Common use of Initial Supply Clause in Contracts

Initial Supply. (a) Ardelyx will initially be responsible for supplying Lead Licensed Compound and Lead Licensed Products for use in the Development under this Agreement until such time as AstraZeneca assumes responsibility for such supply hereunder (the “Initial Supply”). The Initial Supply shall include, unless otherwise determined by the DCC, those quantities of Lead Licensed Product and Lead Licensed Compound and those activities described on Exhibit J. Ardelyx agrees to use Commercially Reasonable Efforts to deliver the Initial Supply and perform [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. the activities set forth in Exhibit J in such a manner and within such timelines as are required under the Initial Development Plan. For the purposes of the Initial Supply, Ardelyx will source the Lead Licensed Compounds and Lead Licensed Products from its current suppliers identified on Exhibit F, unless other suppliers are approved by the DCC. (b) The Parties agree and acknowledge that a separate manufacturing and supply agreement (“MSA”) is required to be entered into between the Parties to further govern the supply obligations undertaken by Ardelyx hereunder. The Parties shall also enter into a separate Quality Assurance Agreement (“QAA”) that shall define the manufacturing and supply quality responsibilities of the Parties for the Lead Licensed Compound and the Lead Licensed Product. The QAA shall further include provisions obligating Ardelyx to report to AstraZeneca any regulatory compliance issues with its suppliers as well as any critical quality non-conformances relating to the Lead Licensed Compound or Lead Licensed Product. The MSA and the QAA shall be negotiated in good faith between the Parties and be executed as promptly as possible following the Effective Date. The Parties’ objective is that the MSA and the QAA shall be entered into as soon as reasonably practicable and within sixty (60) days of the Effective Date and shall include, amongst other appropriate and detailed provisions, the provisions set out in Exhibit K. (c) The Transfer Price for any Licensed Products or Licensed Compounds supplied by Ardelyx will be a Development Expense, and will be reimbursed by AstraZeneca in compliance with the provisions of Section 4.3, regardless of whether AstraZeneca or Ardelyx has been assigned the responsibility for the Development activities in which the Licensed Products supplied by Ardelyx will be used. Subject to Section 8.2, AstraZeneca shall use Commercially Reasonable Efforts to assume responsibility for the supply of all Licensed Compounds and Licensed Products for use in the Development and Commercialization of Licensed Products beginning with the supplies of drug substance necessary to conduct Phase 3 Clinical Trials of the Licensed Product as well as the supply of drug product necessary to conduct the Phase 2b Clinical Trials for the Licensed Product (other than for the IBS-C Study) and continuing thereafter for the remainder of the Term; provided, however, that AstraZeneca may, by written notice to Ardelyx, elect to assume responsibility for Development work associated with the Manufacture of the Licensed Product or Licensed Compound at any earlier time after the Effective Date. In such case, the timing of the transition of such activities, and the impact of the transition of such Development work on the supply of Licensed Product or Licensed Compound for Clinical Trials, shall be determined by the DCC, taking into account, among other things, the contractual obligations that Ardelyx may have to its current suppliers. Notwithstanding the foregoing, Ardelyx will supply Lead Licensed Compound and Lead Licensed Product for use in the IBS-C Study to be conducted pursuant to Section 5.3 through its current supplier identified on Exhibit J and the cost thereof shall be reimbursed to Ardelyx as part of the calculation of Development Expenses at a price equal to the Transfer Price, provided, however, that AstraZeneca’s obligation to contribute to the funding of the IBS-C Study shall not in total exceed [***], regardless of when such IBS-C Study is commenced during the Term, and provided, further, that in the event of shortage of supply of Lead Licensed Product or Lead Licensed Compound for whatever reason, the supply for the IBS-C Study shall not be allowed to cause a disruption or delay of, or unreasonable increase of the costs for, a Clinical Trial planned to be conducted for an indication other than the IBS-C Indication, meaning that in such event available quantities of Lead Licensed Product or Lead Licensed Compound shall first be allocated to planned Clinical Trials for the other indications before remaining quantities are used for the IBS-C Study. [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions.

