CombinatoRx-Novartis Collaborations 2005 & 2009- PART ONE
I do not know if everyone is aware that Novartis first began collaborating with CombinatoRx back in 2005. If you are unaware, here are both agreements. The rest of the 2009 agreement is in PART TWO.
2005: In February 2005, we entered into an agreement with Novartis Pharmaceuticals Corporation, or Novartis. Under a statement of work, into which we entered at the same time, we are obligated to use our cHTS technology to test certain compounds provided to us by Novartis in combination with other compounds in cancer cell lines determined by Novartis. We are required to provide periodic reports to Novartis on the progress of the research and a final report summarizing and reviewing all the data generated during the collaboration. We are eligible to receive $100,000 from Novartis to conduct the research upon signing of the agreement and the statement of work and will receive additional funding, which in the aggregate may amount to an additional $400,000, upon delivery of the update reports and a final report. Novartis will own rights to all intellectual property developed by us in performing the research for Novartis and relating to the compounds Novartis provides to us for research or to any combinations of Novartis's compounds with other compounds, while we own all intellectual property developed by us that is related to our technology and that is unrelated to materials provided to us by Novartis. The agreement or any statement of work may be terminated by Novartis for any reason upon a thirty days prior written notice. Novartis may also terminate the agreement or any statement of work immediately upon our change of control, as that term is defined in the agreement. Either we or Novartis may terminate in case of a material breach by the other party not substantially cured after a thirty days prior notice or immediately in case of insolvency, assignment for the benefit of creditors or appointment of a receiver or trustee for substantially all of the property. Unless earlier terminated, the agreement has a term of two years or until the services under any of the statements of work are completed, and the initial statement of work is expected to be completed in six months.
2009: On May 1, 2009, CombinatoRx, Incorporated ("CombinatoRx") entered into a Research Collaboration and License Agreement with Novartis Institutes for BioMedical Research, Inc. ("Novartis") focused on the discovery of novel anti-cancer combinations. Through the collaboration, CombinatoRx will use its proprietary combination high throughput screening (cHTS™) platform to screen a unique library of molecules, including Novartis compounds, in multiple cell lines representing a broad spectrum of cancers to potentially discover novel single agent and combination therapies to treat various cancers.
Under the terms of the collaboration agreement, CombinatoRx will receive an initial payment of $4.0 million and annual research support payments of up to $3.0 million, plus certain expenses. In addition, the collaboration agreement may provide CombinatoRx with up to $58 million for each combination product candidate advanced by Novartis upon achievement of certain clinical, regulatory and commercial milestones. The research program has an initial two-year term that may be extended by Novartis for three additional one-year periods. Novartis and CombinatoRx also entered into a Software License Agreement, where CombinatoRx has provided Novartis with a non-exclusive license to use its proprietary Chalice™ analyzer software in connection with the collaboration and other Novartis research programs for approximately five years.
The library to be screened under the collaboration will consist of: certain Novartis oncology compounds and compounds from the CombinatoRx library of approved drugs and other molecules. Novartis will own and have an exclusive license to intellectual property generated under the collaboration to research, develop and commercialize their approved or active development-stage compounds. CombinatoRx will own and have an exclusive license to intellectual property generated under the collaboration to research, develop and commercialize compounds from the CombinatoRx library. Intellectual property generated under the collaboration using certain compounds from the Novartis library will be jointly owned by Novartis and CombinatoRx and non-exclusively licensed to allow each party to research, develop and commercialize product candidates. Under the collaboration agreement, Novartis retains an option, exercisable once per year of the research collaboration, to exclusively license a portion of this jointly owned intellectual property if certain conditions are met. Novartis also has a right of first negotiation to exclusively license the intellectual property owned by CombinatoRx that was discovered as a part of the collaboration, under terms to be negotiated by the parties at such time.
The collaboration agreement may be terminated by either party after ninety days' notice upon an unremedied material breach and upon thirty days' notice in the event of bankruptcy of the other party. Novartis may terminate the collaboration agreement after sixty days' notice in the event of a change in control or liquidation of CombinatoRx, as defined in the collaboration agreement. Should Novartis exercise its right to terminate the collaboration agreement after a change of control or liquidation of CombinatoRx, CombinatoRx will be required to pay Novartis: $3.0 million if such termination is effective prior to November 1, 2009, $2.0 million if such termination is effective between November 1, 2009 and May1, 2010, and $1.0 million if such termination is effective between May 1, 2010 and November 1, 2010.