<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For The Quarterly Period Ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
Commission File Number: 0-19700
AMYLIN PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 33-0266089
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9373 Towne Centre Drive, San Diego, California 92121
(Address of principal executive offices) (Zip code)
(619) 552-2200
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former
fiscal year, if changed since last report)
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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at September 30,1996
----- --------------------------------
Common Stock, $.001 par value 28,322,081
<PAGE> 2
AMYLIN PHARMACEUTICALS, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
<S> <C>
COVER PAGE ............................................................................ 1
TABLE OF CONTENTS ..................................................................... 2
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets as of
September 30, 1996 and December 31, 1995 ......................................... 3
Condensed Consolidated Statements of Operations
for the three months and nine months ended
September 30, 1996 and 1995 ...................................................... 4
Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30, 1996 and 1995 ............................ 5
Notes to Condensed Consolidated Financial Statements ............................. 6
ITEM 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations .................................... 8
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings ........................................................ *
ITEM 2. Changes in Securities .................................................... *
ITEM 3. Defaults upon Senior Securities .......................................... *
ITEM 4. Submission of Matters to a Vote of
Security Holders ......................................................... *
ITEM 5. Other Information ........................................................ *
ITEM 6. Exhibits and Reports on Form 8-K ......................................... 16
SIGNATURE ............................................................................. 17
</TABLE>
* No information provided due to inapplicability of item.
<PAGE> 3
AMYLIN PHARMACEUTICALS, INC.
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
(unaudited) (Note)
------------- -------------
Assets
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 19,852,454 $ 16,708,757
Short-term investments 18,472,171 36,812,237
Other current assets 1,493,025 1,495,418
------------- -------------
Total current assets 39,817,650 55,016,412
Property and equipment, at cost
Equipment 10,597,655 8,369,702
Leasehold Improvements 3,341,364 3,180,819
------------- -------------
13,939,019 11,550,521
Less accumulated depreciation and amortization (7,451,682) (5,797,917)
------------- -------------
6,487,337 5,752,604
Patents and other assets, net 1,389,750 1,180,266
------------- -------------
$ 47,694,737 $ 61,949,282
============= =============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 1,055,209 $ 1,477,252
Accrued liabilities 3,628,649 2,886,152
Deferred revenue 7,952,917 4,618,100
Current portion of note payable 646,747 312,500
Current portion of obligation under capital leases 530,369 454,173
------------- -------------
Total current liabilities 13,813,891 9,748,177
Notes Payable 4,570,632 1,670,619
Obligation under capital lease 346,784 759,015
Deferred rent and other -- 16,743
Stockholders' equity:
Common stock, $.001 par value, 50,000,000 shares authorized,
28,322,081 and 28,017,839 issued and outstanding at
September 30, 1996 and December 31, 1995 respectively 28,321 28,018
Additional paid-in capital 168,331,916 166,994,485
Accumulated deficit (139,404,619) (117,318,121)
Unrealized gains on short-term investments 7,812 50,346
------------- -------------
Total stockholders' equity 28,963,430 49,754,728
------------- -------------
$ 47,694,737 $ 61,949,282
============= =============
</TABLE>
Note: The balance sheet at December 31, 1995 has been derived from audited
consolidated statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes.
<PAGE> 4
AMYLIN PHARMACEUTICALS, INC.
Condensed Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Three months ended
September 30,
------------------
1996 1995
------------ ------------
<S> <C> <C>
Revenues under collaborative agreements $ 13,192,132 $ 3,802,500
Expenses:
Research and development 14,354,535 9,304,260
General and administrative 2,915,353 1,755,265
------------ ------------
17,269,888 11,059,525
Interest and other income 449,256 384,360
Interest and other expense (121,476) (73,603)
------------ ------------
Net loss ($ 3,749,976) ($ 6,946,268)
============ ============
Net loss per share ($ 0.13) ($ 0.28)
============ ============
Shares used in computing net loss per share 28,260,647 24,430,432
============ ============
</TABLE>
See accompanying notes.
<PAGE> 5
AMYLIN PHARMACEUTICALS, INC.
Condensed Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
------------------
1996 1995
------------ ------------
<S> <C> <C>
Revenues under collaborative agreements $ 23,922,275 $ 12,868,500
Expenses:
Research and development 40,145,398 29,327,232
General and administrative 7,189,968 5,888,467
------------ ------------
47,335,366 35,215,699
Interest and other income 1,619,231 853,075
Interest and other expense (292,638) (229,354)
------------ ------------
Net loss ($22,086,498) ($21,723,478)
============ ============
Net loss per share ($ 0.78) ($ 0.97)
============ ============
Shares used in computing net loss per share 28,142,565 22,470,430
============ ============
</TABLE>
See accompanying notes.
<PAGE> 6
AMYLIN PHARMACEUTICALS, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 30,
-----------------
1996 1995
------------ ------------
<S> <C> <C>
Operating Activities:
Net Loss ($22,086,498) ($21,723,478)
Adjustments to reconcile net loss to net
cash used for operating activities:
Depreciation and amortization 1,703,403 1,539,004
Deferred rent and other expense (18,842) (18,842)
Amortization of deferred compensation -- 424,889
Changes in assets and liabilities:
Other current assets 2,393 (54,124)
Accounts payable (422,043) (352,262)
Accrued liabilities 744,596 386,550
Deferred collaborative revenue 3,334,817 4,030,652
------------ ------------
Net cash flows used for operating activities (16,742,174) (15,767,611)
Investing activities:
Decrease in short-term investments 18,297,532 (7,471,561)
Purchase of equipment and leasehold improvements (2,388,498) (1,527,432)
Increase in deposits, patents and other assets (259,122) (155,326)
------------ ------------
Net cash flows provided by (used for) investing activities 15,649,912 (9,154,319)
Financing activities:
Issuance of notes payable 3,617,484 396,669
Principal payments on notes payable (383,224) (208,333)
Principal payments on capital leases (336,035) (500,684)
Issuance of common stock, net 1,337,734 46,278,810
------------ ------------
Cash flows provided by financing activities 4,235,959 45,966,462
------------ ------------
Increase in cash and cash equivalents 3,143,697 21,044,532
Cash and cash equivalents at beginning of period 16,708,757 7,360,681
------------ ------------
Cash and cash equivalents at end of period $ 19,852,454 $ 28,405,213
============ ============
Supplemental disclosure of cash flow information:
Interest paid $ 196,952 $ 228,554
</TABLE>
See accompanying notes.
<PAGE> 7
AMYLIN PHARMACEUTICALS, INC.
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
(unaudited)
1. Summary of Significant Accounting Policies
Basis of Presentation
The information contained herein has been prepared in accordance with
instructions for Form 10-Q and Article 10 of Regulation S-X. The information at
September 30, 1996, and for the three months and nine months ended September 30,
1996 and 1995, is unaudited. In the opinion of management, the information
reflects all adjustments necessary to make the results of operations for the
interim periods a fair statement of such operations. All such adjustments are of
a normal recurring nature. Interim results are not necessarily indicative of
results for a full year. For a presentation including all disclosures required
by generally accepted accounting principles, these financial statements should
be read in conjunction with the audited financial statements included in the
Company's Annual Report to Shareholders for the year ended December 31, 1995.
Per Share Data
Net loss per share is computed using the weighted average number of shares
outstanding during the periods.
Consolidation
The consolidated financial statements include the accounts of the Company and
its wholly owned subsidiary, Amylin Europe Limited. All significant intercompany
transactions and balances have been eliminated.
2. Subsequent Events
In November 1996, the Company completed concurrent stock offerings which raised
net proceeds of approximately $33.7 million. A public offering of 2.0 million
shares of its common stock provided net proceeds of approximately $18.7 million.
Concurrent with the closing of this offering, in a separate transaction, the
Company sold 1.5 million shares of its common stock directly to Johnson &
Johnson providing net proceeds of approximately $15.0 million. Johnson &
Johnson's purchase of such shares was the result of Amylin's achievement of the
first milestone in its collaboration with Johnson & Johnson in August 1996.
<PAGE> 8
3. Contingencies
The Company has received letters from a third party asserting that pramlintide
is covered by a patent which the Company has licensed from such third party. The
third party claims to be entitled to 50% of any sublicensing fees received from
Johnson & Johnson pursuant to the Collaboration Agreement, as well as a future
running royalty as specified in the license agreement. The Company believes that
these assertions are without merit and will vigorously defend against any claims
related to the foregoing, should any such claims be brought. The third party has
been informed that the Company does not agree with its assertions and that no
such sublicensing moneys have been received from Johnson & Johnson, which is not
a sublicensee under the third party's patent.
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Except for the historical information contained herein, the discussion
in this report contains forward-looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed in this report. Factors that could cause or contribute to such
differences include, without limitation, those discussed in the section entitled
"Liquidity and Capital Resources" herein as well as those discussed in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995 under
the heading "Risk Factors".
Since its inception in September 1987, Amylin Pharmaceuticals, Inc.
("Amylin" or the "Company") has devoted substantially all of its resources to
its research and development programs. Substantially all of the Company's
revenues to date have been derived from fees and expense reimbursements under
collaborative agreements and from interest income. Amylin has not received any
revenues from the sale of products. The Company has been unprofitable since its
inception and expects to incur additional operating losses for the next several
years. As of September 30, 1996, the Company's accumulated deficit was
approximately $139.4 million.
RESULTS OF OPERATIONS
Revenue
The Company had $13.2 million and $23.9 million of revenue for the
three month and nine month periods ended September 30, 1996 as compared to $3.8
million and $12.9 million for the same periods in 1995. The revenues recognized
in 1996 and 1995 were related to the Company's Collaboration Agreement with
LifeScan, a wholly owned subsidiary of Johnson & Johnson, hereinafter referred
to as Johnson & Johnson. 1996 revenues were comprised of Johnson & Johnson's
one-half share of collaboration development expenses incurred by Amylin in the
first nine months of the year and $7.0 million in milestone and option fee
payments paid in the third quarter of the year. 1995 revenues were comprised of
Johnson & Johnson's one-half share of collaboration development expenses
incurred by Amylin in the second and third quarters of 1995 along with a license
fee which was paid at the signing of the agreements. (Please see the "Liquidity
and Capital Resources" section for further discussion of payments expected to be
received by the Company in the future.)
Operating Expenses
The Company's total operating expenses for the quarter ended September
30, 1996 increased to $17.3 million from $11.1 million for the third quarter in
1995. For the nine months ended September 30, 1996, operating expenses increased
to $47.3 million from $35.2 million for the same period in 1995.
<PAGE> 10
Research and development expenses increased to $14.4 million for the
three months ended September 30, 1996 as compared to $9.3 million for the same
period in 1995. Research and development expenses for the nine months ended
September 30, 1996 increased to $40.1 million from $29.3 million for the same
period in 1995. The increase in these expenditures was primarily due to the
costs of expanding pramlintide clinical development efforts. Several other
factors also contributed to this increase, including increased staffing,
expanded product development efforts and increased facilities expenditures.
General and administrative expenses increased to $2.9 million for the
three months ended September 30, 1996 as compared to $1.8 million for the same
period in 1995. General and administrative expenses for the nine months ended
September 30, 1996 increased to $7.2 million from $5.9 million for the same
period in 1995. The increase for the three and nine month periods was primarily
related to expanded pramlintide market development efforts in conjunction with
the Company's collaboration with Johnson & Johnson.
Other Income and Expense
Interest and other income is principally comprised of interest income
from investment of the Company's cash reserves. Interest and other income was
$0.4 million for the quarters ended September 30, 1996 and 1995. Interest and
other income increased to $1.6 million for the nine months ended September 30,
1996 from $0.9 million for the same period in 1995. The increase in interest and
other income was primarily due to higher average cash reserves available for
investment for the nine months ended September 30, 1996 as compared to the same
period in 1995.
Interest and other expense is principally comprised of interest expense
resulting from long-term debt obligations. Debt financing has been utilized by
the Company to acquire laboratory and other equipment and to fund tenant
improvements to the Company's facilities. In addition, in accordance with the
terms of the Company's Collaboration Agreement with Johnson & Johnson, Johnson &
Johnson has advanced Amylin's share of pramlintide pre-launch marketing expenses
incurred since the date of the collaboration, to be repaid with interest over
time out of Amylin's share of future pramlintide profits if any. Interest and
other expense increased to $121,000 for the three months ended September 30,
1996 from $74,000 for the same period in 1995. Interest and other expense
increased to $293,000 for the nine months ended September 30, 1996 from $229,000
for the same period in 1995. The increase in interest and other expense is
reflective of an overall higher long-term debt balance during the first nine
months of 1996 as compared to 1995.
Net Loss
The net loss for the quarter ended September 30, 1996 was $3.7
million compared to a net loss for the third quarter of 1995 of
<PAGE> 11
$6.9 million. The decrease in the net loss for the quarter was primarily the
result of the $7.0 million of milestone and option fee payments received in the
quarter in addition to Johnson & Johnson's one-half share of collaboration
development expenses incurred by Amylin. The increase in quarterly revenues was
partially offset by increased pramlintide clinical development efforts. The
Company incurred a net loss of $22.1 million for the nine months ended September
30, 1996 as compared to $21.7 million for the nine months ended September 30,
1995. The increase in the net loss for the nine month period was related to
increased operating expenditures primarily related to pramlintide development
efforts. The increase in expenditures was partially offset by increased
collaborative revenues and interest income.
Amylin expects to incur substantial operating losses over the next
several years due to continuing and increasing expenses associated with its
research and development programs, including preclinical and clinical testing of
multiple product candidates, and related general and administrative support.
