<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
Form 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ______________ TO ______________
COMMISSION FILE NUMBER 0-21643
___________
CV THERAPEUTICS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 43-1570294
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3172 PORTER DRIVE, PALO ALTO, CALIFORNIA 94304
(Address of principal executive offices, including zip code)
(415) 812-0585
(Registrant's telephone number, including area code)
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 and 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 April 30, 1997
----- -----------------------------
Common Stock $.001 par value 6,908,047
<PAGE>
<TABLE>
Page Number
<S> <C>
Part I Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Operations 4
Condensed Consolidated Statements of Cashflow 5
Notes to the Condensed Consolidated 6
Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and 7
Results of Operations
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K 10
Part III Signatures
</TABLE>
<PAGE>
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CV THERAPEUTICS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
---- ----
(UNAUDITED) (1)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . $17,285 $19,575
Short-term investments. . . . . . . . . . . . . . . . . . . . . . . . . 14,073 1,993
Other current assets. . . . . . . . . . . . . . . . . . . . . . . . . . 571 454
------- -------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . 31,929 22,022
Long-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . 3,031 -
Notes receivable from officers and employees. . . . . . . . . . . . . . . 475 475
Property and equipment, net . . . . . . . . . . . . . . . . . . . . . . . 2,878 3,072
Intangible and other assets . . . . . . . . . . . . . . . . . . . . . . . 521 570
------- -------
$38,834 $26,139
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . . . $171 $405
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 1,165 1,304
Current portion of long-term debt . . . . . . . . . . . . . . . . . . . - 15
Current portion of capital lease obligation . . . . . . . . . . . . . . 647 20
Deferred revenue, short-term portion. . . . . . . . . . . . . . . . . . 2,000 -
------- -------
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . 3,983 1,744
Long-term portion of capital lease obligation . . . . . . . . . . . . . . 1,069 -
Long-term portion of long-term debt . . . . . . . . . . . . . . . . . . . 6,000 5,000
Accrued rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 627 719
Deferred revenue, long-term portion . . . . . . . . . . . . . . . . . . . 5,000 -
Commitments
Stockholders' equity:
Common stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,595 65,414
Warrants to purchase common stock . . . . . . . . . . . . . . . . . . . 1,225 1,225
Notes receivable issued for stock . . . . . . . . . . . . . . . . . . . (171) (171)
Deferred compensation . . . . . . . . . . . . . . . . . . . . . . . . . (2,021) (2,166)
Deficit accumulated during the development stage. . . . . . . . . . . . (47,511) (45,626)
------- -------
Total stockholders' equity. . . . . . . . . . . . . . . . . . . . . . . . 22,117 18,676
------- -------
$38,834 $26,139
------- -------
------- -------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
(1) THE BALANCE SHEET AT DECEMBER 31, 1996 HAS BEEN DERIVED FROM AUDITED
FINANCIAL STATEMENTS AT THAT DATE, BUT DOES NOT INCLUDE ALL OF THE
INFORMATION AND FOOTNOTES REQUIRED BY GENERALLY ACCEPTED FINANCIAL
PRINCIPLES FOR COMPLETE FINANCIAL STATEMENTS.
<PAGE>
CV THERAPEUTICS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
INCEPTION
THREE MONTHS ENDED MARCH 31, (DECEMBER 11,
---------------------------- 1990) TO
1997 1996 MARCH 31, 1997
---- ---- --------------
<S> <C> <C> <C>
Contract revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . $820 $_ $1,070
Operating expenses:
Research and development. . . . . . . . . . . . . . . . . . . . . . . . 1,790 2,524 36,508
General and administrative. . . . . . . . . . . . . . . . . . . . . . . 1,021 691 11,518
------- ------- --------
Total operating expenses. . . . . . . . . . . . . . . . . . . . . . . . . 2,811 3,215 48,026
------- ------- --------
Loss from operations. . . . . . . . . . . . . . . . . . . . . . . . . . . (1,991) (3,215) (46,956)
Net interest and other expense. . . . . . . . . . . . . . . . . . . . . . 106 (164) (532)
------- ------- --------
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,885) $(3,379) $(47,488)
------- ------- --------
------- ------- --------
Net loss per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . $(0.30)
-------
-------
Shares used in computing net loss per share . . . . . . . . . . . . . . . 6,346
-------
-------
Pro forma net loss per share. . . . . . . . . . . . . . . . . . . . . . . $(0.80)
-------
-------
Shares used in computing pro forma net loss per share . . . . . . . . . . 4,248
-------
-------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
<PAGE>
CV THERAPEUTICS, INC.
(A DEVELOPMENT STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED INCEPTION
----------------------- (DECEMBER 11, 1990)
MARCH 31, MARCH 31, TO
1997 1996 MARCH 31, 1997
--------- -------- -------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,885) $(3,379) $(47,488)
Adjustments to reconcile net loss to net cash
used in operating activities:
Amortization of deferred compensation . . . . . . . . . . . . . . . . . 145 - 301
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . 269 278 3,378
Write off of warrant issued under capital lease . . . . . . . . . . . - - 160
Forgiveness of notes receivable . . . . . . . . . . . . . . . . . . . - - 200
Issuance of stock warrant for legal services received . . . . . . . . - - 49
Issuance of preferred stock and warrant for
payment of license fee. . . . . . . . . . . . . . . . . . . . . . . - - 750
Change in assets and liabilities:
Other current assets. . . . . . . . . . . . . . . . . . . . . . . . (112) 41 223
Intangible and other assets . . . . . . . . . . . . . . . . . . . . - - (1,434)
Accounts payable. . . . . . . . . . . . . . . . . . . . . . . . . . (234) 236 171
Accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . (185) (289) 1,119
Accrued rent. . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) - 711
Deferred revenue. . . . . . . . . . . . . . . . . . . . . . . . . . 7,000 - 7,000
------- ------- --------
Net cash provided by (used in) operating activities . . . . . . . . . . . 4,990 (3,113) (34,860)
------- ------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of short-term investments. . . . . . . . . . . . . . . . . . . . (14,073) - (69,168)
Purchase of long-term investments . . . . . . . . . . . . . . . . . . . . (3,031) - (3,031)
Maturity of short-term investments. . . . . . . . . . . . . . . . . . . . 1,993 - 55,095
Capital expenditures. . . . . . . . . . . . . . . . . . . . . . . . . . . (31) 9 (5,381)
Notes receivable from officers and employees. . . . . . . . . . . . . . . - - (721)
------- ------- --------
Net cash provided by (used in) investing activities . . . . . . . . . . . (15,142) 9 (23,206)
------- ------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Payments on capital lease obligation. . . . . . . . . . . . . . . . . . . (304) (347) (1,040)
Borrowings under long-term debt . . . . . . . . . . . . . . . . . . . . . 3,000 - 16,219
Repayments of long-term debt. . . . . . . . . . . . . . . . . . . . . . . (15) (539) (8,218)
Proceeds from issuances of common stock
(and bridge loans subsequently converted into
common stock), net of repurchases . . . . . . . . . . . . . . . . . . . 5,181 4 17,675
Proceeds from issuance of warrant . . . . . . . . . . . . . . . . . . . . - - 1,359
Proceeds from bridge loans. . . . . . . . . . . . . . . . . . . . . . . . - - 1,198
Proceeds from issuance of convertible preferred stock . . . . . . . . . . - 6,889 48,182
Payments to stockholders to repurchase the
Company's common stock. . . . . . . . . . . . . . . . . . . . . . . . . - - (24)
------- ------- --------
Net cash provided by financing activities . . . . . . . . . . . . . . . . 7,862 6,007 75,351
------- ------- --------
Net (decrease) increase in cash and cash equivalents. . . . . . . . . . . (2,290) 2,903 17,285
------- ------- --------
Cash and cash equivalents at beginning of period. . . . . . . . . . . . . 19,575 5,569 -
Cash and cash equivalents at end of period. . . . . . . . . . . . . . . . $17,285 $8,472 $17,285
------- ------- --------
------- ------- --------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS.
<PAGE>
CV THERAPEUTICS, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements of CV
Therapeutics, Inc. have been prepared in accordance with generally accepted
accounting principles, are unaudited, except as specifically noted, and
reflect all adjustments (consisting solely of normal recurring adjustments)
which are, in the opinion of management, necessary to present fairly the
financial position and results of operations for the interim periods
presented. The results of operations for the three month period ended March
31, 1997 are not necessarily indicative of the results to be expected for the
full year. The financial information included herein should be read in
conjunction with the Company's financial report on Form 10-K/A for 1996 which
includes the audited consolidated financial statements and the notes thereto
for the year ended December 31, 1996.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary, CV Therapeutics International, which was
incorporated in December 1993 in the Cayman Islands. All significant
intercompany balances have been eliminated.
REVENUE RECOGNITION
Contract revenues related to research agreements with noncancelable,
nonrefundable terms and no significant future obligations are recognized upon
execution of the agreements. Milestone payments will be recognized pursuant to
collaborative agreements upon the achievement of specified milestones.
NET LOSS PER SHARE
Except as noted below, net loss per share is computed using the weighted
average number of common shares outstanding. Common equivalent shares are
excluded from the computation as their effect is antidilutive, except that,
pursuant to the Securities and Exchange Commission ("SEC") Staff Accounting
Bulletins, common and common equivalent shares issued during the 12-month period
prior to the initial filing of the Company's Registration Statement on Form S-1
at prices below the assumed public offering price have been included in the
calculation as if they were outstanding for all periods presented through
September 30, 1996 (using the treasury stock method for stock options).
Net loss per share information is as follows:
THREE MONTHS ENDED
MARCH 31,
1996
----------------------
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
Net loss per share. . . . . . . . . . . . . . . . $(2.02)
Shares used in computing net loss per share . . . 1,675
Pro forma per share data is provided to show the calculation on a
consistent basis for the periods presented. It has been computed as described
above, and also gives retroactive effect from the date of issuance to the
conversion of preferred stock which automatically converted to common stock upon
the closing of the Company's initial public offering.
IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be adopted on
December 31, 1997. At that time, the Company will be required to change the
method currently used to compute loss per share and to restate all prior
periods. The impact is expected to result in no change to loss per share for
the quarters ended March 31, 1997 and March 31, 1996.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This Management's Discussion and Analysis of Financial Condition and
Results of Operations and other parts of this report contain forward-looking
statements which involve risks and uncertainties. The Company's actual results
may differ materially from the results discussed in the forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, those listed below and those listed in "Risk Factors" in the
Company's Annual Report on Form 10-K/A for the year ended December 31, 1996.
OVERVIEW
CVT is a development stage biopharmaceutical company focused exclusively on
the application of molecular cardiology to the discovery, development and
commercialization of novel small molecule drugs for the treatment of chronic
cardiovascular disease. Since its inception in December 1990, substantially all
of the Company's resources have been dedicated to research and development. To
date, CVT has not generated any product revenue and does not expect to generate
any such revenues for at least several years. As of March 31, 1997, the Company
had an accumulated deficit of approximately $47.5 million. The Company expects
its sources of revenue, if any, for the next several years to consist of
payments under existing and future corporate partnerships. The process of
developing the Company's products will require significant additional research
and development, preclinical testing and clinical trials, as well as regulatory
approval. These activities, together with the Company's general and
administrative expenses, are expected to result in operating losses for the
foreseeable future. The Company will not receive product revenue unless it or
its collaborative partners complete clinical trials and successfully
commercialize one or more of its products.
CVT is subject to risks common to biopharmaceutical companies, including
risks inherent in its research and development efforts and clinical trials,
reliance on collaborative partners, enforcement of patent and proprietary
rights, the need for future capital, potential competition and uncertainty of
regulatory approval. In order for a product to be commercialized, it will be
necessary for CVT and its collaborators to conduct preclinical tests and
clinical trials, demonstrate efficacy and safety of the Company's product
candidates, obtain regulatory clearances and enter into manufacturing,
distribution and marketing arrangements, as well as obtain market acceptance.
There can be no assurance that the Company will generate revenues or achieve and
sustain profitability in the future.
RESULTS OF OPERATIONS
QUARTER ENDED MARCH 31, 1997 AND 1996
REVENUES. The Company recognized revenues of $820,000 for the quarter ended
March 31, 1997, in association with the payment of a non-refundable, up-front
fee pursuant to research collaboration and license agreements with Biogen, Inc.
("Biogen") and its wholly-owned subsidiary, Biotech Manufacturing Limited
("Biotech Manufacturing" and together with Biogen the "Biogen Entities").
RESEARCH AND DEVELOPMENT EXPENSES. The Company's research and development
expenses decreased to $1.8 million for the quarter ended March 31, 1997,
compared to $2.5 million for the quarter ended March 31, 1996. The lower
expenses in 1997 were largely due to a $750,000 license payment to a
collaborative partner that occurred in 1996 and did not occur again in 1997.
Under a current license agreement, the Company may be obligated to make
milestone payments totaling $3.0 million to Syntex (USA), Inc. in 1997 unless
the Company elects to terminate the agreement. In addition, the Company
expects research and development expenses to increase significantly over the
next several years as the Company expands research and product development
efforts.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative expenses
increased to $1.0 million for the quarter ended March 31, 1997, compared to
$691,000 for the quarter ended March 31, 1996, due to increased legal fees
associated with the negotiation of the agreements with the Biogen Entities and
increased outside services associated with becoming a public company. The
Company expects general and administrative expense to increase in the future due
to an increase in the level of the Company's activities and additional expenses
associated with being a public company.
INTEREST INCOME (EXPENSE) NET. Interest income (expense), net increased to
$106,000 for the quarter ended March 31, 1997, compared to $(164,000) for the
<PAGE>
quarter ended March 31, 1996, as a result of higher average investment
balances from the proceeds of the Company's initial public offering and
payments received in connection with the Company's collaboration and license
agreements with the Biogen Entities. The Company expects that interest income
(expense), net will decrease as investment balances decrease due to the
consumption of cash in operations.
The Company records and amortizes over the related vesting periods deferred
compensation representing the difference between the exercise price of options
granted and the deemed fair value of its common stock at the time of grant.
Options generally vest over four years. Deferred compensation of approximately
$2.3 million has been recorded and is being amortized to both research and
development expenses as well as general and administrative expenses over the
related vesting periods (generally four years) of the options granted.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations since inception primarily through
private placements of preferred equity securities, equipment and leasehold
improvement financing, other debt financings and payments under corporate
collaborations. In November 1996, the Company completed an initial public
offering and raised net proceeds of approximately $13.0 million. On March 7,
1997, the Company entered into two research collaboration and license agreements
with the Biogen Entities which together resulted in an upfront payment of $16.0
million, including $5.0 million in cash, a $7.0 million equity investment
consisting of the purchase of 669,857 shares of the Company's Common Stock at
$10.45 per share, and advanced funding of a milestone payment and funding under
a credit facility totaling $4.0 million. In addition, CVT may receive
development milestones, equity investments, funding under a general purpose loan
facility and royalties from any future product sales. As of March 31, 1997, the
Company had received approximately $68.6 million in net proceeds from the sale
of equity securities, and approximately $16.9 million, before repayment, from
loans and equipment and leasehold financings.
Cash, cash equivalents and short- and long-term investments at March 31,
1997 totaled $34.4 million compared to $21.6 million at December 31, 1996. The
increase in 1997 was due to the receipt of the upfront payment of $16.0 million
associated with the Company's collaborations with the Biogen Entities. The
Company's funds are currently invested in short- and medium-term, investment
grade, interest-bearing debt obligations.
Net cash provided by operating activities for the quarter ended March
31, 1997 was $5.0 million, compared to $(3.1) million for the quarter ended
March 31, 1996. The increase in cash provided by operating activities was the
result of deferred revenue of $7 million recorded in conjunction with the
upfront payment under the collaboration with the Biogen Entities.
Through March 31, 1997, the Company had invested approximately $6.1 million
in property and equipment, of which approximately $4.4 million was financed
through equipment and leasehold financings.
The Company will require substantial additional funding in order to
complete its research and development activities and commercialize any
potential products. The Company currently estimates that its existing
resources, including payments already received from the Biogen Entities and
projected interest income, will enable the Company to maintain its current
and planned operations through 1998. However, there can be no assurance that
the Company will not require additional funding prior to such time. The
Company's forecast of the period of time through which its financial
resources will be adequate to support its operations is a forward-looking
statement that involves risks and uncertainties, and actual results could
vary as a result of a number of factors. The Company's future capital
requirements will depend on many factors, including scientific progress in
its research and development programs, the size and complexity of such
programs, the scope and results of preclinical studies and clinical trials,
the ability of the Company to establish and maintain corporate partnerships,
the time and costs involved in obtaining regulatory approvals, the costs
involved in filing, prosecuting and enforcing patent claims, competing
technological and market developments, the cost of manufacturing preclinical
and clinical material and other factors not within the Company's control.
There can be no assurance that such additional financing to meet the
Company's capital requirements will be available on acceptable terms or at
all. Insufficient funds may require the Company to delay, scale back or
eliminate some or all of its research or development programs, to lose rights
under existing licenses or to relinquish greater or all rights to product
candidates at an earlier stage of development or on less favorable terms than
the Company would otherwise choose or may adversely affect the Company's
ability to operate as a going concern. If additional funds are raised by
issuing equity securities, substantial dilution to existing stockholders may
result.
<PAGE>
ADDITIONAL FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company's business, financial condition and results of operations
are subject to various risks, including those described below and elsewhere
in this Report.
The Company is an early stage company and must be evaluated in light of
the uncertainties and complications present in an early stage
biopharmaceutical company. All of the Company products are at an early stage
of development, and the Company has not generated any product revenue. In
addition, the Company has only two products in clinical development, CVT-124
and Ranolazine. There can be no assurance that clinical trials conducted by
the Company will demonstrate sufficient safety and efficacy to obtain the
requisite approvals or that marketable products will result. In addition, the
rate of completion of clinical trials may be delayed by many factors. The
Company's product candidates will require significant additional development,
preclinical studies, clinical trials and regulatory approval prior to
commercialization. These activities may take several years and require the
expenditure of substantial resources. In addition, these activities, together
with the Company's general and administrative expenses, are expected to
result in operating losses for the foreseeable future.
The Company's strategy for the research, development and
commercialization of its product candidates has required, and will continue
to require, the Company to enter into various arrangements with corporate and
academic collaborators, licensors, licensees and others, and the Company is
dependent upon the success of these parties in performing their
responsibilities. There can be no assurance that the Company will be able to
enter into additional collaborative arrangements or license agreements on
acceptable terms, or at all, or that the contemplated benefits from any of
these agreements will be realized.
The Company's business is affected by other factors, including:
uncertainty of market acceptance, intense competition and rapid technological
change, uncertainty of patent position and proprietary rights, dependence on
key personnel and the need to attract and retain key employees and
consultants, limited manufacturing, marketing and sales experience,
significant government regulation, uncertainty of product pricing and
reimbursement, and product liability exposure and the availability of
insurance.
<PAGE>
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.39* Research Collaboration and License Agreement (U.S.) between
the Registrant and Biogen, Inc., dated March 7, 1997.
10.40* Research Collaboration and License Agreement (Europe) between
the Registrant and Biotech Manufacturing Ltd., dated March 7, 1997.
10.41* Common Stock Purchase Agreement between the Registrant and
Biotech Manufacturing Ltd., dated March 7, 1997.
10.42* Loan Agreement between the Registrant and Biotech Manufacturing
Ltd., dated March 7, 1997.
11.1 Computation of Net Loss per Share.
27.1 Supplemental Financial Data.
(b) No reports on Form 8-K were filed during the quarter ended March 31,
1997.
- --------------------
* Confidential treatment is being sought for portions of this exhibit.
Brackets indicate portions of text that have been omitted. A separate filing
of such omitted text has been made with the Commission as part of the
Company's application for confidential treatment.
<PAGE>
C.V. Therapeutics, Inc.
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.
C.V. Therapeutics, Inc.
Date: May 15, 1997
By: /s/ Louis G. Lange, M.D., Ph.D.
--------------------------------------
Louis G. Lange, M.D., Ph.D.
Chairman of the Board & Chief
Executive Officer
(Principal Executive Officer)
By: /s/ Kathleen A. Stafford
--------------------------------------
Kathleen A. Stafford
Chief Financial Officer
(Principal Financial and Accounting
Officer)
<PAGE>
Exhibit 10.39
Confidential treatment has been requested for portions of this document.
Brackets indicate portions of text that have been omitted. A separate filing
of such omitted text has been made with the Commission as part of the
Company's application for confidential treatment.
RESEARCH COLLABORATION AND LICENSE AGREEMENT (U.S.)
This Agreement is made and entered into this 7th day of March, 1997 by and
between BIOGEN, INC. (hereinafter referred to as "BIOGEN"), a Massachusetts
corporation located at 14 Cambridge Center, Cambridge, MA 02142, and CV
THERAPEUTICS, INC., a Delaware corporation, located at 3172 Porter Drive, Palo
Alto, CA 94304 (hereinafter referred to as "CVT").
WHEREAS, BIOGEN is a biopharmaceutical company which develops,
manufactures, markets and sells pharmaceutical products for human healthcare;
and
WHEREAS, CVT is the owner and/or exclusive licensee of certain technology,
patent rights and other proprietary know-how related to PRODUCTS as hereinafter
defined; and
WHEREAS, BIOGEN desires to obtain an exclusive right and license in and to
such technology, patent rights and proprietary know-how in the TERRITORY as
hereinafter defined; and
WHEREAS, BIOGEN desires to support additional research related to PRODUCTS;
and
WHEREAS, CVT is willing to grant the exclusive right and license desired by
BIOGEN and to participate in the conduct of research supported by BIOGEN; and
WHEREAS, CVT is granting an exclusive right and license in and to such
technology, patent rights and proprietary know-how outside the TERRITORY to
Biotech Manufacturing Limited ("BML") pursuant to a Research Collaboration and
License Agreement (Europe) of even date herewith (the "BML AGREEMENT") .
NOW, THEREFORE, in consideration of the mutual promises and other good and
valuable consideration, the parties agree as follows:
SECTION 1. DEFINITIONS.
The terms used in this Agreement have the following meaning:
1.1 The term "Adenosine A(1) Antagonist" shall mean a molecule that
[ * ] compound being referred to herein as a "Test Compound"), the
[ * ], and such Test Compound meets the following specifications measured
concurrently in a validated in vitro assay:
(I) [ * ]
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(II) [ * ]
Notwithstanding the foregoing, if CVT is able to establish in a model
reasonably acceptable to BIOGEN that the principal activity of a Test
Compound IN VIVO is as [ * ] such Test Compound shall be excluded from the
definition of Adenosine A(1) Antagonists.
1.2 The term "AFFILIATE" as applied to either party shall mean any
company or other legal entity other than the party in question, in whatever
country organized, controlling, controlled by or under common control with
that party. The term "control" means ownership or control, directly or
indirectly, of at least fifty percent (50%) of the outstanding stock or
voting rights or the right to elect or appoint a majority of the directors.
1.3 The term "first AGREEMENT YEAR" shall mean the twelve month period
commencing on the EFFECTIVE DATE. With respect to any year after the first
AGREEMENT YEAR, the term "AGREEMENT YEAR" shall mean the twelve month period
commencing upon an anniversary of the Effective Date.
1.4 The term "BIOGEN CVT-124 TECHNOLOGY" shall mean any information,
data (including all chemical, pharmacological, toxicological, clinical,
assay, manufacturing and control information, data and test results,
including negative results), ideas, concepts, formulas, trade secrets,
methods, procedures, designs, materials, compositions, plans, diagrams,
applications, specifications, techniques, records, practices, processes,
research, know-how, inventions, discoveries and the like first conceived and
first reduced to practice by BIOGEN or its AFFILIATES in the performance of
any of its work under or pursuant to this Agreement which are necessary or
useful for the manufacture or use of CVT-124 or other PRODUCTS.
1.5 The term "BIOGEN CVT-124 PATENTS" shall mean all patents and pending
patent applications (which for purposes of this Agreement shall be deemed to
include certificates of invention and applications for certificates of
invention and priority rights, provisional patent applications, statutory
invention registrations, applications for statutory invention registrations,
and any foreign equivalents thereof) owned by BIOGEN or its AFFILIATES
throughout the TERRITORY which claim the BIOGEN CVT-124 TECHNOLOGY or any
part thereof, including any provisional applications, substitutions,
extensions, reissues, reexaminations, renewals, continuations,
continuations-in-part, divisionals and supplemental protection certificates.
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1.6 The term "CALENDAR QUARTER" shall mean the period of three (3)
consecutive calendar months ending on March 31, June 30, September 30 or
December 31, as the case may be.
1.7 The term "CVT-124" shall mean the [ * ] of epoxy norbornyl
xanthine as defined as CVT-124 in the IND filed on September 20, 1995 and as
further described in U.S. Patent Application Serial No. [ * ].
1.8 The term "CVT PATENT RIGHT(S)" shall mean all patents and pending
patent applications (which for purposes of this Agreement shall be deemed to
include certificates of invention and applications for certificates of
invention and priority rights, provisional patent applications, statutory
invention registrations, applications for statutory invention registrations,
and any foreign equivalents thereof) throughout the TERRITORY that claim CVT
TECHNOLOGY or any part thereof, including any provisional applications,
substitutions, extensions, reissues, reexaminations, renewals, continuations,
continuations-in-part, divisionals and supplemental protection certificates,
which CVT owns (in whole or in part) or to which CVT otherwise has a
transferable right as of the EFFECTIVE DATE or at any time during the term of
this Agreement, including but not limited to CVT's rights in any RESEARCH
PATENT RIGHTS and CVT's rights obtained under the UFRFI LICENSE. CVT PATENT
RIGHTS as of the EFFECTIVE DATE are set forth in APPENDIX A hereto.
1.9 "CVT TECHNOLOGY" shall mean any information, data (including all
chemical, pharmacological, toxicological, clinical, assay, manufacturing and
control information, data and test results, including negative results),
ideas, concepts, formulas, trade secrets, methods, procedures, designs,
materials, compositions, plans, diagrams, applications, specifications,
techniques, records, practices, processes, research, know-how, inventions,
discoveries and the like which CVT owns (in whole or in part) or to which CVT
otherwise has a transferable right as of the EFFECTIVE DATE or at any time
during the term of this Agreement, which relate to CVT-124 or any other
Adenosine A(1) Antagonist, including but not limited to CVT's rights in the
RESEARCH INFORMATION, the RESEARCH MATERIALS and the RESEARCH INVENTIONS, and
CVT's rights under the UFRFI LICENSE.
1.10 The term "EFFECTIVE DATE" shall mean March 10, 1997.
1.11 The term "FTE" shall mean the equivalent of a full year of effort on
a full time basis of a scientist or other professional possessing skills and
experience necessary to carry out applicable tasks under the RESEARCH PROGRAM.
1.12 The term "FIRST COMMERCIAL SALE" shall mean the initial transfer by
BIOGEN or any of its AFFILIATES or SUBLICENSEES of a PRODUCT to a
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THIRD PARTY in exchange for consideration, following marketing approval by
the appropriate governmental agency for the country in which the transfer is
made.
1.13 The term "MAA" shall mean an application for regulatory approval to
sell PRODUCT in the European Union and similar in purpose to an NDA in the
United States.
1.14 The term "MAJOR MARKET" shall mean the United States.
1.15 The term "NDA" shall mean a New Drug Application or Product License
Application or equivalent filing filed for PRODUCT with the U.S. Food and
Drug Administration ("FDA").
1.16 The term "NDR" shall mean an application for regulatory approval to
sell PRODUCT in Japan and similar in purpose to an NDA in the United States.
1.17 The term "NET SALES" shall mean the [ * ] of BIOGEN and its
AFFILIATES with respect to the sale of PRODUCT, less:
(i) trade, quantity, cash or other discounts [ * ] allowed not
exceeding amounts customary in the trade, including, without limitation,
governmental program discounts and rebates (e.g., Medicaid, Medicare, VA,
etc.)
(ii) sales taxes, tariff duties and/or use taxes directly imposed
on and with reference to particular sales;
(iii) packing, transportation and insurance prepaid or allowed; and
(iv) amounts allowed or credited on rejects, returns or retroactive
price reductions.
A sale or transfer of PRODUCT by BIOGEN to an AFFILIATE for re-sale of
PRODUCT by such AFFILIATE shall not be considered a sale for the purpose of
this provision but the resale of PRODUCT by such AFFILIATE to a THIRD PARTY
shall be a sale for such purposes. A "sale" shall mean a transfer or other
disposition for consideration, but shall not include transfers or
dispositions at no cost for pre-clinical, clinical, regulatory or
governmental purposes or disposition of PRODUCT at no cost for promotional
purposes.
In the event that PRODUCT is sold in the form of a combination product
containing one or more active ingredients or components in addition to CVT-124
or, if applicable, another Adenosine A(1) Antagonist, NET SALES shall be
determined by multiplying NET SALES of the combination product (as defined by
reference to the
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standard NET SALES definition) during the applicable payment period by the
fraction A/A+B where A is the average sale price of PRODUCT when sold
separately in finished form and B is the average sale price of the other
active ingredients or components when sold separately in finished form in
each case during the applicable payment period in the country in which the
sale of the combination product was made, or if sales of both the PRODUCT and
the other active ingredients or components did not occur in such period, then
in the most recent payment period in which sales of both occurred. In the
event that such average sale price cannot be determined for both PRODUCT and
all other active ingredients or components included in the combination
product, NET SALES for purposes of determining payments under this Agreement
shall be calculated by multiplying the NET SALES of the combination product
by the fraction C/C+D where C is the fair market value of the CVT-124 (or
other Adenosine A(1) Antagonist) contribution to the combination and D is the
sum of the fair market values of all other active components or ingredients
included in the combination product, in each case, as determined by BIOGEN in
good faith.
1.18 The term "OPERATING COMMITTEE" shall have the meaning set forth in
Section 7.1 of this Agreement.
1.19 The term "PHASE II PERFORMANCE ASSESSMENT STUDY" shall mean a Phase
II study of intravenous CVT-124 in patients with [ * ] congestive heart
failure (CHF). The study will be designed to demonstrate as a primary
endpoint, [ * ] The study design may be optimized by BIOGEN as additional
data is gathered from other trials.
1.20 The term "PHASE III TRIAL" shall mean a randomized clinical trial
designed to show efficacy and safety of a PRODUCT and intended to be
submitted as part of the application for marketing approval of such PRODUCT.
1.21 The term "PRODUCT" shall mean any article, composition or material
that comprises, contains or is CVT-124 or another Adenosine A(1) Antagonist,
the manufacture, import, use or sale of which is covered by a VALID CLAIM of
the CVT PATENT RIGHTS or includes any of the CVT TECHNOLOGY.
1.22 The term "RESEARCH INFORMATION" shall mean any data, results,
formulas, process information or other information which results from the
RESEARCH PROGRAM.
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1.23 The term "RESEARCH INVENTION(S)" shall mean any invention, know-how,
method, process, use, article of manufacture, or composition of matter
conceived or first actually or constructively reduced to practice as part of
the RESEARCH PROGRAM or which results from the RESEARCH PROGRAM.
1.24 The term "RESEARCH MATERIAL" shall mean any material, reagent or
substance which results from the RESEARCH PROGRAM.
1.25 The term "RESEARCH PATENT RIGHT(S)" shall mean all patents and
patent applications throughout the TERRITORY that claim RESEARCH INFORMATION,
RESEARCH INVENTIONS or RESEARCH MATERIAL or any part thereof, including any
provisional applications, substitutions, extensions, reissues,
reexaminations, renewals, continuations, continuations-in-part, divisionals
and supplemental protection certificates, statutory invention registrations,
applications for statutory invention registrations, and any foreign
equivalents thereof.
1.26 The term "RESEARCH PLAN" shall mean the written descriptions of the
research and development to be performed by CVT as part of the RESEARCH
PROGRAM for the first AGREEMENT YEAR and for each subsequent AGREEMENT YEAR
of the RESEARCH PROGRAM as approved in accordance with Section 8.2.
1.27 The term "RESEARCH PROGRAM" shall have the meaning set forth in
Section 8.1 of this Agreement.
1.28 The term "SUBLICENSE INCOME" shall mean any royalties or other
consideration received by a party hereto from any SUBLICENSEES in respect of
sales of PRODUCTS, excluding amounts paid to such party for research or other
services conducted by such party, for clinical trials, for purchases of
PRODUCTS or of other goods or products at fair market value, or for equity
investments at fair market value in such party.
