soon as possible to minimize any disruption in
the continuing of supply. In addition, the party who is transferring the
technology and materials shall provide a right of reference and access to the
other Party to all of the transferring Party's appropriate regulatory filings
for the manufacture of the Collaboration Product. Notwithstanding the
foregoing, and except in the case of a transfer following exercise of the rights
under Section 7.4, the providing party may continue to manufacture the Product
for its own purposes.
ARTICLE 9.
LICENSES
9.1 PATENT LICENSES TO GENENTECH WITHIN THE FIELD. Scios Nova grants to
Genentech a worldwide license under the Scios Nova Patents and in the Field (a)
to develop, use, sell, offer for sale, have sold and import Collaboration
Products that were originally Scios Nova Products and to make and have made such
Collaboration Products to the extent provided under this Agreement and (b) to
develop, make, have made, use, sell, offer for sale, have sold and import
Collaboration Products that were originally Genentech Products. Such license
shall be
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co-exclusive with Scios Nova in the Co-Promotion Territory and exclusive even as
to Scios Nova in the Licensed Territory (except as provided in Section 6.5
above). Genentech covenants and agrees not to use the Scios Nova Patents
outside of the Field.
9.2 PATENT LICENSES TO SCIOS NOVA WITHIN THE FIELD. Genentech grants to
Scios Nova a license under the Genentech Patents, in the Co-Promotion Territory
and in the Field (a) to develop, make, have made, use, sell, offer for sale,
have sold and import Collaboration Products that were originally Scios Nova
Products and (b) to develop, use, sell, offer for sale, have sold and import
Collaboration Products that were originally Genentech Products. Such license
shall be co-exclusive with Genentech. Scios Nova covenants and agrees not to
use the Genentech Patents outside of the Field.
9.3 NONEXCLUSIVE KNOW-HOW LICENSE TO GENENTECH. Scios Nova grants
Genentech a paid-up, non-exclusive, worldwide license to use Scios Nova Know-how
in the Field solely for the purposes of developing, manufacturing, having
manufactured, using, selling, offering for sale and importing Collaboration
Products. Genentech covenants and agrees not to develop, make, have made, use,
sell, offer for sale, have sold or import any product using the Scios Nova
Know-how outside of the Field.
9.4 NONEXCLUSIVE KNOW-HOW LICENSE TO SCIOS NOVA. Genentech grants Scios
Nova a paid-up, non-exclusive, worldwide, license to use Genentech Know-how in
the Field solely for the purposes of developing, manufacturing, having
manufactured, using, selling, offering for sale and importing Collaboration
Products in the Co-Promotion Territory. Scios Nova covenants and agrees not to
develop, make, have made, use, sell, offer for sale, have sold or import any
product using the Genentech Know-how outside of the Field.
9.5 SUBLICENSING. Each Party may grant sublicenses under Sections 9.1,
9.2, 9.3 or 9.4 only (i) with the prior approval of the Management Committee
upon recommendation of the JCC with respect to the Co-Promotion Territory or
(ii) with the prior written consent of Scios Nova with respect to the Licensed
Territory. Unless otherwise agreed, each sublicensee in the Licensed Territory
shall be subject to all of the obligations of Genentech hereunder applicable to
that part of the Licensed Territory being licensed. Genentech shall provide
Scios Nova with a copy of each proposed sublicense agreement, but Genentech may
redact terms that are strictly financial.
9.6 THIRD PARTY TECHNOLOGY. The licenses granted under Sections 9.1
through 9.4 include sublicenses of Third Party technology to the extent that
such sublicenses can be granted. The Parties shall account for and include all
Sublicense Revenues in the calculation of Operating Profits or Losses, as
provided in Exhibit A. Any sublicense of Third Party technology hereunder shall
be subject to the terms and conditions of the license under which such
sublicense is granted. Each Party agrees to use commercially reasonable and
diligent efforts to maintain such licenses of Third Party technology. In
addition, each Party agrees to provide the other Party, promptly after receipt,
with any notice of default that it may receive from a Third Party licensor and
to permit the other Party to cure such default in its stead. Scios Nova further
agrees to provide Genentech with thirty (30) days written notice if it desires
to terminate the Queen's Agreement
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and to assign such Agreement to Genentech upon request from Genentech (including
the obligation to pay royalties thereunder. Regardless of when the agreement
with the Third Party was executed, any royalties payable to Third Parties in
connection with the manufacture, use, sale, offer for sale and importation of
Collaboration Products in the Co-Promotion Territory shall be chargeable to the
collaboration (including royalties payable by Scios Nova to (i) Queen's
University, pursuant to an Agreement dated July 5, 1993 among Scios Nova,
Queen's University and Parteq Research and Development Innovations (the "Queen's
Agreement"), (ii) Merck & Co., Inc. pursuant to a Settlement Agreement dated
October 26, 1987, between Scios Nova and Merck (the "Merck Agreement", and (iii)
Biotechnology Research Partnership, Ltd. ("BRP"), pursuant to an Agreement of
the Sale of Joint Venture Interest dated September 30, 1988, between Scios Nova
and BRP); PROVIDED, HOWEVER, that in calculating such Third Party Royalties,
amounts payable to BRP shall be reduced by 63% so as to be net of Scios Nova's
economic interest in BRP as of the Effective Date. Any royalties payable to
Third Parties under a license entered into by Scios Nova prior to the Effective
Date that become payable in connection with the manufacture, use, sale, offer
for sale or importation of Collaboration Products in the Licensed Territory
shall be borne by Scios Nova. Any royalties payable to Third Parties under a
license entered into by Genentech either before or after the Effective Date that
become payable in connection with the manufacture, use, sale, offer for sale or
importation of Collaboration Products in the Licensed Territory shall be borne
by Genentech; PROVIDED, HOWEVER, that Genentech shall be entitled to deduct
fifty percent (50%) of any such royalties required for Genentech to exercise its
rights under the licenses granted by Sections 9.1 and 9.3 against royalties
owing to Scios Nova under Section 7.6; in no event, however, shall the royalties
payable under Section 7.6 be reduced by more than fifty percent (50%). No Party
shall incur any royalty obligations to any Third Party that are specific to the
Collaboration Products without the prior written consent of the other Party.
ARTICLE 10.
TRADEMARKS
10.1 PRODUCT TRADEMARKS.
(a) In the Co-Promotion Territory, Auriculin shall be sold under the
Auriculin trademark, which shall be licensed to Genentech on a co-exclusive
basis for use in the Field in the Co-Promotion Territory, for the purposes of
marketing and commercializing Auriculin. If Scios Nova is developing Natrecor
outside of this collaboration for use outside of the Field, Natrecor shall be
sold by Scios Nova in the Co-Promotion Territory under the Natrecor trademark
and by Genentech in the Co-Promotion Territory under a separate trademark chosen
and owned by Genentech; PROVIDED, HOWEVER, that if the FDA requires the use of a
single trademark for all indications of Natrecor, the Natrecor trademark shall
be licensed to Genentech on a co-exclusive basis for use in the Field in the Co-
Promotion Territory. If the Parties are collaborating with respect to Natrecor
inside and outside of the Field, Natrecor shall be sold by both Parties in the
Co-Promotion Territory under the Natrecor trademark, which shall be licensed to
Genentech on a co-exclusive basis in the Co-Promotion Territory. The Auriculin
and Natrecor trademarks shall be owned by Scios Nova in the Co-Promotion
Territory. All other Collaboration Products shall be sold in the Co-Promotion
Territory under trademarks selected by the JCC and owned jointly
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by the Parties in the Co-Promotion Territory. Each Party hereby grants the
other a fully-paid co-exclusive license to use its trademarks in the Co-
Promotion Territory for the Co-Promotion activities provided for in this
Agreement.
(b) Auriculin shall be sold in the Licensed Territory under the
Auriculin trademark, if available and commercially practical, which shall be
owned by Genentech. If the Auriculin trademark is not available or commercially
practical in a country in the Licensed Territory or in all of the Major European
Countries, then Auriculin may be sold in that country or in the Licensed
Territory under a different trademark chosen and owned by Genentech. If Scios
Nova is developing Natrecor outside of this collaboration for use outside of the
Field, Natrecor shall be sold by Genentech in the Licensed Territory under a
separate trademark chosen and owned by Genentech; PROVIDED, HOWEVER, that if the
CPMP requires the use of a single trademark for all indications of Natrecor,
Genentech shall have the right to file for and maintain, in its own name, the
Natrecor trademark in the Licensed Territory. If the Parties are collaborating
with respect to Natrecor inside and outside of the Field, Natrecor shall be sold
by Genentech in the Licensed Territory under the Natrecor trademark, which
trademark Genentech shall have the right to file for and maintain, in its own
name. Genentech will select all other trademarks, and own all trademarks, for
the sale and use of Collaboration Products in the Licensed Territory and will
bear all expenses thereof. If Genentech's rights hereunder revert to non-
exclusive for a particular Collaboration Product, Genentech shall grant, and
hereby does grant, a non-exclusive, sublicensable license to Scios Nova to use
the trademarks for such Collaboration Product for the sale of such Collaboration
Product in the Licensed Territory and in the Field.
