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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K/A
(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June 11, 2004

VERTEX PHARMACEUTICALS INCORPORATED
(Exact name of registrant as specified in its charter)

MASSACHUSETTS
(State or other jurisdiction
of incorporation)		   000-19319
(Commission File Number)		   04-3039129
(IRS Employer
Identification No.)


130 Waverly Street
Cambridge, Massachusetts 02139
(Address of principal executive offices) (Zip Code)

(617) 444-6100
Registrant's telephone number, including area code:

Check the appropriate box below if the Form 8-K/A filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


Section 8—Other Events

Item 8.01. Other Events

        On July 19, 2004, Vertex Pharmaceuticals Incorporated (the "Company") filed a current report on Form 8-K to disclose that it had entered into a License, Development and Commercialization Agreement dated June 11, 2004 with Mitsubishi Pharma Corporation (the "Mitsubishi Agreement"), which was subject to a pending confidential treatment request filed with the Securities and Exchange Commission (the "SEC") and attached with redactions as Exhibit 99.2 of the current report.

        As a result of the SEC's review of the Company's confidential treatment request, the Company hereby attaches the Mitsubishi agreement with revised redactions as Exhibit 99.2 of this current report.


Section 9—Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits.


SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

    VERTEX PHARMACEUTICALS INCORPORATED
(Registrant)

Date: September 9, 2004
 
/s/  KENNETH S. BOGER      
Kenneth S. Boger
Senior Vice President and General Counsel


EXHIBIT INDEX

        The following exhibit is filed as part of this current report on Form 8-K/A:

Exhibit No.
   Description
99.2   License, Development and Commercialization Agreement dated June 11, 2004 between Vertex Pharmaceuticals Incorporated and Mitsubishi Pharma Corporation (with certain confidential information redacted) †
†
Confidential portions of this document have been filed separately with the SEC pursuant to a request for confidential treatment.



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SIGNATURES
EXHIBIT INDEX

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Exhibit 99.2

Confidential Treatment Requested
Confidential portions of this document have been redacted and have been separately
filed with the Commission

LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
between
Vertex Pharmaceuticals Incorporated
and
Mitsubishi Pharma Corporation

Information redacted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.


TABLE OF CONTENTS

ARTICLE I—DEFINITIONS   1

ARTICLE II—LICENSE
 
6
    2.1    Grant to MITSUBISHI   6
    2.2    Competing Product   7
    2.3    Grant to VERTEX   7
    2.4    Transfer of Know-How   7
    2.5    No Implied Rights   7

ARTICLE III—DEVELOPMENT
 
7
    3.1    Joint Development Committee   7
    3.2    Development Plans   9
    3.3    Development Costs   10
    3.4    [***]   11
    3.5    Data Transfer   11
    3.6    Regulatory Matters   12
    3.7    Conduct of the Development Activities   13
    3.8    Ownership of Technology   13

ARTICLE IV—MANUFACTURE AND SUPPLY
 
14
    4.1    Supply of Bulk Drug Substance and Drug Product for Development   14
    4.2    Supply of Bulk Drug Substance and Drug Product for Commercial Purposes   14
    4.3    Limitation on Supply Obligation   14
    4.4    Second Source of Supply for Bulk Drug Substance   15
    4.5    Manufacturing Technology   15
    4.6    Packaging   15

ARTICLE V—COMMERCIALIZATION
 
15
    5.1    Global Marketing and Sales   15
    5.2    Co-Labeling   15
    5.3    Trademarks   15
    5.4    Due Diligence   15

ARTICLE VI—PAYMENTS
 
16
    6.1    License Fee   16
    6.2    Milestone Payments by MITSUBISHI   16
    6.3    Commercial Supply of Drug Product   17
    6.4    Production of Bulk Drug Substance by MITSUBISHI   17
    6.5    Royalties on Net Sales of Drug Product; Sales Reports   18
    6.6    Withholding Tax   19
    6.7    Currency of Payment   19

ARTICLE VII—TECHNOLOGY
 
19
    7.1    Ownership   19
    7.2    Patent Procurement and Maintenance   20
    7.3    Costs   20
    7.4    Infringement Claims by Third Parties   21
    7.5    Infringement Claims against Third Parties   22
         

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    7.6    Patent Term Extensions   22

ARTICLE VIII—REPRESENTATIONS AND WARRANTIES
 
23
    8.1    Representations and Warranties of VERTEX   23
    8.2    Representations and Warranties of MITSUBISHI   23

ARTICLE IX—CONFIDENTIALITY
 
23
    9.1    Undertaking   23
    9.2    Exceptions   24
    9.3    Publicity   25
    9.4    Survival   25

ARTICLE X—DISPUTE RESOLUTION
 
25
    10.1    Governing Law and Jurisdiction   25
    10.2    Dispute Resolution Process   25

ARTICLE XI—TERM AND TERMINATION
 
26
    11.1    Term   26
    11.2    Termination for Cause   26
    11.3    Termination for Bankruptcy   26
    11.4    Termination by MITSUBISHI   27
    11.5    Effect of Termination   27

ARTICLE XII—INDEMNIFICATION
 
28
    12.1    Indemnification by VERTEX   28
    12.2    Indemnification by MITSUBISHI   28
    12.3    Claims Procedures   28
    12.4    Limitation of Liability   29
    12.5    Insurance   29

ARTICLE XIII—MISCELLANEOUS PROVISIONS
 
29
    13.1    Waiver   29
    13.2    Force Majeure   29
    13.3    Registration of License   30
    13.4    Severability   30
    13.5    Government Acts   30
    13.6    Government Approvals   30
    13.7    Assignment; Successors and Assigns   30
    13.8    Export Controls   30
    13.9    Affiliates   31
    13.10    Counterparts   31
    13.11    No Agency   31
    13.12    Notice   31
    13.13    Headings   31
    13.14    Entire Agreement   31
    13.15    Rules of Construction   33

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LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT

        THIS LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT (the "Agreement") is made and entered into as of June 11, 2004 between VERTEX PHARMACEUTICALS INCORPORATED (hereinafter "VERTEX"), a Massachusetts corporation with principal offices at 130 Waverly Street, Cambridge, MA 02139-4242, and MITSUBISHI PHARMA CORPORATION (hereinafter "MITSUBISHI"), a Japanese corporation with principal offices at 6-9, Hiranomachi 2-Chome, Chuo-ku, Osaka 541-0046, Japan. VERTEX and MITSUBISHI are sometimes referred to herein individually as the "Party" and collectively as the "Parties".


INTRODUCTION

        WHEREAS, VERTEX has an ongoing antiviral drug discovery and development program targeting the hepatitis C virus (HCV) NS3 4A protease; and

        WHEREAS, VERTEX's discovery and development program has produced a clinical candidate known as VX-950 that is currently in late preclinical development and a back-up compound VX-905 (the "Compounds"); and

        WHEREAS, MITSUBISHI wishes to obtain an exclusive license to develop and commercialize the Compounds in Japan and certain Asian countries, and VERTEX is willing to grant such a license, all on the terms and subject to the conditions set forth herein; and

        NOW THEREFORE, in consideration of the foregoing premises, the mutual covenants set forth herein, and other good and valuable consideration, the Parties agree as follows:


ARTICLE I—DEFINITIONS

        1.1   "Affiliate" shall mean, with respect to any Person, any other Person which controls, is controlled by, or is under direct or indirect common control with such Person. The term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Control will be presumed if one Person owns, either of record or beneficially, more than fifty percent (50%) of the voting stock of any other Person.

        1.2   "Allocable Overhead" shall mean costs incurred by a party or for its account which are attributable to a party's costs of supervisory services, occupancy, payroll, information systems, human resources and purchasing, as allocated to company departments based on space occupied, headcount or activity-based methods, in all cases as determined by such party in accordance with its accounting standards, including International Accounting Standards (IAS) and Generally Accepted Accounting Principles (GAAP), applied on a consistent basis. Without limitation, Allocable Overhead shall not include the costs of general corporate activities including, by way of example, executive management, investor relations, business development, legal and finance.

