HTT Research, Development, Option and License Agreement among the Registrant, F. Hoffmann-La Roche Ltd and Hoffmann-La Roche Inc., dated as of April. 8, 2013

This HTT RESEARCH, DEVELOPMENT, OPTION AND LICENSE AGREEMENT (the “Agreement”) is entered into as of the 8^th day of April, 2013 (the “Effective Date”) by and among Isis Pharmaceuticals, Inc., a Delaware corporation, having its principal place of business at 2855 Gazelle Court, Carlsbad, California 92010 (“Isis”), and F. Hoffmann-La Roche Ltd, a Swiss corporation, having its principal place of business at Grenzacherstrasse 124, 4070 Basel, Switzerland (“Roche Basel”) and Hoffmann-La Roche Inc.,  a New Jersey corporation, having its principal place of business at 340 Kingsland Street, Nutley, New Jersey 07110 (“Roche Nutley”; Roche Basel and Roche Nutley are collectively referred to as “Roche”). Roche and Isis each may be referred to herein individually as a “Party” or collectively as the “Parties.”  Capitalized terms used in this Agreement, whether used in the singular or the plural, have the meaning set forth in Appendix 1.  All attached appendices and schedules are a part of this Agreement.

WHEREAS, Isis has expertise in discovering and developing antisense drugs, and is researching compounds to identify and select a drug to treat Huntington’s Disease;

WHEREAS, Roche has expertise in developing and commercializing drugs, and Roche is interested in researching, developing and commercializing an antisense drug to treat Huntington’s Disease;

WHEREAS, Roche and Isis desire to conduct research activities to identify and select at least one antisense drug to treat Huntington’s Disease;

WHEREAS, Roche and Isis also desire to conduct a research collaboration focused on discovering an antisense drug to treat Huntington’s Disease using Roche’s Brain Shuttle technology designed to deliver drugs through the blood-brain barrier;

WHEREAS, the Parties anticipate they will conduct the research programs in parallel with and without using Roche’s Brain Shuttle technology, recognizing that Isis’ non-Brain Shuttle program is further along in the research and development process, and that drugs from either or both program(s) may move forward in development based on emergent data and the commercial market of the individual drugs; and

WHEREAS, Roche desires Isis to develop the HTT drug through completion of the initial Phase 1 Trial and grant Roche an option to obtain an exclusive license to develop and commercialize such drug;

NOW, THEREFORE, in consideration of the respective covenants, representations, warranties and agreements set forth herein, the Parties hereto agree as follows:

Prior to Initiation of the first Registration-Directed Trial for a given Product, Roche will prepare a Development and global integrated development and commercialization plan (“IDCP”) outlining key aspects for Developing such Product through Approval, and Roche’s worldwide strategy to launch and Commercialize such Product. The IDCP will incorporate and replace the applicable R&D Plan and will take the form of, and contain information consistent with, Roche’s Development and Commercialization plans for its similar products at similar stages of development or commercialization, including Product Sales forecasts. Once Roche has prepared such plan, Roche will update the IDCP consistent with Roche’s standard practice and provide such updates to Isis at least Annually.

*[***] milestone payment is only payable once in accordance with Section 1.8.1(b).

^†This milestone payment is not payable by Roche if Roche has already paid Isis the [***] milestone payment under Column 1 of this Table 1.

Except for the [***] milestone payment in Column 2 of Table 1 for an Additional Isis Development Candidate, Roche will pay to Isis the Milestone Event payments as set forth in Table 1 after the applicable Milestone Event is first achieved by a Development Candidate even if Roche has exercised the Option prior to achievement of the Milestone Event.

In addition, Roche will include in each report under this Section 6.12.2 information regarding any Net Sales of Products sold for named patient, compassionate use or other similar sales and any consideration received from any Compulsory Sublicensees.

The provisions of this Section 6.14 are to be read in conjunction with the provisions of Section 12.4 below.

except, in each case above, to the extent such Claim arose out of or resulted from or is attributable to any acts or omissions of Isis or its Affiliates, licensees, Sublicensees or contractors, and its or their respective directors, officers, employees and agents or other circumstance for which Isis has an indemnity obligation pursuant to Section 9.2.

except, in each case above, to the extent such Claim arose out of or resulted from or is attributable to any acts or omissions of Roche or its Affiliates, licensees, Sublicensees or contractors and its or their respective directors, officers, employees and agents or other circumstance for which Roche has an indemnity obligation pursuant to Section 9.1.

The period from the Effective Date until the date of expiration of this Agreement pursuant to this Section 10.1 is the “Agreement Term.” On a Product-by-Product basis, if with respect to a particular Product this Agreement expires (i.e., is not terminated early) under Section 10.1.1 or Section 10.1.2 in a particular country, then, effective upon such expiration, Isis will and hereby does grant to Roche a fully paid-up and irrevocable non-exclusive license under the Licensed Technology to Manufacture, Develop and Commercialize the Product that is the subject of such expiration in such country.

The milestone provisions of Section 6.4 and Section 6.5 and the royalty provisions of Section 6.7 will [***].

To the extent the Non-Transferring Party utilizes a [***] in any year, the Non-Transferring Party will [***] to the Transferring Party [***]. To assist the Transferring Party  in determining when [***] pursuant to the foregoing sentence, beginning with the first Annual tax return for the year in which the [***] payment under this Section 12.4, and each year thereafter (including, for clarity, all years in which the Non-Transferring Party utilizes a [***]), the Non-Transferring Party will provide the Transferring Party  with  the Non-Transferring Party s’ Annual tax returns (federal and state) and, in years in which the Non-Transferring Party utilizes the [***], supporting documentation for such [***].

or to such other address for such Party as it will have specified by like notice to the other Party; provided that notices of a change of address will be effective only upon receipt thereof.  If delivered personally or by facsimile transmission, the date of delivery will be deemed to be the date on which such notice or request was given.  If sent by overnight express courier service, the date of delivery will be deemed to be the next Business Day after such notice or request was deposited with such service.  If sent by certified mail, the date of delivery will be deemed to be the third Business Day after such notice or request was deposited with the U.S. Postal Service.