10.2 INFRINGEMENT OF TRADEMARKS. Each Party shall notify the JCC promptly
upon learning of any actual, alleged or threatened infringement of a trademark
applicable to a Collaboration Product (the "Trademark") in the Co-Promotion
Territory or of any unfair trade practices, trade dress imitation, passing off
of counterfeit goods, or like offenses in the Co-Promotion Territory. Upon
learning of such offenses from a Party regarding a jointly owned Trademark, or a
Trademark owned solely by a Party because the JCC determined that joint
ownership is not feasible, the JCC shall confer with the Parties regarding which
Party and counsel should be assigned to defend the Trademark. The Party
defending the Trademark shall take all reasonable and appropriate steps to
protect, defend and maintain the Trademark for use by the Parties in connection
with the Collaboration Product. Upon learning of such an offense from a Party
regarding a Trademark owned solely by one of the Parties, and not provided for
above in this Section, the JCC shall confer with the Parties regarding the
defense of such Trademark. The decision whether and how to defend such a
Trademark owned solely by one Party will rest with such Party.
10.3 COSTS OF DEFENSE FOR JOINTLY OWNED TRADEMARK. All of the costs,
expenses and legal fees in bringing, maintaining and prosecuting any action to
maintain, protect or defend a jointly owned Trademark in the Co-Promotion
Territory, or a Trademark owned solely by a Party because the JCC determined
that joint ownership is not feasible in the Co-Promotion Territory, and any
recovery shall be included in the Other Operating Income/Expense.
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10.4 COSTS OF DEFENSE FOR SOLELY OWNED TRADEMARKS. All of the costs,
expenses and legal fees in bringing, maintaining and prosecuting any action to
maintain, protect or defend a Trademark owned solely by one Party and not
provided for in Section 10.3 shall be borne solely by such Party and any
recovery shall be solely for such Party's account. If a Party fails to bring an
action with respect to the Co-Promotion Territory within a period of sixty (60)
days of notice to the other Party requesting action, the other Party will have
the right to bring and control any such action by counsel of its own choice and
its own expense. If one Party brings any such action, the other Party agrees to
be joined as a party plaintiff if necessary to prosecute the action and to give
the first Party reasonable assistance and authority to file and prosecute the
suit. Any damages or other monetary awards recovered pursuant to such action by
the other Party shall be allocated first to the costs and expenses of the Party
bringing suit, then to the costs and expenses, if any of the other Party. Any
amounts remaining shall be allocated two-thirds to the Party bringing suit and
one-third to the other Party. None of the costs, expenses and legal fees nor
any damages or other monetary awards recovered shall be included in the
determination of Operating Profits or Losses.
ARTICLE 11.
CONFIDENTIALITY
11.1 CONFIDENTIALITY; EXCEPTIONS. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing, the Parties agree
that, for the term of this Agreement and for seven (7) years thereafter, the
receiving Party shall keep confidential and shall not publish or otherwise
disclose or use for any purpose other than as provided for in this Agreement any
Information and other information and materials furnished to it by the other
Party pursuant to this Agreement (collectively, "Confidential Information"),
except to the extent that it can be established by the receiving Party that such
Confidential Information:
(a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party;
(b) was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving Party;
(c) 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
the receiving Party in breach of this Agreement;
(d) was disclosed to the receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
disclosing Party not to disclose such information to others; or.
(e) was subsequently developed by the receiving Party without use of
the Confidential Information as demonstrated by competent written records.
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11.2 AUTHORIZED DISCLOSURE. Each Party may disclose Confidential
Information hereunder to the extent such disclosure is reasonably necessary in
filing or prosecuting patent applications, prosecuting or defending litigation,
complying with applicable governmental regulations or conducting preclinical or
clinical trials, provided that if a Party is required by law or regulation to
make any such disclosure of the other Party's Confidential Information it will,
except where impracticable for necessary disclosures, for example in the event
of medical emergency, give reasonable advance notice to the other Party of such
disclosure requirement and, except to the extent inappropriate in the case of
patent applications, will use its reasonable efforts to secure confidential
treatment of such Confidential Information required to be disclosed. In
addition, each Party shall be entitled to disclose, under a binder of
confidentiality containing provisions as protective as those of this Article 11,
Confidential Information to consultants and other Third Parties only for any
purpose provided for in this Agreement. Nothing in this Article 11 shall
restrict any Party from using for any purpose any Information developed by it
during the course of the collaboration hereunder.
11.3 SURVIVAL. This Article 11 shall survive the termination or expiration
of this Agreement for a period of seven (7) years.
11.4 TERMINATION OF PRIOR AGREEMENT. This Agreement supersedes the
Confidentiality Agreement between the Parties dated January 14, 1994. All
Information exchanged between the Parties under that Agreement shall be deemed
Confidential Information and shall be subject to the terms of this Article 11.
11.5 PUBLICATIONS. Prior to the launch of any Collaboration Product in the
Co-Promotion Territory, the JDC will determine the overall strategy for
publication in support of such Collaboration Products in the Co-Promotion
Territory. Except as required by law, each Party agrees that it shall not
publish or present the results of studies carried out as part of the
collaboration without the opportunity for prior review by the other Party. Each
Party shall provide to the other the opportunity to review any proposed
abstracts, manuscripts or presentations (including information to be presented
verbally) which relate to the Field at least thirty (30) days prior to their
intended submission for publication and such submitting Party agrees, upon
written request from the other Party, not to submit such abstract or manuscript
for publication or to make such presentation until the other Party is given a
reasonable period of time to seek patent protection for any material in such
publication or presentation which it believes is patentable.
ARTICLE 12.
OWNERSHIP OF INTELLECTUAL PROPERTY AND PATENT RIGHTS
12.1 OWNERSHIP OF INTELLECTUAL PROPERTY. Scios Nova shall own all
inventions made under this Agreement solely by it or its employees. Genentech
shall own all inventions made under this Agreement solely by its employees. All
inventions made under this Agreement jointly by employees of Scios Nova and
Genentech will be owned jointly by Scios Nova and Genentech and each Party shall
retain full ownership under any Patents resulting therefrom, with full ownership
rights in any field and the right to sublicense without the consent of the other
Party,
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without accounting. The laws of the United States with respect to joint
ownership of inventions shall apply in all jurisdictions giving force and effect
to this Agreement.
12.2 DISCLOSURE OF PATENTABLE INVENTIONS. In addition to the disclosures
required under Article 14, each Party shall provide to the other any invention
disclosure submitted in the normal course and disclosing an invention useful in
the Field and relating to a Product. Such invention disclosures shall be
provided to the other Party within ten (10) days after the Party commences
preparation of a patent application based on such disclosure.
12.3 PATENT FILINGS. Each Party, at its sole discretion and responsibility
shall file, prosecute and maintain Patents to cover its own discoveries and
inventions relating to any Product in the Field and use reasonable efforts to
file initially all applications in the United States. The determination of the
countries inside the Co-Promotion Territory in which to file shall be made by
mutual agreement of the Parties. The determination of the countries in the
Licensed Territory in which to file shall be made by Genentech, which shall have
the right to direct and control all material actions relating to the prosecution
or maintenance of patents in the Licensed Territory that are being presented by
Scios Nova, including patent interferences, reexaminations, reissuances,
oppositions and revocation proceedings. The JDC will determine which Party
shall file, prosecute and maintain Patents to cover any joint discoveries and
inventions relating to the Field and in which countries in the Co-Promotion
Territory to make such filings. Genentech will file, prosecute and maintain
Patents to cover any joint discoveries and inventions relating to the Field in
such countries in the Licensed Territory as it may determine. The Party which
is responsible for filing such a joint Patent will be termed the "filing Party."
The filing Party shall keep the other Party apprised of the status of each
Patent and shall seek the advice of the other Party with respect to Patent
strategy and draft applications and shall give reasonable consideration to any
suggestions or recommendations of the other party concerning the preparation,
filing, prosecution, maintenance and defense thereof. The Parties shall
cooperate reasonably in the prosecution of all Patents covering joint inventions
and covering Collaboration Products and shall share all material information
relating thereto promptly after receipt of such information. If the Parties are
unable to agree as to who is the filing Party or as to any aspect of patent
prosecution of a Patent covering a joint invention or a Collaboration Product,
each Party shall be free to take whatever action it deems appropriate to protect
the joint invention or Collaboration Product, including the filing of patent
applications subject to prior notification of the other Party. If, during the
term of this Agreement, the filing Party intends to allow any Patent covering a
Collaboration Product to lapse or become abandoned without having first filed a
substitute, the filing Party shall, whenever practicable, notify the other Party
of such intention at least sixty (60) days prior to the date upon which such
Patent shall lapse or become abandoned, and the other Party shall thereupon have
the right, but not the obligation, to assume responsibility for the prosecution,
maintenance and defense thereof. No Party makes any warranty with respect to
the validity, perfection or dominance of any Patent or other proprietary right
or with respect to the absence of rights in Third Parties which may be infringed
by the manufacture or sale of any Product. Each Party agrees to bring to the
attention of the other Party any patent or patent application it discovers, or
has discovered, and which relates to the subject matter of this Agreement.
