Exhibit 10.1

***Text Omitted and Filed Separately

with the Securities and Exchange Commission.

Confidential Treatment Requested

Under 17 C.F.R. Sections 200.80(b)(4)

and 240.24b-2.

CONFIDENTIAL

Execution Copy

COLLABORATION AND LICENSE AGREEMENT

This C OLLABORATION AND L ICENSE A GREEMENT (“ Agreement ”) is entered into as of May 1, 2009 (the “ Effective Date ”) between ACADIA P HARMACEUTICALS I NC . , a company organized under the laws of the State of Delaware, United States (“ ACADIA ”), and having a principal place of business at 3911 Sorrento Valley Boulevard, San Diego, California, United States, and B IOVAIL L ABORATORIES I NTERNATIONAL SRL , a Barbados society with restricted liability (“ BLS ”), having its registered office at Welches, Christ Church, Barbados WI, BB17154.

WHEREAS

A. ACADIA is developing Pimavanserin (as defined hereinafter), a selective 5-HT _2A inverse agonist, for the treatment of Parkinson’s disease psychosis, and other indications, including Alzheimer’s disease psychosis. ACADIA owns or controls certain patents, know-how and other intellectual property relating to Pimavanserin and Product (as defined hereinafter); and

B. BLS desires to obtain from ACADIA certain exclusive rights and licenses to make, have made, use, sell, offer for sale and import Pimavanserin and Product in the Field (as defined hereinafter) in the United States and Canada and a license to conduct development and manufacturing activities in the Field outside the Territory solely for developing and commercializing Product in the Field in the United States and Canada, and ACADIA is willing to grant to BLS such rights and licenses on the terms and conditions set forth in this Agreement; and

C. BLS intends to appoint one or more Distributor(s) (as defined hereinafter) to distribute Product in the United States; and

D. ACADIA desires to obtain an option to co-promote Product with BLS’ Distributor or Sublicensee in the United States and BLS agrees to grant such an option, in accordance with the terms and conditions of this Agreement.

NOW, THEREFORE , in consideration of the foregoing premises and the mutual covenants herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, ACADIA and BLS hereby agree as follows:

ARTICLE 1

DEFINITIONS

As used in this Agreement, the following terms shall have the meanings set out in this Article 1 unless the context clearly and unambiguously dictates otherwise.

1.1 “ ACADIA Affiliate ” shall mean any Person that is an Affiliate of ACADIA; provided that , effective upon a Change of Control of ACADIA, the term “ACADIA Affiliate” shall mean only any Person that is, directly or indirectly, through one or more intermediaries, controlled (as such term is defined in Section 1.12) by ACADIA, but for only so long as such control exists.

CONFIDENTIAL

 

1.2 “ ACADIA […***…] Patents ” shall mean all Patents […***…], which Patents are Controlled by ACADIA or any ACADIA Affiliate […***…]. For the avoidance of doubt, ACADIA […***…] Patents shall not include any Joint Patents or Licensed Patents.

1.3 “ ACADIA Indemnitees ” shall have the meaning set forth in Section 11.1.

1.4 “ ACADIA Know-How ” shall mean all Know-How that […***…], which Know-How is Controlled by ACADIA or any ACADIA Affiliate […***…]. For clarification, ACADIA Know-How does not include any proprietary cell-based screening technology of ACADIA such as its receptor selection and amplification technology (R-SAT®) and bioluminescence resonance energy transfer technology (BRET). For the avoidance of doubt, ACADIA Know-How shall not include any Joint Know-How.

1.5 “ ACADIA Patents ” shall mean all Patents that […***…], which Patents are Controlled by ACADIA or any ACADIA Affiliate […***…]. For the avoidance of doubt, ACADIA Patents shall not include any Joint Patents or Licensed Patents. A list of ACADIA Patents as of the Effective Date has been delivered by ACADIA to BLS under separate cover […***…].

1.6 “ ACADIA Studies ” shall mean the two Phase III Clinical Trials (ACP-103-012 and ACP-103-014), the two open label safety extension studies (ACP-103-010 and ACP-103-015) and the preclinical studies for the treatment of PDP, each of which is in progress as of the Effective Date, as described in the PDP Development Plan.

1.7 “ ACADIA Technology ” shall mean all ACADIA Know-How, ACADIA Patents, Licensed Patents and ACADIA’s interest in Joint Patents and Joint Inventions.

1.8 “ Additional Pre-NDA PDP Studies ” shall have the meaning set forth in Section 4.4(b).

1.9 “ Additional Post-NDA PDP Studies ” shall have the meaning set forth in Section 4.4(c).

1.10 “ ADP ” shall mean psychosis in Alzheimer’s disease patients.

 

CONFIDENTIAL

 

1.11 “ ADP Development Plan ” shall mean the plan for development of Product for the prevention or treatment of ADP in the United States as agreed to by the Parties, as may be adopted and amended in accordance with Section 4.1.

1.12 “ Affiliate ” of a Party shall mean any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with such Party, as the case may be, but for only so long as such control exists. As used in this Section 1.12, “control” shall mean (i) direct or indirect beneficial ownership of at least 50% (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of the voting share capital or other equity interest in such Person or (ii) the power to direct the management of such Person by contract or otherwise.

1.13 “ Applicable Laws ” shall mean the applicable provisions of any and all national, supranational, regional, state and local laws, treaties, statutes, rules, regulations, administrative codes, guidance, ordinances, judgments, decrees, directives, injunctions, orders, permits (including Marketing Approvals) of or from any court, arbitrator, Regulatory Authority or governmental agency or authority having jurisdiction over or related to the subject item.

1.14 “ Auditor ” shall have the meaning set forth in Section 7.5.

1.15 “ Bankruptcy Laws ” shall have the meaning set forth in Section 13.7.

1.16 […***…].

1.17 “ BLS Indemnitees ” shall have the meaning set forth in Section 11.2.

1.18 “ BLS Know-How ” shall mean all Know-How that […***…], which Know-How is Controlled by BLS or any of its Affiliates (other than those that become its Affiliates as a result of a Change of Control of BLS) […***…]. For the avoidance of doubt, BLS Know-How shall not include any Joint Know-How.

1.19 “ BLS Patents ” shall mean all Patents that […***…], which Patents are Controlled by BLS or any of its Affiliates (other than those that become its Affiliates as a result of a Change of Control of BLS) […***…]. For the avoidance of doubt, BLS Patents shall not include any Joint Patents.

1.20 “BLS Technology ” shall mean all BLS Know-How, BLS Patents, and BLS’s interest in Joint Patents and Joint Inventions.