1.29 The term "SUBLICENSEE" shall mean any non-AFFILIATE third party
expressly licensed by BIOGEN to make, have made or formulate any PRODUCT and
to sell the PRODUCT made or formulated. A SUBLICENSEE shall not include a
distributor or other party licensed to sell PRODUCT but not to make, have
made or formulate PRODUCT.
1.30 The term "TERRITORY" shall mean the United States, including Puerto
Rico, Guam and all other territories of the United States, and all other
countries and territories in North America and South America.
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1.31 The term "THIRD PARTY(IES)" shall mean a person or entity who or
which is neither a party hereto nor an AFFILIATE or SUBLICENSEE of a party
hereto.
1.32 The term "UFRFI LICENSE" shall mean a certain License Agreement
dated as of June 27, 1994 by and between CVT and University of Florida
Research Foundation, Inc. ("UFRFI"), as amended.
1.33 The term "VALID CLAIM" shall mean (i) a claim of a pending patent
application which claim shall not have been canceled, withdrawn, abandoned or
rejected by an administrative agency from which no appeal can be taken and
which application shall not have been pending for more than [ * ] or (ii) a
claim of an issued and unexpired patent which has not lapsed or become
abandoned or been declared invalid or unenforceable by a court of competent
jurisdiction or an administrative agency from which no appeal can be or is
taken.
1.34 The use herein of the plural shall include the singular, and the use
of the masculine shall include the feminine.
SECTION 2. GRANT AND OTHER RIGHTS.
2.1 CVT hereby grants to BIOGEN and BIOGEN hereby accepts from CVT an
exclusive, royalty-bearing right and license under the CVT TECHNOLOGY and CVT
PATENT RIGHTS to make, have made, import, use, offer for sale and sell
PRODUCTS in the TERRITORY. CVT shall be responsible for paying any royalty
obligations which CVT may have to any THIRD PARTY under agreements between
CVT and such THIRD PARTIES in effect as of the EFFECTIVE DATE arising from
the exercise of the license grant set forth above.
2.2 (a) AFFILIATES. BIOGEN shall have the full and unrestricted right
to extend the license granted to it herein to AFFILIATES. BIOGEN shall
advise CVT of any such extension to AFFILIATES.
(b) SUBLICENSES. BIOGEN shall have the right to grant sublicenses
in the TERRITORY under the license granted to it herein in accordance with
the following:
BIOGEN shall have the full and unrestricted right to grant sublicenses at
any time after the [ * ] for such PRODUCT, but may not grant a sublicense
prior to that time.
BIOGEN agrees to forward to CVT a copy of any sublicense agreements
within thirty (30) days of the execution of such sublicense agreements and
further agrees to
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forward to CVT annually a copy of such reports received by BIOGEN from its
sublicensees during the preceding twelve (12) month period under the
sublicenses as shall be pertinent to a royalty accounting under said
sublicense agreements.
2.3 To the extent CVT PATENT RIGHTS or CVT TECHNOLOGY licensed to BIOGEN
under this Agreement are rights which CVT has licensed from UFRFI under the
UFRFI LICENSE, BIOGEN and CVT understand and agree that the rights licensed
to BIOGEN by CVT are subject to the terms of the UFRFI LICENSE.
SECTION 3. INTENTIONALLY OMITTED.
SECTION 4. MANUFACTURE AND SUPPLY OF PRODUCT; CONDUCT OF CLINICAL TRIALS;
TECHNOLOGY TRANSFER.
4.1 PRODUCT SUPPLY. BIOGEN and its AFFILIATES shall be responsible for
the manufacture and supply of PRODUCT hereunder for clinical trials and
commercial sales in the TERRITORY. Notwithstanding the foregoing, within
thirty (30) days of the Effective Date, CVT shall deliver to BIOGEN CVT's
existing inventory of CVT-124 as described in Appendix C, along with copies
of all quality control release test results and other relevant documentation
relating to such inventory. In addition, upon BIOGEN's request, CVT shall
[ * ] the manufacturing contract, dated December 2, 1996, between CVT and
the [ * ]
4.2 COLLABORATION. CVT's representatives on the OPERATING COMMITTEE
shall work with BIOGEN to establish programs to optimize the chemical
manufacturing process for PRODUCT.
4.3 CLINICAL PROGRAMS. BIOGEN will, at its sole expense, be responsible
for the worldwide design and conduct of all pre-clinical, clinical,
development and regulatory work under this Agreement for PRODUCTS being
developed for sale hereunder and under the BML AGREEMENT, with input from CVT
through its representation on the OPERATING COMMITTEE and the Strategy
Committee. Notwithstanding the foregoing, CVT shall lead the protocol design
and selection of key investigators for the following clinical studies which
are in the planning stages as of the Effective Date, subject to BIOGEN's
guidance and right of final approval:
(i) Phase II clinical trial of intravenous CVT-124 for [ * ]
(ii) Phase II clinical trial of intravenous CVT-124 for protection
against [ * ] at BIOGEN's option; and
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(iii) Phase I [ * ] study.
Protocols for the above clinical trials shall be approved by the
OPERATING COMMITTEE, as defined below, as soon as possible after the
Effective Date.
4.4 TRANSFER OF CVT TECHNOLOGY. From and after the Effective Date, CVT
shall make available sufficient personnel and resources to accomplish the
swift and orderly transfer of copies and/or samples, as the case may be, of
all CVT Technology to Biogen.
4.5 [ * ] REGULATORY FILINGS. CVT [ * ] all INDs and other regulatory
filings relating to CVT-124. CVT shall promptly deliver copies of such
filings to BIOGEN and [ * ] of such filings. CVT and BIOGEN shall
cooperate in [ * ] in such a way as not to harm either CVT's or BIOGEN's
relationship with the relevant regulatory authorities. To that end, BIOGEN
may elect to have one or more of CVT's employees participate in meetings
between BIOGEN and regulatory authorities [ * ] CVT's regulatory filings.
4.6 CLINICAL CONTRACTS, TRANSFER OF CLINICAL DATABASE. The transition of
planning for the conduct of planned clinical trials of CVT-124 shall proceed
in accordance with Appendix B. If BIOGEN elects to enter into contracts with
the parties with whom CVT has been negotiating, whether or not upon the terms
previously negotiated by CVT, CVT shall provide its full cooperation, as
requested by BIOGEN. CVT shall, within five (5) days after the EFFECTIVE
DATE, provide BIOGEN with a full and complete copy, including all raw data,
of [ * ] In addition, upon BIOGEN's request, CVT shall provide to BIOGEN
all of the original Case Report Forms from such study.
SECTION 5. DUE DILIGENCE.
5.1 PRODUCT DEVELOPMENT. BIOGEN shall use commercially reasonable
efforts to develop and market a PRODUCT, which efforts shall be at least
commensurate with those efforts undertaken in BIOGEN's own internal programs
with the same profit potential and risk.
5.2 [ * ] BIOGEN shall use commercially reasonable efforts
to develop a PRODUCT for [ * ] which efforts shall be at least
commensurate with those efforts undertaken in BIOGEN's own internal programs
with the same profit potential and risk. Subject to technical and regulatory
delays, BIOGEN will use commercially reasonable efforts to meet the following
development timeline:
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(I) Within [ * ] of the successful completion of a [ * ] BIOGEN
shall [ * ]
(II) Within [ * ] of commencing [ * ] BIOGEN shall commence a
Phase I trial of such PRODUCT; and
(III) Within [ * ] of the successful completion of [ * ]
BIOGEN shall make its decision to commence a [ * ] of such PRODUCT.
Provided that BIOGEN has used commercially reasonable efforts as
aforesaid, failure to meet the foregoing timeline shall not constitute a
breach of this Agreement, or result in any limitation on the licenses and
rights granted to BIOGEN pursuant to this Agreement.
5.3 STATUS REPORTS. Within sixty (60) days of the end of each calendar
year during the term hereof, BIOGEN shall provide to CVT a written report
summarizing the status of BIOGEN's development efforts hereunder and the
results of the prior year's efforts.
SECTION 6. CONFIDENTIALITY AND INFORMATION.
6.1 During the term of this Agreement, it is contemplated that each
party may disclose to the other, proprietary and confidential technology,
inventions, technical information, material, reagents, biological materials
and the like which are owned or controlled by the party providing such
information or which that party is obligated to maintain in confidence
("Confidential Information"). Each party shall have the right to refuse to
accept the other party's Confidential Information. Each party agrees not to
disclose and to maintain the Confidential Information of the other party in
strict confidence, to cause all of its agents, representatives and employees
to maintain the disclosing party's Confidential Information in confidence and
not to disclose any such Confidential Information to a third party without
the prior written consent of the disclosing party and not to use such
Confidential Information for any purpose other than as licensed under this
Agreement.
6.2 The obligations of confidentiality will not apply to information
which:
(i) was known to the receiving party or generally known to the
public prior to its disclosure hereunder through no fault of the receiving
party or any agent, representative or employee thereof; or
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(ii) subsequently becomes known to the public by some means other
than a breach of this Agreement, including publication and/or laying open to
inspection of any patent applications or patents;
(iii) is subsequently disclosed to the receiving party by a third
party having a lawful right to make such disclosure and who is not under an
obligation of confidentiality to the disclosing party;
(iv) is approved for release by the parties.
6.3 The obligations of Section 6.1 notwithstanding, BIOGEN may disclose
the Confidential Information of CVT licensed to BIOGEN hereunder (a) to
SUBLICENSEES and (b) to THIRD PARTIES who (i) need to know the same in order
to secure regulatory approval for the sale of PRODUCT, (ii) who need to know
the same in order to work towards the commercial development of PRODUCT or to
manufacture PRODUCT, or (iii) who are approved by CVT, provided that such
parties, other than regulatory authorities, are bound by obligations of
confidentiality and non-use at least as stringent as those set forth herein.
Further, either party may disclose Confidential Information of the other
party to the extent such disclosure is required by law, rule, regulation or
bona fide legal process to be disclosed, provided that the receiving party
takes all reasonable steps to restrict and maintain confidentiality of such
disclosure and provides reasonable notice to the disclosing party.
6.4 CVT shall provide to BIOGEN, or if required to the applicable
regulatory authority, all documents and information, to the extent in CVT's
possession or otherwise reasonably accessible to CVT with the right to
disclose, requested by the regulatory authority or reasonably requested by
BIOGEN in support of BIOGEN's regulatory submissions. Copies of all
documents provided directly to a regulatory authority shall be provided to
BIOGEN in advance, if practicable, or otherwise within [ * ] of
delivery to the regulatory authority. In addition, CVT shall provide to
BIOGEN any information, to the extent in CVT's possession or otherwise
reasonably accessible to CVT with the right to disclose, related to PRODUCT
that is (a) reasonably required in support of BIOGEN's applications to patent
offices and such governmental offices as regulate the price of PRODUCT and/or
(b) reasonably required to support a legal action by BIOGEN against a THIRD
PARTY.
6.5 Neither party may disclose the existence or terms of this Agreement
without the prior written consent of the other party; provided, however, that
either party may make such disclosure to the extent required by law. The
parties have approved an initial press release as set forth in APPENDIX D
attached hereto. Once any written statement is approved for disclosure by both
parties, either party may make
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subsequent public disclosure of the contents of such statement without the
further approval of the other party.
SECTION 7. GOVERNANCE.
7.1 OVERALL RESPONSIBILITY.
(a) Overall direction of the parties' strategic alliance under this
Agreement and the BML AGREEMENT will be provided by an Oversight Committee
consisting of an equal number of senior management representatives from each
party. The Oversight Committee will meet on an ad hoc basis during the term
of this Agreement to monitor the overall performance of the collaboration
hereunder and to resolve any disputes which may arise regarding the operation
of the collaboration, such resolution to be within a reasonable period of
time under the relevant circumstances, in any event not to exceed [ * ]
(b) The following committees shall also be established under this
Agreement as set forth below.
(i) the OPERATING COMMITTEE; and
(ii) the Strategy Committee.
7.2 OPERATING COMMITTEE. An OPERATING COMMITTEE (a/k/a, the "CVT-124
Development Team") shall be established by BIOGEN to manage the worldwide
development of PRODUCTS. The activities of the RESEARCH PROGRAM, described
hereinafter in Section 8, will also be overseen and monitored by the
OPERATING COMMITTEE.
(a) MEMBERSHIP. Within ten (10) days of the date hereof, CVT shall
designate up to [ * ] representatives to serve on the OPERATING COMMITTEE.
Additional representatives of CVT may attend OPERATING COMMITTEE meetings on
an as needed basis with the prior approval of BIOGEN, such approval not to be
unreasonably withheld. CVT will have the right to change its representation
on the OPERATING COMMITTEE upon written notice to BIOGEN. BIOGEN
representatives on the OPERATING COMMITTEE shall include representatives of
all relevant line functions, as determined by BIOGEN.
(b) CHAIR. The OPERATING COMMITTEE chair (a/k/a "Program
Executive") shall be designated by BIOGEN.
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(c) RESPONSIBILITIES. The OPERATING COMMITTEE will have authority to
take and perform all actions necessary to accomplish its responsibilities,
including but not limited to, authority to:
(i) oversee and manage the day-to-day development of PRODUCTS;
(ii) oversee the RESEARCH PROGRAM, and monitor performance
thereunder;
(iii) coordinate programs to optimize the chemical
manufacturing process;
(iv) review and propose RESEARCH PLANS and budgets; and
(v) review any and all proposed publications or communications
relating to the RESEARCH PROGRAM and the results therefrom, in accordance with
the procedure set forth in Section 8.
(d) MEETINGS. The OPERATING COMMITTEE will meet not less than
monthly. Meetings will be held at BIOGEN's premises or such other place as may
be mutually agreed upon. CVT representatives may participate in person or by
telephone. In the event of disagreement, [ * ]
7.3 STRATEGY COMMITTEE. A Strategy Committee will be established which
will meet as needed to set worldwide clinical, regulatory and marketing
strategies for PRODUCTS. CVT may designate up to four (4) representatives
who may participate in meetings of the Strategy Committee in person or by
telephone. Additional representatives of CVT may attend Strategy Committee
meetings on an as needed basis with the prior approval of BIOGEN, such
approval not to be unreasonably withheld. In the event of disagreement,
[ * ]
SECTION 8. RESEARCH PROGRAM.
8.1 OBJECT. CVT shall conduct a program of research in accordance with
annual RESEARCH PLANS established in accordance with Section 8.2 (the
"RESEARCH PROGRAM"). The objectives of the RESEARCH PROGRAM shall be first
to [ * ] of CVT-124, and thereafter to explore [ * ] CVT-124, to
identify [ * ] CVT agrees to conduct and manage
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the RESEARCH PROGRAM pursuant to the RESEARCH PLAN and BIOGEN agrees to support
such RESEARCH PROGRAM at CVT in accordance with the terms and conditions set
forth below.
8.2 (a) DEFINITION OF PHASES OF RESEARCH PROGRAM. The RESEARCH
PROGRAM shall be divided into two phases. Phase 1 of the RESEARCH PROGRAM
shall begin with the EFFECTIVE DATE and end at such time that a [ * ] by
either party. Phase 2 of the RESEARCH PROGRAM shall commence after the
completion of Phase 1 and continue for as long as the RESEARCH PROGRAM is in
effect.
(b) CONDUCT OF PHASE 1 OF THE RESEARCH PROGRAM. The RESEARCH PLAN
and budget for Phase 1 of the RESEARCH PROGRAM is attached hereto as Appendix
E. CVT will use commercially reasonable efforts to perform the RESEARCH
PLAN for Phase 1 of the RESEARCH PROGRAM in accordance with the agreed-upon
schedule and budget contained in Appendix E. Such budget includes the number
of FTEs to be devoted to the RESEARCH PROGRAM during each AGREEMENT YEAR
during Phase 1 (at [ * ] per FTE), together with a breakdown of any other
fees and expenses to be incurred, and totals [ * ] per year.
(c) CONDUCT OF PHASE 2 OF THE RESEARCH PROGRAM. The RESEARCH
PLAN and budget for Phase 2 of the RESEARCH PROGRAM shall be approved by the
parties at least ninety (90) days prior to the beginning of Phase 2 and at
least ninety (90) days prior to the beginning of each AGREEMENT YEAR
commencing during Phase 2. CVT will use commercially reasonable efforts to
perform the RESEARCH PLAN during Phase 2 of the RESEARCH PROGRAM in
accordance with the agreed-upon schedule and budget.
(d) EXCHANGE OF INFORMATION AND REPORTS. To further the efforts of
the parties under this Agreement, CVT shall promptly disclose to BIOGEN any
RESEARCH INVENTIONS arising out of the RESEARCH PROGRAM, but in any event
within [ * ] for potentially patentable, significant RESEARCH INVENTIONS,
and within [ * ] of the end of each CALENDAR QUARTER for all others. CVT
shall keep BIOGEN and the OPERATING COMMITTEE reasonably informed of its
progress in the RESEARCH PROGRAM and shall deliver reasonably detailed
written progress reports to BIOGEN semi-annually.
(e) VISITATION. For the purpose of facilitating the parties
understanding of the research and development activities conducted hereunder,
CVT will permit duly authorized employees or representatives of BIOGEN to
visit its facilities where the
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RESEARCH PROGRAM activities are conducted, at reasonable times and with
reasonable notice, subject to appropriate confidentiality provisions.
8.3 SOURCE OF FUNDS. During the term of the RESEARCH PROGRAM as
specified in Section 8.5, CVT will dedicate [ * ]
in each AGREEMENT YEAR from the proceeds of BML's equity investments in CVT
to be made pursuant to the BML AGREEMENT to support the conduct of the
RESEARCH PROGRAM at CVT. Such funds shall be utilized solely for performance
of the RESEARCH PROGRAM in accordance with the approved budget.
8.4 REPORTS [ * ]. During Phase 1 of the RESEARCH PROGRAM, CVT shall
prepare annual financial reports of actual and budgeted expenditures under
the RESEARCH PROGRAM. BIOGEN [ * ] provided under the BML AGREEMENT for
Phase 1 of the RESEARCH PROGRAM in accordance with the approved budget. The
[ * ] in any report from CVT, in which case [ * ]
8.5 TERM AND TERMINATION OF THE RESEARCH PROGRAM. The term of the
RESEARCH PROGRAM will be the first three (3) AGREEMENT YEARS. BIOGEN shall
be entitled to terminate the RESEARCH PROGRAM and BML shall be entitled to
cease funding thereof in the event of termination of this Agreement or in the
event of a breach by CVT of any of CVT's material obligations in the RESEARCH
PROGRAM following written notice of such breach to CVT. If such breach is
not cured within [ * ] after written notice is given by BIOGEN to CVT
specifying the breach, BIOGEN may terminate the RESEARCH PROGRAM without
terminating the entire Agreement and BML may cease funding of the RESEARCH
PROGRAM forthwith upon written notice to CVT after expiration of such [ * ]
In the event BIOGEN terminates the RESEARCH PROGRAM as provided above, BIOGEN
may, at its option, require CVT to repurchase from BML shares of CVT Common
Stock sold to BML pursuant to the BML AGREEMENT, [ * ] in an amount equal
to [ * ] less the amount of CVT's actual expenditures incurred during the
AGREEMENT YEAR prior to such termination of the RESEARCH PROGRAM. In
addition to BIOGEN's right to terminate the RESEARCH PROGRAM for breach as
provided above, either BIOGEN or CVT may terminate the RESEARCH PROGRAM
without terminating the entire Agreement upon [ * ] written notice
delivered prior to the commencement of the second AGREEMENT YEAR or the third
AGREEMENT YEAR; provided, however, that notwithstanding the foregoing, CVT
may not terminate the RESEARCH PROGRAM prior to the end of Phase 1 of the
RESEARCH PROGRAM.
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8.6 THIRD PARTY SUPPORT CVT shall not apply any of the funding provided
by BML under the BML AGREEMENT for Phase 1 of the RESEARCH PROGRAM towards
R&D to be conducted in whole or in part by a THIRD PARTY without BIOGEN's
approval, such approval not to be unreasonably withheld or delayed. CVT may
apply any of the funding provided by BML under the BML AGREEMENT for Phase 2
of the RESEARCH PROGRAM towards R&D to be conducted in whole or in party by a
THIRD PARTY provided that BIOGEN has approved in advance the form of
agreement to be used in contracting with such THIRD PARTY, such approval not
to be unreasonably withheld or delayed.
8.7 CONFIDENTIALITY. In order to facilitate the operation of the
RESEARCH PROGRAM, either party may disclose confidential or proprietary
information owned or controlled by it to the other. It is hereby understood
and agreed that such information shall be treated in accordance with Section
6 hereof.
8.8 RESULTS OF THE RESEARCH PROGRAM.
(a) All right, title and interest in and to any RESEARCH
INFORMATION, RESEARCH INVENTIONS and RESEARCH MATERIAL (the "RESULTS"), and
any RESEARCH PATENT RIGHTS based thereon, conceived and reduced to practice
solely by employees or agents of CVT shall be owned solely by CVT ("CVT
RESULTS"), subject to the licenses granted to BIOGEN under Section 2 hereof
and the licenses granted to BML under Section 2 of the BML AGREEMENT. All
right, title and interest in or to any RESULTS and any RESEARCH PATENT RIGHTS
based thereon, conceived and reduced to practice solely by employees or
agents of BIOGEN shall be owned solely by BIOGEN. All right, title and
interest in and to any RESULTS and any RESEARCH PATENT RIGHTS based thereon
conceived and reduced to practice by employees or agents of CVT and employees
or agents of BIOGEN shall be owned jointly by CVT and BIOGEN ("JOINT
RESULTS"), with CVT's ownership interest therein being subject to the
licenses granted to BIOGEN under Section 2 hereof and the licenses granted to
BML under Section 2 of the BML AGREEMENT. Invention, conception and reduction
to practice of RESEARCH INVENTIONS, RESEARCH INFORMATION, RESEARCH MATERIALS,
and RESEARCH PATENT RIGHTS shall be determined in accordance with United
States intellectual property laws.
(b) There will be no publication of the RESULTS by CVT, or any
employee of CVT unless the OPERATING COMMITTEE has reviewed the proposed
scientific publication concerning the RESULTS and each party has consented in
writing to the publication, which review shall be conducted within [ * ] of
submission of the proposed publication to the OPERATING COMMITTEE, and which
approval shall not be unreasonably withheld or delayed. CVT will, upon
request of
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BIOGEN, delay publication for up to [ * ] to allow for the filing
of patent applications incorporating RESULTS.
(c) Notwithstanding any provision in this Agreement and/or the BML
AGREEMENT to the contrary, BIOGEN shall have no rights pursuant to Section 2
hereof, and BML shall have no rights pursuant to Section 2 of the BML
AGREEMENT to any compounds developed in the RESEARCH PROGRAM that are not
Adenosine A(1) Antagonists ("Non- A(1) Compounds"). With respect to such
Non- A(1) Compounds, BIOGEN shall have a right of first refusal as follows:
CVT shall give written notice to BIOGEN specifying in reasonable detail the
rights and data, including preclinical data establishing IN VIVO activity,
relating to Non-A(1) Compounds that CVT has developed (the "Offer"). BIOGEN
shall have [ * ] after the date of the Offer to provide a written response
to CVT (the "Response") as to whether or not BIOGEN wishes to enter into
negotiations with CVT with respect to such rights. If the Response states
that BIOGEN wishes to enter into negotiations with CVT, the parties shall
negotiate in good faith the licensing of such rights for a period of [ * ]
from the date of the Response. If BIOGEN declines to enter into negotiations
or if the parties do not agree upon and execute a written agreement within
the [ * ] negotiation period, CVT shall deliver to BIOGEN in writing its
last best offer for licensing such rights. BIOGEN shall have [ * ] from
receipt of CVT's last best offer to accept such offer in writing. If BIOGEN
declines to accept CVT's last best offer, CVT shall thereafter have the right
to negotiate with third parties with respect to such rights; provided,
however, that the terms of any such definitive agreement with any third party
shall not be more favorable to the third party than CVT's last best offer to
BIOGEN. The foregoing BIOGEN rights shall terminate [ * ] after the end of
the RESEARCH PROGRAM.
SECTION 9. PATENTS.
9.1 (a) CVT shall promptly advise BIOGEN, in writing, of each potentially
patentable or otherwise potentially useful RESEARCH INVENTION arising from the
RESEARCH PROGRAM. Representatives of CVT and BIOGEN shall then discuss whether
a patent application or applications pertaining to such RESEARCH INVENTION
should be filed and in which countries. The titles, serial numbers and other
identifying data of patent applications claiming a RESEARCH INVENTION to which
BIOGEN is granted rights hereunder and filed after the EFFECTIVE DATE by mutual
agreement of CVT and BIOGEN, or by BIOGEN alone pursuant to the last sentence of
this section or pursuant to subsection (c) hereof, shall be added to APPENDIX A
of this Agreement and to Appendix A of the BML AGREEMENT and CVT's interest
therein shall become CVT PATENT RIGHTS for purposes of both this Agreement and
the BML AGREEMENT. CVT shall file, prosecute and maintain patent applications
and patents worldwide relating to such CVT RESULTS as the parties agree
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hereunder, [ * ] through patent counsel selected by CVT and reasonably
acceptable to BIOGEN, except as provided in subsection (c) below. BIOGEN
shall have the opportunity to provide substantive review and comment on any
such filing, prosecution and or maintenance and the rights as set forth in
Section 9.2 below. In the event CVT declines to prepare, file, prosecute or
maintain a patent application on a RESEARCH INVENTION, then BIOGEN may
prepare, file, prosecute and maintain such patent application, in which
events [ * ] after the date of its election to assume responsibility for
such patent application.
(b) BIOGEN shall, as of the EFFECTIVE DATE, assume responsibility
to prepare, file, prosecute and maintain patent applications and patents
worldwide relating to CVT PATENT RIGHTS identified on Appendix A as of the
EFFECTIVE DATE and relating to JOINT RESULTS, and [ * ] related thereto.
Notwithstanding the foregoing, CVT shall maintain CVT PATENT RIGHTS for a
period of 6 weeks from the EFFECTIVE DATE and shall cooperate fully in the
orderly transfer to BIOGEN's patent counsel of all files and necessary powers
of attorney related to such CVT PATENT RIGHTS within 4 weeks from the
EFFECTIVE DATE. BIOGEN shall also have the option pursuant to subsection (a)
above to prepare, file, prosecute and maintain patent applications and
patents worldwide relating to CVT RESULTS that CVT declines to file,
prosecute and/or maintain, and shall have the option under subsection (c)
below.
(c) BIOGEN shall have the option, commencing at such time as a
PRODUCT to which RESEARCH PATENT RIGHTS relate enters human clinical trials,
to assume CVT's responsibility to file, prosecute and maintain patent
applications and patents worldwide relating to such RESEARCH PATENT RIGHTS in
which events [ * ] after the date of its election to assume control of such
RESEARCH PATENT RIGHTS.
(d) The term "Patent Costs" shall mean all reasonable [ * ]
incurred for the filing, prosecution, issuance, and maintenance of the
identified CVT PATENT RIGHTS, but not including the costs of any opposition
or interference proceedings, which shall [ * ] BIOGEN shall use patent
counsel selected by BIOGEN and reasonably acceptable to CVT. CVT shall have
the opportunity to provide substantive review and comment on any such filing,
prosecution and or maintenance and the rights as set forth in Section 9.2
below.
(e) Notwithstanding anything in this Section 9.1 to the contrary,
BIOGEN may, at its discretion, elect to discontinue financial support of any
patent
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application for which it is providing support under this Agreement, provided,
however, that BIOGEN will notify CVT of its intention at least sixty (60)
days prior to taking such action. In any country in which BIOGEN has elected
to discontinue its support of any patent application, CVT, upon receiving
notice, may elect at its own expense to assume all financial responsibility
for the prosecution of such patent application; provided, however, that if
CVT obtains issuance of any such patent application, BIOGEN shall reimburse
CVT for such expenses. BIOGEN's determination to [ * ] with respect to such
patent application pursuant to [ * ] hereof or pursuant to [ * ] of the
BML AGREEMENT.
9.2 With respect to any CVT PATENT RIGHTS, all substantive communication
to or from the United States Patent and Trademark Office or its equivalent in
any other jurisdiction, including, but not limited to, each patent
application, office action, response to office action, amendment,
restriction, election, request for terminal disclaimer, and request for
reissue or reexamination of any patent issuing from such application, as well
as any intention to discontinue prosecution or financial support of any
patent or patent applications shall be provided to BIOGEN or CVT, as the case
may be, by the party controlling the prosecution or maintenance sufficiently
prior to the filing of such document to allow for review and comment by
BIOGEN or CVT, respectively. However, BIOGEN and CVT shall have the right to
take any action that in its judgment is necessary to preserve such CVT
PATENT RIGHTS for which it is responsible. Both parties shall cooperate
fully to facilitate the preparation, filing, prosecution and maintenance of
CVT PATENT RIGHTS. Notwithstanding anything herein to the contrary, neither
BIOGEN nor CVT shall abandon a CVT PATENT RIGHT or allow a CVT PATENT RIGHT
to lapse without first giving the other notice of such intention at least
[ * ] prior to the date on which such CVT PATENT RIGHT will lapse or become
abandoned. BIOGEN or CVT shall have the right to assume the prosecution,
maintenance and defense of any CVT PATENT RIGHT which the other intends to
abandon. If this Agreement terminates for any reason, BIOGEN shall
immediately thereafter transfer to CVT control of the prosecution and
maintenance of all CVT PATENT RIGHTS and original copies of all documents
relating to such CVT PATENT RIGHTS in the possession or control of BIOGEN.
9.3 (a) If any of the CVT PATENT RIGHTS under which BIOGEN is licensed
hereunder, or under which BML is licensed under the BML AGREEMENT, is
infringed by a THIRD PARTY's manufacture, import, use, sale or offer to sell
of CVT-124 or another Adenosine A(1) Antagonist, or a product comprising or
containing CVT or another Adenosine A(1) Antagonist, BIOGEN shall have the
right and option but not the obligation to bring an action for infringement,
at its sole expense, against such THIRD PARTY in the name of CVT or its
licensors and/or in the name of BIOGEN,
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and to join CVT or its licensors, at BIOGEN's expense, as a party plaintiff
if required or if it would promote the success of the litigation. Each party
shall promptly notify the other party of any such infringement. BIOGEN shall
keep CVT informed as to the prosecution of any action for such infringement.
No settlement, consent judgment or other voluntary final disposition of the
suit which adversely affects CVT PATENT RIGHTS may be entered into without
the consent of CVT, which consent shall not unreasonably be withheld.
(b) In the event that BIOGEN shall undertake the enforcement and/or
defense of the CVT PATENT RIGHTS by litigation as provided above any recovery
of damages by BIOGEN for any such suit shall be applied first in satisfaction
of any unreimbursed expenses and legal fees of BIOGEN relating to the suit.
The balance remaining from any such recovery shall [ * ] considering where
the infringing sales were made.
(c) In the event that, and only if, BIOGEN specifically elects not
to pursue an action for infringement, CVT (or its licensor) shall have the
right and option, but not the obligation at its cost and expense to initiate
infringement litigation and [ * ]
(d) In any infringement suit either party may institute to enforce
the CVT PATENT RIGHTS pursuant to this Agreement, the other party hereto
shall, at the request of the party initiating such suit, cooperate in all
respects and, to the extent possible, have its employees testify when
requested and make available relevant records, papers, information, samples,
specimens, and the like. All reasonable out-of-pocket costs incurred in
connection with rendering cooperation requested hereunder shall be paid by
the party requesting cooperation.
SECTION 10. COMPENSATION.
10.1 (a) As consideration for research and development already performed
by CVT with respect to PRODUCTS, upon execution of this Agreement, BIOGEN
shall pay to CVT a non-creditable, non-refundable payment in the amount of
Five Million Dollars ($5,000,000).
(b) Upon execution of this Agreement, BIOGEN shall pre-pay the
[ * ] required to be paid upon the successful completion of a [ * ]
pursuant to Section 10.3(a)(ii). In the event the planned [ * ] of CVT-124
is unsuccessful [ * ] Biogen shall notify CVT in writing, whereupon CVT
shall refund to Biogen such pre-paid milestone within
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thirty (30) days. If Biogen shall thereafter successfully complete a [ * ]
with another PRODUCT, Biogen shall pay the milestone as provided in Section
10.3(a)(ii).