Operating losses may fluctuate from quarter to quarter as a result of
differences in the timing of expenses incurred and revenues recognized.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, Amylin has financed its operations primarily
through private placements of preferred stock, sales of common stock, its
collaboration with Johnson & Johnson, and operating and capital lease
obligations.
In June 1995, the Company entered into a worldwide Collaboration
Agreement with LifeScan, Inc. for the development and commercialization of
pramlintide, a diabetes drug candidate currently in Phase III clinical trials.
In conjunction with the Collaboration Agreement, the Company also entered into a
Stock Purchase Agreement with Johnson & Johnson Development Corporation ("JJDC")
and a Loan Agreement with Johnson & Johnson. LifeScan, Inc. and JJDC, each of
which are wholly-owned subsidiaries of Johnson & Johnson, are referred to herein
as Johnson & Johnson.
In August, 1996, the Company achieved the first milestone in the
collaboration when, based upon an administrative review of three-month data from
the first two, one-year Phase III clinical trials, Johnson & Johnson decided to
continue the collaboration. As a result, Johnson & Johnson will be making
additional payments associated with the milestone to Amylin totaling $22.0
million, in addition to providing significant ongoing development support. The
additional payments associated with the milestone include $7.0 million in
milestone and option fee payments paid in the third quarter of 1996 and a
commitment to purchase $15.0 million of Amylin Common Stock. In compliance with
Food and Drug Administration guidelines, the data that was the subject of the
administrative interim review may not be disclosed. There can be no assurance
that such data will ultimately support the marketing approval of pramlintide as
a drug for the treatment of diabetes.
<PAGE> 12
In addition to the above mentioned milestone-related payments and
investment, Johnson & Johnson's financial commitment to Amylin now includes the
funding of 50% of development costs and 100% of pre-launch marketing costs
(Amylin's one-half share to be repaid over time from future profits), as well as
milestone payments, license fees, equity investments; and a loan facility for
use in certain circumstances. The Company will apply all of the license fees and
any cash milestone payments and 50% of the proceeds from Johnson & Johnson's
equity investments towards its share of development expenses. Although Johnson &
Johnson's various payments to Amylin should be sufficient to fund the
substantial portion of the Company's 50% share of pramlintide's development, the
Company may elect to raise additional funds to pay for its share of such
development and for other corporate purposes.
The Company is dependent on the future payments from Johnson & Johnson
to continue development and commercialization of pramlintide. Johnson & Johnson
may terminate the Collaboration Agreement subject to a notice period of six
months. Johnson & Johnson's financial and other obligations under the
Collaboration Agreement would continue during any such termination notice
period. In addition, Johnson & Johnson has the right to terminate the
Collaboration Agreement at any time based on material safety or tolerability
issues. Without Johnson & Johnson's continued collaborative support, the Company
might not be able to continue the pramlintide development program, and the
Company's financial condition would be materially adversely affected.
As of September 30, 1996, Johnson & Johnson entities have made various
financial payments to the Company totaling $65.2 million. These payments
primarily include a license fee, the purchase of $15 million of the Company's
common stock in 1995, a milestone and option fee payments and payment of one
half of the pramlintide development costs.
At September 30, 1996, the Company had $38.3 million in cash, cash
equivalents and short-term investments as compared to $53.5 million at December
31, 1995. The Company invests its cash in U.S. government and other highly rated
liquid debt instruments.
In November 1996, the Company completed concurrent stock offerings
which raised net proceeds of approximately $33.7 million. A public offering of
2.0 million shares of its common stock provided net proceeds of approximately
$18.7 million. Concurrent with the closing of this offering, in a separate
transaction, the Company sold 1.5 million shares of its common stock directly to
Johnson & Johnson providing net proceeds of approximately $15.0 million. Johnson
& Johnson's purchase of such shares was the result of Amylin's achievement of
the first milestone in its collaboration with Johnson & Johnson in August 1996.
The Company intends to use its financial resources for the ongoing
development of pramlintide, including the Phase III efficacy studies, and for
expansion of its other research, drug discovery and development programs and
other general corporate purposes. To the extent that clinical trials of the
Company's
<PAGE> 13
compounds progress as planned, research and development expenses will include
costs of supplying materials for and conducting pramlintide clinical trials, and
research activities to further explore amylin biology and other peptide
metabolic regulators. The amounts actually expended for each purpose may vary
significantly depending upon numerous factors, including the progress of the
Company's research and development programs, the results of preclinical and
clinical studies, the timing of regulatory submissions and approvals, if any,
technological advances, determinations as to commercial potential of the
Company's compounds, and the status of competitive products. Expenditures will
also depend upon the continued participation of Johnson & Johnson in the
collaboration, the availability of additional sources of funds, the
establishment of collaborative arrangements with other companies, and other
factors.
The Company currently leases or sub-leases approximately 72,000 square
feet of space. The Company is presently considering options to sub-lease an
additional 12,500 square feet of space for its product development efforts. In
addition, the Company is evaluating its options to lease additional laboratory
and office space in 1997. Should the Company lease this additional space, the
terms of the lease will be at competitive market rates. At this time, the
Company expects to incur approximately $1.3 million of capital expenditures in
the last three months of 1996. These expenditures will primarily be directed
toward the purchase of new equipment to support research and development
efforts. In addition, some capital expenditures will be directed toward the
purchase of equipment coming off of lease lines which will expire during the
year. The Company has entered into a $3.0 million loan agreement for the
financing of the majority of its equipment needs and intends to use this
financing source during 1996. As of September 30, 1996 approximately $1.9
million of this loan facility had been utilized. The terms of the loan agreement
call for amounts drawn down under the loan to be repaid monthly over a four year
period.
The Company does not expect to generate a positive internal cash flow
for several years due to substantial additional research and development costs,
including costs related to drug discovery, preclinical testing, clinical trials,
manufacturing costs, and general and administrative expenses necessary to
support such activities. Amylin anticipates that its existing cash including the
proceeds of its stock offerings completed in November, interest income from cash
investments, and financial payments and loan facilities from Johnson & Johnson,
will be adequate to satisfy the Company's capital requirements through 1998.
Assuming continued participation by Johnson & Johnson, the Company believes it
has reasonable alternatives to meet the financial needs of its programs.
However, there can be no assurance that additional financial resources will be
raised in the necessary time frame or on terms favorable to the Company.
The Company cannot assure that any of its drug candidates will
successfully meet all of their development goals. Important technical milestones
remain to be achieved before Amylin
<PAGE> 14
Pharmaceuticals can commercialize any of its products, and failure to achieve
these milestones could seriously jeopardize the Company's chances of success and
its financial condition would be adversely affected. The Company's future
capital requirements will depend on many factors, including continued scientific
progress in its research and development programs, the magnitude of these
programs, progress with preclinical and clinical trials, the time and costs
involved in preparing regulatory submissions and seeking regulatory approvals,
the costs involved in preparing, filing, prosecuting, maintaining, and enforcing
patents, competing technological and market developments, changes in the Johnson
& Johnson collaboration, the ability of the Company to establish collaborative
arrangements for its other research and development programs, and the cost of
manufacturing scale-up.
Prior to marketing, any drug developed by the Company must undergo
rigorous preclinical and clinical testing and an extensive regulatory approval
process mandated by the Food and Drug Administration (FDA) and equivalent
foreign authorities. Human clinical testing is now underway on the Company's
first product candidate, pramlintide. Subject to compliance with FDA
regulations, the Company plans to undertake extensive clinical testing to
demonstrate optimal dose, safety, and efficacy for its product candidates in
humans. Although preliminary clinical data about pramlintide's possible clinical
value warrants continuing Phase III trials, there can be no assurance that these
larger and longer studies will confirm the results of the Phase I and Phase II
studies to date. Further testing of pramlintide and the Company's other product
candidates in research or development may reveal undesirable and unintended side
effects or other characteristics that may prevent or limit their commercial use.
The Company or the FDA may suspend clinical trials at any time if the subjects
or patients participating in such trials are being exposed to unacceptable
health risks. There can be no assurance that the Company will not encounter
problems in clinical trials which will cause the Company or the FDA to delay or
suspend clinical trials. In addition, there can be no assurance that any of the
Company's products will obtain FDA approval for any indication. Products, if
any, resulting from Amylin Pharmaceuticals' research and development programs
are not expected to be commercially available for a number of years.
In addition, the Company believes that patent and other proprietary
rights are important to its business, and in this regard intends to file
applications as appropriate for patents covering both its products and
processes. Litigation, which could result in substantial cost to the Company,
may also be necessary to enforce any patents issued to the Company or to
determine the scope and validity of third-party proprietary rights. The Company
has received letters from a third party asserting that pramlintide is covered by
a patent which the Company has licensed from such third party. The third party
claims to be entitled to 50% of any sublicensing fees received from Johnson &
Johnson pursuant to the Collaboration Agreement, as well as a future running
royalty as specified in the license agreement. The Company believes that these
assertions are without merit and will vigorously defend
<PAGE> 15
against any claims related to the foregoing, should any such claims be brought.
The third party has been informed that the Company does not agree with its
assertions and that no such sublicensing moneys have been received from Johnson
& Johnson, which is not a sublicensee under the third party's patent. In
addition, should any of Amylin's competitors have prepared and filed patent
applications in the United States which claim technology also invented by the
Company, Amylin Pharmaceuticals may have to participate in interference
proceedings declared by the U.S. Patent and Trademark Office in order to
determine priority of invention and, thus, the right to a patent for the
technology, all of which could result in substantial cost to the Company to
determine its rights. It is uncertain whether any third-party patents will
require the Company to alter its products or processes, obtain licenses, or
cease certain activities. If any licenses are required, there can be no
assurances that the Company will be able to obtain any such license on
commercially favorable terms, if at all. Failure by the Company to obtain a
license to any technology that it may require to commercialize its products may
have a material adverse impact on the Company.
<PAGE> 16
ITEM 6
Exhibits and Reports Submitted on Form 8-K
(a) EXHIBITS. The exhibits listed below are filed with this report.
10.28 Patent and Technology License Agreement, Consulting Agreement
and Nonstatutory Stock Option Agreement dated October 1, 1996,
between the registrant and Dr. John Eng.
10.29 Collaborative Research and Assignment Agreement dated October
15, 1996, among the registrant, London Health Sciences Centre
and Dr. John Dupre.
(b) REPORTS ON FORM 8-K. No reports on Form 8-K were filed during the quarter
for which this report is filed.
<PAGE> 17
AMYLIN PHARMACEUTICALS, INC.
September 30, 1996
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed in its behalf by the
undersigned thereunto duly authorized.
Amylin Pharmaceuticals, Inc.
Date: November 12, 1996 By:/s/Marjorie T. Sennett
-------------------------------------
Marjorie T. Sennett
Vice President and Chief
Financial Officer
(on behalf of the registrant
and as the registrant's
principal financial officer)
<PAGE> 1
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.8
(b), 200.83 AND 230.406 * INDICATES OMITTED MATERIAL THAT IS THE
SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST THAT IS FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT 10.28
PATENT AND TECHNOLOGY LICENSE AGREEMENT
THIS AGREEMENT is made by and between DR. JOHN ENG ("LICENSOR"), whose
address is 5427 Arlington Avenue, Bronx, New York 10471, and AMYLIN
PHARMACEUTICALS, INC., ("LICENSEE"), a Delaware corporation having a principal
place of business located at 9373 Towne Centre Drive, San Diego, California
92121.
BACKGROUND
WHEREAS, LICENSOR is the sole and exclusive owner of certain
inventions included within PATENT RIGHTS and TECHNOLOGY RIGHTS, which
were made at the VA Medical Center, Bronx, New York, a component
institution of the U.S. Department of Veterans Affairs;
WHEREAS, LICENSOR desires to have such inventions, and such other
inventions as may be included within PATENT RIGHTS and TECHNOLOGY RIGHTS,
developed and used for the benefit of LICENSEE; and
WHEREAS, LICENSEE wishes to obtain from LICENSOR exclusive, perpetual
rights to all of the PATENT RIGHTS and TECHNOLOGY RIGHTS, and LICENSOR has the
power and authority to make such a grant to LICENSEE.
NOW, THEREFORE, in consideration of the mutual covenants and premises
herein contained, the parties hereto agree as follows:
I.
EFFECTIVE DATE
1.1 This Agreement shall be effective as of October 1, 1996.
<PAGE> 2
II.
DEFINITIONS
As used in this Agreement, the following terms shall have the meanings
indicated:
2.1 PATENT RIGHTS means U.S. Patent No. 5,424,286, and all related
applications or patents, including but not limited to all reissues,
reexaminations, and all foreign counterparts of any of the foregoing, as well as
all patents issued or issuing on patent applications filed for subject matter
included within TECHNOLOGY RIGHTS. A list of patent applications and patents
other than U.S. Patent No. 5,424,286 that are included within PATENT RIGHTS
shall be appended to this Agreement by amendment thereto upon the filing or
issuance, respectively, of any such applications or patents. Thereafter, such
list will be modified from time to time during the term of this Agreement to
reflect any further additions to PATENT RIGHTS. Failure to so append or modify
such list shall not affect any of LICENSEE'S rights under this Agreement.
2.2 TECHNOLOGY RIGHTS means (a) LICENSOR'S rights in all information or
discoveries useful in the development, manufacture, use or sale of any of the
subject matter included within PATENT RIGHTS, (b) LICENSOR'S rights in
inventions not within PATENT RIGHTS that have been conceived or actually or
constructively reduced to practice that relate to exendins or exendin analogs or
agonists or their development, manufacture, use or sale, and (c) LICENSOR'S
rights in inventions that are hereafter conceived or actually or constructively
reduced to practice at any time during the term of this Agreement and for a
period of one year thereafter, whether conceived or reduced to practice in
connection with the CONSULTING ARRANGEMENT, whether domestic or foreign, that
relate to exendins or exendin analogs or agonists or their development,
manufacture, use or sale. As used herein, "exendins or exendin analogs or
agonists" is meant to be defined broadly, and includes but is not limited to all
improvements of any of the subject matter included within PATENT RIGHTS, new or
different species of exendin, exendins altered by truncation, elongation,
deletion, chimerization with other molecules or portions thereof, or
substitution of one or more amino acids, and small molecule exendin agonists.
