EX-10.1 3 nktr-ex101_104.htm EX-10.1 nktr-ex101_104.htm

Exhibit 10.1

STRATEGIC COLLABORATION AGREEMENT

BY AND BETWEEN

Nektar Therapeutics

AND

Bristol-Myers Squibb Company

DATED FEBRUARY 13, 2018

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.


 

TABLE OF CONTENTS

Article 1 DEFINITIONS

1

 

Article 2 OVERVIEW; JOINT EXECUTIVE COMMITTEE

29

 

 

2.1

Scope of Collaboration29

 

 

2.2

Joint Executive Committee29

 

 

2.3

Responsibilities of the JEC30

 

Article 3 JOINT DEVELOPMENT

30

 

 

3.1

Joint Development Plan30

 

 

3.2

Collaboration Study Management31

 

 

3.3

Joint Development Committee34

 

 

3.4

Operational Authority Generally38

 

 

3.5

Alliance Managers39

 

 

3.6

Joint Development Committee Decision-Making40

 

 

3.7

Dispute Resolution40

 

 

3.8

Final Decision-Making Authority of the Parties41

 

 

3.9

Formulation Development41

 

 

3.10

Conduct42

 

Article 4 DEVELOPMENT RESPONSIBILITIES

42

 

 

4.1

General Responsibilities of the Parties42

 

 

4.2

Specific Responsibilities of the Parties42

 

 

4.3

Documents and Collaboration Study Contracts50

 

Article 5 MANUFACTURE AND SUPPLY

51

 

 

5.1

Joint Manufacturing Committee51

 

 

5.2

Responsibilities and Authority of the Joint Manufacturing Committee51

 

 

5.3

Manufacture and Supply of Nektar Assets and Products53

 

 

5.4

Manufacture and Supply of BMS Assets56

 

 

5.5

Manufacturing Option56

 

 

5.6

Quality Agreement58

 

 

5.7

Supply Agreements58

 

Article 6 GLOBAL DEVELOPMENT COST SHARING

59

 

 

6.1

Manufacturing and Supply Expenses; Intellectual Property Expenses59

 

 

6.2

Monotherapy Collaboration Studies Expenses59

 

 

6.3

Combined Therapy Collaboration Studies Expenses59

 

 

6.4

Nektar Annual Development Cost Cap59

 

Article 7 INDEPENDENT DEVELOPMENT

60

 

 

7.1

General60

 

 

7.2

Current Nektar Studies61

 

 

7.3

Independent Studies: Rights and Limitations61

 

 

7.4

Reimbursement for Opt-Out Development Costs65

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.


 

 

Article 8 GLOBAL COMMERCIALIZATION

66

 

 

8.1

Joint Commercialization66

 

 

8.2

Joint Commercialization Committee66

 

 

8.3

Responsibilities of the Joint Commercialization Committee67

 

 

8.4

Joint Commercialization Committee Decision-Making68

 

 

8.5

Dispute Resolution69

 

 

8.6

Final Decision-Making Authority of the Parties69

 

 

8.7

Pricing69

 

 

8.8

Booking of Sales70

 

 

8.9

Commercialization70

 

 

8.10

Trademarks73

 

 

8.11

Sales Representatives73

 

 

8.12

BMS Combination Commercialization Option74

 

 

8.13

Returns76

 

 

8.14

Recalls, Market Withdrawals or Corrective Actions76

 

 

8.15

Medical Inquiries76

 

 

8.16

Events Affecting Integrity or Reputation76

 

Article 9 FINANCIAL MATTERS

77

 

 

9.1

Initial Payments77

 

 

9.2

Development Milestone77

 

 

9.3

Commercial Milestones78

 

 

9.4

Global Commercial Profit Sharing79

 

 

9.5

Calculation and Payment of Net Profit/Net Loss Share80

 

 

9.6

Joint Finance Committee81

 

 

9.7

Procedures For Development Cost Reporting and Reconciliation: Collaboration Studies and Independent Studies84

 

 

9.8

Certain Tax Matters86

 

 

9.9

Currency of Payments; Payment Method86

 

 

9.10

Interest on Late Payments86

 

 

9.11

Withholding of Taxes86

 

 

9.12

Indirect Taxes87

 

 

9.13

Financial Records87

 

 

9.14

Audit87

 

 

9.15

[***]88

 

Article 10 GLOBAL REGULATORY

88

 

 

10.1

Regulatory Approvals88

 

 

10.2

Regulatory Authority Inspection89

 

 

10.3

Regulatory Documentation90

 

 

10.4

Records90

 

 

10.5

Ownership of Study Data90

 

 

10.6

Use of Study Data90

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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10.7

Access to Study Data92

 

 

10.8

Adverse Event Reporting92

 

Article 11 INTELLECTUAL PROPERTY

92

 

 

11.1

Nektar Grants92

 

 

11.2

BMS Grants94

 

 

11.3

Sublicensing94

 

 

11.4

No Implied Licenses95

 

 

11.5

Inventions95

 

 

11.6

Infringement of Patent Rights by Third Parties99

 

 

11.7

Infringement of Third Party Rights101

 

 

11.8

Samples101

 

Article 12 CONFIDENTIALITY

102

 

 

12.1

Nondisclosure and Nonuse of Confidential Information102

 

 

12.2

Exceptions103

 

 

12.3

Authorized Disclosure104

 

 

12.4

Disclosure to Ono105

 

 

12.5

Press Releases and Publications105

 

 

12.6

Compliance with Sunshine Laws107

 

 

12.7

Response Plan and Notification of Non-Authorized Disclosures108

 

 

12.8

Destruction of Confidential Information108

 

Article 13 REPRESENTATIONS, WARRANTIES AND COVENANTS

108

 

 

13.1

Authority and Binding Agreement108

 

 

13.2

No Conflicts108

 

 

13.3

Litigation109

 

 

13.4

No Adverse Proceedings109

 

 

13.5

Consents109

 

 

13.6

No Debarment109

 

 

13.7

Compliance with Applicable Law109

 

 

13.8

Compliance with Party Specific Regulations110

 

 

13.9

Compliance with Internal Compliance Codes110

 

 

13.10

Affiliates110

 

 

13.11

Ethical Business Practices110

 

 

13.12

Single Agent Compound Safety Issues111

 

 

13.13

Single Agent Compound Information111

 

 

13.14

Accounting111

 

 

13.15

Compliance with Ono-BMS Agreements111

 

 

13.16

Nektar Representations and Warranties111

 

 

13.17

BMS Representations and Warranties112

 

 

13.18

Representations and Warranties of the Parties as of the Effective Date113

 

 

13.19

DISCLAIMER OF WARRANTY113

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Article 14 INDEMNIFICATION

113

 

 

14.1

BMS Indemnification113

 

 

14.2

Nektar Indemnification114

 

 

14.3

Certain Injuries114

 

 

14.4

Indemnification Procedure114

 

 

14.5

Separate Defense of Claims114

 

 

14.6

Insurance114

 

 

14.7

LIMITATION OF LIABILITY114

 

Article 15 DISPUTE RESOLUTION

115

 

 

15.1

Dispute Resolution115

 

 

15.2

Commercial & Financial Disputes115

 

 

15.3

Arbitration Matters117

 

Article 16 TERM AND TERMINATION

117

 

 

16.1

Term117

 

 

16.2

Termination for Material Breach117

 

 

16.3

Termination for Bankruptcy118

 

 

16.4

Termination or Suspension of Collaboration Study due to Material Safety Issue or Clinical Hold118

 

 

16.5

BMS Right to Terminate without Cause119

 

 

16.6

Effect of Termination119

 

 

16.7

Survival124

 

Article 17 MISCELLANEOUS

125

 

 

17.1

Effective Date125

 

 

17.2

Bankruptcy126

 

 

17.3

Entire Agreement126

 

 

17.4

Governing Law126

 

 

17.5

Submission to Jurisdiction127

 

 

17.6

Injunctive Relief127

 

 

17.7

Force Majeure127

 

 

17.8

Notices128

 

 

17.9

No Waiver; Modifications129

 

 

17.10

No Strict Construction129

 

 

17.11

Independent Contractor129

 

 

17.12

Assignment129

 

 

17.13

Headings130

 

 

17.14

Counterparts130

 

 

17.15

Severability130

 

 

17.16

Performance by Affiliates130

 

 

17.17

Further Assurance131

 

 

17.18

No Benefit to Third Parties131

 

 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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STRATEGIC COLLABORATION AGREEMENT

This Strategic Collaboration Agreement (the “Agreement”) is entered into as of February 13, 2018 (the “Execution Date”), and effective as of the Effective Date, by and between Nektar Therapeutics, a Delaware corporation, headquartered at 455 Mission Bay Boulevard South, Suite 100, San Francisco, California 94158 (“Nektar”), and Bristol-Myers Squibb Company, a Delaware corporation, headquartered at 345 Park Avenue, New York, New York, 10154 (“BMS”).  Nektar and BMS may be referred to herein individually as a “Party,” or collectively as the “Parties.”

RECITALS

WHEREAS, Nektar controls certain Patent Rights, Technology and other rights related to the Nektar Compounds (as defined below), and has expertise in research and development of large and small molecule therapeutic products;

WHEREAS, BMS is a biopharmaceutical company engaged in the research, development, manufacture and commercialization of human therapeutic products;

WHEREAS, pursuant to that certain Clinical Trial Collaboration Agreement, dated September 21, 2016, by and between Nektar and BMS (the “Clinical Trial Agreement”), Nektar and BMS have collaborated on one or more clinical trials of a combination therapy using Nektar’s IL2-based CD122-biased agonist, known as “NKTR-214”, and BMS’s human monoclonal antibody that binds PD-1 known as “Nivolumab;”

WHEREAS, the Parties desire to collaborate in the further Development of NKTR-214 in the Field (as defined below) to the extent set forth herein, which, if successfully developed in accordance with this Agreement, will be jointly commercialized by the Parties, all subject to the terms and conditions set forth herein; and

WHEREAS, Nektar and BMS desire to enter into the transaction contemplated by this Agreement, which will supersede and replace the Clinical Trial Agreement.

NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants contained herein, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

Article 1

DEFINITIONS

The terms in this Agreement with initial letters capitalized shall have the meaning set forth below or, if not listed below, the meaning designated in places throughout this Agreement.

1.1Affiliate” shall mean, with respect to a particular Person, any other Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such particular Person, but only for so long as such Person meets the

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.


 

 

definition of Affiliate hereunder.  As used in this section, the term “controls” (with correlative meanings for the terms “controlled by” or “under common control with”) means (a) that a Person owns, directly or indirectly, more than fifty percent (50%) of the voting stock of another Person, or (b) that such Person otherwise has the actual ability to control and direct the management of the other Person, whether by contract or otherwise.

1.2Aggregate Safety Information” shall mean, with respect to a Party’s Single Agent Compound, the (a) safety and toxicity information for such Single Agent Compound that is Collaboration Study Data, plus (b) safety and toxicity information from all other clinical trials of such Single Agent Compound, whether alone or in combination with another pharmaceutical agent, in each case including information related to Serious Adverse Events, adverse drug reactions, adverse events, discontinuations due to adverse events and Grade 3 and Grade 4 laboratory abnormalities.  Aggregate Safety Information shall be provided by a Party to the other in the same format as is contained in the investigators’ brochures prepared by such Party for its Single Agent Compound in each country where a Collaboration Study will be conducted.

1.3Agreement” shall have the meaning set forth in the preamble to this Agreement, as it may be amended by the Parties from time to time.

1.4Agreement Wind-Down Period” has the meaning set forth in Section 16.6(b)(iii).

1.5Alliance Manager” has the meaning set forth in Section 3.5.

1.6Allowable Delays” shall mean reasonable delays for a Collaboration Study, including as a result of (a) interactions with Regulatory Authorities and changes to any Collaboration Study resulting therefrom, (b) Material Safety Issues, (c) Product or compound supply issues, (d) [***], and (e) [***].

1.7Allowable Commercialization Expenses” shall mean those expenses (a) incurred in connection with the Commercialization of the Products pursuant to the Commercialization Plan and Budget and (b) that are consistent with the approved Commercialization Plan and Budget and are specifically attributable to Products, and shall consist of (i) Cost of Goods Sold, (ii) Marketing Expenses, (iii) Distribution Expenses, and (iv) Post-Approval Regulatory Expenses. The JFC shall establish procedures for the calculation of Allowable Commercialization Expenses, including proper allocation of FTE costs to the extent that such FTEs promote other products (including the allocation of sales force effort between first, second and third position detail) or otherwise engage in activities not solely related to the Commercialization of the Product.  For clarity, subject to Section 9.5, each Party shall be responsible for and solely bear any Commercialization expenses not contemplated in, or in excess of the agreed amounts set forth in, the approved Commercialization Plan and Budget.  

1.8Applicable Law” shall mean all applicable laws, rules and regulations (whether supra-national, federal, state or local) that may be in effect from time to time and applicable to

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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conduct under this Agreement, including current Good Clinical Practices, Good Laboratory Practices and Good Manufacturing Practices.

1.9Arbitration Matter” shall mean any Dispute, other than a Commercial/Financial Dispute and a JDC Dispute referred to in Section 3.7(b); provided that such Dispute has been considered, but not resolved, by the Executive Officers as set forth in Section 15.1(a).  For clarity, neither a JDC Dispute, nor any matter hereunder for which final decision making authority is granted to one Party or the other, nor any Publication Dispute, nor any other matter expressly requiring mutual agreement of both Parties shall be an Arbitration Matter.

1.10Bioanalysis Plan” shall mean the bioanalysis plan for any Samples as may be contemplated by a Collaboration Study, Protocol or another subsequent written agreement between the Parties.

1.11BLA” shall mean (a) a Biologic License Application (or, if applicable, New Drug Application (“NDA”) or 505(b)(2)) submitted and filed with the FDA (or successor regulatory agency) necessary for approval of a drug or biologic in connection with the commercial sale or use of such drug or biologic in conformance with Applicable Laws in the United States or (b) the equivalent application submitted to another Regulatory Authority.

1.12BMS” shall have the meaning set forth in the preamble to this Agreement.

1.13BMS Asset Invention” shall mean any invention or Technology that is made, conceived, or first actually reduced to practice by or on behalf of a Party, or by or on behalf of the Parties jointly (including by a Third Party in the performance of a Collaboration Study or an Independent Study), in the performance of the Collaboration Studies or in the performance of an Independent Study (which Independent Study may be led by either Party) and that relates to (a) the composition of matter or formulation of one or more BMS Assets as sole active ingredients, (b) a method of manufacture or formulating of one or more BMS Assets as a single agent or in combination with another BMS Asset (but not a Nektar Asset or Third Party Asset), or (c) a method of use of any BMS Asset as a monotherapy or in combination with another BMS Asset (but not a Nektar Asset or Third Party Asset).

1.14BMS Asset Patent Rights” shall mean any Patent Rights that Cover any BMS Asset Invention or BMS Study Data, excluding BMS Background Patent Rights, Joint Collaboration Patent Rights and Joint Third Party Patent Rights.

1.15BMS Assets” shall mean all compounds Controlled by BMS or any of its Affiliates (or, solely in relation to the BMS/Ono Territory and the BMS Compound, Ono), including the BMS Compound.

1.16BMS Background Patent Rights” shall mean any Patent Rights Controlled by BMS (or its Affiliates) as of the Effective Date, and during the Term through efforts outside the scope of this Agreement, that Cover the use (whether alone or in combination with other agents),

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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manufacture, formulation or composition of matter of any BMS Assets, but which do not comprise a BMS Asset Invention, a Joint Collaboration Invention, or a Joint Third Party Invention.

1.17BMS Combination” shall mean a combination of a Product, one or more BMS Asset and/or one or more Third Party Asset (but no other Nektar Asset), but in each instance as single agent formulations in the combination, for use in the Field.

1.18BMS Combination Commercialization Option” has the meaning set forth in Section 8.12(a).

1.19BMS Compound” shall mean BMS’s proprietary anti-PD-1 monoclonal antibody known as Nivolumab and Opdivo®.

1.20BMS Indemnitees” has the meaning set forth in Section 14.2.

1.21BMS/Ono Territory” shall mean Japan, South Korea and Taiwan.

1.22BMS Regulatory Documentation” shall mean any Regulatory Documentation related to any BMS Asset that exists as of the Effective Date or that is created during the Term through efforts outside the scope of this Agreement.

1.23BMS Share of Net Profit” has the meaning set forth in Section 9.4(a).

1.24BMS Study Data” has the meaning set forth in Section 10.5.

1.25BMS Successor” has the meaning set forth in the definition of Change of Control.

1.26BMS Technology” shall mean all Technology Controlled by BMS (or its Affiliates) as of the Effective Date or during the Term through efforts outside the scope of this Agreement related to any BMS Asset and necessary or reasonably useful, as determined by BMS, for the conduct of Collaboration Studies or Independent Studies.  For clarity, BMS Technology does not include (a) Joint Collaboration Inventions, (b) Joint Third Party Inventions, (c) Study Data, or (d) Collaboration Study Regulatory Documentation.

1.27Breaching Party” has the meaning set forth in Section 16.2(a).

1.28Bulk Form” has the meaning set forth in Section 5.3(a).

1.29Business Day” shall mean a day other than Saturday, Sunday or any day on which commercial banks located in New York, NY are authorized or obligated by Applicable Law to close.

1.30Calendar Quarter” shall mean each successive period of three (3) months ending on March 31, June 30, September 30 and December 31 of each Calendar Year; provided, that the first Calendar Quarter under this Agreement will be the period beginning on the Effective Date

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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and ending on the end of the Calendar Quarter in which the Effective Date is encompassed and the last Calendar Quarter of the Term will be the period beginning on January 1 and ending on the effective date of expiration or termination of this Agreement.

1.31Calendar Year” shall mean each successive period of twelve (12) months commencing on January 1 and ending on December 31; provided, that the first Calendar Year under this Agreement will be the period beginning on the Effective Date and ending on the end of the Calendar Year in which the Effective Date is encompassed and the last Calendar Year of the Term will be the period beginning on January 1 and ending on the effective date of expiration or termination of this Agreement.

1.32Change of Control” shall mean, with respect to Nektar, (a) the sale, disposition, or license to a Third Party of all or substantially all of Nektar’s rights, title and interests in and to NKTR-214 (or any other Nektar Compound for which a registrational Clinical Trial has been initiated or a BLA has been Filed); (b) the acquisition by a Third Party which constitutes (i) one person, as such term is used in Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended, together with any of such person’s “affiliates” or “associates,” as such terms are defined in the Securities Exchange Act of 1934, as amended, other than an employee benefit plan (or related trust) sponsored or maintained by Nektar or any of its Affiliates, or (ii) persons “acting in concert” as such term is used in the Internal Revenue Code, of more than fifty percent (50%) of the outstanding shares of voting capital stock of Nektar; (c) the acquisition, merger or consolidation of Nektar with or into another Person, other than, in the case of this Section 1.32, an acquisition or a merger or consolidation of Nektar in which the holders of shares of voting capital stock of Nektar, immediately prior to such acquisition, merger or consolidation will beneficially own, directly or indirectly, more than fifty percent (50%) of the shares of voting capital stock of the acquiring Third Party or the surviving entity in such acquisition, merger or consolidation, as the case may be, immediately after such acquisition, merger or consolidation; or (d) the sale or disposition to a Third Party of all or substantially all of the assets of Nektar; provided, however, that notwithstanding subsection (a) – (d) above, a stock sale to underwriters of a public offering of Nektar’s capital stock shall not constitute a Change of Control.  Such Third Party or Person as set forth in subsections (a) – (d) the “Nektar Successor.”  Change of Control shall apply to BMS mutatis mutandis (subject only to appropriate modifications of the references to include Opdivo® in subsection (a), with such Third Party or Person set forth in such subsections (a) – (d) the “BMS Successor”).

1.33Clinical Hold” shall mean (i) an order issued by the FDA to a Party pursuant to 21 C.F.R. §312.42 to delay a proposed clinical investigation or to suspend an ongoing clinical investigation of the Combined Therapy, Monotherapy or such Party’s Single Agent Compound in the United States or (ii) an equivalent order to that set forth in subclause (i) issued by a Regulatory Authority other than the FDA in any other country or group of countries.

1.34Clinical Manufacturing Costs” shall mean the (a) external costs and expenses and (b) internal direct costs (including labor), to Manufacture the Nektar Assets and BMS Assets and all other costs and expenses, as agreed by the JMC and JFC, in each case that are incurred by a

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Party or its Affiliates for the Manufacture and supply of the Nektar Assets and BMS Assets for clinical purposes (including out-of-pocket external and internal costs, in each case, for process development, scale up, stability studies, qualification lots, validation lots and post-launch studies that may be required in connection with a conditional Regulatory Approval), in each case to the extent incurred in accordance with this Agreement in relation to a Collaboration Study,  Independent Study or other Joint Development Plan activities. Without limiting the generality of the preceding, Schedule 1.34 (Clinical Manufacturing Costs), which may be amended from time to time by the JMC and approved by the JDC, sets forth a schedule of certain costs and expenses acknowledged and agreed by the Parties (x) to be included in the Clinical Manufacturing Costs, and (y) to be excluded from the Clinical Manufacturing Costs.  For clarity, Clinical Manufacturing Costs exclude general overhead beyond what is already included in the FTE Rate, costs associated with failed lots (due to a Party’s negligence) and other unabsorbed costs related to idle plant capacity.

1.35Clinical Trial” shall mean any human clinical study of a pharmaceutical product.

1.36Clinical Trial Agreement” has the meaning set forth in the Recitals to this Agreement.

1.37Closing” has the meaning set forth in the SPA.

1.38Closing Date” has the meaning set forth in the SPA.

1.39Collaboration Studies” shall mean all Monotherapy Collaboration Studies and Combined Therapy Collaboration Studies.

1.40Collaboration Study Data” has the meaning set forth in Section 10.5.

1.41Collaboration Study Development Costs” shall mean Development Costs for all Collaboration Studies.

1.42Collaboration Study Regulatory Documentation” shall mean any Regulatory Documentation to be submitted for the conduct of a Collaboration Study, but excluding (a) any Nektar Regulatory Documentation and (b) any BMS Regulatory Documentation.

1.43Collaboration Therapy” shall mean each line of therapy for the disease, syndrome or medical conditions set forth in Schedule 1.43 (as the same may be amended from time to time in accordance with this Agreement), however such disease, syndrome or medical conditions are diagnosed, prevented, controlled, treated or ameliorated.  For clarity, each Collaboration Therapy includes any and all product forms, presentations, formulations, doses, dosing regimens, methods of administration, biomarkers, patient populations, patient subpopulations, patient characteristics, patient segmentations or stratifications or combinations with other procedures (including chemotherapy, surgery and radiation) relating to any such disease, syndrome or medical condition.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.44Combined Therapy shall mean a therapy using (a) a Product on the one hand, in combination with one or more (b) (i) BMS Assets, (ii) other Nektar Assets, or (iii) any Third Party Assets, on the other hand, but in each instance as individual formulations, for use in the Field.

1.45Combined Therapy Collaboration IND” means the INDs referred to in Sections 3.2(e)(ii)(B) and 3.2(e)(iii).

1.46Combined Therapy Collaboration Studyshall mean any Clinical Trial or study targeting any Indication in the Field using a Combined Therapy and performed pursuant to the Joint Development Plan, and may include trials or studies testing such combination against control drugs or other combinations that do not contain the Nektar Compound.  For clarity, Combined Therapy Collaboration Studies may include Phase I Studies, Phase II Studies, Phase II/III Studies, Phase III Studies and any other studies or trials conducted hereunder following receipt of Regulatory Approval, at any time.

1.47Combined Therapy Collaboration Study Regulatory Documentation” shall mean any Regulatory Documentation to be submitted for the conduct of a Combined Therapy Collaboration Study, but excluding (a) any Nektar Regulatory Documentation and (b) any BMS Regulatory Documentation.

1.48Combined Therapy Independent Study” has the meaning set forth in Section 7.1.

1.49Commercial/Financial Dispute Arbitrator” has the meaning set forth in Section 15.2(a).

1.50Commercial/Financial Disputes” shall mean the following JCC Disputes or JFC Disputes:

(a)disputes regarding the determinations of an auditor under Section 9.14;

(b)disputes regarding what qualifies as a Development Cost under this Agreement;

(c)disputes regarding the allocation of different components of Development Costs, including Clinical Manufacturing Costs, between or among the Parties and/or a Third Party;

(d)disputes regarding what qualifies as a Clinical Manufacturing Cost under this Agreement;

(e)disputes regarding what qualifies as Allowable Commercialization Expenses (including with respect to Manufacturing, what costs should be treated as Clinical Manufacturing Costs versus COGS);

(f)disputes regarding the allocation of different components of Allowable Commercialization Expenses (e.g., detailing costs, Distribution Expenses) between (i) Products

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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and (ii) other goods (e.g., a BMS Asset or Nektar Asset (other than a Nektar Compound)) or services sold or provided by a Party outside this Agreement, in each case both during the development of and as incurred in connection with executing against the Commercialization Plan and Budget;

(g)disputes regarding what qualifies as Net Product Sales and the calculation thereof under this Agreement;

(h)disputes regarding whether a Development Milestone or Commercial Milestone has been achieved;

(i)disputes regarding the methodology for calculating Net Profits (including the inclusions or exclusions therefrom);

(j)disputes regarding applicable taxes or tax return related materials (e.g., elections or calculations);

(k)disputes regarding the Tax Matters Agreement;

(l)disputes regarding provisions of data or information requested by a Party in order to achieve and maintain Finance and Accounting Compliance; and

(m)disputes regarding the determination of the FTE Rate(s).

1.51Commercial Milestone” has the meaning set forth in Section 9.3(a).

1.52Commercial Milestone Payment” has the meaning set forth in Section 9.3(b).

1.53Commercialization” or “Commercialize” shall mean activities directed to obtaining pricing and reimbursement approvals, marketing, promoting, distributing, importing or selling a product.  Commercialization shall not include any activities related to Manufacturing.

1.54Commercialization Plan and Budget” shall mean the commercialization plan setting forth the Commercialization activities (pre- and post-launch) to be conducted with respect to the Products in the Field in the Territory (with emphasis on the Major Markets) during a given Calendar Year and the two succeeding Calendar Years, as developed and approved by the JCC using Commercially Reasonable Efforts (with no Party having final decision making authority) in accordance with Section 8.3, which plan shall describe the Commercialization objectives and activities (including advertising, education, planning, promotion, sales, sales force incentive plans, medical affairs, publication plans), the global Commercialization budget and the sales forecast for the Product in the Field in the Territory, as amended from time to time in accordance with the procedures set forth in this Agreement.  The initial Commercialization Plan and Budget shall be agreed to by the JCC (with no Party having final decision making authority) the earlier of (a) ninety (90) calendar days following the JDC’s decision to file for Regulatory Approval following the first successful Phase III Study (or other final pre-Filing study) of a Product or (b) forty-five (45)

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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calendar days following a public announcement of the first successful Phase III Study (or other final pre-Filing study) of a Product, and upon approval such initial Commercialization Plan and Budget shall become incorporated into this Agreement.

1.55“[***]” has the meaning set forth in the definition of Cost of Goods Sold.

1.56Commercially Reasonable Efforts” shall mean: (a) the carrying out of a Party’s obligations or tasks, other than as set forth in clause (b), with a level of efforts and resources consistent with the commercially reasonable practices normally devoted by a similarly situated Person, subject to and in accordance with the terms and conditions of this Agreement; and (b) where applied to a Party’s efforts to conduct any Collaboration Study under the applicable Protocol, the level of effort and resources normally devoted by such Party to conduct a Clinical Trial for a biopharmaceutical product or compound that is owned by it or to which it has rights, which is of similar market potential, profit potential or strategic value and at a similar stage in its development or product life based on conditions then prevailing and subject to the applicable Party’s contractual obligations to Third Parties existing as of the Execution Date.  Commercially Reasonable Efforts shall be determined on a country-by-country and Indication-by-Indication basis for the Product, and it is anticipated that the level of effort will change over time, reflecting changes in the status of the Product and the market(s) or country(ies).

1.57Confidential Information” shall mean the terms and conditions of this Agreement and the Investment Agreement (but not their existence) and, as disclosed by one Party to the other Party pursuant to this Agreement or any of the Investment Agreements, all confidential or proprietary information and materials, patentable or otherwise, in any form (written, oral, photographic, electronic, magnetic or otherwise), including, know-how, trade secrets, inventions or discoveries, processes, techniques, algorithms, patent information, financial and strategic information, databases, clinical trial endpoints, candidate selection criteria, technical information, specifications, data, formulae, intellectual property, software and other material and information of a Party relating to any products, projects or processes, including:

(a)all communications between the Parties or information of whatever kind whether recorded or not, and if recorded, in whatever medium, relating to or arising out of this Agreement or any of the Investment Agreements, whether disclosed prior to or after entering into this Agreement or any of the Investment Agreements;

(b)any information that a reasonable Person would understand to be the confidential information of the disclosing Party or that the Party indicates in writing is information of a confidential nature or which is marked “confidential”; and

(c)all copies and excerpts of the communications, information, notes, reports and documents in whatever form referred to in paragraph (a) or (b) of this definition.

1.58Control” or “Controlled” shall mean, with respect to any particular asset, information or intellectual property, that the applicable Party or one of its Affiliates owns or has a

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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license to such asset, information or intellectual property and that the applicable Party has the ability (after having complied with its contractual obligations to any applicable Third Party Collaborator) to grant a right, license or sublicense, or otherwise make available to the other Party as provided for herein without violating the terms of any agreement or other arrangement with any Third Party.

1.59Cost of Goods Sold” or “COGS” shall mean the Fully Burdened Costs to Manufacture a Product (but not any other Nektar Asset, BMS Asset or Third Party Asset) for Commercialization activities under this Agreement during the Term.  Notwithstanding the foregoing, to the extent that [***] shall be excluded from COGS.  For clarity, COGS shall not include any costs associated with Product process development, scale up costs, qualification lots and any other costs that are incurred prior to Regulatory Approval of a Product (for each Indication or Label expansion); provided, however, that if such costs are incurred after Regulatory Approval of a Product, the JFC shall recommend and the JCC shall determine whether such costs shall be included in Clinical Manufacturing Costs or COGS.

1.60Cover” shall mean, with respect to Patent Rights, that, but for rights granted to a Person under such Patent Rights, the practice by such Person of an invention described in such Patent Rights would infringe a claim included in such Patent Rights, or in the case of a Patent Right that is a patent application, would infringe a claim in such patent application if it were to issue as a patent.  “Covered” or “Covering” shall have correlative meanings.

1.61CRO” shall mean any Third Party contract research organization used to conduct a Collaboration Study, including laboratories and Third Parties used to maintain the Global Safety Database from a Collaboration Study, but, for clarity, excluding clinical trial sites and any Third Parties who are individuals.

1.62CRO Agreement” has the meaning set forth in Section 3.3(b)(xviii).

1.63CSRs” has the meaning set forth in Section 4.2(b)(vi).

1.64Cure Period” has the meaning set forth in Section 16.2(a).

1.65Current Studies” has the meaning set forth in Section 7.2.

1.66Database Lock” shall mean, with respect to each Collaboration Study, such actions as are taken with approval of the JDC to prevent any modification to the database of Study Data generated in the course of such Collaboration Study.

1.67Develop” shall mean with respect to a compound or product, those activities that are necessary or useful to research and develop such compound or product, to obtain and maintain registrations or Regulatory Approval(s) for such product, to support pricing/reimbursement for such product, and to support appropriate usage for such product, including research, analysis, testing, pre-clinical activities, Clinical Trials, supporting Manufacturing activities and related

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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regulatory activities, and any and all clinical, pre-clinical and development activities pertaining to biomarkers, lifecycle management and new indications and new formulations for such compound or such product, including, by way of example, the activities listed or referred to in the definition of Development Costs.  “Developing” and “Development” shall have correlative meanings.

1.68Development Budget” shall mean the budget for anticipated Development Costs set forth in the Joint Development Plan.

1.69Development Cost Cap” has the meaning set forth in Section 6.4(a).

1.70Development Costs” shall mean all pre- and post- launch (a) external costs and expenses, (b) Clinical Manufacturing Costs for the Nektar Compound, (c) Pre-Approval Regulatory Expenses, and (d) for Collaboration Studies conducted by a Party or a CRO, internal costs of FTEs (calculated at the FTE Rate) of either Party conducting or directly supporting such studies, incurred by a Party in Developing a Product, in each case to the extent incurred in accordance with this Agreement and consistent with the Development Budget, with such Party’s accounting methodologies generally and consistently applied and in accordance with U.S. GAAP.  Without limiting the generality of the preceding, Schedule 1.70 (Development Costs), which may be amended from time to time by the Joint Finance Committee and approved by the JDC, sets forth a schedule of certain costs and expenses acknowledged and agreed by the Parties (x) to be included in the Development Costs, and (y) to be excluded from the Development Costs.  For clarity, Development Costs include, as applicable, costs and expenses incurred in connection with the performance of clinical studies (including registrational studies) and any other studies or trials conducted hereunder following receipt of Regulatory Approval, at any time.  For clarity, Development Costs exclude general overhead beyond what is already included in the FTE Rate.

