<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 7, 1996
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PROGENICS PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 2834 13-3379479
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) No.)
</TABLE>
777 OLD SAW MILL RIVER ROAD
TARRYTOWN, NEW YORK 10591
(914) 789-2800
(Address, including zip code and telephone number, including area
code, of registrant's principal executive offices)
PAUL J. MADDON, M.D., PH.D.
CHAIRMAN OF THE BOARD, CHIEF EXECUTIVE OFFICER AND PRESIDENT
PROGENICS PHARMACEUTICALS, INC.
777 OLD SAW MILL RIVER ROAD
TARRYTOWN, NEW YORK 10591
(914) 789-2800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
COPIES OF ALL COMMUNICATIONS, INCLUDING ALL COMMUNICATIONS SENT TO THE AGENT FOR
SERVICE, SHOULD BE SENT TO:
MARK R. BAKER, ESQ. DAVID E. REDLICK, ESQ.
DEWEY BALLANTINE HALE AND DORR
1301 AVENUE OF THE AMERICAS 60 STATE STREET
NEW YORK, NEW YORK 10019 BOSTON, MASSACHUSETTS 02109
(212) 259-8000 (617) 526-6000
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this Registration Statement.
------------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box: / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /
- ------------------
If this Form is a post-effective amendment filed pursuant to rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /
- ------------------
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED
PROPOSED MAXIMUM
NUMBER OF SHARES MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF TO BE OFFERING PRICE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED(1) PER SHARE(2) PRICE(1)(2) FEE(3)
<S> <C> <C> <C> <C>
Common Stock, par value
$.0013 per share.................... 2,300,000 $13.00 $29,900,000 $9,061
</TABLE>
(1) Includes 300,000 shares which the Underwriters have an option to purchase
from the Company to cover over-allotments, if any.
(2) Estimated solely for purposes of determining the registration fee pursuant
to Rule 457 under the Securities Act of 1933.
(3) Calculated pursuant to Rule 457(a).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER , 1996
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may
not be sold nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall
there be any sale of these securities in any State in which such offer,
solicitation or sale would be unlawful prior to registration or qualification
under the securities laws of any such State.
<PAGE>
2,000,000 SHARES
[COMPANY LOGO]
Pharmaceuticals, Inc.
COMMON STOCK
--------------
All of the shares of Common Stock offered hereby are being sold by Progenics
Pharmaceuticals, Inc. ("Progenics" or the "Company"). Prior to this offering,
there has been no public market for the Common Stock of the Company. It is
anticipated that the initial public offering price will be between $11.00 and
$13.00 per share. See "Underwriting" for a discussion of the factors to be
considered in determining the initial public offering price. The Company has
applied for quotation of the Common Stock on the Nasdaq National Market under
the symbol "PRGN."
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 6.
-----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC DISCOUNT(1) COMPANY(2)
<S> <C> <C> <C>
Per Share.......................................... $ $ $
Total(3)........................................... $ $ $
</TABLE>
(1) See "Underwriting" for information concerning indemnification of the
Underwriters and other information.
(2) Before deducting expenses of the offering payable by the Company estimated
at $750,000.
(3) The Company has granted the Underwriters an option, exercisable within 30
days of the date hereof, to purchase up to 300,000 additional shares of
Common Stock at the Price to Public per share, less the Underwriting
Discount, for the purpose of covering over-allotments, if any. If the
Underwriters exercise such option in full, the total Price to Public,
Underwriting Discount and Proceeds to Company will be $ , $
and $ , respectively. See "Underwriting."
-------------------
The shares of Common Stock are offered severally by the Underwriters when,
as and if delivered to and accepted by them, subject to their right to withdraw,
cancel or reject orders in whole or in part and subject to certain other
conditions. It is expected that delivery of the certificates representing the
shares will be made against payment on or about , 1996 at the office
of Oppenheimer & Co., Inc., Oppenheimer Tower, World Financial Center, New York,
New York 10281.
-------------------
OPPENHEIMER & CO., INC. VECTOR SECURITIES INTERNATIONAL, INC.
The date of this Prospectus is , 1996
<PAGE>
GMK GANGLIOSIDE CONJUGATE VACCINE IS PROGENICS' LEAD CANCER THERAPEUTIC
CANDIDATE.
GMK HAS ENTERED PIVOTAL PHASE III CLINICAL TRIALS FOR THE TREATMENT OF MELANOMA.
[DIAGRAM DEPICTING THE COMPANY'S GANGLIOSIDE CONJUGATE VACCINE, GMK]
------------------------
The Company was incorporated in December 1986. Its principal executive
offices are located at 777 Old Saw Mill River Road, Tarrytown, New York 10591
and its telephone number is (914) 789-2800.
------------------------
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK OF
THE COMPANY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NASDAQ NATIONAL MARKET, IN THE
OVER-THE-COUNTER MARKET OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
------------------------
<PAGE>
PROSPECTUS SUMMARY
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED
INFORMATION AND FINANCIAL STATEMENTS AND RELATED NOTES APPEARING ELSEWHERE IN
THIS PROSPECTUS. UNLESS OTHERWISE INDICATED, ALL INFORMATION IN THIS PROSPECTUS:
(I) ASSUMES NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT OPTION; (II) GIVES
EFFECT TO A THREE-FOR-FOUR REVERSE STOCK SPLIT WITH RESPECT TO THE COMPANY'S
COMMON STOCK, PAR VALUE $.0013 (THE "COMMON STOCK"), TO BE EFFECTED PRIOR TO THE
COMPLETION OF THIS OFFERING; AND (III) GIVES EFFECT TO THE AUTOMATIC CONVERSION
OF ALL OUTSTANDING SHARES OF THE COMPANY'S PREFERRED STOCK, PAR VALUE $.001 PER
SHARE (THE "PREFERRED STOCK"), INTO AN AGGREGATE OF 4,259,878 SHARES OF COMMON
STOCK. SEE "CAPITALIZATION," "DESCRIPTION OF CAPITAL STOCK" AND "NOTES TO
FINANCIAL STATEMENTS." INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A
HIGH DEGREE OF RISK.
THE COMPANY
Progenics Pharmaceuticals, Inc. ("Progenics" or the "Company") is a
biopharmaceutical company focusing on the development and commercialization of
innovative products for the treatment and prevention of cancer and viral
diseases. The Company applies its immunology expertise to develop
biopharmaceuticals that induce an immune response or that mimic natural immunity
in order to fight cancers, such as melanoma, and viral diseases, such as human
immunodeficiency virus ("HIV") infection. Progenics' most advanced product
candidate, GMK, is a therapeutic vaccine that is undergoing pivotal Phase III
clinical trials for the treatment of melanoma, a deadly form of skin cancer.
Progenics' second vaccine product, MGV, is being developed for the treatment of
various cancers, and recently entered Phase I/II clinical trials. Based on its
participation in the discoveries of two major receptors for HIV, the Company is
engaged in research and development of several therapeutic products designed to
block entry of the virus into human immune system cells. Progenics has completed
pre-clinical studies on two HIV product candidates, PRO 542 and PRO 367, and
plans to initiate Phase I/II clinical trials of these products in 1997.
Progenics' most advanced product candidates are based on two proprietary
technologies: ganglioside conjugate vaccine technology, which the Company uses
in its cancer program; and universal antiviral binding agent ("UnAB")
technology, which the Company uses in its HIV program. The Company has
exclusively licensed from Memorial Sloan-Kettering Cancer Center
("Sloan-Kettering") several ganglioside conjugate vaccines designed to stimulate
the immune system to destroy cancer cells. The Company applies its UnAB
technology to produce antibody-like molecules designed to neutralize or destroy
HIV or HIV-infected cells.
CANCER THERAPEUTICS
GMK is a therapeutic cancer vaccine designed to prevent recurrence of
melanoma in patients who are at risk of relapse after surgery. Developed at
Sloan-Kettering by scientists affiliated with the Company, GMK is composed of a
ganglioside antigen which is abundant in melanoma cells, conjugated to an
immunogenic carrier protein and combined with an adjuvant (an immunological
stimulator). In August 1996, the Company commenced the first of three pivotal,
randomized, multicenter Phase III clinical trials of GMK. These studies are
being conducted in the United States by the Eastern Cooperative Oncology Group
("ECOG") and the Southwest Oncology Group ("SWOG"), which are cooperative cancer
research groups supported by the National Cancer Institute ("NCI"). Two
international Phase III trials will be initiated in 1997 and will be conducted
in Europe by the Institute of Cancer Research ("ICR") of the United Kingdom and
the European Organization for Research and Treatment of Cancer ("EORTC").
MGV, the Company's second ganglioside conjugate vaccine, incorporates two
ganglioside antigens that are abundant in a wide range of cancer cells. These
cancers include sarcoma, small cell lung cancer, colorectal and gastric cancer,
lymphoma, neuroblastoma and melanoma. In September 1996, MGV entered Phase I/II
clinical trials at Sloan-Kettering.
3
<PAGE>
HIV THERAPEUTICS
The Company is pursuing two approaches based on its HIV receptor technology
in the research and development of products designed to block viral entry into
human immune system cells. The Company's UnAB approach is based on the CD4
receptor while its HIV fusion approach is based on a recently discovered second
receptor for the virus, CC-CKR-5 ("CKR-5").
Progenics is developing PRO 542 to selectively target HIV and prevent it
from infecting healthy cells by binding to the sites on the virus that are
required for entry into the cell. PRO 542 is based on Progenics' UnAB technology
and has been shown IN VITRO to recognize a wide range of HIV strains, including
those most prevalent in the United States and the rest of the world. PRO 542 is
being developed as an immunotherapy to treat HIV-positive individuals and as an
immunoprophylactic treatment to prevent infection of health care workers who
have been exposed to the virus and infants born to HIV-positive mothers. The
Company plans to file an investigational new drug application ("IND") covering
PRO 542 by the end of 1996 and initiate Phase I/II clinical trials in 1997.
Progenics is developing PRO 367 as a therapeutic agent designed to kill
HIV-infected cells. PRO 367 consists of a UnAB molecule linked to a therapeutic
radioisotope and is designed to bind to and destroy HIV-infected cells by
delivering a lethal dose of radioactivity. The Company plans to begin Phase I/II
clinical trials of PRO 367 in 1997.
In June 1996, the Company's scientists in collaboration with researchers at
The Aaron Diamond AIDS Research Center ("ADARC") described in an article
published in NATURE the discovery of a second receptor for HIV, CKR-5. This
receptor enables fusion of HIV with the cell membrane and entry of the virus'
genetic information into the cell. The Company is using its proprietary ProSys
assay in a program to discover novel therapeutics that specifically inhibit the
interaction of HIV with the CKR-5 receptor, thereby blocking viral fusion and
entry.
BUSINESS STRATEGY
The Company's business strategy is to develop and commercialize innovative
products for cancer and viral diseases that have significant market needs by
capitalizing on its proprietary technologies and its expertise in product
development and clinical trials. Key elements of this strategy include:
collaborating with leading academic and government-supported institutions and
clinical groups to control the Company's research and clinical trial
expenditures; in-licensing promising technologies and product candidates to
minimize basic research costs and overhead; and, maximizing the Company's share
of revenues from products that are brought to market by initiating clinical
trials of product candidates, when appropriate, prior to establishing
collaborations with pharmaceutical companies. Consistent with this strategy,
Progenics has limited its corporate infrastructure and operating costs while
developing four product candidates that have entered, or are about to enter,
clinical trials.
4
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Company.......... 2,000,000 shares
Common Stock to be outstanding after the
offering................................... 8,554,553 shares (1)
Use of proceeds.............................. To fund clinical trials of its leading
product candidates, research and development,
in-licensing of late-stage technology and for
working capital and general corporate
purposes.
Proposed Nasdaq National Market symbol....... PRGN
Risk Factors................................. This offering involves a high degree of risk.
See "Risk Factors."
</TABLE>
- ------------------------
(1) Based on the number of shares outstanding at August 31, 1996. Excludes
2,053,191 shares of Common Stock reserved as of such date for issuance
pursuant to outstanding options under the Company's stock option plans and
pursuant to outstanding warrants. See "Capitalization" and "Description of
Capital Stock."
SUMMARY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 1,
1986
SIX MONTHS ENDED (INCEPTION)
YEARS ENDED DECEMBER 31, JUNE 30, THROUGH
------------------------------- -------------------- JUNE 30,
1993 1994 1995 1995 1996 1996
--------- --------- --------- --------- --------- -----------
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Research grants....................................... $ 84 $ 504 $ 725 $ 282 $ 188 $ 1,656
Product sales......................................... 50 52 50 31 58 349
Interest income....................................... 53 108 46 41 59 600
--------- --------- --------- --------- --------- -----------
Total revenues...................................... 187 664 821 354 305 2,605
--------- --------- --------- --------- --------- -----------
Expenses:
Research and development.............................. 1,547 2,859 3,853 1,661 1,609 14,460
General and administrative............................ 748 878 1,094 547 601 5,874
Interest expense...................................... 38 50 87 36 28 429
Depreciation and amortization......................... 249 289 291 153 152 1,585
--------- --------- --------- --------- --------- -----------
Total expenses...................................... 2,582 4,076 5,325 2,397 2,390 22,348
--------- --------- --------- --------- --------- -----------
Net loss................................................ $ (2,395) $ (3,412) $ (4,504) $ (2,043) $ (2,085) $ (19,743)
--------- --------- --------- --------- --------- -----------
--------- --------- --------- --------- --------- -----------
Pro forma net loss per common share(1).................. $ (0.74) $ (0.34)
--------- ---------
--------- ---------
Pro forma weighted average common shares
outstanding(1)........................................ 6,126 6,126
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1996
-------------------------
ACTUAL AS ADJUSTED(2)
--------- --------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents................................................................ $ 3,070 $ 24,640
Working capital.......................................................................... 2,691 24,261
Total assets............................................................................. 4,150 25,720
Capital lease obligations and deferred lease liability, long-term portion................ 193 193
Total stockholders' equity............................................................... 3,519 25,089
</TABLE>
- ------------------------
(1) See Note 2 to the Company's Financial Statements for information concerning
computation of the pro forma per share data.
(2) As adjusted to reflect the sale of 2,000,000 shares of Common Stock offered
by the Company hereby, assuming an initial public offering price of $12.00
per share, and the receipt of the net proceeds therefrom after deducting the
underwriting discount and estimated offering expenses. See "Use of
Proceeds."
5
<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES OF COMMON STOCK OFFERED HEREBY IS SPECULATIVE IN
NATURE AND INVOLVES A HIGH DEGREE OF RISK. IN ADDITION TO THE OTHER INFORMATION
CONTAINED IN THIS PROSPECTUS, THE FOLLOWING FACTORS SHOULD BE CONSIDERED
CAREFULLY IN EVALUATING THE COMPANY AND ITS BUSINESS BEFORE PURCHASING THE
SHARES OF COMMON STOCK OFFERED HEREBY. THIS PROSPECTUS CONTAINS CERTAIN
FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND SECTION 21E OF THE
SECURITIES EXCHANGE ACT OF 1934, AS AMENDED (THE "EXCHANGE ACT"). ANY STATEMENTS
CONTAINED HEREIN THAT ARE NOT STATEMENTS OF HISTORICAL FACT MAY BE DEEMED TO BE
FORWARD-LOOKING STATEMENTS. FOR EXAMPLE, THE WORDS "BELIEVES," "ANTICIPATES,"
"PLANS," "EXPECTS," "INTENDS" AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY
FORWARD-LOOKING STATEMENTS. THERE ARE A NUMBER OF IMPORTANT FACTORS, INCLUDING
THE RISK FACTORS SET FORTH BELOW, THAT COULD CAUSE THE COMPANY'S ACTUAL RESULTS
TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.
EARLY STAGE OF PRODUCT DEVELOPMENT; TECHNOLOGICAL UNCERTAINTIES
The Company is in the development stage, and the development of any products
will require significant further research, development, testing and regulatory
approvals and additional investment prior to commercialization. Substantially
all of the Company's resources have been, and for the foreseeable future will
continue to be, dedicated to the development of products for cancer and viral
diseases, most of which are still in the early stages of development and
testing. There are a number of technological challenges that the Company must
successfully address to complete most of its development efforts. In addition,
the product development programs conducted by the Company and its collaborators
are subject to the risks of failure inherent in the development of product
candidates based on new technologies. These risks include the possibility that
the technologies used by the Company will prove to be ineffective or any or all
of the Company's product candidates will prove to be unsafe or otherwise fail to
receive necessary regulatory approvals; that the product candidates, if safe and
effective, will be difficult to manufacture on a large scale or uneconomical to
market; that the proprietary rights of third parties will preclude the Company
or its collaborators from marketing the products utilizing the Company's
technologies; or that third parties will market superior or equivalent products.
To the Company's knowledge, no cancer or therapeutic vaccine and no genetically
engineered antibody for the treatment of HIV infection has been approved for
marketing and there can be no assurance that any of the Company's products will
be successfully developed. The commercial success of the Company's products,
when and if approved for marketing by the U.S. Food and Drug Administration (the
"FDA"), will depend upon their acceptance by the medical community and third
party payors as clinically useful, cost-effective and safe. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Business--Product Development," "--Manufacturing," "--Government Regulation"
and "--Competition."
UNCERTAINTY ASSOCIATED WITH PRECLINICAL AND CLINICAL TESTING
The grant of regulatory approvals for the commercial sale of any of the
Company's potential products will depend on the Company successfully conducting
extensive preclinical and clinical testing to demonstrate their safety and
efficacy in humans. The results of preclinical studies by the Company and/or its
collaborators may be inconclusive and may not be indicative of results that will
be obtained in human clinical trials. In addition, results attained in early
human clinical trials relating to the products under development by the Company
may not be indicative of results that will be obtained in later clinical trials.
As results of particular preclinical studies and clinical trials are received by
the Company, the Company may abandon projects which it might otherwise have
believed to be promising, some of which may be described in this Prospectus.
Although human clinical trials have commenced with respect to the
development of GMK and MGV, the Company is developing other therapeutic
products, including PRO 542 and PRO 367, on which it plans to file INDs with the
FDA or make equivalent filings outside of the U.S., and there can be no
assurance that necessary preclinical studies on these products will be completed
satisfactorily or that the Company
6
<PAGE>
otherwise will be able to make its intended filings. Further, there can be no
assurance that the Company will be permitted to undertake and complete human
clinical trials of any of the Company's potential products, either in the U.S.
or elsewhere, or, if such trials are permitted, that such products will not have
undesirable side effects or other characteristics that may prevent them from
being approved or limit their commercial use if approved.
The rate of completion of the Company's human clinical trials, if permitted,
will be dependent upon, among other factors, the rate of patient enrollment.
Patient enrollment is a function of many factors, including the size of the
patient population, the nature of the protocol, the availability of alternative
treatments, the proximity to clinical sites and the eligibility criteria for the
study. Delays in planned patient enrollment might result in increased costs and
delays, which could have a material adverse effect on the Company. The Company
or the FDA or other regulatory agencies may suspend clinical trials at any time
if the subjects or patients participating in such trials are being exposed to
unacceptable health risks. In addition, clinical trials are often conducted with
patients having the most advanced stages of disease. During the course of
treatment, these patients can suffer adverse medical effects or die for reasons
that may not relate to the product being tested, but which can nevertheless
affect adversely the clinical trials. In addition, there can be no assurance
that clinical trials of products under development will demonstrate safety and
efficacy at all or to the extent necessary to obtain regulatory approvals.
Companies in the biotechnology industry have suffered significant setbacks in
advanced clinical trials, even after obtaining promising results in earlier
trials. The failure to adequately demonstrate the safety and efficacy of a
therapeutic product under development could delay or prevent regulatory approval
of the product and would have a material adverse effect on the Company.
Lastly, the Company has limited experience in conducting clinical trials.
The Company relies, in part, on academic institutions and on clinical research
organizations to conduct and monitor certain clinical trials. There can be no
assurance that such entities will conduct the clinical trials successfully. In
addition, certain clinical trials for the Company's products will be conducted
by government-sponsored agencies. Because the conduct of such trials will be
dependent on government participation and funding, the Company will have less
control over such trials than if the Company were the sole sponsor thereof. As a
result, there can be no assurance that these trials will commence or be
completed as planned. See "Business--Product Development," "--Cancer
Therapeutics," "--HIV Therapeutics" and "--Government Regulation."
HISTORY OF OPERATING LOSSES AND ACCUMULATED DEFICIT; NO PRODUCT REVENUE AND
UNCERTAINTY OF FUTURE PROFITABILITY
The Company has incurred substantial losses in each year since its
inception. As of June 30, 1996, the Company had an accumulated deficit of
approximately $20 million. Such losses have resulted principally from costs
incurred in the Company's research and development programs and general and
administrative costs associated with the Company's development. The Company has
derived only limited revenues from federal research grants and from the sale of
research reagents. No revenues have been generated by the Company from product
sales (other than for research purposes) or royalties and no product sales
(other than sales of research reagents) or royalties are likely for a number of
years, if ever. The Company expects to incur additional operating losses over at
least the next several years and expects losses in the future to increase
significantly as the Company expands development and clinical trial efforts. The
Company expects that losses will fluctuate from quarter to quarter and that such
fluctuations may be substantial. The Company's ability to achieve profitability
is dependent in part on obtaining regulatory approvals for products and entering
into agreements for commercialization of such products. There can be no
assurance that such regulatory approvals will be obtained or such agreements
will be entered into. Further, there can be no assurances that the Company's
operations will become profitable even if products under development by the
Company or any collaborators are commercialized. See "Selected Financial Data"
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations."
7
<PAGE>
NEED FOR ADDITIONAL FINANCING AND UNCERTAIN ACCESS TO CAPITAL FUNDING
Progenics' current development projects require substantial capital. The
Company believes that the net proceeds of this offering, together with the
Company's present capital resources, should be sufficient to fund operations
through the end of 1998 based on the Company's current operating plan. No
assurance can be given that there will be no change that would consume the
Company's liquid assets before such time. Thereafter, the Company will require
substantial funds in addition to the net proceeds of this offering to conduct
development activities, preclinical studies, clinical trials and other
activities relating to the commercialization of any potential products. The
Company anticipates that these funds will be obtained from external sources and
intends to seek additional financing to fund future operations. There can be no
assurance, however, that the Company will be able to negotiate such arrangements
or obtain the additional funds it will require on acceptable terms, if at all.
In addition, the Company's cash requirements may vary materially from those now
planned because of results of research and development, results of product
testing, potential relationships with in-licensors and collaborators, changes in
the focus and direction of the Company's research and development programs,
competitive and technological advances, the cost of filing, prosecuting,
defending and enforcing patent claims, the regulatory approval process,
manufacturing, marketing and other costs associated with the commercialization
of products following receipt of regulatory approvals and other factors.
If adequate funds are not available, the Company may be required to delay,
reduce the scope of or eliminate one or more of its programs; to obtain funds
through arrangements with collaborative partners or others that may require the
Company to relinquish rights to certain of its technologies, product candidates
or products that the Company would otherwise seek to develop or commercialize
itself; or to license the rights to such products on terms that are less
favorable to the Company than might otherwise be available. If the Company
raises additional funds by issuing equity securities, further dilution to
stockholders may result and new investors could have rights superior to existing
stockholders. The Company has no established banking arrangements through which
it can obtain debt financing. See "Use of Proceeds," "Capitalization" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
COMPETITION AND TECHNOLOGICAL CHANGE
Competition in the biopharmaceutical industry is intense. The Company faces
competition from many companies and major universities and research institutions
in the United States and abroad. Many of the Company's competitors have
substantially greater resources, experience in conducting preclinical studies
and clinical trials and obtaining regulatory approvals for their products,
operating experience, research and development and marketing capabilities and
production capabilities than those of the Company. There can be no assurance
that the Company's competitors will not develop technologies and products that
are safer or more effective than any being developed by the Company or which
would render the Company's technology and products obsolete and noncompetitive,
and the Company's competitors may succeed in obtaining FDA approval for products
more rapidly than the Company. The Company will face competition from companies
marketing existing products or developing new products for diseases targeted by
the Company's technologies. The development of new products for those diseases
for which the Company is developing products could render the Company's product
candidates noncompetitive and obsolete. There can be no assurance that the
products under development by the Company and its collaborators will be able to
compete successfully with existing products or products under development by
other companies, universities and other institutions or that they will attain
regulatory approval in the United States or elsewhere. With respect to the
Company's products for the treatment of HIV infection, two classes of products
made by competitors of the Company have been approved for marketing by the FDA
for the treatment of HIV infection and AIDS: reverse transcriptase inhibitors
and protease inhibitors. Both types of drugs are inhibitors of viral enzymes and
have shown efficacy in reducing the concentration of HIV in the blood and
prolonging asymptomatic periods in HIV-positive individuals, especially when
administered
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in combination. However, it is not known whether HIV will develop resistance to
these drugs over time. In addition, the use of these drugs presents problems of
toxic side effects and compliance for some patients.
A significant amount of research in the biopharmaceutical field is also
being carried out at academic and government institutions. The Company's
strategy is to in-license technology and product candidates from academic and
government institutions. These institutions are becoming increasingly aware of
the commercial value of their findings and are becoming more aggressive in
pursuing patent protection and negotiating licensing arrangements to collect
royalties for use of technology that they have developed. These institutions may
also market competitive commercial products on their own or in collaboration
with competitors and will compete with the Company in recruiting highly
qualified scientific personnel. Any resulting increase in the cost or decrease
in the availability of technology or product candidates from these institutions
may affect the Company's business strategy.
If the Company receives regulatory approvals to commence commercial sales of
products, the Company will also be competing with respect to commercial scale
manufacturing and marketing capabilities, areas in which the Company has limited
or no experience. See "Business--Manufacturing" and "--Sales and Marketing."
LIMITED MANUFACTURING CAPABILITIES
In order to successfully commercialize its product candidates, Progenics
must be able to manufacture its products in commercial quantities, in compliance
with regulatory requirements, at acceptable costs and in a timely manner. The
manufacture of the types of biopharmaceutical products being developed by the
Company presents several risks and difficulties. For example, the manufacture of
recombinant proteins used in certain of the Company's current HIV products in
development is complex, can be difficult to accomplish even in small quantities,
can be difficult to scale-up when large scale production is required and can be
subject to delays, inefficiencies and poor or low yields of quality products.
Although Progenics has constructed two pilot-scale manufacturing facilities
which it believes will be sufficient to meet the Company's initial needs for
clinical trials, these facilities may be insufficient for all of its late-stage
clinical trials and for its commercial-scale manufacturing requirements.
Accordingly, the Company expects to expand its manufacturing staff and
facilities and obtain new facilities or to contract with third parties to assist
with production. Manufacture of some of Progenics' initial products for
commercialization is expected to require third party contract manufacturers at a
significant cost to the Company. In employing third party manufacturers,
Progenics will not control all aspects of the manufacturing process. There can
be no assurance that the Company will be able to obtain from third party
manufacturers adequate supplies in a timely fashion for commercialization, or
that commercial quantities of any such products, if approved for marketing, will
be available from contract manufacturers at acceptable costs. In the event the
Company decides to establish a full-scale commercial manufacturing facility, the
Company will require substantial additional funds and will be required to hire
and train significant numbers of employees and comply with the extensive
regulations applicable to such a facility. There is no assurance that Progenics
will be able to develop a current Good Manufacturing Practices ("cGMP")
manufacturing facility sufficient for all clinical trials or commercial-scale
manufacturing. The cost of manufacturing certain products may make them
prohibitively expensive. In addition, in order to successfully commercialize its
product candidates, the Company may be required to reduce the cost of
production, and there can be no assurance that the Company will be able to do
so. See "Business--Manufacturing."
AVAILABILITY OF MATERIALS
Although Progenics has not experienced any significant difficulties in
obtaining the raw materials necessary to perform its research, development and
manufacturing activities to date, there can be no assurance that sufficient
quantities of these materials will be available to support continued research,
development or commercial manufacture of any of the Company's planned products.
The Company currently obtains supplies of critical materials used in production
of GMK and MGV from single sources.
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Specifically, commercialization of the Company's GMK and MGV cancer vaccine
candidates requires certain adjuvant components from Cambridge Biotech
Corporation ("CBC"). CBC is a biotechnology company which is currently in
Chapter 11 bankruptcy proceedings. The Company has entered into a license and
supply agreement with CBC pursuant to which CBC agreed to supply the Company
with all of its requirements for the QS-21 adjuvant, a component of certain
ganglioside-based cancer vaccines, including GMK and MGV. The agreement grants
to the Company a license to use CBC's patented technology to develop,
manufacture and sell cancer vaccines using QS-21 and, if CBC is unable to supply
the Company with sufficient quantities of QS-21, the Company has the right to
manufacture QS-21 itself or purchase it from third parties for so long as CBC is
unable to supply the Company with sufficient quantities. There can be no
assurance that CBC's current situation will not result in an interruption in
supply which might have an adverse effect on Progenics' ability to produce
sufficient quantities of clinical and commercial material. See
"Business--Manufacturing."
GOVERNMENT REGULATION; NO ASSURANCE OF REGULATORY APPROVAL
The Company and its products are subject to comprehensive regulation by the
FDA in the United States and by comparable authorities in other countries. These
national agencies and other federal, state, and local entities regulate, among
other things, the preclinical and clinical testing, safety, effectiveness,
approval, manufacture, labeling, marketing, export, storage, record keeping,
advertising, and promotion of the Company's products.
Among other requirements, FDA approval of the Company's products, including
a review of the manufacturing processes and facilities used to produce such
products, will be required before such products may be marketed in the United
States. In order to obtain FDA approval of a product, the Company must
demonstrate to the satisfaction of the FDA that such product is safe and
effective for its intended uses and that the Company is capable of manufacturing
the product with procedures that conform to the FDA's cGMP regulations, which
must be followed at all times. The process of obtaining FDA approvals can be
costly, time consuming, and subject to unanticipated delays and the Company has
had only limited experience in filing and pursuing applications necessary to
gain regulatory approvals. There can be no assurance that such approvals will be
granted on a timely basis, or at all.
The Company's analysis of the results of its clinical studies is subject to
review and interpretation by the FDA, which may differ from the Company's
analysis. There can be no assurance that the Company's data or its
interpretation of data will be accepted by the FDA. In addition, delays or
rejections may be encountered based upon changes in applicable law or FDA policy
during the period of product development and FDA regulatory review. Any failure
to obtain, or delay in obtaining, FDA approvals would adversely affect the
ability of the Company to market its proposed products. Moreover, even if FDA
approval is granted, such approval may include significant limitations on
indicated uses for which a product could be marketed.
Both before and after approval is obtained, a product, its manufacturer and
the holder of the New Drug Application ("NDA") or Product License Application
("PLA") for the product are subject to comprehensive regulatory oversight.
Violations of regulatory requirements at any stage, including the preclinical
and clinical testing process, the approval process, or post-approval marketing
activities may result in various adverse consequences, including the FDA's delay
in approving or refusal to approve a product, withdrawal of an approved product
from the market, and/or the imposition of criminal penalties against the
manufacturer and/or the holder of the marketing approval for the product. In
addition, later discovery of previously unknown problems relating to a marketed
product may result in restrictions on such product, manufacturer, or the holder
of the marketing approval for the product, including withdrawal of the product
from the market. Also, new government requirements may be established that could
delay or prevent regulatory approval of the Company's products under
development.
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The Company is also subject to numerous and varying foreign regulatory
requirements governing the design and conduct of clinical trials and the
manufacturing and marketing of its products. The approval procedure varies among
countries and can involve additional testing, and the time required to obtain
approval may differ from that required to obtain FDA approval. The foreign
regulatory approval process may include all of the risks associated with
obtaining FDA approval set forth above, and there can be no assurance that
foreign regulatory approvals will be obtained on a timely basis, if at all.
Approval by the FDA does not ensure approval by regulatory authorities in other
foreign countries. There can be no assurance that the Company or its partners
will file for regulatory approvals or receive necessary approvals to
commercialize its product candidates in any market. Delays in receipt of or
failure to receive regulatory approvals, or the loss of previously received
approvals, would have a material adverse effect on the Company's business,
financial condition and results of operations.
The Company relies, in part, on academic institutions and on clinical
research organizations to conduct and monitor certain of its clinical trials.
There can be no assurance that such entities will conduct the clinical trials
successfully. In addition, certain clinical trials for the Company's products
will be conducted by government-sponsored agencies. Because the conduct of such
trials will be dependent on government participation and funding, the Company
will have less control over such trials than if the Company were the sole
sponsor. As a result, there can be no assurance that these trials will commence
or be completed as planned. See "Business--Government Regulation."
DEPENDENCE ON THIRD PARTIES
The Company relies heavily on third parties for a variety of functions,
including certain functions relating to research and development, manufacturing,
clinical trials management and regulatory affairs. As of August 31, 1996, the
Company had only 27 full-time employees. The Company is party to several
collaborative research agreements which place substantial responsibility on the
Company's partners for clinical development of products. The Company also
in-licenses technology from medical and academic institutions in order to
minimize investments in early research and enters into collaboration
arrangements with certain of these entities with respect to clinical trials of
product candidates.
To date, the Company has derived most of its revenues from federal research
grants. The government's obligation to make payments under these grants is
subject to appropriation by the United States Congress for funding in each year.
Moreover, it is possible that Congress or the government agencies that
administer these government research programs will determine to scale back these
programs or terminate them or that the government will award future grants to
competitors of the Company instead of the Company. In addition, there can be no
assurances that the Company will be awarded any such grants in the future or
that any amounts derived therefrom will not be less than those received to date.
Certain of the Company's clinical trials will be partially paid for by
government funds. Any future reduction in the funding the Company receives
either from federal research grants or with respect to clinical trials could
adversely affect the Company's business, financial condition and results of
operations.
Progenics' business strategy includes entering into strategic alliances or
licensing arrangements with corporate partners, primarily pharmaceutical and
biotechnology companies, relating to the development and commercialization of
certain of its potential products. There can be no assurance that such
collaborations will be available to the Company on acceptable terms, if at all,
or that any such relationships, if established, will be scientifically or
commercially successful. The Company expects that under certain of these
arrangements, the collaborative partner will have the responsibility for
conducting human clinical trials and the submission for regulatory approval of
the product candidate with the FDA and certain other regulatory agencies. Should
the collaborative partner fail to develop a marketable product, the Company's
business may be materially adversely affected.
There can be no assurance that Progenics will be able to establish and
maintain any of the corporate, academic or government relationships described
above on terms acceptable to the Company, that the
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Company can enter into these arrangements without undue delays or expenditures,
or that these arrangements will allow the Company to compete successfully
against other companies.
LACK OF SALES AND MARKETING EXPERIENCE
If FDA and other approvals are obtained with respect to any of its products,
Progenics expects to market and sell its products through co-marketing,
co-promotion or other licensing arrangements with third parties. Progenics has
no experience in sales, marketing or distribution and its current management and
staff are not trained in these areas. To the extent that the Company enters into
co-marketing, co-promotion or other licensing arrangements for the marketing and
sale of its products, any revenues received by the Company will be dependent on
the efforts of third parties. The Company would not control the amount and
timing of resources such third parties would devote to the Company's products.
If any of such parties were to breach or terminate its agreement with the
Company or otherwise fail to conduct its collaborative activities successfully
and in a timely manner, the commercialization of product candidates would be
delayed or terminated. Any such delay or termination could have a material
adverse effect on the Company's business, financial condition and results of
operations. In addition, if the Company markets products directly, significant
additional expenditures and management resources would be required to develop an
internal sales force. There can be no assurance that the Company will be able to
establish a successful sales force. See "Business--Business Strategy."
DEPENDENCE ON AND UNCERTAINTY OF PROTECTION OF PATENTS AND PROPRIETARY RIGHTS
Progenics' policy is to protect its proprietary technology, and the Company
considers the protection of such rights to be important to its business. In this
regard, under a license agreement with Sloan-Kettering, the Company has obtained
worldwide, exclusive rights to certain ganglioside conjugate vaccines, including
GMK and MGV, and their use to treat or prevent cancer. In addition, the Company
has licensed from Columbia University issued U.S. and European patents and
several related U.S. and foreign patent applications relating to CD4 and its use
to treat or prevent HIV infection which name Progenics' Chairman, President,
Chief Executive Officer and Chief Science Officer, Paul J. Maddon, M.D., Ph.D.,
and certain members of the Company's Virology Scientific Advisory Board as
inventors. The Company is in discussions with Columbia University with respect
to certain amendments to this license agreement. Progenics has also filed a
number of U.S. and foreign patent applications on its UnAB, ProSys and ProVax
technologies and uses of these technologies. The Company is required to make
substantial cash payments and achieve certain milestones and requirements,
including, without limitation, filing INDs, obtaining product approvals and
introducing products, to maintain its rights under these licenses. In the past,
the Company did not achieve a milestone under the Columbia University agreement
and the Company requested modification of the agreement. There is no assurance
that the Company will be able to make required cash payments when due or achieve
the milestones and requirements in order to maintain its rights under these
licenses. Termination of any of such licenses could have a material adverse
effect on the business, financial condition and results of operations of the
Company.
There can be no assurance that patent applications owned by or licensed to
the Company will result in patents being issued or that, if issued, the patents
will afford protection against competitors with similar technology. Although a
patent has a statutory presumption of validity in the United States, the
issuance of a patent is not conclusive as to such validity or as to the
enforceable scope of the claims of the patent. There can be no assurance that
the Company's issued patents or any patents subsequently issued to or licensed
by the Company will not be successfully challenged in the future. The validity
or enforceability of a patent after its issuance by the patent office can be
challenged in litigation. The cost of litigation to uphold the validity of
patents and to prevent infringement can be substantial. If the outcome of the
litigation is adverse to the owner of the patent, third parties may then be able
to use the invention covered by the patent without payment. There can be no
assurance that the Company's patents will not be infringed or successfully
avoided through design innovation.
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The Company may not retain all rights to developments, inventions, patents
and other proprietary information resulting from its collaborative arrangements,
whether in effect as of the date hereof or which may be entered into at some
future time with third parties. As a result, the Company may be required to
license such developments, inventions, patents or other proprietary information
from such third parties, possibly at significant cost to the Company. The
Company's failure to obtain any such licenses could have a material adverse
effect on the business, financial condition and results of operations of the
Company.
There may be patent applications and issued patents belonging to competitors
that may require the Company to alter its products, pay licensing fees or cease
certain activities. If the Company's products conflict with patents that have
been or may be granted to competitors, universities or others, such other
persons could bring legal actions against the Company claiming damages and
seeking to enjoin manufacturing and marketing of the affected products. If any
such actions are successful, in addition to any potential liability for damages,
the Company could be required to obtain a license in order to continue to
manufacture or market the affected products. There can be no assurance that the
Company would prevail in any such action or that any license required under any
such patent would be made available on acceptable terms or at all. There is
significant litigation in the industry regarding patent and other intellectual
property rights. If the Company becomes involved in such litigation, it could
consume substantial resources.
Progenics has also filed a number of U.S. and foreign patent applications
(one of which is owned jointly with ADARC) relating to the discovery of a second
HIV receptor, CKR-5. In addition to the risks described above, the Company is
aware that other groups have claimed discoveries similar to that covered by the
Company's patent applications. These groups may have made their discoveries
prior to the discoveries covered by the Company's patent applications and may
have filed their applications prior to the Company's patent applications. The
Company does not expect to know for several years the relative strength of its
patent position as compared to these other groups.
In addition to the patents, patent applications, licenses and intellectual
property processes described above, the Company also relies on unpatented
technology, trade secrets and information. No assurance can be given that others
will not independently develop substantially equivalent information and
techniques or otherwise gain access to the Company's technology or disclose such
technology, or that the Company can meaningfully protect its rights in such
unpatented technology, trade secrets and information. The Company requires each
of its employees, consultants and advisors to execute a confidentiality
agreement at the commencement of an employment or consulting relationship with
the Company. The agreements generally provide that all inventions conceived by
the individual in the course of employment or in providing services to the
Company and all confidential information developed by, or made known to, the
individual during the term of the relationship shall be the exclusive property
of the Company and shall be kept confidential and not disclosed to third parties
except in limited specified circumstances. There can be no assurance, however,
that these agreements will provide meaningful protection for the Company's
information in the event of unauthorized use or disclosure of such confidential
information. See "Business--Patents and Proprietary Technology."
DEPENDENCE UPON KEY PERSONNEL
Progenics is dependent upon certain key management and scientific personnel.
In particular, the loss of Dr. Maddon could have a materially adverse effect on
Progenics, unless a qualified replacement could be found. Progenics maintains a
key-man life insurance policy on Dr. Maddon in the amount of $2.5 million. The
Company's employment agreement with Dr. Maddon expires in 1998, and there can be
no assurance that it will be renewed by the parties thereto. See
"Management--Executive Compensation."
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ATTRACTION AND RETENTION OF PERSONNEL
Competition for qualified employees among companies in the biopharmaceutical
industry is intense. Progenics' future success depends upon its ability to
attract, retain and motivate highly skilled employees. Although Progenics has
established relationships with the scientists who serve on its Scientific
Advisory Boards, these individuals do not devote a substantial portion of their
time to Progenics-related activities and do not participate directly in the
development of Progenics' products on a daily basis. Attracting desirable
employees will require Progenics to offer competitive compensation packages,
including stock options. In order to successfully commercialize its products,
the Company must substantially expand its personnel, particularly in the areas
of manufacturing, clinical trials management, regulatory affairs, business
development and marketing. There can be no assurance that the Company will be
successful in hiring or retaining qualified personnel. Managing the integration
of new personnel and Company growth generally could pose significant risks to
the Company's development and progress. The addition of such personnel may
result in significant changes in the Company's utilization of cash resources and
its development schedule. See "Business--Human Resources."
UNCERTAINTY RELATED TO HEALTH CARE REFORM MEASURES AND REIMBURSEMENT
In recent years, there have been numerous proposals to change the health
care system in the United States. Some of these proposals have included measures
that would limit or eliminate payments for certain medical procedures and
treatments or subject the pricing of pharmaceuticals to government control.
Significant changes in the health care system in the United States or elsewhere
might have a substantial impact on the manner in which the Company conducts its
business. Such changes also could have a material adverse effect on the
Company's ability to raise capital. Furthermore, the Company's ability to
commercialize products may be adversely affected to the extent that such
proposals have a material adverse effect on the business, financial condition
and profitability of other companies that are collaborators or prospective
collaborators of the Company.
In addition, significant uncertainty exists as to the reimbursement status
of newly-approved health care products. The Company's and its collaborators'
success in generating revenue from sales of products may depend, in part, on the
extent to which reimbursement for the costs of such products will be available
from third-party payors, such as government health administration authorities,
private health insurers and health maintenance organizations ("HMOs"). In
addition, the trend towards managed health care in the United States and the
concurrent growth of organizations such as HMOs, which could control or
significantly influence the purchase of health care services and products, as
well as legislative proposals to reduce government insurance programs, may all
result in lower prices for products and could affect the market for products. If
the Company succeeds in bringing one or more products to market, there can be no
assurance that such products will be considered cost-effective or that adequate
third-party insurance coverage will be available for the Company to establish
and maintain price levels sufficient for realization of an appropriate return on
its investment in product development. Third-party payors are increasingly
attempting to contain health care costs by limiting both coverage and the level
of reimbursement of new products approved for marketing by the FDA. If adequate
coverage and reimbursement levels are not provided by government and third-party
payors for uses of the Company's products, the market acceptance of such
products would be adversely affected.
RISK OF PRODUCT LIABILITY; LIMITED AVAILABILITY OF INSURANCE
The Company's business exposes it to potential product liability risks which
are inherent in the testing, manufacturing, marketing and sale of human vaccine
and therapeutic products, and there can be no assurance that the Company will be
able to avoid significant product liability exposure. Product liability
insurance for the biopharmaceutical industry in generally expensive, if
available at all. The Company has obtained product liability insurance coverage
in the amount of $5 million per occurrence, subject to a $5 million aggregate
limitation. However, there can be no assurance that the Company's present
insurance
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coverage is now or will continue to be adequate as the Company further develops
products. In addition, certain of the Company's license and collaborative
agreements require the Company to obtain product liability insurance and it is
possible that license and collaborative agreements which the Company may enter
into in the future may also include such a requirement. There can be no
assurance that in the future adequate insurance coverage will be available in
sufficient amounts or at a reasonable cost, or that a product liability claim or
recall would not have a material adverse effect on the Company.
HAZARDOUS MATERIALS; ENVIRONMENTAL MATTERS
The Company's research and development work and manufacturing processes
involve the use of hazardous, controlled and radioactive materials. The Company
is subject to federal, state and local laws and regulations governing the use,
manufacture, storage, handling and disposal of such materials and certain waste
products. Although the Company maintains safety procedures for handling and
disposing of such materials that it believes comply with the standards
prescribed by such laws and regulations, the risk of accidental contamination or
injury from these materials cannot be completely eliminated. In the event of
such an accident, the Company could be held liable for any damages that result
and any such liability could exceed the resources of the Company. Although the
Company believes that it is in compliance in all material respects with
applicable environmental laws and regulations, there can be no assurance that
the Company will not be required to incur significant costs to comply with
environmental laws and regulations in the future, or that the operations,
business or assets of the Company will not be materially or adversely affected
by current or future environmental laws or regulations.
The research and development efforts sponsored by the Company involve
laboratory animals. The Company may be adversely affected by changes in laws,
regulations or accepted clinical procedures or by social pressures that would
restrict the use of animals in testing or by actions against the Company or its
collaborators by groups or individuals opposed to such testing.
ABSENCE OF PRIOR TRADING MARKET; POSSIBLE VOLATILITY OF STOCK PRICE
Prior to this offering, there has been no public market for the Common
Stock, and there is no assurance that an active market will develop or be
sustained after this offering or that the market price of the Common Stock will
not decline below the initial public offering price. The initial public offering
price will be determined by negotiation between the Company and the
representatives of the Underwriters and may bear no relationship to the price at
which the Common Stock will trade after completion of this offering. See
"Underwriting" for factors to be considered in determining such offering price.
The market price of the shares of Common Stock, like that of the common stock of
many other biopharmaceutical companies, is likely to be highly volatile. Factors
such as the results of preclinical studies and clinical trials by the Company or
its competitors, other evidence of the safety or efficacy of products of the
Company or its competitors, announcements of technological innovations or new
commercial products by the Company or its competitors, governmental regulation,
changes in reimbursement policies, health care legislation, developments in
patent or other proprietary rights, developments in the Company's relationships
with existing and future collaborative partners, if any, public concern as to
the safety and efficacy of products developed by the Company, fluctuations in
the Company's operating results, and general market conditions may have a
significant impact on the market price of the Common Stock.
CONTROL BY EXISTING STOCKHOLDERS; ANTI-TAKEOVER PROVISIONS
Upon the completion of this offering, certain current stockholders of the
Company, including Dr. Maddon and stockholders affiliated with Tudor Investment
Corporation and Weiss, Peck & Greer, will beneficially own or control a
substantial portion of the outstanding shares of Common Stock and therefore may
have the ability, acting together, to elect all of the Company's directors, to
determine the outcome of most corporate actions requiring stockholder approval
and otherwise control the business of the Company. Such control could have the
effect of delaying or preventing a change in control of the Company and
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consequently adversely affect the market price of the Common Stock. In addition,
the Company's Board of Directors is authorized to issue from time to time shares
of Preferred Stock, without stockholder authorization, in one or more designated
series or classes. The issuance of Preferred Stock, as well as certain
provisions in certain of the Company's stock options which provide for
acceleration of exercisability upon a change of control of the Company and
certain provisions of the Delaware General Corporation Law (Section 203, in
particular), could make the possible takeover of the Company or the removal of
the Company's management more difficult, discourage hostile bids for control of
the Company in which stockholders may receive a premium for their shares of
Common Stock or otherwise dilute the rights of holders of Common Stock and
depress the market price of the Common Stock. See "Principal Stockholders" and
"Description of Capital Stock."
FUTURE SALES OF COMMON STOCK; REGISTRATION RIGHTS; POSSIBLE ADVERSE EFFECT ON
FUTURE MARKET PRICE
A substantial number of outstanding shares of Common Stock and shares of
Common Stock issuable upon exercise of outstanding options and warrants will
become eligible for future sale in the public market at prescribed times. Sales
of substantial numbers of shares of Common Stock in the public market following
this offering could adversely affect prevailing market prices. The Securities
and Exchange Commission (the "Commission") has proposed an amendment to Rule 144
under the Securities Act, that if adopted, would permit certain shares to be
sold one year earlier than otherwise provided by the current version of Rule
144. Commencing one year after the date of this Prospectus, each stockholder who
purchased shares of the Company's stock prior to this offering (which
stockholders hold, as of August 31, 1996, 6,554,553 shares of Common Stock and
have the right to acquire 260,455 shares of Common Stock upon the exercise of
outstanding warrants) is entitled to certain rights with respect to the
registration of such shares of Common Stock for offer or sale to the public. The
Company plans to file a Form S-8 registration statement registering shares
issuable pursuant to the Company's stock option plans. Any sales by existing
shareholders or holders of options or warrants may have an adverse effect on the
Company's ability to raise needed capital and may adversely affect the market
price of the Common Stock. See "Description of Capital Stock," "Shares Eligible
for Future Sale" and "Underwriting."
DILUTION
The initial public offering price will be substantially higher than the net
tangible book value per share of the Company which, at June 30, 1996, was $0.54
per share. Investors purchasing shares of Common Stock in this offering will
suffer immediate, substantial net tangible book value dilution of $9.07 per
share, assuming an initial public offering price of $12.00 per share. In
addition, this dilution will be increased to the extent that holders of
outstanding options and warrants to purchase Common Stock at prices below the
net tangible book value per share of the Company after this offering exercise
such options or warrants. See "Dilution."
ABSENCE OF DIVIDENDS
The Company has never paid any cash dividends on its Common Stock and does
not anticipate paying cash dividends in the foreseeable future. The Company
currently intends to retain earnings, if any, for the development of its
business. In addition, the Company has entered into certain capitalized leases
that contain covenants which indirectly restrict the Company's ability to pay
dividends. See "Dividend Policy."
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USE OF PROCEEDS
The net proceeds to the Company from the sale of the 2,000,000 shares of
Common Stock offered hereby, at an assumed initial public offering price of
$12.00 per share and after deducting the underwriting discount and estimated
expenses payable by the Company, are estimated to be approximately $21,570,000
($24,918,000 if the Underwriters' over-allotment option is exercised in full).
The Company intends to use the net proceeds to fund clinical trials of its
leading product candidates, research and development, in-licensing of late-stage
technology and for working capital and general corporate purposes.
The Company believes that the net proceeds of this offering, together with
the Company's present capital resources, should be sufficient to fund operations
through the end of 1998 based on the Company's current operating plan. No
assurance can be given that there will be no change that would consume the
Company's liquid assets before such time. Thereafter, the Company will require
substantial funds in addition to the proceeds of this offering to conduct
development activities, preclinical studies, clinical trials and other
activities relating to the commercialization of any potential products. The
Company anticipates that these funds will be obtained from external sources and
intends to seek additional financing to fund future operations. There can be no
assurance, however, that the Company will be able to negotiate such arrangements
or obtain the additional funds it will require on acceptable terms, if at all.
In addition, the Company's cash requirements may vary materially from those
now planned because of results of research and development and product testing,
potential relationships with in-licensors and collaborators, changes in the
focus and direction of the Company's research and development programs,
competitive and technological advances, the cost of filing, prosecuting,
defending and enforcing patent claims, the regulatory approval process,
manufacturing, marketing and other costs associated with commercialization of
products following receipt of regulatory approvals and other factors. The
Company's lease for all of its facilities expires in April 1998. If the Company
elects to move to a new location, it may incur substantial expenses for
leasehold improvements and relocation costs. If the Company renews its current
lease, certain costs will be incurred to enhance its manufacturing capabilities.
Pending such uses, the net proceeds from this offering will be temporarily
invested by the Company in short-term, interest bearing investment grade
securities.
DIVIDEND POLICY
The Company has not paid any dividends since its inception and presently
anticipates that all earnings, if any, will be retained for development of the
Company's business and that no dividends on its Common Stock will be declared in
the foreseeable future.
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<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company at June 30,
1996 and as adjusted as described below. This table should be read in
conjunction with the Company's Financial Statements and related Notes included
elsewhere in this Prospectus.
<TABLE>
<CAPTION>
JUNE 30, 1996
--------------------------
<S> <C> <C>
ACTUAL AS ADJUSTED(1)
---------- --------------
<CAPTION>
(IN THOUSANDS)
<S> <C> <C>
Long-term portion of capital lease obligations........................................ $ 157 $ 157
---------- --------------
Stockholders' equity:
Preferred Stock, $.001 par value; 20,000,000 shares authorized:
Series A Preferred Stock; 4,000,000 shares designated; 2,308,000 shares issued and
outstanding, actual; and no shares issued and outstanding, as adjusted............ 2 --
Series B Preferred Stock; 2,500,000 shares designated; 1,982,830 shares issued and
outstanding, actual; and no shares issued and outstanding, as adjusted............ 2 --
Series C Preferred Stock; 3,750,000 shares designated; 1,388,996 shares issued and
outstanding, actual; and no shares issued and outstanding, as adjusted............ 1 --
Common Stock, $.0013 par value, 40,000,000 shares authorized, 2,294,675 shares issued
and outstanding, actual; and 8,554,553 shares issued and outstanding, as
adjusted(2)......................................................................... 3 11
Additional paid-in capital............................................................ 23,254 44,821
Deficit accumulated during the development stage...................................... (19,743) (19,743)
---------- --------------
Total stockholders' equity.......................................................... 3,519 25,089
---------- --------------
Total capitalization.............................................................. $ 3,676 $ 25,246
---------- --------------
---------- --------------
</TABLE>
- ------------------------
(1) Assumes (i) the sale of 2,000,000 shares of Common Stock offered hereby at
an assumed initial public offering price of $12.00 per share and the receipt
of the net proceeds therefrom after deducting the underwriting discount and
estimated offering expenses and (ii) conversion of all outstanding shares of
the Company's Preferred Stock into an aggregate of 4,259,878 shares of
Common Stock pursuant to their terms. See "Use of Proceeds" and "Description
of Capital Stock."
(2) Excludes as of June 30, 1996: (i) 1,792,736 shares subject to outstanding
options at a weighted average exercise price of $4.86 per share, of which
options to purchase 674,741 shares at a weighted average exercise price of
$4.18 per share were exercisable; (ii) 260,455 shares of Common Stock
reserved for issuance upon the exercise of outstanding warrants at a
weighted average exercise price of $6.67 per share, all of which were
exercisable; (iii) 61,275 shares subject to options to be granted prior to
the completion of this offering at an exercise price equal to the initial
public offering price; and, (iv) 750,000 shares available for future
issuance under the Company's stock option plans.
18
<PAGE>
DILUTION
The net tangible book value of the Company as of June 30, 1996 was
$3,519,000 or $0.54 per share. Net tangible book value per share is determined
by dividing the net tangible book value of the Company (total tangible assets
less total liabilities) by the number of shares of Common Stock outstanding (on
a pro forma basis to give effect to the conversion of all outstanding shares of
Preferred Stock). Without taking into account any changes in the net tangible
book value after June 30, 1996, other than to give effect to the sale of the
2,000,000 shares of Common Stock offered hereby (at an assumed initial public
offering price of $12.00 per share) and the application of the net proceeds
therefrom, the pro forma net tangible book value of the Company at June 30, 1996
would have been $25,089,000, or $2.93 per share. This represents an immediate
increase in net tangible book value of $2.39 per share to existing stockholders
and an immediate dilution in net tangible book value of $9.07 per share to new
investors. The following table illustrates this per share dilution:
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.............. $ 12.00
Net tangible book value per share before offering.......... $ 0.54
Increase in net tangible book value per share attributable
to
new investors............................................ 2.39
---------
Pro forma net tangible book value per share after offering... 2.93
---------
Dilution per share to new investors.......................... $ 9.07
---------
---------
</TABLE>
The following table sets forth, on the pro forma basis described above, as
of June 30, 1996 the number and percentage of shares of Common Stock purchased
from the Company, the total cash consideration (with respect to the new
investors, at an assumed initial public offering price of $12.00 per share), and
percentage of total cash consideration paid to the Company and the average price
per share paid by existing stockholders and new investors:
<TABLE>
<CAPTION>
TOTAL CASH CONSIDERATION
SHARES PURCHASED
----------------------- -------------------------- AVERAGE PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Existing stockholders............................ 6,554,553 76.6% $ 22,781,000 48.7% $ 3.48
New investors.................................... 2,000,000 23.4 24,000,000 51.3 12.00
---------- ----- ------------- -----
Total...................................... 8,554,553 100.0% $ 46,781,000 100.0%
---------- ----- ------------- -----
---------- ----- ------------- -----
</TABLE>
The foregoing tables do not assume the exercise of outstanding options or
warrants. At August 31, 1996, there were outstanding options to purchase
1,792,736 shares of Common Stock under the Company's stock option plans at a
weighted average exercise price of $4.86 per share, and outstanding warrants to
purchase 260,455 shares of Common Stock at a price of $6.67 per share. The
exercise of such options and warrants would result in further dilution to new
investors. In addition, (i) effective prior to the completion of this offering,
the Company plans to grant options to purchase 61,275 shares to employees having
an exercise price equal to the initial public offering price in this offering
and (ii) following the completion of this offering, there will be 750,000 shares
of Common Stock reserved for future issuance under the Company's stock option
plans. See "Capitalization," "Management--Stock Option Plans" and "Description
of Capital Stock."
19
<PAGE>
SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
The selected financial data presented below with respect to the balance
sheet data as of December 31, 1994 and 1995 and with respect to the statement of
operations data for each of the three years in the period ended December 31,
1995 are derived from the Company's financial statements, included elsewhere in
this Prospectus, which have been audited by Coopers & Lybrand L.L.P. The
selected financial data presented below with respect to the balance sheet data
as of December 31, 1991, 1992 and 1993 and with respect to the statement of
operations data for each of the years ended December 31, 1992, and November 30,
1991 and the one month ended December 31, 1991 are derived from the Company's
audited financial statements, not included in this Prospectus. The selected
financial data as of June 30, 1996, and for the six months ended June 30, 1995
and 1996 and for the period from December 1, 1986 (inception) to June 30, 1996
have been derived from the Company's unaudited financial statements included
elsewhere in this Prospectus. Operating results for the six months ended June
30, 1996 are not necessarily indicative of results that may be expected for the
entire year ending December 31, 1996. The data set forth below should be read in
conjunction with "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the Financial Statements and related Notes
included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
YEAR ONE MONTH
ENDED ENDED YEARS ENDED DECEMBER 31, JUNE 30,
NOVEMBER 30, DECEMBER 31, ------------------------------------------ --------------------
1991 1991(1) 1992 1993 1994 1995 1995 1996
------------- ------------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Research grants............ $ 55 $ 8 $ 67 $ 84 $ 504 $ 725 $ 282 $ 188
Product sales.............. 77 -- 38 50 52 50 31 58
Interest income............ 86 7 32 53 108 46 41 59
------------- ------------- --------- --------- --------- --------- --------- ---------
Total revenues........... 218 15 137 187 664 821 354 305
------------- ------------- --------- --------- --------- --------- --------- ---------
Expenses:
Research and development... 957 53 1,207 1,547 2,859 3,853 1,661 1,609
General and
administrative........... 665 45 942 748 878 1,094 547 601
Interest expense........... 62 4 59 38 50 87 36 28
Depreciation and
amortization............. 207 9 151 249 289 291 153 152
------------- ------------- --------- --------- --------- --------- --------- ---------
Total expenses........... 1,891 111 2,359 2,582 4,076 5,325 2,397 2,390
------------- ------------- --------- --------- --------- --------- --------- ---------
Net loss..................... $ (1,673) $ (96) $ (2,222) $ (2,395) $ (3,412) $ (4,504) $ (2,043) $ (2,085)
------------- ------------- --------- --------- --------- --------- --------- ---------
------------- ------------- --------- --------- --------- --------- --------- ---------
Pro forma net loss per common
share(2)................... $ (0.74) $ (0.34)
--------- ---------
--------- ---------
Pro forma weighted average
common shares
outstanding(2) 6,126 6,126
<CAPTION>
DECEMBER 1,
1986
(INCEPTION)
TO
JUNE 30,
1996
-----------
<S> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Research grants............ $ 1,656
Product sales.............. 349
Interest income............ 600
-----------
Total revenues........... 2,605
-----------
Expenses:
Research and development... 14,460
General and
administrative........... 5,874
Interest expense........... 429
Depreciation and
amortization............. 1,585
-----------
Total expenses........... 22,348
-----------
Net loss..................... $ (19,743)
-----------
-----------
Pro forma net loss per common
share(2)...................
Pro forma weighted average
common shares
outstanding(2)
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------------------------------
1991 1992 1993 1994 1995
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................................ $ 1,640 $ 1,351 $ 2,137 $ 2,275 $ 559
Working capital...................................................... 1,412 837 1,882 2,019 19
Total assets......................................................... 2,366 1,976 2,858 3,489 1,736
Capital lease obligations and deferred lease liability, long-term
portion............................................................ 250 105 75 235 213
Total stockholders' equity........................................... 1,864 1,547 2,523 2,827 852
<CAPTION>
JUNE 30,
1996
-----------
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents............................................ $ 3,070
Working capital...................................................... 2,691
Total assets......................................................... 4,150
Capital lease obligations and deferred lease liability, long-term
portion............................................................ 193
Total stockholders' equity........................................... 3,519
</TABLE>
- ------------------------
(1) Effective January 1, 1992, the Company changed its fiscal year end from
November 30 to December 31.
(2) See Note 2 to the Company's Financial Statements for information concerning
computation of the pro forma per share data.
20
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Progenics is a biopharmaceutical company focusing on the development and
commercialization of innovative products for the treatment and prevention of
cancer and viral diseases. The Company commenced principal operations in late
1988 and since that time has been engaged primarily in research and development
efforts, development of its manufacturing capabilities and organizational
efforts, including recruitment of scientific and management personnel and
raising capital. In order to commercialize the principal products that the
Company has under development, the Company will need to address a number of
technological challenges and comply with comprehensive regulatory requirements.
Accordingly, it is not possible to predict the amount of funds that will be
required or the length of time that will pass before the Company receives
revenues from sales of any of its products. To date, the Company has received
limited revenues from the sale of research reagents. The Company expects that
sales of research reagents in the future will not significantly increase over
current levels. The Company's other sources of revenues to date have been
research grants related to the Company's HIV programs and interest income.
To date, substantially all of the Company's expenditures have been for
research and development activities. The Company expects that its research and
development expenses will be significantly higher during the balance of 1996 and
in future years as its principal research and development programs progress and
the Company makes filings for related regulatory approvals. The Company has
incurred losses since its inception and had an accumulated deficit of
$19,743,000 at June 30, 1996. The Company has financed its operations primarily
through the private sale and issuance of equity securities. The Company will
require additional funds to complete the development of its products, to fund
the cost of clinical trials, and to fund operating losses which are expected to
continue for the foreseeable future. The Company does not expect its products
under development to be commercialized for the next several years.
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1995 AND 1996
Revenues from research grants decreased from $282,000 for the six months
ended June 30, 1995 to $188,000 for the six months ended June 30, 1996. The
decrease resulted from a lower level of research grant funding in the six months
ended June 30, 1996. Sales of research reagents increased from $31,000 for the
six months ended June 30, 1995 to $58,000 for the six months ended June 30, 1996
resulting from increased orders for such reagents during the first half of 1996.
Interest income increased from $41,000 for the six months ended June 30, 1995 to
$59,000 for the six months ended June 30, 1996 primarily due to the investment
of $5,675,000 in net proceeds received from the Company's sale of preferred
stock and warrants in the fourth quarter of 1995 and the first quarter of 1996.
Research and development expenses decreased from $1,661,000 for the six
months ended June 30, 1995 to $1,609,000 for the six months ended June 30, 1996.
The decrease was principally due to a reduction in scientific staff in the
Company's HIV department for the six months ended June 30, 1996 compared to the
same period in 1995. In addition, nonrecurring consulting expenses were incurred
during the six months ended June 30, 1995 to establish procedures for
manufacturing GMK. These decreases were partially offset by the costs of
manufacturing GMK in 1996 for the Company's Phase III clinical trials.
General and administrative expenses increased from $547,000 for the six
months ended June 30, 1995 to $601,000 for the six months ended June 30, 1996.
The increase was principally due to an increase in payroll and related costs to
support the Company's growth. Interest expense incurred on the Company's capital
lease obligations decreased from $36,000 for the six months ended June 30, 1995
to $28,000 for the six months ended June 30, 1996. Depreciation and amortization
remained relatively unchanged from $153,000 for the six months ended June 30,
1995 to $152,000 for the six months ended June 30, 1996.
21
<PAGE>
The Company's net loss for the six months ended June 30, 1995 was $2,043,000
compared to a net loss of $2,085,000 for the six months ended June 30, 1996.
YEARS ENDED DECEMBER 31, 1994 AND 1995
Revenues from research grants increased from $504,000 in 1994 to $725,000 in
1995. The increase for 1995 resulted from a higher level of research grant
funding in that year. Sales of research reagents remained relatively unchanged
from $52,000 in 1994 to $50,000 in 1995. Interest income decreased from $108,000
in 1994 to $46,000 in 1995 due to the reduction of cash available for investing
as the Company continued to fund its operations.
Research and development expenses increased from $2,859,000 for 1994 to
$3,853,000 for 1995. The increase in 1995 primarily resulted from the Company's
preparation for clinical trials for GMK, including outside consulting expenses.
The Company hired a new Vice President of Medical Affairs in October 1994 and,
during 1995, hired a Manager of Clinical Trials and other related staff. In
addition, the Company incurred expenses in 1995 related to a new license and
supply agreement with CBC. Rent expense also increased in 1995 resulting from
occupation of the Company's expanded laboratory space for the full fiscal year;
the expanded space was occupied at the end of the second quarter of 1994. These
increases were partially offset by a reduction in scientific staff in the
Company's HIV department during the second half of 1995.
General and administrative expenses increased from $878,000 in 1994 to
$1,094,000 for 1995. The increase in 1995 was principally due to additional
legal fees relating to in-licensing activities, filing new patent applications,
personnel expenses, additional rent expense resulting from the expansion of the
Company's office space at the end of the second quarter of 1994, and increased
insurance costs related, in part, to coverage for the Company's clinical trials.
Interest expense increased from $50,000 in 1994 to $87,000 in 1995 due, in part,
to the financing of additional equipment under capitalized leases during 1994
and 1995. The Company also recognized interest expense of $24,000 on amounts
advanced to the Company during 1995 in the aggregate principal amount of
$1,200,000. Depreciation and amortization remained relatively unchanged from
$289,000 in 1994 to $291,000 in 1995.
The Company's net loss in 1994 was $3,412,000 compared to a net loss of
$4,504,000 in 1995.
YEARS ENDED DECEMBER 31, 1993 AND 1994
Revenues from research grants increased from $84,000 in 1993 to $504,000 in
1994, primarily due to an increase in the number of research grants from which
the Company earned grant revenue in 1994. Interest income increased from $53,000
in 1993 to $108,000 in 1994, primarily due to the investment of $3,597,000 in
net proceeds received from the exercise of Series B Preferred Stock warrants
during 1994.
Research and development expenses increased from $1,547,000 in 1993 to
$2,859,000 in 1994. Sales of research reagents remained relatively unchanged
from $50,000 in 1993 to $52,000 in 1994. The increase in 1994 was partly due to
the expansion of the Company's research and development program to include the
development of cancer vaccine products. The Company also intensified its HIV
program efforts during 1994, adding additional scientific and quality
assurance/quality control staff, including a Vice President of Medical Affairs
in October 1994, purchased more laboratory supplies, entered into new consulting
agreements and incurred additional rent expense by expanding its laboratory
space at the end of the second quarter of 1994.
General and administrative expenses increased from $748,000 in 1993 to
$878,000 in 1994. In 1994, the Company incurred additional rent expense due to
the expansion of its office space at the end of the second quarter of 1994, and
incurred additional administrative expenses to support the Company's increased
level of research and development. Interest expense increased from $38,000 in
1993 to $50,000 in 1994, primarily due the acquisition of additional equipment
through capitalized leases as the Company
22
<PAGE>
expanded its facilities. Depreciation and amortization increased from $249,000
in 1993 to $289,000 in 1994 primarily due to the expansion of the Company's
laboratory facilities and the acquisition of additional equipment.
The Company's net loss in 1993 was $2,395,000 compared to a net loss of
$3,412,000 in 1994.
LIQUIDITY AND CAPITAL RESOURCES
The Company has funded its operations since inception primarily through
private placements of equity securities, which provided aggregate cash proceeds
of $22,781,000 (including loans that were subsequently converted into equity
securities). Through June 30, 1996, the Company had also received proceeds of
$1,656,000 from research grants, $600,000 from interest on investments and
$349,000 from the sale of research reagents. Through June 30, 1996, the Company
had financed $1,228,000 of equipment purchases through capitalized leases and a
promissory note.
During the fourth quarter of 1995 and the first quarter of 1996, the Company
raised $5,675,000 in net proceeds from a private placement of shares of the
Company's Series C Preferred Stock in a unit offering in which each $20.00 unit
("Series C Unit") consisted of four shares of Series C Preferred Stock and one
warrant entitling the holder to purchase one share of Series C Preferred Stock
for $5.00 any time within five years of the date of issuance ("Series C
Warrant"). In addition, during December 1995, a note payable in the aggregate
principal amount of $1,200,000, plus accrued and unpaid interest of $24,000 was
converted into Series C Units. At June 30, 1996, there were 347,249 Series C
Warrants outstanding which if exercised in full would result in $1,736,000 of
net proceeds to the Company and the issuance of 260,455 shares of Common Stock.
As of June 30, 1996, the Company had cash and cash equivalents totaling
$3,070,000 compared with $559,000 at December 31, 1995. Planned operations for
the remainder of 1996 currently contemplate expenditures for capital assets of
approximately $200,000, mainly consisting of laboratory equipment and leasehold
improvements to expand the Company's manufacturing capabilities. The Company
plans to finance a significant portion of equipment purchases through
capitalized leases. However, there can be no assurance that the Company will
successfully enter into such new arrangements. The Company's lease for all of
its facilities expires in April 1998. If the Company elects to move to a new
location, it may incur substantial expenses for leasehold improvements and
relocation costs. If the Company renews its current lease, certain costs will be
incurred to enhance its manufacturing capabilities.
The Company believes that the net proceeds of this offering, together with
the Company's present capital resources, should be sufficient to fund operations
through the end of 1998 based on the Company's current operating plan. No
assurance can be given that there will be no change that would consume the
Company's liquid assets before such time. Thereafter, the Company will require
substantial funds to conduct development activities, preclinical studies,
clinical trials and other activities relating to the commercialization of any
potential products. In addition, the Company's cash requirements may vary
materially from those now planned because of results of research and development
and product testing, potential relationships with in-licensors and
collaborators, changes in the focus and direction of the Company's research and
development programs, competitive and technological advances, the cost of
filing, prosecuting, defending and enforcing patent claims, the regulatory
approval process, manufacturing and marketing and other costs associated with
the commercialization of products following receipt of regulatory approvals and
other factors.
After the completion of the offering, the Company will have no committed
external sources of capital, and, as discussed above, expects no significant
product revenues for a number of years. Therefore, the Company intends to seek
additional financing to fund future operations. There can be no assurance,
however, that the Company will be able to obtain the additional funds it will
require on acceptable terms, if at all. If adequate funds are not available, the
Company may be required to delay, reduce the scope of or eliminate one or more
of its research or development programs; to obtain funds through arrangements
23
<PAGE>
with collaborative partners or others that may require the Company to relinquish
rights to certain technologies, product candidates or products that the Company
would otherwise seek to develop or commercialize itself; or to license the
rights to such products on terms that are less favorable to the Company than
might otherwise be available. See "Risk Factors--History of Operating Losses and
Accumulated Deficit; No Product Revenue and Uncertainty of Future Profitability"
and "--Need for Additional Financing and Uncertain Access to Capital Funding."
IMPACT OF THE ADOPTION OF RECENTLY ISSUED ACCOUNTING STANDARD
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
123") in October 1995. See Note 2 to the Company's Financial Statements included
elsewhere in this Prospectus for a discussion of the impact of adoption of SFAS
123.
24
<PAGE>
BUSINESS
OVERVIEW
Progenics is a biopharmaceutical company focusing on the development and
commercialization of innovative products for the treatment and prevention of
cancer and viral diseases. The Company applies its immunology expertise to
develop biopharmaceuticals that induce an immune response or that mimic natural
immunity in order to fight cancers, such as melanoma, and viral diseases, such
as HIV infection. Progenics' most advanced product candidate, GMK, is a
therapeutic vaccine that is undergoing pivotal Phase III clinical trials for the
treatment of melanoma, a deadly form of skin cancer. Progenics' second vaccine
product, MGV, is being developed for the treatment of various cancers, and
recently entered Phase I/II clinical trials. Based on its participation in the
discoveries of two major receptors for HIV, the Company is engaged in research
and development of several therapeutic products designed to block entry of the
virus into human immune system cells. Progenics has completed pre-clinical
studies on two HIV product candidates, PRO 542 and PRO 367, and plans to
initiate Phase I/II clinical trials of these products in 1997.
Progenics' most advanced product candidates are based on two proprietary
technologies: ganglioside conjugate vaccine technology, which the Company uses
in its cancer program; and UnAB technology, which the Company uses in its HIV
program. The Company has exclusively licensed from Sloan-Kettering several
ganglioside conjugate vaccines designed to stimulate the immune system to
destroy cancer cells. The Company applies its UnAB technology to produce
antibody-like molecules designed to neutralize or destroy HIV or HIV-infected
cells.
CANCER THERAPEUTICS
GMK is a therapeutic cancer vaccine designed to prevent recurrence of
melanoma in patients who are at risk of relapse after surgery. Developed at
Sloan-Kettering by scientists affiliated with the Company, GMK is composed of a
ganglioside antigen which is abundant in melanoma cells, conjugated to an
immunogenic carrier protein and combined with an adjuvant (an immunological
stimulator). In August 1996, the Company commenced the first of three pivotal,
randomized, multicenter Phase III clinical trials of GMK. These studies are
being conducted in the United States by ECOG and SWOG, which are cooperative
cancer research groups supported by the NCI. Two international Phase III trials
will be initiated in 1997 and will be conducted in Europe by the ICR of the
United Kingdom and the EORTC.
MGV, the Company's second ganglioside conjugate vaccine, incorporates two
ganglioside antigens that are abundant in a wide range of cancer cells. These
cancers include sarcoma, small cell lung cancer, colorectal and gastric cancer,
lymphoma, neuroblastoma and melanoma. In September 1996, MGV entered Phase I/II
clinical trials at Sloan-Kettering.
HIV THERAPEUTICS
The Company is pursuing two approaches based on its HIV receptor technology
in the research and development of products designed to block viral entry into
human immune system cells. The Company's UnAB approach is based on the CD4
receptor while its HIV fusion approach is based on a recently discovered second
receptor for the virus, CKR-5.
Progenics is developing PRO 542 to selectively target HIV and prevent it
from infecting healthy cells by binding to the sites on the virus that are
required for entry into the cell. PRO 542 is based on Progenics' UnAB technology
and has been shown IN VITRO to recognize a wide range of HIV strains, including
those most prevalent in the United States and the rest of the world. PRO 542 is
being developed as an immunotherapy to treat HIV-positive individuals and as an
immunoprophylactic treatment to prevent infection of health care workers who
have been exposed to the virus and infants born to HIV-positive mothers. The
Company plans to file an IND covering PRO 542 by the end of 1996 and initiate
Phase I/II clinical trials in 1997.
25
<PAGE>
Progenics is developing PRO 367 as a therapeutic agent designed to kill
HIV-infected cells. PRO 367 consists of a UnAB molecule linked to a therapeutic
radioisotope and is designed to bind to and destroy HIV-infected cells by
delivering a lethal dose of radioactivity. The Company plans to begin Phase I/II
clinical trials of PRO 367 in 1997.
In June 1996, the Company's scientists in collaboration with researchers at
ADARC described in an article published in NATURE the discovery of a second
receptor for HIV, CKR-5. This receptor enables fusion of HIV with the cell
membrane and entry of the virus' genetic information into the cell. The Company
is using its proprietary ProSys assay in a program to discover novel
therapeutics that specifically inhibit the interaction of HIV with the CKR-5
receptor, thereby blocking viral fusion and entry.
THE HUMAN IMMUNE SYSTEM
The human immune system functions to protect the body from disease by
specifically recognizing and destroying foreign invaders, including viruses and
bacteria. In addition, the immune system is capable of recognizing and
eliminating abnormal cells in the body, such as cancer cells and cells infected
with viruses and bacteria. White blood cells, particularly B and T lymphocytes,
have the ability to recognize antigens made by these infectious agents and
abnormal cells and react to them. For example, B lymphocytes produce antibodies
that recognize specific antigens. Antibodies can bind to these antigens and
neutralize or eliminate infectious agents and cancer cells. Vaccines can induce
the production of antibodies against antigens on infectious agents and abnormal
cells and thereby protect the body from illness. Vaccines are also being
developed as therapeutics to fight ongoing diseases. In addition, genetic
engineering techniques have enabled the production of antibodies or
antibody-like molecules in the laboratory. These genetically designed antibody
molecules may function in situations where the immune response is failing or not
present by mimicking the body's own immune response.
PRODUCT DEVELOPMENT
The Company applies its expertise in immunology to the development of
therapeutic biopharmaceuticals that use components of the immune system,
particularly antibodies, to fight diseases. The Company's two principal programs
are directed towards cancer and HIV. In the case of cancer, the Company is
developing vaccine products that are designed to induce specific antibody
responses to cancer antigens in order to fight certain cancers. In the case of
HIV, the Company is developing therapeutic products by genetically engineering
molecules that function as antibodies and selectively target HIV and
HIV-infected cells for neutralization or destruction. The Company also is
actively engaged in research and discovery of therapeutic products based on a
second HIV receptor, CKR-5, and its role in viral fusion and entry.
26
<PAGE>
The following table summarizes the status of the principal development
programs, product candidates and products of the Company:
<TABLE>
<CAPTION>
PROGRAM/PRODUCT INDICATION/USE STATUS(1)
- ---------------------------------- ---------------------------------- ----------------------------------
<S> <C> <C>
CANCER THERAPEUTICS
GMK Vaccine for melanoma Pivotal Phase III clinical trials
ongoing
MGV Vaccine for sarcoma, small cell Phase I/II clinical trials ongoing
lung cancer, colorectal and
gastric cancer, lymphoma,
neuroblastoma and melanoma
HIV THERAPEUTICS
PRO 542 HIV therapy/prophylaxis Phase I/II clinical trials
expected to commence in 1997
PRO 367 HIV therapy Phase I/II clinical trials
expected to commence in 1997
CKR-5/Fusion HIV therapy Research
(using ProSys)
ProVax HIV vaccine Research
ASSAYS, DRUG SCREENING PROGRAM AND
REAGENTS
ONCOTECT GM Clinical assay for cancer In clinical investigational use
prognosis
HIV Attachment Drug Screen High-throughput screening to In use
identify small-molecule drugs to
treat HIV infection
sCD4 Research reagent On market
gp120 Research reagent On market
</TABLE>
--------------------------
(1) "Research" includes initial research related to specific molecular
targets, synthesis of new chemical entities and assay development for
the identification of lead compounds.
Phase I-III clinical trials denote safety and efficacy tests in humans
as follows:
Phase I: Evaluation of safety.
Phase II: Evaluation of safety, dosage and efficacy.
Phase III: Larger scale evaluation of safety and efficacy potentially
requiring larger patient numbers, depending on the clinical indication
for which marketing approval is sought.
See "Business--Government Regulation."
27
<PAGE>
CANCER THERAPEUTICS
The Company is currently developing two therapeutic cancer vaccines, one
specifically for melanoma and one for a variety of cancers, including sarcoma,
small cell lung cancer, colorectal and gastric cancer, lymphoma, neuroblastoma
and melanoma.
To date, the principal therapies for cancer have been surgery, radiation and
chemotherapy. In contrast to these invasive and toxic approaches, cancer
vaccines are now being developed to stimulate the natural defense mechanisms of
the immune system to fight cancer. Unlike traditional infectious disease
vaccines that are used to prevent infection in the general population, most
cancer vaccines are therapeutic, meaning that they are being developed to
prevent recurrence of cancer in people whose cancer is in remission. In some
cases, cancer vaccines are also being designed for use in the prevention of
cancer in individuals who are at high risk for the disease.
A major challenge in cancer vaccine development is that the natural human
immune response generally does not produce sufficient antibodies to fight cancer
cells because the immune system often does not recognize the difference between
normal cells and cancer cells. Consequently, a primary objective in the
development of cancer vaccines is to train the immune system to recognize cancer
cells as a threat. If this can be achieved and the immune system can produce
sufficient antibodies to the cancer, then the recurrence of the cancer may be
prevented. Most cancer vaccines of parties other than the Company that are in
clinical development consist of dead cancer cells or crude extracts from cancer
cells. The limitations of these approaches include the inability to identify the
active components of the vaccine and to measure specific immune responses.
PROGENICS' TECHNOLOGY: GANGLIOSIDE CONJUGATE VACCINES
Progenics' cancer vaccine program is different from other approaches in that
it involves the use of purified gangliosides as cancer antigens. Gangliosides
are chemically-defined molecules which are composed of carbohydrate and lipid
components. Certain gangliosides are usually found in low amounts in normal
human tissue, but are abundant in certain cancers, such as melanoma, sarcoma,
small cell lung cancer, colorectal and gastric cancer, lymphoma and
neuroblastoma.
Gangliosides alone, however, do not normally trigger an immune response in
humans. To overcome this, Progenics attaches gangliosides to large, highly
immunogenic carrier proteins to form "conjugate" vaccines designed to trigger
specific immune responses to ganglioside antigens. The technique of conjugating
carbohydrate molecules to carrier proteins has been successfully used by others
in the past to create effective vaccines for certain infectious diseases. For
example, conjugate vaccines have been approved for marketing by the FDA and are
currently administered to infants and children to prevent certain bacterial
infections. To further augment the immune response to gangliosides, Progenics
adds a potent immunological stimulator known as an "adjuvant" to its
ganglioside-carrier protein conjugate. The following diagram illustrates the
components of the Company's ganglioside conjugate vaccines.
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[DIAGRAM ILLUSTRATING THE COMPONENTS OF THE COMPANY'S
GANGLIOSIDE CONJUGATE VACCINES]
The Company's ganglioside conjugate vaccines stimulate the immune system to
produce specific antibodies to ganglioside antigens. These antibodies have been
shown IN VITRO to recognize and destroy cancer cells. Based on these tests and
the clinical trial results described below, the Company believes that
vaccination of cancer patients with ganglioside conjugate vaccines will prevent
recurrence of cancer and prolong overall survival.
The Company's cancer vaccines use known amounts of chemically-defined
antigens, not dead cancer cells or crude extracts from cancer cells. As a
result, Progenics is able to measure specific immune responses to the
gangliosides in its vaccines. The Company also believes that there is a reduced
likelihood of variability in its products as compared to vaccines which are
prepared from dead cancer cells or crude extracts from cancer cells or which
require complicated manufacturing processes.
GMK: THERAPEUTIC VACCINE FOR MELANOMA
Progenics' most advanced product under development is GMK, a proprietary
therapeutic vaccine for melanoma that is currently in pivotal Phase III clinical
trials. GMK is the first cancer vaccine based on a defined cancer antigen to
enter Phase III clinical trials. GMK was initially developed at Sloan-Kettering
by scientists affiliated with the Company and is exclusively licensed to the
Company. GMK is designed to prevent recurrence of melanoma in patients who are
at risk of relapse after surgery. GMK is composed of the ganglioside GM2
conjugated to the carrier protein KLH (keyhole limpet hemocyanin) and combined
with the adjuvant QS-21.
TARGET MARKET
Melanoma is a highly lethal cancer of the skin cells that produce the
pigment melanin. In early stages melanoma is limited to the skin, but in later
stages it spreads to the lungs, liver, brain and other organs. The Company
estimates that there are 300,000 melanoma patients in the U.S. today. The
American Cancer Society estimates that 38,000 patients in the U.S. will be newly
diagnosed with melanoma in 1996. In the U.S., the incidence of melanoma is
increasing at a rate of approximately 6% per year, an increase in incidence that
is faster than that of any other cancer in men and second only to lung cancer in
women. It is estimated that one in 87 Americans will develop melanoma in their
lifetime. Increased exposure to the
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<PAGE>
ultraviolet rays of the sun may be an important factor contributing to the
increase in new cases of melanoma.
Melanoma patients are categorized according to the following staging system:
MELANOMA STAGING
<TABLE>
<CAPTION>
STAGE I STAGE II STAGE III STAGE IV
- --------------------- --------------------- --------------------- ---------------------
<S> <C> <C> <C>
- - lesion less than - lesion greater - metastasis to - distant
1.5 mm thickness than 1.5 mm regional draining metastasis
thickness lymph nodes
- - no apparent - local spread from - regional spread
metastasis primary cancer from primary
site cancer site
</TABLE>
GMK is designed for the treatment of patients with Stage II or Stage III
melanoma. It is estimated that these patients comprise about 50% of the total
number of melanoma patients and, accordingly, the Company estimates that there
are currently 150,000 Stage II and III melanoma patients in the U.S. According
to the American Cancer Society, an estimated 60% to 80% of Stage III melanoma
patients will experience recurrence of their cancer and die within five years
after surgery.
CURRENT THERAPIES
Standard treatment for all melanoma patients includes surgical removal of
the cancer. Thereafter, therapy varies depending on the stage of the disease.
For Stage I and II melanoma patients, treatment generally consists of close
monitoring for recurrence. The only approved treatment for Stage III melanoma
patients is high-dose alpha interferon, which received FDA marketing approval
for this indication in December 1995. In a recently reported study, the median
recurrence-free survival period after surgery for patients treated with
high-dose alpha interferon was 20 months versus 12 months for patients who
received no treatment. In addition, the median overall survival period after
surgery was 46 months for the treated group versus 34 months for the untreated
group. However, treatment with high-dose alpha interferon causes substantial
toxicities, requires an intensive treatment over twelve months (intravenous
injections five days a week for the first month followed by subcutaneous
injections three times a week for the remaining eleven months) and costs about
$35,000 per year.
Other approaches for treatment of Stage II or III melanoma patients are
currently under investigation, but none has been approved for marketing. These
experimental therapies include chemotherapy, low-dose alpha interferon and other
vaccines.
CLINICAL TRIALS
GMK entered pivotal Phase III clinical trials in the United States in August
1996. In addition, Progenics plans to initiate two international Phase III
clinical trials of GMK in 1997. GMK is administered in the studies by 12
subcutaneous injections over a two-year period on an out-patient basis.
The ongoing U.S. Phase III trial compares GMK with high-dose alpha
interferon in Stage IIb (advanced Stage II) and Stage III melanoma patients who
have undergone surgery but are at high risk for recurrence. This randomized
trial, which is expected to enroll 850 patients, is being conducted nationally
by ECOG in conjunction with SWOG and other major cancer centers, cooperative
cancer research groups, hospitals and clinics. ECOG and SWOG are leading
cooperative cancer research groups supported by the NCI and are comprised of
several hundred participating hospitals and clinics in the United States. The
primary endpoint of the trial is to compare the recurrence of melanoma in
patients receiving GMK versus in patients receiving high-dose alpha interferon.
The study will also compare quality of life and overall survival of patients in
both groups.
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<PAGE>
The second Phase III clinical trial will be a double-blind,
placebo-controlled study in Stage IIb and Stage III melanoma patients who have
undergone surgery but are at high risk for recurrence. This trial will be
conducted by major cancer centers, hospitals and clinics in Europe, Australia,
and New Zealand. In the United Kingdom, the study will be conducted by the ICR,
a major government-sponsored cancer research organization. Patients will be
randomized to receive either GMK or a placebo (because high-dose alpha
interferon has not been approved for use in melanoma in the countries involved
in this trial). The primary endpoint of the trial is to compare the recurrence
of melanoma in patients receiving GMK versus in patients receiving placebo. The
study will also compare overall survival of patients in both groups.
The third Phase III clinical trial will be a randomized study exclusively in
Stage II melanoma patients who have undergone surgery but are at intermediate
risk for recurrence. This trial will be conducted in Europe by the EORTC, the
major cooperative cancer research group in Europe, and in the United States by
ECOG. Patients will be randomized to receive either GMK or observation with no
treatment. The primary endpoint of the trial is to compare the recurrence of
melanoma in patients receiving GMK versus in patients receiving observation with
no treatment. The study will also compare overall survival of patients in both
groups.
In addition, Phase I/II clinical trials of GMK in combination with high-dose
alpha interferon in Stage II, III, and IV melanoma patients who have undergone
surgery but are at high risk of recurrence will start in 1997. This study will
be conducted by ECOG and Sloan-Kettering in collaboration with the Company and
the Schering-Plough Corporation, a pharmaceutical company which manufactures
alpha interferon. Patients will be randomized to receive GMK in combination with
high-dose alpha interferon or GMK alone. The primary endpoint of the trial will
be to establish the safety of the combined treatment and the ability of GMK to
induce antibodies to GM2 ganglioside when administered with high-dose alpha
interferon.
A predecessor of GMK, called GM2-BCG, which combined GM2 ganglioside with
the adjuvant BCG, underwent clinical testing at Sloan-Kettering in the late
1980s. In a double-blind, randomized Phase II study in 122 Stage III melanoma
patients, subjects in the treated group received GM2-BCG for six months after
surgery; subjects in the control group received the same regimen with BCG alone.
The median recurrence-free survival period after surgery for patients treated
with GM2-BCG was 33 months versus 17 months for the patients in the control
group. In addition, the median overall survival period after surgery for
patients in the treated group was 70 months versus 30 months for patients in the
control group. Approximately 85% of treated patients developed antibodies to GM2
ganglioside. The presence of these antibodies significantly correlated with
improved recurrence-free and overall survival of patients.
Phase I/II clinical trials of GMK under institutional INDs were conducted at
Sloan-Kettering over the last five years. In these studies, approximately 120
patients, most of whom had Stage III melanoma, were treated with GMK. All
patients receiving GMK at the dose level being used in the current Phase III
trials of GMK developed antibodies to GM2 ganglioside. Patients treated with GMK
had levels of antibody to GM2 ganglioside that were on average four times higher
and also were longer lasting than in patients treated with GM2-BCG in the
GM2-BCG Phase II trial. In addition, GMK was well tolerated by all patients in
these studies, and no clinically significant side effects attributable to the
vaccine were observed.
MGV: THERAPEUTIC VACCINE FOR CERTAIN CANCERS
Progenics' second ganglioside conjugate vaccine in development, MGV, is a
proprietary therapeutic vaccine for cancers which express GD2 or GM2
gangliosides. These cancers include sarcoma, small cell lung cancer, colorectal
and gastric cancer, lymphoma, neuroblastoma and melanoma. MGV has three
components: (i) GM2-KLH (GM2 ganglioside conjugated to KLH); (ii) GD2-KLH (GD2
ganglioside conjugated to KLH); and, (iii) QS-21 adjuvant. MGV is designed to
prevent recurrence of cancer and prolong overall survival of patients after
their cancer has been removed by surgery or reduced by chemotherapy or radiation
therapy.
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<PAGE>
CLINICAL TRIALS
MGV entered dose-escalating Phase I/II clinical trials in September 1996
under an institutional IND at Sloan-Kettering. The trial is enrolling Stage II,
III and IV melanoma patients who have undergone surgery but are at high risk for
recurrence. The primary objectives of the study are to establish the safety of
MGV and the ability of the vaccine to induce specific immune responses to both
GD2 and GM2 gangliosides. In addition, a goal of the study is to determine the
appropriate ratio of GD2 and GM2 gangliosides in MGV to be used in future
clinical trials.
The GM2-KLH/QS-21 (GMK) and GD2-KLH/QS-21 components of MGV underwent
clinical testing separately. The results of clinical studies with GMK are
discussed above. To date, six melanoma patients have received GD2-KLH/QS-21 in
Phase I/II clinical trials under an institutional IND at Sloan-Kettering. All
six subjects developed antibodies to GD2 ganglioside following vaccination. In
addition, the vaccine was well tolerated and no clinically significant side
effects attributable to the vaccine were observed. Therefore, the Company
expects that patients receiving MGV will develop antibodies to both GD2 and GM2
gangliosides.
HIV THERAPEUTICS
HIV infection causes a slowly progressive deterioration of the immune system
which results in AIDS. AIDS is characterized by a general collapse of the immune
system leading to a wasting syndrome, frequent opportunistic infections, rare
forms of cancer, central nervous system degeneration, and eventual death. HIV
infection is unusual in that individuals testing positive for the virus can
survive for many years without symptoms of the disease. There are three major
routes of transmission of the virus: sexual contact, exposure to
HIV-contaminated blood or blood products and mother-to-child transmission.
HIV specifically infects cells that have the CD4 receptor on their surface
("CD4+"). CD4+ cells are critical components of the immune system, and include T
lymphocytes, monocytes, macrophages and dendritic cells. The deleterious effects
of HIV are largely due to the replication of the virus in CD4+ T lymphocytes and
the resulting destruction of these cells.
HIV-positive individuals display both antibodies and other immune system
responses which are specific to the virus. However, the high fatality rate of
this disease makes it clear that these natural immune system responses do not
provide adequate long-term protection. There are two reasons why these natural
responses are inadequate. First, as described above, the CD4+ T lymphocytes
required to mount an effective immune response against HIV are destroyed,
leaving the immune system too weak to eliminate the virus. Second, HIV displays
a remarkable degree of variability as a result of high rates of mutation that
permit different strains of the virus to escape the immune system response and
progressively replicate throughout the body.
The Company's scientists and their collaborators have made important
discoveries in understanding how HIV enters human cells and initiates viral
replication. In the 1980s, Company scientists in collaboration with researchers
at Columbia University, the ICR and the Centers for Disease Control and
Prevention ("CDC") demonstrated that the initial step of HIV infection involves
the specific attachment of the virus to the CD4 receptor on the surface of human
immune system cells. These researchers also showed that the gp120 glycoprotein
located on the HIV envelope binds with high affinity to the CD4 receptor.
Although these researchers demonstrated that CD4 was necessary for HIV
attachment, this step is not sufficient to enable the virus to enter the cell
and initiate viral replication.
In June 1996, Company scientists in collaboration with researchers at ADARC
described in an article in NATURE the discovery of a second receptor for HIV on
the surface of human immune system cells. This receptor, CKR-5, enables fusion
of HIV with the cell membrane after binding of the virus to the CD4 receptor.
This fusion step results in entry of the viral genetic information into the cell
and subsequent viral replication. Recently, Company scientists in collaboration
with researchers at ADARC demonstrated that it is the gp120 glycoprotein that
binds to the newly discovered CKR-5 receptor as well as to the CD4 receptor.
This process is shown below.
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<PAGE>
[DIAGRAM DEPICTING THE GP120 GLYCOPROTEIN BINDING TO THE NEWLY DISCOVERED
CKR-5 RECEPTOR AND THE CD4 RECEPTOR AND ALSO THE FUSION OF THE VIRUS WITH
THE HUMAN CELL MEMBRANE]
PROGENICS' HIV RECEPTOR TECHNOLOGIES: UNABS AND CKR-5/FUSION
Based on the Company's participation in the discoveries of two major
receptors for HIV, Progenics is pursuing two approaches in the research and
development of products designed to block entry of HIV into human immune system
cells. The Company's UnAB approach is based on the CD4 receptor while its HIV
fusion approach is based on a recently discovered second receptor, CKR-5.
Because HIV must first attach to the CD4 receptor to infect human cells, the
Company believes that the part of the gp120 glycoprotein that attaches to the
CD4 receptor must remain constant across all strains of the virus. The gp120
glycoprotein is located on the exterior of both HIV and HIV-infected cells.
Progenics' UnABs incorporate a part of the CD4 receptor into
genetically-engineered molecules that function like antibodies and are designed
to bind specifically to the gp120 glycoprotein of HIV or HIV-infected cells. In
IN VITRO tests, the Company's UnABs have demonstrated the ability to bind with
high affinity to gp120 glycoproteins from a wide range of HIV strains, including
the strains most prevalent in the U.S. and the rest of the world. Because the
Company's UnAB technology is targeted to a part of HIV that must remain constant
in order for the virus to enter cells, the Company believes that its technology
may address the obstacles presented by the high mutation rate of the virus.
Two of the Company's HIV products under development are based on its
proprietary UnAB technology, although they employ the technology in different
ways. PRO 542 is designed to bind to the gp120 glycoprotein located on the virus
itself, thereby preventing it from infecting healthy cells. PRO 367 is designed
to bind to the gp120 glycoprotein located on the exterior of HIV-infected cells
and destroy those cells by delivering a lethal dose of radioactivity. The two
products also differ in that each molecule of PRO 542 has four binding sites for
HIV while each molecule of PRO 367 has two binding sites. See the back cover of
this Prospectus for diagrams of these products. In the area of HIV fusion, the
Company is using its proprietary ProSys assay in a program to discover novel
therapeutics that specifically inhibit the interaction of HIV with the CKR-5
receptor, thereby blocking viral fusion and entry.
TARGET MARKET
Progenics' therapeutic product candidates are designed primarily for use in
asymptomatic HIV-positive individuals. Accordingly, the target population for
these products is patients who are aware of their infection but do not yet have
AIDS. Although there are few signs of disease in an HIV-positive individual
during the asymptomatic period, the virus is replicating in the body by
infecting healthy cells. The U.S. Public Health Service estimates that more than
1,000,000 people in the U.S. are infected with HIV. The World Health
Organization reported that approximately 17,000,000 individuals were infected
with HIV worldwide in 1994. The CDC estimated that as of December 1995 more than
190,000 people in the U.S. had AIDS. AIDS is currently the leading cause of
death in the U.S. in men between the ages of 25 and 44 and the third leading
cause of death in the U.S. in women between those ages.
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<PAGE>
Two additional potential markets for the Company's HIV product candidates
are: (i) health care workers exposed to HIV-contaminated body fluids through
accidental needlestick injuries; and (ii) babies born to HIV-positive women.
According to a recent academic study, in 1990 there were over 250,000
percutaneous needlestick injuries among U.S. hospital employees. The CDC
reported that in 1993 there were approximately 7,000 children born to
HIV-positive women in the U.S.
CURRENT THERAPIES
At present, two classes of products have received FDA marketing approval for
the treatment of HIV infection and AIDS: reverse transcriptase inhibitors and
protease inhibitors. Both types of drugs are inhibitors of viral enzymes and
have shown efficacy in reducing the concentration of HIV in the blood and
prolonging asymptomatic periods in HIV-positive individuals, especially when
administered in combination. However, it is not known whether HIV will develop
resistance to these drugs over time. In addition, the use of these drugs
presents problems of toxic side effects and compliance for some patients.
PRO 542: HIV THERAPY/PROPHYLAXIS
Progenics is developing PRO 542 for the treatment and post-exposure
prevention of HIV infection. PRO 542 is a proprietary UnAB-based product with
four binding sites for the gp120 glycoprotein on HIV. PRO 542 is designed to
neutralize infectious HIV through one of two mechanisms: (i) binding to and
thereby blocking the gp120 glycoprotein; or (ii) binding to and detaching the
gp120 glycoprotein from the virus.
In IN VITRO and EX VIVO tests conducted by Progenics in collaboration with
scientists at ADARC and the CDC, PRO 542 potently neutralized a wide variety of
clinical strains of HIV as well as viruses in the plasma of HIV-positive
individuals. In comparative IN VITRO studies at ADARC using a panel of
neutralizing antibodies to HIV, PRO 542 was found to be more potent and broadly
neutralizing than the antibodies to which it was compared. In further studies at
ADARC, PRO 542 protected severe combined immune deficient ("SCID") mice
transplanted with human peripheral blood lymphocytes against infection by the
three HIV strains tested, including strains of the virus isolated from
HIV-positive individuals.
Progenics plans to file an IND for PRO 542 in 1996 and, subject to its IND
becoming effective, initiate two dose-escalation Phase I/II clinical trials in
1997. The first study will be conducted in HIV-positive adult patients at Mount
Sinai Medical Center and the Bronx V.A. Medical Center, both in New York City.
The second trial will be conducted in HIV-positive children at Baylor College of
Medicine in Houston by the AIDS Clinical Trials Group, ("ACTG"), a leading
cooperative HIV research group supported by the National Institute of Allergy
and Infectious Diseases ("NIAID"). Both trials will measure safety,
pharmacokinetics and antiviral activity of PRO 542.
PRO 367: HIV THERAPY
Progenics is developing PRO 367 as a therapeutic agent designed to destroy
HIV-infected cells. PRO 367 is composed of a proprietary UnAB molecule with two
binding sites for the gp120 glycoprotein linked to a therapeutic radioisotope.
PRO 367 is designed to specifically bind with high affinity to the gp120
glycoprotein on HIV-infected cells and to destroy these cells by delivering a
lethal dose of radioactivity.
The Company plans to initiate dose-escalation Phase I/II clinical trials of
PRO 367 in 1997, subject to obtaining necessary regulatory approvals. The PRO
367 study will be conducted by the French Association Nationale de Recherches
contre le SIDA at the Pitie-Salpetriere Hospital in Paris. The study will assess
safety, pharmacokinetics, biodistribution and antiviral effects of PRO 367 in
HIV-positive adult patients.
In IN VITRO tests, PRO 367 specifically bound with high affinity to the
gp120 glycoprotein on the cell surface. In addition, a pilot Phase I clinical
trial in AIDS patients of a trace-labelled precursor of PRO 367 is being
conducted under an institutional IND at Sloan-Kettering. This trial is assessing
the safety, pharmacology and biodistribution of the compound with low doses of
iodine-131. To date, the compound
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<PAGE>
has been well tolerated by all patients and no clinically significant side
effects attributable to the compound have been observed.
CKR-5/FUSION (USING PROSYS): HIV THERAPY
The Company has applied its HIV receptor technology, particularly with
respect to the CKR-5 receptor, to develop a proprietary assay known as ProSys.
ProSys models fusion of HIV with human cells by means of a rapid, automated and
sensitive assay that does not involve the use of infectious virus. Progenics is
using ProSys in a program to discover novel biologic and small-molecule
therapeutics that specifically inhibit the interaction between HIV and the CKR-5
receptor, thereby blocking viral fusion and entry. Progenics is currently
seeking pharmaceutical company collaborators for this program.
PROVAX: HIV VACCINE
Progenics is conducting research with respect to ProVax, a vaccine candidate
which it believes will be useful as a preventative or a therapeutic treatment
for HIV-positive individuals. Progenics is currently performing
government-funded research and development of ProVax in collaboration with
ADARC, the Southwest Foundation for Biomedical Research in San Antonio and the
University of Oklahoma Medical Center.
ASSAYS, DRUG SCREENING PROGRAM AND REAGENTS
Through its immunology expertise, Progenics has developed certain assays
which are used both independently and in collaboration with partners, as well as
certain reagents which are being sold for research use only.
ONCOTECT GM
Progenics has developed ONCOTECT GM, a clinical assay for assessing
prognosis in patients with melanoma and other cancers. ONCOTECT GM measures the
levels of antibody to GM2 ganglioside in the blood. In clinical trials of a
therapeutic vaccine for melanoma, the presence of these antibodies significantly
correlated with improved recurrence-free and overall survival of patients. The
Company is currently using ONCOTECT GM in its cancer vaccine clinical trials.
HIV ATTACHMENT DRUG SCREEN
Progenics, as part of a collaborative development project with American
Cyanamid Company ("American Cyanamid"), a subsidiary of American Home Products
Corporation ("American Home Products"), has developed a proprietary drug
screening assay designed to identify novel small-molecule therapeutics for HIV
infection which inhibit attachment of the virus to the CD4 receptor. This assay
has been used in a high-throughput screening program. The Company and American
Cyanamid have agreed that all discoveries made in the course of their
collaboration will be jointly owned. Progenics and the Wyeth-Ayerst Research
Division of American Home Products plan to perform additional studies to
evaluate the antiviral activity of the compounds discovered in the course of the
screening program.
RESEARCH REAGENTS: SCD4 AND GP120
Progenics manufactures the research reagents sCD4 and gp120 which it sells
to DuPont de Nemours & Company ("DuPont") and Intracel Corporation ("Intracel")
for resale. DuPont markets and sells gp120 and sCD4 under both the Progenics and
the DuPont names. Intracel markets and sells gp120 and sCD4 under both the
Progenics and Intracel names. These products are sold world-wide for research
use.
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<PAGE>
BUSINESS STRATEGY
Progenics' strategy is to develop innovative products for the treatment and
prevention of cancer and viral diseases based upon its expertise in immunology.
Key elements of the Company's strategy are as follows:
LEVERAGE CORE PROPRIETARY TECHNOLOGIES. Progenics is developing a portfolio
of therapeutic cancer vaccines and HIV treatments utilizing its proprietary
ganglioside conjugate vaccine, UnAB and CKR-5/fusion technologies. Progenics has
recently commenced pivotal Phase III clinical trials of GMK and Phase I/II
clinical trials of MGV, and plans to initiate clinical trials of its HIV
products in 1997. The Company also is actively involved in research based on the
discovery of a second HIV receptor, CKR-5, and its role in viral fusion and
entry. The Company is exploring additional applications of these existing core
technologies. For example, the Company is continuing to screen additional
cancers for the presence of specific gangliosides in order to develop vaccines
to treat a variety of cancers and continues to perform additional research into
the mechanism of HIV entry into the cell.
IN-LICENSE ADDITIONAL PRODUCT CANDIDATES AND TECHNOLOGIES. The Company
intends to continue to in-license technologies and product candidates that
complement its existing capabilities. Sources for these technologies range from
academic institutions and research organizations to other biotechnology and
pharmaceutical companies. In particular, the Company's license agreement with
Sloan-Kettering covers certain future developments in the cancer vaccine field
resulting from work performed in a laboratory at Sloan-Kettering. The Company
believes this in-licensing strategy will enable it to bring products to market
more quickly, efficiently and at lower cost while it focuses its expertise on
product development and pre-clinical and clinical trial design and
implementation.
ESTABLISH COLLABORATIONS TO MINIMIZE DEVELOPMENT COSTS AND ACCESS
EXPERTISE. Progenics has carefully controlled its expenditures on early stage
research, clinical trials and related infrastructure by establishing
collaborations with leading research institutions and clinical research
organizations. For example, Progenics currently has collaborations with academic
and government institutions such as Sloan-Kettering, ADARC and the CDC, and
clinical research groups such as ECOG, SWOG, ICR and EORTC. These relationships
enable the Company to substantially reduce its financing requirements for basic
research and clinical trials. In addition, collaboration with these groups
allows the Company to access their substantial expertise. Finally, Progenics has
funded, and plans to continue to fund, a significant portion of certain of its
programs with government research grants and contracts.
SELECT AN APPROPRIATE COMMERCIALIZATION STRATEGY FOR EACH
PRODUCT. Progenics will determine what it believes to be the most expedient and
cost-effective way to commercialize each product that it develops. Progenics may
undertake to manufacture, market and sell the product itself, or may undertake
one or more of these functions in conjunction with third-party manufacturers,
marketers, distributors, representatives, licensors or others. To date,
Progenics has retained all commercial rights to its four principal products, all
of which have entered, or are about to enter, human clinical trials. As a
result, the Company believes that it will be able to retain a greater share of
the economic value of these products which it, or a collaborator selected by it,
is able to bring to market. The key factors that will guide Progenics in making
each of these decisions are the nature of the product, the facilities and skills
required to manufacture the product, the anticipated distribution channels and
required marketing capabilities and the resources and skills of prospective
collaborators.
LICENSES
The Company is a party to license arrangements under which it has obtained
rights to use certain technologies in its cancer and HIV programs. Set forth
below is a summary of those licenses that the Company believes to be important
to its business.
The Company is party to a license agreement with Sloan-Kettering under which
the Company obtained the world-wide, exclusive rights to certain ganglioside
conjugate vaccines, including GMK and
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<PAGE>
MGV, and their use to treat or prevent cancer. The Sloan-Kettering license
terminates upon the expiration of the last of the licensed patents or 15 years
from the date of the first commercial sale of a licensed product pursuant to the
agreement, whichever is later. In addition to patent applications, the Sloan-
Kettering license includes the exclusive rights to use certain relevant
technical information and know-how, as well as rights to certain future
developments. A number of Sloan-Kettering physician-scientists also serve as
consultants to the Company.
The Company is party to a license agreement with The Regents of the
University of California under which the Company obtained the exclusive rights
to an issued U.S. patent covering certain ganglioside conjugate vaccines. The
license agreement terminates upon the expiration of the patent.
The Company is party to a license agreement with Columbia University under
which the Company has obtained co-exclusive, world-wide rights to certain
technology relating to CD4 and its use to treat or prevent HIV infection. The
Company is currently in discussions with Columbia University that would change
the license agreement to an exclusive, world-wide license and amend other key
provisions. This Prospectus reflects the anticipated terms of the amendment with
Columbia University and will be updated to reflect the final terms of any
amendment prior to the effective date of the registration statement of which
this Prospectus is a part. The license agreement (and the expected amendment)
will terminate upon the expiration of the last of the licensed patents.
The Company has entered into a license and supply agreement with CBC
pursuant to which CBC agreed to supply the Company with all of its requirements
for the QS-21 adjuvant, a component of certain ganglioside-based cancer
vaccines, including GMK and MGV. The agreement grants to the Company a license
to use CBC's patented technology to develop, manufacture and sell cancer
vaccines using QS-21 and, if CBC is unable to supply the Company with sufficient
quantities of QS-21, the Company has the right to manufacture QS-21 itself or
purchase it from third parties for so long as CBC is unable to supply the
Company with sufficient quantities of QS-21. QS-21 is the lead compound in the
Stimulon-TM- family of adjuvants developed and owned by CBC. The license
terminates upon the expiration of the last of the licensed patents.
The licenses to which the Company is a party impose various milestone,
commercialization, sublicensing, royalty and other payment, insurance and other
obligations on the Company. Failure by the Company to comply with these
requirements could result in the termination of the applicable agreement, which
could have a material adverse effect on the Company's business.
RESEARCH AND DEVELOPMENT COLLABORATIONS
The Company has entered into collaborative agreements with various parties
relating to its cancer and HIV programs. Set forth below is a summary of those
collaborations that the Company believes to be important to its business.
The Company is working on a collaborative basis with ADARC with respect to
the development of certain of the Company's HIV programs. Under the agreement
with ADARC, the Company is obligated to pay the salary of an ADARC technician
who works on scientific projects of mutual interest to the Company and ADARC.
The Company is party to a cooperative research and development agreement
with the CDC to conduct collaborative research on several of the Company's
products, including PRO 542. Under the agreement with the CDC, the Company
provides researchers with certain materials for investigation at the CDC. The
agreement with the CDC terminates when the research plan, as described in the
agreement, is completed, unless earlier terminated by the parties.
In general, the Company's collaborative research agreements require the
payment by Progenics of various amounts in support of the research to be
conducted. If the collaborator creates any invention during the course of its
efforts, solely or jointly with the Company, the Company generally has an option
to negotiate an exclusive, royalty-bearing license of the collaborator's rights
in the invention for the purpose of commercializing any product incorporating
such invention. Inventions developed solely by the Company's scientists as part
of the collaboration generally are owned exclusively by the Company. Most of
these collaborative agreements are non-exclusive and can be cancelled on
relatively short notice.
