Delaware | 2835 | 38-3944751 |
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification Number) |
Copies to: | ||
Brent D. Fassett Matthew P. Dubofsky Cooley LLP 380 Interlocken Crescent, Suite 900 Broomfield, CO 80021 (720) 566-4000 | Ben Carver General Counsel ArcherDX, Inc. 2477 55th Street, Suite 202 Boulder, CO 80301 (877) 771-1093 | Deanna Kirkpatrick Marcel R. Fausten Davis Polk & Wardwell LLP 450 Lexington Avenue New York, NY 10017 (212) 450-4000 |
Large accelerated filer | ☐ | Accelerated filer | ☐ |
Non-accelerated filer | ☒ | Smaller reporting company | ☐ |
Emerging growth company | ☒ |
Title of each Class of Securities to be Registered | Proposed Maximum Aggregate Offering Price(1)(2) | Amount of Registration Fee |
Common stock, par value $0.01 per share | $ | $ |
(1) | In accordance with Rule 457(o) under the Securities Act of 1933, as amended, the number of shares being registered and the proposed maximum offering price per share are not included in this table. |
(2) | Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) of the Securities Act of 1933, as amended |
Per Share | Total | ||
Initial public offering price | $ | $ | |
Underwriting discount(1) | $ | $ | |
Proceeds, before expenses, to us | $ | $ | |
(1) | See the section titled “Underwriting” for additional information regarding compensation payable to the underwriters. |
J.P. Morgan | BofA Securities |
Stifel | Evercore ISI |
Page | |
• | Accuracy: Although current tests can accurately detect common or simple mutations, most cannot accurately detect complex mutations, resulting in a high rate of false negatives and positives. These tests are designed with inherent biases which fundamentally limit their ability to detect both known and unknown alterations. We believe our purpose built AMP chemistry addresses these shortcomings by accurately detecting complex, as well as known and unknown, mutations. This allows us to provide actionable information to clinicians, enabling them to select therapies targeted to the appropriate mutation, and thereby better informing treatment. |
• | Utility: Current tests generally take a “one-size-fits-all” approach, which limits their utility. Because our products are not limited to blood and tissue, they enable testing across a multitude of sample types, targeting DNA, RNA, and ctDNA in order to provide higher resolution and a more comprehensive view of mutations. Our product development platform enables rapid and efficient customization of biomarker targets, which means clinicians can specify which of our products they want to use to identify mutations that they believe are important in treating each patient’s disease. Together, we believe these features open additional areas of clinical application within therapy optimization for individual patients and cancer monitoring of early-stage cancer. |
• | Turnaround time: Results from centralized genomic tests can take well over 20 days to be returned, depending on complexity and sample type. As late-stage cancer patients are likely to experience superior survival rates and outcomes when treated as soon as possible after diagnosis, lengthy turnaround times can prevent timely treatment. Our products enable local testing with potential times to run the test in a matter of days, accelerating time to results while also allowing the original clinician to maintain sample custody. The reduction in time to actionable results accelerates clinical decisions, which is critical for cancer patients where immediate treatment is important to achieve optimal outcomes. |
• | Economics: The complexity of many genomic testing options requires significant resources and sophisticated infrastructure, which are typically limited to specialized academic or centralized facilities. As a result, hospitals often need to outsource their genomic testing, which incurs costs that are not reimbursed, presenting an additional hurdle to adoption. This particularly affects community and regional hospitals where approximately 85% of cancer patients are treated. Centralized labs that perform genomic testing receive the benefits of reimbursement and often retain possession of patients’ tumor biopsies and control patient data. We believe our platform will empower more hospitals and clinics to practice precision oncology and receive reimbursement for in-house testing that they would otherwise not receive if they send the testing out to centralized labs. In addition, clinicians can retain possession of patients’ tumor biopsies and control the data, which can be matched with clinical data to generate revenue from collaborators, such as biopharmaceutical companies. We believe this empowers providers in all patient care settings to participate in the economics of precision oncology testing. |
• | Our product development platform, featuring our proprietary AMP chemistry, provides accurate, actionable genomic information allowing clinicians to optimize treatment and monitor cancer. Our products allow for the identification of both simple and complex genomic mutations, providing clinicians with more actionable information to improve care. |
• | Our versatile product portfolio empowers clinicians to practice precision oncology by providing products and services that are personal and actionable. We provide a versatile product portfolio which allows clinicians to select a test based on the clinically relevant sample type, analyte, cancer type and biomarker targets. |
• | Our easy-to-use, clinical-grade reagents allow our AMP technology to be deployed at the site of care near the patient. Our easy-to-use reagents enable our decentralized model, permitting any testing center or hospital with a compatible sequencer to run our assay near its patients, improving turnaround time. We believe enabling local genomic testing helps reduce significant upfront costs, adds flexibility of scale, and will bring precision oncology to all patients, anywhere. |
• | Our product development platform can be adapted as new applications emerge. Our AMP chemistry enables customization of biomarker targets which can be pooled in billions of possible combinations while maintaining accuracy and precision. Our custom and fixed content panels follow the same manufacturing processes, varying only in the targeting mechanism, which enables us to easily adapt our products as our customers request new applications. |
• | We believe we provide a compelling and differentiated value proposition to all stakeholders. We believe our platform empowers more hospitals and clinics to practice precision oncology and receive reimbursement for in-house testing. In addition, clinicians can retain possession of patients’ tumor biopsies and control the data, which they can match with clinical data to generate revenue from collaborative partners, such as biopharmaceutical companies. Most importantly, faster turnaround time can inform clinical decision making in a timelier manner, which is critical for cancer patients where immediate treatment is important to achieve optimal outcomes. |
• | Our multi-faceted commercial capabilities and our regulatory and reimbursement expertise support our ability to bring our products to market globally. Along with our direct sales team, we leverage our medical sales liaisons, distributors, and the sales organizations of our reference lab and biopharmaceutical collaborators to further drive adoption. |
• | We have intellectual property protection for our proprietary AMP chemistry and technology platform and its applications. Our patent portfolio includes 3 issued patents and 16 pending patent applications in the United States and 2 issued patents and 44 pending patent applications in foreign countries related to our AMP chemistry and technology platform and its applications . |
• | Democratize precision oncology. We offer a suite of products and services that are personal, actionable and easy to use in local settings to advance the treatment of cancer and monitoring of patients by providing our turnkey solution to clinicians. |
• | Pursue regulatory clearances and approvals for our products across the cancer care continuum. We submitted our first companion diagnostic to the Japanese PMDA in December 2019 and obtained approval in March 2020. We plan to submit STRATAFIDE to the FDA in the next 12 months and PCM to the FDA in the following years. |
• | Enable new clinical applications with PCM. PCM is capable of high specificity with a low limit of detection, which allows for post-treatment monitoring of early-stage cancer in a cost- and time-efficient manner. PCM also enables the measurement of cancer progression and therapy effectiveness to refine or select a treatment regimen, and can bring precision oncology to earlier stages of cancer. |
• | Embed our products and services with biopharmaceutical collaborators. We plan to continue to promote our products and services to create broader and deeper collaborations with current and new biopharmaceutical customers. |
• | Expand our global footprint. We are continuing to establish the infrastructure needed to deploy our turnkey solution globally and promote broader adoption. We will continue discussions with global regulatory and reimbursement agencies to obtain country-specific approvals. |
• | Leverage our product development platform to identify and advance innovative products. We have established research and development capabilities that allow us to leverage innovations and operational efficiencies from one product across our platform. |
• | We have incurred losses since our inception and we anticipate that we will continue to incur losses for the foreseeable future, which could harm our future business prospects. |
• | We may not be able to obtain regulatory clearance or approval of our IVD products, or even if approved, such products may not be approved for guideline inclusion, which could adversely affect our business, financial condition and results of operations. |
• | To date, our revenues have been primarily generated by sales of our RUO products, but our future business growth is partially dependent upon regulatory approval and market acceptance of our IVD products, including STRATAFIDE and PCM. We have limited experience in developing, marketing and commercializing IVDs. |
• | A large portion of our revenue is generated from a limited number of customers, and the loss of one or more of our customers or the failure to retain a significant amount of business from them could adversely affect our business, financial condition, and results of operations. |
• | Our quarterly results may fluctuate significantly, which could adversely impact the value of our common stock. |
• | One of our competitors has alleged that our AMP chemistry and products using AMP are infringing on its intellectual property, and we may be required to redesign our technology, obtain a license, cease using our AMP chemistry altogether and/or pay significant damages, among other consequences, any of which would have a material adverse effect on our business, financial condition and results of operations. |
• | We intend to seek to market our IVD products for clinical diagnostic use and will be required to obtain regulatory clearance(s) or approval(s). Any such regulatory process would be expensive, time-consuming and uncertain both in timing and in outcome. |
• | Our commercial success could be compromised if we do not receive coverage and adequate reimbursement for our products, including STRATAFIDE and PCM, if approved. |
• | We are currently, and may be in the future, subject to claims against us alleging that we are infringing, misappropriating or otherwise violating the intellectual property rights of third parties, the outcome of which could have a material adverse effect on our business. |
• | We are currently, and may be in the future, involved in lawsuits to defend or enforce our patents and proprietary rights. Such disputes could result in substantial costs or loss of productivity, delay or prevent the development and commercialization of our technology, products and services, prohibit our use of proprietary technology or sale of nucleic acid preparative and analytical methods and related products or services, or put our patents and other proprietary rights at risk. |
• | If we are not able to obtain, maintain, defend or enforce patent and other intellectual property protection for our nucleic acid preparative and analytical methods or related products or services, or if the scope of the patent and other intellectual property protection obtained is not sufficiently broad, our competitors could develop and commercialize products, services and technology similar or identical to ours, which could have a material adverse effect on our competitive position, business, financial conditions, results of operations, and prospects. |
• | We license patent rights from third-party owners. If such owners do not properly or successfully obtain, maintain or enforce the patents underlying such licenses, or if they retain or license to others any competing rights, our competitive position and business prospects may be adversely affected. If we fail to comply with our obligations in the agreements under which we license intellectual property rights from third parties or otherwise experience disruptions to our relationships with our licensors, we could lose license rights that are important to our business. |
• | We have determined that there is substantial doubt about our ability to continue as a “going concern” for the next twelve months. |
Common stock offered by us | shares |
Common stock to be outstanding after this offering | shares |
Underwriters’ option to purchase additional shares of common stock offered by us | shares |
Use of proceeds | We estimate that the net proceeds from the sale of our common stock in this offering will be approximately $ million (or approximately $ million if the underwriters’ option to purchase additional shares of our common stock from us is exercised in full), assuming an initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. |
The principal purposes of this offering are to increase our capitalization and financial flexibility, create a public market for our common stock and facilitate our future access to the capital markets. As of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to us from this offering. We currently expect to use the net proceeds from this offering for research and development activities, including development of STRATAFIDE and PCM, and for working capital and general corporate purposes, including sales and marketing activities, operating expenses and capital expenditures. We may also use a portion of the remaining net proceeds, if any, to acquire or invest in complementary businesses, technologies or other assets. However, we do not have any agreements or commitments to enter into any such acquisitions or investments at this time. See the section titled “Use of Proceeds” for additional information. | |
Risk factors | You should carefully read the “Risk factors” beginning on page 13 and other information included in this prospectus for a discussion of facts that you should consider before deciding to invest in shares of our common stock. |
Proposed Nasdaq trading symbol | “RCHR” |
• | 5,418,687 shares of common stock issuable on the exercise of stock options outstanding as of March 31, 2020 under the 2015 Stock Incentive Plan, or the 2015 Plan, with a weighted-average exercise price of approximately $2.17 per share; |
• | up to an aggregate of 800,000 shares of common stock which may be issued in connection with the acquisition of Baby Genes, Inc., or Baby Genes, pursuant to certain contingent consideration |
• | shares of common stock reserved for future issuance under our 2020 Equity Incentive Plan, or the 2020 Plan, as well as any future increases, including annual automatic evergreen increases, in the number of shares of common stock reserved for issuance under our 2020 Plan; and |
• | shares of common stock reserved for issuance under our 2020 Employee Stock Purchase Plan, or the ESPP, as well as any future increases, including annual automatic evergreen increases, in the number of shares of common stock reserved for future issuance under our ESPP. |
• | the issuance of shares of our Series B convertible preferred stock, or the Series B Preferred Stock, upon the automatic net exercise of a warrant to purchase shares of Series B Preferred Stock with an exercise price of $4.82 per share (such warrant outstanding as of December 31, 2019), or the Series B Warrant, in connection with this offering, based on an assumed offering price of , which is the midpoint of the estimated price range set forth on the cover page of this prospectus; |
• | the issuance of 389,749 shares of Series A Preferred Stock pursuant to the Baby Genes Merger Agreement; |
• | the automatic conversion of all outstanding shares of our Series A Preferred Stock, Series B Preferred Stock, and our Series C convertible preferred stock, or the Series C Preferred Stock, or collectively, the preferred stock, including shares issued as a result of the automatic net exercise of the Series B Warrant and the Series A Preferred Stock issuable pursuant to the Baby Genes Merger Agreement as described above, into an aggregate shares of common stock in connection with this offering; |
• | the filing of our amended and restated certificate of incorporation, which will be in effect on the completion of this offering; |
• | no exercise of the underwriters’ option to purchase up to an additional shares of common stock from us in this offering. |
Year Ended December 31, | Three Months Ended March 31, | ||||||||||||||
2018 | 2019 | 2019 | 2020 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Consolidated Statements of Operations Data: | |||||||||||||||
Revenue | |||||||||||||||
Precision oncology products | $ | 16,025 | $ | 22,644 | $ | 4,380 | $ | 7,006 | |||||||
Pharma development services | 12,429 | 27,921 | 5,069 | 7,784 | |||||||||||
Total revenue | 28,454 | 50,565 | 9,449 | 14,790 | |||||||||||
Costs & operating expenses | |||||||||||||||
Cost of precision oncology products | 4,033 | 7,335 | 1,068 | 2,313 | |||||||||||
Cost of pharma development services | 6,230 | 9,212 | 1,706 | 3,399 | |||||||||||
Sales and marketing | 7,215 | 15,428 | 2,644 | 5,324 | |||||||||||
Research and development | 8,184 | 34,172 | 4,295 | 13,737 | |||||||||||
General and administrative | 7,700 | 15,875 | 2,377 | 7,481 | |||||||||||
Contingent consideration | — | 5,768 | 2,716 | (35 | ) | ||||||||||
Total operating expenses | 33,362 | 87,790 | 14,806 | 32,219 | |||||||||||
Loss from operations | (4,908 | ) | (37,225 | ) | (5,357 | ) | (17,429 | ) | |||||||
Interest expense, net | (1,160 | ) | (2,432 | ) | — | (893 | ) | ||||||||
Other income (expense), net | 34 | (824 | ) | (8 | ) | (995 | ) | ||||||||
Loss before income taxes | (6,034 | ) | (40,481 | ) | (5,365 | ) | (19,317 | ) | |||||||
Income tax (benefit) expense | (481 | ) | 497 | 1 | — | ||||||||||
Net loss and comprehensive loss | $ | (5,553 | ) | $ | (40,978 | ) | $ | (5,366 | ) | $ | (19,317 | ) | |||
March 31, 2020 | |||||||
Actual | Pro Forma(2) | Pro Forma As Adjusted(3) | |||||
(in thousands) | |||||||
Consolidated Balance Sheet Data: | |||||||
Cash and cash equivalents | $ | 36,842 | |||||
Total assets | 97,503 | ||||||
Total current assets | 66,282 | ||||||
Total current liabilities | 31,132 | ||||||
Working capital(1) | 35,150 | ||||||
Long-term debt, net | 28,659 | ||||||
Convertible preferred stock | 115,347 | ||||||
Accumulated deficit | (88,560 | ) | |||||
Total stockholders’ (deficit) equity | (84,121 | ) | |||||
(1) | Working capital is defined as current assets less current liabilities. |
(2) | The pro forma consolidated balance sheet data gives effect to (a) the issuance of 389,749 shares of Series A Preferred Stock pursuant to the Baby Genes Merger Agreement, (b) the issuance of shares of our Series B Preferred Stock issuable upon the automatic net exercise of the Series B Warrant in connection with this offering , assuming an initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, (c) the automatic conversion of all of our outstanding shares of preferred stock (including the shares issuable pursuant to the Baby Genes Merger Agreement described in (a) and pursuant to the automatic net exercise of the Series B Warrant described in (b) above) into shares of common stock in connection with this offering, (d) the automatic conversion of contingent consideration for the Baby Genes Acquisition from Series A Preferred Stock to up to 800,000 shares of our common stock and the resulting reclassification of the remaining liability to additional paid-in capital, and (e) the filing and effectiveness of our amended and restated certificate of incorporation which will be in effect on the completion of this offering. |
(3) | The pro forma as adjusted consolidated balance sheet data reflects (a) the items described in footnote (2) above and (b) our receipt of estimated net proceeds from the sale of shares of common stock that we are offering at an assumed initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. |
• | we could experience difficulty in integrating businesses, services, personnel, operations, and financial and other controls and systems, and retaining key employees; |
• | we may assume by acquisition, joint venture, or strategic relationship unknown liabilities, known contingent liabilities that become realized, or known liabilities that prove greater than anticipated; |
• | we may have difficulty retaining the customers or employees of any acquired business; |
• | we may incur debt, contingent liabilities, or future write-offs of intangible assets or goodwill, any of which could have a material adverse effect on our financial condition, results of operations, and cash flows; |
• | we may enter a new market or business line in which we have no prior experience and may not successfully compete in that market or business line; |
• | integration of an acquired company may disrupt ongoing operations and require management resources that we would otherwise focus on developing our existing business, and as a result, we cannot be assured that the anticipated benefits of any acquisition, technology license, strategic alliance, or joint venture would be realized; and |
• | we may have interests that diverge from those of our joint venture partners or other strategic partners and we may not be able to direct the management and operations of the joint venture or other strategic relationship in the manner we believe is most appropriate, thereby exposing us to additional risk. |
• | multiple, conflicting and changing laws and regulations such as privacy security and data use regulations, tax laws, export and import restrictions, economic sanctions and embargoes, employment laws, anti-corruption laws, regulatory requirements, reimbursement or payor regimes and other governmental approvals, permits and licenses; |
• | failure by us or our distributors to obtain regulatory clearance, authorization or approval for the use of our products and services in various countries; |
• | additional potentially relevant third-party patent rights; |
• | complexities and difficulties in obtaining intellectual property protection and maintaining, defending and enforcing our intellectual property; |
• | difficulties in staffing and managing foreign operations; |
• | employment risks related to hiring employees outside the United States; |
• | complexities associated with managing multiple payor reimbursement regimes, government payors or patient self-pay systems; |
• | difficulties in negotiating favorable reimbursement negotiations with governmental authorities; |
• | logistics and regulations associated with shipping samples, including infrastructure conditions and transportation delays; |
• | limits in our ability to penetrate international markets if we are not able to sell our products or conduct our testing or clinical diagnostic services locally; |
• | financial risks, such as longer payment cycles, difficulty collecting accounts receivable, the impact of local and regional financial crises on demand and payment for our products and services and exposure to foreign currency exchange rate fluctuations; |
• | natural disasters, political and economic instability, including wars, terrorism and political unrest, outbreak of disease, boycotts, curtailment of trade and other business restrictions; |
• | regulatory and compliance risks that relate to maintaining accurate information and control over sales and distributors’ activities that may fall within the purview of the U.S. Foreign Corrupt Practices Act, or FCPA, its books and records provisions, or its anti-bribery provisions, or laws similar to the FCPA in other jurisdictions in which we may now or in the future operate, such as the United Kingdom’s Bribery Act of 2010, or the U.K. Bribery Act; and |
• | onerous anti-bribery requirements of several member states in the EU, the United Kingdom, Japan, and other countries that are constantly changing and require disclosure of information to which U.S. legal privilege may not extend. |
• | not experimental or investigational; |
• | medically necessary; |
• | appropriate for the specific patient; |
• | cost-effective; |
• | supported by peer-reviewed publications; and |
• | included in clinical practice guidelines. |
• | the federal Anti-Kickback Statute, or the AKS, which prohibits, among other things, persons or entities from soliciting, receiving, offering or providing remuneration, directly or indirectly, overtly or covertly, in cash or in kind, in return for or to induce either the referral of an individual for, or the purchase, lease, order or recommendation of, any good, facility, item or services for which payment may be made under a federal health care program such as the Medicare and Medicaid programs; |
• | the federal physician self-referral prohibition, commonly known as the Stark Law, which prohibits physicians from referring Medicare or Medicaid patients to providers of “designated health services” with whom the physician or a member of the physician’s immediate family has an ownership interest or compensation arrangement, unless a statutory or regulatory exception applies; |
• | HIPAA, which established additional federal civil and criminal liability for, among other things, knowingly and willfully executing a scheme to defraud any health care benefit program or making false statements in connection with the delivery of or payment for health care benefits, items or services; |
• | HIPAA, as amended by HITECH and its implementing regulations, which imposes certain requirements relating to the privacy, security and transmission of individually identifiable health information; |
• | federal false claims and civil monetary penalties laws, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, false or fraudulent claims for payment to the federal government; |
• | the federal Physician Payments Sunshine Act requirements under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, or collectively, the ACA, which require certain manufacturers of drugs, devices, biologics and medical supplies to report to the Centers for Medicare and Medicaid Services, or CMS, information related to payments and other transfers of value made to or at the request of covered recipients, such as physicians, as defined by such law, and teaching hospitals, and certain ownership and investment interests held by physicians and their immediate family members; |
• | the Stark Law, which prohibits, among other things, physicians who have a financial relationship, including an investment, ownership or compensation relationship with an entity, from referring Medicare patients for designated health services, which include clinical laboratory services, unless an exception applies; and |
• | state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws, which may apply to items or services reimbursed by any third-party payor, including commercial insurers. |
• | we or our licensors may not have been the first to invent the technology covered by our pending patent applications or issued patents; |
• | we or our licensors may not be the first to file all patent applications covering our nucleic acid preparative and analytical methods or related products or services, as patent applications in the United States and most other countries are confidential for a period of time after filing; |
• | our methods and related products may not be patentable; |
• | our disclosures in patent applications may not be sufficient to meet the statutory requirements for patentability; |
• | any or all of our pending patent applications may not result in issued patents; |
• | others may independently develop identical, similar or alternative technologies; |
• | others may design around our patent claims to produce competitive technologies or methods or products that fall outside of the scope of our patents; |
• | we may fail to identify patentable aspects of our research and development output before it is too late to obtain patent protection; |
• | we may not seek or obtain patent protection in countries that may eventually provide us a significant business opportunity; |
• | any patents issued to us may not provide a basis for commercially viable methods or products, may not provide any competitive advantages or may be successfully challenged by third parties; |
• | a third party may challenge our patents and, if challenged, a court may not hold that our patents are valid, enforceable and infringed; |
• | a third party may challenge our patents in various patent offices and, if challenged, we may be compelled to limit the scope of our allowed or granted claims or lose the allowed or granted claims altogether; |
• | the patents of others could harm our business; |
• | our competitors could conduct research and development activities in countries where we will not have enforceable patent rights and then use the information learned from such activities to develop competitive methods or products for sale in our major commercial markets; and |
• | the growing scientific and patent literature relating to nucleotide analysis, including our own patents and publications, may make it increasingly difficult or impossible to patent new nucleic acid preparative and analytical methods and related products or services in the future. |
• | the scope of rights, if any, granted under the license agreement and other interpretation-related issues; |
• | the amounts of royalties, milestones or other payments due under the license agreement; |
• | whether and the extent to which our technology and processes infringe, misappropriate or otherwise violate intellectual property of the licensor that is not subject to the license agreement; |
• | our right to sublicense patent and other rights to third parties under collaborative development relationships; |
• | our diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
• | the ownership of inventions and know-how resulting from the creation or use of intellectual property by our licensors and by us and our collaborators; and |
• | the priority of invention of patented technology. |
• | others may be able to make products or provide services that are similar to ours but that are not protected by our intellectual property; |
• | we or our licensors might not have been the first to make the inventions covered by our patents; |
• | we or our licensors might not have been the first to file patent applications covering certain of our or their inventions; |
• | others may independently develop similar or alternative technologies or duplicate any of our technologies without infringing our intellectual property rights; |
• | it is possible that our pending patent applications or those that we may own in the future will not lead to issued patents; |
• | issued patents for which we have rights may be held invalid or unenforceable, including as a result of legal challenges by our competitors; |
• | our competitors might conduct activities in countries where we do not have patent rights and then use the information learned from such activities to develop competitive products and services in our commercial markets; |
• | we may not develop additional proprietary technologies that are patentable; |
• | the patents of others may harm our business; and |
• | we or our licensors may choose not to file a patent in order to maintain certain trade secrets or know-how, and a third party may subsequently file a patent covering such intellectual property. |
• | increase our sales and marketing efforts to facilitate market adoption of our services and address competitive developments; |
• | fund development and marketing efforts of any future services; |
• | further expand our laboratory operations domestically and outside the United States; |
• | expand our technologies into other types of cancers; |
• | acquire, license or invest in technologies, including information technologies; |
• | acquire or invest in complementary businesses or assets; and |
• | finance capital expenditures and general and administrative expenses. |
• | our ability to achieve revenue growth; |
• | our ability to secure domestic and international regulatory approval for our products; |
• | our rate of progress in establishing reimbursement arrangements for our approved products, if any, with domestic and international commercial third-party payors and government payors; |
• | the cost of expanding our laboratory operations and offerings, including our sales and marketing efforts; |
• | our rate of progress in, and cost of the sales and marketing activities associated with, establishing adoption of and reimbursement for our services; |
• | our rate of progress in, and cost of research and development activities associated with, services in research and early development; |
• | the effect of competing technological and market developments; |
• | costs related to international expansion; and |
• | the potential cost of and delays in research and development as a result of any regulatory oversight applicable to our services. |
• | sell, lease, transfer or otherwise dispose of certain assets; |
• | acquire another company or business or enter into a merger or similar transaction with third parties; |
• | incur additional indebtedness; |
• | make investments; |
• | enter into inbound and outbound licenses of intellectual property; |
• | encumber or permit liens on certain assets; and |
• | pay dividends and make other restricted payments with respect to our common stock. |
• | actual or anticipated fluctuations in our financial condition or results of operations; |
• | variance in our financial performance from expectations of securities analysts; |
• | changes in the pricing of our products and services; |
• | changes in our projected operating and financial results; |
• | changes in laws or regulations applicable to our products and services; |
• | the results of our clinical trials; |
• | announcements by us or our competitors of significant business developments, acquisitions, or new offerings; |
• | significant data breaches of our company, providers, vendors or pharmacies; |
• | our involvement in litigation; |
• | future sales of our common stock by us or our stockholders, as well as the anticipation of lock-up releases; |
• | changes in senior management or key personnel; |
• | negative publicity, such as whistleblower complaints or unsupported allegations made by short sellers, about us or our products or services; |
• | the trading volume of our common stock; |
• | changes in investor perceptions of us or our industry; |
• | changes in the anticipated future size and growth rate of our market; |
• | general economic, political, regulatory, industry, and market conditions; and |
• | natural disasters or major catastrophic events. |
• | our expectations regarding our revenue, expenses and other operating results; |
• | the anticipated cost, timing or outcome of any patent litigation or other proceeding relating to our owned patents, licensed patents or patent applications, including our litigation with Natera; |
• | future investments in our business, our anticipated capital expenditures and our estimates regarding our capital requirements, future revenues, expenses, reimbursement rates and needs for additional financing; |
• | the timing or outcome of any of our domestic and international regulatory submissions; |
• | impact from future regulatory, judicial, and legislative changes or developments in the United States and foreign countries; |
• | our ability to acquire new customers and successfully engage new and existing customers; |
• | the costs and success of our marketing efforts, and our ability to promote our brand; |
• | our ability to increase demand for our products and services, obtain favorable coverage and reimbursement determinations from third-party payers and expand geographically; |
• | our expectations of the reliability, accuracy and performance of our products and services, as well as expectations of the benefits to patients, clinicians and providers of our products and services; |
• | our efforts to successfully develop and commercialize our products and services, including our ability to successfully conduct clinical trials; |
• | our ability to successfully develop additional revenue opportunities and expand our product and service offerings, including our recently launched offerings; |
• | our ability to successfully commercialize our products and services through strategic or commercial partnerships, such as our agreements with Illumina and our ability to enter into additional such partnerships in the future; |
• | the scope of protection we establish and maintain for, and developments or disputes concerning, our intellectual property or other proprietary rights, data-privacy and security breaches, as well as the integrity of our information and telecommunications systems; |
• | our ability to attract, and reliance on, collaborators such as medical institutions, contract laboratories, laboratory partners and other third parties; |
• | the performance of our third-party suppliers and manufacturers; |
• | our ability to effectively manage our growth, including our ability to expand our network of specialists, retain and recruit personnel, and maintain our culture; |
• | our ability to compete effectively with existing competitors and new market entrants; |
• | our ability to successfully acquire and integrate other businesses, form joint ventures or make investments in other companies; |
• | the impact on our business of economic or political events or trends; |
• | the size and growth potential of the markets for our products and services, and our ability to serve those markets; and |
• | the rate and degree of market acceptance of our products and services. |
• | research and development activities, including development of STRATAFIDE and PCM, |
• | regulatory submission and commercialization of our first IVD product, STRATAFIDE, and additional follow-on companion diagnostic claims for STRATAFIDE, |
• | commercialization activities relating to STRATAFIDE, and |
• | working capital and general corporate purposes, including sales and marketing activities, operating expenses and capital expenditures. We may also use a portion of the net proceeds, if any, to acquire or invest in complementary businesses, technologies or other assets. However, we do not have any agreements or commitments to enter into any such acquisitions or investments at this time. |
• | on an actual basis; |
• | on a pro forma basis, giving effect to (1) the issuance of 389,749 shares of Series A Preferred Stock pursuant to the Baby Genes Merger Agreement, (2) the issuance of shares of our Series B Preferred Stock issuable upon the automatic net exercise of the warrant to purchase Series B Preferred Stock, or the Series B Warrant, in connection with this offering, assuming an initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus , (3) the automatic conversion of all of our outstanding shares of preferred stock (including the shares issuable pursuant to the Baby Genes Merger Agreement described in (1) above and pursuant to the automatic net exercise of the Series B Warrant described in (2) above) into shares of common stock in connection with this offering, (4) the automatic conversion of contingent consideration for the Baby Genes Acquisition from Series A Preferred Stock to up to 800,000 shares of our common stock and the resulting reclassification of the remaining liability to additional paid-in capital, and (5) the filing and effectiveness of our amended and restated certificate of incorporation which will be in effect on the completion of this offering; and |
• | on a pro forma as-adjusted basis, giving effect to (1) the pro forma adjustments set forth above and (2) our receipt of estimated net proceeds from the sale of shares of our common stock that we are offering at an assumed initial public offering price of $ per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. |
As of March 31, 2020 | |||||||
Actual | Pro Forma (unaudited) | Pro Forma As Adjusted (unaudited) | |||||
(in thousands except share and per share amounts) | |||||||
Cash and cash equivalents | $ | 36,842 | $ | $ | |||
Long-term debt | $ | 28,659 | $ | $ | |||
Convertible preferred stock, $0.001 par value; 28,293,525 shares authorized, 26,130,896 shares issued and outstanding, actual; and no shares authorized, issued and outstanding, pro forma and pro forma as adjusted | 115,347 | ||||||
Stockholders’ (deficit) equity: | |||||||
Common stock, $0.01 par value; 45,000,000 authorized; 9,246,778 shares issued and outstanding, actual; shares authorized and shares issued and outstanding, pro forma; and shares authorized and shares issued and outstanding, pro forma as adjusted | 92 | ||||||
Additional paid-in capital | 4,347 | ||||||
Accumulated deficit | (88,560 | ) | |||||
Total stockholders’ (deficit) equity | $ | (84,121 | ) | $ | $ | ||
Total capitalization | $ | 59,885 | $ | $ | |||
• | 5,418,687 shares of common stock issuable on the exercise of stock options outstanding as of March 31, 2020 under the 2015 Plan, with a weighted-average exercise price of approximately $2.17 per share; |
• | up to an aggregate of 800,000 shares of common stock which may be issued in connection with the Baby Genes Acquisition, pursuant to certain earn-out provisions if specified revenue thresholds are achieved; |
• | shares of common stock reserved for future issuance under our 2020 Plan, as well as any future increases, including annual automatic evergreen increases, in the number of shares of common stock reserved for issuance under our 2020 Plan; and |
• | shares of common stock reserved for issuance under our ESPP, as well as any future increases, including annual automatic evergreen increases, in the number of shares of common stock reserved for future issuance under our ESPP. |
Assumed initial public offering price per share | $ | ||||
Historical net tangible book value per share as of March 31, 2020 | $ | 2.78 | |||
Increase in historical net tangible book value per share attributable to the pro forma adjustments described above | |||||
Pro forma net tangible book value per share as of March 31, 2020 | |||||
Increase in pro forma as adjusted net tangible book value per share attributable to new investors purchasing shares in this offering | |||||
Pro forma as adjusted net tangible book value per share after this offering | |||||
Dilution in pro forma as adjusted net tangible book value per share to new investors participating in this offering | $ | ||||
Shares Purchased | Total Consideration | Average Price Per Share | |||||||||
Number | Percent | Amount | Percent | ||||||||
Existing stockholders | % | % | |||||||||
New investors | |||||||||||
Totals | 100.0 | % | $ | 100.0 | % | ||||||
• | 5,418,687 shares of common stock issuable on the exercise of stock options outstanding as of March 31, 2020 under the 2015 Plan, with a weighted-average exercise price of approximately $2.17 per share; |
• | up to an aggregate of 800,000 shares of common stock which may be issued in connection with the Baby Genes Acquisition, pursuant to contingent consideration provisions if specified revenue thresholds are achieved; |
• | shares of common stock reserved for future issuance under the 2020 Plan, as well as any future increases, including annual automatic evergreen increases, in the number of shares of common stock reserved for issuance under the 2020 Plan; and |
• | shares of common stock reserved for issuance under our ESPP, as well as any future increases, including annual automatic evergreen increases, in the number of shares of common stock reserved for future issuance under our ESPP. |
Year Ended December 31, | Three Months Ended March 31, | ||||||||||||||
2018 | 2019 | 2019 | 2020 | ||||||||||||
(in thousands, except share and per share data) | |||||||||||||||
Consolidated Statements of Operations Data: | |||||||||||||||
Revenue | |||||||||||||||
Precision oncology products | $ | 16,025 | $ | 22,644 | $ | 4,380 | $ | 7,006 | |||||||
Pharma development services | 12,429 | 27,921 | 5,069 | 7,784 | |||||||||||
Total revenue | 28,454 | 50,565 | 9,449 | 14,790 | |||||||||||
Costs & operating expenses | |||||||||||||||
Cost of precision oncology products | 4,033 | 7,335 | 1,068 | 2,313 | |||||||||||
Cost of pharma development services | 6,230 | 9,212 | 1,706 | 3,399 | |||||||||||
Sales and marketing | 7.215 | 15.428 | 2,644 | 5,324 | |||||||||||
Research and development | 8.184 | 34.172 | 4,295 | 13,737 | |||||||||||
General and administrative | 7,700 | 15,875 | 2,377 | 7,481 | |||||||||||
Contingent consideration | — | 5,768 | 2,716 | (35 | ) | ||||||||||
Total operating expenses | 33,362 | 87,790 | 14,806 | 32,219 | |||||||||||
Loss from operations | (4,908 | ) | (37,225 | ) | (5,357 | ) | (17,429 | ) | |||||||
Interest expense, net | (1,160 | ) | (2,432 | ) | — | (893 | ) | ||||||||
Other income (expense), net | 34 | (824 | ) | (8 | ) | (995 | ) | ||||||||
Loss before income taxes | (6,034 | ) | (40,481 | ) | (5,365 | ) | (19,317 | ) | |||||||
Income tax (benefit) expense | (481 | ) | 497 | 1 | — | ||||||||||
Net loss and comprehensive loss | $ | (5,553 | ) | $ | (40,978 | ) | $ | (5,366 | ) | $ | (19,317 | ) | |||
Basic and diluted loss per common share | $ | (0.61 | ) | $ | (4.50 | ) | $ | (0.59 | ) | $ | (2.10 | ) | |||
Basic and diluted weighted-average common shares outstanding(1) | 9,059,508 | 9,113,833 | 9,059.703 | 9,196.159 | |||||||||||
Pro forma basic and diluted loss per common share(1)(2) | |||||||||||||||
Pro forma basic and diluted weighted-average common shares outstanding(1)(2) | |||||||||||||||
(1) | See Note 15 to our consolidated financial statements included elsewhere in this prospectus for a description of how we compute basic and diluted net loss per share of common stock. |
(2) | The pro forma consolidated financial data gives effect to (a) the issuance of 389,749 shares of Series A Preferred Stock pursuant to the Baby Genes Merger Agreement, (b) the issuance of shares of our Series B Preferred Stock issuable upon the automatic net exercise of the Series B Warrant in connection with this offering, assuming an initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus, (c) the automatic conversion of all of our outstanding shares of convertible preferred stock (including the shares issuable pursuant to the Baby Genes Merger Agreement described in (a) and issuable pursuant to the automatic net exercise of the Series B Warrant described in (b)) into shares of common stock in connection with this offering, (d) the automatic conversion of contingent consideration for the Baby Genes Acquisition from Series A Preferred Stock to up to 800,000 shares of our common stock and the resulting reclassification of the remaining liability to additional paid-in capital and (e) the filing and effectiveness of our amended and restated certificate of incorporation which will be in effect on the completion of this offering. |
December 31, | March 31 | ||||||||||
2018 | 2019 | 2020 | |||||||||
(in thousands) | (in thousands) | ||||||||||
Consolidated Balance Sheet Data: | |||||||||||
Cash and cash equivalents | $ | 9,324 | $ | 59,492 | $ | 36,842 | |||||
Total assets | 29,475 | 106,796 | 97,503 | ||||||||
Total current assets | 19,231 | 83,290 | 66,282 | ||||||||
Total current liabilities | 9,059 | 18,377 | 31,132 | ||||||||
Working capital(1) | 10,172 | 64,913 | 35,150 | ||||||||
Long-term debt, net | — | 28,572 | 28,659 | ||||||||
Convertible preferred stock | 42,180 | 110,154 | 115,347 | ||||||||
Accumulated deficit | (28,265 | ) | (69,243 | ) | (88,560 | ) | |||||
Total stockholders’ deficit | (25,095 | ) | (65,239 | ) | (84,121 | ) | |||||
(1) | Working capital is defined as current assets less current liabilities. |
Three Months Ended March 31, | Change | |||||||||||||
(in thousands, except percentages) | 2019 | 2020 | $ | % | ||||||||||
Revenue | ||||||||||||||
Precision oncology products | $ | 4,380 | $ | 7,006 | $ | 2,626 | 60 | % | ||||||
Pharma development services | 5,069 | 7,784 | 2,715 | 54 | % | |||||||||
Total revenue | 9,449 | 14,790 | 5,341 | 57 | % | |||||||||
Costs & operating expenses | ||||||||||||||
Cost of precision oncology products | 1,068 | 2,313 | 1,245 | 117 | % | |||||||||
Cost of pharma development services | 1,706 | 3,399 | 1,693 | 99 | % | |||||||||
Sales and marketing | 2,644 | 5,324 | 2,680 | 101 | % | |||||||||
Research and development | 4,295 | 13,737 | 9,442 | 220 | % | |||||||||
General and administrative | 2,377 | 7,481 | 5,104 | 215 | % | |||||||||
Contingent consideration | 2,716 | (35 | ) | (2,751 | ) | (101 | )% | |||||||
Total operating expenses | 14,806 | 32,219 | 17,413 | 118 | % | |||||||||
Loss from operations | (5,357 | ) | (17,429 | ) | (12,072 | ) | 225 | % | ||||||
Interest expense, net | — | (893 | ) | (893 | ) | * | ||||||||
Other expense, net | (8 | ) | (995 | ) | (987 | ) | * | |||||||
Loss before income taxes | (5,365 | ) | (19,317 | ) | (13,952 | ) | 260 | % | ||||||
Income tax expense | 1 | — | (1 | ) | (100 | )% | ||||||||
Net loss | (5,366 | ) | (19,317 | ) | (13,951 | ) | 260 | % | ||||||
* | Not meaningful |
Year Ended December 31, | Change | |||||||||||||
(in thousands, except percentages) | 2018 | 2019 | $ | % | ||||||||||
Revenue | ||||||||||||||
Precision oncology products | $ | 16,025 | $ | 22,644 | $ | 6,619 | 41 | % | ||||||
Pharma development services | 12,429 | 27,921 | 15,492 | 125 | % | |||||||||
Total revenue | 28,454 | 50,565 | 22,111 | 78 | % | |||||||||
Costs & operating expenses | ||||||||||||||
Cost of precision oncology products | 4,033 | 7,335 | 3,302 | 82 | % | |||||||||
Cost of pharma development services | 6,230 | 9,212 | 2,982 | 48 | % | |||||||||
Sales and marketing | 7,215 | 15,428 | 8,213 | 114 | % | |||||||||
Research and development | 8,184 | 34,172 | 25,988 | 318 | % | |||||||||
General and administrative | 7,700 | 15,875 | 8,175 | 106 | % | |||||||||
Contingent consideration | — | 5,768 | 5,768 | * | ||||||||||
Total operating expenses | 33,362 | 87,790 | 54,428 | 163 | % | |||||||||
Loss from operations | (4,908 | ) | (37,225 | ) | (32,317 | ) | 658 | % | ||||||
Interest expense, net | (1,160 | ) | (2,432 | ) | (1,272 | ) | 110 | % | ||||||
Other income (expense), net | 34 | (824 | ) | (858 | ) | * | ||||||||
Loss before income taxes | (6,034 | ) | (40,481 | ) | (34,447 | ) | 571 | % | ||||||
Income tax (benefit) expense | (481 | ) | 497 | 978 | (203 | )% | ||||||||
Net loss | (5,553 | ) | (40,978 | ) | (35,425 | ) | 638 | % | ||||||
* | Not meaningful |
Year Ended December 31, | Three Months Ended March 31, | ||||||||||||||
2018 | 2019 | 2019 | 2020 | ||||||||||||
Cash used in operating activities | $ | (4,603 | ) | $ | (37,454 | ) | $ | (2,118 | ) | $ | (21,902 | ) | |||
Cash used in investing activities | (1,978 | ) | (9,710 | ) | (236 | ) | (797 | ) | |||||||
Cash provided by financing activities | 13,528 | 97,182 | (12 | ) | 49 |
Payments due by period | |||||||||||||||||||
Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | |||||||||||||||
(in thousands) | |||||||||||||||||||
Lease obligations(1) | $ | 6,034 | $ | 953 | $ | 2,421 | $ | 2,555 | $ | 105 | |||||||||
Debt obligations(2) | 30,000 | — | — | 30,000 | — | ||||||||||||||
Interest obligations(2) | 11,092 | 3,300 | 6,600 | 1,192 | — | ||||||||||||||
Royalty obligation(3) | 10,229 | 1,491 | 2,947 | 5,791 | — | ||||||||||||||
Purchase obligations(4) | — | — | — | — | — | ||||||||||||||
Total | $ | 57,355 | $ | 5,744 | $ | 11,968 | $ | 39,538 | $ | 105 | |||||||||
(1) | We lease office and laboratory space in St. Louis, Missouri; Boston, Massachusetts; Boulder, Colorado; and Golden, Colorado. Please see Note 8 to our audited financial statements for additional information pertaining to our lease obligations. |
(2) | Interest obligations is based upon our debt outstanding on December 31, 2019 of $30 million and the then effective interest rate of 11%. Please see Note 9 to our audited financial statements for additional information pertaining debt and interest obligations. |
(3) | Under certain of these agreements, we are obligated to pay royalties ranging up to the mid-single digits of sales in which the patents are used in the product or service sold, subject to minimum annual royalties or fees in certain agreements. Please see note 16 to our audited financial statements for additional information pertaining to our royalty obligation. Only minimum royalty payments are listed. |
(4) | We have contracts and purchase orders for limited future obligations related to continuing ongoing operations. Substantially all of our contracts and purchase orders maybe be canceled without significant penalty to us. |
• | the prices, rights, preferences, and privileges of our Preferred Stock relative to those of our common stock; |
• | lack of marketability of the common stock; |
• | current business conditions and projections; |
• | hiring of key personnel and the experience of management; |
• | our stage of development; |
• | likelihood of achieving a liquidity event, such as an initial public offering, a merger or acquisition of our company given prevailing market conditions, or other liquidation event; |
• | the market performance of comparable publicly traded companies; |
• | the U.S. and global capital market conditions; and |
• | the magnitude of the impact of the COVID-19 pandemic on our productivity, results of operations and financial position, as well as on U.S. and global capital market conditions. |
• | Accuracy: Although current tests can accurately detect common or simple mutations, most cannot accurately detect complex mutations, resulting in a high rate of false negatives and positives. These tests are designed with inherent biases which fundamentally limit their ability to detect both known and unknown alterations. We believe our purpose built AMP chemistry addresses these shortcomings by accurately detecting complex, as well as known and unknown, mutations. This |
• | Utility: Current tests generally take a “one-size-fits-all” approach, which limits their utility. Because our products are not limited to blood and tissue, they enable testing across a multitude of sample types, targeting DNA, RNA, and ctDNA in order to provide higher resolution and a more comprehensive view of mutations. Our product development platform enables rapid and efficient customization of biomarker targets, which means clinicians can specify which of our products they want to use to identify mutations that they believe are important in treating each patient’s disease. Together, we believe these features open additional areas of clinical application within therapy optimization for individual patients and cancer monitoring of early-stage cancer. |
• | Turnaround time: Results from centralized genomic tests can take well over 20 days to be returned, depending on complexity and sample type. As late-stage cancer patients are likely to experience superior survival rates and outcomes when treated as soon as possible after diagnosis, lengthy turnaround times can prevent timely treatment. Our products enable local testing with potential times to run the test in a matter of days, accelerating time to results while also allowing the original clinician to maintain sample custody. The reduction in time to actionable results accelerates clinical decisions, which is critical for cancer patients where immediate treatment is important to achieve optimal outcomes. |
• | Economics: The complexity of many genomic testing options requires significant resources and sophisticated infrastructure, which are typically limited to specialized academic or centralized facilities. As a result, hospitals often need to outsource their genomic testing, which incurs costs that are not reimbursed, presenting an additional hurdle to adoption. This particularly affects community and regional hospitals where approximately 85% of cancer patients are treated. Centralized labs that perform genomic testing receive the benefits of reimbursement and often retain possession of patients’ tumor biopsies and control patient data. We believe our platform will empower more hospitals and clinics to practice precision oncology and receive reimbursement for in-house testing that they would otherwise not receive if they send the testing out to centralized labs. In addition, clinicians can retain possession of patients’ tumor biopsies and control the data, which can be matched with clinical data to generate revenue from collaborators, such as biopharmaceutical companies. We believe this empowers providers in all patient care settings to participate in the economics of precision oncology testing. |
• | Our product development platform, featuring our proprietary AMP chemistry, provides accurate, actionable genomic information allowing clinicians to optimize treatment and monitor cancer. Current genomic tests often lack accuracy resulting in a high rate of false negatives and false positives. Because AMP is bi-directional and strand-specific and capable of analyzing DNA, RNA and ctDNA, it provides high sensitivity without sacrificing specificity. Further, AMP’s ability to achieve a limit of detection below a single molecule means it is capable of detecting previously undetectable cancer, while maintaining near-perfect specificity. Our products allow for the identification of both simple and complex genomic mutations, providing clinicians with more actionable information to improve care. |
• | Our versatile product portfolio empowers clinicians to practice precision oncology by providing products and services that are personal and actionable. Currently clinicians have a small set of standardized genomic testing options that are static by nature and inherently limited. This limitation often results in serial testing with clinical decisions being made on incomplete data available at the time. We provide a versatile product portfolio which allows clinicians to select a test based on the clinically relevant sample type, analyte, cancer type and biomarker targets. Through our flexible products, we believe we provide actionable information that enables clinicians to personalize treatment regimens and drives broader adoption of precision oncology. |
• | Our easy-to-use, clinical-grade reagents allow our AMP technology to be deployed at the site of care near the patient. Our easy-to-use reagents enable our decentralized model, permitting any testing center or hospital with a compatible sequencer to run our assay near its patients, improving turnaround time. We conveniently package and ship all necessary reagents to perform biomarker enrichment ahead of sequencing on several platforms. Our pre-packaged reagents are easy to use with minimal hands-on steps, which we believe reduces technician errors and thereby increases assay precision. Our robust proprietary software has quality control features that identify human errors and produces an actionable report for the clinician. Our products can be run individually or easily batched to provide flexibility of throughput. We believe enabling local genomic testing helps reduce significant upfront costs, adds flexibility of scale, and will bring precision oncology to all patients, anywhere. |
