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EXHIBIT 10.62
RELAXIN SCALE-UP AND BULK SUPPLY AGREEMENT
THIS AGREEMENT, effective December 1, 1998, is between Xxxxxx + Co Ges.m.b.H.
("XXXXXX"), a subsidiary of Boehringer Ingelheim, having an address at Xx.
Xxxxxxxxxx-Xxxxx 0-00, X-0000 Xxxxxx, Xxxxxxx, and Connetics Corporation
("CONNETICS"), a corporation organized under the laws of Delaware, having an
address at 0000 Xxxx Xxxxxxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 X.X.X.
WHEREAS, pursuant to the terms of a Confidential Disclosure Agreement dated
January 31, 1997 between XXXXXX and CONNETICS (under its former name, Connective
Therapeutics, Inc.) the parties have evaluated the feasibility of, and XXXXXX
has submitted a price quotation for, providing relaxin manufacturing process
scale-up and toll manufacturing services for CONNETICS; and
WHEREAS, XXXXXX and CONNETICS wishes [sic] to proceed with such services and
define the parties' respective rights and obligations with respect thereto, the
subject of this contract including, e.g., process transfer and implementation,
optimisation of fermentation process, scale-up of fermentation and purification
process and market supply;
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
1. DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth
below.
1.1 "AFFILIATE" shall mean in respect of either party any corporation or
business entity controlled by, controlling, or under common control
with XXXXXX or CONNETICS, respectively. For this purpose "control"
shall mean the direct or indirect beneficial ownership of at least
fifty percent (50%) of the voting stock of, or at least fifty percent
(50%) interest in the income of, such corporation or other business
entity, or such other relationship as, in fact, constitutes actual
control.
1.2 "ATS" shall mean the Austrian Shilling.
1.3 "XXXXXX IMPROVEMENTS" shall mean all intellectual property, including
knowhow, technology, trade secrets and any inventions, modifications
and improvements to the CONNETICS KNOWHOW, patents or applications for
patents that XXXXXX develops or conceives individually or in
conjunction with others pursuant to this Agreement. XXXXXX IMPROVEMENTS
shall under no circumstances mean any intellectual property including
knowhow, technology, trade secrets and any inventions which are not
PRODUCT-related and which derive solely from Benders experience and
knowhow.
1.4 "XXXXXX'X REPRESENTATIVE" means the person designated by XXXXXX who
shall be primarily responsible for communications between XXXXXX and
CONNETICS. As of the EFFECTIVE DATE, Xxxxxx Xxxxxxxxx, Ph.D. is
designated as XXXXXX'X REPRESENTATIVE.
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1.5 "BEST EFFORTS" mean [sic] the good faith deployment by XXXXXX or
CONNETICS, in light of prevailing circumstances and taking into account
third party obligations and commitments, of sufficient of its
resources, capital equipment, material and labor as might reasonably be
expected to timely achieve, or if there is no time limit then achieve
in the shortest practical time, the goals, deliverables and benefits
which are anticipated to accrue to XXXXXX and CONNETICS hereunder.
1.6 "BLA" shall mean a Biological License Application.
1.7 "cGMP" shall mean Current Good Manufacturing Practices as promulgated
by the FDA (e.g., 21 CFR 210 and 211).
1.8 "CMC" shall mean the Chemistry, Manufacturing and Controls section of
an IND or BLA.
1.9 "COGS" shall mean XXXXXX'x actual cost of the production of PRODUCT, as
determined in accordance with the applicable generally accepted
accounting principles, which shall be comprised of the sum of direct
labor and material and product testing costs incurred in connection
with the manufacture or quality control testing of such PRODUCT, as
well as directly allocable overhead.
1.10 "COMMENCEMENT OF COMMERCIAL MARKETING" shall mean the date of the first
arms' length sale of RELAXIN by CONNETICS or an AFFILIATE, sublicensee
or marketing partner, to a third party forming part of a continuous
program or campaign designed to market RELAXIN (after all the required
regulatory approvals have been granted therefor).
1.11 "COMMERCIAL PRODUCT" shall mean the PRODUCT provided by XXXXXX to
CONNETICS, its Affiliates, sub-licensees and assigns hereunder in
connection with and following the COMMENCEMENT OF COMMERCIAL MARKETING.
1.12 "CONNETICS' KNOWHOW" shall mean CONNETICS' existing process for the
fermentation, purification and otherwise the manufacture of PRODUCT,
and other knowhow, technology and trade secrets that CONNETICS may
disclose to XXXXXX related to or useful in the manufacture of PRODUCT.
1.13 "CONNETICS' PATENTS" shall mean all patent applications and valid,
issued and unexpired patents which are now or hereafter owned, licensed
or otherwise controlled by CONNETICS, including any substitutions,
extensions, reissues, renewals, divisions, continuations, or
continuations-in-part, and all foreign counterparts of the foregoing,
which cover and/or would be infringed by the unlicensed development,
manufacture, use or sale of PRODUCT as contemplated by this Agreement,
including but not limited to EP 112149, EP 303033, EP 251615, EP
407401, EP 470976, and/or PCT/US94/06997.
1.14 "CONNETICS' REPRESENTATIVE" means the person designated by CONNETICS
who shall be primarily responsible for communications between CONNETICS
and XXXXXX. As of the EFFECTIVE DATE, Xxxxx Xxxxxxxxxxxx, Ph.D.
is designated as CONNETICS' REPRESENTATIVE.
1.15 "EMEA" shall mean the European Medicines Evaluation Agency.
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1.16 "EXPERT TEAM" means a team of up to eight (8) people made up of up to
four (4) people nominated by each of CONNETICS and XXXXXX and notified
to the other, which nominees may be changed from time to time by the
nominating party on notice to the other party. The EXPERT TEAM shall be
responsible for agreeing the design [sic] of protocols, monitoring the
SERVICES and deciding operational and scientific issues arising out of
the SERVICES.
1.17 "FDA" shall mean the United States Food and Drug Administration.
1.18 "FROZEN RELAXIN BULK" shall mean RELAXIN BULK in frozen form.
1.19 "IND" shall mean an Investigational New Drug Application.
1.20 "INFORMATION" shall mean any information of value, not generally known
to the public, provided by CONNETICS to XXXXXX or conceived or
developed for CONNETICS by XXXXXX individually or in conjunction with
others under the terms of this Agreement, including (but not limited
to):
o information relating to pharmaceuticals; processes for developing
pharmaceuticals; the development status of pharmaceuticals;
synthetic and manufacturing processes including associated
documentation such as batch records; compounds; compositions of
matter; formulations; medicaments and modes of their
administration; microorganisms; cells or parts thereof, cell
lines and the progeny thereof, including modified or recombined
DNA molecules, and vectors and hosts containing the same; natural
and synthetic antibodies; technical information, such as
clinical, biological, pharmaceutical and characterizing data;
computer programs; apparatus; devices; drawings; designs; plans;
and know-how; and
o business information, such as reports; records; customer lists;
supplier lists; marketing and sales plans; forecasts; financial
information; costs; and pricing information
For purposes of this Agreement, INFORMATION shall not include any
information unrelated to the PRODUCT but related to the XXXXXX'x
technology and knowhow as a biopharmaceutical manufacturer. All
INFORMATION shall be subject to the confidentiality provisions of
SECTION 12.1 below.
1.21 "MCB" shall mean Master Cell Bank.
1.22 "MATERIALS" shall mean all cells, RELAXIN BULK, inclusion bodies,
MINI-C-PRORELAXIN and the like, provided by CONNETICS to XXXXXX or
conceived or developed for CONNETICS by XXXXXX individually or in
conjunction with others under the terms of this Agreement. All
MATERIALS shall be treated as information subject to the
confidentiality provisions of SECTION 12.1 and the use/transfer
provisions of SECTION 12.2 below.
1.23 "MHW" shall mean the Japanese Ministry of Health and Welfare.
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1.24 "MINI-C-PRORELAXIN" shall mean the single chain peptide precursor to
RELAXIN, having the amino acid sequence as set forth in Attachment 2 to
the RFP.
