SECURITIES AND EXCHANGE COMMISSION 2/17/98
WASHINGTON, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission File Number: 0-19131
MEDIMMUNE, INC.
(Exact name of registrant as specified in its charter)
Delaware 52-1555759
State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or organization)
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
(Address of principal executive office)
(Zip Code)
Registrant's telephone number, including area code: (301) 417-0770
Securities Registered pursuant to Section 12(b) of the Act: None
Securities Registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes: X No:
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K [ ].
Aggregate market value of the 25,914,575 shares of voting stock held by non-
affiliates of the registrant based on the closing price on February 28, 1998
was $1,344,318,578 . Common Stock outstanding as of February 28, 1998:
26,325,172 shares.
Documents Incorporated by Reference:
Document Part of Form 10-K
Proxy Statement for the Annual Meeting Part III
of Stockholders to be held May 15, 1998.
MEDIMMUNE, INC.
FORM 10-K
TABLE OF CONTENTS
PART I PAGE
Item 1. Business 1
Item 2. Properties 34
Item 3. Legal Proceedings 35
Item 4. Submission of Matters to a Vote of Security Holders 35
PART II
Item 5. Market for MedImmune, Inc.'s Common Stock and Related
Shareholder Matters 35
Item 6. Selected Financial Data 36
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 36
Item 8. Financial Statements and Supplementary Data 47
Report of Independent Accountants 79
Report of Management 81
Item 9. Changes in and Disagreements with Accountants on
Accounting Financial Disclosure 82
PART III
Item 10. Directors and Executive Officers of MedImmune, Inc. 82
Item 11. Executive Compensation 83
Item 12. Security Ownership of Certain Beneficial Owners and
Management 83
Item 13. Certain Relationships and Related Transactions 83
PART IV
ITEM 14. Exhibits, Financial Statement Schedule, and
Reports on Form 8-K 84
SIGNATURES 86
Schedule I S-1
Exhibit Index E1-E6
Exhibits (Attached to this Report on Form 10-K)
CytoGam and RespiGam are registered trademarks and Synagis is a trademark of
the Company.
____________________
THE STATEMENTS IN THIS ANNUAL REPORT THAT ARE NOT DESCRIPTIONS OF
HISTORICAL FACTS MAY BE FORWARD-LOOKING STATEMENTS. SUCH STATEMENTS REFLECT
MANAGEMENT'S CURRENT VIEWS, ARE BASED ON CERTAIN ASSUMPTIONS AND ARE SUBJECT
TO RISKS AND UNCERTAINTIES, INCLUDING, BUT NOT LIMITED TO, REGULATORY
APPROVAL TIMING, PRODUCT DEMAND AND MARKET ACCEPTANCE RISKS, PATENT AND
INTELLECTUAL PROPERTY RISKS, THE EARLY STAGE OF PRODUCT DEVELOPMENT, AND
RELIANCE ON THIRD-PARTY MANUFACTURERS INCLUDING BUT NOT LIMITED TO CAPACITY
AND SUPPLY CONSTRAINTS, PRODUCTIONS YIELDS, REGULATORY APPROVAL TIMING AND
FOREIGN EXCHANGE RISKS, AS WELL AS OTHER RISKS DETAILED IN THE COMPANY'S
FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION. ACTUAL RESULTS COULD
DIFFER MATERIALLY FROM THOSE CURRENTLY ANTICIPATED AS A RESULT OF THE
FOREGOING OR OTHER FACTORS.
____________________
PART I
Item 1. Business
MedImmune ("the Company") is a biotechnology company focused on developing
and marketing products for the prevention and treatment of infectious disease
and for use in transplantation medicine. Since commencing operations in 1988,
the Company has pursued a strategy of establishing an initial commercial base
using proven technologies and targeting well-understood diseases to support
longer-term product development.
The Company is currently marketing two products, CytoGam (Cytomegalovirus
Immune Globulin Intravenous (Human), CMV-IGIV) and RespiGam (Respiratory
Syncytial Virus Immune Globulin Intravenous (Human), RSV-IGIV). The Company
has filed a Biologic License Application ("BLA") requesting marketing
clearance in the United States for a third product, Synagis (palivizumab,
formerly known as MEDI-493). Additionally, the Company has five products
undergoing clinical trials and a number of product candidates and
technologies in the pipeline.
<PAGE 1>
Products on the Market.
RespiGam
RespiGam was cleared by the United States Food and Drug Administration
("FDA") for marketing in the United States in January 1996. RespiGam is
indicated for the prevention of serious respiratory syncytial virus ("RSV")
disease in children under 24 months of age with a chronic lung condition
called bronchopulmonary dysplasia ("BPD") or a history of premature birth
(i.e., born at 35 weeks or less gestation). RespiGam is the only product
demonstrated to be safe and effective in reducing the incidence and duration
of RSV hospitalization and the severity of RSV illness in these high risk
infants.
RespiGam is an intravenous specialty immune globulin purified from donor
plasma screened for high levels of neutralizing antibodies against RSV. RSV
is the leading cause of pneumonia and bronchiolitis in children and results
in an estimated 90,000 hospitalizations and 4,500 deaths annually in the
United States. RSV outbreaks occur worldwide, usually during the late fall,
winter and early spring in the Northern Hemisphere. Certain populations of
infants, children and adults are at increased risk for developing severe RSV
disease. Of the more than 300,000 infants at risk, there are approximately
100,000 at extreme risk who are the most common end-users of RespiGam. These
include severely premature infants (i.e., less than or equal to 32 weeks
gestation) and infants with BPD.
The Company directly markets RespiGam to the leading 420 neonatal and
pediatric hospitals in the United States. These hospitals comprise
approximately 70% of the total potential business for RespiGam. The Company
received marketing clearance for RespiGam in Canada during 1997., however as
of December 31 the Canadian Blood Agency has not yet notified the Company as
to whether RespiGam will be reimbursed by the agency.
<PAGE 2>
During 1997, RespiGam sales were $45.0 million. The majority of these sales
occurred in fourth quarter 1997 because of inherent seasonality of demand.
Sales in 1997 were limited by supply.
The Company is aware of one potential direct competitor to RespiGam, the
Company's own product candidate, Synagis. Sales of Synagis, if and when
cleared for marketing by the FDA, would largely replace RespiGam sales.
Consequently, if and when Synagis is cleared for marketing, the Company may
be compelled to record a reserve against RespiGam inventory. The magnitude
of this inventory reserve, if any, would be determined by a number of
factors, including but not limited to, the anticipated timing of Synagis
marketing clearance, the extent of RespiGam inventory on hand at that time,
the assessed market potential of Synagis and the assessed market potential of
RespiGam.
CytoGam
CytoGam is an intravenous specialty immune globulin product enriched in
antibodies against CMV and is marketed for the attenuation of primary
cytomegalovirus ("CMV") disease associated with kidney transplantation.
Approximately 75% of untreated donor-positive/recipient-negative kidney
transplant recipients are expected to develop CMV disease. Infection of a
transplant recipient with CMV by a donor organ is associated with increased
mortality and substantial morbidity including pneumonia, hepatitis,
opportunistic infections and possibly graft rejection. CytoGam has been shown
to reduce the incidence of severe CMV disease and opportunistic infections
associated with kidney transplantation. CytoGam was cleared for marketing by
the FDA in 1991 and was initially sold through an exclusive distribution
agreement with Connaught Laboratories. The Company began marketing CytoGam
through its own hospital-based sales force in 1993. Sales of CytoGam have
grown at a compounded annual rate of approximately 25% since 1993 to $20.3
million in 1997.
<PAGE 3>
The Company continues to expand the opportunities for CytoGam outside the
United States. During 1997, the Company received marketing clearance for
CytoGam in Canada, Mexico and Poland and product was sold by distributors in
Turkey, the Czech Republic, Poland and Canada and on a named-patient basis in
Japan, Australia, Trinidad and Bolivia. The Company expects to submit over
the next 12 to 18 months new applications requesting marketing clearance in
certain European, Latin American and Middle Eastern countries.
The Company's orphan drug status expired in 1997 and there can be no
assurance that additional CMV intravenous specialty immune globulin products
will not be successfully commercialized by other companies. The Company is
aware of one other CMV immune globulin in development by NABI, Inc.
Products In Development
Synagis
Synagis (palivizumab; formerly known as MEDI-493) is a humanized monoclonal
antibody which has been evaluated by the Company in a number of clinical
trials and currently is being reviewed by the FDA for the prevention of
serious RSV disease in certain high-risk infants (for description of RSV
disease, see "RespiGam" above). Synagis is administered by intramuscular
injection, while RespiGam is administered by the more complex and time-
consuming process of intravenous infusion. Consequently, the Company believes
that Synagis has the potential to enhance patient care, reduce costs
associated with drug administration and improve convenience for parents,
physicians and nurses, as compared with RespiGam. Taken together, the
Company believes these benefits may provide the potential for Synagis to
reach a broader population of children than RespiGam. While RespiGam is
primarily a hospital-based drug, the Company believes a significant portion
of expanded Synagis use
<PAGE 4>
will occur in pediatricians' offices.
During 1997, the Company announced the preliminary results of a double-blind
placebo-controlled Phase 3 clinical trial ("IMpact-RSV") conducted at 139
medical centers in 1,502 high-risk infants and children in the United States,
Canada and the United Kingdom. Initial analysis of these results suggested
that Synagis reduced the incidence of RSV-associated hospitalizations by 55
percent (p=0.00004; Fisher's exact test). The study included infants and
children who were either less than six months of age with a history of
prematurity (i.e., less than or equal to 35 weeks gestation) or less than
twenty-four months of age with BPD. Patients received a dose of either 15
mg/kg of Synagis (n = 1002) or placebo (n = 500) by intramuscular injection
each month for up to five doses during the RSV season, November 1996 through
April 1997. Patients were followed for one month after their last dose for
safety and efficacy endpoints. Analyses were conducted using the all-
randomized patient population. In the Company's preliminary analysis,
certain of the secondary endpoints also reached statistical significance,
including RSV hospital days, RSV ICU admissions and RSV hospital days with
increased supplemental oxygen.
The profile of adverse events and serious adverse events was similar between
the Synagis and placebo groups. Likewise, fatalities were balanced between
the treatment and placebo groups (0.4 percent (4/1002) in the group that
received Synagis and 1.0 percent (5/500) in the group that received placebo).
The fatality rates observed were consistent with those expected in these
children as a result of their severe underlying disease, and none of the
fatalities was attributed by the investigators to Synagis.
Based on these results and earlier pre-clinical and clinical studies,
<PAGE 5>
the Company submitted in fourth quarter 1997 a BLA to the FDA requesting
marketing clearance of Synagis. This application was submitted with required
product manufacturing data from the Company's Gaithersburg, Maryland pilot
plant. The pilot plant is subject to FDA inspection and approval. The
Company cannot market Synagis in the United States unless and until licensed
to do so by the FDA. There can be no assurance that the FDA will grant such
clearance.
During fourth quarter 1997, the Company executed strategic agreements with
Abbott Laboratories ("Abbott") and Boehringer Ingelheim Pharma KG ("BI"),
related to the potential commercialization of Synagis. In December, the
Company and Abbott formed an exclusive worldwide marketing alliance
consisting of two separate agreements: a distribution agreement outside the
United States and a threshold-based co-promotion agreement within the United
States. Abbott is a global, diversified health care company with $11 billion
in sales in 130 countries and a strong presence in pediatrics. Outside the
United States, Abbott's international division will have the exclusive right
to market and distribute Synagis if and when cleared for marketing by
regulatory authorities. The Company and Abbott expect to submit regulatory
applications to Canadian and European authorities during 1998. Under terms
of the agreement, MedImmune received a $15 million payment in December 1997,
would receive an additional $30 million if and when Synagis receives United
States and European marketing approvals and would receive an additional $15
million upon the achievement of certain sales levels by Abbott. For sales
outside the United States, MedImmune would manufacture and sell Synagis to
Abbott at a price based on end-user sales. Within the United States,
Abbott's Ross Products division will co-promote Synagis with the Company.
The Company will be credited with all U.S. sales and Abbott will receive a
commission on sales above pre-determined thresholds. Each company is
<PAGE 6>
responsible for its own selling expenses.
Additionally in December, the Company and BI, a world-leading manufacturer of
biopharmaceutical products for therapeutic use, signed an agreement to
supplement MedImmune's own production capacity for Synagis. During 1998, the
Company and BI expect to file a supplement to the Company's BLA for
additional manufacturing capacity utilizing the BI facility in Biberach,
Germany. Product manufactured at the BI facility will be required to launch
Synagis, if it is approved by regulatory authorities.
While the Company believes it has established a comprehensive development
program for Synagis and an extensive commercialization plan if cleared for
marketing, substantial risk remains: 1) no assurances can be given that the
FDA will grant Synagis marketing clearance based on the data supplied, 2) no
assurances can be given that such marketing clearance, if forthcoming, would
be granted in a timely manner, 3) no assurances can be given that BI will
successfully be able to manufacture Synagis with adequate production yields,
appropriate timeliness and lasting economic feasibility, 4) no assurances can
be given that the Company's pilot plant will be licensed by the FDA for the
manufacture of Synagis in a timely manner, 5) no assurances can be given that
the quantity of such product, if successfully manufactured, would be
appropriately matched to its demand if and when cleared for marketing, and 6)
no assurances can be given that Synagis, if cleared for marketing, would be
successfully sold in the markets targeted by the Company and Abbott.
Human Papillomavirus Vaccine
Human papillomaviruses ("HPVs") are responsible for the development of
genital warts and cervical cancer. There are currently no vaccines to
<PAGE 7>
prevent these common sexually transmitted diseases that affect 24 to 40
million men and women in the United States. There are over 75 different
types of HPV associated with a variety of clinical disorders ranging from
benign lesions to potentially lethal cancers. Four types of HPV cause the
majority of genital warts and cervical cancer cases: HPV-6, HPV-11, HPV-16
and HPV-18.
The Company's first three HPV vaccine candidates, MEDI-501 (HPV-11), MEDI-503
(HPV-16) and MEDI-504 (HPV-18), each are composed of the HPV L1 capsid
protein which self assembles into virus-like particles (VLPs). The VLPs,
which are produced in vitro using recombinant DNA technology, imitate the
structure of natural papillomavirus, but are not infectious. When presented
to the immune system, VLPs may be able to elicit a similar immune response to
that seen with naturally occurring HPV. Scientists at the Company in
collaboration with a team at Georgetown University first demonstrated the
effectiveness of a VLP vaccine candidate using a dog model for papillomavirus
infection. These data, first published in "The Proceedings of the National
Academy of Sciences" in December 1995, provided the scientific rationale for
developing an analogous vaccine for humans.
The Company began a Phase 1 clinical trial with MEDI-501 in January 1997 to
evaluate its safety, tolerance, and immunogenicity. Initial data from the
trial suggested that MEDI-501 was safe and immunogenic. The Company also
expects to file Investigational New Drug (IND) applications during 1998 to
request clearance to begin clinical trials with MEDI-504 and MEDI-503. The
Company believes two or more HPV types would be necessary for a vaccine
capable of broadly preventing HPV disease of the genital tract.
In December 1997, the Company announced a strategic alliance with
<PAGE 8>
SmithKline Beecham ("SB") to develop and commercialize the Company's HPV
vaccines. Under terms of the agreement, SB receives exclusive worldwide
rights to the Company's HPV vaccine technology and both companies will
collaborate on research and development activities. In January 1998, the
Company received an up-front payment of $15 million and an equity investment
of $5.0 million. Pursuant to the agreement, the Company will also receive
research funding beginning in 1998, potential developmental and sales
milestones, as well as royalties on any product sales. Total funding and
payments to the Company could total over $85 million.
Under terms of the agreement, the Company will conduct Phase 1 and Phase 2
clinical trials, manufacture clinical material for those studies and receive
funding from SB for these activities. SB is responsible for the final
development of the product, as well as regulatory, manufacturing, and
marketing activities.
MEDI-507
MEDI-507 is a humanized monoclonal antibody being developed by the Company in
collaboration with BioTransplant, Incorporated. The companies believe this
molecule has unique properties which may make it useful in one or more
applications where modulating an immune response may be desirable. These
applications may include treatment of graft-versus-host disease("GvHD"),
prevention of organ transplant rejection or in treating autoimmune diseases
such as psoriasis. MEDI-507 was derived from a rat monoclonal antibody
called BTI-322.
Both MEDI-507 and BTI-322 bind specifically to the CD2 antigen receptor found
on T cells and natural killer (NK) cells. Laboratory studies have suggested
that BTI-322 and MEDI-507 primarily inhibit the response of T cells directed
at transplant antigens while subsequently allowing
<PAGE 9>
immune cells to respond normally to other antigens. The selectivity
and long lasting effects of this inhibition suggest that these molecules may
have potential utility in applications such as transplantation and autoimmune
diseases.
During 1997, the companies began the first human MEDI-507 clinical trial, a
Phase 1 open-label, dose-escalating, transplantation induction trial to
evaluate the safety and tolerance of MEDI-507 in patients receiving kidney
transplants. Also during late 1997, the Company submitted to the FDA two INDs
requesting clearance to begin a Phase 1/2 study evaluating MEDI-507 in GvHD
and to begin a Phase 1 study in psoriasis patients.
BTI-322 has been evaluated in over 60 patients in the United States and
Europe for its potential to prevent and treat organ graft rejection and GvHD.
BTI-322 was evaluated in a multi-center Phase 2 trial for treatment of acute
GvHD. Initial analysis of data from this trial suggested that BTI-322 was
well-tolerated. The average grade of GvHD improved during treatment with BTI-
322 (p=0.0005), however many patients relapsed after treatment was stopped.
In addition, preliminary analyses of data from two Phase 1/2 clinical studies
were presented in August 1996 at the XVI International Congress of the
Transplantation Society in Barcelona, Spain. BTI-322 in these studies also
appeared well-tolerated and showed initial promise in preventing and treating
kidney transplant rejection. A Phase 1/2 clinical trial evaluating BTI-322
in the treatment of acute kidney rejection is underway at the Massachusetts
General Hospital under an IND application submitted to the FDA by
BioTransplant. In initial studies, both MEDI-507 and BTI-322 appear to
possess similar biological properties. The companies expect to replace
development of BTI-322 with that of MEDI-
<PAGE 10>
507 because of the potentially improved immunogenicity of a humanized
antibody such as MEDI-507 compared with a murine antibody such as BTI-322.
There are approximately 19,000 solid organ transplants and 11,000 bone marrow
transplantation procedures annually in the United States. Despite
significant improvements in the transplantation arena, life-threatening
complications such as GvHD and organ rejection remain serious medical
problems. GvHD is the most common complication of bone marrow or stem cell
transplantation. Approximately 50 percent of bone marrow transplants result
in GvHD which occurs when immune cells of the foreign graft, i.e., the donor
bone marrow, initiate an inflammatory reaction against the tissues of the
recipient. Typically, the disease is treated with steroids although
approximately 50 percent of patients fail to respond to steroid therapy.
Patients who develop moderate or severe GvHD have over a 70 percent chance of
death despite diverse treatments. Lack of understanding of the physiologic
mechanism of disease has been a major impediment to the development of more
effective treatments. Both T cells and natural killer (NK) cells may play a
role in development of GvHD. MEDI-507 which specifically inhibits both types
of cells may provide certain advantages over current therapies. The Company
is aware of a number of companies developing products to prevent and treat
GvHD.
Autoimmune diseases are of major medical importance worldwide and include
common afflictions like rheumatoid arthritis, multiple sclerosis, Crohn's
disease and psoriasis. The Company is aware of a number of companies
developing products to treat psoriasis and other autoimmune diseases.
<PAGE 11>
Lyme Disease Vaccine
Lyme disease is the most common insect-borne disease in the United States.
Virtually every state within the United States has reported cases of Lyme
disease, with an annual nationwide reported incidence of 16,455 new cases in
1996, a 41 percent increase over 1995. Lyme disease is also reported in
Europe, Japan, China, Russia and Australia. The disease is caused by a
bacterium know as Borrelia burgdorferi ("B. burgdorferi") and is transmitted
through a tick, Ixodes scapularis, which is most commonly found on the white-
footed mouse or deer.
The Company is developing a B. burgdorferi protein called decorin binding
protein ("DbpA") which initial animal studies suggest may provide protection
against B. burgdorferi infection. Unlike antibodies to vaccines in
development by other companies, DbpA antibodies can be given to mice four
days after infections and still clear the bacterium from animals. This may
allow a significantly greater window of opportunity for a protective immune
response to clear infection. The Company believes that DbpA is the only
protein identified form B. burgdorferi to date for which this effect has been
demonstrated. In addition, antibodies from animals immunized with DbpA
inhibited growth of many strains of the Lyme disease-causing bacteria not
inhibited by antibodies to another vaccine candidate in development by the
Company, including some species of Lyme bacteria commonly found outside the
United States. These results suggest that DbpA may provide an improved Lyme
disease vaccine candidate or, alternately, a supplement to the vaccine
candidates currently in development.
The Company is aware of two companies, SmithKline Beecham and Pasteur Merieux
Connaught, that have submitted BLAs to the FDA for Lyme disease vaccines
based on a protein known as OspA. The Company is also aware of at least one
other company developing a Lyme disease vaccine based
<PAGE 12>
on a protein known as OspC. The Company believes that given the clinical
success of OspA, it is likely that DbpA would need to be combined with OspA
to result in a vaccine that is acceptable to the marketplace.
Urinary Tract Infection Vaccine
UTIs are a significant medical problem and one of the most common disorders
prompting medical attention in otherwise healthy women and children. UTIs,
caused by the bacterium Escherichia coli (E. coli), result in 7-8 million
physician and hospital visits per year at a cost of greater than $1 billion.
It is estimated that by age 30, roughly 50 percent of women have had at least
one infection and 2-10 percent are affected by recurrent infections. Females
are generally more prone to UTIs simply because of their anatomy. Recent
studies have shown that, on average, women who are 18-40 years old get 1-2
infections over a two year period. Older adults are also at risk with the
incidence as high as 33 out of 100 people.
Currently, there are no vaccines to prevent UTIs. Most infections can be
treated with antibiotics, however, recurrence is common and emerging
antibiotic resistant bacteria create an additional threat. Earlier attempts
to use pili, the hair-like protein appendages on the surface of bacteria, as
vaccine targets were not successful in protecting against a broad range of
pathogenic bacteria, including E. coli, because of the variation in the major
component of the pili. The identification of specific proteins, or
"adhesins", at the end of pili which facilitate the attachment of E. coli to
human tissue, provided a novel target for vaccine development. The Company's
vaccine strategy is based on blocking these adhesins, preventing the disease-
causing bacteria from binding and accumulating in the bladder. The novel
<PAGE 13>
target of the Company's vaccine candidate is the FimH adhesin. FimH does not
vary widely among the different strains of E. coli which cause UTIs. The
Company believes this is a requisite quality for development of a broadly
effective UTI vaccine.
During 1997, the Company published in the journal "Science" the results of
experiments which suggested that a FimH-based vaccine was able to prevent
UTIs in mice. In these studies, mice vaccinated with the Company's FimH
vaccine showed a greater than 99 percent reduction of bladder bacteria
compared to control animals. The effect persisted for 29 weeks, the entire
length of the study. Additionally, FimH antibodies were able to block the
ability of a broad range (94 percent) of E. coli strains to bind to bladder
cells in vitro.
The Company and its collaborators are currently conducting animal and primate
vaccination studies and designing clinical production and purification
protocols for its first UTI vaccine candidate. Adhesin-based vaccines may
also be an effective strategy for other diseases caused by bacteria.
Streptococcus pneumoniae Vaccine
Streptococcus pneumoniae is a major cause of pneumonia, middle-ear infections
and meningitis worldwide, especially in the very young or elderly. Pneumonia
causes more than one million deaths per year and is the most common cause of
childhood death in developing countries. In industrialized countries,
pneumococcal pneumonia is a serious problem among the elderly. Middle-ear
infections affect almost every child at least once during the first two years
of life. Vaccination against pneumococcal infections has become more urgent
in recent years due to the emergence of antibiotic-resistant strains
throughout the world.
<PAGE 14>
The Company has established a research collaboration with St. Jude Children's
Research Hospital("St. Jude") to develop products for the prevention and
treatment of Streptococcus pneumoniae infection. The Company has been
granted a worldwide exclusive license from the Rockefeller University to
commercialize product candidates developed from a novel set of genes
discovered by scientists at St. Jude, formerly at Rockefeller University. In
addition, research efforts are underway by scientists at the Company and St.
Jude to identify novel conserved surface proteins for potential vaccine
applications. During 1998, promising candidate proteins are expected to be
characterized further in a number of in vitro and in vivo models to determine
their potential as vaccine candidates.
MEDI-491, B19 Parvovirus Vaccine
Discovered in 1975, B19 parvovirus has been linked to a number of serious
conditions including certain types of miscarriages in pregnant women, life-
threatening sudden reduction of red blood cells in sickle cell anemia
patients, chronic anemia in AIDS and chemotherapy patients, and persistent
arthritis in some adults. MEDI-491 is a vaccine intended to prevent human
B19 parvovirus infection. MEDI-491 utilizes virus-like-particle ("VLP")
technology. By producing two natural B19 parvovirus proteins in the correct
proportions in an insect cell recombinant protein production system, the
Company and collaborators at the National Heart, Lung, and Blood Institute
("NHLBI") are able to generate VLPs which resemble the natural B19 parvovirus
particles, but are not infectious. The Company has completed a Phase 1
clinical trial to evaluate the safety of MEDI-491. The Company believes that
a successful B19 parvovirus vaccine could be used to immunize women entering
their child-bearing years to protect them from experiencing risk of B19
parvovirus-induced miscarriages. Alternately, a successful B19 parvovirus
vaccine could be incorporated into routine childhood
<PAGE 15>
immunization programs to reduce the prevalence of this virus.
Products and Product Development Programs
The following table summarizes the indications and current status of the
Company's products and product development programs.
Product Indication Status(1)
- ---------------------------------------------------------------------------
Infectious Disease Products
RespiGam Prevention of serious RSV disease Marketed
RSV Immune in infants with prematurity or lung
Globulin (IV) disease
Synagis RSV Prevention of RSV disease in BLA
Monoclonal high-risk infants Submitted
Antibody (IM)
MEDI-501 HPV-11 Prevention of genital warts Phase 1
Vaccine(2)
MEDI-491 B19 Prevention of B19 parvovirus Phase 1
Parvovirus infection
Vaccine
MEDI-504 HPV-18 Prevention of cervical cancer Pre- clinical
Vaccine(2) development
MEDI-503 HPV-16 Prevention of cervical cancer Pre-clinical
Vaccine(2) development
<PAGE 16>
Second Generation Prevention of Lyme disease Pre-clinical
Lyme Disease development
Vaccine
E. coli Vaccine Prevention of urinary tract Pre-clinical
(FimH Adhesin) infections development
S. pneumoniae Prevention and treatment of Research
Vaccine streptococcus pneumoniae infection
Transplantation Products
CytoGam Attenuation of primary CMV disease Marketed
in donor positive/recipient negative
kidney transplant patients
CytoGam Prevention of CMV disease in all Product
solid organ transplant patients license appl'n
amendment
submitted
Synagis RSV Treatment of RSV disease in bone Phase 1
Monoclonal marrow transplant recipients
Antibody
MEDI-507 Prevention of kidney rejection Phase 1
Monoclonal
Antibody
<PAGE 17>
MEDI-507 Treatment of graft-versus-host Phase 1/2
Monoclonal disease
Antibody
MEDI-507 Treatment of psoriasis Phase 1
Monoclonal
Antibody
_______________
(1) "Phase 1" and "Phase 2" clinical trials generally involve
administration of a product to a limited number of patients
to evaluate safety, dosage and, to some extent, efficacy.
"Phase 3" clinical trials generally examine the efficacy
and safety of a product in an expanded patient population at
multiple clinical sites.
(2) These products are being co-developed by the Company and SmithKline
Beecham. The Company is entitled to certain milestone payments and
royalties on any sales, if and when cleared for marketing by the FDA.
Marketing, Research, Development and Collaborative Agreements
The Company's internal research programs are augmented by collaborative
projects with its scientific partners. As part of its strategy, the Company
has established alliances with pharmaceutical and other biotechnology
companies, academic scientists and government laboratories. Currently, its
principal strategic alliances are the following:
Abbott Laboratories
In December 1997, the Company entered into two agreements with Abbott
Laboratories ("Abbott"). The first agreement calls for Abbott to co-promote
Synagis in the United States, if and when licensed for marketing
<PAGE 18>
by the FDA. The second agreement allows Abbott to distribute Synagis outside
the United States, if and when licensed for marketing by the appropriate
regulatory authorities. Outside the U.S., the Company would manufacture and
sell Synagis to Abbott at a price based on end user sales and could receive
additional milestone payments based on meeting certain milestones and sales
thresholds. In the U.S., Abbott would receive a percentage of net sales in
excess of annual sales thresholds. Each company is responsible for its own
selling expenses.
American Home Products Corporation
The Company's strategic alliance with American Home Products ("AHP") calls
for the two companies to co-develop and co-promote RespiGam. The agreement
provided for AHP to fund a portion of the cost of the development of RespiGam
and potentially co-promote the product in the United States. AHP shares in
the profits and losses of RespiGam in the U.S. The alliance provides for the
Company to receive royalties on any sales of AHP's RSV vaccine product,
currently in Phase 2 clinical development and for AHP to receive royalties on
any sales of Synagis.
Baxter Healthcare Corporation
In June 1995, the Company entered into an exclusive, royalty-bearing license
agreement with Baxter Healthcare Corporation ("Baxter") to commercialize
RespiGam outside North America. Concurrent with the execution of the license
agreement, Baxter also purchased 826,536 shares of Common Stock for $9.5
million. Following the results from the Company's Phase 3 clinical trial of
Synagis, sales of which, if cleared for marketing, are expected to
substantially replace RespiGam, Baxter terminated this agreement and returned
to the Company all rights to commercialize RespiGam outside North America.
Baxter has no rights to Synagis.
<PAGE 19>
BioTransplant, Incorporated
In October 1995, the Company and BioTransplant, Incorporated ("BTI") formed a
strategic alliance for the development of products to treat and prevent organ
transplant rejection. The alliance is based upon the development of products
derived from BTI's anti-CD2 antibody, BTI-322, the Company's anti-T cell
receptor antibody, MEDI-500, and future generations of products derived from
these two molecules (such as MEDI-507, or humanized BTI-322). Pursuant to the
alliance, the Company received an exclusive worldwide license to develop and
commercialize BTI-322 and any products based on BTI-322, with the exception
of the use of BTI-322 in kits for xenotransplantation or allotransplantation.
The Company has paid BTI $4.5 million in license fees and research support
through December 31, 1997. The Company has assumed responsibility for
clinical testing and commercialization of any resulting products. BTI maywill
receive research support and milestone payments which could total up to an
additional $11.0 million, as well as royalties on any sales of BTI-322,
MEDI-500, MEDI-507 and future generations of these products, if any.
Human Genome Sciences, Inc.
In July 1995, the Company entered into a collaborative research and
development relationship with Human Genome Sciences, Inc. ("HGS") to create
antibacterial vaccines and immunotherapeutic products based upon the genomic
sequences of bacteria. The Company and HGS have collaborative research
efforts underway to develop vaccines for non-typeable Haemophilus influenzae
and Streptococcus pneumoniae. Rights to another genomic sequence for vaccine
development, Helicobacter pylori, were out-licensed to Oravax, Inc. and
Pasteur Merieux Connaught in November 1996 for license payments as well as
milestone and royalty obligations. Pursuant to a collaboration and license
agreement between the Company and HGS, the Company will be solely responsible
for the commercialization of any products developed through the
collaboration, and HGS will be
<PAGE 20>
entitled to royalties based upon the extent to which any products jointly
developed are covered by patents or license rights held by HGS.
Massachusetts Health Research Institute and Massachusetts Biologics
Laboratories
In August 1989 and April 1990, the Company entered into a series of research,
supply and license agreements with Massachusetts Health Research Institute
("MHRI") and Massachusetts Public Health Biologics Laboratories, then a
division of the Massachusetts Department of Public Health ("The State Lab"),
covering products intended for the prevention or treatment of CMV and RSV
infection and other respiratory virus infections by immune globulins or
monoclonal antibodies. The Company has agreed to pay royalties on all sales
using the licensed technology. Pursuant to the agreements, the Company paid
$13.3 million in 1997, $11.8 million in 1996 and $5.8 million in 1995, for
royalties, process development and manufacturing. MHRI has rights to receive
royalties on any future sales of Synagis, if and when approved by the FDA.
See Note 13 of Notes to Financial Statements.
SmithKline Beecham
In December 1997, the Company entered into a strategic alliance with
SmithKline Beecham PLC ("SB") to research, develop, manufacture and
commercialize therapeutic and prophylactic HPV vaccines. In exchange for
exclusive worldwide rights to the Company's HPV technology, SB has agreed to
provide the Company with an up-front payment of $15 million, future funding
and potential developmental and sales milestones which together could total
over $85 million, as well as royalties on any product sales. Under the terms
of the agreement, the companies will collaborate on research and development
activities. MedImmune will conduct Phase 1 and Phase 2 clinical trials and
manufacture clinical material for those studies. SB is responsible for the
final development of the product, as
<PAGE 21>
well as regulatory, manufacturing, and marketing activities. In January
1998, the Company received the $15 million payment from SB and completed the
sale of 83,410 shares of common stock to SB resulting in net proceeds to the
Company of $5.0 million.
Other Agreements.
The Company has a number of other collaborative and business agreements with
academic institutions and business corporations, including agreements with 1)
Washington University in St. Louis covering development of pilus-based
anti-bacterial vaccines, 2) Georgetown University, the German Cancer Research
Center and the University of Rochester covering development of vaccines for
human papillomaviruses and 3) Scientists at St. JudeRockefeller University
for the discovery and commercialization of products to treat and prevent
Streptococcus pneumoniae. In addition, the Company has license agreements
with third parties foron CytoGam, RespiGam, Synagis and substantially all of
its other potential products. Under such license agreements the Company is
obligated to pay royalties on any sales of these products.
Marketing and Sales
The Company has developed a sales and marketing organization which it
believes is responsive to the increased importance of managed care and the
need of the healthcare industry to provide lower costs and higher quality
care.
The Company's first product, CytoGam, was originally marketed by a third
party as the Company's exclusive distributor. In December 1992, the Company
reacquired marketing rights to CytoGam and in January 1993, the Company
commenced marketing of CytoGam in the United States through its own sales
force (then consisting of 14 people) focused on 250 leading transplantation
hospitals. Sales outside the United States are made through regional
distributors.
<PAGE 22>
The Company now has approximately 75 people devoted to sales and marketing of
the Company's two approved products. Approximately 48 sales and managed care
representatives cover approximately 500 hospitals and clinics in the United
States, which specialize in transplantation and/or pediatric/neonatal care,
for the promotion of CytoGam and RespiGam, respectively. Each sales
representative is responsible for selling both CytoGam and RespiGam.
The Company has established a collaboration with Abbott, through its Ross
Pediatrics Division, to co-promote Synagis in the U.S., if and when Synagis
is cleared for marketing by the FDA. In addition, Abbott has been selected
as the Company's exclusive distributor of Synagis outside of the U.S., if and
when Synagis is cleared for marketing by the appropriate regulatory
authorities. There can be no assurance that such approvals will be granted,
or, if granted, that approvals will occur in a timely manner. See Footnote
10 in the Notes to Financial Statements for additional information related to
the agreements with Abbott.
Manufacturing and Supply The Company has agreements with the State Lab and
MHRI pursuant to which the Company agreed to license certain technology from
the Commonwealth of Massachusetts and to collaborate on the development of
the technology. The technology relates to the two products currently being
marketed by the Company, RespiGam and CytoGam.
At the end of 1996, the Inspector General of the Commonwealth of
Massachusetts publicly issued a report alleging, among other things, that
certain present and former employees of the State Lab or MHRI were personally
receiving from MHRI, in violation of state law, a portion of the royalties
the Company was paying to MHRI on sales of RespiGam. The report also alleged
that the terms of the agreements were unfair to the Commonwealth and,
accordingly, the Commonwealth now has the right to rescind the agreements
notwithstanding the fact that the parties had operated under those agreements
for over seven years. The Inspector General has no enforcement powers.
The Company regards the allegations of the Inspector General, as they
relate to the Company, to be without merit. The Company has denied those
allegations and in early 1997 provided the Commonwealth with a detailed
rebuttal of the claims of the Inspector General pertaining to the Company.
The Company has been engaged with representatives of the Commonwealth in
negotiations to settle the matter on a mutually satisfactory basis. While
the Company believes that substantial progress has been made toward resolving
this matter in a manner generally acceptable to the Company (with no loss of
the Company's rights to technology and no interruption of operations under
the agreements, but with increased royalties), there can be no assurance that
a final resolution will, in fact, be achieved. If no settlement is reached,
the Company may be forced to litigate with the Commonwealth, and there can be
no assurance that the outcome of such a litigation would be favorable to the
Company. An unfavorable outcome could have a material adverse effect on the
Company.
The Company has entered into manufacturing, supply and purchase
agreements in order to provide a supply of human plasma and production
capability for CytoGam and RespiGam. CytoGam and RespiGam are produced from
human plasma collected from donors who have been screened to have higher
concentrations of antibodies against CMV and RSV, respectively. Human plasma
for CytoGam and RespiGam is converted to an intermediate raw material
(Fraction II+III paste) under a supply agreement with Baxter. The Company
entered into an agreement with V.I. Technologies, Inc. in 1997 to supply
additional Fraction II+III paste.
The State Lab processes the Fraction II+III paste into bulk product. The
<PAGE 23>
Company has an informal arrangement with the State Lab for planned
production of bulk product for CytoGam and RespiGam. The State Lab holds the
sole product and establishment licenses for CytoGam and RespiGam. The
Company also has an agreement with Connaught Laboratories, Inc. ("Connaught")
to fill and package CytoGam and RespiGam. If the State Lab, the suppliers of
the Fraction II+III paste, or Connaught is unable to satisfy the Company's
product requirements on a timely basis or is prevented for any reason from
manufacturing CytoGam or RespiGam, the Company may be unable to secure an
alternative supplier or manufacturer without undue and materially adverse
operational disruption and increased cost. Recently, the Company has
experienced product shortages which have limited product sales without
reducing sales and marketing costs. See Footnote 13 in the Notes to
Financial Statements for additional information related to the agreements
with the State Lab.
In 1997, the Company entered into a manufacturing and supply agreement with
BI to provide supplemental production capability for Synagis, a humanized
monoclonal antibody product for which a BLA was submitted to the FDA in
December 1997. BI must scale up production to a level not previously
attempted. No assurance can be given that BI will successfully be able to
manufacture Synagis at these levels, nor that it can achieve adequate
production yield, produce product with appropriate timeliness, or at an
acceptable cost. Product manufactured at the BI facility will be required to
launch Synagis, if and when it is licensed for marketing by regulatory
authorities. During 1998, the Company is expected to file a supplemental
amendment to its BLA for Synagis for additional manufacturing capacity
utilizing the BI facility. Should BI be unable to supply Synagis to the
Company for any reason, there can be no assurance that the Company would be
able to secure an alternate manufacturer in a timely basis or without
increased
<PAGE 24>
cost. Nor can there be any assurances that the Company or BI will be
licensed by the appropriate regulatory authorities to manufacture or market
the product.
The Company entered into an agreement with Chiron Corporation ("Chiron") in
1997, in which Chiron will fill and package Synagis produced at the
Gaithersburg pilot plant and Frederick manufacturing plant. The term of the
agreement is for three years or until such earlier time as the Company is
able to fulfill all of its own requirements. Filling and packaging of
Synagis at Chiron is subject to FDA approval.
In July 1996, the Company entered into an engineering, procurement,
construction and validation services agreement with Fluor Daniel, Inc.
("Fluor") to design and construct a manufacturing facility located on a 27
acre site in Frederick, Maryland. The Company has spent $49.0 million through
December 31, 1997 on construction of the facility. The facility,
construction of which is substantially complete, is a multi-use biologics
facility intended to provide production capability for the manufacture of
immune globulins and by-products from human plasma. In addition, the facility
contains a cell culture production area for the manufacture of protein-based
products, such as Synagis, MEDI-501 and MEDI-507, if and when they are
cleared for marketing by the FDA. There can be no assurance that the facility
will receive regulatory approval for its intended purposes. This facility is
subject to inspection and approval by the FDA and any resulting sales of
product from this facility would not commence for at least the next 18
months. The Company has no experience in commercial manufacturing.
Accordingly, even if the necessary approvals were obtained, the Company would
encounter new risks associated with commercial manufacturing, including
potential scale-up issues, cost overruns, product defects and environmental
problems.
<PAGE 25>
Furthermore, there can be no assurance that the Company will be able to
manufacture products at a cost that is competitive with third party
manufacturing operations.
The Company produces materials for clinical trials in its pilot plant
facility in Gaithersburg, Maryland. Materials currently being used in
clinical trials for MEDI-501, MEDI-507, and MEDI-491 have been produced at
the Company's pilot plant. The Company completed an expansion of the pilot
plant facility in 1997 to support the production of materials for Phase 3
clinical trials and market entry production requirements, principally for
Synagis. There can be no assurance that appropriate regulatory approvals will
be obtained to use the facility for market entry manufacturing.
Patents, Licenses and Proprietary Rights
Products currently being developed or considered for development by the
Company are in the area of biotechnology, an area in which there are
extensive patent filings. The patent position of biotechnology firms
generally is highly uncertain and involves complex legal and factual
questions. To date, no consistent policy has emerged regarding the breadth
of claims allowed in biotechnology patents. Accordingly, there can be no
assurance that patent applications owned or licensed by the Company will
result in patents being issued or that, if issued, such patents will afford
protection against competitors with similar technology.
The Company believes that there are other patents issued to third
parties and/or patent applications filed by third parties which could have
applicability to each of the Company's products and product candidates and
could adversely affect the Company's freedom to make, have made, use or sell
such products or use certain processes for their
<PAGE 26>
manufacture. The Company is unable to predict whether it will ultimately be
necessary to seek a license from such third parties or, if such a license
were necessary, whether such a license would be available on terms acceptable
to the Company. The necessity for such a license could have a material
adverse effect on the Company's business.
There has been substantial litigation regarding patent and other
intellectual property rights in the biotechnology industry. Litigation may be
necessary to enforce certain intellectual property rights of the Company.
Any such litigation could result in substantial cost to and diversion of
effort by the Company.
Government Regulation
The production and marketing of the Company's products and research and
development activities are subject to regulation for safety and efficacy by
numerous governmental authorities in the United States and other countries.
In the United States, vaccines, biologics, drugs and certain diagnostic
products are subject to FDA review and licensure. The federal Food, Drug and
Cosmetics Act, the Public Health Service Act and other federal statutes and
regulations govern or influence the testing, manufacture, safety, labeling,
storage, record keeping, licensure, advertising and promotion of such
products. No assurances can be given that any products under development will
be licensed for marketing by the FDA or, if approved, that the product would
be successfully commercialized or maintained in the marketplace.
Non-compliance with applicable requirements could result in fines, recall or
seizure of products, total or partial suspension of production, refusal of
the government to approve product license applications, restrictions on the
Company's ability to enter into supply contracts and criminal prosecution.
The FDA also has the authority to revoke product licenses and establishment
licenses previously granted.
<PAGE 27>
The FDA may designate a drug as an Orphan Drug for a particular use, in which
event the developer of the drug may be entitled to a seven year marketing
exclusivity period. CytoGam and RespiGam have been designated as Orphan Drugs
for certain indications by the FDA. Accordingly, RespiGam has market
exclusivity for its currently licensed indication through January 17, 2003.
Marketing exclusivity for CytoGam's currently licensed indication expired in
1997.
The Company is also subject to regulation by the Occupational Safety and
Health Administration ("OSHA") and the Environmental Protection Agency
("EPA") and to regulation under the Toxic Substances Control Act, the
Resources Conservation and Recovery Act and other regulatory statutes, and
may in the future be subject to other federal, state or local regulations.
OSHA and/or the EPA may promulgate regulations concerning biotechnology that
may affect the Company's research and development programs. The Company is
unable to predict whether any agency will adopt any regulation which would
have a material adverse effect on the Company's operations. The Company
voluntarily attempts to comply with guidelines of the National Institutes of
Health regarding research involving recombinant DNA molecules. Such
guidelines, among other things, restrict or prohibit certain recombinant DNA
experiments and establish levels of biological and physical containment that
must be met for various types of research.
Sales of pharmaceutical and biopharmaceutical products outside the United
States are subject to foreign regulatory requirements that vary widely from
country to country. Whether or not FDA licensure has been obtained, licensure
of a product by comparable regulatory authorities of foreign countries must
be obtained prior to the commencement of marketing the product in those
countries. The time required to obtain such licensure may be longer or
shorter than that required for FDA approval, and no
<PAGE 28>
assurances can be given that such approval will be obtained.
Competition
The biotechnology and pharmaceutical industries are characterized by rapidly
evolving technology and intense competition. The Company's competitors
include pharmaceutical, chemical and biotechnology companies, many of which
have financial, technical and marketing resources significantly greater than
those of the Company. In addition, many specialized biotechnology companies
have formed collaborations with large, established companies to support
research, development and commercialization of products that may be
competitive with those of the Company. Academic institutions, governmental
agencies and other public and private research organizations are also
conducting research activities and seeking patent protection and may
commercialize products on their own or through joint ventures.
The Company is aware of certain products manufactured by competitors that are
used for the prevention or treatment of certain diseases the Company has
targeted for product development, including CMV, RSV, Lyme disease, HPV
infections and organ graft rejection. In the prevention of CMV disease, the
Company's CytoGam competes with several other products including other
antiviral drugs, standard immune globulin preparations and intravenous and
oral ganciclovir, marketed by Hoffmann-La Roche Inc. The Company is aware
that a number of physicians have prescribed CytoGam in combination with
ganciclovir for the prevention of CMV disease in certain patients.
The Company believes that for the prevention of RSV disease, the Company's
RespiGam does not compete directly with any product; however, the Company is
aware of one product in the U. S., ribivirin, which is
<PAGE 29>
indicated for the treatment of RSV disease. Additionally, the Company's
Synagis is currently under review by the FDA. Synagis has been evaluated in
a Phase 3 clinical trial for its ability to prevent RSV disease in a
population of infants and children similar to that for which RespiGam is
indicated. If Synagis were to be cleared for marketing in the United States,
the Company believes sales of RespiGam would be substantially adversely
affected. The existence of these products, or other products or treatments
of which the Company is not aware, or products or treatments that may be
developed in the future, may adversely affect the marketability of products
developed by the Company.
The Company expects its products to compete primarily on the basis of product
efficacy, safety, patient convenience, reliability, price and patent
position. In addition, the first product to reach the market in a therapeutic
or preventive area is often at a significant competitive advantage relative
to later entrants to the market. The Company's competitive position will also
depend on its ability to attract and retain qualified scientific and other
personnel, develop effective proprietary products, implement product and
marketing plans, obtain patent protection and secure adequate capital
resources.
EXECUTIVE OFFICERS OF THE COMPANY
<TABLE>
<S> <C> <C> <C>
Officer
Name Age Position Since
- -----------------------------------------------------------------------
Wayne T. Hockmeyer, Ph.D. 53 Chairman and Chief Executive 1988
Officer
David M. Mott 32 President and Chief Operating 1992
Officer
Franklin H. Top, Jr., 62 Executive Vice President and 1988
M.D. Medical Director
<PAGE 30>
David P. Wright 50 Executive Vice President- 1990
Sales and Marketing
Bogdan Dziurzynski 49 Senior Vice President 1994
Regulatory Affairs and
Quality Assurance
James F. Young, Ph.D. 45 Senior Vice President 1989
Research and Development
</TABLE>
Dr. Hockmeyer founded the Company in April 1988 as President and Chief
Executive Officer and was elected to the Board of Directors in May 1988. He
became Chairman of the Board of Directors in May 1993. From 1986 to 1988,
Dr. Hockmeyer served as Vice President, Research and Development, of Praxis
Biologics, Inc. ("Praxis"). From 1980 to 1986, Dr. Hockmeyer served as
Chairman, Department of Immunology, Walter Reed Army Institute of Research.
Dr. Hockmeyer is a member of the Board of Directors of Digene Corporation and
serves on the Advisory Board of the University of Maryland Biotechnology
Institute. He is also a member of the Board of Directors of the High
Technology Council of Maryland and Chairman of the Maryland BioScience
Alliance. Dr. Hockmeyer received a Bachelor of Science degree from Purdue
University and a doctorate from the University of Florida.
Mr. Mott joined the Company in April 1992 as Vice President, with
responsibility for business development, strategic planning and investor
relations. In 1994, Mr. Mott assumed additional responsibility for the
medical and regulatory groups, and in 1995 was promoted to Executive Vice
President and Chief Financial Officer. In November 1995, Mr. Mott was
promoted to the position of President and Chief Operating Officer and was
elected to the Board of Directors. Prior to joining the Company, he was a
Vice President in the Health Care Investment Banking Group at Smith Barney,
Harris Upham & Co., Inc.
<PAGE 31>
At Smith Barney, where he was employed from July 1986 to April 1992, Mr.
Mott's activities included public and private equity and debt financings as
well as merger and acquisition work for biotechnology, medical services, and
medical product and device companies. He holds a bachelor of arts degree in
economics and government from Dartmouth College.