TECHNOLOGY RIGHTS do not include any subject matter that has been or is
discovered or invented by LICENSEE.
<PAGE> 3
2.3 LICENSED TERRITORY means the world.
2.4 LICENSED PRODUCT shall mean any product or products SOLD by
LICENSEE, any product or products used in or the product portion of services
rendered by LICENSEE, or process licensed by LICENSEE, that is covered by one or
more subsisting and unexpired claims of a patent included within PATENT RIGHTS.
2.5 SALE or SOLD shall mean the transfer or disposition of a LICENSED
PRODUCT for value to a party other than LICENSEE or an AFFILIATE, or LICENSOR.
2.6 AFFILIATE shall mean any business entity more than 50% owned by
LICENSEE, any business entity which owns more than 50% of LICENSEE, or any
business entity that is more than 50% owned by a business entity that owns more
than 50% of LICENSEE.
2.7 NET SALES shall mean the gross revenues received by LICENSEE from
the SALE of LICENSED PRODUCTS less sales and/or use taxes actually paid, import
and/or export duties actually paid, outbound transportation prepaid or allowed,
insurance, agents' commissions, and amounts allowed or credited due to returns,
rebates, discounts and the like (not to exceed the original billing or invoice
amount).
2.8 CONSULTING ARRANGEMENT shall mean the consulting relationship
between LICENSOR and LICENSEE established pursuant to that certain Consulting
Agreement between the parties of even date herewith, and which is attached
hereto as Exhibit A.
III.
LICENSOR'S OBLIGATION TO DISCLOSE INFORMATION, DISCOVERIES AND INVENTIONS
WITHIN TECHNOLOGY RIGHTS
3.1 LICENSOR shall within thirty (30) days of the effective date of
this Agreement fully disclose and make available to LICENSEE all TECHNOLOGY
RIGHTS and all other information and discoveries useful in the development,
manufacture, use or sale of any of the subject matter included within PATENT
RIGHTS, and all inventions not within PATENT RIGHTS that have been conceived or
actually or constructively reduced to practice that relate to exendins or
exendin analogs or agonists or their development, manufacture, use or sale, as
set forth in Section 2.2. Thereafter, throughout the term of this Agreement and
for a period of one year thereafter, LICENSOR shall promptly and fully
<PAGE> 4
disclose and make available to AMYLIN all TECHNOLOGY RIGHTS and all other such
information and discoveries, and all other such inventions that are conceived or
reduced to practice. As a part of such disclosures to be made by LICENSOR to
LICENSEE within thirty days of the effective date, and from time to time
thereafter as provided herein, LICENSOR shall transfer to LICENSEE copies of all
documents which describe or relate to subject matter required to be disclosed
hereunder, including but not limited to experimental data, experimental
procedures, journal entries, laboratory notebook pages, research reports, plans,
drawings, designs, specifications, formulae, draft manuscripts, and invention
disclosures.
IV.
WARRANTY; SUPERIOR RIGHTS
4.1 Except for the rights of the Government of the United States of
America as set forth hereinbelow in Section 4.2, LICENSOR represents and
warrants that he is the sole and exclusive owner of the entire right, title, and
interest in and to U.S. Patent No. 5,424,286, and that he has the sole right to
grant licenses thereunder, and that he has not granted, and will not grant,
licenses thereunder to any other entity that would restrict rights granted to
LICENSEE except as stated herein. LICENSOR represents and warrants that he will
use his best efforts to obtain sole and exclusive ownership of all other
inventions included within PATENT RIGHTS and TECHNOLOGY RIGHTS, and that he has
not granted, and will not grant, licenses thereunder to any other entity that
would restrict rights granted to LICENSEE except as required by the Government
of the United States of America.
4.2 LICENSEE understands that the subject matter described and claimed
in U.S. Patent No. 5,424,286 was developed under an employment and funding
agreement with the VA Medical Center, Bronx, New York, and that the Government
of the United States of America has retained a nonexclusive, irrevocable,
royalty-free license with power to grant licenses for all governmental purposes
and certain other rights relative thereto. This Agreement is explicitly made
subject to the Government's rights under such agreement and any applicable law
or regulation. To the extent that there is a conflict between any such
agreement, applicable law or regulation and this Agreement, the terms of
<PAGE> 5
such Government agreement, applicable law or regulation shall prevail.
V.
LICENSE
5.1 LICENSOR hereby grants to LICENSEE an exclusive license under
PATENT RIGHTS and TECHNOLOGY RIGHTS to manufacture, have manufactured, import,
use, sell and offer to sell LICENSED PRODUCTS within LICENSED TERRITORY for any
and all uses in any and all fields.
5.2 LICENSEE shall have the exclusive right to grant sublicenses
consistent with this Agreement. Upon termination of this Agreement, no existing
sublicenses granted by LICENSEE shall be affected by such termination, and shall
remain in effect according to their terms.
5.3 All inventions related to the subject matter of this Agreement that
are made solely by employees or agents (other than LICENSOR) of LICENSEE shall
be the sole and exclusive property of LICENSEE.
VI.
PAYMENTS AND REPORTS
6.1 In consideration of rights granted by LICENSOR to LICENSEE under
this Agreement, LICENSEE agrees to pay LICENSOR the following:
(a) A nonrefundable fee of (*) upon execution of this Agreement;
(b) Milestone payments as follows:
(i) (*) upon the one-year anniversary of the effective date of
this Agreement, provided that this Agreement has not been terminated pursuant to
Section 6.2 hereof;
(ii) (*) upon the filing of an IND for a LICENSED PRODUCT with
the U.S. Food and Drug Administration; and
* Confidential Treatment Requested
<PAGE> 6
(iii)(*) upon initiation of Phase III clinical trials of a
LICENSED PRODUCT in the United States;
(c) A running royalty of (*********) of NET SALES for LICENSED
PRODUCTS; provided, however, that (*************) in lieu of any obligation,
express or implied, to develop and commercialize any LICENSED PRODUCT within the
scope of this Agreement, in the event that LICENSEE in its sole discretion
determines to market one or more exendin or exendin analog products that do not
fall within the scope of one or more subsisting and unexpired claims of any
patent included within PATENT RIGHTS (an "ALTERNATIVE EXENDIN PRODUCT") instead
of a LICENSED PRODUCT, LICENSOR (***********************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
**************************). LICENSEE will be responsible to
LICENSOR for the payment of any running royalty (*******************************
************) with respect to sales made by a sublicensee of said LICENSED
PRODUCT or said first ALTERNATIVE EXENDIN PRODUCT as though they were made by
LICENSEE. Only a single royalty shall be paid with respect to any LICENSED
PRODUCT regardless of the number of claims or the number of patents within
Patent Rights that may cover said LICENSED PRODUCT. No payments will be owed by
LICENSEE to LICENSOR by reason of the marketing of any ALTERNATIVE EXENDIN
PRODUCT other than the above-referenced first-marketed ALTERNATIVE EXENDIN
PRODUCT.
6.2 Concurrently herewith, and in further view of the lack of any
obligation of LICENSEE to develop and commercialize any LICENSED PRODUCT within
the scope of this Agreement, (*************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
**.)
* Confidential Treatment Requested
<PAGE> 7
6.3 During the Term of this Agreement and for one (1) year thereafter,
LICENSEE shall keep complete and accurate records of its and its sublicensees'
SALES and NET SALES of LICENSED PRODUCTS to enable the royalties payable
hereunder to be determined. Upon reasonable notice from LICENSOR and subject to
LICENSEE'S ordinary nondisclosure agreement, LICENSEE shall permit LICENSOR or
its representatives, at LICENSOR'S expense, to periodically (but not more than
once per every 12 months) examine its books, ledgers, and records during regular
business hours for the purpose of and to the extent necessary to verify any
report required under this Agreement. In the event that the amounts due to
LICENSOR are determined to have been underpaid by more than 10%, LICENSEE shall
pay the cost of such examination, and accrued interest calculated at 12% per
annum.
6.4 Commencing with the first commercial launch of any LICENSED
PRODUCT, within forty-five (45) days after March 31, June 30, September 30, and
December 31, LICENSEE shall deliver to LICENSOR a true and accurate report,
giving such particulars of the business conducted by LICENSEE and its
sublicensee, if any exist, during the preceding three (3) calendar months under
this Agreement as are pertinent to an account for payments hereunder. Such
report shall include at least (a) the quantities of LICENSED PRODUCT that it has
produced; (b) the total SALES, (c) the calculation of royalties thereon; and (d)
the total royalties so computed and due LICENSOR. Simultaneously with the
delivery of each such report, LICENSEE shall pay to LICENSOR the amount, if any,
due for the period of such report. If no payments are due, it shall be so
reported. It is understood and agreed that any milestone payment made to
LICENSOR hereunder will not in any manner be applied against or used to offset
any royalties or any per year payments due.
6.5 The parties understand and expressly agree that LICENSOR shall have
no obligation under this Agreement, express or implied, to undertake to develop
or, if developed, to commercialize any LICENSED PRODUCT or any ALTERNATIVE
EXENDIN PRODUCT. Nevertheless, upon the request of LICENSOR but not more often
than once per calendar year, LICENSEE shall deliver to LICENSOR a brief summary
report (subject to confidentiality) as to LICENSEE'S efforts and accomplishments
during the preceding year in developing or commercializing any LICENSED PRODUCT
or ALTERNATIVE EXENDIN PRODUCT.
<PAGE> 8
6.6 LICENSEE shall reimburse LICENSOR (*) for all his out-of- pocket
expenses thus far incurred in filing, prosecuting, enforcing and maintaining
U.S. Patent No. 5,424,286 exclusively licensed hereunder, and shall pay all such
future expenses so long as and in such countries as its license remains
exclusive.
6.7 All amounts payable hereunder by LICENSEE shall be payable in
United States funds. Checks shall be made payable to Dr. John Eng.
VII.
TERM AND TERMINATION
7.1 The term of this Agreement shall be perpetual from the Effective
Date set forth hereinabove unless terminated pursuant to Section 7.2 below.
7.2 This Agreement will terminate:
(a) automatically if LICENSEE shall become bankrupt or insolvent
and/or if the business of LICENSEE shall be placed in hand of a receiver,
assignee, or trustee, whether by voluntary act of LICENSEE or otherwise;
(b) upon one hundred twenty (120) days written notice if any party
shall breach or default on any obligation under this Agreement; provided,
however, such party may avoid such termination if before the end of such period
such party notifies the other parties that such breach has been cured and states
the manner of such cure; or,
(c) upon one hundred twenty (120) days written notice by LICENSEE
to LICENSOR.
7.3 Upon termination of this Agreement for any cause, nothing herein
shall be construed to release either party of any obligation matured prior to
the effective date of such termination. LICENSEE may, after the effective date
of such termination, sell all LICENSED PRODUCTS that it may have on hand at the
date of termination, provided that it pays any earned royalty thereon that may
be due as provided in this Agreement.
* Confidential Treatment Requested
<PAGE> 9
7.4 In the event that, by the filing of an action against LICENSOR or
otherwise, LICENSEE challenges the scope or validity of a patent or claim of a
patent within the PATENT RIGHTS, or challenges whether a product is a LICENSED
PRODUCT, such challenge shall not constitute cause for termination within the
meaning of Section 7.3 hereof, and LICENSOR shall not have the right to
terminate this Agreement as a result of any such challenge. It is understood and
agreed that this Agreement shall remain in full force and effect during and
throughout any such challenge, and shall remain in full force and effect whether
or not LICENSEE withholds from LICENSOR any payments or royalties that LICENSOR
believes may be owed.
VIII.
INFRINGEMENT BY THIRD PARTIES
8.1 LICENSEE shall have the exclusive right, but not the obligation, at
its sole expense, to initiate, prosecute, and control any action or suit, or
otherwise proceed, against others who in its judgment have committed or are
committing acts of infringement of any patent licensed hereunder. In the event
of the initiation by LICENSEE of any such action, suit, or proceeding for
infringement, which shall be within the sole discretion of LICENSEE, LICENSEE
shall be entitled to retain any recovery obtained as a result thereof. At
LICENSEE'S reasonable cost and expense, LICENSOR shall agree to be joined by as
a party with LICENSEE in any such action, suit, or other proceeding, and shall
give all reasonable assistance and authority to LICENSEE to control, file and
prosecute any such action, suit, or other proceeding as necessary.
8.2 In any such action, suit or other proceeding, LICENSOR shall
cooperate fully, and upon the request of LICENSEE, LICENSOR shall make available
to LICENSEE at reasonable times and under appropriate conditions all relevant
information, including records, papers, samples, specimens, and the like which
are in his possession or control.
IX.
ASSIGNMENT
9.1 Except in connection with the sale of LICENSEE'S business (by sale
of assets, sale of stock, merger, or otherwise)
<PAGE> 10
this Agreement may not be assigned by LICENSEE without the prior written consent
of LICENSOR, which consent shall not be unreasonably withheld or delayed. This
Agreement may not be assigned by LICENSOR.
X.
PATENT MARKING
10.1 LICENSEE agrees to mark permanently and legibly all products and
documentation manufactured or sold by it under this Agreement with such patent
notice as may be permitted or required under Title 35, United States Code.
