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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark one)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 1996
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
----- SECURITIES EXCHANGE ACT OF 1934 . For the transition period
from to
------ -----
Commission File Number: 0-19290
COR THERAPEUTICS, INC.
(Exact name of Registrant as specified in its charter)
Delaware 94-3060271
(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
256 East Grand Avenue, South San Francisco,
California 94080 (Address of principal executive
offices and zip code)
(415) 244-6800
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$.0001 Par Value
Preferred Share
Purchase Rights
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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. ___
As of March 3, 1997, the aggregate market value of the voting stock
held by non-affiliates of the Registrant was $117,444,888(A) (based upon the
closing sales price of such stock as reported in the Nasdaq National Market on
such date).
As of March 3, 1997, the number of outstanding shares of the
Registrants' common stock was 20,044,607.
DOCUMENTS INCORPORATED BY REFERENCE:
Document Form 10-K
Reference
(1) Portions of the Registrant's definitive proxy
statement with respect to the Registrant's 1997
Annual Meeting of Stockholders, to be filed with the
Securities and Exchange Commission not later than 120
days after the close of the Registrant's fiscal year. III
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(A) Excludes 7,523,830 shares outstanding at March 3, 1997 of the Registrant's
Common Stock held by directors, officers, and holders of more than 5% of the
Company's Common Stock. Exclusion of shares held by any person should not be
construed to indicate that such person possesses the power, direct or indirect,
to direct or cause the direction of the management or policies of the
Registrant, or that such person is controlled by or under common control with
the Registrant.
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PART I
ITEM 1. BUSINESS
The following discussion contains forward-looking statements that
involve risks and uncertainties. The Company's actual results could differ
materially from those discussed herein. Factors that could cause or contribute
to such differences include, but are not limited to, those discussed below and
in the sections entitled "Additional Risk Factors" and "Management's Discussion
and Analysis of Financial Condition and Results of Operations."
COR Therapeutics, Inc. ("COR" or the "Company") is focused on the
discovery, development and commercialization of novel pharmaceutical products
that establish a new standard of care for the treatment and prevention of
severe cardiovascular diseases. The Company believes its understanding of the
molecular and cellular biology of these diseases has created opportunities for
new therapeutic approaches where current therapies are inadequate. The
Company's strategy is to combine its knowledge of the biology of cardiovascular
diseases with advanced drug discovery techniques to create a portfolio of
products. The Company believes that this approach may lead to multiple
complementary products that may be used alone or in combination to treat
particular cardiovascular diseases. In addition, the Company believes that
individual products it plans to develop may have applications in the treatment
of more than one disease. The Company's potential products are all currently
in research, development, or under regulatory review, and substantial time and
expense may be required before any product can be commercially introduced, if
ever.
The Company's first product candidate in clinical development is
INTEGRILIN(TM) (antithrombotic injection), a small synthetic peptide platelet
aggregation inhibitor intended for parenteral (injectable) administration in
acute indications. Based on preclinical studies and Phase I, II and III
clinical trials, the Company believes that the INTEGRILIN(TM) product acts as an
effective antithrombotic by inhibiting platelet aggregation, and also has a
favorable safety profile and rapid reversibility. INTEGRILIN(TM) is being
developed for the treatment of acute arterial thrombosis, including such
indications as complications following angioplasty, unstable angina, acute
myocardial infarction (used alone or as adjunctive therapy with thrombolytic
agents) and stroke.
BACKGROUND
Despite decades of extensive research and development and significant
advances in treatment, cardiovascular diseases are the leading cause of death
in the United States, resulting in approximately one million deaths annually
from heart attacks, strokes and related diseases. Coronary artery disease, the
form of cardiovascular disease responsible for the greatest number of deaths,
affects over six million people in the United States, with stroke affecting
another approximately three million people. Extremely complex and interrelated
biological processes cause these diseases.
Atherosclerosis, or hardening of the arteries, contributes to a
majority of cardiovascular deaths. Atherosclerosis is a degenerative process
that can occur over decades in which vessels become increasingly less elastic
and progressively narrowed due to the formation of plaque (fatty substances
lining the artery). This process is caused by aging as well as genetic
predisposition and is exacerbated by dietary and environmental factors.
A significant consequence of atherosclerosis is ischemia, or the
impairment of a vessel's ability to supply oxygen to the heart, brain and other
organs. In advanced cases of atherosclerosis, ruptures may occur in the plaque
that has built up inside the vessel wall, increasing the tendency of the blood
to form a thrombus. A thrombus occurring in an artery is a blockage composed
primarily of an aggregation of small cells known as platelets, stabilized by a
clot composed of the protein fibrin. This process, known as arterial
thrombosis, may completely occlude an atherosclerotic artery, leading to acute
myocardial infarction (heart attack) if the occlusion occurs in an artery
supplying the heart, or stroke if it occurs in an artery supplying the brain.
Thrombosis occurs not only in arteries, which supply oxygen-rich blood
to the heart and other organs, but also in veins, which return blood from
organs to the heart. A thrombus in a vein is composed primarily of a fibrin
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clot and, to a lesser extent, an aggregation of platelets and entrapped red
blood cells. Venous thrombosis generally occurs in the arms, hips or legs
(deep vein thrombosis). In some cases, a thrombus can cause pulmonary embolism
by migrating from the veins into the lungs.
Arterial thrombosis formation, often following atherosclerotic plaque
rupture, is primarily responsible for the vascular occlusion in coronary
arteries that contributes to the set of urgent clinical events comprising acute
ischemic coronary syndromes. Arteries narrowed by atherosclerosis may be
treated medically by invasive medical procedures designed to increase blood
flow, including coronary artery bypass surgery and coronary angioplasty.
Coronary artery bypass surgery is the construction of an alternative path
around an occluded artery using a vein graft. Coronary angioplasty, a less
invasive procedure, involves the dilation of the atherosclerotic artery with a
balloon catheter or other mechanical device. Angioplasty is generally
successful in immediately increasing blood flow, but still carries a short-term
risk of death and heart attack and may not have prolonged efficacy. Acute
ischemic coronary syndromes encompass unstable angina, acute myocardial
infarction, and the thrombotic complications that occur as a result of
percutaneous transluminal coronary angioplasty ("PTCA").
BUSINESS STRATEGY
The Company was founded to discover, develop and market novel
pharmaceutical products for the treatment and prevention of severe
cardiovascular diseases for which existing therapies are inadequate or
unavailable. The Company's long-term objective is to build a pharmaceutical
company focused on the cardiovascular market.
The Company believes that advances in the scientific understanding of
the molecular and cellular biology of cardiovascular diseases have created and
will continue to create opportunities for new approaches to the development of
therapeutic and preventative products for certain of these diseases. Moreover,
advanced drug discovery technologies have facilitated the discovery and
development of entirely new categories of cardiovascular drugs.
The Company's business strategy includes the following key elements:
- Conduct and sponsor research into novel molecular pathways that
are implicated in cardiovascular pathologies in order to identify
new therapeutic targets.
- Discover novel therapeutics by combining COR's extensive knowledge
in the molecular and cellular biology of cardiovascular diseases
with advanced drug discovery techniques.
- Develop drugs rapidly and efficiently through COR's internal
capabilities and through contract resources or partners.
- Establish a cardiovascular sales and marketing capability in the
United States, Canada and subsequently in Europe, focused on
hospital and specialist based markets.
- Implement strategic alliances with selected pharmaceutical and
biotechnology companies where such alliances may complement and
significantly expand the Company's research, development, sales
and marketing capabilities.
The Company believes that its strategy has a number of significant
potential benefits. First, as a result of the focused nature of its research
and development programs, the Company believes that it is well-positioned to
develop multiple complementary products that may be used alone or in
combination to treat particular cardiovascular diseases. Second, the Company
believes that the potential products developed may be effective at treating
more than one therapeutic indication. Third, because the Company's research is
focused on cardiovascular diseases, the expertise of the Company's scientists
and outside advisors can be applied across the range of the Company's research
programs. Finally, the Company intends to market and sell its potential
products efficiently because they will be targeted to aid cardiovascular
disease and urgent care specialists with whom the Company will seek to build
continuing relationships.
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BIOLOGY AND MARKETS
ARTERIAL THROMBOSIS
BIOLOGY. Thrombosis in arteries is a complex process involving the
coordinated activities of: (i) receptors located on cells; (ii) proteins in the
blood and vessel walls that bind to these receptors; and (iii) enzymes that
regulate fibrin clot formation.
Blood contains a variety of proteins and cells, including red blood
cells, which carry oxygen, white cells, which play a key role in the
inflammation process, and small cells known as platelets, which are primarily
responsible for the control of bleeding. Platelets normally circulate in a
resting or inactivated state but, in response to vascular injury, initiate a
series of events to control bleeding. One of these events, known as adhesion,
occurs when specific receptors on the surface of the platelet permit the
platelet to attach to the walls of a damaged blood vessel. Platelet
activation, which may result from platelet adhesion or the action of thrombin,
an enzyme synthesized on damaged blood vessels, can cause aggregation, the
formation of large platelet aggregates. The platelet receptor that mediates
aggregation is glycoprotein GP IIb-IIIa.
After initial platelet aggregation, fibrin, a protein in the blood,
accumulates on the aggregate forming a mesh, followed by additional platelet
aggregation, additional fibrin deposition and entrapment of circulating red
blood cells, creating a progressively enlarging thrombus. Thrombi are
constantly being formed and dissolved in normal arteries in response to minor
internal vessel injuries. However, an enlarged thrombus that is left unchecked,
or is formed as a result of a major vessel injury such as plaque rupture, can
occlude the artery and cause myocardial infarction, unstable angina, stroke or
abrupt closure following angioplasty.
According to current estimates, over 55 million Americans have one or
more forms of cardiovascular disease claiming almost 1 million lives in the
United States each year, accounting for approximately 40% of all deaths.
Vascular occlusion is a major cause of mortality associated with coronary heart
disease and can be largely attributed to arterial thrombosis mediated in part
by platelet aggregation. Arterial thrombosis is implicated in a variety of
acute and chronic clinical syndromes that require different treatment
alternatives.
MARKETS - ACUTE CARE.
THROMBOSIS OF CORONARY ARTERIES
Acute Ischemic Coronary Syndromes. Acute ischemic coronary
syndromes is a medical term encompassing the continuum of
life- threatening clinical situations that evolve immediately
following plaque rupture and thrombus formation in arteries
that feed the heart, as follows:
- Unstable Angina. Unstable angina is believed to be caused
by transient blockage of a coronary artery as a result
of thrombosis and/or spasm characterized by
unpredictable episodes of chest pain, particularly
episodes that occur while the patient is at rest.
Unstable angina requires hospitalization as the syndrome
is often the precursor of acute myocardial infarction.
Approximately one million people are diagnosed each year
in United States hospitals with unstable angina.
- Acute Myocardial Infarction ("AMI"). Sustained blockage
of a coronary artery as a result of thrombosis leads to
inadequate blood supply and death of heart tissue,
causing acute myocardial infarction (heart attack). In
the United States, approximately 1.5 million people
suffer from heart attacks annually, approximately
750,000 of whom are hospitalized for treatment.
Acute Ischemic Complications of Angioplasty. Angioplasty and
other invasive medical procedures intended to treat
atherosclerotic patients create the risk of acute ischemic
complications such as abrupt closure (complete occlusion,
typically within 24 hours of the procedure) of the treated
artery
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as a result of sudden thrombosis. Independent studies
indicate that approximately 8-9% of angioplasty patients die
or suffer a heart attack within 30 days of the procedure.
Approximately 400,000 coronary angioplasty procedures were
performed in the United States in 1994.
THROMBOSIS OF CEREBROVASCULAR ARTERIES
Thrombosis in cerebral arteries that deliver blood to the
brain has analogous consequences to vascular occlusions in
coronary arteries that feed the heart:
Transient Ischemic Attacks. A disorder known as transient
ischemic attack ("TIA") is believed to be a
thrombo-embolic event resulting from atherosclerotic
involvements of a cerebral artery blockage of a cerebral
artery caused by thrombosis and affects approximately
250,000 people in the United States each year.
Stroke. TIA frequently precedes a stroke. Stroke is an
acute neurologic disease commonly caused by prolonged
cerebral thrombosis. Approximately 800,000 were
diagnosed in United States hospitals having suffered a
stroke in 1994. Stroke is the leading cause of serious
disability in the United States.
MARKETS - CHRONIC CARE.
Survivors of arterial thrombotic events continue to be at risk
for further cardiovascular and cerebrovascular events. Over
six million Americans currently have a history of heart attack,
angina pectoris, or both. Similarly, there are currently over
three million survivors of stroke in the United States.
VENOUS THROMBOSIS
BIOLOGY. The composition of a thrombus in a vein differs from that of
a thrombus in an artery. Arterial thrombosis occurs in rapidly flowing blood
and tends to be initiated by platelets. By contrast, a thrombus in a vein is
composed primarily of fibrin and red blood cells in addition to platelets.
Fibrin is generated by thrombin synthesized as a result of restricted blood
flow through veins. The Company therefore believes that drugs which prevent
the formation of thrombin, or which otherwise inhibit coagulation, may
represent the most effective therapies for venous thrombosis.
The Company is pursuing several approaches for the treatment of venous
thrombosis. These approaches are designed to inhibit thrombin synthesis or to
inhibit other elements of the coagulation process that lead to thrombin
synthesis. The Company's programs in this area focus on identifying agents to
inhibit the activity of the prothrombinase complex, the enzyme responsible for
production of thrombin. Interrupting the activity of this complex may arrest
coagulation, thrombosis and other potentially pathological conditions caused by
thrombin. One of the critical components of the prothrombinase complex, factor
Xa, is the enzyme responsible for converting prothrombin into active thrombin.
The Company believes that compounds identified through such approaches may also
have applications in the treatment of acute arterial thrombosis and restenosis
and plans to evaluate certain of these compounds for such applications.
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MARKETS - ACUTE CARE. Diseases and disorders associated with venous
thrombosis include the following:
- Deep Vein Thrombosis. Over 250,000 hospitalized patients in
the United States are diagnosed with deep vein thrombosis
annually. Thrombosis in the veins of the arms or legs can
occur after surgery (particularly joint replacement surgery),
injury, immobilization or increased intra-abdominal pressure.
More than 350,000 joint replacements are performed annually in
the United States, the majority of which are hip replacements.
- Pulmonary Embolism. Fragments of blood clots from veins can
embolize (or migrate) to pulmonary arteries, leading to
destruction of portions of the lung. Approximately 100,000
are diagnosed in United States hospitals with pulmonary
embolism annually.
MARKETS - CHRONIC CARE.
- Estimates for the number of patients who are candidates for
prophylaxis against deep vein thrombosis and pulmonary
embolism exceed one million and 500,000 patients, respectively.
RESTENOSIS
BIOLOGY. Interventional procedures such as angioplasty disrupt the
endothelial cell lining of an artery and further damage the arterial wall. This
injury exposes atherosclerotic plaque and healthy arterial tissue to the
flowing blood, causing thrombosis at the site of injury. Platelets that have
adhered at this site, as well as white cells that are attracted to the site of
injury, secrete growth factors that promote cell growth and injury healing.
Smooth muscle cell migration into the intima mediated by growth factors such as
platelet-derived growth factor ("PDGF") is thought to play an important role in
the intimal proliferation that follows vascular injury such as that induced by
balloon angioplasty. Restenosis is a complex process of mechanical factors
including vasoconstriction and remodeling of the arterial wall which can also
contribute to lumen narrowing. Restenosis can occur when smooth muscle cells
migrate from the inner layers of the cell wall to the injured surface of the
artery and rapidly proliferate, causing the artery to narrow.
Several growth factors induce the migration and/or proliferation of
smooth muscle cells. Experiments in animal models have demonstrated that three
potential factors in mediating the growth and migration of smooth muscle cells
are PDGF, fibroblast growth factor ("FGF") and thrombin, and that antibodies
that block the action of PDGF and FGF can specifically inhibit the vascular
response to injury. Independent studies have demonstrated that the
growth-promoting effects of PDGF and FGF are mediated by receptors located on
smooth muscle cells. Studies have also demonstrated in animal models that
induced injury to arteries can significantly increase the number of PDGF
receptors on smooth muscle cells in the blood vessel wall. The Company has
exclusively licensed certain patent rights to PDGF and FGF receptors from the
Regents of the University of California, although there can be no assurance
that these licenses will provide effective protection against competitors. See
"Patents, Proprietary Rights and Licenses."
MARKET. Approximately 400,000 coronary angioplasty procedures were
performed in the United States in 1994. These procedures are generally
successful in immediately increasing blood flow, but may not have prolonged
efficacy. Independent studies indicate that approximately 20-30% of coronary
angioplasty patients suffer a significant renarrowing of the vessel within
three to six months of the procedure. Restenosis rates have declined recently
with the rapid acceptance of coronary stenting to accompany coronary
angioplasty, perhaps by preventing the mechanical factors which promote
restenosis. Interventional cardiologists are expected to continue to embrace
this relatively new technology. Since the occurrence of restenosis is
unpredictable, whether or not coronary stents are deployed, the Company
believes that if an effective treatment for restenosis were available, it might
be utilized on a prophylactic basis in substantially all coronary angioplasty
procedures.
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SELECTED PRODUCTS & PROGRAMS
Since its inception, COR has directed its R&D program toward the
development of both peptide and small molecule therapeutics for life-
threatening cardiovascular diseases. A list of many of the Company's programs
and potential products follows:
<TABLE>
<CAPTION>
SELECTED PRODUCTS AND PROGRAMS
IN RESEARCH TYPE OF PRIMARY THERAPEUTIC INDICATIONS DEVELOPMENT
OR DEVELOPMENT COMPOUND STATUS
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GP IIb-IIIa INHIBITOR PROGRAM:
<S> <C> <C> <C>
- INTEGRILIN(TM) Peptide Acute ischemic complications Regulatory
(a parenteral product) following coronary angioplasty Review
Unstable angina/Non-Q Wave MI Phase III
Acute myocardial infarction Phase II
- Oral Small Molecule Prevention of acute ischemic Phase I
coronary syndromes and stroke
FACTOR Xa INHIBITOR PROGRAM:
- Parenteral / Subcutaneous Small Molecule Venous thrombosis Preclinical
Development
- Oral Small Molecule Venous/arterial thrombosis Leads
Identified
GROWTH FACTOR RECEPTOR ANTAGONIST PROGRAM:
- Parenteral Therapeutic Restenosis Preclinical
Protein Development
- Oral Small Molecule Restenosis Leads
Identified
THROMBIN RECEPTOR INHIBITOR PROGRAM:
- Parenteral Peptide and Acute ischemic coronary Leads
Small Molecule syndromes and restenosis Identified
- Oral Small Molecule Prevention of acute ischemic Leads
coronary syndromes and stroke Identified
</TABLE>
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INTEGRILIN(TM) GP IIb-IIIa INHIBITOR PROGRAM
The Company's first product candidate in clinical development is
INTEGRILIN(TM) (antithrombotic injection), a small synthetic peptide platelet
aggregation inhibitor intended for parenteral (injectable) administration in
acute indications. Based on preclinical studies and Phase I, II and III
clinical trials, the Company believes that the INTEGRILIN(TM) product acts as
an effective antithrombotic by inhibiting platelet aggregation, and also has a
favorable safety profile and rapid reversibility. INTEGRILIN(TM) is being
developed for the treatment of acute arterial thrombosis, including such
indications as complications following angioplasty, unstable angina, AMI (used
alone or as adjunctive therapy with thrombolytic agents), and stroke.
The mechanism of action of the INTEGRILIN(TM) product is to block the
integrin GP IIb-IIIa on platelets thereby preventing the crosslinking of
activated platelets via fibrinogen bridges. By competitively inhibiting
GPIIb-IIIa, the final common pathway of platelet aggregation, acute thrombus
formation and associated complications can be prevented.
In developing the INTEGRILIN(TM) product, the Company established four
key criteria. First, the product should be specifically targeted to inhibit
GP IIb-IIIa to avoid complications that could result from disruption of cellular
interactions that are mediated by other, closely related adhesion receptors.
Second, because the cardiovascular disorders that the Company is targeting with
this product are acute in nature, the product should be potent and act rapidly
upon administration. Third, in order to avoid prolonged impairment of normal
hemostasis, the effects of the product should be readily reversible after
administration is discontinued. Fourth, the product should be safe for repeat
usage considering that many patients with acute ischemic coronary syndromes are
treated more than once in the acute care setting.
Over the past five years, the INTEGRILIN(TM) product has been studied
in numerous completed clinical trials involving over 15,000 patients. These
trials have encompassed several indications and include a 4,000 patient,
multi-center Phase III trial, IMPACT II, for use of INTEGRILIN(TM) in
conjunction with coronary angioplasty, the results of which became available in
1995.
Based on the clinical results to date, the INTEGRILIN(TM) product has
established the following safety and efficacy profile:
SAFETY. INTEGRILIN(TM) has a favorable safety profile. Treatment with
INTEGRILIN(TM) does not increase the incidence of major bleeding
events. There is an increase in minor bleeding events, most commonly
at the arterial access site during angiography or angioplasty
procedures. Intracranial bleeding is an uncommon event in patients
undergoing PTCA and there has been no apparent increased rate of
intracranial bleeding in patients treated with INTEGRILIN(TM). In
addition, because no antibodies to INTEGRILIN(TM) were observed
following its administration, it is presumed that INTEGRILIN(TM) is not
immunogenic and that readministration of the medication to the same
patient can be carried out safely.
EFFICACY. As set forth in greater detail below, INTEGRILIN(TM)
demonstrated a reduction in acute ischemic complications associated
with coronary angioplasty in patients treated with the product in
IMPACT II. This clinical benefit was sustained at 30 days and six
months following patient enrollment. In Phase II clinical trials,
INTEGRILIN(TM) achieved desirable clinical activity in a variety of
acute coronary syndromes including unstable angina and AMI. Based on
these results, COR has proceeded with a range of clinical trials in
these and other indications.
In April 1995, the Company entered into a collaboration agreement with
Schering Corporation and Schering-Plough, Ltd. (collectively, "Schering") to
develop and commercialize the INTEGRILIN(TM) product on a worldwide basis. See
"Collaboration Agreements - Schering-Plough Corporation."
In April 1996, COR filed an application for marketing approval of the
INTEGRILIN(TM) product in the United States, and Schering filed an application
for marketing approval in Europe. COR and Schering are working
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together in the continued development of INTEGRILIN(TM) (antithrombotic
injection), including regulatory matters and planning for the marketing of the
product.
In February 1997, the United States Food and Drug Administration's
("FDA") Cardiovascular and Renal Drugs Advisory Committee (the "Committee")
considered the Company's filing in PTCA. The Committee concluded that the
IMPACT II trial of the INTEGRILIN(TM) product had shown positive results as an
adjunct therapy in helping to prevent acute cardiac ischemic complications in
patients undergoing PTCA. However, because the Committee also decided that the
results of the IMPACT II trial alone were not sufficient to forego the FDA's
customary requirement of two positive clinical trials prior to the approval of a
new drug, the Committee recommended against approval of INTEGRILIN(TM) at this
time. The Company has received an action letter from the FDA regarding the New
Drug Application ("NDA"). The not-approvable letter identifies clinical and
technical issues that need to be resolved, including the FDA's conclusion that
IMPACT II was not sufficiently robust as a single study to support approval. In
its letter, the FDA noted that a study in unstable angina is ongoing and that
the data should be provided which may add support to the findings of the IMPACT
II study. The Company has notified the FDA of the Company's intention to file
an amendment addressing the issues cited. An amendment to the NDA would need to
include data from PURSUIT, a Phase III trial of INTEGRILIN(TM) for use in
connection with unstable angina/non-Q wave MI. Enrollment in the PURSUIT trial
was completed in January 1997 and data are expected to be available later in
1997.
There is no assurance that marketing approval can be obtained on the
basis of clinical trials conducted to date, can be obtained if additional
clinical trials are conducted, or if obtained will not be substantially
delayed. If the INTEGRILIN(TM) product is approved for marketing in one
indication, there is no assurance that it will prove effective in any other
indication. The failure to obtain marketing approval for INTEGRILIN(TM) or a
significant delay in obtaining such approval would have a material, adverse
effect on the Company. See "Risk Factors."
THE INTEGRILIN(TM) PRODUCT - CLINICAL TRIALS
ANGIOPLASTY: PREVENTION OF ACUTE ISCHEMIC COMPLICATIONS
In late 1994, the Company completed patient enrollment in a Phase III
clinical trial, IMPACT II, to evaluate the safety and efficacy of the
INTEGRILIN(TM) product in reducing the acute complications of coronary
angioplasty. This study, conducted at 82 sites in the United States, evaluated
two different infusion rates with a common bolus of INTEGRILIN(TM) in patients
undergoing either elective or urgent coronary angioplasty.
Based on an analysis of all patients who received any study drug or
placebo, the INTEGRILIN(TM) product at the lower infusion rate reduced the
composite endpoint of death, myocardial infarction and emergency
revascularization by 31% at 24 hours (nominal p-value = 0.006) and 22% at 30
days (nominal p-value = 0.035), although the effect was less pronounced at the
higher infusion rate. The reduction in the clinical endpoint at all time
points was primarily due to a reduction in the more clinically serious
components of the endpoint: death and myocardial infarction. In addition, the
benefit of the reduction in death and myocardial infarction was sustained and
similar at both infusion rates at six months. The effect was less pronounced
under an analysis which includes all patients randomized in the study. The
safety data related to INTEGRILIN(TM) were favorable. Although the FDA
Advisory Committee did not recommend approval on the basis of this single
trial, it did conclude that the results were positive.
UNSTABLE ANGINA AND NON-Q WAVE MYOCARDIAL INFARCTION: PREVENTION OF
DEATH AND MYOCARDIAL INFARCTION
Multiple independent clinical studies have implicated the role of
platelet aggregation in unstable angina. Data indicate that the INTEGRILIN(TM)
product, by inhibiting platelet aggregation, promotes thrombus resolution, and
thereby enhances plaque healing and stabilization of the acute coronary
syndrome.
Patients presenting with chest pain of cardiac origin may be diagnosed
with acute ischemic coronary syndromes comprised of either unstable angina or
AMI. Prior to initiating Phase III clinical trials for
<PAGE> 10
INTEGRILIN(TM) (antithrombotic injection), the Company conducted three Phase
II studies in unstable angina. In 1995, the Company initiated PURSUIT, a large,
multi-national Phase III trial designed to assess the safety and efficacy of
the INTEGRILIN(TM) product in the management of patients with an initial
diagnosis of unstable angina or non-Q wave myocardial infarction, but
excluding patients presenting with AMI with ST segment elevation. In addition,
PURSUIT allows the evaluation of INTEGRILIN(TM) in the context of actual
clinical practice related to unstable angina and non-Q wave MI across a
wide variety of institutional settings.
The primary endpoint for this study is a composite of death and
myocardial infarction. This study included almost 11,000 patients and was
conducted in over 700 sites in over 25 countries. Enrollment was completed in
January 1997. In addition to the data in unstable angina and non-Q wave
myocardial infarction, the Company expects that clinical data from the PURSUIT
study will provide information concerning patients undergoing PTCA, because a
portion of the patients enrolled in the PURSUIT trial had a PTCA in the
ordinary course of their medical treatment.
ACUTE MYOCARDIAL INFARCTION: ENHANCEMENT OF CORONARY ARTERY
REPERFUSION AND PREVENTION OF REOCCLUSION
The Company has conducted a Phase II clinical trial of the
INTEGRILIN(TM) product with the thrombolytic tPA for the treatment of AMI. This
study of 180 patients demonstrated that INTEGRILIN(TM) could be combined with
tPA to enhance coronary artery reperfusion. Further Phase II studies have been
initiated to elucidate a dosing regimen of INTEGRILIN(TM) that could be used in
conjunction with thrombolytic products. Future studies will consider the
desirable combinations of INTEGRILIN(TM) and a thrombolytic product in terms of
both efficacy and safety, as these agents may synergistically promote an
anti-thrombotic effect but may also increase the risk of bleeding. Additional
Phase II studies are currently underway.
THE INTEGRILIN(TM) PRODUCT: COMMERCIAL OVERVIEW
The GP IIb-IIIa inhibitor marketplace is developing with the
introduction of the first product, abciximab, which has an initial indication
for use during high risk PTCA procedures. This product, developed by Centocor,
Inc. and marketed by Eli Lilly & Co. ("Lilly"), was launched in February 1995.
The INTEGRILIN(TM) product is the second agent in the GP IIb-IIIa class to be
submitted to the FDA for approval.
MARKETING AND SALES STRATEGY
As part of the COR and Schering collaboration agreement, the launch of
the INTEGRILIN(TM) product will be supported by both companies. Schering,
through its Key Pharmaceuticals Division, markets to the cardiology community
with established products. The Company believes Schering's commercial presence
with the clinical cardiologist will provide support to the commercialization of
INTEGRILIN(TM). See "Collaboration Agreement - Schering-Plough Corporation."
The primary target customer groups for the INTEGRILIN(TM) product will
be interventional cardiologists, clinical cardiologists and emergency room
physicians. Emergency room physicians will be important targets for the
unstable angina and AMI indications. In addition, hospital pharmacy directors
and other key hospital formulary members will be key as well as nurses and
nonmedical audiences who affect buying decisions.
COR is planning to hire and deploy a dedicated sales organization for
the launch of the INTEGRILIN(TM) product in the United States and Canada. This
sales force will be focused primarily at larger medical institutions. Through
its Key Pharmaceuticals Division, Schering also plans to deploy resources in the
hospital marketplace and provide significant additional sales force resources to
support PTCA, as well as future indications. The combined sales forces will be
competitive in size and will be scaled up as appropriate for additional
indications. The direct sales force selling effort will be supplemented by
educational, advertising and promotional platforms.
<PAGE> 11
In addition, because COR has the option to co-promote a proprietary
Schering cardiovascular product in the United States, COR has the opportunity to
establish itself in the marketplace before INTEGRILIN(TM) (antithrombotic
injection) is able to be sold. This may also contribute to market readiness for
the launch of the INTEGRILIN(TM) product.
RELATIVE MARKET SIZE. The Company believes that the duration of
therapy with the INTEGRILIN(TM) product will be longer in unstable angina and
in myocardial infarction than in PTCA. Clinical trials in these indications
allow more than one day of therapy. This is in part due to the differences in
the underlying pathophysiology of these diseases. The potential market size
for INTEGRILIN(TM) would therefore be affected by both the number of patients
receiving therapy and the number of days the patients receive therapy. As a
result of the larger number of patients and longer duration of treatment, the
Company believes the markets for unstable angina and AMI are larger than the
market for PTCA.
The introduction of agents that effectively reduce death and
myocardial infarction in these multiple patient populations should present
growth opportunities for the GP IIb-IIIa category. The Company's comprehensive
clinical development plan for the INTEGRILIN(TM) product is aimed at
identifying the significant clinical benefit that can be derived from the
utilization of INTEGRILIN(TM) in these challenging and important diseases.
ORAL GP IIb-IIIa INHIBITOR PROGRAM
Aspirin and ticlopidine are the most commonly prescribed agents for
long-term prophylaxis in patients who are at risk for stroke or AMI or who have
suffered a stroke or AMI. The Company believes that these agents are not
optimal therapeutics as both are relatively weak inhibitors of platelet
function. Nevertheless, both agents have shown efficacy in reducing ischemic
cardiovascular events. Therefore, oral agents which are capable of blocking
the final common pathway of platelet aggregation by binding to the integrin
GP IIb-IIIa on platelets may yield greater benefit. In order for such agents to
be accepted for chronic use, they would have to demonstrate an acceptable
safety profile with respect to their long term risk of bleeding. Moreover, the
Company believes that an effective oral GP IIb-IIIa inhibitor could be a natural
follow-on agent for patients who have been treated with the INTEGRILIN(TM)
product or other parenteral GP IIb-IIIa inhibitors while hospitalized.
The Company believes the likely criteria of a successful drug in this
category will be (i) high-affinity inhibition of GP IIb-IIIa, (ii) specificity
for GP IIb-IIIa relative to other integrins (iii) an acceptable level of
bioavailability, (iv) acceptable half-life, and (v) an acceptable safety
profile. In the course of the Company's collaboration agreement with Eli Lilly
and Company ("Lilly"), multiple chemical classes of small molecule GP IIb-IIIa
inhibitors were identified which included compounds that have been found to be
orally active in a variety of animal models. See "Collaboration Agreements -
Relationship with Eli Lilly & Co."
A candidate compound has been chosen by the Company for preclinical
development, and a sufficient quantity has been synthesized to support the
Company's initial clinical development program. The Company filed an
Investigational New Drug ("IND") Application for this compound in late 1996 and
initiated Phase I clinical trials in February 1997. In addition to its clinical
development program, the Company is continuing its research efforts to identify
additional orally active GP IIb-IIIa compounds.
FACTOR Xa INHIBITOR PROGRAM
The Company has identified the factor Xa / prothrombinase complex as a
target for small molecule inhibitors. COR scientists have discovered novel
inhibitors with high potency and specificity which have been shown to block both
arterial and venous thrombosis effectively in various animal models. In these
models, the bleeding risk of these inhibitors compared favorably with agents
such as low molecular weight heparin and heparin. A clinical need exists in the
prophylaxis of venous thrombosis. This is particularly true in the setting of
hip and knee replacement surgery where there remains a greater than 15%
incidence of deep vein thrombosis despite current therapy of either heparin in
combination with coumadin, or low molecular weight heparin. A lead compound
that can be administered either intravenously or subcutaneously is currently in
preclinical development at COR.
<PAGE> 12
In addition to its preclinical development compound, the Company is
continuing research to identify orally active factor Xa inhibitors. The
development of an orally active inhibitor in this class may offer significant
clinical advantages over presently available agents such as coumadin.
GROWTH FACTOR RECEPTOR ANTAGONIST PROGRAM
The Company's growth factor inhibitor program is directed toward the
discovery of protein and small molecule inhibitors of certain growth factor
receptor inhibitors in the tyrosine kinase family. In November 1992, the
Company entered into a collaboration agreement with Kyowa Hakko Kogyo Co., Ltd.
("Kyowa Hakko") focused on the discovery and development of small molecule
pharmaceuticals, primarily for the prevention of restenosis following
angioplasty. The collaboration targets a defined class of growth factor
inhibitors. In late 1995, this collaborative research program was extended for
a period of time continuing through late 1997. In December 1996, the
collaboration was expanded to include certain identified protein growth factor
inhibitors. See "Collaboration Agreements - Relationship with Kyowa Hakko."
The Company and Kyowa Hakko have identified multiple classes of small molecule
agents that specifically and with high potency inhibit growth factor signaling.
COR and Kyowa Hakko are evaluating lead compounds in animal models and are
pursuing the preclinical development of an identified protein growth factor
inhibitor.
THROMBIN RECEPTOR INHIBITOR PROGRAM
The Company's thrombin receptor inhibitor program is directed toward
the discovery of agents for the treatment of arterial thrombosis and restenosis
and may also address certain non-cardiovascular diseases.
Thrombin is an enzyme that has multiple effects on cells and proteins
within the vasculature and is the most potent activator of platelets. Thrombin
mediates cellular events through interactions with at least one protease
activated G protein-linked receptor found on platelets, as well as on most
vascular cells, including smooth muscle and endothelial cells. In December
1993, the Company and Ortho Pharmaceutical Corporation ("Ortho"), a subsidiary
of Johnson & Johnson, entered into a worldwide collaboration to research,
develop and commercialize thrombin receptor agonists and antagonists. In 1996,
Ortho exercised its options to extend the research term for an additional one or
two years, at the option of Ortho. In addition, Johnson & Johnson Development
Corporation purchased 399,106 shares of the Company's common stock for a price
of $4 million. See "Collaboration Agreements -- Relationship with Ortho
Pharmaceutical Corporation." The Company and Ortho are investigating a variety
of approaches to identify compounds that block the interaction of thrombin with
its receptor. The Company and Ortho have identified candidate inhibitors within
several different classes of compounds and are evaluating these inhibitors.
Recent data have demonstrated the potential existence of an alternate
thrombin-triggered platelet activation mechanism in mouse and human platelets.
Scientists at a number of independent institutions, as well as COR and Ortho,
are seeking to identify the nature of this second activation mechanism and to
assess its potential as a pharmaceutical target. The Company has an exclusive,
worldwide license from the Regents of the University of California to certain
patent rights relating to the thrombin receptor.
Outside the collaboration with Ortho, the Company is investigating a
novel member of the class of protease-activated G protein-linked receptors to
which it has obtained exclusive worldwide rights. See "Patents, Proprietary
Rights and Licenses."
NEW RESEARCH PROGRAMS
MYOCARDIAL SIGNAL TRANSDUCTION. The Company has initiated a new research
program directed toward the unmet clinical needs of patients with heart
failure. Heart failure is viewed as a progressive disease typically initiated
by a singular insult such as myocardial infarction. In the years thereafter,
cardiac dilatation representing dysfunction of the remaining normal myocardium
ensues. COR has focused on particular molecular targets in a specific
signaling pathway as a site for intervention.
<PAGE> 13
INTEGRIN SIGNALING. The Company has initiated a new program to discover
mechanisms of integrin signal transduction. This effort is being conducted in
collaboration with investigators at the Scripps Research Foundation. Integrins
play a key role in modulating not only cell migration and shape but also growth
and differentiation, thus placing them at a central location in a variety of
disease processes. The Company believes that inhibitors of these integrin
signaling pathways may be useful for the treatment or prevention of a wide
variety of disorders including thrombosis, inflammation, atherosclerosis and
tumor metastasis.
OTHER COR RESEARCH
FACTOR Xai PROGRAM. The Company and its advisors have demonstrated that
inactivated forms of the enzyme factor Xa produce inactive prothrombinase
complexes and inhibit thrombosis in animal models. The Company has developed a
chemically inactivated form of human plasma-derived factor Xa, designated by
the Company as EGR-Xa, and a recombinant inactivated form of factor Xa,
designated rXai. In 1995, the Company filed an IND with the FDA for EGR-Xa and
conducted a Phase I clinical trial. As part of its Factor Xai program, the
Company has also identified a class of procoagulant compounds that may have
application in promoting normal clotting in certain individuals with hemophilia
and related genetic bleeding disorders. The Company is currently evaluating
its research and development alternatives with respect to its Factor Xai
program.
NON-CARDIOVASCULAR RESEARCH APPLICATIONS. The Company's research has resulted
in the identification of compounds with potential non-cardiovascular
applications. The Company believes certain of its growth factor inhibitors may
have applications in treating certain other disorders which involve cell
proliferation, such as cancer, glomerulonephritis, and pulmonary fibrosis. The
Company has identified other compounds with potential applications in the areas
of wound healing, tumor metastasis and osteoporosis. The Company intends to
pursue such opportunities and seek collaboration partners to develop and
commercialize any potential product opportunities where appropriate.
DRUG DISCOVERY CAPABILITIES
To achieve its drug discovery objectives, the Company has established
advanced capabilities in several key technology areas:
CARDIOVASCULAR BIOLOGY. The Company's scientists and advisors have contributed
to a number of the key advances in the scientific understanding of thrombosis,
restenosis and heart failure. The Company has applied this expertise in its
choice of specific disease targets and in the creation of its drug discovery
strategies. The Company believes that its focus and expertise in the molecular
and cellular biology of cardiovascular disease, combined with its advanced
technologies, may provide it with a potential competitive advantage in the
discovery and development of novel therapeutic products. Thus far, the
Company's major focus has been on thrombosis, the process underlying the
syndromes of acute myocardial infarction, unstable angina and restenosis,
the process of vascular smooth muscle cell proliferation following PTCA or
other vascular interventional procedures. COR scientists have targeted several
of the potential mechanisms which regulate intravascular thrombosis or
restenosis. These include the platelet, the coagulation factor cascade, and the
vascular wall itself. In each case, the aim has been to develop agents which,
because of their novel mechanism of action, offer significant therapeutic
benefit and a satisfactory safety profile. COR's approach has been to
understand the pathophysiology of the disease process itself, and then to
identify and characterize molecular targets for which an agonist or antagonist
might have a positive therapeutic impact. The scope of the research group
therefore includes not only individuals with skills in the areas of cellular
and molecular biology, but also scientists in the disciplines of pharmacology,
physiology and clinical cardiology.
HIGH THROUGHPUT SCREENING. The Company has applied its biological expertise to
develop a variety of novel molecular assays suitable for high throughput
screening. For each high throughput screening assay developed, numerous
secondary assays for confirming in vitro activity and specificity must also be
developed. In addition to the libraries of its corporate partners, the
Company's own screening library consists of compounds purchased from commercial
and academic groups. The Company uses computer-based algorithms to model
molecular diversity in order to maximize the overall diversity of its compound
library and new compound purchases. The size of this
<PAGE> 14
library is projected to continue to grow over the next two years. High
throughput screening using multiple proprietary assays against the Company's
molecular targets is currently ongoing at the Company. Screening throughput is
assisted by the use of automated equipment.
MEDICINAL CHEMISTRY. The Company has established small organic molecule
synthesis capabilities. These capabilities use both "structure-based" design
principles and traditional analog synthetic approaches directed at small
molecules discovered through screening of organic molecule libraries in its
proprietary assays. The Company believes it has developed particular expertise
in "peptidomimetic" design, that is, the ability to develop small molecule
organic compounds that mimic the activity of peptide leads using
structure-based design approaches. This capability enables the Company to more
effectively generate compounds with appropriate pharmaceutical properties, such
as oral bioavailability and a prolonged half life.
ANIMAL MODEL STUDIES. The Company has established an important internal
capability in the area of animal models. The Company uses a variety of animal
models, including proprietary internally developed models, that are relevant to
the Company's disease targets. In addition, the Company works closely with
outside consultants and laboratories in other areas, such as the development of
knock-out and transgenic models, and the evaluation of compounds in primate
models. Using internal and external capabilities, compounds with therapeutic
potential can be rapidly evaluated in multiple complementary models to assess
their activity.
COLLABORATION AGREEMENTS
The Company evaluates, on an ongoing basis, potentials for
collaborations with other companies where such relationships may complement and
expand the Company's research, development, sales or marketing capabilities.
Any such arrangements would limit the Company's flexibility in pursuing
alternatives for the commercialization of its potential products subject to
collaboration.
The Company has ongoing collaborations with Schering, Ortho, and Kyowa
Hakko. In addition, the Company has an agreement with Lilly regarding a
research program which concluded in accordance with its term in April 1996.
RELATIONSHIP WITH SCHERING CORPORATION. In April 1995, the Company entered
into a collaboration agreement with Schering to develop and commercialize
INTEGRILIN(TM) (antithrombotic injection) on a worldwide basis. Schering paid
the Company a $20 million licensing fee upon signing the agreement. Schering
will also pay the Company milestone payments of up to approximately $100
million if specified development goals are achieved.
Under the agreement, decisions regarding the ongoing development and
marketing of the INTEGRILIN(TM) product are generally subject to the oversight
of a Joint Steering Committee with equal membership from the two companies,
although certain development decisions are allocated specifically to COR, and
in those markets where Schering has exclusive marketing rights, Schering has
decision-making authority with respect to marketing issues. Schering
participates in and shares the costs of developing INTEGRILIN(TM). The parties
work closely with each other in connection with regulatory matters, although
COR retains primary responsibility for such filings in the United States and
Canada, while Schering has primary responsibility for such filings elsewhere in
the world.