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<PAGE>
GOVERNMENT GRANTS
Through June 30, 1996, the Company had been awarded government grants,
aggregating approximately $1,299,000 under the Small Business Innovation
Research ("SBIR") program of the NIH for the Company's commercial development of
PRO 542, PRO 367, ProVax and ProSys. All of the funding under these grants has
been paid to the Company. In addition, the Company has been awarded a $812,000
multi-year grant under a contract with the Department of Defense for work
related to ProVax. Through June 30, 1996 the Company had recognized
approximately $357,000 of such amount as revenue.
Under the terms of these grants, the Company has, subject to certain rights
of the government described below, all right, title and interest to all patents,
copyrights and data pertaining to any product developed. However, under existing
regulations, the government receives a royalty-free license for federal
government use with respect to patents developed by grant recipients. In
addition, the government may, in certain circumstances, require the Company to
license technology resulting from the funded projects to third parties and may
require that the Company manufacture substantially all of the products resulting
from a particular grant in the United States.
The government's obligation to make payments under these grants is subject
to appropriation by the United States Congress for funding in each such year.
Moreover, it is possible that Congress or the government agencies that
administer these government research programs will determine to scale back these
programs or terminate them or that the government will award future grants to
competitors of the Company instead of the Company. In addition, while Progenics
intends to pursue additional government grants related to its areas of research
and development, there can be no assurances that the Company will be awarded any
such grants in the future or that any amounts derived therefrom will not be less
than those received to date.
PATENTS AND PROPRIETARY TECHNOLOGY
Progenics' policy is to protect its proprietary technology, and the Company
considers the protection of such rights to be important to its business. In
addition to seeking U.S. patent protection for many of its inventions, the
Company generally files patent applications in Canada, Japan, Western European
countries and additional foreign countries on a selective basis in order to
protect the inventions deemed to be important to the development of its foreign
business.
Under a license agreement with Sloan-Kettering, Progenics obtained the
worldwide, exclusive rights to certain ganglioside conjugate vaccines, including
GMK and MGV, and their use to treat or prevent cancer. This technology is the
subject of a patent application filed by Sloan-Kettering in the U.S. and 14
foreign countries claiming composition of matter and methods of production and
use of certain ganglioside-based vaccines for the treatment of human cancer.
The Company has licensed issued U.S. and European patents and several
related U.S. and foreign patent applications from Columbia University relating
to CD4 and its use to treat or prevent HIV infection, which name Dr. Maddon and
certain members of the Company's Virology Scientific Advisory Board as
inventors. Progenics has also filed a number of U.S. and foreign patent
applications on its UnAB, ProSys and ProVax technologies and clinical uses of
these technologies.
There can be no assurance that patent applications owned by or licensed to
the Company will result in patents being issued or that, if issued, the patents
will afford protection against competitors with similar technology. Although a
patent has a statutory presumption of validity in the United States, the
issuance of a patent is not conclusive as to such validity or as to the
enforceable scope of the claims of the patent. There can be no assurance that
the Company's issued patents or any patents subsequently issued to or licensed
by the Company will not be successfully challenged in the future. The validity
or enforceability of a patent after its issuance by the patent office can be
challenged in litigation. The cost of litigation to uphold the validity of
patents and to prevent patent infringement can be substantial. If the outcome of
the
38
<PAGE>
litigation is adverse to the owner of the patent, third parties may then be able
to use the invention covered by the patent without payment. There can be no
assurance that the Company's patents will not be infringed or successfully
avoided through design innovation.
There may be patent applications and issued patents belonging to competitors
that may require the Company to alter its products, pay licensing fees or cease
certain activities. If the Company's products conflict with patents that have
been or may be granted to competitors, universities or others, such other
persons could bring legal actions against the Company claiming damages and
seeking to enjoin manufacturing and marketing of the affected products. If any
such actions are successful, in addition to any potential liability for damages,
the Company could be required to obtain a license in order to continue to
manufacture or market the affected products. There can be no assurance that the
Company would prevail in any such action or that any license required under any
such patent would be made available on acceptable terms or at all. The Company
believes that there may be significant litigation in the industry regarding
patent and other intellectual property rights. If the Company becomes involved
in such litigation, it could consume substantial resources.
Progenics has also filed a number of U.S. and foreign patent applications
(one of which is owned jointly with ADARC) relating to the discovery of a second
HIV receptor, CKR-5. In addition to the risks described above, the Company is
aware that other groups have claimed discoveries similar to that covered by the
Company's patent applications. These groups may have made their discoveries
prior to the discoveries covered by the Company's patent applications and may
have filed their applications prior to the Company's patent applications. The
Company does not expect to know for several years the relative strength of its
patent position as compared to these other groups.
The enactment of the legislation implementing the General Agreement on
Tariffs and Trade has resulted in certain changes to United States patent laws
that became effective on June 8, 1995. Most notably, the term of patent
protection for patent applications filed on or after June 8, 1995 is no longer a
period of seventeen years from the date of grant. The new term of United States
patents will commence on the date of issuance and terminate twenty years from
the earliest effective filing date of the application. Because the time from
filing to issuance of patent applications is often more than three years, a
twenty-year term from the effective date of filing may result in a substantially
shortened term of patent protection, which may adversely impact the Company's
patent position.
In addition to the patents, patent applications, licenses and intellectual
property processes described above, the Company also relies on unpatented
technology, trade secrets and information. No assurance can be given that others
will not independently develop substantially equivalent information and
techniques or otherwise gain access to the Company's technology or disclose such
technology, or that the Company can meaningfully protect its rights in such
unpatented technology, trade secrets and information. The Company requires each
of its employees, consultants and advisors to execute a confidentiality
agreement at the commencement of an employment or consulting relationship with
the Company. The agreements generally provide that all inventions conceived by
the individual in the course of employment or in providing services to the
Company and all confidential information developed by, or made known to, the
individual during the term of the relationship shall be the exclusive property
of the Company and shall be kept confidential and not disclosed to third parties
except in limited specified circumstances. There can be no assurance, however,
that these agreements will provide meaningful protection for the Company's
information in the event of unauthorized use or disclosure of such confidential
information.
GOVERNMENT REGULATION
The Company and its products are subject to comprehensive regulation by the
FDA in the United States and by comparable authorities in other countries. These
national agencies and other federal, state, and local entities regulate, among
other things, the preclinical and clinical testing, safety, effectiveness,
39
<PAGE>
approval, manufacture, labeling, marketing, export, storage, record keeping,
advertising, and promotion of the Company's products.
FDA approval of the Company's products, including a review of the
manufacturing processes and facilities used to produce such products, will be
required before such products may be marketed in the United States. The process
of obtaining approvals from the FDA can be costly, time consuming, and subject
to unanticipated delays. There can be no assurance that approvals of the
Company's proposed products, processes, or facilities will be granted on a
timely basis, or at all. Any failure to obtain or delay in obtaining such
approvals would adversely affect the ability of the Company to market its
proposed products. Moreover, even if regulatory approval is granted, such
approval may include significant limitations on indicated uses for which a
product could be marketed.
The process required by the FDA before the Company's products may be
approved for marketing in the United States generally involves (i) preclinical
laboratory and animal tests, (ii) submission to the FDA of an IND, which must
become effective before clinical trials may begin, (iii) adequate and
well-controlled human clinical trials to establish the safety and efficacy of
the drug for its intended indication, (iv) submission to the FDA of an NDA or
PLA and (v) FDA review of the NDA or PLA in order to determine, among other
things, whether the drug or product is safe and effective for its intended uses.
There is no assurance that the FDA review process will result in product
approval on a timely basis, or at all.
Preclinical tests include laboratory evaluation of product chemistry and
animal studies to gain preliminary information of a product's pharmacology and
toxicology and to identify any safety problems that would preclude testing in
humans. Products must generally be manufactured according to cGMP and
preclinical safety tests must be conducted by laboratories that comply with FDA
regulations regarding good laboratory practices. The results of the preclinical
tests are submitted to the FDA as part of an IND application and are reviewed by
the FDA prior to the commencement of human clinical trials. Unless the FDA
objects to, or makes comments or raises questions concerning, an IND, the IND
will become effective 30 days following its receipt by the FDA and initial
clinical studies may begin, although companies often obtain affirmative FDA
approval before beginning such studies. There can be no assurance that
submission of an IND will result in FDA authorization to commence clinical
trials. See "Risk Factors-- Uncertainty Associated with Preclinical and Clinical
Testing."
Clinical trials involve the administration of the investigational new drug
to healthy volunteers and to patients under the supervision of a qualified
principal investigator. Clinical trials must be conducted in accordance with the
FDA's Good Clinical Practice requirements under protocols that detail, among
other things, the objectives of the study, the parameters to be used to monitor
safety, and the effectiveness criteria to be evaluated. Each protocol must be
submitted to the FDA as part of the IND. Further, each clinical study must be
conducted under the auspices of an Institutional Review Board ("IRB"). The IRB
will consider, among other things, ethical factors, the safety of human
subjects, the possible liability of the institution and the informed consent
disclosure which must be made to participants in the clinical trial.
Clinical trials are typically conducted in three sequential phases, although
the phases may overlap. During Phase I, when the drug is initially administered
to human subjects, the product is tested for safety, dosage tolerance,
absorption, metabolism, distribution, and excretion. Phase II involves studies
in a limited patient population to (i) evaluate preliminarily the efficacy of
the product for specific, targeted indications, (ii) determine dosage tolerance
and optimal dosage, and (iii) identify possible adverse effects and safety
risks. When a new product is found to have an effect and to have an acceptable
safety profile in Phase II evaluation, Phase III trials are undertaken in order
to further evaluate clinical efficacy and to further test for safety within an
expanded patient population. The FDA may suspend clinical trials at any point in
this process if it concludes that clinical subjects are being exposed to an
unacceptable health risk.
The results of the preclinical studies and clinical studies, the chemistry
and manufacturing data, and the proposed labelling, among other things, are
submitted to the FDA in the form of an NDA or PLA,
40
<PAGE>
approval of which must be obtained prior to commencement of commercial sales.
The FDA may refuse to accept the NDA or PLA for filing if certain administrative
and content criteria are not satisfied, and even after accepting the NDA or PLA
for review, the FDA may require additional testing or information before
approval of the NDA or PLA. In any event, the FDA must deny an NDA or PLA if
applicable regulatory requirements are not ultimately satisfied. Moreover, if
regulatory approval of a product is granted, such approval may be made subject
to various conditions, including post-marketing testing and surveillance to
monitor the safety of the product, or may entail limitations on the indicated
uses for which it may be marketed. Finally, product approvals may be withdrawn
if compliance with regulatory standards is not maintained or if problems occur
following initial marketing.
Under current FDA regulations, in addition to the licensing of a vaccine
product itself through the PLA process, any establishment used to manufacture a
vaccine product must also be licensed. To obtain the necessary establishment
license, an establishment license application ("ELA") describing the facilities,
equipment, processes, and personnel used to manufacture the product in question
must be filed with the FDA. The establishment license will be granted only after
the FDA inspects the establishment and determines that the establishment
complies with all applicable standards, including, but not limited to,
compliance with cGMP and the ability to consistently manufacture the product at
the establishment in accordance with the PLA. FDA approval of both the PLA and
ELA must be received prior to marketing of a vaccine product. Therefore, any
delay in FDA's approval of the ELA, or refusal to approve the ELA, would delay
or prevent the marketing of the product in question.
On May 14, 1996, the FDA adopted a new regulation, effective May 24, 1996,
regarding the license application process for certain biological products. Those
biological products that fall within the regulation will be reviewed on the
basis of a single biologics license application ("BLA"), rather than a PLA/ELA.
The BLA includes the same information as the current PLA, but certain of the
data now required as part of the ELA do not have to be submitted or reviewed
during the approval process. This new rule is intended, at least in part, to
lessen the regulatory burden on manufacturers of certain biologics and
accelerate the approval process. There can be no assurance, however, that the
FDA will consider the new regulation applicable to any of the Company's
products, or that the BLA process, if applicable to the Company's products, will
have the intended effect of reducing review times.
Both before and after approval is obtained, a product, its manufacturer, and
the holder of the NDA or PLA for the product are subject to comprehensive
regulatory oversight. Violations of regulatory requirements at any stage,
including the preclinical and clinical testing process, the approval process, or
thereafter (including after approval) may result in various adverse
consequences, including FDA delay in approving or refusal to approve a product,
withdrawal of an approved product from the market and/or the imposition of
criminal penalties against the manufacturer and/or NDA or PLA holder. In
addition, later discovery of previously unknown problems may result in
restrictions on such product, manufacturer, or NDA or PLA holder, including
withdrawal of the product from the market. Also, new government requirements may
be established that could delay or prevent regulatory approval of the Company's
products under development.
The FDA has implemented accelerated approval procedures for certain
pharmaceutical agents that treat serious or life-threatening diseases and
conditions, and that provide meaningful therapeutic benefit over existing
treatments. The Company believes that certain of its products in development may
qualify for accelerated approval. The Company cannot predict the ultimate
impact, however, of the FDA's accelerated approval procedures on the timing or
likelihood of approval of any of its potential products or those of any
competitor. In addition, the approval of a product under the accelerated
approval procedures is subject to various conditions, including the requirement
to verify clinical benefit in postmarketing studies, and the authority on the
part of the FDA to withdraw approval under streamlined procedures if such
studies do not verify clinical benefit or under various other circumstances.
Whether or not FDA approval has been obtained, approval of a pharmaceutical
product by comparable government regulatory authorities in foreign countries
must be obtained prior to marketing such
41
<PAGE>
product in such countries. The approval procedure varies from country to
country, and the time required may be longer or shorter than that required for
FDA approval. Although there are some procedures for unified filing for certain
European countries, in general, each country has its own procedures and
requirements. The Company does not currently have any facilities or personnel
outside of the United States.
In addition to regulations enforced by the FDA, the Company also is subject
to regulation under the Occupational Safety and Health Act, the Environmental
Protection Act, the Toxic Substances Control Act, the Resource Conservation and
Recovery Act and other present and potential future federal, state or local
regulations. The Company's research and development involves the controlled use
of hazardous materials, chemicals, viruses and various radioactive compounds.
Although the Company believes that its safety procedures for storing, handling,
using and disposing of such materials comply with the standards prescribed by
applicable regulations, the risk of accidental contaminations or injury from
these materials cannot be completely eliminated. In the event of such an
accident, the Company could be held liable for any damages that result and any
such liability could have a material adverse effect of the Company. See "Risk
Factors --Government Regulation; No Assurance of Regulatory Approval" and
"--Hazardous Materials; Environmental Matters."
MANUFACTURING
Progenics has considerable expertise in the manufacture of its proprietary
ganglioside conjugate vaccines and recombinant proteins. The Company currently
manufactures GMK, MGV, PRO 542 and PRO 367 in its pilot production facilities in
Tarrytown, New York. The Company believes that its existing production
facilities will be sufficient to meet the Company's initial needs for clinical
trials. However, these facilities may be insufficient for all of the Company's
late-stage clinical trials and for its commercial-scale requirements.
Accordingly, the Company expects to be required in the future to expand its
manufacturing staff and facilities and obtain new facilities or to contract with
third parties to assist with production. In general, Progenics plans to retain
manufacturing rights and control during clinical trials and commercialization.
In the event the Company decides to establish a full-scale commercial
manufacturing facility, the Company will require substantial additional funds
and will be required to hire and train significant numbers of employees and
comply with the extensive cGMP regulations applicable to such a facility. In
addition, if any of the Company's products produced at its facilities were
regulated as biologics, the Company could be required to file an ELA and obtain
an establishment license for its facilities.
SALES AND MARKETING
Progenics plans to market products for which it obtains regulatory approval
through co-marketing, co-promotion, licensing and distribution arrangements with
third party collaborators. The Company believes that this approach will both
increase market penetration and commercial acceptance of its products and enable
the Company to avoid expending significant funds to develop a large sales and
marketing organization. The Company has entered into collaborative marketing
arrangements with DuPont and Intracel with respect to the sCD4 and gp120
research reagents.
COMPETITION
Competition in the biopharmaceutical industry is intense. The Company faces
competition from many companies, major universities and research institutions in
the United States and abroad. Many of the Company's competitors have
substantially greater resources, experience in conducting preclinical studies
and clinical trials and obtaining regulatory approvals for their products,
operating experience, research and development and marketing capabilities and
production capabilities than those of the Company. The Company will face
competition from companies marketing existing products or developing new
products for diseases targeted by the Company's technologies. The development of
new products for those diseases
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<PAGE>
for which the Company is developing products could render the Company's product
candidates noncompetitive and obsolete.
A significant amount of research in this industry is also being carried out
at academic and government institutions. These institutions are becoming
increasingly aware of the commercial value of their findings and are becoming
more aggressive in pursuing patent protection and negotiating licensing
arrangements to collect royalties for use of technology that they have
developed. These institutions may also market competitive commercial products on
their own or in collaboration with competitors. Any resulting increase in the
cost or decrease in the availability of technology or product candidates from
these institutions may affect the Company's business strategy.
Competition with respect to the Company's technologies and product
candidates is and will be based, among other things, on effectiveness, safety,
reliability, availability, price and patent position. Another important factor
will be the timing of market introduction of the Company's or competitive
products. Accordingly, the speed with which Progenics can develop products,
complete the clinical trials and approval processes and ultimately supply
commercial quantities of the products to the market is expected to be an
important competitive factor. The Company's competitive position will also
depend upon its ability to attract and retain qualified personnel, to obtain
patent protection or otherwise develop proprietary products or processes, and to
secure sufficient capital resources for the often substantial period between
technological conception and commercial sales.
PRODUCT LIABILITY
The testing, manufacturing and marketing of the Company's products involves
an inherent risk of product liability attributable to unwanted and potentially
serious health effects. To the extent the Company elects to test, manufacture or
market products independently, it will bear the risk of product liability
directly. If the Company enters into collaborative agreements with third parties
regarding commercialization of any products based on the Company's technologies,
the Company will seek to obtain indemnification agreements from such partners,
however there can be no assurance that corporate sponsors, if any, would agree
to fully indemnify the Company against losses resulting from such collaborative
efforts. The Company has obtained insurance in the amount of $5,000,000 against
the risk of product liability. This insurance is subject to certain deductibles
and coverage limitations. There is no guarantee that insurance will continue to
be available at a reasonable cost, or at all, or that the amount of such
insurance will be adequate.
HUMAN RESOURCES
At August 31, 1996, the Company had 27 full-time employees, four of whom
hold Ph.D. degrees or foreign equivalents and two of whom hold M.D. degrees.
Twenty-one employees are engaged in research and development, medical and
regulatory affairs and manufacturing activities and six are engaged in finance,
administration and business development. The Company considers its relations
with its employees to be good. None of its employees is covered by a collective
bargaining agreement.
FACILITIES
Progenics leases approximately 23,000 square feet of laboratory,
manufacturing and office space in Westchester County, New York, approximately
twenty-five miles north of New York City. The Company leases this space under an
operating lease which terminates in April 1998. Progenics has two pilot
production facilities within its leased facilities for the manufacture of
products for clinical trials.
LEGAL PROCEEDINGS
The Company is not party to any material legal proceedings.
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SCIENTIFIC ADVISORY BOARDS
An important component of Progenics' scientific strategy is its
collaborative relationship with leading researchers in cancer and virology.
Certain of these researchers are members of the Company's two Scientific
Advisory Boards (each an "SAB"), one in cancer and one in virology. The members
of each SAB attend periodic meetings and provide Progenics with specific
expertise in both research and clinical development. In addition, Progenics has
collaborative research relationships with certain individual SAB members. All
members of the SABs are employed by employers other than the Company and may
have commitments to or consulting or advisory agreements with other entities
that may limit their availability to the Company. These companies may also be
competitors of Progenics. Several members of the SABs have, from time to time,
devoted significant time and energy to the affairs of the Company. However, no
member is regularly expected to devote more than a small portion of his time to
Progenics. In general, Progenics' scientific advisors are granted stock options
in the Company and receive financial remuneration for their services.
CANCER SCIENTIFIC ADVISORY BOARD
<TABLE>
<CAPTION>
NAME POSITION/AFFILIATION
- --------------------------------------------- ---------------------------------------------
<S> <C>
Alan N. Houghton, M.D. (Chairman)............ Chairman, Immunology Program, Sloan-Kettering
and Professor, Cornell University Medical
College ("CUMC")
Angus G. Dalgleish, M.D., Ph.D............... Chairman and Professor of Medical Oncology,
St. George's Hospital, London
David W. Golde, M.D.......................... Physician-in-Chief, Sloan-Kettering and
Professor, CUMC
David R. Klatzmann, M.D., Ph.D............... Professor of Immunology, Pitie-Salpetriere
Hospital, Paris
Philip O. Livingston, M.D.................... Associate Member, Sloan-Kettering and
Associate Professor, CUMC
John Mendelsohn, M.D......................... President, The University of Texas M.D.
Anderson Cancer Center
David A. Scheinberg, M.D., Ph.D.............. Chief, Leukemia Service, Sloan-Kettering and
Associate Professor, CUMC
</TABLE>
VIROLOGY SCIENTIFIC ADVISORY BOARD
<TABLE>
<CAPTION>
NAME POSITION/AFFILIATION
- --------------------------------------------- ---------------------------------------------
<S> <C>
Stephen P. Goff, Ph.D. (Chairman)............ Professor of Biochemistry, Columbia
University
Mark Alizon, M.D., Ph.D...................... Director of Research, Institut Cochin, Paris
Lawrence A. Chasin, Ph.D..................... Professor of Biological Sciences, Columbia
University
Leonard Chess, M.D........................... Professor of Medicine, Columbia University
Wayne A. Hendrickson, Ph.D................... Professor of Biochemistry, Columbia
University
Israel Lowy, M.D., Ph.D...................... Assistant Professor of Medicine, Mount Sinai
Medical Center
J. Steven McDougal, M.D...................... Chief, Immunology Branch, CDC, Atlanta
Luc Montagnier, M.D.......................... Professor and Chairman of Virology, Pasteur
Institute, Paris
Sherie L. Morrison, Ph.D..................... Professor of Microbiology, UCLA
Robin A. Weiss, Ph.D......................... Professor and Director of Research, ICR,
Royal Cancer Hospital, London
</TABLE>
44
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MANAGEMENT
DIRECTORS, EXECUTIVE OFFICERS AND KEY MANAGEMENT
The directors, executive officers and key management of the Company are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------------------------------- --- -----------------------------------------------------
<S> <C> <C>
Paul J. Maddon, M.D., Ph.D........................... 37 Chairman of the Board, Chief Executive Officer,
President and Chief Science Officer
Robert J. Israel, M.D................................ 39 Vice President, Medical Affairs
Robert A. McKinney................................... 40 Vice President, Finance and Operations and Treasurer
Joel D. Sendek....................................... 29 Senior Director, Corporate Development and Investor
Relations
Graham P. Allaway, Ph.D.............................. 41 Associate Scientific Director and Head, Therapeutic
Development Group
Patricia C. Fazio.................................... 37 Director, Health & Safety and Project Management
Charles A. Baker (1)................................. 63 Director
Mark F. Dalton (1)................................... 46 Director
Stephen P. Goff, Ph.D. (2)........................... 44 Director
Elizabeth M. Greetham (2)............................ 47 Director
Paul F. Jacobson (1)................................. 42 Director
David A. Scheinberg, M.D., Ph.D. (2)................. 40 Director
</TABLE>
- ------------------------------
(1) Member of Compensation Committee
(2) Member of Audit Committee
PAUL J. MADDON, M.D., PH.D. is the founder of the Company and has served in
various capacities since its inception, including Chairman of the Board of
Directors, Chief Executive Officer, President and Chief Science Officer. From
1981 to 1988, Dr. Maddon performed research at the Howard Hughes Medical
Institute at Columbia University in the laboratory of Dr. Richard Axel. He
received a B.A. in biochemistry and mathematics and an M.D. and a Ph.D. in
biochemistry and molecular biophysics from Columbia University. Dr. Maddon has
been an Adjunct Assistant Professor of Medicine at Columbia University since
1989.
ROBERT J. ISRAEL, M.D. joined the Company in October 1994 and has been Vice
President, Medical Affairs since that time. From 1991 to 1994, Dr. Israel was
Director, Clinical Research-Oncology and Immunohematology at Sandoz
Pharmaceuticals Corporation, a pharmaceutical company. From 1988 to 1991, he was
Associate Director, Oncology Clinical Research at Schering-Plough Corporation, a
pharmaceutical company. Dr. Israel is a licensed physician and is board
certified in both internal medicine and medical oncology. He received a B.A. in
physics from Rutgers University and an M.D. from the University of Pennsylvania
and completed an oncology fellowship at Sloan-Kettering. Dr. Israel has been a
consultant to the Solid Tumor Service at Sloan-Kettering since 1987.
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<PAGE>
ROBERT A. MCKINNEY joined the Company in September 1992. Mr. McKinney served
as Director, Finance and Operations and Treasurer from 1992 to January 1993,
when he was appointed Vice President, Finance and Operations and Treasurer of
Progenics. From 1991 to 1992, he was Corporate Controller at VIMRx
Pharmaceuticals, Inc., a biotechnology research company. From 1990 to 1991, Mr.
McKinney was Manager, General Accounting at Micrognosis, Inc., a software
integration company. From 1985 to 1990, he was an audit supervisor at Coopers &
Lybrand L.L.P., an international accounting firm. Mr. McKinney studied finance
at the University of Michigan, received a B.B.A. in accounting from Western
Connecticut State University, and is a Certified Public Accountant.
JOEL D. SENDEK joined the Company in July 1992. Mr. Sendek has served in
various management positions at Progenics, most recently as Senior Director,
Corporate Development and Investor Relations. From 1989 to 1992, he was an
investment banker in the health care group of the Corporate Finance Department
at Goldman, Sachs & Co., an international investment bank. Mr. Sendek received a
B.A. in biochemistry from Rice University.
GRAHAM P. ALLAWAY, PH.D. joined the Company in July 1990. Dr. Allaway has
served in various management positions at Progenics, most recently as Associate
Scientific Director and Head, Therapeutic Development Group. From 1984 to 1990,
he was a Visiting Fellow and Visiting Associate at the NIH in the laboratory of
Dr. Abner Notkins. From 1982 to 1984, Dr. Allaway performed post-doctoral
research at Memorial University of Newfoundland, Canada. He received an M.A. in
zoology from Oxford University and a Ph.D. in virology from the University of
London. Dr. Allaway has been an Adjunct Associate Professor of Microbiology and
Immunology at New York Medical College since 1996.
PATRICIA C. FAZIO joined the Company in August 1992. Ms. Fazio has served in
various management positions at Progenics, most recently as Director, Health &
Safety and Project Management. From 1987 to 1992, she was Senior Research
Technician and Laboratory Manager at the Howard Hughes Medical Institute at
Columbia University. From 1982 to 1987, Ms. Fazio was Chief Laboratory
Technologist in the Department of Pathology at Columbia Presbyterian Medical
Center. She received a B.A. in biology and chemistry at the College of New
Rochelle.
CHARLES A. BAKER has been a Director of the Company since January 1994. Mr.
Baker has been the Chairman, President and Chief Executive Officer of The
Liposome Company, Inc., a biotechnology company located in Princeton, NJ, since
1989. Mr. Baker is currently a director of Regeneron Pharmaceuticals, Inc., a
biotechnology company. He serves on the Scientific Advisory Council of Rutgers
University and is a member of the Council of Visitors of the Marine Biological
Laboratory at Woods Hole, MA. Mr. Baker has more than 30 years of pharmaceutical
industry experience, and has held senior management positions at Pfizer, Abbott
Laboratories, Squibb Corporation, and A.L. Laboratories. Mr. Baker received a
B.A. from Swarthmore College and a J.D. from Columbia University.
MARK F. DALTON has been a Director of the Company since July 1990. Mr.
Dalton has been the President, Chief Operating Officer and a director of Tudor
Investment Corporation, an investment advisory company, and its affiliates since
1988. From 1979 to 1988, he served in various senior management positions at
Kidder, Peabody & Co. Incorporated, including Chief Financial Officer. Mr.
Dalton is currently a director of several private and public companies in the
U.S., Europe and Asia. Mr. Dalton received a B.A. from Denison University and a
J.D. from Vanderbilt University.
STEPHEN P. GOFF, PH.D. has been a Director of the Company since February
1993. Dr. Goff has been a member of the Virology Scientific Advisory Board since
1988 and has been its Chairman since April 1991. Dr. Goff has been the Higgins
Professor in the Departments of Biochemistry and Microbiology at Columbia
University since June 1990. He received an A.B. in biophysics from Amherst
College and a Ph.D. in biochemistry from Stanford University. Dr. Goff performed
post-doctoral research at the Massachusetts Institute of Technology in the
laboratory of Dr. David Baltimore.
46
<PAGE>
ELIZABETH M. GREETHAM has been a Director of the Company since January 1994.
Ms. Greetham has been the Portfolio Manager for Weiss, Peck & Greer ("WPG") Life
Sciences Fund, L.P. and WPG Institutional Life Sciences Fund, L.P. since 1992
and was a Health Care Analyst at WPG, L.L.C. from 1990 to 1992. Ms. Greetham is
also a director of Repligen Corporation and Guilford Pharmaceuticals, both of
which are biopharmaceutical companies, and ChiRex Inc. and Access
Pharmaceuticals, Inc., both of which are pharmaceutical companies. She received
an M.A. in Economics from Edinburgh University.
PAUL F. JACOBSON has been a Director of the Company since July 1990. Mr.
Jacobson has been a Managing Director of fixed income securities at Deutsche
Bank since January 1996. He was President of Jacobson Capital Partners from 1993
to 1996. From 1986 to 1993, Mr. Jacobson was a partner at Goldman, Sachs, where
he was responsible for government securities trading activities. Mr. Jacobson
received a B.A. from Vanderbilt University and an M.B.A. from Washington
University.
DAVID A. SCHEINBERG, M.D., PH.D. has been a Director of the Company since
May 1996 and a member of the Cancer Scientific Advisory Board since January
1994. Dr. Scheinberg has been associated with Sloan-Kettering since 1986, where
he has held the positions of Associate Professor (since 1994) and Chief (since
1992), Leukemia Service, Member of the Clinical Immunology Service (since 1987)
and Head, Laboratory of Hematopoietic Cancer Immunochemistry, Sloan-Kettering
Institute (since 1989). He also has held the position of Associate Professor of
Medicine and Molecular Pharmacology, Cornell University Medical College (since
1994). He received a B.A. from Cornell University, and an M.D. and a Ph.D. in
pharmacology and experimental therapeutics from The Johns Hopkins University.
All directors hold office until the next annual meeting of stockholders and
until their successors have been elected and qualified. Officers are appointed
to serve, subject to the discretion of the Board of Directors, until their
successors are appointed. There are no family relationships among any of the
executive officers or directors of the Company.
COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors has a Compensation Committee, which makes
recommendations concerning salaries and incentive compensation for employees of
and consultants to the Company, establishes and approves salaries and incentive
compensation for certain senior officers and employees and administers and
grants stock options pursuant to the Company's stock option plans, and an Audit
Committee, which reviews the annual financial statements of the Company prior to
their submission to the Board of Directors, consults with the Company's
independent auditors, and examines and considers such other matters in relation
to the internal and external audit of the Company's account and in relation to
the financial affairs of the Company and its accounts, including the selection
and retention of independent auditors.
COMPENSATION OF DIRECTORS
Directors do not receive compensation in their capacities as directors. All
of the directors are reimbursed for their expenses in connection with their
attendance at Board and committee meetings. In addition, Dr. Goff and Dr.
Scheinberg receive annual compensation in the amounts of $30,000 and $18,000,
respectively, for their services as members of the Company's Virology Scientific
Advisory Board and Cancer Scientific Advisory Board, respectively. See "Certain
Transactions."
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
No interlocking relationship exists between the Company's Board of Directors
or Compensation Committee and the board of directors or compensation committee
of any other company, nor has any such interlocking relationship existed in the
past. The members of the Compensation Committee are Charles A. Baker, Mark F.
Dalton and Paul F. Jacobson.
47
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION
The following table sets forth certain information regarding compensation
paid and accrued during fiscal 1995 to the Company's Chief Executive Officer and
the other Executive Officers of the Company whose base compensation for fiscal
1996 equals or exceeds $100,000 (collectively, the "Named Executive Officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
--------------------------------------------------
<S> <C> <C> <C> <C>
OTHER
ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION
- ---------------------------------------------------------- --------- ---------- ------------ -------------
Paul J. Maddon, M.D., Ph.D................................ 1996 $ 165,000 (1) (1)
Chairman of the Board, Chief Executive Officer, 1995 150,000 $ 20,000(2) $ 1,662(3)
President and Chief Science Officer
Robert J. Israel, M.D..................................... 1996 175,000 (1) (1)
Vice President, Medical Affairs 1995 165,000 17,500 --
Robert A. McKinney........................................ 1996 1995 100,000 (1) (1)
Vice President, Finance and Operations and Treasurer 80,641 7,000 --
</TABLE>
- ------------------------
(1) Bonuses and other annual compensation for fiscal 1996 have not yet been
determined.
(2) In addition, Dr. Maddon was awarded a bonus of $35,000, the payment of which
is contingent upon the Company's achievement of certain milestones.
(3) Represents the premium paid by the Company on a long-term disability policy.
OPTION GRANTS
The Company did not grant any options during fiscal 1995 to any of the Named
Executive Officers.
OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES
The following table sets forth certain information concerning the number and
value of unexercised options held by each of the Named Executive Officers on
December 31, 1995. No options were exercised by these individuals in fiscal
1995.
FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING OPTIONS AT IN-THE-MONEY OPTIONS AT
FISCAL YEAR-END FISCAL YEAR-END(1)
-------------------------- --------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---------------------------------------------------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Paul J. Maddon, M.D., Ph.D.(2)............................ 225,000 525,000 $ 274,398 $ 685,432
Robert J. Israel, M.D.(3)................................. 11,250 45,000 15,075 60,300
Robert A. McKinney(3)..................................... 28,500 24,000 75,540 57,060
</TABLE>
- ------------------------------
(1) The value of the unexercised, in-the-money options on December 31, 1995 is
based on the difference between the fair market value per share of the
Common Stock at such date as determined by the Board of Directors ($6.67),
and the per share option exercise price, multiplied by the number of shares
of Common Stock underlying the options.
(2) The exercisability of 150,000 of these options will be accelerated upon the
effectiveness of this offering (assuming an initial public offering price of
$12.00 per share) and the exercisibility of all of these options shall be
accelerated in the event of a change in control of the Company.
(3) On May 15, 1996, additional options to purchase 18,750 shares of Common
Stock were granted to Dr. Israel and additional options to purchase 15,000
shares of Common Stock were granted to Mr. McKinney. These options have an
exercise price of $6.67 per share and are not reflected in the above table.
48
<PAGE>
EMPLOYMENT AGREEMENTS
Pursuant to the terms of the Employment Agreement (the "Employment
Agreement") dated December 15, 1993 between the Company and Dr. Maddon, the
Company has retained Dr. Maddon as Chairman of the Board, President, Chief
Executive Officer and Chief Science Officer of the Company at an annual salary
of $150,000. The Employment Agreement expires on December 15, 1998 but is
automatically renewed annually thereafter for up to five successive one-year
periods, unless either the Company or Dr. Maddon gives notice to the other party
of its or his intention not to renew at least 90 days before the end of the
initial term or any renewal term. Under the Employment Agreement, each year
following the closing of this offering, Dr. Maddon's salary then in effect shall
be increased at the rate of 10% per year, although the Board of Directors has
authority to grant additional compensation increases. In addition, Dr. Maddon
will be paid a bonus of not less than $15,000 per year. If Dr. Maddon's
employment is terminated without "cause" (as defined in the Employment
Agreement), he will be entitled to receive his annual salary for a period of two
years (but in no event after December 14, 1998) and any of the 750,000 options
granted to him under the 1993 Executive Stock Option Plan that have not
previously vested will vest. Dr. Maddon is also bound by certain non-competition
obligations.
Pursuant to the terms of a letter dated August 25, 1994 between the Company
and Robert J. Israel, M.D., the Company has retained Dr. Israel as Vice
President of Medical Affairs of the Company at an annual salary of $165,000 per
year. In addition, the Company paid Dr. Israel a $10,000 bonus upon his hire.
Under the Letter Agreement, Dr. Israel is entitled to nine months salary if his
employment is terminated without cause.
STOCK OPTION PLANS
The Company has historically maintained stock option plans as an integral
component of its compensation program for key employees, directors and
consultants. The Company believes that such plans provide long-term incentives
to such persons and encourage the ownership of the Company's Common Stock. In
May 1996, the Company adopted the 1996 Stock Incentive Plan (the "1996 Plan"),
which provides for the grant of stock options as well as other types of stock
and incentive awards. Outstanding stock options that were granted under the
Company's previous stock incentive plans will remain subject to the terms and
conditions of the plan pursuant to which they were originally granted. Stock
options and other awards granted following the offering will be pursuant to the
1996 Plan.
1989 NON-QUALIFIED STOCK OPTION PLAN
The Company's 1989 Non-Qualified Stock Option Plan (the "1989 Option Plan")
was adopted by the Company in April 1989. The 1989 Option Plan provided for the
grant of stock options to employees, consultants, directors of the Company and
other individuals who render services to the Company. Under the 1989 Option
Plan, the Company could grant options not intended to qualify as incentive stock
options within the meaning of Section 422A of the Internal Revenue Code of 1986,
as amended (the "Code"). A total of 375,000 shares of Common Stock were
originally authorized for issuance under the 1989 Option Plan. As of August 31,
1996 options to purchase 354,011 shares of Common Stock were outstanding under
the 1989 Option Plan and none of these options had been exercised.
Payment of the option exercise price may be made in cash, shares of Common
Stock, a combination of cash or stock or by any other method. Options are not
assignable or transferable except by will or under the laws of descent and
distribution. For a period of ten years following the termination for any reason
of an optionee's employment or active involvement with the Company, as
determined by the Board of Directors, the Company has the right to repurchase
from the optionee any or all shares of Common Stock held by the optionee and/or
any or all of the vested but unexercised portion of any option granted under the
1989 Option Plan at a purchase price defined therein.
49
<PAGE>
The 1989 Option Plan terminated on April 1, 1994. However any options
granted prior to such termination shall continue in effect until such option is
exercised or expires in accordance with its terms and the terms of the 1989
Option Plan.
1993 STOCK OPTION PLAN
The Company's 1993 Stock Option Plan (the "1993 Option Plan") was adopted by
the Company in December 1993. The 1993 Option Plan provided for the grant of
stock options to key employees (including officers who may be members of the
Company's Board of Directors), directors who are not employees and other
individuals who render services of a special importance to the management,
operation or development of the Company. Under the 1993 Option Plan, the Company
could grant options intended to qualify as incentive stock options within the
meaning of Section 422 of the Code and options not intended to qualify as
incentive stock options. A total of 750,000 shares of Common Stock were
originally authorized for issuance under the 1993 Option Plan. As of August 31,
1996, options to purchase a total of 688,725 shares of Common Stock were
outstanding under the 1993 Option Plan and none of these options had been
exercised. The remaining 61,275 shares of Common Stock available for grant under
the 1993 Stock Option Plan (which includes certain options whose term expired
after August 31, 1996 and which became available for regrant under the 1993
Stock Option Plan) will be granted to employees of the Company, prior to the
completion of this offering, at an option price equal to the initial public
offering price in this offering.
Payment of the option exercise price may be made in cash, shares of Common
Stock, a combination of cash or stock or by any other method. Options are not
assignable or transferable except by will or under the laws of descent and
distribution and, in the case of nonqualified options, to a designated
transferee, subject to approval by the Compensation Committee. For a period of
ten years following the termination for any reason of an optionee's employment
or active involvement with the Company, as determined by the Board of Directors,
the Company shall have the right to repurchase from the optionee any or all
shares of Common Stock acquired under the 1993 Option Plan and held by the
optionee and/or any or all of the vested but unexercised portion of any option
granted under the 1993 Option Plan at a purchase price defined therein. In
addition, the Company has certain rights of first refusal with respect to
transfers of optionees' vested and unvested stock except in the case of a
registered public offering.
Following this offering, no further shares will be available for grant under
the 1993 Option Plan and the Company does not anticipate that there will be any
further grants of options under the 1993 Option Plan. However, any option
outstanding under the 1993 Option Plan shall remain outstanding until such
option is exercised or expires in accordance with its terms and the terms of the
1993 Option Plan.
1993 EXECUTIVE STOCK OPTION PLAN
The Company's 1993 Executive Stock Option Plan (the "1993 Executive Option
Plan") was adopted by the Company in December 1993. The 1993 Executive Option
Plan provided for the grant of stock options to senior executive employees
(including officers who may be members of the Company's Board of Directors).
Under the 1993 Executive Option Plan, the Company may grant incentive stock
options or nonqualified options. A total of 750,000 shares of Common Stock were
originally authorized for issuance upon the exercise of options granted under
the 1993 Executive Option Plan. As of August 31, 1996, options to purchase a
total of 750,000 shares of Common Stock were outstanding under the 1993
Executive Option Plan and none of these options had been exercised.
Payment of the option exercise price may be made in cash, shares of Common
Stock, a combination of cash or stock or by any other method. Options are not
assignable or transferable except by will or under the laws of descent and
distribution.
50
<PAGE>
No further shares are available for grant under the 1993 Executive Option
Plan and the Company does not anticipate that there will be any further grants
of options under the 1993 Executive Option Plan. However, any option outstanding
under the 1993 Executive Option Plan shall remain outstanding until such option
is exercised or expires in accordance with its terms and the terms of the 1993
Executive Option Plan.
1996 STOCK INCENTIVE PLAN
The 1996 Plan was adopted by the Company in May 1996. The 1996 Plan permits
the Compensation Committee of the Board of Directors to make awards to
employees, advisors and consultants of the Company and its subsidiaries. The
1996 Plan provides for grant of stock options, including both incentive stock
options and nonqualified options, as well as stock appreciation rights,
restricted stock, performance shares and phantom stock, as described below. All
awards under the 1996 Plan are nontransferable by the participant, except upon
the participant's death in accordance with his will or applicable law. To date
no awards of options have been made under the 1996 Plan.
STOCK OPTIONS. The 1996 Plan authorizes the grant of nonqualified stock
options to employees, consultants and advisors of the Company and its
subsidiaries. Incentive stock options may only be granted to employees of the
Company and its subsidiaries. The exercise price of a nonqualified stock option
may be determined by the Compensation Committee in its discretion. The exercise
price of an incentive stock option may not be less than the fair market value of
the Common Stock on the date of grant (110% of the fair market value in the case
of an incentive stock option granted to a stockholder owning in excess of 10% of
the Common Stock). The value of Common Stock (determined at the time of grant)
that may be subject to incentive stock options that become exercisable by any
one employee in any one year is limited by the Code to $100,000. The maximum
term of stock options granted under the 1996 Plan is 10 years from the date of
grant. The Compensation Committee shall determine the extent to which an option
shall become and/or remain exercisable in the event of the termination of
employment or service of a participant under certain circumstances, including
retirement, death or disability, subject to certain limitations for incentive
stock options. Under the 1996 Plan, the exercise price of an option is payable
by the participant in cash or, in the discretion of the Compensation Committee,
in Common Stock or a combination of cash and Common Stock.
STOCK APPRECIATION RIGHTS. A stock appreciation right may be granted in
connection with an option, either at the time of grant or at any time thereafter
during the term of the option. A stock appreciation right granted in connection
with an option entitles the holder, upon exercise, to surrender the related
option and receive a payment based on the difference between the exercise price
of the related option and the fair market value of the Company's Common Stock on
the date of exercise. A stock appreciation right granted in connection with an
option is exercisable only at such time or times as the related option is
exercisable and expires no later than the time when the related option expires.
A stock appreciation right also may be granted without relationship to an option
and will be exercisable as determined by the Compensation Committee, but in no
event after ten years from the date of grant. A stock appreciation right granted
without relationship to an option entitles the holder, upon exercise, to a
payment based on the difference between the base price assigned to the stock
appreciation right by the Compensation Committee on the date of grant and the
fair market value of the Company's Common Stock on the date of exercise. Payment
to the holder in connection with the exercise of a stock appreciation right may
be in cash or shares of Common Stock or in a combination of cash and shares.
RESTRICTED STOCK AWARDS. The Committee may award shares of Common Stock to
participants under the 1996 Plan, subject to such restrictions on transfer and
conditions of forfeiture as it deems appropriate. Such conditions may include
requirements as to the continued service of the participant with the Company,
the attainment of specified performance goals or any other conditions determined
by the Compensation Committee. Subject to the transfer restrictions and
forfeiture restrictions relating to the restricted stock
51
<PAGE>
award, the participant will otherwise have the rights of a stockholder of the
Company, including all voting and dividend rights, during the period of
restriction.
PERFORMANCE AWARDS. The Compensation Committee may grant performance awards
denominated in specified dollar units ("Performance Units") or in shares of
Common Stock ("Performance Shares"). Performance awards are payable upon the
achievement of performance goals established by the Compensation Committee at
the beginning of the performance period, which may not exceed ten years from the
date of grant. At the time of grant, the Compensation Committee establishes the
number of units or shares, the duration of the performance period, the
applicable performance goals and, in the case of performance units, the
potential payment or range of payments for the performance awards. At the end of
the performance period, the Compensation Committee determines the payment to be
made based on the extent to which the performance goals have been achieved. The
Compensation Committee may consider significant unforeseen events during the
performance period when making the final award. Payments may be made in cash or
shares of Common Stock or in a combination of cash and shares.
PHANTOM STOCK. An award of phantom stock gives the participant the right to
receive cash at the end of a fixed vesting period based on the value of a share
of Common Stock at that time. Phantom stock units are subject to such
restrictions and conditions to payment as the Compensation Committee determines
are appropriate. At the time of grant, the Compensation Committee determines, in
its sole discretion, the number of units and the vesting period of the units,
and it may also set a maximum value of a unit. If the participant remains
employed by the Company throughout the applicable vesting period, he is entitled
to receive payment of a cash amount for each phantom stock unit equal in value
to the fair market value of one share of Common Stock on the last day of the
vesting period, subject to any maximum value limitation.
ADMINISTRATION. The 1996 Plan shall be administered by the Compensation
Committee of the Board of Directors, or such other committee as may be appointed
by the Board. Subject to the limitations set forth in the 1996 Plan, the
Compensation Committee has the authority to determine the persons to whom awards
will be granted, the time at which awards will be granted, the number of shares,
units or other rights subject to each award, the exercise, base or purchase
price of an award (if any), the time or times at which the award will become
vested, exercisable or payable and the duration of the award. The Compensation
Committee may provide for the acceleration of the vesting or exercise period of
an award at any time prior to its termination or upon the occurrence of
specified events. With the consent of the affected participant, the Compensation
Committee has the authority to cancel and replace awards previously granted with
new options for the same or a different number of shares and having a higher or
lower exercise or base price, and may amend the terms of any outstanding awards
to provide for an exercise or base price that is higher or lower than the
current exercise or base price.
RESERVATION OF SHARES. The Company has authorized and reserved 750,000
shares of Common Stock for issuance under the 1996 Plan. The shares may be
unissued shares or treasury shares. If any shares of Common Stock that are the
subject of an award are not issued or transferred and cease to be issuable or
transferable for any reason, such shares will no longer be charged against such
maximum share limitation and may again be made subject to awards under the 1996
Plan. In the event of certain corporate reorganizations, recapitalizations, or
other specified corporate transactions affecting the Company or the Common
Stock, proportionate adjustments may be made to the number of shares available
for grant and to the number of shares and prices under outstanding awards made
before the event.
TERM AND AMENDMENT. The 1996 Plan has a term of 10 years, subject to
earlier termination or amendment by the Board of Directors. All awards granted
under the 1996 Plan prior to its termination remain outstanding until exercised,
paid or terminated in accordance with their terms. The Board of Directors may
amend the 1996 Plan at any time, except that shareholder approval is required
for certain amendments to the extent necessary for purposes of Rule 16b-3 under
the Exchange Act.
52
<PAGE>
401(K) SAVINGS AND RETIREMENT PLAN
In 1993 the Company adopted the provisions of the amended and restated
Progenics 401(k) Plan (the "401(k) Plan"), a tax-qualified plan covering all
eligible employees, as defined therein. Each eligible employee may elect to
reduce his or her current compensation by 15%, subject to the statutory limit (a
maximum of $9,500 in 1996) and have the amount of the reduction contributed to
the 401(k) Plan. The Company has agreed to match 25% of up to the first 8% of
compensation that eligible employees contribute to the 401(k) Plan. In addition,
the Company may also make a discretionary contribution, as defined in the 401(k)
Plan, each year on behalf of all participants who are non-highly compensated
employees, as defined therein. The Company made matching contributions in an
aggregate amount of approximately $12,000 to eligible employees under the 401(k)
Plan in 1995. No matching contributions were made in 1995 to any of the Named
Executive Officers.
53
<PAGE>
CERTAIN TRANSACTIONS
During 1995, the Company borrowed an aggregate of $1,200,000 from certain
affiliates of Tudor Investment Corporation, a shareholder of the Company. The
loans provided for the accrual of interest at the rate of 10% per annum, with
interest and principal payable on demand. In December 1995, the principal amount
of the Note plus accrued interest of approximately $24,000 were exchanged for
approximately 61,000 Series C Units. See "Principal Stockholders" and
"Description of Capital Stock."
Since January 1, 1993, the Company has sold securities in the following
transactions with the following directors, officers, and stockholders who
beneficially own more than 5% of the outstanding Common Stock of the Company
("5% Stockholders"), and affiliates of such directors, officers and 5%
Stockholders.
<TABLE>
<CAPTION>
SERIES B
PREFERRED STOCK
ISSUED UPON
SERIES B EXERCISE OF SERIES C TOTAL
NAME UNITS(1) WARRANTS(2) UNITS(3) CONSIDERATION
- ------------------------------------------------------- ---------- ----------------- ---------- -------------
<S> <C> <C> <C> <C>
Entities affiliated with Tudor Investment Company(4)... 758,750 375,000 180,000 $ 8,510,000
Entities affiliated with Weiss, Peck & Greer Life
Sciences Fund, L.P.(4)................................ 125,000 125,000 20,000 1,525,000
Paul F. Jacobson....................................... 12,500 12,500 5,000 212,500
David A. Scheinberg, M.D., Ph.D........................ -- -- 1,250 25,000
-------------
Total.................................................. $ 10,272,500
-------------
-------------
</TABLE>
- ------------------------------
(1) Each Series B Unit consisted of one share of Series B Preferred Stock and
one warrant to purchase one share of Series B Preferred Stock ("Series B
Warrant"). The purchase price per unit was $4.00.
(2) Shares issued upon exercise of Series B Warrants for an exercise price of
$5.00 per share.
(3) Each Series C Unit consists of four shares of Series C Preferred Stock and
one warrant to purchase one share of Series C Preferred Stock ("Series C
Warrant"). The purchase price per unit was $20.00. The Series C Warrants
remain outstanding.
(4) See "Principal Stockholders."
Various directors, officers, 5% Stockholders of the Company and affiliates
of such persons are entitled to certain registration rights with respect to
their securities of the Company. See "Shares Eligible for Future Sale."
The Company believes that the transactions described above were entered into
on terms no less favorable to the Company than could be obtained from third
parties on an arm's length basis.
54
<PAGE>
PRINCIPAL STOCKHOLDERS
The following table sets forth the aggregate number of shares of Common
Stock beneficially owned as of June 30, 1996, assuming conversion of all shares
of the Company's Preferred Stock into an aggregate of 4,259,878 shares of Common
Stock upon the closing of this offering, by: (i) each person (or group of
affiliated persons) known by the Company to be a beneficial owner of more than
5% of the outstanding Common Stock of the Company; (ii) each director of the
Company; (iii) each of the Named Executive Officers; and (iv) all directors and
executive officers of the Company as a group.
<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES BENEFICIALLY
NUMBER OF SHARES OWNED(1)(2)(3)
BENEFICIALLY ------------------------
OWNED BEFORE AFTER
NAME AND ADDRESS OF BENEFICIAL OWNER (1)(2)(3) OFFERING OFFERING
- -------------------------------------------------------------------------- ----------------- ----------- -----------
<S> <C> <C> <C>
Entities affiliated with Tudor Investment Corporation(4)(5)
600 Steamboat Road
Greenwich, CT 06830..................................................... 2,314,314 34.6% 26.6%
Paul J. Maddon, M.D., Ph.D.(6)
c/o Progenics Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, NY 10591..................................................... 1,125,000 16.2% 12.6%
Paul Tudor Jones, II(4)(5)
600 Steamboat Road
Greenwich, CT 06830..................................................... 488,625 7.4% 5.7%
Charles A. Baker(7)....................................................... 33,750 * *
Mark F. Dalton(8)......................................................... 51,000 * *
Stephen P. Goff, Ph.D.(9)................................................. 56,250 * *
Elizabeth M. Greetham(10)................................................. 262,500 4.0% 3.1%
Paul F. Jacobson(11)...................................................... 189,039 2.9% 2.2%
David A. Scheinberg, M.D., Ph.D.(12)...................................... 47,545 * *
Robert J. Israel, M.D.(13)................................................ 11,250 * *
Robert A. McKinney(14).................................................... 28,500 * *
All directors and executive officers as a group (9 persons)(15)........... 1,804,834 25.4% 19.8%
</TABLE>
- ------------------------
* Less than 1%
(1) Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, each stockholder possesses sole voting
and investment power with respect to the shares of Common Stock listed.
(2) The number of shares of Common Stock beneficially owned includes the shares
issuable pursuant to stock options and warrants that may be exercised within
60 days after June 30, 1996. Shares issuable pursuant to such options and
warrants are deemed outstanding for computing the percentage of beneficial
ownership of the person holding such options and warrants but are not deemed
outstanding for computing the percentage of beneficial ownership of any
other person. The number of shares of Common Stock outstanding after this
offering includes the 2,000,000 shares of Common Stock being offered for
sale by the Company in this offering. Share amounts of the Company's
Preferred Stock convertible into Common Stock (all of which will be
converted to Common Stock upon the closing of this offering) are stated on
an as converted basis.
(3) Assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting."
(4) The number of shares owned by entities affiliated with Tudor Investment
Corporation ("TIC") consists of 1,704,501 shares held of record by Tudor BVI
Futures, Ltd., an international business company organized under the law of
the British Virgin Islands ("Tudor BVI"), 88,251 shares of Common Stock
issuable to Tudor BVI upon the exercise of currently exercisable warrants,
287,813 shares held of record by TIC, 164,499 shares held of record by Tudor
Arbitrage Partners L.P. ("TAP") and 41,125 shares of Common Stock issuable
to TAP upon the exercise of currently exercisable warrants, 22,500 shares of
record held by Tudor Proprietary Trading, L.L.C., a UK-based limited
liability corporation ("TPT"), and 5,625 shares of Common Stock issuable to
TPT upon the exercise of currently exercisable warrants. In addition,
because TIC provides investment advisory services to Tudor BVI, it may be
deemed to beneficially own the shares held by such entity. TIC disclaims
beneficial ownership of such shares.
55
<PAGE>
(5) The shares held by Mr. Jones consist of 461,625 shares held of record by Mr.
Jones and 27,000 shares subject to stock options held by Mr. Jones
exercisable within 60 days of the date of this table. In addition, Mr. Jones
is the Chairman and principal stockholder of TIC, the Chairman and indirect
principal equity owner of the general partner of TAP, and the Chairman and
indirect principal equity owner of TPT. Mr. Jones may be deemed to
beneficially own the shares beneficially owned, or deemed beneficially
owned, by such entities. Mr. Jones disclaims beneficial ownership of such
shares.
(6) Includes 225,000 shares subject to stock options held by Dr. Maddon
exercisable within 60 days of the date of this table and an additional
150,000 shares subject to stock options which will accelerate upon the
effectiveness of this offering (assuming an initial public offering price of
$12.00 per share).
(7) Includes 3,750 shares of Common Stock issuable to the Baker Family Limited
Partnership ("BFLP") upon the exercise of currently exercisable warrants,
15,000 shares owned by the BFLP, and 15,000 shares subject to stock options
held by Mr. Baker exercisable within 60 days of the date of this table.
(8) Includes 34,500 shares held of record directly by Mr. Dalton and 16,500
shares of record held by DF Partners, a family partnership of which Mr.
Dalton is the managing general partner with a 5% interest. The remaining 95%
interest is held by trusts for the benefit of Mr. Dalton's children. As to
such 95% interest, Mr. Dalton disclaims beneficial interest. See "Management
-- Directors, Executive Officers and Key Management."
(9) Includes 18,750 shares subject to stock options held by Dr. Goff exercisable
within 60 days of the date of this table.
(10) Consists of 131,250 shares held of record by Weiss, Peck & Greer ("WPG")
Life Sciences Fund, L.P. ("WPGLSF") and 9,375 shares of Common Stock
issuable to WPGLSF upon the exercise of currently exercisable warrants and
116,250 shares held of record by WPG Institutional Life Sciences Fund, L.P.
("WPGILSF") and 5,625 shares of Common Stock issuable to WPGILSF upon the
exercise of currently exercisable warrants. Ms. Greetham, who is the
Portfolio Manager for both WPGLSF and WPGILSF, disclaims beneficial
ownership of all such shares except to the extent of her beneficial interest
in WPGLSF.
(11) Includes 3,750 shares of Common Stock issuable to Mr. Jacobson upon the
exercise of currently exercisable warrants and 27,000 shares subject to
stock options held by Mr. Jacobson exercisable within 60 days of the date of
this table.
(12) Includes 938 shares of Common Stock issuable to Dr. Scheinberg upon the
exercise of currently exercisable warrants and 42,857 shares subject to
stock options held by Dr. Scheinberg exercisable within 60 days of the date
of this table.
(13) Consists of 11,250 shares subject to stock options held by Dr. Israel
exercisable within 60 days of the date of this table.
(14) Consists of 28,500 shares subject to stock options held by Mr. McKinney
exercisable within 60 days of the date of this table.
(15) Includes shares held by affiliated entities as set forth in the above
table, 368,357 shares subject to stock options held by all officers and
directors exercisable within 60 days of the date of this table, 150,000
shares subject to stock options held by an officer and director which will
accelerate upon the effectiveness of this offering (assuming an initial
public offering price of $12.00 per share) and 23,438 shares issuable upon
the exercise of currently exercisable warrants beneficially owned by certain
directors.
56
<PAGE>
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED STOCK; ISSUED AND OUTSTANDING SHARES
Upon the completion of this offering, the authorized capital stock of the
Company will consist of 40,000,000 shares of Common Stock, par value $.0013 per
share, and 20,000,000 shares of Preferred Stock, par value $.001 per share.
On October 2, 1996 the Board of Directors of the Company approved a
three-for-four reverse stock split of the Company's Common Stock, subject to the
approval of the Company's shareholders, which is expected to be received prior
to the completion of this offering. All information in this Prospectus has been
adjusted to reflect the reverse stock split.
As of August 31, 1996, 2,294,675 shares of Common Stock and 5,679,826 shares
of Preferred Stock were outstanding. Simultaneously with the closing of this
offering, all of the outstanding shares of Preferred Stock will automatically be
converted into an aggregate of 4,259,878 shares of Common Stock pursuant to
their terms.
COMMON STOCK
Assuming conversion of all outstanding Preferred Stock, at August 31, 1996
there were 6,554,553 shares of Common Stock outstanding held by approximately
130 stockholders of record. Holders of Common Stock are entitled to one vote for
each share held of record on any matters voted upon by stockholders and do not
have any cumulative voting rights. Subject to preferences that may be applicable
to any outstanding Preferred Stock, holders of Common Stock are entitled to
receive ratably such dividends as may be declared by the Board of Directors out
of funds legally available therefor. See "Dividend Policy." In the event of a
liquidation, dissolution or winding up of the Company, holders of Common Stock
are entitled to share ratably in all assets remaining after payment of
liabilities and the liquidation preferences of any outstanding Preferred Stock.
Holders of Common Stock have no preemptive rights and no right to convert their
Common Stock into any other securities. There are no redemption or sinking fund
provisions applicable to the Common Stock. All outstanding shares of Common
Stock are, and all shares of Common Stock to be outstanding upon completion of
this offering will be, validly issued, fully paid and nonassessable. All shares
of Common Stock issuable upon conversion of the Preferred Stock and upon
exercise of warrants will be, upon such conversion or exercise, validly issued,
fully paid and nonassessable. The rights, preferences and privileges of holders
of Common Stock are subject to, and may be adversely affected by, the rights of
the holders of shares of any series of Preferred Stock which the Company may
designate and issue in the future.
PREFERRED STOCK
Upon the closing of this offering, the conversion of the outstanding Series
A, Series B and Series C Preferred Stock and the filing of a Certificate of
Retirement as to those Series, the Company's Certificate of Incorporation will
authorize the issuance of up to 20,000,000 shares of Preferred Stock, $.001 par
value per share, and none of those shares will be outstanding or designated into
any series. Under the terms of the Certificate of Incorporation, the Board of
Directors is authorized, subject to any limitations prescribed by law, without
stockholder approval, to issue such shares of Preferred Stock in one or more
series. Each such series of Preferred Stock shall have such rights, preferences,
privileges and restrictions, including voting rights, dividend rights,
conversion rights, redemption privileges and liquidation preferences, as shall
be determined by the Board of Directors.
The purpose of authorizing the Board of Directors to issue Preferred Stock
and determine its rights and preferences is to eliminate delays associated with
a stockholder vote on specific issuances. The issuance of Preferred Stock, while
providing desirable flexibility in connection with possible acquisitions and
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire, or of discouraging a third party from acquiring, a
majority of the outstanding voting stock of the Company. The Company has no
present plans to issue any shares of Preferred Stock.
57
<PAGE>
WARRANTS
The Company has issued warrants (the "Warrants") to purchase 347,249 shares
of Series C Preferred Stock. Each Warrant entitles the holder to purchase one
share of Series C Preferred Stock at a purchase price of $5.00 per share
(subject to adjustment in certain circumstances) during the five-year period
commencing on the warrant issuance date (December 8, 1995 or February 23, 1996).
Following the closing of this offering, the Warrants will become exercisable for
260,455 shares of Common Stock at a purchase price of $6.67 per share of Common
Stock (subject to adjustment in certain circumstances). If at any time after the
date of this offering but before December 31, 1996 the Company issues: (i)
additional shares of Common Stock; (ii) securities that are convertible into or
exchangeable for shares of Common Stock; or (iii) warrants or other rights to
subscribe for shares of Common Stock (collectively, "Additional Shares"), at a
price lower than the current exercise price of the Warrant, then the exercise
price of the Warrant will be reduced to such lower price and the number of
shares subject to the Warrant shall be proportionally increased. After December
31, 1996, if the Company issues Additional Shares at a price per share that is
lower than the then current market price (as defined) per share of the Common
Stock, then the exercise price of the Warrant will be reduced to a price equal
to (a) the sum of (i) the total number of shares of the Company outstanding
immediately prior to the issuance of the Additional Shares multiplied by the
then current exercise price of the Warrant, plus (ii) the consideration received
by the Company for the Additional Shares, divided by (b) the total number of
shares of capital stock of the Company outstanding immediately after the
issuance of the Additional Shares. In such case the number of shares subject to
the Warrant shall be proportionally increased. In no event is any adjustment of
the exercise price of the Warrant or the number of shares subject to the Warrant
required upon the grant of stock options or other stock incentives to employees
of the Company or upon the exercise of such options or incentives.
DELAWARE LAW AND CERTAIN CHARTER AND BY-LAW PROVISIONS
The Company is subject to the provisions of Section 203 of the General
Corporation Law of Delaware. Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with an "interested
stockholder" for a period of three years after the date of the transaction in
which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner. A "business combination"
includes mergers, asset sales and other transactions resulting in a financial
benefit to the interested stockholder. Subject to certain exceptions, an
"interested stockholder" is a person who, together with affiliates and
associates, owns, or within three years did own, 15% or more of a corporation's
voting stock.
The Certificate of Incorporation contains certain provisions permitted under
the General Corporation Law of Delaware relating to the liability of directors.
The provisions eliminate a director's liability for monetary damages for a
breach of fiduciary duty, except in certain circumstances involving wrongful
acts, such as the breach of a director's duty of loyalty or acts or omissions
which involve intentional misconduct or a knowing violation of law. Further, the
Certificate of Incorporation contains provisions to indemnify the Company's
directors and officers to the fullest extent permitted by the General
Corporation Law of Delaware. The Company believes that these provisions will
assist the Company in attracting and retaining qualified individuals to serve as
directors.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock is American Stock
Transfer & Trust Company.
58
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, based upon the number of shares
outstanding at August 31, 1996, there will be 8,554,553 shares of Common Stock
of the Company outstanding (exclusive of 935,196 shares covered by vested
options and warrants outstanding at August 31, 1996 and including 4,259,878
shares of Common Stock to be issued upon the automatic conversion of the
outstanding shares of Preferred Stock upon consummation of this offering). Of
these outstanding shares (and without taking into account the lock-up agreements
described below), approximately 4,549,095 shares, including the 2,000,000 shares
of Common Stock sold in this offering, will be immediately eligible for resale
in the public market without restriction under the Securities Act, except that
any shares purchased in this offering by "affiliates" of the Company, as that
term is defined in Rule 144 under the Securities Act ("Affiliates"), may
generally only be resold in compliance with applicable provisions of Rule 144.
Beginning approximately 90 days after the date of this Prospectus (and without
taking into account the lock-up agreements described below), approximately
2,963,711 additional shares of Common Stock and approximately 1,027,986 shares
covered by options exercisable within the 90-day period following the date of
this Prospectus will become eligible for immediate resale in the public market,
subject to compliance as to certain of such shares with applicable provisions of
Rules 144 and 701.
The Company, the executive officers and directors of the Company, and
certain securityholders, which executive officers, directors and securityholders
in the aggregate hold approximately shares of Common Stock (including
shares of Common Stock that may be acquired pursuant to the exercise of
vested options or warrants held by them) at August 31, 1996, have agreed
pursuant to certain agreements that they will not, without the prior written
consent of Oppenheimer & Co., Inc., offer, sell or otherwise dispose of the
shares of Common Stock beneficially owned by them for a period of 180 days from
the date of this Prospectus. The shares subject to the lock-up agreements
include of the shares of Common Stock that would otherwise have become
immediately eligible for resale in the public market upon completion of this
offering and approximately of the shares of Common Stock and of the
shares covered by options exercisable within the 90-day period following the
date of this Prospectus that would otherwise have become eligible for resale in
the public market beginning approximately 90 days after the date of this
Prospectus, subject to compliance as to certain of such shares with the
applicable provisions of Rules 144 and 701.
In general, under Rule 144 as currently in effect, beginning approximately
90 days after the effective date of the Registration Statement of which this
Prospectus is a part, a stockholder, including an Affiliate, who has
beneficially owned his or her restricted securities (as that term is defined in
Rule 144) for at least two years from the later of the date such securities were
acquired from the Company or (if applicable) the date they were acquired from an
Affiliate is entitled to sell, within any three-month period, a number of such
shares that does not exceed the greater of 1% of the then outstanding shares of
Common Stock (approximately 85,546 shares immediately after this offering) or
the average weekly trading volume in the Common Stock during the four calendar
weeks preceding the date on which notice of such sale was filed under Rule 144,
provided certain requirements concerning availability of public information,
manner of sale and notice of sale are satisfied. In addition, under Rule 144(k),
if a period of at least three years has elapsed between the later of the date
restricted securities were acquired from the Company or (if applicable) the date
they were acquired from an Affiliate of the Company, a stockholder who is not an
Affiliate of the Company at the time of sale and has not been an Affiliate of
the Company for at least three months prior to the sale is entitled to sell the
shares immediately without compliance with the foregoing requirements under Rule
144. The Commission has proposed an amendment to Rule 144 which would reduce the
holding period required for shares subject to Rule 144 to become eligible for
sale in the public market from two years to one year, and from three years to
two years in the case of Rule 144(k).
Rule 701 under the Securities Act provides an exemption from the
registration requirements of the Securities Act for offers and sales of
securities issued pursuant to certain compensatory benefit plans, such as the
Company's stock option and stock incentive plans, of a company not subject to
the reporting
59
<PAGE>
requirements of Section 13 or 15(d) of the Exchange Act. Securities issued
pursuant to Rule 701 are defined as restricted securities for purposes of Rule
144. However, 90 days after the issuer becomes subject to the reporting
provisions of the Exchange Act, the Rule 144 resale restrictions, except for the
broker's transaction requirement, are inapplicable for non-affiliates.
Affiliates are subject to all Rule 144 restrictions after this 90-day period,
but without a holding period. In addition, the Company plans to file a Form S-8
registration statement registering shares of stock issuable pursuant to the
Company's stock option plans.
Commencing on the first anniversary of the date of this Prospectus, all of
the stockholders of the Company who purchased shares prior to this offering will
be entitled to certain rights with respect to the registration under the
Securities Act of a total of approximately 6,815,000 shares of Common Stock (the
"Registrable Shares"), including 260,455 shares of Common Stock that may be
acquired pursuant to the exercise of outstanding warrants, under the terms of
agreements with the Company (the "Registration Agreements"). The holders of 20%
of the Registrable Shares (the "Minimum Number of Holders") may trigger the
obligation of the Company to use its best efforts to effect no more than two
public offerings on Forms S-1 or S-2, provided that the offering price per share
is at least $6.67 and the aggregate offering price to the public is at least $5
million. In addition, the Minimum Number of Holders shall have the right to
demand an unlimited number of registrations on Form S-3, provided that the
aggregate proposed public offering price of the securities to be included in
such registration shall be at least $1 million. In addition, if the Company
files a registration statement with the Commission, stockholders may elect to
include therein their respective Registrable Shares. There is no limit with
respect to the number of times holders of Registrable Shares may exercise such
"piggyback" registration rights. In addition, pursuant to the Employment
Agreement between the Company and Dr. Maddon, the Company granted to Dr. Maddon
separate "piggyback" registration rights which may be exercised at any time with
respect to his shares of Common Stock or shares of Common Stock issuable upon
exercise of any options (as of August 31, 1996, Dr. Maddon held options to
purchase 750,000 shares of Common Stock, of which options to purchase 225,000
shares of Common Stock were exercisable on that date or within 60 days
thereafter). CBC also has been granted "piggyback" registration rights with
respect to the registration of shares of the Company's securities held by it,
which rights may be exercised at any time. The Company's obligation to register
shares pursuant to exercise of any of the foregoing "demand" or "piggyback"
registration rights is subject in any underwritten offering to the right of the
underwriters to exclude shares necessary to avoid interfering with the
successful marketing of the underwritten offering. The Company is generally
obligated to bear the expenses, other than underwriting discounts and
commissions, of all of these registrations.
Prior to this offering, there has been no public market for the Common
Stock. No precise prediction can be made as to the effect, if any, that market
sales of shares or the availability of shares for sale will have on the market
price of the Common Stock prevailing from time to time. The Company is unable to
estimate the number of shares that may be sold in the public market pursuant to
Rule 144, since this will depend on the market price of the Common Stock, the
personal circumstances of the sellers and other factors. Nevertheless, sales of
significant amounts of the Common Stock of the Company in the public market
could adversely affect the market price of the Company's Common Stock and could
impair the Company's ability to raise capital through an offering of its equity
securities.
60
<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the
Company has agreed to sell to each of the Underwriters named below, and each of
the Underwriters, for whom Oppenheimer & Co., Inc. and Vector Securities
International, Inc. are acting as Representatives, has severally agreed to
purchase from the Company, the respective number of shares of Common Stock set
forth opposite the name of each Underwriter below.
<TABLE>
<CAPTION>
NUMBER
NAME OF SHARES
- --------------------------------------------------------------------------------- ----------
<S> <C>
Oppenheimer & Co., Inc...........................................................
Vector Securities International, Inc.............................................
----------
Total...................................................................... 2,000,000
----------
----------
</TABLE>
The Underwriters propose to offer the shares of Common Stock directly to the
public at the initial public offering price set forth on the cover page of this
Prospectus and in part to certain securities dealers at such price less a
concession of $ per share. The Underwriters may allow, and such dealers
may reallow, a concession not in excess of $ per share to certain other
brokers and dealers. After the shares of Common Stock are released for sale to
the public, the offering price and other selling terms may, from time to time,
be varied by the Representatives. The Underwriters are obligated to take and pay
for all of the shares of Common Stock offered hereby (other than those covered
by the over-allotment option described below), if any are taken.
The Company has granted to the Underwriters an option, exercisable for up to
30 days after the date of this Prospectus, to purchase up to an aggregate of
300,000 additional shares of Common Stock to cover over-allotments, if any. If
the Underwriters exercise such option, the Underwriters have severally agreed,
subject to certain conditions, to purchase approximately the same percentage
thereof that the number of shares to be purchased by each of them bears to the
2,000,000 shares of Common Stock offered hereby. The Underwriters may exercise
such option only to cover over-allotments made in connection with the sale of
the shares of Common Stock offered hereby. The Representatives have advised the
Company that the Underwriters do not intend to confirm sales in excess of 5% of
the shares offered hereby to any account over which they exercise discretionary
authority.
The Company has agreed to indemnify the Representatives of the Underwriters
and the several Underwriters against certain liabilities, including, without
limitation, liabilities under the Securities Act.
The Company's officers and directors and certain stockholders who own an
aggregate of shares of Common Stock (including shares issuable upon
exercise of outstanding options and warrants) have agreed that they will not
directly or indirectly, sell, offer, contract to sell, make a short sale, pledge
or otherwise dispose of any shares of Common Stock (or any securities
convertible into or exchangeable or exercisable for any other rights to purchase
or acquire Common Stock other than shares of Common Stock issuable upon exercise
of outstanding options) owned by them, for a period of 180 days after the date
of this Prospectus, without the prior written consent of Oppenheimer & Co.,
Inc., subject to certain limited exceptions. The Company has also agreed not to
issue, sell or register with the Commission for its own account or otherwise
dispose of, directly or indirectly, any equity securities of the Company (or any
securities convertible into or exercisable or exchangeable for equity securities
of the Company) for a
61
<PAGE>
period of 180 days after the date of this Prospectus, without the prior written
consent of Oppenheimer & Co., Inc., subject to certain limited exceptions.
Prior to this offering, there has been no public market for the Common
Stock. The initial public offering price will be negotiated between the Company
and the Representatives. Among the factors to be considered in determining the
initial public offering price of the Common Stock, in addition to prevailing
market conditions, will be the Company's historical performance, capital
structure, estimates of the business potential and earnings prospects of the
Company, an assessment of the Company's management and consideration of the
above factors in relation to market values of companies in related businesses.
62
<PAGE>
LEGAL MATTERS
The validity of the Common Stock being offered hereby will be passed upon
for the Company by Dewey Ballantine, 1301 Avenue of the Americas, New York, New
York 10019, and for the Underwriters by Hale and Dorr, 60 State Street, Boston,
Massachusetts 02109.
EXPERTS
The balance sheets as of December 31, 1995 and 1994 and the statements of
operations, stockholders' equity (deficit) and cash flows for each of the three
years in the period ended December 31, 1995, and for the period from December 1,
1986 (inception) to December 31, 1995, included in this Prospectus, have been
included herein in reliance on the report of Coopers & Lybrand L.L.P.,
independent accountants, given on the authority of that firm as experts in
accounting and auditing.
ADDITIONAL INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-1 under the Securities Act with respect to the Common Stock offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and the schedules thereto. For further
information with respect to the Company and such Common Stock, reference is made
to the Registration Statement and exhibits and schedules thereto. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to are not necessarily complete, and, with respect to any
contract or other document filed as an exhibit to the Registration Statement,
each such statement is qualified in all respects by reference to such exhibit.
Copies of the Registration Statement and the exhibits thereto are on file at the
offices of the Commission and may be obtained upon payment of the prescribed fee
or may be examined without charge at the Commission's Public Reference Section,
Room 1024, 450 Fifth Street, N.W., Washington D.C. 20549, as well as at the
Commission's Regional Offices at Seven World Trade Center, New York, New York
10048, and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material can be obtained in person
from the Public Reference Section of the Commission at its principal office
located at 450 Fifth Avenue, N.W., Washington, D.C. 20549, upon payment of the
prescribed fees. In addition, the Company is required to file electronic
versions of these documents with the Commission through the Commission's
Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. The Commission
maintains a World Wide Web site at http://www.sec.gov that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission.
Upon completion of the offering, the Company will be subject to the
reporting requirements of the Exchange Act and in accordance therewith will file
annual and quarterly reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information may be
inspected, and copies of such material may be obtained upon payment of the
prescribed fees, at the Commission's Public Reference Section at the addresses
set forth above.
63
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Report of Independent Accountants.......................................................................... F-2
Financial Statements:
Balance Sheets as of December 31, 1994 and 1995 and as of June 30, 1996 (unaudited)...................... F-3
Statements of Operations for the years ended December 31, 1993, 1994 and 1995 and for
the period from December 1, 1986 (inception) to December 31, 1995 and for the six
months ended June 30, 1995 (unaudited) and 1996 (unaudited) and for the period from
December 1, 1986 (inception) to June 30, 1996 (unaudited).............................................. F-4
Statements of Stockholders' Equity (Deficit) for the period from December 1, 1986 (inception) to December
31, 1995, including the years ended December 31, 1993, 1994 and 1995, and for the six months ended June
30, 1996 (unaudited)................................................................................... F-5
Statements of Cash Flows for the years ended December 31, 1993, 1994 and 1995 and for
the period from December 1, 1986 (inception) to December 31, 1995 and for the six
months ended June 30, 1995 (unaudited) and 1996 (unaudited) and for the period from
December 1, 1986 (inception) to June 30, 1996 (unaudited).............................................. F-7
Notes to Financial Statements............................................................................ F-8
</TABLE>
F-1
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Stockholders of
Progenics Pharmaceuticals, Inc.:
We have audited the accompanying balance sheets of PROGENICS
PHARMACEUTICALS, INC. (the "Company") (a development stage enterprise) as of
December 31, 1995 and 1994, and the related statements of operations,
stockholders' equity (deficit) and cash flows for each of the three years in the
period ended December 31, 1995 and for the period from December 1, 1986
(inception) to December 31, 1995. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above, present fairly,
in all material respects, the financial position of the Company as of December
31, 1995 and 1994, and the results of its operations and its cash flows for each
of the three years in the period ended December 31, 1995, and for the period
from December 1, 1986 (inception) to December 31, 1995, in conformity with
generally accepted accounting principles.
COOPERS & LYBRAND L.L.P.
New York, New York
February 15, 1996, except for
Note 5 as to which the date is
October 2, 1996.
F-2
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------ JUNE 30,
1994 1995 1996
-------------- -------------- --------------
<S> <C> <C> <C>
(UNAUDITED)
ASSETS:
Current assets:
Cash and cash equivalents...................................... $ 2,275,236 $ 559,294 $ 3,069,836
Certificates of deposit........................................ 103,850 -- --
Grant revenue receivable....................................... -- 112,749 26,832
Other current assets........................................... 67,967 18,445 32,870
-------------- -------------- --------------
Total current assets....................................... 2,447,053 690,488 3,129,538
Fixed assets, at cost, net of accumulated depreciation and
amortization................................................... 959,136 966,118 950,015
Security deposits and other assets............................... 83,284 79,118 70,407
-------------- -------------- --------------
Total assets............................................... $ 3,489,473 $ 1,735,724 $ 4,149,960
-------------- -------------- --------------
-------------- -------------- --------------
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable and accrued expenses.......................... $ 209,341 $ 487,089 $ 280,633
Capital lease obligations, current portion..................... 218,494 184,344 157,634
-------------- -------------- --------------
Total current liabilities.................................. 427,835 671,433 438,267
Capital lease obligations........................................ 204,916 162,824 156,860
Deferred lease liability......................................... 29,782 49,740 36,106
-------------- -------------- --------------
Total liabilities.......................................... 662,533 883,997 631,233
-------------- -------------- --------------
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.001 par value; 20,000,000 shares authorized:
Series A Preferred Stock, convertible; 4,000,000 shares
designated; shares issued and outstanding--
2,308,000 in 1994, 1995 and 1996 (liquidation value,
$6,055,750)................................................ 2,308 2,308 2,308
Series B Preferred Stock, convertible; 2,500,000 shares
designated; shares issued and outstanding-- 1,982,830 in
1994, 1995 and 1996 (liquidation value, $8,650,630)........ 1,983 1,983 1,983
Series C Preferred Stock, convertible; 3,750,000 shares
designated; shares issued and outstanding--424,184 in 1995
and 1,388,996 in 1996 (liquidation value, $2,120,920 in
1995 and $6,944,980 in 1996)............................... -- 424 1,389
-------------- -------------- --------------
Total preferred stock...................................... 4,291 4,715 5,680
Common Stock, $.0013 par value; 40,000,000 shares authorized;
shares issued and outstanding--2,249,675 in 1994 and
2,294,675 in 1995 and 1996................................... 2,924 2,983 2,983
Additional paid-in capital..................................... 15,974,008 18,501,808 23,252,849
Deficit accumulated during the development stage............... (13,154,283) (17,657,779) (19,742,785)
-------------- -------------- --------------
Total stockholders' equity................................. 2,826,940 851,727 3,518,727
-------------- -------------- --------------
Total liabilities and stockholders' equity................. $ 3,489,473 $ 1,735,724 $ 4,149,960
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-3
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
DECEMBER 1, 1986 SIX MONTHS ENDED DECEMBER 1, 1986
YEARS ENDED DECEMBER 31, (INCEPTION) JUNE 30, (INCEPTION)
---------------------------------- THROUGH ------------------------ THROUGH
1993 1994 1995 DECEMBER 31, 1995 1995 1996 JUNE 30, 1996
---------- ---------- ---------- ----------------- ----------- ----------- ----------------
<S> <C> <C> <C> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED) (UNAUDITED)
Revenues:
Research grants........ $ 84,000 $ 503,518 $ 725,348 $ 1,467,546 $ 282,000 $ 187,968 $ 1,655,514
Product sales.......... 49,715 51,971 49,752 290,913 31,602 57,922 348,835
Interest income........ 53,500 108,036 46,378 541,419 40,873 59,485 600,904
---------- ---------- ---------- ----------------- ----------- ----------- ----------------
Total revenues..... 187,215 663,525 821,478 2,299,878 354,475 305,375 2,605,253
---------- ---------- ---------- ----------------- ----------- ----------- ----------------
Expenses:
Research and
development.......... 1,546,965 2,858,547 3,853,001 12,850,487 1,661,342 1,608,742 14,459,229
General and
administrative....... 747,425 877,906 1,093,821 5,272,811 547,148 601,109 5,873,920
Interest expense....... 38,071 50,399 87,279 401,153 35,711 28,530 429,683
Depreciation and
amortization......... 249,371 288,407 290,873 1,433,206 153,210 152,000 1,585,206
---------- ---------- ---------- ----------------- ----------- ----------- ----------------
Total expenses..... 2,581,832 4,075,259 5,324,974 19,957,657 2,397,411 2,390,381 22,348,038
---------- ---------- ---------- ----------------- ----------- ----------- ----------------
Net loss........... $(2,394,617) $(3,411,734) $(4,503,496) $ (17,657,779) ($2,042,936) ($2,085,006) $(19,742,785)
---------- ---------- ---------- ----------------- ----------- ----------- ----------------
---------- ---------- ---------- ----------------- ----------- ----------- ----------------
Pro forma net loss per
share data:
Pro forma net loss per
share (unaudited).... $(0.74) $(0.34 )
---------- -----------
---------- -----------
Pro forma weighted
average common shares
outstanding
(unaudited)............ 6,125,972 6,125,972
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-4
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE PERIOD FROM DECEMBER 1, 1986 (INCEPTION) TO DECEMBER 31, 1995,
INCLUDING THE YEARS ENDED DECEMBER 31, 1993, 1994 AND 1995
AND (UNAUDITED) FOR THE SIX MONTHS ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK ADDITIONAL
------------------------ ------------------------ PAID-IN
SHARES AMOUNT SHARES AMOUNT CAPITAL
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
Sale of Common Stock for cash ($.0013 per share)..... 4,875,000 $ 6,338 $ 162
Sale of Common Stock for cash ($.13 per share)....... 180,000 234 23,766
Net loss for the year ended November 30, 1987........
----------- ----------- -------------
Balance at November 30, 1987..................... 5,055,000 6,572 23,928
Sale of Common Stock during May 1988 to an
employee/stockholder for cash of $150 and services
at estimated value ($1.07 per share)............... 112,500 146 120,004
Sale of Common Stock for cash ($1.07 per share)...... 1,026,574 1,335 1,093,665
Conversion of note payable to stockholder............ 27,500
Purchase of treasury stock during June for cash of
$20,000 and issuance of a note payable ($.53 per
share)............................................. (75,000) (98) (39,902)
Sale of Common Stock during November in consideration
for services rendered at estimated value ($1.33 per
share)............................................. 2,476 3 3,297
Net loss for the year ended November 30, 1988........
----------- ----------- -------------
Balance at November 30, 1988..................... 6,121,550 7,958 1,228,492
Sale of Series A Preferred Stock units for cash
($2.50 per unit)................................... 1,037,000 $ 1,037 2,591,463
Net loss for the year ended November 30, 1989........
----------- ----------- ----------- ----------- -------------
Balance at November 30, 1989..................... 1,037,000 1,037 6,121,550 7,958 3,819,955
Purchase of treasury stock during February for cash
of $231,328 and issuance of a note payable (average
$.08 per share).................................... (3,825,000) (4,973) (297,884)
Sale of Series A Preferred Stock units for cash
($2.50 per unit)................................... 128,000 128 319,872
Net loss for the year ended November 30, 1990........
----------- ----------- ----------- ----------- -------------
Balance at November 30, 1990..................... 1,165,000 1,165 2,296,550 2,985 3,841,943
Purchase of treasury stock for cash ($.0016 per
share)............................................. (46,875) (61) (14)
Exercise of Series A Preferred Stock warrants for
cash ($2.75 per share)............................. 1,143,000 1,143 3,142,107
Net loss for the year ended November 30, 1991........
----------- ----------- ----------- ----------- -------------
Balance at November 30, 1991..................... 2,308,000 2,308 2,249,675 2,924 6,984,036
Net loss for the one-month period ended December 31,
1991...............................................
----------- ----------- ----------- ----------- -------------
Balance at December 31, 1991..................... 2,308,000 2,308 2,249,675 2,924 6,984,036
<CAPTION>
DEFICIT
ACCUMULATED
DURING THE
DEVELOPMENT
STAGE TOTAL
-------------- -----------
<S> <C> <C>
Sale of Common Stock for cash ($.0013 per share)..... $ 6,500
Sale of Common Stock for cash ($.13 per share)....... 24,000
Net loss for the year ended November 30, 1987........ $ (33,642) (33,642)
-------------- -----------
Balance at November 30, 1987..................... (33,642) (3,142)
Sale of Common Stock during May 1988 to an
employee/stockholder for cash of $150 and services
at estimated value ($1.07 per share)............... 120,150
Sale of Common Stock for cash ($1.07 per share)...... 1,095,000
Conversion of note payable to stockholder............ 27,500
Purchase of treasury stock during June for cash of
$20,000 and issuance of a note payable ($.53 per
share)............................................. (40,000)
Sale of Common Stock during November in consideration
for services rendered at estimated value ($1.33 per
share)............................................. 3,300
Net loss for the year ended November 30, 1988........ (461,879) (461,879)
-------------- -----------
Balance at November 30, 1988..................... (495,521) 740,929
Sale of Series A Preferred Stock units for cash
($2.50 per unit)................................... 2,592,500
Net loss for the year ended November 30, 1989........ (1,151,167) (1,151,167)
-------------- -----------
Balance at November 30, 1989..................... (1,646,688) 2,182,262
Purchase of treasury stock during February for cash
of $231,328 and issuance of a note payable (average
$.08 per share).................................... (302,857)
Sale of Series A Preferred Stock units for cash
($2.50 per unit)................................... 320,000
Net loss for the year ended November 30, 1990........ (1,709,728) (1,709,728)
-------------- -----------
Balance at November 30, 1990..................... (3,356,416) 489,677
Purchase of treasury stock for cash ($.0016 per
share)............................................. (75)
Exercise of Series A Preferred Stock warrants for
cash ($2.75 per share)............................. 3,143,250
Net loss for the year ended November 30, 1991........ (1,673,439) (1,673,439)
-------------- -----------
Balance at November 30, 1991..................... (5,029,855) 1,959,413
Net loss for the one-month period ended December 31,
1991............................................... (95,675) (95,675)
-------------- -----------
Balance at December 31, 1991..................... (5,125,530) 1,863,738
</TABLE>
F-5
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) (CONTINUED)
<TABLE>
<CAPTION>
PREFERRED STOCK COMMON STOCK ADDITIONAL
------------------------ ------------------------ PAID-IN
SHARES AMOUNT SHARES AMOUNT CAPITAL
----------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C> <C>
<CAPTION>
DEFICIT
ACCUMULATED
DURING THE
DEVELOPMENT
STAGE TOTAL
-------------- -----------
<S> <C> <C>
Sale of Series B Preferred Stock units for
cash, net of expenses ($4.00 per unit)...... 428,750 $ 429 $ 1,714,271
Compensation expense in connection with the
issuance of stock options................... 190,926
Net loss for the year ended December 31,
1992........................................ $ (2,222,402)
---------- ---------- ---------- ---------- ----------- ------------
Balance at December 31, 1992.............. 2,736,750 2,737 2,249,675 $ 2,924 8,889,233 (7,347,932)
Sale of Series B Preferred Stock units for
cash, net of expenses ($4.00 per unit)...... 834,770 835 3,333,245
Compensation expense in connection with the
issuance of stock options................... 36,637
Net loss for the year ended December 31,
1993........................................ (2,394,617)
---------- ---------- ---------- ---------- ----------- ------------
Balance at December 31, 1993.............. 3,571,520 3,572 2,249,675 2,924 12,259,115 (9,742,549)
Exercise of Series B Preferred Stock warrants
for cash ($5.00 per share).................. 719,310 719 3,595,831
Compensation expense in connection with the
issuance of stock options................... 119,062
Net loss for the year ended December 31,
1994........................................ (3,411,734)
---------- ---------- ---------- ---------- ----------- ------------
Balance at December 31, 1994.............. 4,290,830 4,291 2,249,675 2,924 15,974,008 (13,154,283)
Sale of Series C Preferred Stock units for
cash ($20.00 per unit)...................... 179,450 179 897,070
Compensation expense in connection with the
issuance of stock options................... 107,363
Conversion of note payable and accrued
interest of $23,671 into Series C Preferred
Stock units ($20.00 per unit)............... 244,734 245 1,223,426
Issuance of Common Stock in consideration for
obtaining a license and supply agreement at
estimated value ($6.67 per share)........... 45,000 59 299,941
Net loss for the year ended December 31,
1995........................................ (4,503,496)
---------- ---------- ---------- ---------- ----------- ------------
Balance at December 31, 1995.............. 4,715,014 4,715 2,294,675 2,983 18,501,808 (17,657,779)
Sale of Series C Preferred Stock units for
cash, net of expenses ($20.00 per unit)
(unaudited)................................. 964,812 965 4,776,359
Compensation expense in connection with the
issuance of stock options (unaudited)....... 53,682
Deferred equity issurance costs (unaudited)... (79,000)
Net loss for the six months ended June 30,
1996 (unaudited)............................ (2,085,006)
---------- ---------- ---------- ---------- ----------- ------------
Balance at June 30, 1996 (unaudited)...... 5,679,826 $ 5,680 2,294,675 $ 2,983 $23,252,849 $(19,742,785)
---------- ---------- ---------- ---------- ----------- ------------
---------- ---------- ---------- ---------- ----------- ------------
<CAPTION>
Sale of Series B Preferred Stock units for
cash, net of expenses ($4.00 per unit)...... $1,714,700
Compensation expense in connection with the
issuance of stock options................... 190,926
Net loss for the year ended December 31,
1992........................................ (2,222,402)
----------
Balance at December 31, 1992.............. 1,546,962
Sale of Series B Preferred Stock units for
cash, net of expenses ($4.00 per unit)...... 3,334,080
Compensation expense in connection with the
issuance of stock options................... 36,637
Net loss for the year ended December 31,
1993........................................ (2,394,617)
----------
Balance at December 31, 1993.............. 2,523,062
Exercise of Series B Preferred Stock warrants
for cash ($5.00 per share).................. 3,596,550
Compensation expense in connection with the
issuance of stock options................... 119,062
Net loss for the year ended December 31,
1994........................................ (3,411,734)
----------
Balance at December 31, 1994.............. 2,826,940
Sale of Series C Preferred Stock units for
cash ($20.00 per unit)...................... 897,249
Compensation expense in connection with the
issuance of stock options................... 107,363
Conversion of note payable and accrued
interest of $23,671 into Series C Preferred
Stock units ($20.00 per unit)............... 1,223,671
Issuance of Common Stock in consideration for
obtaining a license and supply agreement at
estimated value ($6.67 per share)........... 300,000
Net loss for the year ended December 31,
1995........................................ (4,503,496)
----------
Balance at December 31, 1995.............. 851,727
Sale of Series C Preferred Stock units for
cash, net of expenses ($20.00 per unit)
(unaudited)................................. 4,777,324
Compensation expense in connection with the
issuance of stock options (unaudited)....... 53,682
Deferred equity issurance costs (unaudited)... (79,000)
Net loss for the six months ended June 30,
1996 (unaudited)............................ (2,085,006)
----------
Balance at June 30, 1996 (unaudited)...... $3,518,727
----------
----------
</TABLE>
Securities issued for non-cash consideration were valued based upon the
Board of Directors' estimate of fair value of the securities issued at the time
the services were rendered.
The accompanying notes are an integral part of the financial statements.
F-6
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
<TABLE>
<CAPTION>
SIX MONTHS
DECEMBER 1, 1986 ENDED
YEARS ENDED DECEMBER 31, (INCEPTION) JUNE 30,
---------------------------------------- THROUGH ------------
1993 1994 1995 DECEMBER 31, 1995 1995
------------ ------------ ------------ ------------------ ------------
<S> <C> <C> <C> <C> <C>
(UNAUDITED)
Cash flows from operating activities:
Net loss during development stage........... $ (2,394,617) $ (3,411,734) $ (4,503,496) $ (17,657,779) $ (2,042,936)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization........... 249,371 288,407 290,873 1,433,206 153,210
Compensation expense recognized in
connection with issuance of stock
options............................... 36,637 119,062 107,363 453,988 53,682
Loss on disposal of fixed assets........ -- -- -- 17,550 --
Noncash operating expenses.............. -- -- -- 51,766 --
Common stock issued in consideration for
operating expenses.................... -- -- 323,671 446,971 --
Changes in assets and liabilities:
(Increase) decrease in grant revenue
receivable.......................... -- -- (112,749) (112,749) --
(Increase) decrease in other current
assets.............................. (5,100) (62,867) 49,522 (18,445) 60,144
(Increase) decrease in security
deposits and other assets........... (21,782) (2,663) (5,834) (79,118) (2,429)
Increase (decrease) in accounts
payable and accrued expenses........ 18,615 69,165 273,399 482,740 97,559
(Decrease) increase in deferred lease
liability........................... (19,646) 18,323 24,307 54,089 12,153
------------ ------------ ------------ ------------------ ------------
Net cash used in
operating activities.............. (2,136,522) (2,982,307) (3,552,944) (14,927,781) (1,668,617)
------------ ------------ ------------ ------------------ ------------
Cash flows from investing activities:
Proceeds on sale of fixed assets............ -- -- -- 22,500 --
Capital expenditures........................ (229,710) (323,426) (158,445) (1,262,984) (138,163)
Redemption of certificates of deposit....... -- 10,000 113,850 182,850 113,850
Purchase of certificates of deposit......... -- (10,000) -- (182,850) --
Other....................................... -- -- -- (29,326) --
------------ ------------ ------------ ------------------ ------------
Net cash used in
investing activities.............. (229,710) (323,426) (44,595) (1,269,810) (24,313)
------------ ------------ ------------ ------------------ ------------
Cash flows from financing activities:
Proceeds from issuance of equity securities,
less offering expenses.................... 3,334,080 3,596,550 897,249 16,723,979 --
Payment of capital lease obligations........ (107,895) (132,414) (215,652) (736,067) (105,995)
Proceeds from notes payable................. -- -- 1,200,000 1,277,500 --
Repayments of notes payable................. (73,923) (20,638) -- (257,124) --
Borrowings from stockholder................. -- -- -- 200,000 --
Repayment of borrowings from stockholder.... -- -- -- (200,000) --
Payments to acquire treasury shares......... -- -- -- (251,403) --
------------ ------------ ------------ ------------------ ------------
Net cash provided by (used in)
financing activities.............. 3,152,262 3,443,498 1,881,597 16,756,885 (105,995)
------------ ------------ ------------ ------------------ ------------
Net increase (decrease) in cash and
cash equivalents.................. 786,030 137,765 (1,715,942) 559,294 (1,798,925)
Cash and cash equivalents at beginning of
period...................................... 1,351,441 2,137,471 2,275,236 -- 2,275,236
------------ ------------ ------------ ------------------ ------------
Cash and cash equivalents at end of
period............................ $ 2,137,471 $ 2,275,236 $ 559,294 $ 559,294 $ 476,311
------------ ------------ ------------ ------------------ ------------
------------ ------------ ------------ ------------------ ------------
Supplemental disclosure of cash flow
information:
Cash paid for interest.................... $ 38,071 $ 47,618 $ 90,060 $ 401,153 $ 35,711
------------ ------------ ------------ ------------------ ------------
------------ ------------ ------------ ------------------ ------------
<CAPTION>
DECEMBER 1, 1986
(INCEPTION)
THROUGH
1996 JUNE 30, 1996
------------ ------------------
<S> <C> <C>
(UNAUDITED) (UNAUDITED)
Cash flows from operating activities:
Net loss during development stage........... $ (2,085,006) $ (19,742,785)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization........... 152,000 1,585,206
Compensation expense recognized in
connection with issuance of stock
options............................... 53,682 507,670
Loss on disposal of fixed assets........ -- 17,550
Noncash operating expenses.............. -- 51,766
Common stock issued in consideration for
operating expenses.................... -- 446,971
Changes in assets and liabilities:
(Increase) decrease in grant revenue
receivable.......................... 85,917 (26,832)
(Increase) decrease in other current
assets.............................. (14,425) (32,870)
(Increase) decrease in security
deposits and other assets........... 8,711 (70,407)
Increase (decrease) in accounts
payable and accrued expenses........ (296,916) 185,824
(Decrease) increase in deferred lease
liability........................... (2,174) 51,915
------------ ------------------
Net cash used in
operating activities.............. (2,098,211) (17,025,992)
------------ ------------------
Cash flows from investing activities:
Proceeds on sale of fixed assets............ -- 22,500
Capital expenditures........................ (55,240) (1,318,224)
Redemption of certificates of deposit....... -- 182,850
Purchase of certificates of deposit......... -- (182,850)
Other....................................... -- (29,326)
------------ ------------------
Net cash used in
investing activities.............. (55,240) (1,325,050)
------------ ------------------
Cash flows from financing activities:
Proceeds from issuance of equity securities,
less offering expenses.................... 4,777,324 21,501,303
Payment of capital lease obligations........ (113,331) (849,398)
Proceeds from notes payable................. -- 1,277,500
Repayments of notes payable................. -- (257,124)
Borrowings from stockholder................. -- 200,000
Repayment of borrowings from stockholder.... -- (200,000)
Payments to acquire treasury shares......... -- (251,403)
------------ ------------------
Net cash provided by (used in)
financing activities.............. 4,663,993 21,420,878
------------ ------------------
Net increase (decrease) in cash and
cash equivalents.................. 2,510,542 3,069,836
Cash and cash equivalents at beginning of
period...................................... 559,294 --
------------ ------------------
Cash and cash equivalents at end of
period............................ $ 3,069,836 $ 3,069,836
------------ ------------------
------------ ------------------
Supplemental disclosure of cash flow
information:
Cash paid for interest.................... $ 28,530 $ 429,683
------------ ------------------
------------ ------------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
F-7
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS
(INTERIM DATA IS UNAUDITED)
1. ORGANIZATION AND BUSINESS
Progenics Pharmaceuticals, Inc. (the "Company") is a biopharmaceutical
company focusing on the development and commercialization of innovative products
for the treatment and prevention of cancer and viral diseases, including human
immunodeficiency virus ("HIV") infection. The Company was incorporated in
Delaware on December 1, 1986. The Company has no products approved by the U.S.
Food and Drug Administration and as a development stage enterprise, the
Company's primary efforts to date have been devoted to research and development,
raising capital, acquiring equipment, setting up laboratories, and clinical
testing of product candidates. In addition to the normal risks associated with a
new business venture, there can be no assurance that the Company's research and
development will be successfully completed, that any products developed will
obtain necessary government regulatory approval or that any approved products
will be commercially viable. In addition, the Company operates in an environment
of rapid change in technology and is dependent upon the continued services of
its current employees, consultants and subcontractors.
The Company has sustained net losses and negative cash flows from operations
since its inception and expects these conditions to continue for the foreseeable
future. The Company has received assurances from a stockholder that it will
provide the financing necessary to enable the Company to continue to operate
through February 28, 1998 if alternative financing, as defined, such as an
initial public offering, is not obtained. The Company will need to raise
additional financing through public or private equity financings, collaborative
or other arrangements with corporate sources, or other sources of financing to
fund operations after February 28, 1998. There can be no assurance that such
additional financing, if at all available, can be obtained on terms reasonable
to the Company. In the event the Company is unable to raise additional capital,
operations after February 28, 1998 will need to be scaled back or discontinued.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRODUCT SALES
The Company has derived all of its product revenue from the sale of research
reagents to primarily one customer. Product sales revenue is recognized at the
time reagents are shipped. The reagents are products of the Company's research
and development efforts. The Company maintains no inventory of reagent and cost
of product sales is not material.
RESEARCH GRANTS
The Company has been awarded government research grants from two grantors
("Grantors"). The respective grants are used to subsidize the Company's research
projects ("Projects") regarding HIV. Grant revenue is recognized on a
straight-line basis over the lives of the Projects. Receivables from the
Grantors represent a concentration of credit risk to the Company. For each of
the three years in the period ended December 31, 1995, all of the Company's
research grant revenue came from the Grantors.
F-8
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FIXED ASSETS
Leasehold improvements, furniture and fixtures, and equipment are stated at
cost. Furniture, fixtures, and equipment are depreciated on a straight-line
basis over their estimated useful lives. Leasehold improvements are amortized on
a straight-line basis over the life of the lease or of the improvement,
whichever is shorter.
PATENTS
As a result of research and development efforts conducted by the Company, it
has applied, or is applying, for a number of patents to protect proprietary
inventions. All costs associated with patents are expensed as incurred.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments which have maturities of
three months or less, when acquired, to be cash equivalents. The carrying amount
reported in the balance sheet for cash and cash equivalents approximates its
fair value. Cash, cash equivalents and certificates of deposit, subject the
Company to concentrations of credit risk. At December 31, 1995, the Company had
invested approximately $33,000 in funds with a major investment company and held
approximately $526,000 in a single commercial bank. At December 31, 1994, the
Company had invested approximately $2,100,000 in funds and three month
certificates of deposit with a major investment company and held approximately
$267,000, including certificates of deposit totaling approximately $114,000, in
a single commercial bank.
NET LOSS PER SHARE
PRO FORMA PER SHARE DATA (UNAUDITED)
The pro forma per share data included in the Statements of Operations has
been computed using the weighted average number of shares of common stock
outstanding. Common stock issuable upon the exercise of outstanding stock
options and warrants are excluded from the computation as their effect is
anti-dilutive, except that, pursuant to a Securities and Exchange Commission
Staff Accounting Bulletin, equity securities, including options and warrants,
issued at prices below the assumed public offering price of $12.00 during the
12-month period prior to the proposed offering have been included in the
calculation as if they were outstanding for all periods presented. In addition,
convertible preferred stock that will convert automatically upon the closing of
the Company's proposed initial public offering has been included in the
calculation from the original date of issuance.
PER SHARE DATA IN ACCORDANCE WITH APB NO. 15
The per share data found below has been computed in accordance with
Accounting Principles Board Opinion No. 15 ("APB No. 15"). Such computation is
based on the net loss for the period divided by the weighted average number of
shares of common stock outstanding. APB No. 15 requires that the weighted
average number of shares outstanding exclude the number of common shares
issuable upon the exercise of
F-9
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
outstanding options and warrants and the conversion of preferred stock since
such inclusion would be anti-dilutive.
<TABLE>
<CAPTION>
SIX MONTHS
YEARS ENDED DECEMBER 31, ENDED JUNE 30,
----------------------------------------- --------------------------
1993 1994 1995 1995 1996
------------ ------------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
(UNAUDITED) (UNAUDITED)
Shares used in calculation of net loss per
share................................... 2,249,675 2,249,675 2,264,839 2,249,675 2,294,675
------------ ------------- ------------ ------------ ------------
------------ ------------- ------------ ------------ ------------
Net loss per share........................ $ (1.06) $ (1.52) $ (1.99) $ (0.91) $ (0.91)
------------ ------------- ------------ ------------ ------------
------------ ------------- ------------ ------------ ------------
</TABLE>
INCOME TAXES
The Company accounts for income taxes in accordance with the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" ("SFAS 109"). SFAS 109 requires that the Company recognize deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under this
method, deferred tax liabilities and assets are determined on the basis of the
difference between the tax basis of assets and liabilities and their respective
financial reporting amounts ("temporary differences") at enacted tax rates in
effect for the years in which the temporary differences are expected to reverse.
RISKS AND UNCERTAINTIES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates. See also
Notes 7(c) and 11.
IMPACT OF THE ADOPTION OF RECENTLY ISSUED ACCOUNTING STANDARD
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("SFAS
123") in October 1995. SFAS 123 requires companies to estimate the fair value of
common stock, stock options, or other equity instruments ("Equity Instrument")
issued to employees using pricing models which take into account various
factors, such as the current price of the common stock, volatility, and the
expected life of the Equity Instrument. SFAS 123 permits companies to elect
either to provide pro forma note disclosure or adjust operating results for the
amortization of the estimated value of the Equity Instrument as compensation
expense over the vesting period of the Equity Instrument. The Company has
elected to provide pro forma note disclosure which will appear in its annual
financial statements for the year ending December 31, 1996 and, therefore, the
adoption of SFAS 123 will have no effect on the Company's financial position or
results of operations.
F-10
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
STATEMENT OF CASH FLOWS
Supplemental disclosure of noncash investing and financing activities:
For the years ended December 31, 1993, 1994 and 1995:
Capital lease obligations of approximately $71,000, $423,000 and
$139,000 were incurred during the years ended December 31, 1993, 1994 and
1995, respectively, when the Company leased new equipment.
In August 1995, the Company issued 45,000 restricted shares of Common
Stock ("Restricted Shares") in consideration for obtaining a license and
supply agreement. The estimated fair market value of such shares at the date
of issuance was $300,000.
In December 1995, a shareholder exchanged a note payable of $1,200,000
and accrued interest of approximately $24,000 for approximately 61,200
units. Each unit consists of four shares of Series C Preferred Stock and one
five-year warrant to purchase one share of Series C Preferred Stock. (See
Note 5.)
Included in accounts payable, at December 31, 1993, were obligations for
approximately $30,000 of fixed asset additions.
For the period from December 1, 1986 (inception) to December 31, 1995:
Capital lease obligations of approximately $1,083,000 were incurred
during the period from December 1, 1986 (inception) to December 31, 1995
when the Company leased new equipment.
During 1991, the Company financed the acquisition of laboratory
equipment by issuing a note payable totaling approximately $64,000 to the
supplier.
In February 1990, the Company issued a note payable, which at the time
of issuance had a net present value of approximately $123,000, as partial
consideration for the acquisition of approximately 3,800,000 shares of
Common Stock and approximately $52,000 of operating expenses. The shares of
Common Stock were held as treasury stock and then subsequently retired.
In June 1988, the Company issued a note payable in the amount of $20,000
as partial consideration for the purchase of 75,000 shares of the Company's
Common Stock. Such shares, at the time they were acquired, were held as
treasury stock and then subsequently retired.
During 1988, a stockholder/creditor forgave repayment of a note payable
totaling approximately $28,000. This transaction was recorded as a
contribution to capital.
F-11
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
3. FIXED ASSETS
Fixed assets, including amounts under capitalized lease obligations, consist
of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------- JUNE 30,
1994 1995 1996
------------ ------------- ------------
<S> <C> <C> <C>
(UNAUDITED)
Computer equipment..................................................... $ 279,445 $ 286,425 $ 167,654
Machinery and equipment................................................ 1,354,811 1,637,460 1,372,956
Furniture and fixtures................................................. 181,782 190,008 138,415
Leasehold improvements................................................. 29,702 29,702 29,702
------------ ------------- ------------
1,845,740 2,143,595 1,708,727
Less, accumulated depreciation and amortization........................ (886,604) (1,177,477) (758,712)
------------ ------------- ------------
$ 959,136 $ 966,118 $ 950,015
------------ ------------- ------------
------------ ------------- ------------
</TABLE>
4. ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable and accrued expenses consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------- JUNE 30,
1994 1995 1996
---------- ---------- -----------
<S> <C> <C> <C>
(UNAUDITED)
Accounts payable............................................................ $ 69,515 $ 153,749 $ 72,509
Fees payable to Scientific Advisory Board members........................... 54,000 116,250 28,750
Accrued payroll and related costs........................................... 15,325 56,235 --
Legal and accounting fees payable........................................... 70,501 156,506 163,565
Deferred lease liability, current portion................................... -- 4,349 15,809
---------- ---------- -----------
$ 209,341 $ 487,089 $ 280,633
---------- ---------- -----------
---------- ---------- -----------
</TABLE>
5. STOCKHOLDERS' EQUITY
On October 2, 1996, the Board of Directors (the "Board") of the Company
approved a three-for-four reverse stock split of common stock. All common stock
data, including loss per share and weighted average number of shares outstanding
has been retroactively amended to reflect the stock split. The Company's
Certificate of Incorporation, as amended, authorizes the Company to issue
60,000,000 shares, of which 40,000,000 shares are designated as common shares,
par value $.0013, and 20,000,000 shares are designated as preferred shares, par
value $.001. The Board has the authority to issue common and preferred shares,
in series, with rights and privileges determined by the Board. 4,000,000
preferred shares are designated as Series A Preferred Stock ("Series A"),
2,500,000 shares are designated as Series B Preferred Stock ("Series B") and
3,750,000 shares are designated as Series C Preferred Stock ("Series C")
(collectively the "Preferred Stock"). During June 1995, the Board rescinded the
designation of unissued Class A Common Stock and designated all common shares as
common stock ("Common Stock"). In the event that the Company declares and pays a
dividend, the Preferred Stock and Common Stock will receive such dividend on a
pro rata basis, as defined. Distributions in liquidation shall be pro rated to
the Preferred Stock and
F-12
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
5. STOCKHOLDERS' EQUITY (CONTINUED)
Common Stock up to specified amounts, as defined and, thereafter, pro rata based
upon the number of shares outstanding on a Common Stock equivalent basis, as
defined. Each share of Preferred Stock is convertible, at the option of the
holder, into .75 share of Common Stock, adjusted in accordance with a formula
should the Company sell Preferred or Common Stock at a per share price below the
original issuance price paid by existing Preferred Stock shareholders
("Preferred Stockholder"), as defined. Conversion is automatic at the earlier of
(i) the closing of a public offering of the Company's Common Stock in which
certain defined aggregate proceeds are raised and the per share selling price
exceeds a defined level, or (ii) the date the Preferred Stockholders have
converted a defined number of shares of Preferred Stock. The conversion rate is
subject to anti-dilution provisions, as defined. Preferred Stockholders are
entitled to vote with Common Stockholders as a single class. In addition,
certain changes in the Company's capital structure, as defined, which includes,
under certain situations, the issuance of additional series of Preferred or
Common Stock (the "Proposal"), require a separate vote by Preferred
Stockholders. If less than a majority of Preferred Stockholders vote in favor of
the Proposal and if the Common Stockholders approve the Proposal, the Company
has the right to redeem all outstanding shares of Preferred Stock at per share
prices ranging from $3.46 to $8.84, as defined. The Preferred Stock also is
subject to transfer restrictions, as defined, and the Company has the right of
first refusal to acquire such shares in the event an investor proposes to sell
any or all shares to any person other than a permitted transferee.