F. Hoffmann-La Roche AG

Kreditorenbuchhaltung

4070 Basel

Switzerland

with an electronic copy to Roche’s Alliance Manager.

Upon Isis’ request, Roche’s Alliance Manager will provide Isis’ Alliance Manager with any additional information reasonably requested by Isis to facilitate the prompt delivery of invoices to Roche, including a facsimile number for sending invoices.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives thereunto duly authorized as of the Effective Date.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives thereunto duly authorized as of the Effective Date.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their representatives thereunto duly authorized as of the Effective Date.

Appendix 5 – Roche’s Development/Commercialization Activities and Specific Performance Milestone Events

Appendix 6 – Brain Shuttle Collaboration Patents

Appendix 7 – Relevant Permitted Licenses as of the Effective Date

For purposes of this Agreement, the following capitalized terms will have the following meanings:

“Acceptance” means, with respect to an NDA, MAA or JNDA filed for a Product, (a) in the United States, the receipt of written notice from the FDA in accordance with 21 C.F.R. §314.101(a)(2) that such NDA is officially “filed,” (b) in the European Union, receipt of written notice of acceptance by the EMA of such MAA for filing under the centralized European procedure in accordance with any feedback received from European Regulatory Authorities; provided that if the centralized filing procedure is not used, then Acceptance will be determined upon the acceptance of such MAA by the applicable Regulatory Authority in a Major Market in the EU, and (c) in Japan, receipt of written notice of acceptance of filing of such JNDA from the Koseisho (i.e., the Japanese Ministry of Health and Welfare, or any successor agency thereto).

“Additional Core IP” has the meaning set forth in Section 6.11.3(a).

“Additional Costs” means [***].

“Additional Isis Development Candidate-Cost Estimate” has the meaning set forth in Section 1.8.3.

“Additional Isis In-License Agreements” has the meaning set forth in Section 6.11.1(b).

“Additional Product-Specific Patents” has the meaning set forth in Section 6.11.2(a).

“Affiliate” of an entity means any corporation, firm, partnership or other entity which directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with a Party to this Agreement. An entity will be deemed to control another entity if it (i) owns, directly or indirectly, more than fifty percent (50%) of the outstanding voting securities or capital stock (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of such other entity, or has other comparable ownership interest with respect to any entity other than a corporation; or (ii) has the power, whether pursuant to contract, ownership of securities or otherwise, to direct the management and policies of the entity.  Anything to the contrary in this paragraph notwithstanding, Chugai Pharmaceutical Co., Ltd, a Japanese corporation (“Chugai”), shall not be deemed an Affiliate of Roche unless Roche provides written notice to Isis of its desire to include Chugai as an Affiliate of Roche.

“Agreement” has the meaning set forth in the Preamble of this Agreement.

“Agreement Term” has the meaning set forth in Section 10.1.

“Alliance Manager” has the meaning set forth in Section 1.5.3.

“ANDA” means an Abbreviated New Drug Application and all amendments and supplements thereto filed with the FDA, or the equivalent application filed with any equivalent agency or governmental authority outside the U.S. (including any supra-national agency such as the EMA in the EU).

“Annual” means the period covering a Calendar Year or occurring once per Calendar Year, as the context requires.

“API” means the bulk active pharmaceutical ingredient manufactured in accordance with cGMP for a Product.

“Applicable Law” or “Law” means all applicable laws, statutes, rules, regulations and other pronouncements having the effect of law of any federal, national, multinational, 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 the Regulatory Authorities that may be in effect from time to time.

“Approval” means (i) with respect to a Product in the EU, the earlier to occur of (A) approval from the applicable Regulatory Authority in at least one member state in the EU sufficient for the manufacture, distribution, use, marketing and sale of such Product, including pricing and reimbursement approval, in such jurisdiction in accordance with Applicable Laws, or (B) the First Commercial Sale of a Product in the EU; and (ii) with respect to a Product in any regulatory jurisdiction other than the EU, approval sufficient for the manufacture, distribution, use, marketing and sale of such Product in such jurisdiction in accordance with Applicable Laws.

“Approved Changes” means any changes (including number of subjects, duration of dosing, additional studies, additional endpoints, additional analysis, etc.) to the Isis Development Candidate-R&D Plan that are agreed to by Roche (including any changes required by a Regulatory Authority).

“AS ASO” has the meaning set forth in Section 2.1.1(b)(ii).

“AS Development Candidate” has the meaning set forth in Section 2.1.1(b)(ii).

“ASO” means an oligonucleotide compound, or analog, variant, mimic, or mimetic thereof, having a sequence that is at least six bases long and that modulates expression or splicing of a gene target via the binding, partially or wholly, of such compound to the RNA of such gene target.

“ASO-Specific Collaboration Patents” has the meaning set forth in Section 7.1.3(a).

“Audit Report” has the meaning set forth in Section 6.13.

“Back-Up Compound” means a Compound (other than the first Development Candidate) that was used in any monkey tolerability screen performed to identify the first Development Candidate.

“Bankruptcy Code” has the meaning set forth in Section 10.2.5(b).

“Brain Shuttle” has the meaning set forth in Section 1.1.

“Brain Shuttle Collaboration Patents” means Patent Rights arising under the Brain Shuttle Development Candidate-R&D Plan after the Effective Date that are Controlled by a Party or any of its Affiliates. The Parties will list on Appendix 6 the Brain Shuttle Collaboration Patents, and will update Appendix 6 when additional Brain Shuttle Collaboration Patents arise under the Brain Shuttle Development Candidate-R&D Plan.

“Brain Shuttle Development Candidate” has the meaning set forth in Section 1.3.1.