Both parties will have the right to co-promote the INTEGRILIN(TM)
product in the United States and Canada and share profits, if any, in these
countries. In Europe, Schering has the right to launch the product as an
exclusive licensee on a royalty-bearing basis for a period of time to be
determined under the agreement at a later date. Following this initial period,
COR has the right to co-promote the product in Europe and share profits. In
all co-promotion territories, the exact profit-sharing ratio between the
companies will depend on the amount of sales effort contributed by each
company. Outside of the United States, Canada and Europe, Schering is the
exclusive licensee on a royalty-bearing basis. As part of this overall
arrangement, Schering has granted an option to the Company to co-promote an
existing Schering cardiovascular product for a limited period of time as a
mechanism to help defray the costs of developing a new sales force and to help
integrate the COR and Schering sales forces.
<PAGE> 15
Under the terms of the agreement, both parties have certain rights to
terminate. Until 30 days after certain key data are received from the PURSUIT
trial, Schering may elect to terminate the agreement. In the event of such
termination: (i) COR would reacquire all rights to all INTEGRILIN(TM) products
subject to a royalty to Schering, (ii) Schering would be relieved of its
obligation to pay development costs incurred after June 30, 1997 except for
certain specified development costs where Schering will have the continuing
obligation to pay ongoing costs incurred by COR (subject to the obligation of
COR to repay certain of such costs under certain circumstances), and (iii)
Schering could exercise an option to obtain certain rights to a specified COR
research program. The exercise by Schering of its rights to the specified
research program are subject to Schering's obligations to pay a specified
percentage of program development costs, as well as milestone payments and
product royalties to COR, and for COR to retain certain copromotion and other
rights with respect to products resulting from the program.
RELATIONSHIP WITH ORTHO PHARMACEUTICAL CORPORATION. In December 1993, the
Company entered into a collaboration agreement with Ortho, a subsidiary of
Johnson & Johnson, focusing on the joint discovery, development and
commercialization of novel pharmaceuticals that may result from collaborative
research on the thrombin receptor. The Company and Ortho each provided
specified levels of internal resources to the collaborative research over the
initial three-year research term. In 1996, Ortho exercised its options to
extend the research term for an additional one or two years, at the option of
Ortho.
If products arise from this collaboration, Ortho will make development
milestone payments to the Company. In addition, the Company and Ortho may each
(i) participate in development of products under the collaboration and share
equally in the development costs on a worldwide basis, (ii) participate equally
in the commercialization of co-developed products (with the Company's rights of
commercialization to be limited to specified countries, including the major
countries of Europe, and in North America, Japan and Australia), and (iii)
share equally in profits or losses from any co-developed products in those
countries where the parties jointly commercialize the products. If either
party decides not to participate in the development of a product under the
collaboration, or does not participate in the commercialization of such product
in one or more countries, that party would receive royalties based on product
sales.
In connection with the collaboration with Ortho, in January 1994, the
Company sold to Johnson & Johnson Development Corporation ("JJDC"), a
subsidiary of Johnson & Johnson, 533,333 shares of common stock at $15.00 per
share, for an aggregate purchase price of $8 million, in a private placement.
In October 1996, Ortho exercised its option to extend the term of the
agreement, and pursuant to the terms of the original agreement, the Company
sold JJDC an additional 399,106 shares of common stock at $10.02 per share for
an aggregate purchase price of $4 million, also in a private placement. In
connection with the extension of the agreement, Ortho paid the Company $2.4
million in 1996 for research to be performed during the remaining term of the
contract.
RELATIONSHIP WITH KYOWA HAKKO. In November 1992, the Company entered into a
collaboration agreement with Kyowa Hakko Kogyo Co., Ltd. ("Kyowa Hakko") focused
on the discovery and development of small molecule pharmaceuticals, primarily
for the prevention of restenosis following angioplasty. The collaboration
targets a defined class of growth factor inhibitors. In late 1995, this
collaborative research program was extended for a period of time continuing
through late 1997. In December 1996, the collaboration was expanded to include
certain identified protein growth factor inhibitors. Both companies have
committed significant internal resources to all phases of research. The Company
has exclusive development and marketing rights in the United States for any
products resulting from the collaboration, and Kyowa Hakko has exclusive
development and marketing rights in Asia for any such products. The two
companies have agreed to develop and commercialize jointly any such products on
a shared economic basis in the rest of the world. The agreement further
provides that Kyowa Hakko will have the exclusive right to develop and
commercialize products only for a single, defined non-cardiovascular disease
indication outside of the United States.
In addition, under the terms of the agreement, Kyowa Hakko has certain
rights to supply bulk material for the manufacture of any products resulting
from the collaboration, and the Company has agreed to purchase its requirements
for such material from Kyowa Hakko. If Kyowa Hakko is unable to provide the
Company with adequate supplies of any material, the Company is entitled to seek
alternate suppliers. However, there can be no assurance that alternative supply
arrangements can be established on a timely or commercially reasonable basis, if
at all.
RELATIONSHIP WITH ELI LILLY AND COMPANY. In May 1991, the Company entered into
a collaborative research agreement with Lilly in the field of platelet
aggregation inhibitors. This agreement was modified in May 1993 and the
research term expired at the end of April 1996. The research collaboration with
Lilly did not include the INTEGRILIN(TM) product. Under this collaboration, two
compounds were designated for development. A lead parenteral product had
entered Phase II clinical trials and a lead oral compound had entered
preclinical development in
<PAGE> 16
anticipation of the filing of an IND. In 1995, Lilly advised the Company of its
desire, based on a review of its product development portfolio, to discontinue
its participation in the development of these compounds. Under the terms of a
November 1996 amendment, the Company now has the exclusive right to develop and
commercialize the two compounds referenced above, subject to a royalty to Lilly.
In addition, under the terms of the amendment, the Company has the exclusive
right to research, develop and commercialize certain potential oral compounds,
also subject to a royalty to Lilly. Under the original agreement and the
amendment between the parties, COR and Lilly have shared rights with respect to
all other compounds which were the subject of the collaborative research.
Research Collaborations. The Company is actively engaged in
collaborations with advisors and consultants at a number of universities and
medical centers in a number of areas including, but not limited to, integrin
signaling, myocardial signal transduction, animal models of thrombosis,
thrombolysis and restenosis, molecular biology of growth factor receptors and
x-ray crystallography.
While the Company believes its agreements with its ongoing
collaborators provide sufficient incentives to all parties, there can be no
assurance that the relationships will be successful. Although under its
current arrangements the Company and its collaborators will work exclusively
with each other within a defined field for a defined period, there can be no
assurance that a collaborator or collaborators will not terminate its agreement
with the Company or pursue alternative products, therapeutic approaches or
technologies as a means of developing treatments for the diseases targeted by
the Company or a collaboration. For these and other reasons, such as a change
in a collaborator's strategic direction, even if a collaborator continues its
participation in its program with the Company, it may nevertheless determine
not to actively pursue the development or commercialization of any particular
product or product opportunity. In such event, the Company's ability to pursue
such potential products could be severely limited.
For a discussion of research and development expenditures, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
COMPETITION
Due to the incidence and severity of cardiovascular diseases, the
market for therapeutic products that address such diseases is large, and
competition is intense and expected to increase. The Company's most significant
competitors are major pharmaceutical companies and more established
biotechnology companies, which have significant resources and expertise in
research and development, manufacturing, testing, obtaining regulatory
approvals and marketing. Emerging pharmaceutical and biotechnology companies
may also prove to be significant competitors, particularly through
collaboration arrangements with large pharmaceutical companies. Many of these
competitors have significant cardiovascular products approved or in
development, and operate large, well-funded cardiovascular research and
development programs. Furthermore, academic institutions, governmental
agencies, and other public and private research organizations conduct research,
seek patent protection and establish collaboration arrangements for product and
clinical development and marketing in the cardiovascular disease field and
other areas being targeted by the Company.
The Company is aware of products in research or development by its
competitors that address all of the diseases and disorders being targeted by
the Company, and any of these products may compete directly with potential
products being developed by the Company. In particular, the Company is aware
that many of its competitors have programs specifically designed to develop
parenteral and oral GP IIb-IIIa inhibitors. One of these companies has a
monoclonal antibody-based parenteral GP IIb-IIIa inhibitor, abciximab, that has
received regulatory approval and is being sold commercially. In addition to
abciximab, at least one other parenteral GP IIb-IIIa antagonist is being studied
in clinical trials. Orally available GP IIb-IIIa inhibitors are being developed
by a number of pharmaceutical companies with agents at various stages of
clinical development. The Company believes these compounds are not likely to
represent direct competition for injectable products as they are being designed
for chronic therapies and are expected to be dosed to have a lesser
anti-platelet effect and to be designed to have a long biological half life.
There can be no assurance that these competitors will not succeed in developing
technologies and products that are more effective than those being developed by
the Company or that would render the Company's technology obsolete or
<PAGE> 17
noncompetitive. In addition, these companies and institutions compete with the
Company in recruiting and retaining highly qualified scientific and management
personnel.
Any product which the Company succeeds in developing and for which it
gains regulatory approval must then compete for market acceptance and market
share. For certain of the Company's potential products, an important
competitive factor will be the timing of market introduction of competitive
products. Accordingly, the Company expects that important competitive factors
will be the relative speed with which companies can develop products, complete
the clinical testing and approval processes and supply commercial quantities of
the product to the market. With respect to clinical testing, competition may
also delay progress by limiting the number of clinical investigators and
patients available to test the Company's potential products.
In addition to the above factors, competition is based on product
efficacy, safety, the timing and scope of regulatory approvals, availability of
supply, marketing and sales capability, reimbursement coverage, price and
patent position.
MARKETING STRATEGY
The Company's strategy is to market products for which it obtains
approval either directly or through co-promotion arrangements or other
licensing arrangements with large pharmaceutical or biotechnology companies.
The Company's products under development are targeted towards the acute care as
well as the chronic care markets. The Company intends to retain selected North
American and European marketing rights for products where appropriate.
The Company has a collaboration agreement with Schering to develop and
commercialize INTEGRILIN(TM) (antithrombotic injection) on a worldwide basis.
Both parties have the right to co-promote and share profits, if any, in the
United States and Canada. Schering has the right to launch the INTEGRILIN(TM)
product in Europe and would pay the Company royalties for a specified initial
period, after which the Company would have the right to co-promote and share
profits, if any. See "Collaboration Agreements-Relationship with Schering
Corporation." The Company has not developed a specific commercialization plan
with respect to other of its potential products. Implementation will depend in
large part on the market potential of any products the Company develops as well
as on the Company's financial resources. The Company may establish
co-promotion, corporate partner or other arrangements for the marketing and sale
of certain of its products and in certain geographic markets. There can be no
assurance that the Company will be successful in establishing such arrangements,
or that these arrangements will result in the successful marketing and sales of
the Company's products.
Sales of the Company's products in development will be dependent in
part on the availability of reimbursement from third-party payers, such as
government and private insurance plans. The Company plans to meet with
administrators of these plans to discuss the potential medical benefits and
cost-effectiveness of its products. The Company believes this approach may
assist in obtaining reimbursement authorization for its products from these
third-party payers.
PROCESS DEVELOPMENT AND MANUFACTURING
The Company relies primarily on third-party manufacturers to produce
its compounds for preclinical and clinical purposes. Currently, the Company
has no manufacturing facilities for either the production of bulk drug
substances or the manufacture of final dosage forms. The Company believes that
all of its existing compounds can be produced using established manufacturing
methods, including cell culture, fermentation or traditional pharmaceutical
synthesis. The Company has established a quality control program, including a
set of standard operating procedures, intended to ensure that the Company's
compounds are manufactured in accordance with the Good Manufacturing Practices
("GMP"), established by the FDA, the requirements of the California State Board
of Pharmacy and other applicable regulations.
Production of the INTEGRILIN(TM) product, both for clinical trials and
for commercialization, is planned to be done through contract manufacturers.
The Company believes that material that has been produced by contract
<PAGE> 18
manufacturers has been done in conformity with applicable regulatory
requirements. The Company believes the contracted supply of INTEGRILIN(TM)
(antithrombotic injection) is sufficient to conduct clinical trials and initial
commercial launch as currently planned. The Company has contracted with
third-party manufacturers to produce the INTEGRILIN(TM) product for subsequent
clinical trials and for commercial distribution, if applicable. If approved and
successfully launched for unstable angina, the Company may need to increase the
current manufacturing capacity. The Company is working with its vendors on
capacity forecasts and planning, with the objective of assuring adequate supply.
The Company has established long-term supply arrangements with a bulk product
supplier and with a supplier for the filling and final packaging of
INTEGRILIN(TM). The Company's manufacturing plans include the addition of
capacity both with its existing suppliers and with secondary manufacturers of
bulk and finished product. Successful technology transfer from the existing
bulk supplier is needed to ensure success with potential secondary suppliers.
The production of the Company's compounds is based in part on
technology that the Company believes to be proprietary. The Company may
license this technology to contract manufacturers to enable them to manufacture
compounds for the Company. There can be no assurance that such manufacturers
will abide by any limitations or confidentiality restrictions in licenses with
the Company. In addition, any such manufacturer may develop process technology
related to the manufacture of the Company's compounds that such manufacturer
owns either independently or jointly with the Company. This would increase the
Company's reliance on such manufacturer or require the Company to obtain a
license from such manufacturer in order to have its products manufactured.
There can be no assurance that any such license would be available on terms
acceptable to the Company, if at all. There can be no assurance that the
arrangements with third-party manufacturers will be successful. In connection
with the commercialization of its products, the Company may establish multiple
third-party manufacturing sources on commercially reasonable terms for its
products. There can be no assurance that the Company will be able to establish
such sources, or, if such sources are established, that the sources will be
successful.
PATENTS, PROPRIETARY RIGHTS AND LICENSES
The Company's policy is to file patent applications to protect
technology, inventions and improvements that are important to the development
of its business. The Company also relies upon trade secrets, know-how,
continuing technological innovations and licensing opportunities to develop and
maintain its competitive position. The Company plans to prosecute and defend
its patent applications aggressively, including any patents that may issue, as
well as its proprietary technology. The Company has filed, or has licensed
exclusively, a series of related patent applications with respect to each of
its products in development.
The Company's success will depend in part on its ability to obtain
patent protection for its products both in the United States and in other
countries. The Company has patents or has filed applications for patents
covering many of its products (including the INTEGRILIN(TM) product) and
processes, including patent applications covering various aspects of the
Company's platelet aggregation inhibitor, thrombin receptor and venous
thrombosis programs, as well as other programs. Many of the patents or
applications include composition of matter claims relating to a number of the
Company's compounds.
The patent positions of pharmaceutical and biotechnology firms,
including the Company, are uncertain and involve complex legal and factual
questions. In addition, the coverage claimed in a patent application can be
significantly reduced before the patent is issued. Consequently, the Company
does not know whether any of its applications will result in the issuance of
patents or, if any patents are issued, whether they will provide significant
proprietary protection or will be circumvented or invalidated. Since patent
applications in the United States are maintained in secrecy until patents
issue, and since publication of discoveries in the scientific or patent
literature often lags behind actual discoveries, the Company cannot be certain
that it was the first creator of inventions covered by its pending patent
applications or that it was the first to file patent applications for such
inventions. Moreover, the Company may have to participate in interference
proceedings declared by the United States Patent and Trademark Office to
determine priority of invention, which could result in substantial cost to the
Company, even if the eventual outcome is favorable to the Company. There can
be no assurance that the Company's patents, if issued, would be held valid by a
court of competent jurisdiction. An adverse outcome could subject the Company
to significant
<PAGE> 19
liabilities to third parties, require disputed rights to be licensed from third
parties or require the Company to cease using such technology.
The development of therapeutic products for cardiovascular
applications is intensely competitive. A number of pharmaceutical companies,
biotechnology companies, universities and research institutions have filed
patent applications or received patents in this field. Some of these
applications or patents may be competitive with the Company's applications, or
conflict in certain respects with claims made under the Company's applications.
Such conflict could result in a significant reduction of the coverage of the
Company's patents, if issued. In addition, if patents are issued to other
companies that contain competitive or conflicting claims and such claims are
ultimately determined to be valid, no assurance can be given that the Company
would be able to obtain licenses to these patents at a reasonable cost, or
develop or obtain alternative technology.
The Company also relies upon trade secret protection for its
confidential and proprietary information. No assurance can be given that
others will not independently develop substantially equivalent proprietary
information and techniques or otherwise gain access to the Company's trade
secrets or disclose such technology, or that the Company can meaningfully
protect its trade secrets.
It is the Company's policy to require its employees, consultants,
outside scientific collaborators, sponsored researchers and other advisors to
execute confidentiality agreements upon the commencement of employment or
consulting relationships with the Company. These agreements provide that all
confidential information developed or made known to the individual during the
course of the individual's relationship with the Company is to be kept
confidential and not disclosed to third parties except in specific
circumstances. In the case of employees, the agreements provide that all
inventions conceived by the individual shall be the exclusive property of the
Company. There can be no assurance, however, that these agreements will
provide meaningful protection or adequate remedies for the Company's trade
secrets in the event of unauthorized use or disclosure of such information.
The Company has obtained licenses from a number of universities,
companies and research institutions to technologies, processes and compounds
that it believes may be important to the development of its products. These
agreements require the Company to pay license maintenance fees and, upon
commercial introduction of certain products, pay royalties. These include
exclusive license agreements with the Regents of the University of California
and the Oklahoma Medical Research Foundation, and a non-exclusive license
agreement with the Board of Trustees of Stanford University. The
above-mentioned exclusive licenses may be canceled or converted to
non-exclusive licenses if specified milestones are not achieved. There can be
no assurance that any of these licenses will provide effective protection
against the Company's competitors.
GOVERNMENT REGULATION
The manufacturing and marketing of the Company's products and its
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, drugs are subject to rigorous FDA regulation.
The Federal Food, Drug and Cosmetic Act and the Public Health Service Act
govern the testing, manufacture, safety, efficacy, labeling, storage, record
keeping, approval, advertising and promotion of the Company's products. In
addition to FDA regulations, the Company is also subject to other federal and
state regulations such as the Occupational Safety and Health Act and the
Environmental Protection Act. Product development and approval within this
regulatory framework takes a number of years and involves the expenditure of
substantial resources.
The steps required before a pharmaceutical agent may be marketed in the
United States include (i) preclinical laboratory and animal tests, (ii) the
submission to the FDA of an application for an IND, which must become effective
before clinical trials in the United States may commence, (iii) adequate and
well-controlled clinical trials to establish the safety and efficacy of the
drug, (iv) the submission of a NDA or Product License Application ("PLA") to
the FDA and (v) the FDA approval of the NDA or PLA prior to any commercial sale
or shipment of the drug. In addition to obtaining FDA approval for each
product, each domestic drug manufacturing establishment must be registered with,
and approved by, the FDA. Drug product
<PAGE> 20
manufacturing establishments located in California also must be licensed by the
State of California in compliance with separate regulatory requirements.
Preclinical tests include laboratory evaluation of product chemistry
and animal studies to assess the potential safety and efficacy of the product
and its formulation. The results of the preclinical tests are submitted to the
FDA as part of an IND and, unless the FDA objects, the IND will become
effective 30 days following its receipt by the FDA.
Clinical trials are typically conducted in three sequential phases,
but the phases may overlap. In Phase I, the initial introduction of the drug
into human subjects, the drug is tested for safety (adverse effects), dosage
tolerance, metabolism, distribution, excretion and clinical pharmacology. Phase
II involves studies in a limited patient population to (i) determine the
efficacy of the drug for specific targeted indications, (ii) determine dosage
tolerance and optimal dosage and (iii) identify possible adverse effects and
safety risks. When a compound is found to be effective and to have an
acceptable safety profile in Phase II evaluations, Phase III trials are
undertaken to further evaluate clinical efficacy and to test further for safety
within an expanded patient population at multiple clinical study sites. The
FDA reviews both the clinical plans and the results of the trials and may
discontinue the trials at any time if there are significant safety issues.
The results of the preclinical studies and clinical studies are
submitted to the FDA in the form of an NDA or PLA for marketing approval. The
testing and approval process is likely to require substantial time and effort
and there can be no assurance that any approval will be granted on a timely
basis, if at all. The approval process is affected by a number of factors,
including the severity of the disease, the availability of alternative
treatments and the risks and benefits demonstrated in clinical trials. The FDA
may deny an NDA if applicable regulatory criteria are not satisfied or may
require submission of data from additional testing or additional information.
Notwithstanding such submission, the FDA may ultimately decide that the
application does not satisfy its regulatory criteria for approval. Moreover,
if regulatory approval of a drug is granted, such approval may entail
limitations on the indicated uses for which it may be marketed. Finally,
product approvals may be withdrawn if compliance with regulatory standards is
not maintained or if problems occur following initial marketing. After FDA
approval for the initial indications, further clinical trials may be necessary
to gain approval for the use of the product for additional indications. The FDA
may also require post-marketing testing to monitor for adverse effects, which
can involve significant expense.
Among the conditions for NDA or PLA approval is the requirement that
the prospective manufacturer's quality control and manufacturing procedures
conform to GMP. Domestic manufacturing facilities are subject to biennial FDA
inspections and foreign manufacturing facilities are subject to periodic FDA
inspections or inspections by the foreign regulatory authorities with
reciprocal inspection agreements with the FDA.
For marketing outside the United States, the Company also is subject to
foreign regulatory requirements governing clinical trials and marketing approval
for drugs. The requirements governing the conduct of clinical trials, product
licensing, pricing and reimbursement vary widely from country to country. In
the European Community, human pharmaceutical products are also subject to
extensive regulation. The European Community Pharmaceutical Directives govern,
among other things, the testing, manufacture, safety, efficacy, labeling,
storage, record keeping, advertising and promotion of human pharmaceutical
products. Effective in January 1995, the European Community enacted new
regulations providing for a centralized licensing procedure, which is mandatory
for certain kinds of products, and a decentralized (country by country)
procedure for all other products. A license granted under the centralized
procedure authorizes marketing of the product in all member states of the
European Community. Under the decentralized procedure, a license granted in one
member state can be extended to additional member states pursuant to a
simplified application process. In the centralized procedure, the European
Medicines Evaluation Agency coordinates a scientific review by one or more
rapporteurs chosen from among the membership of the Committee for Proprietary
Medicinal Products ("CPMP"), which represents the medicine authorities of the
member states. The final approval is granted by a decision of the Commission or
Council of the European Community, based on an opinion of the CPMP.
The Company's regulatory strategy is to pursue clinical development
and marketing approval of its products in the United States, Canada and Europe.
The Company intends to seek input from the FDA at each stage of the
<PAGE> 21
clinical process to facilitate appropriate and timely clinical development,
focusing on issues such as trial design and clinical endpoints. The Company
anticipates that the clinical development of products in Europe and Asia may be
the responsibility of its corporate partners. Where appropriate, the Company
intends to pursue available opportunities for accelerated approval of products,
such as the FDA rules for conditional approval of drugs intended to treat fatal
or disabling diseases, although there can be no assurance that such accelerated
approval will be available.
INSURANCE
The testing, marketing and sale of human pharmaceuticals expose the
Company to significant and unpredictable risks of product liability claims in
the event that the use of its technology or products is alleged to have
resulted in adverse effects. Such risks will exist even with respect to any
products that receive regulatory approval for commercial sale. While the
Company has obtained liability insurance for its clinical trials for
INTEGRILIN(TM) (antithrombotic injection), there can be no assurance that it
will be sufficient to satisfy any liability that may arise. There can be no
assurance that adequate insurance coverage will be available in the future at
acceptable cost, if at all, or that a product liability claim would not
adversely affect the business or financial condition of the Company.
EMPLOYEES
As of February 1, 1997, the Company had 177 full-time employees, of
whom 132 were in research and development and 45 were in marketing, general and
administrative areas.
All employees are located at the Company's facility in South San
Francisco, California. None of the Company's employees is represented by a
collective bargaining agreement. The Company considers its employee relations
to be good. The Company's policy is to enter into confidentiality agreements
with its employees and consultants.
ADDITIONAL RISK FACTORS
Stockholders or investors in shares of the Company's Common Stock
should carefully consider the following additional risk factors, in addition to
the other information in this Report.
EARLY STAGE OF DEVELOPMENT
The Company was founded in 1988. All of the Company's potential
products are in research or development, and no revenues have been generated
from product sales. The Company's revenues to date have consisted of license
fees and contract revenue under collaboration research and development
agreements, government grants and interest income. To achieve profitable
operations, the Company, alone or with others, must successfully develop,
obtain regulatory approval for, introduce, market and sell products. No
assurance can be given that the Company's product development efforts will be
successfully completed or that required regulatory approvals will be obtained.
Moreover, there can be no assurance that providers, payers or patients will
accept the Company's products, even if the Company's products prove to be safe
and effective and are approved for marketing by the FDA and other regulatory
authorities. See "COR Products in Research or Development."
LOSS HISTORY AND ACCUMULATED DEFICIT; QUARTERLY FLUCTUATIONS
The Company had accumulated net losses as of December 31, 1996 of
$128,058,000. The Company expects to incur operating losses for the next
several years. These losses may increase as the Company expands its research
and development activities, and such losses may fluctuate significantly from
quarter to quarter. There can be no assurance that the Company will ever
successfully develop, receive regulatory approval for, commercialize,
manufacture, market or sell any product or achieve or sustain significant
revenues from product sales or profitable operations.
<PAGE> 22
FUTURE CAPITAL NEEDS; UNCERTAINTY OF ADDITIONAL FUNDING
The development of the Company's products will require a commitment of
substantial resources to conduct the time-consuming research, preclinical
development and clinical trials that are necessary to bring products to market
and to establish production and marketing capabilities. The Company
anticipates that its existing capital resources and interest earned thereon
will enable it to maintain its current and planned operations at least into
1998. The Company will need to raise substantial additional funds. The
Company intends to seek such additional funding through collaboration
arrangements and public or private financings, including equity financings. No
assurance can be given that such additional funding will be available on
favorable terms, if at all. In such event, the Company may need to delay or
curtail its research and development activities to a significant extent. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Liquidity and Capital Resources."
TECHNOLOGICAL UNCERTAINTY AND CHANGE; NEED FOR ADDITIONAL RESEARCH AND
DEVELOPMENT
The Company uses multiple technologies in developing potential
products for targeted cardiovascular diseases. No assurance can be given that
problems will not develop with these technologies or that commercially feasible
products will ultimately be developed by the Company. The Company's potential
products will require significant additional research or development, including
process development and extensive clinical testing, prior to commercial use.
There can be no assurance that these potential products will be successfully
developed into drugs that can be administered to humans or that any such drugs
or related therapies will prove to be safe and effective in clinical trials or
cost-effective to manufacture. Further, these potential products may prove to
have undesirable and unintended side effects and, in some cases, may require
complex delivery systems that may prevent or limit their commercial use.
The fields of biotechnology and related pharmaceutical technologies
have undergone rapid and significant technological change. The Company expects
that the technologies associated with its research and development will
continue to develop rapidly, and the Company's future success will depend in
large part on its ability to maintain a competitive position with respect to
these technologies. Rapid technological development by the Company or others
may result in compounds, products or processes becoming obsolete before the
Company recovers a significant portion of the research, development and
commercialization expenses it has incurred. See "COR Products in Research or
Development" and "Competition."
NEED FOR EXTENSIVE CLINICAL TRIALS
In April 1996, COR filed an application for marketing approval of
INTEGRILIN(TM) (antithrombotic injection) in the United States, and Schering
filed an application for marketing approval in Europe. COR and Schering are
working together in the continued development of the INTEGRILIN(TM) product,
including regulatory matters and planning for the marketing of the product.
In February 1997, the FDA's Cardiovascular and Renal Drugs Advisory
Committee (the "Committee") considered the Company's filing in PTCA. The
Committee concluded that the IMPACT II trial of the INTEGRILIN(TM) product had
shown positive results as an adjunct therapy in helping to prevent acute
cardiac ischemic complications in patients undergoing PTCA. However, because
the Committee also decided that the results of the IMPACT II trial alone were
not sufficient to forego the FDA's customary requirement of two positive
clinical trials prior to the approval of a new drug, the Committee recommended
against approval of INTEGRILIN(TM) at this time. The Company has received an
action letter from the FDA regarding the NDA. The not-approvable letter
identifies clinical and technical issues that need to be resolved, including
the FDA's conclusion that IMPACT II was not sufficiently robust as a single
study to support approval. In its letter, the FDA noted that a study in
unstable angina is ongoing and that the data should be provided which may add
support to the findings of the IMPACT II study. The Company has notified the
FDA of the Company's intention to file an amendment addressing the issues
cited. An amendment to the NDA would need to include data from PURSUIT, a
Phase III trial of INTEGRILIN(TM) for use in connection with unstable
angina/non-Q wave MI. Enrollment in the PURSUIT trial was completed in January
1997 and data are expected to be available later in 1997.
<PAGE> 23
Although the Company is conducting Phase II and Phase III studies of
INTEGRILIN(TM) (antithrombotic injection) for certain indications, further Phase
II studies and other large, time-consuming and more costly Phase III studies
will be required to demonstrate safety and efficacy in the treatment of other
indications. There can be no assurance that such clinical trials will be
successful or that safety or efficacy will be demonstrated, or that other
clinical trials will not be required. There can be no assurance that the
INTEGRILIN(TM) product or any of the Company's other products in development
will receive marketing approval in any country on a timely basis, or at all,
or, if such approval is received, that the Company will be successful in
commercializing INTEGRILIN(TM). If the Company is unable to demonstrate the
safety and efficacy of INTEGRILIN(TM) to the satisfaction of the FDA or other
regulatory authorities, the Company's business, financial condition and results
of operations could be materially and adversely affected.
The regulatory process, which includes preclinical studies and
clinical trials of each compound to establish its safety and efficacy, takes
many years and requires the expenditure of substantial resources. Moreover, if
regulatory approval of a drug is granted, such approval may entail limitations
on the indicated uses for which it may be marketed. Failure to comply with
applicable regulatory requirements can, among other things, result in fines,
suspension of regulatory approvals, product recalls, seizure of products,
operating restrictions and criminal prosecutions. Further, FDA policy may
change and additional government regulations may be established that could
prevent or delay regulatory approval of the Company's potential products. In
addition, a marketed drug and its manufacturer are subject to continual review,
and later discovery of previously unknown problems with a product or
manufacturer may result in restrictions on such product or manufacturer,
including withdrawal of the product form the market.
Data relating to preclinical and clinical studies of the Company's
potential products are published, presented or publicly released from time to
time by the Company, its consultants or clinical investigators conducting such
studies. Since data are subject to continuing evaluation and analysis, data
generated from any single study are not necessarily representative of the total
data currently available or that may be generated in the future regarding the
safety and efficacy of potential products.
All of the Company's potential products are subject to extensive
regulation and will require approval from the FDA and other regulatory agencies
prior to commercial sale. The cost to the Company of conducting clinical
trials for any potential product can vary dramatically based on a number of
factors, including the order and timing of clinical indications pursued and the
extent of development and financial support, if any, from corporate partners.
Because of the intense competition in the cardiovascular market, the Company
may have difficulty obtaining sufficient patient populations or clinician
support to conduct its clinical trials as planned and may have to expend
substantial additional funds to obtain access to such resources, or delay or
modify its plans significantly. See "COR Products in Research or Development,"
"Competition" and "Government Regulation."
DEPENDENCE ON COLLABORATIVE RELATIONSHIPS
The Company evaluates, on an ongoing basis, potential collaboration
agreements with other companies where such relationships may complement and
expand the Company's research, development, sales or marketing capabilities.
Any such arrangements will limit the Company's flexibility in pursuing
alternatives for the commercialization of its products. There can be no
assurance that the Company will establish any additional collaboration
arrangements or that, if established, such relationships will be successful.
See "Business Strategy."
The Company has established collaboration arrangements with Schering,
Ortho and Kyowa Hakko. While the Company believes its agreements with these
companies provide sufficient incentives to all parties, there can be no
assurance that the relationships will be successful. Although under its
current arrangements, the Company and its collaborators will work exclusively
with each other within a defined field for a defined period, there can be no
assurance that a collaborator or collaborators will not terminate its agreement
with the Company or pursue alternative products, therapeutic approaches or
technologies as a means of developing treatments for the diseases targeted by
the Company or a collaboration. For these or other reasons, such as a change
in a collaborator's strategic direction, even if a collaborator continues its
contributions to the arrangement, it may nevertheless determine not to
<PAGE> 24
actively pursue the development or commercialization of any resulting products.
In such event, the Company's ability to pursue such potential products could be
severely limited. See "Collaboration Agreements."
The Company recognized $18,635,000 and $11,750,000 in contract revenue
in 1996 and 1995, respectively, under the arrangement with Schering,
representing 99% and 95% of contract revenues in 1996 and 1995, respectively.
If these revenues were discontinued, the Company's ability to pursue the
development or commercialization of INTEGRILIN(TM) (antithrombotic injection)
could be severely limited. See "Collaboration Agreements - Relationship with
Schering Corporation."
UNCERTAINTY REGARDING PATENTS AND PROPRIETARY TECHNOLOGY
The Company's success will depend in part on its ability to obtain
patent protection for its products both in the United States and in other
countries. The Company has filed, or has licensed exclusively, a series of
related patent applications with respect to each of its products in
development. The Company intends to file additional applications as
appropriate. No assurance can be given that patents will issue from any
applications filed by the Company or that, if patents do issue, the claims
allowed will be sufficiently broad to protect the Company's technology. In
addition, no assurance can be given that any patents issued to the Company will
not be challenged, invalidated or circumvented or that the rights granted
thereunder will provide competitive advantages to the Company.
The Company's success will also depend in part upon its ability to
develop commercially viable products without infringing patents or proprietary
rights of others. A number of pharmaceutical, biotechnology and other
companies, universities and research institutions have filed patent
applications or received patents in the cardiovascular field. Some of these
applications or patents may be competitive with the Company's applications or
conflict in certain respects with claims made under the Company's applications.
Such conflicts could result in a significant reduction of the coverage of the
Company's patents, if issued. In addition, if patents are issued to other
companies that contain competitive or conflicting claims, no assurance can be
given that the Company would be able to obtain licenses to these patents at a
reasonable cost or develop or obtain alternative technology. Failure by the
Company to obtain a license to any technology that it may require to
commercialize its products would have a material adverse effect on the Company.
The Company also relies on trade secrets and proprietary know-how.
The Company has been and will continue to be required to disclose its trade
secrets and proprietary know-how not only to employees and consultants but also
to actual or potential corporate partners, collaborators and contract
manufacturers, many of which may be competitors of the Company. Although the
Company seeks to protect its trade secrets and proprietary know-how, in part by
entering into confidentiality agreements with such persons, there can be no
assurance that these agreements will not be breached, that the Company would
have adequate remedies for any breach, or that the Company's trade secrets will
not otherwise become known or be independently discovered by competitors.
Litigation, which could result in substantial cost to and diversion of
effort by the Company, may be necessary to enforce any patents issued to the
Company, to protect trade secrets or know-how owned by the Company or to
determine the scope and validity of the proprietary rights of others. In
addition, the Company may have to participate in interference proceedings
declared by the U.S. Patent and Trademark Office to determine the priority of
inventions, which could result in substantial cost to the Company. See
"Patents, Proprietary Rights and Licenses."
DEPENDENCE ON KEY PERSONNEL
The Company's success depends in large part upon its ability to
attract and retain highly qualified scientific and management personnel and
consultants. The Company faces competition for such individuals from other
companies, academic institutions, government entities and other organizations.
See "Competition" and "Executive Officers and Directors."
<PAGE> 25
NEED FOR IMPROVEMENTS IN PROCESS DEVELOPMENT; RELIANCE ON THIRD-PARTY
MANUFACTURERS
The Company currently does not have the capacity to manufacture its
potential products, is dependent on contract manufacturers or collaboration
partners for the production of its potential products for preclinical research
and clinical trial purposes and expects to be dependent on such manufacturers
or collaboration partners for commercial production. In the event that the
Company is unable to obtain contract manufacturing, or obtain such
manufacturing on commercially acceptable terms, it may not be able to
commercialize its products as planned. The Company's dependence upon third
parties for the manufacture of its potential products may adversely affect the
Company's profit margins, if any, and its ability to develop and manufacture
products on a timely and competitive basis. The Company's long-range objective
is to establish internal manufacturing capabilities for certain of its
potential products. However, the Company is not yet able to determine which of
its potential products, if any, are appropriate for internal manufacturing.
The primary factors the Company will consider in making this determination
include the availability and cost of third-party sources, the expertise
required to manufacture the product and the anticipated manufacturing volume.
The Company has no experience, however, in manufacturing pharmaceutical or
other products or in conducting manufacturing testing programs required to
obtain FDA and other regulatory approvals, and there can be no assurance that
the Company will successfully develop such capabilities.
For the Company's potential products which are at an early stage of
development, the Company expects that it will need to improve or modify its
existing process technologies and manufacturing capabilities. The Company
cannot quantify the time or expense that may ultimately be required to improve
or modify its existing process technologies, but it is possible that such time
or expense could be substantial. Moreover, there can be no assurance that the
Company will be able to implement any of these improvements or modifications
successfully.
The production of the Company's compounds is based in part on
technology that the Company believes to be proprietary. The Company may
license this technology to contract manufacturers to enable them to manufacture
compounds for the Company. There can be no assurance that such manufacturers
will abide by any use limitations or confidentiality restrictions in licenses
with the Company. In addition, any such manufacturer may develop process
technology related to the manufacture of the Company's compounds which it owns
independently or jointly with the Company, which would increase the Company's
reliance on such manufacturer or require the Company to obtain a license from
such manufacturer in order to have its products manufactured. There can be no
assurance that such license, if required, would be available on terms
acceptable to the Company, if at all. See "Process Development and
Manufacturing."
ABSENCE OF SALES AND MARKETING EXPERIENCE
The Company has no experience in sales, marketing or distribution. The
Company's strategy is to market and sell certain products directly in the United
States and Canada and, to do so, the Company must develop a substantial
marketing staff and sales force with technical expertise. The Company has
entered into a collaboration agreement with Schering for the development and
commercialization of INTEGRILIN(TM) (antithrombotic injection) on a worldwide
basis. However, specific plans for implementation of this strategy with respect
to the INTEGRILIN(TM) product are under development. The Company has not
established specific plans for implementation of the Company's commercial
strategy with respect to any of its other potential products. Implementation
will depend in part on the market potential of any products the Company develops
as well as on the Company's financial resources. There can be no assurance that
the Company will be able to build such a marketing staff or sales force, that
the cost of establishing such a marketing staff or sales force will not exceed
any product revenues, or that the Company's direct sales and marketing efforts
will be successful. In addition, the Company competes with many other companies
that currently have extensive and well-funded marketing and sales operations.
There can be no assurance that the Company's marketing and sales efforts will
compete successfully against such other companies. The Company intends to rely
on co-promotion, corporate partner or other licensing arrangements for the
marketing and sale of certain of its products and in certain geographic markets.
There can be no assurance that the Company will be successful in establishing
such arrangements, or that its licensees in these arrangements will result in
the successful marketing and sales of the Company's products. See "Business
Strategy" and "Competition."
<PAGE> 26
RISK OF PRODUCT LIABILITY; ADEQUACY OF INSURANCE
The testing, marketing and sale of human pharmaceutical products expose
the Company to significant and unpredictable risks of product liability claims
in the event that the use of its technology or products is alleged to have
resulted in adverse effects. Such risks will exist even with respect to any
products that receive regulatory approval for commercial sale. While the
Company has obtained liability insurance for its products in clinical trials,
there can be no assurance that it will be sufficient to satisfy any liability
that may arise. There can be no assurance that adequate insurance coverage will
be available in the future at acceptable cost, if at all, or that a product
liability claim would not adversely affect the business or financial condition
of the Company. See "Insurance."
VOLATILITY OF STOCK PRICE
The market prices for securities of biopharmaceutical companies,
including the Company, have historically been highly volatile and the market
has from time to time experienced significant price and volume fluctuations
that are unrelated to the operating performance of particular companies.
Factors such as fluctuations in the Company's operating results, announcements
of technological innovations or new therapeutic products by the Company or its
competitors, governmental regulation, clinical trial results, developments in
patent or other proprietary rights, public concern as to the safety of drugs
developed by the Company or others and general market conditions may have a
significant effect on the market price of the Common Stock. The Company's
securities are subject to a high degree of risk and volatility. In the past,
following periods of volatility in the market price for a company's securities,
securities class action litigation has often been instituted. Such litigation
could result in substantial costs and a diversion of management attention and
resources, which could have a material adverse effect on the Company's
business, financial condition or results of operations. Investors should be
aware that other investment opportunities, such as interest-bearing
obligations, may result in a higher yield on investment and be less subject to
fluctuation and risk of loss than an investment in the Company's Common Stock.
ANTITAKEOVER PROVISIONS
The Company has a number of provisions in its charter documents that
could have antitakeover effects. In January 1995, the Company's Board of
Directors adopted a Preferred Share Purchase Rights Plan, commonly referred to
as a "poison pill." In addition, the Company's Restated Certificate of
Incorporation (the "Restated Certificate") does not permit cumulative voting.
The Restated Certificate also includes a "Fair Price Provision" that requires
the approval of the holders of 66 2/3% of the Company's voting stock as a
condition to a merger or certain other business transactions with, or proposed
by, a holder of 15% or more of the Company's voting stock, except where
disinterested Board or stockholder approval is obtained or certain minimum
price criteria and other procedural requirements are met. In addition, the
Board of Directors has the authority, without further action by the
stockholders, to fix the rights and preferences of, and issue shares of,
Preferred Stock. These provisions, and other provisions of the Restated
Certificate, the Company's bylaws and Delaware corporate law, may have the
effect of deterring hostile takeovers or delaying or preventing changes in
control or management of the Company, including transactions in which
stockholders might otherwise receive a premium for their shares over then
current market prices.
<PAGE> 27
EXECUTIVE OFFICERS OF THE COMPANY
The names of COR's executive officers as of March 1, 1997 and certain
information about them is set forth below:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Vaughn M. Kailian 52 President, Chief Executive Officer, and Director
Laura A. Brege 39 Vice President, Finance and Chief Financial Officer
R. Lee Douglas, Jr. 45 Vice President, Corporate Development and Secretary
Charles J. Homcy, M.D. 48 Executive Vice President, Research and Development
Mark D. Perrin 40 Executive Vice President, Commercial Operations
</TABLE>
Vaughn M. Kailian has served as President, Chief Executive Officer and
a director of the Company since March 1990. From 1967 to 1990, Mr. Kailian was
employed by Marion Merrell Dow, Inc., a pharmaceutical company, and its
predecessor companies, in various general management, product development,
marketing and sales positions. Mr. Kailian served as Corporate Vice President
of Global Commercial Development, Marion Merrell Dow, Inc.; President and
General Manager, Merrell Dow USA; Vice President, Marketing and Sales, Merrell
Dow USA; and Vice President, Marketing and Sales of Merrell Dow, Europe, Africa
and the Middle East. Mr. Kailian holds a B.A. from Tufts University.
