LICENSE AGREEMENT
Exhibit 10.49
CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.
Execution Version
dated as of June 28, 2023
by and between
Pharmosa Biopharm Inc.
and
Liquidia Technologies, Inc.
Table of Contents
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i
Table of Contents
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ii
Table of Contents
(continued)
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iii
Table of Contents
(continued)
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Schedules and Exhibit
Schedule 1.23 – Existing Product
Schedule 1.24 – Existing Third Party Agreements
Schedule 1.35 – Licensor Know-How
Schedule 1.36 – Licensor’s Knowledge Individuals
Schedule 1.38 – Licensor Patents
Schedule 2.3 – Licensor Technology Transfer Plan
Schedule 4.3 – Supply Agreement Key Terms
Schedule 5.4.1 – Regulatory Transition Plan
Schedule 6.9 – Form of Royalty Report
Schedule 8.5.1 – Initial Press Release
Schedule 9.2(q) – Existing Third Party Agreements Requiring Consent
Exhibit A – Form of Assignment and Assumption
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This License Agreement (this “Agreement”) is dated as of June 28, 2023 (the “Effective Date”) by and between Pharmosa Biopharm Inc., a corporation incorporated under the laws of Taiwan having a place of business at 0X.-0, Xx. 00, Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Xxxx 00000, Xxxxxx (“Licensor”), and Liquidia Technologies, Inc., a corporation incorporated under the laws of the State of Delaware, USA having a place of business at 000 Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000, XXX (“Company”). Licensor and Company may be referred to herein as a “Party” or, collectively, as “Parties”.
RECITALS:
Whereas, Licensor is a biopharmaceutical company engaged in the development of the Licensor Technology and has in development the Existing Product;
Whereas, Company is a biopharmaceutical company engaged in the development, manufacture and commercialization of pharmaceutical products and is interested in developing, manufacturing and commercializing Products, including the Existing Product; and
Whereas, Company desires to license from Licensor, and Licensor wishes to license to Company, on an exclusive basis, the right to develop, manufacture and commercialize Products (including the Existing Product) in the Field in the Territory.
Now, Therefore, in consideration of the various promises and undertakings set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows:
Unless otherwise specifically provided herein, the following terms shall have the following meanings:
| 1.4 | “Business Days” means the days when the banks in Taiwan and the United States remain open. |
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| 1.5 | “Calendar Quarter” means each three (3) month period commencing January 1, April 1, July 1 or October 1 of any year; provided, however, that (a) the first Calendar Quarter of the Term shall extend from the Effective Date to the end of the first full Calendar Quarter thereafter, and (b) the last Calendar Quarter of the Term shall end upon the expiration or termination of this Agreement. |
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| performance, the regulatory environment and competitive market conditions in the therapeutic area, safety and efficacy of the Product, the strength of its proprietary position and such other factors as such Party may reasonably consider, all based on conditions then prevailing. For clarity, Commercially Reasonable Efforts will not mean that a Party guarantees that it will actually accomplish the applicable task or objective. |
| 1.13 | “Competing Product” means any pharmaceutical product in any dosage form, formulation, presentation or package configuration (a) which exhibits therapeutic or prophylactic activity which is similar to that exhibited by the Product for PAH, PH-ILD or any other Indication for which Company has either (i) an open IND with at least one ongoing or completed Clinical Trial that includes such Indication, or (ii) received Regulatory Approval (PAH, PH-ILD and the Indications described in (i) and (ii) being referred to herein as “Contemplated Indications”), and (b) (i) for which an application seeking Regulatory Approval has been filed or Regulatory Approval has been obtained in the Territory for the Contemplated Indications or (ii) that is being Commercialized in the Territory with off-label prescription for at least [***] or use for the Contemplated Indications. For purposes of this Agreement, the [***] Product does not constitute a Competing Product unless and until it satisfies clauses (a) and (b) above. |
| 1.15 | “Compulsory License Compensation” shall mean, for a given Product and a given country or region in the Territory, the compensation received from a licensee of the Compulsory License by Company or Licensor or any of their Affiliates or Sublicensees under a Compulsory License. |
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| 1.21 | “Executive Officers” means, together, the Chief Executive Officer of Company and the General Manager of Licensor or their respective designees. |
| 1.22 | “Existing Clinical Trial” means that certain Phase III Clinical Trial that is being actively conducted by Licensor as of the Effective Date for the Existing Product for PAH. |
| 1.23 | “Existing Product” means L606 Treprostinil as more fully described in Schedule 1.23. |
| 1.24 | “Existing Third Party Agreements” means the agreements set forth on Schedule 1.24. |
| 1.25 | “FDA” means the United States Food and Drug Administration or a successor federal agency thereto. |
| 1.26 | “Field” means all Indications and uses in humans, including, without limitation, the diagnosis, treatment, management or prevention of any and all diseases. |
| 1.28 | “GAAP” means US generally accepted accounting principles, as such principles may be amended from time to time. |
| 1.29 | “Governmental Body” means any: (a) nation, principality, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; (c) governmental or quasi-governmental authority of any nature (including any governmental division, subdivision, department, agency, bureau, branch, office, commission, council, board, instrumentality, officer, official, representative, organization, unit, body or entity and any court or other tribunal); (d) multi-national or supranational organization or body; or (e) individual, entity, or body exercising, or entitled to exercise, any executive, legislative, judicial, administrative, regulatory, police, military or taxing authority or power of any nature. |
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| 1.31 | “IND” means an investigational new drug application submitted to applicable Regulatory Authorities for approval to commence Clinical Trials in a given jurisdiction. |
| 1.33 | “[***] Product” means Licensor’s existing pharmaceutical product that includes [***] and is formulated with Licensor Liposomal Technology. |
| 1.34 | “Law” or “Laws” means all applicable laws, statutes, rules, regulations, ordinances and other pronouncements having the binding effect of law of any Governmental Body. |
| 1.37 | “Licensor Liposomal Technology” means Licensor’s proprietary liposomal drug delivery system and all technology related thereto. |
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| 1.39 | “Licensor Technology” means the Licensor Patents, Licensor Liposomal Technology, and the Licensor Know-How. |
If a Product under this Agreement is sold in the form of a Combination Product, then Net Sales for such Combination Product shall be determined on a country-by-country basis by mutual agreement of the Parties in good faith taking into account the perceived relative value contributions of the Product and the other ingredient or component in the Combination Product, as reflected in their respective market prices at arms-length transactions. In case of disagreement, an independent expert agreed upon by both Parties or, failing such agreement, designated by the International Chamber of Commerce, shall determine such relative value contributions and such determination shall be final and binding upon the Parties.
In the event Product is “bundled” for sale together with one or more other products in a country (a “Product Bundle”), then Net Sales for such Product sold under such arrangement shall be determined on a country-by-country basis by Company in good faith taking into account the relative value contributions of the Product and the other products in the Product Bundle, as reflected in their individual sales prices at arms-length transactions. If the Product or other product(s) are not sold separately, Licensor and Company shall negotiate in good faith a reasonable imputed price for the Product and other product(s) and the allocation of Net Sales with respect thereto shall be based on such imputed list price. In case of disagreement, an independent expert agreed upon by both Parties or, failing such agreement, designated by the International Chamber of Commerce, shall determine such allocation and such determination shall be final and binding upon the Parties.
In determining the Net Sales for the Combination Product and the Product in the Product Bundle, Company shall provide the individual market and sale prices of the products in the Combination Product and Product Bundle to Licensor and in the case of a Combination Product combined with nebulizer devices, a reasonably redacted copy of the agreement with the nebulizer device providers.
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In the case of disagreement regarding the allocation of Net Sales for a Combination Product or Product Bundles as described in the preceding paragraphs, Company shall make applicable payments based on the lower of the Net Sales allocation proposed by the Parties pending the final resolution of the disagreement.
For clarification, sale of Product by Company or any of its Affiliates or Sublicensees to another of these entities for resale by such entity to a Third Party shall not be deemed a sale for purposes of this definition of “Net Sales”. Further, transfers or dispositions of Product: (a) in connection with patient assistance programs; (b) for charitable or promotional purposes; (c) for preclinical, clinical, regulatory or governmental purposes; (d) for use in any tests or studies reasonably necessary to comply with any Law, regulation or request by a Regulatory Authority; or (e) for use in pre-clinical studies, Clinical Trials or other Development activities, shall not, in each case of (a) through (e), be deemed sales of such Product for purposes of this definition of “Net Sales.”
