PRIVILEGED & CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP 280 Park Avenue, 34th Floor New York, New York 10017
MEMORANDUM
March 20, 2023
TO: Miriam Calloway, Partner, Healthcare & Life Sciences Practice Group
FROM: Joel Strauss, Partner (Billing Partner), Healthcare & Life Sciences Practice Group
RE: Staffing & Budget Estimate — Penterra Pharmaceuticals Corp. / Veridian Health Research Network, Inc. Master Clinical Trial Agreement and Ancillary Agreements
MATTER NUMBER: 1018-00004
CLIENT: Penterra Pharmaceuticals Corp.
This memorandum is prepared in connection with the provision of legal services and is protected by attorney-client privilege and the work product doctrine. This document contains confidential attorney work product prepared in anticipation of the provision of legal advice. It should not be disclosed to any third party without the express written consent of Calderwood & Harkness LLP. Distribution is limited to authorized personnel as set forth in Section VII hereof.
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I. EXECUTIVE SUMMARY
The purpose of this memorandum is to set forth the projected staffing plan, estimated attorney hours, and anticipated costs for Calderwood & Harkness LLP's ("C&H" or the "Firm") representation of Penterra Pharmaceuticals Corp. ("Penterra" or "PPC") in the negotiation, drafting, and closing of a Master Clinical Trial Agreement ("MCTA") and related site-network agreements with Veridian Health Research Network, Inc. ("Veridian"). This memorandum is intended to provide the responsible partner with a comprehensive overview of the engagement team, work phases, budgetary estimates, and key assumptions underlying the projections so that staffing and billing expectations may be aligned with client expectations at the outset of the matter.
Scope of Representation. The Firm's engagement encompasses the full transactional lifecycle of the MCTA and all ancillary documentation. Specifically, the scope of representation includes: (i) the drafting, negotiation, and execution of the MCTA between Penterra and Veridian; (ii) the preparation and execution of site-specific joinder agreements for thirty-eight (38) clinical trial sites located across fourteen (14) states; (iii) the drafting and negotiation of investigator agreements with the Global Principal Investigator and Co-Principal Investigator; (iv) the preparation and negotiation of an intellectual Property Side Letter addressing data ownership and licensing rights; (v) insurance coordination with Penterra's clinical trial liability insurer, Briarcliff Mutual Insurance Company, and with Veridian with respect to site-level insurance certificates; (vi) a comprehensive regulatory compliance review encompassing the Anti-Kickback Statute, the Physician Payments Sunshine Act, HIPAA research authorization requirements, IRB reliance structures, and applicable FDA regulations under 21 CFR Parts 11, 50, 54, 56, and 312; and (vii) the preparation of all closing deliverables, including execution documents, closing certificates, closing binders, and post-closing memoranda.
Transaction Overview. The total deal value of the underlying transaction is approximately $80,000,000, covering site fees, per-patient milestone payments, investigator grants, and operational costs over the projected forty-two (42) month enrollment period for Protocol PPC-4871-III, known as the CLARION trial. The CLARION trial is a Phase III, multi-center, randomized, double-blind, placebo-controlled study evaluating the efficacy and safety of penterafenib (PPC-4871), an oral multi-kinase inhibitor, in adult patients with advanced hepatocellular carcinoma ("HCC"). Penterra holds IND 157823 for penterafenib, and the CLARION trial is anticipated to enroll approximately 1,200 subjects across the Veridian network.
Counterparty Counsel. Veridian has retained Whitmore, Jansen & Callahan LLP ("WJC"), based in Philadelphia, Pennsylvania, as its outside counsel for this transaction. The lead partner at WJC is Allison Whitmore. We have previously negotiated with WJC on clinical trial matters and anticipate a professional and commercially reasonable, though at times aggressive, negotiation posture on key terms including indemnification, insurance, and publication rights.
Estimated Project Duration. The estimated duration of the engagement is approximately four (4) months from the matter opening date of March 20, 2023, through the projected closing and effective date in mid-July 2023. The current target closing date is July 18, 2023, with the MCTA execution anticipated on June 28, 2023, and conditions precedent satisfaction targeted for July 5, 2023. The target date for first patient in ("FPI") under the CLARION protocol is August 14, 2023, which creates meaningful time pressure on the transactional timeline.
II. ENGAGEMENT TEAM — STAFFING ASSIGNMENTS
The engagement team has been structured to provide Penterra with senior-level strategic guidance while ensuring cost-effective utilization of associate and paralegal resources for the substantial drafting, research, and document management requirements of this matter. The staffing assignments are set forth below.
A. Partner-Level Staffing
1. Miriam Calloway — Responsible Partner
Miriam Calloway will serve as the Responsible Partner on this engagement, providing overall matter supervision, strategic direction, and serving as the lead negotiator on key commercial and indemnification terms. As the head of the Healthcare & Life Sciences Practice Group's clinical trial contracting sub-practice, Ms. Calloway brings extensive experience in multi-site clinical trial agreements of this scale and complexity, having led more than forty such transactions over the past decade, including several involving Veridian and its affiliated sites.
