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Korea M&A Corporation
LETTER OF INTENT 본문
LETTER OF INTENT
THIS LETTER OF INTENT is made on the 11th day of June 1998, by and
between Agouron Pharmaceuticals, Inc., a corporation duly organized and existing
under the laws of the state of California, having a principal place of business
at 10350 North Torrey Pines Road, La Jolla, California 92037 (hereinafter called
"Agouron"), and The Immune Response Corporation, a corporation duly organized
and existing under the laws of the state of Delaware, having a principal place
of business at 5935 Darwin Court, Carlsbad, California 92008 (hereinafter called
"Immune Response"). Agouron and Immune Response are sometimes hereinafter
referred to as a party (collectively "parties") to this Agreement.
BACKGROUND
In accordance with the terms of this Letter of Intent, Immune Response has
agreed to license to Agouron the exclusive rights necessary or useful for the
registration and/or commercialization of the product known as REMUNE, a
non-infectious intact Human Immunodeficiency Virus ("HIV") devoid of outer
envelope proteins. This Letter of Intent, which shall be binding on the parties,
sets forth the basic license terms upon which the parties have agreed. The full
terms of the license will be set forth in a definitive agreement to be prepared
as described below.
NOW, THEREFORE, the parties agree as follows:
1. Terms. The parties hereby enter into this Letter of Intent to confirm their
entering into a license agreement on terms substantially in accordance with
those contained in Exhibit A hereto. The parties acknowledge that Exhibit A
states the basic terms of the understanding between the parties and anticipate
the further negotiation and preparation of an agreement containing the full
terms of the license between the parties ("Definitive Agreement"). Each party
agrees to act in good faith in an effort to negotiate, execute and deliver the
Definitive Agreement on or before September 1, 1998. If the Definitive Agreement
is not executed by September 1, 1998, the provisions of this Letter of Intent
shall continue in effect until the Definitive Agreement is executed, and the
parties will continue to negotiate in good faith in an effort to execute and
deliver the Definitive Agreement as soon as possible.
2. Disclosure. The parties shall jointly prepare and release a statement about
the existence of this Letter of Intent and of the license between Agouron and
Immune Response. Except as agreed to by the parties, neither Agouron nor Immune
Response shall release any further information to any third party who is not
under an obligation of confidentiality with respect thereto about any of the
terms of this Letter of Intent, or of the license, or of results of clinical
trials of REMUNE, without the prior written consent of the other, which consent
shall not unreasonably be withheld. This prohibition includes, but is not
limited to, press releases, educational and scientific conferences, promotional
materials and discussions with the media. If a party determines that it is
required by law to release information to any third party regarding such
matters, it shall notify the other party of this
*** - Confidential treatment requested. Sections of text which have been
omitted and for which confidential treatment is requested are noted with
"***". An unredacted version of this document has been filed separately
with the Securities and Exchange Commission.
<PAGE>
fact prior to releasing the information. The notice to the other party shall
include the text of the information proposed for release. The other party shall
have the right to confer with the notifying party regarding the necessity for
the disclosure and the text of the information proposed for release.
3. Miscellaneous. This Letter of Intent contains the entire agreement between
the parties as of the date hereinabove written on the matters set forth herein
and shall be governed by and construed in accordance with the laws of the State
of California. Exhibit A describes the parties' understanding with respect to
the registration and commercialization of the "Product" as defined therein. This
Letter of Intent, including Exhibit A, shall not be amended, supplemented or
otherwise modified, except by an instrument in writing signed by duly authorized
officers of both parties. Each party shall bear all of the expenses incurred by
it in connection with the negotiation and preparation of this Letter of Intent
and the Definitive Agreement. Each party represents and warrants that it is not
presently bound by any agreement with any third party which limits its
performance of any of the obligations or activities provided for under this
Letter of Intent or contemplated by the Definitive Agreement. Immune Response
represents and warrants that it is not aware of any patents, patent applications
and/or know-how that it does not have the right to license to Agouron which is
necessary or useful for commercialization of Product by Agouron. Immune Response
further represents and warrants that it will not enter into any agreements which
limit Immune Response's performance of any of the obligations or activities
provided for under this Letter of Intent or contemplated by the Definitive
Agreement. Immune Response, at its expense, shall obtain any government
approval(s) not related to drug product registration, which are required to
enable this Agreement to become effective. At any time after October 15, 1998,
Agouron may elect to immediately terminate, in their entirety, all of its rights
and obligations under this Letter of Intent and the Definitive Agreement, except
that Agouron may exercise this right to terminate only on the basis of its
concerns related to the safety, efficacy, competitiveness, or commercial
feasibility of Product.
IN WITNESS WHEREOF, the parties hereto have executed this Letter of
Intent by their respective officers thereunto duly authorized, as of the date
hereinabove written. This Letter of Intent may be executed in counterparts and
all of such counterparts taken together shall be deemed to constitute one and
the same instrument.
THE IMMUNE RESPONSE CORPORATION AGOURON PHARMACEUTICALS, INC.
By: s/Dennis J. Carlo By: s/Peter Johnson
------------------------------- ----------------------------
Name: Dennis J. Carlo Name: Peter Johnson
------------------------------- ----------------------------
Title: President Title: President
------------------------------- ----------------------------
By: s/Charles J. Cashion By: s/Gary Friedman
------------------------------- ----------------------------
Name: Charles J. Cashion Name: Gary Friedman
------------------------------- ----------------------------
Title: Senior VP Title: Secretary
------------------------------- ----------------------------
2
<PAGE>
EXHIBIT A
Immune Response, under the terms and conditions specified below, hereby grants
Agouron the exclusive right to use, offer for sale, sell and/or import, in or
into the Licensed Territory, the Product under applicable Immune Response Patent
Rights (including claims therein relating to compositions and methods of use)
and using applicable Immune Response Know-How.
1. Definitions: Except as otherwise set forth herein, items containing an
initial capitalized letter shall have the meaning stated below or in
the Letter of Intent to which this Exhibit A is an attachment ("LOI").
(a) "Product" means a pharmaceutical product comprising a
non-infectious intact HIV devoid of outer envelope proteins
whose manufacture, use or sale infringes (in the absence of
the license rights granted under this Exhibit A) a valid claim
(which has not been abandoned, disclaimed or declared invalid
in a non-appealable order) included in an issued patent within
the Immune Response Patent Rights.
(b) "Licensed Territory" means all countries of the world except
the countries listed in Schedule 1.
(c) "Affiliate" means any person, organization or entity which is,
directly or indirectly, controlling, controlled by, or under
common control with Agouron or Immune Response, as the case
may be. The term "control" (including, with correlative
meaning, the terms "controlled by" and "under common control
with"), as used with respect to any person or entity, means
the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such
person, organization or entity, whether through the ownership
of voting securities, or by contract, or court order, or
otherwise. The ownership of voting securities of a person,
organization or entity shall not, in and of itself, constitute
"control" for purposes of this definition, unless said
ownership is of a majority of the outstanding securities
entitled to vote of such person, organization or entity.
Affiliate shall also mean a limited partnership in which a
subsidiary of Agouron and/or Immune Response is a general
partner.
(d) "Immune Response Patent Rights" means (i) the patents and the
patent applications referred to in Schedule 2 of this Exhibit
A; (ii) all patents arising from said applications, and all
patents and patent applications based on, claiming the
priority date(s) of, or corresponding to any of the foregoing;
or (iii) any reissues, extensions (or other governmental
actions that provide exclusive rights to the patent holder in
the patented subject matter beyond the original patent
expiration date), substitutions, confirmations, registrations,
revalidations, re-examinations, additions, continuations,
continuations-in-part, or divisions of or to any of the
foregoing.