Sale of Products pursuant to a Compulsory License shall not be included in any Net Sales.
| 1.43 | “Out-of-Pocket Expenses” means expenses actually paid by a Party or its Affiliate to any Third Party. |
| 1.44 | “PAH” means pulmonary arterial hypertension. |
| 1.45 | “Parent Company” means Liquidia Corporation, a Delaware corporation. |
| 1.46 | “Patent Rights” means: (a) an issued or granted patent, including any extension, supplemental protection certificate, registration, confirmation, reissue, reexamination or renewal thereof; (b) a pending patent application, including any continuation, divisional, continuation-in-part, substitute or provisional application thereof; and (c) all counterparts or foreign equivalents of any of the foregoing issued by or filed in any country or other jurisdiction. |
| 1.48 | “PH-ILD” means pulmonary hypertension associated with interstitial lung disease. |
| 1.49 | “Phase II Clinical Trial” means a human clinical trial for which the primary endpoint is an indication of efficacy of a therapeutic agent in patients being studied as described in 21 CFR § 312.2(b), or an equivalent human clinical trial in a country or territory in the Territory other than the United States, and that is prospectively designed to generate sufficient data (if successful) to commence pivotal clinical trials. |
| 1.50 | “Phase III Clinical Trial” means a human clinical trial that is prospectively designed to demonstrate statistically for registration in the United States whether a therapeutic agent is safe and effective for use in humans in the Indication being investigated as described in 21 CFR § 312.2(c), or an equivalent human clinical trial in a country or territory in the Territory other than the United States. |
| 1.51 | “Planned Phase III Clinical Trial” means that certain Phase III Clinical Trial designed and planned to be conducted by Licensor as of the Effective Date (but, for clarity, for which enrollment has not yet commenced) for the Existing Product for PH-ILD. For the avoidance of doubt, the Existing Clinical Trial is not the Planned Phase III Clinical Trial. |
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| 1.52 | “Price Approvals” means, in those countries in the Territory where Regulatory Authorities may approve or determine pricing and/or pricing reimbursement for pharmaceutical or biotechnology products, such pricing and/or pricing reimbursement approval or determination. |
| 1.57 | “SEC” means the U.S. Securities and Exchange Commission or any successor agent or authority thereto. |
| 1.60 | “Territory” means all of the countries, jurisdictions and territories in North America, including Canada, the United States and Mexico. |
| 1.61 | “Third Party” means any Person other than Licensor, Company or any of their respective Affiliates. |
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| 1.63 | “Third Party License Agreement” means any agreement entered into by a Party or its Affiliate with a Third Party, or any amendment or supplement thereto, in each case following the Effective Date, whereby royalties, fees or other payments are to be made by a Party or its Affiliate to such Third Party in connection with the grant of rights under intellectual property rights Controlled by such Third Party, which rights are necessary or useful to Develop, manufacture, have made, import, export, use or Commercialize Product under the Licensed Rights. |
| 1.64 | “United States” or “US” means the United States of America, its territories and possessions. |
| 1.65 | “USD” or “$” means the lawful currency of the United States. |
| 1.67 | Other Terms. The definition of each of the following terms is set forth in the section of this Agreement indicated below: |
Defined Term | Section |
“Action” | 7.5.2 |
“Agreement” | Preamble |
“Asset Transfer Agreement” | 2.7 |
“Company” | Preamble |
“Company Indemnitees” | 10.2 |
“Company Patents” | 7.4.5 |
“Company Tech Transfer Materials” | 2.6 |
“Competitive Action” | 13.4 |
“Contemplated Indications” | 1.13 |
“Cure Period” | 11.2.2 |
“Development Milestones” | 6.2 |
“Development Support” | 4.1.2 |
“Disputes” | 12.1 |
“Effective Date” | Preamble |
“Ex-Territory Rights Agreement” | 2.8 |
“Ex-Territory Rights Terms Sheet” | 2.8 |
“Ex-Territory Sublicensees” | 2.6 |
“Exclusive Option” | 2.8 |
“Existing Regulatory Documentation” | 5.4.3 |
“Filled Ampules” | 4.3 |
“ICC” | 12.3.1 |
“Joint Steering Committee” or “JSC” | 3.1 |
“Licensed Rights” | 2.1 |
“Licensor” | Preamble |
“Licensor Indemnitees” | 10.1 |
“Licensor Technology Transfer Plan” | 2.3 |
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“Losses” | 10.1 |
“Non-Specific Licensor Patents” | 7.4.2 |
“Option Exercise Notice” | 2.8 |
“Party” and “Parties” | Preamble |
“Product Bundle” | 1.42 |
“Re-Examination Action” | 7.5.2 |
“Regulatory Support” | 5.3 |
“Regulatory Transition Plan” | 5.4.1 |
“Representatives” | 4.1.2 |
“Right of First Refusal” | 11.6.2 |
“Right of First Refusal Notice Period” | 11.6.2(b) |
“Rules” | 12.3.1 |
“Sales Milestones” | 6.3 |
“Specific Licensor Patents” | 7.4.1 |
“Subcontractor” | 4.4 |
“Supply Agreement” | 4.3 |
“Supply Terms” | 4.3 |
“Term” | 11.1 |
“Terms Sheet Negotiation Period” | 2.8 |
“Third Party Transaction” | 2.8 |
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| sublicense (subject to reasonable redactions), (e) the terms of each sublicense (and any sub-sublicense) agreement shall be consistent with all applicable terms of this Agreement, and (f) Company remains primarily responsible for the actions or omissions of its Sublicensees. In no event shall Company grant a sublicense in whole of the Licensed Rights (including the entire Field and entire Territory) to any single Third Party and/or its Affiliates without the prior written consent of Licensor, such consent not to be unreasonably withheld, conditioned or delayed. |
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| written notice, the Parties will negotiate for a period of up to [***] (or such longer period as may be mutually agreed upon by the Parties) to execute an Ex-Territory Rights Agreement containing such terms. |
| 3.3 | JSC Functions and Powers. The responsibilities of the JSC will be as follows: |
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The JSC may form sub-committees for execution of its responsibilities which shall be comprised of representatives appointed by the Parties. The sub-committees shall meet at such times and on such schedule as may be established by such sub-committees.
| 4.1 | Development. |
| 4.1.3 | Conduct of Existing Clinical Trial. Until the date of transfer of sponsorship and control of the Existing Clinical Trial to Company pursuant to the Regulatory Transition Plan in |
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| accordance with Section 5.4, Licensor shall have the exclusive right and obligation to conduct the Existing Clinical Trial at Company’s cost. On and after the date of transfer sponsorship and control of the Existing Clinical Trial to Company pursuant to the Regulatory Transition Plan in accordance with Section 5.4, as between the Parties, Company shall have the exclusive right to conduct the Existing Clinical Trial. Notwithstanding the foregoing, following the transfer of sponsorship of the Existing Clinical Trial, the Parties may agree in writing (which may be set forth in the Regulatory Transition Plan) for Licensor to continue to conduct certain activities related to the Existing Clinical Trial on behalf of Company (as sponsor) at reasonable charges agreed by Company and Licensor in writing in advance, in which event Licensor shall conduct such activities in accordance with such agreement and direction of Company and strictly in accordance with the Regulatory Transition Plan (as may be amended in writing by the Parties). Licensor shall not, at any time on or following the Effective Date, without Company’s prior written consent, (i) terminate or amend the protocol of the Existing Clinical Trial, (ii) modify or amend any agreements with any Third Parties related to the Existing Clinical Trial or (iii) add or terminate any clinical sites related to the Existing Clinical Trial. |
| 4.2 | Commercialization. |
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| conditions set forth therein (the “Supply Agreement”). The Supply Agreement shall include at least the terms set forth in Schedule 4.3 (the “Supply Terms”). |
| 4.5 | Trademarks. As between Licensor and Company, Company shall have the sole authority to select trademarks for the Product and shall own all such trademarks. |
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| with the Regulatory Authorities with respect to regulatory matters relating to the Licensor Technology. |
| 5.4 | Regulatory Transition Plan. |
| 5.4.2 | Notwithstanding Section 5.2, until the transfer of sponsorship and control of the Existing Clinical Trial to Company pursuant to the Regulatory Transition Plan, Licensor shall be responsible for any communications and interactions with Regulatory Authorities with respect to the Existing Clinical Trial in accordance with Section 5.2. Notwithstanding the foregoing, Licensor shall provide a copy of (a) any communications, notices, or other materials received from any Regulatory Authorities with respect to the Existing Clinical Trial, (b) any interim or final data or results from the Existing Clinical Trial, and (c) any proposed communications with, or submissions to, any Regulatory Authority reasonably in advance of submission and, with respect to clause (c), shall incorporate all of Company’s comments thereto in good faith (provided incorporation of such comments does not, upon the advice of Xxxxxxxx’s outside counsel, violate Law). |
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Transmission to Licensor:
Xxxxxx Xx
Pharmosa Biopharm Inc.