Ms. Calloway's responsibilities on this matter will include:
• Overall supervision of all work product produced by the engagement team;
• Setting and directing the negotiation strategy for the MCTA and all ancillary agreements;
• Serving as the lead negotiator on key commercial terms, including the indemnification structure, insurance requirements, termination provisions, and publication rights framework;
• Attending in-person negotiation sessions with Veridian and WJC;
• Serving as the primary interface with Penterra's VP & General Counsel, Nathaniel Briggs, Esq., and Associate General Counsel, Clinical Affairs, Rebecca Liang, Esq., on all strategic and substantive matters;
• Final review and approval of all major drafts before circulation to opposing counsel; and
• Final review of execution documents and closing deliverables.
Ms. Calloway's involvement is expected to be heaviest during the initial strategy phase (Phase 1), the active negotiation rounds (Phase 3), and the pre-closing review (Phase 7). During the primary drafting phases, her involvement will be concentrated on review and revision rather than original drafting, consistent with an efficient allocation of partner time.
2. Joel Strauss — Billing Partner
Joel Strauss will serve as the Billing Partner on this engagement, with responsibility for budget oversight, fee arrangement compliance, and client billing coordination. Mr. Strauss's involvement will be primarily administrative in nature, ensuring that the Firm's invoicing practices comply with the terms of the engagement letter and Penterra's outside counsel billing guidelines.
Mr. Strauss's responsibilities on this matter will include:
• Oversight of the matter budget and monitoring of actual hours against projected estimates on a bi-weekly basis;
• Periodic review of major deliverables as necessary to maintain familiarity with the matter for billing oversight purposes;
• Availability for escalation on billing, resourcing, or staffing matters that may arise during the course of the engagement;
• Serving as the liaison with Penterra's Director, Clinical Contracts, Samantha Novak, on all invoicing matters, including submission of monthly invoices, resolution of billing inquiries, and coordination on any alternative fee arrangement components; and
• Conducting the midpoint budget review and preparing any revised budget estimates as warranted.
Mr. Strauss's expected time commitment on this matter is minimal, limited to the initial matter opening and billing setup during Phase 1 and periodic administrative oversight thereafter.
B. Associate-Level Staffing
1. Sean Morrissey — Lead Associate
Sean Morrissey, a sixth-year associate in the Healthcare & Life Sciences Practice Group, will serve as the Lead Associate on this matter. Mr. Morrissey has substantial experience in clinical trial agreements, having served as lead associate on fourteen multi-site MCTA transactions over the past three years, including the Penterra/Solaris Health Sciences MCTA for Protocol PPC-3219-II (completed in 2022). His familiarity with Penterra's contracting preferences and corporate requirements will contribute to efficiency in the drafting and negotiation process.
Mr. Morrissey's responsibilities on this matter will include:
• Serving as the primary drafter of the MCTA and all substantive exhibits (Exhibits A through K) and Schedule 1;
• Serving as the principal point of contact for day-to-day negotiations with David Kesselman, the associate at WJC responsible for this matter;
• Preparing redline analyses and comparison memoranda for all draft iterations, including detailed annotations of Veridian/WJC markup positions and recommended responses;
• Preparing negotiation strategy memoranda and session preparation materials for Ms. Calloway's review in advance of negotiation calls and in-person sessions;
• Drafting the indemnification term sheet and coordinating all insurance-related correspondence;
• Drafting the investigator agreements, including the Principal Investigator Agreement for Dr. Catherine Aldridge (Global PI, Graystone University Medical Center) and the Co-Principal Investigator Agreement for Dr. Howard Matsuoka (Lakemont Medical Center);
• Preparing all closing certificates, secretary's certificates, and officer's certificates;
• Coordinating with Penterra's clinical operations team, specifically Jennifer Holt, VP, Clinical Operations, and Penterra's contract research organization, Meridian Contract Research Organization, Inc. ("Meridian CRO"), on protocol and operational provisions to be incorporated into the MCTA; and
• Drafting the IP Side Letter and related data ownership memoranda.
Mr. Morrissey will carry the highest hour load on this engagement and will be involved in all seven phases of the matter.
2. Christopher Aiken — Working Associate
Christopher Aiken, a fourth-year associate in the Healthcare & Life Sciences Practice Group, will serve as the Working Associate on this matter. Mr. Aiken has developed particular expertise in FDA regulatory compliance matters and clinical trial site network structures, having recently completed a secondment to Penterra's Clinical Legal Affairs department (October–December 2022), which provides him with valuable institutional knowledge of Penterra's regulatory compliance framework and internal processes.