*** - Confidential treatment requested. Sections of text which have been
omitted and for which confidential treatment is requested are noted with
"***". An unredacted version of this document has been filed separately
with the Securities and Exchange Commission.
A-1
<PAGE>
(e) "Immune Response Know-How" means any know-how, trade secret,
experimental data, formula, expert opinion, experimental
procedure, and other confidential and/or proprietary
information specifically concerning the Product that is
Controlled by Immune Response and that is necessary or useful
for either: (i) the formulation, manufacture, use and/or
application of the Product; or (ii) obtaining registration of
the Product.
(f) "Control" and "Controlled" mean possession of the ability to
grant a license or sublicense as provided for herein without
violating the terms of any agreement with, or arrangement
with, any third party.
(g) The terms "Net Sales," "Pre-Tax Profits," "Allowable Expenses"
and "Manufacturing Transfer Markup" shall be fully defined in
the Definitive Agreement. The terms "Net Sales and "Allowable
Expenses" shall be determined in accordance with generally
accepted accounting principles and the usual and customary
practices of the parties.
2. As provided below, Immune Response and Agouron shall collaborate to
complete the current program of clinical trials of the Product,
including those aimed at achieving registration of the Product in the
Licensed Territory, in an expeditious manner. Immune Response and
Agouron agree to the following basic approaches to the registration of
Product in the Licensed Territory and the conduct of a committee to be
formed to coordinate the parties' registration of Product in the
Licensed Territory:
(a) Immune Response and Agouron shall use reasonable diligence in
the registration of the Product.
(b) A committee, co-chaired by representatives of Immune Response
and Agouron and comprised of representatives from Immune
Response and Agouron, shall be formed to coordinate the
registration of the Product in the Licensed Territory and such
other matters that the parties mutually agree to assign to it.
Decisions of the committee shall be made by a unanimous vote
of the committee, with each party having one (1) vote,
regardless of the number of representatives attending a
meeting. The committee shall meet regularly, at least four
times per year, and shall assign study or other registration
activities between the parties as described in this Paragraph
2.
(c) The committee shall review and discuss the registration plans
for any countries involved, as well as a coordinated general
strategy and priorities for preclinical and clinical
registration of Product in the Licensed Territory. Each
party's members of the committee will reasonably consider the
adoption of the other party's suggestions and will accept as
many of such suggestions as are reasonable, based upon medical
rationale, drug supply, and the need to conduct the studies in
an expeditious and cost-efficient manner.
*** - Confidential treatment requested
A-2
<PAGE>
(d) The parties will share responsibility and authority to obtain
regulatory approvals for the Product in the Licensed
Territory. If there is a disagreement among the parties
concerning an issue related to the registration of the Product
in the Licensed Territory, the issue shall be resolved in
accordance with the provisions of Paragraph 17.
(e) Agouron, at its expense (except for the cost of clinical
supplies of Product to be provided to Agouron pursuant to the
provisions of Paragraph 9), shall, using reasonable efforts,
initiate and conduct a 200-plus patient viral load study to
support registration of the Product.
(f) In partial consideration for the rights granted to Agouron,
Agouron will make up to six (6) quarterly payments of three
million dollars ($3,000,000) each to support clinical and
manufacturing development and scale-up of the Product
beginning on October 15, 1998, and every ninety (90) days
thereafter, until the earlier of: (i) January 15, 2000; or
(ii) the approval of a Product License Application ("PLA") for
the Product in the United States. The above quarterly payments
of three million dollars ($3,000,000) each to support clinical
and manufacturing development and scale-up of the Product
shall only be due and payable by Agouron if Agouron has not
elected to terminate, in its entirety, all of its rights and
obligations under the LOI and the Definitive Agreement before
the last permitted payment date for the applicable quarterly
payment.
(g) Immune Response will complete, at its expense, the current
worldwide program of clinical trials of the Product, including
the studies listed in Schedule 3, and will promptly and fully
disclose to Agouron the results of the interim and final
analyses of data from these clinical trials.
(h) Agouron will provide, at its expense, regulatory staff support
for preparation of registration documents as such support is
reasonably requested by Immune Response.
(i) Agouron, notwithstanding the preceding, will be responsible
for negotiating labeling, pricing and reimbursement for
Product with the applicable regulatory authorities in the
Licensed Territory, and after registration of the Product will
have the primary responsibility for the ongoing correspondence
and interaction with the applicable regulatory authorities.
Immune Response will provide reasonable assistance to Agouron
in such interactions, if necessary.
(j) Except as provided above, the committee, in assigning the
responsibility for performing specific tasks or activities
related to a study or registration activity among the parties,
shall make such assignments principally based on: (i) the
available resources each of the parties can commit to the task
or activity; (ii) the expertise of each of the parties in
conducting or monitoring
*** - Confidential treatment requested
A-3
<PAGE>
the task or activity; (iii) which party can perform the task
or activity in the most expeditious manner; and (iv) which
party can perform the task or activity in the most cost-
efficient manner. A party not responsible for the performance
of a task or activity may provide advisory and support
services to the other party. The committee may establish
interdisciplinary project teams comprised of representatives
of both parties having the specialized skills necessary to
oversee the conduct of specific day-to-day registration
activities. The committee shall establish procedures
concerning the scope and conduct of activities (including
decision-making procedures) assigned to such project teams.
(k) Each party shall keep the other party informed of its progress
in the registration of Product, including making oral
presentations of progress at the committee meetings and/or the
preparing of such written progress reports as are agreed to by
the parties summarizing such party's activities during each
reporting period and its planned activities for the succeeding
period. Each of the parties will assign a representative to
facilitate communications between the parties; each
representative shall report to his/her management on the
matters discussed at each of the meetings of the parties.
(l) Immune Response will disclose to Agouron all relevant Immune
Response Know-How, including, but not limited to, data and
information which it possesses from the pre-clinical and
clinical studies of Product (including toxicology,
pharmacokinetics and formulation studies) in a format which
will facilitate the preparation for any regulatory filings or
other correspondence to be filed or made by Agouron.
(m) Immune Response will provide assistance to Agouron in
accessing clinical investigators, clinical sites and testing
laboratories for the purposes of data interpretation and/or
evaluation and conduct of registration activities assigned to
Agouron.
(n) Immune Response shall use its reasonable efforts to coordinate
its registration activities in any country(s) located outside
the Licensed Territory with the registration activities of the
parties in the Licensed Territory.
(o) If a licensee of Immune Response wishes to use the results of
studies conducted by Agouron in such licensee's registration
and commercialization activities in a country(s) located
outside of the Licensed Territory, the parties shall enter
into good-faith discussions about the sharing of the costs of
such studies and/or the granting to Agouron of equivalent
rights to use the results of any studies conducted by such
licensee.
(p) If development of the Product is discontinued in a country
located in the Licensed Territory due to safety, efficacy or
regulatory issues or by mutual agreement of the parties and
Agouron is interested in developing a
*** - Confidential treatment requested
A-4
<PAGE>
substitute drug product whose manufacture, use or sale would
infringe (in the absence of the license rights granted under
this Exhibit A) a valid claim (which has not been abandoned,
disclaimed or declared invalid in a non-appealable order)
included in an issued patent within the Immune Response
Patent Rights, then Immune Response and Agouron shall enter
into good faith negotiations regarding the terms of a license
between Immune Response and Agouron for such substitute drug
product. During the period that Agouron is participating in
the development and/or commercialization of the Product
and/or another drug product whose manufacture, use or sale
infringes (in the absence of the license rights granted under
this Exhibit A) a valid claim (which has not been abandoned,
disclaimed or declared invalid in a non-appealable order)
included in an issued patent within the Immune Response
Patent Rights, Immune Response agrees not to commercialize in
the Licensed Territory other drug products whose manufacture,
use or sale is covered by a valid claim (which has not been
abandoned, disclaimed or declared invalid in a non-appealable
order) in an issued patent within the Immune Response Patent
Rights, on its own or with a third party, other than Agouron,
its Affiliates or sublicensees.
