<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
AUGUST 20, 1997 DATE OF REPORT
(DATE OF EARLIEST EVENT REPORTED)
GUILFORD PHARMACEUTICALS INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 0-23736 52-1841960
(State or other (Commission (I.R.S. Employer
jurisdiction of File Number) Identification
incorporation or Number)
organization)
6611 TRIBUTARY STREET
BALTIMORE, MARYLAND
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
21224
(ZIP CODE)
(410) 631-6300
(Registrant's telephone number, including area code)
<PAGE> 2
ITEM 5. OTHER EVENTS
On August 20, 1997, the Company entered into a Binding Term Sheet (the
"Amgen Agreement") with Amgen Inc. ("Amgen") respecting the research,
development and commercialization of the Company's FKBP-based
neuroimmunophilin ligand technology ("Neuroimmunophilin Technology") for
all human therapeutic and diagnostic applications. Pursuant to the terms of
the Amgen Agreement, on August 21, 1997, Amgen paid a $15 million signing
fee to the Company. Following the expiration or termination of the
applicable review period under the Hart-Scott-Rodino Antitrust Improvements
Act of 1976 ("HSR Act"), the Company will issue to Amgen 640,095 shares of
the Company's common stock, par value $.01 per share ("Common Stock") and
Warrants to purchase up to an additional 700,000 shares of Company Common
Stock for a total of $20 million. The Warrants will be exercisable for up
to five years from the closing date of the sales of such securities to
Amgen and will have an exercise price equal to 150% of the purchase price
of the Common Stock (i.e., an exercise price of approximately $35.15 per
share). Following the closing, Amgen will also have certain demand and
"piggyback" registration rights under the Securities Act of 1933, as
amended, covering the shares of Common Stock and Warrants sold to Amgen as
described above and the shares of Common Stock issuable upon exercise of
the Warrants. The closing with respect to the sale of these securities to
Amgen is conditioned upon the expiration or earlier termination of the
applicable HSR Act review period or the final decision of any court,
arbitrator or governmental body approving the transactions contemplated in
the Amgen Agreement.
Under the terms of the Amgen Agreement, Amgen will provide to the
Company up to $13.5 million over three years to support research activities
at the Company relating to the Neuroimmunophilin Technology. In the event
that at the end second year of the research program, no neuroimmunophilin
compound has been identified which, in Amgen's opinion, is an IND candidate
or likely to lead to an IND candidate, Amgen may elect to terminate the
research program at that point. In addition, Amgen may elect to fund an
additional year of research. The Amgen Agreement provides for certain
milestone payments to the Company in up to ten different specified clinical
indications, seven of which are neurological (i.e., Parkinson's disease;
Alzheimer's disease; stroke; peripheral neuropathies; traumatic brain
injuries; and multiple sclerosis) and three of which are for
non-neurological indications, in the event Amgen achieves certain
development milestones with respect to compounds being developed under the
collaboration with the Company. In addition, the Company will receive
royalties on products sales, if any, falling under the Neuroimmunophilin
Technology in the future. Subject to Amgen's two year research funding
obligation, Amgen may elect to discontinue all activities relating to the
development and commercialization of the Neuroimmunophilin Technology
whereupon the Amgen Agreement will terminate.
There can be no assurance that Amgen will be able to achieve any of the
development milestones set forth in the Amgen Agreement with respect to any
specified indication. The research, development and commercialization of
early stage technology like the Neuroimmunophilin Technology is subject to
significant risks and uncertainty respecting, among other things, selection
of an appropriate lead compound, successful completion of the pre-clinical
and clinical development activities, regulatory clearances, formulation of
final product dosage forms, scale-up from bench quantities to commercial
quantities and manufacture of products and commercialization of such
products as well as the successful preservation and extension of the patent
and other intellectual property rights. For a description of these and
other risks, readers are directed to the Company's other filings with the
Securities and Exchange Commission, including the Company registration
statement on Form S-3 declared effective April 7, 1997.
The Amgen Agreement also provides that Amgen will fund and control
substantially all development, manufacturing and commercialization
activities respecting the Neuroimmunophilin Technology. Under certain
circumstances set forth in the Amgen Agreement, Guilford has the option to
conduct certain Phase I and Phase II clinical trials. In addition, in other
circumstances, Guilford has the right to co-promote in the U.S. one product
commercialized under the Amgen Agreement, subject to certain terms and
conditions set forth therein.
- 2 -
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
10.47 Binding Term Sheet, dated August 20, 1997, between Guilford
Pharmaceuticals Inc and GPI NIL Holdings, Inc., and Amgen Inc.*
99.1 Press Release, dated August 21, 1997, entitled "AMGEN
ACQUIRES RIGHTS FROM GUILFORD PHARMACEUTICALS FOR BREAKTHROUGH
NEUROTROPHIC AGENTS ".
- ---------------------------
* Confidential Treatment has been requested for portions of this document.
- 3 -
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GUILFORD PHARMACEUTICALS INC.
Date: September 4, 1997 By: /s/ CRAIG R. SMITH, M.D.
-------------------------------------
Craig R. Smith, M.D.
President and Chief Executive Officer
- 4 -
<PAGE> 1
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
EXHIBIT 10.47
BINDING TERM SHEET
BINDING TERM SHEET, entered into with an effective date of
August 20, 1997 (the "Effective Date"), by and between Guilford Pharmaceuticals
Inc. ("Guilford"), a Delaware corporation with its principal place of business
at 6611 Tributary Street, Baltimore, Maryland 21224, and GPI NIL Holdings,
Inc., its wholly-owned subsidiary Delaware corporation ("Holdings"), and Amgen
Inc., a Delaware corporation, with its principal place of business at Amgen
Center, Thousand Oaks, California 91320-1789 ("Amgen").
WHEREAS, the parties desire to enter into collaboration
respecting the research, development and commercialization of certain small
molecule neuroimmunophilin ligands with neurotrophic and other activities, the
consummation of which is contingent on and subject to the satisfaction of
applicable requirements under the Hart-Scott-Rodino Act;
WHEREAS, the parties nevertheless desire to enter into a
legal and binding agreement respecting the terms and conditions under which
Guilford, Holdings and Amgen are prepared to conduct such collaboration, upon
satisfaction of such legal requirements;
NOW, THEREFORE, the parties in consideration of the mutual
representations, warranties and covenants contained herein and other good and
valuable consideration, and intending to enter into a legal and binding
agreement, hereby agree to the terms and conditions of the Binding Term Sheet
and the accompanying exhibits and schedules, all of which are incorporated
herein by reference.
IN WITNESS WHEREOF, duly authorized representatives of the
parties hereto have duly executed this Agreement as of the Effective Date.
GUILFORD PHARMACEUTICALS INC.
By /s/ Craig R. Smith
------------------------------------------
Name: Craig R. Smith, M.D.
Title: President and Chief Executive Officer
AMGEN INC
By /s/ Gordon M. Binder
------------------------------------------
Name: Gordon M. Binder
Title: Chief Executive Officer
GPI NIL HOLDINGS, INC.
By /s/ Daniel P. McCollom
------------------------------------------
Name: Daniel P. McCollom
Title: Vice President
1
<PAGE> 2
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
1. PARTIES Amgen Inc. ("Amgen"), Guilford
Pharmaceuticals Inc. ("Guilford") and GPI
NIL Holdings, Inc. ("Holdings").
2. EQUITY On the Closing Date (as defined below), for
$20 MM Amgen will purchase 640,095 shares
of Guilford Common Stock and 700,000
Warrants.
Summary of terms for the Common Stock and
Warrant purchase are set forth on Exhibit A
attached hereto and incorporated by
reference herein.
3. SIGNING FEE $15 MM on August 21, 1997.
4. NEUROIMMUNOPHILIN
COMPOUNDS Compounds that [*] and, notwithstanding
the foregoing, those compounds covered by
the Guilford Technology Patent Rights set
forth on Exhibit B attached hereto and
incorporated by reference herein.
5.RESEARCH PROGRAM Guilford will conduct a research program as
set forth in a research plan approved by
Amgen after discussion and consultation
with Guilford (the "Research Program"). The
Research Program will be directed to the
discovery and selection of
Neuroimmunophilin Compounds for development
by Amgen.
Amgen will fund a maximum of [ * ] Guilford
Researcher FTEs at [ * ] (i.e., maximum
$4.5 MM per year in total) to conduct the
Research Program (the "Research Funding").
On a quarterly basis, Guilford will provide
to Amgen reports setting forth the number
of Guilford Researcher FTEs devoted to the
Research Program in the preceding quarter,
a description of the activities of such
researchers in furtherance of the Research
Program and an estimate of the number of
Guilford Researcher FTEs Guilford expects
to be devoted to the Research Program in
the next calendar quarter. Amgen will
provide Research Funding quarterly in
advance based on Guilford's estimates of
the Guilford Researcher FTEs to be devoted
to the Research Program. Amgen will receive
a credit against future Research Funding
(or a refund in the case of the final
calendar quarter of Research Funding) equal
to the amount, if any, by which the number
of Guilford Researcher FTEs funded
2
<PAGE> 3
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
by Amgen in any quarter exceeds the number
of Guilford Researcher FTEs actually
devoted to the Research Program in that
quarter.
Guilford will use reasonable best efforts
to (i) devote [ * ] Guilford Researcher
FTEs per year to the conduct of the
Research Program and (ii) meet the goals of
the Research Program.
The term of the Research Program will be
three years. Amgen shall have the option to
extend the term of the Research Program by
one year on the terms and conditions set
forth herein.
The term of the Research Program will begin
upon the finalization and approval of the
research plan. Following the Effective
Date, the parties will use their reasonable
best efforts to reach Amgen approval of a
research plan as quickly as possible with
the goal that the Research Program will
commence no later than October 1, 1997.
