MANUFACTURING AND SUPPLY AGREEMENT
Exhibit 10.6
CERTAIN MATERIAL (INDICATED BY AN ASTERISK) HAS BEEN OMITTED FROM THIS DOCUMENT PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. THE OMITTED MATERIAL HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.
MANUFACTURING AND SUPPLY AGREEMENT
THIS MANUFACTURING AND SUPPLY AGREEMENT (the “AGREEMENT”) is made effective as of the 27th day of September, 2004 (the “EFFECTIVE DATE”), by and between SANTARUS, INC., a Delaware corporation, having offices at 00000 Xxxx Xxxxx Xxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx 00000, U.S.A. (“SANTARUS”) and OSG Norwich Pharmaceuticals Inc., a Delaware corporation, having offices at 0000 Xxxxx Xxxxxxx 00, Xxxxxxx, Xxx Xxxx 00000 (“MANUFACTURER”). Manufacturer and Santarus are sometimes referred to herein individually as a “PARTY” and collectively as the “PARTIES.”
ARTICLE 1
1.1 “AFFILIATE” means any individual, corporation, association, or other business entity, which directly or indirectly controls, is controlled by, or is under common control with the Party in question. As used in this definition of “Affiliate,” the term “control” shall mean, as to
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an entity, (a) direct or indirect ownership of [***] percent [***] or more of the voting interests or other ownership interests in the entity in question; (b) direct or indirect ownership of [***] percent [***] or more of the interest in the income of the entity in question; or (c) possession, directly or indirectly, of the power to direct or cause the direction of management or policies of the entity in question (whether through ownership of securities or other ownership interests, by contract or otherwise).
1.2 “API” means the active pharmaceutical ingredient known as omeprazole (Chemical Abstract No. 73590-58-6).
1.3 “API REIMBURSEMENT VALUE” means [***].
1.4 “APPLICABLE LAWS” mean all laws, statutes, ordinances, codes, rules, regulations, guidelines, and procedures enacted or made by a Government Authority, including, without limitation, the FDA and any applicable Foreign Regulatory Authority, that are in force during the Term, and in each case only to the extent applicable to the subject matter of, or the performance by the Parties of their respective obligations under, this Agreement. For purposes of this Agreement, “Applicable Laws” shall include, without limitation, the FFDCA, the regulations promulgated thereunder (including, without limitation, those regulations currently contained in Title 21 of the Code of Federal Regulations), and other rules and regulations promulgated under the FFDCA relating to the manufacture of pharmaceutical products; and equivalent laws, regulations and standards promulgated by a Government Authority that may assert jurisdiction over the Finished Product or any applicable Manufacturer manufacturing facilities; GMP, including the FDA’s Guidance for Industry, Manufacturing, Processing or Holding Active Pharmaceutical Ingredients, March 1998, and any updates thereto; and the FDA’s regulations for drug establishment registration.
1.5 “BULK API” means the bulk form of API manufactured by a Third Party manufacturer and provided to Manufacturer for use in manufacturing the Finished Product in accordance with the terms and conditions of this Agreement.
1.6 “BUSINESS DAY” means any day other than a Saturday, Sunday or statutory holiday in San Diego, California.
1.7 “CERTIFICATES OF COMPLIANCE” means (a) the certificate of analysis confirming the identity, strength, quality and purity of each invoiced batch of Finished Product to which it pertains (together with any certificate of analysis pertaining to the Bulk API contained in such batch), (b) the certificate of compliance confirming that the each invoiced batch of Finished Product was manufactured, tested, stored and supplied by Manufacturer in compliance with this Agreement, including without limitation the Specifications, GMP and Applicable Laws, and (c) such other certificates and confirmations as described in the Quality Agreement, each such certificate signed by an authorized signatory of Manufacturer.
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1.8 “COMMENCEMENT OF COMMERCIAL MANUFACTURING” means the date on which Manufacturer commences to manufacture commercial quantities of Finished Product pursuant to the first Firm Purchase Order submitted by Santarus under Section 2.2.3.
1.9 “DEFICIENCY NOTICE” has the meaning set forth in Section 3.5.1.
1.10 “EFFECTIVE DATE” has the meaning specified on the first page of this Agreement.
1.11 “FACILITY” means Manufacturer’s facilities located at 0000 Xxxxx Xxxxxxx 00, Xxxxxxx, Xxx Xxxx 00000, and any other facilities (including facilities utilized by subcontractors as permitted hereunder) that are used in connection with the activities performed by Manufacturer hereunder and are approved in writing by Santarus.
1.12 “FDA” means the United States Food and Drug Administration, and any successor thereto.
1.13 “FFDCA” means the Federal Food, Drug, and Cosmetic Act, 21 U.S.C. Section 321 et seq., as amended.
1.14 “FINISHED PRODUCT” means Santarus’ SAN-10 immediate-release omeprazole pharmaceutical product, as more particularly described in the Specifications.
1.15 “PURCHASE ORDER” has the meaning set forth in Section 2.2.3.
1.16 “FORECAST” has the meaning set forth in Section 2.2.2.
1.17 “FOREIGN REGULATORY AUTHORITY” means, for each country other than the United States of America, the authority or authorities having jurisdiction over the Finished Product that correspond to the FDA.
1.18 “GMP” means current good manufacturing practices applicable in the United States of America as described in:
(a) Parts 210 and 211 of Title 21 of the United States Code of Federal Regulations and the requirements imposed thereunder by the FDA, together with the latest FDA guidance and like documents pertaining to manufacturing and quality control practice, all as updated, amended and revised from time to time.
1.19 “GOVERNMENT AUTHORITY” means any supra-national, national, regional, state, provincial or local government, court, governmental agency, authority, board, bureau, instrumentality or regulatory body having jurisdiction over the Finished Product.
