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Initiation of a Phase IIa Study $10,000,000 $10,000,000 |
Initiation of the first Phase IIb Study $15,000,000 $12,500,000 |
Initiation of a Phase III Study $25,000,000 $20,000,000 |
For a second Indication |
Initiation of the first Phase IIb Study $15,000,000 $12,500,000 |
Initiation of a Phase III Study $25,000,000 $20,000,000 |
For a third Indication |
Initiation of the first Phase IIb Study $15,000,000 $12,500,000 |
Initiation of a Phase III Study $25,000,000 $20,000,000 |
Regulatory Milestone Payments |
Milestone Event D3 Receptor Product Vraylar Indication Non-Vraylar Indication |
Acceptance of the NDA in the United States for a first Indication $20,000,000 $25,000,000 $12,500,000 |
Regulatory Approval in the United States for a second Indication $17,500,000 $22,500,000 $10,000,000 |
Regulatory Approval in the United States for a third Indication $8,750,000 $12,500,000 $5,500,000 |
First Commercial Sale in the United States $35,000,000 $45,000,000 $22,000,000 |
First Commercial Sale in Japan $5,000,000 $7,500,000 $2,500,000 |
Total Potential Development and Regulatory Milestone Payments $216,250,000 $220,000,000 $160,000,000 |
Each milestone payment in this Section 6.2 shall be payable only upon the first achievement of such milestone and no amounts shall be due for subsequent or repeated achievements of such milestone, whether for the same or a different Licensed Compound or Licensed Product. With respect to the regulatory milestones for the Pro-metabolite Products in this Section 6.2, such regulatory milestones shall be (a) determined, on an Indication-by-Indication basis, based on whether the applicable Pro-metabolite Product obtained the applicable regulatory milestone in a Vraylar Indication or a Non-Vraylar Indication and (b) payable with respect to Pro-metabolite Products only upon the first achievement of such milestone in a Vraylar Indication or a Non-Vraylar Indication (whichever occurs first), and not both. If any regulatory milestone is achieved by a Pro-metabolite Product in both a Vraylar Indication and Non-Vraylar Indication at the same time, then such regulatory milestone shall be deemed to be obtained in the Vraylar Indication and the higher milestone payment shall be due to Richter. If one or more milestone events is not achieved prior to the achievement of a subsequent milestone event, then the milestone payments due for such skipped milestone events will be payable upon the first achievement of any such subsequent milestone event, except that a milestone event specific to one territory will not be deemed to be skipped solely because a subsequent milestone event was achieved in a different territory (e.g., First Commercial Sale in Japan will not be deemed to trigger a milestone payment for Regulatory Approval in the U.S. or First Commercial Sale in the U.S.). The maximum aggregate amount payable by AbbVie pursuant to this Section 6.2 with respect to Pro-metabolite Products is Two Hundred Twenty Million Dollars ($220,000,000). The maximum aggregate amount payable by AbbVie pursuant to this Section 6.2 with respect to all Licensed Products is Four Hundred Thirty Six Million Two Hundred Fifty Thousand Dollars ($436,250,000). |
6.3 Sales-Based Milestones. |
6.3.1. In partial consideration of the license rights granted by Richter to AbbVie hereunder, subject to Sections 6.3.2, in the event that the Net Sales of a particular Licensed Product made by AbbVie or any of its Affiliates or Sublicensees in the AbbVie Territory in a given consecutive twelve (12)-month period exceeds a threshold (each, an "Annual Net Sales Milestone Threshold") set forth in the left-hand column of the table immediately below (the "Annual Net Sales-Based Milestone Table"), AbbVie shall pay to Richter a milestone payment (each, an "Annual Net Sales-Based Milestone Payment") in the corresponding amount set forth in the right-hand column of the Annual Net Sales-Based Milestone Table. In the event that in a given twelve (12)-month period more than one (1) Annual Net Sales Milestone Threshold is exceeded, AbbVie shall pay to Richter a separate Annual Net Sales-Based Milestone Payment with respect to each Annual Net Sales Milestone Threshold that is exceeded in such twelve (12)-month period. Each such milestone payment shall be due within sixty (60) days of the end of the twelve (12)-month period in which such milestone was achieved (each, an "Annual Net Sales-Based Milestone Payment Date"). |
Threshold Annual Net Sales Levels Payment Amount |
$500,000,000 $25,000,000 |
$1,000,000,000 $25,000,000 |