1.25 "PRODUCT" shall mean RELAXIN BULK and/or FROZEN RELAXIN BULK provided
by XXXXXX to CONNETICS, its AFFILIATES, sub-licensees and assigns
hereunder.
1.26 "PROPOSAL" shall mean XXXXXX'x Final Proposal responsive to the RFP,
dated February 16, 1998 (copy attached as EXHIBIT B, and incorporated
herein by this reference).
1.27 "REGULATORY AGENCY" shall mean the FDA, the EMEA, the MHW, or
equivalent body having jurisdiction over the approval for marketing of
pharmaceutical active agents in any country of the world.
1.28 "RELAXIN" shall mean recombinant human relaxin-H2 (CONNETICS' trade
name is ConXn(R)), a peptide having the amino acid sequence as set
forth in Attachment 1 to the RFP.
1.29 "RELAXIN BULK" shall mean Relaxin bulk drug substance produced
according to GMP and released according to the Specifications.
1.30 "REPORT(S)" means the written report(s) prepared by Xxxxxx for
Connetics pursuant to this Agreement.
1.31 "RFP" shall mean CONNETICS' Request for Proposal dated February 6, 1997
(a copy of which is attached as EXHIBIT A, and incorporated herein by
this reference).
1.32 "SERVICES" means the services that comprise Groups 1, 2 and 3
activities to be carried out by XXXXXX as described in the PROPOSAL as
may be amended from time to time pursuant to this Agreement.
1.33 "SPECIFICATIONS" shall mean CONNETICS' specifications for RELAXIN BULK
and RELAXIN FROZEN BULK [sic] as set forth in Attachment 5 to the RFP.
The SPECIFICATIONS may be revised, and additional SPECIFICATIONS (e.g.,
for Master Cell Bank and Working Cell Bank) created, only by mutual
agreement of the parties, set forth in writing signed by XXXXXX and
CONNETICS as an amendment to this Agreement. Any revision to the
SPECIFICATIONS shall take into account the then-current requirements of
regulatory authorities with regard to the manufacture of recombinant
proteins.
1.34 "STEERING COMMITTEE" means a team of up to eight (8) people,
potentially including designated members of the EXPERT TEAM, made up of
up to four (4) people nominated by each of CONNETICS and XXXXXX and
notified to the other party. The nominees may be changed from time to
time by the nominating party on notice to the other party. The STEERING
COMMITTEE shall be responsible for reviewing issues on which the EXPERT
TEAM have been unable to reach agreement and where possible make
decisions arising out of such issues as well as carry out the specific
functions provided for it by this Agreement.
1.35 "WCB" shall mean Working Cell Bank.
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2. TECHNOLOGY TRANSFER AND COLLABORATION GUIDELINES
2.1 GENERAL DESCRIPTION. CONNETICS shall transfer to XXXXXX certain
INFORMATION and MATERIALS as necessary for XXXXXX to perform the
scale-up and manufacturing tasks as provided in this Agreement.
2.2 CONNETICS' KNOWHOW. CONNETICS shall provide necessary INFORMATION and
MATERIALS, including but not limited to:
2.2.1 To Commence Time-schedule
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2.2.2 Additional
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* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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2.3 BASIC PRODUCTION ASSUMPTIONS. All obligations and deliverables of
XXXXXX stated in this Agreement, particularly with respect to the
timeline, scale, PRODUCT yield, and process scalability are based on
the following production assumptions provided in the RFP by CONNETICS:
Fermentation
[*]
Downstreaming
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2.4 TIMETABLE.
2.4.1 CONNETICS shall timely deliver the INFORMATION and MATERIALS
described in SECTION 2.2 to XXXXXX.
2.4.2 The time schedule for completion of XXXXXX'x obligations under
this Agreement, as set forth in the Attachments 7 and 8 of the
PROPOSAL, shall commence upon XXXXXX'x receipt of the
Information and MATERIALS provided under SECTION 2.2.1 and the
first meeting of the EXPERT TEAM (to the extent that agreement
on tasks, protocols and documentation is needed prior to
commencement). Time is of the essence in this Agreement.
2.4.3 XXXXXX shall, within 4 weeks of receipt of the MASTER CELL
BANK documentation and sample, evaluate and advise CONNETICS
as to the sufficiency thereof for proceeding with the Group 1
activities and, if acceptable, proceed promptly as provided
under SECTION 3, below. To the extent necessary, XXXXXX shall
perform comprehensive testing as described in the quotation
dated April 16, 1998 (a copy of which is attached as EXHIBIT C
and incorporated herein by this reference) and according to
all applicable regulatory guidelines, draft guidelines, and
regulations. If unacceptable, XXXXXX shall advise CONNETICS as
to the reasons therefor, whereupon:
(a) if CONNETICS agrees with XXXXXX'x evaluation,
CONNETICS shall [*] and XXXXXX shall proceed to
generate a new MASTER CELL BANK and the required
corresponding documentation, or
(b) if CONNETICS disagrees with XXXXXX'x evaluation,
XXXXXX and CONNETICS shall endeavor in good faith to
resolve any differences as to the sufficiency of the
MASTER CELL BANK.
2.5 TECHNICAL SUPPORT. CONNETICS shall, throughout the term of this
Agreement, timely respond to XXXXXX'x questions and requests for
assistance in receiving the INFORMATION and MATERIALS, implementing the
PROPOSAL and carrying out its duties
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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hereunder. CONNETICS shall provide such reasonable technical support at
its own expense, including access to CONNETICS' expert personnel.
2.6 MEETINGS. Throughout the term of this Agreement, the parties shall
designate representatives to the EXPERT TEAM and the STEERING
COMMITTEE, having technical and business expertise relating to the
PRODUCT, to meet no less than two (2) times per year to discuss issues
and define tasks, protocols and documentation relating to the Group 1,
2 and 3 activities and commercial supply.
2.7 PERFORMANCE. Throughout the term of this Agreement, the parties shall
employ their BEST EFFORTS to timely and efficiently achieve the goals
and provide the deliverables as set forth herein. XXXXXX'x activities
and deliverables hereunder, and CONNETICS review and
acceptance/rejection thereof shall be consistent with the
SPECIFICATIONS and with the protocols and documentation as defined by
the EXPERT Team.
2.8 DELIVERY OF PRODUCTS AND SAMPLES. PRODUCTS and samples to be delivered
by XXXXXX pursuant to this Agreement shall be delivered to such
recipient as CONNETICS may specify, and shall be sent through a
recognized courier having access to Customs warehouses to allow for
addition of refrigerant (e.g., dry ice, cardice) if needed. Containers
for samples and shipment shall be specified by the EXPERT TEAM, if
necessary. Dispatch costs, including insurance, will be borne by
CONNETICS. All shipments shall be F.O.B. XXXXXX'x Vienna facility.
2.9 DELIVERY OF DOCUMENTS. Documents to be delivered pursuant to this
Agreement shall be addressed to CONNETICS' REPRESENTATIVE or XXXXXX'X
REPRESENTATIVE, as the case may be, and may initially be sent by
facsimile, confirmed with hard copies by courier. In all cases in this
Agreement, the list of documents to be provided is intended to be by
way of example or minimum requirements, and is not an exhaustive list
of all documentation that may be required to be provided.
2.10 QUALITY MANAGEMENT SYSTEM. XXXXXX has established a quality management
system in accordance with requirements and guidelines of the requisite
authorities. Nevertheless, XXXXXX acknowledges that the PRODUCT is
recorded to be manufactured in accordance with cGMP under FDA
regulations. In the event that CONNETICS has any reasonable objections
to documentation in connection with services performed pursuant to this
Agreement, XXXXXX shall implement those changes needed to meet cGMP.
WITH RESPECT TO CHANGES NOT NEEDED TO meet cGMP, XXXXXX may evaluate
the objections and may in XXXXXX'x sole discretion implement such
suggestions, but XXXXXX will implement such discretionary changes only
if they are not parallel to XXXXXX'x existing GMP procedures and not
contrary to XXXXXX'x overall Quality Management System.