10.2 (a) BIOGEN shall pay to CVT royalties on NET SALES of PRODUCTS in the
TERRITORY ("Royalties") as follows:
(i) Royalties payable to CVT on NET SALES of PRODUCTS in the
TERRITORY shall be [ * ] and determined based on worldwide annual NET
SALES (i.e., including NET SALES of PRODUCTS under the BML AGREEMENT) in each
calendar year in accordance with the following table:
[ * ] Annual Net Sales Royalty
------------------------------------------
Up to [ * ] Million [ * ]
[ * ] Million to [ * ] Million [ * ]
Over [ * ] Million [ * ]
(ii) Notwithstanding subparagraph (i) above, in the event there
are two consecutive twelve month periods in which worldwide NET SALES exceed
[ * ] Million but are less than [ * ] Million, then, unless subparagraph
(iii) applies, Royalties shall thereafter be determined based on annual
worldwide NET SALES in any subsequent calendar year in accordance with the
following table:
[ * ] Annual Net Sales Royalty
------------------------------------------
Up to [ * ] Million [ * ]
[ * ] Million to [ * ] Million [ * ]
(iii) Notwithstanding subparagraph (ii), if at any time after
paragraph (ii) applies worldwide NET SALES exceed [ * ] Million for one
full twelve month period or are less than [ * ] Million for one full twelve
month period, the Royalties owed on NET SALES shall thereafter be determined
in accordance with subparagraph (i), regardless of the subsequent annual
overall levels of NET SALES.
(iv) Royalties shall be payable under this Agreement solely for
PRODUCT sold in the TERRITORY. However, for the purposes of determining the
applicable [ * ] royalty rate, worldwide annual NET SALES shall be deemed
to include NET SALES under both this Agreement and the BML AGREEMENT.
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(b) Notwithstanding the foregoing, if the use or sale of PRODUCT by
BIOGEN or its AFFILIATES in the country in which the PRODUCT is sold is not
covered by a VALID CLAIM of a CVT PATENT RIGHT in such country, the Royalties
payable with respect to NET SALES in such country shall be [ * ] of the
amounts otherwise due pursuant to Section 10.2(a) above; PROVIDED, however,
that if, in any such country, any one or more THIRD PARTY(S) is/are selling
a generic version of the PRODUCT being sold by BIOGEN or its AFFILIATES and
such THIRD PARTY(S)' sales of such generic product exceeds [ * ] of
BIOGEN's sales of the PRODUCT in such country, the Royalties in such country
shall be reduced to [ * ] during such period of generic sales.
(c) The obligation to pay Royalties for each PRODUCT shall continue
on a country-by-country and product-by-product basis until the last to expire
VALID CLAIM of the CVT PATENT RIGHTS in such country covering such PRODUCT;
provided, however, that in any country in which there is no such VALID CLAIM,
the obligation to pay Royalties shall continue only until the expiration of
[ * ] from the FIRST COMMERCIAL SALE of such PRODUCT in such country
by BIOGEN or its AFFILIATES or SUBLICENSEES.
(d) (i) In the event that after the EFFECTIVE DATE BIOGEN becomes
obligated to pay any royalties or other sums to THIRD PARTIES because the
manufacture, use or sale of CVT-124 or another Adenosine A(1) Antagonist
contained in a PRODUCT sold by BIOGEN hereunder in the TERRITORY infringes
such THIRD PARTIES' intellectual property rights, then BIOGEN shall be
entitled to credit [ * ] of any such obligations against
Royalties due to CVT pursuant to this Section 10.2.
(ii) In the event that after the EFFECTIVE DATE BIOGEN becomes
obligated to pay any royalties or other sums to THIRD PARTIES because the
manufacture, use or sale of a PRODUCT sold by BIOGEN hereunder in the
TERRITORY infringes such THIRD PARTIES' intellectual property rights on
account of a fact other than [ * ] then the matter shall be referred to the
Oversight Committee to determine in good faith whether or not BIOGEN shall be
entitled to a credit of up to [ * ] of any such obligations against
Royalties due to CVT pursuant to this Section 10.2. In the event the
Oversight Committee cannot agree within forty-five (45) days after referral
of the matter to them for resolution, then the [ * ] representatives to the
Oversight Committee shall [ * ]
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(iii) In no event shall any credits under subsections (d)(i)
and (d)(ii), or any cost-sharing pursuant to subsection (e) below, reduce
Royalties payable to CVT hereunder for any CALENDAR QUARTER by more than [ * ]
of the amounts otherwise due. [ * ]
(e) In the event that [ * ] of CVT-124 identified during Phase 1
of the RESEARCH PROGRAM results in [ * ] (including, but not limited to,
any cost to BIOGEN of [ * ] as compared to what it would have been using
[ * ] CVT-124 in the [ * ] BIOGEN and CVT agree to negotiate a [ * ] and
[ * ] to reflect a [ * ] BIOGEN may initiate any such negotiation by
delivering a written notice to CVT, whereupon the relevant representatives
of the parties on the OPERATING COMMITTEE parties shall meet and negotiate a
reduction as aforesaid in good faith. In the event the OPERATING COMMITTEE
representatives cannot agree within thirty (30) days of delivery of such
notice by BIOGEN, the matter shall be referred to the OVERSIGHT COMMITTEE for
resolution. In the event the representatives to the OVERSIGHT COMMITTEE
cannot agree within fifteen (15) days of referral of the matter to them for
resolution, the matter shall be submitted to binding arbitration pursuant to
the provisions of Appendix F hereof.
(f) NET SALES of PRODUCT in a country in the TERRITORY for which
BIOGEN has no royalty obligation, pursuant to Section 10.2(c), shall not be
included in the calculation of the level of NET SALES for purposes of Section
10.2(a).
(g) In addition to the foregoing, CVT shall receive a percentage of
BIOGEN's SUBLICENSE INCOME in accordance with this subsection (g).
(i) In MAJOR MARKET countries, CVT shall receive [ * ] of
SUBLICENSE INCOME, subject to the following floors and cap. For sublicenses
executed prior to the [ * ] in no event shall CVT receive less than [ * ]
of net sales of SUBLICENSEES (calculated using the NET SALES definition) for
any PRODUCTS covered by a VALID CLAIM of CVT PATENT RIGHTS in the country in
which they are sold. For sublicenses executed after [ * ] for such
PRODUCT, in no event shall CVT receive pursuant to this
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subsection less than [ * ] of net sales of SUBLICENSEES (calculated using the
NET SALES definition) for any PRODUCTS covered by a VALID CLAIM of CVT PATENT
RIGHTS in the country in which they are sold. Notwithstanding the foregoing,
if the use or sale of PRODUCT by a SUBLICENSEE in the country in which the
PRODUCT is sold is not covered by a VALID CLAIM of a CVT PATENT RIGHT in such
country, the minimum percentages set forth in the previous two sentences
shall be [ * ] respectively. In no event shall CVT receive pursuant to
this subsection an amount greater than the Royalties which would have been
due pursuant to this Section 10.2 on NET SALES of SUBLICENSEES if such NET
SALES had been made by BIOGEN.
(ii) In non-MAJOR MARKET countries, CVT shall receive [ * ]
of SUBLICENSE INCOME, subject to the following floors and cap. In no event
shall CVT receive pursuant to this subsection less than [ * ] of net sales
of SUBLICENSEES (calculated using the NET SALES definition) for any PRODUCTS
covered by a VALID CLAIM of CVT PATENT RIGHTS in the country in which they
are sold. Notwithstanding the foregoing, if the use or sale of PRODUCT by a
SUBLICENSEE in the country in which the PRODUCT is sold is not covered by a
VALID CLAIM of a CVT PATENT RIGHT in such country, the minimum percentage set
forth in the previous sentence shall be [ * ] In no event shall CVT receive
pursuant to this subsection an amount greater than the Royalties which would
have been due pursuant to this Section 10.2 on NET SALES of SUBLICENSEES if
such NET SALES had been made by BIOGEN.
(h) CVT hereby grants BIOGEN the right to [ * ] on sales of
PRODUCT by BIOGEN, BML, their AFFILIATES and SUBLICENSEES; provided that if
CVT also desires to [ * ] BIOGEN and CVT shall [ * ] In the event BIOGEN is
successful in [ * ] on such sales, the royalties otherwise payable by
BIOGEN to CVT hereunder, and the royalties otherwise payable by BML to CVT
under the BML AGREEMENT, shall be [ * ] and the royalties otherwise payable
by CVT to BIOGEN pursuant to Section 14.8 hereof, and by CVT to BML pursuant
to the corresponding provision of the BML AGREEMENT, shall be [ * ]
provided that CVT shall share in the benefits of any such [ * ] in an
amount commensurate with [ * ]
10.3 (a) BIOGEN shall pay the following amounts within [ * ]
of the occurrence of the following milestone events with respect to the first
PRODUCT to reach such milestone:
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Milestone Amount
--------- ------
(i) [ * ] [ * ]
(ii) [ * ] [ * ]
(iii) [ * ] [ * ]
(iv) [ * ] [ * ]
(v) [ * ] [ * ]
(vi) [ * ] [ * ]
(vii) [ * ] [ * ]
(viii) [ * ] [ * ]
(ix) [ * ] [ * ]
(x) [ * ] [ * ]
* Provided that BIOGEN has not given notice of termination of this
Agreement prior to expiration of such [ * ] period.
** [ * ] shall be determined by Biogen's decision to commence [ * ] with
respect to such chemical entity. Biogen has pre-paid this milestone in
anticipation of the successful completion of a [ * ] study with CVT-124,
pursuant to Section 10.1(e) hereof.
(b) In the event BIOGEN does not [ * ] and this
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Agreement has not been terminated, and (i) [ * ] planning or ongoing and
(ii) no material health or safety issue has arisen with respect to the
clinical use of PRODUCT, BIOGEN will pay CVT the related milestone fee as set
forth in Section 10.3(a)(iii) above as if it had reached such milestone at
such time, but such milestone payment shall not be due thereafter when a
[ * ] is actually commenced. In the event that any material health or
safety issue arises with respect to PRODUCT, BIOGEN shall nevertheless
continue to use commercially reasonable efforts to develop a PRODUCT.
(c) In the event BIOGEN has not [ * ] of the notice of decision
by BIOGEN to commence [ * ] of a PRODUCT in the United States, and this
Agreement has not been terminated, BIOGEN will nevertheless pay CVT the
related milestone set forth in Section 10.3(a)(vii) above in advance as if it
had reached such milestone at such time, but such milestone shall not be due
thereafter when such [ * ]
10.4 BIOGEN shall keep, and shall cause each of its AFFILIATES to keep,
full and accurate books of account containing all particulars relevant to its
sales of PRODUCTS that may be necessary for the purpose of calculating all
compensation payable to CVT hereunder. Such books of account shall be kept
at their principal place of business and for the three (3) years next
following the end of the calendar year to which each shall pertain, be open
for inspection by an independent certified public accountant reasonably
acceptable to BIOGEN, upon reasonable notice during normal business hours at
CVT's expense for the sole purpose of verifying compensation due under this
Agreement. In the event the inspection determines that compensation due CVT
for any period has been underpaid by [ * ] or more, then BIOGEN shall pay
for all costs of the inspection, otherwise the costs of the inspection shall
be borne by CVT. In all cases, BIOGEN shall pay to CVT any underpaid
compensation promptly and CVT shall promptly pay to BIOGEN any overpaid
compensation. All information and data reviewed in the inspection shall be
used only for the purpose of verifying compensation due and shall be treated
as BIOGEN Confidential Information subject to the obligations of this
Agreement. No audit by an agent of CVT shall occur more frequently than once
during any twelve (12) month period.
10.5 In each year the amount of compensation due shall be calculated
quarterly as of the end of each CALENDAR QUARTER and shall be paid quarterly
within the [ * ] days next following such date, unless such CALENDAR
QUARTER is the last CALENDAR QUARTER of the year, in which case the
compensation due shall be paid within [ * ] days next following such date.
Every such payment shall be supported by the accounting prescribed in Section
10.6 and shall be made in United States currency. Whenever for the purpose
of calculating compensation, conversion
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from any foreign currency shall be required, such conversion shall be at the
rate of exchange published in The Wall Street Journal for the last business
day of the CALENDAR QUARTER.
10.6 With each quarterly payment, BIOGEN shall deliver to CVT a full and
accurate accounting to include at least the following information:
(a) Total billings for PRODUCT subject to Royalty;
(b) Deductions applicable as provided in Section 1.17;
(c) Applicable royalty rates (including any credits as provided in
Section 10.2(b) or (d));
(d) SUBLICENSEE income and royalties thereon; and
(e) Total compensation payable to CVT.
10.7 If the transfer of or the conversion into United States Dollars of
any remittance due hereunder is not lawful or possible in any country, such
remittance shall be made by the deposit thereof in the currency of the
country to the credit and account of CVT or its nominee in any commercial
bank or trust company located in that country, prompt notice of which shall
be given to CVT. CVT shall be advised in writing in advance by BIOGEN and
provide to BIOGEN a nominee, if so desired.
10.8 Any tax required to be withheld by BIOGEN under the laws of any
foreign country for the account of CVT, shall be promptly paid by BIOGEN for
and on behalf of CVT to the appropriate governmental authority, and BIOGEN
shall use its best efforts to furnish CVT with proof of payment of such tax.
Any such tax actually paid on CVT's behalf shall be deducted from royalty
payments due CVT.
10.9 Compensation shall be due and payable for the manufacture, use and
sale of an individual PRODUCT only once with respect to the same unit of
PRODUCT irrespective of the number of patents or claims thereof which cover
the manufacture, use and sale of such PRODUCT. In no event shall
compensation shall be due and payable hereunder for the manufacture, use or
sale of an individual PRODUCT for which CVT receives compensation in the way
of royalties under the BML AGREEMENT.
SECTION 11. REPRESENTATIONS AND WARRANTIES.
11.1 Each party represents and warrants to the other party that: (i) it
is free to enter into this Agreement; (ii) in so doing, it will not violate
any other agreement to which it is a party; and (iii) it has taken all
corporate action necessary to authorize the
27.
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execution and delivery of this Agreement and the performance of its
obligations under this Agreement.
11.2 (a) Each party represents that it is not aware of any action, suit,
inquiry or investigation or any claim, demand or notice of default which if
adversely determined would affect the rights granted under this Agreement.
(b) Each party acknowledges that in entering into this Agreement
the other party has relied upon information supplied by the disclosing party,
including, in the case of information supplied by CVT, data and information
concerning CVT-124 and preclinical and clinical studies and information
related to CVT PATENT RIGHTS. Neither party is aware of any data or
information given to the other party which is untrue or inaccurate or of any
other data or information which is necessary to make the data and information
provided to the other party complete and not misleading. To the best of
CVT's knowledge, [ * ]
11.3 CVT hereby represents, warrants and covenants to BIOGEN that:
(a) It is the [ * ] under this Agreement and has the right and
has taken all necessary action to [ * ] provided that the foregoing shall
not be interpreted as a warranty of non-infringement;
(b) To the best of CVT's knowledge, CVT has disclosed to BIOGEN all
facts that CVT reasonably believes to be [ * ] known to CVT as of the
EFFECTIVE DATE;
(c) All patent applications included in CVT PATENT RIGHTS existing
as of the Effective Date are pending and have not been abandoned;
(d) CVT [ * ] to BIOGEN pursuant to this Agreement.
(e) CVT will not take any action that would in any way prevent CVT
from granting the rights granted to BIOGEN under this Agreement with respect
to CVT PATENT RIGHTS or CVT TECHNOLOGY acquired after the EFFECTIVE DATE or
which would otherwise [ * ] BIOGEN under this Agreement. Nothing herein
shall prohibit the amendment or modification of the scope of claims during
the patent prosecution process.
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(f) CVT has [ * ]
(g) CVT will take all actions required by it to maintain its rights
under the UFRFI LICENSE as in effect on the EFFECTIVE DATE, and shall
immediately send to BIOGEN any notice of default or breach received by CVT
under the UFRFI LICENSE.
(h) All employees of CVT who perform research and development for
CVT in connection with CVT's obligations under this Agreement are required to
assign their rights in any intellectual property arising from such work to
CVT.
(i) Appendix A contains a complete and accurate list of all CVT
PATENT RIGHTS in existence as of the EFFECTIVE DATE.
(j) CVT will not enforce any patent rights owned or controlled by
it to prevent the manufacture, use or sale of any PRODUCT for which BIOGEN
has a royalty obligation to CVT hereunder subject to the license granted
herein by BIOGEN or its AFFILIATES or SUBLICENSEES, or any person or entity
purchasing a PRODUCT from any of them.
11.4 CVT represents that it has not as of the EFFECTIVE DATE [ * ] the
manufacture, use or sale of PRODUCT and it is not aware of any infringement
by a THIRD PARTY of the CVT PATENT RIGHTS.
SECTION 12. INDEMNIFICATION.
12.1 INDEMNIFICATION BY BIOGEN. BIOGEN will defend, indemnify and hold
harmless CVT, its AFFILIATES and their employees, agents, officers,
shareholders and directors and each of them (the "CVT Indemnified Parties")
from and against any and all third party claims, causes of action and costs
(including reasonable attorney's fees) of any nature made or lawsuits or
other proceedings filed or otherwise instituted against the CVT Indemnified
Parties resulting from or arising out of the manufacture, use or sale of any
PRODUCT by BIOGEN, its AFFILIATES or SUBLICENSEES, other than those claims
which result or arise from breach of this Agreement by CVT or failure by CVT
to comply in any material respect with applicable laws or regulations or the
negligence or willful misconduct of CVT or any its AFFILIATES or any of their
employees, agents, officers, shareholders or directors.
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29.
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12.2 INDEMNIFICATION BY CVT. CVT will defend, indemnify and hold
harmless BIOGEN, its AFFILIATES and their employees, agents, officers,
shareholders and directors and each of them (the "BIOGEN Indemnified
Parties") from and against any and all third party claims, causes of action
and costs (including reasonable attorney's fees) of any nature made or
lawsuits or other proceedings filed or otherwise instituted against any of
the BIOGEN Indemnified Parties resulting from or arising out of breach of
this Agreement by CVT or failure of CVT to comply in any material respect
with applicable laws or regulations or the negligence or willful misconduct
of CVT or its AFFILIATES or any of their employees, agents, officers,
shareholders or directors.
12.3 CONDITIONS TO INDEMNIFICATION. A person or entity that intends to
claim indemnification under this Section (the "Indemnitee") shall promptly
notify the indemnifying party (the "Indemnitor") of any loss, claim, damage,
liability or action in respect of which the Indemnitee intends to claim such
indemnification, and the Indemnitor shall assume the defense thereof with
counsel mutually satisfactory to the Indemnitee whether or not such claim is
rightfully brought; provided, however, that an Indemnitee shall have the
right to retain its own counsel, with the fees and expenses to be paid by the
Indemnitor if Indemnitor does not assume the defense, or if representation of
such Indemnitee by the counsel retained by the Indemnitor would be
inappropriate due to actual or potential differing interests between such
Indemnitee and any other person represented by such counsel in such
proceedings. The indemnity agreement in this Section shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which
consent shall not be withheld or delayed unreasonably. The failure to
deliver notice to the Indemnitor within a reasonable time after the
commencement of any such action, only if prejudicial to its ability to defend
such action, shall relieve such Indemnitor of any liability to the Indemnitee
under this Section, but the omission so to deliver notice to the Indemnitor
will not relieve it of any liability that it may have to any Indemnitee
otherwise than under this Section. The Indemnitee under this Section, its
employees and agents, shall cooperate fully with the Indemnitor and its legal
representatives in the investigations of any action, claim or liability
covered by this indemnification.
SECTION 13. ASSIGNMENT; SUCCESSORS.
13.1 This Agreement shall not be assignable by either of the parties
without the prior written consent of the other party (which consent shall not
be unreasonably withheld), except that BIOGEN without the consent of CVT may
assign this Agreement or any of its rights and obligations hereunder to an
AFFILIATE or to an entity with which BIOGEN shall merge or consolidate or to
which BIOGEN shall sell or assign all or substantially all of its assets, and
except that CVT without the consent of BIOGEN
30.
<PAGE>
may assign this Agreement to an entity with which CVT shall merge or
consolidate or to which CVT shall sell or assign all or substantially all of
its assets.
13.2 Subject to the limitations on assignment herein, this Agreement
shall be binding upon and inure to the benefit of said successors in interest
and assigns of CVT and BIOGEN.
SECTION 14. TERMINATION.
14.1 Except as otherwise specifically provided herein and unless sooner
terminated pursuant to Sections 14.2, 14.3, 14.4 or 14.9 of this Agreement,
this Agreement and the licenses and rights granted hereunder shall remain in
full force and effect until BIOGEN's obligations to pay compensation
hereunder terminate. Upon expiration of BIOGEN's obligation to pay
compensation hereunder with respect to a specific country and specific
PRODUCT as to which BIOGEN's license is then in effect, the license granted
to BIOGEN with respect to such country and such PRODUCT pursuant to Section
2.1 shall be deemed to be fully paid and BIOGEN shall thereafter have a
royalty-free right to use the CVT PATENT RIGHTS and CVT TECHNOLOGY and to
make, use, import and sell such PRODUCT in such country.
14.2 Upon breach of any material provisions of this Agreement by either
party to this Agreement, in the event the breach is not cured within [ * ]
days after written notice to the breaching party by the other party, in
addition to any other remedy it may have, the other party at its sole option
may terminate this Agreement, provided that such other party is not then in
breach of this Agreement.
14.3 Either party to this Agreement may, upon giving notice of
termination, immediately terminate this Agreement upon receipt of notice that
the other party has become insolvent or has suspended business in all
material respects hereof, or has consented to an involuntary petition
purporting to be pursuant to any reorganization or insolvency law of any
jurisdiction, or has made an assignment for the benefit of creditors or has
applied for or consented to the appointment of a receiver or trustee for a
substantial part of its property; provided, however, that the insolvency or
bankruptcy of CVT shall not operate to terminate the licenses granted to
BIOGEN hereunder unless BIOGEN elects to terminate the Agreement as provided
herein, and BIOGEN may elect to retain its licenses as provided in 11 U.S.C.
Section 356.
14.4 In addition to the foregoing, within [ * ] days of BIOGEN's
receipt of the data from the [ * ] BIOGEN may terminate this Agreement upon
written notice in its sole discretion. At any time after [ * ] BIOGEN may
terminate this Agreement for any reason upon [ * ] days prior written
notice to CVT.
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31.
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14.5 Upon any termination of this Agreement, all licenses and rights
granted to BIOGEN shall terminate forthwith, except that BIOGEN shall be
entitled to, but shall not be obligated [ * ] covered by this Agreement
which exists as of the date of the termination, so long as BIOGEN [ * ] in
accordance with the same terms and conditions as set forth in this Agreement.
14.6 The obligations of Sections 6 and 12, as well as Sections 14.5,
14.6, 14.7, 14.8, 15.4, and 15.8 and the repayment obligation under the
Note(s) shall survive any termination of this Agreement.
14.7 In the event of any termination under Section 14.4 or 14.9 or in the
event CVT terminates this Agreement pursuant to Sections 14.2 or 14.3, BIOGEN
shall grant to CVT a non-exclusive, worldwide, royalty-bearing license under
[ * ] and [ * ] solely to make, have made, import, use and sell PRODUCTS
and shall make available to CVT copies of all documents containing or
comprising such [ * ] and [ * ] CVT shall [ * ] BIOGEN in making such
[ * ] and [ * ] available to CVT. Furthermore, in the event that, at the
time of termination under Section 14.4 or 14.9 or of termination by CVT
pursuant to Sections 14.2 or 14.3, [ * ] funding for such [ * ] unless
[ * ] Upon such termination the [ * ] shall, to the extent permissible by
law, be [ * ] To this end, BIOGEN agrees that upon such termination it
shall [ * ] relating to CVT-124 and for [ * ] by CVT hereunder. BIOGEN
shall promptly deliver copies of such filings to CVT and execute any and all
documents and instruments reasonably requested by CVT to confirm the
assignment of such filings. CVT and BIOGEN shall cooperate in the transition
of BIOGEN's regulatory filings to CVT in such a way as not to harm either
CVT's or BIOGEN's relationship with the relevant regulatory authorities. To
that end, CVT may elect to have one or more of BIOGEN's employees participate
in meetings between CVT and regulatory authorities regarding assignment of
BIOGEN's regulatory filings.
14.8 In the event that, following any termination of this Agreement, CVT,
or its permitted successor or assignee, subsequently commercializes a PRODUCT
by itself or in conjunction with a THIRD PARTY, CVT, or its permitted
successor or assignee,
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shall pay a royalty to BIOGEN on sales of PRODUCT in the TERRITORY in
accordance with the following:
(a) If the Agreement has been terminated prior to receipt by CVT of
the [ * ] milestone payable in accordance with Section 10.3(a)(i) hereof
[ * ] and the manufacture, use or sale of the commercialized PRODUCT is
covered by a VALID CLAIM of the BIOGEN CVT-124 PATENTS or includes any of the
BIOGEN CVT-124 TECHNOLOGY, CVT shall pay BIOGEN royalties on net sales of
PRODUCT and a percentage of CVT'S SUBLICENSE INCOME as follows:
(i) Royalties payable to BIOGEN shall be [ * ] and
determined based on worldwide annual net sales (calculated in accordance with
the NET SALES definition set forth in Section 1.17 hereof, and including NET
SALES under the BML AGREEMENT) in each calendar year in accordance with the
following table:
[ * ] Annual Net Sales Royalty
-----------------------------------------------
Up to [ * ] Million [ * ]
[ * ] Million to [ * ] Million [ * ]
Over [ * ] Million [ * ]
(ii) CVT shall pay to BIOGEN [ * ] of SUBLICENSE INCOME
received by it from sublicensees. Prior to calculation of Biogen's [ * ]
CVT may deduct from SUBLICENSE INCOME any royalty paid by CVT to [ * ] on
account of sales of PRODUCT in the TERRITORY in such period.
(b) If the Agreement has been terminated after receipt by CVT of
the [ * ] but prior to completion of a [ * ] of the PRODUCT, CVT shall
pay BIOGEN royalties on net sales of PRODUCT and a percentage of SUBLICENSE
INCOME as follows:
(i) Royalties payable to BIOGEN shall be [ * ] and
determined based on worldwide annual net sales (calculated in accordance with
the NET SALES definition set forth in Section 1.17 hereof, and including NET
SALES under the BML AGREEMENT) in each calendar year in accordance with the
following table:
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[ * ] Annual Net Sales Royalty
-----------------------------------------------
Up to [ * ] Million [ * ]
[ * ] Million to [ * ] Million [ * ]
Over [ * ] Million [ * ]
(ii) CVT shall pay to BIOGEN [ * ] of SUBLICENSE INCOME
received by it from sublicensees. Prior to calculation of Biogen's [ * ]
share, CVT may deduct from SUBLICENSE INCOME any royalty paid by CVT to
[ * ] on account of sales of PRODUCT in the TERRITORY in such period.
(c) If the Agreement has been terminated after completion of a
[ * ] of the PRODUCT, but prior to the availability of [ * ] CVT shall
pay BIOGEN royalties on net sales of PRODUCT and a percentage of SUBLICENSE
INCOME as follows:
(i) Royalties payable to BIOGEN shall be [ * ] and
determined based on worldwide annual net sales (calculated in accordance with
the NET SALES definition set forth in Section 1.17 hereof, and including NET
SALES under the BML AGREEMENT) in each calendar year in accordance with the
following table:
[ * ] Annual Net Sales Royalty
-----------------------------------------------
Up to [ * ] Million [ * ]
[ * ] Million to [ * ] Million [ * ]
Over [ * ] Million [ * ]
(ii) CVT shall pay to BIOGEN [ * ] of SUBLICENSE INCOME
received by it from sublicensees. Prior to calculation of Biogen's [ * ]
share, CVT may deduct from SUBLICENSE INCOME any royalty paid by CVT to
[ * ] on account of sales of PRODUCT in the TERRITORY in such period.
(d) If the Agreement has been terminated after the availability of
[ * ] of the PRODUCT, CVT shall pay BIOGEN royalties on net sales of
PRODUCT and a percentage of SUBLICENSE INCOME as follows:
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(i) Royalties payable to BIOGEN shall be [ * ] and
determined based on worldwide annual net sales (calculated in accordance with
the NET SALES definition set forth in Section 1.17 hereof, and including NET
SALES under the BML AGREEMENT) in each calendar year in accordance with the
following table:
[ * ] Annual Net Sales Royalty
-----------------------------------------------
Up to [ * ] Million [ * ]
[ * ] Million to [ * ] Million [ * ]
Over [ * ] Million [ * ]
(ii) CVT shall pay to BIOGEN [ * ] of SUBLICENSE INCOME
received by it from sublicensees. Prior to calculation of Biogen's [ * ]
share, CVT may deduct from SUBLICENSE INCOME any royalty paid by CVT to
[ * ] on account of sales of PRODUCT in the TERRITORY in such period.
(e) In the event that after the EFFECTIVE DATE CVT becomes
obligated to pay any royalties or other sums to THIRD PARTIES because the
manufacture, use or sale of PRODUCTS in the TERRITORY infringes the
intellectual property rights of such THIRD PARTIES, CVT shall be entitled to
credit [ * ] of any such obligations against Royalties due to BIOGEN
pursuant to this Section 14.8; provided, however, that in no event shall such
credit reduce Royalties payable to BIOGEN hereunder for any CALENDAR QUARTER
by more than [ * ] of the amounts otherwise due. [ * ]
(f) CVT shall keep full and accurate books of account containing
all particulars relevant to its sales of PRODUCTS that may be necessary for
the purpose of calculating all compensation payable to BIOGEN hereunder, and
shall be subject to the same provisions as are contained in Section 10.4
hereof.
(g) All payments due to BIOGEN pursuant to this Section 14.8 shall
be made in accordance with Sections 10.5, 10.6 (excluding the section
references therein), 10.7 and 10.8 hereof, in each case substituting CVT for
BIOGEN as appropriate, and vice versa.
14.9 This Agreement shall automatically terminate upon the termination of
the BML AGREEMENT.
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SECTION 15. GENERAL PROVISIONS.
15.1 Neither party shall be liable to the other party for damages or loss
occasioned by failure of performance by the defaulting party if the failure
is occasioned by war, fire, explosion, flood, strike or lockout, embargo, or
any similar cause beyond the control of the defaulting party, provided that
the party claiming this exception has exerted all reasonable efforts to avoid
or remedy such event and provided such event does not extend for more than
six (6) months.
15.2 The relationship between CVT and BIOGEN is that of independent
contractors. CVT and BIOGEN are not joint venturers, partners, principal and
agent, master and servant, employer or employee, and have no relationship
other than as independent contracting parties. CVT shall have no power to
bind or obligate BIOGEN in any manner. Likewise, BIOGEN shall have no power
to bind or obligate CVT in any manner.
15.3 This Agreement and the BML AGREEMENT set forth the entire agreement
and understanding between the parties as to the subject matter hereof and
supersede all prior agreements in this respect. There shall be no amendments
or modifications to these Agreements, except by a written document which is
signed by both parties.
15.4 This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware, U.S.A. without reference to its
choice-of-law principles.
15.5 The headings in this Agreement have been inserted for the
convenience of reference only and are not intended to limit or expand on the
meaning of the language contained in the particular or section or paragraph.
15.6 Any delay in enforcing a party's rights under this Agreement or any
waiver as to a particular default or other matter shall not constitute a
waiver of a party's right to the future enforcement of its rights under this
Agreement, excepting only as to an expressed written and signed waiver as to
a particular matter for a particular period of time.
15.7 In conducting any activities under this Agreement or in connection
with the manufacture use or sale of PRODUCT, BIOGEN shall comply with all
applicable laws and regulations including, but not limited to, all Export
Administration Regulations of the United States Department of Commerce.
15.8 NOTICES. Any notices given pursuant to this Agreement shall be in
writing and shall be deemed delivered upon the earlier of (i) when received
at the address set forth below, or (ii) three (3) business days after mailed
by certified or registered mail
36.
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postage prepaid and properly addressed, with return receipt requested, or
(iii) when sent, if sent, by facsimile, as confirmed by certified or
registered mail. Notices shall be delivered to the respective parties as
indicated:
If to CVT: CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, CA 94304
Attn: CEO
with a copy to: Cooley Godward LLP
3000 El Camino Real
Palo Alto, CA 94306
Attn: Robert L. Jones, Esq.
Deborah Marshall, Esq.
If to BIOGEN: Biogen, Inc.
14 Cambridge Center
Cambridge, MA 02142
Attn: President
with a copy to Vice President - General Counsel
15.9 This Agreement may be executed in any number of separate
counterparts, each of which shall be deemed to be an original, but which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
CV THERAPEUTICS, INC. BIOGEN, INC.