• | Our product development platform can be adapted as new applications emerge. Our AMP chemistry enables customization of biomarker targets which can be pooled in billions of possible combinations while maintaining accuracy and precision. The modular nature of our platform allows us to rapidly and easily build customized panels that meet the specific needs of our customers or an individual cancer patient. The majority of our product revenue comes from customized products. Our |
• | We believe we provide a compelling and differentiated value proposition to all stakeholders. We believe our platform empowers more hospitals and clinics to practice precision oncology and receive reimbursement for in-house testing. In addition, clinicians can retain possession of patients’ tumor biopsies and control the data, which they can match with clinical data to generate revenue from collaborative partners, such as biopharmaceutical companies. Most importantly, faster turnaround time can inform clinical decision making in a timelier manner, which is critical for cancer patients where immediate treatment is important to achieve optimal outcomes. |
• | Our multi-faceted commercial capabilities and our regulatory and reimbursement expertise support our ability to bring our products to market globally. We have developed over 325 unique RUO products, which have been sold across 40 countries to facilitate the analysis of over 375,000 samples. Along with our direct sales team, we leverage our medical sales liaisons, distributors, and the sales organizations of our reference lab and biopharmaceutical collaborators to further drive adoption. Additionally, we have added key personnel with extensive regulatory and reimbursement expertise that we believe will facilitate future product development through to regulatory clearance, approval and reimbursement. |
• | We have intellectual property protection for our proprietary AMP chemistry and technology platform and its applications. Our patent portfolio includes 3 issued patents and 16 pending patent applications in the United States and 2 issued patents and 44 pending patent applications in foreign countries related to our AMP chemistry and technology platform and its applications. We also have trade secrets related to our enrichment chemistry and bioinformatics analysis techniques that we believe strengthen our competitive position. |
• | Democratize precision oncology. We offer a suite of products and services that are personal, actionable and easy to use in local settings to advance the treatment of cancer and monitoring of patients by providing our turnkey solution to clinicians. We believe we address common barriers to the broad adoption of precision oncology by developing products that have increased accuracy and clinical utility, and provide expedited test results and shared economics. We plan to increase our commercial footprint and further collaborate with patient advocacy groups, biopharmaceutical companies, regulatory agencies, clinicians and payors to drive broader adoption of our products. |
• | Pursue regulatory clearances and/or approvals for our products across the cancer care continuum. We are pursuing regulatory clearances and/or approvals for the clinical use of STRATAFIDE and the use of PCM in clinical trials. We submitted our first companion diagnostic to the Japanese PMDA in December 2019 and obtained approval in March 2020. We plan to submit STRATAFIDE to the FDA in the next 12 months and PCM to the FDA in the following years. If we receive clearances and/or approvals for these uses of STRATAFIDE and PCM, we will advocate for inclusion of our tests in treatment guidelines, which will strengthen our position in establishing coverage and reimbursement. We plan to leverage our regulatory strategy to efficiently expand the indications for use of future products. |
• | Enable new clinical applications with PCM. Clinicians currently have a limited ability to monitor low levels of cancer, resulting in a large unmet medical need for monitoring early-stage cancer and informing post-diagnosis therapy. PCM is capable of high specificity with a low limit of detection, which allows for post-treatment monitoring of early-stage cancer in a cost- and time-efficient manner. PCM enables the measurement of cancer progression and therapy effectiveness to refine or select a treatment regimen, and can bring precision oncology to earlier stages of cancer. We intend to create |
• | Embed our products and services with biopharmaceutical collaborators. We believe we deliver industry-leading products that provide the accuracy, flexibility, and convenience that biopharmaceutical companies are looking for in their drug development programs. We believe our products allow biopharmaceutical companies to accelerate their product pipeline development by decreasing cost and time of performing clinical trials, potentially accelerating their approval and the expansion of sample types and indications of use across geographies. We plan to continue to promote our products and services to create broader and deeper collaborations with current and new biopharmaceutical customers. |
• | Expand our global footprint. We are continuing to establish the infrastructure needed to deploy our turnkey solution globally and promote broader adoption. We will continue discussions with global regulatory and reimbursement agencies to obtain country-specific approvals. We plan to expand our international targeted sales force to advance commercialization and will continue active dialogue with international key opinion leaders, large pharmaceutical companies, and health systems to increase awareness. We collaborate with a number of distributors internationally and intend to strategically partner with additional distributors to expand access. |
• | Leverage our product development platform to identify and advance innovative products. We have established research and development capabilities that allow us to leverage innovations and operational efficiencies from one product across our platform. We are focused on improving the technical performance and expanding the uses of our products, including indication expansion for STRATAFIDE and PCM. Additionally, we plan to leverage our relationships with key opinion leaders to further identify additional applications for our platform. |
• | Copy number variants, CNVs — gain or loss of copies of one or more genes |
• | Single nucleotide variants, SNVs — changes in a single base |
• | Insertions/deletions, InDels — additions or deletions of parts of genes |
• | Genomic rearrangement — unusual rearrangement of chromosomes |
• | Accuracy: Although current tests can accurately detect common or simple mutations, most cannot accurately detect complex mutations, resulting in a high rate of false negatives and positives. These tests are designed with inherent biases which fundamentally limit their ability to detect both known and unknown alterations. |
• | Utility: Current tests generally take a “one-size-fits-all” approach, limiting utility. Generally, these tests are limited to blood or tissue and can only target one analyte, providing a limited view of mutations. Biomarker targets in these tests are often static because re-engineering the biomarker content or underlying technology is difficult. |
• | Turnaround time: Results from centralized genomic tests can take well over 20 days to be returned, depending on complexity and sample type. As late-stage cancer patients are likely to experience superior survival rates and outcomes when treated as soon as possible after diagnosis, lengthy turnaround times can prevent timely treatment. |
• | Economics: The complexity of many genomic testing options require significant resources and sophisticated infrastructure, which are typically limited to specialized academic or centralized facilities. As a result, hospitals typically outsource their genomic testing, which incurs costs that are not reimbursed, presenting an additional hurdle to adoption. This particularly affects community and regional hospitals where approximately 85% of cancer patients are treated. Centralized labs that perform genomic testing receive the benefits of reimbursement and retain possession of patients’ tumor biopsies and control patient data. |
• | Genetic tests will be personalized for every patient — Genetic tests that are specifically designed to detect each patient’s unique form of cancer will be available and clinicians will be able to determine a personalized course of treatment for every patient and monitor their progress. |
• | Patients will be treated with the right treatment, and only when treatment is needed — Tests that can identify previously undetected mutations will be available, providing the possibility of matching patients with targeted therapy, thereby reducing the use of outdated, non-specific chemotherapy and other toxic treatment regimens and their resulting consequences. |
• | Patients can be tested and treated anywhere — Patients globally will have access to the same level of cancer testing, treatment and care whether they have access to a large academic cancer center or their community hospital. Patients will be able to remain closer to home as they receive care, which can also enhance clinical outcomes. |
• | Clinicians will have access to flexible genetic tests — Clinicians will no longer be locked into a “one-size-fits-all” testing modality. They will have access to tests that will be able to selectively target the biomarker of interest and test across sample type or analyte, depending on their specific need. |
• | Biopharmaceutical companies will have access to tests that can lower costs and expedite their clinical trials — Biopharmaceutical companies will be able to increase the chances of a drug’s success in clinical trials because they will be able to identify and select patients with the right genomic tumor profile for participation in their trials. This will enable them to potentially require fewer patients for their trials, thus shortening the duration of late-stage clinical trials and bringing more best-in-class drugs to patients who need them sooner. |
• | Genomic testing costs for all stakeholders will be economically feasible — Genomic testing will be affordable for patients and profitable for hospitals and providers which will drive broad adoption. For hospitals and clinics, genomic testing will evolve from a cost center to a revenue generator. |
• | Accuracy: We believe our purpose built AMP chemistry can accurately detect complex, as well as known and unknown, mutations. This allows us to provide actionable information to clinicians to better inform treatment. |
• | Utility: Our products can test across a multitude of sample types, not limited to blood and tissue, targeting DNA, RNA, and ctDNA in order to provide higher resolution and a more comprehensive view of mutations. Our platform enables rapid and efficient customization of biomarker targets. Together, we believe these features open additional areas of clinical application within therapy optimization and monitoring of early-stage cancer. |
• | Turnaround time: Our products enable local testing, accelerating time to results while also allowing the original clinician to maintain sample custody. The reduction in time to actionable results accelerates clinical decisions, which we believe improves clinical care as intervention can occur sooner. |
• | Economics: We have designed a flexible platform that seeks to empower providers in all patient care settings to participate in the economics of precision oncology testing. |
• | Unbiased — AMP is able to identify simple and complex genetic mutations given its use of bidirectional gene-specific primers. |
• | Efficient — Tumors are heterogenous, comprised of normal and cancerous cells, making cancer signals difficult to detect. AMP was designed to capture the mutated DNA, RNA, or ctDNA molecules even at low levels. For example, AMP-based target enrichment is able to preferentially enrich for highly fragmented ctDNA over genomic DNA. This reduces background noise and increases the sensitivity for detection of low-allelic fraction mutations, which are low level cancer signals, while retaining specificity. |
• | Error correcting — PCR and NGS can both introduce errors that need to be identified and corrected. AMP uses MBCs and strand-specific bidirectional primers to correct these technical errors to achieve high clinical accuracy. |
• | Quantitative — AMP uses MBCs to enable unique molecule counting. This allows for statistical analysis to provide high confidence in negative and positive calls. This also enables clinicians to accurately correlate results with disease burden, allowing investigation and eventual clinical application of therapy optimization and cancer monitoring. |
• | Flexible — The biomarker targets of AMP-powered assays can be customized with minimal re-engineering. New biomarker targets can be added to AMP-powered assays to match the pace of discovery while maintaining performance of existing biomarker targets. The AMP chemistry makes it easy to design primers for the desired targets, because AMP only requires one primer per biomarker target. This flexibility allows us to rapidly build customized products without re-engineering AMP. |
• | Versatile — AMP chemistry was purpose-built for wide sample type compatibility, including low-input and degraded DNA, RNA, and ctDNA. AMP enables us to analyze multiple analytes with a range of quality and quantity, allowing providers to extract more information from every sample, which is particularly useful for patients with limited biopsy material. |
• | Manufacturing and processing efficiency — The product development platform’s flexibility and robustness allows for assay customization as quickly as within two weeks. We are able to streamline the total number of components needed for assay development and manufacturing as only the primers or enrichment reagents need to change for new assays, not the underlying technology, AMP, or the enzymes. This streamlines the process in order to scale manufacturing throughput with automation without incurring significant additional cost. |
• | Reliability — AMP supports reproducible and consistent results. Our product development platform minimizes the need to introduce more complicated elements than necessary, helping to allow our AMP chemistry to perform to its full potential, leading to consistent, reproducible highly accurate results. This enables our tests to work reliably and be clinically relevant for our users, which drives repeat orders and we believe will drive further adoption of our products. |
• | Simplification and optimization — We have designed our tests to work as needed by the clinician by providing all the specific reagents and biomarker-specific primers needed to prepare their specific sample type for AMP. We believe this quality control and convenience will provide a seamless experience for users and further drive adoption. |
• | Modularity — The modular nature of our product development platform where we pair AMP with target or sample-specific enrichment reagents or biomarker-specific primers has allowed us to develop hundreds of custom RUO products since our inception. We believe we can leverage our modular product development platform in the future to continually produce new products at a quicker pace than if we had to redesign the underlying technology for each new assay design. |
• | Easy-to-use reagents — Our reagents are shipped in a convenient pre-packaged format containing biomarker-specific primers and lyophilized reagents. Reagents are lyophilized for ease of use and packaged into single-use strip tubes which facilitate correct usage. Each component is clinical grade with features to identify and avoid human error, such as contamination or liquid master mix preparation mistakes. Additionally, flexible formats allow for various run size, automation compatibility and batching of patients in a single run depending on lab capability and testing demand. |
• | Lower thresholds for training — Our easy-to-use reagent workflows overlap from product to product, which allows for consistent library preparation and helps ease laboratory staff training requirements, improving assay precision and adoption. |
• | Easily understandable outputs — Our bioinformatics software provides easily understandable readouts with relevant information that clinicians can interpret themselves and use to inform therapy, rather than having to spend large amounts of capital to develop proprietary bioinformatics or rely on centralized labs to interpret results. |
• | Data control — Our bioinformatics software allows hospitals to retain control of their data. Its flexible configuration can be used via a private cloud-based instance or a virtual machine that can be installed on a customer’s own hardware behind their firewall. |
• | Rapid results — Our bioinformatics software can analyze hundreds of samples simultaneously to deliver fast turnaround times and quickly provide clinicians with actionable results to optimize therapy for patients. We believe our bioinformatics software’s ability to make results intelligible will lead to broader adoption of our solution as clinicians are able to rapidly access test results. |
• | Customizable — Our bioinformatics software can be tailored to a broad array of sequencing applications through add-on modules without the need to update the core software. This provides clinicians with a singular, easy-to-use portal for current and future applications. |
• | a custom VariantPlex product for MRD detection in pediatric patients with acute myeloid leukemia; |
• | a custom FusionPlex product for real-time sequencing and rapid identification of fusions in leukemias using rapid NGS technology; and |
• | a custom LiquidPlex product for tumor virus genome detection to track tumor burden and study viral oncogenicity and antiviral drug response. |
• | Measure disease progression (Recurrence Monitoring of Residual Disease) — We can detect recurrence before it is symptomatic, allowing for early intervention when the cancer is most curable. |
• | Measure therapy effectiveness (Therapy Response Monitoring) — We can identify if a therapy is truly effective or ineffective earlier than standard trial endpoints (i.e., Response Evaluation Criteria in Solid Tumors, or RECIST), reducing the cost and time to perform clinical trials. |
• | Determine treatment regimen (Therapy Optimization) — We can identify previously undetectable high-risk patients in the adjuvant cancer setting to bring approved therapies currently approved for late-stage patients into the early-stage setting, when the cancer is most curable. |
• | Refine therapy (Therapy Modulation) — We believe a future application of PCM could be to remove adjuvant therapy from surgically cured patients. |
• | Measure clinical trial endpoints (Novel Surrogate Clinical Trial Endpoints) — We believe PCM could potentially reduce the cost and length of trials to accelerate drug development, which can bring life- |
(1) | At initial diagnosis, exome sequencing of the surgically removed tumor or a tumor biopsy is used to identify the patient-specific cancer mutations. |
(2) | Data from the exome sequencing is analyzed with proprietary algorithms to select the patient-specific cancer mutations most likely to yield the greatest sensitivity for recurrence of the patient’s cancer. |
(3) | An enhanced version of Assay Designer is used to create a personalized LiquidPlex product, which is used to longitudinally track ctDNA and measure cancer burden. |
(4) | The personalized product is delivered to the laboratory affiliated with the patient’s care team. |
(5) | The clinicians use the personalized product to assess ctDNA taken from non-invasive peripheral blood draws at specified intervals, yielding a quantitative longitudinal view of the cancer’s evolution. |
• | High sensitivity and specificity — Archer AMP chemistry has demonstrated high sensitivity and specificity of simple and complex mutations compared to other methods. |
• | Chemistry modularity — Archer AMP chemistry provides us with the ability to mix and match different sets of biomarker content without sacrificing performance. |
• | Known and unknown mutation detection — The accuracy of the Archer AMP chemistry has identified unknown RNA fusions for the very first time, which were unable to be detected given a lack of sensitivity in other testing methods. |
• | Improved clinical utility — Archer AMP chemistry has been proven to demonstrate improved clinical utility. For example, clinicians at Memorial Sloan Kettering profiled over 2,500 lung cancers using the MSK-IMPACT test. FusionPlex identified previously undetected, actionable mutations in 33 patients. Of these 33 patients, 10 received a matched targeted therapy, and 8 of these 10 achieved clinical benefit. |
• | Summary of study results: Archer’s products provide highly sensitive (true positive) results, correctly identifying individuals with a genetic mutation, and highly specific (true negative) results, correctly identifying individuals without a genetic mutation across institutions. |
• | Summary of data: In a subset of 219 patient samples, multiple institutions achieved a sensitivity of 100% and specificity of 100% using our FusionPlex product. In addition, investigators at Virginia Commonwealth University, Duke University and Genosity’s CAP-accredited laboratory also achieved sensitivity and specificity of 100% in over 515 patient samples with our VariantPlex product. Finally, investigators at Massachusetts General Hospital interrogated 110 mutations using our LiquidPlex |
• | Summary of study result: Clinical validation of AMP as compared to fluorescent in situ hybridization, or FISH. The first validation of AMP demonstrated superior performance with respect to clinical |
• | Summary of data: An AMP gene rearrangement panel using 319 FFPE samples showed 100% sensitivity (95% confidence limit: 96.5-100%) and 100% specificity (95% confidence limit: 99.3-100%) compared with reference methods. Based on performing AMP on 986 clinical FFPE samples, the study demonstrated AMP’s potential as both a robust clinical assay and a powerful discovery tool, which was used to identify new therapeutically important gene fusions: ARHGEF2-NTRK1 and CHTOP-NTRK1 in glioblastoma, MSN-ROS1, TRIM4-BRAF, VAMP2-NRG1, TPM3-NTRK1 and RUFY2-RET in lung cancer, FGFR2-CREB5 in cholangiocarcinoma and PPL-NTRK1 in thyroid carcinoma. |
• | Archer implication: Accuracy and Utility — AMP is a scalable and efficient next-generation sequencing target enrichment method for research and clinical applications. Archer’s AMP chemistry is compatible with low nucleic acid input from FFPE specimens and is effective in detecting gene rearrangements (without prior knowledge of the fusion partners), single nucleotide variants, insertions, deletions and copy number changes. |
• | Summary of study result: Archer FusionPlex-based test is superior to FISH and PCR in identifying complex mutations and can also identify previously unknown fusion partners. |
• | Summary of data: Archer’s AMP chemistry was used in a 26-gene FusionPlex Sarcoma panel and was evaluated and compared with FISH and reverse transcriptase-PCR (RT-PCR). Eighty-one samples were subjected to AMP-based targeted NGS, and 86% (n = 70) were successfully conducted and were either fusion positive (n = 48) or fusion negative but met all criteria for good quality (n = 22). A concordance of 90% was found between NGS and conventional techniques. AMP-based targeted NGS showed superior results compared to FISH and RT-PCR, which showed four cases that were false negative. The Archer assay also revealed COL1A1 and SEC31A as novel fusion partners for USP6 in nodular fasciitis, whereas FISH and RT-PCR did not detect these fusion partners. |
• | Archer implication: Accuracy and Utility — Archer’s platform can potentially unlock new clinical applications demonstrated by the validation of Archer’s AMP chemistry’s ability to detect complex mutations in RNA not possible with other technologies. This study provides clinical validation of AMP and demonstrates its superior utility compared to FISH and RT-PCR. |
• | Summary of study result: Large DNA-based sequencing tests lack adequate sensitivity for detecting all treatable cancer-related mutations, resulting in patients receiving non-specific, toxic chemotherapy. This study led to a new NCCN recommendation for concurrent RNA-based testing. |
• | Summary of data: As part of the prospective clinical genomic testing, clinicians at Memorial Sloan Kettering profiled 2,522 lung adenocarcinomas using the MSK-IMPACT test panel. This prospective clinical testing identified 195 (7.7%) fusions and 119 (4.7%) METex14 alterations. FusionPlex identified previously undetected mutations in 14% (36/254) of cases, 33 of which were actionable. Of |
• | Archer implication: Utility and Flexibility — Archer’s RNA-based FusionPlex product line can identify previously undetected mutations, providing the possibility of matching more patients with targeted therapy, thereby reducing the consequences of outdated, non-specific chemotherapy and toxic regimens. |
• | Summary of study result: Clinical validation of a large, custom FusionPlex test interrogating 106 cancer genes involving nearly 600 different fusions reported in hematological malignancies and solid tumors. This test identified fusions with 100% sensitivity and specificity, regardless of sample type. |
• | Summary of data: Gene fusions are one of the most common genomic alterations in pediatric cancer. Many fusions encode oncogenic drivers and play important roles in cancer diagnosis, risk stratification, and treatment selection. In the validation for this study, the test demonstrated perfect accuracy, with 100% sensitivity and 100% specificity on 60 pediatric tumor samples. In addition to identifying all known fusions in the validation samples, three previously unrecognized, yet clinically significant, fusions were also detected. Following assay validation, 276 additional cases were analyzed, identifying 51 different fusions. Of these, 16 were not previously identified and provided genomic information useful for clinical management. |
• | Archer implication: Accuracy and Utility — This study demonstrates that Archer’s AMP chemistry enables custom FusionPlex products with many biomarker targets without sacrificing assay performance. In addition, FusionPlex products are able to detect the vast majority of known and previously unknown clinically-relevant fusions in pediatric cancers accurately and efficiently. |
• | Summary of study result: Clinical validation of a 28-gene Archer LiquidPlex cell-free DNA panel that targets the most common genetic alterations in solid tumors that demonstrated 100% specificity and over 89% sensitivity in identifying solid tumor driver mutations. |
• | Summary of data: The use of liquid biopsies to identify driver mutations in patients with solid tumors holds great promise for performing targeted therapy selection, monitoring disease progression, and detecting treatment resistance mechanisms. In this study, the panel and analytical tools developed were used to analyze commercially available controls, allowing establishment of a limit of detection allele fraction cutoff of 0.25%, with 100% (95% CI, 81.5%-100%) specificity and 89.8% (95% CI, 81.0%-94.9%) sensitivity. In addition, a total of 163 blood samples were analyzed from patients with metastatic cancer (n = 123) and demonstrated a >90% sensitivity for detecting previously identified expected mutations. Longitudinal monitoring of patients revealed a strong correlation of variant allele frequency changes and clinical outcome. Additional clinically relevant information included identification of resistance mutations in patients receiving targeted treatment and detection of complex patterns of mutational heterogeneity. |
• | Archer implication: Accuracy and Utility — Although tissue is the gold standard sample type, it may be difficult to obtain and not every patient is healthy enough to undergo an invasive biopsy. This study demonstrates the ability of our LiquidPlex product to identify solid tumor driver mutations via liquid biopsy filling a critical need for patients without a tissue biopsy available. The high sensitivity and |
• | Summary of study result: Clinical validation of a custom Archer panel to identify blood cancers by detecting MRD in patients with AML in remission. |
• | Summary of data: Patients with AML in remission remain at risk for relapse even after allogeneic hematopoietic cell transplantation. Ultra-deep, error-corrected sequencing for 13 commonly mutated genes in AML was performed on preconditioning blood from patients treated in a phase III clinical trial that randomly assigned adult patients with myeloid malignancy in morphologic complete remission to myeloablative conditioning, or MAC, or reduced-intensity conditioning, or RIC. This study provided evidence that MAC rather than RIC in patients with AML with genomic evidence of MRD before alloHCT can result in improved survival. |
• | Archer implication: Utility — This study underscores the power of the Archer platform to provide accurate genomic alteration detection regardless of sample sources (solid tumor or hematological malignancies), addressing the current limitations of “one-size-fits-all” approaches, and establishing the foundation for expansion of therapy optimization and cancer monitoring into blood cancers. |
• | Summary of study result: FusionPlex used to identify a novel fusion in a lung-cancer patient that responded to a MET-specific drug. |
• | Summary of data: The study describes the first case of a MET fusion in lung cancer identified and treated during course of clinical care, and the dramatic response of the patient’s tumor to crizotinib treatment. The authors utilized FusionPlex to detect a previously undescribed fusion of HLA-DRB1 exon 5 to MET exon 15, and this fusion was predicted to be in-frame and preserve the MET kinase domain. The finding was confirmed on a separate extraction and repeat analysis from the resection sample. The patient began treatment with off-label oral crizotinib 250mg twice daily. After 6 weeks of therapy, repeat CT showed complete resolution of the previously observed left upper lobe perihilar and right lower lobe lung nodules with no new lesions. This robust response remains as of 8 months on therapy. The recent rapid expansion in the number of characterized driver oncogenes, the increase in the number of approved therapies, and the large number of clinical studies now available testing drugs that target these novel oncogenes, necessitates evaluating multiple genes simultaneously. NGS-based assays are well suited to meet this requirement due to the ability to sequence in massively parallel fashion. This study employed AMP, an NGS-based assay designed specifically for gene fusion detection. The ability of this assay to detect fusions without prior knowledge of the fusion partner was critical in this case, as fusion of MET to HLA-DRB1 has not been reported previously. |
• | Archer implication: Accuracy and Utility — The accuracy of FusionPlex allows for the detection of novel fusions that expand the druggable targets within an indication. This study unlocks new applications for targeted therapies used by biopharmaceutical companies leading to more use in clinical trials and expanded clinical utility. |
• | Summary of study result : Utilizing ArcherDX’s AMP technology, ctDNA monitoring for MRD can detect relapse of NSCLC earlier than standard of care imaging surveillance in some instances. AMP personalized cell-free DNA, or cfDNA, enrichment can accurately detect low-frequency variant DNA at low assay DNA inputs consistent with an MRD setting. |
• | Summary of data: Post-operative timepoints were analyzed from 90 TRACERx patients. In patients whose cancer had relapsed and shed ctDNA, the ctDNA was detected at or before relapse with a median lead-time, or time from ctDNA detection to clinical relapse, of 164 days (range: 6 to 1,022 days) in the TRACERx study tracking a median of 200 variants per patient. Furthermore, in non-relapse patients, the assay demonstrated 99.3% clinical specificity within the research data set. Results from the analytical validation of a 50-variant version of the research assay demonstrated 100% specificity with detection down to 0.003% variant fractions at high cfDNA input levels. |
• | Archer implication: Accuracy and Utility — The study provides further evidence that Archer’s AMP technology has the ability to potentially accurately detect exceedingly low levels of cancer-derived DNA from patient blood which is important for successful PCM. Furthermore, with more sensitive detection of ctDNA for MRD as a biomarker, it is possible for adjuvant clinical trials to be conducted in smaller and more relevant settings by only escalating therapy in patients who are set to relapse, thereby potentially reducing trial size, cost and time. |
• | the device may not be shown safe or effective to the FDA’s satisfaction; |
• | the data from pre-clinical studies and/or clinical trials may be found unreliable or insufficient to support approval; |
• | the manufacturing process or facilities may not meet applicable requirements; and |
• | changes in FDA clearance or approval policies or adoption of new regulations may require additional data. |
• | establishment registration and device listing with the FDA; |
• | QSR requirements, which require manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and manufacturing process; |
• | labeling regulations and FDA prohibitions against the promotion of investigational products, or the promotion of “off-label” uses of cleared or approved products; |
• | requirements related to promotional activities; |
• | clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of certain modifications to PMA-approved devices; |
• | medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely to cause or contribute to a death or serious injury, if the malfunction were to recur; |
• | correction, removal and recall reporting regulations, which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to health posed by the device or to remedy a violation of the FDCA that may present a risk to health; |
• | the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and |
• | post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device. |
• | issuance of warning letters, untitled letters, fines, injunctions, consent decrees and civil penalties; |
• | requesting or requiring recalls, withdrawals, or administrative detention or seizure of our products; |
• | imposing operating restrictions or partial suspension or total shutdown of production; |
• | refusing or delaying requests for 510(k) marketing clearance or PMA approvals of new products or modified products; |
• | withdrawing 510(k) clearances or PMA approvals that have already been granted; |
• | refusal to grant export approvals for our products; or |
• | criminal prosecution. |
Name | Age | Position | ||
Executive Officers: | ||||
Jason W. Myers | 44 | President and Chief Executive Officer and Director | ||
Joshua Stahl | 34 | Chief Scientific Officer and Chief Operating Officer | ||
Britton A. Russell | 31 | Senior Vice President, Finance | ||
Non-Employee Directors: | ||||
Steven J. Kafka | 50 | Executive Chairman of the Board of Directors | ||
Paul B. Manning | 64 | Director | ||
Kyle A. Lefkoff | 60 | Director | ||
Marvin H. Caruthers | 80 | Director | ||
Jason C. Ryan | 45 | Director | ||
• | one director elected by the holders of a majority of our outstanding common stock and who is then serving as our chief executive officer, or the CEO Director, who is currently Jason Myers; |
• | one director elected by the holders of a majority of our outstanding convertible preferred stock who is designated by Boulder Ventures IV, LP, currently Kyle Lefkoff; |
• | one director elected by the holders of a majority of our outstanding convertible preferred stock who is designated by PBM Special Projects II, LLC, currently Paul Manning; |
• | one director elected by the holders of a majority of our outstanding convertible preferred stock who is designated by Perceptive Life, so long as such designee is reasonable acceptable to the CEO Director, which is currently vacant; and |
• | two directors elected by the holders of a majority of our outstanding capital stock who are designated by the mutual agreement of the other directors so long as such designees are not otherwise affiliates of ArcherDX or any existing investor, currently Marvin Caruthers and Steve Kafka; |
• | the Class I directors will be and , whose terms will expire at the first annual meeting of stockholders to be held in 2021; |
• | the Class II directors will be and , whose terms will expire at the second annual meeting of stockholders to be held in 2022; and |
• | the Class III director will be , whose term will expire at the third annual meeting of stockholders to be held in 2023. |
• | helping our board of directors oversee our corporate accounting and financial reporting processes; |
• | managing the selection, engagement, qualifications, independence and performance of a qualified firm to serve as the independent registered public accounting firm to audit our financial statements; |
• | discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results; |
• | developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters; |
• | reviewing related person transactions; |
• | obtaining and reviewing a report by the independent registered public accounting firm at least annually that describes our internal quality control procedures, any material issues with such procedures and any steps taken to deal with such issues when required by applicable law; and |
• | approving or, as permitted, pre-approving, audit and permissible non-audit services to be performed by the independent registered public accounting firm. |
• | reviewing and approving the compensation of our chief executive officer, other executive officers and senior management; |
• | reviewing, evaluating and recommending to our board of directors succession plans for our executive officers; |
• | reviewing and recommending to our board of directors the compensation paid to our directors; |
• | administering our equity incentive plans and other benefits programs; |
• | reviewing, adopting, amending and terminating our incentive compensation and equity plans, severance agreements, profit sharing plans, bonus plans, change-of-control protections and any other compensatory arrangements for our executive officers and other senior management; and |
• | reviewing and establishing general policies relating to compensation and benefits of our employees, including our overall compensation philosophy. |
• | identifying and evaluating candidates, including the nomination of incumbent directors for reelection and nominees recommended by stockholders, to serve on our board of directors; |
• | considering and making recommendations to our board of directors regarding the composition and chairmanship of the committees of our board of directors; |
• | instituting plans or programs for the continuing education of our board of directors and orientation of new directors; |
• | developing and making recommendations to our board of directors regarding corporate governance guidelines and matters; and |
• | overseeing periodic evaluations of the board of directors’ performance, including committees of the board of directors. |
Name(1) | Fees Earned or Paid in Cash ($)(2) | Option Awards ($)(3) | Total ($) | ||
Steven Kafka | 66,667 | 858,000(4) | 924,667 | ||
(1) | Dr. Myers, our president and chief executive officer, also served as a member of our board of directors in the fiscal year ended December 31, 2019. Dr. Myers’s compensation for serving as our president and chief executive officer in 2019 is reported in the 2019 summary compensation table and other compensation tables set forth under “Executive compensation.” Dr. Myers did not receive any additional compensation for his service on our board of directors. Marvin Caruthers, Kyle Lefkoff, and Paul Manning each also served as members of our board of directors in the fiscal year ended December 31, 2019, but these directors did not receive any compensation for their service on our board of directors. |
(2) | Mr. Kafka is entitled to compensation for his services as executive chairman of our board of directors pursuant to a services agreement, dated as of April 29, 2019, by and between us and Mr. Kafka. Pursuant to that agreement, Mr. Kafka will earn $100,000 per year, paid quarterly, and received an option to purchase 550,000 shares of common stock, as further described in footnote (4) below. The amount reflected in this column represents the portion of Mr. Kafka’s fees earned in 2019 for his services as our executive chairman beginning in April 2019. |
(3) | The amount reported in this column does not reflect the dollar amount actually received by the non-employee director. Instead, the amount reflects the aggregate grant date fair value of the stock options granted to the non-employee director during 2019 under our 2015 Plan, computed in accordance with FASB ASC Topic 718. As required by SEC rules, the amount shown excludes the impact of estimated forfeitures related to service-based vesting conditions. The amount reported in this column reflects the accounting cost for these stock options and does not correspond to the actual economic value that may be received by the non-employee director upon the exercise of the stock options or any sale of the underlying shares of common stock. |
(4) | In July 2019, we granted Mr. Kafka options to purchase 550,000 shares of common stock with an exercise price of $2.20 per share. 34% of the shares underlying the options vest on the first anniversary of the vesting commencement date, and 2.75% of the shares vest monthly over the following 24 months. The aggregate number of shares subject to outstanding stock options owned by Mr. Kafka as of December 31, 2019 was 650,000. |
• | Jason Myers, our President and Chief Executive Officer; and |
• | Joshua Stahl, our Executive Vice President and Chief Scientific Officer. |
Name and Principal Position | Salary ($) | Bonus ($)(1) | Option Awards ($)(2) | Non-Equity Incentive Plan Compensation ($)(3) | All Other Compensation ($) | Total ($) | |||||||||||
Jason Myers | 354,300 | 512 | 2,136,750 | 21,258 | 9,725(4) | 2,522,545 | |||||||||||
President and Chief Executive Officer | |||||||||||||||||
Joshua Stahl | 314,000 | 514 | 1,155,000 | 18,840 | 1,484(5) | 1,489,838 | |||||||||||
Executive Vice President and Chief Scientific Officer | |||||||||||||||||
(1) | Amounts reflect a five-year service award earned by each named executive officer. |
(2) | Amounts represent the aggregate grant date fair value of stock options granted to our executive officers in 2019 under our 2015 Plan, computed in accordance with ASC Topic 718. The assumptions used in calculating the grant date fair value of the stock options reported in this column are set forth in the notes to our audited consolidated financial statements included elsewhere in this prospectus. Amounts do not reflect the actual economic value that may be realized by the named executive officers. |
(3) | Amounts reflect the incentive bonuses earned by the named executive officers with respect to the fiscal year ended December 31, 2019. The bonuses were earned based on target bonus amounts (6% of base salary) and for achievement of company-wide performance targets established by the Compensation Committee and approved by our board of directors. |
(4) | Amount includes life insurance premiums and $9,515 car allowance. |
(5) | Amount includes life insurance premiums and $1,274 401(k) matching contribution. |
Option Awards(1) | |||||||||||||
Name | Grant Date(1) | Number of Securities Underlying Unexercised Options Exercisable | Number of Securities Underlying Unexercised Options Unexercisable | Option Exercise Price ($) | Option Expiration Date | ||||||||
Jason Myers | 10/02/2018 | 191,666 | 208,334(2) | $ | 0.74 | 10/01/2028 | |||||||
12/17/2019 | — | 925,000(3) | $ | 3.25 | 12/16/2029 | ||||||||
Joshua Stahl | 10/02/2018 | 110,208 | 119,792(2) | $ | 0.74 | 10/01/2028 | |||||||
12/17/2019 | — | 500,000(3) | $ | 3.25 | 12/16/2029 | ||||||||
(1) | All of the option awards listed in the table above were granted under the 2015 Plan, the terms of which are described below under “—Equity incentive plans.” |
(2) | 25% of these options vested on October 2, 2019 with the remaining 75% vesting in equal monthly installments over the next three years. 100% of the vesting shall accelerate if, within 12 months following a “change of control,” the optionee’s employment is terminated without “cause” or the participant resigns for “good reason.” |
(3) | 25% of these options vested on December 17, 2020 with the remaining 75% vesting in equal monthly installments over the next three years. 100% of the vesting shall accelerate if, within 12 months following a “change of control,” the optionee’s employment is terminated without “cause” or the participant resigns for “good reason.” |
• | provide that awards be assumed (as defined in the 2015 Plan), or substantially equivalent awards shall be substituted, by our acquiring or succeeding corporation (or an affiliate thereof); |
• | upon written notice to an award holder, provide that all of the award holder’s unexercised awards will terminate immediately prior to the consummation of such reorganization event unless exercised by the award holder (to the extent then exercisable) within a specified period following the date of such notice; |
• | provide that outstanding awards shall become exercisable, realizable, or deliverable, or restrictions applicable to an award will lapse, in whole or in part, prior to or upon such reorganization event; |
• | in the event of a reorganization event under the terms of which holders of common stock will receive upon consummation thereof a cash payment for each share surrendered in the transaction (the “acquisition price”), make or provide for a cash payment to the award holder equal to the excess, if any, of (1) the acquisition price times the number of shares of common stock subject to vested portion of the awards (to the extent the exercise price does not exceed the acquisition price) over (2) the aggregate exercise price, measurement price, or purchase price of such outstanding awards and any applicable tax withholdings, in exchange for the termination of such awards; |
• | provide that, in connection with a liquidation or dissolution, awards will convert into the right to receive liquidation proceeds (if applicable, net of the exercise price thereof and any applicable tax withholdings); or |
• | any combination of the foregoing. |
• | any breach of the director’s duty of loyalty to the corporation or its stockholders; |
• | any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | unlawful payments of dividends or unlawful stock repurchases or redemptions; or |
• | any transaction from which the director derived an improper personal benefit. |
• | the amounts involved exceeded or will exceed $120,000; and |
• | any of our directors, executive officers or holders of more than 5% of our capital stock, or any affiliate or member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest. |
Stockholder(1) | Shares of Series A Preferred Stock | Total Purchase Price ($) | ||||
(in thousands) | ||||||
Boulder Ventures VI, L.P.(2) | 1,404,849 | 5,000 | ||||
Christopher Benoit(3) | 515,246 | 1,711 | ||||
KV Enzymatics, LLC(4) | 1,295,279 | 4,302 | ||||
PBM Special Projects II, LLC(5) | 1,123,878 | 4,000 | ||||
QIAGEN North American Holdings, Inc.(6) | 3,413,872 | 11,340 | ||||
Stephen Picone(7) | 534,522 | 1,775 | ||||
(1) | Additional information regarding these stockholders and their equity holdings is provided in the section titled “Principal stockholders.” |
(2) | Kyle Lefkoff, a member of our board of directors, is a managing member of BV Partners VI, LLC, or BVP VI, which is the general partner of Boulder Ventures VI, L.P., or BV VI. In addition, entities affiliated with Boulder Ventures VII, L.P. collectively, or BV Entities, hold more than 5% of our capital stock. |
(3) | Christopher Benoit, together with trusts of which he is trustee, collectively hold more than 5% of our capital stock. |
(4) | KV Enzymatics, LLC holds more than 5% of our capital stock. |
(5) | Paul Manning, a member of our board of directors, is a manager of PBM Special Projects II, LLC and may be deemed to indirectly own the shares held by PBM Special Projects II, LLC. |
(6) | QIAGEN North American Holdings, Inc. holds more than 5% of our capital stock. |
(7) | Stephen Picone, together with trusts of which he is trustee, collectively hold more than 5% of our capital stock. |
Stockholder(1) | Shares of Series B Preferred Stock | Total Purchase Price ($) | ||||
(in thousands) | ||||||
Boulder Ventures VI, L.P.(2) | 103,734 | 500 | ||||
Boulder Ventures VII, L.P.(2) | 311,203 | 1,500 | ||||
KV Enzymatics, LLC(3) | 829,876 | 4,000 | ||||
PBM Special Projects II, LLC(4) | 261,574 | 1,261 | ||||
Perceptive Credit Holdings II, LP(5) | 518,672 | 2,500 | ||||
(1) | Additional information regarding these stockholders and their equity holdings is provided in the section titled “Principal stockholders.” |
(2) | Kyle Lefkoff, a member of our board of directors, is a managing member of BV Partners VI, LLC and BV Partners VII, LLC, or BVP VII, which are the general partners of Boulder Ventures VI, L.P. and Boulder Ventures VII, L.P., respectively. In addition, entities affiliated with Boulder Ventures VII, L.P. collectively hold more than 5% of our capital stock. |
(3) | KV Enzymatics, LLC holds more than 5% of our capital stock. |
(4) | Paul Manning, a member of our board of directors, is a manager of PBM Special Projects II, LLC and may be deemed to indirectly own the shares held by PBM Special Projects II, LLC. |
(5) | Entities affiliated with Perceptive Credit collectively hold more than 5% of our capital stock. |
Stockholder(1) | Shares of Series C Preferred Stock | Total Purchase Price ($) | ||||
(in thousands) | ||||||
BKB Growth Investments LLC(2) | 360,082 | 2,100 | ||||
Boulder Ventures VI, L.P.(3) | 85,733 | 500 | ||||
Boulder Ventures VII, L.P.(3) | 171,467 | 1,000 | ||||
J.P. Morgan Trust Company of Delaware, Trustee of The Marvin H. Caruthers 2008 Irrevocable Trust(4) | 85,733 | 500 | ||||
PCOF EQ AIV II, LP(5) | 112,318 | 655 | ||||
Perceptive Credit Holdings II, LP(5) | 230,613 | 1,345 | ||||
Perceptive Life Sciences Master Fund LTD(5) | 3,429,355 | 20,000 | ||||
Redmile Biopharma Investments II, L.P.(6) | 1,804,657 | 10,525 | ||||
Redmile Private Investments II, L.P.(6) | 767,359 | 4,475 | ||||
(1) | Additional information regarding these stockholders and their equity holdings is provided in the section titled “Principal stockholders.” |
(2) | Paul Manning, a member of our board of directors, is a co-manager of Tiger Lily Capital, LLC, which is the manager BKB Growth Investments LLC. |
(3) | Kyle Lefkoff, a member of our board of directors, is a managing member of BV Partners VI, LLC and BV Partners VII, LLC, which are the general partners of Boulder Ventures VI, L.P. and Boulder Ventures VII, L.P., respectively. In addition, entities affiliated with Boulder Ventures VII, L.P. collectively hold more than 5% of our capital stock. |
(4) | Marvin Caruthers, a member of our board of directors, has a financial interest in J.P. Morgan Trust Company of Delaware, Trustee of The Marvin H. Caruthers 2008 Irrevocable Trust. |
(5) | Entities affiliated with Perceptive Life and Perceptive Credit collectively hold more than 5% of our capital stock. |
(6) | Entities affiliated with Redmile Biopharma Investments II, L.P., or Redmile Biopharma, and Redmile Private Investments II, L.P., or Redmile Investments, collectively referred to as the Redmile Entities, hold more than 5% of our capital stock. |
• | each of our named executive officers; |
• | each of our directors; |
• | all of our directors and executive officers as a group; and |
• | each person or entity known by us to own beneficially more than 5% of our common stock (by number or by voting power). |
Shares Beneficially Owned Prior to Offering | Shares Beneficially Owned After Offering | |||||||
Name of Beneficial Owner | Shares(1) | Percentage | Shares(1) | Percentage | ||||
5% Stockholders | ||||||||
KV Enzymatics, LLC(2) | 5,219,043 | |||||||
Entities affiliated with Perceptive Life Sciences Master Fund LTD.(3) | 5,260,958 | |||||||
QIAGEN North American Holdings, Inc. | 3,413,872 | |||||||
Entities affiliated with Redmile Biopharma Investments II, L.P.(4) | 2,572,016 | |||||||
Stephen Picone(5) | 2,356,610 | |||||||
Entities affiliated with Boulder Ventures VII, L.P.(6) | 2,076,986 | |||||||
Named Executive Officers and Directors | ||||||||
Jason Myers(7) | 1,495,696 | |||||||
Joshua Stahl(8) | 203,750 | |||||||
Britton Russell(9) | 9,650 | |||||||
Marvin Caruthers(10) | 137,816 | |||||||
Steve Kafka(11) | 261,636 | |||||||
Kyle Lefkoff(6) | 2,076,986 | |||||||
Paul Manning(12) | 6,910,723 | |||||||
Jason Ryan | - | |||||||
All executive officers and directors as a group (8 persons)(13) | 11,096,257 | |||||||
(1) | All share numbers give effect to the conversion of our outstanding convertible preferred stock into shares of common stock upon the closing of this offering. |
(2) | Mr. Manning, Ian Ratcliffe and Robert Harding are members of KV Enzymatics, LLC, or Enzymatics, and each may be deemed to indirectly own the shares held by Enzymatics. The address for Enzymatics is 200 Garrett Street, Suite S, Charlottesville, VA 22902. |
(3) | Consists of 3,429,355 shares of our common stock held by Perceptive Life, 749,285 shares of our common stock held by Perceptive Credit, 112,318 shares of our common stock held by PCOF EQ AIV II, LP, or, together with Perceptive Life and Perceptive Credit, the Perceptive Entities, and Series B Warrants to purchase an aggregate of 970,000 shares of our Series B Preferred Stock held by Perceptive Credit. The number of shares listed as beneficially owned after this offering includes shares to be issued to Perceptive Credit upon the automatic net exercise of the Series B Warrant in connection with this offering , assuming an initial public offering price of $ per share, the midpoint of the estimated price range set forth on the cover page of this prospectus The address for the Perceptive Entities is 51 Astor Place, 10th Floor, New York, NY 10003. |
(4) | Consists of 1,804,657 shares of our common stock held by Redmile Biopharma Investments II, L.P., or Redmile Biopharma, and 767,359 shares of our common stock held by Redmile Private Investments II, L.P., Redmile Investments, and together with Redmile Biopharma, Redmile Entities. Redmile Biopharma Investments II (GP), LLC is the general partner of Redmile Biopharma. Redmile Private Investments II (GP), LLC is the general partner of Redmile Investments. The address for the Redmile Entities is One Letterman Drive, Suite D3-300, San Francisco, CA 94129. |
(5) | Consists of 1,711,276 shares of our common stock held by Stephen Picone, 545,334 shares of our common stock held by the Stephen Picone Trust, of which Mr. Picone and his spouse are trustees, and 100,000 shares of our common stock held by the Picone 2014 Irrevocable Trust, of which Mr. Picone’s spouse is trustee. The address for Mr. Picone is 507 Valley View Dr., Boulder, CO 80304. |
(6) | Consists of 1,044,610 shares of our common stock held by Boulder Ventures VII, L.P., or BV VII, and 1,032,376 shares of our common stock held by Boulder Ventures VI, L.P., or BV VI, and together with BV II, or BV Entities. BV Partners VII, LLC, or BVP VII, is the general partner of BV VII and BV Partners VI, LLC, or BVP VI, is the general partner of BV VI. BVP VII may be deemed to indirectly beneficially own the shares owned by BV VII and BVP VI and may be deemed to indirectly own the shares of BV VI. Kyle A. Lefkoff, a member of our board, Peter A. Roshko and Jonathan L. Perl are managing members of BVP VII and Mr. Lefkoff, Mr. Roshko and |
(7) | Includes 250,000 shares Dr. Myers has the right to acquire through the exercise of stock options within 60 days of May 15, 2020. The number of shares listed as beneficially owned after this offering includes shares to be issued to Dr. Myers pursuant to the terms of the Baby Genes Agreement in connection with this offering. |
(8) | Includes 143,750 shares Mr. Stahl has the right to acquire through the exercise of stock options within 60 days of May 15, 2020. |
(9) | Consists of 9,650 shares Mr. Russell has the right to acquire through the exercise of stock options within 60 days of May 15, 2020. |
(10) | Consists of 6,250 shares Mr. Caruthers has the right to acquire through the exercise of stock options within 60 days of May 15, 2020 and 131,566 shares of our common stock held by the J.P. Morgan Trust Company of Delaware, Trustee of The Marvin H. Caruthers 2008 Irrevocable Trust of which Mr. Caruthers is trustee. |
(11) | Consists of 261,636 shares Mr. Kafka has the right to acquire through the exercise of stock options within 60 days of May 15, 2020. |
(12) | Consists of 360,082 shares of our common stock held by BKB Growth Investments LLC, or BKB Growth, 1,331,598 shares of our common stock held by PBM and 5,219,043 shares of our common stock held by Enzymatics. Tiger Lily Capital, LLC is the manager of BKB Growth. Paul B. Manning, one of our directors, and Bradford Manning are managers of Tiger Lily Capital, LLC, and each share voting and dispositive power over the shares held by BKB Growth. Paul B. Manning, a manager of PBM, may be deemed to indirectly own the shares held by PBM. Mr. Manning, Ian Ratcliffe and Robert Harding are members of Enzymatics, and each may be deemed to indirectly own the shares held by Enzymatics. |
(13) | Includes 671,286 shares issuable upon exercise of stock options exercisable within 60 days of May 15, 2020 and 10,424,971 shares of common stock held by our current directors and executive officers, including Jason Myers, Joshua Stahl, Britton Russel, Marvin Caruthers, Steve Kafka, Kyle Lefkoff, Paul Manning and Jason Ryan.. The number of shares listed as beneficially owned after this offering includes shares to be issued to Dr. Myers pursuant to the terms of the Baby Genes Agreement in connection with this offering. |
• | shares are designated common stock; and |
• | shares are designated preferred stock. |
• | permit our board of directors to issue up to shares of preferred stock, with any rights, preferences and privileges as they may designate, including the right to approve an acquisition or other change of control; |
• | provide that the authorized number of directors may be changed only by resolution of our board of directors; |
• | provide that, effective on the completion of this offering, our board of directors will be divided into three classes with staggered three-year terms; |
• | provide that all vacancies, including newly created directorships, may, except as otherwise required by law, be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum; |
• | provide that, subject to the rights of any series of preferred stock to elect directors, directors may only be removed for cause, which removal may be effected, subject to any limitation imposed by law, by the holders of at least 66 2/3% of the voting power of all of our then-outstanding shares of the capital stock entitled to vote generally at an election of directors; |