3. In partial consideration for the rights granted to Agouron, Agouron
will make the following license-fee milestone payments to Immune
Response:
<CAPTION>
Milestones Payment (US Dollars)
---------- --------------------
Within 30 days of execution of the LOI $10,000,000
*** $ ***
*** $ ***
*** $ ***
*** $ ***
------------------
Total Milestone Payments $45,000,000
------------------
------------------
The above license fee milestone payments shall be payable by Agouron one time
only and shall only be due if Agouron has not elected to terminate, in its
entirety, all of its rights and obligations under the LOI and the Definitive
Agreement before the last permitted payment date for the applicable milestone
payment.
4. Prior to approval of the Product in the United States, Agouron will, "***."
5. The right of Agouron to market Product in the Licensed Territory shall be
subject to commercially reasonable marketing efforts by Agouron, on a
country-by-country basis. For purposes of this paragraph, commercialization
efforts undertaken by Agouron's Affiliates and sublicensees shall be
attributed to Agouron. Agouron shall begin commercial sales of the in a
country no later than "***" after the first
*** - Confidential treatment requested
A-5
<PAGE>
registration of Product in such country; provided, however, that such
period shall be extended for as long as commercially reasonable marketing
efforts to begin commercial sales continue. Following commencement of
commercial sales in a country, Agouron shall keep Product reasonably
available to the public; provided, however, that Agouron shall be released
from this obligation if supply of Product is not available for such country
and Agouron is not responsible for arranging for the commercial production
and supply of Product for such country.
6. The term of the license rights granted hereunder will extend on a
country-by-country basis from the effective date of the signing of the
LOI until the last-to-expire of any patents within the Immune Response
Patent Rights covering the Product in such country (as extended by any
governmental actions which provide exclusive rights to the patent
holder in the patented subject matter beyond the original patent
expiration date).
7. Agouron shall have the right to sublicense its rights in the Product in
one or more countries of the Licensed Territory. In the event that
Immune Response or its Affiliates shall in the future obtain Control of
one or more additional patent rights and/or know-how necessary or
useful for the commercialization of the Product in the Licensed
Territory, then Immune Response shall grant to Agouron an exclusive
license consistent with the terms of this Exhibit A which adds such
patent rights and know-how to the scope of the applicable Immune
Response Patent Rights and Immune Response Know-How, without any
additional obligations due from Agouron to Immune Response. To the
extent that Immune Response grants rights in the Product to a third
party and such third party invents or discovers inventions and/or
know-how necessary or useful for the commercialization of the Product
in the Licensed Territory, then Immune Response shall use its
reasonable efforts to secure rights for Agouron to use such inventions
and know-how.
8. Immune Response hereby grants to Agouron, its Affiliates and
sublicensees a perpetual paid-up, royalty-free, worldwide, exclusive
right to use Immune Response's trademark REMUNETM in the marketing of
the Product in the Licensed Territory.
9. Immune Response shall supply Agouron, and Agouron shall purchase from
Immune Response, sufficient commercial supplies of Product to support
and sustain the launch and subsequent patient demand for Product in the
Licensed Territory. Immune Response hereby agrees to use its
commercially reasonable efforts to have sufficient manufacturing
capacity at its facilities to supply Agouron with commercial quantities
of Product which are necessary for the launch of such Product in the
Licensed Territory and agrees to have at least a monthly manufacturing
capacity for the Licensed Territory of "***" unit doses/month of such
Product at the time of launch of such Product. Immune Response agrees,
at its expense, to maintain commercially reasonable inventory and
safety stock of Product for the Licensed Territory. Immune Response
further agrees to discuss with Agouron, in good faith, Immune
Response's acquisition of additional manufacturing capacity required to
meet the projected patient demand for the
*** - Confidential treatment requested
A-6
<PAGE>
Product for the Licensed Territory. Immune Response shall use
diligence in its manufacturing activities and shall provide Agouron
such technical support for the Product as it may reasonably requested.
Commercial supplies of Product shall be supplied to Agouron at Immune
Response's "***."
10. Immune Response agrees not to enter into any contractual arrangement
with its licensees outside the Licensed Territory which would limit
Immune Response's ability to fully fulfill Agouron's product
requirements for the Licensed Territory, or which would require Immune
Response to allocate its manufacturing capacity among such licensees
and Agouron. If supply shortages of Product are expected to occur
during a calendar quarterly period, and Immune Response's available
supply of drug product is required to be allocated among Immune
Response's licensees, Immune Response shall allocate the available
supply of drug product among Immune Response's licensees during such
calendar quarterly period on a pro-rata basis, based upon: (i) the
relative utilization of such Product in each licensee's respective
territories during the twelve (12) month period ending on the first day
of such calendar quarterly period (based on historical sales data
during such twelve (12) month, to the extent such data is available);
and (ii) the projected sales of such Product in each licensee's
respective territories during the twelve (12) month period commencing
with the first day of such calendar quarterly period.
11. If Immune Response is unable to provide Agouron with its requirements
of Product in a timely and cost-efficient manner, Immune Response
agrees to assist Agouron in the identification of alternative low-cost
manufacturing sources for the Product, including but not limited to,
access to current suppliers of starting materials, intermediates, bulk
material and/or finished Product. Immune Response in such circumstances
will grant Agouron the non-exclusive worldwide right to make and have
made Product under applicable Immune Response Patent Rights and Immune
Response Know-How relating to processes, intermediates and materials
for manufacturing Product, and will provide to Agouron without charge,
to the extent available, technical and manufacturing assistance and use
of its technology and proprietary information for the Product,
including information on its analytical methods, validation reports and
manufacturing processes.
12. Pre-Tax Profits generated from aggregate Net Sales and royalties from
Products in the Licensed Territory on a country-by-country basis shall
be shared equally by Immune Response and Agouron on a fifty-fifty
basis. "***."
13. At any time after October 15, 1998, Agouron may elect to immediately
terminate its development obligations in the Licensed Territory for
Product under the LOI and the Definitive Agreement, except that Agouron
may exercise this right to terminate only on the basis of its concerns
related to the safety, efficacy, competitiveness, or commercial
feasibility of Product. In the event that Agouron elects to terminate
its development obligations for Product under the LOI and the
Definitive Agreement, Immune Response, its Affiliates and sublicensees
shall be free, without any further action by Immune Response or
Agouron, to develop and/or commercialize Product in the Licensed
Territory, on their own, or with any third party, and to retain, use
*** - Confidential treatment requested
A-7
<PAGE>
and disclose to any such third party information and materials that
have been developed by Agouron in its development activities for
Product; provided, that Immune Response shall not disclose to such
third party the confidential and proprietary information of Agouron
(other than clinical, regulatory and manufacturing information and
materials specifically relating to Product). In the event of the
termination of Agouron's development obligations in the Licensed
Territory for Product under the LOI and the Definitive Agreement, the
licenses granted to Agouron to use, offer for sale, sell and/or import,
in or into the Licensed Territory, the Product under applicable Immune
Response Patent Rights and using applicable Immune Response Know-How,
shall be terminated. Agouron shall transfer ownership of any dossiers
for Product in the Licensed Territory to Immune Response, and shall
cooperate with Immune Response to effect an orderly transition of
Agouron's development responsibilities in the Licensed Territory to
Immune Response.