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12.4 INITIAL FILINGS IF MADE OUTSIDE OF THE UNITED STATES. The Parties
agree to use reasonable efforts to ensure that any Patent filed outside of the
United States prior to a U.S. filing will be in a form sufficient to establish
the date of original filing as a priority date for the purposes of a subsequent
U.S. filing.
12.5 PATENT COSTS.
(a) Patent Costs arising in the Co-Promotion Territory after the
Effective Date shall be chargeable to the collaboration as Other Operating
Income/Expense.
(b) Patent Costs arising in the Licensed Territory after the
Effective Date shall be borne by Genentech, unless incurred without Genentech's
prior approval; PROVIDED, HOWEVER, that Genentech shall be entitled to a credit
against royalties otherwise payable under Section 7.5 equal to the aggregate
amount of the Patent Costs arising in the Licensed Territory that it pays and
relating to the filing and maintenance of Scios Nova Patents but excluding the
costs of patent interference, reexamination, reissue, opposition and revocation
proceedings. In no event, however, shall such offset reduce the royalties
otherwise payable under Section 7.5 by more than fifty percent (50%) in any
period. If any such Patent Costs are initially paid by Scios Nova, Genentech
shall promptly reimburse Scios Nova for such Patent Costs upon delivery of
invoices. []
]
12.6 ENFORCEMENT RIGHTS.
(a) NOTIFICATION OF INFRINGEMENT. If either Party learns of any
infringement or threatened infringement by a Third Party of the Scios Patents or
Genentech Patents, such Party shall promptly notify the other Party and shall
provide such other Party with available evidence of such infringement.
(b) ENFORCEMENT IN THE CO-PROMOTION TERRITORY. The JCC and the
Management Committee will determine the appropriate course of action to pursue
with respect to infringement of any Scios Nova Patents or Genentech Patents
specifically covering Collaboration Products being developed or marketed in the
Field and in the Co-Promotion Territory. Costs of patent enforcement and
related recoveries with respect to infringement in the Field and in the Co-
Promotion Territory shall be charged to the collaboration as Other Operating
Income/Expense. If the JCC and Management Committee are unable to decide on a
joint action with respect to any infringement, each Party may proceed in such
manner as the law permits and each Party shall bear its own expenses, with any
recovery allocated pro rata to the extent of the Parties' costs and any excess
allocated three-quarters (3/4) to the Party bringing suit and one-quarter (1/4)
to the other Party.
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(c) ENFORCEMENT IN THE LICENSED TERRITORY. Genentech shall have the
right, but not the obligation, to institute, prosecute and control at its own
expense any action or proceeding with respect to infringement of any of the
Scios Nova Patents or Genentech Patents in the Field and in the Licensed
Territory, by counsel of its own choice. Scios Nova shall have the right, at
its own expense to be represented in any action by counsel of its own choice.
If Genentech fails to bring an action or proceeding within a period of sixty
(60) days of notice by Scios Nova to Genentech requesting action, Scios Nova
will have the right to bring and control any such action or proceeding relating
to a Scios Nova Patent by counsel of its own choice and Genentech will have the
right to be represented in any such action by counsel of its own choice and at
its own expense. If one Party brings any such action or proceeding, the other
Party agrees to be joined as a party plaintiff if necessary to prosecute the
action or proceeding and to give the first Party reasonable assistance and
authority to file and prosecute the suit. Any damages or other monetary awards
recovered pursuant to this Section 12.6(c) shall be allocated first to the costs
and expenses of the Party bringing suit, then to the costs and expenses, if any,
of the other Party. Any amounts remaining shall be allocated three-quarters
(3/4) to the Party bringing suit and one-quarter (1/4) to the other Party.
(d) ENFORCEMENT WITH RESPECT TO INDEPENDENT PRODUCTS. The Party
marketing an Independent Product shall have the right, but not the obligation,
to institute, prosecute and control any action or proceeding with respect to
infringement of any of the Scios Nova Patents or Genentech Patents in the Field
and covering the manufacture, use, sale, offer for sale and importation of an
Independent Product being marketed by such marketing Party, by counsel of its
own choice and at its own expense. The other Party shall have the right, at its
own expense to be represented in any such action by counsel of its own choice.
If the Lead Party fails to bring an action or proceeding within a period of
sixty (60) days of notice from the other Party requesting action, the other
Party will have the right to bring and control any such action or proceeding
relating to that Party's Patents (but not the Patents of the Party marketing
such Independent Product) by counsel of its own choice and the Party marketing
the Independent Product will have the right to be represented in any such action
by counsel of its own choice and at its own expense. If one Party brings any
such action or proceeding, the other Party agrees to be joined as a party
plaintiff if necessary to prosecute the action or proceeding and to give the
first Party reasonable assistance and authority to file and prosecute the suit.
The Party bringing such action shall be entitled to retain any damages or other
monetary awards recovered pursuant to this Section 12.6(d).
(e) SETTLEMENT WITH A THIRD PARTY. The Party that controls the
prosecution of a given claim with respect to a Product shall also have the right
to control settlement of such claim; PROVIDED, HOWEVER, that if one Party
controls, no settlement shall be entered into without the written consent of the
other Party if such settlement would materially and adversely affect the
interests of such other Party. If there is no agreement between the Parties,
then the dispute will be resolved pursuant to Section 17.1. If the dispute is
not resolved pursuant to Section 17.1, then the case may not be settled.
12.7 INFRINGEMENT DEFENSE.
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(a) DEFENSE IN THE CO-PROMOTION TERRITORY. If a Third Party asserts
that a patent or other right owned by it is infringed by any Collaboration
Product in the Co-Promotion Territory, the Management Committee shall establish
a plan for a common defense and select the Party responsible for managing such
Plan. The costs of any such action incurred by one or both of the Parties at
the direction of the Management Committee (including the costs of any judgment,
award, decree or settlement) will be chargeable to the collaboration.
(b) DEFENSE IN THE LICENSED TERRITORY. If a Third Party asserts that
a patent or other right owned by it is infringed by any Collaboration Product in
the Licensed Territory, Genentech will be solely responsible for defending
against any such assertions at its cost and expense, but no settlement may be
entered into without the written consent of Scios Nova if such settlement would
materially and adversely affect Scios Nova interests. If Genentech is required
to pay royalties to such Third Party as a result of such action, it will be
entitled to deduct fifty percent (50%) of such royalties against royalties owing
to Scios Nova under Section 7.5; PROVIDED, HOWEVER, that in no event shall the
royalties payable under Section 7.5 be reduced by more than fifty percent (50%).
DEFENSE WITH RESPECT TO INDEPENDENT PRODUCTS. If a Third Party
asserts that a patent or other right owned by it is infringed by any Independent
Product, the Party marketing such Independent Product will be solely responsible
for defending against any such assertions at its cost and expense, but no
settlement may be entered into without the written consent of the other Party if
such settlement would materially and adversely affect its interests.
ARTICLE 13.
REPRESENTATIONS AND WARRANTIES
13.1 REPRESENTATIONS AND WARRANTIES. Each of the Parties hereby represents
and warrants as follows:
(a) This Agreement is a legal and valid obligation binding upon such
Party and enforceable in accordance with its terms and such Party has the right
to grant the licenses granted herein. The execution, delivery and performance
of the Agreement by such Party does not conflict with any agreement, instrument
or understanding, oral or written, to which it is a Party or by which it is
bound, nor violate any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it.
(b) Such Party has not, and during the term of the Agreement will
not, grant any right to any Third Party relating to its respective Patents and
Know-how in the Field which would conflict with the rights granted to the other
Party hereunder.
(c) In addition, Scios Nova represents and warrants that it has given
Genentech access to all clinical records which describe all adverse event
reports related to Auriculin that have been filed with the FDA prior to the
Effective Date.
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(d) To the best of its knowledge, as of the Effective Date Scios Nova
is not in default of any material provision of the Merck Agreement, Queen's
University Agreement or Bachem Agreement. Except as set forth in Section 9.6,
neither Party is obligated under any agreement as of the Effective Date to pay
any Third Party royalties with respect to the Collaboration Products.
13.2 PERFORMANCE BY AFFILIATES. The Parties recognize that each may
perform some or all of its obligations under this Agreement through Affiliates,
PROVIDED, HOWEVER, that each Party shall remain responsible and be guarantor of
the performance by its Affiliates and shall cause its Affiliates to comply with
the provisions of this Agreement in connection with such performance. Each
Party represents and warrants that this Agreement is a legal and valid
obligation and is enforceable in accordance with its terms.
ARTICLE 14.
INFORMATION AND REPORTS
14.1 INFORMATION. Genentech and Scios Nova will disclose and make
available to each other all preclinical, clinical, regulatory, commercial and
other information, including without limitation all information relevant to the
joint promotion of Collaboration Products, known by Genentech or Scios Nova
concerning Collaboration Products at any time during the term of this Agreement.