It is the expectation of the parties that
for the first year of the Research Program,
[ * ] Guilford Research FTEs will be
devoted to chemistry of Licensed Products
and [ * ] Guilford Research FTEs will be
devoted to pre-clinical development of
Licensed Products (i.e., screening
metabolism, pharmacokinetics and
toxicology; assay development; and in vivo
screening).
In order to maximize the effective conduct
of the Research Program, Guilford will use
reasonable best efforts to maximize the
continuity of Guilford personnel conducting
the Research Program and provide as devoted
Research Program personnel at least [ * ]
of the Guilford Researcher FTEs funded by
Amgen.
Amgen and Guilford will meet on a quarterly
basis to review in reasonable detail (i)
all data and information generated in the
conduct of the Research Program by
Guilford, (ii) all Guilford Technology (as
defined below) and Joint Technology (as
defined below) developed by Guilford and
(iii) all Amgen Guilford-Derived Technology
(as defined below) and Joint Technology (as
defined below) developed by Amgen. On no
less than a monthly basis, Amgen and
Guilford will meet (whether in person, by
3
<PAGE> 4
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
video-conference or tele-conference) to
discuss any material data or developments
arising out of the Research Program or
which constitute Guilford Technology, Joint
Technology or Amgen Guilford-Derived
Technology.
Guilford will promptly disclose to Amgen
all inventions (whether patentable or not)
and discoveries arising out of the conduct
of the Research Program by Guilford and all
inventions (whether patentable or not)
included in Guilford Technology and Joint
Technology. Amgen will promptly disclose to
Guilford all inventions (whether patentable
or not) included in Amgen Guilford-Derived
Technology and Joint Technology.
All data and information arising out of the
Research Program will be the Confidential
Information (as defined below) of both
Guilford and Amgen.
6. EXCLUSIVITY Guilford will work exclusively
with Amgen in the field of research,
development and commercialization of
Neuroimmunophilin Compounds during the term
of this Agreement.
7. COLLABORATION
TECHNOLOGY All technology encompassed by the Guilford
Technology, Amgen Guilford-Derived
Technology and Joint Technology, each as
defined below.
Guilford Technology shall mean all
proprietary data, information and
intellectual property (i) developed,
discovered or invented by Guilford
personnel in the conduct of the Research
Program, (ii) owned or controlled by
Guilford and/or Holdings on the Effective
Date and/or during the term of this
Agreement which claim, describe and/or
relate to Neuroimmunophilin Compounds
and/or (iii) owned or controlled by
Guilford and/or Holdings on the Effective
Date and/or during the term of this
Agreement and necessary or useful to make,
use or sell Neuroimmunophilin Compounds.
Guilford Technology will specifically
include the Patent Rights set forth on
Exhibit B attached hereto and incorporated
herein.
Amgen Guilford-Derived Technology shall
mean all proprietary data, information and
intellectual property developed, discovered
or invented by Amgen personnel during the
term of the Research Program directly
resulting
4
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* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
from the use of Guilford Technology,
provided, however, in no event will Amgen
Guilford-Derived Technology include any
intellectual property owned or controlled
by Amgen prior to or on the Effective Date
and, provided further, however, that Amgen
Guilford-Derived Technology shall not
include any improvements or modifications
of such intellectual property owned or
controlled by Amgen on or prior to the
Effective Date which do not primarily
result from the collaboration.
Joint Technology shall mean all proprietary
data, information and intellectual property
developed, discovered or invented jointly
by Guilford personnel and Amgen personnel.
8. LICENSED PRODUCTS All products described and/or claimed in
and/or incorporating Collaboration
Technology.
9. FIELD OF USE All human therapeutic, prophylactic and
diagnostic uses of Licensed Products.
10. LICENSE GRANT Guilford and Holdings hereby grant to Amgen
an exclusive worldwide license, with a
right to sublicense, under the
Collaboration Technology to make, have
made, use, sell, offer to sell and import
Licensed Products in the Field of Use.
Amgen hereby grants to Guilford a
non-exclusive worldwide license, with no
right to sublicense, under the
Collaboration Technology to use Licensed
Products in the Field of Use to the extent
necessary for Guilford to conduct research
hereunder, co-develop a single indication
for a Licensed Product and co-promote a
single indication for a Licensed Product as
set forth in this Agreement. This
sublicense specifically excludes, without
limitation, all rights and licenses under
the Collaboration Technology to make, have
made, sell or import Licensed Products.
12. MILESTONES Milestones will be payable one-time and
indication by indication regardless of how
many Licensed Products are developed in the
total amounts set forth below.
TOTAL MILESTONE PAYMENTS
Category One Indication
- First of Parkinson's Disease or
5
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* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
<TABLE>
<S> <C>
Alzheimer's Disease $56 MM
Category Two Indications
- Second of Parkinson's Disease or
Alzheimer's Disease
- Traumatic Brain Injury
- Traumatic Spine Injury
- Multiple Sclerosis
- Neuropathy (all causes)
- Stroke $42 MM each
Category Three Indications
- [ * ]
- [ * ]
- [ * ] $[ * ] each
Category Four Indications
- All other indications $[ * ] each
</TABLE>
TIMING OF MILESTONE PAYMENTS
The events which trigger milestone payments
will depend on whether the indication is
the first approved indication for a
Licensed Product or an additional
indication for a previously approved
Licensed Product. Multiple indications for
an unapproved Licensed Product will each be
treated independently until one of the
indications is approved at which time the
remaining Milestone payments will be
allocated as set forth below for the other
indications, provided, however, in no event
will total Milestone payments for any
indication exceed the amounts set forth
above for the applicable category.
<TABLE>
<S> <C>
Start of a Pivotal Trial in the U.S. 15%
NDA Submission to FDA 30%
NDA Approval by FDA 55%
</TABLE>
Milestones will be payable for additional
indications for Licensed Products which are
previously FDA approved for another
indication if, and only if, (i) the
indication represents a Significant Medical
Market and the Licensed Product addresses
the majority of eligible patients in the
Significant Medical Market and (ii) the
indication represents a disease category
which is distinct from previously approved
indications (i.e., additional indication
Milestones will not be paid for studies and
approvals to
6
<PAGE> 7
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
treat subpopulations within an approved
indication or new or different treatment
regimens for approved indications).
For the purposes of Milestone payments
hereunder, a "Pivotal Trial" shall mean a
clinical trial which, if the defined
end-points are met, is intended by Amgen as
of the start of such trial to be the
clinical trial which will constitute
sufficient basis for receipt of marketing
approval in the United States. In the event
that the FDA shall notify Amgen that an NDA
filing may be made based solely on the
results of a clinical trial which would not
otherwise constitute a Pivotal Trial, the
Milestone payments set forth herein for
Start of a Pivotal Trial in the U.S. will
be payable upon receipt of such notice. The
foregoing notwithstanding, the decision to
seek FDA approval to file an NDA based
solely on data from a clinical trial which
would not otherwise constitute a Pivotal
Trial will be made by Amgen in its business
discretion consistent with Amgen's
regulatory strategy for Licensed Products.
Category One Indications - If the Category
One indication is the first indication for
a Licensed Product, the Category One
Milestones will be paid upon the first
occurrence of the events set forth below.
<TABLE>
<S> <C>
Lead Selection $1.0 MM
(i.e., commencement by Amgen of
GLP tox studies of at least 1 month
duration)
IND Filing with FDA $5.0 MM
Start of a Pivotal Trial in U.S. $7.5 MM
NDA Submission to FDA $15.0 MM
NDA Approval by FDA $27.5 MM
------------------- --------
Total $56.0 MM
</TABLE>
If the Category One Indication is an
additional indication for a Licensed
Product previously approved in the U.S.,
the Category One Milestones will be paid on
the first occurrence of the events as set
forth below
<TABLE>
<S> <C>
Start of a Pivotal Trial in the U.S. $8.4 MM
NDA Submission to FDA $16.8 MM
NDA Approval by FDA $30.8 MM
------------------- --------
Total $56.0 MM
</TABLE>
7
<PAGE> 8
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Category Two Indications - If a Category
Two indication is the first indication for
a Licensed Product, the Category Two
Milestones will be paid in the amounts set
forth below upon the first occurrence of
the events set forth below.
<TABLE>
<S> <C>
Lead Selection $0.75 MM
(i.e., commencement by Amgen of
GLP tox studies of at least 1 month
duration)
IND Filing with FDA $3.75 MM
Start of a Pivotal Trial in U.S. $5.625 MM
NDA Submission to FDA $11.25 MM
NDA Approval by FDA $20.625 MM
------------------- ----------
Total $42.0 MM
</TABLE>
If a Category Two Indication is an
additional indication for a Licensed
Product previously approved in the U.S.,
the Category Two Milestones will be paid on
the first occurrence of the events as set
forth below.
<TABLE>
<S> <C>
Start of a Pivotal Trial in the U.S. $6.3 MM
NDA Submission to FDA $12.6 MM
NDA Approval by FDA $23.1 MM
------------------- --------
Total $42.0 MM
</TABLE>
Category Three Indications - If a Category
Three indication is the first indication
for a Licensed Product, the Category Three
Milestones will be paid in the amounts set
forth below upon the first occurrence of
the events set forth below.
<TABLE>
<S> <C>
Lead Selection $[ * ]
(i.e., commencement by Amgen of
GLP tox studies of at least 1 month
duration)
IND Filing with FDA $[ * ]
Start of a Pivotal Trial in U.S. $[ * ]
NDA Submission to FDA $[ * ]
NDA Approval by FDA $[ * ]
------------------- ------
Total $[ * ]
</TABLE>
If a Category Three Indication is an
additional indication for a Licensed
Product previously
8
<PAGE> 9
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
approved in the U.S., the Category Three
Milestones will be paid on the first
occurrence of the events as set forth below.
