Form 10-Q FIBROGEN INC For: Sep 30

November 5, 2020 4:14 PM EST

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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.

 

Exhibit 10.1

 

CONFIDENTIAL

EXECUTION COPY

 

TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE 1 DEFINITIONS

1

 

 

1.1

 

“Actions”

 

1

 

1.2

 

“Affiliate”

 

1

 

1.3

 

“Astellas Indemnitees”

 

1

 

1.4

 

“Astellas Territory”

 

1

 

1.5

 

“Authorized Designee”

 

1

 

1.6

 

“Bridging Strategy”

 

2

 

1.7

 

“Bulk Product”

 

2

 

1.8

 

“Commercialize”

 

2

 

1.9

 

“Completion”

 

2

 

1.10

 

“Confidential Information”

 

2

 

1.11

 

“Control” or “Controlled”

 

2

 

1.12

 

“Controlling Party”

 

2

 

1.13

 

“Data”

 

2

 

1.14

 

“Delivery” or “Delivered”

 

2

 

1.15

 

“Development Plan”

 

2

 

1.16

 

“Development Program”

 

2

 

1.17

 

“Enforcement Action”

 

2

 

1.18

 

“Event”

 

2

 

1.19

 

“Expanded Field”

 

2

 

1.20

 

“Expenses”

 

2

 

1.21

 

“FDA”

 

3

 

1.22

 

“FG Acquired Patents”

 

3

 

1.23

 

“FG Development Program”

 

3

 

1.24

 

“FG Indemnitees”

 

3

 

1.25

 

“FG Technology”

 

3

 

1.26

 

“FG Patents”

 

3

 

1.27

 

“FG Technical Information”

 

3

 

1.28

 

“FG Territory”

 

4

 

1.29

 

“Field”

 

4

 

1.30

 

“First Commercial Sale”

 

4

 

1.31

 

“Force Majeure Event”

 

4

 

1.32

 

“Fully Burdened Costs”

 

4

 

1.33

 

“Future Third Party Intellectual Property”

 

4

 

1.34

 

“GMP Guidelines”

 

4

 

1.35

 

“[*]”

 

5

 

1.36

 

“[*] Percentage”

 

5

 

1.37

 

“HIF”

 

5

 

1.38

 

“IND”

 

5

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(continued)

 

 

Page

 

 

 

1.39

 

“Indemnitee”

 

5

 

1.40

 

“Indemnitor”

 

5

 

1.41

 

“Indications”

 

5

 

1.42

 

“Initial Development Plan”

 

5

 

1.43

 

“Initiate” or Initiation”

 

5

 

1.44

 

“Inspected Party” and “Inspecting Party”

 

5

 

1.45

 

“Joint Development Committee” or “JDC”

 

5

 

1.46

 

“Lead Compound”

 

5

 

1.47

 

“Listed Price”

 

5

 

1.48

 

“Litigation Agreement”

 

5

 

1.49

 

“Major Indication”

 

5

 

1.50

 

“Marketing Approval”

 

6

 

1.51

 

“Marketing Approval Application” or “MAA”

 

6

 

1.52

 

“Net Sales”

 

6

 

1.53

 

“Phase I”

 

6

 

1.54

 

“Phase II”

 

6

 

1.55

 

“Phase III”

 

6

 

1.56

 

“Product Specification”

 

7

 

1.57

 

“Preexisting Third Party Intellectual Property”

 

7

 

1.58

 

“Proof of Concept”

 

7

 

1.59

 

“Prosecution and Interference Activities”

 

7

 

1.60

 

“Protected Field”

 

7

 

1.61

 

“Reference Materials”

 

7

 

1.62

 

“Relevant Standards”

 

7

 

1.63

 

“Sales Price”

 

7

 

1.64

 

“Standard Materials”

 

7

 

1.65

 

“Sublicensee”

 

8

 

1.66

 

“Technical Product Failure”

 

8

 

1.67

 

“Third Party Agreements”

 

8

 

1.68

 

“Third Party Licensor”

 

8

 

 

 

 

 

 

ARTICLE 2 JOINT DEVELOPMENT COMMITTEE

8

 

 

2.1

 

Joint Development Committee

 

8

 

2.2

 

Membership

 

8

 

2.3

 

JDC Meetings

 

8

 

2.4

 

Decisions

 

9

 

 

 

 

 

 

ARTICLE 3 DEVELOPMENT PLANS

9

 

 

3.1

 

General

 

9

 

3.2

 

Annual Review

 

9

 

3.3

 

Periodic Reviews

 

10

 

 

 

 

 

 

ARTICLE 4 DEVELOPMENT PROGRAM

10

 

 

4.1

 

Development Program for the Astellas Territory

 

10

 

4.2

 

Global Harmonization

 

10

 

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(continued)

 

 

Page

 

 

 

4.3

 

Selection of Lead Compounds

 

10

 

4.4

 

Regulatory Matters

 

11

 

 

 

 

 

 

ARTICLE 5 RECORDKEEPING; PUBLICATION

13

 

 

5.1

 

Reports and Records

 

13

 

5.2

 

Review of Publications

 

14

 

 

 

 

 

 

ARTICLE 6 DEVELOPMENT PROGRAM FUNDING

15

 

 

6.1

 

Payments for Reimbursement; Net Payments

 

15

 

 

 

 

 

 

ARTICLE 7 USE OF PRECLINICAL AND CLINICAL DATA

17

 

 

7.1

 

Exchange

 

17

 

7.2

 

Disclosure

 

18

 

7.3

 

Regulatory Requirements

 

18

 

7.4

 

Review of Protocols

 

18

 

 

 

 

 

 

ARTICLE 8 MARKETING RIGHTS

18

 

 

8.1

 

Astellas

 

18

 

8.2

 

FibroGen

 

19

 

8.3

 

Covenants

 

19

 

 

 

 

 

 

ARTICLE 9 TRANSFER PRICING

20

 

 

9.1

 

Transfer for Non-Commercial Purpose

 

20

 

9.2

 

Transfer for Commercial Purpose

 

20

 

9.3

 

Payment

 

21

 

9.4

 

Reference Materials; Standard Materials

 

22

 

 

 

 

 

 

ARTICLE 10 ADDITIONAL PAYMENTS; BOOKS AND RECORDS

22

 

 

10.1

 

Quarterly Reports

 

22

 

10.2

 

Payment Method

 

22

 

10.3

 

Currency Conversion

 

22

 

10.4

 

Taxes

 

23

 

10.5

 

Records; Inspections

 

23

 

 

 

 

 

 

ARTICLE 11 DUE DILIGENCE

24

 

 

11.1

 

Astellas’ Due Diligence

 

24

 

11.2

 

FG’s Due Diligence

 

24

 

11.3

 

Development Diligence

 

24

 

 

 

 

 

 

ARTICLE 12 MANUFACTURING RIGHTS

26

 

 

12.1

 

Procedures

 

26

 

12.2

 

FG Right

 

26

 

12.3

 

Manufacture and Supply

 

27

 

12.4

 

Product Specifications

 

27

 

12.5

 

Orders Forecast

 

27

 

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(continued)

 

 

Page

 

 

 

12.6

 

Shipment

 

27

 

12.7

 

Inspection of Shipment/Right to Reject

 

28

 

12.8

 

Inspection of Facilities

 

28

 

12.9

 

Recall

 

29

 

12.10

 

Warranty

 

29

 

12.11

 

Interruption in Supply

 

29

 

12.12

 

Reference and Standard Materials

 

29

 

 

 

 

 

 

ARTICLE 13 LICENSE GRANTS

29

 

 

13.1

 

Grant to Astellas

 

29

 

13.2

 

Sublicenses

 

29

 

13.3

 

No Rights Beyond Lead Compounds

 

29

 

13.4

 

Expanded Field Negotiation

 

30

 

 

 

 

 

 

ARTICLE 14 INTELLECTUAL PROPERTY

30

 

 

14.1

 

Ownership of Inventions

 

30

 

14.2

 

Patent Prosecution

 

30

 

14.3

 

Defense of Third Party Infringement Claims

 

31

 

14.4

 

Enforcement

 

32

 

14.5

 

Third Party Agreements

 

33

 

 

 

 

 

 

ARTICLE 15 REPRESENTATIONS AND WARRANTIES

34

 

 

15.1

 

FG Warranties

 

34

 

15.2

 

Astellas Warranties

 

34

 

15.3

 

Disclaimer of Warranties

 

35

 

 

 

 

 

 

ARTICLE 16 CONFIDENTIALITY

35

 

 

16.1

 

Confidential Information

 

35

 

16.2

 

Permitted Disclosures

 

36

 

16.3

 

Clinical Data

 

36

 

16.4

 

Press Releases

 

36

 

 

 

 

 

 

ARTICLE 17 INSURANCE; INDEMNIFICATION

36

 

 

17.1

 

Insurance

 

36

 

17.2

 

Indemnification of FG

 

36

 

17.3

 

Indemnification of Astellas

 

37

 

17.4

 

Procedure

 

37

 

 

 

 

 

 

ARTICLE 18 TERM AND TERMINATION

38

 

 

18.1

 

Term

 

38

 

18.2

 

Termination for Cause or Technical Product Failure

 

38

 

18.3

 

Termination in case of Generic Competition

 

39

 

18.4

 

Negative Advice from Authorities

 

39

 

18.5

 

Admission of Invalidity or Unenforceability of FG Patent

 

39

 

18.6

 

Termination upon Notice

 

39

 

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TABLE OF CONTENTS

(continued)

 

 

Page

 

 

 

18.7

 

Effect of Termination

 

39

 

 

 

 

 

 

ARTICLE 19 DISPUTE RESOLUTION

41

 

 

19.1

 

Disputes

 

41

 

19.2

 

Full Arbitration

 

41

 

 

 

 

 

 

ARTICLE 20 MISCELLANEOUS

42

 

 

20.1

 

Confidential Terms

 

42

 

20.2

 

Governing Law

 

42

 

20.3

 

Force Majeure

 

42

 

20.4

 

No Implied Waivers; Rights Cumulative

 

42

 

20.5

 

Independent Contractors

 

42

 

20.6

 

Notices

 

42

 

20.7

 

Assignment

 

43

 

20.8

 

Modification

 

43

 

20.9

 

Severability

 

43

 

20.10

 

Counterparts

 

43

 

20.11

 

Headings

 

44

 

20.12

 

Export Laws

 

44

 

20.13

 

Language

 

44

 

20.14

 

Entire Agreement

 

44

 

 

 

 

 

 

EXHIBIT A  LIST OF PATENTS

46

 

EXHIBIT B  INDICATIONS

47

 

EXHIBIT C  INITIAL DEVELOPMENT PLAN

48

 

 

 

 

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CONFIDENTIAL

EXECUTION COPY

 

COLLABORATION AGREEMENT

This COLLABORATION AGREEMENT (“Agreement”), effective as of June 1, 2005 (the “Effective Date”), is made by and between FibroGen, Inc., a Delaware corporation having offices at 225 Gateway Boulevard, South San Francisco, California 94080 (“FG” or “FibroGen”), and Astellas Pharma Inc., a Japanese corporation having offices at 3-11 Nihonbashi-Honcho, 2-Chome, Chuo-ku, Tokyo, 103-8411 Japan (“Astellas”).

BACKGROUND

A.FG has a research and development program focused on the development of small molecule prolyl hydroxylase inhibitors which stabilize hypoxia inducible factor (“HIF”), for the treatment of anemia.

B.Astellas desires to collaborate with FG on the development and commercialization of, and license the rights to use as therapeutics, certain small molecule prolyl hydroxylase inhibitors on the terms and conditions set forth below for use in the Astellas Territory (as defined below).

NOW THEREFORE, for and in consideration of the covenants, conditions, and undertakings hereinafter set forth, it is agreed by and between the parties as follows:

ARTICLE 1
DEFINITIONS

1.1“Actions” shall have the meaning as set forth in Section 14.3 below.

1.2“Affiliate” shall mean any entity which controls, is controlled by or is under common control with Astellas or FG. For purposes of this definition only, “control” shall mean beneficial ownership (direct or indirect) of at least fifty percent (50%) of the shares of the subject entity entitled to vote in the election of directors (or, in the case of an entity that is not a corporation, for the election of the corresponding managing authority).

1.3“Astellas Indemnitees” shall have the meaning as set forth in Section 17.3 below.

1.4“Astellas Territory” shall mean the country of Japan.

1.5“Authorized Designee” shall mean an officer of FG or Astellas, as the case may be, designated by the Chief Executive Officer of the respective corporation, that has been granted full authority to resolve a dispute arising between FG and Astellas as required under Section 2.4 or Section 19.1 hereof.

 

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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


CONFIDENTIAL

EXECUTION COPY

 

1.6“Bridging Strategy” shall mean the decision by Astellas to file an MAA in the Astellas Territory by submitting the data from the Phase III clinical trial of FG or its Affiliate or Sublicensee.

1.7“Bulk Product” shall mean a Lead Compound supplied by FG to Astellas as a bulk formulated drug (such as in a form, including, but not limited, to a capsule, tablet or caplet formulation) without packaging.

1.8“Commercialize” shall mean directly or indirectly develop, manufacture, sell, market or distribute.

1.9“Completion” shall be deemed to occur, with respect to a particular clinical trial for a Lead Compound, upon clinical database lock for such trial.

1.10“Confidential Information” shall have the meaning as set forth in Section 16.1 below.

1.11“Control” or “Controlled” shall mean possession of the ability to grant a license or sublicense as provided for herein without violating the terms of an agreement with a third party.

1.12“Controlling Party” shall have the meaning as set forth in Section 14.3 below.

1.13“Data” shall have the meaning as set forth in Section 7.1 below.

1.14“Delivery” or “Delivered” shall mean when Lead Compound is made available by FG to Astellas at the Ex Works location.

1.15“Development Plan” shall mean the plan for the Development Program in effect from time to time, as established in accordance with Article 3 below.

1.16“Development Program” shall mean all Astellas activities with respect to the development and commercialization of Lead Compounds for applications within the Field in the Astellas Territory, in accordance with the Development Plan in effect at that time.

1.17“Enforcement Action” shall have the meaning as set forth in Section 14.4 below.

1.18“Event” shall have the meaning as set forth in Article 6 below.

1.19“Expanded Field” shall mean the treatment of any indications in which therapeutic utility is derived from [*], including, without limitation, [*]. The Expanded Field shall not include the Field.

1.20“Expenses” shall have the meaning as set forth in Section 14.3 below.

 

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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


CONFIDENTIAL

EXECUTION COPY

 

1.21“FDA” shall mean the U.S. Food and Drug Administration, or any successor agency.

1.22“FG Acquired Patents” shall mean those FG Patents that are in-licensed or otherwise acquired by FG.

1.23“FG Development Program” shall mean those activities by or on behalf of FG directly related to the development and commercialization of Lead Compounds for applications within the Field in the FG Territory that are directly useful or necessary for Commercialization in the Astellas Territory.

1.24“FG Indemnitees” shall have the meaning as set forth in Section 17.2 below.

1.25“FG Technology” shall mean FG Patents and FG Technical Information.

1.26“FG Patents” shall mean all patents including all reissues, renewals, re-examinations and extensions thereof, and any patent applications therefor, including all divisionals or continuations, in whole or in part, thereof, which claim or otherwise cover the composition, manufacture, sale or use of a Lead Compound and that are Controlled by FG or its Affiliates during the term of this Agreement, subject to Section 14.5.1. For purposes of this definition, a patent or patent application shall be deemed to “cover” a Lead Compound if the manufacture, use or sale of such Lead Compound would, but for the license granted herein, infringe, contributorily infringe or constitute inducement to infringement of such patent or patent application, if issued or granted as pending. All patents and patent applications listed on Exhibit A, as revised from time to time to remove patents and/or patent applications by mutual agreement or to add patents and/or patent applications by FG, shall be within the scope of definition of the FG Patents, provided, however, that in the event FG designates any additional  Lead Compounds, FG shall add to the list on Exhibit A patents and patent applications which claim or otherwise cover the composition, or manufacture, sale or use of the additional Lead Compounds within the Field and the Astellas Territory, and upon the cessation of the designation as any compound as Lead Compound and Astellas’ cessation of development of such Lead Compound, FG shall remove at its sole discretion the related patent or patent application from Exhibit A.

1.27“FG Technical Information” shall mean confidential information, tangible and intangible, and materials, including, but not limited to: trade secrets and know how, pharmaceutical, chemical, biological and biochemical compositions; and technical and non-technical data and information, and/or the results of tests, assays, methods and processes; and plans, specifications and/or other documents containing said information and data; in each case that is possessed by FG as of the Effective Date or discovered, developed or Controlled by FG or its Affiliates during the term of this Agreement, to the extent such relates to the development, manufacture, sale or use of a Lead Compound subject to Section 14.5.1, and such information related to a candidate for use as a Lead Compound provided by FG to Astellas in connection with the Lead Compound selection decision consultation process described in Section 4.3.

 

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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


CONFIDENTIAL

EXECUTION COPY

 

1.28“FG Territory” shall mean all areas of the world outside of the Astellas Territory.

1.29“Field” shall mean the treatment of anemia solely in the Indications, by means of the stabilization of HIF causing the stimulation of erythropoiesis (including an increase in endogenous erythropoietin production) and/or a subsequent increase in hematocrit through modulation of prolyl hydroxylase and/or asparaginyl hydroxylase. For purposes of clarity, FG and Astellas agree and acknowledge that the Field and the Indications exclude [*].

1.30“First Commercial Sale” shall mean, with respect to each Lead Compound, the first bona fide commercial sale of such Lead Compound to a non-Affiliate third party by or under authority of Astellas or FG, or their Affiliates or Sublicensees, as the case may be, in the FG Territory or the Astellas Territory, respectively.

1.31“Force Majeure Event” shall mean the occurrence of any event causing a failure to perform where failure to perform is beyond the reasonable control of the non-performing party, as described in Section 20.3.

1.32“Fully Burdened Costs” with respect to a Lead Compound shall mean all costs to produce, package and distribute the product to Astellas or its carrier at the Ex Works location (in compliance with Section 12.6) and any royalties or other consideration (not reimbursed by Astellas) paid to third parties related to the acquisition or sale of product, with costs to produce and package the product to include the direct material, labor and indirect costs that are incurred by FG or its Affiliate(s) associated with the manufacture, filling, packaging, labeling, preparation of product for shipment and/or other preparation of such Lead Compound, as applicable, including, but not limited to taxes, fees, and customs incurred, as applicable. Costs will be determined in accordance with U.S. Generally Accepted Accounting Principles (U.S. GAAP) and will include but not be limited to the costs of facilities, labor, purchasing, depreciation of equipment, materials, payments to third parties for any necessary contract work related to the manufacture or testing of the product, the validation studies, quality assurance, quality control and other testing, storage, shipping (if requested by Astellas), costs related to distribution and a reasonable allocation of general and administrative overhead. Costs related to distribution include the labor, materials and overhead necessary to prepare and package the final product for shipment to the Ex Works location.

1.33“Future Third Party Intellectual Property” shall mean any intellectual property rights, including without limitation all patents, trademarks, or copyrights, and any applications therefor, including any applications for registration, issuance, or grant thereof, owned or Controlled by a third party that are necessary for the practice of the license granted hereunder that were not owned or Controlled by FG as of the Effective Date and that do not qualify as Pre-existing Third Party Intellectual Property under Section 1.56.

1.34“GMP Guidelines” shall mean then-current applicable Good Manufacturing Practices guidelines and regulations of the FDA.

 

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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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EXECUTION COPY

 

1.35[*] shall have the meaning as set forth in Section 1.36 below.

1.36“[*] Percentage” shall be determined, for any Lead Compound, (i) by dividing (a) the [*], which shall be defined as the difference between (x) the [*], and (y) the [*], by (b) the [*]; and (ii) multiplying the result of (i) above by 100.

1.37“HIF” shall mean hypoxia inducible factor.

1.38“IND” shall mean an Investigational New Drug application, as defined in the U.S. Federal Food, Drug and Cosmetic Act and the regulations promulgated thereunder, or comparable filing in a foreign jurisdiction, in each case with respect to a Lead Compound for use within the Field.

1.39“Indemnitee” shall have the meaning as set forth in Section 17.4 below.

1.40“Indemnitor” shall have the meaning as set forth in Section 17.4 below.

1.41“Indications” shall mean those indications listed on Exhibit B and any other indications to be agreed upon hereafter between FG and Astellas, each of which shall be referred to as an Indication.

1.42“Initial Development Plan” shall mean the Initial Development Plan as described in Section 3.2.1 hereof.

1.43“Initiate” or Initiation” shall mean with respect to a particular clinical trial for a Lead Compound, the initial dosing of the first patient in such trial in accordance with the protocol therefor.

1.44“Inspected Party” and “Inspecting Party” shall have the meanings as set forth in Section 10.5 below.

1.45“Joint Development Committee” or “JDC” shall have the meaning as set forth in Section 2.1 below.

1.46“Lead Compound” shall mean any compound Controlled by FG that is designated by FG as a lead compound for clinical development in an Indication in accordance with Section 4.3 for the duration of such designation. Any Lead Compound which receives a Marketing Approval in the Astellas Territory shall remain a Lead Compound for the duration of such Marketing Approval.  As of the Effective Date, FG-2216 shall be deemed to be a Lead Compound.

1.47“Listed Price” shall have the meaning as set forth in Section 9.2.

1.48“Litigation Agreement” shall have the meaning as set forth in Section 14.4 below.

1.49“Major Indication” shall have the meaning set forth in Section 11.3.1 below.

 

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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


CONFIDENTIAL

EXECUTION COPY

 

1.50“Marketing Approval” shall mean, with respect to each Lead Compound, approval in the Astellas Territory by the Japanese Ministry of Health, Labour and Welfare, or in the FG Territory by U.S. or European regulatory authorities, as the case may be, to market such Lead Compound for an indication within the Field. It is understood that pricing or reimbursement approval shall constitute a part of the Marketing Approval. In any event, Marketing Approval shall be deemed to have occurred with respect to a Lead Compound no later than the date of the First Commercial Sale of such Lead Compound in the FG Territory or the Astellas Territory as the case may be, by or under authority of FG or Astellas respectively, or their Affiliate or Sublicensee, as the case may be, whether or not formal approval by the relevant health regulatory authority is required for the First Commercial Sale of such Lead Compound.

1.51“Marketing Approval Application” or “MAA” shall mean, within the FG Territory, a New Drug Application or similar application as required under the U.S. Federal Food, Drug and Cosmetics Act and the regulations promulgated thereunder, or such similar filing in Europe, or a comparable filing for Marketing Approval in the Astellas Territory, in each case with respect to a Lead Compound for use within the Field.

1.52“Net Sales” shall mean the gross amount billed or invoiced by Astellas, its Affiliates and its Sublicensees to unaffiliated third parties for the Lead Compound(s) in bona fide arm’s length transaction, less the following deductions:

 

i)

credits or allowances, if any, given or made on account of rejection or return of the Lead Compound(s);

 

ii)

trade and quantity discounts actually allowed and taken in such amounts as are customary in the trade;

 

iii)

duties, sales taxes, excise taxes, insurance and transportation charges actually paid; and

 

iv)

charge back payments or rebates actually paid to wholesalers.

1.53“Phase I” shall mean human clinical trials, the principal purpose of which is preliminary determination of safety in healthy individuals or patients as required in 21 C.F.R. §312.21, or similar clinical study in a country other than the United States, and for which there are no primary endpoints relating to efficacy included in the protocol.

1.54“Phase II” shall mean human clinical trials, for which the primary endpoints include a determination of dose ranges and/or a preliminary determination of efficacy in patients with the Indication being studied as required in 21 C.F.R. §312.21, or similar clinical study in a country other than the United States.

1.55“Phase III” shall mean human clinical trials, the principal purpose of which is to establish safety and efficacy of one or more particular doses in patients with the Indication being studied as required in 21 C.F.R. §312.21, or similar clinical study in a country other than the United States. For purposes of this Section 1.55, and Sections 1.53

 

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and 1.54 above, a particular trial that (i) is intended to overlap two phases of trials, (ii) combines the elements of two phases of trials, or (iii) is treated by the FDA or comparable foreign agency as two phases of trials, such as a Phase I/II trial or a Phase II/III trial, shall be deemed a trial of the later, as well as the earlier, phase (i.e., a Phase II and a Phase III, respectively).

1.56“Product Specification” shall mean, with respect to a Bulk Product, the written document describing, the testing procedures and results required to determine compliance with release specifications, including, and quality control testing procedures to be determined, and be amended from time to time, by mutual agreement of both parties. The release specifications of such Product Specifications shall be determined taking into account and shall be designed to meet the shelf life requirements of the Japanese Ministry of Health, Labor and Welfare for the Lead Compound, provided, that the Product Specifications shall not require compliance with such shelf life requirements.