XI.
INDEMNIFICATION
11.1 LICENSEE shall hold harmless and indemnify LICENSOR from and
against those damages finally awarded a third party in respect of any claims,
demand, or causes of action whatsoever, including without limitation those
arising on account of any injury or death of persons or damage to property
caused by, or arising out of, or resulting from, the exercise or practice of the
license granted hereunder by LICENSEE or its directors, officers, employees,
agents or representatives, except to the extent caused by the technology or
intellectual property as licensed to LICENSEE under this Agreement, or by the
negligence, recklessness or willful misconduct of LICENSOR for which LICENSOR,
to the extent authorized under the constitution and laws of the State of
California, shall similarly hold harmless and indemnify LICENSEE, its directors,
officers, employees, agents or representatives.
11.2 In the event of any infringement or asserted infringement by
LICENSEE of any third party's intellectual property (collectively, "Alleged
Third Party Rights") by reason of the manufacture, import, use, sale or offer
for sale of any LICENSED PRODUCT, LICENSOR shall cooperate in good faith with
LICENSEE and on a mutual and reasonable basis:
(a) To negotiate and settle any dispute with any such third party
concerning the Alleged Third Party Rights, and otherwise resolve any such
infringement or alleged infringement and secure LICENSEE'S continued rights to
the Alleged Third Party Rights, if necessary or desirable; and
<PAGE> 11
(b) To make a reasonable and equitable adjustment, if any, to the
royalties paid or otherwise due under this Agreement in respect of licenses or
other rights obtained by LICENSEE from third parties under such Alleged Third
Party Rights in order for LICENSEE to continue to exercise rights granted under
this Agreement.
11.3 In no event shall any party to this Agreement be liable for
indirect, consequential or similar damages, even if advised of the possibility
of such liability.
XII.
CONFIDENTIAL INFORMATION
12.1 LICENSOR and LICENSEE each agree that all information disclosed to
one by the other in connection with this Agreement shall be received in strict
confidence, used only for the purposes of this Agreement, and not disclosed by
the recipient party (except as required by law or court order), its agents or
employees without the prior written consent of the other party, unless such
information (a) was in the public domain at the time of disclosure, (b) later
became part of the public domain through no act or omission of the recipient
party, its employees, agents, successors or assigns, (c) was lawfully disclosed
to the recipient party by a third party having the right to disclose it, (d) was
already known by the recipient party at the time of disclosure, (e) was
independently developed or (f) is required to be submitted to a government
agency pursuant to any preexisting obligation.
12.2 Each party's obligation of confidence hereunder shall be fulfilled
by using at least the same degree of care with the other party's confidential
information as it uses to protect its own confidential information. This
obligation shall exist while this Agreement is in force and for a period of
three (3) years thereafter.
XIII.
PATENTS AND INVENTIONS; SECRECY; PUBLICATIONS
13.1 Expenses thus far incurred relating to U.S. Patent No. 5,424,286,
shall be reimbursed only in accordance with Section 6.6 above.
<PAGE> 12
13.2 As provided by Section 3.1, LICENSOR will within thirty days of
the effective date, and promptly from time to time thereafter, fully disclose
and make available to LICENSEE information and discoveries and inventions
falling within TECHNOLOGY RIGHTS. If after consultation between LICENSEE and
LICENSOR, LICENSEE determines that a patent application should be filed,
LICENSEE will prepare and file an appropriate patent application or
applications, and LICENSEE will pay all costs of searching, preparing, filing,
prosecuting and maintaining same. LICENSEE shall provide LICENSOR with a copy of
such applications as well as copies of any documents received or filed during
prosecu tion thereof.
13.3 LICENSOR agrees to cooperate with LICENSEE to whatever extent is
necessary to procure, exploit, and enforce patent or other protection of any
rights to information and discoveries and inventions falling within TECHNOLOGY
RIGHTS, including the preparation and filing of patent applications as set forth
hereinabove in Section 13.2, which cooperation shall include but not be limited
to communicating to LICENSEE any facts known to LICENSOR concerning such
information and discoveries and inventions or testifying in any legal
proceedings, signing all documents for applications for patents, including all
divisional, continuation and continuation-in-part, reissue, and reexamination
applications, and counterpart foreign applications, making all rightful oaths,
and all other acts required to assist Licensor in obtaining, maintaining and
enforcing proper patent or other protection for such rights in all countries.
13.4 If LICENSEE notifies LICENSOR that it does not intend to pay the
costs of an application in accordance with Section 13.2 above, then LICENSOR may
file such application at its own expense and LICENSEE shall have no rights to
such invention.
13.5 LICENSOR agrees to maintain TECHNOLOGY RIGHTS in confidence and,
subject to Section 13.4 hereinabove and any obligations that he may have as a
result of his employment at the VA Medical Center, to use the same only pursuant
to and in the furtherance of this Agreement. While it is understood by the
parties that information gained and discoveries and inventions made by LICENSOR
that fall within TECHNOLOGY RIGHTS eventually may be disseminated to the
scientific community, LICENSOR agrees that he shall not disseminate such
information or discoveries or inventions if such dissemination would adversely
affect LICENSEE'S opportunities to obtain patent protection for any TECHNOLOGY
RIGHTS
<PAGE> 13
in the United States or in any foreign countries, or to maintain any TECHNOLOGY
RIGHTS as trade secrets. Accordingly, LICENSOR further agrees that he shall not
submit information or discoveries or inventions within TECHNOLOGY RIGHTS for
publication or publish or present such information or discoveries or inventions
unless and until LICENSEE has received a copy of the proposed publication or
presentation, and has consented in writing to such publication or presentation.
XIV.
GENERAL
14.1 This Agreement and the Consulting Agreement of even date herewith
constitute the entire and only Agreements between the parties for PATENT RIGHTS
and TECHNOLOGY RIGHTS and all other prior negotiations, representations,
agreements and understandings are superseded hereby. No agreements altering or
supplementing the terms hereof may be made except by means of a written document
signed by the duly authorized representatives of the parties.
14.2 Any notice required by this Agreement shall be in writing and
shall be given by prepaid, first class, certified mail, return receipt
requested, addressed in the case of LICENSOR to:
Dr. John Eng
5427 Arlington Avenue
Bronx, New York 10471
or in the case of LICENSEE to:
Amylin Pharmaceuticals, Inc.
9373 Towne Centre Drive
San Diego, California 92121
ATTENTION: Bradford J. Duft, Esq.
or such other address as may be given from time to time under the terms of this
notice provision.
14.3 LICENSEE shall comply with all applicable federal, state and local
laws and regulations in connection with its activities pursuant to this
Agreement.
<PAGE> 14
14.4 This Agreement shall be construed and enforced in accordance with
the laws of the United States of America and of the State of California, except
its choice of law provisions.
14.5 Failure of a party to enforce a right under this Agreement shall
not act as a waiver of that right or the ability to later assert that right
relative to the particular situation involved.
14.6 Headings included herein are for convenience only and shall not be
used to construe this Agreement.
14.7 If any provision of this Agreement shall be found by a court to be
void, invalid or unenforceable, the same shall be reformed to comply with
applicable law or stricken if not so conformable, so as not to affect the
validity or enforceability of this Agreement.
14.8 This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, parties hereto have caused their duly authorized
representatives to execute this AGREEMENT.
DR. JOHN ENG AMYLIN PHARMACEUTICALS, INC.
/s/John Eng By:/s/Bradford J. Duft
- ----------------------------------- -------------------------------
Bradford J. Duft, Esq.
Vice President and General
Counsel
<PAGE> 15
EXHIBIT A TO PATENT AND TECHNOLOGY AGREEMENT BETWEEN DR. JOHN ENG
AND AMYLIN PHARMACEUTICALS, INC.
C O N F I D E N T I A L
CONSULTING AGREEMENT
The following contains all the items of an at-will
consulting agreement between AMYLIN PHARMACEUTICALS, INC., a
Delaware corporation (the "Company") and Dr. John Eng
("Consultant").
The nature of the services Consultant will provide as a consultant to
the Company, the amount of time committed and Consultant's compensation are set
forth in Addendum 1 hereto. In rendering such services to the Company,
Consultant shall act as an independent contractor and not as an employee of the
Company and shall be free to dispose of such portion of Consultant's entire
time, energy and skill as Consultant has not agreed to devote to the Company;
provided, that Consultant will not during the term hereof provide to any person
or entity any services related to the subject matter or nature of the services
to be provided hereunder without the prior express written consent of the
Company. The Company or Consultant may terminate this Agreement at any time,
with or without cause.
Consultant understands that as part of the consideration for its
retention as a consultant by the Company, it has not brought and will not bring
with it to the Company or use in the performance of its responsibilities at the
Company any equipment, supplies, facility, or trade secret information of any
current or former employer which are not generally available to the public,
unless Consultant has obtained written authorization for their possession and
use. Consultant also understands that, in its retention as a consultant with the
Company, Consultant is not to breach any obligation of confidentiality that it
has to any third party, and Consultant agrees that it shall fulfill all such
obligations during its retention as consultant with the Company.
Consultant understand that the Company possesses and will continue to
possess information that has been created, discovered or developed by the
Company (or that has otherwise become known
<PAGE> 16
to the Company) which has commercial value to the Company. This information
includes, but is not limited to, (a) information created, discovered, developed,
or made known by Consultant or to Consultant arising out of or in connection
with its retention as a consultant by the Company, and (b) information in which
property rights have been assigned or otherwise conveyed to the Company. All of
the aforementioned information is hereinafter called "Proprietary Information."
By way of illustration, but not limitation, Proprietary Information includes
trade secrets, processes, formulae, data and know-how, improvements, inventions,
techniques, marketing plans, strategies, forecasts and customer lists.
In consideration of its retention as a consultant to the Company, and
the compensation received by it from the Company from time to time, Consultant
hereby agrees as follows:
1. All Proprietary Information shall be the sole property of the
Company and its assigns, and the Company and its assigns shall be the sole owner
of all patents and other rights in connection therewith. Consultant hereby
assigns to the Company any rights it may have or acquire in all Proprietary
Information. At all times during its retention as a consultant by the Company
and at all times after termination of such retention as a consultant, Consultant
will keep in confidence and trust all Proprietary Information, and will not use
or disclose any Proprietary Information or anything relating to it without the
express written consent of the Company, except as may be necessary in the
ordinary course of performing its duties as a consultant of the Company.
2. Consultant agrees that during the period that it is retained as a
consultant to the Company, it will not, without the Company's express written
consent, engage in any employment or activity (whether as a consultant, advisor
or otherwise) in any business competitive with the Company.
3. All documents, data, records, apparatuses, equipment and other
physical property, whether or not pertaining to Proprietary Information,
furnished to Consultant by the Company or produced by Consultant or others in
connection with its retention as a consultant shall be and remain the sole
property of the Company and shall be returned promptly to the Company as and
when requested by the Company. Should the Company not so request, Consultant
shall return and deliver all such property
<PAGE> 17
upon termination of its retention as a consultant by itself or by the Company
for any reason, and Consultant will not take with it any such property or any
reproduction of such property upon such termination.
4. Consultant agrees that for a period of one year following
termination of its retention as a consultant with the Company, it will not
solicit or in any manner encourage employees of the Company to leave its employ.
5. Consultant will promptly disclose to the Company, or any persons
designated by it, all improvements, inventions, discoveries, ideas, formulae,
processes, techniques, know-how and data, whether or not patentable, made or
conceived or reduced to practice or learned by Consultant, either alone or
jointly with others, during the period of its retention as a consultant which
(a) are within the scope of the consulting services to be provided by Consultant
under this Agreement and are related to or useful in the business of the
Company, or (b) result from tasks assigned Consultant by the Company, or (c) are
funded by the Company, or (d) result from use of premises owned, leased or
contracted for by the Company (all said improvements, inventions, discoveries,
ideas, formulae, processes, techniques, know-how and data shall be collectively
hereinafter called "Inventions"). Such disclosure shall continue for one year
after termination of this Agreement with respect to anything that would be an
Invention if made, conceived, reduced to practice or learned during the term
hereof.
6. Consultant agrees that all Inventions shall be the sole property of
the Company and its assigns, and the Company and its assigns shall be the sole
owner of all patents and other rights in connection therewith. Consultant hereby
assigns to the Company any rights it may have or acquire in all Inventions.
Consultant further agrees as to all Inventions to assist the Company in every
proper way (but at the Company's expense) to obtain and from time to time
enforce patents on the Inventions in any and all countries, and to that end
Consultant will execute all documents for use in applying for and obtaining such
patents thereon and enforcing same, as the Company may desire, together with any
assignments thereof to the Company or persons designated by it. Consultant's
obligation to assist the Company in obtaining and enforcing patents for the
Inventions in any and all countries shall continue beyond the termination of its
retention as a consultant, but the Company shall compensate Consultant at a
<PAGE> 18
reasonable rate commensurate with rates paid by others for comparable services
after such termination for time actually spent by Consultant at the Company's
request on such assistance. In the event that the Company is unable for any
reason whatsoever to secure Consultant's signature to any lawful and necessary
document required to apply for or execute any patent application with respect to
an Invention(s) (including renewals, extensions, continuations, divisionals or
continuations in part thereof), Consultant hereby irrevocably designates and
appoints the Company and its duly authorized officers and agents as Consultant's
agents and attorneys-in-fact to act for and in Consultant's behalf and instead
of Consultant, to execute and file any such application and to do all other
lawfully permitted acts to further the prosecution and issuance of patents
thereon with the same legal force and effect as if executed by Consultant.