Laura A. Brege has served as Vice President, Finance and Chief
Financial Officer of the Company since January 1992. During 1991, Mrs. Brege
was Vice President, Finance and Chief Financial Officer of Computer Aided
Service, Inc., a manufacturer and marketer of computer systems. From 1988 to
1990, she was Vice President, Finance and Chief Financial Officer of
Flextronics, Inc., an electronics manufacturer. From 1982 to 1988, Mrs. Brege
held various financial positions at The Cooper Companies, Inc., a multinational
pharmaceutical and medical products company, last serving as Treasurer. She
holds a B.S. from Ohio University and an M.B.A. from the University of Chicago.
R. Lee Douglas, Jr., has served as Vice President, Corporate
Development of the Company since March 1990, Chief Financial Officer from June
1990 to December 1991 and as Treasurer from March 1988 to May 1991. He became
Secretary in May 1991. From the Company's inception until March 1990, Mr.
Douglas served as President and a director of the Company. He holds a B.A.
from the University of North Carolina at Charlotte and two masters degrees from
Harvard University, including an M.B.A.
Charles J. Homcy, M.D. has served as Executive Vice President, Research
and Development of the Company since March 1995. From 1994 until he joined the
Company, Dr. Homcy was President of the Medical Research Division of American
Cyanamid-Lederle Laboratories, a pharmaceutical company. From 1990 until 1994,
Dr. Homcy was Executive Director of the Cardiovascular and Central Nervous
System Research Section at Lederle Laboratories, a pharmaceutical company. From
1991 to 1995, Dr. Homcy also served as an attending physician at The
Presbyterian Hospital, College of Physicians and Surgeons, at Columbia
University in New York. From 1979 to 1990, he was an attending physician at
Massachusetts General Hospital and an Associate Professor of Medicine at Harvard
Medical School. He received his B.A. and M.D. degrees from the Johns Hopkins
University in Baltimore.
Mark D. Perrin joined the Company as Executive Vice President,
Commercial Operations in November 1995. From 1992 until he joined the Company,
Mr. Perrin was Vice President, Marketing and Sales, of Burroughs Wellcome
Company, a pharmaceutical company. From 1979 to 1992, Mr. Perrin held various
sales and marketing positions at Lederle Laboratories/American Cyanamid
Company, a pharmaceutical company, last serving as Vice
<PAGE> 28
President and General Manager of Lederle Pharmaceuticals. He received his B.S.
from Fordham University and a Masters of Management from Northwestern
University.
ITEM 2. PROPERTIES
The Company leases facilities consisting of approximately 100,000
square feet of research laboratory and office space located in South San
Francisco, California. The lease expires in 1999 and contains provisions for
one five-year renewal option. The Company expects that its facilities will be
adequate to serve its needs for the foreseeable future. The Company currently
has no manufacturing facilities.
ITEM 3. LEGAL PROCEEDINGS
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
<PAGE> 29
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
The Company's Common Stock (Nasdaq symbol "CORR") is traded in the
over-the-counter market through the Nasdaq National Market. The following table
presents quarterly information on the price range of the Company's Common Stock,
indicating the high and low sale prices reported by the Nasdaq National Market.
These prices do not include retail markups, markdowns or commissions.
<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1995
First Quarter $13.88 $ 9.50
Second Quarter $19.50 $ 8.13
Third Quarter $13.63 $ 8.63
Fourth Quarter $12.50 $ 7.75
1996
First Quarter $12.50 $ 8.38
Second Quarter $11.88 $ 8.50
Third Quarter $11.50 $ 7.00
Fourth Quarter $11.63 $ 8.75
</TABLE>
As of March 3, 1997 there were approximately 345 holders of record of
the Company's Common Stock. On March 3, 1997, the last sale price reported on
the Nasdaq National Market for the Company's Common Stock was $9.38 per share.
Dividend Policy
The Company has not paid any dividends since its inception and does not
intend to pay any dividends on its Common Stock in the foreseeable future.
Recent Sales of Unregistered Securities
In October 1996, in connection with the extension of the agreement
with Ortho, the Company sold 399,106 shares of common stock at $10.02 per share
for an aggregate purchase price of $4,000,000 in a private placement to JJDC.
See "Item 1. Business -- Relationship with Ortho Pharmaceutical Corporation."
Such issuance was made without registration in reliance upon Section 4(2) of
the Securities Act of 1933, as amended.
<PAGE> 30
ITEM 6. SELECTED FINANCIAL DATA
The selected financial data set forth below are derived from the
audited financial statements of the Company, and are qualified by reference to
such financial statements and the notes related thereto. The Company has not
paid any dividends since its inception. The data set forth below should be read
in conjunction with the financial statements and the notes related thereto.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------------------------------------
1996 1995 1994 1993 1992
STATEMENT OF OPERATIONS DATA:
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Total revenues $ 18,755 $ 31,850 $ 522 $ 2,545 $ 1,667
Expenses:
Research and development 50,791 37,392 40,185 20,932 10,615
Marketing, general
and administrative 7,303 6,029 4,589 4,453 3,577
-------- -------- -------- -------- --------
Total expenses 58,094 43,421 44,774 25,385 14,192
-------- -------- -------- -------- --------
Loss from operations (39,339) (11,571) (44,252) (22,840) (12,525)
Interest income 3,552 4,876 5,188 3,470 2,507
Interest expense (759) (836) (473) (298) (186)
-------- -------- -------- -------- --------
Net loss $(36,546) $ (7,531) $(39,537) $(19,668) $(10,204)
======== ======== ======== ======== ========
Net loss per share $ (1.86) $ (0.39) $ (2.07) $ (1.27) $ (0.86)
======== ======== ======== ======== ========
Shares used in computing
net loss per share 19,636 19,360 19,091 15,480 11,816
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
BALANCE SHEET DATA:
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Cash, cash equivalents
and short-term investments $ 53,134 $ 84,834 $ 94,432 $ 122,197 $ 49,097
Total assets 71,245 100,906 106,367 130,356 53,841
Long-term obligations 3,365 4,574 4,669 3,108 826
Total liabilities 20,803 18,669 19,636 11,192 5,247
Accumulated deficit (128,058) (91,512) (83,981) (44,444) (24,776)
Stockholders' equity 50,442 82,237 86,731 119,164 48,594
</TABLE>
<PAGE> 31
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
This document includes forward-looking statements which
involve risks and uncertainties. Actual results of the Company's activities may
differ significantly from the potential results discussed in such
forward-looking statements. Factors that might cause such differences include,
but are not limited to, those factors previously identified under the caption
"Additional Risk Factors."
Since its inception, COR has focused on the discovery and
development of novel pharmaceutical products for the treatment and prevention of
severe cardiovascular diseases. The Company has not generated any product
revenues to date. The Company has been unprofitable since inception and has
incurred a cumulative net loss of $128,058,000 during the period from inception
to December 31, 1996. The Company expects to continue to incur substantial
losses over the next several years. COR's principal sources of working capital
have been primarily public equity financings and proceeds from collaboration
research and development agreements, as well as private equity financings, grant
revenues, interest income and property and equipment financings.
The Company's most advanced product in clinical development
is INTEGRILIN(TM) (antithrombotic injection). In April 1996, the Company
submitted a New Drug Application ("NDA") to the United States Food and Drug
Administration (the "FDA") seeking approval to market the INTEGRILIN(TM)
product for use in helping to prevent acute cardiac ischemic complications in
patients undergoing percutaneous transluminal coronary angioplasty ("PTCA").
INTEGRILIN(TM) was studied in this setting in IMPACT II, a large, multi-center
Phase III clinical trial. The Company's worldwide partner for INTEGRILIN(TM),
Schering-Plough Corporation ("Schering"), submitted a filing for this
indication in Europe.
In February 1997, the FDA Cardiovascular and Renal Drugs
Advisory Committee (the "Committee") considered the Company's filing in PTCA.
The Committee concluded that the IMPACT II trial of the INTEGRILIN(TM) product
had shown positive results as an adjunct therapy in helping to prevent acute
cardiac ischemic complications in patients undergoing PTCA. However, because the
Committee also decided that the results of the IMPACT II trial alone were not
sufficient to forego the FDA's customary requirement of two positive clinical
trials prior to the approval of a new drug, the Committee recommended against
approval of INTEGRILIN(TM) at this time. The Company has received an action
letter from the FDA regarding the NDA. The not-approvable letter identifies
clinical and technical issues that need to be resolved, including the FDA's
conclusion that IMPACT II was not sufficiently robust as a single study to
support approval. In its letter, the FDA noted that a study in unstable angina
is ongoing and that the data should be provided which may add support to the
findings of the IMPACT II study. The Company has notified the FDA of the
Company's intention to file an amendment addressing the issues cited. An
amendment to the NDA would need to include data from PURSUIT, a Phase III trial
of INTEGRILIN(TM) for use in connection with unstable angina/non-Q wave MI.
Enrollment in the PURSUIT trial was completed in January 1997 and data are
expected to be available later in 1997. There can be no assurance that
INTEGRILIN(TM) or any of the Company's other products in development will
receive marketing approval in any country on a timely basis or at all. If the
Company is unable to demonstrate the safety or efficacy of INTEGRILIN(TM) to the
satisfaction of the FDA or other regulatory authorities, the Company's business,
financial condition and results of operations would be materially adversely
affected.
The Company also has collaboration agreements with Ortho
Pharmaceutical Corporation ("Ortho"), a subsidiary of Johnson & Johnson, and
Kyowa Hakko Kogyo, Co., Ltd. In late 1996, the Company and Ortho extended the
collaboration agreement for one or two years. Collaborative research under a
collaboration agreement with Eli Lilly and Company ("Lilly") ended in April 1996
and in late 1996, the Company and Lilly amended the agreement related to
transfer of certain rights and aspects of the collaboration that continue after
completion of the collaborative research.
<PAGE> 32
RESULTS OF OPERATIONS
Total revenues have fluctuated significantly during the three
years ended December 31, 1996. Total revenues decreased to $18,755,000 in 1996
from $31,850,000 in 1995. Revenues for 1995 included $19,500,000 of a one-time
license fee relating to the Company's agreement with Schering. Contract revenues
in 1996 and 1995 resulted primarily from research and development activities
associated with the agreement with Schering, including safety-related milestone
payments pertaining to the conduct of clinical studies of INTEGRILIN(TM)
(antithrombotic injection) of $9,000,000 and $6,000,000, respectively. Contract
revenues in 1996 also included a milestone payment of $3,000,000 from Schering
in connection with the European regulatory filing of the INTEGRILIN(TM) product.
Contract revenues of $522,000 in 1994 were recognized in connection with the
Company's collaboration with Ortho. Contract revenues fluctuate based on the
timing and performance requirements of the contracts. The Company expects
contract revenues to continue to fluctuate in the future.
Research and development expenses were $50,791,000 in 1996 as
compared to $37,392,000 in 1995 and $40,185,000 in 1994. The increase in 1996 as
compared to 1995 resulted from the continuing activities of the PURSUIT trial,
as well as from higher staffing levels and increased research activities.
Research and development expenses decreased in 1995 as compared to 1994
primarily due to the timing of costs associated with the IMPACT II trial, as
well as, to a lesser extent, additional Phase II clinical trials for the
INTEGRILIN(TM) product. The Company expects that research and development
expenses may increase over the next several years, although the timing of
certain of these expenses may depend on the timing and phase of, and indications
pursued in, clinical trials of potential products, including INTEGRILIN(TM).
Marketing, general and administrative expenses increased by
$1,274,000, or 21%, in 1996 as compared to 1995 and $1,440,000, or 31%, in 1995
as compared to 1994, primarily due to increases in staffing and administrative
expenses related to general corporate activities. The Company expects marketing,
general and administrative costs to continue to increase significantly over the
next several years.
Interest income decreased by $1,324,000 in 1996 as compared to
1995 and by $312,000 in 1995 as compared to 1994, primarily due to decreased
average cash and investment balances in 1996 as compared to 1995 and 1995 as
compared to 1994. Interest expense decreased by $77,000 in 1996 as compared to
1995 and increased by $363,000 in 1995 as compared to 1994 reflecting the change
in the average balance of property and equipment financings outstanding.
The Company incurred a net operating loss of $36,546,000 in
1996 and, accordingly, no provision for federal or state income taxes was
recorded. At December 31, 1996, COR had federal net operating tax loss
carryforwards of approximately $119,000,000. The Company's ability to use its
net operating loss carryforwards may be subject to an annual limitation in
future periods. The Company believes, however, that this limitation will not
have a material impact on its future operating results.
<PAGE> 33
LIQUIDITY AND CAPITAL RESOURCES
The Company had available cash, cash equivalents and
short-term investments of $53,134,000 at December 31, 1996. Cash in excess of
immediate requirements is invested according to the Company's investment policy,
which provides guidelines with regard to liquidity and return and, wherever
possible, seeks to minimize the potential effects of concentration and credit
risk. At December 31, 1996, the Company had approximately $1,100,000 available
under a capital lease line. The Company has funded its operations primarily
through public equity financings and proceeds from collaboration research and
development agreements, as well as private equity financings, grant revenues,
interest income and property and equipment financings.
Net cash used for operating activities and additions to
capital equipment increased to $35,413,000 in 1996 from $12,850,000 in 1995,
reflecting the receipt in 1995 of a $20,000,000 one-time license fee in
connection with the Company's collaboration agreement with Schering. The Company
anticipates that its expenditures for operating activities and additions to
capital equipment will increase in future periods. The timing of these
expenditures may vary from period to period depending on the timing and phase
of, and indications pursued in, clinical trials of potential products, including
INTEGRILIN(TM) (antithrombotic injection). Cash provided by financing activities
of $3,927,000, $1,091,000 and $10,715,000 in 1996, 1995 and 1994, respectively,
resulted primarily from the issuance of common stock pursuant to the
collaboration agreement with Ortho and the net effect of property and equipment
financing.
The Company expects its cash requirements will increase in
future years due to costs related to continuation and expansion of research and
development, including clinical trials, and increased marketing, general and
administrative activities. The Company anticipates that its existing capital
resources and interest earned thereon will enable it to maintain its current and
planned operations at least into 1998. However, the Company's capital
requirements may change depending on numerous factors including, but not limited
to, the progress of the Company's research and development programs, the scope
and results of preclinical and clinical studies, the number and nature of the
indications the Company pursues in clinical studies, the timing of regulatory
approvals, technological advances, determinations as to the commercial potential
of the Company's products and the status of competitive products. In addition,
expenditures may be dependent on the establishment and maintenance of
collaboration relationships with other companies, the availability of financing
and other factors. The Company will need to raise substantial additional funds
in the future, and there can be no assurance that such funds will be available
on favorable terms, if at all. In such event, the Company may need to delay or
curtail its research and development activities to a significant extent.
The Company's business is subject to significant risks
including, but not limited to, the success of its research and development
efforts, obtaining and enforcing patents important to the Company's business,
the lengthy and expensive regulatory approval process and possible competition
from other products. Even if the Company's potential products appear promising
at various stages of development, they may not reach the market for a number of
reasons. Such reasons include, but are not limited to, the possibilities that
the potential products will be found ineffective during clinical trials, fail to
receive necessary regulatory approvals, be difficult to manufacture on a large
scale, be uneconomical to market or be precluded from commercialization by
proprietary rights of third parties. Additional expenses, delays and losses of
opportunities that may arise out of these and other risks could have a material
adverse impact on the Company's financial condition and results of operations.
<PAGE> 34
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
Board of Directors and Stockholders
COR Therapeutics, Inc.
We have audited the accompanying balance sheets of COR
Therapeutics, Inc. as of December 31, 1996 and 1995, and the related statements
of operations, stockholders' equity and cash flows for each of the three years
in the period ended December 31, 1996. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of COR
Therapeutics, Inc. at December 31, 1996 and 1995, and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.
ERNST & YOUNG LLP
Palo Alto, California
January 23, 1997
<PAGE> 35
COR THERAPEUTICS, INC.
BALANCE SHEETS
(in thousands, except share amounts)
ASSETS
<TABLE>
<CAPTION>
December 31,
----------------------------
1996 1995
---------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,615 $ 5,463
Short-term investments 50,519 79,371
Contract receivables 7,644 4,374
Other current assets 3,420 3,621
--------- ------------
Total current assets 64,198 92,829
Property and equipment, net 7,047 8,077
--------- ------------
$ 71,245 $ 100,906
========= ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,398 $ 1,555
Accrued compensation 1,495 1,928
Accrued development costs 7,830 5,759
Deferred revenue 2,900 500
Other accrued liabilities 994 1,986
Long-term debt--current portion 1,157 1,321
Capital lease obligations--current portion 1,664 1,046
--------- ------------
Total current liabilities 17,438 14,095
Long-term debt--noncurrent portion 644 1,801
Capital lease obligations--noncurrent portion 2,721 2,773
Commitments
Stockholders' equity:
Preferred stock, $.001 par value; 5,000,000 shares -- --
authorized
Common stock, $.0001 par value; 40,000,000 shares authorized;
shares issued and outstanding: 20,009,918
and 19,428,749 at December 31, 1996 and 1995
respectively 2 2
Additional paid-in capital 178,680 173,728
Deferred compensation (249) (262)
Unrealized gains on short-term investments 67 281
Accumulated deficit (128,058) (91,512)
--------- ------------
Total stockholders' equity 50,442 82,237
--------- ------------
$ 71,245 $ 100,906
========= ============
</TABLE>
See accompanying notes.
<PAGE> 36
COR THERAPEUTICS, INC.
STATEMENT OF OPERATIONS
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Revenues
License fee $ -- $ 19,500 $ --
Contract revenues 18,755 12,350 522
-------- -------- --------
Total revenues 18,755 31,850 522
Expenses
Research and development 50,791 37,392 40,185
Marketing, general and administrative 7,303 6,029 4,589
-------- -------- --------
Total expenses 58,094 43,421 44,774
-------- -------- --------
Loss from operations (39,339) (11,571) (44,252)
Interest income 3,552 4,876 5,188
Interest expense (759) (836) (473)
-------- -------- --------
Net loss $(36,546) $ (7,531) $(39,537)
======== ======== ========
Net loss per share $ (1.86) $ (0.39) $ (2.07)
======== ======== ========
Shares used in computing
net loss per share 19,636 19,360 19,091
======== ======== ========
</TABLE>
See accompanying notes.
<PAGE> 37
COR THERAPEUTICS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE YEARS ENDED DECEMBER 31, 1996
(in thousands, except share amounts)
<TABLE>
<CAPTION>
Unrealized
Additional Gains (Losses) Total
Common Paid-in Deferred On Short-term Accumulated Stockholders'
Stock Capital Compensation Investments Deficit Equity
---------- ----------- ------------- -------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balances at December 31, 1993 $ 2 $164,086 $(480) $ -- $ (44,444) $ 119,164
Issuance of 533,333 shares of common
stock, net of issuance costs of $23,000 -- 7,977 -- -- -- 7,977
Issuance of 179,039 shares of common
stock upon exercise of stock options and
pursuant to the Employee Stock Purchase Plan -- 669 -- -- -- 669
Deferred compensation related to stock
awards of 12,900 shares of common
stock, net of amortization -- 211 (113) -- -- 98
Amortization of deferred compensation
related to grant of stock options -- -- 240 -- -- 240
Unrealized losses on available-for-sale
short-term investments -- -- -- (1,880) -- (1,880)
Net loss -- -- -- -- (39,537) (39,537)
-- -------- ----- ------- --------- ---------
Balances at December 31, 1994 2 172,943 (353) (1,880) (83,981) 86,731
Issuance of 169,838 shares of common
stock upon exercise of stock options and
pursuant, net, to the Employee Stock Purchase
Plan -- 531 -- -- -- 531
Deferred compensation related to stock
awards of 23,292 shares of common
stock, net of amortization -- 254 (89) -- -- 165
Amortization of deferred compensation
related to grant of stock options -- -- 180 -- -- 180
Unrealized gains on available-for-sale
short-term investments -- -- -- 2,161 -- 2,161
Net loss -- -- -- -- (7,531) (7,531)
-- -------- ----- ------- --------- ---------
Balances at December 31, 1995 2 173,728 (262) 281 (91,512) 82,237
Issuance of 156,876 shares of common
stock, net, upon exercise of stock options and
pursuant to the Employee Stock Purchase Plan -- 682 -- -- -- 682
Deferred compensation related to stock
awards of 25,187 shares of common
stock, net of cancellations and amortization -- 270 13 -- -- 283
Unrealized losses on available-for-sale
short-term investments -- -- -- (214) -- (214)
Issuance of 399,106 shares of common stock -- 4,000 -- -- -- 4,000
Net loss -- -- -- -- (36,546) (36,546)
== ======== ===== ======= ========= =========
Balances at December 31, 1996 $ 2 $178,680 $(249) $ 67 $(128,058) $ 50,442
== ======== ===== ======= ========= =========
</TABLE>
See accompanying notes.
<PAGE> 38
COR THERAPEUTICS, INC.
STATEMENT OF CASH FLOWS
Increase (decrease) in cash and cash equivalents
(in thousands)
<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Cash flows provided by (used in) operating activities:
Net loss $ (36,546) $ (7,531) $ (39,537)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization 3,593 3,546 2,119
Amortization of deferred compensation 283 345 338
Changes in assets and liabilities:
Contract receivables (3,270) (4,374) --
Other current assets 201 (601) (1,168)
Other assets -- -- 13
Accounts payable (157) 188 726
Accrued compensation (433) 716 290
Accrued development costs 2,071 (3,155) 5,173
Deferred revenue 2,400 500 --
Other accrued liabilities (992) 224 186
--------- --------- ---------
Total adjustments 3,696 (2,611) 7,677
--------- --------- ---------
Net cash used in operating (32,850) (10,142) (31,860)
activities
--------- --------- ---------
Cash flows provided by (used in) investing activities:
Purchases of short-term investments (39,725) (81,594) (55,504)
Sales of short-term investments 48,963 70,178 47,675
Maturities of short-term investments 19,400 26,000 20,000
Additions to property and equipment (2,563) (2,708) (4,740)
--------- --------- ---------
Net cash provided by investing 26,075 11,876 7,431
activities
--------- --------- ---------
Cash flows provided by (used in) financing activities:
Proceeds from long-term debt -- -- 2,239
Principal payments on long-term debt (1,321) (1,199) (946)
Proceeds from capital lease obligations 1,854 2,463 1,134
Principal payments under capital lease (1,288) (704) (358)
obligations
Issuance of common stock 4,682 531 8,646
--------- --------- ---------
Net cash provided by financing 3,927 1,091 10,715
activities
--------- --------- ---------
Net increase (decrease) in cash and cash (2,848) 2,825 (13,714)
equivalents
Cash and cash equivalents at beginning of the 5,463 2,638 16,352
period
--------- --------- ---------
Cash and cash equivalents at end of the period $ 2,615 $ 5,463 $ 2,638
========= ========= =========
Supplemental schedule of non-cash financing activities:
Cash paid during the year for interest $ 759 $ 836 $ 4 73
========= ========= =========
</TABLE>
See accompanying notes.
<PAGE> 39
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
COR Therapeutics, Inc. (the "Company") was incorporated in
Delaware on February 4, 1988. The Company was organized to engage in the
discovery, development and commercialization of novel pharmaceutical products
for the treatment and prevention of severe cardiovascular diseases.
Cash, investments and credit risk
Cash and cash equivalents consist of cash held in U.S. banks,
time deposits and other highly liquid investments with maturities of 90 days or
less. Cash equivalents are readily convertible into cash and have insignificant
interest rate risk. The Company's investment policy stipulates that a
diversified portfolio be maintained and invested in a manner appropriate for the
Company's primary business operations. The policy defines investment objectives
to provide optimal investment return within constraints to optimize safety and
liquidity.
Securities available-for-sale
Management determines the appropriate classification of debt
securities at the time of purchase and reevaluates such designation as of each
balance sheet date. Debt securities have been classified as available-for-sale.
Available-for-sale securities are carried at fair value, with the unrealized
gains and losses reported in a separate component of stockholders' equity. The
amortized cost of debt securities in this category is adjusted for amortization
of premiums and accretion of discounts to maturity. Such amortization is
included in interest income. Realized gains and losses and declines in value
judged to be other than temporary on available-for-sale securities are included
in interest income. The cost of securities sold is based on the specific
identification method. Interest and dividends on securities classified as
available for sale are included in interest income.
Property and equipment
Property and equipment is stated at cost and depreciated over
the estimated useful lives of the assets, generally three to four years, using
the straight-line method. Assets under capitalized leases are amortized over the
shorter of the lease term or life of the asset. Property and equipment consists
of the following:
<TABLE>
<CAPTION>
December 31,
------------------------
(in thousands) 1996 1995
- -------------- -------- --------
<S> <C> <C>
Machinery and equipment $ 10,379 $ 8,699
Office furniture and fixtures 738 706
Leasehold improvements 9,753 8,902
-------- --------
20,870 18,307
Less accumulated depreciation and amortization (13,823) (10,230)
-------- --------
Property and equipment, net $ 7,047 $ 8,077
======== ========
</TABLE>
<PAGE> 40
Revenues
Revenues consist of license fees and contract revenues,
including grants. Grant and contract revenues are recorded as earned based on
the performance requirements of the contracts, while related costs are expensed
as incurred. Payments received in advance are recorded as deferred revenue until
earned. For the years ended December 31, 1996, 1995 and 1994, grant-related
revenues were approximately $85,000, $100,000 and $22,000, respectively, and
grant-related costs, which are included in research and development expenses,
were approximately $174,000, $165,000 and $43,000, respectively.
Net loss per share
Net loss per share is computed using the weighted average
number of shares of common stock outstanding. Common equivalent shares from
stock options are excluded from the computation as their effect is antidilutive.
Use of estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
Accounting for stock-based compensation
The Company has elected to follow Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related
Interpretations in accounting for its employee stock options because, as
discussed in Note 6 below, the alternative fair value accounting provided for
under Financial Accounting Standards Board Statement No. 123, "Accounting for
Stock-Based Compensation," requires use of option valuation models that were not
developed for use in valuing employee stock options. Under APB 25, because the
exercise price of the Company's stock options equals the market price of the
underlying stock on the date of grant, no compensation expense is recognized.
Reclassification
The Company has reclassified certain prior year balances to
conform to current year presentation.
2. COLLABORATION AGREEMENTS
Collaboration agreement with Schering-Plough Corporation
In April 1995, the Company entered into a collaboration
agreement with Schering Corporation and Schering-Plough Corporation
(collectively, "Schering") to develop and commercialize INTEGRILIN(TM)
(antithrombotic injection) on a worldwide basis. Under the terms of the
agreement, COR received a one-time license fee of $20,000,000 in 1995 and will
receive approximately $100,000,000 in milestone payments if specified
development goals are achieved. The Company recorded $3,000,000 of such
milestone payments were in 1996. In addition, contract revenues in 1996 and 1995
included safety-related milestone payments pertaining to the conduct of clinical
studies of the INTEGRILIN(TM) product of $9,000,000 and $6,000,000,
respectively. Schering participates in and shares the costs of developing
INTEGRILIN(TM). Both parties have the right to co-promote and share profits, if
any, in the United States and Canada. Schering has the right to launch
INTEGRILIN(TM) in Europe and would pay the Company royalties for a specified
initial period, after which the Company would have the right to co-promote and
share profits, if any. Schering also will assist the Company in developing,
training and providing experience for a United States cardiovascular sales
force. Under the terms of the agreement, both parties have certain rights to
terminate. Until 30 days after certain key data are received from the PURSUIT
trial, Schering may elect to terminate the agreement. In the event of such
termination: (i) COR would reacquire all rights to all INTEGRILIN(TM) products
subject to a royalty to Schering, (ii) Schering would be relieved of its
obligation to pay development costs incurred after June 30, 1997 except for
certain specified development costs where Schering will have the continuing
obligation to pay ongoing costs incurred by COR (subject to the obligation of
COR to repay certain of such costs under certain circumstances), and (iii)
Schering could exercise an option to obtain certain rights to a specified COR
<PAGE> 41
2. COLLABORATION AGREEMENTS (CONTINUED)
research program. COR recognized 18,635,000 in contract revenue in 1996
($11,750,000 in 1995) under this agreement with Schering, representing 99% and
95% of total contract revenues in 1996 and 1995, respectively. If these revenues
were discontinued, the Company's ability to pursue the development or
commercialization of INTEGRILIN(TM) (antithrombotic injection) could be severely
limited. Expenses incurred under the agreement, including Company-sponsored
development costs, were approximately $29,950,000 in 1996 ($11,400,000 in 1995).
Collaboration agreement with Ortho Pharmaceutical Corporation
In December 1993, the Company and Ortho Pharmaceutical
Corporation ("Ortho"), a subsidiary of Johnson & Johnson, entered into a
collaboration agreement focusing on the joint development and commercialization
of novel pharmaceuticals that may result from certain collaboration research.
The Company and Ortho each provided a significant level of specified internal
resources to the collaboration research over the initial three-year research
term. In late 1996, Ortho exercised its option to extend the research term for
one or two years.
If products result from the research, Ortho will make
development milestone payments to the Company. Both the Company and Ortho may
participate in development of products under the collaboration, share equally in
the development costs, participate in the commercialization of co-developed
products and share equally in worldwide profits or losses from such co-developed
products. If either party decides not to participate in the development of a
product under the collaboration, that party would receive royalties based on
product sales.
In connection with the collaboration with Ortho, in January
1994, the Company sold to Johnson & Johnson Development Corporation ("JJDC"), a
subsidiary of Johnson & Johnson, 533,333 shares of common stock at $15.00 per
share for an aggregate purchase price of $8,000,000 in a private placement. In
October 1996, Ortho exercised its option to extend the term of the agreement,
and pursuant to the terms of the original agreement, the Company sold JJDC an
additional 399,106 shares of common stock at $10.02 per share for an aggregate
purchase price of $4,000,000, also in a private placement. In connection with
the extension of the agreement, Ortho paid the Company $2,400,000 in 1996 for
research to be performed during the remaining term of the contract.
The Company recognized $35,000, $500,000 and $500,000 in
revenues under this agreement during the years ended December 31, 1996, 1995 and
1994, respectively, representing approximately 1%, 2% and 96% of total revenue
in those years.
Collaboration agreement with Kyowa Hakko Kogyo Co., Ltd.
In 1992, the Company entered into a collaboration agreement
with Kyowa Hakko Kogyo Co., Ltd. ("Kyowa Hakko"), a Japanese pharmaceutical
company. During the three-year research phase of the agreement, the Company and
Kyowa Hakko collaborated on the discovery and development of potential leads and
committed significant internal resources to all phases of research. The
companies have also agreed to share specific future development and
commercialization rights and responsibilities. In late 1995, this agreement was
extended for another two years.
Collaboration agreement with Eli Lilly and Company
Collaborative research under a collaboration agreement with
Eli Lilly and Company ("Lilly") ended by the terms of the agreement in April
1996. Under the terms of a November 1996 amendment, the Company now has the
exclusive right to develop and commercialize certain compounds, subject to a
royalty to Lilly. In addition, under the terms of the amendment, the Company has
the exclusive right to research, develop and commercialize certain potential
oral compounds, also subject to a royalty to Lilly. Under the original agreement
and the amendment between the parties, COR and Lilly have shared rights with
respect to all other compounds which were the subject to the collaborative
research.
3. FINANCIAL INSTRUMENTS
The following methods and assumptions were used by the Company
in estimating its fair value disclosures for financial instruments:
Cash and cash equivalents: The carrying amount reported in the
balance sheet for cash and cash equivalents approximates its fair value.
Short-term investments: Available-for-sale securities consist
of marketable debt securities and are carried at fair value, with the unrealized
gains and losses reported in a separate component of stockholders' equity. The
fair values are based on quoted market prices.
<PAGE> 42
3. FINANCIAL INSTRUMENTS (CONTINUED)
At December 31, 1996, available-for-sale securities, which include cash
equivalents with an amortized cost and estimated fair value of $2,053,000, were
as follows:
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Estimated
(in thousands) Cost Gains Losses Fair Value
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government Securities $29,411 $ 63 $(12) $29,462
Corporate Debt Securities 23,094 38 (22) 23,110
------- ---- ---- -------
$52,505 $101 $(34) $52,572
======= ==== ==== =======
</TABLE>
During the year ended December 31, 1996, the Company sold
available-for-sale investments with a fair value of $48,963,000, resulting in
gross realized gains of $38,000 and gross realized losses of $232,000.
The amortized cost and estimated fair value of available-for-sale
securities held as available for sale at December 31, 1996, by contractual
maturity, were as follows:
<TABLE>
<CAPTION>
Amortized Estimated
(in thousands) Cost Fair Value
- ----------------------------------------------------------------
<S> <C> <C>
Due in one year or less $15,171 $15,196
Due after one year through three years 37,334 37,376
------- -------
$52,505 $52,572
======= =======
</TABLE>
At December 31, 1995, available-for-sale securities, which include cash
equivalents with an amortized cost and estimated fair value of $5,987,000, were
as follows:
<TABLE>
<CAPTION>
Amortized Unrealized Unrealized Estimated
(in thousands) Cost Gains Losses Fair Value
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Government Securities $36,299 $324 $ -- $36,623
Corporate Debt Securities 48,778 121 (164) 48,735
------- ---- ----- -------
$85,077 $445 $(164) $85,358
======= ==== ===== =======
</TABLE>
During the year ended December 31, 1995, the Company sold
available-for-sale investments with a fair value of $70,178,000, resulting in
gross realized gains of $283,000 and gross realized losses of $584,000.
Long and short-term debt: The carrying amounts of the Company's
borrowings under its secured debt agreements approximate their fair value. The
fair values of the Company's debt are estimated using discounted cash flow
analysis, based on the Company's current incremental borrowing rates for similar
types of borrowing arrangements.
4. LONG-TERM DEBT
Long-term debt consists of various secured obligations relating to the
purchase of property and equipment. Such notes are secured by the underlying
property and equipment and bear interest at approximately 10.5% to 13.5% per
annum and are payable in monthly installments over 48 months.
At December 31, 1996, the aggregate long-term debt maturities were
$1,157,000 and $644,000 in 1997 and 1998, respectively.
<PAGE> 43
5. LEASE OBLIGATIONS
The Company leases office and laboratory facilities and equipment. Rent
expense for operating leases was approximately $1,212,000 in 1996, $1,012,000 in
1995, and $859,000 in 1994. Future minimum lease payments under noncancelable
leases are as follows:
<TABLE>
<CAPTION>
Capital Operating
Leases Leases
------- ---------
(in thousands)
<S> <C> <C>
1997 $ 2,062 $ 1,022
1998 1,668 1,037
1999 1,068 864
2000 322 --
------- ---------
Total minimum lease payments 5,120 $ 2,923
---------
Less amount representing interest (735)
-------
Present value of future lease payments 4,385
Less current portion (1,664)
--------
Noncurrent portion of capital lease obligations $ 2,721
========
</TABLE>
At December 31, 1996, approximately $1,100,000 was available to the
Company under equipment financing lease lines which expire in July 1997.
At December 31, 1996 and 1995, the aggregate cost of property and
equipment under capital leases totaled $5,035,000 and $5,855,000, with
accumulated amortization of $2,777,000 and $2,437,000, respectively.
6. STOCKHOLDERS' EQUITY
Stock option plans
During 1988, the Company adopted an Employee Stock Option Plan and a
Consultant Stock Option Plan (the "1988 Plans"). In 1991, these Plans were
terminated and the Board of Directors adopted the 1991 Equity Incentive Plan
(the "1991 Plan"). Under these Plans, incentive and non-qualified options were
granted to employees and consultants at exercise prices not less than the fair
market value of the Company's common stock on the date of grant. All options
granted under these Plans become exercisable pursuant to the applicable terms of
the grant.
In 1991, the Board of Directors adopted the 1991 Equity Incentive Plan
under which stock options and stock awards may be granted to employees or
consultants of the Company. Options generally vest over 60 months and are
exercisable to the extent vested. As of December 31, 1996, options to purchase
approximately 2,152,720 shares were vested and exercisable, aggregating
approximately $18,199,000 (options to purchase 923,000 shares aggregating
approximately $11,805,000 in 1995) under these Plans.
<PAGE> 44
6. STOCKHOLDERS' EQUITY (CONTINUED)
In 1994, the Board of Directors adopted the 1994 Non-Employee
Directors' Stock Option Plan (the "Directors' Plan"), which provides for the
non-discretionary grant of non-qualified options to those members of the Board
of Directors who are neither employees nor consultants to the Company. An
aggregate of 200,000 shares of common stock was authorized for issuance under
the Directors' Plan. Options granted under the Directors' Plan vest over a
period of 60 months. At December 31, 1996, 58,749 shares were vested and
exercisable (33,749 shares at December 31, 1995) and 75,000 remained available
for future grant under the Directors' Plan. No options were granted under this
Plan in 1996.
Activity under these plans is as follows:
<TABLE>
<CAPTION>
Options Outstanding
Options ----------------------------------------------------------------
Available Weighted
For Number of Average Price Per
Grant Shares Exercise Price Share Aggregate
--------- --------- -------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance at 12/31/93 376,105 2,296,631 $ 7.01 $ .10-$16.25 $16,136,000
Stock awards (12,900) -- -- -- --
Additional shares authorized 800,000 -- -- -- --
Options granted (492,200) 492,200 13.07 9.75- 15.88 6,613,000
Options forfeited 42,384 (56,510) 10.36 .30- 15.00 (593,000)
Options exercised -- (128,892) 1.33 .10- 13.25 (175,000)
--------- --------- ------ ------------ -----------
Balance at 12/31/94 713,389 2,603,429 8.39 .10- 16.25 21,981,000
Stock awards (23,292) -- -- -- --
Additional shares authorized 500,000 -- -- -- --
Options granted (993,500) 993,500 12.27 9.19- 15.38 12,190,000
Options forfeited 53,275 (73,226) 10.28 .30- 15.88 (753,000)
Options exercised -- (110,612) 0.35 .10- 9.75 (41,000)
--------- --------- ------ ------------ -----------
Balance at 12/31/95 249,872 3,413,091 9.68 .10- 16.25 33,377,000
Stock awards (25,678) -- -- -- --
Additional shares authorized 1,500,000 -- -- -- --
Options granted (857,000) 857,000 9.22 8.56- 11.38 7,901,000
Options forfeited 303,856 (303,856) 13.28 5.25- 15.88 (4,072,000)
Options exercised -- (77,600) 0.41 .10- 8.25 (37,000)
--------- --------- ------ ------------ -----------
Balance at 12/31/96 1,171,050 3,888,635 $ 9.45 $ .10-$16.25 $37,169,000
========= ========= ====== ============ ===========
</TABLE>
The Company recorded $270,000, $254,000, and $211,000 in deferred
compensation for stock awards of 25,678, 23,292 and 12,900 shares of common
stock for years ended December 31, 1996, 1995 and 1994, respectively. The
weighted average fair market value of these stock awards on the date of grant
was $8.56 in 1996 and $12.38 in 1995.
Stock purchase plan
In 1991, the Board of Directors adopted the 1991 Employee Stock
Purchase Plan (the "SPP") providing for the issuance of up to 25,000 shares of
common stock pursuant to the SPP. Essentially all employees may participate and
contribute up to 15% of compensation to purchase common stock at 85% of its fair
market value at certain specified dates. During 1996, 1995 and 1993, an
additional 300,000, 200,000 and 75,000 shares of common stock were authorized,
respectively, for issuance pursuant to the SPP. During the three years ended
December 31, 1996, 1995 and 1994, 80,276 shares, 59,226 shares, and 50,147
shares of common stock, respectively, were issued pursuant to the SPP, at prices
ranging between $7.28 and $12.75.
<PAGE> 45
6. STOCKHOLDERS' EQUITY (CONTINUED)
Pro forma valuation of options
The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employee" (APB 25) and related
Interpretations in accounting for its employee stock options (see Note 1). Under
APB 25, because the exercise price of the Company's stock options equals the
market price of the underlying stock on the date of grant, no compensation
expense is recognized.
Pro forma information regarding net loss and loss per share is required
by Statement 123, and has been determined as if the Company had accounted for
its employee stock options granted after December 31, 1994 under the fair value
method of that Statement. The fair value of these options was estimated at the
date of grant using the Black-Scholes option pricing model with the following
weighted-average assumptions for 1996 and 1995, respectively; risk-free interest
rates of 6.63% and 6.06%; no dividends paid; volatility factors of the expected
market price of the Company's common stock of 0.79 and 0.73; and a
weighted-average expected life of the option of 5 years. The effects of applying
FAS 123 for the recognition of compensation expense and provision of pro forma
disclosures in 1996 and 1995 are not likely to be representative of the effects
on reported and pro forma net income in future years.
The Black-Scholes option valuation model was developed for use in
estimating the fair value of traded options which have no vesting restrictions
and are fully transferable. In addition, option valuation models require the
input of highly subjective assumptions including the expected stock price
volatility. Because the Company's employee stock options have characteristics
significantly different from those of traded options, and because changes in the
subjective input assumptions can materially affect the fair value estimate, in
management's opinion, the existing model does not necessarily provide a
reliable single measure of the fair value of its employee stock options.
For purposes of pro forma disclosures, the estimated fair value of the
options is amortized to expense over the option's vesting period. The Company's
pro forma information follows (in thousands except for the earnings per share
information):
<TABLE>
<CAPTION>
1996 1995
-------- --------
<S> <C> <C>
Pro forma net loss $(40,967) $(10,585)
Pro forma loss per share $ (2.09) $ (0.55)
</TABLE>
The following table summarizes information about stock options
outstanding at December 31, 1996:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------------------------- -------------------------------------
Weighted
Number of Options Average Weighted Number of Options Weighted
Range of Outstanding as of Remaining Average Exercisable as of Average
Exercise Prices December 31, 1996 Contractual Life Exercise Price December 31, 1996 Exercise Price
- ---------------- ----------------- ---------------- -------------- ----------------- --------------
<S> <C> <C> <C> <C> <C>
$00.00 -- $ 5.25 746,216 3.06 $ 0.68 748,216 $ 0.68
$ 8.56 -- $ 9.91 819,768 8.92 9.06 125,260 9.38
$10.00 -- $12.00 1,056,868 7.36 11.26 559,891 11.49
$12.06 -- $14.50 815,584 7.53 12.82 404,683 13.00
$14.75 -- $16.25 450,200 6.47 15.28 316,670 15.24
--------- ---- ------ --------- ------
3,888,635 6.82 $ 9.45 2,152,720 $ 8.46
========= ==== ====== ========= ======
</TABLE>
<PAGE> 46
6. STOCKHOLDERS' EQUITY (CONTINUED)
Common shares reserved for future issuance
As of December 31, 1996, 5,151,633 common shares were reserved for
future issuance under the option and stock purchase plans.
7. INCOME TAXES
At December 31, 1996, the Company had available net operating loss
carryforwards for federal income tax purposes of approximately $119,000,000. The
tax loss carryforwards, if not utilized to offset taxable income in future
periods, expire between the years 2003 and 2011.