1.20 “INDA” means an investigational new drug application.
1.21 “MANUFACTURER EQUIPMENT” has the meaning set forth in Section 14.1.
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1.22 “MANUFACTURER SUPPLY COMMITMENT” has the meaning set forth in Section 2.2.4.
1.23 “INITIAL TERM” has the meaning set forth in Section 11.1.
1.24 “INVENTION” means information relating to any invention, innovation, improvement, development, discovery, computer program, device, trade secret, method, know-how, process, technique or the like, whether or not written or otherwise fixed in any form or medium, regardless of the media on which it is contained and whether or not patentable or copyrightable.
1.25 “MINIMUM RUN QUANTITY” means the minimum number of batches of Finished Product to be produced during the same cycle of manufacturing as set forth in EXHIBIT A hereto.
1.26 “NDA” means a New Drug Application filed with the FDA for marketing approval for a pharmaceutical product.
1.27 “MANUFACTURER MANUFACTURING RESPONSIBILITIES” has the meaning specified in Section 3.1 of this Agreement.
1.28 “PRICE” means the price for the manufacture and supply of Finished Product under this Agreement specified in the pricing structure set forth in EXHIBIT B, as may be amended from time to time in accordance with Section 6.2 of this Agreement.
1.29 “PRODUCT PATENTS” means (i) United States patents 6,489,346 and 5,840,737, (ii) [***] and (iii) [***].
1.30 “QUALITY AGREEMENT” means that certain quality agreement to be entered into by and between the Parties, following the Effective Date but reasonably in advance of the Commencement of Commercial Manufacturing, and relating to the obligations of the Parties regarding procedures to assure the identity, strength, purity and quality of the Finished Product.
1.31 “RAW MATERIALS” has the meaning set forth in Section 7.1.
1.32 “REGULATORY APPROVAL” means, with respect to a national or multinational jurisdiction, any approvals, licenses, registrations, or authorizations necessary for the manufacture (where relevant), marketing and sale of the Finished Product in such nation or jurisdiction.
1.33 “RENEWAL TERM” has the meaning set forth in Section 11.1.
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1.34 “RESPONSIBLE EXECUTIVE” means the President or the Chief Executive Officer of a Party, or his or her designated representative.
1.35 “SECONDARY MANUFACTURER SUPPLY COMMITMENT” has the meaning set forth in Section 2.2.4.
1.36 “SPECIFICATIONS” means the specifications for the Finished Product set forth in the Quality Agreement (as amended from time to time) together with applicable manufacturing protocols, packaging specifications, testing methodologies and all applicable requirements set forth in regulatory filings made with the FDA (including INDA’s and NDA’s) for the Finished Product.
1.37 “TERM” means the Initial Term and the Renewal Term.
1.38 “TERRITORY” means the United States of America.
1.39 “THIRD PARTY” means any individual or entity other than Manufacturer or Santarus or their respective Affiliates.
ARTICLE 2
SUPPLY, STORAGE, AND DELIVERY OF FINISHED PRODUCT
2.1 SUPPLY OF FINISHED PRODUCT. During the Term, subject to Section 2.2.4, Manufacturer shall manufacture and supply, in accordance with the provisions of this Agreement, the Specifications, GMP and Applicable Laws, [***].
Santarus shall use commercially reasonable efforts to determine its estimated requirements for Finished Product from Manufacturer and shall deliver to Manufacturer a written, non-binding, rolling [***] month forecast, by month, of such estimated requirements (the “FORECAST”). Santarus shall deliver the first Forecast to Manufacturer (the “INITIAL FORECAST”) as soon as reasonably practicable following the execution of this Agreement. After delivery of the Initial Forecast, Santarus shall, in accordance with the terms of this Agreement, update and revise the Forecast on a not less than [***] basis.
Santarus shall provide each updated Forecast not less than [***] calendar days prior to the beginning of the next [***]. Manufacturer shall use the Forecast for planning purposes and make available the production capacity and associated testing and release capacity required to manufacture and supply the forecasted quantities of Finished Product within the time frames specified in each Forecast.
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Manufacturer shall supply to Santarus [***] (the “MANUFACTURER SUPPLY COMMITMENT”) and Manufacturer further agrees to [***] (the “SECONDARY MANUFACTURER SUPPLY COMMITMENT”). Manufacturer shall ensure that adequate Manufacturing Equipment (as defined in Section 14.1 below) is available and dedicated to fulfill the supply and that such Manufacturing Equipment is maintained in good working order.
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Concurrent with the shipment of each Purchase Order of Finished Product, Manufacturer shall deliver to Santarus any applicable documentation corresponding to such shipment and such other documentation and information as may be necessary or desirable for complying with import, export, and customs laws, regulations and like requirements, as applicable.
2.6 INVOICES. MANUFACTURER SHALL INVOICE SANTARUS ON [***] AND SANTARUS SHALL PAY [***] FOLLOWING RECEIPT THEREOF (IN ACCORDANCE WITH SECTIONS 6.3 AND 15.5 BELOW).
2.7 LATE DELIVERY/SHORTAGES AND OVERAGES.
[***].
2.8 KEY PERFORMANCE INDICATORS.
2.8.1 For each [***] period during the Term, Manufacturer shall meet or exceed the key performance indicators established in good faith by Manufacturer and Santarus for such [***] period (collectively, as established with respect to the applicable [***] period, the “KPIS”). The preliminary categories of KPIs in respect of the first [***] period following Commencement of Commercial Manufacturing are set forth in EXHIBIT C, and the parties mutually agree to refine such KPIs reasonably in advance of the Commencement of Commercial Manufacturing. Thereafter, the KPIs will be reviewed by Manufacturer and Santarus at each [***] review meeting contemplated by Section 2.12 with the intention of amending, if necessary, the KPIs in respect of the forthcoming [***] period. If no such amendments are necessary or if amendments are not agreed, the KPIs in respect of such forthcoming [***] period shall be at least as beneficial to Santarus as the KPIs for the then current [***] period.