3F.-3, Xx.00, Xxxxxxxx Xx., Xxxxxxx Xxxx., Xxxxxx Xxxx 00000, Xxxxxx
Tel: + 000-0-0000-0000#000
Fax: x000-0-0000-0000
Mobile: x000-000000000
Xxxxxx.xx@xxxxxxxx.xxx.xx
Transmission to Company:
Xxxxxxxx Xxxxxxx
Liquidia Technologies, Inc.
000 Xxxxx Xxxxx, Xxxxx 000
Morrisville, NC 27560
USA
Telephone: 000-000-0000
E-mail: xxxxxxxx.xxxxxxx@xxxxxxxx.xxx
Development Milestone | Milestone Payment USD |
Enrollment of [***] patients in the Planned Phase III Clinical Trial | [***] |
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Filing of an NDA with the FDA for the Existing Product | [***] |
Approval by the FDA of an NDA for the Existing Product for PAH | [***] |
Approval by the FDA of an NDA for the Existing Product for PH-ILD | [***] |
Approval by the FDA of an NDA for the Existing Product for each additional Indication (other than PAH and PH-ILD)* | [***] |
Approval by the FDA of an NDA for any additional Product* | [***] |
With respect to each Development Milestone, the corresponding milestone payments to be made under this Agreement shall be due and payable only once (except with respect to the Development Milestones marked with an asterisk).
For purposes of the Development Milestones, an additional Product entitled to [***] in the foregoing table shall mean a Product with new dosage form, new formulation, new combination and the next generation version of Existing Product. Notwithstanding the foregoing, such Development Milestone payment shall not apply to the Existing Product in the following instances: (a) a different dosage amount; (b) different batch size; or (c) a manufacturing change to the Existing Product in consideration of supply issues (e.g., a change in liposomes used to manufacture the Existing Product due to insufficient supply of the existing liposomes or for cost reasons).
Sales Milestones | Milestone Payment USD |
The first Calendar Year in which annual Net Sales of the Products in the Territory exceed [***] | [***] |
The first Calendar Year in which annual Net Sales of the Products in the Territory exceed [***] | [***] |
The first Calendar Year in which annual Net Sales of the Products in the Territory exceed [***] | [***] |
The first Calendar Year in which annual Net Sales of the Products in the Territory exceed [***] | [***] |
Company shall deliver written notice to Licensor within sixty (60) days following the end of the Calendar Year in which a Sales Milestone occurs and Licensor shall issue Company an invoice for the amount of the corresponding Sales Milestone payment, which invoice Company shall pay within [***] following receipt of such invoice.
For the avoidance of doubt, each aforementioned Sales Milestone payment shall be made only once and only with respect to Net Sales of the Products.
The achievement of a higher Sales Milestone shall trigger the payment of a lower Sales Milestone in addition to the payment of the Milestone Payment for such higher Sales Milestone in the event such lower Sales Milestone had not been triggered prior to achievement of the higher Sales Milestone.
For the avoidance of doubt, the total maximum Sales Milestones payable under this Section 6.3 shall not exceed [***].
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| 6.4 | Royalty Payments for Product. |
Annual Net Sales of Products per Calendar Year (in USD) in the Territory | Incremental Royalty Rate |
For Net Sales of Products from [***] up to and including [***] | [***] |
For that portion of Net Sales of Products that is greater than [***] | [***] |
By way of illustration, assume in a Calendar Year, during the Royalty Term, that (i) aggregate annual Net Sales of Products in USD total [***] and (ii) no adjustments or deductions to payments under this Article 6 apply. The total royalties due and payable by Company to Licensor for such Net Sales would be [***], calculated as follows:
[***] x [***] = [***]
[***] x [***] = [***]
Total Royalty = [***]
| 6.4.2 | Net Sales Subject to Royalty Payments and Sales Milestones. For purposes of determining whether a royalty threshold or a Sales Milestone has been attained, only Net Sales that are subject to a royalty payment shall be included in the total amount of Net Sales and any Net Sales that are not subject to a royalty payment shall be excluded. In addition, in no event shall the manufacture of a Product give rise to a royalty obligation. For clarity, Company’s obligation to pay royalties to Licensor under this Article 6 is imposed only once with respect to the same unit of Product regardless of the number of Licensor Patents pertaining thereto. |
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| 6.6 | Third Party License Agreements and Device Agreement. In the event that, to avoid infringement of the Third Party’s intellectual property rights by either (a) use of the Licensor Technology under the Licensed Rights or (b) Developing, manufacturing or Commercializing the Existing Product, it is reasonably necessary for Company to make payments to a Third Party with respect to a license under such Third Party’s intellectual property rights, to develop, manufacture, use, or sell a Product in the Field in the Territory, Company will be entitled to deduct an amount equal to [***] of any such amounts due to such Third Party for such license from any amounts payable to Licensor under Section 6.4. The Parties further agree that Company is entitled to deduct an amount equal to [***] of any amounts (other than amounts due for actual manufacture and supply of a device) due under the Device Agreement from any amounts payable to Licensor under Section 6.4. In no event shall the amount otherwise due to Licensor be less than [***] of the amount that would be payable to Licensor absent the deductions pursuant to this Section 6.6. Notwithstanding the foregoing, Company shall be entitled to carry forward to future Calendar Quarters any amounts that Company would, but for the [***] payment floor in the preceding sentence, be permitted to deduct under this Section 6.6 from amounts payable to Licensor under Section 6.4. |
| 6.8 | Mode of Payment and Currency; Invoices. |
| 6.8.1 | Currency. All payments to Licensor hereunder shall be made by deposit of USD in the requisite amount to such bank account as Licensor may from time to time designate by written notice to Company. With respect to sales not denominated in USD, Company shall convert applicable sales in foreign currency into USD by using the then current and reasonable standard exchange rate methodology applied to its external reporting. Based on the resulting sales in USD, the then applicable royalties shall be calculated. The Parties may vary the method of payment set forth herein at any time upon mutual written agreement, and any change shall be consistent with the local Law at the place of payment or remittance. |
| 6.8.2 | Invoices. Licensor shall address its invoices to: |
Liquidia Technologies, Inc.
000 Xxxxx Xxxxx, Xxxxx 000
Morrisville, North Carolina
USA
Attn: Accounts Payable
E-mail: xx_xxxxxxxx@xxxxxxxx.xxx
With a copy to:
Liquidia Technologies, Inc.