1.57“Preexisting Third Party Intellectual Property” shall mean any intellectual property rights, including without limitation all patents, trademarks, copyrights, and any applications therefor, including any applications for registration, issuance, or grant thereof, owned or Controlled by a third party that are necessary for the practice of the license granted hereunder and that the existence of which was discoverable or otherwise could have been known on or prior to the Effective Date and were not owned or Controlled by FG as of the Effective Date.

1.58“Proof of Concept” shall mean for any Indication, a demonstration of correction of anemia in relevant patients in a human clinical study.

1.59“Prosecution and Interference Activities” shall mean the preparation, filing, prosecution and maintenance of patent applications and patents and any continuing applications thereof, and any re-examinations, reissues, renewals and requests for patent term extensions therefor, and any U.S., international or foreign counterparts of any of the foregoing, together with the conduct of any interference, opposition or other similar proceeding pertaining to patent applications or patents.

1.60“Protected Field” shall have the meaning as set forth in Section 14.1.

1.61“Reference Materials” shall have the meaning as set forth in Section 12.12 below.

1.62“Relevant Standards” shall have the meaning as set forth in Section 12.8 below.

1.63“Sales Price” shall mean the price per unit obtained by dividing the Net Sales during the relevant calendar quarter by the number of units sold during the same period.

1.64“Standard Materials” shall have the meaning as set forth in Section 12.12 below.

 

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1.65“Sublicensee” shall mean a third party to whom FG or Astellas has directly or indirectly granted the right in its respective territory to make, use and sell a Lead Compound or a third party to whom FG or Astellas has directly or indirectly granted the right to distribute a Lead Compound supplied by FG or Astellas (respectively). For purposes of this Agreement, FG and Astellas shall not be deemed Sublicensees of the other.

1.66“Technical Product Failure” shall mean as a [*], which is not attributed to Astellas’ failure to fulfill its obligations hereunder.

1.67“Third Party Agreements” shall mean collectively those agreements between FG and a third party existing as of the Effective Date, pursuant to which FG obtained rights applicable to the development, manufacture, sale or use of Lead Compounds hereunder (but excluding options or similar agreements to acquire such rights). If, after the Effective Date, FG enters into an agreement to license or acquire rights from a third party with respect to subject matter to be utilized in connection with Lead Compounds in accordance with Section 14.5 below, such agreements shall also be deemed Third Party Agreements for purposes of this Agreement.

1.68“Third Party Licensor” shall have the meaning as set forth in Section 14.5.1 below.

ARTICLE 2
JOINT DEVELOPMENT COMMITTEE

2.1Joint Development Committee. Astellas and FG shall establish a joint development committee to oversee, review and coordinate the research and development of Lead Compounds for applications within the Field pursuant to the Development Program (“Joint Development Committee” or “JDC”). From time to time, the JDC may establish subcommittees or project teams to oversee particular projects or activities, and such subcommittees or project teams will be constituted as the JDC agrees (e.g., for oversight of the development or other day-to-day matters).

2.2Membership. The JDC shall be comprised of an equal number of representatives from each of Astellas and FG, selected by such party. The exact number of such representatives shall be [*] for each of Astellas and FG, or such other number as the parties may agree. Subject to the foregoing provisions of this Section 2.2, FG and Astellas may replace its respective JDC representatives at any time, upon prior written notice to the other party.

2.3JDC Meetings. The JDC shall meet no fewer than [*] times each calendar year, or as otherwise agreed by the parties, with the understanding that [*] meetings are to be held at mutually agreed locations alternating among Japan, California, Hawaii, or at such other locations as the parties agree, and the other [*] meetings are to be held by means of telecommunication, videoconference or correspondence as deemed appropriate. The parties shall conduct team meetings at the same time and location as the JDC meetings. At its meetings, the JDC will, as applicable, (i) formulate and review the Development

 

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Program objectives, including approval of all proposed pre-clinical and clinical studies to be performed, (ii) monitor the progress of the Development Program toward those objectives, (iii) review and approve the Development Plan, pursuant to Section 3.3 of this Agreement, including review, approve and monitor the progress of the clinical and regulatory plans, (iv) resolve issues surrounding the marketing of the Lead Compounds, (v) discuss the selection of Lead Compounds, (vi) coordinate manufacturing issues, including the development of standards, scheduling of batch production, and qualification with regulatory requirements for the Astellas Territory, (vii) resolve issues arising out of the Development Program or this Agreement, and (viii) undertake and/or approve such other matters as are specifically provided for the JDC under this Agreement. One meeting each year will be focused specifically on setting Development Program goals and strategy. Other representatives of FG or Astellas may attend JDC or subcommittee meetings as non-voting observers. Astellas’ lead representative shall chair the meetings and shall be responsible for preparing the agenda and minutes for such meetings, and shall provide such minutes to FG in English. Such minutes as approved by the JDC shall constitute the official record of the actions of the JDC. The JDC may also convene or be polled or consulted from time to time by means of telecommunications, videoconferences or correspondence, as deemed necessary or appropriate. Each party shall bear its own personnel, travel and lodging expenses relating to JDC meetings.

2.4Decisions. Decisions of the JDC shall be made by unanimous agreement of the members present in person or by other means (e.g., teleconference) at any meeting; provided that at least two (2) representatives of each party is present at such meeting. In the event that the JDC is unable to reach unanimous agreement on an issue, the issue shall be referred for resolution in accordance with Article 19 hereof.

ARTICLE 3
DEVELOPMENT PLANS

3.1General. Subject to Section 3.2 below, Astellas shall prepare and propose to the JDC a detailed Development Plan pursuant to which the Development Program will be performed. The Development Plan shall specify the objectives and work plan activities by Astellas with respect to the Development Program.

3.2Annual Review

3.2.1Initial Development Plan. The initial Development Plan is attached hereto as Exhibit C (the “Initial Development Plan”), and shall be fixed for the period from the Effective Date through March 31, 2006, unless otherwise agreed by the JDC.

3.2.2Other. Beginning upon the date of signing of this Agreement and by December 31 of each year thereafter until expiration or termination of this Agreement, Astellas shall submit to the JDC the proposed plan required under Section 3.1 above for the following fiscal year, including for regulatory activities within the Astellas Territory. The JDC shall review such proposals as soon as possible and shall approve the Development Plan for such following fiscal year, with such changes as the JDC may agree to the plan proposed by Astellas, no later than March 15 of the current fiscal year.

 

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3.3Periodic Reviews. The JDC shall review the Development Plan on an ongoing basis and may make changes thereto including variances to the Development Plan in effect.

ARTICLE 4
DEVELOPMENT PROGRAM

4.1Development Program for the Astellas Territory. Astellas shall follow FG’s development activities for the Lead Compounds, (i.e., Astellas shall develop, and shall have the right and obligation to develop, only those compounds that FG has designated as Lead Compounds, for the duration of such designation and for which FG or its Sublicensee is pursuing clinical development in the FG Territory), for those Indications being developed by FG or its sublicensee, and such Astellas development shall comply with, without limitation the procedures set forth in Section 11.3.1. In fulfillment thereof, Astellas shall conduct, directly or through third parties, the Development Program for the Astellas Territory, all in accordance with the Development Plan then in effect, and shall be responsible for all costs related to the Astellas Territory. Astellas agrees to keep the JDC informed as to the progress of its activities under the Development Program for Lead Compounds hereunder. FG shall, subject to Section 4.2.2, provide reasonable assistance to Astellas regarding Astellas’ performance of its development activities within the scope of the Development Program hereunder and provide updates to Astellas as to the FG Development Program. It is understood and agreed that the Development Program for the Astellas Territory shall include all clinical trials and other development activities necessary to obtain Marketing Approvals for Lead Compounds for the Astellas Territory.

4.2Global Harmonization

4.2.1Reporting; Redundant Activities. FG shall provide to Astellas regular reports with respect to the FG Development Program with respect to the Lead Compounds. Such reports may be provided at the JDC meetings provided for in Section 2.3. Recognizing that the Lead Compounds may be developed on a global basis and that regulatory and budget efficiencies can be achieved through the worldwide use of appropriate data and files, the parties will seek to design pre-clinical and clinical development activities included in the Development Plan in a manner to maximize global clinical and regulatory harmonization.

4.2.2Additional Activities. Without limiting the obligations set forth in 4.2.1, the costs of any non-clinical or clinical developmental work, whether performed by Astellas or FG, to support needs specific to the Astellas Territory and not required to be performed for the FG Territory, or at the request of Astellas, shall be borne by Astellas.

4.3Selection of Lead Compounds. FG shall consult with Astellas with respect to Lead Compound selection, and shall provide to Astellas information as reasonably necessary to evaluate Lead Compound candidates in connection with the Lead Compound

 

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selection process, including without limitation the information relating to patent situations in the Astellas Territory. For the avoidance of doubt, such Lead Compound candidates shall potentially include any and all compounds Controlled by FG during the term hereof for use in the Field.  Notwithstanding anything contained in this Agreement, FG shall designate, at its sole discretion but in line with the basic policy that the same Lead Compound shall be Commercialized both in Astellas Territory and FG Territory for the same Indication(s), Lead Compound(s) in accordance with the terms of this Section 4.3, and shall notify the JDC of such designations. At any one time, FG may designate up to two (2) Lead Compounds for Commercialization in any Indication; provided, that in the event that FG designates two (2) Lead Compounds for Commercialization in an Indication, it shall designate one (1) as the primary Lead Compound and one (1) as the secondary Lead Compound. In the event FG determines to cease development of a primary Lead Compound in an Indication, FG may designate the secondary Lead Compound as the primary Lead Compound for such Indication. In the event, prior to Marketing Approval in the Astellas Territory, FG determines to stop development of a Lead Compound, FG shall notify the JDC, and upon such notification, such compound shall no longer be considered a Lead Compound; provided, however, that Astellas may complete those development activities on-going at the time of such notification for such Lead Compound for a reasonable period of time, unless such notification is based on safety concerns. In the event FG determines to [*], FG shall [*] within [*] days of such [*]. In the event that FG [*], Astellas may, subject to the [*], [*], provided, however, that the [*] shall apply upon the [*] set forth in such Sections, rather than the [*].

4.4Regulatory Matters

4.4.1Regulatory Filing. FG shall be responsible, directly or through third parties, for the preparation, filing and maintenance of all regulatory documents in the FG Territory with respect to the Lead Compound(s), which shall be filed in the name of FG or its designee. Astellas shall be responsible for all preparation, filing and maintenance of all regulatory documents in the Astellas Territory with respect to the Lead Compound(s), which shall be filed in the name of Astellas. Astellas shall select and own the trademark(s) to be used to identify any Lead Compound in the Astellas Territory.

4.4.2Reporting Adverse Experiences

(a)With respect to adverse drug experiences relating to any Lead Compound, the parties shall promptly report such experiences to the appropriate regulatory authorities in the countries in which such Lead Compound is being developed or commercialized, in accordance with the appropriate laws and regulations of the relevant countries and authorities, and each party shall ensure that its Affiliates and Sublicensees comply with such reporting obligations. In addition, in order that each party may be fully informed of these experiences, each party shall report to the other party all “adverse events” involving such Lead Compound. “Serious adverse events” for all fatal and life-threatening adverse events shall be reported to the designated safety contact person of the other party by e-mail within five (5) calendar days of a party’s and/or its agent’s becoming aware of such an event (a “reporting party”), and all other serious adverse events shall be forwarded to the other party within seven (7) calendar days of the reporting party’s

 

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and/or its agents becoming aware of such an event. To the extent legally possible, FG and Astellas shall report to the other all serious adverse events with respect to a Lead Compound in the Field at least twenty-four (24) hours prior to reporting the same to a regulatory authority, and shall report adverse events which may constitute a dose limiting toxicity in a reasonably prompt time after the occurrence of such event. The reporting party shall report all non-serious adverse events on a monthly basis; provided that, non-serious adverse event data arising from a clinical trial will be included in the clinical trial report which shall be prepared and sent to the other party as soon as practicable following completion of the final clinical report.

(b)An “adverse event” is any negative symptom experienced at the time of or after the taking of a medicinal (investigational) product, whether or not considered a medicinal (investigational) product related, including any side effects, injury, toxicity or sensitivity reaction, or significant failure of expected pharmacological action. Also included are instances of symptomatic overdose, abuse or withdrawal reactions.

(c)A “serious adverse event” includes any of the following outcomes: death, a life-threatening event; that is, an adverse event that puts the patient at risk of dying, requires hospitalization, prolongs existing hospitalization or results in persistent or significant incapacity or disability, congenital anomaly/birth defect. Other important medical events that may otherwise jeopardize a patient or may require intervention to prevent one of the statuses of patients listed in the preceding sentence shall also be considered serious.

(d)The parties also agree to develop and implement such other procedures as may be necessary or appropriate to ensure that each party remains in compliance with all reporting requirements imposed by any regulatory authority in the Astellas Territory, and in the FG Territory. Upon the Initiation of Phase III, FG shall implement and be responsible for the maintenance of a complete global safety database. FG will be responsible for preparing, with Astellas’ cooperation set forth below in this Section 4.4.2(d), Periodic Safety Reports for clinical studies requested by European and U.S. authorities, and Periodic Safety Update Reports (PSURs). FG shall send a draft PSUR for review to Astellas in the beginning of week 5 after database lock point. Astellas has one week for review. FG shall provide copies of the final PSURs to Astellas in the same timing as they are submitted to the authorities. Astellas will provide FG with the data needed for making the PSURs. Maintenance of Company Core Safety Information (CCSI) is under the responsibility of FG who will communicate all revisions to Astellas. FG shall prepare the periodic safety reports for clinical studies requested by European and U.S. authorities and provide Astellas with the copy of such reports at the time of submission to the regulatory authorities in the FG Territory. Astellas will provide FG with the data needed for making such periodic safety reports.

(e)Each party shall immediately inform the other party of measures taken in order not to jeopardize public health or hygiene including but not limited to, discontinuation of manufacture, import and marketing, clinical trial suspension, recall and disposal of the Lead Compound or the product or the prescription product, irrespective of whether it is due to regulatory actions or voluntary actions.

(f)Both parties hereby nominate the safety contact persons as follows:

 

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Medical Affairs Department

FibroGen, Inc.

225 Gateway Boulevard

San Francisco, California 94080

Attn: Vice President, Medical Affairs

Tel: 1-650-866-7875

Fax: 1-650-866-7360

E-mail:dyeowell@fibrogen.com

 

With a copy to:

Chief Executive Officer

FibroGen, Inc.

225 Gateway Boulevard

San Francisco, California 94080

Tel: 1-650-866-7200

Fax: 1-650-866-7201

E-mail:tneff@fibrogen.com

 

Pharmacovigilance Department, QA, RA, and
Pharmacovigilance Division

Astellas Pharma Inc.

[*]

The safety contact persons for each party hereto may be updated from time to time as necessary upon notice to the other party.

ARTICLE 5
RECORDKEEPING; PUBLICATION

5.1Reports and Records. Each of Astellas and FG shall use best efforts to maintain (or cause such records to be maintained) records of the Development Program and FG Development Program, respectively, in sufficient detail and in good scientific manner as will properly reflect all work done and results achieved in the performance of the Development Program or FG Development Program, as the case may be. Upon [*] days advance notice or such shorter time period as may be required in order to meet any regulatory requirements, each party shall allow the other party to have access to all records, materials and data generated by or on behalf of such party with respect to each Lead Compound for applications within the Field at reasonable times, in a reasonable manner and, upon request, to the extent required under Article 7 hereof.

5.1.1Retention. Each of Astellas and FG shall retain its records for the minimum period of time required by applicable law in all cases, and for not less than [*] following the expiration or termination of this Agreement.

 

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5.1.2Reports. Not less than [*] prior to each JDC meeting under Section 2.3 above, each of Astellas and FG shall provide the JDC with a written report in English; Astellas’ report summarizing the progress of the Development Program, including the developmental, clinical and other activities performed by Astellas, its Affiliates and/or Sublicensees with respect to each Lead Compound during the preceding period; and FG’s report summarizing the progress of the FG Development Program.

5.1.3Activities Outside the Field. The parties understand and acknowledge that FG is engaged in other research and development activities directed to prolyl hydroxylase inhibition and/or the stabilization of HIF, and that the focus of this collaboration and the Development Program is directed to the Field. Accordingly, it is understood that, notwithstanding any other provision of this Agreement, the obligations of FG specified herein to make available and disclose to Astellas data, technical information, scientific results and findings and other subject matter is limited in each case to subject matter directed to Lead Compounds within the Field.

5.2Review of Publications. As soon as is practicable prior to the oral public disclosure, and prior to the submission to any outside person for publication of scientific data resulting from the Development Program, in each case to the extent the contents of the oral disclosure or publication have not been previously disclosed pursuant to this Section 5.2 before such proposed disclosure, FG or Astellas, as the case may be, shall provide to the other party a copy of the publication, or a written summary of any oral disclosure, to be made or submitted, and shall allow the other party at least [*], to determine whether such disclosure or publication contains subject matter for which patent protection should be sought prior to publication or which either party believes should be modified to avoid disclosure of Confidential Information or regulatory or other issues. With respect to publications by investigators or other third parties of scientific data resulting from the Development Program, such disclosures and publications shall also be subject to review by the reviewing party under this Section 5.2.

5.2.1Publication Rights. Subject to the provisions of Articles 7 and 16, after the expiration of [*] from the date of receipt of such disclosure or publication, unless the authoring party has received the written notice specified below, the authoring party shall be free to submit such publication or to orally disclose or publish the disclosed research results in any manner consistent with academic standards.

5.2.2Disapproval of Publication. Prior to the expiration of the [*] period specified in Section 5.2.1 above, the reviewing party may notify in writing the submitting party of its determination that such oral presentation or publication contains Confidential Information of the reviewing party or objectionable material or material that consists of patentable subject matter of the reviewing party for which patent protection should be sought. In such event, and unless otherwise mutually agreed, the submitting party shall withhold publication of its disclosure.

 

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ARTICLE 6
DEVELOPMENT PROGRAM FUNDING

6.1Payments for Reimbursement; Net Payments.  FG hereby acknowledges receipt of U.S. $[*] on February 13, 2004, U.S. $[*] on January 28, 2005, and U.S. $[*] on March 22, 2005 as initial payments for reimbursement of historical research and development expenditures for the Lead Compounds. Astellas agrees to pay to FG the amounts set forth in Section 6.1.1 below. The parties hereto acknowledge that the Development Program hereunder involves a high degree of risk and uncertainty; accordingly, both parties hereto expressly disclaim any implied warranty as to the results of the Development Program.

6.1.1Reimbursement Payments. As reimbursement and payment for FG’s historical research and development expenditures with respect to pre-clinical and clinical development of Lead Compounds, Astellas agrees to make the following non-refundable, non-creditable (except as set forth in Section 14.3 below) reimbursement payments to FG upon the first occurrence of each event specified below (each, an “Event”):

 

EVENT

AMOUNT

1.         Upon [*], provided, that U.S. $[*] million of such amount shall be paid no later than [*] irrespective of whether the [*] has occurred.

U.S. $[*]

2.         Upon each of [*], for a total of U.S. $[*]

U.S. $[*]

3.         Upon Initiation of the first Phase III clinical trial in the Astellas Territory or in the event that Astellas chooses to utilize the Bridging Strategy, the payment shall be made concurrent with the payment required in paragraph 4 of this Section 6.1.1 below.

U.S. $10,000,000

4.         Upon the first filing of a Marketing Approval Application in the Astellas Territory.

U.S. $15,000,000

6.1.2Product Approval Payments. As reimbursement and payment for FG’s historical and ongoing research and development expenditures with respect to pre-clinical and clinical development of Lead Compounds and as payment for the successful marketing and sales of Lead Compound(s), Astellas agrees to make the following non-refundable, non-creditable (except as set forth in Section 14.3 below) reimbursement payments to FG upon the first occurrence of each Event (other than paragraph 5 of this Section 6.1.2 below) specified below. Notwithstanding the foregoing, in the event that Astellas decides not to pursue Commercialization in [*] set forth in paragraph 3 or 4 of this Section 6.1.2, the milestone payment associated with the [*] set forth in paragraph 3 shall be due and payable upon the first [*] of either [*], and the milestone payment associated with the [*] set forth in paragraph 4 shall be due and payable upon the second [*] for a [*]; and in

 

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the event Astellas decides to pursue only [*] set forth in paragraph 3 or 4 of this Section 6.1.2, and pursues Commercialization of either of the [*], the milestone payment for associated with the [*] for the [*] shall be due and payable upon the first [*] for a [*]; and in the event that Astellas decides to pursue [*] set forth in paragraphs 3 and 4 of this Section 6.1.2 and also does not pursue [*], the parties shall a [*] for which the milestone payments associated with the [*] set forth in paragraph(s) 3 and/or 4 of this Section 6.1.2, as the case may be, shall be due, as negotiated in good faith by the parties hereto.

 

EVENT

AMOUNT

1.         Upon the first [*] for the [*]; provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[*] for a total of U.S. $[*]

U.S. $[*]

2.         Upon the first Marketing Approval in the Astellas Territory for the “Treatment of anemia in patients with chronic kidney disease undergoing dialysis”; provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[*] for a total of U.S. $[*].

U.S. $12,500,000

3.         Upon the first [*] in the Astellas Territory for the [*]; provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[*] for a total of U.S. $[*].

U.S. $[*]

4.         Upon the first [*] in the Astellas Territory for the first indication within [*] (see Exhibit B); provided, that in the event Astellas chooses the Bridging Strategy, such payment shall be increased by an additional U.S. $[*] for a total of U.S. $[*].

U.S. $[*]

5.         Upon [*] in the Astellas Territory for each of up to [*] indications listed on Exhibit B, including separate indications within [*] up to a total of U.S. $[*].

U.S. $[*]

6.1.3Sales Success Payments. As reimbursement and payment for FG’s historical and ongoing research and development expenditures with respect to pre-clinical and clinical development of Lead Compounds and as payment for the successful marketing and sales of the Lead Compound(s), Astellas agrees to make the following non-refundable, non-creditable (except as set forth in Section 14.3 below) reimbursement payments to FG upon the first occurrence of the Event specified below.

 

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EVENT

AMOUNT

Upon receipt of [*] aggregate annual Net Sales achieved for the first time in the Astellas Territory for all indications and Lead Compounds by Astellas and its Affiliates and Sublicensees.

U.S. [*]

If at the occurrence of an Event (except for Event 2) as set forth in Section 6.1.1 above with respect to a particular Lead Compound the payment corresponding to the occurrence of any preceding Event (except for Event 2) (i.e., “previous” as contemplated by the Event number sequence specified above) has not been made, then the corresponding payment(s) for such preceding Event (except for Event 2) shall then be due.

The payments set forth in Sections 6.1.1, 6.1.2 and 6.1.3 hereof shall each be due and payable within [*] after occurrence of the corresponding Event. Astellas agrees to promptly notify FG in writing of its achievement of any Event under Sections 6.1.1, 6.1.2 and 6.1.3.

ARTICLE 7
USE OF PRECLINICAL AND CLINICAL DATA

7.1Exchange. Subject to the provisions of this Article 7 and Article 16 below, the parties shall have access to the underlying preclinical and clinical data (including raw data thereof), analysis, reports, protocols and correspondence (collectively with such filings, “Data”), at reasonable times, upon fifteen (15) days advance notice or such shorter notice as may be required in order to meet any regulatory requirements and (upon request) in English, (it being understood and agreed that Astellas shall provide in English without cost to FG summaries of all final reports and all documents necessary to comply with regulatory and legal requirements, and shall provide all other documents in English with reasonable costs shared equally between the parties) of the other party in accordance with the following:

(a)FG shall have access to and the right to use for any purpose, any Data developed by or on behalf of Astellas or its Affiliates or Sublicensees in the course of the Development Program with respect to indications within the Field for Lead Compounds. Astellas shall obtain from such Sublicensees access to all Data prepared by or for such Sublicensee with respect to a Lead Compound, with the right to provide such Data and/or access to FG and its Sublicensees, and any sublicense failing to provide such obligation on the part of the Sublicensee shall be voidable at the option of FG.