<TABLE>
<S> <C>
Start of a Pivotal Trial in the U.S. $[ * ]
NDA Submission to FDA $[ * ]
NDA Approval by FDA $[ * ]
------------------- ------
Total $[ * ]
</TABLE>
Category Four - Category Four Milestones
will be paid in the amount set forth below
upon the first occurrence of the event set
forth below for Category Four indications
which are the first indication for a
Licensed Product and for Category Four
indications for previously approved
Licensed Products.
<TABLE>
<S> <C>
NDA Approval by FDA $[ * ]
</TABLE>
13. ROYALTIES Royalties will be payable on a Licensed
Product by Licensed Product basis. For the
purposes of royalty payments hereunder, a
single Licensed Product will comprise all
formulations (e.g., tablets, gel-caps,
topical formulations, parenteral
formulations, sustained release
formulations, etc.) of the same Active
Entity and all indications for which that
Active Entity may be used.
"Active Entity" shall mean [*]
[*]
9
<PAGE> 10
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Royalties will be payable on a Licensed
Product by Licensed Product basis (i) based
upon aggregate annual Net Sales of the
Licensed Product (combined Net Sales of the
Licensed Product in countries in which it
is a Patented Product and in countries in
which it is an Unpatented Product) in the
United States, European Union countries (as
such countries may change from time to
time) and Japan (the "Major Market
Countries") and (ii) on a country by
country basis outside the Major Market
Countries as set forth below.
- [ * ]% of that portion of annual
combined Net Sales of a Licensed
Product in the Major Market
Countries less than or equal to
$300 MM
- [ * ]% of that portion of annual
combined Net Sales of a Licensed
Product in the Major Market
Countries greater than $300 MM and
less than or equal to $700 MM
- [ * ]% of that portion of annual
combined Net Sales of a Licensed
Product in the Major Market
Countries greater than $700 MM
- [ * ]% of Net Sales of a Licensed
Product in each country outside the
Major Market Countries
In no event will royalties on a Licensed
Product in any country be reduced by more
than 50% or reduced below a worldwide
weighted average royalty rate equal to [ *
]% of worldwide annual Net Sales by reason
of the Unpatented Product, Third Party
Royalty, Competition, and COGS royalty
reductions and adjustments set forth below.
While royalties for a Licensed Product will
be calculated and paid quarterly, any
difference between annual royalty
10
<PAGE> 11
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
based on aggregating quarterly calculations
and annual royalty based on actual Net
Sales for the year and any required royalty
adjustments will be made by an adjustment
payment by Amgen at the time the 4th
quarter royalty payment is made or an
adjustment credit against Amgen's future
royalty obligations.
A sample royalty calculation is attached as
Exhibit D.
14. UNPATENTED PRODUCT
REDUCTION Royalties payable to Guilford on Unpatented
Products will be payable at [ * ]% of the
rates set forth above.
15. THIRD PARTY
ROYALTY REDUCTION On a country by country basis, [ * ]% of
royalties paid by Amgen to enable Amgen to
make, have made, use, sell, offer to sell
or import Licensed Products under Patent
Rights owned or controlled by a third party
will be creditable against royalties
payable to Guilford hereunder.
Notwithstanding the foregoing, in no event
will Amgen be entitled to credit against
royalties payable to Guilford third party
royalties which exceed in the aggregate [ *
]% of Net Sales of a Licensed Product in
any country by reason of third party
royalty payments without Guilford's
consent, such consent not to be
unreasonably withheld.
16. COMPETITION The royalty rates applicable to Net Sales
of a Licensed Product in the Major Market
Countries will be adjusted as set forth
below in the event Competition (as defined
below) exists in that country.
"Competition" shall exist with respect to a
Licensed Product (a "Competition Impaired
Licensed Product") in a Major Market
Country if one or more Competitive
Compounds (as defined below) shall be
commercially available in such Major Market
Country and shall have in the aggregate [*]%
or more share of the total market for
[*] in that Major Market Country as
measured by sales volume. If Competition
exists in a Major Market Country, the
royalty rates applicable to Net Sales of a
Competition Impaired Licensed Product will
be adjusted as set forth below based upon
whether one or more than one Competitive
Compound shall be commercially available.
For the purposes of this provision,
"Competitive Compounds" shall mean and
include Neuroimmunophilin
11
<PAGE> 12
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Compounds (other than Licensed Products
developed by Amgen pursuant to this Binding
Term Sheet) and other compounds which [*]
In the event Competition exists and one
Competitive Compound is commercially
available in a Major Market Country, the
royalty rate on the Competition Impaired
Licensed Product in that Major Market
Country will be as set forth below.
- [ * ]% of that portion of annual
combined Net Sales of the
Competition Impaired Licensed
Product in the Major Market
Countries less than or equal to
$300 MM
- [ * ]% of that portion of annual
combined Net Sales of the
Competition Impaired Licensed
Product in the Major Market
Countries greater than $300 MM and
less than or equal to $700 MM
- [ * ]% of that portion of annual
combined Net Sales of the
Competition Impaired Licensed
Product in the Major Market
Countries greater than $700 MM
In the event Competition exists and more
than one Competitive Compound is
commercially available in a Major Market
Country, the royalty rate on the
Competition Impaired Licensed Product in
that Major Market Country will be as set
forth below.
12
<PAGE> 13
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
- [ * ]% of that portion of annual
combined Net Sales of the
Competition Impaired Licensed
Product in the Major Market
Countries less than or equal to
$300 MM
- [ * ]% of that portion of annual
combined Net Sales of the
Competition Impaired Licensed
Product in the Major Market
Countries greater than $300 MM and
less than or equal to $700 MM
- [ * ]% of that portion of annual
combined Net Sales of the
Competition Impaired Licensed
Product in the Major Market
Countries greater than $700 MM
[*]
There will be no adjustment of the royalty
schedule for Competition outside the Major
Market Countries.
The royalty rate adjustments set forth
above for competitive markets are intended
to allow Amgen to profitably commercialize
Licensed Products given the royalties
payable to Guilford and the pressures of
the competitive environment. In the event
the competitive environment for a Licensed
Product in certain markets is such that
commercialization of the Licensed Product
becomes uneconomic to Amgen at the royalty
rates set forth above,
13
<PAGE> 14
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Amgen and Guilford will in good faith
discuss an adjustment of the royalty
payable to Guilford on Licensed Products.
17. ADJUSTMENT
FOR COGS In the event that at any time after the 24
month period following the first commercial
sale of a Licensed Product in any of the
Major Market Countries, COGS shall (i) be
less than [ * ] of Net Sales, the
applicable royalty on Net Sales will be
increased by [ * ] for each [ * ] point by
which COGS is less than [ * ] or (ii)
exceed [ * ] of Net Sales, the applicable
royalty rate will be reduced by [ * ] for
each [ * ] point by which COGS is greater
than [ * ] of Net Sales.
18. [ * ] ROYALTY Anything herein to the contrary
notwithstanding, if the [ * ] License
Agreements shall be terminated and Amgen
shall enter into license agreement with
[ * ] regarding any Collaboration
Technology (as contemplated by the Consent
and Agreement attached hereto as Exhibit
E), Amgen shall deduct the full amount of
any royalties and other payments actually
made by Amgen, its affiliates or
sublicensees to [ * ] from royalties and
milestones payable to Guilford hereunder,
provided, however, Guilford shall have
approved the amounts of any payments under
such license agreement, such approval not
to be unreasonably withheld.
19. TERM OF ROYALTY Royalties will be payable on a country by
country basis on a Patented Product until
the last to expire of the patents covering
such Patented Product and on an Unpatented
Product for [ * ] years from first
commercial sale of the Unpatented Product.
20. DEVELOPMENT It is the hope and goal of Amgen and
Guilford that within the first [ * ] years
of this collaboration, Guilford will
identify at least [ * ] Neuroimmunophilin
Compounds which are IND candidates and
Amgen will file at least [ * ] INDs and
initiate at least [ * ] Phase II and [ * ]
Phase III clinical trials for Licensed
Products. It is also the hope and goal of
Amgen to develop and commercialize Licensed
Products worldwide. The parties recognize
and agree that each of these events depend
on the scientific rationale for therapeutic
activity of Licensed Products, the
pre-clinical
14
<PAGE> 15
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
safety profiles demonstrated by Licensed
Products, the clinical benefits
demonstrated in clinical trials of Licensed
Products and the commercial opportunity
presented by Licensed Products. There can
be no guarantee or commitment by either
party to meet these goals and, provided a
party's obligation to use Commercially
Reasonable Efforts has been met, it will
not be a Default by a party if these goals
are not met.
Notwithstanding anything to the contrary
set forth herein, Amgen will conduct, fund
and make all decisions regarding the
pre-clinical and clinical development of
Licensed Products including which IND
candidates to take into clinical
development, which indications to pursue
and what regulatory strategies to adopt.
Promptly upon approval by Amgen, Amgen will
provide to Guilford copies of the Amgen
annual development plans for Licensed
Products. Amgen and Guilford will meet on a
quarterly basis to review the progress and
status of development of Licensed Products.
On no less than a monthly basis, Amgen and
Guilford will meet (whether in person, by
video-conference or tele-conference) to
discuss any material data or developments
arising out of Licensed Product
development.
Data and information arising out of Amgen's
pre-clinical and clinical development of
Licensed Products will be Confidential
Information belonging to Amgen.
Notwithstanding the foregoing, to the
extent Amgen shall have transferred any
pre-clinical and/or clinical data to
Guilford in connection with a termination
of this Agreement by Amgen as specifically
provided in the "Termination of Licensed
Product Development and Commercialization"
or by Guilford due to Default by Amgen, in
each case as set forth in Section 26,
Termination below, (i) all raw in vivo, in
vitro and clinical data included in the
transferred data will be Guilford owned
Confidential Information, (ii) all forms,
methodologies and information used in the
preparation of such data which are
proprietary to Amgen will be Amgen
Confidential Information (provided Amgen
will grant to Guilford the right to use
such information but only to the extent
necessary to allow Guilford to use the
transferred data) and (iii) and all other
15
<PAGE> 16
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
data and information will be Amgen and
Guilford jointly owned Confidential
Information hereunder.