“Brain Shuttle Development Candidate-R&D Plan” means the research and development plan attached hereto as Appendix 3 (as may be amended in accordance with this Agreement) to conduct the Isis R&D Activities and Roche R&D Activities designated under such plan focused on the research and development of a Brain Shuttle Development Candidate.

“Brain Shuttle Development Candidate Reverse Royalties” has the meaning set forth in Section 6.10.2.

“Brain Shuttle Program Cost Estimate” has the meaning set forth in Section 1.6.2(b)(i).

“Brain Shuttle-Specific Collaboration Patents” has the meaning set forth in Section 7.1.3(a).

“Brain Shuttle Technology” means the Brain Shuttle technology disclosed in the Roche Existing Brain Shuttle Patents listed on Schedule 8.4.1 or otherwise existing as of the Effective Date as evidenced by Roche’s written records.

“Breaching Party” means the Party that is believed by the Non-Breaching Party to be in material breach of this Agreement.

“Business Day” means any day other than a Saturday or Sunday on which banking institutions in New York, New York are open for business.

“Calendar Quarter” means a period of three consecutive months ending on the last day of March, June, September, or December, respectively, and will also include the period beginning on the Effective Date and ending on the last day of the Calendar Quarter in which the Effective Date falls.

“Calendar Year” means a year beginning on January 1 (or, with respect to 2013, the Effective Date) and ending on December 31.

“CDA” has the meaning set forth in Section 11.2.

“cGMP” means current Good Manufacturing Practices as specified in the United States Code of Federal Regulations, ICH Guideline Q7A, or equivalent laws, rules, or regulations of an applicable Regulatory Authority at the time of manufacture.

“Change of Control” means, with respect to a Party: (a) the acquisition by any Third Party of beneficial ownership of more than fifty percent (50%) of the then outstanding common shares or voting power of such Party, other than acquisitions by employee benefit plans sponsored or maintained by such Party; (b) the consummation of a business combination involving such Party, unless, following such business combination, the stockholders of such Party immediately prior to such business combination beneficially own directly or indirectly more than fifty percent (50%) of the then outstanding common shares or voting power of the entity resulting from such business combination.

“Change Overruns” has the meaning set forth in Section 1.6.1(b).

“CHDI” means the CHDI Foundation, Inc.

“Claims” has the meaning set forth in Section 9.1.

“Clinical Study” or “Clinical Studies” means a Phase 1 Trial, Phase 2 Trial, Registration-Directed Trial or Phase 4 Trial, or such other study in humans that is conducted in accordance with good clinical practices and is designed to generate data in support or maintenance of an NDA, MAA, JNDA or other similar marketing application.

“CMO” means a Third Party contract manufacturer Manufacturing API or finished drug Product for any purpose under this Agreement.

“Collaboration” means the conduct of research and development of a Compound, Isis Development Candidate, or Brain Shuttle Development Candidate (as applicable), in each case in accordance with the applicable R&D Plan.

“Collaboration Patents” means collectively Roche Collaboration Patents, Isis Collaboration Patents and Jointly-Owned Collaboration Patents.

“Commercialize,” “Commercialization” or “Commercializing” means any and all activities directed to marketing, promoting, detailing, distributing, importing, having imported, exporting, having exported, selling or offering to sell a Product following receipt of Approval for a Product in the applicable country, including conducting pre-and post-Approval activities, including studies reasonably required to increase the market potential of a Product and studies to provide improved formulation and Product delivery, and launching and promoting a Product in each country.

“Commercializing Party” means (a) Roche, with respect to a Product that is being Developed and Commercialized by or on behalf of Roche, its Affiliates or Sublicensees hereunder, and (b) Isis, with respect to a Discontinued Product that is being Developed and Commercialized by or on behalf of Isis, its Affiliates or Sublicensees hereunder.

“Commercially Reasonable Efforts” means the carrying out of discovery, research, development or commercialization activities using good-faith commercially reasonable and diligent efforts that the applicable Party would reasonably devote to a compound or product of similar market potential or profit potential at a similar stage in development or product life resulting from its own research efforts, based on conditions then prevailing and taking into account, without limitation, issues of safety and efficacy, regulatory authority-approved labeling, product profile, the competitiveness of alternative products in the marketplace, the likely timing of the product’s entry into the market, the patent and other proprietary position, the likelihood of approval and other relevant scientific, technical and commercial factors. The Isis Development Candidate-R&D Plan attached to this Agreement as of the Effective Date as Appendix 2 exemplifies a level of diligence that meets the Commercially Reasonable Efforts standard required under this Agreement. Without limiting any of the foregoing, (A) Commercially Reasonable Efforts as it applies to Roche’s Development or Commercialization of a Product hereunder includes the use of Commercially Reasonable Efforts to (i) perform the Roche R&D Activities designated under the R&D Plans in accordance with the timelines set forth therein, (ii) perform the activities set forth in each IDCP in accordance with the timelines set forth therein, (iii) perform the “General Activities” set forth in Appendix 5, and (iv) achieve the specific performance milestone events set forth in Appendix 5 (“Specific Performance Milestone Events”) for a Product on the timeline set forth in Appendix 5; provided, however, if (X) regulatory or Development issues arise that are outside of Roche’s reasonable control and make achievement of any such Specific Performance Milestone Event on the stated timeline impossible, or (Y) an Isis Development Candidate is being Developed but Roche subsequently decides to Develop a Brain Shuttle Development Candidate in lieu of such Isis Development Candidate, the Parties will meet and negotiate in good faith to revise, consistent with any applicable Isis In-License Agreements, the date by which the applicable Specific Performance Milestone Event must be achieved; and (B) Commercially Reasonable Efforts as it applies to Isis’ Development of a Product hereunder includes use of Commercially Reasonable Efforts to perform the Isis R&D Activities designated under the R&D Plans in accordance with the timelines set forth therein.  However, Roche (and its Affiliates) does not always seek to market its own products in every country or seek to obtain regulatory approval in every country or for every potential indication. As a result, the exercise of diligence by Roche is to be determined by judging Roche’s commercially reasonable efforts in the Major Markets, taken as a whole.

