Amendment of December 1997 to the Research and License Agreement between
ImClone Systems Incorporated and Merck KGaA
WHEREAS ImClone Systems (hereinafter 'ImClone') and Merck KGaA
(hereinafter 'Merck' ) are parties to a Research and License Agreement
(hereinafter the 'Agreement') effective April 1, 1990 which has been previously
amended on September 1, 1993, November 2, 1993, and on May 14, 1996; and
WHEREAS the parties intend to further modify the Agreement to represent
the current intent of the parties with respect to the marketing of BEC2 in North
America, it being the intent of the parties that ImClone and Merck shall
co-market BEC2 in North America in accordance with the 'Terms of Co-Marketing of
BEC2 by Merck and ImClone in North America' to be negotiated in good faith by
the parties hereafter and appended as Exhibit B to this Amendment; and
WHEREAS the parties have also on this day entered into a Preferred Stock
Purchase Agreement for the purchase by Merck of ImClone convertible preferred
stock; and
THE PARTIES HEREBY MODIFY and amend the Agreement in the following
respects (hereinafter the 'Amendment'):
1. Section 2.1 shall be modified to read in its entirety as follows:
'2.1 ImClone hereby grants to Merck an exclusive license, with the right
to sublicense, in the Field under Licensed Patents and/or Licensed
Technology to make, have made, use, sell, or have sold Licensed Products
which incorporate BEC2 and gp75 worldwide outside North America; and
ImClone grants to Merck a Sole License restricted in accordance with
Exhibit B and the other terms of this Amendment, without the right to
sublicense, to use, sell or have sold, but not to make, Licensed Products
which incorporate BEC2 in North America in conjunction with ImClone.'
1
2. Section 2.2 shall be modified to read in its entirety as follows:
'2.2 Merck hereby grants to ImClone a Sole License, without the right to
sublicense, to all rights which it may have to Licensed Technology to
make, have made, use, sell or have sold Licensed Products which
incorporate BEC2 in North America in conjunction with Merck in accordance
with Exhibit B and the other terms of this Amendment; and Merck grants to
ImClone an exclusive license, with the right to sublicense, to all rights
which it may have to Licensed Technology to make, have made, use, sell or
have sold Licensed Products which incorporate gp75 in North America.'
3. Section 2.3 shall be modified to read in its entirety as follows:
'2.3 If, during the term of the Agreement, ImClone intends to grant a
license, exclusive or otherwise (or right to distribute) in the Field,
under Licensed Patent(s) and/or Licensed Technology, to make, use or sell
Licensed Product(s) which incorporate gp75 in North America, it shall so
notify Merck in writing and afford Merck the opportunity to negotiate
terms for such a license. Should the parties not enter into such a license
in writing within ninety (90) days of such written notification to Merck,
the offer shall be deemed formally withdrawn.'
4. Section 2.5 (b) shall be modified to read in its entirety as follows:
'2.5(b) ImClone hereby grants to Merck an exclusive license, with the
right to sublicense, in the Field to such rights as ImClone may hold to
Improvements to make, have made, use, sell, or have sold Licensed Products
which incorporate Improvements to BEC2 and gp75 worldwide outside North
America; and ImClone grants to Merck a Sole License restricted in
accordance with Exhibit B and the other terms of this Amendment, without
the right to sublicense, to such rights as ImClone may hold to
Improvements to use, sell or have sold, but not to make, Licensed
2
Products which incorporate Improvements to BEC2 in North America in
conjunction with ImClone.'
5. Section 2.5 (c) shall be modified to read in its entirety as follows:
'2.5(c) If ImClone grants Merck a license to Licensed Products which
incorporate gp75 (or right to distribute) under Section 2.3 above, then
ImClone shall grant Merck the same kind of license, (or right to
distribute) in the Field to such rights as ImClone may hold to
Improvements to make, use or sell Licensed Products which incorporate
Improvements to gp75 in North America.'
6. Section 2.5 (d) shall be modified so that the first sentence shall read in
its entirety as follows (the remainder of the section shall remain
unchanged):
'2.5(d) Merck hereby grants to ImClone a Sole License, without the right
to sublicense, to such rights as Merck may hold to Improvements, to make,
use, sell or have sold Licensed Products which incorporate Improvements to
BEC2 in North America in conjunction with Merck in accordance with Exhibit
B and the other terms of this Amendment; and Merck grants to ImClone an
exclusive license, with the right to sublicense, to such rights as Merck
may hold to Improvements, to make, have made, use, sell or have sold
Licensed Products which incorporate Improvements to gp75 in North
America.'