Amgen will use Commercially Reasonable
Efforts to develop Licensed Products.
21. GUILFORD OPTION TO
CO-DEVELOP Guilford shall have the option to conduct
Phase I and Phase II clinical studies (but
not Phase III clinical studies) for a
single Licensed Product in a single
indication selected by Amgen and accepted
by Guilford (the "Co-Development
Indication").
In accordance with a CRO type agreement
between Amgen and Guilford, Guilford will
have the option to prepare and submit to
Amgen for approval draft protocols,
monitoring plans, investigators' brochures,
data analysis plans and lists of proposed
sites and clinical investigators for the
Phase I and Phase II clinical studies in
the Co-Development Indication. Subject to
Amgen's approval, Guilford will conduct and
monitor the studies in accordance with
these protocols and plans.
Amgen will be the regulatory Sponsor of the
Co-Development Indication clinical trials
conducted by Guilford and will hold the IND
and be responsible for all FDA contact.
Within 6 months after Amgen's decision to
file the 3rd IND for Licensed Products,
Amgen, after consultation with Guilford at
which time Guilford may propose to Amgen a
Co-Development Indication, will select a
Co-Development Indication. It is understood
that Amgen may file more than one IND on
the same Licensed Product and that the 3
INDs referred to above may be for
indications for the same or different
Licensed Products. Notwithstanding the
foregoing, Amgen will have no obligation to
select a Co-Development Indication in the
event that in Amgen's commercially
reasonable judgment, pre-clinical studies
do not suggest sufficient potential
therapeutic application and commercial
opportunity to warrant clinical development
of more than 3 different indications.
Clinical studies in the Co-Development
Indication will be governed by Amgen's
overall development plan for
16
<PAGE> 17
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Licensed Products including regulatory
strategies and timetables and will be
consistent with Amgen standard development
procedures and practices.
Amgen and Guilford will meet on a quarterly
basis to review the progress and status of
Guilford's development of the
Co-Development Indication. On no less than
a monthly basis, Guilford and Amgen will
meet (whether in person, by
video-conference or tele-conference) to
discuss any material data or developments
arising out of the Co-Development
Indication development.
Amgen will fund the outside costs
associated with the conduct of the
Co-Development Indication Phase I and Phase
II studies (per patient costs and site
costs) as set forth in a budget proposed by
Guilford and approved by Amgen. Amgen will
reimburse Guilford for Guilford's actual
costs incurred for the conduct of the
Co-Development Indication Phase I and II
clinical studies by Guilford development
personnel, provided, however, that Amgen
shall not be obligated to reimburse
Guilford for any costs in excess of what a
CRO would charge to conduct an equivalent
study.
22. MANUFACTURING Amgen shall be responsible for the
manufacturing of Licensed Products,
directly and/or through contracted third
parties.
23. COMMERCIALIZATION Amgen will make all decisions regarding the
commercialization and sales and marketing
of Licensed Products.
Amgen will use Commercially Reasonable
Efforts to market and sell Licensed
Products.
24. GUILFORD OPTION
TO CO-PROMOTE Guilford shall have the option to
co-promote in the U.S. a single Licensed
Product in a mutually agreed indication
other than Parkinson's Disease or
Alzheimer's Disease.
Co-promotion by Guilford will be limited to
Guilford field sales force representatives
double calling with Amgen's field sales
force representatives on physician's
offices. Guilford sales representatives
will not call on national accounts.
17
<PAGE> 18
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Co-promotion by Guilford will be in
accordance with Amgen's sales and marketing
plan using Amgen's field sales materials.
Guilford will be entitled to have at least
[ * ] field sales force representatives but
in no event will the Guilford sales force
exceed the lesser of [ * ] field sales
representatives or [ * ]% of the allocated
Amgen sales force effort for the
co-promoted indication for the Licensed
Product.
Amgen will reimburse Guilford for
co-promotion by Guilford sales
representatives at the fully-loaded cost to
Amgen (salary, benefits, travel and
District Managers) of an equivalent number
of Amgen sales representatives for the
co-promoted indication for the Licensed
Product.
25. INTELLECTUAL
PROPERTY Patent Prosecution. Amgen, at its expense,
shall be responsible for worldwide
preparation, filing, prosecution,
maintenance and defense of patent
applications and patents claiming
generically or specifically inventions
included in Guilford Technology ("Guilford
Inventions"), Joint Technology ("Joint
Inventions") and Amgen Guilford-Derived
Technology ("Amgen Inventions"). In the
event Amgen elects not to prepare, file,
prosecute, maintain or defend any Guilford
Inventions or Joint Inventions, Amgen shall
give Guilford sufficient notice to afford
Guilford the opportunity to do so at
Guilford's cost, in which event, Guilford
will own any patents issuing thereon.
Enforcement of Patent Rights. Amgen shall
have the right but not the obligation, in
its own name, to enforce Patent Rights
included within the Collaboration
Technology against any third party
suspected of infringing a claim of a Patent
Right included in Collaboration Technology.
Amgen shall have exclusive control over the
conduct of any such proceedings, including
the right to settle or compromise such
proceedings consistent with Amgen's
licenses under Collaboration Technology.
The expense of any proceeding Amgen
initiates, including lawyers' fees and
costs, shall be borne by Amgen. Guilford
agrees to cooperate fully with Amgen in
such action upon request by Amgen. Any
award or recovery paid to Amgen by a third
party as a result of such patent
infringement proceedings (whether by way of
18
<PAGE> 19
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
settlement or otherwise) shall first be
applied toward reimbursement of legal fees,
costs and expenses incurred. From the
remainder, if any, Amgen shall pay to
Guilford an amount equal to the applicable
royalty rate as applied to the remainder as
though such remainder were Net Sales of
Licensed Products in the year in which the
award or recovery is received.
Infringement Defense. Amgen shall have the
right, but not the obligation, to defend
and control any suit against any of Amgen,
Amgen's affiliates or sublicensees,
Guilford and/or Guilford's affiliates
alleging infringement of any patent or
other intellectual property right of a
third party arising out of the manufacture,
use, sale, offer to sell or importation of
a Licensed Product by Amgen or its
sublicensees. In the event such suit or
action is brought by [ * ] Amgen and
Guilford will each bear 50% of all costs
and expenses, including lawyers' fees and
costs, associated with such suit. Amgen
will provide Guilford with quarterly
reports setting forth Guilford's portion of
such fees and costs and Guilford will make
payment of such amounts to Amgen within 30
days following receipt of Amgen's report.
In the event such suit is brought by or on
behalf of any other third party, Amgen
shall be responsible for the costs and
expenses, including lawyer's fees and
costs, associated with any suit or action.
In either case, promptly following the
filing of any such suit or action, Amgen
and Guilford will agree on the appropriate
amount of cash reserve for Guilford to
maintain against possible settlement or
damages payments arising out of such suit
or action. In no event will the Guilford
cash reserve, at any time, be less than 50%
of the amount of any settlement proposed by
Amgen. In the event the patent claim of any
third party is held in a final and
unappealable order of a court to be valid
and infringed, or if Amgen enters into a
settlement of such proceedings, Amgen shall
pay the full amount of any damages and/or
settlement amounts due to such third party
and Guilford shall promptly reimburse Amgen
for 50% of such amounts.
Cooperation Between the Parties. Amgen and
Guilford agree to cooperate with each other
in the preparation, filing, prosecuting,
maintenance, defense and enforcement of
Patent Rights included in Collaboration
Technology. In any action taken in the
prosecution of, or in the defense of an
action by
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<PAGE> 20
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
a third party related to patent invalidity
or non-patentability of any patent
application or patent claiming
Collaboration Technology, neither party
shall admit the invalidity or
non-patentability of any Patent Right or
take any other action that may diminish
Patent Rights within Collaboration
Technology without the other party's prior
written consent. Amgen agrees to provide
Guilford with sufficient time to review,
comment and consult on all patent
applications and patents and all
correspondence to and from the various
patent offices, including, but not limited
to, proposed responses, interferences and
oppositions, claiming Guilford Inventions
or Joint Inventions. Amgen and Guilford
agree to cooperate with each other and to
use best efforts to ensure the cooperation
of any of their respective personnel and
licensee(s) or licensor(s) as might
reasonably be requested in any such
matters, and shall sign any necessary legal
papers and provide the prosecuting party
with data or other information in support
thereof. Amgen and Guilford will confer on
what action to take with respect to the
defense of infringement proceedings naming
both Amgen and Guilford or in proceedings
to enforce patents claiming Collaboration
Technology against a third party. If the
parties can not agree on the course of
action to be taken in the filing,
prosecution, maintenance, enforcement of
any patent application or patent within
Collaboration Technology or in the defense
of any third party infringement action,
Amgen's decisions shall control.
26. TERMINATION Term. This Agreement will continue in full
force and effect until the last to expire
of the Patents Rights included in
Collaboration Technology.
Research Program. In the event that at the
end of the second year of the Research
Program, no Neuroimmunophilin Compound has
been identified which, in Amgen's sole
opinion, is an IND candidate or likely to
lead to an IND candidate, Amgen shall have
the option to terminate the Research
Program upon written notice to Guilford.
Upon such termination, Amgen will have no
further funding obligations for the
Research Program.