(b)Astellas shall have access to and the right to use solely for the purpose of this Agreement, any Data developed by or on behalf of FG or its Affiliates or Sublicensees with respect to Lead Compounds in connection with the Field (i) to the extent necessary to support the application to the regulatory authority in the Astellas Territory or to fulfill other Japanese Ministry of Health, Labor and Welfare regulatory requirements, or (ii) if not necessary to support such application or to fulfill such Japanese Ministry of Health, Labor and Welfare regulatory requirements, to the extent FG is permitted subject to FG’s third party

 

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obligations; provided that FG shall [*] negotiate the availability of such Data to Astellas from such Sublicensee, and provided, further, that Astellas agrees not to use or disclose to third parties any such data for purposes outside the Field except as authorized under this Agreement.

7.2Disclosure. Subject to the provisions of this Section 7.2, FG and Astellas may each provide copies or summaries of Data to its Affiliates and/or its permitted Sublicensees to the extent reasonably necessary for the development and commercialization of Lead Compounds in accordance with this Agreement, or in the case of FG of products other than Lead Compounds. It is understood that the foregoing shall include the right to disclose Data to third parties with whom Astellas or FG are discussing entering into agreements for such permitted purposes, subject to reasonable conditions of confidentiality, provided, that Astellas may not disclose any Data to any third party competitor of FG within the Field worldwide without the prior written consent of FG.

7.3Regulatory Requirements. Notwithstanding the provisions of Section 7.2, in all agreements with third parties or Affiliates involving the development of Data, FG and Astellas, respectively, shall require that such third parties and Affiliates provide the other party with all such Data, to the extent such Data is required in order for each party to meet its obligations to the other party under Section 4.4.2 above.

7.4Review of Protocols. Astellas agrees that all final protocol summaries for all clinical trials and GLP toxicology studies to be conducted by or under authority of Astellas will be subject to the review and approval of the JDC, in accordance with the following procedures set forth in this Section 7.4. Astellas shall submit to FG and the JDC the original draft protocol summary in English for any clinical trial or GLP toxicology study it proposes to conduct, and such protocol summary shall be reviewed and approved by the JDC. The protocol summary shall contain all information as may be requested by the JDC. Upon Astellas’ completion of the final protocol for the proposed clinical trial or GLP toxicology study, in the event that such protocol deviates from the original protocol summary, Astellas shall resubmit to FG and the JDC for review and approval a revised, final protocol summary that indicates all changes from the original protocol summary. Notwithstanding the foregoing, FG reserves the right to request and Astellas shall provide any portion of full text of the protocols in English for review by the JDC, which portion is at issue. In the event FG requests such a full text protocol, it shall review and provide comments to the JDC as soon as practicable, and within five (5) business days of receipt.

ARTICLE 8
MARKETING RIGHTS

8.1Astellas. Astellas shall have the exclusive right to market, sell and distribute the Lead Compounds supplied by FG for use in the Astellas Territory within the Field under the license granted in Article 13. Astellas may exercise its rights under this Section 8.1 through one or more Sublicensees; provided, that any such Sublicensee agrees to terms identical in all material respects to those contained in this Agreement, and, provided,

 

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further, that any arrangement between Astellas and an Astellas Sublicensee with respect to a Lead Compound shall be subject to the requirements of Section 13.2.

8.2FibroGen. FG shall have the exclusive right, including the right to authorize others, to market, sell and distribute the Lead Compounds for any use in the FG Territory. Subject to the restrictions contained in Section 8.3.4 hereof, FG retains the exclusive right, including the right to authorize others, to market, sell and distribute worldwide the Lead Compounds for use outside the Field.

8.3Covenants

8.3.1General. It is understood that, with respect to any particular Lead Compound, whether or not the use and sale of such Lead Compound by FG and/or Astellas in any country requires a license under intellectual property rights of the other, neither FG nor Astellas shall market, sell or distribute a Lead Compound anywhere in the world except in accordance with this Agreement, including this Article 8.

8.3.2Independent Activities by Astellas. During the term of this Agreement, in the event Astellas seeks to Commercialize any molecules for the Field or the Expanded Field, except for actions taken within the Field in the course of the exercise of the license granted under Section 13.1 hereof and expressly authorized under this Agreement, Astellas shall notify FG immediately upon the commencement of any such activities, and provided that [*] such activities are and will be in the future conducted completely independently of any of FG Technology and/or any other FG materials, confidential information, intellectual property or other related information provided by or on behalf of FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, Astellas may proceed with such Commercialization, subject at all times to the obligations contained in this Agreement with respect to any intellectual property in connection with or related to such activities and FG’s right to terminate this Agreement pursuant to Section 18.2.1 hereof.

8.3.3Use of FG Technology by Astellas. Astellas shall use the FG Technology only to exercise the rights granted under Section 13.1 of this Agreement and as expressly authorized under the Development Program, and shall not under any circumstances use or apply any FG Technology, including without limitation any FG know-how and/or any other FG materials, confidential information, intellectual property or other related information provided by FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, for any use outside the Field at any time or within the Field after the expiration or termination of this Agreement.

8.3.4Activities Outside Field by Astellas. Without limiting the foregoing, Astellas agrees that during the term of this Agreement it will not (and will not authorize any third party, including, without limitation, any Affiliates or Sublicensees, to) (i) Commercialize any Lead Compound within the Field in the Astellas Territory, except a Lead Compound that has been designated a Lead Compound by the JDC and that has received Marketing Approval in the Astellas Territory for use in the Field, (ii) Commercialize

 

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any Lead Compound for use outside the Field or outside the Astellas Territory, (iii) provide any supplies of any Lead Compound to any third party, including, without limitation, any Affiliates or Sublicensees, which Astellas knows or has reason to know is being marketed, sold or distributed for use outside the Field or outside the Astellas Territory, (iv) conduct or sponsor, or provide any supplies of any Lead Compound for use in, any clinical trial designed to demonstrate that a Lead Compound can be used outside the Field, or (v) seek regulatory approval of, or use labeling for a Lead Compound stating that such Lead Compound is for use outside the Field.

8.3.5Activities in Astellas Territory by FG

During the term of this Agreement, FG shall not Commercialize by itself or through its Sublicensee any Lead Compound or other compound, whether or not designated as a Lead Compound, within the Field in the Astellas Territory, or any Lead Compound outside the Field in the Astellas Territory, provided, however, that FG may develop a Lead Compound or other compound in the Astellas Territory in those Indications for which Astellas has determined not to pursue Commercialization or for which Astellas has lost the right to pursue Commercialization due to failure to meet diligence obligations hereunder; and provided, further, that FG may Commercialize compounds other than Lead Compounds outside the Field in the Astellas Territory, irrespective of whether such compound has the effect of stabilizing HIF causing the stimulation of erythropoiesis (including an increase in endogenous erythropoietin production) and/or a subsequent increase in hematocrit through modulation of prolyl hydroxylase and/or asparaginyl hydroxylase.

ARTICLE 9
TRANSFER PRICING

9.1Transfer for Non-Commercial Purpose. In exchange for the transfer of any Lead Compound to Astellas for a non-commercial purpose, Astellas shall pay FG the total amount of the Fully Burdened Costs for such Lead Compound as reasonably determined by FG. Lead Compound transferred to Astellas for a non-commercial purpose shall not be used for a commercial purpose.

9.2Transfer for Commercial Purpose. For any Lead Compound transferred to Astellas to be used for any commercial purpose, in exchange for the transfer of such Lead Compound to Astellas, Astellas shall pay FG the amounts set forth in this Section 9.2. All transfers of Lead Compound for use following Marketing Approval shall be deemed transfers for a commercial purpose, except transfers under Section 9.2(c), and transfers for the purpose of conducting clinical trials, which shall be considered transfers for a non-commercial purpose.

(a)For any quantities of Lead Compound shipped by FG to Astellas prior to the issuance of the national health insurance price as determined by the Japanese Ministry of Health, Labour and Welfare (the “Listed Price”), Astellas shall pay for such quantities at a price equal to [*] of the estimate of the Listed Price as determined in good faith by FG and Astellas, subject to adjustment upon the issuance of the actual Listed Price. Upon the issuance of such Listed Price by the Japanese Ministry of Health, Labour and Welfare, Astellas shall pay to

 

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FG, or FG shall reimburse Astellas, as the case may be, the amount of any difference between the payment made for such Lead Compound at the estimated Listed Price and the payment required based upon the actual Listed Price.

(b)For all other transfers of Lead Compound, except as set forth in subparagraphs (c) or (d) below, Astellas shall pay for such quantities at a price equal to [*] of the Listed Price. In the event that a new Listed Price has been notified to Astellas by the Japanese Ministry of Health, Labour and Welfare before implementation of the new Listed Price, then such new Listed Price shall be used for calculation of the price of Lead Compound to be shipped on and after the later to occur of (i) [*] before implementation of the new Listed Price, and (ii) the date upon which Astellas has amended the price of Lead Compound to wholesalers in response to such notification by the Japanese Ministry of Health, Labour and Welfare, even before implementation of the new Listed Price.

(c)With respect to Lead Compound to be distributed as samples to medical providers and for which Astellas shall not receive any payment or other consideration, Astellas shall pay to FG the sum of its Fully Burdened Costs for amounts of Lead Compound shipped to Astellas; provided, however, that the parties shall mutually agree upon the amount of such samples for distribution without consideration in the Astellas Territory.

(d)Upon the later of (i) the initial retail sale of a generic equivalent (as defined by the Japanese Ministry of Health, Labour and Welfare) of such Lead Compound in the Territory, and (ii) and the expiration of the last to expire of the FG Patents with respect to such Lead Compound effectively precluding third parties from selling said generic equivalent, for any quantities shipped by FG to Astellas, Astellas shall pay FG for such quantities [*] of the Sales Price; provided, however, that in the event that the payment of the [*] of the Sales Price would result in FG’s [*] Percentage falling below [*], FG shall have the option to initiate a renegotiation of the transfer price upon notice to Astellas, in which case the parties shall use best efforts in good faith to renegotiate reasonable terms for the transfer price; provided, further, that in the event the transfer price is not renegotiated to FG’s satisfaction or FG elects not to initiate a renegotiation, FG may elect to terminate its manufacturing obligations by written notice to Astellas, and FG and Astellas shall negotiate reasonable terms for transfer of manufacturing. During such period of renegotiation, FG shall transfer the Lead Compound to Astellas at a price equal to the greater of [*] of the Sales Price and the price resulting if FG’s [*] Percentage for such Lead Compound is equal to [*].

9.3Payment. Any payments to be made with respect to the transfer of any Lead Compound in accordance with Section 9.1 or 9.2 above shall be immediately due to FG upon shipment, which shall be paid by Astellas to FG no later than [*] of the date of invoice, which invoice FG shall deliver to Astellas upon Delivery of Lead Compound to Astellas pursuant to Section 9.2(a), (b) or (c), and shall be made in U.S. dollars. For transfer of any Lead Compound in accordance with Section 9.1 or 9.2(c) above, FG shall deliver to Astellas, within ten (10) days of receipt of a firm commitment order from Astellas, an invoice for the estimated Fully Burdened Costs of the Lead Compound to be transferred to Astellas. Within [*] after the transfer of the Lead Compound to Astellas, FG shall provide a revised final invoice to Astellas that shall indicate the actual Fully Burdened Costs of the

 

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Lead Compound. If the actual Fully Burdened Costs are less than the estimated Fully Burdened Costs, FG shall include a reimbursement payment to Astellas for the difference between the initial estimated Fully Burdened Costs and the actual Fully Burdened Costs. If the actual Fully Burdened Costs are greater than the estimated Fully Burdened Costs, Astellas shall pay such difference within [*] of receipt of an invoice from FG for such amounts. For payments for the transfer of Lead Compound under Section 9.2(d) hereof, FG’s invoice to Astellas shall be calculated based on the current Listed Price as set by the Japanese Ministry of Health, Labour and Welfare. Upon calculation of the Sales Price, Astellas shall submit, for any amounts actually sold, the Sales Price to FG, and FG shall credit Astellas for the difference between the invoice cost, cost calculated based on the Listed Price and the cost calculated based on the Sales Price.

9.4Reference Materials; Standard Materials. In exchange for the transfer by FG of any Reference Materials or Standard Materials for the purposes of conducting analytical, release, stability and other studies authorized under the Development Program, Astellas shall pay to FG, FG’s Fully Burdened Costs of such materials as reasonably determined by FG.

ARTICLE 10
ADDITIONAL PAYMENTS; BOOKS AND RECORDS

10.1Quarterly Reports. Astellas shall make quarterly reports to FG within sixty (60) days after the end of each calendar quarter (April 1 though June 30, July 1 through September 30, October 1 though December 31, January 1 through March 31), which reports shall include, (a) the Net Sales, unit shipments and other distributions, including samples, by Astellas, and its Affiliates and Sublicensees, in such calendar quarter and (b) such other information as may be reasonably requested by FG to ensure either proper payment by Astellas of amounts required under this Agreement or to calculate payments with respect to FG’s Third Party Agreements. Concurrently with making such report, Astellas shall remit payment to FG for any payments due under this Agreement.

10.2Payment Method. All payments under this Agreement shall be made by bank wire transfer in immediately available funds to an account designated by the payee. All such payments made by or on behalf of Astellas hereunder shall be made by a Japanese entity. All dollar amounts specified in this Agreement, and, except as specifically authorized under Section 10.3 hereof, all payments made hereunder, are and shall be made in U.S. dollars. Any payments due under this Agreement which are not paid by the date such payments are due under this Agreement shall bear interest to the extent permitted by applicable law at the U.S. prime rate per annum quoted in the “Money Rates” column of The Wall Street Journal (U.S., Western Edition) on the first business day after such payment is due, plus an additional [*], calculated on the number of days such payment is delinquent. This Section 10.2 shall in no way limit any other remedies available to either party.

 

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10.3Currency Conversion. In the event that the amount of an Astellas payment obligation in U.S. dollars must be determined by the calculation of an underlying amount received by Astellas in Japanese Yen utilizing the U.S. dollar-Japanese Yen exchange rate (i.e., a transfer payment under Section 9.2(a), (b) or (d) hereof), currency conversion from Japanese Yen to U.S. dollars shall be made using the closing exchange rate reported in the Wall Street Journal (U.S. Western Edition) for the date on which the Lead Compound is Delivered to Astellas. If any such payment is not made by the due date, the exchange rate utilized for determination of such payment obligation shall be the exchange rate [*] reported in the Wall Street Journal (U.S. Western Edition) during the period from the date of invoice through the due date, not including any additional amounts owed under Section 10.2 hereof.

10.4Taxes

10.4.1Generally. Each party shall bear and, except as otherwise expressly provided in this Section 10.4, pay any and all taxes, duties, levies, and other similar charges (and any related interest and penalties), however designated, imposed on that party as a result of the existence or operation of this Agreement. If laws or regulations require that taxes be withheld, the paying party will (i) timely pay the taxes to the proper taxing authority, and (ii) send proof of payment to the other party within [*] following that payment.

10.4.2Certain Payments. Notwithstanding Section 10.4.1, all payments by Astellas required under this Agreement above, including under Section 6.1.1 are expressed as net amounts and shall be made free and clear of, and without reduction for, any withholding taxes, provided, however, that in the event that any withholding taxes are due on the payments Astellas shall make to FG under Sections 6.1.2 and 6.1.3, Astellas shall make such payments directly to the Japanese Tax Authority and shall be entitled to reduce the amount paid to FG by [*] of the amount of the withholding taxes paid to Japanese Tax Authority in respect of such payment, unless the amount of such withholding taxes is reduced by a decision of the Japanese tax authority, or is subsequently adjusted downward as result of appeal, in which event the next payment due hereunder, including, without limitation, a transfer payment or a payment upon termination, shall be increased by such amount. Any such taxes which are otherwise imposed on payments to FG shall be the sole responsibility of Astellas. Astellas shall provide FG with official receipts issued by the appropriate taxing authority or such other evidence as is reasonably requested by FG to establish that such taxes have been paid. Astellas and FG shall cooperate to minimize the withholding taxes due on the amounts payable by Astellas to FG hereunder to the extent permissible under law, including, but not limited to, making appropriate application(s) to the tax authorities within the Astellas Territory. If possible, FG shall use its reasonable efforts to apply for the tax refund from U.S. tax authorities for the withholding taxes paid to the Japanese Tax Authority on the payment U.S. $[*] payment made by Astellas to FG on January 13, 2004 as set forth in Section 6.1 when such application for the tax refund becomes possible, and if FG has received any such tax refund, FG shall reimburse to Astellas for the amounts corresponding to the withholding taxes paid in Astellas’ accounts as set forth above.

 

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10.5Records; Inspections. Astellas shall keep, and require its Affiliates and Sublicensees to keep, complete, true and accurate books of accounts and records for the purpose of determining payments due pursuant to this Agreement. Such books and records shall be kept for at least [*] following the end of the calendar quarter to which they pertain. FG shall keep, and require its Sublicensee(s) to keep, complete, true and accurate books of accounts and records for the purpose of verifying the accuracy of the [*] Percentage and Fully Burdened Costs. Such records will be open for inspection at the principal place of business of each party (the Inspected Party) during such [*] period by an independent auditor chosen by the other party (the Inspecting Party) and reasonably acceptable to the Inspected Party for the purpose of verifying the amounts payable by Astellas to FG hereunder or the accuracy of the [*] Percentage and/or Fully Burdened Costs. Such inspections may be made no more than once each calendar year, at reasonable times and on reasonable notice. Any books of accounts or records shall not be inspected more than once. The independent auditor retained by the Inspecting Party shall be obligated to execute a reasonable confidentiality agreement with the Inspected Party prior to commencing any such inspection, which, among other customary clauses, contains the provisions to the effect that such auditor shall not disclose to the Inspecting Party any information other than as necessary to accomplish the purpose of the inspection. Inspections conducted under this Section 10.5 shall be at the expense of the Inspecting Party. Any underpaid or overcharged amounts that are discovered will be paid by the Inspected Party, and with interest on such underpaid or overcharged amounts at the rate set forth in Section 10.2 above. The parties will endeavor to minimize disruption of the Inspected Party’s normal business activities to the extent reasonably practicable.

ARTICLE 11
DUE DILIGENCE

11.1Astellas’ Due Diligence. Astellas shall use its commercially reasonable efforts (i) to conduct any development work undertaken under the Development Program, and any and all clinical trials (including without limitation Phase III) required to obtain, and thereafter to take such other actions as are necessary to obtain, Marketing Approvals for any Lead Compound in the Astellas Territory as soon as practicable, and (ii) to launch each such Lead Compound in the Astellas Territory as soon as practicable after receiving Marketing Approval in the Astellas Territory for such Lead Compound.

11.2FG’s Due Diligence. FG shall use its commercially reasonable efforts to conduct, and to the extent possible taking into account safety and other applicable issues, complete a Phase II clinical trial with FG-2216 or another Lead Compound in the FG Territory.

11.3Development Diligence

11.3.1Astellas shall pursue development of Indications according to the following terms: (i) Astellas shall pursue Commercialization in “Treatment of anemia in patients with chronic kidney disease undergoing dialysis” and “Treatment of anemia in

 

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patients with chronic kidney disease not undergoing dialysis”; (ii) Astellas shall notify FG within six (6) months of the execution of this Agreement whether it shall pursue Commercialization in [*]; (iii) Astellas shall notify FG within six (6) months of the date FG notifies Astellas that it has demonstrated Proof of Concept whether it will pursue Commercialization in [*]; (iv) Astellas shall notify FG within six (6) months of the date FG notifies Astellas that it has demonstrated Proof of Concept whether it will pursue Commercialization in [*]; and (v) Astellas shall notify FG, upon Marketing Approval for any Lead Compound in each of the following Indications, whether it will pursue Commercialization of such Indication: [*], and any other indications to be added hereafter to the definition of the Indication by mutual agreement; and (vi) if FG is pursuing Commercialization of [*], Astellas shall notify FG after Marketing Approval whether it shall pursue Commercialization of such Indication. Should Astellas inform FG that it does not wish to pursue Commercialization of any Indication, or should Astellas fail to meet the due diligence obligations under Section 11.3.2 for any Indication as set forth in Section 11.3.1(iv) or under Section 11.3.3 for any Indication as set forth in Section 11.3.1(v), such Indication shall no longer be considered an Indication for the purposes of this Agreement, and Astellas shall have no right or shall lose any right with respect to such Indication under this Agreement including, without limitation, the licenses granted under Sections 8.1 and 13.1 hereof. Each Indication for which Astellas is obligated to pursue Commercialization under Section 11.3.1(i) or for which it decides to pursue Commercialization under Sections 11.3.1(ii), (iii) or (iv) shall be a “Major Indication”.

11.3.2In addition to the obligations set forth in Section 11.1 and 11.3, for each Major Indication, until such time as Astellas obtains Marketing Approval in the Astellas Territory for such Major Indication, with respect to each Lead Compound for each Major Indication, Astellas shall:

(a)If required for development of a Lead Compound in an Indication, Initiate Phase I clinical trials within [*] after the later of (i) the Effective Date, for Indications for which FG has commenced clinical trials prior to the execution of this Agreement, and (ii) FG’s or its Sublicensees Initiation of a Phase I clinical trial for other such Indications.

(b)Initiate Phase II clinical trials within the later of (i) [*] after FG’s, or its Sublicensee’s, Initiation of Phase II, (ii) [*] after Astellas’ Completion of its Phase I clinical trial(s), (iii) if Astellas’ obligations under this Subsection 11.3.2(b) are triggered upon FG’s notification of demonstration of Proof of Concept in an Indication, [*] after the date Astellas notifies FG that it will pursue Commercialization in such Indication, and (iv) in the event Astellas’ obligations under this Section 11.3.2(b) are triggered by the designation of a secondary Lead Compound as a primary Lead Compound, [*] after such designation.

(c)Either notify FG of its intent to employ the Bridging Strategy, if applicable, or Initiate Phase III clinical trials within [*] of the later of (i) FG’s, or its Sublicensee’s Initiation of a Phase III clinical trial and (ii) Astellas’ Completion of its Phase II clinical trial(s).

 

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11.3.3For each of the Indications set forth in Section 11.3.1(v), Astellas shall Initiate Phase II clinical studies within [*] of its notification to FG that it will pursue Commercialization in such Indication.

11.3.4Astellas’ diligence obligations set forth in Section 11.3.2 shall apply to all Lead Compounds designated by FG, provided, that for each Indication for which such diligence obligations apply, the diligence obligations shall only apply to the primary Lead Compound designated by FG, and for the secondary Lead Compound, Astellas’ diligence obligations shall be limited to those set forth in Section 11.3.2(a) until the designation of the secondary Lead Compound as the primary Lead Compound, provided, further, upon such designation, that such diligence obligation shall be expanded to include the requirement that Astellas complete the Phase I clinical studies required to Initiate Phase II clinical studies in the Indication with such secondary Lead Compound.

ARTICLE 12
MANUFACTURING RIGHTS

12.1Procedures. FG shall have the exclusive right to determine the methods and procedures for the manufacture of all Lead Compounds. If FG intends to make any change in the methods or procedures, including, without limitation, manufacturing process, analyzing process and/or site change for manufacture of the Lead Compounds, FG shall notify Astellas in writing of such intended change; provided, that if in Astellas’ reasonable opinion, such change may lead to any amendment to the relevant Marketing Approval or Marketing Approval Application, Astellas shall use best efforts to (i) as soon as possible petition the Japanese Ministry of Health, Labor and Welfare to make the change without an amendment to the Marketing Approval or MAA and shall concurrently prepare an application for amendment to the Marketing Approval or MAA, and (ii) if the Japanese Ministry of Health, Labor and Welfare determines such an amendment is required, shall notify FG and submit the application for amendment immediately following notice of such requirement, and FG shall not make the intended change without a prior written consent from Astellas, such consent not to be unreasonably withheld or delayed, provided, further, that consent shall be deemed granted upon notice that an amendment is not required or approval of an amendment from the Japanese Ministry of Health, Labor and Welfare. FG shall provide Astellas with all the data and information necessary for Astellas to amend the Marketing Approval or MAA in Astellas Territory and shall continue to supply Astellas with the Lead Compound as manufactured with the manufacturing methods and procedures or at the manufacturing site described in Astellas’ (or its Affiliate's or Sublicensee's) then current Marketing Approval or MAA until Astellas will have finished the necessary amendment to the relevant Marketing Approval or MAA or received notice that an amendment is not required.

12.2FG Right. FG shall have the worldwide exclusive right (itself or through third party vendors) to manufacture (or have manufactured) Lead Compounds. Astellas and its Affiliates and Sublicensees shall not directly or indirectly make, produce or manufacture any Lead Compounds.