Significant components of the Company's deferred tax assets and
liabilities for federal income taxes as of December 31, 1996, 1995, and 1994,
were as follows:
Deferred tax assets:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Net operating loss carryforwards $ 40,800,000 $ 30,200,000 $ 28,000,000
Capitalized research and development 6,900,000 5,600,000 4,900,000
Research and development credits
(expiring between 2003 and 2011) 5,700,000 4,600,000 4,200,000
Other, net 4,500,000 4,400,000 2,300,000
------------ ------------ ------------
Net deferred tax assets 57,900,000 44,800,000 39,400,000
Valuation allowance for deferred tax assets (57,900,000) (44,800,000) (39,400,000)
------------ ------------ ------------
Deferred tax assets $ -- $ -- $ --
============ ============ ============
</TABLE>
The valuation allowance for deferred tax assets increased by
$20,850,000 during the year ended December 31, 1994. Approximately $1,700,000 of
the valuation allowance for deferred tax assets relates to benefits of stock
option deductions which, when recognized, will be allocated directly to
contributed capital.
Because of "change of ownership" provisions of the Tax Reform Act of
1986, the Company's net operating loss and credit carryforwards may be subject
to an annual limitation regarding utilization against taxable income in future
periods.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable
<PAGE> 47
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
IDENTIFICATION OF DIRECTORS
The information required by this Item concerning the Company's directors
is incorporated by reference from the sections captioned "Proposal 1: Election
of Directors" contained in the Company's Definitive Proxy Statement related to
the Annual Meeting of Stockholders to be held May 20, 1997 (the "Proxy
Statement"), to be filed by the Company with the Securities and Exchange
Commission.
IDENTIFICATION OF EXECUTIVE OFFICERS
The information required by this Item concerning the Company's
executive officers is set forth in Part I of this Report.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
The information required by this Item is incorporated by reference from
the section captioned "Compliance with Section 16(a) of the Securities Exchange
Act of 1934" contained in the Proxy Statement.
ITEM 11. EXECUTIVE COMPENSATION
The information required by this Item is incorporated by reference from
the section captioned "Executive Compensation" contained in the Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated by reference from
the section captioned "Security Ownership of Certain Beneficial Owners and
Management" contained in the Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this Item is incorporated by reference from
the sections captioned "Certain Transactions" and "Executive Compensation"
contained in the Proxy Statement.
<PAGE> 48
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page in
Form 10-K
---------
<S> <C>
Report of Ernst & Young LLP, Independent Auditors 34
Balance Sheets at December 31, 1996 and 1995 35
Statement of Operations for the years ended
December 31, 1996, 1995 and 1994 36
Statement of Stockholders' Equity for the years ended
December 31, 1996, 1995 and 1994 37
Statement of Cash Flows for the years ended
December 31, 1996, 1995 and 1994 38
Notes to Financial Statements 39
</TABLE>
All schedules are omitted because they are not applicable, or not
required, or because the required information is included in the
financial statements or notes thereto.
2. EXHIBITS
<TABLE>
<CAPTION>
Number
------
<S> <C> <C>
3.1 (14) Restated Certificate of Incorporation of the
Registrant.
3.2 (2) By-laws of the Registrant.
4.1 Reference is made to Exhibits 3.1 and 3.2.
4.2 (2) Information, Registration Rights and Right of
First Refusal Agreement among the Registrant and
other parties named therein, as amended as of May
15, 1991.
4.3 (2) Side by Side Agreement among the Registrant and
the other parties named therein.
4.4 (11) Registrant's Preferred Share Purchase Rights
Agreement, dated as of January 23, 1995, between
the Registrant and Chemical Trust Company of
California.
*10.1 (2) Form of Indemnification Agreement between the
Registrant and its directors, executive officers
and officers.
*10.2 (2) Registrant's 1988 Employee Stock Option Plan and
related agreements.
*10.3 (2) Registrant's 1988 Consultant Stock Option Plan
and related agreements.
++10.4 (2) License Agreement, dated February 3, 1989,
between the Registrant and the Regents of the
University of California.
++10.5 (2) Exclusive License Agreement and Bailment between
the Registrant and the Regents of the University
of California, dated May 14, 1991.
++10.6 (2) License Agreement, dated November 1, 1989,
between the Registrant and the Oklahoma Medical
Research Foundation.
++10.7 (2) Research, Option and License Agreement between
the Registrant and Eli Lilly and Company.
10.8 (2) Lease Agreement, dated September 23, 1988, as
amended August 30, 1989 and Lease Rider, dated
September 23, 1988, between the Registrant and NC
Land Associates Limited Partnership.
</TABLE>
<PAGE> 49
<TABLE>
<CAPTION>
Number
------
<S> <C> <C>
10.9 (2) Form of Patent, Copyright and Nondisclosure
Agreement entered into by the Registrant with
each of its officers and certain employees.
10.10 (2) Form of Consultants and Advisors Proprietary
Information and Inventions Agreement entered into
by the Registrant with certain scientific
consultants to the Registrant.
10.11 (1) Form of Scientific Advisor Agreement between the
Registrant and certain scientific advisors to the
Registrant.
10.12 (2) Form of Materials Transfer agreement used by the
Registrant in connection with collaboration
research projects.
10.13 (2) Form of Mutual Confidentiality Agreement used by
the Registrant in connection with potential
business partners.
10.14 (2) Form of Consulting Agreement used by the
Registrant with certain consultants.
10.15 (2) Form of Consulting Agreement for Clinical
Advisors used by the Registrant with certain
clinical advisors to the Registrant.
10.16 (2) Form of Visitor Non-Disclosure Agreement used by
the Registrant and certain visitors to the
Registrant.
*10.17 (1) Forms of option agreements used under the
Registrant's 1991 Equity Incentive Plan.
*10.18 (3) Form of offering document used under the
Registrant's 1991 Employee Stock Purchase Plan.
*10.19 (9) Description of 1993 Incentive Pay Program.
*10.20 (7) Consulting Agreement, dated January 1, 1993,
between the Registrant and Lloyd Hollingsworth
Smith, Jr.
++10.21 (7) Collaboration Research Agreement between the
Registrant and Kyowa Hakko Kogyo, Co., Ltd.
++10.22 (8) Collaboration Agreement between Eli Lilly and
Company and the Registrant, dated May 28, 1993.
++10.23 (6) Exclusive License between the Registrant and the
Regents of the University of California, dated
June 10, 1992.
++10.24 (9) Collaboration Agreement between Ortho
Pharmaceutical Corporation and the Registrant,
dated December 21, 1993.
++10.25 (12) Clinical Trial Research Agreement between the
Registrant and The Johns Hopkins University.
*10.26 Registrant's 1994 Non-employee Directors' Stock
Option Plan.
10.27 (10) Put and Stock Purchase Agreement between the
Registrant and Johnson & Johnson Development
Corporation, dated December 21, 1993.
10.28 (12) Consulting Agreement, dated March 17, 1988, as
amended effective September 28, 1994 between the
Registrant and Shaun R. Coughlin.
*10.29 Registrant's 1991 Stock Purchase Plan, as
amended.
*10.30 Registrant's 1991 Equity Incentive Plan, as
amended.
*10.31 (12)* Description of Registrant's 1994 Incentive Pay
Plan.
++10.32 (13) Collaboration Agreement between Schering-Plough
Corporation and the Registrant, dated April 10,
1995.
</TABLE>
17
<PAGE> 50
<TABLE>
<CAPTION>
Number
------
<S> <C> <C>
*10.33 (14) Description of Registrant's 1995 Incentive Pay
Plan.
++10.34 (14) Amendment No. 4 to Collaboration Agreement
between the Registrant and Kyowa Hakko Kogyo,
Co., Ltd., dated November 10, 1995.
+10.35 Amendment No. 1 to Collaboration Agreement
between Ortho Pharmaceutical Corporation and the
Registrant, dated September 27, 1996.
+10.36 Amendment No. 1 to Collaboration Agreement
between Eli Lilly and Company and the Registrant,
dated November 1996.
+10.37 (i) Amendment No. 1 to Collaboration Agreement
between Kyowa Hakko Kogyo, Co., Ltd., dated
May 9, 1994.
+10.37 (ii) Amendment No. 2 to Collaboration Agreement
between Kyowa Hakko Kogyo, Co., Ltd., dated
July 13, 1995.
+10.37 (iii) Amendment No. 3 to Collaboration Agreement
between Kyowa Hakko Kogyo, Co., Ltd., dated
August 1, 1995.
+10.37 (iv) Amendment No. 5 to Collaboration Agreement
between Kyowa Hakko Kogyo, Co., Ltd., dated
December 17, 1995.
*10.38 Description of Registrant's 1996 Incentive Pay
Plan.
23.1 Consent of Ernst & Young LLP, Independent
Auditors.
24.1 Power of Attorney, Reference is made to the
signature page.
27.1 Financial Data Schedule.
</TABLE>
- --------------------------------------------------------------------------------
* Indicates management contracts or compensatory plans or arrangements
filed pursuant to Item 601(b)(10) of Regulation S-K.
++ Confidential treatment granted.
+ Confidential treatment requested.
(1) Filed as an exhibit to the Registrant's Registration Statement on Form
S-8 (Reg. No. 33-42912) and incorporated herein by reference.
(2) Filed as an exhibit to the Registrant's Registration Statement on Form
S-1 (Reg. No. 33-40627) or amendments thereto and incorporated herein
by reference.
(3) Filed as an exhibit to the Registrant's Registration Statement on Form
S-1 (Reg. No. 33-43181) or amendments thereto and incorporated herein
by reference.
(4) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the period ended September 30, 1991 and incorporated herein by
reference.
(5) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for
the period ended December 31, 1991 and incorporated herein by
reference.
(6) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the period ended June 30, 1992 and incorporated herein by
reference.
(7) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for
the period ended December 31, 1992 and incorporated by reference
herein.
(8) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the period ended June 30, 1993 and incorporated by reference
herein.
(9) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for
the period ended December 31, 1993 and incorporated by reference
herein.
(10) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1994 and incorporated by reference
herein.
(11) Filed as part of a report on Form 8-K dated January 23, 1995.
(12) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for
the period ended December 31, 1994 and incorporated by reference
herein.
(13) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the period ended June 30, 1995 and incorporated by reference
herein.
(14) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for
the period ended December 31, 1995 and incorporated by reference
herein.
18
<PAGE> 51
(b) REPORTS ON FORM 8-K
There were no reports on Form 8-K filed for the quarter ended
December 31, 1996.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of South San
Francisco, County of San Mateo, State of California, on the 28th day of March,
1997.
COR THERAPEUTICS, INC.
By /s/ PETER S. RODDY
-------------------------------
Peter S. Roddy
Director, Finance and Controller
(Principal Accounting Officer)
POWER OF ATTORNEY
KNOW BY ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Peter S. Roddy and Laura A. Brege, and
each of them, as his true and lawful attorneys-in-fact and agents, with full
power of substitution for him, and in his name in any and all capacities, to
sign any and all amendments to this report, and to file the same, with exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite and necessary to be done therewith, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorneys-in-fact and agents, and any of them, or his substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ VAUGHN M. KAILIAN
- ---------------------
Vaughn M. Kailian President, Chief Executive Officer
and Director (Principal Executive Officer) March 28, 1997
/s/ LAURA A. BREGE
- ---------------------
Laura A. Brege Vice President, Finance and Chief Financial
Officer (Principal Financial Officer) March 28, 1997
/s/ PETER S. RODDY
- ---------------------
Peter S. Roddy Director, Finance and Controller
(Principal Accounting Officer) March 28, 1997
</TABLE>
19
<PAGE> 52
POWER OF ATTORNEY (CONTINUED)
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ SHAUN R. COUGHLIN
- ----------------------------------
Shaun R. Coughlin Director March 28, 1997
/s/ JAMES T. DOLUISIO
- ----------------------------------
James T. Doluisio Director March 28, 1997
/s/ JERRY T. JACKSON
- ----------------------------------
Jerry T. Jackson Director March 28, 1997
/s/ ERNEST MARIO
- ----------------------------------
Ernest Mario Director March 28, 1997
/s/ ROBERT R. MOMSEN
- ----------------------------------
Robert R. Momsen Director March 28, 1997
/s/ LLOYD HOLLINGSWORTH SMITH, JR.
- ----------------------------------
Lloyd Hollingsworth Smith, Jr. Director March 28, 1997
/s/ WILLIAM H. YOUNGER, JR.
- ----------------------------------
William H. Younger, Jr. Director March 28, 1997
</TABLE>
20
<PAGE> 53
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number
------
<S> <C> <C>
3.1 (14) Restated Certificate of Incorporation of the
Registrant.
3.2 (2) By-laws of the Registrant.
4.1 Reference is made to Exhibits 3.1 and 3.2.
4.2 (2) Information, Registration Rights and Right of
First Refusal Agreement among the Registrant and
other parties named therein, as amended as of May
15, 1991.
4.3 (2) Side by Side Agreement among the Registrant and
the other parties named therein.
4.4 (11) Registrant's Preferred Share Purchase Rights
Agreement, dated as of January 23, 1995, between
the Registrant and Chemical Trust Company of
California.
*10.1 (2) Form of Indemnification Agreement between the
Registrant and its directors, executive officers
and officers.
*10.2 (2) Registrant's 1988 Employee Stock Option Plan and
related agreements.
*10.3 (2) Registrant's 1988 Consultant Stock Option Plan
and related agreements.
++10.4 (2) License Agreement, dated February 3, 1989,
between the Registrant and the Regents of the
University of California.
++10.5 (2) Exclusive License Agreement and Bailment between
the Registrant and the Regents of the University
of California, dated May 14, 1991.
++10.6 (2) License Agreement, dated November 1, 1989,
between the Registrant and the Oklahoma Medical
Research Foundation.
++10.7 (2) Research, Option and License Agreement between
the Registrant and Eli Lilly and Company.
10.8 (2) Lease Agreement, dated September 23, 1988, as
amended August 30, 1989 and Lease Rider, dated
September 23, 1988, between the Registrant and NC
Land Associates Limited Partnership.
</TABLE>
<PAGE> 54
<TABLE>
<CAPTION>
Number
------
<S> <C> <C>
10.9 (2) Form of Patent, Copyright and Nondisclosure
Agreement entered into by the Registrant with
each of its officers and certain employees.
10.10 (2) Form of Consultants and Advisors Proprietary
Information and Inventions Agreement entered into
by the Registrant with certain scientific
consultants to the Registrant.
10.11 (1) Form of Scientific Advisor Agreement between the
Registrant and certain scientific advisors to the
Registrant.
10.12 (2) Form of Materials Transfer agreement used by the
Registrant in connection with collaboration
research projects.
10.13 (2) Form of Mutual Confidentiality Agreement used by
the Registrant in connection with potential
business partners.
10.14 (2) Form of Consulting Agreement used by the
Registrant with certain consultants.
10.15 (2) Form of Consulting Agreement for Clinical
Advisors used by the Registrant with certain
clinical advisors to the Registrant.
10.16 (2) Form of Visitor Non-Disclosure Agreement used by
the Registrant and certain visitors to the
Registrant.
*10.17 (1) Forms of option agreements used under the
Registrant's 1991 Equity Incentive Plan.
*10.18 (3) Form of offering document used under the
Registrant's 1991 Employee Stock Purchase Plan.
*10.19 (9) Description of 1993 Incentive Pay Program.
*10.20 (7) Consulting Agreement, dated January 1, 1993,
between the Registrant and Lloyd Hollingsworth
Smith, Jr.
++10.21 (7) Collaboration Research Agreement between the
Registrant and Kyowa Hakko Kogyo, Co., Ltd.
++10.22 (8) Collaboration Agreement between Eli Lilly and
Company and the Registrant, dated May 28, 1993.
++10.23 (6) Exclusive License between the Registrant and the
Regents of the University of California, dated
June 10, 1992.
++10.24 (9) Collaboration Agreement between Ortho
Pharmaceutical Corporation and the Registrant,
dated December 21, 1993.
++10.25 (12) Clinical Trial Research Agreement between the
Registrant and The Johns Hopkins University.
*10.26 Registrant's 1994 Non-employee Directors' Stock
Option Plan.
10.27 (10) Put and Stock Purchase Agreement between the
Registrant and Johnson & Johnson Development
Corporation, dated December 21, 1993.
10.28 (12) Consulting Agreement, dated March 17, 1988, as
amended effective September 28, 1994 between the
Registrant and Shaun R. Coughlin.
*10.29 Registrant's 1991 Stock Purchase Plan, as
amended.
*10.30 Registrant's 1991 Equity Incentive Plan, as
amended.
*10.31 (12)* Description of Registrant's 1994 Incentive Pay
Plan.
++10.32 (13) Collaboration Agreement between Schering-Plough
Corporation and the Registrant, dated April 10,
1995.
</TABLE>
<PAGE> 55
<TABLE>
<CAPTION>
Number
------
<S> <C> <C>
*10.33 (14) Description of Registrant's 1995 Incentive Pay
Plan.
++10.34 (14) Amendment No. 4 to Collaboration Agreement
between the Registrant and Kyowa Hakko Kogyo,
Co., Ltd., dated November 10, 1995.
+10.35 Amendment No. 1 to Collaboration Agreement
between Ortho Pharmaceutical Corporation and the
Registrant, dated September 27, 1996.
+10.36 Amendment No. 1 to Collaboration Agreement
between Eli Lilly and Company and the Registrant,
dated November 1996.
+10.37 (i) Amendment No. 1 to Collaboration Agreement
between Kyowa Hakko Kogyo, Co., Ltd., dated
May 9, 1994.
+10.37 (ii) Amendment No. 2 to Collaboration Agreement
between Kyowa Hakko Kogyo, Co., Ltd., dated
July 13, 1995.
+10.37 (iii) Amendment No. 3 to Collaboration Agreement
between Kyowa Hakko Kogyo, Co., Ltd., dated
August 1, 1995.
+10.37 (iv) Amendment No. 5 to Collaboration Agreement
between Kyowa Hakko Kogyo, Co., Ltd., dated
December 17, 1995.
*10.38 Description of Registrant's 1996 Incentive Pay
Plan.
23.1 Consent of Ernst & Young LLP, Independent
Auditors.
24.1 Power of Attorney, Reference is made to the
signature page.
27.1 Financial Data Schedule.
</TABLE>
- --------------------------------------------------------------------------------
* Indicates management contracts or compensatory plans or arrangements
filed pursuant to Item 601(b)(10) of Regulation S-K.
++ Confidential treatment granted.
+ Confidential treatment requested.
(1) Filed as an exhibit to the Registrant's Registration Statement on Form
S-8 (Reg. No. 33-42912) and incorporated herein by reference.
(2) Filed as an exhibit to the Registrant's Registration Statement on Form
S-1 (Reg. No. 33-40627) or amendments thereto and incorporated herein
by reference.
(3) Filed as an exhibit to the Registrant's Registration Statement on Form
S-1 (Reg. No. 33-43181) or amendments thereto and incorporated herein
by reference.
(4) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the period ended September 30, 1991 and incorporated herein by
reference.
(5) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for
the period ended December 31, 1991 and incorporated herein by
reference.
(6) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the period ended June 30, 1992 and incorporated herein by
reference.
(7) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for
the period ended December 31, 1992 and incorporated by reference
herein.
(8) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the period ended June 30, 1993 and incorporated by reference
herein.
(9) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for
the period ended December 31, 1993 and incorporated by reference
herein.
(10) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the period ended March 31, 1994 and incorporated by reference
herein.
(11) Filed as part of a report on Form 8-K dated January 23, 1995.
(12) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for
the period ended December 31, 1994 and incorporated by reference
herein.
(13) Filed as an exhibit to the Registrant's Quarterly Report on Form 10-Q
for the period ended June 30, 1995 and incorporated by reference
herein.
(14) Filed as an exhibit to the Registrant's Annual Report on Form 10-K for
the period ended December 31, 1995 and incorporated by reference
herein.
<PAGE> 1
EXHIBIT 10.26
COR THERAPEUTICS, INC.
1994 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
(ADOPTED ON JANUARY 21, 1994)
(APPROVED BY STOCKHOLDERS ON MAY 20, 1994)
(AMENDED ON JANUARY 24, 1997)
1. PURPOSE.
(a) The purpose of the 1994 Non-Employee Directors' Stock Option
Plan (the "Plan") is to provide a means by which each director of COR
Therapeutics, Inc., a Delaware corporation (the "Company"), who is not
otherwise an employee or a consultant of the Company or of any Affiliate of the
Company (each such person being hereafter referred to as a "Non-Employee
Director") will be given an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are defined
in Sections 424(e) and (f), respectively, of the Internal Revenue Code of 1986,
as amended from time to time (the "Code").
(c) The word "Fair Market Value" as used in the Plan means, as of
any date, the average of the high and low sales prices of a share of the
Company's Common Stock as quoted on the National Market System of the National
Association of Securities Dealers, Inc. Automated Quotation System, on the last
market trading day prior to the day of determination, as reported in the Wall
Street Journal or such other source as the Board of Directors of the Company
(the "Board") deems reliable.
(d) The Company, by means of the Plan, seeks to retain the
services of persons now serving as Non-Employee Directors of the Company, to
secure and retain the services of persons capable of serving in such capacity,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company.
1.
<PAGE> 2
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless and until
the Board delegates administration to a committee, as provided in subparagraph
2(b).
(b) The Board may delegate administration of the Plan to a
committee composed of one (1) or more members of the Board (the "Committee"),
all of the members of which Committee may (but need not) be, in the discretion
of the Board, "non-employee directors" within the meaning of Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest
in the Board the administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 10 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
options granted under the Plan shall not exceed in the aggregate two hundred
thousand (200,000) shares of the Company's common stock. If any option granted
under the Plan shall for any reason expire or otherwise terminate without
having been exercised in full, the stock not purchased under such option shall
again become available under the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
4. ELIGIBILITY.
(a) Options shall be granted only to Non-Employee Directors of the
Company.
2.
<PAGE> 3
5. NON-DISCRETIONARY GRANTS.
(a) Upon the date of the approval of the Plan by the Board (the
"Adoption Date"), each person who is then a Non-Employee Director shall be
granted an option to purchase twenty-five thousand (25,000) shares of common
stock of the Company on the terms and conditions set forth herein.
(b) Each person who is, after the Adoption Date, elected for the
first time to be a Non-Employee Director shall, upon the date of his initial
election to be a Non-Employee Director by the Board or stockholders of the
Company, be granted an option to purchase twenty-five thousand (25,000) shares
of common stock of the Company on the terms and conditions set forth herein.
6. OPTION PROVISIONS.
Each option shall contain the following terms and conditions:
(a) The term of each option commences on the date it is granted
and, unless sooner terminated as set forth herein, expires on the date
("Expiration Date") ten (10) years from the date of grant. If the optionee's
service as a Non-Employee Director of the Company terminates for any reason or
for no reason, the option shall terminate on the earlier of the Expiration Date
or the date three (3) months following the date of termination of service;
provided, however, that (i) if such termination is due to such person's
permanent and total disability, within the meaning of Section 422(c)(6) of the
Code, the option shall terminate on the earlier of the Expiration Date or
twelve (12) months following such termination; or (ii) if such termination of
service is due to the optionee's death, the option shall terminate on the
earlier of the Expiration Date or eighteen (18) months following the date of
the optionee's death. In any and all circumstances, an option may be exercised
following termination of the optionee's service as a Director of the
3.
<PAGE> 4
Company only as to that number of shares as to which it was exercisable on the
date of termination of such service under the provisions of subparagraph 6(e).
(b) The exercise price of each option shall be one hundred percent
(100%) of the Fair Market Value of the stock subject to such option on the date
such option is granted.
(c) Payment of the exercise price of each option is due in full in
cash upon any exercise when the number of shares being purchased upon such
exercise is less than one thousand (1,000) shares; but when the number of
shares being purchased upon an exercise is one thousand (1,000) or more shares,
the optionee may elect to make payment of the exercise price under one of the
following alternatives:
(i) Payment of the exercise price per share in
cash at the time of exercise; or
(ii) Provided that at the time of the exercise the
Company's common stock is publicly traded and quoted regularly in the Wall
Street Journal, payment by delivery of shares of common stock of the Company
already owned by the optionee, held for the period required to avoid a charge
to the Company's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interest, which common stock shall be valued
at Fair Market Value on the date preceding the date of exercise; or
(iii) Payment by a combination of the methods of
payment specified in subparagraph 6(c)(i) and 6(c)(ii) above; or
(iv) Payment pursuant to a program developed under
Regulation T as promulgated by the Federal Reserve Board which results in the
receipt of cash (or check) by the Company prior to the issuance of shares of
the Company's common stock.
4.
<PAGE> 5
(d) An option shall not be transferable except by will or by the
laws of descent and distribution or pursuant to a domestic relations order, and
shall be exercisable during the lifetime of the person to whom the option is
granted only by such person or by his guardian or legal representative, unless
otherwise specified in the option, in which case the option may be transferred
upon such terms and conditions as are set forth in the option, as the Board or
the Committee shall determine in its discretion at the time of grant. The
person to whom the option is granted may, by delivering written notice to the
Company, in a form satisfactory to the Company, designate a third party who, in
the event of the death of the optionee, shall thereafter be entitled to
exercise the option.
(e) The option shall become exercisable in installments over a
period of sixty (60) months from the date of grant at the rate of four hundred
sixteen and two-thirds (416 2/3) shares per month in sixty (60) equal monthly
installments commencing on the date one month after the date of grant of the
option, provided that the optionee has, during the entire period prior to such
vesting date, continuously served as a Non-Employee Director of the Company,
whereupon such option shall become fully exercisable in accordance with its
terms with respect to that portion of the shares represented by that
installment.
(f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 6(d), as a condition of exercising any
such option: (i) to give written assurances satisfactory to the Company as to
the optionee's knowledge and experience in financial and business matters; and
(ii) to give written assurances satisfactory to the Company stating that such
person is acquiring the stock subject to the option for such person's own
account and not with any present intention of selling or otherwise distributing
the stock. These requirements, and any assurances given pursuant to such
requirements, shall be inoperative if
5.
<PAGE> 6
(i) the issuance of the shares upon the exercise of the option has been
registered under a then-currently-effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), or (ii), as to any
particular requirement, a determination is made by counsel for the Company that
such requirement need not be met in the circumstances under the then-applicable
securities laws. The Company may, upon advice of counsel to the Company, place
legends on stock certificates issued under the Plan as such counsel deems
necessary or appropriate in order to comply with applicable securities laws,
including, but not limited to, legends restricting the transfer of the stock.
(g) Notwithstanding anything to the contrary contained herein, an
option may not be exercised unless the shares issuable upon exercise of such
option are then registered under the Securities Act or, if such shares are not
then so registered, the Company has determined that such exercise and issuance
would be exempt from the registration requirements of the Securities Act.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, the
Company shall keep available at all times the number of shares of stock
required to satisfy such options.
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of stock upon exercise of the options granted
under the Plan; provided, however, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any option
granted under the Plan, or any stock issued or issuable pursuant to any such
option. If, after reasonable efforts, the Company is unable to obtain from any
such regulatory
6.
<PAGE> 7
commission or agency the authority which counsel for the Company deems
necessary for the lawful issuance and sale of stock under the Plan, the Company
shall be relieved from any liability for failure to issue and sell stock upon
exercise of such options.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options granted under the
Plan shall constitute general funds of the Company.
9. MISCELLANEOUS.
(a) Neither an optionee nor any person to whom an option is
transferred under subparagraph 6(d) shall be deemed to be the holder of, or to
have any of the rights of a holder with respect to, any shares subject to such
option unless and until such person has satisfied all requirements for exercise
of the option pursuant to its terms.
(b) Throughout the term of any option granted pursuant to the
Plan, the Company shall make available to the holder of such option, not later
than one hundred twenty (120) days after the close of each of the Company's
fiscal years during the option term, upon request, such financial and other
information regarding the Company as comprises the annual report to the
stockholders of the Company provided for in the Bylaws of the Company and such
other information regarding the Company as the holder of such option may
reasonably request.
(c) Nothing in the Plan or in any instrument executed pursuant
thereto shall confer upon any Non-Employee Director any right to continue in
the service of the Company or any Affiliate or shall affect any right of the
Company, its Board or stockholders or any Affiliate to terminate the service of
any Non-Employee Director with or without cause.
7.
<PAGE> 8
(d) No Non-Employee Director, individually or as a member of a
group, and no beneficiary or other person claiming under or through him, shall
have any right, title or interest in or to any option reserved for the purposes
of the Plan except as to such shares of common stock, if any, as shall have
been reserved for him pursuant to an option granted to him.
(e) In connection with each option granted pursuant to the Plan,
it shall be a condition precedent to the Company's obligation to issue or
transfer shares to a Non-Employee Director, or to evidence the removal of any
restrictions on transfer, that such Non-Employee Director make arrangements
satisfactory to the Company to insure that the amount of any federal or other
withholding tax required to be withheld with respect to such sale or transfer,
or such removal or lapse, is made available to the Company for timely payment
of such tax.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or otherwise), the Plan and
outstanding options will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan and the class(es) and number of shares and
price per share of stock subject to outstanding options.
(b) In the event of: (i) a merger or consolidation in which the
Company is not the surviving corporation; (ii) a reverse merger in which the
Company is the surviving corporation but the shares of the Company's common
stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash
8.
<PAGE> 9
or otherwise; or (iii) any other capital reorganization in which more than
fifty percent (50%) of the shares of the Company entitled to vote are exchanged
any surviving corporation, other than the Company, shall assume any options
outstanding under the Plan or shall substitute similar options for those
outstanding under the Plan or, if the Company is the surviving corporation,
such options shall continue in full force and effect.
11. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the
Plan. Except as provided in paragraph 10 relating to adjustments upon changes
in stock, no amendment shall be effective unless approved by the shareholders
of the Company to the extent shareholder approval is necessary for the Plan to
satisfy the requirements of Rule 16b-3 under the Exchange Act or any Nasdaq or
securities exchange listing requirements.
(b) Rights and obligations under any option granted
before any amendment of the Plan shall not be impaired by such amendment unless
(i) the Company requests the consent of the person to whom the option was
granted and (ii) such person consents in writing.
(C) The Board at any time, and from time to time, may
amend the terms of any one or more Options; provided, however, that the rights
and obligations under any Option shall not be impaired by any such amendment
unless (i) the company requests the consent of the person to whom the Option
was granted and (ii) such person consults in writing.
9.
<PAGE> 10
12. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate on January 20, 2004. No
options may be granted under the Plan while the Plan is suspended or after it
is terminated.
(b) Rights and obligations under any option granted while the Plan
is in effect shall not be altered or impaired by suspension or termination of
the Plan, except with the consent of the person to whom the option was granted.
(c) The Plan shall terminate upon the occurrence of any of the
events described in Section 10(b) above.
13. EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.
(a) The Plan shall become effective upon adoption by the Board of
Directors, subject to the condition subsequent that the Plan is approved by the
stockholders of the Company.
(b) No option granted under the Plan shall be exercised or
exercisable unless and until the condition of subparagraph 13(a) above has been
met.
10.
<PAGE> 1
EXHIBIT 10.29
COR THERAPEUTICS, INC.
1991 EMPLOYEE STOCK PURCHASE PLAN
(ADOPTED MAY 14, 1991)
(AMENDED JANUARY 6, 1995)
(AMENDED NOVEMBER 15, 1996)
(AMENDED JANUARY 24, 1997)
1. PURPOSE.
(a) The purpose of the 1991 Employee Stock Purchase Plan ("the
Plan") is to provide a means by which employees of COR Therapeutics, Inc., a
Delaware corporation (the "Company"), and its Affiliates, as defined in
subparagraph 1(b), which are designated as provided in subparagraph 2(b), may
be given an opportunity to purchase stock of the Company.
(b) The word "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are
defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code
of 1986, as amended (the "Code").
(c) The Company, by means of the Plan, seeks to retain the
services of its employees, to secure and retain the services of new employees,
and to provide incentives for such persons to exert maximum efforts for the
success of the Company.
(d) The Company intends that the rights to purchase stock of the
Company granted under the Plan be considered options issued under an "employee
stock purchase plan" as that term is defined in Section 423(b) of the Code.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors (the
"Board") of the Company unless and until the Board delegates administration to
a Committee, as provided in subparagraph 2(c). Whether or not the Board has
delegated administration, the Board shall have the final power to determine all
questions of policy and expediency that may arise in the administration of the
Plan.
(b) The Board shall have the power, subject to, and within the
limitations of, the express provisions of the Plan:
(i) To determine when and how rights to purchase stock of
the Company shall be granted and the provisions of each offering of such rights
(which need not be identical).
(ii) To designate from time to time which Affiliates of
the Company shall be eligible to participate in the Plan.
(iii) To construe and interpret the Plan and rights granted
under it, and to establish, amend and revoke rules and regulations for its
administration. The Board, in the
1.
<PAGE> 2
exercise of this power, may correct any defect, omission or inconsistency in
the Plan, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.
(iv) To amend the Plan as provided in paragraph 13.
(v) Generally, to exercise such powers and to perform
such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
(c) The Board may delegate administration of the Plan to a
Committee composed of not fewer than two (2) members of the Board (the
"Committee"). If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and revest
in the Board the administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
Subject to the provisions of paragraph 12 relating to adjustments upon
changes in stock, the stock that may be sold pursuant to rights granted under
the Plan shall not exceed in the aggregate six hundred fifty thousand (650,000)
shares of the Company's $0.0001 par value common stock (the "Common Stock").
If any right under the Plan shall for any reason terminate without having been
exercised, the Common Stock not purchased under such right shall again become
available for the Plan.
4. GRANT OF RIGHTS: OFFERING.
The Board or the Committee may from time to time grant or provide for
the grant of rights to purchase Common Stock of the Company under the Plan to
eligible employees (an "Offering") on a date or dates (the "Offering Date(s)")
selected by the Board or the Committee. Each Offering shall be in such form
and shall contain such terms and conditions as the Board or the Committee shall
deem appropriate. If an employee has more than one right outstanding under the
Plan, unless he or she otherwise indicates in agreements or notices delivered
hereunder (1) each agreement or notice delivered by that employee will be
deemed to apply to all of his or her rights under the Plan, and (2) a right
with a lower exercise price (or an earlier-granted right, if two rights have
identical exercise prices), will be exercised to the fullest possible extent
before a right with a higher exercise price (or a later-granted right, if two
rights have identical exercise prices) will be exercised. The provisions of
separate Offerings need not be identical, but each Offering shall include
(through incorporation of the provisions of this Plan by reference in the
Offering or otherwise) the substance of the provisions contained in paragraphs
5 through 8, inclusive.
5. ELIGIBILITY.
(a) Rights may be granted only to employees of the Company or, as
the Board or the Committee may designate as provided in subparagraph 2(b), to
employees of any Affiliate of the Company. Except as provided in subparagraph
5(b), an employee of the Company or any
2.
<PAGE> 3
Affiliate shall not be eligible to be granted rights under the Plan, unless, on
the Offering Date, such employee has been in the employ of the Company or any
Affiliate for such continuous period preceding such grant as the Board or the
Committee may require, but in no event shall the required period of continuous
employment be equal to or greater than two (2) years. In addition, unless
otherwise determined by the Board or the Committee and set forth in the terms
of the applicable Offering, no employee of the Company or any Affiliate shall
be eligible to be granted rights under the Plan, unless, on the Offering Date,
such employee's customary employment with the Company or such Affiliate is at
least twenty (20) hours per week and at least five (5) months per calendar
year.
(b) The Board or the Committee may provide that, each person who,
during the course of an Offering, first becomes an eligible employee of the
Company or designated Affiliate will, on a date or dates specified in the
Offering which coincides with the day on which such person becomes an eligible
employee or occurs thereafter, receive a right under that Offering, which right
shall thereafter be deemed to be a part of that Offering. Such right shall
have the same characteristics as any rights originally granted under that
Offering, as described herein, except that:
(i) the date on which such right is granted shall be the
"Offering Date" of such right for all purposes, including determination of the
exercise price of such right;
(ii) the Purchase Period (as defined below) for such right
shall begin on its Offering Date and end coincident with the end of such
Offering; and
(iii) the Board or the Committee may provide that if such
person first becomes an eligible employee within a specified period of time
before the end of the Purchase Period (as defined below) for such Offering, he
or she will not receive any right under that Offering.
(c) No employee shall be eligible for the grant of any rights
under the Plan if, immediately after any such rights are granted, such employee
owns stock possessing five percent (5%) or more of the total combined voting
power or value of all classes of stock of the Company or of any Affiliate. For
purposes of this subparagraph 5(c), the rules of Section 424(d) of the Code
shall apply in determining the stock ownership of any employee, and stock which
such employee may purchase under all outstanding rights and options shall be
treated as stock owned by such employee.
(d) An eligible employee may be granted rights under the Plan only
if such rights, together with any other rights granted under "employee stock
purchase plans" of the Company and any Affiliates, as specified by Section
423(b)(8) of the Code, do not permit such employee's rights to purchase stock
of the Company or any Affiliate to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of fair market value of such stock (determined at
the time such rights are granted) for each calendar year in which such rights
are outstanding at any time.
6. RIGHTS: PURCHASE PRICE.
(a) On each Offering Date, each eligible employee, pursuant to an
Offering made under the Plan, shall be granted the right to purchase the number
of shares of Common Stock
3.
<PAGE> 4
of the Company purchasable with up to fifteen percent (15%) (or such lower
percentage as the Board determines for a particular Offering) of such
employee's Earnings (as defined in Section 7(a)) during the period which begins
on the Offering Date (or such later date as the Board determines for a
particular Offering) and ends on the date stated in the Offering, which date
shall be no more than twenty-seven (27) months after the Offering Date (the
Purchase Period"). In connection with each Offering made under this Plan, the
Board or the Committee shall specify a maximum number of shares which may be
purchased by any employee as well as a maximum aggregate number of shares which
may be purchased by all eligible employees pursuant to such Offering. In
addition, in connection with each Offering which contains more than one
Exercise Date (as defined in the Offering), the Board or the Committee may
specify a maximum aggregate number of shares which may be purchased by all
eligible employees on any given Exercise Date under the Offering. If the
aggregate purchase of shares upon exercise of rights granted under the Offering
would exceed any such maximum aggregate number, the Board or the Committee
shall make a pro rata allocation of the shares available in as nearly a uniform
manner as shall be practicable and as it shall deem to be equitable.
(b) The purchase price of stock acquired pursuant to rights
granted under the Plan shall be not less than the lesser of:
(i) an amount equal to eighty-five percent (85%) of the
fair market value of the stock on the Offering Date; or
(ii) an amount equal to eighty-five percent (85%) of the
fair market value of the stock on the Exercise Date.
7. PARTICIPATION: WITHDRAWAL: TERMINATION.
(a) An eligible employee may become a participant in an Offering
by delivering a participation agreement to the Company within the time
specified in the Offering, in such form as the Company provides. Each such
agreement shall authorize payroll deductions of up to fifteen percent (15%) (or
such lower percentage as the Board determines for a particular Offering) of
such employee's Earnings during the Purchase Period. "Earnings" is defined as
an employee's total compensation, including all salary, wages and other
remuneration paid to an employee (including amounts elected to be deferred by
the employee, that would otherwise have been paid, under any cash or deferred
arrangement established by the Company), overtime pay, commissions, bonuses,
profit sharing, any special payments for extraordinary services, provided,
however, that the Board in its sole discretion may limit the above definition
from time to time with respect to each Offering. The payroll deductions made
for each participant shall be credited to an account for such participant under
the Plan and shall be deposited with the general funds of the Company. A
participant may reduce, increase or begin such payroll deductions after the
beginning of any Purchase Period only as provided for in the Offering. A
participant may make additional payments into his or her account only if
specifically provided for in the Offering and only if the participant has not
had the maximum amount withheld during the Purchase Period.
(b) At any time during a Purchase Period a participant may
terminate his or her payroll deductions under the Plan and withdraw from the
Offering by delivering to the Company
4.
<PAGE> 5
a notice of withdrawal in such form as the Company provides. Such withdrawal
may be elected at any time prior to the end of the Purchase Period. Upon such
withdrawal from the Offering by a participant, the Company shall distribute to
such participant all of his or her accumulated payroll deductions (reduced to
the extent, if any, such deductions have been used to acquire stock for the
participant) under the Offering, without interest unless the terms of the
Offering specifically so provide, and such participant's interest in that
Offering shall be automatically terminated. A participant's withdrawal from an
Offering will have no effect upon such participant's eligibility to participate
in any other Offerings under the Plan but such participant will be required to
deliver a new participation agreement in order to participate in subsequent
Offerings under the Plan.
(c) Rights granted pursuant to any Offering under the Plan shall
terminate immediately upon cessation of any participating employee's employment
with the Company or an Affiliate, for any reason, and the Company shall
distribute to such terminated employee all of his or her accumulated payroll
deductions (reduced to the extent, if any, such deductions have been used to
acquire stock for the terminated employee), under the Offering, without
interest unless the terms of the Offering specifically so provide.
(d) Rights granted under the Plan shall not be transferable, and
shall be exercisable only by the person to whom such rights are granted.
8. EXERCISE.
(a) On each exercise date as defined in the relevant Offering (an
"Exercise Date"), each participant's accumulated payroll deductions (without
any increase for interest unless the terms of the Offering specifically so
provide) will be applied to the purchase of whole shares of stock of the
Company, up to the maximum number of shares permitted pursuant to the terms of
the Plan and the applicable Offering, at the purchase price specified in the
Offering. No fractional shares shall be issued upon the exercise of rights
granted under the Plan. The amount, if any, of accumulated payroll deductions
remaining in each participant's account after the purchase of shares which is
less than the amount required to purchase one share of stock on the final
Exercise Date of an Offering shall be held in each such participant's account
for the purchase of shares under the next Offering under the Plan, unless such
participant withdraws from such next Offering, as provided in subparagraph
7(b), or is no longer eligible to be granted rights under the Plan, as provided
in paragraph 5, in which case such amount shall be distributed to the
participant after said final Exercise Date, without interest unless the terms
of the Offering specifically so provide. The amount, if any, of accumulated
payroll deductions remaining in any participant's account after the purchase of
shares which is equal to the amount required to purchase whole shares of stock
on the final Exercise Date of an Offering shall be distributed in full to the
participant after such Exercise Date, without interest unless the terms of the
Offering specifically so provide.
(b) No rights granted under the Plan may be exercised to any
extent unless the Plan (including rights granted thereunder) is covered by an
effective registration statement pursuant to the Securities Act of 1933, as
amended (the "Securities Act"). If on an Exercise Date of any Offering
hereunder the Plan is not so registered, no rights granted under the Plan or
any Offering shall be exercised on said Exercise Date and all payroll
deductions accumulated during
5.
<PAGE> 6
the purchase period (reduced to the extent, if any, such deductions have been
used to acquire stock) shall be distributed to the participants, without
interest unless the terms of the Offering specifically so provide.
9. COVENANTS OF THE COMPANY.
(a) During the terms of the rights granted under the Plan, the
Company shall keep available at all times the number of shares of stock
required to satisfy such rights.
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of stock upon exercise of the rights granted
under the Plan. If, after reasonable efforts, the Company is unable to obtain
from any such regulatory commission or agency the authority which counsel for
the Company deems necessary for the lawful issuance and sale of stock under the
Plan, the Company shall be relieved from any liability for failure to issue and
sell stock upon exercise of such rights unless and until such authority is
obtained.
10. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to rights granted under the
Plan shall constitute general funds of the Company.
11. RIGHTS AS A STOCKHOLDER.
A participant shall not be deemed to be the holder of, or to have any
of the rights of a holder with respect to, any shares subject to rights granted
under the Plan unless and until certificates representing such shares shall
have been issued.
