Contract analysis

I. EXECUTIVE SUMMARY This memorandum is prepared to inform the negotiation team of prevailing market standards for subject-injury indemnification provisions in sponsor–site master clinical trial agreements ("MCTAs") for Phase III oncology trials. The analysis is undertaken in connection with the forthcoming MCTA between our client, Penterra Pharmaceuticals Corp. ("Penterra" or "Sponsor"), and Veridian Health Research

II. BACKGROUND A. The CLARION Trial Penterafenib (PPC-4871) is a next-generation oral multi-kinase inhibitor being developed by Penterra for the treatment of advanced hepatocellular carcinoma in patients who have received and progressed on at least one prior line of systemic therapy. Hepatocellular carcinoma is the most common form of primary liver cancer and represents a significant unmet medical need, particularly

III. LEGAL FRAMEWORK GOVERNING SUBJECT-INJURY INDEMNIFICATION A. No Federal Statutory Mandate for Subject-Injury Compensation Unlike certain European Union member states, which have adopted legislative frameworks mandating compensation for subjects injured in clinical trials (e.g., the EU Clinical Trials Regulation (EU) No. 536/2014, which requires sponsors to implement arrangements for compensation), there is no fed

IV. PREVAILING MARKET STANDARDS FOR SPONSOR INDEMNIFICATION OF SITES AND INVESTIGATORS A. Scope of Sponsor Indemnification Obligation Based on our review of comparable agreements in the Calderwood & Harkness proprietary clinical trial agreement database and publicly available SEC filings in which clinical trial agreements are filed as material contracts, the prevailing market standard for the scope of sponsor indemni

V. CARVE-OUTS FROM SPONSOR INDEMNIFICATION A. Investigator Negligence or Willful Misconduct The most fundamental carve-out from sponsor indemnification is the exclusion of claims arising from the negligence or willful misconduct of the site, the investigator, or site personnel. This carve-out is nearly universal in clinical trial agreements — indeed, it is present in every one of the comparable agreements reviewed in

VI. RECIPROCAL INDEMNIFICATION — SITE/INVESTIGATOR INDEMNIFICATION OF SPONSOR A. Scope Just as Penterra will indemnify Veridian and the Indemnified Parties for specified categories of claims, the MCTA should include reciprocal indemnification obligations running from Veridian and each participating institution to Penterra. The scope of this reciprocal indemnification should cover claims arising from: (a) The negligen

VII. NOTICE REQUIREMENTS A. Timing of Notice Prompt notice of claims is an essential component of any indemnification framework, as it enables the indemnifying party to investigate the claim, preserve evidence, engage counsel, and take other steps to protect its interests. The market standard for clinical trial agreements requires the indemnified party to provide written notice to the indemnifying party within a spec

VIII. DEFENSE AND SETTLEMENT PROCEDURES A. Control of Defense The MCTA should include provisions governing the defense of indemnified claims — i.e., the procedures by which claims covered by the indemnification framework are investigated, defended, and resolved. The standard approach, which we recommend, is as follows: The indemnifying party has the right (but not the obligation) to assume control of the defense of a

IX. INTERACTION WITH INSURANCE REQUIREMENTS A. Sponsor Insurance Penterra maintains clinical trial liability insurance through Briarcliff Mutual Insurance Company under Policy No. BM-CTL-2023-04182. The key terms of the current policy are as follows: The MCTA should provide that Veridian and each participating site institution will be named as additional insureds under the Briarcliff policy for the duration of the CL

X. SPECIFIC CONSIDERATIONS FOR THE CLARION TRIAL A. Oncology Therapeutic Area Risk Profile The CLARION trial presents a risk profile that warrants particularly robust indemnification provisions. Several factors contribute to this elevat