2.8.2 In the event that Manufacturer fails to meet one or more of the KPIs at any time during the term of this Agreement, then Manufacturer and Santarus shall work diligently to address such failure including, without limitation, the following:
(i) Manufacturer’s Customer Service Director and the Senior Manager of Supply Chain Management of Santarus shall meet within five (5) days of the
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determination of the sustained failure in order to establish a procedure to address the problem (the “REMEDIATION PLAN”). If such meeting does not occur within such five (5) days or if there is no agreement as to the Remediation Plan (a “STAGE 1 FAILURE”), then clause (ii) shall apply;
(ii) Manufacturer’s Plant Manager and the Director of Manufacturing of Santarus shall meet within five (5) days of the Stage 1 Failure in order to establish a Remediation Plan. If such meeting does not occur within such five (5) days or if there is no agreement as to the Remediation Plan (a “STAGE 2 FAILURE”), then clause (iii) shall apply; and
(iii) Manufacturer’s President and Senior Vice President, Manufacturing and Product Development of Santarus shall meet within five (5) days of the Stage 2 Failure in order to establish a Remediation Plan.
If the Remediation Plan is either not mutually agreed upon or is not, in the reasonable judgment of Santarus, implemented satisfactorily, then Manufacturer shall be deemed to be in material breach of its obligations hereunder and will be formally notified in writing of such status by the appropriate Santarus personnel. The Parties may mutually agree in writing to extend any of the time periods referenced in this Section 2.8.
Manufacturer shall assume responsibility for any loss or damage to such Finished Product while stored by Manufacturer.
2.10 MULTI-COUNTRY PACKAGING REQUIREMENTS. If and when Santarus decides that it wishes to have Manufacturer manufacture the Finished Product for countries in addition to the Territory, then Santarus shall inform Manufacturer of the packaging requirements for each new country and Manufacturer shall prepare a quotation for consideration by Santarus of the additional Raw Material costs, if any, and the Price for the Finished Product destined for such new country. The agreed additional packaging requirements and related packaging costs and Price shall be set out in a written amendment to this Agreement or otherwise recorded in a writing signed by the Parties.
2.11.1 Manufacturer shall promptly (and in any event no later than two (2) Business Days after Santarus’ request) provide an inventory status report to Santarus from time to time as reasonably requested by Santarus. In addition, Manufacturer shall monitor on a monthly basis the inventory of Bulk API held by Manufacturer and Manufacturer shall provide Santarus with a monthly inventory report (within five (5) Business Days following the last day of the applicable month) of the Bulk API held by Manufacturer, which shall contain the following information for such month:
QUANTITY RECEIVED: The total quantity of Bulk API that complies with the Specifications and is received at the Facility during the applicable period.
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QUANTITY DISPENSED: The total quantity of Bulk API dispensed at the Facility during the applicable period. The Quantity Dispensed is calculated by adding the Quantity Received to the inventory of Bulk API that complies with the Specifications and is held at the beginning of the applicable period, less the inventory of Bulk API that complies with the Specifications and is held at the end of such period. The Quantity Dispensed shall only include Bulk API received and dispensed in connection with commercial manufacturing of Finished Product and, for certainty, shall not include any Bulk API received or dispensed in connection with technical transfer activities or development activities during the applicable period, including, without limitation, any regulatory, stability, validation or test batches manufactured during the applicable period.
QUANTITY CONVERTED: The total amount of Bulk API contained in the Finished Products produced with the Quantity Dispensed, delivered by Manufacturer, and not rejected or returned in accordance with Section 3.5 or recalled under Article 5 as a result of a failure by Manufacturer to manufacture Finished Product that conforms to the Manufacturer Manufacturing Responsibilities.
2.11.2 In addition, Manufacturer shall reconcile the inventory of Bulk API held by Manufacturer on a [***] basis and shall provide a report to Santarus concerning such reconciliation within ten (10) days following the end of the applicable [***]. Within [***] days of the end of each six (6) month period after the Commencement of Commercial Manufacturing, Manufacturer shall calculate the “ACTUAL SIX-MONTH YIELD” or “ASY” for the Finished Product during the six-month period, which ASY is the percentage of the Quantity Dispensed that was converted to Finished Products and is calculated as follows:
Quantity Converted during the six-month period
Quantity Dispensed during the six-month period
2.11.3 After Manufacturer has produced a minimum of [***] batches of Finished Product and has produced batches for at least [***] months pursuant to this Agreement, the Parties will mutually agree on the target yield (each, a “TARGET YIELD”). Thereafter, Manufacturer shall strive to maintain Actual Six-Month Yield levels for each Finished Product above the applicable Target Yield. If the Actual Six-Month Yield falls below the respective Target Yield in any six month period, then Manufacturer shall reimburse Santarus for the cost of the shortfall based on the following calculation:
[***]
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2.11.4 Manufacturer shall notify Santarus in writing in the event that an amount in excess of [***] kilograms of Bulk API is damaged, lost or otherwise rendered unusable (including to the extent contained in any non-conforming Finished Product) at any one time (a “Significant API Loss”) as soon as practicable following such incident. In addition, and notwithstanding any provision in this Section 2.11 to the contrary, Manufacturer shall reimburse Santarus for such Bulk API within [***] days after discovery of the Significant API Loss.
2.11.5 For the purposes of clarity, any Bulk API damaged, lost or otherwise rendered unusable in connection with the Significant API Loss shall be included in the calculation of the Quantity Dispensed and any amount paid by Manufacturer in accordance with subsection 2.11.4 shall be credited against the amount, if any, to be paid by Manufacturer to Santarus pursuant to subsection 2.11.3.