 

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12.3Manufacture and Supply. FG shall have the exclusive right and obligation to supply the Lead Compounds to Astellas and its Affiliates and Sublicensees for all development and commercial purposes, and Astellas and its Affiliates and Sublicensees shall purchase such Lead Compounds exclusively from FG. It is understood that FG may engage subcontractors with respect to the manufacture of such Lead Compounds to fulfill its supply obligations to Astellas hereunder. In all cases, supply by FG of Lead Compounds hereunder shall be Ex Works (Incoterms 2000) the manufacturing facility. Subject to Section 8.3.5 hereof, nothing herein is intended to preclude FG from granting rights to supply or supplying (a) any Lead Compound outside of the Astellas Territory to any third party for use within or outside the Field, or (b) any compound Controlled by FG within the Astellas Territory except for a Lead Compound for the duration of its designation in compliance with the terms and conditions of this Agreement.

12.4Product Specifications. The Lead Compounds to be supplied by FG hereunder shall meet the Product Specifications. In addition to, but not in limitation of, the foregoing, FG and Astellas agree that upon Marketing Approval for any Lead Compound, FG’s obligation to supply Astellas with Lead Compound shall be limited to, and all payment obligations set forth in Section 9.2 shall be based on, the supply of Bulk Product, unless otherwise agreed by the parties. The packaging for the Lead Compound to be distributed commercially by Astellas shall contain a clearly visible acknowledgment that the Lead Compound was manufactured by FG, and shall contain a registered trademark of the FG logo or other trademark approved by FG.

12.5Orders Forecast

12.5.1Orders for Non-Commercial Use. In connection with the supply of any Lead Compound for non-commercial use in the Territory, Astellas shall provide FG with a firm purchase order as early as possible prior to its requirements, and in no event less than [*] prior to the shipment or other release date(s) requested by Astellas for such Lead Compound. FG shall provide such Lead Compound to Astellas as soon as practicable within such time period, subject, prior to Marketing Approval, to the reasonable lead time requirements of third party contract manufacturers. All forecasts shall be prepared in good faith in order to facilitate FG's manufacture and shipment of the Lead Compound in compliance with this Agreement.

12.5.2Forecast and Order for Commercial Use. In connection with the supply of any Lead Compound for commercial use in the Astellas Territory upon FG’s request, Astellas and FG shall negotiate in good faith appropriate forecasting and firm purchase order lead times, taking into consideration the reasonable notice requirements of FG and its third party manufacturers. All forecasts shall be prepared in good faith in order to facilitate FG's manufacture and shipment of the Lead Compound in compliance with this Agreement.

12.6Shipment. Astellas, or FG at Astellas’ request if specified in a purchase order by Astellas, shall arrange for shipment of the Lead Compound as specified in each purchase order by Astellas, Ex Works (Incoterms 2000) the manufacturing facility. For

 

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purposes of this Agreement, and notwithstanding anything to the contrary contained within the term “Ex Works”, it is hereby acknowledged and agreed that title and risk of loss shall transfer to Astellas from receipt by Astellas at the manufacturing facility. Astellas shall bear the costs of such carrier, including the costs of insurance of the shipment, and all customs, duties, sales taxes and other governmental charges related to the importation and sales of the Lead Compound.

12.7Inspection of Shipment/Right to Reject. Each shipment of Lead Compound from FG to Astellas shall contain such laboratory and quality control certificate as are necessary to show that the Lead Compound is in conformity with the Product Specifications. Astellas shall promptly inspect each shipment. In the event that any portion of the shipment fails to conform to the Product Specifications, Astellas shall notify FG within [*] of Astellas’ receipt of such shipment. Such notice shall specify the manner in which the Lead Compound fails to meet the Product Specifications. In the absence of such notification, Astellas shall be deemed to have accepted the shipment. FG and Astellas agree to consult with each other to resolve any discrepancy between each other’s determinations regarding any possible nonconformity of the Lead Compound. If such consultation does not resolve the discrepancy, the parties agree to nominate a reputable independent laboratory or other independent third party, in each case acceptable to both parties, to carry out tests on representative samples taken from such shipment, and the results of such tests shall be binding on both parties. If the results of such tests demonstrate that the Lead Compound does not meet the Product Specifications, then FG shall pay the costs of such tests; otherwise, Astellas shall pay for the costs of such tests. FG shall, at its expense, promptly replace any Lead Compound to the extent that, in accordance with this Section 12.7, it is determined that it does not conform to the Product Specifications. Unless otherwise instructed by FG, all non-conforming Lead Compound shall be returned to FG at the place of manufacture at FG’s direction and at FG’s expense. If Astellas detects at any time any defect in the Lead Compound which has not been found through Astellas’ inspection, it shall notify FG to that effect within [*] of the discovery of such defect, and the procedures set forth above in this Section 12.7 shall be applied to such defective Lead Compound, provided, that FG shall only be responsible to pay for costs of defects that are the result of FG’s gross negligence or willful misconduct.

12.8Inspection of Facilities. Astellas shall have the right, upon reasonable advance notice and during regular business hours, to inspect and audit, either by itself or through its Affiliates or consultants, the facilities (including any facilities of sub-contractors) being used by FG for production of the Lead Compound to assure compliance with applicable laws, rules and regulations, including, without limitation, Japanese regulatory standards and FG quality control procedures ("Relevant Standards"). FG shall also reasonably comply with inspection requests of the Japanese Ministry of Health, Labor & Welfare. Such inspection and audit shall be conducted at Astellas’ sole cost and expense in a manner so as to minimize disruption of FG's, or its subcontractor’s or Sublicensee’s, business operations. FG shall, within [*] after FG's receipt of written notice from Astellas detailing any deficiencies which may be noted in any such audit which relate to the Relevant Standards use good faith efforts to remedy such deficiencies, and submit a plan to the Astellas outlining steps proposed to be taken.

 

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12.9Recall. In the event that Astellas deems it necessary to recall any Lead Compound from the market, it may do so in its sole discretion, after notification to the FG. The costs and expenses for such recall shall be borne by Astellas unless caused by a failure for which FG is required to indemnify Astellas pursuant to Section 17.3, or by FG’s gross negligence or willful misconduct, in which event it shall be borne by FG.

12.10Warranty. FG represents and warrants that the Lead Compounds to be supplied to Astellas under this Agreement shall conform to the Product Specifications and shall, as appropriate, be manufactured in compliance with GMP Guidelines. Subject to Sections 12.9 and 17.3 hereof, FG’s sole obligation and Astellas’ sole remedy with respect to Lead Compound which does not meet the warranty contained herein is limited to replacement of such Lead Compound and reimbursement of Astellas’ out of pocket expenses for shipping to FG at the address designated by FG.

12.11Interruption in Supply. For any particular Lead Compound, in order to minimize any interruptions in supply hereunder, FG and Astellas agree that within [*], FG shall maintain two separate, validated manufacturing sites (which may either be its own manufacturing facilities or facilities of a contract manufacturer) for such Lead Compound.

12.12Reference and Standard Materials. For any Lead Compound provided to Astellas hereunder, upon Astellas’ request and pursuant to Section 9.4 hereof, FG shall provide to Astellas reasonable quantities of reference materials, including analogs, metabolites, impurities, degradates and radio-labeled compounds (“Reference Materials”) and standard materials, i.e. defined, highly purified Lead Compound (“Standard Materials”) for such Lead Compound for the purposes of conducting analytical, release, stability and other studies as may be authorized by the JDC under the Development Program.

ARTICLE 13
LICENSE GRANTS

13.1Grant to Astellas. Subject to the terms and conditions of this Agreement including Article 12 above, FG hereby grants to Astellas an exclusive license under the FG Technology to: use, package, sell, have sold, import, market and otherwise distribute the Lead Compounds for use solely in the Field in the Astellas Territory

13.2Sublicenses. The licenses granted under Section 13.1 above include the right to grant and authorize sublicenses, subject to the requirements of this Agreement and Section 7.2. Notwithstanding the foregoing, Astellas shall not have the right to authorize a Sublicensee to market, sell or distribute Lead Compounds without FG’s prior written consent (which consent shall not be unreasonably withheld). For the purposes of the foregoing, and without limitation, it shall be deemed reasonable for FG to withhold consent for competitive concerns.

13.3No Rights Beyond Lead Compounds. Except as expressly provided herein, nothing in this Agreement shall be deemed to grant to Astellas rights in FG Technology

 

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other than the rights granted hereunder to the Lead Compounds, or for applications outside the Field or outside the Astellas Territory, or to manufacture Lead Compounds; nor shall any provision of this Agreement be deemed to restrict FG’s right to exploit any FG Technology and/or the Lead Compounds outside the Astellas Territory.

13.4Expanded Field Negotiation. Following the signing of this Agreement, FG agrees to negotiate in good faith with Astellas for a license to develop compounds for the Expanded Field in the Astellas Territory, exclusively for a period of [*] following such date, and non-exclusively thereafter until the execution of a license agreement with a third party to develop compounds for the Expanded Field. FG and Astellas hereby agree that FG’s obligation to negotiate non-exclusively for the Expanded Field shall not constitute a right of first offer, right of first refusal, right of first negotiation or any obligation to enter into any agreement with Astellas at any time, and the failure of such negotiations to result in an agreement between FG and Astellas with respect to the Expanded Field shall not constitute a breach of this Agreement.

ARTICLE 14
INTELLECTUAL PROPERTY

14.1Ownership of Inventions. Subject to Section 14.1.1, title to all inventions and other intellectual property made related to (i) the Development Program, (ii) the Lead Compounds, (iii) FG Technology or FG Confidential Information, (iv) the Field, or (v) the Expanded Field (subsections 14.1(i)-(v), collectively, the “Protected Field”) shall be owned by or is hereby assigned to FG; provided, however that Astellas shall own inventions of general applicability relating solely to drug delivery systems created exclusively by Astellas under subsection 14.1(i), excluding inventions related to or based on subsections 14.1(ii), (iii), (iv), or (v), and provided, further, that Astellas hereby grants to FG a worldwide, fully paid non-exclusive license with the right to sublicense to practice such inventions with respect to the FG Technology. Astellas agrees to execute any and all assignments and other documents necessary to effectuate the foregoing.

14.1.1Notwithstanding Section 14.1, in the event that Astellas develops, completely independently from any FG Technology and/or any other FG materials, confidential information, intellectual property or other related information provided by or on behalf of FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, any inventions or intellectual property rights related to the Field or the Expanded Field, [*], Astellas shall own such intellectual property and hereby grants to FG and its Sublicensees a non-exclusive, royalty-free, irrevocable license to such intellectual property for the FG Territory. Astellas agrees to execute any and all assignments and other documents necessary to effectuate the foregoing.

14.2Patent Prosecution

14.2.1FG Inventions. FG shall control all Prosecution and Interference Activities pertaining to FG Patents and patent applications and patents related

 

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to its, its Affiliates or its Sublicensees inventions in the Protected Field worldwide using counsel of its choice and shall bear the costs of such Prosecution and Interference Activities, provided, however, that; and Astellas shall reimburse to FG, within [*] of receipt by Astellas of invoice therefor, any such costs to the extent incurred in connection with or reasonably allocable to the FG Patents registered and/or to be registered in the Astellas Territory and related to the Field and the Lead Compounds, provided, further, that, with respect to patents or patent applications excluding those covering composition of matter claims and all patents listed on Exhibit A hereto as of the Effective Date, Astellas may postpone such reimbursement until the respective FG Patent will have been registered in the Astellas Territory if [*], on condition that once the respective FG Patent has been registered in the Astellas Territory, Astellas shall pay to FG such costs, plus interest to the extent permitted by applicable law at the U.S. prime rate per annum quoted in the “Money Rates” column of The Wall Street Journal (U.S., Western Edition), calculated in each case from the date such costs were incurred, plus an additional [*] thereof.

14.2.2Astellas Inventions. Astellas shall not file for or otherwise seek to obtain (directly or indirectly) patent or other intellectual property protection for inventions that are related to the Protected Field, without the prior written consent of FG, which may be withheld at FG’s sole discretion, subject to Section 14.1.1, and provided also that Astellas may file for or otherwise seek to obtain patent protection for inventions related to drug delivery systems as described in Section 14.1. To the extent that FG consents to the filing of any patent application or other intellectual property protection related to the foregoing, such patent application or other intellectual property protection shall be subject to Section 14.1, unless otherwise agreed in writing.

14.2.3Cooperation. Astellas shall cooperate with and assist FG in connection with Prosecution and Interference Activities and shall use best efforts to consult with FG regarding the prosecution and maintenance of the FG Patents for the FG Territory and the Astellas Territory for those FG Patents for which Astellas or its Affiliates, Sublicensees or investigators are inventors, except solely for inventions (i) of general applicability relating solely to drug delivery systems created by Astellas under subsection 14.1(i), or (ii) created in compliance with Section 14.1.1 as determined solely by FG in good faith.

14.3Defense of Third Party Infringement Claims. If the development, manufacture, sale or use of any Lead Compound pursuant to this Agreement results in a claim, suit or proceeding (collectively, “Actions”) alleging patent infringement against FG or Astellas (or their respective Affiliates or Sublicensees), such party shall promptly notify the other party hereto in writing. The party subject to such Action (for purposes of this Section 14.3, the “Controlling Party”) shall have the exclusive right to defend and control the defense of any such Action using counsel of its own choice; provided, however, that if such Action is directed to the subject matter of a patent of the other party (i.e., for Astellas, a FG Patent), such other party may participate in the defense and/or settlement thereof at its own expense with counsel of its choice. Except as agreed in writing by Astellas and FG, Astellas shall not enter into any settlement relating to a Lead Compound, if such settlement admits the invalidity or unenforceability, or limits any claim, of any patent within the FG

 

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Technology. The Controlling Party agrees to keep the other party hereto reasonably informed of all material developments in connection with any such Action. Any cost, liability or expense associated with such action (including amounts paid in settlement) (together, “Expenses”) shall be borne by the Controlling Party; provided, that if Astellas is the Controlling Party, and the Action is related to Future Third Party Intellectual Property, with respect to Expenses related solely to such Future Third Party Intellectual Property, it shall be entitled to deduct up to [*] of the Expenses incurred on an annual basis from [*] in such year under this Agreement, provided, however, that (i) the total amount deducted shall not exceed [*] thereunder, and (ii) notwithstanding (i) above, Astellas’ right to deduct Expenses incurred shall be further limited such that in no event shall the sum of (a) the Expenses deducted by Astellas under this Section 14.3, and (b) the consideration FG contributes for the acquisition of intellectual property from Third Party Licensors for the Astellas Territory as set forth in Section 14.5, exceed [*] hereunder, and, provided further, that if FG is the Controlling Party, it shall be entitled to reimbursement by Astellas of [*] of such Expenses, as incurred. Notwithstanding the foregoing, Astellas shall be solely responsible (without right of deduction) for all Expenses related to any Action relating to Preexisting Third Party Intellectual Property.

14.4Enforcement. Subject to the provisions of this Section 14.4, in the event that FG or Astellas reasonably believes that any FG Technology necessary for the development, manufacture, use or sale of a Lead Compound is infringed or misappropriated by a third party or is subject to a declaratory judgment action arising from such infringement, in each case with respect to the development, manufacture, sale or use of a product within the Field and within the Astellas Territory, Astellas or FG (respectively) shall promptly notify the other party hereto. Promptly after such notice the parties shall meet to discuss the course of action to be taken with respect to an Enforcement Action (as defined below) with respect to such infringement or misappropriation, including the control thereof and sharing of costs and expenses related thereto, for the purposes of entering into a litigation agreement setting forth the same (“Litigation Agreement”). If the parties do not enter such Litigation Agreement, FG shall have the initial right (but not the obligation) to enforce the intellectual property rights with respect to the FG Technology, or defend any declaratory judgment action with respect thereto (such action, for purposes of this Section 14.4, an “Enforcement Action”).

14.4.1Information. Absent a Litigation Agreement, the party initiating or defending any such Enforcement Action within the Field shall keep the other party hereto reasonably informed of the progress of any such Enforcement Action, and such other party shall have the right to participate with counsel of its own choice at its own expense.

14.4.2Enforcement Costs; Recoveries. Absent a Litigation Agreement, FG shall have the initial right to initiate such an Enforcement Action, and shall notify Astellas within a reasonable time whether it elects to exercise such right. In the event that FG elects to initiate or defend such Enforcement Action, FG shall be responsible for [*] of the costs and expenses while Astellas shall be responsible for [*] of the costs and expenses, and all amounts recovered shall first be applied to reimbursement of each party’s costs and

 

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expenses with the remainder to be allocated to FG and Astellas at the ratio of [*] and [*]. In the event that FG elects not to initiate or defend such Enforcement Action, Astellas shall have the right to initiate or defend such Enforcement Action in its own name, and to the extent permitted under Third Party Agreements, in the name of FG or in the names of both FG and Astellas, in which case, Astellas shall be responsible for [*] of the costs and expenses while FG shall be responsible for [*] of the costs and expenses, and all amounts recovered shall first be applied to reimbursement of each party’s costs and expenses with the remainder to be allocated to Astellas and FG at the ratio of [*] and [*].

14.4.3Cooperation in Enforcement Action. Absent a Litigation Agreement, at the request of the party which has the right to initiate or defend an Enforcement Action, the other party shall reasonably cooperate in the Enforcement Action, such cooperation to include, without limitation, furnishing records, information and testimony, and attending conferences, discovery proceedings, hearings, trials and appeals; provided, that the requesting party shall reimburse to the cooperating party for the out-of-pocket expenses incurred for such cooperation pursuant to the reimbursement regime set forth in Section 14.4.2.

14.5Third Party Agreements

14.5.1Future Agreements. It is understood that FG may find it necessary to utilize in connection with a Lead Compound intellectual property that is controlled by a non-Affiliate third party (such party, a “Third Party Licensor”), in addition to or in lieu of the FG Technology existing as of the Effective Date. FG shall have the right to obtain (by purchase, license, or otherwise) rights to such intellectual property with the right to sublicense to Astellas. In the event that FG determines that it must obtain such rights, it shall provide notice and submit a description of such rights to Astellas, and shall discuss with Astellas the need to obtain such rights. Astellas shall inform FG within [*] of receipt of such notice whether it believes it is necessary to obtain such rights for the Astellas Territory and wishes to obtain such rights. In the event Astellas determines to obtain such rights, FG shall obtain a worldwide license for the rights under such terms and conditions as are [*], and such intellectual property of the Third Party Licensor shall be deemed to be the part of FG Technology, provided, however, that, notwithstanding anything contained in this Agreement (i) for Preexisting Third Party Intellectual Property, [*] shall pay [*] of all consideration due in connection with the acquisition of such rights for the Astellas Territory, and (ii) for Future Third Party Intellectual Property, [*] shall [*] pay [*] of all consideration due in connection with the acquisition of such rights for the Astellas Territory, provided, however, notwithstanding FG’s obligation to contribute to the consideration due for Future Third Party Intellectual Property under (ii) above, FG’s obligation to contribute shall be limited such that in no event shall the sum of (a) the consideration FG contributes for the acquisition of intellectual property from Third Party Licensors for the Astellas Territory, and (b) the Expenses for which Astellas has the right to deduct under Section 14.3 exceed [*] hereunder, and Astellas shall be responsible for all consideration related to the acquisition of rights from Third Party Licensors in excess of such amount. In the event Astellas determines not to obtain such rights for the Astellas Territory, FG shall obtain a license for the FG Territory but not the Astellas Territory, and Astellas shall be solely responsible for the

 

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defense of any infringement Action, for all Expenses related to any such Action, and any right of Astellas to deduct Expenses under this Agreement against payments required to be made to FG hereunder shall not apply to any action brought with respect to such rights.

14.5.2Payment; Reports. If FG is obligated to pay amounts to a Third Party Licensor, FG shall notify Astellas [*] in advance of the due date of such payment obligation (or such later date as FG may determine), and Astellas shall reimburse its share of such payments within [*] after receipt of notice therefor.

14.5.3Limitation. To the extent that FG Patents includes any intellectual property licensed under FG’s License Agreement with Imigen, Inc. relating to HIF stabilization technology dated as of October 30, 2003, and amended as from time to time of which a redacted copy shall have been provided to Astellas prior to the Effective Date, Astellas shall be considered a sublicensee and be subject to the applicable requirements thereunder.

14.5.4Compliance with Third Party Agreements. Notwithstanding anything to the contrary contained herein, Astellas agrees to comply with the requirements (upon sublicensees or otherwise) of FG’s License Agreement with Imigen, Inc. relating to HIF stabilization technology dated as of October 30, 2003.   In addition, Astellas agrees to comply with the requirements (upon sublicensees or otherwise) of any future Third Party Agreements for which Astellas obtains rights through an FG license pursuant to Section 14.5.1 hereof.

ARTICLE 15
REPRESENTATIONS AND WARRANTIES

15.1FG Warranties. FG warrants and represents to Astellas, as of the execution of this Agreement, that (i) it is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware; (ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of FG;  (iii) there is no pending litigation which alleges or any communication alleging that Commercialization of any Lead Compound or any compound Controlled by FG for use in the Field has infringed or misappropriated the intellectual property rights of any Third Party or has been obtained by misappropriating any Third Party’s intellectual property right; and (iv) subject to the terms and conditions of the agreements for  the FG Acquired Patents, FG has complete title to and ownership of the FG Patents, free and clear from any mortgages, pledges, liens, security interests, conditional and installment sale agreements, encumbrances, charges or claims of any kind.

15.2Astellas Warranties. Astellas warrants and represents to FG, as of the execution of this Agreement, that (i) it is a corporation duly organized, validly existing and in good standing under the laws of Japan; and (ii) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on the part of Astellas.

 

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15.3Disclaimer of WarrantiesEXCEPT AS OTHERWISE SET FORTH HEREIN, FG AND ASTELLAS EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE DEVELOPMENT PROGRAM, OR THE FG TECHNOLOGY OR LEAD COMPOUNDS, INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF FG TECHNOLOGY, PATENTED OR UNPATENTED, AND NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES.

ARTICLE 16
CONFIDENTIALITY

16.1Confidential Information. Except as expressly provided herein, the parties agree that the receiving party shall not publish or otherwise disclose and shall not use for any purpose other than this Agreement any information furnished to it by the other party hereto pursuant to this Agreement which if disclosed in tangible form is marked “Confidential” or with other similar designation to indicate its confidential or proprietary nature or if disclosed orally is indicated orally to be confidential or proprietary by the party disclosing such information at the time of such disclosure and is confirmed in writing as confidential or proprietary by the disclosing party within a reasonable time after such disclosure (collectively, “Confidential Information”). Notwithstanding the foregoing, Confidential Information shall not include information that, in each case is demonstrated by written documentation:

(a)was already known to the receiving party, other than under an obligation of confidentiality directly or indirectly to the disclosing party at the time of disclosure hereunder;

(b)was generally available to the public or otherwise part of the public domain at the time of its disclosure to the receiving party hereunder;

(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; or

(d)was subsequently lawfully disclosed to the receiving party by any third party without any confidentiality obligation directly or indirectly to the disclosing party or developed by the receiving party without reference to any information or materials disclosed by the disclosing party.

It is agreed and understood that all matters discussed and presented at the meetings of the JDC shall be considered Confidential Information hereunder, subject to the terms and conditions of this Agreement.

 

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16.2Permitted Disclosures. Notwithstanding the provisions of Section 16.1 above, each party hereto may disclose the other party’s Confidential Information to the extent such disclosure is reasonably necessary to exercise the rights granted to it, or reserved by it, under this Agreement (including, without limitation, entering into and/or performing business or scientific relationships with respect to products outside the Field as permitted hereunder), in filing or prosecuting patent applications, prosecuting or defending litigation, complying with applicable governmental regulations, submitting information to tax or other governmental authorities (including regulatory authorities), or conducting clinical trials hereunder with respect to Lead Compounds, provided that if a party is required by law to make any such disclosure of the other party’s Confidential Information, to the extent it may legally do so, it will give reasonable advance notice to the latter party of such disclosure and, save to the extent inappropriate in the case of patent applications or otherwise, will use its reasonable efforts to secure confidential treatment of such Confidential Information prior to its disclosure (whether through protective orders or otherwise).

16.3Clinical Data. Except as expressly permitted under Sections 7.2 and 16.2, and for publications or disclosures in accordance with Section 5.2, neither party shall disclose to third parties pre-clinical data, clinical data or regulatory filings, comprising Confidential Information of the other party.

16.4Press Releases. Except as may already be, or is agreed to be, publicly disclosed, in the event that either party proposes to release a press release with respect to this Agreement or the Development Program, such party shall obtain the prior written consent of the other party, which shall not be unreasonably withheld.