Each Party will use commercially reasonable and diligent efforts to disclose to
the other Party all significant information promptly after it is learned or its
significance is appreciated. Each Party shall own and maintain its own database
of clinical trial data accumulated from all clinical trials of Collaboration
Products for which it was responsible and of adverse drug event information for
all Collaboration Products. At the option of the requesting Party, such data
shall be provided in a computer readable format by the providing Party, to the
extent available, which shall also assist in the transfer and validation of such
data to the receiving Party.
14.2 COMPLAINTS. Each Party shall maintain a record of all complaints it
receives with respect to any Collaboration Product. Each Party shall notify the
other of any complaint received by it in sufficient detail and within five (5)
business days after the event, and in any event in sufficient time to allow the
responsible Party to comply with any and all regulatory requirements imposed
upon it in any country.
14.3 ADVERSE DRUG EVENTS. The Parties recognize that the holder of a Drug
Approval Application may be required to submit information and file reports to
various governmental agencies on compounds under clinical investigation,
compounds proposed for marketing, or marketed drugs. Information must be
submitted at the time of initial filing for investigational use in humans and at
the time of a request for market approval of a new drug. In addition,
supplemental information must be provided on compounds at periodic intervals and
adverse drug experiences must be reported at more frequent intervals depending
on the severity of the experience. Consequently, each Party agrees to:
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(a) provide to the other for initial and/or periodic submission to
government agencies significant information on the drug from preclinical
laboratory, animal toxicology and pharmacology studies, as well as adverse drug
experience reports from clinical trials and commercial experiences with the
compound;
(b) in connection with investigational drugs, report to the other
within three (3) days of the initial receipt of a report of any unexpected or
serious experience with the drug, or sooner if required for either Party to
comply with regulatory requirements; and
(c) in connection with marketed drugs, report to the other within
five (5) business days of the initial receipt of a report of any adverse
experience with the drug that is serious and unexpected or sooner if required
for either Party to comply with regulatory requirements. Serious adverse
experiences mean any experience that suggests a significant hazard,
contraindication, side effect or precaution, or any experience that is fatal or
life threatening, is permanently disabling, requires or prolongs inpatient
hospitalization, or is a congenital anomaly, cancer, or overdose. An unexpected
adverse experience is one not identified in nature, specificity, severity or
frequency in the current investigator brochure or the U.S. labeling for the
drug. Each Party also agrees that if it contracts with a Third Party for
research to be performed by such Third Party on the drug, that Party agrees to
require such Third Party to report to contracting Party the information set
forth in subparagraph (i), (ii), and (iii) above.
14.4 RECORDS OF NET SALES AND COSTS. Each Party will maintain complete and
accurate records which are relevant to costs, expenses, sales and payments under
this Agreement and such records shall be open during reasonable business hours
for a period of five (5) years from creation of individual records for
examination at the other Party's expense and not more often than once each year
by an independent public accountant selected by the other Party for the sole
purpose of verifying for the inspecting Party the correctness of calculations or
such costs, expenses or payments made under this Agreement. In the absence of
material discrepancies (in excess of 5% of Operating Profit or Loss, or
royalties, as the case may be) resulting from such audit, the audit expense
shall be paid by the Party requesting the audit. If material discrepancies do
result, the audited Party shall bear the audit expense. Any records or
accounting information received from the other Party shall be Confidential
Information for purposes of Article 11. Results of any such audit shall be
provided to both Parties, subject to Article 11.
14.5 CONTRIBUTION OF INFORMATION. It is the intention of the Parties that
each will bring to the collaboration such information in its possession that is
useful to the development and commercialization of Collaboration Products.
14.6 PUBLICITY REVIEW. The Parties agree that the public announcement of
the execution of this Agreement shall be substantially in the form of the press
release attached as Exhibit E and thereafter each Party shall be entitled to
make or publish any public statement consistent with the contents thereof.
Thereafter, Scios Nova and Genentech will jointly discuss and agree, based on
the principles of this Section 14.6, on any statement to the public regarding
this Agreement or any aspect of this Agreement subject in each case to
disclosure otherwise required by law or regulation as determined in good faith
by each Party. The principles to be
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observed by Scios Nova and Genentech in such public disclosures will be:
accuracy, the requirements for confidentiality under Article 10, the advantage a
competitor of Scios Nova or Genentech may gain from any public statements under
this Section 14.6, and the standards and customs in the biotechnology and
pharmaceutical industries for such disclosures by companies comparable to Scios
Nova and Genentech. The terms of this Agreement may also be disclosed to (i)
government agencies where required by law, or (ii) Third Parties with the prior
written consent of the other Party, which consent shall not be unreasonably
withheld, so long as such disclosure is made under a binder of confidentiality
and so long as highly sensitive terms and conditions such as financial terms are
extracted from the Agreement or not disclosed upon the request of the other
Party.
ARTICLE 15.
TERM AND TERMINATION
15.1 TERM. This Agreement shall commence as of the Effective Date. The
Parties have specifically provided elsewhere in this Agreement the term during
which certain rights and obligations hereunder shall apply. Unless sooner
terminated as provided herein and except as provided in Section 15.4 below, (a)
the remaining provisions of this Agreement relating to activities in the Co-
Promotion Territory shall continue in effect until the date on which the Parties
are no longer entitled to receive a share of Operating Profits or Losses on any
Product and (b) the remaining provisions of this Agreement relating to
activities in the Licensed Territory shall continue in effect until the date on
which Genentech is no longer paying a royalty on Royalty-Bearing Sales in the
Licensed Territory. Those provisions shall govern the term of the rights and
obligations specifically covered thereby.
15.2 TERMINATION BY GENENTECH.
(a) Genentech shall have the right to terminate this Agreement for
any reason, beginning on the date of availability of the data from Scios Nova's
Phase III trial in progress as of the Effective Date and ending thirty (30) days
thereafter. Such termination shall be effective immediately upon written notice
to Scios Nova.
(b) Genentech shall have the right to terminate this Agreement as
provided in Section 2.2 above. Such termination shall be effective immediately
upon written notice to Scios Nova. In addition, this Agreement will terminate
automatically as provided in Section 2.2.
(c) Upon any termination under this Section 15.2, the Parties shall
have no further rights or obligations under this Agreement except as set forth
in Sections 15.4 and 15.5.
15.3 TERMINATION FOR BREACH. If either Party materially breaches this
Agreement at any time, which breach is not cured within sixty (60) days of
written notice thereof from the non-breaching Party (or if such breach is not
susceptible of cure within such period, the breaching Party is not making
diligent good faith efforts to cure such breach), the non-breaching Party shall
have the right to terminate this Agreement. Upon such termination, the Parties
shall have no further rights or obligations under this Agreement except as set
forth in Section 15.5. The Parties
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acknowledge and agree that failure to exercise any right or option with respect
to any Product or to take any action expressly within the discretion of a Party
shall not be deemed to be material breach hereunder.
15.4 SURVIVING RIGHTS. Except as modified above in Sections 15.2 and 15.3,
the obligations and rights of the Parties under Articles 1, 11, 12, 16, 17 and
18 and Section 14.4 of this Agreement will survive termination or expiration (in
the case of Article 11 and Section 14.4 for the periods set forth therein).
15.5 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Termination, relinquishment or
expiration of the Agreement for any reason shall be without prejudice to any
rights which shall have accrued to the benefit of either party prior to such
termination, relinquishment or expiration, including damages arising from any
breach hereunder. Such termination, relinquishment or expiration shall not
relieve either Party from obligations which are expressly indicated to survive
termination or expiration of the Agreement nor of any right or obligation under
the Purchase Agreement.
ARTICLE 16.
INDEMNIFICATION
16.1 INDEMNIFICATION FOR INDEPENDENT PRODUCTS AND COLLABORATION PRODUCTS IN
THE LICENSED TERRITORY.
(a) Genentech hereby agrees to save, defend and hold Scios Nova and
its agents and employees harmless from and against any and all suits, claims,
actions, demands, liabilities, expenses and/or loss, including reasonable legal
expense and attorneys' fees ("Losses") resulting directly from the manufacture,
use, handling, storage, sale or other disposition of chemical agents or
Collaboration Products sold or used in the Licensed Territory or Independent
Products sold or used in any country in the world by Genentech, its Affiliates,
agents or sublicensees except to the extent such Losses result from the
negligence of Scios Nova.
(b) In the event that Scios Nova is seeking indemnification under
Section 16.1(a), it shall inform Genentech of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit Genentech to
assume direction and control of the defense of the claim (including the right to
settle the claim solely for monetary consideration), and shall cooperate as
requested (at the expense of Genentech) in the defense of the claim.
(c) Scios Nova hereby agrees to save, defend and hold Genentech and
its agents and employees harmless from and against any and all suits, claims,
actions, demands, liabilities, expenses and/or loss, including reasonable legal
expense and attorneys' fees ("Losses") resulting directly from the manufacture,
use, handling, storage, sale or other disposition of chemical agents or such
Independent Products sold or used in any country in the world by Scios Nova, its
Affiliates, agents or sublicensees except to the extent such Losses result from
the negligence of Genentech.
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(d) In the event Genentech is seeking indemnification under
Section 16.1(c), it shall inform Scios Nova of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit Scios Nova to
assume direction and control of the defense of the claim (including the right to
settle the claim solely for monetary consideration), and shall cooperate as
requested (at the expense of Scios Nova) in the defense of the claim.