Dr. Top joined the Company in June 1988 as Executive Vice President. He was
elected to the Board of Directors in July 1988 and became the Company's
Medical Director in 1990. From 1987 to 1988, Dr. Top served as Senior Vice
President for Clinical and Regulatory Affairs at Praxis. Prior to 1987, Dr.
Top served for 22 years in the U.S. Army Medical Research and Development
Command, where he was appointed Director, Walter Reed Army Institute of
Research in 1983.
Mr. Wright, prior to joining the Company in 1990, was President of Pediatric
Pharmaceuticals, Inc. (1989-1990) and Vice President of the Gastrointestinal
Business Group at Smith, Kline and French Laboratories.
Mr. Dziurzynski, prior to joining the Company in 1994, was Vice President of
Regulatory Affairs and Quality Assurance at Immunex Corporation.
Dr. Young, prior to joining the Company in 1989, was Director, Department of
Molecular Genetics at Smith, Kline and French Laboratories.
EMPLOYEES
As of February 15, 1998, the Company had 344 full time employees. These
<PAGE 32>
include 76 marketing and sales personnel, 37 clinical and regulatory affairs
personnel, 67 manufacturing facility personnel, and 103 research and
development personnel. The Company considers relations with its employees to
be good.
ITEM 2. PROPERTIES
The Company occupies, under a lease expiring in 2006, a facility in
Gaithersburg, Maryland, that contains approximately 81,000 square feet of
research, development and administrative space. In 1996, the Company
acquired a 27 acre parcel of land in Frederick, Maryland. The Company has
substantially completed construction of a 91,000 square foot multi-use
biologics facility on this site to provide for the manufacture of immune
globulins and by-products from human plasma. In addition, the facility is
designed to contain a cell culture production area for manufacture of
products such as Synagis, if and when it is licensed by the FDA.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
PART II
ITEM 5. MARKET FOR MEDIMMUNE, INC.'S COMMON STOCK
AND RELATED SHAREHOLDER MATTERS
The Company's common stock trades on The Nasdaq Stock Market under the symbol
"MEDI". At February 28, 1998, the Company had 315 common stockholders of
record. This figure does not represent the actual
<PAGE 33>
number of beneficial owners of common stock because shares are
generally held in "street name" by securities dealers and others for the
benefit of individual owners who may vote the shares. The number of
beneficial shareholders as of February 28, 1998 was over 10,000.
The following table shows the range of high and low closing prices and year
end closing prices for the common stock for the two most recent fiscal years.
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C> <C> <C>
High Low High Low
---- ---- ---- ----
First Quarter $ 17 1/2 $ 13 3/8 $ 20 1/8 $14
Second Quarter 19 3/4 11 3/8 20 15 1/2
Third Quarter 37 1/4 16 1/2 17 1/2 11 3/8
Fourth Quarter 43 1/2 31 17 3/4 14
Year End Close $ 42 7/8 $ 17
</TABLE>
ITEM 6. SELECTED FINANCIAL DATA
(in thousands, except per share data)
<TABLE>
<S> <C> <C> <C> <C> <C>
RESULTS FOR THE YEAR 1997 1996 1995 1994 1993
----- ----- ---- ---- ----
Product sales $65,271 $35,782 $16,173 $12,054 $8,446
Other 15,693 5,317 11,263 6,804 6,633
------- ------- -------- ------- -------
Total revenues 80,964 41,099 27,436 18,858 15,079
Research and develop-
ment expenses 40,669 32,192 26,417 21,939 14,936
Net loss (36,895) (29,544) (22,671) (18,828) (13,217)
Basic and Diluted
Loss Per Common Share (1.59) (1.41) (1.41) (1.29) (0.96)
<PAGE 34>
YEAR END POSITION
Cash and
marketable
securities
Total assets $50,326 $114,765 $38,039 $22,527 $44,424
Long term debt 170,336 163,971 57,332 44,724 61,195
Shareholders' 85,363 70,874 1,984 2,090 2,186
equity
40,536 72,865 43,779 34,194 53,021
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This review contains management's discussion of the Company's operational
results and financial condition and should be read in conjunction with the
accompanying financial statements.
OVERVIEW
MedImmune commenced operations in April 1988 and, through 1990, revenue
was generated solely from research and development agreements and research
grants. In 1991, contract revenues rose substantially and the Company began
selling its first product, CytoGam, to an exclusive distributor. In December
1992, the Company reacquired the CytoGam marketing rights from its
distributor and launched an expanded marketing program for this product
through its own sales force.
On January 18, 1996, the Company's second product, RespiGam, was
licensed for marketing by the U.S. Food and Drug Administration ("FDA") for
the prevention of serious lower respiratory tract infection caused by RSV in
children under 24 months of age with BPD or a history of prematurity.
Because of the seasonal nature of RSV, limited sales, if any, are expected
during the second and third quarters, causing results to vary significantly
from quarter to quarter.
RESULTS OF OPERATIONS
1997 Compared to 1996
Product sales increased 82% for the year ended December 31, 1997, over
the year ended December 31, 1996, due to increased demand for RespiGam in the
first half of the product's second full season of sales, as well as a 10%
increase in CytoGam sales. RespiGam sales were $45.0 million in 1997 versus
$17.3 million in 1996, a 159% increase,
<PAGE 35>
reflecting an increase in vials sold. Supply constraints limited 1997 and
1996 sales. CytoGam product sales increased to $20.3 million from $18.4
million in 1996 due primarily to a 4% increase in units sold, and two price
increases that took effect in mid-1996 and mid-1997. In 1996 CytoGam product
sales were reduced by a $0.7 million reserve for trade receivables due from a
pharmaceutical wholesaler that filed Chapter 11 bankruptcy in August 1996;
$0.1 million was recovered against this loss in 1997 as a result of a sale of
the receivables to a third party. Although the Company markets directly to
hospitals and physicians, the Company sells its products through a limited
number of pharmaceutical wholesalers. A similar event with another wholesaler
could adversely affect operating income. The level of future product sales
will be dependent on several factors, including, but not limited to, the
timing and extent of future regulatory approvals of the Company's products
and product candidates, availability of finished product inventory, approval
and commercialization of competitive products and the degree of acceptance of
the Company's products in the marketplace. The Company submitted a Biologic
License Application to the FDA in December 1997 requesting marketing
clearance for its second generation RSV product, Synagis. Marketing
clearance has not yet been obtained and there can be no assurance that such
approval will be obtained. The Company believes that if Synagis were
licensed for marketing, it would significantly adversely affect sales of
RespiGam.
Other revenues increased to $15.7 million in 1997 from $5.3 million in
1996. Other revenues in 1997 reflect primarily fees paid by Abbott
Laboratories for the right to market and distribute the Company's second
generation RSV drug, Synagis, outside the U.S. The Company is also entitled
to receive an additional $30.0 million from Abbott upon receipt of a
marketing approval in the U.S. and other major markets. Sales of Synagis are
dependent upon marketing clearance from the FDA and other regulatory
authorities and there can be no assurance that such clearance will be
obtained. Other revenues in 1996 reflect the completion of milestone and
research funding payments under the Company's strategic alliance with AHP,
formerly American Cyanamid Company. Under the terms of the alliance, the
Company and AHP share in the profits or losses of RespiGam; reimbursements or
payments under this arrangement are deducted from or added to operating
expenses and
<PAGE 36>
are included in selling, administrative and general expenses. Subsequent to
December 31, 1997, the Company received $15 million from SmithKline Beecham
pursuant to an agreement signed in December 1997 to develop and commercialize
human papillomavirus vaccines for prevention of cervical cancer and genital
warts. This payment will be included in 1998 other revenues along with
research funding that will be due the Company under the terms of the
alliance. The level of contract revenues in future periods will depend
primarily upon the extent to which the Company enters into other
collaborative contractual arrangements, if any.
Cost of sales increased 75% to $34.4 million in 1997 from $19.7 million
in 1996, due to a 68% increase in vials sold. Gross margins in 1997 improved
to 47% versus 45% in 1996, reflecting the increased sales of RespiGam in the
product mix, which has a lower royalty rate than CytoGam. 1997 margins were
adversely impacted by a charge for an estimate of additional royalties due to
Massachusetts Health Research Institute as part of a possible settlement of
an ongoing inquiry by the Inspector General of the Commonwealth of
Massachusetts. (See Note 13 of Notes to Financial Statements.) If settled
as presently contemplated, the increased royalty rate would continue to apply
to future sales of RespiGam. The Company's products are manufactured by
third parties and future per-unit cost of sales could increase if the Company
is unable to negotiate favorable pricing. The Company has substantially
completed construction of its own manufacturing facility intended for some
portion of the production of its two approved products as well as other
product candidates, including Synagis. This facility is subject to
inspection and approval by the FDA and any resulting sales of product from
this facility would not commence for at least the next 18 months. If Synagis
is licensed for marketing by the FDA, the Company may book a reserve against
RespiGam inventory. The magnitude of this reserve, if any, would be
determined by factors including, but not limited to, the timing of Synagis
approval, the extent of RespiGam inventory on hand at the time, the assessed
market potential of Synagis and the assessed market potential of RespiGam.
Additionally, if Synagis is licensed for marketing by the FDA, its margin may
differ significantly from those of the Company's existing products; however,
because Synagis has never been produced in
<PAGE 37>
commercial quantities, the impact, if any, on margins is not known.
Research, development and clinical costs of $40.7 million were incurred
in 1997 compared to $32.2 million in 1996, an increase of 26%. Expenditures
in 1997 and 1996 include approximately $14.5 million and $10 million,
respectively, for the clinical studies performed for Synagis, including a
1,502-patient Phase 3 clinical trial that began in the fourth quarter of 1996
and was substantially completed by the end of the 1997 second quarter. 1997
expenses also include $1.3 million in license fees relating to Synagis and
MEDI-507, a monoclonal antibody that inhibits T cell responses. The level of
the Company's total research and development expenses in future periods will
fluctuate depending on the extent of clinical trial spending. The Company
expects clinical trial expenses to be significantly lower in 1998 than 1997.
Selling, administrative and general expenses increased to $31.7 million
in 1997 from $22.2 million in 1996. The increase in 1997 reflects primarily
AHP's share of RespiGam's profits, which resulted in a charge of $3.0 million
to selling expenses as calculated under the terms of the strategic alliance.
This compared to $4.3 million in reimbursement from AHP in 1996 for its share
of RespiGam product line loss, as calculated under the terms of the strategic
alliance. Other selling and marketing expenses increased by $1.7 million,
reflecting increased commission and product distribution costs resulting from
the increased product sales. This was offset by a $1.1 million decrease in
sales detailing costs to AHP as a result of the Company's decision to not use
AHP's sales force to detail RespiGam in the 1997/1998 RSV season. General
and administrative expenses increased by $0.6 million reflecting increased
headcount, legal and other costs. Selling, administrative and general
expenses are expected to increase in 1998 as the Company prepares for the
potential market launch of Synagis, if and when licensed by the FDA.
Expenses in 1997 include $11.5 million of other operating expenses,
which include the costs of start-up of the Frederick manufacturing facility
and scale-up of production of Synagis at the Gaithersburg pilot plant and at
a third-party manufacturer, Boehringer Ingelheim Pharma KG ("BI") in
Biberach, Germany. The Company expects
<PAGE 38>
to incur significant start-up and scale-up costs throughout 1998 and into
1999.
Interest income decreased to $4.0 million in 1997 compared to $5.7
million in 1996. The decrease reflects lower cash balances available for
investment, partially offset by an increase in interest rates that increased
the overall portfolio yield.
Interest expense increased to $3.5 million in 1997 from $2.3 million in
1996, reflecting primarily interest on the convertible subordinated notes of
the Company issued in July 1996 (net of amounts capitalized) and interest on
equipment financing, primarily in the second half of 1997. Interest expense
in 1997 and 1996 is net of $2.2 and $0.3 million, respectively, of interest
capitalized against the manufacturing facility and the pilot plant expansion.
The 1997 net loss of $36.9 million, or $1.59 basic and diluted per
common share, compared to a 1996 net loss of $29.5 million, or $1.41 basic
and diluted per common share. Shares used in computing basic and diluted
loss per share were 23.1 million and 21.0 million, respectively, in 1997 and
1996. The Company does not believe that inflation had a material effect on
its financial statements.
These results were consistent with the Company's objectives for the year
and with the continued development of its immunotherapeutic and vaccine
products. The factors that affected 1997 results may continue to affect near-
term future financial results.
1996 Compared to 1995
The increase in product sales for the year ended December 31, 1996, as
compared to the year ended December 31, 1995, was due to the commencement of
sales of RespiGam in 1996 and a 14% increase in CytoGam sales. RespiGam
sales were $17.3 million in 1996, of which $13.9 million were generated in
the fourth quarter. CytoGam product sales increased to $18.4 million from
$16.2 million in 1995 due primarily to increased units sold. CytoGam product
sales were reduced by a $0.7 million reserve in the 1996 third quarter for
trade receivables due from a pharmaceutical wholesaler that filed Chapter 11
bankruptcy in August 1996.
Other revenue decreased to $5.3 million in 1996 from $11.3 million in
1995, reflecting the completion of milestone and research funding
<PAGE 39>
payments under the Company's strategic alliance with AHP.
Cost of sales increased to $19.7 million in 1996 from $10.7 million in
1995, due to the initiation of sales of RespiGam in 1996. The gross margins
for 1996 of 45% improved over 1995's margins of 34%, reflecting the addition
of RespiGam as well as a reduction in the royalty rate due to Connaught for
CytoGam, effective for the fourth quarter of 1995.
Research, development and clinical spending was $32.2 million in 1996
compared to $26.4 million in 1995, reflecting increased expenditures of over
$10 million for Synagis clinical studies, including the start of a 1,502-
patient Phase 3 clinical trial in the fourth quarter of 1996. This increase
was offset by a decrease in clinical spending for RespiGam, for which two
Phase 3 trials were completed in mid-1995 and licensing was received from the
FDA in January 1996.
Selling, administrative and general expenses increased to $22.2 million
in 1996 from $11.7 million in 1995, reflecting primarily the launch of
RespiGam in 1996. Approximately 45 additional sales and marketing personnel
were hired between September 1995 and March 1996 to staff for the launch of
RespiGam, resulting in an increase of over $5 million in salaries,
commissions, recruiting, travel and related costs. An additional $5.2 million
was spent on marketing and selling programs for the launch of RespiGam in
1996. Sales detailing costs to the Company's corporate partner for RespiGam,
AHP, approximated $1.8 million in 1996 and none in 1995. Offsetting the
increased costs in 1996 was a $4.3 million reimbursement from AHP of its
share of product line loss on RespiGam for the year, calculated under the
terms of the strategic alliance. General and administrative expenses
increased by $0.7 million, reflecting increased headcount and legal and other
costs associated with the new manufacturing facility.
In December 1995, the Company and Connaught entered into an amendment to
the agreement signed in 1992 in which the Company reacquired the rights to
market CytoGam. In connection with this amendment, the Company made a lump
sum payment of $2.7 million to Connaught in the first half of 1996 upon
completion of certain modifications to Connaught's filling and packaging
facility. The $2.7 million charge was expensed as other operating expenses
in 1995.
<PAGE 40>
Interest income increased to $5.7 million in 1996 compared to $1.7
million in 1995. The increase reflects the proceeds from the Company's
equity and convertible debt offerings in 1996, resulting in higher cash
balances available for investment, partially offset by a decrease in interest
rates, which lowered the overall portfolio yield.
Interest expense increased to $2.3 million in 1996 from $0.3 million in
1995, reflecting interest on the convertible subordinated notes of the
Company issued in July 1996. Interest expense in 1996 is net of $0.3 million
of interest capitalized against the new manufacturing facility and the pilot
plant expansion.
The 1996 net loss of $29.5 million, or $1.41 basic and diluted per
common share, compared to a 1995 net loss of $22.7 million, or $1.41 basic
and diluted per common share. Shares used in computing basic and diluted
loss per share were 21.0 million and 16.1 million, respectively, for 1996 and
1995.
LIQUIDITY AND CAPITAL RESOURCES
Cash and marketable securities were $50.3 million at 1997 year end
compared to $114.8 million at 1996 year end. Working capital was $56.6
million at 1997 year end versus $113.3 million at 1996 year end.
Net cash used in 1997 operating activities was $47.745.5 million
compared to $25.85 million used in 1996 and $15.9 million used in 1995. The
cash outflow from operations in 1997 reflected the net loss of $36.9 million
adjusted for depreciation and amortization and working capital changes.
Working capital changes included: 1) a $25.2 million increase in inventory
reflecting build-up of CytoGam and RespiGam to support increased sales; 2) a
$6.5 million increase in trade receivables as a result of the increased
fourth quarter sales, primarily RespiGam; and 3) a $17.4 million increase in
accounts payable and accrued expenses reflecting primarily accruals for
plasma inventories, contract manufacturing activities, amounts due to AHP for
its share of RespiGam product line profit and increased sales
<PAGE 41>
commission accruals. Most of the working capital increase in 1997
resulted from growth in accounts receivable, reflecting a 117% increase in
product sales in the fourth quarter 1997 versus the fourth quarter 1996 and
growth in inventory in anticipation of increased first quarter 1998 sales
compared to first quarter 1997. Inventory growth was also impacted by an
increase in plasma collections in 1997 as more plasmapheresis centers were
added to increase the volume of collections. If Synagis is licensed for
marketing by the FDA, the Company may book a reserve against RespiGam
inventory for obsolescence as Synagis is expected to substantially replace
RespiGam in the market. The amount and timing of such a reserve, if any,
would depend on factors including, but not limited to, the anticipated timing
of Synagis marketing clearance, the extent of RespiGam inventory on hand at
that time, the assessed market potential of Synagis and the assessed market
potential of RespiGam.
AAdditionally, inventory is expected to increase significantly in 1998 as the
Company purchases Synagis inventory from BI and collects materials for use in
its new manufacturing facility to begin producing inventory for the potential
launch of Synagis.
The cash outflow from operations in 1996 reflected the net loss adjusted
for depreciation and amortization and working capital changes. Working
capital changes included: 1) a $7.1 million increase in trade and contract
receivables due to significant fourth quarter 1996 sales of RespiGam; 2) a
$5.6 million increase in accounts payable and accrued expenses, reflecting
accrued costs associated with the Synagis Phase 3 clinical trial, accrued
manufacturing costs for production of the Company's two products, and accrued
marketing and selling costs, including commissions; and 3) a $2.1 million
increase in accrued interest reflecting interest due on the convertible
subordinated notes, paid January 1997.
Cash flows from financing activities were $20.9 million in 1997
<PAGE 42>
compared to $125.4 million in 1996. In 1997, the Company drew down $14.4
million of $15.0 million of available equipment financing. In addition, the
Company received the remaining $2.8 million of financing available from the
state and local government to fund the construction of the manufacturing
plant. In February 1996, the Company completed a public offering of 3.45
million shares of common stock resulting in net proceeds of $58 million and
in July 1996, the Company completed a private placement of $60 million
aggregate principal amount of 7% convertible subordinated notes due 2003 for
net proceeds of $58 million. Additionally in 1996, the Company received $9
million of proceeds from state and local government loans in connection with
the financing of its manufacturing facility.
Capital expenditures in 1997 were $36.738.9 million compared to $22.47
million in 1996 excluding capitalized interest of $2.2 million and $0.3
million, respectively. The 1997 expenditures include $33.237.5 million (net
of capitalized interest) for the construction, equipment and validation of
the Company's manufacturing facility and the completion of its pilot plant
expansion at the Gaithersburg headquarters. Additional expenditures were for
laboratory and office equipment. The 1996 expenditures included $16.95
million (net of capitalized interest) for the design and construction of the
Company's manufacturing facility and the expansion of the pilot plant.
Additional expenditures were for land, laboratory equipment and
administrative expansion.
Capital expenditures in 1998 are expected to approximate $7.0 million,
due mostly to expansion of the administrative area at the Gaithersburg
headquarters and the Frederick manufacturing facility to provide additional
capacity for the Company's cell culture product candidates. Construction of
the manufacturing facility is substantially completed and initial process
qualification will commence during 1998. There can be no assurance that
appropriate regulatory approvals will be obtained to enable the use of the
facility for production of the Company's products or product candidates. Any
resulting sales of product from this facility would not commence for at least
the next 18 months, subject to regulatory approvals. Further production
capacity may be required to support future sales of MedImmune's product
candidates. The Company is evaluating its
<PAGE 43>
alternatives, including, but not limited to, significant expansion of
its existing facilities. At this time, the Company is unable to determine
the potential cost or likelihood of this project.
Subsequent to December 31, 1997, the Company received $15 million from
SmithKline Beecham ("SB") pursuant to an agreement signed with them in
December 1997 to develop and commercialize human papillomavirus vaccines for
prevention of cervical cancer and genital warts. This payment will be
included in 1998 other revenues along with research funding of approximately
$5 million that will be due the Company under the terms of the alliance. In
addition, in January 1998, the Company completed the sale of 83,410 shares of
common stock to SB for net proceeds to the Company of $5.0 million. Also Iin
January 1998, the Company completed a private placement of 1.7 million shares
of common stock to three institutional investors for net proceeds to the
Company of $66.3 million.
The Company is obligated in 1998 to provide $2.5 million in
funding for various clinical trials, research and development and license
agreements with certain institutions. The Company's existing funds, together
with funds contemplated to be generated from product sales and investment
income, are expected to provide sufficient liquidity to meet the anticipated
needs of the business for at least the next 18 months, absent the occurrence
of any unforeseen events.
Year 2000 Compliance
The Company has conducted a review of its internal and external systems for
year 2000 compliance and believes that the cost of completing any necessary
modifications will not be material. There can be no assurances: 1)that the
Company will be able to identify all aspects of its business that are subject
to Year 2000 problems, including issues of its customers or suppliers, 2)that
the Company's software vendors are correct in their assertions that the
software is Year 2000 compliant, 3)that the Company's estimate of the cost of
systems preparation for Year 2000 compliance will prove ultimately to be
accurate.
<PAGE 44>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
<CAPTION>
BALANCE SHEETS
(in thousands, except share data)
December 31, December 31,
1997 1996
---------- ----------
<S> <C> <C>
ASSETS
Cash and cash equivalents $29,984 $12,629
Marketable securities 20,342 102,136
Trade receivables, net 15,236 8,123
Contract receivables, net 3,064 2,164
Inventory, net 28,857 6,060
Other current assets 2,740 1,713
---------- ----------
Total Current Assets 100,223 132,825
Property and equipment, net 65,254 29,087
Other assets 4,859 2,059
---------- ----------
Total Assets $170,336 $163,971
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable, trade $4,535 $3,942
Accrued expenses 27,682 10,509
Accrued interest 2,583 2,057
Product royalties payable 6,227 2,559
Other liabilities 2,633 469
---------- ----------
Total Current Liabilities 43,660 19,536
Long term debt 85,363 70,874
Other liabilities 777 696
---------- ----------
Total Liabilities 129,800 91,106
---------- ----------
Commitments and Contingencies
SHAREHOLDERS' EQUITY
Preferred stock, $.01 par value; -- --
authorized 5,524,525 shares;
none issued or outstanding
Common stock, $.01 par value; 244 218
authorized 60,000,000 shares;
issued and outstanding 24,444,745
<PAGE 45>
shares and 21,836,763 shares at
December 31, 1997 and 1996,
respectively
Paid-in capital 176,564 172,024
Accumulated deficit (136,272) (99,377)
---------- ----------
Total Shareholders' Equity 40,536 72,865
---------- ----------
Total Liabilities and $170,336 $163,971
Shareholders' Equity ========== ==========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE 46>
<TABLE>
<CAPTION>
Statements of Operations
(in thousands, except per share data)
For the year ended December 31,
---------------------------------
1997 1996 1995
-------- -------- --------
<S> <C> <C> <C>
REVENUES
Product sales $65,271 $35,782 $16,173
Other 15,693 5,317 11,263
-------- -------- --------
Total Revenues 80,964 41,099 27,436
-------- -------- --------
COSTS AND EXPENSES
Cost of sales 34,433 19,678 10,678
Research and development 40,669 32,192 26,417
Selling, administrative 31,735 22,165 11,719
and general
Other operating expenses 11,543 -- 2,700
-------- -------- --------
Total Expenses 118,380 74,035 51,514
-------- -------- --------
Operating Loss (37,416) (32,936) (24,078)
Interest income 4,004 5,655 1,657
Interest expense (3,483) (2,263) (250)
-------- -------- --------
Net Loss $(36,895) $(29,544) $(22,671)
======== ======== ========
Net Loss Per Share, Basic and
Diluted $(1.59) $(1.41) $(1.41)
======== ======== ========
Shares Used in Calculation of Basic
and Diluted Net Loss Per Share 23,132 21,019 16,061
======== ======== ========
The accompanying notes are an integral part of these financial
statements.
</TABLE>
<PAGE 47>
<TABLE>
<CAPTION>
Statements of Cash Flows
(in thousands) For the year ended December 31,
--------------------------------
1997 1996 1995
-------- -------- ---------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(36,895) $(29,544) $(22,671)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 2,749 1,843 1,554
Capitalized interest (2,188) (273) --
Amortization of premium (discount) on
marketable securities 937 447 (418)
Bad debt expense (641) 724 5
Inventory reserve (8) (409) 417
Amortization of debt issue costs 330 155 --
Other 325 96 119
Increase(decrease) in cash due to
changes in assets and liabilities:
Trade receivables (6,472) (6,160) (987)
Contract receivables (1,144) (954) 2,865
Inventory (25,235) 376 (945)
Other assets (990) (641) 1,111
Accounts payable and accrued expenses 17,351 5,595 2,154
Product royalties payable 3,668 783 818
Accrued interest 526 2,057 --
Other liabilities (4) 119 35
-------- -------- --------
Net cash used in operating (47,691) (25,786) (15,943)
activities
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Investments in securities available -- (131,908) (38,587)
for sale
Maturities of securities available 80,857 53,199 31,308
for sale
Capital expenditures (36,728) (22,402) (1,116)
-------- -------- --------
Net cash provided by (used in) 44,129 (101,111) (8,395)
investing activities
-------- -------- --------
<PAGE 48>
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of common 4,566 58,630 32,256
stock
Proceeds from issuance of long 17,187 69,000 --
term debt
Deferred costs from debt (306) (2,172) --
issuance
Decrease in long term debt obligations (530) (97) (103)
--------- -------- --------
Net cash provided by 20,917 125,361 32,153
financing activities
--------- -------- --------
Net increase (decrease) in cash and cash 17,355 (1,536) 7,815
equivalents
Cash and cash equivalents at beginning 12,629 14,165 6,350
of year
-------- -------- --------
Cash and cash equivalents at end of
year $29,984 $12,629 $14,165
========= ======== ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE 49>
<TABLE>
<CAPTION>
Statements of Shareholders' Equity
(in thousands, except share data)
Common Stock,
$.01 par
--------------- Paid-in Accumulated
Shares Amount Capital Deficit Total
--------- ------ ------- --------- -------
<S> <C> <C> <C> <C> <C>
Balance,
December 31, 1994 14,618,042 $146 $81,210 $(47,162) $34,194
Common stock options
exercised 43,817 -- 92 -- 92
Private placement of
common stock, May
1995,at $6.85 per
share, net of under-
writing commissions
and expenses of $825 1,250,000 13 7,728 -- 7,741
Private placement of
common stock, June
1995,at $11.49 per
share, net of fees and
expenses of $40 826,536 8 9,452 -- 9,460
Private placement of
common stock, October
1995, at $15.50 per
share, net of fees and
expenses of $37 967,742 10 14,953 -- 14,963
Net loss -- -- -- (22,671) (22,671)
-------- ------ -------- -------- -------
Balance,
December 31, 1995 17,706,137 177 113,435 (69,833) 43,779
Common stock options
exercised 288,484 3 700 -- 703
Sale of common stock,
February 1996, public
offering at $18.00 per
share, net of under-
writing commissions
and expenses of $4,173 3,450,000 34 57,893 -- 57,927
Conversion of Series A
<PAGE 50>
Convertible Preferred
Stock 392,142 4 (4) -- --
Net loss -- -- -- (29,544) (29,544)
-------- ----- -------- -------- --------
Balance,
December 31, 1996 21,836,763 218 172,024 (99,377) 72,865
Common stock options
exercised 614,629 6 4,560 -- 4,566
Conversion of Series A
Convertible Preferred
Stock 1,993,353 20 (20) -- --
Net Loss -- -- -- (36,895) (36,895)
---------- ----- -------- --------- --------
Balance,
December 31, 1997 24,444,745 $244 $176,564 $(136,272) $40,536
========== ===== ======== ========== ========
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE 51>
NOTES TO FINANCIAL STATEMENTS
(in thousands, except share and per share data)
1. ORGANIZATION
MedImmune, Inc. (the Company), a Delaware corporation, is a
biotechnology company focused on the development and marketing of products
for the prevention and treatment of infectious diseases and for use in
transplantation medicine. The Company was originally incorporated on June
29, 1987, and commenced operations on April 22, 1988.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Significant accounting policies applied in the preparation of these
financial statements are as follows:
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with an
original maturity of three months or less to be cash equivalents.
Marketable Securities
Marketable securities include investments with original maturities of
greater than three months having a remaining maturity of less than 24 months.
The Company's securities are held for an unspecified period of time and may
be sold to meet liquidity needs. The securities included as marketable
securities are considered available-for-sale as defined by Statement of
Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain
Investments in Debt and Equity Securities." Amortized cost of marketable
securities approximates market; therefore, no adjustment has been made to
shareholders' equity as a result of changes in market value to these
securities. Interest income is accrued as earned.
Concentration of Credit Risk
The Company has invested its excess cash generally in securities
<PAGE 52>
of the U.S. Treasury, U.S. government agencies, corporate debt securities,
commercial paper and money market funds with strong credit ratings and
deposits with a major bank. The Company has not experienced any significant
losses on its investments. The Company sells its products primarily to a
limited number of pharmaceutical wholesalers without requiring collateral.
The Company periodically assesses the financial strength of these wholesalers
and establishes allowances for anticipated losses when necessary.
Inventory
Inventory is stated at the lower of cost or market. Cost is determined
using a weighted-average approach that approximates the first-in, first-out
method. Where the Company has a firm contract for their puchase, by-products
that result from production of the Company's principal products are accounted
for as a reduction of the cost of the principal products.
Product Sales
Product sales are recognized upon shipment of the product to
wholesalers. Product sales are recorded net of reserves for estimated
chargebacks, returns, discounts, and Medicaid rebates. The Company maintains
reserves at a level that management believes is sufficient to cover estimated
future requirements. Allowances for discounts, returns, bad debts,
chargebacks and Medicaid rebates, which are netted against accounts
receivable, totaled $3,037 and $2,053 at December 31, 1997 and 1996,
respectively. Product royalty expense is recognized concurrently with the
recognition of product revenue. Royalty expense, included in cost of sales,
was $8,504, $4,282 and $3,056 for the years ended December 31, 1997, 1996 and
1995, respectively.
Contract Revenues
Contract revenues are recognized over the fixed term of the contract or,
where appropriate, as the related expenses are incurred. Non-refundable fees
or milestone payments in connection with research
<PAGE 53>
and development or commercialization agreements are recognized when they are
earned in accordance with the applicable performance requirements and
contractual terms. Payments received that are related to future performance
are deferred and recorded as revenues as they are earned over specified
future performance periods.
Property and Equipment
Property and equipment are stated at cost. Interest cost incurred
during the period of construction of plant and equipment is capitalized.
Depreciation of laboratory and computer equipment is computed on the straight-
line method based upon estimated useful lives ranging from 3 to 7 years.
Amortization of leasehold improvements is computed on the straight-line
method based on the shorter of the estimated useful life of the improvement
or the term of the lease. Upon the disposition of assets, the costs and
related accumulated depreciation are removed from the accounts and any
resulting gain or loss is included in the statements of operations. Repairs
and maintenance costs are expensed as incurred and were $1,002, $537 and $540
for the years ended December 31, 1997, 1996 and 1995, respectively.
Long-Lived Assets
The Company evaluates the recoverability of the carrying value of
property and equipment and intangible assets in accordance with the
provisions of SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets to be Disposed Of." The Company considers historical performance and
anticipated future results in its evaluation of the potential impairment.
Accordingly, when the indicators of impairment are present, the Company
evaluates the carrying value of these assets in relation to the operating
performance of the business and future and undiscounted cash flows expected
to result from the use of these assets. Impairment losses are recognized
when the sum of the expected future cash flows are less than the assets'
carrying value.
<PAGE 54>
Forward Exchange Contracts
The Company is obligated to make certain payments to a foreign supplier
in its local currency. To hedge the effect of fluctuating foreign currencies
in its financial statements, the Company may enter into foreign forward
exchange contracts. Gains or losses associated with the forward contracts
are computed as the difference between the foreign currency contract amount
at the spot rate on the balance sheet date and the forward rate on the
contract date. Unrealized gains or losses are deferred until the obligation
date and are then offset against the gains or losses on the foreign currency
transaction. See Note 12 for information regarding the fair value of the
Company's foreign forward exchange contracts.
Fair Value of Financial Instruments
The carrying amount of financial instruments including cash and cash
equivalents, trade accounts and contracts receivable, other current assets,
accounts payable, and accrued expenses approximate fair value as of December
31, 1997 and 1996 due to the short maturities of these instruments. See Note
7 for information regarding the fair value of the Company's long-term debt
and notes payable and Note 12 for information regarding the fair value of the
Company's foreign forward exchange contracts.
Income Taxes
Deferred income taxes are recognized for the tax consequences in future
years of differences between the tax bases of assets and liabilities and
their financial reporting amounts at each year end based on enacted tax laws
and statutory tax rates applicable to the periods in which the differences
are expected to affect taxable income. Valuation allowances are established
when necessary to reduce deferred tax assets to the amount expected to be
realized. Income tax expense is the tax payable for the period and the
change during the period in deferred tax assets and liabilities.
<PAGE 55>
Earnings (Loss) Per Common Share
In 1997, the Company adopted SFAS No. 128, Earnings per Share. Basic
earnings per share is computed by dividing the net loss available to common
shareholders by the weighted average number of common shares outstanding
during the period. Diluted earnings per share is computed by dividing net
earnings available to common shareholders by the weighted average number of
common shares outstanding after giving effect to all dilutive potential
common shares that were outstanding during the period. Potential common
shares are not included in the computation of diluted earnings per share if
they are antidilutive. Net loss per share as reported was not adjusted for
potential common shares as they are antidilutive. Net loss available to
common shareholders as reported was not adjusted. Earnings per share for all
other periods presented conform to SFAS No. 128.
New Accounting Standards
The Financial Accounting Standards Board has issued two new standards
which become effective for reporting periods beginning after December 15,
1997. SFAS No. 130, Reporting Comprehensive Income, requires additional
reporting with respect to certain changes in assets and liabilities that
previously were included in shareholders' equity. The Company will begin
complying with the reporting required by SFAS No. 130 in the first quarter of
1998. SFAS No. 131, Disclosures about Segments of an Enterprise and Related
Information, requires financial and descriptive information with respect to
"operating segments" of an entity based on the way management disaggregates
the entity for making internal operating decisions. The Company will begin
making the disclosures required by SFAS No. 131 with financial statements for
the period ending December 31, 1998.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
<PAGE 56>
estimates and assumptions that affect the reported amounts of assets and
liabilities, and disclosure of contingent assets and liabilities at the
financial statement date and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
3. INVENTORY
Inventory at December 31, is comprised of the following:
1997 1996
------ ------
Raw materials $14,503 $2,073
Work in process 12,990 2,758
Finished goods 3,810 1,229
------ ------
31,303 6,060
Less non-current (2,446) --
------ ------
$28,857 $6,060
========= =====
At December 31, 1997, raw materials for one of the Company's existing
products being collected for production at the Company's manufacturing plant
which has not been licensed by the FDA, are classified as non-current as they
are not expected to be consumed within the next year. In addition, finished
goods at December 31, 1997 include by-products that result from the
production of the Company's principal products at one of its contract
manufacturers and are held for resale. As of December 31, 1997To date, no
sales of these by-products have occurred.
<PAGE 57>
The Company submitted a Biologic License Application to the FDA in
December 1997 requesting marketing clearance for its second generation RSV
product, Synagis. The Company believes that if Synagis were licensed for
marketing, it would largely replace sales of RespiGam. Consequently, if and
when Synagis is cleared for marketing, the Company may be compelled to record
a reserve against RespiGam inventory. The magnitude of this inventory
reserve, if any, would be determined by a number of factors, including but
not limited to, the anticipated timing of Synagis marketing clearance, the
extent of RespiGam inventory on hand at the time, the assessed market
potential of Synagis and the assessed market potential of RespiGam.
4. PROPERTY AND EQUIPMENT
Property and equipment, stated at cost at December 31, is comprised of
the following:
<TABLE>
<S> <C> <C>
1997 1996
----- -----
Land $ 1,521 $ 1,521
Leasehold improvements 11,042 6,860
Laboratory equipment 9,355 7,427
Office furniture, computers and equipment 4,377 3,235
Construction in progress 49,040 17,376
------- -------
75,335 36,419
Less accumulated depreciation and
amortization (10,081) (7,332)
------- -------
$65,254 $29,087
<PAGE 58>
======= =======
</TABLE>
Construction in progress consists primarily of costs incurred in connection
with the design and construction of the Company's manufacturing facility and
includes capitalized interest costs of $2,423 and $273300 at December 31,
1997 and 1996, respectively.
5. ACCRUED EXPENSES
Accrued expenses at December 31, is comprised of the following:
1997 1996
------- -------
Accrued contracts $14,959 $5,737
Accrued manufacturing 8,792 1,804
Accrued sales and marketing 2,299 2,085
Accrued other 1,632 883
------- -------
$27,682 $10,509
======= =======
65. FACILITIES LEASES
The Company entered into a 15-year lease beginning in November 1991, as
amended in 1993, 1996 and 1997, for administrative and laboratory facilities
in Gaithersburg, Maryland. Under the lease, the Company is obligated to pay
a basic monthly rent which will increase 3% each lease year and in 1997
totaled $1,010. The lease also requires the Company to pay for utilities and
its proportionate share of taxes, assessments, insurance and maintenance
costs. Rent expense for the years ended December 31, 1997, 1996 and 1995 was
$1,328, $1,113 and $946, respectively. The 1995 expense is net of sublease
rental receipts of approximately $140 from an affiliated company. The
sublease agreement was terminated in October 1995.
The Company's future minimum lease payments under the facility
<PAGE 59>
operating lease are as follows:
Year ending December 31,
------------------------
1998 $ 1,158
1999 1,192
2000 1,228
2001 1,265
2002 1,304
thereafter 5,504
--------
$ 11,651
========
76. LONG TERM DEBT
Long term debt at December 31, is comprised of the following:
<TABLE>
<S> <C> <C>
1997 1996
----- -----
7% convertible subordinated notes, due
2003 $60,000 $60,000
Notes payable to Transamerica Business
Credit Corporation due through 2004,
interest 10.13%-10.6% 13,975 --
7.53% note due to Maryland Industrial
Development Finance Authority, due 2007 5,000 5,000
4% notes due to Maryland Department of
Business and Economic Development, due
2016 6,800 4,000
<PAGE 60>
Notes payable to landlord, due through
2006, interest 11.5%-13% 1,874 1,992
------- -------
87,649 70,992
Less current portion included in other
current liabilities (2,286) (118)
------- -------
$85,363 $70,874
======= =======
</TABLE>
The convertible subordinated notes were issued in July 1996 and are
convertible at the option of the holder into 3,048,780 shares of the
Company's common stock at a conversion price of $19.68 per share, subject to
adjustments in certain events. The notes are not redeemable by the Company
prior to July 7, 1999. After that date, the notes are redeemable with 30
days notice at a declining premium until the due date, plus accrued interest.
The notes are subordinated to all senior debts of the Company including the
state and local loans, the Transamerica loans, and the loan from the
landlord. The Company may be required to redeem the notes at amounts up to
107% of the principal amount in the event of a change in control of the
Company.
Principal and interest payments on the state and local notes begin in
1998. Pursuant to the terms of the agreements, the Company is required to
meet certain financial and non-financial covenants including maintaining
minimum cash balances and net worth ratios. The Company maintains a $400
compensating balance related to the notes which is included in the
accompanying balance sheets as of December 31, 1997 and 1996. The notes are
collateralized by the land, buildings and building fixtures of the
manufacturing facility. The agreements include a provision for early
retirement of the notes by the Company.
Loans from Transamerica Business Credit Corporation issued in 1997 are
repayable over 6 years at rates ranging from 10.13% to 10.6%. The
<PAGE 61>
loans are collateralized by manufacturing, laboratory, and office equipment
of the Company. The Company may borrow up to an additional $0.6 million
under this facility. The agreements include a provision for early retirement
of the loans by the Company.
Maturities of long term debt for the next five years are as follows:
1998, $2,286; 1999, $2,625; 2000, $2,878; 2001, $3,164; and 2002, $3,476.
Interest paid was $4,817, $304 and $250, for the years ended December 31,
1997, 1996 and 1995, respectively.
The fair value of the Company's long term debt at December 31, 1997,
based on quoted market prices or discounted cash flows based on currently
available borrowing rates, was $153,253 compared to its carrying value of
$87,649.
87. SHAREHOLDERS' EQUITY
In August 1996, the shareholders of the Company approved an increase in
the authorized number of shares of common stock from 30 million shares to 60
million shares.
In connection with the closing of the Company's initial public offering
in 1991, the holders of the Series A Convertible Preferred Stock warrants
agreed that if such warrants were exercised, the holders thereof would
simultaneously exercise their right to convert the Series A Convertible
Preferred Stock received upon exercise of the warrants into 2,524,525 shares
of common stock. Pursuant to an amendment to the warrant agreement in which
the holders could elect a cashless exercise of the warrants for a reduced
number of common shares based on a calculation of the fair market value of
the common stock on the exercise date, 2,108,652 and 415,873 of the Series A
Convertible Preferred Stock warrants were exercised and converted through a
cashless exercise into 1,993,353 and 392,142 shares of common stock in 1997
and 1996, respectively. As of December 31, 1997, all warrants were exercised
and converted.
<PAGE 62>
In July 1997, the Company's Board of Directors adopted a Stockholder
Rights Plan. Pursuant to the terms of the Plan, common stock purchase Rights
were distributed as a dividend at the rate of one Right for each share of
common stock of the Company held by stockholders of record as of the close of
business on July 21, 1997. The Rights will be exercisable only if a person
or group acquires beneficial ownership of 20 percent or more of the Company's
common stock or commences a tender or exchange offer upon consummation of
which such a person or group would beneficially own 20 percent or more of the
Company's stock. The Rights will expire on July 9, 2007.
In January 1998, the Company closed the private placement of 1.7
million1,700,000 new shares of common stock to institutional investors for
net proceeds of $66.3 million., and sold 83,410 shares of common stock to
SmithKline Beecham for net proceeds of $5.0 million.
98. COMMON STOCK OPTIONS
In April 1991, the Board of Directors adopted the 1991 Plan,
amended in March 1992, March 1995 and February 1997, under which 5,500,000
shares of common stock were reserved for issuance upon exercise of options
granted to employees, consultants and advisors of the Company. In May 1993,
a Non-Employee Directors Stock Option Plan was approved by the shareholders
under which 250,000 shares of common stock were reserved for issuance upon
exercise of options granted to non-employee directors. The 1991 Plan
provides for the grant of incentive and nonqualified stock options and the
Non-Employee Directors Plan provides for the grant of nonqualified stock
options. The maximum term of each option granted is 10 years. The option
prices under the 1991 Plan and the Non-Employee Directors Plan are equal to
the closing market price on the day prior to the date of grant.
Prior to the establishment of these plans, the Board of Directors
<PAGE 63>
granted options and periodically set option prices. The Board of
Directors established option prices, prior to the Company's initial public
offering on May 8, 1991, based upon an evaluation of the fair market value of
the Company's stock. Options normally vest on the anniversary date of the
grant over a three to five year period. The Company has reserved a total of
5,623,101 shares of common stock for issuance under these plans as of
December 31, 1997. Related stock option activity is as follows:
<TABLE>
<CAPTION>
Options Granted
Prior to
Establishment of Non-Employee
the 1991 Plan 1991 Plan Directors Plan
------------------ ------------------ -----------------
<S> <C> <C> <C> <C> <C> <C>
Wtd. Wtd. Wtd.
Avg. Avg. Avg.
Exercise Exercise Exercise
Price Price Price
Shares Per Per Per
Share Shares Share Shares Share
Balance,
Dec 31, 1994 822,165 1,453,982 40,000
Granted - $ - 1,175,600 $8.13 30,000 $12.58
Exercised (31,800) 6.90 (11,017) 7.60 - -
Cancelled (200) .80 (325,819) 11.46 - -
-------- --------- -------
Balance,
Dec 31, 1995 790,165 3.10 2,292,746 11.26 70,000 10.75
Granted - - 814,400 17.02 15,000 17.00
Exercised (232,804) .64 (55,680) 9.96 - -
Cancelled (2,000) 51.00 (109,407) 13.07 - -
-------- --------- -------
Balance,
Dec 31,1996 555,361 3.96 2,942,059 12.81 85,000 11.85
Granted - - 796,650 17.86 20,000 18.63
Exercised (167,359) 2.92 (434,770) 8.96 (12,500) 14.53
Cancelled - - (110,103) 16.76 - -
-------- -------- -------
<PAGE 64>
Balance,
Dec 31, 1997 388,002 $4.40 3,193,836 $14.41 92,500 $12.96
======== ========= ======
</TABLE>
Additional information related to the plans as of December 31, 1997
is as follows:
<TABLE>
Options Outstanding Options Exercisable
---------------------- --------------------
<S> <C> <C> <C> <C> <C>
Wtd Avg
Range of remaining Wtd Avg Wtd Avg
exercise Options contractual Exercise Options Exercise
prices outstanding life (yrs) Price Exercisable Price
$0.01- $7.00 731,286 7.7 $4.49 467,527 $3.29
$7.01-$13.50 1,060,918 6.8 $11.04 698,230 $11.04
$13.51-$20.00 1,616,218 8.3 $15.67 360,140 $15.35
$20.01-$43.75 265,916 7.0 $32.42 127,217 $33.82
----------- ---------
$0.01-$43.75 3,674,338 7.7 $13.32 1,653,114 $11.54
</TABLE>
There were 1,803,763 and 145,000 shares available for future option grants
at December 31, 1997 under the 1991 Plan and the Non-Employee Directors Plan,
respectively.
The Company has adopted the disclosure-only provisions of SFAS No. 123 as
they pertain to financial statement recognition of compensation expense
attributable to option grants. As such, no compensation cost has been
recognized for the Company's option plans. If the Company had elected to
recognize compensation cost for the 1991 Plan and the Non-Employee Directors
Plan consistent with SFAS No. 123, the Company's net loss and basic and
diluted loss per share on a pro forma basis would be:
<PAGE 65>
1997 1996 1995
----- ----- -----
Net loss - as reported $36,895 $29,544 $22,671
Net loss - pro forma $45,208 $36,556 $25,192
Basic and diluted loss per share - as $1.59 $1.41 $1.41
reported
Basic and diluted loss per share - pro $1.95 $1.74 $1.57
forma
The pro forma expense related to the stock options is recognized over the
vesting period, generally five years. The fair value of each option grant
was estimated using the Black-Scholes option pricing model with the following
weighted average assumptions for each year:
1997 1996 1995
----- ----- -----
Risk-free interest rate 6.21% 6.09% 6.76%
Expected life of options - years 7 7 7
Expected stock price volatility 75% 75% 75%
Expected dividend yield N/A N/A N/A
The weighted average fair value of options granted during 1997, 1996 and
19965 was $12.94and , $12.63 and $6.02, respectively.
10. COLLABORATIVE ARRANGEMENTS
American Home Products
On November 8, 1993, the Company signed definitive agreements with
American Cyanamid Company to form an alliance in the United States for the
development and marketing of three generations of products to prevent and
treat respiratory syncytial virus (RSV) and for the
<PAGE 66>
marketing of a new anti-infective product, ZOSYN, developed by American
Cyanamid. The parties agreed to co-promote and share profits or losses on
the Company's RSV product, RespiGam, which was licensed for marketing by the
United States Food and Drug Administration on January 18, 1996. In 1994, AHP
acquired American Cyanamid and in October 1995, AHP invested $15 million in
the Company through the purchase of 967,742 shares of common stock. In
connection with this investment, the Company and AHP agreed to amend certain
terms of agreements entered into concurrently with the formation of their
1993 alliance. Pursuant to these amendments, AHP's funding obligations and
co-promotion rights with respect to the second generation RSV monoclonal
product developed by the Company were terminated, the Company returned its
right to co-promote ZOSYN to AHP and AHP received a right to receive a
royalty on any sales of the RSV monoclonal product. In addition, the
Company's right to co-fund and to co-promote an RSV vaccine being developed
by AHP was converted into the right to receive royalties on any sales of the
vaccine. Revenue of $4,791 and $10,744 in 1996 and 1995, respectively,
associated with these agreements is included as other revenue in the
accompanying statements of operations. Additionally, $2,967 of expense and
$4,299 of reimbursement for co-promotion activity have been added to and
netted against selling, general and administrative expense for the years
ended December 31, 1997 and 1996, respectively.