By: /s/ Louis Lange By: /s/ James R. Tobin
-------------------------------- --------------------------------
Name: Louis Lange Name: James R. Tobin
------------------------------ ------------------------------
Title: CEO Title: President and CEO
----------------------------- -----------------------------
37.
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APPENDIX A
PATENT RIGHTS
[SEE ATTACHED]
<PAGE>
U. S. PATENTS
<TABLE>
<CAPTION>
Docket No./ Issue Date/ Patent
Patent No. Serial No. Title Inventor(s) Date File Expires
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
[ * ]
</TABLE>
[ * ]
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U.S. PENDING PATENT APPLICATIONS
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[ * ]
</TABLE>
[ * ]
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U.S. PENDING PATENT APPLICATIONS (CONT'D)
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[ * ]
</TABLE>
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[ * ]
3
<PAGE>
U.S. PENDING PATENT APPLICATIONS (CONT'D)
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[ * ]
</TABLE>
[ * ]
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<PAGE>
U.S. PENDING PATENT APPLICATIONS (CONT'D)
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[ * ]
</TABLE>
[ * ]
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FOREIGN PATENT APPLICATIONS
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[ * ]
</TABLE>
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<PAGE>
FOREIGN PATENT APPLICATIONS (CONT'D)
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[ * ]
</TABLE>
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APPENDIX B
CLINICAL TRANSITION
This Appendix shall govern the transition of the conduct of clinical trials
for CVT-124 from CVT to BIOGEN. In the event of any inconsistencies between
this Appendix and the provisions of the Agreement, the provisions of this
Appendix shall govern.
A. [ * ] In the interest of avoiding any
delay in the commencement of such study, BIOGEN and CVT agree as follows:
CVT has entered into contracts with [ * ] and a [ * ] prior to the
EFFECTIVE DATE for the conduct of CVT2123, true and correct copies of which
have been provided to BIOGEN. CVT is in the process of negotiating the
remaining contracts necessary for the conduct of CVT2123, but shall not enter
into any such contracts without the prior approval of BIOGEN. Promptly after
the EFFECTIVE DATE, BIOGEN and CVT shall enter into a contract pursuant to
which CVT agrees INTER ALIA to manage the study pursuant to the direction of,
and for the sole and exclusive benefit of, BIOGEN and agrees to assign
exclusively to BIOGEN all rights and data from the study, and BIOGEN agrees
to reimburse CVT for [ * ] Such amounts shall be paid net thirty (30) days
on CVT's invoices submitted at the end of each quarter. Said agreement shall
also provide for [ * ] as is necessary to comply with applicable law for so
long as [ * ] In no event shall [ * ]
Notwithstanding the provisions of Section 4.1 of the Agreement, CVT shall
directly supply all materials needs for CVT2123. Delivery of any inventory
of CVT-124 not needed for CVT2123 shall be made to BIOGEN in accordance with
Section 4.1.
B. ALL OTHER CLINICAL STUDIES. Notwithstanding Section 4.3 of the
Agreement, CVT shall not enter into any contracts, or make any commitments to
any THIRD PARTIES, with respect to any other clinical studies. In the event
that CVT does enter into any such contracts, or make any such commitments,
BIOGEN shall not be bound by such contracts or commitments, and all
responsibility therefor shall remain with CVT.
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The provisions of the second sentence of Section 4.3 of the Agreement are
solely for the benefit of BIOGEN and shall not confer upon CVT any rights
with respect the design, conduct or results of any clinical studies.
<PAGE>
APPENDIX C
CVT-124 INVENTORY
[See attached]
<PAGE>
CVT-124 INVENTORY
- ---------------------------------------------------------------------
PRODUCT CURRENT STOCK
- ---------------------------------------------------------------------
[ * ]
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APPENDIX D
PRESS RELEASE
[See attached]
<PAGE>
CONTACT
Kathy Stafford
Chief Financial Officer
CV Therapeutics
415-812-9507
Biogen Media Contact:
Kathryn R. Bloom
Director of Communications
Biogen, Inc.
617-679-2851
Biogen Investment Community Contact:
Richard E.N. Lundberg
Manager, Investor Relations
Biogen, Inc.6179-679-2822
BIOGEN AND CV THERAPEUTICS ANNOUNCE COLLABORATION ON CVT-124
FOR CONGESTIVE HEART FAILURE
CAMBRIDGE, MA (March 10, 1997) -- Biogen, Inc. (NASDAQ/BGEN) and CV
Therapeutics (NASDAQ/CVTX) today announced that they have signed an agreement
to collaborate on the development of CVT-124, a novel therapeutic for the
treatment of edema associated with Congestive Heart Failure (CHF) that is
expected to enter a multi-center Phase II clinical trial within the next
month.
Under the terms of the agreement, Biogen and its wholly owned subsidiary,
Biotech Manufacturing Limited, will receive exclusive worldwide rights to
develop and sell CVT-124. Biogen and CV Therapeutics will participate in
developing the drug, but Biogen will pay all costs of commercializing the
product. CV Therapeutics will receive from Biogen upfront payments totaling
$16 million, including a $5 million upfront cash payment, a $7 million equity
investment of CV Therapeutics stock at $10.45 per share, advance funding of a
development milestone and partial access to a line of credit. In addition,
Biogen will pay CV Therapeutics significant milestone payments and royalties
on clinical progress and product sales. Further details of the agreement
were not announced.
Congestive Heart Failure is a chronic, progressive disease that affects
approximately four-to-five million people in the United States. Its
prevalence is increasing at 10 percent per year, primarily
<PAGE>
due to the aging population as well as improved survival in heart disease
patients. Patients with CHF experience both a chronic course of the disease,
as well as acute episodes that, in many cases, require hospitalization.
Edema, or fluid retention in the lungs and extremities, is a significant
symptom of the disease, leading to increased morbidity and need for
hospitalization. In its most severe form, CHF results in a 50 percent
one-year mortality rate.
CVT-124, a highly selective adenosine A(1)-receptor antagonist, could
represent a novel therapy for the treatment of edema associated with CHF.
Proof of this new mechanism of action has been demonstrated both in animal
models and in a clinical Phase I study completed in 1996. This new approach
could be a significant advance because current therapies can lead to clinical
resistance and unwanted side effects, such as potassium loss and impairment
of kidney function. Because of some of its potential properties, CVT-124 may
be particularly useful in CHF patients who are resistant to current therapies
and/or have renal impairment.
Jim Tobin, Biogen's President and Chief Executive Officer, said, "Developing
Biogen's pipeline is a major strategic imperative for the Company, and we are
pleased to be collaborating with CV Therapeutics to help meet this objective.
CVT-124 represents a very promising commercial opportunity to enter an
underserved market with a late-stage therapeutic. We believe CVT-124, with
its novel mechanism of action, may have a major impact in the treatment and
management of Congestive Heart Failure. It is a very attractive fit with
Biogen's strategy of developing therapeutics for large underserved markets,
such as neurological, cardiovascular and renal diseases."
Lou Lange, Chairman and Chief Executive Officer of CV Therapeutics, said, "In
Biogen, we believe we have found partner for CVT-124 who can bring the
product to market quickly and with whom we can work closely on development of
this promising compound. Biogen's outstanding performance in commercializing
AVONEX-TM- gives us confidence that they will maximize the potential of
CVT-124."
In addition to historical information, this press release contains
forward-looking statements that involve risks and uncertainties that could
cause actual results to differ materially from those reflected in such
forward-looking statements. Reference is made in particular to
forward-looking statements regarding the timing of clinical trials, the
potential results of drug development and the commercial opportunity for
CVT-124. Drug development involves a high degree of risk. There are many
factors which could cause actual results to differ from the Company's current
expectations, including the Company's ability to demonstrate that CVT-124 is
safe and effective at each stage of the clinical trial process; to meet
applicable regulatory standards and receive required regulatory approval; to
obtain and maintain necessary patents and licenses; to be capable of
producing the product in commercial quantities at reasonable costs and to
compete successfully against other products.
Biogen, Inc., headquartered in Cambridge, MA, is a biopharmaceutical company
principally engaged in discovering and developing drugs for human healthcare
through genetic engineering. The Company's revenues are generated from U.S.
sales of AVONEX-TM- (Interferon beta-1a) for treatment of relapsing forms of
multiple sclerosis and from the worldwide sales by licenses of a
<PAGE>
number of products, including alpha interferon and hepatitis B vaccines and
diagnostic products. Biogen is focused primarily on developing and testing
novel products for multiple sclerosis, inflammatory, respiratory and kidney
diseases and certain viruses and cancers. For copies of press releases and
additional information about the Company, please consult Biogen's Homepage on
the World Wide Web at http://www.biogen.com.
CV Therapeutics, headquartered in Palo Alto, CA, is a biopharmaceutical
company focused exclusively on the application of molecular cardiology to the
discovery, development and commercialization of novel, small molecule drugs
for the treatment of cardiovascular diseases.
# # #
030796
s.97draft.cvt
<PAGE>
APPENDIX E
RESEARCH PLAN - PHASE 1
[SEE ATTACHED]
<PAGE>
RESEARCH PROGRAM
OBJECTIVE
[ * ]
STRUCTURE OF COLLABORATION
[ * ]
PROGRAM PRIORITIES
[ * ]
APPROACH
[ * ]
RESOURCE ALLOCATION AT [ * ] PER FULL TIME EQUIVALENT (FTE)
[ * ]
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* Confidential treatment requested.
<PAGE>
[LOGO] THERAPEUTICS
RESEARCH
<TABLE>
<S> <C> <C>
[ * ]
</TABLE>
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* Confidential treatment requested.
<PAGE>
APPENDIX F
ARBITRATION PROCEDURE
In the event of a disagreement between the parties under Section 10.2(e) of
the Agreement, which disagreement cannot be amicably resolved by the good
faith efforts of the parties pursuant to such Section 10.2(e), then such
dispute shall be resolved by binding Alternative Dispute Resolution ("ADR")
in the manner described below:
(a) If a party intends to begin the ADR to resolve the disagreement,
such party shall provide written notice to the other party informing the
other party of such intention. Within 5 business days following the receipt
of the original ADR notice ("Notice Date") a neutral shall be selected by the
then President of the American Arbitration Association ("AAA") or by such
other individual as the parties may agree in good faith. The neutral
selected shall have experience in the biotechnology and/or pharmaceutical
industry and shall not be an employee, director or shareholder of either a
party or of an AFFILIATE of either party.
Each party shall have ten (10) business days from the date the neutral is
selected to object in good faith to the selection of that person. If either
party makes such an objection, the then President of AAA shall as soon as
possible thereafter, elect another neutral under the same conditions set
forth above. This second selection shall be final.
(b) No later than (90) business days after selection, the neutral shall
hold a hearing to resolve the issue.
(i) Each party shall have the right to be represented by counsel at
the hearing.
(ii) The hearing shall be held at such place as agreed upon by the
parties or if they are unable to agree at a place designated by the
neutral.
(c) The ADR proceeding shall be confidential and the neutral shall issue
appropriate protective orders to safeguard each party's Confidential
Information. Except as required by law, no party shall make (or instruct the
neutral to make) any public announcement with respect to the proceedings or
decision of the neutral without the prior written consent of each other
party. The existence of the dispute submitted to ADR, and the award of the
neutral, shall be kept in confidence by the parties and the neutral, except
as required in connection with the enforcement of such award or as otherwise
required by applicable law.
<PAGE>
(d) It is the intention of the parties that discovery, although
permitted as described herein, will be extremely limited except in
exceptional circumstances. The neutral shall permit such limited discovery
necessary for an understanding of any legitimate issue raised in the ADR,
including the production of documents. Each party shall be permitted but not
required to take the deposition of not more than five (5) persons, each such
deposition not to exceed six (6) hours in length. If the neutral believes
that exceptional circumstances exist, and additional discovery is necessary
for a full and fair resolution of the issue, the neutral may order such
discovery as the neutral deems necessary. At the hearing the parties may
present testimony (either by live witness or deposition) and documentary
evidence. The neutral shall have sole discretion with regard to the
admissibility of any evidence and all other matters relating to the conduct
of the hearing.
(e) Each party shall be entitled to no more than four (4) hours of
hearing to present testimony or documentary evidence, unless such time period
is extended by mutual agreement between the parties or is otherwise allowed
by the neutral. The testimony of both parties shall be presented during the
same calendar day. Such time limitation shall include any direct, cross or
rebuttal testimony, but such time limitation shall include any direct, cross
or rebuttal testimony, but such time limitation shall only be charged against
the party conducting such direct, cross or rebuttal testimony. It shall be
the responsibility of the neutral to determine whether the parties have had
the presentation time to which they are entitled.
(f) At least fifteen (15) business days prior to the date set for the
hearing, each party shall submit to each other party and the neutral a list
of all documents on which such party intends to rely in any oral or written
presentation to the neutral and a list of all witnesses, if any, such party
intends to call at such hearing and a brief summary of each witness'
testimony.
At least five (5) business days prior to the hearing, each party must
submit to the neutral and serve on each other party a proposed ruling on the
issue to be resolved. Such writing shall be limited to representing the
proposed ruling, shall contain no argument or analysis of the facts or
issues, and shall be limited to not more than ten (10) pages, unless such
writing is extended by mutual agreement between the parties or is otherwise
allowed by the neutral.
(g) Not more than fifteen (15) business days following the close of
hearings, the parties may each submit post hearing briefs to the neutral
addressing the evidence and issues to be resolved. Such post hearing briefs
shall not be more than fifty (50) pages, unless such writing is extended by
mutual agreement between the parties or is other wise allowed by the neutral.
<PAGE>
(h) The neutral shall rule on the disputed issue after the hearing as
expeditiously as possible, but in no event more than forty-five (45) days
after the close of the hearings. Such ruling shall adopt in its entirety the
proposed ruling of one of the parties. The neutral shall, in rendering his
decision, apply the substantive law of the State of Delaware, without giving
effect to its principles of conflicts of law, and without giving effect to
any rules or laws relating to arbitration.
(i) Any judgment upon the award rendered by the neutral may be entered
in any court having jurisdiction thereof. The decision rendered in any such
ADR shall be final and not appealable, except in cases of fraud or bad faith
on the part of the neutral or any party to the ADR proceeding in connection
with the conduct of such proceedings, and shall be enforceable in any court
of competent jurisdiction. No punitive damages shall be recoverable by
either party in such a proceeding.
(j) Each party shall pay its own costs (including, without limitation,
attorneys fees) and expenses in connection with such ADR.
(k) In the event either party contends that there has been fraud or bad
faith by the other party or in connection with the conduct of any ADR, a
second ADR shall be held to determine whether there has been fraud or bad
faith. If, as a result of the second ADR, it is determined that there has
been fraud or bad faith, the decision affected by such fraud or bad faith
shall be vacated and another ADR shall be held to resolve the original
dispute.
<PAGE>
Exhibit 10.40
Confidential treatment has been requested for portions of this document.
Brackets indicate portions of text that have been omitted. A separate filing
of such omitted text has been made with the Commission as part of the
Company's application for confidential treatment.
RESEARCH COLLABORATION AND LICENSE AGREEMENT
(EUROPE)
This Agreement is made and entered into this 7th day of March, 1997 by
and between BIOTECH MANUFACTURING LTD. (hereinafter referred to as "BML"), a
wholly-owned subsidiary of Biogen, Inc. ("BIOGEN"), located at St. Paul's
Gate, New Street, St. Helier, Jersey JE48Z, Channel Islands, and CV
THERAPEUTICS, INC., a Delaware corporation, located at 3172 Porter Drive,
Palo Alto, CA 94304 (hereinafter referred to as "CVT").
WHEREAS, BML is a biopharmaceutical company which develops, manufactures,
markets and sells pharmaceutical products for human healthcare; and
WHEREAS, CVT is the owner and/or exclusive licensee of certain technology,
patent rights and other proprietary know-how related to PRODUCTS as hereinafter
defined; and
WHEREAS, BML desires to obtain an exclusive right and license in and to
such technology, patent rights and proprietary know-how in the TERRITORY as
hereinafter defined; and
WHEREAS, BML desires to support additional research related to PRODUCTS;
and
WHEREAS, CVT is willing to grant the exclusive right and license desired by
BML and to participate in the conduct of the research supported by BML; and
WHEREAS, CVT is granting an exclusive right and license in and to such
technology, patent rights and proprietary know-how outside the TERRITORY to
BIOGEN pursuant to a Research Collaboration and License Agreement (U.S.) of even
date herewith (the "BIOGEN AGREEMENT") .
NOW, THEREFORE, in consideration of the mutual promises and other good and
valuable consideration, the parties agree as follows:
SECTION 1. DEFINITIONS.
The terms used in this Agreement have the following meaning:
1.1 The term "Adenosine A(1) Antagonist" shall mean a molecule that
[ * ]
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* Confidential treatment requested.
1.
<PAGE>
compound being referred to herein as a "Test Compound"), the [ * ] and such
Test Compound meets the following specifications measured concurrently in a
validated in vitro assay:
(I) [ * ]
(II) [ * ]
Notwithstanding the foregoing, if CVT is able to establish in a model
reasonably acceptable to BIOGEN that the principal activity of a Test
Compound IN VIVO is as an [ * ] such Test Compound shall be excluded from
the definition of Adenosine A(1) Antagonists.
1.2 The term "AFFILIATE" as applied to either party shall mean any
company or other legal entity other than the party in question, in whatever
country organized, controlling, controlled by or under common control with
that party. The term "control" means ownership or control, directly or
indirectly, of at least fifty percent (50%) of the outstanding stock or
voting rights or the right to elect or appoint a majority of the directors.
1.3 The term "first AGREEMENT YEAR" shall mean the twelve month period
commencing on the EFFECTIVE DATE. With respect to any year after the first
AGREEMENT YEAR, the term "AGREEMENT YEAR" shall mean the twelve month period
commencing upon an anniversary of the Effective Date.
1.4 The term "BIOGEN CVT-124 TECHNOLOGY" shall mean any information,
data (including all chemical, pharmacological, toxicological, clinical,
assay, manufacturing and control information, data and test results,
including negative results), ideas, concepts, formulas, trade secrets,
methods, procedures, designs, materials, compositions, plans, diagrams,
applications, specifications, techniques, records, practices, processes,
research, know-how, inventions, discoveries and the like first conceived and
first reduced to practice by BIOGEN or its AFFILIATES in the performance of
any of its work under or pursuant to the BIOGEN AGREEMENT which are necessary
or useful for the manufacture or use of CVT-124 or other PRODUCTS.
1.5 The term "BIOGEN CVT-124 PATENTS" shall mean all patents and pending
patent applications (which for purposes of this Agreement shall be deemed to
include certificates of invention and applications for certificates of
invention and priority rights, provisional patent applications, statutory
invention
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* Confidential treatment requested.
2.
<PAGE>
registrations, applications for statutory invention registrations, and any
foreign equivalents thereof) owned by BIOGEN or its AFFILIATES throughout the
TERRITORY which claim the BIOGEN CVT-124 TECHNOLOGY or any part thereof,
including any provisional applications, substitutions, extensions, reissues,
reexaminations, renewals, continuations, continuations-in-part, divisionals
and supplemental protection certificates.
1.6 The term "CALENDAR QUARTER" shall mean the period of three (3)
consecutive calendar months ending on March 31, June 30, September 30 or
December 31, as the case may be.
1.7 The term "CVT-124" shall mean the [ * ] of epoxy norbornyl
xanthine, as defined as CVT-124 in the IND filed on September 20, 1995 and as
further described in U.S. Patent Application Serial No. [ * ].
1.8 The term "CVT PATENT RIGHT(S)" shall mean all patents and pending
patent applications (which for purposes of this Agreement shall be deemed to
include certificates of invention and applications for certificates of
invention and priority rights, provisional patent applications, statutory
invention registrations, applications for statutory invention registrations,
and any foreign equivalents thereof) throughout the TERRITORY that claim CVT
TECHNOLOGY or any part thereof, including any provisional applications,
substitutions, extensions, reissues, reexaminations, renewals, continuations,
continuations-in-part, divisionals and supplemental protection certificates,
which CVT owns (in whole or in part) or to which CVT otherwise has a
transferable right as of the EFFECTIVE DATE or at any time during the term of
this Agreement, including but not limited to CVT's rights in any RESEARCH
PATENT RIGHTS and CVT's rights obtained under the UFRFI LICENSE. CVT PATENT
RIGHTS as of the EFFECTIVE DATE are set forth in APPENDIX A hereto.
1.9 "CVT TECHNOLOGY" shall mean any information, data (including all
chemical, pharmacological, toxicological, clinical, assay, manufacturing and
control information, data and test results, including negative results),
ideas, concepts, formulas, trade secrets, methods, procedures, designs,
materials, compositions, plans, diagrams, applications, specifications,
techniques, records, practices, processes, research, know-how, inventions,
discoveries and the like which CVT owns (in whole or in part) or to which CVT
otherwise has a transferable right as of the EFFECTIVE DATE or at any time
during the term of this Agreement, which relate to CVT-124 or any other
Adenosine A(1) Antagonist, including but not limited to CVT's rights in the
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* Confidential treatment requested.
3.
<PAGE>
RESEARCH INFORMATION, the RESEARCH MATERIALS and the RESEARCH INVENTIONS, and
CVT's rights under the UFRFI LICENSE.
1.10 The term "EFFECTIVE DATE" shall mean March 10, 1997.
1.11 The term "FTE" shall mean the equivalent of a full year of
effort on a full time basis of a scientist or other professional possessing
skills and experience necessary to carry out applicable tasks under the
RESEARCH PROGRAM.
1.12 The term "FIRST COMMERCIAL SALE" shall mean the initial
transfer by BML or any of its AFFILIATES or SUBLICENSEES of a PRODUCT to a
THIRD PARTY in exchange for consideration, following marketing approval by
the appropriate governmental agency for the country in which the transfer is
made.
1.13 The term "MAA" shall mean an application for regulatory
approval to sell PRODUCT in the European Union and similar in purpose to an
NDA in the United States.
1.14 The term "MAJOR MARKET(s)" shall mean any of the Japan,
Germany, France and/or the United Kingdom.
1.15 The term "NDA" shall mean a New Drug Application or Product
License Application or equivalent filing filed for PRODUCT with the U.S. Food
and Drug Administration ("FDA").
1.16 The term "NDR" shall mean an application for regulatory
approval to sell PRODUCT in Japan and similar in purpose to an NDA in the
United States.
1.17 The term "NET SALES" shall mean [ * ] BML and
its AFFILIATES with respect to the sale of PRODUCT, less:
(i) trade, quantity, cash or other discounts [ * ] allowed
not exceeding amounts customary in the trade, including, without limitation,
governmental program discounts and rebates (e.g., Medicaid, Medicare, VA,
etc.)
(ii) sales taxes, tariff duties and/or use taxes directly
imposed on and with reference to particular sales;
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* Confidential treatment requested.
4.
<PAGE>
(iii) packing, transportation and insurance prepaid or allowed;
and
(iv) amounts allowed or credited on rejects, returns or
retroactive price reductions.
A sale or transfer of PRODUCT by BML to an AFFILIATE for re-sale of PRODUCT
by such AFFILIATE shall not be considered a sale for the purpose of this
provision but the resale of PRODUCT by such AFFILIATE to a THIRD PARTY shall
be a sale for such purposes. A "sale" shall mean a transfer or other
disposition for consideration, but shall not include transfers or
dispositions at no cost for pre-clinical, clinical, regulatory or
governmental purposes or disposition of PRODUCT at no cost for promotional
purposes.
In the event that PRODUCT is sold in the form of a combination product
containing one or more active ingredients or components in addition to
CVT-124 or, if applicable, another Adenosine A(1) Antagonist, NET SALES shall
be determined by multiplying NET SALES of the combination product (as defined
by reference to the standard NET SALES definition) during the applicable
payment period by the fraction A/A+B where A is the average sale price of
PRODUCT when sold separately in finished form and B is the average sale price
of the other active ingredients or components when sold separately in
finished form in each case during the applicable payment period in the
country in which the sale of the combination product was made, or if sales of
both the PRODUCT and the other active ingredients or components did not occur
in such period, then in the most recent payment period in which sales of both
occurred. In the event that such average sale price cannot be determined for
both PRODUCT and all other active ingredients or components included in the
combination product, NET SALES for purposes of determining payments under
this Agreement shall be calculated by multiplying the NET SALES of the
combination product by the fraction C/C+D where C is the fair market value of
the CVT-124 (or other Adenosine A(1) Antagonist) contribution to the
combination and D is the sum of the fair market values of all other active
components or ingredients included in the combination product, in each case,
as determined by BML in good faith.
1.18 The term "OPERATING COMMITTEE" shall have the meaning set forth
in Section 7.1 of the BIOGEN AGREEMENT.
1.19 The term "PHASE II PERFORMANCE ASSESSMENT STUDY" shall have the
meaning set forth in the BIOGEN AGREEMENT.
5.
<PAGE>
1.20 The term "PHASE III TRIAL" shall mean a randomized clinical
trial designed to show efficacy and safety of a PRODUCT and intended to be
submitted as part of the application for marketing approval of such PRODUCT.
1.21 The term "PRODUCT" shall mean any article, composition or
material that comprises, contains or is CVT-124 or another Adenosine A(1)
Antagonist, the manufacture, import, use or sale of which is covered by a
VALID CLAIM of the CVT PATENT RIGHTS or includes any of the CVT TECHNOLOGY.
1.22 The term "RESEARCH INFORMATION" shall mean any data, results,
formulas, process information or other information which results from the
RESEARCH PROGRAM.
1.23 The term "RESEARCH INVENTION(S)" shall mean any invention,
know-how, method, process, use, article of manufacture, or composition of
matter conceived or first actually or constructively reduced to practice as
part of the RESEARCH PROGRAM or which results from the RESEARCH PROGRAM.
1.24 The term "RESEARCH MATERIAL" shall mean any material, reagent
or substance which results from the RESEARCH PROGRAM.
1.25 The term "RESEARCH PATENT RIGHT(S)" shall mean all patents and
patent applications throughout the TERRITORY that claim RESEARCH INFORMATION,
RESEARCH INVENTIONS or RESEARCH MATERIAL or any part thereof, including any
provisional applications, substitutions, extensions, reissues,
reexaminations, renewals, continuations, continuations-in-part, divisionals
and supplemental protection certificates, statutory invention registrations,
applications for statutory invention registrations, and any foreign
equivalents thereof.
1.26 The term "RESEARCH PLAN" shall mean the written descriptions of
the research and development to be performed by CVT as part of the RESEARCH
PROGRAM for the first AGREEMENT YEAR and for each subsequent AGREEMENT YEAR
of the RESEARCH PROGRAM as approved in accordance with Section 8.2 of the
BIOGEN AGREEMENT.
1.27 The term "RESEARCH PROGRAM" shall have the meaning set forth in
Section 8.1 of the BIOGEN AGREEMENT.
1.28 The term "SUBLICENSE INCOME" shall mean any royalties or other
consideration received by a party hereto from any SUBLICENSEES in
6.
<PAGE>
respect of sales of PRODUCTS, excluding amounts paid to such party for
research or other services conducted by such party, for clinical trials, for
purchases of PRODUCTS or of other goods or products at fair market value, or
for equity investments at fair market value in such party.
1.29 The term "SUBLICENSEE" shall mean any non-AFFILIATE third party
expressly licensed by BML to make, have made or formulate any PRODUCT and to
sell the PRODUCT made or formulated. A SUBLICENSEE shall not include a
distributor or other party licensed to sell PRODUCT but not to make, have
made or formulate PRODUCT.
1.30 The term "TERRITORY" shall mean all countries and territories
of the world except: the United States, including Puerto Rico, Guam and all
other territories of the United States, and all other countries and
territories in North America and South America.
1.31 The term "THIRD PARTY(IES)" shall mean a person or entity who
or which is neither a party hereto nor an AFFILIATE or SUBLICENSEE of a party
hereto.
1.32 The term "UFRFI LICENSE" shall mean a certain License Agreement
dated as of June 27, 1994 by and between CVT and University of Florida
Research Foundation, Inc. ("UFRFI"), as amended.
1.33 The term "VALID CLAIM" shall mean (i) a claim of a pending
patent application which claim shall not have been canceled, withdrawn,
abandoned or rejected by an administrative agency from which no appeal can be
taken and which application shall not have been pending for more than
[ * ] or (ii) a claim of an issued and unexpired patent which has not
lapsed or become abandoned or been declared invalid or unenforceable by a
court of competent jurisdiction or an administrative agency from which no
appeal can be or is taken.
1.34 The use herein of the plural shall include the singular, and
the use of the masculine shall include the feminine.
SECTION 2. GRANT AND OTHER RIGHTS.
2.1 CVT hereby grants to BML and BML hereby accepts from CVT an
exclusive, royalty-bearing right and license under the CVT TECHNOLOGY and CVT
PATENT RIGHTS to make, have made, import, use, offer for sale and sell
PRODUCTS in the TERRITORY. CVT shall be responsible for paying any
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* Confidential treatment requested.
7.
<PAGE>
royalty obligations which CVT may have to any THIRD PARTY under agreements
between CVT and such THIRD PARTIES in effect as of the EFFECTIVE DATE arising
from the exercise of the license grant set forth above.
2.2 (a) AFFILIATES. BML shall have the full and unrestricted right to
extend the license granted to it herein to AFFILIATES. BML shall advise CVT of
any such extension to AFFILIATES.
(b) SUBLICENSES. BML shall have the right to grant sublicenses in
the TERRITORY under the license granted to it herein in accordance with the
following:
(i) In [ * ]
(ii) In [ * ] and in [ * ] BML shall have the full and
unrestricted right to grant sublicenses at any time after the [ * ] for
such PRODUCT, but may not grant a sublicense prior to that time.
BML agrees to forward to CVT a copy of any sublicense agreements within
thirty (30) days of the execution of such sublicense agreements and further
agrees to forward to CVT annually a copy of such reports received by BML from
its sublicensees during the preceding twelve (12) month period under the
sublicenses as shall be pertinent to a royalty accounting under said
sublicense agreements.
2.3 To the extent CVT PATENT RIGHTS or CVT TECHNOLOGY licensed to BML
under this Agreement are rights which CVT has licensed from UFRFI under the
UFRFI LICENSE, BML and CVT understand and agree that the rights licensed to
BML by CVT are subject to the terms of the UFRFI LICENSE.
SECTION 3. INTENTIONALLY OMITTED
SECTION 4. MANUFACTURE AND SUPPLY OF PRODUCT
4.1 PRODUCT SUPPLY. BML and its AFFILIATES shall be responsible for the
manufacture and supply of PRODUCT hereunder for clinical trials and
commercial sales in the TERRITORY.
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* Confidential treatment requested.
8.
<PAGE>
SECTION 5. DUE DILIGENCE.
5.1 BML shall use commercially reasonable efforts to market a PRODUCT
in the TERRITORY.
SECTION 6. CONFIDENTIALITY AND INFORMATION.
6.1 During the term of this Agreement, it is contemplated that each
party may disclose to the other, proprietary and confidential technology,
inventions, technical information, material, reagents, biological materials
and the like which are owned or controlled by the party providing such
information or which that party is obligated to maintain in confidence
("Confidential Information"). Each party shall have the right to refuse to
accept the other party's Confidential Information. Each party agrees not to
disclose and to maintain the Confidential Information of the other party in
strict confidence, to cause all of its agents, representatives and employees
to maintain the disclosing party's Confidential Information in confidence and
not to disclose any such Confidential Information to a third party without
the prior written consent of the disclosing party and not to use such
Confidential Information for any purpose other than as licensed under this
Agreement.
6.2 The obligations of confidentiality will not apply to information
which:
(i) was known to the receiving party or generally known to the
public prior to its disclosure hereunder through no fault of the receiving
party or any agent, representative or employee thereof; or
(ii) subsequently becomes known to the public by some means other
than a breach of this Agreement, including publication and/or laying open to
inspection of any patent applications or patents;
(iii) is subsequently disclosed to the receiving party by a third
party having a lawful right to make such disclosure and who is not under an
obligation of confidentiality to the disclosing party;
(iv) is approved for release by the parties.
6.3 The obligations of Section 6.1 notwithstanding, BML may disclose
the Confidential Information of CVT licensed to BML hereunder (a) to
SUBLICENSEES and (b) to THIRD PARTIES who (i) need to know the same in order
to secure regulatory approval for the sale of PRODUCT, (ii) who need to know
the same in order to work towards the commercial development of
9.