6.3.2. Notwithstanding anything contained in Section 6.3.1, (a) the Annual Net Sales Milestone Threshold set forth in the first row of the Annual Net Sales-Based Milestone Table only applies with respect to Net Sales of a particular Licensed Product made by AbbVie or any of its Affiliates or Sublicensees in the AbbVie Territory in a given consecutive twelve (12)-month period occurring within the first four (4) years after the First Commercial Sale of such Licensed Product in the United States, and the corresponding Annual Net Sales-Based Milestone Payment will not be payable with respect to any Net Sales made after such four (4) year period, and (b) the Annual Net Sales Milestone Threshold set forth in the second row of the Annual Net Sales-Based Milestone Table only applies with respect to Net Sales of a particular Licensed Product made by AbbVie or any of its Affiliates or Sublicensees in the AbbVie Territory in a given consecutive twelve (12)-month period occurring within the first six (6) years after the First Commercial Sale of such Licensed Product in the United States, and the corresponding Annual Net Sales-Based Milestone Payment will not be payable with respect to any Net Sales made after such six (6) year period. |
6.3.3. Notwithstanding anything contained in Section 6.3.1, and subject to Section 6.3.2, each milestone payment in this Section 6.3.3 shall be payable with respect to each Licensed Product only upon the first achievement of such milestone in a twelve (12)-month period, and no amounts shall be due for subsequent or repeated achievements of such milestone in subsequent twelve (12)-month period. The maximum aggregate amount payable by AbbVie for each Licensed Product pursuant to this Section 6.3 is Fifty Million Dollars ($50,000,000). |
6.4 Royalties. |
6.4.1. Royalty Rates. As further consideration for the rights granted to AbbVie hereunder, commencing upon the First Commercial Sale of a Licensed Product in the AbbVie Territory, on a Licensed Product-by-Licensed Product basis, AbbVie shall pay to Richter a royalty on Net Sales of each Licensed Product in the AbbVie Territory (excluding Net Sales of each Licensed Product in any country or other jurisdiction in the AbbVie Territory for which the Royalty Term for such Licensed Product in such country or other jurisdiction has expired) during each Calendar Year during the Royalty Term at the following rates: |
Net Sales in the AbbVie Territory of each D3 Receptor Product in a Calendar Year Royalty Rate |
For that portion of aggregate Net Sales of each D3 Receptor Product in the AbbVie Territory during a Calendar Year less than or equal to Five Hundred Million Dollars ($500,000,000) 14% |
For that portion of aggregate Net Sales of each D3 Receptor Product in the AbbVie Territory during a Calendar Year greater than Five Hundred Million Dollars ($500,000,000) 16% |
Net Sales in the AbbVie Territory of each Pro-metabolite Product in a Calendar Year Royalty Rate |
For that portion of aggregate Net Sales of each Pro-metabolite Product in the AbbVie Territory during a Calendar Year less than or equal to Five Hundred Million Dollars ($500,000,000) 16% |
For that portion of aggregate Net Sales of each Pro-metabolite Product in the AbbVie Territory during a Calendar Year greater than Five Hundred Million Dollars ($500,000,000) 18% |
With respect to each Licensed Product in each country or other jurisdiction in the AbbVie Territory, from and after the expiration of the Royalty Term for such Licensed Product in such country or other jurisdiction, Net Sales of such Licensed Product in such country or other jurisdiction shall be excluded for purposes of calculating the Net Sales thresholds and ceilings set forth in this Section 6.4.1. |
6.4.2. Reductions. Notwithstanding the foregoing: |
(a) in the event that one or more Generic Products are being sold in any country or other jurisdiction in the AbbVie Territory and such Generic Products collectively captures twenty percent (20%) or more of the relevant market share in volume of Licensed Product sold in any particular country or other jurisdiction in the AbbVie Territory during the Royalty Term, for the remainder of the Royalty Term for such Licensed Product in such country or other jurisdiction the royalty rate for such Licensed Product in such country or other jurisdiction shall be reduced by fifty percent (50%) from the applicable rate(s) set forth in Section 6.4.1; |