Abbott Laboratories
In December 1997, the Company signed two agreements with Abbott
Laboratories ("Abbott"). The first agreement calls for Abbott to co-promote
Synagis in the U.S., if and when cleared for marketing by the FDA. The second
agreement allows Abbott to exclusively distribute Synagis outside the U.S.,
if and when cleared for marketing by the appropriate regulatory authorities.
Under the terms of the U.S. co-
<PAGE 67>
promotion agreement, Abbott will receive a percentage of net U.S. sales
based on defined annual sales thresholds. Each company is responsible for
its own selling expenses. Under the terms of the distribution agreement, the
Company will manufacture and sell Synagis to Abbott at a price based on end
user sales. The Company received a $15 million milestone payment as part of
this agreement in 1997, which is included in other revenue. The Company
could receive up to an additional $45 million based on the achievement of
certain milestones, including U.S. and European marketing clearance of
Synagis.
BioTransplant Incorporated
In October 1995, the Company and BioTransplant, Incorporated ("BTI")
formed a strategic alliance for the development of products to treat and
prevent organ transplant rejection. The alliance is based upon the
development of products derived from BTI's anti-CD2 antibody BTI-322, the
Company's anti-T cell receptor antibody MEDI-500 and future generations of
products derived from these two molecules, including, but not limited to,
MEDI-507. Pursuant to the alliance, the Company received an exclusive
worldwide license to develop and commercialize BTI-322 and any products based
on BTI-322, with the exception of the use of BTI-322 in kits for
xenotransplantation or allotransplantation. The Company has paid BTI $4.5
million in license fees and research support through December 31, 1997. The
Company has assumed responsibility for clinical testing and commercialization
of any resulting products. BTI may receive additional research support and
milestone payments that could total up to an additional $11.0 million, as
well as royalties on any sales of BTI-322, MEDI-500, MEDI-507 and future
generations of these products, if any.
Connaught Agreement
In December 1995, the Company and Connaught amended the agreement
<PAGE 68>
originally signed in 1992 under which the Company reacquired the rights
to market CytoGam. The amendment provides for a reduction in the royalty
rate to be paid by the Company on sales of CytoGam after September 30, 1995,
and an agreement pursuant to which Connaught will fill and package the
Company's immune globulin products through 1998. In connection with this
amendment, the Company made a lump sum payment of $2.7 million in 1996 to
Connaught upon completion of certain modifications to Connaught's filling and
packaging facility. The $2.7 million charge is included as other operating
expense in the accompanying statements of operations for the year ended
December 31, 1995.
SmithKline Beecham
In December 1997, the Company and SmithKline Beecham ("SB") entered into
a strategic alliance to develop and commercialize human papillomavirus (HPV)
vaccines for prevention of cervical cancer and genital warts. In exchange
for exclusive worldwide rights to the Company's HPV technology, SB has agreed
to provide the Company with an up-front payment, future funding and potential
developmental and sales milestones which together could total over $85
million, as well as royalties on any product sales. Under the terms of the
agreement, the companies will collaborate on research and development
activities. MedImmune will conduct Phase 1 and Phase 2 clinical trials and
manufacture clinical material for those studies. SB is responsible for the
final development of the product, as well as regulatory, manufacturing, and
marketing activities. In January 1998, the Company received a $15 million
payment from SB and completed the sale of 83,410 shares of common stock to SB
resulting in net proceeds to the Company of $5.0 million.
Other Agreements
<PAGE 69>
The Company has entered into research, development and license
agreements with various federal and academic laboratories and other
institutions to further develop its products and technology and to perform
clinical trials. Under these agreements, the Company is obligated to provide
funding of approximately $2.5 million and $0.8 million in 1998 and
1999, respectively. The Company has also agreed to make milestone payments
in the aggregate amount of $11.5 million on the occurrence of certain
events such as the granting by the FDA of a license for product marketing in
the U.S. for some of the product candidates covered by these agreements. In
exchange for the licensing rights for commercial development of proprietary
technology, the Company has agreed to pay royalties on sales using such
licensed technologies.
1110. INCOME TAXES
The tax effects of the temporary differences giving rise to the
Company's deferred tax assets at December 31, are as follows:
1997 1996
------ -----
Net operating loss carryforwards $ 46,820 $ 35,562
Other 8,426 4,377
------- ------
55,246 39,939
Valuation allowance (55,246) (39,939)
------- ------
Net deferred taxes $ -- $ --
======== ========
Realization of net deferred tax assets at the balance sheet date
<PAGE 70>
is dependent on future earnings, which are uncertain. Accordingly, a
full valuation allowance was recorded against the assets. A reversal of the
valuation allowance will be considered when it is more likely than not that
the Company's deferred tax assets (comprised mostly of net operating loss
carryforwards and research credits) will be realized.
As of December 31, 1997, the Company had net operating loss
carryforwards available for federal income tax reporting expiring in years
2003 through 2012, amounting to $158.6 million. In addition, the Company has
$3.2 million of general business credit carryforwards expiring through 2012.
The total regular tax net operating loss available of $158.6 million
includes $37.3 million that, when realized, will not affect financial
statement income but will be recorded directly to shareholders' equity. The
realization of net operating losses may be limited by Internal Revenue Code,
Section 382.
121. FORWARD EXCHANGE CONTRACTS
Beginning in 1997, the Company entered into foreign forward exchange
contracts to hedge against foreign exchange rate fluctuations that may occur
on the Company's foreign currency denominated obligations. During 1997, the
Company entered into forward deutsche mark contracts in the amount of $21,535
, all expiring within one year. Through December 31, 1997, $2,495 of
these contracts have been paid, resulting in a remaining contract balance of
$19,040. Fair value of the remaining balance at December 31, 1997 was
$18,625, resulting in an unrealized loss of $415. Unrealized gains and
losses on foreign forward exchange forward contracts that
are designated and effective as hedges are deferred and recognized in
<PAGE 71>
the same period that the hedged obligation is recognized. The notional
principal amounts for off-balance sheet instruments provide one measure of
the transaction volume outstanding as of year end, and does not represent the
amount of the Company's exposure to credit or market loss. The Company's
exposure to credit loss and market risk will vary over time as a function of
interest rates and currency rates.
132. COMMITMENTS AND CONTINGENCIES
Construction Agreements
The Company entered into an engineering, procurement, construction and
validation services agreement with Fluor Daniel, Inc. ("Fluor") in July 1996
to design and construct the Company's manufacturing facility located on a 27
acre site in Frederick, Maryland. As of December 31, 1997, $42.4 million of
the $42.5 million contract has been paid. In addition, the Company is in
negotiations with Fluor to make payments in 1998 for additional expenditures
needed to complete the facility. The facility will provide capacity for the
production of immune globulin products; cell culture for other product
candidates, including Synagis; filling and packaging; warehousing;
laboratories and administration.
Manufacturing, Supply and Purchase Agreements
In 1989 and 1990, the Company entered into a series of contracts with
the Massachusetts Public Health Biologic Laboratory, then a division of the
Massachusetts Department of Public Health (the "State Lab"), and the
Massachusetts Health Research Institute, Inc. ("MHRI") pursuant to which the
Company agreed to license certain technology from the Commonwealth of
Massachusetts and to collaborate on the development of the technology. The
technology relates to the two products, RespiGam and CytoGam, currently being
marketed by the Company.
At the end of 1996, the Inspector General of the Commonwealth of
<PAGE 72>
Massachusetts publicly issued a report alleging, among other things, that
certain present and former employees of the State Lab or MHRI were personally
receiving from MHRI, in violation of state law, a portion of the royalties
the Company was paying to MHRI on sales of RespiGam. The report also alleged
that the terms of the agreements were unfair to the Commonwealth and,
accordingly, the Commonwealth now has the right to rescind the agreements
notwithstanding the fact that the parties had operated under those agreements
for over seven years. The Inspector General has no enforcement powers.
The Company regards the allegations of the Inspector General, as they
relate to the Company, to be without merit. The Company has denied those
allegations and in early 1997 provided the Commonwealth with a detailed
rebuttal of the claims of the Inspector General pertaining to the Company.
The Company has been engaged with representatives of the Commonwealth in
negotiations to settle the matter on a mutually satisfactory basis. While
the Company believes that substantial progress has been made toward resolving
this matter in a manner generally acceptable to the Company (with no loss of
the Company's rights to technology and no interruption of operations under
the agreements, but with increased royalties), there can be no assurance that
a final resolution will, in fact, be achieved. If no settlement is reached,
the Company may be forced to litigate with the Commonwealth, and there can be
no assurance that the outcome of such a litigation would be favorable to the
Company. An unfavorable outcome could have a material adverse effect on the
Company.
The Company has entered into manufacturing, supply and purchase
agreements in order to provide production capability for CytoGam and
RespiGam, and to provide a supply of human plasma for production of both
products. No assurances can be given that an adequate supply of
<PAGE 73>
plasma will be available from the Company's suppliers. Human plasma for
CytoGam and RespiGam is converted to an intermediate raw material (Fraction
II+III paste) under two supply agreements with two vendors. This
intermediate material is then supplied to the manufacturer of the bulk
product, the State Lab. Pursuant to the agreements with the State Lab, the
Company paid $10.2 million in 1997, $9.7 million in 1996, and $5.2 million in
1995 for production and process development. The Company has an informal
arrangement with the State Lab for planned production through June 1998 for
$7,820, subject to production level adjustments. If the State Lab, which
holds the sole product and establishment licenses from the FDA for the
manufacture of CytoGam and RespiGam, is unable to satisfy the Company's
requirements for both products on a timely basis or is prevented for any
reason from manufacturing CytoGam and RespiGam, the Company may be unable to
secure an alternative manufacturer without undue and materially adverse
operational disruption and increased cost. The Company also has an agreement
with Connaught to fill and package the Company's immune globulin products
through 1998.
In December 1997, the Company entered into an agreement with Boehringer
Ingelheim Pharma KG, to provide supplemental manufacturing of the Company's
second generation RSV product, Synagis, for which a BLA was submitted to the
FDA in December 1997. The Company expensed as other operating expenses
$5,403 in 1997 related to scale-up of production as part of this agreement.
The Company is obligated to pay approximately 34.2 million deutsche
marks, or about $19.4 million in 1998 for scale-up and market entry
quantities of Synagis. There can be no assurances that should the
manufacturer be unable to supply Synagis to the Company for any reason, that
the Company will be able to secure an alternate manufacturer in a timely
basis or without increased cost. Nor can there be any assurances that the
Company or the supplemental
<PAGE 74>
manufacturer will be licensed by the appropriate regulatory authorities
to manufacture or market the product.
14. OTHER OPERATING EXPENSES
Other operating expenses in 1997 include the costs of start-up of the
Frederick manufacturing facility and scale-up of production of Synagis at the
Gaithersburg pilot plant and at a third-party manufacturer, Boehringer
Ingelheim Pharma KG ("BI") in Biberach, Germany. The Company expects to
incur significant start-up and scale-up costs throughout 1998 and into 1999.
Other operating expenses in 1995 include charges to Connaught in
connection with an agreement to fill and package the Company's immune
globulin products.
135. PENSION PLAN
The Company has a defined contribution 401(k) pension plan available to
all full time employees. Employee contributions are voluntary and are
determined on an individual basis subject to the maximum allowable under
federal tax regulations. Participants are always fully vested in their
contributions. The Company began employer contributions as of April 1, 1997.
During 1997, the Company contributed $122 in cash to the plan.
<PAGE 75>
Report of Independent Accountants
To the Board of Directors and Shareholders of MedImmune, Inc.
We have audited the accompanying balance sheets of MedImmune, Inc. (the
Company) as of December 31, 1997 and 1996, and the related statements of
operations, shareholders' equity and cash flows and financial statement
schedule for each of the three years in the period ended December 31, 1997.
These financial statements and the financial statement schedule are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements and financial statement schedule
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, 1997 and 1996, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1997 in
conformity with generally accepted accounting principles. In addition, in
our opinion the financial statement schedule referred to above, when
considered in relation to the basic financial statements taken as a whole,
presents fairly, in all material respects, the information required to be
included therein.
<PAGE 76>
/S/COOPERS & LYBRAND L.L.P.
McLean, Virginia
February 4, 1998
<PAGE 77>
Report of Management
The management of the Company is responsible for the preparation of the
financial statements and related financial information included in this
annual report. The statements were prepared in conformity with generally
accepted accounting principles, and accordingly, include amounts that are
based on informed estimates and judgments.
Management maintains a system of internal controls to provide reasonable
assurance that assets are safeguarded and that transactions are properly
authorized and accurately recorded. The concept of reasonable assurance is
based on the recognition that there are inherent limitations in all systems
of internal accounting control and that the costs of such systems should not
exceed the benefits expected to be derived. The Company continually reviews
and modifies these systems, where appropriate, to maintain such assurance.
The system of internal controls includes careful selection, training and
development of operating and financial personnel, well-defined organizational
responsibilities and communication of Company policies and procedures
throughout the organization.
The selection of the Company's independent accountants, Coopers &
Lybrand L.L.P., has been approved by the Board of Directors and ratified by
the shareholders. The Audit Committee of the Board of Directors, composed
solely of outside directors, meets periodically with the Company's
independent accountants and management to review the financial statements and
related information and to confirm that they are properly discharging their
responsibilities. In addition, the independent accountants and the Company's
legal counsel meet with the Audit Committee, without the presence of
management, to discuss their findings and their observations on other
relevant matters. Recommendations made by Coopers & Lybrand L.L.P. are
considered and appropriate action is taken to respond to these
recommendations.
<PAGE 78>
/s/Wayne T. Hockmeyer, Ph.D. /s/David M. Mott
Chairman and Chief Executive President and Chief Operating
Officer Officer
/s/Lawrence C. Hoff
Chairman of the Audit Committee
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF MEDIMMUNE, INC.
Information with respect to directors is included in the Company's Proxy
Statement to be filed pursuant to Regulation 14A (the "Proxy Statement")
under the caption "Election of Directors," and such information is
incorporated herein by reference. Set forth in Part I, Item 1, are the names
and ages (as of February 6, 1998), the positions and offices held by, and a
brief account of the business experience during the past five years of each
executive officer.
All directors hold office until the next annual meeting of shareholders
and until their successors are elected and qualified. Officers are elected
to serve, subject to the discretion of the Board of Directors, until their
successors are appointed.
ITEM 11. EXECUTIVE COMPENSATION
<PAGE 79>
The section entitled "Executive Compensation" and the information set
forth under the caption "Election of Directors-Director Compensation"
included in the Proxy Statement are incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The common stock information in the section entitled "Principal
Shareholders" of the Proxy Statement is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The section entitled "Certain Transactions" of the Proxy Statement is
incorporated herein by reference.
<PAGE 80>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K
The following documents or the portions thereof indicated are filed as a
part of this report.
a) Documents filed as part of the Report
1. Financial Statements and Supplemental Data
a. Balance Sheets at December 31, 1997 and 1996
b. Statements of Operations for the years ended
December 31, 1997, 1996 and 1995
c. Statements of Cash Flows for the years ended
December 31, 1997, 1996 and 1995
d. Statements of Shareholders' Equity for the years
ended December 31, 1997, 1996 and 1995
e. Notes to Financial Statement
f. Report of Independent Accountants
g. Report of Management
2. Supplemental Financial Statement Schedule
Schedule I - Valuation and Qualifying Accounts Page S-1
b) Reports on Form 8-K
Date Filed Event Reported
10/24/97 MedImmune Reports Product Sales Increase 128
Percent in Third Quarter
11/05/97 Letter to Shareholders for 2nd Quarter
11/26/97 MedImmune and BioTransplant Announce Plans
To Test New Drug For Psoriasis
12/03/97 MedImmune Enters Agreement With Boehringer
Ingelheim to Supplement Manufacturing
Capacity for MEDI-493.
<PAGE 81>
12/03/97 MedImmune and Abbott Laboratories Sign
Global Alliance to Market MEDI-493
12/15/97 MedImmune and SmithKline Beecham Form
Worldwide Human Papillomavirus Vaccine
Alliance
12/22/97 MedImmune Requests Marketing Clearance for
MEDI-493
12/29/97 MedImmune and BioTransplant Announce Plans
to Test MEDI-507 for Treatment of Graft-
Versus-Host Disease; IND Submitted
C) ITEM 601 EXHIBITS
Those exhibits required to be filed by Item 601 of Regulation S-K are listed
in the Exhibit Index immediately preceding the exhibits filed herewith and
such listing is incorporated by reference.
<PAGE 82>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
MEDIMMUNE, INC.
/s/ Wayne T. Hockmeyer
Date: March 27, 1998 By: Wayne T. Hockmeyer
Chairman and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons in the capacities
and on the dates indicated.
/s/ Wayne T. Hockmeyer
Date: March 27, 1998 Wayne T. Hockmeyer
Chairman and
Chief Executive Officer
(Principal executive officer)
/s/ David M. Mott
Date: March 27, 1998 David M. Mott
President and Chief
Operating Officer (Principal
financial and accounting officer)
/s/ M. James Barrett
Date: March 27, 1998 M. James Barrett, Director
/s/ James H. Cavanaugh
Date: March 27, 1998 James H. Cavanaugh, Director
/s/ Lawrence C. Hoff
Date: March 27, 1998 Lawrence C. Hoff, Director
/s/ Gordon S. Macklin
Date: March 27, 1998 Gordon S. Macklin , Director
<PAGE 83>
/s/ Franklin H. Top, Jr.
Date: March 27, 1998 Franklin H. Top, Jr., Director
/s/ Barbara Hackman Franklin
Date: March 27, 1998 Barbara Hackman Franklin,
Director
<PAGE 84>
Schedule I
<TABLE>
MedImmune, Inc.
Valuation and Qualifying Accounts
(in thousands)
<S> <C> <C> <C> <C>
Balance
at Balance
beginning at end
of of
Description period Additions Deductions period
- -------------------------- --------- ---------- ---------- -------
For the year ended
December 31, 1997
Trade and Contract
Receivables Allowance $1,425 $4,036 ($2,167) $3,294
Trade Receivables Bad
Debt Reserve 745 -- (641) 104
Inventory Reserve 8 -- (8) --
------ ------ ------- ------
$2,178 $4,036 ($2,816) $3,398
====== ====== ======= ======
For the year ended
December 31, 1996
Trade and Contract
Receivables Allowance $309 $2,136 ($1,020) $1,425
Trade Receivables Bad
Debt Reserve 21 724 -- 745
Inventory Reserve 417 249 (658) 8
------ ------ ------ ------
$747 $3,109 ($1,678) $2,178
====== ====== ====== ======
For the year ended
December 31, 1995
Trade and Contract
Receivables Allowance $272 $498 ($461) $309
Trade Receivables Bad
Debt Reserve 16 5 -- 21
Inventory Reserve -- 500 (83) 417
------ ------ ------ ------
$288 $1,003 ($544) $747
====== ====== ====== ======
</TABLE>
S-1
c) Item 601 Exhibits
3.1(4) Restated Certificate of Incorporation, dated May 14, 1991
3.2(3) By-Laws, as amended
10.1(1)(3) License Agreement dated November 15, 1990 between the Company
and Merck & Co., Inc. ("Merck")
10.2(3) Plasma Supply Agreement dated May 31, 1990 between the Company
and Plasma Alliance, Inc.
10.3(3) Termination Agreement dated June 29, 1990 between the Company and
Pediatric Pharmaceuticals, Inc. ("PPI") (formerly MedImmune, Inc.)
10.4(3) RSV Research Agreement dated August 1, 1989 between the Company,
PPI and the Massachusetts Health Research Institute, Inc.
("MHRI")
10.5(3) RSV License Agreement dated August 1, 1989 between the Company,
PPI and MHRI
10.6(3) RSV Supply Agreement dated August 1, 1989 between the Company,
PPI, MHRI and the Massachusetts Public Health Biologic
Laboratory ("MPHBL")
10.7(3) CMV License Agreement dated April 23, 1990 between the Company
and MHRI
10.8(3) First Amendment to CMV License Agreement dated May 3, 1991
between the Company and MHRI
10.9(3) CMV Research Agreement dated April 23, 1990 between the
Company, MHRI and MPHBL
10.10(3) License Agreement dated November 8, 1989 between the Company,
PPI, and the Henry M. Jackson Foundation for the Advancement of
Military Medicine ("HMJ")
10.11(3) Research Agreement dated November 8, 1989 between the Company,
PPI and HMJ
10.12(1)(3) Research and License Agreement dated April 1, 1990 between the
Company and New York University
10.13(1)(3) Research and License Agreement dated January 2, 1991 between
the Company and the University of Pittsburgh
10.14(3) Patent License Agreement between the Company and the National
Institutes of Health regarding parvovirus
10.15(3) License Agreement dated September 1, 1988 between the Company
and Albany Medical College of Union College
10.16(3) License Agreement dated July 5, 1989 between the Company,
Albert Einstein College of Medicine of Yeshiva University, The
Whitehead Institute and Stanford University
10.17(3) License Agreement dated July 1, 1989 between the Company and the
National Technical Information Service ("NTIS")
10.18(3) License Agreement dated September 1, 1989 between the
Company and NTIS
10.19(5) Form of Stock Option Agreement, as amended
E-1
10.20(3) Convertible Preferred Stock and Warrant Purchase Agreement between
HCV, Everest Trust and the Company dated January 12, 1990 with
form of Warrant
10.21(3) Restated Stockholders' Agreement dated May 15, 1991
10.22(3) Lease Agreement between Clopper Road Associates and the Company
dated February 14, 1991
10.23(7) 1991 Stock Option Plan
10.24(3) Sublease between the Company and Pharmavene, Inc.
10.25(4) Agreement between New England Deaconess Hospital Corporation and
the Company, dated as of August 1, 1991
10.26(1)(4) Research Collaboration Agreement between Merck and the Company
effective as of November 27, 1991
10.27(1)(4) Co-promotion Agreement between Merck and the Company
effective as of November 27, 1991
10.28(1)(4) License Agreement between Merck and the Company effective as
of November 27, 1991
10.29(1)(5) Letter Agreement between Merck and the Company, dated January
26, 1993
10.30(1)(5) Termination, Purchase and Royalty Agreement between CLI and the
Company, dated December 24, 1992
10.30.1(1)(12) Amendment to Termination, Purchase and Royalty Agreement
between Connaught Technology Corporation and MedImmune, Inc. dated
December 31, 1995
10.31(1)(5) Research and License Agreement between Cell Genesys, Inc.
and the Company, dated April 29, 1992
10.31(a)(5) Unredacted pages 2-5 of Exhibit 10.31
10.32(5) Form of 1993 Non-Employee Director Stock Option Plan
10.33(1)(8) Sponsored Research and License Agreement between Georgetown
University and the Company dated February 25, 1993
10.34(1)(8) License Agreement between Roche Diagnostic Systems, Inc. and the
Company dated March 8, 1993
10.35(1)(8) Pip/Tazo Co-Promotion Agreement between American Cyanamid
Company and the Company dated November 8, 1993
10.35.1(12) Agreement dated October 26, 1995 between American Cyanamid
Company and the Company
10.36(1)(8) RSVIG Co-Development and Co-Promotion Agreement between American
Cyanamid Company and the Company dated November 8, 1993
10.36.1(12) Agreement dated October 26, 1995 between American Cyanamid
Company and the Company
10.37(1)(8) RSV MAB Co-Development and Co-Promotion Agreement between American
Cyanamid Company and the Company dated November 8, 1993
10.37.1(12) Agreement dated October 26, 1995 between American
E-2
Cyanamid Company and the Company
10.38(1)(8) RSV Vaccine Co-Development and Co-Promotion Agreement between
American Cyanamid Company and the Company dated November 8, 1993
10.38.1(12) Agreement dated October 26, 1995 between American Cyanamid
Company and the Company
10.39(1)(10) Fraction II + III Paste Supply Agreement between Baxter
Healthcare Corporation and the Company dated September 1, 1994
10.40(11) Employment Agreement between David P. Wright and the Company
dated January 2, 1995
10.41(11) Employment Agreement between Bogdan Dziurzynski and the Company
dated February 1, 1995
10.42(11) Employment Agreement between Wayne T. Hockmeyer and the Company
dated February 1, 1995
10.43(11) Employment Agreement between David M. Mott and the Company
dated February 1, 1995
10.44(11) Employment Agreement between Franklin H. Top, Jr. and the
Company dated February 1, 1995
10.45(11) Employment Agreement between James F. Young and the Company
dated February 1, 1995
10.46(1)(11) License Agreement between Symbicom AB and the Company dated
May 20, 1994
10.47(1)(11) License Agreement between the University of Kentucky
Research Foundation and the Company effective June 10, 1994
10.48(1)(11) Research and Development Agreement between the University of
Kentucky Research Foundation and the Company effective June 10, 1994
10.49(1)(11) Research and License Agreement between Washington
University and the Company effective July 1, 1994
10.50(1)(11) Research and License Agreement between Washington
University and the Company effective March 1, 1995
10.51(1)(9) License Agreement between Baxter Healthcare Corporation and
MedImmune, Inc. effective June 2, 1995
10.52(1)(9) Stock Purchase Agreement between Baxter Healthcare Corporation
and MedImmune, Inc. dated June 22, 1995
10.53(2)(10) Alliance Agreement between BioTransplant, Inc. and MedImmune,
Inc. dated October 2, 1995
10.54(12) Stock Purchase Agreement dated October 25, 1995 between
MedImmune, Inc. And American Home Products
10.55(2)(12) Collaboration and License Agreement dated as of July 27,
1995 between MedImmune, Inc. And Human Genome Sciences, Inc.
10.56(12) Stipulation of Settlement in reference to MedImmune,
E-3
Inc. Securities Litigation, Civil Action No. PJM93-3980
10.57(2)(13) Plasma Supply Agreement dated effective as of February 8, 1996,
by and between DCI Management Group, Inc. and MedImmune, Inc.
10.58(2)(13) License and Research Support Agreement dated as of April
16, 1996, between The Rockefeller University and MedImmune, Inc.
10.59(14) First Amendment of Lease Between Clopper Road Associates
and MedImmune, Inc. dated June 8, 1993.
10.60(14) Second Amendment of Lease Between Clopper Road Associates
and MedImmune, Inc. dated June 30, 1993.
10.61(14) Third Amendment of Lease between Clopper Road Associates and
MedImmune, Inc. effective as of January 1, 1995.
10.62(14) Fourth Amendment of Lease between Clopper Road Associates
and MedImmune, Inc. dated October 3, 1996.
10.63(14) Fifth Amendment of Lease between Clopper Road Associates and
MedImmune, Inc. dated October 3, 1996.
10.64(1)(14) Engineering, Procurement, Construction and Validation Services
Agreement between MedImmune, Inc. and Fluor Daniel, Inc. effective
as of July 31, 1996.
10.65(2)(14) Research and License Agreement between OraVax Merieux Co.
and MedImmune, Inc. effective as of November 1, 1996.
10.66 (15) Employment Agreement between Wayne T. Hockmeyer and
MedImmune, Inc. effective April 1, 1997.
10.67 (15) Employment Agreement between David M. Mott and MedImmune,
Inc. effective April 1, 1997.
10.68 (15) Employment Agreement between Franklin H. Top and MedImmune,
Inc. effective April 1, 1997.
10.69 (15) Employment Agreement between David P. Wright and MedImmune,
Inc. effective April 1, 1997.
10.70 (15) Employment Agreement between James F. Young and MedImmune,
Inc. effective April 1, 1997.
10.71 (15) Employment Agreement between Bogdan Dziurzynski and
MedImmune, Inc. effective April 1, 1997.
10.72 (16) Master Loan & Security Agreement, dated June 16, 1997 by
and between Transamerica and MedImmune, Inc.
10.73(2)(16)Patent License Agreement, (MEDI-493) dated July 17, 1997 by
and between Protein Design Labs and MedImmune, Inc.
10.74(2)(16)Patent License Agreement, (MEDI-507) dated July 17, 1997 by
and between Protein Design Labs and MedImmune, Inc.
10.75 Sixth Amendment of Lease between ARE-QRS Corp. and
MedImmune, Inc. dated September 10, 1997.
10.76(2) Co-Promotion Agreement between Abbott Laboratories and
E-4
MedImmune, Inc. dated November 26, 1997
10.77(2) Contract Research and Development Agreement between
MedImmune, Inc. and Dr. Karl Thomae GmbH dated November 27, 1997.
10.78(2) Manufacturing Agreement between MedImmune, Inc. and Dr.
Karl Thomae GmbH dated November 27, 1997.
10.79(2) Distribution Agreement between MedImmune, Inc. and Abbott
International, Ltd. dated November 26, 1997.
10.80(2) License Agreement between Loyola University of Chicago and
MedImmune, Inc. dated December 3, 1997.
10.81(2) Research Collaboration and License Agreement between
SmithKline Beecham and MedImmune, Inc. dated December 10, 1997.
23.1 Consent of Independent Accountants
______________
(1) Confidential treatment has been granted by the SEC. The copy
filed as an exhibit omits the information subject to the confidentiality
grant.
(2) Confidential treatment has been requested. The copy filed as
an exhibit omits the information subject to the confidentiality request.
(3) Incorporated by reference to exhibit filed in connection with
the Company's Registration Statement No. 33-39579.
(4) Incorporated by reference to exhibit filed in connection with
the Company's Registration Statement No. 33-43816.
(5) Incorporated by reference to exhibit filed in connection with
the Company's Annual Report on Form 10-K for the year ended December 31,
1992.
(6) Incorporated by reference to exhibit filed in connection with
the Company's Annual Report on Form 10-K for the year ended December 31,
1991.
(7) Incorporated by reference to exhibit filed in connection with
the Company's Registration Statement No. 33-46165.
(8) Incorporated by reference to exhibit filed in connection with
the Company's Annual Report on Form 10-K for the year ended December 31,
1993.
(9) Incorporated by reference to exhibit filed in connection with
the Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
1995.
(10) Incorporated by reference to exhibit filed in connection
September 30, 1995.
(11) Incorporated by reference to exhibit filed with the Company's
Annual Report on Form 10-K for December 31, 1994.
(12) Incorporated by reference to exhibit filed with the
E-5
Company's Annual Report on Form 10-K for December 31, 1995.
(13) Incorporated by reference to exhibit filed with the Company's
Quarterly Report on Form 10-Q for the Quarter ended June 30, 1996.
(14) Incorporated by reference to exhibit filed with the Company's
Annual Report on Form 10-K for December 31, 1996.
(15) Incorporated by reference to exhibit filed with the Company's
Quarterly Report on Form 10-Q for the Quarter ended March 31, 1997.
(16) Incorporated by reference to exhibit filed with the Company's
Quarterly Report on Form 10-Q for the Quarter ended September 30, 1997.
E-6
EXHIBIT 10.75
SIXTH AMENDMENT OF LEASE
THIS SIXTH AMENDMENT OF LEASE (this "Amendment") is made as of
September 10, 1997 (the "Effective Date,,) by and between ARE-QRS CORP., a
Maryland corporation ("Landlord"), and MEDIMMUNE, INC., a Delaware corpo
ration ("Tenant").
EXPLANATORY STATEMENT
A. Clopper Road Associates ("Original Landlord") and Tenant entered
into a Lease Agreement dated February 14, 1991 (the "Original Lease"),
whereby Tenant agreed to lease from Landlord forty thousand eight hundred
forty-three (40,843) square feet (the "Original Leased Premises") in the
building (the "Building") known as Building D located at 35 West Watkins
Mill Road, in the Bennington Corporate Center in Gaithersburg, Maryland.
B. Original Landlord and Tenant entered into a First Amendment of
Lease dated June 8, 1993 (the "First Amendment"), pursuant to which
Building D was expanded and the square footage of the original Leased
Premises was increased by the amount of such expansion (the "Expansion
Space") (collectively, the Original Leased Premises and the Expansion Space
shall be hereinafter referred to as the "Expanded Leased Premises").
Certain other changes were also made to the Original Lease as a result of
the First Amendment.
C. Original Landlord and Tenant entered into a Second Amendment of
Lease dated June 30, 1993 (the "Second Amendment"), pursuant to which the
square footage of the Expanded Leased Premises was increased by adding
space (the "Second Expansion Space") in Building 3 located at 25 West
Watkins Mill Road (collectively, the original Leased Premises, the
Expansion Space and the Second Expansion Space are hereinafter referred to
as the "Second Expanded Leased Premises'); the Rent payable was adjusted,
and certain other changes were made to the original Lease, as amended.
D. Original Landlord and Tenant entered into a Third Amendment of
Lease dated April 15, 1996, but effective as of January 1, 1995 (the "Third
Amendment") to adjust percentages and addresses set forth in the Original
Lease as amended.
E. Original Landlord and Tenant entered into a Fourth Amendment of
Lease dated October 3, 1996 (the "Fourth Amendment") pursuant to which the
portion of the Second Expanded Leased Premises in Building B was expanded
by adding space adjacent thereto (the "VAD Space") (the Second Expanded
Leased Premises, as expanded by the VAD Space is hereinafter referred to as
the 'Third Expanded Leased Premises,,); the Rent was adjusted, and certain
other changes were made to the Original lease, as amended.
F. Original Landlord and Tenant entered into a Fifth Amendment of
Lease dated October 3, 1996 (the "Fifth Amendment") pursuant to which the
portion of the Third Expanded Leased Premises in Building D was expanded by
adding space adjacent thereof (the "Building D Expansion Space") (the Third
Expanded Leased Premises, as expanded by the Building D Expansion Space, is
hereinafter referred to as the "Fourth Expanded Leased Premises"; the Rent
was adjusted, and certain other changes were made to the Original Lease, as
amended.
G. The Original Lease, the First, Second, Third, Fourth and Fifth
Amendments are hereinafter collectively referred to as the "Lease".
H. Landlord purchased the Project from original Landlord.
I. Landlord now desires to lease to Tenant and Tenant desires to
lease from Landlord additional space in Building B located at 25 West
Watkins Mill Road;
J. Landlord and Tenant also desire to adjust the Rent payable under
the Lease and make certain other changes to the Lease, all as more
specifically set forth below.
NOW, THEREFORE, in consideration of the Explanatory Statement, which
shall be deemed a substantive part of this Sixth Amendment, the covenants
of the parties herein and in the Lease, and other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged,
Landlord and Tenant hereby agree as follows:
1. Effective Date of Sixth Amendment. From and after the date of
this Sixth Amendment, the Lease shall be amended as set forth below.
2. Capitalized Terms. ALL capitalized terms in this Sixth Amendment
shall have the same meanings as those in the Lease, unless specifically set
forth otherwise herein.
3. 1997 Additional Space. Landlord hereby leases to Tenant, and
Tenant hereby leases from Landlord, in addition to the Fourth Expanded
Leased Premises, Ten Thousand Seventy Three (10,073) rentable square feet
of space in Building 3 located at 25 West Watkins Mill Road (the 111997
Additional Space") (collectively, the Fourth Expanded Leased Premises and
the 1997 Additional Space shall be deemed the "Leased Premises"). The 1997
Additional Space is shown more particularly on Exhibit A attached hereto
and made a part hereof.
On or before the 1997 Additional Space Commencement Date (as defined
in Section 4(a) below), Landlord's architect and Tenant's architect shall
jointly measure the rentable square footage of the 1997 Additional Space in
accordance with the Building Owners and Managers Association method of
measurement (ANSI 265.11996) and shall jointly certify to Landlord and
Tenant the rentable square footage of the 1997 Additional Space. If
necessary, appropriate rental and other adjustments shall be made by way of
an amendment to the Lease.
Landlord hereby agrees that the Second Expansion Space, the VAD Space
and the 1997 Additional Space need not be separate and distinct premises
and, subject to compliance by Tenant with the provisions of the Lease
governing alterations, may be altered, reconfigured or redesigned to
comprise a single integrated premises.
4. Construction of-1997 Additional Space
(a) Landlord shall deliver the 1997 Additional Space to Tenant on the
day following the date of delivery by Landlord to Tenant of a fully
executed copy of this Amendment (the 111997 Additional Space Commencement
Date"). Tenant hereby acknowledges that it has inspected the 1997
Additional Space and that it is in an unfinished state and Tenant hereby
agrees to accept the 1997 Additional Space in "as is" condition on the date
hereof reasonable wear and tear excepted between the date hereof and the
date of delivery to Tenant.
(b) Tenant shall cause the improvements for the 1997 Additional Space
(the 111997 Additional Space Construction") to be constructed in accordance
with the plans and specifications for the 1997 Additional Space (the 111997
Additional Space Plans"). The 1997 Additional Space Plans shall be
approved and initialed by the parties before construction begins. Landlord
shall not unreasonably withhold or delay its approval of the 1997
Additional Space Plans. Tenant shall provide Landlord one copy of all the
1997 Additional Space Plans at Tenant's expense, before construction
begins.
Tenant shall have received a building permit from the City of
Gaithersburg for the 1997 Additional Space, and shall have provided a copy
to Landlord, before Tenant shall be authorized to begin construction under
this Sixth Amendment.
Before construction begins Tenant shall have furnished to Landlord
insurance certificates evidencing the existence of all insurance policies
required to be carried by Tenant pursuant to the Lease.
(c) (i) Subject to Landlord's approval, which approval shall not be
unreasonably withheld or delayed, Tenant shall select a contractor (the
"Third Party Contractor") to construct the 1997 Additional Space improve
ments. Tenant will not change the Third Party Contractor to another party
without the prior written consent of Landlord, which consent shall not be
unreasonably withheld or delayed. The Third Party Contractor shall provide
all work, labor and materials in support of the 1997 Additional Space
Construction in accordance with the 1997 Additional Space Plans. The Third
Party Contractor shall also perform its work in strict compliance with all
laws, rules, regulations, orders, codes and other requirements of all
governmental and quasi-governmental authorities having jurisdiction with
respect to the 1997 Additional Space and/or the performance of the 1997
Additional Space Construction, and shall comply with all of Landlord's
reasonable rules and regulations provided to the Third Party Contractor.
(ii) In addition, Tenant shall cause the Third Party Contractor
to obtain Builder's Risk insurance naming Landlord and Tenant as additional
insureds and public liability insurance with limits of $1,000,000/
$2,000,000 for the 1997 Additional Space Construction. No later than the
date of commencement of the 1997 Space Construction, Tenant shall cause the
Third Party Contractor to provide to Landlord original insurance certif
icates evidencing all such insurance policies and proof that the Third
Party Contractor maintains a policy of Worker's Compensation Insurance in
accordance with applicable law.
(iii) Landlord, without charge to Tenant, shall have the right to
observe the Third Party Contractor's work on the 1997 Additional Space
Construction.
(d) Landlord shall contribute $75,000.oo (the "Allowance") toward the
costs and expenses incurred in connection with the performance of the 1997
Additional Space Construction. The Allowance shall be paid by Landlord to
Tenant upon the completion of the 1997 Additional Space Construction. The
1997 Additional Space Construction shall be completed at such time as
Tenant,. at its sole cost and expense and without cost to Landlord (except
for the Allowance) shall (1) furnish evidence satisfactory to Landlord that
all of the 1997 Additional Space Construction has been completed and paid
for in full (which may be evidenced by the architect's certificate of
completion and final waiver and release of liens from all contractors,
subcontractors and materialmen (and such work has been accepted by
Landlord); that any and all liens therefor that have been or might be filed
have been discharged of record (by payment, bond, order of a court of
competent jurisdiction or otherwise) or waived, and that no security
interests relating thereto are outstanding; (2) furnish to Landlord all
certifications and approvals with respect to the 1997 Additional Space
Construction that may be required from any governmental authority and any
board of fire underwriters or similar body for the use and occupancy of the
1997 Additional Space; and (3) furnish an affidavit from Tenant's architect
certifying that all work performed in the 1997 Additional Space is in
substantial accordance with the 1997 Additional Space Plans approved by
Landlord.
5. Certain Constructions Provisions Not Applicable to 1997
Additional Space. Article I.B of the Original Lease, Paragraphs 4 through
7 of the First Amendment and Paragraph 5 of the Second Amendment shall not
apply to the 1997 Additional Space, except as may be specifically set forth
in this Sixth Amendment.
6. Term of 1997 Additional Space Lease. The 1997 Additional Space
Lease Term will commence on the 1997 Additional Space Commencement Date,
and will end on November 30, 2006, subject to Paragraph 7 below. From and
after the date of this Sixth Amendment, the term "Lease Term" will include
the 1997 Additional Space Lease Term.
7. Cancellation Option
(a) Paragraph II.B of the Original Lease, as amended by the
First Amendment, and as amended by the Second Amendment (with respect only
to the Expanded Leased Premises (as defined in the Second Amendment)) shall
not apply to the 1997 Additional Space.
(b) Provided that no event of default shall have occurred and be
continuing, Tenant shall have the right to terminate the Lease with respect
to the 1997 Additional Space at any time from and after November 30, 2001
upon at least 180 days prior written notice to Landlord, which notice shall
be accompanied by a termination fee in an amount equal to $38,256.00 plus
an amount equal to three (3) months Basic Annual Rent payable hereunder on
the date of Tenant's notice in respect of the 1997 Additional Space, if the
termination date is November 30, 2001. The termination fee payable by
Tenant to Landlord shall be reduced by $620.88 per month after December 1,
2001. So long as Tenant pays the Basic Annual Rent and Additional Rent
payable under the Lease through the termination date set forth in Tenant's
notice, the Lease as it relates to the 1997 Additional Space shall expire
and come to an end on such termination date as if such date were the end of
the Lease Term.
8. Basic - Annual Rent for the 1997 Additional Space. Basic Annual
Rent for the 1997 Additional Space shall equal One Hundred Thirty-five
Thousand Nine Hundred Eighty Five and 56/100 Dollars ($135,985.56) per
annum, payable in equal monthly installments of Eleven Thousand Three
Hundred Thirty Two and 13/100 Dollars ($11,332.13). Payment of Basic
Annual Rent shall commence on November 10, 1997.
9 . Rent.
(a) The Basic Annual Rent shall be increased each year by an
amount equal to three percent (3%) of the Basic Annual Rent then in effect.
The first such adjustment shall become effective December 1, 1998, and
subsequent adjustments shall become effective on December 1 of every
calendar year thereafter for so long as the Lease continues in effect.
(b) The above amounts of Basic Annual Rent for the 1997
Additional Space shall be paid at the same time and in addition to the
payment of Basic Annual Rent for the balance of the Leased Premises, and
otherwise in the manner set forth in Article III.B of the Lease.
(c) There shall be no Security Deposit required hereunder for the
1997 Additional Space.
10. Adjustments to Square Footages and Percentages.
(a) Paragraph III.C(l)(c) of the Lease shall be amended so that
the term "Rentable Area of the Leased Premises,' shall be deemed to be
81,298 square feet (being Fifty Eight and Fifty One One Hundredths Percent
(58-51%) of the Buildings) so that the term includes the 1997 Additional
Space. This amended square footage number shall apply throughout the Lease
to all references to the square footage of the Leased Premises.
(b) Notwithstanding anything to the contrary continued in the
Lease, including this Amendment, for the purpose of calculating Additional
Rent payments in respect of Common Area Expenses, Taxes and Insurance
Tenant's Portion shall be Fifty One and Twenty Six one Hundredths Percent
(51.26%) and the term Tenant's Portion shall not include the 1997
Additional Space. The term "Tenant's 1997 Additional Space Portion" shall
mean Seven and Twenty Five One Hundredths Percent (7.25%). Tenant shall pay
to landlord, as Additional Rent in respect of the 1997 Additional Space,
Tenant's 1997 Additional Space Portion of Common Area Expenses, Taxes and
Insurance. Payments by Tenant of Additional Rent in respect of the 1997
Additional Space shall be made monthly commencing on the date upon which
Basic Annual Rent in respect of the 1997 Additional Space commences and
shall be payable on the first day of each calendar month thereafter, each
such payment to be in an amount equal to one-twelth (1/12th) of the amount
of such expenses for the applicable calendar year as estimated by Landlord.
Payments of Tenant's 1997 Additional Space Portion in respect of Common
Area Expenses shall not increase in any one year by more than eight percent
(8%).
11. Use Restrictions and Rules. Paragraph IV.A of the Original Lease
shall apply to the 1997 Additional Space.
12. Improvements-by Tenant. Subsection (i) of the second paragraph
of Paragraph IV.B of the Lease shall be stricken in its entirety and
replaced with the following:
"(i) the aggregate cost of the same does not exceed One Hundred
Thousand Dollars ($100,000) with respect to the Expanded Leased Premises,
Fifty Thousand Dollars ($50,000) with respect to the Second Expansion
Space, Fifty Thousand Dollars ($50,000) with respect to the VAD Space,
Fifty Thousand Dollars ($50,000) with respect to the Building D Expansion
Space, or Fifty Thousand Dollars ($50,000) with respect to the 1997
Additional Space ....
13. Insurance. Paragraph IV.E of the original Lease shall apply to
the 1997 Additional Space.
14. Damage and Destruction. The last two paragraphs of Article VI
of the Lease shall be amended to read as follows:
"Notwithstanding the preceding three (3) paragraphs of this
Article VI, if Landlord or Tenant has the right to terminate the Lease
pursuant to this Article VI due to damage or destruction to the Expanded
Leased Premises and Building D Expansion Space only (excluding the Second
Expansion Space, the VAD Space and the 1997 Additional Space) by fire,
other casualty, or any other cause (except condemnation), then Landlord or
Tenant automatically shall have the right pursuant to this Article VI to
terminate the Lease with respect to the Second Expansion Space, the VAD
Space and the 1997 Additional Space regardless of whether the Second
Expansion Space and/or the VAD Space and/or the 1997 Additional Space has
suffered any damage or destruction. However, if Landlord or Tenant has the
right to terminate the Lease pursuant to this Article VI due to damage or
destruction to the Second Expansion Space and/or the VAD Space and/or the
1997 Additional Space only, (excluding the Expanded Leased Premises and
Building D Expansion Space), Landlord or Tenant shall not have any right to
terminate the Lease with respect to the Expanded Leased Premises and
Building D Expansion Space. If Landlord or Tenant duly terminates the
Lease under Article VI with respect to the Second Expansion Space and/or
the VAD Space and/or the 1997 Additional Space, the Lease shall remain in
full force and effect with respect to the Expanded Leased Premises and
Building D Expansion Space, and the Second Expansion Space and/or the VAD
Space and/or the 1997 Additional Space shall be stricken from the
definition of "Leased Premises" under the Lease. Upon such damage or
destruction to the Second Expansion Space and/or the VAD Space and/or the
1997 Additional Space, the parties agree to enter into an amendment to the
Lease setting forth the reduced Leased Premises and other related changes
to the Lease, including, without limitation, reduction of Basic Annual Rent
and Tenant's Portion of Common Area Expenses, Taxes and Insurance.
Notwithstanding anything set forth above in this Article VI, if
Landlord or Tenant has the right to terminate the Lease pursuant to this
Article VI due to damage or destruction to one of the Second Expansion
Space or the VAD Space or the 1997 Additional Space, then Landlord or
Tenant shall not have the right to terminate the Lease under this provision
with respect to the nondamaged Space in Building B, or with respect to the
Expanded Leased Premises.,,
15. Condemnation. The last sentence of the second paragraph of
Article VII of the Lease shall only apply to the Expanded Leased Premises
and Building D Expansion Space and shall not apply to the Second Expansion
Space, or the VAD Space or the 1997 Additional Space. In addition, the
last two paragraphs of Article VII of the Lease shall be amended to read as
follows:
"Notwithstanding the preceding two (2) paragraphs of this Article
VII, if Landlord or Tenant has the right to terminate the Lease pursuant to
this Article VII due to taking or condemnation of the Expanded Leased
Premises and Building D Expansion Space only (excluding the Second
Expansion Space, the VAD Space and the 1997 Additional Space), then
Landlord or Tenant automatically shall have the right pursuant to this
Article VII to terminate the Lease with respect to the Second Expansion
Space, VAD Space, and the 1997 Additional Space, regardless of whether the
Second Expansion Space and/or the VAD Space and/or the 1997 Additional
Space has been condemned in whole or in part. However, if Landlord or
Tenant has any right to terminate the Lease pursuant to this Article VII
due to condemnation or taking of the Second Expansion Space and/or the VAD
Space and/or the 1997 Additional Space only (excluding the Expanded Leased
Premises and Building D Expansion Space), Landlord or Tenant shall not have
the right to terminate the Lease with respect to the Expanded Leased
Premises and Building D Expansion Space. If Landlord or Tenant duly
terminates the Lease under Article VII with respect to the Second Expansion
Space and/or the VAD Space and/or the 1997 Additional Space the Lease shall
remain in full force and effect with respect to the Expanded Leased
Premises and Building D Expansion Space and the Second Expansion Space
and/or VAD Space and/or the 1997 Additional Space shall be stricken from
the definition of "Leased Premises" under the Lease. Upon such
condemnation of the Second Expansion Space and/or the VAD Space and/or the
1997 Additional Space the parties agree to enter into an amendment to the
Lease setting forth the reduced Leased Premises and other related changes
to the Lease, including, without limitation, a reduction of Basic Annual
Rent and Tenant's Portion of Common Area Expenses, Taxes and Insurance.
Notwithstanding anything set forth above in this Article VII, if
Landlord or Tenant has the right to terminate the Lease pursuant to this
Article VII due to taking or condemnation of one of the Second Expansion
Space or the VAD Space or the 1997 Additional Space, then Landlord or
Tenant shall not have the right to terminate the Lease under this provision
with respect to the noncondemned Space in Building B, or with respect to
the Expanded Leased Premises.