ARTICLE 3
3.1 FINISHED PRODUCT. Manufacturer hereby warrants and covenants that all Finished Product manufactured and supplied to Santarus under this Agreement: (a) shall have been manufactured, packaged, tested and stored in compliance with the Specifications, GMP, Applicable Laws and the terms and conditions of this Agreement and the Quality Agreement; (b) shall not be adulterated, or misbranded within the meaning of the FFDCA or other Applicable Laws as of the time that the Finished Product is transferred to the carrier at Manufacturer’s shipping point; and (c) will have been shipped to Santarus not later than [***]days after the date of the product blend manufacture (unless any delay in shipment beyond such [***] day period is due solely to a delay by Santarus in conducting its review for the final release of the Finished Product). The foregoing obligations are referred to in this Agreement as the “MANUFACTURER MANUFACTURING RESPONSIBILITIES.”
3.2 MANUFACTURING FACILITY. Manufacturer will manufacture Finished Product at the Facility. Manufacturer shall not manufacture any Finished Product in any other facility without first obtaining Santarus’ prior written consent.
3.3 TESTING AND RELEASE BY MANUFACTURER. Manufacturer shall conduct chemical identity testing for all Bulk API received at the Facility within [***] days of such receipt. Further, Manufacturer shall conduct full release testing of all Bulk API received at the Facility not later than [***] months after the date of receipt in accordance with the
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procedures and using the analytical testing methodologies set forth in the Specifications and the Quality Agreement. Manufacturer shall promptly (and in any event within five (5) days following completion of the applicable testing) notify Santarus in writing of any failure of the Bulk API to conform to the Specifications for same, and any other problem it may identify with the Bulk API detected during the inspection and testing process. Prior to shipping (or temporarily storing, if requested by Santarus) any order, Manufacturer shall test each batch of Finished Product manufactured under this Agreement, and Raw Materials used for such batch, for conformity with the Specifications. Manufacturer shall conduct all such testing in accordance with the procedures and using the analytical testing methodologies set forth in the Specifications and the Quality Agreement. Manufacturer shall retain sufficient quantities of all shipped Finished Product, Bulk API and Raw Materials to perform at least full duplicate quality control testing. Retained repository samples of all shipped Finished Product, Bulk API and Raw Materials shall be maintained in a suitable storage facility until one (1) year after expiry or such longer period as may be required by Applicable Laws. All such samples shall be available for inspection and testing by Santarus at reasonable intervals upon reasonable notice. Santarus shall be responsible, at all times, for the final release of the Finished Product, and Manufacturer shall not ship any Finished Product until Santarus has completed its final release. Upon prior written consent from Santarus, Manufacturer may arrange for subcontractors to perform specific testing services for Raw Materials arising under this Agreement; provided that (a) all such subcontractors shall be duly qualified by Manufacturer under GMP and Applicable Laws to perform such testing; (b) Manufacturer shall at all times remain fully responsible to Santarus for the performance of all obligations hereunder related to such subcontracted testing services; and (c) no subcontractors shall be utilized in connection with release testing of the Finished Product.
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susceptible to discovery upon receipt by visual inspection of the Finished Product, including those requiring laboratory analysis, within [***] days after discovery thereof by Santarus). Should Santarus fail to provide Manufacturer with the Deficiency Notice within the applicable [***] -day period, then the delivery shall be deemed to have been accepted by Santarus on the [***] day after delivery or discovery, as applicable.
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Regulatory Authority, Manufacturer shall not implement such change unless and until the necessary approval has been obtained by Santarus in writing. In no event shall Manufacturer implement any other modification or addition to the Specifications, including without limitation, changes in raw materials, equipment or methods of production or testing for the Finished Product, without the prior written consent of Santarus, which consent may be withheld for any or no reason.
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ARTICLE 4
REGULATORY MATTERS AND QUALITY CONTROL
4.1 COMPLIANCE BY MANUFACTURER. Manufacturer shall remain in compliance with all Applicable Laws, including GMP, at all times during the Term and, without limiting the generality of the foregoing, maintain a quality control program consistent with GMP as required by the FDA, and to the extent the parties have reached agreement pursuant to Section 2.10 with respect to countries in addition to the Territory, the applicable Foreign Regulatory Authorities.
4.2 SANTARUS’ REGULATORY RESPONSIBILITY. Santarus shall be responsible for obtaining and maintaining all regulatory filings and approvals (excluding the overall licensure and permitting of the Facility) for the manufacture and marketing of the Finished Product, including without limitation all INDA’s and NDA’s for the Finished Product. Santarus shall control and own all such filings and approvals. Manufacturer will supply to Santarus from time to time, all such data relating to the Finished Product, including release test results, complaint test results, all investigations (in manufacturing, testing and storage), and the like, that Santarus reasonably requires in order to complete any such filing or approval, including any annual product review report that Santarus is required to file with the FDA and as provided in the Quality Agreement. At Santarus’ request, Manufacturer may prepare annual product review reports on behalf of Santarus and in accordance with Santarus’ instructions. Santarus will compensate Manufacturer for the preparation of annual product review reports based upon a mutually agreed upon (in writing) cost schedule.
4.4 COMMUNICATIONS. Each party may communicate with the FDA or any Foreign Regulatory Authority or Government Authority regarding the Finished Products if such communication is necessary to comply with the terms of this Agreement or the requirements of any Applicable Law, governmental order or regulation; provided, however, in the event such requirement applies to Manufacturer, Manufacturer shall notify Santarus in writing of the requirement and pending communication and, unless there is a legal prohibition against doing so, Manufacturer shall permit Santarus to accompany Manufacturer and take part in any communications with the FDA or any Foreign Regulatory Authority or Government Authority, and to receive copies of all such communications to and from the FDA or any Foreign Regulatory Authority or Government Authority.