1.71Development Cost Reconciliation Procedures” has the meaning set forth in Section 9.7(a).

1.72Development Milestone” has the meaning set forth in Section 9.2(a).

1.73Development Milestone Payment” has the meaning set forth in Section 9.2(b).

1.74Development Program” shall mean the work performed by Nektar, BMS and their respective Affiliates, contractors or agents on behalf of Nektar or BMS (as the context may require) under this Agreement in accordance with the Joint Development Plan.

1.75Diligence Date” has the meaning set forth in Section 3.2(a).

1.76Dispute” has the meaning set forth in Section 15.1(a).

1.77Distribution Expenses” shall mean the direct costs and expenses specifically identifiable to the distribution, transportation, storage and insurance of the Product by a Party or its Affiliates (or its or their sublicensees) during the Term, including (and to the extent not included in COGS): (a) warehousing of the Product from the point of completion of production to the time

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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such Product is turned over to a carrier for delivery; (b) handling and transportation to fulfill orders, including outbound transportation costs and costs of moving goods from a manufacturing point to a warehouse at another location from which it is ultimately to be distributed to a customer; (c) customer services, including order entry, billing and adjustments, inquiry and credit and collection, but excluding costs or expenses that are reimbursed by any Third Party; and (d) out-of-pocket costs paid to Third Parties for distribution support.  For clarity, Distribution Expenses shall exclude any such costs or expenses, if any, treated as a deduction in the definition of Net Product Sales.

1.78Effective Date” has the meaning set forth in Section 17.1(a).

1.79Equity Payment” has the meaning set forth in Section 9.1(b).

1.80Execution Date” has the meaning set forth in the preamble to this Agreement.

1.81Executive Officers” shall mean the Chief Executive Officer of Nektar and the Chief Executive Officer of BMS, or their respective designated direct reports.

1.82Facility List” has the meaning set forth in Section 5.3(g).

1.83FDA” shall mean the United States Food and Drug Administration, or any successor agency having the same or similar authority.

1.84Field” shall mean (a) with respect to each of (i) NKTR-214 or (ii) any BMS Asset, all uses, including the diagnosis, prevention, control, treatment or amelioration, in humans and other animals, of all diseases or conditions, and (b) with respect to Nektar Compounds (other than NKTR-214), all uses, including the diagnosis, prevention, control, treatment or amelioration, in humans and other animals, of all diseases or conditions but excluding [***].

1.85Filing” shall mean the acceptance of filing of the applicable application by a Regulatory Authority.

1.86Finance and Accounting Compliance” shall mean, for a Party, the use of procedures, information sharing, reporting and reconciliation methods and timing, that individually and taken as a whole, enable such Party to comply with its internal finance and accounting methodologies consistently and generally applied, to comply with SEC and Sarbanes-Oxley rules and regulations, to satisfy external accounting audit requirements and to otherwise comply with Applicable Law.

1.87Finished Form” shall mean a product or compound that has been Manufactured into a presentation suitable for administration, finished and Labeled in accordance with the applicable specifications agreed to by the Parties, the applicable Regulatory Approvals, and Applicable Law.

1.88First Commercial Sale” shall mean the first sale in a country to a Third Party of any Product in the Field intended for use by an end-user customer of such Product in such country.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.89Fixed Dose Combination shall mean a pharmaceutical dosage form containing fixed doses of more than one active ingredient in which all active ingredients are present in a single vial or other form and shall expressly include so-called “co-packaging” in which separate drugs in separate dosage forms are sold in a single packaging unit.

1.90Fixed Dose Combination Product” shall mean a Fixed Dose Combination containing a Product.

1.91Force Majeure” has the meaning set forth in Section 17.7.

1.92FTE” shall mean, with respect to an individual (other than an employee that details a Product), the equivalent of the work of one (1) employee (which might include temporary workers) working full-time under this Agreement for one (1) year (consisting of at least a total of [***] per year (excluding vacations and holidays)). One FTE may constitute work performed by an individual whose time is dedicated solely to an individual activity hereunder, or may comprise the efforts of several individuals, each of whom dedicates only part of his or her time to work on an individual activity hereunder.

1.93FTE Rate” shall mean, for the period commencing on the Effective Date until such time as the Parties agree otherwise, [***] per FTE.  On a Calendar Year basis, the FTE Rate will be increased by a percentage equivalent to the change over the preceding twelve (12) month period in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CWUR0000SA0L1E).  The FTE Rate is assumed to be a fully burdened rate and includes costs of salaries, benefits, supplies, other employee costs and supporting general and administration allocations.

1.94Fully Burdened Costs to Manufacture” shall mean a Party’s internal and external costs and expenses of Manufacturing and supplying the Nektar Assets, BMS Assets or Products, as applicable, under this Agreement but solely for Commercialization of the Product or an Independent Study (as the case may be), including: (a) for the assets or components thereof Manufactured by such Party, the costs of all direct material, direct labor (inclusive of allocated expenses) and allocable manufacturing overhead consumed, provided or procured by such Party, in each case for the Manufacture of the applicable Nektar Assets, BMS Assets or Products based on such Party’s accounting policies as generally and consistently applied; (b) for assets or components thereof Manufactured by Third Party suppliers, the out-of-pocket costs paid to such Third Party suppliers by such Party; (c) such Party’s direct, allocable labor and related overhead costs incurred by such Party in managing and supporting (including technical and quality oversight) its supply chain for the Manufacture, storage, delivery, and supply of the applicable Nektar Assets, BMS Assets or Products, to the extent not included in Distribution Expenses; and (d) any other direct costs necessary to ship and store the applicable Nektar Assets, BMS Assets or Products, to the extent that such costs are not included in Distributing Expenses, including costs such as storage fees, material transport costs, and related duties and taxes, to the extent that (i) such costs in (a), (b), (c) and (d) above are incurred by such Party or its Affiliates, and (ii) they are reasonably allocable to the Manufacture of the applicable Nektar Assets, BMS Assets or Products.  

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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For clarity, the Fully Burdened Costs to Manufacture shall be determined in accordance with a Party’s accounting practices consistently and generally applied, and subject to audit by the other Party pursuant to Section 9.14, provided that failed lots (due to a Party’s negligence), excess overhead and other unabsorbed costs related to idle plant capacity are excluded from this definition.

1.95Fully Burdened Costs” shall mean direct costs and expenses, plus FTE costs, provided that failed lots (due to a Party’s negligence), excess overhead and other costs related to idle plant capacity are excluded from this definition.

1.96Global Pricing and Reimbursement Plan(s)” shall mean the strategy and plan setting forth the pricing for each Product in the Field in the Territory on a global basis during a given Calendar Year and the [***] succeeding Calendar Years, as developed and approved by the JCC in accordance with Section 8.3, as amended from time to time in accordance with the procedures set forth in this Agreement.  Upon adoption of each Global Pricing and Reimbursement Plan in accordance with this Agreement, such plan shall become incorporated into this Agreement.

1.97Global Safety Database shall mean the database containing Serious Adverse Events, serious adverse drug reactions and pregnancy reports for the Product, and shall be the authoritative data source for regulatory reporting and responding to regulatory queries.

1.98Good Clinical Practices” or “GCP” shall mean the standards, practices and procedures set forth in the International Conference on Harmonization guidelines entitled in “Good Clinical Practice: Consolidated Guideline,” including related regulatory requirements imposed by the FDA and (as applicable) any equivalent or similar standards in jurisdictions outside the United States, to the extent that such standards are applicable in the jurisdiction in which the relevant Collaboration Study is conducted or required to be followed in the jurisdiction in which Regulatory Authority approval of a product will be sought.

1.99Good Laboratory Practices” or “GLP” shall mean the regulations set forth in 21 C.F.R. Part 58 and the requirements thereunder imposed by the FDA and (as applicable) any equivalent or similar standards in jurisdictions outside the United States.

1.100Good Manufacturing Practices” or “GMP” shall mean the regulations set forth in 21 C.F.R. Parts 210–211 and 21 C.F.R. Parts 600 and 610, and the requirements thereunder imposed by the FDA, and, as applicable, any similar or equivalent regulations and requirements in jurisdictions outside the United States.

1.101IL-2 Agonistshall mean [***].

1.102IND” shall mean (a) an Investigational New Drug Application as defined in the Federal Food, Drug and Cosmetic Act, as amended, and regulations promulgated thereunder, or any successor application or procedure required to initiate clinical testing of a drug in humans in the United States; (b) a counterpart of such an Investigational New Drug Application that is

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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required in any other country before beginning clinical testing of a drug in humans in such country, including, for clarity, a “Clinical Trial Application” in the European Union; and (c) all supplements and amendments to any of the foregoing.

1.103Indemnify” has the meaning set forth in Section 14.1.

1.104Independent Studies” shall mean all Monotherapy Independent Studies and Combined Therapy Independent Studies.

1.105Independent Study Data” has the meaning set forth in Section 10.5.

1.106Indication shall mean, with respect to a particular Product, the use of such Product for treating a separate and distinct patient population based on the results of clinical study, and not a sub-category of patients previously covered by the Label for such Product.  For clarity, a Labelling change based on the results of a clinical study that removes a requirement for certain specified prior treatment shall be deemed a new Indication.

1.107Information Sharing Agreement” has the meaning set forth in Section 8.12(b).

1.108Informed Consent Form” or “ICF” has the meaning set forth in Section 3.4(a).

1.109Infringe” or “Infringement” has the meaning set forth in Section 11.6(a).

1.110Initial Trial” has the meaning set forth in Section 3.2(a).

1.111Internal Compliance Codes” has the meaning set forth in Section 13.9.

1.112Investment Agreements” shall mean (i) the SPA, and (ii) that certain Investor Agreement, dated as of the date hereof, entered into by and between Nektar and BMS, and attached hereto as Exhibit B.

1.113IRBs” has the meaning set forth in Section 12.3(d).

1.114JCC” or “Joint Commercialization Committee” has the meaning set forth in Section 8.2.

1.115JCC Co-Chair” has the meaning set forth in Section 8.2.

1.116JCC Dispute” has the meaning set forth in Section 8.5.

1.117JDC” or “Joint Development Committee” has the meaning set forth in Section 3.3(a).

1.118JDC Co-Chair” has the meaning set forth in Section 3.3(a).

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.119JDC Dispute has the meaning set forth in Section 3.7.

1.120JEC” or “Joint Executive Committee” has the meaning set forth in Section 2.2.

1.121JEC Co-Chair” has the meaning set forth in Section 2.2.

1.122JFC” or “Joint Finance Committee” has the meaning set forth in Section 9.6(a).

1.123JFC Co-Chair” has the meaning set forth in Section 9.6(a).

1.124JFC Dispute” has the meaning set forth in Section 9.6(c).

1.125JMC” or “Joint Manufacturing Committee” has the meaning set forth in Section 5.1.

1.126JMC Co-Chair” has the meaning set forth in Section 5.1.

1.127JMC Dispute” has the meaning set forth in Section 5.2(b).

1.128Joint Collaboration Invention(s)” shall mean any invention or Technology, whether or not patentable, that is made, conceived or first actually reduced to practice by or on behalf of a Party, or by or on behalf of the Parties together (including by a Third Party in the performance of a Collaboration Study or Independent Study), in the performance of the Collaboration Studies, Independent Studies, Statistical Analysis Plan or Bioanalysis Plan, but excluding any Nektar Asset Inventions, BMS Asset Inventions and Joint Third Party Inventions.  For clarity, Joint Collaboration Inventions include any invention conceived or first actually reduced to practice under a Collaboration Study or Independent Study and wherein the invention relates, whether generically or specifically, to the use of a combination of (a) one or more BMS Assets with (b) one or more Nektar Assets.  As used in this Agreement, Joint Collaboration Inventions exclude Joint Third Party Inventions.

1.129Joint Collaboration Patent Right(s)” shall mean any Patent Rights that are Controlled by either Party that Cover any Joint Collaboration Invention or Collaboration Study Data, excluding BMS Background Patent Rights and Nektar Background Patent Rights.

1.130Joint Development Plan” shall mean the written Product Development plan (including Monotherapy Collaboration Studies and Combined Therapy Collaboration Studies) undertaken jointly by the Parties (notwithstanding that one Party may lead a Clinical Trial or other activity), as developed and approved by the Parties in accordance with Section 3.1(b), as amended from time to time in accordance with the procedures set forth in this Agreement.  The Joint Development Plan excludes Independent Studies.  The initial Joint Development Plan, effective as of the Effective Date, is attached hereto as Schedule 3.1.

1.131Joint Third Party Invention” shall mean any invention or Technology that is made, conceived or first actually reduced to practice either by or on behalf of BMS, Nektar or a

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Third Party, or by or on behalf of BMS, Nektar or such Third Party together, in the performance of an Independent Study and that relates to a method of use of a combination of (a) one or more Third Party Asset with (b) one or more BMS Asset, and (c) one or more Nektar Asset.

1.132Joint Third Party Patent Right(s)” shall mean any Patent Rights that are Controlled by either Party and that Cover any Joint Third Party Invention, excluding BMS Background Patent Rights and Nektar Background Patent Rights.

1.133Labelling” or “Label” shall mean (a) the healthcare professional information or patient information that is part of a product’s or compound’s IND, BLA or Regulatory Approval, including the package insert, medication guides, summary of product characteristics (“SmPC”), patient information leaflets, company core safety information (“CCSI”), and company core data sheet (“CCDS”) and (b) any other product labelling required by Applicable Law.

1.134Launched Products” has the meaning set forth in Section 16.6(b)(iii).

1.135Lead Party” shall mean the Party to which the conduct of a Collaboration Study is assigned pursuant to this Agreement, including Section 3.2, whether or not such Party is the Sponsor of the applicable Collaboration Study.

1.136Loss Carry-Forward” has the meaning set forth in Section 9.4(a).

1.137Losses” has the meaning set forth in Section 14.1.

1.138Major Markets” shall mean the United States, [***].

1.139Manufacture” (and variations thereof) shall mean all activities related to the manufacturing of a product or compound, or any raw materials thereof, including (a) manufacturing process development and validation, process improvements, associated analytical development and validation, and the manufacture and testing of stability or consistency lots; and (b) manufacturing of a product or compound for Development or Commercialization, Labelling and packaging a product or compound, in-process and finished product or compound testing, quality assurance activities related to manufacturing and release of a product or compound, ongoing stability tests, and regulatory activities related to any of the foregoing.  

1.140Manufacturing Commencement Date” has the meaning set forth in Section 5.5(a).

1.141Manufacturing Option” has the meaning set forth in Section 5.5(a).

1.142Manufacturing Party” shall mean the Party that is responsible for the Manufacture of any Nektar Compounds or Product pursuant to this Agreement.  For clarity, both Parties may be Manufacturing Parties at the same time.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.143Marketing Expenses shall mean costs and expenses incurred by a Party or its Affiliates or Third Party Collaborator during the Term in the Territory that are specifically identifiable or reasonably allocable to the Commercialization of a Product in accordance with the Commercialization Plan and Budget by such Party or its Affiliates. Marketing Expenses shall include (a) pre-launch marketing expenses (to the extent incurred by the Parties in advance of the finalization of the Commercialization Plan and Budget), (b) direct-to-consumer advertising, (c) direct-to-healthcare professionals advertising, (d) costs of labor for personnel allocated to marketing activities, calculated using the FTE Rate, (e) out-of-pocket costs paid to Third Parties for marketing activities, (f) costs of obtaining outside services and materials and conducting outside activities, and (g) costs incurred by a Party or any of its Affiliates that are directly related to the cost of obtaining sales and marketing data. To the extent that an FTE of a Party or its Affiliates is not wholly dedicated to the Commercialization of the Products, the Party shall make an allocation of the FTE’s efforts to Commercialize the Products pursuant to the methodologies determined by the JFC in accordance with Section 9.6(b)(v). For clarity, Marketing Expenses shall exclude the cost and expense of activities that promote a Party’s business as a whole (e.g., corporate image advertising) and that are not otherwise specific to the Product.

1.144Material Amendments” has the meaning set forth in Section 3.1(b).

1.145Material Safety Issue” shall mean a Party’s good faith belief that there is an unacceptable risk for harm in humans based upon:  (a) pre-clinical safety data, including data from animal toxicology studies; or (b) the observation of Serious Adverse Events in humans after any Nektar Asset, BMS Asset or Third Party Asset, either as a single agent or in combination with another pharmaceutical agent (including as the Combined Therapy), has been administered to or taken by humans, such as during the Collaboration Study or Independent Study.

1.146Monotherapy” shall mean a therapy using a Nektar Compound as an individual formulation for use in the Field.

1.147Monotherapy Collaboration Study” shall mean any Clinical Trial or study targeting any Indication in the Field using solely a Nektar Compound and performed pursuant to the Joint Development Plan, and may include trials or studies testing such Nektar Compound against control drugs.  For clarity, Monotherapy Collaboration Studies include Phase I Studies, Phase II Studies, Phase II/III Studies, Phase III Studies and any other studies or trials conducted hereunder following receipt of Regulatory Approval, at any time.

1.148Monotherapy Independent Study” has the meaning set forth in Section 7.1.

1.149Monotherapy Collaboration Study Regulatory Documentation” shall mean any Regulatory Documentation to be submitted for the conduct of a Monotherapy Collaboration Study, but excluding (a) any Nektar Regulatory Documentation and (b) any BMS Regulatory Documentation.

1.150Nektar” has the meaning set forth in the preamble to this Agreement.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.151Nektar Asset Invention shall mean any invention or Technology that is made, conceived, or first actually reduced to practice by or on behalf of a Party, or by or on behalf of the Parties jointly (including by a Third Party in the performance of a Collaboration Study or an Independent Study), in the performance of the Collaboration Studies or in the performance of an Independent Study (which Independent Study may be led by either Party) and that relates to (a) the composition of matter or a formulation of one or more Nektar Assets as sole active ingredients, (b) a method of manufacture or formulating of one or more Nektar Assets as a single agent or in combination with one another, (c) a method of use of any Nektar Assets as a monotherapy or in combination with one another, (d) a method of manufacture or formulating of one or more Nektar Assets in combination with any Third Party Assets (but not a BMS Asset), or (e) a method of use of one or more Nektar Assets in combination with any Third Party Assets (but not a BMS Asset).

1.152Nektar Asset Patent Rights” shall mean any Patent Rights that Cover any Nektar Asset Invention or Nektar Study Data, excluding Nektar Background Patent Rights, Joint Collaboration Patent Rights, and Joint Third Party Patent Rights.

1.153Nektar Assets” shall mean all compounds Controlled by Nektar or any of its Affiliates, including Nektar Compounds.

1.154Nektar Background Patent Rights” shall mean any Patent Rights Controlled by Nektar (or its Affiliates) as of the Effective Date, and during the Term through efforts outside the scope of this Agreement, that Cover the use (whether alone or in combination with other agents), manufacture, formulation or composition of matter of any Nektar Asset, but which do not comprise a Nektar Asset Invention, a Joint Collaboration Inventions, or a Joint Third Party Invention.

1.155Nektar Combinations” shall mean (a) a Monotherapy use of a Product or (b) a combination of a Product, with one or more Nektar Asset and/or one or more Third Party Asset (but no BMS Asset), but in each instance as single agent formulations in the combination, for use in the Field.  

1.156Nektar Compound” shall mean:

(a)NKTR-214, as described in the attached Schedule 1.156(a), and

(b)during the period commencing on the Effective Date and ending on the [***] (or, if earlier, on the termination or expiration of this Agreement) or any other compound that is a conjugate between a PEG Reagent and [***] and for which both of the following are present: (i) such other compound is Controlled by Nektar or any of its Affiliates, and (ii) such compound [***].

For clarity, “Nektar Compounds” excludes (x) [***], as described in the attached Schedule 1.156(b)(1), (y) [***], as described in the attached 1.156(b)(2), and (z) any other compound that is a conjugate between a PEG reagent and [***].

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.157Nektar Excess Development Cost has the meaning set forth in Section 6.4(a).

1.158Nektar IND” means each of the INDs referred to in Sections 3.2(e)(i) and 3.2(e)(ii)(A).

1.159Nektar Indemnitees” has the meaning set forth in Section 14.1.

1.160Nektar Manufacturing Know-How” shall mean all Nektar Technology Controlled by Nektar, as of the Effective Date or during the Term, excluding any know-how contained within Nektar Background Patent Rights or Nektar Asset Patent Rights, that is necessary or reasonably useful to Manufacture a Nektar Compound or the PEG Reagent.

1.161Nektar Manufacturing Process” shall mean Nektar’s proprietary manufacturing processes for Manufacturing Nektar Compound.

1.162Nektar PEG Technology” has the meaning set forth in Schedule 5.5(d)(ii).

1.163Nektar Regulatory Documentation” shall mean any Regulatory Documentation related to any Nektar Asset that exists as of the Effective Date or that is created during the Term through efforts outside the scope of this Agreement.

1.164Nektar Share of Net Profit” has the meaning set forth in Section 9.4(a).

1.165Nektar Study Data” has the meaning set forth in Section 10.5.

1.166Nektar Successor” has the meaning set forth in the definition of Change of Control.

1.167Nektar Technology” shall mean all Technology Controlled by Nektar (or its Affiliates), as of the Effective Date or during the Term, through efforts outside the scope of this Agreement related to any Nektar Asset and necessary or reasonably useful, as determined by Nektar, for the conduct of the Collaboration Studies or Independent Studies.  For clarity, Nektar Technology does not include (a) Joint Collaboration Inventions, (b) Joint Third Party Inventions, (c) Study Data, or (d) Collaboration Study Regulatory Documentation.

1.168Net Product Sales” shall mean, with respect to a particular Product, the sum of the gross amount invoiced by a Party (including any Affiliate), a Third Party Collaborator or any sublicensee of such Party or of such Party’s Affiliate to unrelated Third Parties (except as described below), for the sale, disposition or other transfer of such Product in the Territory, less (without duplication or double counting) the following deductions from such sum which are actually incurred, allowed, paid, accrued or specifically allocated for such Product (as applicable):

[***]; and

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(f)Any other similar and customary deductions which are in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”).

To be clear, the following transfers are not included in Net Product Sales, even if such transfer is for value received: (i) transfers to a Third Party Collaborator, sublicensees or unrelated Third Parties performing activities in connection with a Collaboration Study or Independent Study (e.g., clinical trial partners, ex-U.S. commercial partners, etc.); and (ii) transfers to sublicensees from whom revenues are paid to the transferor (or its designee) on subsequent sales, dispositions or other transfers by such sublicensee (e.g., consignment arrangements).

Such amounts shall be determined from the books and records of a Party or sublicensee maintained and consistently applied from time to time in accordance with U.S. GAAP or, in the case of sublicensees, such similar accounting principles as consistently applied.  Each Party further agrees in determining such amounts, it will use such Party’s then-current standard procedures and methodology consistently applied, including such Party’s then-current standard exchange rate methodology for the translation of foreign currency sales into U.S. dollars or, in the case of sublicensees, such similar methodology, consistently applied.

For clarity, any revenue generated or received by Nektar through licenses or covenants not to sue granted to Third Parties outside of this Agreement regarding the use of Nektar Asset Patent Rights, Nektar Background Patent Rights, Nektar Technology or Nektar Regulatory Documentation, in each instance to the extent unrelated to Nektar Compounds, shall be excluded from Net Product Sales.

1.169Net Profits” shall mean the sum of (a) Net Product Sales of the Products and (b) Sublicensing Revenue, less Allowable Commercialization Expenses, on an aggregate worldwide basis. Net Profit shall be calculated for each Major Market, region or country basis, as agreed upon by the JCC and JFC. For the avoidance of doubt, the Upfront Payment, Equity Payment, Development Milestone Payments and Commercial Milestone Payments to Nektar, and any payments to Nektar as consideration with a Change of Control or other assignment under Section 17.12, are not included in the calculation of Net Profit.

1.170NKTR-214 Contract Manufacturer” has the meaning set forth in Schedule 5.5(d)(i).

1.171NKTR-214 Technology” has the meaning set forth in Schedule 5.5(d)(i).

1.172NKTR-214 Technology Transfer” has the meaning set forth in Schedule 5.5(d)(i).

1.173Non-Breaching Party” has the meaning set forth in Section 16.2(a).

1.174Officials” has the meaning set forth in Section 13.11.

1.175On-Going Collaboration Study” has the meaning set forth in Section 16.6(b)(ii).

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.176Ono shall mean Ono Pharmaceutical Co. Ltd.

1.177Ono-BMS Agreements” shall mean those certain Collaboration Agreements between BMS and Ono dated as September 20, 2011 and as of July 23, 2014, as amended from time to time, and agreements between Ono and BMS and their Affiliates relating thereto that may be in effect from time to time.

1.178Operational Matters” has the meaning set forth in Section 3.4(a).

1.179Opt-Out Development Cost Reconciliation Procedures” has the meaning set forth in Section 9.7(f).

1.180Opt-Out Development Costs” shall mean Development Costs for a Monotherapy Independent Study or Combined Therapy Independent Study, and will include the Clinical Manufacturing Costs for the applicable Nektar Compounds and Product, and further include, as applicable, the cost of supply of (a) other Nektar Assets to the extent that a fee was paid in relation to such supply pursuant to Section 7.3(b) and (b) Third Party Assets.

1.181Party” or “Parties” has the meaning set forth in the preamble to this Agreement.

1.182Party Specific Regulations” has the meaning set forth in Section 13.8.

1.183Patent Rights” shall mean any and all (a) United States or foreign patents and extensions or restorations by existing or future extension or restoration mechanisms, including supplementary protection certificates, patent term extensions, or the equivalents thereof; (b) United States or foreign patent applications, including all provisional applications, substitutions, continuations, continuations-in-part, divisionals, renewals, and all patents granted thereon; (c) United States or foreign patents-of-addition, reissues, reexaminations (including ex parte reexaminations, inter partes reviews, inter partes reexaminations, post grant reviews and supplemental examinations); and (d) any other form of government-issued rights substantially similar to any of the foregoing.

1.184Payment” has the meaning set forth in Section 13.11.

1.185PD-1” shall mean programmed cell death protein 1.

1.186PD-L1” shall mean programmed cell death-ligand 1.

1.187PEG” shall mean poly(ethylene) glycol.

1.188PEG Reagent” shall mean a PEG derivative used in the manufacture of Nektar Compounds.

1.189PEG Reagent Contract Manufacturer” has the meaning set forth in Schedule 5.5(d)(ii).

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.190PEG Technology Transfer” has the meaning set forth in Schedule 5.5(d)(ii).

1.191PEGylation” with correlative meanings “PEGylated” or to “PEGylate,” shall mean covalent chemical bonding of any reagent (including a PEG Reagent and including covalent chemical bonding through linking groups), with or to another material or materials.  Such materials include: proteins, peptides, polymers, oligomers, oligonucleotides, other biomolecules, small molecules, therapeutic agents, diagnostic agents, imaging agents and detectable labels.  PEGylation shall include the synthesis, derivatization, characterization, and modification of PEG for such purposes, together with the synthesis, derivatization, characterization and modification of the raw materials and intermediates for the manufacture of reagents (including PEG Reagents), Single Agent Compounds or Products incorporating such reagent by means of covalent chemical bonding, and all methods of making and using each and all of the foregoing.

1.192Person” shall mean an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.

1.193Pharmacovigilance Agreement” has the meaning set forth in Section 10.8.

1.194Phase I Study” shall mean a clinical trial of a Product generally consistent with 21 C.F.R. §312.21(a) or equivalent trial outside of the United States.

1.195Phase II Study” shall mean a clinical trial of a Product generally consistent with 21 C.F.R. §312.21(b) or equivalent trial outside of the United States.

1.196Phase II/III Study” shall mean a clinical trial of a Product that is (a) a Phase 2 Study combined with a Phase 3 Study, and (b) an adaptive design that includes a prospectively planned opportunity for modification of one or more specified aspects of the clinical trial design and hypothesis based on analysis of data (usually interim data) from subjects in such clinical trial.

1.197Phase III Study” shall mean a clinical trial of a Product generally consistent with 21 C.F.R. §312.21(c) or equivalent trial outside of the United States, which, for clarity, includes any open label extension.

1.198POTV” has the meaning set forth in Section 12.6(a).

1.199Pre-Approval Regulatory Expenses” shall mean any external Regulatory Expense (but not internal costs) with respect to an Indication incurred by a Party prior to Regulatory Approval of such Indication by the applicable Regulatory Authority. For clarity, Pre-Approval Regulatory Expenses shall be made on a Regulatory Authority-by-Regulatory Authority basis and an Indication-by-Indication basis.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.200Post-Approval Regulatory Expenses” shall mean any Regulatory Expense (internal and external) with respect to an Indication incurred by a Party after Regulatory Approval of such Indication by the applicable Regulatory Authority.  For clarity, Post-Approval Regulatory Expenses shall be made on a Regulatory Authority-by-Regulatory Authority basis and an Indication-by-Indication basis.  

1.201Pricing Decisions” has the meaning set forth in Section 8.3(d).

1.202Pricing Period” has the meaning set forth in Section 8.3(d).

1.203Product” shall mean any pharmaceutical composition, preparation or formulation that contains or comprises a Nektar Compound, but excluding any BMS Asset, other Nektar Asset or Third Party Asset.

1.204Product Brand Strategy” has the meaning set forth in Section 8.9(g)(i).

1.205Product Brand Strategy Working Team” has the meaning set forth in Section 8.9(g)(i).

1.206Product Marks” has the meaning set forth in Section 8.10(a).

1.207Protocol” has the meaning set forth in Section 3.2(d).

1.208Publication Dispute” has the meaning set forth in Section 12.5(b).

1.209Quality Agreement” has the meaning set forth in Section 5.6.

1.210Quarterly Report” has the meaning set forth in Section 9.5(c).

1.211Recipients” has the meaning set forth in Section 12.6(c).

1.212Regulatory Approval” shall mean any and all approvals (including supplements, amendments, pre- and post-approvals and BLA approvals), licenses, registrations or authorizations (including marketing and Labelling authorizations) of any national, supra-national (e.g., the European Commission or the Council of the European Union), regional, state or local Regulatory Authority, department, bureau, commission, council or other governmental entity, that are necessary for the Manufacture, Commercialization, use, storage, transport or sale of a product in a given jurisdiction.

1.213Regulatory Authority” shall mean the FDA or any other governmental authority outside the United States (whether national, federal, provincial and/or local) that is the counterpart to the FDA, including the European Medicines Agency for the European Union, and any successor regulatory agencies of the foregoing.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.214Regulatory Documentation shall mean all submissions to Regulatory Authorities in connection with the Development of a product, including all INDs, BLAs and NDAs and all amendments thereto, drug master files, correspondence with regulatory agencies, periodic safety update reports, adverse event files, complaint files, inspection reports and manufacturing records, in each case together with all supporting documents (including documents with respect to clinical data).

1.215Regulatory Expenses” shall mean those costs (internal and/or external, as the case may be) incurred in connection with filings to gain and maintain Regulatory Approvals and pricing reimbursement, including costs and expenses to prepare regulatory filings and fees paid to Regulatory Authorities.

1.216Results” has the meaning set forth in Section 12.5(b).

1.217Revenue Reporting and Reconciliation Procedures” has the meaning set forth in Section 9.5(a).

1.218Right of Cross-Reference” shall mean, with regard to a Party, an authorization that permits an applicable Regulatory Authority in a country to rely on the relevant information (by cross-reference, incorporation by reference or otherwise) contained in Regulatory Documentation (and any data contained therein) filed with such Regulatory Authority with respect to such Party’s Single Agent Compound (including, in the case of BMS, the Nektar INDs, the Combined Therapy Collaboration INDs or any other IND related to the Nektar Assets and, in the case of Nektar, the Combined Therapy Collaboration INDs or any other IND related to the BMS Assets), as necessary to conduct a Collaboration Study or Independent Study, to support marketing approval of a Product, to support a Label expansion, or to support a further Indication in such country or as otherwise expressly permitted or required under this Agreement to enable a Party to exercise its rights or perform its obligations hereunder, and, except as to information contained in a Nektar IND relating to a Combined Therapy or the Combined Therapy Collaboration IND, without the disclosure of underlying Confidential Information to such Party.

1.219Ruling” has the meaning set forth in Section 15.2(b).

1.220Samples” shall mean biological specimens collected from Collaboration Study subjects (including fresh and/or archived tumor samples, serum, peripheral blood mononuclear cells, plasma, and whole blood for RNA and DNA sample isolation).

1.221SEC” shall mean the U.S. Securities and Exchange Commission.

1.222Serious Adverse Event” or “SAE” shall mean an adverse event that results in any of the following outcomes: death, a life-threatening adverse event, inpatient hospitalization or prolongation of existing hospitalization, a persistent or significant incapacity or substantial disruption of the ability to conduct normal life functions, or a congenital anomaly/birth defect, is an important medical event (defined as a medical event(s) that may not be immediately life-

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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threatening or result in death or hospitalization but, based upon appropriate medical and scientific judgment, may jeopardize the participant or may require intervention).

1.223Single Agent Compound” shall mean, (a) with respect to Nektar, each Nektar Asset, and (b) with respect to BMS, each BMS Asset.

