Common use of Application of Royalty Provisions to ORKAMBI Net Sales Clause in Contracts

Application of Royalty Provisions to ORKAMBI Net Sales. For purposes of clarity, (1) ORKAMBI is a Combination Product consisting of two Original Drug Products, VX-770 Drug Product and VX-809 Drug Product, and (2) accordingly, royalties on Net Sales of ORKAMBI shall be payable as follows: under the Combination Product principles set forth in Section 1.25.4, 1/n, where n=2, or fifty percent (50%) of Net Sales of ORKAMBI shall be allocated to each of the VX-770 Drug Product and the VX-809 Drug Product. An illustrative example of the calculation of royalties on Net Sales of ORKAMBI and KALYDECO (i.e., VX-770 Drug Product sold not as a Combination Product) is attached hereto as Exhibit 2016-B.