• | allow for stockholder actions only at a duly called meeting of stockholders, and not be taken by written consent or electronic transmission; |
• | provide that special meeting of stockholders may be called by a majority of our board of directors, the chair of our board of directors, our chief executive officer or our lead independent director; |
• | include an advance notice procedure for stockholder proposals to be brought before an annual meeting of our stockholders, including proposed nominations of persons for election to our board of directors. |
• | 1% of the number of common stock then outstanding, which will equal approximately shares immediately after this offering, assuming no exercise of the underwriters’ option to purchase additional shares of common stock from us; or |
• | the average weekly trading volume of our common stock on the during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation or other entity treated as a corporation for U.S. federal income tax purposes created or organized in or under the laws of the United States, any state thereof, or the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or |
• | a trust if it (1) is subject to the primary supervision of a court within the United States and one or more U.S. persons have the authority to control all substantial decisions of the trust or (2) has a valid election in effect under applicable U.S. Treasury Regulations to be treated as a U.S. person. |
Name | Number of Shares | |
J.P. Morgan Securities LLC | ||
BofA Securities, Inc. | ||
Stifel, Nicolaus & Company, Inc. | ||
Evercore Group LLC | ||
Total | ||
Without option to purchase additional shares exercise | With full option to purchase additional shares exercise | ||
Per Share | $ | $ | |
Total | $ | $ | |
• | the information set forth in this prospectus and otherwise available to the representatives; |
• | our prospects and the history and prospects for the industry in which we compete; |
• | an assessment of our management; |
• | our prospects for future earnings; |
• | the general condition of the securities markets at the time of this offering; |
• | the recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and |
• | other factors deemed relevant by the underwriters and us. |
(a) | to any legal entity which is a qualified investor as defined under the Prospectus Regulation; |
(b) | to fewer than 150 natural or legal persons (other than qualified investors as defined under the Prospectus Regulation); or |
(c) | in any other circumstances falling within Article 1(4) of the Prospectus Regulation, |
(a) | a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or |
(b) | a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, |
(c) | to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; |
(d) | where no consideration is or will be given for the transfer; |
(e) | where the transfer is by operation of law; or |
(f) | as specified in Section 276(7) of the SFA. |
Page | |
Page | |
/s/ Ernst & Young LLP |
December 31, | |||||||
2018 | 2019 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 9,324 | $ | 59,492 | |||
Accounts receivable, net | 6,743 | 15,354 | |||||
Inventories | 2,506 | 6,002 | |||||
Prepaid expenses and other current assets | 658 | 2,442 | |||||
Total current assets | 19,231 | 83,290 | |||||
Property and equipment, net | 2,813 | 10,811 | |||||
Right-of-use assets, net | — | 4,813 | |||||
Intangible assets, net | 1,755 | 780 | |||||
Goodwill | 5,453 | 4,972 | |||||
Restricted cash | 150 | — | |||||
Other assets | 73 | 2,130 | |||||
Total assets | $ | 29,475 | $ | 106,796 | |||
LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT | |||||||
Current liabilities | |||||||
Accounts payable | $ | 3,540 | $ | 5,657 | |||
Accrued expenses | 1,193 | 2,025 | |||||
Accrued compensation | 595 | 2,824 | |||||
Lease liabilities | — | 577 | |||||
Other current liabilities | 27 | 1,060 | |||||
Deferred revenue | 3,704 | 6,234 | |||||
Total current liabilities | 9,059 | 18,377 | |||||
Long-term lease liabilities - less current portion | — | 4,310 | |||||
Long-term debt, net | — | 28,572 | |||||
Other long-term liabilities | 3,331 | 10,622 | |||||
Total liabilities | 12,390 | 61,881 | |||||
Commitments and contingencies (Note 16) | |||||||
Convertible preferred stock, $0.001 par value, 15,000,000, 28,293,525 and shares authorized, 12,478,816, 25,016,897 and no shares issued and outstanding with aggregate liquidation preference of $44,413, $114,397 and none as of December 31, 2018, 2019 and unaudited pro forma, respectively | 42,180 | 110,154 | |||||
Stockholders’ deficit: | |||||||
Common stock, $0.01 par value, 30,000,000, 45,000,000 and shares authorized, 9,061,008, 9,169,657 and shares issued and outstanding as of December 31, 2018, 2019 and unaudited pro forma, respectively | 91 | 92 | |||||
Additional paid‑in capital | 3,079 | 3,912 | |||||
Accumulated deficit | (28,265 | ) | (69,243 | ) | |||
Total stockholders’ equity (deficit) | (25,095 | ) | (65,239 | ) | |||
Total liabilities, convertible preferred stock, and stockholders’ deficit | $ | 29,475 | $ | 106,796 | |||
Year Ended December 31, | |||||||
2018 | 2019 | ||||||
Revenue | |||||||
Precision oncology products | $ | 16,025 | $ | 22,644 | |||
Pharma development services | 12,429 | 27,921 | |||||
Total revenue | 28,454 | 50,565 | |||||
Costs & operating expenses | |||||||
Cost of precision oncology products | 4,033 | 7,335 | |||||
Cost of pharma development services | 6,230 | 9,212 | |||||
Sales and marketing | 7,215 | 15,428 | |||||
Research and development | 8,184 | 34,172 | |||||
General and administrative | 7,700 | 15,875 | |||||
Contingent consideration | — | 5,768 | |||||
Total operating expenses | 33,362 | 87,790 | |||||
Loss from operations | (4,908 | ) | (37,225 | ) | |||
Interest expense, net | (1,160 | ) | (2,432 | ) | |||
Other income (expense), net | 34 | (824 | ) | ||||
Loss before income taxes | (6,034 | ) | (40,481 | ) | |||
Income tax (benefit) expense | (481 | ) | 497 | ||||
Net loss and comprehensive loss | $ | (5,553 | ) | $ | (40,978 | ) | |
Basic and diluted loss per common share | $ | (0.61 | ) | $ | (4.50 | ) | |
Basic and diluted weighted-average common shares outstanding | 9,059,508 | 9,113,833 | |||||
Pro forma basic and diluted loss per common share | |||||||
Pro forma basic and diluted weighted-average common shares outstanding | |||||||
Convertible Preferred Stock | Common Stock | Additional Paid‑In Capital | Accumulated Deficit | Total Stockholders’ Deficit | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Balance - January 1, 2018 | — | — | 9,061,008 | $ | 91 | $ | 2,806 | $ | (22,712 | ) | $ | (19,815 | ) | |||||||||||||
Issuance of Series A convertible preferred stock for cash and conversion of debt, net of issuance costs of $206 | 11,031,178 | 37,436 | — | — | — | — | — | |||||||||||||||||||
Issuance of Series A convertible preferred stock as merger consideration | 1,447,638 | 4,744 | — | — | — | — | — | |||||||||||||||||||
Issuance of common stock options as merger consideration | — | — | — | — | 47 | — | 47 | |||||||||||||||||||
Repurchase of restricted stock | — | — | (3,000 | ) | — | — | — | — | ||||||||||||||||||
Stock-based compensation expense | — | — | — | — | 226 | — | 226 | |||||||||||||||||||
Net loss | — | — | — | — | — | (5,553 | ) | (5,553 | ) | |||||||||||||||||
Balance - December 31, 2018 | 12,478,816 | 42,180 | 9,058,008 | 91 | 3,079 | (28,265 | ) | (25,095 | ) | |||||||||||||||||
Issuance of Series B and Series C convertible preferred stock for cash, net of issuance costs of $2,010 | 12,542,743 | 67,990 | — | — | — | — | — | |||||||||||||||||||
Repurchase of Series A convertible preferred stock | (4,662 | ) | (16 | ) | — | — | — | — | — | |||||||||||||||||
Stock-based compensation expense | — | — | — | — | 751 | — | 751 | |||||||||||||||||||
Proceeds from exercise of stock options | — | — | 111,649 | 1 | 82 | — | 83 | |||||||||||||||||||
Net loss | — | — | — | — | — | (40,978 | ) | (40,978 | ) | |||||||||||||||||
Balance - December 31, 2019 | 25,016,897 | $ | 110,154 | 9,169,657 | $ | 92 | $ | 3,912 | $ | (69,243 | ) | $ | (65,239 | ) | ||||||||||||
For the Years Ended December 31, | |||||||
2018 | 2019 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (5,553 | ) | $ | (40,978 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||||||
Depreciation and amortization | 849 | 2,687 | |||||
Amortization of debt issuance costs and debt extinguishment | 739 | 197 | |||||
Bad debt expense | 60 | (60 | ) | ||||
Stock-based compensation expense | 226 | 751 | |||||
Change in fair value of contingent consideration | — | 5,768 | |||||
Change in fair value of convertible preferred stock warrants | (64 | ) | 802 | ||||
Change in allowance for obsolete inventory | 188 | 37 | |||||
Deferred tax (benefit) expense | (481 | ) | 481 | ||||
Changes in assets and liabilities | |||||||
Accounts receivable | (3,030 | ) | (8,551 | ) | |||
Inventories | (1,142 | ) | (3,533 | ) | |||
Prepaid expenses and other assets | (302 | ) | (4,464 | ) | |||
Accounts payable and accrued liabilities | 2,218 | 6,833 | |||||
Lease liabilities | — | 45 | |||||
Deferred revenue | 1,704 | 2,531 | |||||
Deferred rent | (15 | ) | — | ||||
Net cash used in operating activities | (4,603 | ) | (37,454 | ) | |||
Cash flows from investing activities | |||||||
Purchase of property and equipment | (2,324 | ) | (9,710 | ) | |||
Cash acquired in merger transaction | 346 | — | |||||
Net cash used in investing activities | (1,978 | ) | (9,710 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from issuance of convertible preferred stock, net of issuance costs | 14,793 | 67,990 | |||||
Proceeds from borrowing under credit facility, net of issuance costs | — | 29,125 | |||||
Repayment of related party debt | (1,250 | ) | — | ||||
Payments on capital lease obligations | (15 | ) | — | ||||
Proceeds from exercise of stock options | — | 83 | |||||
Repurchase of Series A convertible preferred stock | — | (16 | ) | ||||
Net cash provided by financing activities | 13,528 | 97,182 | |||||
Net increase in cash, cash equivalents, and restricted cash | 6,947 | 50,018 | |||||
Cash, cash equivalents, and restricted cash at beginning of year | 2,527 | 9,474 | |||||
Cash, cash equivalents, and restricted cash at end of year | $ | 9,474 | $ | 59,492 | |||
Non-cash financing activities: | |||||||
Conversion of convertible debt and accrued interest into convertible preferred stock | $ | 22,642 | $ | — | |||
Issuance of warrant with credit facility | $ | — | $ | 750 | |||
Issuance of convertible preferred stock for merger consideration | $ | 4,745 | $ | — | |||
December 31, | |||||||
2018 | 2019 | ||||||
Cash and cash equivalents | $ | 9,324 | $ | 59,492 | |||
Restricted cash | 150 | — | |||||
Total cash and cash equivalents and restrictions | $ | 9,474 | $ | 59,492 | |||
December 31, | |||||||
2018 | 2019 | ||||||
United States | $ | 16,565 | $ | 18,069 | |||
International | 11,889 | 32,496 | |||||
Total revenue | $ | 28,454 | $ | 50,565 | |||
Revenue for the Year Ended December 31 | Accounts Receivable as of December 31 | ||||||||||
2018 | 2019 | 2018 | 2019 | ||||||||
Customer A(1) | 22 | % | 5 | % | 13 | % | 2 | % | |||
Customer B(1) | 20 | % | 44 | % | 25 | % | 42 | % | |||
(1) | The country of headquarters of Customer A is the US, and the country of headquarters of Customer B is Germany. |
Property and Equipment | Estimated Useful Life | |
Furniture and fixtures | 7 years | |
Manufacturing and lab equipment | 5 years | |
Computer equipment | 3 years | |
Leasehold improvements | Lesser of estimated useful life or remaining lease term | |
December 31, | |||||||
2018 | 2019 | ||||||
Deferred revenue, beginning balance | $ | 2,000 | $ | 3,704 | |||
Plus deferred revenue added during the year | 4,388 | 9,601 | |||||
Less revenue recognized from deferred revenue during the year | (2,684 | ) | (7,071 | ) | |||
Deferred revenue, ending balance | $ | 3,704 | $ | 6,234 | |||
Consideration | |||
Series A convertible preferred stock | $ | 4,745 | |
Net working capital adjustment paid in cash | 81 | ||
Common stock options issued for vested Baby Genes options | 47 | ||
Contingent consideration | 2,559 | ||
Fair value of total consideration transferred | $ | 7,432 | |
Recognized amounts of identifiable assets acquired and liabilities assumed | |||
Cash | $ | 346 | |
Other current assets | 228 | ||
Property and equipment, net | 80 | ||
Intangible assets | 1,929 | ||
Total assets acquired | 2,583 | ||
Current liabilities | (123 | ) | |
Total liabilities assumed | (123 | ) | |
Total identifiable net assets | 2,460 | ||
Goodwill | $ | 4,972 | |
Unaudited Pro Forma Financial Information | |||
Revenue | $ | 29,151 | |
Net loss and comprehensive loss | $ | (6,087 | ) |
Basic and diluted loss per share | $ | (0.67 | ) |
Level 1 | Level 2 | Level 3 | |||||||
December 31, 2018 | |||||||||
Assets: | |||||||||
Money market accounts | $ | 80 | — | ||||||
Liabilities: | |||||||||
Warrant liability | — | — | $ | (742 | ) | ||||
Contingent consideration | — | — | $ | (2,559 | ) | ||||
December 31, 2019 | |||||||||
Assets: | |||||||||
Money market accounts | $ | 43,154 | — | — | |||||
Liabilities: | |||||||||
Warrant liabilities | — | — | $ | (2,295 | ) | ||||
Contingent consideration | $ | (8,327 | ) | ||||||
Convertible Preferred Stock Warrants | Contingent Consideration | ||||||
Balance as of December 31, 2017 | $ | 806 | $ | — | |||
Exchange for Series A convertible preferred stock warrant | — | — | |||||
Change in fair value of Series A convertible preferred stock warrant | (64 | ) | — | ||||
Addition of contingent consideration | — | 2,559 | |||||
Balance as of December 31, 2018 | 742 | 2,559 | |||||
Issuance of Series B convertible preferred stock warrant | 750 | — | |||||
Change in fair value of Series A and B convertible preferred stock warrants | 803 | — | |||||
Change in fair value of contingent consideration | — | 5,768 | |||||
Balance as of December 31, 2019 | $ | 2,295 | $ | 8,327 | |||
December 31, | |||||||
2018 | 2019 | ||||||
Raw materials | $ | 1,966 | $ | 3,640 | |||
Work in process | 149 | 1,412 | |||||
Finished goods | 391 | 950 | |||||
Total inventories | $ | 2,506 | $ | 6,002 | |||
December 31, | |||||||
2018 | 2019 | ||||||
Manufacturing and lab equipment | $ | 4,136 | $ | 12,125 | |||
Office equipment | 490 | 1,490 | |||||
Leasehold improvements | 105 | 421 | |||||
Construction in progress | — | 405 | |||||
Property and equipment, gross | 4,731 | 14,441 | |||||
Less accumulated depreciation and amortization | (1,918 | ) | (3,630 | ) | |||
Property and equipment, net | $ | 2,813 | $ | 10,811 | |||
Estimated Useful Life in Years | December 31, | ||||||||
2018 | 2019 | ||||||||
Permits and licenses | 0.8 | $ | 898 | $ | 898 | ||||
Trade name | 7.0 | 606 | 606 | ||||||
Non-competition agreement | 0.8 | 518 | 518 | ||||||
Intangible assets, gross | 2,022 | 2,022 | |||||||
Less accumulated amortization | (267 | ) | (1,242 | ) | |||||
Intangible assets, net | $ | 1,755 | $ | 780 | |||||
Year Ending December 31, | |||
2020 | $ | 315 | |
2021 | $ | 95 | |
2022 | $ | 95 | |
2023 | $ | 95 | |
2024 | $ | 95 | |
Thereafter | $ | 85 | |
| Year Ended December 31, | ||
| 2019 | ||
Lease cost | | ||
Operating lease cost | $ | 1,062 | |
Variable lease cost | 94 | ||
Total lease cost | $ | 1,156 | |
| |||
Operating cash outflows from operating leases | $ | 1,156 | |
| December 31, 2019 |
Weighted-average remaining lease term (years) | 5.0 |
Weighted-average discount rate | 8% |
Year Ending December 31, | |||
2020 | $ | 953 | |
2021 | 1,182 | ||
2022 | 1,239 | ||
2023 | 1,272 | ||
2024 | 1,283 | ||
Thereafter | 105 | ||
Present value adjustment | (1,147 | ) | |
Total present value of lease payments | $ | 4,887 | |
Year Ended December 31, | |||||||
2018 | 2019 | ||||||
(in thousands) | |||||||
Tax at the federal statutory rate | $ | (1,278 | ) | $ | (8,501 | ) | |
Stock-based compensation | 39 | 118 | |||||
Research and development credits | (444 | ) | (65 | ) | |||
Change in valuation allowance | 418 | 9,260 | |||||
State taxes, net of federal benefits | (223 | ) | (1,520 | ) | |||
Fair value of contingent consideration | — | 1,211 | |||||
Return to provision adjustment | 1,007 | — | |||||
Other | — | (6 | ) | ||||
Total provision (benefit) for income taxes | $ | (481 | ) | $ | 497 | ||
Year Ended December 31, | |||||||
2018 | 2019 | ||||||
(in thousands) | |||||||
Current: | |||||||
Federal | $ | — | $ | — | |||
State | — | 16 | |||||
Total current tax expense | — | 16 | |||||
Deferred: | |||||||
Federal | (405 | ) | 405 | ||||
State | (76 | ) | 76 | ||||
Total deferred tax expense | (481 | ) | 481 | ||||
Total provision for income taxes | $ | (481 | ) | $ | 497 | ||
December 31, | |||||||
2018 | 2019 | ||||||
(in thousands) | |||||||
Deferred tax assets: | |||||||
Net operating loss carryforward | $ | 5,271 | $ | 14,589 | |||
Tax credit carryforwards | 861 | 926 | |||||
Inventory | 112 | 120 | |||||
Accrued expenses | 82 | 372 | |||||
Deferred revenue | 499 | — | |||||
Lease liability | — | 1,250 | |||||
Other | 56 | 89 | |||||
Total deferred tax assets | 6,881 | 17,346 | |||||
Valuation allowance | (6,377 | ) | (15,747 | ) | |||
Deferred tax assets, net of valuation allowance | 504 | 1,599 | |||||
Deferred tax liabilities: | |||||||
Property, plant and equipment | (83 | ) | (184 | ) | |||
Right of use asset | — | (1,231 | ) | ||||
Intangible assets | (421 | ) | (184 | ) | |||
Total deferred tax liabilities | (504 | ) | (1,599 | ) | |||
Net deferred tax assets | $ | — | $ | — | |||
Series A Convertible Preferred Stock | Series B Convertible Preferred stock | Series C Convertible Preferred stock | ||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||
Balance - January 1, 2018 | — | $ | — | — | $ | — | — | $ | — | |||||||||||
Issuance of Series A convertible preferred stock for cash and conversion of debt, net of issuance costs of $206 | 11,031,178 | 37,436 | — | — | — | — | ||||||||||||||
Issuance of convertible preferred stock as merger consideration | 1,447,638 | 4,744 | — | — | — | — | ||||||||||||||
Balance - December 31, 2018 | 12,478,816 | 42,180 | — | — | — | — | ||||||||||||||
Issuance of Series B convertible preferred stock for cash, net of issuance costs of $1,850 | — | — | 3,112,031 | 13,150 | — | — | ||||||||||||||
Issuance of Series C convertible preferred stock for cash, net of issuance costs of $160 | — | — | — | — | 9,430,712 | 54,840 | ||||||||||||||
Repurchase of Series A convertible preferred stock | (4,662 | ) | (16 | ) | — | — | — | — | ||||||||||||
Balance - December 31, 2019 | 12,474,154 | $ | 42,164 | 3,112,031 | $ | 13,150 | 9,430,712 | $ | 54,840 | |||||||||||
December 31, 2019 | |||||||||||||
Shares Authorized | Shares Issued and Outstanding | Aggregate Liquidation Preference | Net Carrying Value | ||||||||||
(in thousands) | |||||||||||||
Series A | 14,780,767 | 12,474,154 | $ | 44,397 | $ | 42,164 | |||||||
Series B | 4,082,031 | 3,112,031 | 15,000 | 13,150 | |||||||||
Series C | 9,430,727 | 9,430,712 | 55,000 | 54,840 | |||||||||
Total convertible preferred stock | 28,293,525 | 25,016,897 | $ | 114,397 | $ | 110,154 | |||||||
As of December 31, | |||||
2018 | 2019 | ||||
Conversion of outstanding convertible preferred stock | 12,478,816 | 25,016,897 | |||
Conversion of contingent consideration | 2,079,498 | 2,079,498 | |||
Shares underlying outstanding equity awards | 3,627,561 | 6,888,691 | |||
Shares available for future equity award grants | 426,670 | 938,374 | |||
Exercise and conversion of convertible preferred stock warrants | 227,115 | 873,782 | |||
Total | 18,839,660 | 35,797,242 | |||
Stock Options Outstanding | ||||||||||||||||
Shares Available for Grant | Shares Subject to Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Average Intrinsic Value | ||||||||||||
Balance at January 1, 2019 | 415,181 | 1,961,294 | $ | 0.74 | 9.8 | $ | 588 | |||||||||
Shares authorized | 4,010,646 | — | ||||||||||||||
Granted | (3,657,275 | ) | 3,657,275 | $ | 2.54 | |||||||||||
Exercised | — | (113,083 | ) | $ | 0.74 | |||||||||||
Canceled | 169,822 | (169,822 | ) | $ | 0.77 | |||||||||||
Balance at December 31, 2019 | 938,374 | 5,335,664 | $ | 1.98 | 9.3 | $ | 6,800 | |||||||||
Vested at December 31, 2019 | 767,509 | $ | 0.76 | 8.3 | $ | 1,915 | ||||||||||
Year Ended December 31, | |||||||
2018 | 2019 | ||||||
Cost of precision oncology products revenue | $ | 6 | $ | 10 | |||
Sales and marketing expense | 30 | 95 | |||||
Research and development expense | 90 | 94 | |||||
General and administrative expense | 100 | 552 | |||||
Total stock-based compensation expense | $ | 226 | $ | 751 | |||
Year Ended December 31, | |||||
2018 | 2019 | ||||
Expected term (in years) | 6-7 | 6-7 | |||
Expected volatility | 80 | % | 80 | % | |
Risk-free interest rate | 2.69 | % | 1.92 | % | |
Expected dividend yield | — | — | |||
• | Expected Term. The expected term represents the period that the options granted are expected to be outstanding. After the adoption of ASU 2018-07 on January 1, 2019, the expected term of stock options issued to employees and nonemployee consultants is determined using the simplified method (based on the mid-point between the vesting date and the end of the contractual term) as the Company has concluded that its stock option exercise history does not provide a reasonable basis upon which to estimate expected term. Prior to the adoption of ASU 2018-07, the expected term of stock options issued to employees was determined using the simplified method. |
• | Expected Volatility. Given that the Company’s common stock is privately held, there is no active trading market for the Company’s common stock. The Company derived the expected volatility from the average historical volatilities over a period approximately equal to the expected term of comparable publicly traded companies within its peer group that were deemed to be representative of future stock price trends as the Company has limited trading history for its common stock. |
• | Risk-Free Interest Rate. The risk-free interest rate is based on the U.S. Treasury rate, with maturities similar to the expected term of the stock options. |
• | Expected Dividend Yield. The Company does not anticipate paying any dividends in the foreseeable future and, therefore, uses an expected dividend yield of zero. |
| For The Year Ended December 31, | ||||
| 2018 | 2019 | |||
Common shares under option plans | 3,684 | 7,380 | |||
Convertible preferred stock and warrants | 12,706 | 25,891 | |||
Total potential dilutive shares | 16,390 | 33,271 | |||
December 31, | March 31, | ||||||||
2019 | 2020 | Proforma as of March 31, 2020 | |||||||
ASSETS | |||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 59,492 | $ | 36,842 | |||||
Accounts receivable, net | 15,354 | 15,863 | |||||||
Inventories | 6,002 | 8,778 | |||||||
Prepaid expenses and other current assets | 2,442 | 4,799 | |||||||
Total current assets | 83,290 | 66,282 | |||||||
Property and equipment, net | 10,811 | 16,343 | |||||||
Right-of-use assets, net | 4,813 | 5,119 | |||||||
Intangible assets, net | 780 | 537 | |||||||
Goodwill | 4,972 | 4,972 | |||||||
Other assets | 2,130 | 4,250 | |||||||
Total assets | $ | 106,796 | $ | 97,503 | |||||
LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT | |||||||||
Current liabilities | |||||||||
Accounts payable | $ | 5,657 | $ | 16,227 | |||||
Accrued expenses | 2,025 | 2,112 | |||||||
Accrued compensation | 2,824 | 1,486 | |||||||
Lease liabilities | 577 | 1,191 | |||||||
Other current liabilities | 1,060 | 5,167 | |||||||
Deferred revenue | 6,234 | 4,949 | |||||||
Total current liabilities | 18,377 | 31,132 | |||||||
Long-term lease liabilities - less current portion | 4,310 | 4,248 | |||||||
Long-term debt, net | 28,572 | 28,659 | |||||||
Other long-term liabilities | 10,622 | 2,238 | |||||||
Total liabilities | 61,881 | 66,277 | |||||||
Commitments and contingencies (Note 15) | |||||||||
Convertible preferred stock, $0.001 par value, 28,293,525 shares authorized, 25,016,897 and 26,130,896 shares issued and outstanding with aggregate liquidation preference of $114,397 and $118,362 as of December 31, 2019 and March 31, 2020, respectively | 110,154 | 115,347 | |||||||
Stockholders’ deficit: | |||||||||
Common stock, $0.01 par value, 45,000,000 shares authorized, 9,169,657 and 9,246,778 shares issued and outstanding as of December 31, 2019 and March 31, 2020, respectively | 92 | 92 | |||||||
Additional paid‑in capital | 3,912 | 4,347 | |||||||
Accumulated deficit | (69,243 | ) | (88,560 | ) | |||||
Total stockholders’ deficit | $ | (65,239 | ) | $ | (84,121 | ) | |||
Total liabilities, convertible preferred stock, and stockholders’ deficit | $ | 106,796 | $ | 97,503 | |||||
Three months ended March 31, | |||||||
2019 | 2020 | ||||||
Revenue | |||||||
Precision oncology products | $ | 4,380 | $ | 7,006 | |||
Pharma development services | 5,069 | 7,784 | |||||
Total revenue | 9,449 | 14,790 | |||||
Operating expenses | |||||||
Cost of precision oncology products | 1,068 | 2,313 | |||||
Cost of pharma development services | 1,706 | 3,399 | |||||
Sales and marketing | 2,644 | 5,324 | |||||
Research and development | 4,295 | 13,737 | |||||
General and administrative | 2,377 | 7,481 | |||||
Contingent consideration | 2,716 | (35 | ) | ||||
Total operating expenses | 14,806 | 32,219 | |||||
Loss from operations | (5,357 | ) | (17,429 | ) | |||
Interest expense, net | — | (893 | ) | ||||
Other expense, net | (8 | ) | (995 | ) | |||
Loss before income taxes | (5,365 | ) | (19,317 | ) | |||
Income tax expense | 1 | — | |||||
Net loss and comprehensive loss | $ | (5,366 | ) | $ | (19,317 | ) | |
Basic and diluted loss per common share | $ | (0.59 | ) | $ | (2.10 | ) | |
Basic and diluted weighted-average common shares outstanding | 9,059,703 | 9,196,159 | |||||
Pro forma basic and diluted loss per common share | |||||||
Pro forma basic and diluted weighted-average common shares outstanding | |||||||
Convertible Preferred Stock | Common Stock | Additional Paid‑In Capital | Accumulated Deficit | Total Stockholders’ Deficit | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Balance - January 1, 2019 | 12,478,816 | $ | 42,180 | 9,058,008 | $ | 91 | $ | 3,079 | $ | (28,265 | ) | $ | (25,095 | ) | ||||||||||||
Proceeds from exercise of stock options | — | — | 2,518 | — | 2 | — | 2 | |||||||||||||||||||
Repurchase of restricted stock | — | — | (1,275 | ) | — | (1 | ) | — | (1 | ) | ||||||||||||||||
Repurchase of Series A preferred stock | (3,762 | ) | (13 | ) | — | — | — | — | — | |||||||||||||||||
Stock-based compensation expense | — | — | — | — | 68 | — | 68 | |||||||||||||||||||
Net loss | — | — | — | — | — | (5,366 | ) | (5,366 | ) | |||||||||||||||||
Balance - March 31, 2019 | 12,475,054 | $ | 42,167 | 9,059,251 | $ | 91 | $ | 3,148 | $ | (33,631 | ) | $ | (30,392 | ) | ||||||||||||
Balance - January 1, 2020 | 25,016,897 | $ | 110,154 | 9,169,657 | $ | 92 | $ | 3,912 | $ | (69,243 | ) | $ | (65,239 | ) | ||||||||||||
Issuance of Series A convertible preferred stock for Baby Genes earnout | 886,884 | 4,142 | — | — | — | — | $ | — | ||||||||||||||||||
Warrant Exercise of Series A convertible preferred stock | 227,115 | 1,051 | — | — | — | — | — | |||||||||||||||||||
Stock-based compensation expense | — | — | — | — | 378 | — | 378 | |||||||||||||||||||
Proceeds from exercise of stock options | — | — | 77,121 | — | 57 | — | 57 | |||||||||||||||||||
Net loss | — | — | — | — | — | (19,317 | ) | (19,317 | ) | |||||||||||||||||
Balance - March 31, 2020 | 26,130,896 | $ | 115,347 | 9,246,778 | $ | 92 | $ | 4,347 | $ | (88,560 | ) | $ | (84,121 | ) | ||||||||||||
Three months ended March 31, | |||||||
2019 | 2020 | ||||||
Cash flows from operating activities | |||||||
Net loss | $ | (5,366 | ) | $ | (19,317 | ) | |
Adjustments to reconcile net loss to net cash used in operating activities | |||||||
Depreciation and amortization | 474 | 1,095 | |||||
Amortization of debt issuance costs | — | 87 | |||||
Bad debt expense (recovery) | (55 | ) | 6 | ||||
Stock-based compensation expense | 68 | 378 | |||||
Change in fair value of contingent consideration | 2,716 | (35 | ) | ||||
Change in fair value of convertible preferred stock warrants | — | 992 | |||||
Changes in assets and liabilities | |||||||
Accounts receivable | 43 | (515 | ) | ||||
Inventories | (922 | ) | (2,776 | ) | |||
Prepaid expenses and other assets | (261 | ) | (4,078 | ) | |||
Accounts payable and accrued liabilities | 19 | 3,442 | |||||
Lease liabilities | (9 | ) | 104 | ||||
Deferred revenue | 1,175 | (1,285 | ) | ||||
Net cash used in operating activities | (2,118 | ) | (21,902 | ) | |||
Cash flows from investing activities | |||||||
Purchase of property and equipment | (236 | ) | (797 | ) | |||
Net cash used in investing activities | (236 | ) | (797 | ) | |||
Cash flows from financing activities | |||||||
Payment of contingent consideration | — | (10 | ) | ||||
Proceeds from exercise of stock options | 2 | 57 | |||||
Repurchase of restricted stock | (1 | ) | — | ||||
Proceeds from exercise of Series A preferred stock warrants | — | 2 | |||||
Repurchase of Series A convertible preferred stock | (13 | ) | — | ||||
Net cash provided by (used in) financing activities | (12 | ) | 49 | ||||
Net decrease in cash and cash equivalents | (2,366 | ) | (22,650 | ) | |||
Cash and cash equivalents at beginning of period | 9,474 | 59,492 | |||||
Cash and cash equivalents at end of period | $ | 7,108 | $ | 36,842 | |||
Non-cash financing activities: | |||||||
Reclassification of Series A preferred stock warrants from liabilities to convertible preferred stock upon exercise | $ | — | $ | 1,049 | |||
Issuance of Series A preferred stock for contingent consideration | $ | — | $ | 4,142 | |||
March 31, | |||||||
2019 | 2020 | ||||||
United States | $ | 4,023 | $ | 4,815 | |||
International | 5,426 | 9,975 | |||||
Total revenue | $ | 9,449 | $ | 14,790 | |||
Revenue for the Three Months Ended March 31 | Accounts Receivable as of | ||||||||||
2019 | 2020 | December 31, 2019 | March 31, 2020 | ||||||||
Customer A(1) | 12 | % | *% | *% | *% | ||||||
Customer B(1) | 38 | % | 32 | % | 41 | % | 24 | % | |||
Customer C(1) | *% | 10 | % | *% | *% | ||||||
Customer D(1) | *% | 10 | % | *% | *% | ||||||
(1) | The country of headquarters of Customer A is the US, the country of headquarters of Customer B and D is Germany, and the country of headquarters for Customer C is the UK |
* | less than 10% |
Property and Equipment | Estimated Useful Life | |
Furniture and fixtures | 7 years | |
Manufacturing and lab equipment | 5 years | |
Computer equipment | 3 years | |
Leasehold improvements | Lesser of estimated useful life or remaining lease term | |
Level 1 | Level 2 | Level 3 | |||||||||
December 31, 2019 | |||||||||||
Assets: | |||||||||||
Money market accounts | $ | 43,154 | — | — | |||||||
Liabilities: | |||||||||||
Warrant liabilities | — | — | $ | (2,295 | ) | ||||||
Contingent consideration | $ | — | $ | — | $ | (8,327 | ) | ||||
March 31, 2020 | |||||||||||
Assets: | |||||||||||
Money market accounts | $ | 32,242 | $ | — | $ | — | |||||
Liabilities: | |||||||||||
Warrant liabilities | $ | — | $ | — | $ | (2,238 | ) | ||||
Contingent consideration | $ | — | $ | — | $ | (4,140 | ) | ||||
Convertible Preferred Stock Warrants | Contingent Consideration | ||||||
Balance as of December 31, 2019 | $ | 2,295 | $ | 8,327 | |||
Issuance of Series A preferred stock for contingent consideration | — | (4,142 | ) | ||||
Cash payment for contingent consideration | — | (10 | ) | ||||
Exercise of preferred stock warrants | (1,049 | ) | — | ||||
Change in fair value | 992 | (35 | ) | ||||
Balance as of March 31, 2020 | $ | 2,238 | $ | 4,140 | |||
December 31, | March 31, | ||||||
2019 | 2020 | ||||||
Raw materials | $ | 3,640 | $ | 4,940 | |||
Work in process | 1,412 | 3,244 | |||||
Finished goods | 950 | 594 | |||||
Total inventories | $ | 6,002 | $ | 8,778 | |||
December 31, | March 31, | ||||||
2019 | 2020 | ||||||
Manufacturing and lab equipment | $ | 12,125 | $ | 17,265 | |||
Office equipment | 1,490 | 1,624 | |||||
Leasehold improvements | 421 | 778 | |||||
Construction in progress | 405 | 1,158 | |||||
Property and equipment, gross | 14,441 | 20,825 | |||||
Less accumulated depreciation | (3,630 | ) | (4,482 | ) | |||
Property and equipment, net | $ | 10,811 | $ | 16,343 | |||
| Three Months Ended March 31, | ||
| 2020 | ||
Operating Lease cost | | ||
Operating lease cost | $ | 440 | |
Variable lease cost | 188 | ||
Operating lease expense | $ | 628 | |
Short-term lease rent expense | $ | 47 | |
Total lease cost | $ | 675 | |
| |||
Operating cash outflows from operating leases | $ | 337 | |
| March 31, 2020 |
Weighted-average remaining lease term (years) | 4.4 |
Weighted-average discount rate | 8% |
Year Ending December 31, | |||
Remaining in 2020 | $ | 1,185 | |
2021 | 1,435 | ||
2022 | 1,239 | ||
2023 | 1,272 | ||
2024 | 1,283 | ||
Thereafter | 105 | ||
Present value adjustment | (1,080 | ) | |
Total present value of lease payments | $ | 5,439 | |
Series A Convertible Preferred Stock | Series B Convertible Preferred stock | Series C Convertible Preferred stock | ||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | |||||||||||||||
Balance - January 1, 2019 | 12,478,816 | $ | 42,180 | — | $ | — | — | $ | — | |||||||||||
Repurchase of Series A convertible preferred stock | (3,762 | ) | (13 | ) | — | — | — | — | ||||||||||||
Balance - March 31, 2019 | 12,475,054 | $ | 42,167 | — | $ | — | — | $ | — | |||||||||||
Balance - January 1, 2020 | 12,474,154 | 42,164 | 3,112,031 | 13,150 | 9,430,712 | 54,840 | ||||||||||||||
Exercise of Series A convertible preferred stock warrants | 227,115 | 1,051 | — | — | — | — | ||||||||||||||
Issuance of Series A convertible preferred stock for contingent consideration | 886,884 | 4,142 | — | — | — | — | ||||||||||||||
Balance - March 31, 2020 | 13,588,153 | $ | 47,357 | 3,112,031 | $ | 13,150 | 9,430,712 | $ | 54,840 | |||||||||||
March 31, 2020 | |||||||||||||
Shares Authorized | Shares Issued and Outstanding | Aggregate Liquidation Preference | Net Carrying Value | ||||||||||
(in thousands) | |||||||||||||
Series A | 14,780,767 | 13,588,153 | $ | 48,362 | $ | 47,357 | |||||||
Series B | 4,082,031 | 3,112,031 | 15,000 | 13,150 | |||||||||
Series C | 9,430,727 | 9,430,712 | 55,000 | 54,840 | |||||||||
Total convertible preferred stock | 28,293,525 | 26,130,896 | $ | 118,362 | $ | 115,347 | |||||||
Equity Upon Exercise | Exercise Price | Expiration Date | December 31, | March 31, | |||||||
2019 | 2020 | ||||||||||
Warrants Issued in 2018 | Series A Preferred | $0.01 | 3/5/28 | 227,115 | — | ||||||
Warrants Issued in 2019 | Series B Preferred | $4.82 | 5/10/26 | 646,667 | 646,667 | ||||||
Total Warrants | 873,782 | 646,667 | |||||||||
Warrants | Weighted Average Stock Price | Weighted Average Remaining Contractual Life (in Years) | ||||||
Balance - January 1, 2020 | 873,782 | $3.57 | 6.8 | |||||
Exercised | (227,115 | ) | 0.01 | |||||
Balance - March 31, 2020 | 646,667 | $4.82 | 6.1 | |||||
As of December 31, | As of March 31, | ||||
2019 | 2020 | ||||
Conversion of outstanding convertible preferred stock | 25,016,897 | 26,130,896 | |||
Conversion of convertible preferred stock issuable for contingent consideration | 2,079,498 | 1,189,749 | |||
Shares underlying outstanding equity awards | 6,888,691 | 5,418,687 | |||
Shares available for future equity award grants | 938,374 | 779,507 | |||
Exercise and conversion of convertible preferred stock warrants | 873,782 | 646,667 | |||
Total | 35,797,242 | 34,165,506 | |||
Stock Options Outstanding | ||||||||||||||||
Shares Available for Grant | Shares Subject to Options Outstanding | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life (Years) | Average Intrinsic Value | ||||||||||||
Balance at December 31, 2019 | 938,374 | 5,335,664 | $ | 1.98 | 9.3 | $ | 6,800 | |||||||||
Shares authorized | — | — | ||||||||||||||
Granted | (944,630 | ) | 944,630 | $ | 3.25 | |||||||||||
Exercised | (75,844 | ) | $ | 0.74 | ||||||||||||
Canceled | 785,763 | (785,763 | ) | $ | 2.29 | |||||||||||
Balance at March 31, 2020 | 779,507 | 5,418,687 | $ | 2.17 | 9.3 | $ | 5,679 | |||||||||
Vested at March 31, 2020 | 927,138 | $ | 0.91 | 8.6 | $ | 2,125 | ||||||||||
Three Months Ended March 31, | |||||||
2019 | 2020 | ||||||
Cost of precision oncology products revenue | $ | 1 | $ | — | |||
Sales and marketing expense | 12 | 11 | |||||
Research and development expense | 14 | 52 | |||||
General and administrative expense | 41 | 315 | |||||
Total stock-based compensation expense | $ | 68 | $ | 378 | |||
Three Months Ended March 31, | |||||
2019 | 2020 | ||||
Expected term (in years) | 6-7 | 6-7 | |||
Expected volatility | 80 | % | 80 | % | |
Risk-free interest rate | 1.92 | % | 1.40 | % | |
Expected dividend yield | — | — | |||
• | Expected Term. The expected term represents the period that the options granted are expected to be outstanding. The expected term of stock options issued to employees and nonemployee consultants is determined based on the mid-point between the vesting date and the end of the contractual term, as the Company concluded that its stock option exercise history does not provide a reasonable basis upon which to estimate expected term. |
• | Expected Volatility. Given that the Company’s common stock is privately held, there is no active trading market for the Company’s common stock. The Company derived the expected volatility from the average historical volatilities over a period approximately equal to the expected term of comparable publicly traded companies within its peer group that were deemed to be representative of future stock price trends as the Company has limited trading history for its common stock. |
• | Risk-Free Interest Rate. The risk-free interest rate is based on the U.S. Treasury rate, with maturities similar to the expected term of the stock options. |
• | Expected Dividend Yield. The Company does not anticipate paying any dividends in the foreseeable future and, therefore, uses an expected dividend yield of zero. |
| Three Months Ended March 31, | ||||||
| 2019 | 2020 | |||||
Numerator: | |||||||
Net loss | $ | (5,366 | ) | $ | (19,317 | ) | |
Denominator: | |||||||
Denominator for basic EPS - Weighted average shares outstanding | 9,059,703 | 9,196,159 | |||||
Dilutive securities | |||||||
Denominator for diluted EPS - Weighted average shares outstanding | 9,059,703 | 9,196,159 | |||||
Earnings per share: | |||||||
Basic and diluted EPS | $ | (0.59 | ) | $ | (2.10 | ) | |
| Three months ended March 31, | ||||
| 2019 | 2020 | |||
Conversion of outstanding convertible preferred stock | 12,474,154 | 26,130,896 | |||
Shares of underlying outstanding equity awards | 2,262,116 | 5,418,687 | |||
Exercise and conversion of convertible preferred stock warrants | 227,115 | 646,667 | |||
Total | 14,963,385 | 32,196,250 | |||
J.P. Morgan | BofA Securities | |
Stifel | Evercore ISI |
SEC registration fee | $ | * |
FINRA filing fee | * | |
Exchange listing fee | * | |
Printing and engraving expenses | * | |
Legal fees and expenses | * | |
Accounting fees and expenses | * | |
Custodian transfer agent and registrar fees | * | |
Miscellaneous | * | |
Total | $ | * |
* | To be filed by amendment. |
(1) | We have granted under our 2015 Plan options to purchase an aggregate of 6,811,556 shares of our common stock to a total of 415 current and former employees, consultants and directors, having exercise prices ranging from $0.74 to $3.25 per share. Options for 198,799 shares of our common stock granted under the 2015 Plan have been exercised at a weighted-average exercise price of $0.74 per share as of May 22, 2020. |
(2) | In March 2018, we issued and sold an aggregate of 11,031,178 shares of our Series A Preferred Stock to 31 accredited investors at a price per share between $3.3216 and $3.5591 for an aggregate purchase price of approximately $37.6 million. |
(3) | In March 2018, we issued a warrant to purchase 227,115 shares of our Series A Preferred Stock, with an exercise price of $0.01 per share, to one holder. On March 13, 2020, the holder exercised the warrant in full. |
(4) | Pursuant to the Baby Genes Merger Agreement: |
• | In October 2018, we issued 1,442,976 shares of our Series A Preferred Stock to 26 accredited investors as partial merger consideration and options to purchase an aggregate of 98,994 shares of our common stock under our 2015 Plan to five former Baby Genes optionholders. |
• | In February 2020, we issued 886,884 shares of our Series A Preferred Stock to these accredited investors due to the achievement of certain earn-out arrangements provided for in the Baby Genes Merger Agreement. |
• | In addition to the 389,749 shares of our Series A Preferred Stock to be issued immediately prior to the closing of this offering, a maximum of an additional 800,000 shares of our common stock may be issued to these accredited investors upon the achievement of certain additional earn-out arrangements provided for in the Baby Genes Merger Agreement. |
(5) | In May 2019, we issued and sold an aggregate of 3,112,031 shares of our Series B Preferred Stock to 26 accredited investors at a price per share of $4.82 for an aggregate purchase price of approximately $15 million. |
(6) | In May 2019, we issued a warrant to purchase an aggregate of 646,667 shares of our Series B Preferred Stock, with an exercise price of $4.82 per share, to one holder. |
(7) | In December 2019, we issued and sold an aggregate of 9,430,712 shares of our Series C Preferred Stock to 37 accredited investors at a price per share of $5.832 for an aggregate purchase price of approximately $55 million. |
(8) | In April 2020, we issued a warrant to purchase an aggregate of 323,333 shares of our Series B Preferred Stock, with an exercise price of $4.82 per share, to one holder. |
(a) | Exhibits. |
(b) | Financial statement schedules. |
(1) | For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance on Rule 430A and contained in a form of prospectus filed by the registrant under Rule 424(b)(1) or (4) or 497(h) under the Securities Act will be deemed to be part of this registration statement as of the time it was declared effective. |
(2) | For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus will be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time will be deemed to be the initial bona fide offering thereof. |
(3) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
(4) | For the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that, in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(a) | any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 under the Securities Act; |
(b) | any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(c) | the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(d) | any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
Exhibit Number | Description | |
1.1* | Form of Underwriting Agreement. | |
3.1* | Amended and Restated Certificate of Incorporation of Registrant, as currently in effect. | |
3.2* | Form of Amended and Restated Certificate of Incorporation of Registrant, to be in effect on the completion of the offering. | |
3.3# | Amended and Restated Bylaws of Registrant, as currently in effect. | |
3.4* | Form of Amended and Restated Bylaws of Registrant, to be in effect on the completion of the offering. | |
4.1* | Form of common stock certificate. | |
4.2# | Form of Warrant to Purchase Series B Preferred Stock issued to Perceptive Credit Holdings II, LP. | |
5.1* | Opinion of Cooley LLP. | |
10.1# | Amended and Restated Investor Rights Agreement, dated December 11, 2019, by and among the Registrant and certain of its stockholders. | |
10.2# | Credit Agreement and Guaranty, dated May 10, 2019, by and among Registrant, ArcherDX Clinical Services, Inc., and Perceptive Credit Holdings II, LP. | |
10.2.1 | Amendment No.1 to Credit Agreement and Guaranty, dated April 27, 2020, by and among Registrant and Perceptive Credit Holdings II, LP | |
10.3+# | ArcherDX, Inc. 2015 Equity Incentive Plan, as amended, and forms of agreements thereunder. | |
10.4+* | ArcherDX, Inc. 2020 Equity Incentive Plan and forms of agreements thereunder. | |
10.5+* | ArcherDX, Inc. 2020 Employee Stock Purchase Plan. | |
10.6# | Standard Form Industrial Building Lease, dated March 6, 2014, between Baby Genes, Inc. and First Industrial, L.P. | |
10.7# | Agreement of Sub-Sublease, dated November 21, 2019, between Registrant and CWB Holdings, Inc. | |
10.8# | Office Lease, dated November 1, 2013, between Registrant and Reef Flatiron LLC. | |
10.9^# | Exclusive Patent License Agreement, dated July 13, 2013, between Registrant and The General Hospital Corporation, d/b/a/ Massachusetts General. | |
10.9.1^# | First Amendment to Exclusive Patent License Agreement, dated August 15, 2016, between Registrant and The General Hospital Corporation. | |
10.9.2^# | Second Amendment to Exclusive Patent License Agreement, dated June 23, 2017, between Registrant and The General Hospital Corporation. | |
10.10^# | Supply and Manufacturing Agreement, dated December 16, 2014, between Registrant and QIAGEN Inc. | |
10.10.1# | Amendment No. 1 to Supply Agreement, dated December 20, 2016, between Registrant and QIAGEN, Inc. | |
10.11^ | IVD Collaboration Agreement, dated May 16, 2016, between Registrant and Illumina, Inc. | |
10.12^ | Master Collaboration Agreement, dated December 6, 2017, between Registrant and Merck KGaA, Darmstadt, Germany. | |
10.13^ | Master CDx Agreement, dated September 19, 2018, between Registrant and Merck KGaA, Darmstadt, Germany. | |
10.14^# | License Agreement, dated March 22, 2019, between Registrant and Becton, Dickinson and Company. |
10.15^ | Master Services Agreement, dated July 24, 2019, between Registrant and AstraZeneca AB (Publ). | |
10.16^ | In Vitro Diagnostics Master Collaboration Agreement, dated April 22, 2020, between Registrant and AstraZeneca UK Limited. | |
10.17* | Offer Letter, dated August 1, 2013, between Enzymatics, Inc. and Jason Myers. | |
10.18# | Service Agreement, dated April 29, 2019, between Registrant and Steven Kafka. | |
23.1* | Consent of Ernst & Young LLP, independent registered public accounting firm. | |
23.2* | Consent of Cooley LLP (included in Exhibit 5.1). | |
24.1* | Power of Attorney (included on signature page). | |
* | To be submitted by amendment. |
+ | Indicates management contract or compensatory plan. |
# | Previously filed. |
^ | Portions of this exhibit have been omitted as the Registrant has determined that the omitted information (i) is not material and (ii) would likely cause competitive harm to the Registrant if publicly disclosed. |
ARCHERDX, INC. | |
By: | |
Name: | |
Title: |
Signature | Title | Date | ||
President, Chief Executive Officer and Director (Principal Executive Officer) | , 2020 | |||
Jason W. Myers | ||||
Senior Vice President, Finance (Principal Financial and Accounting Officer) | , 2020 | |||
Britton A. Russell | ||||
Director | , 2020 | |||
Paul B. Manning | ||||
Director | , 2020 | |||
Steven J. Kafka | ||||
Director | , 2020 | |||
Kyle A. Lefkoff | ||||
Director | , 2020 | |||
Marvin H. Caruthers | ||||
Director | , 2020 | |||
Jason C. Ryan |
If to Illumina: Illumina, Inc. 5200 Illumina Way San Diego, CA 92122 Attn: General Counsel With a copy not constituting notice to: Legalnotices@illumina.com | If to ArcherDx: ArcherDX, Inc. 2477 55th St. # 202 Boulder, CO 80301 Attn: CEO With a copy not constituting notice to: Legal@archerdx.com |
ILLUMINA | ArcherDx | |||
Illumina, Inc. | ArcherDx, Inc. | |||
a Delaware corporation | a Delaware corporation | |||
By: | /s/ Charles M. Moehle | By: | /s/ Jason Myers | |
Name: | Charles M. Moehle | Name: | Jason Myers | |
Title: | VP Business Development & Licensing | Title: | CEO | |
Date: | May 16, 2016 | Date: | May 16, 2016 |
General Scope of IPAs | • ArcherDx has the opportunity to develop a CDx for a pharmaceutical or biotechnology partner and, under a specific IPA, receives support from Illumina. • Development of the IVD Test would be carried out as described by a mutually agreed Development Plan incorporated into the IPA as an Exhibit. • Unless otherwise specified in the Agreement, ArcherDx would be responsible for and take the lead on development, regulatory submissions, and commercialization of the IVD Test. • Illumina would provide reasonable levels of support, related to MiSeqDx instruments and sequencing consumable, for ArcherDx development activities and regulatory submissions. • Illumina would sell MiSeqDx instruments and consumables to ArcherDx for product development. These products may be labelled IUO or IVD depending on their configuration and regulatory status in each jurisdiction. • For commercialization after regulatory approval of IVD Tests, Illumina would sell MiSeqDx instruments and consumables directly to IVD Test end-users and provide primary instrument maintenance and instrument and consumables support. • To allow for appropriate product planning, Illumina would provide at least 6 months’ notice to ArcherDx of voluntary changes in sequencing consumables. • This is a mutually non-exclusive relationship. |
Territory | Worldwide except where prohibited or penalized by applicable law |
Term | 5 years |
Joint Responsibilities to be included in an IPA | • Parties would agree on composition and performance specifications of the IVD Test. Parties would agree on responsibility for technical development activities, and, if Illumina resources are required, the estimated hours needed to complete technical development. • Parties would agree on on-instrument IVD Test execution software requirements and the estimated timing to complete the module for development and clinical studies. • Parties would discuss and agree upon regulatory strategy and regulatory aspects each will provide, and estimated resources needed to complete regulatory filing and approval. • Support estimates would be incorporated into the Development Plan. Initial Illumina resource assumptions (for purposes of Compensation milestones below) are [**] total for a PMA submission. Amendments to the Development Plan, including changed resource requirements, would be by mutual agreement. |
ArcherDx Responsibilities (IPA) | Development • ArcherDx would, at its sole cost, develop the JVD Test. Sequencing instruments and consumables required for development would be purchased from Illumina under Terms and Conditions specified in the IPA. • ArcherDx would, at its sole cost, perform any and all testing and studies necessary in order to commercialize the IVD Test such as analytical or pre-clinical studies, stability studies, and clinical studies. • ArcherDx would, at its sole cost, file regulatory submissions for the IVD Test. Commercialization • ArcherDx would manufacture and sell the IVD Test in Territory. • ArcherDx would provide all product support for the IVD Test components it manufactures. • ArcherDx would direct the end-users of its IVD Test to purchase Illumina’s MiSeqDx instruments and IVD sequencing consumables. • If ArcherDx wishes to implement reagent rental, it may purchase sequencing instruments from Illumina and loan them to its IVD Test end-users. ArcherDx may not resell these instruments nor loan an individual instrument to more than one IVD Test end-user at a time. |
Illumina Responsibilities (IPA) | Development • Illumina, at its sole cost (subject to agreed-upon milestone and overage costs), would provide the development, software and regulatory support as mutually agreed. If ArcherDx has working prototypes for library prep methods and secondary analysis software tools, it is anticipated that the majority of Illumina support would be in the areas of assay-specific MiSeqDx software module development and regulatory support including allowing the necessary access to Illumina instrument software to ArcherDX software developers. • Illumina would sell MiSeqDx consumables to ArcherDx at a [**] discount to then-current list prices for development work. • Illumina would enable ArcherDx to reference Illumina’s design history files and other documents in order to support regulatory submissions. • Illumina will not be required to obtain any new (as of the Effective Date) regulatory clearances/approvals for the MiSeqDx and its consumables unless expressly specified and accounted for in the applicable Development Plan. Commercialization • Illumina would sell the MiSeqDx (or successor) instruments to IVD Test end-users. Illumina would take primary responsibility for instrument maintenance and support. • Illumina would sell lVD sequencing consumables to IVD Test end users, and provide primary support, pursuant to its standard practices. |
Compensation (to be included in IPA) | Milestones* for each IVD Test: • [**] • [**] • [**] o [**] • [**] • [**] • [**] • [**] *Note: These milestones are proposed for first IPA under Collaboration Agreement. Certain subsequent IPA milestones may decrease depending on: use of same Illumina component as prior IPAs; level of customization required for software module from one IPA to another; chosen regulatory path (PMA vs. 510k). |
Alternate Structure | Illumina may also implement an IPA with ArcherDx for development of a CDx test and, in such a scenario, Illumina will pay ArcherDx for development, clinical and validation services performed in such scenario. |
MERCK KGAA | ARCHER | ||||
/s/ [**] | By: | /s/Christian LaPointe | |||
By: | [**] | Name: | Christian LaPointe | ||
Name: | Senior Director | Title: | General Counsel | 12/6/17 | |
Title: | Head of Market Enabling Technologies and Companion Diagnostics | ||||
By: | |||||
Name: | |||||
Title: | |||||
Address for purposes of notification: | Address for purposes of notification: | ||||
/s/[**] | 2477 55th Street | ||||
[**] | Suite 202 | ||||
Rechtsanwalt | Head of Legal | Boulder CO 80301 | ||||
Business Development | |||||
Merck Healthcare | Legal |
MERCK KGAA | ARCHER | |||
By | By | |||
Print Name: | Print Name: | |||
Title: | Title: | |||
duly authorized | duly authorized | |||
Date: | Date: | |||
By | ||||
Print Name: | ||||
Title: | ||||
duly authorized | ||||
Date: |
1. | Processing Operations |
• | [**] |
2. | Data Subjects |
• | [**] |
• | [**] |
• | [**] |
3. | Categories of Data |
• | [**] |
• | [**] |
4. | Special Categories of Data such as Health Data (if applicable)1 |
• | The personal data transferred concern the following categories of sensitive data: |
• | As defined by Controller or alternatively, “No personal data needed..” |
5. | International Transfer |
• | As defined above, no identifiable, personal data will be transferred |
Country | Categories of data | If applicable (otherwise, leave empty): Mechanism to ensure adequate protection instead of EU Standard Contractual Clauses |
6. | Subcontracting |
• | As defined above, no identifiable, personal data will be processed |
Name of Subcontractor | Address | Task to be performed | International transfer (if applicable) |
Please briefly explain processing activities (one or two keywords are sufficient, e.g. data hosting) | Please indicate to which country Personal Data is transferred if Personal Data is transferred to a country/recipient outside the EU/EEA /Switzerland. | ||
7. | Contact Persons |
• | Controller contact to be specified under each subordinate schedule of work |
• | Processor contact to be determined under each subordinate schedule of work |
8. | If the EU Standard Contractual Clauses apply: |
9. | Description of the Technical and Organisational Security Measures according to Section 6.1 of the Data Processing Agreement and according to Appendix 2 of the EU Standard Contractual Clauses (if applicable) |
• | As defined above, no personal data will be transferred to or processed by the Processor. Therefore, for the project in question, the following requirements are marked “N/A”. |
Information Security Program | Implemented? (Yes / No) | |
1. | The Provider appoints one or more security officers responsible for coordinating and monitoring security policies and procedures. | N/A |
2. | Provider personnel with access to personal data are subject to confidentiality obligations. | N/A |
3. | The Provider performs a risk assessment before processing personal data. | N/A |
4. | The Provider provides security training ensuring his personnel are informed of security policies, procedures, and their respective roles. | N/A |
5. | The Provider informs personnel of the possible consequences resulting from not following security policies and procedures. | N/A |
Access Control | Implemented? (Yes / No) | |
1. | The Provider limits access to facilities where information systems that process personal data are located with badge-controlled access for authorized personnel. | N/A |
2. | Provider premises are monitored 24x7 by a security force utilizing CCTV or similar methods at all entry points. | N/A |
3. | Visitors to Providers’ premises must be accompanied by authorized personnel at all times and visits are logged in a visitor register. | N/A |
4. | Provider uses industry best practice security measures to protect against loss of data due to environmental disruptions such as loss of power or other interferences. | N/A |
5. | Provider maintains records of incoming and outgoing media that contain personal data. | N/A |
System Access Control | Implemented? (Yes / No) | |
1. | Provider maintains and updates a list of all authorized users that have access to personal data. | N/A |
2. | Provider has implemented measures to prevent unauthorized personnel from accessing data processing systems. | N/A |
3. | Provider may only grant access to personal data to any third party (except personnel and approved sub-contractors) with prior approval from Merck. | N/A |
4. | If Provider personnel has access to Merck systems, the Provider must inform Merck immediately about the termination of contract with such personnel that have access to Merck systems to enable Merck to initiate the account revocation process. | N/A |
5. | The Processor ensures that access control is supported by an authentication system. | N/A |
Data Access Control | Implemented? (Yes / No) | |
1. | Personal data may only be printed in physically secure areas controlled by the Provider and only shared with personnel on a need to know basis. | N/A |
2. | The access rights of personnel to personal data is restricted to the necessary minimum required for their job functions | N/A |
3. | The Provider has measures in place to prevent use/installation of unauthorized hardware and/or software. | N/A |
4. | The Provider has established rules for the safe and permanent destruction of data that are no longer required. | N/A |
Data Transmission Control | Implemented? (Yes / No) | |
1. | Any personal data stored in media that is leaving Provider’s facilities is encrypted. | N/A |
2. | Personal data is encrypted when transmitted over Provider’s internal network. | N/A |
3. | Personal data is encrypted when transmitted over public networks. | N/A |
Data Input and Job/Order Control | Implemented? (Yes / No) | |
1. | Provider has established logging mechanisms that record data entry and deletion. | N/A |
2. | Provider is logging all activities in the area of data input as for example: • Unsuccessful access attempts; • Authority exceptions; • Privilege changes; • Data object owner changes; • Out of hour’s access. | N/A |
3. | Provider is ensuring that logs are regularly inspected for security incidents. | N/A |
Availability Control | Implemented? (Yes / No) | |
1. | Provider has business continuity plans and is regularly testing the business continuity concepts. | N/A |
2. | Provider implements backup processes and other measures are that ensure rapid restoration of business critical systems as and when necessary. | N/A |
3. | Provider is using uninterrupted power supplies (for example: UPS, batteries, generators, etc.) to ensure power availability to the data centers. | N/A |
4. | Provider has sufficient capacity for data storage. | N/A |
5. | Provider has a disaster recovery plan in place and is regularly testing it. | N/A |
