LETTER AGREEMENT
Exhibit 10.1
This Letter Agreement (this “Agreement”) is entered into as of August 3, 2010 (the “Effective
Date”) by and between Forest Laboratories Holdings Limited (f/k/a Forest Laboratories Ireland
limited), an Irish corporation (“Forest”) having its principal executive offices at Xxxxxx Xxxxx,
00 Xxxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxx XX00, and Cypress Bioscience, Inc., a Delaware corporation
(“Cypress”), having offices at 0000 Xxxxxxxxx Xxxxx, Xxxxx 000, Xxx Xxxxx, Xxxxxxxxxx, 00000,
Xxxxxx Xxxxxx of America. Unless otherwise defined herein, capitalized terms shall have the
respective meanings assigned to them in the License Agreement as defined below.
Whereas, Forest and Cypress entered into that certain License and Collaboration Agreement
dated January 9, 2004, pursuant to which Cypress granted an exclusive license to certain patents
and know-how to develop and commercialize milnacipran (now “Savella®”) (the “License
Agreement); and
Whereas, Forest and Cypress desire to amend certain terms of the License Agreement with
respect to Cypress’s promotion rights, as hereinafter set forth.
Amendment
Now, Therefore, in consideration of the foregoing premises and the mutual covenants and
agreements contained herein and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Detailing
1.1 As of the Effective Date, Cypress will no longer exercise its Promotion Rights,
subject to Section 5. Without limiting the generality of the foregoing, from and after the
Effective Date, the Cypress Sales Force will no longer call upon physicians to detail
Savella and will cease participating in or sponsoring Savella promotional programs. Except
for the payment referred to in Paragraphs 2 and 3 below, Forest shall not be required to pay
Cypress any compensation with respect to the Cypress Promotion Rights with respect to
activities taking place from and after the Effective Date. Forest acknowledges that from
and after the Effective Date, Forest will have the sole responsibility for the detailing and
promotion of Savella in the Territory in accordance with the terms of the License Agreement.
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2. Transitional Activities
2.1 Cypress agrees to cause its field representatives and management to return all
Savella samples, vouchers, coupons, sales aids and other promotional materials to Xxxxxxx
for return to Forest. All returns shall be by a reputable, traceable delivery method (e.g.,
Federal Express) and will be completed as soon as possible, within 10 business days
following the Effective Date. Cypress will provide written notice to Forest of the
completion of all such returns.
2.2 Cypress will also provide Forest with the support necessary to assist in the
seamless transition of promotional efforts to the Forest sales force and to avoid gaps in
detailing activities. Without limiting the generality of the foregoing, such activities
will include providing Forest with the relevant details of all appointments and programs
(e.g., “lunch and learns”, speaker programs) which have been scheduled by Cypress prior to
the Effective Date in order to assure the smooth transition of such activities to Forest.
In addition, Cypress will agree to continue to cooperate and assist Forest as Forest may
reasonably request to investigate issues of sample accountability and close out the final
reconciliation of sample inventories relating to the activities of the Cypress Sales Force,
including providing such cooperation as may be reasonably required following the receipt by
Cypress of the payment contemplated by Paragraph 3 below. Cypress shall require members of
the Cypress Sales Force to agree to corresponding obligations in favor of Cypress and Forest
in severance arrangements entered into between Cypress and such members.
2.3 Termination of the exercise by Cypress of the Promotion Rights shall not affect the
reconciliation of detailing compensation and expenses for activities performed prior to the
Effective Date, which reconciliation shall continue to be performed as provided in the
License Agreement.
3. Transfer of Promotional Efforts Fee
In consideration of the amendments set forth herein, Forest will pay Cypress a fee of US
$2,000,000, payable within five business days following the receipt by Forest of the notice from
Cypress referred to in Paragraph 2.1 above and the completion of the transfer of scheduling
information as contemplated by Paragraph 2.2.
4. Interviewing of Sales Representatives
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Cypress will be implementing a reduction-in-force wherein its sales representatives will be
laid off. Forest agrees to interview Cypress’s representatives requesting such interviews for
available job openings in Forest’s sales department, including its hospital sales force.
5. Future Co-Promotion Right
At any time after the Effective Date, Cypress may notify Forest of its desire to re-initiate
its Promotion Rights as set forth in and in accordance with the terms of Section 3 of the License
Agreement. Forest agrees to consider such request in good faith in light of the then promotional
requirements for Savella and Forest’s sales force capacity and utilization plans.
All other terms and conditions of the License Agreement shall remain in full force and effect,
unless and until, modified by the parties in writing.
In Witness Whereof, the parties hereto have duly executed this Agreement as of the date and
year first above written.
| Forest Laboratories Holdings Limited | Cypress Bioscience, Inc. | |||||||
By:
|
/s/ Xxxxx Xxxxxxx | By: | /s/ Xxx Xxxxxxxx | |||||
Name:
|
Xxxxx Xxxxxxx | Name: | Xxx Xxxxxxxx | |||||
Title:
|
Assistant Secretary | Title: | Chief Executive Officer | |||||
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