NitroMed (NTMD) Announces License Agreement with Elan Pharma (ELN)

February 12, 2007 1:45 PM EST

From Today's 8-K Filing From Nitromed (Nasdaq: NTMD): In connection with NitroMed, Inc.'s ("NitroMed") efforts to develop an extended release formulation of its product, BiDil†, known as BiDil XR™, on February 9, 2007, NitroMed entered into a License Agreement with Elan Pharma International Limited (NYSE: ELN). Pursuant to the Agreement, Elan granted to NitroMed an exclusive worldwide license, for the term of the Agreement, to certain know-how, patents and technology, and any improvements to any of the foregoing developed by either party during the term of the Agreement. The intellectual property being licensed is collectively referred to in the Agreement as the Elan Intellectual Property. Pursuant to the License, NitroMed may import, use, offer for sale and sell the oral capsule formulation incorporating specified technology referred to in the Agreement as the Elan Technology and containing, as its sole active combination of ingredients, the combination of the active drug substances isosorbide dinitrate and hydralazine hydrochloride.

In consideration for the grant of the License, NitroMed has agreed to pay Elan royalties that are calculated by reference to annual net sales parameters set forth in the Agreement. In addition, NitroMed has agreed to pay Elan specified amounts upon the achievement of specified development and commercialization milestone events set forth in the Agreement. Pursuant to the terms of the Agreement, Elan shall be and shall remain the owner of the Elan Intellectual Property, which includes certain patent rights specifically claiming the Product, which are referred to in the Agreement as the Product Patents.

The Agreement provides that both NitroMed and Elan shall refrain from competing in certain specified areas. The Agreement also provides that NitroMed shall have the right to grant sub-licenses with respect to the Elan Intellectual Property, provided that certain conditions are met in those cases where NitroMed desires to grant a sub-license to specified competitors in the field of oral drug delivery, referred to in the Agreement as Technological Competitors.

Pursuant to the terms of the Agreement, NitroMed has the right to qualify an alternate facility to manufacture and supply the Product, provided that such facility will be subject to Elan's approval, which shall not be unreasonably withheld. In addition, the Agreement sets forth certain obligations that NitroMed must fulfill with respect to the registration, launch, marketing and promotion of the Product.

Pursuant to the terms of the Agreement, NitroMed and Elan shall each indemnify and hold harmless the other party against certain infringement claims as set forth in the Agreement, provided that Elan's cumulative liability with respect to infringement claims for which Elan is liable shall not exceed certain limitations set forth in the Agreement. The Agreement also provides for the disbursement of any recovery, lump-sum settlement, royalty payment or other consideration received by Elan for past infringement or misappropriation as a result of litigation related to the Elan Improvements and/or Product Patents.

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