1.21 “ Budget ” shall mean (a) the studies budget included within the applicable Development Plan for conducting the applicable clinical or non-clinical studies or other activities under such Development Plan and/or (b) the regulatory budget within the applicable Development Plan for conducting regulatory activities with respect to Product in the Field in the United States under such Development Plan, as applicable.

 

CONFIDENTIAL

 

1.22 “ Business Day ” shall mean a day other than a Saturday or Sunday or any public holiday in the United States, Barbados or Canada. For the avoidance of doubt, references in this Agreement to “days” shall mean calendar days.

1.23 “ Calendar Quarter ” shall mean a period of 3 consecutive months during a Calendar Year beginning on and including January 1 ^st , April 1 ^st , July 1 ^st or October 1 ^st .

1.24 “ Calendar Year ” shall mean a period of 12 consecutive months beginning on and including January 1 ^st .

1.25 “ Chairman ” shall mean the chairman of the Development Committee.

1.26 “ Change of Control ” shall mean […***…].

1.27 “ CMC ” shall mean chemistry, manufacturing and controls.

1.28 “ Combination Product ” shall mean a Product which comprises 2 or more active pharmaceutical ingredients at least one of which is Pimavanserin.

1.29 “ Commercially Reasonable Efforts ” shall mean that level of efforts and resources, with respect to a particular Party, at the relevant point in time, that is consistent with the usual practice followed by that Party in the exercise of its reasonable scientific and business judgment relating to other prescription pharmaceutical products owned or licensed by it or to which it has exclusive rights, which have market potential and are at a stage of development or product life similar to the applicable Product, taking into account measures of patent coverage, relative safety and efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the compound or product, the regulatory structure involved, the relative profitability of the products (including, without limitation, pricing and reimbursement status) and other relevant factors, including without limitation comparative technical, legal, scientific, and/or medical factors.

1.30 “ Commercial Strategy ” shall have the meaning set forth in Section 5.1(a).

1.31 […***…].

1.32 “ Contractors ” shall have the meaning set forth in Section 10.2(j)(i).

 

CONFIDENTIAL

 

1.33 “ Confidential Information ” shall have the meaning set forth in Section 8.1.

1.34 “ Confidentiality Agreement ” shall mean that certain letter agreement dated August 28, 2008 between ACADIA and BLS.

1.35 “ Control ” (including any variations such as “ Controlled ” and “ Controlling ”), in the context of intellectual property rights, Know-How and Confidential Information, shall mean possession (whether by ownership or license, other than pursuant to this Agreement) by a Party of the ability to grant the applicable license under this Agreement, without violating the terms of an agreement with a Third Party.

1.36 “ Co-Promotion Option ” shall have the meaning set forth in Section 5.2.

1.37 “ Costs and Expenses ” shall mean costs and expenses paid to Third Parties (or payable to Third Parties and accrued in accordance with GAAP), other than Affiliates or employees, by either Party.

1.38 “ Development Committee ” shall have the meaning set forth in Section 3.1(a).

1.39 “ Development Expenses ” shall mean Costs and Expenses incurred by a Party or any of its Affiliates in conducting studies and activities in accordance with the applicable Development Plan.

1.40 “ Development Plan ” shall mean the PDP Development Plan or ADP Development Plan or, as applicable, Third Indication Development Plan, and “ Development Plans ” shall mean the PDP Development Plan and the ADP Development Plan and, as applicable, Third Indication Development Plan, collectively.

1.41 “ Development Term ” shall mean the period during which the Parties are conducting studies and activities with respect to Product in the Field for the United States under a Development Plan, commencing on the Effective Date and ending upon the completion of all studies and activities specified in the Development Plans or earlier termination of this Agreement.

1.42 “ Dispute ” shall have the meaning set forth in Section 12.6(a).

1.43 “ Disclosing Party ” shall have the meaning set forth in Section 8.1.

1.44 “ Distribution Agreement ” shall mean an agreement or arrangement between BLS or an Affiliate of BLS and a Distributor with respect to the right of such Distributor to market, promote, advertise, detail, sell and distribute Product in the Territory.

1.45 “ Distributor ” shall mean a Third Party or an Affiliate of BLS to whom BLS or an Affiliate of BLS has granted the right to market, promote, advertise, detail, sell and distribute Product in the Territory.

 

CONFIDENTIAL

 

1.46 “ Effective Date ” shall have the meaning set forth in the opening paragraph of this Agreement.

1.47 “ Escalation Notice ” shall have the meaning set forth in Section 3.4(b).

1.48 “ Excluded Claim ” shall have the meaning set forth in Section 12.6(i).

1.49 “ Expenses ” shall mean the Development Expenses and/or the Regulatory Expenses, as applicable.

1.50 “ FDA ” shall mean the United States Food and Drug Administration or its successor.

1.51 “ Field ” shall mean the prevention or treatment of any psychiatric and neurological Indication and the symptoms associated with these Indications, including but not limited to PDP and ADP.

1.52 “ Filing ” of an NDA shall be deemed to occur on the date of receipt of written notice of acceptance from the FDA in the United States, or other relevant Regulatory Authority outside of the United States, of such NDA for substantive review.

1.53 “ First Commercial Sale ” shall mean, on a country-by-country basis and Product-by-Product basis, the first bona fide , arm’s length sale of a Product in a country following receipt of Marketing Approval of such Product in such country for use or consumption by the general public of such Product in such country. Sales of a Product for registration samples, compassionate use sales, named patient use, inter-company transfers to Affiliates of a Party and the like shall not constitute a First Commercial Sale.

1.54 “ GAAP ” shall mean generally accepted accounting principles in the United States, or internationally, as appropriate, consistently applied and shall mean the international financial reporting standards (“ IFRS ”) at such time as IFRS becomes the generally accepted accounting standard and applicable laws require that a Party use IFRS.

1.55 “ Good Clinical Practices ” or “ GCP ” shall mean the then-current standards, practices and procedures promulgated or endorsed by the FDA as set forth in the guidelines entitled “Guidance for Industry E6 Good Clinical Practice: Consolidated Guidance,” including related regulatory requirements imposed by the FDA and comparable regulatory standards, practices and procedures in jurisdictions outside the United States, as they may be updated from time to time.

1.56 “ Good Laboratory Practices ” or “ GLP ” shall mean the then-current good laboratory practice standards promulgated or endorsed by the FDA as defined in 21 C.F.R. Part 58, and comparable regulatory standards in jurisdictions outside the United States, as they may be updated from time to time.