(b) in the event that AbbVie enters into an agreement with a Third Party in order to obtain a Necessary Third Party License in a particular country or other jurisdiction pursuant to Section 5.9.1, or is subject to a court decision which finds that AbbVie infringes such Patent or intellectual property right, AbbVie shall be entitled to deduct from any royalties payable hereunder with respect to that country or other jurisdiction fifty percent (50%) of all upfront payments, milestone payments, royalties, and other amounts paid by AbbVie or its Affiliates to such Third Party in respect of such agreement or court decision ("Third Party Payments"); provided that in no event shall the deductions made pursuant to this Section 6.4.2(b) reduce by more than fifty percent (50%) the royalties that would otherwise be owed to Richter in a given Calendar Quarter; credits for reductions pursuant to this Section 6.4.2(b) not exhausted in any Calendar Quarter may be carried into future Calendar Quarters; |
(c) in the event that a court or a governmental agency of competent jurisdiction requires AbbVie or any of its Affiliates or Sublicensees to grant a compulsory license to a Third Party permitting such Third Party to make and sell a Licensed Product in a country or other jurisdiction in the AbbVie Territory, then, for the purposes of calculating the royalties payable with respect to such Licensed Product under Section 6.4.1, fifty percent (50%) of the Net Sales of such Licensed Product in such country or other jurisdiction shall be disregarded; |
(d) in the event that, and in such case from and after the date on which, a Licensed Product is Exploited in a country or other jurisdiction and (i) does not retain or otherwise maintain Regulatory Exclusivity in such country or other jurisdiction, or (ii) is not covered by one or more Valid Claims of a Richter Patent or Joint Patent that claim a Licensed Compound contained in such Licensed Product in such country or other jurisdiction or claims all Indications for which Regulatory Approval has been received for such Licensed Product in such country or other jurisdiction, then the royalty rate set forth in Section 6.4.1 with respect to such country or other jurisdiction (for purposes of calculations under Section 6.4.1) shall be reduced by fifty percent (50%) of the applicable royalty rates set forth in Section 6.4.1 in such country or other jurisdiction; and |
(e) AbbVie shall have the right to offset costs against payments to Richter in accordance with Section 7.4 and Section 7.5.5 and agrees that the aggregate of such offsets shall not exceed fifty percent (50%) with respect to claims, suits and proceedings in the AbbVie Territory. |
6.4.3. Mechanics of Adjustments. Any adjustments pursuant to Section 6.4.2 shall apply only to the relevant Licensed Product in the relevant country and, with respect to royalties under Section 6.4.1, shall be allocated pro rata across each of the royalty tiers in the relevant Calendar Quarter. |
6.5 Royalty Payments and Reports. |
(a) Within thirty (30) days after the end of each Calendar Quarter after the First Commercial Sale in the AbbVie Territory, AbbVie shall deliver to Richter a report (a "Quarterly Royalty Report") setting forth (i) the Net Sales on a Licensed Product-by-Licensed Product and country-by-country basis for such Calendar Quarter and AbbVie's calculation of all amounts payable to Richter pursuant to Section 6.4 (which amounts shall be converted to Dollars in accordance with Section 6.6). |
(b) After receipt of the Quarterly Royalty Report, Richter shall invoice AbbVie for the amount of royalties due from AbbVie in accordance with the Quarterly Royalty Report and AbbVie shall pay such royalties in accordance with Section 6.6 within the later of sixty (60) days after the end of the applicable Calendar Quarter and thirty (30) days after receipt of the applicable invoice from Richter. |
6.6 Mode of Payment; Offsets. All payments to either Party under this Agreement shall be made by deposit of Dollars in the requisite amount to such bank account as the receiving Party may from time to time designate by notice to the paying Party. For the purpose of calculating any sums due under, or otherwise reimbursable pursuant to, this Agreement (including the calculation of Net Sales expressed in currencies other than Dollars), a Party shall convert any amount expressed in a foreign currency into Dollar equivalents using its, its Affiliate's or Sublicensee's standard conversion methodology consistent with Accounting Standards. AbbVie shall have the right to offset any payment that is owed by Richter but not paid against any payments owed by AbbVie, if any, under this Agreement, such that the net cash amount remitted to Richter equals the total amount that would otherwise be remitted by AbbVie less the amounts of such offsets. The Parties acknowledge and agree that any such offsets are for the purposes of facilitating collection of amounts due from Richter to AbbVie and do not constitute a reduction in the royalties or other amounts earned by Richter hereunder. |