During 1988, the Company entered into subscription agreements ("Agreements")
in connection with the sale of approximately 1,000,000 shares of its Common
Stock at a per share price of $1.07. The Agreements contain a provision whereby
investors have the right to receive additional shares of Common Stock, as
defined, in the event the Company sells Common Stock at a per share price below
$1.07. This right terminates upon any registered public offering, any sale of
the Company or its assets, or upon the Company selling an aggregate of 7,500,000
shares of Common Stock.
During 1989 and 1990, the Company raised $2,913,000 from the sale of
1,165,000 Units (the "A Units") in a private placement. Each A Unit consisted of
one share of Series A Preferred Stock and one warrant (the "A Warrant") which
entitled the holder to purchase one share of Series A Preferred Stock at a price
of $2.75 per share. During 1991, 1,143,000 A Warrants were exercised yielding
$3,143,000 to the Company. The remaining unexercised A Warrants have expired.
During 1992 and 1993, the Company raised $5,049,000, after expenses, from
the sale of 1,263,520 Units (the "B Units") in a private placement. Each B Unit
consisted of one share of Series B Preferred Stock and one warrant (the "B
Warrant") which, as amended, entitled the holder to purchase one share of Series
B Preferred Stock at a price of $5.00 per share. During 1994, 719,310 B Warrants
were exercised yielding $3,597,000 to the Company. The remaining unexercised B
Warrants have expired.
During November and December 1995, the Company raised $897,000 from the sale
of approximately 44,900 Units (the "C Units") in a private placement. In
addition, during December 1995, a stockholder converted a note payable (see Note
6). Each C Unit consists of four shares of Series C Preferred Stock and one
five-year warrant (the "C Warrant") which entitles the holder to purchase one
share of Series C Preferred Stock at $5.00 per share or, if exercised subsequent
to an initial public offering, as defined, .75 share of Common Stock at $6.67
per share. The number of C Warrants and their exercise price are subject to
adjustment in the event the Company issues additional shares of Common Stock at
below defined per
F-13
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
5. STOCKHOLDERS' EQUITY (CONTINUED)
share prices. As of December 31, 1995, 106,046 C Warrants were issued and
outstanding and fully exercisable.
During the first quarter of 1996, the Company raised $4,777,000, after
expenses, from the sale of 241,203 additional C Units.
6. NOTE PAYABLE--STOCKHOLDER
During 1995, the Company borrowed $1,200,000 under a promissory note from a
stockholder. The promissory note, as amended and restated, provided for interest
to accrue at a rate of 10% per annum. Interest and principal were payable upon
demand, but not before December 8, 1995. During December 1995, the promissory
note plus accrued interest of $23,671 were exchanged for approximately 61,200 C
Units (see Note 5).
7. COMMITMENTS AND CONTINGENCIES:
(A) OPERATING LEASES
The Company leases office and laboratory space under a noncancelable
sublease agreement expiring December 30, 1997 (the "sublease") and a lease
agreement expiring April 30, 1998 (the "lease"). The sublease, as amended, and
the lease provide for escalations of the minimum rent during the lease term as
well as additional charges based upon usage of certain utilities in excess of
defined amounts ("Additional Utility Charges"). The Company recognizes rental
expense from the sublease and lease on the straight-line basis. During 1995 and
1994, the Company recognized rental expense in excess of amounts paid of
approximately $24,000 and $18,000, respectively, while during 1993,
approximately $20,000 of previously recognized rent expense, which had been
included as a deferred lease liability at December 31, 1992, was paid.
The Company also leases office equipment and an automobile under
noncancelable operating leases. The leases expire at various times through July
1997.
Future minimum annual payments under all operating lease agreements,
including the sublease and lease, are as follows:
<TABLE>
<CAPTION>
MINIMUM
YEARS ENDING ANNUAL
DECEMBER 31, PAYMENTS
------------- ------------
<S> <C>
1996............................................................................ $ 645,174
1997............................................................................ 672,019
1998............................................................................ 229,252
------------
$ 1,546,445
------------
------------
</TABLE>
Rental expense totaled approximately $657,000, $506,000, $353,000 and
$2,353,000 for the years ended December 31, 1995, 1994 and 1993 and for the
period from December 1, 1986 (inception) to December 31, 1995, respectively.
Additional Utility Charges, as defined above, were not material for these
periods.
F-14
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
7. COMMITMENTS AND CONTINGENCIES: (CONTINUED)
(B) CAPITAL LEASES
The Company leases certain equipment under various noncancelable capital
lease agreements. The leases are for periods ranging from two to five years,
after which the Company: (i) either has the option or is required to purchase
the equipment at defined amounts or (ii) may extend the lease for up to one
additional year at defined monthly payments or (iii) is required to return the
equipment, as per the respective lease agreements. Certain capital leases, as
amended, contain various covenants which include maintaining a minimum tangible
net worth, as defined, of at least $625,000 during the term of the leases. This
covenant indirectly restricts the Company's ability to pay dividends.
As of December 31, 1995, minimum annual payments under all capital leases,
including required payments to acquire leased equipment, are as follows:
<TABLE>
<CAPTION>
MINIMUM
YEARS ENDING ANNUAL
DECEMBER 31, PAYMENTS
------------- ----------
<S> <C>
1996.............................................................................. $ 225,190
1997.............................................................................. 113,455
1998.............................................................................. 52,168
1999.............................................................................. 27,676
2000.............................................................................. 7,918
----------
426,407
Less, amounts representing interest............................................... 79,239
----------
Present value of net minimum capital lease payments............................... $ 347,168
----------
----------
</TABLE>
Leased equipment included as a component of fixed assets was approximately
$731,000 and $591,000 at December 31, 1995 and 1994, respectively; related
accumulated depreciation was approximately $242,000 and $119,000 for the same
respective periods.
(C) LICENSING AGREEMENTS:
(I) UNIVERSITIES
In March 1989, the Company (as licensee) entered into a worldwide
coexclusive licensing agreement with Columbia University whereby the Company has
the coexclusive right to use certain technology developed on behalf of the
university. According to the terms of the agreement, the Company is required to
pay nonrefundable, noncreditable licensing fees ("Licensing Fees"), payable in
installments as certain milestones associated with product development
("Milestones") occur, as defined, which include the manufacture and distribution
of a product which uses the licensed technology by March 1, 1997. In addition,
the Company is required to pay a royalty based on net sales of products which
utilize the licensed technology, as defined. The licensing agreement may be
terminated by the university in the event that the Company fails to achieve the
Milestones; otherwise the agreement shall continue until the expiration (June
2009), lapse or invalidation of the university's patents on the licensed
technology. The Company has
F-15
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
7. COMMITMENTS AND CONTINGENCIES: (CONTINUED)
the right to terminate the agreement at any time upon 90 days prior written
notice. The termination of the license could have a material adverse effect on
the business of the Company.
The Company has not achieved certain Milestones required under the
agreement, and there is no assurance that the Company will maintain the license
with the university in full force and effect through the successful development
and commercialization of a product. No Licensing Fees were paid during 1995,
1994 and 1993. Unless the license is terminated, remaining installment payments,
aggregating $650,000 will become payable when the respective Milestones occur.
In January 1991, the Company (as licensee) also entered into a non-exclusive
licensing agreement with Stanford University whereby the Company has the
non-exclusive, non-transferable right to use certain technology owned by the
university. According to the terms of the agreement, the Company will be
required to remit royalties at various rates, as defined. Royalties shall
continue to be payable, irrespective of termination of this license agreement,
until such time as all sales of products which utilize the licensed technology
shall have ceased.
(II) SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH
In November 1994, the Company (as licensee) entered into a worldwide
exclusive licensing agreement with Sloan-Kettering Institute for Cancer Research
("Sloan-Kettering") whereby the Company has the exclusive right to use certain
technology owned by Sloan-Kettering. Certain employees of Sloan-Kettering are
consultants to the Company (see Note 7(d)). According to the terms of the
agreement, the Company was required to pay nonrefundable, noncreditable
licensing fees in installments. Commencing in 1995, the Company is required to
remit royalties based upon the greater of minimum royalties, as defined, or as a
percentage of sales of any licensed product, as defined ("Product Royalties"),
and sublicense income, as defined, earned under sublicenses granted by the
Company in accordance with this licensing agreement ("Sublicense Royalties"). In
the event that no Product Royalties or Sublicense Royalties are due in a given
calendar year, then 50% of that year's minimum royalty will be creditable
against future Product Royalties or Sublicense Royalties due Sloan-Kettering.
The licensing agreement may be terminated by Sloan-Kettering in the event that
the Company fails to achieve certain defined objectives, which include the
manufacture and distribution of a product which uses the licensed technology by
November 17, 2002, or if the Company fails to satisfy certain other contractual
obligations ("Early Termination"); otherwise the agreement shall terminate
either upon the expiration or abandonment of Sloan-Kettering's patents on the
technology licensed, or 15 years from the date of first commercial sale, as
defined, whichever is later. The Company has the right to terminate the
agreement at any time upon 90 days prior written notice ("Company Termination").
In the event of Early Termination or Company Termination, all licensing rights
under the agreement would revert to Sloan-Kettering. Early Termination of the
license could have a material adverse effect on the business of the Company.
Although the Company intends to use its best efforts to comply with the terms of
the license, there can be no assurance that the licensing agreement will not be
terminated.
(III) CAMBRIDGE BIOTECH CORPORATION
In August 1995, the Company (as licensee) entered into a license and supply
agreement (the "L&S Agreement") with Cambridge Biotech Corporation ("CBC").
Under the terms of the L&S Agreement, the
F-16
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
7. COMMITMENTS AND CONTINGENCIES: (CONTINUED)
Company obtained a coexclusive license to use certain technology and a right to
purchase QS-21 adjuvant (the "Product") from CBC for use in the Company's
research and development activities. In consideration for the license, the
Company paid a nonrefundable, noncreditable license fee and issued 45,000
restricted shares of the Company's Common Stock ("Restricted Shares") to CBC.
The Restricted Shares are nontransferable with this restriction lapsing upon the
Company's achievement of certain milestones ("L&S Milestones"), as defined. In
the event that any one or more L&S Milestones do not occur, the underlying
Restricted Shares would be returned to the Company. The fair value of the
Restricted Shares, combined with the noncreditable license fee, were expensed
during 1995 as research and development. In addition, the Company will be
required to remit royalties based upon the net sales of products sold using the
licensed technology ("Licensed Products") and a defined percentage of any
sublicense fees and royalties payable to the Company with respect to Licensed
Products. The L&S Agreement may be terminated by CBC in the event that the
Company fails to achieve certain defined objectives, which include the
manufacture and distribution of a Licensed Product by August 31, 2003 ("Early
Termination"); otherwise the L&S Agreement shall terminate upon the expiration
of CBC's patents on the technology licensed. The Company has the right to
terminate the L&S Agreement at any time upon 90 days prior written notice
("Company Termination"), as defined. In the event of Early Termination or
Company Termination, all licensing rights under the agreement would revert to
CBC. Early termination of the L&S Agreement would have a material adverse effect
on the business of the Company. Although the Company intends to use its best
efforts to comply with the terms of the L&S Agreement, there can be no assurance
that the agreement will not be terminated.
In connection with the above agreements, the Company has recognized expenses
totaling approximately $382,500, $22,500, $10,000 and $785,000 for the years
ended December 31, 1995, 1994 and 1993 and for the period from December 1, 1986
(inception) to December 31, 1995, respectively. Such expenses include the fair
value of the Restricted Shares.
(D) CONSULTING AGREEMENTS
As part of the Company's research and development efforts it enters into
consulting agreements ("Agreements") with external scientific specialists
("scientists"). These Agreements contain varying terms and provisions which
include fees to be paid by the Company and services to be provided by the
scientists, some of whom are members of the Company's Scientific Advisory Board.
Certain scientists have purchased Common Stock or received stock options which
are subject to vesting provisions, as defined. The Company has recognized
expenses with regards to these Agreements totaling approximately $245,000,
$261,000, $136,000 and $1,166,000 for the years ended December 31, 1995, 1994
and 1993 and for the period from December 1, 1986 (inception) to December 31,
1995, respectively. Such expenses include the fair value of stock options.
8. STOCK OPTION PLANS:
(A) 1989 NON-QUALIFIED STOCK OPTION PLAN
On April 1, 1989, the Company adopted a Non-Qualified Stock Option Plan (the
"89 Plan"), under which a maximum of 375,000 shares of Common Stock, adjusted
for stock splits, stock dividends and other
F-17
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
8. STOCK OPTION PLANS: (CONTINUED)
capital adjustments, as defined, are available for stock option awards to
employees, consultants, directors and other individuals who render services to
the Company. For a period of ten years following the termination for any reason
of an optionee's employment or active involvement with the Company, as
determined by the Board, the Company has the right to repurchase any or all
shares of Common Stock held by the optionee and/or any or all of the vested but
unexercised portion of any option granted under the 89 Plan to such optionee at
a purchase price defined by the 89 Plan. The 89 Plan terminated on April 1,
1994, and any option granted before termination of the 89 Plan shall continue
under the terms of the 89 Plan.
Certain options issued from the 89 Plan entitle the holders to purchase
shares of Common Stock at a per share price of $1.33, which was less than the
estimated fair market value of the Common Stock, as determined by the Board of
Directors, on the date of grant. As a result, the Company is recognizing
compensation expense on a pro rata basis, over the respective options' vesting
periods of three to ten years, for the difference between the estimated fair
market value of the Common Stock on the date the option was granted and the
exercise price. The Company recognized compensation expense of approximately
$21,000, $33,000, $37,000 and $282,000 for the years ended December 31, 1995,
1994 and 1993 and for the period from December 1, 1986 (inception) to December
31, 1995, respectively, in connection with these options.
Transactions involving stock option awards under the 89 Plan during 1993,
1994 and 1995 are summarized as follows:
<TABLE>
<CAPTION>
NUMBER PRICE
OF SHARES PER SHARE
----------- ----------------
<S> <C> <C>
Balance outstanding, December 31, 1992............................................... 311,332 $1.33 to $3.67
1993: Granted........................................................................ 54,188 $5.33
-----------
Balance outstanding, December 31, 1993.......................................... 365,520 $1.33 to $5.33
1994: Canceled....................................................................... (259) $1.33
-----------
Balance outstanding, December 31, 1994.......................................... 365,261 $1.33 to $5.33
1995: Canceled....................................................................... (11,250) $3.67
-----------
Balance outstanding, December 31, 1995.......................................... 354,011 $1.33 to $5.33
-----------
-----------
</TABLE>
The total number of options exercisable under the 89 Plan at December 31,
1995 was 252,573 at exercise prices of $1.33 to $5.33 per share. As of December
31, 1995, no shares are available for future grants.
(B) 1993 STOCK OPTION PLAN
On December 2, 1993, the Company adopted a Stock Option Plan (the "93
Plan"). Under the 93 Plan, as amended, a maximum of 750,000 shares of Common
Stock, adjusted for stock splits, stock dividends, and other capital
adjustments, as defined, are available for stock option awards. Awards issued
under the 93 Plan may qualify as incentive stock options ("ISOs"), as defined by
the Internal Revenue Code, or may be granted as non-qualified stock options.
Under the 93 Plan, the Compensation Committee of the Board of Directors (the
"Committee") may award options to employees, directors who are not employees and
F-18
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
8. STOCK OPTION PLANS: (CONTINUED)
other individuals who render services to the Company. For a period of ten years
following the termination for any reason of an optionee's employment or active
involvement with the Company, as determined by the Board of Directors, the
Company shall have the right to repurchase any or all shares of Common Stock
acquired under the 93 Plan and held by the optionee and/or any or all of the
vested but unexercised portion of any option granted under the 93 Plan to such
optionee at a purchase price, as defined by the 93 Plan. This right will
terminate upon the Company's completion of a public offering of securities, as
defined. The 93 Plan will terminate on December 2, 2003; however, any option
outstanding as of the termination date shall remain outstanding until such
option expires in accordance with the terms of the respective grant.
During 1994, the Committee granted 582,000 stock options under the 93 Plan.
Included therein were 450,000 stock options ("94 Options") which entitle the
holders to purchase shares of Common Stock at a per share price of $5.33, which
was less than the estimated fair market value of the Common Stock, as determined
by the Board of Directors, on the date of issuance. As a result, the Company is
recognizing compensation expense on a pro rata basis, over the respective
options' vesting periods of seven years, for the difference between the
estimated fair market value of the Common Stock on the date the option was
issued and the exercise price. The Company recognized compensation expense of
approximately $86,000 for each of the years ended December 31, 1995 and 1994,
and approximately $172,000 for the period from December 1, 1986 (inception) to
December 31, 1995, in connection with the 94 Options.
The following table summarizes the activity in the 93 Plan:
<TABLE>
<CAPTION>
NUMBER PRICE
OF SHARES PER SHARE
----------- ----------------
<S> <C> <C>
1993: Granted........................................................................ 63,975 $5.33
-----------
Balance outstanding, December 31, 1993.......................................... 63,975 $5.33
1994: Granted........................................................................ 582,000 $5.33 to $6.67
-----------
Balance outstanding, December 31, 1994.......................................... 645,975 $5.33 to $6.67
1995: Granted........................................................................ 4,500 $6.67
Canceled........................................................................ (33,750) $5.33 to $6.67
-----------
Balance outstanding, December 31, 1995.......................................... 616,725 $5.33 to $6.67
-----------
-----------
</TABLE>
The total number of options exercisable under the 93 Plan at December 31,
1995 was 171,320 at exercise prices of $5.33 to $6.67 per share. As of December
31, 1995, shares available for future grants under the 93 Plan amounted to
133,275.
(C) 1993 EXECUTIVE STOCK OPTION PLAN
On December 15, 1993, the Company adopted an Executive Stock Option Plan
(the "Executive Plan"), under which a maximum of 750,000 shares of Common Stock,
adjusted for stock splits, stock dividends, and other capital adjustments, as
defined, are available for stock option awards. Awards issued under the
Executive Plan may qualify as ISOs, as defined by the Internal Revenue Code, or
may be granted as non-qualified stock options. Under the Executive Plan, the
Board may award options to senior executive employees (including officers who
may be members of the Board) of the Company, as defined. The
F-19
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
8. STOCK OPTION PLANS: (CONTINUED)
Executive Plan will terminate on December 15, 2003; however, any option
outstanding as of the termination date shall remain outstanding until such
option expires in accordance with the terms of the respective grant.
During December 1993, the Board awarded a total of 750,000 stock options
under the Executive Plan to one officer, of which 664,774 were non-qualified
options ("NQOs") and 85,226 were ISOs. The NQOs and ISOs entitle the officer to
purchase an equal number of shares of Common Stock at prices of $5.33 and $5.87
per share, respectively, which represented the estimated fair market value and
110% of the estimated fair market value of the Company's Common Stock at the
date of grant, as determined by the Board of Directors. 375,000 of the options
vest over a period of five years, with the remaining 375,000 options vesting in
full on the tenth anniversary of the date of grant; however, vesting will be
accelerated in the event of the effective date of an initial public offering of
the Company's Common Stock or immediately before the closing of an acquisition
of the Company.
750,000 options were outstanding at December 31, 1995 under the Executive
Plan, of which 225,000 were exercisable. As of December 31, 1995, no shares were
available for future grants under the Executive Plan.
9. EMPLOYEE SAVINGS PLAN
The Company, during 1993, adopted the provisions of the amended and restated
Progenics Pharmaceuticals 401(k) Plan (the "Amended Plan"). The terms of the
Amended Plan, among other things, allow eligible employees, as defined, to
participate in the Amended Plan by electing to contribute to the Amended Plan a
percentage of their compensation to be set aside to pay their future retirement
benefits, as defined. The Company has agreed to match 25% of up to the first 8%
of compensation that eligible employees contribute to the Amended Plan, as
defined. In addition, the Company may also make a discretionary contribution, as
defined, each year on behalf of all participants who are non-highly compensated
employees, as defined. The Company made matching contributions of approximately
$12,000, $10,000 and $3,000 to the Amended Plan in 1995, 1994 and 1993,
respectively.
10. INCOME TAXES
There is no provision (benefit) for federal or state income taxes for all
periods presented, since the Company has incurred operating losses since
inception and has established a valuation allowance equal to the total deferred
tax asset.
F-20
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
10. INCOME TAXES (CONTINUED)
The tax effect of temporary differences, net operating loss carry-forwards
and research and experimental tax credit carry-forwards as of December 31, 1995
and 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
Deferred tax assets and valuation allowance:
Net operating loss carry-forwards............................. $ 4,350,960 $ 4,022,832
Fixed assets.................................................. 133,225 93,877
Deferred charges.............................................. 2,666,772 1,228,617
Research and experimental tax credit carry-forwards........... 491,681 426,234
Valuation allowance........................................... (7,642,638) (5,771,560)
------------- -------------
-- --
------------- -------------
------------- -------------
</TABLE>
As of December 31, 1995, the Company has available, for tax purposes, unused
net operating loss carry-forwards of approximately $10,500,000 which will expire
in various years from 2001 to 2010. The Company's research and experimental tax
credit carry-forwards expire in various years from 2002 to 2010. Future
ownership changes may limit the future utilization of these net operating loss
and research and experimental tax credit carry-forwards as defined by the
federal tax code.
11. NOTE TO INTERIM FINANCIAL STATEMENTS (UNAUDITED)
BASIS OF PRESENTATION
The interim financial statements are unaudited and reflect adjustments,
consisting of only normal recurring accruals, which are, in the opinion of the
Company's management, necessary for a fair presentation of the financial
position and results of operations for the periods presented. Operating results
for any interim period are not necessarily indicative of the results for the
full year.
IMPACT OF THE ADOPTION OF RECENTLY ISSUED ACCOUNTING STANDARD
The Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of" ("SFAS 121") in March 1995.
SFAS 121 requires companies to review their long-lived assets and certain
identifiable intangibles (collectively, "Long-Lived Assets") for impairment
whenever events or changes in circumstances indicate that the carrying value of
a Long-Lived Asset may not be recoverable. The Company adopted the provisions of
SFAS 121 as of January 1, 1996 which had no impact on the Company's financial
position or results of operations.
STATEMENT OF CASH FLOWS
Supplemental disclosure of noncash investing and financing activities:
Capital lease obligations of approximately $63,000 and $81,000 were incurred
during the six months ended June 30, 1995 and 1996, respectively, when the
Company leased new equipment.
F-21
<PAGE>
PROGENICS PHARMACEUTICALS, INC.
(A DEVELOPMENT STAGE ENTERPRISE)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(INTERIM DATA IS UNAUDITED)
11. NOTE TO INTERIM FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
Included in accounts payable at June 30, 1996 were deferred equity issuance
costs of $79,000.
1993 STOCK OPTION PLAN
The following summarizes the activity in the 93 Plan for the six months
ended June 30, 1996:
<TABLE>
<CAPTION>
NUMBER OF PRICE
SHARES PER SHARE
----------- ----------------
<S> <C> <C>
Balance outstanding, December 31, 1995.......................... 616,725 $5.33 to $6.67
Granted (1)................................................... 94,500 $5.33 to $6.67
Canceled...................................................... (22,500) $5.33
-----------
Balance outstanding, June 30, 1996........................ 688,725 $5.33 to $6.67
-----------
-----------
</TABLE>
- ------------------------
(1) Certain options (15,000) issued to consultants on May 15, 1996 are
compensatory. Accordingly, the Company is recognizing compensation expense
on a pro rata basis over the respective options' vesting period (of four or
five years). Such expense was not material for the six months ended June 30,
1996.
1996 STOCK INCENTIVE PLAN
During May 1996, the Company adopted the 1996 Stock Incentive Plan (the "96
Plan"). The 96 Plan provides for the award of 750,000 shares of Common Stock,
adjusted for stock splits, stock dividends and other capital adjustments as
defined. Under the 96 Plan, the Committee may award stock to eligible
individuals which includes employees, advisors or consultants to the Company.
The form of the award will be determined by the Committee and includes stock
options, which may be ISOs, stock appreciation rights, restricted stock,
performance awards or phantom stock as defined (collectively "Awards"). The
Committee will also determine the term and vesting of the Award and the
Committee may in its discretion accelerate the vesting of an award at any time.
To date there have been no Awards issued from the 96 Plan.
LICENSING AGREEMENT
During September 1996, the Company (as licensee) entered into a license
agreement with The Regents of the University of California ("U of C"). According
to the terms of the agreement, the Company is required to remit royalties based
upon the greater of minimum royalties or a percentage of product sales and a
portion of sublicensing income as defined. The agreement can be terminated by
the Company upon 90 days notice or by U of C in the event the Company fails to
perform, which includes the achievement of certain defined milestones; otherwise
the agreement terminates upon the lapse of U of C's patent (December 2002)
regarding the licensed technology. Royalty payments to date and future minimum
royalties are not significant. Early termination of the agreement could have a
material adverse effect on the business of the Company. Although the Company
intends to use its best efforts to comply with the terms of the agreement, there
can be no assurances that the agreement will not be terminated.
F-22
<PAGE>
PROGENICS PLANS TO INITIATE PHASE I/II CLINICAL TRIALS IN 1997 OF ITS TWO MOST
ADVANCED HIV PRODUCT CANDIDATES, PRO 542 AND PRO 367.
PRO 542 IS PROGENICS' THERAPEUTIC PRODUCT CANDIDATE DESIGNED TO NEUTRALIZE HIV.
[DIAGRAM DEPICTING PRO 542, PROGENICS' THERAPEUTIC PRODUCT CANDIDATE DESIGNED TO
NEUTRALIZE HIV]
PRO 367 IS PROGENICS' THERAPEUTIC PRODUCT CANDIDATE DESIGNED TO DESTROY HIV-
INFECTED CELLS.
[DIAGRAM DEPICTING PRO 367, PROGENICS' THERAPEUTIC PRODUCT CANDIDATE DESIGNED TO
DESTROY HIV-INFECTED CELLS]
<PAGE>
- ------------------------------------------------
------------------------------------------------
- ------------------------------------------------
------------------------------------------------
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION WITH THIS OFFERING
OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL OR A SOLICITATION OF ANY OFFER TO BUY BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER TO SELL OR A SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE AS OF WHICH INFORMATION IS FURNISHED.
-------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Prospectus Summary............................................ 3
Risk Factors.................................................. 6
Use of Proceeds............................................... 17
Dividend Policy............................................... 17
Capitalization................................................ 18
Dilution...................................................... 19
Selected Financial Data....................................... 20
Management's Discussion and Analysis of Financial Condition
and Results of Operations................................... 21
Business...................................................... 25
Management.................................................... 45
Certain Transactions.......................................... 54
Principal Stockholders........................................ 55
Description of Capital Stock.................................. 57
Shares Eligible for Future Sale............................... 59
Underwriting.................................................. 61
Legal Matters................................................. 63
Experts....................................................... 63
Additional Information........................................ 63
Index to Financial Statements................................. F-1
</TABLE>
-------------------
UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES, WHETHER OR NOT
PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS.
THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN
ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR
SUBSCRIPTIONS.
2,000,000 SHARES
[COMPANY LOGO]
Pharmaceuticals, Inc.
COMMON STOCK
--------------
PROSPECTUS
--------------
OPPENHEIMER & CO., INC.
VECTOR SECURITIES INTERNATIONAL, INC.
, 1996
- ------------------------------------------------
------------------------------------------------
- ------------------------------------------------
------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized statement of the estimated amounts of all
expenses payable by the Registrant in connection with the registration of the
Common Stock offered hereby, other than underwriting discounts and commissions:
<TABLE>
<S> <C>
Registration Fee--Securities and Exchange Commission.............. $ 9,061
NASD Filing Fee................................................... 3,490
Blue Sky fees and expenses........................................ *
Accountants' fees and expenses.................................... *
Legal fees and expenses........................................... *
Printing and engraving expenses................................... *
Transfer agent and registrar fees................................. *
Miscellaneous..................................................... *
---------
Total................................................. $ *
---------
---------
</TABLE>
- ------------------------
* To be completed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145(a) of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a Delaware corporation may indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or enterprise,
against expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no cause to believe his conduct was unlawful.
Section 145(b) of the DGCL provides that a Delaware corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses actually
and reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted under similar standards, except that no
indemnification may be made in respect of any claim, issue or matter as to which
such person shall have been adjudged to be liable to the corporation unless and
only to the extent that the court in which such action or suit was brought shall
determine that despite the adjudication of liability, such person is fairly and
reasonably entitled to be indemnified for such expenses which the court shall
deem proper.
Section 145 of the DGCL further provides that to the extent a director or
officer of a corporation has been successful in the defense of any action, suit
or proceeding referred to in subsections (a) and (b) or in the defense of any
claim, issue, or matter therein, he shall be indemnified against expenses
actually and reasonably incurred by him in connection therewith; that
indemnification provided for by Section 145 shall not be deemed exclusive of any
other rights to which the indemnified party may be entitled; and that the
corporation may purchase and maintain insurance on behalf of a director or
officer of the corporation against any liability asserted against him or
incurred by him in any such capacity or arising out of his status
II-1
<PAGE>
as such whether or not the corporation would have the power to indemnify him
against such liabilities under such Section 145.
Section 102(b)(7) of the DGCL provides that a corporation in its original
certificate of incorporation or an amendment thereto validly approved by
stockholders may eliminate or limit personal liability of members of its board
of directors or governing body for breach of a director's fiduciary duty.
However, no such provision may eliminate or limit the liability of a director
for breaching his duty of loyalty, failing to act in good faith, engaging in
intentional misconduct or knowingly violating a law, paying a dividend or
approving a stock repurchase which was illegal, or obtaining an improper
personal benefit. A provision of this type has no effect on the availability of
equitable remedies, such as injunction or rescission, for breach of fiduciary
duty. The Company's Restated Certificate of Incorporation contains such a
provision.
The Company's Certificate of Incorporation and By-Laws provide that the
Company shall indemnify officers and directors, and to the extent authorized by
the Board of Directors, employees and agents of the Company, to the full extent
permitted by and in the manner permissible under the laws of the State of
Delaware. In addition, the By-Laws permit the Board of Directors to authorize
the Company to purchase and maintain insurance against any liability asserted
against any director, officer, employee or agent of the Company arising out of
his capacity as such.
The Company has entered into Indemnification Agreements with each of its
officers and directors, pursuant to which the Company has agreed to indemnify
and advance expenses to such officers and directors to the fullest extent
permitted by applicable law.
The Company has obtained an insurance policy providing coverage for certain
liabilities of its officers and directors.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES
Since January 1, 1993, the registrant has sold the following securities that
were not registered under the Securities Act:
From January 1993 through August 1993, the registrant issued a total of
272,270 shares of Series B Preferred Stock, $.001 par value per share, and
warrants to purchase 272,270 shares of Series B Preferred Stock, to 33
individuals and entities for an aggregate purchase price of $1,089,080 in cash.
Such transaction was exempt from registration under the Securities Act by virtue
of Section 4(2) thereof.
In September 1993 and October 1993, the registrant issued a total of 562,500
shares of Series B Preferred Stock, and warrants to purchase 562,500 shares of
Series B Preferred Stock, to 3 entities for an aggregate purchase price of
$2,250,000. Such transaction was exempt from registration under the Securities
Act by virtue of Section 4(2) thereof.
In February 1994, the registrant issued a total of 719,310 shares of Series
B Preferred Stock to 22 individuals and entities for an aggregate purchase price
of $3,596,550 in cash. Such transaction was exempt from registration under the
Securities Act by virtue of Section 4(2) thereof.
In November 1995 and December 1995, the registrant issued a total of 424,184
shares of Series C Preferred Stock, $.001 par value per share, and warrants to
purchase 106,046 shares of Series C Preferred Stock, to 7 individuals and
entities, for an aggregate purchase price of $897,249 in cash and conversion of
a note payable in the principal amount of $1,200,000 plus accrued interest
thereon of $23,671. Such transaction was exempt from registration under the
Securities Act by virtue of Section 4(2) thereof.
In December 1995, the registrant issued 45,000 shares of Common Stock,
$.0013 par value per share, to an entity as partial consideration for a license
agreement. Such transaction was exempt from registration under the Securities
Act by virtue of Section 4(2) thereof.
II-2
<PAGE>
In January 1996 and February 1996, the registrant issued a total of 964,812
shares of Series C Preferred Stock, and warrants to purchase 241,203 shares of
Series C Preferred Stock, to 59 individuals and entities for an aggregate
purchase price of $4,824,060 in cash. Such transaction was exempt from
registration under the Securities Act by virtue of Section 4(2) thereof.
From January 1, 1993 to June 30, 1996, the Company issued options to
purchase 1,549,163 shares of Common Stock (of which options to purchase 56,250
shares of Common Stock subsequently have been cancelled) to employees and
consultants of the Company pursuant to the 1989 Option Plan, the 1993 Option
Plan and the 1993 Executive Option Plan. None of such options has been
exercised. The Company believes that the transactions described in this
paragraph were exempt from the registration requirements of the Securities Act
under Section 4(2) of the Securities Act or Regulation D, or by reason of Rule
701 promulgated under the Securities Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits
<TABLE>
<C> <S>
1.1 --Form of Underwriting Agreement
*3.1 --Certificate of Incorporation, as amended, of the Registrant
3.2 --By-Laws of the Registrant
*4.1 --Specimen Certificate for Common Stock, $0.0013 par value per share, of the
Registrant
*5.1 --Opinion of Dewey Ballantine
10.1 --Form of Registration Rights Agreement
10.2 --1989 Non-Qualified Stock Option Plan
10.3 --1993 Stock Option Plan, as amended
10.4 --1993 Executive Stock Option Plan
10.5 --1996 Stock Incentive Plan
10.6 --Form of Indemnification Agreement
10.7 --Employment Agreement dated December 15, 1993 between the Registrant and Dr. Paul
J. Maddon
10.8 --Employment Agreement dated August 25, 1994 between the Registrant and Dr. Robert
J. Israel
10.9 --Sublease dated July 13, 1988 between the Registrant and Union Carbide Corporation
+10.10 --gp120 Supply Agreement dated July 19, 1995 between the Registrant and E. I. DuPont
De Nemours and Company, as amended October 27, 1995
+10.11 --sCD4 Supply Agreement dated June 27, 1995 between the Registrant and E. I. DuPont
De Nemours and Company
+10.12 --Supply Agreement dated February 8, 1996 between the Registrant and Intracel
Corporation
+10.13 --License Agreement dated November 17, 1994 between the Registrant and
Sloan-Kettering Institute for Cancer Research
+10.14 --Clinical Trial Agreement dated December 12, 1994 between the Registrant and
Sloan-Kettering Institute for Cancer Research
+10.15 --QS-21 License and Supply Agreement dated August 31, 1995 between the Registrant
and Cambridge Biotech Corporation
+10.16 --gp120 Sublicense Agreement dated March 17, 1995 between the Registrant and
Cambridge Biotech Corporation
+10.17 --Cooperative Research and Development Agreement dated February 25, 1993 between the
Registrant and the Centers for Disease Control and Prevention
*10.18 --License Agreement dated , 1996 between the Registrant and the Trustees
of Columbia University
+10.19 --License Agreement dated June 25, 1996 between the Registrant and The Regents of
the University of California
+10.20 --KLH Supply Agreement dated July 1, 1996 between the Registrant and PerImmune, Inc.
</TABLE>
II-3
<PAGE>
<TABLE>
<C> <S>
+10.21 --sCD4 Supply Agreement dated November 3, 1993 between the Registrant and E.I.
DuPont De Nemours and Company
*10.22 --Lease dated June 30, 1994 between the Registrant and Keren Limited Partnership
11.1 --Statement of computation of loss per share for the years ended December 31, 1993,
1994 and 1995
11.2 --Statement of computation of loss per share for the six months ended June 30, 1995
and 1996
11.3 --Pro forma statement of computation of loss per share
23.1 --Consent of Coopers & Lybrand L.L.P.
*23.2 --Consent of Dewey Ballantine (contained in Exhibit 5.1)
24.1 --Power of Attorney (included on page II-5)
27.1 --Financial Data Schedule
</TABLE>
- ------------------------
* To be filed by amendment.
+ Confidential treatment requested as to certain portions, which portions are
omitted and filed separately with the Commission.
(b) Financial Statement Schedules
All schedules have been omitted because they are not required or because the
required information is given in the Financial Statements or Notes thereto.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes to provide to the underwriters,
at the closing specified in the underwriting agreement, certificates in such
denominations and registered in such names as required by the underwriters to
permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4)
or 497(h) under the Securities Act shall be deemed to be part of this
registration statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Tarrytown, State of New
York, on October 7, 1996.
PROGENICS PHARMACEUTICALS, INC.
BY: /S/ PAUL J. MADDON, M.D., PH.D.
-----------------------------------------
Paul J. Maddon, M.D., Ph.D.
Chairman of the Board,
Chief Executive Officer and President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each person whose signature appears
below constitutes and appoints Paul J. Maddon, M.D., Ph.D. and Robert A.
McKinney his true and lawful attorneys-in-fact and agents, each acting alone,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign the Registration Statement
filed herewith and any and all amendments (including any post-effective
amendments) to this Registration Statement, or any other registration statement
for the same Offering that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, and generally to do all such things in
his name and in all capacities to enable Progenics Pharmaceuticals, Inc. to
comply with the provisions of the Securities Act of 1933 and all requirements of
the Securities and Exchange Commission, hereby ratifying and confirming his
signature as it may be signed by said attorneys, or either of them, to said
Registration Statement and any and all amendments (including any post-effective
amendments) thereto (or any other Registration Statement for the same Offering
that is to be effective upon filing pursuant to Rule 462(b) under the Securities
Act of 1933.
II-5
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
/s/ PAUL J. MADDON, M.D., Chairman of the Board,
PH.D. Chief Executive Officer
- ------------------------------ and President (principal October 7, 1996
Paul J. Maddon, M.D., Ph.D. executive officer)
Vice President, Finance and
/s/ ROBERT A. MCKINNEY Operations, Treasurer
- ------------------------------ (principal accounting and October 7, 1996
Robert A. McKinney financial officer)
/s/ CHARLES A. BAKER Director
- ------------------------------ October 7, 1996
Charles A. Baker
/s/ MARK F. DALTON Director
- ------------------------------ October 7, 1996
Mark F. Dalton
/s/ STEPHEN P. GOFF, PH.D. Director
- ------------------------------ October 7, 1996
Stephen P. Goff, Ph.D.
/s/ ELIZABETH M. GREETHAM Director
- ------------------------------ October 7, 1996
Elizabeth M. Greetham
/s/ PAUL F. JACOBSON Director
- ------------------------------ October 7, 1996
Paul F. Jacobson
/s/ DAVID A. SCHEINBERG, M.D., Director
PH.D.
- ------------------------------ October 7, 1996
David A. Scheinberg, M.D.,
Ph.D.
II-6
<PAGE>
H&D DRAFT
9/25/96
2,000,000 Shares
PROGENICS PHARMACEUTICALS, INC.
Common Stock
UNDERWRITING AGREEMENT
, 1996
Oppenheimer & Co., Inc.
Vector Securities International, Inc.
c/o Oppenheimer & Co., Inc.
Oppenheimer Tower
World Financial Center
New York, New York 10281
On behalf of the Several Underwriters
named on Schedule I attached hereto
Ladies and Gentlemen:
Progenics Pharmaceuticals, Inc., a Delaware corporation (the
"Company"), proposes to sell to you and the other underwriters
named on Schedule I to this Agreement (the "Underwriters"), for
whom you are acting as Representatives, an aggregate of 2,000,000
shares (the "Firm Shares") of the Company's Common Stock, $0.001
par value (the "Common Stock"). In addition, the Company proposes
to grant to the Underwriters an option to purchase up to an
additional 300,000 shares (the "Option Shares") of Common Stock
from it for the purpose of covering over-allotments in connection
with the sale of the Firm Shares. The Firm Shares and the Option
Shares are together called the "Shares."
1. SALE AND PURCHASE OF THE SHARES. On the basis of the
representations, warranties and agreements contained in, and
subject to the terms and conditions of, this Agreement:
(a) The Company agrees to sell to each of the
Underwriters, and each of the Underwriters agrees, severally
and not jointly, to purchase from the Company, at $ per
share (the "Initial Price"), the number of Firm Shares set
forth opposite the name of such Underwriter on Schedule I to
this Agreement.
<PAGE>
(b) The Company grants to the several Underwriters an
option to purchase, severally and not jointly, all or any
part of the Option Shares at the Initial Price. The number
of Option Shares to be purchased by each Underwriter shall be
the same percentage (adjusted by the Representatives to
eliminate fractions) of the total number of Option Shares to
be purchased by the Underwriters as such Underwriter is
purchasing of the Firm Shares. Such option may be exercised
only to cover over-allotments in the sales of the Firm Shares
by the Underwriters and may be exercised in whole or in part
at any time on or before 12:00 noon, New York City time, on
the business day before the Firm Shares Closing Date (as
defined below), and only once thereafter within 30 days after
the date of this Agreement, in each case upon written or
telegraphic notice, or verbal or telephonic notice confirmed
by written or telegraphic notice, by the Representatives to
the Company no later than 12:00 noon, New York City time, on
the business day before the Firm Shares Closing Date or at
least two business days before the Option Shares Closing Date
(as defined below), as the case may be, setting forth the
number of Option Shares to be purchased and the time and date
(if other than the Firm Shares Closing Date) of such
purchase.
2. DELIVERY AND PAYMENT. Delivery by the Company of the
Firm Shares to the Representatives for the respective accounts of
the Underwriters, and payment of the purchase price by certified
or official bank check or checks payable in New York Clearing
House (next day) funds to the Company, shall take place at the
offices of Dewey Ballantine, 1301 Avenue of the Americas, New
York, New York 10019, at 10:00 a.m., New York City time, on the
third business day following the date of this Agreement, or at
such time on such other date, not later than 10 business days
after the date of this Agreement, as shall be agreed upon by the
Company and the Representatives (such time and date of delivery
and payment are called the "Firm Shares Closing Date").
In the event the option with respect to the Option Shares is
exercised, delivery by the Company of the Option Shares to the
Representatives for the respective accounts of the Underwriters
and payment of the purchase price by certified or official bank
check or checks payable in New York Clearing House (next day)
funds to the Company shall take place at the offices of Dewey
Ballantine specified above at the time and on the date (which may
be the same date as, but in no event shall be earlier than, the
Firm Shares Closing Date) specified in the notice referred to in
Section 1(b) (such time and date of delivery and payment are
called the "Option Shares Closing Date"). The Firm Shares Closing
Date and the Option Shares Closing Date are called, individually,
a "Closing Date" and, together, the "Closing Dates."
-2-
<PAGE>
Certificates evidencing the Shares shall be registered in
such names and shall be in such denominations as the
Representatives shall request at least two full business days
before the Firm Shares Closing Date or, in the case of Option
Shares, on the day of notice of exercise of the option as
described in Section 1(b) and shall be made available to the
Representatives for checking and packaging, at such place as is
designated by the Representatives, on the full business day before
the Firm Shares Closing Date (or the Option Shares Closing Date in
the case of the Option Shares).
3. REGISTRATION STATEMENT AND PROSPECTUS: PUBLIC OFFERING. The
Company has prepared in conformity with the requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the published
rules and regulations thereunder (the "Rules") adopted by the Securities and
Exchange Commission (the "Commission") a registration statement on
Form S-1 (No. 333- ), including a preliminary prospectus relating to the
Shares, and has filed with the Commission the Registration Statement
(as hereinafter defined) and such amendments thereof as may have been
required to the date of this Agreement. Copies of such Registration Statement
(including all amendments thereof) and of the related preliminary prospectus
have heretofore been delivered by the Company to you. The term "preliminary
prospectus" means any preliminary prospectus (as described in Rule 430 of the
Rules) included at any time as a part of the Registration Statement.
The Registration Statement as amended at the time and on the date it becomes
effective (the "Effective Date"), including all exhibits and information,
if any, deemed to be part of the Registration Statement pursuant to Rule 424(b)
and Rule 430A of the Rules, together with any registration statement
for the same offering filed by the Company that is to be effective
upon filing pursuant to Rule 462(b) of the Securities Act, is
called the "Registration Statement." The term "Prospectus" means
the prospectus in the form first used to confirm sales of the
Shares (whether such prospectus was included in the Registration
Statement at the time of effectiveness or was subsequently filed
with the Commission pursuant to Rule 424(b) of the Rules).
The Company understands that the Underwriters propose to make
a public offering of the Shares, as set forth in and pursuant to
the Prospectus, as soon after the Effective Date and the date of
this Agreement as the Representatives deem advisable. The Company
hereby confirms that the Underwriters and dealers have been
authorized to distribute or cause to be distributed each
preliminary prospectus and are authorized to distribute the
Prospectus (as from time to time amended or supplemented if the
Company furnishes amendments or supplements thereto to the
Underwriters).
-3-
<PAGE>
4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to each Underwriter as follows:
(a) On the Effective Date the Registration Statement complied, and
on the date of the Prospectus, on the date any post-effective amendment
to the Registration Statement shall become effective, on the date any
supplement or amendment to the Prospectus is filed with the Commission
and on each Closing Date, the Registration Statement and the Prospectus
(and any amendment thereof or supplement thereto) will comply, in all
material respects, with the applicable provisions of the Securities Act
and the Rules and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations of the Commission
thereunder; the Registration Statement did not, as of the Effective Date,
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; and on the other dates referred to
above neither the Registration Statement nor the Prospectus, nor
any amendment thereof or supplement thereto, will contain any untrue
statement of a material fact or will omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein not misleading. When any related preliminary prospectus was first
filed with the Commission (whether filed as part of the Registration
Statement or any amendment thereto or pursuant to Rule 424(a) of the Rules)
and when any amendment thereof or supplement thereto was first filed with
the Commission, such preliminary prospectus as amended or supplemented
complied in all material respects with the applicable provisions of the
Securities Act and the Rules and did not contain any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein
not misleading. Notwithstanding the foregoing, the Company makes no
representation or warranty as to the last paragraph on the cover page of
the Prospectus, the paragraph with respect to stabilization on
the inside front cover page of the Prospectus and the concession and
reallowance figures appearing under the caption "Underwriting" in the
Prospectus. The Company acknowledges that the statements referred to in
the previous sentence constitute the only information furnished in writing
by the Representatives on behalf of the Underwriters specifically for
inclusion in the Registration Statement, any preliminary prospectus
or the Prospectus.
-4-
<PAGE>
(b) All contracts and other documents required to be
filed as exhibits to the Registration Statement have been
filed with the Commission as exhibits to the Registration
Statement.
(c) The financial statements of the Company (including
all notes and schedules thereto) included in the Registration
Statement and Prospectus present fairly the financial
position, results of operations and cash flows and the
stockholders' equity and the other information purported to
be shown therein of the Company at the respective dates and
for the respective periods to which they apply; and such
financial statements have been prepared in conformity with
generally accepted accounting principles, consistently
applied throughout the periods involved, and all adjustments
necessary for a fair presentation of the results for such
periods have been made; PROVIDED, HOWEVER, that the interim
financial statements contained in the Registration Statement
and Prospectus shall be subject to normal year-end
adjustments in accordance with generally accepted accounting
principles.
(d) Coopers & Lybrand LLP, whose reports are filed with
the Commission as a part of the Registration Statement, are
and, during the periods covered by their reports, were
independent public accountants as required by the Securities
Act and the Rules.
(e) The Company has been duly incorporated and is
validly existing as a corporation in good standing under the
laws of the State of Delaware. The Company has no
subsidiaries and does not control, directly or indirectly,
any corporation, partnership, joint venture, association or
business. The Company is duly qualified and in good standing
as a foreign corporation in each jurisdiction in which the
character or location of its assets or properties (owned,
leased or licensed) or the nature of its business makes such
qualification necessary except for such jurisdictions where
the failure to so qualify would not have a material adverse
effect on the assets or properties, business, results of
operations or financial condition of the Company. Except as
disclosed in the Registration Statement and the Prospectus,
the Company does not own, lease or license any asset or
property or conduct any business outside the United States of
America. The Company has all requisite corporate power and
authority, and all necessary authorizations, approvals,
consents, orders, licenses, certificates and permits of and
from all governmental or regulatory bodies or any other
person or entity, to own, lease and license its assets and
properties and conduct its businesses as now being conducted
-5-
<PAGE>
and as described in the Registration Statement and the
Prospectus except for such authorizations, approvals,
consents, orders, material licenses, certificates and permits
the failure to so obtain would not have a material adverse
effect upon the assets or properties, business, results of
operations, prospects or condition (financial or otherwise)
of the Company; no such authorization, approval, consent,
order, license, certificate or permit contains a materially
burdensome restriction other than as disclosed in the
Registration Statement and the Prospectus; and the Company
has all such corporate power and authority, and such
authorizations, approvals, consents, orders, licenses,
certificates and permits to enter into, deliver and perform
this Agreement and to issue and sell the Shares (except as
may be required under state and foreign Blue Sky laws). To
the Company's knowledge, all of the properties now or
formerly owned or leased by the Company or any subsidiary,
all research and manufacturing operations conducted thereon
(including discharges and emissions therefrom) and all
research and manufacturing equipment now or formerly used at
said properties, have been and are in compliance with all
Federal, state, local and foreign statutes, ordinances,
regulations, rules and standards concerning or relating to
industrial hygiene and the protection of health, safety,
welfare and the environment (collectively, "the Environmental
Laws"), except to the extent that any failure to be in
compliance, singly or in the aggregate, would not have a
material adverse effect upon the assets or properties,
business, results of operations, prospects or condition
(financial or otherwise) of the Company. The Company has not
received notice, and does not have knowledge, of any claim,
demand, investigation, regulatory action, suit or other
action instituted or threatened against it or said property
relating to any of the Environmental Laws.
(f) The Company has filed with the U.S. Food and Drug
Administration (the "FDA"), and all applicable foreign, state
and local regulatory bodies for, and received approval of,
all registrations, applications, licenses, requests for
exemptions, permits and other regulatory authorizations
material to the conduct of the Company's business as it is
now conducted; the Company is in compliance in all material
respects with all such registrations, applications, licenses,
requests for exemptions, permits and other regulatory
authorizations, and all applicable FDA, foreign, state and
local rules and regulations; the Company has no reason to
believe that any party granting any such registration,
application, license, request for exemption, permit or other
authorization is considering limiting, suspending or revoking
the same.
-6-
<PAGE>
(g) The human clinical trials, animal studies and other
preclinical tests conducted by the Company or in which the Company has
participated that are described in the Registration Statement and
Prospectus or the results of which are referred to in the Registration
Statement or Prospectus, and such studies and tests conducted on behalf
of the Company (including but not limited to studies and tests conducted
under institutional INDs filed by Memorial Sloan-Kettering Cancer Center
("Sloan-Kettering"), were and, if still pending, are being conducted in
all material respects in accordance with experimental protocols, procedures
and controls generally used by qualified experts in the preclinical or
clinical study of products comparable to those being developed by the
Company; the descriptions of the results of such studies, tests and trials
contained in the Registration Statement and Prospectus are accurate and
complete in all material respects, and the Company has no knowledge of any
other trials, studies or tests, the results of which reasonably call into
question the results described or referred to in the Registration Statement
and Prospectus; the Company has not received any notices or correspondence
from the FDA or any other governmental agency requiring the termination,
suspension or modification (other than such modifications as are normal in
the regulatory process) of any animal studies, preclinical tests or
clinical trials conducted by or on behalf of the Company (including but not
limited to studies and tests conducted under institutional INDs filed by
Sloan-Kettering) or in which the Company has participated that are
described in the Registration Statement or Prospectus or the results of
which are referred to in the Registration Statement or Prospectus.
(h) The Company owns or possesses adequate and
enforceable rights to use all patents, patent applications,
trademarks, trademark applications, trade names, service
marks, copyrights, copyright applications, licenses,
know-how, proprietary techniques, including processes and
substances, and other similar rights and proprietary
knowledge (collectively, "Intangibles") necessary for the
conduct of its business as described in the Registration
Statement and the Prospectus. The Company has not received
any notice of, and to its best knowledge is not aware of, any
infringement of or conflict with asserted rights of others
with respect to any Intangibles which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling
or finding, would have a material adverse effect upon the
assets or properties, business, results of operations,
prospects or condition (financial or otherwise) of the
Company. The Company is not aware of any infringement of any
of the Company's Intangibles by any third party which could
-7-
<PAGE>
have a material adverse effect upon the assets or properties,
business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(i) The Company has good title to each of the items of
personal property which are reflected in the financial
statements referred to in Section 4(c) or are referred to in
the Registration Statement and the Prospectus as being owned
by it and valid and enforceable leasehold interests in each
of the items of real and personal property which are referred
to in the Registration Statement and the Prospectus as being
leased by it, in each case free and clear of all liens,
encumbrances, claims, security interests and defects, other
than those described in the Registration Statement and the
Prospectus and those which do not and will not have a
material adverse effect upon the assets or properties,
business, results of operations or financial condition of the
Company.
(j) There is no litigation or governmental or other
proceeding or investigation before any court or before or by
any public body or board pending or, to the Company's best
knowledge, threatened (and the Company does not know of any
basis therefor) against, or involving the assets, properties
or business of, the Company which, if determined adversely to
the Company, would materially adversely affect the value or
the operation of any such assets or properties or the
business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(k) Subsequent to the respective dates as of which
information is given in the Registration Statement and the
Prospectus, except as described therein, (i) there has not
been any material adverse change in the assets or properties,
business, results of operations, prospects or condition
(financial or otherwise), of the Company, whether or not
arising from transactions in the ordinary course of business;
(ii) the Company has not sustained any material loss or
interference with its assets, businesses or properties
(whether owned or leased) from fire, explosion, earthquake,
flood or other calamity, whether or not covered by insurance,
or from any labor dispute or any court or legislative or
other governmental action, order or decree; and (iii) since
the date of the latest balance sheet included in the
Registration Statement and the Prospectus, except as
reflected in the Registration Statement or the Prospectus,
the Company has not (a) issued any securities or incurred any
liability or obligation, direct or contingent, for borrowed
money, except such liabilities or obligations incurred in the
ordinary course of business, (b) entered into any transaction
-8-
<PAGE>
not in the ordinary course of business or (c) declared or
paid any dividend or made any distribution on any shares of
its stock or redeemed, purchased or otherwise acquired or
agreed to redeem, purchase or otherwise acquire any shares of
its stock.
(l) There is no document or contract of a character
required to be described in the Registration Statement or
Prospectus or to be filed as an exhibit to the Registration
Statement which is not described or filed as required. Each
agreement listed in the exhibits to the Registration
Statement is in full force and effect and is valid and
enforceable by and against the Company in accordance with its
terms, assuming the due authorization, execution and delivery
thereof by each of the other parties thereto. Neither the
Company, nor, to the best of the Company's knowledge, any
other party is in default in the observance or performance of
any term or obligation to be performed by it under any such
agreement, and no event has occurred which with notice or
lapse of time or both would constitute such a default, in any
such case which default or event would have a material
adverse effect on the assets or properties, business, results
of operations, prospects or condition (financial or
otherwise) of the Company. No default exists, and no event
has occurred which with notice or lapse of time or both would
constitute a default, in the due performance and observance
of any term, covenant or condition, by the Company of any
other agreement or instrument to which the Company is a party
or by which it or its properties or business may be bound or
affected which default or event would have a material adverse
effect on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise)
of the Company.
(m) The Company is not in violation of any term or
provision of its charter or by-laws or of any franchise,
license, permit, judgment, decree, order, statute, rule or
regulation, where the consequences of such violation would
have a material adverse effect on the assets or properties,
business, results of operations, prospects or condition
(financial or otherwise) of the Company.
(n) Neither the execution, delivery and performance of
this Agreement by the Company nor the consummation of any of
the transactions contemplated hereby (including, without
limitation, the issuance and sale by the Company of the
Shares) will give rise to a right to terminate or accelerate
the due date of any payment due under, or conflict with or
result in the breach of any term or provision of, or
constitute a default (or an event which with notice or lapse
-9-
<PAGE>
of time or both would constitute a default) under, or require
any consent or waiver under, or result in the execution or
imposition of any lien, charge or encumbrance upon any
properties or assets of the Company pursuant to the terms of,
any indenture, mortgage, deed of trust or other agreement or
instrument to which the Company is a party or by which it or
any of its properties or businesses is bound, or any
franchise, license, permit, judgment, decree, order, statute,
rule or regulation applicable to the Company or violate any
provision of the charter or by-laws of the Company, except
for such consents or waivers which have already been obtained
and are in full force and effect.
(o) The Company has an authorized and outstanding
capital stock as set forth under the caption "Capitalization"
in the Prospectus. All of the outstanding shares of Common
Stock have been duly and validly issued and are fully paid
and nonassessable and none of them was issued in violation of
any preemptive or other similar right. The Shares, when
issued and sold pursuant to this Agreement, will be duly and
validly issued, fully paid and nonassessable and none of them
will be issued in violation of any preemptive or other
similar right. Except as disclosed in the Registration
Statement and the Prospectus, there is no outstanding option,
warrant or other right calling for the issuance of, and there
is no commitment, plan or arrangement to issue, any share of
stock of the Company or any security convertible into, or
exercisable or exchangeable for, such stock. The Common
Stock and the Shares conform in all material respects to all
statements in relation thereto contained in the Registration
Statement and the Prospectus.
(p) No holder of any security of the Company has the
right to have any security owned by such holder included in
the Registration Statement or to demand registration of any
security owned by such holder during the period ending 180
days after the date of this Agreement. The directors and
executive officers of the Company, and other stockholders of
the Company who beneficially own, in the aggregate,
shares of Common Stock have each delivered to the
Representatives his enforceable written agreement that he
will not, for a period of 180 days after the date of this
Agreement, offer for sale, sell, distribute, grant any option
for the sale of, or otherwise dispose of, directly or
indirectly, or exercise any registration rights with respect
to, any shares of Common Stock (or any securities convertible
into, exercisable for, or exchangeable for any shares of
Common Stock) owned by him, without the prior written consent
of the Representatives.
-10-
<PAGE>
(q) All necessary corporate action has been duly and
validly taken by the Company to authorize the execution,
delivery and performance of this Agreement and the issuance
and sale of the Shares by the Company. This Agreement has
been duly and validly authorized, executed and delivered by
the Company and constitutes the legal, valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, except (A) as the enforceability
thereof may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and by general
equitable principles and (B) to the extent that rights to
indemnity or contribution under this Agreement may be limited
by Federal and state securities laws or the public policy
underlying such laws.
(r) The Company is not involved in any labor dispute
nor, to the knowledge of the Company, is any such dispute
threatened, which dispute would have a material adverse
effect on the assets or properties, business, results of
operations, prospects or condition (financial or otherwise)
of the Company.
(s) No transaction has occurred between or among the
Company and any of its officers or directors or any affiliate
or affiliates of any such officer or director that is
required to be described in and is not described in the
Registration Statement and the Prospectus.
(t) The Company has not taken, nor will it take,
directly or indirectly, any action designed to or which might
reasonably be expected to cause or result in, or which has
constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of
the Common Stock to facilitate the sale or resale of any of
the Shares.
(u) The Company has filed all Federal, state, local and
foreign tax returns which are required to be filed by it
through the date hereof, or has received extensions thereof,
and has paid all taxes shown on such returns and all
assessments received by it to the extent that the same are
material and have become due.
(v) The Shares have been duly authorized for quotation
on Nasdaq National Market.
(w) The Company has complied with all of the
requirements and filed the required forms as specified in
Florida Statutes Section 517.075.
-11-
<PAGE>
5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters under this Agreement are several
and not joint. The respective obligations of the Underwriters to
purchase the Shares are subject to each of the following terms and
conditions:
(a) The Prospectus shall have been timely filed with
the Commission in accordance with Section 6(A)(a) of this
Agreement.
(b) No order preventing or suspending the use of any
preliminary prospectus or the Prospectus shall have been or
shall be in effect and no order suspending the effectiveness
of the Registration Statement shall be in effect and no
proceedings for such purpose shall be pending before or
threatened by the Commission, and any requests for additional
information on the part of the Commission (to be included in
the Registration Statement or the Prospectus or otherwise)
shall have been complied with to the satisfaction of the
Representatives.
(c) The representations and warranties of the Company
contained in this Agreement and in the certificates delivered
pursuant to Section 5(d) shall be true and correct when made
and on and as of each Closing Date as if made on such date
and the Company shall have performed all covenants and
agreements and satisfied all the conditions contained in this
Agreement required to be performed or satisfied by it at or
before such Closing Date.
(d) The Representatives shall have received on each
Closing Date a certificate, addressed to the Representatives
and dated such Closing Date, of the chief executive or chief
operating officer and the chief financial officer or chief
accounting officer of the Company to the effect that the
signers of such certificate have carefully examined the
Registration Statement, the Prospectus and this Agreement and
that the representations and warranties of the Company in
this Agreement are true and correct on and as of such Closing
Date with the same effect as if made on such Closing Date and
the Company has performed all covenants and agreements and
satisfied all conditions contained in this Agreement required
to be performed or satisfied by it at or prior to such
Closing Date.
(e) The Representatives shall have received on the
Effective Date, at the time this Agreement is executed and on
each Closing Date a signed letter from Coopers & Lybrand LLP
addressed to the Representatives and dated, respectively, the
Effective Date, the date of this Agreement and each such
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<PAGE>
Closing Date, in form and substance reasonably satisfactory
to the Representatives.
(f) The Representatives shall have received on each
Closing Date from Dewey Ballantine, counsel for the Company,
an opinion, addressed to the Representatives and dated such
Closing Date, and stating in effect that:
(i) The Company has been duly organized and is
validly existing as a corporation in good standing under
the laws of the State of Delaware. The Company is duly
qualified and in good standing as a foreign corporation
in each jurisdiction in which the character or location
of its assets or properties (owned, leased or licensed)
or the nature of its businesses makes such qualification
necessary, except for such jurisdictions where the
failure to so qualify would not have a material adverse
effect on the assets or properties, business, results of
operations, prospects or condition (financial or
otherwise) of the Company.
(ii) The Company has all requisite corporate power
and authority to own, lease and license its assets and
properties and conduct its business as now being
conducted and as described in the Registration Statement
and the Prospectus; and the Company has all requisite
corporate power and authority and all necessary
authorizations, approvals, consents, orders, licenses,
certificates and permits to enter into, deliver and
perform this Agreement and to issue and sell the Shares
other than those required under state and foreign Blue
Sky laws.
(iii) The authorized and issued capital stock of
the Company is as set forth in the Registration
Statement and the Prospectus; the certificates
evidencing the Shares are in due and proper legal form
and have been duly authorized for issuance by the
Company; all of the outstanding shares of Common Stock
of the Company have been duly and validly authorized and
have been duly and validly issued and are fully paid and
nonassessable and none of them was issued in violation
of any preemptive or other similar right. The Shares
when issued and sold pursuant to this Agreement will be
duly and validly issued, outstanding, fully paid and
nonassessable and none of them will have been issued in
violation of any preemptive or other similar right. To
the best of such counsel's knowledge, except as
disclosed in the Registration Statement and the
Prospectus, there is no outstanding option, warrant or
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<PAGE>
other right calling for the issuance of, and no
commitment, plan or arrangement to issue, any share of
stock of the Company or any security convertible into,
exercisable for, or exchangeable for stock of the
Company. The Common Stock and the Shares conform in all
material respects to the descriptions thereof contained
in the Registration Statement and the Prospectus.
(iv) To the best of such counsel's knowledge, no
holder of any security of the Company has the right to
have any security owned by such holder included in the
Registration Statement or, except as described in the
Registration Statement, to demand registration of any
security during the period ending 180 days after the
Effective Date.
(v) All necessary corporate action has been duly
and validly taken by the Company to authorize the
execution, delivery and performance of this Agreement
and the issuance and sale of the Shares. This Agreement
has been duly and validly authorized, executed and
delivered by the Company.
(vi) Neither the execution, delivery and
performance of this Agreement by the Company nor the
consummation of any of the transactions contemplated
hereby (including, without limitation, the issuance and
sale by the Company of the Shares) will give rise to a
right to terminate or accelerate the due date of any
payment due under, or conflict with or result in the
breach of any term or provision of, or constitute a
default (or any event which with notice or lapse of
time, or both, would constitute a default) under, or
require consent or waiver under, or result in the
execution or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company
pursuant to the terms of any indenture, mortgage, deed
of trust, note or other agreement or instrument known to
such counsel and to which the Company is a party or by
which it or any of its properties or businesses is
bound, or any franchise, license, permit, judgment,
decree, order, statute, rule or regulation known to such
counsel or violate any provision of the charter or
by-laws of the Company.
(vii) No consent, approval, authorization or order
of any court or governmental agency or body is required
for the performance of this Agreement by the Company or
the consummation of the transactions contemplated
hereby, including without limitation the sale of the
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Shares, except such as have been obtained under the
Securities Act and such as may be required under state
securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the several
Underwriters.
(viii) To the best of such counsel's knowledge,
there is no litigation or governmental or other
proceeding or investigation, before any court or before
or by any public body or board pending or threatened
against, or involving the assets, properties or
businesses of, the Company which, if determined
adversely to the Company, would have a material adverse
effect upon the assets or properties, business, results
of operations, prospects or condition (financial or
otherwise) of the Company.
(ix) The statements in the Prospectus under the
captions "Risk Factors - Availability of Materials";
"Risk Factors - Dependence on Third Parties"; "Risk
Factors - Control by Existing Stockholders; Anti-
Takeover Provisions"; "Risk Factors - Future Sales of
Common Stock; Registration Rights; Possible Adverse
Effect on Future Market Price"; "Business - Licenses";
"Business - Research and Development Collaborations";
"Business - Government Grants"; "Certain Transactions";
"Description of Capital Stock"; and "Shares Eligible for
Future Sale", insofar as such statements constitute a
summary of documents referred to therein or matters of
law, are fair summaries in all material respects and
accurately present in all material respects the
information called for with respect to such documents
and matters. All contracts and other documents required
to be filed as exhibits to, or described in, the
Registration Statement have been so filed with the
Commission or are fairly described in the Registration
Statement, as the case may be.
(x) The Registration Statement, all preliminary
prospectuses and the Prospectus and each amendment or
supplement thereto (except for the financial statements
and schedules and other financial and statistical data
included therein, as to which such counsel need not
express an opinion) comply as to form in all material
respects with the requirements of the Securities Act and
the Rules.
(xi) The Registration Statement has become
effective under the Securities Act, and no stop order
suspending the effectiveness of the Registration
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Statement has been issued and no proceedings for that
purpose have been instituted or are threatened, pending
or contemplated.
To the extent deemed advisable by such counsel, they may rely
as to matters of fact on certificates of responsible officers of
the Company and public officials and on the opinions of other
counsel satisfactory to the Representatives as to matters which
are governed by laws other than the laws of the State of New York,
the General Corporation Law of the State of Delaware and the
Federal laws of the United States; provided that such counsel
shall state that in their opinion the Underwriters and they are
justified in relying on such other opinions. Copies of such
certificates and other opinions shall be furnished to the
Representatives and counsel for the Underwriters.
In addition, such counsel shall state that such counsel has
participated in conferences with officers and other
representatives of the Company, representatives of the
Representatives and representatives of the independent certified
public accountants of the Company, at which conferences the
contents of the Registration Statement and the Prospectus and
related matters were discussed and, although such counsel is not
passing upon and does not assume any responsibility for the
accuracy, completeness or fairness of the statements contained in
the Registration Statement and the Prospectus (except as specified
in the foregoing opinion), on the basis of the foregoing, no facts
have come to the attention of such counsel which lead such counsel
to believe that the Registration Statement at the time it became
effective (except with respect to the financial statements and
notes and schedules thereto and other financial data, as to which
such counsel need express no belief) contained any untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus as amended or
supplemented (except with respect to the financial statements and
notes and schedules thereto and other financial data, as to which
such counsel need make no statement) on the date thereof contained
any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading.
(g) The Representatives shall have received on each Closing
Date from Cooper & Dunham, patent counsel for the Company, an
opinion addressed to the Representatives and dated such Closing
Date, to the effect that such counsel is familiar with the
technology used by the Company in its business and has read the
portions of the Registration Statement and the Prospectus headed:
"Risk Factors - Dependence on and Uncertainty of Protection of
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Patents and Proprietary Rights" and "Business - Patents and
Proprietary Technology" (collectively, the "Technology Portion"),
such counsel consents to being named as an "Expert" in the
Registration Statement, and:
(i) such counsel has no knowledge of any facts which
would preclude the Company from having clear title to the
Company's patents or patent applications referenced in the
Technology Portion. To the best of such counsel's knowledge,
the Company does not lack and will not be unable to obtain
any rights or licenses to use any patent or know-how
necessary to conduct the business now conducted or proposed
to be conducted by the Company as described in the
Prospectus. To the best of such counsel's knowledge, the
Company has not received any notice of infringement or of
conflict with asserted rights of others with respect to any
patents, patent applications, trademarks, trademark
applications, trade names, service marks, copyrights,
copyright applications, licenses or know-how, proprietary
techniques, including processes and substances, and other
similar rights and proprietary knowledge which could result
in any material adverse effect upon the Company. Such
counsel is not aware of any patents of others which are
infringed by specific products or processes of the Company
referred to in the Prospectus in such manner as to materially
and adversely affect the Company;
(ii) to the best of such counsel's knowledge, there are
no legal or governmental proceedings pending relating to
trade secrets, trademarks, service marks or other proprietary
information or materials of the Company, other than review of
pending applications for patents, and to the best of such
counsel's knowledge no such proceedings are threatened or
contemplated by governmental authorities or others;
(iii) such counsel does not know of any material
contracts or other material documents relating to the
Company's proprietary information, other than those filed as
exhibits to the Registration Statement; and
(iv) the statements under the captions "Risk Factors -
Dependence on and Uncertainty of Protection of Patents and
Proprietary Rights" and "Business - Patents and Proprietary
Technology", insofar as such statements constitute a summary
of documents referred to therein or matters of law, are
accurate summaries and fairly and correctly present, in all
material respects, the information called for with respect to
such documents and matters and such counsel has no reason to
believe that the statements therein are untrue or that there
is an omission to state a material fact required to be stated
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<PAGE>
therein or necessary to make the statements therein not
misleading; provided, however, that such counsel may rely on
representations of the Company with respect to the factual
matters contained in such statements, provided that such
counsel shall state that nothing has come to the attention of
such counsel which leads them to believe that such
representations are not true and correct in all material
respects.
(h) The Representatives shall have received on each Closing
Date from , FDA counsel for the
Company, an opinion addressed to the Representatives and dated
such Closing Date, to the effect that such counsel has read the
portions of the Registration Statement and the Prospectus headed:
"Risk Factors - Government Regulation; No Assurance of Regulatory
Approval", "Risk Factors - Uncertainty Related to Health Care
Reform Measures and Reimbursement", "Business - Government
Regulation" and "Business - Product Liability" (collectively, the
"Regulatory Portion"), that the statements under such captions,
insofar as such statements constitute a summary of matters of law,
are accurate summaries and fairly and correctly present, in all
material respects, the information called for with respect to such
matters and such counsel has no reason to believe that the
statements therein are untrue or that there is an omission to
state a material fact required to be stated therein or necessary
to make the statements therein not misleading; PROVIDED, HOWEVER,
that such counsel may rely on representations of the Company with
respect to the factual matters contained in such statements,
provided that such counsel shall state that nothing has come to
the attention of such counsel which leads them to believe that
such representations are not true and correct in all material
respects.
(i) All proceedings taken in connection with the sale of the
Firm Shares and the Option Shares as herein contemplated shall be
reasonably satisfactory in form and substance to the
Representatives and their counsel and the Underwriters shall have
received from Hale and Dorr a favorable opinion, addressed to the
Representatives and dated such Closing Date, with respect to the
Shares, the Registration Statement and the Prospectus, and such
other related matters, as the Representatives may reasonably
request, and the Company shall have furnished to Hale and Dorr
such documents as they may reasonably request for the purpose of
enabling them to pass upon such matters.
(j) The Representatives shall have received on each Closing
Date a certificate, addressed to the Representatives, and dated
such Closing Date, of an executive officer of the Company to the
effect that the signer of such certificate has reviewed and
understands the provisions of Section 517.075 of the Florida
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<PAGE>
Statutes, and represents that the Company has complied, and at all
times will comply, with all provisions of Section 517.075 and
further, that as of such Closing Date, neither the Company nor any
of its affiliates does business with the government of Cuba or
with any person or affiliate located in Cuba.
6. COVENANTS OF THE COMPANY.
(A) The Company covenants and agrees as follows:
(a) The Company shall prepare the Prospectus in a form
approved by the Representatives and file such Prospectus
pursuant to Rule 424(b) under the Securities Act not later
than the Commission's close of business on the second
business day following the execution and delivery of this
Agreement, or, if applicable, such earlier time as may be
required by Rule 430A(a)(3) under the Securities Act, and
shall promptly advise the Representatives (i) when any
amendment to the Registration Statement shall have become
effective, (ii) of any request by the Commission for any
amendment of the Registration Statement or the Prospectus or
for any additional information, (iii) of the prevention or
suspension of the use of any preliminary prospectus or the
Prospectus or of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding
for that purpose and (iv) of the receipt by the Company of
any notification with respect to the suspension of the
qualification of the Shares for sale in any jurisdiction or
the initiation or threatening of any proceeding for such
purpose. The Company shall not file any amendment of the
Registration Statement or supplement to the Prospectus unless
the Company has furnished the Representatives a copy for its
review prior to filing and shall not file any such proposed
amendment or supplement to which the Representatives
reasonably object. The Company shall use its best efforts to
prevent the issuance of any such stop order and, if issued,
to obtain as soon as possible the withdrawal thereof.
(b) If, at any time when a prospectus relating to the
Shares is required to be delivered under the Securities Act
and the Rules, any event occurs as a result of which the
Prospectus as then amended or supplemented would include any
untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the
light of the circumstances under which they were made not
misleading, or if it shall be necessary to amend or
supplement the Prospectus to comply with the Securities Act
or the Rules, the Company promptly shall prepare and file
with the Commission, subject to the second sentence of
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<PAGE>
paragraph (a) of this Section 6(A), an amendment or
supplement which shall correct such statement or omission or
an amendment which shall effect such compliance.
(c) The Company shall make generally available to its
security holders and to the Representatives as soon as
practicable, but not later than 45 days after the end of the
12-month period beginning at the end of the fiscal quarter of
the Company during which the Effective Date occurs (or 90
days if such 12-month period coincides with the Company's
fiscal year), an earning statement (which need not be
audited) of the Company, covering such 12-month period, which
shall satisfy the provisions of Section 11(a) of the
Securities Act or Rule 158 of the Rules.
(d) The Company shall furnish to the Representatives
and counsel for the Underwriters, without charge, signed
copies of the Registration Statement (including all exhibits
thereto and amendments thereof), and to each other
Underwriter a copy of the Registration Statement (without
including all exhibits thereto and all amendments thereof),
and, so long as delivery of a prospectus by an underwriter or
dealer may be required by the Securities Act or the Rules, as
many copies of any preliminary prospectus and the Prospectus
and any amendments thereof and supplements thereto as the
Representatives may reasonably request.
(e) The Company shall cooperate with the
Representatives and their counsel in endeavoring to qualify
the Shares for offer and sale under the laws of such
jurisdictions as the Representatives may designate and shall
maintain such qualifications in effect so long as required
for the distribution of the Shares; provided, however, that
the Company shall not be required in connection therewith, as
a condition thereof, to qualify as a foreign corporation or
to execute a general consent to service of process in any
jurisdiction or subject itself to taxation as doing business
in any jurisdiction.
(f) For a period of five years after the date of this
Agreement, the Company shall supply to the Representatives
and to each other Underwriter who may so request in writing,
copies of such financial statements and other periodic and
special reports as the Company may from time to time
distribute generally to the holders of any class of its
capital stock and to furnish to the Representatives a copy of
each annual or other report it shall be required to file with
the Commission (including the Report on Form SR required by
Rule 463 of the Rules).
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(g) Without the prior written consent of the
Representatives, for a period of 180 days after the date of
this Agreement, the Company shall not issue, sell or register
with the Commission (other than on Form S-8 or on any
successor form), or otherwise dispose of, directly or
indirectly, any equity securities of the Company (or any
securities convertible into or exercisable or exchangeable
for equity securities of the Company), except for the
issuance of the Shares pursuant to the Registration
Statement, and the issuance of shares pursuant to the
Company's existing stock option plan or bonus plan.
(h) On or before completion of this offering, the
Company shall make all filings required under applicable
securities laws and by the Nasdaq National Market (including
any required registration under the Exchange Act).
(B) The Company agrees to pay, or reimburse if paid by the
Representatives, whether or not the transactions contemplated
hereby are consummated or this Agreement is terminated, all costs
and expenses incident to the public offering of the Shares and the
performance of the obligations of the Company under this Agreement
including those relating to: (i) the preparation, printing, filing
and distribution of the Registration Statement including all
exhibits thereto, each preliminary prospectus, the Prospectus, all
amendments and supplements to the Registration Statement and the
Prospectus, and the printing, filing and distribution of this
Agreement; (ii) the preparation and delivery of certificates for
the Shares to the Underwriters; (iii) the registration or
qualification of the Shares for offer and sale under the
securities or Blue Sky laws of the various jurisdictions referred
to in Section 6(A)(e), including the reasonable fees and
disbursements of counsel for the Underwriters in connection with
such registration and qualification and the preparation,
distribution and shipment of preliminary and supplementary Blue
Sky memoranda; (iv) the furnishing (including costs of shipping
and mailing) to the Representatives and to the Underwriters of
copies of each preliminary prospectus, the Prospectus and all
amendments or supplements to the Prospectus, and of the several
documents required by this Section to be so furnished, as may be
reasonably requested for use in connection with the offering and
sale of the Shares by the Underwriters or by dealers to whom
Shares may be sold; (v) the filing fees of the National
Association of Securities Dealers, Inc. in connection with its
review of the terms of the public offering; (vi) the furnishing
(including costs of shipping and mailing) to the Representatives
and to the Underwriters of copies of all reports and information
required by Section 6(A)(f); (vii) inclusion of the Shares for
quotation on the Nasdaq National Market; and (viii) all transfer
taxes, if any, with respect to the sale and delivery of the Shares
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by the Company to the Underwriters. Subject to the provisions of
Section 9, the Underwriters agree to pay, whether or not the
transactions contemplated hereby are consummated or this Agreement
is terminated, all costs and expenses incident to the performance
of the obligations of the Underwriters under this Agreement not
payable by the Company pursuant to the preceding sentence,
including, without limitation, the fees and disbursements of
counsel for the Underwriters.
7. INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless
each Underwriter and each person, if any, who controls any
Underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act against any
and all losses, claims, damages and liabilities, joint or
several (including any reasonable investigation, legal and
other expenses incurred in connection with, and any amount
paid in settlement of, any action, suit or proceeding or any
claim asserted), to which they, or any of them, may become
subject under the Securities Act, the Exchange Act or other
Federal or state law or regulation, at common law or
otherwise, insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, the Registration
Statement or the Prospectus or any amendment thereof or
supplement thereto, or arise out of or are based upon any
omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the
statements therein not misleading; PROVIDED, HOWEVER, that
such indemnity shall not inure to the benefit of any
Underwriter (or any person controlling such Underwriter) on
account of any losses, claims, damages or liabilities arising
from the sale of the Shares to any person by such Underwriter
if such untrue statement or omission or alleged untrue
statement or omission was made in such preliminary
prospectus, the Registration Statement or the Prospectus, or
such amendment or supplement, in reliance upon and in
conformity with information furnished in writing to the
Company by the Representatives on behalf of any Underwriter
specifically for use therein. This indemnity agreement will
be in addition to any liability which the Company may
otherwise have.
(b) Each Underwriter agrees, severally and not jointly,
to indemnify and hold harmless the Company, each person, if
any, who controls the Company within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act,
each director of the Company, and each officer of the Company
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who signs the Registration Statement, to the same extent as
the foregoing indemnity from the Company to each Underwriter,
but only insofar as such losses, claims, damages or
liabilities arise out of or are based upon any untrue
statement or omission or alleged untrue statement or omission
which was made in any preliminary prospectus, the
Registration Statement or the Prospectus, or any amendment
thereof or supplement thereto, contained in the last
paragraph of the cover page of the Prospectus, in the
paragraph relating to stabilization on the inside front cover
page of the Prospectus and the concession and reallowance
figures appearing under the caption "Underwriting" in the
Prospectus; provided, however, that the obligation of each
Underwriter to indemnify the Company (including any
controlling person, director or officer thereof) shall be
limited to the net proceeds received by the Company from such
Underwriter.
(c) Any party that proposes to assert the right to be
indemnified under this Section will, promptly after receipt
of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim is to be made
against an indemnifying party or parties under this Section,
notify each such indemnifying party of the commencement of
such action, suit or proceeding, enclosing a copy of all
papers served. No indemnification provided for in Section
7(a) or 7(b) shall be available to any party who shall fail
to give notice as provided in this Section 7(c) if the party
to whom notice was not given was unaware of the proceeding to
which such notice would have related and was prejudiced by
the failure to give such notice but the omission so to notify
such indemnifying party of any such action, suit or
proceeding shall not relieve it from any liability that it
may have to any indemnified party for contribution or
otherwise than under this Section. In case any such action,
suit or proceeding shall be brought against any indemnified
party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be
entitled to participate in, and, to the extent that it shall
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof and the
approval by the indemnified party of such counsel, the
indemnifying party shall not be liable to such indemnified
party for any legal or other expenses, except as provided
below and except for the reasonable costs of investigation
subsequently incurred by such indemnified party in connection
with the defense thereof. The indemnified party shall have
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the right to employ its counsel in any such action, but the
fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the employment of counsel
by such indemnified party has been authorized in writing by
the indemnifying parties, (ii) the indemnified party shall
have reasonably concluded that there may be a conflict of
interest between the indemnifying parties and the indemnified
party in the conduct of the defense of such action (in which
case the indemnifying parties shall not have the right to
direct the defense of such action on behalf of the
indemnified party) or (iii) the indemnifying parties shall
not have employed counsel to assume the defense of such
action within a reasonable time after notice of the
commencement thereof, in each of which cases the fees and
expenses of counsel shall be at the expense of the
indemnifying parties. An indemnifying party shall not be
liable for any settlement of any action, suit, proceeding or
claim effected without its written consent.
8. CONTRIBUTION. In order to provide for just and
equitable contribution in circumstances in which the
indemnification provided for in Section 7(a) is due in accordance
with its terms but for any reason is held to be unavailable from
the Company, the Company and the Underwriters shall contribute to
the aggregate losses, claims, damages and liabilities (including
any investigation, legal and other expenses reasonably incurred in
connection with, and any amount paid in settlement of, any action,
suit or proceeding or any claims asserted, but after deducting any
contribution received by the Company from persons other than the
Underwriters, such as persons who control the Company within the
meaning of the Securities Act, officers of the Company who signed
the Registration Statement and directors of the Company, who may
also be liable for contribution) to which the Company and one or
more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other from the
offering of the Shares or, if such allocation is not permitted by
applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in
Section 7 hereof, in such proportion as is appropriate to reflect
not only the relative benefits referred to above but also the
relative fault of the Company on the one hand and the Underwriters
on the other in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or expenses,
as well as any other relevant equitable considerations. The
relative benefits received by the Company and the Underwriters
shall be deemed to be in the same proportion as (x) the total
proceeds from the offering (net of underwriting discounts but
before deducting expenses) received by the Company, as set forth
in the table on the cover page of the Prospectus, bear to (y) the
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underwriting discounts received by the Underwriters, as set forth
in the table on the cover page of the Prospectus. The relative
fault of the Company or the Underwriters shall be determined by
reference to, among other things, whether the untrue or alleged
untrue statement of a material fact related to information
supplied by the Company or the Underwriters and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission. The Company and
the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 8 were determined by pro
rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this Section
8, (i) in no case shall any Underwriter (except as may be provided
in the Agreement Among Underwriters) be liable or responsible for
any amount in excess of the underwriting discount applicable to
the Shares purchased by such Underwriter hereunder, and (ii) the
Company shall be liable and responsible for any amount in excess
of such underwriting discount; provided, however, that no person
guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 8, each person,
if any, who controls an Underwriter within the meaning of Section
15 of the Securities Act or Section 20(a) of the Exchange Act
shall have the same rights to contribution as such Underwriter,
and each person, if any, who controls the Company within the
meaning of the Section 15 of the Securities Act or Section 20(a)
of the Exchange Act, each officer of the Company who shall have
signed the Registration Statement and each director of the Company
shall have the same rights to contribution as the Company, subject
in each case to clauses (i) and (ii) in the immediately preceding
sentence of this Section 8. Any party entitled to contribution
will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which
a claim for contribution may be made against another party or
parties under this Section, notify such party or parties from whom
contribution may be sought, but the omission so to notify such
party or parties from whom contribution may be sought shall not
relieve the party or parties from whom contribution may be sought
from any other obligation it or they may have hereunder or
otherwise than under this Section. No party shall be liable for
contribution, with respect to any action, suit, proceeding or
claim settled without its written consent. The Underwriter's
obligations to contribute pursuant to this Section 8 are several
in proportion to their respective underwriting commitments and not
joint.
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9. TERMINATION. This Agreement may be terminated with
respect to the Shares to be purchased on a Closing Date by the
Representatives by notifying the Company at any time
(a) in the absolute discretion of the Representatives
at or before any Closing Date: (i) if on or prior to such
date, any domestic or international event or act or
occurrence has materially disrupted, or in the opinion of the
Representatives will in the future materially disrupt, the
securities markets; (ii) if there has occurred any new
outbreak or material escalation of hostilities or other
calamity or crisis the effect of which on the financial
markets of the United States is such as to make it, in the
judgment of the Representatives, inadvisable to proceed with
the offering; (iii) if there shall be such a material adverse
change in general financial, political or economic conditions
or the effect of international conditions on the financial
markets in the United States is such as to make it, in the
judgment of the Representatives, inadvisable or impracticable
to market the Shares; (iv) if trading in the Shares has been
suspended by the Commission or trading generally on the New
York Stock Exchange, Inc., on the American Stock Exchange,
Inc. or on the Nasdaq National Market has been suspended or
limited, or minimum or maximum ranges for prices for
securities shall have been fixed, or maximum ranges for
prices for securities have been required, by said exchanges
or by order of the Commission, the National Association of
Securities Dealers, Inc., or any other governmental or
regulatory authority; or (v) if a banking moratorium has been
declared by any state or Federal authority, or
(b) at or before any Closing Date, that any of the
conditions specified in Section 5 shall not have been
fulfilled when and as required by this Agreement.
If this Agreement is terminated pursuant to any of its
provisions, except as set forth in Section 6(B), the Company shall
not be under any liability to any Underwriter, and no Underwriter
shall be under any liability to the Company, except that (y) if
this Agreement is terminated by the Representatives or the
Underwriters because of any failure, refusal or inability on the
part of the Company to comply with the terms or to fulfill any of
the conditions of this Agreement, the Company will reimburse the
Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of their counsel) incurred by
them in connection with the proposed purchase and sale of the
Shares or in contemplation of performing their obligations
hereunder and (z) no Underwriter who shall have failed or refused
to purchase the Shares agreed to be purchased by it under this
Agreement, without some reason sufficient hereunder to justify
-26-
<PAGE>
cancellation or termination of its obligations under this
Agreement, shall be relieved of liability to the Company or to the
other Underwriters for damages occasioned by its failure or
refusal.
10. SUBSTITUTION OF UNDERWRITERS. If one or more of the
Underwriters shall fail (other than for a reason sufficient to
justify the cancellation or termination of this Agreement under
Section 9) to purchase on any Closing Date the Shares agreed to be
purchased on such Closing Date by such Underwriter or
Underwriters, the Representatives may find one or more substitute
underwriters to purchase such Shares or make such other
arrangements as the Representatives may deem advisable or one or
more of the remaining Underwriters may agree to purchase such
Shares in such proportions as may be approved by the
Representatives, in each case upon the terms set forth in this
Agreement. If no such arrangements have been made by the close of
business on the business day following such Closing Date,
(a) if the number of Shares to be purchased by the
defaulting Underwriters on such Closing Date shall not exceed
10% of the Shares that all the Underwriters are obligated to
purchase on such Closing Date, then each of the nondefaulting
Underwriters shall be obligated to purchase such Shares on
the terms herein set forth in proportion to their respective
obligations hereunder; provided, that in no event shall the
maximum number of Shares that any Underwriter has agreed to
purchase pursuant to Section 1 be increased pursuant to this
Section 10 by more than one-ninth of such number of Shares
without the written consent of such Underwriter, or
(b) if the number of Shares to be purchased by the
defaulting Underwriters on such Closing Date shall exceed 10%
of the Shares that all the Underwriters are obligated to
purchase on such Closing Date, then the Company shall be
entitled to an additional business day within which it may,
but is not obligated to, find one or more substitute
underwriters reasonably satisfactory to the Representatives
to purchase such Shares upon the terms set forth in this
Agreement.
In any such case, either the Representatives or the Company
shall have the right to postpone the applicable Closing Date for a
period of not more than five business days in order that necessary
changes and arrangements (including any necessary amendments or
supplements to the Registration Statement or Prospectus) may be
effected by the Representatives and the Company. If the number of
Shares to be purchased on such Closing Date by such defaulting
Underwriter or Underwriters shall exceed 10% of the Shares that
all the Underwriters are obligated to purchase on such Closing
-27-
<PAGE>
Date, and none of the nondefaulting Underwriters or the Company
shall make arrangements pursuant to this Section within the period
stated for the purchase of the Shares that the defaulting
Underwriters agreed to purchase, this Agreement shall terminate
with respect to the Shares to be purchased on such Closing Date
without liability on the part of any nondefaulting Underwriter to
the Company and without liability on the part of the Company,
except in both cases as provided in Sections 6(B), 7, 8 and 9.
The provisions of this Section shall not in any way affect the
liability of any defaulting Underwriter to the Company or to the
nondefaulting Underwriters arising out of such default. A
substitute underwriter hereunder shall become an Underwriter for
all purposes of this Agreement.
11. MISCELLANEOUS. The respective agreements,
representations, warranties, indemnities and other statements of
the Company or its officers and of the Underwriters set forth in
or made pursuant to this Agreement shall remain in full force and
effect, regardless of any investigation made by or on behalf of
any Underwriter or the Company or any of the officers, directors
or controlling persons referred to in Sections 7 and 8 hereof, and
shall survive delivery of and payment for the Shares. The
provisions of Sections 6(B), 7, 8 and 9 shall survive the
termination or cancellation of this Agreement.
This Agreement has been and is made for the benefit of the
Underwriters and the Company and their respective successors and
assigns, and, to the extent expressed herein, for the benefit of
persons controlling any of the Underwriters, or the Company, and
directors and officers of the Company, and their respective
successors and assigns, and no other person shall acquire or have
any right under or by virtue of this Agreement. The term
"successors and assigns" shall not include any purchaser of Shares
from any Underwriter merely because of such purchase.
All notices and communications hereunder shall be in writing
and mailed or delivered or by telephone or telegraph if
subsequently confirmed in writing, (a) if to the Representatives,
c/o Oppenheimer & Co., Inc., Oppenheimer Tower, World Financial
Center, New York, New York 10281 Attention: Peter J. Crowley, and
(b) if to the Company, to its agent for service as such agent's
address appears on the cover page of the Registration Statement.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New York without regard
to principles of conflict of laws.
This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
-28-
<PAGE>
Please confirm that the foregoing correctly sets forth the
agreement among us.
Very truly yours,
PROGENICS PHARMACEUTICALS, INC.
By
-----------------------------
Name:
Title:
Confirmed:
OPPENHEIMER & CO., INC.
VECTOR SECURITIES INTERNATIONAL, INC.
Acting severally on behalf of
themselves and as Representatives
of the several Underwriters named
in Schedule I annexed hereto
OPPENHEIMER & CO., INC.
By:
------------------------------
Name:
Title:
VECTOR SECURITIES INTERNATIONAL, INC.
By:
-------------------------------
Name:
Title:
-29-
<PAGE>
SCHEDULE I
NUMBER OF
FIRM SHARES TO
NAME BE PURCHASED
------ ---------------
Oppenheimer & Co., Inc..................
Vector Securities International, Inc....
____________
________
Total.............................
-30-
<PAGE>
Exhibit 3.2
- -----------------------------------------------------------------------------
BY - LAWS
of
PROGENICS PHARMACEUTICALS, INC.
(a Delaware Corporation)
- -----------------------------------------------------------------------------
(Adopted as of December 5, 1990)
<PAGE>
PROGENICS PHARMACEUTICALS, INC,
(a Delaware Corporation)
BY - LAWS
TABLE OF CONTENTS
Page
ARTICLE I. OFFICES ............................................ 1
SECTION 1. Registered Office ........................... 1
SECTION 2. Other Offices ............................... 1
ARTICLE II. SEAL .............................................. 1
ARTICLE III. MEETINGS OF STOCKHOLDERS ......................... 1
SECTION 1. Place of Meeting ............................ 1
SECTION 2. Annual Meetings ............................. 1
SECTION 3. Special Meetings ............................ 1
SECTION 4. Notice ...................................... 2
SECTION 5. Quorum and Adjournments ..................... 2
SECTION 6. Votes; Proxies .............................. 3
SECTION 7. Organization ................................ 4
SECTION 8. Consent of Stockholders in Lieu of Meeting... 4
ARTICLE IV. DIRECTORS ......................................... 5
SECTION 1. Number ...................................... 5
SECTION 2. Term of Office .............................. 5
SECTION 3. Vacancies ................................... 5
SECTION 4. Removal by Stockholders ..................... 5
SECTION 5. Meetings .................................... 6
SECTION 6. Votes ...................................... 6
SECTION 7. Quorum and Adjournment ...................... 6
SECTION 8. Compensation ................................ 6
SECTION 9. Action By Consent of Directors .............. 7
ARTICLE V. COMMITTEES OF DIRECTORS ............................ 7
SECTION 1. Executive Committee ......................... 7
SECTION 2. Audit Committee ............................. 8
SECTION 3. Other Committees ............................ 9
SECTION 4. Term of Office .............................. 9
ARTICLE VI. OFFICERS .......................................... 10
SECTION 1. Officers .................................... 10
SECTION 2. Vacancies ................................... 10
SECTION 3. Chief Executive Officer ..................... 10
SECTION 4. Chairman of the Board ....................... 11
SECTION 5. President ................................... 11
SECTION 6. Executive Vice Presidents and Vice
Presidents .................................. 11
SECTION 7. Secretary ................................... 11
SECTION 8. Assistant Secretaries ....................... 11
SECTION 9. Treasurer ................................... 12
SECTION 10. Assistant Treasurers ....................... 12
SECTION 11. Controller ................................. 12
SECTION 12. Assistant Controller ....................... 12
SECTION 13. Subordinate Officers ....................... 12
SECTION 14. Compensation ............................... 12
<PAGE>
-ii-
SECTION 15. Removal .................................... 13
SECTION 16. Bonds ...................................... 13
ARTICLE VII. CERTIFICATES OF STOCK ............................ 13
SECTION 1. Form and Execution of Certificates .......... 13
SECTION 2. Transfer of Shares .......................... 14
SECTION 3. Closing of Transfer Books ................... 14
SECTION 4. Fixing Date for Determination of
Stockholders of Record ...................... 14
SECTION 5. Lost or Destroyed Certificates .............. 15
SECTION 6. Uncertificated Shares ....................... 16
ARTICLE VIII. EXECUTION OF DOCUMENTS ......................... 16
SECTION 1. Execution of Checks, Notes, etc. ........... 16
SECTION 2. Execution of Contracts, Assignments, etc. .. 16
SECTION 3. Execution of Proxies ........................ 17
ARTICLE IX. INSPECTION OF BOOKS ............................... 17
ARTICLE X. FISCAL YEAR ........................................ 17
ARTICLE XI. AMENDMENTS ........................................ 17
ARTICLE XII. INDEMNIFICATION .................................. 18
SECTION 1. Indemnification: ............................ 18
SECTION 2. Authorization ............................... 19
SECTION 3. Expense Advance ............................. 19
SECTION 4. Nonexclusivity .............................. 19
SECTION 5. Insurance ................................... 20
SECTION 6. "The Corporation" ........................... 20
SECTION 7. Other Indemnification ....................... 20
SECTION 8. Other Definitions ........................... 20
SECTION 9. Continuation of Indemnification ............. 21
SECTION 10. Amendment or Repeal ........................ 21
<PAGE>
PROGENICS PHARMACEUTICALS, INC,
(a Delaware Corporation)
------------
BY - LAWS
ARTICLE I.
------------
OFFICES.
SECTION 1. REGISTERED OFFICE. The registered office of the Corporation
shall be located in the City of Dover, County of Kent, State of Delaware, and
the name of the resident agent in charge thereof shall be United States
Corporation Company.
SECTION 2. OTHER OFFICES. The Corporation may also have offices at such
other places, within or without the State of Delaware, as the Board of
Directors may from time to time appoint or the business of the Corporation
may require.
ARTICLE II.
SEAL.
The seal of the Corporation shall, subject to alteration by the Board
of Directors, consist of a flat-faced circular die with the word "Delaware",
together with the name of the Corporation and the year of incorporation, cut
or engraved thereon.
ARTICLE III.
MEETINGS OF STOCKHOLDERS.
SECTION 1. PLACE OF MEETING. Meetings of the stockholders shall be held
either within or without the State of Delaware at such place as the Board of
Directors may fix.
SECTION 2. ANNUAL MEETINGS. The annual meeting of stockholders shall be
held for the election of directors on such date and at such time as the Board
of Directors may fix. Any other proper business may be transacted at the
annual meeting.
SECTION 3. SPECIAL MEETINGS. Special meetings of the stockholders for
any purpose or purposes may be called by the Chairman of the Board of
Directors, if there be one, the President, or by the directors (either by
written instrument
<PAGE>
By-Laws of Progenics Pharmaceuticals, Inc.
Page 2
signed by a majority or by resolution adopted by a vote of the majority), and
special meetings shall be called by the President or the Secretary whenever
stockholders owning a majority of the capital stock issued, outstanding and
entitled to vote so request in writing. Such request of stockholders shall
state the purpose or purposes of the proposed meeting.
SECTION 4. NOTICE. Written or printed notice of every meeting of
stockholders, annual or special, stating the hour, date and place thereof,
and the purpose or purposes in general terms for which the meeting is called
shall, not less than ten (10), or such longer period as shall be provided by
law, the Certificate of Incorporation, these By-laws, or otherwise, and not
more than sixty (60) days before such meeting, be served upon or mailed to
each stockholder entitled to vote thereat, at his address as it appears upon
the stock records of the Corporation or, if such stockholder shall have filed
with the Secretary of the Corporation a written request that notices intended
for him be mailed to some other address, then to the address designated in
such request.
Notice of the hour, date, place and purpose of any meeting of
stockholders may be dispensed with if every stockholder entitled to vote
thereat shall attend either in person or by proxy and shall not, at the
beginning of the meeting, object to the holding of such meeting because the
meeting has not been lawfully called or convened, or if every absent
stockholder entitled to such notice shall in writing, filed with the records
of the meeting, either before or after the holding thereof, waive such notice.
SECTION 5. QUORUM AND ADJOURNMENTS. Except as otherwise provided by
law or by the Certificate of Incorporation, the presence in person or by
proxy at any meeting of stockholders of the holders of a majority of the
shares of the capital stock of the Corporation issued and outstanding and
entitled to vote thereat, shall be requisite and shall constitute a quorum.
If two or more classes of stock are entitled to vote as separate classes upon
any question, then, in the case of each such class, a quorum for the
consideration of such question shall, except as otherwise provided by law or
by the Certificate of Incorporation, consist of a majority in interest of all
stock of that class issued, outstanding and entitled to vote. If a majority
of the shares of capital stock of the Corporation issued and outstanding and
entitled to vote thereat or, where a larger quorum is required, such quorum,
shall not be represented at any meeting of the stockholders regularly called,
the holders of a majority of the shares present or represented by proxy and
entitled to vote thereat shall have power to adjourn the meeting to another
time, or to another time and place, without notice other than announcement of
adjournment at the meeting, and there may be successive adjournments for like
cause and in like manner until the requisite amount of shares entitled to
vote at such meeting shall be represented; provided, however, that if the
adjournment is for more than thirty (30) days, notice of the hour, date and
place of the adjourned meeting shall be given to each stockholder
<PAGE>
By-Laws of Progenics Pharmaceuticals, Inc.
Page 3
entitled to vote thereat. Subject to the requirements of law and
the Certificate of Incorporation, on any issue on which two or
more classes of stock are entitled to vote separately, no
adjournment shall be taken with respect to any class for which a
quorum is present unless the Chairman of the meeting otherwise
directs. At any meeting held to consider matters which were
subject to adjournment for want of a quorum at which the requisite
amount of shares entitled to vote thereat shall be represented,
any business may be transacted which might have been transacted at
the meeting as originally noticed.
SECTION 6. VOTES; PROXIES. Except as otherwise provided in the
Certificate of Incorporation, at each meeting of stockholders, every
stockholder of record at the closing of the transfer books, if closed, or on
the date set by the Board of Directors for the determination of stockholders
entitled to vote at such meeting, shall have one vote for each share of stock
entitled to vote which is registered in his name on the books of the
Corporation, and, in the election of directors, may vote cumulatively to the
extent, if any, and in the manner authorized in the Certificate of
Incorporation.
At each such meeting every stockholder entitled to vote shall be
entitled to do so in person, or by proxy appointed by an instrument in
writing or as otherwise permitted by law subscribed by such stockholder and
bearing a date not more than three (3) years prior to the meeting in
question, unless said instrument provides for a longer period during which it
is to remain in force. A duly executed proxy shall be irrevocable if it
states that it is irrevocable and if, and only as long as, it is coupled with
an interest sufficient in law to support an irrevocable power. A stockholder
may revoke any proxy which is not irrevocable by attending the meeting and
voting in person or by filing an instrument in writing or as otherwise
permitted by law revoking the proxy or another duly executed proxy bearing a
later date with the Secretary of the Corporation.
Voting at meetings of stockholders need not be by written ballot
and, except as otherwise provided by law, need not be conducted by inspectors
of election unless so determined by the Chairman of the meeting or by the
holders of shares of stock having a majority of the votes which could be cast
by the holders of all outstanding shares of stock entitled to vote thereon
which are present in person or by proxy at such meeting. If it is required or
determined that inspectors of election be appointed, the Chairman shall
appoint two inspectors of election, who shall first take and subscribe an
oath or affirmation faithfully to execute the duties of inspectors at such
meeting with strict impartiality and according to the best of their ability.
The inspectors so appointed shall take charge of the polls and, after the
balloting, shall make a certificate of the result of the vote taken. No
director or candidate for the office of director shall be appointed as such
inspector.
<PAGE>
By-Laws of Progenics Pharmaceuticals, Inc.
Page 4
At any meeting at which a quorum is present, a plurality of the votes
properly cast for election to fill any vacancy on the Board of Directors
shall be sufficient to elect a candidate to fill such vacancy, and a majority
of the votes properly cast upon any other question shall decide the question,
except in any case where a larger vote is required by law, the Certificate of
Incorporation, these By-Laws, or otherwise.
SECTION 7. ORGANIZATION. The Chairman of the Board, if there be one,
or in his absence the Vice Chairman, or in the absence of a Vice Chairman,
the President, or in the absence of the President, a Vice President, shall
call meetings of the stockholders to order and shall act as chairman thereof.
The Secretary of the Corporation, if present, shall act as secretary of all
meetings of stockholders, and, in his absence, the presiding officer may
appoint a secretary.
SECTION 8. CONSENT OF STOCKHOLDERS IN LIEU OF MEETING. Unless otherwise
restricted by the Certificate of Incorporation, any action required or
permitted by the Delaware General Corporation Law to be taken at any annual
or special meeting of the stockholders of the Corporation, may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by
the holders of outstanding stock having not less than the minimum number of
votes that would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote thereon were present and voted and shall
be delivered to the Corporation by delivery to its registered office in
Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's registered
office shall be by hand or by certified or registered mail, return receipt
requested.
Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective
to take the corporate action referred to therein unless, within sixty (60)
days of the earliest dated consent delivered in the manner required by this
section to the corporation, written consents signed by a sufficient number of
stockholders to take action are delivered to the corporation by delivery to
its registered office in Delaware, its principal place of business, or an
officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Delivery made to the
Corporation's registered office shall be by hand or by certified or
registered mail, return receipt requested.
Prompt notice of the taking of the Corporate action without a meeting
by less than unanimous written consent shall be given to those stockholders
who have not consented in writing. In the event that the action which is
consented to is such as would have required the filing of a certificate under
any section of the
<PAGE>
By-Laws of Progenics Pharmaceuticals, Inc.
Page 5
Delaware General Corporation Law other than Section 228 thereof, if such
action had been voted on by stockholders at a meeting thereof, the
certificate filed under such other section shall state, in lieu of any
statement required by such section concerning any vote of stockholders, that
written consent has been given in accordance with Section 228 of the Delaware
General Corporation Law, and that written notice has been given as provided
in such Section 228.
ARTICLE IV.
DIRECTORS.
SECTION 1. NUMBER. The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors consisting of not less than one
director, none of whom needs to be a stockholder. The number of directors for
each year shall be fixed at each annual meeting of stockholders, but if the
number is not so fixed, the number shall remain as it stood immediately prior
to such meeting.
At each annual meeting of stockholders, the stockholders shall elect
directors. Each director so elected shall hold office, subject to the
provisions of law, the Certificate of Incorporation, or these By-Laws until
the next annual meeting of stockholders or until his successor is elected and
qualified.
At any time during any year, except as otherwise provided by law, the
Certificate of Incorporation or by these By-Laws, the number of directors may
be increased or reduced, in each case by vote of a majority of the stock
issued, outstanding and entitled to vote for the election of directors or a
majority of the directors in office at the time of such increase or decrease.
SECTION 2. TERM OF OFFICE. Each director shall hold office until the
next annual meeting of stockholders and until his successor is duly elected
and qualified or until his earlier death or resignation, subject to the right
of the stockholders at any time to remove any director or directors as
provided in Section 4 of this Article.
SECTION 3. VACANCIES. If any vacancy shall occur among the directors, or
if the number of directors shall at any time be increased, the directors then
in office, although less than a quorum, by a majority vote may fill the
vacancies or newly-created directorships, or any such vacancies or
newly-created directorships may be filled by the stockholders at any meeting.
SECTION 4. REMOVAL BY STOCKHOLDERS. Except as otherwise provided by law
or the Certificate of Incorporation, the holders of record of the capital
stock of the Corporation entitled to vote for the election of directors may
by a majority vote, remove any
<PAGE>
By-Laws of Progenics Pharmaceuticals, Inc.
Page 6
director or directors, with or without cause, and in their discretion, elect
a new director or directors in place thereof.
SECTION 5. MEETINGS. Meetings of the Board of Directors shall be
held at such place, within or without the State of Delaware, as may from time
to time be fixed by resolution of the Board of Directors, or by the Chairman
of the Board, or by the President and as may be specified in the notice or
waiver of notice of any meeting. Meetings may be held at any time upon the
call of the Chairman of the Board or the President or any two (2) of the
directors in office by oral, telegraphic, facsimile, telex, telecopy or other
form of electronic transmission, or written notice, duly served or sent or
mailed to each director not less than twenty-four (24) hours before such
meeting, except that, if mailed, not less than seventy-two (72) hours before
such meeting. Meetings may be held at any time and place without notice if
all the directors are present and do not object to the holding of such
meeting for lack of proper notice or if those not present shall, in writing
or by telegram, facsimile, telex, telecopy or other form of electronic
transmission, waive notice thereof. A regular meeting of the Board may be
held without notice immediately following the annual meeting of stockholders
at the place where such meeting is held. Regular meetings of the Board may
also be held without notice at such time and place as shall from time to time
be determined by resolution of the Board.
Members of the Board of Directors or any committee thereof may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and participation in a
meeting pursuant to the foregoing provisions shall constitute presence in
person at the meeting.
SECTION 6. VOTES. Except as otherwise provided in the Certificate of
Incorporation, the vote of the majority of the directors present at a meeting
at which a quorum is present shall be the act of the Board of Directors.
SECTION 7. QUORUM AND ADJOURNMENT. Except as otherwise provided in
the Certificate of Incorporation, a majority of the directors shall
constitute a quorum for the transaction of business. If at any meeting of the
Board there shall be less than a quorum present, a majority of those present
may adjourn the meeting from time to time without notice other than
announcement of the adjournment at the meeting, and at such adjourned meeting
at which a quorum is present any business may be transacted which might have
been transacted at the meeting as originally noticed.
SECTION 8. COMPENSATION. Directors shall receive compensation for
their services, as such, and for service on any Committee of the Board of
Directors, as fixed by resolution of the Board of Directors and for expenses
of attendance at each regular or special meeting of the Board or any
Committee thereof. Nothing
<PAGE>
By-Laws of Progenics Pharmaceuticals, Inc.
Page 7
in this Section shall be construed to preclude a director from serving the
Corporation in any other capacity and receiving compensation therefor.
SECTION 9. ACTION BY CONSENT OF DIRECTORS. Any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting if all members of the Board
or committee, as the case may be, consent thereto in writing, and the writing
or writings are filed with the minutes of proceedings of the Board, or
committee. Such consent shall be treated as a vote adopted at a meeting for
all purposes. Such consents may be executed in one or more counterparts and
not every Director or committee member need sign the same counterpart.
ARTICLE V.
COMMITTEES OF DIRECTORS.
SECTION 1. EXECUTIVE COMMITTEE. The Board of Directors may appoint an
Executive Committee of two (2) or more members, to serve during the pleasure
of the Board, to consist of such directors as the Board may from time to time
designate. The Board of Directors shall designate the Chairman of the
Executive Committee.
(a) PROCEDURE. The Executive Committee shall, by a vote of
a majority of its members, fix its own times and places
of meeting, determine the number of its members
constituting a quorum for the transaction of business,
and prescribe its own-rules of procedure, no change in
which shall be made save by a majority vote of its
members.
(b) RESPONSIBILITIES. During the intervals between the
meetings of the Board of Directors, except as otherwise
provided by the Board of Directors in establishing such
Committee or otherwise, the Executive Committee shall
possess and may exercise all the powers of the Board in
the management and direction of the business and affairs
of the Corporation; provided, however, that the
Executive Committee shall not, except to the extent the
Certificate of Incorporation or the resolution providing
for the issuance of shares of stock adopted by the Board
of Directors as provided in Section 151(a) of the
Delaware General Business Corporation Law, have the
power:
(i) to amend or authorize the amendment of the
Certificate of Incorporation or these By-Laws;
(ii) to authorize the issuance of stock;
(iii) to authorize the payment of any dividend;
<PAGE>
By-Laws of Progenics Pharmaceuticals, Inc.
Page 8
(iv) to adopt an agreement of merger or
consolidation of the Corporation or to recommend to the
stockholders the sale, lease or exchange of all or
substantially all the property and business of the
Corporation;
(v) to recommend to the stockholders a
dissolution, or a revocation of a dissolution, of the
Corporation;. or
(vi) to adopt a certificate of ownership and
merger pursuant to Section 253 of the Delaware Business
Corporation Law.