1.57 “ Good Manufacturing Practices ” or “ GMP ” shall mean the then-current good manufacturing practices required by the FDA, as set forth in the United States Federal Food, Drug and Cosmetic Act, as amended, and the regulations promulgated

 

CONFIDENTIAL

 

thereunder, for the manufacture and testing of pharmaceutical materials, and comparable laws or regulations applicable to the manufacture and testing of pharmaceutical materials in jurisdictions outside the United States, as they may be updated from time to time. Good Manufacturing Practices shall include applicable quality guidelines promulgated under the ICH.

1.58 “ Health Canada ” shall mean Health Canada or its successor.

1.59 “ ICC ” shall have the meaning set forth in Section 12.6(a).

1.60 “ ICC Rules ” shall have the meaning set forth in Section 12.6(a).

1.61 “ ICH ” shall mean the International Conference on Harmonization (of Technical Requirements for Registration of Pharmaceuticals for Human Use).

1.62 “ IND ” shall mean an Investigational New Drug Application (including any amendments thereto) filed with the FDA pursuant to 21 C.F.R. §312 before commencement of clinical trials of a pharmaceutical product, or any comparable filings with Health Canada in Canada, including clinical trial applications.

1.63 “ Indemnitee ” shall have the meaning set forth in Section 11.3.

1.64 “ Indemnitor ” shall have the meaning set forth in Section 11.3.

1.65 “ Indication ” shall mean any disease or pathological condition […***…].

1.66 “ Intervening Event ” shall have the meaning set forth in Section 15.1.

1.67 “ Inventions ” shall mean any and all inventions, discoveries, improvements, processes and techniques discovered, conceived or reduced to practice in the course of or as a result of activities under this Agreement, whether or not patentable or included in any claim of patents and patent applications.

1.68 “ Joint Inventions ” shall mean any and all Inventions discovered, conceived or reduced to practice by one or more employees or agents of BLS and/or any of its Affiliates and one or more employees, contractors or agents of ACADIA and/or any ACADIA Affiliate.

1.69 “ Joint Know-How ” shall mean any Joint Invention that is not a Joint Patent.

1.70 “ Joint Patents ” shall mean all Patents claiming any Joint Invention.

1.71 “ Know-How ” shall mean all tangible and intangible scientific, technical, trade, financial or business information and materials, including: (a) cells, cell lines, organisms, animal models, genes, gene fragments, gene sequences and loci, probes, DNA, RNA, cDNA libraries, plasmids, vectors, expression systems, antibodies, proteins, and biological substances, and any constituents, progeny, mutants, derivatives or replications thereof or therefrom; and (b) compounds, solid state forms, compositions of matter,

 

CONFIDENTIAL

 

formulations, techniques, processes, methods, trade secrets, formulae, procedures, tests, data, results, analyses, documentation, reports, information (including pharmacological, toxicological, non-clinical (including chemistry, manufacturing and control)), and clinical test design, methods, protocols, data, results, analyses, and conclusions, quality assurance and quality control information, regulatory documentation, information and submissions pertaining to, or made in association with, filings with any Regulatory Authority, product life cycle management strategies, knowledge, know-how, skill, and experience.

1.72 “ License Agreement ” shall mean […***…].

1.73 “ Licensed Patents ” shall mean all Patents that are […***…], which are Controlled by ACADIA pursuant to the License Agreement. A list of Licensed Patents as of the Effective Date has been delivered by ACADIA to BLS under separate cover, and such list shall be updated from time to time by written agreement between the Parties.

1.74 “ Losses ” shall have the meaning set forth in Section 11.1.

1.75 “ Marketing Approval ” of a Product shall mean all approvals, licenses, registrations or authorizations of Regulatory Authorities in a country necessary for the manufacture, use, storage, import, export, distribution, promotion, marketing, offer for sale and sale of such Product in such country. For countries where governmental approval is required for pricing and/or reimbursement for the Product to be reimbursed by national health insurance (or its local equivalent), “Marketing Approval” shall not be deemed to occur until such pricing and/or reimbursement approval is obtained.

1.76 “ Materials ” shall have the meaning set forth in Section 4.11.

1.77 “ Most Recent Milestone ” shall have the meaning set forth in Section 6.2.

1.78 “ NDA ” of a Product shall mean a New Drug Application as defined in Title 21 of the U.S. Code of Federal Regulations, Section 314.80, et seq., and all amendments and supplements thereto, which is filed with the FDA, or the equivalent application filed with Health Canada in Canada, including all documents, data, and other information concerning such Product thus filed that are necessary for gaining Marketing Approval for such Product.

1.79 “ Net Sales ” shall mean […***…].

 

CONFIDENTIAL

 

In no event shall any particular amount, identified above, be deducted more than once in calculating Net Sales (i.e., no “double counting” of reductions). Sales of Product between BLS and its Affiliates, Distributors or Sublicensees for resale shall be excluded from the computation of Net Sales, but the subsequent resale of such Product to a Third Party shall be included within the computation of Net Sales. Notwithstanding anything to the contrary herein, sale, disposal or use of Product for marketing, regulatory, development or charitable purposes, such as clinical trials, preclinical trials, compassionate use, named patient use, or indigent patient programs, without consideration, shall not be deemed a sale hereunder.

In the event that a Product is sold in the form of a Combination Product, Net Sales of the Combination Product shall be determined by multiplying actual Net Sales of the Combination Product (determined by reference to the definition of Net Sales set forth above) during the Calendar Quarter period by the fraction A/(A+B) where A is the average sale price of the Product when sold separately in finished form, and B is the average sale price of the other active ingredients or components when sold separately in finished form, in each case during the applicable reporting Calendar Quarter in the country in which the sale of the Combination Product was made, or if sales of both the Product and the other active ingredients or components did not occur in such period, then in the most recent Calendar Quarter in which sales of both occurred. If the other active ingredient or component in the Combination Product is not sold separately in said country, Net Sales of the Combination Product shall be determined by multiplying actual Net Sales of such Combination Product (determined by reference to the definition of Net Sales set forth above) during the Calendar Quarter period by the fraction A/D, where A is the average sale price of the Product when sold separately in finished form, and D is the average sale price of the Combination Product. If neither the Product nor the other active ingredient or component in the Combination Product is sold separately in a given country, the Parties shall determine Net Sales for such Combination Product by mutual agreement based on the relative contribution of the Product and the other active ingredients or components in the Combination Product.

1.80 “ Notice Date ” shall have the meaning set forth in Section 12.6(b).

 

CONFIDENTIAL

 

1.81 “ Panel ” shall have the meaning set forth in Section 12.6(b).

1.82 “ Paragraph IV Notice ” shall have the meaning set forth in Section 9.7.