Mr. Aiken's responsibilities on this matter will include:
• Supporting research and drafting across all phases of the engagement;
• Preparing regulatory compliance memoranda, including analyses of Anti-Kickback Statute safe harbor applicability, Physician Payments Sunshine Act reporting obligations, and HIPAA research authorization requirements;
• Preparing an insurance adequacy analysis evaluating the sufficiency of the proposed clinical trial liability insurance structure;
• Conducting comparative benchmarking of indemnification structures against industry standards for Phase III oncology trials;
• Drafting site-specific joinder agreements, including the preparation of a standardized template and representative executed versions for the five lead sites: Graystone University Medical Center, Lakemont Medical Center, Haverford Regional Medical Center, Cedar Falls University Hospital, and Weston Memorial Health System;
• Preparing the closing checklist, closing binder index, and post-closing memorandum;
• Conducting research on New York governing law implications for multi-state clinical trial agreements, IRB reliance and central IRB structures under 45 CFR Part 46 and the 2018 Common Rule, and the HIPAA research authorization framework;
• Providing preparation guidance for FDA Form 1572 (Statement of Investigator) and financial disclosure certification templates under 21 CFR Part 54;
• Preparing tracked-changes redlines between successive draft versions for internal and external circulation; and
• Maintaining the open issues tracker and managing the resolution log throughout the negotiation process.
C. Additional Support (As Needed)
The engagement team as described above is expected to be sufficient to handle the full scope of this matter. The following additional support arrangements are noted:
FDA Regulatory Counsel. C&H will coordinate with Castleton & Hargrove LLP, a specialized FDA regulatory boutique, on matters relating to IND 157823 and clinical hold risk assessment. The primary contact at Castleton & Hargrove is Dr. Priya Sundaram, Esq. Castleton & Hargrove's fees will be billed separately under their own engagement letter with Penterra and are not included in the budget estimates set forth in this memorandum. Coordination between C&H and Castleton & Hargrove is expected to involve periodic conference calls and review of any FDA regulatory provisions incorporated into the MCTA, but the volume of such coordination is expected to be modest.
Paralegal Support. The Firm anticipates utilizing paralegal support from the Healthcare & Life Sciences Practice Group for closing binder assembly, document management, signature page coordination, and administrative tasks throughout the engagement. Paralegal hours are estimated separately in the phase-by-phase breakdown below.
Escalation Plan. Based on the current assessment of transaction complexity, no additional associate staffing is anticipated. However, an escalation plan is in place in the event that transaction complexity increases beyond current projections — for example, if the number of negotiation rounds exceeds three, if significant FDA regulatory issues arise that expand the scope of compliance analysis, or if the number of participating sites increases substantially beyond thirty-eight. In such circumstances, Mr. Strauss and Ms. Calloway will confer regarding the addition of a third associate or the engagement of a contract attorney for document review and site agreement preparation tasks.
III. MATTER PHASES AND ESTIMATED HOURS
The engagement has been organized into seven distinct phases, several of which will run concurrently during the later stages of the project. The phase structure, scope of work, and estimated hours for each timekeeper are set forth below. All date estimates are approximate and may shift based on the pace of negotiations and counterparty responsiveness.
A. Phase 1: Preliminary Analysis & Strategy
Timeline: Weeks 1–3 (approximately March 20 – April 7, 2023)
Scope of Work:
This initial phase encompasses the administrative and substantive foundation-laying required to position the engagement team for efficient drafting and negotiation. The work during this phase is critical to identifying key legal and commercial issues, establishing the Firm's negotiation strategy, and ensuring alignment with Penterra's business objectives and risk tolerance.
Specific tasks during Phase 1 include the following:
• Conflict Check and Matter Opening. Completion of the Firm's standard conflicts clearance process for all parties and related entities, including Veridian, all thirty-eight participating sites and their affiliated institutions, the named investigators, WJC, Meridian CRO, and Briarcliff Mutual Insurance Company. Opening of the matter file in the Firm's matter management system and assignment of the matter number 1018-00004.
• Engagement Letter and Retainer Agreement Processing. Preparation and circulation of the engagement letter to Penterra's legal department, including confirmation of the applicable hourly rates, billing arrangements, outside counsel guidelines compliance, and retainer terms. Coordination with Samantha Novak on purchase order issuance and billing code requirements.
• Review of Background Materials. Comprehensive review and analysis of the following background documents provided by Penterra:
(a) Draft Protocol PPC-4871-III (CLARION trial), including the study synopsis, investigational plan, statistical analysis plan overview, and study budget framework;
(b) Veridian term sheet dated February 28, 2023, setting forth preliminary commercial terms proposed by Veridian for the MCTA;
(c) Briarcliff Mutual Insurance Company clinical trial liability insurance policy (Policy No. BM-CTL-2023-04182), including all endorsements, exclusions, and sublimit schedules;
(d) Penterra's standard form clinical trial agreement and internal contracting playbook;
(e) Organizational and governance documents for the Veridian Health Research Network, including its membership agreement structure and site affiliation terms; and
(f) Prior correspondence between Penterra and Veridian regarding the CLARION trial, including letters of intent and preliminary budget discussions.