1.224Site/CRO List” has the meaning set forth in Section 3.4(c).

1.225SPA” shall mean that certain Share Purchase Agreement, dated as of the date hereof, entered into by and between Nektar and BMS, and attached hereto as Exhibit A.

1.226Sponsor” shall mean the Person that is the sponsor of record as provided in 21 C.F.R. §312.50 (and comparable Applicable Law outside of the United States) of a Clinical Trial with responsibility, unless otherwise delegated in accordance with 21 C.F.R. §312.52 (and comparable Applicable Law outside of the United States), for such Clinical Trial and making all required submissions to Regulatory Authorities related thereto.

1.227Statistical Analysis Plan” shall mean the set of analyses of the Study Data for each Collaboration Study conducted hereunder prepared by the Lead Party and approved by the JDC and shall include safety analyses for the Monotherapy or Combined Therapy in each Collaboration Study.  The Statistical Analysis Plan document for a Collaboration Study will be agreed to by the JDC before Database Lock and any material amendments thereto will require JDC approval.

1.228Study Data has the meaning set forth in Section 10.4.

1.229Sublicensing Revenue” shall mean with respect to a particular Product, the revenue received by a Party (including any Affiliate) from any sublicensee of such Party or of such Party Affiliate under this Agreement (including, in the case of BMS, the revenue set forth in Section 9.15), for the sale, license, disposition or other transfer of such Party’s rights, title and interest in a Product in the Territory.  Such amounts shall be determined from the books and records of a Party or sublicensee maintained and consistently applied from time to time in accordance with U.S. GAAP or, in the case of sublicensees, such similar accounting principles consistently applied.  Each Party further agrees in determining such amounts, it will use such Party’s then-current standard procedures and methodology consistently applied, including such Party’s then-current standard exchange rate methodology for the translation of foreign currency sales into U.S. dollars or, in the case of sublicensees, such similar methodology, consistently applied.  For clarity, any revenue generated or received by Nektar through licenses or covenants not to sue granted to Third Parties outside of this Agreement regarding the use of Nektar Asset Patent Rights, Nektar Background Patent Rights, Nektar Technology or Nektar Regulatory Documentation, in each instance to the extent unrelated to Nektar Compounds and Products, shall be excluded from Sublicensing Revenue.

1.230Sunshine Laws” has the meaning set forth in Section 12.6(c).

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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1.231Supply Agreement has the meaning set forth in Section 5.7.

1.232Tax Matters Agreement” has the meaning set forth in Section 9.8.

1.233Technology” shall mean information, inventions, discoveries, trade secrets, know-how, knowledge, technology, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, specifications, data and results not generally known to the public (including biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing and quality control data and know-how, including study designs and protocols), in all cases, whether or not patentable, in written, electronic or any other form now known or hereafter developed, materials, data and results, including Regulatory Documentation.

1.234Term” has the meaning set forth in Section 16.1.

1.235Territory” shall mean worldwide.

1.236Third Party” shall mean any Person other than Nektar, BMS and their respective Affiliates.

1.237Third Party Assets” shall mean all compounds Controlled by a Third Party or any of its Affiliates.

1.238Third Party Claim” has the meaning set forth in Section 14.1.

1.239Third Party Collaborator” means any Third Party (including, with respect to BMS, Ono) that is engaged with a Party in the Development or Commercialization of any Nektar Asset or BMS Asset, as applicable.

1.240Third Party License Payments” shall mean any payments (e.g., upfront payments, maintenance payments, milestones, royalties) due to any Third Party under license agreements or other written agreements granting rights to intellectual property owned or controlled by such Third Party to the extent that such rights are necessary for (a) the making, using or importing of a Party’s Single Agent Compound (other than a Nektar Compound) for the conduct of the Collaboration Studies, or (b) the conduct of any Collaboration Study.

1.241Upfront Payment” has the meaning set forth in Section 9.1(a).

1.242U.S. GAAP” has the meaning set forth in Section 1.168(f).

1.243Interpretation.  In this Agreement, unless the context otherwise requires, a reference to:

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(a)unless specified to the contrary, references to Articles, Sections, Schedules or Exhibits mean the particular Articles, Sections, Schedules or Exhibits of this Agreement and references to this Agreement include all Exhibits, Schedules and attachments hereto;

(b)any document includes a reference to that document (and, where applicable, any of its provisions) as amended, novated, supplemented or replaced from time to time;

(c)a statute or other law includes regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them;

(d)the singular includes the plural and vice versa, except as it regards the definitions of Party and Parties;

(e)one sex includes the other;

(f)“written” and “in writing” include any means of reproducing words, figures or symbols in a tangible and visible form, including acknowledged email or facsimile;

(g)a month or year is a reference to a calendar month or Calendar Year, as the case may be;

(h)“days” means calendar days;

(i)“include,” “includes” and “including” means including without limitation, or like expression unless otherwise specified, and “for example,” “e.g.,” “such as” and similar words or phrases are descriptive, not limiting;

(j)words such as “herein,” “hereof” and “hereunder” refer to this Agreement as a whole and not merely to the particular provision in which such words appear;

(k)“conventional T-cells” includes “effector T-cells”;

(l)the captions and headings to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement;

(m)dollars, “USD” or “$” refers to U.S. dollars; and

(n)“useful” means, when referring to data, information or intellectual property being disclosed, provided or otherwise transferred in order to engage in Development, Manufacturing or Commercialization activities hereunder, that such data, information or intellectual property: (i) is useful to such applicable activity as reasonably determined by the disclosing Party; (ii) has been used by the Party for the Development, Manufacturing or Commercialization of a Product in the Field in the Territory; or (iii) included in the abstract, disclosure or claims of any Patent Rights licensed hereunder.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Article 2

OVERVIEW; JOINT EXECUTIVE COMMITTEE

2.1Scope of Collaboration.  

(a)Goals.  The Parties shall, pursuant to this Agreement, collaborate to (i) conduct Collaboration Studies, (ii) Develop the Products in the Field pursuant to the Joint Development Plan and (iii) Commercialize the Products in the Field in the Territory.

(b)Pre-existing Clinical Trial Agreement.  This Agreement shall supersede and replace the Clinical Trial Agreement as of the Effective Date for all Combined Therapy Trials (as defined in the Clinical Trial Agreement), including with respect to any intellectual property rights arising from such Combined Therapy Trials; provided, however, that any “Development Costs” incurred with respect to a Combined Therapy Trial (as defined in the Clinical Trial Agreement) that has enrolled its first patient on or prior to the Effective Date of this Agreement (i) shall be reported by each Party pursuant to the reporting mechanisms set forth in this Agreement and (ii) such “Development Costs” shall be shared between the Parties pursuant to the cost allocations set forth in this Agreement, in each case commencing on the first calendar day of the next calendar month following the Effective Date.  For clarity, any Combined Therapy Trial (as defined in the Clinical Trial Agreement) that has not enrolled its first patient on or prior to the Effective Date of this Agreement but that has incurred “Development Costs” (x) shall be reported by each Party pursuant to the reporting mechanisms set forth in this Agreement and (y) any incurred “Development Costs” shall be shared between the Parties pursuant to the cost allocations set forth in this Agreement, in each case commencing on the Effective Date.  Notwithstanding anything to the contrary in this Section, the approved budget for each Combined Therapy Trial (as defined in the Clinical Trial Agreement) that has enrolled its first patient on or prior to the Effective Date shall be retained until and unless the JDC under this Agreement approves any amendments thereto.  To be clear, this Agreement shall supersede and replace the Clinical Trial Agreement as of the Effective Date for any rights or obligations created under the Clinical Trial Agreement, including in respect of any Collaboration Studies or Independent Studies initiated hereunder but, for clarity, shall not act as a waiver for any accrued obligation under the Clinical Trial Agreement.

2.2Joint Executive Committee.  Promptly after the Effective Date, the Parties shall form a Joint Executive Committee (the “JEC”).  The JEC shall consist of [***].  Each Party shall be responsible for determining the qualifications and substitutions of its JEC members. The JEC shall be co-chaired with one chairperson designated by each Party (each, a “JEC Co-Chair”).  The JEC shall meet at least [***], or at such other frequency as the JEC agrees (and it may appoint working teams to meet more frequently), provided that either Party through its JEC Co-Chair may request a meeting of the JEC at any time upon [***] notice to the other Party, with the understanding that the other Party will use reasonable efforts to comply with such request but such other Party will not be in breach of this Agreement in the event that it is unable to comply with such request but is using reasonable efforts to conduct a JEC meeting as promptly as practicable.  

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Upon request by either Party, such meetings will be held by audio or video teleconference; provided that face-to-face meetings shall occur at least [***], alternating between Princeton, NJ and San Francisco, CA unless otherwise agreed upon by the Parties.  There must be a minimum of [***] from each Party at any meeting of the JEC to constitute a quorum for decision-making.  No fewer than [***] prior to each meeting, and in any event as soon as reasonably practicable, each Party shall use good faith efforts to disclose to the other Party any proposed agenda items together with appropriate supporting information.  The Alliance Managers shall alternate responsibility for preparing and circulating definitive minutes of each meeting of the JEC.  Such minutes shall provide a description, in reasonable detail, of the discussions at the meeting, a list of material actions and decisions made by the JEC, a list of action items made by the JEC and a list of material issues not resolved by the JEC.  The Alliance Manager who drafts the minutes shall provide the other Alliance Manager and each Party’s JEC Co-Chair with the initial draft meeting minutes, who shall return the draft with any proposed changes, and this process shall be repeated until a final version of the meeting minutes is agreed upon and signed (or acknowledged as final via email) by the two JEC Co-Chairs.  The Parties shall reasonably cooperate to complete and agree upon a final version of meeting minutes within [***] from the date of the relevant meeting.  The final version of the meeting minutes shall be signed (or acknowledged as final via email) by the two JEC Co-Chairs, and each Party shall be provided with a copy of the final meeting minutes for its safekeeping.  A reasonable number of additional representatives of a Party may attend meetings of the JEC in advisory capacity with the prior written consent of the other Party; provided that any JEC meetings that includes representatives of either Party who are not JEC members may, at the request of any JEC member, include a closed session consisting of only JEC members and Alliance Managers.  All representatives to the JEC or attending JEC meetings shall be subject to confidentiality and nonuse restrictions at least as restrictive as those set forth herein.

2.3Responsibilities of the JEC.  The JEC shall have overall responsibility for the collaboration of the Parties pursuant to this Agreement, including (a) overseeing the Development and Commercialization of the Nektar Compounds and Products; (b) reviewing, resolving, and/or approving such matters as are referred to it by the Alliance Managers, JFC, JDC, JCC, JMC; and (c) performing such other duties as are expressly assigned to the JEC in this Agreement.

 

Article 3

JOINT DEVELOPMENT

3.1Joint Development Plan.  

(a)Performance of Development Program.  Nektar and BMS will act in good faith, using Commercially Reasonable Efforts, to perform their assigned tasks and responsibilities as described in the Development Program.

(b)Joint Development Plan.  The Joint Development Plan describes the work to be pursued by Nektar and BMS during each Calendar Year, which plan shall include a

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Development Budget for each Collaboration Study.  The Joint Development Plan may be updated at any time by mutual agreement of the Parties at a meeting of the JDC or by written agreement (including by email acknowledgment) of the JDC Co-Chairs without a meeting.  Any material amendments to the Joint Development Plan (“Material Amendments”), including the following, will be subject to mutual agreement of the Parties at a meeting of the JDC:

(i)adding or removing a Collaboration Study;

(ii)amending the Development Budget;

(iii)delaying the start of a Collaboration Study by [***];

(iv)approving any investigator-initiated study or investigator-initiated research for a Monotherapy or Combined Therapy;

(v)changing the tumor type(s) for a Collaboration Study;

(vi)changing the Indication or line of therapy for a Collaboration Study;

(vii)changing the compounds used in combination with the Product in a Collaboration Study;

(viii)changing the patient population of a given Collaboration Study;

(ix)changing the primary end points or key secondary end points for the Collaboration Study;

(x)materially changing the number of patients to be enrolled in a Collaboration Study;

(xi)material changes in the Statistical Analysis Plan or a Bioanalysis Plan; and

(xii)any other matters that the JDC or the Parties may agree are Material Amendments.

(c)Neither Party shall be required to continue a Collaboration Study if a Party (i) reasonably deems there to be a Material Safety Issue for such Collaboration Study or (ii) receives communications from a Regulatory Authority ordering or suggesting the discontinuation of such Collaboration Study.  Prior to the discontinuation of such Collaboration Study, representatives of the JDC shall meet and discuss in good faith such Material Safety Issue or such Regulatory Authority communication.  

3.2Collaboration Study Management.  

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(a)The Joint Development Plan will set out each Collaboration Study to be performed under the Joint Development Plan, including the initial NKTR-214 Clinical Trials set forth in the initial Joint Development Plan (each such initial NKTR-214 Clinical Trials, an “Initial Trial”).  The JDC shall determine the Lead Party and Sponsor for each Collaboration Study and the latest date by which each Collaboration Studies must have its first patient enrolled (the “Diligence Date”) (subject to Allowable Delays), provided that, unless otherwise agreed by the Parties, Nektar shall be the Lead Party and Sponsor for each Monotherapy Collaboration Study.  Notwithstanding anything to the contrary in this Agreement, the Lead Party and Sponsor (if different) for each Initial Trial shall be set forth in the initial Joint Development Plan.  Each Initial Trial shall commence as soon as practicable and the last Diligence Date for all such trials is fourteen (14) months from the Effective Date, subject to tolling for Allowable Delays.  The Parties intend to agree on end points for each Initial Trial that are intended, if met, to be sufficient to support a Nektar Compound Filing for Regulatory Approval.

(b)The JDC shall consider the capabilities of each Party and how to maximize the efficiency of the applicable Collaboration Study when determining the Lead Party for such Collaboration Study; provided that Nektar shall maintain a substantial operational role with respect to the overall clinical Development of the Product.  

(c)If all the Collaboration Studies for a particular Collaboration Therapy do not meet their agreed primary end points, such Collaboration Therapy will, unless otherwise agreed by the Parties, be removed from the Joint Development Plan and Schedule 1.43 by written notice from either Party to the other and the Parties shall use reasonable efforts to wind down activities related solely to such removed Collaboration Studies and will apply in this respect the principles set forth in Section 16.6.  If BMS is the Lead Party conducting one or more Collaboration Studies in a particular Collaboration Therapy and does not meet its Diligence Date (subject to Allowable Delays) for all of the Collaboration Studies in such Collaboration Therapy, such Collaboration Studies will remain in the Joint Development Plan, but the restrictions set forth in Section 7.3(d) will no longer apply to such Collaboration Therapy.

(d)Each Collaboration Study shall be conducted in accordance with a protocol (each, a “Protocol”) to be drafted by its Lead Party.  Such Protocol shall be mutually agreed upon by the Parties at a meeting of the JDC.  Any substantive amendments to a Protocol will be subject to mutual agreement of the Parties at a meeting of the JDC or by written agreement (including by email acknowledgment) of the JDC Co-Chairs without a meeting.  

(e)The JDC shall decide under which IND a Collaboration Study shall be conducted under; provided that, unless otherwise agreed by the Parties:

(i)if a Collaboration Study is for a Nektar Compound for use as Monotherapy, such trial shall be conducted under an existing IND for which Nektar is the Sponsor or a new IND for which Nektar shall be the Sponsor;

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(ii)if a Collaboration Study is for NKTR-214 for use as a Combined Therapy, such trial shall be conducted under either (A) an existing IND for which Nektar is the Sponsor or (B) if a new IND is required, a new IND for which the Lead Party shall be the Sponsor; and

(iii)if such Collaboration Study is for a Nektar Compound (other than NKTR-214) for use as a Combined Therapy, such trial shall be conducted under a new IND for which the Lead Party shall be the Sponsor.

(iv)Nektar IND.  Nektar shall have complete legal interest in and control of each Nektar IND.  Without limiting the obligation to share Net Profits under this Agreement, in no event will Nektar be required to obtain the consent of BMS to transfer or encumber any Nektar IND, and Nektar shall not have any obligation to share with BMS any consideration received in connection with the sale, license, use or other conveyance of any Nektar IND, provided that the transferee or encumbrance holder agrees to abide by the terms and conditions of this Agreement.  Nektar shall have complete control as to any Right of Cross-Reference granted by Nektar to a Third Party solely with respect to any portion of a Nektar IND relating to a Nektar Compound for use as monotherapy.

(v)Combined Therapy Collaboration IND.  Each Party shall have a beneficial one-half interest in each Combined Therapy Collaboration IND; provided, however, that:  (A) in no event will either Party be required to obtain the consent of the other Party to transfer or encumber its interest in a Combined Therapy Collaboration IND; provided that (1) the transferee or encumbrance holder agrees to abide by the terms and conditions of this Agreement, (2) any transfer occurs only in connection with, and to the same transferee of, a transfer of all of a Party’s rights in its applicable Single Agent Compound, and (3) each Party provide written notice of such transfer or encumbrance to the other Party within thirty (30) calendar days of such transfer or encumbrance; and (B) the Lead Party shall be the sole holder of all legal interests in the applicable Combined Therapy Collaboration IND, and without limiting the obligation to share Net Profits under this Agreement, neither Party shall have any obligation to share with the other Party any consideration received in connection with the sale, license or use of its interest in such Combined Therapy Collaboration IND where permitted by this Agreement.  Each Party is permitted to grant any Third Party a Right of Cross-Reference with respect to any portion of a Combined Therapy Collaboration IND relating to a Nektar Compound’s use in an Independent Study (and Nektar will cooperate and grant such Right of Cross-Reference solely with respect to any portion of a Nektar IND relating to a Nektar Compound’s use in an Independent Study, whether Nektar or BMS is the Lead Party).  Each Party shall provide a Right of Cross-Reference to its existing respective INDs or future INDs for its respective Single Agent Compound(s) as necessary to allow Combined Therapy Collaboration Studies to be conducted under applicable Nektar INDs or Combined Therapy Collaboration INDs.  For the avoidance of doubt, each Party shall be responsible for (X) drafting and updating as necessary the investigator’s brochure for its respective Single Agent Compound(s) and (Y) filing all necessary Regulatory Documentation to the existing or

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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future INDs for its respective Single Agent Compound(s), including the submission to such existing or future INDs of Serious Adverse Events and adverse drug reaction cases emerging from any Collaboration Study or any Independent Study.

(f)Each Party will make available and promptly disclose to the other Party all results of the work conducted by such Party pursuant to the Development Program, and this Agreement, and will keep such records (paper and electronic) as described herein.  Each Party will maintain records of the results in sufficient detail and in good scientific manner appropriate for patent purposes, and in a manner that properly reflects all work done and results achieved in the performance of the Development Program (including all data, such as minutes from dose escalation meetings with any Regulatory Authority and all final clinical study reports, in the form required to be maintained under any applicable governmental regulations).  Unless already provided pursuant to the Clinical Trial Agreement:

(i)Nektar shall provide BMS with the following relating to each Nektar Compound: [***].  All such disclosures are Confidential Information of Nektar.

(ii)BMS shall provide Nektar with the following relating to the BMS Compound: [***].  All such disclosures are Confidential Information of BMS.

(iii)The Lead Party for each Collaboration Study will make available and promptly disclose to the other Party all safety analyses for each Collaboration Study in accordance with the applicable Statistical Analysis Plan.  Each Party shall use any such data provided pursuant to this Section 3.2(f)(iii) solely to evaluate the safety of (A) its own compound for use in the Collaboration Studies and Independent Studies, (B) the Combined Therapy and (C) as permitted elsewhere in this Agreement.  All such disclosures are Confidential Information of both Parties; provided that any disclosures regarding a Monotherapy Collaboration Study for use of a Nektar Compound as a Monotherapy are the Confidential Information of Nektar.

(g)If further studies, including toxicity studies, are required or suggested by a Regulatory Authority as a prerequisite for conducting any of the Collaboration Studies, then the Parties agree to hold good faith discussions in a timely manner to agree upon a protocol for such studies, each of which will be considered a Collaboration Study and conducted on substantially the same terms as set forth herein (including the Development Cost sharing); provided that, if the Parties are unable to agree upon a protocol for such study or if the conduct of such study shall cause a delay deemed unsatisfactory by either Party, then such JDC Dispute shall be referred to the JEC for resolution pursuant to Section 3.7.

3.3Joint Development Committee.

(a)General.  Promptly after the Effective Date, the Parties shall form a Joint Development Committee (the “JDC”).  The JDC shall consist of [***].  Each Party shall be responsible for determining the qualifications and substitutions of its JDC members.  It is

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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anticipated that each Party’s representatives may include experts in finance, clinical development, patient safety, regulatory affairs and pharmaceutical quality.  The JDC shall be co-chaired with one chairperson designated by each Party (each, a “JDC Co-Chair”).  The JDC shall meet at least [***], or at such other frequency as the JDC agrees (and it may appoint working teams to meet more frequently), provided that either Party through its JDC Co-Chair may request a meeting of the JDC at any time upon [***] notice to the other Party, with the understanding that the other Party will use reasonable efforts to comply with such request but such other Party will not be in breach of this Agreement in the event that it is unable to comply with such request but is using reasonable efforts to conduct a JDC meeting as promptly as practicable.  Upon request by either Party, such meetings will be held by audio or video teleconference; provided that face-to-face meetings shall occur at least [***], alternating between Princeton, NJ and San Francisco, CA unless otherwise agreed upon by the Parties.  There must be a minimum of [***] from each Party at any meeting of the JDC to constitute a quorum for decision-making.  No fewer than [***] prior to each meeting, and in any event as soon as reasonably practicable, each Party shall use good faith efforts to disclose to the other Party any proposed agenda items together with appropriate supporting information.  The Alliance Managers shall alternate responsibility for preparing and circulating definitive minutes of each meeting of the JDC.  Such minutes shall provide a description, in reasonable detail, of the discussions at the meeting, a list of material actions and decisions made by the JDC, a list of action items made by the JDC and a list of material issues not resolved by the JDC.  The Alliance Manager who drafts the minutes shall provide the other Alliance Manager and each Party’s JDC Co-Chair with the initial draft meeting minutes, who shall return the draft with any proposed changes, and this process shall be repeated until a final version of the meeting minutes is agreed upon and signed (or acknowledged as final via email) by the two JDC Co-Chairs.  The Parties shall reasonably cooperate to complete and agree upon a final version of meeting minutes within [***] from the date of the relevant meeting.  The final version of the meeting minutes shall be signed (or acknowledged as final via email) by the two JDC Co-Chairs, and each Party shall be provided with a copy of the final meeting minutes for its safekeeping.  A reasonable number of additional representatives of a Party may attend meetings of the JDC in advisory capacity with the prior written consent of the other Party; provided that any JDC meetings that includes representatives of either Party who are not JDC members may, at the request of any JDC member, include a closed session consisting of only JDC members and Alliance Managers.  All representatives to the JDC or attending JDC meetings shall be subject to confidentiality and nonuse restrictions at least as restrictive as those set forth herein.

(b)Responsibilities of the Joint Development Committee.  Each Party shall use Commercially Reasonable Efforts to keep the JDC informed about activities performed by that Party under the Development Program.  The JDC will be responsible for the overall oversight of the Development Program.  The JDC (or in the absence of a formal JDC meeting the Co-Chairs) shall be responsible for the following:

(i)overseeing the Development Program, including approving the Joint Development Plan and any Material Amendments thereto;

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(ii)overseeing the activities of the Parties with respect to the Collaboration Studies, and providing a forum for the Parties to discuss, monitor and coordinate all activities and communications regarding the Collaboration Studies;

(iii)approving the annual, high-level Development Budget for each Collaboration Study (as reviewed and provided by the JFC to the JDC), including reviewing and approving any costs for a given budget of a Collaboration Study that are reasonably anticipated to be greater than [***] of the JDC-approved budget;

(iv)determining the Lead Party (and any secondary study sponsor and operational responsibilities of such sponsor) and Diligence Date for each Combined Therapy Collaboration Study;

(v)reviewing (A) the progress of each Collaboration Study, (B) the proposed plan for medical monitoring and site audits and (C) the results of such medical monitoring and site audits;

(vi)reviewing and approving with respect to each Collaboration Study (A) the applicable Protocol and the Statistical Analysis Plan, and any proposed substantive amendment thereto and (B) the CRO Agreement(s) and proposed material amendments thereto;

(vii)reviewing and approving any immunogenicity analysis for each Combined Therapy Collaboration Study, including protocol and Person to do the analysis;

(viii)reviewing and approving any Bioanalysis Plan not set forth in the Protocol, and any material amendments thereto;

(ix)reviewing and providing timely comments to proposed communication strategies and communications with any Regulatory Authority regarding the conduct of the Combined Therapy Collaboration Studies and, if applicable, approving such proposed communications and communication strategies;

(x)approving any IND submitted for a Combined Therapy Collaboration Study, as well as reviewing material submissions to any such IND in accordance with Article 10 (Global Regulatory);

(xi)reviewing any Collaboration Study Regulatory Documentation, or portions thereof, that relate to the Combined Therapy, in accordance with Article 10 (Global Regulatory);

(xii)reviewing any Regulatory Documentation from any Combined Therapy Independent Study, or portions thereof, that relate to the use of the Nektar Compound in the Combined Therapy, in accordance with Article 10 (Global Regulatory);

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(xiii)subject to Section 3.4(c), agreeing on the final list of proposed clinical trial sites pursuant to Section 3.4(c), and agreeing on communications to clinical trial sites or IRBs relating to patient safety or early termination/cessation of a Collaboration Study;

(xiv)appointing working teams, to be made up of representatives from each Party, that will hold telephone discussions at a mutually agreed-upon frequency to review clinical development, Protocols, patient safety and regulatory issues that arise in the course of a study under the Joint Development Plan, and delegating certain decision-making authority to such working teams;

(xv)determining the quantities of Nektar Assets, BMS Assets, Third Party Asset and any co-medications, necessary for the Collaboration Studies within a sufficient minimum lead time and coordinating the supply of such quantities by the respective Party in accordance with Article 5 and the Supply Agreements;

(xvi)reviewing and approving, in advance, any additional analyses of, or that include, the Collaboration Study Data proposed by either Party that are not included in the Statistical Analysis Plan; provided that, for clarity, such review and approval shall not apply to analyses by a Party of the monotherapy data for its own Single Agent Compound (other than the Nektar Compound, in the case of Nektar);

(xvii)reviewing and approving use of any Samples in accordance with Section 11.8 that are not described in the Protocol and ICF, so long as the JDC remains in force and effect;

(xviii)for any CROs or Third Party contractors engaged after the Effective Date, reviewing and approving (A) the selection of any such CRO and Third Party contractor (other than individuals in a Party’s workforce who are engaged on an independent contractor basis) that has a material role in each Collaboration Study pursuant to Section 3.4(c) and (B) the terms of any such CRO contract or pharmacovigilance contract (“CRO Agreement”);

(xix)reviewing and approving the template ICF form, template case report form and template clinical site study agreement to be used in a given Collaboration Study;

(xx)reviewing and approving the countries in which each Collaboration Study will be conducted, as set forth in Section 3.4(a);

(xxi)approving the final clinical trial report (and/or final statistical analysis in accordance with the Statistical Analysis Plan) from each Collaboration Study;

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(xxii)for each Collaboration Study, delegating to the Lead Party certain decision-making authority in relation to certain JDC responsibilities, in each case that do not constitute Material Amendments or any matters for which a Party has final decision-making authority under Section 3.8;

(xxiii)subject to any Third Party limitations in respect of Confidential Information, reviewing and discussing progress reports relating to the Independent Studies and activities performed by either Party pursuant to Section 3.9; and

(xxiv)discussing any other topics or issues relating to the Collaboration Studies that either Party requests that cannot be resolved at the working team level.

3.4Operational Authority Generally.  

(a)The Lead Party shall, subject to the oversight and determinations of the JDC as provided in Sections 3.3(a) and 3.3(b), the terms of the applicable Protocol, the decisions and guidance of applicable committee(s) and/or working teams, and applicable terms and conditions of this Agreement:  (i) manage and be primarily responsible for the conduct of the applicable Collaboration Study; (ii) be the sponsor and regulatory lead with respect to such Collaboration Study; and (iii) as between the Parties, be the lead with respect to (A) the selection and management of clinical study sites (including budget negotiations with vendors, timelines and contingency planning), subject to Sections 4.2(a)(v), 4.2(b)(x) and 4.2(c)(x) with respect to site selection and subject to the non-Lead Party’s consent as to the country(ies) where such Collaboration Study will be conducted, (B) conducting clinical study start-up activities, communicating with and obtaining approval from institutional review boards and/or ethics committees, as applicable, and drafting for both Parties’ approval the template informed consent form (“ICF”) for such Collaboration Study, (C) subject recruitment and retention activities, (D) ongoing site monitoring and quality assurance audits, (E) management of safety reporting by contract research organizations and clinical study sites, (F) ongoing medical monitoring, (G) management, monitoring and audits of CROs in connection with each CRO involved in the conduct of such Collaboration Study, and (H) inquiries from clinical study subjects (subsections (A)‑(H), collectively, the “Operational Matters”).  The Lead Party shall use Commercially Reasonable Efforts to perform such Operational Matters.  The JDC shall set up a mechanism for the non-Lead Party or a working team of the JDC to be informed and updated on a timely periodic basis regarding Operational Matters, so that if such non-Lead Party has any concerns or disagreements regarding same, the matter can be escalated to the JDC for review.

(b)The Lead Party shall provide the non-Lead Party with access to the safety information and Study Data of the applicable Collaboration Study in accordance with Sections 4.2(b)(vi), 4.2(b)(viii), 4.2(c)(vi) and 4.2(c)(viii).

(c)BMS acknowledges that Nektar, prior to the Execution Date, has (i) selected and entered into agreements with certain CROs, investigators and Third Party contractors (the list of which is attached as Schedule 3.4(c), (ii) identified a number of clinical trial

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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sites, and (iii) completed study initiation visits, and BMS approves of such sites, investigators, CROs and Third Party contractors.  BMS acknowledges that the CRO Agreements and/or any other documents related to such CROs, investigators, Third Party contractors and clinical trial sites have been made available to BMS prior to the Execution Date, and BMS hereby approves the continuation of such agreements on their terms (including the budgets and pricing included therein).  For any additional CROs, investigators, Third Party contractors or clinical trial sites proposed after the Effective Date, the Lead Party of a Collaboration Study, after discussion with the non-Lead Party, will create and provide the JDC with a proposed list of potential clinical trial site(s), CROs, investigators (including IMS grant plan analysis and/or a model investigator grant budget) and Third Party contractors that may be used to conduct such Collaboration Study, with the final list to be subject to JDC (or Co-Chairs) approval within [***] (such JDC-approved list being the “Site/CRO List”).  Except as otherwise noted in this Section 3.4(c), the proposed Site/CRO List will be provided to the JDC prior to the Lead Party initiating site selection negotiations or visits (for sites/investigators) or CRO negotiations (for CROs) for such Collaboration Study.  The Lead Party shall have the authority to select the final Clinical Trial sites, CROs, investigators and Third Party contractors from the Site/CRO List.  In the event that additional sites, CROs, investigators or Third Party contractors need to be added after the initial list is approved, a new list will be created by the Lead Party that includes the proposed new sites, CROs, investigators or Third Party contractors and such list will be provided to the JDC for approval by the JDC (or Co-Chairs) within ten (10) Business Days per this Section 3.4(c).

3.5Alliance Managers.  Each of the Parties will appoint one representative to act as its alliance manager under this Agreement as soon as practicable after the Effective Date (each, an “Alliance Manager”).  The role of the Alliance Manager is to act as a primary point of contact between the Parties to assure a successful relationship between the Parties.  The Alliance Managers will attend all meetings of the JDC and support the JDC in the discharge of its responsibilities.  An Alliance Manager may bring any matter concerning a Party’s performance under this Agreement to the attention of the JDC if the Alliance Manager reasonably believes that such attention is warranted.  Each Party may change its designated Alliance Manager from time to time upon written notice to the other Party.  Any Alliance Manager may designate a substitute to temporarily perform the functions of such Alliance Manager upon written notice to the other Party’s Alliance Manager.  Each Alliance Manager will be charged with creating and maintaining a collaborative work environment within the JEC, JDC, JCC, JFC and JMC.  Each Alliance Manager also will:

(a)be the point of first referral in all matters of dispute resolution in accordance with Section 15.1;

(b)provide a point of communication both internally within its respective Party’s organization(s) and between the Parties regarding the Joint Development Plan and the activities undertaken in connection with such plan as well as Commercialization and Manufacturing matters;

(c)assist in coordinating any collaborative efforts under this Agreement, if any, and any external communications; and

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(d)take responsibility for ensuring that JEC, JDC, JCC, JFC and JMC activities, such as the conduct of required JDC meetings, occur as set forth in this Agreement and that relevant action items, if any, resulting from such meetings are appropriately carried out or otherwise addressed.

3.6Joint Development Committee Decision-Making.  

(a)[***].  In the absence of a formal meeting, the JDC Co-Chairs shall have decision-making authority for the JDC, so long as any decisions are documented as provided below.