3. PROCESS SCALE-UP (GROUP 1)
3.1 GENERAL DESCRIPTION. As set forth in the RFP and the PROPOSAL, XXXXXX
shall commence the Group 1 activities by completing its receipt of the
technology transfer, and ordering equipment and supplies. XXXXXX will
[*] in consultation with CONNETICS, into the design of scaled-up
processes. Xxxxxx will [*] and deliver the
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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corresponding documentation and product samples to CONNETICS. Upon
conclusion of the Group 1 activities XXXXXX and CONNETICS shall review
the SPECIFICATIONS and agree upon such revisions as may be deemed
necessary, amending the SPECIFICATIONS for the commencement of Group 2
activities.
3.2 XXXXXX'X DELIVERABLES. XXXXXX shall complete the Group 1 activities as
set forth in the RFP and the PROPOSAL, including but not limited to
timely delivery of the following:
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* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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All PRODUCT amounts and runs described in this SECTION 3.2 are based on
the Basic Production Assumptions set forth in SECTION 2.3.
Delivery of samples shall be made consistent with SECTION 2.8, unless
otherwise specified, and addressed to CONNETICS' REPRESENTATIVE.
Delivery of documents shall be made consistent with SECTION 2.9, and
addressed to CONNETICS' REPRESENTATIVE.
3.3 CONNETICS' PARTICIPATION. In addition to the technology transfer and
technical support, as set forth in the RFP, CONNETICS shall:
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3.4 REGULATORY DOCUMENTS. If the RELAXIN BULK manufactured under the Group
1 activities meets the SPECIFICATIONS, XXXXXX shall provide the
necessary resources to prepare and either deliver to CONNETICS (or file
directly, as appropriate and to the extent requested by CONNETICS given
the understanding that additional charges may apply), the following
materials written in the English language concerning the manufacture of
PRODUCT for use by CONNETICS in seeking regulatory approval for use of
this material in clinical trials:
o All site-relevant and CMC-relevant documents necessary to the
filing of an IND amendment by CONNETICS to support the testing
of PRODUCT produced by XXXXXX in human clinical trials shall
be filed or delivered to CONNETICS within [*] days of
CONNETICS acceptance and release of each cGMP RELAXIN BULK lot
(the specific identification of such documents to be mutually
agreed upon at such time).
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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CONNETICS shall be solely responsible for processing all data and
reports as needed to file regulatory documents, such as the IND, BLA
and, eventually, for registration of the PRODUCT.
4. PROCESS SCALE-UP (GROUP 2)
4.1 GENERAL DESCRIPTION. As set forth in the RFP and the PROPOSAL, and in
consideration of the Basic Production Assumptions set forth in SECTION
2.3, XXXXXX shall produce three cGMP conformance lots of PRODUCT of at
least [*] each.
4.2 XXXXXX'X DELIVERABLES. XXXXXX shall complete the Group 2 activities as
set forth in the RFP and the PROPOSAL, including but not limited to
timely delivery of the following:
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Delivery of samples shall be made consistent with SECTION 2.8, unless
otherwise specified, and addressed to CONNETICS' REPRESENTATIVE.
Delivery of documents shall be made consistent with SECTION 2.9, and
addressed to CONNETICS' REPRESENTATIVE.
All PRODUCT amounts and runs described in this SECTION 4.2 are based on
the Basic Production Assumptions set forth in SECTION 2.3, and XXXXXX
shall use its BEST EFFORTS to produce the lots described in this
SECTION 4.2. Subject to SECTION 6.2, conformance with SPECIFICATIONS
shall be at CONNETICS' risk.
4.3 CONNETICS' PARTICIPATION. In addition to the technology transfer and
technical support, as set forth in the RFP, CONNETICS shall:
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4.4 REGULATORY DOCUMENTS. If the RELAXIN BULK manufactured under the Group
2 activities meets the SPECIFICATIONS, XXXXXX shall provide the
necessary resources to prepare and either deliver to CONNETICS (or file
directly, as appropriate and to the extent requested by CONNETICS given
the understanding that additional charges may apply), the following
materials written in the English language concerning the
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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manufacture of PRODUCT for use by CONNETICS in seeking regulatory
approval for use of this material in clinical trials:
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5. PROCESS SCALE-UP (GROUP 3)
5.1 GENERAL DESCRIPTION. As set forth in the RFP and the PROPOSAL, XXXXXX
shall complete the following:
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5.2 XXXXXX'X DELIVERABLES. XXXXXX shall complete the Group 3 activities as
set forth in the RFP and the PROPOSAL, including but not limited to
timely delivery of the following:
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* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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Delivery of samples shall be made consistent with SECTION 2.8, unless
otherwise specified, and addressed to CONNETICS' REPRESENTATIVE.
Delivery of documents shall be made consistent with SECTION 2.9, and
addressed to CONNETICS' REPRESENTATIVE.
5.2 CONNETICS' PARTICIPATION. In addition to the technology transfer and
technical support, as set forth in the RFP, CONNETICS shall:
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5.4 REGULATORY DOCUMENTS. XXXXXX shall use its BEST EFFORTS and provide the
necessary resources to prepare and either deliver to CONNETICS (or file
directly, as appropriate and to the extent requested by CONNETICS given
the understanding that additional charges may apply), the following
materials written in the English language concerning the manufacture of
PRODUCT for use by CONNETICS in seeking regulatory approval for
RELAXIN:
[*]
XXXXXX shall perform its obligations under this Agreement according to
all applicable regulatory guidelines, draft guidelines, and
regulations. The parties shall consult with each other fully concerning
the scope and content of all regulatory filings to be made related to
XXXXXX'x manufacture of PRODUCT. If the parties determine that XXXXXX
should make any filing directly, then a full copy of each such filing
and any subsequent amendments shall be provided to CONNETICS
simultaneously with its filing by XXXXXX. XXXXXX will provide letter(s)
granting CONNETICS and its designees the right of cross-reference to
any XXXXXX filings as necessary.
5.5 If additional analytical testing and/or additional production runs are
required by the FDA, EMEA or other REGULATORY AGENCY during/after
registration, XXXXXX will perform such testing and/or runs as required.
The cost of such additional testing/runs will be borne by CONNETICS
unless the requirement results from an error or omission caused by
XXXXXX'x negligence.
6. TESTING, ACCEPTANCE / REJECTION OF GROUP 1 AND 2 MATERIALS
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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6.1 Promptly upon receipt of RELAXIN BULK samples from XXXXXX, CONNETICS
shall submit the samples to at least two (2) test methods (selected
from the SPECIFICATIONS) for confirmation of consistency with
SPECIFICATIONS. At its option, CONNETICS may perform the confirmatory
testing itself or through an independent testing laboratory.
6.1.1 XXXXXX shall be promptly notified of CONNETICS' acceptance or
rejection of all samples delivered in the Group 1 and 2
activities. Any rejection shall be accompanied by the detailed
reasons therefor.
6.1.2 XXXXXX and CONNETICS, initially through the EXPERT TEAM and if
necessary through the STEERING COMMITTEE, shall discuss any
rejection and endeavor to agree upon a satisfactory and timely
resolution of the matter. If unable to agree upon a
resolution, CONNETICS may decide whether to perform tests on
additional lots at its own cost as provided in SECTION 6.2
below.
6.2 As necessary, replacement lots shall be provided as soon as possible
using XXXXXX'x BEST EFFORTS to expedite completion and adherence to the
time schedule, for delivery of the following:
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Except as provided below, CONNETICS bears the risk that the medium and
large scale lots produced in the Group 1 and 2 activities will not meet
SPECIFICATIONS. CONNETICS shall be responsible for payment of XXXXXX'x
COGS for production of any replacement lots; the price of such
additional lots shall be based on the cost of previous implementation
runs, and shall not exceed:
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If it is determined that the PRODUCT did not meet the SPECIFICATIONS
through XXXXXX'x negligent act or omission, all costs of replacement
will be borne by XXXXXX.