Data Separation Control | Implemented? (Yes / No) | |
1. | Using technical capabilities (for example: multi-tenancy or separate system landscapes) to achieve data separation between Personal Data from one and any other customer. | N/A |
2. | Maintaining dedicated instances for each Customer. | N/A |
3. | Provider’s customers (including their Affiliates) have access only to their own customer instance(s). | N/A |
Workstation Security | Implemented? (Yes / No) | |
1. | Hard disk password for each drive in the device’s BIOS settings is activated. | N/A |
2. | A password protected keyboard/screen lock that is automatically activated by a period of Inactivity is set. The inactivity time interval should be no more than 30 minutes. | N/A |
3. | Monitoring of equipment movement to and from the premises by security personnel and logging of the entries in a software system. | N/A |
4. | Antivirus program is installed and run on the workstation. | N/A |
5. | Desktop firewall program is installed and run on the workstation. | N/A |
6. | Personnel with Workstations using Microsoft Windows operating systems will install security patches for their respective version (but only the patches approved by the Provider’s internal infrastructure team). | N/A |
7. | The password associated with a computer access user ID is the primary means of verifying Identity and subsequently allowing access to the computer and to the information. Identity verification password is kept secret and not shared with anyone else. | N/A |
8. | Identity verification passwords must not be trivial or predictable and must: • Be at least 8 positions in length • Contain a mix of alphabetic and non-alphabetic characters (numbers, punctuation or special characters) or a mix of at least two types of non-alphabetic characters. • Not contain the user ID as part of the password | N/A |
9. | The password must be changed at least once every three months (90 days). | N/A |
Information Security Incident Management | Implemented? (Yes / No) | |
1. | The Provider maintains a record of security incidents with a description of the incident, the time period, the consequences, the name of the reporter or service, to whom the incident was reported, and the remediation. | N/A |
Evaluation and certifications | Implemented? (Yes / No) | |
1. | Does the Provider regularly test and evaluate the effectiveness of his data security measures? Please provide reports of such tests. | N/A |
2. | Did Provider obtain any certification regarding its data security and/or data protection systems and organization such as an ISO 27001 certification? If yes, which certifications? | N/A |
Date: | Place: | |||
Controller/ Processor | ||||
Date: | 12/6/2017 | Place: | Boston, MA | |
/s/ Christian La Pointe | Christian La Pointe | |||
General Counsel |
1 | Definition | 4 |
2 | Subject Matter | 13 |
3 | Master Framework Terms | 16 |
4 | Governance | 16 |
5 | Financials | 22 |
6 | Activities | 25 |
7 | Clinical Trials | 26 |
8 | Access and Exchange of Information and Data | 30 |
9 | Obtaining Regulatory Approval | 32 |
10 | Manufacture and Supply for Development Activities | 36 |
11 | Commercialization | 41 |
12 | Intellectual Property | 45 |
13 | Warranties, Limitation of Liability, Indemnification and Insurance | 49 |
14 | Confidentiality | 52 |
15 | Term and Termination of this Agreement | 53 |
16 | Term and Termination of Project Agreements | 54 |
17 | Anti-Bribery and Anti-Corruption Compliance | 57 |
18 | Miscellaneous | 57 |
1 | Definition |
1.1 | “Activities” shall mean Development Activities and any other activities to be performed by either Party pursuant to a Project Agreement. |
1.2 | “Adverse Event” means any untoward medical occurrence associated with the use of a drug in Subjects, whether or not considered Compound related. |
1.3 | “Affiliate” shall mean any entity that, directly or indirectly (through one or more intermediaries), controls, is controlled by, or is under common control with a Party. For purposes of this Section 1.3, “control” means (a) the direct or indirect ownership of fifty percent (50%) or more (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of the voting stock or other voting interests or interest in the profits of such corporation or other business entity, (b) the ability to otherwise control or direct the decisions of board of directors or equivalent governing body thereof, or (c) the power to direct or cause the direction of the management and policies of such corporation or other business entity, directly or indirectly, whether through ownership of voting securities, by contract or otherwise, but in each case only for so long as such control exists. |
1.4 | “Agreement” shall mean this Agreement and its Exhibits and Attachments. |
1.5 | “Analytical Validation Data” shall mean all the data created in relation to the studies performed to demonstrate technical robustness and standardization of the Assays. |
1.6 | “Analytically Validated Assay” shall mean one or more Assays developed by ArcherDX under a Project Agreement that include all reagents needed to perform each Assay for the detection of the Biomarkers. The Assays shall (a) include the applicable Data Report Form (if required) and (b) be manufactured in compliance with QSR and labeled “Investigational Use Only. The performance characteristics of this product have not been established” or “Performance Evaluation Only. The performance characteristics of this product have not been established”, or “CAUTION - Investigational device. Limited by Federal law to investigational use.” or any equivalent. |
1.7 | “Anti-Corruption Laws” shall have the meaning ascribed to it in Section 17.2. |
1.8 | “Applicable Law(s)” means all applicable laws, statutes, rules, regulations, court orders or injunctions having the effect of law of any federal, national, multinational, supranational, state, provincial, county, city or other political subdivision, agency or other body, domestic or foreign, including any applicable rules, regulations, guidelines or other requirements of Regulatory Authorities that may be in effect from time to time, including GLP, GMP and QSR. |
1.9 | “ArcherDX” shall have the meaning ascribed to it in the first and opening paragraph of this Agreement. |
1.10 | “ArcherDX Claims” shall have the meaning ascribed to it in Section 13.7. |
1.11 | “ArcherDX Data” shall have the meaning ascribed to it in Section 8.4. |
1.12 | “Assay” shall mean the assay to be developed as the companion diagnostic Product under the applicable Project Agreement. |
1.13 | “Background IP” shall mean in connection with a specific Project all Intellectual Property which is (a) owned or otherwise Controlled by a party to the Project Agreement on the effective date of the relevant Project Agreement; or (b) generated or otherwise becomes owned or Controlled by such party after the effective date of the relevant Project Agreement other than Foreground IP. To the extent ArcherDX obtains rights to Blocking Third Party IP after the effective date of the relevant Project Agreement, such rights will be included in ArcherDX’s Background IP. To the extent MRK obtains rights to Blocking Third Party IP after the effective date of the relevant Project Agreement, such rights will be included in MRK’s Background IP. |
1.14 | “Blocking Third Party IP” shall mean, on a country-by-country basis, Intellectual Property owned or Controlled by a Third Party that might block making, having made, using, selling or offering for sale a Product in the absence of a license granted by such Third Party. |
1.15 | “Biomarker” shall mean a specific biomarker, including items such as a specific gene or a specific protein as further defined in each Project Agreement. |
1.16 | “Business Day” shall mean any day other than a Saturday, Sunday, bank holiday or public holiday in Denver, United States of America, or Darmstadt, Germany, or any other holiday in a country in which the obligations are to be performed. |
1.17 | “Change of Control” means, with respect to a Party (a) the acquisition of beneficial ownership, directly or indirectly, by any Third Party (other than by virtue of obtaining irrevocable proxies) of securities or other voting interest of such Party representing a majority or more than fifty percent (50%) of the combined voting power of such Party’s then outstanding securities or other voting interests, (b) any merger, reorganization, consolidation or business combination involving such Party with a Third Party that results in the holders of beneficial ownership (other than by virtue of obtaining irrevocable proxies) of the voting securities or other voting interests of such Party (or, if applicable, the ultimate parent of such Party) immediately prior to such merger, reorganization, consolidation or business combination ceasing to hold beneficial ownership of at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such merger, reorganization, consolidation or business combination, (c) any sale, lease, exchange, contribution or other transfer (in one transaction or a series of related transactions) of all or substantially all of the |
1.18 | “Clinically-Validated Assay” shall mean one or more Assays developed by ArcherDX under a Project Agreement that include all reagents. The Assays are needed to detect a Biomarker and are manufactured under GMP or in substantial compliance with 21 CFR 820, approved by Regulatory Authorities and labeled “In Vitro Diagnostic”, or the equivalent. |
1.19 | “Clinical Trial” shall mean a clinical investigation of a Drug undertaken or supported by MRK as part of the development of such Drug to obtain information relating to patient outcome or selection for treatment, which includes the use of the Product, Prototype Assay or the Analytically-Validated Assay, as the case may be. |
1.20 | “Clinical Trial Protocol” shall mean a written summary description of one or more Clinical Trial(s), which generally includes information on the objectives, design, methodology, statistical considerations and organization of the Clinical Trial (and including amendments to such description). |
1.21 | “Clinical Trial Samples” shall mean human samples in MRK’s possession and Control from a Clinical Trial or other clinical investigation with a Drug undertaken or supported by MRK. |
1.22 | “Commercial Leader” or “CL” shall have the meaning set forth in Section 4.3. |
1.23 | “Commercialization Costs” shall have the meaning ascribed to in Section 11.11. |
1.24 | “Commercialization Plan for the Product” shall mean the plan for commercialization of the Product that will be added to the applicable Project Agreement at least eighteen (18) months prior to the first projected Regulatory Submission for marketing authorization of the Product. The Commercialization Plan for the Product will be prepared by the JCT and approved by the JCT. |
1.25 | “Commercially Reasonable Efforts” shall mean, with respect to a Party, that level of efforts and resources required to carry out a particular task or obligation in an active and sustained manner, and consistent with such efforts undertaken by a similarly situated company in pursuing development or commercialization of a product with similar market potential and at a similar stage in development or commercialization as the Product and taking into account issues of intellectual property position, likelihood of success, product profile, competitiveness of the marketplace and market potential. |
1.26 | “Compound” shall mean a compound which is Controlled by MRK having an association with a Biomarker and for which the Parties agree to start a Project. |
1.27 | “Compound Class” shall mean to comprise one or more compounds which act in a patient following the same mode of action as a Compound. |
1.28 | “Compound Foreground IP” shall mean any and all Foreground IP which [**] relates to (a) the Compound; (b) use of the Compound; (c) new formulations of the Compound; (d) new forms of the Compound; (e) new methods of treatment utilizing the Compound, e.g. new methods of treatment based on selection of patients for treatment or non-treatment with the Compound or Compound Class. |
1.29 | “Confidential Information” shall mean, with respect to each Party, all Know-How or other information, including proprietary information and materials (whether or not patentable) regarding or embodying such Party’s technology, products, business information or objectives, that is communicated by or on behalf of the Disclosing Party to the Receiving Party or its permitted recipients, on or after the Effective Date or that otherwise becomes known to the Receiving Party in accordance with this Agreement or a Project Agreement. Confidential Information does not include any Know-How or other information that the Receiving Party can demonstrate was: |
1.29.1 | generally known by the general public at the time of disclosure to the Receiving Party or at a later stage other than as a result of an act or omission of the Receiving Party in breach of this Agreement, |
1.29.2 | in the possession of the Receiving Party (other than under an obligation of confidentiality to the Disclosing Party) prior to the disclosure by the Disclosing Party, as evidenced by written records, however maintained, |
1.29.3 | acquired by the Receiving Party on a non-confidential basis from a Third Party other than the Disclosing Party, provided that such Third Party to the knowledge of Receiving Party is not prohibited from transmitting the information to the Receiving Party by any contractual or legal obligation, or |
1.29.4 | developed or compiled independently outside this Agreement, as evidenced by written records, however maintained, and without the aid, application or use of Confidential Information received from the Disclosing Party. |
1.30 | “Conflicting Subject Matter” shall have the meaning set forth in Section 12.8.4. |
1.31 | “Control” or “Controlled” shall mean with respect to any intellectual property right or material (including any data or information), the ability (whether by sole, joint or other ownership interest, license or otherwise, other than pursuant to this Agreement) to, without violating the terms of any agreement with a Third Party, grant a license or sublicense or provide access or other right in, to or under such intellectual property right or material. |
1.32 | “Data Report Form” shall mean a data collection tool used in the evaluation of Clinical Trial Samples to support investigators and coordinators in capturing all relevant information on each specimen as required by the applicable protocol. |
1.33 | “Data Report Form Data” shall mean any and all data generated by application of a Prototype Assay or an Analytically Validated Assay on Clinical Trial Samples under the Data Report Form, provided that Data Report Form Data shall not include any correlation data or information pertaining to a Compound or a Drug. |
1.34 | “Development Leader” or “DL” shall have the meaning set forth in Section 4.3. |
1.35 | “Development Activities” shall mean the development activities and deliverables under a Project Agreement pertaining to the development of a Product and obtaining of Regulatory Approval of such Product as specified in the Work Plan and Budget for the relevant Project. Development Activities may include activities such as (i) feasibility studies, (ii) assay generation at a pre-clinical stage, (iii) development of prototype Products, (iv) development of technically validated Products, (v) application of Products in Clinical Trials, (vi) obtaining Regulatory Approval for the Product and Instrument, as applicable and (vii) supply of reagents, kits, automated test platforms and quantitative analysis software applications, as applicable. |
1.36 | “Diagnostic Foreground IP” shall mean any and all Foreground IP which solely and specifically relates to a Product or diagnostic products (IVD class I-III); provided, further, that Diagnostic Foreground IP shall include Foreground IP relating to the Data Report Form, the Data Report Form Data, and Analytical Validation Data. |
1.37 | “Disclosing Party” shall mean the Party which discloses Confidential Information to the other Party under this Agreement or a Project Agreement. |
1.38 | “Drug” shall mean a pharmaceutical product developed by MRK based on a Compound. |
1.39 | “Effective Date” shall mean the date first above written, from which date the Agreement shall be deemed to have effect. |
1.40 | “EURO(S)” shall mean the official currency of the European Economic and Monetary Union (EUR). |
1.41 | “Failure to Distribute” shall mean that ArcherDX is unable, unwilling, or for any reason otherwise fails to distribute, have distributed or otherwise make commercially available, a Product, where such failure results from reasons within ArcherDX’s reasonable control or results from ArcherDX’s failure to use Commercially Reasonable Efforts. Failure to Distribute does not include Failure to Manufacture. |
1.42 | “Failure to Manufacture” shall mean that ArcherDX is unable, unwilling or for any reason otherwise fails to manufacture, or have manufactured, the Product in |
1.43 | “Failure to Supply” shall mean either Failure to Distribute or Failure to Manufacture. |
1.44 | “Final Report” shall mean the final report for each Project Phase to be delivered in accordance with the format agreed to in the Project Agreement. |
1.45 | “Filing Party” shall have the meaning set forth in Section 12.8.2. |
1.46 | “First Filed Application” shall have the meaning set forth in Section 12.8.5. |
1.47 | “Foreground IP” shall mean any and all Intellectual Property arising from work performed under a Project Agreement during the term of such Project Agreement whether conceived, discovered, reduced to practice, generated or developed by the employees, agents or consultants of MRK or its Affiliates or by the employees, agents or consultants of ArcherDX or its Affiliates, solely or jointly. |
1.48 | “GLP” shall mean Good Laboratory Practice. |
1.49 | “GMP” shall mean Good Manufacturing Practice. |
1.50 | “ICH” shall mean International Conference on Harmonization. |
1.51 | “IDE” shall mean an investigational device exemption for a medical device as described in 21 Code of Federal Regulations (CFR) 812. |
1.52 | “Indemnified Party” shall have the meaning set forth in Section 13.8. |
1.53 | “Indemnifying Party” shall have the meaning set forth in Section 13.8. |
1.54 | “Independent Laboratory” shall have the meaning ascribed to it in Section 10.10.4c). |
1.55 | “Instrument” shall mean a test platform including software Controlled by ArcherDX for end-users (i.e. pathology labs) to make automated use of the Product having the required regulatory approval in each MRK Market. |
1.56 | “Intellectual Property” or “IP” shall mean any and all intellectual property rights, (whether patentable or not), including patent rights, Know-How, inventions, Confidential Information, trade secrets, utility models, registered designs, design rights and copyrights, and other similar proprietary rights, all rights of whatsoever nature in computer programs and all intangible rights and privileges of a nature similar to any of the foregoing, whether or not registered, and including all granted registrations and applications of the same. |
1.57 | “IRB” shall mean institutional review board, including without limitation institutional ethics committee. |
1.58 | “Joint Commercialization Team” or “JCT” shall have the meaning ascribed to it in Section 4.4. |
1.59 | “Joint Project Team” or “JPT” shall have the meaning ascribed to it in Section 4.4. |
1.60 | “Know-How” shall mean any proprietary invention, discovery, development, data, information, process, method, technique, material (including any chemical or biological material), technology, result, cell line, compounds, probe, sequence or other know-how, whether or not patentable, and any physical embodiments of any of the foregoing. |
1.61 | “MRK” shall mean either (i) Merck KGaA, Darmstadt Germany, or as the case may be (b) the respective MRK Affiliate, if a MRK Affiliate enters into a Project Agreement under this Agreement. |
1.62 | “MRK Claim” shall have the meaning set forth in Section 13.7. |
1.63 | “MRK Commercial Price” or “MCP” shall have the meaning [**]. |
1.64 | “MRK Data” shall have the meaning ascribed to it in Section 8.3. |
1.65 | “MRK Market(s)” shall mean the territories in which a Drug is to be launched and sold by MRK as outlined in each Project Agreement. Differential timelines for primary and secondary territories may be indicated in each Project Agreement. |
1.66 | “MRK Research Price” or “MRP” shall have the meaning [**]. |
1.67 | “Milestone” shall mean the amount in USD to be paid by MRK to ArcherDX for ArcherDX’s performance of the Activities of a Project Phase. |
1.68 | “Non-Conforming Product” shall have the meaning ascribed to in Section 10.10.4. |
1.69 | “OEM Agreement” or “Original Equipment Manufacturing Agreement” shall mean an agreement under which products of supplier are used as components in ArcherDX’s Product. |
1.70 | “Outcome Data” shall mean any information relating to patient survival or response, or progression, to assess the efficacy of a Compound or a Drug. |
1.71 | “Personal Data” shall the meaning ascribed to it in Section 8.1. |
1.72 | “PMA” shall mean premarket approval application (including any supplement thereto) made to the FDA for a medical device in accordance with section 515 of |
1.73 | “Product” shall mean any diagnostic product (including Prototype Assay or the Analytically-Validated Assay) developed by ArcherDX under a Project Agreement, containing reagents like for example positive and negative control materials, enzymes, oligonucleotides, buffers, and other components needed to perform the assay, that may specifically detect certain Biomarkers for evaluation as a companion diagnostic to be used for diagnosing or stratifying patients or selecting patients eligible for treatment. |
1.74 | “Project” shall mean a collaboration project between the Parties regarding the development of Products for commercialization to stratify patients eligible for treatment with a Drug. |
1.75 | “Project Agreement” shall mean each separate agreement that includes the terms and encompasses the principles set forth on Exhibit 1.75 (Project Agreement Form) and including the Work Plan and Budget between MRK and ArcherDX regarding a Project in which the Parties establish those terms and conditions not already established in this Agreement, and in which any deviations from the terms and conditions established in this Agreement are expressly set forth by clearly referencing the provisions of this Agreement deviated from. Each Project Agreement shall form an Exhibit to this Agreement. A Project Agreement may be entered into with ArcherDX either by MRK or by any MRK Affiliate, as the case may be, and will be entered into at the sole discretion of both Parties. |
1.76 | “Project Managers” shall have the meaning set forth in Section 4.4. |
1.77 | “Project Phase” shall mean a discrete sub-part of a Project, the total cost of which are captured in the corresponding Milestone. |
1.78 | “Project Team” shall mean the relevant technical, clinical, regulatory, commercial and other Project representatives from each Party who have been allocated by each Party, respectively, to perform the Activities under each Project. |
1.79 | “Prototype Assay” shall mean one or more Assays developed by ArcherDX under a Project Agreement that include all reagents, including appropriate level positive and negative control material guidelines (pointing towards laboratory in-house control materials) or appropriate level positive and negative control materials (supplied physically within a kit), needed to perform each Assay labeled “Research Use Only. Not for use in diagnostic procedures”, or equivalent. |
1.80 | “Purchase Order” shall have the meaning ascribed to in Section 10.8. |
1.81 | “QSR” means the applicable FDA Quality System Regulations (21 C.F.R. §820). |
1.82 | “Receiving Party” shall mean the Party which receives Confidential Information from the other Party under this Agreement or a Project Agreement. |
1.83 | “Regulatory Approval” shall mean, with respect to a Product or a Drug in the applicable regulatory jurisdictions, the approval (including the clearance or non-objection, as applicable) from the applicable Regulatory Authority necessary and sufficient for the manufacture, distribution, use and sale of a Product or Drug in such jurisdiction in accordance with Applicable Laws. |
1.84 | “Regulatory Authority” shall mean a governmental authority (or any successors thereto) that has responsibility for granting licenses or approvals necessary for the marketing of a Product and a Drug (e.g. the Food and Drug Administration (FDA) in the United States of America or the European Medicines Agency (EMA) in the European Union) or a data protection authority that has competence over any of the Parties or any of such Parties’ Affiliates under this Agreement. |
1.85 | “Regulatory Submission” shall mean any written submissions to or filings with any Regulatory Authority relating to a Regulatory Approval. |
1.86 | “Research Material” shall mean any and all material (a) sent by or on behalf of MRK to ArcherDX, including all related biological material or associated Know-How and data that MRK provides, (b) produced or generated during performance of a Project Agreement, or (c) acquired in the course of performing the Activities as well as (d) any substance that is replicated or derived from the Research Material as defined in clauses (a) to (c) or which could not have been produced but for the use of the Research Material as defined in clauses (a) to (c). |
1.87 | “Reviewing Party” shall have the meaning set forth in Section 12.8.2. |
1.88 | “Specifications” shall mean the specifications for the Product developed by ArcherDX, and approved by the DLs as part of each Project Agreement; in each case, covering the design, manufacture, composition, packaging or quality control of the Product and which may be amended, from time to time in accordance with the terms of this Agreement and the individual Project Agreement. |
1.89 | “Sponsor” shall mean the entity responsible for the initiation, management, financing and conduct of a Clinical Trial. |
1.90 | “Subject” means a human who participates in a Clinical Trial, either as an individual on whom or on whose specimen the Product is used, or used as a control. |
1.91 | “Tax” or “Taxes” means any federal, state, local or foreign income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on |
1.92 | “Term” shall have the meaning ascribed to it in Section 15.1. |
1.93 | “Test Lab” shall mean a Third Party contract diagnostic reference laboratory. |
1.94 | “Testing Methods” shall have the meaning ascribed to in Section 10.10.2. |
1.95 | “Third Party” shall mean any person or entity other than the Parties or the Affiliates of MRK or ArcherDX. |
1.96 | “Unanticipated Adverse Device Effect” or “UADE” means any serious adverse effect on health or safety, any life-threatening problem or death caused by, or associated with the Product, if that effect, problem, or death was not previously identified in nature, severity, or degree of incidence in the Clinical Trial Protocol, IDE, IND, or IRB application, or any other unanticipated serious problem associated with the Product that relates to the rights, safety, or welfare of Subjects. |
1.97 | “USD” shall mean the official currency of the United States of America, US Dollars ($). |
1.98 | “USPTO” shall mean the United States Patent and Trademark Office. |
1.99 | “Work Plan and Budget” shall mean the written description of the Activities to be performed by each Party as specified by each applicable Project Agreement containing the estimated timelines/dates, deliverables and estimated budget for the various stages of the Project, as may be amended from time to time in accordance with the terms of this Agreement and the individual Project Agreement. |
2 | Subject Matter |
2.1 | Purpose. The purpose of this Agreement is to facilitate collaboration between the Parties within the field of companion diagnostics by creating a legal framework which sets forth terms and conditions of the Parties’ collaboration in connection with Projects. |
2.2 | Collaboration. This Agreement, together with any Project Agreements sets forth the terms and conditions of the Parties’ collaboration in connection with Projects. MRK and ArcherDX will carry out their collaboration under the terms of this Agreement and under separate Project Agreements. Unless otherwise specifically set forth in a Project Agreement and quoting the provisions to be deviated from, the terms and conditions of this Agreement will apply to the Parties’ collaboration in connection with Projects. Affiliates of MRK shall be allowed to enter into Project Agreements under this Agreement in their own name and the provisions of this Agreement and the respective Project Agreement shall then refer to such MRK Affiliate. |
2.3 | Initiation. Each proposal by a Party for the initiation of a Project shall be made to the other Party in writing, such proposal to contain an outline of the proposed Project. ArcherDX shall provide to MRK for MRK’s consideration a work plan and the estimated total costs in reasonable detail to enable the Parties to make an informed decision regarding such Project. Neither Party shall be obligated to perform or entitled to receive any Activities related to Projects until such time as the Parties have both signed a Project Agreement related to such Activities. |
2.4 | Conduct of Activities. When conducting the Activities, the Parties shall: |
2.4.1 | perform or cause to be performed the Activities in good scientific manner, pursuant to scientific standards and in compliance with this Agreement, the applicable Project Agreement, their respective quality management systems in place at any time, and all Applicable Laws, including Applicable Laws on personal data protection and human samples or relating to environmental, health, or safety matters, the principles that form the basis of Declaration of Helsinki (version 2000) and, to the extent reasonably required by the Project concerned, GLP and GMP; |
2.4.2 | exert Commercially Reasonable Efforts to allocate sufficient time, effort, equipment and skilled personnel to complete such Activities pursuant to the applicable Project Agreement; |
2.4.3 | comply with all applicable shipping regulations (for example, International Air Transport Association and Department of Transportation); |
2.4.4 | not knowingly misappropriate or infringe any valid patent, trade secret, copyright, or other Intellectual Property of any Third Party; |
2.4.5 | provide the other Party with available and relevant environmental, health and safety information relating to materials provided to the other Party; |
2.4.6 | notify the other Party of any unforeseen or unusual events that occur during performance of Activities under a Project Agreement that may significantly affect the cost, quality, integrity, timelines, or budget associated with such Project Agreement; |
2.4.7 | notify the other Party, in writing, of any worker claims of suspected occupational illnesses related to working with materials supplied to the other Party; |
2.4.8 | return or arrange for the return of any materials provided by the other Party to the location specified in the applicable Project Agreement. The returning Party shall comply with all shipping regulations applicable to the type of material being returned; |
2.4.9 | not dispose of or destroy any materials provided by the other Party except as specified in a Project Agreement or in accordance with a prior written approval by the other Party; and |
2.4.10 | retain records, including raw data, relating to the Activities for five (5) years after the term of the applicable Project Agreement or as required by Applicable Laws, whichever is longer. |
2.5 | Inspections, Audits, or Investigations of ArcherDX |
2.5.1 | Regulatory Authority Inspections or Government Investigations. ArcherDX will allow appropriate worldwide Regulatory Authorities to inspect its facilities or review records relating to Activities. |
a) | Notification. If any Regulatory Authority gives ArcherDX notice of its intent to inspect, audit, or investigate ArcherDX or take any other type of regulatory action in relation to Activities, ArcherDX will use its best efforts to notify MRK within twenty-four (24) hours after ArcherDX’s receipt of such notice. |
b) | Cooperation. ArcherDX will cooperate with the Regulatory Authority and MRK or its Third Party representative, if applicable, in the conduct of such inspections, audits, and investigations and will ensure that records of Activities are maintained in a way that facilitates such activities. |
c) | Inspection Findings and Responses. Within five (5) Business Days of receipt, ArcherDX will forward to MRK copies of any inspection findings in any way related to the Activities that ArcherDX receives from a Regulatory Authority during the Term. |
2.5.2 | MRK Audits |
a) | Notice and Frequency. Upon reasonable notice, and in any event with a notice of not less than [**], and during regular business hours, MRK or a relevant Third Party appointed and paid for by MRK may audit ArcherDX facilities and any subcontractor facilities. |
b) | Scope. Such audit may include records, including accounting records, relating to Activities. ArcherDX will make available all such records and will provide reasonable assistance in the inspection or audit. Unless another time period is specified in a Project Agreement, MRK’s right to audit will continue for so long as ArcherDX is required to retain the applicable records. |
c) | Corrective Measures. ArcherDX shall exert Commercially Reasonable Efforts to institute reasonable corrective measures to address deficiencies identified in a MRK audit and acknowledged by ArcherDX. |
d) | Extraordinary Circumstances. The Parties acknowledge that ArcherDX may be subject to extraordinary circumstances that may render an audit within two (2) weeks from MRK’s notice impossible, e.g. in case of already planned Regulatory Authority inspections or Third Party audits at the relevant ArcherDX and subcontractor facilities. In such case the Parties shall discuss in good faith alternative audit dates as soon as possible after the two (2) weeks’ notice. |
3 | Master Framework Terms |
3.1 | Non-exclusive Collaboration. The Parties understand and agree that this Agreement is non-exclusive, and ArcherDX shall be unrestricted from entering into agreements with Third Parties for the development and commercialization of companion diagnostic products; however, during the Term ArcherDX will not enter into agreements with, arrangements with or obligations to any Third Parties to the extent that such agreements, arrangements or obligations with or to a Third Party would in any way conflict with ArcherDX’s commitment to perform its obligations under an executed Project Agreement with MRK. |
4 | Governance |
4.1 | Alliance Management. The Parties will upon execution of this Agreement each appoint one (1) alliance manager to manage the collaboration across Projects between MRK and ArcherDX under this Agreement. Changes in each Party’s alliance manager shall be notified in writing in advance to the other Party. The first meeting between the alliance managers shall be conducted within three (3) months following the Effective Date of this Agreement. Unless the Parties otherwise agree, the alliance managers will meet at least once each calendar quarter during the Term. The Parties shall agree to the specific meeting date and time. The meetings shall be in person or alternatively by teleconference or videoconference and shall alternate between MRK selected sites and ArcherDX selected sites, unless otherwise agreed. MRK and ArcherDX shall each bear all expenses of their respective alliance manager. |
4.2 | Responsibilities. The alliance managers shall be responsible for: |
4.2.1 | optimizing the collaboration under this Agreement; and |
4.2.2 | discussing and recommending for signature new Project Agreements. |
4.3 | Development Leaders; Commercial Leaders. Within thirty (30) calendar days after the effective date of each Project Agreement, each Party will appoint a Development Leader to manage the applicable Project in relation to Activities (“Development Leader” or “DL”). In addition, when deemed appropriate by the alliance managers, but in any event no later than two (2) years prior to projected first commercial sale of Product, each Party will appoint a Commercial Leader to manage the applicable Project in relation to commercialization (“Commercial Leader” or “CL”). The DL and CL shall be appointed by each Party on prior written notice to the other Party and may be replaced by such Party at any time on prior written notice to the other Party. Unless the Parties otherwise agree, the DLs and CLs, if applicable, will meet at least once each calendar quarter during the term of the applicable Project Agreement. The Parties shall agree to the specific meeting date and time. The meetings shall be in person or alternatively by teleconference or videoconference and shall alternate between MRK selected sites and ArcherDX selected sites, unless otherwise agreed. MRK and ArcherDX shall each bear any and all expenses of their respective DLs and CLs. Decisions of the DLs and CLs, if applicable, shall be made unanimously. In the event that the DLs, or CLs, if applicable, are unable to agree on a matter, the escalation procedure in Section 4.6 shall apply. The DLs and CLs shall keep accurate minutes of their deliberations which record all proposed decisions and all actions recommended or taken. Drafts of the minutes shall be delivered to the alliance managers within ten (10) Business Days after each meeting. The Party hosting the meeting shall be responsible for the preparation and circulation of the draft minutes. Draft minutes shall be issued in final form only when mutually agreed. |
4.3.1 | DL Responsibilities. The DLs shall provide strategic leadership and sponsorship and be responsible for: |
a) | discussing and recommending for signature amendments to a Work Plan and Budget if such amendments results in an increase of the total costs in the Work Plan and Budget by more than [**], which amendments shall be referred to the alliance managers; |
b) | dispute resolution in accordance with Section 4.6; |
c) | reviewing and evaluating the progress, including cost, of the Activities and ensuring that the Activities proceed according to the applicable Project Agreement and Work Plan and Budget; |
d) | coordinating the activities of the Parties to ensure that the Project is progressing consistently with the development of the Compound and Drug; |
e) | discussing and approving completion of decision points and deliverables set forth in the applicable Project Agreement and Work Plan and Budget; |
f) | discussing and recommending for signature amendments to the applicable Project Agreement; |
g) | discussing and approving for signature amendments to the Work Plan and Budget, provided that such amendments do not imply an increase of the estimated total costs in the Work Plan and Budget by more than [**], which amendments shall be referred to the alliance managers; |
h) | reviewing and approving any publications; |
i) | overseeing the patent strategy for the Project and resolve any disputes with the advice of an in-house patent advisor from each Party; |
j) | coordinating as necessary with the CL and alliance managers; and |
k) | such other activities pertaining to the Activities ascribed to the DLs in this Agreement, the Project Agreement or as mutually agreed between the Parties from time to time. |
4.3.2 | CL Responsibilities. To ensure the efficient and effective commercialization of the Product in conjunction with the Drug, the CLs shall be responsible for: |
a) | approving the Commercialization Plan for the Product including the date for the commercial launch for the Product; |
b) | coordinating and aligning on access and reimbursement issues related to the Product, including reimbursement of Commercialization Costs under Section 11.11; |
c) | approving the Product distribution plan; |
d) | approving the Product quality standards; |
e) | decision on action to be taken regarding lab customers that fail to meet the quality proficiency standards; |
f) | reviewing and approving any publications regarding the Product; |
g) | coordinating as necessary with the DLs and the alliance managers; and |
h) | such other responsibilities pertaining to the commercialization of Products and Drugs ascribed to the CLs in this Agreement, the Project Agreement, or as mutually agreed between the Parties from time to time. |
4.4 | Joint Project Team; Joint Commercialization Team. For each Project, the Parties shall collaborate through a Joint Project Team (“Joint Project Team” or “JPT”) or as applicable a Joint Commercialization Team (“Joint Commercialization Team” or “JCT”) consisting of an equal number of representatives from each Party. A Party may have additional representatives attend team meetings upon prior written notice to the other Party. The JPT shall be established as soon as reasonably practicable but in no event later than thirty (30) days after the execution of the applicable Project Agreement. The JCT will be established at least two (2) years prior to the first projected Regulatory Submission of the Product. The JPT and JCT will be co-chaired by one representative from each Party (the “Project Managers”) to discuss and review approved work plans, fulfillment of milestones and other operational activities related to the Activities. The Joint Project Team will interact on an ongoing basis as necessary and relevant for performing the Activities, and shall meet at regular intervals, or as mutually agreed to by the Project Managers or their delegates in accordance with Section 4.4.3. |
4.4.1 | JPT Responsibilities |
a) | provide tactical leadership; |
b) | recommend to the DLs a strategy for development and Regulatory Approval of the Product, all in accordance with the Work Plan and Budget; |
c) | develop, review, and revise as necessary, the Work Plans and Budgets, including the milestones and submit any revisions to the DLs for comment and approval; |
d) | oversee the implementation of, and monitor the progress of, the Work Plan and Budget, including the allocation of qualified personnel who |
e) | seek consensus in any decisions to be made by the JPT and submit any disagreement to the DLs for resolution; and |
f) | perform such other functions requested by the DLs consistent with and subject to the terms of this Agreement. |
4.4.2 | JCT Responsibilities |
a) | proposing a Commercialization Plan for the Product to the CLs in alignment with MRK’s commercialization of the Drug prioritized by country, including setting the date for the commercial launch for the Product; |
b) | discussing ArcherDX’s activities supporting the marketing, promotion, distribution and sale of the Product (including the selection of trademarks for the Product), such as sales training, promotion, customer service, support and education activities; |
c) | proposing the Product distribution plan which is aligned to the quality objectives to the CL and aligning on lab and clinician communication; |
d) | discussing possible activities with respect to quality assessment plans and proposing Product quality standards to the CLs as well as reporting the failure of any lab customers to meet quality proficiency standards to the CLs; |
e) | discussing access and reimbursement issues related to the Product, including preparation of the pricing and reimbursement plan for the MRK Markets, reimbursement of Commercialization Costs under Section 11.11 and applying for reimbursement in MRK Markets, in which reimbursement is not currently available; |
f) | oversee the implementation of, and monitor the progress of, the Commercialization Plan for the Product, including the allocation of qualified personnel who have specific accountabilities as regards the plan objectives; |
g) | seek consensus in any decisions to be made by the JCT and submit any disagreement to the CLs (or DLs if the CLs have not been appointed) for resolution; and |
h) | perform such other functions requested by the CLs (or DLs if the CLs have not been appointed) consistent with and subject to the terms of this Agreement. |
4.4.3 | Project Managers. Unless otherwise determined in a Project Agreement, the Project Managers shall be the principal point of contact for each Party for matters relating to that Party’s performance under the relevant Project Agreement and shall be responsible for implementing and coordinating, on a day-to-day basis, all activities and facilitating the exchange of information between the Parties regarding the performance under the Project. The Project Managers may delegate tasks and responsibilities to sub-managers, working groups and other team members, including the alliance manager, as they deem appropriate to efficiently and effectively perform their respective obligations hereunder. The Project Managers will cooperate with each other and work in good faith to resolve any disagreements between them or their respective teams. Any such disagreements that are not resolved by the Project Managers shall be escalated to the DLs or CLs as applicable for resolution. Within ten (10) days after the execution of a Project Agreement, each Party shall provide the other Party with the name of its Project Manager. Each Party may replace its Project Manager at any time and for any reason upon written notice to the other Party. For clarity, a Project Manager, alliance manager, CL or DL may be the same person, if so named by a Party. |
4.4.4 | JPT and JCT Meetings. The JPT / JCT shall hold meetings at least monthly (unless mutually agreed otherwise by the Project Managers or their delegates in accordance with Section 4.4.3) at such times and places as shall be determined by the JPT / JCT (including by videoconference), but in no event, shall such meetings be held in person less frequently than twice annually, and the selection of the venue of such in person meetings shall alternate between MRK selected sites and ArcherDX selected sites, unless otherwise agreed. |
4.4.5 | Authority. Neither the JPT nor the JCT nor the Project Managers shall have any authority over the conduct of any Clinical Trial or any Clinical Trial Protocol for the Drug. Neither the Project Managers nor the JPT nor the JCT shall have the authority to amend this Agreement. |
4.4.6 | Expenses. Each Party will bear its own expenses associated with meetings of the JPT and JCT and related expenses. |
4.5 | Reports. During the Term, ArcherDX shall furnish to the DLs, CLs and alliance managers, if applicable, the following: |
4.5.1 | Summary written reports or presentations within thirty (30) days after the completion of each sub-part of each Work Plan and Budget, describing its progress under each Project Agreement; and |
4.5.2 | Comprehensive, written reports or presentations within thirty (30) days after the end of each calendar year, describing in detail the Activities accomplished by it under each Project Agreement during such calendar year and discussing |
4.6 | Escalation Procedure |
4.6.1 | Each Party hereby agrees that it will first attempt in good faith to resolve any dispute arising out of or relating to this Agreement promptly by negotiations. Any such dispute shall be brought to the attention of the Project Managers for resolution. The Project Managers will endeavor to propose and define mutually acceptable solutions and facilitate communications in an attempt to bring the dispute to a mutually agreeable resolution. |
4.6.2 | Under each Project Agreement, the JPT or JCT as appropriate shall have the right to escalate issues to the DLs or the CLs as appropriate for resolution. |
4.6.3 | If the DLs or CLs, as applicable, cannot agree on a matter, such matter shall be escalated to [**] for resolution prior to being resolved by any remedy available under Sections 18.16 and or Applicable Laws. |
5 | Financials |
5.1 | Project Payments. Under each Project Agreement, MRK will compensate ArcherDX for ArcherDX’s Activities according to the Milestones specified in the Project Agreement, which shall be due and payable in accordance with the following schedule: |
5.1.1 | Unless otherwise stated in the Project Agreement, [**], following the DLs’ approval of the initiation of the corresponding Project Phase and MRK’ receipt of the corresponding invoice; and |
5.1.2 | Unless otherwise stated in the Project Agreement, [**], following receipt of the Final Report for the corresponding Project Phase and corresponding invoice. |
5.2 | Penalty. In the event that achievement of any of the Milestones, as further detailed under the respective Project Agreement, is delayed due to reasons under ArcherDX’s control (for clarity, this shall specifically include any delays caused by a Third Party that has a direct contractual relationship with ArcherDX or any delay caused by technical or business nonperformance of ArcherDX of Activities in the respective Project Agreement) or for ArcherDX’s nonperformance of its duties according to the mutually agreed commercialization timeline, as further detailed under the respective Commercialization Plan for the Product, and MRK promptly notifies ArcherDX of such delay, the corresponding Milestone fee shall be reduced by [**] for each [**] of delay, but reduced no more than a total of [**] of the total payment |
5.3 | Supply Price Paid by MRK. With respect to any Products supplied by ArcherDX to MRK pursuant to Article 10, the supply price payable by MRK to ArcherDX shall be the MRK Research Price. |
5.4 | Payment Terms |
5.4.1 | Invoicing. All payments invoiced by ArcherDX to MRK shall be due within [**] days after receipt of the invoice. Amounts paid by one Party to the other Party under this Agreement shall be paid in immediately available funds, by means of check or wire transfer to an account identified by ArcherDX. All payments under this Agreement shall earn interest from the date due until paid at a per annum rate equal to the lesser of (a) the maximum rate permissible under Applicable Law and (b) [**] above the monthly Reuters EURIBOR01, measured at 2 p.m. Frankfurt/Germany time on the date payment is due. Interest will be calculated on an actual/360 basis. The payment of such interest shall not limit the Parties from exercising any other rights at their disposal as a consequence of the lateness of any payment. Unless otherwise foreseen in a Project Agreement, all invoices shall be addressed to: |
Merck KGaA |
Accounts Payable |
[**] |
5.4.2 | Taxes on Payments |
a) | Indirect Taxes. For indirect tax purposes invoiced amounts are net amounts. In case the services provided by ArcherDX under this |
b) | Withholding Tax. ArcherDX shall be responsible for the payment of any and all Taxes levied on account of payments under this Agreement paid to ArcherDX by MRK or its Affiliates or Sublicensees under this Agreement. If Applicable Law requires that Taxes be deducted and withheld from payments paid under this Agreement, MRK shall (i) deduct those Taxes and interests and penalties assessed thereon from the payment or from any other payment owed by MRK hereunder; (ii) pay the Taxes to the proper governmental body; (iii) send evidence of the obligation together with proof of Tax payment to ArcherDX within one hundred (100) days following such payment; (iv) remit the net amount after deductions or withholding made under this Section and (v) cooperate with ArcherDX in any way reasonably requested by ArcherDX, to obtain available reductions, credits or refunds of such Taxes. Assuming that ArcherDX is the beneficial owner of the Intellectual Property, the cooperation referred to in subparagraph (v) of the foregoing sentence shall include that ArcherDX shall provide MRK with a written confirmation from the competent tax authority on the local application tax form that ArcherDX has its residence in the respective country which would allow the Parties to benefit from the reduced withholding Tax rate set forth in the Double Taxation Convention existing between Germany and the United States of America. |
5.4.3 | Foreign Exchange. All payments under this Article 5 that are recorded in currencies other than EUROS or USD will be converted to EUROS or USD, as applicable, in accordance with MRK’s customary and usual conversion procedures as applied to its external reporting. |
5.4.4 | No Offset. If ArcherDX and MRK have entered into more than one Project Agreement, none of the Parties may offset charges associated with one Project Agreement to another, unless authorized by the other Party in writing. |
6 | Activities |
6.1 | ArcherDX Responsibilities. ArcherDX will use Commercially Reasonable Efforts to complete the Activities ascribed to it in the Work Plan and Budget within the timelines as agreed to under each Project Agreement and this Agreement. MRK shall not be responsible for payment to ArcherDX for any repeat Activities that are necessary due to ArcherDX’s negligence or willful misconduct. ArcherDX shall perform its Activities in accordance with all relevant quality system requirements, including GMP, QSR and other ISO13485 standards required by regulatory authorities and other relevant notified bodies. ArcherDX shall be responsible for the Activities ascribed to ArcherDX in the applicable Project Agreement and the corresponding Work Plan and Budget, including the following Activities: |
6.1.1 | Designing and developing the Product in accordance with the Work Plan and Budget. |
6.1.2 | Designing and developing the format, reagents, procedures, and suitable protocols for the Product in accordance with design control and QSR. |
6.1.3 | Designing and developing the Product to be compatible with use on an Instrument, if applicable. |
6.1.4 | Designing, developing and maintaining the applicable Data Report Form for use in the Clinical Trials if required. |
6.1.5 | Prequalifying and training of the Test Labs in the practical use of the Product. |
6.1.6 | All communications with the Regulatory Authorities with respect to the Product, including pre-submissions and IDEs. |
6.1.7 | Project management and quality assurance activities necessary to fulfill its obligations under this Agreement and Project Agreements. |
6.1.8 | At its sole expense except as provided in the Work Plan and Budget, providing all equipment, tools, materials, and supplies necessary to accomplish the Project. |
6.1.9 | Contracting with the Test Lab(s) for the purpose of having external validation studies performed and any other subcontractors to the extent relevant for ArcherDX’s performance of Activities. |
6.1.10 | Qualification, oversight and monitoring of the Test Labs during Clinical Trials as set forth in Section 9.1. |
6.1.11 | All communication of all Product related quality issues to Test Labs. |
6.2 | MRK Responsibilities. MRK shall be responsible for the Activities ascribed to MRK in the applicable Project Agreement and the corresponding Work Plan and Budget, including the following Activities: |
6.2.1 | To the extent outlined in the Work Plan and Budget, technical transfer to ArcherDX of Assays, protocols and preclinical/clinical data and testing summaries and other Know-How Controlled by MRK, if any, and necessary for the development of the Product, which may include Know-How related to expression levels of the Biomarker in cell lines, human samples and tissues. |
6.2.2 | Selection of, auditing of, contracting with and funding of Test Labs to be used in any Clinical Trial as set forth in Section 9.1. |
6.3 | Reagents Source. In connection with Projects the Parties shall mutually agree on the approach for obtaining the required reagents that may be necessary for performing the Activities in relation to the Product such as (a) utilization of existing reagents provided by ArcherDX or suppliers with whom ArcherDX has an Original Equipment Manufacturing Agreement; (b) utilization of existing reagents provided by MRK; (c) in-licensing of reagents provided by a Third Party; or (d) development of new reagents by ArcherDX. The agreed to approach for obtaining the required reagents will be set out in the applicable Project Agreement. |
7 | Clinical Trials |
7.1 | Conduct of Clinical Trials. MRK shall have the sole discretion as to whether to conduct any Clinical Trials with respect to the Drug required for a Project. MRK shall be solely responsible for the cost of such Clinical Trials. |
7.2 | Ownership of Clinical Trial Data. MRK will retain full ownership of all Clinical Trial data, Clinical Trial Samples and any other data and information obtained or otherwise resulting from the Clinical Trials and all Regulatory Approvals and applications therefore with respect to the Drug. This Section 7.2 is without prejudice to ArcherDX’s rights under Section 12.2. |
7.3 | Sponsor. As to ArcherDX, MRK shall be the Sponsor of all Clinical Trials, including fulfilling all local regulatory requirements. For clarity, MRK may delegate Sponsor role for Clinical Trials, including to development collaboration partners in development collaborations for the Drug. Subject to Section 7.3 sentence 1, the Parties agree to allocate the Sponsor related tasks between them as follows: |
7.3.1 | Communication with Regulatory Authorities. MRK shall, in all communications with Regulatory Authorities regarding use of the Drug in Clinical Trials, e.g. in INDs, be designated as the sole Sponsor. Without prejudice to the generality of Section 7.3, ArcherDX shall, in all communications with Regulatory Authorities regarding use of the Product in Clinical Trials be designated as the sole CDx and/or IDE Sponsor. If a Regulatory Authority requires that the same Sponsor is designated in both Drug and Product related communication regarding Clinical Trials, then MRK shall be designated as the sole the Sponsor. |
7.3.2 | Clinical Trial Protocol. MRK shall have sole and full responsibility for drafting the Clinical Trial Protocol. MRK shall however, as appropriate, consult with ArcherDX, in connection with its design of the Clinical Trial Protocol, regarding the design of and procedures for collection and documentation of Clinical Trial data necessary to support ArcherDX’s Regulatory Submissions for the Product. |
7.3.3 | Informed Consent. MRK shall have sole and full responsibility for ensuring and documenting informed consent of all subjects in all Clinical Trials. MRK shall without undue delay inform the JPT about any deviations from such informed consent if relevant for the Product. |
7.3.4 | Informed Consent Form. The Parties shall agree in writing on any informed consent information concerning the Product to be submitted to any Regulatory Authority or IRB. MRK shall include such informed consent information concerning the Product in the Clinical Trial informed consent form as submitted to Regulatory Authorities and IRBs. MRK agrees that the informed consent form concerning the Clinical Trial shall clearly state that the Product is investigational, and that clinical and test data may/will be used for development of a companion diagnostic product. |
7.3.5 | Product and Drug Records. ArcherDX shall have sole and full responsibility for maintaining Sponsor records for the Product (e.g. according to CFR Title 21, 812.140), however solely to the extent such Sponsor records for the Product do not overlap with the Sponsor records for the Drug (e.g. according to CFR Title 21 312) which shall be coordinated by the JPT. MRK shall have sole and full responsibility for maintaining Sponsor records for the Drug. |
7.3.6 | Product and Drug Labeling. ArcherDX shall have sole and full responsibility for labeling the Product. MRK shall have sole and full responsibility for labeling the Drug. |