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4.5.1 Manufacturer shall make its internal practices, books and records relating to its manufacture of the Finished Product available and allow access to all facilities used for manufacturing the Finished Product to the FDA, any Foreign Regulatory Authority and any other Government Authority having jurisdiction over the manufacture of the Finished Product for the purposes of determining Manufacturer’s compliance with GMP and Applicable Laws.
4.5.2 Manufacturer agrees to advise Santarus by telephone and facsimile immediately of any proposed or announced visit or inspection (and shall permit Santarus to be onsite at any such visit or inspection), and as soon as possible but in any case on the same business day of any unannounced visit or inspection, by the FDA, any Foreign Regulatory Authority or any other Government Authority relating to the Finished Product. Manufacturer shall provide Santarus with a reasonable description in writing of each such visit or inspection promptly (but in no event later than five (5) calendar days) thereafter, and with copies of any letters, reports or other documents (including form 483’s) issued by any such authorities that relate to the Finished Product. Santarus may review Manufacturer’s responses to any such reports and communications, and Santarus’ comments and suggestions shall be incorporated into such response.
4.5.3 If the FDA or any other Foreign Regulatory Authority or any other Government Authority conducts an inspection of the Facility in circumstances that are not related to the manufacturing of the Finished Product (as contemplated by subsection 4.5.2 above) and issues a 483 observation, inspection report or other formal or informal document in respect of such inspection which questions Manufacturer’s compliance with critical or major GMP standards relating to operations at the Facility which is otherwise could have an adverse impact on the Finished Product then Manufacturer shall notify Santarus promptly (but in no event later than five (5) calendar days) after Manufacturer receives a written copy of such observation, report or document.
4.5.4 Manufacturer shall keep Santarus informed of (i) the remediation plan Manufacturer adopts to alleviate any concerns raised by the FDA or any other Foreign Regulatory Authority contemplated by Sections 4.5.2 or 4.5.3, (ii) progress in implementing the remediation plan and (iii) the formal responses of the FDA or applicable Foreign Regulatory Authority to such remediation plan and its implementation.
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including the receipt of any notice, warning, citation, finding, report or service of process or the occurrence of any release, spill, upset, or discharge of hazardous substances (as may be defined under Applicable Laws) relating to Manufacturer’s compliance with this Section 4.6 and which relates to the manufacture of Finished Product. Santarus reserves the right to conduct an environmental inspection of the Facility, at reasonable intervals during normal business hours and with reasonable advance notice, for the purpose of determining compliance with this Section 4.6. Such inspection shall not relieve Manufacturer of its obligation to comply with all applicable environmental and health and safety laws and does not constitute a waiver of any right otherwise available to Santarus.
4.7 END-USER INQUIRIES AND COMPLAINTS. Subject to Manufacturer’s obligation to report certain information on a more expedited basis in respect of Adverse Experiences as described in Section 5.1 below, Manufacturer shall notify and refer to Santarus, within three (3) Business Days after receipt, all communications from end-users of the Finished Product, including without limitation, inquiries regarding the Finished Product and its uses, and complaints, comments and suggestions regarding the Finished Product and its effects on users. Santarus shall have the sole right to respond to all such communications and Manufacturer shall provide to Santarus reasonable cooperation and assistance in effecting such responses.
ARTICLE 5
5.1 ADVERSE EXPERIENCE REPORTING. Manufacturer shall notify Santarus promptly and not later than twenty-four (24) hours after it becomes aware of (a) any information concerning any potentially serious or unexpected side effect, injury, toxicity or sensitivity reaction or any unexpected incidence or other adverse experience (an “ADVERSE EXPERIENCE”) and the severity thereof associated with the use of the Finished Product, whether or not determined to be attributable to the Finished Product; or (b) any information regarding any pending or threatened action which may affect the safety or efficacy claims of the Finished Product or the continued marketing of the Finished Product in any nation or jurisdiction. Further and without limiting the foregoing, Manufacturer shall notify Santarus by telephone and facsimile within twenty-four (24) hours after Manufacturer first becomes aware of any serious Adverse Experience that gives cause for concern or is unexpected or that is fatal, life-threatening (as it occurred), permanently disabling, requires (or prolongs) inpatient hospitalization, represents a significant hazard, or is a cancer or a congenital anomaly or represents an overdose, or any other circumstance that might necessitate a recall, expedited notification of FDA or any other relevant Government Authorities or a significant change in the label of the Finished Product, including, without limitation, information concerning any incident that causes Finished Product shipped to Santarus or its labeling to be mistaken for or, applied to, another product, information concerning any bacteriological contamination, or any significant chemical, physical, or other change or deterioration in the Finished Product shipped to Santarus, or any failure of one or more batches of Finished Product shipped to Santarus to meet Specifications or to conform with Applicable Laws, and any deviation from the specified environmental conditions for shipping or storage of the Finished Product. To the extent that Santarus becomes aware of any Adverse Experience that appears to be related to the manufacture of Finished Product, Santarus shall notify Manufacturer promptly and not later than twenty-four (24) hours after Santarus becomes aware of such Adverse Experience. In connection with any
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such Adverse Experience, each Party shall make such reports as are necessary to comply with Applicable Laws, at its sole expense. Further, in the event a Party (or its Affiliates) receives a communication or directive from a Government Authority commencing or threatening seizure of Finished Product, or other removal from the market of Finished Product, such Party shall transmit such information to the other Party within twenty-four (24) hours of receipt.
5.3 RECALL EXPENSE. [***] Nothing in this Section 5.3 shall be construed to limit the rights and remedies available to Santarus at law or in equity.