ARTICLE 17
INSURANCE; INDEMNIFICATION

17.1Insurance. Each party shall secure and maintain in effect during the term of this Agreement and for a period of five (5) years thereafter insurance policy(ies) underwritten by a reputable insurance company and in a form and having limits standard and customary for entities in the biopharmaceutical industry for exposures related to the Lead Compounds. Such insurance shall include general liability, clinical trial liability and products liability coverage with respect to such party’s performance of the Development Program and commercialization of Lead Compounds hereunder. Upon request by the other party hereto, certificates of insurance evidencing the coverage required above shall be provided to the other party.

17.2Indemnification of FG. Astellas shall indemnify each of FG and its Affiliates and the directors, officers, and employees of FG and such Affiliates and the successors and assigns of any of the foregoing (the “FG Indemnitees”), and hold each FG Indemnitee harmless from and against any and all liabilities, damages, settlements, claims, actions, suits, penalties, fines, costs or expenses (including, without limitation, reasonable attorneys’ fees and other expenses of litigation) incurred by any FG Indemnitee to the

 

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extent not otherwise covered by insurance, arising from or occurring as a result of any claim, action, suit, or other proceeding brought by third parties against a FG Indemnitee arising from or occurring as a result of any development, testing, manufacture, importation, use, offer for sale, sale or other distribution of any Lead Compound by or for the benefit of Astellas or its Affiliates or Sublicensees, distributors or agents (including, without limitation, product liability and infringement claims) except to the extent caused by failure of the Lead Compound supplied by FG to meet the Product Specifications in effect at the time of manufacture, or material deviation by FG or its sub-contractor from GMP Guidelines in manufacturing the Lead Compound, or FGs breach of this Agreement or willful misconduct.

17.3Indemnification of Astellas. FG shall indemnify each of Astellas and its Affiliates and the directors, officers, and employees of Astellas and such Affiliates and the successors and assigns of any of the foregoing (the “Astellas Indemnitees”), and hold each Astellas Indemnitee harmless from and against any and all liabilities, damages, settlements, claims, actions, suits, penalties, fines, costs or expenses (including, without limitation, reasonable attorneys’ fees and other expenses of litigation) incurred by any Astellas Indemnitee to the extent not otherwise covered by insurance, arising from or occurring as a result of any claim, action, suit, or other proceeding brought by third parties against an Astellas Indemnitee to the extent caused by failure of the Lead Compound supplied by FG to meet the Product Specifications in effect at the time of manufacture, or material deviation by FG or its sub-contractor from GMP Guidelines in manufacturing the Lead Compound, except in each case in this Section 17.3 to the extent caused by Astellas’ breach of this Agreement or willful misconduct.

17.4Procedure.  A party (for purposes of this Section 17.4, the “Indemnitee”) that intends to claim indemnification under any provision of this Agreement shall promptly notify the indemnifying party (the “Indemnitor”) in writing of any claim, action, suit, or other proceeding brought by third parties in respect of which the Indemnitee or any of its Affiliates, or their directors, officers, employees, successors or assigns intend to claim such indemnification hereunder. As between the parties hereto the Indemnitor shall have the right to control the defense and settlement of such claim, action, suit, or other proceeding; provided, that the Indemnitee shall have the right to participate in such defense or settlement with counsel of its own choosing at its expense. The Indemnitee shall not make any settlement of any loss, claim, damage, liability or action without the consent of the Indemnitor, to the extent such consent is not withheld unreasonably or delayed. The failure to deliver written notice to the Indemnitor within a reasonable time after the commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such Indemnitor of any liability to the Indemnitee under this Article 17 but the omission so to deliver written notice to the Indemnitor shall not relieve the Indemnitor of any liability that it may have to any Indemnitee otherwise than under this Article 17. Without limiting the foregoing, the Indemnitee shall keep the Indemnitor fully informed of the progress of any claim, action, suit, or other proceeding for which it intends to claim indemnification under this Article 17.

 

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ARTICLE 18
TERM AND TERMINATION

18.1Term. This Agreement shall become effective as of the Effective Date and, shall continue in full force and effect until terminated pursuant to this Article 18.

18.2Termination for Cause or Technical Product Failure

18.2.1Material Breaches. FG may forthwith terminate this Agreement in the event Astellas fails to make any payment due under Articles 6, 9 or 14, within [*] following receipt of written notice of such default, or materially breaches its obligations under Articles 8 or 14, and fails to cure such breach within [*] following receipt of written notice of such default. Astellas may forthwith terminate this Agreement in the event FG materially breaches its obligations under Article 7 or Article 12, and fails to cure such breach within [*] following receipt of written notice of such default. Any termination shall become effective at the end of such [*] or [*] period unless the defaulting or breaching party (or any other party on its behalf) has cured any such default prior to the expiration of the [*] or [*] period, as the case may be.

18.2.2Independent Activities. Notwithstanding anything contained in Section 8.3.2 or Section 14.1.1, in the event that Astellas Commercializes any molecules for the Field or the Expanded Field, except for actions taken within the Field in the course of the exercise of the licenses granted under Sections 8.1 and 13.1 hereof and expressly authorized under this Agreement, even if FG determines that Astellas’ activities are completely independent of any FG Technology and/or any other FG materials, confidential information, intellectual property or other related information provided by FG to Astellas under this Agreement or any other agreement between FG and Astellas relating to the subject matter hereof, FG shall have the right at its sole discretion to terminate this Agreement upon [*] notice to Astellas.

18.2.3Technical Product Failure. Astellas may terminate this Agreement upon [*] notice to FG upon Technical Product Failure.

18.2.4Development Diligence Failure. FG may terminate this Agreement upon thirty (30) days notice to Astellas in the event Astellas fails to meet any of its development diligence requirements as set forth in Article 11 hereof, provided, however, that with respect to the development diligence obligations set forth in Section 11.3.2, such termination right on behalf of FG shall be triggered only upon Astellas’ failure to meet such development diligence obligations for a Major Indication (except those Major Indications set forth in Section 11.3.1(iv)), and Astellas may terminate this Agreement upon thirty (30) days notice to FG in the event FG fails to meet the development diligence requirement as set forth in Section 11.2 hereof.

18.2.5Other Material Non-Performance/Misrepresentation. Other than a breach giving rise to a termination right as set forth in Sections 18.2.1 or 18.2.4, or a termination pursuant to a Technical Product Failure as set forth in Section 18.2.3 in the event

 

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of (i) a party’s breach or default in any other material respect in the performance or observance of any other material term, covenant or provision of this Agreement, or (ii) if any representation by a party contained in this Agreement shall prove to have been incorrect in any material respect when made, resulting in material adverse consequences for the other party, (any such default or material incorrect representation a “Material Non-Performance”), such Material Non-Performance shall be remedied only as provided in Section 18.7.4 below.

18.3Termination in case of Generic Competition. In the event generic equivalents has captured the [*] of the quantity of Lead Compound sold by Astellas during the [*] preceding such termination calculated on a annual basis; or in the event, after the entry into the market of generic equivalents, that Astellas’ annual sales fall below $[*] for all Lead Compounds, Astellas may terminate this Agreement upon [*] written notice to FG; provided, that Astellas does not Commercialize any Lead Compound after such termination until the expiration of the last to expire FG Patents applicable to such Lead Compound.

18.4Negative Advice from Authorities. Astellas may terminate this Agreement upon [*] notice to FG in the event Astellas has commenced Phase III clinical studies in those of the following Indications that FG is developing: “Treatment of anemia in patients with chronic kidney disease undergoing dialysis”, “Treatment of anemia in patients with chronic kidney disease not undergoing dialysis” and [*], and the Japanese Ministry of Health, Labor & Welfare has provided written notification that it will not approve the Lead Compounds in such Indications or the JDC determines, after the submission by Astellas of Marketing Approval Applications for such Indications, and the receipt of a response or request of the Japanese Ministry of Health, Labor & Welfare that contains development demands that are so onerous that it is not reasonable to continue with Development of the Lead Compounds in such Indications.

18.5Admission of Invalidity or Unenforceability of FG Patent. Astellas may terminate this Agreement upon [*] notice to FG in the event that FG enters into a settlement under Section 14.3 that admits the invalidity or unenforceability of all patents within the FG Technology, including patents covering Lead Compounds.

18.6Termination upon Notice. Subject to Section 18.7.2, Astellas may terminate this Agreement upon six (6) months notice to FG for any reason or no reason.

18.7Effect of Termination

18.7.1Accrued Obligations. Termination of this Agreement for any reason shall not release either party hereto from any liability which, at the time of such termination, has already accrued to the other party or which is attributable to a period prior to such termination nor preclude either party from pursuing all rights and remedies it may have hereunder or at law or in equity with respect to any breach of this Agreement.

18.7.2Termination. In the event of (a) a termination by Astellas under Section 18.6 during the period from the execution of this Agreement until the last to expire of the FG Patents, or (b) by FG under Section 18.2.1, 18.2.2, 18.2.4 or 18.2.5 hereof,

 

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Astellas shall, upon the effective date of such termination, pay to FG (i) a termination fee of $[*] U.S. dollars and (ii) any payments to which FG is otherwise entitled to receive hereunder in the period from the date of such termination notice until the [*].

18.7.3Survival. Articles 1, 5, 14, 16, 17, 18, 19 and 20, and Sections 8.3.3 and 10.5, shall survive any termination of this Agreement, along with FG’s rights and Astellas’ obligations (but not Astellas’ rights or FG’s obligations, except to the extent required by the Japanese Ministry of Health, Labor and Welfare) under Section 5.1.1 and Article 7. In addition, the following provisions shall survive termination of this Agreement for any reason: Astellas shall assign or cause to be assigned to FG (or if not so assignable, Astellas shall take all reasonable actions to make available to FG) all regulatory filings and registrations (including MAAs and Marketing Approvals) with respect to the Lead Compounds that have been filed or made by or under authority of Astellas, and the rights in trademark with respect to each Lead Compound as provided for in Section 4.4.1, in each case such assignment (or availability) shall be made within [*] after the notice of termination. From and after the date of a notice of termination, FG shall have no further obligations under this Agreement beyond those obligations that survive termination in such events as specified in this Section 18.7.3.

18.7.4Material Non-Performance. In the event of any Material Non-Performance by a party, the other party shall, without reasonable delay following discovery of such Material Non-Performance notify the defaulting party in writing, and the parties shall consult with each other in good faith to endeavor to agree upon the most effective means to cure such Material Non-Performance and, if necessary, to effect a remedy in favor of the non-defaulting party for the consequences of such Material Non-Performance by the defaulting party (collectively, the “Resolution”). In the event (i) the parties are unable to agree upon Resolution, or (ii) the defaulting party, in the exercise of reasonable diligence shall have been unable to remedy such Material Non-Performance, then in either such event the remedy of the non-defaulting party with respect to the Material Non-Performance by the defaulting party shall be determined by arbitration pursuant to Section 19.2 hereof, and the arbitrators shall be authorized to fashion such remedy, including equitable relief, which may include termination of this Agreement in whole or in part, as the arbitrators shall determine appropriate, except that termination of this Agreement in whole shall only be the remedy of last resort.

18.7.5License Upon Termination. In the event of a termination of this Agreement, FG shall have an irrevocable, exclusive, license, with the right to grant and authorize sublicenses, to any trademarks used by Astellas in association with the Lead Compounds hereunder to make, use, sell, import and otherwise exploit products within the Field in the Astellas Territory.  Such license shall be royalty-free, provided, however, if such trademark is not a global trademark (i.e. materially different from the trademark used in the FG Territory) and either (i) if Astellas terminates this Agreement under Section 18.2.1 or 18.2.4, or (ii) if this Agreement is terminated in accordance with the procedure as provided for in Section 18.2.5 as a result of FG’s Material Non-Performance, in which event FG and Astellas shall negotiate in good faith a reasonable fee for such license.

 

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ARTICLE 19
DISPUTE RESOLUTION

19.1Disputes. If the parties are unable to resolve any dispute between them regarding the breach, interpretation or enforcement of this Agreement, either party may, by written notice to the other, have such dispute referred to their Authorized Designees, provided that such individuals are not directly involved in the dispute (i.e., the dispute occurs at the JDC, such individuals shall not be members of the JDC), for good faith negotiations. If after [*] such executives are unable to resolve the issue, each of Astellas and FG shall have the right to refer the matter to mediation upon notice to the other party, and the parties shall choose a mediator within [*] of the receipt of such notice, and shall negotiate in good faith to resolve such matter through the mediator within [*] thereafter.

19.2Full Arbitration. Any dispute, controversy or claim arising out of or relating to the breach, interpretation or enforcement of this Agreement, including disputes relating to termination of this Agreement, shall be settled by binding arbitration in the manner described in this Section 19.2. The arbitration shall be conducted pursuant to the rules of Arbitration of the International Chamber of Commerce then in effect. Notwithstanding those rules, the following provisions shall apply to the arbitration hereunder:

19.2.1Arbitrators. The arbitration shall be conducted by a panel of three (3) arbitrators, with one (1) arbitrator chosen by each of FG and Astellas and the third appointed by the other two (2) arbitrators. If the parties are unable to agree upon a single arbitrator, or the third arbitrator in case of a panel of three (3), such third arbitrator (as the case may be) shall be appointed in accordance with the rules of the Arbitration of the International Chamber of Commerce.

19.2.2Proceedings. Except as otherwise provided herein, the parties shall use their best efforts to complete the arbitration within [*] after the appointment of the Panel under Section 19.2.1 above, unless a party can demonstrate to the Panel that the complexity of the issues or other reasons warrant the extension of one or more of the time tables. In such case, the Panel may extend such time table as reasonably required. The Panel shall, in rendering its decision, apply the substantive law of the State of California, without regard to its conflicts of laws provisions, except that the interpretation of and enforcement of this Article 19 shall be governed by the U.S. Federal Arbitration Act. The proceeding shall be conducted in English and shall take place in the city of Vancouver, British Columbia, Canada. The judgment of the Panel shall be binding upon the parties and enforceable in any court of competent jurisdiction.

19.2.3Interim Relief. Notwithstanding anything in this Article 19 to the contrary, FG and Astellas shall each have the right to apply to any court of competent jurisdiction for a temporary restraining order, preliminary injunction, or other similar interim or conservatory relief, as necessary, pending resolution under the above described arbitration procedures. Nothing in the preceding sentence shall be interpreted as limiting the powers of the arbitrators with respect to any dispute subject to arbitration under this Agreement.

 

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ARTICLE 20
MISCELLANEOUS

20.1Confidential Terms. Except as expressly provided herein, each party agrees not to disclose any terms of this Agreement to any third party without the consent of the other party, except (i) as required by securities or other applicable laws or (ii) to prospective and other investors and such party’s accountants, attorneys and other professional advisors, or (iii) to others under reasonable conditions of confidentiality.

20.2Governing Law. This Agreement and any dispute arising from the performance or breach hereof shall be governed by and construed and enforced in accordance with, the laws of the State of California, without reference to conflicts of laws principles.

20.3Force Majeure. Nonperformance of any party (except for payment of amounts due hereunder) shall be excused to the extent that performance is rendered impossible by strike, fire, earthquake, flood, governmental acts or orders or restrictions, failure of suppliers, or any other reason where failure to perform is beyond the reasonable control of the non-performing party. In such event FG or Astellas, as the case may be, shall promptly notify the other party of such inability and of the period for which such inability is anticipated to continue. Without limiting the foregoing, the party subject to such inability shall use reasonable efforts to minimize the duration of any force majeure event.

20.4No Implied Waivers; Rights Cumulative. No failure on the part of FG or Astellas to exercise and no delay in exercising any right under this Agreement, or provided by statute or at law or in equity or otherwise, shall impair, prejudice or constitute a waiver of any such right, nor shall any partial exercise of any such right preclude any other or further exercise thereof or the exercise of any other right.

20.5Independent Contractors. Nothing contained in this Agreement is intended implicitly, or is to be construed, to constitute FG or Astellas as partners in the legal sense. No party hereto shall have any express or implied right or authority to assume or create any obligations on behalf of or in the name of any other party or to bind any other party to any contract, agreement or undertaking with any third party.

20.6Notices. All notices, requests and other communications hereunder shall be in writing and shall be personally delivered or sent by registered or certified mail, return receipt requested, postage prepaid; facsimile transmission (receipt verified); or express courier service (signature required), in each case to the respective address specified below, or such other address or fax number as may be specified in writing to the other party hereto:

 

 

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Astellas:

Astellas Pharma Inc.

 

Attn: Director of Legal Department

 

[*]

 

 

with copy to:

Astellas Pharma Inc.

 

Attn: Licensing, Corporate Strategy

 

[*]

 

 

FG:

FibroGen, Inc.

 

Attn: Chief Executive Officer

 

225 Gateway Boulevard

 

San Francisco, California 94080

 

Fax: 1-650-866-7202

 

 

with a copy to:

FibroGen, Inc.

 

Attn: Legal Department

 

225 Gateway Boulevard

 

San Francisco, California 94080

 

Fax: 1-650-866-7343

20.7Assignment. This Agreement shall not be assignable by either party to any third party without the written consent of the other party hereto; except that either party may assign this Agreement without the other party’s consent to an entity that acquires substantially all of the business or assets of the assigning party within the Field, in each case whether by merger, transfer of assets, or otherwise. Upon a permitted assignment of this Agreement, all references herein to the assigning party shall be deemed references to the party to whom the Agreement is so assigned.

20.8Modification. No amendment or modification of any provision of this Agreement shall be effective unless in writing signed by all parties hereto. No provision of this Agreement shall be varied, contradicted or explained by any oral agreement, course of dealing or performance or any other matter not set forth in an agreement in writing and signed by all parties.

20.9Severability. If any provision hereof should be held invalid, illegal or unenforceable in any jurisdiction, the parties shall negotiate in good faith a valid, legal and enforceable substitute provision that most nearly reflects the original intent of the parties and all other provisions hereof shall remain in full force and effect in such jurisdiction and shall be liberally construed in order to carry out the intentions of the parties hereto as nearly as may be possible. Such invalidity, illegality or unenforceability shall not affect the validity, legality or enforceability of such provision in any other jurisdiction.

20.10Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, and all of which together, shall constitute one and the same instrument.

 

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20.11Headings. Headings used herein are for convenience only and shall not in any way affect the construction of or be taken into consideration in interpreting this Agreement.

20.12Export Laws. Notwithstanding anything to the contrary contained herein, all obligations of FG and Astellas are subject to prior compliance with United States and foreign export regulations and such other United States and foreign laws and regulations as may be applicable, and to obtaining all necessary approvals required by the applicable agencies of the governments of the United States and foreign jurisdictions. FG and Astellas shall cooperate with each other and shall provide assistance to the other as reasonably necessary to obtain any required approvals.

20.13Language. This Agreement is in the English language only, which language shall be controlling in all respects, and all versions hereof in any other language shall not be binding on the parties hereto. All communications and notices to be made or given pursuant to this Agreement shall be in the English language.

20.14Entire Agreement. This Agreement (including the Exhibits hereto) constitutes the entire agreement, both written or oral, with respect to the subject matter hereof, and supersedes all prior or contemporaneous understandings or agreements, including the Binding Term Sheet, dated as of February 9, 2004 by and between FG and Astellas, as amended on January 25, 2005, whether written or oral, between FG and Astellas with respect to such subject matter.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered in duplicate originals as of the date first above written.

 

ASTELLAS PHARMA INC.

 

FIBROGEN, INC.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

/s/ Toichi Takenaka

 

By:

 

/s/ Thomas B. Neff

 

 

Toichi Takenaka

 

 

 

Thomas Neff

 

 

President and Chief Executive Officer

 

 

 

President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date:

 

1.September.05

 

Date:

 

23 August 05

 

 


 

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EXHIBIT A
LIST OF PATENTS

[*]


 

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EXHIBIT B
INDICATIONS

Included indications:

Treatment of anemia in patients with chronic kidney disease undergoing dialysis

Treatment of anemia in patients with chronic kidney disease not undergoing dialysis

[*]

 

 

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EXHIBIT C
INITIAL DEVELOPMENT PLAN

[]

 

 

 

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COLLABORATION AGREEMENT

BY AND BETWEEN

ASTELLAS PHARMA INC.

AND

FIBROGEN, INC.

 

 

June 1, 2005

 

 

[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.

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[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.

Exhibit 10.2

AMENDED AND RESTATED

LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

(for the US and Certain Other Territories)

between

FIBROGEN, INC.

and

ASTRAZENECA AB

 


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TABLE OF CONTENTS

 

ARTICLE 1 Definitions

2

 

 

ARTICLE 2 Collaboration; Governance

17

 

 

ARTICLE 3 Development

27

 

 

ARTICLE 4 Regulatory Matters

35

 

 

ARTICLE 5 Commercialization

37

 

 

ARTICLE 6 Manufacture and Supply

42

 

 

ARTICLE 7 Licenses And Exclusivity

46

 

 

ARTICLE 8 Financials

52

 

 

ARTICLE 9 Intellectual Property

65

 

 

ARTICLE 10 Representations And Warranties

73

 

 

ARTICLE 11 Indemnification

79

 

 

ARTICLE 12 Confidentiality

81

 

 

ARTICLE 13 Term and Termination

85

 

 

ARTICLE 14 Dispute Resolution and Governing Law

90

 

 

ARTICLE 15 Miscellaneous

92

 

 

Exhibit A – Territory – Excluded Countries

1

 

 

Exhibit B – DFCI Agreement

1

 

 

Exhibit C – Chemical Structure of FG-4592

1

 

 

Exhibit D – Field Indications

1

 

 

Exhibit E – Listed Patents

1

 

 

Exhibit F – AstraZeneca’s Anti-Corruption Rules and Policies

1

 

 

Exhibit G – Initial Members of the JSC

1

 

 

Exhibit H – Initial Development Plan

1

 

 

Exhibit I – U.S. Co-Commercialization Terms

1

 

 

Exhibit J – Development Supply Terms

1

 

 

Exhibit K – Commercial Supply Terms

1

 

 

Exhibit L – Invoicing Requirements

1

 

 

Exhibit M – Patents that May be Extended

1

 

 

Exhibit N – Joint Press Release

1

 

 

 

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AMENDED AND RESTATED

LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

This Amended and Restated License, Development and Commercialization Agreement (the “Agreement”) is entered into as of October 16, 2014 (the “Execution Date”), and effective as of July 30, 2013 (the “Effective Date”) by and between FibroGen, Inc., a Delaware corporation having its principal place of business at 409 Illinois St., San Francisco, California 94158, United States (“FibroGen”) and AstraZeneca AB, a company incorporated in Sweden under no. 556011-7482 with offices at Pepparedsleden 1, 431 83 Mölndal, Gothenburg, Sweden (“AstraZeneca”).  FibroGen and AstraZeneca are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

Background

A.AstraZeneca is a fully-integrated, global pharmaceutical company with expertise in the research, development, manufacture and commercialization of human therapeutic products.

B.FibroGen is a biotechnology company with expertise in the discovery, research, development and manufacture of small molecule prolyl hydroxylase inhibitors that modulate hypoxia-inducible factor for the treatment of anemia.

C.FibroGen is developing certain of such compounds in collaboration with Astellas Pharma Inc. (“Astellas”), its exclusive licensee for Japan, Europe, the Commonwealth of Independent States (CIS), the Middle East and South Africa pursuant to certain collaboration agreements between FibroGen and Astellas (collectively, the “Astellas Collaboration”).

D.AstraZeneca and FibroGen desire to establish as of Effective Date a collaboration for the joint continued development, including regulatory submission, and, if successful, commercialization of certain of such compounds in the U.S. and all countries of the world other than those subject to the existing Astellas Collaboration.

E.With respect to the collaboration between the Parties in China, the development and commercialization activities are governed by that certain License, Development and Commercialization Agreement (China) by and between FibroGen China Anemia Holdings, Ltd., Beijing FibroGen Medical Technology Development Co., Ltd., and FibroGen International (Hong Kong) Limited, Affiliates of FibroGen, and AstraZeneca, of even date herewith (the “China Agreement”), except that a portion of the governance structure for China shall be as set forth in this Agreement, and the Parties’ activities with respect to all other countries not licensed to Astellas are governed by this Agreement.

1.

 

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Now, Therefore, in consideration of the foregoing premises and the mutual promises, covenants and conditions contained in this Agreement, the Parties agree as follows:

ARTICLE 1

Definitions

As used in this Agreement, the following initially capitalized terms, whether used in the singular or plural form, shall have the meanings set forth in this Article 1.  Except where the context otherwise requires, the use of any gender shall be applicable to all genders and the word “or” is used in the inclusive sense (and/or).  Whenever this Agreement refers to a number of days, unless otherwise specified, such number refers to calendar days.  In addition, the terms “includes,” “including,” “include” and derivative forms of them shall be deemed followed by the phrase “without limitation” (regardless of whether it is actually written there (and drawing no implication from the actual inclusion of such phrase in some instances after such terms but not others)).