12. ADJUSTMENTS UPON CHANGES IN STOCK.
(a) If any change is made in the stock subject to the Plan, or
subject to any rights granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or otherwise), the Plan and
outstanding rights will be appropriately adjusted in the class(es) and maximum
number of shares subject to the Plan and the class(es) and number of shares and
price per share of stock subject to outstanding rights.
(b) In the event of: (1) a dissolution or liquidation of the
Company; (2) a merger or consolidation in which the Company is not the
surviving corporation; (3) a reverse merger in which the Company is the
surviving corporation but the shares of the Company's Common Stock outstanding
immediately preceding the merger are converted by virtue of the merger into
other property, whether in the form of securities, cash or otherwise; or (4)
any other capital reorganization in which more than fifty percent (50%) of the
shares of the Company entitled to vote are exchanged, then, as determined by
the Board in its sole discretion (i) any surviving corporation may assume
outstanding rights or substitute similar rights for those under the Plan, (ii)
such rights may continue in full force and effect, or (iii) participants'
accumulated payroll
6.
<PAGE> 7
deductions may be used to purchase Common Stock immediately prior to the
transaction described above and the participants' rights under the ongoing
Offering terminated.
13. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the
Plan. However, except as provided in paragraph 12 relating to adjustments upon
changes in stock, no amendment shall be effective if such modification requires
stockholder approval in order for the Plan to obtain employee stock purchase
plan treatment under Section 423 of the Code or to comply with the requirements
of Rule 16b-3 promulgated under the Exchange Act or any Nasdaq or securities
exchange listing requirements. It is expressly contemplated that the Board may
amend the Plan in any respect the Board deems necessary or advisable to provide
eligible employees with the maximum benefits provided or to be provided under
the provisions of the Code and the regulations promulgated thereunder relating
to employee stock purchase plans and/or to bring the Plan and/or rights granted
under it into compliance therewith.
(b) Rights and obligations under any rights granted before
amendment of the Plan shall not be altered or impaired by any amendment of the
Plan, except with the consent of the person to whom such rights were granted.
14. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time.
Unless sooner terminated, the Plan shall terminate ten (10) years from the date
the Plan is adopted by the Board or approved by the stockholders of the
Company, whichever is earlier. No rights may be granted under the Plan while
the Plan is suspended or after it is terminated.
(b) Rights and obligations under any rights granted while the Plan
is in effect shall not be altered or impaired by suspension or termination of
the Plan, except with the consent of the person to whom such rights were
granted.
15. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board, but no
rights granted under the Plan shall be exercised unless and until the Plan has
been approved by the stockholders of the Company.
7.
<PAGE> 1
EXHIBIT 10.30
COR THERAPEUTICS, INC.
1991 EQUITY INCENTIVE PLAN
(ADOPTED BY BOARD OF DIRECTORS MAY 14, 1991)
(AMENDED JANUARY 21, 1994)
(AMENDED JANUARY 6, 1995)
(AMENDED JANUARY 19, 1996)
(AMENDED JANUARY 24, 1997)
1. PURPOSE.
(a) The purpose of the 1991 Equity Incentive Plan (the
"Plan") is to provide a means by which employees, directors and consultants of
COR Therapeutics, Inc., a Delaware corporation (the "Company"), and its
Affiliates, as defined in subparagraph 1(b), may be given an opportunity to
benefit from increases in value of the stock of the Company through the
granting of (i) incentive stock options, (ii) nonqualified stock options, (iii)
stock bonuses, and (iv) rights to purchase restricted stock, all as defined
below.
(b) "Affiliate" as used in the Plan means any parent
corporation or subsidiary corporation of the Company, as those terms are
defined in Sections 424(e) and (f), respectively, of the Internal Revenue Code
of 1986, as amended (the "Code").
(c) "Covered Executive" as used in the Plan means each
employee of or consultant to the Company or an Affiliate subject to Section 16
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), with
respect to the Company or an Affiliate.
(d) The Company, by means of the Plan, seeks to retain
the services of persons now employed by or serving as consultants to the
Company, to secure and retain the services of persons capable of filling such
positions, and to provide incentives for such persons to exert maximum efforts
for the success of the Company.
(e) The Company intends that the rights issued under the
Plan ("Stock Awards") shall, in the discretion of the Board of Directors of the
Company (the "Board") or any committee to which responsibility for
administration of the Plan has been delegated pursuant to subparagraph 2(c), be
either (i) stock options granted pursuant to paragraph 5 hereof, including
incentive stock options as that term is used in Section 422 of the Code
("Incentive Stock Options"), or options which do not qualify as Incentive Stock
Options ("Nonqualified Stock Options") (together hereinafter referred to as
"Options"), or (ii) stock bonuses or rights to purchase restricted stock
granted pursuant to paragraph 6 hereof.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board unless
and until the Board delegates administration to a committee, as provided in
subparagraph 2(c).
1.
<PAGE> 2
(b) The Board shall have the power, subject to, and
within the limitations of, the express provisions of the Plan:
(1) To determine from time to time which of the
persons eligible under the Plan shall be granted Stock Awards; when and how
Stock Awards shall be granted; whether a Stock Award will be an Incentive Stock
Option, a Nonqualified Stock Option, a stock bonus, a right to purchase
restricted stock, or a combination of the foregoing; the provisions of each
Stock Award granted (which need not be identical), including the time or times
when a person shall be permitted to purchase or receive stock pursuant to a
Stock Award; and the number of shares with respect to which Stock Awards shall
be granted to each such person.
(2) To construe and interpret the Plan and Stock
Awards granted under it, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Stock
Award, in a manner and to the extent it shall deem necessary or expedient to
make the Plan fully effective.
(3) To amend the Plan as provided in paragraph 13.
(4) Generally, to exercise such powers and to
perform such acts as the Board deems necessary or expedient to promote the best
interests of the Company.
(c) The Board may delegate administration of the Plan to
a committee composed of two (2) or more members of the Board (the "Committee"),
all of the members of which Committee may (but need not) be, in the discretion
of the Board, non-employee directors and/or outside directors. If
administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board, subject, however, to such resolutions, not inconsistent
with the provisions of the Plan, as may be adopted from time to time by the
Board. Notwithstanding any provision in this paragraph 2 to the contrary, the
Board or the Committee may delegate to a committee of one or more members of
the Board the authority to grant options to eligible persons who are not then
Covered Executives.
(d) (1) The term "non-employee director", as used in
this Plan, shall mean a member of the Board who either (i) is not a current
employee or officer of the Company or its parent or subsidiary, does not
receive compensation (directly or indirectly) from the Company or its parent or
subsidiary for services rendered as a consultant or in any capacity other than
as a director (except for an amount as to which disclosure would not be
required under Item 404(a) of Regulation S-K ("Regulation S-K") promulgated
pursuant to the Securities Act of 1933 (the "Securities Act")), does not
possess an interest in any other transaction as to which disclosure would be
required under Item 404(a) of Regulation S-K, and is not engaged in a business
relationship as to which disclosure would be required under Item 404(b) of
Regulation S-K; or (ii) is otherwise considered a "non-employee director" for
purposes of Rule 16b-3 promulgated under the Exchange Act.
2.
<PAGE> 3
(2) The term "outside director", as used in this
Plan shall mean a director who either (i) is not a current employee of the
Company or an "affiliated corporation", is not a former employee of the Company
or an affiliated corporation receiving compensation for prior services (other
than benefits under a tax qualified pension plan), was not an officer of the
Company or an affiliated corporation at any time, and is not currently
receiving compensation for personal services in any capacity other than as a
director, or (ii) is otherwise considered an "outside director" for purposes of
Section 162(m) of the Code.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 11 relating to
adjustments upon changes in stock, the stock that may be issued pursuant to
Stock Awards granted under the Plan shall not exceed in the aggregate four
million eight hundred thousand (4,800,000) shares of the Company's $0.0001 par
value common stock (the "Common Stock"). If any Stock Award granted under the
Plan shall for any reason expire or otherwise terminate without having been
exercised in full, the Common Stock not acquired under such Stock Award shall
again become available for the Plan. Shares repurchased by the Company
pursuant to any repurchase rights reserved by the Company pursuant to the Plan
shall not be available for subsequent issuance under the Plan.
(b) The Common Stock subject to the Plan may be unissued
shares or reacquired shares, bought on the market or otherwise.
4. ELIGIBILITY.
(a) Incentive Stock Options may be granted only to
employees (including officers) of the Company or its Affiliates. A director of
the Company shall not be eligible to receive Incentive Stock Options unless
such director is also an employee of the Company or any Affiliate. Stock
Awards other than Incentive Stock Options may be granted only to employees
(including officers), directors of and consultants to the Company or any
Affiliate.
(b) No person shall be eligible for the grant of an
Incentive Stock Option under the Plan if, at the time of grant, such persons
owns (or is deemed to own pursuant to Section 424(d) of the Code) stock
possessing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or of any of its Affiliates unless the
exercise price of such Incentive Stock Option is at least one hundred and ten
percent (110%) of the fair market value of the Common Stock at the date of
grant and the Incentive Stock Option is not exercisable after the expiration of
five (5) years from the date of grant.
(c) No person shall be eligible to be granted Stock
Awards under the Plan covering more than five hundred thousand (500,000) shares
of the Company's Common Stock in any calendar year.
3.
<PAGE> 4
5. TERMS OF STOCK OPTIONS.
Each Option shall be in such form and shall contain such terms
and conditions as the Board or the Committee shall deem appropriate. The
provisions of separate Options need not be identical, but each Option shall
include (through incorporation of provisions hereof by reference in the Option
or otherwise) the substance of each of the following provisions:
(a) No Option shall be exercisable after the expiration
of ten (10) years from the date it was granted.
(b) The exercise price of each Incentive Stock Option
shall be not less than one hundred percent (100%) of the fair market value of
the Common Stock subject to the Option on the date the Option is granted. The
exercise price of each Nonqualified Stock Option shall be not less than fifty
percent (50%) of the fair market value of the Common Stock subject to the
Option on the date the Option is granted.
(c) The purchase price of Common Stock acquired pursuant
to an Option shall be paid, to the extent permitted by applicable statutes and
regulations, either: (i) in cash at the time the Option is exercised; or (ii)
at the discretion of the Board or the Committee, either at the time of grant or
exercise of the Option (A) by delivery to the Company of shares of Common Stock
of the Company that have been held for the period required to avoid a charge to
the Company's reported earnings and valued at the fair market value on the date
of exercise, (B) according to a deferred payment or other arrangement (which
may include, without limiting the generality of the foregoing, the use of other
Common Stock of the Company) with the person to whom the Option is granted or
to whom the Option is transferred pursuant to subparagraph 5(d), or (C) in any
other form of legal consideration that may be acceptable to the Board or the
Committee in their discretion.
In the case of any deferred payment arrangement, interest shall be
payable at least annually and shall be charged at not less than the minimum
rate of interest necessary to avoid the treatment as interest, under any
applicable provisions of the Code, of any amounts other than amounts stated to
be interest under the deferred payment arrangement.
(d) An Incentive Stock Option shall not be transferable
except by will or by the laws of descent and distribution, and shall be
exercisable during the lifetime of the optionee to whom the Option is granted
only by such optionee. A Nonqualified Stock Option may be transferable to the
extent provided in the Option Agreement; provided, however, that if the Option
Agreement does not specifically provide for transferability, then such
Nonqualified Stock Option shall not be transferable except by will or by the
laws of descent and distribution or pursuant to a domestic relations order.
Notwithstanding the foregoing, the person to whom the Option is granted may, by
delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the
Optionee, shall thereafter be entitled to exercise the Option.
(e) The total number of shares of Common Stock subject to
an Option may, but need not, be allotted in periodic installments (which may,
but need not, be equal). From
4.
<PAGE> 5
time to time during each of such installment periods, the Option may become
exercisable ("vest") with respect to some or all of the shares allotted to that
period, and may be exercised with respect to some or all of the shares allotted
to such period and/or any prior period as to which the Option was not fully
exercised. During the remainder of the term of the Option (if its term extends
beyond the end of the installment periods), the Option may be exercised from
time to time with respect to any shares then remaining subject to the Option.
The provisions of this subparagraph 5(e) are subject to any Option provisions
governing the minimum number of shares as to which an Option may be exercised.
(f) The Company may require any optionee, or any person
to whom an Option is transferred under subparagraph 5(d), as a condition of
exercising any such Option: (i) to give written assurances satisfactory to the
Company as to the optionee's knowledge and experience in financial and business
matters and/or to employ a purchaser representative who has such knowledge and
experience in financial and business matters, and that he or she is capable of
evaluating, alone or together with the purchaser's representative, the merits
and risks of exercising the Option; and (ii) to give written assurances
satisfactory to the Company stating that such person is acquiring the Common
Stock subject to the Option for such person's own account and not with any
present intention of selling or otherwise distributing the Common Stock. These
requirements, and any assurances given pursuant to such requirements, shall be
inoperative if: (x) the issuance of the shares upon the exercise of the Option
has been registered under a then currently effective registration statement
under the Securities Act; or (y) as to any particular requirement, a
determination is made by counsel for the Company that such requirement need not
be met in the circumstances under the then applicable securities law.
(g) An Option shall terminate three (3) months after
termination of the optionee's employment or relationship as a consultant or
director with the Company or an Affiliate, unless: (i) such termination is due
to such person's permanent and total disability, within the meaning of Section
422(c)(6) of the Code, in which case the Option may, but need not, provide that
it may be exercised at any time within one (1) year following such termination
of employment or relationship as a consultant or director; (ii) the optionee
dies while in the employ of or while serving as a consultant or director to the
Company or an Affiliate, or within not more than three (3) months after
termination of such employment or relationship as a consultant or director, in
which case the Option may, but need not, provide that it may be exercised at
any time within eighteen (18) months following the death of the optionee by the
person or persons to whom the optionee's rights under such Option pass by will
or by the laws of descent and distribution; or (iii) the Option by its term
specifies either (A) that it shall terminate sooner than three (3) months after
termination of the optionee's employment or relationship as a consultant or
director with the Company or an Affiliate; or (B) that it may be exercised more
than three (3) months after termination of the optionee's employment or
relationship as a consultant or director with the Company or an Affiliate.
This subparagraph 5(g) shall not be construed to extend the term of any Option
or to permit anyone to exercise the Option after expiration of its term, nor
shall it be construed to increase the number of shares as to which any Option
is exercisable from the amount exercisable on the date of termination of the
optionee's employment or relationship as a consultant or director.
5.
<PAGE> 6
(h) The Option may, but need not, include a provision
whereby the optionee may elect at any time during the term of his or her
employment or relationship as a consultant or director with the Company or any
Affiliate to exercise the Option as to any part or all of the shares subject to
the Option prior to the stated vesting dates of the Option. Any shares so
purchased from any unvested installment or Option may be subject to a
repurchase right in favor of the Company or to any other restriction the Board
or the Committee determines to be appropriate.
(i) To the extent provided by the terms of an Option,
each optionee may satisfy, in whole or in part, any federal, state or local tax
withholding obligation relating to the exercise of such Option by any of the
following means or by a combination of such means: (i) tendering a cash
payment; (ii) authorizing the Company to withhold from the shares of the Common
Stock otherwise issuable to the optionee as a result of the exercise of the
Option a number of shares having a fair market value less than or equal to the
amount of the withholding tax obligation; or (iii) delivering to the Company
owned and unencumbered shares of the Common Stock having a fair market value
less than or equal to the amount of the withholding tax obligation.
6. TERMS OF STOCK BONUSES AND PURCHASES OF RESTRICTED STOCK.
Each stock bonus or restricted stock purchase agreement shall
be in such form and shall contain such terms and conditions as the Board or the
Committee shall deem appropriate. The terms and conditions of stock bonus or
restricted stock purchase agreements may change from time to time, and the
terms and conditions of separate agreements need not be identical, but each
stock bonus or restricted stock purchase agreement shall include (through
incorporation of provisions hereof by reference in the agreement or otherwise)
the substance of each of the following provisions as appropriate:
(a) The purchase price under each stock purchase
agreement shall be such amount as the Board or Committee shall determine and
designate in such agreement. Notwithstanding the foregoing, the Board or the
Committee may determine that eligible participants in the Plan may be awarded
stock pursuant to a stock bonus agreement in consideration for past services
actually rendered to the Company or for its benefit.
(b) No rights under a stock bonus or restricted stock
purchase agreement shall be transferable except by will or by the laws of
descent and distribution so long as stock awarded under such agreement remains
subject to the terms of the agreement.
(c) The purchase price of stock acquired pursuant to a
stock purchase agreement shall be paid either: (i) in cash at the time of
purchase; (ii) at the discretion of the Board or the Committee, according to a
deferred payment or other arrangement with the person to whom the Common Stock
is sold; or (iii) in any other form of legal consideration that may be
acceptable to the Board or the Committee in their discretion.
6.
<PAGE> 7
(d) Shares of Common Stock sold or awarded under the Plan
may, but need not, be subject to a repurchase option in favor of the Company in
accordance with a vesting schedule to be determined by the Board or the
Committee.
(e) In the event a person ceases to be an employee of or
ceases to serve as a director of or consultant to the Company or an Affiliate,
the Company may repurchase or otherwise reacquire any or all of the shares of
Common Stock held by that person which have not vested as of the date of
termination under the terms of the stock bonus or restricted stock purchase
agreement between the Company and such person.
7. CANCELLATION AND RE-GRANT OF OPTIONS.
(a) The Board or the Committee shall have the authority
to effect, at any time and from time to time, with the consent of the affected
holders of Options, (i) the repricing of any outstanding Options under the Plan
and/or (ii) the cancellation of any outstanding Options and the grant in
substitution therefor of new Options under the Plan covering the same or
different numbers of shares of Common Stock, but having an exercise price per
share not less than fifty percent (50%) of the fair market value (one hundred
percent (100%) of the fair market value in the case of an Incentive Stock
Option or, in the case of a 10% stockholder (as defined in subparagraph 4(b)),
not less than one hundred and ten percent (110%) of the fair market value) per
share of Common Stock on the new grant date.
(b) Shares subject to an option canceled under this
Section 7 shall continue to be counted against the maximum award of options
permitted to be granted to any person pursuant to subsection 4(c) of the Plan.
The repricing of an option under this Section 7, resulting in a reduction of
the exercise price, shall be deemed to be a cancellation of the original option
and the grant of a substitute option; in the event of such repricing, both the
original and the substituted options shall be counted against the maximum
awards of options permitted to be granted to any person pursuant to subsection
4(c) of the Plan. The provisions of this subsection 7(b) shall be applicable
only to the extent required by Section 162(m) of the Code.
8. COVENANTS OF THE COMPANY.
(a) During the terms of the Stock Awards granted under
the Plan, the Company shall keep available at all times the number of shares of
Common Stock required to satisfy such Stock Awards up to the number of shares
of Common Stock authorized under the Plan.
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be
required to issue and sell shares of Common Stock under the Stock Awards
granted under the Plan; provided, however, that this undertaking shall not
require the Company to register under the Securities Act either the Plan, any
Stock Award granted under the Plan or any Common Stock issued or issuable
pursuant to any such Stock Award. If, after reasonable efforts, the Company is
unable to obtain from any such regulatory commission or agency the authority
that counsel for the Company deems necessary for the lawful issuance and sale
of Common Stock under the Plan, the
7.
<PAGE> 8
Company shall be relieved from any liability for failure to issue and sell
Common Stock upon exercise of such Stock Awards unless and until such authority
is obtained.
9. USE OF PROCEEDS FROM COMMON STOCK.
Proceeds from the sale of Common Stock pursuant to Stock
Awards granted under the Plan shall constitute general funds of the Company.
10. MISCELLANEOUS.
(a) The Board or Committee shall have the power to
accelerate the time during which a Stock Award may be exercised or the time
during which a Stock Award or any part thereof will vest, notwithstanding the
provisions in the Stock Award stating the time during which it may be exercised
or the time during which it will vest.
(b) Neither an optionee, Option holder nor any person to
whom an Option is transferred under the provisions of the Plan shall be deemed
to be the holder of, or to have any of the rights of a holder with respect to,
any shares subject to such Option unless and until such person has satisfied
all requirements for exercise of the Option pursuant to its terms.
(c) Nothing in the Plan or any instrument executed or
Stock Award granted pursuant thereto shall confer upon any eligible employee,
consultant, director, optionee or holder of Stock Awards under the Plan any
right to continue in the employ of the Company or any Affiliate or to continue
acting as a consultant or director or shall affect the right of the Company or
any Affiliate to terminate the employment or consulting relationship or
directorship of any eligible employee, consultant, director, optionee or holder
of Stock Awards under the Plan with or without cause. In the event that a
holder of Stock Awards under the Plan is permitted or otherwise entitled to
take a leave of absence, the Company shall have the unilateral right to (i)
determine whether such leave of absence will be treated as a termination of
employment or relationship as consultant or director for purposes hereof, and
(ii) suspend or otherwise delay the time or times at which exercisability or
vesting would otherwise occur with respect to any outstanding Stock Awards, or
related repurchase rights thereunder, under the Plan.
(d) To the extent that the aggregate fair market value
(determined at the time of grant) of stock with respect to which incentive
stock options (as defined in the Code) are exercisable for the first time by
any optionee during any calendar year under all plans of the Company and its
Affiliates exceeds one hundred thousand dollars ($100,000), the options or
portions thereof which exceed such limit (according to the order in which they
were granted) shall be treated as Nonqualified Stock Options.
11. ADJUSTMENTS UPON CHANGES IN COMMON STOCK.
If any change is made in the Common Stock subject to the Plan,
or subject to any Stock Award granted under the Plan (through merger,
consolidation, reorganization, recapitalization, stock dividend, dividend in
property other than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or
8.
<PAGE> 9
otherwise), the Plan and outstanding Stock Awards will be appropriately
adjusted in the class(es) and maximum number of shares subject to the Plan and
the class(es) and number of shares and price per share of stock subject to
outstanding Stock Awards.
12. CHANGE OF CONTROL.
(a) Notwithstanding anything to the contrary in this
Plan, in the event of a Change of Control (as hereinafter defined), then, at
the sole discretion of the Board and to the extent permitted by applicable law:
(i) any surviving corporation shall assume the rights and obligations of the
Company under any Stock Awards outstanding under the Plan or shall substitute
similar Stock Awards for those outstanding under the Plan; (ii) the time during
which such Stock Awards become vested or may be exercised shall be accelerated
and any outstanding unexercised rights under any Stock Awards terminated if not
exercised prior to such event; or (iii) such Stock Awards shall continue in
full force and effect.
(b) For purposes of the Plan, a "Change of Control" shall
be deemed to have occurred at any of the following times:
(i) Upon the acquisition (other than from the
Company) by any person, entity or "group," within the meaning of Section
13(d)(3) or 14(d)(2) of the Exchange Act (excluding, for this purpose, the
Company or its affiliates, or any employee benefit plan of the Company or its
affiliates which acquires beneficial ownership of voting securities of the
Company), of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of fifty percent (50%) or more of either the then
outstanding shares of common stock or the combined voting power of the
Company's then outstanding voting securities entitled to vote generally in the
election of directors; or
(ii) At the time individuals who, as of May 14,
1991, constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any person becoming
a director subsequent to May 14, 1991, whose election, or nomination for
election by the Company's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to the
election of the Directors of the Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be, for purposes of
the Plan, considered as though such person were a member of the Incumbent
Board; or
(iii) Immediately prior to the consummation by the
Company of a reorganization, merger, consolidation, (in each case, with respect
to which persons who were the stockholders of the Company immediately prior to
such reorganization, merger or consolidation do not, immediately thereafter,
own more than fifty percent (50%) of the combined voting power entitled to vote
generally in the election of directors of the reorganized, merged or
consolidated company's then outstanding voting securities) or a liquidation or
dissolution of the Company or of the sale of all or substantially all of the
assets of the Company; or
9.
<PAGE> 10
(iv) The occurrence of any other event which the
Incumbent Board in its sole discretion determines constitutes a Change of
Control.
13. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may
amend the Plan. However, except as provided in paragraph 11 relating to
adjustments upon changes in the Common Stock, no amendment shall be effective
unless approved by the stockholders of the Company to the extent stockholder
approval is necessary for the Plan to satisfy the requirements of Section 422
of the Code, Rule 16b-3 under the Exchange Act or any Nasdaq or securities
exchange listing requirements.
(b) The Board may in its sole discretion submit any other
amendment to the Plan for stockholder approval, including, but not limited to,
amendments to the Plan intended to satisfy the requirements of Section 162(m)
of the Code and the regulations promulgated thereunder regarding the exclusion
of performance-based compensation from the limit on corporate deductibility of
compensation paid to certain executive officers.
(c) It is expressly contemplated that the Board may amend
the Plan in any respect the Board deems necessary or advisable to provide
optionees with the maximum benefits provided or to be provided under the
provisions of the Code and the regulations promulgated thereunder relating to
employee Incentive Stock Options and/or to bring the Plan and/or Options
granted under it into compliance therewith.
(d) Rights and obligations under any Stock Award granted
before amendment of the Plan shall not be altered or impaired by any amendment
of the Plan, unless: (i) the Company requests the consent of the person to
whom the Stock Award was granted; and (ii) such person consents in writing.
14. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on May 13, 2001. No
Stock Awards may be granted under the Plan while the Plan is suspended or after
it is terminated.
(b) Rights and obligations under any Stock Awards granted
while the Plan is in effect shall not be altered or impaired by suspension or
termination of the Plan, except with the consent of the person to whom the
Stock Award was granted.
15. EFFECTIVE DATE OF PLAN.
The Plan shall become effective as determined by the Board,
but no Stock Awards granted under the Plan shall be exercised unless and until
the Plan has been approved by the stockholders of the Company and, if required,
an appropriate permit has been issued by the Commissioner of Corporations of
the State of California.
10.
<PAGE> 1
Exhibit 10.35
FIRST AMENDMENT TO COLLABORATION AGREEMENT
This amendment (the "Amendment") is made effective as of the 27th day
of September, 1996 by and between COR THERAPEUTICS, INC., a Delaware
Corporation having its principal place of business at 236 East Grand Avenue,
South San Francisco, California, U.S.A. 94080 ("COR") and ORTHO PHARMACEUTICAL
CORPORATION, a Delaware Corporation having its principal place of business at
U.S. Route 202, P.O. Box 300, Raritan, New Jersey, U.S.A. 08869-0692 ("Ortho"),
each on behalf of itself and its Affiliates.
RECITALS
1. COR and Ortho entered into a Collaboration Agreement dated
December 21, 1993 (the "Collaboration Agreement").
2. Under Section 3.5 of the Collaboration Agreement, Ortho has a
one time option to extend the Research Term for an additional two (2) years
beyond the initial three (3) year term by giving notice to COR of exercise of
such option at least ninety (90) days prior to the third anniversary of the
Effective Date.
3. The Parties now wish to amend certain terms under which the
Research Term of the Collaboration Agreement may be extended.
ARTICLE 1. AMENDMENTS
1.1 All defined terms in the Collaboration Agreement shall have
the same meaning in this Amendment as recited in the Collaboration Agreement,
unless otherwise expressly recited herein.
1.2 This Amendment shall serve as a notice under Section 3.5 of
the Collaboration Agreement that Ortho exercises its option to extend the
Research Term of the Collaboration Agreement for an additional two (2) years
beyond the initial three (3) year Research Term.
1.3 In paragraph 4.1, the sentence which reads, "In the event
Ortho exercises its option to extend the Research Term for an additional two
(2) years pursuant to Section 3.5, Ortho shall pay to COR research fees of
$2,500,000 on the third anniversary of the Effective Date and $2,500,000 on the
fourth anniversary of the Effective Date," is deleted in its entirety and
replaced with the following new sentence:
"In the event Ortho exercises its option to extend the
Research Term for an additional two (2) years pursuant to
Section 3.5, Ortho shall pay to COR research fees of
$2,400,000 on the third anniversary of the Effective Date."
1
<PAGE> 2
1.4 Notwithstanding the provisions in Section 3.4, COR shall only
be obligated to commit a total of [*]. Ortho's obligation to provide
Scientific FTE support for the Research pursuant to Section 3.4 shall continue
in full force and effect during the Research Term.
1.5 A new Section 3.10 shall be added to Article 3 of the
Collaboration Agreement as follows:
"3.10 ORTHO'S OPTION TO TERMINATE THE RESEARCH TERM. Ortho
shall have the right to terminate the Research Term, without
cause, upon the fourth anniversary of the Effective Date by
giving notice to COR of such termination at least ninety (90)
days prior to the fourth anniversary of the Effective Date.
If Ortho terminates the Research Term pursuant to this Section
3.10, Ortho shall not be entitled to a refund of any portion
of the amount Ortho has paid to COR as research fees pursuant
to Section 4.1."
1.6 The definition of the term "Research Term" in Section 1.56 of
the Collaboration Agreement shall be amended to read as follows:
"1.56 "RESEARCH TERM" means the period commencing on the
Effective Date and ending on the first to occur of (i)
termination of this Agreement by either party under Section
15.2 or (ii) December 21, 1998 (or December 21, 1997, if Ortho
exercises its right to terminate the Research Term without
cause pursuant to Section 3.10). The Parties, however, may
extend the Research Term beyond December 21, 1998 by mutual
agreement."
1.7 This Amendment 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.
1.8 The Parties hereby agree to amend the Collaboration Agreement
pursuant to Section 18.3 of the Collaboration Agreement on the foregoing terms.
Except as expressly stated in this Amendment, the Parties' rights and
obligations, including the obligations of Johnson & Johnson as a guarantor,
under the Collaboration Agreement shall continue in full force and effect.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
2
<PAGE> 3
IN WITNESS WHEREOF, the Parties have executed this Amendment in
duplicate originals by their proper officers as of the date and year first
written above.
COR THERAPEUTICS, INC. ORTHO PHARMACEUTICAL
CORPORATION
By: /s/ By: /s/
---------------------------------- ----------------------------------
R. Lee Douglas Eric P. Milledge
Title: V.P. Corporate Development Title: President
------------------------------- -------------------------------
3
<PAGE> 1
Exhibit 10.36
AMENDMENT NO.1
TO THE AGREEMENT
BETWEEN
COR THERAPEUTICS, INC.
AND
ELI LILLY AND COMPANY
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Amended Agreement Section Page
- ------------------------- ----
<S> <C> <C>
2.14a "COR Option Product" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.15a "COR Product" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.21a "First Human Dose" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2lb "Generically Equivalent Product" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.26a "Lilly Product" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.32 "Patent Right" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.44a "Specific PAI Agent" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.44b "Specific New Chemistry Compound" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.45a "Terminated Co-Development Products" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1a Membership of Steering Committee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4a Membership of Operating Committees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.5 Information and Reports Following the Research Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
4.5a COR Information and Reports Following the Research Term . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.5b Development of Specific New Chemistry Compounds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.5c Development of Specific PAI Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.5d Responsibilities of Agreed Third Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.11 Termination of Certain Development Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.8 Commercialization of Non Co-Developed Products by Lilly . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.9 Commercialization of Non Co-Developed Products by COR . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
9.9 cGMP Compliance and QA Audits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
13.7 Additional Payment by Lilly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
13.8 Additional Payment by COR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
13.19 Royalty on Products Developed by COR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
13.20 Royalty on Lilly Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
14.5 Terminated Co-Development Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
14.6 COR Option Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14.7 COR Products and Specific New Chemistry Compounds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14.8 Lilly Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
15.1 Patentable Inventions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
15.9 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
15.10 Enforcement of Lilly Patent Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
16.1 Licenses to COR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
16.2 Licenses to Lilly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
16.3 Disclosure of Information by Lilly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
i
<PAGE> 3
TABLE OF CONTENTS
(continued)
<TABLE>
<S> <C> <C>
16.4 Disclosure of Information by COR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
16.5 Transfer of IND . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
16.6 Transfer of USAN Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
16.7 No Assurances Under Third Party Intellectual Property Rights . . . . . . . . . . . . . . . . . . . . . . . . 21
17.1 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
17.2 Publicity Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
19.1 Indemnification by Lilly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
19.3 Indemnification by COR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
</TABLE>
APPENDICES
APPENDIX 1 - [*]
APPENDIX 2 - [*]
APPENDIX 3 - [*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
ii
<PAGE> 4
AMENDMENT NO.1
TO THE AGREEMENT
BETWEEN
COR THERAPEUTICS, INC.
AND
ELI LILLY AND COMPANY
THIS AMENDMENT No.1 is entered into as of the 18 day of November,
1996, ("Amendment Effective Date") by and between COR THERAPEUTICS, INC., a
Delaware corporation ("COR") and ELI LILLY AND COMPANY, an Indiana corporation
("Lilly").
RECITALS
WHEREAS, COR and Lilly entered into a Research, Option, and License
Agreement dated May 1, 1991 (the "Original Agreement") for the research,
development, and commercialization of certain platelet aggregation inhibitor
agents that was superseded and terminated by a Collaboration Agreement
effective May 28, 1993, (the "Agreement"); and
WHEREAS, COR exercised its right to extend the Research Term until
April 30, 1996; and
WHEREAS, Lilly elected to terminate its rights to develop certain
Collaboration Compounds; and
WHEREAS, under this Amendment, the parties (i) confirm their
respective rights to perform continuing research and development within the
field of Collaboration Compounds (and, with respect to certain categories of
compounds, for COR to have the right to do so in collaboration with a third
party effective immediately and Lilly to have the right to do so in
collaboration with a third party effective [*]), and (ii) allocate to each other
[*] to commercialize [*] within the category of Collaboration Compounds; and
WHEREAS, in particular, under this Amendment, COR has [*] to: (a) [*]
as to which Lilly terminated co-development under the original Agreement (as
defined below, the "Terminated Co-Development Products"), (b) [*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 5
[*] Specific PAI Agents (as defined below) that COR designates prior to [*] (as
defined below, the "COR Option Products"), and (c) any additional Specific PAI
Agents which involve [*] (these are particular "Specific New Chemistry
Compounds", as defined below). Effective [*] either COR or Lilly can receive
exclusive rights to other Specific PAI Agents by [*] of the compound in
question (these products being referred to herein as "COR Products" and "Lilly
Products", respectively). All Collaboration Compounds other than Specific PAI
Agents remain subject to the existing terms of the Agreement (i.e., with each
of COR and Lilly retaining rights of co-development, co-promotion, etc.).
Compounds which are not within the definition of Collaboration Compounds under
the Agreement remain outside the scope of the Agreement; and
WHEREAS, in addition to the foregoing, this amendment clarifies
certain matters related to the termination of the Parties' collaborative
research.
NOW, THEREFORE, in consideration of the foregoing and the covenants
and promises contained in this Amendment, COR and Lilly hereby amend the
Agreement as follows:
1. Section 2.14a shall be inserted following Section 2.14 as follows:
2.14a "COR OPTION PRODUCT" means a Specific PAI Agent which is
designated by COR pursuant to Section 4.5a and [*] such compounds at any time.
As used herein, (i) [*] which have the [*] shall be treated as a [*] and (ii)
the designation of the [*] COR Option Product shall include [*]. Upon
designation by COR, a COR Option Product shall be excluded from the definitions
of Collaboration Compound and Product.
2. Section 2.15a shall be inserted following Section 2.15 as follows:
2.15a "COR PRODUCT" means a Specific PAI Agent to which COR obtains
exclusive rights on or after [*] by designation pursuant to Section 4.5c. As
used herein, (i) [*] which have the [*] shall be treated as a [*] and (ii) the
designation of the [*] COR Product shall include [*]. COR Products designated
pursuant to Section 4.5c shall be excluded from the definitions of
Collaboration Compound and Product.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 6
3. Section 2.21a shall be inserted following Section 2.21 as follows:
2.21a "FIRST HUMAN DOSE" means the first dose administered to a
human subject according to a clinical plan consistent with the dosing company's
regular practice for clinical trials designed to support regulatory approval in
any country.
4. Section 2.2lb shall be inserted following Section 2.21 as follows:
2.21b "GENERICALLY EQUIVALENT PRODUCT" means a product containing
the same active specie as a Product, Lilly Product, COR Product, COR Option
Product, Specific New Chemistry Compound, or a Terminated Co-Development
Product, the making, using or selling of which (i) is not authorized by COR or
by Lilly as applicable and (ii) either (a) cannot be prevented or stopped by
COR or by Lilly, relying on the COR Patent Rights or Lilly Patent Rights, after
negotiation or adjudication to a court of final resort, or (b) in the exercise
of the Patent owner's reasonable judgment, would not be prevented or stopped by
negotiation or adjudication.
[*] shall not be deemed Generically Equivalent Products.
5. Section 2.26a shall be inserted following Section 2.26 as follows:
2.26a "LILLY PRODUCT" means those Specific PAI Agents to which Lilly
obtains exclusive rights after [*] by designation pursuant to Section 4.5c. As
used herein, (i) [*] which have the [*] shall be treated as a [*] and (ii) the
designation of the [*] a Lilly Product shall include [*]. Lilly Products
designated pursuant to Section 4.5c shall be excluded from the definitions of
Collaboration Compound and Product.
6. Section 2.32 shall be deleted in its entirety and shall be replaced
with the following:
2.32 "PATENT RIGHT" means a patent or patent application, and all
divisions, continuations, continuations in part, reissues, extensions and
foreign counterparts thereof, and supplemental protection certificates related
thereto, that is owned or controlled by COR or by Lilly and is based on an
invention made on or before the end of the Research Term, at least one claim of
which covers the making, using or selling of a Collaboration Compound.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 7
7. Section 2.44a shall be inserted following Section 2.44 as follows:
2.44a "SPECIFIC PAI AGENT" means a [*] which has an [*] as measured
by [*] assays described in Appendix 1 and either (i) is conceived, discovered,
synthesized or developed by COR or Lilly and is within the scope of a claim of
a patent or patent application (or any division, continuation,
continuation-in-part, reissue, extension or foreign counterpart thereof) that
is based on an invention which is reduced to practice prior to the end of the
Research Term or (ii) as to which rights were acquired by COR or Lilly from a
third party prior to [*] on an absolute or contingent basis. As used herein, an
invention of a Specific PAI Agent shall have been "reduced to practice" if any
compound within any claim of the patent or patent application covering such
invention has been synthesized or otherwise made and shown to be a [*]. As
used herein, (i) [*] which have the [*] shall be treated as a [*] and (ii) the
designation of the [*] as a Specific PAI Agent shall include [*]. As used
herein, [*].
8. Section 2.44b shall be inserted following Section 2.44a as follows:
2.44b "SPECIFIC NEW CHEMISTRY COMPOUND" means a Specific PAI Agent,
which compound (i) [*] and (ii) either (a) is conceived, discovered,
synthesized or developed by COR and is within the scope of a claim of a patent
or patent application (or any division, continuation, continuation-in-part,
reissue, extension or foreign counterpart thereof) that is based on an
invention which is reduced to practice between [*] and [*] or (b) as to which
rights were acquired by COR from a third party between [*] and [*], on an
absolute or contingent basis. As used herein, an invention of a Specific New
Chemistry Compound shall have been "reduced to practice" if any compound within
any claim of the patent or patent application covering such invention has been
synthesized or otherwise made and shown to be a [*]. As used herein, (i) [*]
which have the [*] shall be treated as a [*] and (ii) the designation of the
[*] as a Specific New
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 8
Chemistry Compound shall include [*]. Specific New Chemistry Compounds
designated for development pursuant to Section 4.5b shall be excluded from the
definitions of Collaboration Compound and Product.
9. Section 2.45a shall be inserted following Section 2.45 as follows:
2.45a "TERMINATED CO-DEVELOPMENT PRODUCTS" means [*]. As used
herein, (i) [*] which have the same active specie shall be treated as [*] (ii)
the designation of the [*] as a Terminated Co-Development Product shall include
[*], and (iii) the [*] shall include the [*] and [*]. Terminated Co-Development
Products are excluded from the definitions of Collaboration Compound and
Product.
10. Section 3.la shall be inserted following Section 3.1 as follows:
3.1a MEMBERSHIP OF STEERING COMMITTEE. Following the Amendment
Effective Date, the Steering Committee shall no longer operate as a committee,
and decisions reserved to such committee shall be made by mutual agreement of
the Vice President of Cardiovascular Research of Lilly and the Vice President
of Research of COR, or the designee of each of them.
11. Section 3.4a shall be inserted following Section 3.4 as follows:
3.4a MEMBERSHIP OF OPERATING COMMITTEES. Following the Amendment
Effective Date, any Operating Committee shall no longer operate as a committee,
and decisions reserved to such committee shall be made by mutual agreement of
the Vice President of Cardiovascular Research of Lilly and the Vice President
of Research of COR, or the designee of each of them.
12. Section 4.5 shall be deleted in its entirety and shall be replaced
with the following:
4.5 INFORMATION AND REPORTS FOLLOWING THE RESEARCH TERM. Subject
to Sections 4.5a, 4.5b, 4.5c and 4.5d, at any point following the Research Term
that a Party believes a Collaboration Compound should be designated for
development, it shall submit such recommendation, together with all available
Information regarding such Collaboration Compound, to the Operating Committee
pursuant to Section 5.1 for a determination of whether such compound should be
selected for development as a
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
5
<PAGE> 9
Product. If the Operating Committee does not select such compound for
development, the Party desiring to develop such compound may proceed with
development, if it desires to do so, pursuant to Section 5.10 (including the
re-offer and royalty provisions contained therein) and shall notify the other
Party if such development is discontinued. Submission by a Party of a
recommendation for development under this Section 4.5 shall preclude the other
Party from subsequently designating such Collaboration Compound for development
under Sections 4.5a, 4.5b, or 4.5c, during the time period such Collaboration
Compound is being actively developed as a Co-Developed Product or under Section
5.10.
13. Section 4.5a shall be inserted following Section 4.5 as follows:
4.5a COR INFORMATION AND REPORTS FOLLOWING THE RESEARCH TERM. At
any point before [*] that COR believes a Specific PAI Agent, [*] should be
designated for development as a COR Option Product, it shall notify Lilly and a
mutually agreed third party, in writing, of such designation. The notice to
Lilly shall include identification of the compound [*]. Subject to prior
designation of such compound for development under Section 4.5 and subject also
to Section 4.5d, this notice shall constitute a designation of such compound as
a COR Option Product. Such notice, to be effective, must be provided to Lilly
and the third party prior to or substantially contemporaneously with the [*].
COR may, at its election, undesignate [*] as a COR Option Product and
substitute one compound for each undesignated compound, provided that COR may
not undesignate a compound after the [*] of such compound. Upon a decision by
COR and/or a licensee of COR to proceed with [*] of such COR Option Product [*],
the notice provided by COR to Lilly pursuant to this Section 4.5a shall be
updated to include [*]. COR may make up to [*] compounds substitutions under
this Section 4.5a. Once a compound has been undesignated by COR, such compound
may not be subsequently designated by COR. A designation by COR of a compound
as a COR Option Product shall not itself constitute the exercise of an option
to take a license for such compound under Section 16.1(d). Such option exercise
shall occur by means of an express notice of exercise by COR, which notice must
be provided to Lilly and the third party prior to [*] of a COR Option Product
shall be deemed an option exercise by COR even if no express election
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 10
was made, in which case COR shall provide [*]. COR may exercise its option to
take a license under Section 16.1(d) only as [*]; may not [*] covered by such
exercised option; and may not exercise such option after [*].