20
<PAGE> 21
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Termination of Licensed Product Development
and Commercialization. Subject to
satisfaction of Amgen's minimum Research
Funding commitment (2 years Research
Funding), in the event that Amgen shall
elect at any time to discontinue all
activities relating to the development and
commercialization of Licensed Products or
shall elect to discontinue use of
Commercially Reasonable Efforts in the
development and commercialization of
Licensed Products, Amgen shall provide
written notice to Guilford setting forth
Amgen's election and upon Guilford receipt
of such notice this Agreement will
terminate. In the event this Agreement
shall be terminated pursuant to this
paragraph:
(i) Amgen shall be deemed to have used
Commercially Reasonable Efforts to develop
Licensed Products throughout the term of
this Agreement;
(ii) Amgen will transfer to Guilford all
material pre-clinical and clinical data on
Licensed Products reasonably available to
Amgen on the date of termination; and
(iii) Amgen will grant to Guilford a
non-exclusive, royalty-free, worldwide
license to the Amgen Guilford-Derived
Technology which relates primarily and
specifically to Neuroimmunophilin Compounds
to make, have made, use, sell and import
Neuroimmunophilin Compounds in the Field of
Use.
Licenses. Amgen shall have the right to
terminate any of the licenses to the
Collaboration Technology, in whole or in
part, upon 60 days prior written notice to
Guilford.
Default.
- Amgen. Upon the Default by Amgen
under this Agreement, Guilford
shall notify Amgen of such Default
and require that Amgen cure such
Default within 60 days. In the
event Amgen shall not have cured
the Default at the end of the 60
day grace period:
21
<PAGE> 22
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
(i) Guilford may terminate this
Agreement and all licenses to the
Collaboration Technology granted by
Guilford to Amgen herein will
revert to Guilford;
(ii) Amgen will satisfy its minimum
Research Funding commitment
hereunder (2 years);
(iii) Amgen will transfer to
Guilford all material pre-clinical
and clinical data on Licensed
Products reasonably available to
Amgen on the date of termination;
and
(iii) Amgen will grant to
Guilford a non-exclusive, royalty-
free, worldwide license to the Amgen
Guilford-Derived Technology which
relates primarily and specifically
to Neuroimmunophilin Compounds to
make, have made, use, sell and
import Neuroimmunophilin Compounds
in the Field of Use.
- Guilford. Upon the Default by
Guilford under this Agreement,
Amgen shall notify Guilford of such
Default and require that Guilford
cure such Default within 60 days.
In the event Guilford shall not
have cured the Default at the end
of the 60 day grace period Amgen
may;
(i) terminate the Research Program;
(ii) terminate the sublicense to
the Collaboration Technology granted
by Amgen to Guilford hereunder;
(iii) terminate Guilford's option
to co-develop a single indication of
a Licensed Product;
(iv) terminate Guilford's option to
co-promote a single indication of a
Licensed Product; and
(iv) deduct from royalties payable
to Guilford any costs, liabilities,
damages, claims or expenses
incurred by Amgen which result
directly from Guilford's Default
including any third party
liabilities.
22
<PAGE> 23
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Bankruptcy. In the event Guilford shall
declare or be declared bankrupt, Amgen:
(i) may terminate the Research Program; and
(ii) may terminate Guilford's option to
co-develop a single indication for a
Licensed Product;
(iii) may terminate Guilford's option to
co-promote a single indication of a
Licensed Product; and
(iv) shall retain all licenses to
Collaboration Technology granted by
Guilford to Amgen herein, subject to the
payment to Guilford of the milestones and
royalties set forth above.
Acquisition. Upon the Acquisition of
Guilford by a third party, Amgen;
(i) may terminate the Research Program; and
(ii) may terminate Guilford's option to
co-develop a single indication for a
Licensed Product;
(iii) may terminate Guilford's option to
co-promote a single indication of a
Licensed Product; and
(ii) shall retain all licenses to
Collaboration Technology granted by
Guilford to Amgen herein, subject to the
payment to Guilford of the milestones and
royalties set forth above.
Damages. Neither party will be liable for
consequential damages incurred by the
other party arising out of any default
under this Agreement.
27. INDEMNIFICATION Amgen will indemnify Guilford and hold
Guilford harmless from all liability, loss,
damage and cost arising out of (i) any
claims of any nature (other than claims by
third parties relating to patent
infringement) arising out of the research,
development, marketing and/or sale of
Licensed Products by, on behalf of or under
authority of, Amgen and/or (ii) any
representation or warranty set forth herein
being untrue in any material respect when
made.
23
<PAGE> 24
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Guilford will indemnify Amgen and hold
Amgen harmless from all liability, loss,
damage and cost arising out of (i) any
claims of any nature (other than claims by
third parties relating to patent
infringement) arising out of the research,
development or promotion of Licensed
Products by, on behalf of or under
authority of, Guilford and/or (ii) any
representation or warranty of Guilford set
forth herein having been untrue in any
material respect when made.
Each party will notify the other in the
event it becomes aware of a claim for which
indemnification may be sought hereunder.
28. REPRESENTATIONS,
WARRANTIES AND
COVENANTS Guilford represents and warrants:
- [ * ] the terms of this Binding Term
Sheet do not conflict with the terms of any
other Guilford contractual obligations,
- except as set forth on Schedule One
hereto, it is aware of no action, suit,
inquiry or investigation which questions or
threatens the validity of any Patent Rights
included in the Guilford Technology,
- the [ * ] License Agreements are in full
force and effect,
- the Patent Rights set forth on Exhibit B
hereto include all Patent Rights owned or
controlled by Guilford, Holdings or any
affiliate of Guilford and/or Holdings which
claim or describe Neuroimmunophilin
Compounds, and
- it has full corporate power and authority
to enter into this Binding Term Sheet and
carry out the agreements set forth herein.
Guilford covenants:
- to use best efforts to deliver to Amgen
as soon as possible after the Effective
Date, a Consent and Agreement substantially
in the form attached hereto as Exhibit E
signed by Guilford and [ * ].
Amgen represents and warrants:
- the terms of this Binding Term Sheet do
not conflict with the terms of any other
Amgen contractual obligations,
- it has full corporate power and authority
to enter into this Binding Term Sheet and
carry out the agreements set forth herein,
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<PAGE> 25
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
- except for the evaluation of the Guilford
Technology for purposes of determining
whether or not to enter into a business
relationship with Guilford, as of the
Effective Date Amgen is not engaged in a
research program directed to the discovery
of Neuroimmunophilin Compounds.
29. CONFIDENTIALITY Except to the extent expressly authorized
by this Agreement or otherwise agreed in
writing, the parties agree that, for the
term of this Agreement and for five (5)
years thereafter, Guilford and/or Amgen, as
the case may be (the "Receiving Party"),
shall keep confidential and shall not
publish or otherwise disclose or use for
any purpose other than as provided for in
this Agreement any proprietary data,
information and/or materials furnished to
it by the other party (the "Disclosing
Party") (together with all other data and
information deemed Confidential Information
of either party herein, "Confidential
Information"), except, to the extent that
it can be established:
(a) by the Receiving Party that
Confidential Information was
already known to the Receiving
Party, other than under an
obligation of confidentiality, at
the time of disclosure by the
Disclosing Party and such Receiving
Party has documentary evidence to
that effect;
(b) by the Receiving Party that
Confidential Information was
generally available to the public or
otherwise part of the public domain
at the time of its disclosure to the
Receiving Party;
(c) by a party that Confidential
Information became generally
available to the public or
otherwise part of the public domain
after its disclosure or
development, as the case may be,
and other than through any act or
omission of a party in breach of
this confidentiality obligation; or
(d) by a party that Confidential
Information was disclosed to that
party, other than under an
obligation of confidentiality, by a
third party who had no obligation
to the Disclosing Party not to
disclose such information to
others.
25
<PAGE> 26
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Each party may disclose Confidential
Information belonging to the other party to
the extent such disclosure is reasonably
necessary in filing or prosecuting patent
applications, prosecuting or defending
litigation and complying with applicable
governmental regulations. Amgen shall
further have the right to disclose
Confidential Information owned by Guilford
or jointly by Amgen and Guilford in
developing Licensed Products including
conducting pre-clinical and clinical trials
and commercializing and promoting Licensed
Products. Guilford, with Amgen's prior
approval, shall have the right to disclose
Confidential Information owned by Amgen or
jointly by Amgen and Guilford in connection
with Guilford's clinical development of the
Co-Development Indication and in Guilford's
promotion of a single indication for a
Licensed Product in accordance with the
terms and conditions set forth in this
Agreement.
Data and information arising out of the
Research Program and Guilford's development
of the Co-Development Indication will be
Amgen and Guilford joint Confidential
Information. Data and information arising
out of the research, pre-clinical and
clinical development and commercialization
of Licensed Products by Amgen will be Amgen
Confidential Information.
The parties understand that the financial
terms of this Agreement will be of material
importance to Guilford and of intense
interest to Guilford's shareholders and the
investment community and that this
Agreement will be filed with the SEC in
connection with Guilford's SEC filings. The
parties will consult with one another on
the terms of this Agreement to be redacted
in SEC filings. Guilford agrees to seek
confidential treatment in its SEC filings
for the royalty rates set forth in Sections
13-17 and Amgen agrees that the signing
fee, equity investment, Research Funding,
total Milestone payments, CNS indications
and schedule of Category One and Category
Two Milestone payments will be disclosed.
30. PUBLICATION Neither party will publish the structure of
any Licensed Product prior to publication
of the structure in a patent application.
26
<PAGE> 27
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Guilford will submit to Amgen for review
and approval all proposed academic,
scientific and medical publications
relating to Licensed Products and/or
Collaboration Technology no less than 30
days prior to submission for publication.
Amgen will use best efforts to provide to
Guilford copies of all Amgen academic,
scientific and medical publications
relating to Licensed Products and/or
Collaboration Technology prior to
publication.