        1.3   "Bulk Drug Substance" shall mean a Compound in bulk crystal, powder, solution or other form suitable for incorporation in a Drug Product, which if required in order to stabilize the Compound shall be formulated with stabilizing excipients.

        1.4   "Combination Therapy" shall mean a therapy in which for full treatment efficacy a Drug Product is clinically and regulatorily required to be used together with one or more other anti-hepatitis C virus (HCV) agents, such as interferon products.

        1.5   "Commercial Supply Agreement" shall have the meaning set forth in Section 4.2 hereof.

        1.6   "Competing Product" shall mean any pharmaceutical product in finished dosage form that contains [***](i) that falls within one or more of the claims of the published patent applications [***] or (ii) that falls within one or more of the claims of a patent application filed [***] having the priority date of [***].

[***] Information redacted pursuant to a confidential treatment request. An unredacted version of this exhibit has been filed separately with the Commission.

        1.7   "Completion" with respect to a Phase II Clinical Trial or a Phase III Clinical Trial shall mean the finalization of the final report with respect to such clinical trial.

        1.8   "Compound" shall mean either of VX-950 or VX-905.

        1.9   "Confidential Information" shall have the meaning set forth in Section 9.1.

        1.10 "Controlled" shall mean the legal authority or right of a party to grant a license or sublicense of intellectual property rights to another party, or to otherwise disclose proprietary or trade secret information to such other party, without breaching the terms of any agreement with a third party, misappropriating the proprietary or trade secret information of a third party or incurring any financial obligation or potential financial obligation to a third party.

        1.11 "Core Development Activities" shall mean: [***]

        1.12 "Core Development Plan" shall have the meaning set forth in Section 3.2.3 hereof.

        1.13 "Core Development Costs" shall mean [***]

        1.14 "Development Supply Agreement" shall have the meaning set forth in Section 4.1 hereof.

        1.15 "Drug Product" shall mean a Compound in finished dosage form that is prepared from Bulk Drug Substance and is ready for administration to the ultimate consumer as a pharmaceutical product.

        1.16 "Effective Date" shall mean the effective date of this Agreement as set forth on the first page hereof.

        1.17 "FDA" shall mean the United States Food and Drug Administration.

        1.18 "Field of Use" shall mean the treatment of any human condition, disorder or disease.

        1.19 "First Commercial Sale" shall mean the first sale of a Drug Product by MITSUBISHI or an Affiliate or sublicensee of MITSUBISHI in a country in the Territory following Regulatory Approval of the Drug Product in that country, or if no such Regulatory Approval or similar marketing approval is required, the date upon which the Drug Product is first sold in such country by MITSUBISHI or an Affiliate or sublicensee of MITSUBISHI pursuant to a plan of commercial launch.

        1.20 "IND" shall mean the investigational new drug application relating to the Drug Product filed with the FDA pursuant to 21 C.F.R. Part 312, including any amendments thereto, and equivalent applications with similar requirements in countries other than the United States.

        1.21 "Indication" shall mean a generally acknowledged disease, disorder or condition, a significant manifestation of a disease, disorder or condition, or a symptom associated with a disease, disorder or condition for which use of a Drug Product is indicated, as would be identified in the Drug Product's label under applicable regulations of a Regulatory Authority.

        1.22 "Infringement Claim" shall have the meaning set forth in Section 7.4.1 hereof.

        1.23 "Investigational Drug Product" shall have the meaning set forth in Section 4.1 hereof.

        1.24 "JDC" shall have the meaning set forth in Section 3.1 hereof.

        1.25 "Joint Know-How" shall have the meaning set forth in Section 7.1 hereof.

        1.26 "Joint Patents" shall have the meaning set forth in Section 7.1 hereof.

        1.27 "Joint Steering Committee" shall have the meaning set forth in Section 10.2.1 hereof.

        1.28 "Know-How" shall mean all data, technical information, know-how, inventions, discoveries, trade secrets, processes, techniques, materials, compositions, methods, formulas or improvements that relate to the research, development, manufacture, use, sale, offer for sale or import of any Bulk Drug

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Substance, Compound, or Drug Product; provided, however, that the term "Know-How" shall not include VERTEX's proprietary and confidential drug discovery platform or techniques.

        1.29 "Manufacturing Cost" shall mean the total of all costs incurred by or on behalf of VERTEX related to the manufacture of a batch or lot of Bulk Drug Substance, Compound, Drug Product, Investigational Drug Product or placebo, including direct material and labor, quality assurance/quality control and analytical costs, depreciation, as well as applicable Allocable Overhead and Third-Party costs relating to manufacturing, shipping and handling, duty, and insurance.

        1.30 "MITSUBISHI Development Activities" shall mean all non-clinical and clinical activities performed by or on behalf of MITSUBISHI or its sublicensees in the Territory with respect to Bulk Drug Substance, a Compound and/or Drug Product, including non-clinical studies, clinical trials, formulation research, formulation development, process research, process development, manufacturing scale-up, analytical method development and validation, and regulatory activities, in order to obtain Regulatory Approval from a Regulatory Authority for marketing the corresponding Drug Product in the Territory for the Indications selected.

        1.31 "MITSUBISHI Development Plan" shall have the meaning set forth in Section 3.2.1 hereof.

        1.32 "MITSUBISHI Know-How" shall mean all Know-How Controlled by MITSUBISHI or any of its Affiliates, including any such Know-How invented, discovered or developed in the conduct of the MITSUBISHI Development Activities.

        1.33 "MITSUBISHI Patents" shall mean all Patents Controlled by MITSUBISHI or any of its Affiliates claiming Bulk Drug Substance, a Compound or a Drug Product, or a method of making or using Bulk Drug Substance, a Compound or a Drug Product, or an improvement to the subject matter of a Patent covering any of the foregoing that would be infringed by the research, development, manufacture, use, sale, offer for sale or import of Bulk Drug Substance, Compound(s) or Drug Product. As of the Effective Date, no MITSUBISHI Patents exist. Schedule 1.33 hereto will be updated periodically to reflect additions thereto during the term of this Agreement.

        1.34 "MITSUBISHI Technology" shall mean all MITSUBISHI Patents and all MITSUBISHI Know-How.

        1.35 "Monotherapy" shall mean a therapy in which the Drug Product is used as a sole anti-hepatitis C virus (HCV) agent.

        1.36 "Net Sales" shall mean the aggregate amount obtained by totaling for all countries in the Territory where Drug Products were sold in a given calendar quarter the Net Sales Price or Prices in such country multiplied by the total number of units of Drug Products sold in such country at such Net Sales Price or Prices.

        1.37 "Net Sales Price" with respect to a Drug Product shall mean the gross amount invoiced in a given calendar quarter in a given country for such unit of the Drug Product sold to Third Parties in bona fide, arms-length transactions by MITSUBISHI and any MITSUBISHI Affiliate or its sublicensee, less (i) trade, quantity and/or cash discounts from the invoice price which are actually allowed or taken; (ii) freight, postage and insurance included in the invoice price; (iii) amounts repaid or credited by reason of rejection or return of goods or because of retroactive price reductions specifically identifiable to the Drug Product; (iv) amounts payable resulting from governmental (or agency thereof) mandated rebate programs; (v) Third-Party rebates to the extent actually allowed; (vi) invoiced custom duties and sales and use taxes (excluding income taxes), if any, actually paid and directly related to the sale; and (vii) any other specifically identifiable amounts included in the Drug Product's invoice price that should be credited for reasons substantially equivalent to those listed above; all as determined in accordance with MITSUBISHI's usual and customary accounting methods, which are in accordance with the

3


Japanese equivalent of Generally Accepted Accounting Principles in the United States (GAAP), consistently applied.

        1.38 "Patents" shall mean all existing Japanese and U.S. patents and patent applications; all patent applications hereafter filed in Japan or the United States, including any continuation, continuation-in-part, division, provisional or any substitute applications; any patent issued with respect to any such patent applications; any reissue, reexamination, renewal or extension (including any patent term extension or supplementary protection certificate) of any such patent; and any confirmation patent or registration patent or patent of addition based on any such patent; and all foreign counterparts of any of the foregoing.