• Preliminary Issues Memorandum. Preparation of a comprehensive memorandum identifying the key legal, commercial, and regulatory issues that will require focused attention during drafting and negotiation. Anticipated key issues include:
(a) Subject-injury indemnification — scope, caps, trigger mechanisms, and allocation of responsibility between sponsor and site;
(b) Insurance adequacy — evaluation of proposed coverage levels against industry benchmarks and Veridian's requirements;
(c) intellectual property and data ownership — allocation of rights to trial data, biological samples, and any inventions arising from the trial;
(d) Publication rights — balancing Penterra's interest in controlling the timing and content of publications with academic investigators' scholarly interests and institutional policies;
(e) Termination provisions — wind-down procedures, payment obligations on termination, and subject transition requirements;
(f) Anti-Kickback Statute compliance — fair market value analysis of investigator compensation and safe harbor applicability;
(g) Physician Payments Sunshine Act — reporting obligations for payments and transfers of value to investigators;
(h) HIPAA compliance — research authorization framework, limited data set provisions, and de-identification standards;
(i) 21 CFR Part 54 financial disclosure — certification requirements and ongoing reporting obligations; and
(j) Governing law — implications of New York governing law for a multi-state clinical trial agreement.
• Research Memoranda. Preparation of targeted research memoranda on the following topics: (i) subject-injury indemnification standards in Phase III oncology clinical trials, including a survey of peer sponsor practices and industry benchmarking data; (ii) New York governing law implications for clinical trial agreements, including enforceability of arbitration clauses, limitation of liability provisions, and indemnification structures; and (iii) clinical trial insurance requirements analysis, including a comparison of Penterra's existing coverage against Veridian's anticipated requirements and industry norms for Phase III trials of this size.
• Regulatory Compliance Checklist. Preparation of a comprehensive regulatory compliance checklist covering all applicable federal and state regulatory requirements for the CLARION trial, organized by regulatory framework (FDA, HHS, CMS, and applicable state laws).
• Initial Client Strategy Call. Scheduling and conduct of an initial strategy call with the Penterra engagement team, including Nathaniel Briggs, Esq. (VP & General Counsel), Rebecca Liang, Esq. (Associate General Counsel, Clinical Affairs), Jennifer Holt (VP, Clinical Operations), and Dr. Marcus Yun (VP, Clinical Development). This call will cover the Firm's preliminary issue assessment, Penterra's business objectives and risk tolerance, authority parameters for key negotiation terms, and the proposed timeline and approach.
Estimated Hours:
B. Phase 2: Initial Drafting
Timeline: Weeks 3–4 (approximately April 1 – April 7, 2023)
Scope of Work:
Phase 2 is the primary drafting phase, during which the engagement team will prepare the complete First Draft of the MCTA and all associated exhibits and schedules for circulation to WJC. The MCTA will be drafted from Penterra's perspective, using the Firm's precedent templates as a starting point and incorporating the specific terms of the CLARION trial as reflected in the protocol and the Veridian term sheet. The drafting will also reflect the strategic decisions made during Phase 1 regarding Penterra's positions on key negotiation issues.
Specific tasks during Phase 2 include the following:
• First Draft MCTA. Drafting of the complete Master Clinical Trial Agreement, consisting of the main body of the agreement and all articles. The MCTA will address the following substantive areas:
(a) Scope of Services. Definition of the clinical trial services to be provided by Veridian and its participating sites, including enrollment targets, study procedures, data collection, and reporting obligations, all as specified in Protocol PPC-4871-III.
(b) Term. The initial term of the MCTA, co-extensive with the projected enrollment period of forty-two (42) months, with provisions for extension upon mutual agreement if enrollment targets are not met.
(c) Budget and Payment. The total budget of $80,000,000, structured as follows: per-patient milestone payments of $13,000 per milestone, payable in four equal installments of $3,250 upon achievement of each of four defined milestones (screening/enrollment, randomization, completion of treatment, and end-of-study visit), applicable to each of the projected 1,200 subjects; site start-up fees of $75,000 per site (38 sites), payable in two installments of $37,500 each (first installment upon IRB approval, second installment upon site activation); and investigator grants as separately detailed in the investigator agreements.
(d) Indemnification. A comprehensive indemnification framework providing for: (i) sponsor indemnification of sites and investigators for subject injuries arising from the investigational product or protocol-mandated procedures, subject to a per-subject cap of $500,000 and an aggregate cap of $15,000,000; (ii) reciprocal site indemnification of the sponsor for losses arising from site negligence or non-compliance, subject to a limit of $5,000,000 per site per occurrence and $20,000,000 in the aggregate; and (iii) standard carve-outs for willful misconduct, gross negligence, and non-compliance with the protocol.