6.7 Accounting Procedures. For purposes of determining Development Costs, any expense allocated by either Party to a particular expense category of Development Costs shall not also be allocated to another category under Development Costs. Each Party shall determine Development Costs using its standard accounting procedures, consistently applied, to the maximum extent practicable as if a Licensed Compound or Licensed Product were a solely-owned product of the Party. Each Party shall have the right to audit the other Party's records to confirm the accuracy of the other Party's costs and reports as provided in Section 6.12. Transfers between a Party and its Affiliates (or between such Affiliates) shall not have any effect for purposes of calculating Development Costs or other payments or expenses under this Agreement. |
6.8 Withholding Taxes. Where any sum due to be paid to either Party hereunder is subject to any withholding or similar tax, the Parties shall use their commercially reasonable efforts to do all such acts and things and to sign all such documents as will enable them to take advantage of any applicable double taxation agreement or treaty. In the event there is no applicable double taxation agreement or treaty, or if an applicable double taxation agreement or treaty reduces but does not eliminate such withholding or similar tax, the payor shall remit such withholding or similar tax to the appropriate government authority, deduct the amount paid from the amount due to payee and secure and send to payee the best available evidence of the payment of such withholding or similar tax. Any such amounts deducted by the payor in respect of such withholding or similar tax shall be treated as having been paid by the payor for purposes of this Agreement. In the event that a government authority retroactively determines that a payment made by a Party to the other pursuant to this Agreement should have been subject to withholding or similar (or to additional withholding or similar) taxes, and such Party (the "Withholding Party") remits such withholding or similar taxes to the government authority, including any interest and penalties that may be imposed thereon (together with the tax paid, the "Withholding Amount"), the Withholding Party will have the right (a) to offset the Withholding Amount, against future payment obligations of the Withholding Party under this Agreement, (b) to invoice the other Party for the Withholding Amount (which shall be payable by the other Party within sixty (60) days of its receipt of such invoice) or (c) to pursue reimbursement by any other available remedy. |
6.9 Indirect Taxes. All payments are exclusive of value added taxes, sales taxes, consumption taxes and other similar taxes (the "Indirect Taxes"). If any Indirect Taxes are chargeable in respect of any payments, the paying Party shall pay such Indirect Taxes at the applicable rate in respect of such payments following receipt, where applicable, of an Indirect Taxes invoice in the appropriate form issued by the receiving Party in respect of those payments. The Parties shall issue invoices for all amounts payable under this Agreement consistent with Indirect Tax requirements and irrespective of whether the sums may be netted for settlement purposes. If the Indirect Taxes originally paid or otherwise borne by the paying Party are in whole or in part subsequently determined not to have been chargeable, all necessary steps will be taken by the receiving Party to receive a refund of these undue Indirect Taxes from the applicable governmental authority or other fiscal authority and any amount of undue Indirect Taxes repaid by such authority to the receiving Party will be transferred to the paying Party within forty-five (45) days of receipt. |
6.10 Interest on Late Payments. If any payment due to either Party under this Agreement is not paid when due, then such paying Party shall pay interest thereon (before and after any judgment) at an annual rate (but with interest accruing on a daily basis) of one hundred (100) basis points above SOFR, such interest to run from the date on which payment of such sum became due until payment thereof in full together with such interest. |
6.11 Financial Records. Each Party shall, and shall cause its Affiliates to, keep complete and accurate books and records pertaining to reimbursable Development Costs, Net Sales of Licensed Products, as applicable, and Development of the Licensed Compounds or Licensed Products, including books and records of actual expenditures with respect to the Party Development Activities performed under each Discovery Program Plan, IND-Enabling Studies Plan and Budget, or Clinical Development Plan, in sufficient detail to calculate all amounts payable hereunder and to verify compliance with its obligations under this Agreement. Such books and records shall be retained by such Party and its Affiliates until the later of (a) three (3) years after the end of the period to which such books and records pertain, and (b) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Applicable Law. |
