On May 2, 2012, Lonza granted Immune a sub-licensable, non-exclusive
worldwide license under certain know-how and patent rights to use, develop,
manufacture, market, sell, offer, distribute, import and export Bertilimumab, as it
is produced through the use of Lonza’s system of cell lines, vectors and know-
how. If Lonza manufactures Bertilimumab, Immune is required to pay to pay
Lonza a royalty of 1% of the net selling price of the product. If Immune or one of
its strategic partners manufactures Bertilimumab, Immune is required to Lonza
£75,000, or approximately $113,873, annually during the course of the license
agreement (first payable upon commencement of Phase II clinical trials) plus a
royalty of 1.5% of the net selling price of the product, and if any other party
manufactures the Bertilimumab, Immune is required to pay to Lonza £300,000, or
approximately $455,490, per sublicense annually during the duration of such
sublicense plus a royalty of 2% of the net selling price of the product. In addition,
Immune is required to pay Lonza £2,000, or approximately $3,045, for the supply
of certain cell lines, if it uses such cell lines. Notwithstanding the foregoing,
Immune is not obligated to manufacture bertilimumab through the use of Lonza’s
system. The royalties are subject to a 50% reduction based on the lack of certain
patent protections, including the expiration of patents, on a country-by-country
basis. Unless earlier terminated (including, but not limited to, the reasons set
forth below), the license agreement continues until the expiration of the last
enforceable valid claim to the licensed patent rights, which expire between 2014
and 2016.