(e) Insurance. Requirements for both sponsor and site insurance: sponsor insurance of $25,000,000 per occurrence and $75,000,000 in the aggregate, with a subject-injury sublimit of $10,000,000 per occurrence and $50,000,000 in the aggregate; site insurance of $5,000,000 per occurrence and $10,000,000 in the aggregate.
(f) intellectual Property and Data Ownership. Penterra's exclusive ownership of all trial data, case report forms, and study results, with limited license-back to sites and investigators for internal research and academic purposes.
(g) Publication Rights. A structured publication rights framework providing investigators with the right to publish study results subject to a sixty (60) day review period for accuracy and a ninety (90) day delay for patent protection purposes.
(h) Confidentiality. Mutual confidentiality obligations with a ten (10) year term from the date of disclosure, subject to customary exceptions for publicly available information, independently developed information, and disclosures required by law or regulation.
(i) Termination. Provisions for termination by either party for material breach (with a forty-five (45) day cure period), for regulatory reasons, or for convenience (with a one hundred twenty (120) day wind-down period), including detailed provisions for wind-down activities, subject transition, and payment obligations upon termination.
(j) Dispute Resolution. New York governing law, with a tiered dispute resolution mechanism consisting of a thirty (30) day negotiation period, followed by sixty (60) day mediation, followed by binding arbitration under the rules of the American Arbitration Association.
(k) Safety Reporting. Comprehensive safety reporting obligations, including twenty-four (24) hour reporting of serious adverse events ("SAEs"), seven (7) day reporting for fatal and life-threatening IND safety reports, and fifteen (15) day reporting for all other IND safety reports, consistent with 21 CFR § 312.32.
(l) Regulatory Representations. Representations and warranties regarding regulatory compliance, including representations regarding investigator qualifications, IRB approvals, informed consent procedures, 21 CFR Part 54 financial disclosures, and debarment status under 21 USC § 335a.
• Exhibits and Schedules. Drafting of all Exhibits (A through K) and Schedule 1 in shell or complete form, as applicable. These include the Protocol Synopsis (Exhibit A), Study Budget (Exhibit B), Form of Individual Site Agreement (Exhibit C), Insurance Requirements (Exhibit D), Form of Certificate of Insurance (Exhibit E), Indemnification Procedures (Exhibit F), Publication Rights Procedures (Exhibit G), Data Ownership and Transfer Provisions (Exhibit H), Form of Investigator Undertaking (Exhibit I), Safety Reporting Requirements (Exhibit J), Regulatory Compliance Requirements (Exhibit K), and the Site List and Enrollment Allocation (Schedule 1).
• Form of Individual Site Agreement. Preparation of the template Individual Site Agreement (joinder form) to be attached as Exhibit C, designed for execution by each of the thirty-eight participating sites to incorporate them into the MCTA framework.
• Form of Investigator Undertaking. Preparation of the template Investigator Undertaking to be attached as Exhibit I, establishing the obligations of individual investigators participating in the CLARION trial.
• Internal Review. Ms. Calloway will conduct a thorough review of the complete First Draft package, providing comments and revisions before the draft is approved for circulation to WJC.
• Transmittal Letter. Preparation of a transmittal letter to WJC, dated April 7, 2023, enclosing the First Draft MCTA and all exhibits, and proposing a timeline for the first round of comments.
Estimated Hours:
C. Phase 3: Negotiation Rounds
Timeline: Weeks 6–12 (approximately April 28 – June 23, 2023)
Scope of Work:
Phase 3 encompasses the substantive negotiation of the MCTA and represents the most time-intensive phase of the engagement. Based on our experience with WJC and transactions of this complexity, we anticipate three full negotiation rounds, culminating in an in-person negotiation session and final resolution of open items. The three rounds are described in detail below.
Round 1: Response to Veridian Initial Markup (received April 28, 2023)
Following WJC's review of the First Draft, we anticipate receiving Veridian's initial markup approximately three weeks after circulation, on or about April 28, 2023. The engagement team will undertake the following tasks upon receipt of the initial markup:
• Internal Redline Review Memorandum. Preparation of a comprehensive memorandum analyzing all changes proposed by Veridian/WJC, organized by article and exhibit, with an assessment of the significance and acceptability of each change from Penterra's perspective. Based on our experience with WJC and initial discussions with Veridian, we anticipate that the following will be among the key issues raised in the initial markup:
(a) Uncapped subject-injury indemnification. We expect Veridian to push for the elimination of the per-subject and aggregate caps on sponsor indemnification for subject injuries, consistent with WJC's historical negotiating position in similar transactions.