7.3.7 | IRBs. MRK shall have sole and full responsibility for obtaining and documenting all IRB reviews and approvals relating to the Clinical Trial, including use of the Product in the Clinical Trial. MRK shall upon reasonable request from any JPT member inform the JPT of the status of any IRB approval. MRK shall without undue delay inform the JPT about any withdrawal of any IRB approval. |
7.3.8 | Test Labs. MRK shall have the sole and full responsibility for selection of, auditing of, contracting with and funding of Test Labs and personnel affiliated with such Test Labs. If a Test Lab or an affiliated investigator, in ArcherDX’s view, is not compliant with relevant regulations and requirements, including FDA requirements and CLIA regulations, ArcherDX shall provide written notice to MRK specifying the relevant deviations. If such deviations are not corrected in due time for ArcherDX to perform its Activities in relation to such Test Lab, ArcherDX may, at its sole discretion and without any liability or penalty (cf. Section 5.2), withdraw the Product from and cease its Activities in accordance with Section 6.1.10 in relation to such Test Lab. ArcherDX shall provide reasonable support to MRK for selection of Test Labs. |
7.3.9 | Adverse Events and Unanticipated Adverse Device Effects |
a) | Notification. Throughout the Term, MRK agrees to notify ArcherDX in English within one (1) Business Day but no longer than three (3) calendar days of relevant information that it obtains during its performance of the obligations set forth concerning any Adverse Event, side effect, injury, incident, near incident, Medical Device Report or any unexpected incident, toxicity or sensitivity reaction, and the severity thereof, where such an incident, event or effect is serious or unexpected and related to the clinical uses, studies, investigations, tests and marketing of the Product. |
b) | Medical risk-benefit assessment. MRK shall have sole and full responsibility for making the medical risk-benefit assessment (for both Biomarker positive and negative subjects) to be included in the Product IDE or equivalent submission. MRK agrees that such medical risk-benefit assessment shall at all times reflect the most recent investigators brochure for the Drug, Clinical Trial Protocol, and informed consent form. MRK shall without undue delay inform ArcherDX of any changes to such medical risk-benefit assessment. |
c) | Unanticipated Adverse Device Effects. MRK shall have sole and full responsibility for surveillance, identification and documentation of any suspected, observed or reported Unanticipated Adverse Device Effects in Clinical Trial Subjects. |
d) | Unanticipated Adverse Device Effects Evaluation and communication. MRK shall have sole and full responsibility for evaluation of causality, expectedness, seriousness and impact on subject safety, rights or welfare of any suspected, observed or reported Unanticipated Adverse Device Effects. MRK shall, within three (3) Business Days from first notice of any suspected Unanticipated Adverse Device Effect considered by MRK to have an impact on trial subjects safety, rights or welfare inform ArcherDX about the Unanticipated Adverse Device Effect and its expected impact. |
e) | False test results. ArcherDX shall, within three (3) Business Days from becoming aware of any false positive or false negative test results observed or reported at/by a Test Lab or an affiliated investigator, inform MRK about such false test results. ArcherDX shall document and evaluate such false test results. MRK shall within three (3) Business Days from receipt of such information from ArcherDX make an assessment of impact of such false results on subject safety, rights and welfare. ArcherDX shall provide MRK with reasonable support for such assessment. |
f) | Reporting to IRBs. MRK shall have sole and full responsibility for timely reporting of Unanticipated Adverse Device Effects to reviewing IRBs. ArcherDX shall provide reasonable assistance to MRK in relation to MRK’s evaluation of potential impact on Clinical Trial Subjects of false test results, including as set forth in Section 7.3.9e). |
g) | Reporting to Regulatory Authorities. ArcherDX shall have full responsibility for timely reporting of any Unanticipated Adverse Device Effect of which ArcherDX becomes aware to Regulatory Authorities. MRK shall provide all necessary assistance to ArcherDX in relation to processing and evaluation of suspected Unanticipated Adverse Device Effects as set forth in Sections 7.3.9b) - e). |
h) | Termination of Clinical Trial. MRK shall have sole and full responsibility for taking any actions that MRK, in its sole discretion considers necessary to ensure Subject safety including the timely termination of a Clinical Trial, if an Unanticipated Adverse Device Effect is considered by MRK to present an unreasonable risk to the Subjects. |
7.4 | ArcherDX Access to Clinical Trial Protocol. As necessary for ArcherDX to perform its Activities and obtain Regulatory Approval for the Product and otherwise to exercise its rights in accordance with Article 6, MRK shall provide ArcherDX access to the applicable sections of the most recent Clinical Trial Protocol and investigators brochure as permitted by the informed consent. ArcherDX shall have the right to use such information solely in connection with its performance of the Activities or obtaining Regulatory Approval for a Product, including to provide, in the format required by the Regulatory Authorities, the information required for the Regulatory Submissions necessary to obtain Regulatory Approval for the Product. |
7.5 | ArcherDX Access to Clinical Trial Samples. MRK shall, upon written request from ArcherDX, provide to ArcherDX, in accordance with the Clinical Trial Protocol and the informed consent at no cost to ArcherDX, all Clinical Trial Samples and related patient data in MRK’s possession and Control necessary for ArcherDX to perform its Activities for each Project and obtain Regulatory Approval for the Product. |
8 | Access and Exchange of Information and Data |
8.1 | Exchange of Information and Data - Generally. Any information related to an identified or identifiable natural person (“Personal Data”) which: |
a) | one Party received from the other Party; or |
b) | is processed by ArcherDX, |
8.2 | De-identified data. Any information, data and material transferred by MRK to ArcherDX under this Agreement shall, subject to Commercially Reasonable Efforts by MRK, be in a format by means of which no specific individual can be identified. The Parties shall, prior to any such transfer, agree to the format of such transfer. If ArcherDX inadvertently receives Personal Data from MRK, ArcherDX will immediately notify MRK of this and will take appropriate measures to protect the privacy and confidentiality of such information. This Section 8.2 shall not apply to the provision of data according to Sections 7.4 and 7.5. |
8.3 | ArcherDX Access and Right to Use MRK Data. MRK shall provide ArcherDX with all material information and data in MRK’s possession and Control, including clinical and demographic data, including screened population demographic characteristics regarding the use of a Product and Outcome Data (collectively, “MRK Data”), necessary for ArcherDX to perform its Activities or obtain Regulatory Approval for the Product, and shall provide reasonable assistance to ArcherDX in connection |
8.4 | MRK Access and Right to Use ArcherDX Data. ArcherDX shall provide MRK with all material information and data (including performance data for the Product) Controlled by ArcherDX (collectively “ArcherDX Data”) necessary for MRK to develop a Drug or Compound or obtain Regulatory Approval or other permissions from Regulatory Authorities for or associated with the Drug and shall provide reasonable assistance to MRK in connection therewith. MRK shall have the right to use ArcherDX Data to the extent necessary to develop the Drug and obtain Regulatory Approval. The Parties will exchange ArcherDX Data through an electronic data room. |
8.5 | Data Processing and Transfer. ArcherDX shall not process or transfer Personal Data subject to this Agreement to a country outside of the United States of America, EU, European Economic Area or Switzerland without MRK’s prior written consent; such consent is provided by concluding EU Standard Contractual Clauses (including concluding new versions of EU Standard Contractual Clauses, once adopted by the EU Commission; the current version is attached in Attachment 7). In the event of a discrepancy between any terms or conditions set forth in this Agreement and such EU Standard Contractual Clauses, the terms of those EU Standard Contractual Clauses shall govern. |
8.6 | Breach Notification. ArcherDX shall promptly notify MRK in writing after becoming aware of any breach of security leading to the accidental or unlawful destruction, loss, alteration, unauthorized disclosure of, or access to, Personal Data subject to this Agreement (“Data Breach”). MRK may request further reasonable information about the Data Breach including a reasonably detailed description of the Data Breach and the categories of Personal Data affected by the Data Breach. |
8.7 | Joint Controllers. If and to the extent that the Parties jointly determine the purposes and means of processing of Personal Data, acting as “Joint Controllers” (Art. 26 GDPR), the Parties shall agree in writing on a Joint Controller agreement that determines their respective responsibilities for compliance under Applicable Laws on data protection and that shall apply in addition to the other provisions of this Article 8. In case of a Clinical Trial according to Article 7, MRK shall be responsible to provide all relevant information to patients and shall be responsible to handle any patient requests regarding the exercise of their data protection rights; ArcherDX shall |
8.8 | Third Party. Where ArcherDX engages a Third Party in accordance with Section 18.5 and if that Third Party has access to Personal Data that is subject to this Agreement, ArcherDX shall appoint the subcontractor as a data processor under a contract which shall comply with Applicable Laws on data protection (including the GDPR) and shall ensure that the subcontractor complies with ArcherDX’s obligations under this Article 8, including entering into EU Standard Contractual Clauses (where required). Where Affiliates of ArcherDX also process Personal Data subject to this Agreement, ArcherDX shall remain liable that sharing of Personal Data with Affiliates and processing by Affiliates shall take place in accordance with this Article 8. |
8.9 | Information. ArcherDX shall inform its affected personnel about processing of their Personal Data by MRK for the purposes of this Agreement so that MRK complies with its information requirements under the GDPR towards personnel; where ArcherDX is reasonably missing details to provide complete information, MRK will provide such inform upon request. |
9 | Obtaining Regulatory Approval |
9.1 | Use of Test Labs. In accordance with Section 18.5 or each applicable Project Agreement, it is understood that certain work in furtherance of the Project will be performed by certain Third Party contractors. In particular, during the Project, the Prototype Assay or Analytically Validated Assay, as applicable, may be supplied to one or more Test Labs for the purpose of testing clinical patient samples using the Prototype Assay or Analytically Validated Assay, as applicable. In accordance with the applicable Project Agreement, ArcherDX shall prequalify and train the Test Labs in the use of the Product. |
9.2 | Regulatory Activities and Submissions Generally. MRK will actively cooperate with ArcherDX in the regulatory process for the development and global Regulatory Approval of a Product. The regulatory process includes the development of regulatory strategy, the sharing of regulatory information and data and the Regulatory Submission and liaison with global Regulatory Authorities. ArcherDX will, subject to Section 7.3, be the applicant of any Regulatory Submission(s) for a Product in the MRK Markets to the applicable Regulatory Authority, and therefore will be ultimately responsible for the submission of such required documentation per the jointly agreed timelines. The preparation, including strategy, for such Regulatory Submissions for a Product will be done in cooperation and consultation with MRK, provided, however, that ArcherDX will have ultimate decision-making authority in relation to the content and timing of such Regulatory Submissions. For avoidance of doubt, ArcherDX shall be the sole owner of any Product design history file, PMA and CE technical file, however, subject to any MRK rights to Outcome Data and Compound Foreground IP under this Agreement. MRK shall be solely responsible |
9.2.1 | Routine interactions of ArcherDX and MRK regulatory and project management representatives to share regulatory information relevant to the agreed strategy for development and registration of the Product. |
9.2.2 | Strategic and operational discussions and interactions with global Regulatory Authorities, including for any aspect of assay development and registration, e.g. US FDA meetings, IDE submission and amendments; PMA preparation; PMA supplementation; CE Mark (or equivalent) submissions; interactions with European Regulatory Authorities and Regulatory Submissions. This may include the active participation of both ArcherDX and MRK representatives or the a priori alignment of the Parties with regard to the strategy and content of such discussions or interactions. |
9.2.3 | Development and alignment on the content of the technical information to be included in submissions to global Regulatory Authorities for the Product. |
9.2.4 | Development and alignment on the design of the Clinical Trials associated with the Product to be conducted to satisfy requirements for the PMA and other Regulatory Submission documentation and also on any necessary adjustments to address concerns and recommendations from Regulatory Authorities. |
9.2.5 | Development and alignment on appropriate timelines and milestones for all aspects of development and regulatory documentation preparation, Regulatory Submission and follow-up. |
9.2.6 | Sharing of data and other source information related to the Product and the Drug as deemed appropriate and necessary by both ArcherDX and MRK to facilitate the review of content and assessment of adherence to the aligned strategy. |
9.2.7 | Sharing of regulatory documents related to the Product for Regulatory Submission or other submissions where appropriate, sharing of minutes of interactions with Regulatory Authorities related to the Product, and sharing of internal documents relevant to the strategy/content of Regulatory Submission, all to facilitate the comprehensive review of these documents by both ArcherDX and MRK prior to submission or implementation for the Product. Such documents may include (i) parts of any submissions related to the Drug but containing information about the Product and (ii) MRK’s clinical development plan for the Drug. |
9.2.8 | MRK will be responsible for providing all clinical specimens (including Clinical Trial Samples) and associated clinical data (including Data Report Form Data) as agreed to in a Project Agreement and necessary for completion of a Project. ArcherDX will receive all required patient and clinical data from MRK necessary in order to complete the data analysis and Regulatory Submission. |
9.2.9 | The Parties shall provide the other Party with copies of all final documents related to such Party’s Drug or Product, as applicable, received from and submitted to Regulatory Authorities strictly for archival purposes and in order to ensure facilitation of routine interactions between ArcherDX and MRK in the process of creating and maintaining regulatory files and interactions with Regulatory Authorities related to the Product and Drug. |
9.2.10 | As a part of the regulatory plan regarding the timelines for Regulatory Submissions and target timelines for Regulatory Approval of the Product, ArcherDX will be responsible for submission of the PMA, CE mark, or equivalent in the MRK Markets, as well as for comprehensive and timely submission of strategic responses to Regulatory Authorities’ inquiries. |
9.3 | Meetings and Correspondence with Regulatory Authorities |
9.3.1 | Notification Obligation. The Parties shall notify one another through the DL in advance of any request for a meeting or substantive discussion with any Regulatory Authority relating to the clinical validation part of the Regulatory Submission for the Product. Such notification shall be provided as soon as reasonably practical prior to any such meeting or substantive discussion, in order to provide the other Party with an opportunity to participate in such meeting or discussion. |
9.3.2 | Cooperation. The Parties will cooperate in good faith in all interactions with Regulatory Authorities. This includes participation at meetings with CDRH and responses to questions from health authorities. |
9.3.3 | MRK Responsibilities. MRK shall be solely responsible for all communications with Regulatory Authorities with respect to a Drug. Upon request by MRK, ArcherDX shall provide assistance to MRK and participate in meetings with Regulatory Authorities in connection with the development and approval of a Drug, where such development and approval involves the Product. |
9.3.4 | ArcherDX Responsibilities. ArcherDX shall, subject to Section 6.1.6, be solely responsible for all communications with Regulatory Authorities with respect to a Product but shall inform MRK on all activities relevant to the Drug or clinical validation of the Product. ArcherDX shall not be obliged to provide to MRK copies of information and correspondence and |
9.4 | Delays |
9.4.1 | In the event that the Drug in a country obtains Regulatory Approval prior to Regulatory Approval of the Product in such country (i) the Parties shall cooperate through the DLs to assure that the Product obtains Regulatory Approval and is made commercially available as soon as practicable after such Regulatory Approval of the Drug in such country, (ii) upon request by MRK, the Parties shall request a joint meeting (which may either be a teleconference or face-to-face meeting) with the Regulatory Authority in such country to discuss possible options for the sale of the Drug without the Product or for the use of the unapproved Product in connection with the use of the Drug, as may be permitted from time to time by such Regulatory Authority, and (iii) upon request by MRK and if so permitted by the Regulatory Authority in such country, ArcherDX agrees to use Commercially Reasonable Efforts to provide adequate supply and access to the Product on commercially reasonable terms, or MRK will purchase the Product directly from ArcherDX at the MRK Commercial Price and supply the Product in such country during the period where there is Regulatory Approval of the Drug without Regulatory Approval of the Product, which shall otherwise be supplied in accordance with the terms of this Agreement applicable to the commercial supply of Product. |
9.4.2 | If the Project is delayed due to a delay of [**] or greater in MRK’s performance of Activities, including Clinical Trials, or delays or unavailability of sufficient or satisfactory Data Report Form Data, Clinical Trial Samples, and Outcome Data, ArcherDX shall not be considered to have failed to use Commercially Reasonable Efforts in ArcherDX’s performance of Activities. In the case of such a delay, MRK and ArcherDX shall negotiate in good faith an additional payment by MRK to ArcherDX to compensate ArcherDX for its reasonable costs related to an extension or delay of the Project Agreement for the necessary maintenance activities performed by ArcherDX in order to keep the Project standing by and ready to be continued during the delay or extension period. ArcherDX may provide MRK with a written notice including an offer for such additional payment, provided such additional payment (i) does not exceed [**] and (ii) shall be negotiated in good faith. |
9.4.3 | If the Project is delayed due to a delay of [**] in ArcherDX’s performance of Activities, including the delivery of Prototype Assays, Analytically Validated Assays, and Products, MRK shall not be considered to have failed to use Commercially Reasonable Efforts in MRK’s performance of Activities. In the case of such a delay, MRK and ArcherDX shall negotiate in good faith how ArcherDX’s Activities can be moved off the critical path of the Project. |
10 | Manufacture and Supply for Development Activities |
10.1 | Diligence. ArcherDX shall use Commercially Reasonable Efforts to ensure supply of Products to MRK for Development Activities, including for Clinical Trials. |
10.2 | Quality Standards. Any Product (including all components thereof) shall be manufactured and distributed by ArcherDX, its Affiliates and distributors in accordance with all relevant quality system requirements, including GMP and other ISO13485 standards required by Regulatory Authorities. |
10.3 | Use for Development Activities. MRK hereby acknowledges and agrees that supply of the Product by ArcherDX in accordance with Article 10 is solely for the purposes of MRK’s use for Development Activities to be conducted by MRK or Test Lab pursuant to the applicable Project Agreement. Any such use shall be in accordance with all Applicable Laws. |
10.4 | Forecasts. MRK shall provide to ArcherDX forecasts for each [**] period starting on [**] and shall deliver each forecast in writing at least [**] prior to the commencement of the applicable [**] period. The Parties shall agree on the exact date for the delivery of such Product, provided that MRK shall place its orders for such Product at least [**] prior to MRK’s use or transfer of the assays to a Test Lab. MRK shall reimburse ArcherDX for such Product in accordance with Section 5.3. |
10.5 | Orders. Together with each forecast provided under Section 10.4, MRK shall submit to ArcherDX a Purchase Order that is consistent with the requirements of Product set forth in such forecast, specifying the types of Product (e.g. Prototype Assays or Analytically-Validated Assays as applicable), identifying the Clinical Trial(s) for which the Purchase Order is issued, specifying delivery destination, delivery dates and shipping instructions (including the carrier suggested to be used, but which shall be agreed to by the Parties as provided in Section 10.9) with respect to each shipment. The requested delivery date of the Product in such submitted Purchase Order will be no less than [**] from the date of such Purchase Order by MRK, but acceptance of such Purchase Order shall be subject to Section 10.8. |
10.6 | Specifications. The Parties acknowledge that the Specifications for the Product will be finalized as part of the applicable Project Agreement and that the required lead times for Purchase Orders may need to change in accordance with the Specifications |
10.7 | Variances. In the event that MRK becomes aware that the actual amount of Product required in any [**] period which is set forth in any applicable forecast is likely to be materially different [**] of the quantity set forth in such forecast) from the amount set forth in such forecast, MRK shall notify ArcherDX immediately. ArcherDX shall exert Commercially Reasonable Efforts to accommodate MRK’s request for such variance. |
10.8 | Form of Orders. MRK’s orders shall be made pursuant to a written purchase order in the form customarily used by MRK (each, a “Purchase Order”), and shall be submitted in accordance with Sections 10.5, and provide for shipment in accordance with reasonable delivery schedules and lead times as may be agreed upon from time to time by ArcherDX and MRK. ArcherDX shall, within ten (10) Business Days after receipt of such Purchase Order, either acknowledge and accept such Purchase Order or notify MRK that it is unable to accept such Purchase Order. If ArcherDX is unable to accept any Purchase Order, the Parties shall consult on what modifications need to be made to such Purchase Order so that ArcherDX can accept it. For the avoidance of doubt, the Project Agreement will contain an estimate on the amount of Product required for the Clinical Trials. ArcherDX may withhold acceptance of a Purchase Order if such Purchase Order materially differs (i) from the amounts of Product originally agreed upon in the Project Agreement, or (ii) from the requirements of Article 10. Unless otherwise specified, all references to Purchase Orders in this Agreement shall refer to Purchase Orders acknowledged and accepted by ArcherDX pursuant to this Section. ANY ADDITIONAL OR INCONSISTENT TERMS OR CONDITIONS OF ANY PURCHASE ORDER, ACKNOWLEDGMENT OR SIMILAR STANDARDIZED FORM GIVEN OR RECEIVED PURSUANT TO THIS AGREEMENT OR A PROJECT AGREEMENT SHALL HAVE NO EFFECT AND SUCH TERMS AND CONDITIONS ARE HEREBY EXCLUDED. |
10.9 | Delivery. ArcherDX shall use its Commercially Reasonable Efforts to manufacture, ship, and deliver the quantities of Product ordered by MRK on the dates specified in MRK’s Purchase Orders. Subject to the terms and conditions of this Agreement and the applicable Project Agreement, during the Term, ArcherDX will manufacture, or otherwise obtain, and will maintain, adequate inventories of components required for production of the Product. |
10.9.1 | All Product shall be delivered DDP (Incoterms 2010) Testing Lab. The carrier shall be selected by agreement between ArcherDX and MRK, provided that in the event no such agreement is reached, MRK shall select the carrier. Each shipment shall be insured for the benefit of MRK. All shipping and insurance costs, as well as any special packaging expenses, shall be paid by MRK. |
10.9.2 | All Product shall be packed and shipped to the delivery destination(s) set forth in such Purchase Order in a manner consistent with the packaging and handling instructions of ArcherDX with respect to such Products, which may be amended from time to time by the written agreement of the Parties, and shall be accompanied by the appropriate quality certificates. All Products shall be appropriately labeled with a traceable Lot number, date of production, or expiration date, and appropriately labeled to reflect the intended use. The packing slip for the Products shall also contain: item number, quantity of Products, shipment date and ship to address as specified by MRK in its Purchase Order. Risk of loss or damage and title to any Products shipped by or on behalf of ArcherDX to MRK or MRK’s designated delivery destination (including any Test Lab) shall both pass to MRK upon delivery to the common carrier. |
10.9.3 | Upon request by MRK, ArcherDX shall ship such Products to one or more clinical laboratory(ies) (including any Test Labs) or investigator(s) designated by MRK. In the case where MRK desires that such Products be supplied to a Test Lab, as an alternative to MRK ordering such Product, such Products may be ordered at MRK’s direction directly by the Test Lab placing an order with ArcherDX in accordance with Sections 10.5 and 10.8. Such Products shall be supplied, pursuant to the terms of this Agreement, and ArcherDX may at its sole discretion direct any invoice related to such supply directly to MRK. |
10.10 | Acceptance/Rejections |
a) | Notice. In such notice MRK shall specify the delivery, purchase order number, the Lot number and the exact nature of the non-conformity, along with reasonable evidence of such non-conformity (including a sample of the Non-Conforming Product). All Products delivered to MRK under this Agreement and the applicable Project Agreement shall be deemed to conform with applicable Specifications and GMP unless ArcherDX receives from MRK written notice within [**] provided in this Section 10.10.3. |
b) | Return. Any and all Non-Conforming Product shall, unless otherwise agreed by the Parties, be returned to ArcherDX, at ArcherDX’s cost, for investigation and possible further testing. If after its own analysis of the alleged Non-Conforming Product, ArcherDX confirms that the returned Products are Non-Conforming Product, then ArcherDX shall replace the quantity of Non-Conforming Product. Unless the Non-Conforming Product is demonstrated to be due to the acts or omissions of ArcherDX, the cost of such replacement Products shall be at MRK’s sole expense. For clarity, MRK will not pay for Non-Conforming Product demonstrated to be due to the acts or omissions of ArcherDX, and if discovery of such Non-Conforming Product occurs after MRK has paid for such product and ArcherDX has unsuccessfully tried to replace the alleged Non-Conforming Product, then ArcherDX shall either refund the payment to MRK, or, at MRK’s discretion, credit such refund against future payments owed by MRK to ArcherDX. |
c) | Dispute. In the event the Parties cannot agree as to whether or not any delivered Products are Non-Conforming Products, the Parties shall submit samples of the disputed Products to an independent testing organization or consultant of repute within the medical device industry, experienced in drug product testing, mutually agreed upon by the Parties (the “Independent Laboratory”) for testing with respect to the Specifications for the Product using the Testing Methods. The appointment of such Independent Laboratory shall not be unreasonably withheld or delayed by any Party. The decision of the Independent Laboratory shall be in writing and, save for manifest error on the face of the decision, shall be binding on both ArcherDX |
d) | Wrongful Return. Notwithstanding any other provision of this Agreement and the applicable Project Agreement, MRK shall be obligated to pay in full for any rejected shipment of Products that is subsequently determined to conform with the applicable GMP and Specifications. |
e) | No other Returns. For the avoidance of doubt, except according to Section 10.10.4b), MRK shall not be entitled to return any Products other than those that are finally determined to be Non-Conforming Product pursuant to this Section 10.10. |
10.11 | Delay or Failure to Supply |
10.11.1 | ArcherDX shall notify MRK: (i) as promptly as possible, but in no event more than ten (10) days after ArcherDX’s receipt of a Purchase Order from MRK as provided in Section 10.5 or (ii) immediately upon becoming aware of an event of force majeure under Section 18.13 of this Agreement, or any other event impacting supply, if ArcherDX determines that it will be unable to supply the quantity of Products to MRK that ArcherDX is required to supply under this Article 10 by the requested delivery date for such Products as set forth in the Purchase Order or within forty-five (45) calendar days thereafter. |
10.11.2 | If ArcherDX notifies MRK it will be unable to supply the quantity of Products according to Section 10.11.1, the DLs, or the manufacturing team established by the DLs to manage the day-to-day activities, shall convene to discuss the cause of the inability to supply and make recommendations regarding the appropriate remedies. ArcherDX shall use Commercially Reasonable Efforts to implement all measures recommended by the DLs or the manufacturing team to remedy such supply delay/failure, and to resume and complete supply as quickly as reasonably possible, and shall notify MRK in writing upon resumption of supply. ArcherDX will develop, document, maintain and adequately support a capacity planning, disaster recovery and business continuity program to ensure supply, including maintaining adequate levels of inventory/safety stock of materials and finished/semi-finished inventories, and service of Product as referenced in each Work Plan and Budget. Such plans will be consistent with ArcherDX’s standard business practices. |
10.11.3 | In the event of any delay or failure of ArcherDX to supply as described in Article 10 for any reason, except due to a force majeure event, occurring: (i) in any two consecutive three (3) month periods; or (ii) for two three (3) |
10.12 | Delayed Regulatory Approval. In the event that the Drug in a country obtains Regulatory Approval prior to Regulatory Approval of the Product, but the relevant Regulatory Authority allows use of the unapproved Product with the approved Drug, ArcherDX will manufacture and supply Products to MRK for such country consistent with any requirements or guidance by the relevant Regulatory Authority pursuant and as further agreed between the Parties subject to Section 9.4. |
11 | Commercialization |
11.1 | Exclusivity. ArcherDX shall have the exclusive right and responsibility for the worldwide manufacture, marketing, supply and commercialization of the Product, including determining and creating marketing plans, pricing, market access, sales, training, life cycle management and tools related to the Product. For the avoidance of doubt, MRK shall have the exclusive right and responsibility for the worldwide manufacture, marketing, supply and commercialization of the Drug, including determining and creating marketing plans, pricing, market access, sales, training, life cycle management and tools related to the Drug. |
11.2 | Diligence. ArcherDX will use Commercially Reasonable Efforts to (a) make each Product and Instrument commercially available in sufficient quantities and within a reasonable timeframe in the MRK Markets, (b) thereafter maintain the Product’s commercial availability and promote, market, distribute and sell the Product in the MRK Markets, and (c) provide MRK with the Product at the MRK Research Price or the MRK Commercial Price as applicable. MRK will use Commercially Reasonable Efforts to provide forecasting to ArcherDX for the purpose of manufacturing the Product. |
11.3 | Step in Rights. In the event that ArcherDX will not or cannot launch the Product in a MRK Market as determined in good faith jointly by the Parties in the JCT (whether or not there is a material breach), MRK shall have the right to purchase the Product directly from ArcherDX at the MRK Commercial Price. In the event ArcherDX fails, due solely to factors within ArcherDX’s reasonable control, to obtain or retain any required Regulatory Approval in a MRK Market in a reasonable amount of time, which may exceed the estimated time line in the Project Agreement, MRK shall have the right and licenses to use all data controlled by ArcherDX necessary to obtain and retain Regulatory Approval in such MRK Market. The foregoing will include the right to reference master files with Regulatory Authorities concerning the Instrument. |
11.4 | Marketing Co-Operation. The Parties will, through the JCT discuss marketing strategies and sales force activities and a coordinated approach for the marketing of the Product and the Drug, including with respect to identification of market |
11.5 | Markets for Regulatory Approval and Commercialization. In connection with the Regulatory Approval of a Drug which includes a reference to a Product, ArcherDX shall use Commercially Reasonable Efforts to obtain Regulatory Approval of the Product in the MRK Market(s) in parallel with or as soon as practicable after such Regulatory Approval of the Drug. In the event that the Parties agree to pursue Regulatory Approval for the Product in market(s) outside the initially agreed MRK Markets, the Parties shall amend the Work Plan and Budget to reflect [**] for the additional activities required to obtain such additional Regulatory Approval(s), and ArcherDX shall be granted [**] to obtain Regulatory Approval(s) for such additional MRK Market(s). |
11.6 | Coding and Nomenclature. ArcherDX will use Commercially Reasonable Efforts to ensure that the Product relies on established (analyte- or platform specific) reimbursement coding / nomenclature, if available, to ensure routine Product access within a reasonable amount of time prior to the Drug launch. ArcherDX will use Commercially Reasonable Efforts to assess existing reimbursement codes and identify if novel coding is required. Additionally, ArcherDX will be responsible for preparing and executing required submissions and will use Commercially Reasonable Efforts to obtain appropriate coding for the Product by the time of Drug launch. |
11.7 | Health Technology Assessment (HTA) / Coverage Policy. ArcherDX will undertake the Product portion of the HTA submission. MRK shall supply ArcherDX with necessary supporting documentation under its possession, custody or control for the HTA submission. In each country with parallel or joint review of Product and Drug HTA submissions, MRK will undertake such Product and Drug HTA submission. In each country with distinct reviews of Product and Drug HTA submissions, ArcherDX will undertake the Product HTA submission, subject to MRK’s reasonable review of such Product HTA submission. MRK and ArcherDX shall jointly manage efforts to gain payor coverage through special pathways (e.g. INCa in France) where formal technology appraisals may be required. |
11.8 | Pricing and reimbursement. The Product pricing shall reflect existing payment rates in established fee schedules where available. ArcherDX shall price the Product |
11.9 | Evidence and Quality. ArcherDX will train laboratory customers and make available tools (controls, surveillance guidelines) for monitoring quality standards to support all Product formats. |
11.10 | MRK’s right to purchase the Product. For all of MRK’s research and development efforts, MRK can purchase the Product from ArcherDX at the MRK Research Price. In all other instances, and subject to Section 11.1, MRK can purchase the Product from ArcherDX at the MRK Commercial Price. |
11.11 | Commercialization Costs. ArcherDX shall be responsible for the payment of all costs it incurs in connection with its marketing and commercialization of the Product (“Commercialization Costs”). |
11.12 | Changes to Labeling. On an ongoing basis and with a reasonable notice, MRK will promptly notify ArcherDX of any changes to the Drug labeling relevant for the Product, including actual and potential changes based on notifications from Regulatory Authorities. Such changes will be implemented by MRK with a reasonable lead time to ArcherDX. Similarly, ArcherDX will promptly notify MRK of any changes to the Product labeling relevant for the Drug, and ArcherDX will implement such changes with a reasonable lead time to MRK. |
11.13 | Changes and Improvements |
11.13.1 | ArcherDX Improvements. ArcherDX shall inform MRK about any changes and improvements made to a Product or an Instrument that ArcherDX deems to be relevant to the Clinical Trials, development, obtaining Regulatory Approval for or commercialization of a Drug covered by the same Project Agreement as such Product or Instrument. |
11.13.2 | Instrument Changes. If applicable to a Project Agreement, and in case of changes to or discontinuation of an Instrument, ArcherDX will use Commercially Reasonable Efforts, at its own expense, to ensure that the Product retains its Regulatory Approvals on the changed or new instrument in the MRK Markets and that the changed or new instrument is available in the MRK Markets. |
11.13.3 | MRK Improvements. MRK shall inform ArcherDX about any changes and improvements made to a Drug or a Compound that MRK deems to be relevant to the development, obtaining Regulatory Approval for or commercialization of a Product covered by the same Project Agreement as such Drug or Compound. |
11.14 | Failure to Supply for Commercial Purposes |
11.14.1 | Notification of Failure to Supply. If either Party foresees that Failure to Supply will occur for a Product in one or more MRK Markets, such Party will promptly provide written notification to the other Party thereof. Thereafter, the alliance managers shall meet as soon as possible, and in any event not more than five (5) days following delivery of such notice, and exchange all information regarding the possible Failure to Supply. |
11.14.2 | ArcherDX Right to Remedy. Following the meeting of the alliance managers as set forth above, if the Parties are unable to resolve or agree on a remedy for such Failure to Supply, MRK shall provide ArcherDX with a written notice thereof, and ArcherDX shall be given a period of [**] (or such other time period as may be agreed upon by the Parties) following MRK’s notice of the Failure to Supply, to remedy such Failure to Supply. |
11.14.3 | ArcherDX Obligations in case of Continued Failure to Supply. If ArcherDX fails to remedy a Failure to Supply or to initiate such measures which the Parties reasonably agree to be sufficient to remedy the Failure to Supply within [**] (or other period agreed upon), ArcherDX shall, to the extent legally possible: |
a) | grant to MRK a nonexclusive and, subject to paragraph c) below revocable, right and license, with the right to grant sublicenses, under all relevant Intellectual Property owned or Controlled by ArcherDX or its Affiliates, as necessary to use, have used, sell, have offered for sale, import, have imported, distribute or have distributed and otherwise commercialize the Product in such MRK Market(s) for which the Failure to Supply occurs or is expected to occur. Such right and license shall be fully paid up and royalty-free, provided however that MRK shall compensate ArcherDX for ArcherDX’s related financial obligations towards third party licensors. In case of Failure to Manufacture, such license shall include a license to make or have made the Product anywhere in the world; and |
b) | transfer to MRK (or its sub-licensee) and permit MRK (or its sub-licensee) to reference and use any Regulatory Submissions, other regulatory materials, and other documentation and information to the extent necessary to enable MRK (or its sub-licensee) to obtain Regulatory Approval for the Product in the MRK Market(s) where the Failure to Supply occurs or is expected to occur, and otherwise fully cooperate with MRK (or its sub-licensee), to enable MRK (or its sub-licensee) to obtain Regulatory Approval for the relevant Product in the relevant MRK Market(s). In case of Failure to Manufacture ArcherDX shall also transfer to MRK (or its sub-licensee) and permit MRK (or its sub-licensee) to reference and use all materials (and |
c) | MRK may continue to exercise the licensed rights provided in this Section 11.14.3 at least for a period of three (3) months and, thereafter, only until ArcherDX notifies MRK that it has remedied the Failure to Supply, and has reasonably demonstrated over a reasonable period of time of not less than three (3) months (during which ArcherDX shall supply the Product in parallel to MRK (or its sub-licensee)) that ArcherDX is again able to supply Products to the MRK Markets in sufficient quality and quantity to reasonably comply with the Commercialization Plan for the Product. Each Third Party that MRK designates to manufacture the Products must also agree in writing with ArcherDX to observe the terms of this Agreement relating to confidentiality of Products and ArcherDX’s proprietary rights and Confidential Information transferred pursuant to this Section 11.14.3, in particular, the identification and protection of ArcherDX’s trade secrets. |
11.14.4 | ArcherDX Manufacturing in case of Failure to Distribute. In case of Failure to Distribute, ArcherDX shall continue to manufacture the Product for the MRK Markets for which the Failure to Distribute occurs, and ArcherDX shall supply the relevant Product to MRK (or its sub-licensee) at the MRK Commercial Price for distribution into such markets. |
12 | Intellectual Property |
12.1 | Background IP. Each Party shall continue to Control its Background IP. |
12.2 | Foreground IP. ArcherDX will own all rights, title and interest to the Diagnostic Foreground IP and MRK will own all rights, title and interest to the Compound Foreground IP. All rights, title and interest to any other Foreground IP, if any, will be owned jointly by the Parties in equal parts. |
12.3 | Inventors, Foreground IP. If a Party’s employees, agents, consultants or contractors are named as inventors in a patent application for the other Party’s Foreground IP, such Party shall ensure that any and all rights of such employees, agents, consultants or contractors to the other Party’s Foreground IP are assigned to the other Party. The inventorship to Foreground IP shall be determined in accordance with U.S. patent laws for determining inventorship. |
12.4 | Background IP. Each Party shall, in its sole discretion, be responsible for the filing, prosecution, maintenance, abandonment and enforcement of its own Background IP. Each Party will bear its own costs for its own Background IP. |
12.5 | Compound Foreground IP. MRK shall, at its sole discretion, be responsible for the filing, prosecution, maintenance, abandonment and enforcement of the Compound Foreground IP. MRK will bear its own costs for the Compound Foreground IP. |
12.6 | Diagnostic Foreground IP. ArcherDX shall, at its sole discretion, be responsible for the filing, prosecution, maintenance, abandonment and enforcement of the Diagnostic Foreground IP. ArcherDX will bear its own costs for the Diagnostic Foreground IP. |
12.7 | Cooperation, Foreground IP. Details of the filing, prosecution, maintenance, abandonment and enforcement of any Foreground IP which is not Compound Foreground IP or Diagnostic Foreground IP, if any, shall be within the responsibilities of the DLs as set forth in Section 4.3.1i). Each Party shall reasonably cooperate and lend assistance to the other Party in the filing, prosecution, maintenance and enforcement of the Foreground IP, including by (a) making scientists and scientific records reasonably available, (b) making reasonably available its respective authorized attorneys, agents or representatives, and (c) signing or using Commercially Reasonable Efforts to have signed and delivered, at no charge to the other Party, all documents reasonably necessary in connection with the prosecution, filing, maintenance and enforcement of the Foreground IP. |
12.8 | Patent Filing Strategy. In order to align the Parties’ patent filing strategy the Parties agree as follows: |
12.8.1 | The interaction between the Parties according to this Section shall be coordinated by the IP departments or legal departments of the Parties, as deemed appropriate. |
12.8.2 | Before filing a patent relating to Diagnostic Foreground IP that names a MRK Inventor, in the case of an ArcherDX patent filing, or before filing a patent relating to Compound Foreground IP that names an ArcherDX inventor, in the case of a MRK patent filing, the party filing the patent (“Filing Party”) shall make a draft patent application available to the other Party (“Reviewing Party”) for review. |
12.8.3 | The Reviewing Party shall have a period of thirty (30) days for reviewing the draft patent application. |
12.8.4 | In case the Reviewing Party identifies subject matter in the draft that it deems to be owned by it according to Section 12.2, and that it deems to be |
12.8.5 | For clarity, in case such Conflicting Subject Matter has been identified to the Filing Party, the Filing Party shall not have the right to file such patent application with any patent office worldwide until all disputes between the Parties have been finally resolved. However, the Filing Party shall have the right, in order to secure a beneficial filing date, to file such application with the USPTO as a provisional patent application on the same or subsequent day, and with the same contents, as the draft patent application provided to the Reviewing Party in accordance with Section 12.8.2 (the “First Filed Application”), provided however, that should the Parties later decide to amend the patent application or if the Parties are unable to resolve the disputes regarding Conflicting Subject Matter, such First Filed Application in case of a patent relating to Diagnostic Foreground IP shall lapse, and such First Filed Application shall not be used as a basis for a priority claim of a subsequent filed patent application. |
12.9 | Licenses to Intellectual Property |
12.9.1 | ArcherDX License Grant to MRK for ArcherDX Background IP. Upon entry into force of each Project Agreement ArcherDX grants to MRK and its Affiliates a nonexclusive, worldwide, fully paid-up, royalty-free license, with the right to grant sublicenses (including to its collaboration partners but in that case only with ArcherDX’s prior written consent which shall not be unreasonably withheld), to use and practice under the ArcherDX Background IP (i) for the sole purpose of performing MRK’s Activities under such Project Agreement; and (ii) solely as necessary to develop, market, make, have made, use, sell, have sold, offer for sale, export and import the Drug for use in connection with the Product. |
12.9.2 | MRK License Grant to ArcherDX for MRK Background IP. Upon entry into force of each Project Agreement MRK grants to ArcherDX a nonexclusive, worldwide, fully paid-up, royalty-free license, with the right to grant sublicenses (including to its collaboration partners but in that case only with MRK’s prior written consent which shall not be unreasonably |
12.9.3 | ArcherDX License Grant to MRK for Diagnostic Foreground IP. Upon entry into force of each Project Agreement ArcherDX grants to MRK a nonexclusive, worldwide, fully paid-up, royalty-free license to use and practice under the Diagnostic Foreground IP and any jointly owned Foreground IP within MRK’s ordinary course of business as of the Effective Date, that being research, development, manufacture and commercialization of pharmaceutical products, and explicitly excluding diagnostic products in general. Except as otherwise set forth in Section 16.6, MRK may not sublicense the license granted by ArcherDX under this Section 12.9.3 to any Third Party (except to MRK’s Affiliates) without ArcherDX’s prior written consent. |
12.9.4 | MRK License Grant to ArcherDX for Compound Foreground IP. Upon entry into force of each Project Agreement MRK grants to ArcherDX a nonexclusive, worldwide, fully paid-up, royalty-free license to use and practice under the Compound Foreground IP and any jointly owned Foreground IP within ArcherDX’s ordinary course of business as of the Effective Date, that being research, development, manufacture and commercialization of diagnostic products, and explicitly excluding pharmaceutical products. ArcherDX may not sublicense the license granted by MRK under this Section 12.9.4 to any Third Party (except to ArcherDX’s Affiliates) without MRK’s prior written consent. |
12.9.5 | Third Party Licenses. The Parties acknowledge that additional licenses or rights from Third Parties may be required in order to perform the Activities or to commercialize the Product in the Territory. The Parties shall exert Commercially Reasonable Efforts to identify and discuss such requirements. It shall be at each Party’s sole discretion whether or not to enter into an agreement with a Third Party regarding such licenses or rights. |
12.9.6 | Separate License Agreements. MRK may, at its sole discretion and in addition to the rights granted under Section 12.9.2, grant to ArcherDX under a separate license agreement rights necessary or useful for ArcherDX. |
12.10 | No Implied Rights. Except as expressly provided in this Agreement or in the individual Project Agreement, neither Party shall have any right in any Intellectual Property Controlled by the other Party on or after the effective date of each Project Agreement. |
12.11 | Product Trademark. ArcherDX shall use Commercially Reasonable Efforts in accordance with its usual business practice with respect to filing, prosecuting, maintaining and enforcing any Product trademark. Product trademarks shall be exclusively owned by ArcherDX. |
12.12 | Drug Trademark. MRK shall use Commercially Reasonable Efforts in accordance with its usual business practice with respect to filing, prosecuting, maintaining and enforcing any Drug trademarks. Drug trademarks shall be exclusively owned by MRK. |
12.13 | Mutual Trademark License Grant. ArcherDX hereby grants to MRK the right to reference Product trademarks worldwide in advertising, promotion and marketing of the related Drugs, and MRK hereby grants to ArcherDX the right to reference the Drug trademarks worldwide in the advertising, promotion and marketing of the related Products; provided, however, that any use by a Party of the other Party’s trademarks beyond references permitted under Applicable Laws shall be subject to the other Party’s prior written approval. In making reference to any trademark of the other Party hereunder, the Parties shall display the said marks in accordance with the corporate standards of the Party whose mark is being displayed, and in any event such display shall be made in upper case letters or otherwise display it in a style or size of print distinguishing the mark from any accompanying wording or text. |
13 | Warranties, Limitation of Liability, Indemnification and Insurance |
13.1 | Mutual General Warranties. Each Party represents and warrants to the other Party that: (a) it is a corporation duly organized validly existing and in good standing under the laws of Germany, in the case of MRK and the laws of the United States of America in the case of ArcherDX; (b) it has obtained all necessary consents, approvals and authorizations of all governmental authorities and other persons or entities required to be obtained by it in connection with entering into this Agreement; and (c) the execution, delivery and performance of this Agreement have been duly authorized by all necessary corporate action on its part. |
13.2 | Instrument Statement. ArcherDX has, to the best of its knowledge as of the Effective Date, the required rights and freedom to operate on the Instrument. |
13.3 | Disclaimer for Results. Neither Party makes any representation or warranty to the other Party concerning the achievement of expected results, or that any results emanating from the activities contemplated under this Agreement or any Project Agreement (i) have certain commercial or functional use or benefits, (ii) may or can be formally kept in force or remain materially valid, (iii) can be used industrially or without any risk of personal injury or material damage, (iv) can be used without requiring permits or without any risk, or (v) that the use of such results may not lead to infringement in the rights of Third Parties. |
13.4 | No Additional Representations or Warranties. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO INTELLECTUAL PROPERTY RIGHTS, MATERIALS OR CONFIDENTIAL INFORMATION SUPPLIED BY IT TO THE OTHER PARTY HEREUNDER, AND EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT. |
13.5 | Indirect Damages. SUBJECT TO SECTIONS 13.6 THROUGH 13.9 BELOW, TO THE MAXIMUM EXTENT PERMISSIBLE BY APPLICABLE LAWS, IN NO EVENT SHALL MRK OR ARCHERDX OR THEIR AFFILIATES’ RESPECTIVE OFFICERS, AGENTS, OR EMPLOYEES BE LIABLE WITH RESPECT TO ANY MATTER ARISING OUT OF OR RELATED TO THEIR PERFORMANCE OF THIS AGREEMENT UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY PUNITIVE, EXEMPLARY, INCIDENTAL, INDIRECT OR CONSEQUENTIAL DAMAGES, OR FOR LOSS OF BUSINESS OR GOOD WILL, LOSS OF REVENUE OR LOST PROFITS. |
13.6 | LIMITATION. NOT WITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, EXCEPT AS FOR EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER ARTICLE 13.7, OR EITHER PARTY’S BREACH OF ITS OBLIGATIONS UNDER ARTICLE 14, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE COMBINED MAXIMUM, AGGREGATE LIABILITY OF SUCH PARTY AND ITS AFFILIATES AND APPROVED SUBCONTRACTORS HEREUNDER WITH RESPECT TO ALL SUITS, ACTIONS, LEGAL PROCEEDINGS, CLAIMS, DEMANDS, DAMAGES, COSTS, EXPENSES AND OTHER LIABILITIES CAUSED BY OR ARISING OUT OF THIS AGREEMENT OR ANY PROJECT AGREEMENT OR THE PERFORMANCE OR NON-PERFORMANCE OF ACTIVITIES PURSUANT TO ANY PROJECT AGREEMENT, WHETHER BASED ON CONTRACT, WARRANTY, TORT (INCLUDING WITHOUT LIMITATION, NEGLIGENCE), STRICT LIABILITY, STATUTE OR OTHERWISE IS HEREBY LIMITED TO THE LESSER OF: (A) THE AGGREGATE DIRECT, ACTUAL LOSSES INCURRED BY THE OTHER PARTY AS A RESULT OF A PARTY’S BREACH (OR BREACHES) OF THIS AGREEMENT, AND (B) (I) [**], AND (II) [**]. |
13.7 | Indemnification. ArcherDX agrees to indemnify, defend, and hold harmless MRK and its officers, directors, and employees from and against all Third Party claims, demands, liabilities, suits, damages, costs, and expenses of every kind and description, including penalties and reasonable attorneys’ fees, (collectively “MRK Claims”) to the extent proximately resulting from any negligent act or omission of ArcherDX or its officers, directors, or employees, or from any breach by ArcherDX |
13.8 | Indemnification Procedure. The indemnifying Party’s (the “Indemnifying Party”) obligation to indemnify, defend, and hold harmless as set forth above is conditioned on the other Party (the “Indemnified Party”) (i) providing written notice to the Indemnifying Party of any Claim for which it is seeking indemnification hereunder promptly after the Indemnified Party has knowledge of such Claim; (ii) permitting Indemnifying Party to assume full responsibility to investigate, prepare for and defend against any such Claim; (iii) assisting Indemnifying Party, at Indemnifying Party’s reasonable expense, in the investigation of, preparation for, and defense of any such Claim; and (iv) not compromising or settling such Claim without Indemnifying Party’s written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Both Parties are obliged to mitigate any losses that may be claimed by the Indemnified Party or the claiming Third Party. |
13.9 | Insurance. Each Party shall maintain, through self-insurance or commercially placed insurance, adequate commercial general liability and products liability insurance, necessary to satisfy its obligations hereunder and consistent with pharmaceutical and diagnostic industry practices. Without limiting the foregoing, with respect to the conduct of the Clinical Trial by MRK, MRK shall maintain, through self-insurance or commercially-placed insurance, adequate commercial general liability and products liability insurance, necessary to satisfy its obligations hereunder and consistent with pharmaceutical industry practices. It is understood that such insurance shall not be construed to create a limit of a Party’s liability with respect to its indemnification obligations or otherwise. |
14 | Confidentiality |
14.1 | Confidentiality Obligation. During the Term of this Agreement and for a period of ten (10) years thereafter, the Receiving Party shall (a) only use the Confidential Information for the purposes of this Agreement and (b) shall keep confidential and not publish, make available or otherwise disclose the Disclosing Party’s Confidential Information, except to its and its Affiliates’ directors, officers, employees, advisors or representatives of the Receiving Party with a need to know such Confidential Information and who are bound by confidentiality and non-use obligations in all material respects equal to those undertaken by the Receiving Party hereunder. The Receiving Party will protect the Disclosing Party’s Confidential Information consistent with the policies and procedures that the Receiving Party uses to protect its own Confidential Information of a similar nature (including trade secrets), but as a minimum with a reasonable degree of care. |
14.2 | Disclosures Required by Law. This Agreement will not be deemed to restrict either Party from complying with a request, a lawfully issued governmental or court order that obligates the Receiving Party to disclose Confidential Information. Any disclosure shall, however, be restricted to what is legally required to comply with such request and the Receiving Party shall immediately inform the Disclosing Party of any such request and to the extent possible consult with the Disclosing Party before a decision to disclose Confidential Information is made. |