6.12 Audit. At the request of the other Party, each Party shall, and shall cause its Affiliates to, permit an independent public accounting firm of internationally recognized standing designated by the other Party and reasonably acceptable to the audited Party, at reasonable times during normal business hours and upon reasonable notice, to audit the books and records maintained pursuant to Section 6.11 to ensure the accuracy of all reports and payments made hereunder. Except in the case of a Party's material breach of its financial-related obligations under this Agreement (including any such breach that is identified through an audit), such examinations may not (a) be conducted for any Calendar Quarter more than three (3) years after the end of such quarter, (b) be conducted more than once in any twelve (12) month period or (c) be repeated for any Calendar Quarter. The accounting firm shall disclose only whether the reports are correct or not, and the specific details concerning any discrepancies. No other information shall be shared. Each Party represents that it has been represented by legal counsel in connection with this Agreement and acknowledges that it has participated in the drafting hereof. In interpreting and applying the terms and provisions of this Agreement, the Parties agree that no presumption will apply against the Party which drafted such terms and provisions. |
[SIGNATURE PAGE FOLLOWS.] |
This Agreement is executed by the authorized representatives of the Parties as of the Execution Date. |
GEDEON RICHTER PLC. ABBVIE GLOBAL ENTERPRISES LTD. |
By: By: |
Name: Gábor Orbán Name: Jonathan C. Clipper |
Title: CEO Title: Director |
For purposes of Section 5.10 only: |
GEDEON RICHTER USA, INC. ALLERGAN PHARMACEUTICALS INTERNATIONAL LIMITED |
By: By: |
Name: Warren Czerniak Name: Francis Bates |
Title: President Title: Director |
This Agreement is executed by the authorized representatives of the Parties as of the Execution Date. |
GEDEON RICHTER PLC. ABBVIE GLOBAL ENTERPRISES LTD. |
By: By: |
Name: Gábor Orbán Name: Jonathan C. Clipper |
Title: CEO Title: Director |
For purposes of Section 5.10 only: |
GEDEON RICHTER USA, INC. ALLERGAN PHARMACEUTICALS INTERNATIONAL LIMITED |
By: By: |
Name: Warren Czerniak Name: Francis Bates |
Title: President Title: Director |
Schedule 1.54 |
Corporate Names |
(a) In case of Richter: |
• full corporate name in English: Chemical Works of Gedeon Richter Plc. |
• abbreviated corporate name in English: Gedeon Richter Plc. |
• full corporate name in Hungarian: Richter Gedeon Vegyészeti Gyár Nyilvánosan Működő Rt. |
• abbreviated corporate name in Hungarian: Richter Gedeon Nyrt. |
99450416_50 |
Schedule 1.59 |
D3 Receptor Discovery Program Plan |
Program Overview and Objectives |
There is a growing body of evidence, including clinical observations with Vraylar® that suggest the dopamine D3 receptor (D3R) plays a critical role in several brain disorders. To date, however, there has been a lack of highly selective D3R compounds that can be used to explore the significance of D3R signaling and the consequences of modulating receptor function in clinical and non-clinical settings. Consequently, targeting the D3R has emerged as a potential treatment of major neurological disorders such as Schizophrenia, Bipolar Disorder, Major Depressive Disorder, Parkinson's Disease (PD), Attention Deficit Hyperactivity Disorder, Autism Spectrum disorder and Substance Use Disorder (addiction). Recent preclinical studies also implicate D3R antagonism in the treatment of Post-Traumatic Stress Disorder (PTSD). |
The aim of this program is to identify and develop CNS-penetrant dopamine D3R selective compounds that can be used to clinically test the role of D3R in neuropsychiatric diseases. Using novel medicinal chemistry approaches, i.e., computational docking and free energy perturbation analysis as well as the crystal structures of the D3 and D2Rs, the goal is to identify new chemical structures that are highly selective for the D3R, as compared with compounds that emerged from traditional drug discovery approaches. |
Status |