31. PUBLIC
ANNOUNCEMENTS The parties agree on the importance of
coordinating their public announcements
respecting this Agreement and the subject
matter thereof (other than academic,
scientific or medical publications which
are subject to the publication provision
set forth above). Guilford and Amgen will,
from time to time, and at the request of
the other party discuss and agree on the
general information content relating to
this Agreement, Collaboration Technology
and Licensed Products which may be publicly
disclosed.
Guilford will not make any public
announcement (whether required by law or
otherwise) regarding this Agreement,
Collaboration Technology or Licensed
Products (other than academic, scientific
or medical publications which are subject
to the publication provisions set forth
above) without giving Amgen the opportunity
to review and comment prior to release
unless Guilford shall deliver to Amgen a
written opinion of outside counsel
reasonably acceptable to Amgen that the
specific disclosure is required by law and
that time did not permit Amgen's review and
Guilford indemnifies Amgen against any
costs, expenses, damages or liabilities
arising out of any material omission or
false or misleading statements therein.
In no event will either party use the name
of the other in any press release or public
announcement without the prior approval of
the named party.
Promptly after the execution and delivery
of this Binding Term Sheet, the parties
will issue a press release in the form
attached hereto and incorporated herein as
Exhibit C.
32. HART-SCOTT-RODINO Guilford and Amgen shall promptly take all
actions necessary (i) to make the filing
required under the HSR Act, and (ii) to
comply at the earliest practicable date
with
27
<PAGE> 28
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
any request for information received from
the Federal Trade Commission ("FTC") or the
Antitrust Division of the Department of
Justice ("DoJ") pursuant to the HSR Act.
The parties will consult with one another
prior to making any filings, responses to
inquiries or other contacts with the FTC or
DoJ concerning the transactions
contemplated hereby.
Guilford will co-operate with Amgen in any
action resisting any effort by the FTC, DoJ
or the State Attorney General or any court,
arbitrator or governmental body seeking to
prohibit, restrain or enjoin the
transactions contemplated by this Binding
Term Sheet and will co-operate with Amgen
in pursuing any appeal of any such order or
decision prohibiting, restraining or
enjoining said transactions.
Notwithstanding the foregoing, Amgen shall
have no obligation to resist any action by
the FTC, DoJ, State Attorney General or any
other person or any order of any court,
arbitrator or governmental body seeking to
prohibit, restrain or enjoin the
transactions contemplated hereby if, in
Amgen's sole business judgment, it would
not be in Amgen's best interest to do so.
33. TERMINATION OF THIS
BINDING TERM SHEET This Binding Term Sheet (i) will terminate
automatically in the event a final
unappealable order of any court, arbitrator
or government body shall have been issued
prohibiting, restraining or enjoining the
transactions contemplated by this Binding
Term Sheet and all appeals or rights of
appeal have been exhausted and (ii) may be
terminated by Amgen at any time if Amgen
shall have been informed that officials of
the FTC, DoJ or State Attorney General or
order of any court, arbitrator or
governmental have decided to seek to
prohibit, enjoin or restrain the
transactions contemplated hereby and Amgen
shall elect not to challenge or resist such
decision, finding or order.
Amgen shall be responsible for all HSR
filing fees.
In the event this Binding Term Sheet shall
be terminated as set forth above, Guilford
shall refund the Signing Fee to Amgen
within 10 days of such termination.
28
<PAGE> 29
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
34. CLOSING DATE The transactions contemplated by this
Binding Term Sheet which require HSR
approval will become effective on the date
which is 3 business days following either
the expiration or termination of the
waiting period under the HSR Act (including
any extensions thereof) or the final
decision of any court, arbitrator or
governmental body approving the
transactions contemplated hereby (the
"Closing Date").
35. DOCUMENTATION As soon as practicable after the Effective
Date, Amgen and Guilford will use good
faith best efforts to negotiate and execute
definitive agreements relating to the
transactions set forth herein by [ * ].
Although the parties intend to diligently
negotiate and promptly enter into
definitive agreements, the parties
acknowledge and agree that this Binding
Term Sheet contains all of the essential
terms of the transactions contemplated
hereby and, in the event the parties do not
enter into definitive agreements, this
Binding Term Sheet is a binding agreement
and shall form constitute the terms and
conditions governing the transactions
contemplated hereby.
If despite the parties' good faith best
efforts they are unable to negotiate and
execute definitive agreements related to
the transactions set forth in this Binding
Term Sheet, reference to this "Agreement"
contained herein shall be deemed to be
reference to this Binding Term Sheet.
36.COST AND EXPENSES Each party will bear its own legal costs
and expenses arising out of the
negotiation, execution and delivery of this
Binding Term Sheet and the agreements
contemplated hereby.
37.DISPUTE RESOLUTION Guilford and Amgen will deal with each
other in good faith and will attempt to
resolve any disputes between them in good
faith.
In the event the parties shall be unable to
resolve any dispute, the dispute shall be
submitted to the CEO's of Amgen and
Guilford for review and resolution no later
than 30 days following the request by
either party.
In the event the CEO's of Amgen and
Guilford shall be unable to resolve any
dispute between the parties within 60 days
of submission of the dispute to CEO's as
set forth
29
<PAGE> 30
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
above, the dispute shall be resolved by
binding arbitration in accordance with the
Commercial Rules of arbitration and
procedures established by the American
Arbitration Association. The arbitration
will be held in Denver, Colorado and the
substantive law governing the merits of the
dispute shall be those of the State of
Delaware.
38. MISCELLANEOUS All amounts payable and calculations
hereunder shall be in U.S. dollars, and
except for amounts payable for Common Stock
and Warrants of Guilford which shall be
paid to Guilford, all payments hereunder
shall be made to Holdings, a wholly-owned
subsidiary of Guilford. As applicable, Net
Sales and COGS shall be translated into
U.S. dollars at the rate of exchange at
which U.S. dollars are listed in
International Financial Statistics
(publisher, International Monetary Fund) or
if it is not available, The Wall Street
Journal for the currency of the country in
which the sale is made at the average of
the calendar quarter in which such sales
were made. Estimated royalty payments will
be paid quarterly within 60 days of the end
of each calendar quarter along with a
report containing setting forth Net Sales
on a country by country basis and the basis
for any royalty adjustments.
Amgen, its affiliates and sublicensees
shall maintain books and records as
necessary to allow the accurate calculation
of royalties due hereunder and COGS. Once
per year Guilford shall have the right to
engage an independent accounting firm
acceptable to Amgen, at Guilford's expense,
which shall have the right to examine in
confidence during normal business hours the
relevant Amgen records in order to
determine and/or verify the amount of
royalty payments due hereunder. The
Guilford independent auditor will prepare a
report confirming or challenging the
royalties paid by Amgen for any of the
preceding three (3) annual periods (except
any period which has previously been
subject to audit thereunder). In the event
there was an under-payment by Amgen
hereunder, Amgen shall promptly make
payment to Guilford of any short-fall. In
the event there was an over-payment by
Amgen hereunder, Amgen shall credit the
excess amount against future payments. In
the event any payment by Amgen shall prove
to have been incorrect by more than 7% to
Guilford's detriment, Amgen will pay the
fees and costs of the Guilford independent
auditor.
30
<PAGE> 31
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
DEFINITIONS
ACQUISITION shall mean the acquisition, directly or indirectly, by any third
party of 50% or more of the shares of common stock entitled to vote for the
election of directors.
ALZHEIMER'S DISEASE shall mean [*]
[ * ]
COMMERCIALLY REASONABLE EFFORTS shall mean efforts and resources [*]
COGS shall mean and include [*]
31
<PAGE> 32
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
DEFAULT shall mean with respect to a party that (i) any representation or
warranty of such party shall have been untrue in any material respect when made
or (ii) such party shall have failed to perform any material obligation set
forth herein within 60 days following written notice of such failure and demand
for performance from the other party.
[ * ]
[ * ] LICENSE AGREEMENTS shall mean the License Agreement between [ * ] and
Guilford dated [ * ], and the [ * ] License Agreement between [ * ] and
Guilford [ * ].
MULTIPLE SCLEROSIS shall mean [*]
NET SALES shall mean [*]
NEUROPATHY shall mean [*]
[ * ]
PARKINSON'S DISEASE shall mean [*]
PATENTED PRODUCT shall mean a Licensed Product the sale of which would infringe
one or more claims of a valid, issued patent included in the Collaboration
Technology in the
32
<PAGE> 33
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
country of sale.
PATENT RIGHT shall mean patent applications, patents issuing thereon and any
extensions or restorations by existing or future extension or restoration
mechanisms, including without limitation Supplementary Protection Certificates
or the equivalent thereof, renewals, continuations, continuations-in-part,
divisions, patents-of-addition, and/or reissues of any patent.
SIGNIFICANT MEDICAL MARKET shall mean with respect to a Licensed Product that
the product is expected to have greater than $100 MM (adjusted annually for the
Consumer Price Index from the Effective Date to the year of FDA approval) in
market potential in the United States.
STROKE shall mean either partial or total motor, sensory, or cognitive deficit
directly attributable to acute cerebral ischemia. Clinical trials for Stroke
will include patients with thrombo-occlusive or thrombo-embolic cerebrovascular
disease and would be designed to measure the effect of acute administration of
a drug on eventual functional outcome as measured by an accepted clinical
stroke scale.
TRAUMATIC BRAIN INJURY shall mean patients with closed head injuries of a
traumatic etiology including patients in coma or with significant neurologic
deficit (s). Clinical trials for Traumatic Brain Injury will be designed to
measure the effect of acute drug administration on acute and/or chronic
outcome.
TRAUMATIC SPINAL CORD INJURY shall mean patients with traumatic (not ischemic
or other etiologies) spinal cord injury including patients with partial to
total spinal cord lesions with the primary clinical deficit of motor weakness.
Clinical trials for Traumatic Spinal Cord Injury will be designed to measure
the effect of acute administration on acute and/or chronic outcome.
