Exhibit 10.7
Agreement
Agreement ("Agreement") made as of this 30th day of Nov, 2000, by and
between BioDelivery Sciences Inc, the ("Company"), and Biotech Specialty
Partners, LLC, a Delaware limited liability company ("BSP").
I. Introductory Statement
The "BSP Network" is an alliance of biotechnology and pharmacy, marketing
and distribution companies being created by contract between BPS and such
companies. The BSP Network provides strategic relationships and affiliations
designed to empower biotechnology firms to further product research and
development and when its products become marketable, to have in place a
marketing and distribution network at both wholesale and retail. BSP alliances
generally position biotech companies with overall margins that are
significantly higher than pharmaceutical company royalty arrangements by
offering distribution capabilities as well as contract research and
manufacturing assistance.
Company is a biopharmaceutical product development company which is
focused on introducing new technologies using its patented delivery system,
such as antifungal, antibiotic, antiviral, oncology chemotherapy, monoclonal
antibodies, hormones, gene therapies, and vaccines, that improve the
performance of existing drugs and address significant problems such as drug
resistance and toxicity.
Company has determined that it is in its best interests to become a member
of the BSP Network and BSP has determined that Biotech's proprietary rights to
certain drugs make Company an appropriate party to join the BSP Network.
Accordingly, this Agreement is being entered into to effect Company' membership
into the BSP Network and to create a contracted alliance consistent with such
membership.
II. Terms and Conditions
Company and BSP, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, do hereby agree as follows:
1. Covered Products.
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Company hereby appoints BSP as a non-exclusive distributor of its drugs
and products for Specialty Pharmacy, Institutional pharmacies, and mail
order/online distribution.
2. Right-of-first Refusal.
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Company hereby grants to BSP the right to have any therapeutic drug or
device requiring or not requiring (i.e. OTC) U.S. Food and Drug
Administration ("FDA") approval for marketing and sale in the United
States and to which Company possesses any proprietary rights and/or of
which Company is sponsoring the development become Covered Products
under this Agreement.
3. Responsibilities of Company re Covered Products.
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During the term of this Agreement, with respect to Covered Products, Company
shall, as deemed appropriate by the Company:
(i) Direct and pay for the research and development of a Covered Product
with the objective of obtaining FDA approval for its marketing and
sale in the United States. Company may sponsor/or contract with
others for such research and development activities provided that it
does not grant to others any manufacturing, selling or use rights
without BSP's prior written approval.
(ii) Direct, prosecute with due diligence and expediency and pay for the
application and procurement of United States patent rights and
patents rights in such foreign countries as may be deemed prudent in
the circumstances after consultation with BSP.
(iii) Following FDA marketing approval of a Covered Product, direct and
pay for such clinical trials, tests, record keeping and reporting
functions as may be required or appropriate to maintain in good
standing such approval.
(iv) Perform the functions described in (i)-(iii) above with respect to
obtaining marketing approvals in non-U.S. jurisdictions as may be
appropriate in the circumstances.
(v) Manufacture or arrange for the manufacturing of Covered Products in
accordance with FDA prescribed "good manufacturing practices." All
packaging and labeling of Covered Products shall be produced in
accordance with applicable FDA and other governmental regulations.
Company shall consult with BSP with respect to packaging design.
Company shall maintain from time to time adequate inventories of
Covered Products based upon sales projections provided from time to
time by BSP.
(vi) Keep BSP fully informed of all activities described in (i)-(v) above
and consult with BSP on research and development strategies and
progress.
(vii) Provide marketing, technical and sales support for BSP's marketing
and distribution of a Covered Product.
4. Rights and Responsibilities of BSP re Covered Products.
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During the term of this Agreement, with respect to Covered Products, BSP
shall, as deemed appropriate by BSP:
(i) Provide consulting assistance to Company with respect to the
research and development of Covered Products. BSP will refer to
Company appropriate CRO's (Contract Research Organizations) to
assist Company with such activities, including regulatory
compliance. Such CRO's may be members of the BSP Network.
(ii) Consult with Company concerning the design of packaging and package
inserts.
(iii) Develop and maintain a Specialty Pharmacy marketing program for
each Covered Product, including a marketing plan, advertising,
marketing and sales materials, pricing strategies, packaging
materials, sales training and other matters customarily included
in a comprehensive marketing program for a health-industry
product. BSP shall coordinate such a program with the support
services to be provided by Company pursuant to Section (3)(vii)
above.
(iv) Establish a distribution program for each Covered Product, BSP
shall designate wholesalers/distribution/retailers, some or all
of which may be members of the BSP Network. BSP's right to
distribute a Covered Product shall be exclusive to it for
Specialty Pharmacy and Mail order/online pharmacy, except as
provided in Section 9(b) below. BSP shall keep Company advised
from time to time of anticipated sales so as to allow Company to
maintain adequate inventories of Covered Products.
(v) Keep Company fully informed of all activities described in (i) -
(iv) above and consult with and assist BSP on continuing
research and development and regulatory compliance matters.