16.2 INDEMNIFICATION FOR COLLABORATION PRODUCTS IN THE CO-PROMOTION
TERRITORY. With respect to Collaboration Products:
(a) Each Party hereby agrees to save, defend and hold the other Party
and its agents and employees harmless from and against any and all losses
resulting directly or indirectly from the manufacture, use, handling, storage,
sale or other disposition of chemical agents or Collaboration Products sold or
used in the Co-Promotion Territory by the indemnifying Party, its Affiliates,
agents or sublicensees, but only to the extent such losses result from the
negligence or willful misconduct of the indemnifying Party or its employees and
agents and do not also result from the negligence or willful misconduct of the
Party seeking indemnification. Any other losses resulting directly or
indirectly from the manufacture, use, handling, storage, sale or other
disposition of chemical agents or Collaboration Products in the Co-Promotion
Territory shall be charged to the collaboration as an Other Operating
Income/Expense at the time such claim is finally determined, whether by
judgment, award, decree or settlement.
(b) In the event that either Party receives notice of a claim with
respect to a Collaboration Product in the Co-Promotion Territory, such Party
shall inform the other Party as soon as reasonably practicable. The Parties
shall confer how to respond to the claim and how to handle the claim in an
efficient manner.
ARTICLE 17.
DISPUTE RESOLUTION
17.1 DISPUTES. The Parties recognize that disputes as to certain matters
may from time to time arise during the term of this Agreement which relate to
either Party's rights and/or obligations hereunder. It is the objective of the
Parties to establish procedures to facilitate the resolution of disputes arising
under this Agreement in an expedient manner by mutual cooperation and without
resort to litigation. To accomplish this objective, the Parties agree to follow
the procedures set forth in this Article 17 if and when a dispute arises under
this Agreement.
Unless otherwise specifically recited in this Agreement, disputes among
members of each Operating Committee will be resolved as recited in this Article
17. Any disputes among members of Operating Committees formed hereunder
relating to the collaboration shall be first referred to the Management
Committee by either Party at any time after such dispute has arising and such
Party believes that there has been sufficient discussion of the matter at the
Operating Committee level. If the Management Committee is unable to resolve
such a dispute within thirty (30) days of being requested by a Party to resolve
an Operating Committee dispute, any Party may, by written notice to the other,
have such dispute referred to their respective chief executive
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officers, for attempted resolution by good faith negotiations within fourteen
(14) days after such notice is received. In the event the designated executive
officers are not able to resolve such dispute, either Party may at anytime after
the 14 day period invoke the provisions of Section 17.2 hereinafter.
17.2 ARBITRATION.
(a) Any dispute, controversy or claim arising out of or relating to
the validity, construction, enforceability or performance of this Agreement,
including disputes relating to alleged breach or to termination of this
Agreement but excluding any determination as to the validity of the Parties'
Patents which shall be subject to Section 17.4 below, shall be settled by
binding arbitration as provided in this Section 17.2.
(b) If a Party intends to begin an arbitration to resolve a dispute,
such Party shall provide written notice to the other Party informing such other
Party of such intention and the issues to be resolved. From the date of such
request and until such time as any matter has been finally settled by
arbitration, the running of the time periods contained in Section 15.4 as to
which party must cure a breach of this Agreement shall be suspended as to the
subject matter of the dispute.
(c) The arbitration shall be conducted pursuant to the then current
JAMS/ENDISPUTE rules, except as provided in this Section 17.2. The arbitration
shall be conducted by a panel of three arbitrators ("the Panel"). The Panel
shall be selected from a pool of retired independent federal judges to be
presented to the parties by JAMS/ENDISPUTE.
(d) If a Party can demonstrate to the Panel that the complexity of
the issues or other reasons warrant the extension of one or more of the time
tables in the JAMS/ENDISPUTE rules, the Panel may extend such time tables, but
in no event shall the time tables being extended so that the proceeding extends
more than 1 year from its beginning to the award.
(e) The Parties (i) acknowledge that the issues that may arise in any
dispute involving this Agreement may involve a number of complex matters and
(ii) confirm their intention that each Party will have the opportunity to
conduct complete discovery with respect to all material issues involved in the
dispute in accordance with the rules of the Federal Rules of Civil Procedure.
(f) The Panel shall, in rendering its decision, apply the substantive
law of the State of California, without regard to its conflict of laws
provisions, except that the interpretation of and enforcement of this Section
shall be governed by the Federal Arbitration Act. The Panel shall apply the
Federal Rules of Evidence to the hearing. The proceeding shall take place in
the Palo Alto, California. The fees of the Panels and JAMS/ENDISPUTE shall
be paid by the losing Party which shall be designated by the Panel. If the
Panel is unable to designate a losing party, it shall so state and the fees
shall be split equally between the Parties.
53.
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(g) The Panel is empowered to award any remedy allowed by law,
including money damages, multiple damages, prejudgment interest and attorneys'
fees, and to grant final, complete, interim, or interlocutory relief, including
injunctive relief but excluding punitive damages. The Parties shall be deemed
to have waived any right to such punitive damages.
(h) Except as set forth in Section 17.2(g), above, each Party shall
bear its own legal fees. The Panel shall assess its costs, fees and expenses
against the Party losing the arbitration unless such Panel believes that neither
Party is the clear loser, in which case the Panel shall divide its fees, costs
and expenses according to its sole discretion.
(i) The arbitration proceeding shall be confidential and the Panel
shall issue appropriate protective orders to safeguard each Party's Confidential
Information. Except as required by law, no Party shall make (or instruct the
Panel to make) any public announcement with respect to the proceedings or
decision of the Panel without prior written consent of each other Party. The
existence of any dispute submitted to arbitration, and the award, shall be kept
in confidence by the Parties and the Panel, except as required in connection
with the enforcement of such award or as otherwise required by applicable law.
17.3 JURISDICTION. For the purposes of this Article 17, the Parties agree
to accept the jurisdiction of the federal courts located in the Northern
District of California for the purposes of enforcing awards entered pursuant to
this Article and for enforcing the agreements reflected in this Article.
17.4 DETERMINATION OF PATENTS. Any dispute relating to the determination
of validity of a Party's Patents shall be submitted exclusively to the federal
courts located in Santa Clara County, California, and the Parties hereby consent
to the jurisdiction and venue of such court.
ARTICLE 18.
MISCELLANEOUS
18.1 ASSIGNMENT.
(a) Either Party may assign any of its rights under this Agreement in
any country to any Affiliates and, with the prior written consent of the other
Party, may delegate its obligations under this Agreement in any country to any
Affiliates; PROVIDED, HOWEVER, that such assignment shall not relieve the
assigning Party of its responsibilities for performance of its obligations under
this Agreement.
(b) Either Party may assign all of its rights and obligations under
this Agreement in connection with a merger or similar reorganization or the sale
of all or substantially all of its assets, or otherwise with the prior written
consent of the other Party. This Agreement shall survive any such merger or
reorganization of either Party with or into, or such sale of assets to, another
party and no consent for such merger, reorganization or sale shall be required
hereunder.
54.
<PAGE>
(c) This Agreement shall be binding upon and inure to the benefit of
the successors and permitted assigns of the Parties. Any assignment not in
accordance with this Agreement shall be void.
18.2 NON-SOLICITATION. The Parties recognize that each Party has a
substantial interest in preserving and maintaining confidential its Confidential
Information hereunder. Each Party recognizes that certain of the other Party's
employees, including those engaged in development, marketing and sale of any
Collaboration Product, may have access to such Confidential Information of the
other Party. The Parties therefore agree not to solicit or otherwise induce or
attempt to induce for purposes of employment, any employees from the other Party
involved in the development, marketing or sales of any Collaboration Product
during the period in which any Party is developing or commercializing a
Collaboration Product in the Co-Promotion Territory hereunder and for a period
of two years thereafter.
18.3 CONSENTS NOT UNREASONABLY WITHHELD. Whenever provision is made in
this Agreement for either Party to secure the consent or approval of the other,
that consent or approval shall not unreasonably be withheld, and whenever in
this Agreement provision is made for one Party to object to or disapprove a
matter, such objection or disapproval shall not unreasonably be exercised.
18.4 RETAINED RIGHTS. Nothing in this Agreement shall limit in any respect
the right of either Party to conduct research and development with respect to
and market products outside the Field using such Party's technology.
18.5 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other cause beyond the control of the defaulting Party, provided that the
Party claiming force majeure has exerted all reasonable efforts to avoid or
remedy such force majeure; PROVIDED, HOWEVER, that in no event shall a Party be
required to settle any labor dispute or disturbance.
18.6 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
18.7 NO RIGHT TO USE NAMES. Except as otherwise provided herein, no right,
express or implied, is granted by the Agreement to use in any manner the name
"Scios Nova," "Genentech" or any other trade name or trademark of the other
Party or its Affiliates in connection with the performance of the Agreement.
18.8 NOTICES. All notices hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission (receipt
verified), telexed, mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by express courier service, to the Parties
at the following addresses (or at such other address for a party as shall be
specified
55.