Initial Supply. (a) Ardelyx will initially be responsible for supplying Lead Licensed Compound Subject to the terms and Lead Licensed conditions of this Agreement, during the Initial Supply Term, Santarus agrees to supply and sell to GSK, and GSK agrees to purchase from Santarus, PR Products for use in the Development under this Agreement until Territory (such time PR Products sold by Santarus to GSK referred to herein as AstraZeneca assumes responsibility for such supply hereunder (the “Initial Supply”). The Initial Supply GSK shall include, unless otherwise determined by the DCC, those quantities of Lead Licensed Product and Lead Licensed Compound and those activities described on Exhibit J. Ardelyx agrees to use Commercially Reasonable Efforts to deliver purchase the Initial Supply and perform from Santarus at the applicable transfer price specified in Section 6.1. PR Product sold by Santarus from its inventory to GSK as part of the Initial Supply will have a minimum of [***] shelf life remaining on the PR Product as of the delivery date to the carrier for GSK with respect to PR Product for trade [***] with respect to PR Product for samples); provided that (a) [***]; (b) [***]; and (c) [***]. Santarus in addition confirms that in relation to any supply of [***]. As used herein, “Initial Supply Term” means the period ending on the earlier of (i) the date that GSK receives shipment of PR Products from an Authorized Manufacturer pursuant to an agreement agreed between GSK and such *** Certain information in on this document page has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted portions. the activities Authorized Manufacturer as set forth in Exhibit J in such a manner Section 5.3, and within such timelines as are required under the Initial Development Plan. For the purposes of the Initial Supply, Ardelyx will source the Lead Licensed Compounds and Lead Licensed Products (ii) twelve (12) months from its current suppliers identified on Exhibit F, unless other suppliers are approved by the DCC. (b) The Parties agree and acknowledge that a separate manufacturing and supply agreement (“MSA”) is required to be entered into between the Parties to further govern the supply obligations undertaken by Ardelyx hereunder. The Parties shall also enter into a separate Quality Assurance Agreement (“QAA”) that shall define the manufacturing and supply quality responsibilities of the Parties for the Lead Licensed Compound and the Lead Licensed Product. The QAA shall further include provisions obligating Ardelyx to report to AstraZeneca any regulatory compliance issues with its suppliers as well as any critical quality non-conformances relating to the Lead Licensed Compound or Lead Licensed Product. The MSA and the QAA shall be negotiated in good faith between the Parties and be executed as promptly as possible following the Effective Date. The Parties’ objective is that the MSA and the QAA shall be entered into as soon as reasonably practicable and within sixty (60) days of the Effective Date and shall include, amongst other appropriate and detailed provisions, the provisions set out in Exhibit K. (c) The Transfer Price for any Licensed Products or Licensed Compounds supplied by Ardelyx will be a Development Expense, and will be reimbursed by AstraZeneca in compliance with the provisions of Section 4.3, regardless of whether AstraZeneca or Ardelyx has been assigned the responsibility for the Development activities in which the Licensed Products supplied by Ardelyx will be used. Subject to Section 8.2, AstraZeneca shall use Commercially Reasonable Efforts to assume responsibility for the supply of all Licensed Compounds and Licensed Products for use in the Development and Commercialization of Licensed Products beginning with the supplies of drug substance necessary to conduct Phase 3 Clinical Trials of the Licensed Product as well as the supply of drug product necessary to conduct the Phase 2b Clinical Trials for the Licensed Product (other than for the IBS-C Study) and continuing thereafter for the remainder of the Term; provided, however, that AstraZeneca may, by written notice the Parties shall discuss in good faith extending the Initial Supply Term for up to Ardelyx, elect to assume responsibility six (6) months in the event that GSK has not entered into an agreement with an Authorized Manufacturer for Development work associated with the Manufacture of the Licensed PR Product or Licensed Compound at any earlier time as set forth in Section 5.3 within twelve (12) months after the Effective Date, despite using Commercially Reasonable Efforts to do so. In such case, Santarus shall have no obligation to supply PR Products to GSK after the timing end of the transition Initial Supply Term. For clarity, after the end of such activitiesthe Initial Supply Term, GSK shall be responsible for obtaining its requirements for PR Products for the Territory from the Authorized Manufacturer, and the impact of the transition of such Development work on the supply of Licensed Product or Licensed Compound for Clinical Trials, Santarus shall be determined by the DCC, taking into account, among other things, the contractual obligations that Ardelyx may have to its current suppliers. Notwithstanding the foregoing, Ardelyx will supply Lead Licensed Compound and Lead Licensed Product for use in the IBS-C Study to be conducted pursuant to Section 5.3 through its current supplier identified on Exhibit J and the cost thereof shall be reimbursed to Ardelyx as part of the calculation of Development Expenses at a price equal to the Transfer Price, provided, however, that AstraZeneca’s obligation to contribute to the funding of the IBS-C Study shall not in total exceed [***], regardless of when such IBS-C Study is commenced during the Term, and provided, further, that in the event of shortage of supply of Lead Licensed Product or Lead Licensed Compound for whatever reason, the supply for the IBS-C Study shall not be allowed to cause a disruption or delay of, or unreasonable increase of the costs for, a Clinical Trial planned to be conducted for an indication other than the IBS-C Indication, meaning that in such event available quantities of Lead Licensed Product or Lead Licensed Compound shall first be allocated to planned Clinical Trials for the other indications before remaining quantities are used for the IBS-C Study. [***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested no liability with respect to such Authorized Manufacturer’s performance or breach of the omitted portionsagreement between GSK and such Authorized Manufacturer.