7. PAYMENTS FOR GROUPS 1, 2 AND 3 ACTIVITIES
7.1 CONNETICS shall pay to XXXXXX, and XXXXXX agrees to accept as
compensation for XXXXXX'x activities and all deliverables pursuant to
Groups 1, 2 and 3:
7.1.1 GROUP 1. [*] The first installment is due within thirty (30)
days after CONNETICS receives XXXXXX'x invoice submitted upon
the start of XXXXXX'x time schedule
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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pursuant to SECTION 2.4.2, with each respective subsequent
installment due on the anniversary [*] months thereafter.
(a) If XXXXXX [*] as provided in SECTION 2.4.3, CONNETICS
shall pay XXXXXX up to an additional [*] as set forth
in EXHIBIT C, payable within thirty (30) days of
CONNETICS' receipt of XXXXXX'x report and invoice upon
completion of the evaluation.
(b) If XXXXXX [*] as provided in SECTION 2.4.3(a),
CONNETICS shall pay XXXXXX an additional [*], payable
within thirty (30) days after CONNETICS notifies XXXXXX
that it agrees with XXXXXX'x evaluation.
7.1.2 GROUP 2. [*] payable in [*]
installments, respectively, of [*]. The first installment is
due within thirty (30) days after CONNETICS receives XXXXXX'x
invoice submitted upon commencement of the [*] pursuant to
SECTION 4.1, with each respective subsequent installment due
on the anniversary [*] thereafter.
7.1.3 GROUP 3. [*] payable in [*] equal quarterly installments
of [*]. The first installment is due within thirty (30) days
after CONNETICS receives XXXXXX'x invoice submitted upon
commencement of [*] pursuant to SECTION 5.1, with each
respective subsequent installment due on the anniversary [*]
thereafter.
7.1.4 EQUIPMENT. CONNETICS shall reimburse XXXXXX for the purchase
of equipment as specified at page 22 of the PROPOSAL for such
equipment investments, estimated at a total of [*] in [*]
installments, of which the first [*] shall be [*]. The first
installment is due within thirty (30) days after CONNETICS
receives XXXXXX'x invoice together with proof of purchase of
the equipment submitted upon the start of XXXXXX'x time
schedule pursuant to SECTION 2.4.2, with each respective
subsequent installment due on the anniversary [*] thereafter.
Any difference between the actual and estimated costs of such
equipment shall be paid/refunded with the last quarterly
installment.
7.2 CURRENCY. CONNETICS' payments pursuant to SECTIONS 7.1 and 8.6 shall be
made in Austrian Shillings. Any payment under this Agreement which
becomes due can be
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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made at the option of Connetics in ATS or in such other European
currency which the European Union might have established then as a
valid means or [SIC] payment in the European Union or some countries of
the European Union. If the ATS is replaced by such European currency
completely at some time in the future, payments becoming due thereafter
shall be made in such European currency at the then-official conversion
rate as reported in the Wall Street Journal.
7.3 DELAYS. In case of delays of payment, XXXXXX has the right to
discontinue subsequent activities until such payment has been received.
8. COMMERCIAL MANUFACTURING - ORDER, SUPPLY AND PAYMENT
8.1 SUPPLY. XXXXXX shall manufacture and supply CONNETICS' worldwide
requirements of COMMERCIAL PRODUCT. XXXXXX will sell or otherwise
provide the COMMERCIAL PRODUCT for sale or use only to CONNETICS and
its AFFILIATES, licensees, marketing partners and other designees
during the term of this Agreement. Subject to CONNETICS' compliance
with SECTIONS 8.2 and 8.4, XXXXXX is committed and prepared to supply
COMMERCIAL PRODUCT to CONNETICS. The PRODUCT will be manufactured,
packaged, stored and prepared for shipping in accordance with cGMP, in
an FDA-inspected and certified facility, currently envisioned to be
XXXXXX'x facility in Vienna, Austria.
8.2 PLANT CAPACITY RESERVATION.
8.2.1 INITIAL RESERVATION. CONNETICS reserves the respective space
and time in each of the fermentation plant, secondary recovery
unit, and purification area to product [SIC] [*] of PRODUCT
per [*] presently estimated at [*] in the fermentation plant,
[*] for secondary recovery [*], and [*] in the purification
area. CONNETICS initially reserves such space and time for a
period of [*] commencing within six (6) months of completion
of CONNETICS' Phase III clinical trial and contingent upon the
successful outcome thereof. The reservation of capacity for
production of [*] of PRODUCT is based on the Basic Production
Assumptions set forth in SECTION 2.3. (Commencement of
reservation to be determined - currently estimated
approximately [*].)
8.2.2 EXTENSION OF INITIAL RESERVATION. CONNETICS' initial
reservation may be extended by one (1) or more full years, at
any time up to the end of the third year of the initial
reservation. CONNETICS may make further extensions at any time
thereafter, provided that such extension is made with at least
four (4) years remaining of CONNETICS' then-existing
reservation. The grant of any extension requested after
CONNETICS' existing reservation has less than four years
remaining shall be at the sole discretion of XXXXXX.
8.2.3 LOWERING RESERVED CAPACITY. After the third year of the
initial reservation, the reservation of capacity may be
decreased below that required for [*] of PRODUCT per [*]
proportional to CONNETICS' actual requirements, provided that
(a) CONNETICS shall give XXXXXX one (1) year's notice of such
decrease,
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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and (b) the reserved capacity shall never fall below [*]. If
CONNETICS' actual requirements should fall below [*],
CONNETICS shall pay XXXXXX an amount equal to the costs
actually incurred plus fixed costs for the difference between
CONNETICS' actual requirements and [*].
8.2.4 INCREASING RESERVED CAPACITY. CONNETICS' reservation of
capacity may be increased above that required for [*] of
PRODUCT per [*], provided that CONNETICS shall give XXXXXX
one (1) year's notice of such increase and subject to the
availability of space/time therefor upon receipt of such
notice by XXXXXX.
8.2.5 OPTION TO INCREASE THROUGHPUT. It is foreseen that the
throughput per unit time may increase, e.g., [*],
during the term of CONNETICS' reservation with the result that
CONNETICS may proportionally increase the quantities in its
purchase orders without increase in the associated fixed costs
or reservation.
8.2.6 FURTHER SCALE-UP OF PROCESS. If during the term of the
Agreement CONNETICS' actual requirements surpass the capacity
of the process employed by XXXXXX (e.g., lots of [*] or
[*]), XXXXXX and CONNETICS commit to good faith negotiations
regarding further scale-up of the process, its implementation
and regulatory approval.
8.3 FORECASTS. Commencing on March 1, 1999, and on each anniversary
thereafter, CONNETICS shall provide XXXXXX with a 12-month forecast for
XXXXXX'x use in budgeting and production planning.
8.4 PURCHASE ORDERS. Written purchase orders will be placed directly by
CONNETICS or its designated representatives with XXXXXX no later than
June 30 of each year for the next full calendar year, for up to the
amount of the full reserved capacity for that year, including the
following details: quantity, requested shipping date, shipping
instructions and CONNETICS' order reference number including the price
calculated according to the volume ordered.
8.5 INVOICE. XXXXXX shall provide CONNETICS with a quarterly invoice, which
CONNETICS shall pay upon receipt of proof of delivery of COMMERCIAL
PRODUCT (together with confirmation that the PRODUCT was shipped or
placed in storage), and with the corresponding Certificate of Analysis
on a timely basis. CONNETICS shall pay each such invoice:
8.5.1 if by wire transfer or other electronic payment, within
thirty-five (35) days of receipt; and
8.5.2 if by other than electronic payment, within thirty (30) days
of receipt;
8.5.3 provided, that payment by any means within ten (10) days of
receipt shall entitle CONNETICS to a two percent (2%) discount
of the full invoice price.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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8.6 COMMERCIAL PRICE.
8.6.1 Calculation of Commercial Price. XXXXXX shall provide RELAXIN
BULK and FROZEN RELAXIN BULK to CONNETICS. The commercial
price shall be the same for RELAXIN BULK and FROZEN RELAXIN
BULK, calculated according to the same formula as follows:
[*]
where:
[*]
The price of the fixed costs and the variable price per kg
of RELAXIN BULK and FROZEN RELAXIN BULK will increase year
by year due to the average Austrian trade index forecast
of June (AATX) shown in the statistic monthly report of
the Oesterreichische Nationalbank, Section 6.2.0 (by way
of example, the AATX for 1998 is 1.2%).