1.1Acquiror has the meaning set forth in Section 15.5.

1.2Affiliate means, with respect to a particular Party, a person, corporation, partnership, or other entity that controls, is controlled by or is under common control with such Party.  For the purposes of this definition, the word “control” (including, with correlative meaning, the terms “controlled by” or “under the common control with”) means the actual power, either directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity, whether by the ownership of more than fifty percent (50%) of the voting stock of such entity, or by contract or otherwise.

1.3Alliance Manager” has the meaning set forth in Section 2.7.

1.4Annual Net Sales” means the Net Sales made during any given Calendar Year.

1.5Anti-Corruption Laws” means the U.S. Foreign Corrupt Practices Act, as amended, the UK Bribery Act 2010, as amended, and any other applicable anti-corruption laws and laws for the prevention of fraud, racketeering, money laundering or terrorism.

1.6Astellas” has the meaning set forth in Section C on the first page.

1.7Astellas Agreements” means the Astellas EU Agreement and the Astellas Japan Agreement.

1.8Astellas Collaboration” has the meaning set forth in Section C on the first page.

1.9Astellas EU Agreement” means the Anemia License and Collaboration Agreement between FibroGen and Astellas with respect to the countries listed on Exhibit A (other than Japan) effective April 28, 2006, as amended from time to time.

2.

 

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1.10Astellas Japan Agreement” means the Collaboration Agreement between FibroGen and Astellas with respect to Japan effective June 1, 2005, as amended from time to time.

1.11AstraZeneca Inventions” has the meaning set forth in Section 7.8(d).

1.12AstraZeneca Know-How means all Information Controlled as of the Effective Date or thereafter during the Term by AstraZeneca and/or its Affiliate(s) that is reasonably necessary or useful for the research, development, manufacture, use, importation or sale of Products in the Field.  For clarity, the use of “Affiliate” in this definition shall exclude any Third Party that becomes an Affiliate due to such Third Party’s acquisition of or by AstraZeneca, except as provided in Section 15.5.  For additional clarity, AstraZeneca Know-How shall exclude rights under any AstraZeneca Patents and AstraZeneca’s interest in the Joint Patents and Joint Inventions.

1.13AstraZeneca Patents means all Patents that are Controlled as of the Effective Date or thereafter during the Term by AstraZeneca and/or its Affiliate(s) and that claim the composition of matter, manufacture or use of one or more Collaboration Compounds or Products or that would otherwise be infringed (or with respect to patent applications, would be infringed if issued or granted with the then-currently pending claims), absent a license, by the manufacture, use or sale of any Collaboration Compounds or Product.  For clarity, the use of “Affiliate” in this definition shall exclude any Third Party that becomes an Affiliate due to such Third Party’s acquisition of or by, AstraZeneca except as provided in Section 15.5.

1.14AstraZeneca Anti-Corruption Rules and Policies” means the key principles from AstraZeneca’s ABAC and External Interactions Policies regarding anti-bribery and corruption issues, attached as Exhibit F to this Agreement, as the same may be amended, modified or supplemented from time to time as notified by AstraZeneca to FibroGen.

1.15AstraZeneca Technology means the AstraZeneca Patents, AstraZeneca Know-How, and AstraZeneca’s interest in Joint Patents and Joint Inventions.

1.16Bankrupt Party” has the meaning set forth in Section 13.9(b).

1.17Business Day” means a day other than a Saturday, Sunday or bank or other public holiday in San Francisco, California, the UK or Sweden.

1.18Calendar Quarter” means each successive period of three (3) calendar months commencing on January 1, April 1, July 1 and October 1.

1.19Calendar Year” means each successive period of twelve (12) calendar months commencing on January 1.

1.20Carcinogenicity Studies” means the following carcinogenicity studies in rats and mice: (1) [ * ].

1.21China Agreement” has the meaning set forth in Section E on the first page.

3.

 

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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1.22China Committee” means the governing committee established under the China Agreement, and any successor or other committee or governing body that serves the same functions under the China Agreement.

1.23CKD Indications” means (a) treatment of anemia in patients with chronic kidney disease undergoing dialysis, and (b) treatment of anemia in patients with chronic kidney disease not undergoing dialysis.

1.24Clinical Trial” means any human clinical trial of a Product.

1.25Co-Commercialization Agreement” has the meaning set forth in Section 5.10.

1.26Collaboration” has the meaning set forth in Section 2.1.

1.27Collaboration Compound means any of the following: (a) FG-4592, (b) any HIF Compound (other than FG-4592) that is added to this Agreement pursuant to Section 3.6, and (c) any salts, esters, complexes, chelates, crystalline and amorphous morphic forms, pegylated forms, enantiomers (excluding regioisomers), prodrugs, solvates, metabolites and catabolites of any of the foregoing ((a) or (b)).

1.28Collaboration Inventions” has the meaning set forth in Section 9.2.

1.29Combination Product” means a Product that is comprised of or contains a Collaboration Compound as an active ingredient together with one (1) or more other active ingredients and is sold either as a fixed dose/unit or as separate doses/units in a single package.

1.30Commercialization” means the commercial manufacture, marketing, promotion, sale and/or distribution of Products in the Territory.  Commercialization includes commercial activities conducted in preparation for Product launch in each indication.  “Commercialize has a correlative meaning.

1.31Commercialization Costs” means all costs incurred by or on behalf of FibroGen that are directly and reasonably allocable to the conduct of activities allocated to FibroGen under the U.S. Commercialization Plan or Co-Commercialization Agreement for the Commercialization of Products in the U.S.

1.32Commercially Reasonable Efforts means, with respect to a Party’s obligations under this Agreement to Develop or Commercialize a Product, the carrying out of such obligations or tasks with a level of efforts and resources consistent with the commercially reasonable practices of (a) in the case of AstraZeneca, a pharmaceutical company the size and geographical scope of AstraZeneca and (b) in the case of FibroGen, a biotechnology company the size and geographical scope of FibroGen, in each case (a) and (b) for the development or commercialization of similarly situated pharmaceutical products as such Product and at a similar stage of development or commercialization, taking into consideration their safety and efficacy, their cost to develop, the nature and extent of their market exclusivity (including patent coverage and regulatory exclusivity), the likelihood of Regulatory Approval, their expected profitability, including the

4.

 

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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amounts of marketing and promotional expenditures with respect to such products and generic products, and the competitiveness of alternative compounds and products.  Commercially Reasonable Efforts requires that the Party: (a) promptly assign responsibility for such obligations or tasks to specific employee(s) who are held accountable for progress and monitor such progress on an on-going basis, (b) set and consistently seek to achieve specific and meaningful objectives for carrying out such obligations, and (c) consistently make and implement decisions and allocate resources designed to advance progress with respect to such objectives.  For the avoidance of doubt, the commitment to use “Commercially Reasonable Efforts” shall not preclude the suspension or discontinuance by AstraZeneca of any Product, if appropriate, based on the foregoing considerations.

1.33Committee” means the Joint Steering Committee, Joint Development Committee, Joint Commercialization Committee or IP Committee, or any other subcommittee established under Article 2, as applicable.

1.34Compliance Audit” has the meaning set forth in Section 10.3(e).

1.35Confidential Information” means, with respect to a Party, all Information of such Party that is disclosed to the other Party under this Agreement, which may include, without limitation, specifications, know-how, trade secrets, technical information, models, business information, inventions, discoveries, methods, procedures, formulae, protocols, techniques, data, and unpublished patent applications, whether disclosed in oral, written, graphic, or electronic form. All confidential Information disclosed by either Party pursuant to the Existing Confidentiality Agreement shall be deemed to be Confidential Information of the disclosing Party hereunder (with the mutual understanding and agreement that any use or disclosure thereof that is authorized under Article 12 shall not be restricted by, or be deemed a violation of, such Existing Confidentiality Agreement).

1.36Control means, with respect to any material, Information, or intellectual property right, that a Party (a) owns such material, Information, or intellectual property right, or (b) has a license or right to use to such material, Information, or intellectual property right, in each case with the ability to grant to the other Party access, a right to use, or a license, or a sublicense (as applicable) to such material, Information, or intellectual property right on the terms and conditions set forth herein, without violating the terms of any agreement or other arrangement with any Third Party.

1.37Core Indication” means any of the following: (a) treatment of anemia in patients with chronic kidney disease undergoing dialysis, (b) treatment of anemia in patients with chronic kidney disease not undergoing dialysis, (c) [ * ]).

1.38Covenant Period 1” has the meaning set forth in Section 7.4(a)(ii).

1.39Covenant Period 2” has the meaning set forth in Section 7.4(a)(iii).

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[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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1.40CPI-U” means the Consumer Price Index for All Urban Consumers (All Items), or any successor to such published measure, not seasonally adjusted, as published by the U.S. Department of Labor Bureau of Labor Statistics.

1.41Designated Indication” has the meaning set forth in Section 3.5(a).

1.42Designated Product” has the meaning set forth in Section 8.4(a).

1.43Development” means all activities that relate to (a) obtaining, maintaining or expanding Regulatory Approval of a Product for one or more indications or (b) developing the process for the manufacture of clinical and commercial quantities of drug substance or drug Product.  This includes: (i) preclinical testing, toxicology and Clinical Trials; (ii) preparation, submission, review, statistical analysis, report writing and development of data or information for the purpose of submission to a governmental authority to obtain, maintain and/or expand Regulatory Approval of a Product, and outside counsel regulatory legal services related thereto; and (iii) manufacturing process development and scale-up for drug substance and drug product,  test method development, packaging development, stability testing, qualification and validation, production of drug substance and drug product, in bulk for preclinical and clinical studies, and related quality assurance technical support activities; provided, however, that Development shall exclude Commercialization.  For clarity, Development shall include those Phase 4 Clinical Trials that are included in clause (b) of the definition of Phase 4 Clinical Trials.  “Develop has a correlative meaning.

1.44Development Budget means the budget associated with the activities conducted under the Development Plan for the U.S., detailing the anticipated Development Costs.

1.45Development Costs” means all costs incurred by or on behalf of FibroGen or AstraZeneca that are reasonably allocable to the Development of Products for the U.S. in accordance with the Development Plan, which shall equal the sum of (a) Personnel Costs, (b) the Fully Burdened Cost of Collaboration Compound or Product or comparator drug, concomitant drug, placebo or other materials used in any Clinical Trial or Nonclinical Studies, and (c) all other out-of-pocket costs, in each case for activities for the U.S.

1.46Development Data” has the meaning set forth in Section 3.10(a).

1.47Development Plan” means the plan for conducting collaborative Development of Products for approval and use in the U.S. and RoW, as set forth in Section 3.2(a).

1.48Development Sharing Period” means the time period commencing on August 1, 2013 and ending on the date on which the Parties have incurred two hundred thirty-three million Dollars ($233,000,000) in Development Costs.

1.49Development Strategy” has the meaning set forth in Section 3.2(c).

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1.50DFCI Agreement” means the License Agreement between FibroGen and the Dana-Farber Cancer Institute, Inc. (“DFCI”), dated March 29, 2006, a redacted copy of which is attached hereto as Exhibit B.

1.51Distributor” has the meaning set forth in Section 7.3(c).

1.52Dollar” or “$” means United States dollar.

1.53ESA Approved Indications” means the following indications: (a) treatment of anemia in patients with chronic kidney disease undergoing dialysis, (b) treatment of anemia in patients with chronic kidney disease not undergoing dialysis, (c) [ * ].

1.54EU means all of the European Union member states as of the applicable time during the Term.

1.55Executive Officer means, in the case of AstraZeneca, AstraZeneca’s Chief Executive Officer or any senior executive designated by and who reports directly to the Chief Executive Officer of AstraZeneca, and in the case of FibroGen, FibroGen’s Chief Executive Officer.

1.56Existing Confidentiality Agreement” means, collectively, the Non-Disclosure Agreement between FibroGen and AstraZeneca dated June 21, 2012, as amended February 7, 2013, and May 23, 2013, and the Non-Disclosure Agreement between FibroGen and AstraZeneca dated April 1, 2013.

1.57FCPA” means the U.S. Foreign Corrupt Practices Act of 1977, as amended, including the rules and regulations thereunder.

1.58FDA means the United States Food and Drug Administration or its successor.

1.59FD&C Act means the United States Federal Food, Drug and Cosmetic Act, as amended.

1.60FG-4592” means the molecule with the chemical structure set forth on Exhibit C.

1.61FibroGen IPO” means the initial public offering of its securities by FibroGen in any of the U.S., United Kingdom, Spain, France, Italy, Germany, Japan, China or Hong Kong.

1.62FibroGen Know-How means all Information Controlled as of the Effective Date or thereafter during the Term by FibroGen and/or its Affiliate(s) and reasonably necessary or useful for the development, manufacture, use, importation or sale of Collaboration Compounds or Products in the Field; including, without limitation, any such Information made or generated by or on behalf of FibroGen or its Affiliate in the course of performing FibroGen’s obligations or exercising FibroGen’s rights under this Agreement. The use of “Affiliate” in this definition shall exclude any Third Party that becomes an Affiliate due to such Third Party’s acquisition of FibroGen, except as provided in Section 15.5.  FibroGen Know-How shall exclude (a) rights under

7.

 

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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any FibroGen Patents and FibroGen’s interest in the Joint Patents and Joint Inventions and (b) any Third Party Information that is not included pursuant to Section 8.8(d).

1.63FibroGen Patents means (i) the Listed Patents and (ii) all other Patents (excluding any Joint Patents) that are Controlled as of the Effective Date or thereafter during the Term by FibroGen and/or its Affiliate(s) and that claim the composition of matter, manufacture or use of one or more Collaboration Compounds or Products in the Field or that would otherwise be infringed (or with respect to patent applications, would be infringed if issued or granted with the then-currently pending claims), absent a license, by the manufacture, use or sale of any Collaboration Compound or Product in the Field.  The use of “Affiliate” in this definition shall exclude any Third Party that becomes an Affiliate due to such Third Party’s acquisition of FibroGen except as provided in Section 15.5.  FibroGen Patents does not include Third Party Patents that are not included pursuant to Section 8.8(d).

1.64FibroGen Technology means the FibroGen Patents, FibroGen Know-How, and FibroGen’s interest in Joint Patents and Joint Inventions.

1.65Field means (a) the treatment of anemia in humans and non-human animals, which means any treatment intended to increase hemoglobin levels or utilization or to increase hematocrit, as measured by acceptable clinical parameters, including unit volume concentrations of hemoglobin, red blood cell volume, or red blood cell count, and (b) any Designated Indication added to the Field pursuant to Section 3.5.  For the avoidance of doubt, the Core Indications, the ESA Approved Indications as well as the indications listed on Exhibit D are all included in clause (a) of the preceding sentence.

1.66First Commercial Sale means, with respect to a Product and country in the Territory, the first arm’s length sale for monetary value by AstraZeneca, its Affiliates or its Sublicensees to a Third Party intended for end use or consumption by the general public (regardless of when actual consumption occurs) of such Product in such country after Regulatory Approval (and any pricing or reimbursement approvals, if reasonably necessary to commence regular commercial sales) has been obtained in such country. For the avoidance of doubt, sales prior to receipt of Regulatory Approvals necessary to commence regular commercial sales, such as so-called “treatment IND sales”, “named patient sales” or “compassionate use sales”, shall not be construed as a First Commercial Sale.

1.67Fully Burdened Cost means, with respect to a Product, all costs actually incurred by FibroGen or its Affiliates attributable and fairly allocable to produce, package and distribute the Product to AstraZeneca or its carrier [ * ]) for the acquisition or sale of such Product, which costs to produce and package the Product will include the direct material and labor and indirect costs (fairly allocated) that are incurred by FibroGen or its Affiliates associated with the manufacture, filling, packaging, labeling, and preparation of product for shipment and/or other preparation of such Product, as applicable, including non-refundable and non-creditable Indirect Taxes, customs fees and customs duties.  Fully Burdened Cost will be determined in accordance with U.S. GAAP and will include the attributable and fairly allocable costs of facilities, labor, purchasing, depreciation of equipment, materials, payments to Third Parties for any necessary

8.

 

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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contract work for the manufacture or testing of the Product, quality assurance, quality control and other testing (including validation studies), storage (if requested by AstraZeneca), shipping and costs for distribution, and a reasonable allocation of general and administrative overhead for the manufacturing operations attributable to Product distribution to AstraZeneca.  These costs shall include capacity reservation charges paid to a Third Party, and the proportion of fixed overhead allocated to total available capacity reasonably reserved for the production of a Product, less the amount included in budgeted cost of goods (budgeted capacity); provided, that FibroGen shall use good faith efforts to utilize any such reserved but unused capacity.  By way of example, if fifteen percent (15%) of the total site capacity is reasonably reserved for the production of the Product and for the same period budgeted capacity is planned for only ten percent (10%) of the site, the fixed overhead related to the remaining five percent (5%) dedicated capacity shall be included in Fully Burdened Cost as reserve capacity.  Costs for distribution consist of the labor, materials and reasonably allocated overhead necessary to prepare and package the final product for shipment to AstraZeneca.

1.68GCP” means the current standards for clinical trials for pharmaceuticals, as set forth in the U.S. Code of Federal Regulations, ICH guidelines and applicable regulations, laws or rules as promulgated thereunder, as amended from time to time, and such standards of good clinical practice as are required in other countries than the U.S. in which a Product is intended to be sold to the extent such standards are not less stringent than U.S. GCP.

1.69Generic Product means, with respect to a Product and a particular country, any pharmaceutical product (a) that is sold in such country by a Third Party that is not a Sublicensee or Distributor selling such product under authorization from AstraZeneca or its Affiliates, (b) that contains the same Collaboration Compound as the relevant Product and that is in the same dosage form as such Product and for the same route of administration as such Product and is approved by the Regulatory Authority for such country for an indication for which such Product obtained Regulatory Approval in such country and (c) that is approved in reliance on the prior approval of such Product as determined by the applicable Regulatory Authority.

1.70Governmental Authority” means any multi-national, federal, state, local, municipal or other government authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, court or other tribunal).

1.71Government Official” means (i) any individual or entity employed by or acting on behalf of a government, government-controlled agency or entity or public international organization, (ii) any political party, party official or candidate, (iii) any individual or entity that holds or performs the duties of an appointment, office or position created by custom or convention or (iv) any individual or entity that holds himself, herself or itself out to be the authorized intermediary of any of the foregoing.

1.72HICP” means, with respect to a country, the Harmonised Index of Consumer Prices for such country published by Eurostat.

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[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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1.73HIF Compound” means any compound that stabilizes hypoxia-inducible factor (“HIF”) or that modulates HIF prolyl hydroxylase activity.

1.74Hourly Rate” means, as of the Effective Date, $[ * ], which is the blended hourly fully burdened rate for FibroGen’s employees and agents conducting Development activities.  The Hourly Rate will be adjusted annually as of each January 1 (commencing 2014) to reflect the percentage increase or decrease (as the case may be) from the preceding year in the average consumer price, calculated as the average of (i) the annual percentage change of US CPI-U and (ii) the average of the annual percentage changes of HICP for the 5 major EU countries (UK, France, Germany, Italy, and Spain) for such annual period, except as otherwise mutually agreed by the Parties.  The Hourly Rate includes, without limitation, the following general expense categories: salaries and wages (including bonuses, moving expenses, and payroll taxes), benefits provided (including health benefits, defined contribution, defined benefit plans, vacations, etc.), direct employee costs (including recruitment costs, internal and external training costs, computer charges, automobile leases, subscriptions and reference materials, telephone, fax, cellular phone, and copy machines and related costs), and allocation of other overhead costs (including rent, insurance, and utilities).

1.75IND means (a) an Investigational New Drug Application as defined in the FD&C Act and applicable regulations promulgated thereunder by the FDA, or (b) the equivalent application to the equivalent Regulatory Authority in any other regulatory jurisdiction, the filing of which is necessary to initiate or conduct clinical testing of a pharmaceutical product in humans in such jurisdiction.

1.76Indirect Taxes” means VAT, sales taxes, consumption taxes and other similar taxes required by law to be disclosed on the invoice.

1.77Information” means any data, results and information of any type whatsoever, in any tangible or intangible form, including, without limitation, know-how, trade secrets, practices, techniques, methods, processes, inventions, developments, specifications, formulations, formulae, compositions of matter of any type or kind, software, algorithms, marketing reports, clinical and non-clinical study reports, regulatory submission documents and summaries, expertise, stability, technology, test data including pharmacological, biological, chemical, biochemical, toxicological and clinical test data, analytical and quality control data, stability data, studies and procedures, in all cases, patentable or otherwise.

1.78Initial Development Plan” has the meaning set forth in Section 3.2(b).

1.79Inventions” has the meaning set forth in Section 9.2.

1.80IP Committee” has the meaning set forth in Section 9.1.

1.81Joint Commercialization Committee” or JCC means the committee formed by the Parties as described in Section 2.4.

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[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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1.82Joint Development Committee or “JDC means the committee formed by the Parties as described in Section 2.3.

1.83Joint Inventions” has the meaning set forth in Section 9.2.

1.84Joint Patents has the meaning set forth in Section 9.2.

1.85Joint Project Team or “JPT” has the meaning set forth in Section 2.9.

1.86Joint Steering Committee” or JSC means the committee formed by the Parties as described in Section 2.2.

1.87Large Dialysis Organization” or LDO means (a) an organization that operates out-patient dialysis centers and that has at least twenty-five percent (25%) of the market share (measured by number of patients as determined by USRDS or any successor) of dialysis centers in the U.S. and (b) Dialysis Clinic Inc.  Examples of Large Dialysis Organizations as of the Effective Date in clause (a) are Fresenius Medical Care and DaVita HealthCare Partners Inc.

1.88Listed Patents” means the Patents listed on Exhibit E.  The Parties may update such exhibit from time to time upon mutual written agreement, e.g., to update the status of the listed Patents, to add newly filed FibroGen Patents, or to make other agreed revisions.

1.89Marketing Authorization Application” or MAA means an application for Regulatory Approval in a country, territory or possession other than the U.S.

1.90Marks has the meaning set forth in Section 9.11.

1.91Material Anti-Corruption Law Violation” means a violation of an Anti-Corruption Law relating to the subject matter of this Agreement which [ * ] a material adverse effect on either Party or on the reputation of either Party because of its relationship with the other Party.

1.92Medical Scientific Liaison” or “MSL” means a field-based professional with scientific, medical and clinical expertise who provides medical and scientific support for marketed products, new indications and compounds in development or registration.  An MSL engages in scientific exchange with medical and scientific experts including investigators, key opinion leaders, physicians and other medical professionals and customers.

1.93NDA means a New Drug Application, as defined in the FD&C Act and applicable regulations promulgated thereunder by the FDA.

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[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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1.94Net Sales” means the gross invoiced amount on sales of a Product by AstraZeneca, its Affiliates or its or their Sublicensees to Third Parties (including Distributors but excluding Sublicensees) in the Territory, after deduction of the following amounts:

(a)normal and customary trade, quantity or prompt settlement discounts (including chargebacks and allowances) actually allowed;

(b)amounts repaid or credited by reason of rejection, returns or recalls of goods, rebates or bona fide price reductions determined by AstraZeneca, its Affiliates or its or their Sublicensees in good faith;

(c)rebates and similar payments made with respect to sales paid for by managed care organizations, hospitals, other buying groups or any governmental or regulatory authority such as, by way of illustration and not in limitation of the Parties’ rights under this Agreement, federal or state Medicaid, Medicare or similar state program in the U.S. or equivalent governmental program in any other country;

(d)any invoiced amounts that are not collected by AstraZeneca, its Affiliates or its or their Sublicensees, including bad debts (provided that such amounts will be added to Net Sales if and when recovered), up to an amount not to exceed [ * ]) of Net Sales;

(e)excise taxes, Indirect Taxes, customs duties, customs levies and import fees imposed on the sale, importation, use or distribution of the Products;

(f)[ * ]; and

(g)as an allowance for transportation costs, distribution expenses, special packaging and related insurance charges, [ * ].

For clarity, any deduction made pursuant to one subsection above, shall not be additionally deducted in the event that such deduction may also apply in a separate subsection (i.e., no double-counting).