7. As a matter of record Consultant has attached hereto as Addendum 2 a
complete list of inventions or improvements relevant to the subject matter of
Consultant's retention as a consultant by the Company which have been made or
conceived or first reduced to practice by Consultant alone or jointly with
others prior to its engagement by the Company which Consultant desires to remove
from the operation of this Agreement; and Consultant covenants that such list is
complete.
8. Consultant represents that its performance of all the terms of this
Agreement and that its retention as a consultant by the Company does not and
will not breach any agreement to keep in confidence proprietary information
acquired by Consultant in confidence or in trust prior to its retention as a
consultant by the Company. Consultant has not entered into, and Consultant
agrees it will not enter into, any agreement either written or oral in conflict
herewith.
9. Consultant agrees that in addition to any other rights and remedies
available to the Company for any breach by Consultant of its obligations
hereunder, the Company shall be entitled to enforcement of Consultant's
obligations hereunder by court injunction.
10. If any provision of this Agreement shall be declared invalid,
illegal or unenforceable, such provision shall be severed and all remaining
provisions shall continue in full force and effect.
<PAGE> 19
11. This Agreement shall be effective as of the first day of
Consultant's retention as a consultant by the Company.
12. The term Company, as used herein, shall include any subsidiary or
affiliate of AMYLIN PHARMACEUTICALS, INC.
13. This Agreement shall be binding upon Consultant, its heirs,
executors, assigns and administrators and shall inure to the benefit of the
Company, its successors and assigns.
14. This Agreement shall be governed by and construed in accordance
with the laws of the State of California (except its choice of law rules), and
the parties to this Agreement hereby submit to the jurisdiction and venue of the
California courts, both state and federal.
Dated: October 1, 1996
AGREED AND ACCEPTED: AGREED AND ACCEPTED:
DR. JOHN ENG AMYLIN PHARMACEUTICALS, INC.
/s/John Eng /s/Bradford J. Duft
- --------------------------- ------------------------------
Bradford J. Duft, Esq.
Vice President and General
Counsel
<PAGE> 20
ADDENDUM 1
Nature of Consulting: Consultant shall consult with and
provide services to the Company in
the following subject matter: the
chemical, biological, and
physiological characteristics of
exendins, exendin analogs and
agonists, and their use for the
treatment of diabetes. Any
activity of Consultant with respect
to such subject matter shall be
deemed to be in connection with its
consulting.
Amount: Consultant shall render such
services at such times and places
as the Company may reasonably
request.
Compensation: In consideration of the maintenance
by Consultant of the terms and
conditions of this Agreement,
including consultation with and
provision of services to the
Company in the aforementioned
subject matter, Consultant shall be
compensated by payment of (*) per
diem. In addition, Consultant
shall be reimbursed for reasonable
travel expenses incurred in
performance of his consulting
obligations, provided expenses
shall be documented by receipts.
* Confidential Treatment Requested
<PAGE> 21
ADDENDUM 2
Amylin Pharmaceuticals, Inc.
9373 Towne Centre Drive
Suite 250
San Diego, California 92121
Ladies and Gentlemen:
The following is a complete list of all inventions or improvements or
works of authorship relevant to the subject matter of consulting for AMYLIN
PHARMACEUTICALS, INC. (the "Company") that have been made or conceived or first
reduced to practice by me alone or jointly with others prior to consulting for
the Company, and which I desire to remove from the operation of the Consulting
Agreement between the Company and myself:
X No inventions or improvements. /s/ J.E. 10/2/96
- -------- --------------------------
Initial and Date
See below.
- -------- ------------------------
Initial and Date
Additional sheets attached.
- -------- ------------------------
Initial and Date
<PAGE> 22
EXHIBIT B TO PATENT AND TECHNOLOGY AGREEMENT BETWEEN DR. JOHN ENG AND AMYLIN
PHARMACEUTICALS, INC.
C O N F I D E N T I A L
NONSTATUTORY STOCK OPTION
John Eng, Optionee:
Amylin Pharmaceuticals, Inc. (the "Company"), pursuant to its 1991 Stock
Option Plan (the "Plan") has this day granted to you, the optionee named above,
an option to purchase shares of the common stock of the Company ("Common
Stock"). This option is not intended to qualify as an "incentive stock option"
within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code").
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option is
(*). This option shall become exercisable("vest") as follows: (*) shares subject
to this option shall vest as of the date hereof, and an additional (*) shares
shall vest on each anniversary of the effective date of the date hereof for the
next four (4) years, so long as that certain Patent and Technology License
Agreement of even date herewith between the Company and Optionee (the "License
Agreement") has not been terminated pursuant to its terms. In the event of any
such termination, all further vesting under this option shall cease. In no event
shall this option be exercisable with respect to any shares that have not vested
pursuant to the terms of this option.
Notwithstanding the foregoing paragraphs, in the event of the
occurrence of a "Change in Control" (defined below) of the Company, then
immediately prior to the effective date of such Change in Control, the foregoing
vesting schedule shall be accelerated and this option shall become fully vested.
For purposes of the preceding paragraph, "Change in Control" is
* Confidential Treatment Requested
<PAGE> 23
defined as any of the following: (i) any merger, acquisition, consolidation,
reorganization or other similar transaction pursuant to which the shareholders
of the Company immediately prior to such merger, consolidation, reorganization
or other similar transaction do not, immediately thereafter, own more than 50%
of the outstanding voting securities of the resulting entity or (ii) any
liquidation or dissolution of the Company or any sale of all or substantially
all of the assets of the Company.
2. (a) The exercise price of this option is $11.50 per share, being not
less than the fair market value of the Common Stock on the date of grant of this
option.
(b) Payment of the exercise price per share is due in full upon
exercise of all or any part of each installment which has accrued to you. You
may elect, to the extent permitted by applicable statutes and regulations, to
make payment of the exercise price under one of the following alternatives:
i. Payment of the exercise price per share in cash (including
check) at the time of exercise;
ii. 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 Common Stock;
iii. Provided that at the time of exercise the Company's Common
Stock is publicly traded and quoted regularly in the Wall Street Journal,
payment by delivery of already-owned shares of Common Stock of the Company, 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
interests, which Common Stock of the Company shall be valued at its fair market
value (determined in accordance with the Plan) on the date of exercise;
iv. Payment by a combination of the methods of payment
permitted by subparagraph 2(b)(i) through 2(b)(iii) above.
3. The minimum number of shares with respect to which this option may
be exercised at any one time is one hundred (100), except that this minimum
shall not apply with respect to the final exercise of this option. In no event
may this option be
<PAGE> 24
exercised for any number of shares which would require the issuance of anything
other than whole shares.
4. Notwithstanding anything to the contrary contained herein, this
option may not be exercised unless the shares issuable upon exercise of this
option are then registered under the 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 Act.
5. The term of this option commences on the date hereof and, unless
sooner terminated as set forth below or in the Plan, terminates on October 1,
2006 (which date shall be no more than ten (10) years from the date this option
is granted). In no event may this option be exercised on or after the date on
which it terminates. Notwithstanding the foregoing, this option shall terminate
prior to the expiration of its term as follows: three (3) months after the
effective date of termination of the License Agreement pursuant to its terms.
However, this option may be exercised following the effective date
of such a termination of the License Agreement only as to that number of shares
as to which it was exercisable on the effective date of such termination of the
License Agreement under the provisions of paragraph 1 of this option.
6. (a) This option may be exercised, to the extent specified above,
by delivering a notice of exercise (in a form designated by the Company)
together with the exercise price to the Secretary of the Company, or to such
other person as the Company may designate, during regular business hours,
together with such additional documents as the Company may then require pursuant
to subparagraph 6(f) of the plan.
(b) By exercising this option you agree that the Company may
require you to enter an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of
the exercise of this option; the lapse of any substantial risk of forfeiture to
which the shares are subject at the time of exercise; or the disposition of
shares acquired upon such exercise.
7. This option is not transferable, except by will or by the laws of
descent and distribution, and is exercisable during your life only by you.
<PAGE> 25
8. This option is not an employment contract and nothing in this
option shall be deemed to create in any way whatsoever any obligation on your
part to continue your services for the Company, or of the Company to continue to
retain your services for the Company.
9. This Stock Option has been granted to you in accordance with the
License Agreement of even date herewith, and for which this award of Stock
Options constitutes partial payment.
10. Any notices provided for in this option or the Plan shall be given
in writing and shall be deemed effectively given upon receipt or, in the case of
notices delivered by the Company to you, five (5) days after deposit in the
United States mail, postage prepaid, addressed to you at the address specified
below or at such other address as you hereafter designate by written notice to
the Company.
11. This option is subject to all the provisions of the Plan, a copy of
which is attached hereto and its provisions are hereby made a part of this
option, including without limitation the provisions of paragraph 5 of the Plan
relating to option provisions, and is further subject to all interpretations,
amendments, rules and regulations which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the
provisions of this option and those of the Plan, the provisions of the Plan
shall control.
Dated the October 1, 1996
Very Truly Yours,
AMYLIN PHARMACEUTICALS, INC.
By /s/Bradford J. Duft
----------------------------------
Duly authorized on behalf of
the Board of Directors
<PAGE> 26
The undersigned:
Acknowledges receipt of the foregoing option and the attachments
referenced therein and understands that all rights and liabilities with respect
to this option are set forth in the option and the Plan; and
Acknowledges that the undersigned must execute the Agreement and return
it to the Vice President and General Counsel of the Company within fifteen (15)
days of the date the Agreement is received or else the grant of Stock Options
set forth in the Agreement shall become null and void; and
Acknowledges that as of the date of grant of this option, it sets forth
the entire understanding between the undersigned optionee and the Company and
its affiliates regarding the acquisition of stock in the Company and supersedes
all prior oral and written agreements on that subject with the exception of the
following agreements only:
NONE/s/J.E.
---------
(Initial)
/s/ John Eng
---------------------------
Optionee
Address: 5427 Arlington Ave.
Bronx, New York
10471
<PAGE> 1
CONFIDENTIAL TREATMENT REQUESTED UNDER 17 C.F.R. SECTIONS 200.8
(b), 200.83 AND 230.406 * INDICATES OMITTED MATERIAL THAT IS THE
SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST THAT IS FILED
SEPARATELY WITH THE COMMISSION
EXHIBIT 10.29
COLLABORATIVE RESEARCH AND ASSIGNMENT AGREEMENT
THIS AGREEMENT is entered into as of October 15, 1996 (the "Effective
Date") by and among AMYLIN PHARMACEUTICALS, INC., a Delaware corporation having
offices at 9373 Towne Centre Drive, San Diego, California 92121 ("AMYLIN"),
LONDON HEALTH SCIENCES CENTRE, an institution having offices at Room A105A,
Westminster Tower, Victoria Campus, P.O. Box 5375, 800 Commissioners Road, East,
London, Ontario N6A 4G5 ("LHSC") and DR. JOHN DUPRE ("DUPRE").
WHEREAS, LHSC and DUPRE possess scientific and technical proprietary
technology and resources relating to the use of GLP-1 (*******) in the treatment
of diabetes;
WHEREAS, DUPRE invented a new and useful invention for the treatment of
diabetes, for which an application for patent was filed in Great Britain on May
12, 1994, and assigned Serial No. 9409496.8, and for which an international
patent application (attached hereto as Exhibit A) was filed on May 12, 1995
under the Patent Cooperation Treaty, and assigned International Application
Number PCT/CA95/00287;
WHEREAS, AMYLIN possesses scientific and technical proprietary
technology and resources relating to the discovery, development and
commercialization of drug candidates for the treatment of diabetes, and is
desirous of acquiring the exclusive right, title and interest in and to said
invention and applications, and to the Letters Patent to be granted and issued
pursuant thereto in the United States of America and its territories and
possessions, and all countries foreign thereto;
WHEREAS, LHSC and DUPRE desire to assign to AMYLIN all right, title and
interest in and to said invention and applications, and to the Letters Patent to
be granted and issued pursuant thereto in
* Confidential Treatment Requested
<PAGE> 2
the United States of America and its territories and possessions, and all
countries foreign thereto, and AMYLIN desires to have such invention and
applications, and said Letters Patent to be granted and issued pursuant thereto,
assigned to it by LHSC and DUPRE; and
WHEREAS, the parties desire to establish a collaborative relationship
to perform clinical research to investigate the use of GLP-1 (*************) in
the treatment of diabetes, as more fully set forth below.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants set forth below, the parties hereby agree as follows:
ARTICLE 1
DEFINITIONS
1.1 "Affiliate" means an individual, trust, business trust, joint
venture, partnership, corporation, association or any other entity which owns,
is owned by or is under common ownership with a party. For the purposes of this
definition, the term "owns" (including, with correlative meanings, the terms
"owned by" and "under common ownership with") as used with respect to any party,
shall mean the possession (directly or indirectly) of at least 51% of the
outstanding voting securities of a corporation or comparable equity interest in
any other type of entity (or such lesser percentage which is the maximum allowed
to be possessed in a particular jurisdiction).
1.2 "Agreement" means the present agreement together with all exhibits
and schedules.
1.3 "Assigned Patent Applications and Patents" means that certain
patent application attached hereto as Exhibit A, that certain priority
application referenced in Exhibit A as GB 9409496.8, all applications that have
been or may be filed anywhere throughout the world claiming priority from either
said Exhibit A application or said priority application, and all
* Confidential Treatment Requested
<PAGE> 3
Letters Patent (or equivalent rights) that may be granted and issued pursuant to
any of the aforesaid patent applications in any and all countries throughout the
world.
1.4 "Collaboration Patent Rights" means all patent applications and
patents (or equivalents thereof) that claim or cover inventions made by LHSC
and/or DUPRE (or by employees or agents of LHSC or DUPRE or any of their
respective Affiliates) either solely or jointly with AMYLIN (as determined in
accordance with the rules of inventorship under United States patent law) in
connection with the Research.