<PAGE>
by like notice; provided, that notices of a change of address shall be effective
only upon receipt thereof).
IF TO SCIOS NOVA,
ADDRESSED TO: SCIOS NOVA INC.
2450 Bayshore Parkway
Mountain View, CA 94043
Attention: General Counsel
Telephone: (415) 966-1550
Telecopy: (415) 962-5816
IF TO GENENTECH,
ADDRESSED TO: GENENTECH, INC.
460 Point San Bruno Boulevard
South San Francisco, CA 94080
Attention: Corporate Secretary
Telephone: (415) 225-1000
Telecopy: (415) 952-9881
18.9 WAIVER. Except as specifically provided for herein, the waiver from
time to time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such Party's rights or remedies provided in this
Agreement.
18.10 SEVERABILITY. If any term, covenant or condition of this
Agreement or the application thereof to any Party or circumstance shall, to any
extent, be held to be invalid or unenforceable, then (i) the remainder of this
Agreement, or the application of such term, covenant or condition to Parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (ii) the Parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the Parties that the basic purposes of this Agreement are to be effectuated.
18.11 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authorized the ambiguous provision.
18.12 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
56.
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18.13 ENTIRE AGREEMENT. This Agreement, including all Exhibits
attached hereto which are hereby incorporated herein by reference, sets forth
all the covenants, promises, agreements, warranties, representations, conditions
and understandings between the Parties hereto and supersedes and terminates all
prior agreements and understandings between the Parties. There are no
covenants, promises, agreements, warranties, representations, conditions or
understandings, either oral or written, between the Parties other than as set
forth herein and therein. No subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon the Parties hereto unless
reduced to writing and signed by the respective authorized officers of the
Parties.
57.
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IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the date and year first above written.
SCIOS NOVA INC. GENENTECH, INC.
By:/S/RICHARD L. CASEY By: /S/G. KIRK RAAB
---------------------------- ------------------------------------
Title: CHAIRMAN Title:PRESIDENT and
----------------------------- CHIEF EXECUTIVE OFFICER
--------------------------------
58.
<PAGE>
EXHIBIT A
FINANCIAL PLANNING, ACCOUNTING AND REPORTING
FOR THE SCIOS NOVA/GENENTECH COLLABORATION AGREEMENT
This Exhibit A to the Collaboration Agreement (the
"Agreement") dated as of December 31, 1994, between Scios Nova
Inc. ("Scios Nova") and Genentech, Inc. ("Genentech") addresses
the financial planning, accounting policies and procedures to be
followed in determining Operating Profits or Losses and related
sharing of revenue and expenses in the Co-Promotion Territory.
Terms not defined in this Exhibit shall have the meanings set
forth in the Agreement.
This Exhibit sets forth the principles for reporting actual
results and budgeted plans of the combined operations in the
Co-Promotion Territory, the frequency of reporting, the use of a
single functional currency for reporting, and the methods of
determining payments to the parties and auditing of accounts.
For purposes of this Exhibit only, the consolidated
accounting of operations for the collaboration in the Co-
Promotion Territory shall be referred to as ScioGen. ScioGen is
not a legal entity and has been defined for identification
purposes only.
A.1. PRINCIPLES OF REPORTING
The results of operations of ScioGen will be presented in
the following format, with the categories as defined in
Section A.4 below:
<TABLE>
<CAPTION>
SCIOS NOVA GENENTECH TOTAL
---------- --------- -----
<S> <C> <C> <C>
Gross Sales
less Sales Returns and Allowances
= Net Sales
less Cost of Sales
= Gross Profit
less Marketing Costs
less Sales Costs
less Development Costs
less Other Operating Income/Expense
= Contribution
less Distribution Costs
less Administration Costs
= Operating Profit (Loss)
</TABLE>
It is the intention of the Parties that the interpretation
of these definitions will be consistent with generally
accepted accounting principles in the United States.
1.
<PAGE>
A.2. FREQUENCY OF REPORTING
The fiscal year of ScioGen will be a calendar year.
Reporting by each Party for ScioGen revenues and expenses
will be performed as follows:
<TABLE>
<CAPTION>
REPORTING EVENT FREQUENCY TIMING OF SUBMISSION
--------------- --------- --------------------
<S> <C> <C>
Actuals Quarterly Q1-Q3: +30 days
Q4: +45 days
Forecasts Quarterly Mid Quarter
(rest of year - by
month)
Budgets Annually October 15th
(one year - by month)
Long Range Plan Annually May 1st
(current year plus
5 years)
</TABLE>
Genentech will be responsible for the preparation of
consolidated reporting, calculation of the profit/loss
sharing and determination of the cash settlement. Genentech
will provide the Joint Finance Committee within five working
days of the submission date shown above, a statement showing
the consolidated results and calculations of the profit/loss
sharing and cash settlement required in a format agreed to
by the Parties.
Reports of actual results compared to budget will be made to
the Operating Committees on a quarterly basis. After
approval by the JFC as to amounts, the JFC will forward the
report to the Management Committee for its approval. Line
item variances from budgets judged to be significant by the
JFC will only be included in calculation of Operating Profit
and Loss when approved by the JCC and the Management
Committee.
On a monthly basis the Distributor will supply the other
Party with Gross Sales in units, local currency and U.S.
dollars by country of each month's sales according to the
Distributor's sales reporting system, which shall be
consistent with the definitions in Section A.4.
The Distributor will provide the other party limited access
to the appropriate areas within the Distributor's Gross
Sales reporting system to aid in the other Party's sales
effort.
The Joint Finance Committee will meet as appropriate
but at least quarterly to review and approve the
following:
2.
<PAGE>
- Actual Results
- Forecasts
- Budgets
- Long Range Plan
- Inventory Levels
- Sales Returns and Allowances
- Other financial matters, including each Party's
methodologies for charging costs and allocating Sales
Representatives to ScioGen for actuals, forecasts,
budgets and long range plans and the results of applying
such methodologies.
A.3. BUDGET AND LONG RANGE PLAN
Responsibility for the Budget and Long Range Plan will rest
with the Joint Development Committee and Joint
Commercialization Committee, who will develop budgets
consistent with both the Development Plan and
Commercialization Plan, in coordination with the Joint
Finance Committee, subject to final approval by the
Management Committee.
Budgets will be prepared annually. In any country outside
the United States in which Genentech and Scios Nova will
co-promote the Product, budgeted figures for the country
will be mutually and formally agreed upon and approved by
local management of Scios Nova and Genentech before being
transmitted to their respective headquarters. In addition,
headcount chargeable to ScioGen will be agreed to locally.
Budgets will be supplemented with detailed business plans
for clinical trials, registration applications, and detailed
plans for product introduction, sales efforts and promotion
as determined by the Joint Development Committee and Joint
Commercialization Committee. Budgets, once approved by the
Management Committee (as stated in local currency), can only
be changed with the approval of the Management Committee.
A five-year Long Range Plan for ScioGen will be established
on a yearly basis under the direction of the Management
Committee and submitted to Scios Nova and Genentech by May
1st.
A.4. DEFINITIONS
A.4.1 "GROSS SALES" means the gross amount invoiced by
either Party or their permitted sublicensees for sales of a
Collaboration Product to Third Parties in the Co-Promotion
Territory.
A.4.2 "SALES RETURNS AND ALLOWANCES" means Gross Sales
less Net Sales.
A.4.3 "NET SALES" means Gross Sales less the sum of (a),
(b) and (c) where (a) is a provision, determined under
generally accepted accounting principles in the United
States, for (i) trade, cash and quantity discounts or
rebates (other than price discounts granted at the time of
invoicing and which are included in the determination of
Gross Sales), (ii) credits or
3.
<PAGE>
allowances given or made for rejection or return of, and
for uncollectible amounts on, previously sold products or
for retroactive price reductions (including Medicare and
similar types of rebates), (iii) taxes, duties or other
governmental charges levied on or measured by the billing
amount, as adjusted for rebates and refunds, (iv) charges
for freight and insurance directly related to the
distribution of Products (but only to the extent not
separately included in Cost of Sales and excluding amounts
reimbursed by Third Party customers), and (v) credits or
allowances given or made for wastage replacement, indigent
patient and any other sales programs agreed to by the
Parties, (b) is a periodic adjustment of the provision
determined in (a) to reflect amounts actually incurred for
(i), (ii), (iii), (iv) and (v), and (c) is the Combination
Product Adjustment as defined in the Agreement, if any.
Provisions allowed in (a) and adjustments made in (b) and
(c) will be reviewed by the Joint Finance Committee.
A.4.4 "COST OF SALES" means Cost of Goods Sold, Third
Party Royalties to the extent allowable under Section 9.6 of
the Agreement (i.e., any allocable intellectual property
acquisition and licensing costs) and outbound freight on
sales.
A.4.5 "COST OF GOODS SOLD" means the fully burdened cost
of the Collaboration Product in final therapeutic form. The
fully burdened cost of the Collaboration Product will be
determined in accordance with generally accepted accounting
principles in the United States as applied by the Party
performing or contracting for each stage of the
manufacturing process and will include direct labor,
material, product testing costs and Allocable Overhead.