(b)The JDC shall have the right to make only those determinations expressly enumerated as decisions of the JDC in this Agreement; provided that such determinations are documented in the written minutes signed (or acknowledged as final via email) by the JDC Co-Chairs.  

(c)Notwithstanding anything to the contrary in this Agreement, the JDC will have no power (i) to amend this Agreement or (ii) to modify either Party’s obligations with regard to a study in the Joint Development Plan without such Party’s prior written consent; in each case, except by a writing (and that is not the minutes of a meeting) signed by both Parties.

3.7Dispute Resolution.  The representatives of the JDC shall attempt in good faith to reach consensus on all matters properly brought before the JDC.  Except as otherwise provided in this Agreement, if, after a good faith, reasonable and open discussion among the members of the JDC, the JDC is unable to agree on a matter that has been properly before it for a period of [***] and that calls for a decision, either Party may refer the dispute (a “JDC Dispute”) to the JEC for resolution.  If the JEC is unable to reach a resolution within [***] of the referral of the JDC Dispute to the JEC, either Party may refer such JDC Dispute to the Executive Officers for resolution.  If the Executive Officers are unable to reach a resolution within [***] of such referral then:

(a)if such JDC Dispute regards whether or not to commence a Clinical Trial as a new Collaboration Study (i.e., include a Clinical Trial (other than an Initial Trial) into the scope of the Joint Development Plan), then such Clinical Trial [***];

(b)if such JDC Dispute regards the initial Protocol and its contents (further to Section 3.2(d)) or the initial budget for any Collaboration Study, in each case before the commencement of such applicable Collaboration Study, then [***];

(c)if such JDC Dispute occurs subsequent to the commencement of a Collaboration Study, and relates to either (1) a material amendment requiring mutual agreement proposed by either Party to an agreed-upon Protocol or protocol synopsis, CRO Agreement, Bioanalysis Plan or Statistical Analysis Plan relating to such Collaboration Study or (2) any other matter relating to the strategy, conduct, rationale, or safety of such Collaboration Study, there shall be no decision on the matter and the then-existing terms of the applicable Protocol, protocol

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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synopsis, CRO Agreement, Bioanalysis Plan or Statistical Analysis Plan relating to such Collaboration Study shall govern.  Notwithstanding the foregoing, neither Party shall be required to continue its involvement in a Collaboration Study if a Party reasonably deems there to be a Material Safety Issue for such Collaboration Study.  Each Party’s safety committee shall, to the extent practicable, meet and discuss in good faith the Material Safety Issue and if unresolved within [***], the applicable Collaboration Study shall be discontinued.  The Parties shall use reasonable efforts to wind down activities related solely to such discontinued Collaboration Study in accordance with Sections 16.4 and 16.6; and

(d)if such JDC Dispute is not otherwise addressed by Section 3.7(a), Section 3.7(b), Section 3.7(c), Section 3.8 (Final Decision-Making Authority of the Parties) or Section 5.5 (Manufacturing Option), the dispute shall be resolved through arbitration as provided for in Section 15.3.

3.8Final Decision-Making Authority of the Parties.  In the event a JDC Dispute is unresolved pursuant to Section 3.7 as set forth above, each Party shall have final decision-making authority as follows:  

[***].

3.9Formulation Development.

(a)Fixed Dose Combinations.  Neither Party shall have the right to (i) conduct any registrational Clinical Trial with any Fixed Dose Combination Product, (ii) make a Filing with respect to a Fixed Dose Combination Product or (iii) Commercialize any Fixed Dose Combination Product, whether alone or in combination with other Persons.  Each Party has the right to conduct preclinical and Phase I Studies (but not if such study could also be considered a registrational study) of any Fixed Dose Combination Product at its own cost.  If the Parties agree (each at their sole discretion) to jointly Develop or Commercialize any Fixed Dose Combination Product, such Development or Commercialization will be conducted in accordance with a separate agreement, or an amendment to this Agreement, negotiated between the Parties.  For clarity, no Party shall be obligated to collaborate with the other Party or to agree on any terms with the other Party with respect to any Fixed Dose Combination Product.

(b)Alternative Formulations.  Each Party has the right to conduct preclinical and non-registrational studies and Clinical Trials of any alternative formulation or method of administration of the Nektar Compound or Product (including subcutaneous formulations) at its own cost.  If the Parties agree (each at their sole discretion) to jointly Develop or Commercialize any alternative formulations or methods of administration of the Nektar Compound or Product, such Development and Commercialization will be conducted in accordance with a separate agreement, or an amendment to this Agreement, negotiated between the Parties.  For clarity, no Party shall be obligated to collaborate with the other Party or to agree on any terms with the other Party with respect to any such alternative formulation or method of administration and neither

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Party has any right to seek Regulatory Approval of or Commercialize any alternative formulations or methods of administration of the Nektar Compound or Product under this Agreement.

(c)Each Party shall keep the JDC reasonably informed as to the progress of any activities conducted pursuant to this Section 3.9.

3.10Conduct.  Each Party shall use Commercially Reasonable Efforts to perform and fulfill its respective Development activities under this Agreement, including all remaining pre-clinical and clinical testing necessary or useful for Developing the Product and the preparation and submission of the appropriate Regulatory Documentation required for the Commercialization of the Products in the Field in the Territory, and each Party shall do so in accordance with Applicable Law.

 

Article 4

DEVELOPMENT RESPONSIBILITIES

4.1General Responsibilities of the Parties.  Subject to the terms of this Agreement, each Party shall use Commercially Reasonable Efforts to (a) perform the Development activities assigned to it pursuant to this Agreement; (b) conduct and complete each Collaboration Study for which it is the Lead Party and any Statistical Analysis Plans and Bioanalysis Plans relating thereto on a timely basis in accordance with the Protocol, Bioanalysis Plans, Statistical Analysis Plans and Third Party agreements relating thereto; and (c) timely provide Rights of Cross-Reference where required by this Agreement.

4.2Specific Responsibilities of the Parties.  Each Party shall use Commercially Reasonable Efforts to conduct and shall be responsible for activities assigned to it by the applicable Protocols and/or the JDC that such Party is not otherwise obligated to perform by this Agreement, provided that, except as set forth in this Agreement, in no event shall either Party be obligated to perform any such assigned activities without its prior written consent (which may be reflected in the minutes of meetings of the JDC or in a Protocol).  As of the Effective Date, each Party shall be responsible for the following activities:

(a)Responsibilities of the Lead Party.  Subject to Section 10.1 and JDC direction and oversight as provided in Section 3.3(b), each Lead Party shall be responsible for the following activities for each Collaboration Study:

(i)with the cooperation of the non-Lead Party, compiling, amending and filing all necessary Collaboration Study Regulatory Documentation with Regulatory Authority(ies) and maintaining and making all required submissions to Regulatory Authorities related thereto on a timely basis;

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(ii)with the cooperation of the non-Lead Party, and subject to the provisions of Section 12.5, listing any Collaboration Study required to be listed on a public database such as www.clinicaltrials.gov or other public registry in any country in which such Collaboration Study is being conducted in accordance with Applicable Law and in accordance with the Lead Party’s internal policies relating to clinical trial registration; provided that the non-Lead Party shall provide the Lead Party with written notice of any comments to a proposed listing within [***] of the date on which the Lead Party provides the applicable information to the non-Lead Party;

(iii)drafting and, subject to Sections 3.3(b) and 3.4(c), providing the non-Lead Party (through the JDC or otherwise) for its review and approval, each Protocol and investigator’s brochure for a Collaboration Study, and the related template ICF, template clinical site agreement, Bioanalysis Plan and Statistical Analysis Plan, and any material amendments to each of the foregoing (provided that the non-Lead Party shall provide the Lead Party with such approval or rejection within [***] of the date on which the Lead Party provides the applicable document to the non-Lead Party);

(iv)managing the operations of the Collaboration Studies in accordance with the applicable Protocol, including overseeing compliance by any CRO with the terms of its agreement with the Lead Party relating to the Collaboration Study;

(v)subject to Sections 3.3(b) and 3.4(c), providing to the non-Lead Party a list of all proposed clinical trial sites and principal investigator(s) for each Collaboration Study;

(vi)subject to Sections 3.3(b) and 3.4(c), ensuring that all clinical trial service agreements and clinical trial site agreements (A) contain intellectual property provisions that retain each of the Parties’ respective intellectual property rights in the BMS Assets, Nektar Assets and the Combined Therapy, and (B) allow for the non-Lead Party, as well as the Lead Party, to the extent permitted by Applicable Law and any Third Party confidentiality restrictions or obligations, to audit Collaboration Study sites for quality assurance and to inspect and copy data, documentation and work products relating to the activities performed by the site, including the medical records of any patient participating in any clinical study; provided that should the non-Lead Party seek to audit a study site (1) the non-Lead Party shall solely bear the cost and expense for such audit, (2) the Lead Party shall accompany the non-Lead Party to such audit, at a date and time mutually agreed upon by the Parties and the applicable study site, and (3) the non-Lead Party shall provide the Lead Party with a copy of any reports resulting from such audit.  This right to inspect and copy data, documentation, and work products of a study site may be exercised at any time during the Term, or such longer period as shall be required by Applicable Law;

(vii)providing the non-Lead Party with copies of each final site template ICF (if requested by the non-Lead Party);

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(viii)providing the non-Lead Party with minutes from any and all external drug safety monitoring boards for the Collaboration Studies, if applicable, within [***] after receipt by the Lead Party;

(ix)providing the non-Lead Party with updates on the status of the Collaboration Studies at each teleconference for the clinical execution working team, or upon the non-Lead Party’s reasonable request, including information regarding the number and status of study sites, the number of screened subjects (actual to target), the number of randomized subjects (actual to target), the number of dosed, ongoing, discontinued and completed subjects, and any safety updates as contemplated by the applicable Protocol, Section 3.2(e)(v), and/or routinely performed by a Party in its normal course of trial management and reporting;

(x)analyzing the Study Data in a timely fashion and providing the non-Lead Party with access to the Study Data from the applicable Collaboration Study as follows (and within the timeframes below or such other timeframes as agreed by the JDC):

(A)pursuant to an appropriate timetable determined by the JDC:  (1) sharing with the non-Lead Party for review and comment drafts of interim, ongoing and/or final clinical trial reports (and/or statistical analyses in accordance with the Statistical Analysis Plan) from each Collaboration Study and (2) providing the raw Study Data in electronic or other mutually agreed format;

(B)within [***] after Database Lock, access to safety information that will be used for an interim review by an external consultant (or drug safety monitoring board, if required) to be agreed upon by the Parties and in accordance with the Pharmacovigilance Agreement;

(C)within [***] after Database Lock, access to case report forms or patient profiles for all patients in each Collaboration Study; and

(D)within [***] of the creation of a quality checked and closed database for the Collaboration Study, copies of the Form 1572s, financial disclosures and other relevant documents required to meet regulatory requirements related to the Collaboration Studies (including any data or documents that may be required to provide Aggregate Safety Information to a Regulatory Authority with respect to the Nektar Compound or BMS Compound);

(E)within [***] of the creation of an electronic quality checked and closed database for the Collaboration Study, an electronic copy of the such database (it being understood that the form and format of such database must

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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be reasonably acceptable to both Parties and shall be determined by the JDC); and

(F)providing the non-Lead Party with any programs or SAS codes to be used for the Statistical Analysis Plan for the Collaboration Study.

(xi)obtaining supplies of any co-medications, to the extent any such co-medications are required for use in any Collaboration Study, and providing to the non-Lead Party any information related to each Collaboration Study that is provided to the manufacturer of any co-medication pursuant to Section 12.3 herein within [***] after the provision of the information to the manufacturer;

(xii)performing, either directly or through Third Parties, collection of Samples; and

(xiii)such other responsibilities as may be agreed to by the Parties or determined by the JDC.

(b)Responsibilities of Nektar.  Subject to Section 10.1 and JDC direction and oversight as provided in Section 3.3(b), Nektar shall be responsible for the following activities:

(i)(A) Manufacturing the Nektar Assets for use in the Collaboration Studies and Independent Studies, and, if applicable, providing for the release by a Qualified Person (as such term will be defined in the applicable Quality Agreement) or providing the necessary documentation in support of quality release, of the Nektar Assets if such release is required for the Collaboration Studies and Independent Studies, (B) if applicable, packaging and Labelling Bulk Form BMS Assets provided by BMS to Nektar for use in the Collaboration Studies and Independent Studies, and (C) for each Collaboration Study for which Nektar is the Lead Party, providing the JDC (or a working team designated by the JDC) [***] with a clinical drug supply forecast for the BMS Assets, the Nektar Assets and any other Third Party Asset (such forecasts to include strategies for drug supply overages, drug supply quantities and required delivery dates);

(ii)for each Collaboration Study for which Nektar is the Lead Party, providing BMS with reasonable advance notice of scheduled meetings or other material non-written communications with a Regulatory Authority and the opportunity to participate in each such meeting or other non-written communication, to the extent that it relates to the Monotherapy, the Combined Therapy or a BMS Asset, and providing BMS with the opportunity to review, provide comments to Nektar within [***] on, and, if inconsistent with the applicable Protocol(s) or JDC guidance, approve all submissions and written correspondence with a Regulatory Authority that relates to the Monotherapy, Combined Therapy or a BMS Asset; provided, however, in no event shall Nektar or any Affiliate of Nektar initiate communications with or respond to any communications

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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initiated by any Regulatory Authority solely with respect to a BMS Asset without the prior written consent of BMS;

(iii)for each Collaboration Study for which Nektar is the Lead Party, providing to BMS a written summary of meetings or a summary of other non-written communications with a Regulatory Authority within [***] of such meeting or communication, and copies of any official correspondence to or from a Regulatory Authority within [***] of receipt or provision, in each case to the extent that it relates to the Monotherapy, Combined Therapy or a BMS Asset, and copies of all Collaboration Study Regulatory Documentation within [***] of submission to Regulatory Authorities;

(iv)for each Collaboration Study for which Nektar is the Lead Party, coordinating with BMS and providing to the JDC (or a subcommittee designated by the JDC for such purpose) drafts of (A) submissions to the Nektar IND (if applicable) and/or the Combined Therapy Collaboration IND (if applicable); and (B) Collaboration Study Regulatory Documentation, or portions thereof, that relate to the Nektar Compounds, the Combined Therapy or a BMS Assets, for JDC review and approval, and providing BMS with the opportunity to review, comment on and approve all other written correspondence with a Regulatory Authority relating to the Collaboration Studies; provided that BMS shall provide Nektar with written notice of any such comments (and, where applicable, approvals or rejections) within [***] of the date on which Nektar provides the applicable document to BMS;

(v)to the extent necessary for the conduct of any Collaboration Study or Independent Study or BMS’s filing of a BLA or supplemental BLA as set forth in Section 10.1(b), providing BMS a Right of Cross-Reference to the relevant Regulatory Documentation, provided that, such Right of Cross-Reference shall terminate upon the expiration or termination of this Agreement for purposes of conducting any new Clinical Trials, except that in the case of termination for a Material Safety Issue pursuant to Section 16.4, such Right of Cross-Reference shall remain in effect solely (A) to the extent necessary to permit Nektar to comply with any outstanding obligations required by a Regulatory Authority and/or Applicable Law or (B) as necessary to permit BMS to continue to dose subjects enrolled in each Collaboration Study or Independent Study through completion of the applicable Protocol if required by the applicable Regulatory Authority(ies) and/or Applicable Laws;

(vi)for each Collaboration Study, providing BMS with access to all safety information (including any updates to the investigator’s brochure for the Nektar Compound) in the Global Safety Database through the provision of case safety reports (“CSRs”) and listings related to the Monotherapy, Combined Therapy or a BMS Asset during the Collaboration Studies in accordance with the Pharmacovigilance Agreement;

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(vii)providing BMS with any information regarding the pharmacokinetics, efficacy and safety of a Nektar Asset alone, a BMS Asset alone or a Nektar Asset in combination with a BMS Asset;

(viii)providing BMS with access to an investigator’s brochure for the Nektar Asset as determined by Nektar (and any updates thereto), as well as all relevant safety information for the Nektar Asset;

(ix)providing and making available as necessary information and/or Persons with knowledge concerning the Nektar Asset to support the Collaboration Studies, including any interactions with a Regulatory Authority;

(x)reviewing and, if applicable, suggesting alternatives to the Lead Party’s proposed list of Clinical Trial sites and principal investigator(s) for each Collaboration Study;

(xi)promptly reviewing and providing comments on and communicating its approval (or rejection) of each Protocol, the BMS and Nektar investigator’s brochures for each Collaboration Study (as it relates to the Nektar Compound and the Combined Therapy), any template ICF, Bioanalysis Plan and Statistical Analysis Plan, and any amendments to each of the foregoing (provided that Nektar shall provide BMS with written notice of any such comments (and, where applicable, approvals or rejections) within [***] of the date on which BMS provides the applicable document to Nektar);

(xii)jointly reviewing, providing comments to BMS within [***] on, and (if inconsistent with the applicable Protocol(s)) approving all Collaboration Study Regulatory Documentation and providing BMS with copies of Nektar Regulatory Documentation, as both Parties agree is necessary or reasonably expected to be necessary, and is requested by BMS, (1) to obtain and maintain an IND for the Collaboration Study and prepare and file any Collaboration Study Regulatory Documentation in accordance with this Agreement, or (2) to comply with Applicable Law, with regard to the BMS Asset and a Combined Therapy Collaboration Study, which may include information regarding the pharmacokinetics, efficacy and safety of a Nektar Asset alone or in combination with the BMS Asset (provided that Nektar shall provide BMS with written notice of any such comments (and, where applicable, approvals or rejections) within [***] of the date on which BMS provides the applicable document to Nektar);

(xiii)such other responsibilities as may be agreed to by the Parties or determined by the JDC; and

(xiv)subject to the Pharmacovigilance Agreement, owning and being responsible for (or appointing a Third Party reasonably acceptable to both Parties to be responsible for) the maintenance of the Global Safety Database and safety reporting for the

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Monotherapy and Combined Therapy, collecting, evaluating and reporting Serious Adverse Events, other safety data and any further pharmacovigilance information from the Collaboration Studies, and providing BMS with the opportunity to participate in and comment on such pharmacovigilance activities.

(c)Responsibilities of BMS.  Subject to Section 10.1 and JDC direction and oversight as provided in Section 3.3(b), BMS shall be responsible for the following activities:

(i)(A) Manufacturing the BMS Assets for use in the Collaboration Studies and Independent Studies, and, if applicable, providing for the release by a Qualified Person (as such term will be defined in the applicable Quality Agreement) or providing the necessary documentation in support of quality release, of the BMS Assets if such release is required for the Collaboration Studies and Independent Studies, (B) if applicable, packaging and Labelling Bulk Form Nektar Compound provided by Nektar to BMS for use in the Collaboration Studies and Independent Studies, and (C) for each Collaboration Study for which BMS is the Lead Party, providing the JDC (or a working team designated by the JDC) [***] with a clinical drug supply forecast for Nektar Assets, the BMS Assets and any Third Party Asset (such forecasts to include strategies for drug supply overages, drug supply quantities and required delivery dates);

(ii)for each Collaboration Study for which BMS is the Lead Party, providing Nektar with reasonable advance notice of scheduled meetings or other material non-written communications with a Regulatory Authority and the opportunity to participate in each such meeting or other non-written communication, to the extent that it relates to the Monotherapy, Combined Therapy or a Nektar Asset and providing Nektar with the opportunity to review, provide comments to BMS within [***] on, and, if inconsistent with the applicable Protocol(s) or JDC guidance, approve all submissions and written correspondence with a Regulatory Authority that relates to the Monotherapy, Combined Therapy or Nektar Asset; provided, however, in no event shall BMS or any Affiliate of BMS initiate communications with or respond to any communications initiated by any Regulatory Authority solely with respect to a Nektar Asset without the prior written consent of the Nektar and provided further that Nektar, if requested, shall step out of any portions of such meetings or other non-written communications with a Regulatory Authority that relate solely to the use of a BMS Asset as a monotherapy;

(iii)for each Collaboration Study for which BMS is the Lead Party, providing Nektar a written summary of meetings or a summary of other non-written communications with a Regulatory Authority within [***] of such meeting or communication, and copies of any official correspondence to or from a Regulatory Authority within [***] of receipt or provision, in each case to the extent that it relates to the Monotherapy, Combined Therapy or a Nektar Asset, and copies of all Collaboration Study Regulatory Documentation within [***] of submission to Regulatory Authorities;

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(iv)for each Collaboration Study for which BMS is the Lead Party, coordinating with Nektar and providing to the JDC (or a subcommittee designated by the JDC for such purpose) drafts of (A) a Combined Therapy Collaboration IND and (B) Collaboration Study Regulatory Documentation, or portions thereof, that relate to the Combined Therapy or a Nektar Asset, for JDC review and approval, and providing Nektar with the opportunity to review, comment on and approve all other written correspondence with a Regulatory Authority relating to the Collaboration Studies; provided that Nektar shall provide BMS with written notice of any such comments (and, where applicable, approvals or rejections) within [***] of the date on which BMS provides the applicable document to Nektar;

(v)to the extent necessary for the conduct of any Collaboration Study, Independent Study or Nektar’s filing of a BLA or supplemental BLA as set forth in Section 10.1(b), providing Nektar a Right of Cross-Reference to the relevant Regulatory Documentation, provided that, such Right of Cross-Reference shall terminate upon the expiration or termination of this Agreement for purposes of conducting any new Clinical Trials, except that in the case of termination for a Material Safety Issue pursuant to Section 16.4, such Right of Cross-Reference shall remain in effect solely (1) to the extent necessary to permit Nektar to comply with any outstanding obligations required by a Regulatory Authority and/or Applicable Law or (2) as necessary to permit Nektar to continue to dose subjects enrolled in each Collaboration Study or Independent Study through completion of the applicable Protocol if required by the applicable Regulatory Authority(ies) and/or Applicable Law;

(vi)for each Collaboration Study for which BMS is the Lead Party, providing Nektar with access to all safety information (including any updates to the investigator’s brochure for the BMS Asset) for the Global Safety Database through CSRs and listings related to the Monotherapy, Combined Therapy or a Nektar Asset during the Collaboration Studies in accordance with the Pharmacovigilance Agreement;

(vii)providing Nektar with any information regarding the pharmacokinetics, efficacy and safety of a BMS Asset alone, a Nektar Asset alone, or a Nektar Asset in combination with a BMS Asset;

(viii)providing Nektar with access to an investigator’s brochure for a BMS Asset as determined by BMS (and any updates thereto), as well as all relevant safety information for the BMS Asset;

(ix)providing and making available as necessary information and/or Persons with knowledge concerning a BMS Asset to support the Combined Therapy Collaboration Studies, including any interactions with a Regulatory Authority;

(x)reviewing and, if applicable, suggesting alternatives to the Lead Party’s Clinical Trial sites and principal investigator(s) for each Collaboration Study;

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(xi)promptly reviewing and providing comments on and communicating its approval (or rejection) of each Protocol, the BMS and Nektar investigator’s brochures for each Collaboration Study (as it relates to the BMS Asset and the Combined Therapy), any template ICF, Bioanalysis Plan and Statistical Analysis Plan, and any amendments to each of the foregoing (provided that BMS shall provide Nektar with written notice of any such comments (and, where applicable, approvals or rejections) within [***] of the date on which Nektar provides the applicable document to BMS);

(xii)jointly reviewing, providing comments to Nektar within [***] on, and (if inconsistent with the applicable Protocol(s)) approving all Collaboration Study Regulatory Documentation and providing Nektar with copies of BMS Regulatory Documentation, as both Parties agree is necessary or reasonably expected to be necessary, and is requested by Nektar, (A) to obtain and maintain an IND for a Combined Therapy Collaboration Study and prepare and file any Collaboration Study Regulatory Documentation in accordance with this Agreement, or (B) to comply with Applicable Law with regard to a Nektar Asset and a Combined Therapy Collaboration Study, which may include information regarding the pharmacokinetics, efficacy and safety of a BMS Asset alone or in combination with a Nektar Asset (provided that BMS shall provide Nektar with written notice of any such comments (and, where applicable, approvals or rejections) within [***] of the date on which Nektar provides the applicable document to BMS); and

(xiii)such other responsibilities as may be agreed to by the Parties or determined by the JDC.

4.3Documents and Collaboration Study Contracts.  

(a)The Lead Party bears primary responsibility for conduct of each of its Collaboration Studies and the analysis of the Study Data under the applicable Statistical Analysis Plan.  In consultation with the other Party, the Lead Party shall draft the Protocols and Statistical Analysis Plans, and any amendments to each of the foregoing, and shall provide such documents to the other Party for review, comment, and if applicable, approval pursuant to Section 4.2(a)(vi) and Sections 3.3(b) and 3.4(c).  The non-Lead Party shall have [***] from the date on which the Lead Party provides the applicable document to the non-Lead Party to provide any comments, and if applicable, approvals or rejections to the Lead Party concerning the applicable draft Protocol or Statistical Analysis Plan, or any amendment to each of the foregoing.

(b)Subject to Sections 3.3(b) and 3.4(c), the Lead Party shall be responsible for negotiating and entering into contracts for services relating to its applicable Collaboration Study, including selecting vendors, approving contract deliverables and managing contract performance, including site contracts, obtaining IRB approval for site informed consent forms, obtaining signed informed consents, monitoring plans, etc.  The Lead Party will be responsible for ensuring that any such contracts allow the Lead Party to provide the other Party with access to and use of Study Data, Samples, and other information and documents as required pursuant to this Agreement (and in no event not less than the same access or use as is granted to the Lead Party).

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Article 5

MANUFACTURE AND SUPPLY

5.1Joint Manufacturing Committee.  Promptly after the Effective Date, the Parties shall form a Joint Manufacturing Committee (the “JMC”).  The JMC shall consist of [***].  Each Party shall be responsible for determining the qualifications and substitutions of its JMC members.  It is anticipated that each Party’s representatives may include experts in manufacturing and supply of human therapeutic products.  The JMC shall be co-chaired with one chairperson designated by each Party (each, a “JMC Co-Chair”).  The JMC shall meet at least [***], or at such other frequency as the JMC agrees (and it may appoint working teams to meet more frequently), provided that either Party through its JMC Co-Chair may request a meeting of the JMC at any time upon [***] notice to the other Party, with the understanding that the other Party will use reasonable efforts to comply with such request but such other Party will not be in breach of this Agreement in the event that it is unable to comply with such request but is using reasonable efforts to conduct a JMC meeting as promptly as practicable.  Upon request by either Party, such meetings will be held by audio or video teleconference; provided that face-to-face meetings shall occur at least [***], alternating between Princeton, NJ and San Francisco, CA unless otherwise agreed upon by the Parties.  There must be a minimum of [***] from each Party at any meeting of the JMC to constitute a quorum for decision-making.  No fewer than five [***] prior to each meeting, and in any event as soon as reasonably practicable, each Party shall use good faith efforts to disclose to the other Party any proposed agenda items together with appropriate supporting information.  The Alliance Managers shall alternate responsibility for preparing and circulating definitive minutes of each meeting of the JMC.  Such minutes shall provide a description, in reasonable detail, of the discussions at the meeting, a list of material actions and decisions made by the JMC, a list of action items made by the JMC and a list of material issues not resolved by the JMC.  The Alliance Manager who drafts the minutes shall provide the other Alliance Manager and each Party’s JMC Co-Chair with the initial draft meeting minutes, who shall return the draft with any proposed changes, and this process shall be repeated until a final version of the meeting minutes is agreed upon and signed (or acknowledged as final via email) by the two JMC Co-Chairs.  The Parties shall reasonably cooperate to complete and agree upon a final version of meeting minutes within [***] from the date of the relevant meeting.  The final version of the meeting minutes shall be signed (or acknowledged as final via email) by the two JMC Co-Chairs, and each Party shall be provided with a copy of the final meeting minutes for its safekeeping.  A reasonable number of additional representatives of a Party may attend meetings of the JMC in advisory capacity with the prior written consent of the other Party; provided that any JMC meetings that includes representatives of either Party who are not JMC members may, at the request of any JMC member, include a closed session consisting of only JMC members and Alliance Managers.  All representatives to the JMC or attending JMC meetings shall be subject to confidentiality and nonuse restrictions at least as restrictive as those set forth herein.

5.2Responsibilities and Authority of the Joint Manufacturing Committee.  

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(a)Each Party shall use Commercially Reasonable Efforts to keep the JMC informed about Manufacturing activities (and Development activities as they relate to Manufacturing) performed by that Party hereunder.  The JMC will be responsible for the overall oversight of the CMC development and Manufacturing of Nektar Compounds and Products.  The JMC (or in the absence of a formal JMC meeting the JMC Co-Chairs) shall be responsible for the following:

(i)CMC development activities for the Nektar Compound and Product (including PEGylation), including process development, formulation development, specification setting, process characterization, scale-up and validation/PPQ;

(ii)worldwide Manufacturing and sourcing strategies in support of the Development and Commercialization of the Products in the Field in the Territory;

(iii)use of Third Parties to Manufacture and supply any Nektar Compounds or Products, including the Third Parties (and their Affiliates) set forth in Schedule 5.2(a)(iii) currently engaged in or retained to assist with Manufacturing;

(iv)logistical strategies, capacity planning and inventory levels for each Nektar Compounds or Products for consistency with the then-current Joint Development Plan and Commercialization Plan and Budget for the Product in the Field in the Territory;

(v)results of regulatory inspections related to any Nektar Compounds or Products and reviewing steps to be taken by the Parties to address any deficiencies noted;

(vi)capacity planning and supply continuity plans (including, if agreed by the JMC, through stock build-up or second source of supply) for each Nektar Compounds or Product for consistency with the then-current Joint Development Plan and Commercialization Plan and Budget for the Product in the Field in the Territory;

(vii)reviewing the demand forecast for the Nektar Compound for use in Collaboration Studies, Independent Studies, and Commercialization activities [***];

(viii)regulatory compliance related to the Manufacture of Nektar Compounds or Products;

(ix)material quality-related issues concerning the Nektar Compounds or Products;

(x)monitoring and managing the costs of Manufacture;

(xi)providing updates to the JEC, JDC or JCC, as applicable, upon request relating to Manufacturing issues;

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(xii)appointing working teams, to be made up of representatives from each Party, that will hold telephone discussions at a mutually agreed frequency to review matters assigned to such working teams; and

(xiii)such other matters as the Parties agree in writing shall be the responsibility of the JMC.

(b)The JMC will have no power (i) to amend this Agreement or (ii) to modify either Party’s obligations with regard to this Agreement.  The representatives of the JMC shall attempt in good faith to reach consensus on all matters properly brought before the JMC.  If, after a good faith, reasonable and open discussion among the members of the JMC, the JMC is unable to agree on a matter that has been properly before it for a period of [***] and that calls for a decision, either Party may refer the dispute (a “JMC Dispute”) to the JDC.  JEC for resolution.  If the JEC is unable to reach a resolution within [***] of the referral of the JMC Dispute to the JEC, either Party may refer such JMC Dispute to the Executive Officers for resolution.  If the Executive Officers are unable to reach a resolution within [***] of such referral and are not otherwise addressed by Section 3.7(a), Section 3.7(b), Section 3.7(c), Section 3.8 (Final Decision-Making Authority of the Parties) or Section 5.5 (Manufacturing Option), the dispute shall be resolved through arbitration as provided for in Section 15.3.

5.3Manufacture and Supply of Nektar Assets and Products.

(a)Nektar Compounds and Products.  Unless BMS exercises the Manufacturing Option set forth in Section 5.5(a), during the Term, Nektar, as Manufacturing Party, shall be solely responsible for the Manufacture or having Manufactured all Nektar Compounds and Products (including all such Manufacturing for use in pre-clinical trials, Collaboration Studies, Independent Studies, GLP toxicology studies and for commercial sale).  [***].  All Nektar Assets and Products supplied for a Collaboration Study or Independent Study shall have sufficient expiration dates to complete such Collaboration Study or Independent Study.  The Manufacturing Party or a Third Party conducting activities on behalf of the Manufacturing Party will, if applicable, package, Label and distribute the Nektar Compounds and Products (i) for use in the Collaboration Studies and Independent Studies and (ii) for the Commercialization of the Product in the Field in the Territory.  

(b)Nektar Assets (other than the Nektar Compounds and Product).  During the Term, Nektar shall be solely responsible for the Manufacture or having Manufactured all Nektar Assets (other than Nektar Compounds and Products) (including all such Manufacturing for use in pre-clinical trials, Collaboration Studies, Independent Studies, GLP toxicology studies and for commercial sale).  [***].  All such Nektar Assets supplied for a Collaboration Study or Independent Study shall have sufficient expiration dates to complete such Collaboration Study or Independent Study.  Nektar will, if applicable, package, Label and distribute such Nektar Assets for use in the Collaboration Studies and Independent Studies.

(c)Costs.  

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(i)The Clinical Manufacturing Costs of Nektar Compounds and Products for Collaboration Studies and other Joint Development Plan activities shall be split between the Parties so that Nektar shall be responsible for 65% of such Clinical Manufacturing Costs and BMS shall be responsible for 35% of such Clinical Manufacturing Costs.

(ii)The Clinical Manufacturing Costs of the Nektar Assets (other than Nektar Compounds and Product) for Joint Development Plan activities shall be borne solely by Nektar.