The mechanism for calculating the commercial price of
RELAXIN BULK and FROZEN RELAXIN BULK is shown at the table
set forth in EXHIBIT D.
8.6.2 Cost Savings. As an incentive to work together to reduce COGS,
XXXXXX and CONNETICS shall share equally in any savings of
actual manufacturing costs during the term of this Agreement.
8.7 MOST FAVORED CUSTOMER. XXXXXX'x calculation of COGS for PRODUCT under
this Agreement shall be no less favorable to CONNETICS than XXXXXX'x
calculation of cost of production for services of a similar scope
provided to any third party.
8.8 RISK OF LOSS. Deliveries of each order or portion thereof will be
F.O.B. delivery to CONNETICS' forwarding agent, shipper or such other
recipient as may be specified by CONNETICS and accepted by XXXXXX, or
documented placement in storage facility at XXXXXX, as applicable.
8.9 INSURANCE, SHIPPING AND TAXES.
8.9.1 CONNETICS and XXXXXX shall cooperate in evaluating the most
cost effective manner of securing adequate insurance for the
PRODUCT during shipment.
8.9.2 XXXXXX and CONNETICS shall cooperate in seeking/applying for
all available waivers, exclusions, exemptions, rebates and the
like with respect to potential taxes on the PRODUCT.
8.9.3 Dispatch costs, including insurance, will be borne by
CONNETICS.
8.10 SHORTFALL. If CONNETICS' purchase orders for a given calendar year fall
below CONNETICS' reservation for that year, CONNETICS' sole liability
shall be to pay
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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XXXXXX in the amount of XXXXXX'x fixed costs (as set forth in EXHIBIT
D) for any such shortfall.
8.11 STORAGE OF FROZEN BULK. XXXXXX shall store FROZEN RELAXIN BULK on terms
to be negotiated when, and if, CONNETICS requests such storage, and
depending on XXXXXX'x capacity at the time.
9. QUALITY ASSURANCE - TESTING, ACCEPTANCE / REJECTION OF COMMERCIAL
PRODUCT
9.1 AUDITS
9.1.1 CONNETICS may, prior to the commencement of XXXXXX'x time
schedule as provided in SECTION 2.4.2, conduct an initial, in
depth GMP audit of XXXXXX'x manufacturing operations, storage
facilities and any XXXXXX QC laboratory at which COMMERCIAL
PRODUCT testing is to be performed, including XXXXXX'x
relevant records (or the corresponding facilities and records
of any of XXXXXX'x sub-contractors), and may terminate this
Agreement with no legal or financial liability if, as a result
of the audit, deficiencies are uncovered which, after good
faith discussion by the STEERING COMMITTEE, in the view of
CONNETICS cannot be adequately or appropriately resolved.
9.1.2 CONNETICS may conduct periodic, typically annual, re-audits of
XXXXXX'x manufacturing operations, storage facilities and QC
laboratories and records. If, as a result of the audit,
deficiencies are uncovered which, after good faith discussion
by the STEERING COMMITTEE, in the view of CONNETICS cannot be
adequately or appropriately resolved, CONNETICS may terminate
this Agreement pursuant to SECTION 13.3.
9.1.3 In addition to the annual re-audits provided for under SECTION
9.1.2, responsive to any specific concern CONNETICS may
conduct additional audits whenever in good faith deemed
necessary; CONNETICS shall give XXXXXX such notice as is
reasonably possible under the circumstances giving rise to
such concern.
9.2 CONNETICS REPRESENTATIVE AT XXXXXX. Upon reasonable notice to XXXXXX,
CONNETICS may, at CONNETICS' expense, place a company representative
on-site at XXXXXX'x manufacturing facility during the manufacture of
the PRODUCT hereunder. Subject to the following sentence, such
representative shall have full, unfettered access to all operations,
documents, and records (excluding any cost calculations) that pertain
to the manufacture of the PRODUCT. CONNETICS' REPRESENTATIVE at XXXXXX
shall accept XXXXXX'x procedures regulating external customer
relationships (including GMP training, hygiene training, health
examination, guarantee of confidentiality, and controlled access to
documents) and will obtain XXXXXX'x agreement prior to any active
participation in the process or analytical testing.
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9.3 DOCUMENTATION AND RECORDS.
9.3.1 CONNETICS' review and approval of documents is required prior
to the first commencement of any cGMP manufacturing operation
hereunder, including but not limited to the following:
[*]
[*]
[*]
[*]
[*]
[*]
[*]
[*]
9.3.2 CONNETICS' review and approval of the XXXXXX'x facilities and
controls (including any new construction and equipment) and
the sources of raw materials is required prior to the first
commencement of any cGMP manufacturing operation hereunder.
9.3.3 XXXXXX shall notify CONNETICS in advance of any proposed
changes to any of the documents, facilities, controls and
sources listed in SECTION 9.3.1 and 9.3.2, and shall be
included in the review cycle, and CONNETICS' written approval
shall be required for any such proposed changes. In addition
to requiring CONNETICS' written approval, any proposed changes
requiring FDA pre-approval shall not be implemented without
providing CONNETICS copies of the documentation of such
pre-approval.
9.3.4 XXXXXX shall provide CONNETICS with official copies of all of
the approved documents listed in this SECTION 9.3.
9.3.5 XXXXXX shall provide CONNETICS with necessary records in
connection with the production process, including but not
limited to the following:
[*]
[*]
[*]
[*]
[*]
[*]
9.4 QC TESTING. CONNETICS reserves the right to have COMMERCIAL
PRODUCTS tested by CONNETICS or by one or more qualified third
party testing facilities (the cost of implementation and
cross-validation at CONNETICS or a CONNETICS' third party testing
facility shall be borne by CONNETICS). In that regard, it is
envisioned that XXXXXX shall be required to provide:
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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[*]
[*]
[*]
9.5 REGULATORY INSPECTIONS.
9.5.1 XXXXXX shall promptly notify CONNETICS in advance of any
pre-approval inspection of XXXXXX'x facilities related to the
approval of PRODUCT, and permit CONNETICS to have a
representative present at such inspection.
9.5.2 XXXXXX shall promptly notify CONNETICS of any planned
REGULATORY AGENCY inspection of XXXXXX'x facilities related to
the PRODUCT prior to the expected date of the inspection, and
permit CONNETICS to have a representative present at such
inspection.
9.5.3 XXXXXX shall notify CONNETICS of any unplanned REGULATORY
AGENCY inspection of XXXXXX'x facilities related to the
PRODUCT immediately upon notice or if XXXXXX has received no
notice immediately upon commencement thereof, and permit
CONNETICS to have a representative present at such inspection.
9.5.4 XXXXXX warrants that it is not the subject of any regulatory
action arising from a REGULATORY AGENCY inspection of XXXXXX'x
facilities for any purpose. If XXXXXX becomes the subject of
any regulatory action arising from a REGULATORY AGENCY
inspection of XXXXXX'x facilities for any purpose, XXXXXX
shall promptly notify CONNETICS of such action, the extent to
which it affects the PRODUCT, and of XXXXXX'x plans to rectify
the matters underlying such action. XXXXXX shall bear the full
financial and operational responsibility for rectifying the
matters underlying such action.
9.6 Prior to each shipment of the COMMERCIAL PRODUCT (or, alternatively,
upon documented proof of delivery of the PRODUCT to storage), XXXXXX
shall provide to CONNETICS a Certificate of Analysis attesting to the
quality of each batch contained within the shipment, including review
and approval by the appropriate quality control unit of all batch
production and control records. XXXXXX shall also provide to CONNETICS
a file sample from each lot of COMMERCIAL PRODUCT to be shipped (in a
quantity sufficient for complete bulk release testing, if necessary) to
be retained by CONNETICS. XXXXXX shall maintain all necessary records
and samples, and provide CONNETICS with such documentation as may be
required for compliance with FDA and other applicable regulations.