The initial chemical strategy for this program relied on the literature of D3 receptor ligands, experience from previous in-house D3 receptor programs and a pharmacophore model. Approximately 400 compounds (listed in Schedule 1.56) have thus far been synthesized based on this 'modular' approach (i.e., combination of head, linker and tail moieties considering the structure of dopamine D2 and D3 receptor modulators, including that of cariprazine). Moreover, the use of 3D computer modeling has identified two important protein-ligand interactions that differ between the D3 and D2Rs which may contribute to compound selectivity. Using this approach, early work identified a spiro-indolinone head group that was both novel and had enhanced receptor selectivity. When this head group was combined with various linker and tail groups, the antagonist 70022302 was identified, a compound that is ~100-fold selective for the human D3R vs D2R and has low affinity for 5-HT1A and 5-HT2B receptors as well as other receptors of interest. Subsequent lead optimization/ SAR studies identified 70024303 a highly selective D3R antagonist with a unique pharmacological and / or physiological profile. |
Further optimization of 70022302 is focused on selection of analogues with improved brain to plasma (B/P) ratio while maintaining or exceeding in vitro hD3R binding affinity, functional potency and selectivity vs hD2R and other targets. Compound 70024303 emerged as one the promising compounds in the spiro-indolinone series that meets all these criteria. Further characterization of 70024303 along with synthesis of new compounds is ongoing. |
In addition to these activities, efforts to identify D3R partial agonists have progressed based on the use of dichlorophenylpiperazine and other head groups that appear to have partial agonistic attributes. The screening of novel head groups suitable for further derivatization towards the synthesis of partial agonists is in progress, using the modular approach and computational methods described above to predict D3R affinity. |
The Discovery Program Plan to identify D3 Receptor Compounds comprises the following key activities: 1. Compound screening and evaluation 2. Preclinical characterization of compounds 3. Selection and characterization of Lead Compounds and Backup compounds for candidate nomination 4. IND enabling studies |
The studies conducted to support this D3 Receptor Discovery Program Plan will be conducted, with AbbVie's prior written consent (not to be unreasonably withheld, delayed or conditioned), at mutually-agreed-upon vendors, service provides, CROs or CMOs. Gedeon Richter will be responsible for managing day-to-day project management with contracted service providers in accordance with the terms and conditions of the Agreement. |
Screening & Identification |
Gedeon Richter Activities and Deliverables |
• Screening to identify hits • Competitive in vitro radioligand based receptor binding assays to identify compounds that bind to the human dopamine D3R, and determine selectivity vs hD2L receptor (both receptors expressed in CHO-K1 cells) |
• In silico modeling of D2R/D3R occupancy to identify compounds with: • Docking models on most up-to-date crystal structures combined with pharmacophore fitting screen. Artificial intelligence-based design platform combined with Gedeon Richter's prior experience with the target. • In vitro screen of compounds for each target in cell system(s) Both G-protein coupled and G-protein independent signaling: • G protein coupled route: cAMP accumulation • G protein independent route: Beta arrestin translocation |
• In vitro characterization in target primary cells: Intracellular Ca2+ signal detection in cultured neurons derived from induced pluripotent stem cells (iPSC-Ns) (as needed) |
The overall goal of the above activities is to identify and prioritize D3R Modulators as defined in the Agreement. |
Preclinical Characterization of D3R Modulators |
Gedeon Richter Activities and Deliverables |
• Compound evaluation in rodent model • BBB penetration o Deliverable: Determine the brain/plasma ratio of drug after various dosing regimens o Methods: ■ Detailed pharmacokinetic (PK) characterization of the compounds is performed in rats and/or mice ■ Single dose of the compound is administered parenterally and orally in an appropriate vehicle to animals ■ Serial blood samples and/or terminal blood and whole brain samples are collected at selected time points for up to 24 hours post dose. ■ Plasma and/or brain homogenate samples are prepared and measured for the compound and/ or metabolites of interest with a bioanalytical assay. ■ Pharmacokinetic parameters are calculated, primary pharmacokinetic parameters (volume of distribution, systemic clearance, terminal half-life etc.) are defined after IV dosing ■ Maximum concentration (Cmax), time of occurrence of Cmax (Tmax), area under the concentration versus time curve (AUC), apparent terminal half-life (T1/2) are derived from the concentration-time data following PO dosing ■ Oral bioavailability and brain penetrability are also determined ■ PK support is given to PD, safety and toxicity studies |
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