(iii)Subject to Section 7.3(b), the Clinical Manufacturing Costs of the Nektar Assets (other than Nektar Compounds and Product) for Independent Studies shall be borne solely by Nektar.

(iv)The Fully Burdened Costs to Manufacture any Nektar Compounds or Products for Commercialization of the Product in the Field in the Territory shall be split between the Parties in accordance with Sections 9.4 and 9.5.

(v)[***].  

(vi)[***].

(d)Standards.  The Nektar Compounds and Products shall be Manufactured in accordance with Applicable Law (including GMP) and, to the extent that Nektar is the Manufacturing Party, shall be of similar quality to Nektar Assets and Products used by Nektar for its other clinical trials of Nektar Assets and Products.  The Manufacturing Party shall deliver to the non-Manufacturing Party certificates of analysis, and any other documents specified in the applicable Quality Agreement, including such documentation as is necessary to allow the non-Manufacturing Party to compare the applicable Nektar Asset or Product certificate of analysis to the applicable Nektar Assets or Product specifications.

(e)Customs Valuation.  If applicable, Nektar will provide BMS with country-specific customs valuations for the Nektar Assets and Products, which BMS must use for deliveries to each country.  BMS must request these valuations at least [***] prior to each shipment through Nektar’s clinical supply organization.

(f)Use of Nektar Assets Supplied by Nektar to BMS.  BMS shall use the quantities of Nektar Assets and Products supplied to it under this Agreement solely as necessary for, and in accordance with, this Agreement and the Protocols, and for no other purpose, including as a reagent or tool to facilitate its internal research efforts, for any commercial purpose, or for other research unrelated to the Collaboration Studies, Independent Studies, with respect to Nektar Compounds for or Commercialization of the Products in the Field in the Territory.  Except as may be required under this Agreement, a Bioanalysis Plan, or a Protocol, BMS shall not perform, and

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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shall not allow any Third Parties to perform, any analytical testing of the quantities of Nektar Assets or Products supplied to it under this Agreement.

(g)Prior Manufacturing Agreements.  BMS acknowledges that Nektar, prior to the Execution Date, has (i) selected and entered into agreements with certain Third Party contract manufacturers, (ii) identified a number of Manufacturing facilities/sites and (iii) completed visits to such facilities/sites, and BMS approves of such sites, and Third Party contract manufacturers, each as set forth in Schedule 5.2(a)(iii).  BMS acknowledges that the information related to such Third Party contract manufacturers and Manufacturing facilities/sites have been made available to BMS prior to the Effective Date, and subject to a satisfactory quality audit to be performed by BMS after the Effective Date in accordance with BMS’s internal SOPs, BMS will approve the continuation of the related Manufacturing agreements on their terms (including the budgets and pricing included therein), and hereby ratifies, on behalf of its appointees to the JMC and JDC, the decisions taken by Nektar prior to the Effective Date that would otherwise be under the purview of the JMC or JDC pursuant to this Agreement, solely to the extent that such decisions have been disclosed to BMS prior to the Effective Date.  For any additional Third Party contract manufacturers or Manufacturing facilities/sites proposed after the Effective Date, the Manufacturing Party, after discussion with the non-Manufacturing Party, will create and provide the JMC with a proposed list of potential Manufacturing facilities/sites and Third Party contract manufacturers that may be used to Manufacture the Nektar Compounds and Product, with the final list to be subject to JMC (or JMC Co-Chairs) approval (such JMC-approved list being the “Facility List”).  Except as otherwise noted in this Section 5.3(g), the proposed Facility List will be provided to the JMC prior to the Manufacturing Party initiating facility/site selection negotiations or visits.  The Manufacturing Party shall have the authority to select the final Third Party contract manufacturers or Manufacturing facilities/sites from the Facility List.  In the event that additional facilities/sites or Third Party contract manufacturers need to be added after the initial list is approved, a new list will be created by the Manufacturing Party that includes the proposed new facilities/sites or Third Party contract manufacturers and such list will be provided to the JMC for approval by the JMC (or JMC Co-Chairs) per this Section 5.3(g).

(h)Audit.  Nektar shall permit BMS, its Affiliates, and their representatives and designees to inspect and audit Nektar’s facilities, production, operations, testing, storage, and books and records to confirm Nektar’s compliance with the terms and conditions of this Section 5.3, during regular business hours at BMS’s expense; provided, however, that such inspection or audit shall not unreasonably interfere with the operations of the applicable facility.  In connection with any such inspection or audit, Nektar shall have no obligation to provide BMS and/or a Third Party access to Nektar Confidential Information related to any compound or product other than the Nektar Assets used in Collaboration Studies.  Such audits may be conducted at any date during the Term upon reasonable notice (which shall be no less than [***]’ prior notice, unless a shorter period is mutually agreed to by the Parties), but no more than [***].  Nektar shall cooperate with BMS to facilitate any such audit.  [***].

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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5.4Manufacture and Supply of BMS Assets.  

(a)BMS Assets.  During the Term, BMS shall be solely responsible for the Manufacture or having Manufactured all BMS Assets (including all such Manufacturing for use in Clinical Trials, GLP toxicology studies and for commercial sale).  [***].  All BMS Assets supplied for a Collaboration Study or Independent Study shall have sufficient expiration dates to complete such Collaboration Study or Independent Study.  BMS will, if applicable, package, Label and distribute the BMS Assets for use in the Collaboration Studies and Independent Studies.

(b)Costs.  

(i)The Clinical Manufacturing Costs of the BMS Assets for Joint Development Plan activities, shall be borne solely by BMS.

(ii)The Clinical Manufacturing Costs of the BMS Assets for Independent Studies shall be borne solely by BMS.

(iii)[***].  

(c)Standards.  The BMS Assets shall be Manufactured in accordance with Applicable Law (including GMP) and shall be of similar quality to the BMS Assets used by BMS for its other Clinical Trials of the BMS Assets.  BMS shall deliver to Nektar certificates of analysis, and any other documents specified in the applicable Quality Agreement, including such documentation as is necessary to allow Nektar to compare the applicable BMS Assets certificate of analysis to the applicable BMS Assets specifications.  

(d)Customs Valuation.  If applicable, BMS will provide Nektar with country-specific customs valuations for the BMS Assets, which Nektar must use for deliveries to each country.  Nektar must request these valuations at least [***] prior to each shipment through BMS’s clinical supply organization.

(e)Use of BMS Asset Supplied by BMS to Nektar.  Nektar shall use the quantities of BMS Asset supplied to it under this Agreement solely as necessary for, and in accordance with, this Agreement and the Protocols, and for no other purpose, including as a reagent or tool to facilitate its internal research efforts, for any commercial purpose, or for other research unrelated to the Collaboration Studies or Independent Studies.  Except as may be required under this Agreement, a Bioanalysis Plan, or a Protocol, Nektar shall not perform, and shall not allow any Third Parties to perform, any analytical testing of the quantities of BMS Assets supplied to it under this Agreement.

5.5Manufacturing Option.  

(a)BMS shall have the option to obtain the right to Manufacture NKTR-214 (for itself or by an Affiliate or Third Party acting on BMS’s behalf), including [***] upon (i) a Change of Control of Nektar, or (ii) in the event that [***], (the “Manufacturing Option”).  Such

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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notice shall specify the desired commencement date of such Manufacturing by or on behalf of BMS (such specified date, the “Manufacturing Commencement Date”).  BMS shall reimburse Nektar for Nektar’s Fully Burdened Costs associated with the transfer of the Nektar Manufacturing Know-How in the event that BMS exercises its Manufacturing Option upon a Change of Control.  Each Party shall otherwise share the costs of such transfer so that BMS bears thirty-five percent (35%) and Nektar bears sixty-five percent (65%) of the Fully Burdened Costs associated with the transfer of the Nektar Manufacturing Know-How to BMS.

(b)Unless otherwise agreed by the Parties, commencing on the Manufacturing Commencement Date, BMS and Nektar shall be jointly responsible for Manufacturing NKTR-214 for use in activities under this Agreement.  For all Manufacturing of NKTR-214, BMS shall at all times (i) use the Nektar Manufacturing Process and adhere to all applicable specifications and quality control and assurance policies and procedures that Nektar provides to BMS and (ii) adhere to the applicable Quality Agreement, GMPs, and Applicable Law.

(c)If BMS exercises the Manufacturing Option, BMS shall use [***].  

(d)(i) Subject to Nektar’s contracts with its contract manufacturers for NKTR-214, Nektar shall facilitate the transfer of all Nektar Manufacturing Know-How that is necessary or reasonably useful to Manufacture NKTR-214 to BMS or to a contract manufacturer selected by BMS, which transfer shall be subject to the terms and conditions of Schedule 5.5(d)(i).  (ii) With respect to the PEG Reagent required for the Manufacture of the NKTR-214, BMS shall have the option to either (A) cause Nektar to enter into a mutually-agreeable supply agreement with BMS for supply by Nektar of such PEG Reagent at a fee equal to Nektar’s Fully Burdened Cost to Manufacture, or (B) cause Nektar to facilitate a transfer of all Nektar Manufacturing Know-How that is necessary or reasonably useful to Manufacture the PEG Reagent to BMS or a contract manufacturer selected by BMS, which transfer shall be subject to the terms and conditions of Schedule 5.5(d)(ii).

(e)Notwithstanding anything to the contrary herein, (i) BMS shall not commence Manufacture of NKTR-214 until the Parties have executed a Quality Agreement for such Manufacture and (ii) BMS may not sell NKTR-214 Manufactured by or for BMS until Nektar’s “Quality Management” group has audited and approved BMS’s Manufacturing processes and controls, as applicable, and validated the quality of the initial batch of the NKTR-214 Manufactured by BMS, such approval not to be unreasonably withheld or delayed.  

(f)BMS shall permit Nektar, its Affiliates, and their representatives and designees to inspect and audit BMS’s facilities, production, operations, testing, storage, and books and records to confirm BMS’s compliance with the terms and conditions of this Section 5.5, in relation to the Manufacture of the Nektar Compound and Product, during regular business hours at Nektar’s expense; provided, however, that such inspection or audit shall not unreasonably interfere with the operations of the applicable facility.  In connection with any such inspection or audit, BMS shall have no obligation to provide Nektar and/or a Third Party access to BMS Confidential Information related to any compound or product other than NKTR-214.  Such audits

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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may be conducted at any date during the Term upon reasonable notice (which shall be no less than [***] prior notice, unless a shorter period is mutually agreed to by the Parties), but no more than [***].  BMS shall cooperate with Nektar to facilitate any such audit.  [***].

(g)BMS shall, at its sole expense, obtain, maintain, update, and remain in compliance with all permits, licenses, Regulatory Approvals or other governmental approvals required by Applicable Law for BMS to carry out its Manufacturing activities of NKTR-214 hereunder.

(h)Upon notice and request by BMS and subject to Nektar’s prior approval, the Manufacturing Option may be extended to include [***].

5.6Quality Agreement.  The Parties shall enter into quality agreements (each, a “Quality Agreement”) (a) within [***] after the Effective Date, but in no event later than the date on which the first shipment of any Bulk Form Nektar Asset, Bulk Form BMS Asset or Product is supplied for use in the Collaboration Studies or Independent Study and (b) if BMS exercises the Manufacturing Option, prior to BMS’s Manufacture of NKTR-214 or any other Nektar Compound, as applicable.  Each Quality Agreement shall outline the additional roles and responsibilities relative to the quality of the applicable Nektar Assets, BMS Assets or Products in support of the Collaboration Studies, Independent Studies or the Commercialization of the Product in the Field in the Territory.  Each Quality Agreement shall include the responsibility for quality elements including, by way of example, inspections, sub-contractors and suppliers, change control and corresponding regulatory amendments, out-of-specification results, deviations, Product recalls, withdrawals, Product complaints and a list of key quality contacts and investigations, in each case required to conduct the Collaboration Studies or Independent Studies or to Commercialize the Product in the Field in the Territory.  In addition, each Quality Agreement shall detail the documentation required for each shipment of (x) Nektar Asset or Product supplied for use in the Collaboration Studies or Independent Studies, (y) BMS Asset supplied to Nektar or its designee for use in the Collaboration Studies or Independent Studies, or (z) Nektar Compounds or Product to Commercialize the Product in the Field in the Territory.  Each Quality Agreement shall also indicate for the Commercialization of the Product in the Field in the Territory whether any required transfer by a Party to the other Party of analytical methods will be necessary to support identity testing by the other Party of the compound or Product supplied to the other Party under this Agreement.

5.7Supply Agreements.  Within [***] after the Effective Date (but in no event later than the date on which the first shipment of any Nektar Asset, BMS Asset or Product, whether in Bulk Form or Finished Form, is supplied for use in a Collaboration Study or Independent Study) or within [***] after the Manufacturing Commencement Date, the Parties shall enter into supply agreements (each, a “Supply Agreement”) to govern forecasting, ordering, expiration dates, procedures for acceptance and rejection and other customary provisions for the supply of the Nektar Compounds, Products, Nektar Assets and the BMS Assets for the Collaboration Studies and Independent Studies.  In addition, within a mutually agreed upon date reasonably prior to a Filing for Regulatory Approval of the initial BLA for a Product and on an ongoing basis thereafter

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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as required, the Parties shall enter into Supply Agreements or other arrangements to govern the forecasting, ordering, expiration dates, procedures for acceptance and rejection and other customary provisions for the commercial supply of the Nektar Compounds, Products, Nektar Assets and BMS Assets, as applicable, for Commercialization of the Products and Combined Therapies in the Field.

 

Article 6

GLOBAL DEVELOPMENT COST SHARING

6.1Manufacturing and Supply Expenses; Intellectual Property Expenses.  Expenses incurred as described in Article 5 (regarding manufacturing and supply), and Article 11 (regarding intellectual property) shall be borne or shared by the Parties as provided in such Articles.

6.2Monotherapy Collaboration Studies Expenses.  Subject to Section 6.1, for any Monotherapy Collaboration Studies, Nektar shall be responsible for sixty-five percent (65%) of the Development Costs and BMS shall be responsible for thirty-five percent (35%) of the Development Costs, in each case to the extent that such Development Costs are incurred in accordance with this Agreement and the applicable Development Budget.  

6.3Combined Therapy Collaboration Studies Expenses.  Subject to Section 6.1, the Development Costs (other than Clinical Manufacturing Costs) for Combined Therapy Collaboration Studies shall be allocated to, and be the responsibility of the Parties, in accordance with Schedule 6.3 (Combined Therapy Collaboration Study Development Cost Allocation), in each case to the extent that such Development Costs are incurred in accordance with this Agreement and the applicable Development Budget.  For avoidance of doubt, Development Costs do not include Third Party License Payments by BMS or Nektar or any Third Party Claims, in each instance with respect to BMS Assets or Nektar Assets (other than Nektar Compounds).  

6.4Nektar Annual Development Cost Cap.

(a)Nektar’s share of Collaboration Study Development Costs (including Clinical Manufacturing Costs) is subject to an annual cap of one hundred twenty-five million dollars ($125,000,000) in any given Calendar Year (the “Development Cost Cap”) to be calculated in accordance with U.S. GAAP; provided that the Development Cost Cap during the first Calendar Year shall be calculated on a pro rata basis as of the Effective Date.  In the event that Nektar’s pro rata share of Development Costs exceeds the Development Cost Cap in any given Calendar Year (in each instance, the “Nektar Excess Development Cost”), BMS will be responsible for, and shall pay for or reimburse Nektar for, all Development Costs in excess of the Development Cost Cap, including the Nektar Excess Development Cost.  To be clear, the Nektar Excess Development Cost remains a payable by Nektar until full payment thereof, and may be carried forward to future Calendar Years in accordance with the remainder of this Section 6.4.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(b)Nektar will reimburse BMS for the Nektar Excess Development Costs paid by BMS as follows, until full reimbursement thereof to BMS in accordance with the following:

(i)before the First Commercial Sale of the first Product in the Territory, in each Calendar Year in which the Development Cost Cap is not reached, Nektar shall reimburse BMS for any unreimbursed Nektar Excess Development Costs (but solely to the extent that the Development Cost Cap it is not reached in such Calendar Year);

(ii)following such First Commercial Sale, Nektar shall reimburse BMS for any unreimbursed Nektar Excess Development Costs, as a reduction of Nektar Share of Net Profits, according to the following schedule:

(A)for the [***] following such First Commercial Sale: up to [***] of Nektar Share of Net Profits shall be directed to the reimbursement to BMS of any unreimbursed Nektar Excess Development Cost; and

(B)in any subsequent years: up to [***] of Nektar Share of Net Profits shall be directed to reimbursement of any unreimbursed Nektar Excess Development Cost;

provided that Nektar may voluntarily reimburse any Nektar Excess Development Cost in advance of the above reimbursement schedule and process.

(c)[***].

 

Article 7

INDEPENDENT DEVELOPMENT

7.1General.  The Parties acknowledge that notwithstanding their collaboration to Develop and Commercialize the Nektar Compounds and the Product in the Field in accordance with this Agreement, but subject to Section 7.3(d), (a) Nektar independently is entitled to Develop and Commercialize the Nektar Compound in the Field in the Territory through Clinical Trials of the Nektar Compound as a Monotherapy, other studies (including preclinical) and activities, in each case undertaken outside of the Joint Development Plan (each such Clinical Trial, study and activity, a “Monotherapy Independent Study”) and (b) each Party independently is entitled to Develop and Commercialize the Nektar Compound in the Field in the Territory through Clinical Trials of the Combined Therapy, other studies (including preclinical) and activities, in each case undertaken outside of the Joint Development Plan (each such Clinical Trial, study and activity, a “Combined Therapy Independent Study”).  Before commencing any such Clinical Trials, other studies or activities directed to the Development of a Monotherapy or Combined Therapy in the Field as an Independent Study, the Party proposing such Clinical Trials, other studies or activities shall review such proposed Clinical Trials, other studies or activities with the other Party at a

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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meeting of the JDC and shall endeavor reasonably to create a jointly agreed strategy and plan for such Clinical Trials, other studies or activities, which may include (x) amending the Joint Development Plan to include such Clinical Trials, other studies or activities as a new Collaboration Study under this Agreement (which would include the obligation for each Party co-funding its pro rata share of the Development Costs for such new Collaboration Study), or (y) the proposing Party independently conducting and funding such Clinical Trials, other studies or activities as an Independent Study.  Notwithstanding the meeting and discussion at the JDC, neither Party is obligated to disclose any Confidential Information regarding the existence of or status of any discussions, arrangements or disclosures with any Third Party regarding such proposed Clinical Trials, other studies or activities.  Moreover, subject to the rights and limitations set forth in Section 7.3, neither Party has any obligation to obtain consent or approval from the JDC in respect of any Independent Study, or any obligation to continue discussion of any Independent Study at the JDC.

7.2Current Nektar Studies.  Notwithstanding anything in this Agreement to the contrary, including pursuant to Section 7.3, Nektar is entitled to continue any ongoing (as of the Execution Date) (and initiate new) preclinical and Combined Therapy Clinical Trials under the terms of any existing Third Party arrangements (such studies and Clinical Trials, the “Current Studies”).  Attached as Schedule 7.2 (Current Studies) is a schedule of the Current Studies.  Each Current Study shall be treated as an Independent Study.  For clarity, any study with a Third Party that is not a Current Study, shall be subject to the provisions of Section 7.1.

7.3Independent Studies: Rights and Limitations.  The rights and limitations set forth in this Section 7.3 apply to each Party’s conduct of any Independent Study.

(a)Supply of Certain BMS Assets.  At Nektar’s request through the JDC, and subject to BMS approval not to be unreasonably withheld or delayed, BMS will provide Nektar, free of charge, with the BMS Compound, [***], for use in Combined Therapy Independent Studies (of a combination of Nektar Assets with such BMS Assets (whether or not with any Third Party Assets) or for the conduct of the activities permitted by Section 3.9, subject to the limitations and restrictions described in this Section 7.3.  Nektar’s right to request quantities of such BMS Assets for such Independent Studies will terminate on the [***].

(b)Supply of certain Nektar Assets.  At BMS’s request through the JDC, and subject to Nektar approval not to be unreasonably withheld or delayed, Nektar agrees to provide BMS with any Nektar Asset [***], for use in Combined Therapy Independent Studies of a combination of BMS Assets with such Nektar Assets (whether or not with any Third Party Assets) or for the conduct of the activities permitted by Section 3.9, subject to the limitations and restrictions described in this Section 7.3.  Nektar shall provide supplies of such applicable Nektar Asset free of charge for any Independent Studies of BMS Assets in combination with the applicable Nektar Assets, to the exclusion of any Third Party Asset, and for the conduct of the activities permitted by Section 3.9.  For any other Independent Studies, Nektar shall provide supplies of such applicable Nektar Asset for a fee equal to [***].  BMS’s right to request quantities of such Nektar Assets will terminate on the [***].

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(c)Supply of Nektar Compound.  At either Party’s request through the JDC, Nektar (or BMS, if BMS has exercised the Manufacturing Option) agrees to provide either Party with the Nektar Compound for use in any Independent Study (whether or not with any other Nektar Assets, BMS Assets or Third Party Assets) or for the conduct of the activities permitted by Section 3.9, subject to the limitations and restrictions described in this Section 7.3.  The Nektar Compound shall be supplied for a fee equal to [***].

(d)Clinical Trials for a Collaboration Therapy.

(i)For purposes of this Section 7.3(d):

(A)Collaboration” and “Collaborate” refers to any arrangements whereby a Third Party (whether for-profit, academic, or other) is involved in the clinical development of a compound (including by providing any compound or other asset free of charge or at a discount for purposes of such development) in such a way that such Third Party obtains any rights or licenses to any clinical study data or intellectual property rights (including Patent Rights and Right of Cross-Reference) generated as a result of such clinical development, in relation to the compound made available by Nektar or BMS (as applicable), or the compound or assets such Third Party makes available;

(B)Competing Combination” means a therapy using an IL-2 Agonist in combination with at least one Competing Compound, whether as individual combinations or Fixed Dose Combination;

(C)Competing Compound” means, for each Collaboration Therapy, any large or small molecule that binds to any of the targets listed in Schedule 1.43 opposite such Collaboration Therapy (Lines and Indications) (other than an IL-2 Agonist);

(D)Limited Indication Exclusivity Term” means the period from the Effective Date until the later of (1) the date of the First Commercial Sale of the first Product or (2) the third (3rd) anniversary date of the Effective Date; and

(E)Limited Indication Exclusivity Extended Term” means the three (3) year period immediately after the end of the Limited Indication Exclusivity Term.

(ii)During the Limited Indication Exclusivity Term, Nektar (or a Nektar Successor) shall not (whether alone or in Collaboration with any Third Party) Develop, without BMS’s prior written consent (at BMS’s sole discretion), a Competing Combination for any Collaboration Therapy.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(iii)During the Limited Indication Exclusivity Extended Term, Nektar (alone or with any of its Affiliates, but not in Collaboration with any Third Party) shall be permitted to Develop a Competing Combination for any Collaboration Therapy, using (1) a Nektar Compound and (2) one or more Nektar Assets and/or any other Third Party Asset purchased on the open market.

(iv)In the event of a Change of Control of Nektar, the Nektar Successor shall be permitted (A) during the Limited Indication Exclusivity Extended Term, to Develop (alone or with any of its Affiliates, but not in Collaboration with any Third Party), a Competing Combination for any Collaboration Therapy, using (1) a Nektar Compound and/or any other IL-2 Agonist and (2) one or more Nektar Assets, any compounds owned or controlled by such Nektar Successor and/or any other Third Party Asset purchased on the open market, and (B) after the Limited Indication Exclusivity Extended Term, to Develop a Competing Combination without any further restrictions.  [***].

(v)During the Limited Indication Exclusivity Term, BMS (or a BMS Successor) shall not (whether alone or in Collaboration with any Third Party) Develop, without Nektar’s prior written consent (at Nektar’s sole discretion), a Competing Combination for any Collaboration Therapy.

(vi)During the Limited Indication Exclusivity Extended Term, BMS (alone or with any of its Affiliates, but not in Collaboration with any Third Party) shall be permitted to Develop a Competing Combination for any Collaboration Therapy, using (1) any IL-2 Agonist regardless of its origin (e.g., whether owned or controlled by BMS, sourced from a Third Party or purchased on the open market) and (2) one or more BMS Assets and/or any other Third Party Asset purchased on the open market.

(vii)In the event of a Change of Control of BMS, the BMS Successor shall be permitted (A) during the Limited Indication Exclusivity Extended Term, to Develop (alone or with any of its Affiliates, but not in Collaboration with any Third Party) a Competing Combination for any Collaboration Therapy, using (1) any IL-2 Agonist owned or controlled by the BMS Successor and (2) one or more BMS Assets, any compounds owned or controlled by such BMS Successor, or any other approved Third Party products purchased on the open market, and (B) after the Limited Indication Exclusivity Extended Term, to any Competing Combination without further restrictions.

(viii)Notwithstanding anything herein to the contrary, in the event that a Collaboration Therapy set forth on Schedule 1.43 is removed from the Label Indication for the Nektar Compound, or for a Nektar Asset or BMS Asset used in combination with the Nektar Compound, at the advice or direction of a Regulatory Authority, such Collaboration Therapy shall automatically be removed from Schedule 1.43 and such schedule shall be amended hereby.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(ix)For clarification, the limitations set forth in this Section 7.3(d) also apply to any triplet or quad Combined Therapy Clinical Trial, even if the Combined Therapy Collaboration Study under the Joint Development Plan for the applicable Collaboration Therapy is a doublet combination (or does not otherwise have the same number of compounds as are included in the proposed Combined Therapy Clinical Trial) or any doublet or triplet Combined Therapy Clinical Trial, even if the Combined Therapy Collaboration Study under the Joint Development Plan for the applicable Collaboration Therapy is a triplet or quad combination (or does not otherwise have the same number of compounds as are included in the proposed Combined Therapy Clinical Trial).  As an example, a Party is not permitted to Develop a triplet Combined Therapy that has one of the same mechanism(s) of action (notwithstanding the additional compounds) as a doublet Combined Therapy that is being pursued under the Development Program, without, in each instance, the other Party’s approval.  

(x)Notwithstanding anything to the contrary herein, this Section 7.3(d) shall remain unaffected by any Change of Control of either Party, except that any IL-2 Agonist assets controlled by such BMS Successor or Nektar Successor or any of their respective Affiliates (before or after the effective date of such Change of Control) shall remain unaffected by any of the limitations of this Section 7.3(d), provided such IL-2 Agonist assets are not made available to Nektar or BMS (as the case may be) or combined with other Nektar Assets or BMS Assets (as the case may be) for Clinical Trials.

(e)[***].

(f)[***].

(g)All Independent Studies (and supply of compounds from either Party in connection with an Independent Study) are subject to the following:

(i)the total number of subjects to be treated with the BMS Assets, if Nektar is [***];

(ii)unless the Parties agree otherwise in writing, the dosage and dosage regimen of the other Party’s Single Agent Compound to be used in an Independent Study shall be [***], or (3) such other dose and regimen that the Parties reasonably agree on;

(iii)such Independent Study is approved by all applicable IRBs, and is otherwise conducted in compliance with Applicable Law; and

(iv)without limiting the supplying Party’s approval authority pursuant to Sections 7.3(a) or 7.3(b), as applicable, an Independent Study shall not proceed if the supplying Party reasonably deems there to be a Material Safety Issue regarding the conduct of the Independent Study (unless and until such Material Safety Issue is addressed to the supplying Party’s reasonable satisfaction).

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Notwithstanding the foregoing, each Party has the right to request additional supply of BMS Assets or such Nektar Assets, as applicable, from the other Party in connection with a Combined Therapy Independent Study; provided that such requesting Party shall reimburse the other Party for such supplied BMS Assets or Nektar Assets, as applicable, at a fee equal to [***] for such BMS Asset or Nektar Asset, or a fee as otherwise mutually agreed by the Parties.  For clarity, such costs for the additional supply BMS Assets or Nektar Assets, as applicable, for Combined Therapy Independent Studies shall be included in Opt-Out Development Costs.

(h)Each Party leading an Independent Study shall be responsible for preparing, filing and maintaining all Regulatory Documentation associated with such Independent Study.

(i)Each Party will make available and promptly disclose to the JDC, subject to Third Party confidentiality restrictions (if applicable), all results of the work conducted by such Party pursuant to the Independent Study that is related to the use of a Nektar Compound, or other Nektar Asset or BMS Asset (as the case may be), and will keep such records (paper and electronic) as described herein.  The Party engaged in the Independent Study will maintain records of the results relating to such Nektar Compound, or other Nektar Asset or BMS Asset (as the case may be), in sufficient detail and in good scientific manner appropriate for patent purposes, and in a manner that properly reflects all work done and results achieved in the performance of the Independent Study (including all data, such as minutes from dose escalation meetings with any Regulatory Authority and all final clinical study reports relating to such Nektar Compound, or other Nektar Asset or BMS Asset (as the case may be), in the form required to be maintained under any applicable governmental regulations).  

(j)With respect to adverse event reporting related to the use of a Nektar Compound, or other Nektar Asset or BMS Asset (as the case may be), under an Independent Study, the Party engaged in the Independent Study shall report to the other Party any such adverse events of the type required to be reported under Section 10.8 in the manner and in accordance with the procedures set forth in Section 10.8.

(k)For any Independent Study where a Party is supplying a Nektar Asset or BMS Asset to the other Party pursuant to Sections 7.3(a) or 7.3(b), as applicable, the Parties will enter into a separate clinical collaboration agreement in relation to such Independent Study and such agreement shall contain the same rights and obligations of the Parties as set forth in this Agreement and applicable to Collaboration Studies with respect to the use and disclosure of the results, sharing of information and Patent Rights in connection with the applicable Independent Study and the Parties will agree, if applicable, on any additional terms and conditions (including in relation to governance) that would apply to such Independent Study.

7.4Reimbursement for Opt-Out Development Costs.  If a Monotherapy Independent Study or Combined Therapy Independent Study results in Regulatory Approval or a Label expansion of a BMS Asset or Nektar Asset (including the Nektar Compound), the non-funding Party shall reimburse the funding Party for the non-funding Party’s allocated share of Opt-Out Development Costs incurred by the funding Party for the applicable Monotherapy Independent

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Study or Combined Therapy Independent Study (using the principles set forth in Sections 5.3(c)(i), 6.2 and 6.3) for which the non-funding Party would have been responsible had such Independent Study been a Collaboration Study, plus an amount equal to [***] of such reimbursement.  Such reimbursed Opt-Out Development Costs (and the [***] additional reimbursement for such Independent Study) shall be subject to the reconciliation procedures set forth in Section 9.7 but shall not be subject to the Development Cost Cap.

 

Article 8

GLOBAL COMMERCIALIZATION

8.1Joint Commercialization.  Subject to Sections 8.9 and 8.12 and the terms and conditions of this Agreement, the Parties are jointly responsible for Commercializing the Products in the Field in the Territory in compliance with this Agreement and in all material respects with Applicable Law, and shall use their Commercially Reasonable Efforts in this respect.  Joint Commercialization of the Product will apply to all Indications for which the Product receives Regulatory Approval whether pursuant to a Collaboration Study or an Independent Study.

8.2Joint Commercialization Committee.  No later than the commencement of the first Initial Trial under the Joint Development Plan, the Parties shall form a Joint Commercialization Committee (the “JCC”) to oversee global Commercialization activities and to serve as a decision-making forum.  The JCC shall consist of [***].  Each Party shall be responsible for determining the qualifications and substitutions of its JCC members.  It is anticipated that each Party’s representatives may include experts in clinical development, global commercialization, and supply.  The JCC shall be co-chaired with one chairperson designated by each Party (each, a “JCC Co-Chair”).  The JCC shall meet at least [***], or at such other frequency as the JCC agrees (and it may appoint working teams to meet more frequently), provided that either Party through its JCC Co-Chair may request a meeting of the JCC at any time upon [***] notice to the other Party, with the understanding that the other Party will use reasonable efforts to comply with such request but such other Party will not be in breach of this Agreement in the event that it is unable to comply with such request but is using reasonable efforts to conduct a JCC meeting as promptly as practicable.  Upon request by either Party, such meetings will be held by audio or video teleconference; provided that face-to-face meetings shall occur at least [***], alternating between Princeton, NJ and San Francisco, CA unless otherwise agreed upon by the Parties.  There must be a minimum of [***] from each Party at any meeting of the JCC to constitute a quorum for decision-making.  No fewer than five (5) Business Days prior to each meeting, and in any event as soon as reasonably practicable, each Party shall use good faith efforts to disclose to the other Party any proposed agenda items together with appropriate supporting information.  The Alliance Managers shall alternate responsibility for preparing and circulating definitive minutes of each meeting of the JCC.  Such minutes shall provide a description, in reasonable detail, of the discussions at the meeting, a list of material actions and decisions made by the JCC, a list of action items made by the JCC and a list of material issues not resolved by the JCC.  The Alliance Manager who drafts the minutes shall provide the other Alliance Manager and each Party’s JCC Co-Chair with the

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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initial draft meeting minutes, who shall return the draft with any proposed changes, and this process shall be repeated until a final version of the meeting minutes is agreed upon and signed (or acknowledged as final via email) by the two JCC Co-Chairs.  The Parties shall reasonably cooperate to complete and agree upon a final version of meeting minutes within [***] from the date of the relevant meeting.  The final version of the meeting minutes shall be signed (or acknowledged as final via email) by the two JCC Co-Chairs, and each Party shall be provided with a copy of the final meeting minutes for its safekeeping.  A reasonable number of additional representatives of a Party may attend meetings of the JCC in advisory capacity with the prior written consent of the other Party; provided that any JCC meetings that includes representatives of either Party who are not JCC members may, at the request of any JCC member, include a closed session consisting of only JCC members and Alliance Managers.  All representatives to the JCC or attending JCC meetings shall be subject to confidentiality and nonuse restrictions at least as restrictive as those set forth herein.