14. Section 4.5b shall be inserted following Section 4.5a as follows:
4.5b DEVELOPMENT OF SPECIFIC NEW CHEMISTRY COMPOUNDS. Between
April 30, 1996 and [*], substantially contemporaneously with [*] by COR, COR
shall notify, in writing, Lilly and a mutually agreed third party of such
administration. The notice to Lilly shall include identification of the
compound [*], and the notice to the third party shall include identification
of the compound [*] and shall constitute perfection of COR's rights to
exclusivity for that compound under Section 16.1(e), subject to prior
designation of such compound for development under Section 4.5 and subject
also to Section 4.5d and subject to royalty obligations as set forth in
Section 13.6. Upon a decision by COR and/or a licensee of COR to proceed with
[*], the notice provided by COR to Lilly pursuant to this Section 4.5b shall
be updated to include identification of the compound [*].
15. Section 4.5c shall be inserted following Section 4.5b as follows:
4.5c DEVELOPMENT OF SPECIFIC PAI AGENTS. Commencing [*],
substantially contemporaneously with administration of the [*] by either party,
such party shall notify, in writing, the other Party and a mutually agreed
third party of such administration. The notice to the other Party shall include
identification of the compound [*], and the notice to the third party shall
include identification of the compound [*] and, subject to prior designation
of the compound for development under Section 4.5 and subject also to Section
4.5d, shall constitute perfection of the notifying party's rights to
exclusivity for that compound under Section 16.1(g) or 16.2(d), as applicable,
subject to royalty obligations as set forth in Sections 13.6, 13.19 and 13.20,
and thereafter, such compound shall be excluded from the definitions of
Collaboration Compound and Product. Upon a decision by either party to proceed
with a [*], the notice
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 11
provided by either Party to the other Party pursuant to this Section 4.5c shall
be updated to include identification of the compound [*].
16. Section 4.5d shall be inserted following Section 4.5c as follows:
4.5d RESPONSIBILITIES OF AGREED THIRD PARTY. The Parties shall
agree on a third party to receive the notices and hold the information to be
disclosed to a mutually agreed third party pursuant to Sections 4.5a, 4.5b and
4.5c. Upon receipt of a notice by a Party of [*] of a compound or other claim
to exclusivity for a particular compound under Sections 4.5, 4.5a, 4.5b or
4.5c, the third party shall determine if it has already received a notice that
such compound is being actively developed by the other Party. The third party
shall, within ten business days, communicate to both Parties whether that
compound, by name, is or is not available for the notifying Party's development
at that time. No perfection of a Party's rights to exclusivity for a compound
under Sections 16.l(d), 16.l(e), 16.l(g) or 16.2(d), shall occur without such
clearance for development by the third party. COR shall bear the expenses
incurred in connection with the third party's services under this Agreement.
17. Section 5.11 shall be inserted following Section 5.10 as follows:
5.11 TERMINATION OF CERTAIN DEVELOPMENT PROGRAMS. Lilly hereby
confirms that it has terminated its rights to develop [*] and [*] pursuant to
Section 5.9 of the Agreement.
18. Section 7.8 shall be deleted in its entirety and shall be replaced
with the following:
7.8 COMMERCIALIZATION OF NON CO-DEVELOPED PRODUCTS BY LILLY. Lilly
agrees to exercise reasonable and diligent efforts toward developing and
commercializing products developed by it under this Agreement that are not Co-
Developed Products. Other than the responsibilities of COR determined by the
Joint Research Committee in accordance with Section 4.3, such development and
commercialization shall occur at the expense of Lilly. Such development and
commercialization shall be conducted in accordance with Lilly's internal
standards with respect to matters such as development timetables, expenditures,
pricing, promotion and advertising, taking into account relevant parameters
including market size, profit margins and competition. In connection with the
development of each Lilly Product, or Product that is not a Co-Developed
Product, Lilly shall provide to COR an annual report listing the general
efforts devoted
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 12
to that product for the year including the following information: a list of the
[*] completed during the year covered by the report, a list of the [*]
commenced or ongoing during the year covered by the report and a list of the
compounds taken out of development during the year covered by the report. The
obligation to provide such reports shall begin upon the First Human Dose for
such product and shall continue until (i) the first sale of such product, or
(ii) development is terminated. If such a product is introduced commercially,
Lilly shall thereafter advise COR promptly of each application filed by its for
regulatory approval of such product in a new country, and each related
regulatory approval that is obtained. In the event COR begins to participate in
development of a Product but terminates such participation in particular
countries or overall pursuant to Section 5.8, Lilly shall thereafter provide
the reports called for in this Section 7.8.
19. Section 7.9 shall be inserted following 7.8 as follows:
7.9 COMMERCIALIZATION OF NON CO-DEVELOPED PRODUCTS BY COR. COR
agrees to exercise reasonable and diligent efforts toward developing and
commercializing products developed by it under this Agreement that are not
Co-Developed Products, including Terminated Co-Development Products, COR Option
Products, Specific New Chemistry Compounds, and COR Products. Other than the
responsibilities of Lilly determined by the Joint Research Committee in
accordance with Section 4.3, such development and commercialization shall occur
at the expense of COR. Such development and commercialization shall be
conducted in accordance with COR's internal standards with respect to matters
such as development timetables, expenditures, pricing, promotion and
advertising, taking into account relevant parameters including market size,
profit margins and competition. In connection with the development of each
Terminated Co-Development Product, COR Option Product, Specific New Chemistry
Compound, COR Product, or Product that is not a Co-Developed Product, COR shall
provide to Lilly an annual report listing the general efforts devoted to that
product for the year including the following information: a list of the [*]
completed during the year covered by the report, a list of the [*] commenced or
ongoing during the year covered by the report and a list of the compounds taken
out of development during the year covered by the report. The obligation to
provide such reports shall begin upon the First Human Dose for such product and
shall continue until (i) the first sale of such product, or (ii) development of
such product is terminated. If such a product is introduced commercially, COR
shall thereafter advise Lilly promptly of each application filed by it for
regulatory approval of such product in a new country, and each related
regulatory approval that is obtained. In the event Lilly begins to participate
in development of a Product but terminated such participating in particular
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 13
countries or overall pursuant to Section 5.8, COR shall thereafter provide the
reports called for in this Section 7.9.
20. Section 9.9 shall be inserted following Section 9.8 as follows:
9.9 cGMP COMPLIANCE AND QA AUDITS. After the Amendment Effective
Date, Lilly shall not be responsible for the manufacture of COR Option
Products, COR Products, Specific New Chemistry Compounds or Terminated
Co-Development Products. Notwithstanding the previous sentence, after the
Amendment Effective Date, Lilly shall be responsible for the manufacture of
Products developed pursuant to Section 4.5 and for the completion of
manufacturing of the bulk [*] lots that were commenced during the Research
Term. During the first [*] the Amendment Effective Date, upon written request
to Lilly and at a mutually agreeable time during normal business hours, COR
shall have the right, with respect only to such manufacture of [*] to (i) have
representatives visit Lilly's or its subcontractors' manufacturing facilities,
as applicable, (ii) review Lilly's or its subcontractors' manufacturing,
operations and assess their compliance with cGMP and quality assurance
standards, and (iii) discuss any related issues with Lilly's or its
subcontractors' manufacturing and management personnel. During the first [*] the
Amendment Effective Date, Lilly shall cooperate and cause its subcontractor to
cooperate with any inspection by the FDA or other regulatory agency, including
but not limited to any inspection prior to approval of the NDA for a Terminated
Co-Development Product containing [*].
While it is not anticipated that the FDA or other regulatory agencies
will seek to inspect or review the manufacturing of [*] by Lilly or its
subcontractors after the expiration of [*] from the Amendment Effective Date,
all parties to this agreement acknowledge the right of these agencies to do so.
In view of such potential regulatory inspection or review, Lilly agrees not to
destroy any records directly relating to the manufacturing of [*] by Lilly or
its subcontractors without first notifying COR and giving COR a reasonable
opportunity to obtain such records. In the event that such a review or
inspection is requested, COR, Lilly and Lilly's subcontractors will (i) confer
with each other with respect to the best means to comply with any such agency
requests, and (ii) use their respective best efforts to comply with such
requests. COR shall bear the reasonable direct costs incurred by Lilly in
complying with this Section 9.9.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 14
21. Section 13.7 shall be deleted in its entirety and shall be replaced with
the following:
13.7 ADDITIONAL PAYMENT BY LILLY. COR acknowledges and agrees that as
of the Amendment Effective Date, Lilly has made all payments owed to COR under
this Section.
22. Section 13.8 shall be deleted in its entirety and shall be replaced with
the following:
13.8 ADDITIONAL PAYMENT BY COR. COR Shall pay to Lilly a single lump
sum of [*] to be paid upon [*] Product, COR Product, COR Option Product or
Terminated Co-Development Product containing as its active ingredient a PAI
Agent originally discovered by Lilly (the "Additional Payment Due Date"). COR
may, at its election, defer such payment up to [*] months after the Additional
Payment Due Date, provided, however, that interest will accrue on the amount
due at the rate of [*] per annum. Only a single payment of [*] plus interest,
if any, shall be required under this Section 13.8.
23. Section 13.19 shall be inserted following Section 13.18 as follows:
13.19 ROYALTY ON PRODUCTS DEVELOPED BY COR. COR shall pay to Lilly a
running royalty at a rate of (i) [*] of Royal-Bearing Sales of [*], and (ii)
[*] of Royalty-Bearing Sales of [*], COR Option Products, Specific New Chemistry
Compounds and COR Products for which exclusivity is perfected under Section
4.5d and Sections 4.5a, 4.5b or 4.5c. Such royalties shall be exclusive of
inventor law payments and shall be paid quarterly, on a country by country
basis, within sixty (60) days of the end of the relevant quarter, from the date
of the first commercial sale of such product in a particular country until the
later of ten (10) years from the first commercial sale in such country or the
last to expire of any Lilly Patent Rights granted before the end of that ten
(10)-year period in that country for which a Valid Claim thereof covers the
manufacture, use or sale of the product, subject to the following reduction:
The royalty rate in a given country shall be reduced by fifty percent
(50%) if (i) the patent coverage in such country expires before the end of the
ten (10) year period specified above, or (ii) a Generically Equivalent Product
is introduced following expiration of patent coverage in such country.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 15
Such royalties shall be subject to the provisions of Sections 13.9
through 13.13, 13.15, 13.17 and 13.18. For the purposes of this Section and
Sections 13.9 through 13.13, 13.15, 13.17 and 13.18, Royalty-Bearing Sales
shall include sales by COR of COR Option Products, COR Products, Specific New
Chemistry Compounds and Terminated Co-Development Products.
24. Section 13.20 shall be inserted following Section 13.19 as follows:
13.20 ROYALTY ON LILLY PRODUCTS. Lilly shall pay to COR a running
royalty at a rate of [*] of Royalty-Bearing Sales of Lilly Products for which
exclusivity is perfected under Sections 4.5c and 4.5d. Such royalties shall be
exclusive of inventor law payments and shall be paid quarterly, on a country by
country basis, within sixty (60) days of the end of the relevant quarter, from
the date of the first commercial sale of each compound in a particular country
until the later of ten (10) years from the first commercial sale in such
country or the last to expire of any COR Patent Rights granted before the end
of that ten (10)-year period in that country for which a Valid Claim thereof
covers the manufacture, use or sale of the product, subject to the following
reduction:
The royalty rate in a given country shall be reduced by fifty percent
(50%) if (i) the patent coverage on such compound in such country expires
before the end of the ten (10) year period specified above, or (ii) a
Generically Equivalent Product is introduced following expiration of patent
coverage for that compound in such country.
Such royalties shall be subject to the provisions of Sections 13.9
through 13.13, 13.15, 13.17 and 13.1.18.
25. Section 14.5 shall be inserted following Section 14.4 as follows:
14.5 TERMINATED CO-DEVELOPMENT PRODUCTS. The Parties agree that COR
shall have the exclusive right to research, develop, commercialize, market and
sell [*], [*], or both, independently or with any third party. Without limiting
the foregoing, COR shall have no obligation to disclose to Lilly any data or
information relating to [*] or [*] except as expressly provided under this
Agreement. The separate activities of COR with respect to Terminated
Co-Development Products, taken alone, shall not be deemed a violation of any
best efforts or other diligence obligation herein.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 16
26. Section 14.6 shall be inserted following Section 14.5 as follows:
14.6 COR OPTION PRODUCTS. The Parties agree that COR shall have an
option to obtain the exclusive right to develop, commercialize, market and sell
COR Option Products, independently or with any third party, pursuant to Section
16.1. Without limiting the foregoing, COR shall have no obligation to disclose
to Lilly any data or information relating to COR Option Products except as
expressly provided under this Agreement. The separate activities of COR with
respect to COR Option Products, taken alone, shall not be deemed a violation of
any best efforts or other diligence obligation herein.
27. Section 14.7 shall be inserted following Section 14.6 as follows:
14.7 COR PRODUCTS AND SPECIFIC NEW CHEMISTRY COMPOUNDS. The Parties
agree that COR shall have the exclusive right to develop, commercialize, market
and sell COR Products and Specific New Chemistry Compounds, independently or
with any third party, pursuant to Section 16.1. Without limiting the foregoing,
COR shall have no obligation to disclose to Lilly any data or information
relating to COR Products or Specific New Chemistry Compounds except as
expressly provided under this Agreement. The separate activities of COR with
respect to COR Products or Specific New Chemistry Compounds, taken alone, shall
not be deemed a violation of any best efforts or other diligence obligation
herein.
28. Section 14.8 shall be inserted following Section 14.7 as follows:
14.8 LILLY PRODUCTS. The Parties agree that Lilly shall have the
exclusive right to develop, commercialize, market and sell Lilly Products,
independently or with any third party, pursuant to Section 16.2. Without
limiting the foregoing, Lilly shall have no obligation to disclose to COR any
data or information relating to Lilly Products except as expressly provided
under this Agreement. The separate activities of Lilly with respect to Lilly
Products, taken alone, shall not be deemed a violation of any best efforts or
other diligence obligation herein.
29. Section 15.1 shall be deleted in its entirety and shall be replaced with
the following:
15.1 PATENTABLE INVENTIONS. The Parties intend to establish broad
patent protection for PAI Agents arising from the Research. If a patentable
invention is conceived in the course of and within the scope of the Research
and reduced to
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<PAGE> 17
practice during the Research Term. Lilly and COR shall discuss that invention
and the desirability of filing a United States patent application covering the
invention, as well as any foreign counterparts. Each Party shall provide the
other Party with copies of all preliminary invention disclosure documents which
disclose a PAI Agent conceived in the course of and within the scope of the
Research and reduced to practice during the Research Term.
Lilly shall own all inventions within the scope of the Research made
solely by its employees ("Lilly inventions"), and COR shall own all inventions
within the scope of the Research made solely by its employees ("COR
inventions"). All patent applications and patents on inventions made jointly by
employees of Lilly and employees of COR shall be owned jointly by COR and Lilly
("COR-Lilly inventions").
All patent filings on all inventions within the scope of the Research
made solely by employees of Lilly, and on inventions made jointly by employees
of Lilly and employees of COR, shall be prepared, filed, prosecuted and
maintained worldwide by a third-party patent counsel acceptable to COR and
Lilly. COR shall have the ultimate responsibility for such filings, and COR
shall bear all expenses incurred in filing and prosecuting Lilly and COR-Lilly
patents under this Section. COR or its designee shall provide to Lilly copies
of invoices on third-party patent expenses incurred under this Section.
COR or its designee shall provide to Lilly drafts of any patent
application which discloses a PAI Agent conceived in the course of and within
the scope of the Research and reduced to practice during the Research Term,
prior to filing that application in the United States, allowing adequate time
for review and comment by Lilly if possible. COR shall not be obligated to
delay the filing of any patent application, however it shall use its best
efforts to incorporate into the draft the comments and suggestions of Lilly
such that, to the greatest extent possible, all patent applications on Lilly
and COR-Lilly inventions represent a consensus position by Lilly and COR. Lilly
shall maintain any such patent application in confidence, pursuant to Section
17.1.
COR or its designee shall keep Lilly fully informed of patent
prosecution efforts on patentable inventions made jointly or separately,
conceived in the course of and within the scope of the Research and reduced to
practice during the Research Term. COR or its designee shall provide Lilly with
timely notice and copies of failed patent applications, official actions and
proposed responses pending in the United States and foreign prosecution of
these patentable inventions, allowing adequate time for review and comment by
Lilly, and with respect to Lilly and COR-Lilly inventions, shall use its
14
<PAGE> 18
best efforts to incorporate into any proposed response the comments and
suggestions of Lilly regarding these prosecution efforts such that, to the
greatest extent possible, all patent submissions on Lilly and COR-Lilly
inventions represent a consensus position by Lilly and COR. COR or its designee
shall, on a quarterly or more frequent basis, report to Lilly on the status of
the patent applications and patents for which it has primary responsibility
under this Section.
On Lilly and COR-Lilly inventions under this Section, COR shall not,
without the prior written consent of Lilly, authorize the third-party patent
counsel to make any amendments to a draft or filed patent application or patent
for which it has primary responsibility under this Section, if such amendment
would reduce the written description in the application, or narrow the scope of
pending claims, or if its action would have the effect of reducing the
enforceable duration of the patent term of any aspect of the invention. COR
shall have complete discretion with regard to the filing and prosecution of its
solely owned inventions under this Section.
If a party decides not to prosecute, file or maintain an application or
patent on its invention, or on a joint invention, in any country, it shall give
the other Party reasonable notice to this effect; after that notice, the other
Party may, at its expense, prosecute, file or maintain the application or
patent.
30. Section 15.9 shall be inserted following Section 15.8 as follows:
15.9 LITIGATION.
(a) DEFENSE. If the use of the Lilly Patent Rights or Lilly
Know-how results in a claim for patent infringement against COR in connection
with the sale by COR of [*], a COR Option Product, a COR Product, or a Specific
New Chemistry Compound, the party having notice of the claim shall promptly
notify the other Party in writing. The notice shall set forth the facts of the
claim in reasonable detail. COR shall have the primary right, but not the
obligation, to defend against and settle such claim. Lilly shall cooperate with
COR at COR's request and expense in such defense and shall have the right to be
represented by counsel of its own choice and at Lilly's expense. If COR shall
fail to defend against such claim within a period of one hundred twenty (120)
days after receiving written notice of such claim, Lilly shall have the right
to defend by counsel of Lilly's own choice and COR shall have the right, at its
own expense, to be represented by counsel of its own choice.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
15
<PAGE> 19
(b) ROYALTY REDUCTION. If, as a result of settlement procedures or
litigation COR is required to pay the third party a royalty or make any payment
of any kind for the right to use the Lilly Patent Right or Lilly Know-how in a
particular country, exclusive of inventor law payments, COR may deduct, from
the amount of royalties owed to Lilly in connection with the same country,
fifty percent (50%) of the amount of the royalty or such other amount payable
to Lilly up to, but no more than, fifty percent (50%) of the amounts otherwise
payable to Lilly in connection with sales in that particular country.
31. Section 15.10 shall be inserted following Section 15.9 as follows:
15.10 ENFORCEMENT OF LILLY PATENT RIGHTS. If any patent in the Lilly
Patent Rights relating to [*], a COR Option Product, a COR Product, or a
Specific New Chemistry Compound, is infringed by a third party, the party to
this Agreement first having knowledge of such infringement shall promptly
notify the other in writing. The notice shall set forth the facts of that
infringement in reasonable detail.
(a) COR shall have the primary right, but not the obligation, to
institute, prosecute, and control any action or proceeding with respect to
third party infringement of the Lilly Patent Rights relating to [*], a COR
Option Product, a COR Product, or a Specific New Chemistry Compound, by counsel
of its own choice. Lilly agrees to be joined as a party plaintiff and to give
COR, at COR's request, reasonable-assistance and authority to file and
prosecute the suit. Lilly shall have the right, at its own expense, to be
represented in that action by counsel of its own choice. If COR fails to bring
an action or proceeding within a period of [*] or otherwise having knowledge of
that infringement, or if the infringement relates solely to Lilly Patent Rights
which do not relate to [*], a COR Option Product, a COR Product, or a Specific
New Chemistry Compound, Lilly shall have the right to bring and control any
such action by counsel of its own choice, and COR shall have the right to be
represented in any such action by counsel of its own choice at its own expense.
(b) COR shall retain any damages or other monetary awards recovered
in favor of COR and/or Lilly in connection with third party infringement of the
claims relating to [*] COR Option Products, Specific New Chemistry Compounds or
COR Products if COR brings and prosecutes the action through to a final
judgment. To the extent any damages or other monetary awards are recovered in
favor of COR and/or Lilly in connection with third party infringement of the
Lilly Patent Rights, and COR has
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
16
<PAGE> 20
brought and prosecuted the action, COR shall be reimbursed for its costs and
expenses of the litigation and any remaining amounts shall belong to Lilly.
(c) No settlement or consent judgment or other voluntary final
disposition of a suit under this Section 15.10 may be entered into without the
joint consent of COR and Lilly, which consent shall not be unreasonably
withheld.
32. Section 16.1 shall be deleted in its entirety and shall be replaced with
the following:
16.1 LICENSES TO COR. In consideration of the payments and commitments
made by COR to Lilly, Lilly grants to COR, subject to the terms and conditions
of this Agreement:
(a) An exclusive (except as to Lilly), fully-paid worldwide
license under Lilly Patent Rights for COR to discover and develop Products, to
manufacture and have manufactured Products as provided in Section 9.8, and to
import, use, offer for sale and sell Co-Promoted Products within the Field
within the Co-Promotion Territory;
(b) An exclusive (except as to Lilly) license, with right to
sublicense, under Lilly Patent Rights for COR to conduct research on Specific
PAI Agents;
(c) An exclusive (even as to Lilly) worldwide license, with the
right to sublicense, under Lilly Patent Rights, to develop, manufacture, have
manufactured, import, use, offer for sale and sell Terminated Co-Development
Products for all human and animal therapeutic indications, subject to the
royalty obligations set forth in Section 13.19;
(d) An option to an exclusive (even as to Lilly) worldwide
license, with the right to sublicense, under Lilly Patent Rights for [*], COR
Option Products, for COR to develop, manufacture, have manufactured, import,
use, offer to sell and sell COR Option Products for all human and animal
therapeutic indications, exercisable, with respect to each such product, in the
manner set forth in Section 4.5a, prior to the earlier of the [*], subject to
the provisions of Section 4.5b and 4.5d, and the royalty obligations set forth
in Section 13.19;
(e) An exclusive (even as to Lilly) worldwide license, with
the right to sublicense, under Lilly Patent Rights to develop, manufacture,
have manufactured,
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 21
import, use, offer to sell and sell Specific New Chemistry Compounds for all
human and animal therapeutic indications, subject to the royalty obligations
set forth in Section 13.19;
(f) A nonexclusive, fully-paid, worldwide license, under the
Lilly Know-how and Project Information to discover, develop, manufacture, have
manufactured, import, use, offer for sale and sell Products within the Field
during the Research Term, and for any and all purposes after April 30, 1996,
subject only to Articles 4.4, 4.5 and 17 hereof. Upon the Amendment Effective
Date, COR may grant sublicenses under this Section 16.1(f) for Terminated Co-
Development Products, COR Option Products, Specific New Chemistry Compounds and
COR Products. Commencing [*], COR may grant sublicenses under this Section
16.1(f) for any and all purposes; and
(g) Commencing [*], a co-exclusive worldwide license with the
right to sublicense under Lilly Patent Rights to develop, manufacture, have
manufactured, import, use, offer for sale and sell COR Products for all human
and animal therapeutic indications subject to the royalty obligations set forth
in Section 13.19. Commencing upon [*] of a compound within the scope of Lilly
Patent Rights and subject to the provisions of Section 4.5b, under the
direction of COR or a COR licensee, said co-exclusive license shall be
exclusive (even as to Lilly) subject to the royalty obligations set forth in
Section 13.19.
The license granted in Section 16.1(a) shall not be sublicensable by COR
without the consent of Lilly except to Affiliates owned 80% or more by COR.
Lilly grants no licenses herein under the Lilly Patent Rights except with
respect to Products, Terminated Co-Development Products, COR Option Products,
and Collaboration Compounds, and for the purpose of implementing the provisions
of this Agreement.
Appendix 2 hereto sets forth a list of patents and patent applications,
together with a list of invention disclosure statements received by Lilly's
patent department, from which the Lilly Patent Rights referenced in this
Section 16.1 flow.
If COR's rights with respect to a Product terminate as provided in
Section 6.3, COR's license, under Lilly Patent Rights, with respect to such
Product in such country shall terminate and Lilly shall have an exclusive
license, with right to sublicense, under COR Patent Rights, to discover,
develop, manufacture, have manufactured, use and sell such Product within the
Field within such country.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
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<PAGE> 22
COR shall not be obligated to re-offer Terminated Co-Development
Products, COR Option Products, COR Products or Specific New Chemistry Compounds
to the collaboration as contemplated by Section 5.10.
33. Section 16.2 shall be inserted following Section 16.1 as follows:
16.2 LICENSES TO LILLY. In consideration of the payments and
commitments made by Lilly to COR, COR grants to Lilly, subject to the terms and
conditions of this Agreement:
(a) An exclusive (except as to COR), fully-paid worldwide
license, with right to sublicense, under COR Patent Rights, for Lilly to
discover, develop, manufacture, have manufactured, import, use, offer for sale
and sell Products within the Field;
(b) An exclusive (except as to COR) license, under COR Patent
Rights for Lilly to conduct research on Specific PAI Agents;
(c) A nonexclusive, fully-paid, worldwide license, under COR
Know-how and Project Information to discover, develop, manufacture, have
manufactured, import, use, offer for sale and sell Products within the Field
during the Research Term, and for any and all purposes thereafter, subject only
to Articles 4.4, 4.5 and 17 hereof. Commencing [*], Lilly may grant sublicenses
under this Section 16.2(c); and
(d) Commencing [*] a co-exclusive worldwide license with the
right to sublicense under Co Patent Rights to discover, develop, manufacture,
have manufactured, import, use, offer for sale and sell Lilly Products for all
human and animal therapeutic indications, subject to the royalty obligations
set forth in Section 13.22. Commencing upon [*] of a compound within the scope
of COR Patent Rights and subject to the provisions of Sections 4.5c and 4.5d,
under the direction of Lilly or a Lilly licensee, said co-exclusive license
shall be exclusive (even as to COR) subject to the royalty obligations set
forth in Section 13.20.
COR grants no licenses herein under COR Patent Rights except with
respect to Products, Lilly Products and Collaboration Compounds, and for the
purpose of implementing the provisions of this Agreement.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
19
<PAGE> 23
Appendix 3 hereto sets forth a list of patents and patent applications,
together with a list of invention disclosure statements received by COR's
patent department, from which the COR Patent Rights referenced in this Section
16.2 flow.
If Lilly's rights with respect to a Product terminate as provided in
Section 6.3, Lilly's license, under COR Patent Rights, with respect to such
Product in such country shall terminate and COR shall have an exclusive
license, with right to sublicense, under Lilly Patent Rights, to discover,
develop, manufacture, have manufactured, use and sell such Product within the
Field within such country. If Lilly's rights to a Product terminate as provided
in Section 5.9, such license shall be worldwide.
Lilly shall not be obligated to re-offer Lilly Products to the
collaboration as contemplated by Section 5.10.
34. Section 16.3 shall be inserted following Section 16.2 as follows:
16.3 DISCLOSURE OF INFORMATION BY LILLY. Promptly after execution of
this Amendment, but no later than 45 days after the full execution of this
Amendment, Lilly shall disclose to COR all Project Information and confidential
and/or proprietary chemical substances, biological materials, technical
information, clinical and other information (including commercial information),
data and assays which Lilly owns or controls relating to Terminated Co-
Development Products, non-specific PAI Agents and Specific PAI Agents, including
but not limited to all data generated in connection with the manufacturing and
other processes and final reports for all studies performed in connection with
these compounds. As to any such study related to the research or development of
Terminated Co-Development Products, non-specific PAI Agents and Specific PAI
Agents for which no final report has been prepared, whether or not such study
was completed, Lilly will prepare such final report for delivery to COR no
later than 45 days after the full execution of this Amendment, and COR shall
bear the reasonable direct costs incurred by Lilly in preparing such report.
Lilly shall cause its employees and consultants to participate with COR's
employees and consultants in any discussion of the information and reports
disclosed by Lilly to COR hereunder until the expiration of 90 days after the
full execution of this Amendment. Any reports due to Lilly hereunder shall be
delivered both in hard copy and electronically readable form.
35. Section 16.4 shall be inserted following Section 16.3 as follows:
16.4 DISCLOSURE OF INFORMATION BY COR. Promptly after execution of
this Amendment but no later than 45 days after the fall execution of this
Amendment, COR
20
<PAGE> 24
shall disclose to Lilly all Project Information and confidential and/or
proprietary chemical substances, biological materials, technical information,
clinical and other information (including commercial information), data and
assays which COR owns or controls relating to non-specific PAI Agents and
Specific PAI Agents, including but not limited to all data generated in
connection with the manufacturing and other processes developed in connection
therewith, and reports and final reports for all studies performed in
connection with any of these compounds. As to any such study related to the
research or development of non-specific PAI Agents and Specific PAI Agents for
which no report or final report has been prepared, whether or not such study
was completed, COR will prepare such final report for delivery to Lilly no
later than 45 days after the full execution of this Amendment, and Lilly shall
bear the reasonable direct costs incurred by COR in preparing such report. COR
shall cause its employees and consultants to participate with Lilly's employees
and consultants in any discussion of the information and reports disclosed by
COR to Lilly hereunder until the expiration of 90 days after the full execution
of this Amendment. Any reports due to Lilly hereunder shall be delivered both
in hard copy and electronically readable form.
36. Section 16.5 shall be inserted following Section 16.4 as follows:
16.5 TRANSFER OF IND. Promptly following execution of this Amendment,
Lilly shall take all necessary action to transfer to COR the sponsorship and
ownership of all Investigational New Drug Applications and foreign equivalents
filed in connection with Terminated Co-Development Products.
37. Section 16.6 shall be inserted following Section 16.5 as follows:
16.6 TRANSFER OF USAN APPLICATION. Promptly following execution of
this Amendment, Lilly shall take all necessary action to transfer to COR the
sponsorship and ownership of all United States Adopted Name applications and
foreign equivalents filed in connection with Terminated Co-Development
Products.
38. Section 16.7 shall be inserted following Section 16.6 as follows:
16.7 NO ASSURANCES UNDER THIRD PARTY INTELLECTUAL PROPERTY RIGHTS. The
Parties disclaim any express or implied warranty of freedom from infringement
of third party intellectual property rights.
21
<PAGE> 25
39. Section 17.1 shall be deleted in its entirety and shall be replaced with
the following:
17.1 CONFIDENTIALITY. Except as otherwise provided in writing by the
Parties, both Parties shall use their best efforts to retain in confidence and
shall not use, except as provided in this Agreement, all information relating
to the Research. Such information may, however, be disclosed insofar as such
disclosure is necessary (where possible, with advance notice to the other party
and with adequate safeguards for confidentiality) to allow either party to
defend against litigation with a third party, to file and prosecute patent
applications, or to comply with governmental regulations or tax requirements,
or to advise a partner or potential partner of the rights and obligations of
the parties under this Agreement, provided neither Party shall use the other
Party's information in any patent application without prior written approval
from the other Party. Notwithstanding the foregoing, COR may, in its sole
discretion, publish and present the results of studies carried out with respect
to Terminated Co-Development Products, COR Option Products, COR Products and
Specific New Chemistry Compounds, and Lilly may publish and present the results
of studies carried out with the compound [*] with COR's prior written consent,
COR's consent not to be unreasonably withheld.
COR may disclose, under appropriate binders of confidentiality and in
its sole discretion, the terms of this Agreement, Lilly Patent applications,
Project Information and any other information disclosable under Section 16.3
relevant to Specific PAI Agents.
After [*], Lilly may disclose, under appropriate binders of
confidentiality and in its sole discretion, the terms of this Agreement, COR
Patent applications, Project Information and information disclosable under
Section 16.4 relevant to Specific PAI Agents.
Commencing [*], each of COR and Lilly may publish and present the results
of studies carried out with those compounds to which such Party has secured
exclusive rights pursuant to Section 4.5c.
The foregoing obligations of confidentiality and non-use shall not apply
to information which (i) is in the public domain, (ii) comes into the public
domain through no fault of the receiving Party, (iii) was known by the
receiving Party prior to disclosure under this Agreement as demonstrated by
written evidence generated at the time of
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
22
<PAGE> 26
claimed knowledge, or (iv) is disclosed to the receiving Party without an
obligation of confidentiality by a third party having a lawful right to make
the disclosure.
If a Party wishes to make a disclosure other than as provided for in
this Section 17.1 in furtherance of the objectives of the Agreement and
notwithstanding the provisions of Section 11.6, with the written approval of
both Parties, either Party may disclose confidential information concerning
Collaboration Compounds or Products obtained from the other Party under this
Agreement to a third party who has agreed in writing to be bound by the same or
similar obligations of confidence set forth in this Section, provided the third
party agrees not to use the confidential information without authorization from
the Party owning the information.
All obligations of confidentiality and non-use imposed upon the Parties
under this Agreement shall expire on the later of (i) ten (10) years from the
termination of the Research or (ii) expiration of all obligations of payment
under Article 13.
40. Section 17.2 shall be deleted in its entirety and shall be replaced with
the following:
17.2 PUBLICITY REVIEW. COR and Lilly will jointly discuss and agree,
based on the principles of this Section 17.2, on any statement to the public
regarding this Agreement or Collaboration Compounds or Products subject in each
case to disclosure otherwise required by law or regulation. Notwithstanding
Section 11.6, each Party shall have the right to make any statement to the
public as specified in Section 17.1. Except as provided in Section 17.1 with
respect to public statements, if either Party is required by law or regulation
to make a public disclosure or announcement concerning such topics, such Party
shall give reasonable prior advance notice of the proposed text of such
disclosure or announcement to the other Party for their review and comment. In
the discussion and agreement referred to above, the principles observed by COR
and Lilly will be: accuracy, the requirements for confidentiality under Section
17.1, and advantage a competitor of COR or Lilly may gain from any public or
Third Party statements under this Section 17.2, the requirements of disclosure
under any applicable securities laws, including those associated with public
offerings, and the standards and customs in the biotechnology and
pharmaceutical industries for such disclosures by companies comparable to COR
and Lilly.
23
<PAGE> 27
41. Section 19.1 shall be deleted in its entirety and shall be replaced with
the following:
19.1 INDEMNIFICATION BY LILLY. As to Lilly Products and Products
developed or promoted by Lilly, alone or with a third party, in countries where
such products are not Co-Promoted by the Parties pursuant to this Agreement:
(a) Lilly hereby agrees to save, defend and hold COR and its
agents and employees harmless from and against any and all suits, claims,
actions, demands, liabilities, expenses and/or loss, including reasonable legal
expense and attorneys' fees ("Losses") resulting directly or indirectly from
the manufacture, use, handling, storage, sale or other disposition of chemical
agents, Lilly Products or Products by Lilly, its Affiliates, agents or
sublicensees except to the extent such Losses result from the negligence or
wrongdoing of COR.
(b) In the event that COR is seeking indemnification under
Section 19.1(a), it shall inform Lilly of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit Lilly to assume
direction and control of the defense of the claim (including the right to
settle the claim solely for monetary consideration), and shall cooperate as
requested (at the expense of Lilly) in the defense of the claim.
42. Section 19.3 shall be deleted in its entirety and shall be replaced with
the following:
19.3 INDEMNIFICATION BY COR. As to Terminated Co-Development Products,
COR Option Products, COR Products, Specific New Chemistry Compounds and
Products developed or promoted by COR, alone or with a third party, in
countries where such products are not Co-Promoted by the Parties pursuant to
this Agreement:
(a) COR hereby agrees to save, defend and hold Lilly and its
agents and employees harmless from and against any and all suits, claims,
actions, demands, liabilities, expenses and/or loss, including reasonable legal
expense and attorneys' fees ("Losses") resulting directly or indirectly from
the manufacture, use, handling, storage, importation, offer for sale, sale or
other disposition of chemical agents, COR Option Products, Terminated Co-
Development Products, COR Products, Specific New Chemistry Compounds designated
for development under Section 4.5b, or Products by COR, its Affiliates, agents
or sublicensees except to the extent such Losses result from the negligence or
wrongdoing of Lilly.
24
<PAGE> 28
(b) In the event that Lilly is seeking indemnification under
Section 19.3(a), it shall inform COR of a claim as soon as reasonably
practicable after it receives notice of the claim, shall permit COR to assume
direction and control of the defense of the claim including the right to settle
the claim solely for monetary consideration), and shall cooperate as requested
(at the expense of COR) in the defense of the claim).
43. Except as otherwise amended herein, the Agreement shall remain in full
force and effect.
This Amendment shall be effective as of the date first written above.
25
<PAGE> 29
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment.
COR THERAPEUTICS, INC. ELI LILLY AND COMPANY
By: /s/ By: /s/
------------------------------- -------------------------------
Charles J. Homey, M.D. August L. Watanabe, M.D.
Executive Vice President- Executive Vice President,
Title: Research & Development Title: Science and Technology
---------------------------- ----------------------------
APPENDIX 1 - [*]
APPENDIX 2 - [*]
APPENDIX 3 - [*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
26
<PAGE> 30
APPENDIX 1 - [*]
[*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
<PAGE> 31
APPENDIX 2 - [*]
[*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
<PAGE> 32
APPENDIX 3 - [*]
[*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
<PAGE> 1
Exhibit 10.37(i)
AMENDMENT NO. 1
TO
COLLABORATION AGREEMENT
THIS AMENDMENT NO. 1 is made effective as of the 9th day of May, 1994
(the "Effective Date") by and between COR THERAPEUTICS, INC., a Delaware
corporation having its principal place of business at 256 East Grand Avenue,
South San Francisco, California, U.S.A. 94080 ("COR") and KYOWA HAKKO KOGYO
CO., LTD., a Japanese corporation having its principal place of business at 1-
6-1 Ohtemachi, Chiyoda-ku, Tokyo, Japan ("Kyowa Hakko").
RECITALS
1. COR and Kyowa Hakko entered into that certain Collaboration
Agreement, dated as of November 30, 1992 (the "Collaboration Agreement") for
collaborative research to conduct a drug discovery program for [*]. The
Collaboration Agreement further provides for the development and
commercialization of certain agents resulting from the research program.
2. In the course of its research under the Collaboration Agreement,
Kyowa Hakko has identified [*] that show apparent activity [*] or their [*], but
that would not otherwise qualify for [*] under the terms of such Agreement
because they do not produce a positive result in a Screening Assay (as defined
in the Collaboration Agreement).
3. The parties desire to amend the Collaboration Agreement as
provided herein, to treat such additional compounds as Compounds for the
purposes of such Agreement and to allocate between the parties the economic
benefits of such development and commercialization.
NOW, THEREFORE, the parties agree as follows:
AGREEMENT
1.1 DEFINITIONS. For the purposes of this Amendment No. 1, the
following terms will have the following meanings:
(a) The term "Additional Compound" shall mean the following
two [*].
(b) The term "Additional Product" shall mean any form or
dosage of an Additional Compound for human pharmaceutical or any other use.
(c) All other capitalized terms shall have the meanings
assigned to them in the Collaboration Agreement.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
1.
<PAGE> 2
1.2 ADDITIONAL COMPOUNDS. The Additional Compounds shall be treated
as Compounds for the purposes of the Collaboration Agreement except, in
addition to the terms and conditions of the Collaboration Agreement, COR shall
pay to Kyowa Hakko [*] royalty on Net Sales of any Additional Products, to be
[*] . Upon request by either party, the parties shall negotiate in good faith
[*] for the applicable Additional Product. Such royalty shall be payable as
follows:
(a) For sales of Additional Products in the United States,
such royalty shall be paid in U.S. Dollars quarterly within 60 days after the
end of each calendar quarter. Each royalty payment shall be accompanied by a
statement of such royalties showing the Net Sales of each Additional Product
during such quarter, the calculation of the royalties due, and showing evidence
of payment as to any taxes paid on Kyowa Hakko's behalf.
(b) For sales of Additional Products in the JV Territory, such
royalty shall be deemed to be an [*] of Kyowa Hakko, and shall be [*] basis
from Net Sales for purposes of determining Marketing Profits, as provided in
Article 7 of the Collaboration Agreement.
(c) Such royalties shall terminate as to each Additional
Product and as to each country in the JV Territory and the United States upon
the later to occur of (i) the last to expire of a patent for an Additional
Product in such country or (ii) 10 years after the first commercial sale of
such Additional Product in such country.
1.3 OTHER COMPOUNDS. If, during the Research Term and the one year
period thereafter, either of the parties identifies as a result of the Research
a compound which appears to satisfy the definition of a Compound except that it
does not produce a positive result in a Screening Assay, the parties agree to
discuss in good faith additional amendments to the Collaboration Agreement as
appropriate.
1.4 AMENDMENT TO COLLABORATION AGREEMENT. Pursuant to Section 16.14
of the Collaboration Agreement, the parties hereby amend the Collaboration
Agreement as provided herein. Such agreement, as amended, shall continue in
full force and effect. This Amendment shall be governed by the laws of the
State of California.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 in
duplicate originals by their proper officers as of the date and year first
above written.
COR THERAPEUTICS, INC. KYOWA HAKKO KOGYO CO. LTD.
By: /s/ By: /s/
------------------------- -------------------------
Vaughn M. Kailian Toshio Komuro
President and CEO Director, Pharmaceuticals R&D Center
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
2.
<PAGE> 1
Exhibit 10.37(ii)
AMENDMENT NO. 2
TO
COLLABORATION AGREEMENT
THIS AMENDMENT NO. 2 is made effective as of the 13th day of July, 1994
(the "Amendment Date") by and between COR THERAPEUTICS, INC., a Delaware
corporation having its principal place of business at 256 East Grand Avenue,
South San Francisco, California, U.S.A. 94080 ("COR") and KYOWA HAKKO KOGYO
CO., LTD., a Japanese corporation having its principal place of business at 1-
6-1 Ohtemachi, Chiyoda-ku, Tokyo, Japan ("Kyowa Hakko").
RECITALS
1. COR and Kyowa Hakko entered into that certain Collaboration
Agreement, dated as of November 30, 1992 and amended as of May 9, 1994 (the
"Collaboration Agreement") for collaborative research to conduct a drug
discovery program for [*]. The Collaboration Agreement further provides for
the development and commercialization of certain agents resulting from the
research program.
2. As contemplated by Section 2.4 of the Collaboration Agreement,
the parties now desire to [*] and the parties therefore desire to amend the
Collaboration Agreement as provided herein, to define which compounds
identified by such assay will be included in the Collaboration Agreement.
3. Prior to the Amendment Date, COR identified certain compounds as
a result of COR screening its own libraries using [*] and the parties now
desire to amend the Collaboration Agreement to treat such compounds as
Compounds for the purposes of such Agreement, on the terms set forth herein.
NOW, THEREFORE, the parties agree as follows:
AGREEMENT
1.1 DEFINITIONS. For the purposes of this Amendment No. 2, the
following terms will have the following meanings:
(a) The term "Additional Assay" shall mean that certain [*] as
more fully described on Exhibit A hereto.