9.7 XXXXXX warrants that the COMMERCIAL PRODUCT will be prepared and tested
in accordance with cGMP and shall meet the SPECIFICATIONS.
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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[*] Page 21
9.8 After completion of final PRODUCT manufacture, CONNETICS will submit
the biologic product (filled and finished vials of RELAXIN) to at least
two (2) test methods (selected from the SPECIFICATIONS) for
confirmation of consistency with SPECIFICATIONS. At its option,
CONNETICS may perform the confirmatory testing itself or through an
independent testing laboratory. If any failure to conform with
SPECIFICATIONS can be traced to the respective COMMERCIAL PRODUCT:
9.8.1 XXXXXX shall be promptly notified of CONNETICS' rejection
together with the detailed reasons therefor.
9.8.2 XXXXXX and CONNETICS shall discuss any rejection and endeavor
to agree upon a satisfactory and timely resolution of the
matter. If unable to agree upon a resolution, any dispute as
to acceptability or conformance with SPECIFICATIONS shall be
resolved as provided in SECTION 9.8.3 below.
9.8.3 Any dispute over acceptability or conformance with
SPECIFICATIONS shall be decided finally by a qualified
independent laboratory (the selection of which shall be
approved by the EXPERT TEAM), which will repeat the disputed
tests following the methods referenced in the SPECIFICATIONS.
If the independent laboratory determines that the COMMERCIAL
PRODUCT did not meet the SPECIFICATIONS, all costs incurred in
connection with the investigation by such independent
laboratory and the cost of replacement of COMMERCIAL PRODUCT
(including fill and finishing) will be borne by XXXXXX. If the
independent laboratory determines that the COMMERCIAL PRODUCT
did meet the SPECIFICATIONS, and is otherwise free of fault by
XXXXXX, then the costs incurred with the investigation by such
independent laboratory and the cost of any replacement of
COMMERCIAL PRODUCT will be borne by CONNETICS.
9.8.4 As necessary, replacement lots shall be provided as soon as
possible using XXXXXX'x BEST EFFORTS to expedite completion.
10. WARRANTY AND INDEMNIFICATION
10.1 WARRANTIES. XXXXXX warrants to CONNETICS that, when delivered, (a) the
COMMERCIAL PRODUCT will conform in all respects to the SPECIFICATIONS,
as then in effect, and (b) the PRODUCT will not be adulterated or
misbranded within the meaning of the Federal Food, Drug and Cosmetic
Act.
10.2 INDEMNIFICATION BY XXXXXX. XXXXXX shall indemnify, defend and hold
harmless CONNETICS from and against all third party costs, claims,
suits, expenses (including reasonable attorney's fees) and damages
(excluding consequential damages) arising out of or resulting from any
willful or negligent act or omission by XXXXXX relating to the subject
matter of this Agreement or any defect in the manufacture or failure to
deliver PRODUCT in accordance with XXXXXX'x warranties (except to the
extent such cost, claim, suit, expense or damage arose or resulted from
any negligent act or omission by CONNETICS), provided that CONNETICS
gives reasonable notice to XXXXXX of any such claims or action, tenders
the defense of such claim or action to XXXXXX and assists XXXXXX at
XXXXXX'x expense in defending such claim or action and does not
compromise or settle such claim or action without XXXXXX'x prior
written consent.
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10.3 INDEMNIFICATION BY CONNETICS. CONNETICS shall indemnify, defend and
hold harmless XXXXXX from and against all third party costs, claims,
suits, expenses (including reasonable attorney's fees) and damages
(excluding consequential damages) arising out of or resulting from any
willful or negligent act or omission by CONNETICS relating to the
subject matter of this Agreement or the use by or administration to any
person of a PRODUCT that arises out of this Agreement (except to the
extent such cost, claim, suit, expense or damage arose or resulted from
any negligent act or omission by XXXXXX or any defect in the
manufacture of PRODUCT by XXXXXX), provided that XXXXXX gives
reasonable notice to CONNETICS of any such claims or action, tenders
the defense of such claim or action to CONNETICS and assists CONNETICS
at CONNETICS' expense in defending such claim or action and does not
compromise or settle such claim or action without CONNETICS' prior
written consent.
11. BACK-UP SUPPLIER; LICENSES
11.1 ALTERNATE SUPPLIER. In order that CONNETICS is not dependent on a
single supplier of PRODUCT and recognizing that regulatory requirements
dictate that all PRODUCT utilized by CONNETICS should be manufactured
by the same process, XXXXXX agrees pursuant to SECTION 11.2 that
CONNETICS may itself use, or have another supplier use, the processes
including any XXXXXX IMPROVEMENTS, to produce annually two (2) 500 gram
lots of PRODUCT. In addition to the foregoing, in the event XXXXXX
fails for any reason, including without limitation, a force majeure
event described in SECTION 14.5, to deliver COMMERCIAL PRODUCT in the
full amounts set forth in CONNETICS' purchase orders for a continuous
period of 120 days, then CONNETICS shall have the right to make or have
made all of its requirements of COMMERCIAL PRODUCT for the duration of
XXXXXX'x inability to supply.
11.2 CONNETICS agrees to provide the first opportunity to qualify as a
second source for Product to a XXXXXX AFFILIATE in North America or
Europe, at costs, if any, to be negotiated in good faith. If no such
Affiliate is qualified, XXXXXX shall assist CONNETICS in transferring
the process to an alternate supplier for PRODUCT by providing
reasonable technical assistance and documentation as necessary.
XXXXXX'x obligations under this SECTION 11.2 shall be subject to the
availability of XXXXXX personnel and time, provided that XXXXXX shall
not unreasonably withhold such assistance. In no event shall XXXXXX be
responsible for costs relating to (a) process transfer and
implementation at the backup supplier, (b) transfer of any process
improvements, (c) implementation of analytical methods or qualification
of the analytical laboratories of the backup supplier, or (d) any costs
for compliance testing and verifying PRODUCT identity between XXXXXX
and the backup supplier.
11.3 Unless CONNETICS selects a Xxxxxx AFFILIATE to qualify as CONNETICS'
second source, CONNETICS shall reimburse XXXXXX'X out-of-pocket
expenses in providing technical assistance pursuant to SECTION 11.2.
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12. INTELLECTUAL PROPERTY
12.1 CONFIDENTIALITY.
12.1.1 In order to facilitate this Agreement it will be necessary for
the parties to exchange certain proprietary information, each
recipient of which agrees to retain such information in strict
confidence and not to disclose or transfer Information to any
party (except to an AFFILIATE of XXXXXX under similar
conditions of confidentiality) or make any use of information
except as authorized by the terms of this Agreement or
otherwise in writing by the discloser.
12.1.2 The parties hereby acknowledge that the information can
constitute "inside information" for securities purposes and
each recipient agrees not to make any unauthorized disclosure,
trading or other such use of information received hereunder.
12.1.3 These obligations of confidentiality and non-use shall not
apply to information:
o that was previously known to the recipient as evidenced
by recipient's written records, or
o that is lawfully obtained by recipient from a source
independent of the discloser, or
o that is now or becomes public knowledge other than by
breach of this Agreement or
o that is properly required by law, regulation, rule, act
or order of any governmental authority or agency to be
disclosed by receiver, provided that receiver shall
provide discloser with reasonable advance notice of any
such required disclosure and cooperate with discloser
in minimizing the extent of any such disclosure and in
seeking such protective order(s) or the like as may be
available to protect the confidentiality of the
Information.
12.1.4 These obligations of confidentiality and non-use shall survive
the expiration or termination of this Agreement.
12.2 MATERIALS.
12.2.1 XXXXXX agrees:
o not to use the MATERIALS for any purposes other than in
conducting the Group 1, 2 and 3, and commercial
manufacture and supply activities pursuant to this
Agreement;
o not to transfer the MATERIALS to any third party; and
o that the MATERIALS will not be used on any human
subjects.
12.2.2 XXXXXX represents that it is regularly engaged in
manufacturing biopharmaceutical active agents, and will assure
that the MATERIALS will be used and/or disposed in compliance
with all applicable federal, state and/or local laws and
regulations.