14. At any time after October 15, 1998, Agouron may elect to immediately
terminate, on a country-by-country basis, its marketing rights for
Product in the Licensed Territory under the LOI and the Definitive
Agreement, except that Agouron may exercise this right to terminate
only on the basis of its concerns related to the safety, efficacy,
competitiveness, or commercial feasibility of Product. In the event
that Agouron elects to terminate its marketing rights for Product in a
country: (i) the licenses granted to Agouron to use, offer for sale,
sell and/or import, in or into such country, the Product under
applicable Immune Response Patent Rights and using applicable Immune
Response Know-How, shall be terminated, and Immune Response and its
Affiliates and sublicensees shall be free to market such Product in
such country, on its own, or with any third party; (ii) Agouron shall
transfer ownership to Immune Response of any dossiers for Product in
such country; and (iii) Agouron shall cooperate with to Immune Response
to effect an orderly transition of Agouron's marketing responsibilities
in such country to Immune Response.
15. Immune Response, in accordance with the reasonable directions of
Agouron, shall prepare, file, prosecute, maintain and extend: (i)
patent applications and patents included in the Immune Response Patent
Rights; and (ii) applicable Immune Response trademarks. Immune Response
shall own any Immune Response Patent Rights and Immune Response
trademarks and shall be responsible for all preparation, filing,
prosecution, maintenance, extension and enforcement expenses for such
Immune Response Patent Rights and Immune Response trademarks. Within
fourteen (14) days after the execution of the LOI, Immune Response
shall provide Agouron with copies of the material patent prosecution
file histories for the Immune Response Patent Rights. Immune Response
shall be solely responsible for any royalties or other payments due to
Rhone-Poulenc Rorer Inc. (including payments due because of license
fees or commercial sales of the Product) because of their previously
contractual arrangement (or the termination thereof) involving the
Product. "***."
*** - Confidential treatment requested
A-8
<PAGE>
16. This Agreement shall be assignable by a party with the prior written
consent of the other party. Any assignment (other than to an Affiliate)
without the prior written consent of the other party shall be void. If
this Agreement is assigned to an Affiliate of a party, the assigning
party shall still be responsible for all of its obligations specified
in this Agreement. Notwithstanding the preceding, the LOI shall be
assignable to the transferee or successor company in the event of: (i)
a sale or transfer of all or substantially all of a party's assets; or
(ii) the merger or consolidation of the party with another company.
17. If the representatives of the parties are unable to reach agreement on
a decision required under the terms of the LOI, the issue shall be
submitted for consideration, in the case of Immune Response, to a
designee of its Chief Executive Officer, and, in the case of Agouron,
to a designee of its Chief Executive Officer. If they are unable to
agree, then the Chief Executive Officers of the parties shall agree
upon the appropriate decision. If the Chief Executive Officers of the
parties are unable to reach agreement on a decision required of them,
then the issue shall be settled by arbitration in San Diego, California
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect. The decision of the
arbitrator(s) shall be final and binding on all parties. The cost of
such arbitration shall be borne by the non-prevailing party, unless
otherwise decided by the arbitrator(s).
18. "***."
19. Neither party shall be held liable or responsible to the other party
nor be deemed to have defaulted under or breached the LOI for the
failure or delay in fulfilling or performing any term of the LOI to the
extent, and for so long as, such failure or delay is caused by or
results from causes beyond the reasonable control of the affected
party, including but not limited to fire, floods, embargoes, war, acts
of war (whether war is declared or not), insurrections, riots, civil
commotions, strikes, lockouts or other labor disturbances, acts of God,
or acts, omissions or delays in acting by any governmental authority or
the other party.
20. In partial consideration for the rights granted to Agouron, Agouron
will purchase from Immune Response two million dollars ($2,000,000) of
unregistered Immune Response Common Stock on each of the purchase dates
listed below at the premiums to Fair Market Value ("FMV") set forth
opposite the applicable purchase date:
<CAPTION>
Purchase Date ***
----------------- -----
Execution Date of LOI ***
10/15/98 ***
1/15/99 ***
4/15/99 ***
7/15/99 ***
10/15/99 ***
1/17/00 ***
*** - Confidential treatment requested
A-9
<PAGE>
FMV shall mean the average closing price of Immune Response Common Stock
for the five trading days immediately preceding the above purchase dates;
provided, however, that if the FMV of Immune Response Common Stock is "***"
on the applicable purchase date, the premium to FMV shall be "***."
Agouron's obligation to purchase Immune Response Common Stock shall
terminate with respect to any purchase obligations whose applicable
purchase dates occur after Agouron has elected to terminate, in its
entirety, all of its rights and obligations under the LOI and the
Definitive Agreement.
*** - Confidential treatment requested
A-10
<PAGE>
SCHEDULE 1
COUNTRIES NOT INCLUDED IN THE LICENSED TERRITORY
The following countries, subject to the provisions of Paragraph 18 of Exhibit A,
are excluded from the Licensed Territory "***:"
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
The following countries, subject to the provisions of Paragraph 18 of Exhibit A,
are excluded from the Licensed Territory "***."
***
***
***
***
***
***
***
***
***
***
*** - Confidential treatment requested
S-1
<PAGE>
SCHEDULE 2
IMMUNE RESPONSE PATENT RIGHTS
U.S. Patent No. 5,256,767, issued October 26, 1993, from U.S. Patent Application
Serial No. 07/975,899, filed November 10, 1992.
"***."
"***."
*** - Confidential treatment requested
S-2
<PAGE>
SCHEDULE 3
SUMMARY OF CLINICAL TRIALS OF PRODUCT BEING CONDUCTED BY IMMUNE
RESPONSE
1. Trial 806 is a multi-center, double-blind, Phase III clinical end point
study. Patients are HIV positive with CD4 counts between 300 and 549
cells/ul.
2. Trial 816 is a multi-center, double-blind, Phase II study intended to
evaluate the combination of REMUNE(TM) and triple antiviral drug therapy
(AZT, 3TC and Crixivan) on the induction of an HIV-1 specific immune
response. Patients are HIV positive with CD4 counters > 350 cells/ul.
3. Trial 2102 is a multi-center, double-blind, adjuvant-controlled, Phase II
study of REMUNE plus AZT and ddI versus AZT and ddI alone in HIV-infected
subjects. The trial is being conducted in Spain and patients have CD4
counts between 300 and 700 cells/ul.
4. Trial 808 is a Phase I study to evaluate the safety and immunogenicity of
REMUNE in children with HIV-infection.
5. The Switzerland trial is a single center, randomized, open label, Phase II
study combining antiviral therapy (1592U89) plus Nelfinavir plus Saquinavir
or 141W94) alone or antiviral therapy plus immune-based therapy
(subcutaneous interleukin-2 or REMUNE) in antiviral naive HIV-1 infected
subjects with CD-4 + counts > 250 cells/ul.
6. The England trial is a single center, randomized, open labeled Phase I
study of antiviral therapy (two nucleoside analogues and at least one
protease inhibitor) versus antiviral therapy plus IL-2; antiviral therapy
plus IL-2 plus REMUNE; antiviral therapy plus REMUNE. Patients are HIV
positive with CD4 counts > 300 cells/ul.
7. Trial 818 is a Phase II study intended to evaluate the combination of
interferon-alpha (IFN) and REMUNE on HIV-1 specific immunogenicity in HIV-1
infected subjects with CD-4 counts > 300 cells/ul.
8. Trial 2101B is a Phase II, double-blind, randomized, adjuvant controlled
study of REMUNE.
9. Trial 822 is a randomized, double-blind, adjuvant controlled, research
study to evaluate the combination of REMUNE and HAART on the induction of
HIV-1 specific immune responses.