(b) The term "Additional COR Compound" shall mean those
compounds identified by COR in the course of its screening activities prior to
the Amendment Date (including any Additional COR Compounds identified as a
result of COR's screening of natural product compound libraries which have
shown activity in the Additional Assay, but as to which structure elucidation
is not complete) that are further specified in Exhibit B hereto.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
1.
<PAGE> 2
(c) The term "COR Compound" shall mean any compound identified
by COR, including without limitation those identified by COR from any third
party library, at any time after the Amendment Date and prior to the one-year
anniversary of the Research Term, that would otherwise meet the definition of
Compound, except that it produces a positive result in the Additional Assay,
but not in a Screening Assay.
(d) The term [*] shall mean the [*] the structures of which
are provided in Exhibit C hereto, and their respective [*] .
(e) The term "Kyowa Hakko Natural Compound" shall mean any
compound contained in any natural product library of Kyowa Hakko that would
otherwise meet the definition of Compound, except that it produces a positive
result in the Additional Assay, but not in a Screening Assay.
(f) The term "Kyowa Hakko Synthetic Compound" shall mean any
compound of Kyowa Hakko other than a Kyowa Hakko Natural Compound that would
otherwise meet the definition of Compound, except that it produces a positive
result in the Additional Assay, but not in a Screening Assay.
(g) All other capitalized terms shall have the meanings
assigned to them in the Collaboration Agreement.
1.2 ADDITIONAL ASSAY. The parties hereby add the Additional Assay to
the Research commencing on the Amendment Date, with both parties to perform
screening with such Assay, as provided herein. Prior to the Amendment Date,
COR has identified Additional COR Compounds that show activity in the
Additional Assay, as specified in Exhibit B, which COR has agreed to include in
the Research in accordance with the terms of Section 1.3 hereof.
1.3 CONTRIBUTION OF ADDITIONAL COR COMPOUNDS.
(a) The Additional COR Compounds shall be deemed to be
Compounds for the purposes of the Collaboration Agreement, except as explicitly
provided in Sections 1.3 and 1.4 hereof. Kyowa Hakko shall pay to COR [*]
royalty on Net Sales of any Product incorporating any Additional COR Compound,
to be [*]. Upon request by either party, the parties shall negotiate in good
faith [*] for such Product. Such royalty shall be payable as follows:
(i) For sales of such Products in the Joint Territory,
such royalty shall be deemed to be an [*] of COR, and shall be [*] from Net
Sales for purposes of determining Marketing Profits, as provided in Article 7
of the Collaboration Agreement.
(ii) For sales of such Products in the Asian Territory,
such royalty shall be paid in accordance with the mechanisms of Section 9.6 of
the Collaboration Agreement.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
2.
<PAGE> 3
(iii) Such royalties shall terminate as to each such
Product and as to each country in the Joint Territory and the Asian Territory
upon the later to occur of (i) the last to expire of a patent for such Product
in such country or (ii) 10 years after the first commercial sale of such
Product in such country.
1.4 SCREENING OF COR COMPOUNDS BY COR
(a) Any COR Compound shall be deemed to be a Compound for the
purposes of the Collaboration Agreement, except as explicitly provided herein.
(b) Notwithstanding anything to the contrary in this Amendment,
if any COR Compound or Additional COR Compound is [*] such COR Compound or
Additional COR Compound shall be excluded from the Collaboration Agreement and
COR shall have the right to develop and commercialize such COR Compound or
Additional COR Compound independent of Kyowa Hakko, without obligation of any
kind to Kyowa Hakko. Kyowa Hakko hereby assigns to COR all of its right, title
and interest in and to any and all inventions and patents and patent
applications deriving therefrom that Kyowa Hakko may conceive or reduce to
practice with respect to such COR Compounds or Additional COR Compounds at any
time after the Amendment Date and prior to the one-year anniversary of the
Research Term.
(c) Notwithstanding anything to the contrary in this Amendment,
if a specific COR Compound or Additional COR Compound (other than [*]) is known
to Kyowa Hakko and is being actively developed by Kyowa Hakko at the time of
its identification by COR, the parties shall discuss in good faith whether to
develop and commercialize such COR Compound or Additional COR Compound under
the Collaboration Agreement. If the parties decide not to develop and
commercialize such COR Compound or Additional COR Compound under the
Collaboration Agreement, COR shall have the right to develop and commercialize
such COR Compound or Additional COR Compound independent of Kyowa Hakko,
without obligation of any kind to Kyowa Hakko. In such event, Kyowa Hakko
hereby assigns to COR all of its right, title and interest in and to any and
all inventions and patents and patent applications deriving therefrom that
Kyowa Hakko may conceive or reduce to practice with respect to such COR
Compounds or Additional COR Compounds at any time after the Amendment Date and
prior to the one-year anniversary of the Research Term.
(d) Kyowa Hakko may decline to conduct any further work
related to a COR Compound or Additional COR Compound, in both cases subject to
Section 1.4(b) or (c). If Kyowa Hakko decides not to conduct any further work
with respect to such Compound, it shall so inform COR and transfer to COR all
of its data and information developed with respect to such Compound.
(e) For the purposes of this Amendment and upon demonstration by
Kyowa Hakko to COR's reasonable satisfaction, a COR Compound or Additional COR
Compound shall be considered (i) "known" to Kyowa Hakko if, prior to its
identification by COR, Kyowa Hakko was aware of the specific molecule and
possessed a physical embodiment of such molecule and
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
3.
<PAGE> 4
(ii) in "active development" by Kyowa Hakko if it is a subject of a drug
discovery and development program formally recognized by Kyowa Hakko.
(f) To the extent a COR Compound or Additional COR Compound is
deemed to be a Compound under the Collaboration Agreement, any patents or
patent applications covering such COR Compound, Additional COR Compound or the
use thereof, based on inventions conceived or reduced to practice by either of
the parties or by the parties jointly at any time after the Amendment Date and
prior to the one-year anniversary of the Research Term, shall be deemed to be
Program Patents under the Collaboration Agreement.
1.5 SCREENING OF KYOWA HAKKO SYNTHETIC COMPOUNDS BY KYOWA HAKKO. If,
during the Research Term and the one-year period thereafter, Kyowa Hakko
identifies as a result of the Research a Kyowa Hakko Synthetic Compound, such
Kyowa Hakko Synthetic Compound shall be deemed to be a Compound for the
purposes of the Collaboration Agreement. If Kyowa Hakko reasonably believes
that any of its synthetic organic libraries contain any compound already under
active development by Kyowa Hakko, it shall not be obligated to screen such
compounds. Any patents or patent applications covering such Kyowa Hakko
Synthetic Compound or the use thereof, based on inventions conceived or reduced
to practice by either of the parties or by the parties jointly at any time
after the Amendment Date and prior to the one-year anniversary of the Research
Term, shall be deemed to be Program Patents under the Collaboration Agreement.
1.6 SCREENING OF KYOWA HAKKO NATURAL COMPOUNDS BY KYOWA HAKKO.
(a) If, during the Research Term and the one year period
thereafter, Kyowa Hakko identifies as a result of the Research a Kyowa Hakko
Natural Compound, such Kyowa Hakko Natural Compound shall be deemed to be a
Compound for the purposes of the Collaboration Agreement, except as explicitly
provided herein.
(b) To the extent a Kyowa Hakko Natural Compound is considered a
Compound under the Collaboration Agreement, any patents or patent applications
covering such Kyowa Hakko Natural Compound or the use thereof, based on
inventions conceived or reduced to practice by either of the parties or by the
parties jointly at any time after the Amendment Date and prior to the one-year
anniversary of the Research Term, shall be deemed to be Program Patents under
the Collaboration Agreement.
(c) Notwithstanding anything to the contrary in this Amendment,
if any Kyowa Hakko Natural Compound is [*], such Compound shall be excluded
from the Collaboration Agreement and each party shall have the right to develop
and commercialize such Compound independent of the other party, consistent with
its ownership rights thereto.
(d) Notwithstanding anything to the contrary in this Amendment,
if a specific Kyowa Hakko Natural Compound (other than [*]) is known to Kyowa
Hakko and is being actively developed by Kyowa Hakko at the time of its
identification by Kyowa Hakko, the parties shall discuss in good faith whether
to develop and commercialize such Kyowa Hakko
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
4.
<PAGE> 5
Natural Compound under the Collaboration Agreement. If the parties decide
not to develop and commercialize such Kyowa Hakko Natural Compound as a
Compound under the Collaboration Agreement, each party shall have the right
to develop and commercialize such Compound independent of the other party,
consistent with its ownership rights thereto; provided however, that Kyowa
Hakko will not develop or commercialize such Compound for the prevention or
treatment of restenosis following angioplasty [*].
(e) For the purposes of this Amendment and upon demonstration by
Kyowa Hakko to COR's reasonable satisfaction, a Kyowa Hakko Natural Compound
shall be considered (i) "known" to Kyowa Hakko, if, prior to its identification
by COR, it was aware of the specific molecule and possessed a physical
embodiment of such molecule and (ii) in "active development" by Kyowa Hakko if
it is a subject of a drug discovery and development program formally recognized
by Kyowa Hakko.
1.7 AMENDMENT TO AMENDMENT NO. 1, COLLABORATION AGREEMENT.
References in Amendment No. 1 to the "JV Territory" are hereby amended to read
the "Joint Territory." Pursuant to Section 16.14 of the Collaboration
Agreement, the parties hereby amend the Collaboration Agreement and Amendment
No. 1 as provided herein. Such agreement, as amended, shall continue in full
force and effect. This Amendment shall be governed by the laws of the State of
California.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 2 in
duplicate originals by their proper officers as of the date and year first
above written.
COR THERAPEUTICS, INC. KYOWA HAKKO KOGYO CO. LTD.
By: /s/ By: /s/
------------------------- -------------------------
Vaughn M. Kailian Toshio Komuro
President and CEO Director, Pharmaceuticals
R&D Center
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
5.
<PAGE> 6
Exhibit A
[*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
6.
<PAGE> 7
Exhibit B
[*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
7.
<PAGE> 8
Exhibit C
[*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
8.
<PAGE> 1
Exhibit 10.37(iii)
AMENDMENT NO. 3
TO
COLLABORATION AGREEMENT
THIS AMENDMENT NO. 3 is made effective as of the 1 day of August,
1995 by and between COR THERAPEUTICS, INC., a Delaware corporation having its
principal place of business at 256 East Grand Avenue, South San Francisco,
California, U.S.A. 94080 ("COR") and KYOWA HAKKO KOGYO CO., LTD., a Japanese
corporation having its principal place of business at 1-6-1 Ohtemachi, Chiyoda-
ku, Tokyo, Japan ("Kyowa Hakko").
RECITALS
1. COR and Kyowa Hakko entered into that certain Collaboration
Agreement, dated as of November 30, 1992 and as amended effective May 9, 1994
and July 13, 1994 (the "Collaboration Agreement") for collaborative research to
conduct a drug discovery program for [*]. The Collaboration Agreement further
provides for the development and commercialization of certain agents resulting
from the research program.
2. As contemplated by Section 2.4 of the Collaboration Agreement,
the parties added a [*] to the Research pursuant to the amendment dated July
13, 1994 ("Amendment No. 2").
3. The parties now desire to add a [*] compounds, and the parties
therefore desire to amend the Collaboration Agreement as provided herein to
define which compounds identified by such assay will be included in the
Collaboration Agreement.
NOW, THEREFORE, the parties agree as follows:
AGREEMENT
1.1 REVISED DEFINITIONS. For the purposes of this Amendment No. 3
and the Collaboration Agreement, the following terms will have the following
meanings:
(a) The definition of the term "Additional Assay" shall be
revised to mean either the [*] described on Exhibit A to Amendment No. 2 or the
[*] described on Exhibit A to this Amendment No. 3.
(b) The definition of the term "COR Compound" shall be revised
to reference "either" Additional Assay rather than "the" Additional Assay.
(c) The definition of the term "Kyowa Hakko Natural Compound"
shall be revised to reference "either" Additional Assay rather than "the"
Additional Assay.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
1.
<PAGE> 2
(d) The definition of the term "Kyowa Hakko Synthetic
Compound" shall be revised to reference "either" Additional Assay rather than
"the" Additional Assay.
(e) All other capitalized terms used in this Amendment No. 3
shall have the meanings assigned to them in the Collaboration Agreement.
1.2 ADDITIONAL ASSAY. The parties hereby add the second Additional
Assay (the [*]) to the Research, commencing on the effective date of this
Amendment No. 3. Both parties will perform screening with such assay, and
compounds identified from such screening will be included in the collaboration
on the terms provided in Sections 1.4 through 1.6 of Amendment No. 2.
1.3 AMENDMENT TO COLLABORATION AGREEMENT. Pursuant to Section 16.14
of the Collaboration Agreement, the parties hereby amend the Collaboration
Agreement as provided herein. Such agreement, as amended, shall continue in
full force and effect. This amendment shall be governed by the laws of the
State of California.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 3 in
duplicate originals by their proper officers as of the date and year first
above written.
COR THERAPEUTICS, INC. KYOWA HAKKO KOGYO CO. LTD.
By: /s/ By: /s/
--------------------------- -------------------------
Vaughn M. Kailian Toshio Komuro
President and CEO Director, Pharmaceuticals R&D Center
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
2.
<PAGE> 3
Exhibit A
[*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
3.
<PAGE> 1
Exhibit 10.37(iv)
AMENDMENT NO. 5
TO
COLLABORATION AGREEMENT
THIS AMENDMENT NO. 5 TO COLLABORATION AGREEMENT (the "Amendment") is
made effective as of the 17th day of December, 1996 (the "Amendment Date") by
and between COR THERAPEUTICS, INC., a Delaware corporation having its principal
place of business at 256 East Grand Avenue, South San Francisco, California,
U.S.A. 94080 ("COR") and KYOWA HAKKO KOGYO CO., LTD., a Japanese corporation
having its principal place of business at 1-6-1 Ohtemachi, Chiyoda-ku, Tokyo,
Japan ("Kyowa Hakko").
RECITALS
1. COR and Kyowa Hakko entered into that certain Collaboration
Agreement, dated as of November 30, 1992, as amended effective May 9, 1994,
July 13, 1994, August 1, 1995 and November 10, 1995 (the "Collaboration
Agreement") for collaborative research to conduct a drug discovery program for
[*]. The Collaboration Agreement further provides for the development and
commercialization of certain agents resulting from the research program.
2. [*]. COR has dedicated substantial resources to the evaluation
of [*].
3. Kyowa Hakko has the capability to [*] and has substantial
development experience with respect to [*], as well as substantial
manufacturing expertise.
4. The parties recognize that Kyowa Hakko has not currently
established cGMP bulk production capabilities with respect to [*] and that
Kyowa Hakko may elect not to establish such capabilities, in which case certain
rights of Kyowa Hakko under this Amendment will cease as further provided
herein. In light of this fact, the parties also agree to work together to
establish third party manufacturing relationships and recognize that COR will
have the right to approve all third party manufacturing arrangements and have
the ongoing right to establish second source and backup manufacturing
arrangements with respect to [*] as provided in this Amendment.
5. Prior to the Amendment Date, the parties have entered into a
Material Transfer and Confidentiality Agreement dated May 7, 1996 (the
"Material Transfer Agreement"), a Nonbinding Letter of Intent and a letter
agreement providing an exclusive negotiating period, all pertaining to the
subject matter of this Amendment.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
1.
<PAGE> 2
6. The parties now desire to add the [*] (as defined below) to the
collaboration on the terms provided in this Amendment.
For purposes of this Amendment, all references to "paragraphs" shall
refer to paragraphs in this Amendment and all references to "sections" shall
refer to sections in the Collaboration Agreement.
NOW, THEREFORE, the parties agree as follows:
AGREEMENT
1. DEFINITIONS.
1.1 REVISED DEFINITIONS.
(a) As used in this Amendment, the following terms shall apply
not only to "Products" or "Collaboration Products," as set forth in the
Collaboration Agreement, but also to [*] (as defined below):
Allowable Expenses
Cost of Goods Shipped
Marketing Profits
Net Sales
Patent Costs
(b) The term "Development Costs" shall be revised to mean the
direct costs, incurred by a party or for its account, of developing (i) a
Collaboration Product which costs are aimed at achieving Regulatory Approval of
such Product in the Joint Territory or (ii) [*] Product which costs are aimed
at achieving Regulatory Approval of such [*] Product anywhere in the world,
including in each case clinical trials and regulatory affairs, but excluding
any allocation of overhead expenses and Clinical Supply Costs for [*] Products.
1.2 NEW DEFINITIONS. For the purposes of this Amendment, the
following new terms shall have the meaning set forth herein:
(a) "CLINICAL SUPPLY COSTS" means the costs specifically
identifiable to manufacture and supply of bulk [*] for preclinical and clinical
use worldwide. Clinical Supply Costs include but are not limited to all
payments made to the Third Party manufacturer(s) described in Paragraph 5.2(a)
in consideration of such Third Party's agreement to supply bulk [*], such as
fees for directly related services (e.g., [*] and documentation), upfront
payments, capacity reservations fees, etc., except to the extent such payments
are allocable to commercial supply by such Third Party. Clinical supply
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
2.
<PAGE> 3
costs shall not include technology transfer fees which are
charged by a Third Party manufacturer. Clinical Supply Costs shall also not
include any of Kyowa Hakko's costs incurred in planning or constructing a
manufacturing facility as contemplated in Paragraph 5.3(b)(ii)(1). Clinical
Supply Costs shall include royalties and other payments made to Third Parties
in respect of proprietary rights to the extent applicable to the manufacture of
bulk [*] for clinical use, but not proprietary rights applicable to other
aspects of research and development pertaining to [*], such as [*].
(b) "COR [*] KNOWHOW" means all Information useful in the [*]
Field which COR Controls during the term of this Agreement.
(c) "COR [*] PATENTS" means the rights granted by any
governmental authority under a Patent which covers a method, apparatus,
material or manufacture useful in the [*] Field, which Patent is owned or
Controlled by COR or its Affiliates, excluding, however, [*] Program Patents.
(d) "COR [*] TECHNOLOGY" means the COR [*] Patents and COR [*]
Knowhow, collectively.
(e) "KYOWA HAKKO [*] KNOWHOW" means all Information useful in
the [*] Field which Kyowa Hakko Controls during the term of this Agreement.
(f) "KYOWA HAKKO [*] PATENTS" means the rights granted by any
governmental authority under a Patent which covers a method, apparatus,
material or manufacture useful in the [*] Field, which Patent is owned or
Controlled by Kyowa Hakko or its Affiliates, excluding, however, [*] Program
Patents.
(g) "KYOWA HAKKO [*] TECHNOLOGY" means the Kyowa Hakko [*]
Patents and Kyowa Hakko [*] Knowhow, collectively.
(h) "OPTION" shall have the meaning assigned in Paragraph
3.1(c).
(i) "[*]" means COR's [*] and which is the [*] provided by COR
to Kyowa Hakko prior to the Amendment Date. [*] as provided in Paragraph 2.6.
(j) "[*]" means the discovery, development, manufacture, use
and sale of [*] Products for all human and animal pharmaceutical uses,
including, but not limited to, the prevention or treatment of restenosis
following angioplasty, but excluding any diagnostic use.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
3.
<PAGE> 4
(k) "[*] INFORMATION" means (i) present and future
techniques, inventions, practices, methods, knowledge, knowhow, skill,
experience, test data including pharmacological, toxicological and clinical
test data, analytical and quality control data, marketing, pricing, cost, sales
and manufacturing data and descriptions relating to the [*] Field and (ii)
present and future compounds, compositions, assays and any biological materials
relating to the [*] Field.
(l) "[*] Products" means any form or dosage of a [*] for human
and animal pharmaceutical use, excluding any diagnostic use. The parties
acknowledge that [*] Products do not fall within the scope of the definition of
"Products" in the Collaboration, and that the class of [*] Products is separate
from the classes of Products and Collaboration Products.
(m) "[*]" means Patents and applications for Patents which
cover a method, apparatus, material or manufacture useful in the [*] Field and
the subject of which is an invention conceived or reduced to practice by either
of the parties or by the parties jointly in the course of their respective work
in the [*] Field during the term of the Material Transfer Agreement or this
Amendment. Any reference to a particular party's [*] Program Patents shall
include those [*] Program Patents owned by the party plus that party's interest
in [*] Program Patents that are jointly owned under this Amendment.
1.3 OTHER DEFINITIONS. All other capitalized terms used in this
Amendment shall have the meanings assigned to them in the Collaboration
Agreement.
2. [*] DEVELOPMENT.
2.1 [*] DEVELOPMENT PLAN.
(a) Pursuant to the Material Transfer Agreement, Kyowa Hakko
has commenced an Evaluation (as defined in such agreement) in the [*] Field
prior to the Amendment Date. Kyowa Hakko shall continue such work and the
parties shall carry out additional development in the [*] Field, as provided in
the [*] Development Plan attached as Exhibit A (the "[*] Development Plan"),
with the goal of creating one or more [*] produced using [*] with
the specifications described on Exhibit B. The Development Plan also calls for
the development of a [*] to be constructed by Kyowa Hakko using an [*] system
as agreed by the parties. The [*] Development Plan includes a timeline for
achieving specific milestones. The parties each agree to continue to carry out
the [*] Development Plan until such time as they achieve a [*] which complies
with the in vitro and in vivo performance criteria set forth in Exhibit B. The
obligation to continue work until such criteria are achieved shall survive any
termination of this Agreement pursuant to Paragraph 8.2, except that Kyowa
Hakko shall not be obligated to initiate efforts, or continue efforts with
respect to such [*] development if it terminates pursuant to Paragraph 8.2.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
4.
<PAGE> 5
(b) As provided in Paragraph 8.2, Kyowa Hakko will have an
opportunity to terminate this Amendment, including further work under the [*]
Development Plan, after [*].
(c) If Kyowa Hakko elects not to terminate this Amendment as
described in Paragraph 8.2, then the parties shall carry out the remainder of
the [*] Development Plan. The parties acknowledge that based on the results
from the first [*] COR may feel it is necessary to further optimize the [*]
before proceeding to prepare a U.S. IND as described in the Development Plan.
In such event, the parties shall endeavor in good faith to agree upon an
amended [*] Development Plan and budget to carry out such optimization. If
after [*] the parties have been unable to agree upon such a plan, either party
may elect to terminate this Amendment on the terms described in subparagraph
(d) below.
(d) In the event COR terminates this Amendment pursuant to
Paragraph 2.1(c) due to the parties' failure to agree on an amended [*]
Development Plan, Kyowa Hakko shall retain its licenses under Paragraphs 3.1(a)
and (b) in the Asian Territory, subject to royalties and a diligence obligation
as provided therein. COR shall retain its licenses under Paragraphs 3.2(a) and
(b) in the U.S. and the Joint Territory (without regard to the Option, which
will terminate), subject to a royalty payable to Kyowa Hakko equal to [*] of
Net Sales of [*] Products in the U.S. and the Joint Territory. The provisions
of Paragraph 2.4(c) below with respect to the duration and payment of royalties
shall apply equally to the payment of royalties under this Paragraph 2.1(d).
Also, the supply provisions of Paragraph 5.4 shall apply.
In the event of termination by Kyowa Hakko under Paragraph
2.1(c), the parties shall have the respective rights and obligations set forth
in Paragraph 8.2(b). At the time of any such termination by either party, each
party shall ensure that it is then in compliance with Paragraphs 5.10 and
7.1(d), as applicable.
2.2 [*] DEVELOPMENT. Except as otherwise provided in Paragraph 2.1
and the [*] Development Plan, all development of [*] Products shall be carried
out as follows. COR shall retain the exclusive right to carry out preclinical
and clinical development of [*] Products in the U.S. Kyowa Hakko shall have
the exclusive right to carry out preclinical and clinical development of [*]
Products in the Asian Territory, provided that it has not terminated this
Amendment as provided in Paragraph 8.2. So long as Kyowa Hakko retains the
Option, and following any exercise of the Option, [*] Products shall be subject
to joint preclinical and clinical development in the Joint Territory on the
same terms provided in Sections 3.1 to 3.5 of the Collaboration Agreement with
respect to Collaboration Products. However, if Kyowa Hakko's Option or license
rights in the Joint Territory have terminated, COR shall have the exclusive
right to carry out [*] development of [*] Products in the Joint Territory. The
parties expect that development of [*] Products will proceed initially in the
U.S., with subsequent development in the Joint Territory and Asian Territory
being organized based on prior work in the U.S. to the extent reasonably
practicable.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
5.
<PAGE> 6
2.3 COSTS OF DEVELOPMENT.
(a) The costs incurred by the parties in carrying out the [*]
Development Plan shall be borne as provided in the [*] Development Plan. For
Development Costs not allocated in the [*] Development Plan, Kyowa Hakko shall
bear all Development Costs pertaining to [*] Products in the Asian Territory,
and COR shall bear all Development Costs pertaining to [*] Products in the U.S.
So long as Kyowa Hakko retains the Option, and after any exercise of the
Option, [*] of the Development Costs pertaining to [*] Products in the Joint
Territory. If the Option expires, or Kyowa Hakko notifies COR in writing that
it will not exercise the Option, COR shall bear all such Development Costs
pertaining to [*] Products in the Joint Territory.
(b) Development Costs for [*] Products shall initially be
borne by the party incurring the expense, subject to reimbursement as provided
herein. Each party shall calculate and maintain records of its Development
Costs for activities performed by it in accordance with procedures to be agreed
upon between the parties. Any Development Costs which apply to more than one
country shall be allocated to relevant countries based upon estimated market
size for the specific indication being pursued. Each party shall report
quarterly to the other on its Development Costs, with such reports to be
submitted within 60 days after the end of each of the first three calendar
quarters and 90 days after the end of the calendar year. The parties shall
seek to resolve any questions related to such accounting statements within 90
days following receipt. In each calendar quarter, the party which incurs more
than its share (as provided in Paragraph 2.3(a) above) of the total Development
Costs for [*] Products in the applicable territory shall be reimbursed by the
other party an amount sufficient to cause each party's share of the Development
Costs to equal the share set forth in Paragraph 2.3(a) above, provided, however
that such reimbursement (to the extent not provided in kind in the course of
development) may be paid in cash or common stock of the reimbursing party. If
paid in common stock, the reimbursing party shall issue freely tradeable shares
valued as of the closing price of such stock on the most recent trading day
prior to the date shares are issued to the other party. Such reconciling
payment or issuance of shares shall be made within thirty (30) days of receipt
of the other party's quarterly report, as provided above.
2.4 INDEPENDENT DEVELOPMENT IN THE JOINT TERRITORY.
(a) Either party may elect to terminate funding [*]
Development Costs pertaining to development all [*] into [*] Products for the
Joint Territory, with [*] advance written notice and on the terms provided
in this paragraph. If either party terminates its funding, the other may
conduct and fund such development work alone or with one or more Third Parties.
The obligation of the terminating party to fund any development in the Joint
Territory shall terminate at the end of the [*] notice period. During the
notice period, the terminating party shall cooperate with the other party to
effect a smooth transition of development responsibilities, providing all
assistance necessary or useful to permit the other party to assume such
responsibilities.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
6.
<PAGE> 7
(b) If Kyowa Hakko terminates its funding of Development Costs
in the Joint Territory at any time as provided in this Paragraph 2.4, then its
rights to develop and commercialize [*] Products in the Joint Territory shall
terminate. If Kyowa Hakko has exercised the Option prior to such termination,
then all of Kyowa Hakko's obligations under this Amendment to pay for and/or
supply bulk [*] for use in the Joint Territory and elsewhere shall continue and
COR shall pay a manufacturing royalty to Kyowa Hakko equal to [*] of [*]
Products in the Joint Territory so long as Kyowa Hakko continues to meet the
foregoing supply obligations. If Kyowa Hakko has not exercised the Option
prior to such termination, then the Option will terminate as provided in
Paragraph 3.1(c)(iii), Kyowa Hakko will have no further obligation to supply,
or fund the purchase of, bulk [*] for use in the Joint Territory, and COR shall
have no royalty obligation to Kyowa Hakko with respect to the Joint Territory.
(c) Royalties payable by COR pursuant to Paragraph 2.4(b)
above shall terminate as to each [*] Product and as to each country in the
Joint Territory upon the later to occur of (i) the last to expire of a patent
for a [*] Product in such country or (ii) [*] after the first commercial sale
of such [*] Product in such country. Such royalties shall be paid quarterly
within 60 days after the end of each calendar quarter. Such royalties shall be
calculated on the basis of Net Sales of [*] Products in the local currency of
each country, and converted into U.S. Dollars and paid in U.S. Dollars on the
basis of the currency exchange rate published in the Wall Street Journal or
comparable newspaper of international circulation on the last business day of
the quarter in which such sales were made. In the event of Net Sales of [*]
Products being made in a currency as to which conversion into U.S. Dollars is
then blocked, COR shall make payment to Kyowa Hakko in such local currency in a
bank account designated by Kyowa Hakko. COR shall withhold any taxes on such
royalties required by law. Each royalty payment shall be accompanied by a
statement of such royalties showing the Net Sales of each [*] Product during
such quarter, the calculation of the royalties due, and showing evidence of
payment as to any taxes paid on Kyowa Hakko's behalf. Any refunds or rebates
of taxes paid to COR on behalf of Kyowa Hakko shall be remitted promptly by COR
to Kyowa Hakko. COR shall use reasonable diligence in the development and
marketing of [*] Products which are royalty-bearing under Paragraph 2.4(b).
(d) If COR terminates its funding of Development Costs in the
Joint Territory at any time as provided in this Paragraph 2.4, then its rights
to develop and commercialize [*] Products in the Joint Territory shall
terminate and Kyowa Hakko shall pay a royalty to COR equal to [*] of the Net
Sales of such [*] Product in the Joint Territory. The provisions of Paragraph
2.4(c) shall apply equally to the payment of royalties under this Paragraph
2.4(d).
2.5 NON-CARDIOVASCULAR INDICATIONS. The initial clinical studies of
[*] Products will be for use in cardiovascular indications. However, the
parties expect also to explore the use of [*] Products for other indications,
the first of which are likely to be [*] indications. The terms of this
Amendment applicable to development and commercialization of [*] products,
including
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
7.
<PAGE> 8
manufacture of bulk [*], shall apply equally to cardiovascular and
non-cardiovascular indications.
2.6 BACKUP [*]. If the parties agree that development or
commercialization of a [*] which is based upon the [*], including any [*] of
such [*], is not feasible or practical, and the parties desire to proceed with
development of an available alternative [*] and to which either COR or Kyowa
Hakko then holds rights, they may add such [*] to the definition of [*] by
mutual agreement.
3. LICENSES AND OPTION.
3.1 RIGHTS OF KYOWA HAKKO IN THE [*] FIELD. Effective as of the
Amendment Date, COR hereby grants to Kyowa Hakko the following:
(a) A nonexclusive, worldwide license under the COR [*]
Technology and COR's [*] Program Patents to research, develop, make, have made
and use, but not sell, [*] solely for the purposes of carrying out the [*]
Development Plan and supplying bulk [*] for preclinical use pursuant to
Paragraph 5.2(b)(i).
(b) A license under the COR [*] Technology and COR's [*]
Program Patents to make and have made bulk [*] for sale to the parties and/or
their sublicensee(s) in the Asian Territory and to make, have made, use, sell
and have sold [*] in the Asian Territory. Such license shall be exclusive with
respect to COR [*] Patents and COR's [*] Program Patents and non-exclusive with
respect to COR [*] Knowhow. Such license shall be subject to royalties as
provided in Paragraph 4.2 and Kyowa Hakko's continued funding of Clinical
Supply Costs for the U.S. as provided in Paragraph 5.2(b)(ii) and to the
requirement that Kyowa Hakko use reasonable diligence to develop and
commercialize [*] Products in the Asian Territory.
(c) A single, nontransferable option (the "OPTION") to obtain
the rights described in both subparagraphs (i) and (ii) below:
(i) A license under the COR [*] Technology and COR's
[*] Program Patents to make and have made bulk [*] for sale to the parties
and/or their sublicensee(s) in the Joint Territory, subject to Article 5 below,
and to make, have made, use, sell and have sold [*] Products in the Joint
Territory, subject to the same commercialization arrangements provided in
Articles 5 and 6 of the Collaboration Agreement with respect to Collaboration
Products. Such license shall be exclusive except as to COR with respect
to the rights to use, sell and have sold [*] Products under the COR [*] Patents
and COR's [*] Program Patents. Such license shall be non-exclusive with
respect to COR [*] Knowhow and with respect to the rights to make and have
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
8.
<PAGE> 9
made bulk [*] under the COR [*] Patents and COR's [*] Program Patents; and
(ii) A non-exclusive license under the COR [*]
Technology and COR's [*] Program Patents to make and have made bulk [*] for
sale to COR and/or its sublicensee(s) in the United States, subject to the
terms of Article 5 below.
(iii) This Option may only be exercised to acquire all of
the rights described in both (i) and (ii) above and not as to any subset of
such rights. The Option shall be exercisable by delivery of written notice to
COR at any time between the Amendment Date and the date thirty (30) days after
COR notifies Kyowa Hakko in writing of [*] of a [*] Product in any territory;
provided that COR will not deliver any such notice before the completion of [*]
of a [*] Product in any territory. The [*] shall be the [*] in which [*] is
applied to [*] in an appropriate [*]. In order to exercise the Option, Kyowa
Hakko must have, as of the date of exercise, (i) met its research and
development objectives described in the [*] Development Plan, (ii) met all of
its funding obligations under this Amendment, including but not limited to its
obligations to fund Development Costs worldwide and Clinical Supply Costs up to
the maximum amounts described in Paragraph 5.2(b)(ii), and (iii) undertaken in
a binding agreement with COR to build a facility and to manufacture and supply
all requirements for [*] in the U.S. and the Joint Territory in accordance with
a plan and timeline mutually agreed upon by COR and Kyowa Hakko and set forth
in such agreement, as further provided in Paragraph 5.3(b)(ii)(1).
3.2 RIGHTS OF COR IN THE [*] FIELD. Effective as of the Amendment
Date, Kyowa Hakko hereby grants to COR the following:
(a) A license under the Kyowa Hakko [*] Technology and Kyowa
Hakko's [*] Program Patents to make and have made bulk [*] for sale to the
parties and their sublicencee(s) in the United States and to make, have made,
use, sell and have sold [*] Products in the United States, subject to Kyowa
Hakko's Option under Paragraph 3.1(c)(ii) above to manufacture and supply bulk
[*] for sale to COR and/or its sublicensee(s) in the United States in
accordance with Article 5 below. Upon expiration or termination of the Option
or the license for U.S. manufacture to be granted upon exercise thereof, COR's
license shall be exclusive with respect to Kyowa Hakko [*] Patents and Kyowa
Hakko's [*] Program Patents and non-exclusive with respect to Kyowa Hakko [*]
Knowhow. During the term of the Option and the license to be granted upon
exercise thereof, COR's license shall be exclusive with respect to rights under
Kyowa Hakko [*] Patents and Kyowa Hakko's [*] Program Patents to use, sell and
have sold [*] Products in the United States, exclusive except as to Kyowa Hakko
with respect to rights under Kyowa Hakko [*] Patents and Kyowa Hakko's [*]
Program Patents to make and have made [*] Products for sale in the
United States, and
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
9.
<PAGE> 10
nonexclusive with respect to Kyowa Hakko [*] Knowhow. Such license shall be
[*] except as provided in Paragraph 3.4 below.
(b) A license under the Kyowa Hakko Technology and Kyowa
Hakko's [*] Program Patents to make and have made bulk [*] for sale to the
parties and their sublicensee(s) and to make, have made, use, sell and have
sold all [*] Products in the Joint Territory. Such license shall be exclusive
except as to Kyowa Hakko with respect to rights under Kyowa Hakko [*] Patents
and Kyowa Hakko's [*] Program Patents to make and have made [*] Products in the
Joint Territory (and, during the term of the Option and the license to be
granted upon exercise thereof, with respect to rights to use, sell and have
sold [*] Products in the Joint Territory). If the Option expires or
terminates, or the license in the Joint Territory to be issued upon exercise of
the Option is terminated, COR's license shall be exclusive even as to Kyowa
Hakko with respect to rights under the Kyowa Hakko [*] Patents and Kyowa
Hakko's [*] Program Patents to use, sell and have sold [*] Products in the
Joint Territory. Such license shall be non-exclusive with respect to Kyowa
Hakko [*] Knowhow. Such license shall be royalty-free except as provided in
Paragraph 3.4 and, upon exercise of the Option, subject to the
commercialization arrangements provided in the Collaboration Agreement.
3.3 SUBLICENSING. Kyowa Hakko shall have the right to sublicense any
of its rights under Paragraph 3.1 in the Asian Territory to any Third Party,
without the prior written consent of COR. COR shall have the right to
sublicense any of its rights under Paragraph 3.2 in the United States to any
Third Party, without the prior written consent of Kyowa Hakko. Any sublicense
of manufacturing rights shall be subject to Article 5 below. Neither party may
sublicense its rights under Paragraphs 3.1 or 3.2 in the Joint Territory
without the prior written consent of the other, except as follows.
(a) If Kyowa Hakko's Option expires or is terminated, or the
license to be granted upon exercise of the Option is terminated, COR shall have
the right to sublicense any of its rights under Paragraph 3.2 in the Joint
Territory to any Third Party, without the prior written consent of Kyowa Hakko.
(b) If COR's rights under Paragraph 3.2 in the Joint Territory
terminate pursuant to Paragraph 2.4, Kyowa Hakko shall have the right to
sublicense any of its rights under Paragraph 3.1 to make, have made, use, sell
or have sold [*] Products (but not to make or have made bulk [*] in the Joint
Territory, to any Third Party without the prior written consent of COR. In
such event, Kyowa Hakko may sublicense its rights to make or have made bulk [*]
for sale to Kyowa Hakko and/or its sublicensee(s) in the Joint Territory only
with the prior written consent of COR.
(c) Either party may sublicense its rights under Paragraphs
3.1 or 3.2 in the Joint Territory to the extent necessary to engage sales
agents as provided in Section 5.13 of the Collaboration Agreement.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
10.
<PAGE> 11
3.4 SUBLICENSES OF THIRD PARTY TECHNOLOGY. The licenses granted
herein include sublicenses under any technology applicable to the [*] Field
which has been, or during the term of this Amendment is, licensed by a party
from any Third Party and is within the Control of such party. [*], if
either party believes that technology applicable to the [*] Field and owned or
Controlled by a Third Party would be valuable or necessary to the collaboration
hereunder, the parties will consult regarding the licensing of such technology.
The parties agree that COR shall not be required to obtain Kyowa Hakko's
consent to obtain a license under technology in the United States and Kyowa
Hakko shall not be required to obtain COR's consent to obtain a license under
technology in the Asian Territory, provided that the licensing party provides
notice to, and consults with, the other party prior to executing any such
license agreement. So long as Kyowa Hakko retains its Option, or the license
to be granted upon exercise thereof, no license of Third Party technology
applicable to [*] Products in the Joint Territory shall be entered into except
by mutual consent of COR and Kyowa Hakko; no such license applicable to [*]
Products in the United States shall be entered into except with the consent of
COR; and no such license applicable to [*] Products in the Asian Territory
shall be entered into except with the consent of Kyowa Hakko. Any running
royalties due to Third Parties based on Net Sales of [*] Products or purchases
of bulk or finished [*] Product intended for commercial sale shall be paid by
Kyowa Hakko in the Asian Territory, be paid by COR in the United States and be
an Allowable Expense in the Joint Territory if Kyowa Hakko has exercised the
Option (otherwise by COR in the Joint Territory). Except as provided in the
previous sentence and in the second sentence of this paragraph, each party
receiving a sublicense of Third Party technology hereunder shall comply with
the terms and conditions of such sublicense imposed by the Third Party,
including accounting for Net Sales of [*] Products.
3.5 TERRITORIAL LIMITATIONS. To the extent permitted by law, neither
COR nor Kyowa Hakko shall sell [*] Products to any Third Party that the selling
party believes will resell in a manner inconsistent with the commercialization
arrangements set forth in this Amendment.
4. PROFIT SHARING AND ROYALTIES.
4.1 ROYALTIES AND SHARE OF MARKETING PROFITS IN THE JOINT TERRITORY.
[*] of Marketing Profits from sales of [*] Products in the Joint Territory. In
addition, Kyowa Hakko shall pay to COR a royalty equal to [*] of Net Sales of
[*] Products in the Joint Territory, provided that such royalty shall be paid
only out of Kyowa Hakko's allocation of Marketing Profits and such allocation
shall not be reduced by more than [*] in any quarter by reason of royalties
due under this paragraph. If there is no Marketing Profit in any quarter in
which there are Net Sales of [*] in the Joint Territory, or if payment of all
royalties due would reduce Kyowa Hakko's allocation of Marketing Profits
for such
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
11.
<PAGE> 12
quarter by more than [*], then the unpaid royalties shall be [*] and [*].
Payments under this Paragraph 4.1 shall be made in the manner described in
Section 7.2 of the Collaboration Agreement and for the term described in
Section 7.3 of the Collaboration Agreement (substituting [*] Program Patents
for Program Patents in Section 7.3).
4.2 ROYALTIES ON [*] PRODUCTS IN THE ASIAN TERRITORY.
(a) [*] from Kyowa Hakko to COR [*] of Net Sales of [*]
Products in the Asian Territory, on a cumulative basis.
(b) [*], Kyowa Hakko shall pay COR royalties on annual Net
Sales of [*] Products in the Asian Territory pursuant to the following
graduated rate schedule:
Net Sales/Calendar Year in Asian Territory Royalty Rate
------------------------------------------ ------------
Less than or equal to [*] yen [*]
[*] yen to [*] yen [*]
Greater than [*] [*]
For example, if Net Sales in the Asian Territory are equal to [*] yen in
[*], then the royalties due would be [*] yen [*].
(c) Royalties described in this Paragraph 4.2 shall be paid in
accordance with the mechanisms of Paragraph 2.4(c). As provided in Paragraph
[*].
5. MANUFACTURING.
5.1 GENERAL PLAN FOR BULK MANUFACTURE OF [*]. As discussed in the
fourth recital of this Amendment, neither party currently has the capability to
manufacture bulk [*] in substantial quantities. Accordingly, the parties
initially intend to engage a Third Party manufacturer to supply material for
[*] purposes, as provided in Paragraph 5.2 below. If Kyowa Hakko exercises the
Option, it will build and validate a manufacturing facility, as provided in
Paragraph 5.3 below, and supply the parties with [*] from that facility as
provided in Paragraph 5.5. The Third Party will continue to supply material
through a period in which supply responsibilities will be transitioned to
Kyowa Hakko, as provided in Paragraph 5.3. If Kyowa Hakko does not exercise
the Option, COR shall assume responsibility for managing Third Party supply
arrangements, as provided in Paragraph 5.4. Throughout the term of this
Agreement, COR will
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
12.
<PAGE> 13
have the right to make second source/backup supply arrangements as provided
in Paragraph 5.7 through 5.10 below. The above summary is subject to the
further details provided below in this Article 5.
5.2 PRIOR TO EXERCISE OR TERMINATION OF THE OPTION. The following
terms shall apply only until the Option expires or terminates, or Kyowa Hakko
exercises the Option or notifies COR in writing that it will not exercise the
Option.