8.3Responsibilities of the Joint Commercialization Committee.  Each Party shall use Commercially Reasonable Efforts to keep the JCC informed about activities performed by that Party hereunder.  The JCC will be responsible for the overall oversight of the global Commercialization of the Product.  Commercialization of each Product shall be pursuant to the Commercialization Plan and Budget, provided that Commercialization in the countries other than Major Markets shall be conducted in a manner consistent with the Commercialization Plan and Budget.  The JCC (or in the absence of a formal JCC meeting, the JCC Co-Chairs) shall be responsible for the following:

(a)reviewing and providing timely comments to the initial Commercialization Plan and Budget proposed by BMS;

(b)updating and amending the Commercialization Plan and Budget as Regulatory Approvals for the Product are obtained (whether as a result of Collaboration Studies or Independent Studies);

(c)overseeing the Commercialization Plan and Budget and Global Pricing and Reimbursement Plan, including approving the Commercialization Plan and Budget and any material amendments thereto;

(d)determining the initial post-approval Product price, any price increase/decrease ranges, and annual price discounting/rebate ranges (collectively, “Pricing Decisions”), the period for which the applicable Pricing Decisions shall apply (the “Pricing Period) including approving any amendments thereto; provided that all Pricing Decisions shall be subject to both Parties’ legal and compliance guidelines, and Nektar final decision-making authority under Section 8.6(a);  

(e)overseeing the activities of the Parties with respect to the global Commercialization and pricing of the Product, and providing a forum for the Parties to discuss, monitor and coordinate all activities and communications regarding the global Commercialization

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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and pricing of the Products, including payor interactions and discount/rebate negotiations with respect to Products;

(f)overseeing BMS’s price negotiations and other interactions with Third Party payors or purchasers of Product in the Field in the Territory and any proposed price changes related thereto;

(g)reviewing and providing timely comments to proposed communication strategies and communications with any Regulatory Authority regarding the global Commercialization of the Product and, if applicable, approving such proposed communications and communication strategies;

(h)appointing working teams, to be made up of an equal number of representatives from each Party, that will hold telephone discussions at a mutually agreed-upon frequency to review global Commercialization of the Product issues that arise in the course of a study under the Commercialization Plan and Budget set forth therein, and delegating certain decision-making authority to such working teams;

(i)reviewing each Party’s [***] forecast provided to the JCC for quantities of Product necessary for global Commercialization of the Products, which shall be reviewed [***], and for which [***];

(j)determining the quantities of Product, necessary for global Commercialization of the Products within a sufficient minimum lead time and coordinating the supply of such quantities by the respective Party in accordance with Article 5 and the Supply Agreements or other arrangements;

(k)reviewing each Party’s Commercialization forecast for the BMS Assets and other Nektar Assets used in Combined Therapies and advising each Party with respect to allocation of applicable available inventory; and

(l)discussing any other topics or issues relating to the global Commercialization of the Product that either Party requests that cannot be resolved at the working team level.

8.4Joint Commercialization Committee Decision-Making.  

(a)The JCC shall take action by unanimous consent, with each Party having a single vote, irrespective of the number of its representatives actually in attendance at a meeting.  In the absence of a formal meeting, the JCC Co-Chairs shall have decision-making authority for the JCC, so long as any decisions are documented as provided below.

(b)The JCC shall have the right to make only those determinations expressly enumerated as decisions of the JCC in this Agreement; provided that such determinations are

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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documented in the written minutes signed (or acknowledged as final via email) by the JCC Co-Chairs.  

(c)Notwithstanding anything to the contrary in this Agreement, the JCC will have no power (i) to amend this Agreement or (ii) to modify either Party’s obligations with regard to a study in the Joint Development Plan without such Party’s prior written consent; in each case, except by a writing (and that is not the minutes of a meeting) signed by both Parties.

8.5Dispute Resolution.  The representatives of the JCC shall attempt in good faith to reach consensus on all matters properly brought before the JCC.  Except as otherwise provided in this Agreement, if, after a good faith, reasonable and open discussion among the members of the JCC, the JCC is unable to agree on a matter that has been properly before it for a period of [***] and that calls for a decision, either Party may refer the dispute (a “JCC Dispute”) to the JEC for resolution.  If the JEC is unable to reach a resolution within [***] of the referral of the JCC Dispute to the JEC, either Party may refer such JCC Dispute to the Executive Officers for resolution.  Subject to the following sentence, if the Executive Officers are unable to reach a resolution within [***] of such referral and such JCC Dispute is not otherwise addressed by Section 8.6 (Final Decision-Making Authority of the Parties), the dispute shall be resolved through arbitration as provided for in Article 15, whether as a Commercial/Financial Dispute or as an Arbitration Matter.  If the JCC Dispute regards the Commercialization Plan and Budget and its contents for any Product, then such JCC Dispute shall not be subject to arbitration hereunder, no Party shall have final decision-making authority and the Parties shall not be deemed to be in breach of their Commercially Reasonable Efforts to Commercialize the Product and the previous year’s Commercialization Plan and Budget shall apply.

8.6Final Decision-Making Authority of the Parties.  In the event a JCC Dispute is unresolved pursuant to Section 8.5 as set forth above:

(a)Nektar shall have final decision-making authority regarding (i) Pricing Decisions for the Product on a continuing, global basis, provided that the Pricing Decisions, once established for any given Pricing Period, shall not be changed during the applicable Pricing Period except as jointly agreed by the Parties through the JCC, and (ii) the Commercialization of Nektar Combinations and any Monotherapy.

(b)Subject to Nektar’s final decision-making authority set forth in Section 8.6(a), BMS shall have final decision-making authority regarding (i) the Commercialization (but not Pricing Decisions) of the BMS Combinations, and (ii) any execution decisions for implementing the Commercialization Plan and Budget, to the extent not otherwise explicitly set forth or in conflict with any other provision in this Agreement.

8.7Pricing.  As a general matter and subject to the oversight of the JCC under Section 8.3, Nektar shall be responsible for price negotiations and other interactions with Third Party payors or purchasers of the Product in Nektar Combinations in all countries in the Territory, whether developed under the Joint Development Plan or an Independent Study.  As a general

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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matter and subject to the oversight of the JCC under Section 8.3, BMS shall be responsible for price negotiations and other interactions with Third Party payors or purchasers of the Product in BMS Combinations in all countries in the Territory, whether developed under the Joint Development Plan or an Independent Study.  Each Party shall have the right to jointly participate in any such negotiations or interactions led by the other Party.  With respect to the foregoing, any deviation from the Pricing Decisions requires a disclosure to and approval of the JCC, subject to Nektar’s final decision making authority under Section 8.6, as limited by such Section.

8.8Booking of Sales. Unless otherwise agreed by Nektar in writing during the Term, required by Applicable Law, or if required by applicable accounting principles (as determined by Nektar, but subject to Section 15.1(a)), Nektar shall book all sales and revenue of Nektar Compounds and Product, and the Parties shall agree to the procedures to allow Nektar to (a) book all such sales and revenue and (b) receive all proceeds from such sales and revenue directly from the applicable Third Parties, in each case in accordance with applicable accounting principles to maintain Finance and Accounting Compliance.  The Parties will cooperate and report and reconcile Net Product Sales and Net Profits in accordance with the Revenue Reporting and Reconciliation Procedures and Section 9.5.  Nektar will book all sales and revenue of all other Nektar Assets (i.e., all Nektar Assets other than the Nektar Compounds) and retain all revenue for such sales.  BMS will book all sales of BMS Assets and retain all revenue for such sales.  

8.9Commercialization.  

(a)The Parties shall be responsible for paying all Commercialization costs incurred by such Party set forth in the Commercialization Plan and Budget and Global Pricing and Reimbursement Plan approved by the JCC, and subject further to the Revenue Reporting and Reconciliation Procedures and Section 9.5.  Each Party shall use Commercially Reasonable Efforts to Commercialize Products in the Field in the Territory in accordance with the Commercialization Plan and Budget and the terms of this Agreement.  

(b)The JCC may establish standards applicable to the Parties’ performance of Commercialization activities in accordance with the Commercialization Plan and Budget and this Agreement, which may include standards for sales representatives promoting Products in the Field.  The Parties may review and discuss each Party’s (and its Affiliates’) performance against such standards at each meeting of the JCC.  If the JCC determines that a Party or its Affiliate has failed to comply with such standards and such failure could adversely affect the Development or Commercialization of any Product in the Field, or if the JCC does not agree and one Party believes such is the case, the JCC shall (or such Party may) escalate the issue to the JEC for review and resolution.

(c)Each Party shall be responsible for day-to-day implementation of the Commercialization activities with respect to the Product for which it has or otherwise is assigned responsibility under this Agreement or the Commercialization Plan and Budget and shall keep the other Party reasonably informed as to the progress of such activities, as determined by the JCC.  

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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The Commercialization Plan and Budget shall include a description of the promotional efforts on a country-by-country basis for the Nektar Combinations and BMS Combinations.

(i)BMS shall have all promotional responsibility for the promotion, marketing, medical support, market access/reimbursement and patient advocacy activities, in the Territory for BMS Combinations Developed under the Joint Development Plan or under an Independent Study.

(ii)Nektar shall have all promotional responsibility for the promotion, marketing, medical support, market access/reimbursement and patient advocacy activities, in the Territory for Nektar Combinations Developed under the Joint Development Plan or under an Independent Study.

(d)For clarity, nothing in Section 8.9(c) shall limit either Party from promoting the Product to the extent permitted by Applicable Law outside of the scope of the Commercialization Plan and Budget, provided that (A) such promotion shall be consistent with the other provisions of this Article 8; (B) such promotion shall be consistent with the Product Brand Strategy in order to prevent counter-detailing of BMS Combinations or Nektar Combinations; (C) the Parties will not be permitted to create, disseminate or otherwise use or employ negative messaging regarding the BMS Assets and BMS Combinations, in the case of Nektar, and the Nektar Assets and Nektar Combinations, in the case of BMS; and (D) the Parties shall limit claims of efficacy and safety for any Product to those that are consistent with Applicable Laws.

(e)Unless otherwise approved by the JCC, in the performance of Commercialization (including promotion) of the Nektar Compound and Product pursuant to this Agreement, neither Party (nor any Nektar Successor or BMS Successor) shall use, other than promotional materials approved in accordance this Agreement, the trademarks, logos, promotional materials, trade dress, copyrights, corporate logos, corporate names, visual identity and branding elements of the other Party (or the other Party’s other products) without the prior written consent of such other Party.

(f)The Parties shall use Commercially Reasonable Efforts to ensure commercial availability of the Nektar Assets (other than the Product) or BMS Assets, as applicable, that are used in Combined Therapies, at a level and volume of supply necessary to support achievement of the forecasted sales of the Product.

(g)Product Brand Strategy and Promotional Materials.

(i)The JCC shall appoint a joint Product brand strategy working team (the “Product Brand Strategy Working Team”).  As set forth in the Commercialization Plan and Budget, Nektar and BMS shall develop the global brand strategy for the Product (the “Product Brand Strategy”), including positioning, branding, and global messaging, that will guide the development of the relevant sales, promotion, market access and

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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advertising materials by Nektar (for the Nektar Combinations pursuant to Section 8.9(g)(ii)) and by BMS (for the BMS Combinations pursuant to Section 8.9(g)(iii)).  The Product Brand Strategy must comply with each Party’s applicable SOPs, the Commercialization Plan and Budget, Applicable Laws and Regulatory Approvals.  If the Product Brand Strategy Working Team cannot agree upon certain matters relating to the Product Brand Strategy, the matter may be referred to (A) the JCC or (B) for legal and compliance matters, the legal or compliance departments of the Parties, and then to the JCC for resolution, subject in this case to the final approval of the Parties’ respective compliance officers and legal departments, provided that if the Parties’ compliance officers or legal departments are unable to reach an agreement on the matter referred to them in accordance with the immediately preceding sentence, then the Parties shall adopt the approach of the Party with the more conservative compliance or legal position regarding such matter.

(ii)Nektar shall develop the relevant sales, promotion, market access and advertising materials relating to the Nektar Combinations for use in the Territory by Nektar and its Affiliates, provided that such materials, to the extent that they relate to the Product, shall be consistent with the Product Brand Strategy.  Nektar shall be responsible for compliance for such materials, including with Applicable Law and the applicable Regulatory Approvals.

(iii)BMS shall develop the relevant sales, promotion, market access and advertising materials relating to the BMS Combinations for use in the Territory by BMS and its Affiliates, provided that such materials, to the extent that they relate to the Product, shall be consistent with the Product Brand Strategy.  BMS shall be responsible for compliance for such materials, including with Applicable Law and the applicable Regulatory Approvals.

(iv)Copies of all promotional materials relating to the Nektar Combinations and BMS Combinations as set forth in Sections 8.9(g)(ii) and 8.9(g)(iii), used by Nektar and BMS and their Affiliates in the Territory will be archived by Nektar and BMS, as applicable, in accordance with Applicable Law.

(v)The JCC shall develop and approve Product packaging for use in the Territory by both Parties and their Affiliates, which shall be consistent with the Commercialization Plan and Budget and compliant with the Product Brand Strategy, each Party’s applicable SOPs, Applicable Laws and Regulatory Approvals.

(h)The Parties shall establish reasonable procedures to protect the secrecy of Nektar’s and BMS’s competitively sensitive Confidential Information with respect to the Commercialization of Combined Therapies, including limiting access to such information to ensure that employees performing activities in connection with a Party’s assets or combination of assets outside the Joint Development Plan that compete with a Product in the Field do not receive

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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competitively sensitive Confidential Information with respect to the Commercialization of Combined Therapies.

8.10Trademarks.

(a)The Parties shall Commercialize the Product in the Territory under trademarks selected by the JCC and Controlled by Nektar, provided that Nektar shall have final decision making authority in relation to the selection of such trademark.  The Parties shall Commercialize all Products in the Territory under brands, logos, trade dress and other trademarks selected by the JCC, subject to Nektar’s final decision making authority, except that BMS shall have the ability to finally reject any trademark that it reasonably believes is too similar to the registered trademark of any BMS Asset (collectively, the “Product Marks”), provided that the Product packaging and inserts shall include the logos and corporate names of both Parties in a manner to be agreed by the Parties.  Product Marks may not use, incorporate or be confusingly similar any trademarks, trade names, service marks, logos, slogans, or trade dress, including corporate names, Controlled by BMS or any of BMS’s Affiliates without BMS’s prior written consent.  Once the Product Marks are identified, Nektar shall provide BMS with a license pursuant to a mutually agreed trademark agreement to reproduce, use and display such Product Marks solely for the purpose of (i) the Commercialization of the Product in the Field in the Territory under this Agreement, (ii) to the extent that BMS is a Manufacturing Party, the Manufacture of the Product, and (iii) any other activities permitted by this Agreement.

(b)BMS shall display symbols and notices clearly and sufficiently indicating the Product Marks’s trademark status and ownership.  All proprietary rights and goodwill associated with BMS’s use of the Product Marks shall inure to the benefit of Nektar.  BMS shall not (and shall cause its Affiliates and sublicensees not to):  (i) use the Product Marks, either directly or indirectly, in any promotional materials, packaging, or Labelling without Nektar’s prior review and written consent in accordance with Section 8.9(g), such consent not to be unreasonably withheld or delayed; (ii) publish or disseminate any promotional materials or Labelling that is inconsistent in any material respect with those previously reviewed and approved by Nektar; (iii) establish any Internet domain name or URL incorporating any Product Mark without Nektar’s prior written consent; (iv) use the Product Marks in combination with any other name or trademark in a manner that creates a combination trademark; (v) contest the validity of, or take any action that a reasonable person would believe would impair any part of Nektar’s ownership of the Product Marks or diminish or dilute their distinctiveness or validity; (vi) challenge Nektar’s ownership of the Product Marks and/or registration thereof; or (vii) attempt to register any Product Mark or any trademark confusingly similar to any Product Mark as a trademark in BMS’s own name.

8.11Sales Representatives.  

(a)Nektar and BMS shall each ensure that its and its Affiliates’ sales representatives do not make any representation, statement, warranty or guaranty with respect to a Product that is not consistent with the applicable, current package insert of prescribing information or other documentation accompanying or describing such Product, including mutually approved

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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limited warranty and disclaimers, if any.  Nektar and BMS shall each ensure that its and its Affiliates’ sales representatives do not make any statements, claims or undertakings to any Person with whom they discuss or promote the Products that are not consistent with, nor provide or use any Labelling, literature or other materials other than, those promotional materials currently approved for use by the JCC in the Territory.  If at any time the JCC no longer approves the use of specified promotional materials in a certain market in the Territory, each Party shall immediately take action to remove the promotional materials from use by its and its Affiliates’ sales representatives in such market.

(b)Nektar and BMS shall each ensure that its and its Affiliates’ sales representatives do not create, disseminate or otherwise use or employ any disparaging, untrue, misleading or inaccurate statements or comments about the other Party or its employees, or about the Products (whether as a Monotherapy or Combined Therapy).  

(c)Nektar and BMS shall each cause its and its Affiliates’ sales representatives to comply with Applicable Laws and guidelines related to the performance of its obligations hereunder.  Each Party shall, and shall cause its Affiliates to, maintain records of its sales representative activities in the Territory and each Party shall allow, and shall cause its Affiliates to allow, representatives of the other Party to inspect such records upon request during normal business hours and upon reasonable prior notice.

8.12BMS Combination Commercialization Option.  

(a)Option. Nektar has the option (on a country-by-country basis within the Major Markets) to provide Commercialization resources or services (i.e., in addition to the current BMS Commercialization-related FTEs and resources allocated to the promotion of the BMS Combinations) for the promotion of the BMS Combinations in any country in the Major Markets in accordance with this Section 8.12 (“BMS Combination Commercialization Option”).  Nektar may exercise the BMS Combination Commercialization Option in any of such countries in the Major Markets by written notice to BMS indicating the percentage of and types of Commercialization resources or services Nektar would provide (not to exceed [***] of the aggregate Commercialization resources dedicated to the Commercialization of the BMS Combinations in the applicable Commercialization Plan and Budget, provided that BMS shall not be required to modify its sales force structure or size as a result of the exercise of the BMS Combination Commercialization Option (it being understood that the Parties shall work together in good faith to optimize efficiency of sales force activities and resources directed to the BMS Combinations)) at any time prior to the date that is [***] prior to the estimated date of First Commercial Sale of Product in such market, as reasonably estimated by the Parties, but in no event earlier than [***].  If Nektar does not timely exercise its BMS Combination Commercialization Option then, the BMS Combination Commercialization Option shall expire with respect to such Major Market country.  All costs associated with the BMS Combination Commercialization resources or services to be provided by Nektar following exercise of the BMS Combination Commercialization Option will be included in an amended Commercialization Plan and Budget, and the allocation of such costs to a Product shall be based on an equitable allocation of such

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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efforts to the Product versus other promotional activities being undertaken by the applicable Nektar employees and representatives.  The methodology for such allocation shall be determined by the JCC.  For the avoidance of doubt, any Commercialization resources or services (including direct-to-consumer advertisements) provided or performed by Nektar pursuant to this Section 8.12 shall be subject to the other provisions of this Agreement and, in particular, Sections 8.6(b) and 8.9(g)(iii), and the standards and guidelines determined by BMS, as lead Party for the Commercialization of the BMS Combinations pursuant to Section 8.9(c)(i).

(b)Information Sharing Agreement.  If Nektar provides written timely notice to BMS that Nektar will exercise the BMS Combination Commercialization Option for a Major Market and elect to provide Commercialization-related FTEs for the promotion of the BMS Combinations, the Parties shall enter into good faith negotiations relating to the terms of, and shall enter into, an information sharing agreement (“Information Sharing Agreement”) within ninety (90) calendar days of the exercise of the BMS Combination Commercialization Option.  The Information Sharing Agreement shall include mutually acceptable guidelines, procedures and requirements for (i) the exchange of any applicable training materials and other information concerning the Commercialization of the BMS Combinations and (ii) the training of Nektar’s sales force prior to commencement of Commercialization of the BMS Combination.  

(c)Sales Force Experience.  Nektar’s sales force to be used for any Commercialization activities of the BMS Combinations shall be qualified to perform the obligations hereunder in a competent way, will have at least one year of prior experience promoting and detailing pharmaceutical products in the field of oncology to specialty physicians or other relevant oncology experience, and shall perform their obligations in accordance with all Applicable Law.

(d)Change of Control.

(i)[***].  

(ii)[***].

(iii)The Nektar Successor’s right to promote the Product to the full extent permitted by Applicable Law, including under the BMS Combination Commercialization Option to the extent exercised, remains unaffected by termination of the Information Sharing Agreement.  Without limiting the generality of the preceding sentence, the Nektar Successor is entitled to promote all Indications (including Combined Therapies) of the Product in accordance with this Agreement (including under the purview of the JCC and the Commercialization Plan and Budget), provided that (A) the Nektar Successor will not be permitted to create, disseminate or otherwise use or employ negative messaging regarding the BMS Assets and BMS Combinations, in the case of Nektar, and the Nektar Assets and Nektar Combinations, in the case of BMS, (B) the Nektar Successor shall limit claims of efficacy and safety for any Product to those that are consistent with Applicable Laws and with approved promotional claims in, and not add, delete or otherwise

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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modify claims of efficacy and safety in the promotion of Product in any respect from those claims of efficacy and safety that are contained in relation to the other Party’s Combinations or the Product Labels, and (C) the Nektar Successor shall not use any BMS Confidential Information in relation to such promotion.

8.13Returns.  Nektar shall be responsible for handling all returns of the Products in the Territory, and if a Product sold in the Territory is returned to BMS, BMS shall promptly ship such Product to a facility designated by Nektar.  Nektar shall also be responsible for handling all aspects of Product order processing, invoicing and collection, distribution, inventory and receivables in the Territory.  If Nektar elects to subcontract such activities, the JCC will discuss whether to have such activities performed by BMS.

8.14Recalls, Market Withdrawals or Corrective Actions.  Subject to the applicable Quality Agreement, in the event that any Regulatory Authority issues or requests a recall or takes a similar action in connection with a Product in the Territory, or in the event either Party determines that an event, incident or circumstance has occurred that may result in the need for a recall or market withdrawal in the Territory, the Party notified of such recall or similar action, or the Party that desires such recall or similar action, shall within [***], advise the other Party thereof by telephone or facsimile.  Nektar, in consultation with BMS, through the JDC, JCC or JMC, as applicable, shall decide whether to conduct a recall in any market in the Territory (except in the case of a government mandated recall, when Nektar may act without such advance notice but, shall notify BMS as soon as possible) and the manner in which any such recall shall be conducted (and in the event of any disagreement regarding a recall in the Territory, the approach that is more conservative shall control).  Each Party will make available to the other Party, upon request, all of such Party’s (and its Affiliates’) pertinent records that such other Party may reasonably request to assist such other Party in effecting any recall.  The costs and expenses of any such recall shall be taken into account in determining Net Profits and calculated in accordance with Section 9.5.

8.15Medical Inquiries.  The Parties shall agree on the procedures to be followed in relation the handling of all medical questions or inquiries from members of the medical profession regarding the Products and the Parties shall cause their sales representatives to refer all such questions and inquiries within [***] of receipt in accordance with such agreed procedures.  The Parties’ costs and expenses incurred in handling medical questions and inquiries in accordance with this Section 8.15 shall be taken into account in the Commercialization Plan and Budget and in accordance with Section 9.5. 

8.16Events Affecting Integrity or Reputation.  During the Term, the Parties shall notify each other immediately of any circumstances of which they are aware and which could impair the integrity and reputation of the Product in the Field or if a Party is threatened by the unlawful activity of any Third Party in relation to a Product in the Field, which circumstances shall include, by way of illustration, deliberate tampering with or contamination of a Product in the Field by any Third Party as a means of extorting payment from the Parties or another Third Party.  In any such circumstances, the Parties shall use Commercially Reasonable Efforts to limit any damage to the Parties and/or to the Product with the understanding that the health and welfare of

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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patients is of foremost importance.  The Parties shall promptly call a meeting to discuss and resolve such circumstances.

Article 9

FINANCIAL MATTERS

9.1Initial Payments.

(a)On the Closing Date, BMS shall pay Nektar a non-refundable and non-creditable amount equal to one billion dollars ($1,000,000,000) (the “Upfront Payment”).  

(b)On the Closing Date, and pursuant to, and as set forth in, the Investment Agreements, BMS shall acquire eight hundred and fifty million dollars ($850,000,000) of equity in Nektar (the “Equity Payment).

9.2Development Milestone.  

(a)Notice of Development Milestone Achievement.  Within [***] following the date of achievement by Nektar (whether by Nektar or any of its Affiliates or any of their respective sublicensees) of any of the Development Milestone events described in the table in this Section 9.2 with respect to a Product (each a “Development Milestone”), Nektar shall give notice to BMS thereof in writing, but the failure to provide such timely notice shall not be deemed a breach of this Section.  Within [***] following the date of achievement by BMS (whether by BMS or any of its Affiliates or any of their respective sublicensees) of any of the Development Milestone events, BMS shall give notice to Nektar thereof in writing, but the failure to provide such timely notice shall not be a breach of this Section.

(b)Payment for Development Milestone Achievement.  Within [***] following the achievement of a particular Development Milestone event with respect to the first Product to achieve such Development Milestone, BMS shall pay, or cause to be paid, to Nektar the corresponding payment for the applicable Development Milestone achieved as set forth below (each a “Development Milestone Payment”), each such payment being non-refundable and non-creditable.

Product

Event

 

Payment Amount (USD) for 1st

Indication

 

Payment Amount (USD) for 2nd

Indication

Payment Amount (USD) for 3rd

Indication

Payment Amount (USD) for 4th

Indication

BLA Filing in U.S. for a Product

[***]

[***]

[***]

[***]

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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BLA (or equivalent) Filing

in E.U. for a Product

[***]

[***]

[***]

[***]

BLA (or equivalent) Filing in Japan for a Product

[***]

[***]

[***]

[***]

First Commercial Sale in U.S. for a Product

[***]

[***]

[***]

[***]

First Commercial Sale in E.U. for a Product

[***]

[***]

[***]

[***]

First Commercial Sale in Japan for a Product

[***]

[***]

[***]

[***]

Total

$650M

$260M

$260M

$260M

 

Each Development Milestone set forth in this Section 9.2 shall be payable only one time regardless of the number of Products that achieve such Development Milestone.  Each Product may obtain Regulatory Approval for more than one Indication and as such may be subject to multiple Development Milestones.  For clarity, a single Filing may relate to multiple Indications, and if so, may trigger multiple Development Milestone Payments.  As used in this Section 9.2, the Product Event describing a BLA (or equivalent) Filing in the U.S., E.U. or Japan for a Product includes any BLA Filing seeking an accelerated or conditional approval.  For clarity, in no event shall total Development Milestone Payments to be made with respect to a particular Product exceed $1,430,000,000 in the aggregate.

 

9.3Commercial Milestones.  

(a)Notice of Commercial Milestone Achievement.  Within [***] after the date of the achievement (in aggregate by the Parties, any Third Party Collaborator, their respective Affiliates and sublicensees), of any of the Commercial Milestone events (which Net Product Sales are aggregated for all Products) described in the table in this Section 9.3 below (each a “Commercial Milestone”), Nektar shall give notice to BMS thereof in writing.

(b)Payment for Commercial Milestone Achievement.  Within [***] following the receipt of the notice referred to in Section 9.3(a), BMS shall pay, or cause to be paid, to Nektar the corresponding payment for the applicable Commercial Milestone achieved as set forth below (each a “Commercial Milestone Payment”), each such payment being non-refundable and non-creditable.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Net Product Sales Event

Payment Amount (USD)

The first Calendar Year in which the total annual worldwide Net Product Sales for any or all Product(s) (including all Indications and formulation of such Products) equals or exceeds [***] USD

[***]

The first Calendar Year in which the total annual worldwide Net Product Sales for any or all Product(s) (including all Indications and formulation of such Products) equals or exceeds [***] USD.

[***]

The first Calendar Year in which the total annual worldwide Net Product Sales for any or all Product(s) (including all Indications and formulation of such Products) equals or exceeds [***] USD.

[***]

Total

$350 million

 

Each Commercial Milestone set forth in this Section 9.3 shall be payable only one time.

(c)Calculation of Commercial Milestone.  For the purposes of calculating the Commercial Milestone events and Commercial Milestone Payments set forth in this Section 9.3, the revenue received by a Party (including any Affiliate) from any sublicensee of such Party or of such Party Affiliate under this Agreement, for the sale, license, disposition or other transfer of a particular Product in the Territory, shall be adjusted to an estimated Net Product Sales equivalent number according to Nektar accounting policies.

9.4Global Commercial Profit Sharing.

(a)During the Term, Nektar and BMS shall share global Commercialization profits and losses with respect to each Product as follows:  (i) the BMS share shall equal thirty-five percent (35%) of the Net Profit, whether positive or negative (the “BMS Share of Net Profit”); and (ii) the Nektar share shall equal sixty-five percent (65%) of the Net Profit, whether positive or negative (the “Nektar Share of Net Profit”).  Notwithstanding the proceeding sentence, solely for the first twelve (12) Calendar Quarters following the First Commercial Sale of the first Product, for any Calendar Quarter in which Net Profit is negative, an amount equal to fifteen percent (15%) of the Net Profit for any such Calendar Quarter (a “Loss Carry-Forward”) shall be borne by BMS on behalf of Nektar and carried over to subsequent Calendar Quarters in which Net Profit is positive, to be set off against Nektar Share of Net Profit and retained by BMS in such positive Calendar Quarter and any subsequent positive Calendar Quarters.  Notwithstanding anything to the contrary, in the event of a Change of Control of Nektar, [***].

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(b)For territories that are not Major Markets, if the JFC agrees, the Parties may agree to convert the profit share set forth above in Section 9.4(a) into an equivalent royalty to be paid to the Party that does not book the Product sales, provided that neither Party has any obligation to consent to such conversion.

9.5Calculation and Payment of Net Profit/Net Loss Share

(a)The JFC shall prepare for JCC approval reporting and reconciliation procedures for Commercialization and Product revenue (“Revenue Reporting and Reconciliation Procedures”) that will provide both Parties with sufficient information to record appropriate reserves, adjustments and other accruals required, under each Party’s accounting policies, including for Nektar to properly state Net Product Sales of the Product on a monthly basis in accordance with Nektar’s accounting policies.  The Revenue Reporting and Reconciliation Procedures will be developed in order to enable each Party to maintain Finance and Accounting Compliance under Applicable Law.  

(b)On the [***] after the end of each Calendar Quarter, each Party shall use best efforts to report to the other Party estimated Net Product Sales incurred during such Quarter.

(c)Within [***] after the end of each Calendar Quarter, each Party shall provide to the other Party its estimated Allowable Commercialization Expenses incurred by such Party for each Product during such Calendar Quarter in each country in Territory, in accordance with U.S. GAAP, to allow for the calculation of estimated Net Profits for such Calendar Quarter.  Each Party shall report to the other Party, within [***] after the end of each Quarter, the actual Net Product Sales and Allowable Commercialization Expenses incurred by such Party for each Product during such Calendar Quarter in each country in the Territory in a manner sufficient to enable the other Party to comply with its Finance and Accounting Compliance and on a line item basis consistent with the budgetary line items set forth in the Commercialization Plan and Budget (the “Quarterly Report”).  Such Quarterly Report shall specify in reasonable detail all deductions allowed in the calculation of such Net Product Sales and all expenses included in Allowable Commercialization Expenses for such Product.  If requested by a Party, any invoices or other supporting documentation for any payments to a Third Party in respect of Allowable Commercialization Expenses that individually exceed [***] (or such other amount as may be specified by the JEC from time to time) shall be promptly provided not more than [***] after receipt of a request therefor.

(d)Within [***] after the end of each Calendar Quarter (commencing with the Calendar Quarter in which the first Commercialization expenses (such as pre-launch expenses) are incurred), the Parties shall reconcile all Net Product Sales and Allowable Commercialization Expenses on a country-by-country basis to ascertain whether there is a positive or negative Net Profit with respect to any Product in each such country, and not later than [***] following such reconciliation the Parties shall make such payments to one another in accordance with this Agreement as may be necessary to achieve the sharing of Net Profit with respect to such Product in such country, such payment may also be reconciled with any other applicable payment to be

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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made by one Party to the other Party so that a single reconciliation payment is made.  To the extent any payments between the Parties include any element of Net Profit, such payments shall be taken into account for purposes of determining the ultimate settlement of Net Profit between the Parties.