1.83 “ Party ” shall mean ACADIA or BLS individually, and “ Parties ” shall mean ACADIA and BLS collectively.

1.84 “ Patent(s) ” shall mean (a) all patents, certificates of invention, applications for certificates of invention, priority patent filings and patent applications, and (b) any renewal, division, continuation (in whole or in part), or request for continued examination of any of such patents, certificates of invention and patent applications, and any all patents or certificates of invention issuing thereon, and any and all reissues, reexaminations, extensions, divisions, renewals, substitutions, confirmations, registrations, revalidations, revisions, and additions of or to any of the foregoing.

1.85 “ Patent Term Extension ” means any term extensions, supplementary protection certificates, regulatory exclusivity and equivalents thereof offering patent protection beyond the initial term with respect to any issued Patents.

1.86 “ Payment Report ” shall have the meaning set forth in Section 4.8(b).

1.87 “ PDP ” shall mean psychosis in Parkinson’s disease patients.

1.88 “ PDP Development Plan ” shall mean the plan for development of Product for the prevention or treatment of PDP in the United States as agreed to by the Parties, as may be amended in accordance with Section 4.1. A copy of the PDP Development Plan as of the Effective Date has been delivered by ACADIA to BLS under separate cover.

1.89 “ Person ” shall mean any individual, corporation, partnership, limited liability company, trust, governmental entity, or other legal entity of any nature whatsoever.

1.90 “ Permitted Licensees ” shall mean (i) licensees of any of ACADIA’s rights to Pimavanserin outside the Territory and/or (ii) licensees of any of ACADIA’s rights to Pimavanserin outside the Field in the Territory, as the case may be.

1.91 “ Phase II Clinical Trial ” shall mean a human clinical trial, the principal purpose of which is to gather an initial assessment of safety and efficacy of one or more particular doses in patients being studied, as required in 21 C.F.R. §312(b), or such similar clinical study in a country other than the United States.

1.92 “ Phase III Clinical Trial ” shall mean a human clinical trial, the principal purpose of which is to gather safety and efficacy data of one or more particular doses in patients being studied that is needed to evaluate the overall benefit and risk relationship of the product and to provide adequate basis for labeling, as required in 21 C.F.R. §312(c), or such similar clinical study in a country other than the United States.

 

CONFIDENTIAL

 

1.93 “ Pimavanserin ” shall mean an active pharmaceutical ingredient that is a compound, the structure of which compound has been disclosed by ACADIA to BLS under separate cover, […***…] (previously referred to as ACP-103 by ACADIA).

1.94 “ Product ” shall mean any pharmaceutical product containing Pimavanserin, alone or in combination with one or more other active pharmaceutical ingredients, in any dosage form or formulation.

1.95 […***…].

1.96 “ Quarterly Report ” shall have the meaning set forth in Section 4.8(b).

1.97 “ Receiving Party ” shall have the meaning set forth in Section 8.1

1.98 “ Regulatory Authority ” shall mean any national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity whose review and/or approval is necessary for the manufacture, packaging, use, storage, import, export, distribution, promotion, marketing, offer for sale and sale of Product. For countries where governmental approval is required for pricing or reimbursement for Product to be reimbursed by national health insurance (or its local equivalent), “Regulatory Authority” shall also include any national, regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity whose review and/or approval of pricing or reimbursement is required.

1.99 “ Regulatory Expenses ” shall mean Costs and Expenses incurred by a Party or any of its Affiliates in conducting regulatory activities in accordance with the applicable Development Plan with respect to Product in the Field for the United States.

1.100 “ Regulatory Filings ” shall mean all applications, approvals, licenses, registrations, notifications, registrations, submissions and authorizations made to or received from a Regulatory Authority in a country necessary for the development, manufacture and/or commercialization of a pharmaceutical product, including any INDs, NDAs and Marketing Approvals.

1.101 “ Responsible Party ” shall mean the Party designated as responsible for conducting the applicable clinical or non-clinical studies or other activities under the applicable Development Plan or designated by the Development Committee as responsible for filing and securing Marketing Approval for Product in the Field in the United States, as applicable.

1.102 “ Royalty Report ” shall have the meaning set forth in Section 7.1.

1.103 “ Royalty Term ” shall have the meaning set forth in Section 6.3(c).

 

CONFIDENTIAL

 

1.104 “ SEC ” shall have the meaning set forth in Section 8.5(a).

1.105 “ Section 13.4(d)(i) Licensed Patents ” shall have the meaning set forth in Section 13.4(d)(i).

1.106 “ Section 13.5(g)(i) Licensed Patents ” shall have the meaning set forth in Section 13.5(g)(i).

1.107 “ Senior Executives ” shall have the meaning set forth in Section 3.4(b).

1.108 […***…].

1.109 “ Sublicensee ” shall mean a Third Party or an Affiliate of BLS, other than a Distributor, to whom BLS or an Affiliate of BLS has granted a sublicense under the ACADIA Technology to make, have made, use, offer for sale, sell and/or import Pimavanserin or Product in the Field in any country in the Territory as contemplated by Section 2.3(a) of this Agreement. For clarity, the term “Sublicensee” shall not include (i) any whole sellers or importers that are not granted any sublicense under the ACADIA Technology to make, have made, use, offer for sale, sell and/or import Pimavanserin or Product in the Field in the Territory or (ii) any contract manufacturers that are granted only the right to manufacture Pimavanserin or Product in the Field in the Territory solely for use by BLS or its Affiliates, Distributors or Sublicensees.

1.110 “ Term ” shall have the meaning set forth in Section 12.1

1.111 “ Territory ” shall mean Canada and the United States.

1.112 “ Third Indication ” shall mean an Indication in the Field, other than PDP and ADP.

1.113 “ Third Indication Development Plan ” shall mean the plan for development of Product for the prevention or treatment of a Third Indication in the United States as agreed to by the Parties, as may be adopted and amended in accordance with Section 4.1.

1.114 “ Third Party ” shall mean any Person other than ACADIA, BLS and their respective Affiliates.

1.115 “ Third Party Claims ” shall have the meaning set forth in Section 11.1.

1.116 “ United States ” or “ U.S. ” shall mean the United States of America, including its territories and possessions and the District of Columbia.

1.117 “ Valid Claim ” shall mean (a) an unexpired claim of an issued patent which has not been found to be unpatentable, invalid or unenforceable by a court or other authority in the subject country, from which decision no appeal is taken or can be taken; or (b) a claim of a pending application, which application claims a first priority no more than […***…] years prior to the date upon which pendency is determined.