(b) Increased insurance requirements. We anticipate a demand for $50,000,000 per-occurrence sponsor insurance coverage, substantially above the $25,000,000 per occurrence proposed in the First Draft.
(c) Front-loaded payment structure. Veridian may seek to restructure the milestone-based payment schedule in favor of larger upfront or early-stage payments to cover site activation and staffing costs.
(d) Expanded publication rights. We expect pressure to reduce the review period and eliminate or shorten the patent delay period, and potentially to add provisions for multi-site publications without sponsor review.
• Negotiation Strategy Memorandum. Preparation of a strategy memorandum for Ms. Calloway's review, setting forth recommended responses to each of Veridian's positions, identification of items where Penterra may concede or compromise, and recommended fallback positions on key terms.
• Client Calls. Conference calls with the Penterra legal team (Nathaniel Briggs, Rebecca Liang) and clinical operations (Jennifer Holt) to discuss Veridian's positions, confirm Penterra's authority parameters, and align on the response strategy.
• Indemnification Term Sheet. Preparation and circulation of a standalone Indemnification Term Sheet, dated May 5, 2023, designed to isolate and facilitate resolution of the indemnification and insurance issues, which are expected to be the most heavily negotiated terms.
Round 2: Second Draft and Second Markup (May 5 – June 2, 2023)
Following the development of the response strategy and the circulation of the Indemnification Term Sheet, the engagement team will prepare the Second Draft of the MCTA.
• Second Draft MCTA. Drafting of the Second Draft of the MCTA, incorporating Penterra's responses to the initial markup, agreed changes, and the positions set forth in the Indemnification Term Sheet. The Second Draft will reflect Penterra's compromises on non-critical issues while maintaining firm positions on indemnification caps, insurance levels, data ownership, and governing law.
• Redline Preparation. Preparation of a detailed redline comparing the Second Draft against the First Draft for internal review, and a clean redline comparing the Second Draft against the initial markup for transmittal to WJC.
• Transmittal to WJC. Transmittal of the Second Draft and accompanying redline to WJC on or about May 19, 2023, with a cover letter summarizing Penterra's positions on key open issues and the rationale for Penterra's negotiating posture.
• Review of Second Markup. Upon receipt of Veridian/WJC's second markup, anticipated on or about June 2, 2023, preparation of a memorandum identifying the remaining open issues and assessing the trajectory of the negotiation. This memorandum will include a gap analysis on each key term and a recommendation regarding the necessity and timing of an in-person negotiation session.
Round 3: In-Person Negotiation and Resolution (June 1 – June 23, 2023)
Based on the anticipated status of negotiations following the second markup, we expect that an in-person negotiation session will be necessary to resolve the remaining open issues and bring the transaction to a final agreed form.
• Scheduling and Preparation. Scheduling of the in-person negotiation session at WJC's offices, with preparation of a comprehensive preparation memorandum including talking points, fallback positions, and authority parameters for each remaining open issue. The preparation memorandum will include a "decision tree" for each key issue, identifying Penterra's preferred outcome, acceptable compromises, and walk-away positions.
• In-Person Negotiation Session. The in-person negotiation session is scheduled for June 9, 2023, at WJC's offices at 1500 Market Street, Suite 3200, Philadelphia, Pennsylvania. The following individuals are expected to attend:
Calderwood & Harkness LLP (for Penterra): Miriam Calloway (Partner), Sean Morrissey (Lead Associate)
Penterra Pharmaceuticals Corp.: Rebecca Liang, Esq. (Associate General Counsel, Clinical Affairs)
Whitmore, Jansen & Callahan LLP (for Veridian): Allison Whitmore (Partner), David Kesselman (Associate)
Veridian Health Research Network, Inc.: Gregory Callahan (Senior Vice President, Legal & Compliance), Patricia Dunne (Vice President, Site Contracts & Network Operations)
• Negotiation Session Summary. Preparation of a detailed negotiation session summary and action items memorandum, dated June 10, 2023, documenting all agreements reached, concessions made, and items requiring further work or client approval.
• Client Update Correspondence. Preparation of a client update to Nathaniel Briggs and Rebecca Liang summarizing the results of the in-person session and outlining the remaining path to execution.
• Near-Final Draft. Preparation and circulation of a near-final draft of the MCTA, dated June 16, 2023, incorporating all agreements reached during the in-person session and the Firm's proposed language for any items that were agreed in principle but not fully resolved during the session.
• Final Resolution of Remaining Items. Resolution of remaining open items (anticipated to include termination wind-down payment obligations and subject transition procedures) via telephone conferences on June 19–20, 2023, between Ms. Calloway and Allison Whitmore, with Mr. Morrissey and Mr. Kesselman handling the documentation of agreed positions.
• Remaining Issues Resolution Memorandum. Preparation of a memorandum documenting the resolution of all remaining issues and confirming that no open items remain.