        1.39 "Person" shall mean any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

        1.40 "Phase I Clinical Trial" shall mean an initial human clinical trial conducted for inclusion in (i) that portion of the FDA submission and approval process which provides for initial trials of a Compound in a small number of subjects to establish the safety profile of the Compound and to collect initial data on its pharmacokinetics and pharmacological effects, as more fully defined in 21 C.F.R. § 312.21(a), and (ii) equivalent submissions with similar requirements in countries other than the United States.

        1.41 "Phase Ib Clinical Trial" shall mean an initial repeated dose, dose escalation Phase I Clinical Trial conducted in a small number of patients infected with the hepatitis C virus (HCV) to establish the safety profile of the Compound and to collect additional data on its pharmacokinetics and pharmacological effects, including antiviral activity.

        1.42 "Phase II Clinical Trial" shall mean a human clinical trial conducted for inclusion in (i) that portion of the FDA submission and approval process which provides for trials of a Compound on a limited number of patients for the purposes of collecting data on dosages, evaluating safety and collecting preliminary information regarding efficacy in the proposed therapeutic Indication, as more fully defined in 21 C.F.R. §312.21(b), and (ii) equivalent submissions with similar requirements in countries other than the United States.

4


        1.43 "Phase IIa Clinical Trial" shall mean an initial Phase II Clinical Trial in any therapeutic Indication that is designed to evaluate safety and to demonstrate a meaningful trend of efficacy in patients who have the disease or condition that the Compound is intended to treat.

        1.44 "Phase IIb Clinical Trial" shall mean a Phase II Clinical Trial in any therapeutic Indication that is designed to determine the doses to be used in the Phase III Clinical Trials and to evaluate the efficacy/safety properties of the Compound.

        1.45 "Phase III Clinical Trial" shall mean a human clinical trial conducted for inclusion in (i) that portion of the FDA submission and approval process which provides for the continued trials of a Compound on sufficient numbers of patients to generate safety and efficacy data to support Regulatory Approval in the proposed therapeutic Indication, as more fully defined in 21 C.F.R. § 312.21(c), and (ii) equivalent submissions with similar requirements in countries other than the United States.

        1.46 "Regulatory Approval" shall mean, with respect to any country, all authorizations by a Regulatory Authority or other appropriate governmental entity or entities necessary for commercial marketing and sale of a Drug Product in that country including, where applicable, approval of labeling, price, reimbursement and manufacturing.

        1.47 "Regulatory Authority" shall mean (i) the FDA or (ii) any regulatory body with similar regulatory authority in any other jurisdiction anywhere in the world.

        1.48 "Start" shall mean the first dosing of the first patient with respect to a Phase II Clinical Trial or Phase III Clinical Trial, or the starting date set forth in the final protocol for the applicable study with respect to non-clinical studies.

        1.49 "Territory" shall mean all countries identified on Schedule 1.49 hereto.

        1.50 "Third Party" shall mean any Person that is not a Party or an Affiliate of any Party.

        1.51 "Valid Patent Claim" shall mean either (i) a claim of an issued and unexpired Patent which has not lapsed, been revoked or abandoned or held permanently unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been disclaimed, denied or admitted to be invalid or unenforceable through reissue, reexamination, disclaimer or otherwise, or (ii) a claim of a pending patent application which claim was filed in good faith and has not been abandoned or finally disallowed without the possibility of appeal or refilling of said application.

        1.52 "VERTEX Development Activities" shall mean all non-clinical and clinical activities performed by or on behalf of VERTEX or a VERTEX Licensee in the VERTEX Territory with respect to Bulk Drug Substance, a Compound, and/or Drug Product, including non-clinical studies, clinical trials, formulation research, formulation development, process research, process development, manufacturing scale-up, analytical method development and validation, and regulatory activities, in order to obtain Regulatory Approval from a Regulatory Authority for marketing the corresponding Drug Product in the VERTEX Territory for the Indications selected. For the avoidance of doubt, the Core Development Activities set forth in Section 1.11 shall be included in the VERTEX Development Activities.

        1.53 "VERTEX Development Plan" shall have the meaning set forth in Section 3.2.2 hereof.

        1.54 "VERTEX Know-How" shall mean all Know-How Controlled by VERTEX or any of its Affiliates, including any such Know-How invented, discovered or developed in the conduct of the VERTEX Development Activities.

        1.55 "VERTEX Licensee" shall mean any Person other than MITSUBISHI to which VERTEX grants a license under the VERTEX Technology.

5


        1.56 "VERTEX Patents" shall mean all Patents Controlled by VERTEX or any of its Affiliates claiming Bulk Drug Substance, a Compound or a Drug Product, or a method of making or using Bulk Drug Substance, a Compound or a Drug Product, or an improvement to the subject matter of a Patent covering any of the foregoing that would be infringed by the research, development, manufacture, use, sale, offer for sale or import of Bulk Drug Substance, Compound(s) or Drug Product. A list of VERTEX Patents in the Territory is appended hereto as Schedule 1.56 and will be updated periodically to reflect additions thereto during the term of this Agreement. Notwithstanding the foregoing, any Third-Party patent under which VERTEX obtains a license pursuant to Section 7.4.2 hereof shall not be deemed to be a VERTEX Patent.

        1.57 "VERTEX Technology" shall mean all VERTEX Patents and all VERTEX Know-How.

        1.58 "VERTEX Territory" shall mean all countries of the world except for the countries of the Territory.

        1.59 "VX-905" shall mean the compound identified on Schedule 1.59 hereto.

        1.60 "VX-950" shall mean the compound identified on Schedule 1.60 hereto.


ARTICLE II—LICENSE

        2.1   Grant to MITSUBISHI.

6

        2.2   Competing Product. In the event that VERTEX intends to license rights to develop and/or commercialize a Competing Product solely in the Territory (rather than as part of a worldwide license), VERTEX shall discuss with MITSUBISHI in good faith the terms and conditions for such a license prior to negotiating terms and conditions for such a license with any Third Party.

        2.3   Grant to VERTEX.

        2.4   Transfer of Know-How. Each Party shall deliver to the other all Know-How Controlled by it or its Affiliates and requested by the other Party from time to time, pursuant to the exercise by such other Party of any of the licenses granted hereunder. The Know-How shall be delivered in a form that reasonably facilitates the use of such Know-How and shall also include copies of all MITSUBISHI Patents in the VERTEX Territory or all VERTEX Patents in the Territory, as applicable, and all other manifestations of the intellectual property licensed hereunder embodied in the Bulk Drug Substance, Compounds or Drug Products, whether in human or machine readable form.

        2.5   No Implied Rights. Except as expressly provided in this Agreement, no right or license to use any intellectual property of either Party is granted hereunder by implication or otherwise.


ARTICLE III—DEVELOPMENT

        3.1   Joint Development Committee.

7

        MITSUBISHI will prepare the initial draft of an agenda for each JDC meeting and will submit the draft to VERTEX for comments a reasonable period before the scheduled meeting date. The Party hosting a particular JDC meeting shall prepare and deliver to the members of the JDC, within [***] days after the date of each meeting, minutes of such meeting setting forth, among other things, all decisions of the JDC, and including a summary of the status of development activities as reported to the JDC. The Party not preparing the minutes may suggest changes or amendments to the minutes, and may provide a supplement addressing activities at the meeting that are not reported in the minutes, which shall be distributed to the Parties and filed with the meeting minutes. In case the JDC meets by means of telephone or video conferences, the responsibility for preparing minutes shall lie with MITSUBISHI.

8

        3.2   Development Plans.

9

        3.3   Development Costs.

        3.4   [***]. In the event that MITSUBISHI decides to file for Regulatory Approval for the Drug Product for a [***] in the Territory [***] then MITSUBISHI shall [***]. The Parties shall discuss in

10

good faith and agree [***]. For the purpose of this Section 3.4 [***], In addition, in the event that MITSUBISHI determines that it will not file for Regulatory Approval for the Drug Product in the Territory for [***] but instead will file for Regulatory Authority for the Drug Product in the Territory for [***] then MITSUBISHI shall notify VERTEX of such decision no later than [***] and the parties shall discuss in good faith and agree upon the terms [***] which agreement in any event shall be reached prior to [***].

