Repository: UIHistories Project: Board of Trustees Minutes - 1988 [PAGE 35]

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1986]

UNIVERSITY OF ILLINOIS

25

License Agreement and Contract with Bionetics Research, Inc., Chicago

(21) T h e chancellor at the Chicago campus has recommended that the University be authorized to enter into a license agreement and contract with Bionetics Research, Inc., a wholly owned United States subsidiary of Organon Teknika of T u m h o u t , Belgium. The University, through the Institution for Tuberculosis Research, is the only Federally licensed U.S. producer of BCG vaccine. Recent research indicates that BCG is highly effective in the treatment of various forms of cancer. By the agreement, the University would license its tangible property (the vaccine seed stocks) and its intangible property (trademarks, trade secrets, production know-how and show-how) to Bionetics and Organon Teknika. No patents are involved. In consideration for an exclusive worldwide license to make, use, and sell the vaccine, the University would be paid royalties of 5 percent of net invoice sales by Bionetics, Organon Teknika, and its subsidiaries, and sublicensees. T h e license would be for an indefinite period with provisions for termination. The University would receive a guaranteed minimum royalty of $100,000 in the first year, and $150,000 in each of the second and third years to be used for research activities in the Institution for Tuberculosis Research. Those sums will be a first charge against the royalty stream. Vaccine will be available to the University for its own use for research purposes. The Institution for Tuberculosis Research will continue, as an academic unit reporting to the College of Pharmacy through the Department of Pharmaceutics, to conduct basic research on the bacterium and on the vaccine made from it. The license will provide for additional research by separate contracts with Bionetics. In addition, Bionetics will assume all insurance costs and other commercial responsibilities, all responsibility for compliance and interaction with the Federal Food and Drug Administration, and any comparable foreign regulatory agencies, and will assist in managing the University's Investigational New Drug Study and New Product Application for FDA licensure of BCG for use in the treatment of cancer. Bionetics, Inc., will lease the portions of the Sangamon Street Building now used for the commercial production of BCG vaccine. T h e Institution for Tuberculosis Research will continue to occupy parts of the same building. T h e lease will be for an initial period of up to five years and will require that any improvements needed for enhanced production be at Bionetics' cost. Bionetics has agreed to invest substantial sums both to upgrade the premises and to increase production. The cost of the lease to Bionetics will be determined after evaluation of the improvements needed. Bionetics will, additionally, lease the equipment currently used for production and will meet all appropriate utilities and operation and maintenance costs associated with their operations in the building. The vice president for business and finance has recommended approval. I concur.

On motion of Mr. Madden, this recommendation was approved. By consensus, the board agreed that one roll call vote would be taken and considered the vote on each agenda item nos. 22 through 39 inclusive. The recommendations were individually discussed but acted upon at one time. (The record of board action appears at the end of each item.)