(c) REPORTS. The Executive Committee shall keep regular
minutes of its proceedings, and all action by the
Executive Committee shall be reported promptly to the
Board of Directors. Such action shall be subject to
review, amendment and repeal by the Board, provided that
no rights of third parties shall be adversely affected
by such review, amendment or repeal.
(d) APPOINTMENT OF ADDITIONAL MEMBERS. In the absence or
disqualification of any member of the Executive
Committee, the member or members thereof present at any
meeting and not disqUalified from voting, whether or not
constituting a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting
in place of any such absent or disqualified member.
SECTION 2. AUDIT COMMITTEE. The Board of Directors may appoint an
Audit Committee of two (2) or more members who shall not be officers or
employees of the Corporation to serve during the pleasure of the Board. The
Board of Directors shall designate the Chairman of the Audit Committee.
(a) PROCEDURE. The Audit Committee, by a vote of a majority
of its members, shall fix its own times and places of
meeting, shall determine the number of its members
constituting a quorum for the transaction of business,
and shall prescribe its own rules of procedure, no
change in which shall be made save by a majority vote of
its members.
(b) RESPONSIBILITIES. The Audit Committee shall review the
annual financial statements of the Corporation prior to
their submission to the Board of Directors, shall
consult with the Corporation's independent auditors, and
may examine and consider such other matters in relation
to the internal and external audit of the Corporation's
accounts and in relation to the financial affairs of the
Corporation and its accounts, including the selection
and retention of independent auditors, as the Audit
<PAGE>
By-Laws of Progenics Pharmaceuticals, Inc.
Page 9
Committee may, in its discretion, determine to be
desirable.
(c) REPORTS. The Audit Committee shall keep regular minutes
of its proceedings, and all action by the Audit
Committee shall, from time to time, be reported to the
Board of Directors as it shall direct. Such action
shall be subject to review, amendment and repeal by the
Board, provided that no rights of third parties shall be
adversely affected by such review, amendment or repeal.
(d) APPOINTMENT OF ADDITIONAL MEMBERS. In the absence or
disqualification of any member of the Audit Committee,
the member or members thereof present at any meeting and
not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting
in place of any such absent or disqualified member.
SECTION 3. OTHER COMMITTEES. The Board of Directors may at any time
appoint one or more other committees from and outside of its own number.
Every such committee must include at least one member of the Board of
Directors. The Board may from time to time designate or alter, within the
limits permitted by law, the Certificate of Incorporation and this Article,
if applicable, the duties, powers and number of members of such other
committees or change their membership, and may at any time abolish such other
committees or any of them.
(a) PROCEDURE. Each committee, appointed pursuant to this
Section, shall, by a vote of a majority of its members,
fix its own times and places of meeting, determine the
number of its members constituting a quorum for the
transaction of business, and prescribe its own rules of
procedure, no change in which shall be made save by a
majority vote of its members.
(b) RESPONSIBILITIES. Each committee, appointed pursuant to
this Section, shall exercise the powers assigned to it
by the Board of Directors in its discretion.
(c) REPORTS. Each committee appointed pursuant to this
Section shall keep regular minutes of proceedings, and
all action by each such committee shall, from time to
time, be reported to the Board of Directors as it shall
direct. Such action shall be subject to review,
amendment and repeal by the Board, provided that no
rights of third parties shall be adversely affected by
such review, amendment or repeal.
(d) APPOINTMENT OF ADDITIONAL MEMBERS. In the absence or
disqualification of any member of each committee,
appointed pursuant to this Section, the member or
members thereof present at any meeting and not
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Page 10
disqualified from voting, whether or not constituting a
quorum, may unanimously appoint another member of the
Board of Directors (or, to the extent permitted, another
person) to act at the meeting in place of any such
absent or disqualified member.
SECTION 4. TERM OF OFFICE. Each member of a committee shall hold
office until the first meeting of the Board of Directors following the annual
meeting of stockholders (or until such other time as the Board of Directors
may determine, either in the vote establishing the committee or at the
election of such member or otherwise) and until his successor is elected and
qualified, or until he sooner dies, resigns, is removed, is replaced by
change of membership or becomes disqualified by ceasing to be a Director
(where membership on the Board is required), or until the committee is sooner
abolished by the Board of Directors.
ARTICLE VI.
OFFICERS.
SECTION 1. OFFICERS. The Board of Directors shall elect a President,
a Secretary and a Treasurer, and, in their discretion, may elect a Chairman
of the Board, a Vice Chairman of the Board, a Controller, and one or more
Executive Vice Presidents, Vice Presidents, Assistant Secretaries, Assistant
Treasurers and Assistant Controllers as deemed necessary or appropriate. Such
officers shall be elected annually by the Board of Directors at its first
meeting following the annual meeting of stockholders (or at such other
meeting as the Board of Directors determines), and each shall hold office for
the term provided by the vote of the Board, except that each will be subject
to removal from office in the discretion of the Board as provided herein. The
powers and duties of more than one office may be exercised and performed by
the same person.
SECTION 2. VACANCIES. Any vacancy in any office may be filled for the
unexpired portion of the term by the Board of Directors, at any regular or
special meeting.
SECTION 3. CHIEF EXECUTIVE OFFICER. The Board may appoint one or more
persons to be chief executive officer or to share the office of chief
executive officer. Subject to the directions of the Board of Directors, the
person or persons appointed as chief executive officer shall have and
exercise direct charge of and general supervision over the business and
affairs of the Corporation and shall perform all duties incident to the
office of the chief executive officer of a corporation and such other duties
as from time to time may be assigned by the Board of Directors. If no chief
executive officer is appointed by the Board of Directors or if the office is
vacant, the President shall have and exercise the powers of chief executive
officer unless the Board of Directors otherwise directs. A person occupying
the office of
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chief executive officer may but need not be member of the Board
of Directors.
SECTION 4. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors, if elected, shall be a member of the Board of Directors and shall
preside at its meetings. He shall advise and counsel with the President, and
shall perform such duties as from time to time may be assigned to him by the
Board of Directors.
SECTION 5. PRESIDENT. As provided in and subject to the provisions of
Section 3 above, the President shall be the chief executive officer of the
Corporation. The President shall also have and exercise such powers and shall
perform such duties incident to the office of President and such other duties
as may from time to time be assigned to him by the Board of Directors or the
chief executive officer, if at the time the President is not the sole
occupant of the office of chief executive officer. The President may but need
not be a member of the Board of Directors.
SECTION 6. EXECUTIVE VICE PRESIDENTS AND VICE PRESIDENTS. Each
Executive Vice President and Vice President shall have and exercise such
powers and shall perform such duties as from time to time may be assigned to
him by the Board of Directors or the President.
SECTION 7. SECRETARY. The Secretary shall keep the minutes of all
meetings of the stockholders and of the Board of Directors in books provided
for the purpose; he shall see that all notices are duly given in accordance
with the provisions of law and these By-Laws; he shall be custodian of the
records and of the corporate seal or seals of the Corporation; he shall see
that the corporate seal is affixed to all documents the execution of which,
on behalf of the Corporation under its seal, is duly authorized, and, when
the seal is so affixed, he may attest the same; he may sign, with the
President, an Executive Vice President or a Vice President, certificates of
stock of the Corporation; and, in general, he shall perform all duties
incident to the office of secretary of a corporation, and such other duties
as from time to time may be assigned to him by the Board of Directors.
SECTION 8. ASSISTANT SECRETARIES. The Assistant Secretaries in order
of their seniority shall, in the absence or disability of the Secretary,
perform the duties and exercise the powers of the Secretary and shall perform
such other duties as the Board of Directors shall prescribe or as from time
to time may be assigned by the Secretary.
SECTION 9. TREASURER. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation, and shall deposit, or cause to be deposited, in the name of the
Corporation, all monies or other valuable effects in such banks, trust
companies or other depositaries as shall, from time to time, be selected by
the Board of Directors; he may endorse for collection on behalf of the
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Page 12
Corporation checks, notes and other obligations; he may sign receipts and
vouchers for payments made to the Corporation; he may sign checks of the
Corporation, singly or jointly with another person as the Board of Directors
may authorize, and pay out and dispose of the proceeds under the direction of
the Board; he shall render to the President and to the Board of Directors,
whenever requested, an account of the financial condition of the Corporation;
he may sign, with the President, or an Executive Vice President or a Vice
President, certificates of stock of the Corporation; and in general, shall
perform all the duties incident to the office of treasurer of a corporation,
and such other duties as from time to time may be assigned to him by the
Board of Directors.
SECTION 10. ASSISTANT TREASURERS. The Assistant Treasurers in order of
their seniority shall, in the absence or disability of the Treasurer, perform
the duties and exercise the powers of the Treasurer and shall perform such
other duties as the Board of Directors shall prescribe or as from time to
time may be assigned by the Treasurer.
SECTION 11. CONTROLLER. The Controller, if elected, shall be the chief
accounting officer of the Corporation and, in the absence of or disability of
the Treasurer or any Assistant Treasurer, perform the duties and exercise
the powers of the Treasurer and shall perform such other duties as the Board
of Directors shall prescribe or as from time to time may be assigned by the
Treasurer; and, in general, shall perform all duties incident to the office
of a controller of a corporation, and such other duties as may from time to
time be assigned to him by the Board of Directors or the Treasurer.
SECTION 12. ASSISTANT CONTROLLERS. The Assistant Controllers in order
of their seniority shall, in the absence or disability of the Controller,
perform the duties and exercise the powers of the Controller and shall
perform such other duties as the Board of Directors shall prescribe or as
from time to time may be assigned by the Controller.
SECTION 13. SUBORDINATE OFFICERS. The Board of Directors may appoint
such subordinate officers as it may deem desirable. Each such officer shall
hold office for such period, have such authority and perform such duties as
the Board of Directors may prescribe. The Board of Directors may, from time
to time, authorize any officer to appoint and remove subordinate officers and
to prescribe the powers and duties thereof.
SECTION 14. COMPENSATION. The Board of Directors shall fix the
compensation of all officers of the Corporation. It may authorize any
officer, upon whom the power of appointing subordinate officers may have been
conferred, to fix the compensation of such subordinate officers.
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SECTION 15. REMOVAL. Any officer of the Corporation may be
removed, with or without cause, by action of the Board of
Directors.
SECTION 16. BONDS. The Board of Directors may require any
officer of the Corporation to give a bond to the Corporation,
conditional upon the faithful performance of his duties, with one
or more sureties and in such amount as may be satisfactory to the
Board of Directors.
ARTICLE VII.
CERTIFICATES OF STOCK.
SECTION 1. FORM AND EXECUTION OF CERTIFICATES. The interest of each
stockholder of the Corporation shall be evidenced by a certificate or
certificates for shares of stock in such form as the Board of Directors may
from time to time prescribe. The certificates of stock of each class shall be
consecutively numbered and signed by the Chairman or Vice Chairman of the
Board, if any, the President, an Executive Vice President or a Vice President
and by the Secretary, an Assistant Secretary, the Treasurer or an Assistant
Treasurer of the Corporation, and may be countersigned and registered in such
manner as the Board of Directors may by resolution prescribe, and shall bear
the corporate seal or a printed or engraved facsimile thereof. Where any such
certificate is signed by a transfer agent or transfer clerk acting on behalf
of the Corporation, the signatures of any such Chairman, Vice Chairman,
President, Executive Vice President, Vice President, Treasurer, Assistant
Treasurer, Secretary or Assistant Secretary may be facsimiles, engraved or
printed. In case any officer or officers, who shall have signed, or whose
facsimile signature or signatures shall have been used on, any such
certificate or certificates, shall cease to be such officer or officers,
whether because of death, resignation or otherwise, before such certificate
or certificates shall have been delivered by the Corporation, such
certificate or certificates may nevertheless be issued and delivered by the
Corporation as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures shall have been used
thereon had not ceased to be such officer or officers.
In case the corporate seal which has been affixed to, impressed on,
or reproduced in any such certificate or certificates shall cease to be the
seal of the Corporation before such certificate or certificates have been
delivered by the Corporation, such certificate or certificates may
nevertheless be issued and delivered by the Corporation as though the seal
affixed thereto, impressed thereon or reproduced therein had not ceased to be
the seal of the Corporation.
Every certificate for shares of stock which are subject to any
restriction on transfer pursuant to law, the Certificate of
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By-Laws of Progenics Pharmaceuticals, Inc.
Page 14
Incorporation, these By-Laws, or any agreement to which the Corporation is a
party, shall have the restriction noted conspicuously on the certificate, and
shall also set forth, on the face or back, either the full text of the
restriction or a statement of the existence of such restriction and (except
if such restriction is imposed by law) a statement that the Corporation will
furnish a copy thereof to the holder of such certificate upon written request
and without charge.
Every certificate issued when the Corporation is authorized to issue
more than one class or series of stock shall set forth on its face or back
either the full text of the preferences, voting powers, qualifications, and
special and relative rights of the shares of each class and series authorized
to be issued, or a statement of the existence of such preferences, powers,
qualifications and rights, and a statement that the Corporation will furnish
a copy thereof to the holder of such certificate upon written request and
without charge.
SECTION 2. TRANSFER OF SHARES. The shares of the stock of the
Corporation shall be transferred on the books of the Corporation by the
holder thereof in person or by his attorney lawfully constituted, upon
surrender for cancellation of certificates for the same number of shares,
with an assignment and power of transfer endorsed thereon or attached
thereto, duly executed, with such proof or guaranty of the authenticity of
the signature as the Corporation or its agents may reasonably require. The
Corporation shall be entitled to treat the holder of record of any share or
shares of stock as the holder in fact thereof and accordingly shall not be
bound to recognize any equitable or other claim to or interest in such share
or shares on the part of any other person whether or not it shall have
express or other notice thereof, save as expressly provided by law or by the
Certificate of Incorporation. It shall be the duty of each stockholder to
notify the Corporation of his post office address.
SECTION 3. CLOSING OF TRANSFER BOOKS. The stock transfer books of the
Corporation may, if deemed appropriate by the Board of Directors, be closed
for such length of time not exceeding fifty (50) days as the Board may
determine, preceding the date of any meeting of stockholders or the date for
the payment of any dividend or the date for the allotment of rights or the
date when any issuance, change, conversion or exchange of capital stock shall
go into effect, during which time no transfer of stock on the books of the
Corporation may be made.
SECTION 4. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD. In
order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or
to express consent to corporate action in writing without a meeting, or
entitled to receive payment of any dividend or other distribution or
allotment of any rights, or entitled to exercise any rights in respect of any
change, conversion or exchange of stock or for the purpose of
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By-Laws of Progenics Pharmaceuticals, Inc.
Page 15
any other lawful action, the Board of Directors may fix a record date, which
record date shall not precede the date upon which the resolution fixing the
record date is adopted by the Board of directors and which record date: (1)
in the case of determination of stockholders entitled to vote at any meeting
of stockholders or adjournment thereof, shall unless otherwise required by
law, not be more than sixty nor less than ten days before the date of such
meeting; (2) in the case of determination of stockholders entitled to express
consent to corporate action in writing without a meeting, shall not be more
than ten days from the date upon which the resolution fixing the record date
is adopted by the Board of Directors; and (3) in the case of any other
action, shall not be more than sixty days prior to such other action. If no
record date is fixed: (1) the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given,
or, if notice is waived, at the close of business on the day next preceding
the day on which the meeting is held; (2) the record date for determining
stockholders entitled to express consent to corporate action in writing
without a meeting when no prior action of the Board of Directors is required
by law, shall be the first date on which a signed written consent setting
forth the action taken or proposed to be taken is delivered to the
Corporation in accordance with applicable law, or, if prior action by the
Board of Directors is required by law, shall be at the close of business on
the day on which the Board of Directors adopts the resolution taking such
prior action; and (3) the record date for determining stockholders for any
other purpose shall be at the close of business on the day on which the Board
of Directors adopts the resolution relating thereto. A determination of
stockholders of record entitled to notice of or to vote at a meeting of
stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the
adjourned meeting.
SECTION 5. LOST OR DESTROYED CERTIFICATES. In case of the loss or
destruction of any certificate of stock, a new certificate may be issued
under the following conditions:
(a) The owner of said certificate shall file with the
Secretary or any Assistant Secretary of the Corporation
an affidavit giving the facts in relation to the
ownership, and in relation to the loss or destruction of
said certificate, stating its number and the number of
shares represented thereby; such affidavit shall be in
such form and contain such statements as shall satisfy
the President, any Executive Vice President, Vice
President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer, that said
certificate has been accidentally destroyed or lost, and
that a new certificate ought to be issued in lieu
thereof. Upon being so satisfied, any such officer
shall require such owner to furnish the Corporation a
bond in such penal sum and in such form as he may deem
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By-Laws of Progenics Pharmaceuticals, Inc.
Page 16
advisable, and with a surety or sureties approved by
him, to indemnify and save harmless the Corporation from
any claim, loss, damage or liability which may be
occasioned by the issuance of a new certificate in lieu
thereof. Upon such bond being so filed, if required, a
new certificate for the same number of shares shall be
issued to the owner of the certificate so lost or
destroyed; and the transfer agent and registrar, if any,
of stock shall countersign and register such new
certificate upon receipt of a written order signed by
any such officer, and thereupon the Corporation will
save harmless said transfer agent and registrar in the
premises. In case of the surrender of the original
certificate, in lieu of which a new certificate has been
issued, or the surrender of such new certificate, for
cancellation, the bond of indemnity given as a condition
of the issue of such new certificate may be surrendered;
or
(b) The Board of Directors of the Corporation may by
resolution authorize and direct any transfer agent or
registrar of stock of the Corporation to issue and-
register respectively from time to time without further
action or approval by or on behalf of the Corporation
new certificates of stock to replace certificates
reported lost, stolen or destroyed upon receipt of an
affidavit of loss and bond of indemnity in form and
amount and with surety satisfactory to such transfer
agent or registrar in each instance or upon such terms
and conditions as the Board of Directors may determine.
SECTION 6. UNCERTIFICATED SHARES. The Board of Directors of
the Corporation may by resolution provide that one or more of any
or all classes or series of the stock of the Corporation shall be
uncertificated shares, subject to the provisions of Section 158 of
the Delaware General Corporation Law.
ARTICLE VIII.
EXECUTION OF DOCUMENTS.
SECTION 1. EXECUTION OF CHECKS, NOTES, ETC. All checks and drafts on
the Corporation's bank accounts and all bills of exchange and promissory
notes, and all acceptances, obligations and other instruments for the payment
of money, shall be signed by such officer or officers, or agent or agents, as
shall be thereunto authorized from time to time by the Board of Directors,
which may in its discretion authorize any such signatures to be facsimile.
SECTION 2. EXECUTION OF CONTRACTS, ASSIGNMENTS, ETC. Unless the
Board of Directors shall have otherwise provided generally or in a specific
instance, all contracts, agreements, endorsements,
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Page 17
assignments, transfers, stock powers, or other instruments shall be signed by
the President, any Executive vice President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant Treasurer.
The Board of Directors may, however, in its discretion, require any or all
such instruments to be signed by any two or more of such officers, or may
permit any or all of such instruments to be signed by such other officer or
officers, agent or agents, as it shall be thereunto authorize from time to
time.
SECTION 3. EXECUTION OF PROXIES. The President, any Executive Vice
President or any Vice President, and the Secretary, the Treasurer, any
Assistant Secretary or any Assistant Treasurer, or any other officer
designated by the Board of Directors, may sign on behalf of the Corporation
proxies to vote upon shares of stock of other companies standing in the name
of the Corporation.
ARTICLE IX.
INSPECTION OF BOOKS.
The Board of Directors shall determine from time to time whether,
and if allowed, to what extent and at what time and places and under what
conditions and regulations, the accounts and books of the Corporation (except
such as may by law be specifically open to inspection) or any of them, shall
be open to the inspection of the stockholders, and no stockholder shall have
any right to inspect any account or book or document of the Corporation,
except as conferred by the laws of the State of Delaware, unless and until
authorized so to do by resolution of the Board of Directors or of the
stockholders of the Corporation.
ARTICLE X.
FISCAL YEAR.
The fiscal year of the Corporation shall be determined from time to
time by vote of the Board of Directors.
ARTICLE XI.
AMENDMENTS
These By-Laws may be altered, amended, changed or repealed and new
By-Laws adopted by the stockholders or, to the extent provided in the
Certificate of Incorporation, by the Board of Directors, in either case at
any meeting called for that purpose at which a quorum shall be present. Any
by-law, whether made, altered, amended, changed or repealed by the
stockholders or the Board of Directors may be repealed, amended, changed,
further amended, changed, repealed or reinstated, as the case may be
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By-Laws of Progenics Pharmaceuticals, Inc.
Page 18
either by the stockholders or by the Board of Directors, as herein provided;
except that this Article may be altered, amended, changed or repealed only by
vote of the stockholders.
ARTICLE XII.
INDEMNIFICATION.
SECTION 1. INDEMNIFICATION. (a) The Corporation shall indemnify and
hold harmless, to the fullest extent permitted by applicable law as it
presently exists or may hereafter be amended, any person who was or is a
party or is threatened to be made a party or is otherwise involved in any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he, or a person for whom
he is the legal representative, is or was a director, trustee, partner,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise or
non-profit entity against all liability, losses, expenses (including
attorneys' fees), judgments, fines, and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interest of the Corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interest of the Corporation,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(b) The Corporation shall indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, trustee,
partner, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise
or non-profit entity against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection with the defense or settlement
of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the
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By-Laws of Progenics Pharmaceuticals, Inc.
Page 19
performance of his duty to the Corporation unless and only to the extent that
the Court of Chancery of the State of Delaware or the court in which such
action or suit was brought shall determine upon application that despite the
adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which the Court of Chancery of the State of Delaware or such other court
shall deem proper.
(c) To the extent that any person referred to in paragraphs (a) or (b)
above has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to therein, or in defense of any claim,
issue or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
SECTION 2. AUTHORIZATION. Any indemnification under Section 1 of
this Article (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, trustee, partner, officer, employee or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth in Section 1 of this Article. Such determination shall be
made: (a) by the Board of Directors by a majority vote of a quorum consisting
of directors who were not parties to such action, suit or proceeding, or (b)
if such a quorum is not obtainable, or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in written
opinion, or (c) by the stockholders.
SECTION 3. EXPENSE ADVANCE. Expenses (including attorneys' fees)
incurred by an officer or director of the Corporation in defending any civil,
criminal, administrative or investigative action, suit or proceeding may be
paid by the Corporation in advance of the final disposition of such action,
suit or proceeding as authorized by the Board of Directors in the manner
provided in Section 2 of this Article upon receipt of an undertaking by or on
behalf of such officer or director to repay such amount, unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Article. Such expenses (including
attorneys' fees) incurred by other employees or agents of the Corporation may
be so paid upon such terms and conditions, if any, as the Board of Directors
deems appropriate.
SECTION 4. NONEXCLUSIVITY. The indemnification and advancement of
expenses provided by, or granted pursuant to, the other Sections of this
Article shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
statute, by-law, agreement, vote of stockholders or disinterested directors
or otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a director, officer,
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By-Laws of Progenics Pharmaceuticals, Inc.
Page 20
employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such a person.
SECTION 5. INSURANCE. The Corporation shall have power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, trustee, partner, officer, employee
or agent of another corporation, partnership, joint venture, trust or other
enterprise or non-profit entity against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as
such, whether or not the Corporation would have the power to indemnify him
against such liability under the provisions of this Article or Section 145 of
Title 8 of the Delaware Code relating to the General Corporation Law of the
State of Delaware.
SECTION 6. "THE CORPORATION". For the purposes of this Article,
references to "the Corporation" shall include the resulting corporation and,
to the extent that the Board of Directors of the resulting corporation so
decides, all constituent corporations (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its
separate existence had continued, would have had power and authority to
indemnify its directors, officers and employees or agents so that any person
who is or was a director, trustee, partner, officer, employee or agent of
such a constituent corporation or is or was serving at the request of such
constituent corporation as director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise or
non-profit entity shall stand in the same position under the provisions of
this Article with respect to the resulting or surviving corporation if its
separate existence had continued.
SECTION 7. OTHER INDEMNIFICATION. The Corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a
director, trustee, partner, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise or
non-profit entity shall be reduced by any amount such person may collect as
indemnification from such other corporation, partnership, joint venture,
trust or other enterprise or non-profit entity or from insurance.
SECTION 8. OTHER DEFINITIONS. For purposes of this Article,
references to "other enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a person
with respect to an employee benefit plan; and references to "serving at the
request of the Corporation" shall include any service as a director, trustee,
officer, employee or agent of the Corporation which imposes duties on, or
involves services by, such director, trustee, officer, employee, or agent
with respect to an employee benefit plan, its participants, or beneficiaries;
and a person who acted in good faith and in a manner he reasonably believed
to be in the interest of the participants and beneficiaries of an employee
benefit plan shall
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Page 21
be deemed to have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Article.
SECTION 9. CONTINUATION OF INDEMNIFICATION. The indemnification and
advancement of expenses provided by, or granted pursuant to, this Article
shall, unless otherwise provided when authorized or ratified, continue as to
a person who has ceased to be a director, trustee, partner, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
SECTION 10. AMENDMENT OR REPEAL. Any repeal or modification of the
foregoing provisions of this Article shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission
occurring prior to the time of such repeal or modification.
<PAGE>
EXHIBIT 10.1
REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of December 8, 1995 among Progenics Pharmaceuticals,
Inc., a Delaware corporation (the "Company"), and the undersigned purchaser
(the "Purchaser") of shares of the Company's Series C Preferred Stock, par
value $.001 per share (the "Series C Stock").
WHEREAS, the Company has outstanding shares of its common stock, par
value $.01 per share (the "Common Stock"), Series A Preferred Stock, par
value $.001 per share (the "Series A Stock") and Series B Preferred Stock,
par value $.001 per share ("Series B Stock"); and
WHEREAS, the Company has agreed to grant certain registration rights to
the Purchaser to induce the Purchaser to subscribe for the Series C Stock.
NOW, THEREFORE, for valuable consideration, receipt of which is hereby
acknowledged by each party, the parties hereto agree as follows:
As used herein, the term the "Securities Act" refers to the Securities
Act of 1933 (and any successor law), and the Rules and Regulations
thereunder, all as amended from time to time, and the term "Shares" refers to
the shares of Common Stock, Series A Stock, Series B Stock and Series C Stock
issued as of the date hereof or issuable upon exercise or conversion of or in
exchange for securities outstanding as of the date hereof or issued under any
stock option plans or warrants outstanding as of the date hereof (and any
other shares or equity securities distributed on or in respect of or in
substitution for or upon conversion of such Shares), whether or not they have
been sold or transferred, other than any that shall have been sold or
transferred pursuant to an effective registration statement, or pursuant to
Rule 144, under the Securities Act.
1. REGISTRATION UPON REQUEST. (a) Commencing on the first anniversary of
the date on which the Company's first registration of common stock under the
Securities Act becomes effective (the "Effective Date"), the holders of 20%
or more of the Shares shall have the right to two demand in writing
registrations on Forms S-1 or S-2 or any successor forms, at the Company's
expense, provided that the proposed public offering shall be a Qualified
Public Offering. For purposes of this Agreement, a Qualified Public Offering
shall be defined as a public offering of securities, underwritten on a firm
commitment basis, at a price per share to the public of at least $5.00 (to be
appropriately adjusted for stock splits, stock dividends, and other types of
recapitalizations) and an aggregate offering price to the public of at least
$5,000,000.
(b) The holders of 20% or more of the Shares shall have the right to
demand an unlimited number of registrations on Form S-3 or any successor
form, if the Company is eligible to use Form S-3, provided that the aggregate
proposed public offering price of the securities to be included in such
registration shall be at least $1,000,000 and provided further that the
<PAGE>
effectiveness of any such registration is separated by at least six months
from the effectiveness of the prior registration.
(c) Following receipt of any notice delivered in compliance with Section
l(a) (a "Demand"), the Company shall within 10 days thereafter deliver
written notice of the Demand to all holders of Shares from whom a Demand has
not been received and shall promptly use its best efforts to register under
the Securities Act, for sale in a public offering, the number of Shares
specified in such Demand (and in all written requests for inclusion of
additional Shares from such other holders of Shares received by the Company
within 20 days after notice of the Demand to such other holders). The Company
may designate, subject to the approval of a majority in interest of the
participating holders of Shares, which approval shall not be unreasonably
withheld or delayed, the managing underwriter or underwriters, which
underwriter(s) shall be of national standing. The Company shall be deemed to
have satisfied an obligation to register Shares pursuant to a Demand only
when a registration statement covering the Shares specified in the Demand and
any written requests delivered under this Section l(c) shall have become
effective and the period of distribution of the Shares contemplated thereby
shall have been completed.
(d) If a registration is requested under this Section 1, the Company
shall include in such registration all Shares that the holders thereof shall
specify in the Demand. The Company shall be entitled to include in any
registration statement filed in response to a Demand made in accordance with
this Section 1, securities to be sold by the Company for its own account or
the account of any other securityholders. However, the managing
underwriter(s) shall have the right to exclude securities from such
registration if the managing underwriter(s) advise the Company in writing
that such exclusion is necessary to avoid interfering with the successful
marketing of the underwritten public offering. If the managing underwriter(s)
shall advise the Company and the holders in writing of the need to exclude
securities, then securities to be registered and sold pursuant to such
registration statement shall be excluded as follows: (i) first, securities
held by securityholders other than the shareholders demanding registration
pursuant to Section 1 hereof; (ii) next, securities to be sold for the
account of the Company; and (iii) last, the Shares requested to be included
in the registration by the demanding shareholders pursuant to this Section 1.
If securities are to be excluded from the registration statement, then the
exclusion shall be made PRO RATA among the holders in each of the foregoing
categories in proportion to the securities as to which each holder requested
registration, with all of the securities in a category to be excluded before
any securities in the next category are excluded. If any Shares are excluded
from the registration pursuant to this subsection, then such registration
shall not be counted as a demand registration under Section l(a).
2. INCIDENTAL REGISTRATION. If at any time after the Effective Date the
Company proposes to register any of its securities under the Securities Act
for its own account or the account of any securityholders (other than any
registration pursuant to Paragraph 1 or any registration of an offering
solely to employees of the Company and its subsidiaries or any registration
on Form S-4 or a successor form), it shall promptly give written notice to
each holder of Shares of its intention to do so, and the Company shall
include in such registration all Shares that the holders thereof shall
specify in a written notice delivered to the Company within 30 days after
their receipt of the Company's notice of the proposed filing of the
registration statement. However, the managing underwriter(s) shall have the
right to exclude Shares from such registration if the managing
underwriter(s) advise the Company in writing that such exclusion is necessary
to avoid interfering with the successful marketing of the underwritten
portion of the
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public offering. If the managing underwriter(s) shall advise the Company and
the holders in writing of the need to exclude securities, then securities to
be registered and sold pursuant to such registration statement shall be
excluded as follows: (i) first, the Shares requested to be included in the
registration statement pursuant to this Section 2; (ii) next, securities held
by securityholders other that the holders of Shares (including shares, if
any, of other holders for which the registration was initiated); and (iii)
last, securities to be sold for the account of the Company. If less than all
Shares requested to be included in the registration statement pursuant to
this Section 2 are to be excluded from the registration statement, then the
exclusion of Shares shall be made pro rata among the holders of Shares in
proportion to the respective numbers of Shares for which they requested
registration. The Company shall designate the managing underwriter or
underwriters, which underwriter(s) shall be of national standing.
3. CONDITIONS RELATING TO REGISTRATION OF SHARES. Registration of Shares
pursuant to Paragraph 1 or 2 shall be subject to the following:
(a) FILING OF AMENDMENTS. The Company shall file such amendments and
supplements to the registration statement and the related prospectus and take
such other action as may be necessary to keep the registration statement
effective and to comply with the Securities Act for such period, not
exceeding six months from the original effective date of the registration
statement, as a majority in interest of the participating holders of Shares
may request.
(b) BLUE SKY. The Company shall take such action under the securities
laws of such states as any participating holder of Shares shall reasonably
request; PROVIDED, HOWEVER, that the Company shall not be required to qualify
to do business as a foreign corporation, or to file any general consent to
service of process, in any state.
(c) EXPENSES. The Company shall bear the cost of all registrations,
including, but not limited to, all registration and filing fees, printing
expenses, roadshow expenses and fees, expenses and disbursements of counsel
and accountants for the Company (subject, however, to subparagraph (d)
below), except that each holder of Shares shall pay the fees and
disbursements of its own counsel and the underwriting fees and selling
commissions applicable to its Shares. The Company will furnish to the holders
of the Shares being registered, at the Company's sole cost and expense, such
number of prospectuses conforming to the requirements of the Securities Act,
and the rules and regulations thereunder, relating to the Shares subject
thereto as may from time to time be reasonably requested by such holders.
(d) AUDITS. The Company shall not be required to furnish any audited
financial statements at the request of any holder of Shares other than those
statements customarily prepared at the end of its fiscal year, unless (i) the
requesting holders shall agree to reimburse the Company for the out-of-pocket
costs incurred by the Company in the preparation of such other audited
financial statements or (ii) such other audited financial statements shall be
required by the Securities and Exchange Commission as a condition to ordering
a registration statement effective under the Securities Act. The Company
shall, however, furnish, without charge, copies of all such unaudited
financial statements as any holder of Shares shall reasonably request for use
in any registration.
(e) INDEMNIFICATION. The Company shall indemnify and hold harmless each
seller of Shares, each person who under the Securities Act is deemed a
controlling person of such seller, and each underwriter for such seller,
against any losses, claims, damages or liabilities to
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<PAGE>
which any such seller, controlling person or underwriter may become subject
under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) shall arise out of or
be based upon any untrue or allegedly untrue statement of any material fact
contained in the registration statement, any related prospectus or
preliminary prospectus or any amendment or supplement to the registration
statement or any prospectus or preliminary prospectus or upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, and shall
reimburse any legal or other expenses reasonably incurred by any such seller,
controlling person or underwriter in connection with investigating or
defending against any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company shall not be liable to any such seller,
controlling person or underwriter for any losses, claims, damages,
liabilities or actions insofar as the same shall arise out of or be based
upon any such untrue statement or omission made in reliance upon and in
conformity with written information furnished by such seller, controlling
person or underwriter seeking indemnification hereunder for use in the
registration statement, prospectus, preliminary prospectus, amendment or
supplement. Each seller of Shares and each underwriter for such seller shall
similarly indemnify and hold harmless the Company and its controlling persons
against any such losses, claims, damages, liabilities or actions but only
insofar as the same shall arise out of or be based upon any untrue statement
or omission made in reliance upon and in conformity with written information
furnished by such indemnifying person to the Company for use in the
registration statement; PROVIDED, THAT, in no event shall any indemnity by a
seller of Shares or any underwriter such Seller exceed the gross proceeds
from the offering received by such Seller.
(f) UNDERWRITING AGREEMENT; COOPERATION; ETC. The Company and each
holder proposing to distribute Shares through the underwritten public
offering shall enter into an underwriting agreement in such form, scope and
substance as is customary in underwritten offerings of the same type as the
requested registration and which contains provisions for, in addition to the
other items specified in subparagraph (e) above, (i) such representations and
warranties as are customarily made by issuers to underwriters in such
underwriting agreements, (ii) indemnity, contribution and other related
procedures customarily found in such underwriting agreements, and (iii) such
other provisions which are customarily found in such underwriting agreements.
The Company further agrees that the Company will cooperate with such
underwriters including, without limitation, providing such information,
certificates, comfort letters of accountants and opinions of counsel as may
be reasonably requested by such underwriters and agrees to make appropriate
officers available for, and cause such officer to attend, meetings with
potential investors and "roadshows," if any. The Company will make available
for inspection by the holders of the Shares being registered, by any
underwriter participating in such registration and by their respective agents
and representatives, all pertinent financial and other records, pertinent
corporate documents and properties of the Company, and cause all of the
Company's officers, directors and employees to supply all information
reasonably requested by, and attend due diligence meetings with, any such
holder, underwriter, agent or representative in connection with such
registration.
4. REPORTS UNDER SECURITIES EXCHANGE ACT OF 1934. With a view to making
available to holders of the Shares the benefits of Rule 144 promulgated
under the Securities Act and any other rule or regulation of the SEC that may
at any time permit a holder of Shares to sell securities of the Company to
the public without registration or pursuant to a registration on Form S-3,
the Company agrees to:
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(a) make and keep public information available, as those terms are
understood and defined in SEC Rule 144, at all times after 90 days after the
effective date of the first registration statement filed by the Company for
the offering of its securities to the general public;
(b) take such action, including the voluntary registration of its Common
Stock under Section 12 of the Securities and Exchange Act of 1934, as amended
(the "Exchange Act"), as is necessary to enable the holders of the Shares to
utilize Form S-3 for the sale of their Shares, such action to be taken as
soon as practicable after the end of the fiscal year in which the first
registration statement filed by the Company for the offering of its
securities to the general public is declared effective;
(c) file with the SEC in a timely manner all reports and other documents
required of the Company under the Securities Act and the Exchange Act; and
(d) furnish to any holder of Shares, forthwith upon request (i) a
written statement by the Company that it has complied with the reporting
requirements of SEC Rule 144 (at any time after 90 days after the effective
date of the first registration statement filed by the Company), the
Securities Act and the Exchange Act (at any item after it has become subject
to such reporting requirements), or that it qualifies as a registrant whose
securities may be resold pursuant to Form S-3 (at any time after it so
qualifies), (ii) a copy of the most recent annual or quarterly report of the
Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested in availing such
holder of any rule or regulation of the SEC which permits the selling of any
such securities without registration or pursuant to such form.
5. ASSIGNMENT OF REGISTRATION RIGHTS. The rights to cause the Company to
register the Shares may be assigned to a transferee or assignee of such
securities provided the Company is, within a reasonable time after such
transfer, furnished with written notice of the name and address of such
transferee or assignee and the securities with respect to which such
registration rights are being assigned; and provided, further, that such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Securities Act.
6. LIMITATIONS ON SUBSEQUENT REGISTRATION RIGHTS. From and after the
date of this Agreement, the Company shall not, without the prior written
consent of the holders of a majority of the Shares, enter into any agreement,
with any holder or prospective holder of any securities of the Company which
would allow such holder or prospective holder (a) to include such securities
in any registration filed under Paragraph 1, or (b) to make a demand
registration which could result in such registration statement being declared
effective prior to the Effective Date, or within 120 days of the effective
day of any registration effected pursuant to Paragraph 1.
7. AMENDMENT OF REGISTRATION RIGHTS. Any provision of these registration
rights may be amended and the observance thereof may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders
of a majority of the Shares. Any amendment or waiver effected in accordance
with this paragraph shall be binding upon each holder of Shares at the time
outstanding (including securities into which such securities are
convertible), each future holder of all such securities, and the Company.
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<PAGE>
8. MISCELLANEOUS.
(a) GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of New York.
(b) ENTIRE AGREEMENT. This Agreement constitutes the full and entire
understanding and agreement among the parties with regard to the subject
matter hereof.
(c) NOTICES, ETC. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class
mail, postage prepaid, or delivered either by hand or by messenger, addressed
as follows, or at such other address as a party shall have furnished to the
Company in writing:
If to the Company:
Progenics Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591
Attn: Paul J. Maddon, M.D., Ph.D.
With a copy to:
Dewey Ballantine
1301 Avenue of the Americas
New York, NY 10019
Attn: Mark R. Baker, Esq.
If to the Purchaser:
Attn: ________________________
With a copy to:
______________________________
______________________________
______________________________
Attn: ________________________
(d) TITLES AND SUBTITLES. The titles of the Paragraphs and subparagraphs
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
(e) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, all of which together shall
constitute one instrument.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have set their hands as of the date
first above written.
PROGENICS PHARMACEUTICALS, INC.
By /s/ PAUL J. MADDON
---------------------------------
Name: Paul J. Maddon, M.D., Ph.D.
Title: President
By
---------------------------------
Name:
Title:
By
---------------------------------
Name:
Title:
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<PAGE>
EXHIBIT 10.2
PROGENICS PHARMACEUTICALS, INC.
1989 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1989 Non-Qualified Stock Option Plan (the "PLAN") is
to encourage employees, consultants and directors of Progenics
Pharmaceuticals, Inc. (the "COMPANY") to continue their association with the
Company, by providing favorable opportunities for such employees to
participate in the ownership of the Company and in its future growth through
the granting of stock options.
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors of the Company
(the "BOARD"). The Board shall have the authority to adopt, amend and rescind
such rules and regulations as, in its opinion, may be advisable in the
administration of the Plan. All questions of interpretation and application
of such rules and regulations, of the Plan or of options granted thereunder
(the "OPTIONS") shall be subject to the determination, which shall be final
and binding, of a majority of the whole Board.
3. OPTION SHARES
The stock subject to Options under the Plan shall be shares of the
Company's common stock, par value $.001 per share (the "STOCK"). The total
amount of the Stock with respect to which Options may be granted shall not
exceed in the aggregate 500,000 shares; provided that such aggregate number
of shares shall be subject to adjustment in accordance with the provisions of
Section 16. In the event that any outstanding Option shall expire for any
reason or shall terminate by reason of the death or severance of employment
of the optionee, the surrender of any such Option, or any other cause, the
shares of Stock allocable to the unexercised portion of such Option may again
be subject to an option under the Plan.
4. AUTHORITY TO GRANT OPTIONS
The Board may grant from time to time, to such eligible individuals as
it shall from time to time determine, an Option or Options to buy a stated
number of shares of Stock under the terms and conditions of the Plan, each of
which Option or Options shall be a non-qualified option, and not an
"incentive stock option" within the meaning of Section 422A of the Internal
Revenue Code of 1986, as amended (the "CODE"). The number of shares of Stock
to be covered by any Option shall be as determined by the Board.
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5. WRITTEN AGREEMENT
Each Option granted hereunder shall be embodied in a written option
agreement which shall be subject to the terms and conditions prescribed
herein and shall be signed by the optionee and by the Chairman of the Board,
the President or any Vice President of the Company, for and in the name and
on behalf of the Company. The written option agreement shall contain such
other provisions as the Board in its discretion shall deem advisable.
6. ELIGIBILITY
The individuals who shall be eligible for grant of Options under the
Plan shall be employees, consultants, directors and other individuals who
render services which the Board of Directors considers to be of special
importance to the management, operation, or development of the Company, and
who have contributed or may be expected to contribute materially to the
success of the Company.
7. OPTION PRICE
The price at which shares may be purchased pursuant to an Option shall
be specified by the Board at the time the Option is granted.
8. DURATION OF OPTIONS
The duration of any Option shall be specified by the Board. The Board,
in its discretion, may provide that an Option shall be exercisable during its
entire duration or during any lesser period of time.
9. AMOUNT EXERCISABLE
An Option may be exercised so long as it is valid and outstanding from
time to time, in part or as a whole, in such manner and subject to such
conditions as the Board in its discretion may provide in the option agreement.
Options shall be exercised by the delivery of written notice to the
Company setting forth the number of shares with respect to which the Option
is to be exercised, accompanied by payment of the option price of such
shares, which payment shall be made, subject to the alternative provisions of
this Section 9, in cash or by such cash equivalents, payable to the order of
the Company in an amount in United States dollars equal to the option price
of such shares, as the Board in its discretion shall consider acceptable.
Such notice shall be delivered in person to the Secretary of the Company or
shall be sent by registered mail, return receipt requested, to the Secretary
of the Company, in which case delivery shall be deemed made on the date such
notice is deposited in the mail.
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Alternatively, payment of the option price may be made, in whole or in
part, in shares of Stock previously acquired by the optionee. If payment is
made in whole or in part in shares of Stock, then the optionee shall deliver
to the Company in payment of the option price of the shares with respect of
which such Option is exercised (i) certificates registered in the name of
such optionee representing a number of shares of Stock legally and
beneficially owned by such optionee, free of all liens, claims and
encumbrances of every kind and having a fair market value on the date of
delivery of such notice equal to the option price of the shares with respect
to which such Option is to be exercised, such certificates to be accompanied
by stock powers duly endorsed in blank by the record holder of the shares
represented by such certificates; and (ii) if the option price of the shares
with respect to which such Option is to be exercised exceeds such fair market
value, cash or such cash equivalents payable to the order to the Company, in
an amount in United States dollars equal to the amount of such excess, as the
Board in its discretion shall consider acceptable. Notwithstanding the
foregoing provisions of this Section 9, the Board, in its sole discretion may
refuse in general or in any specific case to accept shares of Stock in
payment of the option price of the shares with respect to which such Option
is to be exercised and, in that event, any certificates representing shares
of Stock which were delivered to the Company with such written notice shall
be returned to such optionee together with notice by the Company to such
optionee of the refusal of the Board to accept such shares of Stock.
Alternatively, if the option agreement so specifies or the Board of
Directors in its sole discretions permits, payment of the option price may be
made in part by a promissory note executed by the optionee and collaterally
secured by the Stock obtained upon exercise of the Option, providing for
repayment at such time or times as the Board shall specify; provided,
however, that such promissory note shall provide for repayment no later than
five (5) years from the date of exercise and for interest at a rate not less
than the "base" rate announced on the date of exercise by Citicorp, N.A., and
provided further that in any event an amount not less than the par value of
the shares of Stock with respect to which the Option is being exercised must
be paid in cash, cash equivalents, or shares of Stock in accordance with this
Section 9. The decision as to whether to permit partial payment by a
promissory note for Stock to be issued upon exercise of any Option granted
shall rest entirely in the discretion of the Board.
As promptly as practicable after the receipt by the Company of (i)
written notice from the optionee setting forth the number of shares with
respect to which an Option is to be exercised and (ii) payment of the option
price of such shares in the form required by the foregoing provisions of this
Section 9, the Company shall cause to be delivered to the optionee
certificates representing the number of shares with respect to which the
Option has been so exercised.
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10. TRANSFERABILITY OF OPTIONS
Options shall not be transferable by the optionee otherwise than by will
or under the laws of descent and distribution, and shall be exercisable
during his lifetime only by him.
11. TERMINATION OF EMPLOYMENT OR INVOLVEMENT OF OPTIONEE WITH THE COMPANY
Options shall be exercisable to the full extent of their term following
an optionee's termination of employment or active involvement with the
Company unless otherwise set forth in the option agreement.
12. REQUIREMENTS OF LAW
The Company shall not be required to sell or issue any shares upon the
exercise of any Option if the issuance of such shares shall constitute or
result in a violation by the optionee or the Company of any provisions of any
law, statute or regulation of any governmental authority. Specifically, in
connection with the Securities Act of 1933, as amended, (the "SECURITIES
ACT") upon exercise of any Option the Company shall not be required to issue
such shares unless the Board has received evidence satisfactory to it to the
effect that the holder of the Option will not transfer the shares except
pursuant to a registration statement in effect under the Securities Act or
unless the Company has received an opinion of counsel satisfactory to it to
the effect that such registration is not required. Any determination in this
connection by the Board shall be final, binding and conclusive. The Company
shall not be obligated to take any other affirmative action in order to
cause the exercise of an Option or the issuance of shares pursuant thereto to
comply with any law or regulations of any governmental authority, including,
without limitation, the Securities Act.
13. NO RIGHTS AS STOCKHOLDER
No optionee shall have rights as a stockholder with respect to shares
covered by his Option until the date of issuance of a stock certificate for
the shares, and except as otherwise provided in Section 16, no adjustment for
dividends or otherwise shall be made if the record date therefor is prior to
the date of issuance of the stock certificate.
14. EMPLOYMENT OBLIGATION
The granting of any Option shall not impose upon the Company any
obligation to employ or continue to employ any optionee, and the right of the
Company to terminate the employment of any person shall not be diminished or
affected by reason of the fact that an Option has been granted to him. The
existence of any Option shall not be taken into account in determining any
damages relating to termination of employment for any reason.
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15. FORFEITURE
Notwithstanding anything to the contrary in the Plan, if the Board
determines, after full consideration of the facts presented on behalf of both
the Company and the optionee, that an optionee has engaged in fraud,
embezzlement, theft, commission of a felony or proven dishonesty in the
course of his employment by the Company or any subsidiary, which has damaged
or may damage the Company or any subsidiary, or has disclosed trade secrets
or other proprietary information of the Company or any subsidiary, the Board
may cancel all of such optionee's unexercised Options. The decision of the
Board as to the cause of an optionee's discharge and the damage done to the
Company or a subsidiary shall be final, binding and conclusive. No decision
of the Board, however, shall affect in any manner the finality of the
discharge of an optionee by the Company or a subsidiary.
16. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
The existence of outstanding Options shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any or
all adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business or any merger or consolidation of
the Company or any issue of bonds, debentures, preferred or preference stock,
whether or not convertible into the Stock or other securities, ranking prior
to the Stock or affecting the rights thereof, or warrants, rights or options
to acquire the same, or the dissolution or liquidation of the Company or any
sale or transfer of all or any part of its assets or business or any other
corporate act or proceeding, whether of a similar character or otherwise.
The number of shares covered by the Plan which are not then subject to
outstanding options and all outstanding options and the price per share
payable upon exercise thereof shall be proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of Stock
resulting from the subdivision, split, combination or consolidation of shares
of Stock or any other capital adjustment, the payment of a Stock dividend or
any other increase in such shares effected without receipt of consideration
by the Company, or any decrease therein effected without a distribution of
cash or property in connection therewith.
In the event the Company merges or consolidates with one or more
corporations and the Company is the surviving corporation, thereafter upon
any exercise of an Option, the holder thereof shall be entitled to purchase
in lieu of the number of shares of Stock as to which the Option shall then be
exercisable, the number and class of shares of stock and securities to which
the holder would have been entitled pursuant to the terms of the agreement of
merger or consolidation, if immediately before the merger or
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consolidation the holder had been the holder of record of those shares of
Stock as to which the Option is then exercisable.
In the event the Company merges or consolidates with a wholly-owned
subsidiary for the purpose of reincorporating itself under the laws of
another jurisdiction, the optionees will be entitled to acquire shares of the
common stock of the reincorporated Company upon the same terms and conditions
as were in effect immediately prior to such reincorporation, and the Plan,
unless rescinded by the Board of Directors, will remain the Plan of the
reincorporated Company.
Except as otherwise provided in the preceding paragraph, if the Company
is merged into or consolidated with another corporation under circumstances
where the Company is not the surviving corporation, or if the Company is
liquidated or sells or otherwise disposes of all or substantially all of its
assets to another corporation while unexercised Options remain outstanding
under the Plan, (i) subject to the provisions of clause (iii) below, after
the effective date of such merger, consolidation or sale, as the case may be,
each holder of an outstanding Option shall be entitled, upon exercise of the
Option, to receive in lieu of shares of Stock, shares of such stock or other
securities as the holders of shares of Stock received pursuant to the terms
of the merger, consolidation or sale; (ii) the Board may accelerate the
vesting of any Option so that such Options from and after a date prior to the
effective date of the merger, consolidation, liquidation or sale, as the
case may be, specified by the Board, shall be exercisable in full; and (iii)
all outstanding Options may be cancelled by the Board as of the effective
date of any merger, consolidation, liquidation or sale, provided that notice
of cancellation shall be given to each holder of an Option not less than
thirty (30) days preceding the effective date of the merger, consolidation,
liquidation, sale or disposition, and provided that the Board may in its sole
discretion accelerate the vesting with respect to any Option so that the
Option shall be exercisable in full or in part, as the Board may determine,
during such thirty (30) day period.
Except as expressly provided herein, the issue by the Company of shares
of Stock or other securities of any class or securities convertible into
shares of Stock or other securities of any class for cash or property or for
labor or services, either upon direct sale or upon the exercise of rights or
warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to,
the number, class or price of shares of Stock then subject to outstanding
Options.
17. AMENDMENT OR TERMINATION OF PLAN
The Board may modify, revise or terminate the Plan at any time and from
time to time; provided, however, that no such action
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<PAGE>
shall affect any outstanding Option without the written consent of its
holder. In addition if required in order for the Plan to be eligible for the
benefits of the Securities and Exchange Commission (or a successor rule or
agency), without the further approval of the holders of at least a majority
of the outstanding shares of Stock, the Board may not (i) materially increase
the benefits accruing to optionees under the Plan; (ii) change the aggregate
number of shares of Stock which may be issued under Options pursuant to the
provisions of the Plan; (iii) reduce the option price at which options may be
granted to an amount less than the fair market value per share at the time
the Option is granted; or (iv) change the class of persons eligible to
receive options.
18. REPURCHASE RIGHTS OF THE COMPANY
Unless any optionee's option agreement specifically provides to the
contrary, the provisions of this Section 18 shall apply to each Option
granted under the Plan and to the shares of Stock acquired on exercise
thereof. Shares of Stock acquired by an employee of the Company or a
subsidiary pursuant to an option or Options granted under the Plan shall not
be transferred by him without the written consent of the Company. For a
period of ten (10) years following the termination for any reason of an
optionee's employment or active involvement with the Company (as determined
by the Board of Directors) the Company shall have the right to repurchase
from optionee any or all shares of Stock of the Company held by the optionee
and/or any or all of the vested but unexercised portion of any option granted
under the Plan to such optionee (the "OPTION RIGHTS"). The Company's right of
repurchase shall be exercised by the Company by giving written notice to such
optionee within such ten (10.) year period (the "REPURCHASE NOTICE"). The per
share purchase price for the Stock (the "STOCK PRICE") shall equal the
greater of
(a) Five (5) times earnings per share of the Company
over the four fiscal quarters most recently
completed as of the date of the Repurchase Notice
is given, as determined in accordance with the
generally accepted accounting principles used by
the Company in the preparation of its financial
reports, and
(b) The Weighted Average Selling Price of the Company
stock over the twenty four (24) month period ending
with the calendar month end coinciding with or
immediately preceding the date the Repurchase
Notice is given. As used herein the term "WEIGHTED
AVERAGE SELLING PRICE" shall mean the price per
share obtained by dividing (x) the aggregate
consideration received by the Company or any the
Company stockholder for any shares of the Company
issued or sold by such person by (y) the number of
shares of the Company stock so sold.
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<PAGE>
Sales of securities convertible into or exercisable
for the Company stock shall be considered in
determining the Weighted Average Selling Price and
the Board of Directors good faith determination as
to the consideration received and number of shares
involved shall be binding.
The purchase price for the Option Rights shall equal the difference
between (x) the Stock Price multiplied by the number of shares into which the
Option is exercisable, and (y) the total exercise price for the Option etc.
being repurchased, all as determined as of the date the Repurchase Notice is
given.
The purchase price for the Stock and Option Rights shall be paid in cash
as to at least 25% of the purchase price with the balance being paid by the
issuance of a note of the Company having a maturity of no more than three (3)
years, providing for level amortization of principal and interest over the
term and bearing interest on the same terms as the Company is required to pay
under its bank loans of comparable maturity from its primary lending bank as
of the date of the note, or if the Company is not then a borrower, on the
same terms as the Company last was required to pay on any borrowings of
comparable maturity from financial institutions made within the twelve months
prior to the issuance of the note, or if it has not been a borrower within
the prior twelve months, at a rate equal to the base rate announced by
Citibank, N.A. on the date of the note plus one percent. If such borrowings
were not of comparable maturity, the rate under the borrowings shall be
adjusted to comparable maturity based upon the constant maturity yield curve
tables most recently published by the Federal Reserve Board. The note shall
provide for prepayment of principal and interest in whole or in part at any
time.
The closing of a purchase and sale of Stock and Option Rights pursuant
hereto shall take place at the principal executive offices of the Company on
the thirtieth (30th) day following the exercise by the Company of its
repurchase rights (unless another time is mutually agreed upon), at which
time the optionee shall deliver the stock certificate(s) and option
certificate(s) representing the Stock and Option Rights so sold (duly
endorsed or accompanied by a duly executed stock power or assignment to
effect transfer of ownership to the purchaser or purchasers on the records of
the Company) against the optionee's receipt of payment of the purchase price
for the Stock and Option Rights being purchased.
19. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective and shall be deemed to have been adopted
on April 1, 1989, subject only to ratification by the holders of at least a
majority of the outstanding shares of Stock within twelve (12) months after
that date. Unless the Plan shall have terminated earlier, the Plan shall
terminate on the fifth
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<PAGE>
(5th) anniversary of its effective date, and no Option shall be granted
pursuant to the Plan after the day preceding the fifth (5th) anniversary of
its effective date. Any Option granted prior to termination of the Plan shall
continue in effect in accordance with its terms and the terms of the Plan.
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<PAGE>
EXHIBIT 10.3
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Progenics Pharmaceuticals, Inc.
1993 STOCK OPTION PLAN
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<PAGE>
Progenics Pharmaceuticals, Inc.
1993 STOCK OPTION PLAN
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. PURPOSE ..............................................................1
2. ADMINISTRATION OF THE PLAN ...........................................1
3. OPTION SHARES ........................................................2
4. AUTHORITY TO GRANT OPTIONS ...........................................2
5. WRITTEN AGREEMENT ....................................................2
6. ELIGIBILITY ..........................................................2
7. OPTION PRICE .........................................................3
8. DURATION OF OPTIONS ..................................................3
9. AMOUNT EXERCISABLE ...................................................3
10. EXERCISE OF OPTION ...................................................4
11. NONTRANSFERABILITY OF OPTIONS ........................................5
12. TERMINATION OF EMPLOYMENT OR INVOLVEMENT OF OPTIONEE WITH
THE COMPANY ..........................................................5
13. REQUIREMENTS OF LAW ..................................................5
14. NO RIGHTS AS STOCKHOLDER .............................................6
15. EMPLOYMENT OBLIGATION ................................................6
16. FORFEITURE AS A REQUEST OF TERMINATION FOR CAUSE......................6
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE ...........................7
18. AMENDMENT OR TERMINATION OF PLAN .....................................8
19. REPURCHASE RIGHTS OF THE COMPANY .....................................8
20. RESTRICTIONS ON TRANSFER OR DISPOSITION ..............................9
21. EFFECTIVE DATE AND DURATION OF THE PLAN .............................11
</TABLE>
<PAGE>
Progenics Pharmaceuticals, Inc.
1993 STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1993 Stock Option Plan (the "PLAN") is to encourage
directors, consultants and key employees of Progenics Pharmaceuticals, Inc.
(the "COMPANY") and its Subsidiaries (as hereinafter defined) to continue
their association with the Company, by providing favorable opportunities for
such persons to participate in the ownership of the Company and in its future
growth through the granting of stock options, some of which, as specially
designated under Section 4 hereof, are designed to qualify as incentive stock
options ("ISO") within the meaning of Section 422 of the Internal Revenue
Code of 1986, as amended (the "CODE"). The term "SUBSIDIARY" as used in the
Plan means a corporation of which the Company owns, directly or indirectly
through an unbroken chain of ownership, fifty percent (50%) or more of the
total combined voting power of all classes of stock.
2. ADMINISTRATION OF THE PLAN
a. The Plan shall be administered by a committee (the "COMMITTEE")
consisting of those members of the Board of Directors of the Company who
shall at any time and from time to time be serving as members of the
Compensation Committee of the Board of Directors. The Committee shall select
one of its members as Chairman and shall hold meetings at such times and
places as it may determine. A majority of the Committee shall constitute a
quorum and acts of the Committee at which a quorum is present, or acts
reduced to or approved in writing by all the members of the Committee, shall
be the valid acts of the Committee.
b. The Committee may from time to time determine which key employees of
the Company or any affiliate shall be granted Options under the Plan, whether
the Options granted shall be incentive stock options or nonqualified stock
options, the terms of the Options, and, subject to the provisions of Section
9, the number of shares which may be purchased under an Option granted to an
optionee.
c. The Committee shall report to the Board of Directors the names of
the persons to whom Options are to be granted, the number of shares covered
by each Option and the terms and conditions of each such Option.
d. The Committee shall have the sole authority, in its absolute
discretion, to adopt, amend and rescind such rules and regulations as, in its
opinion, may be advisable in the administration of the Plan; and to continue
and interpret the Plan, the rules and regulations, and the instruments
evidencing Options and loans granted under the Plan and to make all other
determinations deemed necessary or advisable for the administration of the
Plan. All decisions, determinations and interpretations of the Committee
shall be binding on all optionees.
The Plan shall be administered in such a manner as to permit those
Options granted hereunder and specially designated under Section 4 hereof to
qualify as "incentive stock options" as described in Section 422A of the Code.
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3. OPTION SHARES
The stock subject to Options under the Plan shall be shares of the
Company's common stock, par value $0.001 per share (the "STOCK"). The total
amount of the Stock with respect to which Options may be granted shall not
exceed in the aggregate 1,000,000 shares (the "OPTION POOL"); provided that
such aggregate number of shares shall be subject to adjustment in accordance
with the provisions of Section 17. In the event that any outstanding Option
shall expire for any reason or shall terminate by reason of the death or
severance of employment of the optionee, the surrender of any such Option, or
any other cause, the shares of Stock allocable to the unexercised portion of
such Option may again be subject to an option under the Plan.
4. AUTHORITY TO GRANT OPTIONS
The Compensation Committee may grant from time to time, to such
eligible individuals as it shall from time to time determine, an Option or
Options to buy a stated number of shares of Stock under the terms and
conditions of the Plan, each of which Option or Options shall be designated
at the time of grant either a nonqualified stock option ("NQO") or an ISO
within the meaning of Section 422A of the Code. Subject only to any
applicable limitations set forth elsewhere in the Plan, the number of shares
of Stock to be covered by any Option shall be as determined by the
Compensation Committee.
5. WRITTEN AGREEMENT
Options granted hereunder shall be embodied in written option
agreements (which need not be identical) in such forms as the Compensation
Committee may from time to time approve. Option agreements shall be subject
to the terms and conditions prescribed herein and shall be signed by the
optionee and by the President or any Vice President of the Company for and in
the name and on behalf of the Company. Such an option agreement shall
indicate whether the subject Option has been designated a nonqualified stock
option or an incentive stock option. The written option agreement for any
Option shall contain such provisions not inconsistent with this Plan as the
Compensation Committee in its discretion shall deem advisable.
6. ELIGIBILITY
The individuals who shall be eligible for grant of Options under the
Plan shall be key employees (including officers who may be members of the
Board), directors who are not employees and other individuals who render
services of special importance to the management, operation, or development
of the Company or a Subsidiary, and who have contributed or may be expected
to contribute materially to the success of the Company or a Subsidiary.
Options designated ISOs shall not be granted to any individual who is not an
employee of the Company or a Subsidiary.
If required to insure compliance with Section 16 of the Securities
Exchange Act of 1934 (the "EXCHANGE ACT"), the selection of a director as a
participant and the number of shares for which an Option may be granted to
such director shall be determined either (i) by the Board of Directors, of
which a majority, as well as a majority of the directors acting in the
matter, shall be "disinterested persons" (as hereinafter defined) or (ii) by,
or only in accordance with, the recommendations of a committee of three or
more persons having full authority to act in the matter, of which all members
shall be "disinterested persons". For purposes of the Plan, a director or
member of such committee shall be deemed to be "disinterested" only if such
person qualifies as a "disinterested person" within the meaning of Rule 16b-3
under the Exchange Act, or any successor rule, as such term is interpreted
from time to time.
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<PAGE>
7. OPTION PRICE
The price at which shares may be purchased pursuant to an Option shall
be specified by the Compensation Committee at the time the Option is granted,
but in the case of an ISO shall not be less than the fair market value of the
shares of Stock on the date the Option is granted. For purposes of the Plan,
the "fair market value" of a share of Stock at any particular date shall be
determined according to the following rules: (i) if the Stock is not at the
time listed or admitted to trading on a stock exchange, the fair market value
shall be the mean between the lowest reported bid price and highest reported
asked price of the Stock on the date in question in the over-the-counter
market, as such prices are reported in a publication of general circulation
selected by the Compensation Committee and regularly reporting the price of
the Stock in such market; provided, however, that if the price of the Stock
is not so reported, the fair market value shall be determined by the
Compensation Committee, which may take into consideration (1) the price paid
for the Stock in the most recent trade of a substantial number of shares
known to the Compensation Committee to have occurred at arm's length between
willing and knowledgeable investors, or (2) an appraisal by an independent
party, or (3) any other method of valuation undertaken in good faith by the
Compensation Committee or some or all of the above as the Compensation
Committee shall in its discretion elect; or (ii) if the Stock is at the time
listed or admitted to trading on any stock exchange, then the fair market
value shall be the mean between the lowest and highest reported sale prices
of the Stock on the date in question on the principal exchange on which the
Stock is then listed or admitted to trading. If no reported sale of Stock
takes place on the date in question on the principal exchange, then the
reported closing asked price of the Stock on such date on the principal
exchange shall be determinative of fair market value.
In the case of any employee of the Company or a Subsidiary who owns,
directly or indirectly, Stock possessing more than ten percent (10%) of the
total combined voting power of all classes of stock of the Company or of any
corporation which on the date of grant of an Option is a Subsidiary, the
price at which shares may be so purchased pursuant to an ISO shall be not
less than one hundred ten percent (110%) of the fair market value of the
Stock on the date the Option is granted.
8. DURATION OF OPTIONS
The duration of any Option shall be specified by the Compensation
Committee, but no Option designated an ISO shall be exercisable after the
expiration of ten (10) years from the date such Option is granted; and no ISO
granted to an employee of the Company or a Subsidiary who owns stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or a Subsidiary shall be exercisable
after the expiration of five (5) years from the date such Option is granted.
The Compensation Committee, in its discretion, may provide that an Option
shall be exercisable during its entire duration or during any lesser period
of time.
9. AMOUNT EXERCISABLE
Each Option may be exercised so long as it is valid and outstanding
from time to time, in part or as a whole, in such manner and subject to such
conditions as the Compensation Committee in its discretion may provide in the
option agreement; provided, however, that ISO granted to an employee under
the Plan (and any other incentive stock option plans of the Company and its
Subsidiaries) shall not, in the aggregate, become exercisable for the first
time in any one calendar year for shares of Stock with an aggregate fair
market value (determined as of the respective date or dates of grant) of more
than $100,000.
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<PAGE>
10. EXERCISE OF OPTIONS
Each Option may be exercised from time to time in such amounts as is
provided in the option agreement by the delivery of written notice to the
Company setting forth the number of shares with respect to which the Option
is to be exercised, accompanied by payment of the option price of such
shares, which payment shall be made, subject to the alternative provisions of
this Section, in cash or by such cash equivalents, payable to the order of
the Company in an amount in United States dollars equal to the option price
of such shares, as the Compensation Committee in its discretion shall
consider acceptable. Such notice shall be delivered in person to the
Secretary of the Company or shall be sent by registered mail, return receipt
requested, to the Secretary of the Company, in which case delivery shall be
deemed made on the date such notice is deposited in the mail.
Alternatively, payment of the option price may be made, in whole or in
part, in shares of Stock owned by the optionee; provided, however, that the
optionee may not make payment in shares of Stock that he acquired upon the
earlier exercise of any ISO, unless he has held the shares until at least two
(2) years after the date the ISO was granted and at least one (1) year after
the date the ISO was exercised. If payment is made in whole or in part in
shares of Stock, then the optionee shall deliver to the Company in payment of
the option price of the shares with respect of which such Option is exercised
(i) certificates registered in the name of such optionee representing a
number of shares of Stock legally and beneficially owned by such optionee,
free of all liens, claims and encumbrances of every kind and having a fair
market value on the date of delivery of such notice equal to the option price
of the shares with respect to which such Option is to be exercised, such
certificates to be accompanied by stock powers duly endorsed in blank by the
record holder of the shares represented by such certificates; and (ii) if the
option price of the shares with respect to which such Option is to be
exercised exceeds such fair market value, cash or such cash equivalents
payable to the order to the Company, in an amount in United States dollars
equal to the amount of such excess, as the Compensation Committee in its
discretion shall consider acceptable. Notwithstanding the foregoing
provisions of this Section, the Compensation Committee, in its sole
discretion, may refuse to accept shares of Stock in payment of the option
price of the shares with respect to which such Option is to be exercised and,
in that event, any certificates representing shares of Stock which were
delivered to the Company with such written notice shall be returned to such
optionee together with notice by the Company to such optionee of the refusal
of the Compensation Committee to accept such shares of Stock.
Alternatively, if the option agreement so specifies, payment of the
option price may be made in part by a promissory note executed by the
optionee and collaterally secured by the Stock obtained upon exercise of the
Option, providing for repayment at such time or times as the Compensation
Committee shall specify; provided, however, (a) that such promissory note
shall provide for repayment no later than five (5) years from the date of
exercise and for interest at a rate not less than the "base" rate announced
on the date of exercise by Chemical Bank, N.A., (b) that in any event an
amount not less than the par value of the shares of Stock with respect to
which the Option is being exercised must be paid in cash, cash equivalents,
or shares of Stock in accordance with this Section and (c) the payment of
such exercise price by promissory note does not violate any applicable laws
or regulations, including, without limitation, margin lending rules. The
decision as to whether to permit partial payment by a promissory note for
Stock to be issued upon exercise of any Option granted shall rest entirely in
the discretion of the Compensation Committee.
As promptly as practicable after the receipt by the Company of (i)
written notice from the optionee setting forth the number of shares with
respect to which such Option is to be exercised and (ii) payment of the
option price of such shares in the form required by the foregoing provisions
of this Section, the Company shall cause to be delivered to such optionee
certificates representing the number of shares with respect to which such
Option has been so exercised.
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<PAGE>
11. NONTRANSFERABILITY OF OPTIONS
No Option shall be transferable by the optionee, either voluntarily or
by operation of law, except by will or pursuant to the laws of descent and
distribution. During the life of an optionee, an Option shall be exercisable
only by such optionee. Notwithstanding the foregoing, to the extent permitted
by applicable law and Rule 16b-3 of the Securities and Exchange Commission,
the Committee may permit a recipient of a NQO to (a) designate in writing
during the optionee's lifetime a beneficiary to receive and exercise the
optionee's NQO in the event of such optionee's death or (b) transfer a NQO,
subject, in each case to such conditions as the Committee may in its
discretion impose, including, but not limited to, the agreement of the
beneficiary or the transferee to be bound by the terms and conditions of the
option agreement and this Plan.
12. TERMINATION OF EMPLOYMENT OR INVOLVEMENT OF OPTIONEE WITH THE
COMPANY
For purposes of this Section, employment by a Subsidiary shall be
considered employment by the Company. NQOs shall be exercisable following an
optionee's termination of employment or involvement with the Company to the
extent provided below with respect to ISOs, unless otherwise set forth in the
option agreement for such NQOs. Except as may be otherwise expressly provided
herein, Options designated ISOs shall be exercisable after the optionee's
termination of employment with the Company only within the period of three
(3) months after the date the optionee ceases to be in the employ of the
Company, and only to the extent to which the optionee was entitled to
exercise the Option immediately prior to the termination of his or her
employment. If, before the date of expiration of the Option, the optionee
shall be retired in good standing from the employ of the Company for reasons
of age under the then established rules of the Company, the Option shall
terminate on the earlier of such date of expiration or three (3) months after
the date of such retirement. In the event of the death of the holder of an
Option before the date of expiration of such Option and while in the employ
of the Company or during the three (3) month period described in the
preceding sentence, or in the event of the retirement of the optionee for
reasons of disability (within the meaning of Section 22(e)(3) of the Code),
such Option shall terminate on the earlier of such date of expiration or one
(1) year following the date of such death or retirement. After the death of
the optionee, his or her executors, administrators or any persons to whom his
or her Option may be transferred by will or by the laws of descent and
distribution shall have the right at any time prior to such termination to
exercise the Option to the extent to which the optionee was entitled to
exercise the Option on the date of his or her death.
Authorized leave of absence or absence on military or government
service shall not constitute severance of the employment relationship between
the Company and the optionee for purposes of the Plan, provided that either
(i) such absence is for a period of no more than ninety (90) days or (ii) the
optionee's right to re-employment after such absence is guaranteed either by
statute or by contract.
For optionees who are not employees of the Company, options shall be
exercisable for such periods following the termination of the optionee's
involvement with the Company as may be set forth in the specific written
option agreement with the optionee.
13. REQUIREMENTS OF LAW
The Company shall not be required to sell or issue any shares upon the
exercise of any Option if the issuance of such shares shall constitute or
result in a violation by the optionee or the Company of any provisions of any
law, statute or regulation of any governmental authority. Specifically, in
connection with the Securities Act of 1933, as amended (the "SECURITIES
ACT"), upon exercise of any Option the Company shall not be required to issue
such shares unless the Compensation Committee has received evidence
satisfactory to it to the effect that the holder of such Option will not
transfer such shares except
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pursuant to a registration statement in effect under the Securities Act or
unless an opinion of counsel satisfactory to the Company has been received by
the Company to the effect that such registration is not required. Any
determination in this connection by the Compensation Committee shall be
final, binding and conclusive. The Company shall not be obligated to take any
other affirmative action in order to cause the exercise of an Option or the
issuance of shares pursuant thereto to comply with any law or regulations of
any governmental authority, including, without limitation, the Securities Act
or applicable state securities laws.
14. NO RIGHTS AS STOCKHOLDER
No optionee shall have rights as a stockholder with respect to shares
covered by his or her Option until the date of issuance of a stock
certificate for such shares. Except as otherwise provided in Section 17, no
adjustment for dividends or other rights shall be made if the record date
therefor is prior to the date of issuance of such certificate.
15. EMPLOYMENT OBLIGATION
Nothing in this Plan nor the granting of any Option under this Plan
shall (i) impose upon the Company or any Subsidiary any obligation to employ
or continue to employ any optionee, or to engage or retain the services of
any person, (ii) diminish or affect the right of the Company or any
Subsidiary to terminate the employment or services of any person or (iii)
affect the ability of the Company to increase or decrease the compensation of
any person. The existence of any Option shall not be taken into account in
determining any damages relating to termination of employment for any reason.
16. FORFEITURE AS A RESULT OF TERMINATION FOR CAUSE
Notwithstanding anything to the contrary in the Plan, if the
Compensation Committee determines, after full consideration of the facts
presented on behalf of both the Company and an optionee, that
(a) the optionee has been engaged in fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of his or her
employment by or involvement with the Company or a Subsidiary, which
damaged the Company or a Subsidiary, or has made unauthorized disclosure
of trade secrets or other proprietary information of the Company or a
Subsidiary or of a third party who has entrusted such information to
the Company or a Subsidiary,
(b) the optionee's employment or involvement was otherwise terminated
for "cause", as defined in any employment agreement with the optionee, if
applicable, or if there is no such agreement, as determined by the
Compensation Committee, which may determine that "cause" includes among
other matters the failure of the optionee to carry out his or her assigned
duties diligently and in a manner satisfactory to the Company,
then as of the date of such termination of the optionee's employment the
optionee's right to exercise an Option shall terminate and the optionee shall
forfeit all unexercised Options. If an optionee whose behavior the Company
asserts falls within the provisions of (a) or (b) above attempts to exercise
an Option prior to a decision of the Compensation Committee, the Company
shall not be required to recognize such exercise until the Compensation
Committee has made its decision; provided, however, if the Compensation
Committee finds in favor of the optionee then the optionee will be deemed to
have exercised such Options retroactively as of the date he or she originally
gave written notice of his or her attempt to exercise. The decision of the
Compensation Committee as to the cause of an optionee's
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discharge and the damage done to the Company or a Subsidiary shall be final,
binding and conclusive. No decision of the Compensation Committee, however,
shall affect in any manner the finality of the discharge of such optionee by
the Company or a Subsidiary.
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
The existence of outstanding Options shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business or any merger or consolidation of
the Company or any issue of bonds, debentures, preferred or preference stock,
whether or not convertible into the Stock or other securities, ranking prior
to the Stock or affecting the rights thereof, or warrants, rights or options
to acquire the same, or the dissolution or liquidation of the Company or any
sale or transfer of all or any part of its assets or business or any other
corporate act or proceeding, whether of a similar character or otherwise.
The number of shares of Stock in the Option Pool (less the number of
shares theretofore delivered upon exercise of Options) and the number of
shares of Stock covered by any outstanding Option and the price per share
payable upon exercise thereof (provided that in no event shall the option
price be less than the par value of such shares) shall be proportionately
adjusted for any increase or decrease in the number of issued and outstanding
shares of Stock resulting from the subdivision, split, combination or
consolidation of shares of Stock or any other capital adjustment, the payment
of a Stock dividend or any other increase in such shares effected without
receipt of consideration by the Company or any other decrease therein
effected without a distribution of cash or property in connection therewith,
provided, however, that no adjustment shall be made that would constitute a
modification as defined in Section 424(h)(3) of the Code.
In the event the Company merges or consolidates with one or more
corporations and the Company is the surviving corporation, thereafter upon
any exercise of an Option, the holder thereof shall be entitled to purchase
in lieu of the number of shares of Stock as to which the Option shall then be
exercisable, the number and class of shares of stock and securities to which
the holder would have been entitled pursuant to the terms of the agreement of
merger or consolidation if immediately prior to such merger or consolidation,
the holder had been the holder of record of shares of Stock as to which the
Option is then exercisable.
In the event the Company merges or consolidates with a wholly-owned
subsidiary for the purpose of reincorporating itself under the laws of
another jurisdiction, the optionees will be entitled to acquire shares of the
common stock of the reincorporated Company upon the same terms and conditions
as were in effect immediately prior to such reincorporation (unless such
reincorporation involves a change in the number of shares, in which case
proportional adjustments shall be made as provided above) and the Plan,
unless otherwise rescinded by the Board, will remain the Plan of the
reincorporated Company.
Except as otherwise provided in the preceding paragraph, if the Company
is merged into or consolidated with another corporation under circumstances
where the Company is not the surviving corporation, or in other circumstances
in which the Board in its discretion deems it appropriate for the provisions
of this paragraph to apply, or if the Company is liquidated or sells or
otherwise disposes of all or substantially all of its assets to another
corporation while unexercised Options remain outstanding under the Plan, (i)
subject to the provisions of clause (iii) below, after the effective date of
such merger, consolidation or sale, as the case may be, each holder of an
outstanding Option shall be entitled, upon exercise of such Option, to
receive in lieu of shares of Stock, shares of such stock or other securities
as the holders of shares of Stock received pursuant to the terms of the
merger, consolidation or sale; (ii) the Board may waive any limitations
imposed pursuant to Section 9 (even if the effect of such waiver is to
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disqualify the option as an ISO) or Section 19 or Section 20 so that all
Options from and after a date prior to the effective date of such merger,
consolidation, liquidation or sale, as the case may be, specified by the
Board, shall be exercisable in full; and (iii) all outstanding Options may be
canceled by the Board as of the effective date of any such merger,
consolidation, liquidation or sale provided that notice of such cancellation
shall be given to each holder of an Option not less than thirty (30) days
preceding the effective date of such merger, consolidation, liquidation, sale
or disposition and provided that the Board may in its sole discretion waive
any limitations imposed pursuant to Section 9 (even if the effect of such
waiver is to disqualify the option as an ISO) or Section 19 or Section 20
with respect to any Option so that such Option shall be exercisable in full
or in part, as the Board may determine, during such thirty (30) day period.
Except as expressly provided herein, the issue by the Company of shares
of Stock or other securities of any class or securities convertible into or
exchangeable or exercisable for shares of Stock or other securities of any
class for cash or property or for labor or services either upon direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number, class or price of shares
of Stock then subject to outstanding Options.
18. AMENDMENT OR TERMINATION OF PLAN
The Board may modify, revise or terminate the Plan at any time and from
time to time; provided, however, that without the further approval of the
holders of at least a majority of the outstanding shares of Stock, the Board
may not (i) materially increase the benefits accruing to optionees under the
Plan or make any "modifications" as that term is defined under Section
424(h)(3) (or its successor) of the Code if such increase in benefits or
modifications would adversely affect (a) the availability to the Plan of the
protections of Section 16(b) of the Securities Exchange Act of 1934, if
applicable to the Company, or (b) the qualification of the Plan or any
Options for ISO treatment under Section 422 of the Code; (ii) change the
aggregate number of shares of Stock which may be issued under Options
pursuant to the provisions of the Plan; (iii) reduce the option price at
which ISOs may be granted to an amount less than the fair market value per
share at the time the Option is granted; or (iv) change the class of persons
eligible to receive ISOs. Notwithstanding the preceding sentence, the Board
of Directors and/or the Compensation Committee shall in all events have the
power to make such changes in the Plan and in the regulations and
administrative provisions hereunder or in any outstanding Option as, in the
opinion of counsel for the Company, may be necessary or appropriate from time
to time to enable any Option granted pursuant to the Plan to qualify as an
ISO or such other stock option as may be defined under the Code, as amended
from time to time, so as to receive preferential federal income tax
treatment. The termination or any modification or amendment of the Plan shall
not, without the consent of any optionee, affect his or her rights under an
Option previously granted to him or her. With the consent of the optionee
affected, the Board of Directors may amend outstanding option agreements in a
manner not inconsistent with the Plan.
19. REPURCHASE RIGHTS OF THE COMPANY
REPURCHASE RIGHTS. For a period of ten (10) years following the
termination for any reason of an optionee's employment or active involvement
with the Company as determined by the Board of Directors (hereinafter, the
optionee's "RELATIONSHIP") the Company shall have the right to repurchase
from such optionee any or all shares of Stock of the Company held by the
optionee and/or any or all of the vested but unexercised portion of any
Option granted under the Plan to such optionee (the "OPTION RIGHTS"). The
Company's right of repurchase shall be exercised by the Company by giving
written notice to such optionee within such ten (10) year period (the
"REPURCHASE NOTICE"). The per share purchase price for the Stock (the "STOCK
PRICE") shall equal the greater of:
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(a) Five (5) times earnings per share of the Company over the four
fiscal quarters most recently completed as of the date of the
Repurchase Notice is given, as determined in accordance with
the generally accepted accounting principles used by the
Company in the preparation of its financial reports, and
(b) The Weighted Average Selling Price of the Company stock over
the twenty-four (24) month period ending with the calendar
month-end coinciding with or immediately preceding the date
the Repurchase Notice is given. As used herein the term
"WEIGHTED AVERAGE SELLING PRICE" shall mean the price per share
obtained by dividing (x) the aggregate consideration received by
the Company or any stockholder of the Company for any shares
of the Company issued or sold by such person by (y) the number
of shares of the Company stock so sold.
Sales of securities convertible into or exercisable for the
Company stock shall be considered in determining the Weighted
Average Selling Price and the Board of Directors' good faith
determination as to the consideration received and number of
shares involved shall be binding.
The purchase price for the Option Rights shall equal the difference
between (x) the Stock Price multiplied by the number of shares into which the
Option is exercisable, and (y) the total exercise price for the Option being
repurchased, all as determined as of the date the Repurchase Notice is given.
The purchase price for the Stock and Option Rights shall be paid in
cash as to at least 25% of the purchase price with the balance being paid by
the issuance of a Company Note (as hereafter defined).
The closing of a purchase and sale of Stock and Option Rights pursuant
hereto shall take place at the principal executive offices of the Company on
the thirtieth (30th) day following the exercise by the Company of its
repurchase rights (unless another time is mutually agreed upon), at which
time the optionee shall deliver the stock certificate(s) and option
certificate(s) representing the Stock and Option Rights so sold (duly
endorsed or accompanied by a duly executed stock power or assignment to
effect transfer of ownership to the purchaser or purchasers on the records of
the Company) against the optionee's receipt of payment of the purchase price
for the Stock and Option Rights being purchased.
Unless an optionee's option agreement specifically provides to the
contrary, or an optionee has entered into an employment, stockholder or other
agreement with the Company which provides for the repurchase of options or
stock in the event such optionee's employment or involvement with the Company
terminates, the provisions of this Section 19 shall apply to each Option
granted under the Plan and to the shares of Stock acquired on exercise
thereof.
20. RESTRICTIONS ON TRANSFER OR DISPOSITION
Unless an optionee's option agreement specifically provides to the
contrary, the provisions of this Section 20 shall apply to each Option
granted under the Plan and to the shares of Stock acquired on exercise
thereof (the "OPTION STOCK").
(a) RIGHT OF FIRST REFUSAL ON DISPOSITIONS BY OPTIONEE. An optionee may
not sell, assign, transfer or otherwise dispose of any Unvested Stock (as
defined below) without the prior written approval of the Company. In the
event an optionee proposes to sell, assign, transfer or otherwise dispose of
any or all of his Vested Stock (as defined below), or with the Company's
written approval, Unvested Stock, the optionee will notify in writing (the
"NOTIFICATION") the Company of the optionee's intention to do so, specifying
the number of shares of Option Stock proposed to be transferred (the "OFFERED
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SHARES"), the name of the person or persons to whom the optionee proposes to
transfer the Offered Shares (or if no particular purchaser is identified,
then the general class of persons to whom he proposes to transfer the Offered
Shares), and a price per share which shall be the minimum price at which he
proposes to effect the transfer (the "MINIMUM PRICE"). The Notification shall
contain a copy or recitation of all the terms and conditions of the proposed
transfer of the Offered Shares at the Minimum Price to such person or persons
(or class of persons) and an undertaking that a condition of such transfer
shall be the agreement of each transferee to be bound by and be deemed to be
an optionee for the purposes of this Plan. The Notification shall offer to
sell to the Company the Offered Shares, free and clear of any liens or
encumbrances in favor of third persons, at (a) in the case of Vested Stock,
the Minimum Price and (b) in the case of Unvested Stock, the price the
optionee acquired the Offered Shares, adjusted for all splits, stock
dividends and similar adjustments (the "ACQUISITION PRICE").
The Company shall act upon the offer of the optionee by giving written
notice (the "COMPANY'S NOTICE") to the optionee setting forth the Company's
intention as to any or all of the Offered Shares. The Company's Notice shall
be given as soon as practicable after receipt of the Notification, and in all
events within thirty (30) days after such receipt, such thirty (30) day
period being herein referred to as the "COMPANY'S ACCEPTANCE PERIOD."
In the event the Company shall elect to purchase or acquire any of the
Offered Shares, written notice to the optionee of such election to purchase
or so acquire any of the Offered Shares shall, when taken in conjunction with
the Notification, be deemed to constitute a valid and legally binding
purchase and sale agreement as to those Offered Shares.
If the Company fails to accept the offer to sell all of the Offered
Shares, the optionee shall be free to proceed to sell all but not less than
all of the remaining Offered Shares to the person or persons (or class of
persons) specified in the Notification at not less than the Minimum Price. If
the optionee fails to complete his proposed sale within a period of ninety
(90) days after the date of the Notification, then the Offered Shares shall
once again be subject to the requirement of a prior offer pursuant to the
provisions of this Section.
The closing of a purchase and sale of Offered Shares pursuant hereto
shall take place at the principal executive offices of the Company on the
ninetieth (90th) day following the date of the Notification unless another
time is mutually agreed upon, at which time the optionee shall deliver the
stock certificate or certificates representing the Offered Shares so sold
(duly endorsed or accompanied by a duly executed stock power or assignment to
effect transfer of ownership to the purchaser or purchasers on the records of
the Company) against the optionee's receipt of payment in cash (by certified
check, bank cashier's check or wire transfer).
(b) INVOLUNTARY DISPOSITION. It is the intent of the Company that any
involuntary disposition of the shares of Option Stock of the Company owned by
an optionee and still subject to the restrictions under Section 20 of this
Plan, including dispositions pursuant to a divorce or separation proceeding
or any other judicial proceeding, be subject to the prior rights of the
Company hereunder and that any such disposition be deemed to be an offer to
sell to the Company (a) all shares of Unvested Stock at the Acquisition Price
and (b) all shares of Vested Stock at the Repurchase Price.
The Company shall act upon the deemed offer under this Section within
the time periods and following the procedures set forth in Section 20(a),
with the date of the deemed offer being the later of the date of the
Company's receipt of written notice setting forth the existence of such an
involuntary disposition event and the date of such involuntary disposition
event, such later date being the date of Notification for the purpose of
Section 20(a).
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(c) DEATH OF AN OPTIONEE. In the event of the death of an optionee he
will be deemed to have voluntarily terminated his Relationship with the
Company and to have offered to sell to the Company all of his Unvested Stock
at the Acquisition Price.
The Company shall act upon the deemed offer of a deceased optionee as
soon as practicable after the death of the optionee and in any event within
ninety (90) days. If the Company fails to accept the offer to sell all of a
deceased optionee's shares, the representative of the deceased optionee may
proceed to sell, distribute or otherwise dispose of said shares, subject to
the other provisions of this Plan.
(d) DISABILITY OF AN OPTIONEE. In the event of the disability of an
optionee which materially prevents the optionee from performing his work for
the Company, he will be deemed to have voluntarily terminated his
Relationship with the Company and to have offered to sell to the Company all
of his Unvested Stock at the Acquisition Price.
The Company shall act upon the offer of a disabled optionee as soon as
practicable after such disability of the optionee and in any event within
ninety (90) days. If the Company fails to accept the offer to sell all of a
disabled optionee's shares, the disabled optionee or representative of the
disabled optionee may proceed to sell, distribute or otherwise dispose of
said shares, subject to the other provisions of this Plan.
(e) CERTAIN DEFINITIONS.
REPURCHASE PRICE. As used herein the term "REPURCHASE PRICE" shall mean
the fair market value of a share of Stock as determined in good faith by a
majority of the disinterested members of the Board of Directors of the
Company. In making their determination of fair market value of a share of
Stock the Directors will not take into account that the Stock may be illiquid
or may constitute a minority interest in the Company.
COMPANY NOTE. The term "COMPANY NOTE" shall mean a promissory note of
the Company having a maturity of no more than five (5) years, with equal
annual principal payments and bearing interest on the same terms as the
Company is required to pay under its bank loans from its primary lending
bank, or, if it is not then a borrower, on the same terms as it last was
required to pay on such borrowings or, if it has not been a borrower within
the prior twelve months, at an annual rate equal to the prime or base
commercial lending rate announced by Chemical Bank, N.A. on the date of the
note plus one percent (1%) per annum. The note shall provide that if interest
is not paid on a due date, the accrued interest shall be added to the
principal of the note as of such due date. The note shall provide for
prepayment without penalty of principal and interest in whole or in part at
any time.
As used herein, the term "VESTED STOCK" shall mean and include for any
optionee at any time the meaning set forth in the applicable written option
agreement for the Option Stock to which it applies. The term "UNVESTED STOCK"
shall mean and include for any optionee at any time the number of shares of
Option Stock which are not Vested Stock.
(f) PERMITTED TRANSFERS; LIFTING OF RESTRICTIONS. The provisions of
Section 20 shall not apply to any proposed sale, assignment, transfer or
other disposition of Vested Stock pursuant to a registration statement filed
by the Company pursuant to the Securities Act of 1933, as amended (a "Public
Offering")
(g) SECURITIES LAWS; TRANSFERS IN VIOLATION OF PLAN. Notwithstanding
any other provision of this Plan the Company may refuse to permit transfer of
the Offered Shares if in the opinion of its legal counsel such transfer would
violate securities laws or subject the Company to liability thereunder. Any
sale, transfer, pledge or other disposition of shares of Stock which is not
in accordance with the provisions of this Section 20 shall be void and of no
effect and shall not be recognized by the Company.
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21. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective and shall be deemed to have been
adopted on December 2, 1993 subject only to ratification by the holders of at
least a majority of the outstanding shares of Stock within twelve (12) months
after such date. Unless the Plan shall have terminated earlier, the Plan
shall terminate on the tenth (10th) anniversary of its effective date, and no
Option shall be granted pursuant to the Plan after the day preceding the
tenth (10th) anniversary of its effective date.
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Exhibit 10.4
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Progenics Pharmaceuticals, Inc.
1993 Executive Stock Option Plan
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<PAGE>
Progenics Pharmaceuticals, Inc.
1993 Executive Stock Option Plan
TABLE OF CONTENTS
Page
----
1. PURPOSE ............................................................ 1
2. ADMINISTRATION OF THE PLAN ......................................... 1
3. OPTION SHARES ...................................................... 1
4. AUTHORITY TO GRANT OPTIONS ......................................... 2
5. WRITTEN AGREEMENT .................................................. 2
6. ELIGIBILITY ........................................................ 2
7. OPTION PRICE ....................................................... 2
8. DURATION OF OPTIONS ................................................ 3
9. AMOUNT EXERCISABLE ................................................. 3
10. EXERCISE OF OPTION ................................................. 3
11. NONTRANSFERABILITY OF OPTIONS ...................................... 5
12. TERMINATION OF EMPLOYMENT OR INVOLVEMENT OF OPTIONEE WITH
THE COMPANY ........................................................ 5
13. REQUIREMENTS OF LAW ................................................ 5
14. NO RIGHTS AS STOCKHOLDER ........................................... 6
15. EMPLOYMENT OBLIGATION .............................................. 6
16. FORFEITURE AS A RESULT OF TERMINATION FOR CAUSE .................... 6
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE ......................... 7
18. AMENDMENT OR TERMINATION OF PLAN ................................... 8
19. EFFECTIVE DATE AND DURATION OF THE PLAN ............................ 9
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Progenics Pharmaceuticals, Inc.
1993 EXECUTIVE STOCK OPTION PLAN
1. PURPOSE
The purpose of this 1993 Executive Stock Option Plan (the "PLAN") is to
encourage senior executives of Progenics Pharmaceuticals, Inc. (the
"COMPANY") and its Subsidiaries (as hereinafter defined) to continue their
association with the Company, by providing favorable opportunities for such
persons to participate in the ownership of the Company and in its future
growth through the granting of stock options, some of which, as specially
designated under Section 4 hereof, are designed to qualify as "incentive
stock options" ("ISO") within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "CODE"). The term "SUBSIDIARY" as used
in the Plan means a corporation of which the Company owns, directly or
indirectly through an unbroken chain of ownership, fifty percent (50%) or
more of the total combined voting power of all classes of stock.
2. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board of Directors, which shall
have the authority to adopt, amend and rescind such rules and regulations as,
in its opinion, may be advisable in the administration of the Plan. All
questions of interpretation and application of such rules and regulations, of
the Plan or of options granted thereunder (the "OPTIONS") shall be subject to
the determination, which shall be final and binding, of a majority of the
Board of Directors. The Plan shall be administered in such a manner as to
permit those Options granted hereunder and specially designated under Section
4 hereof to qualify as "incentive stock options" as described in Section 422A
of the Code.
3. OPTION SHARES
The stock subject to Options under the Plan shall be shares of the
Company's common stock, par value $0.001 per share (the "STOCK"). The total
amount of the Stock with respect to which Options may be granted shall not
exceed in the aggregate 1,000,000 shares (the "OPTION POOL"); provided that
such aggregate number of shares shall be subject to adjustment in accordance
with the provisions of Section 17. In the event that any outstanding Option
shall expire for any reason or shall terminate by reason of the death or
severance of employment of an optionee, the surrender of any such Option, or
any other cause, the shares of Stock allocable to the unexercised portion of
such Option may again be subject to an option under the Plan.
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4. AUTHORITY TO GRANT OPTIONS
The Board of Directors may grant from time to time, to such eligible
individuals as it shall from time to time determine, an Option or Options to
buy a stated number of shares of Stock under the terms and conditions of the
Plan, each of which Option or Options shall be designated at the time of
grant either a nonqualified option or an "incentive stock option" within the
meaning of Section 422A of the Code. Subject only to any applicable
limitations set forth elsewhere in the Plan, the number of shares of Stock to
be covered by any Option shall be as determined by the Board of Directors.
5. WRITTEN AGREEMENT
Options granted hereunder shall be embodied in written option agreements
(which need not be identical) in such forms as the Board of Directors may
from time to time approve. Option agreements shall be subject to the terms
and conditions prescribed herein and shall be signed by the optionee and by
the President or any Vice President of the Company for and in the name and on
behalf of the Company. Such an option agreement shall indicate whether the
subject Option has been designated a nonqualified option ("NQO") or an ISO.
The written option agreement for any Option shall contain such provisions not
inconsistent with this Plan as the Board of Directors in its discretion shall
deem advisable.
6. ELIGIBILITY
The individuals who shall be eligible for grant of Options under the
Plan shall be senior executive employees (including officers who may be
members of the Board) who have contributed or may be expected to contribute
materially to the success of the Company or a Subsidiary.
If required to insure compliance with Section 16 of the Securities
Exchange Act of 1934 (the "EXCHANGE ACT"), the selection of a senior
executive who is also a director as a participant and the number of shares
for which an Option may be granted to such director shall be determined
either (i) by the Board of Directors, of which a majority, as well as a
majority of the directors acting in the matter, shall be "disinterested
persons" (as hereinafter defined) or (ii) by, or only in accordance with, the
recommendations of a committee of three or more persons having full authority
to act in the matter, of which all members shall be "disinterested persons".
For purposes of the Plan, a director or member of such committee shall be
deemed to be "disinterested" only if such person qualifies as a
"disinterested person" within the meaning of Rule 16b-3 under the Exchange
Act, or any successor rule, as such term is interpreted from time to time.
7. OPTION PRICE
The price at which shares may be purchased pursuant to an Option shall
be specified by the Board of Directors at the time the Option is granted, but
in the case of an ISO shall not be less than the fair market value of the
shares of Stock on the date the Option is granted. For purposes of the Plan,
the "fair market value" of a share of Stock at any particular date shall be
determined according to the following rules: (i) if the Stock is not at the
time listed or admitted to trading on a stock exchange, the fair market value
shall be the mean between the lowest reported bid price and highest reported
asked price of the Stock on the date in question in the over-the-counter
market, as such prices are reported in a publication of general
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circulation selected by the Board of Directors and regularly reporting the
price of the Stock in such market; provided, however, that if the price of
the Stock is not so reported, the fair market value shall be determined by
the Board of Directors, which may take into consideration (1) the price paid
for the Stock in the most recent trade of a substantial number of shares
known to the Board of Directors to have occurred at arm's length between
willing and knowledgeable investors, or (2) an appraisal by an independent
party, or (3) any other method of valuation undertaken in good faith by the
Board of Directors or some or all of the above as the Board of Directors
shall in its discretion elect; or (ii) if the Stock is at the time listed or
admitted to trading on any stock exchange, then the fair market value shall
be the mean between the lowest and highest reported sale prices of the Stock
on the date in question on the principal exchange on which the Stock is then
listed or admitted to trading. If no reported sale of Stock takes place on
the date in question on the principal exchange, then the reported closing
asked price of the Stock on such date on the principal exchange shall be
determinative of fair market value.
In the case of any senior executive employee of the Company or a
Subsidiary who owns, directly or indirectly, Stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Company or of any corporation which on the date of grant of an Option is
a Subsidiary, the price at which shares may be so purchased pursuant to an
ISO shall be not less than one hundred ten percent (110%) of the fair market
value of the Stock on the date the Option is granted.
8. DURATION OF OPTIONS
The duration of any Option shall be specified by the Board of Directors,
but no Option designated an ISO shall be exercisable after the expiration of
ten (10) years from the date such Option is granted; and no ISO granted to a
senior executive employee of the Company or a Subsidiary who owns stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or a Subsidiary shall be exercisable
after the expiration of five (5) years from the date such Option is granted.
The Board of Directors, in its discretion, may provide that an Option shall
be exercisable during its entire duration or during any lesser period of time.
9. AMOUNT EXERCISABLE
Each Option may be exercised so long as it is valid and outstanding from
time to time, in part or as a whole, in such manner and subject to such
conditions as the Board of Directors in its discretion may provide in the
option agreement; provided, however, that incentive stock options granted to
a senior executive employee under the Plan (and any other ISO plans of the
Company and its Subsidiaries) shall not, in the aggregate, become exercisable
for the first time in any one calendar year for shares of Stock with an
aggregate fair market value (determined as of the respective date or dates of
grant) of more than $100,000.
10. EXERCISE OF OPTIONS
Each Option may be exercised from time to time in such amounts as is
provided in the option agreement by the delivery of written notice to the
Company setting forth the number of shares with respect to which the Option
is to be exercised, accompanied by payment of the option price of such
shares, which payment shall be made, subject to the alternative provisions of
this Section, in cash or by
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such cash equivalents, payable to the order of the Company in an amount in
United States dollars equal to the option price of such shares, as the Board
of Directors in its discretion shall consider acceptable. Such notice shall
be delivered in person to the Secretary of the Company or shall be sent by
registered mail, return receipt requested, to the Secretary of the Company,
in which case delivery shall be deemed made on the date such notice is
deposited in the mail.
Alternatively, payment of the option price may be made, in whole or in
part, in shares of Stock owned by the optionee; provided, however, that the
optionee may not make payment in shares of Stock that he acquired upon the
earlier exercise of any ISO, unless he has held the shares until at least two
(2) years after the date the ISO was granted and at least one (1) year after
the date the ISO was exercised. If payment is made in whole or in part in
shares of Stock, then the optionee shall deliver to the Company in payment of
the option price of the shares with respect of which such Option is exercised
(i) certificates registered in the name of such optionee representing a
number of shares of Stock legally and beneficially owned by such optionee,
free of all liens, claims and encumbrances of every kind and having a fair
market value on the date of delivery of such notice equal to the option price
of the shares with respect to which such Option is to be exercised, such
certificates to be accompanied by stock powers duly endorsed in blank by the
record holder of the shares represented by such certificates; and (ii) if the
option price of the shares with respect to which such Option is to be
exercised exceeds such fair market value, cash or such cash equivalents
payable to the order to the Company, in an amount in United States dollars
equal to the amount of such excess, as the Board of Directors in its
discretion shall consider acceptable. Notwithstanding the foregoing
provisions of this Section, except as otherwise set forth in the option
agreement for an Option the Board of Directors, in its sole discretion, may
refuse to accept shares of Stock in payment of the option price of the shares
with respect to which such Option is to be exercised and, in that event, any
certificates representing shares of Stock which were delivered to the Company
with such written notice shall be returned to such optionee together with
notice by the Company to such optionee of the refusal of the Board of
Directors to accept such shares of Stock.
Alternatively, if the option agreement so specifies, payment of the
option price may be made in part by a promissory note executed by the
optionee and collaterally secured by the Stock obtained upon exercise of the
Option, providing for repayment at such time or times as the Board of
Directors shall specify; provided, however, (a) that such promissory note
shall provide for repayment no later than five (5) years from the date of
exercise and for interest at a rate not less than the "base" rate announced
on the date of exercise by Chemical Bank, N.A., (b) that in any event an
amount not less than the par value of the shares of Stock with respect to
which the Option is being exercised must be paid in cash, cash equivalents,
or shares of Stock in accordance with this Section and (c) the payment of
such exercise price by promissory note does not violate any applicable laws
or regulations, including, without limitation, margin lending rules. Except
as set forth in the option agreement for an Option, the decision as to
whether to permit partial payment by a promissory note for Stock to be issued
upon exercise of any Option granted shall rest entirely in the discretion of
the Board of Directors.
As promptly as practicable after the receipt by the Company of (i)
written notice from the optionee setting forth the number of shares with
respect to which such Option is to be exercised and (ii) payment of the
option price of such shares in the form required by the foregoing provisions
of this Section, the Company shall cause to be delivered to such optionee
certificates representing the number of shares with respect to which such
Option has been so exercised.
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11. NONTRANSFERABILITY OF OPTIONS
No Option shall be transferable by the optionee, either voluntarily or
by operation of law, except by will or pursuant to the laws of descent and
distribution. During the life of an optionee, an Option shall be exercisable
only by such optionee.
12. TERMINATION OF EMPLOYMENT OR INVOLVEMENT OF OPTIONEE WITH THE
COMPANY
For purposes of this Section, employment by a Subsidiary shall be
considered employment by the Company. NQOs shall be exercisable following an
optionee's termination of employment or involvement with the Company to the
extent provided below with respect to ISOs, unless otherwise set forth in the
option agreement for such NQOs. Except as may be otherwise expressly provided
herein, Options designated ISOs shall be exercisable after the optionee's
termination of employment with the Company only within the period of three
(3) months after the date the optionee ceases to be in the employ of the
Company, and only to the extent to which the optionee was entitled to
exercise the Option immediately prior to the termination of his or her
employment. If, before the date of expiration of the Option, the optionee
shall be retired in good standing from the employ of the Company for reasons
of age under the then established rules of the Company, the Option shall
terminate on the earlier of such date of expiration or three (3) months after
the date of such retirement. In the event of the death of the holder of an
Option before the date of expiration of such Option and while in the employ
of the Company or during the three (3) month period described in the
preceding sentence, or in the event of the retirement of the optionee for
reasons of disability (within the meaning of Section 22(e)(3) of the Code),
such Option shall terminate on the earlier of such date of expiration or one
(1) year following the date of such death or retirement. After the death of
the optionee, his or her executors, administrators or any persons to whom his
or her Option may be transferred by will or by the laws of descent and
distribution shall have the right at any time prior to such termination to
exercise the Option to the extent to which the optionee was entitled to
exercise the Option on the date of his or her death.
Authorized leave of absence or absence on military or government
service shall not constitute severance of the employment relationship between
the Company and the optionee for purposes of the Plan, provided that either
(i) such absence is for a period of no more than ninety (90) days or (ii) the
optionee's right to re-employment after such absence is guaranteed either by
statute or by contract.
13. REQUIREMENTS OF LAW
The Company shall not be required to sell or issue any shares upon the
exercise of any Option if the issuance of such shares shall constitute or
result in a violation by the optionee or the Company of any provisions of any
law, statute or regulation of any governmental authority. Specifically, in
connection with the Securities Act of 1933, as amended (the "SECURITIES
ACT"), upon exercise of any Option the Company shall not be required to issue
such shares unless the Board of Directors has received evidence satisfactory
to it to the effect that the holder of such Option will not transfer such
shares except pursuant to a registration statement in effect under the
Securities Act or unless an opinion of counsel satisfactory to the Company
has been received by the Company to the effect that such registration is not
required. Any determination in this connection by the Board of Directors
shall be final, binding and conclusive. The Company shall not be obligated to
take any other affirmative action in order to cause the exercise of
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an Option or the issuance of shares pursuant thereto to comply with any law
or regulations of any governmental authority, including, without limitation,
the Securities Act or applicable state securities laws.
14. NO RIGHTS AS STOCKHOLDER
No optionee shall have rights as a stockholder with respect to shares
covered by his or her Option until the date of issuance of a stock
certificate for such shares. Except as otherwise provided in Section 17, no
adjustment for dividends or other rights shall be made if the record date
therefor is prior to the date of issuance of such certificate.
15. EMPLOYMENT OBLIGATION
Nothing in this Plan nor the granting of any Option under this Plan
shall (i) impose upon the Company or any Subsidiary any obligation to employ
or continue to employ any optionee, or to engage or retain the services of
any person, (ii) diminish or affect the right of the Company or any
Subsidiary to terminate the employment or services of any person or (iii)
affect the ability of the Company to increase or decrease the compensation of
any person. The existence of any Option shall not be taken into account in
determining any damages relating to termination of employment for any reason.
16. FORFEITURE AS A RESULT OF TERMINATION FOR CAUSE
Notwithstanding anything to the contrary in the Plan, and unless an
option agreement provides otherwise, if the Board of Directors determines,
after full consideration of the facts presented on behalf of both the Company
and an optionee, that
(a) the optionee has been engaged in fraud, embezzlement, theft,
commission of a felony or proven dishonesty in the course of his or
her employment by or involvement with the Company or a Subsidiary,
which damaged the Company or a Subsidiary, or has made unauthorized
disclosure of trade secrets or other proprietary information of the
Company or a Subsidiary or of a third party who has entrusted such
information to the Company or a Subsidiary,
(b) the optionee's employment or involvement was otherwise terminated for
"cause", as defined in any employment agreement with the optionee,
if applicable, or if there is no such agreement, as determined by
the Board of Directors, which may determine that "cause" includes
among other matters the failure of the optionee to carry out his or
her assigned duties diligently and in a manner satisfactory to the
Company,
then as of the date of such termination of the optionee's employment the
optionee's right to exercise an Option shall terminate and the optionee shall
forfeit all unexercised Options. If an optionee whose behavior the Company
asserts falls within the provisions of (a) or (b) above attempts to exercise
an Option prior to a decision of the Board of Directors, the Company shall
not be required to recognize such exercise until the Board of Directors has
made its decision; provided, however, if the Board of Directors finds in
favor of the optionee then the optionee will be deemed to have exercised such
Options retroactively as of the date he or she originally gave written notice
of his or her attempt to exercise. The
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decision of the Board of Directors as to the cause of an optionee's discharge
and the damage done to the Company or a Subsidiary shall be final, binding
and conclusive. No decision of the Board of Directors, however, shall affect
in any manner the finality of the discharge of such optionee by the Company
or a Subsidiary.
17. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE
The existence of outstanding Options shall not affect in any way the
right or power of the Company or its stockholders to make or authorize any
adjustments, recapitalizations, reorganizations or other changes in the
Company's capital structure or its business or any merger or consolidation of
the Company or any issue of bonds, debentures, preferred or preference stock,
whether or not convertible into the Stock or other securities, ranking prior
to the Stock or affecting the rights thereof, or warrants, rights or options
to acquire the same, or the dissolution or liquidation of the Company or any
sale or transfer of all or any part of its assets or business or any other
corporate act or proceeding, whether of a similar character or otherwise.
The number of shares of Stock in the Option Pool (less the number of
shares theretofore delivered upon exercise of Options) and the number of
shares of Stock covered by any outstanding Option and the price per share
payable upon exercise thereof (provided that in no event shall the option
price be less than the par value of such shares) shall be proportionately
adjusted for any increase or decrease in the number of issued and outstanding
shares of Stock resulting from the subdivision, split, combination or
consolidation of shares of Stock or any other capital adjustment, the payment
of a Stock dividend or any other increase in such shares effected without
receipt of consideration by the Company or any other decrease therein
effected without a distribution of cash or property in connection therewith,
provided, however, that no adjustment shall be made that would constitute a
modification as defined in Section 424(h)(3) of the Code.
In the event the Company merges or consolidates with one or more
corporations and the Company is the surviving corporation, thereafter upon
any exercise of an Option, the holder thereof shall be entitled to purchase
in lieu of the number of shares of Stock as to which the Option shall then be
exercisable, the number and class of shares of stock and securities to which
the holder would have been entitled pursuant to the terms of the agreement of
merger or consolidation if immediately prior to such merger or consolidation,
the holder had been the holder of record of shares of Stock as to which the
Option is then exercisable.
In the event the Company merges or consolidates with a wholly-owned
subsidiary for the purpose of reincorporating itself under the laws of
another jurisdiction, the optionees will be entitled to acquire shares of the
common stock of the reincorporated Company upon the same terms and conditions
as were in effect immediately prior to such reincorporation (unless such
reincorporation involves a change in the number of shares, in which case
proportional adjustments shall be made as provided above) and the Plan,
unless otherwise rescinded by the Board, will remain the Plan of the
reincorporated Company.
Except as otherwise provided in the preceding paragraph or in an
optionee's employment agreement or option agreement, if the Company is merged
into or consolidated with another corporation under circumstances where the
Company is not the surviving corporation, or in other circumstances in which
the Board in its discretion deems it appropriate for the provisions of this
paragraph to apply, or if the Company is liquidated or sells or otherwise
disposes of all or substantially all of its assets to another
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corporation while unexercised Options remain outstanding under the Plan, (i)
subject to the provisions of clause (iii) below, after the effective date of
such merger, consolidation or sale, as the case may be, each holder of an
outstanding Option shall be entitled, upon exercise of such Option, to
receive in lieu of shares of Stock, shares of such stock or other securities
as the holders of shares of Stock received pursuant to the terms of the
merger, consolidation or sale; (ii) the Board may waive any limitations
imposed pursuant to Section 9 (even if the effect of such waiver is to
disqualify the option as an ISO) so that all Options from and after a date
prior to the effective date of such merger, consolidation, liquidation or
sale, as the case may be, specified by the Board, shall be exercisable in
full; and (iii) all outstanding Options may be canceled by the Board as of
the effective date of any such merger, consolidation, liquidation or sale
provided that notice of such cancellation shall be given to each holder of an
Option not less than thirty (30) days preceding the effective date of such
merger, consolidation, liquidation, sale or disposition and provided that the
Board may in its sole discretion waive any limitations imposed pursuant to
Section 9 (even if the effect of such waiver is to disqualify the option as
an ISO) with respect to any Option so that such Option shall be exercisable
in full or in part, as the Board may determine, during such thirty (30) day
period.