“Companion Diagnostic IP” has the meaning set forth in Section 10.4.2(c).

“Companion Diagnostic Product” has the meaning set forth in Section 10.4.2(c).

“Competitive Infringement” has the meaning set forth in Section 7.5.1.

“Compound” means an ASO that is designed to bind to (i) the RNA that encodes HTT (such ASO, a “Non-Allele Selective Compound”); or (ii) a SNP site within an HTT RNA that is associated with an expanded CAG repeat to selectively reduce the expanded CAG-repeat containing RNA relative to the normal HTT RNA via an RNase H dependent mechanism (such ASO, an “Allele Selective Compound”), in each case where such ASO is discovered by Isis prior to or in the performance of an R&D Plan.

“Compulsory Sublicense” means a Sublicense granted to a Third Party, through the order, decree or grant of a governmental authority having competent jurisdiction, authorizing such Third Party to manufacture, use, sale, offer for sale, import or export a Product in any country.

“Compulsory Sublicensee” means a Third Party that was granted a Compulsory Sublicense.

“Confidential Information” has the meaning set forth in Section 11.1. “Confidential Information” does not include information that:

“Control” or “Controlled” means possession of the ability to grant a license or sublicense hereunder without violating the terms of any agreement with any Third Party; provided, however, that if a Party has a right to grant a license or sublicense, with respect to an item of intellectual property to the other Party only upon payment of compensation (including milestones or royalties) to a Third Party (“Third Party Compensation”) (other than Isis Supported Pass-Through Costs in the case of Isis, and other than Roche Supported Pass-Through Costs in the case of Roche), then the first Party will be deemed to have “Control” of the relevant item of intellectual property only if the other Party agrees to bear the cost of such Third Party Compensation. Notwithstanding anything to the contrary under this Agreement, with respect to any Third Party that becomes an Affiliate of a Party after the Effective Date (including a Third Party acquirer), no intellectual property of such Third Party will be included in the licenses granted hereunder by virtue of such Third Party becoming an Affiliate of such Party.

“Cover,” “Covered” or “Covering” means, with respect to a patent, that the act of making, using or selling by an unauthorized Person would infringe a Valid Claim included in such patent, or in the case of a patent that is a patent application, would infringe a Valid Claim in such patent application if it were to issue as a patent.

“CREATE Act” means the Cooperative Research and Technology Enhancement Act of 2004, 35 U.S.C. § 103(c)(2)-(c)(3).

“Develop,” “Developing” or “Development” means with respect to a Product, any and all discovery, characterization, or preclinical (including IND-Enabling Toxicology Studies), clinical, or regulatory activity with respect to a Product to seek Approval (including the submission of all necessary filings with applicable Regulatory Authorities to support such preclinical and clinical activities and Approval), including human clinical trials conducted after Approval of a Product to seek Approval for additional indications for a Product.

“Development Candidate” means (i) a Brain Shuttle Development Candidate, or (ii) an Isis Development Candidate.

“Development Candidate Data Package” means, with respect to [***] the [***]; provided such package contains the [***]. The checklist Isis uses as of the Effective Date when reviewing potential development candidates for approval is attached hereto as Appendix 4.

“Disclosing Party” has the meaning set forth in Section 11.1.

“Discontinued Product” means a Product that is the subject of a termination under this Agreement.

“Effective Date” has the meaning set forth in the Preamble of this Agreement.

“EMA” means the European Medicines Agency and any successor entity thereto.

“European Union” or “EU” means each and every country or territory that is officially part of the European Union.

“Executives” has the meaning set forth in Section 12.1.1.

“Existing Diagnostic Agreement” means that certain Non-Exclusive G-Clamp License Agreement between Isis and F. Hoffmann-La Roche Ltd dated April 26, 2011.

“FDA” means the United States Food and Drug Administration and any successor entity thereto.

“FDCA” shall mean the United States Food, Drug and Cosmetics Act.

“Field” means the prophylactic or therapeutic use or form of administration of a Product for any indication.

“First Commercial Sale” means the first sale of a Product by Roche, its Affiliate or its Sublicensee to a Third Party in a particular country after Approval of a Product has been obtained in such country.

“FTE” means a total of forty-seven (47) weeks or one thousand eight hundred eighty (1,880) hours per year of work on the Development of a Product carried out by employees of a Party having the appropriate relevant expertise to conduct such activities.

“FTE Rate” means [***]. The FTE Rate will be prorated for the actual portion of the full year the employee works under this Agreement. The FTE Rate will be increased each Calendar Year after 2013 by the [***].

“Full Royalty Period” has the meaning set forth in Section 6.7.2(a).

“Fully Absorbed Cost of Goods” means the costs incurred by Isis as determined using the methodology set forth in Schedule 1.7.1 fairly applied and as employed on a consistent basis throughout Isis’ operations.

“Generic Product” means the product(s) of one or more Third Party that is not a Sublicensee, which has the same active pharmaceutical ingredient as a Product and for which in the U.S. an ANDA has been filed naming such Product as the reference listed drug or outside of the U.S., an equivalent process where bioequivalence to such Product has been asserted.

“Group Sublicensee” means any individual, corporation, association or other business entity:

“HSR Act” means Section 7A of the Clayton Act, as added by Title II of the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules and regulations promulgated thereunder.

“Huntingtin” or “HTT” means the human gene known as IT15 or HD (GenBank accession #NM_002111.5), or any alternative splice variants, mutants, polymorphisms and fragments thereof.

“Huntington’s Disease” or “HD” means the hereditary disorder caused by mutation associated with trinucleotide repeat expansion in the Huntingtin gene on chromosome 4p.

“IDCP” has the meaning set forth in Section 5.1.