        3.5   Data Transfer.

11

        3.6   Regulatory Matters.

12

        3.7   Conduct of the Development Activities.

        3.8   Ownership of Technology.

13


ARTICLE IV—MANUFACTURE AND SUPPLY

        4.1   Supply of Bulk Drug Substance and Drug Product for Development. Subject to Section 6.4, VERTEX shall be responsible for the manufacture and supply of all Bulk Drug Substance, and MITSUBISHI will be responsible for preparing the Drug Product from Bulk Drug Substance, in each case as necessary for the conduct of the MITSUBISHI Development Activities in the Territory. Notwithstanding the above but subject to Section 6.4, at MITSUBISHI's request and upon no less than [***], VERTEX agrees to supply that amount of Drug Product required for MITSUBISHI to conduct the Phase I Clinical Trials, Phase II Clinical Trials and Phase III Clinical Trials in the Territory ("Investigational Drug Product"). VERTEX will supply such Bulk Drug Substance and Investigational Drug Product to MITSUBISHI at the [***]. Supply of Bulk Drug Substance and Investigational Drug Product for development purposes shall be undertaken pursuant to the provisions of a supply agreement for the conduct of the MITSUBISHI Development Activities (the "Development Supply Agreement"), including such customary representations, warranties, covenants and conditions as are necessary or appropriate for transactions of this type, not inconsistent with the terms and conditions hereof and satisfactory in form and substance to the Parties and their legal advisors. Within [***] after the Effective Date, the Parties will negotiate in good faith and separately enter into the Development Supply Agreement.

        4.2   Supply of Bulk Drug Substance and Drug Product for Commercial Purposes. Subject to Section 6.4, VERTEX will supply and MITSUBISHI shall purchase from VERTEX all of MITSUBISHI's requirements for Bulk Drug Substance for manufacture of Drug Product sold in the Territory pursuant to the provisions of a supply agreement for Bulk Drug Substance for commercial purposes (the "Commercial Supply Agreement"), including such customary representations, warranties, covenants and conditions as are necessary or appropriate for transactions of this type, not inconsistent with the terms and conditions hereof and satisfactory in form and substance to the Parties and their legal advisors. Promptly after the Start of the first Phase III Clinical Trial by MITSUBISHI, the Parties will commence good faith negotiations and separately enter into the Commercial Supply Agreement. MITSUBISHI shall purchase such Bulk Drug Substance from VERTEX in accordance with the terms of Section 6.3 hereof. VERTEX may contract with any Third Party as a manufacturing subcontractor.

        4.3   Limitation on Supply Obligation. Notwithstanding Sections 4.1 or 4.2 hereof, VERTEX shall have no obligation to supply Bulk Drug Substance or Investigational Drug Product to MITSUBISHI with respect to a Drug Product unless VERTEX is developing or commercializing such Drug Product; provided, however, that if VERTEX has so supplied Bulk Drug Substance to MITSUBISHI for commercial purposes before VERTEX ceased development or commercialization of the corresponding Drug Product, then VERTEX shall be obligated to continue the supply of such Bulk Drug Substance to MITSUBISHI pursuant to the terms set forth in Section 6.4 hereof; provided further, however, that in any other case where MITSUBISHI wishes to develop or commercialize a Drug Product that VERTEX is not itself developing or commercializing, VERTEX shall grant to MITSUBISHI a nonexclusive license (or sublicense, as appropriate) under the VERTEX Technology, with the right to sublicense, to manufacture and have manufactured Bulk Drug Substance with respect to such Drug Product to the extent required to use, sell, have sold, offer to sell and import such Drug Product in the Territory in the Field of Use. In such event, at MITSUBISHI's expense, VERTEX will also deliver to MITSUBISHI such VERTEX Technology as may then exist (if any) and provide to MITSUBISHI any applicable technical support in connection therewith that is reasonably necessary to enable MITSUBISHI to manufacture Bulk Drug Substance in compliance with any and all current Regulatory Approvals in the Territory. Such VERTEX Technology shall be delivered to MITSUBISHI in such a way as to communicate it to MITSUBISHI promptly, effectively and economically.

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        4.4   Second Source of Supply for Bulk Drug Substance. Within two (2) years after the receipt of Regulatory Approval for a Drug Product in the United States, VERTEX agrees to have at least [***]manufacturing sites, in different geographical locations, approved by the Regulatory Authorities for the supply of the corresponding Bulk Drug Substance to MITSUBISHI pursuant to the Commercial Supply Agreement.

        4.5   Manufacturing Technology. Manufacturing technology which is Controlled by one Party and which would be useful to the other Party in discharging its manufacturing obligations hereunder shall be made available to the manufacturing Party for that purpose, subject to negotiation of a reasonable compensation arrangement. If either Party (a "Contracting Party") engages an Affiliate or a Third Party to provide assistance to the Contracting Party in the development of processes useful for the manufacture of Bulk Drug Substance or Drug Product, the Contracting Party will make reasonable efforts to provide that any processes belonging to that Affiliate or Third Party and made available to the Contracting Party will also be made available to the other Party on the same terms offered to the Contracting Party.

        4.6   Packaging. MITSUBISHI will be responsible for packaging the Drug Product and Investigational Drug Product for development purposes and for commercial sale in the Territory.


ARTICLE V—COMMERCIALIZATION

        5.1   Global Marketing and Sales. MITSUBISHI will prepare a marketing plan in reasonable detail for the launch of any Drug Product in each country of the Territory, and will provide the plan to VERTEX not later than ninety (90) days after submission of the initial application for Regulatory Approval of the Drug Product to a Regulatory Authority in such country of the Territory.

        5.2   Co-Labeling. The labels, packaging and inserts for the Drug Product packaged for sale in the Territory, and any promotional materials therefor, will bear the company names and logos of both MITSUBISHI and VERTEX with such relative prominence and in such language as are permitted by the applicable laws, rules, regulations and custom of such country, with the preference that wherever possible such names and logos shall be of equal prominence and VERTEX's name shall be written in the English language. MITSUBISHI will permit VERTEX to review all material regulatory filings in the Territory that relate to product labeling, and all proposed labels, packaging, package inserts and promotional materials required under the foregoing provisions to bear VERTEX's name and logo, prior to the filing of any such material with any Regulatory Authority.

        5.3   Trademarks. Each Party shall have the right to register and use its own trademark for a Drug Product, respectively. Notwithstanding the foregoing, in the event MITSUBISHI wishes to use VERTEX's trademark for a Drug Product, VERTEX hereby grants to MITSUBISHI an exclusive, royalty-free license to use VERTEX's trademark for a Drug Product for the advertising, promotion, marketing, distribution and sale of the Drug Product in the Field of Use in the Territory. MITSUBISHI shall have the right to grant sublicenses under the foregoing exclusive license to its sublicensees pursuant to Section 2.1.2 hereof.