S-3
THIS LETTER OF INTENT is made on the 11th day of June 1998, by and
between Agouron Pharmaceuticals, Inc., a corporation duly organized and existing
under the laws of the state of California, having a principal place of business
at 10350 North Torrey Pines Road, La Jolla, California 92037 (hereinafter called
"Agouron"), and The Immune Response Corporation, a corporation duly organized
and existing under the laws of the state of Delaware, having a principal place
of business at 5935 Darwin Court, Carlsbad, California 92008 (hereinafter called
"Immune Response"). Agouron and Immune Response are sometimes hereinafter
referred to as a party (collectively "parties") to this Agreement.
BACKGROUND
In accordance with the terms of this Letter of Intent, Immune Response has
agreed to license to Agouron the exclusive rights necessary or useful for the
registration and/or commercialization of the product known as REMUNE, a
non-infectious intact Human Immunodeficiency Virus ("HIV") devoid of outer
envelope proteins. This Letter of Intent, which shall be binding on the parties,
sets forth the basic license terms upon which the parties have agreed. The full
terms of the license will be set forth in a definitive agreement to be prepared
as described below.
NOW, THEREFORE, the parties agree as follows:
1. Terms. The parties hereby enter into this Letter of Intent to confirm their
entering into a license agreement on terms substantially in accordance with
those contained in Exhibit A hereto. The parties acknowledge that Exhibit A
states the basic terms of the understanding between the parties and anticipate
the further negotiation and preparation of an agreement containing the full
terms of the license between the parties ("Definitive Agreement"). Each party
agrees to act in good faith in an effort to negotiate, execute and deliver the
Definitive Agreement on or before September 1, 1998. If the Definitive Agreement
is not executed by September 1, 1998, the provisions of this Letter of Intent
shall continue in effect until the Definitive Agreement is executed, and the
parties will continue to negotiate in good faith in an effort to execute and
deliver the Definitive Agreement as soon as possible.
2. Disclosure. The parties shall jointly prepare and release a statement about
the existence of this Letter of Intent and of the license between Agouron and
Immune Response. Except as agreed to by the parties, neither Agouron nor Immune
Response shall release any further information to any third party who is not
under an obligation of confidentiality with respect thereto about any of the
terms of this Letter of Intent, or of the license, or of results of clinical
trials of REMUNE, without the prior written consent of the other, which consent
shall not unreasonably be withheld. This prohibition includes, but is not
limited to, press releases, educational and scientific conferences, promotional
materials and discussions with the media. If a party determines that it is
required by law to release information to any third party regarding such
matters, it shall notify the other party of this
*** - Confidential treatment requested. Sections of text which have been
omitted and for which confidential treatment is requested are noted with
"***". An unredacted version of this document has been filed separately
with the Securities and Exchange Commission.
<PAGE>
fact prior to releasing the information. The notice to the other party shall
include the text of the information proposed for release. The other party shall
have the right to confer with the notifying party regarding the necessity for
the disclosure and the text of the information proposed for release.
3. Miscellaneous. This Letter of Intent contains the entire agreement between
the parties as of the date hereinabove written on the matters set forth herein
and shall be governed by and construed in accordance with the laws of the State
of California. Exhibit A describes the parties' understanding with respect to
the registration and commercialization of the "Product" as defined therein. This
Letter of Intent, including Exhibit A, shall not be amended, supplemented or
otherwise modified, except by an instrument in writing signed by duly authorized
officers of both parties. Each party shall bear all of the expenses incurred by
it in connection with the negotiation and preparation of this Letter of Intent
and the Definitive Agreement. Each party represents and warrants that it is not
presently bound by any agreement with any third party which limits its
performance of any of the obligations or activities provided for under this
Letter of Intent or contemplated by the Definitive Agreement. Immune Response
represents and warrants that it is not aware of any patents, patent applications
and/or know-how that it does not have the right to license to Agouron which is
necessary or useful for commercialization of Product by Agouron. Immune Response
further represents and warrants that it will not enter into any agreements which
limit Immune Response's performance of any of the obligations or activities
provided for under this Letter of Intent or contemplated by the Definitive
Agreement. Immune Response, at its expense, shall obtain any government
approval(s) not related to drug product registration, which are required to
enable this Agreement to become effective. At any time after October 15, 1998,
Agouron may elect to immediately terminate, in their entirety, all of its rights
and obligations under this Letter of Intent and the Definitive Agreement, except
that Agouron may exercise this right to terminate only on the basis of its
concerns related to the safety, efficacy, competitiveness, or commercial
feasibility of Product.
IN WITNESS WHEREOF, the parties hereto have executed this Letter of
Intent by their respective officers thereunto duly authorized, as of the date
hereinabove written. This Letter of Intent may be executed in counterparts and
all of such counterparts taken together shall be deemed to constitute one and
the same instrument.
THE IMMUNE RESPONSE CORPORATION AGOURON PHARMACEUTICALS, INC.
By: s/Dennis J. Carlo By: s/Peter Johnson
------------------------------- ----------------------------
Name: Dennis J. Carlo Name: Peter Johnson
------------------------------- ----------------------------
Title: President Title: President
------------------------------- ----------------------------
By: s/Charles J. Cashion By: s/Gary Friedman
------------------------------- ----------------------------
Name: Charles J. Cashion Name: Gary Friedman
------------------------------- ----------------------------
Title: Senior VP Title: Secretary
------------------------------- ----------------------------
2
<PAGE>
EXHIBIT A
Immune Response, under the terms and conditions specified below, hereby grants
Agouron the exclusive right to use, offer for sale, sell and/or import, in or
into the Licensed Territory, the Product under applicable Immune Response Patent
Rights (including claims therein relating to compositions and methods of use)
and using applicable Immune Response Know-How.
1. Definitions: Except as otherwise set forth herein, items containing an
initial capitalized letter shall have the meaning stated below or in
the Letter of Intent to which this Exhibit A is an attachment ("LOI").
(a) "Product" means a pharmaceutical product comprising a
non-infectious intact HIV devoid of outer envelope proteins
whose manufacture, use or sale infringes (in the absence of
the license rights granted under this Exhibit A) a valid claim
(which has not been abandoned, disclaimed or declared invalid
in a non-appealable order) included in an issued patent within
the Immune Response Patent Rights.
(b) "Licensed Territory" means all countries of the world except
the countries listed in Schedule 1.
(c) "Affiliate" means any person, organization or entity which is,
directly or indirectly, controlling, controlled by, or under
common control with Agouron or Immune Response, as the case
may be. The term "control" (including, with correlative
meaning, the terms "controlled by" and "under common control
with"), as used with respect to any person or entity, means
the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such
person, organization or entity, whether through the ownership
of voting securities, or by contract, or court order, or
otherwise. The ownership of voting securities of a person,
organization or entity shall not, in and of itself, constitute
"control" for purposes of this definition, unless said
ownership is of a majority of the outstanding securities
entitled to vote of such person, organization or entity.
Affiliate shall also mean a limited partnership in which a
subsidiary of Agouron and/or Immune Response is a general
partner.
(d) "Immune Response Patent Rights" means (i) the patents and the
patent applications referred to in Schedule 2 of this Exhibit
A; (ii) all patents arising from said applications, and all
patents and patent applications based on, claiming the
priority date(s) of, or corresponding to any of the foregoing;
or (iii) any reissues, extensions (or other governmental
actions that provide exclusive rights to the patent holder in
the patented subject matter beyond the original patent
expiration date), substitutions, confirmations, registrations,
revalidations, re-examinations, additions, continuations,
continuations-in-part, or divisions of or to any of the
foregoing.