“IND” means an Investigational New Drug Application (as defined in the Food, Drug and Cosmetic Act, as amended) filed with the FDA or its foreign counterparts.

“IND-Enabling Toxicology Studies” means the pre-clinical studies required to file an IND.

“Indemnitee” has the meaning set forth in Section 9.3.

“Independent Expert” has the meaning set forth Section 5.1.1.

“Initiation” or “Initiate” means, (i) with respect to any IND-Enabling Toxicology Study, dosing of the first animal subject in such IND-Enabling Toxicology Study, (ii) with respect to any Clinical Study performed by Roche, its Affiliates or Sublicensees, the date the first patient is dosed with a Product in such Clinical Study, and (iii) with respect to any Clinical Study performed by Isis, its Affiliates or Sublicensees (excluding Roche), the date the first clinical trial site is approved by the applicable Reviewing Entity to participate in such Clinical Study.

“Isis” has the meaning set forth in the Preamble of this Agreement.

“Isis Collaboration Know-How” means Know-How discovered, developed, invented or created solely by or on behalf of Isis or its Affiliate or a Third Party acting on their behalf in the performance of an R&D Plan, that is necessary or useful to Develop, Manufacture or Commercialize a Product in the Field.

“Isis Collaboration Patents” means Patent Rights discovered, developed, invented or created solely by or on behalf of Isis or its Affiliate or a Third Party acting on their behalf in the performance of an R&D Plan, that are necessary or useful to Develop, Manufacture or Commercialize a Product in the Field.

“Isis Core Brain Shuttle Collaboration Patent” has the meaning set forth in Section 7.2.2(a)(i).

“Isis Core Technology Patents” means all Patent Rights owned, used, developed by, or licensed to Isis or its Affiliates, in each case to the extent Controlled by Isis or its Affiliates on the Effective Date or at any time during the Agreement Term, claiming subject matter generally applicable to ASOs, other than Isis Product-Specific Patents or Isis Manufacturing and Analytical Patents. A list of Isis Core Technology Patents as of the Effective Date is set forth on Schedule 8.2.4(a) attached hereto.

“Isis Development Candidate” means a Compound that arises out of the Isis Development Candidate-R&D Plan that is reasonably determined by Isis’ RMC in accordance with Isis’ standard procedures for designating development candidates (and giving good faith consideration to the input of Roche’s representatives on the JSC) as ready to start IND-Enabling Toxicology Studies. The checklist Isis uses as of the Effective Date when reviewing potential development candidates for approval is attached hereto as Appendix 4. The first Isis Development Candidate to be designated a Development Candidate hereunder is referred to throughout this Agreement as the “first” Isis Development Candidate. Any work on one or more additional or replacement Isis Development Candidates may be performed under an amended Isis Development Candidate-R&D Plan as contemplated by Section 1.8. 

“Isis Development Candidate-R&D Plan” means the research and development plan attached hereto as Appendix 2 (as may be amended in accordance with this Agreement) to conduct the Isis R&D Activities and Roche R&D Activities designated under such plan focused on the research and development of an Isis Development Candidate.

“Isis Development Candidate Reverse Royalties” has the meaning set forth in Section 6.10.1.

“Isis In-License Agreements” has the meaning set forth in Section 6.11.1(a).

“Isis Internal ASO Safety Database” has the meaning set forth in Section 5.2.2(a).

“Isis Know-How” means any Know-How, including Isis’ interest in any Jointly-Owned Collaboration Know-How, owned, used, developed by, or licensed to Isis or its Affiliates, in each case to the extent Controlled by Isis or its Affiliates on the Effective Date or at any time during the Agreement Term. Isis Know-How does not include the Isis Manufacturing and Analytical Know-How.

“Isis Manufacturing and Analytical Know-How” means Know-How, including Isis’ interest in any Jointly-Owned Collaboration Know-How, that relates to the synthesis or analysis of a Product regardless of sequence or chemical modification, owned, used, developed by, or licensed to Isis or its Affiliates, in each case to the extent Controlled by Isis or its Affiliates on the Effective Date or at any time during the Agreement Term. Isis Manufacturing and Analytical Know-How does not include the Isis Know-How.

“Isis Manufacturing and Analytical Patents” means Patent Rights, including Isis’ interest in any Jointly-Owned Collaboration Patents, that claim methods and materials used in the synthesis or analysis of a Product regardless of sequence or chemical modification, owned, used, developed by, or licensed to Isis or its Affiliates, in each case to the extent Controlled by Isis or its Affiliates on the Effective Date or at any time during the Agreement Term. A list of Isis Manufacturing and Analytical Patents as of the Effective Date is set forth on Schedule 8.2.4(b) attached hereto. Isis Manufacturing and Analytical Patents do not include the Isis Product-Specific Patents or the Isis Core Technology Patents.

“Isis Product-Specific Brain Shuttle Collaboration Patent” has the meaning set forth in Section 7.2.2(a)(ii).

“Isis Product-Specific Patents” means Patent Rights Controlled by Isis or any of its Affiliates on or after the Effective Date claiming (i) the specific composition of matter of an Isis Development Candidate; (ii) methods of using an Isis Development Candidate as a prophylactic or therapeutic; or (iii) the specific mechanism of action of an Isis Development Candidate, in each case to the extent necessary to Develop, Manufacture or Commercialize an Isis Development Candidate; provided however, Patent Rights Controlled by Isis or any of its Affiliates that (y) include claims that are directed to subject matter applicable to ASOs in general, or (z) include an ASO, the sequence of which targets both (a) the RNA that encodes HTT and (b) ASOs that do not target the RNA encoding HTT, will not be considered Isis Product-Specific Patents, and in the case of (y) and (z), such Patent Rights will be considered Isis Core Technology Patents. A list of Isis Product-Specific Patents as of the Effective Date is set forth on Schedule 8.2.4(c) attached hereto.