        5.4   Due Diligence. Following the First Commercial Sale of a Drug Product and until the expiration of this Agreement, MITSUBISHI shall use diligent and commercially reasonable efforts to keep the Drug Product reasonably available to the public in the Territory, devoting the same degree of attention and diligence to such efforts that it devotes to such activities for other of its products of comparable commercial potential. MITSUBISHI shall promptly notify VERTEX if it shall determine that the marketing and sale of the Drug Product in any country in the Territory is not commercially reasonable or economically profitable or if for other unforeseen reasons further commercial support of the Drug Product in any country is no longer prudent or practical. Within [***] of the receipt of such notice, VERTEX shall notify MITSUBISHI whether it wishes the marketing and sale of the Drug Product in such country in the Territory to continue. If VERTEX notifies MITSUBISHI that it does

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not wish such marketing and sale to continue, then MITSUBISHI may immediately stop the marketing and sale of the Drug Product in such country in the Territory. If VERTEX notifies MITSUBISHI that it does wish such marketing and sale to continue, then MITSUBISHI shall continue to market and sell the Drug Product in such country in the Territory for up to [***] from the date of MITSUBISHI's initial notice to VERTEX or such earlier date upon which VERTEX or a VERTEX Licensee begins to market and sell the Drug Product in such country. Upon the termination of MITSUBISHI's marketing and sale of the Drug Product in a country, this Agreement shall be deemed to be amended to delete such country from the Territory, all rights with respect to such country under this Agreement shall revert to VERTEX, and the rights and licenses granted by VERTEX to MITSUBISHI pursuant to this Agreement shall terminate with respect to such country. At such time MITSUBISHI, at the request of VERTEX, shall also assign or otherwise transfer to VERTEX all INDs, Regulatory Approvals, or applications therefor, with respect to a Compound or Drug Product in such country, and VERTEX shall have an irrevocable, fully paid-up nonexclusive license, with the right to sublicense, in such country under the MITSUBISHI Technology to develop, manufacture, have manufactured, use, sell, have sold, offer to sell and import Bulk Drug Substance, Compound and Drug Product. In addition, at the request of VERTEX, MITSUBISHI shall assign to VERTEX free of charge all of its or its Affiliates' right, title and interest in and to any trademarks used for a Drug Product in such country, and shall execute, or cause its Affiliates to execute, such documents of transfer or assignment and perform, or cause its Affiliates to perform, such acts as may be reasonably necessary to transfer ownership of such trademarks to VERTEX and to enable VERTEX to continue to maintain such trademarks at VERTEX's expense.


ARTICLE VI—PAYMENTS

        6.1   License Fee. In consideration of the grant of the license set forth in Section 2.1 hereof and in recognition of VERTEX's investment in the Compounds prior to the Effective Date, MITSUBISHI will pay to VERTEX [***] on or before [***].

        6.2   Milestone Payments by MITSUBISHI.

Milestone
   Payment
1.    First [***]   US $[***]
2.    First [***]   US $[***]
3.    First [***]   US $[***]
4.    First [***]   US $[***]
5.    First [***]   US $[***]
6.    First [***]   US $[***]
   
    US $[***]
   

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        6.3   Commercial Supply of Drug Product.

        6.4   Production of Bulk Drug Substance by MITSUBISHI. If VERTEX determines at any time that it does not wish to supply Bulk Drug Substance or Investigational Drug Product to MITSUBISHI, its Affiliates and sublicensees, VERTEX shall provide MITSUBISHI (i) [***]prior written notice of such determination if VERTEX has any Affiliate, subcontractor, or VERTEX Licensee that manufactures Bulk Drug Substance or Investigational Drug Product and agrees to supply Bulk Drug Substance or Investigational Drug Product to MITSUBISHI [***], or (ii) in a case other than the case set forth in clause (i) above, [***] prior written notice; provided, however, that, in the case of clause (ii) set forth above, VERTEX shall stock sufficient Bulk Drug Substance to permit MITSUBISHI to manufacture Drug Products or to permit VERTEX to manufacture Investigational Drug Product for MITSUBISHI for a [***] and shall supply such Bulk Drug Substance or Investigational Drug Product to MITSUBISHI for such [***] at a price equal to [***], but otherwise pursuant to the terms and conditions of the Commercial Supply Agreement or the Development Supply Agreement, as applicable. Following the expiration of VERTEX's obligation to supply Bulk Drug Substance or Investigational Drug Product to MITSUBISHI, the Commercial Supply Agreement or the Development Supply Agreement, as applicable, shall terminate. Upon VERTEX's notice pursuant to this Section 6.4 of its determination to discontinue supply, MITSUBISHI shall have the sole right and responsibility, at its expense, for the manufacture of all Bulk Drug Substance to meet its, its Affiliates' and sublicensees' requirements in connection with the development and commercial sale of the Drug Product in the Territory; provided, however, that VERTEX shall have the right to so manufacture and supply Bulk Drug Substance pursuant to its obligation set forth in this Section 6.4. Upon providing such notice to MITSUBISHI, VERTEX shall grant to MITSUBISHI a nonexclusive license (or sublicense, as appropriate) under the VERTEX Technology, with the right to sublicense, to manufacture and have manufactured Bulk Drug Substance to the extent required to use, sell, have sold,

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offer to sell and import Drug Products in the Territory in the Field of Use. In such event, at MITSUBISHI's expense, VERTEX will also deliver to MITSUBISHI the VERTEX Technology and provide to MITSUBISHI the technical support in connection therewith reasonably necessary to enable MITSUBISHI to manufacture Bulk Drug Substance in compliance with any and all current Regulatory Approvals in the Territory. Such VERTEX Technology shall be delivered to MITSUBISHI in such a way as to communicate it to MITSUBISHI promptly, effectively and economically.

        6.5   Royalties on Net Sales of Drug Product; Sales Reports.

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        6.6   Withholding Tax. If during the term of this Agreement, withholding tax is required by law to be deducted from any payments required to be made by MITSUBISHI to VERTEX hereunder, (i) such tax will be deducted from the otherwise remittable royalty after applying for tax rate reduction under the applicable treaties for avoidance of double taxation, (ii) such tax will be paid to the proper tax authorities, and (iii) a certificate of tax will be sent to VERTEX promptly after receipt from the competent tax authority.

        6.7   Currency of Payment. All payments hereunder shall be made in U.S. dollars. If at any time legal restrictions prevent the prompt remittance of any payments with respect to any country of the Territory where a Drug Product is sold, MITSUBISHI or its Affiliates or sublicensees shall have the right and option to make such payments by depositing the amount thereof in local currency to VERTEX's account in a bank or depository in such country.


ARTICLE VII—TECHNOLOGY

        7.1   Ownership. All Know-How invented, discovered or developed exclusively by either Party or its Affiliates (directly or through others acting on its behalf) shall be owned and Controlled by such Party, subject to the provisions of this Agreement. All Patents claiming Bulk Drug Substance, a Compound or

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a Drug Product, or a method of making or using the same or an improvement to a Patent covering any of the foregoing, invented by either Party or its Affiliates (directly or through others acting on its behalf) shall be owned and Controlled by such Party, subject to the provisions of this Agreement. All Know-How and Patents claiming Bulk Drug Substance, a Compound or a Drug Product, or a method of making or using the same or an improvement to a Patent covering any of the foregoing, invented, discovered, or developed, as applicable, jointly by the Parties or their Affiliates (directly or through others acting on their behalf) shall be owned and Controlled jointly. Such Know-How that is owned and Controlled jointly by the Parties or their Affiliates shall be "Joint Know-How," and such Patents that are owned and Controlled jointly by the Parties or their Affiliates shall be "Joint Patents." For the avoidance of doubt, either Party shall have the right, including the right to sublicense, to practice and use the Joint Know-How and the Joint Patents worldwide without any payment to the other Party.