*** - Confidential treatment requested. Sections of text which have been
omitted and for which confidential treatment is requested are noted with
"***". An unredacted version of this document has been filed separately
with the Securities and Exchange Commission.
A-1
<PAGE>
(e) "Immune Response Know-How" means any know-how, trade secret,
experimental data, formula, expert opinion, experimental
procedure, and other confidential and/or proprietary
information specifically concerning the Product that is
Controlled by Immune Response and that is necessary or useful
for either: (i) the formulation, manufacture, use and/or
application of the Product; or (ii) obtaining registration of
the Product.
(f) "Control" and "Controlled" mean possession of the ability to
grant a license or sublicense as provided for herein without
violating the terms of any agreement with, or arrangement
with, any third party.
(g) The terms "Net Sales," "Pre-Tax Profits," "Allowable Expenses"
and "Manufacturing Transfer Markup" shall be fully defined in
the Definitive Agreement. The terms "Net Sales and "Allowable
Expenses" shall be determined in accordance with generally
accepted accounting principles and the usual and customary
practices of the parties.
2. As provided below, Immune Response and Agouron shall collaborate to
complete the current program of clinical trials of the Product,
including those aimed at achieving registration of the Product in the
Licensed Territory, in an expeditious manner. Immune Response and
Agouron agree to the following basic approaches to the registration of
Product in the Licensed Territory and the conduct of a committee to be
formed to coordinate the parties' registration of Product in the
Licensed Territory:
(a) Immune Response and Agouron shall use reasonable diligence in
the registration of the Product.
(b) A committee, co-chaired by representatives of Immune Response
and Agouron and comprised of representatives from Immune
Response and Agouron, shall be formed to coordinate the
registration of the Product in the Licensed Territory and such
other matters that the parties mutually agree to assign to it.
Decisions of the committee shall be made by a unanimous vote
of the committee, with each party having one (1) vote,
regardless of the number of representatives attending a
meeting. The committee shall meet regularly, at least four
times per year, and shall assign study or other registration
activities between the parties as described in this Paragraph
2.
(c) The committee shall review and discuss the registration plans
for any countries involved, as well as a coordinated general
strategy and priorities for preclinical and clinical
registration of Product in the Licensed Territory. Each
party's members of the committee will reasonably consider the
adoption of the other party's suggestions and will accept as
many of such suggestions as are reasonable, based upon medical
rationale, drug supply, and the need to conduct the studies in
an expeditious and cost-efficient manner.
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A-2
<PAGE>
(d) The parties will share responsibility and authority to obtain
regulatory approvals for the Product in the Licensed
Territory. If there is a disagreement among the parties
concerning an issue related to the registration of the Product
in the Licensed Territory, the issue shall be resolved in
accordance with the provisions of Paragraph 17.
(e) Agouron, at its expense (except for the cost of clinical
supplies of Product to be provided to Agouron pursuant to the
provisions of Paragraph 9), shall, using reasonable efforts,
initiate and conduct a 200-plus patient viral load study to
support registration of the Product.
(f) In partial consideration for the rights granted to Agouron,
Agouron will make up to six (6) quarterly payments of three
million dollars ($3,000,000) each to support clinical and
manufacturing development and scale-up of the Product
beginning on October 15, 1998, and every ninety (90) days
thereafter, until the earlier of: (i) January 15, 2000; or
(ii) the approval of a Product License Application ("PLA") for
the Product in the United States. The above quarterly payments
of three million dollars ($3,000,000) each to support clinical
and manufacturing development and scale-up of the Product
shall only be due and payable by Agouron if Agouron has not
elected to terminate, in its entirety, all of its rights and
obligations under the LOI and the Definitive Agreement before
the last permitted payment date for the applicable quarterly
payment.
(g) Immune Response will complete, at its expense, the current
worldwide program of clinical trials of the Product, including
the studies listed in Schedule 3, and will promptly and fully
disclose to Agouron the results of the interim and final
analyses of data from these clinical trials.
(h) Agouron will provide, at its expense, regulatory staff support
for preparation of registration documents as such support is
reasonably requested by Immune Response.
(i) Agouron, notwithstanding the preceding, will be responsible
for negotiating labeling, pricing and reimbursement for
Product with the applicable regulatory authorities in the
Licensed Territory, and after registration of the Product will
have the primary responsibility for the ongoing correspondence
and interaction with the applicable regulatory authorities.
Immune Response will provide reasonable assistance to Agouron
in such interactions, if necessary.
(j) Except as provided above, the committee, in assigning the
responsibility for performing specific tasks or activities
related to a study or registration activity among the parties,
shall make such assignments principally based on: (i) the
available resources each of the parties can commit to the task
or activity; (ii) the expertise of each of the parties in
conducting or monitoring
*** - Confidential treatment requested
A-3
<PAGE>
the task or activity; (iii) which party can perform the task
or activity in the most expeditious manner; and (iv) which
party can perform the task or activity in the most cost-
efficient manner. A party not responsible for the performance
of a task or activity may provide advisory and support
services to the other party. The committee may establish
interdisciplinary project teams comprised of representatives
of both parties having the specialized skills necessary to
oversee the conduct of specific day-to-day registration
activities. The committee shall establish procedures
concerning the scope and conduct of activities (including
decision-making procedures) assigned to such project teams.
(k) Each party shall keep the other party informed of its progress
in the registration of Product, including making oral
presentations of progress at the committee meetings and/or the
preparing of such written progress reports as are agreed to by
the parties summarizing such party's activities during each
reporting period and its planned activities for the succeeding
period. Each of the parties will assign a representative to
facilitate communications between the parties; each
representative shall report to his/her management on the
matters discussed at each of the meetings of the parties.
(l) Immune Response will disclose to Agouron all relevant Immune
Response Know-How, including, but not limited to, data and
information which it possesses from the pre-clinical and
clinical studies of Product (including toxicology,
pharmacokinetics and formulation studies) in a format which
will facilitate the preparation for any regulatory filings or
other correspondence to be filed or made by Agouron.
(m) Immune Response will provide assistance to Agouron in
accessing clinical investigators, clinical sites and testing
laboratories for the purposes of data interpretation and/or
evaluation and conduct of registration activities assigned to
Agouron.
(n) Immune Response shall use its reasonable efforts to coordinate
its registration activities in any country(s) located outside
the Licensed Territory with the registration activities of the
parties in the Licensed Territory.
(o) If a licensee of Immune Response wishes to use the results of
studies conducted by Agouron in such licensee's registration
and commercialization activities in a country(s) located
outside of the Licensed Territory, the parties shall enter
into good-faith discussions about the sharing of the costs of
such studies and/or the granting to Agouron of equivalent
rights to use the results of any studies conducted by such
licensee.
(p) If development of the Product is discontinued in a country
located in the Licensed Territory due to safety, efficacy or
regulatory issues or by mutual agreement of the parties and
Agouron is interested in developing a
*** - Confidential treatment requested
A-4
<PAGE>
substitute drug product whose manufacture, use or sale would
infringe (in the absence of the license rights granted under
this Exhibit A) a valid claim (which has not been abandoned,
disclaimed or declared invalid in a non-appealable order)
included in an issued patent within the Immune Response
Patent Rights, then Immune Response and Agouron shall enter
into good faith negotiations regarding the terms of a license
between Immune Response and Agouron for such substitute drug
product. During the period that Agouron is participating in
the development and/or commercialization of the Product
and/or another drug product whose manufacture, use or sale
infringes (in the absence of the license rights granted under
this Exhibit A) a valid claim (which has not been abandoned,
disclaimed or declared invalid in a non-appealable order)
included in an issued patent within the Immune Response
Patent Rights, Immune Response agrees not to commercialize in
the Licensed Territory other drug products whose manufacture,
use or sale is covered by a valid claim (which has not been
abandoned, disclaimed or declared invalid in a non-appealable
order) in an issued patent within the Immune Response Patent
Rights, on its own or with a third party, other than Agouron,
its Affiliates or sublicensees.