1.5 "Confidential Information" means all information and materials
received by any party from another party pursuant to this Agreement and all
information and materials developed in the course of the Collaboration,
including, without limitation, Know-How of each party, subject to Section 7.2
hereof.
1.6 "Discontinuation Payments" means those payments made by AMYLIN to
LHSC pursuant to Section 2.5 hereof in the event that AMYLIN ceases pursuing
development of all Royalty-Bearing Products.
1.7 "FDA" means the United States Food and Drug Administration.
1.8 "Field" means the prevention and/or treatment of fuel metabolism
disorders, including but not limited to diabetes.
1.9 "Intellectual Property" means all patents, copyrights, trade
secrets, trademarks and other proprietary rights including Know-How, together
with all related rights, applications, filings, registrations and the like.
1.10 "Know-How" means techniques, data, materials and chemicals
relating to the Field, including, without limitation, inventions, techniques,
practices, methods, knowledge, know-how, skill, experience, test data, including
pharmacological, toxicological and clinical test data, analytical and quality
control data, patent and legal data or descriptions, and marketing, sales and
manufacturing data.
1.11 "Net Sales" shall mean the gross amounts invoiced for sales of
Royalty-Bearing Products by AMYLIN, its Affiliates, licensees or sublicensees,
as applicable, to Third Parties, less (a) discounts and rebates actually
granted, including without
<PAGE> 4
limitation prompt payment discounts and governmentally mandated rebates, (b)
credits or allowances actually granted upon claims, damaged goods, rejections or
returns of a product, including recalls, (c) freight, postage shipping and
insurance charges actually allowed or paid for delivery of product, and (d)
taxes, duties or other governmental charges (other than income taxes) levied on,
absorbed or otherwise imposed on sale of products.
1.12 "Research" means all work of LHSC and/or DUPRE performed pursuant
to this Agreement during the Research Term.
1.13 "Research Funding" means those payments from AMYLIN to LHSC made
pursuant to Section 5.1 hereof.
1.15 "Research Term" means the period commencing on the Effective Date
and ending on the Termination Date, subject to extension pursuant to Section 3.3
or earlier termination pursuant to Section 4.2.
1.16 "Royalty-Bearing Product" means any product the use or sale or
which is covered by a Valid Claim where said product is used or sold.
1.17 "Royalty Payments" means those payments from AMYLIN to LHSC,
calculated on the basis of Net Sales, made pursuant to Section 5.2 hereof.
1.18 "Termination Date" means the second anniversary of the Effective
Date.
1.19 "Third Party" means any entity other than AMYLIN, LHSC or DUPRE or
an Affiliate, licensee or sublicensee of AMYLIN, LHSC or DUPRE.
1.20 "Valid Claim" means a claim of an issued patent within the
Assigned Patent Applications and Patents, or a claim of an issued patent within
Collaboration Patent Rights, which claim has not lapsed, been cancelled or
become abandoned and has not been declared invalid by an unreversed and
unappealable decision or judgment of a court or other appropriate body of
competent jurisdiction, and which has not been admitted to be invalid or
unenforceable through reissue or disclaimer.
<PAGE> 5
ARTICLE 2
ASSIGNMENT OF PATENT APPLICATION
2.1 Assignment. For good and valuable consideration, receipt of which
by LHSC and DUPRE is hereby acknowledged, LHSC and DUPRE hereby sell, assign and
transfer to AMYLIN all right, title and interest in and to the Assigned Patent
Applications and Patents, and AMYLIN hereby accepts and purchases the Assigned
Patent Applications and Patents from LHSC and DUPRE.
2.2 Assignment Fee. AMYLIN agrees to pay to LHSC a nonrefundable
payment of (*) on the Effective Date, and, as the case may be, Royalty Payments
or Discontinuation Payments under this Agreement. In addition, from and after
the Effective Date, AMYLIN will pay all costs of transfers of the Assigned
Patent Applications and Patents and future costs of filing, prosecuting,
maintaining, enforcing and defending the Assigned Patent Applications and
Patents.
2.3 Documents Relating to the Assigned Patent Applications and Patents;
Transfers of Ownership and Responsibility for Prosecution. As of the Effective
Date, AMYLIN will be responsible for the preparation, filing, prosecution,
maintenance, enforcement and defense of Assigned Patent Applications and
Patents. Within 30 days of the Effective Date, LHSC and DUPRE shall provide
AMYLIN with a copy of the prosecution file wrapper history of the each patent
application within the Assigned Patent Applications and Patents, and will
execute all other documents that may be required to transfer the responsibility
for prosecuting each such application to AMYLIN. The determination of the
countries in which to file and maintain patent applications shall be within the
sole discretion of AMYLIN; provided, however, that AMYLIN shall through the
Exhibit A application file corresponding national stage applications in the
United States, Australia, Canada, the EPO and Japan. AMYLIN will keep LHSC and
DUPRE informed of the status of all Assigned Patent Applications and Patents
and, where appropriate, will seek the advice of DUPRE and LHSC concerning the
preparation, filing prosecution, maintenance, enforcement and defense thereof.
AMYLIN agrees not to diminish the scope of the claims now set forth in the
Assigned
* Confidential Treatment Requested
<PAGE> 6
Patent Applications and Patents without the consent of LHSC. LHSC and DUPRE
further agree to execute all documents and make all filings required by AMYLIN
to effect the assignment of the Assigned Patent Applications and Patents
throughout the world, and agree to cooperate fully with AMYLIN in the
preparation, filing prosecution, maintenance, enforcement and defense of the
Assigned Patent Applications and Patents, which cooperation shall include but
not be limited to review of patent office documents, review of pertinent
literature, and execution by LHSC and/or DUPRE of all such papers and
instruments as are necessary or helpful to AMYLIN in preparing, filing,
prosecuting, maintaining, enforcing, and defending such applications.
2.4 No Assumption of Liabilities. AMYLIN is not assuming any debts,
liabilities, obligations or contracts of LHSC and/or DUPRE and all such debts,
liabilities, obligations and contracts shall be and remain the responsibility of
LHSC and/or DUPRE. Neither LHSC nor DUPRE is not assuming any debts,
liabilities, obligations or contracts of AMYLIN and all such debts, liabilities,
obligations and contracts shall be and remain the responsibility of AMYLIN.
2.5 Product Development in Discretion of AMYLIN; Discontinuation
Payments.
(a) It shall be completely in the discretion of AMYLIN whether and
in what manner to develop and/or proceed with the development of Royalty-Bearing
Products; provided, however, that AMYLIN shall use efforts, consistent with its
sound and reasonable business practices and technical judgment, to effect
introduction of a Royalty-Bearing Product into the commercial market. AMYLIN
may, but need not, discharge this obligation:
(i) by preparing and filing an Investigational New Drug
application for a Royalty-Bearing Product within
three(3) years following the Effective Date; and,
(ii) thereafter, should AMYLIN within its reasonable
business and technical judgment determine that said
Royalty-Bearing Product continues to be a
commercially and technically viable drug candidate,
by completing Phase II clinical trials of said
Royalty-Bearing Product within five
<PAGE> 7
(5) years following the Effective Date, completing
Phase III clinical trials of said Royalty-Bearing
Product within seven (7) years following the
Effective Date, and filing an application to market
said Royalty-Bearing Product in any of the United
States, Europe, Japan, Canada or Australia within
eight (8) years following the Effective Date.
In the event that AMYLIN determines to pursue the Phase II clinical
trials and Phase III clinical trials described in Section 2.5(a)(ii) above, LHSC
will be given first consideration to be a site for such Phase II and Phase III
clinical trials.
(b) Notwithstanding the provisions of Section 2.5(a) above, in the
event that, and at such time as, AMYLIN determines (which shall in no event take
place before the earlier of Termination Date and the date that the Research Plan
is amended under Section 4.2) to cease pursuing development of all
Royalty-Bearing Products, AMYLIN shall give prompt notice of such intention to
LHSC. Upon the giving of such notice, AMYLIN may elect
(i) to terminate this Agreement, in which case all rights
to the Assigned Patent Applications and Patents will
revert to LHSC, or
(ii) to retain all such rights and pay to LHSC
Discontinuation Payments equal to (*) following the
date of such notice, with the first such payment to
be made one hundred twenty (120) days following such
election by AMYLIN (but subject to Sections 2.5(d)
and (e) below).
(c) In the event that AMYLIN elects to make such Discontinuation
Payments, LHSC shall have ninety (90) days following AMYLIN'S election to notify
AMYLIN in writing whether it wishes:
(i) to accept the aforesaid Discontinuation Payments, or
* Confidential Treatment Requested
<PAGE> 8
(ii) to elect, at LHSC's option, that all rights to the
Assigned Patent Applications and Patents revert to
LHSC, together with a royalty-bearing license to the
Collaboration Patent Rights, as set forth in Section
6.1 below.
(d) In the event that LHSC makes the election set forth in Section
2.5(c)(ii) above, AMYLIN shall thereupon have no obligation to make any
Discontinuation Payments. AMYLIN shall thereupon have a continuing right of
first refusal should, at any time or from time to time after said election, LHSC
and/or DUPRE propose to enter into any agreement with any one or more third
parties to develop and/or commercialize any product or products within the scope
of said Assigned Patent Applications and Patents and/or said Collaboration
Patent Rights. Pursuant to AMYLIN'S continuing right of first refusal, any such
agreement with a third party shall be presented to AMYLIN prior to execution by
said third party, after which AMYLIN shall have sixty (60) days to exercise its
right of first refusal. If AMYLIN notifies LHSC and/or DUPRE that it wishes to
exercise such right, the parties shall then proceed to prepare a contract among
LHSC, DUPRE and AMYLIN pursuant to which AMYLIN would commit to provide
substantially the same development and/or commercialization efforts, resources
and/or funding, as applicable, as such third party had bone fide proposed to
commit pursuant to such third party agreement, provided that AMYLIN shall not be
required to commit or make available technology or other assets that would have
been committed by such third party. In such event, upon execution of such
agreement by AMYLIN, neither LHSC, DUPRE nor such third party shall have any
further rights to enter into such third party agreement.
(e) In the event that LHSC elects to receive Discontinuation
Payments, the first such Discontinuation Payment shall be made within one
hundred twenty (120) days of the date of such notice, and each subsequent
Discontinuation Payment shall be made within one hundred twenty (120) days of
each anniversary of the date of such notice, with the last Discontinuation
Payment being made within one hundred twenty (120) days of the fourth
anniversary of the date of such notice; provided, however, that the
Discontinuation Payments shall be reduced by the aggregate amount of all Royalty
Payments made prior to the date of such notice (with such aggregate Royalty
Payments being applied first against the first such Discontinuation Payment
otherwise due
<PAGE> 9
following AMYLIN's notice and then in order against each subsequent
Discontinuation Payment otherwise due); provided, further, that so long as
AMYLIN is pursuing development of any Royalty-Bearing Product, no
Discontinuation Payments shall become due.
(f) If, notwithstanding the payment of any Discontinuation
Payments, AMYLIN subsequently determines to develop Royalty-Bearing Products,
further Discontinuation Payments shall cease, and Discontinuation Payments
already made shall be creditable against future Royalty Payments to LHSC.
ARTICLE 3
RESEARCH COLLABORATION
3.1 Scope of Collaboration. LHSC and DUPRE will conduct research to be
jointly designed and agreed upon by the parties in advance in accordance with a
Research Plan (which Research Plan will be appended hereto as Exhibit B and form
a part of this agreement when agreed upon by the parties) for and on behalf of
AMYLIN with the goal of carrying out clinical experiments to evaluate the use of
GLP-1 (*************)in the Field, or such other experiments and studies as may
be mutually agreed upon by the parties after the first year of the Research Term
as set forth in Section 4.2 hereof.
3.2 Exclusivity of Services. During the Research Term, neither DUPRE
nor LHSC nor any of their Affiliates shall enter into any agreement with any
Third Party which relates to the conduct or funding of research, development or
commercialization of GLP-1 (*********) or any related compounds, including but
not limited to analogs, fragments, and chimeras of GLP-1 (*************).
3.3 Duration and Extension of Research Term. The Research Term shall
commence on the Effective Date and shall continue at least until the Termination
Date, unless terminated earlier in accordance with the provisions of Article 9.
Not fewer than 180 days prior to the Termination Date, AMYLIN shall inform LHSC
and DUPRE whether it wishes to continue the Research. Upon such notice by AMYLIN
and the approval of LHSC of such continuation of the Research, the Research Term
may be extended at AMYLIN's
*Confidential Treatment Requested
<PAGE> 10
expense upon such mutually acceptable terms as the parties shall negotiate in
good faith. In the event that AMYLIN does not give notice of its intention to
continue the Research within such 180-day period, the Research Term shall
terminate automatically and without further action on the part of any party on
the Termination Date.
ARTICLE 4
CONDUCT OF RESEARCH
4.1 Research. The parties agree that LHSC and DUPRE shall perform the
Research using their expertise and facilities (a) in accordance with the
Research Plan, and (b) in accordance with the procedures required by the FDA's
current Good Laboratory Practices and Good Clinical Practices regulations.
4.2 Reevaluation After One Year. At the end of the first year of the
Research Term, the parties will review and evaluate the results of the Research
during the first year and will determine whether the second year's portion of
the Research Funding will be used as originally set forth in the Research Plan
or dedicated to some other research to be mutually agreed upon by the parties.
In the event that the parties determine to use the Research Funding otherwise
than as originally set forth in the Research Plan, the parties will execute an
amendment to the Research Plan which will be incorporated by reference in and
become a part of this Agreement.