<PAGE>
PRODUCT or to manufacture PRODUCT, or (iii) who are approved by CVT, provided
that such parties, other than regulatory authorities, are bound by
obligations of confidentiality and non-use at least as stringent as those set
forth herein. Further, either party may disclose Confidential Information of
the other party to the extent such disclosure is required by law, rule,
regulation or bona fide legal process to be disclosed, provided that the
receiving party takes all reasonable steps to restrict and maintain
confidentiality of such disclosure and provides reasonable notice to the
disclosing party.
6.4 CVT shall provide to BML, or if required to the applicable
regulatory authority, all documents and information, to the extent in CVT's
possession or otherwise reasonably accessible to CVT with the right to
disclose, requested by the regulatory authority or reasonably requested by
BML in support of BML's regulatory submissions. Copies of all documents
provided directly to a regulatory authority shall be provided to BML in
advance, if practicable, or otherwise within [ * ] of delivery to the
regulatory authority. In addition, CVT shall provide to BML any information,
to the extent in CVT's possession or otherwise reasonably accessible to CVT
with the right to disclose, related to PRODUCT that is (a) reasonably
required in support of BML's applications to patent offices and such
governmental offices as regulate the price of PRODUCT and/or (b) reasonably
required to support a legal action by BML against a THIRD PARTY.
6.5 Neither party may disclose the existence or terms of this
Agreement without the prior written consent of the other party; provided,
however, that either party may make such disclosure to the extent required by
law. The parties have approved an initial press release as set forth in
APPENDIX D attached hereto. Once any written statement is approved for
disclosure by both parties, either party may make subsequent public
disclosure of the contents of such statement without the further approval of
the other party.
SECTION 7. INTENTIONALLY OMITTED
SECTION 8. INTENTIONALLY OMITTED
SECTION 9. INTENTIONALLY OMITTED
SECTION 10. COMPENSATION.
10.1 (a) BML shall make an equity investment in CVT upon execution of
this Agreement in the amount of Five Million Dollars ($5,000,000)
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in accordance with the terms of a stock purchase agreement of even date
herewith (the "Stock Purchase Agreement").
(b) [ * ] BML shall make the following additional equity
investments in CVT during the Term of this Agreement:
(i) Upon execution of this Agreement, BML shall make an
equity investment in CVT in the amount of Two Million Dollars ($2,000,000) in
accordance with the terms of the Stock Purchase Agreement.
(ii) Upon [ * ] BML shall make an equity investment in
CVT in the amount of an additional [ * ] in accordance with the terms of
the Stock Purchase Agreement, unless either CVT or BIOGEN has delivered
notice of termination of the RESEARCH PROGRAM prior to such date in
accordance with Section 8.5 of the BIOGEN AGREEMENT.
(iii) Upon [ * ] BML shall make an equity investment in
CVT in the amount of an additional [ * ] in accordance with the terms of
the Stock Purchase Agreement, unless either CVT or BIOGEN has delivered
notice of termination of the RESEARCH PROGRAM prior to such date in
accordance with Section 8.5 of the BIOGEN AGREEMENT.
(c) Notwithstanding any contrary provision of this Agreement or
of the Stock Purchase Agreement, in no event shall BML be required to make
any equity investment in CVT which would result in BML and its AFFILIATES
owning greater than 19.9% of CVT's shares of Common Stock outstanding,
after such investment.
10.2 (a) BML shall pay to CVT royalties on NET SALES of PRODUCTS in
the TERRITORY ("Royalties") as follows:
(i) Royalties payable to CVT on NET SALES of PRODUCTS in
the TERRITORY shall be [ * ] and determined based on worldwide annual
NET SALES (i.e., including NET SALES of PRODUCTS under the BIOGEN
AGREEMENT) in each calendar year in accordance with the following table:
[ * ] Annual Net Sales Royalty
------------------------------------------------
Up to [ * ] Million [ * ]
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[ * ] Million to [ * ] Million [ * ]
Over [ * ] Million [ * ]
(ii) Notwithstanding subparagraph (i) above, in the event
there are two consecutive twelve month periods in which worldwide NET SALES
exceed [ * ] Million but are less than [ * ] Million, then, unless
subparagraph (iii) applies, Royalties shall thereafter be determined based on
annual worldwide NET SALES in any subsequent calendar year in accordance with
the following table:
[ * ] Annual Net Sales Royalty
-----------------------------------------------
Up to [ * ] Million [ * ]
[ * ] Million to [ * ] Million [ * ]
(iii) Notwithstanding subparagraph (ii), if at any time
after paragraph (ii) applies worldwide NET SALES exceed [ * ] Million for
one full twelve month period or are less than [ * ] Million for one full
twelve month period, the Royalties owed on NET SALES shall thereafter be
determined in accordance with subparagraph (i), regardless of the subsequent
annual overall levels of NET SALES.
(iv) Royalties shall be payable under this Agreement solely
for PRODUCT sold in the TERRITORY. However, for the purposes of determining
the applicable [ * ] royalty rate, worldwide annual NET SALES shall be
deemed to include NET SALES under both this Agreement and the BIOGEN
AGREEMENT.
(b) Notwithstanding the foregoing, if the use or sale of PRODUCT
by BML or its AFFILIATES in the country in which the PRODUCT is sold is not
covered by a VALID CLAIM of a CVT PATENT RIGHT in such country, the Royalties
payable with respect to NET SALES in such country shall be [ * ] of the
amounts otherwise due pursuant to Section 10.2(a) above; PROVIDED, however,
that if, in any such country, any one or more THIRD PARTY(S) is/are selling
a generic version of the PRODUCT being sold by BML or its AFFILIATES and such
THIRD PARTY(S)' sales of such generic product exceeds [ * ] of BML's sales
of the PRODUCT in such country, the Royalties in such country shall be
reduced to [ * ] during such period of generic sales.
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(c) The obligation to pay Royalties for each PRODUCT shall
continue on a country-by-country and product-by-product basis until the last
to expire VALID CLAIM of the CVT PATENT RIGHTS in such country covering such
PRODUCT; provided, however, that in any country in which there is no such
VALID CLAIM, the obligation to pay Royalties shall continue only until the
expiration of [ * ] from the FIRST COMMERCIAL SALE of such PRODUCT
in such country by BML or its AFFILIATES or SUBLICENSEES.
(d) (i) In the event that after the EFFECTIVE DATE BML becomes
obligated to pay any royalties or other sums to THIRD PARTIES because the
manufacture, use or sale of CVT-124 or another Adenosine A(1) Antagonist
contained in a PRODUCT sold by BML hereunder in the TERRITORY infringes such
THIRD PARTIES' intellectual property rights, then BML shall be entitled to
credit [ * ] of any such obligations against Royalties due to CVT pursuant
to this Section 10.2.
(ii) In the event that after the EFFECTIVE DATE BML becomes
obligated to pay any royalties or other sums to THIRD PARTIES because the
manufacture, use or sale of a PRODUCT sold by BML hereunder in the TERRITORY
infringes such THIRD PARTIES' intellectual property rights on account of a
fact other than [ * ] then the matter shall be referred to the Oversight
Committee set up pursuant to the BIOGEN AGREEMENT to determine in good faith
whether or not BML shall be entitled to a credit of up to [ * ] of any such
obligations against Royalties due to CVT pursuant to this Section 10.2. In
the event the Oversight Committee cannot agree within forty-five (45) days
after referral of the matter to them for resolution, then the [ * ]
representatives to the Oversight Committee shall [ * ]
(iii) In no event shall any credits under subsections (d)(i) and (d)(ii), or
any cost-sharing pursuant to subsection (e) below, reduce Royalties payable
to CVT hereunder for any CALENDAR QUARTER by more than [ * ] of the amounts
otherwise due. [ * ]
(e) Intentionally Omitted.
(f) NET SALES of PRODUCT in a country in the TERRITORY for which
BML has no royalty obligation, pursuant to Section
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10.2(c) shall not be included in the calculation of the level of NET SALES
for purposes of Section 10.2(a).
(g) In addition to the foregoing, CVT shall receive a percentage
of BML's SUBLICENSE INCOME in accordance with this subsection (g).
(i) In MAJOR MARKET countries, CVT shall receive [ * ] of
SUBLICENSE INCOME, subject to the following floors and cap. For sublicenses
executed prior to the [ * ] in no event shall CVT receive less than [ * ]
of net sales of SUBLICENSEES (calculated using the NET SALES definition) for
any PRODUCTS covered by a VALID CLAIM of CVT PATENT RIGHTS in the country in
which they are sold. For sublicenses executed after the [ * ] in no event
shall CVT receive pursuant to this subsection less than [ * ] of net sales
of SUBLICENSEES (calculated using the NET SALES definition) for any PRODUCTS
covered by a VALID CLAIM of CVT PATENT RIGHTS in the country in which they
are sold. Notwithstanding the foregoing, if the use or sale of PRODUCT by a
SUBLICENSEE in the country in which the PRODUCT is sold is not covered by a
VALID CLAIM of a CVT PATENT RIGHT in such country, the minimum percentages
set forth in the previous two sentences shall be [ * ] respectively. In no
event shall CVT receive pursuant to this subsection an amount greater than
the Royalties which would have been due pursuant to this Section 10.2 on NET
SALES of SUBLICENSEES if such NET SALES had been made by BML.
(ii) In non-MAJOR MARKET countries, CVT shall receive [ * ]
of SUBLICENSE INCOME, subject to the following floors and cap. In no event
shall CVT receive pursuant to this subsection less than [ * ] of net sales
of SUBLICENSEES (calculated using the NET SALES definition) for any PRODUCTS
covered by a VALID CLAIM of CVT PATENT RIGHTS in the country in which they
are sold. Notwithstanding the foregoing, if the use or sale of PRODUCT by a
SUBLICENSEE in the country in which the PRODUCT is sold is not covered by a
VALID CLAIM of a CVT PATENT RIGHT in such country, the minimum percentage set
forth in the previous sentence shall be [ * ] In no event shall CVT receive
pursuant to this subsection an amount greater than the Royalties which would
have been due pursuant to this Section 10.2 on NET SALES of SUBLICENSEES if
such NET SALES had been made by BML.
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10.3 (a) BML shall pay the following amount within fifteen (15) days
of the occurrence of the following milestone event with respect to the first
PRODUCT to reach such milestone:
Milestone Amount
- --------- ------
Notice by BIOGEN of [ * ] equity investment
decision to commence pursuant to the Stock Purchase
Phase III Trial Agreement
[ * ]
(b) In the event BIOGEN does not [ * ] and this Agreement has
not been terminated, and (i) [ * ] planning or ongoing and (ii) no
material health or safety issue has arisen with respect to the clinical use
of PRODUCT, BML will make the equity investment as set forth in Section
10.3(a) above as if it had reached such milestone at such time, but such
equity investment shall not be due thereafter when a [ * ] is actually
commenced.
10.4 BML shall keep, and shall cause each of its AFFILIATES to keep,
full and accurate books of account containing all particulars relevant to its
sales of PRODUCTS that may be necessary for the purpose of calculating all
compensation payable to CVT hereunder. Such books of account shall be kept
at their principal place of business and for the three (3) years next
following the end of the calendar year to which each shall pertain, be open
for inspection by an independent certified public accountant reasonably
acceptable to BML, upon reasonable notice during normal business hours at
CVT's expense for the sole purpose of verifying compensation due under this
Agreement. In the event the inspection determines that compensation due CVT
for any period has been underpaid by [ * ] or more, then BML shall pay for
all costs of the inspection, otherwise the costs of the inspection shall be
borne by CVT. In all cases, BML shall pay to CVT any underpaid compensation
promptly and CVT shall promptly pay to BML any overpaid compensation. All
information and data reviewed in the inspection shall be used only for the
purpose of verifying compensation due and shall be treated as BML
Confidential Information subject to the obligations of this Agreement. No
audit by an agent of CVT shall occur more frequently than once during any
twelve (12) month period.
10.5 In each year the amount of compensation due shall be calculated
quarterly as of the end of each CALENDAR QUARTER and shall be paid quarterly
within the [ * ] days next following such date, unless such
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CALENDAR QUARTER is the last CALENDAR QUARTER of the year, in which case the
compensation due shall be paid within [ * ] days next following such
date. Every such payment shall be supported by the accounting prescribed in
Section 10.6 and shall be made in United States currency. Whenever for the
purpose of calculating compensation, conversion from any foreign currency
shall be required, such conversion shall be at the rate of exchange published
in The Wall Street Journal for the last business day of the CALENDAR QUARTER.
10.6 With each quarterly payment, BML shall deliver to CVT a full
and accurate accounting to include at least the following information:
(a) Total billings for PRODUCT subject to Royalty;
(b) Deductions applicable as provided in Section 1.17;
(c) Applicable royalty rates (including any credits as provided
in Section 10.2(b) or (d));
(d) SUBLICENSEE income and royalties thereon; and
(e) Total compensation payable to CVT.
10.7 If the transfer of or the conversion into United States Dollars
of any remittance due hereunder is not lawful or possible in any country,
such remittance shall be made by the deposit thereof in the currency of the
country to the credit and account of CVT or its nominee in any commercial
bank or trust company located in that country, prompt notice of which shall
be given to CVT. CVT shall be advised in writing in advance by BML and
provide to BML a nominee, if so desired.
10.8 Any tax required to be withheld by BML under the laws of any
foreign country (i.e., other than the Channel Islands) for the account of
CVT, shall be promptly paid by BML for and on behalf of CVT to the
appropriate governmental authority, and BML shall use its best efforts to
furnish CVT with proof of payment of such tax. Any such tax actually paid on
CVT's behalf shall be deducted from royalty payments due CVT.
10.9 Compensation shall be due and payable for the manufacture, use
and sale of an individual PRODUCT only once with respect to the same unit of
PRODUCT irrespective of the number of patents or claims thereof which cover
the manufacture, use and sale of such PRODUCT. In no event shall
compensation be due and payable hereunder for the manufacture, use or sale of
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an individual PRODUCT for which CVT receives compensation in the way of
royalties under the BIOGEN AGREEMENT.
10.10 BML hereby indemnifies CVT against, and agrees to pay on CVT's
behalf, any taxes that are required under the laws of the Channel Islands to
be withheld by BML or paid by CVT on account of any of the payments made by
BML to CVT hereunder, and no such withholding or payment shall reduce the
amounts otherwise payable to CVT hereunder.
SECTION 11. REPRESENTATIONS AND WARRANTIES.
11.1 Each party represents and warrants to the other party that: (i)
it is free to enter into this Agreement; (ii) in so doing, it will not
violate any other agreement to which it is a party; and (iii) it has taken
all corporate action necessary to authorize the execution and delivery of
this Agreement and the performance of its obligations under this Agreement.
11.2 (a) Each party represents that it is not aware of any action,
suit, inquiry or investigation or any claim, demand or notice of default
which if adversely determined would affect the rights granted under this
Agreement.
(b) Each party acknowledges that in entering into this
Agreement the other party has relied upon information supplied by the
disclosing party, including, in the case of information supplied by CVT, data
and information concerning CVT-124 and preclinical and clinical studies and
information related to CVT PATENT RIGHTS. Neither party is aware of any data
or information given to the other party which is untrue or inaccurate or of
any other data or information which is necessary to make the data and
information provided to the other party complete and not misleading. To the
best of CVT's knowledge, [ * ]
11.3 CVT hereby represents, warrants and covenants to BML that:
(a) It is the [ * ] under this Agreement and has the right
and has taken all necessary action to [ * ] provided that the foregoing
shall not be interpreted as a warranty of non-infringement;
(b) To the best of CVT's knowledge, CVT has disclosed to BML
all facts that CVT reasonably believes to be [ * ]
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known to CVT as of the EFFECTIVE DATE;
(c) All patent applications included in CVT PATENT RIGHTS
existing as of the Effective Date are pending and have not been abandoned;
(d) CVT [ * ] to BML pursuant to this Agreement.
(e) CVT will not take any action that would in any way prevent
CVT from granting the rights granted to BML under this Agreement with respect
to CVT PATENT RIGHTS or CVT TECHNOLOGY acquired after the EFFECTIVE DATE or
which would otherwise [ * ] BML under this Agreement. Nothing herein shall
prohibit the amendment or modification of the scope of claims during the
patent prosecution process.
(f) CVT will take all actions required by it to maintain its
rights under the UFRFI LICENSE as in effect on the EFFECTIVE DATE, and shall
immediately send to BML any notice of default or breach received by CVT under
the UFRFI LICENSE.
(g) All employees of CVT who perform research and development
for CVT in connection with CVT's obligations under this Agreement are
required to assign their rights in any intellectual property arising from
such work to CVT.
(h) Appendix A contains a complete and accurate list of all
CVT PATENT RIGHTS in existence as of the EFFECTIVE DATE.
(i) CVT will not enforce any patent rights owned or controlled
by it to prevent the manufacture, use or sale of any PRODUCT for which BML
has a royalty obligation to CVT hereunder subject to the license granted
herein by BML or its AFFILIATES or SUBLICENSEES, or any person or entity
purchasing a PRODUCT from any of them.
11.4 CVT represents that it has not as of the EFFECTIVE DATE [ * ]
the manufacture, use or sale of PRODUCT and it is not aware of any
infringement by a THIRD PARTY of the CVT PATENT RIGHTS.
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SECTION 12. INDEMNIFICATION.
12.1 INDEMNIFICATION BY BML. BML will defend, indemnify and hold
harmless CVT, its AFFILIATES and their employees, agents, officers,
shareholders and directors and each of them (the "CVT Indemnified Parties")
from and against any and all third party claims, causes of action and costs
(including reasonable attorney's fees) of any nature made or lawsuits or
other proceedings filed or otherwise instituted against the CVT Indemnified
Parties resulting from or arising out of the manufacture, use or sale of any
PRODUCT by BML, its AFFILIATES or SUBLICENSEES, other than those claims which
result or arise from breach of this Agreement by CVT or failure by CVT to
comply in any material respect with applicable laws or regulations or the
negligence or willful misconduct of CVT or any its AFFILIATES or any of their
employees, agents, officers, shareholders or directors.
12.2 INDEMNIFICATION BY CVT. CVT will defend, indemnify and hold
harmless BML, its AFFILIATES and their employees, agents, officers,
shareholders and directors and each of them (the "BML Indemnified Parties")
from and against any and all third party claims, causes of action and costs
(including reasonable attorney's fees) of any nature made or lawsuits or
other proceedings filed or otherwise instituted against any of the BML
Indemnified Parties resulting from or arising out of breach of this Agreement
by CVT or failure of CVT to comply in any material respect with applicable
laws or regulations or the negligence or willful misconduct of CVT or its
AFFILIATES or any of their employees, agents, officers, shareholders or
directors.
12.3 CONDITIONS TO INDEMNIFICATION. A person or entity that intends
to claim indemnification under this Section (the "Indemnitee") shall promptly
notify the indemnifying party (the "Indemnitor") of any loss, claim, damage,
liability or action in respect of which the Indemnitee intends to claim such
indemnification, and the Indemnitor shall assume the defense thereof with
counsel mutually satisfactory to the Indemnitee whether or not such claim is
rightfully brought; provided, however, that an Indemnitee shall have the
right to retain its own counsel, with the fees and expenses to be paid by the
Indemnitor if Indemnitor does not assume the defense, or if representation of
such Indemnitee by the counsel retained by the Indemnitor would be
inappropriate due to actual or potential differing interests between such
Indemnitee and any other person represented by such counsel in such
proceedings. The indemnity agreement in this Section shall not apply to
amounts paid in settlement of any loss, claim, damage, liability or action if
such settlement is effected without the consent of the Indemnitor, which
consent shall not be withheld or delayed unreasonably.
19.
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The failure to deliver notice to the Indemnitor within a reasonable time
after the commencement of any such action, only if prejudicial to its ability
to defend such action, shall relieve such Indemnitor of any liability to the
Indemnitee under this Section, but the omission so to deliver notice to the
Indemnitor will not relieve it of any liability that it may have to any
Indemnitee otherwise than under this Section. The Indemnitee under this
Section, its employees and agents, shall cooperate fully with the Indemnitor
and its legal representatives in the investigations of any action, claim or
liability covered by this indemnification.
SECTION 13. ASSIGNMENT; SUCCESSORS.
13.1 This Agreement shall not be assignable by either of the parties
without the prior written consent of the other party (which consent shall not
be unreasonably withheld), except that BML without the consent of CVT may
assign this Agreement or any of its rights and obligations hereunder to an
AFFILIATE or to an entity with which BML shall merge or consolidate or to
which BML shall sell or assign all or substantially all of its assets, and
except that CVT without the consent of BML may assign this Agreement to an
entity with which CVT shall merge or consolidate or to which CVT shall sell
or assign all or substantially all of its assets.
13.2 Subject to the limitations on assignment herein, this Agreement
shall be binding upon and inure to the benefit of said successors in interest
and assigns of CVT and BML.
SECTION 14. TERMINATION.
14.1 Except as otherwise specifically provided herein and unless
sooner terminated pursuant to Sections 14.2, 14.3, 14.4 or 14.9 of this
Agreement, this Agreement and the licenses and rights granted hereunder shall
remain in full force and effect until BML's obligations to pay compensation
hereunder terminate. Upon expiration of BML's obligation to pay compensation
hereunder with respect to a specific country and specific PRODUCT as to which
BML's license is then in effect, the license granted to BML with respect to
such country and such PRODUCT pursuant to Section 2.1 shall be deemed to be
fully paid and BML shall thereafter have a royalty-free right to use the CVT
PATENT RIGHTS and CVT TECHNOLOGY and to make, use, import and sell such
PRODUCT in such country.
14.2 Upon breach of any material provisions of this Agreement by
either party to this Agreement, in the event the breach is not cured within
[ * ] days after written notice to the breaching party by the other
party, in addition to
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any other remedy it may have, the other party at its sole option may
terminate this Agreement, provided that such other party is not then in
breach of this Agreement.
14.3 Either party to this Agreement may, upon giving notice of
termination, immediately terminate this Agreement upon receipt of notice that
the other party has become insolvent or has suspended business in all
material respects hereof, or has consented to an involuntary petition
purporting to be pursuant to any reorganization or insolvency law of any
jurisdiction, or has made an assignment for the benefit of creditors or has
applied for or consented to the appointment of a receiver or trustee for a
substantial part of its property; provided, however, that the insolvency or
bankruptcy of CVT shall not operate to terminate the licenses granted to BML
hereunder unless BML elects to terminate the Agreement as provided herein,
and BML may elect to retain its licenses as provided in 11 U.S.C. Section 356.
14.4 In addition to the foregoing, within [ * ] days of BIOGEN's
receipt of the data from the [ * ] BML may terminate this Agreement upon
written notice in its sole discretion. At any time after the [ * ] BML may
terminate this Agreement for any reason upon [ * ] days prior written
notice to CVT.
14.5 Upon any termination of this Agreement, BML shall be entitled
to, but shall not be obligated to [ * ] covered by this Agreement which
exists as of the date of the termination, so long as BML [ * ] in
accordance with the same terms and conditions as set forth in this Agreement.
14.6 The obligations of Sections 6 and 12, as well as Sections 14.5,
14.6, 14.8, 15.4, and 15.8 and the repayment obligation under the Note(s)
shall survive any termination of this Agreement.
14.7 Intentionally Omitted.
14.8 In the event that, following any termination of this Agreement,
CVT, or its permitted successor or assignee, subsequently commercializes a
PRODUCT by itself or in conjunction with a THIRD PARTY, CVT, or its permitted
successor or assignee, shall pay a royalty to BML on sales of PRODUCT in the
TERRITORY in accordance with the following:
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(a) If the Agreement has been terminated prior to receipt by
CVT of the [ * ] milestone payable in accordance with Section 10.3(a)(i) of
the BIOGEN AGREEMENT [ * ] and the manufacture, use or sale of the
commercialized PRODUCT is covered by a VALID CLAIM of the BIOGEN CVT-124
PATENTS or includes any of the BIOGEN CVT-124 TECHNOLOGY, CVT shall pay BML
royalties on net sales of PRODUCT and a percentage of CVT'S SUBLICENSE INCOME
as follows:
(i) Royalties payable to BML shall be [ * ] and
determined based on worldwide annual net sales (calculated in accordance with
the NET SALES definition set forth in Section 1.17 hereof, and including NET
SALES under the BIOGEN AGREEMENT) in each calendar year in accordance with
the following table:
[ * ] Annual Net Sales Royalty
-----------------------------------------------
Up to [ * ] Million [ * ]
[ * ] Million to [ * ] Million [ * ]
Over [ * ] Million [ * ]
(ii) CVT shall pay to BML [ * ] of SUBLICENSE INCOME
received by it from sublicensees. Prior to calculation of BML's [ * ] CVT
may deduct from SUBLICENSE INCOME any royalty paid by CVT to [ * ] on
account of sales of PRODUCT in the TERRITORY in such period.
(b) If the Agreement has been terminated after receipt by CVT
of the [ * ] but prior to completion of a [ * ] of the PRODUCT, CVT shall
pay BML royalties on net sales of PRODUCT and a percentage of SUBLICENSE
INCOME as follows:
(i) Royalties payable to BML shall be [ * ] and
determined based on worldwide annual net sales (calculated in accordance with
the NET SALES definition set forth in Section 1.17 hereof, and including NET
SALES under the BIOGEN AGREEMENT) in each calendar year in accordance with
the following table:
[ * ] Annual Net Sales Royalty
-----------------------------------------------
Up to [ * ] Million [ * ]
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[ * ] Million to [ * ] Million [ * ]
Over [ * ] Million [ * ]
(ii) CVT shall pay to BML [ * ] of
SUBLICENSE INCOME received by it from sublicensees. Prior to calculation of
BML's [ * ] share, CVT may deduct from SUBLICENSE INCOME any royalty paid by
CVT to [ * ] on account of sales of PRODUCT in the TERRITORY in such period.
(c) If the Agreement has been terminated after completion of a
[ * ] of the PRODUCT, but prior to the availability of [ * ] CVT shall
pay BML royalties on net sales of PRODUCT and a percentage of SUBLICENSE
INCOME as follows:
(i) Royalties payable to BML shall be [ * ] and
determined based on worldwide annual net sales (calculated in accordance with
the NET SALES definition set forth in Section 1.17 hereof, and including NET
SALES under the BIOGEN AGREEMENT) in each calendar year in accordance with
the following table:
[ * ] Annual Net Sales Royalty
-----------------------------------------------
Up to [ * ] Million [ * ]
[ * ] Million to [ * ] Million [ * ]
Over [ * ] Million [ * ]
(ii) CVT shall pay to BML [ * ] of
SUBLICENSE INCOME received by it from sublicensees. Prior to calculation of
BML's [ * ] share, CVT may deduct from SUBLICENSE INCOME any royalty paid by
CVT to [ * ] on account of sales of PRODUCT in the TERRITORY in such period.
(d) If the Agreement has been terminated after the
availability of [ * ] of the PRODUCT, CVT shall pay BML royalties on net
sales of PRODUCT and a percentage of SUBLICENSE INCOME as follows:
(i) Royalties payable to BML shall be [ * ] and
determined based on worldwide annual net sales (calculated in accordance with
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the NET SALES definition set forth in Section 1.17 hereof, and including NET
SALES under the BIOGEN AGREEMENT) in each calendar year in accordance with
the following table:
[ * ] Annual Net Sales Royalty
-----------------------------------------------
Up to [ * ] Million [ * ]
[ * ] Million to [ * ] Million [ * ]
Over [ * ] Million [ * ]
(ii) CVT shall pay to BML [ * ] of
SUBLICENSE INCOME received by it from sublicensees. Prior to calculation of
BML's [ * ] share, CVT may deduct from SUBLICENSE INCOME any royalty paid by
CVT to [ * ] on account of sales of PRODUCT in the TERRITORY in such period.
(e) In the event that after the EFFECTIVE DATE CVT becomes
obligated to pay any royalties or other sums to THIRD PARTIES because the
manufacture, use or sale of PRODUCTS in the TERRITORY infringes the
intellectual property rights of such THIRD PARTIES, CVT shall be entitled to
credit [ * ] of any such obligations against Royalties due to BML pursuant
to this Section 14.8; provided, however, that in no event shall such credit
reduce Royalties payable to BML hereunder for any CALENDAR QUARTER by more
than [ * ] of the amounts otherwise due. [ * ]
(f) CVT shall keep full and accurate books of account
containing all particulars relevant to its sales of PRODUCTS that may be
necessary for the purpose of calculating all compensation payable to BML
hereunder, and shall be subject to the same provisions as are contained in
Section 10.4 hereof.
(g) All payments due to BML pursuant to this Section 14.8
shall be made in accordance with Sections 10.5, 10.6 (excluding the section
references therein), 10.7 and 10.8 hereof, in each case substituting CVT for
ML as appropriate, and vice versa.
14.9 This Agreement shall automatically terminate upon the
termination of the BIOGEN AGREEMENT.
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SECTION 15. GENERAL PROVISIONS.
15.1 Neither party shall be liable to the other party for damages or
loss occasioned by failure of performance by the defaulting party if the
failure is occasioned by war, fire, explosion, flood, strike or lockout,
embargo, or any similar cause beyond the control of the defaulting party,
provided that the party claiming this exception has exerted all reasonable
efforts to avoid or remedy such event and provided such event does not extend
for more than six (6) months.
15.2 The relationship between CVT and BML is that of independent
contractors. CVT and BML are not joint venturers, partners, principal and
agent, master and servant, employer or employee, and have no relationship
other than as independent contracting parties. CVT shall have no power to
bind or obligate BML in any manner. Likewise, BML shall have no power to
bind or obligate CVT in any manner.
15.3 This Agreement, the BIOGEN AGREEMENT, the Stock Purchase
Agreement and the Loan Agreement between the parties of even date herewith
set forth the entire agreement and understanding between the parties as to
the subject matter hereof and supersede all prior agreements in this respect.
There shall be no amendments or modifications to these Agreements, except by
a written document which is signed by both parties.
15.4 This Agreement shall be construed and enforced in accordance
with the laws of the State of Delaware, U.S.A. without reference to its
choice-of-law principles.
15.5 The headings in this Agreement have been inserted for the
convenience of reference only and are not intended to limit or expand on the
meaning of the language contained in the particular or section or paragraph.
15.6 Any delay in enforcing a party's rights under this Agreement or
any waiver as to a particular default or other matter shall not constitute a
waiver of a party's right to the future enforcement of its rights under this
Agreement, excepting only as to an expressed written and signed waiver as to
a particular matter for a particular period of time.
15.7 In conducting any activities under this Agreement or in
connection with the manufacture use or sale of PRODUCT, BML shall comply with
all applicable laws and regulations including, but not limited to, all Export
Administration Regulations of the United States Department of Commerce.
25.
<PAGE>
15.8 NOTICES. Any notices given pursuant to this Agreement shall be
in writing and shall be deemed delivered upon the earlier of (i) when
received at the address set forth below, or (ii) three (3) business days
after mailed by certified or registered mail postage prepaid and properly
addressed, with return receipt requested, or (iii) when sent, if sent, by
facsimile, as confirmed by certified or registered mail. Notices shall be
delivered to the respective parties as indicated:
If to CVT: CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, CA 94304
Attn: CEO
with a copy to: Cooley Godward LLP
3000 El Camino Real
Palo Alto, CA 94306
Attn: Robert L. Jones, Esq.
Deborah Marshall, Esq.
If to BML: Biotech Manufacturing Limited
St. Paul's Gate
New Street
St. Helier, Jersey JE48Z
Channel Islands
Attn: President
with a copy to: Biogen, Inc.
14 Cambridge Center
Cambridge, MA 02142
Attn: Vice President - General
Counsel
15.9 This Agreement may be executed in any number of separate
counterparts, each of which shall be deemed to be an original, but which
together shall constitute one and the same instrument.
26.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
CV THERAPEUTICS, INC. BIOTECH MANUFACTURING LTD.
By: /s/ Louis Lange By: /s/ James H.M. Kirkness
------------------------------------- -------------------------------
Name: Louis Lange Name: James H.M. Kirkness
----------------------------------- -----------------------------
Title: CEO Title: Director
---------------------------------- ----------------------------
27.