• Final Agreed Draft. Preparation of the final agreed draft of the MCTA, dated June 23, 2023, reflecting the resolution of all open items and ready for progression to the execution process.
• Final Redline. Preparation of a redline comparing the final agreed draft against the near-final draft, for internal and client confirmation purposes.
• Publication Rights Correspondence. Preparation of a separate letter to WJC addressing the academic freedom compromise on publication rights, memorializing the parties' agreement on multi-center publication procedures and the protocol for handling disagreements regarding the scope or content of proposed publications.
Estimated Hours:
D. Phase 4: Ancillary Agreements & Investigator Documents
Timeline: Weeks 10–14 (concurrent with Phases 3 and 5; approximately June – July 2023)
Scope of Work:
Phase 4 encompasses the preparation of all ancillary agreements and investigator-related documents that will be executed concurrently with or shortly after the MCTA. This phase also includes the preparation of several regulatory compliance memoranda that will inform both the ancillary agreement drafting and Penterra's ongoing compliance obligations under the CLARION trial. This phase runs concurrently with the later stages of Phase 3 and with Phase 5.
Specific tasks during Phase 4 include the following:
• IP Side Letter. Drafting and negotiation of an intellectual Property Side Letter to be executed concurrently with the MCTA on June 28, 2023. The IP Side Letter will supplement the data ownership provisions of the MCTA by addressing: (i) ownership of pre-existing intellectual property contributed by each party; (ii) ownership and licensing of inventions and discoveries arising from the trial; (iii) rights to biological samples and biomarker data; and (iv) Penterra's rights to use site-generated data in regulatory submissions and future clinical development programs.
• Data Ownership and Licensing Internal Memorandum. Preparation of an internal memorandum analyzing the data ownership and licensing structure established by the MCTA and IP Side Letter, identifying any potential issues with Penterra's planned use of trial data for subsequent regulatory submissions and lifecycle management strategies.
• Principal Investigator Agreement. Drafting of the Principal Investigator Agreement for Dr. Catherine Aldridge, who will serve as the Global Principal Investigator for the CLARION trial. Dr. Aldridge is affiliated with Graystone University Medical Center in Philadelphia, Pennsylvania. The agreement will address Dr. Aldridge's responsibilities as Global PI, compensation terms, confidentiality obligations, publication rights (consistent with the MCTA framework), intellectual property assignment, and regulatory compliance obligations.
• Co-Principal Investigator Agreement. Drafting of the Co-Principal Investigator Agreement for Dr. Howard Matsuoka, who will serve as Co-Principal Investigator at Lakemont Medical Center in Chicago, Illinois. The agreement will follow a similar structure to the Global PI Agreement, with modifications appropriate to the Co-PI role and scope of responsibilities.
• Form 1572 Preparation Guidance Memorandum. Preparation of a guidance memorandum for Penterra's clinical operations team regarding the completion of FDA Form 1572 (Statement of Investigator) by each investigator at each participating site, including a summary of applicable requirements under 21 CFR § 312.53 and recommended procedures for Penterra's review and retention of completed forms.
• Financial Disclosure Certification Template. Preparation of a template financial disclosure certification form for use by investigators and sub-investigators in compliance with 21 CFR Part 54 (Financial Disclosure by Clinical Investigators), including instructions for completion and a summary of applicable reporting thresholds and covered relationships.
• Fair Market Value Memorandum. Preparation of a memorandum analyzing the fair market value of investigator compensation under the CLARION trial for Anti-Kickback Statute compliance purposes. The CLARION trial provides for investigator compensation of approximately $52,000 per subject and total investigator grants of approximately $1,500,000. The memorandum will evaluate these amounts against published benchmarking data, the Firm's proprietary database of comparable transactions, and applicable OIG guidance to confirm that the compensation structure falls within the fair market value range for investigators of comparable qualifications performing comparable services in Phase III oncology trials.
• Open Payments/Sunshine Act Compliance Memorandum. Preparation of a memorandum analyzing Penterra's reporting obligations under the Physician Payments Sunshine Act (42 USC § 1320a-7h) with respect to payments and transfers of value to investigators participating in the CLARION trial, including identification of reportable categories, applicable exclusions, and recommended internal tracking procedures.
• Anti-Kickback Statute Compliance Analysis. Preparation of a comprehensive analysis of the CLARION trial's payment structure under the federal Anti-Kickback Statute (42 USC § 1320a-7b(b)), including evaluation of the applicability of the personal services and management contracts safe harbor (42 CFR § 1001.952(d)) and the fair market value safe harbor, and identification of any structural modifications necessary to ensure compliance.
• HIPAA Research Authorization Framework Memorandum. Preparation of a memorandum analyzing the HIPAA research authorization framework as it applies to the CLARION trial, including the requirements for individual research authorizations under 45 CFR § 164.508(c), the availability of waivers of authorization under 45 CFR § 164.512(i), and the implications of the MCTA's data transfer provisions for HIPAA compliance.