ARTICLE 6
6.2 CHANGES IN PRICE OF FINISHED PRODUCT. [***]
In connection with a Price review pursuant to clause (a) of this Section 6.2, Manufacturer shall deliver to Santarus reasonably detailed documentation concerning increases or decreases in the cost of Raw Materials or Manufacturer’s cost of manufacturing to facilitate the discussion. In connection with all fee adjustment requests pursuant to clause (b) of this Section 6.2, Manufacturer shall deliver to Santarus a revised Exhibit B and such budgetary pricing information or other documentation reasonably sufficient to demonstrate that a Price adjustment is justified. Each of Santarus and Manufacturer shall forthwith use all reasonable efforts to agree on a revised Price in respect of each affected Finished Product. In the event the Parties are unable to reach agreement concerning adjustments to the Price, such dispute shall be resolved in accordance with Article 13. Until such time as dispute is resolved the price per Finished Product shall be the most current mutually agreed upon Price.
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ARTICLE 7
7.1 PURCHASE OF RAW MATERIALS. Except for the Bulk API which will be supplied to Manufacturer by Santarus, Manufacturer shall purchase all packaging components (including labels, product inserts and other labeling for the Finished Product), raw materials and other ingredients for the manufacture of the Finished Product (collectively, “RAW MATERIALS”). Any obligation that Santarus may have under this Agreement to purchase or reimburse Manufacturer for expired or obsolete Raw Materials shall in no event extend beyond a [***] month supply of such Raw Materials based on the most recent Forecast. Manufacturer shall utilize and manufacture all Raw Materials and Bulk API on a first-in, first-out basis.
7.2 STORAGE OF BULK API AND RAW MATERIALS. Manufacturer shall store the Bulk API and Raw Materials at Manufacturer’s storage facility at the Facility with due care and attention to the requirements set forth in the Specifications and in accordance with GMP and
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Applicable Laws so as to protect such materials from loss or damage. While the Bulk API and the Raw Materials are in storage, Manufacturer shall assume the risk of loss or damage to such materials from any cause whatsoever. Manufacturer shall ensure that, while such Bulk API is in storage, such materials do not become subject to any lien or other security interest securing any obligation owed or alleged to be owed by Manufacturer to any person or entity.
7.3 SANTARUS’ RESPONSIBILITY FOR COST OF RAW MATERIALS. If Raw Materials become obsolete or otherwise no longer useable in the manufacturing process for the Finished Product because (a) Santarus deviated from the Forecast, or (b) the Specifications have been changed pursuant to Section 3.6, Manufacturer shall use its commercially reasonable efforts to cover the cost of excess Raw Materials by: (i) returning such Raw Materials to the vendor, (ii) selling such Raw Materials, (iii) utilizing such Raw Materials in manufacturing products for its other customers to the extent possible, and (iv) implementing other measures to mitigate the loss due to such excess Raw Materials. To the extent that Manufacturer is unable to off-set such loss fully, Santarus shall reimburse Manufacturer for such Raw Materials but solely to the extent actually incurred by Manufacturer and in no event beyond the limit of liability set forth in Section 7.1.
ARTICLE 8
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8.2.1 To have been known to or in the possession of the Receiving Party prior to the date of its actual receipt from the Disclosing Party;
8.2.2 To be or to have become readily available to the public other than through any act or omission of any Party in breach of any confidentiality obligations owed to the Disclosing Party;
8.2.3 To have been disclosed to the Receiving Party, other than under an obligation of confidentiality, by a Third Party which had no obligation to the Disclosing Party not to disclose such information to others; or
8.2.4 To have been subsequently independently developed by the Receiving Party without use of or reference or access to the Disclosing Party’s Confidential Information.
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other equitable relief enjoining any breach or threatened breach of this Agreement. The Receiving Party shall notify the Disclosing Party in writing immediately upon the Receiving Party’s becoming aware of any such breach or threatened breach.
ARTICLE 9
9.1 OWNERSHIP OF INTELLECTUAL PROPERTY.
Manufacturer agrees that Santarus shall own all right, title and interest in and to all Inventions, and any intellectual property rights (including patent rights and trade secret rights) therein, covering:
(a) Santarus’ Finished Product, the Specifications therefor and the uses thereof; and
(b) any method of manufacture directly and solely related to the Finished Product, regardless of whether such Invention was conceived, reduced to practice or created solely by employees or agents of Manufacturer or its Affiliates or jointly by the employees or agents of Santarus or its Affiliates with the employees or agents of Manufacturer or its Affiliates (collectively, the “PRODUCT INVENTIONS”). As to all Inventions other than Product Inventions, including without limitation, those Inventions relating to manufacturing process innovations that are generally applicable to the manufacture of drug compounds and not solely to the manufacture of the Finished Product (collectively, the “OTHER INVENTIONS”), the parties agree that the following shall apply:
(i) All Other Inventions, which are conceived, reduced to practice, or created solely by employees or agents of Manufacturer or its Affiliates in the course of performing the services under this Agreement (including any pre-existing technology of Manufacturer which Manufacturer so employs), shall be owned by Manufacturer. Manufacturer shall and hereby does grant to Santarus and its Affiliates a perpetual, royalty-free, exclusive, worldwide, irrevocable license, to use and practice all such Manufacturer-owned Other Inventions to manufacture and have manufactured the Finished Products and to use, import, offer to sell, and sell the same, with full right to sublicense to any Third Party in connection with the manufacture, sale or distribution of the Finished Product.
(ii) All Other Inventions which are conceived, reduced to practice, or created by employees or agents of Santarus or its Affiliates (including any pre-existing technology of Santarus which Santarus shares with Manufacturer hereunder), shall be owned by Santarus. Santarus shall and hereby does grant to Manufacturer and its Affiliates a royalty-free, non-exclusive license during the Term, without the right to sublicense, to use and practice all such Santarus-owned Other Inventions solely to manufacture the Finished Products hereunder.