16. Parkincr. Parking under the Lease shall not be modified pursuant
to this Sixth Amendment.
17. Renewal Option. Rider No. 1 to the Lease shall apply to the 1997
Additional Space.
18. Tenant Authorization. Tenant represents and warrants to Landlord
that this Sixth Amendment has been validly authorized and is executed by an
authorized officer of Tenant and that its terms are binding upon and
enforceable against Tenant in accordance herewith.
19. Brokers. Landlord and Tenant represent and warrant that there is
no real estate broker or agent representing Tenant in connection with this
Sixth Amendment.
20. Lease as Amended. From and after the full execution of this
Sixth Amendment, the Lease shall be amended and in full force and effect in
such respects as are set forth in this Sixth Amendment, and all other
provisions, terms, conditions and riders of and to the Lease shall in all
respects remain as set forth in the Lease, in full force and effect and
applicable to the 1997 Additional Space, except as specifically set forth
in this Sixth Amendment.
21. Reaffirmation of Lease. Each of Tenant and Landlord hereby
reaffirms and restates, and agrees to be bound by, the covenants, promises,
representations and agreements set forth in the Lease (except to the extent
that they are expressly superseded by this Sixth Amendment) as if made
herein.
LANDLORD:
ARE-QRS CORP.
By:/s/Allan D. Gold
Name: Allan D. Gold
Title: President
MEDIMMUNE, INC.,
a Delaware corporation
By:/s/David M. Mott
Name: David M. Mott
Title: President
EXHIBIT 10.76
CO-PROMOTION AGREEMENT
This CO-PROMOTION AGREEMENT effective as of the 26th day of November,
1997 between ABBOTT LABORATORIES, through its ROSS PRODUCTS DIVISION, a
corporation organized and existing under the laws of the State of Illinois
and having its principal office at 100 Abbott Park Road, Abbott Park,
Illinois 60064 (hereinafter individually and collectively referred to as
"ABBOTT") and MEDIMMUNE, INC., a corporation organized and existing under
the laws of the State of Delaware and having its principal office at 35
West Watkins Mill Road, Gaithersburg, Maryland 20878 ("MEDIMMUNE").
W I T N E S S E T H:
WHEREAS, the parties hereto desire to enter into a Co-Promotion
Agreement with respect to PRODUCT (as hereinafter defined) in the TERRITORY
(as hereinafter defined).
NOW, THEREFORE, the PARTIES agree that the following terms and
conditions shall apply with respect to the Co-Promotion of PRODUCT in the
TERRITORY:
1. GENERAL
(a) "AFFILIATE" shall mean any corporation or other business entity
that directly or indirectly controls, is controlled by, or is under
common control with a PARTY. Control means ownership or other
beneficial interest in fifty percent (50%) or more of the voting stock
or other voting interest of a corporation or other business entity.
(b) "COMMITTEE" shall mean the advisory marketing committee as set
forth in Section 2.3(a).
(c) "FIRST COMMERCIAL SALE" of PRODUCT shall mean the first sale to a
THIRD PARTY of PRODUCT in the TERRITORY after approval of the PRODUCT
has been granted by the U.S. Food & Drug Administration ("FDA").
(d) "GAAP" shall mean, as of any applicable date of determination,
Generally Accepted Accounting Principles consistently applied.
(e) "MARKETING PLAN" shall mean a plan for marketing and detailing of
PRODUCT, including monthly PRODUCT sales forecasts for the TERRITORY
and a marketing budget.
(f) "NET SALES" shall mean with respect to PRODUCT that sum
determined by deducting from the gross amount invoiced for PRODUCT by
MEDIMMUNE in the TERRITORY in an arms length transaction to customers
who are not AFFILIATES of MEDIMMUNE: (i) transportation charges to the
extent included in the billing; (ii) trade, quantity or cash
discounts, to the extent allowed; (iii) credits or allowances, if any,
(PAGE 1)
given or made on account of price adjustments, or returns, to the
extent made; (iv) any and all Federal, state or local government
rebates, whether in existence now, or enacted at any time during the
term of this Agreement, to the extent made; (v) any tax, excise or
other governmental charge upon or measured by the production, sale,
transportation, delivery or use of the PRODUCT to the extent
separately billed; (vi) a reasonable allowance for bad debt; in each
case determined in accordance with MEDIMMUNE's normal internal
accounting practices and GAAP.
(g) "PARTY(IES)" shall mean ABBOTT and/or MEDIMMUNE, as the case may
be.
(h) "PRODUCT" shall mean the humanized antibody directed against
respiratory syncytial virus ("RSV") and known as MEDI-493
(palivizumab).
(i) "TERRITORY" shall mean the United States of America, including
its territories and possessions, Puerto Rico and excluding the State
of Maine and the Commonwealth of Massachusetts; provided that if
MEDIMMUNE reacquires rights to the PRODUCT in Maine and Massachusetts
the TERRITORY shall from that point forward include the State of Maine
and the Commonwealth of Massachusetts.
(j) "THIRD PARTY" shall mean a party other than ABBOTT, MEDIMMUNE or
their AFFILIATES.
(k) "YEAR" shall mean the 12-month period beginning on July 1, 1998
and ending June 30, 1999 and each 12 month-period thereafter.
2. CO-PROMOTION
2.1 (a) MEDIMMUNE hereby appoints ABBOTT as the co-promoter of PRODUCT in
the TERRITORY. ABBOTT accepts such appointment and agrees to
co-promote the PRODUCT with MEDIMMUNE in a manner consistent with this
Agreement and the directions of MEDIMMUNE for the PRODUCT. Neither
PARTY shall authorize any third party to sell or co-promote the
PRODUCT in the TERRITORY other than authorized distributors that
resell the PRODUCT. ABBOTT shall have the exclusive right to
co-promote PRODUCT in the TERRITORY.
(b) At ABBOTT's cost and expense, ABBOTT agrees to maintain at least
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) sales representatives
whose primary call responsibility includes pediatricians (office and
hospital based), neonatologists, pediatric infectious disease
specialists and other pediatric support personnel, to train such sales
force with respect to selling of PRODUCT and to use such sales force
to actively promote PRODUCT each YEAR with special emphasis on such
promotion during the months of September through March of each YEAR,
(PAGE 2)
with such promotion including but not limited to sales presentations
to the target audience, and participation in conventions, and
symposia.
(c) At MEDIMMUNE's cost and expense, MEDIMMUNE agrees to maintain at
least (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) sales
representatives whose primary call responsibility includes hospital
based physicians, neonatologists, pediatric infectious disease
specialists and other pediatric support personnel, to train such sales
force with respect to selling of PRODUCT and to use such sales force
to actively promote PRODUCT each YEAR with special emphasis on such
promotion during the months of September through March of each YEAR,
with such promotion including but not limited to sales presentations
to the target audience, and participation in conventions, and
symposia.
(d) ABBOTT and MEDIMMUNE shall be responsible for causing their
respective sales forces to co-promote PRODUCT in accordance with the
MARKETING PLAN only with promotional materials provided or approved by
MEDIMMUNE and in accordance with all applicable laws, rules and
regulations.
2.2 Sale and Manufacture of the PRODUCT.
(a) During the term of this Agreement, MEDIMMUNE shall be responsible
for:
(i) Manufacturing (or having manufactured), packaging,
labeling, warehousing and distributing PRODUCT in the
TERRITORY.
(ii) Accepting of orders, invoicing customers and
collecting receivables.
(iii)Training materials, territory sales reports and
promotional materials for both PARTIES field sales forces.
(iv) Providing customer service activities, medical
information services and regulatory filings and activities.
(v) Preparation of a MARKETING PLAN for the PRODUCT
for each YEAR which may be amended by MEDIMMUNE during the
YEAR, after prior consultation with the COMMITTEE.
(b) All sales of the PRODUCT in the TERRITORY shall be invoiced by
MEDIMMUNE.
(c) All terms of sale including, without limitation, policies
concerning pricing, credit terms, cash discounts and returns and
(PAGE 3)
allowances shall be set by MEDIMMUNE consistent with MEDIMMUNE's
normal internal selling practices and in accordance with GAAP,
consistently applied.
(d) All customer orders for the PRODUCT shall be received and
executed by MEDIMMUNE or its designee. If ABBOTT receives any orders
it shall refer such to MEDIMMUNE. MEDIMMUNE, or its designee, shall
use reasonable efforts to fill PRODUCT orders.
(e) PRODUCT shall be marketed by the PARTIES hereto under a single
trademark selected, registered and maintained by MEDIMMUNE and owned
by MEDIMMUNE.
(f) ABBOTT shall give MEDIMMUNE notice of any PRODUCT complaint,
including but not limited to any adverse drug experience (as defined
in 21 CFR 314.80 or any successor provision thereto) which ABBOTT
obtains information in accordance with the following procedure:
(i) information concerning any adverse drug experience
associated with the PRODUCT shall be reported to MEDIMMUNE's
designated medical liaison by telefax within twenty-four
(24) hours and by hard copy in writing within three (3) days
after initial receipt of such information;
(ii) ABBOTT's report to MEDIMMUNE shall contain (a) the
date the report was received by ABBOTT; (b) the name of the
reporter; (c) the address and telephone number of the
reporter; and (d) an indication of the adverse drug
experience; and
(iii) all other PRODUCT complaints not covered by (i)
above shall be reported to MEDIMMUNE in writing at least
once each month.
MEDIMMUNE shall investigate all adverse drug experiences and
non-clinical complaints associated with the PRODUCT, including those
reported to MEDIMMUNE by ABBOTT, and as appropriate report such
information to the FDA. In addition, so long as ABBOTT is a
co-promoter of PRODUCT, MEDIMMUNE shall provide ABBOTT with a summary
of all adverse drug experiences and clinical complaints received by
MEDIMMUNE, during each calendar quarter and all material comments of
the FDA with respect thereto within thirty (30) days after the end of
such calendar quarter; provided, however, MEDIMMUNE shall provide
ABBOTT prompt written notice of any adverse side effect experienced in
response to the use of PRODUCT.
(g) MEDIMMUNE warrants that the PRODUCT (i) shall be manufactured in
conformance with all applicable federal, state and local statutes,
ordinances and regulations, (including, without limitation, the
Federal Food Drug and Cosmetic Act (FD&C) and the regulations
(PAGE 4)
thereunder such as current Good Manufacturing Practices), as the same
may be amended from time to time, (ii) at the time of shipment by
MEDIMMUNE shall not be adulterated or misbranded within the meaning of
the FD&C, and (iii) at the time of shipment by MEDIMMUNE shall not be
a product which would violate any section of the FD&C if introduced
into interstate commerce.
(h) MEDIMMUNE agrees that MEDIMMUNE will not without ABBOTT's written
consent discount the selling price of PRODUCT in order to promote the
sales of other products of MEDIMMUNE and that it will conduct all
price negotiations in good faith on an arms length basis.
(i) In addition to MEDIMMUNE's obligations set forth in Section
2.3(h) above, MEDIMMUNE shall, after the first YEAR, advise and
consult with ABBOTT prior to any reduction of the price at which the
PRODUCT shall be marketed, promoted and sold in the TERRITORY to the
extent such proposed reduced price is less than the average selling
price per unit of PRODUCT achieved during the first YEAR; provided,
however, MEDIMMUNE shall make the final decision regarding such price
reduction.
(j) If there is a change in market conditions which affects the
economics of this Agreement, both PARTIES will discuss modifications
to this Agreement to address such changed market conditions. However,
neither party shall be obligated to agree to such modifications to the
terms of this Agreement.
2.3 Advisory Marketing Committee.
(a) So long as ABBOTT continues as a co-promoter of PRODUCT, there
shall be a joint committee to advise MEDIMMUNE with respect to the
marketing and selling of PRODUCT in the TERRITORY (the "COMMITTEE").
The COMMITTEE shall be composed of three members appointed by ABBOTT
and three members appointed by MEDIMMUNE, with one of the members
appointed by MEDIMMUNE being Chairman of the COMMITTEE. The COMMITTEE
shall consider PRODUCT supply issues.
(b) The COMMITTEE shall meet at the call of the Chairman, but not
less than once each calendar quarter, at the offices of MEDIMMUNE or
such other place in the TERRITORY designated by the Chairman to advise
as to the coordination and implementation of a MARKETING PLAN for the
PRODUCT. A quorum for the conduct of business at any meeting of the
COMMITTEE shall consist of at least two representatives of ABBOTT and
at least two MEDIMMUNE representatives. If the COMMITTEE fails to
agree on a matter, the matter shall be referred to the President of
MEDIMMUNE and the President of the Ross Products Division. MEDIMMUNE
will consider ABBOTT's input, but shall have the final authority with
respect to any recommendations of the COMMITTEE.
(PAGE 5)
(c) The COMMITTEE shall assist and advise MEDIMMUNE in the
development of a MARKETING PLAN for each YEAR PRODUCT will be sold in
the TERRITORY.
(d) In the event a decision is made by ABBOTT to sample the PRODUCT,
ABBOTT shall pay for its samples at MEDIMMUNE's fully allocated cost
therefor.
(e) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(f) MEDIMMUNE shall prepare or approve all promotional materials for
PRODUCT. Such promotional material will identify both PARTIES.
MEDIMMUNE shall be responsible for all costs associated with
developing promotional materials.
(g) MEDIMMUNE shall supply ABBOTT with such promotional materials at
MEDIMMUNE's fully allocated direct cost. Each PARTY shall be
responsible for the costs and expenses of its sales force and for all
of its selling expenses, including but not limited to sales training
and sales meetings. The PARTIES agree to cooperate with each other
with respect to such sales training.
2.4 Reporting and Payment.
(a) In each YEAR, in which ABBOTT is co-promoting PRODUCT, in lieu of
any other compensation, ABBOTT shall receive the following payment on
NET SALES of PRODUCT sold for use in the TERRITORY by MEDIMMUNE or its
AFFILIATES as follows:
(x) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(y) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(z) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(b) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(c) All sums due under this Agreement shall be payable in U.S.
Dollars by federal funds wire transfer or by check as instructed in
writing by the party to receive such payment from time to time. All
amounts due under Section 2.4 shall be paid on a calendar quarter
basis, within forty-five (45) days after the end of the quarter. With
each quarterly payment, MEDIMMUNE shall deliver to ABBOTT a full and
accurate accounting to include at least the following information:
(i) Quantity of PRODUCT sold by MEDIMMUNE,
(ii) Total amount invoiced for PRODUCT,
(PAGE 6)
(iii)Calculation of NET SALES,
(iv) Total compensation payable to ABBOTT.
(e) Each PARTY shall keep complete and accurate records as are
required to verify compliance with this Agreement. Such records shall
be retained and made available for reasonable review by an independent
public accounting firm acceptable to both PARTIES upon reasonable
notice, during normal business hours and no more than once each YEAR,
and at the reviewing PARTY's expense, for the purposes of verifying
the accuracy of the accounting. Each document from which the reports
and statements are prepared pursuant to this Agreement shall be
retained for two (2) years, and the right of inspection and the right
of audit hereunder shall terminate with respect thereto at the end of
such two (2) year period. In the event that such inspection shall
indicate that in any calendar year that the payments which should have
been paid by MEDIMMUNE are at least five percent (5%) greater than
those which were actually paid by MEDIMMUNE, then MEDIMMUNE shall pay
the cost of such inspection. All underpayments are immediately due
and payable.
2.6 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
2.7 Each PARTY shall promptly notify the other PARTY in writing of any
facts relating to the advisability of the recall, destruction or
withholding from the market of the PRODUCT anywhere in the world
(collectively, "Recall"). If at any time (a) any governmental or
regulatory authority in the TERRITORY issues a request, directive or
order for a Recall; (b) a court of competent jurisdiction orders a
Recall in the TERRITORY; or (c) MEDIMMUNE determines, following
consultation with ABBOTT (except in emergency situations in which
there is insufficient time for such consultation), that a Recall in
the TERRITORY is necessary or advisable, MEDIMMUNE shall take all
appropriate corrective actions, at MEDIMMUNE's expense, to effect the
Recall and ABBOTT shall provide MEDIMMUNE with such cooperation in
connection with the Recall as MEDIMMUNE may reasonably request.
3. INDEMNITY
3.1 (a) MEDIMMUNE shall defend, indemnify and hold harmless ABBOTT,
AFFILIATES of ABBOTT and their respective directors, officers, agents
and employees, from and against any and all liability, loss, damages
and expenses (including attorneys' fees) as the result of THIRD PARTY
claims, demands, costs or judgments which may be made or instituted
against any of them arising out of (i) any negligent act or omission
or willful misconduct of MEDIMMUNE, AFFILIATES of MEDIMMUNE or any of
their respective officers, directors, agents or employees with
respect to PRODUCT, (ii) any violation of approved labeling or any
applicable statute or regulation with respect to PRODUCT, or breach of
(PAGE 7)
this Agreement or any representation or warranty hereunder, by
MEDIMMUNE, AFFILIATES of MEDIMMUNE or any of their respective
officers, directors, agents or employees, (iii) the manufacture,
possession, packaging, distribution (except for the distribution of
PRODUCT samples by ABBOTT representatives), use, testing, sale or
other disposition of the PRODUCT, or (iv) any claim against ABBOTT for
patent or trademark infringement in connection with the manufacture,
use or sale of the PRODUCT. MEDIMMUNE shall not be obligated to
indemnify an indemnified party to the extent that any claims against
an indemnified party result from (i) any negligent act or omission or
willful misconduct of ABBOTT, AFFILIATES of ABBOTT or any of their
respective officers, directors, agents, or employees with respect to
the PRODUCT, or (ii) any violation of approved labeling or any
applicable statute or regulation with respect to PRODUCT (provided
that ABBOTT shall not be deemed to be in violation of this provision
by using promotional materials provided by MEDIMMUNE), or breach of
this Agreement or any representation or warranty hereunder, by ABBOTT,
AFFILIATES of ABBOTT or any of their respective officers, directors,
agents, or employees with respect to the PRODUCT, or (iii) marketing
of the PRODUCT or any other action with respect to PRODUCT by ABBOTT,
AFFILIATES of ABBOTT or any of their respective officers, directors,
agents or employees, in each case which is not in compliance with
applicable law, rules or regulation, (ABBOTT shall not be deemed to be
in violation of this provision for using promotional materials
provided by MEDIMMUNE) or (iv) any claim warranty or representation by
ABBOTT, AFFILIATES of ABBOTT or any of their respective officers,
directors, agents or employees with respect to PRODUCT which has not
been approved in advance by MEDIMMUNE. MEDIMMUNE shall have the
exclusive right to control the defense of any action which is to be
indemnified in whole by MEDIMMUNE hereunder, including the right to
select counsel reasonably acceptable to ABBOTT to defend ABBOTT, and
to settle any claim, provided that, without the written consent of
ABBOTT (which shall not be unreasonably withheld or delayed),
MEDIMMUNE shall not agree to settle any claim against ABBOTT. The
provisions of this paragraph shall survive and remain in full force
and effect after any termination, expiration or cancellation of this
Agreement and MEDIMMUNE'S obligation hereunder shall apply whether or
not such claims are rightfully brought.
(b) ABBOTT shall defend, indemnify and hold harmless MEDIMMUNE,
AFFILIATES of MEDIMMUNE, and their respective directors, officers,
agents and employees, from and against any and all liability, loss,
damages and expenses (including attorneys' fees) as the result of
THIRD PARTY claims, demands, costs or judgments which may be made or
instituted against any of them arising out of (i) any negligent act or
omission or willful misconduct of ABBOTT, AFFILIATES or ABBOTT or any
of their respective officers, directors, agents or employees, with
respect to the Product or (ii) any violation of approved labeling or
any applicable statute or regulation with respect to PRODUCT (ABBOTT
(PAGE 8)
shall not be deemed to be in violation of this provision by using
promotional material provided by MEDIMMUNE), or breach of this
Agreement or any representation or warranty hereunder, by ABBOTT,
AFFILIATES of ABBOTT or any of their respective officers, directors,
agents or employees, or (iii) the marketing of the PRODUCT, or any
other action of ABBOTT, AFFILIATES of ABBOTT or any of their
respective officers, directors, agents or employees, with respect to
PRODUCT in each case which is not in compliance with applicable law,
rules or regulation (provided that ABBOTT shall not be deemed to be in
violation of this provision by using promotional materials provided by
MEDIMMUNE), or (iv) from any claim, warranty or representation of
ABBOTT, AFFILIATES of ABBOTT or any of their respective officers,
directors, agents or employees, with respect to PRODUCT which has not
been approved in advance by MEDIMMUNE. ABBOTT shall not be obligated
to indemnify an indemnified party to the extent that any claims
against an indemnified party result from (i) any negligent act or
omission or willful misconduct of MEDIMMUNE, or Affiliates of
MEDIMMUNE or any of their respective officers, directors, agents or
employees with respect to the PRODUCT, (ii) any violation of approved
labeling or any applicable statute or regulation with respect to
PRODUCT, or breach of this Agreement or any representation or warranty
hereunder, by MEDIMMUNE, AFFILIATES of MEDIMMUNE or any of their
respective officers, directors, agents or employees, (iii) the
manufacture, possession, packaging, distribution (except for the
distribution of PRODUCT samples by ABBOTT representatives), use,
testing, sale or other disposition of the PRODUCT, or (iv) any claim
against ABBOTT for patent or trademark infringement in connection with
the manufacture, use or sale of the PRODUCT. ABBOTT shall have the
exclusive right to control the defense of any action which is to be
indemnified in whole by ABBOTT hereunder, including the right to
select counsel reasonably acceptable to MEDIMMUNE to defend MEDIMMUNE,
and to settle any claim, provided that, without the written consent of
MEDIMMUNE (which shall not be unreasonably withheld or delayed),
ABBOTT shall not agree to settle any claim against MEDIMMUNE. The
provisions of this paragraph shall survive and remain in full force
and effect after any termination, expiration or cancellation of this
Agreement and ABBOTT'S obligation hereunder shall apply whether or not
such claims are rightfully brought.
3.2 A person or entity that intends to claim indemnification under this
Article 6 (the "Indemnitee") shall promptly notify the other PARTY
(the "Indemnitor") of any loss, claim, damage, liability or action in
respect of which the Indemnitee intends to claim such indemnification,
and the Indemnitor, after it determines that indemnification is
required of it, shall assume the defense thereof with counsel mutually
satisfactory to the PARTIES; provided, however, that an Indemnitee
shall have the right to retain its own counsel, with the fees and
expenses to be paid by the Indemnitor if Indemnitor does not assume
the defense, or if representation of such Indemnitee by the counsel
(PAGE 9)
retained by the Indemnitor would be inappropriate due to actual or
potential differing interests between such Indemnitee and any other
person represented by such counsel in such proceedings. The indemnity
agreement in this Article shall not apply to amounts paid in
settlement of any loss, claim, damage, liability or action if such
settlement is effected without the consent of the Indemnitor, which
consent shall not be withheld or delayed unreasonably. The failure to
deliver notice to the Indemnitor within a reasonable time after the
commencement of any such action, if prejudicial to its ability to
defend such action, shall relieve such Indemnitor of any liability to
the Indemnitee under this Article, but the omission so to deliver
notice to the Indemnitor will not relieve it of any liability that it
may have to any Indemnitee otherwise than under this Article. The
Indemnitee under this Article, its employees and agents, shall
cooperate fully with the Indemnitor and its legal representatives in
the investigations of any action, claim or liability covered by this
indemnification. In the event that each PARTY claims indemnity from
the other and one PARTY is finally held liable to indemnify the other,
the Indemnitor shall additionally be liable to pay the reasonable
legal costs and attorneys' fees incurred by the Indemnitee in
establishing its claim for indemnity.
4. TERM AND TERMINATION
4.1 Except if sooner terminated as provided herein, this Agreement shall
be effective as of the date hereof and shall continue for so long as
MEDIMMUNE or its AFFILIATE is selling PRODUCT in the TERRITORY.
4.2 Expiration or termination of this Agreement shall not relieve the
PARTIES of any obligation accruing prior to such expiration or
termination nor preclude either PARTY from pursuing all rights and
remedies it may have hereunder or at law or in equity with respect to
any breach of this Agreement nor prejudice either PARTY's right to
obtain performance of any obligation provided for in this Agreement
which expressly survives expiration or termination. The provisions of
Article 3 and Sections 4.2, 4.5, 5.7, 5.11, 5.12, and 5.15 shall
survive the expiration or termination of this Agreement as well as any
other provision which by its intent is meant to survive expiration or
termination of this Agreement.
4.3 Notwithstanding any other provision of this Agreement, either PARTY
may terminate this Agreement by notice in writing to the other upon or
at any time after the occurrence of any of the following events:
(i) if the other commits a material breach of this
Agreement which (a) in the case of a breach capable of a remedy,
shall not have been remedied within sixty (60) days of the
receipt by the other of written notice identifying the breach and
requiring its remedy and (b) continues to exist at the time of
notice of
(PAGE 10)
termination; or
(ii) if the other is unable to pay its debts, becomes
bankrupt or insolvent, or enters into liquidation whether
compulsorily or voluntarily, or compound with or convenes a
meeting of its creditors, or has a receiver appointed over all or
part of its assets, or takes or suffers any similar action in
consequence of a debt, or ceases for any reason to carry on
business.
4.4 If the THRESHOLD set forth in Section 2.4 has not been or is not going
to be achieved in a YEAR, after the first YEAR, either PARTY shall
have the right to terminate this Agreement by written notice to the
other PARTY no earlier than April 1 and no later than April 30th of
the applicable YEAR effective at the end of such YEAR, provided,
however, that by written notice to MEDIMMUNE given within twenty (20)
days following ABBOTT's receipt of MEDIMMUNE's termination notice,
ABBOTT may elect to pay MEDIMMUNE (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) of the difference between the THRESHOLD for the applicable
YEAR and the NET SALES of PRODUCT for the applicable YEAR, in which
case the Agreement shall not be terminated. Such amount shall be paid
within (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) days after the end
of the subject YEAR. The provisions of this Section 4.4 shall not be
applicable if the failure by ABBOTT to reach the THRESHOLD results
from an inability of MEDIMMUNE to timely deliver PRODUCT.
4.5 Upon termination of this Agreement, ABBOTT shall have no further
rights whatsoever in the PRODUCT in the TERRITORY, including but not
limited to any rights to co-promote the PRODUCT or to the payment set
forth hereunder.
4.6 Notwithstanding any other provision of this Agreement, MEDIMMUNE may
suspend or terminate sale of PRODUCT if the FDA takes any action the
result of which is to prohibit or restrict the manufacture or sale or
introduction into interstate commerce of the PRODUCT. Such
termination or suspension shall not be deemed a termination of this
Agreement. MEDIMMUNE shall promptly notify ABBOTT of any such action
by the FDA.
4.7 Notwithstanding any other provision of this Agreement, upon six (6)
months prior written notice to ABBOTT, MEDIMMUNE may terminate,
manufacture, and/or use, and/or sale of PRODUCT in the TERRITORY,
within its sole discretion and thereby terminate this Agreement. Such
termination shall not be deemed a breach of this Agreement.
5. MISCELLANEOUS
5.1 Independent Contractor. The relationship between MEDIMMUNE and ABBOTT
is that of independent contractors. MEDIMMUNE and ABBOTT are not
joint venturers, partners, principal and agent, master and servant,
(PAGE 11)
employer or employee, and have no relationship other than as
independent contracting parties. MEDIMMUNE shall have no power to
bind or obligate ABBOTT in any manner. Likewise, ABBOTT shall have no
power to bind or obligate MEDIMMUNE in any manner. Except as
permitted in Section 2.3(e), neither PARTY shall have any
responsibility for the hiring, firing, compensation or employee's
benefits of the other PARTY'S employees.
5.2 Nonassignability. This Agreement may not be assigned or otherwise
transferred by either PARTY without the consent of the other PARTY;
provided, however, that either PARTY may, without such consent, assign
this Agreement and its rights and obligations hereunder to its
AFFILIATES or in connection with the transfer or sale of all or
substantially all of its business to which this Agreement relates, or
in the event of its merger or consolidation or change in control or
similar transaction. Any purported assignment in violation of the
preceding sentences shall be void. Any permitted assignee shall
assume all obligations of its assignor under this Agreement, provided
that such assigning party shall remain primarily liable hereunder in
the case of an assignment to an AFFILIATE.
5.3 Modification. This Agreement constitutes the entire agreement among
the PARTIES with respect to the subject matter hereof and supersedes
all prior agreements, understandings, and discussions, whether oral or
written of the PARTIES with respect to the subject matter hereof. Any
modification of this Agreement shall be effective only when in writing
and signed by the PARTIES and specifically states that it is an
amendment to this Agreement.
5.4 Notices. Any notices expressly provided for under this Agreement
shall be in writing, shall be given either manually or by mail,
facsimile message, telegram, telex or other written means, and shall
be deemed sufficiently given if and when received by the PARTY to be
notified at its address set forth below, or if and when mailed by
certified or registered mail, postage prepaid, addressed to the PARTY
at such address stated below. Either PARTY may, by notice to the
other PARTY, change its address for receiving such notices.
<TABLE>
<CAPTION>
<S> <C>
To MEDIMMUNE: MedImmune, Inc.
35 West Watkins Mill Road
Gaithersburg, MD 20878
Attn: CEO
Telephone No.: 301-417-0770
Fax No.: 301-527-4201
(PAGE 12)
To ABBOTT: Ross Products Division
625 Cleveland Avenue
Columbus, OH 43215
Attn: President
Telephone No.: 614-624-7677
Fax No.: 614-624-7030
with copy to: Abbott Laboratories
D-364, AP6D
100 Abbott Park Road
Abbott Park, IL 60064
Attn: General Counsel
Telephone No.: 847-937-5210
Fax No.: 847-938-1342
</TABLE>
5.5 Severability. If any provision(s) of this Agreement are or become
invalid, are ruled illegal by any court of competent jurisdiction or
are deemed unenforceable under then current applicable law from time
to time in effect during the term hereof, it is the intention of the
PARTIES that the remainder of this Agreement shall not be affected
thereby provided that a PARTY's rights under this Agreement are not
materially affected. It is further the intention of the PARTIES that
in lieu of each such provision which is invalid, illegal, or
unenforceable, there be substituted or added as part of this Agreement
a provision which shall be as similar as possible in economic and
business objectives as intended by the PARTIES to such invalid,
illegal or unenforceable provision, but shall be valid, legal and
enforceable. In the event a party's rights are materially affected as
a result of a change in this Agreement under this Section, such PARTY
may terminate this Agreement.
5.6 Public Announcements. MEDIMMUNE and ABBOTT each agrees not to
disclose any terms or conditions of this Agreement to any third party
or to make any public statement about this Agreement or wherein the
name of the other PARTY is used without the prior written consent of
the other PARTY (which shall not be unreasonably withheld or delayed),
except as is required by applicable law, rule or regulation; provided
(i) that if this Agreement is required to be filed as part of any
public document the filing PARTY shall, to the fullest extent
permitted under such law, rule or regulation, request that
confidential treatment be afforded to this Agreement; or (ii) that
either PARTY may allow a third party to review this Agreement as part
of an overall due diligence examination of such PARTY in connection
with any potential financing, acquisition, disposition or other
business combination; provided that such third party is under
obligation of confidentiality. In the event of a disclosure permitted
(PAGE 13)
under this Section, the disclosing PARTY shall nonetheless provide
the non-disclosing PARTY with notice of such disclosure prior to
disclosure, and will, to the extent reasonably possible, provide the
non-disclosing PARTY with an opportunity to correct same. A PARTY
shall not be required to provide the other PARTY with a disclosure
which has been previously provided to a PARTY.
5.7 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Maryland with regard to
choice of law principles.
5.8 Force Majeure. Neither PARTY shall be held liable or responsible to
the other PARTY nor be deemed to have defaulted under or breached this
Agreement for failure or delay in fulfilling or performing any term of
this Agreement other than a payment provision when such failure or
delay is caused by or results from causes beyond the reasonable
control of the affected PARTY including but not limited to fire,
floods, embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, strikes, lockouts or other
labor disturbances, acts of God or acts, omissions or delays in acting
by any governmental authority or the other PARTY. Upon the occurrence
of such event, the affected PARTY shall give prompt written notice of
such event to the other PARTY.
5.9 Waiver. Any delay in enforcing a PARTY's rights under this Agreement
or any waiver as to a particular default or other matter shall not
constitute a waiver of a PARTY's right to the future enforcement of
its rights under this Agreement, excepting only as to an expressed
written and signed waiver as to a particular matter for a particular
period of time.
5.10 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
5.11 Nondisclosure Obligations.
(a) During the term of this Agreement, it is contemplated that a
PARTY will disclose to the other PARTY proprietary and confidential
technology, specifications, technical information and the like which
are owned or controlled by a PARTY ("Confidential Information"). The
receiving PARTY agrees to retain the disclosing PARTY's Confidential
Information in confidence and not to disclose any such Confidential
Information to a THIRD PARTY without the prior written consent of the
disclosing PARTY and to use the disclosing PARTY's Confidential
Information only for the purposes of this Agreement. The obligations
of confidentiality will not apply to Confidential Information which:
(PAGE 14)
(i) was known to the receiving PARTY or generally
known to the public prior to its disclosure hereunder;
(ii) subsequently becomes known to the public by some
means other than a breach of this Agreement;
(iii)is subsequently disclosed to the receiving PARTY
by a third party having a lawful right to make such
disclosure;
(iv) is required by law or bona fide legal process to
be disclosed provided that the receiving PARTY takes all
reasonable steps to restrict and maintain confidentiality of
such disclosure and provides reasonable prior notice to the
disclosing PARTY; or
(v) is approved for release by the PARTIES.
(b) Upon termination or expiration of this Agreement, each PARTY
shall return to the other PARTY all tangible forms of confidential
information furnished by the other PARTY, including all copies thereof
and all memoranda of oral disclosure, except that each PARTY may
retain one copy in its files to ensure compliance with any legal
obligations.
(c) This Section shall survive until the tenth anniversary of the
termination or expiration of this Agreement.
5.12 Non-Compete.
(a) During the period that ABBOTT is co-promoting PRODUCT under this
Agreement and for (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED), ABBOTT
agrees that neither ABBOTT nor an AFFILIATE of ABBOTT shall promote,
market or sell directly or indirectly or assist another PARTY in
marketing or selling in the TERRITORY any biological and/or
pharmaceutical product for prevention and/or treatment of respiratory
syncytial virus disease that competes with the PRODUCT.
(b) During the first (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED),
MEDIMMUNE agrees that neither MEDIMMUNE nor an AFFILIATE of MEDIMMUNE
shall promote, market or sell directly or indirectly or assist another
PARTY in marketing or selling in the TERRITORY any biological and/or
pharmaceutical product for prevention and/or treatment of respiratory
syncytial virus disease that competes with the PRODUCT, except
RESPIGAM and any product of which RESPIGAM is a component.
5.13 Authority. The PARTIES warrant and represent to each other that each
has the full right and authority to enter into this Agreement, that
each is not aware of any impediment which would inhibit its ability to
(PAGE 15)
perform the terms and conditions imposed on it by this Agreement, and
that there are no and will be no outstanding agreements, licenses,
assignments or encumbrances inconsistent with the provisions of and
the rights granted under this Agreement, or which are inconsistent
with or would prevent a PARTY from performing all of its obligations
under this Agreement.
5.14 No Grant of License. Nothing contained herein shall be deemed to
grant ABBOTT either expressly or impliedly, a license or other right
or interest in any patent, trademark, trade name or logo or other
similar property of MEDIMMUNE, except as may be necessary for ABBOTT
to co-promote the PRODUCT as provided hereunder.
5.15 No Consequential Damages. Except for a PARTY's obligations under
Section 3.1, neither PARTY shall be liable to the other for any
consequential, special, incidental or indirect charges.
5.16 Representations and Warranties. MEDIMMUNE represents and warrants to
ABBOTT, as of the date hereof, that to the best of its knowledge, the
manufacture, use, sale or offer to sell of PRODUCT in the TERRITORY
does not infringe or violate any granted patent. In no event shall
MEDIMMUNE's liability for a breach of this representation and warranty
exceed $250,000.
IN WITNESS WHEREOF, this Agreement has been duly executed effective on
the date first above written.
<TABLE>
<CAPTION>
<S> <C>
By:/s/Thomas M. McNally By:/s/David M. Mott
Thomas M. McNally David M. Mott
Senior Vice President President
</TABLE>
(PAGE 16)
EXHIBIT 10.77
CONTRACT RESEARCH AND DEVELOPMENT AGREEMENT
(MEDI-493)
THIS CONTRACT RESEARCH AND DEVELOPMENT AGREEMENT ("Agreement") is made
effective as of November 27, 1997 ("Effective Date"), by and among
MedImmune, Inc. ("MEDIMMUNE"), a corporation having a place of business
at 35 West Watkins Mill Road, Gaithersburg, Maryland 20878 U.S.A., and
Dr. Karl THOMAE GmbH ("THOMAE") a German corporation having its
principal place of business at Birkendorfer Strabe 65, 88397 Biberach
an der Riss, Federal Republic of Germany.
BACKGROUND
MEDIMMUNE has developed proprietary protein production technologies,
and has developed a proprietary cell line capable of expressing a
humanized monoclonal antibody against Respiratory Syncyital Virus (RSV)
and designated as MEDI-493.
THOMAE owns specialized cell culture, processing, protein purification
and lyophilization facilities that may be suitable for production of
MEDI-493, and employs personnel who have experience in production of
proteins by cell culture and purification processes as well as in
registration and marketing of biopharmaceuticals.
MEDIMMUNE desires to have THOMAE personnel evaluate the performance of
the MEDIMMUNE MEDI-493 production process, formulation and
lyophilization of the resulting product in THOMAE's facilities.
MEDIMMUNE and THOMAE have previously entered into an evaluation
agreement dated April 16, 1997 to evaluate the potential production and
supply of MEDI-493 (the "Evaluation Agreement"), and THOMAE has already
started the development work under an interim agreement dated August
15/21, 1997 with MEDIMMUNE covering all expenditures by THOMAE for the
interim period from May to December 1997 the "Interim Agreement"),
which shall be replaced by signing of this Agreement.
AGREEMENT
IN CONSIDERATION OF the mutual covenants set forth in this Agreement,
THOMAE, and MEDIMMUNE hereby agree as follows:
1. DEFINITIIONS.
1.1 "MEDIMMUNE" shall mean MEDIMMUNE Inc. as laid down first above.
(PAGE 1)
1.2 "MEDIMMUNE Confidential Information" shall mean the Cell Line,
Process, Product and all technical and other information relating
thereto that is disclosed or supplied to THOMAE by MEDIMMUNE
pursuant to this Agreement or the Evaluation Agreement whether
patented or unpatented, including, without limitation, trade
secrets, know-how, processes, concepts, experimental methods and
results and business and scientific plans.
1.3 "MEDI-493" shall mean the humanized IgG1 monoclonal antibody
specifically directed against RSV.
1.4 "Cell Line" shall mean the novel and proprietary cell line (Id.-No.
RSV-1129 a-6H3) developed by MEDIMMUNE and provided to THOMAE pur
suant to the terms of this Agreement or the Evaluation Agreement
including, without limitation, all modifications and derivatives of
such cell line.
1.5 "Certificate of Analysis" shall mean a document describing testing
methods and results, the accuracy of which has been certified by
the issuing party.
1.6 "Effective Date" shall mean the date first above written, which
shall be the effective date of this Agreement.
1.7 "GMP" shall mean the current regulatory requirements for good
manufacturing practices promulgated by the FDA under the Federal
Food, Drug and Cosmetic Act, as amended, 21 C.F.R. 210, 211 et
seq and 21 C.F.R. 600-610, as applicable.
1.8 "Master Cell Bank" shall mean MEDIMMUNE's reference deposit or
collection of vials of the Cell Line, from which the Working Cell
Bank is derived.
1.9 "Phase I" shall mean the activities and work to be performed as
laid down in the respective chapter of the Master Project plan
attached hereto as APPENDIX 1.
1.10 "Phase II" shall mean the activities and work to be performed as
laid down in the respective chapter of the Master Project plan
attached hereto as APPENDIX 1.
1.11 "Phase III" shall mean the activities and work to be performed as
laid down in the respective chapter of the Master Project plan
attached hereto as APPENDIX 1.
1.12 "Bulk Product" shall mean the Product which has been purified to a
concentrated form and can be stored in a liquid or frozen form
under appropriate conditions.
(PAGE 2)
1.13 "Final Product" shall mean unlabelled final container containing
lyophilized Product.
1.14 "Finished Product" shall mean Final Product and also labelled and
packaged.
1.15 "Process" shall refer to a proprietary MEDIMMUNE process for using
the Cell Line, including defined procedures, equipment and
analytical methodologies for in-process control, release testing
and Product characterization, that has been used by MEDIMMUNE to
produce the Product at the (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) fermentation scale which has already partly been and
shall fully be disclosed by MEDIMMUNE to THOMAE to enable THOMAE to
carry out the Project or if and when applicable the modified
process after scale up by THOMAE to the (CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED) fermentation scale. The current format of MedImmune
Process and of Thomae Process are set forth in APPENDIX 13.
1.16 "Product" shall mean the MEDI-493 produced by the Cell Line in
accordance with the Process.
1.17 "Project" shall mean the Phase I - III program described herein, in
which MEDIMMUNE shall transfer the Process to THOMAE to be
implemented upscaled and evaluated at the respective fermentation
scale in THOMAE's facility and equipment. The primary objectives of
the Project will be to establish or adapt and scale up the Process
in the THOMAE facility, successfully demonstrate that equivalent
Product can be reproducibly manufactured in THOMAE's facilities,
and generate a report compiling all relevant data generated in the
Project. A proposed timeline for the Project is included in
APPENDIX 1.
1.18 "Project Fee" shall have the meaning specified in Section 6 hereof.
1.19 "Project Manager" shall have the meaning specified in Section 2.1
hereof.
1.20 "Project Team" shall have the meaning specified in Section 2.2
hereof.
1.21 "Start Date" shall mean May 12, 1997.
1.22 "THOMAE Confidential Information" shall mean all technical and
other information relating to THOMAE's facilities and associated
technologies that is disclosed or supplied to, or used on behalf
of, MEDIMMUNE by THOMAE pursuant to this Agreement, whether
patented or unpatented, including, without limitation, trade
secrets, know-how, processes, concepts, experimental methods and
results and business and scientific plans.
(PAGE 3)
1.23 "Working Cell Bank" shall mean MEDIMMUNE's vialed collection
serially subcultivated cells that is derived from the Master Cell
Bank. The Working Cell Bank is used to establish seed cultures of
the Cell Line to initiate the Process.
1.24 "Specifications" shall mean the specifications for the Product and
the respective test methods attached hereto as APPENDIX 5 on the
basis of the specifications provided by MEDIMMUNE and as such
specifications may be amended from time to time by mutual agreement
of MEDIMMUNE and THOMAE according to further development of the
Process and Product.
1.25 "Product Characterization" shall mean the analytical
characterization of the Product performed at MEDIMMUNE as specified
in APPENDIX 10.
2. COOPERATION BETWEEN THE PARTIES IN THE COURSE OF THE PROJECT.
2.1 Designation of Project Manager.
THOMAE and MEDIMMUNE shall each identify a Project Manager who will
be responsible for communicating all instructions and information
concerning the Project to the other party. Each Project Manager
will be available on an agreed upon monthly basis for consultation
at prearranged times during the course of the Project. In the
absence of the Project Manager, a substitute shall be appointed.
Additional modes or methods of communication and decision making
may be implemented with the mutual consent of each party.
2.2 Project Team.
THOMAE and MEDIMMUNE shall each name representatives to a Project
Team, which shall consist of knowledgeable specialists in
appropriate disciplines who shall be responsible for planning and
executing the Project and any subsequent interactions between the
parties. At regular intervals, the Project Managers shall schedule
meetings between each company's representatives for the purpose of
communicating Project updates and providing a forum for strategic
decision making and rapid resolution of issues. Joint Project
meetings shall be conducted by telephone conference, video
conference and face to face meetings. Meeting minutes shall be
prepared jointly by the Project Managers to record all issues
discussed and decisions made.
The present list of the members of the Project Team is attached
hereto as APPENDIX 6.
2.3 Cooperation.
In the course of the Project, THOMAE will at all times take into
consideration and implement the recommendations of MEDIMMUNE as
long as they do not adversely affect other THOMAE biotech
(PAGE 4)
operations and are agreed upon by the Project Team; in the absence
of explicit instructions from MEDIMMUNE, THOMAE shall be entitled
to employ its reasonable judgment in carrying out the Project.
THOMAE shall be entitled to rely upon any instructions or
directives provided by any MEDIMMUNE representative and shall not
be responsible for failure to achieve any objective or the
inability to adhere to any guideline due to technical failures,
incomplete direction or documentation of Process variables, or
other causes beyond the control of THOMAE.
MEDIMMUNE must be informed of any changes that are expected to
change the Process or Product Specifications. Process format and
Process changes for Project Phase I, II and III will be mutually
agreed upon by the Project Team.
If THOMAE proposes a change of the Process, such a change must be
approved by MEDIMMUNE according to the procedure in APPENDIX 8 or
the change shall not be implemented. If MEDIMMUNE proposes a change
of the Process, see first paragraph of this Section 2.3 above.
The parties will inform each other within an appropriate time and
participate in all regulatory contacts and regulatory inspections
regarding MEDI-493 and each party may take part therein at its sole
discretion.
MEDIMMUNE will be provided an opportunity to review and comment on
all documents used for the registration of Product (CMC-Part of
BLA). However, this shall not include any and all ELA-documents of
THOMAE with respect to MEDI-493 and/or the Product. Basically
MEDIMMUNE will be provided with copies of all regulatory
submissions, submitted for MEDI-493. For those
documents/submissions not to be provided according to the exception
above, MEDIMMUNE will have the right to reference such
documents/submissions for regulatory purposes.
3. MEDIMMUNE'S TASKS AND RESPONSIBILITIES.
3.1 Use of MEDIMMUNE Cell Line and Intellectual Property.
MEDIMMUNE and THOMAE hereby acknowledge and agree that MEDIMMUNE is
providing Cell Line, Process and MEDIMMUNE Confidential Information
to THOMAE for use by THOMAE on behalf of and for the benefit of
MEDIMMUNE for the purposes of this Agreement, that THOMAE will make
use therof solely for such purposes and that MEDIMMUNE hereby
consents to such use.
3.2 Materials and Information to be Provided.
To enable THOMAE to begin and continue the Project, MEDIMMUNE shall
use commercially reasonable efforts to perform the work and tasks
(PAGE 5)
as set forth and detailed in APPENDIX 7 hereto and shall provide
all materials and information as set forth in APPENDIX 7 and
defined therein. In case MEDIMMUNE is not able to fulfill the
requirements mentioned above the parties shall discuss and
negotiate an alternative (including but not limited to timeline and
cost).
4. THOMAE'S TASKS AND RESPONSIBILITIES (PHASES I-III).
4.1 THOMAE's work and tasks
In the course of this Agreement THOMAE shall perform the work and
tasks as laid down and detailed in APPENDIX 8 hereto.
4.2 Documentation.
As soon as available THOMAE shall provide MEDIMMUNE with the CMC-
part of the BLA (all other parts of registration and the
registration itself being the task and responsibility of
MEDIMMUNE), in formats to be mutually agreed upon. Such CMC-part
shall be in English and shall contain all required portions of the
respective filing as laid down in APPENDIX 2 hereto.
4.3 Stability Program.
Notwithstanding its work described in Section 4.1 above, MEDIMMUNE
and THOMAE shall perform a stability program as laid down in
APPENDIX 4 hereto. The timeline for this work is laid down in the
Master Project plan including Project Timeline (APPENDIX 1). It is
planned that THOMAE will perform release testing for lots post
approval.
4.4 Additional Work
On request of MEDIMMUNE THOMAE shall perform additional work to
sustain the progress of the Project on conditions in terms of
money, time and scope to be subject to mutual agreement of the
parties hereto and defined in an amendment to the Master Project
plan (APPENDIX 1).
4.5 Exclusivity/Competition
During the term of this Agreement, THOMAE agrees that it will not
supply Product to a third party nor shall THOMAE assist any third
party with respect to development or manufacture of a monoclonal
antibody against RSV except where THOMAE is granted marketing
rights to such monoclonal antibody.
4.6 Project is experimental in Nature
MEDIMMUNE acknowledges that the Project is experimental in nature
and that no favorable or useful result can be assured by THOMAE.
Accordingly, THOMAE shall not be responsible to MEDIMMUNE for any
failure of fermentations or inability to obtain useful yields of
Product or keeping the intended timeline.
(PAGE 6)
4.7 GMP
THOMAE will perform the manufacturing operations at its facility in
accordance with GMP and compliance with all applicable local laws
and regulations. THOMAE will deliver Product based on the
Specifications defined in APPENDIX 5. If a run does not meet the
Specifications due to a THOMAE operation error or an equipment
failure, THOMAE will repeat the run at no cost to MEDIMMUNE as the
sole remedy.
4.8 Special Problems
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
5. PHASES I-III TO BE CONDUCTED ON FIXED-FEE BASIS.
The Project shall be conducted by THOMAE for MEDIMMUNE on fixed fee
basis to be paid by MEDIMMUNE to THOMAE as set forth in Article 6
hereof (the "Project Fee"). The estimated duration of the Project
shall be 19 (nineteen) months from the Start Date as outlined in
APPENDIX 1 hereto.