“Isis R&D Activities” means the research, pre-clinical and/or clinical activities for which Isis is designated as responsible under an R&D Plan.

“Isis Supported Pass-Through Costs” means the licensing costs and payments payable by Isis to Third Parties to the extent arising from a Third Party agreement under [***].

“Japan NDA” or “JNDA” means the Japanese equivalent of an NDA filed with the Koseisho (i.e., the Japanese Ministry of Health and Welfare, or any successor agency thereto).

“JNDA Approval” means the Approval of a JNDA by the Koseisho (i.e., the Japanese Ministry of Health and Welfare, or any successor agency thereto) for the applicable Product in Japan.

“Joint Patent Committee” or “JPC” has the meaning set forth in Section 7.1.3(a).

“Jointly-Owned Collaboration Know-How” means Know-How discovered, developed, invented or created jointly in the performance of an R&D Plan by or on behalf of both Parties or their respective Affiliates or Third Parties acting on their behalf that is necessary or useful to Develop, Manufacture or Commercialize a Product in the Field.

“Jointly-Owned Collaboration Patents” means any Patent Rights discovered, developed, invented or created jointly in the performance of an R&D Plan by or on behalf of both Parties or their respective Affiliates or Third Parties acting on their behalf that is necessary or useful to Develop, Manufacture or Commercialize a Product in the Field.

“Jointly-Owned Collaboration Technology” means Jointly-Owned Collaboration Know-How and Jointly-Owned Collaboration Patents.

“JSC” has the meaning set forth in Section 1.5.1.

“Know-How” means unpatented inventions, technical information, know-how and materials, including technology, data, compositions, formulas, biological materials, assays, reagents, constructs, compounds, discoveries, procedures, processes, practices, protocols, methods, techniques, results of experimentation or testing, knowledge, trade secrets, skill and experience.

“Lead Party” has the meaning set forth in Section 7.4.1.

“Licensed CMO” has the meaning set forth in Section 4.1.4(a)(ii).

“Licensed Know-How” means Isis Manufacturing and Analytical Know-How, Isis Know-How, Isis Collaboration Know-How, and Isis’ interest in any Jointly-Owned Collaboration Know-How. For clarity, Licensed Know-How does not include any Know-How covering formulation technology or delivery devices unless such Know-How is included in any Isis Collaboration Know-How or Jointly-Owned Collaboration Know-How.

“Licensed Patents” means the Isis Product-Specific Patents, Isis Core Technology Patents, Isis Manufacturing and Analytical Patents, Isis Collaboration Patents, and Isis’ interest in any Jointly-Owned Collaboration Patents and Brain Shuttle Collaboration Patents. For clarity, Licensed Patents do not include any Patent Rights claiming formulation technology or delivery devices unless such Patent Rights are included in any Isis Collaboration Patents or Jointly-Owned Collaboration Patents.

“Licensed Technology” means any and all Licensed Patents and Licensed Know-How, in each case to the extent necessary or useful to Develop, Manufacture or Commercialize a Product. “Licensed Technology” expressly excludes all technology licensed to Isis under the UTSW Agreement because such technology is not utilized by, nor does it cover, the Compounds.

“Linker-Specific Collaboration Patents” has the meaning set forth in Section 7.1.3(a).

“Losses” has the meaning set forth in Section 9.1.

“MAA” means a marketing authorization application filed with the EMA after completion of Clinical Studies to obtain Approval for a Product under the centralized European filing procedure or, if the centralized EMA filing procedure is not used, filed using the applicable procedures in any European Union country.

“MAA Approval” means the Approval of an MAA by the EMA for a Product in any country in the EU.

“Major Market” means any of the following countries: the United States, Japan, the United Kingdom, Germany, France, Italy, Spain, Brazil, Russia, India and China.

“Manufacture” or “Manufactured” or “Manufacturing” means any activity involved in or relating to the manufacturing, quality control testing (including in-process, release and stability testing), releasing or packaging, for pre-clinical and clinical purposes, of API or a Product in finished form.

“Milestone Event” means a Pre-Licensing Milestone Event or a Post-Licensing Milestone Event, as the case may be.

“Minimum Third Party Payments” means [***].

“NAS Development Candidate” has the meaning set forth in Section 2.1.1(b)(i).

“NDA” means a New Drug Application filed with the FDA after completion of Clinical Studies to obtain Approval for a Product in the United States.

“NDA Approval” means the Approval of an NDA by the FDA for a Product in the U.S.

“Net Sales” of a Product in a particular period will mean the amount calculated by subtracting from the Sales of such Product for such period: (A) a lump sum deduction of four percent (4%) of Sales under item (i) of the “Sales” definition in lieu of those deductions that are not accounted for on a Product-by-Product basis (e.g., freight, postage charges, transportation insurance, packing materials for dispatch of goods, custom duties); (B) uncollectible amounts accrued during such period based on a proportional allocation of the total bad debts accrued during such period; (C) credit card charges (including processing fees) accrued during such period on such Sales; and (D) government mandated fees and taxes and other government charges accrued during such period for such Product including, for example, any fees, taxes or other charges that become due in connection with any healthcare reform, change in government pricing or discounting schemes, or other action of a government or regulatory body; provided that the foregoing deductions under (A) to (D) were not already taken as a gross-to-net deduction in accordance with the then currently used International Financial Reporting Standards (IFRS) in the calculation of Sales of such Product for such period.

“New Third Party Licenses” has the meaning set forth in Section 8.3.2.

“Non-Breaching Party” means the Party that believes the Breaching Party is in material breach of this Agreement.

[***]

“Omnibus Collaboration Patents” has the meaning set forth in Section 7.1.3(a).

“Option” has the meaning set forth in Section 3.1.

“Option Deadline” has the meaning set forth in Section 3.1.

“Option Period” has the meaning set forth in Section 1.1.

“Party” or “Parties” means Roche and Isis individually or collectively.