 

CONFIDENTIAL

 

1.118 “ Wind-down Period ” shall mean any period after the date of termination of this Agreement, in its entirety or on a country-by-country basis, during which Parties are required to wind-down development activities pursuant to Section 13.4(a), 13.5(a) or 13.6(a), as the case may be.

1.119 “ Withdrawal Notice ” shall have the meaning set forth in Section 3.2(b).

ARTICLE 2

GRANT OF LICENSE

2.1 R&D Licenses; Manufacturing License Outside the Territory.

(a) Subject to the terms and conditions of this Agreement, ACADIA hereby grants to BLS (i) a non-exclusive, royalty-free license, with the right to grant sublicenses to its Affiliates and Sublicensees, under such ACADIA Know-How, ACADIA […***…] Patents and Licensed Patents as are necessary for BLS, its Affiliates and Sublicensees to perform, or have performed, studies and regulatory activities with respect to Pimavanserin and Product in the Field, solely to perform or have performed such studies and regulatory activities with respect to Pimavanserin and Product […***…] and (ii) a non-exclusive, royalty-free license, with the right to sublicense to its Affiliates, under ACADIA Know-How, ACADIA […***…] Patents and Licensed Patents solely to make or have made Pimavanserin and Product […***…]. ACADIA shall not grant any right or license under ACADIA Know-How, ACADIA […***…] Patents and Licensed Patents to any Third Party either (A) to perform any studies and regulatory activities with respect to Pimavanserin and Product or (B) to make or have made Pimavanserin and Product outside the Territory, in each case for developing or commercializing Pimavanserin and Product in the Field in the Territory during the Term.

(b) Subject to the terms and conditions of this Agreement, BLS hereby grants (or with respect to BLS Technology Controlled by its Affiliates, causes its Affiliates to grant) to ACADIA (i) a non-exclusive, worldwide, royalty-free license, with the right to sublicense to its Affiliates, under such BLS Technology as is necessary for performing studies and regulatory activities to be performed by ACADIA under the Development Plans, solely to perform such studies and regulatory activities pursuant to the Development Plan during the Development Term for obtaining Marketing Approval of Product in the Field in the Territory and (ii) a non-exclusive, worldwide, royalty-free license, with the right to sublicense only to ACADIA’s Affiliates and Permitted Licensees, under such BLS Technology as is necessary to perform studies and regulatory activities with respect to Pimavanserin and Product, solely to perform such studies and regulatory activities for obtaining Marketing Approval of Product outside the Territory during the Term.

 

CONFIDENTIAL

 

2.2 License to BLS. Subject to the terms and conditions of this Agreement, ACADIA hereby grants to BLS a royalty-bearing license, with the right to grant sublicenses as provided in Section 2.3, under the ACADIA Technology, to make, have made, use, sell, offer for sale and import Pimavanserin and Product in the Field in the Territory. The license granted in this Section 2.2 shall be exclusive even as to ACADIA, except with respect to (i) ACADIA’s performance of studies and regulatory activities pursuant to the Development Plan during the Development Term, […***…] (v) ACADIA’s Co-Promotion Option exercised in accordance with Section 5.2. The license granted in this Section 2.2 under the Licensed Patents is granted only to the extent of the rights under the Licensed Patents granted to ACADIA under the License Agreement and is granted subject to the terms of the License Agreement.

2.3 Distribution Agreements; Sublicenses.

(a) Right to Sublicense. BLS shall have the right to sublicense any or all rights granted to it under Section 2.2 in any country in the Territory (i) to any of its Affiliates; and (ii) to a Third Party Distributor or Third Party Sublicensee.

(b) Distribution Agreements; Sublicenses. Any Distribution Agreement or sublicense shall be in writing and, with the exception of the financial terms, be consistent with the terms of this Agreement (except that any Third Party Distributor or Third Party Sublicensee shall not have the right to further sublicense). BLS shall be responsible for the acts or omissions of Distributors or Sublicensees in exercising rights under the Distribution Agreements or sublicenses, as the case may be, which would constitute a breach hereunder. Within 10 days after execution and receipt of a Distribution Agreement or a sublicense with a Third Party, BLS shall provide ACADIA with a full and complete copy of each Distribution Agreement or sublicense with such Third Party granted hereunder (provided that BLS may redact any confidential information contained therein that is not necessary to disclose to ensure compliance with this Agreement) and shall deliver copies of all reports (including relating to royalties and other payments) relating to Product received by BLS from Distributors and Sublicensees.

(c) […***…].

 

CONFIDENTIAL

 

2.4 Rights Reserved; Additional License Grant to ACADIA.

(a) Rights Reserved. Except for the rights and licenses expressly granted in this Agreement, ACADIA retains all rights under its intellectual property, including the ACADIA Technology and ACADIA […***…] Patents, and BLS retains all rights under its intellectual property, including BLS Technology, and no rights shall be deemed granted by one Party to the other Party by implication, estoppel or otherwise. Without limiting the foregoing, ACADIA reserves and retains all rights to the ACADIA Technology and ACADIA […***…] Patents not granted to BLS pursuant to Section 2.1(a) or 2.2, including the rights to conduct the activities contemplated under Section 2.2(i) through (v). BLS agrees not to practice any ACADIA Technology and ACADIA […***…] Patents except pursuant to any license expressly granted to BLS in this Agreement or any other written agreement between the Parties. ACADIA agrees not to practice any BLS Technology except pursuant to any license expressly granted to ACADIA in this Agreement or any other written agreement between the Parties.

(b) Additional License Grant to ACADIA.

(i) BLS hereby grants (or causes its Affiliates to grant) to ACADIA a non-exclusive, royalty-free license, […***…], under only such BLS Patents as necessary for the manufacture, use, sale, offer for sale and/or importation of Pimavanserin or Product outside the Territory, […***…] solely to make, have made, use, sell, offer for sale and import Pimavanserin and Product outside the Territory.

(ii) BLS will grant to ACADIA (or will cause its Affiliates to grant), […***…], a non-exclusive license, […***…] (to the extent permitted by BLS’s agreements with Third Parties), under (x) BLS Patents not owned by BLS or its Affiliates (to the extent permitted by BLS’s agreements with Third Parties), and (y) BLS Patents owned by BLS or its Affiliates that are not included in the license granted under Section 2.4(b)(i), in each case only to the extent necessary for the manufacture, use, sale, offer for sale and/or importation of Pimavanserin and Product outside the Territory, to make, have made, use, sell, offer for sale and import Pimavanserin and Product outside the Territory.

2.5 Mutual Covenant.

(a) Mutual Covenant. During the Term, each Party hereby covenants […***…], in the Territory. In addition, […***…] during the Term, each Party hereby covenants […***…]; provided however, […***…], then such restriction shall not be applicable.