(a) THIRD PARTY. The parties shall cooperate and work
together in good faith to establish arrangements for one or more Third Parties
to manufacture and supply all cGMP bulk [*] until manufacture may be
transferred to Kyowa Hakko (if Kyowa Hakko exercises the Option) or another
Third Party or Third Parties. All terms of any agreement with such a Third
Party, including which party(ies) (COR, Kyowa Hakko, or both) will enter into
the Third Party agreement, will be consistent with the provisions of this
Article 5 and subject to the prior written approval of each party.
Specifications for material provided by the Third Party for use in the United
States shall be established by COR. Specifications for material to be used in
the Asian Territory shall be established by Kyowa Hakko. Kyowa Hakko
acknowledges that COR intends to negotiate with Third Party manufacturers for
rights to establish second source/backup suppliers, subject to this Article 5.
(b) KYOWA HAKKO.
(i) PRECLINICAL SUPPLY. Except as otherwise provided
in Paragraph 8.2, Kyowa Hakko shall manufacture and supply bulk [*] for use in
preclinical testing as provided in the Development Plan. The parties expect
that bulk [*] for use in [*] will be produced by a Third Party. The parties
will mutually determine the specifications of bulk material for preclinical use
and will mutually agree upon any arrangements with Third Parties pertaining to
the supply of preclinical material.
(ii) PAYMENT OF CLINICAL SUPPLY COSTS. Except as
otherwise provided in Paragraph 8.2, [*] for bulk [*] used in development
activities worldwide, [*] for development activities in pursuit of Regulatory
Approval in the United States and [*] for development activities in pursuit of
Regulatory Approvals in the Joint Territory. The parties recognize and agree
that development will likely take place initially in the United States.
Furthermore, [*] development activities as provided on the attached Exhibit C.
If Clinical Development Costs in either territory exceed such amount for [*] as
provided in subparagraph 5.2(c) below. However, if [*] than the amount
provided in Exhibit C in either territory, [*] in excess of the amount
provided in Exhibit C. Similarly, if [*] than the amount set forth on Exhibit
C, the unincurred amount shall be added to the amount [*] in such
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
13.
<PAGE> 14
territory. [*] used in development activities in pursuit of Regulatory
Approval in the Asian Territory.
(c) COR. [*] for development activities in pursuit of
Regulatory Approval in the United States and the Joint Territory [*], provided
that in such case COR, in its sole discretion, may [*].
5.3 IF KYOWA HAKKO EXERCISES THE OPTION. The following terms shall
apply only if Kyowa Hakko exercises the Option.
(a) THIRD PARTY. In connection with the Third Party
manufacturing arrangements described in Paragraph 5.2(a) above, the parties
will mutually agree upon provisions for one or more Third Parties to continue
to supply bulk [*] after the Option is exercised until Kyowa Hakko is able to
supply the parties' worldwide requirements of cGMP bulk [*] from its own
validated facility described in Paragraph 5.3(b)(ii)(1) below. [*].
(b) KYOWA HAKKO.
(i) CLINICAL SUPPLY. After the Option is exercised,
[*] worldwide as provided in Paragraph [*].
(ii) COMMERCIAL SUPPLY.
(1) MANUFACTURING FACILITY. In order to
exercise the Option pursuant to Paragraph 3.1(c)(iii), Kyowa Hakko must have
undertaken in a binding agreement with COR to construct a manufacturing
facility and to manufacture and supply substantially all requirements for cGMP
bulk [*] in the U.S. and the Joint Territory subject to Paragraph 5.8 in
accordance with a plan and timeline mutually agreed upon by COR and Kyowa Hakko
and set forth in such agreement. All terms of such agreement shall be subject
to the mutual agreement of the parties, provided that the parties hereby agree
that the agreement will contain the following provisions of this Paragraph
5.3(b)(ii)(1). Kyowa Hakko will immediately commence work on a manufacturing
facility to supply such material and consistently use its best
efforts without interruption to complete such facility. Kyowa Hakko will fund
construction and allocate other resources to such facility to the same level
and with the same diligence it applies to its other comparable high priority
projects. Kyowa Hakko shall develop or acquire from Third Parties bulk
manufacturing processes suitable for the large scale production of bulk [*]
and, with the prior approval of COR, will make process improvements at such
times
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
14.
<PAGE> 15
as may be necessary to maintain an efficient production process. The
manufacturing facility and manufacturing processes will be qualified and
validated by Kyowa Hakko in accordance with all regulatory standards applicable
in the U.S. and the Joint Territory. The manufacturing facility will have
capacity clearly sufficient to meet the aggregate short-term and [*] forecasts
from the date of respective launch of the parties as follows: COR's forecasts
for the U.S., the parties' joint forecasts for the Joint Territory and Kyowa
Hakko's forecasts for the Asian Territory. In addition, such facility shall be
designed to allow readily for capacity expansions sufficient to meet [*]
aggregate worldwide forecasts.
COR acknowledges that Kyowa Hakko may not begin to
establish such facility prior to [*] pursuant to Paragraph [*]. Accordingly,
the parties acknowledge that the timeline to be agreed by the parties for Kyowa
Hakko to begin supplying worldwide requirements of cGMP bulk [*] out of such
facility may include a reasonable period of time to permit Kyowa Hakko to
construct, qualify and validate the facility and manufacturing process;
provided that such period will not in any event exceed [*].
Kyowa Hakko shall bear all costs associated with building,
qualifying and operating such facility, which [*]. In particular, Kyowa Hakko
shall [*] in connection with Kyowa Hakko's assumption of manufacturing
responsibilities.
(2) PAYMENT FOR THIRD PARTY COMMERCIAL SUPPLY.
Kyowa Hakko will have no obligation to pay any amounts due to Third Party
manufacturers for bulk [*] for commercial use in the U.S.
With respect to Third Party supply of bulk [*] for
commercial sale in the Joint Territory, the JCC shall determine which party
shall purchase such material from the Third Party. In any event, such costs
shall be an Allowable Expense.
Kyowa Hakko shall pay any amounts due to Third Party
manufacturers for bulk [*] for commercial use in the Asian Territory.
(3) SUPPLY BY KYOWA HAKKO. Kyowa Hakko shall
notify COR in writing when Kyowa Hakko is able to supply cGMP bulk [*] suitable
for commercial use from its own validated facility. Thereafter, Kyowa Hakko
shall supply cGMP bulk [*] for commercial use in the U.S. and the Joint
Territory under the terms of a Supply Agreement to be negotiated by the
parties pursuant to Paragraph 5.5 below.
With respect to supply of bulk [*] for commercial sale in
the Asian Territory, Kyowa Hakko will supply itself if it exercises the Option.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
15.
<PAGE> 16
(c) COR.
(i) CLINICAL SUPPLY. After the Option is exercised,
[*] in the U.S. and/or the Joint Territory to the extent [*], as provided in
Paragraph 5.2(c) above.
(ii) COMMERCIAL SUPPLY.
(1) PAYMENT FOR THIRD PARTY SUPPLY. Except to
the extent of its purchases from Kyowa Hakko, COR shall purchase from Third
Party manufacturers any amounts of bulk [*] it desires for commercial use in
the U.S.
With respect to Third Party supply of bulk [*] for
commercial sale in the Joint Territory, the JCC shall determine how the parties
shall pay for such material, as provided in Paragraph 5.3(b)(ii)(2) above.
COR shall have no obligation to pay any amounts due to
Third Party manufacturers for bulk [*] for commercial use in the Asian
Territory.
(2) PURCHASE FROM KYOWA HAKKO. After Kyowa
Hakko notifies COR that Kyowa Hakko is able to supply cGMP bulk [*] suitable
for COR's commercial use from Kyowa Hakko's validated facility, COR shall
purchase cGMP bulk [*] for commercial use in the U.S. and, if the JCC so
directs, the Joint Territory, under the terms of a Supply Agreement to be
negotiated by the parties pursuant to Paragraph 5.5 below.
5.4 IF KYOWA HAKKO DOES NOT EXERCISE THE OPTION. The following terms
shall apply only after the Option expires or terminates, or if Kyowa Hakko
notifies COR in writing that it will not exercise the Option.
(a) THIRD PARTY. COR shall have the right but not the
obligation to assume any of Kyowa Hakko's rights, and the attendant
obligations, under arrangements the parties may have with Third Parties for
manufacture of bulk [*] for clinical or commercial use in the U.S. or the Joint
Territory. Third Party agreements executed in advance of Kyowa Hakko's
decision not to exercise the Option shall permit transfer to COR in such event
if COR so elects.
(b) KYOWA HAKKO.
(i) CLINICAL SUPPLY. [*] for the U.S. shall continue
[*] and Kyowa Hakko shall retain rights to [*] Products in the Asian
Territory.
Kyowa Hakko's obligation set forth in Paragraph 5.2(b)(ii) above
[*] for bulk [*] for the Joint Territory shall terminate.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
16.
<PAGE> 17
Kyowa Hakko shall continue to bear any Clinical Supply Costs for
the Asian Territory.
(ii) COMMERCIAL SUPPLY. [*] for commercial use in the
U.S. or the Joint Territory. Kyowa Hakko shall be responsible for all
manufacture of and/or payment for supply for bulk [*] for commercial use in the
Asian Territory. If COR so wishes, Kyowa Hakko shall cooperate with COR in
good faith in an effort to arrange for a single source of supply for the U.S.,
the Joint Territory and the Asian Territory.
(iii) TECHNOLOGY TRANSFER. Promptly following the
expiration or termination of the Option or Kyowa Hakko's decision not to
exercise the Option, Kyowa Hakko shall transfer to COR and/or its designees any
technology relating to the [*] Field, including but not limited to the [*] and
the processes for [*].
(c) COR.
(i) CLINICAL SUPPLY. [*].
Kyowa Hakko's obligation set forth in Paragraph 5.2(b)(ii) above
[*] for the Joint Territory [*].
Kyowa Hakko shall continue to bear any Clinical Supply Costs for
the Asian Territory.
(ii) COMMERCIAL SUPPLY. COR shall be responsible for
all manufacture and/or payment for supply for bulk [*] for commercial use in
the U.S. and the Joint Territory. [*].
COR shall have no obligation to pay for supply of bulk [*]
for commercial use in the Asian Territory. If Kyowa Hakko so wishes, COR shall
cooperate with Kyowa Hakko in good faith in an effort to arrange for COR's
source of supply for the U.S. and the Joint Territory to also supply Kyowa
Hakko for the Asian Territory.
5.5 TERMS OF COMMERCIAL SUPPLY FOR UNITED STATES AND JOINT TERRITORY;
NEGOTIATION OF DETAILED AGREEMENTS.
(a) UNITED STATES. If Kyowa Hakko exercises the Option,
builds a manufacturing facility as provided in Paragraph 5.3(b)(ii)(1) and
notifies COR that it is able to supply the parties' cGMP bulk [*] suitable for
commercial use from such facility as provided in Paragraph 5.3(b)(ii)(3), then
Kyowa Hakko shall supply cGMP bulk [*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
17.
<PAGE> 18
[*] for commercial use in the U.S. under the terms of a Supply Agreement to
be negotiated by the parties. The Supply Agreement will contain the following
terms with respect to supply for the U.S. and such additional terms as are
customary and reasonable in such agreements; provided that no additional
compensation terms will be included unless mutually agreed by the parties.
Kyowa Hakko shall manufacture and supply [*] for commercial sale
in the U.S., except as otherwise provided in Paragraph 5.3(a) and Paragraphs
5.7 through 5.9. The provisions of Sections 8.4 through 8.7 and 8.9 through
8.11 of the Collaboration Agreement, and Paragraphs 5.7 through 5.10 of this
Amendment, shall apply to such supply of bulk [*]. In addition (instead of the
manufacturing profit described in Section 8.8 of the Collaboration Agreement),
COR shall pay a manufacturing royalty to Kyowa Hakko on annual Net Sales in the
U.S. of [*] Products containing bulk [*] supplied by Kyowa Hakko [*] except as
otherwise provided in Paragraph 5.9), but not on [*] Products containing bulk
[*] provided under Paragraph 5.3(a)):
NET SALES/CALENDAR YEAR IN U.S. ROYALTY RATE
- ------------------------------- ------------
Less than or equal to [*] [*]
[*] to [*] [*]
over [*] [*]
For example, if Net Sales in the U.S. are equal to [*], then the
royalties due would be [*]
Such royalty shall be due and payable so long as Kyowa Hakko
continues to meet all of its obligations under this Amendment to supply bulk
[*] for commercial sale in the U.S. and the Joint Territory. Such royalty
payments to Kyowa Hakko shall be made in accordance with the mechanisms
described in Paragraph 2.4(c).
The parties expect that the Cost of Goods Shipped (including [*]
as specified herein) of cGMP bulk [*] the costs of cGMP bulk [*] over the longer
term. However, the parties agree that during the first [*] of production from
the Kyowa Hakko facility such bulk [*] provided that Kyowa Hakko can
document the basis for [*] to the reasonable satisfaction of COR. Beginning in
[*] of operation of such Kyowa Hakko facility and in each year thereafter, [*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
18.
<PAGE> 19
[*]. COR shall have the ongoing right to audit Kyowa Hakko's records with
respect to [*].
(b) JOINT TERRITORY. If Kyowa Hakko exercises the Option,
builds a manufacturing facility as provided in Paragraph 5.3(b)(ii)(1) and
notifies COR that it is able to supply cGMP bulk [*] from such facility as
provided in Paragraph 5.3(b)(ii)(3), then Kyowa Hakko shall supply cGMP bulk
[*] for commercial use in the Joint Territory under the terms of the Supply
Agreement to be negotiated by the parties pursuant to subparagraph (a) above.
Such agreement will contain the following terms with respect to supply for the
Joint Territory and such additional terms as are customary and reasonable in
such agreements; provided that no additional compensation terms will be
included unless mutually agreed by the parties.
Kyowa Hakko shall manufacture and supply [*] for commercial sale
in the Joint Territory, except as otherwise provided in Paragraph 5.3(a) and
Paragraphs 5.7 through 5.9. Kyowa Hakko shall retain title to bulk [*] until
it is sold to distributors or other customers in each country. Kyowa Hakko
shall [*] at such time by the distributor or customer; [*]. The provisions of
Section 8.11 of the Collaboration Agreement (Allocation of Products) and
Paragraphs 5.7 through 5.10 below shall apply. The parties shall mutually
agree upon specifications, regulatory compliance matters and all other supply
issues, including but not limited to ordering and acceptance, quality
assurance, shipment and delivery and inventory.
5.6 MANUFACTURE OF FINISHED [*] PRODUCTS. The manufacture of
finished [*] Products for sale in the United States shall be performed by COR
or such other company as COR may select. COR will advise Kyowa Hakko when COR
commences negotiation of supply arrangements for finished [*] Products and, if
requested by Kyowa Hakko to do so, shall consider Kyowa Hakko as a source of
such final manufacturing services. The manufacture of finished [*] Product for
sale in the Joint Territory shall be performed by such company as the JCC may
select in order to maximize profits from the commercialization of [*] Products
in the Joint Territory. If Kyowa Hakko or COR so request, they will be
considered [*] as a source of such final manufacturing services and if selected
by the JCC to provide such services, such party shall do so on terms to be
negotiated at such time.
5.7 SECOND SOURCE AND BACKUP MANUFACTURING PRIOR TO KYOWA HAKKO OPTION
EXERCISE. At any time during the term of this Amendment, COR shall have the
right to have discussions regarding second source and backup manufacturing
arrangements with Third Parties and to sign feasibility and evaluation
agreements regarding such matters with such parties. COR shall have the right
to provide Third Parties, subject to standard obligations of confidentiality and
non-use, with any [*] Information, COR [*] Knowhow or Kyowa Hakko [*] Knowhow
necessary for Third Parties to conduct their evaluation, except that prior to
exercise of the Option any proprietary manufacturing process information
developed by Kyowa Hakko [*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
19.
<PAGE> 20
[*]. COR shall notify and consult with Kyowa Hakko regarding any such
discussions prior to entering into any agreement with a Third Party. During
the period in which Kyowa Hakko retains the Option, COR will only sign
commercial supply agreements with Third Parties in joint consultation with
Kyowa Hakko as provided in Paragraph 5.2(a).
5.8 SECOND SOURCE AND BACKUP MANUFACTURING AFTER KYOWA HAKKO OPTION
EXERCISE. After exercise of the Option by Kyowa Hakko, in addition to the
rights provided in the first two sentences of Paragraph 5.7, COR will also have
the right to sign one or more second source/backup arrangements related to
commercial supply of bulk [*] intended to be used in [*] Products to be sold in
the U.S. If COR chooses, second source/backup suppliers [*]. In such event,
Kyowa Hakko shall [*]. So long as Kyowa Hakko's ability to supply bulk [*] for
sale in the U.S. is [*] and the rights of COR under Paragraph 5.9 have not
otherwise come into effect, COR: (i) will purchase [*] from Kyowa Hakko, (ii)
may purchase [*] from second source/backup suppliers and, (iii) will pay Kyowa
Hakko the royalty provided in Paragraph 5.5(a) [*]. From time to time after
exercise of the Option, and any time at the request of COR, the parties shall
meet to review and discuss Kyowa Hakko's plans for and progress toward
establishing the capabilities to manufacture bulk [*] as contemplated under
this Amendment.
5.9 KYOWA HAKKO INABILITY TO SUPPLY BULK [*]. If at any time
following the date Kyowa Hakko notifies COR pursuant to Paragraph 5.3(b)(ii)(3)
that Kyowa Hakko is able to supply worldwide bulk [*] requirements, (a) Kyowa
Hakko's ability to supply bulk [*] is less than [*], (b) Kyowa Hakko otherwise
materially fails to supply [*] in accordance with this Amendment or (c) the
parties fail to agree on terms of a Supply Agreement necessary to effect the
purposes of this Article 5, then COR may purchase any amounts not able to be
supplied by Kyowa Hakko [*] from second source/backup suppliers. Kyowa Hakko
will make diligent efforts to remedy its inability to supply [*] as soon as
possible and [*] on bulk material supplied by Kyowa Hakko or Third Parties
during this period. Such backup rights to manufacture bulk [*] shall terminate
[*] following the cessation of such event or series of events that caused Kyowa
Hakko's inability to supply (and the rights provided in Paragraph 5.8 shall
again apply); provided that [*].
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
20.
<PAGE> 21
5.10 TRANSFER OF MANUFACTURING CAPABILITIES. Throughout the term of
this Amendment and promptly following any termination hereof, Kyowa Hakko shall
have an affirmative obligation to transfer any [*] Information and Kyowa Hakko
[*] Knowhow in its possession pertaining to production and manufacture of bulk
[*] to COR and/or its designees which is necessary or useful to enable COR
and/or its designees to perform such manufacturing. In particular, Kyowa Hakko
shall, promptly following any request by COR [*] (i) provide copies of
documents pertaining to such manufacture, including but not limited to batch
records, process descriptions and drawings, translated into English, and (ii)
make its personnel available to assist and cooperate with COR and/or its
designees in establishing such manufacturing capabilities. During the term of
this Amendment and for [*] days after any termination hereof, Kyowa Hakko shall
bear its costs of complying with this Paragraph 5.10, except that COR shall
bear [*] of the reasonable cost of translating materials which COR requests be
translated. To the extent that any such activities occur after such period,
COR shall reimburse Kyowa Hakko for its reasonable costs of complying with
these obligations, including but not limited to [*].
6. PATENTS.
6.1 OWNERSHIP OF [*] PROGRAM PATENTS. The ownership of [*] Program
Patents and responsibility for the prosecution and maintenance of such patents,
and the handling of interference proceedings with respect to such patents,
shall be allocated as follows:
(a) [*] Program Patents [*] shall be owned jointly by Kyowa
Hakko and COR in all countries of the world. The initial patent application
for such Program Patents shall be filed in the United States.
(b) [*] Program Patents with respect to [*] (including but not
limited to any [*]), shall be owned solely by COR in all countries of the world
other than countries in the Asian Territory, and shall be owned jointly by
Kyowa Hakko and COR in the Asian Territory. The initial patent application for
such [*] shall be prepared and filed by COR in the United States.
(c) In the event inventions are made which cover more than one
category set forth above, the parties shall consult and cooperate to cause their
patent filings to be in accord as nearly as practicable to the categories set
forth above, and to allocate ownership and rights with respect to individual
claims as provided above. The parties hereby assign to each other any ownership
interest in [*] Program Patents which they may obtain inconsistent with the
agreement set forth above, and will assist each other in every proper way to
effect such assignment.
6.2 COR RESPONSIBILITY FOR PATENT FILINGS. COR will diligently file,
prosecute and issue [*] Program Patents to effectively cover those inventions
which are within
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
21.
<PAGE> 22
category 6.1(b) in all countries of the world outside of the
Asian Territory. COR will endeavor to ensure whenever possible that claims are
filed and will issue in such Patents specifically directed to the [*] Field and
that all Patents are filed before any public disclosure to COR to maintain the
validity of Patents filed in the United States. COR will give Kyowa Hakko
immediate notice of any decision to prepare a Patent application which is
subject to this Paragraph 6.2. For all Patent applications other than new
compositions of matter, COR will provide Kyowa Hakko and its patent counsel [*]
of any such Patent applications and Kyowa Hakko will have 20 days from receipt
of such drafts to comment on such applications. For Patent applications [*]
COR will provide Kyowa Hakko and its patent counsel [*] of any such Patent
applications; Kyowa Hakko will have 10 days from receipt of such drafts to
comment on such applications. Such drafts of Patent applications [*] delivered
to Kyowa Hakko for review will include [*]. In each event, COR will confer with
Kyowa Hakko, and make every effort to adopt Kyowa Hakko's suggestions, regarding
the prosecution of such Patents. In addition, COR will copy Kyowa Hakko with
any official action and COR's submissions in such Patents.
6.3 JOINT KYOWA HAKKO-COR PATENT FILINGS. Kyowa Hakko and COR
jointly will diligently file, prosecute and issue [*] Program Patents to
effectively cover those inventions which are within category 6.1(b) in
countries of the Asian Territory and those inventions within category 6.1(a) in
all countries of the world. The parties shall agree on the choice of joint
patent counsel in each country and shall have equal voice with respect to the
initial filing and subsequent prosecution of such patent applications.
6.4 ENFORCEMENT RIGHTS. With respect to infringement in the Field of
any of the COR [*] Patents, Kyowa Hakko [*] Patents or [*] Program Patents, (i)
COR shall have the right, but not the obligation, to institute, prosecute and
control any action or proceeding with respect to such infringement in the
United States; (ii) Kyowa Hakko shall have the right, but not the obligation,
to institute, prosecute and control any action or proceeding with respect to
such infringement in the Asian Territory, and (iii) provided that Kyowa Hakko
exercises the Option, the JCC shall designate either COR or Kyowa Hakko to
institute, prosecute and control any action or proceeding with respect to such
infringement in the Joint Territory (with the other party having the right to
participate in such action in the Joint Territory). If Kyowa Hakko does not
exercise the Option, COR shall have the right, but not the obligation, to
institute, prosecute and control any action or proceeding with respect to such
infringement in the Joint Territory. The parties shall consult regarding the
institution, prosecution and control of any action or proceeding with respect
to infringement outside of the [*] Field of any of the COR [*] Patents,
Kyowa Hakko [*] Patents or [*] Program Patents. In the absence of agreement
with respect to infringement outside of the [*] Field, each party may proceed
in such manner as the law permits. In each case relating to infringement
within the [*] Field, Kyowa Hakko shall bear the costs of patent enforcement
within the Asian Territory and retain for its own account any amounts recovered
from Third Parties; COR shall bear the costs of patent enforcement within the
United States and retain for its own account any amounts recovered from Third
Parties; and costs of patent enforcement and related recoveries in the Joint
Territory shall be treated as Allowable Expenses
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
22.
<PAGE> 23
and Sublicense Revenues, respectively, provided that Kyowa Hakko exercises
the Option. If Kyowa Hakko does not exercise the Option, COR shall bear the
costs of patent enforcement within the Joint Territory and retain for its own
account any amounts recovered from Third Parties.
6.5 DEFENSE OF THIRD PARTY CLAIMS. The provisions of the attached
Exhibit D regarding defense of Third Party claims shall be added to the
Collaboration Agreement as a new Section 11.10. Such provisions apply to all
"Products" under the Collaboration Agreement and all [*] Products under this
Amendment.
6.6 PATENT COSTS. Patent Costs for [*] Products in the Asian
Territory shall be borne solely by Kyowa Hakko. Patent Costs for [*] Products
in the United States shall be borne solely by COR. So long as Kyowa Hakko
retains the Option and after any exercise of the Option, Patent Costs for [*]
Products in the Joint Territory shall be borne initially by the party
responsible for prosecution of the Patent, with [*] reimbursed quarterly by the
other party on the same terms applicable to Development Costs under Paragraph
2.3(b), and will be treated as an Allowable Expense. If the Option terminates,
or the licenses to be issued upon exercise of the Option terminates, Patent
Costs for [*] Products in the Joint Territory shall be borne solely by COR.
6.7 BACKUP RIGHT. So long as Kyowa Hakko retains the Option or the
license granted thereunder, should either party not wish to file, prosecute,
maintain or issue a [*] Program Patent or related application at all or in a
particular country of the Joint Territory, it will grant any necessary
authority to the other party to file, prosecute, maintain and issue such a
patent application or maintain such a Patent in the name of the party granting
such authority, all at the expense of the party conducting the prosecution,
which Patent Costs will be an Allowable Expense.
6.8 ASSIGNMENT. Neither party may assign its rights under any
jointly owned [*] Program Patent except with the prior written consent of the
other party; provided, however, that either party may assign such rights
without consent to an Affiliate or other permitted assignee of this Agreement.
7. INFORMATION EXCHANGE; EXCLUSIVITY.
7.1 SHARING OF INFORMATION.
(a) Except as otherwise provided in Paragraph 7.1(c) below,
COR and Kyowa Hakko will make available and disclose to each other all [*]
Information known by COR and Kyowa Hakko as of the Amendment Date and at any
time during the term of this Amendment. All discoveries or inventions made by
either party in the [*] Field, including, without limitation [*] Information
regarding manufacture of [*] and results of in vivo or clinical studies, will
be promptly disclosed to the other, with significant discoveries or advances
being communicated as soon as practical after such information is obtained or
its significance is appreciated.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
23.
<PAGE> 24
(b) The parties will exchange at least monthly verbal or
written reports in English presenting a meaningful summary of work done under
the Development Plan. Each party will make regular presentations to the other
of its work under the [*] Development Plan, other than within the JRC, and
additionally on an informal basis, to inform the other party of the work done
under the [*] Development Plan. Each party will use reasonable efforts not to
communicate information to the other which has no application to the [*] Field.
Each party will provide the other with raw data in original form or a photocopy
thereof for any and all work carried out in the course of the [*] Development
Plan as reasonably requested by the other party.
(c) In the event that Kyowa Hakko's Option expires or is
terminated, or the license in the Joint Territory granted upon exercise thereof
is terminated pursuant to Paragraph 2.4, the information sharing provisions of
Paragraph 7.1(a) above shall cease to apply and the parties shall have the
following ongoing obligations to share information during the term of this
Amendment. COR and Kyowa Hakko will make available and disclose to each other
all protocols for and results of clinical studies regarding [*] Products, as
well as all adverse events relating to [*] Products (as provided in Paragraph
7.2). Kyowa Hakko will continue to transfer manufacturing capabilities to COR
and/or its designees as provided in Paragraph 5.10. During the [*] period
following the expiration or termination of the Option, Kyowa Hakko shall
cooperate with COR to effect a smooth transition of development
responsibilities for [*] Products in the Joint Territory, providing all
assistance necessary or useful to permit COR to assume such responsibilities.
(d) If either party is unable to or elects not to proceed with
development, manufacture or commercialization of any [*] in any territory in
the manner provided in this Agreement, or terminates its participation in any
such activity as provided in this Agreement or otherwise, or this Amendment is
terminated by the other party for such party's material breach hereof, such
party shall have an affirmative obligation to transfer to the other party all
of its [*] Information and [*] Knowhow as may be necessary or useful to the
exercise of the other party's rights under this Amendment.
7.2 ADVERSE EVENTS. The parties agree that, to the extent permitted
by applicable law, COR shall coordinate the reporting of adverse events related
to [*] Products throughout the world. Kyowa Hakko shall report all complaints
and adverse events to COR and COR shall make its database of worldwide
information available to both parties for purposes of complying with
applicable regulatory requirements throughout the world.
(a) Each party agrees to provide to the other for initial
and/or periodic submission to government agencies significant information on
the drug from preclinical laboratory, animal toxicology and pharmacology
studies, as well as adverse drug experience reports from clinical trials and
commercial experiences with the compound;
(b) Each party agrees to maintain a record of all complaints
it receives with respect to any [*] Product and notify the other of any
complaint received by it in sufficient detail and within five (5) days after
the event, and, in any event in sufficient time to
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
24.
<PAGE> 25
allow the other to comply with any and all regulatory requirements imposed
upon either party in any country, which may be less than 5 days; and
(c) Each party agrees to report to the other within three (3)
days of the initial receipt of a report of any unexpected fatal or life
threatening experience with the drug and within ten (10) days of the initial
receipt of a report of any adverse experience with the drug that is serious and
unexpected; provided, in any event, that such reports shall be made in
sufficient time to allow the other to comply with any and all regulatory
requirements imposed upon either party in any country, which may be less than 3
or 10 days, respectively. Serious adverse experiences mean any experience that
suggests a significant hazard, contraindication, side effect or precaution, or
any experience that is fatal or life threatening, is permanently disabling,
requires or prolongs inpatient hospitalization, or is a congenital anomaly,
cancer, or overdose. An unexpected adverse experience is one not identified in
nature, specificity, severity or frequency in the current investigator brochure
or the U.S. labeling for the drug. Each party also agrees that if it contracts
with a third party to provide goods or services pertaining to the drug, that
party agrees to require such third party to report to the contracting party the
information set forth in these subparagraphs (a), (b) and (c) to the extent
such Third Party may reasonably obtain such information.
7.3 EXCLUSIVITY. During the term of this Amendment, each party shall
disclose to the other on an ongoing basis its research, development and
manufacturing activities within the [*] Field, and neither party shall conduct,
participate in or fund any research, development and manufacturing activities
within the [*] Field except as a part of this collaboration.
8. TERM AND TERMINATION.
8.1 TERM. This Amendment shall commence as of the Amendment Date
and, unless sooner terminated as provided herein, shall continue in effect
until the latest of (a) the expiration of the last to expire of the [*] Program
Patents, (b) the date on which the parties are no longer sharing profits on any
[*] Product in any country in the Joint Territory, or (c) the expiration of the
last obligation of either party to pay royalties hereunder.
8.2 TERMINATION BY KYOWA HAKKO AT [*] STAGE.
(a) Kyowa Hakko shall have the right to terminate this
Amendment upon [*] days written notice to COR within [*] days after [*] if
Kyowa Hakko, in its sole discretion, determines that [*] and Kyowa Hakko
believes that it is not feasible to, or not likely to be possible to, [*].
(b) In the event of such termination, all of Kyowa Hakko's
rights in the [*] Field under this Amendment will terminate worldwide and COR
will receive
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
25.
<PAGE> 26
an exclusive, worldwide license under Kyowa Hakko [*] Patents and
Kyowa Hakko's [*] Program Patents, and a nonexclusive, worldwide license under
Kyowa Hakko [*] Knowhow, to develop, make, use and sell [*] Products. Kyowa
Hakko's obligation under Paragraph 2.1(a) to continue work until the criteria
set forth in Exhibit B are achieved shall survive any termination of this
Agreement pursuant to Paragraph 8.2(a). If Kyowa Hakko [*], then COR shall pay
to Kyowa Hakko a royalty of [*] of worldwide Net Sales of [*] Products
incorporating the Kyowa Hakko [*]. Such royalties shall cease when the
cumulative royalties paid to Kyowa Hakko amount to [*]. Otherwise, such
royalties shall be paid in accordance with the mechanisms described in
Paragraph 2.4(c). No other royalties shall be due from COR to Kyowa Hakko in
respect of the above licenses. During the [*] notice period referenced in
Paragraph 8.2(a) above, Kyowa Hakko shall provide COR with manufacturing
technology as set forth in Paragraph 5.10 and copies of all Kyowa Hakko [*]
Knowhow. In addition, Kyowa Hakko shall complete all activities which Kyowa
Hakko either (i) has commenced under the [*] Development Plan as of the date of
the notice of termination or (ii) is scheduled to complete during the 90 day
notice period, as provided on the timeline included in the [*] Development
Plan. During the notice period, the costs of such activities shall be borne as
provided in the [*] Development Plan. Thereafter, COR shall bear the
reasonable costs of such activities until completed by Kyowa Hakko.
8.3 TERMINATION FOR BREACH. If either party materially breaches this
Amendment, which breach is not cured within 60 days of written notice thereof
from the non-breaching party, the parties' respective licenses shall be
adjusted as follows.
(a) If COR is the breaching party, Kyowa Hakko shall retain
its license in the Asian Territory as provided in this Amendment (including the
obligation to pay royalties). COR also shall grant to Kyowa Hakko the license
in the Joint Territory described in Paragraph 3.1(c)(i), provided that (i) such
license shall be exclusive even as to COR (not except as to COR) with respect
to COR [*] Patents and COR [*] Program Patents and (ii) such license shall be
subject to the payment to COR of a royalty equal to [*] of Net Sales of
[*] Products in the Joint Territory, [*]. The provisions of Paragraph 2.4(c)
shall apply equally to the payment of such royalties. COR's license under
Paragraph 3.2(b) in the Joint Territory shall terminate, but the license under
Paragraph 3.2(a) in the U.S. shall survive. The obligations of Paragraph
7.1(d) shall survive and apply to both parties.
(b) If Kyowa Hakko is the breaching party, all of Kyowa
Hakko's rights under this Amendment shall terminate and COR shall have a
worldwide license under Kyowa Hakko [*] Technology and Kyowa Hakko's [*]
Program Patents to make, have made, use, sell and have sold bulk [*] and [*]
Products. Such license shall be exclusive with respect to Kyowa Hakko [*]
Patents and Kyowa Hakko's [*] Program Patents and nonexclusive with respect to
Kyowa Hakko [*] Knowhow. The
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
26.
<PAGE> 27
obligations of Paragraphs 5.10 and 7.1(d) shall survive and apply to Kyowa
Hakko. If prior to the effective date of termination either party has [*],
whichever is earlier, on a [*] Product anywhere in the world, then COR's license
in the Joint Territory shall be subject to the payment to Kyowa Hakko of a
royalty equal to [*] of Net Sales of [*] Products in the Joint Territory. The
provisions of Paragraph 2.4(c) shall apply equally to the payment of such
royalties.
8.4 SURVIVING RIGHTS. Except as modified above in Paragraph 8.3, the
obligations and rights of the parties under Paragraphs 2.1(d), 7.2, 8.2(b)
through 8.5, 9.3, 9.5 (first sentence), 9.6 and 9.7 of this Amendment will
survive termination.
8.5 ACCRUED RIGHTS, SURVIVING OBLIGATIONS. Termination,
relinquishment or expiration of this Amendment for any reason shall be without
prejudice to any rights which shall have accrued to the benefit of either party
prior to such termination, relinquishment or expiration, including damages
arising from any breach hereunder. Such termination, relinquishment or
expiration shall not relieve either party from obligations which are expressly
indicated to survive termination or expiration of this Amendment.
9. MISCELLANEOUS
9.1 AMENDMENT TO COLLABORATION AGREEMENT. Pursuant to Section 16.14
of the Collaboration Agreement, the parties hereby amend the Collaboration
Agreement as provided in this Amendment. Such agreement, as amended, shall
continue in full force and effect. This Amendment shall be governed by the
laws of the State of California, without regard to conflicts of laws
principles.
9.2 MATERIAL TRANSFER AGREEMENT. This Amendment shall supersede the
Material Transfer Agreement as of the Amendment Date. All information and
materials subject to the Materials Transfer Agreement shall thereafter be
subject to the terms of this Amendment. Any inventions made in the course of
the Evaluation under the Materials Transfer Agreement shall be subject to
Article 6 of this Amendment as provided herein. As of the Amendment Date, the
Nonbinding Letter of Intent between the parties, and the letter agreement
providing an exclusive negotiating period, shall terminate and cease to be of
any force or effect.
9.3 CONFIDENTIALITY. The terms of Article 10 of the Collaboration
Agreement shall apply equally to [*] Information and all information and
materials furnished by either party to the other pursuant to this Amendment or
the Materials Transfer Agreement. This Paragraph 9.3 shall survive termination
of this Amendment for a period of ten (10) years.
9.4 REPRESENTATIONS AND WARRANTIES. Each of the parties hereby
represents and warrants as follows:
(a) This Amendment is a legal and valid obligation binding
upon such party and enforceable in accordance with its terms. The execution,
delivery and performance of the
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
27.
<PAGE> 28
Amendment by such party does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it is
bound, nor violate any law or regulation of any court, governmental body or
administrative or other agency having jurisdiction over it.
(b) Such party has not, and during the term of the Amendment
will not, grant any right to any Third Party relating to its respective
Technology in the [*] Field which would conflict with the rights granted to the
other party hereunder.
9.5 REPORTS, RECORDS AND PUBLICITY. The parties shall maintain
records of Net Sales and Allowable Expenses regarding [*] Products on the same
terms provided in Section 13.2 of the Collaboration Agreement. The parties
shall exchange materials relating to [*] and the [*] Field in the same manner
provided with respect to Compounds in Section 13.3 of the Collaboration
Agreement. Section 13.4 of the Collaboration shall apply equally to the [*]
Field, and the parties agree that publicity and publications pertaining to the
subject matter of this Amendment shall be subject to the terms of Sections 13.5
and 13.6 of the Collaboration Agreement.
9.6 INDEMNIFICATION. The indemnification obligations set forth in
Sections 15.1, 15.2, 15.3 and 15.5 of the Collaboration Agreement shall apply
equally to [*] Products; provided, however, that if Kyowa Hakko's rights
hereunder in the Asian Territory and/or the Joint Territory terminate and COR
pursues such territory(ies), then COR shall indemnify Kyowa Hakko in such
territory(ies) on the same terms applicable to the United States under Section
15.2.
9.7 GENERAL. Article 16 of the Collaboration Agreement shall apply
equally to the [*], [*] and this Amendment.
IN WITNESS WHEREOF, the parties have executed this Amendment No. 5 in
duplicate originals by their proper officers as of the date and year first
above written.
COR THERAPEUTICS, INC. KYOWA HAKKO KOGYO CO. LTD.
By: /s/ By: /s/
-------------------------------- ----------------------------------
Vaughn M. Kailian Name: Tetsuo Oka
President and CEO Title: Senior Managing Director
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
28.
<PAGE> 29
<PAGE> 30
EXHIBIT A
[*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
<PAGE> 31
EXHIBIT B
[*] Specifications
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
<PAGE> 32
EXHIBIT C
[*]
U.S.
[*] [*]
[*] [*]
Joint Territory
[*] [*]
[*] [*]
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
<PAGE> 33
EXHIBIT D
DEFENSE OF THIRD PARTY CLAIMS
11.10 Defense of Third Party Claims.
(i) Defense and Settlement of Third Party Claims for
Collaboration Products and [*] Products in the Joint Territory. If a Third
Party asserts that a patent or other right owned by it is infringed by the
manufacture, use or sale of any Product or any [*] Product in the Joint
Territory (so long as both parties retain option or license rights to co-
promote such product in the Joint Territory), the Party first obtaining
knowledge of such a claim shall immediately provide the other Party notice of
such claim and the related facts in reasonable detail. In such event, the
Steering Committee shall determine how best to control the defense of any such
claim. In the event the Parties cannot agree on the defense of any such claim,
COR shall have the right, but not the obligation, to control such defense.
Kyowa Hakko shall cooperate with COR and shall have the right to be represented
separately by counsel of its own choice. The entity (whether Steering
Committee or COR) that controls the defense of a given claim, shall also have
the right to control settlement of such claim; provided, however, that if one
Party controls, no settlement shall be entered into without the written consent
of the other Party if such settlement would adversely affect the interests of
such other Party.
(ii) Allocation of Expense. The expenses of patent defense,
settlement and judgments pursuant to Section 11.10(i) shall be a shared expense
of the Parties. Such costs which are incurred after the designation of the
Product or [*] Product for development but prior to Regulatory Approval shall
be borne in the same manner as if such costs were Development Costs. Such
costs which are incurred following Regulatory Approval shall be an Allowable
Expense, reimbursed to the Party incurring such expense.
(iii) Settlement of Third Party Claims for Cancer Products in
all territories and Products and [*] Products in the U.S. and the Asian
Territory; Royalty Reduction. If a Third Party asserts that a patent or other
right owned by it is infringed by any [*], or any Product or [*] Product in the
U.S. or the Asian Territory (or the Joint Territory if only one Party retains
marketing rights for such product in the Joint Territory), the Party with
rights to market such product in such territory shall control the defense of
such action and bear any litigation costs, settlement costs, royalties or other
costs or payments due to the Third Party which may be incurred by either Party
arising out of such action.
* Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and
Exchange Commission pursuant to Rule 24-b2 of the Securities Exchange Act
of 1934, as amended.
<PAGE> 1
EXHIBIT 10.38
Summary of 1996 Incentive Pay Program
The 1996 Incentive Pay Program has two components, a cash bonus component for
all qualifying employees and, for senior level employees, a restricted stock
component implemented under the Company's 1991 Equity Incentive Plan. Award
under both components are conditioned upon attainment of certain corporate goals
set by the Compensation Committee as well as on individual performance.
Under the cash bonus component, employees are eligible to receive cash bonuses
of up to 16% of eligible salary. Restricted stock awards may range up to 10% of
eligible salary, with the number of shares issued based on the market value of
the Company's Common Stock at the beginning and end of the applicable period,
whichever is lower. Restricted stock awards vest ratably over three years, with
one-third vesting at the end of each year.
<PAGE> 1
Exhibit 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements
(Form S-8 No. 33-42912, 33-66296, 33-82306, and 33-82308) pertaining to the 1988
Employee Stock Option Plan, the 1988 Consulting Stock Option Plan, the 1991
Equity Incentive Plan, the 1991 Employee Stock Purchase Plan and the 1994
Non-Employee Directors' Stock Option Plan of our report dated January 23, 1997,
with respect to the financial statements of COR Therapeutics, Inc. included in
it's Annual Report (Form 10-K) for the year ended December 31, 1996.
ERNST & YOUNG LLP
Palo Alto, California
March __, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from (a) the
balance sheet dated December 31, 1996 and the statement of operations for the
year ended December 31, 1996 and is qualified in its entirety by reference to
such (b) financial statements
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 2,615
<SECURITIES> 50,519
<RECEIVABLES> 7,644
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 64,198
<PP&E> 20,870
<DEPRECIATION> (13,823)
<TOTAL-ASSETS> 71,245
<CURRENT-LIABILITIES> 17,438
<BONDS> 0
0
0
<COMMON> 2
<OTHER-SE> 50,442
<TOTAL-LIABILITY-AND-EQUITY> 71,245
<SALES> 0
<TOTAL-REVENUES> 18,755
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 58,094
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 759
<INCOME-PRETAX> (36,546)
<INCOME-TAX> 0
<INCOME-CONTINUING> (36,546)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (36,546)
<EPS-PRIMARY> (1.86)
<EPS-DILUTED> (1.86)
</TABLE>