“Patent Costs” means the reasonable fees and expenses paid to outside legal counsel, and filing, maintenance and other reasonable out-of-pocket expenses paid to Third Parties, incurred in connection with the Prosecution and Maintenance of Patent Rights.

“Patent Rights” means (a) patents, patent applications and similar government-issued rights protecting inventions in any country or jurisdiction however denominated, (b) all priority applications, divisionals, continuations, substitutions, continuations-in-part of and similar applications claiming priority to any of the foregoing, and (c) all patents and similar government-issued rights protecting inventions issuing on any of the foregoing applications, together with all registrations, reissues, renewals, re-examinations, confirmations, supplementary protection certificates, and extensions of any of (a), (b) or (c).

“Permitted Licenses” means (1) licenses granted by Isis before or after the Effective Date to any Third Party under the Isis Core Technology Patents, the Isis Manufacturing and Analytical Patents, or the Isis Manufacturing and Analytical Know-How (but not under the Isis Product-Specific Patents) to (a) use oligonucleotides (or supply oligonucleotides to end users) solely to conduct pre-clinical research, or (b) enable such Third Party to manufacture or formulate oligonucleotides, where Isis does not assist such Third Party to identify, discover or make a Compound or Product; and (2) material transfer agreements with academic collaborators or non-profit institutions solely to conduct noncommercial research. A list of relevant Permitted Licenses as of the Effective Date is set forth on Appendix 7 attached hereto.

“Person” will mean any corporation, limited or general partnership, limited liability company, joint venture, trust, unincorporated association, governmental body, authority, bureau or agency, any other entity or body, or an individual.

“Phase 1 Trial” means the initial clinical testing of a Product in humans (first-in-humans study) in any country that is designed to satisfy the requirements of 21 C.F.R. § 312.21(a) FDCA, as amended from time to time, or a foreign equivalent thereof.

“Phase 1 Trial Data Package” means the listing and tables of safety data (and early efficacy data if applicable) available to the Party conducting such Phase 1 Trial after the last patient receives his/her last dose of a Product in such Phase 1 Trial.

“Phase 2 Trial” means a human clinical study that is intended to explore a variety of dose and dose response to generate initial evidence of clinical safety and activity in a target patient population for which the primary endpoints include a determination of dose ranges and/or a preliminary determination of efficacy in patients being studied as described in 21 C.F.R. § 312.21(b) FDCA, as amended from time to time, or a foreign equivalent thereof.

“Phase 2 Trial Data Package” means, with respect to a given Phase 2 Trial, the listing and tables of safety and efficacy data available to Roche after the last patient has received his/her last dose of a Product in such Phase 2 Trial.

“Phase 4 Trial” means (i) any Clinical Study conducted to satisfy a requirement of a Regulatory Authority in order to maintain Approval, or (ii) any Clinical Study conducted after the first Approval in the same disease state for which a Product received Approval other than for purposes of obtaining Approval.

“Post-Licensing Milestone Event” has the meaning set forth in Section 6.4.

“Pre-Clinical Studies” means in vitro and in vivo studies of a Product, not in humans, including those studies conducted in whole animals and other test systems, designed to determine the toxicity, bioavailability, and pharmacokinetics of a Product and whether a Product has a desired effect.

“Pre-Licensing Milestone Event” has the meaning set forth in Section 6.2.

“Prior Agreements” means the agreements listed on Schedule 8.2.7 attached hereto.

“Proceeding” means an action, suit or proceeding.

“Product” means a finished drug product containing as an active pharmaceutical ingredient (i) an Isis Development Candidate, or (ii) a Brain Shuttle Development Candidate.

“Prosecution and Maintenance” or “Prosecute and Maintain” means, with regard to a Patent Right, the preparing, filing, prosecuting and maintenance of such Patent Right, as well as handling re-examinations, reissues, and requests for patent term extensions with respect to such Patent Right, together with the conduct of interferences, the defense of oppositions and other similar proceedings with respect to the particular Patent Right. For clarification, “Prosecution and Maintenance” or “Prosecute and Maintain” will not include any other enforcement actions taken with respect to a Patent Right.

“R&D Plan” means either (i) the Isis Development Candidate-R&D Plan, or (ii) the Brain Shuttle Development Candidate-R&D Plan.

“Receiving Party” has the meaning set forth in Section 11.1.

“Reduced Royalty Period” has the meaning set forth in Section 6.7.2(d).

“Reference Rate” has the meaning set forth in Section 6.7.2(b).

“Registration-Directed Trial” means a pivotal Clinical Study (whether or not called a “Phase 3” Clinical Study) [***] intended to establish that a Product is safe and effective for its intended use; and is intended to support NDA filing (or foreign equivalent filing) of such Product in patients having the disease or condition being studied, as described in 21 C.F.R. § 312.21(c) FDCA, as amended from time to time, or a foreign equivalent thereof.

“Registration-Directed Trial Data Package” means, with respect to a given Registration-Directed Trial, the listing and tables of safety and efficacy data available [***].

“Regulatory Authority” means any governmental authority, including the FDA, EMA or Koseisho (i.e., the Japanese Ministry of Health and Welfare, or any successor agency thereto), that has responsibility for granting any licenses or approvals or granting pricing or reimbursement approvals necessary for the marketing and sale of a Product in any country.

“Reviewing Entity” means an institutional review board (IRB), research ethics board (REB), European ethical committee (EEC), or equivalent appropriate governmental ethical reviewing entity responsible for approving an entity to participate in a Clinical Study as a clinical site.

“RMC” means Isis’ Research Management Committee, or any successor committee.

“Roche” has the meaning set forth in the Preamble of this Agreement.

“Roche Collaboration Know-How” means Know-How discovered, developed, invented or created solely by or on behalf of Roche or its Affiliate or a Third Party acting on their behalf in the performance of an R&D Plan, that is necessary or useful to Develop, Manufacture or Commercialize a Product in the Field.