<PAGE>
APPENDIX A
PATENT RIGHTS
<PAGE>
U. S. PATENTS
<TABLE>
<CAPTION>
Docket No./ Issue Date/ Patent
Patent No. Serial No. Title Inventor(s) Date File Expires
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
[ * ]
</TABLE>
[ * ]
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U.S. PENDING PATENT APPLICATIONS
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
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<S> <C> <C> <C> <C>
[ * ]
</TABLE>
[ * ]
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U.S. PENDING PATENT APPLICATIONS (CONT'D)
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
[ * ]
</TABLE>
[ * ]
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U.S. PENDING PATENT APPLICATIONS (CONT'D)
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
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<S> <C> <C> <C> <C>
[ * ]
</TABLE>
[ * ]
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U.S. PENDING PATENT APPLICATIONS (CONT'D)
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
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<S> <C> <C> <C> <C>
[ * ]
</TABLE>
[ * ]
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FOREIGN PATENT APPLICATIONS
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
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<S> <C> <C> <C> <C>
[ * ]
</TABLE>
[ * ]
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FOREIGN PATENT APPLICATIONS (CONT'D)
<TABLE>
<CAPTION>
Docket No./
Serial No. Descriptive Title Inventor(s) Date Filed Status
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<S> <C> <C> <C> <C>
[ * ]
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APPENDIX B
INTENTIONALLY OMITTED
<PAGE>
APPENDIX C
INTENTIONALLY OMITTED
<PAGE>
APPENDIX D
PRESS RELEASE
<PAGE>
CONTACT
Kathy Stafford
Chief Financial Officer
CV Therapeutics
415-812-9507
Biogen Media Contact:
Kathryn R. Bloom
Director of Communications
Biogen, Inc.
617-679-2851
Biogen Investment Community Contact:
Richard E.N. Lundberg
Manager, Investor Relations
Biogen, Inc.
6179-679-2822
BIOGEN AND CV THERAPEUTICS ANNOUNCE COLLABORATION ON CVT-124
FOR CONGESTIVE HEART FAILURE
CAMBRIDGE, MA (March 10, 1997) -- Biogen, Inc. (NASDAQ/BGEN) and CV
Therapeutics (NASDAQ/CVTX) today announced that they have signed an agreement
to collaborate on the development of CVT-124, a novel therapeutic for the
treatment of edema associated with Congestive Heart Failure (CHF) that is
expected to enter a multi-center Phase II clinical trial within the next
month.
Under the terms of the agreement, Biogen and its wholly owned subsidiary,
Biotech Manufacturing Limited, will receive exclusive worldwide rights to
develop and sell CVT-124. Biogen and CV Therapeutics will participate in
developing the drug, but Biogen will pay all costs of commercializing the
product. CV Therapeutics will receive from Biogen upfront payments totaling
$16 million, including a $5 million upfront cash payment, a $7 million equity
investment of CV Therapeutics stock at $10.45 per share, advance funding of a
development milestone and partial access to a line of credit. In addition,
Biogen will pay CV Therapeutics significant milestone payments and royalties
on clinical progress and product sales. Further details of the agreement
were not announced.
Congestive Heart Failure is a chronic, progressive disease that affects
approximately four-to-five million people in the United States. Its
prevalence is increasing at 10 percent per year, primarily
<PAGE>
due to the aging population as well as improved survival in heart disease
patients. Patients with CHF experience both a chronic course of the disease,
as well as acute episodes that, in many cases, require hospitalization.
Edema, or fluid retention in the lungs and extremities, is a significant
symptom of the disease, leading to increased morbidity and need for
hospitalization. In its most severe form, CHF results in a 50 percent
one-year mortality rate.
CVT-124, a highly selective adenosine A(1)-receptor antagonist, could
represent a novel therapy for the treatment of edema associated with CHF.
Proof of this new mechanism of action has been demonstrated both in animal
models and in a clinical Phase I study completed in 1996. This new approach
could be a significant advance because current therapies can lead to clinical
resistance and unwanted side effects, such as potassium loss and impairment
of kidney function. Because of some of its potential properties, CVT-124 may
be particularly useful in CHF patients who are resistant to current therapies
and/or have renal impairment.
Jim Tobin, Biogen's President and Chief Executive Officer, said, "Developing
Biogen's pipeline is a major strategic imperative for the Company, and we are
pleased to be collaborating with CV Therapeutics to help meet this objective.
CVT-124 represents a very promising commercial opportunity to enter an
underserved market with a late-stage therapeutic. We believe CVT-124, with
its novel mechanism of action, may have a major impact in the treatment and
management of Congestive Heart Failure. It is a very attractive fit with
Biogen's strategy of developing therapeutics for large underserved markets,
such as neurological, cardiovascular and renal diseases."
Lou Lange, Chairman and Chief Executive Officer of CV Therapeutics, said, "In
Biogen, we believe we have found partner for CVT-124 who can bring the
product to market quickly and with whom we can work closely on development of
this promising compound. Biogen's outstanding performance in commercializing
AVONEX-TM- gives us confidence that they will maximize the potential of
CVT-124."
In addition to historical information, this press release contains
forward-looking statements that involve risks and uncertainties that could
cause actual results to differ materially from those reflected in such
forward-looking statements. Reference is made in particular to
forward-looking statements regarding the timing of clinical trials, the
potential results of drug development and the commercial opportunity for
CVT-124. Drug development involves a high degree of risk. There are many
factors which could cause actual results to differ from the Company's current
expectations, including the Company's ability to demonstrate that CVT-124 is
safe and effective at each stage of the clinical trial process; to meet
applicable regulatory standards and receive required regulatory approval; to
obtain and maintain necessary patents and licenses; to be capable of
producing the product in commercial quantities at reasonable costs and to
compete successfully against other products.
Biogen, Inc., headquartered in Cambridge, MA, is a biopharmaceutical company
principally engaged in discovering and developing drugs for human healthcare
through genetic engineering. The Company's revenues are generated from U.S.
sales of AVONEX-TM- (Interferon beta-1a) for treatment of relapsing forms of
multiple sclerosis and from the worldwide sales by licenses of a
<PAGE>
number of products, including alpha interferon and hepatitis B vaccines and
diagnostic products. Biogen is focused primarily on developing and testing
novel products for multiple sclerosis, inflammatory, respiratory and kidney
diseases and certain viruses and cancers. For copies of press releases and
additional information about the Company, please consult Biogen's Homepage on
the World Wide Web at http://www.biogen.com.
CV Therapeutics, headquartered in Palo Alto, CA, is a biopharmaceutical
company focused exclusively on the application of molecular cardiology to the
discovery, development and commercialization of novel, small molecule drugs
for the treatment of cardiovascular diseases.
# # #
030796
s.97draft.cvt
<PAGE>
APPENDIX E
INTENTIONALLY OMITTED
<PAGE>
APPENDIX F
INTENTIONALLY OMITTED
<PAGE>
Exhibit 10.42
COMMON STOCK PURCHASE AGREEMENT
Between
CV THERAPEUTICS, INC.
and
BIOTECH MANUFACTURING LTD.
Dated as of March 7, 1997
<PAGE>
Confidential treatment has been requested for portions of this document.
Brackets indicate portions of text that have been omitted. A separate filing
of such omitted text has been made with the Commission as part of the
Company's application for confidential treatment.
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement"), dated as of this
7th day of March, 1997 (the "Effective Date"), between CV Therapeutics, Inc.
(the "Company") and Biotech Manufacturing Ltd., a wholly-owned subsidiary of
Biogen, Inc.(the "Purchaser").
WHEREAS, the Purchaser desires to acquire and the Company is willing to
issue and sell to the Purchaser shares of Common Stock, $.001 par value (the
"Common Stock"), of the Company, subject to the terms and conditions specified
herein.
NOW, therefore, in consideration of the premises and the mutual covenants
contained in this Agreement, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. As used in this Agreement, references to
either gender shall include the other gender, and the following terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Agreement" means this Common Stock Purchase Agreement, as amended,
modified or supplemented from time to time.
"Biogen Agreement" means the Research Collaboration and License
Agreement between the Company and Biogen, Inc. of even date herewith, as
amended, modified or supplemented from time to time.
2
<PAGE>
"Business Day" means any day on which commercial banks are not
authorized or required by law to close in New York, New York.
"BML Collaboration Agreement" means the Research Collaboration and
License Agreement between the Company and the Purchaser of even date
herewith, as amended, modified or supplemented from time to time.
"Commission" means the United States Securities and Exchange
Commission, or any other agency successor thereto.
"Common Stock" has the meaning specified in the recitals to this
Agreement.
"Company" means and shall include CV Therapeutics, Inc., a Delaware
corporation, and its successors and permitted assigns.
"Current Per Share Market Price" of the Common Stock on any date
shall mean the average of the daily closing prices per share of Common
Stock for the 20 consecutive Trading Days immediately prior to such date;
PROVIDED that in the event that the current per share market price of
Common Stock is determined during a period following the announcement by
the Company of (A) a dividend or distribution on the Common Stock payable
in shares of Common Stock or securities convertible into shares of Common
Stock or (B) any subdivision, combination or reclassification of the
Common Stock and prior to the expiration of 20 Trading Days after the
ex-dividend date for such dividend or distribution, or the record date
for such subdivision, combination or reclassification, then, and in each
such case, the Current Per Share Market Price shall be appropriately
adjusted to reflect ex-dividend trading or such subdivision, combination
or reclassification. The closing price for each day shall be the last
reported sales price of the Common Stock as reported by the Nasdaq
National Market, or the primary national securities exchange on which the
Common Stock is then quoted; provided, however, that if the Common Stock
is neither traded on the Nasdaq National Market nor on a national
securities exchange, the price
3
<PAGE>
referred to above shall be the price in the over-the-counter market as
reported by the National Association of Securities Dealers' Automated
Quotation System or, if not so reported, the price as reported by the
National Quotation Bureau, Inc., or any organization performing a
similar function.
[ * ] Closing" has the meaning specified in Section 3.01(a).
[ * ] Date" has the meaning specified in Section 3.01(a).
[ * ] Shares" has the meaning specified in Section 3.01(a).
"Initial Closing" has the meaning specified in Section 2.01(b).
"Initial Shares" has the meaning specified in Section 2.01(a).
"Investor Rights Agreement" means the Amended and Restated Investor
Rights Agreement dated May 29, 1996, as amended, modified or supplemented
from time to time, by and among the Company and certain investors of the
Company (including the Purchaser).
"Loan Agreement" means the Loan Agreement of even date herewith
between the Company and the Purchaser, as amended, modified or
supplemented from time to time.
"Milestone Closing" has the meaning specified in Section 3.03(a).
"Milestone Date" has the meaning specified in Section 3.03(a).
"Milestone Shares" has the meaning specified in Section 3.03(a).
"Person" means an individual, corporation, partnership, association,
joint venture, trust, or unincorporated
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<PAGE>
organization, or a government or any agency or political subdivision
thereof.
"Purchaser" means and shall include Biotech Manufacturing Ltd., a
wholly-owned subsidiary of Biogen, Inc., and its successors and permitted
assigns.
"Recapitalization Event" means any stock dividend, stock split,
combination, reorganization, recapitalization, reclassification,
consolidation, merger or similar event involving a change in the
Company's corporate structure.
[ * ] Closing" has the meaning specified in Section 3.02(a).
[ * ] Date" has the meaning specified in Section 3.02(a).
[ * ] Shares" has the meaning specified in Section 3.02(a).
"Securities Act" means the Securities Act of 1933 or any similar
Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Shares" means (i) the Initial Shares, (ii) the [ * ] Shares,
if issued pursuant to Section 3.01, (iii) the [ * ] Shares, if
issued pursuant to Section 3.02, (iv) the Milestone Shares, if issued
pursuant to Section 3.03 and (v) any other shares of Common Stock
issued to the Purchaser in respect of the foregoing Shares because of any
Recapitalization Event.
"Trading Day" means a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is
open for the transaction of business or, if the Common Stock is not
listed or admitted to trading on any national securities exchange, a
Business Day.
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"Transaction Documents" shall mean this Agreement and any other
instruments or certificates to be executed and delivered in connection
with this Agreement upon the Initial Closing.
ARTICLE II
PURCHASE AND SALE OF THE INITIAL SHARES
SECTION 2.01 PURCHASE AND SALE OF THE INITIAL SHARES.
(a) ISSUANCE OF THE INITIAL SHARES. Subject to the terms and
conditions of this Agreement, at the Initial Closing (as defined below) the
Company agrees to issue and sell to the Purchaser and the Purchaser agrees to
purchase from the Company, at an aggregate purchase price of seven million
dollars ($7,000,000), such number of shares (rounded to the nearest whole share)
of Common Stock (the "Initial Shares") equal to 7,000,000 divided by the product
of 1.35 times the Current Per Share Market Price as of the date which is two
Business Days prior to the Initial Closing. Notwithstanding the foregoing, in
no event shall the above calculation result in the Purchaser receiving less than
583,333 Initial Shares nor more than 736,842 Initial Shares in exchange for
payment of the aggregate purchase price as specified above.
(b) INITIAL CLOSING; DELIVERY OF THE INITIAL SHARES. The purchase
and sale of the Initial Shares shall take place at a closing (the "Initial
Closing") to be held at the offices of Biogen, Inc., 14 Cambridge Center,
Cambridge, MA 02142, at [___] A.M. (local time) on March 10, 1997, or at such
other location, time and date as may be mutually agreed upon by the parties.
At the Initial Closing, subject to the terms and conditions contained in this
Agreement, the Company will provide evidence satisfactory to the Purchaser
that the Company has taken all steps necessary to cause to be issued to the
Purchaser a stock certificate evidencing the Initial Shares, registered in
the name of the Purchaser and dated as of the date of the Initial Closing,
which stock certificate shall be delivered to the Purchaser within two
Business Days of the Initial Closing, against delivery
6
<PAGE>
of a certified or official bank check payable to the order of the Company in
New York Clearing House or similar same day funds or against receipt of a
wire transfer of immediately available funds to an account of the Company
specified to the Purchaser, in an amount equal to seven million dollars
($7,000,000), in payment of the full purchase price for the Initial Shares.
ARTICLE III
PURCHASE OF ADDITIONAL SHARES
SECTION 3.01 PURCHASE AND SALE OF [ * ] SHARES.
(a) [ * ] SHARES. On the date which is the [ * ] of the
Effective Date or, if such date is not a Business Day, on the next Business
Day (the "[ * ] Date"), unless either the Company or Biogen, Inc. has
delivered a notice of termination of the Research Program (as defined in the
Biogen Agreement) prior to the [ * ] Date, in accordance with the
provisions of Section 8.5 of the Biogen Agreement, the Company shall become
obligated to issue and sell to the Purchaser and the Purchaser shall become
obligated to purchase from the Company, in each case subject to and in
reliance upon the representations, warranties, terms and conditions of this
Agreement, at an aggregate purchase price of [ * ] such number of shares
(rounded to the nearest whole share) of Common Stock (the "[ * ] Shares")
equal to [ * ] divided by the Current Per Share Market Price on the date
which is two Business Days prior to the [ * ] Date at a closing (the
"[ * ] Closing").
(b) [ * ] CLOSING; DELIVERY OF [ * ] SHARES. The purchase and
sale of the [ * ] Shares shall take place at the [ * ] Closing, to be
held at the principal offices of the Company, at 10:00 a.m. (local time) on
the date determined pursuant to subsection (a) above, or at such other
location, time, or date as may be mutually agreed upon. At the [ * ]
Closing, subject to the terms and conditions contained in this Agreement, the
Company will issue a stock certificate evidencing the [ * ]
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<PAGE>
Shares, registered in the name of the Purchaser, against delivery of a
certified or official bank check payable to the order of the Company in New
York Clearing House or similar same day funds or against receipt of a wire
transfer of immediately available funds to an account of the Company
specified to the Purchaser, in the amount equal to [ * ] in payment of the
full purchase price for the [ * ] Shares.
SECTION 3.02 PURCHASE AND SALE OF [ * ] SHARES.
(a) [ * ] SHARES. On the date which is the [ * ] of the
Effective Date or, if such date is not a Business Day, on the next Business
Day (the "[ * ] Date"), unless either the Company or Biogen, Inc. has
delivered a notice of termination of the Research Program (as defined in the
Biogen Agreement) prior to the [ * ] Date, in accordance with the
provisions of Section 8.5 of the Biogen Agreement, the Company shall become
obligated to issue and sell to the Purchaser and the Purchaser shall become
obligated to purchase from the Company, in each case subject to and in
reliance upon the representations, warranties, terms and conditions of this
Agreement, at an aggregate purchase price of [ * ] such number of shares
(rounded to the nearest whole share) of Common Stock (the "[ * ] Shares")
equal to [ * ] divided by the Current Per Share Market Price on the date
which is two Business Days prior to the [ * ] Date at a closing (the
"[ * ] Closing").
(b) [ * ] CLOSING; DELIVERY OF [ * ] SHARES. The purchase and
sale of the [ * ] Shares shall take place at the [ * ] Closing, to be
held at the principal offices of the Company, at 10:00 a.m. (local time) on
the date determined pursuant to subsection (a) above, or at such other
location, time, or date as may be mutually agreed upon. At the [ * ]
Closing, subject to the terms and conditions contained in this Agreement, the
Company will issue a stock certificate evidencing the [ * ] Shares,
registered in the name of the Purchaser, against delivery of a certified or
official bank check payable to
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<PAGE>
the order of the Company in New York Clearing House or similar same day funds
or against receipt of a wire transfer of immediately available funds to an
account of the Company specified to the Purchaser, in the amount equal to
[ * ] in payment of the full purchase price for the [ * ] Shares.
SECTION 3.03 PURCHASE AND SALE OF MILESTONE SHARES
(a) MILESTONE SHARES. Fifteen days after the date on which the
Purchaser gives notice to the Company of its decision to commence a Phase III
clinical study of a PRODUCT [ * ], or otherwise becomes obligated to
purchase equity in the Company in connection with such milestone, as defined
and provided for in the BML Collaboration Agreement, or, if such date is not
a Business Day, on the next Business Day (the "Milestone Date"), the Company
shall become obligated to issue and sell to the Purchaser and the Purchaser
shall become obligated to purchase from the Company, in each case subject to
and in reliance upon the representations, warranties, terms and conditions of
this Agreement, at an aggregate purchase price of [ * ] such number of
shares (rounded to the nearest whole share) of Common Stock (the "Milestone
Shares") equal to [ * ] divided by the Current Per Share Market Price on
the date which is two Business Days prior to the Milestone Date at a closing
(the "Milestone Closing").
(b) MILESTONE CLOSING; DELIVERY OF MILESTONE SHARES. The purchase
and sale of the Milestone Shares shall take place at the Milestone Closing,
to be held at the principal offices of the Company, at 10:00 a.m. (local
time) on the date determined pursuant to subsection (a) above, or at such
other location, time, or date as may be mutually agreed upon. At the
Milestone Closing, subject to the terms and conditions contained in this
Agreement, the Company will issue a stock certificate evidencing the
Milestone Shares, registered in the name of the Purchaser, against delivery
of a certified or official bank check payable to the order of the Company in
New York Clearing House or similar same day funds or against receipt of a
wire transfer of immediately available funds to an account of the Company
specified to the Purchaser, in the amount equal to [ * ]
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<PAGE>
in payment of the full purchase price for the Milestone Shares.
SECTION 3.04 LIMIT ON SHARE OWNERSHIP. Notwithstanding any provision of
this Agreement to the contrary, Purchaser shall in no event be required to
purchase shares of Common Stock if, after giving effect to such purchase, the
sum of (i) the number of shares of Common Stock purchased hereunder and (ii) the
number of shares of Common Stock of the Company tendered to the Purchaser in
connection with the Loan Agreement would exceed 19.9% of the amount of the then
outstanding shares of Common Stock. Notwithstanding the foregoing, in order to
insure for the Company the benefits of the transactions contemplated in this
Agreement and the Loan Agreement, and the covenants set forth in Section 7.01
hereof, to the extent that Purchaser has acquired Voting Securities in
transactions other than those described in Article III hereof and the Loan
Agreement ("Other Voting Securities") the Purchaser shall sell such Other Voting
Securities to the extent necessary to permit the transactions contemplated
herein or in the Loan Agreement to be consummated without violation of the
provisions of this Section 3.04 and Section 7.01 hereof.
SECTION 3.05 CERTAIN TRADING RESTRICTIONS. Purchaser will not, nor will
it permit any of its Affiliates (as such term is used in Rule 12b-2 of the
Securities Exchange Act of 1934 (the "Exchange Act"), such term to have such
definition as used throughout this Agreement) to, during the 30 consecutive
Trading Days prior to the date of any determination of Current Per Share Market
Price hereunder, (a) acquire any Voting Securities (as defined in Section 7.01),
(b) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any Voting Securities or (c) enter into any swap or similar
agreement that transfers, in whole or in part, the economic risk of ownership of
Voting Securities, whether any such transaction described in clause (a), (b) or
(c) above is to be settled by delivery of Voting Securities or such other
securities, in cash or otherwise.
SECTION 3.06 COMPLIANCE WITH NASDAQ STOCK MARKET RULE
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4460(i)(1)(D). Notwithstanding any provision of this Agreement to the
contrary, except as otherwise permitted by the rules of the NASDAQ Stock
Market, the Company shall in no event be obligated to issue and sell, and the
Purchaser shall in no event be obligated to purchase, shares of Common Stock
pursuant to Article III hereof or the Loan Agreement, to the extent that such
issuance and sale would result in the number of shares of Common Stock
purchased hereunder and tendered in connection with the Loan Agreement
constituting (i) the sale or issuance of 20% or more of the Common Stock or
(ii) the sale or issuance of securities constituting 20% or more of voting
power, for less than the greater of book or market value.
ARTICLE IV
CONDITIONS TO CLOSINGS
SECTION 4.01 MUTUAL CONDITIONS TO CLOSINGS. The obligation of the
Purchaser to purchase and pay for, and the obligation of the Company to issue
and sell to the Purchaser, the Initial Shares at the Initial Closing, the
[ * ] Shares at the [ * ] Closing, the [ * ] Shares at the [ * ]
Closing, and the Milestone Shares at the Milestone Closing, in each case is
subject to the following conditions:
(i) NO INJUNCTION. No injunction or order of any court or other
governmental authority restraining the consummation of the transactions provided
for herein or contemplated by the other Transaction Documents shall be in
effect; and
(ii) NO TERMINATION. This Agreement shall not have been terminated
pursuant to Section 8.03, and neither the BML Collaboration Agreement nor the
Biogen Agreement shall have been terminated.
SECTION 4.02 CONDITIONS TO PURCHASER'S OBLIGATIONS. The obligation of
the Purchaser to purchase and pay for the Initial Shares at the Initial
Closing, the [ * ] Shares at the [ * ] Closing, the [ * ] Shares at
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the [ * ] Closing and the Milestone Shares at the Milestone Closing, in
each case is subject to the following additional conditions:
(i) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties of the Company set forth in Article V hereof shall be true
and correct in all material respects on the date of such closing;
(ii) EXECUTED COUNTERPARTS. The Purchaser shall have received prior
to or at the Initial Closing counterparts of each of the Transaction
Documents, the Biogen Agreement, the BML Collaboration Agreement and the
Loan Agreement, each in form and substance reasonably satisfactory to the
Purchaser, duly executed by the Company;
(iii) DELIVERY OF STOCK CERTIFICATES. The Company shall have
delivered to the Purchaser (i) at the Initial Closing, evidence
satisfactory to the Purchaser that the Company has taken all steps
necessary to cause to be issued to the Purchaser a stock certificate
evidencing the Initial Shares, as specified in Section 2.01(b), and (ii)
at the other closings contemplated hereunder, a stock certificate
evidencing the [ * ] Shares, the [ * ] Shares or the Milestone
Shares (as the case may be), registered in the name of the Purchaser;
(iv) OPINION OF COUNSEL. The Purchaser shall have received prior to
or at the Initial Closing an opinion from counsel to the Company in
substantially the form attached hereto as Exhibit A;
(v) DOCUMENTATION AT INITIAL CLOSING. The Purchaser shall have
received, prior to or at the Initial Closing, a certificate, executed by
the Secretary of the Company and dated as of the date of the Initial
Closing, together with and certifying as to (A) the resolutions of the
Board of Directors of the Company authorizing the execution and delivery
of this Agreement, the Biogen Agreement, the BML Collaboration Agreement,
the Loan Agreement and the other Transaction Documents and the
performance by the Company of all transactions contemplated
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hereby and thereby; (B) a copy of the Certificate of Incorporation of the
Company, as amended and in effect as of the date of the Initial Closing;
(C) a copy of the by-laws of the Company, as amended and in effect as of
the date of the Initial Closing; and (D) the names of the officers of the
Company authorized to sign the Transaction Documents together with the
true signatures of such officers;
(vi) DOCUMENTS AND PROCEEDINGS. All documents to be provided to the
Purchaser hereunder, and all corporate and other proceedings taken or
required to be taken in connection with the transactions contemplated
hereby and to be consummated at or prior to the Initial Closing, the
[ * ] Closing and the [ * ] Closing and the Milestone Closing (as
the case may be) and all documents incident thereto, shall be
satisfactory in form and substance to the Purchaser or its counsel; and
(vii) WAIVER. Any condition specified in this Section 4.02 may
be waived by the Purchaser.
SECTION 4.03 CONDITIONS TO COMPANY'S OBLIGATIONS. The obligation of
the Company to issue and sell the Initial Shares at the Initial Closing, the
[ * ] Shares at the [ * ] Closing, the [ * ] Shares at the [ * ]
Closing and the Milestone Shares at the Milestone Closing, in each case is
subject to the following additional conditions:
(i) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties of the Purchaser set forth in Article V hereof shall be
true and correct in all material respects on the date of such closing;
(ii) EXECUTED COUNTERPARTS. The Company shall have received prior
to or at the Initial Closing counterparts of each of the Transaction
Documents, the Biogen Agreement, the BML Collaboration Agreement and the
Loan Agreement, each in form and substance reasonably satisfactory to the
Company, duly executed by the Purchaser (or Biogen, Inc., as the case may
be);
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(iii) PAYMENT. The Company shall have received payment in full
for the Initial Shares, the [ * ] Shares, the [ * ] Shares or the
Milestone Shares (as the case may be), in accordance with Section
2.01, 3.01, 3.02 or 3.03, as applicable;
(iv) DOCUMENTATION AT INITIAL CLOSING. The Company shall have
received, prior to or at the Initial Closing, a certificate, executed by
the Secretary or an Assistant Secretary of Biogen, Inc. and dated as of
the date of the Initial Closing, together with and certifying as to (A)
the resolutions of the Board of Directors of Biogen, Inc. authorizing the
execution and delivery of this Agreement, the Biogen Agreement, the BML
Collaboration Agreement, the Loan Agreement and the other Transaction
Documents and the performance by Biogen, Inc. or the Purchaser of all
transactions contemplated hereby and thereby; and (B) the names of the
officers of each of Biogen, Inc. and the Purchaser authorized to sign the
Transaction Documents together with the true signatures of such officers;
(v) DOCUMENTS AND PROCEEDINGS. All documents to be provided to the
Company hereunder, and all corporate and other proceedings taken or
required to be taken in connection with the transactions contemplated
hereby and to be consummated at or prior to the Initial Closing, the
[ * ] Closing, the [ * ] Closing and the Milestone Closing (as
the case may be) and all documents incident thereto, shall be
satisfactory in form and substance to the Company or its counsel; and
(vi) WAIVER. Any condition specified in this Section 4.03 may be
waived by the Company.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
SECTION 5.01 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Purchaser as follows:
(a) ORGANIZATION AND STANDING OF THE COMPANY. The Company is a duly
organized and validly existing corporation in good standing under the laws of
the State of Delaware and has all requisite corporate power and authority to own
and operate its assets and properties and to conduct its business as presently
conducted, except where the failure to do so would not have a material adverse
effect on the Company and its subsidiaries taken as a whole.
(b) CORPORATE ACTION. The Company has all necessary corporate
power and has taken all corporate action required to authorize its execution
and delivery of, and its performance under, the Transaction Documents and the
Company has all necessary corporate power and has taken all corporate action
required to authorize the issuance and sale of the Initial Shares, the [ * ]
Shares, the [ * ] Shares and the Milestone Shares and to consummate the
other transactions contemplated by the Transaction Documents.
(c) GOVERNMENTAL APPROVALS. No authorization, consent, approval,
license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, is necessary for, or in connection
with, the issuance and sale of (w) the Initial Shares on the date of the
Initial Closing, (x) the [ * ] Shares on the date of the [ * ] Closing,
(y) the [ * ] Shares on the date of the [ * ] Closing, or (z) the
Milestone Shares on the date of the Milestone Closing, or the execution and
delivery by the Company of, or for the performance by it of its obligations
under, the Transaction Documents.
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(d) CAPITALIZATION. As of the date hereof, the authorized capital
stock of the Company is 30,000,000 shares of Common Stock, $.001 par value,
of which 6,211,817 shares are issued and outstanding as of the date hereof
and of which 23,039 shares are treasury shares as of the date hereof. The
Initial Shares, when issued against payment of the aggregate purchase price
set forth in Section 2.01, the [ * ] Shares, if and when issued against
payment of the aggregate purchase price set forth in Section 3.01, the [ * ]
Shares, if and when issued against payment of the aggregate purchase price
set forth in Section 3.02, and the Milestone Shares, if and when issued
against payment of the aggregate purchase price set forth in Section 3.03,
will be duly authorized, validly issued and fully paid and non-assessable and
not subject to any lien, claims or encumbrances by reason of the Company's
charter or bylaws or by reason of any other consensual action taken by the
Company. As of the date hereof, except as described or contemplated in the
IPO Registration Statement (as defined in Section 5.01(j)) and the SEC
Reports (as defined in Section 5.01(k)), there are no options, warrants,
convertible securities or other rights to purchase shares of capital stock or
other securities of the Company which are authorized, issued or outstanding,
nor is the Company obligated in any other manner to issue shares of its
capital stock or other securities, and the Company has no obligation to
purchase, redeem or otherwise acquire any shares of its capital stock or any
interest therein or to pay any dividend or make any other distribution in
respect thereof, except as contemplated by the Transaction Documents. Except
as described in the IPO Registration Statement and the SEC Reports, and
except as otherwise contemplated by the Transaction Documents, (i) no person
is entitled to any preemptive right, catch-up right, right of first refusal
or similar right with respect to the issuance of any capital stock of the
Company, (ii) there are no restrictions on the transfer of shares of capital
stock of the Company other than those imposed by relevant federal and state
securities laws and (iii) there exists no agreement between the Company's
stockholders and to which the Company is party with respect to the voting or
transfer of the Company's capital stock or with respect to any other aspect
of the Company's affairs.
(e) REGISTRATION RIGHTS. As of the Initial Closing Date, no person
has demand or other rights to cause the Company
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to file any registration statement under the Securities Act relating to any
securities of the Company or any right to participate in any such
registration statement except as set forth in the Investor Rights Agreement.
(f) ENFORCEABILITY. The Company has duly authorized, executed and
delivered the Transaction Documents, and the Transaction Documents constitute
the legal, valid and binding obligations of the Company, enforceable in
accordance with their respective terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting creditors' rights generally and to general principles
of equity and limitations on availability of equitable relief, including
specific performance, and except as rights to indemnification therein may be
limited by applicable laws.
(g) ABSENCE OF CONFLICTS. The Company's execution, delivery and
performance of its obligations under this Agreement do not and will not (i)
contravene its Amended and restated Certificate of Incorporation or Restated
By-laws (ii) violate any law, rule, regulation, order, judgment or decree
applicable to or binding upon the Company or its properties, which violation
would have a material adverse effect on the Company and its subsidiaries
taken as a whole, (iii) constitute a breach or default or require any consent
under any agreement or instrument to which the Company is a party or by which
the Company or its properties is bound or affected, which breach or default,
or the absence of such consent, would have a material adverse effect on the
Company and its subsidiaries taken as a whole, or (iv) require any consent,
permit, approval, action, filing or recording.
(h) FINANCIAL STATEMENTS. The Company has previously furnished to
the Purchaser a copy of the unaudited balance sheet of the Company at
December 31, 1996 and any subsequent complete fiscal year and the related
income statement for the year then ended (collectively, the "Financial
Statements"). The Financial Statements are correct in all material respects,
present fairly the financial condition and results of operations of the
Company, as of the dates and for the periods indicated, and have been
prepared in accordance with generally accepted accounting
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principles consistently applied, subject to the absence of notes and normal
year end adjustments.
(i) ABSENCE OF MATERIAL ADVERSE CHANGE. Since the date of the
Financial Statements, there has been no change in the assets, liabilities or
financial condition of the Company which, when taken together with all other
changes in the assets, liabilities or financial condition of the Company, has
had a material adverse effect on the business, prospects, financial
condition, operations, property or affairs of the Company.