UNPATENTED PRODUCT shall mean a Licensed Product the sale of which would not
infringe one or more claims of a valid, issued patent included in the
Collaboration Technology in country of sale.
33
<PAGE> 34
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
EXHIBIT A
SUMMARY OF TERMS
PURCHASE BY AMGEN OF GUILFORD COMMON STOCK AND WARRANTS
COMMON STOCK Shares of Guilford's Common Stock, $.01 par
value (the "Common Stock").
WARRANTS Warrants to purchase 700,000 shares of
Common Stock (the "Warrants").
REPRESENTATIONS AND
WARRANTIES Representations and warranties customary
for the transactions contemplated herein
shall apply.
INDEMNIFICATION The parties shall, with respect to the
representations, warranties, covenants and
agreements made herein or in certificates
or other instruments delivered in
connection therewith, indemnify, defend and
hold the non-breaching party harmless
against all liability, together with all
reasonable costs and expenses related
thereto (including legal and accounting
fees and expenses), arising from the
untruth, inaccuracy or breach of any such
representations, warranties, covenants or
agreements of the breaching party.
WARRANTS EXERCISABILITY At any time and from time to time in
minimum increments of 100,000 shares.
WARRANTS TERM Five years from the Closing Date.
WARRANTS EXERCISE PRICE 150% of the price paid by Amgen for the
Common Stock.
ANTI-DILUTION PROVISIONS Customary dilution protection, including
(i) stock splits, stock dividends and other
similar transactions affecting the Common
Stock; (ii) dividends or distributions of
property and assets to the holders of
Common Stock; and (iii) certain mergers and
other extraordinary transactions.
34
<PAGE> 35
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
REGISTRABLE SECURITIES Common Stock acquired by Amgen in
connection with this Binding Term Sheet,
including shares acquired upon exercise of
Warrants, until such time as such stock has
been sold pursuant to an effective
registration statement or can be sold in a
transaction pursuant to Rule 144.
DEMAND REGISTRATION RIGHTS Amgen will be entitled to three demand
registrations during the five-year period
following the Closing Date. Guilford shall
not, however, be obligated to file a
registration statement (i) within a period
of six months after the effective date of
any other registration statement demanded
by Amgen hereunder, (ii) if Guilford elects
to defer such registration, for up to 90
days if the Board of Directors of Guilford
in good faith determines that such
registration would interfere with any
proposed offering of shares, pending
financing, acquisition, corporate
reorganization or other significant
transaction involving Guilford; provided
that Guilford shall only be able to defer
registration once per any twelve month
period, (iii) for a period beginning on the
effective date of any registration
statement and ending 90 days thereafter, or
(iv) the estimated aggregate proceeds of
such offering (less underwriting discounts
and commissions) will be less than $15 MM.
Amgen will have the right to select the
lead managing underwriter for any
underwritten public offering in connection
with Amgen's Demand Registration, with the
consent of Guilford, which consent shall
not be unreasonably withheld.
PIGGYBACK REGISTRATION
RIGHTS Amgen will have unlimited piggyback
registration rights with respect to
Registrable Securities.
PRIORITY ON REGISTRATION Subject to the existing registration rights
of other holders set forth in any of the
35
<PAGE> 36
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
agreements listed on Schedule Two attached
hereto, Amgen will have priority in any
demand registration initiated by it;
provided, however, that if any of Amgen's
Registrable Securities are excluded from a
Demand Registration due to such existing
rights of other holders, such registration
shall not count as a demand registration.
Subject to the existing rights of other
holders set forth on Schedule Two attached
hereto, in any piggyback registration
involving a firm underwriting, Amgen will
be subject to customary underwriter
"cut-backs," pro rata based on the number
of shares registered by all stockholders
participating in the underwritten offering;
provided, however, that the underwriter may
not limit the Registrable Securities to be
registered by Amgen to less than 25% of the
securities included therein. Guilford shall
not grant any registration rights
inconsistent with the foregoing.
SECURITIES LAW
INDEMNIFICATION Guilford shall indemnify Amgen and the
underwriters for liabilities arising out of
actual or alleged material misstatements or
omissions in a registration statement that
were not furnished by Amgen or
underwriters.
HOLDBACK AGREEMENT Amgen, if requested by Guilford, will not
effect a public sale or distribution of
Common Stock during the 90 day period
following the effective date of a
registration statement of Guilford relating
to an underwritten public offering of
Common Stock (other than those which may be
sold by Amgen in connection with a
Piggyback Registration) if the underwriter
determines its public sale or distribution
would have a material adverse effect on
such offering.
In the event of a Demand Registration,
Guilford, if requested by Amgen, (i) shall
not, and shall cause its executive officers
36
<PAGE> 37
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
and directors to not, effect a public sale
or distribution of the Common Stock during
the 90 day period following the effective
date of a registration statement relating
to an underwritten public offering of
Registrable Securities if the underwriter
determines its public sale or distribution
would have a material adverse effect on
such offering, and (ii) shall cause each
holder of its privately placed equity
securities issued by Guilford in connection
with a financing transaction involving at
least 5% of Guilford's then outstanding
equity securities at any time after the
Closing Date (provided that in any event,
(ii) above shall not apply in the event of
issuances of securities in connection with
corporate partnering transactions, or
off-balance sheet financing transactions to
fund early stage research), and shall use
its reasonable best efforts to cause each
other stockholder of Guilford owning at
least 10% of Guilford's then outstanding
equity securities (other than any Schedule
13G filer) to agree, not to effect a public
sale or distribution of the Common Stock
during the 90 day period following the
effective date of a registration statement
relating to an underwritten public offering
of the Common Stock if the underwriter
determines its public sale or distribution
would have a material adverse effect on
such offering.
REGISTRATION EXPENSES Amgen will be required to pay all
underwriting discounts, commissions or
fees, transfer taxes and its out-of-pocket
costs and expenses, including its legal
counsel's fees and expenses, relating to
the offering of its shares of Common Stock.
Guilford will pay all other registration
expenses in connection with any demand or
piggyback registration.
TRANSFERABILITY Amgen may transfer all or a portion of the
registration rights granted hereunder in
connection with any sale of Registrable
37
<PAGE> 38
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
Securities covering a minimum of the
greater of 25% of the Registrable
Securities or 200,000 shares of Common
Stock.
STANDSTILL For a period of 10 years from the Closing
Date, Amgen will not, without the written
consent of Guilford, directly or indirectly
acquire more than 10% of Guilford's then
outstanding capital stock, except in the
event that any person or Group (within the
meaning of the Exchange Act) directly or
indirectly acquires more than 10% of
Guilford's then outstanding capital stock,
Amgen may acquire up to such percentage (so
long as Amgen is not and does not become a
member of such Group). In the event that
any person or Group directly or indirectly
makes a tender offer or exchange offer for
Guilford's capital stock, Amgen shall be
relieved of its obligations hereunder;
provided, however, that Amgen shall not be
so relieved if Amgen solicits, encourages
or participates in such tender offer or
exchange offer. Nothing herein shall
prohibit Amgen form making any proposal to
Guilford's Board of Directors.
38
<PAGE> 39
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
EXHIBIT B
[ * ]
39
<PAGE> 40
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
EXHIBIT C
PRESS RELEASE
[Set forth as the first three pages of Exhibit 99.1 to the Current Report on
Form 8-K, filed September 4, 1997]
40
<PAGE> 41
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
EXHIBIT D
[ * ]
41
<PAGE> 42
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
SCHEDULE A-1
[ * ]
42
<PAGE> 43
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
SCHEDULE ONE
[ * ]
43
<PAGE> 44
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
SCHEDULE TWO
OUTSTANDING REGISTRATION RIGHTS
Guilford has granted registration rights to certain holders of Guilford
securities under the following agreements:
- -Series A Preferred Stock Purchase Agreement, dated September 30, 1993, among
Guilford and other signatories thereto, as amended.
- -Underwriter's Warrant, dated June 26, 1994.
- -Exchange and Registration Rights Agreement, dated February 17, 1995, between
Guilford and the Abell Foundation, Inc.
44
<PAGE> 45
* Confidential Portions Omitted and Supplied Separately to the Securities and
Exchange Commission.
EXHIBIT E
[ * ]
45
<PAGE> 1
Exhibit 99.1
FOR IMMEDIATE RELEASE
CONTACTS:
Amgen Guilford Pharmaceuticals
Denise Powell (investor) Angela Webber
(805) 447-4346 (410) 631-6449
David Kaye (media) Brad Miles (media)
(805) 447-6692 Jonathan Fassberg (investor)
BMC/The Trout Group
(212)-477-9007
AMGEN ACQUIRES RIGHTS FROM GUILFORD PHARMACEUTICALS FOR BREAKTHROUGH
NEUROTROPHIC AGENTS
BALTIMORE, MD and THOUSAND OAKS, CA, August 21, 1997 -- Guilford
Pharmaceuticals Inc. (NASDAQ:GLFD) and Amgen (NASDAQ:AMGN) today announced that
they have entered into an agreement granting Amgen worldwide rights for
Guilford's FKBP-neuroimmunophilin ligands, a novel class of small molecule
neurotrophic agents that may represent a new approach in the treatment of
neurodegenerative disorders.
Neuroimmunophilin ligands are a novel class of small molecule orally active
neurotrophic agents, which are being developed to promote nerve regeneration
and repair in neurodegenerative disorders.
Under the terms of the agreement, Amgen will receive worldwide rights to
FKBP-neuroimmunophilin compounds for all human therapeutic and diagnostic
applications. Amgen will conduct and pay for all clinical development and
manufacturing of products, and will market products worldwide.
Under the terms of the agreement, Amgen will pay Guilford in several phases.
Guilford will receive a total of $35 million in rights payments upon closing,
in the form of a $15 million cash signing payment, $15 million for purchase of
Guilford equity, plus a $5 million purchase of 700,000 warrants exercisable at
150% of the purchase price.