4.3 Availability of Resources. LHSC will maintain, at its expense,
laboratories, offices and all other facilities necessary to carry out the
Research. Each party agrees to make its employees and non-employee consultants
reasonably available at their respective places of employment to consult with
the other parties on issues arising during the Collaboration and in connection
with any request from any regulatory agency, including, without limitation,
regulatory, scientific, technical and clinical testing issues. Representatives
of AMYLIN may, upon reasonable notice and at times reasonably acceptable to LHSC
and DUPRE (a) visit the facilities where the Research is being conducted; and
(b) consult informally, during such visits and by telephone, with personnel of
LHSC and/or DUPRE performing the Research.
<PAGE> 11
4.4 Results of Research. LHSC and DUPRE shall, in accordance with their
established practices, keep complete, accurate and authentic accounts, notes,
data and records of the Research performed under this Agreement. LHSC and DUPRE
shall promptly and fully disclose to AMYLIN any and all information, data and
results (the "Results") obtained from, and any and all Know-How and inventions
created or discovered in the course or as a result of, the Research, which
disclosure shall include, without limitation, copies of relevant summaries and
reports. Upon request by AMYLIN and in any event upon the conclusion of the
Research, LHSC and DUPRE shall prepare a summary report detailing the Results
and the underlying data and all Know-How and inventions created or discovered in
the course or as a result of the Research. Upon request by AMYLIN, LHSC and
DUPRE will provide AMYLIN with access to laboratory notebooks and allow AMYLIN
to make copies thereof. Ownership of any and all results of the Research shall
be determined in accordance with Section 6.1 hereof.
4.5 Personnel. LHSC and DUPRE agree that DUPRE will be the principal
investigator for the Research and may be replaced as such only upon the written
consent of AMYLIN. LHSC and DUPRE shall be responsible for securing all
additional clinical personnel involved in the Research and any required
replacements. LHSC and DUPRE shall identify and recruit only qualified
individuals to fill these positions.
ARTICLE 5
COLLABORATION PAYMENT OBLIGATIONS
5.1 Research Funding. AMYLIN agrees to fund the Research during the
Research Term in the amount of (*). Such amount shall be payable in four equal
installments during each year of the Research Term. The first such payment shall
be made on the Effective Date, and subsequent payments shall be made every third
month thereafter during the Research Term.
5.2 Royalty Payments. AMYLIN shall pay to LHSC a royalty of
(**********************************) of Royalty-Bearing Products sold by AMYLIN
or its Affiliates, licensees or sublicensees.
* Confidential Treatment Requested
<PAGE> 12
The Royalty Payments for Royalty-Bearing Products shall be reduced by the amount
of any royalties payable to Third Parties in respect of the manufacture, use or
sale of Royalty- Bearing Products; provided, however, that in any event the
aggregate reduction of Royalty Payments set forth in this Section 5.2
(***********************************************).
5.3 No Royalties on Intercompany Sales. No royalties as set forth in
this Article 5 shall be payable on intercompany sales transactions as between or
among AMYLIN and AMYLIN Affiliates, the final sale by AMYLIN or an AMYLIN
Affiliate to a Third Party, alone, being used for the purposes of determining
the Royalty Payments due hereunder. The Royalty-Bearing Product subject to
Royalty Payments shall be deemed sold when invoiced or, if not invoiced, when
the same shall be delivered to the Third Party.
5.4 Method of Payment. Royalties earned as provided under this Article
5 during each calendar quarter of a year shall be paid in U.S. Dollars by AMYLIN
to LHSC within 45 days after the end of each calendar quarter. Each Royalty
Payment shall be accompanied by a report, certified by a responsible officer of
AMYLIN, of Net Sales of Royalty-Bearing Products in sufficient detail to permit
confirmation of the accuracy of the Royalty Payment made. Exchange conversion of
foreign payments into U.S. Dollars shall be made as necessary at the rate of
exchange reported in The Wall Street Journal on the fourth banking day preceding
the end of the applicable royalty period or, for payments other than Royalty
Payments, the fourth banking day preceding the date of payment. All payments
owed under this Agreement shall be made by wire transfer, unless otherwise
specified by the receiving party.
5.5 Overpayment and Underpayment. Whenever, because of price
adjustments, including allowances for returned goods sold during any period, or
for any other reason, AMYLIN shall have overpaid or underpaid the royalty amount
due for such period, AMYLIN shall, upon determining the amount of overpayment or
underpayment, deduct or add the same from or to the Royalty Payment payable for
the period during which the amount of the overpayment or underpayment is
determined; and if after such adjustment there remains an overpayment, such
overpayment shall be deducted from
* Confidential Treatment Requested
<PAGE> 13
the Royalty Payment payable for the immediately following period or periods or,
if there is no following payment period, such overpayment shall be refunded to
AMYLIN by LHSC.
5.6 Records; Audit Rights. AMYLIN shall keep complete and accurate
records of all sales or other transfers of Royalty- Bearing Products for a
minimum of five years after the sales period to which they pertain. Said records
shall be open during reasonable business hours to a certified public accountant
selected by LHSC and reasonably acceptable to AMYLIN, who shall, at LHSC's
expense (unless such audit discloses a variance of more than
(*************************************************) payments due under this
Agreement, in which case AMYLIN shall bear the full cost of such audit), have
access (but not more often than once each calendar year) to all records deemed
by such accountant as reasonably necessary to verify for LHSC the royalties
accrued, payments made or to be made, and the accuracy of the reports to be
made, as herein provided. However, said accountant shall agree in writing to
treat as confidential and not to disclose to LHSC any information other than
information relating solely to the royalties accrued and the accuracy of the
reports and payments required to be made under this Agreement, and that in no
event will the quantities or prices to individual customers be disclosed to LHSC
by said accountant.
5.7 Taxes. All taxes, assessments, fees and charges, if any, levied on
AMYLIN or an AMYLIN Affiliate under income tax laws or regulations with respect
to payments due to LHSC hereunder shall be for the account of LHSC and will be
deducted by AMYLIN and/or the AMYLIN Affiliate from such payments due to LHSC.
Receipts, if available, for all such taxes, assessments, fees and charges
advanced by AMYLIN and/or an AMYLIN Affiliate to the taxing authorities shall be
secured by AMYLIN or the AMYLIN Affiliate and sent to LHSC. Each party agrees to
assist the other party in claiming exemption from such deductions or
withholdings under any double taxation or similar agreement or treaty from time
to time in force.
* Confidential Treatment Requested
<PAGE> 14
ARTICLE 6
TECHNOLOGY RIGHTS AND INFRINGEMENT
6.1 Ownership of Technology. Ownership of Collaboration Patent Rights
and any and all other Intellectual Property arising out of the Research, whether
or not patentable, shall be the sole and exclusive property of AMYLIN; provided,
however, that LHSC and DUPRE shall retain a continuing nonexclusive,
royalty-free license for non-commercial research purposes solely to Know-How
arising out of the Research. Any assignments necessary to accomplish the
foregoing are hereby made, and each party will execute such further documents
and take such further actions as may be reasonably requested by another party
with respect thereto. LHSC and DUPRE agree and acknowledge that neither LHSC nor
DUPRE shall acquire rights of any kind whatsoever with respect to any
Intellectual Property of AMYLIN as a result of LHSC's and DUPRE's performance
under this Agreement or otherwise. In the event that LHSC makes the election set
forth in Section 2.5(c)(ii), or in the event that this Agreement is terminated
for material breach by Amylin in accordance with Section 9.3, LHSC shall have an
exclusive, royalty-bearing license to patent applications and patents (or
equivalents thereof) within Collaboration Patent Rights that name as sole
inventors employees or agents of LHSC or DUPRE or any of their respective
Affiliates,
(*******************************
*******************************************************************
**********************), and LHSC shall have a nonexclusive, royalty-bearing
license to other patent applications and patents (or equivalents thereof) within
Collaboration Patent Rights and to Know-How,
(*******************************************************
************************************************************).
6.2 Prosecution and Maintenance of Collaboration Patent Rights. AMYLIN
shall make determinations with respect to what type of patent coverage to seek
and thereafter shall be solely responsible for, and shall bear all expenses
incurred from and after the Effective Date in connection with, prosecuting to
issuance patent applications, for filing and prosecuting all patent reissues and
* Confidential Treatment Requested
<PAGE> 15
re-examinations, for applying for and obtaining any patent term extensions, and
for paying all maintenance fees on all patents, which applications and patents
relate to Collaboration Patent Rights, Know-How or other Intellectual Property
arising out of the Research. In the event that AMYLIN determines to seek such
patent coverage, the determination of the countries in which to file and
maintain patent applications shall be within the sole discretion of AMYLIN;
provided, however, that AMYLIN shall file applications in the United States,
Australia, Canada, the EPO and Japan. AMYLIN will keep LHSC and DUPRE informed
of the status of all such applications and, where appropriate, will seek the
advice of DUPRE and LHSC concerning the preparation, filing prosecution,
maintenance, enforcement and defense thereof.
6.3 Infringement by Third Parties. LHSC and DUPRE shall promptly notify
AMYLIN in writing of any alleged or threatened infringement of any patent
included within the Assigned Patent Applications and Patents, or any patent
included in the Collaboration Patent Rights, of which they become aware. So long
as all rights to the Assigned Patent Applications and Patents have not reverted
to LHSC, AMYLIN shall have the sole right to bring and control any action or
proceeding with respect to infringement of such rights at its own expense and by
counsel of its own choice. Notwithstanding whether all rights to the Assigned
Patent Applications and Patents have reverted to LHSC, AMYLIN shall have the
sole right to bring and control any action or proceeding with respect to
infringement of any patent included within the Collaboration Patent Rights at
its own expense and by counsel of its own choice. In the event AMYLIN brings an
infringement action, LHSC and DUPRE shall cooperate fully, including if required
to bring such action, the furnishing of a power of attorney or agreeing to be
joined as a party, the reasonable costs of which shall be at AMYLIN'S expense.
Any recovery realized as a result of such litigation, after reimbursement of any
and all litigation expenses of AMYLIN, shall be treated as Net Sales for
purposes of the royalty provisions of this Agreement. AMYLIN shall indemnify
LHSC and DUPRE for all damages awarded against them in connection with such
actions.
6.4 Infringement of Third Party Rights. Each party shall promptly
notify the others in writing of any infringement or asserted infringement by
AMYLIN of any Third Party's Intellectual Property (collectively, "Alleged Third
Party Rights") by reason of the manufacture, import, use, sale or offer for sale
of any Royalty-Bearing Product. AMYLIN shall have the right to control
<PAGE> 16
any defense of any claim of infringement of Alleged Third Party Rights at its
own expense and by counsel of its own choice (subject to AMYLIN's right to
indemnification by LHSC as provided by Section 8.5 hereof), and LHSC and DUPRE
shall have the right, at their own expense, to be represented in any such action
by counsel of their own choice. In the event of any infringement or asserted
infringement of Alleged Third Party Rights, LHSC and DUPRE shall cooperate in
good faith with AMYLIN on a mutual and reasonable basis to negotiate and settle
any dispute with any such Third Party concerning the Alleged Third Party Rights,
and otherwise resolve any such infringement or alleged infringement and secure
AMYLIN's continued rights to the Alleged Third Party Rights, if necessary or
desirable, provided that neither LHSC nor DUPRE shall be required to make any
cash payments.
6.5 Cooperation in Connection with Infringement Disputes. In any suit
or dispute involving infringement or asserted infringement by a Third Party of a
patent included within the Assigned Patent Applications and Patents, or any
patent included in the Collaboration Patent Rights, or infringement or asserted
infringement by AMYLIN of Alleged Third Party Rights, the parties shall
cooperate fully, and upon the request and at the expense of AMYLIN, LHSC and
DUPRE shall make available to AMYLIN at reasonable times and under appropriate
conditions all relevant personnel, records, papers, information, samples,
specimens and the like which are in its possession or control.
ARTICLE 7
CONFIDENTIALITY
7.1 Nondisclosure. During the term of this Agreement and for a period
of five years after termination thereof, each party will maintain all
Confidential Information in trust and confidence and will not disclose any
Confidential Information to any Third Party or use any Confidential Information
for any purpose except as expressly authorized by this Agreement, except as
provided in Section 7.3. Each party may use such Confidential Information only
to the extent required to accomplish the purposes of this Agreement. Each party
will use at least the same standard of care as it uses to protect proprietary or
confidential information of its own to ensure that its employees, agents,
consultants and other representatives do not disclose or make any unauthorized
use of the Confidential Information. Each party will promptly notify
<PAGE> 17
the other upon discovery of any unauthorized use or disclosure of the
Confidential Information.
7.2 Exceptions. Confidential Information shall not include any
information which the receiving party can prove by competent written evidence:
(a) is now, or hereafter becomes, through no act or failure to act
on the part of the receiving party, generally known or available;
(b) is known by the receiving party at the time of receiving such
information, as evidenced by its records;
(c) is hereafter furnished to the receiving party by a Third Party,
as a matter of right and without restriction on disclosure;
(d) is independently developed by the receiving party without the
aid, application or use of Confidential Information; or
(e) is the subject of a written permission to disclose provided by
the disclosing party.
7.3 Financial Terms. The parties agree that the material financial
terms of this Agreement will be considered Confidential Information of the
parties. Notwithstanding the foregoing, any party may disclose such terms as are
required to be disclosed by law in its financial statements or under strictures
of confidentiality to bona fide potential licensees or sublicensees. Any party
shall have the further right to disclose the material financial terms of this
Agreement under strictures of confidentiality to any potential acquiror, merger
partner or other bona fide potential strategic partner.