5. BSP Network
BSP is forming a network consisting of distributors, wholesalers, retailers
and others ("BSP Network"). BSP shall, from time to time, provide the
Company with a written list of current participants in the BSP Network. The
Company agrees that it shall recognize and respect BSP's relationship with
the members of the BSP Network and that the Company shall, whenever
possible, only make sales of its products to members of the BSP Network
through BSP, pursuant to this Agreement. The Company agrees to exercise
best efforts and good faith to avoid making any sales of its products to
members of the BSP Network in circumvention of BSP.
6. Financial Terms.
(a) During the term of this Agreement, the Company shall sell to BSP
all of its products, as and when purchased by BSP, at a cost
which is the lesser of: (i) ten percent (10%) below the lowest
wholesale acquisition cost ("WAC"), inclusive of rebates,
quantity discounts, etc; or (ii) the lowest cost at which the
Company is then selling said product(s) to any other purchaser.
At the request of BSP, the Company shall structure part, or all
of the discount below WAC as a rebate to BSP.
7. Terms of Agreement.
The terms of this Agreement ("Term") shall commence upon execution hereof
and continue until such time as there is no product which constitutes a
Covered Product hereunder. Each product, upon becoming a Covered Product
hereunder, shall remain a Covered Product for a minimum period of five (5)
years following FDA approval of the marketing and sale of the product in
the United States. Such five-year period may be extended for an additional
period of five years at the option of BSP in the event that minimum sales
levels of the Covered Product shall not have been met during said
five-year period. "Minimum sales levels", as used herein, means levels of
sales for the five-year period established by BSP and Company by
negotiation in good faith prior to the commencement of the five-year
period. Minimum sales levels may be expressed as units sold, market share,
market penetration, or dollar volume or some consideration thereof. BSP's
exercise of its option to extend the Term with respect to a Covered Product
shall be made, if at all, by written notice given to Company no later than
thirty (30) days prior to the first five-year period set forth above.
8. Effect of Termination.
Upon expiration of the period during which a product is a Covered Product
hereunder, BSP shall have the right for a period of at least ten (10) years
thereafter, to acquire and be a distributor of a Covered Product on price
terms that are no less favorable than any other wholesaler or distributor
of the Covered Product. BSP's rights hereunder may be assigned to one or
more members of the BSP Network.
9. Early Termination.
(a) Either party may terminate the Term by written notice to the other
party if the other party shall be in default of any material provision
of this agreement and such default shall continue for a period of at
least forty-five (45) days after written notice of a default given to
the defaulting party (except in the case of a default in the payment
of money in which case the time period shall be twenty (20) days. Upon
any such termination, the respective rights and obligations of each
party shall cease and be of no further force and effect except that
each party shall be liable for any accrued obligations to pay money
and each party shall remain liable for breach of agreement, if any.
Moreover, any right of termination shall be without prejudice to any
right to obtain injunctive or other equitable relief.
(b) Company shall have the right, any provisions of this Agreement to the
contrary notwithstanding, to terminate the Term with respect to a
Covered Product which is a therapeutic drug at any time prior to the
commencement of Phase III FDA human clinical trials for such Covered
Product. If Company is offered (and it accepts said offer) a
contractual arrangement, including sales/marketing/distribution by the
Company, for the sales/marketing/distribution of such Covered Products
which arrangement will yield to Company a greater return on the sale
of such Covered Product for Specialty Pharmacy and Mail order/online
pharmacy than is provided for in this Agreement, all factors being
taken into consideration and providing that such arrangement is
inconsistent with the role of BSP hereunder. Such right of termination
shall be exercised, if at all, by written notice given by Company to
BSP, which notice shall set forth all relevant terms of the
alternative arrangement. Termination shall be effective thirty (30)
days after such notice, provided BSP shall have been given the
opportunity by Company to verify the alternative arrangement.
10 Waiver of Conflict of Interest
The Company has received full disclosure that certain shareholders,
management and consultants of BioDelivery Sciences International, Inc. also
serve as shareholders, management or consultants of BSP, that BSP is a
development stage company with limited business experience, that BSP
anticipates earning significant revenue as a result of this Agreement and
that certain administrative and professional (including legal and
accounting) support to BDSI and potentially to BDS, may also provide
similar services to BSP (the "Disclosed Relationship"). The
Company has had the opportunity to make due diligence inquiry of the officers,
directors and shareholders of both BSP and BioDelivery Sciences International,
Inc regarding the Disclosed Relationship, this Agreement and the potential
conflict of interest which may result there from. Based on the disclosure of
the Disclosed Relationship and the right to conduct due diligence inquiry and
the right to consult with and rely upon the advice of independent experts
including, but not limited to, legal counsel, the Company confirms that it has
waived all conflicts of interest, defenses or claims which may arise from or
relate to any such conflicts of interest. The Company warrants that the
Disclosed Relationship and the potential conflicts of interest have been
disclosed to the satisfaction of its Board of Directors which, after being
informed, adopted Resolutions which waived the potential conflicts of interest
of BSP and of the directors and officers of BioDelivery Sciences international,
Inc.
/s/ [illegible signature] 4 Dec 2000
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BioDelivery Sciences, Inc Date
/s/ [illegible signature] 11-30-00
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BioTech Specialty Partners, LLC Date