 

CONFIDENTIAL

 

(b) […***…] . Notwithstanding Section 2.4(b)(a), in the event that […***…].

ARTICLE 3

GOVERNANCE

3.1 Development Committee.

(a) Establishment. Within 30 days following the Effective Date, ACADIA and BLS shall establish a joint development committee (“ Development Committee ”) to oversee, review and coordinate the activities of the Parties under this Agreement with regard to development and regulatory approval of Product in the Field in the United States, which Development Committee shall be disbanded upon termination or expiration of the Development Term.

 

CONFIDENTIAL

 

(b) Duties. The Development Committee shall:

(i) review, coordinate, and discuss the overall development and regulatory strategies for commercializing Product in the Field in the United States;

(ii) review and approve the Development Plans and material changes to the Development Plans, including Budgets contained therein;

(iii) determine whether ACADIA or BLS will be responsible for conducting the clinical and preclinical studies and activities for obtaining Marketing Approval for Product in the Field in the United States, other than the ACADIA Studies;

(iv) subject to and within the parameters of the Development Plans, oversee the implementation of the Development Plans, including assigning roles, responsibilities, timelines and budgets for activities based upon the Development Plans;

(v) provide a forum for presentation by BLS to ACADIA of a proposal for an Indication within the Field other than ADP and PDP to be pursued in the Territory under this Agreement, as the Third Indication or otherwise;

(vi) determine the course of action with regard to any proposal by BLS to develop a Product in a Third Indication in the Territory;

(vii) determine whether ACADIA or BLS will be responsible for conducting the regulatory activities for obtaining Marketing Approval for Product in the Field in the United States and oversee the conduct of such regulatory activities;

(viii) provide a forum for resolving matters to submitted by any subcommittee of the Development Committee;

(ix) provide a forum for the Parties to exchange information and coordinate their respective activities with respect to development, regulatory and manufacturing matters pertaining to Product in the Territory and outside the Territory; and

(x) perform such other duties as are specifically assigned by the Parties to the Development Committee pursuant to this Agreement.

3.2 Development Committee Membership.

(a) Membership. Subject to Section 3.2(b), the Development Committee shall be composed of […***…] members, […***…] of whom shall be nominated by ACADIA and […***…] of whom shall be nominated by BLS; provided that […***…] individual to serve as the Chairman of the Development Committee. The Chairman shall have no voting power, except that, in the event of a deadlock between the voting members of the Development Committee, the Chairman shall have the tie-breaking vote, as provided in Section 3.4. Any member of the Development Committee may designate a substitute to attend and perform the functions of that member at any meeting of the Development Committee. Each Party may, with the consent of the other Party, such consent not to be unreasonably withheld or delayed, invite non-member, non-voting representatives of such Party to attend meetings of the Development Committee.

 

CONFIDENTIAL

 

(b) Withdrawal. At any time during the Term and for any reason, ACADIA shall have the right to withdraw from participation in the Development Committee upon written notice to BLS, which notice shall be effective immediately upon receipt (“ Withdrawal Notice ”). Following the issuance of a Withdrawal Notice and subject to this Section 3.2(b), ACADIA’s representatives to the Development Committee shall not participate in any meetings of the Development Committee, nor shall ACADIA have any right to vote on decisions within the authority of the Development Committee. If, at any time, following the issuance of a Withdrawal Notice, ACADIA wishes to resume participation in the Development Committee, ACADIA shall notify BLS in writing and, thereafter, ACADIA’s representatives to the Development Committee shall be entitled to attend any subsequent meeting of the Development Committee and to participate in the activities of, and decision-making by, the Committees as provided in this Article 3 as if a Withdrawal Notice had not been issued by ACADIA. Following ACADIA’s issuance of a Withdrawal Notice, unless and until ACADIA resumes participation in the Development Committee in accordance with this Section 3.2(b): (i) all meetings of the Development Committee shall be held at BLS’s facilities; (ii) BLS shall have the right to make the final decision on all matters within the scope of authority of the Development Committee; and (iii) ACADIA shall have the right to continue to receive the minutes of the Development Committee meetings, but shall not have the right to approve the minutes for any Development Committee meeting held after ACADIA’s issuance of a Withdrawal Notice. For clarity, if ACADIA withdraws and then resumes participation in the Development Committee, it shall not have any right to retroactively review or modify any decision made by the Development Committee during ACADIA’s withdrawal period.

3.3 Meetings. All Development Committee meetings shall be held as often as the members may determine, but in any event Development Committee meetings shall occur not less than once per Calendar Quarter. Such meetings may be held in person, or by any means of telecommunications or video conference, as the members deem necessary or appropriate; provided, however, that at least one Development Committee meeting per year shall be held in person and the location of such in-person meeting shall alternate between ACADIA’s and BLS’s offices in Barbados. The first meeting shall be held at BLS’s offices in Barbados. A quorum for Development Committee meetings shall be […***…] members, with at least […***…] members from each Party.

3.4 Decision-making of Development Committee.

(a) Vote Required. The Development Committee may make decisions with respect to any subject matter that is within the purview of the Development Committee’s duties. Except as expressly provided in this Agreement, all decisions of the Development Committee shall be made by unanimous vote or written consent, with ACADIA and BLS each having, respectively, one vote in all decisions. The Development Committee shall use reasonable efforts to resolve any disputes concerning the matters within its duties.

 

CONFIDENTIAL

 

If, with respect to a matter that is subject to the Development Committee’s duties and does not involve approval of […***…], the Development Committee cannot reach consensus, then the Chairman of the Development Committee shall cast the deciding vote on such matter (which shall become the decision of the Development Committee).

(b) Development Plan Dispute. If, with respect to a matter that is within the Development Committee’s duties and involves approval of […***…], the Development Committee cannot reach consensus within 15 days after it has met and attempted to reach such consensus, then either Party may, by written notice to the other Party (an “ Escalation Notice ”), have such matter referred for resolution to, on behalf of ACADIA, the Chief Executive Officer of ACADIA and to, on behalf of BLS, the President of BLS (collectively, the “ Senior Executives ”). The Senior Executives shall use good faith efforts to resolve the matter referred to them with 15 days of such referral. If, despite such good faith efforts, the Senior Executives are unable to resolve such matter within 30 days of the date of any Escalation Notice, then upon the written request of either Party, […***…].

(c) Decision by Development Committee. For all purposes under this Agreement, any decision made pursuant to Section 3.4(a) or 3.4(b) shall be deemed to be the decision of the Development Committee.

(d) Limitations. Notwithstanding this Section 3.4, any dispute regarding the interpretation of this Agreement or any alleged breach of this Agreement shall be resolved in accordance with the terms of Article 14.