(iii) All Other Inventions which are conceived, reduced to practice, or created jointly by: (i) employees or agents of Santarus or its Affiliates; and by (ii) employees or agents of Manufacturer or its Affiliates, pursuant to this Agreement, shall
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be owned by Santarus, unless the parties have agreed in writing to a different arrangement in another consulting or services agreement which is more specific to the services provided by Manufacturer in connection with such Other Invention. Santarus shall and hereby does grant to Manufacturer and its Affiliates a perpetual, royalty-free, non-exclusive, worldwide, irrevocable license to use and practice all such Santarus-owned Other Inventions, with the right to sublicense to any Third Party.
Each Party agrees to cooperate with the other or its designee(s), both during and after the Term, in applying for, obtaining, perfecting, evidencing, sustaining and enforcing the other’s right, title and interest in and to the Product Inventions and Other Inventions, including, without limitation, executing such written instruments as may be prepared by the other and doing such other acts as may be necessary in the opinion of the other to obtain a patent, register a copyright, or otherwise enforce the other’s rights in such Product Inventions and Other Inventions (and each Party hereby irrevocably appoints the other and any of its officers and agents as its attorney in fact to act for and on the other’s behalf and instead of it, with the same legal force and effect as if executed by it). Each Party hereby represents, warrants, and covenants that all employees, consultants and agents performing services for it hereunder have assigned in writing all of their right, title and interest in, to and under any and all Product Inventions and Other Inventions to such Party. All Product Inventions and Other Inventions and embodiments thereof shall be deemed to be Confidential Information of the Party to own such Invention pursuant to Section 9.1, and the other Party shall be subject to the obligations of nonuse and nondisclosure under Article 8 with respect thereto.
ARTICLE 10
REPRESENTATIONS, WARRANTIES AND COVENANTS
10.1.1 such Party is duly organized and validly existing and in good standing under the laws of the jurisdiction of its formation;
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10.1.2 such Party has the full corporate power and is duly authorized to enter into, execute and deliver this Agreement, and to carry out and otherwise perform its obligations thereunder;
10.1.3 this Agreement has been duly executed and delivered by, and is a legal and valid obligation binding upon such Party and the entry into, the execution and delivery of, and the carrying out and other performance of its obligations under this Agreement by such Party (a) does not conflict with, or contravene or constitute any default under, any agreement, instrument or understanding, oral or written, to which it is a party, including, without limitation, its certificate of incorporation or by-laws, and (b) does not violate Applicable Law or any judgment, injunction, order or decree of any Government Authority having jurisdiction over it; and
10.1.4 in connection with its performance under this Agreement, it shall comply with all Applicable Laws.
10.2.1 At all times during the Term, all parts of the Facility that are directly associated with the testing and storage of the Bulk API and Raw Materials and the manufacturing, packaging, testing and storage of the Finished Products shall remain in compliance with all Applicable Laws, and all other parts of the Facility shall remain, in all material respects, in compliance with all Applicable Laws.
10.2.2 Manufacturer shall obtain and maintain all necessary licenses, permits or approvals required by Applicable Laws in connection with the manufacture, packaging, testing and storage of the Finished Product, including, without limitation, permits related to manufacturing facilities;
10.2.3 Manufacturer’s manufacturing facilities are in compliance with GMP;
10.2.4 Manufacturer has disclosed to Santarus any and all form 483’s, warning letters or similar notices relating to its Facility and import alerts for any other products manufactured in such Facility issued during the last five (5) years;
10.2.5 Title to all the Finished Product sold hereunder, upon payment thereof by Santarus as provided herein, shall pass to Santarus free and clear of any security interest, lien or other encumbrance;
10.2.6 Throughout the Term, Manufacturer has, and shall maintain, sufficient facilities, resources, and a work force suitably qualified and trained to meet its obligations to supply the Finished Product to Santarus pursuant to this Agreement;
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10.2.7 The contributions of Manufacturer to the manufacture of the Finished Product in accordance with this Agreement do not infringe any Third Party rights (including, without limitation, any intellectual property rights) anywhere in the world;
10.2.8 Manufacturer is not aware of any pending or threatened claims against Manufacturer asserting that any of the activities of Manufacturer relating to the manufacture, import, use, or sale of pharmaceutical products, or the conduct of the activities contemplated herein by Santarus, infringe, misappropriate, or violate the rights of any Third Party; and
10.2.9 Manufacturer shall ensure all employees, consultants, subcontractors and agents performing services for Manufacturer hereunder assign in writing to Manufacturer all of their right, title and interest in, to and under any and all Inventions.
10.2.10 It nor any of its employees, consultants, subcontractors and agents performing services for Manufacturer hereunder is (1) under investigation by the FDA for debarment action, (2) presently debarred under the regulations of the FDA, or (3) presently debarred pursuant to the Generic Drug Enforcement Act of 1992 (21 U.S.C. ‘301 et seq.).
ARTICLE 11
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ARTICLE 12
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12.3.1 The Indemnitee shall furnish promptly to the Indemnitor copies of all papers and official documents in the Indemnitee’s possession or control which relate to any Claims; provided, however, that if the Indemnitee defends or participates in the defense of any Claims, then the Indemnitor shall also provide such papers and documents to the Indemnitee. The Indemnitee shall reasonably cooperate with the Indemnitor in defending against any Claims.
12.3.2 The Indemnitor shall have the right, by prompt written notice to the Indemnitee, to assume direction and control of the defense of any Claim, with counsel reasonably satisfactory to the Indemnitee and at the sole cost of the Indemnitor, so long as (a) the Indemnitor shall promptly notify the Indemnitee in writing (but in no event more than thirty (30) days after the Indemnitor’s receipt of notice of the Claim) that the Indemnitor intends to indemnify the Indemnitee pursuant to this Article absent the development of facts that give the Indemnitor the right to claim indemnification from the Indemnitee, and (b) the Indemnitor diligently pursues the defense of the Claim.