000 Xxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
XXX
Attn: Legal Department
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E-mail: xxxxx@xxxxxxxx.xxx
| 6.11 | Taxes. |
| 6.11.2 | Value Added Tax. It is understood and agreed between the Parties that any payments made by Company under this Agreement are exclusive of any value added or similar Tax imposed upon such payment and that Company shall be responsible for the payment of any and all value added Taxes levied on account of any payments paid to Licensor by Company. Company is entitled to receive a proper tax invoice where any value added Tax amount is shown separately. The foregoing notwithstanding, if (a) Licensor or its Affiliates redomiciles to a new jurisdiction that is outside of its current residence and therefore becomes subject to new value added Tax obligations, or (b) Licensor assigns any rights or obligations under this Agreement to a Person that is domiciled in or redomiciles to a new jurisdiction outside its residence and therefore new value added Tax obligations apply, or (c) Licensor, its Affiliates or such assignee thereof otherwise becomes subject to value added Tax obligations in a jurisdiction outside its residence or new value added Tax obligations in its residence, whether through a change in Law or otherwise, then such Licensor (or its Affiliate or assignee) that has re-domiciled or become subject to value added Tax obligations as described in clauses (a) through (c) shall be responsible for any such new value added Tax obligations in accordance with Law and cooperate with Company, where appropriate and relevant. |
| 6.12 | Audits. |
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| 6.12.1 | Audits Generally. During the Royalty Term and for [***] Calendar Years thereafter, and not more than once in each Calendar Year unless Licensor has reasonable grounds and evidence to suspect a material inaccuracy in the amount of royalty payments reported and paid by Company hereunder for any period subject to (but that has not already been) audit hereunder, Company shall permit, and shall cause its Affiliates or Sublicensees to permit, an independent certified public accounting firm of internationally recognized standing selected by Licensor, and reasonably acceptable to Company or such Affiliate or Sublicensee, to have access to and to review, during normal business hours upon reasonable prior written notice, the applicable records of Company and its Affiliates or Sublicensees to verify the accuracy of the royalty reports and payments under this Article 6. Such review may cover the records for sales made in any Calendar Year ending not more than two (2) years prior to the date of such request (unless Company’s, or any of its relevant Affiliate’s, internal company procedures require a shorter period); provided, however, that Licensor shall not be permitted to review any period (or portion thereof) more than once. The accounting firm shall disclose to Licensor and Company only whether the royalty reports are correct or incorrect and the specific details concerning any discrepancies. No other information shall be provided to Licensor. |
| 6.12.2 | Audit-Based Reconciliation. If such accounting firm concludes that additional royalties were owed during such period, and Company agrees with such calculation, Company shall pay the additional undisputed royalties within thirty (30) days after the date Licensor delivers to Company such accounting firm’s written report. If such accounting firm concludes that an overpayment was made, such overpayment shall be fully creditable against amounts payable in subsequent payment periods or, at Company’s request, shall be reimbursed to Company within thirty (30) days after the date of receipt of the foregoing report. If Company disagrees with such calculation, it may retain its own independent certified public accounting firm of recognized standing and reasonably acceptable to Licensor, to conduct a review, and if such firm concurs with the other accounting firm, Company shall make the required payment within thirty (30) days after the date Company receives the report of its accounting firm. If Company’s accounting firm does not concur, Company and Licensor shall meet and negotiate in good faith a resolution of the discrepancies between the two firms. Licensor shall pay for the cost of any audit, unless Company has underpaid Licensor by the greater of (a) [***] or more or (b) [***], in which case Company shall pay for the costs of audit. |
| 6.12.3 | Audit Confidentiality. Each Party shall treat all information that it receives under this Section 6.12 in accordance with the confidentiality provisions of Article 8 of this Agreement, and shall cause its accounting firm to enter into an acceptable confidentiality agreement with the other Party obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement, except to the extent necessary for such Party to enforce its rights under this Agreement. |
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| 7.4 | Patent Prosecution and Maintenance. |
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| or divisional with respect to any Non-Specific Licensor Patent that claims treprostinil as the explicit and sole active pharmaceutical ingredient, then the prosecution and maintenance of any such continuation or divisional shall be governed by Section 7.4.1. |
| 7.4.4 | Patent Term Extension. Notwithstanding any Licensor Patent prosecution rights of Licensor under this Agreement, Company shall be responsible, in Licensor’s name, for obtaining patent term extensions or supplemental protection certificates or comparable extensions in any other country in the Territory, wherever available for Specific Licensor Patents in the Territory. Licensor shall provide Company with all relevant information, documentation and assistance in this respect as may reasonably be requested by Company. Any such assistance, supply of information and consultation shall be provided promptly and in a manner that will ensure that all patent term extensions for Specific Licensor Patents are obtained wherever legally permissible, and to the maximum extent available. In the event that any election with respect to obtaining patent term extensions is to be made, Company shall have the right to make such elections, and Licensor shall abide by all such elections. |
| 7.5 | Enforcement. |
| 7.5.1 | Notice. |
| (a) | If either Party believes that an infringement, unauthorized use, misappropriation or ownership claim or threatened infringement or other such activity by a Third Party with respect to any Licensor Technology, or if a Third Party claims that any Licensor Patent is invalid or unenforceable, in each case in the Territory, the Party possessing such knowledge or belief shall notify the other Party and provide it with details of such infringement or claim that are known by such Party. |
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| (b) | In the event that Licensor believes that a Company Patent, if any, is being infringed by a Third Party or if a Third Party claims that any Company Patent is invalid or unenforceable, Licensor shall notify Company and provide it with details of such infringement or claim. |
| 7.5.3 | Company Patents. Company shall have the sole right and authority, but not the obligation, to enforce Company Patents against any Third Party infringer; provided, however, that Licensor shall provide reasonable assistance to Company with respect thereto, including providing access to relevant documents and other evidence and making its employees available, subject to Company’s reimbursement of any Out-of-Pocket Expenses incurred on an on-going basis in providing such assistance. |
| 7.6 | Third Party Actions Claiming Infringement. |
| 7.6.1 | Notice. If Company becomes aware of any Third Party Action against Company, Company shall promptly notify Licensor thereof in writing, setting for the facts of such claim in reasonable detail. |
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The recipient shall not disclose any of the Confidential Information, except to Representatives of the recipient who need to know the Confidential Information for the purpose of performing the recipient’s obligations, or exercising its rights, under this Agreement and who are bound by obligations of non-use and non-disclosure substantially similar to those set forth herein. The recipient shall be responsible for any disclosure or use of the Confidential Information by such Representatives. The recipient shall protect Confidential Information using not less than the same care with which it treats its own confidential information, but at all times shall use at least reasonable care. Each Party shall: (i) implement and maintain appropriate security measures to prevent unauthorized access to, or disclosure of, the other Party’s Confidential Information; (ii) promptly notify the other Party of any unauthorized access or disclosure of such other Party’s Confidential Information; and (iii) cooperate with such other Party in the investigation and remediation of any such unauthorized access or disclosure.
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In addition to the foregoing, Company may, in furtherance of its rights under this Agreement, disclose Confidential Information of Licensor to any Third Party, provided that such Third Party is bound by obligations of confidentiality at least as stringent as the ones herein.
In making any disclosures pursuant to this Section 8.2, the disclosing Party shall, where reasonably practicable, give such advance notice to the other Party of such disclosure requirement as is reasonable under the circumstances and will use its commercially reasonable efforts to cooperate with the other Party in order to secure confidential treatment of such Confidential Information required to be disclosed. In addition, in connection with any permitted filing by either Party of this Agreement with any Governmental Body the filing Party shall endeavor to obtain confidential treatment of economic, trade secret information and such other information as may be requested by the other Party, and shall provide the other Party with the proposed confidential treatment request with reasonable time for such other Party to provide comments, and shall include in such confidential treatment request all reasonable comments of the other Party.
For the avoidance of doubt and notwithstanding anything in this Agreement to the contrary, in no event may Licensor use or reference any Confidential Information of Company, including any information reported by Company to Licensor in connection with this Agreement, to engage in any Competitive Action.
| 8.5 | Press Releases and Disclosure. |
| 8.5.1 | Initial Press Release. The proposed joint public announcement by Licensor and Company of the execution of this Agreement is set forth on Schedule 8.5.1 hereto. |
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| 9.1 | Representations and Warranties. Each Party represents and warrants to the other Party that, as of the Effective Date: |
| 9.2 | Additional Representations and Warranties of Licensor. Licensor represents and warrants to Company that, as of the Effective Date: |
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| 9.3 | Licensor Covenants. Licensor covenants to Company that: |
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| Party claims or suits to the extent arising out of: (a) the Development, sale, offer for sale, import, export and other Commercialization of the Product by or on behalf of Company, its Affiliates or Sublicensees after the Effective Date; (b) Company’s gross negligence or willful misconduct; (c) Company’s breach of its obligations under this Agreement; or (d) breach by Company of its representations or warranties set forth in Article 9; except, in each case (a)-(d), to the extent such Losses arise out of (i) any activities set forth in Sections 10.2(a)-(d) for which Licensor is obligated to indemnify any Company Indemnitee under Section 10.2 or (ii) any liability for which Licensor is responsible under the Supply Agreement or any other agreement between Licensor and Company. |