3.5 Minutes. Minutes for each of the Development Committee meetings shall be prepared by an ACADIA member or a BLS member of the Development Committee alternately, with BLS’s member preparing the minutes for the first meeting of the Development Committee. The draft minutes shall be sent to all members of the Development Committee for comment promptly after each such meeting (but in no event more than 15 days after each such meeting). All actions noted in the minutes shall be reviewed and approved at subsequent meetings of the Development Committee; provided that if the Parties cannot agree as to the content of the minutes by the time the Development Committee next meets, such minutes shall be finalized to reflect any areas of disagreement.

3.6 Expenses. Each Party shall bear its own costs, including expenses incurred by the members nominated by it in connection with their activities as members of the Development Committee or as Chairman.

3.7 Subcommittees. From time to time, the Development Committee may establish subcommittees to oversee particular projects or activities within the scope of authority of the Development Committee, as it deems necessary or advisable. Each subcommittee shall consist of such number of representatives of each Party as the Development Committee determines is appropriate from time to

 

CONFIDENTIAL

 

time and shall meet with such frequency as the Development Committee shall determine. All decisions of each subcommittee shall be made by unanimous vote or written consent, with ACADIA and BLS each having, collectively, one vote in all decisions. If, with respect to a matter that is subject to a subcommittee’s decision-making authority, the subcommittee cannot reach unanimity, the matter shall be referred to the Development Committee, which shall resolve such matter in accordance with Section 3.4.

3.8 Scope of Governance. Notwithstanding the creation of the Development Committee or any subcommittee, each Party shall retain the rights, powers and discretion granted to it hereunder, and neither the Development Committee nor any subcommittee shall be delegated or vested with rights, powers or discretion unless such delegation or vesting is expressly provided herein, or the Parties expressly so agree in writing. Neither the Development Committee nor any subcommittee shall have the power to amend or modify this Agreement, and no decision of the Development Committee or any subcommittee shall be in contravention of any terms and conditions of this Agreement. It is understood and agreed that issues to be decided by the Development Committee or any subcommittee, as applicable, are only those specific issues within the Development Committee’s duties. Any issues with respect to development of Product in the Field that relate solely to obtaining Marketing Approval in Canada or the commercialization of Product in the Field in the Territory shall be decided solely by BLS.

ARTICLE 4

DEVELOPMENT AND REGULATORY ACTIVITIES

4.1 Development Plans. The Parties have agreed to the initial PDP Development Plan (including a Budget contained therein) and the timeline, Budget and outline for the ADP Development Plan, which have been delivered by ACADIA to BLS under separate cover. The PDP Development Plan will include the ACADIA Studies and such additional studies, including preclinical and clinical studies, as are required by the FDA to secure Marketing Approval of Product for the treatment of PDP in the United States by the FDA, […***…], and a related Budget for such studies and activities. The Development Committee shall review and consider the Development Plans and any changes to the Development Plans on an ongoing basis, and in no event less frequently than once each half of a Calendar Year. All material changes to the Development Plans shall be subject to approval by the Development Committee.

4.2 Conduct of Development Activities.

(a) Compliance with Development Plan and Applicable Laws. All development and regulatory activities for obtaining Marketing Approval of Product in the Field in the United States shall be conducted by and on behalf of the Parties in accordance with the Development Plans and the other provisions of this Agreement. Each Party shall conduct the development activities for which it is the Responsible Party under the Development Plans in accordance with the Development Plans (including applicable Budget contained therein) and this Agreement. Each Party shall conduct those activities for which it is the Responsible Party under the Development Plans in compliance in all material respects with all Applicable Laws and in accordance with GLP and GCP under the

 

CONFIDENTIAL

 

Applicable Laws of the country in which such activities are conducted. BLS shall conduct development and regulatory activities for obtaining Marketing Approval of Product in the Field in Canada in accordance with this Agreement and in compliance in all material respects with all Applicable Laws and in accordance with GLP and GCP under the Applicable Laws of the country in which such activities are conducted. In the event the Parties agree that ACADIA shall conduct any studies and other activities other than ACADIA Studies […***…], for an amount of payment, and according to a payment schedule, agreed to by the Parties in writing, ACADIA shall conduct such studies and other activities in accordance with the Parties’ agreement and in compliance in all material respects with all Applicable Laws and in accordance with GLP and GCP under the Applicable Laws of the country in which such activities are conducted.

(b) Diligence. The Responsible Party shall use Commercially Reasonable Efforts to conduct and complete the studies and activities assigned to it in the Development Plans in order to achieve the goals of the Development Plans in accordance with the timelines specified therein. Without limiting the foregoing, each Party shall proceed diligently and in a timely manner with respect to the studies and activities for which it is the Responsible Party under the Development Plan by using its good faith efforts to allocate sufficient time, effort, equipment and facilities to such development activities and to use personnel with sufficient skills and experience as are required to accomplish such studies and activities in accordance with the Development Plans and the terms of this Agreement.

(c) Information Regarding Development Activities. Each Party shall maintain records, in sufficient detail and in good scientific manner appropriate for patent and regulatory purposes, which shall fully and properly reflect all work done and results achieved by or on behalf of such Party in the performance of its development activities under this Agreement. Each Party shall keep the Development Committee appropriately informed of the status of clinical and preclinical studies and other activities with respect to Product in the Field conducted under the Development Plans and BLS shall keep ACADIA informed of such studies and activities during any period that ACADIA has withdrawn from the Development Committees pursuant to Section 3.2(b). Upon request by the Development Committee, without limiting the foregoing, each Party shall promptly provide the Development Committee with summaries of data and results and, if requested by the Development Committee, all supporting data and results generated or obtained in the course of such Party’s performance of studies and activities under the Development Plans. In addition, BLS shall keep ACADIA informed of studies and activities conducted for obtaining Marketing Approval of Product in the Field in Canada, and, upon request by ACADIA, without limiting the foregoing, BLS shall promptly provide ACADIA with summaries of data and results generated or obtained in the course of BLS’s performance of such studies and activities. For clarity, the foregoing provision shall not limit ACADIA’s right to receive data pursuant to Section 4.7(g). Upon reasonable prior written notice, BLS shall have the right to inspect records and notebooks reflecting the work done and results achieved by or on behalf of ACADIA or its Affiliates in the performance of ACADIA’s development activities with respect to Pimavanserin and Product in the Field pursuant to the Development Plans.