As the Project is experimental in nature, the Project Fee shall be
payable in full when due regardless of result unless the Project is
terminated prior to its scheduled completion pursuant to Article 12
hereof.
6. PHASES I-III PAYMENTS
6.1 Fixed Project Fee MEDIMMUNE shall pay THOMAE a Project Fee
based on actual costs of (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) for the services provided in carrying out the Project.
This Project Fee includes the actual costs of THOMAE's work ac
cording to Article 4 hereof (for additional work if any see
Section 4.4 hereof), and insofar is all inclusive.
Disposal of organic and hazardous waste is included in the Project
Fee. The Project Fee shall be payable in installments, each non-
refundable when paid, (except for a breach of this Agreement by
THOMAE as provided herein), as provided for in the Master Project
plan (APPENDIX 1).
THOMAE shall receive installments according to the progress of the
Project pursuant to the agreed schedule set forth in APPENDIX 1.
Each invoice shall be payable within 30 days following receipt
thereof.
6.2 Success Fee
As a means to secure deliverables according to Specifications and
timelines, which would enable MEDIMMUNE to file a BLA amendment and
launch in the U.S. in 1998, MEDIMMUNE will make incentive payments
of up to (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) to THOMAE as
follows:
(PAGE 7)
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(ii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
7. ORDERING INITIAL START-UP MATERIAL FOR (CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED) SCALE
MEDIMMUNE and THOMAE expect that a raw material purchase for
Phase III will be necessary prior to the completion of Phase II
(February 1998).The purchase of such materials at the respective
date laid down in APPENDIX 1 hereto is covered by this Agreement
and is at the sole risk of MEDIMMUNE. The present cost estimate for
initial start-up material is outlined in APPENDIX 3 hereto.
8. OWNERSHIP OF PROJECT DATA / FUTURE ACTIVITIES / COMMERCIAL
PRODUCTION.
8.1 Ownership of Project Data.
In consideration of the Project Fee, THOMAE shall carry out the
Project and transfer all relevant information concerning the
process, and materials related to the Product and obtained in the
course of the Project to MEDIMMUNE. However, this shall not apply
to information regarding THOMAE's facility and technical equipment.
All transferred information - with the exception of THOMAE
Confidential Information - shall be the sole and exclusive property
of MEDIMMUNE and MEDIMMUNE shall have the right to use such
information for any purpose without further obligation to THOMAE.
After transfer of the information, THOMAE shall not be obliged to
provide technical assistance to MEDIMMUNE or a third party with re
spect to use of such information at a facility other than THOMAE's
facility. After termination of the intended supply agreement or as
provided in the supply agreement between the parties, MEDIMMUNE
shall have the right to transfer the modified and scaled-up Process
to third parties. Further such information and materials to be
transferred to MEDIMMUNE shall be MEDIMMUNE Confidential
Information subject to the provisions of Article 11.
THOMAE shall cooperate with MEDIMMUNE in taking all reasonable
steps, including execution of documents, which are commercially
necessary to enable MEDIMMUNE to protect its ownership interest.
8.2 Further Future Activities regarding Research and Development.
If the results of the Project are favorable, THOMAE and MEDIMMUNE
may confer to determine if additional work should be undertaken
pursuant to subsequent agreement between THOMAE and MEDIMMUNE.
Neither party shall be obligated to conduct any further
undertakings on behalf of the other except as provided for herein
or as may be mutually agreed and set forth in a subsequent written
agreement.
(PAGE 8)
Other then as provided in the manufacturing agreement, MEDIMMUNE
shall not assert any right to use THOMAE facilities at any future
date as a result of its use of THOMAE facilities pursuant to this
Agreement.
8.3 Thomae's Right and Obligation for Commercial Manufacture
The parties acknowledge and agree that, in case MEDIMMUNE decides
to commercialize the Product, THOMAE has the right and obligation
to produce commercial quantities of Product (Bulk Product, Final
Product and/or Finished Product form) for MEDIMMUNE within its
respective capacity which shall be exclusive but for MEDIMMUNE's
right to manufacture Bulk Product and/or Final Product and/or
Finished Product and/or to have a third party to produce Final
Product and or Finished Product from Bulk Product produced by
MEDIMMUNE and MEDIMMUNE will have the right and obligation to have
such commercial quantities of MEDI-493 manufactured by THOMAE and
the parties shall negotiate in good faith and consummate a
manufacturing agreement (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
at the earliest opportunity for the manufacturing by THOMAE of
commercial quantities of the respective Product, any prolongation
to be subject to separate agreement of the parties. Such agreement
shall contain terms and conditions customary for such a
manufacturing agreement.
During the term of the manufacturing agreement, if THOMAE cannot
produce sufficient commercial quantities of Product as outlined in
APPENDIX 9 for whatever reason, MEDIMMUNE will have the right to
have the missing quantities manufactured by a third party.
8.4 Terms and Conditions of Manufacturing Agreement
Such manufacturing agreement shall contain terms and conditions
customary for such a manufacturing agreement.
In particular, the parties hereby agree that the pricing from
THOMAE for the manufactured Product under such manufacturing
agreement shall be in accordance with a volume discount pricing
matrix and basic production assumptions, both set forth in APPENDIX
11 attached hereto, which pricing matrix will establish an absolute
initial price ceiling for Product under the manufacturing agreement
and will provide a framework to establish Product costs for
variable length production campaigns.
Moreover, such manufacturing agreement shall contain a "Rolling
Forecast Planning System for Product (Commercial Manufacture)"
attached hereto as APPENDIX 12.
In APPENDIX 9 MEDIMMUNE has set forth its present forecast
estimation of its latest requirements of the Product. This forecast
is non-binding; however, THOMAE's capacity planning for commercial
manufacture is based on and limited by MEDIMMUNE's forecast.
(PAGE 9)
9. REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION.
9.1 MEDIMMUNE.
MEDIMMUNE hereby represents, warrants and agrees that:
(a) MEDIMMUNE is free to supply the Cell Line and MEDIMMUNE Con
fidential Information to THOMAE;
(b) MEDIMMUNE is not aware of any special or unusual hazards in
volved in handling the Cell Line or Product;
(c) MEDIMMUNE has full corporate authority to enter into this
Agreement and this Agreement is binding upon MEDIMMUNE in
accordance with its terms; and
(d)MEDIMMUNE shall indemnify, defend and hold THOMAE, its affiliates, and
their respective officers, employees and agents harmless from and
against all third pary losses, damages, costs and expenses
(including, without limitatiion, reasonable attorneys' fees),
including injury to persons or damage to property resulting from
any breach of the representations and warranties made by MEDIMMUNE
under this Section, or as a result of any third party claim of
infringement of the intellectual property rights of a third party
based upon THOMAE's activities in implementing the Process or
producing the Product in accordance with the instructions and
documentation provided by MEDIMMUNE or developed in the course of
the Project, except those which result from the gross negligence
or willful misconduct of an indemnified person or entity.
9.2 THOMAE.
THOMAE hereby represents, warrants and agrees that:
(a) THOMAE is the owner of the facilities and THOMAE
Confidential Information to be used for purposes set forth
in this Agreement;
(b) THOMAE is not aware of any special or unusual hazards that
would arise as a result of its carrying out of the Project
as planned;
(c) THOMAE has full corporate authority to enter into this
Agreement and this Agreement is binding upon THOMAE in
accordance with its terms; and
(d)THOMAE shall indemnify, defend and hold MEDIMMUNE and its officers,
employees and agents harmless from and against all third party
losses, damages, costs and expenses (including,
(PAGE 10)
(e)without limitation, reasonable attorneys' fees), including injury to
persons or damage to property, resulting from any breach of the
representations and warranties made by THOMAE under this Section,
or as a result of any claim that THOMAE has violated any
applicable local law, regulation or ordinance in carrying out its
biotechnical manufacturing responsibilities under this Agreement
or as a result of willful breach or misconduct of THOMAE or its
officers, employees or agents, except those which result from
gross negligence or willful misconduct of an indemnified
person or entity.
9.3 Information
With respect to the indemnification mentioned above in this
section, each indemnified party will notify the indemnifying party
promptly of any claim or loss and the indemnifying party shall be
entitled to control the defense, settlement or compromise of any
such claim or loss.
10. LIABILITY.
10.1 No Warranty of Merchantability or Fitness.
THOMAE shall provide the results of the Project to MEDIMMUNE
without any warranty of any kind, express or implied, including,
without limitation, any warranties of merchantability or fitness
for a particular purpose. THOMAE warrants solely that the Project
shall be conducted as laid down in APPENDIX 1 of this Agreement,
and that any documentation of Project results or procedures
provided to MEDIMMUNE by THOMAE shall be accurate in all material
respects.
10.2 Limitation of Liability.
THOMAE has no knowledge or awareness of or control over the manner
in which MEDIMMUNE intends to use any Product or results obtained
in the Project.
THOMAE shall not be liable to MEDIMMUNE for any losses, damages,
costs or expenses of any nature incurred or suffered by MEDIMMUNE
or by a third party, arising out of any dispute or other claims or
proceedings made by or brought against MEDIMMUNE with respect to
use of the results of the Project, or the use of any Product by
MEDIMMUNE or by a third party (including, without limitation,
product liability claims and claims by a third party alleging
infringement of its intellectual property rights) except as to
those under Section 9.2 (d) above, nor shall THOMAE be responsible
in any way for dealing with any such disputes, claims or pro
ceedings.
(PAGE 11)
THOMAE will provide reasonable cooperation, if requested by
MEDIMMUNE, on matters relating to the Project in the event of such
claims.
MEDIMMUNE shall indemnify, defend and hold THOMAE, its affiliates
and their respective officers, employees and agents harmless from
and against all such third party losses, damages, costs and
expenses (including, without limitation, reasonable attorneys' fees
and infringement of the intellectual property rights of a third
party). This indemnification shall also be subject to the
provisions of Section 9.3 above.
10.3 Maximum Amount.
THOMAE undertakes to use its best efforts to perform the Project
under the Master Project plan and to meet the target dates set
forth in APPENDIX 1 hereto. However, due to the biological nature
of the work to be performed hereunder THOMAE's liability under this
Agreement and its indemnification and holdharmless obligations
shall in no event amount to more than (CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED) of the Project Fee. This limitation does not apply
in cases of willful breach or misconduct of THOMAE or its officers,
employees or agents.
11. CONFIDENTIALITY.
11.1 THOMAE shall not disclose MEDIMMUNE Confidential Information to any
person other than its employees or employees of affiliated
companies of the Boehringer Ingelheim group who have a need to know
such information in order to perform their duties in carrying out
the Project hereunder and who have an obligation to maintain the
confidentiality thereof as provided herein.
11.2 MEDIMMUNE shall not disclose any THOMAE Confidential Information to
any person other than
(a) its employees or consultants who are bound by similar
obligations of confidentiality and who have a need to know
such information in order to provide direction to THOMAE or
evaluate the results of the Project, or
(b)regulatory authorities, for example, the FDA, that require such infor
mation in order to review an IND, BLA or other regulatory filing.
THOMAE will be informed and must agree prior to filing of any
THOMAE confidential Information to regulatory authorities. In
these case where THOMAE restricts MEDIMMUNE's ability to file
(PAGE 12)
THOMAE Confidential Information, THOMAE agrees to provide
the Confidential Information directly to the regulatory
authorities and will provide a letter of authorization for
cross-reference to MEDIMMUNE.
(c) persons or entities that manufacture Product for MEDIMMUNE
after termination of the manufacturing agreement or during
the manufacturing agreement as permitted therein.
11.3 The obligations of confidentiality applicable to MEDIMMUNE
Confidential Information and THOMAE Confidential Information shall
not apply to any information that is:
(a) known publicly or becomes known publicly through no fault of
the recipient;
(b) learned by the recipient from a third party entitled to
disclose it;
(c) developed by the recipient independently of information
obtained from the disclosing party;
(d) already known to the recipient before receipt from the
disclosing party, as shown by its prior written records;
(e) required to be disclosed by law, regulation or the order of
a judicial or administrative authority; or
(f) released with the prior written consent of the disclosing
party.
11.4 Except as granted under this Agreement, no right or license, either
express or implied, under any patent or proprietary right is
granted hereunder by virtue of the disclosure of MEDIMMUNE
Confidential Information or THOMAE Confidential Information.
11.5 Either party shall be entitled to injunctive relief in the event of
a breach of this Agreement by the other party. The obligations of
both parties under this Article 11 shall survive the expiration or
termination of this Agreement. Both MEDIMMUNE and THOMAE shall use
reasonable and customary precautions to safeguard MEDIMMUNE
Confidential Information and THOMAE Confidential Information,
including ensuring that all employees or consultants who are pro
vided access to such information are informed of the confidential
and proprietary nature of such information and understand that all
such information is required to be maintained confidential.
(PAGE 13)
12. TERM AND TERMINATION.
12.1 Term.
This Agreement shall, unless terminated earlier, take effect as of
the Effective Date retroactive as of the Start Date and shall
terminate upon the date of payment of the last sum due hereunder,
or upon the date when the last services required to be performed
hereunder are performed, whichever date shall last occur.
12.2 Right to Terminate.
If it becomes apparent to either party at any stage of the Project
that it will not be possible to carry out the Project for
scientific or technical reasons or as a result of Force Majeure,
the parties shall permit 10 (ten) business days for discussion to
make a proposal to resolve, if possible, the scientific or
technical issue giving rise to the problem. If the parties fail to
resolve the problem within further 20 business days, either party
shall have the right to terminate this Agreement, effective upon
written notice to the other. MEDIMMUNE shall also have the right
to terminate this Agreement on ninety (90) days written notice in
the event, MEDIMMUNE determines to cease development and marketing
of the Product.
In the event of termination as set forth within Section 12.2, the
amount due to THOMAE hereunder shall include all expenses
reasonably incurred by THOMAE prior to such termination in respect
of the purchase of supplies or raw materials, and an allocation of
the balance of the Project Fee for the period prior to receipt of
such termination and for a period of 8 (eight) weeks thereafter.
Either party may terminate this Agreement effective upon written
notice if either of the following events occurs
(a) the other party commits a breach of this Agreement and the
breach is not remedied within 30 days after the receipt of
notice identifying the breach and requiring its remedy; or
(b) the other party (I) becomes unable to pay its debts as they
become due, (II) suspends payment of its debts, (III) enters
into or becomes subject to corporate rehabilitation or
bankruptcy proceedings or liquidation or dissolution, (IV)
makes an assignment for the benefit of its creditors or (V)
seeks relief under any similar laws for debtor's relief.
12.3 Effect of Termination.
Upon the expiration or termination of this Agreement:
(a)at the request of MEDIMMUNE, THOMAE shall destroy the Cell Line as
well as the material derived from its culture or deliver the same
at MEDIMMUNE's request to MEDIMMUNE or a
(PAGE 14)
(b)party nominated by MEDIMMUNE at MEDIMMUNE's cost and shall promptly
return all MEDIMMUNE Confidential Information to MEDIMMUNE; except
for a single copy and/or sample of each material for documentation
purposes only and except as required to meet THOMAE's obligations
under the manufacturing agreement. THOMAE's responsibility to keep
and store the Cell line and any other materials shall terminate 6
six months after expiration or termination of this Agreement, and
(b) MEDIMMUNE shall promptly return all THOMAE Confidential
Information to THOMAE, except for a single copy and/or
sample for documentation purposes only.
(c) The respective rights of THOMAE and MEDIMMUNE to indemnifi
cation as set forth in Article 9 and 10 hereof shall
survive termination of this Agreement with respect to any
claims that relate to or derive from the Project, or any
acts or failures to act, of either THOMAE or MEDIMMUNE in
connection with the Project that occur prior to termination.
(d) The rights and obligations of Sections 8.1 and 12.3 shall
also survive termination of this Agreement.
This also applies to Section 9 (d) as far as a breach occurs
prior to termination of this Agreement.
13. MISCELLANEOUS
13.1 Force Majeure.
Neither party shall be in breach of this Agreement if there is any
failure of performance under this Agreement (except for payment of
any amounts due hereunder) occasioned by any act of God, fire, act
of government or state, war, civil commotion, insurrection,
embargo, prevention from or hindrance in obtaining energy or other
utilities, labor disputes of whatever nature or any other reason
beyond the control of either party.
13.2 Publicity.
No press release or other form of publicity regarding the Project
or this Agreement shall be permitted by either party to be
published unless both parties have indicated their consent to the
form of the release in writing.
Nothing in this Article 13.2 shall prevent the parties from
disclosing this Agreement as required by applicable laws, rules or
regulations.
13.3 Notices.
Any notice required or permitted to be given hereunder by either
(PAGE 15)
party shall be in writing and shall be (i) delivered personally,
(ii) sent by registered mail, return receipt requested, postage
prepaid or (iii) delivered by facsimile with immediate telephonic
confirmation of receipt, to the addresses or facsimile numbers set
forth below:
<TABLE>
<S> <C>
If to THOMAE: Dr. Karl THOMAE GmbH
Birkendorfer Strabe 65
88397 Biberach an der Riss
Federal Republic of Germany
Attention: Prof. Dr. Rolf G. Werner
Fax: 0 73 51/54-51 31
Phone: 0 73 51/54-48 00
If to MEDIMMUNE: MEDIMMUNE Inc.
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
U.S.A.,
Attention: President
Fax: 301/527-4201
Phone: 301/ 417-0770
</TABLE>
Each notice shall be deemed given (i) on the date it is received if
it is delivered personally, (ii) 3 days after the date it is sent
by Federal Express, UPS, DHL, MSAS, World Courier or similar
service if receipt is immediately confirmed in writing or (iii) on
the date it is received if it is sent by facsimile with immediate
telephonic confirmation of receipt.
13.4 Applicable Law/Jurisdiction.
This Agreement shall be governed by and construed in accordance
with the laws of Germany without regard to its choice of law
principles. The courts of the place of domicile of THOMAE shall
have exclusive jurisdiction over all legal matters and proceedings
hereunder.
13.5 Compliance with Laws.
THOMAE shall perform the work hereunder in conformance with GMP, as
applicable, and all German and/or EEC laws, ordinances and govern
mental rules or regulations pertaining thereto.
13.6 Relationship
THOMAE shall not incur any liabilities on behalf of MEDIMMUNE nor
pledge the credit of MEDIMMUNE nor make any representations, or war
ranties on behalf of MEDIMMUNE nor hold itself out to third parties
as having any such rights.
MEDIMMUNE shall not incur any liabilities on behalf of THOMAE nor
(PAGE 16)
pledge the credit of THOMAE nor make any representations, or
warranties on behalf of THOMAE nor hold itself out to third parties
as having any such rights.
13.7 Waiver.
No waiver of any term, provision or condition of this Agreement
whether by conduct or otherwise in any one or more instances shall
be deemed to be or construed as a further or continuing waiver of
any such term, provision or condition or of any other term,
provision or condition of this Agreement.
13.8 Severability.
If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction all other
provisions shall continue in full force and effect. The parties
hereby agree to attempt to substitute for any
invalid or unenforceable provision a valid or enforceable provision
which achieves to the greatest extent possible the economic legal
and commercial objectives of the invalid or unenforceable
provision.
13.9 Entirety.
This Agreement, including any exhibits and appendices attached
hereto and referenced herein and the Evaluation Agreement and the
Interim Agreement, constitutes the full understanding of the
parties and a complete and exclusive statement of the terms of
their agreement, and no terms, conditions, understandings or
agreements purporting to modify or vary the terms thereof shall be
binding unless they are hereafter made in writing and signed by
both parties.
13.10 Assignment.
This Agreement shall be binding upon the successors and assigns of
the parties and the name of a party appearing herein shall be
deemed to include the names of its successors and assigns provided
always that nothing herein shall permit any assignment by either
party. However, THOMAE may assign this Agreement to an affiliated
company taking over the operative biotech business of THOMAE and
MEDIMMUNE may assign this Agreement in the case of a merger or
acqusition or transfer of its assets related to this Agreement to a
third party without the prior written consent of THOMAE.
(PAGE 17)
IN WITNESS WHEREOF, the parties have caused this Agreement to be exe
cuted as of the Effective Date.
<TABLE>
<S> <C> <C>
MEDIMMUNE Inc. DR. KARL THOMAE GMBH
ppa.
BY:/S/David M. Mott /s/Dr. Jacob /s/ Dr. Michelberger
Title: President Member of the Board Head of Legal Department
Date: November 27, 1997
</TABLE>
Appendices:
Appendix 1 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 2 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 3 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 4 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 5 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 6 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 7 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 8 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 9 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 10 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 11 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 12 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 13 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(PAGE 18)
EXHIBIT 10.78
MANUFACTURING - AGREEMENT
This Agreement is made as of November 27, 1997, by and between
MEDIMMUNE INC.,
whose registered office is at 35 West Watkins Mill Road, Gaithersburg,
Maryland 20878 U.S.A.
(hereinafter referred to as "MEDIMMUNE")
and
DR. KARL THOMAE GMBH,
whose registered office is at Birkendorfer Strabe 65, 88397 Biberach an der
Riss, Federal Republic of Germany
(hereinafter referred to as "THOMAE").
WITNESSETH
WHEREAS the parties have - among others - concluded a Contract Research and
Development Agreement regarding the research and development of a method to
produce MEDI-493 in a commercial scale; and
WHEREAS MEDIMMUNE has all rights to the Product and is the owner of the
Process and
WHEREAS MEDIMMUNE wishes THOMAE to act as its agent to manufacture Product
for MEDIMMUNE, and THOMAE accepts, to manufacture Product as agent for
MEDIMMUNE for commercial use, manufactured in accordance with the Process.
NOW THEREFORE, the parties hereto agree as follows:
1. DEFINITIONS
In this Agreement the following terms shall have the meanings indicated:
1.1 "MEDIMMUNE" means MedImmune Inc. as laid down first above.
1.2 "Contract Research and Development Agreement" means the agreement
on MEDI-493 (the humanized IgG 1 monoclonal antibody specifically
directed against Respiratory Syncytical Virus (RSV)) between the
parties to this Agreement dated November 27, 1997regarding the
development of the Process.
(PAGE 1)
1.3 "Product-price" means THOMAE's prices for manufacturing Product,
Bulk Product, Final Product and/or Finished Product (as the case
may be) to be calculated on the basis of the assumptions set forth
in Appendix 1.
1.4 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
1.5 "Product" means any product containing MEDI-493 in Bulk Product or
as Final Product or as Finished Product its sole or combined active
ingredient and produced according to the Process.
1.6 "Bulk Product" means Product which has been purified to a
concentrated form and can be stored in a liquid or frozen form
under appropriate conditions.
1.7 "Final Product" means unlabelled final container containing
lyophilized Product.
1.8 "Finished Product" means Final Product and also labelled and
packaged.
1.9 "Specifications" mean the specifications to be enclosed hereto as
Appendices 3 for Product, Final Product and Finished Product
produced and supplied hereunder by THOMAE. These Appendices will be
agreed upon by the parties after the finalization of the Process.
1.10 "Process" shall be the final Process for manufacturing Product
developed and agreed by the parties according to the Contract
Research and Development Agreement.
1.11 All other terms used herein shall have the same meaning as defined
in the Contract Research and Development Agreement.
2. MANUFACTURING
2.1 (a) Subject to MEDIMMUNE's right to manufacture set forth in
Section 2.1 (b), MEDIMMUNE hereby appoints THOMAE as
MEDIMMUNE's exclusive agent to manufacture Product for
MEDIMMUNE and THOMAE hereby accepts such agreement
(b) Subject to MEDIMMUNE's right to manufacture Bulk Product
and/or Final Product and/or to have a third party to produce
Final Product and/or Finished Product from Bulk Product
produced by MEDIMMUNE, THOMAE will manufacture Product for
MEDIMMUNE
exclusively throughout the world during the full term of
this Agreement and according to the provisions of this
Agreement (incl. Rolling Forecasts and Minimum quantities) and
MEDIMMUNE
(PAGE 2)
will have and cause its licensees to have Product
manufactured by THOMAE throughout the world for the period of
this Agreement.
2.2 Subject to Section 3 below THOMAE undertakes to manufacture for
MEDIMMUNE the quantities of Product ordered by MEDIMMUNE within its
Capacity. All manufacture of Product hereunder will be made in
accordance with the Process and will be delivered in agreed form
suitably packed as specified in the Specifications.
2.3 All quantities of Product will be produced in a production facility
designated by THOMAE which is approved by the FDA and all of the
European Community regulatory authorities for commercial scale
production and deliveries.
To the extent that MEDIMMUNE requests that THOMAE secure regulatory
approval of the manufactured Product in other countries, then
THOMAE shall seek such regulatory approval of its production
facility unless such approval would require change in the
production facility. MEDIMMUNE shall pay any additional costs for
such approval. If changes are required by the respective authority
and if THOMAE does not agree to make such changes at MEDIMMUNE's
expense, then MEDIMMUNE shall have the right to seek a third party
manufacturer for the respective country(ies).
THOMAE shall take reasonable efforts to secure approval of THOMAE's
manufacturing facility by the FDA and the respective European
regulatory authority and THOMAE's obligations under Section 2.1
above are subject to such approval as the case may be.
2.4 Rolling Forecasts
Beginning as of March 10th, 1998 and by the 10th of the last month
of each quarter MEDIMMUNE will provide THOMAE with a 3 (three)
years Product forecast planning horizon for Final Product and
Finished Product or an update thereof . The planning horizon shall
start the first day of the fourth month after the first forecast
which shall be July 1st 1998 or an update thereof.
The rolling forecasts are to be broken down to single months.
The forecast for the first year (months 1-12) are firm orders and
cannot be changed.
The forecast for the second year (months 13-24) is a partly binding
forecast which means that the forecast can fully be changed within
this period as follows:
the forecast be increased within the Capacity, but is limited to
the following restrictions when decreased:
months 13-15 the forecast can be reduced by
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
months 16-18 the forecast can be reduced by
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(PAGE 3)
months 19-21 the forecast can be reduced by
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
months 21-24 the forecast can be reduced by
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
The forecast for the third year (months 25-36) is a non-binding
forecast.
The rolling forecasts (including firm orders) for Final Product and
Finished Product are laid down in Appendix 2.
2.5 THOMAE shall use reasonable efforts to manufacture and deliver to
MEDIMMUNE all quantities of the Product beyond the binding
forecasts at MEDIMMUNE's request within its Capacity.
2.6 THOMAE shall make deliveries by the 10th day of the month for which
a firm order is made.
2.7 Minimum quantities
Provided that the Product is approved in the USA, beginning January
1st 1999, the minimum quantity of Product to be ordered for
manufacture on behalf of MEDIMMUNE each calendar year is
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
If the quantity falls below the minimum quantity of (CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED) annually, THOMAE will charge
MEDIMMUNE an annual surcharge according to Article 5.2.
2.8 Exclusivity/Competition
During the term of this Agreement, THOMAE agrees that it will not
manufacture Product for a third party nor shall THOMAE assist any
third party with respect to development or manufacture of a
monoclonal antibody against RSV, except where THOMAE is granted
marketing rights to such a monoclonal antibody.
3. QUALITY / WARRANTY / LIABILITY / INDEMNIFICATION
3.1 Warranty/Limitation
THOMAE warrants that the Product to be manufactured by THOMAE here
under corresponds to the Specifications and shall be produced
according to current GMP standard and in accordance with all
applicable laws, rules and regulations in the country where
produced.
The Product shall be delivered free and clear of liens and claims
which affect title.
THOMAE makes no other warranty of any kind, express or implied.
(PAGE 4)
3.2 Tests of the Product and agreed upon Audits
MEDIMMUNE shall have the right to carry out agreed upon customary
tests of the Product and agreed upon audits at reasonable times, of
the premises and facilities where THOMAE performs work under this
Agreement, and of the premises where it stores raw materials,
auxiliary materials, intermediates, packing materials for the
Product and the Product itself. The agreed upon tests of the
Product shall be included in Appendix 3 hereto.
3.3 Defective Product (including loss and inaccurate quantity)
Claims on account of quantity, quality, loss or damages to the
Product shall be made by MEDIMMUNE in writing within 90 (ninety)
days following receipt thereof, and THOMAE's liability for damages
for such claims shall in no event exceed the manufacturing price or
replacement of goods for the particular shipment with respect to
which such claims are made. No Product will be returned to THOMAE
without THOMAE's written permission.
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
3.4 Indemnification by MEDIMMUNE
In accordance with all applicable law MEDIMMUNE shall be
responsible for, and hold THOMAE harmless from any damage, loss,
cost or expense relating to third party claims or suits arising
from the packaging, use, marketing or sale of the Product by
MEDIMMUNE, or its licensees or other authorized persons or
entities, other than those which arise out of a breach of warranty
by THOMAE and those which arise out of gross negligence or willful
misconduct of THOMAE or its officers, employees or agents, and
provided that upon receipt of notice by THOMAE of any claims or
suits relating to such use or sale of the Product, THOMAE shall
notify MEDIMMUNE thereof without delay and shall permit MEDIMMUNE
to handle such claims or suits at the cost and discretion of
MEDIMMUNE including but not limited to defense, settlement and
compromise thereof.
3.5 Infringement of intellectual property rights
With respect to the Process MEDIMMUNE shall be responsible for and
hold THOMAE harmless from any third party claim of infringement of
its intellectual property rights from a third party based upon
THOMAE's contractual activities hereunder.
3.6 Limitation of Warranty / Liability
Except as provided in Article 3.1 above THOMAE makes no warranty of
any kind, express or implied.
Except for willful misconduct THOMAE shall not be liable for any
lost profits or any special, incidental or consequential damages.
(PAGE 5)
3.7 Delivery/Risk of Loss
THOMAE shall deliver or arrange for the delivery of the Product
manufactured for MEDIMMUNE to a carrier designated by MEDIMMUNE on
the basis of EXW THOMAE's plant in Biberach, in accordance with
Incoterms 1990 as published by the International Chamber of
Commerce.
Title to Product manufactured hereunder shall remain with
MEDIMMUNE and risk of loss of Product shall remain with THOMAE
until delivery to the carrier as set forth in the next sentence.
THOMAE's liability as to risk of loss or damage during
transportation thereof shall cease upon delivery of the Product in
good condition to the carrier at THOMAE's plant in Biberach
designated by MEDIMMUNE.
3.8 Indemnification by THOMAE
THOMAE shall indemnify, defend and hold MEDIMMUNE and its officers,
employees and agents harmless from and against all third party
losses, damages, costs and expenses (including, without limitation,
reasonable attorneys` fees), including injury to persons or damage
to property, resulting from any breach of the warranties made by
THOMAE under this Agreement or which arise out of and are proved to
be directly associated with the gross negligence or willful
misconduct of THOMAE or its officers, employees or agents in
carrying the obligations under this Agreement and provided that
upon receipt of notice by MEDIMMUNE of any claims or suits relating
to such use or sale of the Product, MEDIMMUNE shall notify THOMAE
thereof without delay and shall permit THOMAE to handle such claims
or suits at the cost and discretion of THOMAE including but not
limited to defense, settlement and compromise thereof.
3.9 Superiority
No provision which may purport to impose different conditions upon
MEDIMMUNE or THOMAE, nor any other modification of this Agreement,
will be of any force and effect, unless in writing and signed by
both parties claimed to be bound thereby. In the event of any
inconsistencies the terms of this Agreement shall govern.
4. SUPPORT REGARDING POST LICENSING ISSUES
THOMAE is willing to support MEDIMMUNE with regard to post
licensing issues (e. g. possible registration-issues in the various
countries) on commercial conditions to be agreed upon.
5. PRICE AND PAYMENT
(PAGE 6)
5.1 Product-price
The Product-price for manufacturing the Product shall be calculated
according to the scheme laid down in Appendix 1. The basic
assumptions of that scheme as titer, yield, and production scale
will be reassessed after scale-up of the Process to the commercial
scale and then be valid for this Agreement.
5.2 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
5.3 Payment Conditions
The Product-price for Product delivered to MEDIMMUNE or according
to MEDIMMUNE's instructions shall be payable by MEDIMMUNE within
30 (thirty) days after receipt of Product by the respective party
in DEM (Deutsche Mark) by wire transfer to an account to be
nominated by THOMAE.
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
5.4 Currency
"Deutsche Mark" or "DEM" means the lawful currency for the time
being of Germany or, in case of the implementation of the European
Monetary Union, the Euro on the basis of the official conversion
rate.
5.5 Prices Adjustments
(a)The Product-price mentioned in Article 5.1 above (basis
01.09.1997) may be increased by THOMAE effective at the
beginning of a calendar year (for the first time effective
January 1st 2000) by (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) per year for increasing costs of labour and raw
material.
(b) In case any cost (in terms of cost of labour, material and/or
regulatory requirements for producing Bulk Product, Final
Product and/or Finished Product increases by more than
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) in a given calendar
year, which THOMAE must demonstrate, the parties shall agree
upon the direct amount of such increase based on good faith
negotiations to be effective on January 1st of the calendar
year
following the more than (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) increase and the price for Product in such calendar
year shall be increased for such amount, provided that the
price increase taken by THOMAE under Article 5.5 (a) shall be
credited toward any corresponding increase under this Article
5.5 (b).
(c)In case of a change of the Process which influences the basic
assumptions the price shall be recalculated according to
Appendix 1.
(PAGE 7)
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
6. CONFIDENTIALITY
6.1 THOMAE shall not disclose MEDIMMUNE Confidential Information to any
person other than its employees or employees of affiliated
companies of the Boehringer Ingelheim group who have a need to know
such information in order to perform their duties in carrying out
the work hereunder and who have an obligation to maintain the
confidentiality thereof as provided herein.
6.2 MEDIMMUNE shall not disclose any THOMAE Confidential Information to
any person other than
(a)its employees or consultants who are bound by similar
obligations of confidentiality and who have a need to know such
information in order to provide direction to THOMAE or evaluate
the results of the work, or
(b)regulatory authorities, for example, the FDA, that require such
information in order to review an IND, BLA or other regulatory
filing. THOMAE will be informed and must agree prior to filing
of any THOMAE Confidential Information to regulatory
authorities. In these cases where THOMAE restricts MEDIMMUNE's
ability to file THOMAE Confidential Information, THOMAE agrees
to provide the Confidential Information directly to the
regulatory authorities and will provide a letter of
authorization for cross-reference to MEDIMMUNE.
(c)persons or entities that manufacture Product for MEDIMMUNE
after termination of this Agreement or during this Agreement as
permitted herein.
6.3 The obligations of confidentiality applicable to MEDIMMUNE
Confidential Information and THOMAE Confidential lnformation shall
not apply to any information that is:
(a)known publicly or becomes known publicly through no fault of
the recipient;
(b) learned by the recipient from a third party entitled to
disclose it;
(c)developed by the recipient independently of information
obtained from the disclosing party;
(d)already known to the recipient before receipt from the
disclosing party, as shown by its prior written records;
(PAGE 8)
(e)required to be disclosed by law, regulation or the order of a
judicial or administrative authority; or
(f)released with the prior written consent of the disclosing
party.
7. LICENSE
7.1 Use of MEDIMMUNE Cell Line and Intellectual Property
(a) MEDIMMUNE and THOMAE hereby acknowledge and agree that
MEDIMMUNE is providing Cell Line, Process and MEDIMMUNE
Confidential Information to THOMAE for use by THOMAE on behalf
of and for the benefit of MEDIMMUNE for the purposes of this
Agreement, that THOMAE will make use therof solely for such
purposes and that MEDIMMUNE hereby consents to such use.
(b) MEDIMMUNE hereby delegates to THOMAE as agent for MEDIMMUNE the
authority to manufacture Product solely on behalf of and for
the benefit of MEDIMMUNE.
7.2 Except as granted under this Agreement, no right or license, either
express or implied, under any patent or proprietary right is
granted hereunder by virtue of the disclosure of MEDIMMUNE
Confidential Information or THOMAE Confidential Information.
8. TERM AND TERMINATION
8.1 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
8.2 To the extent permitted by law, if either party shall become
insolvent or shall make assignment for the benefit of creditors, or
proceedings in voluntary bankruptcy shall be instituted on behalf
of or against a party or a receiver or trustee of all, or
substantially all of the property of a party shall be appointed,
the other party shall be entitled to terminate this Agreement by
giving written notice to this effect to the first party whereupon
this Agreement shall so terminate, unless such situation is
rectified within a period of 60 (sixty) days.
8.3 Either party may terminate this Agreement for any material breach
of this Agreement, if such breach is not cured within 90 (ninety)
days following receipt by the party committing the breach of
written notice of the intent to terminate. Such termination shall
become effective immediately upon further notice to the defaulting
party.
(PAGE 9)
8.4 Premature Termination
8.4.1 This Agreement may be terminated by MEDIMMUNE at any time if
MEDIMMUNE shall withdraw the Product from all relevant markets.
8.4.2 In this case MEDIMMUNE will pay to THOMAE the Product-price for the
firm ordered quantities (see Article 2.4 above) of the Product.
8.4.3 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
8.4.4 These payments shall be due within 1 (one) month after receipt by
THOMAE of the notice of premature termination from MEDIMMUNE and
receipt by MEDIMMUNE of the respective invoice of THOMAE.
8.5 Introduction of the Euro
The introduction of the Euro as the legal currency or legal tender
in Germany (see Article 5.4 above) shall in no way affect the
validity of this Agreement and shall not entitle any party hereto
to terminate, or to require any amendment to, this Agreement.
9. MISCELLANEOUS
9.1 Force Majeure.
Neither party shall be in breach of this Agreement if there is any
failure of performance under this Agreement (except for payment of
any amounts due hereunder) occasioned by any act of God, fire, act
of government or state, war, civil commotion, insurrection,
embargo, prevention from or hindrance in obtaining energy or other
utilities, labor disputes of whatever nature or any other reason
beyond the control of either party; provided, however, that if a
party is not able to perform becomes of a force majeure pursuant to
this Article 8.1 for a period of 6 (six) months, the other party
may terminate this Agreement with immediate effect.
9.2 Publicity.
No press release or other form of publicity regarding the work
performed hereunder or this Agreement shall be permitted by either
party to be published unless both parties have indicated their
consent to the form of the release in writing.
Nothing in this Article 9.2 shall prevent the parties from
disclosing this Agreement as required by applicable laws, rules or
regulations.
(PAGE 10)
9.3 Notices.
Any notice required or permitted to be given hereunder by either
party shall be in writing and shall be (i) delivered personally,
(ii) sent by registered mail, return receipt requested, postage
prepaid or (iii) delivered by facsimile with immediate telephonic
confirmation of receipt, to the addresses or facsimile numbers set
forth below:
<TABLE>
<S> <C>
If to THOMAE: Dr. Karl THOMAE GmbH
Birkendorfer Strabe 65
88397 Biberach an der Riss
Federal Republic of Germany
Attention: Prof. Dr. Rolf G. Werner
Fax: 0 73 51/54-51 31
Phone: 0 73 51/54-48 00
If to MEDIMMUNE: MEDIMMUNE Inc.
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
U.S.A.,
Attention: President
Fax: 301/527-4201
Phone: 301/417-0770
</TABLE>
Each notice shall be deemed given (i) on the date it is received if
it is delivered personally, (ii) 3 days after the date it is sent
by Federal Express, UPS,DHL, MSAS, World Courier or similar service
if receipt is immediately confirmed in writing (iii) on the date it
is received if it is sent by facsimile with immediate telephonic
confirmation of receipt.
9.4 Applicable Law/Jurisdiction.
This Agreement shall be governed by and construed in accordance
with the laws of Germany without regard to its choice of law
principles. The courts of the place of domicile of THOMAE shall
have exclusive jurisdiction over all legal matters and proceedings
hereunder.
9.5 Compliance
with Laws.
THOMAE shall
perform the work hereunder in conformance with current GMP, as
applicable, and all German and/or EEC laws, ordinances and
governmental rules or regulations pertaining thereto.
(PAGE 11)
9.6 Relationship
THOMAE shall not incur any liabilities on behalf of MEDIMMUNE nor
pledge the credit of MEDIMMUNE nor make any representations or
warranties on behalf of MEDIMMUNE nor hold itself out to third
parties as having any such rights.
MEDIMMUNE shall not incur any liabilities on behalf of THOMAE nor
pledge the credit of THOMAE nor make any representations, or
warranties on behalf of THOMAE nor hold itself out to third parties
as having any such rights.
9.7 Waiver.
No waiver of any term, provision or condition of this Agreement
whether by conduct or otherwise in any one or more instances shall
be deemed to be or construed as a further or continuing waiver of
any such term, provision or condition or of any other term,
provision or condition of this Agreement.
9.8 Severability.
If any provision of this Agreement is held to be invalid or
unenforceable by a court of competent jurisdiction all other
provisions shall continue in full force and effect. The parties
hereby agree to attempt to substitute for any invalid or
unenforceable provision a valid or enforceable provision which
achieves to the greatest extent possible the economic legal and
commercial objectives of the invalid or unenforceable provision.
9.9 Entirety.
This Agreement, including any exhibits and appendices attached
hereto and referenced herein , constitutes the full understanding
of the parties and a complete and exclusive statement of the terms
of their agreement, and no terms, conditions, understandings or
agreements purporting to modify or vary the terms thereof shall be
binding unless they are hereafter made in writing and signed by
both parties.
9.10 Assignment.
This Agreement shall be binding upon the successors and assigns of
the parties and the name of a party appearing herein shall be
deemed to include the names of its successors and assigns provided
always that nothing herein shall permit any assignment by either
party. However, THOMAE may assign this Agreement to an affiliated
company taking over the operative biotech business of THOMAE and
MEDIMMUNE may assign this Agreement in the case of a merger or
acqusition or transfer of its assets related to this Agreement to a
third party without the prior written consent of THOMAE.
(PAGE 12)
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives on the day and year first
above written.
<TABLE>
<S> <C> <C>
Gaithersburg, Biberach,
MEDIMMUNE, INC. DR. KARL THOMAE GMBH
ppa.
/s/David M. Mott /s/Dr. Jacob /s/Dr. H. Michelberger
David M. Mott Dr. Jacob Dr. H. Michelberger
(Member of Board) (Head of Legal Department)
</TABLE>
Appendix 1:
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 2:
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Appendix 3:
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(PAGE 13)
EXHIBIT 10.79
DISTRIBUTION AGREEMENT
This Distribution Agreement ("AGREEMENT") is entered into as of
November 26, 1997 (the "Effective Date") by and between MedImmune, Inc., a
Delaware corporation, having its principal place of business at 35 West
Watkins Mill Road, Gaithersburg, MD 20878 ("MEDIMMUNE") and Abbott
International, Ltd., a Delaware corporation, having its principal place of
business at 200 Abbott Park Road, Abbott Park, IL 60064.
WITNESSETH
WHEREAS, the parties hereto desire that ABBOTT engage in the
distribution in the TERRITORY (as hereinafter defined) of the PRODUCT (as
hereinafter defined); and
WHEREAS, MEDIMMUNE and ABBOTT desire to set forth in this AGREEMENT
the terms and conditions of such distribution.
NOW, THEREFORE, the parties hereto agree as follow:
1. DEFINITIONS
1.1 "ABBOTT" shall mean Abbott International, Ltd., and its AFFILIATES.
1.2 "AFFILIATE" shall mean any corporation or other business entity that
directly or indirectly controls, is controlled by, or is under common
control with a PARTY. Control means ownership or other beneficial
interest in fifty percent (50%) or more of the voting stock or other
voting interest of a corporation or other business entity. In
addition, the following entities are AFFILIATES of ABBOTT: ABBOTT
Laboratories (India) Ltd., and ABBOTT Laboratories Nigeria Limited.
1.3 "AGENCY" shall mean any governmental or regulatory authority in the
TERRITORY responsible for granting any health or pricing approvals or
registrations necessary before any PRODUCT may be marketed in the
TERRITORY.
1.4 "CALENDAR QUARTER" shall mean the period of three consecutive calendar
months ending on March 31, June 30, September 30 or December 31, as
the case may be.
1.5 "CONTRACT YEAR" shall mean July 1 of a calendar year through June 30
of the following calendar year.
(PAGE 1)
1.6 "COST OF GOODS" shall mean the fully allocated cost to manufacture
PRODUCT determined in a reasonable manner consistent with MEDIMMUNE's
normal internal accounting practices and in accordance with generally
accepted accounting principles ("GAAP") which includes but is not
limited to: (i) direct labor (salaries, wages and employee benefits);
(ii) direct materials; (iii) operating costs of building and equipment
used in connection with the manufacture of PRODUCT, (iv) allocated
depreciation and repairs and maintenance; (v) quality and in-process
control; (vi) an allocation of overhead costs incurred in connection
with the manufacturing of PRODUCT, including: raw material supply and
manufacturing administration and management; materials management,
storage and handling; and manufacturing and employee training;
(vii) any charges for obsolescence, out of date product, spoilage,
scrap or rework costs; and (viii) the cost of packaging and labeling,
if applicable. To the extent that the manufacturing of PRODUCT or any
component thereof is performed for MEDIMMUNE by a THIRD PARTY, amounts
paid to such THIRD PARTY shall be included in COST OF GOODS.
1.7 "FIRM ORDER" shall have the meaning set forth in Section 5.1
1.8 "MAJOR MARKET" shall mean each of the following countries: United
Kingdom, France, Germany, Italy, Spain, Canada and Japan.
1.9 "MARKETING APPROVAL" shall mean all governmental approvals required to
market and sell the PRODUCT in any given country of the TERRITORY.
1.10 "NET SALES" shall mean with respect to PRODUCT that sum determined by
deducting from the gross amount invoiced for PRODUCT sold for use in
the TERRITORY in an arms length transaction to customers who are not
AFFILIATES of ABBOTT: (i) transportation charges to the extent
included in the billing; (ii) trade, quantity or cash discounts, to
the extent allowed; (iii) credits or allowances, if any, given or made
on account of price adjustments, or returns, to the extent made; (iv)
any and all Federal, state or local government rebates, whether in
existence now, or enacted at any time during the term of this
AGREEMENT, to the extent made; (v) any tax, excise or other
governmental charge upon or measured by the production, sale,
transportation, delivery or use of the PRODUCT to the extent
separately billed; (vi) a reasonable allowance for bad debt; in each
case determined in accordance with ABBOTT's normal internal accounting
practices and GAAP.
1.11 "PARTY(IES) shall mean ABBOTT and/or MEDIMMUNE, as the case may be.
1.12 "PRODUCT" shall mean the humanized antibody directed against
respiratory syncytial virus ("RSV") and known as MEDI-493
(palivizumab).
(PAGE 2)
1.13 "SPECIFICATIONS" shall mean, with respect to the PRODUCT, the
specifications, test procedures, process descriptions, and other
information relating to such PRODUCT. The current SPECIFICATIONS are
attached as Schedule A.
1.14 "TERRITORY" shall mean all countries of the world except the United
States of America and its territories, possessions and commonwealths.
1.15 "THIRD PARTY" shall mean a party other than ABBOTT, MEDIMMUNE or their
AFFILIATES.
1.16 "TRADEMARK" shall mean the trademark(s) for the PRODUCT, owned by
ABBOTT, all in accordance with Section 8.
1.17 "UNIT SALE PRICE" shall mean total NET SALES of PRODUCT for a defined
period divided by the number of units of PRODUCT included in NET SALES
for the defined period. The UNIT SALE PRICE shall be expressed in
U.S. Dollars for each type of vial sold.
2. APPOINTMENT
2.1 (a) MEDIMMUNE hereby appoints ABBOTT as the exclusive distributor of
the PRODUCT in the TERRITORY and ABBOTT accepts such appointment.
(b) ABBOTT agrees that ABBOTT (i) will only sell and distribute
PRODUCT in countries of the TERRITORY as to which ABBOTT maintains
distribution rights under this AGREEMENT ; (ii) will only sell in the
TERRITORY PRODUCT which is purchased from MEDIMMUNE; and (iii) will
only sell PRODUCT in the TERRITORY under the TRADEMARK.
2.2 ABBOTT agrees that ABBOTT will not without MEDIMMUNE'S written consent
discount the selling price of PRODUCT in order to promote the sales of
other products of ABBOTT and that it will conduct all price
negotiations in good faith on an arms length basis.
2.3 ABBOTT shall prepare all labeling and packaging for PRODUCT in
conformance with regulatory guidelines in each country of the
TERRITORY and which shall be satisfactory in form and substance to
MEDIMMUNE, which labeling shall clearly indicate that the PRODUCT is
being distributed by ABBOTT. ABBOTT shall submit such labeling and
packaging for MAJOR MARKET countries to MEDIMMUNE for approval, which
approval shall not unreasonably be withheld. MEDIMMUNE shall be
deemed to have approved such submitted labeling and packaging unless
MEDIMMUNE provides ABBOTT written objection thereto within twenty (20)
days after receipt thereof. Upon MEDIMMUNE's reasonable request or if
the proposed PRODUCT labeling and packaging for a non-MAJOR MARKET
country differs materially from the labeling and packaging previously
(PAGE 3)
approved by MEDIMMUNE pursuant to this Section 2.3, ABBOTT shall
submit the labeling and packaging for such non-MAJOR MARKET country to
MEDIMMUNE for approval, which approval shall not unreasonably be
withheld. MEDIMMUNE shall be deemed to have approved such submitted
labeling and packaging unless MEDIMMUNE provides ABBOTT written
objection thereto within twenty (20) days after receipt thereof.