| 10.5 | Insurance. During the Term, each Party shall obtain and maintain, at its sole cost and expense, insurance (including any self-insured arrangements) in types and amounts, that are reasonable and |
33
| customary in the United States and Taiwan, as applicable, pharmaceutical and biotechnology industry for companies engaged in comparable activities. It is understood and agreed that this insurance shall not be construed to limit either Party’s liability with respect to its indemnification obligations hereunder. Each Party will, except to the extent self-insured, provide to the other Party upon request a certificate evidencing the insurance such Party is required to obtain and keep in force under this Section 10.5. |
| 11.2 | Termination upon Material Breach. |
| 11.2.3 | Material Breach Dispute. Any Dispute regarding an alleged material breach of this Agreement shall be resolved in accordance with Article 3 and Article 12. In such event, termination will be tolled and the termination will become effective only if such material breach remains uncured for the applicable cure period after the final resolution of the Dispute through such dispute resolution procedures. |
| 11.3 | Bankruptcy Event Termination. This Agreement may be terminated by written notice by a Party at any time during the Term in the event of a Bankruptcy Event of the other Party. |
| 11.4 | Mutual Termination. The Parties may terminate this Agreement in its entirety or on a country-by-country or Product-by-Product basis upon mutual written agreement. |
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| 11.5 | Effects of Termination. |
| 11.5.1 | Survival. |
| (a) | Notwithstanding the expiration or termination of this Agreement, the following provisions shall survive: Articles 1, 8 (solely with respect to the time period set forth in Section 8.1) and 12; and Sections 4.5 (with respect to trademark ownership), 5.1 (with respect to ownership of regulatory filings and Regulatory Approvals), 5.7, 6.9, 6.11, 6.12.1-6.12.2 (solely with respect to audits conducted within the period set forth in Section 6.12.1), 6.12.3, 7.4.5, 10.1-10.4, 11.5-11.7, 13.1, 13.2.1-13.2.4, 13.2.5 (for so long as Company has a continuing license hereunder), 13.3, and 13.5-13.18. |
| (b) | Expiration or termination of this Agreement shall not relieve the Parties of any liability that accrued hereunder prior to the effective date of such termination. In addition, termination of this Agreement shall not preclude either Party from pursuing all rights and remedies it may have hereunder or at Law or in equity with respect to any breach of this Agreement nor prejudice either Party’s right to obtain performance of any obligation. |
| 11.5.2 | Licenses. |
| (b) | Upon termination of this Agreement by Licensor pursuant to Section 11.2.1 or 11.3, the following terms and conditions shall apply with respect to such Product(s) and country(ies) as are the subject of such termination: |
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| 11.6 | Additional Effects of Termination for a Licensor Bankruptcy Event. |
| 11.6.1 | Continuing Rights. The Parties agree that Company, as licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the U.S. Bankruptcy Code. The Parties further agree that, in the event of a Licensor Bankruptcy Event, Company shall be entitled to a complete duplicate of (or complete access to, as appropriate) any such intellectual property and all embodiments of such intellectual property, which, if not already in Company’s possession, shall be promptly delivered to it (a) following any such commencement of a bankruptcy proceeding upon Company’s written request therefor, unless Licensor elects to continue to perform all of its obligations |
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| under this Agreement or (b) if not delivered under clause (a), following the rejection of this Agreement by Licensor upon written request therefor by Company. |
| (a) | Licensor (or other authorized representative of Licensor, including a bankruptcy trustee) shall promptly send to Company a reasonably detailed written notification of any Licensor Bankruptcy Event. |
| 12.3 | Arbitration. |
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| 12.3.3 | Arbitration Process. The seat of the arbitration shall be New York, New York, USA. The arbitrators shall set a date for a hearing that shall be held no later than sixty (60) days following the appointment of the last of such three (3) arbitrators. The Parties shall have the right to be represented by counsel. No less than thirty (30) days prior to the hearing, each Party shall submit the following to the other Party and the arbitration panel: (a) a copy of all exhibits on which such Party intends to rely in any oral or written presentation to the panel; (b) a list of any witnesses such Party intends to call at the hearing, and a short summary of the anticipated testimony of each witness; and (c) a brief in support of such Party’s proposed rulings and remedies; provided that the brief shall not exceed twenty-five (25) pages. This page limitation shall apply regardless of the number of issues raised in the arbitration proceeding. The arbitrators shall determine what discovery will be permitted in accordance with the Rules, consistent with the goal of reasonably controlling the cost and time that the Parties must expend for discovery; provided, however, that the arbitrators shall permit discovery as they deem proportionate to the issues in dispute. The arbitration panel shall have sole discretion regarding the admissibility of any evidence, except statements made during settlement negotiations and affidavits prepared for the purposes of the hearing shall not be admissible. Within ten (10) days following completion of the hearing, each Party may submit to the other Party and the panel a post-hearing brief in support of its proposed rulings and remedies; provided that such brief shall not contain or discuss any new evidence and shall not exceed ten (10) pages. This page limitation shall apply regardless of the number of issues raised in the proceeding. |
| 12.3.4 | Decision of Arbitrators. The arbitrators shall use their best efforts to rule on each disputed issue within thirty (30) days after completion of the hearing described in Section 12.3.3. The determination of the arbitrators as to the resolution of any Dispute shall be binding and conclusive upon the Parties, absent manifest error. All rulings of the arbitrators shall be in writing and shall be delivered to the Parties as soon as is reasonably possible. |
| 12.3.5 | Awards. Any award to be paid by one Party to the other Party as determined by the arbitrators as set forth above under this Section 12.3 be promptly paid in USD free of any Tax, deduction or offset, and any costs, fees or Taxes incident to enforcing the award shall, |
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| to the maximum extent permitted by Xxx, be charged against the Party resisting enforcement. Each Party agrees to abide by the award rendered in any arbitration conducted pursuant to this Section 12.3, and agrees that, subject to the Federal Arbitration Act, judgment may be entered upon the final award in a court of competent jurisdiction and that other courts may award full faith and credit to such judgment in order to enforce such award. |
| 13.2 | Assignment. |
| 13.2.1 | Assignment Generally. Except as expressly provided herein, neither this Agreement nor any interest hereunder shall be assignable, nor any other obligation delegable, by Licensor without the prior written consent of Company (not to be unreasonably withheld or delayed). |
| 13.2.2 | Assignment by Company. Except as expressly provided herein, neither this Agreement nor any interest hereunder shall be assignable, nor any other obligation delegable, by Company without the prior written consent of Licensor (not to be unreasonably withheld, conditioned or delayed); provided, however, that Company may, without the prior written consent of Licensor, assign this Agreement to an Affiliate or to any Third Party in connection with a Change of Control or sale of all or substantially all of its assets to which this Agreement relates. |
| 13.2.3 | Continuing Obligations. No assignment under this Section 13.2 shall relieve the assigning Party of any of its responsibilities or obligations hereunder and, as a condition of such assignment, the assignee shall agree in writing to be bound by all obligations of the assigning Party hereunder. This Agreement shall be binding upon the successors and permitted assigns of the Parties. |
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| 13.2.4 | Void Assignments. Any assignment not in accordance with this Section 13.2 shall be void. |
| 13.2.5 | Assignment of Licensor Technology. Licensor shall not assign or transfer any Licensor Technology to any of its Affiliates without the prior written consent of Company unless such Affiliate agrees in writing to be bound by all obligations of Licensor. |
| 13.6 | Accounting Procedures. Each Party shall calculate all amounts, and perform other accounting procedures required, under this Agreement and applicable to it in accordance with GAAP. |
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| 13.10 | Captions. The captions to this Agreement are for convenience only, and are to be of no force or effect in construing or interpreting any of the provisions of this Agreement. |
| 13.11 | Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York, USA, excluding application of any conflict of laws principles that would require application of the Law of a jurisdiction outside of State of New York, USA. |
If to Company, addressed to:
Liquidia Technologies, Inc.
000 Xxxxx Xxxxx, Xxxxx 000
Morrisville, North Carolina 27560
USA
Attention: General Counsel
Email: xxxxx@xxxxxxxx.xxx
With a copy, which shall not constitute notice, to:
DLA Piper LLP (US)
00 Xxxx X. Xxxxxxx Xxxxxxx, Xxxxx 000
Short Hills, New Jersey 07078
USA
Attention: Xxxxxx X. Xxxxxxx
Email: xxxxxx.xxxxxxx@xx.xxxxxxxx.xxx
If to Licensor, addressed to:
3F.-3, Xx. 00, Xxxxxxxx Xxxx
Nangang District, Taipei City 11502
Taiwan
Attention: Pei Kan/ Xxxxxx Xx
Email: xxxxxx@xxxxxxxx.xxx.xx/ Xxxxxx.xx@xxxxxxxx.xxx.xx
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With a copy, which shall not constitute notice, to:
30F, No. 95. Xxx Xxx X. Road, Section 2
Ta-an District, Taipei City 106
Taiwan
Attention: Xxxxxxxxxx Xx
Email: xxxxxxxxxx.xx@xxxxxxx.xxx
| 13.13 | Language. The official language of this Agreement and between the Parties for all correspondence shall be the English language. |
[signature page follows]
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IN WITNESS WHEREOF, duly authorized representatives of the Parties have executed this Agreement as of the Effective Date.
PHARMOSA BIOPHARM INC. | LIQUIDIA TECHNOLOGIES, INC. |
Signature: /s/ Xxxxx Xxxxx | |
Printed Name: Xxx Xxx | Printed Name: Xxxxx Xxxxx |
Title: President | Title: CEO |
[Signature Page to License Agreement]
Schedule 1.23
Existing Product
[***]
Schedule 1.24
Existing Third Party Agreements
[***]
Schedule 1.35
Licensor Know-How
[***]
Schedule 1.36
Licensor’s Knowledge Individuals
[***]
Schedule 1.38
Licensor Patents
[***]
Schedule 2.3
Licensor Technology Transfer Plan
[***]
Schedule 4.3
Supply Agreement Key Terms
The terms outlined below, together with any terms contained or described in the Agreement, will serve as the basis for the definitive Supply Agreement between the Parties. Unless otherwise set forth herein, capitalized terms shall have the meanings ascribed to them in the Agreement.