(e)In determining the amount of Net Profit payment to be made with respect to a given country, the Parties shall also take into account any payments made by either Party to the other in such country (or its Affiliate) pursuant to any other agreement between the Parties or their Affiliates in consideration of Commercialization efforts in such country for the applicable period.

(f)Notwithstanding anything to the contrary in this Section, on a Calendar Year basis, the Parties shall not share or reimburse any Allowable Commercialization Expenses in excess of the amounts allocated for such Calendar Year in the Commercialization Plan and Budget and each Party will be solely responsible for Allowable Commercialization Expenses it incurs in excess of such budget; provided, however, that Allowable Commercialization Expenses in excess of such budget shall be included in the calculation of Net Profits to be shared by the Parties if [***].

(g)The JFC shall also determine if a quarterly, nonbinding estimated Net Profit report consistent with a Party’s internal reporting standards should be provided for planning purposes, but which would not be binding or used to determine or make any payments.

9.6Joint Finance Committee.  

(a)Joint Finance Committee.  Promptly after the Effective Date, the Parties shall form a Joint Finance Committee (the “JFC”).  The JFC shall consist of an equal number of representatives from each Party.  Each Party’s representatives shall include JFC members with the appropriate level of seniority and expertise in accounting, budgeting, cost allocation, and financial reporting.  The JFC shall be co-chaired with one chairperson designated by each Party (each, a “JFC Co-Chair”).  The JFC shall meet at such frequency as the JFC agrees (and it may appoint working teams to meet more frequently), provided that either Party through its JFC Co-Chair may request a meeting of the JFC at any time upon five (5) Business Days’ notice to the other Party, with the understanding that the other Party will use reasonable efforts to comply with such request but such other Party will not be in breach of this Agreement in the event that it is unable to comply with such request but is using reasonable efforts to conduct a JFC meeting as promptly as practicable.  Upon request by either Party, such meetings will be held by audio or video teleconference.  There must be a minimum of [***] from each Party at any meeting of the JFC.  No fewer than five (5) Business Days prior to each meeting, and in any event as soon as reasonably practicable, each Party shall use good faith efforts to disclose to the other Party any proposed agenda items together with appropriate supporting information.  The JFC Co-Chairs or Alliance Managers of each Party shall alternate responsibility for preparing and circulating definitive minutes of each meeting of the JFC.  Such minutes shall provide a description, in reasonable detail, of the discussions at the meeting, a list of material actions and decisions made by the JFC, a list of action items made by the JFC and a list of material issues not resolved by the JFC.  The Alliance

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Manager who drafts the minutes shall provide the other Alliance Manager and each Party’s JFC Co-Chair with the initial draft meeting minutes, who shall return the draft with any proposed changes, and this process shall be repeated until a final version of the meeting minutes is agreed upon and signed (or acknowledged as final via email) by the two JFC Co-Chairs.  The Parties shall reasonably cooperate to complete and agree upon a final version of meeting minutes within ten (10) Business Days from the date of the relevant meeting.  The final version of the meeting minutes shall be signed (or acknowledged as final via email) by the two JFC Co-Chairs, and each Party shall be provided with a copy of the final meeting minutes for its safekeeping.  A reasonable number of additional representatives of a Party may attend meetings of the JFC in advisory capacity with the prior written consent of the other Party; provided that any JFC meetings that includes representatives of either Party who are not JFC members may, at the request of any JFC member, include a closed session consisting of only JFC members and Alliance Managers.  All representatives to the JFC or attending JFC meetings shall be subject to confidentiality and nonuse restrictions at least as restrictive as those set forth herein.

(b)Responsibilities of the Joint Finance Committee.  Each Party shall use Commercially Reasonable Efforts to keep the JFC informed about activities performed by that Party under the Development Program and the Commercialization Plan and Budget.  The JFC (or in the absence of a formal JFC meeting the JFC Co-Chairs) shall be responsible for overseeing and coordinating the financial matters of the Parties with respect this Agreement, and providing a forum for the Parties to discuss, monitor and coordinate all financial activities and communications regarding the Agreement.  JFC responsibilities include undertaking the following activities, and reporting and making recommendations to the JDC or JCC (as the case may be) as follows:

(i)preparing preliminary Development Budgets for Collaboration Studies and other activities included in the Joint Development Plan by October 15th of the prior Calendar Year, and presenting final draft versions of such Development Budgets to the JDC for approval (which presentations shall be made with enough lead time for the JDC to review, and approve, by November 30th of the prior Calendar Year, unless a different date is mutually agreed to by the JFC Co-Chairs):

(A)The Lead Party will prepare the initial budget of the applicable Collaboration Study for review by the Joint Finance Committee and will be responsible for maintaining such budget throughout the completion of the applicable Collaboration Study.

(B)The Development Budget for a Collaboration Study should include any additional information as the JFC may agree.

(ii)periodically reviewing the Development Budget status of Collaboration Studies and monitoring:

(A)actual Development Costs incurred to date;

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(B)forecast of remaining Development Costs; and

(C)contracted Third Party costs;

(iii)reviewing the estimated Development Cost of each Independent Study proposed for inclusion in the Joint Development Plan as a Collaboration Study and, if such proposed Independent Study is actually included in the scope of the Joint Development Plan as a Collaboration Study, preparing and presenting the required update to the Development Budget to the JDC for approval, based on criteria and timelines mutually agreed to by the JFC Co-Chairs;

(iv)reviewing and revising (if needed) preliminary annual budgets under the Commercialization Plan and Budget by October 15th of the prior Calendar Year, and presenting such budgets to the JCC for approval (which presentations shall be made with enough lead time for the JCC to review, and approve, by November 30th of the prior Calendar Year, unless a different date is mutually agreed to by the JFC Co-Chairs);

(v)developing a methodology for calculating Allowable Commercialization Expenses, including the proper allocation of FTE costs including to the extent that FTEs promote other products or otherwise engage in activities not solely related to Commercialization of the Product;

(vi)reviewing and approving Allowable Commercialization Expenses or any other allocations of a Party’s internal costs or expenses to be shared between the Parties in connection with Commercialization of the Product;

(vii)overseeing the Development Cost Reporting Reconciliation Procedures and Revenue Reporting and Reconciliation Procedures set forth in Sections 9.5 and 9.7;

(viii)overseeing the Opt-Out Development Cost Reconciliation Procedures set out in Section 9.7;

(ix)reviewing the quarterly reconciliation of Collaboration Study Development Costs and reconciliation of Net Profit, and approving the net payment due between the Parties as set forth in Sections 9.5 and 9.7;

(x)overseeing internal and Third Party financial or accounting audits in accordance with this Agreement;

(xi)providing support to the other Committees with respect to financial, accounting, budgeting, reporting and other issues that may arise in connection with the Development Budget, Commercialization Plan and Budget and other various plans or budgets for activities under this Agreement; and

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(xii)discussing any other topics or issues relating the Development Budget, Commercialization Plan and Budget or other that either Party requests that cannot be resolved at the working team level.

(c)Authority of the Joint Finance Committee; Disputes.  The JFC shall take action by unanimous consent, with each Party having a single vote, irrespective of the number of its representatives actually in attendance at a meeting.  In the absence of a formal meeting, the JFC Co-Chairs shall have decision-making authority for the JFC, so long as any decisions are documented as provided herein.  The JFC shall have the right to make only those determinations expressly enumerated as decisions of the JFC in this Agreement; provided that such determinations are documented in the written minutes signed (or acknowledged as final via email) by the JFC Co-Chairs.  The JFC will have no power (i) to amend this Agreement or (ii) to modify either Party’s obligations with regard to this Agreement.  The representatives of the JFC shall attempt in good faith to reach consensus on all matters properly brought before the JFC.  If, after a good faith, reasonable and open discussion among the members of the JFC, the JFC is unable to agree on a matter that has been properly before it for a period of ten (10) Business Days and that calls for a decision, either Party may refer the dispute (a “JFC Dispute”) to the JEC for resolution.  If the JEC is unable to reach a resolution within [***] of the referral of the JFC Dispute to the JEC, either Party may refer such JFC Dispute to the Executive Officers for resolution.  If the Executive Officers are unable to reach a resolution within [***] of such referral then the JFC Dispute shall be resolved through arbitration as provided for in Article 15.

9.7Procedures For Development Cost Reporting and Reconciliation: Collaboration Studies and Independent Studies.

(a)Subject to Section 6.4, Development Costs initially shall be borne by the Party incurring the Development Cost, subject to reimbursement as provided in this Section 9.7.  Each Party shall calculate and maintain records of Development Costs incurred by it and its Affiliates in accordance with procedures to be established by the JFC and approved by the JDC.  The procedures for quarterly information sharing, reporting of actual results, quarterly reconciliation, reasonable cost forecasting, and other finance and accounting matters related to Development Costs for Collaboration Studies will be determined by the JFC (the “Development Cost Reconciliation Procedures”).  The Development Cost Reconciliation Procedures will enable each Party to achieve and maintain Finance and Accounting Compliance.  With respect to each Collaboration Study, each Party shall provide to the other Party, within [***] of the end of each Calendar Quarter, the estimated Collaboration Study Development Costs incurred in accordance with U.S. GAAP during such Calendar Quarter by such Party.  A final report of actual Collaboration Study Development Costs incurred in accordance with U.S. GAAP during such Calendar Quarter by such Party will be provided within [***] of the end of each Calendar Quarter.  Such report shall specify in reasonable detail all expenses included in such Collaboration Study Development Costs during such Calendar Quarter.  Within [***] of the end of each Calendar Quarter, or for the last Calendar Quarter in a Calendar Year, within [***] of the end of such Calendar Year, amounts for Collaboration Study Development Costs will be billed to the Party that has paid less than its share of such Collaboration Study Development Costs and such Party

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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shall make a reconciling payment to the other Party to achieve the applicable sharing of such Collaboration Study Development Costs.  If reasonably requested by the other Party, each Party shall make every reasonable attempt to accommodate the request and provide copies of any applicable invoices that individually exceed [***].

(b)Within [***] following the receipt of such report, unless a different timeframe is mutually agreed to by the JFC Co-Chairs, each Party shall have the right to request reasonable additional information related to the other Party’s, its Affiliates’, and Third Party Collaborators’ Collaboration Study Development Costs during such Calendar Quarter in order to confirm that such other Party’s spending is in conformance with the Development Budget and this Agreement.  Upon a receipt of a request for additional information, the Party receiving such request shall attempt to comply with the request for additional information as quickly as practicable.

(c)The Parties shall use [***] to discuss and resolve any disputed amounts with respect to Collaboration Study Development Costs incurred or accrued by a Party within [***], unless a different timeframe is mutually agreed to by the JFC Co-Chairs, following the receipt by each Party of the other Party’s report under this Section 9.7.

(d)Notwithstanding the foregoing, on a Calendar Year basis, the Parties shall not share or reimburse any Collaboration Study Development Costs (other than Clinical Manufacturing Costs, which shall not be capped by this Section 9.7(d)) in excess of the amounts allocated for such Calendar Year in the Development Budget and each Party will be solely responsible for such Collaboration Study Development Costs it incurs in excess of the amounts set forth in the Development Budget; provided, however, that Collaboration Study Development Costs in excess of the Development Budget shall be included in the calculation of Collaboration Study Development Costs to be shared by the Parties if [***].  

(e)Nektar’s share of Collaboration Study Development Costs that it is responsible for under the Joint Development Plan is subject further to the Development Cost Cap and limitations set forth in Section 6.4, and any payments required of Nektar or BMS (as applicable) shall be adjusted to account for the Development Cost Cap and the reimbursement thereof to BMS in accordance with Article 6.

(f)The procedures for annual reporting of actual results, annual review and discussion of potential discrepancies, annual reconciliation, cost forecasting, and other finance and accounting matters related to Opt-Out Development Costs will be determined by the JFC (the “Opt-Out Development Cost Reconciliation Procedures”).  The Opt-Out Development Cost Reconciliation Procedures will provide enough information (subject to Third Party confidentiality restrictions, if any) to enable the non-funding Party to comply with financial reporting requirements under Applicable Law.  In any event, each Party shall submit to the JFC by [***], a report (in an Independent Study-by-Independent Study format), in such reasonable detail and format as is established by the JFC, of all Opt-Out Development Costs incurred by such Party during such Calendar Year and the full budget, remaining amount of budget, and forecasted costs for the following Calendar Year associated with each such Independent Study.  Within [***]

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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following the receipt of such report, unless a different timeframe is mutually agreed to by the JFC Co-Chairs, each Party shall have the right to request reasonable additional information related to the other Party’s and its Affiliates’ Opt-Out Development Costs during such Calendar Year. The JFC shall establish (subject to the Parties’ mutual agreement with respect thereto) additional reasonable procedures for the Parties to share estimated Opt-Out Development Costs for each Calendar Quarter prior to the end of such Calendar Quarter, to enable each Party to appropriately review, account for and/or disclose its potential future obligation of Opt-Out Development Costs for financial reporting purposes.

9.8Certain Tax Matters. The Parties intend that the arrangements between the Parties hereunder shall be treated as a partnership for U.S. federal and state income tax purposes only.  As soon as practicable after the Effective Date but no later than [***], the Parties shall enter into a separate agreement that will cover tax matters (the “Tax Matters Agreement”) including provisions designating the tax representative for the partnership, governing the preparation and filing of tax returns, review of the tax returns, the Parties rights and obligations under audit and contest, document retention and other items that are customarily covered by an agreement of this type.

9.9Currency of Payments; Payment Method.  Except as otherwise provided in this Agreement, all amounts owed by a Party under this Agreement shall be paid by such Party via electronic funds transmission of immediately available funds in U.S. dollars to the account designated in writing to such Party by the other Party.  Conversion of amounts recorded in a currency other than U.S. dollars shall be performed in a manner consistent with each Party’s normal practices used to prepare its audited financial statements for internal and external reporting purposes.  All payments by one Party to another Party under this Agreement shall be paid by electronic funds transmission.  Each Party shall provide payment method information to the JFC.  

9.10Interest on Late Payments.  Any undisputed payments or portions thereof that are not paid on the date such payments are due, as provided in this Agreement, shall bear interest at the rate of [***] in which such payments are overdue, or [***], if less, in each case calculated on the number of days such payment is delinquent, compounded monthly.

9.11Withholding of Taxes.  BMS agrees that the initial payment set forth in Section 9.1(a), all Development Milestone Payments and all Commercial Milestone Payments set forth in Section 9.2 and Section 9.3, and all other payments to Nektar under this Agreement, shall be paid from a United States domiciled entity for tax purposes; provided, however, that if any such payments are to be made from an entity domiciled outside of the United States, BMS must provide Nektar with notice at least [***] in advance of such payment to enable Nektar to meet requirements under Applicable Law and IRS Form 8802.  Without modifying the preceding sentence, any withholding of taxes levied by tax authorities on the payments by BMS to Nektar hereunder that are required by Applicable Law to be deducted from such payments to Nektar will be deducted by BMS from the sums otherwise payable by it hereunder for payment to the proper tax authorities on behalf of Nektar, and BMS will pay the taxes to the proper taxing authority and send evidence of the obligation together with proof of tax payment to Nektar on a timely basis following that tax

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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payment.  Such taxes will be borne by Nektar.  BMS agrees to reasonably cooperate with Nektar in the event Nektar claims exemption from such withholding or seeks refunds or deductions under any double taxation or other treaty or agreement from time to time in force, such cooperation to include providing receipts of payment of such withheld tax or other documents reasonably available to BMS.  

9.12Indirect Taxes.  The Parties shall discuss applicable mechanisms for minimizing such taxes to the extent possible in compliance with Applicable Law.  In addition, the Parties shall cooperate in accordance with Applicable Law to minimize indirect taxes (such as value added tax, sales tax, consumption tax and other similar taxes) in connection with this Agreement.  

9.13Financial Records.  Each Party will keep, and will cause its Affiliates and sublicensees to keep, complete, true and accurate books and records in accordance with its accounting standards, and to maintain Finance and Accounting Compliance, in relation to Development Costs, Net Product Sales and Net Profit.  Each Party will keep, and will cause its Affiliates and sublicensees to keep, such books and records for at least [***] following the Calendar Quarter to which they pertain or as otherwise required by Applicable Law.

9.14Audit.  At the request (and expense) of a Party, the other Party shall permit a nationally recognized independent certified public accountant appointed by such requesting Party and reasonably acceptable to the other Party (provided that such accountant shall not be retained or compensated on a contingency basis and shall have entered into a confidentiality agreement with the Party to be audited), at reasonable times and upon reasonable notice, to examine those records as may be reasonably necessary (as determined by the auditor) to determine, with respect to any Calendar Year ending not more than [***] prior to a Party’s request, the accuracy, correctness or completeness of any Development Costs for Collaboration Studies (including, for clarity, Opt-Out Development Costs reimbursed by the applicable Party pursuant to Section 7.4), Net Product Sales, and Allowable Commercialization Expenses.  The foregoing right of review may be exercised [***] per year and [***] with respect to each such periodic report and payment.  The Party requesting the audit shall submit an audit plan, including audit scope, to the Party to be audited for such audited Party’s approval, which shall not be unreasonably withheld or delayed, prior to audit implementation.  The auditor shall keep confidential any information obtained during such inspection and shall report to the requesting Party and the audited Party only the amounts of such Development Costs, Net Product Sales, and Allowable Commercialization Expenses.  If it is determined that additional payments are owed or due during such period, the audited Party will pay the requesting Party (with interest subject to Section 9.10) the additional payments, or the requesting Party will pay (with interest subject to Section 9.10) the audited Party the overpaid amounts within [***] of the date the auditor’s written report is received by the Party that requested the audit.  The fees charged by the auditor will be paid by the Party requesting the audit unless such inspection reveals any unfavorable variance for the audited period of [***] or more, in which case the audited Party will pay the reasonable fees of the auditor.  Once a Party has conducted a review and audit of the other Party pursuant to this Section 9.14 in respect of any given period, it may not subsequently re-inspect the other Party’s or its Affiliates’ records in respect of such period,

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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unless a subsequent audit of a separate reporting period uncovers fraud on the part of the audited Party that is reasonably expected to have been occurring during the prior audited period.

9.15[***].

Article 10

GLOBAL REGULATORY  

10.1Regulatory Approvals.

(a)INDs.  Nektar, as the sponsor of record of each Nektar IND, shall prepare, file, maintain and solely own all Regulatory Documentation associated with each Nektar IND.  The Party who is designated to be Lead Party, as the sponsor of record of the Combined Therapy Collaboration IND shall prepare, file, maintain and solely own all Regulatory Documentation (including the applicable Combined Therapy Collaboration IND) associated with the Combined Therapy Collaboration IND.

(b)BLAs.  Notwithstanding either Party’s ownership of (i) a Combined Therapy Collaboration IND as set forth in Section 3.2(e) or (ii) Regulatory Documentation associated with a Combined Therapy Collaboration IND as set forth in Section 10.1(a), unless otherwise agreed by the JDC:

(i)The Lead Party shall prepare all Regulatory Documentation for the first BLA to be filed for a Product (including, for the avoidance of doubt, the first BLA for NKTR-214) in the Field using any Monotherapy or Combined Therapy (including in combination with any BMS Asset, Third Party Asset or any other Nektar Asset).  Nektar shall solely own and Nektar shall file and maintain (directly or through its designee, which may include BMS) all such Regulatory Documentation for each Regulatory Authority (i.e., for each country or region) for such first BLA to be filed for a Product (including, for the avoidance of doubt, the first BLA for NKTR-214) in the Field using any Monotherapy or Combined Therapy (including in combination with any BMS Asset, Third Party Asset or any other Nektar Asset) and all Regulatory Approvals related thereto; provided that BMS shall have the right to review and comment on all such regulatory filings;

(ii)The Lead Party (and if BMS is the Lead Party, then on behalf of Nektar) shall prepare, file and maintain all Regulatory Documentation for any supplemental BLA to be filed for a Product for any Indication in the Field using any Monotherapy or Combined Therapy (including in combination with any BMS Asset or Nektar Asset) and all Regulatory Approvals related thereto; provided that the non-Lead Party shall have the right to review and comment on all such regulatory filings; provided further that any supplemental BLA to be filed for a Product for any Indication in the Field using any Monotherapy or Combined Therapy (including in combination with any BMS

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Asset, Third Party Asset or any other Nektar Asset) shall be filed first as a supplemental BLA to the NKTR-214 BLA (or the first BLA on another Nektar Compound);

(iii)Notwithstanding Section 10.1(b)(ii), the Lead Party shall prepare all Regulatory Documentation for the first BLA to be filed for any Combined Therapy in a Collaboration Study or Independent Study that incorporates a Nektar Asset (other than NKTR-214) or BMS Asset, as the case may be, for such asset that has not achieved Regulatory Approval.  The Party that owns or controls such non-approved asset shall solely own, and shall file and maintain (directly or through its designee) all such Regulatory Documentation for such first BLA to be filed for such asset and all Regulatory Approvals related thereto; provided that both Parties shall have the right to review and comment on all such regulatory filings; and

(iv)The Parties agree that Nektar and BMS shall each have all necessary Right of Cross-Reference and other rights to support such BLA and supplemental BLA filings, including through the rights set forth in Sections 3.2(e)(ii) (Combined Therapy Collaboration IND), 4.2(b)(v), 4.2(c)(v), 10.1(c) (Right of Cross-Reference), 10.3 (Regulatory Documentation) and 10.6 (Use of Study Data). If required to support any such BLAs or supplemental BLAs, the Lead Party shall transfer any Regulatory Approvals or Regulatory Documentation Controlled by such Lead Party related to a Collaboration Study or Independent Study, but excluding, for the avoidance of doubt, any BMS Regulatory Documentation in the case of Nektar as Lead Party or any Nektar Regulatory Documentation in the case of BMS as Lead Party (except that BMS shall have or be provided with the Regulatory Documentation for Nektar Compounds and Products in instances where Nektar is the Lead Party).

(c)Right of Cross-Reference.  Without limiting each Party’s rights and obligations as set forth in Article 4 or Section 10.1, each Party, its Affiliates and Third Party Collaborators (and Third Parties engaged in an Independent Study) has an irrevocable Right of Cross-Reference to the other Party’s, its Affiliates’ and the Third Party Collaborators’ Regulatory Approvals and related filings anywhere in the world related to BMS Assets, Nektar Assets or Products used in Collaboration Studies or Independent Studies, that are Controlled by such other Party or its Affiliates, in each instance to the extent necessary for a Party in relation to, the performance of its obligations and exercise of its rights under this Agreement.  Each Party or its Affiliate in furtherance of the foregoing, shall provide a signed statement to this effect, if requested by the other Party, in accordance with 21 C.F.R. §314.50(g)(3) or the equivalent as required in any country or region of the Territory, or shall otherwise provide appropriate notification of such right of the other Party to the applicable Regulatory Authority.

10.2Regulatory Authority Inspection.  Each Party shall promptly notify the other Party in writing within one (1) Business Day of unannounced inspections by any Regulatory Authority and within two (2) Business Days of receipt of notification of an announced regulatory inspection with respect to any Nektar Compound or Product Development, Manufacture, or Commercialization.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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10.3Regulatory Documentation.  Subject to Section 10.1, (a) BMS shall retain sole and exclusive ownership of any BMS Regulatory Documentation provided to Nektar under this Agreement that is submitted with or referenced in Collaboration Study Regulatory Documentation and (b) Nektar shall retain sole and exclusive ownership of any Nektar Regulatory Documentation that is submitted with or referenced in Collaboration Study Regulatory Documentation.  This Section 10.3 is without limitation of any other disclosure obligations under this Agreement.

10.4Records.  Each Party shall maintain complete and accurate records of all work conducted with respect to the Collaboration Studies and Independent Studies and of all results, information, data, data analyses, reports, records, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences and developments made by or provided to either Party, or by the Parties together, in the course of such Party(ies)’ efforts with respect to the Collaboration Studies (including the Statistical Analysis Plan and any Bioanalysis Plan to be conducted pursuant to this Agreement) and Independent Studies (such results, information, data, data analyses, reports, case report forms, adverse event reports, trial records, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, developments, and each Protocol referred to as the “Study Data”).  Such records shall fully and properly reflect all work done and results achieved in the performance of the Collaboration Studies and Independent Studies in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes.

10.5Ownership of Study Data.  BMS shall own the Study Data to the extent that it relates exclusively to the BMS Assets (“BMS Study Data”), and Nektar shall own the Study Data to the extent that it relates exclusively to the Nektar Assets (“Nektar Study Data”).  Both Parties shall jointly own any Study Data that is generated from a Collaboration Study (“Collaboration Study Data”).  Both Parties shall jointly own any Study Data that is generated from an Independent Study (“Independent Study Data”) and that is not BMS Study Data or Nektar Study Data.  Each Party shall, and does hereby, assign, and shall cause its Affiliates to so assign, to the other Party, without additional compensation, such right, title and interest in and to any Study Data as is necessary to fully effect the foregoing, and agrees to execute all instruments as may be reasonably necessary to effect same.

10.6Use of Study Data.  

(a)Use of a Party’s Own Study Data.  Each Party may use and analyze its own Study Data for any purpose without obligation or accounting to the other.

(b)Use of Collaboration Study Data by BMS.  BMS (and its respective Affiliates), Ono, and each of their respective (sub)licensees shall have the right to use and analyze the Collaboration Study Data (i) in connection with its independent Development, Commercialization or other exploitation of the BMS Assets (alone or in combination with other compounds) and/or for inclusion in the safety database for the BMS Assets, in each case without the consent of, or any obligation to account to, Nektar, and (ii) to conduct studies with Samples pursuant to Section 11.8.  Subject to Section 11.8, the results of all such analyses or uses shall be

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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owned by BMS, including any intellectual property arising out of same, unless the Parties shall have agreed otherwise in writing.  BMS, its Affiliates, Ono and licensees shall also be entitled to use the Collaboration Study Data and Independent Study Data during and following the Term to (1) make regulatory filings and seek approvals for the BMS Assets, either alone or in combination with any Third Party Asset(s) or Nektar Assets evaluated in connection with an Collaboration Study or an Independent Study, and (2) to promote products based on, and to disseminate, the applicable Collaboration Study Data or Independent Study Data for the benefit of any BMS Asset, either alone or as part of Combined Therapy, where permitted by and in accordance with Applicable Law; provided, that nothing in the foregoing is intended or shall be construed as granting BMS any additional right or license, expressly or impliedly, to make, have made, use, sell, offer for sale, or import the Nektar Compound other than as expressly set forth in this Agreement.

(c)Use of Collaboration Study Data by Nektar.  Nektar, its Affiliates and each of its and their respective (sub)licensees shall have the right to use and analyze the Collaboration Study Data (i) in connection with its independent Development, Commercialization or other exploitation of the Nektar Assets (alone or in combination with other compounds) and/or for inclusion in the safety database for the Nektar Assets, in each case without the consent of, or any obligation to account to, BMS and (ii) to conduct studies with Samples pursuant to Section 11.8.  Subject to Section 11.8, the results of all such analyses or uses shall be owned by Nektar, including any intellectual property arising out of same, unless the Parties shall have agreed otherwise in writing.  Nektar, its Affiliates and licensees shall be entitled to use the Collaboration Study Data and Independent Study Data during and following the Term to (1) make regulatory filings and seek approvals for the Nektar Assets, either alone or in combination with other Third Party Assets or BMS Assets evaluated in connection with an Collaboration Study or an Independent Study, and (2) to promote products based on, and to disseminate, the applicable Collaboration Study Data or Independent Study Data for the benefit of the Nektar Assets, either alone or as part of a Combined Therapy, where permitted by and in accordance with Applicable Law; provided that nothing in the foregoing is intended or shall be construed as granting Nektar any right or license, expressly or impliedly, to make, have made, use, sell, offer for sale, or import the BMS Compound other than as expressly set forth in this Agreement.  

(d)Biomarker/Diagnostic Agent Development.  Each Party may use and disclose to a Third Party the Collaboration Study Data and its Single Agent Compound’s Study Data, under obligations of confidentiality consistent with this Agreement, to Develop and Commercialize a biomarker or diagnostic test for use with its Single Agent Compound and/or the Combined Therapy, and, unless otherwise mutually agreed by the Parties in writing, will own any intellectual property arising out of the work funded or conducted by it with or through such Third Party.  The Parties will discuss in good faith any opportunities to jointly participate in the Development of any such biomarker or diagnostic test for use with the Nektar Compound.

(e)No Other Uses.  All other uses of Study Data are limited solely to those permitted by this Agreement, and neither Party may use Study Data for any other purpose without the written consent of the other Party during and after the Term of this Agreement.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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10.7Access to Study Data.  Subject to the provisions of Sections 4.2(a)(x), 4.2(b)(vi), 4.2(c)(vi) and 10.8 and the Pharmacovigilance Agreement, each Party shall have access to all Study Data (including de-identified patient records) as soon as reasonably practicable after such Study Data is reasonably available to or generated by the Party responsible for generating or collecting such Study Data.

10.8Adverse Event Reporting.  Subject to the terms of this Agreement, within [***], or as soon as practicable after the Effective Date, as agreed to by the Parties and prior to dosing the first study patient in any new Clinical Trial subject to this Agreement, the Parties (under the guidance of their respective pharmacovigilance departments, or equivalent thereof) shall use diligent efforts to define and finalize the responsibilities the Parties shall employ to protect patients and promote their well-being in connection with the use of the Nektar Assets and BMS Assets in the framework of this Agreement, and to execute one or more written pharmacovigilance agreements (each, a “Pharmacovigilance Agreement”).  Such Pharmacovigilance Agreement shall include mutually acceptable guidelines and procedures for the receipt, investigation, recordation, communication, and exchange (as between the Parties) of adverse event reports, pregnancy reports, and any other information concerning the safety of the Nektar Assets and BMS Assets.  Such guidelines and procedures shall be in accordance with, and enable the Parties and their Affiliates to fulfill, local and international regulatory reporting obligations to government authorities.  Furthermore, such agreed procedures shall be consistent with relevant International Council for Harmonization (ICH) guidelines, except where said guidelines may conflict with existing local regulatory safety reporting requirements or Applicable Law, in which case local reporting requirements or Applicable Law shall prevail.  Until such guidelines and procedures are set forth in the Pharmacovigilance Agreement, the Party responsible for pharmacovigilance prior to the Effective Date shall have sole pharmacovigilance responsibility for the Party’s Single Agent Compound subject to all applicable regulations and guidelines.  To the extent any provision set forth in the Pharmacovigilance Agreement conflicts with any provision in this Agreement, the provision set forth in the Pharmacovigilance Agreement shall control as related to the exchange and reporting of safety information associated with use of the Nektar Asset and BMS Assets pursuant to this Agreement as well as product safety surveillance.  The Pharmacovigilance Agreement can be amended from time to time.  In the event that this Agreement is terminated, the Parties agree to implement the necessary procedures and practices to ensure that any outstanding pharmacovigilance reporting obligations are fulfilled. 

 

Article 11

INTELLECTUAL PROPERTY  

11.1Nektar Grants.  

(a)Development License.  Subject to the terms and conditions of this Agreement, Nektar hereby grants, and shall cause its Affiliates to grant, to BMS (and BMS hereby

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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accepts) a non-exclusive, worldwide, non-transferable (except as provided in Section 17.12), royalty-free license (with the right to sublicense solely pursuant to the terms of and subject to the limitations of Section 11.3) under (i) the Nektar Asset Patent Rights, (ii) Nektar Background Patent Rights, (iii) Nektar Technology, and (iv) Nektar Regulatory Documentation, in each case in respect of clauses (i)-(iv), solely to use, Develop and have Developed the Nektar Compounds and Products, other Nektar Assets that Nektar makes available to BMS in accordance with this Agreement, in Monotherapies (but only Nektar Compounds and Products) and Combined Therapies, in the Field in the Territory, in each case solely to the extent necessary to discharge BMS’s obligations under this Agreement and exercise its rights with respect to the Development of the Nektar Compound and the Product (including the conduct of the Collaboration Studies, Independent Studies and the activities described in Section 3.9).

(b)Commercialization License.  Subject to the terms and conditions of this Agreement, Nektar hereby grants, and shall cause its Affiliates to grant, to BMS (and BMS hereby accepts) a co-exclusive (with Nektar), worldwide, non-transferable (except as provided in Section 17.12), royalty-free (with the right to sublicense solely pursuant to the terms of and subject to the limitations of Section 11.3) license under Nektar Asset Patent Rights, Nektar Background Patent Rights, Nektar Technology, and Nektar Regulatory Documentation, in each case in respect of the foregoing, solely:

(i)to Commercialize (but not to sell, offer for sale, have sold, or offer to have sold) the Nektar Compounds and Products, in Monotherapies and Combined Therapies, in the Field and in the Territory; and

(ii)from and after the date and to the extent that Nektar is not (by itself or through an Affiliate, or through a Third Party acting as an agent of or on Nektar’s behalf) selling or offering for sale any Nektar Compound or Products (whether by operation of law or because Nektar has notified the JCC that it has elected not to sell or offer to sell) to Commercialize (including to sell, offer for sale, have sold, or offer to have sold) the Nektar Compounds and Products, in Monotherapies (but only Nektar Compounds and Products) and Combined Therapies, in the Field and in the Territory.  