 

CONFIDENTIAL

 

4.3 ACADIA Studies. Subject to Section 4.2 and except as otherwise mutually agreed, ACADIA shall conduct the ACADIA Studies in accordance with the PDP Development Plan with oversight by the Development Committee. ACADIA shall be the Responsible Party with respect to the ACADIA Studies and shall bear all Development Expenses of the ACADIA Studies, unless otherwise provided in the PDP Development Plan or mutually agreed by the Parties.

4.4 Other Development Activities in PDP.

(a) Other Development Activities. With regard to all clinical and preclinical studies and other activities under the PDP Development Plan, other than the ACADIA Studies, the PDP Development Plan shall specify which Party shall be the Responsible Party with respect to conducting such studies and activities with oversight by the Development Committee. The PDP Development Plan shall also specify which Party shall be the Responsible Party with respect to conducting CMC studies and technology transfer for the manufacture and supply of the active pharmaceutical ingredient for Product and finished Product for the prevention or treatment of PDP in the Territory with oversight by the Development Committee, and the Budget for such activities. Whether BLS or ACADIA is the Responsible Party for conducting studies or other activities under the PDP Development Plan, except as otherwise provided in this Section 4.4(a) or in Section 4.4(b) or 4.4(c), BLS shall be responsible for funding all studies (other than the ACADIA Studies, with the exception of any such studies where the Parties have mutually agreed under the PDP Development Plan and applicable Budget to share costs) and other activities under the PDP Development Plan and all studies and other activities for obtaining Marketing Approval of Product in the Field in Canada, including but not limited to the CMC studies, safety and drug interaction studies and technology transfer activities, in accordance with Section 4.8(a)(i). […***…].

(b) Additional Pre-NDA PDP Studies. In the event that the Development Committee determines that […***…] additional pivotal Phase III Clinical Trials of Product for the prevention or treatment of PDP are required in order to file an NDA for Product for the prevention or treatment of PDP with the FDA (the “ Additional Pre-NDA PDP Studies ”), then BLS shall have the option, which it may exercise upon written notice to ACADIA […***…] following such determination by the Development Committee, to do one of the following:

(i) participate with ACADIA in the Additional Pre-NDA PDP Studies, subject to amendment of the PDP Development Plan by the Development Committee to define such additional studies, including the Responsible Party and Budget for such additional studies, which Additional Pre-NDA PDP Studies shall be funded by BLS in accordance with Section 4.8(a)(i);

 

CONFIDENTIAL

 

(ii) terminate this Agreement […***…], with the effect set forth in Sections 13.2 and 13.4; or

(iii) proceed with other arrangements as agreed in writing by the Parties, after negotiating in good faith, to maximize the commercial opportunity for the Product;

provided, however, if no written notice is provided to ACADIA within such 90-day period, then BLS shall be deemed to have selected the option outlined in the foregoing clause (i).

(c) Additional Post-NDA PDP Studies. In the event that an NDA for Product for the prevention or treatment of PDP has been filed with the FDA, but the FDA does not approve such NDA and requests that additional studies of Product for the prevention or treatment of PDP be conducted (the “ Additional Post-NDA PDP Studies ”), then BLS shall have the option, which it may exercise upon written notice to ACADIA […***…] following such determination by the Development Committee, to do one of the following:

(i) participate with ACADIA in the Additional Post-NDA PDP Studies, subject to amendment of the PDP Development Plan by the Development Committee to define such additional studies, including the Responsible Party and Budget for such additional studies, which Additional Post-NDA PDP Studies shall be funded by BLS in accordance with Section 4.8(a)(i);

(ii) terminate this Agreement […***…], with the effect set forth in Sections 13.2 and 13.4; or

(iii) proceed with other arrangements as agreed in writing by the Parties, after negotiating in good faith, to maximize the commercial opportunity for the Product;

provided, however, if no written notice is provided to ACADIA within such […***…], then BLS shall be deemed to have selected the option outlined in the foregoing clause (i).

4.5 Development Activities in ADP.

(a) First Clinical Trial. […***…], the Parties shall initiate a […***…] Trial of Product, as determined by the Development Committee, for the prevention or treatment of ADP pursuant to the ADP Development Plan approved by the Development Committee. Such clinical trial shall be designed based on a commercially reasonable assessment of the then-available data and described in the ADP Development Plan. The ADP Development Plan shall specify which Party shall be the Responsible Party with respect to conducting such clinical trial with oversight by the Development Committee. Each Party shall conduct such clinical trial in accordance with the ADP Development Plan (including the applicable Budget contained therein), and BLS shall be responsible for funding such clinical trial under the ADP Development Plan.

 

CONFIDENTIAL

 

(b) Additional Studies After First Clinical Trial. Following the completion of, and receipt of results for such first clinical trial for ADP, BLS shall have the option, which it may exercise upon written notice to ACADIA […***…], to do one of the following:

(i) continue to develop, fund and seek regulatory approval for Product for the prevention or treatment of ADP in the Territory, including to conduct such studies and other activities required in order to file an NDA or label extension for Product for the prevention or treatment of ADP with the FDA, subject to amendment of the ADP Development Plan by the Development Committee to define such additional studies and activities (including CMC studies and technology transfer for the manufacture and supply of the active pharmaceutical ingredient for Product and finished Product for the prevention or treatment of ADP in the Territory), including the Responsible Party and Budget for such additional studies and activities, which studies and activities shall be funded by BLS in accordance with Section 4.8(a)(i);

(ii) terminate this Agreement […***…], with the effect set forth in Sections 13.3 and 13.4; or

(iii) proceed with other arrangements as agreed in writing by the Parties, after negotiating in good faith, to maximize the commercial opportunity for the Product;

provided, however, if no written notice is provided to ACADIA within such […***…], then BLS shall be deemed to have selected the option outlined in the foregoing clause (i).

4.6 Development Activities in Third Indication. BLS shall have the right, but not the obligation, to develop a Product in a Third Indication for use in the Territory. If BLS elects to pursue development of Product in a Third Indication for use in the Territory, it shall notify the Development Committee and the Development Committee shall determine the course of action. The Development Committee shall establish the Third Indication Development Plan describing which preclinical and clinical studies and other activities are required in order to file an NDA or label extension for Product for the prevention or treatment of the Third Indication with the FDA (including CMC studies and technology transfer for the manufacture and supply of the active pharmaceutical ingredient for Product and finished Product for the prevention or treatment of the Third Indication in the Territory). Each Party shall conduct such studies and activities in accordance with the Third Indication Development Plan (including the applicable Budget contained therein), and BLS shall be responsible for funding all studies and activities under the Third Indication Development Plan in accordance with Section 4.8(a)(i).

4.7 Regulatory Activities.

(a) Conduct of Regulatory Activiti