In the event that a Product is sold in any country in the form of a Combination Product, Net Sales of such Combination Product shall be adjusted by multiplying actual Net Sales of such Combination Product in such country calculated pursuant to the foregoing definition of “Net Sales” by the fraction A/(A+B), where A is the average invoice price in such country of any Product that contains the same Collaboration Compound(s) as such Combination Product as its sole active ingredient(s), if sold separately in such country, and B is the average invoice price in such country of each product that contains active ingredient(s) other than the Collaboration Compound(s) contained in such Combination Product as its sole active ingredient(s), if sold separately in such country; provided that the invoice price in a country for each Product that contains only the Collaboration Compound(s) and each product that contains solely active ingredient(s) other than the Collaboration Compound(s) included in the Combination Product shall be for a quantity comparable to that used in such Combination Product and of substantially the same class, purity and potency or functionality, as applicable.  If either such Product that contains the Collaboration

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[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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Compound(s) as its sole active ingredient or a product that contains the active ingredient(s) (other than the Product) in the Combination Product as its sole active ingredient(s) is not sold separately in a particular country, the Parties shall negotiate in good faith a reasonable adjustment to Net Sales in such country that takes into account the medical contribution to the Combination Product of and all other factors, including patent coverage, reasonably relevant to the relative value of the Collaboration Compound(s) on the one hand and all of the other active ingredient(s), collectively, on the other hand.

In the case of pharmacy incentive programs, hospital performance incentive programs, chargebacks, disease management programs, similar programs or discounts on portfolio product offerings, all rebates, discounts and other forms of reimbursements shall be allocated among products on the basis on which such rebates, discounts and other forms of reimbursements were actually granted or, if such basis cannot be determined, in accordance with AstraZeneca’s, its Affiliates’ or its or their Sublicensees’ existing allocation method; provided that any such allocation shall be done in accordance with applicable law, including any price reporting laws, rules and regulations.

Net Sales will be calculated using AstraZeneca’s internal audited systems consistently applied to report such sales as adjusted for any of the deductions set forth above not taken into account in such systems.  Deductions pursuant to item (d) above will be taken in the Calendar Quarter in which such sales are no longer recorded as a receivable.

Any free of charge disposition or use of reasonable quantities of a Product, up to the amount determined by the JCC, for regulatory or marketing purposes (it being understood and agreed that neither Party shall have the right to distribute the Product as samples except pursuant to Section 5.7) such as compassionate use or indigent patient programs, will not be deemed a sale or disposition for calculating Net Sales.  Sales and other transfer of Product between any of AstraZeneca, its Affiliates and Sublicensees will not give rise to Net Sales except if the purchaser is an end user.

1.95Nonclinical Studies” means all in vivo and in vitro non-human studies of Collaboration Compounds and Products, including non-clinical pharmacology, toxicology, tumor and teratogenicity studies.

1.96Patent” means (i) all national, regional and international patents and patent applications, including provisional patent applications, (ii) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from any of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals, and continued prosecution applications, (iii) any and all patents that have issued or in the future issue from the foregoing patent applications ((i) and (ii)), including utility models, petty patents and design patents and certificates of invention, (iv) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((i), (ii) and (iii)), and (v) any similar rights, including so-called pipeline protection, or any importation, revalidation, confirmation or

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[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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introduction patent or registration patent or patent of additions to any such foregoing patent applications and patents.

1.97Personnel Costs” means, with respect to a reporting period, the total number of hours FibroGen employees and consultants or AstraZeneca employees and consultants, as applicable, actually spent in such reporting period conducting activities under the Development Plan multiplied by the Hourly Rate.  Such activities may include, without limitation, clinical development, research activities directly in support of the Development program, management of clinical research organizations and other vendors, regulatory, supply chain, medical monitoring, biostatistics, safety data collection, monitoring and exchange, and clinical and nonclinical finance and contracting.

1.98Pharmacovigilance Agreement” has the meaning set forth in Section 4.3.

1.99Phase 2 Clinical Trial” means a Clinical Trial of a Product that would satisfy the requirements of 21 CFR 312.21(b) or its foreign equivalents.

1.100Phase 3 Clinical Trial” means a Clinical Trial of a Product that would satisfy the requirements of 21 CFR 312.21(c) or its foreign equivalents.

1.101Phase 4 Clinical Trial” means a Clinical Trial of a Product conducted after Regulatory Approval of such Product has been obtained from an appropriate Regulatory Authority, which trial is (a) conducted voluntarily by a Party to enhance marketing or scientific knowledge of the Product, or (b) conducted due to a request or requirement of a Regulatory Authority.

1.102Product means any pharmaceutical product (including all forms, presentations, dosage strengths and formulations) containing as an active ingredient a Collaboration Compound alone or in combination with one or more other therapeutically active ingredients.

1.103Product Information” has the meaning set forth in Section 12.1.

1.104Product Infringement” has the meaning set forth in Section 9.5(a)(i).

1.105Promotional Materials” means all sales representative training materials and all written, printed, graphic, electronic, audio or video matter, including, without limitation, journal advertisements, sales visual aids, formulary binders, reprints, direct mail, direct-to-consumer advertising, internet postings and sites and broadcast advertisements intended for use or used by either Party or its Affiliates or sublicensees in connection with any promotion of a Product.

1.106Publication” has the meaning set forth in Section 12.5(b).

1.107Regulatory Approval means all approvals necessary for the manufacture, marketing, importation and sale of a Product for one or more indications in the Field and in a country or regulatory jurisdiction, which may include, without limitation, satisfaction of all applicable regulatory and notification requirements, but which shall exclude any pricing and reimbursement approvals.

14.

 

[ * ] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would likely cause competitive harm to the company if publicly disclosed.


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1.108Regulatory Authority means, in a particular country or regulatory jurisdiction, any applicable Governmental Authority involved in granting Regulatory Approval and/or, to the extent required in such country or regulatory jurisdiction, pricing or reimbursement approval of a Product in such country or regulatory jurisdiction.

1.109Regulatory Materials means regulatory applications, submissions, notifications, registrations, Regulatory Approvals and/or other material filings or correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports relating to any communications with any Regulatory Authority), or other approvals granted by, a Regulatory Authority that are necessary or reasonably desirable in order to Develop, manufacture, market, sell or otherwise Commercialize a Product in a particular country or regulatory jurisdiction.  Regulatory Materials include, without limitation, INDs, MAAs, and NDAs.

1.110Representatives” has the meaning set forth in Section 10.3(a).

1.111RoW” means all countries of the Territory other than the U.S. For clarity, except as expressly set forth in Article 2, the territories licensed under the China Agreement are not included in RoW.

1.112SEC” means the U.S. Securities and Exchange Commission.

1.113Sublicense Agreement” has the meaning set forth in Section 7.3(b).

1.114Sublicensee” means any Third Party granted a sublicense by AstraZeneca or any of its Affiliates under the rights licensed to AstraZeneca pursuant to Article 7.

1.115Subsequent Agreement” has the meaning set forth in Section 7.4(c).

1.116Subsequent Licensee has the meaning set forth in Section 7.4(c).

1.117Supply and Quality Agreement” has the meaning set forth in Section 6.5.

1.118Tax and Taxation” means any form of tax or taxation, levy, duty, charge, social security charge, contribution, or withholding of whatever nature (including any related fine, penalty, surcharge or interest) imposed by, or payable to, a Tax Authority.

1.119Tax Authority” or Tax Authorities” means any government, state or municipality, or any local, state, federal or other fiscal, revenue, customs, or excise authority, body or official anywhere in the world, authorized to levy Tax.

1.120Technical Product Failure” means (a) a [ * ] of a Collaboration Compound or Product under Development or Commercialization under this Agreement, as determined (including following a review of the Carcinogenicity Studies) (i) by a consensus decision by the JSC or (ii), following referral of the matter to the Executive Officers pursuant to Section 2.6(c), by a consensus decision by the Executive Officers, or (iii), in the event that a consensus decision by the Executive Officers has not been attained within twenty (20) Business Days after the JSC’s

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submission of the matter to them, by expedited resolution in accordance with Section 14.8; or (b) a Regulatory Authority action or decision [ * ].

1.121Term has the meaning set forth in Section 13.1.

1.122Territory means all countries of the world other than (a) the countries listed on Exhibit A and (b) China (including Hong Kong SAR and Macau SAR, but excluding Taiwan region).  The Territory consists of the U.S. and RoW.

1.123Third Party means any entity other than FibroGen or AstraZeneca or an Affiliate of either of them.

1.124Transatlantic Clinical Development Plan” or TCDP” has the meaning set forth in Section 3.2(b).

1.125U.S. means the United States of America (including all possessions and territories thereof).

1.126U.S. Commercialization Budget” has the meaning set forth in Section 5.2.

1.127U.S. Commercialization Plan” has the meaning set forth in Section 5.2.

1.128U.S. GAAP” means generally accepted accounting principles in the U.S.

1.129Valid Claim” means, with respect to a Product in a particular country, any claim of a FibroGen Patent that specifically or generically claims (i) the Collaboration Compound included in such Product as a composition of matter, (ii) a method of manufacture of such Collaboration Compound, or (iii) a method of treatment or other use of such Collaboration Compound [ * ] and either:

(a)with respect to a granted and unexpired Patent in such country, that (i) has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, which decision is unappealable or unappealed within the time allowed for appeal, and (ii) has not been abandoned, disclaimed, denied or admitted to be invalid or unenforceable through reissue or disclaimer or otherwise; or

(b)with respect to a pending Patent application, that was filed and is being prosecuted in good faith and has not been abandoned or finally disallowed without the possibility of appeal or re-filing of the application. For purposes hereof, a claim in a patent application that has not been granted within [ * ]) years from the priority date for such claim (or, with respect to [ * ]) shall not be considered to be a Valid Claim, unless and until such claim thereafter issues such that it is included in subsection (a) above.

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ARTICLE 2

Collaboration; Governance

2.1Collaboration Overview.  The Parties desire and intend to collaborate with respect to the Development and Commercialization of Products in the Field in the Territory, as and to the extent set forth in this Agreement (the “Collaboration”).  It is intended that the Collaboration utilize AstraZeneca’s position as a large, fully-integrated pharmaceutical company, while recognizing FibroGen’s current experience and expertise in, and aspirations to further develop its clinical development and commercialization capabilities with respect to, HIF Compounds.

2.2Joint Steering Committee.

(a)Purpose; Formation.  The Parties hereby establish a joint steering committee (the “JSC”) that will monitor and oversee their activities under this Agreement in the Territory and under the China Agreement in China, resolve disputes within subcommittees and facilitate communications between the Parties with respect to the Development and Commercialization of Products in the Territory and in China (under the China Agreement), all in accordance with this Section 2.2.

(b)Composition.  Each Party shall initially appoint five (5) representatives of such Party or its applicable Affiliates to the JSC. Each representative appointed to the JSC shall have sufficient seniority within the applicable Party or its Affiliate to make decisions arising within the scope of the JSC’s responsibilities.  The Parties’ initial representatives to the JSC are set forth on Exhibit G.  The JSC may change its size from time to time by mutual consent of its members, provided that the JSC shall at all times consist of an equal number of representatives of each of FibroGen and AstraZeneca.  Each Party may replace its JSC representatives at any time upon written notice to the other Party.  The JSC may invite non-members (including consultants and advisors of a Party who are under an obligation of confidentiality consistent with this Agreement) to participate in the discussions and meetings of the JSC, provided that such participants shall have no voting authority at the JSC.  Each Party shall appoint a secretariat to the JSC who is not a member of the JSC.

(c)Specific Responsibilities.  In addition to its overall responsibility for monitoring and providing a forum to discuss and coordinate the Parties’ activities under this Agreement, the JSC shall in particular:

(i)oversee the collaborative activities of the Parties under this Agreement and the China Agreement, including overseeing the China Committee;

(ii)oversee and delegate responsibility for the use of any information arising under the Astellas Agreements, to the extent that (A) [ * ] such information; and (B) such information [ * ] this Agreement;

(iii)review and fully discuss the Development and Commercialization of Products and any other ongoing activities;

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(iv)receive and discuss reports from the JDC and JCC and provide guidance thereto, and approve the Development Plan (and associated Development Budget) and U.S. Commercialization Plan and amendments thereto;

(v)receive and discuss reports from the China Committee and provide guidance thereto, and approve the applicable Development and Commercialization plans and budgets;

(vi)receive and discuss reports from the IP Committee, provide guidance thereto and review strategies for obtaining, maintaining, defending and enforcing patent and trademark protection for Products within the Territory;

(vii)attempt to resolve issues presented to it by, and disputes within, the JDC, JCC and China Committee or any other subcommittee;

(viii)at least annually, discuss and determine indications for Development of Products;

(ix)review and approve the filing of an NDA for a Product in the U.S. prior to submission;

(x)establish such additional joint subcommittees as it deems necessary to achieve the objectives and intent of this Agreement;

(xi)review and approve the JPT Charter and any subsequent amendments thereto, including the composition and responsibilities of the Core JPT; and

(xii)perform such other functions as appropriate to further the purposes of this Agreement as allocated to it in writing by the Parties.

The JSC shall further – until the date when the JDC or the JCC has been formed – assume the responsibilities of the JDC and the JCC, as applicable, and delegate certain responsibilities to the Core JPT as set forth in Schedule G(a) for the JDC and Schedule G(b) for the JCC.

(d)Delegation or Assumption of Responsibilities by the JSC.  The JSC may by mutual consent of its members:

(i)delegate any of its responsibilities set out in this Section 2.2 or in Schedule G(a) or G(b) to any of its subcommittees or the Core JPT; or

(ii)assume any responsibilities assigned to any of its subcommittees.

(e)Meetings.  The JSC shall hold its first meeting within thirty (30) days after the Effective Date.  The JSC shall meet at least one (1) time per Calendar Quarter during the Term unless the Parties mutually agree in writing to a different frequency for such meetings.  Either

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Party may also call a special meeting of the JSC (by videoconference or teleconference) by at least ten (10) Business Days prior written notice to the other Party in the event such Party reasonably believes that a significant matter must be addressed prior to the next scheduled meeting, and such Party shall provide the JSC no later than ten (10) Business Days prior to the special meeting with materials reasonably adequate to enable an informed decision; provided, however, that where a special meeting is called for on shorter notice with regard to a matter that does not admit delay, such notice and such materials shall be provided as early as possible in advance of such meeting.  No later than ten (10) Business Days (or such shorter period as may be necessary in the event of a special meeting called for on shorter notice in accordance with the foregoing) prior to any meeting of the JSC, the secretariats of the JSC shall jointly prepare and circulate an agenda for such meeting.  The JSC may meet in person, by videoconference or by teleconference.  Notwithstanding the foregoing, at least two (2) meetings per Calendar Year shall be in person unless the Parties mutually agree in writing to waive such requirement in lieu of a videoconference or teleconference.  In-person JSC meetings will be held at locations alternately selected and hosted by FibroGen and by AstraZeneca.  The host Party shall be responsible for the costs and expenses of the JSC meeting hosted, provided that each Party will bear the expense of its respective JSC members’ and other attendees’ participation in JSC meetings, including travel costs.  Meetings of the JSC shall be effective only if at least one (1) representative of each Party is present or participating in such meeting.  The JSC secretariat of the host Party will be responsible for keeping reasonably detailed written minutes of all JSC meetings that reflect, without limitation, material decisions made at such meetings.  The JSC secretariat of the host Party shall send draft meeting minutes to the other Party’s JSC secretariat, and each secretariat shall seek and obtain review and approval of such minutes from its respective Party’s members of the JSC within ten (10) Business Days after each JSC meeting.  Such minutes will be deemed approved unless one or more members of the JSC objects to the accuracy of such minutes within ten (10) Business Days of receipt.

(f)Decision-Making.  In addition to resolving issues specifically delegated to it, the JSC shall have the authority to resolve any disputes within the Collaboration not resolved by the JDC, JCC, China Committee and any other committees that the Parties may subsequently create to assist in governance of the Collaboration, except where expressly specified elsewhere in this Agreement.  The representatives from each Party will have, collectively, one (1) vote on behalf of that Party, and all decision making shall be by consensus.  Disputes at the JSC shall be handled in accordance with Section 2.6.

2.3Joint Development Committee.

(a)Formation; Composition.  At a time determined by the JSC, the Parties shall establish a committee to oversee Development of Product(s) in the Territory and in China in accordance with the Development Plan(s) for such Product(s) and to coordinate the Development activities of the Parties (the “JDC”) and prior thereto, the JSC will be responsible for all JDC responsibilities except for the specific responsibilities it delegates to the Core JPT as set out in Schedule G(a).  

Each Party shall appoint three (3) representatives of such Party or its Affiliates to the JDC at its inception. Each representative appointed to the JDC shall have knowledge and expertise in relevant

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aspects of the development of small molecule pharmaceutical products, including in the area of chronic kidney disease or cardiovascular or metabolic disorders and having sufficient seniority within the applicable Party or Affiliate to make decisions arising within the scope of the JDC’s responsibilities.  The JDC may change its size from time to time by mutual consent of its members, provided that the JDC shall consist at all times of an equal number of representatives of each of FibroGen and AstraZeneca.  Each Party may replace its JDC representatives at any time upon written notice to the other Party.  The JDC may invite non-members (including consultants and advisors of a Party who are under an obligation of confidentiality consistent with this Agreement) to participate in the discussions and meetings of the JDC, provided that such participants shall have no voting authority at the JDC.  The JDC shall have two (2) co-chairmen, one selected by FibroGen and one selected by AstraZeneca.  The role of the co-chairmen shall be to convene and preside at meetings of the JDC, but they shall have no additional powers or rights beyond those held by the other JDC representatives.  Each Party shall appoint a secretariat to the JDC.

(b)Specific Responsibilities of the JDC.  In addition to its general responsibilities, the JDC (or the JSC until the JDC is formed, with certain delegations as set forth in this Section 2.3 and Schedule G(a)) shall in particular:

(i)provide regular reports to the JSC regarding the development of the Product, and discuss, prepare and submit to the JSC for approval annual and interim amendments to the Development Plan (and the Development Budget) for each Product;

(ii)discuss and manage the implementation of the Initial Development Plan;

(iii)oversee the conduct of Development;

(iv)discuss the audited final report from the Carcinogenicity Studies, including whether or not a Technical Product Failure has occurred, and provide input thereon to the JSC;

(v)propose to the JSC particular studies to be conducted;

(vi)create, implement and review the Development Strategy for Development in the Territory and the design of all Clinical Trials and Nonclinical Studies conducted under each Development Plan, including Phase 4 Clinical Trials;

(vii)oversee any CMC related development activities, e.g. stability studies or packaging development, as well as other activities to prepare for supply of drug substance and finished Product for Commercialization, including to oversee the selection process for, and select (pursuant to Section 6.4), a contract manufacturer to be used by FibroGen for commercial supplies;

(viii)decide whether and when to initiate or discontinue any Clinical Trial and any Nonclinical Study under each Development Plan, including Phase 4 Clinical Trials;

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(ix)allocate budgeted resources and determine priorities for each Clinical Trial and Nonclinical Study under each Development Plan, including Phase 4 Clinical Trials;

(x)oversee the conduct of all Clinical Trials and Nonclinical Studies under each Development Plan, including Phase 4 Clinical Trials;

(xi)select Third Party contractors to conduct Clinical Trials of Products;

(xii)facilitate the flow of Information between the Parties with respect to the Development of Products, including Development Data [ * ] under this Agreement;

(xiii)discuss whether to Develop Products for other indications and propose any such indications to the JSC;

(xiv)allocate primary responsibility as between the Parties for tasks relating to Development of Products where not already specified in the Development Plan;

(xv)discuss the requirements for Regulatory Approval in the Territory and oversee and coordinate regulatory matters with respect to Products in the Territory, including to review and approve material regulatory filings (other than the filing of an NDA in the U.S., which shall be approved by the JSC) prior to submission thereof;

(xvi)establish a publication strategy for publications and presentations related to Products in the Territory and review and approve all such publications in accordance with Section 12.5;

(xvii)facilitate the flow of Information between the Parties with respect to obtaining Regulatory Approval for Products; and

(xviii)perform such other functions as may be appropriate to further the purposes of this Agreement, as directed by the JSC.

(c)Meetings.  Following its inception,  the JDC shall meet at least one (1) time per Calendar Quarter (or more frequently when necessary), spaced at regular intervals, unless the Parties mutually agree in writing to a different frequency.  Either Party may also call a special meeting of the JDC (by videoconference or teleconference) by at least ten (10) Business Days prior written notice to the other Party in the event such Party reasonably believes that a significant matter must be addressed prior to the next scheduled meeting, and such Party shall provide the JDC no later than ten (10) Business Days prior to the special meeting with materials reasonably adequate to enable an informed decision; provided, however, that where a special meeting is called for on shorter notice with regard to a matter that does not admit delay, such notice and such materials shall be provided as early as possible in advance of such meeting.  No later than ten (10) Business Days (or such shorter period as may be necessary in the event of a special meeting called for on shorter notice in accordance with the foregoing) prior to any meeting of the JDC, the secretariats shall jointly prepare and circulate an agenda for such meeting; provided, however, that either Party shall be free to propose additional topics to be included on such agenda, either prior to or, subject

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to the consent of the other Party, in the course of such meeting.  The JDC may meet in person, or at the request of either Party, by videoconference or teleconference.  In-person JDC meetings will be held at locations alternately selected and hosted by FibroGen and by AstraZeneca.  Each Party shall report to the JDC on all material issues relating to the Development of Products for and in the Territory at the JDC meeting occurring after such issues arise.  The host Party shall be responsible for the costs and expenses of the JDC meeting hosted, provided that each Party will bear the expense of its respective JDC members’ and other attendees’ participation in JDC meetings, including travel costs.  Meetings of the JDC shall be effective only if at least one (1) representative of each Party is present or participating in such meeting.  The secretariat of the host Party shall be responsible for keeping reasonably detailed written minutes of all JDC meetings that reflect all decisions made at such meetings.  The secretariat of the host Party shall send meeting minutes to the other Party’s secretariat, and each secretariat shall seek and obtain review and approval of such minutes from its respective Party’s members of the JDC within ten (10) Business Days after each JDC meeting.  Minutes will be deemed approved unless one or more members of the JDC objects to the accuracy of such minutes within ten (10) Business Days of receipt.

(d)Decision-Making.  The JDC shall act by consensus.  The representatives from each Party will have, collectively, one (1) vote on behalf of that Party.  If the JDC cannot reach consensus on an issue that comes before the JDC and over which the JDC has oversight, then the Parties shall refer such matter to the JSC for resolution in accordance with Sections 2.2(e) and 2.6(b).

2.4Joint Commercialization Committee.

(a)Formation; Composition.  At a time determined by the JSC, but no later than the earlier of (i) eighteen (18) months prior to the date of the expected First Commercial Sale of the Product in the U.S. and (ii) six (6) months prior to the projected date of submission of the first NDA for the Product in the U.S., the Parties shall establish a committee to oversee Commercialization of Products in the Territory and in China (the “JCC”), and prior thereto, the JSC will be responsible for all JCC responsibilities except for the specific responsibilities it delegates to the Core JPT as set out in Schedule G(b).  

Each Party shall appoint three (3) representatives of such Party or its Affiliate to the JCC at its inception. Each representative appointed to the JCC shall have knowledge and expertise in relevant aspects of the commercialization of small molecule pharmaceutical products, including in the area of chronic kidney disease or cardiovascular or metabolic disorders and having sufficient seniority within the applicable Party or its Affiliate to make decisions arising with the scope of the JCC’s responsibilities.  The JCC may change its size from time to time by mutual consent of its members, provided that the JCC shall consist at all times of an equal number of representatives of each of FibroGen and AstraZeneca.  Each Party may replace its JCC representatives at any time upon written notice to the other Party.  The JCC may invite non-members (including consultants and advisors of a Party who are under an obligation of confidentiality consistent with this Agreement) to participate in the discussions and meetings of the JCC, provided that such participants shall have no voting authority at the JCC.  The JCC shall have a chairman, who shall be selected by AstraZeneca.  The role of the chairman shall be to convene and preside at meetings of the JCC,

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but the chairman shall have no additional powers or rights beyond those held by the other JCC representatives.

(b)Specific Responsibilities of the Joint Commercialization Committee.  In addition to its general responsibilities, the Joint Commercialization Committee (or the JSC until the JCC is formed, with certain delegations as set forth in this Section 2.4 and Schedule G(b)) shall in particular:

(i)oversee Commercialization in the Territory and (as set out in more detail in the China Agreement) China;

(ii)regularly report to the JSC regarding the Commercialization of the Products, and discuss, prepare and submit for approval to the JSC the U.S. Commercialization Plan for each Product in the U.S., including any amendments thereto;

(iii)review and approve each commercialization plan for the RoW prepared by AstraZeneca;

(iv)oversee implementation of each U.S. Commercialization Plan;

(v)coordinate the Commercialization activities of FibroGen and AstraZeneca with respect to Products, including pre-launch and post-launch activities;

(vi)allocate primary responsibility as between the Parties for tasks relating to Commercialization of Products in the U.S.;

(vii)determine the amount of Product to be distributed free of charge annually for regulatory or marketing purposes or investigator-initiated trials (it being understood and agreed that neither Party shall have the right to distribute the Product as samples except pursuant to Section 5.7);

(viii)oversee global harmonization of the Product;

(ix)be responsible for publication matters as described in Section 2.3(b)(xvi) upon transition of such responsibility from the JDC to the JCC; and

(x)perform such other functions as appropriate to further the purposes of this Agreement, as directed by the JSC.