2.4 ABBOTT agrees not to sell PRODUCT through subdistributors without the
written consent of MEDIMMUNE, which consent shall not be unreasonably
withheld. If such consent is granted, ABBOTT shall remain fully
liable and responsible to MEDIMMUNE for the activities of a
subdistributor appointed by ABBOTT.
3. PURCHASE OF PRODUCTS
3.1 (a) Subject to Section 3.4 hereof, MEDIMMUNE shall sell and ABBOTT
shall purchase an amount of PRODUCT equal to ABBOTT's requirements in
the TERRITORY. ABBOTT shall pay the price for such PRODUCT as set
forth in Section 3.2 according to the volume purchased.
(b) Subject to availability of PRODUCT from MEDIMMUNE, ABBOTT shall
maintain sufficient inventories of PRODUCT to enable ABBOTT to
effectively satisfy demand for PRODUCT in the TERRITORY.
3.2 (a) The price of PRODUCT shall be the following percentages of NET
SALES of PRODUCT sold by ABBOTT or its AFFILIATES:
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(ii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(b) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
3.3 (a) MEDIMMUNE will invoice ABBOTT for PRODUCT shipped and ABBOTT
shall pay as follows:
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(A) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(B) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(C) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(ii) The price set forth in Section 3.2 shall be calculated
and paid quarterly within forty-five (45) days following the end
of each CALENDAR QUARTER with the amount paid under Section
3.3(a)(i) for PRODUCT sold in a CALENDAR QUARTER (on a first in
(PAGE 4)
first out basis) being credited against the actual amount due
under this Section 3.3 (a)(ii) for such CALENDAR QUARTER. In the
event that the credit exceeds the amount due for a CALENDAR
QUARTER, then such excess amount shall be credited until
exhausted against amounts due under this Section 3.3(a)(ii) for
subsequent CALENDAR QUARTERS, but only if such excess results
from payments which are made based on UNIT SALE PRICE. If at the
end of a CONTRACT YEAR a carry over credit exists, then MEDIMMUNE
shall promptly pay to ABBOTT an amount equal to such carry over
credit. Each such quarterly payment shall be supported by the
accounting prescribed in Section 3.3(b). Whenever for the
purpose of calculating payment, conversion from any foreign
currency shall be required, such conversion shall be completed
for each month of the CALENDAR QUARTER as follows: (CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED), using central bank fixing rates in
countries where available and open market rates otherwise.
(iii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(iv) An example using the formulas set forth in this Section
3.3(a) is attached hereto as Schedule B.
(b) With each quarterly payment, ABBOTT shall deliver to MEDIMMUNE a
full and accurate accounting to include at least the following
information:
(i) Quantity of each PRODUCT sold and/or withdrawn by
transaction type (by country) by ABBOTT, and its AFFILIATES and
if applicable, it's subdistributors.
(ii) Total amount invoiced for each PRODUCT (by country) in
local currency.
(iii)Calculation of NET SALES (by country) in local
currency.
(iv) Exchange rates for converting each local currency into
U.S. Dollars for each month of the CALENDAR QUARTER.
(v) NET SALES in U.S. dollars in each country.
(vi) Total compensation payable to MEDIMMUNE.
(vii)Credits taken by ABBOTT pursuant to Section 3.3(a)(ii).
(c) Within forty five (45) days following each CONTRACT YEAR, ABBOTT
shall provide MEDIMMUNE an inventory reconciliation for such CONTRACT
(PAGE 5)
YEAR.
(d) ABBOTT shall keep, and shall cause each of its AFFILIATES to
keep, and if applicable, its subdistributors, full and accurate books
of account containing all particulars that may be necessary for the
purpose of calculating all payments payable to MEDIMMUNE. Such books
of account shall be kept at their principal place of business and,
with all necessary supporting data shall, for the two (2) years next
following the end of the calendar year to which each shall pertain be
open for inspection by an independent certified accountant selected by
MEDIMMUNE and reasonably acceptable to ABBOTT upon reasonable notice
during normal business hours at MEDIMMUNE's expense for the sole
purpose of verifying payments or compliance with this AGREEMENT, but
in no event more than once in each calendar year. All information and
data offered shall be used only for the purpose of verifying payments.
In the event that such inspection shall indicate that in any calendar
year that the payments which should have been paid by ABBOTT are at
least five percent (5%) greater than those which were actually paid by
ABBOTT, then ABBOTT shall pay the cost of such inspection. All
underpayments are immediately due and payable.
(e) MEDIMMUNE shall forward all invoices for PRODUCT ordered
hereunder to a U.S. location as designated by ABBOTT.
3.4 MEDIMMUNE shall use commercially reasonable efforts to satisfy
ABBOTT's requirements for PRODUCT. All PRODUCT shipped to ABBOTT
shall be manufactured in accordance with the SPECIFICATIONS.
MEDIMMUNE shall promptly advise ABBOTT of any proposed or required
changes to the SPECIFICATIONS. To the extent such changes require a
new or amended Product Registration, as defined herein, MEDIMMUNE and
ABBOTT shall cooperate and coordinate the adoption of such changes to
the SPECIFICATIONS so as to minimize any disruption of the marketing,
promotion and sale of PRODUCT in any country within the TERRITORY.
However, MEDIMMUNE's obligation to supply PRODUCT under Section 3.1
hereof shall at all times be subject to the condition that MEDIMMUNE
is able to obtain or make a sufficient supply of such PRODUCT for sale
both inside and outside of the TERRITORY. In the event that PRODUCT
available to MEDIMMUNE is in short supply, MEDIMMUNE shall notify
ABBOTT of such shortage as soon as possible. In the event there is a
short supply of PRODUCT and MEDIMMUNE cannot supply PRODUCT to ABBOTT
in an amount equal to ABBOTT's FIRM ORDER, then MEDIMMUNE shall
allocate available PRODUCT to ABBOTT in each month that such a
shortfall exists (and in each month thereafter until the shortfall to
ABBOTT is remedied) in an amount equal to the product of (i) the
amount of available PRODUCT for that month and (ii) a fraction the
numerator of which is the aggregate quantity of FIRM ORDERS made by
ABBOTT over the subsequent twelve (12) month period including the
(PAGE 6)
shortfall month and the denominator of which is the sum of (x) the
aggregate quantity of FIRM ORDERS made by ABBOTT over the subsequent
twelve (12) month period including the shortfall months and (y) the
aggregate quantity of PRODUCT over the same twelve (12) month period
required by MEDIMMUNE outside the TERRITORY by reference to FIRM
ORDERS placed with THIRD PARTY manufacturers for MEDIMMUNE's
requirements and the amount to be produced at a MEDIMMUNE facility for
MEDIMMUNE's requirements, in each case outside the TERRITORY.
3.5 ABBOTT agrees to use and distribute the PRODUCT only in accordance
with the terms, conditions and purposes of this AGREEMENT.
4. DELIVERY, PAYMENT AND RISK OF LOSS
4.1 (a) All payments under this AGREEMENT shall be remitted in
immediately available funds. Unless otherwise agreed between the
parties all payments shall be in U.S. Dollars.
(b) In the event that any payment due hereunder is not made when due,
the payment shall accrue interest beginning on the first day of the
month following the date when such payment was due, calculated at the
annual rate of the sum of (i) two percent (2%) plus (ii) the prime
interest rate quoted by Citibank, N.A., New York, New York, on the
date such payment is due, or on the date payment is made, whichever is
higher, the interest being compounded on the last day of each calendar
month; provided that in no event shall said annual rate exceed the
maximum legal interest rate for corporations. Such payment when made
shall be accompanied by all interest accrued. Said interest and the
payment and acceptance thereof shall not negate or waive the right of
MEDIMMUNE to any other remedy, legal or equitable, to which MEDIMMUNE
may be entitled because of the delinquency of the payment.
4.2 Title to PRODUCT sold hereunder, and risk of loss with respect to such
PRODUCT, shall pass to ABBOTT upon delivery of the PRODUCT to a
carrier designated by ABBOTT at the place at which PRODUCT is
manufactured. ABBOTT shall be responsible for the cost of freight and
insurance. Upon the passage of title, MEDIMMUNE's liability with
respect to risk of loss shall cease, and ABBOTT shall be the owner of
such PRODUCT for all purposes, including, without limitation, the
marketing, sale and setting of prices for the PRODUCT sold by ABBOTT
to its customers.
4.3 No provision on ABBOTT's purchase order forms which may purport to
impose different conditions upon the parties hereto shall modify the
terms of this AGREEMENT.
(PAGE 7)
4.4 After the sale of PRODUCT to ABBOTT, ABBOTT shall ship such PRODUCT
outside the country in which ABBOTT takes title.
5. FORECASTS AND ORDERS
5.1 (a) ABBOTT shall provide MEDIMMUNE on the tenth of the last month of
each quarter with a three-year product forecast planning horizon. The
rolling forecasts are to be broken down to single months. The
forecasts within the first year (month 1 through 12) are firm orders
and cannot be changed. The forecast for the second year (month 13
through 24) is a partly binding forecast which means that the forecast
can be changed within this period. The forecast can be increased, but
is limited to the following restrictions when decreased.
Month 13 - 15 -- the forecast can be reduced by
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Month 16 - 18 -- the forecast can be reduced by
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Month 19 - 21 -- the forecast can be reduced by
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Month 21 - 24 -- the forecast can be reduced by
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
The forecast for the third year (month 25 - 36) is
a non-binding forecast.
Notwithstanding the foregoing, MEDIMMUNE shall make every reasonable
effort to comply with unplanned changes in FIRM ORDERS, but shall not
be held liable for its inability to do so. In each FIRM ORDER for any
month, ABBOTT shall state, after consultation with MEDIMMUNE, a
reasonable delivery schedule for PRODUCTS to be delivered in that
month. With respect to calendar year 1998, the parties shall agree on
or before February 15, 1998, upon a FIRM ORDER for that calendar year
and the partly binding and non-binding estimates for the following
twenty four (24) months.
(b) Notwithstanding the foregoing, MEDIMMUNE reserves the right to
spread the supply of PRODUCT throughout a CONTRACT YEAR
(c) PRODUCT shall be provided to ABBOTT by MEDIMMUNE and shall be
ordered by ABBOTT in 50 mg or 100 mg vials; without labeling or
packaging. ABBOTT shall be responsible for the labeling and packaging
of PRODUCT, at ABBOTT's sole cost and expense.
(d) In any month for which ABBOTT places an order, the order shall be
no less than 1000 vials of PRODUCT, and MEDIMMUNE shall only be
required to deliver PRODUCT to ABBOTT once in each month.
(PAGE 8)
5.2 ABBOTT shall have sixty (60) days from receipt of any delivery of
PRODUCT to examine such PRODUCT. ABBOTT shall promptly notify
MEDIMMUNE of any defective PRODUCT and shall return to or otherwise
dispose of any defective shipments in accordance with MEDIMMUNE'S
instructions at MEDIMMUNE'S cost and expense. Subject to Section 3.4
MEDIMMUNE shall provide for replacement delivery within one (1) month
from existing production stock of the THIRD PARTY manufacturer, if
available, and if not available, within twelve (12) months therefrom.
Such replacement shall be ABBOTT's sole and exclusive remedy with
respect to defective PRODUCT delivered by MEDIMMUNE hereunder.
6. DILIGENCE
6.1 MEDIMMUNE shall, as soon as practical after execution of this
AGREEMENT provide ABBOTT with all data and information which MEDIMMUNE
has in its possession with respect to PRODUCT which is necessary for
ABBOTT to obtain appropriate PRODUCT approvals in the TERRITORY, which
data and information includes, but is not limited to, the PRODUCT BLA
filing with the United States Food and Drug Administration. MEDIMMUNE
shall provide ABBOTT reasonable technical assistance and cooperation
in connection with ABBOTT's efforts in obtaining regulatory approval
of PRODUCT in each MAJOR MARKET.
6.2 At its sole cost and expense, ABBOTT shall exert best efforts to
obtain in each MAJOR MARKET all approvals which are required to enable
ABBOTT to sell and distribute PRODUCT in each MAJOR MARKET including
but not limited to regulatory and pricing approvals. In the event
that clinical trial(s) is required to obtain or maintain such
approvals in a country(ies) of the TERRITORY, then ABBOTT shall have
the right to terminate this AGREEMENT in such country(ies) by written
notice to MEDIMMUNE within the following time periods after ABBOTT is
notified that clinical trial(s) for PRODUCT is required in such
country:
(i) within thirty (30 ) days if ABBOTT's good faith
estimate of the cost to complete such clinical trial is less than
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED);
(ii) within sixty (60 ) days if ABBOTT's good faith estimate
of the cost to complete such clinical trial is greater than
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED);
(iii)within ninety (90 ) days if ABBOTT's good faith
estimate of the cost to complete such clinical trial is greater
than (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED);
(PAGE 9)
(iv) within one hundred twenty (120 ) days if ABBOTT's good
faith estimate of the cost to complete such clinical trial is
greater than (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED);
With respect to a country(ies) in the TERRITORY in which this
AGREEMENT is terminated pursuant to this Section 6.2, ABBOTT
hereby grants to MEDIMMUNE a royalty free license to use any and
all technical, clinical and regulatory information, filings and
licenses of ABBOTT with respect to such PRODUCT in such
country(ies) and ABBOTT shall effect prompt transfer thereof to
MEDIMMUNE.
6.3 ABBOTT shall take any and all necessary steps to maintain regulatory
and pricing approval for PRODUCT in each country of the TERRITORY in
which it is obtained.
6.4 Prior to initiating a clinical trial with respect to PRODUCT, the
PARTY who is to conduct such clinical trial shall provide the other
PARTY with an opportunity to review the clinical trial proposal and
such PARTY shall consider any advice and suggestions of the other
PARTY with respect to such clinical trial. In the case of a clinical
trial to be conducted by or on behalf of ABBOTT with respect to
PRODUCT, such clinical trial shall not be initiated without the
written consent of MEDIMMUNE, which consent shall not be unreasonably
withheld.
6.5 In the event that, notwithstanding ABBOTT's best efforts, ABBOTT does
not achieve the following milestones in the TERRITORY, MEDIMMUNE may,
in its sole discretion, convert the exclusive rights granted herein to
non-exclusive rights:
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
6.6 In the event that ABBOTT does not have a significant interest in
obtaining regulatory approval of and marketing PRODUCT in any country
of the TERRITORY, ABBOTT shall notify MEDIMMUNE. If MEDIMMUNE
requests in writing that ABBOTT indicate whether or not ABBOTT has an
interest in marketing PRODUCT in a country(ies) of the TERRITORY,
within thirty (30) days thereafter ABBOTT shall notify MEDIMMUNE as to
whether or not ABBOTT has such an interest. In the event that ABBOTT
notifies MEDIMMUNE that it does not have a significant interest in
marketing PRODUCT in any country(ies) of the TERRITORY, MEDIMMUNE may
terminate ABBOTT's rights in such country(ies) of the TERRITORY,
provided that the marketing in such country(ies) does not adversely
affect marketing of PRODUCT in a country in which ABBOTT is seeking or
has obtained regulatory approval.
(PAGE 10)
6.7 (a) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED):
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
(ii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
(iii)(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
(iv) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED):
(x) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
(y) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
(z) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
(b) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
6.8 During the term of this AGREEMENT, ABBOTT shall exercise its best
efforts to promote the use and sale of PRODUCT in the MAJOR MARKETS of
the TERRITORY and in each country of the TERRITORY in which PRODUCT is
approved for sale and shall maintain, at its own cost and expense, an
adequate sales organization for this purpose. ABBOTT shall keep
MEDIMMUNE advised of general market, economic and regulatory
developments that may affect the sale of PRODUCT.
7. PAYMENTS
In consideration for the clinical and other data provided by MEDIMMUNE
in support of regulatory approvals in the TERRITORY, ABBOTT will make
the following payments to MEDIMMUNE:
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED);
(ii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED);
(iii)(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED);
(iv) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED); and
(v) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
8. OTHER RESPONSIBILITIES OF ABBOTT
8.1 In distributing the PRODUCT in the TERRITORY, ABBOTT will comply with
all provisions of the laws, rules and regulations applicable in the
TERRITORY. ABBOTT shall promptly notify MEDIMMUNE of any changes in
such provisions.
(PAGE 11)
8.2 ABBOTT agrees not to export PRODUCT outside the TERRITORY without the
express permission of MEDIMMUNE.
8.3 ABBOTT shall supply MEDIMMUNE with a market progress report each
CALENDAR QUARTER indicating the quantities of the PRODUCT in inventory
and sales of the PRODUCT in each country of the TERRITORY.
8.4 The appointment of ABBOTT hereunder shall not create a joint venture,
or any employer-employee relationship or principal-agency
relationship, and nothing under this AGREEMENT shall be deemed to
authorize ABBOTT to act for, represent, or bind MEDIMMUNE or any of
its AFFILIATES.
8.5 (a) During the term of this AGREEMENT, it is contemplated that a
PARTY will disclose to the other PARTY proprietary and confidential
technology, specifications, technical information and the like which
are owned or controlled by a PARTY ("Confidential Information"). The
receiving PARTY agrees to retain the disclosing PARTY's Confidential
Information in confidence and not to disclose any such Confidential
Information to a THIRD PARTY without the prior written consent of the
disclosing PARTY and to use the disclosing PARTY's Confidential
Information only for the purposes of this AGREEMENT. The obligations
of confidentiality will not apply to Confidential Information which:
(i) was known to the receiving PARTY or generally known to
the public prior to its disclosure hereunder;
(ii) subsequently becomes known to the public by some means
other than a breach of this AGREEMENT;
(iii)is subsequently disclosed to the receiving PARTY by a
third party having a lawful right to make such disclosure;
(iv) is required by law or bona fide legal process to be
disclosed provided that the receiving PARTY takes all reasonable
steps to restrict and maintain confidentiality of such disclosure
and provides reasonable prior notice to the disclosing PARTY; or
(v) is approved for release by the PARTIES.
(b) Upon termination or expiration of this AGREEMENT, each PARTY
shall return to the other PARTY all tangible forms of confidential
information furnished by the other PARTY, including all copies thereof
and all memoranda of oral disclosure, except that each PARTY may
retain one copy in its files to ensure compliance with any legal
obligations.
(PAGE 12)
(c) This Section shall survive until the tenth anniversary of the
termination or expiration of this AGREEMENT.
8.6 During the term of this AGREEMENT and for one year thereafter, ABBOTT
agrees that neither ABBOTT nor an AFFILIATE of ABBOTT shall research,
clinically develop, promote, market or sell directly or indirectly or
assist another party in marketing or selling in the TERRITORY any
immunoglobulin or antibody product (or antibody derivative) for
prevention and/or treatment of respiratory syncytial virus disease.
8.7 ABBOTT agrees to provide MEDIMMUNE with ABBOTT's annual U.S. Dollar
sales forecast for PRODUCT to be sold in the TERRITORY for the sole
purpose of assisting MEDIMMUNE in its financial planning.
9. TRADEMARKS, LOGOS AND PATENTS
9.1 ABBOTT shall propose to MEDIMMUNE trademarks for use with the PRODUCT
in the TERRITORY, and with the written consent of MEDIMMUNE a proposed
trademark(s) shall become the TRADEMARK for the PRODUCT in the
TERRITORY.
9.2 The TRADEMARK shall be owned by ABBOTT.
9.3 In the event that ABBOTT's rights to PRODUCT under this AGREEMENT are
terminated in any country(ies) of the TERRITORY or this AGREEMENT is
terminated for reasons other than MEDIMMUNE's breach of the terms of
this AGREEMENT, ABBOTT shall grant to MEDIMMUNE a non-cancellable
royalty free exclusive license to use the TRADEMARK with respect
to PRODUCT in such country(ies) or to all countries of the TERRITORY,
respectively, and shall perform all acts and sign and execute any and
all papers required to effect such licensing all at no cost or expense
to MEDIMMUNE.
9.4 ABBOTT agrees to use the TRADEMARK only with respect to PRODUCT
purchased from MEDIMMUNE and only in those countries of the TERRITORY
in which ABBOTT retains the right to distribute PRODUCT.
9.5 At its cost and expense, ABBOTT undertakes to comply with all legal
requirements pertaining to the TRADEMARK to maintain the TRADEMARK in
force at all times, in the TERRITORY in which ABBOTT retains the right
to distribute PRODUCT.
9.6 If ABBOTT becomes aware of any infringement of the TRADEMARK within
the TERRITORY, ABBOTT shall, at its expense, take such steps as ABBOTT
may reasonably determine for the protection of its rights in the
TRADEMARK. The commencement, strategies, termination and settlement
of any action relating to the validity and/or infringement of such
(PAGE 13)
TRADEMARK shall be finally decided by ABBOTT.
9.7 (a) The patents in the TERRITORY relating to PRODUCT owned by or
licensed to MEDIMMUNE are set forth in attached Schedule C.
(b) In the event that ABBOTT notifies MEDIMMUNE that ABBOTT believes
that a THIRD PARTY is selling a monoclonal antibody against RSV in the
TERRITORY which infringes a patent owned by or licensed to MEDIMMUNE
and MEDIMMUNE has the right to bring suit under such patent then:
(i) MEDIMMUNE shall have the first right to bring an
infringement action against such THIRD PARTY at its cost and
expense and MEDIMMUNE shall retain all amounts recovered in such
action; or
(ii) if MEDIMMUNE does not initiate such action within
thirty (30) days of written notice of such infringement from
ABBOTT, at the request of ABBOTT, to the extent that MEDIMMUNE
has the right to do so, MEDIMMUNE shall initiate an infringement
action against such THIRD PARTY at the cost and expense of ABBOTT
and ABBOTT shall retain all amounts recovered in such action.
(c) In any infringement suit instituted by MEDIMMUNE to enforce the
patent rights pursuant to this AGREEMENT, ABBOTT shall cooperate fully
with MEDIMMUNE.
10. INDEMNITY
10.1 ABBOTT shall defend, indemnify and hold harmless MEDIMMUNE and its
AFFILIATES and their licensors related to the PRODUCT and their
respective employees, agents, officers, shareholders and directors and
each of them (a "MEDIMMUNE Indemnified Party") from and against any
and all THIRD PARTY claims, causes of action, losses, damages and
costs (including reasonable attorney's fees) of any nature made or
asserted against a MEDIMMUNE Indemnified Party or lawsuits or other
proceedings filed or otherwise instituted against a MEDIMMUNE
Indemnified Party, in each case by a THIRD PARTY (hereinafter
individually and collectively a "Loss(es)") to the extent that such
Loss results or arises from clinical trials, testing, sale or use of
any PRODUCT which is used or sold by or on behalf of ABBOTT, provided,
however, that the foregoing indemnification shall not be applicable to
any Loss to a MEDIMMUNE Indemnified Party to the extent that such Loss
arises or results from the negligence or willful misconduct of such
MEDIMMUNE Indemnified Party or infringement of a patent of a THIRD
PARTY as a result of manufacture, use or sale of PRODUCT in the
TERRITORY.
(PAGE 14)
10.2 Indemnification by MEDIMMUNE.
MEDIMMUNE shall defend, indemnify and hold harmless ABBOTT and its
AFFILIATES and their respective employees, agents, officers,
shareholders and directors and each of them (a "ABBOTT Indemnified
Party(ies)") from and against any and all THIRD PARTY claims, causes
of action, losses, damages and costs (including reasonable attorney's
fees) of any nature made or asserted against a ABBOTT Indemnified
Party or lawsuits or other proceedings filed or otherwise instituted
against a ABBOTT Indemnified Party, in each case by a THIRD PARTY
(hereinafter individually or collectively a "Loss(es)") to the extent
that such Loss results or arises from the negligence or willful
misconduct of MEDIMMUNE or the infringement of a patent of a THIRD
PARTY as a result of ABBOTT's use or sale of PRODUCT in the TERRITORY,
except to the extent that such Loss arises from the negligence or
willful misconduct of such ABBOTT Indemnified Party.
10.3 Conditions to Indemnification.
A person or entity that intends to claim indemnification under this
Section 10 (the "Indemnitee") shall promptly notify the other party
(the "Indemnitor") of any loss, claim, damage, liability or action in
respect of which the Indemnitee intends to claim such indemnification,
and the Indemnitor shall assume the defense thereof with counsel
mutually satisfactory to the Indemnitee whether or not such claim is
rightfully brought; provided, however, that an Indemnitee shall have
the right to retain its own counsel, with the fees and expenses to be
paid by the Indemnitor if Indemnitor does not assume the defense, or
if representation of such Indemnitee by the counsel retained by the
Indemnitor would be inappropriate due to actual or potential differing
interests between such Indemnitee and any other person represented by
such counsel in such proceedings. The indemnity agreement in this
Section 10 shall not apply to amounts paid in settlement of any loss,
claim, damage, liability or action if such settlement is effected
without the consent of the Indemnitor, which consent shall not be
withheld or delayed unreasonably. The failure to deliver notice to
the Indemnitor within a reasonable time after the commencement of any
such action, only if prejudicial to its ability to defend such action,
shall relieve such Indemnitor of any liability to the Indemnitee under
this Section 10, but the omission so to deliver notice to the
Indemnitor will not relieve it of any liability that it may have to
any Indemnitee otherwise than under this Section 10. The Indemnitee
under this Section 10, its employees and agents, shall cooperate fully
with the Indemnitor and its legal representatives in the
investigations of any action, claim or liability covered by this
indemnification.
(PAGE 15)
11. CLINICAL TRIALS AND ADVERSE REACTION REPORTING
11.1 Each party hereto shall be responsible for the conduct of clinical
trials, including drug monitoring with PRODUCT in its territory and
the parties will keep each other informed and share data resulting
from such clinical trials.
11.2 In order to guarantee that all applicable regulatory requirements as
well as the PARTIES' interests regarding pharmacovigilance of the
medicinal products concerned can be met, the PARTIES shall exchange
appropriate information. The PARTIES shall make sufficient efforts to
promptly establish and adopt sufficient procedures concerning this
exchange. These procedures shall be documented in writing as Schedule
D to this AGREEMENT.
11.3 Each PARTY agrees to notify the other PARTY as soon as possible of any
information it may receive regarding any threatened or pending action
by an AGENCY which may affect the safety or efficacy claims of PRODUCT
or the continued marketing of such PRODUCT.
11.4 Each PARTY shall promptly notify the other PARTY in writing of any
facts relating to the advisability of the recall, destruction or
withholding from the market of the PRODUCT anywhere in the world
(collectively, "Recall"). If at any time (a) any governmental or
regulatory authority in the TERRITORY issues a request, directive or
order for a Recall; (b) a court of competent jurisdiction orders a
Recall in the TERRITORY; or (c) ABBOTT determines, following
consultation with MEDIMMUNE (except in emergency situations in which
there is insufficient time for such consultation), that a Recall in
the TERRITORY is necessary or advisable, ABBOTT shall take all
appropriate corrective actions, at ABBOTT's expense, to effect the
Recall and MEDIMMUNE shall provide ABBOTT with such cooperation in
connection with the Recall as ABBOTT may reasonably request.
12. WARRANTIES
12.1 Each party warrants and represents that it has the full right and
authority to enter into this AGREEMENT and that it is not aware of any
impediment which would inhibit its ability to perform the terms and
conditions imposed on it.
12.2 EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS SECTION 12, NEITHER
PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND
EITHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR VALIDITY OF
ANY PATENTS ISSUED OR PENDING.
(PAGE 16)
13. TERM AND TERMINATION
13.1 This AGREEMENT is effective as of the date first above written and,
unless sooner terminated as provided herein, shall continue for as
long as ABBOTT is distributing the PRODUCT in the TERRITORY.
13.2 This AGREEMENT may be terminated by either party if:
(a) (i) the other party fails to observe, perform or otherwise
breaches any of its material covenants, agreements or obligations
under this AGREEMENT in any material respect and (ii) such failure
continues for a period of thirty (30) days after receipt by the other
party of notice thereof from the electing party specifying such
failure. Following such period, the electing party has ninety (90)
days to give notice to the other party of its election to terminate
this AGREEMENT; or
(b) (i) the other party files or institutes bankruptcy,
reorganization, liquidation, receivership or similar proceedings under
any debt relief laws or fails for more than sixty (60) days to take
steps to oppose the initiation of such actions against it.
13.3 Upon the termination of this AGREEMENT for any reason other than for
breach of this AGREEMENT by ABBOTT, ABBOTT shall have the right to
sell all PRODUCT in inventory at the time of termination. All such
sales of PRODUCT shall be subject to the terms of this AGREEMENT, as
in effect immediately prior to termination. If this AGREEMENT
terminates for any breach by ABBOTT, then MEDIMMUNE may at its
discretion buy back all or part of the PRODUCT that remain in the
possession of ABBOTT and are in good condition with a reasonable
remaining shelf life. All PRODUCT which is not repurchased by
MEDIMMUNE within four (4) weeks after termination shall be immediately
destroyed by ABBOTT at ABBOTT's expense. Upon termination, ABBOTT
shall discontinue use of the TRADEMARK, except in connection with any
sale of inventory as provided in this Section.
13.4 The termination of this AGREEMENT shall not affect any outstanding
obligations of ABBOTT or MEDIMMUNE hereunder, including but not
limited to any payments owed under the provisions of this AGREEMENT
while it was in effect and payment for binding and partially binding
orders under Section 5.1(a). Any such amount owed to a party shall be
paid within thirty (30) days of the termination of this AGREEMENT.
The provisions of Sections 3.3, 4.1, 5.1(a), 8.5, 8.6, 9.2, 9.3, 9.4,
Section 10, 13.3, 13.4 and 14.1 shall survive the termination of this
AGREEMENT for the longest period permitted by applicable law.
(PAGE 17)
13.5 ABBOTT may obtain PRODUCT registrations, licenses, permits, consents
and other approvals required from time to time to distribute and sell
the PRODUCTS in a country within the TERRITORY (the "Product
Registrations"). Upon termination of this AGREEMENT and at the
request of MEDIMMUNE, ABBOTT shall take all necessary or appropriate
actions to transfer to MEDIMMUNE or its designee the Product
Registrations which ABBOTT obtained in order to import, distribute or
sell PRODUCT in a country(ies) within the TERRITORY, to the extent
permitted by applicable law and regulation.
14. MISCELLANEOUS PROVISIONS
14.1 This AGREEMENT shall be governed by and construed in accordance with
the laws of State of Maryland without giving effect to its conflict of
law rules and regulations.
14.2 The United Nations Convention on the International Sale of Goods shall
not apply to this AGREEMENT, nor to any sale of PRODUCT made pursuant
to this AGREEMENT.
14.3 This AGREEMENT sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and supersedes
all prior agreements in this respect. There shall be no amendments or
modifications to this AGREEMENT, except by a written document which is
signed by both parties.
14.4 The headings in this AGREEMENT have been inserted for the convenience
of reference only and are not intended to limit or expand on the
meaning of the language contained in the particular article or
section.
14.5 Any delay in enforcing a party's rights under this AGREEMENT or any
waiver as to a particular default or other matter shall not constitute
a waiver of a party's right to the future enforcement of its rights
under this AGREEMENT, excepting only as to an expressed written and
signed waiver as to a particular matter for a particular period of
time.
14.6 In the event any provision of this AGREEMENT should be held invalid,
illegal or unenforceable, the remaining provisions shall not be
affected or impaired and the parties will use all reasonable efforts
to replace the applicable provision within a valid, legal and
enforceable provision which insofar as practical implements the
purposes hereof.
14.7 Unless agreed upon in writing in advance by the PARTIES, the PARTIES
shall not discuss with THIRD PARTIES or originate any publicity, news
(PAGE 18)
release or other public announcement, written or oral, whether to the
public press, stockholders or otherwise, any matters relating to the
terms of this AGREEMENT without the prior written consent of the other
PARTY except as may be required to obtain the Product Registrations.
However, the PARTIES acknowledge and agree that MEDIMMUNE and ABBOTT
shall be entitled to comply with the information obligations to the
public as set out in the company laws or security laws of the U.S.
14.8 If a dispute or claim arising out of or in connection with this
AGREEMENT develops between the PARTIES, the respective appropriate
officers of the PARTIES shall negotiate in good faith in an effort to
resolve the dispute for a period of thirty (30) days; provided,
however, nothing in this Section 14.8 shall prevent either PARTY from
seeking equitable relief. The PARTIES may, but are not obligated to,
agree to use the alternate dispute resolution procedure set forth in
Schedule D.
15. FORCE MAJEURE
Neither party shall be liable to the other for any default hereunder,
which is not a payment default, which is due to cause beyond the
control of the party in default, including but not limited to the
actions or inactions of any government agency or instrumentality;
breakdown of plant or machinery or shortages of labor, fuel,
transportation of materials, fires, floods, earthquakes, war, riots or
insurrections. If either party shall seek to rely on Force Majeure it
shall give written notice to the other indicating the details of the
act which it claims has put due performance of its obligations beyond
its control. In addition, the affected party shall exert all
reasonable efforts to eliminate or cure any Force Majeure event and to
resume performance with all possible speed. In the event this cannot
be done within six (6) months, the parties shall either resolve the
matter by mutual agreement or terminate this AGREEMENT.
16. SUCCESSORS
Subject to Section 17, the rights and obligations included in this
AGREEMENT shall be binding upon the parties hereto and their
successors and assigns.
17. ASSIGNMENT
This AGREEMENT may not be assigned by either party without the consent
of the other except MEDIMMUNE may assign this AGREEMENT without
consent in the event of a merger, acquisition or transfer of all or
substantially all of its business or assets relating to this
AGREEMENT.
(PAGE 19)
18. NOTICES
Any notice to be given under this AGREEMENT shall be deemed to have
been sufficiently given and delivered upon the earlier of (i) when
received at the address set forth below or (ii) three (3) business
days after being mailed by registered or certified mail, postage
prepaid with return receipt requested, addressed to the party to be
notified at its address stated below or at such other address as may
hereafter be furnished in writing to the notifying party or (iii) on
the day when sent by facsimile as confirmed by registered or certified
mail. Notices shall be delivered to the respective parties at the
addresses set forth below:
<TABLE>
<CAPTION>
<S> <C>
To MEDIMMUNE: MEDIMMUNE, Inc. Copy to: Carella, Byrne, Bain,
35 West Watkins Mill Road Gilfillan, Cecchi, Stewart
Gaithersburg, MD 20878 & Olstein
ATTN: CEO 6 Becker Farm Road
Roseland, New Jersey 07068
Fax: (201) 994-1744
ATTN: Elliot M. Olstein, Esq.
To ABBOTT: ABBOTT International, Ltd. Copy to: Abbott Laborities
D-6WP, AP30 D-364, AP6D
200 Abbott Park Road 100 Abbott Park Road
Abbott Park, IL 60064 Abbott Park, IL 60064
Phone: (847) 937-1760 Phone: (847) 937-8906
Fax: (847) 938-8325 Fax: (847) 938-6277
ATTN: President ATTN: General Counsel
</TABLE>
19. PAYMENTS TO BE PAID IN FULL
To the extent any payments due to MEDIMMUNE under in this AGREEMENT
shall be subject to withholding tax, ABBOTT shall be responsible for
the payment of and pay such tax without recourse to MEDIMMUNE. ABBOTT
shall have the right to reduce payments to MEDIMMUNE by the tax paid
on behalf of MEDIMMUNE. To the extent that MEDIMMUNE is unable to
recover VAT or a similar tax accrued in a country in connection with
its supply of PRODUCT to ABBOTT hereunder, ABBOTT shall assist
MEDIMMUNE in recovering such tax.
(PAGE 20)
20. CURRENCY CALCULATION
In all cases where calculations or amounts are made or stated in U.S.
Dollars, conversion from local currency to U.S. Dollars shall be made
as set forth in Section 3.3(B)(ii).
IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to
be executed by their respective representatives hereunto duly authorized as
of the day and year first above-written.
<TABLE>
<CAPTION>
<S> <C>
ABBOTT INTERNATIONAL, LTD. MEDIMMUNE, INC.
By:/s/Robert L. Parkinson, Jr. By:/s/David M. Mott
Robert L. Parkinson, Jr. David M. Mott
President President
</TABLE>
JOINDER
The undersigned, Abbott Laboratories, an Illinois corporation, hereby joins
in the execution of this Distribution Agreement (the "Agreement") for the
purpose of obligating itself to the obligations and undertakings of Abbott
International, Ltd., as set forth in the Agreement.
ABBOTT LABORATORIES
By:/s/Robert L. Parkinson, Jr.
Robert L. Parkinson, Jr.
Senior Vice President
Dated: December 1, 1997
(PAGE 21)
SCHEDULE A
SPECIFICATIONS
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
SCHEDULE B
PRIOR TO FIRST COMMERCIAL SALES AND COMPLETION OF FIRST CONTRACT YEAR
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
SCHEDULE C
MEDI-493 PATENTS
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
SCHEDULE D
ADVERSE DRUG REPORTING
Post-marketed Events
ABBOTT Pharmacovigilance to MEDIMMUNE
All serious adverse events originating in the
TERRITORY will be faxed by ABBOTT to MEDIMMUNE on an ABBOTT
Adverse Event Data Collection form to MEDIMMUNE within five (5)
calendar days of ABBOTT awareness.
No ABBOTT International Pharmacovigilance
assessment of expectedness or causality will be made on these
faxed reports.
MEDIMMUNE to ABBOTT Pharmacovigilance
All serious adverse events originating outside the
TERRITORY will be faxed on a MEDIMMUNE Adverse Event Data
Collection form to ABBOTT Pharmacovigilance within five (5)
calendar days' of MEDIMMUNE awareness.
No MEDIMMUNE assessment of expectedness or
causality will be made on these faxed reports.
Clinical Study Events (both directions)
To be handled according to the process with spontaneous reports
with the following exceptions:
(PAGE 22)
Serious clinical study adverse events that involve
a death or are life-threatening must be faxed by ABBOTT
Pharmacovigilance to MEDIMMUNE within one (1) working day of
the ABBOTT awareness date.
A summary of any individual 3-Day IND telephone
Adverse Event report discussed to the FDA must be faxed to
ABBOTT Pharmacovigilance the same day as discussed with the
FDA.
<TABLE>
<S> <C>
TO ABBOTT: Abbott Laboratories
Abbott International
Attn: Manager
Pharmacovigilance
Dept. 6RH, Bldg. AP34
200 Abbott Park Road
Abbott Park, IL USA 60064-3500
Telephone: (847) 938-8351
Facsimile: (847) 938-4886
TO MEDIMMUNE: MEDIMMUNE, Inc.
35 West Watkins Mill Road
Gaithersburg, MD 20878
ATTN: CEO
</TABLE>
EXHIBIT E
ALTRNATIVE DISPUTE RESOLUTION
The parties recognize that a bona fide dispute as to certain matters
may arise from time to time during the term of this AGREEMENT which relates
to either party's rights and/or obligations. To have such a dispute
resolved by this Alternative Dispute Resolution ("ADR") provision, a party
first must send written notice of the dispute to the other party for
attempted resolution by good faith negotiations between their respective
presidents (or their equivalents) of the affected subsidiaries, divisions,
or business units within twenty-eight (28) days after such notice is
received (all references to "days" in this ADR provision are to calendar
days).
If the matter has not been resolved within twenty-eight (28) days of
the notice of dispute, or if the parties fail to meet within such
twenty-eight (28) days, either party may initiate an ADR proceeding as
provided herein. The parties shall have the right to be represented by
(PAGE 23)
counsel in such a proceeding.
1. To begin an ADR proceeding, a party shall provide written notice to
the other party of the issues to be resolved by ADR. Within fourteen
(14) days after its receipt of such notice, the other party may, by
written notice to the party initiating the ADR, add additional issues
to be resolved within the same ADR.
2. Within twenty-one (21) days following receipt of the original ADR
notice, the parties shall select a mutually acceptable neutral to
preside in the resolution of any disputes in this ADR proceeding. If
the parties are unable to agree on a mutually acceptable neutral
within such period, either party may request the President of the CPR
Institute for Dispute Resolution ("CPR"), 366 Madison Avenue, 14th
Floor, New York, New York 10017, to select a neutral pursuant to the
following procedures:
(a) The CPR shall submit to the parties a list of not less than
five (5) candidates within fourteen (14) days after receipt of the
request, along with a Curriculum Vitae for each candidate. No
candidate shall be an employee, director, or shareholder of either
party or any of their subsidiaries or affiliates.
(b) Such list shall include a statement of disclosure by each
candidate of any circumstances likely to affect his or her
impartiality.
(c) Each party shall number the candidates in order of
preference (with the number one (1) signifying the greatest
preference) and shall deliver the list to the CPR within seven (7)
days following receipt of the list of candidates. If a party
believes a conflict of interest exists regarding any of the
candidates, that party shall provide a written explanation of the
conflict to the CPR along with its list showing its order of
preference for the candidates. Any party failing to return a list
of preferences on time shall be deemed to have no order of
preference.
(d) If the parties collectively have identified fewer than
three (3) candidates deemed to have conflicts, the CPR immediately
shall designate as the neutral the candidate for whom the parties
collectively have indicated the greatest preference. If a tie
should result between two candidates, the CPR may designate either
candidate. If the parties collectively have identified three (3)
or more candidates deemed to have conflicts, the CPR shall review
the explanations regarding conflicts and, in its sole discretion,
may either (i) immediately designate as the neutral the candidate
for whom the parties collectively have indicated the greatest
(PAGE 24)
preference, or (ii) issue a new list of not less than five
(5) candidates, in which case the procedures set forth in
subparagraphs 2(a) - 2(d) shall be repeated.
3. No earlier than twenty-eight (28) days or later than fifty-six (56)
days after selection, the neutral shall hold a hearing to resolve each
of the issues identified by the parties. The ADR proceeding shall
take place at a location agreed upon by the parties. If the parties
cannot agree, the neutral shall designate a location other than the
principal place of business of either party or any of their
subsidiaries or affiliates.
4. At least seven (7) days prior to the hearing, each party shall submit
the following to the other party and the neutral:
(a) a copy of all exhibits on which such party intends to rely
in any oral or written presentation to the neutral;
(b) a list of any witnesses such party intends to call at the
hearing, and a short summary of the anticipated testimony of each
witness;
(c) a proposed ruling on each issue to be resolved, together
with a request for a specific damage award or other remedy for
each issue. The proposed rulings and remedies shall not contain
any recitation of the facts or any legal arguments and shall not
exceed one (1) page per issue.
(d) a brief in support of such party's proposed rulings and
remedies, provided that the brief shall not exceed twenty (20)
pages. This page limitation shall apply regardless of the number
of issues raised in the ADR proceeding.
Except as expressly set forth in subparagraphs 4(a) - 4(d), no
discovery shall be required or permitted by any means, including
depositions, interrogatories, requests for admissions, or production
of documents.
5. The hearing shall be conducted on two (2) consecutive days and shall
be governed by the following rules:
(a) Each party shall be entitled to five (5) hours of hearing
time to present its case. The neutral shall determine whether
each party has had the five (5) hours to which it is entitled.
(b) Each party shall be entitled, but not required, to make an
opening statement, to present regular and rebuttal testimony,
documents or other evidence, to cross-examine witnesses, and to
make a closing
(PAGE 25)
argument. Cross-examination of witnesses shall occur
immediately after their direct testimony, and cross-examination
time shall be charged against the party conducting the
cross-examination.
(c) The party initiating the ADR shall begin the hearing and,
if it chooses to make an opening statement, shall address not only
issues it raised but also any issues raised by the responding
party. The responding party, if it chooses to make an opening
statement, also shall address all issues raised in the ADR.
Thereafter, the presentation of regular and rebuttal testimony and
documents, other evidence, and closing arguments shall proceed in
the same sequence.
(d) Except when testifying, witnesses shall be excluded from
the hearing until closing arguments.
(e) Settlement negotiations, including any statements made
therein, shall not be admissible under any circumstances.
Affidavits prepared for purposes of the ADR hearing also shall not
be admissible. As to all other matters, the neutral shall have
sole discretion regarding the admissibility of any evidence.
6. Within seven (7) days following completion of the hearing, each party
may submit to the other party and the neutral a post-hearing brief in
support of its proposed rulings and remedies, provided that such brief
shall not contain or discuss any new evidence and shall not exceed ten
(10) pages. This page limitation shall apply regardless of the number
of issues raised in the ADR proceeding.
7. The neutral shall rule on each disputed issue within fourteen (14)
days following completion of the hearing. Such ruling shall adopt in
its entirety the proposed ruling and remedy of one of the parties on
each disputed issue but may adopt one party's proposed rulings and
remedies on some issues and the other party's proposed rulings and
remedies on other issues. The neutral shall not issue any written
opinion or otherwise explain the basis of the ruling.
8. The neutral shall be paid a reasonable fee plus expenses. These fees
and expenses, along with the reasonable legal fees and expenses of the
prevailing party (including all expert witness fees and expenses), the
fees and expenses of a court reporter, and any expenses for a hearing
room, shall be paid as follows:
(a) If the neutral rules in favor of one party on all disputed
issues in the ADR, the losing party shall pay 100% of such fees
and expenses.
(PAGE 26)
(b) If the neutral rules in favor of one party on some issues
and the other party on other issues, the neutral shall issue with
the rulings a written determination as to how such fees and
expenses shall be allocated between the parties. The neutral
shall allocate fees and expenses in a way that bears a reasonable
relationship to the outcome of the ADR, with the party prevailing
on more issues, or on issues of greater value or gravity,
recovering a relatively larger share of its legal fees and
expenses.
9. The rulings of the neutral and the allocation of fees and expenses
shall be binding, non-reviewable, and non-appealable, and may be
entered as a final judgment in any court having jurisdiction.
10. Except as provided in paragraph 9 or as required by law, the existence
of the dispute, any settlement negotiations, the ADR hearing, any
submissions (including exhibits, testimony, proposed rulings, and
briefs), and the rulings shall be deemed Confidential Information.
The neutral shall have the authority to impose sanctions for
unauthorized disclosure of Confidential Information.
(PAGE 27)
EXHIBIT 10.80
LICENSE AGREEMENT
This Agreement is effective December 3, 1997 ("the EFFECTIVE DATE") by
and between LOYOLA UNIVERSITY OF CHICAGO, an Illinois not for profit
corporation, with offices at 820 North Michigan Avenue, Chicago, IL 60611
("UNIVERSITY"), and MEDIMMUNE, INC., a Delaware Corporation having offices
at 35 West Watkins Mill Road, Gaithersburg, MD 20878 ("MEDIMMUNE").
WHEREAS, MEDIMMUNE desires to obtain an exclusive license in and to
certain patents owned by UNIVERSITY;
WHEREAS, UNIVERSITY is willing to grant the exclusive license desired
by MEDIMMUNE.
NOW THEREFORE in consideration of the mutual promises and other good
and valuable consideration, the parties agree as follows:
SECTION 1 - DEFINITIONS.
The terms used in this Agreement have the following meaning:
1.1 The term "AFFILIATE" as applied to MEDIMMUNE shall mean a related
company of MEDIMMUNE, the voting stock of which is directly or indirectly
at least fifty percent (50%) owned or controlled by MEDIMMUNE, or an
organization which directly or indirectly controls at least fifty percent
(50%) of the voting stock or ownership of MEDIMMUNE, and an organization, a
majority ownership of which is directly or indirectly common to the
ownership of MEDIMMUNE.
1.2 The term "FIELD" shall mean products and processes directed to the
treatment, prevention or diagnosis of human diseases or infections related
to human papilloma virus ("HPV").
1.3 The term "FIRST COMMERCIAL SALE" shall mean in each country the
first sale of any PRODUCT by MEDIMMUNE, its AFFILIATES or SUBLICENSEES,
following approval of its marketing by the appropriate governmental agency
for the country in which the sale is to be made and when governmental
approval is not required, the first sale in that country.
1.4 The term "INVENTIONS" shall mean new and useful improvements in
the construction of Papillomavius hybrid particles conceived and reduced to
practice by Lutz Grissman, Jian Zhou, Martin Muller, and Jeanette
Painstill, all employees of UNIVERSITY, and disclosed to UNIVERSITY in
Loyola University Invention Disclosure dated September 28, 1994, and
December 16, 1996, and as amended from time to time.
1.5 The term "NET SALES" means the total amount received by MEDIMMUNE
or its AFFILIATES from sales of PRODUCT, less transportation charges and
insurance, sales taxes, use taxes, excise taxes, value added taxes, customs
duties or other imposts, normal and customary quantity and cash discounts,
rebates (to the extent actually granted) and disallowed reimbursements and
allowances and credit on account of rejection or return of PRODUCT.
(PAGE 1)
1.6 The term "PATENT RIGHTS" shall mean the following: (CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED)
1.7 The term "PRODUCT" shall mean any article, composition, apparatus,
substance, chemical, material, method or service, the manufacture, use or
sale of which, but for the license granted hereunder, would infringe a
VALID CLAIM of PATENT RIGHTS.
1.8 The term "SUBLICENSEE" shall mean any non-AFFILIATE third party
licensed by MEDIMMUNE to make, have made, import, use or sell any PRODUCT
under PATENT RIGHTS.
1.9 The term "TERRITORY" shall mean all countries of the world.
1.10 The term "VALID CLAIM" shall mean a claim of an issued patent
which has not lapsed or become abandoned or been declared invalid or
unenforceable by a court of competent jurisdiction or an administrative
agency from which no appeal can be or is taken.
1.11 The use herein of the plural shall include the singular, and the
use of the masculine shall include the feminine.
SECTION 2 - GRANT.