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12.3 INVENTIONS. Recognizing that CONNETICS will disclose the CONNETICS'
KNOWHOW to XXXXXX, that CONNETICS holds the CONNETICS' PATENTS, and
that it will compensate XXXXXX for conducting the process scale-up
Group 1, 2 and 3, and commercial manufacture and supply activities,
which may give rise to XXXXXX IMPROVEMENTS:
12.3.1 XXXXXX agrees to and does hereby sell, assign, transfer and
set over to CONNETICS, its successors or assigns, as the case
may be, all of XXXXXX'x right, title and interest in and to
the XXXXXX IMPROVEMENTS, to be held and enjoyed by CONNETICS,
its successors or assigns, as the case may be, as fully as the
XXXXXX IMPROVEMENTS would have been held by XXXXXX had this
Agreement, sale or assignment not been made, including for any
patent that may be granted within the XXXXXX IMPROVEMENTS for
the full term thereof. CONNETICS agrees to pay XXXXXX a
license fee to be negotiated for the right to use XXXXXX
IMPROVEMENTS pursuant to this SECTION 12.3.1 in connection
with products unrelated to the PRODUCT.
12.3.2 Any writings prepared by XXXXXX pursuant to this Agreement are
prepared as works for hire for the benefit of CONNETICS, for
which XXXXXX hereby assigns to CONNETICS any copyright to
which XXXXXX is entitled.
12.3.3 XXXXXX shall promptly disclose to CONNETICS any such
intellectual property, and shall make, execute and deliver any
and all instruments and documents and perform any and all
acts, necessary to obtain, maintain and enforce patents,
trademarks and copyrights for such intellectual property as
CONNETICS may desire in any and all countries. All costs and
expenses of application and prosecution of such patents,
trademarks and copyrights shall be paid by CONNETICS.
12.3.4 Upon the written request of CONNETICS, XXXXXX shall make any
assignment provided for in this SECTION 12.3 directly to, or
for the benefit of, a CONNETICS AFFILIATE or CONNETICS'
designee, including XXXXXX'x performance of any related
obligations hereunder.
12.4 PUBLICATIONS. XXXXXX may publish under XXXXXX'x (and CONNETICS')
scientists' names as appropriate, scientific papers relating to the
work done in the course of the this [sic] Agreement, but only with the
prior written approval of CONNETICS, which approval (a) shall be in
CONNETICS's sole discretion with respect to material directly relating
to the PRODUCT, and (b) shall not otherwise be unreasonably withheld by
CONNETICS.
12.5 LICENSE TO XXXXXX. CONNETICS hereby grants to XXXXXX a non-exclusive,
non-transferable license to use CONNETICS' KNOWHOW and CONNETICS'
PATENTS solely for the purpose of manufacturing PRODUCT for CONNETICS
as provided in this Agreement. The license granted under this SECTION
12.5 shall automatically terminate upon the expiration or termination
of this Agreement.
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12.6 THIRD PARTY CLAIMS. With respect to any third party claims for
infringement of intellectual property:
12.6.1 CONNETICS shall indemnify and hold harmless XXXXXX to the
extent the claim alleges infringement based on the structure
of RELAXIN, the fact that XXXXXX is manufacturing RELAXIN, and
the work performed by XXXXXX for CONNETICS pursuant to this
Agreement, and
12.6.2 XXXXXX shall indemnify and hold harmless CONNETICS to the
extent the claim alleges infringement based on the specific
process and methods of fermentation, purification or otherwise
manufacture when utilized by XXXXXX, to the extent that such
claim is based on XXXXXX IMPROVEMENTS.
13. TERM AND TERMINATION
13.1 This Agreement is effective as of the date first written above
(the "Effective Date") and shall remain in force for the
longer of ten (10) years from the Effective Date, or eight (8)
years from the COMMENCEMENT OF COMMERCIAL MARKETING.
Thereafter, this Agreement may be renewed for successive
periods of three (3) or more calendar year(s) each, any such
agreement to renew to be confirmed in writing by the parties.
13.2 EARLY TERMINATION
13.2.1 CONNETICS may terminate this Agreement on thirty (30)
days written notice pursuant to SECTION 14.3, at any
time prior to the start of the Group 2 or Group 3
activities, but shall remain liable for the payment
of any fees or expenses for services or equipment
already performed, already expended or otherwise not
cancelable. Unless such termination is predicated on
data failing to show efficacy in the primary endpoint
[*] and/or a therapeutic ratio (vs any side-effects)
that is acceptable under reasonable standards
then-prevailing in the biotechnology industry,
however, CONNETICS shall also be liable for the
payment of XXXXXX'x fixed costs (as set forth in
SECTION 8.6 and EXHIBIT D) for reserving capacity in
the fermentation and purification plant for Group 2
[*] or Group 3 [*], except to the extent that such
reserved capacity is otherwise filled by XXXXXX.
13.2.2 CONNETICS may terminate this Agreement on thirty (30)
days written notice pursuant to SECTION 14.3, at any
time after completion of the Group 3 activities,
prior to the start of the commercial manufacturing,
but shall remain liable for the payment of any fees
or expenses for services or equipment already
performed, already expended or otherwise not
cancelable. Unless such termination is predicated on
data failing to show efficacy in the primary endpoint
[*] and/or a therapeutic ratio (vs. any side-effects)
that is acceptable under reasonable standards
then-prevailing in the biotechnology industry,
however, CONNETICS shall also be liable for the
payment of XXXXXX'x
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
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fixed costs (as set forth in SECTION 8.6 and EXHIBIT
D) for reserving capacity in the fermentation and
purification plant for up to one (1) year of
commercial manufacturing.
13.2.3 CANCELLATION.
(a) If, during the term of this Agreement, the
PRODUCT is withdrawn or not approved for
commercial use by virtue of a government order
or authority, CONNETICS may terminate this
Agreement on thirty (30) days written notice
pursuant to SECTION 14.3, provided that
CONNETICS shall be liable for the payment of
XXXXXX'x fixed costs (as set forth in SECTION
8.6 and EXHIBIT D) for reserved capacity in the
fermentation and purification plant for one (1)
year following such notice, except to the
extent that such reserved capacity is otherwise
filled by XXXXXX.
(b) If, during the term of this Agreement, FDA
approval for the PRODUCT is delayed beyond
reasonable expectations, CONNETICS and XXXXXX
shall negotiate in good faith with respect to
the costs related to continue this Agreement in
force.
(c) If, during the term of this Agreement, the
PRODUCT is withdrawn for any other reason,
CONNETICS may, at any time after the first two
(2) years of commercial production, terminate
this Agreement on thirty (30) days written
notice pursuant to SECTION 14.3, provided that
CONNETICS shall be liable for the payment of
XXXXXX'x fixed costs (as set forth in SECTION
8.6 and EXHIBIT D) for reserved capacity in the
fermentation and purification plant for two (2)
years following such notice, except to the
extent that such reserved capacity is otherwise
filled by XXXXXX.
13.3 If either party hereto breaches any of the material terms of
this Agreement, and fails to remedy such breach within two (2)
months after written notice thereof from the other party
pursuant to SECTION 14.3, the other party may at its option
terminate this Agreement immediately upon written notice
pursuant to SECTION 14.3 to the breaching party, upon which
event all rights of the breaching party shall terminate upon
the effective date of termination specified in such notice.
13.4 Either party may terminate this Agreement by notice to the
other in the event that such other party shall have become
insolvent or bankrupt, or shall have made an assignment for
the benefit of creditors, or there shall have been appointed a
trusted [sic] or receiver for all or a substantial part of its
property, or any case or proceeding shall have been commenced
or other action taken by or against such other party in
bankruptcy or seeking reorganization, liquidation,
dissolution, winding-up, arrangement, composition or
readjustment of its debts or any other similar relief, and any
such event shall have continued for more than 60 days
undismissed, unbonded and undischarged.