14.3 | Press Releases and Use of Name. Except as provided for in relation to publications in Section 14.4 and in relation to trademarks in Section 12.13, neither Party shall make any public announcement relating to this Agreement or the transactions covered by it or mention or otherwise use the name, insignia, symbol, trademark, trade name or logotype of the other Party or its Affiliates in any publication, press release, promotional material or other form of publicity without the prior written approval of the other Party in each instance. |
14.4 | Publications. Neither Party will submit any article or other document related to this Agreement that contains the other Party’s Confidential Information for publication in any scientific journal or other publication without the prior review and written consent of the other Party, such consent not to be unreasonably withheld. Publications shall be presented by a Party to the other Party in writing prior to disclosing such publications to a Third Party, and the receiving Party then has an obligation to object to such publication as soon as possible and in no event later than forty-five (45) days after the receipt hereof. If no such objection is received within such time, the publication shall be deemed to have been approved by the receiving Party. Both Parties shall have the right to obtain an additional delay in publication in order to protect patentable information, or in case a Party would require and the other Party prefer, obtain modifications to the publication for patent reasons or have Confidential Information removed from the proposed publication. The additional delay required by a Party in order to protect patentable information shall not exceed sixty (60) days |
14.5 | Project-Specific Confidential Information. The Provisions in Sections 14.1 through 14.4 shall apply to any Confidential Information exchanged in connection with a specific Project Agreement for the duration of such Project Agreement and five (5) years thereafter. |
15 | Term and Termination of this Agreement |
15.1 | Term. This Agreement shall commence on the Effective Date and shall continue in effect until terminated in accordance with this Agreement (the “Term”). |
15.2 | Termination for Cause. In the event that either Party materially breaches its obligations under this Agreement, the other Party shall provide to the non-performing Party a written notification of such default specifying the nature of the breach. If such breach is not cured within sixty (60) calendar days to the mutual satisfaction of both Parties, the non-breaching Party shall have the right to terminate this Agreement without further notice. Termination by a Party for breach by the other Party shall be without prejudice to any damages or remedies to which it may be entitled from the other Party. |
15.3 | Termination for Convenience. In the event that no Project Agreement should be active, and has not been active for at least two (2) years, under this Agreement either Party shall have the right but not the obligation to terminate this Agreement with [**] written notice. |
15.4 | Termination for reasons other than cause. Notwithstanding the above, any Party may terminate this Agreement and any Projects Agreements immediately by written notice to the other Party, if the other Party becomes insolvent, makes or has made an assignment for the benefit of creditors, is the subject of proceedings in voluntary or involuntary bankruptcy instituted on behalf of or against it (except for involuntary bankruptcies which are dismissed within ninety (90) calendar days), liquidation, or has a receiver or trustee appointed for substantially all of its property. |
15.5 | Effects of Termination of this Agreement. If one or more Project Agreements are in force at the termination of this Agreement, the Parties agree to discuss in good faith the completion or wind-down of Projects comprised by such Project Agreement(s) in accordance with the provisions set forth below, unless mutually agreed otherwise between the Parties. |
15.5.1 | If the Parties agree that one or more ongoing Projects should be completed, such completion shall, without prejudice to ArcherDX’s other compensation and remedies under this Agreement, be subject to the payments agreed in the applicable Project Agreement. |
15.5.2 | Upon the later of the termination of this Agreement or any Project Agreement, both Parties shall either destroy or return to each other all Confidential Information that has been provided by each Party to the other (except for one copy which may be retained for archival purposes) and any other property of the other Party or paid for by such other Party provided to the other Party under this Agreement or any Project Agreement. |
15.5.3 | Termination of this Agreement shall not affect any rights and obligations of the Parties that accrued prior to termination. |
15.6 | Survival. The respective rights and obligations of the Parties under Sections 15.5 and 15.6, and Articles 12, 13, 14, 16, 17, and 18, as well as any relevant defined terms contained within these provisions or in Article 1, shall survive indefinitely the termination of this Agreement. Additionally, any rights and obligations of the Parties shall survive the termination of this Agreement to the extent specifically stated in any provisions of this Agreement. |
16 | Term and Termination of Project Agreements |
16.1 | Term. Each Project Agreement shall come into force on the agreed effective date and (unless terminated previously by one of the Parties or otherwise mutually agreed) shall remain in effect until the earlier of MRK’s cessation of the sales or the offer for sale of the Drug, or six (6) months from a decision by the DLs to substantially halt Activities and such Activities not being resumed within such six (6) months period. |
16.2 | MRK Termination of Project Agreements. MRK may terminate a Project Agreement by providing thirty (30) Business Days’ written notice to ArcherDX. |
16.3 | Termination for Material Breach. In the event that either Party considers the other Party to be in material breach of its obligations under a Project Agreement, that Party shall provide the breaching Party with written notification of such material breach specifying the nature of the alleged breach and requesting the breaching Party to carry out those actions necessary to cure such breach. If the breach is not cured (or all reasonable steps (as determined mutually by ArcherDX and MRK in good faith) taken to cure it) within forty-five (45) calendar days from the date of such written notification, the non-breaching Party shall have the right to (i) undertake, or negotiate in good faith with the breaching Party for others to carry out such actions necessary and appropriate to cure such breach at the expense of the breaching Party; or (ii) terminate the Project Agreement with immediate effect upon written notice. Termination by a Party for breach by the other Party shall be without prejudice to any damages or remedies to which it may be entitled from the other Party under Applicable Laws. |
16.4 | Effects of Expiration and Termination; Generally. Upon the expiration of the term of a Project Agreement or in case of either Party’s termination of a Project Agreement, for any reason, the following provisions shall apply: |
16.4.1 | Payments. Each Party will remain responsible for the payments it is responsible for under a Project Agreement up until the effective date of termination, including the payments according to the Work Plan and Budget that have been incurred and initiated by ArcherDX at the time of a notice of termination becoming effective and any other termination expenses agreed to by the DLs. In the event of termination of a Project Agreement, the Parties shall use Commercially Reasonable Efforts to cease work and close-out or wind-down the Project and to mitigate the costs incurred during such close-out or wind-down of the Project. Nevertheless, there shall be an accounting of costs and expenses related to the current Project Phase, which shall include MRK’s payment to ArcherDX of a reasonable wind-down fee. Such wind-down fee shall include but not exceed [**]. Any costs that have been pre-paid by MRK without being incurred by ArcherDX, may be credited against the wind-down payment due to ArcherDX. If the pre-payment exceeds the wind-down payment the excess amount shall be refunded by ArcherDX to MRK. |
16.4.2 | Return of Confidential Information. Upon termination of a Project Agreement each Party shall return to the other Party all Confidential Information received in connection with the relevant Project (except for one (1) copy hereof which may be retained in order to ensure compliance with the terms of the Project Agreement). |
16.4.3 | Return of Research Material and other Supplies or Property. In case of expiration or earlier termination of a Project Agreement, or in case a of termination of the entire Agreement by MRK according to Sections 15.2, 15.3 or 15.4,ArcherDX shall return upon request any unused Research Material to MRK, unless written authorization to destroy such Research Material is given by MRK, in which case ArcherDX shall certify in writing such destruction to MRK; and return to MRK any supplies paid for by MRK or otherwise owned by MRK under the Project Agreement. |
16.5 | Additional Effects of Termination under Section 16.2. If MRK terminates a Project Agreement in accordance with Section 16.2, all licenses granted by each Party to the other Party under such Project Agreement shall terminate on the effective date of such termination. |
16.6 | Additional Effects of Termination Due to ArcherDX’s Material Breach. If MRK terminates a Project Agreement in accordance with Section 16.3 due to ArcherDX’s material breach or Section 15.4 due to ArcherDX’s insolvency, the licenses granted to ArcherDX by MRK under this Agreement shall terminate. The licenses to the ArcherDX Background IP and Diagnostic Foreground IP and jointly owned |
16.7 | Bankruptcy Code. All rights and licenses granted under or pursuant to this Agreement by ArcherDX are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code, if applicable, licenses of right to “intellectual property” as defined under Section 101 of the U.S. Bankruptcy Code. |
16.8 | Continuing Rights. The Parties agree that MRK, as licensor of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code. The Parties further agree that, in the event of ArcherDX bankruptcy event, MRK shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, which, if not already in MRK’s possession, shall be promptly delivered to it (a) following any such commencement of a bankruptcy proceeding upon MRK’s written request therefor, unless ArcherDX elects to continue to perform all of its obligations under this Agreement or (b) if not delivered under clause (a), following the rejection of this Agreement by ArcherDX upon written request therefor by MRK. |
16.9 | Additional Effects of Termination Due to MRK’s Material Breach. If ArcherDX terminates a Project Agreement in accordance with Section 16.3 due to MRK’s material breach or Section 15.4 due to MRK’s insolvency, MRK shall immediately make payment to ArcherDX for (a) Activities performed by ArcherDX under such Project Agreement until the effective date of termination and not yet paid for and (b) non-cancellable costs and expenses properly incurred for the Project by ArcherDX prior to MRK’s receipt of notice of termination. |
16.10 | Survival. In connection with each Project Agreement, the following provisions shall survive (in relation to such Project Agreement) after the termination or expiry of the Project Agreement, irrespective of cause: Articles 8, 12, 13, 14, 16, 17, and 18, and any defined terms contained within these provisions. Additionally, any rights and obligations of the Parties shall survive the termination or expiration of the applicable Project Agreement to the extent specifically stated in any provisions of such Project Agreement. |
17 | Anti-Bribery and Anti-Corruption Compliance |
17.1 | MRK and its respective Affiliates, and ArcherDX and its respective Affiliates, will comply with Applicable Laws applicable to the performance of their respective Activities in connection with this Agreement. |
17.2 | Each Party aspires to conduct its business in a highly ethical and responsible manner and acknowledges the importance compliance programs play in supporting these aspirations. In connection therewith, each Party is committed to initiating, implementing and maintaining a global compliance program in order to support its commitment to operate in a highly ethical and responsible manner and to ensure that it and its personnel are aware of and take necessary steps to comply with Applicable Laws, including the U.S. Foreign Corrupt Practices Act, the UK Bribery Act 2010 and any other applicable anti-corruption laws (“Anti-Corruption Laws”). |
17.3 | Specifically, each Party agrees, on behalf of itself and its officers, directors, employees and Affiliates, that, in connection with the matters that are the subject of this Agreement, and the performance of its obligations hereunder: |
17.3.1 | It will not, directly or indirectly, pay, offer or promise to pay, or authorize the payment of any money, or give, offer or promise to give or authorize the giving of anything of value in violation of applicable Anti-Corruption Laws or its own anti-corruption policies. |
17.3.2 | It will not directly or indirectly solicit, receive or agree to accept any payment or anything else of value in violation of applicable Anti-Corruption Laws or its own anti-corruption policies. |
18 | Miscellaneous |
18.1 | Assignment. This Agreement may not be assigned by either Party in whole or in part without the prior written consent of the other Party, except that both Parties may assign this Agreement and its rights and obligations hereunder without such consent to any of its Affiliates, provided that the assignee shall expressly agree to be bound by such Party’s obligations under this Agreement and that such Party shall remain liable for all of its rights and obligations under this Agreement. Each Party shall promptly notify the other Party of any assignment or transfer under the provisions of this Section 18.1. This Agreement shall be binding upon the successors and permitted assigns of the Parties and the name of a Party appearing herein shall be deemed to include the names of such Party’s successors and permitted assigns to the extent necessary to carry out the intent of this Agreement. Any assignment not in accordance with this Section 18.1 shall be void. For clarity, if a MRK Affiliate enters into a Project Agreement, this shall not be considered an assignment of this Agreement. |
18.2 | Change of Control. Each Party shall notify the other Party in writing promptly following the execution of an agreement with respect to Change of Control of such Party. |
18.3 | Affiliates. Both Parties shall always have the right to perform any or all of its obligations and exercise any or all of its rights under this Agreement through any of its Affiliates, provided that the Party shall remain liable hereunder for the performance by any such Affiliates of any such obligations. Further, MRK Affiliates may enter into Project Agreements into their respective own name and the terms and conditions of this Agreement shall then apply to such Affiliate. |
18.4 | Relationship of the Parties. The status of a Party under this Agreement shall be that of an independent contractor. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture, agency relationship, or formal business organization of any kind between the Parties or as granting either Party the authority to bind or contract any obligation in the name of or on the account of the other Party or to make any statements, representations, warranties or commitments on behalf of the other Party. |
18.5 | Use of Third Parties. Unless otherwise expressly provided in this Agreement, the Activities to be performed by a Party under this Agreement may be performed by a Third Party on such Party’s behalf, provided that (i) the other Party has consented in writing, which consent shall not unreasonably be withheld, conditioned or delayed, (ii) the Third Party complies with the terms and conditions of this Agreement, including Article 12 (Intellectual Property) and Article 14 (Confidentiality), (iii) such performance of activities by a Third Party is in accordance with and preserves the rights and obligations of the Parties under this Agreement, (iv) the Third Party may not subcontract its performance of activities to another Third Party, and (v) the Third Party shall not be allowed to grant a further sublicense to another Third Party to a Party’s Intellectual Property. Notwithstanding the foregoing, either Party may, without prior consent from the other Party under Section 18.5(i) but otherwise complying with the aforementioned requirements, use Third Party contractors for contract research (e.g. training and monitoring of Test Labs and data management), external validation studies, regulatory support, software development, quality, scientific and medical writing, reimbursement, external studies (repro and AV), sequencing, data management, manufacturing, legal, project management, medical review, clinical operations, clinical development, and statistical consultancy. |
18.6 | Entire Agreement. This Agreement and all Project Agreements contain the entire and only agreement between the Parties and supersedes and cancels all prior written or oral agreements, undertakings and negotiations between the Parties with respect to the subject matter hereof, except for (i) any prior confidentiality agreements covering the exchange of Confidential Information between the Parties prior to the Effective Date, and (ii) any other agreements not specifically focused upon CDx development, such as Master Collaboration/Master Service Agreements and their |
18.7 | Binding Effect. This Agreement and the respective Project Agreements shall be binding upon and inure to the benefit of and be enforceable by the Parties hereto and their respective successors and permitted assignees. |
18.8 | Amendments. No amendments, changes, modifications or alterations of the terms and conditions of this Agreement or any Project Agreement shall be binding upon either Party unless made in writing and signed by both Parties and provided to both Parties in accordance with Section 18.19. |
18.9 | Enforcement. Except in the case of waiver pursuant Section 18.10, the failure of either Party at any time to require performance of any provision hereof shall in no manner affect its rights at a later time to enforce the same. |
18.10 | Waiver. No term, provision or condition of this Agreement shall be waived unless such waiver is evidenced in writing and signed by the waiving Party. |
18.11 | Severability. To the fullest extent permitted by Applicable Law, the Parties waive any provision of law that would render any provision in this Agreement invalid, illegal or unenforceable in any respect. If any provision of this Agreement is held to be invalid, illegal or unenforceable, in any respect, then such provision will be given no effect by the Parties and shall not form part of this Agreement. To the fullest extent permitted by Applicable Law and if the rights or obligations of any Party will not be materially and adversely affected, all other provisions of this Agreement shall remain in full force and effect and the Parties will use their best efforts to negotiate in good faith a provision in replacement of the provision held invalid, illegal or unenforceable that is consistent with Applicable Law and achieves, to the fullest extent possible, the original intention of the Parties. |
18.12 | Headings and Titles. Headings and titles in this Agreement are for convenience purposes only and shall not in any way influence the construction, performance and enforcement of any of its provisions. |
18.13 | Force Majeure. All cases of force majeure which shall include, but not be restricted to, fire, flood, earthquake, explosion, riot, strike, lockout, terror, war and regulations of any governmental or local authority shall, for the duration of and to the extent of the effects caused by such disturbances, release the Parties from the performance of their contractual obligations under this Agreement. Either Party shall notify the other Party without undue delay if there are any indications of any such incidents occurring, and the two Parties shall discuss the effects of such incidents on this Agreement and the measures to be taken. Both Parties shall use Commercially Reasonable Efforts to avoid or restrict any detrimental effects of an event of force majeure. The Parties shall, as soon as it is reasonably possible, resume performance of their obligations. |
18.14 | Notices. Any invoice, notice, request, demand, waiver, consent, approval or other communication permitted or required under this Agreement shall be in writing, shall refer specifically to this Agreement and shall be deemed given only if delivered by hand or sent by facsimile transmission (with transmission confirmed) or by internationally recognized overnight delivery service that maintains records of delivery, addressed to the Parties at their respective addresses specified below or to such other address as the Party may have provided to the other Party. Such notice shall be deemed to have been given as of the date delivered by hand or transmitted by facsimile (with transmission confirmed) or on the second business day (at the place of delivery) after deposit with an internationally recognized overnight delivery service. This Section is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement. All notices under this Agreement will be deemed given when made to the address shown below: |
18.15 | Governing Law and Venue. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, excluding application of any conflict of laws principles that would require application of the law of a jurisdiction outside of the State of New York, and will be subject to the exclusive jurisdiction of the courts of competent jurisdiction located in State of New York; provided that those matters pertaining to the validity or enforceability of patent rights will be interpreted and enforced in accordance with the laws of the territory in which such patent rights exist. Each Party agrees that any application of the United Nations Convention on Contracts for the International Sale of Goods (1980) is specifically excluded and does not apply to this Agreement. |
18.16 | Dispute Resolution. Prior to taking action in accordance with Section 18.15, the Parties shall seek to amicably settle all disputes arising out of or in connection with this Agreement or any Project Agreement. Any such dispute not settled amicably may, with written notice to the other Party, be referred for resolution by a senior executive of each Party. For any dispute, which is not resolved by the senior executives within ten (10) days, the Parties will first seek settlement of such dispute by mediation in accordance with the International Chamber of Commerce (ICC) Mediation Rules, which Rules are deemed to be incorporated by reference into this clause. The place of mediation will be New York City, New York, United States of America. If the dispute is not settled by mediation within forty-five (45) days of the commencement of the mediation, or such further period as the Parties will agree in writing, the dispute will be referred and finally resolved by the competent courts pursuant to 18.15. |
18.17 | Debarment and Exclusion. Each Party certifies that it is not debarred under subsections 306(a) or (b) of the US Federal Food Drug and Cosmetic Act US Generic Drug Enforcement Act of 1992; 21 USC 335a (a) or (b), and that it has not and will not use in any capacity the services of any person debarred under such law to conduct |
18.18 | Interpretation. The terms of this Agreement represent the results of negotiations between the Parties and their representatives, each of which has been represented by counsel of its own choosing, and neither of which has acted under duress or compulsion, whether legal, economic or otherwise. Accordingly, the terms of this Agreement shall be interpreted and construed in accordance with their usual and customary meanings, and each of the Parties hereto hereby waives the application in connection with the interpretation and construction of this Agreement of any rule of Law to the effect that ambiguous or conflicting terms or provisions contained in this Agreement shall be interpreted or construed against the Party whose attorney prepared the executed draft or any earlier draft of this Agreement. Any reference in this Agreement to an Article, Section, subsection, paragraph, clause or Exhibit shall be deemed to be a reference to any Article, Section, subsection, paragraph, clause or Exhibit, of or to, as the case may be, this Agreement. Except where the context otherwise requires, (a) any definition of or reference to any agreement, instrument or other document refers to such agreement, instrument other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or therein), (b) any reference to any Applicable Law refers to such Law as from time to time enacted, repealed or amended, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, refer to this Agreement in its entirety and not to any particular provision hereof, (d) the words “include,” “includes,” and “including,” shall be deemed to be followed by the phrase “but not limited to,” “without limitation” or words of similar import, (e) the word “or” is used in the inclusive sense (and/or) and (f) the singular shall include the plural, the plural the singular, the use of any gender shall be applicable to all genders. |
18.19 | Counterparts. This Agreement may be executed in counterparts, each of which will be deemed an original, and all of which together will be deemed to be one and the same instrument. A facsimile or a portable document format (PDF) copy of this Agreement, including the signature pages, will be deemed an original. This Agreement shall be made out in two (2) originals and each of the Parties hereto shall be handed one original copy. |
ArcherDX, Inc. | Merck KgaA | |||
Place: | Boston, MA USA | Place: | Darmstadt | |
Date: | 27 SEPT 2018 | Date: | Sept. 19, 2018 | |
/s/ Christian LaPointe | /s/ [**] | |||
Name: | Christian LaPointe | Name: | [**] | |
Title: | General Counsel | Title: | Head METs-CDx | |
Place: | Darmstadt | |||
Date: | Sept. 13, 2018 | |||
/s/ [**] | ||||
Name: | [**] | |||
Title: | Global Head Clinical Biomarkers & Companion Diagnostics |
Objective of Project | See below |
Summary description of the specific work to be performed by ArcherDX under this Project Agreement No. “[ ]” and projected timelines for completion of work: | [Insert description] |
Summary description of the assay that is the subject of this Project Agreement No. [“ “]: | [Insert description] |
Description of the indication | The Product is intended to be used as an in vitro diagnostic test as an aid for assessing the eligibility for treatment with the Drug of patients with (i) [“indication (abbreviation)”], or (ii) [“indication (abbreviation)”]. |
Description of the intended use of the Product | Specific detection of the expression of Biomarker in human [tbd: tissue / blood / serum / other] samples that have been prepared [tbd: e.g.:as standard FFPE tissue specimens] for evaluation by [IHC, ISH, PCR, NGS, ELISA, etc. (delete accordingly)] staining. [Amend/expand description, if applicable] |
Work Plan with Timelines | Attachment 1 to Project Agreement No. [“ “] |
Budget for payments by MRK for conduct of Project | Attachment 2 to Project Agreement No. [“ “] |
Maximum Payment by MRK under this Project Agreement No. [“ “]: | [“$ “] total budget above) |
Projected Other Project Costs (as applicable): | [Insert description] (attachment optional) |
Reagent source – Principles (according to Section 6.3 of the Agreement): | Source: [“ “] Financing: [“ “] (attachment optional) |
Clinical Trial Protocol | Attachment 3 to Project Agreement No. [“ “] |
MRK materials to be provided (as applicable): | Attachment 4 to Project Agreement No. [“ “] |
Product to be supplied by ArcherDX to MRK for development purposes | Attachment 5 to Project Agreement No. [“ “] |
Identification of MRK collaborator(s) / subcontractors (as applicable): | [“Insert description”] (attachment optional) |
Identification of ArcherDX collaborator(s) / subcontractors (as applicable): | [“Insert description”] (attachment optional) |
MRK Markets | Attachment 6 to Project Agreement No. [“ “] |
MRK Research Price | |
MRK Commercial Price | |
Third Party IP (as applicable) | [potentially as Attachment 7] |
MRK Contacts for Project and Invoices | |
Reports – Format, what included | (attachment optional) |
ArcherDX, Inc. | Merck KGAA | |||
By: | By: | |||
Name: | Name: | |||
Title: | Title: | |||
By: | By: | |||
Name: | Name: | |||
Title: | Title: |
Milestone | Project Phase | Total Cost | Start date | End date |
1 | 1: Execution of Project Agreement | Up front payment (“tech access fee”) | Effective Date of PA | Effective Date of PA |
2 | 2: | |||
3 | 3: | |||
4 | 4: | |||
5 | 5: | |||
6 | 6: | |||
7 | 7: | |||
Total |
Cost Type | Total amount | 2018 | 2019 | 2020 | 2021 | 2022 |
MS1 | 1st Q | |||||
MS2 | ||||||
MS3 | ||||||
MS4 | ||||||
MS5 | ||||||
MS6 | ||||||
MS7 | ||||||
Testing or Test Kit costs | ||||||
Other | ||||||
Total |
Study | Indication | Number of patients to be enrolled | Estimated Specimens/ Patients Tested | Deliverable Assay | Assay Delivery Date | Clinical Study and Testing Sites |
Phase X | tbd | # | # | Tbd (RUO, IUO, CTA) | Month year | tbd |
Phase X | tbd | # | # | Tbd (RUO, IUO, CTA) | Month year | tbd |
Phase X | tbd | # | # | Tbd (RUO, IUO, CTA) | Month year | tbd |
Phase X | tbd | # | # | Tbd (RUO, IUO, CTA) | Month year | tbd |
(a) | “personal data”, “special categories of data/sensitive data”, “process/processing”, “controller”, “processor”, “data subject” and “supervisory authority/authority” shall have the same meaning as in Directive 95/46/EC of 24 October 1995 (whereby “the authority” shall mean the competent data protection |
(b) | “the data exporter” shall mean the controller who transfers the personal data; |
(c) | “the data importer” shall mean the controller who agrees to receive from the data exporter personal data for further processing in accordance with the terms of these clauses and who is not subject to a third country’s system ensuring adequate protection; |
Standard Clauses 2004/915/EC | Page 75 of 82 |
(d) | “clauses” shall mean these contractual clauses, which are a free-standing document that does not incorporate commercial business terms established by the parties under separate commercial arrangements. |
II. | Obligations of the data exporter |
(a) | The personal data have been collected, processed and transferred in accordance with the laws applicable to the data exporter. |
(b) | It has used reasonable efforts to determine that the data importer is able to satisfy its legal obligations under these clauses. |
(c) | It will provide the data importer, when so requested, with copies of relevant data protection laws or references to them (where relevant, and not including legal advice) of the country in which the data exporter is established. |
(d) | It will respond to enquiries from data subjects and the authority concerning processing of the personal data by the data importer, unless the parties have agreed that the data importer will so respond, in which case the data exporter will still respond to the extent reasonably possible and with the information reasonably available to it if the data importer is unwilling or unable to respond. Responses will be made within a reasonable time. |
(e) | It will make available, upon request, a copy of the clauses to data subjects who are third party beneficiaries under clause III, unless the clauses contain confidential information, in which case it may remove such information. Where information is removed, the data exporter shall inform data subjects in writing of the reason for removal and of their right to draw the removal to the attention of the authority. However, the data exporter shall abide by a decision of the authority regarding access to the full text of the clauses by data subjects, as long as data subjects have agreed to respect the confidentiality of the confidential information removed. The data exporter shall also provide a copy of the clauses to the authority where required. |
III. | Obligations of the data importer |
(a) | It will have in place appropriate technical and organisational measures to protect the personal data against accidental or unlawful destruction or accidental loss, alteration, unauthorised disclosure or access, and which provide a level of security appropriate to the risk represented by the processing and the nature of the data to be protected. |
(b) | It will have in place procedures so that any third party it authorises to have access to the personal data, including processors, will respect and maintain the confidentiality and security of the personal data. Any person acting under the authority of the data |
Standard Clauses 2004/915/EC | Page 76 of 82 |
(c) | It has no reason to believe, at the time of entering into these clauses, in the existence of any local laws that would have a substantial adverse effect on the guarantees provided for under these clauses, and it will inform the data exporter (which will pass such notification on to the authority where required) if it becomes aware of any such laws. |
(d) | It will process the personal data for purposes described in Annex B, and has the legal authority to give the warranties and fulfil the undertakings set out in these clauses. |
(e) | It will identify to the data exporter a contact point within its organisation authorised to respond to enquiries concerning processing of the personal data, and will cooperate in good faith with the data exporter, the data subject and the authority concerning all such enquiries within a reasonable time. In case of legal dissolution of the data exporter, or if the parties have so agreed, the data importer will assume responsibility for compliance with the provisions of clause I (e). |
(f) | At the request of the data exporter, it will provide the data exporter with evidence of financial resources sufficient to fulfil its responsibilities under clause III (which may include insurance coverage). |
(g) | Upon reasonable request of the data exporter, it will submit its data processing facilities, data files and documentation needed for processing to reviewing, auditing and/or certifying by the data exporter (or any independent or impartial inspection agents or auditors, selected by the data exporter and not reasonably objected to by the data importer) to ascertain compliance with the warranties and undertakings in these clauses, with reasonable notice and during regular business hours. The request will be subject to any necessary consent or approval from a regulatory or supervisory authority within the country of the data importer, which consent or approval the data importer will attempt to obtain in a timely fashion. |
(h) | It will process the personal data, at its option, in accordance with: |
(i) | the data protection laws of the country in which the data exporter is established, or |
(ii) | the relevant provisions3 of any Commission decision pursuant to Article 25(6) of Directive 95/46/EC, where the data importer complies with the relevant provisions of such an authorisation or decision and is based in a country to which such an authorisation or decision pertains, but is not covered by such authorisation or decision for the purposes of the transfer(s) of the personal data4, or |
Standard Clauses 2004/915/EC | Page 77 of 82 |
(iii) | the data processing principles set forth in Annex A. |
[MRK TO SIGN HERE] | |
(i) | It will not disclose or transfer the personal data to a third party data controller located outside the European Economic Area (EEA) unless it notifies the data exporter about the transfer and |
(i) | the third party data controller processes the personal data in accordance with a Commission decision finding that a third country provides adequate protection, or |
(ii) | the third party data controller becomes a signatory to these clauses or another data transfer agreement approved by a competent authority in the EU, or |
(iii) | data subjects have been given the opportunity to object, after having been informed of the purposes of the transfer, the categories of recipients and the fact that the countries to which data is exported may have different data protection standards, or |
(iv) | with regard to onward transfers of sensitive data, data |
III. | Liability and third party rights |
(a) | Each party shall be liable to the other parties for damages it causes by any breach of these clauses. Liability as between the parties is limited to actual damage suffered. Punitive damages (i.e. damages intended to punish a party for its outrageous conduct) are specifically excluded. Each party shall be liable to data subjects for damages it causes by any breach of third party rights under these clauses. This does not affect the liability of the data exporter under its data protection law. |
(b) | The parties agree that a data subject shall have the right to enforce as a third party beneficiary this clause and clauses I(b), I(d), I(e), II(a), II(c), II(d), II(e), II(h), II(i), III(a), V, VI(d) and VII against the data importer or the data exporter, for their respective breach of their contractual obligations, with regard to his personal data, and accept jurisdiction for this purpose in the data exporter’s country of establishment. In cases involving allegations of breach by the data importer, the data subject must first request the data exporter to take appropriate action to enforce his rights against the data importer; if the data exporter does not take such action within a reasonable period (which under normal circumstances would be one month), the data subject may then enforce his rights against the data importer directly. A data subject is entitled to proceed directly against a data exporter that has failed to use |
Standard Clauses 2004/915/EC | Page 78 of 82 |
IV. | Law applicable to the clauses |
V. | Resolution of disputes with data subjects or the authority |
(a) | In the event of a dispute or claim brought by a data subject or the authority concerning the processing of the personal data against either or both of the parties, the parties will inform each other about any such disputes or claims, and will cooperate with a view to settling them amicably in a timely fashion. |
(b) | The parties agree to respond to any generally available non-binding mediation procedure initiated by a data subject or by the authority. If they do participate in the proceedings, the parties may elect to do so remotely (such as by telephone or other electronic means). The parties also agree to consider participating in any other arbitration, mediation or other dispute resolution proceedings developed for data protection disputes. |
(c) | Each party shall abide by a decision of a competent court of the data exporter’s country of establishment or of the authority which is final and against which no further appeal is possible. |
VI. | Termination |
(a) | In the event that the data importer is in breach of its obligations under these clauses, then the data exporter may temporarily suspend the transfer of personal data to the data importer until the breach is repaired or the contract is terminated. |
(b) | In the event that: |
(i) | the transfer of personal data to the data importer has been temporarily suspended by the data exporter for longer than one month pursuant to paragraph (a); |
(ii) | compliance by the data importer with these clauses would put it in breach of its legal or regulatory obligations in the country of import; |
(iii) | the data importer is in substantial or persistent breach of any warranties or undertakings given by it under these clauses; |
(iv) | a final decision against which no further appeal is possible of a competent court of the data exporter’s country of establishment or of the authority rules that there has been a breach of the clauses by |
Standard Clauses 2004/915/EC | Page 79 of 82 |
(v) | a petition is presented for the administration or winding up of the data importer, whether in its personal or business capacity, which petition is not dismissed within the applicable period for such dismissal under applicable law; a winding up order is made; a receiver is appointed over any of its assets; a trustee in bankruptcy is appointed, if the data importer is an individual; a company voluntary arrangement is commenced by it; or any equivalent event in any jurisdiction occurs then the data exporter, without prejudice to any other rights which it may have against the data importer, shall be entitled to terminate these clauses, in which case the authority shall be informed where required. In cases covered by (i), (ii), or (iv) above the data importer may also terminate these clauses. |
(c) | Either party may terminate these clauses if (i) any Commission positive adequacy decision under Article 25(6) of Directive 95/46/EC (or any superseding text) is issued in relation to the country (or a sector thereof) to which the data is transferred and processed by the data importer, or (ii) Directive 95/46/EC (or any superseding text) becomes directly applicable in such country. |
(d) | The parties agree that the termination of these clauses at any time, in 4any circumstances and for whatever reason (except for termination under clause VI (c)) does not exempt them from the obligations and/or conditions under the clauses as regards the processing of the personal data transferred. |
VII. | Variation of these clauses |
VIII. | Description of the Transfer |
Standard Clauses 2004/915/EC | Page 80 of 82 |
Dated: | 19th September 2018 | ||
/s/ Christian LaPointe | /s/ [**] | ||
FOR DATA IMPORTER | FOR DATA EXPORTER | ||
Christian LaPointe | [**] | ||
General Counsel | Senior Director | ||
Head of Market Enabling Technologies and Companion Diagnostics |
Standard Clauses 2004/915/EC | Page 81 of 82 |
1. | Purpose limitation: Personal data may be processed and subsequently used or further communicated only for purposes described in Annex B or subsequently authorised by the data subject. |
2. | Data quality and proportionality: Personal data must be accurate and, where necessary, kept up to date. The personal data must be adequate, relevant and not excessive in relation to the purposes for which they are transferred and further processed. |
3. | Transparency: Data subjects must be provided with information necessary to ensure fair processing (such as information about the purposes of processing and about the transfer), unless such information has already been given by the data exporter. |
4. | Security and confidentiality: Technical and organisational security measures must be taken by the data controller that are appropriate to the risks, such as against accidental or unlawful destruction or accidental loss, alteration, unauthorised disclosure or access, presented by the processing. Any person acting under the authority of the data controller, including a processor, must not process the data except on instructions from the data controller. |
5. | Rights of access, rectification, deletion and objection: As provided in Article 12 of Directive 95/46/EC, data subjects must, whether directly or via a third party, be provided with the personal information about them that an organisation holds, except for requests |
6. | Sensitive data: The data importer shall take such additional measures (e.g. relating to security) as are necessary to |
Standard Clauses 2004/915/EC | Page 82 of 82 |
7. | Data used for marketing purposes: Where data are processed for the purposes of direct marketing, effective procedures should exist allowing the data subject at any time to “opt-out” from having his data used for such purposes. |
8. | Automated decisions: For purposes hereof “automated decision” shall mean a decision by the data exporter or the data importer which produces legal effects concerning a data subject or significantly affects a data subject and which is based solely on automated processing of personal data intended to evaluate certain personal aspects relating to him, such as his performance at work, creditworthiness, reliability, conduct, etc. The data importer shall not make any automated decisions concerning data subjects, except when: |
(a) (i) | such decisions are made by the data importer in entering into |
(ii) | (the data subject is given an opportunity to discuss the results of a relevant automated decision with a representative of the parties making such decision or otherwise to make representations to that parties. |
(b) | where otherwise provided by the law of the data exporter. |
Definitions | 4 | |
1. | Services | 8 |
3 | Standards | 9 |
4 | Current Good Manufacturing Practices (“GMP”). | 9 |
5 | Good Laboratory Practice | 9 |
6 | Compensation | 9 |
7 | Taxes | 11 |
8 | Product Security | 11 |
9 | Confidentiality | 13 |
10 | Term and Termination | 13 |
11 | Indemnification | 15 |
12 | Liability | 18 |
13 | Subcontracting | 19 |
14 | Expectations of Third Parties | 19 |
15 | Right to Audit | 20 |
16 | Adverse Event Reporting Requirements | 21 |
17 | Anti-Bribery Anti-Corruption (“ABAC”) | 22 |
18 | Amendments, Changes and Modifications | 22 |
19 | Ownership of Results and Background IPR | 22 |
20 | Error or Delay in Performance of the Services | 24 |
21 | Reserved | 24 |
22 | Mediation | 24 |
23 | Arbitration | 24 |
24 | Assignment | 25 |
25 | Reserved | 25 |
26 | No Minimum Commitment. | 25 |
27 | Further Assurance | 25 |
28 | Data Privacy | 25 |
29 | Debarment | 25 |
30 | Reserved | 26 |
31 | Reserved | 26 |
32 | Reserved | 26 |
33 | Force Majeure | 26 |
34 | US Physician Sunshine Act Requirements | 26 |
35 | Human Biological Samples (“HBS”) | 27 |
36 | Promotional Policies | 27 |
37 | Publications | 27 |
38 | Representations, Warranties and Covenants | 28 |
39 | Reserved | 29 |
40 | Safety and Security Requirements | 29 |
41 | Travel and Expenses | 29 |
42 | Reserved | 30 |
43 | Reserved | 30 |
44 | Reserved | 30 |
45 | Construction | 30 |
46 | Entire Agreement and Amendment | 30 |
47 | Governing Law | 31 |
48 | Jurisdiction | 31 |
49 | Miscellaneous | 31 |
SCHEDULE 1 - STATEMENT OF WORK - TEMPLATE | 34 | |
SCHEDULE 2 - RATE CARD | 37 | |
SCHEDULE 3 - DATA PROTECTION AND SECURITY REQUIREMENTS | 38 | |
SCHEDULE 4 - SUMMARY OF ASTRAZENECA PROMOTIONAL POLICIES | 54 | |
SCHEDULE 5 – HUMAN BIOLOGICAL SAMPLES | 56 | |
SCHEDULE 6 – KEY PERFORMANCE INDICATORS (SERVICE LEVELS) | 61 | |
SCHEDULE 7 – DESIGN AND REPORTING OF ESSENTIAL AND EXPLORATORY RESEARCH OBJECTIVES | 62 |
(1) | ASTRAZENECA AB (PUBL), A COMPANY INCORPORATED IN SWEDEN UNDER NO. 556011-7482, WITH OFFICES AT SE-431 83 MÖLNDAL, SWEDEN (“AstraZeneca”) |
(2) | ARCHERDX, INC, A COMPANY INCORPORATED IN DELAWARE WHOSE REGISTERED OFFICE IS AT 2477 55TH STREET, SUITE 202 BOULDER, CO 80301, USA. (“Supplier”). |
(A) | AstraZeneca desires to obtain from time to time the Services (as defined below) of Supplier in order to obtain the benefit of the experience and ability of Supplier; and |
(B) | Supplier is willing to render such Services upon the terms and conditions set forth in this Agreement. |
1.1. | “Adverse Event” or “AE” is the development of any untoward medical occurrence in a subject or clinical study subject administered a medicinal product and which does not necessarily have a causal relationship with such treatment. An AE can therefore be any unfavourable and unintended sign (e.g. an abnormal laboratory finding), symptom (for example nausea, chest pain), or disease temporally associated with the use of a medicinal product, whether or not considered related to the medicinal product. The term AE is used to include both serious and non-serious AEs and can include a deterioration of a pre-existing medical occurrence. An AE may occur at any time, including run-in or washout periods, even if no study treatment has been administered. |
1.2. | “Affiliate” means, with respect to a Person, any Person that controls, is controlled by or is under common control with such first Person. For purposes of this definition only, “control” means: (a) to possess, directly or indirectly, the power to direct the management or policies of a Person, whether through ownership of voting securities or by contract relating to voting rights or corporate governance, fifty percent (50%) or more of the outstanding voting securities or other ownership interest of such Person. |
1.3. | “Anti-Corruption Laws” means the US 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 bribery, fraud, racketeering, money laundering or terrorism. |
1.4. | “Applicable Law” means all applicable laws, rules and regulations and any applicable policies of any Regulatory Authorities that may be in effect from time to time, including laws, rules, regulations, guidances, Guidelines and standards relating to the conduct |
1.5. | “Background IPR” means any Intellectual Property Rights necessary in the performance of the Services existing prior to entering into the Statement of Work or generated independently of the Services under this Agreement, which are owned or controlled by Supplier or AstraZeneca or to which Supplier or AstraZeneca represents it has rights on the Effective Date or from time to time during the Term of this Agreement. |
1.6. | “Change of Control” means, with respect to a Party: (i) a merger or consolidation of such Party with a third party which results in the voting securities of such Party outstanding immediately prior thereto ceasing to represent at least fifty percent (50%) of the combined voting power of the surviving entity immediately after such merger or consolidation, or (ii) a transaction or series of related transactions in which a third party (who is not a stock or equity holder as of the date hereof), together with its affiliates, becomes the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of such Party. |
1.7. | “Confidential Information” means any and all data, information or material of a Party or its Affiliates that is provided or communicated by or on behalf of such Party or its Affiliates to the other Party or its Affiliates, or otherwise becomes known to such other Party, or is collected or generated by or on behalf of a Party, in connection with this Agreement, the Services or any other activities contemplated hereunder, including, without limitation, information relating to a Party’s and/or its Affiliates’ business. |
1.8. | “Control” means for purposes of Section 1.2: (i) to possess, directly or indirectly, the power to direct the management or policies of a Person, whether through ownership of voting securities or by contract relating to voting rights or corporate governance, or (ii) to own, directly or indirectly, fifty percent (50%) or more of the outstanding voting securities or other ownership interest of such Person, or (iii) in the case of a partnership, control of the general partner. |
1.9. | “Employee” shall be defined to include any Supplier employee, contractor, subcontractor or agent, or employee of the same performing Services. |
1.10. | “Force Majeure” means an event which is beyond a Party’s reasonable control, including an act of God (floods, drought, earthquake or other natural disaster), epidemic or pandemic, civil war, riots, terrorist attack on a Party, or requiring closure of buildings and/or sites and shut down of computer systems. |
1.11. | “Good Clinical Practice” means in respect of the Services, that level of skill, care, prudence, judgment, foresight, integrity and diligence that would be reasonably expected of a global market-leading provider of services similar to the Services, including practices that accord with: |
(a) | the ICH Guideline for Good Clinical Practice (E6); |
(b) | good clinical practice requirements as are specified in Directive 2001/20/EC of the European Parliament and the Council of 4 April 2001 relating to medicinal products for human use and in guidance published by the European Commission pursuant to such Directive; and |
(c) | good clinical practice requirements issued by the FDA. |
1.12. | “Good Laboratory Practice” or “GLP” means the current OECD ENV/MC/CHEM(98)17 quality system concerned with the organizational process and the conditions under which non-clinical health and environmental safety studies are planned, performed, monitored, recorded, archived and reported, as amended from time to time. |
1.13. | “Good Manufacturing Practice” or “GMP” means those current good manufacturing practices, as amended from time to time, related to the manufacture of products as set forth in the FDCA and such standards of good manufacturing practice as are required by the FDA or other Regulatory Authorities (as defined herein), including the United States Code of Federal Regulations (Title 21, Parts 210-211, and 610) and European Community Directive 91/356/EEC (Principles and guidelines of good manufacturing practice for medicinal products) (as amended or replaced from time to time, including by Directive 2003/94/EEC). |
1.14. | “Guidelines” means the standard of practice applicable to the Services and their place of performance required by each of the following, as they may be amended from time to time: |
a) | the Principles on Conduct of Clinical Studies and Communication of Clinical Study Results published by the Pharmaceutical Research and Manufacturers of America (PhRMA); |
b) | all guidelines relating to clinical studies published by a Regulatory Authority or the ICH which are adopted in any of the ICH Regions; and |
c) | the World Medical Association Declaration of Helsinki entitled “Ethical Principles for Medical Research Involving Human Subjects” (1996 version). |
1.15. | “Illegal Trade” means counterfeiting, illegal diversion and theft of medicines. |
1.16. | “Intellectual Property Rights” or “IPR” means confidential know-how, patent rights, trademarks, service marks, trade names, design rights, copyright (including rights in computer software) and any rights or property similar to any of the foregoing in any part of the world, whether registered or not, together with the right to apply for the registration of any such rights, and all rights or forms of protection having equivalent or similar effect, in any part of the world. |
1.17. | “Loss” means any and all liabilities, claims, demands, causes of action, damages, loss and expenses, including interest, penalties, and reasonable lawyers’ fees and disbursements. |
1.18. | “Parties” means AstraZeneca and Supplier and “Party” shall mean either of AstraZeneca or Supplier. |
1.19. | “Person” means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or |
1.20. | “Policies and Standards” means all policies, procedures and standards adopted by AstraZeneca or its Affiliates that are relevant to the Services as have been provided to Supplier. |
1.21. | “Regulatory Authority” means the FDA, the EMEA and any other national, supranational or other governmental body having legal authority with respect to the conduct of the Services or the marketing authorization for a study drug or diagnostic identified in a Statement of Work or a product containing the study drug or diagnostic. |
1.22. | “Results” means, with respect to a Party, any ideas, inventions, discoveries, know-how, data, documentation, reports, materials, writings, designs, computer software, processes, principles, methods, techniques and other information, recorded in any form, that are discovered, conceived, reduced to practice or otherwise generated as a result of or in connection with this Agreement, the Services or any other activities contemplated hereunder by or on behalf of such Party or its Affiliate (whether solely or jointly with others) and any patent, trade secret, copyright or other intellectual property rights pertaining to any of the foregoing; provided, that Supplier Results, as defined herein, shall not be deemed to be Results generated on behalf of AstraZeneca. |
1.23. | “Review Board” means an institutional review board, independent ethics committee or other group formally designated by an institution in compliance with 21 C.F.R. Part 56 or analogous provisions of Applicable Law outside the United States to review, to approve the initiation of, and to conduct periodic review of, the Study. |
1.24. | “Sample(s)” means biological materials, including human tissue and its derivatives or components (e.g., cell lines and DNA), as may be further identified in an applicable Statement of Work. |
1.25. | “Services” means the services to be performed by Supplier set forth in each Statement of Work, with such modifications to such Statement of Work as either Party may reasonably request from time to time. |
1.26. | “Service Levels” means the levels of performance of the Services as set out in a Statement of Work and agreed by the Parties which include but is not limited to; delivery of data and results to mutually agreed timelines, which levels will in any event be consistent with Good Industry Practices. |
1.27. | “Statement of Work” or “SOW” means a description of the Services to be undertaken by the Supplier mutually agreed by the Parties in writing, substantially in the form set forth in Schedule 1 (Statement of Work) or as otherwise agreed by the Parties. |
1.28. | “Third Party Licence” mean any Intellectual Property Rights of an individual or organization not a party to this Agreement the use and/or control of which has been granted to Supplier through a license agreement. |
1.29. | “Waste” means, if applicable, waste material from Supplier manufacture, supply or handling of the products identified in a Statement of Work, including any such non-conforming products, and any material carrying an AstraZeneca Trademark. |
1. | SERVICES |
1.1 | This Agreement sets forth the terms and conditions under which Supplier agrees to provide, and under which AstraZeneca agrees to retain Supplier to provide, Services. The content and scope of the Services shall be further specified in separate and consecutively numbered Statements of Work, drawn up and signed by both Parties from time to time.Each such Statement of Work shall come into effect when it is signed by both Parties and the provision of the Services set forth therein shall be governed by the terms and conditions of this Agreement. Such engagement shall be on a non-exclusive basis, and AstraZeneca shall at all times have the right to engage other companies for such Services as it in its sole discretion deems necessary or appropriate. For the avoidance of doubt, AstraZeneca has no obligation to place certain amounts of Statements of Work under this Agreement. |
1.2 | Any number of Statements of Work may be executed pursuant to this Agreement during the Term. Each Statement of Work will govern the provision of Services set forth therein. Supplier shall not unreasonably refuse to accept a Statement of Work during the Term of this Agreement; provided, that Supplier shall not be obligated to accept a Statement of Work during the Term of this Agreement. |
1.3 | Each Statement of Work shall refer to this Agreement and will operate for the term specified therein unless earlier terminated in accordance with Article 10 (Term and Termination). |
1.4 | Except as provided in a Statement of Work, Supplier shall furnish, at its own expense, any and all materials, equipment, services or supplies necessary or useful to successfully complete the Services. Supplier shall use commercially reasonable efforts in the performance of the Services and shall perform such Services with the highest professional standards and in compliance with this Agreement and the relevant Statement of Work and all applicable laws and regulations. |