CLINICAL SUPPLY TERMS | |
Clinical Supply Obligation | During the term of the Supply Agreement, Company may deliver purchase orders to Licensor for the manufacture and supply of Filled Ampules for the development of Product in the Territory (including use of Filled Ampules in clinical trials). Within [***] following Company’s issuance of each purchase order, Licensor shall acknowledge receipt and acceptance of such purchase order; provided, that Company provides at least [***] of lead time for such purchase order. In the event that Company does not provide such minimum lead time for such purchase order, Licensor shall be permitted to reject any amounts ordered without such minimum lead time; provided, however, that Licensor shall use commercially reasonable efforts to manufacture and supply all such Filled Ampules to Company in such requested delivery date set forth in such purchase order. In the event that Licensor fails to reject in writing to Company any purchase order hereunder within [***] following issuance from Company, such purchase order shall be deemed accepted by Licensor and Licensor shall be responsible for manufacturing and supplying all quantities of Filled Ampules thereunder in accordance with the terms of such purchase order. The purchase order shall be placed in a number of Filled Ampules equal to a multiple of Licensor’s standard batch size (the “Order Size Requirement”). Company will use reasonable efforts to satisfy its clinical supply requirements through the submission of no more than [***] orders per year. |
Clinical Supply Price | [***] of the Manufacturing Cost. “Manufacturing Cost” means the actual and verifiable costs and expenses paid by Licensor to one (1) or more Third Parties for the manufacture and supply of the Filled Ampules, including but not limited to, Licensor’s external, out-of-pocket costs of materials, production, factory overhead, quality control, quality assurance, bulk and finished packaging, transportation and insurance.
Licensor will invoice Company for (i) [***] of the estimated price at the time of Licensor’s acceptance or deemed acceptance of the purchase order, and (ii) the balance upon delivery of the Filled Ampules. Company will pay within thirty (30) days upon receipt of each invoice. |
Remaining Shelf Life at Time of Delivery for Clinical Supply | At a minimum, each Filled Ampule shall, at the time of delivery, have at least a number of months of shelf life remaining equal to the greater of (i) the number of months equal to the approved shelf life for the Filled Ampules minus [***] and (ii) [***]. |
COMMERCIAL SUPPLY TERMS | |
Commercial Supply Obligation | Forecast. Commencing [***] prior to anticipated launch of the first Product in the Territory and on or before the last day of the first month of each calendar quarter thereafter, Company will provide Licensor with a |
written rolling forecast (each, a “Forecast”) of Company’s quarterly anticipated orders of Filled Ampules for commercialization in the Territory for the following [***] (commencing with the calendar quarter immediately following the calendar quarter in which such Forecast is delivered), which forecast shall be broken down on a quarterly basis. The first [***] of each Forecast shall be binding and Company shall be required to deliver to Licensor with its Forecast a purchase order for the [***] of the binding Forecast (for clarity, the [***] of each Forecast will be covered by earlier submitted purchase orders). The Forecast and the purchase orders shall be provided in compliance with the Order Size Requirement. Acceptance and Delivery. Licensor shall, within [***] of receipt of a purchase order, confirm in writing that a purchase order has been accepted. Subject to the Company’s compliance with the Order Size Requirement, Licensor shall be required to accept and fulfill the purchase orders (or portions thereof, as applicable) which are provided to Licensor in accordance with the terms and conditions of the Supply Agreement; provided, however, that the quantity of Filled Ampules in a given purchase order is no more than [***] or less than [***] of the quantity forecasted for such quarter when such quarter was in the binding portion of the Forecast. Should Company request Filled Ampules in excess of [***] of the quantity forecasted for such quarter when such quarter was in the binding portion of the latest Forecast, then Licensor shall use commercially reasonable efforts to meet such request. Licensor shall deliver Filled Ampules to satisfy each purchase order (including with respect to the delivery dates, delivery locations, quantities and other terms set forth therein). In the event that Company orders less than [***] of Filled Ampules in the aggregate in any [***], Licensor shall not be liable for failure to deliver the Filled Ampules in quantities up to [***] quantity due to batch failure either in the event of shortage in quantity or total batch failure. For the avoidance of doubt, in the case of shortage in quantity in a particular batch instead of a total batch failure, Company will still pay for the remaining Filled Ampules in that batch duly delivered in accordance with the terms of the Supply Agreement. | |
Commercial Supply Price | [***] of the Manufacturing Cost.
Licensor will invoice Company for (i) [***] of the estimated price at the time of Licensor’s acceptance or deemed acceptance of the purchase order, and (ii) the balance upon delivery of the Filled Ampules. Company will pay within thirty (30) days upon receipt of each invoice. |
Remaining Shelf Life at Time of Delivery for Commercial Supply | At a minimum, each Filled Ampule shall, at the time of delivery, have at least a number of months of shelf life remaining equal to the greater of (i) the number of months equal to the approved shelf life for the Filled Ampules minus [***] and (ii) [***]. |
Cooperation to Improve Terms of Commercial Supply | Licensor and Company shall reasonably cooperate to improve the efficiency of Licensor’s commercial supply chain, including Licensor’s costs, payment terms to vendors, lead times and approved shelf life. In the event any such improvements are achieved, Licensor and Company shall amend the commercial supply terms to pass through the benefit of such improvements to Company. |
have met the Product Warranties, then Licensor shall bear the costs of such independent specialized firm and laboratory testing and Licensor shall (at Company’s option) either replace (as soon as reasonably practicable) the defective Filled Ampules without any cost to Company or credit Company for the amount of the Supply Price of such quantities of Filled Ampules. | |
OTHER TERMS | |
Supply Redundancy | Company shall have the right, at its own cost and expense, to qualify and maintain a secondary site outside Taiwan for each stage of the manufacture of Filled Ampules and each supplier of materials, components and processes necessary for the manufacture of Filled Ampules if the primary site (a “Primary Site”) under Licensor’s existing supply chain as of the Effective Date is in Taiwan (“Company Secondary Sites”), and Licensor shall provide reasonable assistance necessary or desirable for the qualification and maintenance of the secondary site at reasonable, mutually agreed upon charges to Company. With respect to any materials, components and processes sourced from Primary Sites outside of Taiwan, Company shall have the right to source, directly from such Primary Site or any applicable Licensor Secondary Site (or their respective affiliates) or indirectly through Licensor, any and all materials, components and processes necessary for Company Secondary Sites to perform their respective manufacturing activities for their respective stages. Licensor may, at its sole discretion, at its own cost and expense, qualify and maintain a secondary site for each stage of the manufacture of Filled Ampules and each supplier of materials, components and processes necessary for the manufacture of Filled Ampules (“Licensor Secondary Sites”, together with Licensor’s current sites, “Licensor Sites”)). Licensor shall ensure that all of Licensor Sites, and Company shall ensure that all of Company Secondary Sites, for the manufacture of Filled Ampules and all of their respective suppliers of materials, components and processes necessary for the manufacture of Filled Ampules are in a qualified and validated state appropriate for inclusion as a manufacturing site for Filled Ampules (or any portion thereof) as required by the applicable Governmental Body and in the Regulatory Approvals. After a Company Secondary Site for a stage has been fully qualified and all applicable regulatory approvals obtained, the manufacture of Filled Ampules (or portion thereof) and the supply of materials, components and processes necessary for the manufacture of Filled Ampules may be allocated between the Company Secondary Site and the Licensor Site for such stage in a manner to ensure that each site is able to supply Company’s and/or its Affiliates (and other designees) requirements expeditiously if the need arises; provided that Company and Licensor shall reasonably cooperate and use good faith efforts to work together to set and meet any reasonable minimum purchase requirements of Primary Sites for supply of Filled Ampules, if any. If Company is using a Licensor Site outside Taiwan for the Company Secondary Site, the Parties shall use reasonable efforts to align and coordinate the manufacture schedules of such site, and such site shall fulfil the Parties’ orders through an allocation reasonably determined by Company taking into consideration demand and upstream supply requirements. Further, Licensor Technology and the equipment |
supplied by Licensor shall not be used to manufacture any products for Company or its Affiliates other than the Products. As between the Parties, Company shall be responsible for obtaining the Regulatory Approvals for qualifying and maintaining Licensor Sites for the manufacture of Filled Ampules for the Field in the Territory. | |