13.5 Termination of this Agreement shall not release either party
from any liability or obligation which has accrued prior to
such termination and which remains to be
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performed under the terms of this Agreement, nor release
either party from any obligation that is intended to survive
termination of this Agreement.
14. GENERAL TERMS AND CONDITIONS
14.1 ASSIGNMENT. Save as otherwise agreed this Agreement may not be assigned
by either of the parties except to any successor by merger or sale of
substantially all of its assets to which this Agreement relates, but
(a) CONNETICS shall be entitled to assign or delegate performance of
this Agreement to any company which is an AFFILIATE of CONNETICS
provided that such successor or AFFILIATE first agrees to be bound by
the terms of the Agreement as if named as a party thereto, and (b)
XXXXXX shall be entitled to assign or delegate performance of this
Agreement to any company which is an AFFILIATE of XXXXXX provided that
CONNETICS gives its prior written consent and such successor or
AFFILIATE first agrees to be bound by the terms of the Agreement as if
named as a party thereto.
14.2 INDEPENDENT PARTIES/ANNOUNCEMENTS/PUBLICITY. Notwithstanding anything
herein to the contrary, the parties' status with each other shall be,
at all times during the term of this Agreement, that of independent
contractors. Nothing in this Agreement shall be construed to give
either party the power or authority to act or make representations for,
or on behalf of, or to bind or commit the other. Accordingly, the
parties shall endeavor to provide each other courtesy copies in advance
of any public statements, whether verbal or written, including, but not
limited to shareholder reports, prospectuses, communications with stock
market analysts, press releases or other communications with the media.
14.3 NOTICES. Any notice required or permitted by the terms of this
Agreement shall be given by registered mail, prepaid and properly
addressed, or delivered by hand including overnight courier to XXXXXX
or CONNETICS at the respective addresses first given above or at such
other address as either party hereto may designate by notice pursuant
hereto. Any such notice shall be deemed to have been given when
received. All notices to CONNETICS shall be sent to the attention of
its President, with a copy to Vice President, Legal Affairs. All
notices to XXXXXX shall be sent to the attention of its President.
14.4 DISPUTE RESOLUTION / APPLICABLE LAW. Any dispute, controversy or claim
arising out of or relating to this Agreement, or the breach or
termination thereof shall be dealt with in the following manner:
14.4.1 The dispute, controversy or claim shall first be referred for
discussion at a meeting of the parties held pursuant to
SECTION 2.6, or a special meeting if necessary, or at the
parties option to the President of each of XXXXXX and
CONNETICS for resolution at a place to be agreed between such
chief executive officers and, failing agreement, in New York,
New York.
14.4.2 If the dispute, controversy or claim is not settled or agreed
at such meeting or between such chief executive officers
within a period of thirty (30) days, then it shall be settled
by arbitration in accordance with the rules of the American
Arbitration Association then in effect. Judgment upon the
award rendered by the
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arbitrators may be entered in any court having jurisdiction
thereof. In any arbitration pursuant to this section, the
award shall be rendered by a majority of the members of a
board of arbitration consisting of three members, one being
appointed by each party and the third being appointed by
mutual agreement of the two arbitrators appointed by the
parties. The place of arbitration shall be New York, New York.
14.4.3 This Agreement shall be interpreted and enforced in accordance
with, and any arbitrators shall apply, the law of the State of
New York (regardless of that jurisdiction's or any other
jurisdiction's choice of law principles), and the parties
stipulate for the purpose of any legal proceeding to
jurisdiction and venue in the state and federal courts located
within the State of New York.
14.5 FORCE MAJEURE. Neither party shall be liable for failure to perform any
duty or obligation that party may have under this Agreement where such
failure has been occasioned by any Force Majeure which shall mean and
include government regulation, fire, strike, inevitable accident,
national emergency, or any other cause outside the reasonable control
of the party having the duty so to perform. Such failure to perform
shall only be excusable under the provisions of this Section for so
long as, and to the extent that, the same is rendered impossible by
Force Majeure. The party claiming that Force Majeure has occurred shall
send to the other party within five working days of the first
occurrence of Force Majeure full particulars thereof including its date
of first occurrence and of the cause or event giving rise to it.
Notwithstanding the relief granted to any party by this Section, the
relevant party shall nevertheless use its reasonable endeavors in any
situation where it has invoked this Section to perform its relevant
obligations as soon as possible after Force Majeure has ceased.
14.6 DILIGENCE.
14.6.1 Time is of the essence in this Agreement.
14.6.2 XXXXXX shall use its BEST EFFORTS to accomplish the Group 1, 2
and 3 activities and in the manufacture of PRODUCT for
CONNETICS pursuant to this Agreement.
14.7 SURVIVAL. The definitions of SECTION 1 and the covenants and agreements
set forth in SECTIONS 6.1, 7.2, 8.8, 9.7, 9.8, 10, 12 and 14 shall
survive any termination or expiration of this Agreement and remain in
full force and effect regardless of the cause of termination.
14.8 NONWAIVER OF RIGHTS. No failure or delay on the part of a party in
exercising any right hereunder will operate as a waiver of, or impair,
any such right. No single or partial exercise of any such right will
preclude any other or further exercise thereof or the exercise of any
other right. No waiver of any such right will be deemed a waiver of any
other right hereunder.
14.9 HEADINGS. Section headings contained in this Agreement are included for
convenience only and form no part of the agreement between the parties.
14.10 VALIDITY OF PROVISIONS AND SEVERABILITY. If any provision of this
Agreement is or becomes or is deemed to be invalid, illegal, or
unenforceable in any jurisdiction, such
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provision will be deemed amended to conform to applicable laws of such
jurisdiction so as to be valid and enforceable, or, if it cannot be so
amended without materially altering the intention of the parties, it
will be stricken; the validity, legality and enforceability of such
provision will not in any way be affected or impaired thereby in any
other jurisdiction; and the remainder of this Agreement will remain in
full force and effect.
14.11 ENTIRE AGREEMENT. This Agreement, together with all of its exhibits,
sets forth the entire agreement of the parties with respect to the
subject matter hereof; in the event of any inconsistency among them,
this Agreement shall govern. This Agreement may not be modified except
by a writing signed by the parties.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of
the day and year first above written.
CONNETICS CORPORATION XXXXXX + CO GES.M.B.H.
By /s/ X. Xxxxxxx By /s/ X. Xxxxxxx
--------------------------------- -------------------------------
Xxxxxx X. Xxxxxxx Mag. Xxxxxxxx Xxxxxxx
Chief Executive Officer Direktor Produktion und Technik
Date November 20, 1998 Date December 23, 1998
------------------------------- -----------------------------
By /s/ Xxxxx X. Xxxxxxxxxxxx By /s/ X. Xxxxxx
--------------------------------- -------------------------------
Xxxxx X. Xxxxxxxxxxxx, Ph.D. Prof. Xx. Xxxx X. Xxxxxx
Vice President, Director of Biopharmaceutical
Process Science and Manufacturing Manufacture
Boehringer Ingelheim Pharma KG
Date November 20, 1998 Date 12.1.1999
------------------------------- -----------------------------
30
EXHIBIT A
CONNETICS' Request for Proposal,
dated February 6, 1997
[***]
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
31
EXHIBIT B
XXXXXX'x Final Proposal in response to CONNETICS' Request for Proposal,
dated February 16, 1998
[***]
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
32
EXHIBIT C
Fax Letter from Xxxxxx Wien (Xx. Xxxxxxxxx) to Connetics (Xx. Xxxxxxxxxxxx)
dated April 16, 1998.
[***]
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
33
EXHIBIT D
--------------------------------------------------------------------------------
YEAR PRICE OF FIXED COSTS ("PFC") VARIABLE PRICE ("VP") PER kg
FOR [*] RESERVATION RELAXIN BULK
--------------------------------------------------------------------------------
1999 ATS [*] ATS [*]
--------------------------------------------------------------------------------
2000 [*] [*]
--------------------------------------------------------------------------------
2001 [*] [*]
--------------------------------------------------------------------------------
* Certain information on this page has been omitted and filed
separately with the Commission. Confidential treatment has
been requested with respect to the omitted portions.