(c)Meetings.  Following its inception, the JCC shall meet at least one (1) time per Calendar Quarter, spaced at regular intervals unless the Parties mutually agree in writing to a different frequency.  Either Party may also call a special meeting of the JCC (by videoconference or teleconference) by at least ten (10) Business Days prior written notice to the other Party in the event such Party reasonably believes that a significant matter must be addressed prior to the next scheduled meeting, and such Party shall provide the JCC no later than ten (10) Business Days prior to the special meeting with materials reasonably adequate to enable an informed decision; provided, however, that where a special meeting is called for on shorter notice with regard to a matter that does not admit delay, such notice and such materials shall be provided as early as

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possible in advance of such meeting.  No later than ten (10) Business Days (or such shorter period as may be necessary in the event of a special meeting called for on shorter notice in accordance with the foregoing) prior to any meeting of the JCC, the secretariats shall jointly prepare and circulate an agenda for such meeting; provided, however, that either Party shall be free to propose additional topics to be included on such agenda, either prior to or, subject to the consent of the other Party, in the course of such meeting.  The JCC may meet in person, by videoconference, or by teleconference.  In-person JCC meetings will be held at locations alternately selected and hosted by FibroGen and by AstraZeneca.  Meetings of the JCC shall be effective only if at least one (1) representative of each Party is present or participating in such meeting.  Each Party shall report to the JCC on all material issues relating to the Commercialization of Products promptly after such issues arise.  The host Party shall be responsible for the costs and expenses of the JCC meeting hosted, provided that each Party will bear the expense of its respective JCC members’ and other attendees’ participation in JCC meetings, including travel costs.  The secretariat of the host Party will be responsible for preparing reasonably detailed written minutes of JCC meetings that reflect all decisions made at such meetings.  The secretariat of the host Party shall send meeting minutes to the other Party’s secretariat, and each secretariat shall seek and obtain review and approval of such minutes from its respective Party’s members of the JCC within ten (10) Business Days after each JCC meeting.  Minutes will be deemed approved unless one or more members of the JCC objects to the accuracy of such minutes within ten (10) Business Days of receipt.

(d)Decision-Making. The JCC shall act by consensus.  The representatives from each Party will have, collectively, one (1) vote on behalf of that Party.  If the JCC cannot reach consensus on an issue that comes before the JCC and over which the JCC has oversight, then the Parties shall refer such matter to the JSC for resolution  in accordance with Sections 2.2(e) and 2.6.

2.5Coordination with Astellas.  FibroGen shall designate one of AstraZeneca’s JSC representatives (as selected by AstraZeneca) to serve as a member of the steering committee under the Astellas Collaboration, who (except as described in the next sentence) shall be entitled to participate in the decision-making of such committee pursuant to the Astellas EU Agreement.  The designated representative will be permitted to attend meetings of such committee; provided that such representative shall not have the right to attend portions of (or participate in decision-making with respect to) any such meeting that are not relevant to the Development or Commercialization of Products in the Territory or in China.

2.6Resolution of Committee Disputes.

(a)Within Operating Committees.  All decisions within any Committee other than the JSC shall be made by consensus, and if a dispute arises which cannot be resolved within such Committee, then the representatives of either Party may cause such matter to be referred to the JSC for resolution as provided in Section 2.2(e).

(b)Within The JSC. All decisions within the JSC (whether originating there, or referred to it by an operating Committee) shall be made by consensus.  If a matter is referred by an operating Committee to the JSC, it shall use good faith efforts, in compliance with Section 2.6(d), to resolve promptly such matter.  If the JSC is unable to reach consensus on any issue for which it is responsible, within ten (10) Business Days after a Party affirmatively states that a

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decision needs to be made, either Party may elect to submit such issue to the Parties’ Executive Officers in accordance with Section 2.6(c).

(c)Referral to Executive Officers.  If a Party makes an election under Section 2.6(b) to refer a matter to the Executive Officers, the JSC shall submit in writing the respective positions of the Parties to their respective Executive Officers.  Such Executive Officers shall use good faith efforts, in compliance with Section 2.6(d), to resolve promptly such matter, which good faith efforts shall include at least one meeting (in-person, by telephone, video conference or other appropriate means) between such Executive Officers within twenty (20) Business Days after the JSC’s submission of such matter to them.  If the Executive Officers are unable to reach consensus on any such matter within such twenty (20) Business Day period, then either Party may invoke the dispute resolution provisions of Article 14; provided, however, that:

(i)FibroGen’s Executive Officer shall have the final say with respect to:   [ * ]

(1)[ * ];

(ii)AstraZeneca’s Executive Officer shall have the final say with respect to:

(1)[ * ].

(d)Good Faith.  In conducting themselves on Committees, and in exercising their rights under this Section 2.6, all representatives of both Parties shall consider diligently, reasonably and in good faith all input received from the other Party, and shall use reasonable efforts to reach consensus on all matters before them.  In exercising any decision making authority granted to it under this Article 2, each Party shall act based on its good faith judgment of what is in the best interests of the Products and the Collaboration.

2.7Alliance Managers.  Each Party shall, within thirty (30) days following the Effective Date, appoint a single person who shall oversee contact between the Parties for all subject matter related to the Collaboration between meetings of the JSC, JPT, JDC and JCC, and shall have such other responsibilities as the Parties may agree in writing after the Effective Date (such person, the “Alliance Manager”). Each Party may replace its Alliance Manager at any time by notice in writing to the other Party.  The Alliance Managers shall work together to manage and facilitate the Collaboration governance meetings and the communication between the Parties under this Agreement, including the resolution (in accordance with the terms of this Agreement) of issues between the Parties that arise in connection with this Agreement.  The Alliance Managers shall not have final decision-making authority with respect to any matter under this Agreement.

2.8General Committee Authority.  Each Committee shall have solely the powers expressly assigned to it in this Article 2 and elsewhere in this Agreement.  No Committee shall have any power to amend, modify, or waive compliance with this Agreement (or any agreement entered into in connection with this Agreement).  It is expressly understood and agreed that the control of decision-making authority by FibroGen or AstraZeneca, as applicable, pursuant to

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Section 2.6, so as to resolve a disagreement or deadlock on a Committee for any matter will not authorize either Party to perform any function not delegated to a Committee, and that neither FibroGen nor AstraZeneca shall have any right to unilaterally modify or amend, or waive its own compliance with, the terms of this Agreement.

2.9Joint Project Team.  The Parties hereby establish a joint project team (the “Joint Project Team” or “JPT”) to develop and propose plans to governing committees, manage operational activities and serve as an information resource for the Committees.  The members of the JPT representing core functions relevant to the joint development and commercialization of Products (the “Core Joint Project Team” or “Core JPT”) shall provide oversight to the overall JPT.    Until such time as when the JDC and the JCC have been formed, the Core JPT shall have the additional responsibilities set out in Schedule G(a) and G(b), respectively. Neither the JPT nor the Core JPT will have any decision-making authority, except as set out in Schedule G(a) or G(b) or otherwise explicitly authorized by an appropriate Committee. The Parties agree to establish a JPT Charter on or prior to October 31, 2014, which contains the composition and responsibilities of the JPT and the Core JPT. Subject to the JPT Charter, the Core JPT will consist of project leaders as appointed by FibroGen and by AstraZeneca, and such additional members as the Parties deem appropriate from time to time. Each Party will appoint appropriately qualified and authorized representatives for each applicable operational area or function.  The JPT members will serve as the point of contact for operational matters between the Parties.  The JPT may form subteams to support the efforts of the JPT as agreed by the Parties.  As appropriate, FibroGen may arrange, on its own initiative or at AstraZeneca’s reasonable request from time to time, a joint meeting between the JPT and the project team under the Astellas Collaboration.

2.10Executive Meetings.  FibroGen’s Chief Executive Officer and an appropriate Executive Vice President of AstraZeneca (or other appropriate representative of AstraZeneca of equivalent seniority) will meet in advance of the occurrence of key scheduled Development and Commercialization events or in connection with key decisions, to review and discuss the status and direction of the Collaboration.

2.11Discontinuation of Participation on a Committee.  Each Committee shall continue to exist until the first to occur of (a) the Parties mutually agreeing to disband the Committee, or (b) FibroGen providing to AstraZeneca written notice of its intention to disband and no longer participate in such Committee, which FibroGen retains the right to do at any time during the Term, in its sole discretion, provided, however, that doing so shall not relieve FibroGen of any of its obligations under this Agreement or the China Agreement (save from the obligation to participate at the relevant Committee meetings).  Once FibroGen has provided written notice as referred to in subsection (b) above, such Committee shall have no further obligations under this Agreement and AstraZeneca shall have the right to solely decide, without consultation, any matters previously before such Committee, subject to the other terms of this Agreement.

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ARTICLE 3

Development

3.1Overview.  The Parties agree to undertake a joint development program to further Develop the Collaboration Compounds and Products as provided in this Article 3 under the direction of the JDC (or, the JSC prior to the inception of the JDC),  and pursuant to the Development Plan (such program, the “Development Program”).  Prior to the JDC’s inception, all references to the JDC in this Article 3 and elsewhere in this Agreement will be deemed references to the JSC (which may delegate certain responsibilities to the Core JPT in accordance with Schedule G(a)).

3.2Development Plans.

(a)General.  All Development of any given Product pursuant to this Agreement for the U.S. and RoW shall be conducted pursuant to a development plan (the “Development Plan”) that describes (i) the proposed overall program of Development for the applicable Product and indications in the U.S. and RoW, including Clinical Trials and Nonclinical Studies, toxicology, formulation, packaging development, process and analytical development, production of registration and validation batches, regulatory plans and other elements of obtaining Regulatory Approval(s) in each applicable country; (ii) the anticipated start dates and data availability dates of such Clinical Trials, Nonclinical Studies and CMC development activities, and timelines for key Regulatory Authority meetings, filing of applications for Regulatory Approval, and the receipt of Regulatory Approvals and (iii) the respective roles and responsibilities of each Party in connection with such activities.  The Development Plan will be associated with a detailed budget for all such activities conducted by the Parties for the U.S.  In the event of any inconsistency between the Development Plan and this Agreement, the terms of this Agreement shall prevail.

(b)Initial Development Plan.  The initial Development Plan, along with the associated Development Budget, describing (among other things) the planned development of the Product for the CKD Indications for the U.S., is attached hereto as Exhibit H (the “Initial Development Plan”).  The Initial Development Plan includes and shall be integrated with those Phase 3 Clinical Trials that are currently being conducted by FibroGen or Astellas under the U.S. and EU plan for conducting Phase 3 Clinical Trials of the Product for the CKD Indications under the Astellas EU Agreement (the “Transatlantic Clinical Development Plan” or the “TCDP”). FibroGen shall notify AstraZeneca, via the JDC, of all material updates and material changes to the TCDP. The Initial Development Plan shall further outline such additional Phase 3 Clinical Trials as the Parties have agreed to conduct (i.e. in addition to those being conducted under the TCDP). Within thirty (30) days after the Effective Date, the JPT will initiate implementation of the Initial Development Plan.  

(c)Development Strategy.  Within one (1) year after the Effective Date or at such other time as the Parties may mutually agree, the JDC will prepare for the JSC’s review and approval an overall development strategy for the Product in the Field in the Territory, including

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the CKD Indications for the RoW and any other indications (or other life cycle management) the Parties are considering to develop (or conduct) throughout the Territory, which strategy will include anticipated dates (estimated based on the date of completion of certain development events) for preparing detailed descriptions of applicable events for inclusion in an amended Development Plan (the “Development Strategy”).  The Development Strategy will include reasonable timeframes for any additional indications (i.e., in addition to the CKD Indications) to be developed hereunder, with the understanding that not all such indications will be developed concurrently.

(d)Amendments to the Development Plan.

(i)On an annual basis (no later than October 31st of the preceding Calendar Year), or more often as the Parties deem appropriate, the JDC shall prepare amendments to the then-current Development Plan and Development Budget for approval of the JSC.  Each such amended Development Plan shall specify, with a reasonable level of detail, the items described in Section 3.2(a).  Such amended Development Plan shall cover the next Calendar Year (and additional periods as reasonably determined by the Parties) and shall contain a corresponding budget for U.S. activities.  Such updated and amended Development Plan shall reflect any changes, re-prioritization of studies within, reallocation of resources with respect to, or additions to the then-current Development Plan.  In addition, the JDC may prepare amendments for approval of the JSC to the Development Plan and corresponding Development Budget from time to time during the Calendar Year in order to reflect changes in such plan and budget for such Calendar Year, in each case, in accordance with the foregoing.  At the request of either Party, but no more frequently than quarterly, the JDC shall review the Development Budget and propose any necessary amendments to the JSC for approval.  Once approved by the JSC, the amended annual Development Plan and Development Budget shall become effective for the applicable period on the date approved by the JSC (or such other date as the JSC shall specify).  Any JSC-approved amended Development Plan and Development Budget shall supersede the previous Development Plan and Development Budget for the applicable period.

(ii)Each Party shall notify the other Party promptly upon becoming aware that it is likely to exceed, or has exceeded, the budget for a particular activity for U.S. Development of the Product allocated to such Party in the Development Plan.  Thereafter, the JDC shall promptly meet and determine whether to amend the Development Plan or Development Budget accordingly, provided that the JDC shall not unreasonably withhold its agreement to any budget amendment proposed by either Party that results from causes outside of such Party’s reasonable control or that the Parties agree includes expenses reasonably incurred in the performance of the Development Plan.  Any such amendment proposed by the JDC shall not be subject to the JSC’s review and will be deemed automatically approved by the JSC, unless such amendment would cause the total Development Costs incurred by a Party in any Calendar Year to exceed [ * ] percent [ * ]%) of the budgeted Development Costs for such Party in such Calendar Year, in which event JSC approval will be required; provided that the JSC shall not unreasonably withhold its agreement to any budget amendment proposed by either Party that results from causes outside of such Party’s reasonable control and that the Parties agree includes expenses reasonably incurred in the performance of the Development Plan.

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(e)Development Responsibilities.  Unless the Parties agree in writing upon an alternate allocation of responsibility, the Parties shall have the following rights and obligations with respect to operational responsibilities under each Development Plan:

(i)U.S.  Operational responsibility for all studies designed to support Regulatory Approvals in the U.S. will be shared between the Parties as allocated in the Development Plan; provided that FibroGen and Astellas (it being agreed that as between the Parties FibroGen will be responsible for all such activities conducted by Astellas; provided however, that [ * ] Astellas [ * ] Astellas [ * ] FibroGen [ * ] this Agreement [ * ] FibroGen [ * ] under the Astellas Agreements with respect to such activities) will be responsible for conducting the first Phase 3 Clinical Trials (that are included also in the TCDP) of the Product in the CKD Indications under the Initial Development Plan. For clarity, the term ‘first Phase 3 Clinical Trials’, as used in this section, shall be the studies identified as [ * ] in the Initial Development Plan.

(ii)RoW. AstraZeneca shall be solely responsible for all aspects of the Development of Collaboration Compounds and Products that are solely applicable to the RoW (which, for clarity, does not include China).

(iii)Development Sharing Period.  During the Development Sharing Period, FibroGen shall conduct all Development in good faith, and using Commercially Reasonable Efforts to achieve the then-current timelines in such Development Plan.

(f)Development Decision-Making.  Except as otherwise expressly provided in this Agreement, all matters regarding the Development Plan shall be decided by consensus by the JDC, subject to Section 2.6.

3.3Coordination with Astellas.

(a)AstraZeneca understands and agrees that FibroGen’s and AstraZeneca’s conduct of certain Development and Commercialization activities for North America (meaning the U.S., Mexico and Canada) hereunder are subject to the terms of the Astellas EU Agreement, and that FibroGen’s obligations to Astellas may require additional procedures, consents or adherence to notification obligations.  Accordingly, the Parties shall, as applicable, take into consideration such obligations when formulating the plans for, and coordinate, [ * ], and FibroGen shall use Commercially Reasonable Efforts to obtain [ * ] Development in the Territory under this Agreement.  [ * ]. Notwithstanding anything else in this Agreement to the contrary, however, FibroGen shall not be required to perform (or refrain from performing) any Development activity that would constitute a violation of its obligations under the Astellas Agreements, as disclosed to AstraZeneca prior to the Effective Date.

(b)If, [ * ], FibroGen shall promptly notify AstraZeneca and such matter shall be discussed at a specially convened JSC meeting. In the event that AstraZeneca, pursuant to Section 3.9, both (i) is not obligated to use Commercially Reasonable Efforts to Develop such

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Product in such indication; and (ii) following notification by FibroGen, determines that it does not wish to participate in such Development in such indication, the following shall apply:

(i)FibroGen shall be free to Develop, obtain Regulatory Approval for and Commercialize such Product in such indication throughout the Territory;

(ii)As between the Parties, such Development and Commercialization shall be undertaken at FibroGen’s sole cost;

(iii)FibroGen shall use Commercially Reasonable Efforts to ensure that such Development and Commercialization shall not materially impact AstraZeneca’s rights under this Agreement (it being understood that such Development and Commercialization are not considered per se to materially impact AstraZeneca’s rights under this Agreement);

(iv)The Parties shall, as soon as practicable, discuss in good faith an option arrangement whereby AstraZeneca may obtain rights to such Product in such indication at a future decision point.  The Parties shall negotiate in good faith the terms under which AstraZeneca would obtain such rights, which terms include [ * ] and [ * ]; and

(v)The Parties shall discuss in good faith, appropriate amendments to the provisions of this Agreement to reflect such Development and Commercialization of such Product in such indication by FibroGen, including, without limitation, amendments to the pharmacovigilance provisions in Section 4.3.  If the Parties fail to agree on such terms within a reasonable time period, either Party may refer the matter to the Executive Officers for discussion.

(c)The Parties shall ensure that each amended Development Plan allows for the conduct of such Clinical Trials as are included in the then current TCDP.  If the JDC agrees that additional studies (i.e. in addition to those included in the TCDP) are required for the Product in the CKD Indications for the U.S., then the Parties shall, where required, [ * ].  FibroGen shall use Commercially Reasonable Efforts to [ * ], shall use Commercially Reasonable Efforts to [ * ].  

(d)FibroGen shall use Commercially Reasonable Efforts from time to time during the Term to [ * ] or other rights that AstraZeneca or the Parties reasonably believe [ * ] in order to allow AstraZeneca to obtain the benefit of its rights and licenses pursuant to this Agreement.

3.4Development Costs.

(a)Allocation.  The Parties shall share equally all costs and expenses incurred by or on behalf of either Party to conduct Development of the Product for the U.S. under the Development Plan during the Development Sharing Period, according to the terms of Section 8.2, including for supply of Collaboration Compound or Product in accordance with Article 6, in each case to the extent that such Development Costs are not borne or reimbursed by Astellas under the Astellas EU Agreement, provided that FibroGen will timely inform AstraZeneca of any such costs borne or reimbursed by Astellas.  AstraZeneca shall be responsible for all costs and expenses it incurs in the conduct of activities under the Development Plan for the RoW and shall reimburse

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FibroGen for all costs and expenses FibroGen incurs (including Personnel Costs, the Fully Burdened Cost of Collaboration Compound or Product or comparator drug, concomitant drug, placebo or other materials used in any Clinical Trial or Nonclinical Studies, and all other out-of-pocket costs) for activities conducted by FibroGen (i) for the U.S. after the Development Sharing Period and (ii) for the RoW, in each case (i) and (ii) under the Development Plan within the applicable Development Budget (for the U.S.) or budget (for RoW) (subject to overages described in Section 3.4(b)) and according to the terms of Section 8.2, together with the reimbursement for supply of Collaboration Compound or Product in accordance with Article 6. For clarity, all Clinical Trials set out in the Initial Development Plan shall be deemed to be Development of the Product for the U.S.

(b)Overage.  Notwithstanding the foregoing in Section 3.4(a), unless otherwise agreed by the JDC (subject to JSC approval to the extent set forth in Section 3.2(d)(ii)) or by the Parties, either before or after the applicable expense is incurred (which agreement shall not be unreasonably withheld for any budget overage outside the applicable Party’s reasonable control and reasonably incurred in the performance of the Development Plan), for any Calendar Quarter, each Party will be solely responsible for Development Costs it incurs in excess of [ * ] percent [ * ]%) of the total amount allocated to such Party’s activities in such Calendar Quarter in the Development Budget, and for any Calendar Year, each Party will be solely responsible for Development Costs it incurs in excess of [ * ] percent [ * ]%) of the total amount allocated to such Party’s activities in such Calendar Year in the Development Budget, provided that Development Costs incurred in excess of [ * ]% for the Calendar Quarter or [ * ]% for the Calendar Year, as applicable, of the amounts so budgeted shall also be reimbursed if the Parties determine in good faith that such Development Costs were reasonably incurred in the performance activities under the Development Plan and that such budget overage was caused by circumstances outside of such Party’s reasonable control.

3.5Indications Outside the Field.

(a)Inclusion.  If either Party desires to develop a particular Product for an indication outside the Field, it may propose such indication to the other Party in writing by providing the other Party with a high-level proposed development plan for such Product in such indication.  Upon the other Party’s request within sixty (60) days after receipt of such development plan, the Parties shall meet to discuss such proposed indication and shall work together in good faith to generate and gather the necessary information to support such potential development and to prepare a detailed development plan.  If the Parties agree on such plan, AstraZeneca shall have the right to include the proposed indication in the Field, solely with respect to the applicable Product, by written notice to FibroGen.  If AstraZeneca exercises such right, such indication will be a “Designated Indication”, the Field will automatically be expanded to include the Designated Indication (without payment of any additional upfront fees, milestones or other consideration except those payments already provided for under this Agreement), the terms of this Agreement (including payment terms and diligence obligation) will apply to such indication and the JDC shall promptly prepare a development plan for such indication for review and approval by the JSC.

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(b)Termination.  The Field will automatically be amended to remove any Designated Indication upon the occurrence of any of the following events: (a) the permanent cessation (excluding, for example, suspension, termination or completion pending further review, consideration or development planning) of all Clinical Trials by both Parties with respect to such Product for such Designated Indication prior to Regulatory Approval in any country in the Territory in such Designated Indication, (b) the termination of all Regulatory Approvals for such Designated Indication in the Territory without either Party intending or considering to restore or replace any such Regulatory Approval, or (c) the decision of the JSC to permanently cease all Commercialization of such Product in such Designated Indication.

(c)Restriction.  For clarity, Designated Indications are only those indications outside the Field that AstraZeneca agrees to include in this Agreement.  Except for Designated Indications pursuant to this Agreement, FibroGen shall not Develop or Commercialize (directly or indirectly, by license, supply of Product or otherwise) any Product for any indication outside the Field in the Territory during the term of this Agreement.

3.6Additional Compounds.

(a)Added by FibroGen.  At any time during the Term, FibroGen may upon written notice to AstraZeneca include any HIF Compound in the definition of Collaboration Compound (and Product).  Effective upon such written notice, the identified HIF Compound shall be deemed a Collaboration Compound, provided that AstraZeneca shall not have any obligations with respect to such Collaboration Compound (or Product) under this Agreement unless and until AstraZeneca’s acceptance thereof through written notice to FibroGen.

(b)Added by Agreement.

(i)If AstraZeneca wishes to include additional HIF Compounds as Collaboration Compounds (and Products), it may make such a request to FibroGen.  Upon receipt of such request, FibroGen shall make good faith and diligent efforts to present to the JSC for review all reasonably relevant data and other information (excluding chemical structures) Controlled by FibroGen that is related to those HIF Compounds that it reasonably believes offer substantial clinical benefit over then-current Collaboration Compounds from its library of HIF Compounds, including results from any Phase 2 Clinical Trial conducted in the Field.  For clarity, the foregoing does not impose any obligation on FibroGen to identify or generate any additional HIF Compounds.

(ii)If AstraZeneca and FibroGen, through the JDC and JSC, agree upon a development program for any such HIF Compounds, then the Parties shall negotiate in good faith to agree on any additional consideration to be payable by AstraZeneca to FibroGen for inclusion of such additional HIF Compounds as Collaboration Compounds, and upon agreement, will amend this Agreement accordingly.

(c)Subject to Section 3.3 and to FibroGen’s obligations under the Astellas EU Agreement, FibroGen will use good faith in designating additional HIF Compounds as

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