(c)Manufacturing License.  Subject to the terms and conditions of this Agreement and solely if BMS exercises the Manufacturing Option, Nektar hereby grants, and shall cause its Affiliates to grant, to BMS (and BMS hereby accepts) a co-exclusive (with Nektar), worldwide, non-transferable (except as provided in Section 17.12), royalty-free license (with the right to sublicense solely pursuant to the terms of and subject to the limitations of Section 11.3) under the Nektar Asset Patent Rights, Nektar Background Patent Rights, Nektar Manufacturing Know-How, Nektar Manufacturing Process, Nektar Technology, and Nektar Regulatory Documentation to make, have made and otherwise Manufacture NKTR-214, solely for use in Collaboration Studies or Independent Studies (by either Party), GLP toxicology studies, activities permitted by Section 3.9, and for Commercialization of the Nektar Compound or Product in Monotherapies and Combined Therapies in the Field and in the Territory.  

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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11.2BMS Grants.  

(a)Development License.  Subject to the terms and conditions of this Agreement, BMS hereby grants, and shall cause its Affiliates to grant, to Nektar (and Nektar hereby accepts) a non-exclusive, worldwide, non-transferable (except as provided in Section 17.12), royalty-free license (with the right to sublicense solely pursuant to the terms of and subject to the limitations of Section 11.3) under (i) BMS Asset Patent Rights, (ii) BMS Background Patent Rights, (iii) BMS Technology, and (iv) BMS Regulatory Documentation, in each case in respect of clauses (i)-(iv), solely to use, Develop and have Developed BMS Assets in combination with Nektar Assets and/or Nektar Compounds and Product (as part of a Combined Therapy), whether with or without Third Party Assets, in the Field in the Territory, in each case solely to the extent necessary to discharge Nektar’s obligations and exercise its rights under this Agreement with respect to the conduct of the Collaboration Studies, Independent Studies and the activities described in Section 3.9.

(b)Commercialization License.  Subject to the terms and conditions of this Agreement, BMS hereby grants, and shall cause its Affiliates to grant, to Nektar (and Nektar hereby accepts) a non-exclusive, worldwide, non-transferable (except as provided in Section 17.12), royalty-free (with the right to sublicense solely pursuant to the terms of and subject to the limitations of Section 11.3) license under BMS Asset Patent Rights, BMS Background Patent Rights, BMS Technology, and BMS Regulatory Documentation, in each case in respect of the foregoing, solely to Commercialize (but not to do any of the following: obtain pricing or reimbursement approvals; sell; offer for sale; have sold; or offer to have sold) the Nektar Compounds and Products, in Monotherapies (but only Nektar Compounds and Products) and Combined Therapies, in the Field and in the Territory.

11.3Sublicensing.  

(a)Development Sublicensing.  Subject to Section 11.3(b) and Section 11.3(c), each Party shall have the right to grant sublicenses under the licenses granted to it under Sections 11.1(a) and 11.2(a) to Affiliates, and, if required for a Third Party to perform such Party’s duties with respect to the Development of the Nektar Compound and the Product (including the conduct of the Collaboration Studies or Independent Studies (and agreed to by the other Party, such consent not to be unreasonably withheld)), to Third Parties, solely as necessary to assist a Party in carrying out its responsibilities and exercising its rights hereunder.  Nektar hereby consents to a sublicense to Ono as set out in Section 11.3(b).

(b)Ono Sublicensing.  BMS (or any of its sublicensees) shall have the right to grant to Ono and its Affiliates a sublicense under the license granted to BMS in Section 11.1 solely to the extent necessary or reasonably useful for the Development and Commercialization of the Nektar Compounds, Products (whether alone or as part of a Nektar Combination or a BMS Combination), BMS Assets (to the extent they are part of a BMS Combination) and Nektar Combinations in the Field in the BMS/Ono Territory in accordance with this Agreement.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(c)With regard to any such sublicenses permitted and made under this Agreement, (i) such sublicensees, except to Affiliates (so long as they remain Affiliates of a Party), shall be subject to written agreements that bind such sublicensees to obligations that are consistent with a Party’s obligations under this Agreement, including confidentiality and non-use provisions no less restrictive than those set forth in Sections 10.5 and 10.6 and Article 12, and provisions regarding intellectual property that ensure that the Parties will have the rights, title, and interest provided under this Agreement to any intellectual property created by such sublicensee; (ii) each Party shall provide written notice to the other of any such sublicense and obtain approval for sublicenses to Third Parties, it hereby being understood that Nektar hereby grants approval with respect to Ono; and (iii) the licensing Party shall remain liable for all actions or inactions of its sublicensees.

11.4No Implied Licenses.  Except as specifically set forth in this Agreement, neither Party shall acquire any license or other intellectual property interest, by implication or otherwise, in any intellectual property of the other Party, including Confidential Information disclosed to it under this Agreement or under any Patent Rights Controlled by the other Party or its Affiliates.

11.5Inventions.  

(a)Nektar Ownership.  Subject to the terms of this Agreement, all Nektar Asset Inventions shall be owned solely by Nektar, and Nektar will have the full right to exploit such Nektar Asset Inventions without the consent of, or any obligation to account to, BMS.  BMS hereby assigns (and shall cause its Affiliates and contractors to assign) all right, title and interest in any Nektar Asset Inventions to Nektar.  The Parties shall execute any documents necessary to accomplish the foregoing assignment, and BMS shall execute such further documents and provide other assistance as may be reasonably requested by Nektar to perfect Nektar’s rights in such Nektar Asset Inventions, all at Nektar’s expense.  Nektar shall have the sole right but not the obligation to prepare, file, prosecute (including any proceedings relating to reissues, reexaminations, protests, interferences, oppositions, post-grant reviews or similar proceedings and requests for patent extensions) and maintain any Nektar Asset Patent Rights or Nektar Background Patent Rights at its own expense.

(b)BMS Ownership.  Subject to the terms of this Agreement, all BMS Asset Inventions shall be owned solely by BMS, and BMS will have the full right to exploit such BMS Asset Inventions without the consent of, or any obligation to account to, Nektar.  Nektar hereby assigns (and shall cause its Affiliates and contractors to assign) all right, title and interest in any BMS Asset Inventions to BMS.  The Parties shall execute any documents necessary to accomplish the foregoing assignment, and Nektar shall execute such further documents and provide other assistance as may be reasonably requested by BMS to perfect BMS’s rights in such BMS Asset Inventions, all at BMS’s expense.  BMS shall have the sole right but not the obligation to prepare, file, prosecute (including any proceedings relating to reissues, reexaminations, protests, interferences, oppositions, post-grant reviews or similar proceedings and requests for patent extensions) and maintain any BMS Asset Patent Rights or BMS Background Patent Rights at its own expense.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(c)Joint Collaboration Inventions.  

(i)Subject to the terms of this Agreement (including Section 7.3(d)), all Joint Collaboration Inventions shall be jointly owned by the Parties, and either Party shall have the right to freely exploit the Joint Collaboration Inventions and Joint Collaboration Patent Rights, both within and outside the scope of this Agreement, without accounting or any other obligation to the other Party (except as expressly set forth in Section 11.5(c)(ii) and Sections 11.5(f) and 11.6(d) with regard to the filing, prosecution, maintenance and enforcement of Joint Collaboration Patent Rights) and each Party may use, and exploit its interest in such Joint Collaborations Inventions and Joint Collaboration Patent Rights as permitted under this Agreement; provided that neither Party shall be entitled to grant, without the other Party’s prior written consent, any Commercialization (and Manufacturing for Commercialization purposes) licenses to any Third Party under those Joint Collaboration Inventions and Joint Collaboration Patent Rights (except in the case of BMS, to Ono in the manner set forth in Section 11.3(b)).  The Parties shall execute any documents necessary to accomplish the foregoing assignment, and each Party shall execute such further documents and provide other assistance as may be reasonably requested by the other Party to perfect such other Party’s rights in such Joint Collaboration Inventions, at the requesting Party’s expense.  To be clear, nothing in this Section 11.5(c) is granting any ownership or license rights with respect to underlying Nektar Assets or BMS Assets (as the case may be).  

(ii)Any consideration received by a Party (including any Affiliate) from any sublicensee of the Joint Collaboration Inventions and Joint Collaboration Patent Rights for the sale, license, disposition or other transfer of the applicable Party’s right, title and interest in and to such Joint Collaboration Inventions or Joint Collaboration Patent Rights shall be shared by the Parties in accordance with their respective economic interest.

(d)Joint Third Party Inventions.  

(i)Subject to the terms of this Agreement (including Section 7.3(d)), all Joint Third Party Inventions shall be jointly owned by the Parties and the Third Party in the applicable Independent Study, but solely if such Third Party is an inventor party, and either Party shall have the right to freely exploit the Joint Third Party Inventions and Joint Third Party Patent Rights, both within and outside the scope of this Agreement, without accounting or any other obligation to the other Party (except as expressly set forth in Section 11.5(d)(ii) and Sections 11.5(f) and 11.6(d) with regard to the filing, prosecution, maintenance and enforcement of Joint Third Party Patent Rights) and each Party may use, exploit its interest in such Joint Third Party Inventions and Joint Third Party Patent Rights as permitted under this Agreement; provided that neither Party shall be entitled to grant, without the other Party’s prior written consent, any Commercialization (and Manufacturing for Commercialization purposes) licenses to any Third Party under those Joint Collaboration Inventions and Joint Collaboration Patent Rights (except in the case of BMS, to Ono in the manner set forth in Section 11.3(b)).  The Parties shall execute any documents

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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necessary to accomplish the foregoing assignment, and each Party shall execute such further documents and provide other assistance as may be reasonably requested by the other Party to perfect such other Party’s rights in such Joint Collaboration Inventions, at the requesting Party’s expense.  To be clear, nothing in this Section 11.5(d) is granting any ownership or license rights with respect to underlying Nektar Assets, BMS Assets or Third Party Assets (as the case may be) to any of the Parties or the applicable Third Party.

(ii)Any consideration received by a Party (including any Affiliate) from any sublicensee of the Joint Collaboration Inventions and Joint Collaboration Patent Rights for the sale, license, disposition or other transfer of the applicable Party’s right, title and interest in and to such Joint Collaboration Inventions or Joint Collaboration Patent Rights shall be shared by the Parties in accordance with their respective economic interest.

(e)Involvement of Third Parties.

(i)For Profit Entities. Neither Party shall, in relation to any Collaboration Study or Independent Study, enter into any agreement with any for-profit Third Party that does not provide for, or in any way prevents, the ownership of Nektar Asset Inventions, BMS Asset Inventions, Joint Collaboration Inventions, or Joint Third Party Inventions as set forth in Sections 11.5(a), 11.5(b), 11.5(c) and 11.5(d) respectively.

(ii)Not For Profit Entities. Neither Party shall, in relation to any Independent Study, enter into any agreement with any not-for-profit Third Party (including academic institutions) that either (A) does not provide for, or in any way prevents, the ownership of BMS Asset Inventions as set forth in Section 11.5(b), Nektar Asset Inventions as set forth in Section 11.5(a), the Joint Collaboration Inventions as set forth in Section 11.5(c), Joint Third Party Inventions as set forth in Section 11.5(d), as applicable, or (B) does not at least provide the other Party with a non-exclusive, perpetual, irrevocable, worldwide, fully paid-up, royalty-free, sublicensable and transferable (sub)license to the applicable BMS Inventions, Nektar Inventions, Joint Collaboration Inventions, Joint Third Party Inventions, as applicable.

(f)Prosecution of Joint Collaboration Inventions.  The Parties, using outside patent counsel acceptable to both Parties, shall be responsible for preparing and prosecuting the Joint Collaboration Patent Rights.  Each Party shall keep the other Party advised as to material developments and all steps to be taken with respect to any such Joint Collaboration Patent Rights and shall furnish the other Party with copies of applications for such Patent Rights, amendments thereto and other related correspondence to and from patent offices, and shall permit the other Party a reasonable opportunity to review and offer comments. The Parties shall reasonably assist and cooperate with one another in obtaining, prosecuting and maintaining the Joint Collaboration Patent Rights.  Notwithstanding the foregoing, neither Party shall take any position in a submission to a patent office that interprets the scope of any Patent Rights of BMS without the prior consent of BMS or any Patent Rights of Nektar without the prior written consent of Nektar. Nektar and BMS shall be reimbursed for any out of pocket costs and Third Party costs and expenses incurred

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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in preparing and prosecuting the Joint Collaboration Patent Rights and the subsequent maintenance of the Joint Collaboration Patent Rights such that [***].  Nektar will report all such costs and expenses in accordance with Section 9.7.  

(i)Abandonment of Patent Rights.  In the event that a Party determines either (A) not to continue the prosecution or maintenance of a Patent Right within the Joint Collaboration Patent Rights or (B) not to file any new patent application requested to be filed by the other Party, in each case other than to optimize overall patent protection of claimed inventions, the applicable Party shall provide the other Party with notice of its decision at least [***] prior to any pending lapse or abandonment thereof.  In such event, the applicable Party shall provide the other Party with an opportunity to assume responsibility for all costs associated with the filing or further prosecution and maintenance of such Patent Rights (such filing to occur prior to the issuance of the Patent Rights to which the application claims priority or expiration of the applicable filing deadline, as set forth above). Such Patent Rights shall otherwise continue to be subject to all of the terms and conditions of this Agreement in the same manner and to the same extent as the other Patent Rights within the Joint Collaboration Patent Rights.

(ii)Failure to Reimburse.  If a Party elects not to reimburse the other Party for the costs of prosecution and maintenance of a Patent Right within the Joint Collaboration Patent Rights in a given country as set forth in this Section 11.5(f), the non-reimbursed Party shall have the right to file or maintain such Patent Right in such country in its own name and at its own expense, with the prior written consent of the other Party (which shall not be unreasonably withheld) and the other Party does hereby assign its rights to the joint invention in said country to the non-reimbursed Party if the non-reimbursed Party wishes to file or maintain said Patent Right, and each Party shall execute such further documents and provide other assistance as may be reasonably requested by the other Party to perfect such other Party’s rights in the applicable Patent Rights, at the requesting Party’s expense.  After giving effect to such assignment, such assigned invention and any corresponding Joint Collaboration Patent Rights thereto shall be the treated as a Nektar Background Patent Rights or BMS Background Patent Rights, as applicable.  The Party who does not wish to file or maintain a Patent Right within the Joint Collaboration Patent Rights in any country shall assist in the timely provision of all documents required under national provisions to register said assignment of rights with the corresponding national authorities at the sole expense of the Party who wished to file or maintain such Patent Right in that given country.  

(g)Prosecution of Joint Third Party Inventions.  The Parties shall, using outside patent counsel acceptable to both Parties and the applicable Third Party (if such Third party is an inventor in respect of such Joint Third Party Invention), be responsible for preparing and prosecuting and maintaining Patent Rights related to Joint Third Party Inventions, in accordance with the terms and conditions of Section 11.5(f), provided that Nektar and BMS bear any out of pocket costs and expenses incurred in preparing and prosecuting the applicable Joint Third Party Patent Rights pursuant to this Section 11.5(g) and the subsequent maintenance of the applicable

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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Joint Third Party Patent Rights that are not borne by the applicable Third Party joint owner such that [***].

(h)Separation of Patent Rights.  In order to more efficiently enable the prosecution and maintenance of the BMS Asset Patent Rights, Nektar Asset Patent Rights, Joint Collaboration Patent Rights and Joint Third Party Patent Rights relating to Nektar Asset Inventions, BMS Asset Inventions, Joint Collaboration Inventions and Joint Third Party Inventions as described above, the Parties will use good faith efforts to separate BMS Asset Patent Rights, Nektar Asset Patent Rights, Joint Collaboration Patent Rights and Joint Third Party Patent Rights) into separate patent filings to the extent possible and without adversely impacting such prosecution and maintenance.

(i)Disclosure and Assignment of Joint Collaboration Inventions and Joint Third Party Inventions.  Each Party shall disclose promptly to the other Party in writing and on a confidential basis all Joint Collaboration Inventions and Joint Third Party Inventions prior to any public disclosure or filing of Patent Rights and allowing sufficient time for comment by the other Party.  In addition, each Party does hereby assign, and shall cause its Affiliates and contractors to so assign, to the other Party, without additional compensation, such right, title and interest in and to any Joint Collaboration Inventions or Joint Third Party Inventions as well as any intellectual property rights with respect thereto, as is necessary to fully effect, as applicable, the sole ownership provided for in Sections 11.5(a) and 11.5(b) and the joint ownership provided for in Sections 11.5(c) and 11.5(d).

11.6Infringement of Patent Rights by Third Parties.  

(a)Notice.  Each Party shall promptly notify the other Party in writing of any alleged or threatened (in writing) infringement, or misappropriation by a Third Party, of the BMS Background Patent Rights, BMS Asset Patent Rights, Nektar Background Patent Rights, Nektar Asset Patent Rights, Joint Collaboration Patent Rights or Joint Third Party Patent Rights of which its in-house patent counsel becomes aware (such infringement, “Infringement,” and “Infringe” shall be interpreted accordingly).

(b)Infringement of Patent Rights of Nektar.  

(i)With respect to Infringement of Nektar Asset Patent Rights or Nektar Background Patent Rights anywhere in the world, in each case to the extent that it relates to any Nektar Asset (other than a Nektar Compound or Product, and not in combination with a Nektar Compound or Product), Nektar shall have the exclusive right to prosecute such Infringement as it may determine in its sole and absolute discretion, and Nektar shall bear all related expenses and retain all related recoveries.  BMS shall reasonably cooperate with Nektar or its designee (to the extent BMS has relevant information arising out of this Agreement), at Nektar’s request and expense, in any such action.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(ii)Notwithstanding any right of enforcement (including subsidiary rights or step-in rights) of any Nektar Asset Patent Rights or Nektar Background Patent Rights that [***].  With respect to Infringement of Nektar Asset Patent Rights or Nektar Background Patent Rights anywhere in the world, in each case to the extent that it relates to any Nektar Compound or Product (whether as Monotherapy or as part of a Combined Therapy), [***].  If either Party recovers monetary damages from any Third Party in an action approved by the Parties and brought under this Section 11.6(b)(ii), such recovery shall be allocated first to the reimbursement of any actual, unreimbursed costs and expenses incurred by the Parties in such litigation (including, for this purpose, a reasonable allocation of expenses of internal counsel), then [***], and any remaining amounts shall be split [***], unless the Parties agree in writing to a different allocation and provided that [***].  In connection with any proceeding under this Section 11.6(b)(ii), [***].  In the event that Nektar elects not to prosecute an Infringement under this Section 11.6(b)(ii), Nektar shall inform BMS [***]; provided however, that Nektar has the ultimate right, at its sole discretion, to determine whether or not an Infringement may be prosecuted.

(c)Infringement of Patent Rights of BMS.  With respect to Infringement of BMS Asset Patent Rights or BMS Background Patent Rights anywhere in the world, BMS shall have the exclusive right to prosecute such Infringement as it may determine in its sole and absolute discretion, and BMS shall bear all related expenses and retain all related recoveries.  Nektar shall reasonably cooperate with BMS or its designee (to the extent Nektar has relevant information arising out of this Agreement), at BMS’s request and expense, in any such action.

(d)Infringement of Joint Collaboration Patent Rights.

(i)With respect to Infringement of Joint Collaboration Patent Rights, [***].  

(ii)Regardless of which Party brings an enforcement action pursuant to Section 11.6(d)(i), the other Party hereby agrees to cooperate reasonably in any such action, including, if required, by bringing a legal action.  [***].  If either Party recovers monetary damages from any Third Party in an action approved by the Parties and brought under this Section 11.6(d)(ii), such recovery shall be allocated [***], unless the Parties agree in writing to a different allocation.  In connection with any proceeding under this Section 11.6(d), neither Party shall enter into any settlement without the prior written consent of the other Party.

(e)Infringement of Joint Third Party Patent Rights.  Section 11.6(d) shall apply mutatis mutandis to the enforcement of Joint Third Party Patent Rights, subject to the agreed cost and recoveries sharing with any Third Party co-owner, if applicable.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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11.7Infringement of Third Party Rights.  

(a)Notice.  If the activities relating to the Development or Commercialization of the Nektar Compound or Product become the subject of a claim of infringement of a patent, copyright or other proprietary right by a Third Party anywhere in the world, the Party first having notice of the claim shall promptly notify the other Party and, without regard to which Party is charged with said infringement and the venue of such claim, the Parties shall promptly confer to discuss the claim.

(b)Defense.  If both Parties are charged with infringement pursuant to a claim described in Section 11.7(a), [***], unless they agree otherwise.  If only one Party is charged with infringement, such Party will have the first right but not the obligation to defend such claim.  If the charged Party does not commence actions to defend such claim [***].  In any event, the non-defending Party shall reasonably cooperate with the Party conducting the defense of the claim and shall have the right to participate with separate counsel at its own expense, and the defending Party shall consider comments by the non-defending Party in good faith.  The Party defending the claim shall bear the cost and expenses of the defense of any such Third Party infringement claim and shall have sole rights to any recovery.  If the Parties jointly defend the claim, and [***]; provided, however, that, notwithstanding the foregoing, [***].  If either Party recovers monetary damages or costs from any Third Party while jointly defending the claim, such recovery shall be allocated [***], unless the Parties agree in writing to a different allocation.  Neither Party shall enter into any settlement concerning activities under this Agreement or the Monotherapy or Combined Therapy that affects the other Party’s rights under this Agreement or imposes any obligations on the other Party, including any admissions of wrongdoing on behalf of the other Party, without such other Party’s prior written consent, not to be unreasonably withheld or delayed, except that a Party may settle any claim that solely relates to its Single Agent Compound (other than a Nektar Compound) without the consent of the other Party as long as such other Party’s rights under this Agreement are not adversely impacted (in which case, it will obtain such other Party’s prior written consent, not to be unreasonably withheld or delayed).

11.8Samples.  Samples collected in the course of activities conducted under a Collaboration Study shall be jointly owned by the Parties (to the extent not owned by the patient and/or the clinical trial site).  Any such Samples shall be collected in accordance with the applicable Protocol and ICFs.  Neither Party shall be permitted to use such Samples for any purpose without the prior written consent of the other Party, which consent shall not be unreasonably withheld if such use is directed to the Monotherapy or Combined Therapy and with the terms of such use to be set forth in a written agreement between the Parties setting forth the Samples to be used, and any appropriate terms/restrictions on such use.  Any data and intellectual property arising out of such Sample use shall be owned by the Lead Party conducting such study using the same; provided that to the extent that any such data or intellectual property relates solely to the Combined Therapy (or biomarkers solely for use with the Combined Therapy), such data or intellectual property shall be considered Collaboration Study Data or Joint Collaboration Inventions/Joint Collaboration Patent Rights, as the case may be.  Samples for PK and ADA serum analysis will be stored for future use in the Lead Party’s sample repository, at its own expense;

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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provided that if the Party holding the Samples determines that it no longer has a use for the Samples and the other Party determines that it does, then the Samples shall, subject to Applicable Law and the terms of the signed ICFs, be transferred to the other Party and may be used solely thereafter by the other Party.  If neither Party has any further use for the Samples, then the remaining Samples will be destroyed pursuant to the respective Party’s standard operating procedures for sample retention and destruction, subject to the terms of and permission(s) granted in the ICFs by the subjects contributing the Samples in the Collaboration Studies.  All Development Costs for collecting, testing and storing the Samples will be split between the Parties in accordance with Section 9.7, except as otherwise noted in this Section 11.8.

 

Article 12

CONFIDENTIALITY

12.1Nondisclosure and Nonuse of Confidential Information.  

(a)Except to the extent expressly authorized in this Section 12.1 and Sections 12.2, 12.3 and 12.5 below, or as otherwise agreed in writing by the Parties, each Party agrees that, for the Term and for a period of [***] thereafter, it shall: (i) keep confidential and shall not publish or otherwise disclose and shall not use for any purpose other than as expressly provided for in this Agreement any Confidential Information owned by the other Party; (ii) treat the other Party’s Confidential Information with the same degree of care the receiving Party uses for its own confidential information but in no event with less than a reasonable degree of care; and (iii) reproduce the disclosing Party’s Confidential Information solely to the extent necessary to accomplish the receiving Party’s obligations under this Agreement, with all such reproductions being considered the disclosing Party’s Confidential Information; provided, that with respect to BMS Confidential Information that BMS received as confidential information from Ono and has identified as such to Nektar, the obligations of confidentiality and non-use shall continue for the longer of the period set forth above or five (5) years after the termination of the Ono-BMS Agreements.

(b)For purposes of this Agreement, regardless of which Party discloses such Confidential Information to the other, (i) all Nektar Asset Inventions, Nektar Technology and Nektar Regulatory Documentation shall be Confidential Information of Nektar, and BMS shall be deemed the receiving Party; (ii) all BMS Asset Inventions, BMS Technology and BMS Regulatory Documentation shall be Confidential Information of BMS, and Nektar shall be deemed the receiving Party; (iii) inventions from Independent Studies (other than as noted in clause (iv)) shall be the Confidential Information of the Party(ies) owning such Study Data or inventions; and (iv) all Joint Collaboration Inventions, Collaboration Study Data, Joint Third Party Invention, Independent Study Data and Collaboration Study Regulatory Documentation shall be Confidential Information of each Party.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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(c)Notwithstanding anything to the contrary in this Section 12.1, the receiving Party may disclose the disclosing Party’s Confidential Information to its employees, consultants, agents or permitted sublicensees solely on a need-to-know basis for the purpose of fulfilling the receiving Party’s obligations under this Agreement; provided, however, that (i) any such employees, consultants, agents or permitted sublicensees are bound by obligations of confidentiality at least as restrictive as those set forth in this Agreement, and (ii) the receiving Party remains liable for the compliance of such employees, consultants, agents or permitted sublicensees with such obligations.  Each receiving Party acknowledges that in connection with its and such representatives’ examination of the Confidential Information of the disclosing Party, the receiving Party and such representatives may have access to material, non-public information, and that the receiving Party is aware, and will advise such representatives that State and Federal laws, including United States securities laws, impose restrictions on the dissemination of such information and trading in securities when in possession of such information.  Each receiving Party agrees that it will not, and will advise its representatives who are informed as to the matters that are the subject of this Agreement to not, purchase or sell any security of the disclosing Party on the basis of the Confidential Information to the extent such Confidential Information constitutes material non-public information about the disclosing Party or such security.

12.2Exceptions.  The obligations in Section 12.1 shall not apply with respect to any portion of Confidential Information that the receiving Party can demonstrate by contemporaneous tangible records or other competent proof:

(a)was already known to the receiving Party (or its Affiliates), other than under an obligation of confidentiality, either (i) at the time of disclosure by the disclosing Party, or (ii) if applicable, at the time that it was generated hereunder, whichever ((i) or (ii)) is earlier;

(b)was generally available to the public or otherwise part of the public domain either (i) at the time of its disclosure to the receiving Party, or (ii) if applicable, at the time that it was generated hereunder, whichever ((i) or (ii)) is earlier;

(c)became generally available to the public or otherwise part of the public domain after its disclosure and other than through any act or omission of the receiving Party in breach of this Agreement;

(d)was disclosed to the receiving Party (or its Affiliates), other than under an obligation of confidentiality, by a Third Party who had no obligation to the Party owning or Controlling the information not to disclose such information to others; or

(e)was independently discovered or developed by the receiving Party (or its Affiliates) without the use of or reference to the Confidential Information belonging to the disclosing Party.

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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12.3Authorized Disclosure.  Notwithstanding any other provision of this Agreement, each Party may disclose and use Confidential Information solely owned by the other Party to the extent such disclosure or use is reasonably necessary in the following instances:

(a)filing or prosecuting Patent Rights;

(b)prosecuting or defending litigation, except that a Party may not use or disclose the other Party’s Confidential Information to challenge the validity or enforceability of such other Party’s Patent Rights;

(c)complying with Applicable Law or the rules or regulations of any securities exchange on which such Party’s stock is listed;

(d)disclosure, in connection with the performance of this Agreement, to Affiliates, permitted sublicensees, contractors, ethics committees and institutional review boards (collectively, “IRBs”), CROs, academic institutions, consultants, agents, investigators, and employees and contractors engaged by study sites and investigators involved with the Collaboration Studies and Independent Studies, each of whom, prior to disclosure, must be bound by similar terms of confidentiality and non-use at least equivalent in scope to those set forth in this Article 12;

(e)disclosure that is deemed reasonably necessary by either Party to be disclosed to its respective Affiliates, agents, consultants or actual or prospective licensees (or other bona fide collaborators) in furtherance of the Development, Manufacture or Commercialization of such Party’s compound or assets, as applicable, on the condition that such Third Parties agree to be bound by confidentiality and non-use obligations that are at least equivalent in scope to those set forth in this Article 12;

(f)disclosure to its attorneys, accountants, auditors and other advisors on a need to know basis provided such individuals or Persons are bound to confidentiality and nondisclosure requirements by professional rules of conduct or nondisclosure agreements, and to actual or prospective acquirers, lenders, financers, or investors as may be necessary to comply with the terms, or in connection with their evaluation, of such potential or actual acquisition, loan, financing, or investment; on the condition that such acquires, lenders, financers, or investors agree to be bound by confidentiality and non-use obligations that are that are at least equivalent in scope to those set forth in this Article 12;

(g)disclosure of the Collaboration Study Data, Joint Collaboration Inventions, Joint Third Party Inventions, Joint Collaboration Patent Rights, Joint Third Party Patent Rights to Regulatory Authorities in connection with the Development of any Combined Therapy, any of the Nektar Assets or any of the BMS Assets; and

(h)disclosure of relevant safety information contained within Collaboration Study Data to investigators, IRBs or ethics committees and Regulatory Authorities that are

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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involved in other Clinical Trials of the Nektar Assets with respect to Nektar, and BMS Assets with respect to BMS, and (in the event of a Material Safety Issue) to Third Parties that are collaborating with Nektar or BMS, respectively in the conduct of such other clinical trials of the Nektar Assets or the BMS Assets, in each case solely to the extent necessary for the conduct of such clinical trials or to comply with Applicable Law and regulatory requirements; and

(i)exercising its rights and performing its obligations under the Investment Agreements.

Notwithstanding the foregoing, if a Party is required or otherwise intends to make a disclosure of the other Party’s Confidential Information or any of the terms and conditions of this Agreement pursuant to Section 12.3(b) or Section 12.3(c), it shall (x) give reasonable advance notice to such other Party of such impending disclosure in order to allow such other Party to review and comment of the proposed disclosure and (y) endeavor in good faith to secure confidential treatment of such Confidential Information or reasonably assist the Party that owns such Confidential Information in seeking a protective order or other confidential treatment.  Without limiting the generality of the foregoing, the Parties shall use Commercially Reasonable Efforts to agree on the contents of any redacted version of this Agreement to be filed with any securities exchange on which a Party’s stock is listed.

12.4Disclosure to Ono.  Notwithstanding any other provision of this Agreement, Nektar hereby expressly authorizes BMS to disclose to Ono, but only insofar as the BMS Compound is involved, (a) the existence and the terms of this Agreement, Collaboration Studies and Protocols; and (b) any other Nektar Confidential Information, BMS Study Data, Collaboration Study Data and Independent Study Data, in each case solely to the extent necessary for BMS to fulfill its obligations to Ono under the Ono-BMS Agreements; provided that Ono is under confidentiality obligations at least as restrictive as those set forth herein.  For clarity, all disclosures of this Agreement (including to Ono prior to the Effective Date) shall be subject to the Mutual Confidentiality Agreement, by and between the Parties dated December 13, 2012, as amended.

12.5Press Releases and Publications.  

(a)Subject to this Section 12.5, the Parties shall jointly agree to the content and timing of all external communications with respect to this Agreement (including an initial press release, the content of which shall be as attached hereto as Schedule 12.5, subsequent press releases, Q&As and the content and wording of any listing for any Collaboration Study required to be listed on a public database or other public registry (such as www.clinicaltrials.gov)).  For clarity, if either Party terminates or suspends a Collaboration Study pursuant to Section 16.4, the Parties shall mutually agree upon any external communication related to such termination or suspension, which shall not include the rationale for such termination or suspension unless (and to the extent) mutually agreed by the Parties.  Neither Party shall use in advertising, publicity or otherwise the name or any trademark of the other Party without the prior written consent of the other Party.  Notwithstanding any provision of this Agreement to the contrary and subject to Section 12.3, each Party shall be permitted to publicly disclose information that such Party

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

 

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determines in good faith is necessary to be disclosed to comply with Applicable Law or the rules or regulations of any securities exchange on which such Party’s stock may be listed, or pursuant to an order of a court or governmental entity.

(b)Nektar and BMS agree to collaborate to publicly disclose, publish or present (i) top-line results from each Collaboration Study, limited if possible to avoid jeopardizing the future publication of the Study Data at a scientific conference or in a scientific journal, solely for the purpose of disclosing, as soon as reasonably practicable, the safety or efficacy results and conclusions that are material to either Party under applicable securit