3. In partial consideration for the rights granted to Agouron, Agouron
will make the following license-fee milestone payments to Immune
Response:
<CAPTION>
Milestones Payment (US Dollars)
---------- --------------------
Within 30 days of execution of the LOI $10,000,000
*** $ ***
*** $ ***
*** $ ***
*** $ ***
------------------
Total Milestone Payments $45,000,000
------------------
------------------
The above license fee milestone payments shall be payable by Agouron one time
only and shall only be due if Agouron has not elected to terminate, in its
entirety, all of its rights and obligations under the LOI and the Definitive
Agreement before the last permitted payment date for the applicable milestone
payment.
4. Prior to approval of the Product in the United States, Agouron will, "***."
5. The right of Agouron to market Product in the Licensed Territory shall be
subject to commercially reasonable marketing efforts by Agouron, on a
country-by-country basis. For purposes of this paragraph, commercialization
efforts undertaken by Agouron's Affiliates and sublicensees shall be
attributed to Agouron. Agouron shall begin commercial sales of the in a
country no later than "***" after the first
*** - Confidential treatment requested
A-5
<PAGE>
registration of Product in such country; provided, however, that such
period shall be extended for as long as commercially reasonable marketing
efforts to begin commercial sales continue. Following commencement of
commercial sales in a country, Agouron shall keep Product reasonably
available to the public; provided, however, that Agouron shall be released
from this obligation if supply of Product is not available for such country
and Agouron is not responsible for arranging for the commercial production
and supply of Product for such country.
6. The term of the license rights granted hereunder will extend on a
country-by-country basis from the effective date of the signing of the
LOI until the last-to-expire of any patents within the Immune Response
Patent Rights covering the Product in such country (as extended by any
governmental actions which provide exclusive rights to the patent
holder in the patented subject matter beyond the original patent
expiration date).
7. Agouron shall have the right to sublicense its rights in the Product in
one or more countries of the Licensed Territory. In the event that
Immune Response or its Affiliates shall in the future obtain Control of
one or more additional patent rights and/or know-how necessary or
useful for the commercialization of the Product in the Licensed
Territory, then Immune Response shall grant to Agouron an exclusive
license consistent with the terms of this Exhibit A which adds such
patent rights and know-how to the scope of the applicable Immune
Response Patent Rights and Immune Response Know-How, without any
additional obligations due from Agouron to Immune Response. To the
extent that Immune Response grants rights in the Product to a third
party and such third party invents or discovers inventions and/or
know-how necessary or useful for the commercialization of the Product
in the Licensed Territory, then Immune Response shall use its
reasonable efforts to secure rights for Agouron to use such inventions
and know-how.
8. Immune Response hereby grants to Agouron, its Affiliates and
sublicensees a perpetual paid-up, royalty-free, worldwide, exclusive
right to use Immune Response's trademark REMUNETM in the marketing of
the Product in the Licensed Territory.
9. Immune Response shall supply Agouron, and Agouron shall purchase from
Immune Response, sufficient commercial supplies of Product to support
and sustain the launch and subsequent patient demand for Product in the
Licensed Territory. Immune Response hereby agrees to use its
commercially reasonable efforts to have sufficient manufacturing
capacity at its facilities to supply Agouron with commercial quantities
of Product which are necessary for the launch of such Product in the
Licensed Territory and agrees to have at least a monthly manufacturing
capacity for the Licensed Territory of "***" unit doses/month of such
Product at the time of launch of such Product. Immune Response agrees,
at its expense, to maintain commercially reasonable inventory and
safety stock of Product for the Licensed Territory. Immune Response
further agrees to discuss with Agouron, in good faith, Immune
Response's acquisition of additional manufacturing capacity required to
meet the projected patient demand for the
*** - Confidential treatment requested
A-6
<PAGE>
Product for the Licensed Territory. Immune Response shall use
diligence in its manufacturing activities and shall provide Agouron
such technical support for the Product as it may reasonably requested.
Commercial supplies of Product shall be supplied to Agouron at Immune
Response's "***."
10. Immune Response agrees not to enter into any contractual arrangement
with its licensees outside the Licensed Territory which would limit
Immune Response's ability to fully fulfill Agouron's product
requirements for the Licensed Territory, or which would require Immune
Response to allocate its manufacturing capacity among such licensees
and Agouron. If supply shortages of Product are expected to occur
during a calendar quarterly period, and Immune Response's available
supply of drug product is required to be allocated among Immune
Response's licensees, Immune Response shall allocate the available
supply of drug product among Immune Response's licensees during such
calendar quarterly period on a pro-rata basis, based upon: (i) the
relative utilization of such Product in each licensee's respective
territories during the twelve (12) month period ending on the first day
of such calendar quarterly period (based on historical sales data
during such twelve (12) month, to the extent such data is available);
and (ii) the projected sales of such Product in each licensee's
respective territories during the twelve (12) month period commencing
with the first day of such calendar quarterly period.
11. If Immune Response is unable to provide Agouron with its requirements
of Product in a timely and cost-efficient manner, Immune Response
agrees to assist Agouron in the identification of alternative low-cost
manufacturing sources for the Product, including but not limited to,
access to current suppliers of starting materials, intermediates, bulk
material and/or finished Product. Immune Response in such circumstances
will grant Agouron the non-exclusive worldwide right to make and have
made Product under applicable Immune Response Patent Rights and Immune
Response Know-How relating to processes, intermediates and materials
for manufacturing Product, and will provide to Agouron without charge,
to the extent available, technical and manufacturing assistance and use
of its technology and proprietary information for the Product,
including information on its analytical methods, validation reports and
manufacturing processes.
12. Pre-Tax Profits generated from aggregate Net Sales and royalties from
Products in the Licensed Territory on a country-by-country basis shall
be shared equally by Immune Response and Agouron on a fifty-fifty
basis. "***."
13. At any time after October 15, 1998, Agouron may elect to immediately
terminate its development obligations in the Licensed Territory for
Product under the LOI and the Definitive Agreement, except that Agouron
may exercise this right to terminate only on the basis of its concerns
related to the safety, efficacy, competitiveness, or commercial
feasibility of Product. In the event that Agouron elects to terminate
its development obligations for Product under the LOI and the
Definitive Agreement, Immune Response, its Affiliates and sublicensees
shall be free, without any further action by Immune Response or
Agouron, to develop and/or commercialize Product in the Licensed
Territory, on their own, or with any third party, and to retain, use
*** - Confidential treatment requested
A-7
<PAGE>
and disclose to any such third party information and materials that
have been developed by Agouron in its development activities for
Product; provided, that Immune Response shall not disclose to such
third party the confidential and proprietary information of Agouron
(other than clinical, regulatory and manufacturing information and
materials specifically relating to Product). In the event of the
termination of Agouron's development obligations in the Licensed
Territory for Product under the LOI and the Definitive Agreement, the
licenses granted to Agouron to use, offer for sale, sell and/or import,
in or into the Licensed Territory, the Product under applicable Immune
Response Patent Rights and using applicable Immune Response Know-How,
shall be terminated. Agouron shall transfer ownership of any dossiers
for Product in the Licensed Territory to Immune Response, and shall
cooperate with Immune Response to effect an orderly transition of
Agouron's development responsibilities in the Licensed Territory to
Immune Response.