<PAGE> 2
- more -
Amgen Acquires Neuroimmunophilin Neurotrophic Agents from Guilford
Pharmaceuticals
August 21, 1997
Page 2
Amgen will also provide $13.5 million over three years to support research
activities at Guilford on the neuroimmunophilin program. The agreement
contemplates milestone payments for up to in ten specified indications, seven
neurological (Parkinson's Disease; Alzheimer's Disease; Stroke; Peripheral
Neuropathies; Traumatic Brain Injuries; Traumatic Spinal Cord Injuries; and
Multiple Sclerosis), and three non-neurological indications. Guilford would
receive development milestone payments for each indication and could receive up
to $392 million in milestone payments if all ten indications are successfully
developed to approval.
Guilford will also receive royalties on product sales. Guilford also has the
option in the future to conduct Phase I and Phase II clinical development of
one product in one indication, and to co-promote one product in the U.S., for
which certain costs would be paid by Amgen. If Amgen elects to exercise its
warrants this would represent an additional equity investment of approximately
$25 million in Guilford.
"We are extremely pleased and enthusiastic to collaborate with Guilford on the
development and commercialization of this important class of potential
neurological medicines," Said Gordon Binder, Amgen's Chairman and Chief
Executive Officer. "The science supporting Guilford's work holds the promise of
yielding breakthrough treatments for a variety of neurological disorders and
complements Amgen's expertise and commitment to neuroscience and small molecule
drug research and development programs," he said.
"This is another major milestone for Guilford. Amgen is a leader in the
development of innovative therapies for neurological disorders. We believe that
our neuroimmunophilin ligands could potentially be one of the most important
new developments in the treatment of neurodegenerative disorders in many years.
If we are able to substantially slow the rate of or reverse the progression of
neurodegenerative disorders in patients, this would represent a major
breakthrough in the treatment of these serious diseases", commented Dr. Craig
R. Smith, President and Chief Executive Officer of Guilford.
"We received a great deal of interest from many companies for our
neuroimmunophilin program. We chose Amgen because we were impressed with their
commitment to the area, and their demonstrated capability in pre-clinical and
clinical development. We appreciate being able to work with such an outstanding
partner in the development of innovative neurological products", continued Dr.
Smith.
Amgen is a global biotechnology company that discovers, develops, manufactures
and markets human therapeutics based on advances in cellular and molecular
biology.
<PAGE> 3
- more -
Amgen Acquires Neuroimmunophilin Neurotrophic Agents from Guilford
Pharmaceuticals
August 21, 1997
Page 3
Guilford Pharmaceuticals Inc. is a biopharmaceutical company engaged in the
development of polymer-based therapeutics for cancer, and novel products for
the diagnosis and treatment of neurological diseases, including Parkinson's
disease, Alzheimer's disease, stroke, severe head trauma, spinal cord injuries,
multiple sclerosis, peripheral neuropathies, and cocaine addiction.
###
This press release contains forward-looking statements that involve risk and
uncertainties, including those described in the section entitled "Risk Factors"
from Guilford Pharmaceuticals registration statement on Form S-3, declared
effective April 7, 1997, that could cause the Company's actual results and
experience to differ materially from anticipated results and expectations
expressed in these forward-looking statements. Among other things, there can be
no assurance that any of the compounds which are the subject of this
collaboration will earn milestone payments or that such compounds can be
successfully developed into safe and effective FDA-approved drugs, and
consummation of this transaction is subject to compliance with
Hart-Scott-Rodino requirements.
<PAGE> 4
Background Information - Neuroimmunophilin Ligands
August 21, 1997
Guilford Pharmaceuticals, Inc. discovered a novel class of compounds, the
neuroimmunophilin ligands, that may be capable of regenerating nerves damaged
by injury and neurodegenerative diseases such as Alzheimer's Disease and
Parkinson's Disease. These neuroimmunophilin ligands consist of small organic
molecules which have activity that is comparable or superior to NGF, BDNF, and
other protein neurotrophic factors, but are active following oral
administration.
Neuroimmunophilin ligands appear to have several advantages over previous
nerve-regeneration compounds. NGF, BDNF and other neurotrophic factors are
proteins, very large molecules that cannot pass into the brain. They cannot be
taken orally as a pill, and therefore must be administered by injection
directly into the brain. Guilford's small molecule neuroimmunophilin ligands
can be administered orally and are capable of going from the bloodstream into
the brain. Their mechanism of action appears to specifically target damaged
nerve cells while leaving healthy cells alone, making it likely that these new
compounds should have fewer side effects than earlier generations of drugs.
Immunosuppressive drugs such as cyclosporin A and FK-506 are known to bind to
intracellular proteins called immunophilins. Starting in 1990, scientists at
Guilford and Johns Hopkins University, under Dr. Solomon Snyder, Director of
the Department of Neuroscience, made the seminal discovery that immunophilin
binding proteins are enriched at up to 50-fold higher concentrations in the
brain than in immune tissue. In addition, it was discovered that drugs that
bind to immunophilin binding proteins, such as FK-506 and cyclosporin A, widely
used immune suppressive drugs used by organ transplant recipients, can produce
nerve growth in vitro (in test tube experiments) and in vivo (in animal
experiments) (i.e. they are neurotrophic). Guilford scientists, utilizing
state-of-the-art structure-based drug design techniques, synthesized a series
of novel small molecule neuroimmunophilin ligands which possess the
neurotrophic activity of FK-506, but are devoid of the undesired
immunosuppressive activity of FK-506.
Parkinson' s Disease Experimental Models
Some of Guilford's work in this area was published earlier this year
(Proceedings of the National Academy of Sciences, Volume 94 pp. 2019-2024,
March 1997; Nature
<PAGE> 5
- more -
Background Information - Neuroimmunophilin Ligands
Page 2
Medicine, Volume 3, Number 4 pp. 421-428, April 1997), presentations at the
American Academy of Neurology and American Chemical Society meetings in April
1997, and other scientific abstract presentations in 1995. These studies showed
that one of Guilford' s novel compounds, GPI-1046, promoted both morphologic
and functional recovery in animal models of both peripheral nerve injury and
Parkinson' s disease. The studies showed that in a mouse model of Parkinson's
disease, GPI-1046 showed potent neuroprotective and regenerative effects on the
nigral-striatal dopamine system, an area of the brain damaged in Parkinson's
disease.
In these studies, the neurotoxin MPTP was administered to severely damage
nigral-striatal dopamine neurons and mimic the damage caused by Parkinson's
disease, simultaneously with GPI-1046. Compared with the MPTP/control group,
GPI-1046 protected more than 80% of the nigral-striatal dopamine neurons.
The studies went one step further in an attempt to more accurately model human
Parkinson's disease by administering GPI-1046 after damage of the
nigral-striatal dopamine neurons had taken place. This "modeling" was
accomplished by administering two different neurotoxins, either MPTP or
6-hydroxydopamine. In these experiments, GPI-1046 was administered up to one
month after striatal dopamine neurons were destroyed by the neurotoxin.
GPI-1046 significantly increased the number of functional dopamine terminals in
the striatum at doses a low as 4 mg/kg. Administration of GPI-1046 was also
shown to significantly improve both neuronal dopamine levels and turnover,
indicating physiological recovery. Furthermore, administration of GPI-1046 was
also shown to significantly improve functional behavior in the rats, as
measured by apomorphine or amphetamine induced rotational behavior.
Guilford has conducted studies which have looked at other neurological models
in addition to Parkinson's Disease, and found protective and regenerative
effects using GPI-1046. In animals whose sciatic nerves were crushed, GPI-1046
accelerated functional recovery of the damaged nerves. The compound was able to
regenerate the myelin sheath over the nerves, a characteristic critical to
nerve re-growth, and functional recovery.
Potent Neurotrophic Effects
Very low doses of these neuroimmunophilin ligands have been shown to markedly
stimulate nerve growth, repair, and re-myelination in a wide variety of cell
<PAGE> 6
- more -
Background Information - Neuroimmunophilin Ligands
Page 3
culture and animal models. The compounds have been shown to be both orally and
systemically active and to cross the blood brain barrier. Guilford has made
major breakthroughs in chemistry, and has successfully synthesized small
molecule neurotrophic factors with low picomolar or even femtomolar potency
(GPI-1046 in vitro ED50=53 pM; GPI-1216 in vitro ED50 = 0.25 pM).
Potential Clinical and Commercial Applications
The neuroimmunophilin program is conducting research to explore the potential
utility of these compounds in a number of potential applications of serious and
life-threatening neurodegenerative disorders:
Alzheimer's Disease
Parkinson's Disease
Multiple sclerosis
Peripheral neuropathies - i.e. diabetic neuropathy; cancer chemotherapy
induced neuropathy, hereditary sensory and motor neuropathies; motor
neuron disorders such as ALS Traumatic head injuries
Traumatic spinal cord injuries
Stroke - aiding recovery following stroke or other cerebral ischemic
events.
There are also several non-neurological potential applications which are being
studied with the neuroimmunophilin ligands.
Guilford has filed over 20 composition of matter and use patents covering
five distinct chemical structural series of novel neuroimmunophilin compounds.
One patent has been issued in the U.S., and several others published in Europe.
Several extremely potent series of compounds have been identified, including
GPI-1234, GPI-1305, GPI-1308, GPI-1312, GPI-1216, GPI-1152, and GPI-1046, which
are under pre-clinical development.
<PAGE> 7
Background Information - Neuroimmunophilin Ligands
Page 4
Contacts:
Amgen Guilford
Denise Powell (investor/media) Angela Webber
(805) 447-4346 (410) 631-6449
Jeanne Flynn, Pharm. D. (patients) Brad Miles (media)
(805) 447-3390 Jonathan Fassberg (investor)
BMC/The Trout Group
(212) 477-9007