12.3.3 If the Indemnitor assumes the defense of the Claim as provided in this Section 12.4, the Indemnitee may participate in such defense with the Indemnitee’s own counsel who shall be retained, at the Indemnitee’s sole cost and expense; provided, however, that neither the Indemnitee nor the Indemnitor shall consent to the entry of any judgment or enter into any settlement with respect to the Claim without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed. If the Indemnitee withholds consent in respect of a judgment or settlement involving only the payment of money by the Indemnitor and which would not involve any stipulation or admission of liability or result in the Indemnitee becoming subject to injunctive relief or other relief, the Indemnitor shall have the right, upon written notice to the Indemnitee within five (5) days after receipt of the Indemnitee’s written denial of consent, to pay to the Indemnitee, or to a trust for its or the applicable Third Party’s benefit, such amount established by such judgment or settlement in addition to all interest, costs or other charges relating thereto, together with all attorneys’ fees and expenses incurred to such date for which the Indemnitor is obligated under this Agreement, if any, at which time the Indemnitor’s rights and obligations with respect to such Claim shall cease.
12.3.4 The Indemnitor shall not be liable for any settlement or other disposition of a Claim by the Indemnitee which is reached without the written consent of the Indemnitor.
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issuing company, the policy number, the effective date, the expiration date and the limits of liability. The insurance certificate shall further provide for a minimum of 30 days’ written notice to the insured of a cancellation of, or material change in, the insurance. If a Party is unable to maintain the insurance policies required under this Agreement through no fault on the part of such Party, then such Party shall forthwith notify the other Party in writing and the parties shall in good faith negotiate appropriate amendments to the insurance provision of this Agreement in order to provide adequate assurances.
12.5 NO CONSEQUENTIAL DAMAGES. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE RESPONSIBLE OR LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, PUNITIVE OR OTHER LIKE DAMAGES, OR FOR ANY LOSS OF PROFITS, LOSS OF REVENUE, LOSS RESULTING FROM INTERRUPTION OF BUSINESS OR LOSS OF USE OR DATA , EVEN IF SUCH PARTY, OR ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES, OR AGENTS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES AND NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED REMEDY OF ANY KIND, UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER THEORY, ARISING OUT OF OR RELATING IN ANY WAY TO THIS AGREEMENT OR ITS IMPLEMENTATION. FOR THE AVOIDANCE OF DOUBT, NOTHING IN THIS SECTION 12.5 SHALL BE INTERPRETED TO LIMIT THE INDEMNIFICATION OBLIGATION OF EITHER PARTY IN CONNECTION WITH A PRODUCT LIABILITY CLAIM WITH RESPECT TO THE CHARACTERIZATION OF DAMAGES OR LOSSES CLAIMED BY A THIRD PARTY AS BEING INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY, PUNITIVE OR OTHER LIKE DAMAGES OR LOSSES.
ARTICLE 13
GOVERNING LAW; DISPUTE RESOLUTION
13.1 GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the State of California without giving effect to any choice of laws rule that would cause the application of the laws of any jurisdiction other than the internal laws of the State of California, to the rights and duties of the Parties.
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13.2.2 Arbitration. Any dispute arising out of or in connection with this Agreement including any question regarding its existence, validity or termination, that can not be resolved through negotiation between Responsible Executives, shall be finally resolved by arbitration under the Rules of the American Arbitration Association. The arbitration shall consist of a single arbitrator mutually agreed by the Parties, or, in the absence of such agreement, each Party shall select an arbitrator and those two arbitrators shall select a third arbitrator who shall arbitrate the dispute. Any arbitration shall take place in San Diego, California, U.S.A. The award of the arbitrator shall be final and binding. The Parties waive any right to appeal the arbitration award, to the extent a right to appeal may be lawfully waived. Each Party retains the right to seek judicial assistance: (a) to compel arbitration; (b) to obtain interim measures of protection pending or during arbitration; and (c) to enforce any decision of the arbitrator, including the final award.
ARTICLE 14
ARTICLE 15
15.1 [***]
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IF TO MANUFACTURER: MANUFACTURER
OSG Norwich Pharmaceuticals Inc.
0000 Xxxxx Xxxxxxx 00
Xxxxxxx, Xxx Xxxx 00000
Attention: President
Fax: (000) 000-0000
IF TO SANTARUS: SANTARUS, INC.
00000 Xxxx Xxxxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Attn: Senior Vice President, Manufacturing
and Product Development
With a copy to: SANTARUS, INC.
00000 Xxxx Xxxxx Xxx Xxxxx, Xxxxx 000
Xxx Xxxxx XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Attn: Legal Affairs
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Unless an earlier date can be proven by competent evidence, the date of receipt of any notice given under this Agreement, including, without limitation, any invoice provided by Manufacturer to Santarus, shall be deemed to be the date given if delivered personally or by facsimile transmission receipt verified, seven (7) days after the date mailed, if mailed by registered or certified mail return receipt requested, postage prepaid, and two (2) days after the date sent if sent by express courier service.
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| MANUFACTURER: | SANTARUS: | |||||||
| OSG NORWICH PHARMACEUTICALS INC. | SANTARUS, INC. | |||||||
| By: | /s/ Xxxxx Xxx |
By: |
/s/ Xxxxxx X. Xxxxxx | |||||
| Name: | Xxxxx Xxx | Name: |
Xxxxxx X. Xxxxxx | |||||
| Title: |
President |
Title: |
President & CEO | |||||
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EXHIBIT A
MINIMUM RUN QUANTITY
MINIMUM RUN QUANTITY
[***]
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EXHIBIT B
PRICING INFORMATION
FINISHED PRODUCT:
[***]
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EXHIBIT C
KEY PERFORMANCE INDICATORS
[***]
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