(j) FULL DISCLOSURE. The Company has furnished or made available
to Purchaser the following documents, and the Company warrants that the
information contained in such documents, as of their respective dates (or if
amended, as of the date of such amendment), did not contain any untrue
statement of a material fact, and did not omit to state any material fact
necessary to make any statement, in light of the circumstances under which
such statement was made, not misleading:
(i) The Company's Registration Statement No. 333-12675 declared
effective by the Securities Exchange Commission on November 19, 1996 and
Prospectus dated November 19, 1996 (the "IPO Registration Statement"); and
(ii) All other documents subsequently filed by the Company with the
SEC pursuant to the reporting requirements of the 1934 Act.
(k) SEC REPORTS.
(i) The Company has filed with the Commission all reports
("SEC Reports") required to be filed by it under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). All of the SEC Reports
filed by the Company comply in all material respects with the
requirements of the Exchange Act. All financial statements contained in
the SEC Reports have been prepared in accordance with generally accepted
accounting principles consistently applied throughout the period
indicated ("GAAP"). Each balance sheet presents fairly in accordance
with GAAP the financial position of the Company as of the date of such
balance
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sheet, and each statement of operations, of stockholders' equity and of
cash flows presents fairly in accordance with GAAP the results of
operations, the stockholders' equity and the cash flows of the Company
for the periods then ended.
(ii) The SEC Reports, as of their respective dates (or if
amended, as of the date of such amendment), and this Agreement taken
together as a whole will not, on the date of the Initial Closing or the
date of any subsequent closing pursuant to Article III, as the case may
be, contain any untrue statement of a material fact or omit to state any
material fact required to be state therein, or necessary to make the
statements contained therein, in light of the circumstances under which
they were made, not misleading.
(l) SECURITIES LAWS. Assuming the accuracy of the representations
and warranties of the Purchaser contained in Section 5.02 hereof, the issuance
of the Shares is exempt from the provisions of the Securities Act. All notices,
filings, registrations, or qualifications under state securities or "blue-sky"
laws which are required in connection with the offer, issue and delivery of the
Shares pursuant to this Agreement, if any, have been or will be completed by the
Company.
(m) CLOSING DATE. The representations and warranties of the Company
contained in this Section 5.01 and elsewhere in this Agreement will be true and
correct in all material respects on the date of the Initial Closing or the date
of any subsequent closing pursuant to Article III, as the case may be, as though
then made, except as affected by the transactions expressly contemplated by this
Agreement.
SECTION 5.02 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser represents and warrants to the Company as follows:
(a) ORGANIZATION AND STANDING. The Purchaser is a duly organized and
validly existing corporation in good standing and has all requisite corporate
power and authority to own and operate its assets and properties and to conduct
its business as presently conducted, except where the failure to do so would not
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have a material adverse effect on the Purchaser and its subsidiaries taken as
a whole.
(b) CORPORATE ACTION. The Purchaser has all necessary corporate
power and has taken all corporate action required to authorize its execution
and delivery of, and its performance under, the Transaction Documents to
which it is a party and has all necessary corporate power and has taken all
corporate action required to authorize its purchase of the Initial Shares,
the [ * ] Shares, the [ * ] Shares and the Milestone Shares and to
consummate the other transactions contemplated by the Transaction Documents.
(c) INVESTMENT INTENT. The Purchaser is acquiring (w) the Initial
Shares on the date of the Initial Closing, (x) the [ * ] Shares on the date
of the [ * ] Closing, (y) the [ * ] Shares on the date of the [ * ]
Closing and (z) the Milestone Shares on the date of the Milestone Closing for
its own account for the purpose of investment and not with a view to, or for
sale in connection with, the distribution thereof, and that it has no present
intention of distributing or selling such Shares. The Purchaser understands
that such Shares have not been registered under the Securities Act, or the
securities laws of any state or other jurisdiction, and hereby agrees not to
make any sale, transfer or other disposition of such Shares unless either (i)
such Shares have been registered under the Securities Act and all applicable
state and other securities laws and any such registration remains in effect
or (ii) the Company shall have received an opinion of counsel in form and
substance satisfactory to the Company that registration is not required under
the Securities Act or under applicable securities laws.
(d) OPPORTUNITY TO INVESTIGATE. The Purchaser (i) has had the
opportunity to ask questions concerning the Company and all such questions posed
have been answered to its satisfaction; (ii) has been given the opportunity to
obtain any additional information it deems necessary to verify the accuracy of
any information obtained concerning the Company; and (iii) has such knowledge
and experience in financial and business matters that it is able to evaluate the
merits and risks of purchasing the
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Shares and to make an informed investment decision relating thereto.
(e) ACCREDITED INVESTOR. The Purchaser is an "accredited investor"
as such term is defined in Regulation D under the Securities Act.
(f) ENFORCEABILITY. The Purchaser has duly authorized, executed and
delivered the Transaction Documents to which it is a party, and such Transaction
Documents constitute the legal, valid and binding obligations of the Purchaser,
enforceable in accordance with their respective terms, except as enforcement may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and to general
principles of equity and limitations on availability of equitable relief,
including specific performance, and except as rights to indemnification therein
may be limited by applicable laws.
(g) CLOSING DATE. The representations and warranties of the
Purchaser contained in this Section 5.02 and elsewhere in this Agreement, and
all information contained in any writing delivered by, or on behalf of, the
Purchaser to the Company, will be true and correct in all material respects on
the date of the Initial Closing or the date of any subsequent closing pursuant
to Article III, as the case may be, as though then made, except as affected by
the transactions expressly contemplated by this Agreement.
ARTICLE VI
COVENANTS
SECTION 6.01. PERFORMANCE. Each party shall perform all of its
obligations hereunder and shall, at or prior to the Initial Closing, execute
and deliver the other Transaction Documents, the Biogen Agreement and the BML
Collaboration Agreement to which it is contemplated to be a signatory.
SECTION 6.02. COOPERATION. Each party shall endeavor in good faith to
perform and fulfill all conditions and obligations
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on their respective parts to be fulfilled or performed hereunder or under the
other Transaction Documents, to the end that the transactions contemplated
hereby and thereby will be fully and timely consummated.
SECTION 6.03. REGISTRATION RIGHTS. The Company shall, as promptly as
practicable, and in any event not later than ten (10)business days after the
Initial Closing Date, cause an amendment to the Investor Rights Agreement to be
executed, pursuant to which, in each case effective as of the date of the
Initial Closing (the "Amendment"):
(a) the Purchaser shall be made a party to the Investor Rights
Agreement and included in the definition of "Investors" for all purposes of
the Investor Rights Agreement;
(b) all shares of Common Stock issued or issuable to the Purchaser
hereunder are included in the definition of "Registrable Securities" in
Section 2.6 of the Investor Rights Agreement for all purposes of the
Investor Rights Agreement; and
(c) the address for the Purchaser to be used for notices and
communications under the Investor Rights Agreement will be: BIOGEN, INC.,
14 Cambridge Center, Cambridge, Massachusetts 02142, Attention: President,
with a copy to BIOGEN, INC., 14 Cambridge Center, Cambridge, Massachusetts
02142, Attention: Vice President and General Counsel.
In the event that the Amendment is not executed within such period, the
Company will enter into a Registration Rights Agreement with the Purchaser, in
form and substance satisfactory to the Purchaser, granting the Purchaser
registration rights with respect to all shares of Common Stock issued or
issuable to the Purchaser hereunder equivalent to the registration rights the
Purchaser would have had as an Investor under the Investor Rights Agreement.
SECTION 6.04. BROKER'S FEE. Each of the Company and the Purchaser hereby
represents and covenants that except for amounts
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to be paid to Medical Portfolio Management by Purchaser, there are no brokers
or finders entitled to compensation in connection with the sale of the Stock,
and shall indemnify each other for any such fees for which they are
responsible.
ARTICLE VII
LIMITATIONS AND RESTRICTIONS
SECTION 7.01. RESTRICTIONS ON CERTAIN ACTIONS BY PURCHASER.
(a) The Purchaser agrees that, during the period commencing on the date
hereof and ending on the date which is the third anniversary of the date on
which the BML Collaboration Agreement ceases to be in full force and effect, the
Purchaser will not, nor will it permit any of its Affiliates to, acquire or
offer or propose to acquire any shares of Common Stock or any securities
convertible into, exchangeable for or exercisable for Common Stock (all such
securities, collectively, "Voting Securities") which, when taken together with
any Voting Securities then owned by the Purchaser and its Affiliates, would, in
the aggregate, exceed an amount equal to fifteen percent (15%) of the Company's
then outstanding Voting Securities, unless in any such case specifically invited
to do so by the Board of Directors of the Company; PROVIDED that this provision
shall not prevent the Purchaser or its Affiliates (i) from acquiring Voting
Securities as a result of the provisions of Article III of this Agreement or
(ii) from acquiring any Voting Securities as a result of the repayment, in whole
or in part, of the Loan Agreement with any Voting Securities. Notwithstanding
any provision of this Agreement to the contrary, Purchaser shall in no event be
required to purchase shares of Common Stock if, after giving effect to such
purchase, the sum of (i) the number of shares of Common Stock purchased
hereunder and (ii) the number of shares of Common Stock of the Company tendered
to the Purchaser in connection with the Loan Agreement would exceed 19.9% of the
amount of the then outstanding shares of Common Stock. Notwithstanding the
foregoing, in order to insure for the Company the benefits of the transactions
contemplated in this Agreement and the Loan Agreement, and the covenants set
forth in this Section 7.01, to the extent that Purchaser has acquired Voting
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Securities in transactions other than those described in Article III hereof and
the Loan Agreement ("Other Voting Securities") the Purchaser shall sell such
Other Voting Securities to the extent necessary to permit the transactions
contemplated herein or in the Loan Agreement to be consummated without violation
of the provisions of Section 3.04 and this Section 7.01.
(b) The Purchaser acknowledges and agrees that irreparable damage would
occur in the event that any of the provisions of this Section 7.01 were not
performed in accordance with their specific terms or were otherwise breached.
It is accordingly agreed that the parties shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Section 7.01 and to
enforce specifically the terms and provisions hereof in any court of the United
States or any state thereof having jurisdiction, in addition to any other remedy
to which they may be entitled at law or equity.
SECTION 7.02. RESTRICTIONS ON SALES BY PURCHASER. Purchaser agrees that
until the second anniversary of any Closing hereunder, it will not, nor will it
permit any of its Affiliates to sell, solicit an offer to sell or propose to
sell (collectively "Sell"), any Shares purchased at such Closing except as
follows:
(a) Purchaser may transfer Shares to any of its Affiliates;
(b) Purchaser shall be permitted to sell or otherwise dispose of such
minimum number of as is required to reduce Purchaser's ownership to (1) 19.99%
of the Company's outstanding Common Stock or (2) in the event that Purchaser is
required to consolidate or include the Company's profits and losses in its
profit and loss statements (and the aggregate amount of losses to be
consolidated may reasonably exceed $50,000), such lesser amount of the Company's
outstanding Common Stock as may be required in the written opinion of
Purchaser's independent public accountants in order to avoid such consolidation
or inclusion;
(c) Purchaser may sell its Shares pursuant to a tender offer or exchange
offer for all outstanding shares of the Company's Common Stock approved by the
Company's Board of Directors; and
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(d) Without duplication of any of the Shares permitted to be sold
pursuant to any of the other provisions of this Section 7.02, Purchaser may
sell all or any part of the Shares owned by Purchaser or its Affiliates
pursuant to the registration rights provisions contained in the Loan
Agreement (or any document relating thereto) or in the Investor Rights
Agreement, as amended (or such other registration rights agreement as may be
entered into between the parties pursuant to the provisions of Section 6.03
hereof); provided, however, that, with respect to any registration statement
or statements relating to a non-underwritten offering filed pursuant to such
agreements, Purchaser shall not (i) seek to register on such registration
statement or statements, in any period of 12 consecutive months, shares of
Common Stock in an amount in excess of 10% of the amount of then outstanding
Common Stock at the commencement of such 12 month period or (ii) sell in any
period of three consecutive months shares of Common Stock in an amount in
excess of 2.5% of the amount of then outstanding Common Stock at the
commencement of such three month period.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. NOTICES. All notices, requests, consents and other
communications hereunder shall be in writing, shall be addressed to the
receiving party's address set forth below or to such other address as a party
may designate by notice hereunder, and shall be either (i) delivered by hand,
(ii) made by telecopy or facsimile transmission (receipt confirmed), (iii) sent
by international overnight or express courier, or (iv) sent by registered mail,
return receipt requested, postage prepaid.
If to the Company: CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, CA 94304
Attn: Chief Executive Officer
FAX:
with a copy to: Cooley Godward LLP
Five Palo Alto Square
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3000 El Camino Real
Palo Alto, CA 94306-2155
Attn: Deborah A. Marshall, Esq.
FAX: 415-857-0663
If to the Purchaser: Biogen Manufacturing, Ltd.
St. Paul's Gate
New Street
St. Helier, Jersey JE48Z
Channel Islands
Attn: Director
FAX: 011-44-153-488-9871
with a copy to: Biogen, Inc.
14 Cambridge Center
Cambridge, MA 02142
Attn: Vice President and General Counsel
FAX: 617-679-2838
All notices, requests, consents and other communications hereunder shall be
deemed to have been given either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party set forth above,
(ii) if made by telecopy or facsimile transmission, at the time that receipt
thereof has been acknowledged by electronic confirmation or otherwise, (iii) if
sent by overnight or express courier, on the Business Day following the day such
notice is delivered to the courier service, or (iv) if sent by registered mail,
on the 5th Business Day following the day such mailing is made.
SECTION 8.02. LEGENDS. The Purchaser acknowledges that, until registered
under the Securities Act and any applicable state securities laws or transferred
pursuant to the provisions of Rule 144 promulgated under the Securities Act
("Rule 144"), each certificate representing a Share, whether upon initial
issuance or upon any transfer thereof, shall bear a legend (and the Company and
its transfer agent shall make a notation on its books of transfer to such
effect), prominently stamped or printed thereon, in substantially the following
form:
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"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR THE SECURITIES LAWS OF ANY APPLICABLE STATE OR OTHER JURISDICTION,
HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION
OR RESALE AND MAY NOT BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT COVERING SUCH SECURITIES UNDER THE ACT AND ANY SECURITIES
LAWS OF ANY APPLICABLE STATE OR OTHER JURISDICTION OR A WRITTEN
OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO
THE EFFECT THAT REGISTRATION IS NOT REQUIRED UNDER THE ACT OR UNDER
OTHER APPLICABLE SECURITIES LAWS."
SECTION 8.03. TERMINATION. If the Initial Closing has not occurred on or
prior to June 30, 1997, or if prior to the Initial Closing the Company or the
Purchaser has been notified that the United States Department of Justice or the
Federal Trade Commission, or any other Federal, state or other governmental
agency or instrumentality the consent of approval of which is contemplated by
the terms of this Agreement, any other Transaction Document, the Biogen
Agreement, the BML Collaboration Agreement or the Loan Agreement, is prepared to
(a) seek a preliminary injunction to enjoin the consummation of the transactions
contemplated hereunder or thereunder or (b) grant such consent or approval upon
the condition that any material action or forbearance of action not otherwise
specifically required of the party choosing to terminate pursuant to this
Section 8.03 be taken, then (i) the Company may terminate this Agreement by
written notice to the Purchaser and (ii) the Purchaser may terminate this
Agreement by written notice to the Company.
SECTION 8.04. ENTIRE AGREEMENT. This Agreement embodies the entire
agreement and understanding between the parties hereto with respect to the
provisions hereof and supersedes all prior oral or written agreements and
understandings relating to the provisions hereof. No statement, representation,
warranty, covenant or agreement of any kind not expressly set forth in this
Agreement shall affect, or be used to interpret, change or restrict, the express
terms and provisions of this Agreement.
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SECTION 8.05. MODIFICATIONS AND AMENDMENTS. The terms and provisions of
this Agreement may be modified or amended only by written agreement executed by
all parties hereto.
SECTION 8.06. WAIVERS AND CONSENTS. Except as other expressly provided
herein, the terms and provisions of this Agreement may be waived, or consent for
the departure therefrom granted, only by written document executed by the party
entitled to the benefits of such terms or provisions. No such waiver or consent
shall be deemed to be or shall constitute a waiver or consent with respect to
any other terms or provisions of this Agreement, whether or not similar. Each
such waiver or consent shall be effective only in the specific instance and for
the purpose for which it was given, and shall not constitute a continuing waiver
or consent.
SECTION 8.07. ASSIGNMENT. The rights and obligations under this Agreement
may not be assigned by either party hereto without the prior written consent of
the other party (which consent shall not be unreasonably withheld), except that
the Purchaser without the consent of the Company may assign this Agreement or
any of its rights or obligations to an Affiliate of the Purchaser or to an
entity with which the Purchaser shall merge or consolidate or to which the
Purchaser shall sell or assign all or substantially all of its assets, and
except that the Company without the consent of the Purchaser may assign this
Agreement to an entity with which the Company shall merge or consolidate or to
which the Company shall sell or assign all or substantially all of its assets.
SECTION 8.08. BENEFIT. All statements, representations, warranties,
covenants and agreements in this Agreement shall be binding on the parties
hereto and shall inure to the benefit of the respective successors and permitted
assigns of each party hereto. Nothing in this Agreement shall be construed to
create any rights or obligations except among the parties hereto, and no person
or entity shall be regarded as a third-party beneficiary of this Agreement.
SECTION 8.09. GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder shall be construed in
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accordance with and governed by the law of the State of Delaware, without
giving effect to the conflict of law principles thereof.
SECTION 8.10. SEVERABILITY. In the event that any court of competent
jurisdiction shall determine that any provision, or any portion thereof,
contained in this Agreement shall be unenforceable in any respect, then such
provision shall be deemed limited to the extent that such court deems it
enforceable, and as so limited shall remain in full force and effect. In the
event that such court shall deem any such provision, or portion thereof, wholly
unenforceable, the remaining provisions of this Agreement shall nevertheless
remain in full force and effect.
SECTION 8.11. INTERPRETATION. The parties hereto acknowledge and agree
that: (i) each party and its counsel reviewed and negotiated the terms and
provisions of this Agreement and have contributed to its revision; (ii) the rule
of construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all parties hereto and not in favor of or against any party, regardless of
which party was generally responsible for the preparation of this Agreement.
SECTION 8.12. HEADINGS AND CAPTIONS. The headings and captions of the
various subdivisions of this Agreement are for convenience of reference only and
shall in no way modify, or affect the meaning or construction of any of the
terms or provisions hereof.
SECTION 8.13. ENFORCEMENT. Each of the parties hereto acknowledges and
agrees that the rights acquired by each party hereunder are unique and that
irreparable damage would occur in the event that any of the provisions of this
Agreement to be performed by the other party were not performed in accordance
with their specific terms or were otherwise breached. Accordingly, in addition
to any other remedy to which the parties hereto are entitled at law or in
equity, each party hereto shall be entitled to an injunction or injunctions to
prevent breaches of this Agreement by the other party.
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SECTION 8.14. NO WAIVER OF RIGHTS, POWERS AND REMEDIES. No failure or
delay by a party hereto in exercising any right, power or remedy under this
Agreement, and no course of dealing between the parties hereto, shall operate as
a waiver of any such right, power or remedy of the party. No single or partial
exercise of any right, power or remedy under this Agreement by a party hereto,
nor any abandonment or discontinuance of steps to enforce any such right, power
or remedy, shall preclude such party from any other or further exercise thereof
or the exercise of any other right, power or remedy hereunder. The election of
any remedy by a party hereto shall not constitute a waiver of the right of such
party to pursue other available remedies. No notice to or demand on a party not
expressly required under this Agreement shall entitle the party receiving such
notice or demand to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the party giving such
notice or demand to any other or further action in any circumstances without
such notice or demand.
SECTION 8.15. EXPENSES. Each of the parties hereto shall pay its own fees
and expenses in connection with this Agreement and the transactions contemplated
hereby whether or not the transactions contemplated hereby are consummated.
SECTION 8.16 CONFIDENTIALITY. Each of the Purchaser, on the one hand, and
the Company, on the other hand, acknowledges and agrees that any information or
data it has acquired from the other, not otherwise properly in the public
domain, was received in confidence. Each party agrees not to divulge,
communicate or disclose, or use to the detriment of the disclosing party or for
the benefit of any other person or persons, or misuse in any way, any
confidential information of the disclosing party concerning the subject matter
hereof; PROVIDED that (i) the foregoing obligation with respect to the
disclosure and use of such information shall not apply to any information which
such party can demonstrate (A) was at the time of disclosure to such party or
thereafter, but prior to its disclosure by such party to any third party,
through no fault of such party, publicly available (other than as a result of
disclosure by such party), (B) has been disclosed to such party on a
nonconfidential basis from a source other than any other party which, to such
party's knowledge, was not prohibited from disclosing such information to
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such party by a legal, contractual, fiduciary or other obligation, (C) has
been independently developed by the such party without the violation of any
of my obligations under this Agreement, the Biogen Agreement, the BML
Collaboration Agreement or the Loan Agreement or (D) is required to be
disclosed by applicable law (including, without limitation, the federal
securities laws) and (ii) such party may, if required by subpoena or valid
legal process, disclose any such information, but only to the extent so
required and only after using its best efforts to give the other party or
parties (as the case may be) prior notice of such required disclosure in
order to afford such party or parties an opportunity to obtain an injunction,
a protective order or other relief.
SECTION 8.17 PUBLICITY. No party shall issue any press release or
otherwise make any public statement with respect to the execution of, or the
transactions contemplated by, this Agreement without the prior written consent
of the other party, except as may be required by applicable law, rule or
regulation; PROVIDED that once such other party has consented to a party's
issuance or making of a press release or public statement, any subsequent
issuance or making of such press release or public statement by such party shall
not require the separate written consent of the other party. However, the
parties recognize that the Purchaser and the Company are each a publicly held
company obligated under the federal securities laws to make disclosures of
material events affecting it. Consequently, if advised by counsel that such
party is required to make such announcement under Federal or state securities
laws, the Purchaser or the Company (as the case may be) may make such
announcement. Such party agrees promptly to inform the other party of such
advice by counsel, provide a copy of such announcement prior to disclosure and,
if practicable, to give the other party an opportunity to comment upon the form
of any required announcement.
SECTION 8.18. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by different parties hereto on separate counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
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IN WITNESS WHEREOF, the Company and the Purchaser have caused this
Agreement to be executed in their names by their duly authorized officers or
representatives effective as of the date first above written.
CV THERAPEUTICS, INC.
By: /s/ Louis Lange
------------------------------------------------
Name: Louis Lange
Title: CEO
BIOTECH MANUFACTURING LTD.
By: /s/ James H. M. Kirkness
------------------------------------------------
Name: James H. M. Kirkness
Title: Director
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EXHIBIT A
[COOLEY GODWARD LLP LETTERHEAD]
ALAN C. MENDELSON
415 843-5010
[email protected]
March 10, 1997
Biotech Manufacturing Ltd.
St. Paul's Gate
New Street
St. Helier, Jersey JE48Z
Channel Islands
Ladies and Gentlemen:
We have acted as counsel for CV Therapeutics, Inc., a Delaware corporation
(the "Company"), in connection with the negotiation and execution of that
certain Common Stock Purchase Agreement between the Company and you dated as
of the date hereof (the "Purchase Agreement"). We are rendering this opinion
pursuant to Section 4.02(iv) of the Purchase Agreement. Except as otherwise
defined herein, capitalized terms used but not defined herein have the
respective meanings given to them in the Purchase Agreement.
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Purchase Agreement by the various parties and originals or
copies certified to our satisfaction, of such records, documents,
certificates, opinions, memoranda and other instruments as in our judgment
are necessary or appropriate to enable us to render the opinion expressed
below.
As to certain factual matters, we have relied upon a certificate of an
officer of the Company or a certificate of the Transfer Agent of the Company
and have not sought to independently verify such matters. Where we render an
opinion "to the best of our knowledge" or concerning an item "known to us" or
our opinion otherwise refers to our knowledge, it is based solely upon (i) an
inquiry of attorneys within this firm who perform legal services for the
Company, (ii) receipt of a certificate executed by an officer of the Company
covering such matters, and (iii) such other investigation, if any, that we
specifically set forth herein.
In rendering this opinion, we have assumed: the genuineness and authenticity
of all signatures on original documents (except the signature on behalf of
the Company on the Purchase Agreement); the authenticity of all documents
submitted to us as originals; the conformity to originals of all documents
submitted to us as copies; the accuracy, completeness and authenticity of
certificates of public officials; and the due authorization, execution and
delivery of all documents (except the due authorization, execution and
delivery by the Company of the Purchase Agreement and the due authorization
by the Company of the Amendment to the Amended and Restated Investor Rights
Agreement adding you to the existing Amended and Restated Investor Rights
Agreement dated May 29, 1996 between the Company and certain investors (the
"Investor
<PAGE>
[COOLEY GODWARD LLP LETTERHEAD]
Biotech Manufacturing Ltd.
March 10, 1997
Page 2
Rights Agreement, as amended" and collectively, with the Purchase Agreement,
the "Agreements")), where authorization, execution and delivery are
prerequisites to the effectiveness of such documents. We have also assumed:
that all individuals executing and delivering documents had the legal
capacity to so execute and deliver; that you have received all documents you
were to receive under the Purchase Agreement; that the Purchase Agreement is
and the Investor Rights Agreement, as amended, will be obligations binding
upon the parties thereto other than the Company; that you have filed any
required California franchise or income tax returns and have paid any
required California franchise or income taxes; and that there are no
extrinsic agreements or understandings among the parties to the Purchase
Agreement and there will be no extrinsic agreements or understandings among
the parties to the Investor Rights Agreement, as amended, that would modify
or interpret the terms of the Agreements or the respective rights or
obligations of the parties thereunder.
We express no opinion herein concerning any laws other than the federal laws
of the United States, the laws of the State of California and the Delaware
General Corporation Law. We express no opinion as to whether the laws of any
particular jurisdiction apply, and no opinion to the extent that the laws of
any jurisdiction other than those identified above are applicable to the
subject matter hereof. We are not rendering any opinion as to compliance
with any antifraud law, rule or regulation relating to securities, or to the
sale or issuance thereof.
Our opinion in paragraph 2 below with respect to the Company's qualification
as a foreign corporation is based solely upon obtaining a certificate from an
officer of the Company to the effect that the Company does not own or lease
property or have employees or conduct business outside of the State of
California and that the Company has not been requested by the authorities of
any state to qualify as a foreign corporation for the transaction of business
in that state.
With regard to our opinion in paragraph 5 below, with respect to the number
of shares of Common Stock and Preferred Stock issued and outstanding, we have
examined and relied solely upon a certificate executed by the Transfer Agent
for the Company dated as of the close of business on March 7, 1997. With
respect to full payment of the outstanding capital stock, we have examined
and relied upon a certificate executed by an officer of the Company, to the
effect that the consideration for all outstanding shares of capital stock of
the Company was received by the Company in accordance with the provisions of
the applicable Board of Directors resolutions and any plan or agreement
relating to the issuance of such shares, and we have undertaken no
independent verification with respect thereto.
With regard to our opinion in paragraph 6 below with respect to material
defaults under any Specified Documents, we have relied solely upon (i)
inquiries of officers of the Company and
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[COOLEY GODWARD LLP LETTERHEAD]
Biotech Manufacturing Ltd.
March 10, 1997
Page 3
(ii) an examination of the agreements and documents set forth as exhibits to
the Company's Registration Statement on Form S-1, filed with the Securities
and Exchange Commission on November 19, 1996 (the "Specified Documents"). We
have made no further investigation.
On the basis of the foregoing, in reliance thereon and with the foregoing
qualifications, we are of the opinion that:
1. The Company has been duly incorporated and is a validly existing
corporation in good standing under the laws of the State of Delaware.
2. The Company has the requisite corporate power to own or lease its
property and assets and to conduct its business as it is currently being
conducted, is qualified as a foreign corporation to do business in California
and, to the best of our knowledge, is not required to qualify as a foreign
corporation to do business in any other jurisdiction in the United States.
3. The Purchase Agreement has been duly and validly authorized,
executed and delivered by the Company and constitutes a valid and binding
agreement of the Company enforceable against the Company in accordance with
its terms, except as rights to indemnification under the Purchase Agreement
may be limited by applicable laws and except as enforcement may be limited by
applicable bankruptcy, insolvency, reorganization, arrangement, moratorium or
other similar laws affecting creditors' rights, and subject to general equity
principles and to limitations on availability of equitable relief, including
specific performance.
4. The Investor Rights Agreement, as amended, has been duly and
validly authorized and when executed and delivered by the Company and the
other parties thereto, will constitute a valid and binding agreement of the
Company enforceable against the Company in accordance with its terms, except
as rights to indemnification under Section 3.5 of the Investor Rights
Agreement, as amended, may be limited by applicable laws and except as
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, arrangement, moratorium or other similar laws affecting
creditors' rights, and subject to general equity principles and to
limitations on availability of equitable relief, including specific
performance.
5. The Company's authorized capital stock consists of 30,000,000
shares of Common Stock, .001 par value, and 5,000,000 shares of undesignated
Preferred Stock, .001 par value. As of the date hereof, and excluding the
Initial Shares, 6,211,817 shares of Common Stock are issued and outstanding
and no shares of Preferred Stock are issued and outstanding. The outstanding
shares have been duly authorized and validly issued and are fully paid and
nonassessable. The Shares have been duly authorized, and upon issuance and
delivery pursuant
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[COOLEY GODWARD LLP LETTERHEAD]
Biotech Manufacturing Ltd.
March 10, 1997
Page 4
to the Purchase Agreement and against payment therefor in accordance with the
terms of the Purchase Agreement, will be validly issued, outstanding, fully
paid and nonassessable.
6. The execution, delivery and performance by the Company of the
Purchase Agreement and the issuance and sale of the Initial Shares as
contemplated by the Purchase Agreement do not violate any provision of the
Company's Amended and Restated Certificate of Incorporation or Restated
Bylaws, do not constitute a material default under the provisions of any
Specified Documents, and do not violate or contravene (a) any governmental
statute, rule or regulation applicable to the Company or (b) any order, writ,
judgment, injunction, decree, determination or award which has been entered
against the Company and of which we are aware, the violation or contravention
of which would materially and adversely affect the Company, its assets,
financial condition or operations.
7. No consents or approvals of any federal or state governmental body
or regulatory authority is required for the issuance and sale of the Initial
Shares, except for the filing of a Form D pursuant to Securities and Exchange
Commission Regulation D.
This opinion is intended solely for your benefit and is not to be made
available to or be relied upon by any other person, firm, or entity without
our prior written consent.
Very truly yours,
Cooley Godward LLP
Alan C. Mendelson
<PAGE>
Confidential treatment has been requested for portions of this document.
Brackets indicate portions of text that have been omitted. A separate filing
of such omitted text has been made with the Commission as part of the
Company's application for confidential treatment.
Execution Copy
LOAN AGREEMENT
This Agreement is made and entered into this 7th day of March, 1997 by
and between BIOTECH MANUFACTURING LTD. (hereinafter referred to as "BML"), a
wholly-owned subsidiary of Biogen, Inc. ("BIOGEN"), located at St. Paul's
Gate, New Street, St. Helier, Jersey JE48Z, Channel Islands, and CV
THERAPEUTICS, INC., a Delaware corporation, located at 3172 Porter Drive,
Palo Alto, CA 94304 (hereinafter referred to as "CVT").
WHEREAS, BML is a biopharmaceutical company which develops, manufactures,
markets and sells pharmaceutical products for human healthcare; and
WHEREAS, CVT is the owner and/or exclusive licensee of certain
technology, patent rights and other proprietary know-how related to CVT-124
and related molecules as hereinafter defined; and
WHEREAS, CVT is granting an exclusive right and license in and to
such technology, patent rights and proprietary know-how in the TERRITORY
pursuant to a Research Collaboration and License Agreement of even date
herewith between CVT and BML (the "BML AGREEMENT"); and
WHEREAS, CVT is granting an exclusive right and license in and to
such technology, patent rights and proprietary know-how outside the
TERRITORY pursuant to a Research Collaboration and License Agreement of even
date herewith between CVT and BIOGEN (the "BIOGEN AGREEMENT").
NOW, THEREFORE, in consideration of the mutual promises and other good
and valuable consideration, the parties agree as follows:
SECTION 1 - DEFINITIONS.
The terms used in this Agreement have the following meaning:
1.1 The term "AFFILIATE" as applied to either party shall mean any company
or other
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Execution Copy
legal entity other than the party in question, in whatever country organized,
controlling, controlled by or under common control with that party. The term
"control" means ownership or control, directly or indirectly, of at least
fifty percent (50%) of the outstanding stock or voting rights or the right to
elect or appoint a majority of the directors.