7.4 Publications. Each party to this Agreement recognizes that the
publication of papers regarding results of Research hereunder and other
information resulting from the Collaboration, including oral presentations and
abstracts, may be beneficial to the parties provided such publications are
subject to reasonable controls to protect Confidential Information. In
particular, it is the intent of the parties to maintain the confidentiality of
any Confidential Information included in any patent application until such
patent application has been published. Accordingly, each party shall have the
right to review and approve any paper
<PAGE> 18
proposed for publication by the other party, including oral presentations and
abstracts, which utilizes data generated from the Collaboration and/or includes
Confidential Information of the other party. Before any such paper is submitted
for publication, the party proposing publication shall deliver a complete copy
to the other party at least (*******) prior to submitting the paper to a
publisher. The receiving party shall review any such paper and give its comments
to the publishing party within (*******) of the delivery of such paper to the
receiving party. With respect to oral presentation materials and abstracts, the
parties shall make reasonable efforts to expedite review of such materials and
abstracts, and shall return such items as soon as practicable to the publishing
party with appropriate comments, if any, but in no event later than (*******)
from the date of delivery to the receiving party. The publishing party shall
comply with another party's request to delete references to such other party's
Confidential Information in any such paper and agrees to withhold publication of
same for an additional (*******) in order to permit the parties to obtain patent
protection, if any of the parties deem it necessary, in accordance with the
terms of this Agreement.
ARTICLE 8
REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 Corporate Power. Each party hereby represents and warrants that it
has full power and authority to enter into this Agreement and to carry out the
provisions hereof.
8.2 Due Authorization. Each party hereby represents and warrants that
such party is duly authorized to execute and deliver this Agreement and to
perform its obligations hereunder.
8.3 Binding Agreement. Each party hereby represents and warrants that
this Agreement is a legal and valid obligation binding upon it and is
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having authority over it.
* Confidential Treatment Requested
<PAGE> 19
8.4 Assigned Patent Applications and Patents. LHSC hereby represents
and warrants that as of the Effective Date it holds good title to the Assigned
Patent Applications and Patents, free and clear of any and all liens, claims and
encumbrances, and that upon assignment to AMYLIN, AMYLIN will be the sole owner
of the Assigned Patent Applications and Patents. LHSC and DUPRE represent and
warrant that they know of no reason why the Assigned Patent Applications and
Patents would be barred, unpatentable, invalid or unenforceable, that they are
not aware of any asserted or unasserted claim or demand of any right in or to
the Assigned Patent Applications and Patents, including but not limited to claim
or demand of inventorship, and that they have disclosed all relevant information
regarding the Assigned Patent Applications and Patents to AMYLIN. LHSC and DUPRE
further represent and warrant that to AMYLIN that (a) to the best of their
knowledge, carrying out the Research or exploiting the Assigned Patent
Applications and Patents will not infringe on any existing patent or proprietary
rights of any third party, and (b) that neither has not received any notice from
any person that carrying out the Research or exploiting the Assigned Patent
Applications and Patents infringes upon a patent or on the proprietary rights of
any third party.
8.5 Indemnification; Limitation of Liability.
(a) LHSC hereby agrees to save, defend and hold AMYLIN and its
officers, directors, employees, consultants and agents harmless from and against
any and all suits, claims, actions, demands, liabilities, expenses and losses,
including reasonable legal expense and attorneys' fees ("Losses") resulting
directly or indirectly from the Research by LHSC or DUPRE or their Affiliates
except to the extent such Losses result from the gross negligence of AMYLIN. In
the event AMYLIN seeks indemnification under this Section 8.5, it shall inform
LHSC of a claim as soon as reasonably practicable after it receives notice of
the claim, shall permit LHSC 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 LHSC) in the
defense of the claim.
(b) AMYLIN hereby agrees to save, defend and hold LHSC and its
officers, directors, employees, consultants and agents harmless from and against
any and all suits, claims, actions, demands, liabilities, expenses and losses,
including reasonable legal expense and attorneys' fees ("Losses") resulting
directly or
<PAGE> 20
indirectly from the development or sale of Royalty-Bearing Products by AMYLIN or
its Affiliates except to the extent such Losses result from the gross negligence
of LHSC. In the event LHSC seeks indemnification under this Section 8.5, it
shall inform AMYLIN of a claim as soon as reasonably practicable after it
receives notice of the claim, shall permit AMYLIN 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 AMYLIN) in the defense of the claim.
(c) In no event will LHSC's or DUPRE's liability for any claim or cause
of action including any continuous cause of action exceed the aggregate of the
royalties paid or owed by AMYLIN under this Agreement. AMYLIN acknowledges that
LHSC is a public hospital with limited financing and accordingly agrees that
LHSC will not be obliged to pay any damages or compensation of any kind to
AMYLIN arising out of or related to this Agreement. AMYLIN agrees that its sole
remedy against LHSC for any breach or default of LHSC arising out of or related
to this Agreement which entitles AMYLIN to any damages or compensation of any
kind from LHSC, shall be to deduct such sum from royalties payable to LHSC
hereunder. No deduction may be made without the prior written consent of LHSC or
a final order of a court of competent jurisdiction from which no appeal has been
taken or the time for appealing has expired.
ARTICLE 9
TERMINATION
9.1 Term. Unless otherwise extended pursuant to Section 3.3 hereof or
terminated pursuant to this Article 9, the Research Term shall terminate on the
Termination Date as such term is defined in Section 1.18 hereof.
9.2 Termination by Mutual Agreement. The parties may at any time
terminate this Agreement by written agreement executed by all of the parties.
9.3 Termination for Cause. Any party may terminate this Agreement upon
60 days' written notice upon the occurrence of any of the following:
<PAGE> 21
(a) Upon or after the bankruptcy, insolvency, dissolution or
winding up of another party (other than dissolution or winding up for the
purposes of reconstruction or amalgamation); or
(b) Upon or after the breach of any material provision of this
Agreement by the other party if the breaching party has not cured such material
breach within the 90-day period following written notice of termination by the
other party.
9.4 Survival; Effect of Expiration or Termination. The obligations and
rights of the parties under Sections 2.5, 5.2 through 5.7 and 8.5, and Articles
6 and 7 shall survive termination or expiration of this Agreement. Expiration or
termination of this Agreement shall not relieve the parties of any obligation
accruing prior to such expiration or termination. Promptly following termination
or expiration of this Agreement, LHSC and DUPRE shall return to AMYLIN all
Confidential Information of AMYLIN, and AMYLIN shall return to LHSC and DUPRE
all Confidential Information of LHSC and DUPRE.
ARTICLE 10
PUBLICITY
10.1 Publicity Review. AMYLIN will have sole authority and discretion
over the content and timing of any statement to the public regarding the
execution and the subject matter of this Agreement, the Research to be conducted
by the parties under this Agreement, or any other aspect of this Agreement,
except with respect to disclosures required by law or regulation.
ARTICLE 11
MISCELLANEOUS
11.1 Insurance. LHSC and AMYLIN will each maintain appropriate general
liability insurance, including product liability insurance, during the term of
this Agreement and any extensions or renewals thereof. Each party will provide
proof of such insurance to the other annually upon request.
11.2 Currency. All sums due under this Agreement shall be paid in
Canadian dollars. Any conversion of funds required to enable payments to be made
or calculated in Canadian dollars shall be converted at the spot buying rate for
such funds quoted
<PAGE> 22
by the Bank of Montreal at its office in Toronto at approximately noon on the
business day immediately preceding the due date of payments.
11.3 Regulatory Approvals. LHSC shall be responsible for, and shall
bear all costs of, obtaining any and all regulatory approvals required by the
Canadian government or any subdivision or agency thereof to carry out the
Research according to the protocols set forth in the Research Plan. AMYLIN shall
be responsible for, and shall bear all costs of, obtaining any and all other
regulatory approvals required for the development and commercialization, if any,
of Royalty-Bearing Products.
11.4 No Assignment Without Prior Written Consent; Effect of Sale of
Assets or Merger. Neither party may assign or otherwise transfer this Agreement
or any of its rights or obligations herein without the prior written consent of
the other party, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, either party may assign this Agreement in
connection with the sale of all or substantially all of the assets of the party
in connection with a corporate reorganization to an Affiliate of the party or
otherwise, provided that the assignee undertakes in writing to be bound by all
of the provisions of this Agreement; it being further provided, however, that
this Agreement shall survive any merger of AMYLIN with or into another party,
and no consent for a merger or similar reorganization shall be required
hereunder.. In addition, AMYLIN may assign this Agreement following two (2)
years after the Effective Date provided that the assignee undertakes in writing
to be bound to all of the provisions of this Agreement. This Agreement shall
inure to the benefit of and be binding upon the respective successors and
permitted assigns of the parties hereto.
11.5 Force Majeure. No party shall lose any rights hereunder or be
liable to another party for damages or losses on account of failure of
performance by the defaulting party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other similar cause beyond the control of the defaulting party, provided
that the party claiming force majeure has exerted all reasonable efforts to
avoid or remedy such force majeure.
11.6 Retained Rights. Nothing in this Agreement shall limit in any
respect the right of LHSC to conduct research and
<PAGE> 23
development with respect to and market products within or outside the Field
using Intellectual Property owned by or licensed to LHSC as to which AMYLIN has
no rights; provided, however, that LHSC and DUPRE represent and warrant that
there is no conflict of interest with the activities to be performed hereunder
and their other activities and contracts, and that DUPRE will not carry out any
activities or enter into any contracts in the future that would create such a
conflict of interest. Nothing in this Agreement shall limit in any respect the
right of AMYLIN to conduct research and development with respect to and market
products in or outside the Field using Intellectual Property owned by or
licensed to AMYLIN.
11.7 Notices. Any notices or communications provided for in this
Agreement to be made by any of the parties to another shall be in writing, in
English, and shall be made by prepaid air mail with return receipt addressed to
the other at its address set forth below. Any such notice or communication may
also be given by hand, or facsimile to the appropriate designation. Any party
may by like notice specify an address to which notices and communications shall
thereafter be sent. Notices sent by mail, facsimile or cable shall be effective
upon receipt and notices given by hand shall be effective when delivered.
If to AMYLIN: AMYLIN Pharmaceuticals, Inc.
9373 Towne Centre Drive
San Diego, CA 92121
Attn: Bradford J. Duft, Esq.
Facsimile No.: (619) 552-2212
If to LHSC: London Health Sciences Centre
Executive Offices, Westminster
Tower
Victoria Campus
P.O. Box 5375
800 Commissioners Road, East
London, Ontario N6A 4G5
Attn: Vice President, Finance
Facsimile No.: (519) 685-8208
<PAGE> 24
If to DUPRE: London Health Sciences Centre
University Campus
P.O. Box 5339
London, Ontario N6A 5A5
Attn: Dr. John DUPRE
Facsimile No.: (519) 663-3232
11.8 Governing Law. This Agreement shall be governed by the laws of the
State of California, as such laws are applied to contracts entered into and to
be performed within such state.
11.9 Waiver. Except as specifically provided for herein, the waiver
from time to time by any of the parties of any of their rights or their failure
to exercise any remedy shall not operate or be construed as a continuing waiver
of same or of any other of such party's rights or remedies provided in this
Agreement.
11.10 Severability. If any term, covenant or condition of this
Agreement or the application thereof to any party or circumstance shall, to any
extent, be held to be invalid or unenforceable, then (a) the remainder of this
Agreement, or the application of such term, covenant or condition to parties or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby and each term, covenant or condition of this
Agreement shall be valid and be enforced to the fullest extent permitted by law;
and (b) the parties hereto covenant and agree to renegotiate any such term,
covenant or application thereof in good faith in order to provide a reasonably
acceptable alternative to the term, covenant or condition of this Agreement or
the application thereof that is invalid or unenforceable, it being the intent of
the parties that the basic purposes of this Agreement are to be effectuated.
11.11 Independent Contractors. It is expressly agreed that LHSC and
DUPRE shall be independent contractors and that the relationship between AMYLIN
on the one hand and LHSC and DUPRE on the other shall not constitute a
partnership or agency of any kind. Neither AMYLIN on the one hand nor LHSC and
DUPRE on the other shall have the authority to make any statements,
representations or commitments of any kind, or to take any action, which shall
be binding on the other, without the prior written authorization of the party to
do so.
11.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an
<PAGE> 25
original, but all of which together shall constitute one and the same
instrument.
11.13 Entire Agreement. This Agreement sets forth all of the covenants,
promises, agreements, warranties, representations, conditions and understandings
among the parties hereto and supersede and terminate all prior agreements and
understanding among the parties. There are no covenants, promises, agreements,
warranties, representations conditions or understandings, either oral or
written, among the parties other than as set forth herein and therein. No
subsequent alteration, amendment, change or addition to this Agreement shall be
binding upon the parties hereto unless reduced to writing and signed by the
respective authorized officers of the parties.
<PAGE> 26
11.14 Further Assurances. Each of the parties hereto shall from time to
time execute and deliver all such further documents and instruments (including
instruments of conveyance) and do all acts and things as the other party may
reasonably require to effectively carry out or better evidence or perfect the
full intent and meaning of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement by their proper
officers as of the date and year first above written.
AMYLIN PHARMACEUTICALS, INC. LONDON HEALTH SCIENCES CENTRE
By: /s/Bradford J. Duft By: /s/ Tony Dagnone
------------------------------- ---------------------------
Name: Bradford J. Duft Name: Tony Dagnone
----------------------------- -------------------------
Title: VP and General Counsel Title: CEO
---------------------------- ------------------------
DR. JOHN DUPRE
/s/John Dupre
-------------------------
<PAGE> 27
EXHIBIT A
[International Patent Application No. PCT/CA95/00287, filed May 12, 1995]
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