2.1 (a)UNIVERSITY hereby grants to MEDIMMUNE and MEDIMMUNE hereby
accepts from UNIVERSITY a sole and exclusive, royalty-bearing right and
license for the TERRITORY under PATENT RIGHTS to make, have made, use,
import, offer to sell, sell or have sold on its behalf PRODUCT in the
FIELD, including the right to sublicense third parties. MEDIMMUNE shall
have the right to extend such license to its AFFILIATES.
(b) MEDIMMUNE, at UNIVERSITY's request, shall grant to a third party a
royalty bearing, sublicense under PATENT RIGHTS in the field defined
by MEDIMMUNE and the third party. MEDIMMUNE shall be required to
grant only one sublicense under this Par 2.1(b).
2.2 MEDIMMUNE agrees to forward to UNIVERSITY a copy of all fully
executed sublicense agreements (with financial terms redacted) within
thirty (30) days of signing thereof.
2.3 The above licenses to sell any PRODUCT includes the right of
MEDIMMUNE, its AFFILIATES and SUBLICENSEES to grant to the purchaser of a
PRODUCT for which a royalty has been paid under this Agreement the right to
use and/or resell such purchased PRODUCT without payment of an additional
royalty, provided that such purchaser does not combine PRODUCT with other
products or otherwise add significant value to the PRODUCT. If so, such
transactions should be sublicenses rather than sales transactions.
(PAGE 2)
2.4 (a) Taking into account the complexity, and stage of
development of the PRODUCT and the science related thereto,
MEDIMMUNE shall select and use reasonable best efforts under the
circumstances to research, develop and then commercialize a
selected PRODUCT. The efforts of a SUBLICENSEE, collaborator
and/or an AFFILIATE shall be considered as efforts of MEDIMMUNE.
(b) MEDIMMUNE and UNIVERSITY agree that the following
commercialization milestones are reasonable, taking into account
the complexity and stage of development of the PATENT RIGHTS and
the science related thereto and that the achievement of such
milestones shall conclusively establish reasonable best efforts
under Par. 2.4(a).
1. Phase I clinical trials on any Product initiated by MEDIMMUNE an
AFFILIATE or a SUBLICENSEE anywhere in the World by the beginning of
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
2. Phase II clinical trials on any Product initiated by MEDIMMUNE an
AFFILIATE, or a SUBLICENSEE anywhere in the World by the beginning
of the (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED), or two years
after Milestone 1, whichever is later.
3. Phase III clinical trials on any Product initiated by MEDIMMUNE an
AFFILIATE, or a SUBLICENSEE anywhere in the World by the beginning
of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED), or two years after
Milestone 2, whichever is later.
4. A product license application submitted by MEDIMMUNE an AFFILIATE,
or a SUBLICENSEE in any territory of the world by beginning of
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED), or two years after
Milestone 3, whichever is later.
5. Granting an approval for sale by MEDIMMUNE an AFFILIATE, or a
SUBLICENSEE of any PRODUCT in any territory of the world by the
beginning of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED), or one
year after Milestone 4, whichever is later.
(c) If MEDIMMUNE an AFFILIATE, or a SUBLICENSEE fails to
achieve a Milestone by the Milestone date, then MEDIMMUNE may
request a meeting with UNIVERSITY within ten (10) days of the
Milestone date to discuss the reasons for the failure to meet the
Milestone, and to propose corrective actions and a revised
schedule for future milestones. Within thirty (30) days of the
Milestone date if the Milestone has not been achieved, as its
sole and exclusive remedy,
UNIVERSITY may give notice that the license granted
hereunder is no longer exclusive (but only if the failure to
achieve the milestone was within the control of MEDIMMUNE) or
agree to a revised schedule of future milestones.
(PAGE 3)
2.5 UNIVERSITY acknowledges that MEDIMMUNE is in the business of
developing, manufacturing and selling of medical processes and products and
nothing in this Agreement shall be construed as restricting such business
or imposing on MEDIMMUNE the duty to market, and/or sell and exploit
PRODUCT for which royalties are due hereunder to the exclusion of or in
preference to any other product or process.
2.6 Subject to Section 2.4, MEDIMMUNE shall have sole discretion for
making all decisions relating to the commercialization and marketing of
PRODUCT, and will bear the cost of preparing such PRODUCT for market and
for obtaining governmental approvals (except with respect to PATENT RIGHTS)
where required.
SECTION 3. CONFIDENTIALITY.
3.1 Subject to the exceptions set forth in Sections 3.2 and 3.3, during
the term of this Agreement, UNIVERSITY may disclose to MEDIMMUNE
proprietary and confidential technology, inventions, technical information,
material, reagents, biological materials and the like which are owned or
controlled by UNIVERSITY and which is designated by UNIVERSITY as
confidential ("Confidential Information"). MEDIMMUNE agrees to retain such
Confidential Information in confidence and not to disclose any such
Confidential Information to a third party without the prior written consent
of UNIVERSITY and to use such Confidential Information only for the
purposes of this Agreement.
3.2 The obligations of confidentiality and non-use will not apply to
Confidential Information which:
(i) was known to MEDIMMUNE or generally known to
the public prior to its disclosure hereunder; or
(ii)subsequently becomes known to the public by
some means other than a breach of this Agreement;
(iii) is subsequently disclosed to MEDIMMUNE by
a third party having a lawful right to make such
disclosure;
(iv)is disclosed to obtain regulatory approval for
PRODUCT or for the purpose of making, using, selling or
licensing of PRODUCT, provided that MEDIMMUNE takes all
reasonable steps to restrict and maintain the
confidentiality of the disclosure;
(v) is required by law, rule, regulation or bona
fide legal process to be disclosed, provided that
MEDIMMUNE takes all reasonable steps to restrict and
maintain confidentiality of such disclosure and provides
reasonable notice to UNIVERSITY; or
(vi)is approved for release by the parties.
(PAGE 4)
3.3 Notwithstanding anything to the contrary, MEDIMMUNE shall have the
right to transfer Confidential Information to a third party including
MEDIMMUNE'S AFFILIATES and SUBLICENSEES for the purpose of researching,
developing and making PRODUCT, provided that such third party agrees to be
bound by obligations of confidentiality and non-use similar to those set
forth in this Agreement.
SECTION 4. PATENT PROSECUTION.
4.1 UNIVERSITY shall take responsibility for the preparation, filing,
prosecution and maintenance of any and all PATENT RIGHTS PATENT
APPLICATIONS and PATENTS RIGHTS PATENTS, included in PATENT RIGHTS,
provided however that UNIVERSITY shall first consult with MEDIMMUNE as to
the preparation, filing prosecution and maintenance of such PATENT RIGHTS
PATENT APPLICATIONS and PATENT RIGHTS PATENTS and shall furnish to
MEDIMMUNE copies of office actions, cited prior art, responses to office
actions, requests for terminal disclaiming, and requests for reissue or
reexamination, other documents relevant to any such preparation, filing,
prosecution or maintenance. UNIVERSITY and MEDIMMUNE shall cooperate fully
in the preparation, filing, prosecution and maintenance of PATENT RIGHTS
and of all PATENT RIGHTS PATENTS and PATENT RIGHTS PATENT APPLICATIONS
licensed to MEDIMMUNE hereunder, executing all papers and instruments so as
to enable UNIVERSITY to apply for, to prosecute and to maintain PATENT
RIGHTS PATENT APPLICATIONS and PATENTS RIGHTS PATENTS in its name in any
country. Each party shall provide to the other prompt notice as to all
matters which come to its attention and which may affect the preparation,
filing, prosecution or maintenance of any such PATENT RIGHTS PATENT
APPLICATIONS or PATENT RIGHTS PATENTS. Patent attorneys chosen by
UNIVERSITY shall handle patent filings and prosecutions on behalf of
UNIVERSITY, provided, however, MEDIMMUNE shall be entitled to review and
comment upon all actions undertaken in the prosecution of all PATENT RIGHTS
PATENTS and PATENT RIGHTS PATENT APPLICATIONS.
4.2 MEDIMMUNE shall reimburse UNIVERSITY for patent fees and
application costs incurred with respect to PATENT RIGHTS prior to the
EFFECTIVE DATE, provided such reimbursement shall not exceed (CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED).
4.3 After the EFFECTIVE DATE, MEDIMMUNE shall reimburse UNIVERSITY for
all reasonable expenses incurred by UNIVERSITY for the preparation, filing,
prosecution and maintenance of PATENT RIGHTS upon receipt of invoices from
UNIVERSITY.
4.4 In the event UNIVERSITY decides not to apply for, prosecute or
maintain any such PATENT RIGHTS PATENT APPLICATIONS and PATENT RIGHTS
PATENTS, UNIVERSITY shall give sufficient and timely notice to MEDIMMUNE so
as to permit MEDIMMUNE to apply for, prosecute and maintain such PATENT
RIGHTS PATENT APPLICATIONS and PATENT RIGHTS PATENTS. MEDIMMUNE shall
have the right to pursue same in UNIVERSITY's name and at MEDIMMUNE's
expense, and MEDIMMUNE shall not pay royalties on sales of PRODUCTS in such
territories.
(PAGE 5)
4.5 In the event MEDIMMUNE elects to no longer pay the expenses of a
PATENT RIGHT PATENT APPLICATION or PATENT RIGHT PATENT included within
PATENT RIGHTS, MEDIMMUNE shall notify UNIVERSITY not less than sixty (60)
days prior to such action and shall thereby surrender its rights under such
patent or patent application.
SECTION 5. ROYALTIES AND OTHER COMPENSATION
5.1 (A) MEDIMMUNE shall pay to UNIVERSITY:
a royalty of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
of the NET SALES of PRODUCTS which are sold by MEDIMMUNE or its
AFFILIATES and which are covered by a VALID CLAIM of any PATENT
RIGHT licensed to LICENSEE hereunder in the country where sold;
or (ii) a royalty of the lesser of (CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED) of the running royalty received by LICENSEE from
its SUBLICENSEES for the sale of PRODUCTS or (CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED) of the NET SALES of PRODUCT sold by
the SUBLICENSEE.
(B) In the event that MEDIMMUNE'S license is converted to a non-
exclusive license pursuant to Section 2.4(c), the royalties under
Paragraph 5.1 (A) shall be reduced by (CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED).
(C) In the event that a PRODUCT includes both component(s) covered by
a VALID CLAIM of a PATENT RIGHT ("Patented Component(s)") and a
component which is therapeutically active and such component is not
covered by a VALID CLAIM of a PATENT RIGHT ("Unpatented Component(s)
(s)") (such PRODUCT being a "Combined Product"), then NET SALES
shall be the amount which is normally received by MEDIMMUNE or its
AFFILIATES from the sale of the Patented Component(s) in an arm's
length transaction with an unaffiliated third party. If the
Patented Component (s) are not sold separately, then NET SALES
upon which a royalty is paid shall be the NET SALES of the Combined
Product multiplied by a fraction, the numerator of which is the
number of Patented Components in the Combined Product and the
denominator of which is the total number of therapeutically active
Components (Patented) Components plus Unpatented Components) in the
Combined Product.
(D) In the event that royalties are to be paid by MEDIMMUNE to a party
who is not an AFFILIATE of MEDIMMUNE for PRODUCT for which royalties
are also due to UNIVERSITY pursuant to Paragraph 5.1 (such royalties
to such party are hereinafter "Other Royalties"), then the royalties
to be paid to UNIVERSITY by MEDIMMUNE pursuant to Paragraph 5.1 (A)
or (B) shall be reduced by (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) of the amount of such Other Royalties, but in no event
shall any royalities payable under Paragraph 5.1 be reduced by more
than (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
(PAGE 6)
5.2 (a) Upon execution of this Agreement, MEDIMMUNE shall pay
UNIVERSITY a license fee of (CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED).
(b) MEDIMMUNE shall also pay the following amounts within
thirty (30) days of achieving the milestones set forth herein.
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) on
initiation of Phase II clinical trials on any PRODUCT
initiated by MEDIMMUNE an AFFILIATE, or a SUBLICENSEE in the
United States or Europe.
(ii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) on
initiation of Phase III clinical trials on any PRODUCT
initiated by MEDIMMUNE, an AFFILIATE, or a SUBLICENSEE in
the United States or Europe.
(iii)(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) on
submission of a product license application by MEDIMMUNE, an
AFFILIATE or a SUBLICENSEE in the United States or Europe.
(iv) (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) on approval of the first Biologics License
Application for a PRODUCT with the U.S. Food and Drug
Administration.
5.3 MEDIMMUNE shall keep, and shall cause each of its AFFILIATES and
SUBLICENSEES to keep, full and accurate books of account containing all
particulars that may be necessary for the purpose of calculating all
royalties payable to UNIVERSITY. Such books of account shall be kept at
their principal place of business and, with all necessary supporting data
shall, for the three (3) years next following the end of the calendar year
to which each shall pertain be open for inspection by its designee upon
reasonable notice during normal business hours at UNIVERSITY's expense for
the sole purpose of verifying royalty statements or compliance with this
Agreement, but in no event more than once in each calendar year. All
information and data offered shall be used only for the purpose of
verifying royalties and shall be treated as MEDIMMUNE Confidential
Information subject to the obligations of this Agreement.
5.4 In each year the amount of royalty due shall be calculated
semi-annually as of June 30 and December 31 (each as being the last day of
an "Accounting Period") and shall be paid semi-annually within the sixty
(60) days next following such date, every such payment shall be supported
by the accounting prescribed in Paragraph 5.5 and shall be made in United
States currency. Whenever for the purpose of calculating royalties
conversion from any foreign currency shall be required, such conversion
shall be at the rate of exchange thereafter published in the Wall Street
Journal for the last business day of the applicable Accounting Period.
5.5 With each semi-annual payment, MEDIMMUNE shall deliver to
UNIVERSITY a full and accurate accounting to include at least the following
information:
(PAGE 7)
(a) Quantity of each PRODUCT subject to royalty sold (by
country) by MEDIMMUNE and its AFFILIATES and SUBLICENSEES;
(b) Total receipts for each PRODUCT subject to royalty (by
country);
(c) Taxes paid (by country)
(d) Royalties due to third parties (identifying the party and
the royalty rate)
(e) Total royalties payable to UNIVERSITY
(f) Royalties received from SUBLICENSEES
(g) Actual exchange rates applied to foreign funds
5.6 Any tax required to be withheld by MEDIMMUNE under the laws of any
foreign country for the account of UNIVERSITY, shall be promptly paid by
MEDIMMUNE for and on behalf of UNIVERSITY to the appropriate governmental
authority, and MEDIMMUNE shall furnish UNIVERSITY with proof of payment of
such tax. Any such tax actually paid on UNIVERSITY's behalf shall be
deducted from royalty payments due UNIVERSITY.
5.7 If the transfer of or the conversion into United States Dollar
Equivalent of any remittance due hereunder is not lawful or possible in any
country, such remittance shall be made by the deposit thereof in the
currency of the country to the credit and account of UNIVERSITY or its
nominee in any commercial bank or trust company located in that country,
prompt notice of which shall be given to UNIVERSITY. UNIVERSITY shall be
advised in writing in advance by MEDIMMUNE and provide to MEDIMMUNE a
nominee, if so desired.
5.8 Only one royalty shall be due and payable for the manufacture, use
and sale of a PRODUCT irrespective of the number of patents or claims
thereof which cover the manufacture, use and sale of such PRODUCT.
SECTION 6 - INFRINGEMENT
6.1 Infringement of UNIVERSITY'S PATENT RIGHTS by third parties:
6.1.1 MEDIMMUNE shall inform UNIVERSITY promptly in writing of any
alleged infringement and of any available evidence of infringement
by a third party of any patents within the PATENT RIGHTS, and
UNIVERISITY shall inform MEDIMMUNE promptly in writing of any
alleged infringement and of any available evidence of infringement
by a third party of any patents within the PATENT RIGHTS.
6.1.2 During the term of this Agreement, UNIVERSITY shall have the
right, but shall not be obligated, to prosecute at its own expense
any such infringements of the PATENT RIGHTS and, in furtherance of
such right, UNIVERSITY hereby agrees that MEDIMMUNE may join
UNIVERSITY as a party plaintiff in any such suit without expense to
UNIVERSITY. The total cost of any such
(PAGE 8)
6.1.3 infringement action commenced or defended solely by UNIVERSITY
shall be borne by UNIVERSITY. Any recovery of damages by UNIVERSITY
for any infringement shall be applied first in satisfaction of any
unreimbursed expenses and attorneys' fees of UNIVERSITY relating to
the suit, and second toward reimbursement of MEDIMMUNE's reasonable
expenses, including reasonable attorneys' fees, relating to the
suit. The balance remaining from any such recovery shall be
distributed to UNIVERSITY.
6.1.3. If within three (3) months after having been notified of any
alleged infringement, UNIVERSITY shall have been unsuccessful in
persuading the alleged infringer to desist and shall not have
brought and shall not be diligently prosecuting an infringement
action; or if UNIVERSITY shall notify MEDIMMUNE at any time prior
thereto of its intention not to bring suit against any alleged
infringer, then MEDIMMUNE in its sole discretion shall have the
right, but shall not be obligated, to either:
(a) settle the infringement dispute by sublicensing the
alleged infringer or by other means; or
(b) prosecute at its own expense any infringement of the
PATENT RIGHTS. In the event MEDIMMUNE prosecutes such
infringement, MEDIMMUNE may, for such purposes, request to
use the name of UNIVERSITY as party plaintiff. Subject to
the approval of the Board of Trustees of Loyola University
of Chicago, the UNIVERSITY may agree to become a party
plaintiff.
6.1.4 In the event that MEDIMMUNE shall undertake the enforcement
and/or defense of the PATENT RIGHTS by litigation, including any
declaratory judgment action, MEDIMMUNE may withhold an amount equal
to up to (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) from future
royalties due under Section 5 of this Agreement for legal expenses,
including reasonable attorneys' fees, in connection with such
litigation. Any recovery of damages by MEDIMMUNE for any such suit
shall be applied first to reimburse UNIVERSITY for any royalties due
but withheld under this paragraph 6.1.4 and any unreimbursed legal
expenses of UNIVERSITY, and second in satisfaction of any
unreimbursed expense and attorney's fees of MEDIMMUNE relating to
the suit. The balance remaining from any such recovery shall be
distributed to MEDIMMUNE, provided that MEDIMMUNE shall pay to
UNIVERSITY such royalties as would otherwise be applicable under
Section 5 hereof for that portion of MEDIMMUNE's recovery
attributable to lost sales. MEDIMMUNE shall be entitled to settle
any such litigation by agreement, consent, judgment, voluntary
dismissal, or otherwise.
6.1.5 MEDIMMUNE shall have the right in accordance with the terms
and conditions herein to sublicense any alleged infringer under
(PAGE 9)
6.1.6 the PATENT RIGHTS for future infringements.
6.1.6 In any infringement suit either party may institute to enforce
the PATENT RIGHTS pursuant to this Agreement, the other party hereto
shall, at the request of the party initiating such suit, cooperate
in all respects and, to the extent possible, have its employees
testify when requested and make available relevant records, papers,
information, samples, specimens, and the like. All reasonable out-
of-pocket costs incurred in connection with rendering cooperation
requested hereunder shall be paid by the party requesting
cooperation.
6.1.7 Any of the foregoing notwithstanding, if at any time during
the term of this Agreement any of the PATENT RIGHTS are declared
invalid or unenforceable, by a court of competent jurisdiction or an
administrative agency from which no appeal can be or is taken,
MEDIMMUNE, shall have no further obligation to UNIVERSITY with
respect to its future use or sale of any product or process covered
by such PATENT RIGHTS, including the obligation of paying royalties.
Nevertheless, MEDIMMUNE shall not have a damage claim or a claim for
refund or reimbursement against the UNIVERSITY.
6.2 Alleged infringement of a third party's patent rights.
6.2.1 In the event that litigation against MEDIMMUNE is initiated
by a third-party charging MEDIMMUNE with infringement of a patent of
the third party as a result of the manufacture, use or sale by
MEDIMMUNE of PRODUCT covered by a PATENT RIGHT, MEDIMMUNE shall
promptly notify UNIVERSITY in writing thereof. MEDIMMUNE's costs as
to any such defense shall be creditable against any and all payments
due and payable to UNIVERSITY under Section 5 of this Agreement but,
no royalty payment after taking into consideration any such credit
under this Section 6.2.1 shall be reduced by more than
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) provided, however,
that if said claim of infringement does not pertain to a PATENT
RIGHT of UNIVERSITY, but to other patent rights used in the
manufacture or sale of the PRODUCT, then this credit shall not be
made against royalities due and payable to UNIVERSITY.
6.2.2 In the event of a judgment in any suit in which a court of
competent jurisdiction rules that the manufacture, use or sale by
MEDIMMUNE of PRODUCT covered by a PATENT RIGHT has infringed on a
third-party's patent requiring MEDIMMUNE to pay damages or a royalty
to said third party, or in the event of a settlement of such suit
requiring damages or royalty payments to be made, payments due to
UNIVERSITY under Section 5 of this Agreement arising from the
applicable PRODUCT shall be correspondingly reduced by the amounts
due under the requirement of such judgment or under the terms of
such settlement. However, subject to Section 5.1(c), the royalty
payment after taking into consideration any such reduction under
this Section 6.2.2 shall not be reduced by more than (CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED);
(PAGE 10)
6.2.3 provided, however that if said judgment does not
pertain to a PATENT RIGHT of UNIVERSITY, but to other patent rights
used in the manufacture or sale of the PRODUCT, then this credit
shall not be made against royalties due and payable to the
UNIVERSITY.
6.2.3 UNIVERSITY shall give MEDIMMUNE assistance in the defense
of any such infringement charge or lawsuit, as may be
reasonably required.
SECTION 7 - WARRANTIES.
7.1 UNIVERSITY and MEDIMMUNE warrant and represent to the other that it
has the full right and authority to enter into this Agreement, and that it
is not aware of any impediment which would inhibit its ability to perform
the terms and conditions imposed on it by this Agreement.
7.2 UNIVERSITY warrants and represents that the named inventors of
PATENT RIGHTS and any assignees thereof have assigned all right, title and
interest to the PATENT RIGHTS to UNIVERSITY, that UNIVERSITY has not
licensed or assigned any right or interest in or to PATENT RIGHTS to any
third party; and that it has the right to grant the rights granted
hereunder.
7.3 UNIVERSITY covenants, warrants and represents that (i) UNIVERSITY
has not received any information with respect to any challenge by another
as to the validity of the PATENT RIGHTS (ii) UNIVERSITY has not received
any information that any of the PATENT RIGHTS is involved in an
interference action; (iii) except with respect to the filing by Medigene,
Inc. for foreign protection in States, including Germany, UNIVERSITY has
not received any information with respect to any challenge by another to
UNIVERSITY's rights of sole ownership; and (iv) UNIVERSITY represents that
it is taking all steps necessary to secure its exclusive title to the
properties in all countries.
7.4 Except as otherwise expressly set forth in this Section 7, LOYOLA
MAKES NO REPRESENTATIONS AND EXTENDS NO WARRANTIES OF ANY KIND EITHER
EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF
MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE AND VALIDITY OF PATENT
RIGHTS CLAIMS ISSUED OR PENDING.
SECTION 8 - INDEMNIFICATION.
8.1 MEDIMMUNE, its AFFILIATES and SUBLICENSEES shall at all times
during the term of this Agreement indemnify, defend and hold UNIVERSITY its
affiliates and subsidiaries and their Trustees, Officers, Faculty, Medical
and Professional Staff, Employees, Agents and their representatives,
successors, assignees and heirs harmless against all third party claims and
expenses, including legal expenses and reasonable attorneys' fees, arising
out of the death of or injury to any person or persons or out of any damage
to property and against any other claim, proceeding, demand, expense and
liability of any kind whatsoever resulting from utilization of the PATENT
RIGHTS in the research, development, evaluations, production, manufacture,
(PAGE 11)
sale, use, lease, consumption or advertisement of the PRODUCTS by
MEDIMMUNE, its AFFILIATES and SUBLICENSEES except for any claims or
expenses arising out of the negligence or willful misconduct of UNIVERSITY
or its affiliates and subsidiaries and their Trustees, Officers, Faculty,
Medical and Professional Staff, Employees, Agents and their
representatives, successors, assignees and heirs.
8.2 MEDIMMUNE and its SUBLICENSEES shall maintain reasonable levels of
product liability insurance available at commercially reasonable rates, at
its expense, to comply with its obligations to UNIVERSITY under this
section as soon as it has commercialized PRODUCT(s). UNIVERSITY shall have
the right to require such insurance policies to be made available for the
UNIVERSITY's inspection.
SECTION 9 - ASSIGNMENT; SUCCESSORS.
9.1 This Agreement shall not be assignable by either of the parties
without the prior written consent of the other party (which consent shall
not be unreasonably withheld), except that MEDIMMUNE without the consent of
UNIVERSITY may assign this Agreement to an AFFILIATE or to a successor in
interest or transferee of all or substantially all of its human papilloma
virus business. Any other assignment by MEDIMMUNE without UNIVERSITY'S
approval will be null and void.
9.2 Subject to the limitations on assignment herein, this Agreement
shall be binding upon and inure to the benefit of said successors in
interest and assigns of MEDIMMUNE and UNIVERSITY. Any such successor or
assignee of a party's interest shall expressly assume in writing the
performance of all the terms and conditions of this Agreement to be
performed by said party and such Assignment shall not relieve the Assignor
of any of its obligations under this Agreement.
SECTION 10 - TERMINATION.
10.1 Except as otherwise specifically provided herein and unless sooner
terminated pursuant to Paragraph 10.2 or 10.3 of this Agreement, this
Agreement and the licenses and rights granted thereunder shall remain in
full force and effect until the expiration of the last to expire PATENT
RIGHT at which time MEDIMMUNE shall have a fully paid-up noncancellable
license.
10.2 Except as qualified by Paragraph 10.7, MEDIMMUNE shall have the
right to terminate this Agreement or terminate its license under this
Agreement, in one or more countries, upon sixty (60) days prior written
notice.
10.3 Upon material breach of any material provisions of this Agreement
by either party to this Agreement, in the event the breach is not cured
within sixty (60) days after written notice to the breaching party by the
other party, in addition to any other remedy it may have, the other party
at its sole option may terminate this Agreement, provided that such other
party is not then in breach of this Agreement.
(PAGE 12)
10.4 If MEDIMMUNE shall cease to carry on its business, this Agreement
shall terminate upon notice by UNIVERSITY. or: In the event that
MEDIMMUNE shall become insolvent, shall make an assignment for the benefit
of creditors, or shall have a petition in bankruptcy filed for or against
it, UNIVERSITY shall have the right to terminate this entire Agreement
immediately upon giving MEDIMMUNE written notice of such termination.
10.5 Except as provided in Section 10.4, in the event there is a
disagreement between the parties as to whether or not a material breach has
occurred, this Agreement shall not terminate until such disagreement has
been finally determined by arbitration as provided in Section 11.2 herein.
10.6 Upon any termination of this Agreement MEDIMMUNE shall be entitled
to but not be obligated to finish any work-in-progress which is completed
within six (6) months of termination of this Agreement and to sell any
completed inventory of a PRODUCT covered by this Agreement which remains on
hand as of the date of the termination, so long as MEDIMMUNE pays to
UNIVERSITY the royalties applicable to said subsequent sales in accordance
with the same terms and conditions as set forth in this Agreement.
10.7 In the event that this Agreement is terminated, any sublicense
granted by MEDIMMUNE under this Agreement shall remain in full force and
effect between the SUBLICENSEE and UNIVERSITY, except that UNIVERSITY's
obligations thereunder shall be no greater than UNIVERSITY's obligations
under this Agreement. At the request of MEDIMMUNE, UNIVERSITY shall
acknowledge to a SUBLICENSEE UNIVERSITY's obligations to the SUBLICENSEE
under this paragraph 10.6.
10.8 The obligations of Sections 3 and 8, as well as Paragraphs 2.4,
10.5, 10.6, 10.7, 10.8 and 11.4 shall survive any termination of this
Agreement.
10.9 Upon termination of this Agreement for any reason, nothing herein
shall be construed to release either party from any obligation that matured
prior to the effective date of such termination.
SECTION 11 - GENERAL PROVISIONS.
11.1 The relationship between UNIVERSITY and MEDIMMUNE is that of
independent contractors. UNIVERSITY and MEDIMMUNE are not joint venturers,
partners, principal and agent, master and servant, employer or employee,
and have no relationship other than as independent contracting parties.
UNIVERSITY shall have no power to bind or obligate MEDIMMUNE in any manner.
Likewise, MEDIMMUNE shall have no power to bind or obligate UNIVERSITY in
any manner.
11.2 Any matter or disagreement under this Agreement, which cannot be
resolved by the parties shall be submitted to a mutually selected single
arbitrator to so decide any such matter or disagreement. The arbitrator
shall conduct the arbitration in English in accordance with the Rules of
the American Arbitration Association ("AAA"). If the parties are unable to
mutually select an arbitrator, the arbitrator shall be selected in
accordance with the procedures of the AAA. The arbitrator shall have no
power to add to, subtract from or modify the terms of this Agreement. The
(PAGE 13)
decision and award rendered by the arbitrator shall be final and binding.
Judgment upon the award may be entered in any court having jurisdiction
thereof. Any arbitration pursuant to this section shall be held in
Washington, D.C. or such other place as may be mutually agreed upon in
writing by the parties.
11.3 This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and supersedes all
prior agreements in this respect. There shall be no amendments or
modifications to this Agreement, except by a written document which is
signed by both parties.
11.4 This Agreement shall be construed and enforced in accordance with
the laws of the State of Illinois, U.S.A. without reference to its choice
of law principles.
11.5 The headings in this Agreement have been inserted for the
convenience of reference only and are not intended to limit or expand on
the meaning of the language contained in the particular article or section.
11.6 Any delay in enforcing a party's rights under this Agreement or
any waiver as to a particular default or other matter shall not constitute
a waiver of a party's right to the future enforcement of its rights under
this Agreement, excepting only as to an expressed written and signed waiver
as to a particular matter for a particular period of time.
11.7 Notices. Any notices given pursuant to this Agreement shall be in
writing and shall be deemed delivered upon the earlier of (i) when received
at the address set forth below, or (ii) three (3) business days after
mailed by certified or registered mail postage prepaid and properly
addressed, with return receipt requested, or (iii) when sent, if sent, by
facsimile, as confirmed by certified or registered mail. Notices shall be
delivered to the respective parties as indicated:
<TABLE>
<CAPTION>
<S> <C>
To MEDIMMUNE: MEDIMMUNE, Inc.
35 West Watkins Mill Road
Gaithersburg, MD 20878
Attn: Office of Business Development
Copy to: Carella, Byrne, Bain, Gilfillan,
Cecchi, Stewart & Olstein
6 Becker Farm Road
Roseland, New Jersey 07068
Fax No.: (201) 994-1744
Attn: Elliot M. Olstein, Esq.
To UNIVERSITY: Office of University Research Services
Loyola University of Chicago
820 North Michigan Avenue
Chicago, IL 60611
</TABLE>
(PAGE 14)
11.8 MEDIMMUNE shall not use the name of Loyola University of Chicago,
or of any of their employees in conjunction with such employee's positions
with UNIVERSITY, or any adaptation thereof, in any advertising,
promotional, or sales literature without prior written consent obtained
from an authorized officer of the UNIVERSITY in each case, except that
MEDIMMUNE may state that it has received from UNIVERSITY one or more of the
patents and/or applications comprising the PATENT RIGHTS. Failure by
MEDIMMUNE to comply with this restriction shall be deemed a material breach
of this Agreement. Such material breach shall be deemed cured if the
offending use is terminated within ninety (90) days of MEDIMMUNE'S receipt
of a written notice from UNIVERSITY.
11.9 All terms and conditions of this Agreement regarding business
matters, including but not limited to payments and royalty rates shall be
held in confidence by each party to the extent permitted by law unless
authorized in writing by the other party, except as may be required by law,
rule or regulation or in connection with a governmental filing or
financing.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
set forth above.
<TABLE>
<CAPTION>
<S> <C>
MEDIMMUNE, INC. LOYOLA UNIVERSITY OF CHICAGO
By:/s/David M. Mott By:/s/John J. Piderit, S.J.
Name: David M. Mott Name: John J. Piderit, S.J.
Title: President Title: President
</TABLE>
(PAGE 15)
EXHIBIT 10.81
RESEARCH COLLABORATION AND LICENSE AGREEMENT
This Agreement, dated December 10, 1997, is by and between SMITHKLINE
BEECHAM PLC (hereinafter referred to as "SB"), a company whose registered
office is at New Horizons Court, Brentford, Middlesex, TW89EP, United
Kingdom, and MEDIMMUNE, INC., a Delaware Corporation, located at 35 West
Watkins Mill Road, Gaithersburg, Maryland 20878 ("MEDIMMUNE").
WHEREAS, MEDIMMUNE is the owner or licensee of certain technology,
including, but not limited to patents and proprietary know-how, relating to
vaccines for the human papilloma virus (AHPV@); and
WHEREAS, SB desires to obtain, and MEDIMMUNE desires to grant to SB, a
worldwide, exclusive right and license in and to such technology, on the
terms and conditions set forth in this Agreement; and
WHEREAS, SB will collaborate with MEDIMMUNE in a research and
development program relating to (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
HPV Vaccines to support ongoing development thereof and to obtain
intangible rights thereto, and
WHEREAS SB will contribute certain adjuvant technology and certain HPV
technology to the research program.
NOW, THEREFORE, in consideration of the mutual promises and other good
and valuable consideration, the parties agree as follows:
SECTION I.. - DEFINITIONS.
The terms used in this Agreement have the following meaning:
1.1 "Affiliate", with respect to any Party, shall mean any Person
whether de jure or de facto, controlling, controlled by, or under common
control with, such Party. For these purposes, "control" shall refer to (a)
the possession, directly or indirectly, of the power to direct the
management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise or (b) the ownership, directly or
indirectly, of at least 50% (or such lesser percentage which is the maximum
allowed to be owned by a foreign corporation in a particular jurisdiction
of the voting securities or other ownership interest of a Person.
1.2 "Annual Research Plan" shall mean the research plan prepared
annually during the term of the Research Program as provided in Section
4.2.
1.3 "Antigen" shall mean (i) HPV antigens and/or (ii) HPV proteins
and/or (iii) other physical forms based on such antigens, such as peptides
and/or nucleic acid(s) (DNA, RNA) delivered in any form including
recombinant vectors.
1.4 "Budget" shall have the meaning assigned to such term in Section
4.2.
1.5 "Confidential Information" shall have the meaning assigned to
such term in Section 11.2.
(PAGE 1)
1.6 "Effective Date" shall mean the date set forth in Section 2.1 of
this Agreement.
1.7 "EMEA" shall mean the European Agency for the Evaluation of
Medicinal Products.
1.8 "FDA" shall mean the United States Food and Drug Administration,
or the successor thereto.
1.9 "First Commercial Sale" shall mean, with respect to any Vaccine
Product in a country of the Territory, the first sale by SB, its
Affiliates, distributors or sublicensees to a Third Party of such Vaccine
Product, in such country anywhere in the Territory after all required
marketing and pricing approvals have been granted, or otherwise permitted,
by the governing health authority of such country. "First Commercial Sale"
shall not include the sale of any Vaccine Product for use in clinical
trials or for compassionate use prior to the grant of regulatory approval.
1.10 "HPV Vaccine" shall mean a vaccine for the prevention, control or
treatment of human papilloma virus infection in humans in any formulation,
configuration or delivery system or a product or process for the diagnosis
of HPV infection in humans.
1.11 "IND" shall mean an investigational new drug application filed
with the FDA for approval to commence human clinical trials, or the
equivalent application in other countries or regulatory jurisdictions.
1.12 "Invention" shall mean any new or useful process, manufacture,
compound or composition of matter, patentable or unpatentable, or any
improvement thereof, conceived or first reduced to practice, by either
Party during the conduct of the Research Program (i) which relate to or are
derived from the Research Program, or (ii) which are necessary or useful to
make, use, develop or sell HPV Vaccine.
1.13 "Major Markets" shall have the meaning assigned thereto in
Section 6.3.
1.14 "Joint Invention" shall mean any Invention for which it is
determined, in accordance with applicable United States patent law, that
both: (i) one or more employees or agents of MEDIMMUNE or any other
persons obliged to assign such Invention to MEDIMMUNE, and (ii) one or more
employees or agents of SB or any other persons obliged to assign such
Invention to SB, are joint inventors of such Invention.
1.15 "MEDIMMUNE Patents" shall mean any and all patents or patent
applications anywhere in the world, including but not limited to any
division, continuation, continuation-in-part or reissue, re-examination,
patent extension, or Supplementary Protection Certificate in each case
which is owned by or licensed to MEDIMMUNE and in and to which MEDIMMUNE
has a transferable interest on the Effective Date or at any time during the
term of this Agreement (including those arising from the Research Program)
insofar as it contains one or more claims to MEDIMMUNE Technology or to a
Joint Invention. Schedule A contains the list of MEDIMMUNE patents
licensed to and/or owned by MEDIMMUNE on the Effective Date.
(PAGE 2)
1.16 The term "MEDIMMUNE Technology" shall mean information, know-how
and materials, including, but not limited to, pharmaceutical, chemical and
biological products, technical and non-technical data and information (i)
owned by MEDIMMUNE and/or to which MEDIMMUNE has a transferable interest on
the Effective Date and/or at any time during the term of this Agreement and
(ii) which relate to the field of (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) HPV Vaccines and/or which arise from the Research Program, and
in each case which are necessary or useful for the development,
manufacture, use or sale of an HPV Vaccine.
1.17 "Net Sales" (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
1.18 "Party" shall mean MEDIMMUNE or SB and, when used in the plural,
shall mean MEDIMMUNE and SB.
1.19 "Patent" shall mean individually and collectively SB Patents and
MEDIMMUNE Patents.
1.20 "Person" shall mean any natural person, corporation, firm,
business trust, joint venture, association, organization, company,
partnership or other business entity, or any government or any agency or
political subdivision thereof.
1.21 "Process" shall mean any process or method for the production,
manufacture or use of any HPV Vaccine.
1.22 "Product Registrations" shall mean the approvals or registrations
of Vaccine Products in any country in the Territory that are received by SB
during the term of this Agreement.
1.23 "Research Program" shall mean the research program directed to
the research, development, and manufacture of a therapeutic and/or
prophylactic (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) Vaccine Product up
to and including Phase II clinical trials to be conducted by MEDIMMUNE in
collaboration with SB pursuant to Section 4.2 of this Agreement..
1.24 "Research Term" shall have the meaning assigned to such term in
Section 4.7.
1.25 "Royalty Term" shall mean, (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED)
1.26 The term "SB Patents" shall mean any patent or patent application
anywhere in the world, including but not limited to any division,
continuation, or continuation-in-part reissue, re-examination, patent
extension, or Supplementary Protection Certificate which is owned by or
licensed to SB or its Affiliates and in and to which SB or its Affiliates
has a transferable interest on the Effective Date or at any time during the
term of this Agreement insofar as it contains one or more claims to SB
Special Technology or to a Joint Invention. SB or its Affiliates shall
have the right but not the obligation to file a Supplementary Protection
Certificate pertaining to SB Patents.
(PAGE 3)
1.27 The term "SB Technology" shall mean information and materials,
including, but not limited to, pharmaceutical, chemical and biological
products, technical and non-technical data and information owned by SB or
its Affiliates or to which SB or its Affiliates has a transferable interest
on the Effective Date and/or during the term of this Agreement which
relates to the field of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) HPV
Vaccines and which are necessary or useful in the execution of the Research
Program, as defined by the Steering Committee.
1.28 "SB Special Technology" shall mean information and materials,
including, but not limited to, pharmaceutical, chemical and biological
products, technical and non-technical data and information owned by SB or
its Affiliates or to which SB or its Affiliates has a transferable interest
on the Effective Date and/or prior to termination of this Agreement which
is derived from use of MEDIMMUNE Technology provided to SB or its
Affiliates or which comes out of the Research Program.
1.29 "Steering Committee" shall mean the entity organized and acting
pursuant to Section 3.
1.30 "Sublicensee" shall mean a Third Party to which SB has granted
sublicense and/or sub-sublicense rights under the licenses and/or
sublicenses granted to SB hereunder.
1.31 "Supplementary Protection Certificate" shall mean the
supplementary protection certificate for Medicinal products and their
equivalents provided under Control Regulation (EEC) No. 1768/92 of June 18,
1992.
1.32 "Territory" shall mean the entire world.
1.33 "Third Party" shall mean any Person who or which is neither a
Party nor an Affiliate of a Party.
1.34 "Vaccine Product" shall mean an HPV Vaccine (x)covered in whole
or in part by a MEDIMMUNE Patent or an SB Patent which covers SB Special
Technology and/or (y) which incorporates or is derived from the use of
MEDIMMUNE Technology and/or SB Special Technology. (CONFIDENTIAL TREATMENT
HAS BEEN REQUESTED).
1.35 "Interpretative Rules" For the purpose of this Agreement, except
as otherwise expressly provided herein or unless the context otherwise
requires : (a) defined terms include the plural as well as the singular and
the use of any gender shall be deemed to include the other gender. (b)
references to "Articles", "Sections" and other subdivisions and to
"Schedules" and "Exhibits" without reference to a document, are to
designated Articles. Sections and other subdivisions of and to Schedules
and Exhibits to this Agreement; (c) the use of the term 'including' means
'including but not limited to'; and (d) the words 'herein', 'hereof',
'hereunder' and other words of similar import refer to this Agreement in
whole and not to any particular provision.
(PAGE 4)
2. GRANT OF LICENSES AND EFFECTIVE DATE.
2.1 (a) The obligations of each of SB and MEDIMMUNE to consummate
the transactions contemplated by this Agreement shall be subject to the
fulfillment of the condition that the waiting period (and any extension
thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder applicable to
the transaction contemplated hereby shall have expired or shall have been
terminated and that no action shall have been instituted, or shall be
threatened or pending, by the United States Justice Department or the
Federal Trade Commission challenging or seeking to enjoin the consummation
of the transactions contemplated by this Agreement, which action shall not
have been withdrawn or terminated. The date which is the later of January
2, 1998 or the date on which the aforesaid condition has been satisfied is
referred to herein as the "Effective Date".
(b) The Parties agree to promptly complete any filings with
respect to the contingencies of Section 2.1(a) and to exert reasonable
efforts to fulfill the conditions contemplated by Section 2.1(a).
(c) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
2.2 License.
(a) MEDIMMUNE hereby grants to SB and its Affiliates an
exclusive, royalty-bearing license throughout the Territory, with the right
to grant sublicenses in accordance with the terms of this Agreement, under
MEDIMMUNE's interest in the MEDIMMUNE Patents, MEDIMMUNE Technology and
Joint Inventions, to develop, register, use, make, have made, import,
export, offer to sell, sell and have sold HPV Vaccines and/or Antigens
and/or Process.
(b) SB agrees that it will use MEDIMMUNE Technology and
MEDIMMUNE Patents only as licensed under this Agreement.
(c) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
2.3 Sublicensing by SB.
(a) SB shall have the right to grant sublicenses to a Third
Party under the license granted pursuant to Section 2.2 provided that: (i)
SB shall guarantee and be responsible for the making of all payments due,
and the making of reports under this Agreement, by reason of milestones
achieved with respect to any Vaccine Product and sales of any Vaccine
Products by its Sublicensees and their compliance with all applicable
licensing terms of this Agreement to the extent that they are applicable to
a Sublicensee; and (ii) each Sublicensee agrees in writing to comply
withSections 8.3, 8.4, 10, 11.2 and 11.3 of this Agreement. It is
understood that SB shall not grant a sublicense to a single Third Party of
all of its rights in the Major Markets under Section 2.2 without the
written consent of MEDIMMUNE.
(b) SB hereby unconditionally guarantees the performance of
any of its Affiliates and its Sublicensees hereunder as if they were
signatories to this Agreement to the extent the performance or lack of
performance is a breach of this Agreement.
(PAGE 5)
(c) Any sublicense granted by SB to a Third Party shall
include a provision prohibiting further sublicenses and a provision
terminating the sublicense when the license to SB terminates.
2.4 Third Party Agreements
(a) To the extent MEDIMMUNE Technology and MEDIMMUNE Patents
licensed by SB under this Agreement are rights which MEDIMMUNE has licensed
from a Third Party, under an agreement with such Third Party listed in
Schedule B ("Third Party Agreement(s)"), SB understands and agrees as
follows:
(i) The rights licensed to SB by MEDIMMUNE are subject to
the terms, limitations, restrictions and obligations of the Third Party
Agreement(s).
(ii) SB will comply with all of the terms, obligations,
limitations and restrictions of the Third Party Agreement(s) which are
applicable to a sublicensee under such Third Party Agreements. In the case
of the sublicense granted by this Agreement to SB under the (CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED) Agreement (as defined below), the sublicense
granted by SB shall terminate or be converted to a license directly between
SB and (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) at the option of SB upon
termination of this Agreement provided that such conversion is subject to
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) approval and contingent upon
acceptance by SB of the provisions of the (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) License Agreement.
(iii) SB will cooperate with MEDIMMUNE in furnishing
all information and data which are reasonably required to enable MEDIMMUNE
to meet its reporting requirements under the Third Party Agreements.
(iv) To the extent the MEDIMMUNE Technology and MEDIMMUNE
Patents licensed by SB under this Agreement are rights that MEDIMMUNE has
licensed under the (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) License
Agreement, SB acknowledges and agrees that the obligations to (CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED) set forth in Paragraphs 4.01, 6.01, 8.01,
8.02, 10.05, 11.06-11.08 and 12.08 of the (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) License Agreement, the text of which Paragraphs are attached as
Exhibit A shall be binding upon SB as if it were a party thereto.
(v) The Parties acknowledge the rights of a sublicensee
under Section 10.5 of the (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
Agreement and Section 13.7 of the (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) Agreement as referred to in Schedule B.
(b) The Third Party Agreements which exist on the Effective
Date are listed in Exhibit B and SB acknowledges receipt of such Third
Party Agreements. MEDIMMUNE warrants that the Third Party Agreements
listed in Exhibit B are all the agreements entered into by MEDIMMUNE with
respect to HPV Vaccines and no further modifications to said agreements
have been made up to the Effective Date and said agreements are in full
force and effect. As of the date of this Agreement, to the knowledge of
MEDIMMUNE, MEDIMMUNE is not in breach of any such Third Party Agreements,
provided, however, that
(PAGE 6)
a breach of this warranty shall only occur if a Third Party Agreement is
terminated as a result of such breach.
(c) Upon mutual agreement of the Parties, MEDIMMUNE may
terminate any or all Third Party Agreements and the licenses granted to SB
thereunder. After First Commercial Sale of a Vaccine Product in any of the
following countries: United States, United Kingdom, France, Germany, Italy
or Spain, SB may terminate its sublicense under the following agreements
and its payment obligations and other obligations hereunder with respect to
such agreements: (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)and the
payment obligations thereunder. Upon termination of any such sublicense,
SB shall return to MEDIMMUNE all information and materials which were
provided to SB pursuant to such sublicense.
3 STEERING COMMITTEE.
3.1 Members. The Parties shall establish the Steering Committee
(the "Steering Committee"), which shall be comprised of six members, three
representatives designated by each Party. The members of the Steering
Committee may be represented at any meeting by a designee appointed by such
member for such meeting. The chairperson of the Steering Committee shall
be designated annually on an alternating basis between the Parties. The
initial chairperson shall be selected by SB. The Party not designating the
chairperson shall designate one of its representative members as secretary
to the Steering Committee for such year. Each Party shall be free to
change its representative members on notice to the other Party.
3.2 Responsibilities. The Steering Committee shall be responsible
for overseeing the Research Program in a manner which is consistent with
the terms and conditions of this Agreement, including, without limitation:
(a) to evaluate and determine scientific criteria to be
implemented under the Research Program;
(b) to review, approve and modify any Annual Research Plan,
and any Budget included therein;
(c) to review and evaluate progress under the Research
Program;
(d) to provide for the exchange of information and materials
relating to the Research Program; and
(e) to coordinate and monitor publication of research results
arising from the Research Program.
3.3 Meetings. The Steering Committee shall meet at least four
times every calendar year, and more frequently as the Parties deem
appropriate, on such dates and at such times as the Parties shall agree.
Meetings may also be called by either Party, on 10 days written notice to
the other, unless such notice is waived by the Parties. The meetings shall
alternate between the offices of the Parties unless the Parties otherwise
agree. The chairperson shall be responsible for sending notices of
meetings to all members. The Steering Committee may also convene or be
polled or consulted
(PAGE 7)
from time to time by means of telecommunications, video conferences or
correspondence, as deemed necessary or appropriate. Two weeks prior to
each of the four Steering Committee meetings, a summary of progress under
the Research Program shall be provided by MEDIMMUNE to the members of the
Steering Committee.
3.4 Decisions.
(a) All decisions of the Steering Committee shall be made by
unanimous agreement of the members present in person or by telephone at any
meeting, with the MEDIMMUNE members cumulatively having one vote and the SB
members cumulatively having one vote. A quorum for a meeting shall require
at least one representative from MEDIMMUNE and at least one representative
from SB.