Except as expressly provided herein, the issue by the Company of shares
of Stock or other securities of any class or securities convertible into or
exchangeable or exercisable for shares of Stock or other securities of any
class for cash or property or for labor or services either upon direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such
shares or other securities, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number, class or price of shares
of Stock then subject to outstanding Options.
18. AMENDMENT OR TERMINATION OF PLAN
The Board may modify, revise or terminate the Plan at any time and from
time to time; provided, however, that without the further approval of the
holders of at least a majority of the outstanding shares of Stock, the Board
may not (i) materially increase the benefits accruing to optionees under the
Plan or make any "modifications" as that term is defined under Section
424(h)(3) (or its successor) of the Code if such increase in benefits or
modifications would adversely affect (a) the availability to the Plan of the
protections of Section 16(b) of the Securities Exchange Act of 1934, if
applicable to the Company, or (b) the qualification of the Plan or any
Options for ISO treatment under Section 422 of the Code; (ii) change the
aggregate number of shares of Stock which may be issued under Options
pursuant to the provisions of the Plan; (iii) reduce the option price at
which ISOs may be granted to an amount less than the fair market value per
share at the time the Option is granted; or (iv) change the class of persons
eligible to receive ISOs. Notwithstanding the preceding sentence, the Board
of Directors shall in all events have the power to make such changes in the
Plan and in the regulations and administrative provisions hereunder or in any
outstanding Option as, in the opinion of counsel for the Company, may be
necessary or appropriate from time to time to enable any Option granted
pursuant to the Plan to qualify as an ISO or such other stock option as may
be defined under the Code, as amended from time to time, so as to receive
preferential federal income tax treatment. The termination or any
modification or amendment of the Plan shall not, without the consent of an
optionee, affect his or her rights under an Option previously granted to him
or her. With the consent of the optionee affected, the Board of Directors may
amend outstanding option agreements in a manner not inconsistent with the
Plan.
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19. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective and shall be deemed to have been adopted
on December 15, 1993 subject only to ratification by the holders of at least
a majority of the outstanding shares of Stock within twelve (12) months after
such date. Unless the Plan shall have terminated earlier, the Plan shall
terminate on the tenth (10th) anniversary of its effective date, and no
Option shall be granted pursuant to the Plan after the day preceding the
tenth (10th) anniversary of its effective date.
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Exhibit 10.5
PROGENICS PHARMACEUTICALS, INC.
1996 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN
The purpose of the Progenics Pharmaceuticals, Inc. 1996 Stock Incentive
Plan is to promote the interests of the Company and its shareholders by
strengthening the Company's ability to attract, motivate and retain employees,
advisors and consultants of the Company, and to provide a means to encourage
stock ownership and a proprietary interest in the Company by employees,
consultants and advisors to the Company upon whose judgment, initiative, and
efforts the financial success and growth of the business of the Company largely
depend.
2. DEFINITIONS
(a) "Award" means an award of an Option, Restricted Stock, Stock
Appreciation Right, Performance Award or Phantom Stock granted under the Plan.
(b) "Award Agreement" means an agreement entered into between the Company
and a Participant setting forth the terms and conditions of an Award granted to
a Participant.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Committee" means the Compensation Committee of the Board, unless the
Board appoints another committee to administer the Plan under Section 4 hereof.
(f) "Common Stock" means the $0.001 par value common stock of the Company.
(g) "Company" means Progenics Pharmaceuticals, Inc., a Delaware
corporation.
(h) "Date of Grant" means the date on which an Award under the Plan is
made by the Committee, or such later date as the Committee may specify that the
Award becomes effective.
(i) "Eligible Person" means an Employee, advisor or consultant of the
Company or any of its Subsidiaries, but shall not include a director who is not
an Employee of the Company.
(j) "Employee" means any person who is an employee of the Company or of
any of its Subsidiaries.
(k) "Exchange Act" means the Securities Exchange Act of 1934, as amended.
(l) "Fair Market Value" means the last reported sales prices of the Common
Stock on the Nasdaq National Market on the date as of which fair market value is
to be determined or, in the absence of any reported sales of Common Stock on
such date, on the first preceding date on which any such sale shall have been
reported. If Common Stock is not listed on the Nasdaq National Market on the
date as of which fair market value is to be determined, the Committee shall
determine in good faith the fair market value in whatever manner it considers
appropriate.
<PAGE>
(m) "Incentive Stock Option" means an option to purchase Common Stock that
is intended to qualify under section 422 of the Code and the Treasury
Regulations thereunder.
(n) "Nonqualified Stock Option" means an option to purchase Common Stock
that is not an Incentive Stock Option.
(o) "Option" means an Incentive Stock Option or a Nonqualified Stock
Option granted under Section 6 hereof.
(p) "Participant" means any Eligible Person who has received an Award
under the Plan.
(q) "Phantom Stock" means an Award under Section 10 hereof entitling a
Participant to a payment at the end of a vesting period of a unit value based on
the Fair Market Value of a share of Common Stock.
(r) "Plan" means the 1996 Stock Incentive Plan as set forth herein, as it
may be amended from time to time.
(s) "Performance Award" means an Award made under Section 9 hereof
entitling a Participant to a payment based on the value of Common Stock (a
"Performance Share") or based on specified dollar units (a "Performance Unit")
at the end of a performance period if certain conditions as may be established
by the Committee are satisfied.
(t) "Restricted Stock" means an Award under Section 8 hereof entitling a
Participant to shares of Common Stock that are nontransferable and subject to
forfeiture until specific conditions established by the Committee are satisfied.
(u) "Rule 16b-3" means Rule 16b-3 adopted by the Securities and Exchange
Commission under the Exchange Act, as the same may be amended from time to time,
or any subsequent rule that my be adopted to replace such rule.
(v) "Stock Appreciation Right" or "SAR" means an Award under Section 7
hereof entitling a Participant to receive an amount, representing the difference
between the base price per share of the right and the Fair Market Value of a
share of Common Stock on the date of exercise.
(w) "Subsidiary" means a subsidiary corporation of the Company, within the
meaning of section 424(f) of the Code.
3. SHARES OF COMMON STOCK SUBJECT TO THE PLAN
3.1 NUMBER OF SHARES. Subject to the following provisions of this Section
3, the aggregate number of shares of Common Stock that may be issued or
transferred or exercised pursuant to Awards under the Plan is 1,000,000 shares
of Common Stock. The shares of Common Stock to be delivered under the Plan will
be made available, at the discretion of the Board or the Committee, either from
authorized but unissued shares of Common Stock or from shares of Common Stock
held in the Company's treasury. If any share of Common Stock that is the
subject of an Award is not issued or transferred and ceases to be issuable or
transferable for any reason, such share of Common Stock will no longer be
charged against such maximum share limitation and may again be made subject to
Awards under the Plan.
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3.2 ADJUSTMENTS. If there shall occur any recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other
distribution with respect to the shares of Common Stock, or any similar
corporate transaction or event in respect of the Common Stock, then the
Committee shall, in the manner and to the extent that it deems appropriate and
equitable to the Participants and consistent with the terms of this Plan, cause
a proportionate adjustment to be made in (i) the maximum number and kind of
shares provided in Section 3.1 hereof, (ii) the number and kind of shares,
units, or other securities subject to the then outstanding Awards, and (iii) the
price for each share or unit or other right subject to then outstanding Awards
without change in the aggregate purchase price or value as to which such Awards
remain exercisable or subject to restrictions; (iv) the performance targets or
goals appropriate to any other outstanding Performance Awards, or (v) any other
terms that are affected by the event.
4. ADMINISTRATION OF THE PLAN
4.1 COMMITTEE MEMBERS. The Plan will be administered by the Committee,
which will consist of two or more persons who satisfy the requirements for a
"disinterested director" under Rule 16b-3. The Committee has and may exercise
such powers and authority of the Board as may be necessary or appropriate for
the Committee to carry out its functions as described in the Plan. No member of
the Board nor the Committee will be liable for any action or determination made
in good faith by the Board or the Committee with respect to the Plan or any
Award under it.
4.2 DISCRETIONARY AUTHORITY. Subject to the express limitation of the
Plan, the Committee has authority in its discretion to determine the Eligible
Persons to whom, and the time or times at which, Awards may be granted, the
number of shares, units or other rights subject to each Award, the exercise,
base or purchase price of an Award (if any), the time or times at which an Award
will become vested, exercisable or payable and the duration of the Award. The
Committee also has discretionary authority to interpret the Plan, to make all
factual determinations under the Plan, and to determine the terms and provisions
of the respective Award Agreements and to make all other determinations
necessary or advisable for Plan administration. The Committee has authority to
prescribe, amend, and rescind rules and regulations relating to the Plan. All
interpretations, determinations, and actions by the Committee will be final,
conclusive, and binding upon all parties.
4.3 CHANGES TO AWARDS. The Committee shall have the authority to effect,
at any time and from time to time, with the consent of the affected
Participants, (i) the cancellation of any or all outstanding Awards and the
grant in substitution therefor of new Awards covering the same or different
numbers of shares of Common Stock and having an exercise or base price which may
be the same as or different than the exercise or base price of the cancelled
Awards or (ii) the amendment of the terms of any and all outstanding Awards.
The Committee may in its discretion accelerate the vesting or exercisability of
an Award at any time.
5. ELIGIBILITY AND AWARDS
All Eligible Persons are eligible to be designated by the Committee to
receive an Award under the Plan. The Committee has authority, in its sole
discretion, to determine and designate from time to time those Eligible Persons
who are to be granted Awards, and the type and amount of Award to be granted.
Each Award will be evidenced by an Award Agreement as described in Section 11
hereof between the Company and the Participant that may include any terms and
conditions consistent with the Plan as the Committee may determine.
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6. STOCK OPTIONS
6.1 GRANT OF OPTION; EXERCISE PRICE. An Option may be granted to any
Eligible Person selected by the Committee; PROVIDED, HOWEVER, that only
Employees meeting the requirements of Treasury Regulation Section 1.421-7(h)
shall be eligible for Awards of Incentive Stock Options. Each Option shall be
designated, at the discretion of the Committee, as an Incentive Stock Option or
a Nonqualified Stock Option. The exercise price of the Option shall be
determined by the Committee; PROVIDED, HOWEVER, that the exercise price of an
Incentive Stock Option shall not be less than 100 percent of the Fair Market
Value of the Common Stock subject to the Option on the Date of Grant.
6.2 VESTING; TERM OF OPTION. The Committee, in its sole discretion, shall
prescribe in the Award Agreement for a Participant the time or times at which an
Option or portion thereof shall become vested and exercisable, and may
accelerate the exercisability of any Option at any time. An Option may become
vested and exercisable upon a Participant's retirement, death disability or
other event to the extent provided in an Award Agreement. The period during
which a vested Option may be exercised shall be ten years from the Date of
Grant, unless a shorter exercise period is specified by the Committee in an
Award Agreement.
6.3 OPTION EXERCISE; WITHHOLDING. An Option may be exercised in whole or
in part at any time, with respect to whole shares only, within the period
permitted for the exercise thereof, and shall be exercised by written notice of
intent to exercise the Option with respect to a specified number of shares
delivered to the Company at its principal office, and payment in full to the
Company at said office of the amount of the exercise price for the number of
shares of the Common Stock with respect to which the Option is then being
exercised. Payment of the exercise price shall be made (i) in cash or by cash
equivalent, (ii) at the discretion of the Committee, in Common Stock (not
subject to limitations on transfer) valued at the Fair Market Value of such
shares on the trading date immediately preceding the date of exercise or (iii)
at the discretion of the Committee, by a combination of such cash and such
Common Stock. In addition to and at the time of payment of the exercise price,
the Participant shall pay to the Company in cash or, at the discretion of the
Committee, in Common Stock the full amount of all federal and state withholding
and other employment taxes applicable to the taxable income of such Participant
resulting from such exercise.
6.4 ADDITIONAL RULES FOR INCENTIVE STOCK OPTIONS.
(a) ANNUAL LIMITS. No Incentive Stock Option shall be granted to a
Participant as a result of which the aggregate fair market value (determined as
of the Date of Grant) of the stock with respect to which incentive stock options
are exercisable for the first time in any calendar year under the Plan, and any
other stock option plans of the Company, any Subsidiary or any parent
corporation, would exceed $100,000, determined in accordance with section 422(d)
of the Code. This limitation shall be applied by taking options into account in
the order in which granted.
(b) TERMINATION OF EMPLOYMENT. Any Incentive Stock Option granted under
the Plan shall be subject to such limitations on the period of exercise
following termination of employment, including such special rules relating to
death and disability, as shall be determined by the Committee to be consistent
with section 422 of the Code and Treasury Regulations thereunder and set forth
in the applicable Award Agreement.
(c) TEN-PERCENT OWNERS. Notwithstanding any other provisions of this Plan
to the contrary, in the case of an Incentive Stock Option granted to an Employee
who, at the time an Incentive Stock Options is granted, owns stock possessing
more than ten percent of the total combined voting power of all classes of stock
of the Company, its parent, if any, or any Subsidiary, as determined under
sections 422(b)(6) and 424(d) of the Code, (i) the period during which any such
Incentive Stock Option may be exercised shall not be greater than five years
from the Date of Grant and (ii) the exercise price
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of such Incentive Stock Option shall not be less than 110 percent of the Fair
Market Value of a share of Common Stock on the Date of Grant.
(d) DISQUALIFYING DISPOSITIONS. If shares of Common Stock acquired by
exercise of an Incentive Stock Option are disposed of within two years following
the Date of Grant or one year following the transfer of such shares to the
Participant upon exercise, the Participant shall, promptly following such
disposition, notify the Company in writing of the date and terms of such
disposition and provide such other information regarding the disposition as the
Committee may reasonably require.
7. STOCK APPRECIATION RIGHTS
7.1 GRANT OF SARs. A Stock Appreciation Right granted to a Participant is
an Award in the form of a right to receive, upon surrender of the right, but
without other payment, an amount based on appreciation in the value of the
Common Stock over a base price established for the Award, payable in cash,
Common Stock or such other form or combination of forms of payout, exercisable
at such time or times and upon conditions as may be approved by the Committee.
7.2 TANDEM SARs. A Stock Appreciation Right may be granted in connection
with an Option, either at the time of grant or at any time thereafter during the
term of the Option. An SAR granted in connection with an Option will entitle
the holder, upon exercise, to surrender such Option or any portion thereof to
the extent unexercised, with respect to the number of shares as to which such
SAR is exercised, and to receive payment of an amount computed as described
below. Such Option will, to the extent and when surrendered, cease to be
exercisable. An SAR granted in connection with an Option hereunder will be
exercisable at such time or times, and only to the extent, that a related Option
is exercisable, and will expire no later than the related Option expires. Upon
the exercise of an SAR granted in connection with an Option, the holder will be
entitled to receive payment of an amount determined by multiplying: (i) the
difference between the exercise price of a share of Common Stock specified in
the related Option and the Fair Market Value of a share of Common Stock on the
date of exercise of such SAR, by (ii) the number of shares as to which such SAR
will have been exercised.
7.3 FREESTANDING SARs. A Stock Appreciation Right may be granted without
relationship to an Option and, in such case, will be exercisable as determined
by the Committee, but in no event after 10 years from the Date of Grant. The
base price of an SAR granted without relationship to an Option shall be
determined by the Committee in its sole discretion. An SAR granted without
relationship to an Option will entitle the holder, upon exercise of the SAR, to
receive payment of an amount determined by multiplying: (i) the difference
between the base price of the SAR and the Fair Market Value of a share of Common
Stock on the date of exercise of such SAR, by (ii) the number of shares as to
which such SAR will have been exercised.
7.4 PAYMENT OF SARs. Payment of the amount determined under Section 7.2
or 7.3 hereof may be made, in the discretion of the Committee, in cash, in
shares of Common Stock valued at their Fair Market Value on the date of exercise
or in a combination of cash and shares of Common Stock.
8. RESTRICTED STOCK
8.1 GRANTS OF RESTRICTED STOCK. An award of Restricted Stock to a
Participant represents shares of Common Stock that are issued subject to
restrictions on transfer and such other restrictions on incidents of ownership
and forfeiture conditions as the Committee may determine. The restrictions
imposed upon Restricted Stock will lapse in accordance with a schedule or other
conditions as determined by the Committee. The Committee may, in connection
with an award of Restricted Stock, require the payment of a specified purchase
price.
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8.2 RESTRICTIONS. Shares of Restricted Stock may not be transferred,
assigned or subject to any encumbrance, pledge or charge until all applicable
restrictions are removed or expire or unless otherwise allowed by the Committee.
The Committee may require the Participant to enter into an escrow agreement
providing that the certificates representing Restricted Stock granted or sold
pursuant to the Plan will remain in the physical custody of an escrow holder
until all restrictions are removed or expire. Each certificate representing
Restricted Stock granted pursuant to the Plan will bear a legend making
appropriate reference to the restrictions imposed. The Committee may impose
such conditions on any shares of Restricted Stock as it may deem advisable,
including, without limitation, restrictions under the Securities Act of 1933, as
amended, under the requirements of any stock exchange upon which such shares of
the same class are then listed, and under any blue sky or other securities laws
applicable to such shares.
8.3 RIGHTS AS STOCKHOLDER. Subject to the foregoing provisions of this
Section 8 and the applicable Award Agreement, Section 8.1 hereof, the holder
will have all rights of a shareholder with respect to shares of Restricted Stock
granted to him or her, including the right to vote the shares and receive all
dividends and other distributions paid or made with respect thereto, unless the
Committee determines otherwise at the time the Restricted Stock is granted.
8.4 SECTION 83(b) ELECTION. If a Participant makes an election pursuant
to section 83(b) of the Code, the Participant shall be required to promptly file
a copy of such election with the Company.
9. PERFORMANCE AWARDS
9.1 GRANT OF PERFORMANCE AWARDS. The Committee may grant Performance
Awards, which shall be denominated on the Date of Grant either in shares of
Common Stock (Performance Shares) or in specified dollar units (Performance
Units). At the time of a Performance Award grant, the Committee shall
determine, in its sole discretion, one or more performance periods and
performance goals to be achieved during the applicable performance periods, as
well as such other restrictions and conditions as the Committee deems
appropriate. In the case of Performance Units, the Committee shall also
determine a target unit value or a range of unit values for each Award. No
performance period shall exceed ten years from the date of the grant. The
performance goals applicable to a Performance Award grant may be subject to such
later revisions as the Committee shall deem appropriate to reflect significant
unforeseen events such as changes in law, accounting practices or unusual or
nonrecurring items or occurrences.
9.2 PAYMENT OF PERFORMANCE AWARDS. At the end of the performance period,
the Committee shall determine the extent to which performance goals have been
attained or a degree of achievement between maximum and minimum levels in order
to establish the level of payment to be made, if any, and shall determine if
payment is to be made in the form of cash or Common Stock (valued at its Fair
Market Value at the time of payment) or a combination of cash and Common Stock.
In the case of Performance Shares, the Committee may provide that during a
performance period a Participant shall be paid with respect to each Performance
Share a cash amount in the same amount and at the same time as a dividend is
paid on a share of Common Stock.
10. PHANTOM STOCK
10.1 GRANT OF PHANTOM STOCK. Phantom Stock is an Award to a Participant of
a number of hypothetical share units with respect to shares of Common Stock,
with an initial value based on the Fair Market Value of the Common Stock on the
Date of Grant. Phantom Stock shall be subject to such restrictions and
conditions as the Committee shall determine. On the Date of Grant, the
Committee shall determine, in its sole discretion, the vesting period of the
Phantom Stock and the maximum value of the Phantom Stock, if any. No vesting
period shall exceed 10 years from the date of the grant.
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10.2 PAYMENT OF PHANTOM STOCK. At the end of the vesting period applicable
to Phantom Stock granted to a Participant, a cash amount equivalent in value to
the Fair Market Value of one share of Common Stock on the last day of the
vesting period, subject to any maximum value determined by the Committee at the
time of grant, shall be paid with respect to each such Phantom Stock unit to the
Participant. The Committee may provide that during the vesting period a
Participant shall be paid with respect to each Phantom Stock unit, cash amounts
in the same amount and at the same time as a dividend on a share of Common
Stock.
11. AWARD AGREEMENTS
11.1 FORM OF AGREEMENT. Each Award under this Plan shall be evidenced by
an Award Agreement in a form approved by the Committee setting forth the number
of shares of Common Stock, units or other rights (as applicable) subject to the
Award, the exercise, base or purchase price (if any) of the Award, the time or
times at which an Award will become vested, exercisable or payable, the duration
of the Award and, in the case of Performance Awards, the applicable performance
goals. The Award Agreement shall also set forth other material terms and
conditions applicable to the Award as determined by the Committee consistent
with the limitations of this Plan.
11.2 TERMINATION OF EMPLOYMENT. The Award Agreements may include
provisions describing the treatment of an Award in the event of the retirement,
disability, death or other termination of a Participant's employment with or
other services to the Company, including any provisions relating to the vesting,
exercisability, acceleration, forfeiture or cancellation of the Award in these
circumstances, including such provisions as required for Incentive Stock Options
pursuant to Section 6.4(b) thereof.
11.3 CONTRACT RIGHTS. Any obligation of the Company to any Participant
with respect to an Award shall be based solely upon contractual obligations
created by this Plan and an Award Agreement. No Award shall be enforceable
until the Award Agreement or a receipt has been signed by the Participant and on
behalf of the Company by its authorized representative. By executing the Award
Agreement or receipt, a Participant shall be deemed to have accepted and
consented to the terms of this Plan and any action taken in good faith under
this Plan by and within the discretion of the Committee, the Board of Directors
of their delegates.
12. EFFECTIVE DATE, TERMINATION AND AMENDMENT
12.1 EFFECTIVE DATE. The Plan shall become effective on the date of its
adoption by the Board; PROVIDED, HOWEVER, that no Incentive Stock Option shall
be exercisable by a Participant unless and until the Plan shall have been
approved by the stockholders of the Company, which approval shall be obtained
within 12 months before or after the adoption of the Plan by the Board.
12.2 TERMINATION. The Plan shall terminate on the date immediately
preceding the tenth anniversary of the earlier of the date the Plan is adopted
by the Board or the date the Plan is approved by the Company's stockholders.
The Board may, in its sole discretion and at any earlier date, terminate the
Plan. Notwithstanding the foregoing, no termination of the Plan shall in any
manner affect any Award theretofore granted without the consent of the
Participant or the permitted transferee of the Award.
12.3 AMENDMENT. The Board may at any time and from time to time and in
any respect, amend or modify the Plan; PROVIDED, HOWEVER, that, solely to the
extent required by Rule 16b-3, the approval of the Company's stockholders
will be required for any amendment that (i) changes the class of persons
eligible for the grant of an Award, as specified in Section 5 hereof, (ii)
increases (other than as described in Section 3.2 hereof) the maximum number
of shares of Common Stock subject to Awards granted under the Plan, as
specified in Section 3.1 hereof, or (iii) materially increases
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the benefits accruing to Participants under the Plan (within the meaning of Rule
16b-3). Notwithstanding the foregoing, no amendment or modification of the Plan
shall in any manner affect any Award theretofore granted without the consent of
the Participant or the permitted transferee of the Award.
13. GENERAL PROVISIONS
13.1 NON-ASSIGNABILITY. Awards under the Plan shall not be assignable nor
transferable, except by will or by the laws of descent and distribution, and
during the lifetime of a Participant the Award shall be exercised only by such
Participant or by his or her guardian or legal representative.
13.2 RIGHTS AS STOCKHOLDER. A Participant shall have no rights as a holder
of Common Stock with respect to any unissued securities covered by an Award
until the date the Participant becomes the holder of record of these securities.
Except as provided in Section 3.2 hereof, no adjustment or other provision shall
be made for dividends or other stockholder rights, except to the extent that the
Award Agreement provides for dividend payments or similar economic benefits.
13.3 EMPLOYMENT. Nothing in the Plan, in the grant of any Award or in any
Award Agreement shall confer upon any Eligible Person the right to continue in
the capacity in which he is employed by or otherwise serves the Company or any
Subsidiary.
13.4 SECURITIES LAWS. No shares of Common Stock will be issued or
transferred pursuant to an Award unless and until all then applicable
requirements imposed by federal and state securities and other laws, rules and
regulations and by any regulatory agencies having jurisdiction, and by any stock
exchanges upon which the Common Stock may be listed, have been fully met. As a
condition precedent to the issuance of shares pursuant to the grant or exercise
of an Award, the Company may require the Participant to take any reasonable
action to meet such requirements.
13.5 TAX WITHHOLDING. The Participant shall be responsible for payment of
any taxes or similar charges required by law to be withheld from an Award or an
amount paid in satisfaction of an Award and these obligations shall be paid by
the Participant on or prior to the payment of the Award. The Award Agreement
shall specify the manner in which the withholding obligation shall be satisfied
with respect to the particular type of Award.
13.6 OTHER COMPENSATION AND BENEFIT PLANS. The adoption of the Plan shall
not affect any other stock incentive or other compensation plans in effect for
the Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of stock incentive or other compensation for
employees of the Company or any Subsidiary. The amount of any compensation
deemed to be received by Participant pursuant to an Award shall not constitute
compensation with respect to which any other employee benefits of such
Participant are determined, including, without limitation, benefits under any
bonus, pension, profit sharing, life insurance or salary continuation plan,
except as otherwise specifically provided by the terms of such plan.
13.7 PLAN BINDING ON SUCCESSORS. The Plan shall be binding upon the
Company, its successors and assigns, and the Participant, his executor,
administrator and permitted transferees.
13.8 CONSTRUCTION AND INTERPRETATION. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender. Headings of Articles and Sections hereof are inserted for
convenience and reference and constitute no part of the Plan.
13.9 SEVERABILITY. If any provision of the Plan or any Award Agreement
shall be determined to be illegal or unenforceable by any court of law in any
jurisdiction, the remaining
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provisions hereof and thereof shall be severable and enforceable in accordance
with their terms, and all provisions shall remain enforceable in any other
jurisdiction.
13.10 GOVERNING LAW. The validity and construction of this Plan and of
the Award Agreements shall be governed by the laws of the State of Delaware.
----------------------------------
This Progenics Pharmaceuticals, Inc. 1996 Stock Incentive Plan was
duly adopted and approved by the Board of Directors of this Progenics
Pharmaceuticals, Inc. on the 15th day of
May, 1996.
/s/ Paul J. Maddon
--------------------------------------------
Secretary of Progenics Pharmaceuticals, Inc.
This Progenics Pharmaceuticals, Inc. 1996 Stock Incentive Plan was
duly approved by the stockholders of this Progenics Pharmaceuticals, Inc. on the
15th day of May, 1996.
/s/ Paul J. Maddon
--------------------------------------------
Secretary of Progenics Pharmaceuticals, Inc.
9
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Exhibit 10.6
PROGENICS PHARMACEUTICALS, INC.
INDEMNIFICATION AGREEMENT
This Agreement, made and entered into as of this 1st day of June, 1995
("Agreement"), by and between Progenics Pharmaceuticals, Inc., a Delaware
corporation (the "Corporation"), and Paul J. Maddon, M.D.,Ph.D. (the
"Indemnitee"):
WHEREAS, recently highly competent persons have become more reluctant to
serve publicly-held corporations as directors, officers, or in other
capacities, unless they are provided with better protection from the risk of
claims and actions against them arising out of their service to and
activities on behalf of such corporation; and
WHEREAS, the current impracticability of obtaining adequate insurance and
the uncertainties related to indemnification have increased the difficulty of
attracting and retaining such persons; and
WHEREAS, the Board of Directors of the Corporation (the "Board") has
determined that the inability to attract and retain such persons is
detrimental to the best interests of the Corporation's stockholders and that
such persons should be assured that they will have better protection in the
future; and
WHEREAS, it is reasonable, prudent and necessary for the Corporation to
obligate itself contractually to indemnify such persons to the fullest extent
permitted by applicable law so that such persons will serve or continue to
serve the Corporation free from undue concern that they will not be
adequately indemnified; and
WHEREAS, this Agreement is a supplement to and in furtherance of Article
XII of the By-laws of the Corporation, any rights granted under the
Certificate of Incorporation of the Corporation and any resolutions adopted
pursuant thereto and shall neither be deemed to be a substitute therefor nor
to diminish or abrogate any rights of Indemnitee thereunder; and
WHEREAS, Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Corporation on the condition that
he be indemnified according to the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants
contained herein, the Corporation and Indemnitee do hereby covenant and agree
as follows:
Section 1. DEFINITIONS. For purposes of this Agreement:
(a) "Change in Control" means a change in control of the Corporation
occurring after the Effective Date of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in
response to any similar item on any similar schedule or form) promulgated
under the Securities Exchange Act of 1934, as amended (the "Act"), whether or
not the Corporation is then subject to such reporting requirement; provided,
however, that, without limitation, such a Change in Control shall be deemed
to have occurred if after the Effective Date (i) any "person" (as such term
is used in Sections 13(d) and 14(d) of the Act) is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of the Corporation representing twenty percent (20%) or more of
the combined voting power of the Corporation's then outstanding securities
without the prior approval of at
<PAGE>
Indemnification Agreement
Paul J. Maddon, M.D.,Ph.D.
least two-thirds of the members of the Board in office immediately prior to
such person attaining such percentage interest; (ii) the Corporation is a
party to a merger, consolidation, sale of assets or other reorganization, or
a proxy contest, as a consequence of which members of the Board in office
immediately prior to such transaction or event constitute less than a
majority of the Board thereafter; or (iii) during any period of two
consecutive years, individuals who at the beginning of such period
constituted the Board (including for this purpose any new director whose
election or nomination for election by the Corporation's stockholders was
approved by a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of such period) cease for any
reason to constitute at least a majority of the Board.
(b) "Corporate Status" means the status of a person who is or was a
director, officer, employee, agent or fiduciary of the Corporation or of any
other corporation, partnership, joint venture, trust, employee benefit plan
or other enterprise which such person is or was serving at the request of the
Corporation.
(c) "Disinterested Director" means a director of the Corporation who is
not and was not a party to the Proceeding in respect of which indemnification
is sought by Indemnitee.
(d) "Effective Date" means June 1, 1995.
(e) "Expenses" means all reasonable attorneys' fees, retainers, court
costs, transcript costs, fees of experts, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges, postage,
delivery service fees, and all other disbursements or expenses of the types
customarily incurred in connection with prosecuting, defending, preparing to
prosecute or defend, investigating, or being or preparing to be a witness in
a Proceeding.
(f) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and neither presently is,
nor in the past five years has been, retained to represent: (i) the
Corporation or Indemnitee in any other matter material to either such party,
or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. Notwithstanding the foregoing, the term
"Independent Counsel" shall not include any person who, under the applicable
standards of professional conduct then prevailing, would have a conflict of
interest in representing either the Corporation or Indemnitee in an action to
determine Indemnitee's rights under this Agreement.
(g) "Proceeding" means any action, suit, arbitration, alternate dispute
resolution mechanism, investigation, administrative hearing or any other
proceeding, whether civil, criminal, administrative or investigative, except
one initiated by an Indemnitee pursuant to Section 11 of this Agreement to
enforce his rights under this Agreement.
Section 2. SERVICES BY INDEMNITEE. Indemnitee agrees to serve as a
director of the Corporation, and, at its request, as a director, officer,
employee, agent or fiduciary of certain other corporations and entities.
Indemnitee may at any time and for any reason resign from any such position
(subject to any other contractual obligation or any obligation imposed by
operation of law).
Section 3. INDEMNIFICATION - GENERAL. The Corporation shall indemnify,
and advance Expenses to, Indemnitee as provided in this Agreement to the
fullest extent permitted by applicable law in effect on the date hereof and
to such greater extent as applicable law may thereafter from time to time
permit. The rights of Indemnitee provided under the preceding
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Indemnification Agreement
Paul J. Maddon, M.D.,Ph.D.
sentence shall include, but shall not be limited to, the rights set forth in
the other Sections of this Agreement.
Section 4. PROCEEDINGS OTHER THAN PROCEEDINGS BY OR IN THE RIGHT OF THE
CORPORATION. Indemnitee shall be entitled to the rights of indemnification
provided in this Section if, by reason of his Corporate Status, he is, or is
threatened to be made, a party to any threatened, pending or completed
Proceeding, other than a Proceeding by or in the right of the Corporation.
Pursuant to this Section, Indemnitee shall be indemnified against Expenses,
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by him or on his behalf in connection with any such
Proceeding or any claim, issue or matter therein, if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal Proceeding,
had no reasonable cause to believe his conduct was unlawful.
Section 5. PROCEEDINGS BY OR IN THE RIGHT OF THE CORPORATION.
Indemnitee shall be entitled to the rights of indemnification provided in
this Section if, by reason of his Corporate Status, he is, or is threatened
to be made, a party to any threatened, pending or completed Proceeding
brought by or in the right of the Corporation to procure a judgment in its
favor. Pursuant to this Section, Indemnitee shall be indemnified against
Expenses, judgments, penalties, fines and amounts paid in settlement,
actually and reasonably incurred by him or on his behalf in connection with
any such Proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation.
Notwithstanding the foregoing, no indemnification against such Expenses shall
be made in respect of any claim, issue or matter in any such Proceeding as to
which Indemnitee shall have been adjudged to be liable to the Corporation if
applicable law prohibits such indemnification unless the Court of Chancery of
the State of Delaware, or the court in which such Proceeding shall have been
brought or is pending, shall determine that indemnification against Expenses
may nevertheless be made by the Corporation.
Section 6. INDEMNIFICATION FOR EXPENSES OF A PARTY WHO IS WHOLLY OR
PARTLY SUCCESSFUL. Notwithstanding any other provision of this Agreement, to
the extent that Indemnitee is, by reason of his Corporate Status, a party to
and is successful, on the merits or otherwise, in any Proceeding, he shall be
indemnified against all Expenses actually and reasonably incurred by him or
on his behalf in connection therewith. If Indemnitee is not wholly successful
in such Proceeding but is successful, on the merits or otherwise, as to one
or more but less than all claims, issues or matters in such Proceeding, the
Corporation shall indemnify Indemnitee against all Expenses actually and
reasonably incurred by him or on his behalf in connection with each
successfully resolved claim, issue or matter. For the purposes of this
Section and without limiting the foregoing, the termination of any claim,
issue or matter in any such Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue
or matter.
Section 7. INDEMNIFICATION FOR EXPENSES OF A WITNESS. Notwithstanding
any other provision of this Agreement, to the extent that Indemnitee is, by
reason of his Corporate Status, a witness in any Proceeding, he shall be
indemnified against all Expenses actually and reasonably incurred by him or
on his behalf in connection therewith.
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Indemnification Agreement
Paul J. Maddon, M.D.,Ph.D.
Section 8. ADVANCEMENT OF EXPENSES. The Corporation shall advance all
Expenses incurred by or on behalf of Indemnitee in connection with any
Proceeding within twenty (20) days after the receipt by the Corporation of a
statement or statements from Indemnitee requesting such advance or advances
from time to time, whether prior to or after final disposition of such
Proceeding. Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee and shall include or be preceded or
accompanied by an undertaking by or on behalf of Indemnitee to repay any
Expenses advanced if it shall ultimately be determined that Indemnitee is not
entitled to be indemnified against such Expenses.
Section 9. PROCEDURE FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION.
(a) To obtain indemnification under this Agreement in connection with
any Proceeding, and for the duration thereof, Indemnitee shall submit to the
Corporation a written request, including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification. The Secretary of the Corporation shall, promptly
upon receipt of any such request for indemnification, advise the Board in
writing that Indemnitee has requested indemnification.
(b) Upon written request by Indemnitee for indemnification pursuant to
Section 9(a) hereof, a determination, if required by applicable law, with
respect to Indemnitee's entitlement thereto shall be made in such case: (i)
if a Change in Control shall have occurred, by Independent Counsel (unless
Indemnitee shall request that such determination be made by the Board or the
stockholders, in which case in the manner provided for in clauses (ii) or
(iii) of this Section 9(b) in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee); (ii) if a Change of Control shall not have
occurred, (A) by the Board by a majority vote of a quorum consisting of
Disinterested Directors, or (B) if a quorum of the Board consisting of
Disinterested Directors is not obtainable, or even if such quorum is
obtainable, if such quorum of Disinterested Directors so directs, either (x)
by Independent Counsel in a written opinion to the Board, a copy of which
shall be delivered to Indemnitee, or (y) by the stockholders of the
Corporation, as determined by such quorum of Disinterested Directors, or a
quorum of the Board, as the case may be; or (iii) as provided in Section
10(b) of this Agreement. If it is so determined that Indemnitee is entitled
to indemnification, payment to Indemnitee shall be made within ten (10) days
after such determination. Indemnitee shall cooperate with the person, persons
or entity making such determination with respect to Indemnitee's entitlement
to indemnification, including providing to such person, persons or entity
upon reasonable advance request any documentation or information which is not
privileged or otherwise protected from disclosure and which is reasonably
available to Indemnitee and reasonably necessary to such determination. Any
costs or expenses (including attorneys' fees and disbursements) incurred by
Indemnitee in so cooperating with the person, persons or entity making such
determination shall be borne by the Corporation (irrespective of the
determination as to Indemnitee's entitlement to indemnification) and the
Corporation hereby indemnifies and agrees to hold Indemnitee harmless
therefrom.
(c) If required, Independent Counsel shall be selected as follows: (i)
if a Change of Control shall not have occurred, Independent Counsel shall be
selected by the Board,
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Indemnification Agreement
Paul J. Maddon, M.D.,Ph.D.
and the Corporation shall give written notice to Indemnitee advising him of
the identity of Independent Counsel so selected; or (ii) if a Change of
Control shall have occurred, Independent Counsel shall be selected by
Indemnitee (unless Indemnitee shall request that such selection be made by
the Board, in which event (i) shall apply), and Indemnitee shall give written
notice to the Corporation advising it of the identity of Independent Counsel
so selected. In either event, Indemnitee or the Corporation, as the case may
be, may, within seven days after such written notice of selection shall have
been given, deliver to the Corporation or to Indemnitee, as the case may be,
a written objection to such selection. Such objection may be asserted only on
the ground that Independent Counsel so selected does not meet the
requirements of "Independent Counsel" as defined in Section 1 of this
Agreement, and the objection shall set forth with particularity the factual
basis of such assertion. If such written objection is made, Independent
Counsel so selected may not serve as Independent Counsel unless and until a
court has determined that such objection is without merit. If, within twenty
(20) days after submission by Indemnitee of a written request for
indemnification pursuant to Section 9(a) hereof, no Independent Counsel shall
have been selected and not objected to, either the Corporation or Indemnitee
may petition the Court of Chancery of the State of Delaware, or other court
of competent jurisdiction, for resolution of any objection which shall have
been made by the Corporation or Indemnitee to the other's selection of
Independent Counsel and/or for the appointment as Independent Counsel of a
person selected by such court or by such other person as such court shall
designate, and the person with respect to whom an objection is so resolved or
the person so appointed shall act as Independent Counsel under Section 9(b)
hereof. The Corporation shall pay any and all reasonable fees and expenses of
Independent Counsel incurred by such Independent Counsel in connection with
its actions pursuant to this Agreement, and the Corporation shall pay all
reasonable fees and expenses incident to the procedures of this Section 9(c),
regardless of the manner in which such Independent Counsel was selected or
appointed. Upon the due commencement date of any judicial proceeding or
arbitration pursuant to Section 11(a)(iii) of this Agreement, Independent
Counsel shall be discharged and relieved of any further responsibility in
such capacity (subject to the applicable standards of professional conduct
then prevailing).
Section 10. PRESUMPTIONS AND EFFECTS OF CERTAIN PROCEEDINGS.
(a) If a Change of Control shall have occurred, in making a
determination with respect to entitlement to indemnification hereunder, the
person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with Section 9(a)
of this Agreement, and the Corporation shall have the burden of proof to
overcome that presumption in connection with the making by any person,
persons or entity of any determination contrary to that presumption.
(b) If the person, persons or entity empowered or selected under Section
9 of this Agreement to determine whether Indemnitee is entitled to
indemnification shall not have made a determination within sixty (60) days
after receipt by the Corporation of the request therefor, the requisite
determination of entitlement to indemnification shall be deemed to have been
made and Indemnitee shall be entitled to such indemnification, absent (i) a
misstatement by
5
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Indemnification Agreement
Paul J. Maddon, M.D.,Ph.D.
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee's statement not materially misleading, in connection with the
request for indemnification, or (ii) prohibition of such indemnification
under applicable law; provided, however, that such sixty (60) day period may
be extended for a reasonable time, not to exceed an additional thirty (30)
days, if the person, persons or entity making the determination with respect
to entitlement to indemnification in good faith require(s) such additional
time for the obtaining or evaluating of documentation and/or information
relating thereto; and provided, further, that the foregoing provisions of
this Section 10(b) shall not apply (i) if the determination of entitlement to
indemnification is to be made by the stockholders pursuant to Section 9(b) of
this Agreement and if (A) within fifteen (15) days after receipt by the
Corporation of the request for such determination the Board has resolved to
submit such determination to the stockholders for their consideration at an
annual meeting thereof to be held within 75 days after such receipt and such
determination is made thereat, or (B) a special meeting of stockholders is
called within fifteen (15) days after such receipt for the purpose of making
such determination, such meeting is held for such purpose within sixty (60)
days after having been so called and such determination is made thereat, or
(ii) if the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 9(b) of this Agreement.
(c) The termination of any Proceeding or of any claim, issue or matter
therein, by judgment, order, settlement or conviction, or upon a plea of NOLO
CONTENDERE or its equivalent, shall not (except as otherwise expressly
provided in this Agreement) of itself adversely affect the right of
Indemnitee to indemnification or create a presumption that Indemnitee did not
act in good faith and in a manner which he reasonably believed to be in or
not opposed to the best interests of the Corporation or, with respect to any
criminal Proceeding, that Indemnitee had reasonable cause to believe that his
conduct was unlawful.
Section 11. REMEDIES OF INDEMNITEE.
(a) In the event that (i) a determination is made pursuant to Section 9
of this Agreement that Indemnitee is not entitled to indemnification under
this Agreement, (ii) advancement of Expenses is not timely made pursuant to
Section 8 of this Agreement, (iii) the determination of entitlement to
indemnification is to be made by Independent Counsel pursuant to Section 9(b)
of this Agreement and such determination shall not have been made and
delivered in a written opinion within ninety (90) days after receipt by the
Corporation of the request for indemnification, (iv) payment of
indemnification is not made pursuant to Section 7 of this Agreement within
ten (10) days after receipt by the Corporation of a written request therefor,
or (v) payment of indemnification is not made within ten days after a
determination has been made that Indemnitee is entitled to indemnification or
such determination is deemed to have been made pursuant to Section 9 or 10 of
this Agreement, Indemnitee shall be entitled to an adjudication in an
appropriate court of the State of Delaware, or in any other court of
competent jurisdiction, of his entitlement to such indemnification or
advancement of Expenses. Alternatively, Indemnitee, at his option, may seek
an award in arbitration to be conducted by a single arbitrator pursuant to
the rules of the American Arbitration Association. Indemnitee shall commence
such proceeding seeking an adjudication or an award in arbitration within one
hundred eighty (180) days following the date on which Indemnitee first has
the right to commence such proceeding pursuant
6
<PAGE>
Indemnification Agreement
Paul J. Maddon, M.D.,Ph.D.
to this Section 1 l(a). The Corporation shall not oppose Indemnitee's right
to seek any such adjudication or award in arbitration.
(b) In the event that a determination shall have been made pursuant to
Section 9 of this Agreement that Indemnitee is not entitled to
indemnification, any judicial proceeding or arbitration commenced pursuant to
this Section shall be conducted in all respects as a DE NOVO trial or
arbitration on the merits and Indemnitee shall not be prejudiced by reason of
that adverse determination. If a Change of Control shall have occurred in any
judicial proceeding or arbitration commenced pursuant to this Section, the
Corporation shall have the burden of proving that Indemnitee is not entitled
to indemnification or advancement of Expenses, as the case may be.
(c) If a determination shall have been made or deemed to have been made
pursuant to Section 9 or 10 of this Agreement that Indemnitee is entitled to
indemnification, the Corporation shall be bound by such determination in any
judicial proceeding or arbitration commenced pursuant to this Section, absent
(i) a misstatement by Indemnitee of a material fact, or an omission of a
material fact necessary to make Indemnitee's statement not materially
misleading, in connection with the request for indemnification, or (ii)
prohibition of such indemnification under applicable law.
(d) The Corporation shall be precluded from asserting in any judicial
proceeding or arbitration commenced pursuant to this Section that the
procedures and presumptions of this Agreement are not valid, binding and
enforceable and shall stipulate in any such court or before any such
arbitrator that the Corporation is bound by all the provisions of this
Agreement.
(e) In the event that Indemnitee, pursuant to this Section, seeks a
judicial adjudication of, or an award in arbitration to enforce, his rights
under, or to recover damages for breach of, this Agreement, Indemnitee shall
be entitled to recover from the Corporation, and shall be indemnified by the
Corporation against, any and all expenses (of the kinds described in the
definition of Expenses) actually and reasonably incurred by him in such
judicial adjudication or arbitration, but only if he prevails therein. If it
shall be determined in such judicial adjudication or arbitration that
Indemnitee is entitled to receive part but not all of the indemnification or
advancement of expenses sought, the expenses incurred by Indemnitee in
connection with such judicial adjudication or arbitration shall be
appropriately prorated.
Section 12. NON-EXCLUSIVITY; SURVIVAL OF RIGHTS; INSURANCE; SUBROGATION.
(a) The rights of indemnification and to receive advancement of Expenses
as provided by this Agreement shall not be deemed exclusive of any other
rights to which Indemnitee may at any time be entitled under applicable law,
the certificate of incorporation or by-laws of the Corporation, any
agreement, a vote of stockholders or a resolution of directors, or otherwise.
No amendment, alteration or repeal of this Agreement or any provision hereof
shall be effective as to any Indemnitee with respect to any action taken or
omitted by such Indemnitee in his Corporate Status prior to such amendment,
alteration or repeal.
(b) To the extent that the Corporation maintains an insurance policy or
policies providing liability insurance for directors, officers, employees,
agents or fiduciaries of the Corporation or of any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise
which such person serves at the request of the Corporation, Indemnitee shall
7
<PAGE>
Indemnification Agreement
Paul J. Maddon, M.D.,Ph.D.
be covered by such policy or policies in accordance with its or their terms
to the maximum extent of the coverage available for any such director,
officer, employee, agent or fiduciary under such policy or policies.
(c) In the event of any payment under this Agreement, the Corporation
shall be subrogated to the extent of such payment to all of the rights of
recovery of Indemnitee, who shall execute all papers required and take all
action necessary to secure such rights, including execution of such documents
as are necessary to enable the Corporation to bring suit to enforce such
rights.
(d) The Corporation shall not be liable under this Agreement to make any
payment of amounts otherwise indemnifiable hereunder if and to the extent
that Indemnitee has otherwise actually received such payment under any
insurance policy, contract, agreement or otherwise.
Section 13. DURATION OF AGREEMENT. This Agreement shall continue until
and terminate upon the later of: (a) ten (10) years after the date that
Indemnitee shall have ceased to serve as a director, officer, employee, agent
or fiduciary of the Corporation or of any other corporation, partnership,
joint venture, trust, employee benefit plan or other enterprise which
Indemnitee served at the request of the Corporation; or (b) the final
termination of all pending Proceedings in respect of which Indemnitee is
granted rights of indemnification or advancement of Expenses hereunder and or
any proceeding commenced by Indemnitee pursuant to Section 11 of this
Agreement. This Agreement shall be binding upon the Corporation and its
successors and assigns and shall inure to the benefit of Indemnitee and his
heirs, executors and administrators.
Section 14. SEVERABILITY. If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any
reason whatsoever: (a) the validity, legality and enforceability of the
remaining provisions of this Agreement (including, without limitation, each
portion of any Section of this Agreement containing any such provision held
to be invalid, illegal or unenforceable, that is not itself invalid, illegal
or unenforceable) shall not in any way be affected or impaired thereby; and
(b) to the fullest extent possible, the provisions of this Agreement
(including, without limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable,
that is not itself invalid, illegal or unenforceable) shall be construed so
as to give effect to the intent manifested by the provision held invalid,
illegal or unenforceable.
Section 15. EXCEPTION TO RIGHT OF INDEMNIFICATION OR ADVANCEMENT OF
EXPENSES. Except as provided in Section 11(e), Indemnitee shall not be
entitled to indemnification or advancement of Expenses under this Agreement
with respect to any Proceeding, or any claim therein, brought or made by him
against the Corporation. For the purposes of this Section 15, a Proceeding in
the right of the Corporation shall not be deemed to constitute a Proceeding
brought or made by the Corporation.
Section 16. IDENTICAL COUNTERPARTS. This Agreement may be executed in
one or more counterparts, each of which shall for all purposes be deemed to
be an original but all of which together shall constitute one and the same
Agreement. Only one such counterpart signed by the party against whom
enforceability is sought needs to be produced to evidence the existence of
this Agreement.
8
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Indemnification Agreement
Paul J. Maddon, M.D.,Ph.D.
Section 17. HEADINGS. The headings of the paragraphs of this Agreement
are inserted for convenience only and shall not be deemed to constitute part
of this Agreement or to affect the construction thereof.
Section 18. MODIFICATION AND WAIVER. No supplement, modification or
amendment of this Agreement shall be binding unless executed in writing by
both of the parties hereto. No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of any other
provisions hereof (whether or not similar) nor shall such waiver constitute a
continuing waiver.
Section 19. NOTICE BY INDEMNITEE. Indemnitee agrees promptly to notify
the Corporation in writing upon being served with any summons, citation,
subpoena, complaint, indictment, information or other document relating to
any Proceeding or matter which may be subject to indemnification or
advancement of Expenses covered hereunder.
By: /s/ Paul J. Maddon
---------------------------------
Paul J. Maddon, M.D., Ph.D.
Chairman and CEO
I, Robert A. McKinney, Assistant Secretary, certify that the Board of
Directors has authorized the Corporation to enter into this Agreement by a
resolution unanimously passed at its June 8, 1995 meeting.
/s/ Robert A. McKinney
-------------------------------------
Robert A. McKinney
Assistant Secretary
June 8, 1995
<PAGE>
Exhibit 10.7
EMPLOYMENT AGREEMENT
Agreement made as of the 15th day of December, 1993, between PROGENICS
PHARMACEUTICALS, INC., a Delaware corporation (the "Corporation") with its
principal place of business at Old Saw Mill River Road, Tarrytown, New York
10591 and PAUL J. MADDON ("MADDON") residing at 60 Haven Avenue, Apartment
25C, New York, New York 10032.
RECITALS
A. The Corporation is engaged in the business of developing and marketing
pharmaceutical products.
B. The Corporation wishes to employ MADDON as Chairman, President, Chief
Executive Officer and Chief Science Officer, and MADDON wishes to serve the
Corporation in such capacities.
AGREEMENT
In consideration of the facts mentioned above and the mutual promises set
forth below, the parties agree as follows:
1. EMPLOYMENT.
The Corporation hereby employs MADDON as Chairman, President, Chief
Executive Officer and Chief Science Officer, and MADDON hereby agrees to
serve the Corporation in such capacities. MADDON and the Corporation agree
that the Corporation may determine that it is in the best interests of the
Corporation to hire additional senior managerial
<PAGE>
personnel, including possibly a Chairman, Chief Executive Officer or
President. MADDON agrees to relinquish one or more of these titles so long as
he continues to be employed as either Chairman or Chief Executive Officer and
as Chief Science Officer.
2. TERM.
2.1 "The Term" as used herein shall mean the Initial Term plus any Renewal
Term.
2.2 This Agreement will be for a term of Five (5) years (the "Initial
Term"), commencing on the date hereof, unless sooner terminated pursuant to
Section 8.
2.3 Provided MADDON is not in default under his employment agreement at the
time the relevant Term expires, this Agreement shall be renewed for five
successive periods of One (1) year each ("Renewal Term(s)"), unless either
the Corporation or MADDON gives notice to the other of its or his intention
not to renew at least Ninety (90) days before the end of the Initial Term or
any Renewal Term.
3. EMPLOYEE'S DUTIES.
3.1 As Chairman, President and Chief Executive Officer, MADDON will have
broad management responsibilities for the activities of the Corporation.
As Chief Science Officer, MADDON's duties shall include, without limitation,
formulating the scientific strategies of the Corporation in conjunction with
the Scientific Advisory Board, presenting such strategies to the Board of
Directors of the Corporation
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(the "Board") for review and, subject to approval of the Board, implementing
such strategies, as well as overseeing all aspects of day-to-day operations
of the Corporation's basic science laboratory research involving the
development of therapeutics, vaccines and diagnostics for human viral
diseases. In addition, as Chief Science Officer, Maddon will provide specific
direction for senior laboratory personnel and ensure the proper documentation
of results obtained by laboratory personnel under his direction.
3.2 Except as provided herein, MADDON will devote substantially all of
his business time and energies solely to the business and affairs of the
Corporation during the Term. MADDON presently serves on the editorial boards
of two scientific journals and on committees of the National Institute of
Health and may continue these activities and such other similar activities
approved by the Corporation during the Term. MADDON shall not, at any time
during the Term, directly or indirectly, enter the employ of, or render any
service to, any person, partnership, association, corporation or other entity
other than the Corporation, without prior consent of the Board.
3.3 MADDON will use his best efforts, skill and abilities to promote the
Corporation's interests and perform any duties which may be reasonably
assigned to him by the Board.
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3.4 MADDON consents to and agrees to cooperate with the Corporation to
increase the amount of Key-man life insurance on MADDON's life from the
present level of One Million Dollars to an amount determined appropriate by
the Board.
4. REMUNERATION.
The Corporation will pay MADDON, for all services to be rendered under
this Agreement, an annual salary ("Salary"), payable in equal bi-weekly
installments, of One Hundred Fifty Thousand ($150,000) Dollars, adjusted as
hereinafter provided, for the Term.
4.2 Each year prior to the initial public offering of the stock of the
Corporation, on January 1 (beginning with January 1, 1995), the annual Salary
in effect shall be multiplied by the sum of 100% plus the percentage increase
in the "Index" (as defined below) reading on such anniversary date over the
"Base Index" (as defined below) and the product shall be the adjusted Salary
for each succeeding twelve (12) month period during the Term.
The following terms are defined:
(a) "Index" shall mean the "Consumer Price Index for All Urban Consumers
(1967 = 100)" specified for "All Items" relating to New York City and
published by the Bureau of Labor Statistics of the United States Department
of Labor. In the event that the Index shall hereafter be converted to a
different standard reference base or otherwise revised, the
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<PAGE>
determination of the increases in the Salary shall be made on the basis of
such conversion factor, formula or table for converting the Index as may be
published by the Bureau of Labor Statistics, or if said Bureau shall not
publish the same, then with the use of such conversion factor, formula or
table as may be published by Prentice-Hall, Inc., or, failing such
publication, by any other nationally recognized publisher of similar
statistical information. In the event that either Index shall cease to be
published, then, for the purpose of this Section 4, there shall be
substituted for the Index such other index as the Corporation and MADDON
shall agree upon, and if they are unable to agree upon such other index
within ninety (90) days after the Index ceases to be published, such matter
shall be determined in New York City by arbitration in accordance with the
Rules of the American Arbitration Association.
(b) The "Base Index" shall mean the Index last published prior to December
15, 1993.
4.3 Each year following the initial public offering of the stock of the
Corporation on the anniversary date of the commencement of MADDON's full time
employment, the annual Salary then in effect shall be multiplied by 110% and
the product shall be the adjusted Salary for the next succeeding twelve (12)
month period during the Term.
4.4 It is intended that the Salary shall be increased should the
Corporation's profits increase substan-
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<PAGE>
tially. The Salary shall be reviewed annually and should the Board consider
circumstances appropriate, it shall be increased in an amount the Board
determines in its sole discretion. In addition, should the Board consider
circumstances appropriate, MADDON shall receive an annual bonus payment in
an amount the Board determines appropriate, but in no event shall this amount
be less than Fifteen Thousand ($15,000) Dollars (the "Minimum Bonus").
4.5 This Agreement will not be deemed abrogated or terminated if the
Corporation, in its discretion, determines to increase the Salary of MADDON
for any period of time, or if MADDON accepts an increase; but, except as
specifically provided in this Agreement, the Corporation shall have no
obligation to make any increase in the Salary. Any increase in MADDON's
Salary by the Corporation shall be incorporated into his annual Salary then
in effect for purposes of future payments of and adjustments to the Salary.
5. STOCK HOLDINGS AND STOCK OPTIONS.
5.1 EXISTING STOCK. MADDON is the owner of One Million (1,000,000) shares
of Common Stock of the Corporation, which the Corporation acknowledges are fully
vested in MADDON and are not subject to any repurchase or other restrictions
except pursuant to applicable securities and other laws. Each of the
Shareholders' Agreement, dated as of October 26, 1987, between the Corporation,
MADDON and Gerard M. Housey, as amended, and the Stock Divestment Agreement,
dated as of
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<PAGE>
June 30, 1988, is hereby terminated as of the date of this Agreement.
5.2 ADDITIONAL EQUITY-BASED INCENTIVES. In order to provide MADDON with
an additional incentive to advance the business of the Corporation, the
Corporation hereby grants to MADDON the following:
5.2.1 TRADITIONAL STOCK OPTIONS. The Corporation hereby agrees to grant
to MADDON under the Corporation's existing or new stock option plan, irrevocable
options to purchase up to 500,000 shares of the Corporation's Common Stock
(the "Traditional Options"), as follows:
a. INCENTIVE STOCK OPTIONS. MADDON shall have the right to elect to
receive options which constitute Incentive Stock Options ("ISOs"), as
defined in Section 422A of the Internal Revenue Code of 1986, as amended
(the "Code") to the maximum extent allowable under Section 422A, with an
option exercise price of $4.40 per share, which is 110% of the price at
which the Series B Preferred Stock Units of the Corporation were recently
sold. The parties agree that $4.40 is well in excess of 110% of the current
fair market value of the Corporation's Common Stock. The ISOs shall have a
duration of five (5) years from the date hereof. Twenty percent (20%) of
the ISOs shall be exercisable immediately on the date hereof and an
additional twenty percent (20%) shall be exercisable on each anniversary of
the date hereof. Based on this vesting schedule and an assumption that the
fair market value of the Common Stock is $4.00, the amount and exercise
schedule of the ISOs shall be as follows, subject to the forfeiture and
acceleration provisions set forth below:
Incremental
Date Options Exercisable Value Becoming Exercisable
---- ------------------- --------------------------
12/15/93 22,727 $90,908
12/15/94 22,727 $90,908
12/15/95 22,727 $90,908
12/15/96 22,727 $90,908
12/15/97 22,727 $90,908
--------
T0TAL 113,635
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<PAGE>
b. NONQUALIFIED OPTIONS. The balance of the Traditional Options
(386,365 shares if MADDON elects to receive ISOs as provided above) will
be in the form of non-qualified options ("NQOs") at an exercise price of
$4.00 per share. Subject to the forfeiture and acceleration provisions set
forth below, the NQOs shall vest, be exercisable and expire as follows
(share numbers based on ISOs having been granted as described above):
Tranche Tranche Cumulative
Tranche Execisable as to Exercisable Exercisable As
Vesting Date Shares % Total Until of Vesting Date
------------ ------ ------- ----------- ----------------
Dec 15, 1993 77,273 20% Dec 15, 2003 77,273 Shares
Dec 15, 1994 77,273 20% Dec 15, 2004 154,546 Shares
Dec 15, 1995 77,273 20% Dec 15, 2005 231,819 Shares
Dec 15, 1996 77,273 20% Dec 15, 2006 309,092 Shares
Dec 15, 1997 77,273 20% Dec 15, 2007 386,365 Shares
c. ACCELERATION OF EXERCISE SCHEDULE. Subject to any limitations
imposed under Section 422A of the Code with respect to acceleration of
ISOs, all Traditional Options shall vest and become fully exercisable
immediately prior to the consummation of any transaction which results in
an Acquisition. The term "Acquisition" shall mean (a) the merger of the
Corporation into or the consolidation of the Corporation with any
corporation where the Corporation is not the surviving organization (other
than a merger or consolidation undertaken for the primary purpose of
changing the state of incorporation of the Corporation), (b) a Change in
Control, or (c) a sale of all or substantially all of the assets or stock
of the Corporation to one or more other corporations or entities. The term
"Change in Control" shall mean a change in control of the Company such that
the stockholders of the Company immediately prior to such change in control
would not immediately after such change in control beneficially own voting
securities representing in the aggregate more than 50% of the combined
voting power of the voting securities of the surviving entity, or the
members of the Board of Directors of the Company immediately prior to the
change in control would not immediately after the change in control
constitute a majority of the Board of Directors of the subsequent
corporation or entity.
5.2.2 VALUATION BASED OPTIONS. In addition to the Traditional Options,
the Corporation hereby agrees to grant to MADDON under the Corporation's
existing or new stock
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<PAGE>
option plan irrevocable NQOs to purchase up to 500,000 shares of the
Corporation's Common Stock at a price of $4.00 per share (the "Valuation
Based Options"). The Valuation Based Options shall have a duration of ten (10)
years from the date hereof. MADDON may exercise the Valuation Based Options in
accordance with the following exercise provisions:
a. MADDON may exercise the Valuation Based Options at any time on or
after the earlier to occur of (i) the date and time at which the Securities
and Exchange Commission declares effective the Corporation's registration
statement for the initial public offering of the Corporation's Common Stock
or (ii) immediately prior to the closing of an Acquisition of the
Corporation.
b. The portion of the Valuation Based Options which MADDON may exercise
at any time shall be as follows:
(1) If the Established Price is less than Eight Dollars ($8.00)
per share, then no portion of the Valuation Based Options may be
exercised.
(2) If the Established Price is equal to or greater than Eight
Dollars ($8.00) per share but less than Nine Dollars ($9.00) per share,
then MADDON may exercise the Valuation Based Options for 100,000
Shares.
(3) If the Established Price is equal to or greater than Nine
Dollars ($9.00) per share but less than Ten Dollars ($10.00) per share,
then MADDON may exercise the Valuation Based Options for 200,000
Shares.
(4) If the Established Price is equal to or greater than Ten
Dollars ($10.00) per share but less than Fourteen Dollars ($14.00) per
share, then MADDON may exercise the Valuation Based Options for 300,000
Shares.
(5) If the Established Price is equal to or greater than Fourteen
Dollars ($14.00) per share but less than Sixteen Dollars ($16.00) per
share, then MADDON may exercise the Valuation Based Options for 400,000
Shares.
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<PAGE>
(6) If the Established Price is equal to or greater than Sixteen
Dollars ($16.00) per share, then MADDON may exercise the Valuation
Based Options for 500,000 Shares.
The term "Established Price" shall mean (a) in the case of an initial
public offering, the per share offering price to the public of the
Corporation's Common Stock, or (b) in the case of an Acquisition, the gross
amount per share paid or available for distribution to holders of Common
Stock (assuming that all convertible or exchangeable securities are
converted or exchanged in accordance with their terms and all vested
options [other than the Valuation Based Options] are exercised). In the
case of an Acquisition in which there is an "earn-out" or other contingent
payment, the Established Price will include such additional payment as it
is earned or received.
Notwithstanding the foregoing, if following an initial public offering
of the Corporation's Common Stock, the Average Price during the Initial
Term (or any subsequent period while this Agreement is in effect) first
reaches the dollar amount set forth below, the Valuation Based Options
shall become exercisable to the extent not exercisable under the
Established Price provisions set forth above:
When Average Price Amount Becoming Cumulative Amount
First reaches Exercisable Exercisable
------------------ --------------- -----------------
$ 8.00 100,000 100,000
$ 9.00 100,000 200,000
$10.00 100,000 300,000
$14.00 100,000 400,000
$16.00 100,000 500,000
"Average Price" shall mean the thirty (30) day average market price of one
share of Common Stock, determined according to the procedures set forth in
the Corporation's 1993 Stock Option Plan.
By way of illustration, if the Established Price in an initial public
offering is $10.00, the Valuation Based Options shall become exercisable as
to 300,000 shares. If subsequent to the initial public offering, the
Average Price reaches $14.00, the Valuation Based Options shall become
exercisable as to an additional 100,000 shares, bringing the cumulative
exercisable amount to 400,000.
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<PAGE>
5.2.3 GENERAL TERMS OF OPTIONS. The Traditional Options and the Valuation
Based Options (collectively, the "Options") will be set forth in one or more
written stock option agreements to be executed and delivered to MADDON
contemporaneously with the execution and delivery of this Agreement. The
option agreement(s) shall provide that in the event MADDON wishes to exercise
the exercisable portion of an option, MADDON shall send written notice to the
Corporation specifying a date (not later than twenty (20) business days and
not earlier than the next business day following the date such notice is
given) for the closing of such purchase. In the event of any change in the
number of issued and outstanding shares of Common Stock by reason of any
stock dividend, stock split, split-up, recapitalization, merger or other
change in the corporate or capital structure of the Corporation which affects
the holders of Common Stock generally, the number of shares subject to the
Options and the purchase price per share shall be appropriately adjusted to
restoreMADDON to his rights hereunder. The exercise price of the Options may
be paid by MADDON in cash, by a promissory note in a form and on terms
acceptable to the Corporation (provided the par value of the shares is paid
in cash and the issuance of shares against such note does not violate margin
rules or other laws) or by the delivery of Common Stock of the Corporation.
In the latter case the fair market value of the Common Stock delivered will
be applied to the exercise price.
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<PAGE>
Except as provided herein or as may be required under Section 422A of the
Code with respect to ISOs, neither the Traditional Options nor the Valuation
Based Options shall be subject to any limitations under any stock option plan
or otherwise on the post-employment period during which such options may be
exercised or to any repurchase rights by the Corporation.
5.3 REGISTRATION RIGHTS. If at any time the Corporation proposes to
register any of its Common Stock under the Securities Act of 1993, as amended
(the "Securities Act"), or to register or qualify such securities under state
securities laws ( "Blue Sky Laws" ) for the purpose of an offering or sale by
or on behalf of any holder of stock of the Corporation, then the Corporation
shall give MADDON prompt notice of the Corporation's intention to do so, at
least twenty (20) business days prior to the time when any registration
statement is filed with the Securities and Exchange Commission (the
"Commission") or any state securities commission. The Corporation will keep
MADDON informed of the general schedule for such filing and any material
delays therein.
Upon the written direction of MADDON given within fifteen (15) days
following the receipt by MADDON of such written notice from the Corporation,
the Corporation shall include in such registration statement and/or Blue Sky Law
filing such number of the shares owned by MADDON (or to be
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<PAGE>
owned as a result of any exercise of Options by MADDON in connection with the
registration) (such owned or exercisable option shares being herein referred
to as "MADDON Registrable Securities") as MADDON may request; provided,
however, that in the event that the managing underwriter advises the
Corporation that inclusion of the MADDON Registrable Securities or
securities owned by other stockholders will in the judgment of the managing
underwriter adversely affect the ability of the underwriters to market the
securities being registered on behalf of the Corporation, then the
Corporation may reduce the number of MADDON Registrable Securities included
in the registration so that the total number of shares being registered meets
the requirements of the managing underwriter; provided, however, that the
number of MADDON Registrable Securities and the number of shares of other
stockholders to be included in the registration will be reduced pro rata
based on the number of shares initially requested to be included in such
registration by MADDON and by such other stockholders. Upon the registration
of the MADDON Registrable Securities, the Corporation agrees to provide
customary indemnification, to the extent permitted by law and requested by
the managing underwriter, to MADDON and each person who participates as
underwriter in any offering or sale of such MADDON Registrable Securities.
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<PAGE>
The Corporation covenants that it will not grant any registration rights to
any other persons which are more favorable than those granted to MADDON hereby.
6. BENEFITS AND FACILITIES.
MADDON shall receive the same basic insurance (life, medical and dental)
benefits provided to all the other executives of the Corporation, in
accordance with the Corporation's general policies. MADDON shall receive
disability insurance coverage equal to seventy percent (70%) of his Salary
and otherwise on the terms provided to other executives of the Corporation.
MADDON shall at all times have such amenities (e.g., office, secretarial,
and laboratory facilities) appropriate to his position to the extent that the
finances of the Corporation permit.
7. EXPENSES.
The Corporation will pay or reimburse MADDON for all reasonable and
necessary traveling and other expenses, including private car service commuting
expenses, or in the alternative, car leasing expenses, incurred or paid by
MADDON in connection with the performance of his services under this Agreement,
on presentation of expense statements or vouchers and such other supporting
documentation as the Board may from time to time request.
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<PAGE>
8. TERMINATION.
8.1 The Term and this Agreement, except those provisions specified to
survive termination, shall terminate before the expiration date set forth above
in Section 2 on the occurrence of the earlier of the following:
8.1.1 On the dissolution of the Corporation;
8.1.2 On the death or disability of MADDON. Disability shall mean the
failure by MADDON, because of illness or incapacity, to render for One
Hundred Twenty (120) days consecutively or One Hundred Eighty (180) days
cumulatively during any year of the Term, services of the character
contemplated by this Agreement;
8.1.3 On the dismissal of MADDON for good cause shown, which shall mean
such cause as the courts of the State of New York (including federal courts)
have determined to be justifiable cause for termination of employment including
the continual failure by MADDON to perform substantially his duties with the
Corporation (other than any such failure resulting from incapacity due to
physical or mental illness) after a demand for substantial performance is
delivered to MADDON by the Board, conviction of a felony involving moral
turpitude, habitual drunkenness, excessive absenteeism not related to sick
leave or vacations (but only after notice from the Board followed by a
repetition of such excessive absenteeism), dishonesty directly and materially
- 15 -
<PAGE>
injurious to the Corporation, or continuous conflict of interest after notice
in writing from the Board;
8.1.4 On the dismissal of MADDON without cause; and
8.1.5 On the resignation of MADDON.
8.2 Upon termination of the Term and this Agreement at the expiration of
the Term pursuant to Section 2 or on the dissolution of the Corporation,
MADDON shall (i) be entitled to receive any amounts from the Corporation then
due but unpaid plus the Minimum Bonus, prorated to the date of termination,
(ii) be vested with all of the Options under Section 5.2 hereof, and (iii)
shall have the right to exercise such Options in accordance with Section 5.2
hereof. Upon the dismissal of MADDON for good cause or on the resignation of
MADDON, MADDON shall (i) be entitled to receive any amounts from the
Corporation then due but unpaid plus the Minimum Bonus, prorated to the date
of termination, (ii) have the right to exercise any ISOs and Valuation Based
Options then vested in MADDON only for a period of three months after the
date of termination, (iii) have the right to exercise any other Options then
vested in MADDON in accordance with Section 5.2.1 hereof, and (iv) any
Options not vested at the date of termination shall be forfeited. Upon the
termination of the Term and this Agreement on the death or disability of
MADDON, MADDON's estate or MADDON, as the case may be, shall (i) be entitled
to receive any amounts from the Corporation
- 16 -
<PAGE>
then due but unpaid plus the Minimum Bonus, prorated to the date of
termination, (ii) have the right to exercise any Traditional Stock Options
vested in MADDON in accordance with Section 5.2.1, (iii) have only one year
after such termination to exercise any Valuation Based Options, and (iv) any
Options not vested at the date of termination shall be forfeited. Upon
termination of the Term and this Agreement on the dismissal of MADDON without
cause, MADDON shall (i) be entitled to receive any amounts from the
corporation then due but unpaid plus the Minimum Bonus, prorated to the date
of termination, (ii) for a period of two years (but in no event after the end
of December 14, 1998) following such termination, continue to receive the
annual Salary, the Minimum Bonus, and the basic insurance benefits described
in Section 5 hereof, (iii) be vested with all of the Options under Section
5.2 hereof, (iv) have the right to exercise any Traditional Stock Options in
accordance with Section 5.2.1, and (v) have the right to exercise any
Valuation Based Options for a period of five years from the date of
termination.
9. COVENANT NOT TO COMPETE AND NON-DISCLOSURE OF CONFIDENTIAL INFORMATION.
9.1 During or after the Term of this Agreement and/or MADDON's
employment by the Corporation, MADDON shall not without the Corporation's
prior written consent use or disclose any "Proprietary Information" (as
defined in Section 10.1) or any other confidential information relating to the
- 17 -
<PAGE>
Corporation (including, but not limited to, data on which patents have been
applied for or issued or other proprietary intellectual property, customer
lists, financial information, sales and marketing data), or its business,
obtained during the course of his employment.
9.2 MADDON shall not during the Term hereof and for a period of Two (2)
years after the expiration or earlier termination of the Term, directly or
indirectly, own, manage, operate, or control, any business in competition
with or similar to the type of business conducted by the Corporation, and
will not render services, directly or indirectly, to any "Conflicting
Organization" (as hereinafter defined). The foregoing shall not apply to
the ownership by MADDON of less than One percent (1%) of the securities of a
publicly traded organization. "Conflicting Organization" means any person or
organization engaged in or about to become engaged in servicing, production,
marketing or selling of, a "Conflicting Product" (as hereinafter defined);
provided, however, the foregoing shall not prohibit MADDON from working for a
division or other business unit of an organization involved with a
Conflicting Product provided such division or business unit is not itself
involved with a Conflicting Product. "Conflicting Product" means any product,
process, or service, in existence or under development, of any person or
organization other than the Corporation which resembles or competes with a
product, process, or service of the
- 18 -
<PAGE>
Corporation, in existence or under development. In the event that the
Corporation terminate MADDON's employment under this Agreement without cause,
MADDON's obligation under the foregoing with respect to non-competition with
the Corporation for a period of Two (2) years after such termination shall no
longer be applicable.
9.3 During or after the Term of this Agreement and/or MADDON's
employment by the Corporation, MADDON shall not solicit or induce any
employees of the Corporation to leave the Corporation to work for any entity
or person engaged in the same business as the Corporation, either directly or
indirectly.
10. PROPRIETARY INFORMATION.
10.1 MADDON understands that the Corporation possesses and will
continue to possess "Proprietary Information" (as defined below) and/or
"Inventions" (as defined below) that have been created, discovered, or
developed, or have otherwise become known to the Corporation.
10.1.1 For purposes of this Agreement, particularly for this Section
10, "Proprietary Information" shall include, but not be limited to, trade
secrets, processes, formulae, data and know-how, improvements, "Inventions"
(as defined below), techniques, marketing plans, strategies, forecasts and
customer lists, improvements, including without limitation, information
created, discovered, developed or made known by MADDON and within the scope
of this Agreement or to MADDON
- 19 -
<PAGE>
during the period of or arising out of his retention by the Corporation,
and/or in which property rights have been assigned or otherwise conveyed to
the Corporation, which information has commercial value in the business in
which the Corporation is engaged.
10.1.2 For purposes of this Agreement, particularly for this Section 10,
"Inventions" shall mean any improvements, inventions, formulae, processes,
techniques, know-how and data, whether or not patentable, made or conceived
or reduced to practice or learned by MADDON, either alone or jointly with
others, during the period of his employment, and/or during the twelve
(12)months immediately following termination of his employment which:
(a) are within the scope of the duties to be performed by MADDON
under this Agreement and are related to or useful in the business of the
Corporation, or
(b) result from tasks assigned MADDON by the Corporation, or
(c) are funded by the Corporation, or
(d) result from use of premises owned, leased or contracted for
by the Corporation.
10.2 In consideration of his employment by the Corporation and the
compensation received by MADDON from the Corporation, MADDON agrees as
follows:
10.2.1 All Proprietary Information including, but not limited to, all
"Inventions" as defined above, shall
- 20 -
<PAGE>
be the sole property of the Corporation and its assigns and MADDON assigns to
the Corporation any rights he may have or acquire in all Proprietary
Information.
10.2.2 All documents, data, records, apparatus, equipment, and other
physical property, whether or not pertaining to Proprietary Information,
furnished to MADDON by the Corporation or produced by MADDON or others in
connection with his employment, shall be and remain the sole property of the
Corporation and shall be returned promptly to the Corporation as and when
requested by the Corporation. Should the Corporation not so request, MADDON
shall return and deliver all such property upon termination of his employment
with the Corporation for any reason and MADDON will not take with him any
such property or any reproduction of such property upon such termination but
this shall not apply to MADDON's personal diaries and papers provided same do
not contain information relating to Proprietary Information or Inventions.
10.2.3 MADDON will promptly disclose all Inventions to the Corporation, or
any persons designated by it. Such disclosures shall continue for One (1)
year after termination of this Agreement with respect to anything that would
be an Invention if made, conceived, reduced to practice or learned during the
Term.
10.2.4 The Inventions shall become and remain the property of the
Corporation, whether or not patent
- 21 -
<PAGE>
applications are filed thereon. Upon request and at the expense of the
Corporation, MADDON shall make application through the patent attorneys or
agents of the Corporation for letters patent of the United States and any and
all other countries at the discretion of the Corporation on the Inventions
and to assign all such applications to the Corporation or its order
immediately, all without additional payment, during MADDON's period of
employment by the Corporation and for one year after the termination of
employment. MADDON shall give the Corporation, its attorneys and agents all
reasonable assistance in preparing and prosecuting such applications and, on
request of the Corporation, MADDON shall execute all papers and do all things
that may be reasonably necessary to protect the rights of the Corporation and
vest in it or its assigns the inventions, applications, and letters patent
herein contemplated.
11. RETURN OF DOCUMENTS.
On the expiration or earlier termination of the Term or MADDON's
resignation, discharge or earlier departure from the Corporation, MADDON
shall promptly surrender to the Corporation all of the Corporation's books,
records, documents and customer lists and/or other of the Corporation's
materials or records he may have in his possession, including but not limited
to the materials described in Section 10.2.2.
- 22 -
<PAGE>
12. REMEDIES.
12.1 MADDON agrees that his services are of a special, unique and
extraordinary character, that it would be extremely difficult to replace such
services, and that, in the event of a breach or threatened breach of any of
the provisions of this Agreement, the Corporation will not have an adequate
remedy at law. Accordingly, the Corporation shall be entitled to enforce such
provisions by means of injunctive relief as may be available to restrain
MADDON and any business, firm, partnership, individual, corporation or entity
participating in such breach or threatened breach from the violation of the
provisions hereof, without thereby waiving any other legal or equitable
remedies available to the Corporation. Likewise, Maddon shall be entitled to
enforce the provisions of this Agreement by means of injunctive relief as may
be available to restrain the Corporation from the violation or threatened
violation of the provisions hereof, without thereby waiving any other legal
or equitable remedies available to him.
12.2 If any of the covenants contained in this Agreement or any part
thereof is held to be unenforceable because of the duration thereof or the
area or scope covered thereby, the parties hereby agree that the court making
such determination shall have the power to reduce the duration, area and/or
scope of such covenant so that in its reduced form, the covenant shall be
enforceable.
- 23 -
<PAGE>
13. TRANSFER AND ASSIGNMENT.
This Agreement will extend to and be binding on MADDON, his legal
representatives, heirs, and distributees, and on the Corporation, its
successors and assigns, and the term "Corporation" as used in this Agreement
will include such successors and assigns.
14. MODIFICATIONS.
This instrument contains the entire agreement of the parties and the
parties have made no other agreements, representations or warranties relating
to the subject matter of this Agreement. No modification of this Agreement
will be valid unless made in writing and signed by the parties.
15. NOTICES.
Any notices required or permitted to be given under this Agreement must
be in writing, by certified mail, return receipt requested to the parties, at
the addresses given herein.
16. WAIVER AND BREACH.
The waiver or breach of any term or condition of this Agreement will not
be deemed to constitute the waiver of any other breach of the same or any
other term or condition.
17. GOVERNING LAW AND JURY TRIAL WAIVER.
This Agreement will be governed by and construed in accordance with the
laws of the State of New York applicable to contracts made and to be
performed entirely within that
- 24 -
<PAGE>
State. In any litigation based on any claim hereunder, the parties hereto
agree to waive trial by jury.
PROGENICS PHARMACEUTICALS, INC.
By: /s/ ROBERT A. MCKINNEY
-------------------------------
Vice President
/s/ PAUL J. MADDON
-------------------------------
PAUL J. MADDON
- 25 -
<PAGE>
Exhibit 10.8
[LETTERHEAD]
August 25, 1994
Robert J. Israel, M.D.
26 Rossmore Terrace
Livingston, NJ 07039
Dear Bob,
This letter is to confirm our offer to you of the position of Vice President of
Medical Affairs with Progenics Pharmaceuticals, Inc. This professional position
includes the following compensation and benefits package:
STARTING SALARY: $6,875.00 semi-monthly.
ON HIRE BONUS: $10,000.00, which will be paid to you on your starting date.
Please see the enclosed On Hire Bonus Agreement for terms and conditions.
EQUITY PARTICIPATION: You will be granted an option to purchase 75,000 shares of
Progenics Common Stock at $4.00 per share pursuant to the terms of Progenics'
1993 Stock Option Plan. The shares subject to option shall vest ratably over
five years beginning at the end of your first year of employment. The options
terminate at the end of ten years from the date your employment commences and
will otherwise be subject to the terms of the Company's 1993 Stock Option Plan.
You will receive an option certificate setting forth the specific terms of your
option.
BENEFITS: Participation in Progenics' Medical, Dental and other benefit plans
that are available for all professional employees.
PERFORMANCE & SALARY REVIEWS: You will receive a performance and salary review
at the end of each calendar year beginning 1995.
SEVERANCE TERMS AND CONDITIONS: Please see the attached Severance Terms and
Conditions.
<PAGE>
RELOCATION ASSISTANCE: The Company will provide relocation assistance up to a
maximum of $20,000.00 provided that your relocation is completed within two
years of your employment starting date. Specifically, you will be reimbursed,
after your relocation is completed, for the reasonable, necessary and documented
moving, house hunting trips for your family, storage and closing costs not to
exceed $20,000.00 in aggregate.
IMMIGRATION LAW: The Immigration Reform and Control Act of 1986 (IRCA) requires
that Progenics, like all employers, verify the employment authorization of every
employee hired in order to determine if the individual is LEGALLY AUTHORIZED TO
WORK IN THE UNITED STATES. The verification process requires that all new
employees complete and sign an Employment Eligibility Verification Form (Form
I-9) certifying United States citizenship or authorization to work in the United
States. It also requires that employers examine specific documents that the
employee must provide within three days of starting work or within twenty days
if proof is presented that request has been made to the appropriate agency for
the necessary documents.
I am very pleased to offer you this position, Bob. As I explained, the
above offer is contingent on your successful completion of Progenics'
pre-employment physical examination, the receipt of documentation in support of
your 1993 salary and bonus levels, and your signing of the enclosed statements
of basic information about which all new employees ought to be aware. Please
review the documents carefully before accepting the position of Vice President
of Medical Affairs at Progenics, and call Rob McKinney, Vice President, Finance
and Operations if you have any questions or need additional information. Please
respond in writing to this offer within two weeks of the date of this letter and
I look forward to your joining Progenics on or before October 3, 1994.
Very truly yours,
/s/ Paul J. Maddon
Paul J. Maddon, M.D., Ph.D.
Chairman and CEO
Scientific Director
Encl.
<PAGE>
ON HIRE BONUS AGREEMENT
Attached are three copies of an agreement concerning your on hire bonus
which you must sign as a condition of your employment with Progenics. Please
fill out, initial where indicated and sign and witness all three copies and
return two signed originals to Rob McKinney, Vice President, Finance and
Operations. The third copy is for your records.
<PAGE>
ON HIRE BONUS AGREEMENT
As part of your compensation package includes an on hire bonus in the
amount of $10,000.00. This bonus is being paid to you on the condition that you
remain employed with Progenics for at least two years from your employment start
date. One twenty-fourth of the bonus amount will be considered earned at the end
of each full month if you are still in the employ of Progenics at the end of
such period. In the event that your employment is terminated by the Company
without cause, the entire bonus will be considered earned at that time.
If you chose to leave the Company voluntarily prior to your second year
anniversary date or if your employment is terminated by Progenics for cause
defined as continual failure to perform substantially your duties, conviction of
a felony, habitual drunkenness, excessive absenteeism, dishonesty, unauthorized
disclosure of confidential information, continuous conflict of interest or any
other reason constituting cause under New York or federal law, you agree that
the unearned portion of the bonus will become due and payable as of the
termination of your employment and that you will repay such amount to Progenics
immediately upon termination. You hereby authorize Progenics to set-off such
amount of the unearned bonus against any amounts, including wages, which
Progenics may then be required to pay you. To ensure that your repayment
obligation is fulfilled, to the extent permitted by applicable law, by your
signature below you hereby authorize Progenics to withhold such unearned bonus
amount from any amounts owed by Progenics to you until you have made such
repayment.
I hereby agree to the
foregoing terms and conditions:
/s/ Robert J. Israel Witness: /s/ Elise Israel
- ---------------------------- -------------------
Robert J. Israel, M.D.
157385229 Date: 9/1/94
- ---------------------------- ------------------------
Social Security No.
Date: 9/1/94
----------------------
<PAGE>
SEVERANCE TERMS AND CONDITIONS
Attached are three copies of a Severance Terms and Conditions concerning
your severance arrangement which you must sign as a condition of your employment
with Progenics. Please fill out, initial where indicated and sign and witness
all three copies and return two signed originals to Rob McKinney, Vice
President, Finance and Operations. The third copy is for your records.
<PAGE>
SEVERANCE TERMS AND CONDITIONS
If your employment is terminated by Progenics without cause, you will be
entitled to nine (9) months of salary continuation, at your then current salary,
during which time the Company will continue to provide medical and dental
benefits under its then current plans. If at any time during such severance
period you have secured new employment, all salary and benefits continuation
will cease. In addition, if your employment is terminated by Progenics without
cause, you will immediately vest in the greater of 37,500 of the stock options
granted in this package or the number of stock options that has vested at the
termination date.
Progenics' obligation to provide you salary continuation is contingent upon
your spending substantially all of your working time in good faith and diligent
effort to secure new employment commensurate with your training and experience.
You shall provide Progenics, at its request, evidence satisfactory to Progenics
that you are so engaged in a job search effort.
If you chose to leave the Company voluntarily prior to your second year
anniversary date or if your employment is terminated by Progenics for cause
defined as continual failure to perform substantially your duties, conviction
of a felony, habitual drunkenness, excessive absenteeism, dishonesty,
unauthorized disclosure of confidential information, continuous conflict of
interest or any other reason constituting cause under New York or federal
law, you will not be entitled to any severance benefits and all vested and
unvested stock options will be immediately forfeited.
Unless otherwise provided by applicable law, the provision of any severance
benefits to you is conditioned on your signing and delivering a severance
agreement containing releases and such other usual and customary provisions as
Progenics shall deem necessary or appropriate in the circumstances.
I hereby agree to the
foregoing terms and conditions:
/s/ Robert J. Israel Witness: /s/Elise Israel
- --------------------------------- --------------------
Robert J. Israel, M.D.
###-##-#### Date: 9/1/94
- --------------------------------- ------------------
Social Security No.
Date: 9/1/94
-----------------------------
<PAGE>
CERTAIN DISCLOSURES ABOUT WORKING CONDITIONS
During the course of your employment with Progenics you may come in contact
with the various chemicals and/or biologics which are used in Progenics'
research, development and production activities. You will be expected to comply
with the policies and procedures which Progenics may establish from time to time
involving safety and security.
In addition, because of the importance which Progenics places on employee
health and safety we want to advise you that there is asbestos present within
Progenics' facilities. When we leased our space from Union Carbide we were
advised by Union Carbide that asbestos was present in the facility. Information
on the location of asbestos is on file at Progenics and will be made available
to you upon request. Before moving in we had the premises tested for asbestos
and we were informed that no particles of any size or type were detectable by
scanning electron microscopy. To prevent disturbance to the asbestos certain
areas are kept locked by Progenics and should not be entered by you.
To acknowledge the foregoing please sign below.
/s/ Robert J. Israel Witness: /s/ Elise Israel
- -------------------------------- ----------------------
Robert J. Israel, M.D.
- -------------------------------- Date: 9/1/94
Social Security No. -------------------------
Date: 9/1/94
--------------------------
<PAGE>
Progenics Pharmaceuticals, Inc.
Old Saw Mill River Road
Tarrytown, NY 10591
EMPLOYEE PATENT ASSIGNMENT AND CONFIDENTIALITY AGREEMENT
Name: Robert J. Israel, M.D.
Employment Date: On or before October 3, 1994
In consideration of my employment, continued employment and the
salary/wages paid to me by Progenics Pharmaceuticals, Inc. or any of its parent,
subsidiary or affiliate companies (all hereafter collectively called
"PROGENICS") and other good and valuable consideration, I understand and agree
to the following provisions for the protection of Progenics' property rights and
for the protection of the rights of others who have entrusted Progenics with
confidential proprietary information:
1. DISCLOSURE TO PROGENICS. I agree to disclose fully and promptly to
Progenics all proprietary rights (the expression "proprietary rights" means all
intellectual and physical work product having actual or potential value to
Progenics including inventions, whether or not patentable and whether or not
tested or reduced to practice, discoveries, ideas, conceptions, developments,
designs, trade secrets, know-how and tangible expressions, whether or not
copyrightable, and whether or not relating to human pharmaceutical research and
development, molecular biology, virology, immunology, biochemistry, data
processing, computer software systems, programs or procedures) developed,
conceived, reduced to practice or learned by me solely or jointly with others,
at any time during the term of my employment and for a period of two years
thereafter and which proprietary rights relate to the actual or anticipated
business activities of Progenics, result from, or are suggested by, work which I
do for Progenics, are funded in whole or in part by Progenics, or result from
any use of premises, equipment or property (tangible or intangible) owned,
leased, licensed or contracted for by Progenics. I agree to make and maintain
written records of the aforesaid proprietary rights and to submit promptly the
same, and supplemental oral disclosure, to my superiors at Progenics.
2. ASSIGNMENT OF RIGHTS TO PROGENICS. I agree to assign and hereby do
assign to Progenics as its exclusive property the entire right, title and
interest in and to all proprietary rights embraced by Paragraph 1 above. I
further agree to execute all papers, and otherwise to provide all requested
assistance, at Progenics' expense, during and subsequent to my employment, to
enable Progenics or its nominees to obtain such patents, copyrights and other
legal protection as it may desire in any country.
<PAGE>
3. CONFIDENTIALITY. I agree to preserve in confidence, and not to use, to
publish, or to otherwise disclose to, either during or subsequent to my
employment, without the written permission of Progenics, all confidential
proprietary rights or any knowledge, information or materials about the
products, services, know-how, research and development, customers, business
plans of Progenics or any confidential information about financial matters,
marketing, pricing, compensation or any other confidential information of
Progenics, its customers, or others from whom Progenics has received information
under obligations of confidence (collectively, "CONFIDENTIAL INFORMATION").
4. TERMINATION OF EMPLOYMENT. In the event of the termination of my
employment at Progenics, whether or not such termination is voluntary, I will
deliver promptly to my superior at Progenics all documents which relate to the
business activities of Progenics, and all materials and things which belong to
or have been entrusted by others to Progenics;
5. CONFIDENTIAL INFORMATION OF OTHERS. I agree not to disclose to
Progenics, or to use in my work at Progenics any confidential information
belonging to others, or any prior inventions made by me which Progenics is not
entitled to learn of or use. I represent that the inventions identified in the
________ pages I attach hereto constitute all of the unpatented inventions which
I have made prior to my employment at Progenics, which inventions shall be
excluded from this agreement. (It is only necessary to list the title of such
inventions and the purpose thereof.) If there are no such unpatented inventions,
employee initial here:_________.
6. PRIOR AGREEMENTS. I represent that I have attached hereto a copy of any
agreement (such as a prior employment agreement) which affects my ability to
comply with the terms of this agreement. If there is no such agreement, employee
initial here: ______.
7. MISCELLANEOUS. This agreement shall be binding on my executors,
administrators, heirs, legal representatives or assigns, and may not be modified
except in writing with the approval of an officer of Progenics. If any provision
of this agreement is determined to be illegal or unenforceable, because of the
duration thereof or the area or scope covered, I hereby request any court
making such determination to reduce the duration, area and/or scope so that in
its reduced form such covenant shall be enforceable and I agree that in such
event all remaining provisions shall remain in full force and effect.
8. GOVERNING LAW. The validity, interpretation and performance of this
Agreement shall be governed according to the laws of the State of New York
applicable to agreements made and to be performed entirely in that state,
without reference to any conflict of laws rules or principles.
/s/Robert J. Israel Witness: /s/ Elise Israel
- ---------------------------- -------------------
Robert J. Israel M.D.
Date:
###-##-#### -----------------------
- ----------------------------
Social Security No.
Date: 9/1/94
---------------------
<PAGE>
Progenics Pharmaceuticals, Inc.
Old Saw Mill River Road
Tarrytown, NY 10591
EMPLOYEE NON-COMPETITION AND NON-SOLICITATION AGREEMENT
Name: Robert J. Israel, M.D.
Employment Date: On or before October 3, 1994
In consideration of my employment, continued employment and the
salary/wages paid to me by Progenics Pharmaceuticals, Inc. or any of its parent,
subsidiary or affiliate companies (all hereafter collectively called
"PROGENICS") and other good and valuable consideration, I understand and agree
to the following provisions:
1. NON-COMPETITION. To the extent I am or was personally involved in or
substantively knowledgeable of confidential Progenics developments, I will
not during my employment and for a period of twelve (12) months after
termination of my employment with Progenics (whether or not such termination
is voluntary) accept a consulting engagement or employment with a competitor
of Progenics without written permission from Progenics which permission will
not be unreasonably withheld in those instances where such employment or
engagement does not involve risk of use or disclosure of Confidential
Information. As used herein, the term "Confidential Information" refers to
all confidential proprietary rights or any knowledge, information or
materials about the products, services, know-how, research and development,
customers, business plans of Progenics or any confidential information about
financial matters, marketing, pricing, compensation or any other confidential
information of Progenics, its customers, or others from whom Progenics has
received information under obligations of confidence.
2. NON-SOLICITATION. During the term of my employment and for a period of
two (2) years thereafter I will not solicit or attempt to induce, directly or
indirectly, any employee of Progenics to accept a consulting engagement or
employment with a competitor of Progenics.
<PAGE>
3. ENFORCEMENT I agree that Progenics would not be fairly compensated by
money damages for any breach of this Agreement by me and therefore in the event
of a breach or threatened breach of this Agreement Progenics shall be entitled
to specific performance, an injunction and other equitable relief in addition to
money damages and other legal remedies. I hereby waive any requirement that
Progenics post a bond or surety in connection with its attempts to enforce this
Agreement.
4. MISCELLANEOUS. This agreement shall be binding on my executors,
administrators, heirs, legal representatives or assigns, and may not be modified
except in writing with the approval of an officer of Progenics. If any provision
of this agreement is determined to be illegal or unenforceable, because of the
duration thereof or the area or scope covered, I hereby request any court making
such determination to reduce the duration, area and/or scope so that in its
reduced form such covenant shall be enforceable and I agree that in such event
all remaining provisions shall remain in full force and effect.
5. GOVERNING LAW. The validity, interpretation and performance of this
Agreement shall be governed according to the laws of the State of New York
applicable to agreements made and to be performed entirely in that state,
without reference to any conflict of laws rules or principles.
/s/Robert J. Israel Witness: /s/ Elise Israel
- -------------------------- ----------------------
Robert J. Israel, M.D.
###-##-#### Date: 9/1/94
- -------------------------- ---------------------
Social Security No.
Date: 9/1/94
--------------------
<PAGE>
Exhibit 10.9
TARRYTOWN SUBLEASE AGREEMENT
THIS AGREEMENT, made as of the 13th day of July, 1988, between UNION
CARBIDE CORPORATION, a New York corporation having offices at 39 Old Ridgebury
Road, Danbury, Connecticut 06817-0001 (hereinafter called "Landlord"), and
PROGENICS PHARMACEUTICALS, INC., a New York corporation having offices at 729
Seventh Avenue (12th Floor), New York, New York 10019 (hereinafter called
"Tenant"),
WITNESSETH:
----------
WHEREAS, by lease dated December 31, 1985, as modified by amendments dated
February 28, 1986, August 1, 1986 and March 21, 1988 (said lease, as amended,
being hereinafter called the "Prime Lease"), Landlord has leased from Keren
Limited Partnership (hereinafter called the "Overlandlord") certain space
within the real property of Overlandlord situated along Saw Mill River Road,
partly in the Town of Greenburgh and partly in the Town of Mount Pleasant,
County of Westchester and State of New York, as more particularly identified
in the Prime Lease (hereinafter called the "Site" ); and
WHEREAS, Tenant wishes to sublease from Landlord certain office and
laboratory space, consisting of approximately 3,804 rentable square feet, as
more particularly shown in Exhibit A-1 attached hereto (hereinafter called
the "Premises"), in the Silicones Building located upon the Site, as more
particularly
<PAGE>
identified in Exhibit A-2 attached hereto (hereinafter called the "Silicones
Building"); and
WHEREAS, Landlord is willing to sublease the Premises to Tenant upon the
terms and conditions as set forth below;
NOW, THEREFORE, in consideration of the rents reserved hereunder and the
mutual undertakings hereinafter set forth, Landlord and Tenant hereby
covenant and agree as follows:
ARTICLE 1 - LEASED PREMISES
1.1 Landlord hereby subleases to Tenant and Tenant hereby takes and hires
from Landlord, upon and subject to the terms, covenants, conditions and
provisions of this Agreement, the Premises and together with the right to
use, in common with Landlord and other tenants of the Site, at Tenant's sole
risk, (i) access roads, sidewalks and parking areas adjoining the Silicones
Building; (ii) lobby, stairways, elevators, hallways, loading docks,
lavatories, and other common areas of the Silicones Building; and (iii) one
conference room within the Silicones Building, as designated from time to
time by Landlord, subject to its right to schedule any use thereof. Any
exercise of the aforesaid use rights shall be subject to the provisions of
Article 12 as though such facilities were part of the Premises and to any
reasonable and non-discriminatory rules, regulations or restrictions
promulgated from time to time by Landlord for the safety, security,
convenience and operation of the Silicones Building or the Site.
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1.2 Tenant's rights to the possession, occupation and use of the Premises
shall be subject to Landlord's exception and reservation from the Premises of
access and other necessary rights to operate, maintain and repair any utility
or building systems servicing the Silicones Building, whether now existing or
hereafter installed upon the Premises, including without limitation the right
to maintain, repair, replace, change the size of and remove the same;
provided, however, that in exercising any such rights Landlord shall not
unreasonably interfere with Tenant's use of the Premises and Landlord shall
repair and replace the Premises to substantially the same condition existing
prior to any exercise of Landlord's rights.
ARTICLE 2 - TERM OF LEASE
2.1 The term of this Agreement shall commence on August 1, 1988 and shall
expire on July 31, 1991, unless it is sooner terminated as otherwise provided
herein. Prior to said commencement date, Tenant shall have the right to use
any part of the Premises from which Landlord has removed its equipment,
provided that any such use shall be subject to all of the terms, covenants,
conditions and provisions of this Agreement, except the payment of rent.
2.2 Tenant shall have the option to extend the term of this Agreement for
one (1) period of three (3) years, commencing August 1, 1991, upon the same
terms, covenants, conditions and provisions contained herein, except that
there
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exercises said option by written notice given to Landlord not later than
March 31, 1991.
ARTICLE 3 - RENT
3.1 Tenant shall pay to Landlord without notice or demand, in advance on
the first day of each calendar month during the term hereof, without any setoff,
counterclaim or deduction for any reason whatsoever, rent in the amount of
Nine Thousand Five Hundred and Ten Dollars ($9,510.00).
3.2 As of August 1, 1989 and each annual anniversary of said date during
the term of this Agreement and any extension period, the rent as payable
pursuant to Article 3.1 shall be revised and increased in the same proportion
as the increase, if any, in the Consumer Price Index, All Urban Consumers, New
York, New York - Northeastern New Jersey, All Items, issued by the United States
Department of Labor, Bureau of Labor Statistics (hereinafter called the
"CPI") for June immediately preceding such date over the CPI for June, 1988,
by multiplying the rent as set forth in Article 3.1 by a fraction, the
denominator of which shall be the CPI for June 1988 and the numerator of
which shall be the CPI for June immediately preceding such date. In no event
shall the rent for any period as so adjusted be less than the rent for the
immediately preceding period. If the CPI is revised or discontinued, Landlord
shall substitute such other appropriate government shall be no further
extension options, provided that Tenant
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index to obtain insofar as is practicable the same result as would have been
obtained if the CPI had not been revised or discontinued.
3.3 Upon the execution hereof, Tenant shall deliver to Landlord the rent
for August 1988, together with Nineteen Thousand and Twenty Dollars ($19,020.00)
as security for Tenant's full and faithful performance of its obligations
under this Lease. In the event that Tenant fails to fulfill any such
obligations, Landlord shall have the right to apply any or part of said
security deposit against such obligation. Promptly under Landlord's demand,
Tenant shall make any further deposits which may be necessary in order to
replenish any part of the aforesaid security deposit so applied by Landlord.
Upon the expiration of this Agreement, Landlord shall refund to Tenant the
security deposit, without interest, less any deductions heretofore made
hereunder.
ARTICLE 4 - USE
4.1 Tenant may use and occupy the Premises for executive and sales office
and pharmaceutical development purposes, involving protein chemistry, molecular
genetics and cellular biophysics, and for any other lawful purpose incidental
thereto, but for no other purpose. Notwithstanding the aforesaid, in no event
shall Tenant (i) bring or use any AIDS viruses on the Premises or perform any
confirmatory or
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conclusory testing of any drugs or other substances containing such viruses
in connection therewith, (ii) keep any animals upon the Premises except
appropriate facilities for laboratory mice (not exceeding 100 mice at
anytime) in compliance with all governmental requirements or (iii) perform
any work classified as more hazardous than NIH Biohazard Level 2 or without
full compliance with applicable National Institutes of Health and Center for
Disease Control (Atlanta) guidelines and recommended safeguards. Tenant shall
not cause or permit any dangerous, harmful or unhealthful condition or
nuisance to arise or be maintained in, at or on the Premises.
4.2 In its occupation and use of the Premises, Tenant shall comply
fully with all applicable local, State and Federal laws, ordinances, orders,
directives, rules and regulations. Tenant shall not by reason of its use of
the Premises at any time throughout the term of this Agreement violate or
cause to be violated any laws, ordinances, orders, directives or rules or
regulations of any local, State or Federal authorities having jurisdiction
thereof and the reasonable rules and regulations of the carriers insuring the
Premises, or the Board of Fire Underwriters or their equivalent, and such
compliance and observation shall be at Tenant's sole cost and expense. Tenant
shall indemnify and hold harmless Landlord from any
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claims, damages, loss, liability and obligation due to any violation of this
Article 4.2.
4.3 Tenant shall not produce, generate, emit, treat, recycle, store or
dispose of any hazardous or toxic materials, substances or wastes upon the
Premises, except generation and storage of small quantities of hazardous
wastes and the use of low level radioactive materials, all in accordance with
applicable local, State and Federal requirements; provided, however, that any
hazardous wastes shall not be stored upon the Premises for more than ninety
(90) days in any instance so that Tenant shall remain a ninety (90) days
exempt generator.
4.4 Tenant shall not dispose through the Site sewage system any hazardous
or toxic substances, materials or wastes, as determined pursuant to Federal,
State or local statutes, ordinances, regulations or restrictions, which
violate any governmental restrictions imposed upon Landlord's sewage
discharge or which Landlord or Overlandlord reasonably determines to be
harmful to the Site sewage system. In any event, Tenant shall not dispose of
any wastes in the Site sewer system, except in accordance with the
restrictions and limitations set forth in Wastewater Discharge Permit No.
3927 dated May 15, 1987, issued by the County of Westchester Department of
Environmental Facilities, and any amendments, modifications and replacements
thereof.
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4.5 Tenant shall not produce any toxic chemicals for commercial
purposes upon the Premises and shall maintain in place at all times such
procedures as may be required to remove from the Premises any toxic chemicals
produced thereon in a manner which complies with all applicable governmental
laws, ordinances and regulations.
4.6 In its occupation and use of the Premises, Tenant shall comply at a
minimum with any health, safety or operating regulations imposed by Landlord
with respect to the Silicones Building and other areas of the Site under
Landlord's control. Tenant shall be solely and exclusively liable to obtain
any zoning or other local permits necessary for its use of the Premises.
4.7 Landlord reserves the right (i) to require appropriate
identification, including the wearing or possession of prescribed
identification badges, at all times by employees, agents, contractors and
invitees of Tenant upon the Premises; (ii) to restrict entry to the Premises
during periods other than 7 a.m. to 6 p.m., Monday through Friday, except
for laboratory or development work or pursuant to prior written request; and
(iii) to impose such other security measures as may be appropriate.
Notwithstanding the aforesaid, Tenant shall remain solely and exclusively
liable for the security and protection of any property, including
confidential information
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and data, located upon the Premises; provided, however, that the parties
shall cooperate to maintain security and confidentiality within the Silicones
Building.
ARTICLE 5 - REPAIRS AND MAINTENANCE
5.1 Tenant shall take good care of the Premises and, at its sole cost and
expense, shall keep and maintain the interior of the Premises in a clean and
orderly condition and perform all necessary or required maintenance and
repairs thereto, except to the extent any condition is caused by the willful
act or gross negligence of Landlord. Tenant shall not cause or permit any
waste (other than reasonable wear and tear), damage or disfigurement to the
Premises, or any overloading of the floors of the Premises.
5.2 Except with respect to any damage or destruction arising out of the
negligence or willful misconduct of Tenant, its employees, agents or
contractors, Landlord shall make or cause Overlandlord to make all necessary
repairs to the Premises and any Site utility systems servicing the same and
shall perform any necessary snow removal.
ARTICLE 6 - ALTERATIONS
6.1 Tenant shall not make, or permit to be made, any alterations,
additions, installations, substitutions or improvements (hereinafter
collectively called the "Alterations") in or to the Premises without on each
occasion
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<PAGE>
first obtaining the prior written consent of Landlord and Overlandlord,
except for (a) minor non-structural changes, not exceeding Two Thousand
Dollars ($2,000.00) in any instance, which will not reduce the value of the
Silicones Building, adversely affect any utility systems, or impair the
building structural integrity, and (b) addition of trade fixtures and
equipment which do not damage the Premises. In performing any work upon the
Premises; Tenant shall comply with all governmental requirements and shall
cause its contractor to maintain builder's risk insurance and such other
insurance (including, without limitation, worker's compensation insurance) as
is then customarily maintained for such work, all with insurers licensed by
the State of New York. Landlord shall not unreasonably withhold its consent
to any non-structural Alterations.
6.2 Any Alterations to the Premises performed pursuant to Article 6.1
shall become part of the Premises and shall not be removed or subsequently
altered; provided, however, that Tenant shall retain title to, including the
right, subject to the provisions of Article 8.2, to remove from the Premises
at any time during the term hereof, any such trade fixtures or equipment used
in Tenant's business which are not necessary for the structural integrity of
the Silicones Building or the operation of the building utility systems.
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<PAGE>
ARTICLE 7 - SERVICES AND TAXES
7.1 Landlord shall cause Overlandlord to provide from 8 a.m. to 5 p.m.,
Monday through Friday, except Site holidays, heat, ventilation, air
conditioning, electricity, water, compressed air and distilled water to the
Premises (hereinafter individually and collectively called the "Services")
and such Services at other times as may be necessary for laboratory or
development work. Landlord shall furnish electricity to the Premises
sufficient for normal lighting and operation of light office and laboratory
equipment and in the event that Tenant uses any equipment having a heavy
usage of electricity or otherwise consumes an excessive amount of electricity
on a sustained basis, Landlord reserves the right to increase the rent set
forth in Article 3.1 to reflect any increased power consumption as determined
by a consultant mutually acceptable to the parties and to adjust such
increase periodically in proportion to any electric rate increases.
7.2 Landlord will provide the Services solely in conjunction with the
demise of the Premises and as necessary in order to permit Tenant to enjoy
the full use and occupation thereof. Tenant shall not make available or
resell any Services delivered hereunder to any other party. The Services
provided by Landlord shall not be deemed evidence that it is operating or
holding itself out as a public utility or that it will make available the
Services to any other party.
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7.3 Landlord shall not be liable to Tenant for any claims, damages,
loss or liability due to (i) Landlord's inability or failure to furnish any
of the Services on account of any force majeure occurrence as described in
Article 21.1, (ii) any failure of Overlandlord's utility suppliers to provide
adequate and reliable service which affects Landlord's ability to provide any
of the Services, or (iii) any inability, interruption or curtailment of any
of the Services due to equipment, labor or other problems which do not arise
out of the gross negligence or willful misconduct of Landlord, its employees,
agents or contractors. In no event shall Landlord be liable to Tenant for any
special, indirect, incidental or consequential damages due to any inability,
interruption or curtailment of any of the Services.
7.4 Tenant shall reimburse Landlord, as they become due, for any taxes,
excises or other governmental impositions payable by Landlord (other than
those as measured by net income) which arise due to any payments of rent,
additional rent or other amounts made hereunder.
7.5 Tenant shall pay and discharge when due all income, business, Social
Security and other taxes, levies, impositions and contributions required by
any Federal, State or local authority applicable to Tenant's business
conducted upon the Premises. Tenant shall indemnify and hold harmless Landlord
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<PAGE>
from any liability for such taxes, levies, impositions and contributions.
7.6 All payments required to be made by Tenant to Landlord under this
Article 7 shall be payable as additional rent within ten (10) days after
written demand therefor and shall be payable even though the term hereof
(including any extensions) has expired.
ARTICLE 8 - TERMINATION OF LEASE
8.1 At the expiration or earlier termination of the term hereof, Tenant
shall promptly vacate and yield up the Premises, broom clean and in the same
condition of order and repair in which they are required to be kept
throughout the term hereof, reasonable wear and tear excepted.
8.2 Upon the termination of this Agreement, Tenant shall remove all
personal property and any trade fixtures or equipment belonging to Tenant
which it is permitted to remove pursuant to Article 6.2; provided, however,
that in performing such work Tenant shall not impair the structural integrity
or the utility systems of the Silicones Building and that in each instance
Tenant repairs any damages to the Premises due to the installation or removal
of such property. Any trade fixtures, equipment or other property of Tenant
remaining upon the Premises at the expiration or termination of this
Agreement shall be deemed abandoned and may be removed or otherwise
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disposed of by Landlord without any notice or liability or obligation to
Tenant, but Tenant shall remain liable to reimburse Landlord for the cost of
performing any such work.
8.3 Anything to the contrary contained herein notwithstanding, upon the
expiration or other termination of this Agreement, Tenant shall remain liable
at its sole expense: (i) to make any repairs to the Premises as required
hereunder, (ii) to remove and dispose of properly any waste or other debris,
and (iii) to eliminate any nuisances or dangerous, harmful or unhealthful
conditions arising out of Tenant's use of the Premises or the removal of any
property therefrom. In the event that Tenant does not promptly perform any
such work as requested by Landlord, Tenant shall be liable to reimburse
Landlord the cost of so doing.
8.4 Upon the termination of this Agreement, Tenant shall deliver to
Landlord a certificate executed by Tenant's chief executive officer
confirming that Tenant has performed all necessary or appropriate
decontamination procedures upon the Premises so that it will be fit for
general use and occupancy without any exposure to conditions which could
constitute a danger, threat or hazard of bodily injury, sickness or disease.