        7.2   Patent Procurement and Maintenance. VERTEX shall be responsible for the preparation, filing, prosecution and maintenance of all VERTEX Patents and any Joint Patents, and MITSUBISHI shall be responsible for the preparation, filing, prosecution and maintenance of all MITSUBISHI Patents. VERTEX, with the advice of MITSUBISHI, shall determine the countries in the Territory in which patent applications for VERTEX Patents will be filed. MITSUBISHI, with the advice of VERTEX, shall determine the countries in the VERTEX Territory in which patent applications for MITSUBISHI Patents will be filed. The Parties shall discuss and determine the countries in the Territory in which patent applications for Joint Patents will be filed. If VERTEX decides not to prosecute, and maintain any VERTEX Patent filed in a country in the Territory, without first having filed a substitute therefor, VERTEX shall assign its right, title and interest in and to such VERTEX Patent in such country to MITSUBISHI free of charge, if MITSUBISHI so desires, and shall execute such documents of transfer or assignment and perform such acts as may be reasonably necessary to transfer sole ownership of such VERTEX Patent to MITSUBISHI and to enable MITSUBISHI to continue prosecution or maintenance of such VERTEX Patent. In such case, such VERTEX Patents shall not be deemed to be VERTEX Patents thereafter with respect to such country. If MITSUBISHI decides not to prosecute, and maintain any MITSUBISHI Patent filed in a country in the VERTEX Territory, without first having filed a substitute therefor, MITSUBISHI shall assign its right, title and interest in and to such MITSUBISHI Patent in such country to VERTEX free of charge, if VERTEX so desires, and shall execute such documents of transfer or assignment and perform such acts as may be reasonably necessary to transfer sole ownership of such MITSUBISHI Patent to VERTEX and to enable VERTEX to continue prosecution or maintenance of such MITSUBISHI Patent. In such case, such MITSUBISHI Patents shall not be deemed to be MITSUBISHI Patents with respect to such country. VERTEX shall provide draft applications for Joint Patents to MITSUBISHI sufficiently in advance of filing for MITSUBISHI to have the opportunity to comment thereon. VERTEX shall furnish MITSUBISHI with copies of all substantive communications between VERTEX and applicable patent offices regarding the Joint Patents. VERTEX and MITSUBISHI shall each provide the JDC with periodic reports listing, by name, any VERTEX Patents or MITSUBISHI Patents, respectively, filed by it in the Territory or the VERTEX Territory, respectively, along with a general summary of the claims made and the jurisdictions of filing in the Territory or the VERTEX Territory, respectively. Each Party will provide such assistance as the other Party may reasonably request in order to protect the other Party's rights to the Patents for which it is responsible under this Section 7.2.

        7.3   Costs. VERTEX shall be responsible for paying its costs incurred for preparation, filing, prosecution and maintenance of the VERTEX Patents worldwide and of the Joint Patents in the VERTEX Territory. MITSUBISHI shall be responsible for paying its costs incurred for preparation, filing, prosecution and maintenance of the MITSUBISHI Patents worldwide and of the Joint Patents in the Territory. Either Party may at any time elect, by written notice to the other Party, to discontinue support for one or more Joint Patents (a "Discontinued Patent") and shall not be responsible for any costs relating to a Discontinued Patent which are incurred more than sixty (60) days after receipt of that notice by the other Party. In such case, the other Party may elect at its sole discretion to continue

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preparation, filing, prosecution or maintenance of the Discontinued Patent at its sole expense. The Party so continuing shall own any such Discontinued Patent, and the Party electing to discontinue support shall execute such documents of transfer or assignment and perform such acts as may be reasonably necessary to transfer sole ownership of the Discontinued Patent to the other Party and enable that Party to file or to continue prosecution or maintenance of the Discontinued Patent, if the other Party elects to do so. Discontinuation may be on a country-by-country basis or for a Patent series in total.

        7.4   Infringement Claims by Third Parties.

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        7.5   Infringement Claims against Third Parties.

        7.6   Patent Term Extensions. The Parties shall cooperate in good faith with each other in gaining patent term extension in the Territory to VERTEX Patents, Joint Patents and MITSUBISHI Patents covering a Compound or Drug Product. MITSUBISHI and VERTEX shall mutually determine which patents shall be extended. All filings for such extension shall be made by the Party who owns the patent, and by VERTEX for Joint Patents.

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ARTICLE VIII—REPRESENTATIONS AND WARRANTIES

        8.1   Representations and Warranties of VERTEX. As of the Effective Date, VERTEX represents and warrants to MITSUBISHI as follows:

        8.2   Representations and Warranties of MITSUBISHI. As of the Effective Date, MITSUBISHI represents and warrants to VERTEX that this Agreement has been duly executed and delivered by MITSUBISHI and constitutes the valid and binding obligation of MITSUBISHI, enforceable against MITSUBISHI in accordance with its terms except as enforceability may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium and other laws relating to or affecting creditors' rights generally and by general equitable principles. The execution, delivery and performance of this Agreement have been duly authorized by all necessary action on the part of MITSUBISHI, its officers and directors. The execution, delivery and performance of this Agreement does not breach, violate, contravene or constitute a default under any contracts, arrangements or commitments to which MITSUBISHI is a party or by which it is bound nor does the execution, delivery and performance of this Agreement by MITSUBISHI violate any order, law or regulation of any court, governmental body or administrative or other agency having authority over it.


ARTICLE IX—CONFIDENTIALITY

        9.1   Undertaking. Each Party shall keep confidential, and other than as provided herein, shall not use or disclose, directly or indirectly, any trade secrets, other knowledge, information, documents or materials, owned or Controlled by the other Party, which have been disclosed (in tangible or electronic form or as evidenced by meeting minutes or similar materials) to such Party after the Effective Date and designated confidential by the disclosing Party (any such information, "Confidential Information"). All VERTEX Know-How and VERTEX Patents shall be deemed Confidential Information of

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VERTEX; all MITSUBISHI Know-How and MITSUBISHI Patents shall be deemed Confidential Information of MITSUBISHI; and all Joint Know-How and Joint Patents shall be deemed Confidential Information of both Parties. Neither VERTEX nor MITSUBISHI shall use such Confidential Information of the other Party or jointly owned by the Parties for any purpose, including the filing of patent applications containing such information, without the other Party's consent (which shall not be unreasonably withheld), other than for conducting the MITSUBISHI Development Activities or VERTEX Development Activities or as otherwise permitted under this Agreement.

        9.2   Exceptions. Notwithstanding the foregoing, the provisions of Section 9.1 hereof shall not apply to Confidential Information which the receiving Party can conclusively establish:

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        9.3   Publicity. The Parties will agree upon the timing and content of any initial press release or other public communications relating to this Agreement and the transactions contemplated herein. Except to the extent already disclosed in that initial press release or other public communication, no public announcement concerning the existence or the terms of this Agreement or concerning the transactions described herein shall be made, either directly or indirectly, by VERTEX or MITSUBISHI, except as may be required by applicable laws, regulations, or judicial order, without first obtaining the approval of the other Party and agreement upon the nature, text, and timing of such announcement, which approval and agreement shall not be unreasonably withheld.

        9.4   Survival. The provisions of this Article IX shall survive the termination of this Agreement and shall extend for a period of five (5) years thereafter.


ARTICLE X—DISPUTE RESOLUTION

        10.1 Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York and of the United States of America, without giving effect to the doctrine of conflict of laws.

        10.2 Dispute Resolution Process.

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ARTICLE XI—TERM AND TERMINATION

        11.1 Term. The term of this Agreement shall extend with respect to a Drug Product in a particular country from the Effective Date until the later of: (a) the last to expire or be invalidated or abandoned of any VERTEX Patents containing a Valid Patent Claim covering the Drug Product, a Compound included in a Drug Product or a method of making or using the same in that country; or (b) ten (10) years from the date of First Commercial Sale of the Drug Product in that country, unless the Agreement is terminated at an earlier date pursuant to Sections 11.2, 11.3 or 11.4 hereof.

        11.2 Termination for Cause. In addition to rights of termination which may be granted to either Party under other provisions of this Agreement, either Party may terminate this Agreement upon sixty (60) days prior written notice to the other Party upon the breach by such other Party of any of its material obligations under this Agreement, provided that such termination shall become effective only if the breaching Party shall fail to remedy or cure the breach, or to initiate steps to remedy the same to the other Party's reasonable satisfaction, within such sixty (60) day period.