Tech Transfer | Once a Company Secondary Site is identified, upon Company’s request, Licensor shall provide reasonable technical assistance to Company and its Affiliates (and the Third Party contract manufacturer for such Company Secondary Site “CMO”) at reasonable, mutually agreed upon charges with respect to Company’s and its Affiliate’s (and any CMO’s) receipt, adoption and establishment of the manufacturing process, including: (a) making available a reasonable number of appropriately trained personnel to provide, on a mutually convenient timetable, technical assistance with respect to such transfer, (b) using commercially reasonable efforts to promptly assist Company and its Affiliates (and any CMO) in obtaining all necessary regulatory approvals and/or modifying existing health authorizations for the manufacture of Filled Ampules by Company, its Affiliate and/or a CMO at such Company Secondary Site, (c) allowing Company and its Affiliates (and any CMO) to cross reference Licensor’s (and its Affiliate’s) regulatory filings (such as a drug master file) and such other regulatory submissions controlled by Licensor (or its Affiliates) applicable to the Filled Ampules, as the case may be, (d) supplying analytical test methods and other testing know-how including method validation required to perform release testing or other testing as may be required by the applicable Regulatory Authority, and (e) upon request by Company, providing Company and its Affiliates (and any CMO) with appropriate quantities of reference standards related to Product in order to facilitate its testing. |
Audit Rights | Licensor shall permit (and shall ensure that its Affiliates and any Third Parties involved in the manufacture of Filled Ampules permit) one or more qualified technical specialists from Company (or its Affiliate or its designees, as applicable), at Company’s cost, upon reasonable prior notice and during normal business hours, to conduct one (1) annual audit of each manufacturing facility (and any other facility that is involved in the manufacture of Filled Ampules); provided, however, that in the case of a “for cause” audit, Company (or its Affiliate or its designees, as applicable) shall have the right to perform additional audits at any time (regardless of any other audits Company may have conducted during a given year) upon reasonable prior notice. Licensor shall use commercially reasonable efforts to provide a written response to any audit findings within one (1) month of receipt of such observations and conclusions. The Parties will discuss such response and Licensor shall promptly implement (and cause to be implemented) corrective actions. |
Ongoing Stability Studies | For purposes of extending the permitted dating of the Filled Ampules, Licensor shall, at its own expense, (a) continue performing all stability studies ongoing at the Effective Date with an objective to achieve [***] stability dating for the Filled Ampules, and (b) conduct, in addition to those studies set forth in subsection (a), an on-going program of annual stability testing, in each case of subsection (a) and (b), in accordance with Licensor’s current protocol and otherwise meeting all requirements of |
cGMP, applicable laws, the Specifications and Regulatory Approvals, on samples from all batches of Filled Ampules. Such stability testing shall be stability indicating. In the event that Licensor detects any out of Specification results, or any negative trends and/or degradant in excess of approved limits in connection with such testing, Licensor shall notify Company in the manner set forth in the Quality Agreement. Licensor shall specifically incorporate such additional testing and controls (e.g., storage condition changes) as Company may reasonably specify with respect to such instability and/or degradant. In addition, Licensor shall place a number of batches, as reasonably instructed by Company, of Filled Ampules on stability following the implementation of any change request. Furthermore, any batch of Filled Ampules manufactured with one or more significant deviations should be assessed for possible inclusion in stability studies. Licensor is responsible to perform stability testing on Filled Ampules to support shipping conditions and/or temperature excursions that may occur during shipping and make available to Company such data. | |
Quality Agreement | The Parties shall negotiate in good faith and use commercially reasonable efforts to enter into the Quality Agreement within ninety (90) days after the effective date of the Supply Agreement, which Quality Agreement will set out the policies, procedures and standards by which the Parties and any Affiliates will coordinate and implement (or cause its Third Party contract manufacturers to coordinate and implement, as applicable) the operation and quality assurance activities and regulatory compliance objectives contemplated under the Supply Agreement. |
Term and Termination | The Supply Agreement shall commence on the effective date (as set forth therein) and, unless earlier terminated, continue in effect until expiration of the last Royalty Term under the Agreement. Either Party shall be permitted to terminate the Supply Agreement (a) for an uncured material breach of the other Party, (b) in the event of the bankruptcy of the other Party or (c) in the event that the other Party is unable to perform due to force majeure, in each case as shall be more fully set forth in the Supply Agreement. Company shall also be permitted to terminate the Supply Agreement immediately in the event of a Change of Control of Licensor (to be defined in the Supply Agreement) in which a Company Competitor acquires control of Licensor. |
Additional Terms | Other terms, conditions and provisions as are usual and customary for an agreement of this type, including, without limitation, representations, warranties, insurance, indemnification, dispute resolution and confidentiality will be negotiated and agreed upon between the Parties in the Supply Agreement. |
Schedule 5.4.1
Regulatory Transition Plan
[***]
Schedule 6.9
Form of Royalty Report
[***]
Schedule 8.5.1
Initial Press Release
Liquidia Corporation and Pharmosa Biopharm Announce Collaboration for Sustained-Release Inhaled Treprostinil Product in North America
| ● | Liquidia exclusively licenses North American rights to L606, an inhaled formulation of treprostinil administered twice-daily with a short duration, next-generation nebulizer |
| ● | Liquidia funds $10 million upfront payment from finance agreement with HealthCare Royalty |
| ● | Pharmosa to receive up to $215 million in development and sales milestones for PAH and PH-ILD indications, $10 million for each additional approved indication and additional product, and royalties on net sales of L606 |
| ● | Creates industry leading portfolio in rapidly expanding market for inhaled treprostinil |
| ● | Liquidia to host webcast today at 8:30 a.m. Eastern Time |
MORRISVILLE, N.C., [June X], 2023 – Liquidia Corporation (NASDAQ: LQDA) (Liquidia or the Company) and Pharmosa Biopharm (Pharmosa) today announced that they have entered into an exclusive licensing agreement for the development and commercialization in North America of L606, an inhaled, sustained-release formulation of treprostinil currently being evaluated in a clinical trial for the treatment of pulmonary arterial hypertension (PAH) and pulmonary hypertension associated with interstitial lung disease (PH-ILD).
Xxxxx Xxxxx, Chief Executive Officer of Liquidia, stated: “L606 is the perfect life-cycle complement to our pipeline and furthers our mission to provide innovative treatment options that improve the lives of patients suffering from PAH or PH-ILD. As already observed in the ongoing Phase 3 open-label study of PAH patients, Pharmosa’s novel liposomal formulation offers potential to improve patient convenience and compliance with twice-daily dosing using a short-duration, next-generation nebulizer. More importantly, we believe that the inhaled drug-device combination may provide best-in-class treprostinil exposure over a 24-hour period, including during sleeping hours, which could translate to improved efficacy, tolerability, and patient outcomes. Our investment in this collaboration, alongside our continued preparation for a potential launch of YUTREPIA™ (treprostinil) inhalation powder, are clear examples of Liquidia’s long-term commitment to addressing unmet needs in treating pulmonary hypertension and enabling choice based on patients’ preferences and circumstances.”
Pei Kan, Ph.D., President of Pharmosa, added: “Liquidia is the ideal partner to bring L606 to the North American market. Liquidia has shown an unflinching determination to bring novel products to patients, and provides clear synergies with their commercial effort, clinical expertise and deep relationships with key opinion leaders. Pharmosa will focus on advancing its sustained-release liposomal technology which has demonstrated in L606 the ability to dramatically reduce maximum systemic drug concentrations while significantly increasing local concentrations deep in the lung.”
Under the agreement, Liquidia will be responsible for development, regulatory and commercial activities of L606 in North America. Pharmosa will manufacture clinical and commercial supplies of L606 and support Liquidia in establishing a redundant global supply chain. In consideration for these exclusive rights, Liquidia will pay Pharmosa an upfront payment of $10 million, potential development and sales milestone payments of up to $215 million tied to PAH and PH-ILD indications, and two tiers of low, double-digit royalties on net sales of L606. Pharmosa will also receive a $10 million milestone payment for each additional indication and additional product approved. Liquidia retains the first right to negotiate for development and commercialization of L606 in Europe and other territories should Pharmosa seek a partner, subject to satisfaction of certain conditions as set forth in the license agreement.
Liquidia intends to seek first regulatory approval of L606 in the United States under the 505(b)(2) regulatory pathway. The planned New Drug Application (NDA) is expected to include: (i) the completed Phase 1 trial demonstrating tolerability and comparable pharmacokinetics to nebulized Tyvaso (treprostinil) inhalation solution; (ii) clinical data from the on-going, open-label Phase 3 study in the United States in PAH and PH-ILD patients; and (iii) clinical data from a double-blind, randomized, placebo-controlled study to evaluate treatment of PH-LD patients with L606. Liquidia intends to initiate the PH-ILD trial in first half of 2024.