• IRB Reliance/Central IRB Structure Memorandum. Preparation of a memorandum analyzing the IRB reliance framework for the CLARION trial. The proposed structure contemplates Graystone University Medical Center's IRB (IRB00012847) serving as the IRB of record for the lead site, with the Veridian Central IRB serving as the reviewing IRB for all non-Pennsylvania sites pursuant to IRB authorization agreements (IAAs). The memorandum will analyze the regulatory basis for this reliance structure under the 2018 Common Rule (45 CFR § 46.114) and identify any state-law requirements that may preclude reliance in particular jurisdictions.
Estimated Hours:
E. Phase 5: Insurance Coordination
Timeline: Weeks 8–15 (concurrent with Phases 3, 4, and 6; approximately May – July 2023)
Scope of Work:
Phase 5 encompasses all insurance-related work necessary to satisfy the MCTA's insurance requirements and to confirm the adequacy of the parties' respective coverage. Insurance coordination is a recurring area of focus in multi-site clinical trial agreements and often requires iterative exchanges with both the insurer and opposing counsel. This phase runs concurrently with Phases 3, 4, and 6.
Specific tasks during Phase 5 include the following:
• Letter to Briarcliff Mutual Insurance Company. Preparation of a letter to Karen Tremblay, Vice President, Life Sciences Lines, at Briarcliff Mutual Insurance Company, requesting the issuance of an additional insured endorsement on Policy No. BM-CTL-2023-04182 to name Veridian Health Research Network, Inc. and all thirty-eight (38) participating sites as additional insureds for claims arising out of or relating to the CLARION trial. The letter will specify the coverage requirements under the MCTA and request confirmation of compliance with the additional insured endorsement provisions.
• Certificate of Insurance Transmittal Letter. Preparation of a transmittal letter to WJC enclosing Penterra's certificate of insurance and confirming the following coverage under Policy No. BM-CTL-2023-04182: $25,000,000 per occurrence and $75,000,000 in the aggregate for clinical trial liability, with a subject-injury sublimit of $10,000,000 per occurrence and $50,000,000 in the aggregate. The transmittal letter will confirm that the policy meets the insurance requirements specified in the MCTA and that the additional insured endorsement has been obtained.
• Insurance Adequacy Opinion Memorandum (Internal). Preparation of an internal memorandum analyzing the adequacy of Penterra's clinical trial liability insurance coverage for the CLARION trial in light of: (i) the size and scope of the trial (1,200 subjects across 38 sites); (ii) the risk profile of penterafenib and the advanced HCC patient population; (iii) the indemnification obligations assumed by Penterra under the MCTA; and (iv) industry benchmarks for Phase III oncology trials. This memorandum will be for internal use only and will not be shared with the client or opposing counsel.
• Letter to Veridian Requesting Site Insurance Certificates. Preparation of a letter to Veridian (attention: Patricia Dunne) requesting that all thirty-eight participating sites provide certificates of insurance evidencing coverage of not less than $5,000,000 per occurrence and $10,000,000 in the aggregate, with such certificates to be delivered within fifteen (15) business days of MCTA execution.
• Follow-Up on Certificate Exchange Compliance. Ongoing monitoring and follow-up to ensure timely delivery of insurance certificates by all participating sites, including preparation of reminder correspondence and tracking of outstanding certificates.
Estimated Hours:
F. Phase 6: Site-Specific Joinder Agreements
Timeline: Weeks 12–16 (approximately June – July 2023)
Scope of Work:
Phase 6 encompasses the preparation and execution of site-specific joinder agreements by which individual clinical trial sites join the MCTA framework. The MCTA contemplates that each participating site will execute an Individual Site Agreement (in the form attached as Exhibit C to the MCTA), which incorporates the terms of the MCTA by reference and includes site-specific information such as the site's enrollment allocation, investigator designations, IRB information, and institutional contact details.
Specific tasks during Phase 6 include the following:
• Finalization of Template. Finalization of the template Individual Site Agreement (joinder form) per Exhibit C, incorporating any changes resulting from the MCTA negotiations and ensuring consistency with the final agreed terms.
• Preparation of Representative Site Agreements. Preparation of executed versions of the Individual Site Agreement for the five lead sites, as follows:
(a) Site 001 — Graystone University Medical Center. Located at 1200 University Avenue, Philadelphia, Pennsylvania 19104. Principal Investigator: Dr. Catherine Aldridge. IRB: Graystone IRB00012847 (serving as IRB of record for this site). Institutional Signatory: Dr. William Corwin, Vice President for Research. As the lead site and the site of the Global PI, the Graystone joinder will include additional provisions regarding Global PI responsibilities and coordination with the Veridian Central IRB for reliance sites.