1.2 The term "first AGREEMENT YEAR" shall mean the twelve month period
commencing on the EFFECTIVE DATE. With respect to any year after the first
AGREEMENT YEAR, the term "AGREEMENT YEAR" shall mean the twelve month period
commencing upon an anniversary of the Effective Date.
1.3 The term "CVT-124" shall mean the [ * ] of epoxy norbornyl
xanthine, as defined as CVT-124 in the IND filed on September 20, 1995 and as
further described in U.S. Patent Application Serial No. [ * ].
1.4 The term "EFFECTIVE DATE" shall mean March 10, 1997.
1.5 The term "FIRST COMMERCIAL SALE" shall mean the initial transfer by
BML or any of its AFFILIATES or SUBLICENSEES of a PRODUCT to a THIRD PARTY in
exchange for consideration, following marketing approval by the appropriate
governmental agency for the country in which the transfer is made.
1.6 The term "TERRITORY" shall mean all countries and territories of the
world except: the United States and all other countries and territories in
North America and South America.
1.7 The use herein of the plural shall include the singular, and the use
of the masculine shall include the feminine.
SECTION 2 - LOAN COMMITMENT.
BML hereby commits to the following:
2.1 (a) BML shall, subject to the terms set forth below, make funds
available to
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* Confidential treatment requested.
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Execution Copy
CVT for general corporate purposes in the form of a loan or loans to CVT in
an amount not to exceed TWELVE MILLION AND NO/100 DOLLARS ($12,000,000.00)
(the "Loan"). Immediately upon the EFFECTIVE DATE, CVT may draw down on the
Loan an amount not to exceed THREE MILLION AND NO/100 DOLLARS ($3,000,000.00)
(the "Initial Installment"). Unless the BML AGREEMENT has been terminated
for any reason, CVT may, in such amounts and at such times as CVT, in it sole
discretion, may determine, draw down the remaining balance of the Loan (the
"Loan Remainder") over a period of two (2) Calendar Years (as defined below)
following the receipt of the Phase II Performance Assessment Study milestone
payment (the "Milestone Payment") pursuant to the BIOGEN AGREEMENT, PROVIDED
HOWEVER, that the total draw down amount shall not exceed FOUR MILLION FIVE
HUNDRED THOUSAND AND NO/100 DOLLARS ($4,500,000.00) in any Calendar Year. For
the purposes of this section, a "Calendar Year" commences on the date of the
Milestone Payment or an anniversary thereof and terminates twelve months
later. BML shall not be obligated to advance any funds under the Loan
Remainder at any time during which (i) an Event of Default has occurred and
is continuing under the Note (defined below); (ii) the total cash reserves
of CVT, as shown on its most recent balance sheet before the particular draw,
are less than $5 million during the first AGREEMENT YEAR, $7.5 million during
the second AGREEMENT YEAR, or $10 million thereafter; or (iii) any
proceeding, voluntary or involuntary, in bankruptcy or insolvency, is pending
against CVT, or a receiver is operating CVT with or without the consent of
CVT. BML's obligation to advance any funds under the Loan Remainder shall
terminate upon the earlier to occur of (i) the last day of the second
Calendar Year or (ii) termination or expiration of this Agreement.
(b) On the EFFECTIVE DATE CVT shall execute and deliver to BML an
unsecured note, substantially in the form set forth in APPENDIX A attached
hereto and made a part hereof (the "Note"), evidencing the Loan. CVT hereby
covenants not to incur or maintain any additional PARI PASSU or senior
indebtedness of any kind, other than leasehold improvements or
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Execution Copy
equipment lease financing in an aggregate amount not exceeding $10 million
(including any such debt outstanding as of the Effective Date), while any
amount due under the Note remains unpaid. Any junior indebtedness permitted
to be incurred pursuant to the previous sentence shall be subordinated to the
Note pursuant to a subordination agreement in form and substance reasonably
satisfactory to BML. The Note shall be subordinated to all debt of CVT
existing as of the date hereof and may be prepaid by CVT at any time without
penalty, in cash or, in the case of the Loan Remainder, in CVT Common Stock,
registered for resale, priced at its then Fair Market Value (as defined in
Section 2.1(i) below), subject to the provisions of subsections (g) and (i)
of this Section 2.1.
(c) The Note shall bear interest on the outstanding principal
amount thereof at a rate per annum equal to Prime (defined below) plus one
(1%) percent. Such interest shall be payable in cash annually commencing on
the one year anniversary of the date of execution of the Note and continuing
on each anniversary date until the Note is paid in full, regardless of the
repayment terms applicable to the principal amount of the Note as specified
in this Section 2.1. The applicable rate of interest for the Note shall be
adjusted semi-annually according to the Prime rate as announced on each
six-month anniversary date of the execution of the Note.
(d) Except as otherwise provided in subsection (f) hereof, CVT
shall repay the principal amount owed under the Initial Installment in cash
in sixty (60) equal monthly installments on the first day of each month
commencing on the third anniversary of the Effective Date and continuing on
the same day of each succeeding month such that the entire principal amount
due under the Initial Installment shall be paid in full by the eighth
anniversary of the Effective Date.
(e) Except as otherwise provided in this subsection (e) or in
subsection (f) hereof, CVT shall repay the principal amount owed under the
Loan Remainder solely out of royalties owed from BIOGEN and BML to CVT
according to the following schedule:
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Execution Copy
Beginning with the date that is eighteen (18) months after
the FIRST COMMERCIAL SALE of PRODUCT, BML's and BIOGEN's
royalty payments to CVT (as provided in Section 10.2(a) of
the BML AGREEMENT and Section 10.2(a) of the BIOGEN
AGREEMENT, respectively) shall be reduced by thirty-three
and one-third (33.3%) percent until the principal balance of
the Loan Remainder is paid in full.
In the alternative, CVT may, at its option, elect to repay the principal
amount owed under the Loan Remainder in CVT Common Stock, registered for
resale, priced at its then Fair Market Value, subject to the provisions of
subsections (g) and (i) of this Section 2.1.
(f) Notwithstanding the provisions of subsections (d) and (e)
hereof, if this Agreement is terminated for any reason, CVT shall repay the
principal and interest owed under the Initial Installment and the Loan
Remainder in 36 monthly installments commencing on the fifth (5th) business
day following the date the Agreement is terminated and continuing on the same
day of each succeeding month. Repayment of the Initial Installment shall be
made in cash; repayment of the Loan Remainder shall be made in cash or, at
CVT's option, in CVT Common Stock, registered for re-sale, priced at its then
Fair Market Value, subject to the provisions of subparagraphs (g) and (i) of
this Section 2.1.
(g) In the event CVT elects pursuant to subsection (b), (e) or (f)
hereof to repay all or a portion of the Loan Remainder in CVT Common Stock, CVT
shall give BML at least thirty (30) days advance written notice of the date and
amount of any repayment to be made in CVT Common Stock, and include in such
notice a calculation of the percentage of CVT's total shares of Common Stock
outstanding that would be held by BML and its AFFILIATES after the issuance of
such shares (assuming an issue price equal to the closing price of CVT Common
Stock on the day prior to such notice). Such notice shall irrevocably bind CVT
to make such payment
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Execution Copy
in the amount and on the date indicated, subject only to the following
provisos: (i) CVT shall have the right to extend the closing date by up to an
additional thirty (30) days in order to complete registration of the shares,
and (ii) if receipt of such Common Stock would cause BML's and its
AFFILIATES' holdings in CVT to exceed 19.9% of CVT's total shares of Common
Stock outstanding after the issuance of such shares to BML, BML may notify
CVT that it will not accept repayment in CVT Common Stock to the extent of
such excess. Within ten (10) days of receipt of such notification, CVT and
BML shall meet to negotiate in good faith to arrive at a mutually acceptable
alternative payment arrangement. If the parties are unable to agree on such
an alternative payment arrangement within thirty (30) days of CVT's receipt
of BML's notification, then the excess of the Loan Remainder shall be
repayable in sixty (60) equal monthly installments, commencing on the
expiration of such thirty (30) day negotiation period and continuing on the
same day of each succeeding month. Notwithstanding the foregoing, in order
to insure for CVT the benefits of the transactions contemplated in this
Agreement and the Common Stock Purchase Agreement between the parties of even
date herewith (the "Stock Purchase Agreement"), to the extent that BML has
acquired Voting Securities (as defined in the Stock Purchase Agreement) in
transactions other than those described in Article III of the Stock Purchase
Agreement and in this Agreement ("Other Voting Securities") BML will sell
such Other Voting Securities in order to permit the repayment of the Loan
Remainder in CVT Common Stock as contemplated herein without violation of the
19.9% limit on BML's and its AFFILIATES' ownership in CVT as set forth above.
(h) For purposes of subsection (c) of this Section 2.1,
"Prime" shall mean the floating rate of interest reported by the WALL STREET
JOURNAL as the prevailing base rate on corporate loans posted by at least 75%
of the 30 largest banks in the United States. In the event that the WALL
STREET JOURNAL ceases to publish such a rate, or modifies its criteria for
such rate, the term "Prime" shall mean the generally prevailing base
corporate lending rate of large United States
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banks as determined in good faith by BML.
(i) For purposes of subsection (b), (e) and (f) of this Section
2.1, "Fair Market Value" of CVT Common Stock shall mean: the average of the
closing prices as reported by NASDAQ or, if not traded on NASDAQ, by such
other principal securities exchange on which the shares are traded, as
applicable, over the twenty (20) trading days preceding the date on which
payment is due (or in the case of an extension pursuant to subsection (g)(i),
the date on which the payment is made). BML and CVT shall execute and
deliver at the time of issuance of any shares in repayment of the Loan
Remainder a stock purchase agreement containing customary representations and
warranties and indemnities in form and substance similar to those set forth
in the Stock Purchase Agreement and the related Amended and Restated Investor
Rights Agreement, as amended, and customary provisions regarding registration
of the shares. Delivery of any shares of Common Stock shall take place no
later than five (5) days after the repayment date.
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<PAGE>
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(j) BML will not, nor will it permit any of its Affiliates (as such
term is used in Rule 12b-2 of the Securities Exchange Act of 1934 (the
"Exchange Act"), such term to have such definition as used throughout this
Agreement) to, from the date CVT gives BML notice of its election under
subsection (e) above to repay the principal amount of the Loan Remainder in
CVT Common Stock until the applicable determination of "Fair Market Value" of
CVT Common Stock hereunder, (a) acquire any Voting Securities (as defined in
Section 7.01 of the Stock Purchase Agreement), (b) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase,
or otherwise transfer or dispose of, directly or indirectly, any Voting
Securities or (c) enter into any swap or similar agreement that transfers, in
whole or in part, the economic risk of ownership of Voting Securities,
whether any such transaction described in clause (a), (b) or (c) above is to
be settled by delivery of Voting Securities or such other securities, in cash
or otherwise.
(k) COMPLIANCE WITH NASDAQ STOCK MARKET RULE 4460(i)(1)(D).
Notwithstanding any provision of this Agreement to the contrary, except as
otherwise permitted by the rules of the NASDAQ Stock Market, CVT shall in no
event be obligated to issue, and BML shall in no event be obligated to
accept, in repayment of the Loan Remainder, shares of CVT Common Stock to the
extent that such issuance would result in the number of shares of Common
Stock tendered hereunder and purchased pursuant to the Stock Purchase
Agreement constituting (i) the sale or issuance of 20% or more of the Common
Stock or (ii) the sale or issuance of securities constituting 20% or more of
voting power for less than the greater of book or market value.
SECTION 3 - REPRESENTATIONS AND WARRANTIES.
3.1 Each party represents and warrants to the other party that: (i) it is
free to enter into this Agreement; (ii) in so doing, it will not violate any
other agreement to which it is a party; and (iii) it has taken all corporate
action necessary to authorize the execution and delivery of this
-8-
<PAGE>
Execution Copy
Agreement and the performance of its obligations under this Agreement.
3.2 Each party represents that it is not aware of any action, suit,
inquiry or investigation or any claim, demand or notice of default which if
adversely determined would affect the rights granted under this Agreement.
SECTION 4 - ASSIGNMENT; SUCCESSORS.
4.1 This Agreement shall not be assignable by BML without the prior
written consent of CVT (which consent shall not be unreasonably withheld),
except that BML without the consent of CVT may assign this Agreement or any
of its rights and obligations hereunder to an AFFILIATE or to an entity with
which BML shall merge or consolidate or to which BML shall sell or assign all
or substantially all of its assets. CVT may not assign this Agreement or any
rights hereunder without the express written consent of BML. In the event CVT
merges or consolidates with, or sells or assigns all or substantially all of
its assets to, an entity, then, notwithstanding any contrary provision
hereof, (a) BML shall not be obligated to advance any further sums pursuant
hereto, and (b) all sums then outstanding under the Note shall be repayable
in cash in 36-monthly equal installments commencing on the date of such event
and continuing on the same day of each succeeding month.
4.2 Subject to the limitations on assignment herein, this Agreement
shall be binding upon and inure to the benefit of said successors in interest
and assigns of CVT and BML.
SECTION 5 - TERMINATION.
5.1 Except as otherwise provided herein, this Agreement shall terminate
on the earlier to occur of (i) the termination of the BML AGREEMENT, or (ii)
the last day of the second Calendar Year.
5.2 Either party to this Agreement may, upon giving notice of
termination, immediately
-9-
<PAGE>
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terminate this Agreement upon receipt of notice that the other party has
become insolvent or has suspended business in all material respects hereof,
or has consented to an involuntary petition purporting to be pursuant to any
reorganization or insolvency law of any jurisdiction, or has made an
assignment for the benefit of creditors or has applied for or consented to
the appointment of a receiver or trustee for a substantial part of its
property.
5.3 CVT's repayment obligation under the Note shall survive any
termination of this Agreement.
SECTION 6 - GENERAL PROVISIONS.
6.1 This Agreement, the BML AGREEMENT, the BIOGEN AGREEMENT, and the
Stock Purchase Agreement between the parties of even date herewith set forth
the entire agreement and understanding between the parties as to the subject
matter hereof and supersede all prior agreements in this respect. There
shall be no amendments or modifications to these Agreements, except by a
written document which is signed by both parties.
6.2 This Agreement shall be construed and enforced in accordance with
the laws of the State of Delaware, U.S.A. without reference to its
choice-of-law principles.
6.3 The headings in this Agreement have been inserted for the
convenience of reference only and are not intended to limit or expand on the
meaning of the language contained in the particular or section or paragraph.
6.4 Any delay in enforcing a party's rights under this Agreement or any
waiver as to a particular default or other matter shall not constitute a
waiver of a party's right to the future enforcement of its rights under this
Agreement, excepting only as to an expressed written and signed waiver as to
a particular matter for a particular period of time.
6.5 NOTICES. Any notices given pursuant to this Agreement shall be in
writing and shall be deemed delivered upon the earlier of (i) when received
at the address set forth below, or (ii)
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<PAGE>
Execution Copy
three (3) business days after mailed by certified or registered mail postage
prepaid and properly addressed, with return receipt requested, or (iii) when
sent, if sent, by facsimile, as confirmed by certified or registered mail.
Notices shall be delivered to the respective parties as indicated:
If to CVT: CV Therapeutics, Inc.
3172 Porter Drive
Palo Alto, CA 94304
Attn: CEO
with a copy to: Cooley Godward LLP
3000 El Camino Real
Palo Alto, CA 94306
Attn: Robert L. Jones, Esq.
Deborah A. Marshall, Esq.
If to BML: Biotech Manufacturing Ltd.
St. Paul's Gate
New Street
St. Helier, Jersey JE48Z
Channel Islands
with a copy to: Biogen, Inc.
14 Cambridge Center
Cambridge, MA 02142
Attn: Vice President - General Counsel
6.6 This Agreement may be executed in any number of separate
counterparts, each of which shall be deemed to be an original, but which
together shall constitute one and the same instrument.
-11-
<PAGE>
Execution Copy
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.
CV THERAPEUTICS, INC. BIOTECH MANUFACTURING LTD.
By: /s/ Louis Lange By: /s/ James H.M. Kirkness
----------------------------- ------------------------------
Name: Louis Lange Name: James H.M. Kirkness
--------------------------- ----------------------------
Title: CEO Title: Director
-------------------------- ---------------------------
-12-
<PAGE>
APPENDIX A
FORM OF NOTE
<PAGE>
PROMISSORY NOTE
$12,000,000.00 MARCH 10, 1997
FOR VALUE RECEIVED, the undersigned, CV THERAPEUTICS, INC. (the
"Borrower"), having an address at 3172 Porter Drive, Palo Alto, California
94304, hereby promises to pay to the order of BIOTECH MANUFACTURING LIMITED,
having an address at St. Paul's Gate, New Street, St. Heller, Jersey JE48Z,
Channel Islands (the "Lender"), the principal sum of
TWELVE MILLION DOLLARS ($12,000,000)
or such lesser sum which may from time to time be advanced pursuant to the
terms of the Loan Agreement dated March 7, 1997 between the Borrower and the
Lender (the "Agreement"). Capitalized terms used herein and not defined
herein have the meanings assigned to them in the Agreement.
PRINCIPAL
(a) The Borrower shall pay the principal balance of this note which
represents the Initial Installment in sixty (60) equal consecutive monthly
payments commencing on March 10, 2000 and continuing on the like day of each
subsequent month until February 10, 2005. The last principal payment shall
include all other amounts due hereunder (including, without limitation, all
accrued interest plus costs of collection); except any amounts of principal
that are not yet due on account of the Loan Remainder. All payments pursuant
to paragraph (a) hereunder shall be in cash.
(b) Except as otherwise provided in paragraph (c) hereof, the Borrower
shall pay the principal balance of this note which represents the Loan
Remainder out of royalties owed from Lender and BIOGEN to Borrower according
to the following schedule:
(i) Beginning on the date that is eighteen (18) months after the
FIRST COMMERCIAL SALE of PRODUCT, Lender's and BIOGEN's royalty payments to
Borrower (as provided in Section 10.2(a) of the BML AGREEMENT and Section
10.2(a) of the BIOGEN AGREEMENT, respectively) shall be reduced by
thirty-three and one-third (33.3%) percent and the amount of reduction shall
be deducted from the principal balance of the Loan Remainder until the Loan
Remainder is reduced to zero (0), at which time the principal balance of the
Loan Remainder shall be deemed to have been paid in full.
In the alternative, if no Event of Default has occurred and is continuing
under the Note, the Borrower may, at its option, elect to repay the principal
amount owed under the
<PAGE>
Loan Remainder in CVT Common Stock, registered for resale, priced at its then
Fair Market Value, subject to the provisions of Sections 2.1(g) and 2.1(i) of
the Agreement.
(c) Notwithstanding paragraphs (a) and (b), if the Agreement is
terminated for any reason, Borrower shall repay the principal owed under the
Initial Installment and the Loan Remainder in 36-monthly equal installments
commencing on the date the Agreement is terminated and continuing on the same
day of each succeeding month, with the final payment to be accompanied by a
payment of all other amounts due hereunder. Repayment of the Initial
Installment shall be made in cash; repayment of the Loan Remainder shall be
made in cash or, in the absence of a default, at the option of Borrower, in
CVT Common Stock, registered for resale, priced at its then Fair Market
Value, subject to the provisions of Sections 2.1(g) and 2.1(i) of the
Agreement.
(d) Notwithstanding anything contained in paragraph (b) and (c) above,
Lender may require that Borrower repay amounts borrowed in cash rather than
CVT Common Stock to the extent necessary to ensure that the repayment of
Common Stock will not cause Lender's and its AFFILIATES' holdings in Borrower
to exceed nineteen and nine-tenths (19.9%) percent of CVT's total shares of
Common Stock outstanding after the completion of such sales to Lender, as set
forth in Section 2.1(g) of the Agreement.
INTEREST
Interest shall accrue on the outstanding principal balance hereunder at a
rate per annum equal to Prime plus 1%. Prime shall be determined and adjusted
in accordance with Section 2.1(h) of the Agreement. Payments of interest
shall be made annually commencing on the one year anniversary date of the
execution of the Note and continuing on each anniversary date until all
amounts due hereunder have been paid in full. The applicable rate of interest
shall be adjusted semi-annually according to the Prime Rate as announced on
each six month anniversary date. Interest shall be calculated on the basis of
actual days elapsed and a 360-day year.
The advances described in the Agreement and made by the Lender to the
Borrower, and all repayments made on the account of principal thereof, shall
be recorded by the Lender, on the Schedule attached hereto which is a part of
this Note; provided, however, that the failure of the Lender so to record on
this Note (or any error in recording on this Note) shall not affect the
Borrower's obligations hereunder.
Payments hereon are to be made in lawful money of the United States of
America or in any other permitted manner set forth in the Agreement at the
Lender's address set forth above or such other address as the Lender shall
designate in writing to the Borrower.
<PAGE>
If any amount due under this Note is not paid in full within 10 days of
the due date, whether as stated or by acceleration, interest on the unpaid
principal balance shall continue to accrue and shall thereafter be increased
effective as of such due date to a rate per annum equal to three (3%) percent
above the Prime Rate.
It is the intent of the Lender and of the Borrower that in no event shall
interest be payable at a rate in excess of the maximum rate permitted by
applicable law (the "Maximum Legal Rate"). Solely to the extent necessary to
prevent interest under this Note from exceeding the Maximum Legal Rate, any
amount that would be treated as excessive under a final judicial
interpretation of applicable law shall be deemed to have been a mistake and
automatically canceled and, if received by the Lender, shall be applied to
the principal balance of this Note or, if no principal balance remains
outstanding, then such amount shall be refunded to the Borrower.
The Borrower may voluntarily prepay this Note in whole or in part at any
time and from time to time without penalty, together with interest accrued on
the amount prepaid through the date of prepayment. Prepayments of principal
which represents the Initial Installment shall be made in cash; prepayments
of principal which represents the Loan Remainder shall be made in cash or, in
the absence of a default, at the option of the Borrower, in CVT Common Stock,
registered for resale, priced at its then Fair Market Value, subject to the
provisions of Sections 2.1(g) and 2.1(i) of the Agreement.
Upon the occurrence of any one or more of the following events (each, an
"Event of Default") subject to expiration of any applicable grace or cure
periods, the Lender at its option may declare all amounts due hereunder,
including, without limitation, the entire unpaid principal balance of this
Note and any accrued, unpaid interest thereon, to be immediately due and
payable in cash without notice or protest (both of which are hereby waived):
(a) The failure to make any payment of principal or interest due
pursuant to the terms of this Note within ten (10) days after the due
date;
(b) The failure to promptly, punctually, and faithfully perform or
discharge any material liability or obligation of the Borrower to the
Lender;
(c) The material breach by Borrower of any material covenant set
forth in the Agreement;
(d) The determination by the Lender that any material representation
or warranty now or hereafter made by the Borrower to the Lender in any
document, instrument, agreement, or paper was not true or accurate
when given;
<PAGE>
(e) The commencement by the Borrower of a voluntary case under 11
U.S.C. '101 ET. SEQ. (the "Bankruptcy Code") or any foreign, federal
or state bankruptcy, insolvency or other similar law now or hereafter
in effect, or (ii) the consent by the Borrower to the entry of an
order for relief in an involuntary bankruptcy or similar case, or to
the conversion of an involuntary case to a voluntary case, under any
such law, or (iii) the consent by the Borrower to the appointment of,
or the taking of possession by, a receiver, trustee or other custodian
for all or a substantial part of its properties, or (iv) the making by
the Borrower of any assignment for the benefit of creditors, or (v)
the admission by the Borrower in writing of its inability to pay its
debts as such debts become due, or (vi) the death, discontinuance of
business, dissolution, winding up, liquidation or cessation of
existence by the Borrower;
(f) The entry by a court of a decree or order for relief with respect
to the Borrower in an involuntary case under the Bankruptcy Code or
any applicable foreign, federal or state bankruptcy, insolvency or
other similar law now or hereafter in effect, which decree or order is
not stayed or dismissed within 60 days of the entry thereof, or (ii)
the entry by a court of a decree or order for the appointment of a
receiver, liquidator, sequestrator, trustee, custodian or other person
having similar powers over the Borrower or over all or a substantial
part of its properties;
(g) A judgment, decree, writ, warrant of attachment or similar
process in an amount equal to or exceeding ten percent (10%) of
Borrower's "Free Cash" ["Free Cash" = unrestricted cash less debt owed
to third parties other than Lender] is entered against the Borrower or
any of its assets, if such judgment, decree, writ, warrant of
attachment or similar process is not adequately covered by insurance
or has not been vacated, discharged, appealed from (with execution or
similar process continuously stayed) within fifteen (15) days of such
judgment's entry;
(h) The service of any process upon the Lender seeking to attach by
mesne or trustee process, or otherwise, any funds of the Borrower on
deposit with the Lender or owed by the Lender to the Borrower;
(i) The occurrence of any event such that any indebtedness of the
Borrower, in an amount equal to or exceeding ten percent (10%) of
Borrower's Free Cash, which is owed to a person or entity other than
the Lender could be accelerated, notwithstanding that such
acceleration has not taken place; and
(j) The beneficial ownership at any time of forty percent (40%) or
more of
<PAGE>
the issued and outstanding capital stock of the Borrower having
voting rights becomes owned by persons or entities who were not
such owners on the date of execution of this Note.
Upon the occurrence and continuance of any Event of Default hereunder,
(i) the Lender may declare the principal balance of this Note to be
immediately due and payable in cash, PROVIDED, HOWEVER, in the case of an
Event of Default described in paragraphs (e) or (f) above, all amounts
payable by the Borrower hereunder, including, without limitation, the
principal balance and all accrued interest on this Note, shall automatically
become immediately due and payable in cash, without notice, action or
election by the Lender, and (iii) the Lender may enforce any other rights
granted pursuant to this Note, any other document, or by applicable law. All
of the rights of the Lender hereunder shall be cumulative and not exclusive,
and each of which may be exercised singly, repetitively, in any combination,
and in any order. The Lender's rights and remedies hereunder, subject to the
limitation expressed in Section 2.1(b) of the Agreement, may be exercised
without resort or regard to any other source of satisfaction of any
liabilities owing by the Borrower to the Lender. No inconsistency between the
default provisions of this Note and any other agreement shall be deemed to
create any additional notice, cure or grace period or derogate from the
express terms of such provisions.
The Borrower agrees to pay on demand all costs and expenses (including,
without limitation, the reasonable fees and out-of-pocket expenses of legal
counsel) incurred by the Lender in connection with enforcing or exercising
any rights or remedies under this Note, whether or not legal action is
instituted. Any fees, expenses or other charges which the Lender is entitled
to receive from the Borrower hereunder shall constitute an obligation of the
Borrower pursuant to this Note, and shall bear interest until paid at a rate
per annum equal to the maximum rate in effect and permitted hereunder.
Any deposits or other sums at any time credited by or due from the Lender
to the Borrower, and any securities or other property of the Borrower which,
at any time, shall be in the possession of the Lender, may be held and
treated as collateral for the payment of this Note and any and all other
liabilities (direct or indirect, absolute or contingent, sole, joint, or
several, secured or unsecured, due or to become due, now existing or
hereafter arising) of the Borrower to the Lender. Upon the occurrence of an
Event of Default, subject to the expiration of any applicable grace or cure
periods, and to the limitation expressed in Section 2.1(b) of the Agreement,
and regardless of the adequacy of collateral, the Lender may apply or set off
such deposits or other property against such liabilities.
The Borrower hereby waives presentment, demand, protest or notice of any
kind in connection with this Note. No failure on the part of the Lender in
exercising any right or remedy hereunder, and no single, partial or delayed
exercise by the Lender of any right or remedy shall preclude the full and
timely exercise by the Lender at any time of any right or
<PAGE>
remedy of the Lender hereunder without notice. No course of dealing or other
conduct, no oral agreement or representation made by the Lender or usage of
trade shall operate as a waiver of any right or remedy of the Lender. This
Note contains the entire agreement between the parties with respect to the
subject matter hereof, and supersedes every course of dealing, other conduct,
oral agreement or representation previously made by the Lender. In the event
that any court of competent jurisdiction shall determine that any provision,
or portion thereof, contained in this Note shall be unenforceable in any
respect, then such provision shall be deemed limited to the extent that such
court deems it enforceable, and the remaining provisions of this Note shall
nevertheless remain in full force and effect.
None of the terms or provisions of this Note may be excluded, modified,
or amended except by a written instrument duly executed on behalf of both the
Borrower and the Lender expressly referring hereto and setting forth the
provision so excluded, modified or amended. No waiver or forbearance of any
of the rights and remedies of the Lender hereunder shall be effective unless
made specifically in a writing signed by the Lender, and any such waiver or
forbearance shall be effective only in the specific instance and for the
specific purpose for which given.
This Note is the "Note" referred to in the Agreement and is entitled to
all of the rights and benefits referred to therein.
This Note shall be binding upon the Borrower and shall be enforceable
against the Borrower and its heirs, successors and representatives, and shall
inure to the benefit of the Lender and its successors, endorsees and assigns.
The Borrower may not assign this Note or any rights hereunder without the
express written consent of the Lender.
In the event CVT merges or consolidates with, or sells or assigns all or
substantially all of its assets to, an entity, then, notwithstanding any
contrary provision hereof or of the Agreement, (a) Lender shall not be
obligated to advance any further sums pursuant to the Agreement, and (b) all
sums then outstanding hereunder shall be repayable in cash in 36-monthly
equal installments commencing on the date of such event and continuing on the
same day of each succeeding month.
If more than one Borrower signs this Note, the term "Borrower" shall
include each such signatory, individually and collectively, and each such
signatory, together with any endorser' or guarantor of this Note, shall be
jointly and severally liable hereunder. No person obligated on account of
this Note may seek contribution from any other person also obligated hereon
unless and until all liabilities to the Lender of the person from whom
contribution is sought have been satisfied in full.
THIS NOTE IS DELIVERED TO THE LENDER AT ITS PRINCIPAL OFFICE IN
<PAGE>
ST. HELIER, JERSEY, CHANNEL ISLANDS, AND SHALL BE GOVERNED BY, AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAWS AND SHALL TAKE EFFECT AS A
SEALED INSTRUMENT.
THE BORROWER HEREBY EXPRESSLY, KNOWINGLY AND VOLUNTARILY WAIVES ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF, IN
CONNECTION WITH, OR RELATED TO THIS NOTE, INCLUDING, WITHOUT LIMITATION, IN
CONNECTION WITH ANY DEFENSE, AFFIRMATIVE DEFENSE, COUNTERCLAIM OR THE LIKE
ASSERTED AGAINST THE LENDER.
<PAGE>
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed as
an instrument under seal by its duly authorized officer as of the date first
above written.
witness: CV THERAPEUTICS, INC.
- ------------------------------- -----------------------------
(Signature)
By:
--------------------------
(Print or type name)
Its:
-------------------------
(Title or Capacity)
<PAGE>
EXHIBIT 11.1
CV THERAPEUTICS, INC.
COMPUTATION OF NET LOSS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1997 1996
---- ----
<S> <C> <C>
Net loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,885) $(3,379)
------- -------
------- -------
Historical:
Weighted average common stock outstanding:. . . . . . . . . . . . . . . 6,346 370
Shares related to Staff Accounting Bulletins Nos. 55, 64 and 83:
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . - 340
Warrants. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 965
------- -------
Total shares used in calculating net loss per share . . . . . . . . . . . 6,346 1,675
------- -------
------- -------
Net loss per share. . . . . . . . . . . . . . . . . . . . . . . . . . . . $(0.30) $(2.02)
------- -------
------- -------
Pro forma:
Shares used in calculating net loss per share (per above) . . . . . . . 1,675
Preferred Stock if-converted: . . . . . . . . . . . . . . . . . . . . . 2,573
-------
Total shares used in calculating pro forma net loss per share . . . . . . 4,248
-------
Pro forma net loss per share. . . . . . . . . . . . . . . . . . . . . . . $(0.80)
-------
-------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 17,300,000
<SECURITIES> 14,100,000
<RECEIVABLES> 1,100,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 31,900,000
<PP&E> 6,100,000
<DEPRECIATION> 3,200,000
<TOTAL-ASSETS> 38,800,000
<CURRENT-LIABILITIES> 4,000,000
<BONDS> 7,200,000
0
0
<COMMON> 70,600,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 38,800,000
<SALES> 0
<TOTAL-REVENUES> 800,000
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 2,800,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 100,000
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,900,000)
<EPS-PRIMARY> (0.30)
<EPS-DILUTED> (0.30)
</TABLE>
