Question
From: (redacted)
Sent: Sunday, July 17, 2005 12:00 PM
To: Verne, B. Michael
Subject: AssetAcquisition/License
Mike,
Sorry that wemissed each other on Thursday. I would like to get PNO guidance as to whether the following proposed transaction wouldbe considered an asset acquisition for HSR purposes.(Since I will be out of the office the first part of this coming week, Ithought it would make sense to summarize the question in an email.)
In the proposeddeal, Licensor will grant to Licensee what is described as an "exclusive,global license for the co-development and co-commercialization" of apharmaceutical product. As that phrase implies, Licensor will be retaining aninterest and role in the Product. The parties will split the costs ofdeveloping the Product, and it is envisioned that Licensor will manufacture theProduct (though I assume the license may be broad enough to permit Licensee tomanufacture as well). Specifically, the proposal provides that:
In US (and Canada)
Licensee will fundall sales and marketing and provide the required expert resources for thesuccessful commercialization of Product.
Licensee will leadthe commercialization of Product, with Licensor having full engagement in thestrategy and planning process.
Licensor will havethe option to co-promote the product alongside Licensee to certain specialists.
Licensee will recordsales and reimburse Licensor, at agreed rates, for its direct promotionalexpenses
Licensee will payLicensor a royalty of ___% on net sales in this territory.
All OtherMarkets excluding US (and Canada)
Licensor will leadand fund all sales and marketing, and provide the required expert resources forthe successful commercialization of Product
Licensor will leadthe commercialization Product, with Licensee having full engagement in thestrategy setting and planning process.
Licensee willco-promote the product alongside Licensor throughout this territory and in allsectors.
Licensor will recordsales and reimburse Licensee, at agreed rates, for its direct promotionalexpenses
Licensor will payLicensee a royalty of ___% on net sales in this territory
Based on pastconversations, my sense is that Licensor is retaining enough of an interest(co-promotion, manufacturing, commercialization outside US) that this would notbe considered an asset acquisition for HSR purposes.As noted, however, the parties would like to get the PNO's guidance on that question.
Thanks inadvance for your consideration of the question.