In support of today’s announcement, HealthCare Royalty (HCRx) will fund Liquidia $10.0 million from the Revenue Interest Financing Agreement (RIFA) announced in January 2023. The RIFA included a $7.5 million financing tranche at Liquidia’s discretion to support any acquisition of rights to a clinical stage or commercial stage biopharmaceutical product to diagnose, prevent, or treat pulmonary hypertension. In connection with the transaction with Pharmosa, HCRx has agreed to advance an additional $2.5 million from the $25 million fourth tranche under the RIFA, which was to be funded upon the mutual election of both Liquidia and HCRx. Today’s announcement does not impact the $35 million tranche that will be available to Liquidia upon favorable resolution of the ongoing patent litigation with United Therapeutics Corporation. Total proceeds funded to Liquidia by HCRx are now $42.5 million of the up to $100 million contemplated by the RIFA. As previously announced, HCRx will receive a tiered royalty on net revenue generated by YUTREPIA and other products marketed by Liquidia. The aggregate payments to HCRx are capped at 175% of the total amounts advanced by HCRx, with the potential for a true-up payment to be made by Liquidia if HCRx’s internal rate of return is less than 18% on the date the cap is reached.
Conference Call
Liquidia will host a webcast call today at 8:30 a.m. Eastern Time. To listen to the webcast, please visit xxxxx://xxxxxxxx.xxx/xxxxxxxxx/xxxxxx-xxx-xxxxxxxxxxxxx.
About L606 (liposomal treprostinil) inhalation suspension
L606 is an investigational, liposomal formulation of treprostinil administered twice-daily with a short-duration next-generation nebulizer. The L606 suspension uses Pharmosa’s proprietary liposomal formulation to encapsulate treprostinil which can be released slowly at a controlled rate into the lung, enhancing drug exposure over an extended period of time and reducing local irritation of the upper respiratory tract. L606 is currently being evaluated in an open-label study in the United States for treatment of pulmonary arterial hypertension (PAH) with a planned pivotal study for the treatment of pulmonary hypertension associated with interstitial lung disease (PH-ILD).
About YUTREPIA™(treprostinil) inhalation powder
YUTREPIA is an investigational, inhaled dry powder formulation of treprostinil delivered through a convenient, low-resistance, palm-sized device. On November 5, 2021, the FDA issued a tentative approval for YUTREPIA, which is indicated for the treatment of pulmonary arterial hypertension (PAH) to improve exercise ability in adult patients with New York Heart Association (NYHA) Functional Class II-III symptoms. The FDA has confirmed that YUTREPIA may add the indication to treat pulmonary hypertension with interstitial lung disease (PH-ILD) without additional clinical studies. YUTREPIA was designed using Liquidia’s PRINT® technology, which enables the development of drug particles that are precise and uniform in size, shape, and composition, and that are engineered for enhanced deposition in the lung following oral inhalation. Liquidia has completed INSPIRE, or Investigation of the Safety and Pharmacology of Dry Powder Inhalation of Treprostinil, an open-label, multi-center phase 3 clinical study of YUTREPIA in patients diagnosed with PAH who are naïve to inhaled treprostinil or who are transitioning from Tyvaso® (nebulized treprostinil). XXXXXXXX was previously referred to as LIQ861 in investigational studies.
About pulmonary arterial hypertension (PAH)
Pulmonary arterial hypertension (PAH) is a rare, chronic, progressive disease caused by hardening and narrowing of the pulmonary arteries that can lead to right heart failure and eventually death. Currently, an estimated 45,000 patients are diagnosed and treated in the United States. There is currently no cure for PAH, so the goals of existing treatments are to alleviate symptoms, maintain or improve functional class, delay disease progression, and improve quality of life.
About pulmonary hypertension associated with interstitial lung disease (PH-ILD)
Pulmonary hypertension (PH) associated with interstitial lung disease (ILD) includes a diverse collection of up to 150 different pulmonary diseases, including interstitial pulmonary fibrosis, chronic hypersensitivity pneumonitis, connective tissue disease related ILD, and sarcoidosis among others. Any level of PH in ILD patients is associated with poor 3-year survival between 30 to 35%. A current estimate of PH-ILD prevalence in the United States is greater than 60,000 patients, though population growth in many of these underlying ILD diseases is not yet known due to factors including underdiagnosis and lack of approved treatments until March 2021 with inhaled treprostinil.
About Liquidia Corporation
Liquidia Corporation is a biopharmaceutical company focused on the development and commercialization of products in pulmonary hypertension and other applications of its PRINT® Technology. The company operates through its two wholly owned subsidiaries, Liquidia Technologies, Inc. and Liquidia PAH, LLC. Liquidia Technologies has developed YUTREPIA™ (treprostinil) inhalation powder for the treatment of pulmonary arterial hypertension (PAH). Liquidia PAH provides the commercialization for pharmaceutical products to treat pulmonary disease, such as generic Treprostinil Injection. For more information, please visit xxx.xxxxxxxx.xxx.
About Pharmosa Biopharm
Pharmosa Biopharm Inc. (PBI) is a Taiwan-based biotechnology company focused on developing new drugs by exploiting its proprietary liposomal formulations and manufacturing technology. With regional
and global strategic partnerships, PBI develops products through 505(b)2 or hybrid applications to regulatory authorities with the intent to expand the clinical potential of existing drugs by exploiting innovative delivery formulations and medical devices. For more information, please visit xxxxx://xxx.xxxxxxxx.xxx.xx
About HealthCare Royalty
HCRx is a leading royalty acquisition company focused on commercial or near-commercial stage biopharmaceutical products. HCRx has $6.3 billion in cumulative capital commitments with offices in Stamford (CT), San Francisco, Boston and London. For more information, visit xxx.xxxx.xxx. HEALTHCARE ROYALTY® and HCRx® are registered trademarks of HealthCare Royalty Management, LLC.
Contact Information for Media & Investors
Xxxxx Xxxxx
Senior Vice President, Corporate Development and Strategy
919.328.4400
xxxxx.xxxxx@xxxxxxxx.xxx
Schedule 9.2(q)
Existing Third Party Agreements Requiring Consent
[***]
Exhibit A
Form of Assignment and Assumption
ASSIGNMENT AND ASSUMPTION AGREEMENT1
THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Assignment Agreement”) is made as of the _____ day of __________, 202__ (the “Effective Date”), by [between/among] Pharmosa Biopharm Inc., a corporation incorporated under the laws of Taiwan having a place of business at 3F.-3, Xx. 00, Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxxx Xxxx 00000, Xxxxxx (“Assignor”), [and] Liquidia Technologies, Inc., a corporation incorporated under the laws of the State of Delaware, USA having a place of business at 000 Xxxxx Xxxxx, Xxxxx 000, Xxxxxxxxxxx, XX 00000, XXX (“Assignee”)[, and _____________, a _____________ under the laws of ______________ having a place of business at ___________________ (“Counterparty”). Assignor[,/and] Assignee [and Counterparty] may be referred to herein individually as a “Party” and collectively as the “Parties”.
WITNESSETH:
WHEREAS, [Counterparty/_____________, a _____________ under the laws of ______________ having a place of business at ___________________ (“Counterparty”)] and Assignor entered into that certain _____________ dated as of _____________ ___, 20___ attached hereto as Exhibit 1 (as amended, the “Agreement”);
WHEREAS, Assignor and Assignee have entered into that certain License Agreement dated as of ___________ ___, 2023 (the “License Agreement”), pursuant to which Assignor agreed to assign the Agreement to Assignee upon Assignee’s request;
WHEREAS, pursuant to the License Agreement, Assignee has requested that Assignor assign the Agreement to Assignor; [and]
WHEREAS, Assignor desires to assign, transfer and convey unto Assignee, and Assignee desires to assume, all of Assignor’s right, title and interest in and to the Agreement and its delegation to Assignee of all of Assignor’s obligations, duties and responsibilities under the Agreement; [and
WHEREAS, Counterparty desires to consent to such assignment, transfer, conveyance, assumption and delegation;]
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor[,/and] Assignee [and Counterparty], each intending to be legally bound, hereby agree as follows:
1 This form of Assignment and Assumption Agreement has been drafted to contemplate the situations in which either (a) no consent to the assignment is required by the counterparty to the Existing Third Party Agreement or (b) consent is required from such counterparty. The form should be customized by removing the inapplicable bracketed language (depending on whether counterparty consent is required) and filling in the blanks, as applicable.
[Signature Page Follows]
IN WITNESS WHEREOF, duly authorized representatives of the Parties have executed this Assignment Agreement as of the Effective Date.
ASSIGNOR:
PHARMOSA BIOPHARM INC.
Signature:________________________________
Printed Name:_____________________________
Title: ____________________________________
ASSIGNEE:
LIQUDIA TECHNOLOGIES, INC.
Signature:________________________________
Printed Name:_____________________________
Title: ____________________________________
[COUNTERPARTY:
____________________________
Signature:________________________________
Printed Name:_____________________________
Title: ____________________________________]
Exhibit 1 to Assignment Agreement
See attached.2
2 Agreements set forth on Schedule 1.24 to be assigned (including all amendments) to be attached.