ARTICLE 9 - SIGNS AND PROPERTY LOSS
9.1 Tenant may, subject to the prior written consent of the Landlord
(which consent shall not be unreasonably withheld) and Overlandlord, install,
at Tenants own cost and expense,
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such signs as it may require to identify Tenant's occupancy of the Premises.
Tenant shall be responsible to repair any damage to the Premises caused by
such installation, and Tenant shall remove such signs at the expiration or
other termination of the term hereof and repair any damage caused by such
removal. Tenant shall fully comply with all requirements of law pertaining to
installation and use of such signs.
9.2 In no event shall Landlord be liable for any loss, theft, or
destruction of any property located upon the Premises or any bodily injury,
death, sickness or disease of any employees, agents, contractors or invitees
of Tenant from any cause whatsoever, including without limitation, the
leakage or escape of any steam, electricity, gas, water, sewage, compressed
air or other utility service, the state of repair of the Plant Site or the
Premises or any latent defect therein; and Tenant shall release and indemnify
and hold harmless Landlord from all claims, damages, losses and liability of
Tenant and its employees, agents, contractors and invitees on account of such
matters, unless such matters are due to the willful act or gross negligence
of Landlord.
ARTICLE 10 - INSPECTION BY LANDLORD
10.1 During normal business hours upon reasonable notice and at any
time in the event of emergency, Tenant shall permit Landlord and Overlandlord
and the agents and contractors of Landlord and Overlandlord to enter the
Premises for the purpose of (i) inspecting the same, (ii) showing the
Premises to any
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prospective tenants or purchasers, or (iii) performing any work as provided
under Article 10.2.
10.2 Landlord, on behalf of itself and Overlandlord, reserves the right
at any time to enter upon the Premises and to make any necessary repairs
thereto, including without limitation any repairs to steam or utility lines,
to maintain a fire watch for insurance purposes or to take any other actions
as may be necessary or appropriate to eliminate any nuisances or any
dangerous, harmful or unhealthful conditions existing thereon. The
reservation of such rights shall not be deemed to be an acknowledgment of or
imply any duty or obligation on the part of Landlord to perform any such
actions, except where the obligation to do so is otherwise specifically set
forth herein. Tenant shall be solely liable for the condition and upkeep of
the Premises.
ARTICLE 11 - ASSIGNMENT AND SUB-LETTING
11.1 Tenant shall not assign this Agreement, sublet all or any part of
the Premises or grant any licenses or other third-party rights in or to the
Premises, without the prior written consent of Landlord and Overlandlord. Any
such assignment, sublease, license or other agreement made without such
consent shall be void. Landlord shall not unreasonably withhold its consent
to any assignment of this Agreement.
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ARTICLE 12 - INDEMNIFICATION AND INSURANCE
12.1 Tenant hereby releases and shall indemnify and hold harmless
Landlord from all claims, damages, loss and liability, including reasonable
attorneys' fees, on account of any bodily injury, sickness, disease, death,
property damage, contamination, pollution or environmental damage or
condition arising out of the occupation, operation or use of the Premises or
the adjoining streets, access roads, parking areas, passageways and loading
docks by Tenant, its employees, agents, contractors, customers or invitees.
12.2 It is understood that Tenant shall be responsible for obtaining or
maintaining insurance coverage for any personal property or fixtures
maintained upon the Premises. Tenant shall release and indemnify and hold
harmless Landlord and Overlandlord from any claims, damages, loss or
liability arising as a result of damage or destruction to such property or
fixtures in the event of a fire or other occurrence or any other condition
now existing or hereafter arising upon the Premises. Tenant shall obtain from
its insurance carriers a waiver of the right of subrogation against Landlord
for any loss or damage by fire or any other cause within the scope of said
fire and extended coverage insurance policies. If after using its best
efforts, Tenant is unable to obtain a waiver of subrogation from any of its
insurers, it shall give written
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notice thereof to Landlord and shall have no further obligation with respect
to obtaining a waiver of subrogation with respect to the applicable insurance
policy until it is replaced.
12.3 At its sole cost and expense, Tenant shall maintain and keep in
effect throughout the term of this Agreement, insurance against claims for
bodily injury (including sickness, disease and death) and property damage
occurring upon, in or about the Premises and the adjoining streets, access
roads, parking areas and passageways, under policies of comprehensive public
liability insurance, including broad form contractual liability and
automobile insurance, with limits of not less than THREE MILLION DOLLARS
($3,000,000) per occurrence for one (1) person, THREE MILLION DOLLARS
($3,000,000) per occurrence for two (2) or more persons, and THREE MILLION
DOLLARS ($3,000,000) for property damage. The aforesaid minimum insurance
limits shall in no way limit or diminish Tenant's liability to Landlord
pursuant to Article 12.1.
12.4 At its sole cost and expense, Tenant shall maintain and keep in
effect during the term hereof worker's compensation and employer's liability
insurance in the minimum amounts as required by law.
12.5 Upon the execution hereof, Tenant shall furnish to Landlord
certificates of insurance as evidence of the insurance coverage required
under Articles 12.2, 12.3 and 12.4, and each
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such policy of insurance shall provide that it shall not be amended, modified
or cancelled, except upon thirty (30) days' prior written notice to Landlord.
12.6 In no event shall Landlord be liable to Tenant for any special,
indirect, incidental or consequential damages on account of any default by
Landlord under this Agreement or any claims, damages or losses of Tenant
arising out of its possession, occupation, operation or use of the Premises.
ARTICLE 13 - DEFAULT
13.1 Each of the following shall be deemed a default by Tenant and a
breach of this Agreement:
(a) (i) filing of a petition for adjudication as a bankrupt, or for
reorganization, which is not dismissed within ninety (90) days or for an
arrangement under any Federal or State statute;
(ii) dissolution or liquidation of Tenant, without the transfer to
and assumption by a financially responsible third-party of this Agreement;
(iii) appointment of a permanent or temporary receiver or a
permanent or temporary trustee of all or substantially all the property of
Tenant;
(iv) taking possession of the property of Tenant by a governmental
officer or agency pursuant to statutory authority for dissolution,
rehabilitation, reorganization or liquidation; and
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(v) making by Tenant of an assignment for the benefit of
creditors.
If any event mentioned in this subdivision (a) shall occur, Landlord may
thereupon or at any time thereafter elect to cancel this Agreement upon
twenty (20) days' prior written notice to Tenant and this Agreement shall
terminate on the day in such notice specified with the same force and effect
as if that date were the date herein fixed for the expiration of the term of
this Agreement.
(b) (i) Default in the payment of the rent or additional rent
herein reserved or any part thereof for a period of ten (10) days
after receipt of written notice concerning such default.
(ii) Default in the performance of any other covenant or condition
of this Agreement on the part of Tenant to be performed for a period of
twenty (20) days after written notice from Landlord specifying the nature
of such default. For purposes of this subdivision (b)(ii), no default
on the part of Tenant in performance of work required to be performed or
acts to be done shall be deemed to exist if after receipt of the aforesaid
notice Tenant diligently takes action to rectify the same and prosecutes
such action to completion with reasonable diligence, subject, however, to
unavoidable delays.
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13.2 In case of any such default under Article 13.1(b) and at any time
thereafter following the expiration of the respective grace periods
above-mentioned, Landlord may serve a notice upon the Tenant electing to
terminate this Agreement upon a specified date not less than ten (10) days
after the date of serving such notice and this Agreement shall expire on the
date so specified as if that date had been originally fixed as the expiration
date of the term herein granted and all rent and additional rent applicable
to the balance of the term hereof shall thereupon become due and payable.
However, a default under Article 13.1(b) shall be deemed waived if such
default is cured before the date specified for termination in the notice of
termination served on Tenant pursuant to this Article 13.2.
13.3 In the event this Agreement shall be terminated pursuant to this
Article 13, or by summary proceedings or otherwise, Landlord may, in its own
name and in its own behalf, relet the whole or any portion of the Premises,
for any period equal to or greater or less than the remainder of the then
current term for any sum which it may deem reasonable, to any Tenant which it
may deem suitable and satisfactory, and for any use and purpose which it may
deem appropriate, and in connection with any such lease Landlord may make
such changes in the character of the improvements on the Premises as
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Landlord may determine to be appropriate or helpful in effecting such lease
and may grant concessions or free rent. However, in no event shall Landlord
be under any obligation to relet the Premises, or to pay Tenant any surplus
of any sums received by Landlord on a reletting of the Premises in excess of
the rent reserved in this Agreement.
13.4 All remedies specified in this Article 13 shall be non-exclusive
and Landlord's reliance upon such remedies shall not preclude it from
availing itself of any other rights or remedies which it may have at law or
in equity.
ARTICLE 14 - FIRE AND CASUALTY
14.1 In the event of any fire or other casualty which damages or
destroys less than fifty percent (50%) of the usable area of the Silicones
Building, including any part of the Premises, then, upon receipt of insurance
proceeds (whether or not the same are sufficient to pay for such repair and
reconstruction) by Overlandlord or the denial of liability by its applicable
insurer, Landlord shall cause Overlandlord to promptly repair and restore the
Premises pursuant to the Prime Lease, and the rent and additional rent shall
be equitably reduced as to such portion of the Premises which shall be
untenantable or unfit for occupancy by Tenant in the conduct of its business,
from the date of such destruction until the completion of such repairs and
reconstruction.
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14.2 In the event of any fire or other casualty which damages or
destroys more than fifty percent (50%) of the usable area of the Silicones
Building, including any part of the Premises, then (i) upon the receipt of
insurance proceeds by Overlandlord or the denial of liability by its
insurance carrier, Landlord shall seek to have Overlandlord promptly repair
and restore the Silicones Building; and (ii) if Overlandlord fails or refuses
to perform such work, Landlord shall have the right to cancel and terminate
this Agreement by written notice given to Tenant within sixty (60) days after
such casualty. If Landlord does not duly exercise such termination right,
Landlord and Tenant shall cooperate in good faith to repair and restore such
damage or destruction, including, without limitation, obtaining
Overlandlord's approval for any repair or restoration work, and to the extent
Overlandlord's insurance proceeds are not available. Tenant shall bear any
costs associated with repair and restoration of the Premises.
14.3 In the event that any repair or restoration work undertaken
pursuant to Article 14.1 or 14.2 cannot be completed within ninety (90) days
after the appliable casualty, and provided that (i) the Premises have been
rendered substantially untenantable by such casualty, and (ii) said casualty
has not arisen out of the willful act or negligence Of Tenant, its
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employees, agents or contractors, then Tenant shall have the right to cancel
and terminate this Agreement by written notice given to Landlord within ten
(10) days after the expiration of the aforesaid ninety (90) day period.
14.4 Except as otherwise specifically provided in this Article 14, in
no event shall Landlord have any liability or obligation to Tenant with
respect to the repair or restoration of the Premises or any other property of
Tenant located upon the Premises due to any fire or other occurrence, nor
shall any damage to or destruction of the Premises or the Silicones Building
cause any reduction or abatement of rent or additional rent. In the event
this Agreement is cancelled pursuant to Article 14.2 or 14.3, then Tenant
shall remain obligated promptly to remove or eliminate any nuisance or
dangerous, harmful or unhealthful condition then existing on or about the
Premises due to its use thereof.
ARTICLE 15 - CONDEMNATION
15.1 If due to any condemnation or taking by any public or quasi-public
authority or other party having the right of eminent domain, more than fifty
percent (50%) or more of the usable area of the Silicones Building is taken,
then Landlord (including Overlandlord pursuant to the Prime Lease) or Tenant
may terminate this Agreement by giving written notice to Tenant within
forty-five (45) days after Landlord receives notice of such taking. Rent and
additional rent shall be apportioned to the date title vests in the taking
authority.
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15.2 In the event of any partial taking which does not cause a
termination of this Agreement pursuant to Article 15.1, then the rent and
additional rent shall abate in the same proportion that the area of the
Premises taken bears to the area of the Premises prior to such condemnation.
15.3 Subject to the rights of the holder of any first mortgage then
encumbering the Silicones Building and the cooperation of Overlandlord,
Landlord and Tenant shall be entitled to share any separate condemnation
award for relocation and moving costs in the same proportion which the
respective space taken controlled by each bears to the total rentable area of
the Silicones Building.
ARTICLE 16 - RELATIONSHIP OF PARTIES
16.1 The execution of this Agreement shall not be deemed to create a
partnership, agency or other business relationship between Landlord and
Tenant, other than the tenancy created hereunder, and Tenant shall be solely
and exclusively liable for all claims, damages, losses, liabilities and
obligations arising out of the conduct of its business upon the Premises,
including the payment of all taxes with respect thereto.
ARTICLE 17 - NOTICES
17.1 Any notices or communications required or permitted hereunder
shall be deemed sufficiently given if sent by commercial courier service or
United States Postal Service, certified mail, postage prepaid, return receipt
requested, to
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<PAGE>
the respective parties at the following addresses:
if to Landlord:
Union Carbide Corporation
39 Old Ridgebury Road
Danbury, Connecticut 06817-0001
Attn: Director, Corporate Real Estate
with a copy to:
Union Carbide Corporation
Saw Mill River Road
Tarrytown, New York 10591
Attn: Site Administrator
if to Tenant:
Progenics Pharmaceuticals, Inc.
Saw Mill River Road
Tarrytown, New York 10591
Attn: President
with a copy to:
Richard Ortoli, Esq.
Rubin & Bailin
575 Madison Avenue
New York, New York 10022
Either party may change the persons or addresses to which notice or other
communications are to be sent to it by giving written notice of any such
changes in the manner provided herein for giving notice.
ARTICLE 18 - COVENANT AGAINST LIENS; SUBORDINATION
18.1 Tenant shall not encumber, or suffer or permit to be encumbered,
the Premises, the Silicones Building or the Site by any lien, charge or
encumbrance, and Tenant shall have no authority to mortgage or hypothecate
this Agreement in any way
- 26 -
<PAGE>
whatsoever. The violation of this Article shall be considered a breach of
this Agreement. Within thirty (30) days after notice thereof, Tenant shall
satisfy or otherwise caused to be removed of record any mechanic's,
materialmen's or other lien or encumbrance filed against the Premises arising
out of its occupancy and use thereof.
18.2 This Agreement shall be subject and subordinate to the Prime Lease
and all mortgages, now or hereafter affecting the Silicones Building or the
underlying land (such lease and all of such mortgages being hereinafter
collectively referred to as "Superior Mortgages"). Tenant shall execute and
deliver any instrument confirming such subordination which Landlord or the
holders of any Superior Mortgages reasonable request. Upon any termination of
the Prime Lease, at the request of Overlandlord, Tenant shall attorney to and
recognize Overlandlord as landlord hereunder. Except as otherwise provided in
the immediately preceding sentence, any termination of the Prime Lease shall
cause a simultaneous termination of this Agreement. Except in the event
Landlord exercises its termination rights as provided in Articles 2.2, 14.1
or Article 15.1, Landlord shall not surrender or voluntarily terminate the
Prime Lease and shall duly perform its obligations thereunder other than
those obligations which Tenant is obligated to perform pursuant to this
Agreement.
- 27 -
<PAGE>
ARTICLE 19 - CONDITION OF PREMISES
19.1 Tenant has inspected the Premises and accepts the same "as is,"
without any reliance upon any representation, warranty or guarantee, either
express or implied, by Landlord, its employees or agents as to the condition or
state of repair of the Premises, except as set forth in Article 19.3. For all
purposes hereunder, the Premises shall include any furniture or equipment as
identified in Exhibit B attached hereto.
19.2 Except as otherwise specifically set forth herein, LANDLORD MAKES NO
REPRESENTATIONS, WARRANTIES OR GUARANTEES, EITHER EXPRESS OR IMPLIED, AS TO
THE PREMISES OR ANY PROPERTY OR FIXTURES OF LANDLORD LOCATED THEREON. NO
WARRANTY OR GUARANTEE SHALL BE IMPLIED OR OTHERWISE CREATED UNDER THE UNIFORM
COMMERCIAL CODE (OTHER THAN THE WARRANTY OF TITLE AS PROVIDED UNDER THE
UNIFORM COMMERCIAL CODE) OR OTHERWISE AS TO THE PREMISES OR ANY PROPERTY OR
FIXTURES OF LANDLORD LOCATED UPON THE PREMISES, INCLUDING, WITHOUT
LIMITATION, ANY WARRANTY OR MERCHANTABILITY OR WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE.
19.3 Tenant hereby ratifies and confirms that (i) the Silicones Building
contains asbestos as more particularly disclosed in Exhibit C attached
hereto, (ii) it is willing to accept and assume any risk of exposure to
asbestos by its employees, agents, contractors, customers and invitees while
they are in the Premises and/or the Silicones Building, and
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<PAGE>
(iii) it will release and indemnify and hold harmless Landlord from all
claims, damages, loss and liability, including reasonable attorneys' fee, on
account of any bodily injury, sickness, disease or death arising out of said
exposure. Tenant shall have the right to cancel and terminate this Agreement
within thirty (30) days from the date hereof upon presentation to Landlord of a
certification from a duly qualified consultant that conditions within the
Premises or the Building are not within the permissible exposure limits to
asbestos of the Federal Occupational Health and Safety Administration.
ARTICLE 20 - TENANT'S CERTIFICATE
20.1 Tenant shall, at any time and from time to time, within ten (10)
days after Landlord's written request, execute, acknowledge and deliver to
Landlord a written instrument in recordable form certifying that this
Agreement is in full force and effect, and if modified, stating the
modifications and the dates to which the rent and additional rent and other
charges have been paid in advance, if any, and stating whether or not to the
best knowledge of Tenant, Landlord is in default in the performance of any
covenant, agreement or condition contained in this Agreement and, if so,
specifying each such default of which Tenant may have knowledge. Tenant shall
be entitled to receive a similar certificate from Landlord according to the
provisions of this Article 20.1, MUTATIS MUTANDIS.
- 29 -
<PAGE>
ARTICLE 21 - FORCE MAJEURE
21.1 Except for the obligations of Tenant to pay rent, additional rent and
other charges as in this Agreement provided, the period of time during which
Landlord or Tenant is prevented from performing any act required to be
performed under this Agreement by reason of fire, flood, hurricanes, strikes,
lock-outs or other industrial disturbances, explosions, civil commotion, acts
of God or the public enemy, government prohibitions or preemptions,
embargoes, inability to obtain material or labor, the act of default of the
other party, or other events beyond the reasonable control of Landlord or
Tenant, as the case may be, and which event makes performance hereunder
commercially impracticable, shall be added to the time for performance of
such act.
ARTICLE 22 - QUIET ENJOYMENT
22.1 If and so long as Tenant shall pay the rent and additional rent
reserved hereunder and shall perform and observe all the terms, covenants and
conditions on the part of Tenant to be performed and observed, Landlord
covenants that Tenant shall lawfully and quietly hold, occupy and enjoy the
Premises, subject, however, to the provisions of this Agreement.
ARTICLE 23 - WAIVER
23.1 No consent or waiver, express or implied, by Landlord
- 30 -
<PAGE>
to or of any breach or default in the performance by Tenant of Tenant's
obligations hereunder shall be deemed or construed to be a consent or waiver
of any other breach or default in the performance by Tenant of the same or
any other obligations of Tenant hereunder. Failure on the part of Landlord to
complain of any act or failure to act of Tenant or to declare Tenant in
default, irrespective of how long such act or failure continues, shall not
constitute a waiver by Landlord of its rights hereunder.
ARTICLE 24 - SUBSTITUTED SPACE; EXPANSION RIGHTS
24.1 Landlord reserves the right, upon not less than thirty (30) days'
prior written notice, to substitute for any part of the Premises other office
or laboratory space within the Silicones Building having total rentable area
equivalent to the total rentable area of that part of Premises so replaced
and Landlord and Tenant shall promptly execute a suitable amendment to this
Agreement modifying the Premises to reflect such substitution for all
purposes hereunder. In no event shall any such substitution affect less than
2,000 rentable square feet of space or occur more than twice during the term
of this Agreement, including any extension terms. Landlord shall bear any
moving expenses, including without limitation telecommunications cost,
associated with such substitution of space.
- 31 -
<PAGE>
24.2 Upon not less than sixty (60) days' prior written notice from Tenant
to Landlord, given from time to time during the term hereof, including any
extension periods, advising Landlord of the type and quantity of space
required, Landlord shall designate, subject to availability, up to a
cumulative total of 5,000 rentable square feet in the Silicones Building for
future use by Tenant. By written notice to Landlord given within thirty (30)
days after receipt of notice of such designation, and subject to the prompt
execution of a suitable amendment to this Agreement, Tenant may sublease such
designated space at the then effective rental rate hereunder and subject to
all other terms, covenants, conditions and provisions of this Agreement.
ARTICLE 25 - BROKERAGE FEES
25.1 Landlord and Tenant acknowledge that no real estate broker or agent
or other party is entitled to any brokerage fee, commission or other
compensation on account of this Agreement or any transaction contemplated
hereunder. Tenant shall indemnify and hold harmless Landlord from all claims,
damages, loss or liability of Landlord for any brokerage fee, commission or
other compensation owing to any party claiming to represent Tenant hereunder.
Landlord shall indemnify and hold harmless Tenant from all claims, damages,
loss or liability of Tenant for any brokerage fee, commission or other
compensation owing to any party claiming to represent Landlord hereunder.
- 32 -
<PAGE>
ARTICLE 26 - CAPTIONS
26.1 The captions of the Articles of this Agreement are for the
convenience of reference only and shall not affect the meaning or
interpretation of this Agreement.
ARTICLE 27 - GOVERNING LAW
27.1 The validity, interpretation and performance of this Agreement shall
be governed according to the laws of the State of New York applicable to
agreements made and to be performed entirely in that state, without reference
to any conflict of laws rules or principles.
ARTICLE 28 - CONSENT OF OVERLANDLORD
28.1 This Agreement shall not become effective unless and until Overland
consents hereto and Landlord shall use reasonable, diligent efforts to obtain
Overlandlord's consent; provided, however, that any such consent shall be
deemed retroactive to the date hereof and that as between Landlord and Tenant
this Agreement shall govern their respective rights and obligations for any
period during which Tenant remains in possession of the Premises.
ARTICLE 29 - SERVICES
29.1. Landlord, at its expense, shall furnish janitorial services
commensurate with normal office use. Tenant shall reimburse Landlord,
promptly upon demand, for any additional expense for janitorial services
incurred by Landlord as a
- 33 -
<PAGE>
result of any neglect or unusual use of the Premises by Tenant.
29.2. Landlord shall provide to Tenant and its employees, as applicable,
those services as set forth in Exhibit D attached hereto (hereinafter called
the "Miscellaneous Services"). Within ten (10) days after the presentation of
an invoice therefor, Tenant shall reimburse Landlord for the Miscellaneous
Services based upon the rates and charges set forth in Exhibit D. Landlord
shall have no liability to Tenant or its employees with respect to the
Miscellaneous Services furnished pursuant hereto and Tenant shall indemnify
and hold harmless Landlord from any claims or damages of Tenant's employees
arising out of their use of any of the Miscellaneous Services. Landlord
reserves the right to cancel or terminate any of the Miscellaneous Services
at any time upon thirty (30) days' prior written notice and in such event
Landlord shall not be liable to Tenant for any claims of default, partial or
constructive eviction or otherwise.
29.3. Landlord shall make available to Tenant UNICOM telephone services in
the Premises and Tenant shall reimburse Landlord within ten (10) days after
presentation of an invoice therefor (including suitable documentation) for
the cost of such services based upon the designated rental charges per
instrument, actual unit charges for local, toll and other calls and
applicable taxes.
- 34 -
<PAGE>
29.4. Landlord shall not be liable to Tenant for interruption or
curtailment of any services to be furnished by Landlord under this Agreement,
resulting partly or wholly from any cause beyond Landlord's reasonable
control or by reason of repairs to or changes in the Silicones Building which
Landlord is required to make or deems necessary.
ARTICLE 30 - ENTIRE AGREEMENT
30.1 This Agreement contains all the promises, agreements, conditions
and understandings between Landlord and Tenant with respect to the subleasing
of the Premises and there are no promises, agreements, conditions or
understandings, either written or oral, between them concerning the
subleasing of the Premises other than as set forth herein. No amendment,
modification or addition to this Agreement shall be effective unless it is
contained in a written agreement executed by authorized representatives of
both parties.
30.2 The covenants, conditions and agreements contained in this Agreement
shall bind and inure to the benefit of the
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<PAGE>
parties hereto and their respective successors and permitted assigns.
IN WITNESS WHEREOF, the parties have caused this Lease Agreement to be
executed by their duly authorized representatives as of the day and year
first above written.
UNION CARBIDE CORPORATION
By /s/ J.N. Barton
--------------------------------
Title DIRECTOR GENERAL SERVICES
-----------------------------
PROGENICS PHARMACEUTICALS, INC.
By /s/ Gerard M. Housey
--------------------------------
Title PRESIDENT
-----------------------------
- 36 -
<PAGE>
EXHIBIT A-1
The Premises shall consist of those offices and laboratories located upon
the third floor in the Silicones Building as shown by striations on the diagram
attached hereto.
<PAGE>
[FLOORPLAN]
Silicones Building
Third Floor
<PAGE>
EXHIBIT A-2
[MAP]
<PAGE>
EXHIBIT B
Furniture and Equipment
Three (3) desks
Three (3) desk chairs
Three (3) credenzas
Three (3) file cabinets
Six (6) arm chairs
<PAGE>
EXHIBIT C
Asbestos Disclosure
Silicones Building:
Steam and hot water pipes are asbestos covered and
pipes are encapsulated. All structural steel in the building
is sprayed with asbestos insulation and not encapsulated, with
some overspraying on concrete surface. In addition, in the
Silicones Building many of the offices have a dropped ceiling
consisting of one foot squares using styletone BHAF ceiling
tiles. These ceiling tiles are solid but may have asbestos.
<PAGE>
EXHIBIT D
Miscellaneous Services
Service Charges
- ------------------------------- -------
Cafeteria (Breakfast and Lunch) Published rates based on usage.
Porter and Maintenance Published rates based on usage.
Conference Dining Published rates based on usage.
Lobby Receptionist None.
Site Technical Library None.
(visiting privileges only)
<PAGE>
Amendment of Sublease
THIS AMENDMENT OF LEASE dated November 17, 1988,
between UNION CARBIDE CORPORATION, a New York corporation
having an office at 39 Old Ridgebury Road, Danbury, Connecticut
06817-0001 (the "Landlord"), and PROGENICS PHARMACEUTICALS,
INC., a New York corporation having an office at
Old Saw Mill River Rd. P.O. Box #549 Tarrytown, NY 10591
(the "Tenant").
RECITALS
1. Reference is made to that certain Tarrytown Sublease
Agreement, dated as of July 13, 1988, between Landlord and
Tenant (the "Sublease") (capitalized terms not otherwise
defined herein have the meanings ascribed to them in the
Sublease).
2. Landlord and Tenant wish to amend the Sublease to
lease additional space to Tenant for additional consideration
all as provided in this Agreement.
AGREEMENT
In consideration of the rent reserved hereunder and the
mutual covenants and undertakings provided for herein Landlord
and Tenant hereby agree as follows:
1. ADDITIONAL LEASED SPACE. The Premises are hereby
amended to comprise that space which is particularly identified
on Exhibit A hereto.
2. INCREASE IN RENT. The monthly rent payable by Tenant
pursuant to Section 3.1 of the Sublease is hereby increased to
Ten Thousand One Hundred Sixty-Five Dollars ($10,165.00).
<PAGE>
-2-
3. EFFECTIVE DATE OF THIS AGREEMENT. This Agreement shall
become effective as of 12.01 a.m. on December 1, 1988, subject,
however, to the granting by Overlandlord of its consent to this
Agreement.
4. RATIFICATION. As amended hereby, Landlord and Tenant
hereby ratify and confirm all of the terms and provisions of
the Sublease.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed
this Agreement as of the day and year first above written.
UNION CARBIDE CORPORATION
By: /s/ J.N. BARTON
-------------------------------
Name: J.N. Barton
---------------------------
Title: Director, General Services
---------------------------
PROGENICS PHARMACEUTICALS, INC.
By: /s/ Gerard M. Housey
-------------------------------
Name: Gerard M. Housey
---------------------------
Title: President
---------------------------
<PAGE>
EXHIBIT A
The Premises shall consist of those offices, laboratories
and closet located on the third floor in the Silicones Building
as shown by striations on the floor plan attached hereto and
made a part hereof.
<PAGE>
[Chart]
<PAGE>
CONSENT
Keren Limited Partnership, as landlord under that certain
Lease, dated December 31, 1985 (as modified by amendments dated
February 28, 1986, August 1, 1986 and March 21, 1988), between
Keren Limited Partnership, as landlord, and Union Carbide
Corporation, as tenant, hereby consents to all of the terms and
provisions of that certain Amendment of Sublease,
dated November 17, 1988, between Union Carbide Corporation,
as landlord, and Progenics Pharmaceuticals, Inc., as tenant.
KEREN LIMITED PARTNERSHIP
By: /s/ R.F. Dwyer
---------------------------
Name: R.F. Dwyer
------------------------
Title: Executive Vice President
------------------------
<PAGE>
AMENDMENT OF SUBLEASE
THIS AMENDMENT OF LEASE dated June 1, 1989, between UNION
CARBIDE CORPORATION, a New York corporation having an office at
39 Old Ridgebury Road, Danbury, Connecticut 06817-0001 (the
"Landlord"), and PROGENICS PHARMACEUTICALS, INC., a New York
corporation having an office at Old Saw Mill River Road,
P.O. Box 549, Tarrytown, New York 10591 (the "Tenant").
RECITALS
1. Reference is made to that certain Tarrytown Sublease
Agreement, dated as of July 13, 1988 (as modified by Amendment
dated November 17, 1988) between Landlord and Tenant (the
"Sublease") (capitalized terms not otherwise defined herein
have the meanings ascribed to them in the Sublease).
2. Landlord and Tenant wish to amend the Sublease to lease
additional space to Tenant for additional consideration all as
provided in this Agreement.
<PAGE>
AGREEMENT
In consideration of the rent reserved hereunder and the mutual
covenants and undertakings provided for herein, Landlord and Tenant
hereby agree as follows:
1. ADDITIONAL LEASED SPACE. The Premises are hereby amended to
comprise that space which is particularly identified on
Exhibit A hereto (4,334 square feet).
2. INCREASE IN RENT. The monthly rent payable by Tenant pursuant
to Section 3.1 of the Sublease is hereby increased to
Ten Thousand Eight Hundred Thirty Five Dollars ($10,835)
monthly.
3. EFFECTIVE DATE OF THIS AGREEMENT. This Agreement shall become
effective as of 12:01 a.m. on June 1, 1989, subject, however,
to the granting by Overlandlord of its consent to this
Agreement.
4. RATIFICATION. As amended hereby, Landlord and Tenant hereby
ratify and confirm all of the terms and provisions of the
Sublease.
-2-
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have duly executed
this Agreement as of the day and year first above written.
UNION CARBIDE CORPORATION
By: /s/ RONALD E. BAUMANN
-------------------------------
Name: Ronald E. Baumann
Title: Director, Corporate Real Estate
PROGENICS PHARMACEUTICALS, INC.
By: /s/ Gerard M. Housey
--------------------------------
Name: Gerard M. Housey
Title: President
-3-
<PAGE>
EXHIBIT A
The Premises shall consist of those offices, laboratories, and
closet located on the third floor in the Silicones Building as
shown by striations on the floor plan attached hereto and made a
part hereof.
-4-
<PAGE>
AMENDMENT OF SUBLEASE
UNION CARBIDE CORPORATION (Landlord)
PROGENICS PHARMACEUTICALS, INC. (Tenant)
[Chart]
-5-
<PAGE>
CONSENT
Keren Limited Partnership, as landlord under that certain
Lease dated December 31, 1985 (as modified by Amendments dated
February 28, 1986; August 1, 1986; March 21, 1988; and August 1,
1988) between Keren Limited Partnership, as landlord, and Union
Carbide Corporation, as tenant, hereby consents to all of the
terms and provisions of that certain Amendment of Sublease, dated
June 1, 1989, between Union Carbide Corporation, as landlord, and
Progenics Pharmaceuticals, Inc., as tenant.
KEREN LIMITED PARTNERSHIP
By:
-----------------------------
Name: J. P. Brierley
Title: Executive Vice President
-6-
<PAGE>
THIRD AMENDMENT OF SUBLEASE
THIS AMENDMENT OF SUBLEASE dated December 1, 1989, between
UNION CARBIDE CHEMICALS AND PLASTICS COMPANY INC. (formerly Union
Carbide Corporation), a New York corporation having an office at 39
Old Ridgebury Road, Danbury, Connecticut 06817-0001 (the
"Landlord"), and PROGENICS PHARMACEUTICALS, INC., a New York
corporation having an office at Old Saw Mill River Road, P.O. Box
549, Tarrytown, New York 10591 (the "Tenant").
RECITALS
1. Reference is made to that certain Tarrytown Sublease Agreement,
dated as of July 13, 1988, as modified by Amendment dated
November 17, 1988 and June 1, 1989, between Landlord and Tenant
(the "Sublease") (capitalized terms not otherwise defined herein
have the meanings ascribed to them in the Sublease).
2. Landlord and Tenant wish to amend the Sublease to lease
additional space to Tenant for additional consideration all as
provided in this Amendment.
<PAGE>
AGREEMENT
In consideration of the rent reserved hereunder and the
mutual covenants and undertakings provided for herein, Landlord and
Tenant hereby amend the Sublease as follows:
1. ADDITIONAL LEASED SPACE. The Premises are hereby amended to
include Laboratories #312 and #331, containing 1,720 square
feet, in the Silicones Building as more particularly shown on
Exhibit A attached hereto. Tenant shall use such space for
storage purposes only.
2. EFFECTIVE DATE OF THIS AGREEMENT. This Agreement shall
become effective as of 12:01 a.m. on December 15, 1989,
subject, however, to the granting by Overlandlord of its
consent to this Amendment. Notwithstanding the lack of
required consent, for any period during which Tenant remains
in possession of the Premises, this Amendment shall be an
effective agreement between Landlord and Tenant.
3. PARTIAL TERMINATION. Either party shall have the right to
terminate the Sublease with respect to Laboratories #312 and
<PAGE>
#331 upon not less than forty-five (45) days' prior written
notice to the other party. Upon the expiration of said
notice period (the "Termination Date"), Tenant shall have no
further rights with respect to Laboratories #312 and #331 and
Landlord shall have the right to enter such laboratories, to
take possession thereof, to remove Tenant's property
therefrom and to dispose of such property at Tenant's
expense, which shall be payable as additional rent under the
Sublease.
4. SURRENDER. Prior to the Termination Date, Tenant shall
vacate and surrender Laboratories #312 and #331 pursuant to
the provision of Article 8 of the Sublease as though the
Sublease had terminated and perform any necessary
decontamination work pursuant to Section 8.4.
5. RATIFICATION. As amended hereby, Landlord and Tenant hereby
ratify and confirm all of the terms and provisions of the
Sublease.
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have duly executed
this Amendment as of the day and year first above written.
UNION CARBIDE CHEMICALS AND
PLASTICS COMPANY INC.
BY: /s/ RONALD E. BAUMANN
-------------------------------
NAME: Ronald E. Baumann
TITLE: Director, Corporate Real Estate
PROGENICS PHARMACEUTICALS, INC.
BY: /s/ TERENCE C. BURNHAM
--------------------------------
NAME: Terence C. Burnham
TITLE: Executive Vice President
<PAGE>
"EXHIBIT A"
THIRD
AMENDMENT OF SUBLEASE
UNION CARBIDE CORPORATION (Landlord)
PROGENICS PHARMACEUTICALS, INC. (Tenant)
December 1, 1989
[Chart]
<PAGE>
FOURTH AMENDMENT OF SUBLEASE
THIS AMENDMENT, made as of November 20, 1991, between UNION
CARBIDE CHEMICALS AND PLASTICS COMPANY INC. (formerly Union
Carbide Corporation), a New York corporation having an office
at 39 Old Ridgebury Road, Danbury, Connecticut 06817-0001
("Landlord"), and PROGENICS PHARMACEUTICALS, INC., a New York
corporation having an office at Old Saw Mill River Road, P.O.
Box 549, Tarrytown, New York 10591 ("Tenant").
RECITALS
1. Reference is made to that certain Tarrytown Sublease
Agreement dated as of July 13, 1988, as modified by Amendment
of Sublease dated November 17, 1988, Second Amendment of
Sublease dated June 1, 1989 and Third Amendment of Sublease
dated December 1, 1989 (said sublease, as amended, being called
the "Sublease") between Landlord and Tenant.
2. Tenant has vacated and surrendered the laboratory
space added to the Sublease under the Third Amendment.
3. Landlord and Tenant wish to amend the Sublease to
lease additional space to Tenant for additional consideration,
all as provided in this Amendment.
AGREEMENT
In consideration of the rent reserved hereunder and the
mutual covenants and undertakings provided for herein,
effective January 1, 1992, Landlord and Tenant hereby amend the
Sublease as follows:
<PAGE>
1. ADDITIONAL LEASED SPACE. The Premises shall be
enlarged to include the following space (approximately 5,759
rentable square feet), which space shall increase the area of
the Premises to 10,093 total rentable square feet, and which
space shall be used only for the purposes set forth below and
in accordance with the further restrictions of Article 4 of the
Lease:
(i) Laboratories 311, 312, 331 and 333 on the Third
Floor of the Silicones Building as shown on
Exhibit A attached hereto, which shall be used
for laboratory purposes.
(ii) Office 320 on the Third Floor and Office 244,
246, 247, 251 and 255 on the Second Floor of the
Silicones Building as shown on Exhibit A attached
hereto, which shall be used for office purposes
only.
It is understood and agreed that the additional lab and office
space on the said Third Floor will be made available to Tenant
effective January 1, 1992, and that the additional office space
on the said Second Floor will be made available to Tenant
effective April 1, 1992.
2. INCREASE IN RENT. The rent payable pursuant to
Article 3.1 of the Lease shall be increased effective April 1,
1992 by $16,917.06 so that as of said date $29,648.19 shall be
payable as rent as of the first day of each month during the
term hereof.
3. OPTION TO EXTEND. Landlord hereby grants to Tenant
the option to extend the term of the Lease for the Premises (as
modified by this Fourth Amendment of Lease) for the period from
- 2 -
<PAGE>
August 1, 1994 through December 30, 1997 upon the same terms
and conditions as set forth in the Lease, as modified hereby,
provided that (i) Tenant is not in default beyond the
applicable cure period at the time it exercises said option,
and (ii) Tenant exercises said option by written notice given
to Landlord on or before April 1, 1994.
4. SUBSTITUTED SPACE; EXPANSION RIGHTS. Articles 24.1 and
24.2 are hereby deleted from the Lease.
5. RELEASE. To the extent it may validly be able to do
so, and without recourse against Landlord, Landlord hereby
assigns to Tenant the benefit of Overlandlord's release as set
forth in Paragraph 8(d) of the Prime Lease, subject, however,
to the provisions thereof.
6. LEASEHOLD IMPROVEMENTS. Tenant, at its sole cost and
expense, shall have the right to make non-structural
improvements and alterations to the Premises pursuant to
Article 6 of the Sublease.
7. EFFECTIVENESS OF THIS AGREEMENT. This Amendment shall
become effective as of 12:01 a.m. on January 1, 1992, subject,
however, to Overlandlord's consent to this Amendment.
Notwithstanding the lack of required consent, for any period
during which Tenant remains in possession of the space added to
the Premises under this Amendment, this Amendment shall be an
effective agreement between Landlord and Tenant.
- 3 -
<PAGE>
8. RATIFICATION. As amended hereby, Landlord and Tenant
hereby ratify and confirm all of the terms and provisions of
the Sublease.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed
this Amendment as of the day and year first above written.
UNION CARBIDE CHEMICALS AND
PLASTICS COMPANY INC.
By /s/ R.E. BAUMANN
---------------------------------
R.E. Baumann, Director,
Corporate Real Estate
PROGENICS PHARMACEUTICALS, INC.
By /s/ TERENCE BURNHAM
---------------------------------
Title President
1/25/91
- 4 -
<PAGE>
EXHIBIT A
[Chart]
<PAGE>
EXHIBIT A
[Chart]
<PAGE>
CONSENT
Keren Limited Partnership, as landlord under that certain
Lease, dated December 31, 1985, as amended, between Keren
Limited Partnership, as landlord, and Union Carbide Corporation
(now Union Carbide Chemicals and Plastics Company Inc.), as
tenant, hereby consents to all of the terms and provisions of
that certain Fourth Amendment of Sublease, dated November 20,
1991, between Union Carbide Chemicals and Plastics Company
Inc., as landlord, and Progenics Pharmaceuticals, Inc., as
tenant.
KEREN LIMITED PARTNERSHIP
By: NAME ILLEGIBLE
------------------------------
Name:
Title: Executive Vice President
<PAGE>
FIFTH AMENDMENT OF SUBLEASE
THIS AMENDMENT, made as of June 9, 1994, between UNION
CARBIDE CHEMICALS AND PLASTICS COMPANY INC. (formerly Union Carbide
Corporation), a New York corporation having an office at 39 Old Ridgebury Road,
Danbury, Connecticut 06817 (hereinafter called "Landlord"), and PROGENICS
PHARMACEUTICALS, INC., a New York corporation having an office at Old Saw Mill
River Road, P.O. Box 549, Tarrytown, New York 10591 (hereinafter called
"Tenant").
WITNESSETH;
WHEREAS, Landlord and Tenant have executed a Tarrytown Sublease
Agreement dated July 13, 1988, as amended by Amendment of Sublease dated
November 17, 1988, Second Amendment of Sublease dated June 1, 1989, Third
Amendment of Sublease dated December 1, 1989, and Fourth Amendment of Sublease
dated November 20, 1991 (said sublease, as amended, being hereinafter
collectively called the "Sublease"); and
WHEREAS, Tenant wishes to amend certain terms of the Sublease, and Landlord
is agreeable thereto.
NOW, THEREFORE, in consideration of the mutual covenants and obligations
contained herein, Landlord and Tenant hereby amend and revise the Sublease as
follows:
1. PREMISES
Effective July 1, 1994 (the "Revision Date"), the Premises shall be revised
and enlarged to a total of 22,925 rentable square feet, which Premises shall
be defined to be only those areas in the Silicones Building described
below, and which Premises shall be used only for the purposes set forth
below and in accordance with the further restrictions of Article 4 of the
Sublease:
(a) 3rd floor North lab wing, comprised of 9,135 rentable square feet as
outlined on Exhibit A attached hereto and made a part hereof, which
shall be used for laboratory purposes.
(b) 4th floor North lab wing, comprised of 9,135 rentable square feet as
outlined on Exhibit A attached hereto and made a part hereof, which
shall be used for laboratory purposes.
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(c) 4th floor office wing, comprised of 4,655 rentable square feet as
outlined on Exhibit A attached hereto and made a part hereof, which
shall be used for office purposes.
Effective as of the Revision Date, Tenant shall surrender to Landlord the
2nd floor office space currently occupied by Tenant in accordance with the
terms of the Sublease, including but not limited to Article 8, as though the
Sublease had terminated with respect to such space.
In the event that the Leasehold Improvements planned for the 4th floor
office wing as described in paragraph 5 hereof have not been completed
by July 1, 1994, the Revision Date and Tenant's obligation to pay Rent for
such office space shall be postponed until the date that the 4th floor
office wing has been so prepared for Tenant's occupancy.
2. TERM
The Term of the Sublease shall be extended for an additional term of three
(3) years and five (5) months, and shall now expire on December 30, 1997.
3. RENT
Effective as of June 30, 1994, Article 3.1 of the Lease shall be deleted in
its entirety and the following paragraph shall be inserted in its stead:
"3.1 Tenant shall pay to Landlord without notice or
demand, in advance on the first day of each calendar
month during the term hereof, without any setoff,
counterclaim or deduction for any reason whatsoever,
rent in accordance with the schedule as set forth in
Exhibit B attached to and made a part of the Fifth
Amendment of Sublease."
4. RENT ESCALATION
Effective as of June 30, 1994, Article 3.2 of the Lease shall be deemed null
and void, and after such date Tenant shall have no liability or obligation to
pay increases in Rent arising out of said Article, except for any such
increases in Rent arising prior to June 30, 1994.
5. LEASEHOLD IMPROVEMENTS
Landlord shall, at its expense, install leasehold improvements in the 4th
floor office space as outlined on Exhibit A, including but not limited to new
carpet and painting of all walls. Additionally, Landlord shall, at its
expense, (i) paint the painted surfaces on the 4th floor North lab wing
before Tenant's occupancy; (ii) paint the painted surfaces in the 3rd floor
North lab wing as and when Tenant makes each room available and free of
equipment and furniture to permit such painting; and (iii) provide the
existing lab benches and hooded vents in the 4th floor North lab wing in
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good working order. Lastly, Landlord shall pay the reasonable expenses
for the moving of Tenant's office furniture, equipment, data lines and
telephone system from the 2nd floor of the building to the 4th floor office
wing.
6. OPTION TO CANCEL FIFTH AMENDMENT
In the event that Tenant has not, within ten (10) days after the date of this
Fifth Amendment, executed with Keren Limited Partnership a suitable
Option to Lease Agreement for Tenant's leasing of space at the Landmark
at Eastview complex after January 1, 1998, then Tenant may cancel this
Fifth Amendment by giving written notice of such cancellation to Landlord
no later than fifteen (15) days after the date of this Fifth Amendment. The
failure by Tenant to timely notify Landlord of Tenant's election to cancel
the Fifth Amendment under the terms of this paragraph 6 shall result in
Tenant's waiver of this option to cancel this Fifth Amendment.
In the event that Tenant duly cancels this Fifth Amendment pursuant to the
terms of this paragraph 6, then in such event (i) the Sublease shall
continue in full force and effect in accordance with its current terms and
conditions, and (ii) Tenant shall have the right to exercise the Option to
Extend as provided for under paragraph 3 of the aforementioned Fourth
Amendment of Sublease, provided Tenant so notifies Landlord in writing
no later than twenty-five (25) days after the date of this Fifth Amendment.
7. DELETED ARTICLES
Paragraph 3 (Option to Extend) of the aforementioned Fourth Amendment
of Sublease, and paragraph 3 and 4 of the aforementioned Third
Amendment of Sublease, shall be deleted in their entirety effective as of the
date of this Fifth Amendment.
8. RIGHT OF FIRST REFUSAL
Tenant shall have, during the Term of the Sublease and in accordance with
the terms of this paragraph 8, the right of first refusal to sublease
additional office or laboratory space (the "Additional Space") in the
Silicones Building when and as any such space becomes available. Tenant's
right to sublease Additional Space shall be subject to rights to sublease
Additional Space granted to OSi Specialties, Inc. prior to the date of
this Fifth Amendment.
In the event Landlord receives an offer to sublease available space in the
Silicones Building from a third party tenant, Landlord shall give Tenant
written notice thereof and Tenant shall respond to Landlord in writing within
ten (10) days from the receipt of Landlord's notice if Tenant wishes to
sublease the subject available space. The failure by Tenant to timely notify
Landlord of Tenant's election to so sublease Additional Space shall result
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in Tenant's waiver of its right to sublease that particular unit of
available space.
In the event Tenant so elects to sublease Additional Space under the terms
of this paragraph 8, then in such event: (i) Tenant shall designate the
commencement date for the subleasing of the Additional Space, which
date shall not be later than sixty (60) days after the date of Tenant's
notice hereunder, (ii) said Additional Space shall be subleased by Tenant in
its "as-is" condition, (iii) said Additional Space shall be added to the
Premises for the remaining term of the Sublease and shall be subleased by
Tenant in accordance with the terms and conditions of the Sublease, with
Rent for the enlarged Premises being proportionately increased based upon
the square footage of the Additional Space using the Rent Rates listed on
Exhibit B for the respective Periods of the Sublease term, and (iv) Tenant
shall pay the reasonable costs for any refurbishments required for the
Additional Space, and the costs of demising the Additional Space should
such separation from other space be necessary.
9. BROKERS
Landlord and Tenant each represent and warrant that there were no real
estate brokers or agents involved in this transaction. Tenant shall
indemnify and hold harmless Landlord against any and all claims for real
estate commissions or finder's fees from any real estate brokers, including
but not limited to CB Commercial Real Estate Group, Inc., claiming to be
involved with this transaction through the acts of Tenant.
10. OVERTIME AIR CONDITIONING
With reference to Article 7.1 of Tenant's Tarrytown Sublease Agreement
dated July 13, 1988, Landlord shall cause Overlandlord to provide, free of
additional charge, heat, ventilation and air conditioning ("HVAC") to the
3rd and 4th floor lab space included in the Premises at the frequency of
approximately twelve (12) air changes per hour from 7:00 a.m. to
8:00 p.m., Monday through Friday, except Site holidays (hereinafter called
"Business Hours"), and at the frequency of approximately six (6) air
changes per hour at all other times (hereinafter called "After-Hours"). In
the event Tenant should request increased HVAC service to part or all of its
lab space during After-Hours at a frequency of approximately twelve (12) air
changes per hour, Tenant shall pay Landlord on a monthly basis the
additional costs for such increased HVAC service to the affected lab
space. Currently, the additional cost for such increased HVAC service is
$0.00069/usable square foot/hour as indicated by the calculations
outlined on Exhibit C attached hereto and made a part hereof. Landlord
and Tenant acknowledge that this cost factor will vary from time to time
dependent upon utility costs.
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11. ENTIRE AGREEMENT
Except as modified herein, all other terms and conditions of the Sublease
shall remain in full force and effect. This Fifth Amendment shall be subject
to the consent of Overlandlord. Notwithstanding the lack of required
consent, for any period during which Tenant remains in possession of the
Premises as revised under this Amendment, this Amendment shall be an
effective agreement between Landlord and Tenant.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the date first above written.
UNION CARBIDE CHEMICALS AND
PLASTICS COMPANY INC.
By /s/ J.N. BARTON
-------------------------------
J.N. Barton
Director, General Services
PROGENICS PHARMACEUTICALS, INC.
By /s/ ROBERT A. MCKINNEY
-------------------------------
Title Vice President
---------------------------
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EXHIBIT B
RENT SCHEDULE
Period Rent Rate Monthly Rent
------ --------- ------------
7/1/94 - 7/31/94 Not Applicable $40,640/month
8/1/94 - 6/30/95 $26.00/sq. ft./yr. $49,671/month
7/1/95 - 6/30/96 $27.50/sq. ft./yr. $52,537/month
7/1/96- 6/30/97 $28.50/sq. ft./yr. $54,447/month
7/1/97-12/30/97 $30.00/sq. ft./yr $57,313/month
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EXHIBIT A
PAGE 1 OF 3
[Chart]
<PAGE>
EXHIBIT A
PAGE 2 OF 3
[Chart]
<PAGE>
EXHIBIT A
PAGE 3 OF 3
[Chart]
<PAGE>
EXHIBIT C
ANNUAL HVAC COST FOR LABORATORY IN SILICONES BUILDING:
$490,092.00 TOTAL SQ FT 58,600 SQ FT
COST PER HOUR LABOR ONLY:
DAYTIME - 12 CHANGES 5 DAYS 52 WEEKS 13 HOURS = 3,380 HRS
NITETIME - 6 CHANGES 5 DAYS 52 WEEKS 11 HOURS + SATURDAY
AND SUNDAY = 5,356 HRS
$490,092.00 / (3,380 HRS X 2 *) + 5,356 HRS = $40.45/HR
DAYTIME - $40.45 X 2 * = $80.90 PER HR
NITETIME - $40.45/HR
COST PER SQUARE FOOT
DAYTIME - $80.90 / 58,600 SQ FT = $.00138 SQ FT./HR
NITETIME - $40.45 / 58,600 SQ FT = $.00069 SQ FT./HR
OCTANT COST PER HOUR
5,825 SQ FT X $.00069 = S4.02 PER HOUR NITETIME
5,825 SQ FT X $.00138 = $8.03 PER HOUR DAYTIME
* DAYTIME IS DOUBLE NITETIME FACTOR
OCTANT WITH NIGHT CUTBACK
DAYTIME - 3,380 HOURS X $8.03 = $27,141.40
NITETIME 5,356 HOURS X $4.02 = $21,531.12
----------
HVAC COST = $48,672.52 PER YEAR
OCTANT WITHOUT NIGHT CUTBACK
DAYTIME - 3,380 HOURS X $8.03 = $27,141.40
NITETIME - 5,356 HOURS X $8.03 = $43,008.68
----------
$70,150.08 PER YEAR
$70,150.08
$48,672.52
----------
ANNUAL DIFF. = $21,477,56
Rev1 8/7/94
<PAGE>
ACCEPTANCE OF PREMISES
SUBLESSEE: PROGENICS PHARMACEUTICALS, INC.
SUBLESSOR: UNION CARBIDE CORPORATION
SUBLEASE
AMENDMENT DATE: June 9, 1994
PREMISES: Approximately 22,925 square feet of office and
laboratory space located on the 3rd and 4th
floors of the Silicones Building, situated at
the Landmark at Eastview complex in Greenburgh
and Mount Pleasant, New York.
The above described Premises is hereby accepted by Sublessee under the terms
of the Sublease Agreement, as amended, for occupancy and commencement
effective July 1, 1994.
PROGENICS PHARMACEUTICALS, INC.
By: /s/ ROBERT A. MCKINNEY
---------------------------
Title: Vice President
-----------------------
Date: August 16, 1994
------------------------
<PAGE>
Exhibit 10.10
gp120 SUPPLY AGREEMENT
This Agreement, dated as of the 19th day of July, 1995, is between
E. I. DU PONT DE NEMOURS AND COMPANY, a Delaware corporation with
a place of business at 549 Albany St., Boston, MA 02118
("DUPONT"), and PROGENICS PHARMACEUTICALS, INC., a Delaware
corporation with its principal place of business at Old Saw Mill
River Road, Tarrytown, New York 10591 ("PROGENICS").
1. PURPOSE AND SCOPE OF THIS AGREEMENT
A. During the term hereof, PROGENICS will manufacture and sell to DUPONT,
and DUPONT shall purchase from PROGENICS, all of DUPONT's requirements for
resale of recombinant HIV-1LAI gp120 (full length) produced in a CHO
expression system (the "Product") for DUPONT's marketing, distribution and
resale throughout the world. DUPONT will limit sales to customers who intend
to use the Product only for research purposes and not for other purposes such
as clinical diagnostics or vaccine development.
B. DUPONT will resell the Product as packaged by PROGENICS, and DUPONT
will not modify the Product or combine it with other components prior to
resale.
C. PROGENICS has developed Product specifications for the Product which
are attached as Exhibit A. All PROGENICS manufacturing of Product will comply
with the Product processing standards and specifications. PROGENICS may
revise the processing standards and specifications as it deems necessary and
will advise DUPONT as far in advance of any changes as is reasonably
possible. If any change affects customer use or perceived performance of the
Product, PROGENICS will give DUPONT at least 90 days advance notice of such
change.
D. PROGENICS will package the Product under specifications established
by DUPONT with PROGENICS' consent. Both DUPONT's and PROGENICS' names shall
appear on the Product label and promotional material, with the statement
"Manufactured by Progenics Pharmaceuticals, Inc. for E. I. du Pont de
Nemours and Company." All Product labeling and literature shall contain the
phrase "For laboratory use only--not for vaccine or diagnostic use." Any
labeling changes will require the prior approval of DUPONT.
<PAGE>
2. IMPROVED PRODUCTS
A. If during the term hereof PROGENICS develops an improved Product and
the commercialization of the improved Product reaches the market evaluation
stage, PROGENICS will give DUPONT written notice of its plans to
commercialize the improved Product and offer to make available, at DUPONT's
cost, sample of the improved Product for DUPONT's evaluation, but as testing
materials only and not under circumstances that would commit PROGENICS or
DUPONT to supply the improved Product or give customers an expectation that
the improved Product will be commercialized. DUPONT may elect to add the
improved Product to this Agreement at any time, subject to provisions of
Paragraph 2-B below. The parties intend that DUPONT will have advance notice
of the introduction of improved Product to enable DUPONT to sell remaining
inventory of Product that may be replaced by the improved Product.
B. PROGENICS may discontinue a Product that has, in PROGENICS' sole
opinion, been replaced by an improved Product. If PROGENICS decides to
discontinue a Product, PROGENICS will give DUPONT notice at least 90 days in
advance of the discontinuance.
3. PRICE AND FORECASTING
A. DUPONT will pay PROGENICS for Product as follows:
1. RAW MATERIALS COST DUPONT will pay PROGENICS for the
Product raw material cost at
[***]
3. LARGE VOLUME PURCHASERS DUPONT may negotiate special pricing
with large volume purchasers, in which event the parties shall
negotiate in good faith a discounted raw materials cost. In no
event shall the PROGENICS price to DUPONT be less than $500 per
milligram.
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[***] Confidential Treatment Requested
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All prices are F.O.B. PROGENICS' plant. PROGENICS assumes all risks and costs
of freight, insurance and similar shipping costs.
B. The raw material prices stated in Paragraph 3-A may be revised by
PROGENICS from time to time during the term hereof on at least 90 days'
advance written notice to DUPONT.
C. On execution of this Agreement and then on a semi-annual basis
during the term of this Agreement, DUPONT will provide to PROGENICS a written
non-binding forecast by month for purchases of Product by DUPONT during each
month of the succeeding twelve months.
4. ORDERS FOR PRODUCT AND PAYMENT
A. At least once each year during the term of this Agreement, DUPONT
will issue a Blanket Purchase Order for anticipated Product purchases. DUPONT
will then issue releases against the Blanket Purchase Order, on at least a
monthly basis, at least 30 days in advance of the requested ship date.
Releases will be firm orders.
B. PROGENICS will manufacture and ship the Product to DUPONT within
ten days of DUPONT's requested ship date. On shipment of an Order, PROGENICS
will invoice DUPONT for the raw material cost of the Product.
C. DUPONT will pay PROGENICS within 30 days of DUPONT's receipt of a
correct PROGENICS invoice.
D. DUPONT may request manufacture of Product using its standard
purchase order forms or other written means (an "Order"). Purchases under
this Agreement will be governed by the provisions of this Agreement, rather
than the standard terms and conditions of DUPONT's purchase order form or any
PROGENICS form.
5. QUALITY CONTROL, REJECTION OF NONCONFORMING
PRODUCTS AND NOTICE OF CUSTOMER COMPLAINTS
A. PROGENICS and DUPONT agree to exchange sufficient quality and
Product release information to avoid duplication of testing of Product.
PROGENICS and DUPONT will mutually agree on the types and amounts of
information needed to reach this goal.
B. PROGENICS will manufacture Product in accordance with the
specification attached in Exhibit A and any amendments to Exhibit A. DUPONT
may return any defective or nonconforming Product to PROGENICS. Nonconformance
will mean any failure to meet specification or other manufacturing defect
that renders the
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Product unsuitable for sale or use. Risk of loss and expenses incurred in
shipping any defective or nonconforming Product to PROGENICS will be borne by
PROGENICS with a direct reimbursement to DUPONT or, at DUPONT's option,
credit on subsequent purchases.
C. DUPONT will notify PROGENICS of any customer complaint about a
Product or Improved Product defect within ten days of confirmation of the
defect. The notice will specify the Product and type of defect.
6. LIMITED WARRANTY AND LIMITATION OF REMEDIES
A. PROGENICS warrants to DUPONT that all Product meets the
specifications stated in Exhibit A and is free of defects in Material and
manufacture at the time of shipment. If any Product is proven to be defective
in material or manufacture, PROGENICS' entire liability and DUPONT's
exclusive remedy will be, at PROGENICS' option, either replacement of the
Product, or refund of the purchase price paid by DUPONT for the defective
Product, within a reasonable time after written notification of the defect
and return of the defective Product to PROGENICS. Notices of defect must be
received by PROGENICS within 60 days of DUPONT's receipt of notice of a
defect from the customer.
B. THE WARRANTY STATED IN PARAGRAPH 6-A IS MADE IN LIEU OF ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED
WARRANTY OF MERCHANTABILITY, THE IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR
PURPOSE, ANY IMPLIED WARRANTY ARISING OUT OF A COURSE OF DEALING OR OF
PERFORMANCE, CUSTOM OR USAGE OF TRADE, EXCEPT OF TITLE AND AGAINST PATENT
INFRINGEMENT.
C. PROGENICS has no obligations under this warranty with respect to
Products that have been modified or damaged through misuse, abuse, accident,
neglect, improper storage or mishandling by DUPONT, or if DUPONT holds Product
in storage beyond the natural age of the Product.
D. PROGENICS warrants and represents that (i) Product does not constitute
the subject matter of any currently pending litigation and PROGENICS is not
aware as of the effective date of this Agreement of any litigation
contemplated by PROGENICS or any other third party with respect to the
subject matter of this Agreement and (ii) sale and use of Product will not
infringe any third party patents and that any patent rights necessary for
DUPONT and its customers to use and sell Product have been acquired by
PROGENICS. No warranty or representation is made with respect to use of
Product for purposes other than research or for use in combination with other
products.
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7. LIMITATION OF LIABILITIES: TIME LIMIT FOR FILING ACTION
A. Subject to the indemnity provisions set forth below, NEITHER PARTY
WILL UNDER ANY CIRCUMSTANCES BE LIABLE TO THE OTHER FOR INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, LOSS OF
PROFITS, REVENUE OR BUSINESS) RESULTING FROM OR IN ANY WAY RELATED TO THE
PRODUCTS, ANY OF DUPONT'S PURCHASE ORDERS, THIS AGREEMENT, OR, THE
TERMINATION OR NONRENEWAL OF THIS AGREEMENT. This limitation applies
regardless of whether the damages are sought based on breach of warranty,
breach of contract, negligence, strict liability in tort, or any other legal
theory.
B. Any action for breach of warranty or any other obligation under
this Agreement must be commenced within one year after the breach occurs.
8. INDEMNIFICATION
A. PROGENICS agrees to indemnify, defend and hold harmless DUPONT from any
cost, loss, claim, liability and expense (including reasonable attorney's fees
and expenses of litigation) by third parties for property damage, personal
injury or death to the extent based on PROGENICS' breach of this Agreement or
on PROGENICS' negligence with respect to manufacture of the Product.
B. PROGENICS will defend DUPONT at PROGENICS' cost and expense,
including reasonable attorney's fees, against any claim or suit for
infringement of patent brought against DUPONT to the extent the claim
concerns the Product. In addition, PROGENICS will indemnify DUPONT against
any judgment awarded in such a suit, provided that DUPONT gives PROGENICS
prompt written notice of the claim, the right to maintain sole control of the
defense and all negotiations for settlement of the claim or suit, and
cooperates with PROGENICS if requested in the defense of the claim of suit.
C. DUPONT agrees to indemnify, defend and hold harmless PROGENICS from
any cost, loss, claim, liability and expense (including reasonable attorney's
fees and expenses of litigation) by third parties for property damage,
personal injury or death to the extent based on DUPONT's breach of this
Agreement or on DUPONT's negligence with respect to sale or distribution of
the Product.
D. (i) DUPONT will promptly advise PROGENICS in writing of any claim of
infringement and of the commencement against it of any claim for infringement
of a patent issued to a third party based upon the sale of any Product.
PROGENICS will, if promptly requested in writing to do so, and subject to the
other conditions and limitations of this Section, defend any such lawsuit.
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(ii) PROGENICS shall have the control of the defense of such lawsuit.
DUPONT agrees to assist PROGENICS in the defense of such suit or action by
providing information and, if need be, fact witnesses. DUPONT shall have the
right to be represented by its own attorneys at DUPONT's own expense, which
attorneys will act only in an advisory capacity.
(iii) If PROGENICS is requested to defend a lawsuit as described above,
PROGENICS will defend DUPONT for any damages and costs that may become
payable under a final judgment or decree by any court in such lawsuit.
(iv) Nothing herein shall authorize PROGENICS to settle any lawsuit
without the consent of Licensee, if by such settlement DUPONT is obligated to
make any monetary payment, to transfer any property or any interest in
property, to become subject to an injunction, or to grant any license or
other rights under its intellectual property rights.
(v) If DUPONT is unable to dispose of any inventory due to infringement of
third party patent, then PROGENICS shall provide DUPONT with a credit equal
to the amount of inventory which DUPONT cannot dispose of due to infringement
of a third party patent.
9. CONFIDENTIALITY AND PATENT RIGHTS
A. DUPONT will treat as confidential information and not disclose to
third persons or use for its own benefit or the benefit of others, any of
PROGENICS' developments, business knowledge, know-how, discoveries (including
PROGENICS' Product formula, processing standards, specification, test
procedures and other information concerning the design, composition and
method of manufacture of the Product) and other confidential or proprietary
information which may be disclosed to DUPONT in writing or confirmed in
writing and specifically designated as "confidential".
B. The obligation of nondisclosure and non-use set forth above shall
not apply to any items which:
1. Are available to the public or become available to the public through
no fault of the recipient;
2. are known by the recipient at the time of disclosure, as shown by
prior written records;
3. are rightfully received by the recipient from a third party without
a duty of nondisclosure; or
4. are developed by or for the recipient independent of the disclosure
hereunder, as evidenced by the recipient's written records relating
thereto.
The obligation of nondisclosure and non-use set forth above shall continue for
a period of five years from disclosure, notwithstanding any earlier
termination of this Agreement.
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E. Neither party acquires any intellectual property rights or licenses
under this Agreement, or rights to use confidential information disclosed to
it hereunder for purposes other than complying with its obligations hereunder.
10. TERM AND TERMINATION
A. This Agreement commences on the date first above written and
continues unless and until either party gives the other at least 120 days
advance written notice of termination.
B. Either party may terminate this Agreement if the other party
breaches this Agreement by giving 30 days prior written notice, subject,
however, to the other party's right to cure the breach within the notice
period.
C. Even after termination, the provisions of this Agreement still
apply to all Product ordered, purchased and manufactured, all obligations
created or arising, and all transactions and events occurring before the date
of termination.
11. NOTICES
A. All notices required by this Agreement must be in writing and sent by
certified mail, with return receipt requested, Federal Express or other
overnight service. The date of a notice is the date it is received. A
facsimile copy of any notice shall be sent in addition to the written notice
herein specified.
B. DUPONT will send all notices under this Agreement to:
Attn.: CEO
Progenics Pharmaceuticals, Inc.
Old Saw Mill River Road
Tarrytown, NY 10591
Telex (914) 789-2817
C. PROGENICS will send all notices under this Agreement to:
Attn.: Product Manager
DuPont Medical Products
549 Albany Street
Boston, MA 02118
Telex (617) 542-8463
D. A party may designate in writing other individuals or locations to
receive notice.
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12. DISPUTE RESOLUTION
A. The parties agree to attempt in good faith to resolve any dispute
arising out of or relating to this Agreement promptly by negotiations.
1. Either party may give the other party written notice of any
dispute not resolved in the normal course of business. Executives
of both parties at levels one step above the project personnel who
have previously been involved in the dispute will meet at a
mutually acceptable time and place within ten days after delivery
of the notice, and thereafter as often as they reasonably deem
necessary. The purpose of this meeting is for the executives to
exchange relevant information and to attempt to resolve the
dispute.
2. If the matter has not been resolved by the executives within 30
days of the notice, or if the parties fail to meet within the ten
day period, the dispute will be referred to senior executives of
both parties who have authority to settle the dispute to attempt
to resolve the dispute. If the matter has not been resolved within
30 days from the referral of the dispute to the senior executives,
or if no meeting has taken place within 15 days after referral to
the senior executives, either party may initiate mediation or
other mutually agreed to alternate dispute resolution mechanism.
3. If the dispute has not been resolved by negotiation as stated
above, the parties agree to attempt to settle the dispute by
mediation using a third party neutral; provided however, that if
the dispute has not been resolved within ninety (90) days of the
initial notice of dispute for whatever reason, either party may
pursue such judicial relief as it deems appropriate.
B. The procedures stated in Paragraph 12-A will be the sole and
exclusive procedures for the resolution of disputes between the parties
arising out of or relating to this Agreement. A party, however, may seek a
preliminary injunction or other provisional judicial relief if in its
judgment such action is necessary to avoid irreparable damage or to preserve
the status quo. Despite such action the parties will continue to participate
in good faith in the procedures specified in this Paragraph 12.
C. Any questions, claims, disputes or litigation arising from or related
to this Agreement are governed by the law of the state of New York, without
regard to the principles of conflicts of law.
7
<PAGE>
13. GENERAL TERMS
A. No liability shall result from delay in performance, or
nonperformance, caused by circumstances beyond the control of the party
affected, including without limitation Act of God, fire, flood, war,
government action, riot, civil disturbance, accident, inability to obtain
labor, material, equipment or transportation. Quantities so affected by force
majeure may be eliminated without liability, but the Agreement shall remain
otherwise unaffected.
B. The relationship of the parties under this Agreement is that of
independent contractors. Nothing in this Agreement authorizes either party to
act for the other as an agent.
C. Neither party may assign any of its rights or delegate or
subcontract any of its duties under this Agreement without first getting the
other party's permission in writing. Notwithstanding the foregoing,
assignment and delegation may be made by either party hereto without such
prior permission in connection with the transfer by such party of the
business to which this Agreement relates.
D. This Agreement represents the entire agreement of the parties, and
supersedes any and all prior agreements, conversations and understandings
between the parties hereto with respect to the subject matter hereof. No
modification of its provisions shall be valid unless it is in writing and
signed by both parties. The provisions of this Agreement are severable. If
any provision herein violates or anywhere contravenes any applicable law, it
shall not be deemed a part of this Agreement.
C. This Agreement shall be interpreted in accordance with the laws of
New York.
ACCEPTED AND AGREED TO:
PROGENICS PHARMACEUTICALS, INC. E.I. DU PONT DE NEMOURS
AND COMPANY
By: Paul J. Maddon By: Janet J. Seal
- --------------------------- ----------------------------
Title: Chairman & CEO Title: Non Business District
8
<PAGE>
PROGENICS
Sheet 1
[***]
Page 1
[***] Confidential Treatment Requested
<PAGE>
PROGENICS
[LOGO] [LETTERHEAD]
PRODUCT SPECIFICATION SHEET
PRODUCT: Recombinant HIV-1LAI gp120
PRODUCT HIV- 1LAI gp120 (full-Length)
DESCRIPTION: produced in a CHO expression system.
STORAGE BUFFER: 20 mM Imidazole, pH 7.1; 200 mM NaCl
CONCENTRATION: 1 mg/ml
SHIP: DRY ICE
STORE: -80DEG. C
STABILITY: 6 months at -80DEG. C
QUALITY CONTROL
- ---------------
CONCENTRATION Determined by BCA and
AND PURITY: SDS-PAGE/Silver stain (Purity > 95%)
AUTHENTICITY: Reactive with recombinant human soluble CD4 and
anti-gp120 antibodies
Mammalian cell glycosylation pattern.
ACTIVITY: Binds recombinant human soluble CD4 with an
affinity of 1.7 nM.
FOR LABORATORY USE ONLY
NOT FOR VACCINE OR DIAGNOSTIC USE
<PAGE>
[LOGO]
[LETTERHEAD]
E.I. DU PONT DE NEMOURS & CO. (INC.)
MEDICAL PRODUCTS DEPARTMENT
Reference is made to the Agreement entered into the 19th day of July, 1995,
as amended between E.I. DuPont de Nemours and Company (DuPont) and Progenics
Pharmaceuticals, Inc. (Progenics) relative to the purchase of HIV-1 (LAI)
gp120 by DuPont. It is hereby mutually agreed to further amend the aforesaid
Agreement in the following manner effective August 24, 1995.
This amendment is being made to update specifications, extending stability
from 6 months at -80DEG. C to 12 months from date of
purification/repurification. Hence a new Product specification
Exhibit A is attached, dated and effective August, 1995.
This amendment is also being made to update the "Orders for Product and
Payment" clause, to include Progenics' agreement to supply DuPont Product
with at least nine (9) months shelf life upon receipt by DuPont.
All other terms and conditions of the current Agreement, except as modified
in the above manner, shall continue in full force and effect. Please indicate
your acceptance of this amendment by signing both copies in the space
provided below and return the copy marked "DuPont M&L Copy" to Robert Hand,
DuPont Merck Pharmaceutical Co., Purchasing Department, 331 Treble Cove Road,
Billerica, MA 01862.
Very truly yours,
PROGENICS PHARMACEUTICALS, INC. E.I. DUPONT de NEMOURS & CO.
BY: /s/ Paul J. Maddon BY: /s/ R.M. Hand
- -------------------------------- ----------------------------
TITLE: Chief Executive Officer TITLE: Sr. Purchasing Agent
- -------------------------------- ----------------------------
DATE: October 27, 1995 DATE: September 10, 1995
- -------------------------------- ----------------------------
Attach.
<PAGE>
MATERIALS SPECIFICATION SHEET
(PURCHASED MATERIALS)
DESCRIPTION: Recombinant HIV-1 LAI gp 120
DUPONT PART#: NEA201001EA
- -------------------------------------------------------------------------------
SPECIFICATIONS TEST/APPROVAL CRITERIA
- -------------------------------------------------------------------------------
PRODUCT DESCRIPTION: HIV-1 LAI gp120 (full-length)
produced in a mammalian (CHO)
express system
STORAGE BUFFER: 10mM Sodium Phosphate, 4mM Potassium
Chloride, 140mM Sodium Chloride,
pH 7.1
CONCENTRATION: 1.0 + or - 0.1 mg/mL
AMOUNT: 100 ug per vial
SHIP: Dry ice
STORE: - 80DEG. C
STABILITY: 12 months at -80DEG. C from date of
Purification/Repurification
- -------------------------------------------------------------------------------
QUALITY CONTROL TEST/APPROVAL CRITERIA
- -------------------------------------------------------------------------------
CONCENTRATION AND PURITY: Determine by BCA and SDS-PAGE/Silver
stain (Purity > 95%)
AUTHENTICITY: Reactive with recombinant human
soluble CD4 and anti-gp 120
antibodies; Mammalian cell
glycosylation pattern
ACTIVITY: Binds to recombinant human soluble CD4
(Kd < 10nM)
NEA201-0995 SUPERCEDES: 081895
<PAGE>
Exhibit 10.11
[LOGO]
E.I. DU PONT DE NEMOURS & CO. (INC.)
MEDICAL PRODUCTS DEPARTMENT
This document, when properly executed, shall constitute a Supply
Agreement between Progenics Pharmaceuticals, Inc. with offices at
Old Saw Mill River Road, Tarrytown, NY, (Progenics) and
E.I. DuPont de Nemours and Company (DuPont), with offices at
549 Albany Street, Boston, MA.
1. PERIOD OF AGREEMENT:
May 1, 1995 through April 30, 1998. After the original term, this
Agreement will renew automatically for successive 12 month periods
unless either party gives notice to the other of its intention not to
renew at least 120 days prior to the expiration of the then current
term.
2. MATERIAL:
Recombinant Soluble sCD4, referred to hereafter as sCD4 or Product.
3. MATERIAL SPECIFICATIONS:
Material shall be suppled in the form and manner, and must conform in
all material respects to the specifications set out in Attachment A.
Alterations to these specifications require the express written
consent of each party.
4. INABILITY TO SUPPLY:
Progenics recognizes the importance of its obligation to meet DuPont's
material requirements in a timely and reliable manner. To enable such
continuity of supply, Progenics will use its best efforts to arrange
for sCD4 to be manufactured on Progenics' behalf if some unusual event
causes Progenics' inability to supply. If at any time, Progenics for a
continuous period of ten (10) days due to a force majeure event, or
non-force majeure event, shall be unable or unwilling to deliver any
Product subject to this Agreement and attachments hereto, then
Progenics shall notify DuPont of the situation and use its best
efforts to arrange for sCD4 to be manufactured to DuPont's material
requirements hereunder. In the event that the failure to deliver sCD4
shall be as a result of the fault of Progenics, then Progenics shall
bear all costs necessary to cause the sCD4 to be manufactured by
another party ("Alternate Manufacturing Cost").
MEDICAL PRODUCTS DEPARTMENT
549 Albany Street, Boston, Massachusetts 02118 Telephone 617-482-9595
Fax (617) 542-8468
<PAGE>
2
INABILITY TO SUPPLY (Cont'd):
In the event that the failure to deliver sCD4 shall be as a result of the
fault of DuPont, then DuPont shall bear all Alternate Manufacturing
Costs. In all other events, Progenics shall arrange for the alternate
manufacturer and each party shall bear its own costs. If Progenics
corrects the cause for alternate manufacture, then Progenics may
resume production of affected Product at any time.
5. PRICE
[***]
6. PAYMENT TERMS:
Net 30 days, following the receipt of a properly prepared and correct
invoice.
7. QUANTITY:
DuPont commits to purchase 100% of its purchase requirements for sCD4
during the term of this order from Progenics, and Progenics agrees to
supply 100% of DuPont's purchase requirements.
8. DELIVERY TERMS:
F.O.B. Destination, freight pre-paid and added.
9. RELEASE:
DuPont will advise Progenics of its purchase requirements at least
quarterly, or as may otherwise suit the parties by agreement.
Progenics shall ship product as required by DuPont according to a
mutually agreed upon schedule. Progenics shall advise DuPont at its
earliest opportunity if it is unable to ship Product at an agreed upon
time. Progenics will, on a best effort basis, attempt to fulfill any
unscheduled, or spot requirements of DuPont.
10. LABELLING AND SHIPPING:
Progenics' name and logo will appear on the main kit label (not on
components) on manual and on promotional literature, along with
DuPont's. All labels to be approved by both parties.
Product will be shipped Federal Express Priority I on dry ice. In
parallel, Progenics will perform stability studies on lyophilized
product. Shelf life of the sCD4 will be no less than 6 months upon
receipt by DuPont.
[***] Confidential Treatment Requested
<PAGE>
3
11. CONFIDENTIALITY:
The parties hereto shall keep confidential all confidential technical
information, supplied by one party to the other, shall not disclose or
make known to any individual, firm, or corporation, except when
authorized in writing to do so by the other party, and shall not use
such information for any purpose other than the performance of the
obligations provided in this Agreement. The provisions of this clause
shall remain binding for five (5) years after the termination of this
Agreement.
Each party shall use the same degree of care to avoid disclosure of
confidential technical information as the party employs with similar
information of its own which it does not desire to publish or disclose.
Any confidential information shared between the parties must be
identified and labeled in writing as confidential. The confidentiality
of and information disclosed verbally must be identified in writing as
confidential no more than 14 days after disclosure.
This obligation shall not apply to information and/or documents which:
A) Are or come within the public domain otherwise than as
a consequence of a breach of the obligations
hereunder;
B) Are known to the receiving party prior to disclosure by
the other party as shown by the receiving party's
records;
C) Are lawfully disclosed to the receiving party by third
parties; or
D) Are subsequently independently developed by the
receiving party through no reference whatsoever to
disclosure hereunder.
12. WARRANTY:
Progenics warrants and guarantees that DuPont will not be subject to
any patent infringement with respect to sDC4 supplied by Progenics as
set forth in paragraph 14. In addition, Progenics warrants and
represents that it shall convey good and valid title to material(s)
supplied
<PAGE>
4
WARRANTY (Cont'd):
hereunder and that material(s) supplied hereunder shall meet all of
the specifications set forth in Attachment A and shall be free from
defects except those caused by misuse or mishandling occurring after
such delivery. Progenics shall notify DuPont prior to making any
formulation changes in the Product. Progenics further warrants that
packaged product will meet the warranty of merchantability and fitness
for intended use. In the event of a recall of Product, Progenics
agrees to reimburse DuPont for all reasonable costs incurred in the
recall.
13. USE OF MATERIAL:
Progenics as a co-exclusive licensee to a family of patents owned by
Columbia University covering the CD4 gene and protein, will supply
DuPont with quantities of sCD4 necessary to meet market demands.
DuPont shall be entitled to use such sCD4 supplied by Progenics for
the manufacturing of drug screening kits to be sold by DuPont to third
parties.
14. PATENTS:
[***]
Progenics shall defend any suit or proceeding brought against DuPont
based on a claim that materials or services purchased hereunder, or
any part thereof, furnished by Progenics under this Agreement
constitutes an infringement of any patent, copyright, or other
proprietary right of any third party provided Progenics is notified
promptly in writing and given authority, information, and assistance
by DuPont to defend such suits or proceedings.
[***] Confidential Treatment Requested
<PAGE>
5
PATENTS (Cont'd):
Progenics shall assume the responsibility to pay all costs, to
include such reasonable attorney fees of defending such suits or
proceeding and any damages that may be awarded therein against DuPont,
to settle any such claim on such terms and conditions it deems
advisable. In case the materials purchased hereunder, or any part
thereof, is in such suit or proceeding held to constitute infringement
or any patent, copyright, or other proprietary right of any third
party, and the use thereof is enjoined, or the settlement made
requires the use of services or materials purchased hereunder to be
discontinued, Progenics shall, at its own expense, and its option,
either procure for DuPont the right to continue using such materials
or services, replace the same with non-infringing materials which
conform to the available specifications, modify such materials or
services in a manner acceptable to DuPont so it becomes
non-infringing, or terminate this Agreement.
15. RELATIONSHIP OF THE PARTIES:
Nothing contained herein shall be construed to empower either party
to act as agent for the other. The parties agree that each of them
shall, in relation to its obligations hereunder, be acting as an
independent contractor.
RELATIONSHIP OF THE PARTIES (Cont'd)
Notwithstanding, neither party shall, during the period of this
Agreement, enter into discussions nor create an alternative
arrangement with any third party concerning the subject matter herein,
without first advising the other party of its intent.
16. ASSIGNMENT AND SUBCONTRACTING:
Neither party shall assign or transfer this Agreement, in whole or in
part, or any interest arising under this Agreement or subcontract any
work hereunder without the prior written consent of the other party.
Subject to the provisions of this clause, this Agreement shall insure
the benefit of and be binding upon the successors and assigns of the
parties.
17. DOCUMENTS/COMMUNICATIONS:
Purchase Order Number(s), Line Number(s), and Release Number(s) are
to appear on all paper work such as packing lists, invoices and
correspondence. Also, Certificates of Analysis (C.O.A.) shall be
submitted to DuPont by Progenics for each lot shipped by Progenics.
<PAGE>
6
18. NOTICES:
Any notices to be given hereunder shall be given in writing and shall
be deemed to have been validly given when deposited in the United
States mail, properly stamped and addressed to DuPont or Progenics,
whichever the case may be, at the addresses shown below or at such
other address as may from time to time be designated by such party in
a notice to the other party.
Progenics: Progenics Pharmaceutical, Inc.
Old Saw Mill River Road
Tarrytown, NY 10591
Attn: Joel Sendek
DuPont: E.I. DuPont de Nemours and Company
Medical Products Department
549 Albany Street
Boston, MA 02118
Attn: Judith Lima-Ziegler
Materials/Inventory Supervisor
19. NONDISCRIMINATION:
Progenics warrants that it has complied with all applicable laws,
rules, orders and regulations of governmental authority covering the
production, sale and delivery of the Product specified herein,
including, but not limited to, Executive Order 11246, and the rules
and regulations promulgated thereunder, the Rehabilitation Act of 1973
and the Vietnam Era Veterans Readjustment Act of 1974. Further, Progenics
warrants that in the performance of the services hereunder, it will
comply with all applicable provisions of the Fair Labor Standards Act
of 1938, as amended.
20. AUDITS:
Progenics shall permit no less frequently than once per year, and
upon reasonable notice by DuPont, inspections and audits by DuPont
during regular business hours of all records and aspects of sCD4
manufacture, testing, packaging, labelling and shipping.
21. CANCELLATION:
This Agreement may be cancelled by either party upon 120 days written
notice to the other party.
<PAGE>
7
22. ENTIRETY:
This Agreement, together with the Attachments specifically referenced
and attached hereto, embodies the entire understanding between DuPont
and Progenics, and there are no contracts, warranties, or
representations, oral or written, express or implied, with reference
to the subject matter hereof which are not merged herein. Except as
otherwise specifically stated, no modification hereto shall be of any
force or effect unless reduced to writing and signed by both parties
and expressly referred to as being modifications of this Agreement.
AGREED & APPROVED:
FOR PROGENICS: FOR DUPONT:
Name: Paul J. Maddon, M.D., Ph.D. Name: Robert M. Hand
Title: CEO and Scientific Dir. Title: Sr. Purchasing Agent
Signature: /s/ Paul J. Maddon Signature: /s/ Robert M. Hand
Date: June 27, 1995 Date: June 8, 1995
<PAGE>
Exhibit 10.12
This document, when properly executed, shall constitute a Supply Agreement
between Progenics Pharmaceuticals, Inc. with offices at 777 Old Saw Mill River
Road, Tarrytown, NY, 10591 ("Progenics") and Intracel Corporation, with offices
at 359 Allston Street, Cambridge, MA 02139 ("Intracel").
1. PERIOD OF AGREEMENT: February 1, 1996 through January 31, 1999. After the
original term, this Agreement will renew automatically for successive 12
month periods unless either party gives notice to the other of its
intention not to renew at least 120 days prior to the expiration of the
then current term.
2. MATERIAL: Recombinant HIV-1LAI gp120 (full-length) and recombinant
soluble human CD4 produced in a Chinese Hamster Ovary ("CHO") expression
system referred to hereafter as "gp120" and "CD4" or together as
"Product" (see attached Product Specification Sheets).
3. MATERIAL SPECIFICATIONS: Material shall be supplied in the form and
manner, and must conform in all material respects to the specifications
set out in the attached Product Specification Sheets. Alterations to
these specifications require the express written consent of each party.
4. PRICE:
[***]
5. MINIMUM PURCHASE: 10 milligrams of gp120 or CD4.
6. PAYMENT TERMS: Net 30 days, following the receipt of a properly prepared
and correct invoice.
7. DELIVERY TERMS: F.O.B. Tarrytown, NY.
8. RELEASES: Intracel will advise Progenics of its purchase requirements at
least quarterly, or as may otherwise suit the parties by agreement.
Progenics shall ship Product as required by Intracel according to a
mutually agreed upon schedule. Progenics shall advise Intracel at its
earliest opportunity if it is unable to ship Product at an agreed upon
time. Progenics will, on a best effort basis, attempt to fulfill any
unscheduled, or spot requirements of Intracel.
[***] Confidential Treatment Requested
<PAGE>
9. LABELING AND PACKAGING: Both Intracel's and Progenics' names shall appear
on the main product label, along with the following statement:
"Manufactured by Progenics Pharmaceuticals, Inc." Both Intracel's and
Progenics' names and logos shall appear on promotional literature, along
with the following statement: "Manufactured by Progenics Pharmaceuticals,
Inc."
All labels to be approved by both parties. All product labeling and
literature shall contain the phrase "For Laboratory Use." Progenics will
package product as 100 micrograms per vial, or in other package sizes as
mutually agreed upon by both parties. Product will be shipped on dry ice.
Shelf life of the Product will be no less than six (6) months upon
receipt by Intracel.
10. CONFIDENTIALITY: The parties hereto shall keep confidential all
confidential technical information, shall not disclose or make known to
any individual, firm, or corporation, except when authorized in writing
to do so by the other party, and shall not use such information for any
purpose other than the performance of the obligations provided in this
Agreement. The provisions of this clause shall remain binding for five
(5) years after the termination of this agreement. Each party shall use
the same degree of care to avoid disclosure of confidential technical
information as the party employs with similar information of its own
which it does not desire to publish or disclose. Any confidential
information shared between the parties must be identified and labeled in
writing as confidential. The confidentiality of and information disclosed
verbally must be identified in writing as confidential no more than 14
days after disclosure.
This obligation shall not apply to information and/or documents which:
A) Are or come within the public domain otherwise than as a consequence
of a breach of the obligations hereunder;
B) Are known to the receiving party prior to disclosure by the other
party as shown by the receiving party's records;
C) Are lawfully disclosed to the receiving party by third parties; or
D) Are subsequently independently developed by the receiving party
through no reference whatsoever to disclosure hereunder.
11. WARRANTY: Progenics warrants the packaged product hereunder shall meet
the specifications set forth in the attached Product Specification Sheets
and shall be free from defects except those caused by misuse or
mishandling occurring after such delivery. Progenics agrees to notify
Intracel prior to making any formulation changes in the Product.
Progenics further warrants that packaged product will meet the warranty
of merchantability and fitness for intended use. In the event of a recall
of Product, Progenics agrees to reimburse Intracel for all reasonable
costs incurred in the recall.
<PAGE>
12. USE OF MATERIAL: Progenics shall supply Intracel sCD4 and gp120 to be
sold by Intracel to third parties. The material will be used only for
research purposes and not for other uses such as clinical diagnostics or
therapeutic development. This Agreement is limited to resale of sCD4 and
gp120 as packaged at Progenics and does not allow Intracel to modify the
Product or combine the Product with other components, with the exception
of labeling Product with biotin, HRP, or FITC, which is permitted.
13. RELATIONSHIP OF THE PARTIES: Nothing contained herein shall be construed
to empower either party to act as agent for the other. The parties agree
that each of them shall, in relation to its obligations hereunder, be
acting as an independent contractor.
14. CANCELLATION: This Agreement may be canceled by either party upon 120
days written notice to the other party.
15. ENTIRETY: This Agreement, together with the Attachments specifically
referenced and attached hereto, embodies the entire understanding between
Intracel and Progenics, and there are no contracts, warranties, or
representations, oral or written, express or implied, with reference to
the subject matter hereof which are not merged herein. Except as
otherwise specifically stated, no modification hereto shall be of any
force or effect unless reduced to writing and signed by both parties and
expressly referred to as being modifications of this Agreement.
AGREED & APPROVED:
For Progenics: For Intracel:
------------- -------------
Name: Paul J. Maddon, M.D., Ph.D. Name: Cheryl G. Cataldo
Title: Chairman & CEO Title: Controller
Signature: /s/ Paul J. Maddon Signature: /s/ Cheryl G. Cataldo
Date: February 7, 1996 Date: February 8, 1996
<PAGE>
EXHIBIT 10.13
License Agreement Between
Sloan-Kettering Institute for Cancer Research
and
Progenics Pharmaceuticals, Inc.
THIS LICENSE AGREEMENT, effective November 17, 1994, is
entered into by Progenics Pharmaceuticals, Inc. a corporation of
the State of Delaware, having its principal place of business at
777 Old Saw Mill River Road, Tarrytown, New York 10591 (herein
called LICENSEE), and Sloan-Kettering Institute for Cancer
Research, a not-for-profit membership corporation of the State of
New York, having its principal place of business at 1275 York
Avenue, New York, New York 10021 (herein called LICENSOR).
I. BACKGROUND OF AGREEMENT
1.00 LICENSOR represents that it has certain technology,
patent applications and technical information pertaining to cancer
vaccines with respect to which it is prepared to grant an
exclusive license to LICENSEE.
1.01 LICENSEE wishes to acquire an exclusive license under
selected patents and technical information of LICENSOR for
purposes of developing and commercializing vaccines for the
treatment and prevention of human neoplastic disease worldwide.
1.02 LICENSOR acknowledges that commercialization of LICENSED
PRODUCTS may require LICENSEE to obtain additional licenses and
technologies from others.
II. DEFINITIONS
As used herein, the following terms shall have the meanings
set forth below:
2.00 DEFINITIONS EXHIBIT means the Exhibit A attached to this
LICENSE AGREEMENT which contains additional defined terms.
<PAGE>
2.01 EFFECTIVE DATE means November 17, 1994 which is the date
upon which this LICENSE AGREEMENT becomes effective.
2.02 LICENSED PATENT(s) shall mean
a) the following patent applications and patents relating
to ganglioside vaccines, intermediates or methods of
producing them, or methods of, or compositions using, them
which are owned by LICENSOR
[***]
(i) U.S. Patent Application No. 08/009,268 (Filed
January 22, 1993) all patents issuing therefrom and all
divisions, continuations, reissues, substitutes, and
extensions thereof and the foreign equivalents thereof;
[***]
[***]
2.03 LICENSED TERRITORY means worldwide.
2.04 LICENSED FIELD means, and is limited to, the practice of
the LICENSED PATENTS and TECHNICAL INFORMATION for
a) the treatment or prevention of neoplastic human
disease with any of the following:
[***]
-2-
[***] Confidential Treatment Requested
<PAGE>
[***]
[***]
2.05 LICENSED PRODUCT(S) means any and all products which fall
within the LICENSED FIELD and which would infringe the claims of
LICENSED PATENT(S) but for this LICENSE AGREEMENT or are produced
or used using a process or method that would infringe but for this
LICENSE AGREEMENT a claim of a LICENSED PATENT or were developed
using TECHNICAL INFORMATION.
2.06 LICENSED TECHNOLOGY means the LICENSED PATENT(S) and the
TECHNICAL INFORMATION.
2.07 LICENSE AGREEMENT means the license agreement, defined by
the document in which this paragraph appears. This LICENSE
AGREEMENT is between Sloan-Kettering Institute for Cancer
Research, as LICENSOR, and Progenics Pharmaceuticals, Inc., as
LICENSEE. Also included in this LICENSE AGREEMENT are all
Exhibits attached hereto and all amendments which may be made
thereto.
2.08 TECHNICAL INFORMATION means unpublished research and
development information, unpatented inventions, know-how, trade
secrets, and technical data in the possession of LICENSOR at the
effective date of this LICENSE AGREEMENT which are needed to
produce or gain government approvals to market LICENSED PRODUCT(S)
and which LICENSOR has the right to and will provide to LICENSEE
upon request. However, TECHNICAL INFORMATION does not include
patient names. Information and materials shall no longer be
considered to be TECHNICAL INFORMATION if such information or
materials cease to be CONFIDENTIAL INFORMATION.
-3-
[***] Confidential Treatment Requested
<PAGE>
III. LICENSE GRANT
3.00 LICENSOR hereby grants to LICENSEE to the extent of the
LICENSED FIELD and LICENSED TERRITORY, a license under LICENSED
PATENTS and TECHNICAL INFORMATION to make, have made, use, sell,
have sold and develop LICENSED PRODUCTS. No license under
LICENSED PATENTS and TECHNICAL INFORMATION is granted, and no
license should be implied, with respect to activities of LICENSEE
outside the LICENSED FIELD.
3.01 The license granted to LICENSED PATENTS pursuant to
paragraph 3.00 hereof shall be exclusive, with the right to grant
sublicenses, subject to the provisions in Article VI of this
LICENSE AGREEMENT. The license granted to TECHNICAL INFORMATION
pursuant to paragraph 3.00 shall be exclusive for the LICENSED
FIELD with the right to grant sublicenses, subject to the
provisions in Article VI of this LICENSE AGREEMENT.
3.02 The license granted in Article III shall be granted to
AFFILIATES of LICENSEE upon receipt of written notification to
LICENSOR. On the EFFECTIVE DATE, the license is granted to
LICENSEE's AFFILIATE Active Biotherapies, Inc., 777 Old Saw Mill
River Road, Tarrytown, New York 10591.
3.03 Without limiting the foregoing license grants, LICENSOR
agrees that this grant will extend to and authorize the
manufacture, sale, lease or other transfer of LICENSED PRODUCTS,
LICENSED PATENTS and TECHNICAL INFORMATION through an AFFILIATE or
a DISTRIBUTOR and shall authorize END USERS' use of LICENSED
PRODUCTS, LICENSED PATENTS AND TECHNICAL INFORMATION transferred
by LICENSOR to LICENSEE's AFFILIATE or DISTRIBUTORS.
3.04 All rights granted in this LICENSE AGREEMENT are
expressly granted subject to the rights of the GOVERNMENT pursuant
to 35 U.S.C. Sections 200 ET SEQ., as amended, and the
implementing regulations, and such rights are specifically
reserved by this LICENSE AGREEMENT to the GOVERNMENT. If LICENSOR
is required to grant licenses pursuant to the statutory and
regulatory requirements referred to in this paragraph, or if the
license granted to LICENSEE under this LICENSE AGREEMENT is
otherwise modified or limited by the GOVERNMENT pursuant to such
requirements, LICENSOR and LICENSEE shall negotiate in good faith
-4-
<PAGE>
a reduction of the license fees and royalties payable hereunder
and such other amendments of this LICENSE AGREEMENT as may be
appropriate under the circumstances.
3.05 Notwithstanding the exclusive field license granted
herein, LICENSOR specifically reserves the rights to manufacture,
or use the LICENSED PATENTS, LICENSED PRODUCTS and TECHNICAL
INFORMATION for its own internal purposes, including continuing
research, development, testing, clinical use and all other
internal uses. LICENSOR may have the LICENSED PRODUCTS
manufactured by third parties solely for LICENSOR's internal use
provided any such third party agrees in writing (a) not to use the
TECHNICAL INFORMATION except for such purpose and (b) not to
disclose the TECHNICAL INFORMATION to others. LICENSOR also
reserves the right to permit other entities or individuals to use
the LICENSED PATENTS, LICENSED PRODUCTS, and TECHNICAL INFORMATION
solely for academic research purposes provided such other entities
or individuals agree in writing (a) to use the same only for
academic research purposes, (b) not to provide the same to other
entities or individuals and (c) not to disclose the TECHNICAL
INFORMATION to others.
3.06 Provided LICENSOR's AFFILIATE(S) is capable and accepts,
LICENSEE hereby grants to LICENSOR's AFFILIATE(S) a right of first
refusal to function as a site at which the clinical tests or
trials of any LICENSED PRODUCT(S) are performed. Such right of
first refusal shall mean that LICENSEE shall request a proposal
from LICENSOR setting forth the procedures which LICENSOR would
follow in the tests and the associated costs. If LICENSEE decides
not to accept LICENSOR's proposal then LICENSEE may only contract
with a clinical test site(s) whose proposal is more favorable
(taken as a whole) to LICENSEE than that proposed by LICENSOR.
IV. LICENSE FEES AND ROYALTY
4.00 LICENSEE shall, as a license fee, pay to LICENSOR the sum
[***]
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[***]
4.01 LICENSEE shall pay to LICENSOR a royalty of
[***]
4.02 If at the time of the sale of a LICENSED PRODUCT a patent
application is still pending and no valid claims have issued which
such LICENSED PRODUCT would infringe then the royalty rate for
such LICENSED PRODUCT shall be [***]
Once such claim(s) issue the royalty rate for a
LICENSED PRODUCT covered by such claim shall be as set forth in
paragraph 4.01.
4.03 In the event that a LICENSED PATENT is abandoned or
expires or if all of its claims are finally declared invalid by a
non-appealable decision of a court of competent jurisdiction
through no fault or cause of LICENSEE, [***]
V. MINIMUM ROYALTIES AND DEVELOPMENT EFFORTS
5.00 LICENSEE shall pay to LICENSOR royalties and SUBLICENSE
ROYALTIES as stated in Articles IV and VI, but in no event shall
the sum of royalties and SUBLICENSE ROYALTIES for a calendar year
for practice of the LICENSED PATENTS and or use of TECHNICAL
INFORMATION in the LICENSED FIELD and LICENSED TERRITORY be less
than the following minimum royalties during each of the calendar
years indicated:
Minimum Royalty,
Calendar Year U.S. $ per Calendar Year*
1995 [***]
1996
1997
1998
1999
2000
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2001 [***]
2002 and each calendar year
thereafter during the term of
this LICENSE AGREEMENT
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* Net to LICENSOR after taxes,
if any, withheld at the source.
[***]
5.01 LICENSEE shall use its best reasonable efforts to
develop and market LICENSED PRODUCT(S) for commercial sale and
distribution throughout the LICENSED TERRITORY, and to such end,
LICENSEE, its AFFILIATES or its SUBLICENSEES shall achieve the
following objectives within the designated years following the
date of this LICENSE AGREEMENT in accordance with the following
schedule:
[***]
Failure to achieve these objectives shall result in LICENSOR
having the option to terminate the license granted hereunder,
subject to LICENSEE's right to achieve the missed objective within
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sixty (60) days of receipt of written notice of termination from
LICENSOR. LICENSOR shall not unreasonably withhold its consent to
any revision in the preceding schedule requested in writing by
LICENSEE and supported by evidence of technical difficulties or
delays in the clinical studies or regulatory process that could
not have been reasonably avoided. Notwithstanding the foregoing,
LICENSOR shall not have a right to terminate the license for the
failure of LICENSEE to meet a goal if such failure is a result of
(i) causes beyond LICENSEE's direct control; (ii) LICENSOR's
failure to meet its obligations hereunder; (iii) infringement of
third party patents; or (iv) actions or inactions of a federal or
state agency whose approval is required for commercial sales.
At intervals no longer than every twelve months LICENSEE
shall report in writing to LICENSOR's Office of Industrial Affairs
on progress made toward the objectives set forth above.
LICENSED PRODUCT(s) used, sold, leased, or transferred within
the United States shall be manufactured substantially in the
United States.
LICENSOR and LICENSEE acknowledge that each may be required
to disclose to the other information which is CONFIDENTIAL
INFORMATION. Each agrees to take reasonable precautions to
protect such CONFIDENTIAL INFORMATION and preserve its
confidential, proprietary, or trade secret status. Each shall use
at least the same degree of care and precaution as is customarily
used to protect its own CONFIDENTIAL INFORMATION.
5.02 LICENSOR may, by written notice to LICENSEE, terminate
this LICENSE AGREEMENT during any February subsequent to the year
2002, if LICENSEE has not either (a) practiced the LICENSED
PATENTS during the calendar year that precedes each such February
to the extent of generating earned royalties or SUBLICENSE
ROYALTIES as provided by Articles IV and VI of this LICENSE
AGREEMENT in the amount of [***]
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VI. SUBLICENSING
6.00 The license rights granted under this LICENSE AGREEMENT
shall specifically include the right for LICENSEE to grant
sublicenses. LICENSEE shall supply LICENSOR with an English
language copy of the executed agreement within thirty (30) days
after the execution of the sublicense agreement.
6.01 Sublicenses shall be transferable only from LICENSEE to
an AFFILIATE of LICENSEE or in connection with a MAJOR CORPORATE
TRANSACTION.
6.02 All sublicenses granted by LICENSEE shall expressly
provide that Articles II (DEFINITIONS), III (LICENSE GRANT), IX
(TERMINATION), X (LITIGATION), XI (RECORDS), XII,
(NONASSIGNABILITY), XIV (NONUSE OF LICENSOR's NAME, etc.), XVI
(MARKING) AND XVIII (EXPORTATION OF TECHNICAL INFORMATION) of this
LICENSE AGREEMENT shall be binding upon the SUBLICENSEE, as if
SUBLICENSEE were a party to this LICENSE AGREEMENT.
6.03 Each sublicense agreement shall include a provision
stating that the sublicense agreement shall automatically be
modified or terminated, in whole or in part, upon any modification
or termination, in whole or in part, of the LICENSE AGREEMENT if,
and to the extent, such modification or amendment to the LICENSE
AGREEMENT is relevant to and affects the terms of the sublicense
agreement. Such modification or termination of the sublicense
agreement shall be consistent with and reflect the modifications
or termination of the LICENSE AGREEMENT. Upon termination of this
LICENSE AGREEMENT for any reason, any sublicensee not then in
default shall have the right to seek a license from LICENSOR.
LICENSOR agrees to negotiate such licenses in good faith under
reasonable terms and conditions.
[***]
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[***]
6.05 In the event that SUBLICENSE INCOME becomes accrued and
payable at a time when no valid claims of the LICENSED PATENTS
have issued which would be infringed by the manufacture, sale or
use of a LICENSED PRODUCT, [***]
6.06 In the event that a LICENSED PATENT is abandoned or
expires or if all of its claims are finally declared invalid by a
non-appealable decision of a court of competent jurisdiction
through no fault or cause of LICENSEE, [***]
6.07 The SUBLICENSE ROYALTIES shall be paid by LICENSEE to
LICENSOR in conjunction with LICENSEE's earned royalty payments
and shall be accompanied by written reports, as required with the
LICENSEE's earned royalty payments, sufficient to allow LICENSOR
to audit the activities of each SUBLICENSEE.
6.08 The minimum royalty for a year will be creditable
against SUBLICENSE ROYALTIES to the extent and as provided in
paragraph 5.00.
VII. PAYMENTS AND REPORTS, LICENSED PATENT EXPENSES
7.00 Not later than the last day of each November, March,
May and August, LICENSEE shall furnish to LICENSOR a written
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statement in such detail as LICENSOR may reasonably require of all
amounts due pursuant to Articles IV and VI for the previous
calendar quarter ended the last days of the preceding September,
December, March and June, respectively, and shall pay to LICENSOR
all amounts due to LICENSOR. In the event that the amounts due at
the end of any calendar year do not equal the minimum royalties
specified in paragraph 5.00 for said calendar year, LICENSEE shall
pay to LICENSOR no later than the last day of March of the
following calendar year, the amount required to satisfy the
minimum royalty obligation for said calendar year. Such amounts
are due at the dates the statements are due. If no amount is
accrued during any calendar quarter, a written statement to that
effect shall be furnished.
7.01 Payments provided for in this LICENSE AGREEMENT, when
overdue, shall bear interest at a rate per annum equal to one
percent (1%) in excess of the "PRIME RATE" published by "The Wall
Street Journal" at the time such payment is due, and for the time
period until payment is received by LICENSOR.
7.02 If this LICENSE AGREEMENT is for any reason terminated
before all of the payments herein provided for have been made
(including minimum royalties for the year in which the agreement
is terminated), LICENSEE shall promptly submit a terminal report
and pay to LICENSOR any remaining unpaid balance as of the
termination date even though the due date as above provided has
not been reached.
7.03 LICENSEE shall reimburse LICENSOR for all reasonable
expenses incurred by LICENSOR after the EFFECTIVE DATE of this
LICENSE AGREEMENT in connection with the filing, prosecution and
maintenance of LICENSED PATENTS in the United States. At
LICENSOR's option, LICENSOR's patent counsel may bill LICENSEE
directly for such expenses and LICENSEE shall remit payment for
any undisputed amounts directly and promptly (within 30 days) to
LICENSOR's patent counsel. If the license should become non-
exclusive then (a) LICENSEE shall only be responsible for its pro
rata share of any patent prosecution expenses and fees incurred
after the license becomes non-exclusive and (b) any person
becoming a licensee thereafter will be required to pay a pro rata
share of such expenses and fees and LICENSEE shall be entitled to
the excess if any of any expenses and fees paid over its pro rata
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portion assuming that the new licensee had become a licensee at
the time that the license became non-exclusive.
7.04 LICENSOR shall apply for, seek prompt issuance of, and
maintain during the term of this LICENSE AGREEMENT the LICENSED
PATENTS in the United States. LICENSOR will consult with LICENSEE
before seeking any foreign patent protection. If LICENSEE wants
LICENSOR to seek such protection, LICENSOR shall apply for that
protection and LICENSEE shall reimburse LICENSOR for all
reasonable fees and costs as provided. The prosecution, filing
and maintenance of all patents and applications comprising the
LICENSED PATENTS shall be the primary responsibility of LICENSOR.
LICENSOR shall keep LICENSEE fully informed concerning LICENSED
PATENTS, and shall promptly provide to LICENSEE copies of all
correspondence relating to LICENSED PATENTS from the patent
offices in those countries in which patents are filed as well as
copies of all responses thereto. So long as LICENSEE timely
provides comments to LICENSOR concerning the preparation of
responses to Office Actions, LICENSOR's counsel shall give due
consideration to such comments. If LICENSEE does not want to
support the filing, prosecution, or maintenance of any patent
application or patent in a country, LICENSOR may do so, in which
case LICENSEE's rights and obligations to such patent or patent
application in such country shall terminate.
VIII. DISCLAIMER OF WARRANTIES, INDEMNITY AND INSURANCE
8.00 NOTHING IN THIS LICENSE AGREEMENT SHALL BE DEEMED TO BE
A REPRESENTATION OR WARRANTY BY LICENSOR OF THE VALIDITY OF ANY OF
THE LICENSED PATENTS OR TECHNICAL INFORMATION.
LICENSEE will indemnify and hold LICENSOR harmless against
any and all actions, suits, claims, demands, prosecutions, costs
and expenses (including actual reasonable attorneys' fees) based
on or arising out of this LICENSE AGREEMENT, including, without
limitation, the manufacture, packaging, use, sale, rental or lease
of LICENSED PRODUCTS, even if altered or used for a purpose not
intended, or the use of LICENSED PATENTS or TECHNICAL INFORMATION
by LICENSEE, its AFFILIATES, its SUBLICENSEES or its (or their)
customers and any representation made or warranty given by
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LICENSEE, its AFFILIATES or SUBLICENSEES with respect to LICENSED
PRODUCTS or LICENSED TECHNOLOGY.
LICENSEE shall maintain, during the term of this LICENSE
AGREEMENT, comprehensive general liability insurance, including
products liability insurance, with reputable and financially
secure insurance carriers reasonably acceptable to LICENSOR, to
cover the activities of LICENSEE, its AFFILIATES and its
SUBLICENSEES, for minimum limits of [***]
combined single limit for bodily injury and property damage per
occurrence and in the aggregate. Such insurance shall include LICENSOR,
its trustees, directors, officers, employees, and agents as additional
insureds. Prior to any administration of a LICENSED PRODUCT to a
human being, LICENSEE shall furnish to LICENSOR a certificate of
insurance evidencing such coverage, with thirty (30) days' written
notice to LICENSOR of cancellation or material change.
The insurance required of LICENSOR under this Article VIII
shall be primary coverage; any insurance LICENSOR may purchase
shall be excess and noncontributory. The insurance required of
LICENSEE shall at all times comply with all statutory workers'
compensation and employers' liability requirements covering its
employees with respect to activities performed under this LICENSEE
AGREEMENT.
8.01 Compliance with Governmental Obligations.
a) LICENSEE, AFFILIATES and SUBLICENSEES shall comply upon
reasonable notice from LICENSOR with all governmental
requests directed to either LICENSOR or LICENSEE and provide
all information and assistance necessary to comply with the
governmental requests.
b) LICENSEE shall insure that research, development, and
marketing under this LICENSE AGREEMENT will comply with all
government regulations in force and effect including, but not
limited to, Federal, state and municipal legislation.
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IX. TERMINATION
9.00 This LICENSE AGREEMENT shall terminate upon the
expiration of the last to expire of the LICENSED PATENTS included
herein, or upon the abandonment of the last to be abandoned of any
patent applications included herein, or 15 years from the date of
FIRST COMMERCIAL SALE, whichever is later, unless the LICENSE
AGREEMENT is sooner terminated. Following termination of this
LICENSE AGREEMENT pursuant to this paragraph, LICENSEE shall have
the right to manufacture, have manufactured, use, sell, have sold,
and develop LICENSED PRODUCTS without further obligations to
LICENSOR.
9.01 LICENSEE may terminate this LICENSE AGREEMENT at any
time upon ninety (90) days' written notice in advance to LICENSOR.
If LICENSOR is not in material breach of the LICENSE AGREEMENT at
the time of termination, then all of the rights, but not the then
accrued liabilities of LICENSEE, its AFFILIATES and SUBLICENSEES,
under the LICENSED TECHNOLOGY shall revert and belong to LICENSOR.
If LICENSEE is not in material breach of the LICENSE AGREEMENT at
the time of termination, then LICENSEE shall have the right for
one year thereafter to dispose of all LICENSED PRODUCTS then in
its inventory, and shall pay royalties thereon, in accordance with
the provisions of this LICENSE AGREEMENT, as though this LICENSE
AGREEMENT had not terminated.
9.02 If either party shall be in default of any obligation
hereunder, or shall be adjudged bankrupt, or become insolvent, or
make an assignment for the benefit of creditors, or be placed in
the hands of a receiver or a trustee in bankruptcy, the other
party may terminate this LICENSE AGREEMENT by giving sixty (60)
days' notice by Registered Mail to the other party, specifying the
basis for termination. If within sixty (60) days after the
receipt of such notice, the party receiving notice shall remedy
the condition forming the basis for termination, such notice shall
cease to be operative, and this LICENSE AGREEMENT shall continue
in full force.