“Roche Collaboration Patents” means Patent Rights discovered, developed, invented or created solely by or on behalf of Roche or its Affiliate or a Third Party acting on their behalf in the performance of an R&D Plan, that are necessary or useful to Develop, Manufacture or Commercialize a Product in the Field.

“Roche Collaboration Technology” means Roche Collaboration Know-How, Roche Collaboration Patents and Roche’s interest in any Jointly-Owned Collaboration Technology and Brain Shuttle Collaboration Patents.

“Roche Existing Brain Shuttle Patents” has the meaning set forth in Section 8.4.1. A list of Roche Existing Brain Shuttle Patents as of the Effective Date is set forth on Schedule 8.4.1 attached hereto.

“Roche Full Royalty” has the meaning set forth in Section 6.7.1.

“Roche Know-How” means any Know-How that (i) did not arise in connection with the performance of an R&D Plan, (ii) is owned, used, developed by, or licensed to Roche or its Affiliates, and (iii) is necessary or useful to Develop, Manufacture or Commercialize a Product in the Field, in each case to the extent Controlled by Roche or its Affiliates on the Effective Date or at any time during the Agreement Term.

“Roche Patents” means any Patent Rights that (i) did not arise in connection with the performance of an R&D Plan, (ii) are owned, used, developed by, or licensed to Roche or its Affiliates, and (iii) are necessary or useful to Develop, Manufacture or Commercialize a Product in the Field, in each case to the extent Controlled by Roche or its Affiliates on the Effective Date or at any time during the Agreement Term.

“Roche-Prosecuted Patents” has the meaning set forth in Section 7.2.4.

“Roche Reduced Royalty” has the meaning set forth in Section 6.7.2(b).

“Roche R&D Activities” means the research, pre-clinical and/or clinical activities for which Roche is designated as responsible under an R&D Plan.

“Roche Supported Pass-Through Costs” means the [***].

“Roche-Selected Brain Shuttle Development Candidate” means that as between a given Isis Development Candidate and a given Brain Shuttle Development Candidate, in accordance with Section 5.1.1, the Independent Expert did not recommend that such Brain Shuttle Development Candidate be progressed into Phase 2 Trials.

“Roche Technology” means Roche’s interest in Roche Collaboration Technology, Roche Know-How, Roche Patents and any trademarks described in Section 4.1.7, owned, used, developed by, or licensed to Roche or its Affiliates that is necessary or useful to Develop, Manufacture or Commercialize a Product.

“Royalty Quotient” has the meaning set forth in Section 6.7.2(b).

“Sales” of a Product in a particular period will mean the sum of (i) and (ii):

(i) the amount stated in Roche sales line of its externally published audited financial statements with respect to such Product for such period (excluding sales to any Sublicensee that are used for research or Development or re-sold by such Sublicensee as sales under item (ii) below). This amount reflects the gross invoice price at which such Product was sold or otherwise disposed of (other than for use as clinical supplies or free samples) by Roche/Genentech, its Affiliates and Group Sublicensees to Third Parties (excluding sales to any Sublicensee that are used for research or Development or re-sold by such Sublicensee as sales under item (ii) below) in such period reduced by gross-to-net deductions, if not previously deducted from such invoiced amount, taken in accordance with the then currently used International Financial Reporting Standards (IFRS).

By way of example, the gross-to-net deductions taken in accordance with International Financial Reporting Standards (IFRS) as of the Effective Date include the following:

For the purpose of clarity, sales by Roche/Genentech and its Affiliates to any Sublicensee and/or Group Sublicensee that are used for research or Development or re-sold by such Sublicensee or Group Sublicensee as sales under item (ii) below will be excluded from “Sales” calculated under this item (i).

(ii) Sublicensee (excluding Compulsory Sublicensee) sales amounts reported to Roche and its Affiliates in accordance with Sublicensee contractual terms and their then currently used accounting standards. For the purpose of clarity, any Sublicensee sales as reported to Roche in accordance with Compulsory Sublicense agreements will be excluded from the Sales amount.

“SNP” means single nucleotide polymorphism.

“Specific Performance Milestone Event” has the meaning set forth in the definition of “Commercially Reasonable Efforts.”

“Step-In Party” has the meaning set forth in Section 7.4.1.

“Sublicensee” means a Third Party to whom a Party or its Affiliates or Sublicensees has granted a sublicense or license under any Licensed Technology or Roche Technology, as the case may be, licensed to such Party in accordance with the terms of this Agreement.

“Third Party” means a Person or entity other than the Parties or their respective Affiliates.

“Third Party Obligations” means any financial and non-financial encumbrances, obligations, restrictions, or limitations imposed by an agreement between Isis and a Third Party (including the Isis In-License Agreements) that relate to a Product, HTT, including field or territory restrictions, covenants, milestone payments, diligence obligations, sublicense revenue, royalties, or other payments.

“United States” or “U.S.” means the fifty states of the United States of America and all of its territories and possessions and the District of Columbia.

“UTSW Agreement” means that certain Exclusive Patent License Agreement between Isis and the University of Texas Southwestern Medical Center at Dallas dated June 24, 2010.

“Valid Claim” means a claim (i) of any issued, unexpired United States or foreign Patent Right, which will not, in the country of issuance, have been donated to the public, disclaimed, nor held invalid or unenforceable by a court of competent jurisdiction in an unappealed or unappealable decision, or (ii) of any United States or foreign patent application within a Patent Right, which will not, in the country in question, have been cancelled, withdrawn, abandoned nor been pending for more than seven (7) years, not including in calculating such seven-year period of time in which such application is in interference or opposition or similar proceedings or time in which a decision of an examiner is being appealed. Notwithstanding the foregoing, on a country-by-country basis, a patent application pending for more than seven years will not be considered to have any Valid Claim for purposes of this Agreement unless and until a patent meeting the criteria set forth in clause (i) above with respect to such application issues.