1.5 | The Parties agree that completion of the Services within the agreed-upon time period is an essential term of this Agreement. |
1.6 | The contact person at AstraZeneca for the Services will be as set forth in the relevant Statement of Work, unless otherwise notified. |
1.7 | The Parties shall together perform ongoing measurement of Key Performance Indicators (“KPIs”) and periodic assessment of Service Levels, as further described in the Schedule 6 and/or the applicable SOW. The formulation of specific Service Levels will be proposed for each SOW drafted and agreed between the Project Team Leads. The satisfaction of each such Service Level will be determined by quantitative metrics collected by Parties. Satisfaction of the Service Levels by Supplier will be monitored by the each Party. Persistent uncured breaches of the Service Levels agreed and set forth in Schedule 6 and/or a specific SOW shall be deemed a Material Breach of this Agreement and will give AZ the right to terminate either this Agreement in its entirety or any such specific SOW in accordance with Section 10. |
1.8 | In its performance of the Services and other obligations under this Agreement, Supplier shall and shall cause it Affiliates and its and their respective subcontractors, employees |
3 | STANDARDS |
3.1 | In its performance of the Services and other obligations under this Agreement, Supplier shall and shall cause it Affiliates and its and their respective subcontractors, employees and representatives to comply with: |
3.1.1 | Good Clinical Practice; |
3.1.2 | The Guidelines; |
3.1.3 | The Policies and Standards; and |
3.2 | Applicable Law (in the event of inconsistency among Applicable Law, Supplier shall conduct the Study in accordance with the law, regulations, guideline or standard that is the most protective of the subjects of such Study and shall consult with such AstraZeneca Affiliate as necessary to assure compliance with Applicable Law). |
4 | CURRENT GOOD MANUFACTURING PRACTICES (“GMP”) . |
4.1 | AstraZeneca is specifically required by law to ensure that all AstraZeneca facilities, materials used therein and contractors performing Services impacting the biopharmaceutical operations, including production, laboratory, warehousing, and other areas are in compliance with governmental regulations and mandates. In performing the Services, Supplier agrees to comply with and adhere to those requirements that are necessary for AstraZeneca to meet its obligations to domestic and international governmental agencies. Supplier agrees to use Current Good Manufacturing Practice(s) or GMP in all applicable Services. |
5 | GOOD LABORATORY PRACTICE |
5.1 | Supplier shall: (a) perform the Services with the highest professional standards, in a good scientific manner, in compliance with the provisions of this Agreement and all Applicable Laws, including as applicable, GLP, and (b) ensure that it has all licenses and consents required to provide the Services and otherwise conduct its business, and shall maintain and comply with all such licenses and consents. |
6 | COMPENSATION |
6.1 | In consideration for Supplier’s satisfactory performance of the Services, AstraZeneca shall compensate Supplier as set forth in the relevant Statement of Work. Supplier agrees that the compensation set forth in a Statement of Work represents AstraZeneca’s full and complete obligation to compensate Supplier for any and all Services to be performed, rights granted and expenses incurred, by Supplier under such Statement of Work. |
6.2 | Purchase Order. If applicable, no payment for Services will be made unless a Purchase Order is issued by AstraZeneca and Supplier invoices must reference a corresponding Purchase Order number. If an Affiliate issues a Purchase Order under this Agreement, then the “Party” for purposes of such Purchase Order will be the Affiliate, and the Affiliate will be deemed substituted in the place of AstraZeneca solely for the purposes of such Purchase Order. |
6.3 | Method of Payment. Supplier will deliver invoices to AstraZeneca within fifteen (15) days after the end of each calendar month or as specified in the Statement of Work. Each undisputed invoice shall be payable to Supplier within seventy-five (75) days after receipt by AstraZeneca of such invoice, subject to Supplier’s compliance with Section 3.3 below. Unless otherwise instructed by AstraZeneca in writing, all invoices and supporting documentation should be sent to AstraZeneca in accordance with the details set forth in the relevant Statement of Work. Further, each invoice shall contain: (a) AstraZeneca’s complete order number or reference, (b) the number and date of invoice, (c) the latest date of payment, i.e., seventy-five (75) days following AstraZeneca’s receipt thereof, (d) description of services, (e) name and address of Supplier, (f) Supplier’s VAT registration number (in EC), (g) AstraZeneca’s VAT registration number [**] (in EC), (h) VAT rate (%), (i) taxable amount per VAT rate, (j) VAT amount, (k) legal reference or explanation when VAT is excluded, (l) invoice amount and currency, (m) bank details, preferably IBAN code, otherwise account number and bank code, and (n) SWIFT-address. Invoices will (where applicable) include copies of receipts. Supplier will keep original receipts for a period of five (5) years for audit and reporting purposes. |
6.4 | Disputed Invoices. If AstraZeneca contests in good faith, certain elements of any invoice, AstraZeneca will reject the invoice in full and work with Supplier to correct the invoice. AstraZeneca will notify the Supplier in writing not later than ten (10) business days from the date of invoice rejection. AstraZeneca and the Supplier will meet to resolve the disputed amount and Services not later than ten (10) days after Supplier acknowledges the invoice has been disputed. The Supplier may invoice for the Services that are not disputed whilst working to correct the invoice. Should AstraZeneca and the Supplier fail to resolve the disputed amount both agree to escalate to the nominated points of escalation set forth in Schedule 1 (Statement of Work) where both Parties commit to meeting and resolving within ten (10) days of the date of this escalation. Should a resolution not be agreed the Supplier may, without limiting Supplier’s other rights and remedies under this Agreement, (i) consider the failure to pay a material breach of the Agreement; and (ii) upon notice, suspend Services until all disputed amounts are resolved. |
6.5 | Electronic Transactions. To facilitate payment, Supplier agrees to participate in an electronic transaction program using either Ariba Interactive Email or the Ariba Supplier Network |
6.6 | Rate Card. In return for the Services performed under this Agreement, AstraZeneca will pay to Supplier fees as set forth in Schedule 2 (Rate Card) or as specified in an Statement of Work. AstraZeneca will not pay fees for Services not performed and Supplier will refund any prepaid fees for work not performed. |
7 | TAXES |
7.1 | Taxes. The Parties agree that all charges under this Agreement are inclusive of all taxes, levies, duties, contribution, withholding or impost of whatever nature (including related fines, penalties, surcharges of interest) (“Taxes”, each “Tax”) imposed or payable to 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 (“Tax Authority”) except value added or goods and service taxes or other similar taxes computed by reference to turnover that are required by law to be disclosed as a separate item on the relevant invoice (“GST”) that are the responsibility of AstraZeneca under this Agreement. |
7.2 | GST Invoice. Where either Party is required under this Agreement to make a supply (“GST Supplying Party”) to the other Party (“GST Receiving Party”) for Tax purposes, and Tax is chargeable on such supply, the GST Supplying Party shall provide the GST Receiving Party with an invoice (“Tax Invoice”) including such particulars as are required by any law imposing Tax and such other information as required to claim any credit allowed under a law imposing Tax in respect of such supply. All Prices are exclusive of GST, which, if payable, shall be borne and paid against provision by the Supplier of a valid Tax Invoice. |
7.3 | Excess. To the extent, in any circumstances, AstraZeneca has paid GST to Supplier which it subsequently determines was in excess of the GST actually due, Supplier shall repay to AstraZeneca the excess amount. |
7.4 | Tax Deductions. If a deduction or withholding for or on account of Tax (“Tax Deduction”) is required by law to be made by AstraZeneca, the amount of payment due form AstraZeneca to Supplier shall be equal to the payment which would have been due if no Tax Deduction had been required less the Tax Deduction. AstraZeneca shall not be required to make an increased payment to Supplier for a Tax Deduction. AstraZeneca shall co-operate reasonably with Supplier to notify Supplier when AstraZeneca believes a Tax Deduction is required and in connection with any proposed actions of Supplier to reduce or recover the Tax Deduction (e.g., by completing prescribed forms) provided that AstraZeneca shall not dispense or apply a reduced rate of Tax Deduction unless Supplier has provided evidence, in a form reasonably satisfactory to AstraZeneca of authorisation to do so. |
8 | PRODUCT SECURITY |
8.1 | Destruction of Waste. Supplier shall destroy all Waste generated on mutually acceptable timelines, during the Term and upon termination of this Agreement or a Statement of Work. |
8.2 | Standard Operating Procedures. Supplier shall maintain Standard Operating Procedures (“SOPs”) and full records detailing production amounts and the dispersal of produced Products to ensure that product security features of the Products are secured and controlled. The records and Standard Operating Procedures shall be kept for a period of at least two years and made available to AstraZeneca on request. |
8.3 | Subcontractors. Supplier shall include in all of its contracts with its suppliers of materials carrying AstraZeneca’s name, insignia, symbol, trademark, trade name, logotype or similar (“AstraZeneca Trademark”), clauses identical or substantially equivalent to this Article 8 (Product Security). |
8.4 | Confidential Information. Supplier may disclose AstraZeneca Confidential Information pertaining to pack security features and anti-counterfeiting measures only to those of their suppliers who are pre-approved for such purpose by AstraZeneca in writing (“Approved Supplier”). Such disclosure shall be on a purely need to know basis in so far and to the extent absolutely necessary for the purposes of carrying out Supplier’s obligations under this Agreement and on the condition that the Approved Supplier is bound by similar confidentiality obligations to those binding the Supplier under this Agreement. In the event of breach by an Approved Supplier of its confidentiality obligations, Supplier shall cooperate with AstraZeneca in enforcing any rights in respect thereof. |
8.5 | Security Measures. Products shall be delivered by Supplier in a secure manner appropriate to the transportation route and destination. Separate and more stringent security measures such as tamper evident seals may be set out in the Statement of Work. Supplier shall adhere to traceability legislation defined by the US Drug Quality and Security Act (“DQSA”) and the European Parliament Falsified Medicines Directive (Directive 2011/62/EU) (“FMD”) and shall follow AstraZeneca’s specifications, standards and strategy. |
8.6 | Security Breaches. Any incident of breach of the security of the Products, machinery, other tools of production or information pertaining to this Agreement or the relevant Statement of Work shall be reported to AstraZeneca within twenty-four (24) hours of discovery of such incident. Supplier shall provide all reasonable assistance to AstraZeneca during any investigation that AstraZeneca may initiate in relation to such incident. |
8.8 | Improvement Plan. AstraZeneca shall have the right to audit Supplier to ensure adherence to this Agreement and the Parties will agree on an improvement plan to address any concerns that may emerge during the audit. Inability to agree to such plan within reasonable timelines or non-adherence to an agreed improvement plan will give AstraZeneca the right to terminate this Agreement. |
8.8 | Termination. AstraZeneca shall have the right to terminate the Agreement if Supplier or any Employee with the knowledge of Supplier (i) breaches any product security sections, (ii) is convicted of a crime involving Illegal Trade, or (iii) is not so convicted but there is sufficient evidence of their involvement in Illegal Trade including negligence or failure to establish necessary preventive control or where the action could be termed as a deliberate corporate act by Supplier |
9 | CONFIDENTIALITY |
9.1 | Supplier shall, and shall cause the Supplier’s project manager and all others engaged in the Services to: (a) use AstraZeneca Confidential Information only in connection with the performance of the Services, and (b) keep AstraZeneca Confidential Information in strict confidence and not, during the Term of this Agreement and for a period of seven years following termination or expiration of this Agreement, without AstraZeneca’s prior written consent, disclose, disseminate or otherwise make available AstraZeneca Confidential Information. If Supplier becomes aware of disclosure or misuse, Supplier will immediately notify AstraZeneca and take reasonable steps to prevent further disclosure or misuse. |
9.2 | AstraZeneca shall, and shall cause AstraZeneca’s project manager and all others engaged in the Services or activities under this Agreement to: (a) use Supplier’s Confidential Information only in connection with the performance of the Services or the activities contemplated by this Agreement, and (b) keep Supplier’s Confidential Information in strict confidence and not, during the Term of this Agreement and for a period of seven years following termination or expiration of this Agreement, without Supplier’s prior written consent, disclose, disseminate or otherwise make available Supplier Confidential Information. If AstraZeneca becomes aware of disclosure or misuse, AstraZeneca will immediately notify Supplier and take reasonable steps to prevent further disclosure or misuse. |
9.3 | The obligations of confidentiality in 9.1 [or 9.2] (Confidentiality 9.1) shall not extend to any Confidential Information that: (a) is or comes into the public domain without breach of this Agreement, (b) was lawfully obtained from a third party without any confidentiality obligations, or (c) the recipient Party can demonstrate by competent evidence was already in its possession without any limitation on use or disclosure prior to the Effective Date. |
9.4 | Neither Party shall make any public announcement relating to this Agreement or the transactions covered by it or mention or otherwise use the name, insignia, symbol, trademark, trade name or logotype of the other Party or its Affiliates in any publication, press release, promotional material or other form of publicity without the prior written approval of the other Party in each instance. |
10 | TERM AND TERMINATION |
10.1 | Term. This Agreement shall continue in full force and effect for a period of five (5) years from the Effective Date (the “Term”). If Services are being performed by Supplier under a Statement of Work signed by the Parties during the Term and such five year period has expired, then this Agreement shall continue in effect only with respect to any such Statement of Work until its completion. This Agreement may only be extended by mutual written agreement of the Parties. |
10.2 | Termination without Cause. AstraZeneca shall have the right, in its sole discretion and without cause, to terminate this Agreement or any Statement of Work immediately upon twenty (20) days’ prior written notice to Supplier. Upon receipt of such notice of cancellation, Supplier shall inform AstraZeneca of the extent to which performance has been completed through such date and with the applicable SOW. In the event of early termination of this Agreement or any SOW, AstraZeneca’s liability for payment to Supplier under this Agreement shall be limited to payment for satisfactorily completed Services (or prorated for completed portions thereof) delivered to AstraZeneca and other pre-approved or non- |
10.3 | Termination for Cause. Either Party shall have the right to terminate this Agreement or any Statement of Work immediately by written notice to the other Party if the other Party has breached an obligation herein and the breach is not curable. If the breach is curable, the breaching party shall have thirty (30) days from receipt of notice specifying the nature and extent of the breach to cure. This Agreement or the Statement of Work (as applicable) will terminate at the end of this thirty-(30) day period unless the breach is cured or the non-breaching party provides written notice that the cure period is extended beyond thirty (30) days. |
10.4 | Bankruptcy. In the event a Party shall: (i) be declared bankrupt, or (ii) become subject to any proceedings relating to its liquidation, reorganization, or insolvency, or for the appointment of a trustee or receiver or similar official, of or for it or any part of its property, or (iii) fail generally or admit in writing its inability to pay its debts as they become due, or (iv) make a general assignment for the benefit of creditors, or (v) be dissolved or otherwise cease business as an ongoing business entity, then the other party may, upon thirty (30) days prior written notice, terminate this Agreement for cause. In the event of the commencement of a case under the United States Bankruptcy Code by or against Supplier, and during the period prior to entry of an order directing or authorizing Supplier or its trustee in bankruptcy to assume, reject or otherwise terminate this Agreement, AstraZeneca may exercise its rights under Bankruptcy Code §365(n), and the exercise of such rights or resort to any remedies provided thereunder shall not be deemed the exclusive rights or remedies available to AstraZeneca, but AstraZeneca shall be entitled to obtain any relief to the fullest extent provided by Applicable Laws. |
10.5 | Regulatory Sanction. AstraZeneca may terminate this Agreement immediately by written notice to Supplier if: (i) Supplier or one of Supplier’s Employees is convicted of a crime involving pharmaceutical counterfeiting, diversion or illegal trade, or (ii) there is sufficient evidence of Supplier’s involvement in counterfeiting, diversion or illegal trade, and the involvement was either knowing or the result of a failure to establish necessary preventative controls, or (iii) there is a publicly announced investigation by a Regulatory Authority relating to any suspected or actual violation of Anti-Corruption Laws by the Supplier or any Affiliates, consultants, agents, representatives or sub-contractors (including any Sub-Contractors) of the Supplier or its Affiliates connected with this Agreement |
10.6 | Effect of Termination. Termination of a Statement of Work shall not result in the termination of this Agreement or termination of any other Statement of Work. Upon termination of this Agreement for any reason, all Statements of Work then in effect will automatically terminate and Supplier shall cease performing Services (subject to an orderly wind-down of any ongoing activities in accordance with Applicable Law), unless AstraZeneca requests that Supplier complete one or more particular Statements of Work. In such event, the rights and obligations of the Parties under this Agreement will continue in effect with respect to such Statement of Work until their completion unless agreed Section 10.7 (Transition and Exit Plan). Upon termination or expiration of this Agreement for any reason whatsoever, each Party shall return all data, files, records and other materials in its possession or control containing or comprising the other Party’s Information or other Confidential Information to which such first Party does not retain rights under this Agreement (except one copy of which may be retained by the returning Party’s General Counsel solely for archival purposes). |
10.7 | Transition and Exit Plan. In the event of termination and to support an orderly transition, AstraZeneca and Supplier will agree upon a Transition and Exit Plan |
i. | Within five (5) days of notification of the termination, AstraZeneca and Supplier will agree upon the last day for Services; |
ii. | AstraZeneca and Supplier will, within fifteen (15) days of notification of the termination and agreement of the last day for Services, meet to agree upon a Transition and Exit Plan; |
iii. | The Transition and Exit Plan will detail all activities, timelines and costs of these activities, including supporting governance in order to allow for a smooth transition and exit; and |
iv. | Both Parties agree to meet frequently to ensure the Transition and Exit Plan activities and timelines are met and that the correct escalation progress is followed in order to speedily resolve any issues. |
v. | Notwithstanding the foregoing, in the event of any termination of this Agreement or a Statement of Work, AstraZeneca shall remain obligated, and shall make payments to Supplier in accordance with the applicable payment terms of this Agreement and the relevant SOW, for (a) all Services provided to AstraZeneca (1) prior to the termination date or SOW termination date, (2) thereafter at AstraZeneca’s request, or (3) as reasonably necessary to conduct a smooth and orderly wind-down of the Services (including as may be required by Applicable Law), and (b) other pre-approved or non-cancelable expenses or obligations incurred by Supplier as of the termination date or SOW termination date, in each case (clause (a) and (b)), independent of the Parties’ mutual agreement on a Transition and Exit Plan. |
10.8 | Termination for Change of Control. If the Supplier undergoes a Change of Control (or the Supplier anticipates a Change of Control and subject to AstraZeneca entering into a reasonable confidentiality agreement the Supplier can disclose that potential or actual Change of Control), the Supplier shall promptly (and within five (5) Business Days of that Change of Control) notify AstraZeneca of that actual or potential Change of Control. AstraZeneca is entitled within twenty (20) business days of the later of being notified of the Change of Control in accordance with this Section, or becoming aware of the Change of Control of the Supplier to terminate this Agreement on twenty (20) business days written notice. |
10.9 | Survival of Rights and Obligations. The expiration or termination of this Agreement or a Statement of Work shall be without prejudice to any rights or obligations that may have accrued prior to such expiration or termination, and shall not affect any provision which is expressly or by implication intended to come into or continue in force on or after expiration or termination. The respective rights and obligations of the Parties under Articles 0 (Definitions), 19 (Ownership of Results and Background IPR), 9 (Confidentiality) and Sections 10.1 (Termination 10.1) , 10.6 (Effect of Termination 10.6, 10.9 (Survival of Rights and Obligations 10.9), 11.1 (Indemnification 11.1), 47 (Governing Law 47), 48 (Jurisdiction 48), 22 (Mediation 23) and 23 (Arbitration 24), shall survive indefinitely the termination or expiration of this Agreement. |
11 | INDEMNIFICATION |
11.1 | Indemnification. In addition to any other remedy available to the Parties, each Party shall defend, indemnify and hold harmless the other Party, its Affiliates and its and their respective officers, directors, partners, shareholders, employees and agents from and against any |
11.2 | If either Party intends to claim indemnification under this Section (whether for itself or on behalf of another indemnitee), then such Party (the “Indemnified Party”) shall promptly notify the other Party (the “Indemnifying Party”) of any Losses in respect of which the Indemnified Party intends to claim such indemnification reasonably promptly after the Indemnified Party or indemnitee is aware thereof, and the Indemnifying Party shall assume the defense of any related third party action, suit or proceeding with counsel mutually satisfactory to the parties. The indemnity agreement in this Section shall not apply to amounts paid in settlement of any claim, loss, damage or expense if such settlement is effected without the consent of the Indemnifying Party, which consent shall not be withheld, conditioned or delayed unreasonably. The failure of the Indemnified Party to deliver notice to the Indemnifying Party within a reasonable time after the Indemnified Party or the applicable indemnitee becomes aware of any such matter shall not relieve the Indemnifying Party of liability to the Indemnified Party and the indemnitees, except to the extent that the Indemnifying Party is materially prejudiced by any delay in receiving such notice. The Indemnified Party shall, and shall cause its indemnitees to, cooperate fully with the Indemnifying Party and its legal representatives in the investigation of any matter covered by this indemnification. |
11.3 | Indemnification by AstraZeneca. AstraZeneca will defend, indemnify and hold harmless Supplier and its officers, directors, employees, agents, shareholders, partners, distributors, sublicencees, successors and assigns, from and against Losses incurred by them to the extent resulting from or arising out of or in connection with any actual or threatened claim by a third party against them to the extent resulting from or arising out of or in connection with: (i) the gross negligence, recklessness or willful misconduct of AstraZeneca, its Affiliates, and their officers, directors, employees, agents, shareholders, partners, distributors, sublicencees, successors and assigns in the performance of AstraZeneca’s obligations under this Agreement, (ii) a breach by AstraZeneca of its obligations under this Agreement, or (iii) the research, testing, development, manufacture, use, marketing, sale, lease, distribution, licensing, commercialization and/or other disposal of an AstraZeneca product (except for any of the foregoing performed by Supplier), except to the extent such Losses arise as a result of the negligence, fraud, willful misconduct or wrongful act of the Supplier, its Affiliates or its or their respective officers, directors, partners, shareholders, employees or agents. |
11.4 | Notice of Claim. An Indemnified Party shall give the Indemnifying Party prompt written notice of any Losses or discovery of fact upon which such Indemnified Party intends to base a request for indemnification under this Section (an “Indemnification Claim Notice”). The failure of the Indemnified Party to deliver the Indemnification Claim Notice to the Indemnifying Party within a reasonable time after the Indemnified Party or the applicable |
11.5 | Indemnification Procedures. The obligations of an Indemnifying Party under this Section shall be governed by and contingent upon the following: |
11.5.1 | Assumption of Defense. At its option, the Indemnifying Party may assume the defense of any claim by a third party (“Third Party Claim”) by giving written notice to the Indemnified Party within fourteen (14) days after the Indemnifying Party’s receipt of an Indemnification Claim Notice. The assumption of the defense of a Third Party Claim by the Indemnifying Party shall not be construed as an acknowledgement that the Indemnifying Party is liable to indemnify any Indemnified Party in respect of the Third Party Claim, nor shall it constitute a waiver by the Indemnifying Party of any defenses it may assert against any Indemnified Party’s claim for indemnification. |
11.5.2 | Control of Defense. Upon the assumption of the defense of a Third Party Claim by the Indemnifying Party: |
(i) | the Indemnifying Party may appoint as lead counsel in the defense of the Third Party Claim any legal counsel selected by the Indemnifying Party which shall be reasonably acceptable to the Indemnified Party; and |
(ii) | except as expressly provided in Section 11.5.3 (Right to Participate in Defense 11.6.3), the Indemnifying Party shall not be liable to the Indemnified Party for any legal expenses subsequently incurred by such Indemnified Party in connection with the analysis, defense or settlement of the Third Party Claim. In the event that it is ultimately determined that the Indemnifying Party is not obligated to indemnify, defend or hold harmless an Indemnified Party from and against the Third Party Claim, the Indemnified Party shall reimburse the Indemnifying Party for any and all costs and expenses (including lawyers’ fees and costs of suit) and any Loss incurred by the Indemnifying Party in its defense of the Third Party Claim with respect to such Indemnified Party. |
11.5.3 | Right to Participate in Defense. Without limiting Sections 11.5.1 (Assumption of Defense 11.6.1.) or 11.5.2 (Control of Defense 11.6.2), any Indemnified Party shall be entitled to participate in, but not control, the defense of a Third Party Claim and to retain counsel of its choice for such purpose; provided, however, that such retention shall be at the Indemnified Party’s own expense unless: (a) the Indemnifying Party has failed to assume the defense and retain counsel in accordance with this Section 11 (in which case the Indemnified Party shall control the defense), or (b) the interests of the Indemnified Party and the Indemnifying Party with respect to such Third Party Claim are sufficiently adverse to prohibit the |
11.5.4 | Settlement. With respect to all Losses resulting from or arising out of or in connection with Third Party Claims, where the Indemnifying Party has assumed the defense of a Third Party Claim in accordance with Section 11.5.1(Assumption of Defense 11.6.1): (i) the Indemnifying Party shall have authority to consent to the entry of any judgment, enter into any settlement or otherwise dispose of such Losses, provided that it obtains the prior written consent of the Indemnified Party which consent shall not be unreasonably withheld, and (ii) no Indemnified Party shall admit any liability with respect to, or settle, compromise or discharge, any such Third Party Claim without the prior written consent of the Indemnifying Party which consent shall not be unreasonably withheld. |
11.5.5 | Cooperation. If the Indemnifying Party chooses to defend or prosecute any Third Party Claim, the Indemnified Party that is a Party to this Agreement shall, and shall cause each of its indemnitees and each of their respective directors, officers, employees and agents to reasonably cooperate in the defense or prosecution thereof and shall furnish such records, information and testimony, provide such witnesses and attend such conferences, discovery proceedings, hearings, trials and appeals as may be reasonably requested in connection therewith. Such cooperation shall include access during normal business hours by the Indemnifying Party to, and reasonable retention by the Indemnified Party of, records and information that are reasonably relevant to such Third Party Claim, and making the Indemnified Party, its Affiliates and its and their respective directors, officers, employees and agents available on a mutually convenient basis to provide additional information and explanation of any records or information provided, and the Indemnifying Party shall reimburse the Indemnified Party for all of its related reasonable out-of-pocket expenses. |
11.5.6 | Expenses. Except as expressly provided above, the reasonable and verifiable costs and expenses, including fees and disbursements of counsel, incurred by the Indemnified Party in connection with any claim shall be reimbursed on a calendar quarter basis by the Indemnifying Party, without prejudice to the Indemnifying Party’s right to contest the Indemnified Party’s right to indemnification and subject to refund in the event the Indemnifying Party is ultimately held not to be obligated to indemnify the Indemnified Party. |
12 | LIABILITY |
12.1 | No exclusion or limitation. Nothing in this Agreement limits or excludes the liability of either Party for: |
12.1.1 | personal injury or death caused by its negligence; |
12.1.2 | fraud or fraudulent misrepresentation; |
12.1.3 | wilful misconduct; |
12.1.4 | gross negligence; |
12.1.5 | breach of the confidentiality and data protection obligations set forth in this Agreement; |
12.1.6 | any indemnity obligations set forth in this Agreement; |
12.1.7 | any Loss which a Party is obligated to insure; or |
12.1.8 | any liability that by laws applicable to the Parties cannot be excluded or limited. |
12.2 | EXCLUDED TYPES OF LOSS. EXCEPT FOR LIABILITY TO WHICH SECTION 12.1 APPLIES AND THIRD PARTY CLAIMS SUBJECT TO INDEMNIFICATION UNDER SECTION [11], NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL (INCLUDING WITHOUT LIMITATION LOST PROFITS) OR PUNITIVE DAMAGES IN RELATION TO THIS AGREEMENT, REGARDLESS OF THE FORM AND BASIS OF THE ACTION AT ISSUE. |
12.3 | Limitation of liability. Except for liability to which Section 12.1 applies, the total liability of a Party for any one Loss and for the total of all Losses arising from any one act or default under or in connection with this Agreement, shall not exceed a maximum aggregate amount equal to the total payable to the Supplier under this Agreement. |
13 | SUBCONTRACTING |
13.1 | Subcontractors. Supplier shall be the prime contractor. Supplier may engage subcontractors, at no additional cost to AstraZeneca, provided that: (i) Supplier shall receive AstraZeneca’s prior written approval, (ii) the subcontractor shall be bound by confidentiality provisions at least as stringent as those to which Supplier is subject under this Agreement, (iii) Supplier shall not be relieved of any responsibilities or obligations under this Agreement, (iv) Supplier shall remain AstraZeneca’s sole point of contact and sole contracting party, (v) all subcontractor employees shall be subject to the same provisions of this Agreement as Supplier’s Employees, and (vi) Supplier shall be solely responsible for paying all subcontractors unless otherwise stated in a Statement of Work. |
14 | EXPECTATIONS OF THIRD PARTIES |
14.1 | Supplier recognizes AstraZeneca’s commitment to work only with suppliers who embrace the standards of ethical behavior consistent with AstraZeneca’s Global Standard: Expectations of Third Parties, which can be found at: https://www.astrazeneca.com/content/dam/az/our-company/Documents/Global-Standard-Expectations-of-Third-Parties.pdf, as amended from time to time with notice to Supplier, and in particular those principles in Section 1 headed “Anti-Bribery and Anti-Corruption” (“Supplier Expectations”)._ |
14.2 | Supplier represents that it: (i) will perform this Agreement and operate its business in compliance with all Applicable Laws, (ii) has received and read AstraZeneca’s Code of Ethics, which can be found at: https://www.astrazeneca.com/sustainability.html#our-global-policies-0 (iii) will perform this Agreement and operate its business to ethical standards consistent with those set out in the Supplier Expectations, as amended from time to time with notice to Supplier, and in particular those principles in the Section headed “Anti-Bribery and Anti-Corruption,” (iv) will not take any action that will cause AstraZeneca to be in breach of any Applicable Laws for the prevention of fraud, bribery and corruption, racketeering, money laundering or terrorism, product safety, including the US Foreign Corrupt Practices Act, the UK Bribery Act, the US Drug Quality and Security Act (“DQSA”) and the European |
14.3 | In the event that Supplier fails to meet or maintain such ethical standards, the Parties shall agree upon what measures should be taken by Supplier to improve Supplier’s performance (the “Improvement Plan”). If the Parties are unable to agree upon an Improvement Plan or Supplier does not implement the Improvement Plan within an agreed reasonable timescale (not to exceed twelve (12) calendar months), AstraZeneca shall be entitled to terminate this Agreement with immediate effect and be relieved of any future obligations under this Agreement. |
14.4 | Supplier agrees that any material breach or violation by Supplier of the above representations, warranties and undertakings shall give AstraZeneca the right to terminate this Agreement with immediate effect and be relieved of any future obligations under this Agreement. |
15 | RIGHT TO AUDIT |
15.1 | Regulatory Assistance. If a Regulatory Authority desires to conduct an inspection or audit of Supplier’s facility, or any other facility used in connection with Supplier’s performance of this Agreement (including the facilities of Supplier’s Affiliates or subcontractors), with regard to this Agreement, then Supplier shall promptly notify AstraZeneca, and shall permit and cooperate with such inspection and audit. Following receipt of the inspection or audit observations of such Regulatory Authority (a copy of which Supplier shall provide to AstraZeneca as promptly as practicable), Supplier shall prepare the response to any such |
15.2 | Audit Assistance. Supplier shall provide or procure all co-operation and assistance during normal working hours reasonably required by AstraZeneca for the purposes of an audit. AstraZeneca shall procure that any auditor enters into a confidentiality agreement with Supplier equivalent to Article 9 in all material respects. AstraZeneca shall instruct any auditor or other person given access in respect of an audit to cause the minimum amount of disruption to the business of Supplier, its Affiliates and subcontractors and to comply with relevant building and security regulations. |
15.3 | Monitoring. AstraZeneca has policies and procedures in place to monitor and review performance by its third party contractors. Supplier shall reasonably cooperate with AstraZeneca in relation to such monitoring and review, and shall supply all information relating to this Agreement reasonably required by AstraZeneca (or to its non-Affiliate third party professional advisors, in the case of commercially or strategically sensitive information relating to the business of Supplier, its Affiliates or any subcontractors). |
15.4 | Audit Costs. The Parties shall bear their own costs of an audit or rendering assistance under this Article 15, except where AstraZeneca requires an audit to be undertaken by its non-Affiliate third party professional advisors to verify Supplier’s compliance with Article 14 following an undisputed breach of this Agreement, in which case Supplier shall arrange for the audit to take place and pay the fees of any such non-Affiliate third party professional advisors. Any report generated in connection with any such audit conducted in relation to Article 14 shall be the property of Supplier. However, Supplier agrees that AstraZeneca shall be entitled to review any such audit report and all supporting documents in relation to the audit, subject to redactions required by Applicable Law or contract, and of commercially or strategically sensitive information. |
16 | ADVERSE EVENT REPORTING REQUIREMENTS |
16.1 | Responsibilities for Safety Information Management. AstraZeneca acknowledges the following: Supplier does not have the ability and is not responsible for source verification of received information, provided, however, Supplier may be requested to perform data quality checks, to the extent of its ability, to assure the information provided to Supplier is complete and accurate and will provide data to AstraZeneca to allow AstraZeneca to perform a reconciliation of Supplier data and source documents, case report forms or other relevant information. Supplier does not assume responsibility for the evaluation of site conduct and compliance with provided instructions related to use of Supplier supplied equipment or data collection; Supplier Services in the contract pertain to the processing of data which is provided to Supplier by AstraZeneca and AstraZeneca’s [clinical trial] sites and that Supplier has no responsibility for formulating the testing program or for ensuring the safety or efficacy of AstraZeneca’s product(s); and Supplier will not provide a medical diagnosis or any other form of patient care or treatment, but rather a data reduction service only, which may be utilized by AstraZeneca for such uses or purposes as AstraZeneca or its sites in their sole |
16.2 | Adverse Event Reporting Requirements. In the event that Supplier and its Employees, during the course of performing the Services, become aware of an Adverse Event or other reportable AE safety information (including but not limited to medication error, pregnancies, overdoses and laboratory parameters) reported by investigators or study site employees, Supplier is required to collect and submit within one business day from becoming aware, the appropriate information to AstraZeneca as described in the instructions provided in the applicable clinical study protocol. AstraZeneca is solely responsible for reporting AEs and other safety information to regulatory and government authorities. |
17 | ANTI-BRIBERY ANTI-CORRUPTION (“ABAC”) |
i. | As at the Effective Date, Supplier and its Affiliates and to its knowledge, its representatives have not violated any Anti-Corruption Law; and |
ii. | Supplier, its Affiliates and its representatives shall not, directly or indirectly, solicit, receive or agree to accept any payment of money or anything else of value or do anything on AstraZeneca’s behalf that violates or could violate the Anti-Corruption Laws. |
18 | AMENDMENTS, CHANGES AND MODIFICATIONS |
(i) | Amendment; Modification; Waiver. No amendment, modification or waiver of any of the terms of this Agreement or SOW will be deemed valid unless made in writing and duly executed by authorized representatives of both Parties. Each Party will have the right to enforce the Agreement in strict accordance with its terms. The failure of either Party to enforce its rights strictly in accordance with the terms will not be construed as having in any way modified or waived same. |
(ii) | Changes and Modifications. No changes or modifications to this Agreement will be deemed effective unless in writing and executed by the Parties hereto. In the event that Supplier is requested or required to perform Services beyond those which are specifically set forth in a Statement of Work, any such additional Services and an appropriate adjustment to the amounts owed will be negotiated in good faith and must be mutually agreed upon by the Parties in writing prior to the provision of the Services. The Parties may modify the Services by written acceptance of an amended proposal from Supplier, execution of an amendment to a Statement of Work or acceptance by Supplier of a Purchase Order reflecting such additional Services. No modification shall be accepted unless agreed in writing by the Parties. |
19 | OWNERSHIP OF RESULTS AND BACKGROUND IPR |
19.1 | Each Party shall continue to own its own Background IPR. |
19.2 | AstraZeneca hereby grants to Supplier a worldwide, royalty-free, non-exclusive license to AstraZeneca’s Background IPR and Results which are the exclusive property of |
19.3 | Supplier hereby grants to AstraZeneca a world-wide, non-exclusive, royalty free license (with the right to sublicense) to that limited part of Supplier’s Background IPR and any improvements, that AstraZeneca or its sub-licensees requires, to perform the Services or otherwise conduct activities contemplated to be performed by AstraZeneca under a Statement of Work. Supplier hereby grants to AstraZeneca a world-wide, irrevocable, perpetual, non-exclusive, royalty free license (with the right to sublicense) to Supplier Results that AstraZeneca or its sub-licensees requires to develop, use and exploit the Results owned by AstraZeneca. For clarity, such grant to AstraZeneca shall not include a license to Supplier’s Background IPR, and any improvements, to make, have made, use, have used, offer to sell, sell, import, or transfer the Clinical Trial Assay (“CTA”). |
19.4 | Supplier shall in the final report if contemplated by the Statement of Work provide AstraZeneca with information regarding Supplier’s Background IPR and any improvements in sufficient detail to allow AstraZeneca or its sub-licensees to use the right as granted in Section 19.3. |
19.5 | Supplier shall fully disclose and deliver to AstraZeneca all Supplier Results. AstraZeneca shall fully disclose and deliver to Supplier all Results that are necessary or useful for Supplier’s provision of Services and the performance of its obligations under this Agreement. |
19.6 | Supplier agrees that all Results generated with the use of Samples, are the exclusive property of AstraZeneca (or such Person as AstraZeneca may designate). Results generated by the Supplier under this Agreement, which are generated without the use of Samples, , (“Supplier Results”) AstraZeneca agrees are the exclusive property of Supplier (or such Person as Supplier may designate). Each Party (or its designee), without additional consideration, shall own all right, title and interest in and to their respective Results throughout the world. Copyrightable Results shall be considered “work made for hire” and AstraZeneca (or its designee) shall own all right, title, and interest in and to such Results. |
19.7 | Insurance. Supplier shall maintain during the Term, and for five years after the end of the Term if written on a claims made basis, insurance coverage of the types and in the amounts typically carried by companies in Supplier’s business. Supplier shall exhibit to AstraZeneca upon written request certificates of insurance evidencing its insurance coverage and limits. |
19.8 | Supplier shall promptly provide written notice to AstraZeneca upon becoming aware of any potential or actual infringement of any Intellectual Property controlled by a Third Party affecting the use of Supplier’s Background IPR in the activities under a Statement of Work and or the use of the Results by AstraZeneca. In the event a Third Party Licence is necessary to continue to use the Results Supplier shall use commercially reasonable efforts to obtain such Third Party Licence at its own cost. |
20 | ERROR OR DELAY IN PERFORMANCE OF THE SERVICES |
(a) | AstraZeneca shall notify Supplier in writing, detailing the issues and areas of concern. |
(b) | Supplier shall, if so requested by AstraZeneca, provide to AstraZeneca a proposed formal action plan within five (5) working days of AstraZeneca’s notification and the Parties shall then seek to agree such formal action plan no later than 10 days after AstraZeneca’s receipt of Supplier’s proposed action plan. |
(c) | Within 30 days of agreement of the action plan both parties will meet to discuss progress and ensure resolution. If issue(s) continue AstraZeneca shall have the right to terminate the Agreement or the applicable SOW and such termination will be deemed a termination for cause pursuant to Article 10 (Term and Termination) |
20.1 | Without prejudice to the above or any other remedies available to AstraZeneca, Supplier shall take the following steps in the event of an undisputed material error or delay, |
(i) | in the event of such error, repeat such Services at Supplier’s own cost and expense, which includes an obligation for Supplier to pay any costs and expenses for replacement of any AstraZeneca materials under Supplier’s control, and |
(ii) | if such error or delay continues without cure then Supplier shall refund to AstraZeneca the portion of compensation already paid by AstraZeneca for the Services which are unacceptable or invalid, and pay to AstraZeneca the difference in cost of a Third Party’s performance of the same Services that were unacceptable or invalid. |
21 | RESERVED |
22 | MEDIATION |
21.1 | If any dispute arises in connection with this Agreement, the parties will attempt to settle it by mediation in good faith in accordance with the Centre for Effective Dispute Resolution (CEDR) Model Mediation Procedure and the mediation will start, unless otherwise agreed between the Parties, within 28 days of one Party issuing a request to mediate to the other. Unless otherwise agreed between the Parties, the mediator will be nominated by CEDR. The mediation will take place in Stockholm and the language of the mediation will be English.The Mediation Agreement referred to in the Model Mediation Procedure will be governed by, and construed and take effect in accordance with, the substantive law of Sweden the dispute is not settled by mediation within 14 days of the start of the mediation or within such further period as the Parties may agree in writing, the dispute will be referred to and finally resolved by arbitration as described below. |
23 | ARBITRATION |
23.1 | Arbitration. This Agreement shall be governed by the laws of Sweden excluding any conflicts or choice of law, rule or principle that might otherwise refer the construction or interpretation of this Agreement to the substantive law of another jurisdiction. Any dispute, controversy or claim arising out of or in connection with this Agreement, or the breach, termination or invalidity thereof, shall be finally settled by arbitration administered by the Arbitration Institute of the Stockholm Chamber of Commerce (the “SCC Institute”). The Rules for Expedited |
24 | ASSIGNMENT |
24.1 | Neither Party may assign its rights and/or delegate or subcontract its obligations under this Agreement, except as expressly provided in this Agreement, in whole or in part, without the prior written consent of the other Party, which consent shall not be unreasonably withheld, conditioned or delayed, except that each Party shall have the right, without such consent, to assign this Agreement or any or all of its rights, and/or delegate or subcontract any or all of its obligations, hereunder to (a) any of its Affiliates or (b) any successor in interest (whether by merger, acquisition, asset purchase or otherwise) to all or substantially all of the business to which this Agreement relates, provided that a successor in interest of Supplier may not be a competitor of AstraZeneca. Subject to the preceding sentence, this Agreement will be binding upon, inure to the benefit of, and be enforceable by, the Parties and their respective successors and permitted assigns. Any attempted assignment, delegation or subcontracting in violation of this Article 24 shall be void and of no effect. |
25 | RESERVED |
26 | NO MINIMUM COMMITMENT. |
26.1 | Supplier understands and agrees that AstraZeneca makes no minimum commitment to purchase Services and is under no obligation to execute any Statement of Work under this Agreement. |
27 | FURTHER ASSURANCE |
27.1 | Each Party shall perform all further acts and things and execute and deliver such further documents as may be necessary or as the other Party may reasonably request to implement or give effect to the plain meaning of this Agreement. |
28 | DATA PRIVACY |
28.1 | Data Protection and Security Requirements. If the Services involve the transfer, acquisition or Processing of Personal Data by Supplier on behalf of AstraZeneca, Supplier agrees to comply with the requirements as listed in Schedule 3 Data Protection and Security Requirements, with regard to Supplier’s Processing of such Personal Data. Where required, |
29 | DEBARMENT |
29.1 | Supplier represents and warrants to AstraZeneca that Supplier (i) is not excluded, debarred, suspended or otherwise ineligible to participate in government healthcare programs or in government procurement or non-procurement programs and no debarment is pending or |
30 | RESERVED |
31 | RESERVED |
32 | RESERVED |
33 | FORCE MAJEURE |
i. | No liability shall result from delay in performance or non-performance, in whole or in part, by either of the Parties to this Agreement to the extent that such delay or non-performance is caused by an event of Force Majeure (“Force Majeure Event”). |
ii. | Notification. If a Force Majeure Event occurs or a Party reasonably anticipates that a Force Majeure Event may occur, such Party (the “Force Majeure Party”) shall notify the other Party of the nature, details and expected duration of that event. |
iii. | Force Majeure Events. The Force Majeure Party shall, within five (5) days of the occurrence of a Force Majeure Event, give the other Party written notice specifying the nature and extent of the Force Majeure Event, its anticipated duration and any action being taken to avoid or minimize its effect. Where that notice is given and the Force Majeure Party complies with Section 32, the Force Majeure Party shall not be liable for delay in performance or for non-performance of this Agreement resulting from the Force Majeure Event. This suspension of performance shall be of no greater scope and no longer duration than is reasonably required. |
(a) | remedy its inability to perform; and/or |
34 | US PHYSICIAN SUNSHINE ACT REQUIREMENTS |
35 | HUMAN BIOLOGICAL SAMPLES (“HBS”) |
36 | PROMOTIONAL POLICIES |
37 | PUBLICATIONS |
37.1 | Publications Policy. If Supplier provides assistance in producing publications and presentations, Supplier agrees to adhere to the requirements set forth in AstraZeneca’s Global Publications Policy, which can be found at: https://www.astrazeneca.com/content/dam/az/our-company/Sustainability/Publications-Policy.pdf, along with any applicable standards provided to Supplier by the AstraZeneca project manager. Such requirements include, but are not limited to: |
(a) | AstraZeneca, not Supplier, will make initial contact with potential authors; |
(b) | Supplier understands that the author must approve the general content and direction of the article before it is written; |
(c) | Supplier will make no attempt to influence the opinions of the authors; |
(d) | Supplier will obtain the author’s approval of the final version of the article before it is submitted to a journal; |
(e) | Supplier will not be the contact for the target journal; and |
(f) | Supplier’s contribution will be openly acknowledged in any resulting publication in line with its level of contribution. |
(a) | Fully comply with the International Committee of Medical Journal Editors (“ICMJE”) criteria regarding authorship (available at: http://www.icmje.org/recommendations/browse/roles-and-responsibilities/defining-the-role-of-authors-and-contributors.html) and disclosure of any relationship with AstraZeneca and any potential conflicts of interest, including any financial or personal relationships that might be perceived to bias the author’s work; |
(b) | Disclose in any manuscript, journal submission or elsewhere as appropriate or required, any potential conflicts of interest, including any financial or personal relationship with AstraZeneca, the names of any individuals who have provided editorial support for any manuscript or other publication, and all funding sources for the study or publication; and |
(c) | Provide any additional disclosure required by any medical or scientific institution, medical committee or other medical or scientific organization with which the author is affiliated. |
38 | REPRESENTATIONS, WARRANTIES AND COVENANTS |
38.1 | Representations and Warranties of Supplier |
38.1.1 | Supplier represents that it is free to enter into this Agreement and warrants that performance of the Services will not: (i) breach any agreement that obligates Supplier to keep in confidence any trade secrets or confidential information of Supplier or of any third-party entity, or (ii) breach any agreement with a third-party entity that restricts Supplier from providing services to AstraZeneca; or (iii) breaches any Third Party Licence. |
38.1.2 | Supplier represents and warrants that payment of fees by AstraZeneca is not a kickback, inducement or reward for the purpose or use of AstraZeneca products and |
38.1.3 | Supplier represents and warrants that Supplier and its Employees are, and at all times during the Term of this Agreement will be, qualified by training and experience, with appropriate expertise and necessary licenses, approvals and certifications, to perform safely, adequately and lawfully the obligations of Supplier under this Agreement. |
38.1.4 | Supplier warrants that all Supplier Employees performing Services will successfully complete any training required by AstraZeneca as described in a SOW prior to commencing any such Services. AstraZeneca or its designee will be responsible for conducting or providing all instruction and materials necessary for Supplier to conduct any such training. |
39 | RESERVED |
40 | SAFETY AND SECURITY REQUIREMENTS |
40.1 | Safety, Health and Environment (“SHE”) Requirements. Supplier recognizes AstraZeneca’s commitment to working only with suppliers who embrace standards that protect personal health, well-being, safety, and the environment that are consistent with AstraZeneca’s Global Standard: Safety, Health and Environment (“SHE”) which can be found at: https://www.astrazeneca.com/content/dam/az/our-company/Sustainability/SHE-Policy-v50.pdf, as amended from time to time. |
40.2 | Site Security and Safety Requirements. Supplier will ensure that all Employees must comply with all Site Security and Safety Requirements (“Site Security and Safety Requirements”) as applicable, unless otherwise agreed. Employees performing Services at any AstraZeneca facility must be submit to a prequalification process which will be the responsibility of AstraZeneca. All costs of meeting the Safety and Security Requirements and any applicable laws and regulations are the responsibility of Supplier. All Employees working at any AstraZeneca facility must complete required training on general procedures regarding AstraZeneca site practices, including procedures on food, drink, smoking, hygiene, and any other procedures deemed relevant to general conduct at an AstraZeneca site. |
40.3 | Removal of Employees. The violation of a law, regulation, or Site Security and Safety Requirement or any AstraZeneca policy may result in immediate removal from AstraZeneca property of Employees and termination of Services. Immediate removal from the workplace will also result from: (i) conspiring with or directing others to violate the law, regulation or any of these requirements or an AstraZeneca policy, (ii) failing to cooperate in an AstraZeneca investigation of possible or reported violations, or (iii) failing to promptly report violations of law, regulation, Site Security and Safety Requirement or AstraZeneca policy by Employee to his or her employer. |
41 | TRAVEL AND EXPENSES |
41.1 | Expenses. AstraZeneca may reimburse Supplier for certain reasonable and authorized expenses that Supplier incurs in the performance of Services. AstraZeneca will have no obligation to reimburse Supplier for expenses that are not invoiced within ninety (90) days of the date that Supplier incurred such expense. Receipts for expenses must be attached to invoices submitted by Supplier. AstraZeneca will not pay a mark-up on any expenses incurred. |
41.2 | Travel. If AstraZeneca agrees to reimburse Supplier for travel-related expenses, Supplier must comply with AstraZeneca’s Global Standard: Business Travel (“Business Travel Policy”), which can be found at: https://www.astrazeneca.com/content/dam/az/our-company/Sustainability/Business-Travel-Policy-v5-0.pdf. Travel must be reasonable,justified, properly documented and in compliance with the Business Travel Policy and all other relevant AstraZeneca policies. All travel must be approved by AstraZeneca in writing in advance of travel. Supplier is expected to book the lowest logical rates that shall apply to all travel categories – air travel, lodging, rail, ground transport and rental cars. Any request for reimbursement of travel-related expenses incurred by Supplier must be submitted in invoice form to AstraZeneca. The invoice must detail the nature of the travel, department for which travel was undertaken, the itinerary for the travel period |