A.4.6 "MARKETING COSTS" means the costs, excluding
Allocable Overhead, of marketing, promotion, advertising,
professional education, product related public relations,
relationships with opinion leaders and professional
societies, market research, healthcare economics studies and
other similar activities directly related to the
Collaboration Products and approved by the Joint
Commercialization Committee. Such costs will include both
internal costs (e.g., salaries, benefits, supplies and
materials, etc.) as well as outside services and expenses
(e.g., consultants, agency fees, meeting costs, etc.).
Marketing Costs shall also include activities related to
obtaining reimbursement from payers and costs of sales and
marketing data. Marketing Costs will specifically exclude
the costs of activities which promote either Party's
business as a whole without being product specific (such as
corporate image advertising).
A.4.7 "SALES COSTS" means costs, excluding Allocable
Overhead, incurred consistent with the Commercialization
Plan and the annual budget prepared pursuant to such Plan
and specifically identifiable to the sales of Collaboration
Products to all markets in the Co-Promotion Territory
including the managed care market. Sales Costs shall
include costs associated with Sales Representatives,
including compensation, benefits and travel, supervision and
training of the Sales Representatives, sales meetings, sales
call reporting and other sales expenses. Sales Costs will
not include the start-up costs associated with either
Party's sales force, including recruiting, relocation and
other similar costs.
A.4.8 "DEVELOPMENT COSTS" means costs, including
Allocable Overhead, required to obtain the authorization
and/or ability to manufacture, formulate, fill, ship and/or
sell a
4.
<PAGE>
Collaboration Product in the Field in commercial
quantities in the Co-Promotion Territory. Development Costs
shall include but are not limited to the cost of studies on
the toxicological, pharmacokinetic, metabolic or clinical
aspects of a Collaboration Product conducted internally or
by individual investigators, or consultants necessary for
the purpose of obtaining and/or maintaining approval of a
Collaboration Product in the Field by a government
organization in a country of the Co-Promotion Territory, and
costs for preparing, submitting, reviewing or developing
data or information for the purpose of submission to a
governmental authority to obtain and/or maintain approval of
a Collaboration Product in the Field in a country of the
Co-Promotion Territory. In addition, Development Costs in
the Co-Promotion Territory shall include the cost of post-
launch clinical studies in support of a Collaboration
Product in the Field in the Co-Promotion Territory.
Development Costs in the Co-Promotion Territory shall
include expenses for compensation, benefits and travel and
other employee-related expenses, as well as data management,
statistical designs and studies, document preparation, and
other expenses associated with the clinical testing program.
A.4.9 OTHER OPERATING INCOME/EXPENSE means other
operating income or expense from or to third parties which
is not part of the primary business activity of ScioGen, but
is considered and approved by the Joint Finance Committee as
income or expense generated from ScioGen operations, and
limited to the following:
-- Inventory Write-Offs
-- Patent Costs (as defined and to the extent
permitted in the Agreement)
-- Product liability insurance to the extent the
Parties obtain a joint policy
-- Indemnification costs (as defined in Article 16 of
the Agreement)
-- Sublicense Revenues
-- Other (To be determined by JFC)
A.4.10 "DISTRIBUTION COSTS" means the costs, including
Allocable Overhead, specifically identifiable to the
distribution of a Collaboration Product including customer
services, collection of data of sales to hospitals and other
end users (e.g. DDD sales data), order entry, billing,
credit and collection and other activities described in
Section 5.5 of the Agreement. For the purpose of this
Agreement, only the Distributor will charge ScioGen for
Distribution Costs and which will be a lump sum percentage
of [ ] % of Net Sales.
A.4.11 "ADMINISTRATION COSTS" means costs chargeable to
ScioGen equal to [ ] % of the sum of each party's own
Marketing Costs and Sales Costs (both only to the extent
chargeable to ScioGen).
A.4.12 "OPERATING PROFIT OR LOSS" means ScioGen's Net
Sales less the following items: Cost of Sales, Marketing
Costs, Sales Costs, Development Costs, Other Operating
Income/Expense, Distribution Costs and Administrative Costs,
for a given period.
A.4.13 "ALLOCABLE OVERHEAD" means costs incurred by a
Party or for its account which are attributable to a Party's
supervisory, services, occupancy costs, corporate bonus (to
the extent not charged directly to departments), and its
payroll, information systems, human
5.
<PAGE>
relations or purchasing functions and which are allocated
to company departments based on space occupied or headcount
or other activity-based method. Allocable Overhead shall
not include any costs attributable to general corporate
activities including, by way of example, executive
management, investor relations, business development, legal
affairs and finance.
A.4.14 "DISTRIBUTOR" means the Party performing the sales
distribution function described in Section 5.5 of the
Agreement.
A.5. FOREIGN EXCHANGE
The functional currency for accounting for operating profit
will be U.S. dollars.
The statement of operations will be translated into
U.S. dollars using the average exchange rate for the
reporting period.
A.6. AUDITS AND INTERIM REVIEWS
Either Party shall have the right to request that the other
Party's independent accounting firm perform an audit or
interim review of the other Party's books in order to
express an opinion regarding said Party's compliance with
generally accepted accounting principles. Such audits or
review will be conducted at the expense of the requesting
Party.
Either Party shall have the right to request that its
independent public accounting firm perform an audit of the
other Party's books of accounts for the sole purpose of
verifying compliance with the Agreement. Such audits will
be conducted at the expense of the requesting Party;
provided, however, that if the audit results in an
adjustment of greater than 5% of Operating Losses or Profits
in any period, the cost of the audit will be borne by the
Party audited. Audit results will be shared with both
Parties.
A.7. PAYMENTS BETWEEN THE PARTIES
Balancing payments between the Parties will be approved by
the Management Committee based on Operating Profit or Loss.
Payments will be made quarterly based on actual results
within 60 days after the end of each quarter, adjusted for
reimbursement of the net expenses or income incurred or
received by each Party.
A.8. ACCOUNTING FOR DEVELOPMENT COSTS, MARKETING COSTS AND SALES COSTS
All Development Costs, Marketing Costs and Sales Costs will
be based on the appropriate cost definition stated in
Section 4 of this Exhibit.
Each party shall report Development Costs in a manner
consistent with its Project Cost System. In general, these
project cost systems report actual time spent on specific
projects, apply the actual labor costs, capture actual costs
of specific projects and allocate other expenses to
projects. For Marketing Costs, the Parties will report
costs based on spending
6.
<PAGE>
in Marketing departments. The Parties acknowledge that the
methodologies used will be based on systems in place and
consistent with Section 11 of this Exhibit.
Sales Costs shall be chargeable to ScioGen only by the Party
making the majority of the Gross Sales of Collaboration
Products in a given year. The amount of such chargeable
Sales Costs shall be equal to the product of (a) and (b)
where (a) is the difference between the two Party's
percentage of total Gross Sales (e.g. 70% - 30% = 40%), and
(b) is the greater of ScioGen total budgeted or actual
(including only approved variances from budget) Sales Costs
for the year. For the purpose of determining actual and
budgeted Sales Costs, the Parties, through the JCC and JFC,
shall determine the number of Sales Representatives selling
Collaboration Products during the period and develop a
method consistent with Section 11 of this Exhibit to
allocate Sales Costs to those Sales Representatives.
A.9. SHARING OF OPERATING PROFITS AND LOSSES
The Parties agree to share the operating profit or loss
resulting from the collaborative arrangement in the
Co-Promotion Territory according to the following manner:
Genentech shall be allocated fifty percent (50%) and Scios
Nova shall be allocated fifty percent (50%) of the Operating
Profit (Loss), except as otherwise specified in Sections 2.5
(as to Development Costs chargeable to ScioGen) and 5.3 of
the Agreement.
A.10. START OF OPERATIONS
Operation of ScioGen will be deemed to have commenced on
January 1, 1995. Costs incurred prior to January 1, 1995,
are not chargeable to ScioGen.
A.11. GUIDELINES FOR CHARGING COSTS
The following guidelines shall be used in determining
amounts chargeable to ScioGen. As per the Agreement,
Development Costs incurred prior to the first Collaboration
Product receiving approval in the United States will not be
charged to ScioGen.
11.1 If an expense is specifically and exclusively
(i.e., for no other product) used for the
development or commercialization of a Collaboration
Product in the Field in the Co-Promotion Territory,
then [ ] % of the expense will be charged to
ScioGen.
11.2 If an expense is specifically and exclusively
(i.e., for no other product) used for the
development (excluding costs described in Section
A.11.4 below) or commercialization of a
Collaboration Product in the Field in both the
Co-Promotion Territory and the Licensed Territory,
then the following shall apply:
(a) If the portion of that expense used for the
development or commercialization of a Collaboration
Product in the Field in the Licensed Territory can
be objectively
7.
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determined through specific means
(e.g., man hours of effort, amounts consumed,
etc.), then the amount so used will be charged to
Genentech and the remaining portion will be charged
to ScioGen.
(b) If the portion of that expense used for the
development or commercialization of a Collaboration
Product in the Field in the Licensed Territory
cannot be objectively determined through specific
means, then only the [
] costs related to the Collaboration Product in
the Field in the Licensed Territory will be charged
to the Licensed Territory and the remaining portion
will be charged to ScioGen.