9.03 The word "termination" and cognate words, such as
"term" and "terminate," used in this Article IX and elsewhere in
this LICENSE AGREEMENT are to be read, except where the contrary
is specifically indicated, as omitting from their effect the
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following rights and obligations, all of which survive any
termination to the degree necessary to permit their complete
fulfillment or discharge:
a) LICENSEE's obligation to supply a terminal report as
specified in paragraph 7.02 of this LICENSE AGREEMENT.
b) LICENSOR's right to receive or recover and
LICENSEE'S obligation to pay royalties (including minimum
royalties) accrued or accruable for payment at the time of
any termination.
c) LICENSEE's obligation to maintain records under
paragraph 11.00 of this LICENSE AGREEMENT.
d) Licenses, releases, and agreements of nonassertion
running in favor of customers or transferees of LICENSEE in
respect to products sold or transferred by LICENSEE prior to
any termination and on which royalties shall have been paid
as provided in paragraph 4.01 of this LICENSE AGREEMENT.
e) Any cause of action or claim of either party accrued
or to accrue, because of any breach or default by the other
party.
f) The representation and disclaimer of warranties and
indemnification obligations of paragraph 8.00.
g) The confidentiality obligations under paragraph
5.01.
9.04 In the event LICENSEE is permanently enjoined from
exercising its license rights granted hereunder pursuant to an
infringement action brought by a third party, or if both LICENSEE
and LICENSOR elect not to undertake the defense or settlement of
such a claim of alleged infringement for a period of six months
from notice of such claim or suit, then LICENSEE shall have the
right to terminate this LICENSE AGREEMENT with respect to the
infringing patent claims following thirty (30) days' written
notice to LICENSOR.
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X. LITIGATION
10.00 Each party shall notify the other party in writing of
any suspected infringements of or by the LICENSED PATENTS in the
LICENSED TERRITORY and shall inform the other party of any
evidence of such infringements.
10.01 INFRINGEMENT OF LICENSED PATENTS DURING EXCLUSIVE
PERIOD. So long as this LICENSE AGREEMENT remains exclusive the
LICENSEE shall have the first right to defend the LICENSED PATENTS
against infringement or interference by other parties in whole or
in part in the LICENSED FIELD in any country in which a LICENSED
PATENT is in effect hereunder, including by bringing any legal
action for infringement or defending any counterclaim of
invalidity or action of a third party for declaratory judgment of
non-infringement or interference. LICENSOR agrees to join as a
party plaintiff in any such lawsuit initiated by LICENSEE and to
cooperate with LICENSEE in LICENSEE's prosecution, if requested by
LICENSEE, with all reasonable costs, attorney fees, and expenses
to be paid by LICENSEE. However, if LICENSEE does not institute
suit for infringements within ninety (90) days of receipt of
written notice from LICENSOR of LICENSOR's desire to bring suit
for infringement in its own name and on its own behalf, then
LICENSOR may, at its own expense, bring suit or take any other
appropriate action. In the event that LICENSEE shall undertake
the enforcement of the LICENSED PATENTS by litigation, LICENSEE
may withhold [***]
of the payments otherwise thereafter due LICENSOR and apply the
same toward reimbursement of up to half of LICENSEE's expenses,
including reasonable attorneys' fees, in connection therewith.
Any recovery of damages by LICENSEE for each such suit shall be
applied first in satisfaction of any unreimbursed expenses and
legal fees of LICENSEE relating to such suit, and next toward
reimbursement of LICENSOR for any payments past due or withheld
and applied pursuant to this paragraph. The balance remaining
from any such recovery shall be retained by LICENSEE.
10.02 INFRINGEMENT OF LICENSED PATENTS DURING NON-EXCLUSIVE
PERIOD. If this LICENSE AGREEMENT is nonexclusive at the time of
infringements, the sole right to institute suit for infringement
and to recover damages shall rest with LICENSOR.
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10.03 LICENSEE shall be entitled to any recovery of damages
resulting from a lawsuit brought by it pursuant to paragraph
10.01. LICENSOR shall be entitled to recovery of damages resulting
from any lawsuit brought by LICENSOR to enforce any LICENSED
PATENT, pursuant to paragraph 10.01 or 10.02.
10.04 Neither party may settle with any infringer without the
prior approval of the other party if such settlement would affect
the rights of the other party under the LICENSED PATENTS.
10.05 INFRINGEMENT BY LICENSED PATENTS. Each party shall
promptly notify the other in writing in the event that a third
party shall bring a claim of infringement against LICENSOR or
LICENSEE, either in the United States or in any foreign country in
which there is a LICENSED PATENT. So long as this LICENSE
AGREEMENT is exclusive, LICENSEE in its own name and at its sole
expense shall have the first right to defend the LICENSED PATENTS
and may compromise, settle or otherwise pursue such defense in
such a manner and on such terms as LICENSEE shall see fit. In the
event that LICENSEE shall undertake such defense, LICENSEE may
withhold [***]
of the payments otherwise thereafter due LICENSOR and apply
the same toward reimbursement of LICENSEE's expenses, including
reasonable attorneys' fees, in connection therewith. Any
recovery of damages by LICENSEE for each such suit shall be
applied first in satisfaction of any unreimbursed expenses and
legal fees of LICENSEE relating to such suit, and next toward
reimbursement of LICENSOR for any payments past due or withheld
and applied pursuant to this paragraph. The balance remaining
from any such recovery shall be retained by LICENSEE.
XI. RECORDS
11.00 LICENSEE shall keep accurate records of all operations
affecting payments hereunder, and shall permit LICENSOR or its
duly authorized agent to inspect all such records and to make
copies of or extracts from such records during regular business
hours throughout the term of this LICENSE AGREEMENT and for a
reasonable period of not less than three (3) years thereafter.
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XII. NONASSIGNABILITY
12.00 The parties agree this LICENSE AGREEMENT imposes
personal obligations on LICENSEE. LICENSEE shall not assign any
rights under this LICENSE AGREEMENT not specifically transferable
by its terms (other than to an AFFILIATE or in connection with a
MAJOR CORPORATE TRANSACTION) without the written consent of
LICENSOR, which shall not be unreasonably withheld, delayed or
conditioned. LICENSOR may assign its rights hereunder but not to
a competitor of LICENSEE.
XIII. SEVERABILITY
13.00 The parties agree that if any part, term, or provision
of this LICENSE AGREEMENT shall be found illegal or in conflict
with any valid controlling law, the validity of the remaining
provisions shall not be affected thereby.
XIV. NONUSE OF LICENSOR'S NAME AND LICENSOR EMPLOYEES AS
CONSULTANTS, BOARD MEMBERS OR EMPLOYEES
14.00 In publicizing anything made, used, or sold under this
LICENSE AGREEMENT, LICENSEE shall not use the name of LICENSOR or
otherwise refer to any organization related to LICENSOR, except
with the written approval of LICENSOR and except that LICENSEE may
make statements to the effect that (a) it is licensed by LICENSOR
under the LICENSED PATENTS and (b) [***]
LICENSOR shall respond to any such LICENSEE's request to use
LICENSOR's name or otherwise refer to any organization related to
LICENSOR within fourteen (14) days after receiving LICENSEE's request.
14.01 Neither LICENSEE, its AFFILIATES nor its SUBLICENSEES
shall hire as consultants, board members or employees any
individual who is at the same time also an employee of LICENSOR or
its AFFILIATES without first obtaining LICENSOR's prior written
consent to such hiring agreement.[***]
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XV. WAIVER, INTEGRATION ALTERATION
15.00 The waiver of a breach hereunder may be effected only
by a writing signed by the waiving party and shall not constitute
a waiver of any other breach.
15.01 This LICENSE AGREEMENT represents the entire
understanding between the parties, and supersedes all other
agreements, express or implied, between the parties concerning
LICENSED PATENTS and TECHNICAL INFORMATION.
15.02 A provision of this LICENSE AGREEMENT may be altered
only by a writing signed by both parties, except as provided in
paragraph 13.00 above.
XVI. MARKING
16.00 LICENSEE shall place in a conspicuous location on
LICENSED PRODUCTS that would infringe LICENSED PATENTS but for
this LICENSE AGREEMENT, a patent notice in accordance with 35
U.S.C. Section 282. LICENSEE agrees to mark any products made
using a process covered by any LICENSED PATENT with the number of
each such patent and, with respect to such LICENSED PATENTS, to
respond to any request for disclosure under 35 U.S.C. Section
287(b)(4)(B) by only notifying LICENSOR of the request for
disclosure.
XVII. APPLICABLE LAW
17.00 This LICENSE AGREEMENT shall be construed in accordance
with the substantive laws of the State of New York of the United
States of America.
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XVIII. EXPORTATION OF TECHNICAL INFORMATION
18.00 LICENSEE agrees to comply with the laws and rules of
the GOVERNMENT regarding prohibition of exportation of TECHNICAL
INFORMATION furnished to LICENSEE either directly or indirectly by
LICENSOR.
XIX. NOTICES UNDER THE LICENSE AGREEMENT
19.00 For the purpose of all written communications and
notices between the parties, their addresses shall be:
LICENSOR: Mr. James S. Quirk
Senior Vice President
Research Resources Management
Sloan-Kettering Institute for Cancer Research
1275 York Avenue
New York, New York 10021
LICENSEE: Paul J. Maddon, M.D., Ph.D.
Chairman, President and CEO
Progenics Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591
or any other addresses of which either party shall notify the
other party in writing.
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IN WITNESS WHEREOF the parties have caused this LICENSE
AGREEMENT to be executed by their duly authorized officers on the
respective dates hereinafter set forth.
LICENSEE
PROGENICS PHARMACEUTICALS, INC.
By: /s/ Paul A. Maddon
-------------------------------------------------------------------------
Title: Chairman and CEO
----------------------------------------------------------------------
Date: November 17, 1994
-----------------------------------------------------------------------
LICENSOR
SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH
By: /s/ Javier S. Furl
-------------------------------------------------------------------------
Title: Senior Vice President
----------------------------------------------------------------------
Date: November 22, 1994
-----------------------------------------------------------------------
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Exhibit A
DEFINITIONS EXHIBIT
Part 1: Additional licensing terms.
E1.01 AFFILIATES means, with respect to a party of this
LICENSE AGREEMENT, any individual or entity which directly or
indirectly controls, is controlled by, or is under common control
with such party. The term "control" means possession, direct or
indirect, of the powers to direct or cause the direction of the
management or policies of a person or ENTITY; whether through
ownership of equity participation, voting securities, or
beneficial interests; by contract; by agreement; or otherwise.
Also, with respect to LICENSOR, AFFILIATES includes Memorial
Hospital for Cancer and Allied Diseases and Memorial Sloan-
Kettering Cancer Center, each a not-for-profit membership
corporation of the State of New York, each having its principal
place of business at 1275 York Avenue, New York, New York 10021.
E1.02 CONFIDENTIAL INFORMATION means the collection of
technical information included in the LICENSED TECHNOLOGY or
technical information of LICENSEE and confidential non-public
information concerning LICENSEE's business plans, strategy and the
like. All information which shall be disclosed in confidence by
the disclosing party to the receiving party, and which affords a
competitive advantage to the disclosing party or its AFFILIATES,
shall be presumed to be CONFIDENTIAL INFORMATION, even though
limited portions of such technical information may be in the
public domain.
The following information shall be excluded from the
definition of CONFIDENTIAL INFORMATION: (a) information which the
receiving party demonstrates was in the receiving party's
possession in written or other tangible form prior to any
disclosure; (b) information which the receiving party demonstrates
was received from a third party without restriction and not in
violation of any duty of nondisclosure on the part of such third
party; (c) information which is independently discovered or
invented by personnel of a party who do not have direct or
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indirect access to the information provided to that party by the
other party, or (d) from the time it becomes so known, any
information which the receiving party demonstrates was generally
known to the trade. Information shall not be considered to be
generally known to the trade if, in order to acquire such
information from publicly available sources, the receiving party
used the disclosing party's CONFIDENTIAL INFORMATION to guide it
in reviewing such sources in order to select therefrom a series of
relatively unconnected information which may be fit together to
match the CONFIDENTIAL INFORMATION first learned from the
disclosing party.
E1.03 DISTRIBUTOR means any person or ENTITY engaged by
LICENSEE, or any agent or representative of LICENSEE, to
distribute any LICENSED PRODUCT(S) either directly or indirectly
through other distributors.
E1.04 END USER means any person licensed or otherwise
authorized to USE LICENSED PRODUCT(S) for his/her own personal
use, or any ENTITY licensed to USE LICENSED PRODUCT(S) in the
regular conduct of its own business and not for licensing to other
entities or individuals.
E1.05 ENTITY means a corporation, an association, a joint
venture, a partnership, a trust, a business, an individual, a
government or political subdivision thereof, including an agency,
or other organization which can exercise independent legal
standing.
E1.06 FIRST COMMERCIAL SALE means the date that the LICENSED
PRODUCT(S) are first sold, marketed or publicly made available.
LICENSED PRODUCT(S) distributed or used for clinical trials or
experimental purposes only shall not be considered marketed or
made available and shall not establish the FIRST COMMERCIAL SALE.
E1.07 GOVERNMENT means the Federal Government of the United
States of America.
E1.08 MAJOR CORPORATE TRANSACTION means (a) the sale of all
or substantially all of the business to which the licenses granted
under this LICENSE AGREEMENT relate or (b) the merger of the
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LICENSEE with or into or the consolidation of the LICENSEE with
another ENTITY.
[***]
E1.010 SUBLICENSEE means any ENTITY, not an AFFILIATE of
LICENSEE, which is licensed by LICENSEE, pursuant to this
authority granted in this LICENSE AGREEMENT, which has rights to
LICENSED TECHNOLOGY beyond those rights commonly granted to an END
USER.
E1.011 USE means any form of practice or utilization of the
LICENSED TECHNOLOGY, or any portion thereof.
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Part 2: Technical Terms.
[***]
[***]
E2.03 FDA means the Food and Drug Administration of the
GOVERNMENT.
[***]
E2.06 GMP means good manufacturing practices as defined by
the FDA of the GOVERNMENT.
[***]
E2.08 NDA means New Drug Application as defined by the FDA of
the GOVERNMENT.
[***]
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Exhibit 10.14
CLINICAL TRIAL AGREEMENT
THIS AGREEMENT is made and entered into as of the 12th day of December,
1994 (hereinafter "Effective Date") by and between
SLOAN-KETTERING INSTITUTE FOR CANCER RESEARCH and its affiliate,
MEMORIAL HOSPITAL FOR CANCER AND ALLIED DISEASES, both having a principal
place of business at 1275 York Avenue, New York, New York 10021, membership
corporations of the State of New York (hereinafter "SKI/MEMORIAL") and
ACTIVE BIOTHERAPIES, INC., a corporation of the State of Delaware
having its principal place of business at 777 Old Saw Mill River Road,
Tarrytown, New York 10591, (hereinafter "ABI").
WITNESSETH
WHEREAS, SKI/MEMORIAL has established and maintains a Clinical
Immunology Service, a Division of Hematologic Oncology, in the Department of
Medicine and has acquired expertise in conducting research investigations,
clinical trials and laboratory test evaluations; and
WHEREAS, ABI conducts business in the development, manufacture and sale
of therapeutic products; and
WHEREAS, ABI desires SKI/MEMORIAL to conduct a clinical trial to
determine the safety and efficacy of GM2 covalently attached to KLH plus the
immunological adjuvant QS-21 in patients with melanoma (hereinafter "GM2-KLH
conjugate"), said trial entitled
VACCINATION OF MELANOMA PATIENTS WITH GM2 COVALENTLY ATTACHED TO KLH
(GM2-KLH) PLUS THE IMMUNOLOGICAL ADJUVANT QS-21: TRIAL COMPARING DOSES OF
GM2-KLH
(hereinafter the "Study").
NOW, THEREFORE intending to be legally bound and upon the terms,
conditions and covenants hereinafter set forth, SKI/MEMORIAL and ABI agree as
follows:
ARTICLE I - THE STUDY
1.1 The Study under this Agreement will be conducted under the protocol
approved by SKI/MEMORIAL's Human Subject Institutional Review Board
(hereinafter "IRB"), based on the protocol annexed hereto as Exhibit A
(hereinafter "Protocol"). SKI/MEMORIAL shall submit the Protocol for approval
to the IRB. ABI shall supply Study drug after ABI has:
1
<PAGE>
a. received a mutually executed copy of this Agreement;
b. received documentation from the Office of Industrial Affairs that
SKI/MEMORIAL's IRB has approved the Protocol;
Promptly after SKI/MEMORIAL's IRB has approved the final Protocol, the
Principal Investigator shall forward a copy to the Office of Industrial
Affairs, and the Office of Industrial Affairs shall forward a copy to ABI.
The Principal Investigator shall also forward to the Office of Industrial
Affairs any subsequent change to the Protocol, and the Office of Industrial
Affairs shall forward the change to ABI.
1.2 As part of this Agreement, SKI/MEMORIAL shall appoint Dr. Paul B.
Chapman and/or such other physicians as it may deem appropriate as
investigators (hereinafter "Investigators") to oversee the Study. If Dr.
Chapman should become unable to complete the Study, SKI/MEMORIAL shall
consult with ABI regarding the appointment of a new principal investigator.
SKI/MEMORIAL will negotiate in good faith to select a new principal
investigator so that the Study can continue.
1.3 The Investigators on behalf of SKI/MEMORIAL shall prepare and
maintain records and case histories with all pertinent data documented as
required by the Protocol on case report forms supplied by ABI. All patient
data shall be kept confidential. Information provided to ABI shall not
disclose patient names, except to the extent that the patient consent form
permits.
1.4 The Investigators shall also immediately notify ABI of any adverse
reaction in the course of the Study of which they become aware.
1.5 All applicable government laws, rules, regulations and guidelines,
including those of the United States Food and Drug Administration
(hereinafter the "FDA"), shall be adhered to by SKI/MEMORIAL and ABI in the
performance and documentation of the Study.
1.6 ABI shall provide SKI/MEMORIAL with any investigational protocols,
pre-clinical or background information which are germane to the Study.
1.7 ABI shall provide, without cost to SKI/MEMORIAL, sufficient
amounts of its GM2-KLH conjugate to SKI/MEMORIAL to conduct the Study.
SKI/MEMORIAL may not use this GM2-KLH conjugate in any way other than as
specified in the Protocol.
2
<PAGE>
1.8 SKI/MEMORIAL shall use reasonable efforts to obtain an
institutional IND for purposes of conducting the Study. At ABI's request any
time in the three years after the Effective Date, SKI/MEMORIAL will assign
the IND to ABI at no additional charge and write a letter to the FDA to
inform them of the assignment of the IND to ABI. ABI shall indemnify
SKI/MEMORIAL for any use ABI makes of the IND after SKI/MEMORIAL has assigned
it to ABI, including attorney fees.
ARTICLE II - SKI/MEMORIAL STAFF AND FACILITIES
2.1 The Study shall be carried out at SKI/MEMORIAL under the
supervision of SKI/MEMORIAL's IRB and the Investigators indicated above.
2.2 SKI/MEMORIAL shall provide the physician, laboratory, statistical,
and clinical support staff levels of effort required to complete the Study.
ARTICLE III- REPORTS
3.1 SKI/MEMORIAL shall keep ABI advised of the status of the Study via
periodic reports. The frequency of such reports shall be mutually agreed to
by both parties. There shall also be a final report of the Study presented to
ABI.
3.2 All reports submitted to ABI shall become the property of ABI and
may be used by ABI without, however, making any reference to Memorial
Sloan-Kettering Cancer Center, Memorial Hospital for Cancer and Allied
Diseases or Sloan-Kettering Institute for Cancer Research, unless such
reference appears in a communication with the FDA or as otherwise required by
law. If ABI desires to make reference to any of the foregoing in utilizing
the results of the Study, ABI must first obtain written consent from
SKI/MEMORIAL. SKI/MEMORIAL shall respond to any such ABI's request for
release of information within thirty (30) days after receiving ABI's request.
ARTICLE IV - PUBLICATION
4.1 Notwithstanding anything contained herein to the contrary including
without limitation Articles 5.1 and 9.6, SKI/MEMORIAL may freely publish the
results of its investigative findings hereunder. The authorship and contents
(including scientific conclusions and professional judgments) of any paper
submitted shall be determined by SKI/MEMORIAL. SKI/MEMORIAL shall provide ABI
with a copy of the papers prepared for publication prior to their submission
to a scientific journal or presentation at scientific meetings. ABI shall
have thirty (30) days to review the papers. ABI shall not make any editorial
changes in the papers, but may delete any of its Confidential Information (as
defined below) contained therein. ABI personnel shall be acknowledged with
customary scientific practice.
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ARTICLE V - CONFIDENTIAL INFORMATION
5.1 In order to effectively complete the Study, it may be necessary or
desirable for the parties to disclose proprietary, trade secret and/or other
confidential information (herein "Confidential Information") to one another.
Each party agrees that any such Confidential Information disclosed to it or
to its employees shall be used only in connection with the legitimate
purposes of this Agreement; shall be disclosed only to those who have a need
to know it, and shall be safeguarded with the same care normally afforded
such Confidential Information in the possession, custody or control of the
party receiving the Confidential Information provided, however, that the
disclosing party specifies in writing the nature and identity of the
Confidential Information and the manner and time of disclosure. The foregoing
shall not apply when, after and to the extent the Confidential Information
disclosed becomes generally available to the public through no fault of the
receiving party, was already known to the receiving party at the time of
disclosure as evidenced by written records in the possession of the receiving
party prior to such time, or is subsequently received by the receiving party
in good faith from a third party without breaching any confidential
obligation between the third party and the disclosing party.
ARTICLE VI - COMPENSATION
[***]
6.2 SKI/MEMORIAL shall discuss, if ABI so requests, budgetary matters
with ABI, but reserves the right to be the final control on budgetary
categories and expenditures. SKI/MEMORIAL shall not be obligated to provide
expenditure reports, or to submit to audits by ABI.
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6.3 The checks shall be made payable to SLOAN-KETTERING INSTITUTE FOR
CANCER RESEARCH (Sloan-Kettering Institute Tax I.D. No. 13-1624182) and shall
be forwarded to:
Memorial Sloan-Kettering Cancer Center
Office of Industrial Affairs
1275 York Avenue
New York, New York 10021
ABI should note on its check stub or in its transmittal letter that the
payment relates to a Clinical Trial Agreement, SK#1267, under the direction
of Dr. Paul B. Chapman.
ARTICLE VII - INDEPENDENT CONTRACTOR
7.1 Both parties shall, at all times during the performance of this
Agreement, remain as independent contractors and the Agreement shall not make
the parties partners, joint venturers, or agents of one another. No party to
this Agreement shall have the power to bind or obligate the other party.
ARTICLE VIII - TERM AND TERMINATION
8.1 This Agreement shall commence on the Effective Date of this
Agreement and shall continue until completion as provided in the Protocol,
which is estimated at about twelve (12) months from the date hereof.
8.2 This Agreement can be terminated by either SKI/MEMORIAL or ABI
with or without cause upon thirty (30) days prior written notice without
penalty to either party.
[***]
8.4 If ABI terminates the Agreement prior to completion of the Study,
ABI shall, if permitted by law and requested by SKI/MEMORIAL, supply
SKI/MEMORIAL, free of charge, with sufficient GM2-KLH conjugate to allow
SKI/MEMORIAL to complete the treatment of those patients participating in the
Study on the date of SKI/MEMORIAL's receipt of ABI's termination notice.
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<PAGE>
8.5 Sections 3.2, 4.1, 5.1, 8.3, 8.4, 8.5, 9.1, 9.6 and 9.7 shall all
survive the termination of this Agreement.
ARTICLE IX - GENERAL
9.1 ABI shall indemnify, defend and hold SKI/MEMORIAL, and its
affiliate corporation, Memorial Sloan-Kettering Cancer Center harmless from
and against all claims, causes of action, suits, damages and costs arising
out of, resulting from, or otherwise in respect of, the manufacture, sale
and/or use of GM2-KLH conjugate except where such claims, causes of action,
suits, damages and costs are the result of negligence on behalf of
SKI/MEMORIAL, its staff or agents. ABI shall have no obligation to indemnify,
defend or hold SKI/MEMORIAL harmless against liability, loss or damage
arising from a failure by SKI/MEMORIAL, its staff or agents to; (i) comply
with any applicable FDA or other governmental requirement or; (ii) adhere to
the terms of the Protocol.
SKI/MEMORIAL shall indemnify, defend and hold ABI harmless from and
against all claims, causes of action, suits, damages and costs arising out
of, resulting from, or otherwise in respect of, the manufacture, sale and/or
use of GM2-KLH conjugate except where such claims, causes of action, suits,
damages and costs are the result of negligence on behalf of ABI, its staff or
agents. SKI/MEMORIAL shall have no obligation to indemnify, defend or hold
ABI harmless against liability, loss or damage arising from a failure by ABI,
its staff or agents to; (i) comply with any applicable FDA or other
governmental requirement or; (ii) adhere to the terms of the Protocol.
9.2 No right or license is granted under this Agreement by either
party to the other either expressly or by implication, except those
specifically set forth herein.
9.3 Nothing contained within this Agreement shall impose an obligation
of exclusivity on one party by the other. Both parties reserve the right to
enter into and participate in other activities (either alone or with a third
party) including, but not limited to, clinical trials and sponsored research
projects.
9.4 All matters affecting the interpretation, validity and performance
of this Agreement shall be governed by the laws of the State of New York
applicable to agreements made and to be performed wholly within the State of
New York. This Agreement, including the Protocol, sets forth the entire
understanding between the parties
6
<PAGE>
herein, and cannot be changed or amended except by written agreement executed
by the parties. In the event of any inconsistency in this Agreement, the
inconsistency shall be resolved by giving precedence first, to the Articles
of this Agreement, and then, to the Protocol. This Agreement may not be
assigned by either party without the prior written consent of the other party.
9.5 All notices to be given by either party to the other shall be made
in writing by hand delivery or by registered or certified mail, return
receipt requested and addressed to the parties at the following addresses
respectively:
Sloan-Kettering Institute for Cancer Research
1275 York Avenue
New York, New York 10021
(Attention: Director, Office of Industrial Affairs)
(Copy: James S. Quirk, Senior Vice President)
Active Biotherapies, Inc.
777 Old Saw Mill River Road
Tarrytown, New York 10591
(Attention: Paul J. Madddon, M.D., Ph.D.
President and CEO)
Any notice shall be effective as of its date of receipt.
9.6 Except as set forth in articles 5.1 and 4.1, as required by law
and/or as may be required in order to maintain a party's status as an exempt
organization under Section 501(c) (3) of the Internal Revenue Code and
regulations thereunder, neither SKI/MEMORIAL nor ABI shall release any
information, publicity, news releases or other public announcement, written
or oral, with regard to the Agreement or any amendment thereto or to
performance hereunder, to newspapers or any other mass communication media
without the prior written approval of the other party. SKI/MEMORIAL shall
respond to any such ABI's request for release of information within thirty
(30) days after receiving ABI's request. ABI shall not use the name of
Memorial Sloan-Kettering Cancer Center, Memorial Hospital for Cancer and
Allied Diseases or Sloan-Kettering Institute for Cancer Research, or a
variant of any of the foregoing in any advertising, packaging or other
promotional material in connection with the GM2-KLH conjugate except as may
be required by law.
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<PAGE>
IN WITNESS THEREOF, SKI/MEMORIAL and ABI have caused this Agreement to
be executed in duplicate by their respective duly authorized officers.
ACTIVE BIOTHERAPIES, INC. SLOAN-KETTERING INSTITUTE
FOR CANCER RESEARCH, AND
By: /s/ Paul J. Maddon MEMORIAL HOSPITAL FOR AND
--------------------------- ALLIED DISEASES
Paul J. Maddon, M.D., Ph.D.
President and CEO
Date: Dec. 23, 1994 By: /s/ James S. Quirk
---------- -------------------------------
James S. Quirk
Senior Vice President
Research Resources Management
Date: Dec. 12, 1994
-------
By: /s/ Paul B. Chapman
-------------------------------
Paul B. Chapman, M.D.
Principal Investigator
Date: Dec 4, 1994
-------
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Exhibit 10.15
LICENSE AND SUPPLY AGREEMENT
This license and supply agreement is entered into as of August 31 ,
1995 (the "Effective Date") between Cambridge Biotech Corporation, debtor and
debtor in possession, Case No. 94-43054-JFQ, United States Bankruptcy Court
for the District of Massachusetts, Western Division, a Delaware corporation,
having offices at 365 Plantation Street, Worcester, Massachusetts 01605, and
Progenics Pharmaceuticals, Inc., a Delaware corporation having offices at 777
Old Saw Mill River Road, Tarrytown, New York 10591 (each singularly a "Party"
and collectively the "Parties") with reference to the following:
RECITALS
WHEREAS, CBC is performing research and development in the field of
purified saponin extracts from the tree Quillaja saponaria, production
processes therefor and uses thereof as an immune adjuvant; and
WHEREAS, Progenics is performing research and development in the field
of vaccines for human cancers and is interested in licensing CBC's rights to
such purified saponin extracts for use as an immune adjuvant with such
vaccines;
THEREFORE, the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following meanings for
purposes of this Agreement:
1.1 "ACTIVE DEVELOPMENT EFFORT" is defined in Section 5.1.
1.2 [***]
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1.3 "ADJUVANT REQUIREMENTS" means the amount of Adjuvant in bulk
which Progenics and its sublicensees may require pursuant to the
provisions hereof for all research and development, pre-clinical
and human clinical testing of Licensed Products and, after
Commercial Introduction, production of Licensed Products for
commercial sales.
1.4 "AFFILIATE" means any corporation, firm, partnership or other
entity, whether de jure or de facto, which directly or indirectly
owns, is owned by, or is under common ownership with a party to
this Agreement to the extent of at least fifty percent (50%) of
the equity (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular
jurisdiction) having the power to vote on or direct the affairs
of the entity and any person, firm, partnership, corporation or
other entity actually controlled by, controlling, or under common
control with a party to this Agreement.
1.5 "AGREEMENT" means this License and Supply Agreement, including
any exhibits, schedules or other attachments thereto, as any of the
foregoing may be validly amended from time to time.
1.6 "CBC" means Cambridge Biotech Corporation, a Delaware corporation,
its Affiliates, and its successors and permitted assigns.
1.7 "cGLPs" means the current Good Laboratory Practices for Finished
Pharmaceuticals pursuant to 21 C.F.R. 58 et seq., as amended from
time to time.
1.8 "cGMPs" means the current Good Manufacturing Practices for
Finished Pharmaceuticals pursuant to 21 C.F.R. 210 et seq., as
amended from time to time.
1.9 "COMMERCIAL INTRODUCTION" means on a country-by-country basis the
date of first commercial sale (other than for purposes of
obtaining regulatory approval) of a Licensed Product by Progenics
or its sublicensees in such country.
1.10 "EFFECTIVE DATE" is defined in the introductory paragraph.
[***]
1.12 "FULLY BURDENED MANUFACTURING COST" means the actual cost of
Manufacture by CBC of the Adjuvant under a Manufacturing Process in
compliance with cGMPs, if applicable, which actual cost shall be
comprised of the cost of goods produced as determined in
accordance with United States generally accepted accounting
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principles, and shall include direct labor, direct material and
allocable manufacturing overhead but shall exclude selling,
general and administrative, research and development and interest
expenses; Fully-Burdened Manufacturing Cost shall include, to the
extent applicable, the cost to CBC of having some portion or all
of the Manufacturing Process performed by a third party.
[***]
[***]
1.15 "KNOWHOW" means materials, data, results, formulae, designs,
specifications, methods, processes, improvements, techniques,
ideas, discoveries, technical information, process information,
clinical information and any other information, whether or not
any of the foregoing is patentable, known to and which is
confidential (in accordance with Section 9.1 hereof) and
proprietary to CBC now or hereafter during the Term, to the extent
that any of the foregoing relates to any Licensed Patent Rights or
the development, manufacture, use or sale of Adjuvant in connection
with the development, manufacture, use or sale of any Licensed
Product; provided however, that the term "Knowhow" shall not include
any of the foregoing that is subject to proprietary rights of third
parties.
1.16 "LICENSED PATENT RIGHTS" means any and all patent applications
and patents (including inventor's certificates and utility models)
throughout the world, including any substitutions, extensions,
reissues, reexaminations, renewals, divisions, continuations and
continuation-in-parts of the foregoing, which CBC now or hereafter
during the Term owns or controls (solely or jointly) or under which
CBC has the right to grant sublicenses (regardless of any royalty or
other payments to a third party required of CBC), to the extent that
any of the foregoing covers, in whole or in part, the development,
manufacture, use or sale of Adjuvant in connection with the
development, manufacture, use or sale of any Licensed Product.
"Licensed Patent Rights" shall include, without limitation,
the patent listed on Exhibit "A" attached and incorporated into
this Agreement.
1.17 "LICENSED PRODUCT" means any vaccine or vaccines formulated using
Licensed Patent Rights or Knowhow in the Field of Use.
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1.18 "LICENSED TERRITORY" means the world.
1.19 "MANUFACTURE" OR "MANUFACTURING PROCESS" means the aseptic
storage, handling, production, processing and packaging of
Adjuvant in accordance with this Agreement.
[***]
1.21 "OPTION" is defined in Section 3.2.
1.22 "PARTY" AND "PARTIES" are defined in the introductory paragraph.
1.23 "PLA-ENABLING HUMAN CLINICAL TRIAL" means as to a specific
Licensed Product, a controlled and lawful study of the efficacy
of such Licensed Product by administration of such Licensed
Product to human beings where the principal purpose of such trial
is to provide statistically significant efficacy data to serve as
pivotal support for an application to the United States Food
and Drug Administration for approval of a Licensed Product for the
indication being investigated by the trial.
1.24 "PROGENICS" means Progenics Pharmaceuticals, Inc., a Delaware
corporation, its Affiliates and its permitted successors and
assigns.
1.25 "PROGENICS SHARES" is defined in Section 3.2.
1.26 "SPECIFICATIONS" is defined in Section 8.3(a).
1.27 "TERM" is defined in Section 10.1.
1.28 "VALID CLAIM" means a claim in an issued, unexpired patent in the
Licensed Patent Rights, which has not been held invalid,
unpatentable or unenforceable in an unappealed or unappealable
decision of a court or other governmental body of
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competent jurisdiction, which has not been rendered unenforceable
through disclaimer or otherwise, and which has not been lost
through an interference proceeding.
2. LICENSE.
2.1 GRANT OF LICENSE RIGHTS. CBC hereby grants to Progenics a
worldwide license that is exclusive as to all parties [***]
to use
the Knowhow and practice the Licensed Patent Rights to develop,
manufacture, have manufactured, use, sell, and have sold
Licensed Products.
2.2 SUBLICENSES. Progenies shall have the right to grant sublicenses
of its rights under this Agreement with respect to Licensed
Products (but not the Adjuvant alone) (a "Sublicense") only as
follows:
[***]
[***]
(c) Progenics shall promptly notify CBC of the execution of
each sublicensee and shall provide CBC with a copy of same.
2.3 ON-GOING TRANSFER OF KNOWHOW AND LICENSED PATENT RIGHTS.
CBC shall promptly transfer to Progenics existing Knowhow
and Licensed Patent Rights for purposes of Progenics'
research and development (including but not limited to
pre-clinical trials and human clinical trials but excluding
Knowhow relating to the Manufacture of the Adjuvant) with
respect to Licensed Products. On an on-going basis during
the Term, CBC shall identify and disclose to Progenics in
writing any and all Knowhow (exclusive of Knowhow relating
to the Manufacturing the Adjuvant) then existent, whether or
not potentially patentable, and any and all Licensed Patent Rights
then existent.
3. SCHEDULE OF PAYMENTS TO CBC.
3.1 [***]
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[***]
3.2 RESTRICTED SHARES. As additional consideration for the rights
granted hereunder, Progenics shall issue to CBC simultaneously
with the execution of this agreement sixty thousand (60,000)
shares of Progenics' common stock (the "Progenics Shares). Each
of the Progenics Shares shall be subject to the restriction (the
"Transfer Restriction") that no holder of such share shall sell,
assign or transfer (collectively a "Transfer") a Progenics Share
during the period of time that the Transfer Restriction is in force
and effect as to such share. Upon the occurrence of certain
milestone events, as set forth below, the Transfer Restriction
shall lapse as to the number of Progenics Shares which remain
restricted set forth opposite the respective milestone.
MILESTONE NUMBER OF PROGENICS SHARES AS
TO WHICH RESTRICTION LAPSES
[***]
Total [***]
Progenics shall promptly give CBC notice of the occurrence of
each milestone. Notwithstanding the foregoing, a holder of
Progenics Shares may Transfer all (but not less than all) of the
Progenics Shares which are subject to the Transfer Restriction to
a transferee of all or substantially all of the business division to
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which this license pertains or to such holder's legal successor
upon a merger, reorganization, consolidation, dissolution or
liquidation of such holder. In the event that the license
hereunder shall terminate pursuant to the provisions of either
Section 5.1 or Section 10, then CBC (or its permitted transferee or
successor pursuant to the next preceeding sentence) shall reconvey
to Progenics all of the Progenics Shares which on the effective date
of such termination remain subject to the Transfer Restriction.
3.3 ROYALTIES. Subject to the other terms of this agreement,
Progenics shall pay to CBC royalties as follows:
(a) [***] by Progenics of any Licensed Product
covered by a Valid Claim of Licensed Patent Rights,
payable on a country-by-country basis until the expiration
of the last-to-expire of the Valid Claims covering a
Licensed Product in the country of manufacture or sale.
(b) In the event that Progenics should enter into a
Sublicense, CBC will receive [***]
(c) If Licensed Patent Rights existing in a given country are
not sufficient to afford a given Licensed Product
sufficient protection from competition by a vaccine in the
Field of Use manufactured by a third party using an adjuvant
based on Quillaja Saponaria and such third party holds
at least one-third of the market for such vaccine in the
Field of Use in such country, then the royalty rate payable
by Progenics to CBC will be [***]
(d) In any country in which there are no Licensed Patent
Rights, Progenics shall pay to CBC a royalty equal to [***]
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4. ROYALTY PAYMENTS, REPORTS AND RECORDS.
4.1 COMMERCIAL INTRODUCTION. Progenics shall promptly give CBC notice
of the occurrence of Commercial Introduction of each Licensed
Product.
4.2 ROYALTY PAYMENTS.
(a) PAYMENTS; DEDUCTION OF TAXES. After the date of Commercial
Introduction of the first Licensed Product, royalties
under this Agreement on Net Sales of any Licensed Product
for a given calendar quarter will be due and payable from
Progenics to CBC within thirty (30) days after the end of
such calendar quarter. Royalties due under Section 3.3(b)
attributable to sublicense fees shall be payable at the end
of the quarter when such license fees are payable. Progenics
will remit any such royalty payment due to CBC under this
Agreement by check payable to CBC. Any tax paid or required
to be withheld by Progenics on account of royalties
payable to CBC under this Agreement shall be deducted from
the amount of royalties otherwise due. Progenics shall make
any applicable withholding payments due on behalf of CBC
and shall promptly provide CBC with written documentation
of any such taxes withheld and paid by Progenics or its
sublicensees for the benefit of CBC.
(b) FOREIGN CURRENCY CONVERSION. For sales of any Licensed
Product that occur in a currency other than United States
dollars ("foreign currency sales"), the quarterly royalty
payment will be calculated as follows:
(A/B) X C = United States dollars royalty payment on
foreign currency sales, where
A = foreign currency "Net Sales" per quarter
B = foreign exchange conversion rate, expressed in local
currency per United States dollar (using as the applicable
foreign exchange conversion rate the average of the rate
published in the Wall Street Journal or any other mutually
agreed-upon source for the last business day of each of the
three (3) months of the quarter); and
C = the royalty rate applicable to such Net Sales under
Section 3.2.
4.3 ROYALTY REPORTS. After the date of Commercial Introduction of the
first Licensed Product Progenics shall render to CBC, together
with the royalty payment due under Section 4.2 for a given
calendar quarter, a written account for such calendar
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quarter showing (a) total gross sales and Net Sales of Licensed
Products sold by Progenics and its sublicensees, and the total
gross royalty and license fee revenues paid to Progenics by any
sublicensee(s) during such calendar quarter, and (b) a calculation
of the royalty rate and royalties payable under Section 3.3
(including, in the case of foreign currency sales, the total
foreign currency Net Sales during such calendar quarter, the
applicable foreign exchange conversion rate(s) and the total
United States dollar royalty payment amount).
4.4 PROGENICS' RECORDKEEPING AND INSPECTION. After the date of
Commercial Introduction of the first Licensed Product, Progenics
shall keep for at least three (3) years records of all sales of
Licensed Products in sufficient detail to permit CBC to confirm
the accuracy of Progenics' royalty calculations. At the request of
CBC no more frequently than once per year, upon at least five (5)
business days' prior written notice to Progenics from CBC, and at
the expense of CBC (except as otherwise provided below), Progenics
shall permit a nationally recognized, independent, certified
public accountant selected by CBC and acceptable to Progenics to
inspect, during regular business hours, any such Progenics records
for the then-preceding three (3) years solely to the extent
necessary to verify such calculations, provided that such accountant
in advance has entered into a confidentiality agreement with
Progenics (substantially similar to the confidentiality provisions
of this Agreement) limiting the disclosure of such information to
authorized representatives of the Parties. Results of any such
inspection shall be made available to both Parties. If such
inspection reveals a deficiency in the calculation of royalties
resulting in an underpaymeat to CBC by five percent (5%) or more,
Progenics shall pay all costs and expenses of such inspection.
5. DUE DILIGENCE.
5.1 Maintenance of License. In order to maintain the license granted
pursuant to Section 2.1 with respect to a designated Licensed
Product, Progenics agrees to use its best efforts to:
[***]
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[***]
If Progenics shall fail to achieve any of the above objectives
and such failure shall remain unremedied for a period of sixty
(60) days after notice of such failure to Progenics by CBC (the
"Grace Period"), this license shall automatically terminate at
the end of the Grace Period (except with respect to the first
Licensed Product if Progenics has fulfilled the obligations set
forth in subparagraphs (a)-(d) of this section 5.1).
Notwithstanding the foregoing, if such failure is a result of
Progenics not having obtained a third party license necessary
to make, use or sell Licensed Products and reasonable evidence is
submitted by Progenics to CBC that such license can be obtained in a
reasonable period of time, Progenics may request that the Grace
Period be extended for a period of time set forth in the request.
CBC shall not unreasonably withhold its consent to such extension
but in no event shall the Grace Period exceed one year.
CBC shall not unreasonably withhold its consent to any reasonable
revision in the preceding schedule requested in writing by Progenics
and supported by reasonable evidence of technical difficulties or
delays in the clinical studies or regulatory process that could have
not have been reasonably anticipated or avoided, (as for example,
should the clinical studies for the first Licensed Product be
unsuccessful, the parties shall establish a reasonable schedule
for the second Licensed Product). Notwithstanding the foregoing,
CBC shall not have the right to terminate the license for failure
of Progenics to meet a goal if such failure is a result of:
(i) CBC's failure to meet its obligations hereunder, or (ii) an
action brought by a third party claiming that the use of the
Adjuvant in Licensed Products infringed a patent of such
third party.
5.2 PRE-CLINICAL AND CLINICAL PROGRAMS. Subject to the other terms of
this Agreement (including but not limited to Section 8.7), with
respect to all Licensed Products, Progenics or its sublicensees
shall be solely responsible for the conduct of pre-clinical and
human clinical testing, regulatory filings, applications
and approvals, and expenses in connection with all of the foregoing.
In connection with all of the foregoing:
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(a) CBC COOPERATION. CBC shall cooperate with and assist
Progenics in the preparation and filing of information
with respect to the Adjuvant for use in any Investigational
New Drug application, Product License Application or any
other regulatory filings throughout the Licensed Territory
with respect to any Licensed Product. Without limiting the
generality of the foregoing, for purposes of supporting
all pre-clinical and human clinical trials and all
regulatory filings, applications and approvals on the part
of Progenics with respect to any Licensed Product,
CBC hereby agrees that on an on-going basis during the Term:
(i) CBC shall permit Progenics and its sublicensees to
reference CBCs drug master file for the Adjuvant with
the United States Food and Drug Administration; (ii) to the
extent not subject to the proprietary rights of third
parties, CBC shall provide Progenics with all pre-clinical
and clinical data, results and other relevant information
with respect to the Adjuvant (including but not limited to
information regarding the toxicity, safety and stability of
the Adjuvant) that is (A) submitted by CBC in connection with
any Investigational New Drug application or other regulatory
filing with respect to the Adjuvant from time to time during
the Term or (B) otherwise in CBC's possession from time to
time during the Term; and (iii) a CBC representative,
at Progenics' request, shall attend periodic meetings to
discuss the progress of clinical trials of any Licensed
Products. Progenics will reimburse CBC for the foregoing
assistance only (i) for its reasonable out-of-pocket
expenses, including but not limited to travel, and (ii)
CBC's fully burdened costs of performing technical studies
or engaging outside services subject to the prior approval
of Progenics.
(b) ADVERSE EVENTS REPORTING. On an on-going basis during the
Term and for at least ten (10) years after the expiration
or termination of this Agreement, each Party agrees to
provide the other Party with any written information in
its possession which indicates adverse effects in humans
associated with the Adjuvant or any products using the
Adjuvant (including but not limited to Licensed Products).
(c) PROGENICS' REGULATORY REPORTS. Within thirty (30) days of
the Effective Date and on an annual basis thereafter
(commencing with the first anniversary of the Effective
Date), Progenics will provide CBC with (i) a written report
summarizing the regulatory filings, applications and
approvals with respect to any Licensed Product that Progenics
or its sublicensees (a) have made, sought or obtained in the
prior twelve (12)-month period, and (b) reasonably expect
to make, seek or attempt to obtain in the ensuing twelve
(12)- month period following the date of the report,and
(ii) results of clinical trials conducted by Progenics
using QS-21. Any
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and all such reports shall be considered confidential and
proprietary information of Progenics in accordance with
Section 9, provided, however, that CBC may share relevant
safety data with its other QS-21 licensees in a manner
intended not to disclose any other proprietary information of
Progenics.
6. REPRESENTATIONS AND WARRANTIES OF PROGENICS; REGISTRATION RIGHTS.
6.1 Progenics represent and warrants to CBC as follows:
(a) ORGANIZATION, STANDING AND AUTHORITY. Progenics is a
corporation duly organized, validly existing and in good
standing under the laws of the state of Delaware.
Progenics has all requisite corporate power to own and
operate its properties and assets and to carry on its
business as presently being conducted and as proposed to be
conducted. Progenics has, and will have on all relevant
dates, all requisite legal and corporate power to execute
and deliver this Agreement, to issue the Progenics Shares,
and to carry out and perform its obligations under the terms
of this Agreement.
The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have
been duly authorized by all appropriate Progenics
corporate action. The performance by Progenics of any of
the terms and conditions of this Agreement on its part to be
performed does not and will not constitute a breach or
violation of any other agreement or understanding, written
or oral, to which it is a party.
(b) CAPITALIZATION. The authorized capital stock of Progenics
at December 31, 1994 consisted of: (i) 40,000,000 common
shares, par value of $.001 per share, of which 12,000,000
shares have been designated Common Stock, of which
2,999,550 shares are issued and outstanding and 5,000,000
shares have been designated Class A Common Stock, of which
no shares are issued and outstanding; and (ii) 20,000,000
preferred shares, par value $.001 per share, of which
4,000,000 shares have been designated Series A Preferred
Stock, of which 2,308,000 shares are issued and outstanding
and 2,500,000 shares have been designated Series B
Preferred Stock, of which 1,982,830 shares are issued and
outstanding. Progenics has reserved 2,348,313 shares of
Progenics Common stock for stock options outstanding at
December 31, 1994. Progenics has reserved 150,000 shares
of Progenics Common Stock for a warrant outstanding
at December 31, 1994.
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Except as set forth above, there are (i) no share
of capital stock or other voting securities of Progenics
authorized or outstanding, (ii) no subscriptions, options,
conversation or exchange rights, warrants, repurchase or
redemption agreements or other agreements, claims or
commitments of any nature whatsoever obligating Progenics to
issue, transfer, deliver or sell, repurchase or redeem or
cause to be issued, transferred, delivered, sold,
repurchased or redeemed, additional shares of its capital
stock or other securities or obligating Progenics to grant,
extend or enter into any such agreement or commitment: (iii)
no voting trusts or other agreements or understandings with
respect to the voting of the capital stock of Progenics or
agreements or understandings, restrictions on disposition of
the capital stock of Progenics to which Progenics is a party
or is bound or, to the actual knowledge of Progenics, to
which any other party is bound; and (iv) except as set forth
herein, no agreements granting any registration rights
including "piggy-back" rights to any person or entity. All
issued and outstanding shares of common stock have been duly
authorized and validly issued and are fully paid and
nonassessable.
(c) FINANCIAL STATEMENTS. Progenics has delivered to CBC copies
of the following financial statements:
(i) Progenics' audited balance sheet at December 31, 1994,
and its audited statements of operations,
stockholders' equity and cash flows for the year then
ended certified by Coopers & Lybrand LLP.
6.2 REGISTRATION RIGHTS.
(a) INCIDENTAL REGISTRATION. If Progenics at any time proposes
to file a registration statement under the Securities Act
with respect to an offering for its own account or on
behalf of holders of its securities of any class of equity
security (excluding an initial public offering which does
not include securities registered for the account of
so-called "selling shareholders" or a registration
relating solely either to the sale of securities to
employees of Progenics pursuant to a stock purchase, stock
option or similar plan or a merger, recapitalization or
reorganization), Progenics shall promptly give CBC or any
holder of Progenics Shares pursuant to a transfer
permitted under Section 3.2 (collectively a "Holder")
written notice of such registration at least 10 days prior
to the anticipated filing date and such notice shall offer
the Holder the opportunity to register such number of
Progenics Shares as the Holder may request. Upon the
written request of Holder given within 10 days after
receipt of such notice delivered by Progenics, Progenics
shall use its best efforts to cause to be registered
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under the Securities Act all of the Progenics Shares that
Holder has requested to be registered.
(b) UNDERWRITING REQUIREMENTS. In connection with any offering
involving an underwriting of shares herein issued by
Progenics, Progenics shall not be required under
paragraph 6.2(a) to include any of the Progenics Shares in
such underwriting unless Holder accepts the terms of the
underwriting as agreed upon between Progenics and the
underwriters selected by it, and then only in such quantity
as will not, in the written opinion of the underwriters,
jeopardize the success of the offering by Progenics. In
connection with any offering pursuant to paragraph 6.2(a),
if the total amount of shares requested by Holder to be
included in such offering exceeds the amount of securities
sold other than by Progenics that the underwriters reasonably
believe is compatible with the success of the offering, then
Progenics shall be required to include in the offering only
that number of shares that the underwriters believe will not
jeopardize the success of the offering, (the shares so
included to be apportioned pro rata among all stockholders
of Progenics selling in the offering according to the total
amount of shares owned by each such stockholder or in such
other proportions as shall be agreed upon by such
stockholders).
(c) EXPENSES OF REGISTRATION. Progenics shall bear and pay all
expenses incurred in connection with any registration, filing
or qualification of shares with respect to registrations
pursuant to this paragraph 6.2 for Holder, including, without
limitation, all registration, filing, qualification, printing
and accounting fees relating or apportionable thereto, but
excluding underwriting discounts and commissions relating to
shares being registered, applicable transfer taxes and
expenses of counsel to any of the Holders, which shall be
borne by the stockholders selling shares being registered.
(d) PROGENICS WITHDRAWAL OF REGISTRATION. Progenics shall have
no liability to Holder for Progenics' withdrawal of any
registration as to which Holder has registration rights
under the paragraph 6.2 provided such withdrawal is made
in good faith by Progenics and not for the purpose of
impairing any of Holder's rights under this paragraph 6.2.
(e) OBLIGATIONS OF PROGENICS. Whenever required under this
paragraph 6.2 to effect the registration of any shares,
Progenics shall, as expeditiously as reasonably possible:
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(i) prepare and file with the SEC a registration statement
with respect to such shares and use its best efforts
to cause such registration statement to become
effective;
(ii) prepare and file with the SEC such amendments and
supplements to such registration statement and the
prospectus used in connection therewith as may be
necessary to comply with the provisions of the
Securities Act with respect to the disposition of all
securities covered by such registration statement;
(iii) furnish to Holder such number of copies of a
prospectus, including a preliminary prospectus,
in conformity with the requirement of the Securities
Act and such other documents as they may reasonably
request in order to facilitate the disposition of the
shares owned by them and covered by a registration
statement filed under this paragraph 6.2;
(iv) use its best efforts to register and qualify the
securities covered by such registration statement
under such other securities or Blue Sky laws of such
jurisdiction as shall be reasonably requested by
Holder, provided that Progenics shall not be required
in connection therewith or as a condition thereto to
qualify to do business or to file a general consent
to service of process in any such states or
jurisdictions;
(v) in the event of any underwritten public offering,
enter into and perform its obligations under an
underwriting agreement, in usual and customary form,
with the underwriter(s) of such offering who shall be
chosen by Progenics (and Holder shall also enter into
and perform its obligations under such an underwriting
agreement); and
(vi) notify Holder as promptly as possible at any time when
a prospectus relating thereto is required to be
delivered under the Securities Act of the happening
of any event as a result of which the prospectus
included in such registration statement, as then in
effect, includes an untrue statement of a material
fact or omits to state a material fact required to be
stated therein or necessary to make the statements
therein, in light of the circumstances under which
they were made, not misleading.
(f) OBLIGATIONS OF HOLDER. In connection with any registration
required to be effected pursuant to this paragraph 6.2,
Holder shall furnish to Progenics
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such information regarding itself, the shares held by it and
the intended method of disposition of such securities as
shall be required to effect the registration of their shares.
(g) LOCK-UP AGREEMENT. CBC hereby agrees that in connection with
any registration of equity securities relating to an
underwritten offering thereof to the general public, CBC
shall not, whether or not CBC is participating in such
registration, to the extent requested by Progenics or the
underwriter of such offering, sell or otherwise transfer or
dispose of (other than to donors who agree to be similarly
bound) any Progenics Shares (other than those shares which
are in fact included, in such registration) without the prior
written consent of Progenics or such underwriters. as the
case may be, for such period of time (not to exceed 120 days)
from the effective date of the registration statement for
such registration as Progenics or such underwriters may
specify in writing.
(h) INDEMNIFICATION. Progenics may require, as a condition to
including any Progenics Shares in any registration statement
filed pursuant to this paragraph 6.2, that Progenics shall
have received an undertaking satisfactory to it from (i) the
prospective seller of such securities, to indemnify and hold
harmless Progenics, each officer and director of each such
underwriter and each other person, if any, who controls
Progenics or the underwriter, and (ii) each such underwriter
of such securities, to indemnify and hold harmless Progenics,
each officer and director of Progenics, each prospective
seller, each officer and director or each prospective seller
and each other person, if any, who controls Progenics or
any such prospective seller within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act,
with respect to any statement in or omission from such
registration statement, any preliminary prospectus, final
prospectus or summary prospectus included therein, or any
amendment or supplement thereto, if such statement or
omission was made in reliance upon and in conformity with
written information furnished by such prospective seller
or underwriter, as the case may be, to Progenics for use in
the preparation of such registration statement, preliminary
prospectus, final prospectus, summary prospectus, amendment
or supplement. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf
of Progenics or any such director, officer or controlling
person and shall survive the transfer of such securities by
such seller.
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7. CBC REPRESENTATIONS AND WARRANTIES.
7.1 CBC represents and warrants to Progenics as follows:
(a) ORGANIZATION, STANDING AND AUTHORITY. CBC is a corporation
duly organized, validly existing and in good standing under
the laws of the state of Delaware. CBC has all requisite
corporate power to own and operate its properties and assets
and to carry on its business as presently being conducted
and as proposed to be conducted. CBC has, and will have on
all relevant dates, all requisite legal and corporate power
to execute and deliver this Agreement.
The execution and delivery of this Agreement and the
performance of the transactions contemplated hereby have
been duly authorized by all appropriate CBC corporate action.
The performance by CBC of any of the terms and conditions of
this Agreement on its part to be performed does not and will
not constitute a breach or violation of any other agreement
or understanding, written or oral, to which it is a party.
CBC has the full right and legal capacity to provide in the
Licensed Territory all rights to the Knowhow and Licensed
Patent Rights granted to Progenics hereunder.
(b) PROCEEDINGS OR CLAIMS. There are no adverse proceedings,
claims or actions pending, or to the best of CBC's knowledge,
threatened, relating to the Knowhow and/or Licensed Patent
Rights and at the time of disclosure and delivery thereof to
Progenics, CBC shall have the full right and legal capacity
to disclose and deliver the Knowhow and Licensed Patent
Rights to Progenics without violating the rights of third
parties.
(c) INVESTMENT. CBC is acquiring the Progenics Shares for
investment and not with a view to the distribution thereof
nor with any present intention of distributing or selling any
Progenics Shares except in compliance with the Securities
Act.
8. MANUFACTURE AND SUPPLY.
8.1 GENERAL. The terms of the exclusive license granted to Progenics
under Section 2 notwithstanding, Progenics agrees that CBC
retains the right to Manufacture the Adjuvant for use in Licensed
Products. CBC agrees to supply Progenics with one hundred percent
(100%) of its Adjuvant Requirements for purposes of research and
development, pre-clinical and human clinical trials and
commercial sales of all Licensed Products. CBC also agrees to
supply each of Progenics sublicensees with all of its Adjuvant
Requirements provided such sublicensee enters a supply
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agreement with CBC containing substantially the same terms
pertaining to supply as set forth herein. CBC hereby agrees, at
its sole expense, to commit all reasonably necessary facilities,
appropriately trained personnel, machinery, equipment, utilities
and other CBC resources required to satisfy its obligations under
this Agreement. CBC may contract with a third party to fulfill
its obligations hereunder and/or may assign or sublicense all or
any portion of its rights and obligations under this Section 8
with respect to Manufacture and supply of Adjuvant Requirements.
For all purposes under this Section 8, the term CBC, shall be
deemed to include any such third party, assignee or sublicensee
of CBC.
8.2 CBC TRANSFER PRICE OF ADJUVANT.
(a) THROUGH FILING OF PRODUCT LICENSE APPLICATION. With respect
to each and every Licensed Product, CBC shall supply one
hundred percent (100%) of Adjuvant Requirements prior to
Commercial Introduction of such Licensed Product, including
for purposes of all research and development, pre-clinical
trials and human clinical trials (including PLA-Enabling
Human Clinical Trials) of such Licensed Product. [***]
In order to verify the production cost of the Adjuvant,
Progenics will have the right to pay for an
independent certified public accountant to inspect the
records of CBC once per year during regular business hours,
provided that such accountant has entered into a
confidentiality agreement with CBC limiting the disclosure
of such information to authorized representatives of the
Parties.
(b) [***]
8.3 CBC'S REPRESENTATIONS, WARRANTIES AND COVENANTS REGARDING
MANUFACTURING. CBC hereby represents and warrants to Progenics
and its sublicensees as follows:
(a) PRE-CLINICAL TRIAL USE. CBC shall Manufacture or cause to be
Manufactured all Adjuvant Requirements for use in any vaccine
used in
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connection with any pre-clinical trial of any Licensed
Product (i) strictly in compliance with (A) this Agreement,
(B) the specifications for the Manufacture of Adjuvant, as
may from time to time be required by the Food and Drug
Administration (the "Specifications") the current version of
which is set forth in Exhibit B, and (C) all applicable laws
and regulations.
(b) HUMAN CLINICAL TRIAL USE. CBC shall Manufacture or cause to
be Manufactured all Adjuvant Requirements for use in any
vaccine used in connection with any human clinical trial of
any Licensed Product (i) strictly in compliance with (A) this
Agreement, (B) all Specifications, and (C) all applicable
laws and regulations, including but not limited to cGMPs,
to the extent applicable. [***]
(c) COMMERCIAL USE. CBC shall Manufacture or cause to be
Manufactured all Adjuvant Requirements for use in the
commercialization of any Licensed Product (i) strictly in
compliance with (A) this Agreement, (B) all Specifications,
and (C) all applicable laws and regulations, including but
not limited to cGMPs, to the extent applicable.
(d) CERTIFICATE OF ANALYSIS; NON-COMPLYING ADJUVANT. Before,
during and after Manufacture of Adjuvant Requirements, CBC
shall obtain samples, monitor the Manufacturing Process
and the environment of such Manufacture, and keep such
technical books and records of all of the foregoing as are
required under the Specifications and all applicable laws
and regulations, including but not limited to cGLPs or
cGMPs (as appropriate and applicable). CBC shall test each
lot of Adjuvant Requirements Manufactured for Progenics as
required under the Specifications. Together with each such
lot of Adjuvant Requirements, CBC shall provide a written
certificate of analysis which shall set forth the results
of such testing by CBC and CBC's quality control approval
of such lot of Adjuvant Requirements. CBC's obligations
under this Section 8.3(d) shall be at CBC's sole expense.
Progenics shall be entitled to test any such Adjuvant
Requirements in accordance with the Specifications, at
Progenics' sole expense. Without limiting any of
Progenics' other rights or remedies under this Agreement,
with respect to any Adjuvant Requirements supplied
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hereunder that do not comply with applicable
representations and warranties under this Section 8.3, the
Parties agree that: (i) neither Progenics nor its
sublicensees shall be obligated to pay CBC the transfer
price applicable to such non-complying Adjuvant
Requirements; (ii) if Progenics or its sublicensee has
already paid for such non-complying Adjuvant Requirements,
Progenics or its sublicensee shall be entitled to a credit
against future purchases for the amount paid to CBC
therefor; (iii) CBC on a priority basis shall Manufacture
and supply to Progenics or its sublicensee, as applicable,
replacement Adjuvant Requirements in full compliance with
this Section 8.3; and (iv) CBC shall bear the full cost of
returning or destroying the non-complying Adjuvant
Requirements. Progenics shall be deemed to have accepted
any Adjuvant provided hereunder and such Adjuvant shall be
deemed to comply with the provisions hereof unless
Progenics shall notify CBC of the rejection of such
Adjuvant and the reasons for such rejection within the
forty-five days (45) of delivery of such Adjuvant.
8.4 PROCEDURES FOR ESTIMATING, ORDERING AND SUPPLYING ADJUVANT REQUIREMENTS.
Subject to the other terms of this Agreement:
(a) ANNUAL DEMAND FORECAST FOR EACH MANUFACTURING YEAR. During
the Term, commencing on October 1, 1995 and on an on-going
quarterly basis as described below, Progenics will provide
CBC with a written rolling annual demand forecast of Adjuvant
Requirements for each calendar year which shall be binding as
to the first quarter and non-binding as to the remaining
three (3) quarters. Thereafter, Progenics shall provide an
updated annual demand forecast on a quarterly basis no later
than ninety (90) days in advance of the commencement of the
first (and binding) quarter covered by such annual demand
forecast. The Parties also agree that the variance, if any,
between the binding forecast of a given quarter and the last
non-binding forecast for such quarter shall be between
[***] and [***] meaning that Progenics' binding
forecast for such quarter must be at least [***] but not
more than [***] of such last non-binding forecasted
amount for such quarter.
(b) PURCHASE ORDERS. Except as set forth in Section 8.4(a),
Progenics shall place a firm purchase order or purchase
orders with CBC setting forth (i) the quantities of Adjuvant
Requirement to be Manufactured and supplied hereunder, (ii)
the schedule for receipt from CBC of such batch(es) of
Adjuvant Requirements, and (iii) instructions for shipping
and packaging. Each such firm purchase order shall be
submitted no later than thirty (30)
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days in advance of the first scheduled date of receipt
thereof. Subject to the other terms of this Agreement,
Progenics shall be obligated to place firm purchase orders
with CBC for, and CBC hereby commits to Manufacture and
supply hereunder pursuant to such firm purchase orders, no
less than one hundred percent (100%) of the amount of
Adjuvant Requirements in the then-binding quarter of each
annual demand forecast under Section 8.4(b); provided,
however, that: (A) the Parties may mutually agree in writing
to amend any such firm purchase order; (B) CBC, in its
discretion, may agree to supply additional amounts of
Adjuvant Requirements in excess of the then-binding amount,
provided that Progenics place firm purchase order(s) for such
excess Adjuvant Requirements on a timely basis; and (C) CBC
agrees to provide Progenics with as much advance written
notice as possible (and in any case at least thirty (30)
days' written advance notice) if CBC determines that any
scheduled delivery of Adjuvant Requirements pursuant to any
purchase order will be delayed for any reason of which CBC
becomes aware.
(c) [***]
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8.5 ALLOCATION.
(a) ALLOCATION AMONG CUSTOMERS. CBC and Progenics hereby
agree and acknowledge that, in the event that CBC is
unable to satisfy in full its obligations under this
Agreement to supply one hundred percent (100%) of Adjuvant
Requirements as well as CBC's obligations to third parties
with respect to supply of Adjuvant, CBC shall allocate
proportionately all available Adjuvant among Progenics and
its sublicensees and such third parties with highest
priority for the supply of Adjuvant given to outstanding
firm purchase orders for comparable delivery time frames.
(b) [***]
8.6 REGULATORY APPROVAL OF MANUFACTURING. CBC shall be responsible,
at sole cost and expense, for obtaining all necessary regulatory
approvals particular to the Adjuvant for Manufacture and supply
of Adjuvant Requirements. Progenics shall advise CBC of any new
requirements specified by the United States Food and Drug
Administration or the Federal Food, Drug and Cosmetic Act (or the
equivalent regulatory authority or law in other countries) with
respect to any Licensed Product. At any time when any portion of
the Adjuvant Requirements is being Manufactured by CBC for
Progenics, Progenics shall have the right to have its personnel
observe all phases and areas of such Manufacture and the CBC
facility,
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and CBC shall not modify in any manner any Specifications without
Progenics' prior written consent (which consent shall not be
unreasonably withheld).
8.7 CBC RECORDKEEPING AND INSPECTION.
(a) TECHNICAL RECORDS. With respect to any Manufacture and supply of
Adjuvant Requirements, CBC shall, at its expense, keep properly
completed technical books and records, test data and reports as
required under the Specifications and all applicable laws and
regulations, including but not limited to cGLPs or cGMPs (as
appropriate), and in any case shall maintain such technical
information for at least two (2) years from the expiration date
of the relevant Licensed Product or longer if required under
applicable laws and regulations (including but not limited to
cGLPs and cGMPs, as applicable). During regular business hours
and upon reasonable advance written request, CBC shall make any
such technical information available to Progenics for inspection
and copying.
(b) FINANCIAL RECORDS. During the Term, CBC shall keep for at
least three (3) years records of its Fully Burdened
Manufacturing Costs, and the calculations thereof in
sufficient detail to permit Progenics to confirm the accuracy
thereof. At the request of Progenics, and not more frequently
than once per year, upon at least five (5) business days'
prior written notice, and at the expense of Progenics (except
as otherwise provided below), CBC shall permit a nationally
recognized, independent, certified public accountant selected
by Progenics and acceptable to CBC to inspect (during regular
business hours) any such CBC records for the then-preceding
three (3) years solely to the extent necessary to verify such
costs, margins and calculations, provided that such accountant
in advance has entered into a confidentiality agreement with
CBC and Progenics substantially similar to the confidentiality
provisions of this Agreement, limiting the use and disclosure
of such information to authorized representatives of the
Parties. Results of any such inspection shall be made
available to both Parties. If such inspection reveals a
deficiency in the calculation of CBC's Fully Burdened
Manufacturing Cost resulting in an overpayment to CBC of the
transfer price by five percent (5%) or more, CBC shall pay all
costs and expenses of such inspection.
(c) QUALITY AUDIT. To the extent required by law, CBC shall permit
Progenics to audit, in cooperation with CBC's personnel,
production, packaging, and quality control facilities of CBC
and any of its significant suppliers as they relate to
production of the Adjuvant to allow Progenics to verify CBC's
compliance with its responsibilities under this Agreement.
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8.8 LIABILITY.
(a) INDEMNIFICATION BY PROGENICS. Except as otherwise provided in
Sections 8.8(b) or (c), Progenics will defend, indemnify and
hold harmless CBC against any and all claims, actions,
liabilities, damages, loses, costs or expenses, including
reasonable attorneys' fees, based upon or arising out of the
sales or use of any Licensed Product by Progenics or a
sublicensee, unless CBC should fail to give Progenics prompt
notice thereof in writing and such failure materially
prejudices CBC's abilities to defend against such claim. CBC
shall permit Progenics to control the investigation,
preparation and defense thereof(including any compromise or
settlement thereof and any appeal) and provide reasonable
assistance to Progenics, at Progenics' expense, in that regard.
(b) LIABILITY. Each Party assumes full responsibility and
liability for any injury, damage or expense which it or its
employees, agents and invitees incur and which arise from its
manufacture, handling and use of the Adjuvant or Licensed
Products, except to the extent such injury, damage or expense
arises from the negligence or willful misconduct of the other
Party.
(c) INDEMNIFICATION BY CBC. CBC will defend, indemnify and hold
harmless Progenics against any and all claims, actions,
liabilities, damages, losses, costs or expense (including
reasonable attorneys' fees) based upon the failure of the
Adjuvant to conform to the Specifications; of CBC, unless
Progenics shall fail to give CBC prompt notice thereof in
writing and such failure materially prejudices Progenics'
ability to defend against said claim. Progenics shall permit
CBC to control the investigation, preparation and defense
thereof (including any compromise or settlement thereof and
any appeal) and provide reasonable assistance to CBC, at CBC's
expense, in that regard.
9. CONFIDENTIALITY.
9.1 CONFIDENTIALITY. The Parties acknowledge that during the Term,
either Party may receive from the other Party information which is
proprietary, confidential and of significant commercial value to
the disclosing Party. Except to the extent expressly authorized by
this Agreement, the Parties agree that, for the Term and for five
(5) years thereafter, the receiving Party shall keep completely
confidential and shall not publish or otherwise disclose and shall
not use for any purpose (except those related to this agreement)
any information furnished to it by the other Party pursuant to this
Agreement, except to the extent that it can be
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established by the receiving Party by competent proof (including
written records) that such 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 subsequently lawfully disclosed to the receiving Party by
a third party; or
(e) was subsequently independently developed by receiving Party.
9.2 PERMITTED DISCLOSURES. Each Party may disclose the other Party's
information to the extent such disclosure is reasonably necessary
in prosecuting or defending litigation, filing, prosecuting or
maintaining patent applications or patents, complying with
applicable laws or regulations, or, in the case of Progenics and
its sublicensees, conducting preclinical or clinical trials or
preparing or filing regulatory filings with respect to Licensed
Products; provided, however, that if a Party is required to make
any disclosure of the other Party's information furnished pursuant
to this Agreement, it will give reasonable advance notice of such
disclosure requirements to the other Party and, except to the
extent inappropriate as in the case of patent applications, will
use its best efforts to secure confidential treatment of such
information required to be disclosed.
10. TERM; TERMINATION.
10.1 TERM. This Agreement shall commence as of the Effective Date and,
unless sooner terminated as provided in this Section 10, shall
expire on the date royalties are not longer payable by Progenics to
CBC under Section 3.3 (the "Term"), upon which expiration Progenics
shall thereafter have in perpetuity a royalty-free license in the
Licensed Territory to use the Knowhow and practice the Licensed
Patent Rights to develop, make, have made, use and sell Licensed
Products without any accounting to CBC.
10.2 MATERIAL BREACH. Subject to Section 13.6, failure by either Party
to comply with any of the material obligations contained in this
Agreement shall entitle the other
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Party to give to the Party in default notice specifying the nature
of the default and requiring it to cure such default. If such
default is not cured within sixty (60) days after the receipt of
such notice, the notifying Party shall be entitled, without
prejudice to any of its other rights conferred on it by this
Agreement and in addition to any other remedies available to it by
law or in equity, to terminate this Agreement effective upon
written notice to the other Party. The right of a Party to
terminate this Agreement, as hereinabove provided, shall not be
affected in any way by its waiver or failure to take action with
respect to any previous default.
10.3 ACCRUED RIGHTS, SURVIVING OBLIGATIONS; SUBLICENSEES. Expiration or
any termination of this Agreement for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of
either Party prior to such expiration or termination. Such
expiration or termination shall not relieve either Party from
obligations which are expressly indicated to survive expiration or
termination of this Agreement, which obligations include, without
limitation, those under Sections 4.4, 5.2(b), 7, 8.7, 8.8, 9, 11
and 12. [***]
10.4 TERMINATION BY PROGENICS. Progenics may terminate this Agreement by
giving 90 days written notice to CBC: provided Progenics shall be
obligated to fulfill its obligations under any binding purchase
order outstanding; and further provided that upon such termination
all rights to Know-how and Licensed Patent Rights shall revert to
CBC.
11. PATENTS.
11.1 INVENTIONS. Title to any Licensed Patent Rights will follow
inventorship, which will in turn be determined in accordance with
United States laws of inventorship and written evidence of the
Parties. Designation of inventors on any patent application is a
matter of law and will be solely within the discretion of qualified
patent counsel of CBC and Progenics.
11.2 PATENT PROSECUTION STRATEGY. Subject to the other terms of this
Agreement:
(a) CBC SOLELY OWNED LICENSED PATENT RIGHTS. During the Term, the
filing, prosecution and maintenance of Licensed Patent Rights
solely owned by CBC will be under the control of CBC, at its
sole cost and expense.
(b) JOINTLY OWNED LICENSED PATENT RIGHTS. During the Term, the
filing, prosecution and maintenance of any Licensed Patent
Rights jointly owned
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by the Parties will be under the control of the Party from
whom the majority of the data underlying such Licensed Patent
Rights arose (the "controlling Party"), and the controlling
Party is authorized to undertake such filings, prosecutions
and maintenance at its sole cost and expense, using patent
counsel reasonably satisfactory to the non-controlling Party
and with the reasonable cooperation of the non-controlling
Party and its employees, provided that: (i) the controlling
Party notifies the non-controlling Party reasonably prior to
the filing of any such Licensed Patent Rights by the
controlling Party and permits review of such proposed Licensed
Patent Rights by the non-controlling Party; (ii) the
controlling Party provides the non-controlling Party promptly
with copies of all communications received by the controlling
Party; (iii) the controlling Party keeps the non-controlling
Party reasonably informed of the status of such Licensed
Patent Rights, and (iv) the controlling Party provides the
non-controlling Party notice at least thirty (30) days in
advance of taking or failing to take any action that would
affect the scope or validity of any such Licensed Patent
Rights (including but not limited to substantially narrowing
or canceling any claim, abandoning any such Licensed Patent
Rights or not filing or perfecting the filing of any such
Licensed Patent Rights in any country), with prior written
notice of such proposed action or inaction so that the
non-controlling Party has a reasonable opportunity to review
and make comments. Either Party may assign its rights to any
jointly owned Licensed Patent Rights to the other Party, who
will have the right, in its discretion, to assume the
prosecution and maintenance thereof at its sole expense and as
the sole owner thereof.
[***]
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[***]
11.3 THIRD PARTY INFRINGEMENT. Either Party promptly shall notify the
other Party in writing of any alleged infringement of the Licensed
Patent Rights and of any available evidence thereof. The Parties
shall consult as to a potential litigation strategy or strategies
against any alleged infringer. If the Parties commence and
prosecute a suit jointly, they shall share all associated
attorneys' fees and out-of-pocket litigation expenses equally. If
the Parties do not decide to jointly commence an action within
thirty (30) days of the notice specified above, or otherwise
terminate the alleged infringement, CBC shall have the right, at
its expense, to bring suit against the allegedly infringing party.
[***]
11.4 TRADEMARKS. Progenics, at its expense, shall be responsible for the
selection, registration and maintenance of all trademarks and
tradenames which it employs in connection with Licensed Products.
The terms "trademark" or "tradename" shall include, without
limitation, the name or names of any Licensed Products, the design
of the packaging of any Licensed Products, and the appearance of
dosage forms of any Licensed Product. Progenics shall own such
tradenames and trademarks and shall retain such ownership upon
termination of this Agreement.
12. ARBITRATION.
Any dispute, controversy or claim between the Parties, arising out of or
relating to this Agreement or the Parties' respective rights and
obligations hereunder either during or after the Term (including the
question as to whether any such matter is arbitrable) shall be subject
to binding arbitration in accordance with then-existing commercial
arbitration rules of the American Arbitration Association. The Parties
agree that, in the course of any such
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arbitration, service of any notice at their respective addresses in
accordance with Section 13.11 of this Agreement shall be valid and
sufficient, and any arbitration hereunder shall be in the jurisdiction
of the defendant Party, which in the case of Progenics shall be New York
and in the case of CBC shall be Massachusetts. In any such arbitration,
an award shall be rendered by a majority of the members of a board of
arbitration consisting of three (3) members, one (1) of whom shall be
chosen by each of Progenics and CBC and the third of whom shall be
appointed by mutual agreement of such two (2) arbitrators. In the event
of failure of such two (2) arbitrators to agree within sixty (60) days
after the commencement of arbitration (as defined below) upon
appointment of the third arbitrator, or in the event that either Party
shall fail to appoint an arbitrator within thirty (30) days after the
commencement of the arbitration proceedings, the third arbitrator or
(upon request of the other Party) the second arbitrator and the third
arbitrator, as the case may be, shall be appointed by the American
Arbitration Association in accordance with its then existing commercial
arbitration rules. For purposes of this Section, the "commencement of
the arbitration proceeding" shall mean the date upon which the
defendant Party receives from the American Arbitration Association a
copy of the request for arbitration filed by the party desiring to have
recourse to arbitration. The decision of the arbitrators shall be in
writing and shall set forth the basis therefor. The Parties shall abide
by all awards rendered in arbitration proceedings, and such awards may
be enforced and executed upon in any court having jurisdiction over the
Party against whom enforcement of such award is to be sought. The
Parties shall divide equally the administrative charges, arbitrators'
fees, and related expenses of arbitration, but each Party shall pay its
own legal fees incurred in connection with any such arbitration;
provided, however, if the arbitrators determine that one Party prevailed
clearly and substantially over the other Party, then the non-prevailing
Party shall also pay the reasonable attorneys' fees and expert witness
costs and other arbitration costs of the prevailing Party.
13. MISCELLANEOUS PROVISIONS.
13.1 NO PARTNERSHIP. Nothing in this Agreement is intended or shall be
deemed to constitute a partnership, distributorship, agency,
employer-employee or joint venture relationship between the
Parties. No Party shall incur any debts or make any commitments for
the other, except to the extent, if at all, specifically provided
herein.
13.2 ASSIGNMENTS. Except as set forth in Section 8 hereof, neither Party
shall assign any of its right or obligations hereunder or this
Agreement, except that either Party may do so: (a) as incident to
the merger, consolidation, reorganization or acquisition of stock
or assets affecting substantially all of the assets or voting
control of such Party; (b) to any wholly-owned subsidiary if such
Party remains liable and responsible for the performance and
observance of all of the subsidiary's duties and obligations
hereunder; (c) with the prior written consent of the other
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Party; (d) as incident to a joint venture between Progenics and a
major corporate partner; or (e) as incident to any reorganization
of CBC; including any reorganization under the provisions of
Chapter 11 of the United States Bankruptcy Code and any merger,
spin-off, sale of assets or other transaction. This Agreement shall
be binding upon the successors and permitted assigns of the Parties
and the name of a Party appearing herein shall be deemed to include
the names of such Party's successors and permitted assigns to the
extent necessary to carry out the intent of this Agreement. Any
assignment not in accordance with this Section 13.2 shall be void.
13.3 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. Without limiting the generality of
the foregoing, CBC agrees to provide a letter to FDA authorizing
Progenics to cross reference CBC's drug master flies for QS-21.
13.4 NO NAME OR TRADEMARK RIGHTS. Except as otherwise provided herein,
no right, express or implied, is granted by this Agreement to use
in any manner the names "Cambridge Biotech Corporation" or
"Progenics Pharmaceuticals, Inc." or any contraction thereof or any
other trade name or trademark of CBC or Progenics in connection
with the performance of this Agreement.
13.5 PUBLIC ANNOUNCEMENTS. Except as may otherwise be required by
applicable law or regulation, neither Party shall make any public
announcement concerning this Agreement or the subject matter hereof
without the prior written consent of the other Party (not to be
unreasonably withheld).
13.6 FORCE MAJEURE. If any default or delay occurs which prevents or
materially impairs a Party's performance and is due to a cause
beyond the Party's reasonable control, including but not limited to
any act of any god, flood, fire, explosion, earthquake, casualty,
accident, war, revolution, civil commotion, blockade or embargo,
injunction, law, proclamation, order, regulation or governmental
demand, the affected Party promptly shall notify the other Party in
writing of such cause and shall exercise diligent efforts to resume
performance under this Agreement as soon as possible. Neither Party
shall be liable to the other Party for any loss or damage due to
such cause. Neither Party may terminate this Agreement because of
such default or delay.
13.7 ENTIRE AGREEMENT OF THE PARTIES; AMENDMENTS. This Agreement,
including the exhibits attached hereto which are incorporated
herein, constitutes and contains the entire understanding and
agreement of the Parties and cancels and supersedes any and all
prior negotiations, correspondence, understandings and agreements,
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whether verbal or written, between the Parties respecting the
subject matter hereof. No waiver, modification or amendment of any
provision of this Agreement shall be valid or effective unless made
in writing and signed by a duly authorized officer of each of the
Parties.
13.8 SEVERABILITY. In the event that any of the provisions of this
Agreement shall for any reason be held by any court or authority of
competent jurisdiction to be invalid, illegal or unenforceable,
such provision or provisions shall be validly reformed to as nearly
as possible approximate the intent of the Parties and, if
unreformable, shall be divisible and deleted in such jurisdiction;
elsewhere, this Agreement shall not be affected so long as the
Parties are still able to realize the principal benefits bargained
for in this Agreement.
13.9 CAPTIONS. The captions to this Agreement are for convenience only,
and are to be of no force or effect in construing or interpreting
any of the provisions of this Agreement.
13.10 APPLICABLE LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of The Commonwealth of
Massachusetts applicable to agreements made and performed wholly
within such state without regard to its principles of conflicts of
laws.
13.11 NOTICES AND DELIVERIES. Any notice, requests, delivery, approval
or consent required or permitted to be given under this Agreement
shall be in writing and shall be deemed to have been sufficiently
given if delivered in person, transmitted by telecopy (with written
confirmation to follow via United States first class mail) or five
(5) days after being sent by United States certified mail to the
Party to whom it is directed at its address shown below or such
other address as such Party shall have last given by written notice
to the other Party in accordance with this Section.
If to CBC, addressed to:
Cambridge Biotech Corporation
365 Plantation Street
Worcester, MA 01605
Attention: President
Telecopy: 508-797-4014
with a copy to:
Attention: General Counsel
Telecopy: 508-797-4014
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If to Progenics, addressed to:
Progenics Pharmaceuticals, Inc.
777 Old Saw Mill River Road
Tarrytown, NY 10591
Attention: Paul J. Maddon, M.D., Ph.D., CEO
Telecopy: 914-789-2817
13.12 COUNTERPARTS. This Agreement may be executed simultaneously 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.
13.13 COMPLIANCE WITH LAWS. Progenics and CBC each shall comply with all
applicable laws in connection with its own performance under this
Agreement. Without limiting the generality of the foregoing,
Progenics shall be responsible for compliance with all applicable
product safety, product testing, product labeling, package marking,
and product advertising laws and regulations, except with respect
to efforts performed by CBC in which case CBC shall be responsible
for its activities as governed by such laws and regulations.
13.14 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by a
Party and shall be able to be relied fully on by the Parties.
13.15 BANKRUPTCY COURT APPROVAL: ESCROW. The performance of either party
of its obligations hereunder is subject to approval of this
Agreement by the United States Bankruptcy Court for the District of
Massachusetts, Western Division. Within thirty days following
execution of this Agreement, CBC will deliver to a mutually
agreeable escrow agent all documentation set forth on EXHIBIT C,
attached hereto and made a part hereof, (the "Escrow
Documentation") necessary for Progenics to manufacture the Adjuvant
pursuant to the provisions of Section 8.5(b) of this Agreement. [***]
At Progenics' expense, Progenics shall obtain a verification from
Coopers & Lybrand, L.L.P. that the documentation delivered to the
Escrow Agent conforms with the definition of Escrow Documentation as
set forth in Exhibit C. The Escrow Documentation shall be held by the
escrow agent pursuant to the terms of a mutually agreeable escrow
agreement which shall
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provide INTER ALIA for the updating of the Escrow Documentation as
necessary by CBC to insure that the Escrow Documentation is current
and for the delivery of the Escrow Documentation to CBC upon the
effective date of CBC's reorganization plan and prior to such date
for delivery of the Escrow Documentation to Progenics in the event
of the occurrence of an Inability to Supply or in the event that
CBC's Chapter 11 bankruptcy proceeding is converted to a Chapter 7
bankruptcy proceeding. The procedures set forth in this Section
13.15 respecting escrow shall apply each and every time, if any,
that CBC enters into reorganization or bankruptcy in the future.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective corporate officers, duly authorized as of the day
and year first above written.
CAMBRIDGE BIOTECH CORPORATION PROGENICS PHARMACEUTICALS, INC.
By: /s/ Alison Taunton-Rigby By: /s/ Paul J. Maddon
-------------------------- ---------------------------------
Name: Alison Taunton-Rigby Name: Paul J. Maddon, M.D., Ph.D.
----------------------- -------------------------------
Title: President and CEO Title: CEO and Scientific Director
---------------------- ------------------------------
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EXHIBIT A
LICENSED PATENT RIGHTS
U.S. Patent No. 5,057,540, entitled "Saponin Adjuvant" inventors Charlotte A.
Kensil and Dante J. Marciani, issued October 15, 1991 (filed August 27, 1990).
COUNTRY SERIAL NUMBER
Australia 19340/88
Canada 568,119
Denmark 6029/89
Europe 88905332.8
Japan 504974/1988
PCT PCT/US88/01842
<PAGE>
EXHIBIT B
CAMBRIDGE BIOTECH CORPORATION 365 PLANTATION ST. WORCESTER, MA 01605
[***]
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EXHIBIT C
The following material shall comprise the Escrow Documents:
[***]
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[LOGO] PROGENICS Progenics Pharmaceuticals, Inc.
Old Saw Mill River Road
Tarrytown, New York 10591
(914) 789-2800
Telefax:(914) 789-2817
September 6, 1995
Alison Taunton-Rigby, Ph.D.
Chief Executive Officer
Cambridge Biotech Corporation
365 Plantation Street
Worcester, MA 01605
Re: Cambridge Biotech Corporation/Progenics License and Supply Agreement
(August 1995)
Dear Dr. Rigby,
This letter confirms our understanding that if pursuant to Paragraph 8.5(b)
of the above-referenced agreement Progenics finds it necessary to manufacture
the Adjuvant, CBC agrees that it will immediately execute and deliver a
letter as set forth in Appendix A (attached).
Sincerely,
/s/ Paul J. Maddon
Paul J. Maddon, M.D., Ph.D.
Chairman and CEO
Scientific Director
Accepted:
/s/ Alison Tauton-Rigby
Alison Taunton-Rigby, Ph.D.
Chief Executive Officer
Cambridge Biotech Corporation
PJM/em
<PAGE>
- --------------
Center for Biologics Evaluation and Research
Food and Drug Administration
1401 Rockville Pike
Rockville, MD 20852
Re: DMF #'s__________________________, Submitted__________________
Cambridge Biotech Corporation ("CBC") is the holder of Drug Master Files
referenced above, relating to QS-21.
CBC has entered into a License Agreement ("License Agreement") with Progenics
Pharmaceuticals, Inc. ("Progenics") which provides that Progenics may
manufacture QS-21 for use in certain vaccines containing purified GM2 and GD2
ganglioside preparations for the prevention or treatment of human cancers
("Licensed Products"), in the event that CBC fails to supply QS-21 to Progenics.
CBC herewith authorizes the Food and Drug Administration to cross-reference the
above DMF's in their entirety in reviewing applications and submissions of
Progenics in support of its manufacture, clinical development, and marketing of
Licensed Products.
Sincerely,
Cambridge Biotech Corporation
By:____________________________
President and CEO
<PAGE>
Exhibit 10.16
FINAL
CAMBRIDGE BIOTECH CORPORATION
and
PROGENICS PHARMACEUTICALS, INC.
SUBLICENSE
<PAGE>
TABLE OF CONTENTS
BACKGROUND .........................................................1
1. DEFINITIONS ........................................................2
2. GRANT ..............................................................3
3. ROYALTIES ..........................................................3
4. PAYMENTS AND REPORTS ...............................................4
5. BOOKS AND RECORDS ..................................................5
6. NOTICES ............................................................5
7. TERM AND TERMINATION ...............................................5
8. NEGATION OF WARRANTIES AND INDEMNITY ...............................6
9. LAWS AND REGULATIONS ...............................................7
10. USE OF NAMES .......................................................7
11. PATENT NOTICE ......................................................8
12. MISCELLANEOUS PROVISIONS ...........................................8
APPENDIX A ........................................................10
APPENDIX B ........................................................11
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SUBLICENSE AGREEMENT
This is a SUBLICENSE AGREEMENT to be effective on the last date of the
signature dates provided hereinbelow, by and between CAMBRIDGE BIOTECH
CORPORATION (CBC), debtor and debtor in possession, Case No. 94-43054-JFQ,
United States Bankruptcy Court for the District of Massachusetts, Western
Division, a Delaware corporation, having offices at 365 Plantation Street,
Worcester, Massachusetts 01605, and PROGENICS PHARMACEUTICALS, INC., a
Delaware corporation having offices at 777 Old Saw Mill River Road,
Tarrytown, New York 10591 (SUBLICENSEE).
BACKGROUND
In the course of research conducted at Harvard University, Department of
Cancer Biology, Harvard School of Public Health, certain inventions were made
relating to the HIV-1 envelope glycoprotein, designated gp120. Additional
inventions relating to the HIV-1 envelope glycoprotein include gp160 and
methods for assay.
The President and Fellows of Harvard College ("Harvard") is the owner of
these inventions, subject to rights reserved by the United States Government,
pursuant to various assignments by Myron E. Essex and Tun-Hou Lee to Harvard
of all their right, title and interest in and to the inventions and any
patents resulting therefrom.
Harvard has been granted U.S. Patent No. 4,725,669 entitled "Assay for
Detecting Infection by Human T-Cell Lymphotrophic Virus-III" issued on
February 16, 1988 directed to gp120 and cross-reactive peptides. Currently
pending is a divisional application, U.S. Serial No. 056,134, filed May 29,
1987, directed to gp160 and cross-reactive peptides and to methods for
assaying for the glycoproteins.
CBC is the exclusive, worldwide licensee of these inventions and the
issued patent and pending patent applications by way of an exclusive license
agreement from Harvard, and has the right to grant sublicenses thereunder for
making, using or selling of the inventions which are disclosed and claimed in
the issued patent and pending patent applications.
SUBLICENSEE desires to use LICENSED PATENT RIGHTS in a commercial
diagnostic, therapeutic, or vaccine application for public use and benefit or
for selling products for research applications only.
NOW THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows:
1
<PAGE>
1. DEFINITIONS
1.1. LICENSED PATENT RIGHTS shall mean U.S. Patent No. 4,725,669, issued
February 16, 1988, and pending U.S. Patent Application Serial No. 056,134,
filed May 29, 1987, and any divisionals, continuations, continuations-in-part
based thereon, and any patents which may issue therefrom and any reissues,
re-examinations, or extensions thereof; and any and all foreign patents and
patent applications corresponding to any of the foregoing patents and patent
applications, as well as such other patents or patent applications as are
listed in Appendix A, effective as of the date said patents or patent
applications are added to Appendix A, and the inventions described or claimed
therein.
1.2. FIELD OF USE shall mean products for research applications only.
[***]
1.3. LICENSED PRODUCT(S) shall mean goods covered by or made in
accordance with LICENSED PATENT RIGHTS. For purposes of example only,
LICENSED PRODUCT(S) may include bulk glycoprotein for use in research
applications only.
1.4. [***]
1.5. FIRST USE shall mean the date of the initial transfer by
SUBLICENSEE of LICENSED PRODUCTS to any third party in exchange for cash or
some equivalent to which value can be assigned for the purpose of determining
the NET SALES.
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1.6. EARNED ROYALTIES shall mean royalties paid or payable by
SUBLICENSEE to CBC determined with respect to NET SALES.
1.7. EFFECTIVE DATE shall mean the date of the last signature date(s)
provided hereinbelow.
1.8. PRIME LICENSE shall mean the exclusive license agreement between
Harvard and CBC.
1.9. SUBLICENSEE is understood to include all of its AFFILIATES. AN
AFFILIATE of SUBLICENSEE shall mean any corporation or other business entity
controlled by, controlling, or under common control with SUBLICENSEE. For
this purpose, "control" means direct or indirect beneficial ownership of at
least fifty percent (50%) of the voting stock or equity, or at least fifty
percent (50%) interest in the income of such corporation or other business.
2. GRANT
2.1. CBC grants to SUBLICENSEE, subject to all the terms and conditions
of this Agreement, a non-exclusive, worldwide right and license to make, have
made, use, and sell LICENSED PRODUCTS under LICENSED PATENT RIGHTS in the
Field of Use.
2.2. CBC hereby grants to SUBLICENSEE the right to extend the license
granted herein to an Affiliate, subject to the terms and conditions of this
Agreement. CBC shall receive prompt written notice of each such extension and
of any termination of such AFFILIATE license. SUBLICENSEE is expressly not
granted a right to sublicense anyone other than an Affiliate under this
Agreement.
3. ROYALTIES
As consideration for the rights granted hereunder, SUBLICENSEE shall make
the following payments to CBC:
[***]
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[***]
3.3. Only one royalty shall be payable with respect to any LICENSED
PRODUCT regardless of whether it or its use is covered by one or more
LICENSED PATENT RIGHTS. On sales between SUBLICENSEE and its AFFILIATES for
resale, the royalty shall be paid on the resale to any third-party purchaser.
4. PAYMENTS AND REPORTS
4.1. SUBLICENSEE agrees to notify CBC promptly, in writing, of the date
of the FIRST USE of LICENSED PRODUCT(S).
4.2. Beginning with date of FIRST USE, SUBLICENSEE shall pay to CBC
EARNED ROYALTIES within sixty (60) days from the end of each calendar
quarter, which is the end of March, June, September, and December. Any
royalties not paid within this time period shall be deemed past due
royalties. Any past due royalties shall bear interest at the rate of
[***] PER ANNUM from their due date, which interest shall
be paid by SUBLICENSEE to CBC.
4.3. SUBLICENSEE shall also prepare for each calendar quarter a written
report in the form substantially as set forth in Appendix B setting forth the
NET SALES and the EARNED ROYALTIES payable thereon, including a detailed
listing of all LICENSED PRODUCTS sold and all deductions from NET SALES. The
reports required by this Agreement shall be certified by an officer of
SUBLICENSEE to be correct to the best of SUBLICENSEE's knowledge and
information.
4.4. All amounts payable to CBC shall be paid in United States Dollars.
In the event any LICENSED PRODUCT shall be sold for funds other than United
States funds, the NET SALES of such product shall first be determined in the
foreign funds and then converted into the equivalent United States funds at:
(i) the rate applicable to the transfer of funds arising from
royalty payments as established by the exchange control authorities
of the country of which such funds are the national currency, for the
last business day of the accounting period for which payment is thus
made; or
(ii) if there is no rate so applicable, then the buying rate for such
foreign funds as published by the Wall Street Journal on the last
business day of such calendar accounting period.
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5. BOOKS AND RECORDS
5.1. SUBLICENSEE shall keep, and shall require its AFFILIATES to keep,
accurate and correct records of calculations for determining EARNED ROYALTIES
on sales of LICENSED PRODUCTS made, used and sold under this Agreement,
appropriate to determine the amount of EARNED ROYALTIES based on NET SALES at
least three (3) years following a given reporting period. The records shall
be available during normal business hours for inspection at the expense of
CBC by a certified public accountant, selected by CBC and acceptable to
SUBLICENSEE, for the sole purpose of verifying reports and payments
hereunder. The accountant shall not disclose to CBC any financial information
other than that information relating to the accuracy of reports and payments
made under this Agreement.
6. NOTICES
6.1. Any notice required by this Agreement shall be sent by registered
or certified mail properly addressed or by telex or facsimile, with a mailed
confirmation copy, properly addressed to the other party at the address
designated below, or to another address as may be designated in writing by
the party. The notice shall be effective as of the date of the postmark of
such mailed notice.
For CBC:
CAMBRIDGE BIOTECH CORPORATION
365 Plantation Street
Worcester, Massachusetts 01605
Attn: President
with a copy Attn: General Counsel
FOR SUBLICENSEE:
PROGENICS PHARMACEUTICALS, INC.
777 Old Saw Mill River Road
Tarrytown, NY 10591
Attn: Chief Executive Officer
7. TERM AND TERMINATION
7.1. The term of this Agreement, unless sooner terminated as provided
herein, shall extend from the EFFECTIVE DATE until expiration of the last to
expire patents included in LICENSED PATENT RIGHTS.
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7.2. Upon any breach of, or default under, this Sublicense Agreement by
SUBLICENSEE, CBC may terminate this Agreement by giving ninety (90) days
written notice to SUBLICENSEE. The termination shall take effect at the end
of the ninety-day period, unless during the period SUBLICENSEE cures such
breach or default to CBC's satisfaction.
7.3. SUBLICENSEE has the right to terminate this Agreement at any time
upon giving ninety (90) days written notice to that effect to CBC.
7.4. Termination of this Agreement shall not affect any rights or
obligations accrued prior to the date of the termination, including
SUBLICENSEE's obligation to pay all EARNED ROYALTIES and SUBLICENSEE's
obligation to indemnify CBC. Upon termination of this Agreement all unpaid
EARNED ROYALTIES due to CBC shall become immediately due and payable.
7.5. Waiver by CBC of a single default or breach or of succession of
defaults or breaches shall not deprive CBC of any right to terminate this
Agreement pursuant to the terms hereof upon the occasion of any subsequent
default or breach.
[***]
8. NEGATION OF WARRANTIES AND INDEMNITY
8.1. CBC has the right to enter into this Agreement notwithstanding its
bankruptcy filings. CBC makes no representations or warranties as to the
validity or scope of any LICENSED PATENT RIGHTS.
8.2. CBC makes no representations or warranties that the manufacture,
use, sale or other disposal of the LICENSED PRODUCTS is or will be free from
infringement of patents of third parties.
8.3. CBC makes no representations or warranties whatsoever, either
express or implied, as to the merchantability or fitness of the LICENSED
PRODUCTS for a particular purpose, and SUBLICENSEE shall make no statements,
representations or warranties whatsoever to any third parties which are
inconsistent with such disclaimer by CBC.
8.4. SUBLICENSEE shall defend, indemnify and hold harmless CBC and
Harvard, their directors, officers, employees, and agents, from and against
any and all claims, demands, damages, losses, and expenses of any nature,
including attorney's fees, for but not limited to death, personal injury,
illness, property damage or products liability arising from or in
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connection with any of the following:
(1) the use by SUBLICENSEE of any method or process related to
the LICENSED PATENT RIGHTS; or
(2) any use, sale or other disposition of any of the LICENSED
PRODUCTS by SUBLICENSEE or any statement, representation or
warranty of SUBLICENSEE with respect thereto; or
(3) the use by any person of the LICENSED PRODUCTS made by
SUBLICENSEE.
CBC shall reasonably cooperate with SUBLICENSEE in defending any such
claim. CBC shall be entitled to receive information regarding the status of
any such matter and shall be entitled to retain counsel on its own behalf and
at its sole expense if CBC is named as a party or if CBC is not satisfied
with the defense provided by SUBLICENSEE for any reason, the rights and
obligations of this paragraph shall survive termination or expiration of the
Agreement. CBC and/or Harvard may, at its option, require SUBLICENSEE to name
CBC and/or Harvard as a co-insured on a product liability insurance policy
deemed sufficient by CBC.
9. LAWS AND REGULATIONS
9.1. SUBLICENSEE shall comply with all foreign and United States
federal, state, and local laws, regulations, rules and orders applicable to
the testing, production, transportation, packaging, labeling, sale and use of
the LICENSED PRODUCTS.
10. USE OF NAMES
10.1. SUBLICENSEE shall not use the names "Harvard College" or
"Harvard," the names of the inventors, "Myron E. Essex," or "Tun-Hou Lee," or
the name "Cambridge Biotech Corporation" or any other name or mark by which
Harvard or CBC may be identified for any purpose without prior written
consent obtained from the respective parties in each instance.
10.2. CBC shall not use the names "Progenics" or "Progenics
Pharmaceuticals, Inc." or any other name or mark by which SUBLICENSEE may be
identified for any purpose without prior written consent obtained from
SUBLICENSEE in each instance.
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11. PATENT NOTICE
11.1. SUBLICENSEE shall apply the patent marking notices required by the
laws of the United States and relevant countries.
12. MISCELLANEOUS PROVISIONS
12.1. This Agreement constitutes the entire understanding between the
parties with respect to the subject matter hereof and supersedes and replaces
all prior agreements, understandings, writings, and discussions between the
parties relating to said subject matter.
12.2. This Agreement may be amended only by a written instrument
executed by the parties.
12.3. Without prior written approval of CBC and Harvard, the license
granted pursuant to this Agreement shall not be assigned or transferred by
SUBLICENSEE to any other party other than to a successor to the entire
business interest of SUBLICENSEE.
12.4. This Agreement shall be binding upon and inure to the benefit of
and be enforceable by the parties hereto and their respective successors and
permitted assigns.
[Balance of page intentionally left blank]
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12.5. This Agreement shall be governed and construed and interpreted in
accordance with the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, this Agreement is executed by the parties hereinbelow:
CAMBRIDGE BIOTECH CORPORATION
By: /s/ Jeffrey Beaver March 13, 1995
----------------------- -----------------------
Jeffrey T. Beaver Date
Chief Executive Officer
PROGENICS PHARMACEUTICALS, INC.
By: /s/ Paul J. Maddon March 7, 1995
------------------------ -----------------------
Paul J. Maddon, M.D. Ph.D. Date
Chairman and CEO
AGREED AS TO SECTION 7.6:
PRESIDENT AND FELLOWS HARVARD COLLEGE
By: /s/ Joyce Brinton 3/17/95
------------------------- ------------------------
Joyce Brinton, Director Date
Office for Technology and Trademark Licensing
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APPENDIX A
1. U.S. PATENT NO. 4,725,669
Title: ASSAY FOR DETECTING INFECTION BY HUMAN T-CELL
LYMPHOTROPHIC VIRUS-III
Inventors: Myron E. Essex and Tun-Hou Lee
Filed: November 9, 1984
Issued: February 16, 1988
The claims of this patent are directed to gp120 and cross-reactive
peptides.
2. U.S. PATENT APPLICATION SERIAL NO. 056,134
Title: ASSAY FOR DETECTING INFECTION BY HUMAN T-CELL
LYMPHOTROPHIC VIRUS-III
Inventors: Myron E. Essex and Tun-Hou Lee
Filed: May 29, 1987
Cross-Reference: division of U.S. 4,725,669
Issued: currently pending
This is a divisional application of U.S. 4,725,669, directed to methods
of assay using the proteins covered by the patent and to gp160 and
cross-reactive peptides.
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APPENDIX B
FORM OF ROYALTY REPORT
For each Licensed Product, SUBLICENSEE shall report the following information:
Gross amount billed or invoiced
Deductions allowable under Section 1.4
Resulting Net Sales
Amount received
Effective royalty rate
Amount of Earned Royalties payable with report
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Exhibit 10.17
COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT
ARTICLE 1. INTRODUCTION
This Cooperative Research and Development Agreement (CRADA) between the
Centers for Disease Control and Prevention (CDC) and the Collaborator will be
effective when signed by all parties. By signing this CRADA, the Collaborator
acknowledges that it has received and read a copy of the Policy Statement on
Cooperative Research and Development Agreements and Intellectual Property
Licensing which is attached as Appendix A. The Research and Development
project(s) which will be undertaken by each of the Parties in the course of
this CRADA is detailed in the Research Plan (RP) which is attached as
Appendix B. The funding and staffing commitments of the Parties are set forth
in Appendix C. Any exceptions or changes to the CRADA are set forth in
Appendix D.
ARTICLE 2. DEFINITIONS
As used in this CRADA, the following terms shall have the indicated meanings:
2.1 "COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT" or "CRADA" means this
Agreement, entered into by CDC pursuant to the Federal Technology Transfer
Act of 1986 and Executive Order 12591 of October 10, 1987.
2.2 "PROPRIETARY INFORMATION" means confidential scientific, business or
financial information provided that such information:
2.2.1 Is not publicly known or available from other sources who are
not under a confidentiality obligation to the source of the
information;
2.2.2 Has not been made available by its owners to others without a
confidentiality obligation;
2.2.3 Is not already available to the receiving Party without a
confidentiality obligation; and
2.2.4 Does not relate to potential hazards or cautionary warnings
associated with the production, handling or use of the subject
matter of the Research Plan of this CRADA.
2.3 "SUBJECT DATA" means all recorded information first produced in the
performance of this CRADA.
2.4 "RESEARCH RESULTS" means all tangible materials other than Subject Data
first produced in the performance of this CRADA.
2.5 "SUBJECT INVENTION" means any invention conceived and reduced to
practice in the performance of research under this CRADA that may be
patentable under 35 U.S.C. Section 101 or Section 161, protectable under
7 U.S.C. Section 2321, or otherwise protectable by other types of U. S.
or foreign Intellectual Property (IP) fight.
2.6 "GOVERNMENT" means the U. S. Government and any of its agencies.
2.7 "RESEARCH PLAN" or "RP" means the statement in Appendix B of the
respective research and development commitments of the Parties to this
CRADA.
2.8 "PRINCIPAL INVESTIGATOR" or "PI" means each of the persons designated
respectively by the Parties to this CRADA who will be responsible for
the scientific and technical conduct of the RP.
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ARTICLE 3. COOPERATIVE RESEARCH
3.1 RESEARCH TEAM. The Parties agree to establish a joint research and
development team (hereinafter referred to as the "Team") comprising at
least the Principal Investigators designated pursuant to Article 3.3 to
conduct and monitor the research in accordance with the RP. Although
members of the Team shall be considered as having been delegated to the
Team, they shall continue to remain employed by their respective
employers under their respective terms of employment.
3.2 REVIEW OF WORK. Periodic conferences shall be held by the Team to
review work progress; it is understood that the nature of this
cooperative research precludes guarantee of its completion within
the specified period of performance or limits of allocated financial or
staffing support. Accordingly, research under this CRADA is to be
performed on a best efforts basis.
3.3 PRINCIPAL INVESTIGATORS. CDC research work under this CRADA will be
performed by the Laboratory identified in the RP, and the CDC Principal
Investigator (PI) designated in the RP will be responsible for the
scientific and technical conduct of this project on behalf of CDC. Also
designated in the RP is the Collaborator PI who will be responsible for
the scientific and technical conduct of this project on behalf of the
Collaborator.
3.4 RESEARCH PLAN CHANGE. The RP may be modified by mutual written consent of
the Principal Investigators. Substantial changes in the scope of the RP
will be treated as amendments under Article 14.6
ARTICLE 4. REPORTS
4.1 INTERIM REPORTS. The Parties shall exchange formal written interim
progress reports on a schedule agreed to by the PIs, but at least within
six (6) months after this CRADA becomes effective and at least within
every six (6) months thereafter. Such reports shall set forth the
technical progress made, identifying such problems as may have been
encountered and establishing goals and objectives requiring further
effort.
4.2 FINAL REPORTS. The Parties shall exchange final reports of their results
within four (4) months after completing the projects described in the RP
or after the termination of this CRADA.
ARTICLE 5. FINANCIAL AND STAFFING OBLIGATIONS
5.1 CDC AND COLLABORATOR CONTRIBUTIONS. The CDC contribution to the RP in
the form of personnel, services and property is designated in Appendix C.
The Collaborator contribution to the RP in the form of personnel,
services, property, support for staffing and/or funding is designated in
Appendix C. Payment schedules, if applicable, are also indicated in
Appendix C.
5.2 INSUFFICIENT AND EXCESS FUNDS. CDC shall not be obligated to perform any
of the research specified herein or to take any other action required by
this CRADA if the funding is not provided as set forth in Appendix C.
CDC shall return excess funds to the Collaborator when it sends its
final fiscal report pursuant to Article 5.3, except for staffing support
pursuant to Article 11.3.
5.3 ACCOUNTING RECORDS. CDC shall maintain separate and distinct current
accounts, records, and other evidence supporting all its obligations
under this CRADA, and shall provide the Collaborator with an annual
report reflecting the use of the Collaborator's funds and a final fiscal
report at the time that final reports are exchanged pursuant to
Article 4.2.
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ARTICLE 6. TITLE TO PROPERTY
6.1 CAPITAL EQUIPMENT. The purchase or use of capital equipment to carry
out this CRADA does not affect the ownership rights that would otherwise
apply. Equipment purchased by CDC with funds provided by the
collaborator shall be the property of CDC. All capital equipment
provided under this CRADA by one party for the use of another Party
remains the property of the providing Party unless other disposition is
mutually agreed upon in writing by the collaborating parties. If title
to this equipment remains with the providing Party, that Party is
responsible for maintenance of the equipment and the costs of its
transportation to and from the site where it will be used.
ARTICLE 7. INTELLECTUAL PROPERTY RIGHTS AND APPLICATIONS
7.1 REPORTING. The Parties shall promptly report to each other in writing
each Subject Invention resulting from the research conducted under this
CRADA that is reported to them by their respective employees. Such
reports shall be treated in confidence by the receiving Party until
such time as a patent or other Intellectual Property (IP) application,
as appropriate, claiming that Subject Invention has been filed.
Because of the royalty sharing provisions for Government inventors in
the Federal Technology Transfer Act of 1986, and in view of Article 8.4
of this CRADA which grants the Government a research license on
inventions made solely by the Collaborator, the Collaborator
acknowledges a special duty to report all Subject Inventions to CDC so
that CDC may determine whether or not inventors properly includes CDC
investigators.
7.2 COLLABORATOR EMPLOYEE INVENTIONS. The Collaborator may elect to retain
IP rights to any Subject Invention made solely by a Collaborator
employee. The Collaborator shall notify CDC promptly upon making this
election. If the Collaborator does not elect to retain its IP rights,
the Collaborator shall offer to assign these IP rights to the Subject
Invention to CDC pursuant to Article 7.5. If CDC declines such
assignment, the Collaborator may release its IP rights to its employee
inventors pursuant to Article 7.6.
7.3 CDC EMPLOYEE INVENTION. CDC, on behalf of the U.S. Government, may elect
to retain IP fights to each Subject Invention made solely by CDC
employees. If CDC does not elect to retain IP rights, CDC shall offer to
assign these IP rights to such Subject Invention to the Collaborator
pursuant to Article 7.5. If the Collaborator declines such assignment,
CDC may release IP rights in such Subject Invention to its employee
inventors pursuant to Article 7.6.
7.4 JOINT INVENTIONS. Each Subject Invention made jointly by CDC and
Collaborator employees shall be jointly owned by CDC and the
Collaborator. The Collaborator may elect to file the joint patent or
other IP application(s) thereon and shall notify CDC promptly upon making
this election. If the Collaborator decides to file such applications, it
shall do so in a timely manner and at its own expense. If the
Collaborator does not elect to file such application(s), CDC on behalf of
the U.S. Government, shall have the right to file the joint applications
in a timely manner and at its own expense. If either Party decides not
to retain its IP rights to a jointly owned Subject Invention, it shall
offer to assign such rights to the other Party pursuant to Article 7.5.