42 | RESERVED |
43 | RESERVED |
44 | RESERVED |
45 | CONSTRUCTION |
45.1 | Except where the context requires otherwise, whenever used the singular includes the plural, the plural includes the singular, the use of any gender is applicable to all genders and the word “or” has the inclusive meaning represented by the phrase “and/or”. Whenever this Agreement refers to a number of days, unless otherwise specified, such number refers to calendar days. The headings of this Agreement are for convenience of reference only. The term “including” or “includes” as used in this Agreement means including, without limiting the generality of any description preceding such term. The wording of this Agreement shall be deemed to be the wording mutually chosen by the Parties. |
45.2 | The Schedules and Statements of Work (as amended from time to time by agreement of the Parties in writing) form part of this Agreement and have the same force and effect as if expressly set out in the main body of the Agreement. Any reference to the Agreement includes the Schedules and Statements of Work. Any breach of the Schedules and Statements of Work shall be deemed as a breach of this Agreement. |
45.3 | If there is any inconsistency between the Schedules and Statements of Work and any of the other provisions of this Agreement, such other provision shall take precedence over the Schedules and Statements of Work unless such Statement of Work specifically references a specific provision of this Agreement and expressly states that such provision is intended to be changed or amended by such Statement of Work. Such change or amendment shall then apply only with respect to such Statement of Work. |
45.4 | This Agreement is entered into in the English language. All amendments to this Agreement, all correspondence between the Parties concerning or relating to this Agreement and all notices given and all documentation to be delivered by one Party to another pursuant to this Agreement in whatever form, shall be in the English language. The English language version of this Agreement shall, if there is any conflict or ambiguity, take priority over any translated version. |
46 | ENTIRE AGREEMENT AND AMENDMENT |
46.1 | This Agreement (including the Statements of Work) constitutes the entire agreement between the Parties and supersedes and extinguishes all previous agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter. |
46.2 | Each Party agrees that it shall have no remedies in respect of any statement, representation, assurance or warranty (whether made innocently or negligently) that is not set out in this Agreement. Each Party agrees that it shall have no claim for innocent or negligent misrepresentation based on any statement in this Agreement. |
47 | GOVERNING LAW |
47.1 | The interpretation and construction of this Agreement shall be governed by the laws of Sweden. |
48 | JURISDICTION |
48.1 | The Parties hereby consent to the jurisdiction of the courts of the State of Delaware for any action, suit or proceeding arising out of or relating to this Agreement and, except for seeking and obtaining injunctive or equitable relief in a court of competent jurisdiction, agree not to commence any action, suit or proceeding related thereto except in such courts. |
49 | MISCELLANEOUS |
49.1 | Severability. If any provision or part-provision of this Agreement is or becomes invalid, illegal or unenforceable, it shall be deemed modified to the minimum extent necessary to make it valid, legal and enforceable. If such modification is not possible, the relevant provision or part-provision shall be deleted. Any modification to or deletion of a provision or part-provision shall not affect the validity and enforceability of the rest of this Agreement. |
49.2 | Reserved |
49.3 | Notices. Any notice or other communication required or permitted to be given by either Party under this Agreement shall be in writing and shall be deemed given as of (a) the date delivered if delivered by hand, or reputable courier service, (b) the date sent if sent by email (with transmission confirmed), (c) the second Business Day (at the place of delivery) after deposit with an internationally recognized overnight delivery service, or (d) the fifth (5th) Business day after mailing if mailed by registered or certified mail, postage prepaid and return receipt requested, addressed to the other Party at the addresses specified below or to such other addresses of which notice shall have been given in accordance with this Section. This Section is not intended to govern the day-to-day business communications necessary between the Parties in performing their obligations under the terms of this Agreement. |
Supplier | To: | With a copy to: |
ArcherDX, Inc. 2477 55th Street, Suite 202 Boulder, CO 80301 | USA Attention: CEO | ArcherDX. Inc. 16th Floor 50 Milk Street Boston, MA 02109 Attention: General Counsel | |
AstraZeneca | To: | With a copy to: |
AstraZeneca AB [Intentionally Omitted] Attention: [**] | AstraZeneca UK Limited Corporate Legal 1 Francis Crick Avenue Cambridge Biomedical Campus Cambridge CB2 0AA England Email: [**] Attention:[**] |
49.4 | Relationship of the Parties. The status of a Party under this Agreement shall be that of an independent contractor. Nothing contained in this Agreement shall be construed as creating a partnership, joint venture or agency relationship between the Parties or, except as otherwise expressly provided in this Agreement, as granting either Party the authority to bind or contract any obligation in the name of or on the account of the other Party or to make any statements, representations, warranties or commitments on behalf of the other Party. All persons employed by a Party shall be employees of such Party and not of the other Party and all costs and obligations incurred by reason of any such employment shall be for the account and expense of such Party. |
49.5 | Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which shall together be deemed to constitute one agreement. The Parties agree that execution of this Agreement by industry standard electronic signature software and/or by exchanging PDF signatures shall have the same legal force and effect as the exchange of original signatures. If any proceeding arising under or relating to this Agreement, each Party hereby waives any right to raise any defense or waiver based upon execution of this Agreement by means of such electronic signatures or maintenance of the executed agreement electronically. |
49.6 | Execution |
SIGNED for and on behalf of AstraZeneca AB (PUBL.) | SIGNED for and on behalf of ArcherDX, Inc, | |||
By: | /s/ Cecilia Persson | By: | /s/ Christian LaPointe | |
Name: | Cecilia Persson | Name: | Christian LaPointe | |
Title: | Global Category Lead | Title: | General Counsel | |
24 July 2019 | 23 July 2019 |
1. | Background |
2. | Agreement |
SIGNED for and on behalf of | SIGNED for and on behalf of | |
[AstraZeneca UK Limited] [AstraZeneca AB (publ)] [AstraZeneca Pharmaceuticals LP] [MedImmune, LLC] [Other AstraZeneca Legal Entity] | ArcherDX Inc, | |
Signature | Signature | |
Name: | Name: | |
Title: | Title: |
Services Element | Description of requirements and services |
Points of Contact | AstraZeneca point of contact name: Supplier point of contact name: |
Background to the work | |
Study code and compound | |
Description of the work | |
Deliverables (reporting of Results) | |
Standard Operating Procedures (SOPs) | |
Budget | |
Timeline | |
Payment schedule | |
Key personnel | |
Use of subcontractors | |
AZ & Supplier responsibilities | |
Key dependencies | |
Key assumptions | |
Quality standards | |
Service | |
performance | |
Management Governance & Reporting | |
Change | |
Data transfer | |
Supplier systems / and or access to AZ systems | |
Completion & exit or transition | |
Data Privacy requirements |
1. | Definitions |
2. | General Supplier Obligations |
2.1 | Supplier represents, warrants and undertakes to perform its obligations in connection with this Agreement, including the Processing of In-Scope Personal Data, in accordance with Data Protection Laws. |
2.2 | Supplier shall not be entitled to use or otherwise Process In-Scope Personal Data for any reason other than to provide to AstraZeneca the Services defined in this Agreement and only |
2.3 | Supplier shall not disclose or transfer In-Scope Personal Data to any third party except as permitted by Clause 3 (Subcontracting) or as compelled by Applicable Laws. |
2.4 | Supplier shall not transfer In-Scope Personal Data into any Cloud Computing service without AstraZeneca´s prior written authorisation. |
2.4 | Supplier shall implement appropriate technical and organisational measures reflective of current best industry practice and technological development to protect In-Scope Personal Data against accidental or unlawful destruction or accidental loss (including deletion), alteration (including corruption), unauthorised disclosure, use or access and against all other unlawful forms of Processing. In particular, access controls should be in place and any In-Scope Personal Data downloaded onto a portable device or transferred through electronic means shall be encrypted and there should be a process for regularly testing and assessing the effectiveness of technical and organisational measures for ensuring the security of the Processing. |
2.5 | Supplier shall ensure that In-Scope Personal Data are accessible only to Supplier staff on a need-to-know basis and that such staff have been suitably trained according to the nature of the customer data they will be handling and that they are subject to binding confidentiality obligations with respect to their Processing of In-Scope Personal Data. |
3. | Subcontracting |
4. | Security Incidents |
4.1 | Supplier shall notify AstraZeneca within 24 hours of becoming aware of any Security Incident and such notification will include, where possible, the categories and approximate number of data subjects concerned and approximate number of AstraZeneca records concerned, the impact and likely consequences on AstraZeneca and the affected data subjects of the Security Incident, and the corrective action to be taken by Supplier. |
4.2 | Supplier shall promptly implement, at Supplier’s expense (to the extent that the Security Incident was due to a breach of Supplier obligations under this Agreement), all corrective measures to necessary remedy the causes of the Security Incident and shall consult in good faith with AstraZeneca as regarding what remediation efforts may be necessary and reasonable and reasonably co-operate with any remediation efforts undertaken by AstraZeneca. |
4.3 | Supplier shall ensure that such remediation efforts provide for, without limitation, prevention of the recurrence of the same type of Security Incident and inform AstraZeneca of all corrective measures implemented and remediation efforts undertaken. |
5. | Cooperation and Assistance |
5.1 | Supplier shall co-operate with AstraZeneca in order to assist AstraZeneca with its obligations under applicable Data Protection Laws, including without limitation breach notification, privacy impact assessments or consultation obligations with a Data Protection Supervisory Authority. |
5.2 | Supplier shall also notify AstraZeneca within five (5) business days if it receives any communication from an individual, government authority or other party relating to In-Scope Personal Data. Supplier shall not respond to any such request unless obligated to do so under Applicable Laws or requested to do so by AstraZeneca. Supplier shall provide reasonable and timely assistance to help AstraZeneca respond to any such requests related to In-Scope Personal Data where AstraZeneca has a legal obligation to respond within a given timeframe. |
6. | Term and Termination |
6.1 | Any breach by Supplier of the Data Protection and Security Requirements under this Agreement shall be deemed a material breach of this Agreement. |
6.2 | On any termination or expiry of this Agreement, completion of the [Services], or when instructed by AstraZeneca in writing, Supplier shall cease all operations on In-Scope Personal Data and shall, at AstraZeneca’s direction, return and/or irretrievably delete all In-Scope Personal Data Processed by Supplier under this Agreement and in a format agreed by the Parties and instruct its Subcontractors to do the same. Should Supplier be prevented by its national law or local regulator from destroying or returning all or part of such In-Scope Personal Data, Supplier shall keep the In-Scope Personal Data confidential and not Processed the In-Scope Personal Data for any other purpose. Subject to the foregoing, Supplier shall complete the return and/or erasure of In-Scope Personal Data within 60 days of termination or expiry of this Agreement between the Parties. |
6.3 | The obligations under the Data Protection and Security Requirements shall expressly survive termination or expiry of this Agreement. |
7. | Record Keeping and Audits |
7.1 | Supplier shall maintain all records required by Data Protection Law, including in respect of its Processing of In-Scope Personal Data, and make them available to AstraZeneca upon request. |
7.2 | AstraZeneca or its representatives have the right to conduct, with reasonable prior notice and under appropriate confidentiality restrictions and at its own expense, an audit of Supplier’s systems, policies and procedures that involve the Processing of In-Scope Personal Data. Where applicable, this may be done in agreement with a competent Data Protection Supervisory Authority. Such review may be conducted up to once annually, excluding audits at the request of a Data Protection Supervisory Authority that may be requested at any point in time by the Data Protection Supervisory Authorities or following a Security Incident. Following an audit under this Clause, AstraZeneca shall notify Supplier of the manner in which Supplier does not comply with any of the data protection obligations herein. Upon such notice, Supplier shall make any necessary changes to ensure compliance with such obligations. |
7.3 | In addition to, and not in lieu of, AstraZeneca’s right to conduct a review as described in the paragraph above, Supplier shall make available to AstraZeneca, upon AstraZeneca’s request all information necessary to demonstrate compliance with Data Protection Law, including but not limited to a copy of any independent auditor’s report which relates directly to Supplier’s performance under this Agreement (to be made not more than once annually). |
8. | Third Party Beneficiaries |
9. | Indemnification and liability |
10. | International Transfers |
(a) | ‘personal data’, ‘special categories of data’, ‘process/processing’, ‘controller’, ‘processor’, ‘data subject’ and ‘supervisory authority’ shall have the same meaning as in Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data1; |
(b) | ‘the data exporter’ means the controller who transfers the personal data; |
(c) | ‘the data importer’ means the processor who agrees to receive from the data exporter personal data intended for processing on his behalf after the transfer in accordance with his instructions and the terms of the Clauses and who is not subject to a third country’s system ensuring adequate protection within the meaning of Article 25(1) of Directive 95/46/EC; |
(d) | ‘the subprocessor’ means any processor engaged by the data importer or by any other subprocessor of the data importer who agrees to receive from the data importer or from any other subprocessor of the data importer personal data exclusively intended for processing activities to be carried out on behalf of the data exporter after the transfer in accordance with his instructions, the terms of the Clauses and the terms of the written subcontract; |
(e) | ‘the applicable data protection law’ means the legislation protecting the fundamental rights and freedoms of individuals and, in particular, their right to privacy with respect to the processing of personal data applicable to a data controller in the Member State in which the data exporter is established; |
(f) | ‘technical and organisational security measures’ means those measures aimed at protecting personal data against accidental or unlawful destruction or accidental loss, alteration, unauthorised disclosure or access, in particular where the processing involves the transmission of data over a network, and against all other unlawful forms of processing. |
1. | The data subject can enforce against the data exporter this Clause, Clause 4(b) to (i), Clause 5(a) to (e), and (g) to (j), Clause 6(1) and (2), Clause 7, Clause 8(2), and Clauses 9 to 12 as third-party beneficiary. |
2. | The data subject can enforce against the data importer this Clause, Clause 5(a) to (e) and (g), Clause 6, Clause 7, Clause 8(2), and Clauses 9 to 12, in cases where the data exporter has factually disappeared or has ceased to exist in law unless any successor entity has assumed the entire legal obligations of the data exporter by contract or by operation of law, as a result of which it takes on the rights and obligations of the data exporter, in which case the data subject can enforce them against such entity. |
3. | The data subject can enforce against the subprocessor this Clause, Clause 5(a) to (e) and (g), Clause 6, Clause 7, Clause 8(2), and Clauses 9 to 12, in cases where both the data exporter and the data importer have factually disappeared or ceased to exist in law or have become insolvent, unless any successor entity has assumed the entire legal obligations of the data exporter by contract or by operation of law as a result of which it takes on the rights and obligations of the data exporter, in which case the data subject can enforce them against such entity. Such third-party liability of the subprocessor shall be limited to its own processing operations under the Clauses. |
4. | The parties do not object to a data subject being represented by an association or other body if the data subject so expressly wishes and if permitted by national law. |
(a) | that the processing, including the transfer itself, of the personal data has been and will continue to be carried out in accordance with the relevant provisions of the applicable data protection law (and, where applicable, has been notified to the relevant authorities of the |
(b) | that it has instructed and throughout the duration of the personal data processing services will instruct the data importer to process the personal data transferred only on the data exporter’s behalf and in accordance with the applicable data protection law and the Clauses; |
(c) | that the data importer will provide sufficient guarantees in respect of the technical and organisational security measures specified in Appendix 2 to this contract; |
(d) | that after assessment of the requirements of the applicable data protection law, the security measures are appropriate to protect personal data against accidental or unlawful destruction or accidental loss, alteration, unauthorised disclosure or access, in particular where the processing involves the transmission of data over a network, and against all other unlawful forms of processing, and that these measures ensure a level of security appropriate to the risks presented by the processing and the nature of the data to be protected having regard to the state of the art and the cost of their implementation; |
(e) | that it will ensure compliance with the security measures; |
(f) | that, if the transfer involves special categories of data, the data subject has been informed or will be informed before, or as soon as possible after, the transfer that its data could be transmitted to a third country not providing adequate protection within the meaning of Directive 95/46/EC; |
(g) | to forward any notification received from the data importer or any subprocessor pursuant to Clause 5(b) and Clause 8(3) to the data protection supervisory authority if the data exporter decides to continue the transfer or to lift the suspension; |
(h) | to make available to the data subjects upon request a copy of the Clauses, with the exception of Appendix 2, and a summary description of the security measures, as well as a copy of any contract for subprocessing services which has to be made in accordance with the Clauses, unless the Clauses or the contract contain commercial information, in which case it may remove such commercial information; |
(i) | that, in the event of subprocessing, the processing activity is carried out in accordance with Clause 11 by a subprocessor providing at least the same level of protection for the personal data and the rights of data subject as the data importer under the Clauses; and |
(j) | that it will ensure compliance with Clause 4(a) to (i). |
(a) | to process the personal data only on behalf of the data exporter and in compliance with its instructions and the Clauses; if it cannot provide such compliance for whatever reasons, it agrees to inform promptly the data exporter of its inability to comply, in which case the data exporter is entitled to suspend the transfer of data and/or terminate the contract; |
(b) | that it has no reason to believe that the legislation applicable to it prevents it from fulfilling the instructions received from the data exporter and its obligations under the contract and that in the event of a change in this legislation which is likely to have a substantial adverse effect on the warranties and obligations provided by the Clauses, it will promptly notify the change to the data exporter as soon as it is aware, in which case the data exporter is entitled to suspend the transfer of data and/or terminate the contract; |
(c) | that it has implemented the technical and organisational security measures specified in Appendix 2 before processing the personal data transferred; |
(d) | that it will promptly notify the data exporter about: |
(i) | any legally binding request for disclosure of the personal data by a law enforcement authority unless otherwise prohibited, such as a prohibition under criminal law to preserve the confidentiality of a law enforcement investigation, |
(ii) | any accidental or unauthorised access, and |
(iii) | any request received directly from the data subjects without responding to that request, unless it has been otherwise authorised to do so; |
(e) | to deal promptly and properly with all inquiries from the data exporter relating to its processing of the personal data subject to the transfer and to abide by the advice of the supervisory authority with regard to the processing of the data transferred; |
(f) | at the request of the data exporter to submit its data processing facilities for audit of the processing activities covered by the Clauses which shall be carried out by the data exporter or an inspection body composed of independent members and in possession of the required professional qualifications bound by a duty of confidentiality, selected by the data exporter, where applicable, in agreement with the supervisory authority; |
(g) | to make available to the data subject upon request a copy of the Clauses, or any existing contract for subprocessing, unless the Clauses or contract contain commercial information, in which case it may remove such commercial information, with the exception of Appendix 2 which shall be replaced by a summary description of the security measures in those cases where the data subject is unable to obtain a copy from the data exporter; |
(h) | that, in the event of subprocessing, it has previously informed the data exporter and obtained its prior written consent; |
(i) | that the processing services by the subprocessor will be carried out in accordance with Clause 11; |
(j) | to send promptly a copy of any subprocessor agreement it concludes under the Clauses to the data exporter. |
1. | The parties agree that any data subject, who has suffered damage as a result of any breach of the obligations referred to in Clause 3 or in Clause 11 by any party or subprocessor is entitled to receive compensation from the data exporter for the damage suffered. |
2. | If a data subject is not able to bring a claim for compensation in accordance with paragraph 1 against the data exporter, arising out of a breach by the data importer or his subprocessor of any of their obligations referred to in Clause 3 or in Clause 11, because the data exporter has factually disappeared or ceased to exist in law or has become insolvent, the data importer agrees that the data subject may issue a claim against the data importer as if it were the data exporter, unless any successor entity has assumed the entire legal obligations of the data exporter by contract of by operation of law, in which case the data subject can enforce its rights against such entity. |
3. | If a data subject is not able to bring a claim against the data exporter or the data importer referred to in paragraphs 1 and 2, arising out of a breach by the subprocessor of any of their obligations referred to in Clause 3 or in Clause 11 because both the data exporter and the data importer have factually disappeared or ceased to exist in law or have become insolvent, the subprocessor agrees that the data subject may issue a claim against the data subprocessor with regard to its own processing operations under the Clauses as if it were the data exporter or the data importer, unless any successor entity has assumed the entire legal obligations of the data exporter or data importer by contract or by operation of law, in which case the data subject can enforce its rights against such entity. The liability of the subprocessor shall be limited to its own processing operations under the Clauses. |
1. | The data importer agrees that if the data subject invokes against it third-party beneficiary rights and/or claims compensation for damages under the Clauses, the data importer will accept the decision of the data subject: |
(a) | to refer the dispute to mediation, by an independent person or, where applicable, by the supervisory authority; |
(b) | to refer the dispute to the courts in the Member State in which the data exporter is established. |
2. | The parties agree that the choice made by the data subject will not prejudice its substantive or procedural rights to seek remedies in accordance with other provisions of national or international law. |
1. | The data exporter agrees to deposit a copy of this contract with the supervisory authority if it so requests or if such deposit is required under the applicable data protection law. |
2. | The parties agree that the supervisory authority has the right to conduct an audit of the data importer, and of any subprocessor, which has the same scope and is subject to the same conditions as would apply to an audit of the data exporter under the applicable data protection law. |
3. | The data importer shall promptly inform the data exporter about the existence of legislation applicable to it or any subprocessor preventing the conduct of an audit of the data importer, or any subprocessor, pursuant to paragraph 2. In such a case the data exporter shall be entitled to take the measures foreseen in Clause 5 (b). |
1. | The data importer shall not subcontract any of its processing operations performed on behalf of the data exporter under the Clauses without the prior written consent of the data exporter. Where the data importer subcontracts its obligations under the Clauses, with the consent of the data exporter, it shall do so only by way of a written agreement with the subprocessor which imposes the same obligations on the subprocessor as are imposed on the data importer under the Clauses3. Where the subprocessor fails to fulfil its data protection obligations under such written agreement the data importer shall remain fully liable to the data exporter for the performance of the subprocessor’s obligations under such agreement. |
2. | The prior written contract between the data importer and the subprocessor shall also provide for a third-party beneficiary clause as laid down in Clause 3 for cases where the data subject is not able to bring the claim for compensation referred to in paragraph 1 of Clause 6 against the data exporter or the data importer because they have factually disappeared or have ceased to exist in law or have become insolvent and no successor entity has assumed the entire legal obligations of the data exporter or data importer by contract or by operation of law. Such third-party liability of the subprocessor shall be limited to its own processing operations under the Clauses. |
3. | The provisions relating to data protection aspects for subprocessing of the contract referred to in paragraph 1 shall be governed by the law of the Member State in which the data exporter is established, namely the laws of the European Economic Area country where the data exporting entity has its place of establishment. |
4. | The data exporter shall keep a list of subprocessing agreements concluded under the Clauses and notified by the data importer pursuant to Clause 5 (j), which shall be updated at least once a year. The list shall be available to the data exporter’s data protection supervisory authority. |
1. | The parties agree that on the termination of the provision of data processing services, the data importer and the subprocessor shall, at the choice of the data exporter, return all the personal data transferred and the copies thereof to the data exporter or shall destroy all the personal data and certify to the data exporter that it has done so, unless legislation imposed upon the data importer prevents it from returning or destroying all or part of the personal data transferred. In that case, the data importer warrants that it will guarantee the confidentiality of the personal data transferred and will not actively process the personal data transferred anymore. |
2. | The data importer and the subprocessor warrant that upon request of the data exporter and/or of the supervisory authority, it will submit its data processing facilities for an audit of the measures referred to in paragraph 1. |
Signature | ||||
Date | ||||
(stamp of organisation) |
Signature | ||||
Date |
• | Clinical Trials: conduct/coordinate clinical studies sponsored by Astra Zeneca for the development and testing of medicines, medical aids. |
DATA EXPORTER | DATA IMPORTER | |
Name: Matthew Craske | Name: Christian LaPointe | |
Authorised Signature | Authorised Signature | |
Name of AstraZeneca Affiliate | Address (including country) | Telephone Number | Other Information (if applicable) |
[**] | [Intentionally Omitted] | [**] | |
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[**] | [Intentionally Omitted] | [**] | |
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[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | ||
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | [**] | |
[**] | [Intentionally Omitted] | ||
[**] | [Intentionally Omitted] |
• | The full Prescribing Information or label sets out the approved conditions for use of a drug, including the indications, dosages, patient populations, warnings, contraindications and Adverse Events. Every promotional communication must be consistent with the label and you must not discuss off-label indications, uses or populations, even reactively. |
• | Any promotional communication, however brief or informal, must contain balance between benefits and risks of a Product. Supplier must not diminish the warnings in the label or suggest an Adverse Event is a benefit. |
• | AstraZeneca will only promote our Products to Health Care Professionals (“HCPs”) that are reasonably likely to prescribe them for labeled indications. AstraZeneca has safeguards in place to ensure that we do not promote our Products to medical specialties that are unlikely to prescribe for on-label uses. These safeguards include HCP blocking from promotional eligibility and sales incentive planning restrictions. |
• | Supplier must offer a copy of the label for each Product discussion you initiate. Any Product promotional materials you leave behind or send must include a copy of the label. |
• | AstraZeneca maintains defined regulatory approval processes to ensure that all promotional materials are reviewed by qualified AstraZeneca personnel and are medically and scientifically accurate, objective and compliant with regulatory requirements. |
• | No AstraZeneca employee or vendor can use, publish or communicate promotional materials that have not been approved through the appropriate regulatory approval process. |
• | Although AstraZeneca can use patient de-identified sales and individual prescribing data for a variety of appropriate reasons, this data must be kept strictly confidential and cannot be shared with customers, competitors or anyone else outside of AstraZeneca or its Affiliates, unless expressly authorized by written agreement. |
• | Supplier must not share or reference prescribing trends or details shown by the data (for example, changes in an HCP’s use of a product over time or use of competitor products). |
• | Supplier should not intentionally engage in product discussions with patients and consumers. If Supplier comes into contact with patients or consumers at HCP offices, hospitals, health fairs and similar events, Supplier must not interfere, in any way, in the relationship between patients and their HCPs. |
• | Supplier must not intentionally observe treatment of a patient without verifying that the HCP has obtained the patient’s written consent for your observation. Supplier must not examine patient or prescription files or similar records or otherwise obtain access to specific information about prescribing practices covering individual patients. |
• | Supplier must obtain an affirmative opt-in before initiating consumer communications and honor the requests of consumers. |
• | Supplier must only collect personal information for legitimate business purposes and inform third parties of the purpose before or at the time of collection. |
• | An Adverse Event is the development of an undesirable condition or deterioration of a pre-existing medical condition following or during exposure to a drug, regardless of whether the drug is believed to be the cause of the event. |
• | Supplier must make every effort to report a death or life-threatening event on the same day you become aware of it by contacting AstraZeneca Information Center. Supplier must report other safety events within one business day. |
• | The communication of objective, balanced and substantiated scientific information constitutes scientific exchange and is not regulated as promotional activity as long as the exchange does not occur in a promotional context and additional safeguards are in place. In order to preserve the separation between scientific exchange and promotional activities, only scientifically trained individuals outside of a commercial role may participate in scientific exchange. |
• | AstraZeneca’s Patient Assistance Programs (“PAPs”) provide patients with access to our medicines regardless of their ability to pay. To ensure that these programs are not misused for commercial purposes, discussion about our PAPs must be separated from product promotion to avoid any suggestion that our PAPs are intended to increase sales. |
• | PAPs must never be provided as an incentive or reward for past, current or future prescribing, purchasing, use or dispensing of our products, or to help offset a payor’s cost of purchasing or reimbursing our products. |
1.1 | “Applicable Laws” means all national, supranational, federal, state, foreign or provincial and local laws (including case law), legislation, European regulations, statutes, statutory instruments, rules, regulations, edicts, by-laws or directions or guidance from government or governmental agencies, including any rules, regulations, guidelines or other requirements of Regulatory Authorities, which have the force of law and any industry codes of practice in effect from time to time. |
1.2 | “Approved Third Party Supplier” means a supplier of Human Biological Samples on AstraZeneca’s list of approved suppliers for the relevant type of HBS from time to time. |
1.3 | “De-identified” when used in relation to any data or information shall mean data or information which has been stripped of all subject information that could make an individual identifiable and where the party that shares the information or data has no reasonable knowledge which makes it possible to use the remaining information to identify the individual on its own or in combination with other information that could be reasonably obtained. This includes but is not limited to the removal, masking or generalization of all 18 HIPAA (the U.S. Health Insurance Portability and Accountability Act) identifiers. This means that there are no data points left that could be reasonably used to link the data set to a particular individual, such as age older than 89 years old; geographic location smaller than a State (or equivalent); exact elements of dates directly related to an individual (i.e., date of birth, date of death, dates of hospital visits, etc.); any unique identifying number, characteristic or code directly linked to an individual (i.e., national ID number, social security number, bank account number); contact details of any type; biometric identifiers (e.g., finger and voice prints); photos and comparable images; etc. and the parties supplying and receiving the information or data have no knowledge which makes it possible to use the remaining information to identify the individual. |
1.4 | “Diagnostic Samples” means any Human Biological Samples collected for purposes of diagnostics. |
1.5 | “Donor” means the individual from whom the Human Biological Sample(s) are acquired. |
1.6 | “Donor Information” means the following information relating to a Donor of Human Biological Samples and any additional information stipulated in Statement of Work: |
(a) | year of birth of Donor; |
(b) | state of health of Donor and if applicable his/her agonal state; |
(c) | the Donor’s medical history; |
(d) | details of any restriction on the HBS in regard to Donor’s informed consent; |
(e) | informed consent documentation template relating to the relevant HBS, along with true, complete, accurate and not misleading details of how the actual consent documentation signed by or on behalf of Donor varies from such template. |
1.7 | Good Clinical Practice” or “GCP” means the ICH ethical and scientific quality standard for designing, conducting, recording and reporting trials that involve the participation of human subjects. |
1.8 | “Good Industry Practice” shall mean standards, practices, methods and procedures conforming to Applicable Laws, including as applicable, Good Clinical Practice and Good Laboratory Practice, and the degree of skill and care, diligence, prudence and foresight which would reasonably and ordinarily be expected from a skilled and experienced operator engaged in a similar undertaking under similar circumstances. |
1.9 | “Good Laboratory Practice” or “GLP” means the OECD ENV/MC/CHEM(98)17 quality system concerned with the organizational process and the conditions under which non-clinical health and environmental safety studies are planned, performed, monitored, recorded, archived and reported. |
1.10 | “Human Biological Samples” or “HBS” means biological materials acquired or derived from living or deceased human beings, which consist of or include human cells, subject to the following inclusions and exclusions: |
1.10.1 | Human Biological Samples or HBS include, but are not limited to: |
(a) | solid specimens and certain materials processed directly from tissue, such as tissue sections on slides; |
(b) | all primary tissue including primary cells, whole explant/biopsy cells, whole blood, plasma, serum, certain body fluids (including bile, excreta and sputum); |
(c) | all samples and their derivatives, collected under informed consent on behalf of AstraZeneca during clinical trials/studies; and |
(d) | DNA and other derivatives generated from the biological materials referred to above, where traceable to individual Donors (consent requirements apply). |
1.10.2 | Subject to Section 1.10.3 below (Sweden) Human Biological Samples or HBS exclude: |
(a) | cells that have divided outside the body, including immortalized cell lines, as well as processed or acellular materials derived from human tissue, fluids or cells; such as proteins, lipids, assay controls, growth factors and other human molecules/substances; |
(b) | biological samples of human origin (such as antibodies) that are not classified as HBS under the definition above shall be treated as laboratory reagents; |
(c) | eggs, sperm, and human embryos (outside the body) (other restrictions apply); |
(d) | cloned gene libraries (genomic and cDNA); and |
(e) | RNA (unless for analysis technique to generate genomic DNA). |
1.10.3 | Where sourced within Sweden, HBS shall additionally include cells that have been divided outside the body, including cell lines, processed or acellular materials derived from human tissue, fluids or cells, genes and parts of genes, and other types of biological materials – if traceable to a person, living or dead or a fetus. |
1.11 | “Remnant Samples” means the remnant of Human Biological Samples collected for routine clinical care or analysis that would otherwise have been discarded. |
2.1 | Supplier recognizes AstraZeneca’s commitment to working only with suppliers who embrace standards of ethical behavior that are consistent with AstraZeneca’s Global Policy on Bioethics, which can be found at: https://www.astrazeneca.com/content/dam/az/ourcompany/Sustainability/Bioethics-Policy-v60.pdf Supplier represents, warrants and undertakes that it shall perform the Services and operate its business in a manner which is consistent with said policy. |
2.2 | The Parties shall agree on each Party’s responsibility in respect of sourcing or providing Human Biological Samples to be used in the Services. To the extent this is not specifically set forth in this Agreement, such HBS shall be sourced or provided by Supplier unless AstraZeneca requires otherwise. The term Services as used in this Agreement shall be deemed to include Supplier process of collecting or preparing HBS. |
2.3 | Each Party shall ensure that any HBS sourced or provided by such Party conform to the requirements set forth in this Agreement. Supplier acknowledges and agrees that, the custody and control of, and to the extent permitted by law, title to, Human Biological Samples provided by AstraZeneca shall at all times remain with AstraZeneca (or its designee). |
2.4 | Supplier warrants and represents that all Human Biological Materials will be sourced or provided (insofar as they are sourced or provided by Supplier handled, retained, used, maintained, stored, transferred, transported and disposed of in accordance with the provisions set forth in this Agreement, all Applicable Laws, Good Industry Practice and any instructions or policies provided by or on behalf of AstraZeneca. Unless otherwise agreed with AstraZeneca in writing Supplier furthermore warrants and represents that it shall not use the HBS for any purpose other than in Supplier’s performance of Services and only in accordance with the provisions set forth in this Agreement. |
2.5 | Supplier shall ensure that all Human Biological Samples and any associated data or information sourced or provided by Supplier and used in the Services are of appropriate quality, are fit for purpose, suitable for the intended research purposes and in all respects, conform with the requirements specified in this Agreement. |
2.6 | Unless otherwise agreed to in writing by AstraZeneca, Supplier shall source or provide Human Biological Samples in accordance with the following order of precedence: (a) firstly from Supplier’s own internal biobank (if relevant to the nature of the relevant HBS), (b) secondly from an AstraZeneca Approved Third Party Supplier, and (c) thirdly, solely with AstraZeneca’s written consent, a supplier approved in advance by AstraZeneca. HBS may not be sourced from a third party without the prior written consent of AstraZeneca. |
2.7 | AstraZeneca may monitor Supplier’s acquisition process for Human Biological Samples and any associated data or information and has the right but not the obligation to audit the process to ensure compliance with this Agreement. |
2.8 | Supplier acknowledges and agrees that the Human Biological Samples are experimental in nature. Under no circumstance shall Supplier use the HBS in humans. |
2.9 | Supplier acknowledges and agrees that, subject to Section 2.10, all Human Biological Samples provided by AstraZeneca are provided “as is”, and to the maximum extent permitted by applicable law AstraZeneca hereby disclaims and excludes any and all representations, warranties, conditions or other terms, whether written or oral, expressed or implied, with respect to such HBS, including any representation or warranty of quality, performance, merchantability or fitness for a particular use or purpose. |
2.10 | A Party sourcing or providing Human Biological Samples under this Agreement shall ensure it has obtained or is in the possession of all necessary ethical approvals as well as the appropriate informed consent of either the Donor or the person entitled under Applicable Laws required for: (a) the sourcing or provision (including via a third party) of such HBS and any associated data or information, (b) the use of such HBS and any associated data or information in the Services and (c) the assignment and transfer to and use by AstraZeneca or its designee of the Results and (if relevant) the HBS and any associated data or information. Said Party furthermore represents and warrants that the informed consent process and pro-forma used for sourcing or providing such HBS and any associated data or information as well as the informed consent: |
2.11 | Supplier shall not source or provide Human Biological Samples for which no informed consent has been obtained, Remnant Samples, Diagnostic Samples or HBS which contain human embryonic stem cells (“hESCs”) or human fetal tissues (“hFTs”), or any cells derived from any of the aforesaid, unless AstraZeneca has provided prior written consent to such supply and the source of such supply, such approvals to be given or withheld in AstraZeneca’s sole discretion. |
2.12 | A Party sourcing or providing Human Biological Samples under this Agreement shall promptly notify the other Party in writing of any restrictions on the transfer, shipment, storage, use or disposal of the Human Biological Samples and any associated data or information, including the relevant Donor Information, or if the Donor of any HBS withdraws the informed consent in whole or in part. If the informed consent to use a HBS in the Services is withdrawn, the Parties shall immediately discontinue using such HBS and shall handle it and ensure disposal is carried out in accordance with the process referred to in Section 2.17 and 2.18. Furthermore, AstraZeneca shall have the right, at its own option, to: (a) allow for the sourcing |
2.13 | A Party sourcing or providing Human Biological Samples under this Agreement shall supply Donor Information and other information or data stipulated in this Agreement to the other Party. This obligation The Donor Information and any such other information or data shall be coded, De-identified or anonymised so that the receiving Party does not know the identity of the Donor. |
2.14 | To the extent the Services include the delivery of Human Biological Samples to AstraZeneca, any such HBS and any associated information or data shall be in coded and De-identified or anonymized form so that AstraZeneca does not know the identity of the Donor. AstraZeneca acknowledges the importance of data privacy of individuals to whom shared data may relate and it commits not to attempt to locate or re-identify individuals who are the subject of the data, not to combine the supplied data with other sources of data that could lead to the identification of any individual, and not to reverse engineer, reverse assemble or decompile the data. |
2.15 | Supplier shall, and shall ensure its suppliers and subcontractors have in place and maintain all the safety procedures and practices required by Applicable Law to adequately protect the quality of the Human Biological Samples and integrity of the Donor Information and any other associated data or information and shall ensure that its/their (as applicable) employees, agents, and other representatives comply with such safety procedures and practices. |
2.16 | Supplier shall, and shall ensure its suppliers and subcontractors have in place and maintain a tracking system and a chain-of-custody for all Human Biological Samples to allow traceability and enable the identification of the chronological history of the life cycle of the HBS. |
2.17 | Supplier shall, and shall ensure its suppliers and subcontractors have in place and maintain throughout the Term a documented and defined process in accordance with Applicable Laws and Good Industry Practice for the handling and disposal of excess, obsolete or rejected Human Biological Samples. To the extent any HBS are destroyed, Supplier shall keep records of destruction and shall provide copies thereof to AstraZeneca on AstraZeneca’s request. |
2.18 | At the completion of the Services, the early termination of this Agreement or the relevant Statement of Work, as the case may be, or at AstraZeneca’s earlier request, Supplier shall handle and dispose of the Human Biological Samples in accordance with AstraZeneca’s instructions and Supplier shall not make any further use thereof. In the event AstraZeneca requires destruction of any HBS, and in the absence of specific instructions from AstraZeneca, Supplier shall destroy the HBS within a prompt timeframe and in accordance with the process set forth in Section 2.17. |
Service Level Description | Conditions | Service Level Measurement | Service Measurement Period |
Service Level 1 Accuracy of reporting of patient results (reports or data) back to AZ or clinical sites. Applies to prospective and retrospective sample analysis | Pre-requisite: AZ to provide biomarker eligibility rules to be programmed by Supplier | Expected: 100% accurate data reported back to clinical sites for each patient. Applicable to all SOWs | Per each patient sample through duration of service |
Service Level 2 TATs for sample analysis and reporting of patient Results to clinical sites (positive or failed) or AZ Applies to prospective and retrospective sample analysis | No patient identification query or failure of DNA extraction hold | Achieve contractually agreed TATs across all Project Schedules and associated SoWs each month. To be calculated from sample being accessioned at Supplier 95% of samples monthly within expected TATs | Monthly frequency |
Service Level 3 TATs for new drafting new SoW, or SOW amendment | Pre-requisite: agreed prices for each activity and timelines required for their delivery | SOW drafts to take between ten (10) and fifteen (15) days as agreed by the Parties depending on the complexity of the RFP Same to apply to amendments | Per each contract |
1. | Sample adequacy assessment |
2. | Identification/analysis of tumour specific variants |
3. | Those chosen for tracking |
4. | Those identified |
5. | Pre-requests, for example tumour EGFRm status, (discuss if TMB & MSI pipeline/plans in place) |
6. | Raw data files in an agreed format |
Article 1 | DEFINITIONS | 1 |
Article 2 | PROJECTS | 15 |
2.1. | Project Schedules | 15 |
2.2. | Adoption of Project Schedules | 15 |
2.4. | Amendments to Project Schedules | 17 |
2.5. | Project Delays | 18 |
2.6 | Project Suspension | 20 |
2.7. | Conflicting Provisions | 21 |
2.8 | KPIs | 22 |
Article 3 | MATERIALS | 22 |
3.1. | Procurement of Materials | 22 |
3.2. | Delivery of AZ Materials | 22 |
3.3. | Use Restrictions | 23 |
3.4. | Materials Handling and Retention by Company | 23 |
3.5. | Return or Destruction of Materials | 23 |
3.6. | Samples | 23 |
Article 4 | TRANSFERS OF AZ CLINICAL DATA | 24 |
4.1. | Overview | 24 |
4.2. | Data Transfer | 24 |
4.3. | Conditions on Transfer of Clinical Data | 24 |
4.4. | Conditions of Transfer of Samples | 25 |
4.5 | Confidentiality | 25 |
Article 5 | DEVELOPMENT AND REGULATORY ACTIVITIES | 26 |
5.1. | General Principles | 26 |
5.2. | Collaboration on Regulatory Strategy | 26 |
5.3. | Regulatory Approval of Company Assays | 27 |
5.4. | Regulatory Approval of AZ Products | 28 |
5.5. | Costs | 29 |
5.6. | Compliance Audit | 29 |
5.7 | Regulatory Audits | 29 |
Article 6 | COMMERCIALIZATION | 29 |
6.1. | Coordination on Commercialization Activities | 29 |
6.2. | Company’s Commercialization Obligations | 29 |
6.3. | Availability of Company Assays | 30 |
6.4. | Commercialization Terms | 30 |
6.5. | Compliance with Applicable Law | 30 |
6.6. | AZ Discontinuation in Markets | 30 |
6.7. | Failure to Commercialize a Company Assay | 31 |
Article 7 | COLLABORATION MANAGEMENT | 31 |
7.1. | Joint Project Teams | 31 |
7.2 | Joint Programme Committee | 34 |
7.3. | JPC Co-Chairs | 34 |
7.4. | Responsibilities of the JPC | 34 |
7.5. | General Provisions Applicable to the JPC | 35 |
7.6. | Joint Steering Committee | 36 |
7.7. | JSC Co-Chairs | 36 |
7.8. | Responsibilities of the JSC | 36 |
7.9. | General Provisions Applicable to the JSC | 36 |
7.10. | Limitations on Authority | 38 |
7.11. | Primary Contact Persons | 38 |
Article 8 | PAYMENTS AND RECORDS | 38 |
8.1. | Fee Schedules | 38 |
8.2. | Invoices | 38 |
8.3. | Mode of Payment | 39 |
8.4. | Taxes | 39 |
8.5. | Financial Records | 40 |
8.6. | Financial Audit | 40 |
8.7. | No Right to Offset | 41 |
Article 9 | INTELLECTUAL PROPERTY OWNERSHIP AND LICENSE GRANTS | 41 |
9.1. | Ownership | 41 |
9.2. | License Grants | 41 |
9.3. | Sublicenses | 43 |
9.4. | Rights Controlled by Third Parties | 43 |
9.5. | Disclosure of Foreground IP | 43 |
9.6. | Assignment | 43 |
9.7. | Assignment Obligation | 44 |
9.8. | Third Party Licenses | 44 |
9.9. | Rights of Reference | 45 |
9.10. | Retained Rights | 46 |
Article 10 | INTELLECTUAL PROPERTY PROSECUTION, ENFORCEMENT AND DEFENSE | 46 |
10.1. | Patent Prosecution and Maintenance | 46 |
10.2. | Enforcement of Patents | 47 |
10.3. | Infringement Claims by Third Parties | 47 |
10.4. | Invalidity or Unenforceability Defenses or Actions | 48 |
Article 11 | CONFIDENTIALITY AND NON-DISCLOSURE | 49 |
11.1. | Confidentiality Obligations | 49 |
11.2. | Permitted Disclosures | 50 |
11.3. | Use of Name | 51 |
11.4. | Public Announcements | 52 |
11.5. | Publication | 52 |
11.6. | Return of Confidential Information | 53 |
Article 12 | REPRESENTATIONS, WARRANTIES AND COVENANTS | 53 |
12.1. | Mutual Representations and Warranties | 53 |
12.2. | Representations and Warranties of Company | 54 |
12.3. | Representations and Warranties of AZ | 55 |
12.4. | Anti-Bribery | 55 |
12.5 | DISCLAIMER OF WARRANTIES | 56 |
Article 13 | INDEMNITY | 57 |
13.1. | Indemnification of Company | 57 |
13.2. | Indemnification of AZ | 57 |
13.3. | Indemnification Procedures | 58 |
13.4. | LIMITATIONS OF LIABILITY | 60 |
13.5. | Insurance | 61 |
Article 14 | TERM AND TERMINATION | 61 |
14.1. | Term | 61 |
14.2. | Termination | 61 |
14.3. | Rights in Bankruptcy | 63 |
14.4. | Consequences of Termination | 64 |
14.5 | Termination Fees | 65 |
14.6. | Return of Materials and Confidential Information | 66 |
14.7. | Remedies | 66 |
14.8. | Accrued Rights; Surviving Obligations | 66 |
Article 15 | MISCELLANEOUS | 66 |
15.1. | Non-Exclusive Relationship | 66 |
15.2. | Subcontracting | 67 |
15.3. | Force Majeure | 67 |
15.4. | Export Control | 67 |
15.5. | Assignment | 67 |
15.6. | Severability | 68 |
15.7. | Dispute Resolution | 69 |
15.8. | Governing Law, Jurisdiction and Service | 69 |
15.9. | Notices | 70 |
15.10. | Entire Agreement; Amendments | 71 |
15.11. | English Language | 71 |
15.12. | Equitable Relief | 71 |
15.13. | Waiver and Non-Exclusion of Remedies | 72 |
15.14. | No Benefit to Third Parties | 72 |
15.15. | Further Assurance | 72 |
15.16. | AZ Affiliates | 72 |
15.17. | Relationship of the Parties | 72 |
15.18. | References | 72 |
15.19. | Construction | 73 |
15.20. | Counterparts | 73 |
with cc to: | AZ’s Project Leader for the applicable JPT Contact |
with cc to: | AZ’s Project Leader for the applicable JPT |
ASTRAZENECA UK LIMITED | ARCHER DX, INC |
By: /s/ Ruth March | By: /s/ Christian LaPointe |
Name: Ruth March | Name: Christian LaPointe |
Title: SVP Precision Medicine | Title: Deputy General Counsel |
1. | GENERAL INFORMATION |
2. | BIOMARKER INFORMATION |
3. | PRE-EXISTING BIOMARKER ASSAY INFORMATION |
4. | CLINICAL STRATEGY |
5. | CLINICAL TRIAL DESIGN |
6. | CLINICAL TRIAL LOGISTICS |
7. | REGULATORY INFORMATION |
8. | MARKETS |
A. Overview | Identifies core aspects that are defined in the Master Collaboration Agreement |
B. Milestones, Activities, Inputs & Deliverables | Describes Activities to be performed and associated Deliverables |
C. Timeline | Specifies projected start date and projected end date for each Activity, and checkpoint dates (if any), and the associated Deliverables. |
D. Key Assumptions | Any key assumptions at the outset of the Project that, if they were not to occur during the course of the Project, may require an alteration to this PROJECT SCHEDULE. |
E. Fee Schedules | Fixed milestone fees or payment amounts. |
F. | Delays, Project |
Suspensions | Company FTE rate, if applicable, specific to the Project Schedule. |
G. Service Levels | Key Performance Indicators (Service Levels), if applicable, specific for the Project Schedule |
H. Special Terms | Terms applicable to this PROJECT SCHEDULE that the Parties agree are either not specified by provisions of the Master Collaboration Agreement or are that the Parties specifically agree |
to supersede conflicting provisions of the Master Collaboration Agreement. |
A. | OVERVIEW |
B. | MILESTONES, ACTIVITIES, INPUTS and DELIVERABLES |
Inputs/Activities | Company role | AZ role | DATE |
{define activity (e.g. development activities) or input (e.g. review/AZ Materials to be provided by AZ} | {define roles } | {define roles and individuals} | {define date by when it is needed} |
Milestone | Est. Start Date | Est. Finish Date | Deliverables |
0 | |||
1 | |||
2 | |||
3 |
C. | TIMELINE |
D. | FEE SCHEDULES |
Milestone | Fee | Fee Structure |
0 | ||
1 | ||
2 | ||
3 | ||
4 | ||
5 | ||
Total Fee |
E. | DELAYS, PROJECT SUSPENSIONS |
F. | SERVICE LEVELS |
G. | SPECIAL TERMS |
ARCHERDX, INC. | ASTRAZENECA UK LIMITED | |||||
By: | By: | |||||
Name: | Name: |
AZ Project Team Leader: | |
AZ budget holder | |
AZ Business Development Contact: | |
AZ Alliance Management Contact: | |
AZ Primary Contact Person | |
Company Alliance Manager Contact: | |
Company Business Development Contact: | |
Company Primary Contact Person |
• | Invoice date (date of issue) |
• | Invoice number |
• | Purchase Order number (to be provided) |
• | Company’s Tax ID number |
• | Complete reference for the Agreement and, if applicable, the Project Schedule |
• | Company’s full address |
• | Project milestone achieved, or Project Deliverables provided, as described in the Project Schedule delivery date, if different from invoice date |
• | Invoice amount and currency in Dollars |
• | Bank details, preferably IBAN code. Otherwise account number and bank code SWIFT address. |
BORROWER: | |
ARCHERDX, INC. | |
By | /s/ Jason Myers |
Name: Jason Myers | |
Title: CEO and President |
By: | /s/ Sandeep Dixit |
Name: Sandeep Dixit | |
Title: Chief Credit Officer |
By: | |
Name: Sam Chawla | |
Title: Portfolio Manager |
By: | |
Name: Sandeep Dixit | |
Title: Chief Credit Officer |
By: | /s/ Sam Chawla |
Name: Sam Chawla | |
Title: Portfolio Manager |
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