        11.3 Termination for Bankruptcy. If at any time during the term of this Agreement, an Event of Bankruptcy (as defined below) relating to either Party (the "Bankrupt Party") occurs, the other Party (the "Other Party") shall have, in addition to all other legal and equitable rights and remedies available hereunder, the option to terminate this Agreement upon thirty (30) days' prior written notice to the Bankrupt Party. It is agreed and understood that if the Other Party does not elect to terminate this Agreement upon the occurrence of an Event of Bankruptcy, except as may otherwise be agreed with the trustee or receiver appointed to manage the affairs of the Bankrupt Party, the Other Party shall continue to make all payments required of it under this Agreement as if the Event of Bankruptcy had not occurred, and the Bankrupt Party shall not have the right to terminate any license granted herein. As used above, the term "Event of Bankruptcy" shall mean (a) dissolution, termination of existence, liquidation or business failure of either Party; (b) the appointment of a custodian or receiver for either Party who has not been terminated or dismissed within ninety (90) days of such appointment; (c) the institution by either Party of any proceeding under national, federal or state bankruptcy, reorganization, receivership or other similar laws affecting the rights of creditors generally or the making by either Party of a composition or any assignment or trust mortgage for the benefit of creditors or under any national, federal or state bankruptcy, reorganization, receivership or other

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similar law affecting the rights of creditors generally, which proceeding is not dismissed within ninety (90) days of filing.

        11.4 Termination by MITSUBISHI. MITSUBISHI may terminate this Agreement at any time upon sixty (60) days' prior written notice to VERTEX. MITSUBISHI's obligation of sharing the Core Development Costs incurred by or on behalf of VERTEX or a VERTEX Licensee pursuant to Section 3.3 shall not apply to any non-clinical or clinical studies which Start after the date of such notice and [***] In the event of such termination, MITSUBISHI, at the request of VERTEX, shall assign or otherwise transfer to VERTEX all INDs, Regulatory Approvals, or applications therefor, with respect to a Compound or Drug Product, and VERTEX shall have an irrevocable, worldwide, fully paid-up nonexclusive license, with the right to sublicense, under the MITSUBISHI Technology to develop, manufacture, have manufactured, use, sell, have sold, offer to sell and import Bulk Drug Substance, Compound and Drug Product. In addition, at the request of VERTEX, MITSUBISHI shall assign to VERTEX free of charge all of its or its Affiliates' right, title and interest in and to any trademarks used for a Drug Product in the Territory, and shall execute, or cause its Affiliates to execute, such documents of transfer or assignment and perform, or cause its Affiliates to perform, such acts as may be reasonably necessary to transfer ownership of such trademarks to VERTEX and to enable VERTEX to continue to maintain such trademarks at VERTEX's expense.

        11.5 Effect of Termination. If this Agreement is not terminated at an earlier date, then upon its expiration in accordance with Section 11.1 hereof in a given country MITSUBISHI shall have an irrevocable, fully paid-up nonexclusive license, with the right to sublicense, in such country under the VERTEX Know-How to develop, manufacture, have manufactured, use, sell, have sold, offer to sell and import the Bulk Drug Substance, Compound and Drug Product. If this Agreement is not terminated at an earlier date, then upon its expiration in accordance with Section 11.1 hereof in all countries in the Territory, MITSUBISHI shall have an irrevocable, fully paid-up nonexclusive license, with the right to sublicense, in the Territory under the VERTEX Know-How to develop, manufacture, have manufactured, use, sell, have sold, offer to sell and import the Bulk Drug Substance, Compound and Drug Product. If this Agreement is not terminated at an earlier date, then upon its expiration in accordance with Section 11.1 hereof, VERTEX shall have an irrevocable, worldwide fully paid-up nonexclusive license, with the right to sublicense, under the MITSUBISHI Know-How to develop, manufacture, have manufactured, use, sell, have sold, offer to sell and import the Bulk Drug Substance, Compound and Drug Product. Upon any termination of this Agreement pursuant to Sections 11.2 or 11.3 hereof, MITSUBISHI shall have the right to sell its inventory of Drug Product for a period of six (6) months from the date of termination provided MITSUBISHI complies with the provisions of Sections 6.5 through 6.7 hereof. If the license granted to MITSUBISHI under Section 2.1 hereof is terminated for any reason, at VERTEX's election, following good faith discussion with such sublicensee, any of MITSUBISHI's sublicensees at such time (other than an Affiliate of MITSUBISHI) shall continue to have the rights and license set forth in their sublicense agreements; provided, however, that such sublicensee agrees in writing that VERTEX is entitled to enforce all relevant terms and conditions of such sublicense agreement directly against such sublicensee. Termination of this Agreement for any reason, or expiration of this Agreement, will not affect: (i) obligations, including the obligation for payment of any supply payments or royalties, which have accrued as of the date of termination or expiration, and (ii) rights and obligations which, from the context thereof, are intended to survive termination or expiration of this Agreement including obligations pursuant to Articles VI, VII, IX, X, XI, XII and XIII, to the extent applicable. Any right to terminate this Agreement shall be in addition to and not in lieu of all other rights or remedies that the Party giving notice of termination may have at law or in equity or otherwise.

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ARTICLE XII—INDEMNIFICATION

        12.1 Indemnification by VERTEX. VERTEX shall indemnify and hold MITSUBISHI, its Affiliates, and their employees, officers, directors and agents harmless from and against any loss, damage, action, suit, claim, demand, liability, judgment, cost or expense (a "Loss"), that may be brought, instituted or arise against or be incurred by such Persons to the extent such Loss is based on or arises out of:

provided, however, that the foregoing indemnification and hold harmless obligation shall not apply to any Loss to the extent such Loss is caused by the negligent or willful misconduct of MITSUBISHI, its Affiliates, or their employees, officers, directors, agents, representatives, licensees, sublicensees or subcontractors.

        12.2 Indemnification by MITSUBISHI. MITSUBISHI shall indemnify and hold VERTEX, [***], their Affiliates, and their and their Affiliates' employees, officers, directors and agents, harmless from and against any Loss that may be brought, instituted or arise against or be incurred by such Persons to the extent such Loss is based on or arises out of:

provided, however, that the foregoing indemnification and hold harmless obligation shall not apply to any Loss to the extent such Loss is caused by the negligent or willful misconduct of VERTEX, its Affiliates the VERTEX Licensees or their employees, officers, directors, agents, representatives, sublicensees or subcontractors; and provided further, however, that [***].

        12.3 Claims Procedures. Each Party entitled to be indemnified by the other Party (an "Indemnified Party") pursuant to Section 12.1 or 12.2 hereof shall give notice to the other Party (an "Indemnifying Party") promptly after such Indemnified Party has actual knowledge of any threatened or asserted claim or demand as to which indemnity may be sought, and shall permit the Indemnifying Party to assume the defense of any such claim or demand or any litigation resulting therefrom; provided that:

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        12.4 Limitation of Liability. Except with respect to Third-Party actions, suits, claims or demands subject to indemnification pursuant to Sections 12.1 and 12.2 above, neither Party shall be liable to the other for indirect, incidental, special, punitive, exemplary or consequential damages arising out of or resulting from this Agreement.

        12.5 Insurance. Each Party shall maintain and keep in force for the term of this Agreement insurance that shall be adequate to cover its indemnification obligations hereunder and that is commensurate with the insurance that such Party maintains with respect to other comparable pharmaceutical or biotechnology products it is developing and/or commercializing. It is understood that such insurance shall not be construed to limit a Party's liability with respect to such indemnification obligations. Such insurance shall be placed with a first class insurance carrier with at least a BBB rating by Standard & Poor.


ARTICLE XIII—MISCELLANEOUS PROVISIONS

        13.1 Waiver. No provision of the Agreement may be waived except in writing by both Parties hereto. No failure or delay by either Party hereto in exercising any right or remedy hereunder or under applicable law will operate as a waiver thereof, or a waiver of that or any other right or remedy on any subsequent occasion.

        13.2 Force Majeure. Neither Party will be in breach hereof by reason of its delay in the performance of or failure to perform any of its obligations hereunder, if that delay or failure is caused by fire, floods, embargoes, war, terrorism, insurrections, riots, civil commotions, strikes, lockouts or other labor disturbances, sabotage, acts of God, omissions or delays in acting by any governmental authority, acts of a government or agency thereof or judicial orders or decrees, or any similar cause beyond its control and without its fault or negligence; provided, however, the Party claiming force majeure shall promptly notify the other Party of the existence of such force majeure, shall use its best efforts to avoid or remedy such force majeure and shall continue performance hereunder with the utmost dispatch whenever such force majeure is avoided or remedied.