(b) In the event that unanimity cannot be reached by the
Steering Committee with respect to a matter that is subject to its decision-
making authority, then the matter shall be referred for further review and
resolution to the Senior Vice President of SmithKline Beecham Biologicals
SA, rue de l'Institut 89, 1330 Rixensart, or such other similar position
designated by SB from time to time, and the President at MEDIMMUNE, or such
other similar position designated by MEDIMMUNE from time to time. The
designated officers of each Party shall use reasonable efforts to resolve
the matter within 30 days after the matter is referred to them.
(c) In the event the designated officers fail to resolve the
matter in accordance with paragraph (b) above, the decision of SB's Senior
Vice President shall prevail in all cases, provided that in each case such
decision of the officer of SB is consistent with the terms and conditions
of this Agreement.
(d) Notwithstanding the foregoing, neither Party shall be
required to conduct any clinical trials where such Party has significant
safety or ethical objections thereto.
3.5 Minutes. Within 15 days after each Steering Committee meeting,
the secretary of the Steering Committee shall prepare and distribute
minutes of the meeting, which shall provide a description in reasonable
detail of the discussions had at the meeting and a list of any actions,
decisions or determinations approved by the Steering Committee. The
secretary shall be responsible for circulation of all draft and final
minutes. Draft minutes shall be first circulated to the chairperson,
edited by the chairperson and then circulated in final draft form to all
members of the Steering Committee sufficiently in advance of the next
meeting to allow adequate review and comment prior to the meeting. Minutes
shall be approved or disapproved, and revised as necessary, at the next
meeting. Final minutes shall be distributed to the members of the Steering
Committee.
3.6 Term. The Steering Committee shall exist until the termination
or expiration of the Research Program or for such longer period as
necessary to perform the responsibilities assigned to it under this
Agreement.
3.7 Expenses. Each Party shall be responsible for all travel and
related costs for its representatives to attend meetings of, and otherwise
participate on, the Steering Committee.
(PAGE 8)
4. COLLABORATIVE RESEARCH PROGRAM.
4.1 Exchange of Data and Know-How. Within forty-five (45) days
after the first meeting of the Steering Committee, MEDIMMUNE and SB shall
deliver to each other copies of all MEDIMMUNE Technology and SB Technology
respectively in their possession available as of such date which in each
case is necessary for the conduct of the Research Program. During the term
of this Agreement, each party shall provide promptly to the other any
subsequently acquired MEDIMMUNE Technology, SB Special Technology and SB
Technology as such is developed or acquired provided that the transfer of
SB Technology shall be subject to the determination of the Steering
Committee. SB will agree to use its adjuvant and formulation technology in
the Research Program but will not be obligated to disclose such adjuvant or
formulation technology to MEDIMMUNE, except as may be required by
applicable regulatory, laws, rules or regulations.
4.2 Scope of Research Program.
(a) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(b) Within sixty (60) days of the signing of this Agreement
with respect to the first year of the Research Term, and thereafter on each
anniversary of the date of this Agreement during the Research Term, the
Steering Committee shall prepare and provide to each Party, in the form and
substance mutually acceptable to each Party, a detailed description of the
specific Research Program to be undertaken during the upcoming year, which
shall include a reasonably detailed description of the goals and scope of
such research, a research plan and a budget (the "Budget"), which shall be
equal to the amount reinvested by MEDIMMUNE pursuant to the provisions
contained in Section 4.3, that details the equipment, materials, and
personnel to be provided by MEDIMMUNE at its fully allocated cost as well
as Third Party contractors to support the research described in such
proposal (an "Annual Research Plan"). Once agreed upon, each such Annual
Research Plan shall be signed and dated by both Parties. The Annual
Research Plan for the first year of the Research Term shall be signed by
the Parties simultaneously within sixty (60) days of execution of this
Agreement. The Steering Committee shall commence preparing each Annual
Research Plan (other than the first Annual Research Plan) not later three
months prior to each anniversary of this Agreement during such term.
Exhibit C is a preliminary outline of the Annual Research Plan for 1998.
(c) If the Steering Committee fails to agree in accordance
with the provisions of Section 3.4 on an Annual Research Plan: (i) SB shall
nevertheless continue to provide payment to MEDIMMUNE in accordance with
Section 6.1 (b), (ii) MEDIMMUNE shall nevertheless continue to conduct the
Research Program in accordance with the goals and scope of such research as
reasonably determined by SB, and in accordance with the Research Program as
described in Schedule C provided that such goals and scope shall be with
respect to Vaccine Products within the scope of the level of reinvestment
committed by MEDIMMUNE pursuant to Section 4.3 and within the scope of the
Research Program conducted to date, and (iii) MEDIMMUNE shall continue to
reinvest the amounts set forth in Section 4.3.
4.3 MEDIMMUNE shall reinvest the payments received from SB pursuant
to Section 6.1(b) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED), with a
(PAGE 9)
minimum reinvestment of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). If
mutually agreed upon by the Parties in the Steering Committee and assuming
SB can perform the work in a cost effective and timely manner, up to
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). MEDIMMUNE shall use said
reinvestment for the execution of the Research Program.
4.4 Conduct of Research Program. During the Research Term,
MEDIMMUNE shall:
(a) undertake Research Program with SB as set forth in
Schedule C as further completed in any Annual Research Plan, and such other
activities which, from time to time, the Steering Committee decides as
being necessary for the success of the Research Program, provided that such
decision is consistent with the Research Program and the terms and
conditions of this Agreement, including, but not limited to:
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(ii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(iii)(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(iv) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED),
(v) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(vi) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(b) use all reasonable best efforts and proceed diligently to
perform the work set out for MEDIMMUNE to perform in the Annual Research
Plan. It is the intention of the parties to proceed in a cost-effective
manner and to achieve in a timely manner the objectives of the Research
Program.
(c) conduct the Research Program in accordance with the Annual
Research Plan in a good scientific manner, and in compliance in all
material respects with all requirements of applicable laws, rules and
regulations;
(d) promptly provide an invention disclosure report to SB with
respect to any Invention or Joint Invention;
(e) allow representatives of SB, upon reasonable notice and
during normal business hours, to visit the facilities of MEDIMMUNE where
the Research Program is being conducted, to facilitate transfer of
MEDIMMUNE Technology and to consult informally, during such visits and by
telephone, with MEDIMMUNE's personnel performing work on the Research
Program.
(f) apply the reinvestments detailed under Section 4.3 to
conduct the Research Program, carry out its obligations in connection with
the Research Program and accomplish the goals and objectives for the
Research Program ;
(g) It is expressly understood and agreed that MEDIMMUNE shall
not be required to perform research under the Research Program in any year
(PAGE 10)
beyond the total amount of reinvestments committed by MEDIMMUNE pursuant to
Section 4.3 for that year; and
(h) SB understands and acknowledges and agrees that the
Research Program is experimental and research under the Research Program
may not achieve the overall goals in any year or the overall goals of the
Research Program and that MEDIMMUNE has no liability with respect to any
failure of the Research Program to develop a Vaccine Product.
4.5 Records.
(a) MEDIMMUNE shall maintain records, in sufficient detail and
in good scientific manner, which shall be complete and accurate in all
material respects and shall fully and properly reflect all work done and
results achieved in the performance of the Research Program (including all
data in the form required under all applicable laws and regulations).
MEDIMMUNE shall provide a quarterly report.
(b) SB shall have the right, during normal business hours and
upon reasonable notice, to inspect and copy all such records of MEDIMMUNE
relating to the Research Program to the extent reasonably required for the
performance of its obligations under this Agreement. SB shall maintain
such records and the information contained therein in confidence in
accordance with Section 11.2 and shall not use such records or information
except to the extent otherwise permitted by this Agreement.
4.6 Inventions.
Joint Inventions shall be jointly owned by both parties. Inventions
which arise from the Research Program and which are made by an employee or
agent of MEDIMMUNE, solely or jointly, other than with an employee or agent
of SB shall be owned by MEDIMMUNE; Inventions which arise from the
Research Program and which are made by an employee or agent of SB, solely
or jointly other than with an employee or agent of MEDIMMUNE shall be owned
by SB. Except as provided otherwise herein, SB and MEDIMMUNE shall retain
their respective unrestricted rights to make, have made, use and sell such
Inventions which are owned by them solely.
4.7 Term of Research Program. The term of the Research Program
shall commence on January 1, 1998, and, subject to Section 4.8 shall
continue, except as otherwise provided in this Agreement, for a period of
five years thereafter (the "Research Term").
4.8 Termination of Research Program.
(a) In the event that MEDIMMUNE fails to use reasonable best
efforts to perform its research under the Research Program and such failure
materially affects the Research Program, such failure shall entitle SB to
give notice to MEDIMMUNE specifying the nature of the default and requiring
it to cure such default. If such default is not cured within 60 days after
the receipt of such notice (or, if such default cannot be cured within such
60-day period, if MEDIMMUNE does not commence and diligently continue
actions to cure such default), SB shall be entitled to terminate this
Agreement under Section 12.2 or the Research Program by giving written
notice to take effect immediately upon delivery of such notice. SB's right
(PAGE 11)
to terminate the Research Program or 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. The termination of the
Research Program or this Agreement is the sole and exclusive remedy for any
such default. The termination of the Research Program or this Agreement
shall terminate SB's payment obligation under Section 6.1(b) except for the
portion thereof which has been committed to the funding of Third Parties
under the Research Program. To the extent MEDIMMUNE has received payments
under Section 6.1(b) which have been allocated to the Research Program
pursuant to Section 4.3 but which are not committed to Third Parties and
which have not been spent on the date of termination, such funds shall be
refunded to SB.
(b) Upon termination of the Research Program pursuant to
Section 4.8 (a) without termination of the Agreement, MEDIMMUNE shall and
shall cause its agents and Affiliates to promptly transfer to SB copies of
all data, reports, records and materials in MEDIMMUNE's possession or
control which relate to the scientific aspects of the Research Program.
Thereafter, SB shall have no further obligation to make payments under
Section 6.1(b). (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(c) Termination of the Research Program pursuant to this
Section 4.8 shall not affect SB's obligations to pay royalties, milestones
and other fees and payments as provided hereafter.
(d) For the avoidance of doubt, termination of the Research
Program shall not terminate any rights or obligations of the Parties under
this Agreement other than those set forth in this Section 4.8.
5. DEVELOPMENT AND COMMERCIALIZATION.
5.1 Development Efforts by SB. Upon the completion of the earlier
of the end of the Research Term or Phase II clinical trials with respect to
each Vaccine Product by MEDIMMUNE pursuant to the Research Program, SB
shall use reasonable best efforts (including, but not limited to, the
conduct of clinical trials, filing for Product Registrations and for other
regulatory approvals, diligently pursuing such approvals and, upon the
grant of regulatory approval, marketing the Vaccine Products) to develop
and commercialize such Vaccine Products throughout the Territory and
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). SB shall make all
determinations regarding any development and commercialization activities
under this Section 5.1 in the sole and absolute discretion and control of
SB, provided that such activities are consistent with the efforts required
under this Section.
(i) During the term of the Agreement, MEDIMMUNE shall supply
MEDIMMUNE Technology and shall provide to SB technical assistance within
its area of expertise concerning the development, production and
commercialization of HPV Vaccine. Provision of such technical assistance
shall include but not be limited to visits by MEDIMMUNE personnel or agents
to SB at SB's expense and visits by SB personnel to MEDIMMUNE at SB's
expense.
(PAGE 12)
5.2 Responsibilities of SB
SB will be responsible for the following activities without limitation
at SB's cost and expense:
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(ii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(iii)(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(iv) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(v) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(vi) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(vii)(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
5.3 Liability by SB.
Except by reason of force majeure as provided in Section 13.1,
in the event that SB fails materially to satisfy its development and/or
marketing obligations under Sections 5.1 and 5.2 with respect to Vaccine
Product in any country of the Major Markets, MEDIMMUNE shall have at its
sole remedy the right and option to terminate this Agreement for the
concerned country of the Major Markets in its sole discretion in accordance
with Section 12.2(a).
5.4 Reporting.
SB shall provide to MEDIMMUNE an annual project status report
(including the status of regulatory approvals) of the development, and
registration of each Vaccine Product. All such reports by SB shall be
treated as Confidential Information of SB and shall be subject to the
restrictions imposed under Section 11.2.
5.5 MEDIMMUNE shall have the right to terminate this Agreement in
its entirety if
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
6. FEE; MILESTONE PAYMENTS AND ROYALTIES.
6.1 (a) Fee by SB. In partial consideration of MEDIMMUNE Patents
and MEDIMMUNE Technology resulting from the use of the research performed
by MEDIMMUNE prior to this Agreement and the right to use pre-clinical and
clinical information developed by MEDIMMUNE, SB shall pay MEDIMMUNE a fee
of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) on the Effective Date. In
addition, SB shall purchase MEDIMMUNE Common Stock from MEDIMMUNE for a
purchase price of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) according to
the terms of the Stock Purchase Agreement attached hereto as Schedule D.
(PAGE 13)
(b) In further consideration of MEDIMMUNE Patents and
MEDIMMUNE Technology resulting from the use of the research performed by
MEDIMMUNE prior to this Agreement and the right to use preclinical and
clinical information developed by MEDIMMUNE prior to the Agreement and
rights to future developments of the Vaccine Product undertaken by
MEDIMMUNE during the term of the Agreement, SB agrees to provide a
Technology Access Fee to MEDIMMUNE. Such Technology Access Fee shall be
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED).
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED). Upon mutual agreement of
both parties, the above-mentioned payment schedule of the Technology Access
Fee may be accelerated. In each calendar year, the fee for the year shall
be paid in equal quarterly installments in advance on the first day of
January, April, July and October of each calendar year except the first
payment shall be made on the Effective Date. All payments shall be sent
via wire transfer to a bank account designated by MEDIMMUNE from time to
time. In the event that SB has paid (CONFIDENTIAL TREATMENT HAS BEEN
REQUESTED) under this Section 6.1(b), SB will have met its payment
obligation under this Section 6.1(b). In the event any portion of this
Technology Access Fee is not timely made, all of the remaining fee shall
become due and payable immediately.
6.2 Development Milestone Payments by SB. In partial consideration
of the research performed by MEDIMMUNE prior to this Agreement and the
right to use pre-clinical and clinical information developed by MEDIMMUNE,
SB shall pay MEDIMMUNE the following milestone payments upon the first
occurrence of each event set forth below with respect to the first Vaccine
Product, whether achieved by SB or its Affiliates or its Sublicensees:
(a) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(b) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(c) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(d) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(e) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(f) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(g) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(ii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(iii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(iv) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(v) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(PAGE 14)
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
6.3 Royalties. In partial consideration of the rights and licenses
granted by MEDIMMUNE to SB under this Agreement, during the Royalty Term,
on a country-by-country and Vaccine Product-by Vaccine Product basis, SB
shall pay to MEDIMMUNE a royalty on Net Sales of Vaccine Products in an
amount equal to the following percentages of the specified portions of the
aggregate annual Net Sales of all Vaccine Products sold by SB, its
Affiliates, distributors and its Sublicensees throughout the Territory:
(i) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(ii) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(iii)(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(iv) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
In calculating the royalty due under this Section with respect to Net
Sales of Vaccine Products during any period of less than a calendar year,
the foregoing thresholds for a calendar year Net Sales shall be pro rated
in accordance with the duration of such period.
6.4 Third Party Compensation.
(a) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(b) With respect to any possible future license Agreements
between SB and a Third Party with respect to (CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED) HPV Vaccines, MEDIMMUNE shall notify SB, and SB shall
negotiate such Agreements and decide solely whether such technology is
required. SB shall pay all royalties and other compensation under any such
Agreement and MEDIMMUNE will not enter into such an Agreement without the
consent of SB.
(c) For the avoidance of doubt, SB shall not pay any
compensation or royalty for any Third Party Agreement pertaining to an HPV
Vaccine which (1) MEDIMMUNE enters during the Research Term without the
consent of the Steering Committee or (2) which MEDIMMUNE would enter into
after the Research Term.
(d) In the event that a dispute arises with a Third Party with
respect to the compensation owed to a Third Party under a Third Party
Agreement which is to be paid by SB pursuant to this Section 6.4, the
parties agree to cooperate with each other to reach a fair and equitable
resolution to such dispute.
6.5 Royalty Reduction. The royalties payable to MEDIMMUNE by SB
can be reduced only as follows:
If a Vaccine Product incorporates "Another Vaccine", which
is not covered by a MEDIMMUNE Patent to form a combination
product, then an adjusted royalty will be calculated based on
multiplying the Net Sales of the combination Vaccine Product by
the quotient 1/1+A, where A equals the total number of "Another
Vaccine"
(PAGE 15)
included in the combined product. In no event shall this
adjustment cause the royalty to be applied to less than 50% of
the Net Sales of the combined Vaccine Product. "Another
Vaccine" means a distinct proprietary product and does not
include HPV antigens or adjuvants.
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
6.6 Obligation to Pay Royalties. The obligation to pay royalties to
MEDIMMUNE under this Section 6 is imposed only once with respect to the
same unit of Vaccine Product regardless of the number of Patents pertaining
thereto. SB shall only be entitled to a credit against royalties or a
reduction of the royalty rate once with respect to any Vaccine Product in
any country pursuant to any provision in this Agreement. There shall be no
obligation to pay royalties to MEDIMMUNE under this Section 6 on sales of
Vaccine Products among SB and its Affiliates and its Sublicensees, but in
such instances the obligation to pay royalties shall arise upon the sale by
SB, its Affiliates or its Sublicensees to unrelated Third Parties.
6.7 In addition to all other compensation payable to MEDIMMUNE
under this Section 6, SB shall make a non-creditable minimum annual payment
to MEDIMMUNE of (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) due and payable
on January 1st of each year after termination of the Research Program and
until filing for regulatory approval for a Vaccine Product at the FDA or
its equivalent in the EU.
7. REPRESENTATIONS, WARRANTIES AND COVENANTS.
7.1 Representations and Warranties of Both Parties. Each Party
represents and warrants to the other Party that, as of the date of this
Agreement:
(a) Such Party is duly organized and validly existing under
the laws of the state of its incorporation and has full corporate power and
authority to enter into this Agreement and to carry out the provisions
hereof.
(b) The Third Party Agreements represent all rights and
licenses granted to MEDIMMUNE relating to HPV Vaccine which exist on the
Effective Date and MEDIMMUNE has provided SB with a true and complete copy
of such Third Party Agreements;
(c) MEDIMMUNE has not granted rights under MEDIMMUNE
Technology and/or MEDIMMUNE Patents to any Third Party which is in conflict
with the rights granted to SB pursuant to this Agreement.
(d) MEDIMMUNE acknowledges that in entering into this
Agreement, SB may have relied upon the technical or clinical information
provided to SB by MEDIMMUNE with respect to an (CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED) Vaccine Product. MEDIMMUNE has no present knowledge that
any of the technical or clinical information provided to SB by MEDIMMUNE
with respect to an (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) Vaccine
Product is inaccurate in any material respect.
(PAGE 16)
7.2 EXCEPT WITH RESPECT TO SECTION 2.4(b), MEDIMMUNE MAKES NO OTHER
REPRESENTATION OR WARRANTY HEREUNDER, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR WITH RESPECT TO THE
VALIDITY, ENFORCEABILITY, NON-INFRINGEMENT OF MEDIMMUNE PATENTS.
8. PAYMENTS AND REPORTS.
8.1 Royalty Payments. All royalty payments due hereunder shall be
paid quarterly within thirty (30) days of the end of each calendar quarter.
Each such payment shall be accompanied by a statement, Product-by-Product
and country-by-country, of the amount of Gross Sales, the calculation of
Net Sales and the units of Vaccine Product during such quarter, the amount
of royalties due on such Net Sales, the conversion rates used in converting
to United States Dollars and any other information reasonably requested by
MEDIMMUNE to enable MEDIMMUNE to determine amounts it is owed hereunder.
SB shall also provide MEDIMMUNE with a calculation and a report with
respect to royalties paid on behalf of MEDIMMUNE pursuant to Section 6.4.
8.2 Mode of Payment. All invoices and statements submitted by
MEDIMMUNE shall be stated in U.S. Dollars. SB shall make all payments
required under this Agreement as directed by MEDIMMUNE from time to time in
United States Dollars. Whenever for the purpose of calculating royalties
conversion from any foreign currency shall be required, such conversion
shall be at the average rate of exchange for the applicable calendar
quarter based on the daily rate of exchange published in the Wall Street
Journal, New York edition, for the applicable calendar quarter.
8.3 Records Retention. SB and its Affiliates and its Sublicensees
shall keep complete and accurate records pertaining to the sale of Vaccine
Products in the Territory and covering all transactions from which Net
Sales are derived for a period of three calendar years after the year in
which such sales occurred, and in sufficient detail to permit MEDIMMUNE to
confirm the accuracy of royalty payments due hereunder.
8.4 Audit Request. At the request and expense (except as provided
below) of MEDIMMUNE, SB and its Affiliates and its Sublicensees shall
permit an independent, certified public accountant appointed by MEDIMMUNE
and reasonably acceptable to SB, at reasonable times and upon reasonable
notice, to examine those records and all other material documents relating
to or relevant to Net Sales in the possession or control of SB or its
Affiliates or its Sublicensees, for a period of three years after such
royalties have accrued. Said accountant shall not disclose to MEDIMMUNE
any information other than information relating to said reports, royalties,
and payments. Results of any such examination shall be made available to
both Parties. If, as a result of any inspection of the books and records
of SB or its Affiliates or its Sublicensees, it is shown that SB's royalty
payments under this Agreement were less than the amount which should have
been paid, then SB shall make all payments required to be made to eliminate
any discrepancy revealed by said inspection within 45 days after
MEDIMMUNE's demand therefor. Furthermore, if the royalty payments were
less than the amount which should have been paid by an amount in excess of
5% of the royalty payments actually made during the period in question, SB
shall also reimburse MEDIMMUNE for the cost of such inspection.
(PAGE 17)
8.5 Taxes. It is understood that all payments required to be made
to MEDIMMUNE under this Agreement shall be paid by SB from the United
Kingdom and pursuant to the tax treaty, no taxes shall be withheld from any
such payment. In the event of a change in the treaty or law and in the
event that SB is thereafter required to withhold any tax to the tax or
revenue authorities in any country in the Territory regarding any payment
to MEDIMMUNE due to the laws of such country, such amount shall be deducted
from the royalty or other payment to be made by SB, and SB shall notify
MEDIMMUNE and promptly furnish MEDIMMUNE with copies of any tax certificate
or other documentation evidencing such withholding. Each Party agrees to
cooperate with the other Party in claiming exemptions from such deductions
or withholdings under any agreement or treaty from time to time in effect.
9. PATENT PROSECUTION; ENFORCEMENT; INFRINGEMENT.
9.1 Patent Filing, Maintenance and Prosecution.
(a) Representatives of MEDIMMUNE and SB shall discuss in which
countries Patents should be filed, prosecuted and/or maintained. The
Parties acknowledge and agree that they intend to file, prosecute and
maintain Patents in all major commercial markets where viable patent
protection is available (such countries shall be referred to as "Patent
Countries"). If the laws affecting patent protection or maintenance costs
change in any Patent Country, the Parties shall reassess the need to
continue to file, prosecute and maintain Patents in such country. If the
Parties determine to discontinue such filing, prosecution and maintenance
in any such country, such country shall no longer be deemed a Patent
Country.
(b) MEDIMMUNE or MEDIMMUNE licensors, in the case of MEDIMMUNE
Patents licensed to MEDIMMUNE, shall file, prosecute and maintain MEDIMMUNE
Patents in the Territory through patent counsel selected by MEDIMMUNE and
MEDIMMUNE, shall consult with and keep SB advised with respect thereto.
MEDIMMUNE shall disclose to SB the complete texts of all such patents and
patent applications filed by MEDIMMUNE or its licensor, as well as all
information received concerning the institution or possible institution of
any interference, opposition, re-examination, reissue, revocation,
nullification or any official proceeding involving any patent licensed
herein anywhere in the Territory. SB shall have the right to review such
pending applications and other proceedings and make recommendations to
MEDIMMUNE concerning them and their conduct. MEDIMMUNE agrees to keep SB
promptly and fully informed of the course of patent prosecution or other
proceedings including by providing SB with copies of substantive
communications, search reports and Third Party observations submitted to or
received from patent offices throughout the Territory. MEDIMMUNE shall
provide such patent consultation to SB at no cost to SB.
In the event MEDIMMUNE intends to finally abandon any MEDIMMUNE
Patents licensed to SB under this Agreement, it shall notify SB and SB
shall have the right at its own expense to assume responsibility for any
such patent or part of patent.
At SB's request, MEDIMMUNE and/or its licensors, as the case
may be, shall file an application for a Supplementary Protection
Certificate for MEDIMMUNE Patents. SB shall provide relevant marketing
authorizations as appropriate.
(PAGE 18)
(c) Notwithstanding anything in this Section 9.1, SB may, at
its discretion, elect to discontinue financial support of any MEDIMMUNE
Patent in any Patent Country, provided, however, that prior to taking such
action, SB will notify MEDIMMUNE of its intention at least 60 days prior to
the date on which any payment or action is due. In any Patent Country in
which SB has elected to discontinue its support of any MEDIMMUNE Patent,
MEDIMMUNE, upon receiving notice, may elect at its own expense to assume
all financial responsibility for the prosecution or maintenance of such
MEDIMMUNE Patent in such Patent Country. In such event, all SB's rights to
the MEDIMMUNE Patent will be deemed to have expired with respect to such
Patent Country upon MEDIMMUNE's receiving notice of SB's decision.
(d) Absent an election not to support the filing, prosecution
and/or maintenance of a Patent in any Patent Country, all costs and
expenses incurred under this Section 11.1 with respect to the filing,
prosecution and/or maintenance of Patents will be paid by SB. Included in
such costs and expenses are all reasonable costs for the prosecution,
issuance, and maintenance of such patent applications and patents issuing
thereon, and any divisional, continuation-in-part, reissue applications or
patents, patents-in-addition, patents-of-revalidation or the registrations
of any patent or the like.
9.2 Review of Patent Office Communications. With respect to any
Patents, each patent application, office action, response to office action,
request for terminal disclaimer, and request for reissue or reexamination
of any patent issuing from any patent application made by either Party
shall be provided to the other Party sufficiently prior to the filing of
such application, response or request to allow for review and comment by
such other Party. Each Party shall have the right to take any action that
in its judgment is necessary to preserve such Patents.
9.3 Patent Enforcement.
(a) Each Party shall notify the other promptly after such
Party becomes aware of any alleged infringement of any Patent in any
country in the Territory. If any of the Patents under which SB holds a
license hereunder is infringed by a Third Party, SB shall have the right
and option, but not the obligation, to bring an action for infringement, at
its sole expense, against such Third Party in the name of MEDIMMUNE and/or
in the name of SB, and to join MEDIMMUNE as a party plaintiff if required.
SB shall promptly notify MEDIMMUNE of any such infringement and shall keep
MEDIMMUNE informed as to the prosecution of any action for such
infringement. SB shall have the full control over the conduct of the
litigation including settlement thereof provided, however, that SB shall
make no decision, including, but not limited to, settlement which adversely
affects the validity or enforceability of the MEDIMMUNE Patents without the
written consent of MEDIMMUNE. It is understood that in the case of
MEDIMMUNE Patents sublicensed to SB, the rights of this Section 9.3(a) are
subject to the terms and restrictions of the Agreement(s) between MEDIMMUNE
and its licensors.
(b) In the event that SB does not institute an infringement
proceeding against an offending Third Party within 90 days after becoming
aware or receiving notice of any alleged infringement, then MEDIMMUNE shall
have the right and option, but not the obligation, to institute such an
(PAGE 19)
action and to retain any recovered damages.
(c) In any infringement suit either Party may institute to
enforce any Patents pursuant to this Agreement, the other Party hereto
shall, at the request of the Party initiating such suit, cooperate in all
respects and, to the extent possible, have its employees testify when
requested and make available relevant records, papers, information,
samples, specimens, and the like. All reasonable out-of-pocket costs
incurred in connection with rendering cooperation requested hereunder shall
be paid by the Party requesting cooperation.
(d) The costs and expenses of any action instituted pursuant
to this Section 9.3 (including reasonable fees of attorneys and other
professionals) shall be borne by the Party instituting the action, or, if
the Parties elect to cooperate in instituting and maintaining such action,
such costs and expenses shall be borne by the Parties in such proportions
as they may agree in writing. Each Party shall execute all necessary and
proper documents and take such actions as shall be appropriate to allow the
other Party to institute and prosecute such infringement actions (if such
other Party has the right to institute and prosecute such infringement
actions pursuant to this Section 9.3).
(e) In the event that either Party shall undertake the
enforcement and/or defense of any Patent, any award or compensation
(including the fair market value of non-monetary compensation) paid by
Third Parties as a result of such an infringement action (whether by way of
settlement or otherwise) shall be applied as follows: (i) first, to
reimbursement of each Party for all expenses incurred by each in connection
with such action, on a pro rata basis, and (ii) second, any remaining
balance shall be allocated to the Party undertaking the action, except that
such amount shall be deemed to be Net Sales hereunder, for which MEDIMMUNE
shall be entitled to receive a royalty as provided in this Agreement.
(f) SB shall not have the right to settle or compromise any
such action in a manner which adversely affects MEDIMMUNE Patents without
the written consent of MEDIMMUNE.
(g) SB at its sole discretion may decide to enter into a
license agreement with any Third Party pertaining to HPV Vaccines in order
to avoid an (alleged) infringement of Third Party patents. In case both
parties deem it necessary to acquire additional technology, the Steering
Committee will decide on entering into license agreements with Third
Parties.
9.4 Infringement Actions by Third Parties. In the event of the
institution of any suit by a Third Party against SB, its Affiliates or its
Sublicensees for patent infringement involving the use, sale, distribution
or marketing of any Vaccine Product in the Territory and such infringement
claim is a result of the use of the MEDIMMUNE Patents or MEDIMMUNE
Technology SB shall promptly notify MEDIMMUNE in writing of such suit. In
the event of all such actions SB shall defend such action at its own
expense, and MEDIMMUNE hereby agrees to assist and cooperate with SB, at
its own expense, to the extent necessary in the defense of such suit. SB
shall have the right to settle the suit or consent to an adverse judgment
thereto, in its sole discretion. During the pendency of such action, all
royalties
(PAGE 20)
due hereunder shall continue to be paid by SB. SB shall assume full
responsibility for the payment of any award for damages, or any amount due
pursuant to any settlement entered into by SB with such Third Party,
subject to the provisions of this Agreement with respect to the reduction
of royalties. Any and all damages and awards received by SB as a result
thereof (i.e., as a result of a counterclaim) shall be allocated between
the Parties in the same manner as provided in Section 9.3.
10. INDEMNIFICATION.
10.1 By MEDIMMUNE. MEDIMMUNE shall indemnify and hold SB, its
Affiliates and its Sublicensees, and each of their respective directors,
officers, employees, shareholders and agents, harmless from and against any
and all Third Party claims, suits or demands for liabilities, damages,
losses, costs and expenses (including the reasonable fees of attorneys and
other professionals) arising out of or resulting from:
any breach of a representation or warranty made by
MEDIMMUNE or negligence, recklessness or wrongful intentional
acts or omissions of MEDIMMUNE, or its Affiliates and their
respective directors, officers, employees and agents, in
connection with the work performed by MEDIMMUNE under the
Research Program.
10.2 By SB. SB shall indemnify and hold MEDIMMUNE and licensors of
MEDIMMUNE to the extent that SB is sublicensed hereunder and its directors,
officers, employees, shareholders and agents, harmless from and against
any and all Third Party claims, suits or demands for liabilities, damages,
losses, costs and expenses (including the reasonable fees of attorneys and
other professionals) arising out of or resulting from:
the development manufacture, use, distribution or sale of any
Vaccine Product by SB, its Affiliates, distributors or Sublicensees except
those losses which arise out of the negligence or intentional misconduct of
MEDIMMUNE.
10.3 Costs of Enforcement. As the parties intend complete
indemnification, all costs and expenses of enforcing any provision of this
Section 10 shall also be reimbursed by the indemnifying Party.
10.4 Conditions to Indemnification. A person or entity that intends
to claim indemnification under this Section (the "Indemnitee") shall
promptly notify the other Party (the "Indemnitor") of any loss, claim,
damage, liability or action in respect of which the Indemnitee intends to
claim such indemnification, and the Indemnitor shall assume the defense
thereof with counsel mutually satisfactory to the Indemnitee whether or not
such claim is rightfully brought; provided, however, that an Indemnitee
shall have the right to retain its own counsel, with the fees and expenses
to be paid by the Indemnitor if Indemnitor does not assume the defense, or
if representation of such Indemnitee by the counsel retained by the
Indemnitor would be inappropriate due to actual or potential differing
interests between such Indemnitee and any other person represented by such
counsel in such proceedings. The indemnity agreement in this Section
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action if such settlement is effected without the consent of
the Indemnitor, which consent shall not be withheld or delayed
unreasonably.
(PAGE 21)
The failure to deliver notice to the Indemnitor within a reasonable time
after the commencement of any such action, only if prejudicial to its
ability to defend such action, shall relieve such Indemnitor of any
liability to the Indemnitee under this Section, but the omission so to
deliver notice to the Indemnitor will not relieve it of any liability that
it may have to any Indemnitee otherwise than under this Section. The
Indemnitee under this Section, its employees and agents, shall cooperate
fully with the Indemnitor and its legal representatives in the
investigations of any action, claim or liability covered by this
indemnification.
10.5 Any and all Sublicensees of SB shall agree to the same
indemnity as in Section 10.2 of this Agreement and MEDIMMUNE shall be made
a Third Party beneficiary therein.
11. PUBLICATION; CONFIDENTIALITY.
11.1 Publication.
(a) Both Parties recognize that each may wish to publish the
results of their work relating to the Research Program. However, both
Parties also recognize the importance of acquiring patent protection on
inventions prior to publication. Consequently, neither Party shall publish
or present the results of the Research Program with respect to any Vaccine
Product or of development studies without the permission of the Steering
Committee. If the Steering Committee is not in existence, the Parties
shall appoint appropriate representatives for this function. This Section
11.1(a) shall cease to apply with respect to any Vaccine Product upon the
commercial launch of such Vaccine Product.
(b) Each Party also agrees to delete from any such proposed
publication any technical or scientific Confidential Information of the
other Party upon such other Party's reasonable request.
(c) In any publication permitted under this Section 11.1, each
Party shall acknowledge its collaboration with the other Party under this
Agreement.
(d) Nothing in Section 11.1 shall prevent MEDIMMUNE: (i) in
connection with efforts to secure financing at any time during the term of
this Agreement, from issuing statements as to achievements made, and the
status of the work being done by the Parties, under this Agreement, so long
as such statements do not jeopardize the ability to obtain patent
protection on Inventions or disclose non-public technical or scientific
Confidential Information of SB; or (ii) from issuing statements that
MEDIMMUNE determines to be necessary, in the opinion of its external
counsel, to comply with applicable law (including the disclosure
requirements of the U.S. Securities and Exchange Commission, Nasdaq or any
other stock exchange on which securities issued by MEDIMMUNE are traded);
provided that MEDIMMUNE shall provide SB with a copy of the proposed text
of such statements sufficiently in advance of the scheduled release thereof
to afford SB a reasonable opportunity to review and comment upon the
proposed text.
11.2 Confidentiality; Exceptions.
(PAGE 22)
Except to the extent expressly authorized by this Agreement or
otherwise agreed in writing, the Parties agree that, the receiving Party,
its Affiliates and its Sublicensees, if any, shall use reasonable efforts
to keep, and to ensure that their officers and directors keep, completely
confidential and shall not publish or otherwise disclose and shall not use
for any purpose any information furnished to it by the other Party, its
Affiliates or its Sublicensees, if any, or developed under or in connection
with the Research Program pursuant to this Agreement, except to the extent
that it can be established by the receiving Party by competent proof that
such information: (i) is or hereafter becomes generally available to the
public other than by reason of any default by the receiving Party with
respect to its confidentiality obligations hereunder; (ii) was already
known to the recipient as evidenced by prior written documents in its
possession; (iii) is disclosed to the recipient by a Third Party who is not
in default of any confidentiality obligation to the disclosing Party; or
(iv) is independently developed by or for the receiving Party without
reference to or reliance upon the information furnished by the other Party
("Confidential Information"). Information disclosed by one Party to the
other shall remain the property of the disclosing Party.
11.3 Exclusions to Confidentiality. The restrictions contained in
Section 11.2 shall not apply to Confidential Information that (i) is
submitted by the recipient to governmental authorities to facilitate the
issuance of marketing approvals for a Vaccine Product, provided that
reasonable measures shall be taken to assure confidential treatment of such
information, if practicable; (ii) is provided by the recipient to Third
Parties under appropriate terms and conditions, including confidentiality
provisions equivalent to those in this Agreement, for consulting,
manufacturing, development, manufacturing, external testing, marketing
trials and sublicensing or potential sublicensing of Vaccine Product in
accordance with this Agreement; or (iii) is otherwise required to be
disclosed in compliance with applicable laws or regulations (including,
without limitation, to comply with SEC, Nasdaq or stock exchange disclosure
requirements) or order by a court or other regulatory body having competent
jurisdiction; provided that if a Party is required to make any such
disclosure of the other Party's Confidential Information it will, except
where impracticable for necessary disclosures, for example to physicians
conducting studies or to health authorities, give reasonable advance notice
to the other Party of such disclosure requirement and, except to the extent
inappropriate in the case of patent applications or otherwise, will use its
reasonable best efforts to secure confidential treatment of such
Confidential Information required to be disclosed.
11.4 Injunctive Relief. The Parties acknowledge that money damages
alone would not adequately compensate the disclosing Party in the event of
a breach by the receiving Party of this Section 11, and that, in addition
to all other remedies available to the disclosing Party at law or in
equity, it shall be entitled to seek injunctive relief for the enforcement
of its rights under this Section 11.
11.5 The obligations of this Article 11 shall terminate
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED) years after the termination of
this Agreement.
12. TERM; TERMINATION.
(PAGE 23)
12.1 Term. This Agreement shall commence as of the Effective Date
and, unless sooner terminated as provided hereunder, shall expire as
follows:
(a) As to each Vaccine Product in each country in the
Territory, this Agreement shall expire upon the expiration of the Royalty
Term with respect to such Vaccine Product in such country.
(b) This Agreement shall expire in its entirety upon the
termination of the Royalty Term with respect to all Vaccine Products in all
countries in the Territory.
12.2 Breach.
(a) Failure by either Party to comply with any of its 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 cure such default. If such default is not cured within
60 days (30 days in the event of a default with respect to an obligation to
pay money) after the receipt of such notice (or, if such default cannot be
cured within such 60-day period, if the Party in default does not commence
and diligently continue actions to cure such default, the Parties agreeing
that all defaults with respect to obligations to pay money shall be curable
within the 30-day period provided above), subject to the provisions of
Sections 4.8 and 5.3, 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 in its entirety, by giving written notice to take
effect immediately upon delivery of such notice. The right of either Party
to terminate this Agreement, as provided in this Section 12.2, shall not be
affected in any way by its waiver or failure to take action with respect to
any previous default.
(b) An election of remedy by a Party for a material breach of
this Agreement under this Section 12.2 on one occasion shall not constitute
a waiver as to any other remedy that may be available to such Party under
this Section 12.2 as to any material breach on another occasion.
(c) After Phase II is completed, , SB may terminate this
Agreement by giving sixty (60) days' written notice to MEDIMMUNE but only
if (i) further development and commercialization of Vaccine Product is not
economically feasible or (ii) the technical and clinical information
indicates that there are material concerns about the safety or efficacy of
the Vaccine Product.
(d) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(e) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
12.3 Effect of Expiration or Termination.
(a) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(b) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(PAGE 24)
(c) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(d) (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
12.4 Either party may terminate this Agreement, if, at any time, the
other party shall file in any court or agency pursuant to any statute or
regulation of a country in the Territory a petition of bankruptcy or
insolvency or for reorganization or for an arrangement or for the
appointment of a receiver of trustee of the party or of its assets or if
the other party proposes a written agreement of composition or extension of
its debts or if the other party shall be served with an involuntary
petition against it, filed in any insolvency proceeding, and such petition
shall not be dismissed within 60 days after filing thereof, or if the other
party shall make an assignment for the benefit of its creditors.
Notwithstanding the bankruptcy of MEDIMMUNE or the impairment of
performance of MEDIMMUNE of its obligations under this section, SB shall be
entitled to retain the licenses granted herein, provided it continues to
comply with its obligations to MEDIMMUNE hereunder.
12.5 Right to Sell Stock on Hand. Upon the termination of any
rights granted hereunder, in whole or in part as to any Vaccine Product in
any country in the Territory, for any reason other than a failure to cure a
material breach of this Agreement by SB, SB shall have the right to dispose
of all Vaccine Product then on hand to which such termination applies, and
the royalties shall be paid to MEDIMMUNE with respect to such Vaccine
Product as though such rights had not terminated.
12.6 Accrued Rights, Surviving Obligations.
(a) Termination, relinquishment or expiration 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
termination, relinquishment or expiration. Such termination,
relinquishment or expiration shall not relieve either Party from
obligations which are expressly indicated to survive termination or
expiration of this Agreement.
(b) Termination, relinquishment or expiration of this
Agreement shall not terminate SB's obligation to pay all royalties and
milestone payments that shall have accrued prior to such termination. All
of the Parties' rights and obligations under Sections 2.2(b), 8.4 10, 11,
12.3 12.4, 12.5, 12.6, 14.11 and 14.17 shall survive termination,
relinquishment or expiration hereof.
12.7 Termination for Failure of Condition. Either Party may
terminate this Agreement by providing written notice to the other in the
event that Effective Date has not occurred by June 30, 1998.
13. FORCE MAJEURE.
13.1 Events of Force Majeure. Except for payments due under this
Agreement, neither Party shall be held liable or responsible to the other
Party nor be deemed to be in default under or in breach of any provision of
this Agreement for failure or delay in fulfilling or performing any
obligation of this Agreement when such failure or delay is due to force
majeure, and without the fault or negligence of the Party so failing or
(PAGE 25)
delaying. For purposes of this Agreement, force majeure is defined as
causes beyond the control of the Party, including, without limitation, acts
of God; acts, regulations, or laws of any government; war; civil commotion;
destruction of production facilities or materials by fire, flood,
earthquake, explosion or storm; labor disturbances; epidemic; and failure
of pubic utilities or common carriers. In such event SB or MEDIMMUNE, as
the case may be, shall immediately notify the other Party of such inability
and of the period for which such inability is expected to continue. The
Party giving such notice shall thereupon be excused from such of its
obligations under this Agreement as it is thereby disabled from performing
for so long as it is so disabled and the 30 days thereafter. To the extent
possible, each Party shall use reasonable efforts to minimize the duration
of any force majeure.
14. MISCELLANEOUS.
14.1 Relationship of Parties. Nothing in this Agreement is intended
or shall be deemed to constitute a partnership, 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.
14.2 Assignment. (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
14.3 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.
14.4 Notice. Any notice or request required or permitted to be
given under or in connection with this Agreement shall be deemed to have
been sufficiently given if in writing and personally delivered or sent by
certified mail (return receipt requested), facsimile transmission (receipt
verified), or overnight express courier service (signature required),
prepaid, to the Party for which such notice is intended, at the address set
forth for such Party below:
(a) In the case of SB, to:
SmithKline Beecham, PLC
c/o SmithKline Beecham Biologicals Manufacturing S.A.
Rue de l'Institut 89
B-1330 Rixensart, Belgium
Attention: Senior Vice President
(b) In the case of MEDIMMUNE, to:
MEDIMMUNE, Inc.
35 West Watkins Mill Road
Gaithersburg, Maryland 20878
Attention: President
Facsimile No.: (301) 527-4200
or to such other address for such Party as it shall have specified by like
notice to the other Party, provided that notices of a change of address
shall be effective only upon receipt thereof. If delivered personally or
by
(PAGE 26)
facsimile transmission, the date of delivery shall be deemed to be the date
on which such notice or request was given. If sent by overnight express
courier service, the date of delivery shall be deemed to be the next
business day after such notice or request was deposited with such service.
If sent by certified mail, the date of delivery shall be deemed to be the
third business day after such notice or request was deposited with the U.S.
Postal Service.
14.5 Use of Name. Except as otherwise provided herein, neither
Party shall have any right, express or implied, to use in any manner the
name or other designation of the other Party or any other trade name or
trademark of the other Party for any purpose in connection with the
performance of this Agreement.
14.6 Public Announcements. Except as required by law (including,
without limitation, disclosure requirements of the U.S. Securities and
Exchange Commission, Nasdaq or any other stock exchange on which securities
issued by MEDIMMUNE are traded), neither Party shall make any public
announcement concerning this Agreement or the subject matter hereof without
the prior written consent of the other, which shall not be unreasonably
withheld. It shall not be unreasonable for a Party to withhold consent
with respect to any public announcement containing any of such Party's
Confidential Information. In the event of a required public announcement,
to the extent practicable under the circumstances, the Party making such
announcement shall provide the other Party with a copy of the proposed text
prior to such announcement sufficiently in advance of the scheduled release
of such announcement to afford such other Party a reasonable opportunity to
review and comment upon the proposed text.
14.7 Waiver. A waiver by either Party of any of the terms and
conditions of this Agreement in any instance shall not be deemed or
construed to be a waiver of such term or condition for the future, or of
any subsequent breach hereof. All rights, remedies, undertakings,
obligations and agreements contained in this Agreement shall be cumulative
and none of them shall be in limitation of any other remedy, right,
undertaking, obligation or agreement of either Party.
14.8 Compliance with Law. Nothing in this Agreement shall be deemed
to permit a Party to export, reexport or otherwise transfer any Vaccine
Product sold under this Agreement without compliance with applicable laws.
14.9 Severability. When possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision will be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement and the parties shall
negotiate, in good faith, a new provision which will, as closely as
possible, carry out the intentions of the parties provided for in the
invalidated provision.
14.10 Amendment. No amendment, modification or supplement of any
provisions of this Agreement shall be valid or effective unless made in
writing and signed by a duly authorized officer of each Party.
(PAGE 27)
14.11 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Maryland without
regard to its choice of law principles. In the event that either Party
desires to initiate litigation with respect to this Agreement, such
litigation shall be conducted in an appropriate court in the State of
Maryland and each Party hereby submits to the jurisdiction of such court(s)
and agrees that venue is proper in such court(s).
14.12 Entire Agreement. This Agreement, together with the Exhibits
hereto and every Annual Research Plan approved by the Steering Committee,
sets forth the entire agreement and understanding between the Parties as to
the subject matter hereof and merges all prior discussions and negotiations
between them, and neither of the Parties shall be bound by any conditions,
definitions, warranties, understandings or representations with respect to
such subject matter other than as expressly provided herein or as duly set
forth on or subsequent to the date hereof in writing and signed by a proper
and duly authorized officer or representative of the Party to be bound
thereby.
14.13 Parties in Interest. All the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable
by the Parties hereto and their respective permitted successors and
assigns.
14.14 Descriptive Headings. The descriptive headings of this
Agreement are for convenience only, and shall be of no force or effect in
construing or interpreting any of the provisions of this Agreement.
14.15 Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, any one of which need not contain the signature
of more than one Party but all such counterparts taken together shall
constitute one and the same agreement.
14.16 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
14.17 (CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(PAGE 28)
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to
be executed by its duly authorized officer as of the day and year first
above written.
SMITHKLINE BEECHAM , PLC
By: /s/J. Stephenne
Name: J. Stephenne
Title: Senior Vice President and
General Manager
MEDIMMUNE, INC.
By: /s/Wayne T. Hockmeyer
Name: Wayne T. Hockmeyer
Title: CEO
SCHEDULE A
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
SCHEDULE B
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
SCHEDULE C
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
SCHEDULE D
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
SCHEDULE A
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
SCHEDULE B
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
SCHEDULE C
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
SCHEDULE D
(CONFIDENTIAL TREATMENT HAS BEEN REQUESTED)
(PAGE 29)
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
of MedImmune, Inc. on Form S-8 (File Nos. 333-28481 and 333-28527) and
Form S-3 (File Nos. 333-44195 and 333-13373), of our report, dated February 4,
1998, on our audits of the financial statements of MedImmune, Inc.
as of December 31, 1996 and 1997, and for each of the three years in
the period ended December 31, 1997, which report is included in this Annual
Report on Form 10-K.
Coopers & Lybrand L. L. P.
McLean, Virginia
March 27, 1998
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MEDIMMUNE,
INC.'S YEARLY REPORT ON FORM 10-K FOR THE TWELVE MONTHS ENDED DECEMBER 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FILING.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> DEC-31-1997
<CASH> 29,984
<SECURITIES> 20,342
<RECEIVABLES> 18,300
<ALLOWANCES> 0
<INVENTORY> 28,857
<CURRENT-ASSETS> 2,740
<PP&E> 65,254
<DEPRECIATION> 0
<TOTAL-ASSETS> 170,336
<CURRENT-LIABILITIES> 43,660
<BONDS> 85,363
0
0
<COMMON> 244
<OTHER-SE> 40,292
<TOTAL-LIABILITY-AND-EQUITY> 170,336
<SALES> 65,271
<TOTAL-REVENUES> 80,964
<CGS> 34,433
<TOTAL-COSTS> 118,380
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,483
<INCOME-PRETAX> (36,895)
<INCOME-TAX> 0
<INCOME-CONTINUING> (36,895)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,895)
<EPS-PRIMARY> (1.59)
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