If the other Party declines such assignment, the offering Party may
release its IP rights to employee inventors pursuant to Article 7.6.
7.5 FILING OF PATENT APPLICATIONS. With respect to Subject Inventions made
by the Collaborator as described in Article 7.2 or by CDC as described
in Article 7.3, a Party exercising its right to elect to retain IP rights
to a Subject Invention agrees to file patent or other IP applications in
a timely manner and at its own expense. The Party may elect not to file
a patent or other IP application thereon in any particular country or
countries provided it so advises the other Party ninety (90) days prior
to the expiration of any applicable filing deadline, priority period or
statutory bar date, and hereby agrees to assign its IP rights, title
and interest in such country or countries to the Subject Invention to
the other Party and to cooperate
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in the preparation and filing of a patent or other IP applications.
In any countries in which title to patent or other IP fights is
transferred from CDC to the Collaborator, the Collaborator agrees that
CDC inventors will share in any royalty distribution that the
Collaborator pays to its own inventors.
7.6 RELEASE TO INVENTORS. In the event neither of the Parties to this CRADA
elects to file a patent or other IP application on a Subject Invention,
either or both (if a joint invention) may release their IP rights to
their respective employee inventor(s) with a nonexclusive,
non-transferrable, royalty-free license being retained by each Party.
7.7 PATENT EXPENSES. The expenses attendant to the filing of patent or
other IP applications generally shall be paid by the Party filing such
application. If an exclusive license to any Subject Invention is granted
to the Collaborator by CDC, the Collaborator shall reimburse CDC for the
reasonable past and ongoing funds expended worldwide for filing
prosecuting and maintaining any applications. The Collaborator may waive
its exclusive license fights on any application, patent or other IP
grant at any time, and incur no subsequent compensation obligation for
that application, patent or IP grant.
7.8 PROSECUTION OF INTELLECTUAL PROPERTY APPLICATIONS. Each Party shall
provide the other Party with copies of the applications it files on any
Subject Invention along with the power to inspect and make copies of all
documents retained in the patent or other IP application files by the
applicable patent or other IP office. The Parties agree to consult with
each other with respect to the prosecution of Subject Inventions
described in Article 7.3 and joint Subject Inventions described in
Article 7.4. If the Collaborator elects to file and prosecute IP
applications on joint Subject Inventions pursuant to Article 7.4, CDC
will be granted an associate power of attorney (or its equivalent) on
such IP applications.
ARTICLE 8. LICENSING
8.1 OPTION FOR EXCLUSIVE COMMERCIALIZATION LICENSE. With respect to
Government IP rights to any Subject Invention not made solely by the
Collaborator's employees for which a patent or other IP application is
filed, CDC grants to the Collaborator an option to negotiate, in good
faith, the terms of an exclusive or nonexclusive commercialization
license that fairly reflects the relative contributions of the Parties
to the invention and the CRADA, the risks incurred by the Collaborator,
and the costs of subsequent research and development needed to bring
the invention to the marketplace. The license will specify the licensed
fields of use, breadth of exclusivity and royalties. Royalty rates will
be based on product sales and the rates conventionally granted in the
field identified in the RP for inventions with reasonably similar
commercial potential Royalty rates generally will not exceed a rate
within the range of [***] for extensive commercialization licenses.
Contingent royalty schemes based on, e.g., patent issuance or
nonissuance, and provisions treating the stacking of royalties or
packaging of other licensed inventions developed under this CRADA may be
provided. Extensive licensees will be expected to reimburse CDC for IP
expenses related to each licensed intellectual property, and may be
permitted to offset such reimbursement against future product royalties.
8.2 EXERCISE OF LICENSE OPTION. The option of Article 8.1 must be exercised
by written notice mailed within three (3) months after the patent or
other IP application is filed to:
CDC Technology Transfer Coordinator
Centers for Disease Control
1600 Clifton Road, N.E.
Building 1, B72, Mailstop A20
Atlanta, Georgia 30333
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Exercise of this option by the Collaborator initiates a negotiation
period that expires nine (9) months after the patent or other IP
application filing date. If the last proposal by the Collaborator has
not been responded to in writing by CDC within this nine (9) month
period, the negotiation period shall be extended to expire one (1) month
after CDC so responds, during which month the Collaborator may accept in
writing the final license proposal of CDC. After that time, CDC will be
free to license such IP rights to others.
8.3 PRICING. CDC has a concern that there be a reasonable relationship
between the pricing of a licensed product, the public investment in that
product, and the health and safety needs of the public. Accordingly,
extensive commercialization licenses granted for CDC intellectual
property rights may require that this relationship be supported by
reasonable evidence.
8.4 GOVERNMENT INTELLECTUAL PROPERTY RIGHTS. For inventions developed wholly
by CDC investigators or jointly with a Collaborator under this CRADA,
CDC is required by the Federal Technology Transfer Act of 1986, 15 U.S.C.
at Section 3710a(b)(2), to retain at least a nonexclusive, irrevocable,
paid-up license to practice the invention or to have the invention
practiced throughout the world by or on behalf of the U.S. Government.
For inventions developed wholly by the Collaborator under this CRADA,
the Collaborator agrees to grant a research license as described in
Article 8.5 to the Government.
8.5 RESEARCH LICENSES. CDC reserves the right under any IP license granted
by CDC to the Collaborator under this CRADA to grant nonexclusive
licenses to third parties to make and to use the licensed invention for
purposes of research involving the invention ifself, and not for
purposes of commercial manufacture or in lieu of purchase as a commercial
product for use in other research. CDC intends to consult with their
exclusive commercialization licensee(s) before granting research licenses
to commercial entities.
8.6 JOINT INVENTIONS NOT EXCLUSIVELY LICENSED. In the event that the
Collaborator does not choose to acquire an exclusive commercialization
license to IP rights in joint Subject Inventions described in Article
7.4, then each Party shall have the right to use the joint Subject
Invention and to license its use to others. The Parties may agree to a
joint licensing approach for such IP rights.
ARTICLE 9. PROPRIETARY RIGHTS AND PUBLICATION
9.1 RIGHT OF ACCESS. CDC and the Collaborator agree to exchange all Subject
Data and Research Results produced in the course of research under this
CRADA, whether developed solely by CDC, jointly with the Collaborator, or
solely by the Collaborator. Tangible research products developed under a
CRADA will be shared equally by the Parties to the CRADA unless other
disposition is agreed to by the Principal Investigators. All Parties to
this CRADA will be free to utilize Subject data and Research Results for
their own purposes, consistent with their obligations under this CRADA.
9.2 OWNERSHIP OF SUBJECT DATA IN RESEARCH RESULTS. Subject to the sharing
requirements of Article 9.1, the producing Party will retain ownership
of and title to all Subject Inventions, all Subject Data and all
Research Results produced solely by their investigators. Jointly
developed Subject Inventions, Subject Data and Research Results will be
jointly owned. However, except as may be afforded through IP rights that
require public disclosure of the protected subject matter (e.g.,
patents), CDC does not have statutory authority to limit (or agree with
the Collaborator to limit) dissemination of Subject Data or Research
Results developed solely by CDC investigators or jointly with the
Collaborator. Accordingly, CDC may not agree to exclude others from
utilizing or commercializing such Subject Data or Research Results.
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9.3 PROPRIETARY AND CONFIDENTIAL INFORMATION. Each Party agrees to limit its
disclosure of Proprietary Information to the amount necessary to carry
out the Research Plan of this CRADA, and shall place a confidentiality
notice on all such information. Research materials required for the RP
may also be designated as Proprietary Information.
Each Party receiving Proprietary Information agrees that any information
so designated shall be used by it only for the purposes described in the
attached Research Plan. Any Party may object to the designation of
information as Proprietary Information by another Party and may decline
to accept such information. Data and research products developed solely
by the Collaborator may be designated as Proprietary Information when
they are wholly separable from the data and research product categories
as set forth in the RP. The exchange of confidential information should
be similarly limited and treated. Unless disclosure is otherwise
mutually agreed upon, all Parties to this CRADA agree to keep CRADA
Subject Data and Research Results confidential, to the extent permitted
by law, until they arc published or corresponding patent or other IP
application(s) have been filed.
9.4 PROTECTION OF PROPRIETARY INFORMATION. Proprietary Information shall not
be disclosed, copied, reproduced or otherwise made available to any
other person or entity without the consent of the owning Party except as
may be required under court order or the Freedom of Information Act (5
U.S.C. Section 552). Each Party agrees to use its best efforts to main-
tain the confidentiality of Proprietary Information. Each Party agrees
that another Party is not liable for the disclosure of Proprietary
Information which, after notice to and consultation with the concerned
Party, another Party in possession of the Proprietary Information
determines the information may not lawfully bc withheld, provided the
concerned Party has been given an opportunity to obtain a court order to
enjoin disclosure.
9.5 DURATION OF CONFIDENTIALITY OBLIGATION. The obligation to maintain the
confidentiality of Proprietary Information shall expire at the earlier of
the date when the information is no longer Proprietary Information as
defined in Article 2.2 or three (3) years after the expiration or
termination date of this CRADA. The Collaborator may request an extension
to this term when necessary to protect Proprietary Information relating
to products not yet commercialized.
9.6 PUBLICATION. The Parties are encouraged to make publicly available the
results of their research. Before either Party submits a paper or
abstract for publication or otherwise intends to publicly disclose
information about a Subject Invention, Subject Data or Research Results,
the other Party shall be provided thirty (30) days to review the
proposed publication or disclosure to assure that Proprietary
Information is protected. The publication or other disclosure shall be
delayed for up to (thirty) 30 additional days upon written request by
any Party as necessary to preserve U.S. or foreign patent or other IP
rights.
ARTICLE 10. REPRESENTATIONS AND WARRANTIES
10.1 REPRESENTATIONS AND WARRANTIES OF CDC. CDC hereby represents and warrants
to the Collaborator that the Official signing this CRADA has authority to
do so.
10.2 REPRESENTATIONS AND WARRANTIES OF THE COLLABORATOR. The Collaborator
hereby represents and warrants to CDC that the Collaborator has the
requisite power and authority to enter into this CRADA and to perform
according to its terms, and that the Collaborator's Official signing
this CRADA has authority to do so. The Collaborator further represents
that it is financially able to satisfy any funding commitments made in
Appendix C.
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ARTICLE 11. TERMINATION
11.1 TERMINATION BY MUTUAL CONSENT. The CDC and the Collaborator may terminate
this CRADA, or portions thereof, at any time by mutual written consent.
In such event the Parties shall specify the disposition of all property,
inventions, patents and other IP applications and other results of work
accomplished or in progress, arising from or performed under this CRADA.
11.2 UNILATERAL TERMINATION. Either CDC or the Collaborator may unilaterally
terminate this entire CRADA at any time by giving the written notice at
least thirty (30) days prior to the desired termination date, and any
rights accrued in property, patents or other IP shall be disposed of as
in 11.1.
11.3 STAFFING. If this CRADA is mutually or unilaterally terminated prior to
its expiration, funds will nevertheless remain available to CDC for
continuing any staffing commitment made by the Collaborator pursuant
to Article 5.1 above and Appendix C, ff applicable, for a period of six
(6) months after such termination. If there are insufficient funds to
cover this expense, the Collaborator agrees to pay the difference.
11.4 NEW COMMITMENTS. No party shall make new commitments related to this
CRADA after a mutual or unilateral termination and shall, to the extent
feasible, cancel all outstanding commitments and contracts by the
termination date.
11.5 TERMINATION COSTS. Concurrently with the exchange of final reports
pursuant to Articles 4.2 and 5.3, CDC shall submit to the Collaborator
for payment a statement of all costs incurred prior to the date of
termination and for all reasonable termination costs including the cost
of returning Collaborator property or removal of abandoned property.
ARTICLE 12. DISPUTES
12.1 SETTLEMENT. Any dispute arising under the CRADA which is not disposed of
by agreement of the Principal Investigators shall bc submitted jointly
to the signatories of this CRADA. If the signatories are unable to
jointly resolve the dispute within thirty (30) days after notification
thereof, the Assistant Secretary of Health (or his/her designee) shall
propose a resolution. Nothing in this section shall prevent any Party
from pursuing any and all administrative and/or judicial remedies which
may be available.
12.2 CONTINUATION OF WORK. Pending the resolution of any dispute or claim
pursuant to this Article, the Parties agree that performance of all
obligations shall be pursued diligently in accordance with the direction
of the CDC signatory.
ARTICLE 13. LIABILITY
13.1 PROPERTY. The U.S. Government shall not be responsible for damages to any
property of the Collaborator provided to CDC or acquired by CDC pursuant
to this CRADA.
13.2 NO WARRANTY. Except as specifically stated in Article 10, the Parties
make no express or implied warranty as to any matter whatsoever,
including the conditions of the research or any invention or product,
whether tangible or intangible, made, or developed under this CRADA, or
the ownership, merchantability, or fitness for a particular purpose of
the research or any invention or product.
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13.3 INDEMNIFICATION. The Collaborator agrees to hold the U.S. Government
harmless and to indemnify the Government for all liabilities, demands,
damages, expenses and losses arising out of the use by the Collaborator
for any purpose of the Subject Data, Research results and/or Subject
Inventions produced in whole or part by CDC employees under this CRADA,
unless due to the negligence of CDC, its employees or agents. The
Collaborator shall be liable for any claims or damages it incurs in
connection with this CRADA. CDC has no authority to indemnify the
Collaborator.
13.4 FORCE MAJEURE. Neither party shall be liable for any unforeseeable event
beyond its reasonable control not caused by the fault or negligence of
such Party, which causes such Party to be unable to perform its
obligations under this CRADA, and which it has been unable to overcome by
the exercise of due diligence. In the event of the occurrence of such a
force majeure event, the Party unable to perform shall promptly notify
the other Party. It shall further use its best efforts to resume
performance as quickly as possible and shall suspend performance only
for such period of time as necessary as a result of the force majeure
event.
ARTICLE 14. MISCELLANEOUS
14.1 GOVERNING LAW. The construction, validity, performance and effect of
this CRADA shall be governed by Federal Law, as applied by the Federal
Courts. Federal law and regulations will preempt any conflicting or
inconsistent provisions in this CRADA.
14.2 ENTIRE AGREEMENT. This CRADA constitutes the entire agreement between
the Parties concerning the subject matter of this CRADA and supersedes
any prior understanding of written or oral agreement.
14.3 HEADINGS. Titles and headings of the sections and subsections of this
CRADA are for the convenience of references only and do not form a
part of this CRADA and shall in no way affect its interpretation.
14.4 WAIVERS. None of the provisions of this CRADA shall be considered waived
by any Party unless such waiver is given in writing to the other Party.
The failure of a Party to insist upon strict performance of any of the
terms and conditions hereof, or failure or delay to exercise any rights
provided herein or by law, shall not be deemed a waiver of any rights of
any Party.
14.5 SEVERABILITY. The illegality or invalidity of any provisions of this
CRADA shall not impair, affect or invalidate the other provisions of
this CRADA.
14.6 AMENDMENTS. If either party desires a modification to this CRADA, the
Parties shall, upon reasonable notice of the proposed modification or
extension by the Party desiring the change, confer in good faith to
determine the desirability of such modification or extension. Such
modification shall not be effective until a written amendment is signed
by the signatories to this CRADA or by their representatives duly
authorized to execute such amendment.
14.7 ASSIGNMENT. Neither this CRADA nor any rights or obligations of any
Party hereunder shall be assigned or otherwise transferred by either
Party without the prior written consent of the other Party.
14.8 NOTICES. All notices pertaining to or required by this CRADA shall be
in writing and shall be signed by an authorized representative and shall
be delivered by hand or sent by certified mail, return receipt requested,
with postage prepaid, to addresses indicated on the signature page for
each Party. Notices regarding the exercise of license options shall be
made pursuant to Article 8.2. Any Party may change such address by notice
given to the other Party in the manner set forth above.
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14.9 INDEPENDENT CONTRACTORS. The relationship of the Parties to this CRADA is
that of independent contractors and not as agents of each other or as
joint venturers or partners. Each Party shall maintain sole and exclusive
control over its personnel and operations. Collaborator employees who
will be working at CDC facilities may be asked to sign a Guest Researcher
or Special Volunteer Agreement appropriately modified in view of the
terms of this CRADA.
14.10 USE OF NAME OR ENDORSEMENTS. By entering into this Agreement, CDC does
not directly or indirectly endorse any product or service provided, or
to be provided, whether directly or indirectly related to either this
CRADA or to any patent license or other IP license or agreement which
implements this CRADA by its successors, assignees, or licensees. The
Collaborator shall not in any way state or imply that this CRADA is an
endorsement of any such product or service by the U.S. Government or any
of its organizational units or employees.
14.11 EXCEPTIONS TO THIS CRADA. Any exceptions or modifications to this CRADA
that are agreed to by the Parties prior to their execution of this CRADA
are set forth in Appendix D.
14.12 REASONABLE CONSENT. Whenever a Party's consent or permission is required
under this CRADA, such consent or permission shall not be unreasonably
withheld.
ARTICLE 15. DURATION OF AGREEMENT
15.1 DURATION. It is mutually recommended that this project cannot be rigidly
defined in advance and that the contemplated time periods for various
phases of the RP are only good faith guidelines subject to adjustment
by mutual agreement to fit circumstances as the RP proceeds. In no case
will the term of this CRADA extend beyond the term indicated in the RP
unless it is revised in accordance with Article 14.6.
15.2 SURVIVABILITY. The provisions of Articles 4.2, 5.2, 5.3, 6.1, Articles
7-9, 11.3, 11.5, 12.1, 13.3 and 14.10 shall survive the termination of
this CRADA.
CRADA #: CID-93-045-00
FOR THE CDC: FOR THE COLLABORATOR:
/s/Joseph McDade 2/25/93 /s/Paul J. Maddon 2/19/93
- --------------------------------- --------------------------------
SIGNATURE DATE SIGNATURE DATE
Joseph McDade Paul J. Maddon, M.D., Ph.D.
- --------------------------------- --------------------------------
TYPED NAME TYPED NAME
Associate Director for Laboratory Chairman and CEO
- --------------------------------- --------------------------------
TITLE TITLE
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APPENDIX A
CENTERS FOR DISEASE CONTROL AND PREVENTION (CDC)
AND THE
AGENCY FOR TOXIC SUBSTANCES AND DISEASE REGISTRY
POLICY STATEMENT ON
COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENTS
AND INTELLECTUAL PROPERTY LICENSING
This Statement sets forth the policies of the Centers for Disease Control and
Prevention (CDC) and the Agency for Toxic Substances and Disease Registry
(ATSDR) on various aspects of cooperative research and intellectual property
licensing. These policies apply to the negotiation of CDC and ATSDR
Cooperative Research and Development Agreements (CRADAs). License agreements
for intellectual property rights to inventions developed under a CRADA or
through the CDC and ATSDR intramural research programs, whether negotiated by
CDC and ATSDR or by the National Technical Information Service on its
behalf, will also incorporate these policies. This statement may be revised
as appropriate.
The Federal Technology Transfer Act of 1986 (FTTA, 15 U.S.C. at Section
3710), Executive Order 12591 of April 10, 1987, orders Federal laboratories
to assist universities and the private sector in broadening our national
technology base by moving new knowledge from the research laboratory into the
development of new products and processes. While Federal patent law (35
U.S.C. at Sections 200-212) authorizes the licensing of Government-owned
patent rights, the FTTA seeks to facilitate technological collaboration at an
earlier stage. Thus the FTTA authorizes Federal laboratories to enter into
CRADAs and to agree to grant intellectual property rights in advance to
collaborators for inventions made in whole or part by Federal employees under
the CRADA. Besides assisting in the transfer of commercially useful
technologies from Federal laboratories to the marketplace, CRADAs make
outside resources more accessible to Federal investigators.
The CDC and ATSDR, agencies of the U.S. Public Health Service (PHS) within
the Department of Health and Human Services (HHS), are lead Federal agencies
for prevention and control of disease and disability in the U.S. and
throughout the world. The CDC and ATSDR primary goals are to prevent
disease, illness, injuries, and disability before they occur, and to promote
health. Under the FTTA, 15 U.S.C. at Section 3710(a)2, technology transfer,
consistent with mission responsibilities, is also a responsibility of each
laboratory science and engineering professional. To achieve its goals, CDC
and ATSDR have developed an interdisciplinary research environment and
service program that promotes and encourages the free exchange of ideas and
information.
In order to safeguard the collegiality and integrity of, as well as public
confidence in, the CDC/ATSDR research programs, the following research and
technology transfer policies have been adopted.
1. RESEARCH FREEDOM
The CDC and ATSDR investigators generally are free to choose the subject
matter of their research, consistent with the mission of their
Center/Institute/Office (CIO) and the research programs of their
laboratories. No CRADA or license agreement may contravene this freedom.
<PAGE>
2. RESEARCH POLICY
The CDC and ATSDR research results generally are disseminated freely through
publication in the scientific literature and presentations at public fora.
Brief delays in the dissemination of research results may be permitted under
a CRADA as necessary in order to file corresponding patent or other
intellectual property applications. The CDC and ATSDR consider the filing of
such applications to be an important component of its research efforts.
3. COOPERATIVE RESEARCH AND DEVELOPMENT UNDER A CRADA
As defined by the FTTA, 15 U.S.C. at Section 3710(d)(1), a CRADA means any
agreement between one or more Federal laboratories and one or more
non-Federal parties, under which the Government provides personnel, services,
facilities, equipment or other resources (but not funds), and the non-Federal
parties provide funds, personnel, services, facilities, equipment or other
resources toward the conduct of specified research or development efforts.
Cooperative research and development activities are intended to facilitate
the transfer of federally funded research and development for use by State
and local governments, universities, and the private sector, particularly
small business.
4. CDC AND ATSDR CRADAS FOR COOPERATIVE RESEARCH
As adopted by CDC and ATSDR, a CRADA is a standardized agreement intended to
provide an appropriate legal framework for, and to expedite the approval of,
cooperative research and development projects. The use of CRADAs is
encouraged for cooperative efforts because they permit CDC and ATSDR to
accept, retain, and use funds, personnel, services, and property from
collaborating parties and to provide personnel, services, and property to
collaborating parties. The CDC and ATSDR may permit its investigator to
enter into CRADAs with collaborators who will make significant intellectual
contributions to the research project undertaken or who will contribute
essential research materials not otherwise reasonably available. While CDC
and ATSDR welcome contributions to its gift funds for research purposes, it
does not view CRADAs as a general funding source or a mechanism for sponsored
research. This approach to implementing the FTTA has been chosen in order to
maintain the public's confidence in CDC and ATSDR through maintaining an
independence from reliance on industry funding.
5. SELECTION OF COLLABORATORS UNDER A CRADA
Collaborators under a CRADA may be suggested by potential collaborators or by
CDC and ATSDR investigators. Generally, the decision to initiate the
approval process for a CRADA is made by the involved CDC or ATSDR
investigator and laboratory chief with the approval of Division and CIO
directors. Approval is based on scientific considerations and the desire for
the public to benefit from the application by the private sector of
particular CDC and ATSDR research. For some cooperative projects, where the
development and commercialization potential is more immediate relative to the
basic research aspects, CDC and ATSDR may seek a collaborator(s) which has
both scientific expertise and commercialization capabilities. In certain
areas of research, e.g. where the Government has the intellectual lead or
where both scientific and commercialization capabilities are deemed essential
at the outset, CDC and ATSDR may competitively seek a collaborator(s) through
Federal Register notification. The PHS has also developed policy guidelines
for ensuring fairness of access to PHS laboratories such as CDC in the
process of initiating and developing CRADAs. Additionally, from time to
time, CDC and ATSDR may sponsor industry collaboration fora to publicize
opportunities for collaboration to a wide audience.
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6. PROPRIETARY OR CONFIDENTIAL INFORMATION AND MATERIALS
The CDC and ATSDR recognize that an effective collaborative research program
may require the disclosure of proprietary information to CDC and ATSDR
investigators. Although agreements to maintain confidentiality are permitted
under a CRADA, collaborators should limit their disclosure of proprietary
information to the amount necessary to carry out the research plan of the
CRADA. The mutual exchange of confidential information, e.g. patient
identification data, should be similarly limited. The CDC and ATSDR also
recognize that cooperative research may require the exchange of proprietary
research materials. Such materials may be used only for the purposes
specified in the research plan set forth in the CRADA. All parties to the
CRADA will agree to keep CRADA research results confidential until they are
published or presented at a scientific meeting.
7. TREATMENT OF DATA AND RESEARCH PRODUCTS PRODUCED UNDER A CRADA
The CDC and ATSDR investigator and the collaborator will agree to exchange
all data and research products developed in the course of research under a
CRADA whether developed solely by CDC and ATSDR, jointly with the
collaborator, or solely by the collaborator. In general, tangible research
products developed under a CRADA will be shared equally by the parties to the
CRADA. All parties to a CRADA will be free to utilize such data and research
products for their own purposes. Data and research products developed solely
by the collaborator may be designated as proprietary by the collaborator
when they are wholly separable from the data and research products developed
jointly with CDC and ATSDR investigators. However, except as may be afforded
through intellectual property rights that require public disclosure of the
protected subject matter (e.g. patents), the CDC and ATSDR will not agree to
exclude others from utilizing or commercializing the data or research
products developed solely by CDC and ATSDR investigators or jointly with the
collaborator under a CRADA. Thus, intellectual property which is not
patented is not to be afforded trade secret status.
8. OWNERSHIP OF AND LICENSING OF CDC INTELLECTUAL PROPERTY RIGHTS
Pursuant to the FTTA, 15 U.S.C. at Section 3710(b)(2), a Federal laboratory
is authorized to own and license patent rights to inventions made in whole or
part by its employees under a CRADA. The term "invention" is defined at
Section 3703(9) to mean any invention or discovery which is or may be
patentable or otherwise protected under Title 35 or any novel variety of
plant which is or may be protectable under the Plant Variety Protection Act
(PVPA), 7 U.S.C. Section 2321 et seq. The patent law, 35 U.S.C. Section 207,
authorizes the ownership and licensing of intramural inventions. Executive
Order 12591 at Section 1(b)(1)(B) further authorizes the transfer of
Government intellectual property rights. Although the FTTA speaks broadly of
the transfer of "technology", CDC and ATSDR do not have statutory authority
to license (or to agree to limit dissemination) of technology developed in
whole or part by their investigators under a CRADA unless a patent, PVPA
certificate or other intellectual property application has been filed for
that technology. The CDC and ATSDR will retain the Government ownership
interest in, but license rights to, all intellectual property rights to
inventions developed solely by their investigators through intramural
research or developed in whole or in part under a CRADA.
9. GENERAL LICENSING POLICY
The CDC and ATSDR recognize that under the FTTA and the patent licensing law
to which it refers, Congress and the President have chosen to utilize the
patent system as the primary mechanism for transferring Government inventions
to the private sector. The importance of patents to commercialization in the
biomedical field is further reflected by the Drug Price Competition and
Patent Term Restoration Act of 1984 (Pub. L. 98-417). A fundamental
principle of the patent system is that the owner of a patent has a
time-limited "right to exclude others from making, using, or selling the
[patented] invention." The reason for such a period of exclusivity is to
encourage industry to invest the resources necessary to bring an invention
from the discovery stage through subsequent development, clinical trials,
regulatory approvals, and ultimately into commercial production. The CDC and
ATSDR accordingly are willing to grant exclusive commercialization licenses
under their patent or other intellectual property rights in cases where
substantial additional risks, time, and costs must be
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undertaken by a licensee prior to commercialization. Under a CRADA, CDC and
ATSDR are also willing to agree to grant exclusive commercialization licenses
in advance to collaborators. The CDC and ATSDR will attempt, however, to
license their intramural inventions nonexclusively in cases where an
invention reflects a relatively more advance stage in its commercial
development, e.g. when a CDC and ATSDR investigator invents a patentable new
therapeutic use for a known and FDA approved compound.
Federal laboratories are authorized to negotiate license agreements for
Government-owned patent rights in intramural inventions pursuant to 35 U.S.C.
Section 207. Although Section 207 does not apply to intellectual property
license agreements authorized by the FTTA for inventions made under a CRADA,
CDC and ATSDR have adopted the following approach of Section 207 for all
license agreements:
Each Federal Agency [may] ... grant nonexclusive, exclusive or
partially exclusive licenses under federally owned patent applications,
patents, or other forms of protection ... on such terms and conditions
... as determined appropriate in the public interest.
The CDC and ATSDR have determined it to be appropriate and in the public
interest to grant nonexclusive research licenses and either exclusive or
nonexclusive commercialization licenses to HHS owned intellectual property
rights according to the plan discussed below.
10. GOVERNMENT INVENTION RIGHTS
For inventions developed wholly by CDC and ATSDR investigators or jointly
with a collaborator under a CRADA, CDC and ATSDR are required by the FTTA at
15 U.S.C. Section 3710(a)(b)(2) to retain at least a nonexclusive,
irrevocable, paid-up license to practice the invention or to have the
invention practiced throughout the world by or on behalf of the U.S.
Government. When granting exclusive or partially exclusive licenses to CDC
and ATSDR intramural inventions, 35 U.S.C. Section 208, as implemented by 37
C.F.R. Section 404.7(2)(i), required the reservation of similar Government
rights. The CDC and ATSDR will not assert an ownership right in inventions
made solely by a collaborator under a CRADA, but will require the grant of a
research license, as described below, to the Government for inventions made
wholly by collaborator under a CRADA.
11. RESEARCH LICENSES
The CDC and ATSDR will reserve the right under any CRADA and intellectual
property license to grant nonexclusive licenses to make and to use such
property, for purposes of research involving the invention itself and not for
purposes of commercial manufacture or in lieu of purchase as a commercial
product for use in other research. The purpose of the research license is to
facilitate basic academic research. The CDC and ATSDR intends to consult
with any involved commercialization licensee(s) before granting research
licenses to commercial entities. The grant of any research license hereunder
does not permit CDC and ATSDR to grant any license to third parties to use
the invention for any commercial purpose.
12. COMMERCIALIZATION LICENSES
The CDC and ATSDR are willing to consider requests for nonexclusive or
exclusive commercialization licenses to intellectual property rights to
inventions developed under a CRADA or in the course of intramural research
pursuant to applicable statutes and regulations. Under a CRADA, CDC and ATSDR
generally will grant a time-limited option to negotiate, in good faith, the
terms of a license that fairly reflects the relative contributions of the
parties, the risks incurred by the collaborator and the costs of subsequent
research and development needed to bring the results of CRADA research to the
marketplace. The CDC and ATSDR consider the drafting of a model invention
license to serve as the starting point for license negotiations. It is
contemplated further that such a model will reduce negotiations essentially
to matters of execution fees, royalty rates, and minimum annual royalties.
Royalty rates will be based on product sales and the rates conventionally
granted in the field identified in the CRADA's research plan for inventions
with reasonably similar commercial
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potential. Royalty rates generally will not exceed a rate [***]
for exclusive commercialization licenses. Contingent royalty
schemes based on, e.g. patent issuance or nonissuance, and clauses treating
the stacking of royalties or packaging of other inventions developed under
the CRADA may be provided. Exclusive licensees will be expected to reimburse
CDC and ATSDR for intellectual property related expenses and may be permitted
to offset such reimbursement against future product royalties.
13. NONEXCLUSIVE COMMERCIALIZATION LICENSES
Unless a request for exclusive commercialization license is made under a
CRADA or submitted for an intramural invention, CDC and ATSDR will attempt to
license their inventions nonexclusively. Such nonexclusive licenses
generally will follow the guidelines of 37 C.F.R. Part 404.
14. EXCLUSIVE COMMERCIALIZATION LICENSES
The CDC and ATSDR exclusive commercialization requires the submission by a
prospective licensee of an acceptable development and commercialization plan
as described by 35 U.S.C. Section 209(a) and subsequent, periodic reports on
utilization of the invention as described by Section 209(f)(1). All such
plans and reports will be treated in confidence and as privileged from
disclosure under the Freedom of Information Act. Modification provisions as
described by Section 209(f)(2-4) may apply. In appropriate cases, CDC and
ATSDR may also reserve the right to grant separate exclusive
commercialization licenses in various fields of use. The remaining
provisions of 35 U.S.C. Section 200-212 will also apply to licenses to CDC
and ATSDR intramural inventions.
The CDC and ATSDR also consider the following provisions for exclusive
commercialization licenses to be necessary and appropriate in the public
interest:
(i) the exclusive licensee must pledge its reasonable best efforts to
commercialize a licensed invention and the development and
commercialization plan mentioned above may serve as the measure of such
efforts;
(ii) the CDC and ATSDR shall have the right, after notice and
opportunity to cure, to terminate or render nonexclusive any license
granted: (1) if the licensee is not reasonably engaged in research,
development, clinical trials, manufacturing, marketing, sublicensing,
or other activities reasonably necessary to the expeditious commercial
dissemination of the licensed invention; or (2) when the licensee
cannot reasonably satisfy unmet health and safety needs;
(iii) in order to maximize the commercialization of the licensed
invention in other fields of use not utilized by the exclusive licensee
through ongoing development, manufacturing, or sublicensing, CDC and
ATSDR reserve the right to require the licensee to grant sublicenses to
responsible applicants, on reasonable terms, in such other fields of
use unless the licensee can reasonably demonstrate that such a
sublicense would be contrary to sound and reasonable business practice
and the granting of the sublicense would not materially increase the
availability to the public of the licensed invention; and
(iv) exclusive licensees to HHS inventions, whether developed under a
CRADA or through intramural research, must agree to not unreasonably
deny requests for sublicense or cross license rights from future CRADA
collaborators when the possibility of acquiring such derivative rights
is necessary in order to permit a proposed cooperative research project
with CDC and ATSDR to go forward, and the exclusive licensee has been
given a reasonable opportunity to join as a party to the proposed
CRADA. The grant of any sublicense or cross license rights hereunder
does not grant future CRADA collaborators a license to use or CDC and
ATSDR the right to grant to future CRADA collaborators a license to use
any inventions of the instant CRADA for any commercial purpose.
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15. COMPLIANCE UNDER CRADAS WITH OTHER POLICIES
For research conducted pursuant to a CRADA, collaborators must agree to
comply with PHS, CDC, and ATSDR policies and guidelines concerning, e.g.
human subjects research, the use of research animals, recombinant DNA and
other policy statements as may be promulgated from time to time.
16. PRICING
HHS has the responsibility for funding basic biomedical research, for funding
medical treatment through programs such as medicare and medicaid, for
providing direct medical care, and more generally, for protecting the health
and safety of the public. Because of these responsibilities, and the public
investment in the research that contributes to a product licensed under a
CRADA, HHS has a concern that there be a reasonable relationship between the
pricing of a licensed product, the public investment in the product, and the
health and safety needs of the public.
17. WAIVERS
The CDC and ATSDR will consider requests to modify any of the foregoing
policies in special cases where public health exigencies or commercial
situations warrant such a modification. Modifications dealing with business
terms such as royalties are not decided by the CDC and ATSDR investigators
and should be discussed with the appropriate CDC and ATSDR technology
management personnel.
18. SPECIAL CONSIDERATION AND PREFERENCE UNDER A CRADA
The CDC and ATSDR will give special consideration to entering into CRADAs with
small business firms and consortia involving small business firms; and will
give preference to business units located in the United States which agree to
manufacture substantially in the United States products which embody
inventions developed in the course of research under CRADAs.
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CRADA #: CID-93-045-00
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CRADA CID-93-045-00
APPENDIX C
STAFFING AND MONETARY COMMITMENTS
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[DIAGRAM]
[DIAGRAM]
Figure 1
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[DIAGRAM]
[DIAGRAM]
Figure 2
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Exhibit 10.19
LICENSE AGREEMENT
NO. W 960625
ANTIGENIC COMPOSITIONS AND METHODS FOR USING SAME
PROGENICS PHARMACEUTICALS
AND
THE REGENTS OF THE
UNIVERSITY OF CALIFORNIA
<PAGE>
LICENSE AGREEMENT
No. W 960625
TABLE OF CONTENTS
ARTICLE PAGE NUMBER
- ------- -----------
RECITALS ...............................................................1
1. DEFINITIONS ....................................................1
2. GRANT ..........................................................2
3. SUBLICENSES ....................................................3
4. CONSIDERATION ..................................................3
5. ROYALTIES ......................................................3
6. DILIGENCE ......................................................4
7. PATENT FILING, PROSECUTION AND MAINTENANCE .....................5
8. PATENT INFRINGEMENT ............................................6
9. PROGRESS AND ROYALTY REPORTS ...................................7
10. BOOKS AND RECORDS ..............................................7
11. LIFE OF THE AGREEMENT ..........................................7
12. TERMINATION BY THE REGENTS .....................................8
13. TERMINATION BY PROGENICS .......................................8
14. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION ......8
15. PATENT MARKING .................................................9
16. USE OF NAMES AND TRADEMARKS ....................................9
17. LIMITED WARRANTY ...............................................9
18. INDEMNIFICATION ...............................................10
19. NOTICES .......................................................10
20. ASSIGNABILITY .................................................11
21. LATE PAYMENTS .................................................11
22. WAIVER ........................................................11
23. FAILURE TO PERFORM ............................................11
24. GOVERNING LAWS ................................................11
25. GOVERNMENT APPROVAL OR REGISTRATION ...........................12
26. EXPORT CONTROL LAWS ...........................................12
27. PREFERENCE FOR UNITED STATES INDUSTRY .........................12
28. FORCE MAJEURE .................................................12
29. ARBITRATION ...................................................12
30. CONFIDENTIALITY ...............................................12
31. MISCELLANEOUS .................................................13
<PAGE>
LICENSE AGREEMENT
No. W 960625
This Agreement is made and is effective this 25th day of June 1996, (the
"Effective Date") between THE REGENTS OF THE UNIVERSITY OF CALIFORNIA ("The
Regents"), a California corporation having its corporate offices located at
300 Lakeside Drive, 22nd Floor, Oakland, California 94612-3550, acting
through its offices located at Box 951525, 405 Hilgard Avenue, Los Angeles,
California 90095-1525, and PROGENICS PHARMACEUTICALS, INC. ("Progenics"), a
corporation having a principal place of business at Old Saw Mill River Road,
Tarrytown, NY 10591.
RECITALS
WHEREAS, a certain invention (the "Invention"), generally characterized as
"Antigenic Compositions and Methods for Using Same" (U.S. Case No.
92-078-01), was made in the course of research at the University of
California, Los Angeles by Reiko Irie, Tadashi Tai, Donald L. Morton, James
C. Paulson and Leslie Cahan, and is covered by Regents' Patent Rights as
defined below;
WHEREAS, the Invention was developed with United States Government funds, and
The Regents granted a royalty-free nonexclusive license to the United States
Government on January 18, 1983, as required under 35 U.S.C. Section 201-212;
WHEREAS, Progenics is a "small business firm" as defined in 15 U.S.C.
Section 42; and
WHEREAS, The Regents wishes that Regents' Patent Rights be developed and
utilized to the fullest extent so that the benefits can be enjoyed by the
general public.
The parties agree as follows:
1. DEFINITIONS
1.1 "Regents' Patent Rights" means patent rights to any subject matter
claimed in or covered by the patent entitled "Antigenic Compositions
and Methods for Using Same", U.S. patent no. 4,557,931 (filed
December 10, 1985), assigned to The Regents (UCLA Case No.
LA92-078-01), including reissues and reexaminations.
1.2 "Licensed Product" means any article, composition, apparatus,
substance, chemical, or any other material covered by Regents'
Patent Rights or whose manufacture, use or sale would constitute an
infringement of any claim within Regents' Patent Rights, or any
service, article, composition, apparatus, chemical, substance, or any
other material made, used, or sold by or utilizing or practicing a
Licensed Method.
1.3 "Licensed Method" means any process or method which is covered by
Regents' Patent Rights or whose use or practice would constitute an
infringement of any claim within Regents' Patent Rights.
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1.4 The "Licensed Field" shall mean all fields of use.
1.5 "Affiliate" means any corporation or other business entity in which
Progenics owns or controls, directly or indirectly, at least 50% of
the outstanding stock or other voting rights entitled to elect
directors. In any country where the local law does not permit foreign
equity participation of at least 50%, then "Affiliate" means any
company in which Progenics owns or controls, directly or indirectly,
the maximum percentage of outstanding stock or voting rights that is
permitted by local law.
1.6 "First Commercial Sale" means the first sale of any Licensed Product
by Progenics or any Affiliate or Sublicensee, following approval of
its marketing by the appropriate governmental agency for the country
in which the sale is to be made. When governmental approval is not
required, "First Commercial Sale" means the first sale in that
country.
1.7 [***]
1.8 "Sublicensee" means any third party sublicensed by Progenics to make,
have made, use, sell, or have sold any Licensed Product or to
practice any Licensed Method.
1.9 [***]
2. GRANT
2.1 The Regents hereby grants to Progenics an exclusive license (the
"License") under Regents' Patent Rights, in jurisdictions where
Regents' Patent Rights exist, to make, have made, use, sell, have
sold and offer to sell Licensed Products and to practice Licensed
Methods in the Licensed Field.
2.2 The License is subject to all the applicable provisions of any
license to the United States Government executed by The Regents.
The License is subject to any overriding obligations to the United
States Federal Government under 35 U.S.C. Section 201-212.
2.3 The Regents expressly reserves the right to use Regents' Patent
Rights and associated technology for educational, research and
clinical purposes and for any other purpose that is not inconsistent
with the rights granted to Progenics in this Agreement.
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3. SUBLICENSES
3.1 The Regents also grants to Progenics the right to issue exclusive or
nonexclusive sublicenses ("Sublicenses") to third parties to make,
have made, use, sell, and have sold Licensed Products and to practice
Licensed Methods in any jurisdiction under which Progenics has
exclusive rights under this Agreement. All Sublicenses will be
subject to the rights of The Regents under this Agreement.
Sublicenses will also be subject to the rights of the United States
Federal Government under 35 U.S.C. Section 201-212.
3.2 Progenics must pay to The Regents [***]
3.3 Progenics must provide to The Regents a copy of each Sublicense
within 30 days of execution, and a copy of all information submitted
to Progenics by Sublicensee relevant to the computation of the
payments due to The Regents under this Article 3.
3.4 If this Agreement is terminated for any reason, all outstanding
Sublicenses will be assigned by Progenics to The Regents. The
Sublicenses will remain in full force and effect with The Regents
as the licensor or sublicensor instead of Progenics, but the duties
of The Regents under the assigned Sublicenses will not be greater
than the duties of The Regents under this Agreement, and the rights
of The Regents under the assigned Sublicenses will not be less than
the rights of The Regents under this Agreement, including all
financial consideration and other rights of The Regents.
4. CONSIDERATION
4.1 In consideration for the License, Progenics will pay to The Regents
[***] within 30 days of the Effective Date. This fee is
nonrefundable and is not an advance against royalties.
4.2 Progenics must pay to The Regents [***] beginning on the
one-year anniversary date of the Effective Date of this Agreement and
continuing annually on each anniversary date of the Effective Date.
The maintenance fee will not be due and payable on any anniversary
date of the Effective Date if on that date Progenics is commercially
selling a Licensed Product and paying an earned royalty to The
Regents on the sales of that Licensed Product.
The license maintenance fees are non-refundable and are not an
advance against royalties.
5. ROYALTIES
5.1 Progenics must pay to The Regents for sale of Licensed Product(s)
sold by Progenics or its Affiliates an earned royalty of [***]
5.2 Paragraphs 1. 1, 1.2 and 1.3 define Regents' Patent Rights, Licensed
Products and Licensed Methods so that royalties are payable on
products covered by issued patents. Royalties accrue for the duration
of this Agreement.
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5.3 Progenics must pay royalties owed to The Regents on a quarterly
basis. Progenics must pay the royalties within two months of the
end of the calendar quarter in which the royalties accrued.
5.4 All monies due The Regents must be paid in United States funds. When
Licensed Products are sold for monies other than United States
dollars, the royalties will first be determined in the foreign
currency of the country in which those Licensed Products were sold
and, second, converted into equivalent United States funds. Progenics
must use the exchange rate established by the Bank of America in San
Francisco, California on the last day of the calendar quarter.
5.5 Any tax for the account of The Regents required to be withheld by
Progenics under the laws of any foreign country must be promptly paid
by Progenics for and on behalf of The Regents to the appropriate
governmental authority. Progenics will use its best efforts to
furnish The Regents with proof of payment of any tax. Progenics is
responsible for all bank transfer charges. All payments made by
Progenics in fulfillment of The Regents' tax liability in any
particular country will be credited against fees or royalties due
The Regents for that country.
5.6 If legal restrictions in any country prevent the prompt remittance by
Progenics of some or all royalties, then Progenics will have the
right and option to make those payments by depositing them in local
currency to The Regents' account in a bank or other depository in
that country. If the royalties still cannot be returned to the United
States after one year of good-faith efforts by The Regents to recover
them, Progenics will be responsible for payment in the United States.
5.7 If any patent or any claim included in Regents' Patent Rights is held
invalid or unenforceable in a final decision by a court of competent
jurisdiction from which no appeal has or can be taken, all obligation
to pay royalties based on that patent or claim or any claim
patentably indistinct from it will cease as of the date of that final
decision. Progenics will not, however, be relieved from paying any
royalties that accrued before that decision or that are based on
another patent or claim not involved in that decision.
5.8 If Progenics transfers Licensed Products for end-use to itself or an
Affiliate or Sublicensee, that transfer is considered a sale at list
price, and Progenics must pay a royalty in accordance with this
Article 5 (Royalties). If Progenics sells a Licensed Product to an
Affiliate or Sublicensee at a price lower than that customarily
charged to an unrelated third party, the royalties paid to The
Regents will be based on the Net Sales of Licensed Products by the
Affiliate or Sublicensee to their customers.
6. DILIGENCE
6.1 Upon the execution of this Agreement, Progenics must diligently
proceed with the development, manufacture and sale
("Commercialization") of Licensed Products and must earnestly and
diligently endeavor to market them within a reasonable time after
execution of this Agreement and in quantities sufficient to meet the
market demands for them.
6.2 Progenics must endeavor to obtain all necessary governmental
approval for the Commercialization of Licensed Products.
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6.3 The Regents has the right and option to terminate this Agreement if
Progenics fails to perform any of the terms in this Paragraph 6.3.
This right, if exercised by The Regents, supersedes the rights
granted in Article 2 (Grant).
[***]
6.4 To exercise its right under Paragraph 6.3 to terminate this
Agreement, The Regents must give Progenics written notice of the
deficiency. Progenics thereafter has 60 days to cure the deficiency
or to request arbitration. If The Regents does not receive within
the 60 days either a written request for arbitration or satisfactory
tangible evidence that Progenics has cured the deficiency, then The
Regents may, at its option, terminate this Agreement by giving
written notice to Progenics.
6.5 Progenics has the sole discretion for making all decisions as to how
to commercialize any Licensed Product.
7. PATENT FILING, PROSECUTION AND MAINTENANCE
7.1 The Regents will maintain the patents comprising Regents' Patent
Rights. These patents will be held in the name of The Regents and
will be maintained with counsel of The Regents' choice. The Regents
must provide Progenics with copies of each patent request for
terminal disclaimer, and request for reissue or reexamination
of any patent under Regents' Patent Rights. The Regents will consider
any comments or suggestions by Progenics. The Regents is entitled
to take action to preserve rights and minimize costs whether or not
Progenics has commented.
7.2 Progenics will bear all costs incurred during the term of this
Agreement in the maintenance of patents in Regents' Patent Rights.
Progenics will reimburse The Regents for the maintenance fees for the
Patent and the reasonable attorney's fees for services in connection
with the payment of the maintenance fees. Progenics must send payment
to The Regents within 30 days of Progenics's receipt of an invoice.
7.3 Progenics' obligation to underwrite and to pay all United States
patent costs will continue for as long as this Agreement remains in
effect. Progenics may terminate its obligations with respect to any
given patent upon three months written notice to The Regents. The
Regents will use its best efforts to curtail patent costs chargeable
to Progenics under this Agreement after this notice is received from
Progenics. The Regents may continue prosecution or maintenance of
these application(s) or patent(s) at its sole discretion and expense,
and Progenics will have no further rights or licenses to them.
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7.4 The Regents will use its best efforts to not allow any Regents'
Patent Rights for which Progenics is licensed and is underwriting
the costs of to lapse or become abandoned without Progenics'
authorization or reasonable notice. The Regents must notify
Progenics 90 days prior to the proposed abandonment. Within 30 days
after receipt of the notice, Progenics must, in writing, either (a)
concur in the abandonment or (b) elect to assume responsibility
for the prosecution and maintenance of all Patent Rights that The
Regents proposes to abandon. Lack of written response to The Regents
within 30 days will constitute concurrence.
8. PATENT INFRINGEMENT
8.1 In the event that Progenics learns of the substantial infringement of
any patent in Regents' Patent Rights, Progenics will inform The
Regents in writing and will provide The Regents with reasonable
evidence of the infringement. During the period and in a jurisdiction
where Progenics has exclusive rights under this Agreement, neither
party will notify a third party of the infringement of any of
Regents' Patent Rights without first obtaining consent of the other
party, which consent must not be unreasonably denied. Both parties
will use their best efforts to cooperate to terminate the
infringement without litigation.
8.2 Progenics may request that The Regents take legal action against the
infringement of Regents' Patent Rights. This request must be in
writing and must include reasonable evidence of the infringement and
the damages to Progenics. If the infringing activity has not been
abated within 90 days following the effective date of the request,
The Regents has the right to (a) commence suit on its own account or
(b) refuse to participate in a suit. The Regents must give notice of
its election in writing to Progenics by the end of the 100th day
after receiving notice of the request from Progenics. Progenics may
thereafter bring suit for patent infringement in its own name if
and only if The Regents elected not to commence suit and if the
infringement occurred during the period and in a jurisdiction where
the third party had allegedIy infringed Progenics's exclusive rights
under this Agreement. However, in the event Progenics elects to bring
suit in accordance with this Paragraph 8.2, The Regents may
thereafter join the suit at its own expense. Progenics has the right
to join any litigation brought by The Regents at Progenics's cost and
expense and with counsel of Progenics's choice.
8.3 Any legal action will be at the expense of the party that brings the
suit and, with the exception of Paragraph 8.5, all recoveries will
belong to that party. Legal action brought jointly by The Regents and
Progenics and fully participated in by both, however, will be at the
joint expense of the parties and all recoveries will be shared
jointly by them in proportion to the share of expense paid by each
party.
8.4 Each party must cooperate with the other in litigation proceedings
instituted under this Article but at the expense of the party who
brings the suit. The litigation will be controlled by the party
bringing the suit, although The Regents may be represented by
counsel of its choice if The Regents joins a suit brought by
Progenics.
8.5 If Progenics undertakes the enforcement or defense of any Regents'
Patent Rights by litigation, any recovery of damages by Progenics
will be applied first toward Progenics's unreimbursed expenses and
legal fees relating to the suit. Progenics will retain the balance of
the recovery but will pay The Regents [***]
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9. PROGRESS AND ROYALTY REPORTS
9.1 Beginning January 31, 1997, Progenics must submit to The Regents
semiannual progress reports covering Progenics's activities related
to the development and testing of all Licensed Products and the
obtaining of the governmental approvals necessary for marketing.
These progress reports must be made for each Licensed Product until
its First Commercial Sale.
9.2 The progress reports submitted under Paragraph 9.1 must include the
following topics:
9.2(a) Summary of work completed.
9.2(b) Key scientific discoveries.
9.2(c) Summary of work in progress.
9.2(d) Current schedule of anticipated events or milestones.
9.2(e) Market plans for introduction of Licensed Products.
9.2(f) A summary of resources (dollar value) spent in the
reporting period.
9.3. Progenics must notify The Regents if Progenics or any of its
Sublicensees or Affiliates ceases to be a small entity (as defined by
the United States Patent and Trademark Office) under the provisions
of 35 U.S.C. Section 41(h).
9.4 Progenics must report the date of the First Commercial Sale in the
royalty report immediately following that Sale.
9.5 After the First Commercial Sale of each Licensed Product, Progenics
must make quarterly royalty reports to The Regents by February 28,
May 31, August 31 and November 30 of each year (i.e., within two
months from the end of each calendar quarter). Each royalty report
must cover Progenics's most recently completed calendar quarter and
must show:
9.5(a) Gross sales and Net Sales of any Licensed Product.
9.5(b) Number of each type of Licensed Product sold.
9.5(c) Royalties payable to The Regents.
9.6 Progenics must state in its royalty report if it had no sales of any
Licensed Product.
10. BOOKS AND RECORDS
10.1 Progenics must keep accurate books and records of all Licensed
Products manufactured, used or sold. Progenics must preserve these
books and records for at least five years from the date of the
royalty payment to which they pertain.
10.2 The Regents' representatives or agents are entitled to inspect these
books and records at reasonable times. The Regents will pay the fees
and expenses of these inspections. If an error favoring Progenics of
more than 5% of the total annual royalties is discovered, then
Progenics will pay the fees and expenses of these inspections.
11. LIFE OF THE AGREEMENT
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11.1 Unless otherwise terminated by operation of law or by acts of the
parties in accordance with the terms of this Agreement, this
Agreement is in force from the Effective Date recited on page one
and remains in effect for the life of the last-to-expire patent in
Regents' Patent Rights.
11.2 Upon termination of this Agreement, Progenics will have no further
right to make, have made, use or sell any Licensed Product except
as provided in Article 14 (Disposition of Licensed Products on Hand
Upon Termination).
11.3 Any expiration or termination of this Agreement will not affect the
rights and obligations set forth in the following Articles:
Article 10 Books and Records.
Article 14 Disposition of Licensed Products on Hand upon Termination.
Article 16 Use of Names and Trademarks.
Article 18 Indemnification.
Article 23 Failure to Perform.
12. TERMINATION BY THE REGENTS
12.1 If Progenics violates or fails to perform any material term or
covenant of this Agreement, then The Regents may give written notice
of the default ("Notice of Default") to Progenics. If Progenics does
not repair the default within 90 days after the effective date of the
Notice of Default, then The Regents has the right to terminate this
Agreement and the License by a second written notice ("Notice of
Termination") to Progenics. If The Regents sends a Notice of
Termination to Progenics, then this Agreement automatically
terminates on the effective date of this notice. Termination does not
relieve Progenics of its obligation to pay any royalty or fees owing
at the time of termination and does not impair any accrued right of
The Regents.
12.2 The provisions of Article 6 (Diligence), and not Paragraph 12.1, will
apply to termination for lack of diligence.
13. TERMINATION BY LICENSEE
13.1 Progenics has the right at any time to terminate this Agreement in
whole or with respect to any portion of Regents' Patent Rights by
giving written notice to The Regents. This notice of termination will
be subject to Article 19 (Notices) and will be effective 90 days
after the effective date of the notice.
13.2 Any termination in accordance with Paragraph 13.1 does not relieve
Progenics of any obligation or liability accrued prior to
termination. Nor does termination rescind anything done by Progenics
or any payments made to The Regents prior to the effective date of
termination. Termination does not affect in any manner any rights of
The Regents arising under this Agreement prior to termination.
14. DISPOSITION OF LICENSED PRODUCTS ON HAND UPON TERMINATION
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14.1 Upon termination of this Agreement, Progenics will have the right to
dispose of all previously made or partially made Licensed Products,
but no more, within a period of six months. But Progenics must submit
royalty reports on the sale of these Licensed Products and must
pay royalties at the rate and at the time provided in this Agreement.
15. PATENT MARKING
15.1 Progenics and their Sublicensees must mark all Licensed Products
made, used or sold under the terms of this Agreement, or their
containers, in accordance with the applicable patent marking laws.
16. USE OF NAMES AND TRADEMARKS
16.1 Neither party is permitted to use any name, trade name, trademark or
other designation of the other party or its employees (including
contraction, abbreviation or simulation of any of the foregoing) in
advertising, publicity or other promotional activity. Unless required
by law, Progenics is expressly prohibited from using the name "The
Regents of the University of California" or the name of any campus of
the University of California.
17. LIMITED WARRANTY
17.1 The Regents warrants that it has the lawful right to grant this
license to Progenics.
17.2 This License and the associated Invention are provided WITHOUT
WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. THE REGENTS MAKES NO
REPRESENTATION OR WARRANTY THAT ANY LICENSED PRODUCT OR LICENSED
METHOD WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.
17.3 IN NO EVENT WILL THE REGENTS BE LIABLE FOR ANY INCIDENTAL, SPECIAL
OR CONSEQUENTIAL DAMAGES RESULTING FROM EXERCISE OF THIS LICENSE OR
THE USE OF THE INVENTION OR LICENSED PRODUCTS OR THE USE OR THE
PRACTICE OF LICENSED METHODS.
17.4 Nothing in this Agreement will be construed as:
17.4(a) A warranty or representation by The Regents as to the
validity or scope of any Regents' Patent Rights.
17.4(b) A warranty or representation that anything made, used,
sold or otherwise disposed of under any license granted
in this Agreement is or will be free from infringement of
patents of third parties.
17.4(c) An obligation to bring or prosecute actions or suits
against third parties for patent infringement except as
provided in Article 8 (Patent Infringement).
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17.4(d) Conferring by implication, estoppel or otherwise any
license or rights under any patents of The Regents other
than Regents' Patent Rights as defined herein, regardless
of whether such patents are dominant or subordinate to
Regents' Patent Rights.
17.4(e) An obligation to furnish any know-how not provided in
Regents' Patent Rights.
18. INDEMNIFICATION
18.1 Progenics must indemnify, hold harmless and defend The Regents, its
officers, employees, and agents, the inventors of the patents and
patent applications in Regents' Patent Rights and their respective
employers from and against any and all liability, claims, suits,
losses, damages, costs, fees and expenses resulting from or arising
out of exercise of this License.
18.2 Progenics, at its sole cost and expense, must insure its activities
in connection with the work under this Agreement and obtain, keep in
force and maintain Comprehensive or Commercial Form General
Liability Insurance (contractual liability included) with limits
as follows:
18.2(a) Each occurrence [***]
18.2(b) Products/completed operations aggregate [***]
18.2(c) Personal and advertising injury [***]
18.2(d) General aggregate (commercial form only) [***]
18.3 Progenics expressly understands, however, that the coverages and
limits in Paragraph 18.2 do not in any way limit the Progenics's
liability. Progenics must furnish The Regents with certificates
of insurance evidencing compliance with all requirements. Progenics
is not required to insure its activities pertaining to the products'
liability risks until it begins to use Licensed Products in human
subjects. Progenics's insurance must:
18.3(a) Provide for 30-day advance written notice to The Regents of
any modification.
18.3(b) Indicate that The Regents of the University of California is
endorsed as an Insured under the coverages listed in
Paragraph 18.2.
18.3(c) Include a provision that the coverages will be primary and
will not participate with nor will be excess over any valid
and collective insurance or program of self-insurance
carried or maintained by The Regents.
19. NOTICES
19.1 Any notice or payment required to be given to either party must be
sent to the respective address given below and is effective: (a) on
the date of delivery if delivered in person, (b) five days after
mailing if mailed by first-class certified mail, postage paid, or
(c) on the next business day if sent by overnight delivery. Either
party may change its designated address by written notice.
For Licensee: PROGENICS PHARMACEUTICALS. INC.
777 Old Saw Mill River Road
Tarrytown, NY 10591
(914) 789-2800
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Attention: Joel Sendek
For The Regents: The Regents of the University of California
Business Research Partnerships
Box 951525, 1106 Ueberroth Building
University of California, Los Angeles
Los Angeles, California 90095-1525
Attention: Fredrica S. Reiter
VIA OVERNIGHT DELIVERY:
The Regents of the University of California
Business Research Partnerships
Box 951525, 1106 Ueberroth Building
University of California, Los Angeles
Los Angeles, California 90095-1525
Attention: Fredrica S. Reiter
20. ASSIGNABILITY
20.1 This Agreement is binding upon and inures to the benefit of The
Regents, its successors and assigns. But it is personal to Progenics
and assignable by Progenics only with the written consent of The
Regents, which consent may not be unreasonably withheld. The consent
of The Regents will not be required if the assignment is in
conjunction with the transfer of all or substantially all of the
business of Progenics to which this license relates.
21. LATE PAYMENTS
21.1 For each royalty payment or fee not received by The Regents when due,
Progenics must pay to The Regents a simple interest charge of [***]
per annum to be calculated from the date payment was due until it
was actually received by The Regents.
22. WAIVER
22.1 The waiver of any breach of any term of this Agreement does not waive
any other breach of that or any other term.
23. FAILURE TO PERFORM
23.1 If either party takes legal action against the other because of a
failure of performance due under this Agreement, then the prevailing
party is entitled to reasonable attorney's fees in addition to costs
and necessary disbursements.
24. GOVERNING LAWS
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24.1 THIS AGREEMENT IS TO BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF CALIFORNIA, but the scope and validity of
any patent or patent application will be governed by the applicable
laws of the country of the patent or patent application.
25. GOVERNMENT APPROVAL OR REGISTRATION
25.1 If this Agreement or any associated transaction is required by the
law of any nation to be either approved or registered with any
governmental agency, Progenics will assume all legal obligations
to do so. Progenics will notify The Regents if it becomes aware that
this Agreement is subject to a United States or foreign government
reporting or approval requirement. Progenics will make all necessary
filings and pay all costs including fees, penalties, and all other
out-of-pocket costs associated with such reporting or approval
process.
26. EXPORT CONTROL LAWS
26.1 Progenics must observe all applicable United States and foreign
laws with respect to the transfer of Licensed Products and related
technical data to foreign countries, including the International
Traffic in Arms Regulations (ITAR) and the Export Administration
Regulations.
27. PREFERENCE FOR UNITED STATES INDUSTRY
27.1 Because this Agreement grants an exclusive right to a particular use
of the Invention, Progenics must manufacture in the United States
any products embodying this Invention or produced through the
Invention's use to the extent required by 35 U.S.C. Section 201-212.
28. FORCE MAJEURE
28.1 The parties will be excused from any performance required under this
Agreement if performance is impossible or unfeasible due to any
catastrophe or other major event beyond their reasonable control,
including war, riot, or insurrection; laws, proclamations, edicts,
ordinances or regulations; strikes, lockouts or other serious labor
disputes; and floods, fires, explosions, or other natural disasters.
When such events abate, the parties' respective obligations will
resume.
29. ARBITRATION
29.1 At the request of either party, any controversy or claim arising out
of or relating to the diligence provisions of this Agreement
(Article 6) will be settled by arbitration conducted in Los
Angeles, California in accordance with the then current Licensing
Agreement Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the Arbitrator(s) will be binding
on the parties and may be entered by either party in the court or
forum, state or federal, having jurisdiction.
30. CONFIDENTIALITY
30.1 If either party discloses confidential information to the other
party, the disclosing party will designate this information as
confidential by appropriate legend or instruction, and the
receiving party will:
12
<PAGE>
30.1(a) Use the same degree of care to maintain the secrecy of the
confidential information as it uses to maintain the secrecy
of its own information of like kind.
30.1(b) Use the confidential information only to accomplish the
purposes of this Agreement.
30.2 Neither party will disclose confidential information received from
the other party except to its employees, customers, distributors and
other agents who are bound to it by similar obligations of confidence
and only as required to accomplish the purposes of this Agreement.
30.3 Neither party will have any confidentiality obligation with respect
to the confidential information belonging to or disclosed by the
other party that:
30.3(a) The receiving party can demonstrate by written records was
previously known to it.
30.3(b) The receiving party lawfully obtained from sources under no
obligation of confidentiality.
30.3(c) Is or becomes publicly available other than through an act or
omission of the receiving party or any of its employees.
30.3(d) Is required to be disclosed under the California Public
Records Act or other requirement of law.
30.4 The provisions of this Article 30 will continue in effect for five
years after expiration or termination of this Agreement.
31. MISCELLANEOUS
31.1 The headings of the several sections are inserted for
convenience of reference only and are not intended to be a part of,
or to affect the meaning or interpretation of, this Agreement.
31.2 This Agreement is not binding upon the parties until it has been
signed below on behalf of each party, in which event it becomes
effective as of the date recited on page one.
31.3 No amendment or modification of this Agreement will be valid or
binding upon the parties unless made in writing and signed by each
party.
31.4 This Agreement embodies the entire understanding of the parties and
supersedes all previous communications, representations or
understandings, either oral or written, between the parties relating
to the subject matter hereof.
31.5 If any part of this Agreement is for any reason found to be
unenforceable, all other parts nevertheless remain enforceable as
long as a party's rights under this Agreement are not materially
affected. In lieu of the unenforceable provision, the parties will
substitute or add as part of this Agreement a provision that will be
as similar as possible in economic and business objectives as was
intended by the unenforceable provision.
13
<PAGE>
Both The Regents and Progenics have executed this Agreement in duplicate
originals by their authorized offficers on the dates written below:
PROGENICS PHARMACEUTICALS, INC. THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By /s/ PAUL J. MADDON By /s/ FREDRICA S. REITER
- --------------------- -------------------------
Signature Signature
Name Paul J. Maddon, M.D., Ph.D. Name Fredrica S. Reiter
--------------------------
Title Chairman and CEO Title Licensing Associate
----------------
Date September 10, 1996 Date 9-6-96
------------------
THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA
By /s/ EMILY E. WALDRON
--------------------
Signature
Name Emily E. Waldron
Title Licensing Associate
Date 9-6-96
Approval as to legal form: /s/ HOWARD B. SCHECKMAN 9/9/96
----------------------- -------
Howard B. Scheckman Date
Assistant Resident Counsel
Office of Technology Transfer
University of California
14
<PAGE>
Exhibit 10.20
SUPPLY AGREEMENT
This supply agreement is entered into as of July 1, 1996 (the "Effective
Date") between PerImmune, Inc. ("PerImmune") and Progenics Pharmaceuticals,
Inc. (each singularly a "Party" and collectively the "Parties") with
reference to the following:
RECITALS
WHEREAS, PerImmune, Inc. manufactures purified keyhole limpet hemocyanin
("KLH"); and
WHEREAS, Progenics Pharmaceuticals, Inc. is performing research and
development in the field of vaccines for human cancers and is interested in
purchasing KLH from PerImmune, Inc. for use as a carrier protein for such
vaccines;
THEREFORE, the parties agree as follows:
1. DEFINITIONS. The following terms shall have the following meanings for
purposes of this Agreement:
1.1 "AFFILIATE" means any corporation, firm, partnership or other
entity, whether de jure or de facto, which directly or indirectly owns, is
owned by, or is under common ownership with a party to this Agreement to the
extent of at least fifty percent (50%) of the equity (or such lesser
percentage which is the maximum allowed to be owned by a foreign corporation
in a particular jurisdiction) having the power to vote on or direct the
affairs of the entity and any person, firm, partnership, corporation or other
entity actually controlled by, controlling, or under common control with a
party to this Agreement. For example, Akzo, N.Y. is an Affiliate of PerImmune
pursuant to this definition.
1.2 "AGREEMENT" means this Supply Agreement, including any exhibits,
schedules or other attachments thereto, as any of the foregoing may be
validly amended and agreed to in writing by the Parties from time to time.
1.3 "COMMERCIAL INTRODUCTION" means the date of first commercial sale
(other than for purposes of obtaining regulatory approval) of a Ganglioside
Vaccine by Progenies Pharmaceuticals, Inc.
1.4 "EFFECTIVE DATE" is defined in the introductory paragraph.
1.5 "FULLY BURDENED MANUFACTURING COST" means the actual cost of
Manufacture by PerImmune of KLH under a Manufacturing Process in compliance
with
<PAGE> Page 2
cGMPs, which actual cost shall be comprised of the cost of goods produced as
determined in accordance with United States generally accepted accounting
principles, [***]
1.6 "cGLPs" means the current Good Laboratory Practices for Finished
Pharmaceuticals pursuant to 21 C.F.R. 58 et sea., as amended from time to
time.
1.7 "cGMPs" means the current Good Manufacturing Practices for Finished
Pharmaceuticals pursuant to 21 C.F.R. 210 et seci., as amended from time to
time.
1.8 "KLH" means keyhole limpet hemocyanin.
1.9 "KLH REQUIREMENTS" means the amount of KLH in bulk which Progenics
Pharmaceuticals, Inc. may require for all research and development,
pre-clinical and human clinical testing of Ganglioside Vaccines and, after
Commercial Introduction, production of Ganglioside Vaccines for commercial
sales.
1.10 "KNOW-HOW" means materials, data, results, formulae, designs,
specifications, methods, processes, improvements, techniques, ideas,
discoveries, technical information, process information, clinical information
and any other information, whether or not any of the foregoing is patentable,
which is confidential (in accordance with Section 5 hereof and proprietary to
PerImmune now or hereafter during the Term of this Agreement, to the extent
that any of the foregoing relates to the development, manufacture, use or
sale of KLH in connection with the development, manufacture, use or sale of
any Gangiloside Vaccine, provided however, that the term "Know-how" shall not
include any of the foregoing that is subject to proprietary rights of third
parties.
1.11 [***]
1.12 "MANUFACTURE" OR "MANUFACTURING PROCESS" means the aseptic-storage,
handling, production, processing and packaging of KLH in accordance with this
Agreement.
1.13 ."MANUFACTURING YEAR" means each calendar year commencing on or after
January 1, 1995.
1.14 "PARTY" and "PARTIES" are defined in the introductory paragraph.
1.15 "PERIMMUNE" means PERIMMUNE, INC., (formerly Organon Teknika
Corporation Biotechnology Research Institute) , a Delaware corporation, its
Affiliates and its successors and permitted assigns.
[***] Confidential Treatment Requested
<PAGE>
Page 3
1.16 "SPECIFICATIONS" is defined in Exhibit A
1.17 "TERM" is defined in Section 4.1.
1.18 "PROGENICS" means Progenics Pharmaceuticals, Inc., a Delaware
corporation, its Affiliates and its permitted successors and assigns.
2. MANUFACTURE AND SUPPLY.
2.1 GENERAL. [***]
PerImmune hereby agrees, at its sole expense, to commit
all reasonably necessary facilities, appropriately trained personnel,
machinery, equipment, utilities and other PerImmune resources required to
satisfy its obligations under this Agreement.
2.2 PERIMMUNE TRANSFER PRICE OF KLH.
[***]
In addition, in order to verify the production
cost of KLH, Progenics will have the right to pay for an independent
certified public accountant, ("CPA") to inspect the records of PerImmune once
per year during regular business hours, provided that such accountant has
entered into a confidentiality agreement with PerImmune which is satisfactory
to PerImmune. The CPA shall then compile a report which states only
PerImmune's Fully Burdened Manufacturing Cost for KLH which may be used by
the Parties for negotiating the transfer price.
2.3 PERlMMUNE'S REPRESENTATIONS, WARRANTIES AND COVENANTS. PerImmune
hereby represents and warrants to Progenics as follows:
(a) PRE-CLINICAL STUDY AND HUMAN CLINICAL TRIAL USE, PerImmune shall
Manufacture all KLH Requirements for use in any vaccine used in connection
with any pre-clinical study or human clinical trial of any Ganglioside
Vaccine (i) strictly in compliance with (A) this Agreement, (B) all
Specifications, and (C) all applicable laws
[***] Confidential Treatment Requested
<PAGE>
Page 4
and regulations, including but not limited to cGMPs to the extent applicable,
and (ii) in a PerImmune facility holding all applicable licenses in the
jurisdiction of Manufacture.
(b) COMMERCIAL USE. PerImmune shall Manufacture all KLH Requirements for
use in the commercialization of any Ganglioside Vaccine (i) strictly in
compliance with (A) this Agreement, (B) all Specifications, and (C) all
applicable laws and regulations, including but not limited to cGMPs to the
extent applicable, and (ii) in a PerImmune facility holding all applicable
licenses in the jurisdiction of Manufacture.
(c) CERTIFICATE OF ANALYSIS: NON-COMPLYING KLH. Before, during and after
Manufacture of KLH Requirements, PerImmune shall obtain samples, monitor the
Manufacturing Process and the environment of such Manufacture, and keep such
technical books and records of all of the foregoing as are required under the
Specifications and Procedures and all applicable laws and regulations,
including but not limited to cGLPs or cGMPs (as appropriate and applicable).
PerImmune shall test each lot of KLH requirements Manufactured for Progenics
or as required under the Specifications. Together with each such lot of KLH
Requirements, PerImmune shall provide a written certificate of analysis which
shall set forth the results of such testing by PerImmune and PerImmune's
quality control approval of such lot of KLH Requirements. PerImmune's
obligations under this section 2.3(c) shall be performed at PerImmune's sole
expense. Progenics shall be entitled to test any such KLH Requirements in
accordance with the Specifications, at Progenics' sole expense. Without
limiting any of Progenics' other rights or remedies under this Agreement with
respect to any KLH Requirements supplied hereunder that do not comply with
applicable representations and warranties under this Section 2.3, and
provided PerImmune reasonably confirms Progenics' test results, the Parties
agree that; (i) Progenics shall not be obligated to pay PerImmune the
transfer price applicable to such non-complying KLH Requirements; (ii) if
Progenics has already paid for such non-complying KLH Requirements, Progenics
shall be entitled to a credit against future purchases for the amount paid to
PerImmune therefor; (iii) PerImmune shall, on a priority basis, Manufacture
and supply to Progenics, as applicable, replacement KLH Requirements in full
compliance with this Section 2.3; and (iv) PerImmune shall bear the full cost
of returning or destroying the non-complying KLH Requirements.
2.4 Procedures for Estimating, Ordering and Supplying - KLH REQUIREMENTS.
Subject to the other terms of this Agreement:
(a) ANNUAL DEMAND FORECAST FOR EACH MANUFACTURING YEAR. During the Term,
commencing on July 1 , 1996 and on an on-going quarterly basis as described
below, Progenics will provide PerImmune with a written rolling annual demand
forecast of KLH Requirements for each manufacturing Year which shall be
binding as to the first quarter and non-binding as to the remaining three (3)
quarters. Thereafter, Progenics shall provide an updated annual demand
forecast on a quarterly
<PAGE>
Page 5
basis no later than ninety (90) days in advance of the commencement of the
first (and binding) quarter covered by such annual demand forecast. The
Parties also agree that the variance, if any, between the binding forecast of
a given quarter and the last nonbinding forecast for such quarter shall be
between [***] and [***]
meaning that Progenics' binding forecast for such quarter must be at least
[***] but not more than [***]
of such last non-binding forecasted amount for such quarter.
(b) PURCHASE ORDERS. Progenics shall place a firm purchase order or
purchase orders with PerImmune setting forth (i) the quantities of KLH
Requirements to be Manufactured and supplied hereunder, (ii) the schedule for
receipt from PerImmune of such batch(es) of KLH Requirements, and (iii)
instructions for shipping and packaging. Each such firm purchase order shall
be submitted no later than thirty (30) days in advance of the first scheduled
date of receipt thereof. Subject to the other terms of this Agreement,
Progenics shall be obligated to place firm purchase orders with PerImmune
for, and PerImmune hereby commits to Manufacture and supply hereunder
pursuant to such firm purchase orders, [***] of the
amount of KLH Requirements in the then-binding quarter of each annual demand
forecast under Section 2.4(b); provided, however, that: (A) the Parties may
mutually agree in writing to amend any such firm purchase order; (B)
PerImmune in its discretion may agree to Manufacture and supply hereunder
additional amounts of KLH Requirements in excess of the then-binding amount,
provided that Progenics places firm purchase order(s) for such excess KLH
Requirements on a timely basis; and (C) PerImmune agrees to provide Progenics
with as much advance written notice as possible (and in any case at least
thirty (30) days' written advance notice) if PerImmune determines that any
scheduled delivery of KLH Requirements pursuant to any purchase order will be
delayed by more than fifteen (15) days for any reason of which PerImmune
becomes aware.
2.5 PRIORITY.
a) PRIORITY AMONG CUSTOMERS. PerImmune hereby agrees and acknowledges
that, in the event that PerImmune is unable to satisfy in full its
obligations under this Agreement to Manufacture and supply
[***] of KLH Requirements as well as PerImmune's obligations to
third parties with respect to Manufacture and supply of KLH, PerImmune shall
use reasonable efforts to satisfy its obligations under this Agreement and,
in the event of any shortage of KLH available to meet all such obligations,
PerImmune shall allocate proportionately all available KLH among Progenics
and such third parties with highest priority for the Manufacture and supply
of KLH for purposes of outstanding firm purchase orders for comparable
delivery time frames. In such event PerImmune, shall be permitted to invoice,
and Progenics agrees to pay, the additional expenses of PerImmune for such
efforts.
[***] Confidential Treatment Requested
<PAGE> Page 6
(b) INABILITY TO SUPPLY. In the event that PerImmune is unable to supply
[***] of Progenics' purchase orders for two consecutive quarters, then
PerImmune agrees to provide Progenics the right and license to use the
relevant Know-how to manufacture or have manufactured KLH for use in
producing Ganglioside Vaccine, and to fully cooperate with regulatory
authorities to qualify Progenics and/or its designee as a manufacturer of
KLH. In such event, at Progenics' request, PerImmune shall promptly disclose
to Progenics all Know-how and information reasonably necessary to manufacture
KLH and the parties shall mutually agree upon a reasonable schedule for
gradually reducing the amount of KLH purchased by Progenics from PerImmune,
until such time PerImmune is able to reasonably demonstrate the ability to
supply Progenics with its requirements.
(c) ASSURANCE OF SUPPLY. Progenics and PerImmune will cooperate to
anticipate Progenics' long-term requirements for KLH Requirements supply, and
PerImmune will take reasonable measures to assure that Progenics' and its
Partners' KLH Requirements can be met, which measures may include the
maintenance of adequate safety stocks of KLH.
2.6. REGULATORY APPROVAL OF MANUFACTURING. PerImmune shall be solely
responsible, at its sole cost and expense, for obtaining all necessary
regulatory approvals particular to KLH for Manufacture and supply of KLH
Requirements. Progenics shall advise PerImmune of any new Specifications
required by the United States Food and Drug Administration or the Federal
Food, Drug and Cosmetic Act (or the equivalent regulatory authority or law In
other countries) with respect to any Ganglioside Vaccine. PerImmune shall not
modify in any manner any Specifications without Progenics prior written
consent (which consent shall not be unreasonably withheld).
2.7 REGULATORY FILINGS. Without limiting the generality of the
foregoing, for purposes of supporting all preclinical studies and human
clinical trials and all regulatory filings, applications and approvals on the
part of Progenics with respect to any Ganglioside Vaccine, PerImmune hereby
agrees that on an on-going basis during the Term: (1) PerImmune shall permit
Progenics to reference PerImmune's drug master file and/or Investigational
New Drug Applications (IND's) for KLH with the United States Food and Drug
Administration; (ii) to the extent not subject to the proprietary rights of
third parties, PerImmune shall provide Progenics with all pre-clinical and
clinical data, results and other relevant information with respect to KLH
(including but not limited to information regarding the toxicity, safety and
stability of KLH) that is (A) submitted by PerImmune in connection with any
Investigational New Drug application or other regulatory filing with respect
to KLH from time to time during the Term or (B) otherwise in PerImmune's
possession from time to time during the Term; and (iii) a PerImmune
representative, at Progenics' request, shall attend periodic meetings to
discuss the progress of clinical trials of any Ganglioside Vaccines.
Progenics will reimburse
[***] Confidential Treatment Requested
<PAGE>
Page 7
PerImmune for the foregoing assistance only (i) for its reasonable out-of
pocket expenses, including but not limited to travel, and (ii) PerImmune's
fully burdened costs of performing technical studies or engaging outside
services subject to the prior approval of Progenics.
a) ADVERSE EVENTS REPORTING. On an on-going basis during the Term and
for at least ten (10) years after the expiration or termination of this
Agreement, each Party agrees to provide the other Party with any written
information in its possession which indicates adverse effects in humans
associated with KLH or any products using KLH.
2.8 PERIMMUNE RECORDKEEPING AND INSPECTION.
(a) TECHNICAL RECORDS. With respect to any Manufacture and supply of KLH
Requirements, PerImmune shall, at its expense, keep properly completed
technical books and records, test data and reports as required under the
Specifications and all applicable laws and regulations, including but not
limited to cGLPs or cGMPs (as appropriate), and in any case shall maintain
such technical Information for at least two (2) years from the expiration
date of the relevant Ganglioside Vaccine or longer if required under
applicable laws and regulations (including but not limited to cGLPs and
cGMPs, as applicable). During regular business hours and upon reasonable
advance written request, PerImmune shall make any such technical information
available to Progenics for inspection.
(b) FINANCIAL RECORDS. During the Term, PerImmune shall keep for at
least three (3) years records of its Fully Burdened Manufacturing Costs, and
the calculations thereof in sufficient detail to permit Progenics designee,
reasonably acceptable to PerImmune, to confirm the accuracy thereof. At the
request of Progenics, and not more frequently than once per year, upon at
least five (5) business days' prior written notice, and at the expense of
Progenics (except as otherwise provided below), PerImmune shall permit a
nationally recognized, independent, certified public accountant selected by
Progenics and acceptable to PerImmune to inspect (during regular business
hours) any such PerImmune records for the then-preceding three (3) years
solely to the extent necessary to verify such costs, margins and
calculations, provided that such accountant in advance has entered into a
confidentiality agreement with PerImmune and Progenics substantially similar
to the confidentiality provisions of this Agreement, limiting the use and
disclosure of such information to authorized representatives of the Parties.
Results of any such inspection shall be made available to both Parties. If
such inspection reveals a deficiency in the calculation of PerImmune's Fully
Burdened Manufacturing Cost to PerImmune resulting in an overpayment to
PerImmune of the transfer price by [***] , PerImmune shall
pay all costs and expenses of such inspection.
[***] Confidential Treatment Requested
<PAGE>
Page 8
(c) QUALITY AUDIT. Upon submission of a proposal by Progenics which is
approved by PerImmune, PerImmune shall permit Progenics to audit, in
cooperation with PerImmune's personnel, production, packaging, and quality
control facilities of PerImmune and any of its significant suppliers as they
relate to production of KLH to allow Progenics to verify PerImmune's
compliance with its responsibilities under this Agreement.
2.9 LIABILITY.
(a) INDEMNIFICATION BY PROGENICS. Except as otherwise provided in
Sections 2.9(b) or (c), Progenics will defend, indemnify and hold harmless
PerImmune against any and all claims, actions, liabilities, damages, losses,
costs or expenses, including reasonable attorney's fees, based upon or
arising out of the sales or use of any Ganglioside Vaccine by Progenics,
provided that PerImmune gives Progenics prompt notice thereof in writing,
permits Progenics to control the investigation, preparation and defense
thereof (including any compromise or settlement thereof and any appeal) and
provides reasonable assistance to Progenics, at Progenics expense, in that
regard.
(b) LIABILITY. Each Party assumes full responsibility and liability for
any injury, damage or expense which it or its employees, agents and invitees
incur and which arise from its manufacture, handling and use of KLH or
Ganglioside Vaccines, except to the extent such injury, damage or expense
arises from the negligence or willful misconduct of the other Party.
(c) INDEMNIFICATION BY PERIMMUNE. PerImmune will defend, indemnify and
hold harmless Progenics against any and all claims, actions, liabilities,
damages, losses, costs or expense (including reasonable attorneys' fees)
including without limitation expenses of total or partial product recalls in
connection with the manufacture, use or sale of Ganglioside Vaccines (i)
based upon the gross negligence or willful misconduct of PerImmune or its
employees arising out of the Manufacture or shipment of KLH Requirements by
PerImmune or based upon a manufacturing defect in KLH Requirements
manufactured by PerImmune; or (ii) the failure of PerImmune to comply with
governmental regulations with respect to KLH, provided that Progenics or its
Partners give PerImmune prompt notice thereof in writing, permits PerImmune
to control the investigation, preparation and defense thereof (including any
compromise or settlement thereof and any appeal) and provides reasonable
assistance to PerImmune, at PerImmune's expense, in that regard.
3. CONFIDENTIALITY.
3.1. Each party agrees to take such steps and, when necessary to protect
the rights of the other, shall cause its employees and agents and its
Affiliates employees and agents, to take such steps as are reasonably
required to protect and keep
<PAGE>
Page 9
confidential, and shall not use, publicize or otherwise disclose to third
parties other than Affiliates, Confidential Information (as defined below) of
the other party, which was acquired from the other party pursuant to this
Agreement, including, without limitation, following procedures designed to
limit access of such information to those persons having a need to know it.
The parties agree not to disclose or use such Confidential Information except
as they may be entitled to do so or if necessary pursuant to or in the
performance of this Agreement.
3.2 The obligation of confidentiality and restriction on use imposed by
the foregoing Subsection 3.1 shall not apply to any particular item of
Confidential Information that:
3. 2.1 is known or generally available, or subsequently becomes known or
generally available, to the public, or is otherwise at the time of disclosure
or subsequently becomes part of the public domain, whether by printed
publication or otherwise through no fault of the receiving parties;
3.2.2 the receiving party can demonstrate by competent evidence, based
in substance upon writings and/or physical evidence, (i) was known to the
receiving party at the time of receipt or (ii) is furnished to the receiving
party without obligation of confidentiality or non-use by a third party,
either before or after the time of its disclosure by the disclosing party,
which third party is not restricted by a confidential undertaking to the
disclosing party at the time of the disclosure;
3.2.3 the receiving party can demonstrate by competent evidence, based
in substance upon writings and/or physical evidence, has been developed
independently for the receiving party by persons not having access to the
Confidential information; or
3.2.4 is the Confidential Information of the disclosing party and that
the disclosing party discloses to a non-Affiliate party without restriction.
3.3 The obligations of confidentiality and restriction on use under this
Section 3 shall continue to be binding upon the parties for a period of five
years following termination of this Agreement.
3.4 Either party may also disclose Confidential Information disclosed to
it by the other party to the extent, and only to the extent, such disclosure
is necessary for such party to comply with applicable governmental laws or
regulations. The party that desires to so disclose Information shall give the
other party reasonable advance notice of any such proposed disclosure
pursuant to such compliance with law or regulation, shall use its best
efforts to secure confidential treatment of the Information thus disclosed,
and shall advise the other party in writing of the manner in which that was
done.
<PAGE>
Page Page 10
3.5 For purposes of this Agreement, Confidential Information shall
mean: (a) data, inventions, Information, processes, know-how, patent
applications, trade secrets and similar intellectual property rights of a
party, including, without limitation, the original and copies of all
documents, inventions, laboratory notebooks, drawings, specifications,
devices, equipment, prototype models and tangible manifestations embodying
any technology disclosed hereunder, (b) a party's customer lists and
marketing, sales, costs, royalty and similar information related to the
manufacture or sale of KLH or other part of the Parties' business, and (c)
any other information disclosed in writing and marked as "Confidential
Information" or, if disclosed orally, reduced to writing and marked as
"Confidential Information" and submitted within thirty (30) days of the
original oral disclosure.
3.6 PERMITTED DISCLOSURES. Each Party may disclose the other Party's
information to the extent such disclosure is reasonably necessary in
prosecuting or defending litigation, filing, prosecuting or maintaining
patent applications or patents, complying with applicable laws or
regulations, or, in the case of Progenics, conducting preclinical or clinical
trials or preparing or filing regulatory filings with respect to Ganglioside
Vaccines; provided, however, that if a Party is required to make any
disclosure of the other Party's information furnished pursuant to this
Agreement, it will give reasonable advance notice of such disclosure
requirements to the other Party and, except to the extent inappropriate in
the case of patent applications, will use its best efforts to secure
confidential treatment of such information required to be disclosed.
4. TERM: TERMINATION.
4.1 TERM. The term of this Agreement shall be for three years from the
Effective Date and will renew automatically for successive 12 month periods
unless sooner terminated as provided in this Section 4.
4.2 MATERIAL BREACH. Subject to Section 8.6, failure by either Party to
comply with any of the material obligations contained in this Agreement shall
entitle the other Party to give to the Party in default notice specifying the
nature of the default and requiring it to make good such default. If such
default is not cured within sixty (60) days after the receipt of such notice,
the notifying Party shall be entitled, without prejudice to any of its other
rights conferred on it by this Agreement and in addition to any other
remedies available to it by law or in equity, to terminate this Agreement
effective upon written notice to the other Party. The right of a Party to
terminate this Agreement, as herein above provided, shall not be affected in
any way by its waiver or failure to take action with respect to any previous
default.
4.3 INSOLVENCY OR BANKRuPTCY. Either Party may, in addition to any other
remedies available to it by law or in equity, terminate this Agreement, in
whole or in part as the terminating Party may determine, effective upon
written notice to the other Party, in the event the other party shall have
become insolvent or bankrupt, or shall have
<PAGE>
Page 11
made an assignment for the benefit of its creditors, or there shall have been
appointed a trustee or receiver of the other Party for all or a substantial
part of its property, or any case or proceeding shall have been commenced
seeking reorganization, liquidation, dissolution, winding-up, arrangement,
composition or readjustment of its debts or any other relief under any
bankruptcy, insolvency, reorganization or other similar act or law of any
jurisdiction now or hereafter in effect, or there shall have been issued a
warrant of attachment, execution, disdain or similar process against, any
substantial part of the property of the other Party, and any such event shall
have continued for sixty (60) days undismissed, unbounded and undischarged.
4.4 ACCRUED RIGHTS, SURVIVING OBLIGATIONS: PARTNERS. Expiration or any
termination of this Agreement for any reason shall be without prejudice to
any rights which shall have accrued to the benefit of either Party prior to
such expiration or termination. Such expiration or termination shall not
relieve either Party from obligations which are expressly indicated to
survive expiration or termination of this Agreement, which obligations
include, without limitation, those under Sections 2.8, 2.9, 3, 5, 6 and 7.
5. PERIMMUNE PATENT RIGHTS.
PerImmune shall not assert against Progenics or its customers any
patents now or hereinafter owned or controlled by PerImmune which concern KLH
or any Ganglioside Vaccine of Progenics which incorporates KLH. This Section
shall continue to apply to any Affiliate of PerImmune which ceases to be an
Affiliate of PerImmune as defined by this Agreement.
6. PERiMMUNE REPRESENTATIONS AND WARRANTIES.
PerImmune represents and warrants that:
(a) the execution and delivery of this Agreement and the performance of
the transactions contemplated hereby have been duly authorized by PerImmune;
(b) the performance by PerImmune of any of the terms and conditions of
this Agreement on its part to be performed does not and will not constitute a
breach or violation of any other agreement or understanding, written or oral,
to which it is a party;
(c) To the best of PerImmune's knowledge, there are no adverse
proceedings, claims or actions pending, or threatened, relating to KLH and at
the time of disclosure and delivery thereof to Progenics and PerImmune shall
have the full right
<PAGE>
Page 12
and legal capacity to disclose and deliver KLH without violating the rights
of third parties.
7. ARBITRATION.
Any dispute, controversy or claim between the Parties, arising out of or
relating to this Agreement or the Parties' respective rights and obligations
hereunder either during or after the Term (including the question as to
whether any such matter is arbitrable) shall be subject to binding
arbitration in accordance with then-existing commercial arbitration rules of
the American Arbitration Association. The Parties agree that, in the course
of any such arbitration, service of any notice at their respective addresses
in accordance with Section 8.11 of this Agreement shall be valid and
sufficient, and any arbitration hereunder shall be in the jurisdiction of the
defendant Party, which in the case of Progenics shall be New York and in the
case of PerImmune shall be Maryland. In any such arbitration, an award shall
be rendered by a majority of the members of a board of arbitration consisting
of three (3) members, one (1) of whom shall be chosen by each of Progenics
and PerImmune and the third of whom shall be appointed by mutual agreement of
such two (2) arbitrators. In the event of failure of such two (2) arbitrators
to agree within sixty (60) days after the commencement of arbitration (as
defined below) upon appointment of the third arbitrator, or, in the event
that either Party shall fail to appoint an arbitrator within thirty (30) days
after the commencement of the arbitration proceedings, the third arbitrator
or (upon request of the other Party) the second arbitrator and the third
arbitrator, as the case may be, shall be appointed by the American
Arbitration Association in accordance with its then existing commercial
arbitration rules. For purposes of this Section, the "commencement of the
arbitration proceeding" shall mean the date upon which the defendant Party
receives from the American Arbitration Association a copy of the request for
arbitration filed by the party desiring to have recourse to arbitration. The
decision of the arbitrators shall be in writing and shall set forth the basis
therefor. The Parties shall abide by all awards rendered in arbitration
proceedings, and such awards may be enforced and executed upon in any court
having jurisdiction over the Party against whom enforcement of such award is
to be sought. The Parties shall divide equally the administrative charges,
arbitrators' fees, and related expenses of arbitration, but each Party shall
pay its own legal fees incurred in connection with any such arbitration;
provided, however, if the arbitrators determine that one Party prevailed
clearly and substantially over the other Party, then the non-prevailing Party
shall also pay the reasonable attorneys' fees and expert witness costs and
other arbitration costs of the prevailing Party.
<PAGE>
Page 13
8. MISCELLANEOUS PROVISIONS.
8.1 NO PARTNERSHIP. Nothing in this Agreement is intended or shall be
deemed to constitute a partnership, distributorship, agency employer-employee
or joint venture relationship between the Parties. No Party shall incur any
debts or make any commitments for the other, except to the extent, if at all,
specifically provided herein.
8.2 ASSIGNMENTS. Neither Party shall assign any of its rights or
obligations hereunder or this Agreement, except that either Party may do so:
(a) as incident to the merger, consolidation, reorganization or acquisition
of stock or assets affecting substantially all of the assets or voting
control of such Party; (b) to any wholly owned subsidiary if such Party
remains liable and responsible for the performance and observance of all of
the subsidiary's duties and obligations hereunder; (c) with the prior written
consent of the other Party; or (d) as incident to an agreement between
Progenics and a major corporate partner. This Agreement shall be binding upon
the successors and permitted assigns of the Parties and the name of a Party
appearing herein shall be deemed to include the names of such Party's
successors and permitted assigns to the extent necessary to carry out the
intent of this Agreement. Any assignment not in accordance with this Section
8.2 shall be void.
8.3 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.
8.4 NO NAME OR TRADEMARK RIGHTS. Except as otherwise provided herein,
no right, express or implied, is granted by this Agreement to use in any
manner the names "PerImmune, Inc." or "Progenics Pharmaceuticals, Inc." or
any contraction thereof or any other trade name or trademark of PerImmune or
Progenics in connection with the performance of this Agreement.
8.5 PUBLIC ANNOUNCEMENT. Except as may otherwise be required by
applicable law or regulation, neither Party shall make any public
announcement concerning this Agreement or the subject matter hereof without
the prior written consent of the other Party (not to be unreasonably
withheld).
8.6 FORCE MAJEURE. If any default or delay occurs which prevents or
materially impairs a Party's performance and is due to a cause beyond the
Party's reasonable control, including but not limited to any act of any god
or demon, flood, fire, explosion, earthquake, casualty, accident, war,
revolution, civil commotion, blockade or embargo, injunction, law,
proclamation, order, regulation or governmental demand, the affected Party
promptly shall notify the other Party in writing of such cause and shall
exercise diligent efforts to resume performance under this Agreement as soon
as possible. Neither Party shall be liable to the other Party for any loss or
damage due to such cause. Neither Party may terminate this Agreement because
of such default or delay.
<PAGE>
Page 14
8.7 ENTIRE AGREEMENT OF THE PARTIES: AMENDMENTS. This Agreement,
including the exhibits attached hereto which are incorporated herein,
constitutes and contains the entire understanding and agreement of the
Parties and cancels and supersedes any and all prior negotiations,
correspondence, understandings and agreements, whether verbal or written,
between the Parties respecting the subject matter hereof. No waiver,
modification or amendment of any provision of this Agreement shall be valid
or effective unless made in writing and signed by a duly authorized officer
of each of the Parties.
8.8 SEVERABILITY. In the event that any of the provisions of this
Agreement shall for any reason be held by any court or authority of competent
jurisdiction to be invalid, illegal or unenforceable, such provision or
provisions shall be validly reformed to as nearly as possible approximate the
intent of the Parties and, if unreformable, shall be divisible and deleted in
such jurisdiction; elsewhere, this Agreement shall not be affected so long as
the Parties are still able to realize the principal benefits bargained for in
this Agreement.
8.9 CAPTIONS. The captions to this Agreement are for convenience only,
and are to be of no force or effect in construing or interpreting any of the
provisions of this Agreement.
8.10 APPLICABLE LAW. This Agreement shall be governed by and
interpreted in accordance with the laws of Maryland.
8.11 NOTICE. All notices and other communications shall be deemed to
have been duly given when delivered in person or by registered or certified
mail (postage prepaid, returned receipt requested) to the respective parties
as follows:
If To Progenics:
Paul J. Maddon, M.D., Ph.D.
Chairman and CEO
- ---------------------------
777 Old Saw Mill River Road
- ---------------------------
Tarrytown, NY 10591
- ----------------------------
<PAGE>
Page 15
If To PerImmune:
Michael G. Hanna, Jr.
- ------------------------
President & CEO
1330 Piccard Drive
- ------------------------
Rockville, MD 20850
- ------------------------
8.12 SURVIVAL. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by a Party and
shall be able to be relied fully on by the Parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective corporate officers, duly authorized as of the day
and year first above written. PerImmune, Inc., represents and warrants that
it has the right and authority to provide to Progenics the material and
rights set forth in this agreement pursuant to the transfer of relevant right
and authority from Akzo Nobel to PerImmune.
PERIMMUNE, INC. PROGENICS PHARMACEUTICALS, INC.
By: /s/ Michael G. Hanna, Jr. By: Paul J. Maddon
- ---------------------------- ----------------------
Name: Michael G. Hanna, Jr. Name: Paul J. Maddon
- --------------------------- -----------------------
Title: President & CEO Title: Chairman and CEO
- --------------------------- -----------------------
<PAGE>
As set forth in this Exhibit A, the following are the specifications for the
Manufacture of KLH, as may from time to time be required by the Food and Drug
Administration (the "Specifications").
<PAGE>
EXHIBIT A
ORGANON TEKNIKA
[GRAPHIC] AKZO
CERTIFICATE OF ANALYSIS
KEYHOLE LIMPET HEMOCYANIN
[***]
[***] Confidential Treatment Requested
<PAGE>
Exhibit 10.21
This document, when properly executed, shall constitute a Supply Agreement
between Progenics Pharmaceuticals, Inc. with offices at Old Saw Mill River Road,
Tarrytown, NY, (Progenics) and E.I. Du Pont de Nemours and Company (Du Pont),
with offices at 549 Albany Street, Boston, MA.
1. PERIOD OF AGREEMENT: July 1, 1993 through June 30, 1996. After the
original term, this Agreement will renew automatically for successive 12 month
periods unless either party gives notice to the other of its intention not to
renew at least 120 days prior to the expiration of the then current term.
2. MATERIAL: Recombinant Soluble sCD4, referred to hereafter as sCD4 or
Product.
3. MATERIAL SPECIFICATIONS: Material shall be supplied in the form and
manner, and must conform in all material respects to the specifications set out
in Attachment A. Alterations to these specifications require the express
written consent of each party.
4. [***]
5. PAYMENT TERMS: Net 30 Days, following the receipt of a properly prepared
and correct invoice.
6. QUANTITY: Du Pont commits to purchase 100% of its purchase requirements
for sCD4 during the term of this order from Progenics, and Progenics agrees to
supply 100% of Du Pont's purchase requirements.
7. DELIVERY TERMS: F.O.B. Destination, freight collect.
8. RELEASES: Du Pont will advise Progenics of its purchase requirements at
least quarterly, or as may otherwise suit the parties by agreement. Progenics
shall ship product as required by Du Pont according to a mutually agreed upon
schedule. Progenics shall advise Du Pont at its earliest opportunity if it is
unable to ship Product at an agreed upon time. Progenics will, on a best effort
basis, attempt to fulfill any unscheduled, or spot requirements of Du Pont.
9. LABELLING AND PACKAGING: Both Du Pont's and Progenics' names and logos
shall appear on the main product label and on promotional literature, along with
the following statement: "Manufactured by Progenics Pharmaceuticals, Inc."
[***] Confidential Treatment Requested
<PAGE>
-2-
All labels to be approved by both parties. All product labelling and literature
shall contain the phrase "For Laboratory Use." Progenics will package product
as 100 micrograms per vial, or in other package sizes as mutually agreed upon by
both parties. Product will be shipped on dry ice. In parallel, Progenics will
perform stability studies on lyophilized product. Shelf life of the sCD4 will
be no less than 6 months upon receipt by Du Pont.
10. CONFIDENTIALITY: The parties hereto shall keep confidential all
confidential technical information, shall not disclose or make known to any
individual, firm, or corporation, except when authorized in writing to do so by
the other party, and shall not use such information for any purpose other than
the performance of the obligations provided in this Agreement. The provisions
of this clause shall remain binding for five (5) years after the termination of
this agreement. Each party shall use the same degree of care to avoid
disclosure of confidential technical information as the party employs with
similar information of its own which it does not desire to publish or disclose.
Any confidential information shared between the parties must be identified and
labeled in writing as confidential. The confidentiality of and information
disclosed verbally must be identified in writing as confidential no more than 14
days after disclosure.
This obligation shall not apply to information and/or documents which:
A) Are or come within the public domain otherwise than as a consequence of a
breach of the obligations hereunder;
B) Are known to the receiving party prior to disclosure by the other party as
shown by the receiving party's records;
C) Are lawfully disclosed to the receiving party by third parties; or
D) Are subsequently independently developed by the receiving party through no
reference whatsoever to disclosure hereunder.
11. WARRANTY: Progenics warrants the packaged product hereunder shall meet the
specifications set forth in Attachment A and shall be free from defects except
those caused by misuse or mishandling occurring after such delivery. Progenics
agrees to notify Du Pont prior to
<PAGE>
-3-
making any formulation changes in the Product. Progenics further warrants that
packaged product will meet the warranty of merchantability and fitness for
intended use. In the event of a recall of Product, Progenics agrees to
reimburse Du Pont for all reasonable costs incurred in the recall.
12. USE OF MATERIAL: Progenics shall supply Du Pont sCD4 to be sold by Du Pont
to third parties. The material will be used only for research purposes and not
for other uses such as clinical diagnostics or therapeutic development. This
Agreement is limited to resale of sCD4 as packaged at Progenics and does not
allow Du Pont to modify sCD4 or combine sCD4 with other components.
[***]
[***] Confidential Treatment Requested
<PAGE>
-4-
13. RELATIONSHIP OF THE PARTIES: Nothing contained herein shall be construed
to empower either party to act as agent for the other. The parties agree that
each of them shall, in relation to its obligations hereunder, be acting as an
independent contractor. Not withstanding, neither party shall, during the
period of this Agreement, enter into discussions nor create an alternative
arrangement with any third party concerning the subject matter herein, without
first advising the other party of its intent.
14. AUDITS: Progenics shall permit no less frequently than once per year, and
upon reasonable notice by Du Pont, inspections and audits by Du Pont during
regular business hours of all records and aspects of sCD4 manufacture, testing,
packaging, labeling and shipping.
15. CANCELLATIONS: This Agreement may be cancelled by either party upon 120
days written notice to the other party.
16. ENTIRETY: This Agreement, together with the Attachments specifically
referenced and attached hereto, embodies the entire understanding between Du
Pont and Progenics, and there are no contracts, warranties, or
representations, oral or written, express or implied, with reference to the
subject matter hereof which are not merged herein. Except as otherwise
specifically stated, no modification hereto shall be of any force or effect
unless reduced to writing and signed by both parties and expressly referred
to as being modifications of this Agreement.
AGREED & APPROVED:
FOR PROGENICS: FOR DU PONT:
Name Paul J. Maddon, M.D., Ph.D. Name: Robert M. Hand
------------------------------- ------------------------------
Title Chairman and CEO Title: Senior Purchasing Agent
------------------------------ -----------------------------
Signature: /s/ Paul J. Maddon Signature: /s/ Robert M. Hand
------------------------- -------------------------
Date: November 3, 1993 Date: October 27, 1993
------------------------------ ------------------------------
<PAGE>
ATTACHMENT "A"
PRODUCT SPECIFICATION SHEET
PRODUCT: Recombinant Soluble CD4
PRODUCT Full-length extracellular domain of human CD4
DESCRIPTION: produced in a CHO expression system.
CONCENTRATION: GREATER THAN = 1.0 mg/ml
AMOUNT GREATER THAN = 100 micrograms/vial
STORAGE BUFFER: 50 mM MES, pH 6.0, 0.35M NaCl
SHIP: DRY ICE
STORE: -80 DEG. C
STABILITY: 6 months at -80 DEG. C
QUALITY CONTROL
CONCENTRATION Determined by Optical Density and
AND PURITY: SDS-PAGE/Silver stain (Purity GREATER THAN 95%)
AUTHENTICITY: Reactive with gp 120 and anti-CD4 monoclonal and
polyclonal antibodies.
Glycosylation pattern identical to natural
human product.
ACTIVITY: Binds HIV gp 120; inhibits binding of HIV to CD4+
lymphocytes and infection of CD4+ lymophoeytes with
HIV.
<PAGE>
[LETTERHEAD]
Reference is made to the Agreement entered into the 3rd day of November, 1993,
as amended between NEN Life Science Products, a division of E.I. DuPont de
Nemours and Company (NEN) and Progenics Pharmaceuticals, Inc. (Progenics)
relative to the purchase of sCD4 by NEN. It is hereby mutually agreed to
further amend the aforesaid Agreement in the following manner effective July 1,
1996.
This amendment is being made to update pricing for a three year period as
follows:
[***]
All other terms and conditions of the current Agreement, except as modified in
the above manner, shall continue in full force and effect. Please indicate your
acceptance of this amendment by signing both copies in the space provided below
and return the copy marked "NEN M&L Copy" to Judy Lima-Ziegler, E.I.DuPont de
Nemours and Company, Purchasing Department, 549 Albany Street, Boston, MA 02118,
keeping the original for your files.
Very truly yours,
ProgensPharmaceuticals, Inc. NEN LIFE SCIENCE PRODUCTS
BY: BY: /s/ Robert M. Hand
TITLE: SR DIRECTOR, GRP. DEV. TITLE: Sr. Purchasing Agent
-----------------------------
DATE: June 26, 1996 DATE: June 13, 1996
------------------------------
[*** Confidential Treatment Requested]
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11.1
PROGENICS PHARMACEUTICALS, INC.
STATEMENT OF COMPUTATION OF LOSS PER SHARE
Year Ended December 31,
-------------------------------------------------------------------------------------------
1993 1994 1995
--------------------------- ----------------------------- -------------------------------
Primary Fully Diluted Primary Fully Diluted Primary Fully Diluted
------------- ------------- ------------- -------------- ------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Net loss $(2,394,617) $(2,394,617) $(3,411,734) $(3,411,734) $(4,503,496) $(4,503,496)
Interest expense recognized in
connection with convertible debt
assumed to have been converted 23,671
Reduction of net loss assuming a
portion of the proceeds from the
exercise of options and warrants
was used to repay a term note and
capital lease obligations and to
invest in short-term government
securities in accordance with the
treasury stock method 42,700 365,597 312,360
-------------------------------------------------------------------------------------------
Net loss $(2,394,617) $(2,351,917) $(3,411,734) $(3,046,137) $(4,503,496) $(4,167,465)
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Weighted average number of
common shares outstanding 2,249,675 2,249,675 2,249,675 2,249,675 2,264,839 2,264,839
Shares issuable upon assumed conversion
of convertible debt and preferred
stock 2,339,948 2,953,554 3,272,943
Shares issuable upon exercise
of outstanding options and
warrants 1,087,748 2,462,494 2,052,306
Shares assumed to be repurchased
under the treasury stock method (449,933) (449,933) (458,933)
-------------------------------------------------------------------------------------------
Weighted average number of
common shares used in computing
per share data 2,249,675 5,227,438 2,249,675 7,215,790 2,264,839 7,131,155
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
Net loss per share $ (1.06) $ (0.45) $ (1.52) $ (0.42) $ (1.99) $ (0.58)
-------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11.2
PROGENICS PHARMACEUTICALS, INC.
STATEMENT OF COMPUTATION OF LOSS PER SHARE
Six Months Ended June 30,
------------------------------------------------------------------------------------------
1995 1996
------------------------------------------ -------------------------------------------
Primary Fully Diluted Primary Fully Diluted
----------------- -------------------- -------------------- ------------------
<S> <C> <C> <C> <C>
Net loss $ (2,042,936) $ (2,042,936) $ (2,085,006) $ (2,085,006)
Reduction of net loss assuming a
portion of the proceeds from the
exercise of options and warrants
was used to repay a term note and
capital lease obligations and to
invest in short-term government
securities in accordance with the
treasury stock method 368,435 233,940
------------------------------------------------------------------------------------------
Net loss $ (2,042,936) $ (1,674,501) $ (2,085,006) $ (1,851,066)
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Weighted average number of
common shares outstanding 2,249,675 2,249,675 2,294,675 2,294,675
Shares issuable upon assumed conversion
of convertible debt and preferred
stock 3,218,123 4,098,320
Shares issuable upon exercise
of outstanding options and
warrants 2,246,319 1,964,314
Shares assumed to be repurchased
under the treasury stock method (449,933) (458,933)
------------------------------------------------------------------------------------------
Weighted average number of
common shares used in computing
per share data 2,249,675 7,264,184 2,294,675 7,898,376
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
Net loss per share $ (0.91) $ (0.23) $ (0.91) $ (0.23)
------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11.3
PROGENICS PHARMACEUTICALS, INC.
PRO FORMA STATEMENT OF COMPUTATION OF LOSS PER SHARE
Year Ended Six Months
December 31, Ended June 30,
1995 1996
------------- -------------
<S> <C> <C>
PRO FORMA IN ACCORDANCE
WITH THE SECURITIES AND
EXCHANGE COMMISSION
STAFF ACCOUNTING
BULLETIN NO. 64
Net loss $ (4,503,496) $ (2,085,006)
------------- -------------
------------- -------------
Weighted average number
of common shares
outstanding 2,294,675 2,294,675
Shares issuable upon
assumed conversion
of preferred stock 4,259,878 4,259,878
Shares issuable upon
exercise of outstanding
options and warrants 336,937 336,937
Shares assumed to be
repurchased under the
treasury stock method (765,518) (765,518)
------------- -------------
Weighted average number
of common shares used
in computing per share data 6,125,972 6,125,972
------------- -------------
------------- -------------
Net loss per share $ (0.74) $ (0.34)
------------- -------------
------------- -------------
</TABLE>
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-1 of our
report dated February 15, 1996, except for Note 5 as to which the date is
October 2, 1996, on our audits of the financial statements of Progenics
Pharmaceuticals, Inc. We also consent to the reference to our firm under the
captions "Selected Financial Data" and "Experts."
Coopers & Lybrand L.L.P.
New York, New York
October 2, 1996
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<CIK> 0000835887
<NAME> PROGENICS
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> YEAR 6-MOS
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1996
<PERIOD-END> DEC-31-1995 JUN-30-1996
<CASH> 559 3,070
<SECURITIES> 0 0
<RECEIVABLES> 0 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 690 3,130
<PP&E> 2,144 1,709
<DEPRECIATION> 1,178 759
<TOTAL-ASSETS> 1,736 4,150
<CURRENT-LIABILITIES> 671 438
<BONDS> 0 0
0 0
5 5
<COMMON> 3 3
<OTHER-SE> 844 3,511
<TOTAL-LIABILITY-AND-EQUITY> 1,736 4,150
<SALES> 50 58
<TOTAL-REVENUES> 821 305
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 5,238 2,362
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 87 28
<INCOME-PRETAX> (4,504) (2,085)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (4,504) (2,085)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (4,504) (2,085)
<EPS-PRIMARY> (1.99) (0.91)
<EPS-DILUTED> (0.58) (0.23)
</TABLE>