11.3 If an expense within the Co-Promotion Territory is
not specifically and exclusively (i.e., for other
products in addition to a Collaboration Product or
for the Collaboration Product outside the Field as
well as within the Field) used for the development
or commercialization of a Collaboration Product in
the Field in the Co-Promotion Territory, then the
following shall apply:
(a) If the portion of that expense used for the
development or commercialization of a Collaboration
Product in the Field in the Co-Promotion Territory
can be objectively determined through specific
means (e.g., man hours of effort, amounts consumed,
etc.), then the amount so used will be charged to
ScioGen.
(b) If the portion of that expense used for the
development or commercialization of a Collaboration
Product in the Field in the Co-Promotion Territory
cannot be objectively determined through specific
means, then only the direct and incremental costs
related to the Collaboration Product in the Field
shall be charged to ScioGen.
11.4 With respect to NDA-enabling preclinical and
process development costs (e.g., costs of
toxicology, pharmacokinetic, pharmacology, process
and formulation development, and qualification
lots) for Collaboration Products subsequent to the
first approved Collaboration Product:
(a) If at the time of the Phase III Decision Point
there is a Phase III trial under way or completed
for such Collaboration Product for an indication
outside the Field, then [ ] of the NDA-enabling
preclinical and process development costs
previously incurred shall be charged to either the
Co-Promotion Territory or Licensed Territory.
(b) Otherwise, [ ] of such costs will be
chargeable to the Co-Promotion Territory and [
] of such costs will be charged to the Licensed
Territory as Development Costs.
8.
<PAGE>
EXHIBIT B
AURICULIN-Registered Trademark-
"Auriculin" means any form or dosage for pharmaceutical use of a
natriuretic peptide having the amino acid sequence:
[
]
including the pharmaceutically useful salts or amides thereof.
1.
<PAGE>
EXHIBIT C
NATRECOR
"Natrecor" means any form or dosage for pharmaceutical use of a
natriuretic peptide having the amino acid sequence:
[
]
including the pharmaceutically useful salts or amides thereof.
1.
<PAGE>
EXHIBIT D
SPILLOVER MEASUREMENT
DEFINITION
Spillover Sales shall have the definition given it in
Section 7.13 of the Agreement.
OBJECTIVE
To accurately and reliably estimate Spillover Sales, subject
to limitations of practicality and expense. This estimate will
provide the basis for the compensation of either party for any
profits lost due to the Spillover Sales.
IDENTIFICATION OF SPECIFIC METHODOLOGY
This Exhibit is intended to identify the essential criteria
of a Spillover Sales audit, in the event such an audit is
conducted pursuant to the Agreement. The parties have agreed
that a specific methodology for such an audit will be agreed upon
within the first year following Regulatory Approval of a
Collaboration Product.
CHOICE OF MARKET RESEARCH ORGANIZATION
An independent market research organization with extensive
experience in the pharmaceutical industry will be contracted to
help design and conduct the survey.
METHODOLOGY OUTLINE
An estimate of the Spillover Sales will be made based on a survey
employing the following methodology:
- Conduct a survey of physicians who regularly treat the
relevant indications (Acute Renal Failure, Acute
Congestive Hearth Failure, etc.) or hospital
pharmacists, if deemed appropriate, and information
equivalent to that described below can be retained.
- The survey will be of sufficient size to reasonably
estimate the prescriptions of all physician who
regularly treat the relevant indications.
- The survey will be a custom-designed study with
sufficient validation of both respondents and non-
respondents (if feasible) to assure an accurate
sampling.
- The survey interviews will be conducted in person by
the market research organization and the hospitals will
be compensated for their participation. The
1.
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primary data source for respondents should be patient
records of patients treated within the last 12 months.
- Surveyed physicians or hospital pharmacists will be
questioned as to the following:
- Nature of their practice or patient characteristics
- Types of patients treated and location of treatment
- Number of patients treated for the relevant
indications
- Number of prescriptions made for treating the
relevant indications
- Number of prescriptions of each Collaboration
Product, Scios Nova product and Genentech product
used for treating each relevant indication
* The methodology for the audit will include a detailed
procedure for projecting the actual Spillover Sales
from the sample obtained.
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EXHIBIT E
SCIOS NOVA AND GENENTECH ENTER INTO AGREEMENT FOR DEVELOPMENT OF
ACUTE KIDNEY FAILURE TREATMENT
MOUNTAIN VIEW and SOUTH SAN FRANCISCO, CA -- January 3, 1995 --
Scios Nova Inc. (NASDAQ:SCIO) and Genentech, Inc. (NYSE:GNE)
today announced that they have entered into a collaboration
agreement for the development of Scios Nova's AURICULIN-Registered
Trademark- anaritide for the treatment of acute renal (kidney)
failure (ARF), which is currently in Phase III clinical trials.
"We are very pleased with this partnership for late stage
clinical development and subsequent commercialization of a
promising new therapy for patients with acute renal failure,"
said G. Kirk Raab, Genentech~s president and chief executive
officer. "AURICULIN complements our own rich pipeline of new
products, and we have many strengths, including expertise with
natriuretic peptides, that when added to Scios Nova's will create
a very powerful team that can move a new treatment for ARF to the
market and capture a significant market share."
Under the terms of the agreement, Genentech and Scios Nova will
collaborate in the development of AURICULIN for ARF in the United
States and Canada. The two companies will co-promote AURICULIN
for this indication in the United States and Canada, and equally
share profits from its commercialization. Scios Nova granted
Genentech exclusive marketing rights to all other markets outside
North America and will receive a royalty on sales.
"Genentech has extensive experience in the clinical development,
regulatory approval and marketing of acute-care products," said
Richard L. Casey, Scios Nova chairman and chief executive
officer. "In the rapidly changing healthcare environment, we
believe that a partnership with Genentech will help ensure the
successful launch of AURICULIN and accelerate the market
penetration in North America. In addition, Genentech will
provide the resources and expertise necessary for
commercialization outside North America."
Genentech will make a $20 million equity investment in Scios Nova
by purchasing a new class of nonvoting preferred stock
convertible into approximately 2.1 million shares of common stock
at a price equivalent to $9.50 per common share. Under the
agreement, a resale registration statement for the common shares
will be filed in the near future. In addition, Genentech has
provided $30 million that Scios Nova may draw down as a loan at
its discretion through 2002. Loan amounts will bear interest at
prime. The loan is repayable in the form of cash or Scios Nova
common stock (at the
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Scios Nova/ Genentech
January 3, 1995
Page Two
prevailing market price) at Scios Nova~s option any time over the
next eight years. Genentech will also pay Scios Nova $50 million
in milestone payments upon achievement of key development events
and commercial targets, including $30 million upon Food and Drug
Administration (FDA) marketing approval of AURICULIN. The total
of all investments and payments could reach more than $100
million, excluding royalties and profit sharing.
"The partnership with Genentech is consistent with Scios Nova's
strategy to develop an acute-care marketing presence in North
America and to form an alliance for commercialization outside
North America," added Mr. Casey. "The agreement will ensure that
Scios Nova has the financial resources to support the development
and commercialization of products in our pipeline and will
provide the flexibility to take advantage of other product
opportunities in our acute-care focus area."
ARF is a life-threatening condition characterized by an acute,
severe and sustained decrease in renal function. This condition,
for which there is no available treatment, but for which patients
normally undergo dialysis, is caused primarily by a temporary
decrease in blood flow to the kidneys, such as during complicated
surgery or after a traumatic injury. It is estimated that more
than 160,000 people in the United States are afflicted with ARF
each year. AURICULIN has been designated an orphan drug for ARF.
AURICULIN is Scios Nova's proprietary product for the treatment
of ARF. Scios Nova is currently conducting a 500-patient Phase
III clinical study to provide safety and efficacy data needed to
support an application to the FDA for marketing approval in the
United States. The Phase III study will also determine what
portion of ARF patients may be eligible for treatment with
AURICULIN if it receives marketing approval for the treatment of
ARF. Scios Nova expects to complete enrollment in the study in
February 1995.
Genentech, Inc. is a leading international biotechnology company
that discovers, develops, manufactures and markets human
pharmaceuticals for significant unmet medical needs. The company
has headquarters in South San Francisco, California and is traded
on the New York Stock Exchange under the symbol GNE.
Scios Nova is a biopharmaceutical company engaged in the
discovery, development and commercialization of novel human
therapeutics. Scios Nova focuses its research and development
efforts on the
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Scios Nova/Genentech
January 3, 1995
Page Three
treatment of acute illnesses, primarily in the areas of cardio-
renal disease and inflammation. The Company is also
collaborating with corporate partners in the development of basic
fibroblast growth factor, insulinotropin and therapies for
Alzheimer's disease.
# # #
Release No. 1-95
Contacts:
Scios Nova: Kira Bacon (415) 940-6629
Genentech:
Media Contacts: Laura Leber (415) 225-5759
Jim Weiss (415) 225-2742
Investor Contact: Lisa Brock (415) 225-1034