7. Section 3.4 shall be modified to read in its entirety as follows:
'3.4 The Research and Development Protocol includes the plans for the
conduct and management of clinical trials, development and manufacturing,
further research, and for the filing for appropriate regulatory approvals
for the sale of the Licensed Products. All of such clinical trials and
regulatory submissions shall be the responsibility of Merck worldwide
outside North America. It is the intention of the parties, as further set
forth in the Research and Development Protocol, to conduct a multi-site
multi-national pivotal clinical trial to obtain approval for the
indication of the treatment of limited disease small cell lung carcinoma
for the
3
BEC2. Costs, including out-of-pocket costs of ImClone (but not including
cost of establishment of a manufacturing facility), as contemplated in the
Research and Development Protocol, for manufacturing of materials for
clinical trials, conduct of clinical trials, and regulatory submissions
(other than drug approval fees which are the responsibility of Merck or
ImClone in their respective territories) in connection with the
development of the Licensed Products which incorporate BEC2 worldwide
shall be paid by Merck. Notwithstanding the previous sentence, Merck's
sole responsibility to bear the expense of the conduct of such clinical
trials shall be capped at 17 million DM. To the extent that the expenses
of the conduct of such clinical trials exceed 17 million DM, such expenses
shall be shared, 60% for Merck and 40% for ImClone. The expense of the
conduct of additional clinical trials for other indications shall be
subject to separate budgets to be negotiated by the parties. It is the
intent of the parties that ImClone be the party responsible for
establishment of the manufacturing site for the active agent, at ImClone's
expense. It is also intended that ImClone be responsible for providing
supply of the active agent worldwide, at the expense of Merck. However,
costs of goods in North America, which shall include ImClone's costs plus
a negotiated provision for overhead, shall be paid out of gross sales of
the Licensed Product in North America, in accordance with the terms of the
Co-Marketing Agreement, Exhibit B.'
8. Section 4.3 shall be modified to read in its entirety as follows:
'4.3 In addition, Merck shall pay ImClone the following non-refundable
milestone payments:
a. $500,000 upon the achievement of a pilot-scale (based on the Research
and Development Protocol) fermentation in the manufacture of BEC 2
yielding at least 7.5 grams of material meeting the specifications of the
Research and Development Protocol (paid);
b. $1,000,000 upon successful manufacture of bulk cGMP BEC 2 material
meeting the specifications of the Research and Development Protocol
(paid);
4
c. *** ***;
d. $500,000 upon signing of this Amendment;
e. *** ***;
f. *** ***;
g. *** ***;
h. *** ***';
i. *** ***;
j. *** ***;
k. *** ***;
l. *** ***;
m. *** ***;
n. *** ***;
o. *** ***;
p. In the case that Merck enters into a distribution or sublicensing
arrangement for the marketing of BEC2 in Japan and receives consideration
in such transaction
5
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
other than royalties or payments related to sales (e.g. license fees,
payments in lieu of royalties), *** of such payments shall be paid over to
ImClone at the time or times that Merck receives such consideration, not
to exceed *** .'
9. Section 4.4 shall be modified to read in its entirety as follows:
'4.4(a) On Net Sales of Licensed Products in Europe, Australia or New
Zealand by Merck, its Affiliates, distributors or sublicensees, Merck
shall pay ImClone *** .'
'4.4(b) On Net Sales of Licensed Products outside Europe, Australia and
New Zealand, excluding North America, by Merck, its Affiliates,
distributors or sublicensees, Merck shall pay ImClone *** .'
'4.4(c) Gross Sales of Licensed Products which incorporate BEC2 in North
America shall be distributed in accordance with the terms of Exhibit B
appended hereto entitled 'Terms of Co-Marketing of BEC2 by Merck and
ImClone in North America' to be negotiated in good faith by the parties
hereafter and to be appended hereto as Exhibit B. Exhibit B shall
establish the terms of a co-marketing of BEC2 in North America by Merck
and is intended to include among other things the following:
o Establishment of a committee of the parties to plan and monitor the
marketing of BEC2 in North America, which is anticipated to involve
sales by separate but coordinated sales forces of ImClone and Merck and
coordinated distribution of final product, with ImClone responsible for
manufacture of the active agent, and costs for manufacture to be paid
from gross sales in North America.
6
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
o Defining the components of Gross Margin against which costs
reimbursable to the parties and shares payable to the parties shall be
determined (Gross Margin generally to be Net Sales less cost of goods,
cost of distribution and other third party payments, including
royalties); and
o A division of Gross Margin such that each party will receive a
guaranteed share of *** of Gross Margin, and the remaining *** of Gross
Margin shall be divided between the parties in accordance with the
respective level of sales and marketing expense contributed by the
parties.'
IN WITNESS WHEREOF, Amendment to the Agreement has been executed this
_______ day of December, 1997.
ImClone Systems Incorporated Merck KGaA
By: /s/ Samuel D. Waksal By: /s/ E. R. Roberts
--------------------------- --------------------------
Name: Samuel D. Waksal Name: E. R. Roberts
Title: President & CEO Title: Managing Partner
Date: December 3, 1997 Date: December 3, 1998
7
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
Research and License Agreement - ImClone Systems Inc. and Merck KGaA
Was this helpful?