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        13.3 Registration of License. MITSUBISHI may, at its expense, register the license granted under this Agreement in any country where the use, sale, importation, offer to sell or manufacture of a Drug Product in such country would be covered by a Valid Patent Claim. Upon request by MITSUBISHI, VERTEX agrees promptly to execute any "short form" licenses submitted to it by MITSUBISHI in order to effect the foregoing registration in such country, but such licenses shall in no way alter or affect the obligations of the Parties hereunder.

        13.4 Severability. Should one or more provisions of this Agreement be or become invalid, then the Parties hereto shall attempt to agree upon valid provisions in substitution for the invalid provisions, which in their economic effect come so close to the invalid provisions that it can be reasonably assumed that the Parties would have accepted this Agreement with those new provisions. If the Parties are unable to agree on such valid provisions, the invalidity of such one or more provisions of this Agreement shall nevertheless not affect the validity of the Agreement as a whole, unless the invalid provisions are of such essential importance to this Agreement that it may be reasonably presumed that the Parties would not have entered into this Agreement without the invalid provisions.

        13.5 Government Acts. In the event that any act, regulation, directive, or law of a country or its government, including its departments, agencies or courts, should make impossible or prohibit, restrain, modify or limit any material act or obligation of MITSUBISHI or VERTEX under this Agreement, the Party, if any, not so affected, shall have the right, at its option, to suspend or terminate this Agreement as to such country, if good faith negotiations between the Parties to make such modifications therein as may be necessary to fairly address the impact thereof are not successful after a reasonable period of time in producing mutually acceptable modifications to this Agreement.

        13.6 Government Approvals. Each Party will obtain any government approval required in its country of domicile, or under any treaties or international agreements to which its country of domicile is a signatory, to enable this Agreement to become effective, or to enable any payment hereunder to be made, or any other obligation hereunder to be observed or performed. Each Party will keep the other informed of progress in obtaining any such government approval, and will cooperate with the other Party in any such efforts.

        13.7 Assignment; Successors and Assigns. This Agreement may not be assigned or otherwise transferred by either Party without the prior written consent of the other Party; provided, however, that either Party may assign this Agreement, without the consent of the other Party, (i) to any of its Affiliates, if the assigning Party guarantees the full performance of its Affiliates' obligations hereunder, or (ii) in connection with the transfer or sale of all or substantially all of its assets or business or the assets and business to which this Agreement relates or in the event of its merger or consolidation with another company. To the extent any rights and/or obligations of a Party are held by an Affiliate of such Party then any business transaction, change in control of a majority of the voting power or other event that, in each case, causes such Affiliate to cease to be an Affiliate of the Party, shall be deemed an assignment of the rights and/or obligations held by such former Affiliate and require prior written consent of the other Party. Any purported assignment in contravention of this Section 13.7 shall, at the option of the nonassigning Party, be null and void and of no effect. No assignment shall release either Party from responsibility for the performance of any of its accrued obligations hereunder. This Agreement shall be binding upon and enforceable against the successor to or any permitted assignee of either of the Parties hereto.

        13.8 Export Controls. This Agreement is made subject to any restrictions concerning the export of materials and technology from the United States which may be imposed upon either Party to this Agreement from time to time by the United States Government. In the event any such restrictions are imposed after the Effective Date and thereby render any provisions of this Agreement invalid or unenforceable, the provisions of Section 13.4 of this Agreement shall be applicable to those provisions. MITSUBISHI will not export, directly or indirectly, any VERTEX Technology or any Bulk Drug

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Substance, Compounds or Drug Products utilizing such technology to any countries for which the United States Government or any agency thereof at the time of such export requires an export license or other governmental approval, without first obtaining the written consent to do so from the Department of Commerce or other applicable agency of the United States Government in accordance with the applicable statute or regulation.

        13.9 Affiliates. Each Party may perform its obligations hereunder personally or through one or more Affiliates, although each Party shall nonetheless be solely responsible for the performance of its Affiliates. Neither Party shall permit any of its Affiliates to commit any act (including any act of omission) which such Party is prohibited hereunder from committing directly.

        13.10   Counterparts. This Agreement may be signed in any number of counterparts with the same effect as if the signatures to each counterpart were upon a single instrument, and all such counterparts together shall constitute the same agreement.

        13.11   No Agency. Nothing herein contained shall be deemed to create an agency, joint venture, amalgamation, partnership or similar relationship between MITSUBISHI and VERTEX. Notwithstanding any of the provisions of this Agreement, neither Party shall at any time enter into, incur, or hold itself out to Third Parties as having authority to enter into or incur, on behalf of the other Party, any commitment, expense, or liability whatsoever, and all contracts, expenses and liabilities in connection with or relating to the obligations of each Party under this Agreement shall be made, undertaken, incurred or paid exclusively by that Party on its own behalf, and not as an agent or representative of the other Party.

        13.12   Notice. All communications between the Parties with respect to any of the provisions of this Agreement will be sent to the addresses set out below, or to other addresses as designated by one Party to the other by notice pursuant hereto, by air courier (which shall be deemed received by the other Party on the second (2nd) business day following deposit with the air courier company), or by facsimile transmission, or other electronic means of communication (which shall be deemed received when transmitted), with confirmation by air courier, sent by the close of business on or before the next following business day:

        13.13   Headings. The article, section and paragraph headings are for convenience of reference only and will not be deemed to affect in any way the language of the provisions to which they refer.

        13.14   Entire Agreement. This Agreement, including the Schedules appended hereto, contains the entire understanding of the Parties relating to the matters referred to herein and may only be amended by a written document referencing this Agreement, duly executed on behalf of the respective Parties.

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        13.15   Rules of Construction. The use in this Agreement of the terms "include" or "including" means "include, without limitation" or "including, without limitation," respectively.

[Signature Page Follows]

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        IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed and delivered by their duly authorized representatives as of the day and year first above written.

VERTEX PHARMACEUTICALS INCORPORATED    

By:
 
/s/ Joshua S. Boger
 
 
Name:   Joshua S. Boger, Ph.D.    
Title:   Chairman and Chief Executive Officer    

Witness
 
 

By:
 
/s/ Vicki L. Sato
 
 
Name:   Vicki L. Sato, Ph.D.    
Title:   President    

MITSUBISHI PHARMA CORPORATION
 
 

By:
 
/s/ Teruo Kobori
 
 
Name:   Teruo Kobori    
Title:   President & Chief Executive Officer    

Witness
 
 

By:
 
/s/ Akihiro Tobe
 
 
Name:   Akihiro Tobe, Ph.D.    
Title:   Managing Executive Officer, Division Manager, Strategic Planning Division    

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Schedule 1.33
MITSUBISHI Patents

None as of the Effective Date.

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Schedule 1.49
Territory

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Schedule 1.56
VERTEX Patents

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[***]

VPI/96-11 EA
 
199900388
 
001915
 
INHIBITORS OF SERINE
PROTEASES, PARTICULARLY
HEPATITIS C VIRUS NS3
PROTEASE
 
EURASIAN
PATENT OFFICE
 
ISSUED
 
10/17/1997
 
10/22/01

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Schedule 1.59
VX-905[***]

[***]

37

Schedule 1.60
VX-950

GRAPHIC

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QuickLinks

TABLE OF CONTENTS
LICENSE, DEVELOPMENT AND COMMERCIALIZATION AGREEMENT
INTRODUCTION
ARTICLE I—DEFINITIONS
ARTICLE II—LICENSE
ARTICLE III—DEVELOPMENT
ARTICLE IV — MANUFACTURE AND SUPPLY
ARTICLE V—COMMERCIALIZATION
ARTICLE VI—PAYMENTS
ARTICLE VII—TECHNOLOGY
ARTICLE VIII—REPRESENTATIONS AND WARRANTIES
ARTICLE IX—CONFIDENTIALITY
ARTICLE X—DISPUTE RESOLUTION
ARTICLE XI—TERM AND TERMINATION
ARTICLE XII—INDEMNIFICATION
ARTICLE XIII—MISCELLANEOUS PROVISIONS