14. At any time after October 15, 1998, Agouron may elect to immediately
terminate, on a country-by-country basis, its marketing rights for
Product in the Licensed Territory under the LOI and the Definitive
Agreement, except that Agouron may exercise this right to terminate
only on the basis of its concerns related to the safety, efficacy,
competitiveness, or commercial feasibility of Product. In the event
that Agouron elects to terminate its marketing rights for Product in a
country: (i) the licenses granted to Agouron to use, offer for sale,
sell and/or import, in or into such country, the Product under
applicable Immune Response Patent Rights and using applicable Immune
Response Know-How, shall be terminated, and Immune Response and its
Affiliates and sublicensees shall be free to market such Product in
such country, on its own, or with any third party; (ii) Agouron shall
transfer ownership to Immune Response of any dossiers for Product in
such country; and (iii) Agouron shall cooperate with to Immune Response
to effect an orderly transition of Agouron's marketing responsibilities
in such country to Immune Response.
15. Immune Response, in accordance with the reasonable directions of
Agouron, shall prepare, file, prosecute, maintain and extend: (i)
patent applications and patents included in the Immune Response Patent
Rights; and (ii) applicable Immune Response trademarks. Immune Response
shall own any Immune Response Patent Rights and Immune Response
trademarks and shall be responsible for all preparation, filing,
prosecution, maintenance, extension and enforcement expenses for such
Immune Response Patent Rights and Immune Response trademarks. Within
fourteen (14) days after the execution of the LOI, Immune Response
shall provide Agouron with copies of the material patent prosecution
file histories for the Immune Response Patent Rights. Immune Response
shall be solely responsible for any royalties or other payments due to
Rhone-Poulenc Rorer Inc. (including payments due because of license
fees or commercial sales of the Product) because of their previously
contractual arrangement (or the termination thereof) involving the
Product. "***."
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<PAGE>
16. This Agreement shall be assignable by a party with the prior written
consent of the other party. Any assignment (other than to an Affiliate)
without the prior written consent of the other party shall be void. If
this Agreement is assigned to an Affiliate of a party, the assigning
party shall still be responsible for all of its obligations specified
in this Agreement. Notwithstanding the preceding, the LOI shall be
assignable to the transferee or successor company in the event of: (i)
a sale or transfer of all or substantially all of a party's assets; or
(ii) the merger or consolidation of the party with another company.
17. If the representatives of the parties are unable to reach agreement on
a decision required under the terms of the LOI, the issue shall be
submitted for consideration, in the case of Immune Response, to a
designee of its Chief Executive Officer, and, in the case of Agouron,
to a designee of its Chief Executive Officer. If they are unable to
agree, then the Chief Executive Officers of the parties shall agree
upon the appropriate decision. If the Chief Executive Officers of the
parties are unable to reach agreement on a decision required of them,
then the issue shall be settled by arbitration in San Diego, California
in accordance with the Commercial Arbitration Rules of the American
Arbitration Association then in effect. The decision of the
arbitrator(s) shall be final and binding on all parties. The cost of
such arbitration shall be borne by the non-prevailing party, unless
otherwise decided by the arbitrator(s).
18. "***."
19. Neither party shall be held liable or responsible to the other party
nor be deemed to have defaulted under or breached the LOI for the
failure or delay in fulfilling or performing any term of the LOI to the
extent, and for so long as, such failure or delay is caused by or
results from causes beyond the reasonable control of the affected
party, including but not limited to fire, floods, embargoes, war, acts
of war (whether war is declared or not), insurrections, riots, civil
commotions, strikes, lockouts or other labor disturbances, acts of God,
or acts, omissions or delays in acting by any governmental authority or
the other party.
20. In partial consideration for the rights granted to Agouron, Agouron
will purchase from Immune Response two million dollars ($2,000,000) of
unregistered Immune Response Common Stock on each of the purchase dates
listed below at the premiums to Fair Market Value ("FMV") set forth
opposite the applicable purchase date:
<CAPTION>
Purchase Date ***
----------------- -----
Execution Date of LOI ***
10/15/98 ***
1/15/99 ***
4/15/99 ***
7/15/99 ***
10/15/99 ***
1/17/00 ***
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FMV shall mean the average closing price of Immune Response Common Stock
for the five trading days immediately preceding the above purchase dates;
provided, however, that if the FMV of Immune Response Common Stock is "***"
on the applicable purchase date, the premium to FMV shall be "***."
Agouron's obligation to purchase Immune Response Common Stock shall
terminate with respect to any purchase obligations whose applicable
purchase dates occur after Agouron has elected to terminate, in its
entirety, all of its rights and obligations under the LOI and the
Definitive Agreement.
*** - Confidential treatment requested
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<PAGE>
SCHEDULE 1
COUNTRIES NOT INCLUDED IN THE LICENSED TERRITORY
The following countries, subject to the provisions of Paragraph 18 of Exhibit A,
are excluded from the Licensed Territory "***:"
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
The following countries, subject to the provisions of Paragraph 18 of Exhibit A,
are excluded from the Licensed Territory "***."
***
***
***
***
***
***
***
***
***
***
*** - Confidential treatment requested
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<PAGE>
SCHEDULE 2
IMMUNE RESPONSE PATENT RIGHTS
U.S. Patent No. 5,256,767, issued October 26, 1993, from U.S. Patent Application
Serial No. 07/975,899, filed November 10, 1992.
"***."
"***."
*** - Confidential treatment requested
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<PAGE>
SCHEDULE 3
SUMMARY OF CLINICAL TRIALS OF PRODUCT BEING CONDUCTED BY IMMUNE
RESPONSE
1. Trial 806 is a multi-center, double-blind, Phase III clinical end point
study. Patients are HIV positive with CD4 counts between 300 and 549
cells/ul.
2. Trial 816 is a multi-center, double-blind, Phase II study intended to
evaluate the combination of REMUNE(TM) and triple antiviral drug therapy
(AZT, 3TC and Crixivan) on the induction of an HIV-1 specific immune
response. Patients are HIV positive with CD4 counters > 350 cells/ul.
3. Trial 2102 is a multi-center, double-blind, adjuvant-controlled, Phase II
study of REMUNE plus AZT and ddI versus AZT and ddI alone in HIV-infected
subjects. The trial is being conducted in Spain and patients have CD4
counts between 300 and 700 cells/ul.
4. Trial 808 is a Phase I study to evaluate the safety and immunogenicity of
REMUNE in children with HIV-infection.
5. The Switzerland trial is a single center, randomized, open label, Phase II
study combining antiviral therapy (1592U89) plus Nelfinavir plus Saquinavir
or 141W94) alone or antiviral therapy plus immune-based therapy
(subcutaneous interleukin-2 or REMUNE) in antiviral naive HIV-1 infected
subjects with CD-4 + counts > 250 cells/ul.
6. The England trial is a single center, randomized, open labeled Phase I
study of antiviral therapy (two nucleoside analogues and at least one
protease inhibitor) versus antiviral therapy plus IL-2; antiviral therapy
plus IL-2 plus REMUNE; antiviral therapy plus REMUNE. Patients are HIV
positive with CD4 counts > 300 cells/ul.
7. Trial 818 is a Phase II study intended to evaluate the combination of
interferon-alpha (IFN) and REMUNE on HIV-1 specific immunogenicity in HIV-1
infected subjects with CD-4 counts > 300 cells/ul.
8. Trial 2101B is a Phase II, double-blind, randomized, adjuvant controlled
study of REMUNE.
9. Trial 822 is a randomized, double-blind, adjuvant controlled, research
study to evaluate the combination of REMUNE and HAART on the induction of
HIV-1 specific immune responses.
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