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EXHIBIT 10.56
LICENSE AND DISTRIBUTION AGREEMENT
This Agreement is between Sumitomo Pharmaceuticals Co., Ltd. ("Sumitomo") and
NeXstar Pharmaceuticals, Inc. ("NeXstar") in connection with registration, sale
and marketing of NeXstar's product AmBisome in Japan. The term "AmBisome"
shall mean, for the purpose of this Agreement, a liposomal antifungal agent
having amphotericin B as an effective substance and other compositions as
defined in Exhibit A attached to this Agreement. NeXstar has developed and is
now selling AmBisome elsewhere in the world. NeXstar has generated, and will
continue to generate, data (the "Product Data") which in its present form is
sufficient to have obtained product registrations for AmBisome from medicines
control agencies in 23 countries. AmBisome is protected in Japan by Patent No.
0000000 and Patent Application No. 284828/88 (Patent Rights), and the trademark
AmBisome is protected in Japan by registered No. 0000000 (Trademark), all in
the name of NeXstar Pharmaceuticals, Inc. NeXstar and Sumitomo desire to have
the AmBisome product, as it is registered in various countries elsewhere in the
world, developed, registered and marketed in the Japanese market, and therefore
agree as follows.
1. LICENSED RIGHTS. NeXstar grants to Sumitomo an exclusive license with a
right to sublicense under the Patent Rights and Trademark in Japan for
the sale and use of AmBisome in Japan for the term of this Agreement.
Before Sumitomo exercises its right to sublicense AmBisome to another
party, Sumitomo obtains NeXstar's prior approval, such approval not
being unreasonably withheld.
2. SUPPLY OF PRODUCT. All AmBisome to be transferred to Sumitomo under the
terms of this Agreement (Product) shall be manufactured by NeXstar and
supplied by NeXstar in nude vials at NeXstar's price of vial in U.S.
dollars, C.I.F. Osaka.
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2-1. [Confidential Material omitted and filed separately with the
Securities and Exchange Commission pursuant to Section 24b-2 of
the Securities Exchange Act of 1934.]
2-2. All the product will be packaged and labeled by Sumitomo in
accordance with all regulatory requirements for use and/or sale
of AmBisome in Japan.
2-3. Order and Forecast
At the beginning of April and October in every year, Sumitomo
shall provide to NeXstar a forecast of the number of vials of
AmBisome required for its sales in the next six (6) months
starting in April and October respectively. Sumitomo shall place
firm orders based upon such forecast two (2) months before
deliveries.
2-4. Specification
All the Product shall meet the specifications set forth in
Exhibit B attached to this Agreement ("Specification"). The
analytical test method of Product (Analytical Test Method) for
the Specification shall be specified in the Exhibit C attached
to this Agreement. If such Product is found not to meet the
Specification by Sumitomo using Analytical Test Method and by
NeXstar with a confirmatory test using the same method, NeXstar
shall supply Sumitomo with new AmBisome for the replacement at
NeXstar's cost. In case the test results are different between
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Sumitomo and NeXstar, both parties shall discuss the cause of
the difference and decide how to handle the matter. In case
any revision or supplement to the Specification and/or
Analytical Test Method, the parties shall discuss and agree on
the revision of Exhibit B and C. In case an unexpected incident,
whatsoever it is, is caused by anything not being prescribed by
Specification, both parties shall meet and discuss how to deal
with the situation. NeXstar shall not change or modify the
manufacturing process of AmBisome without prior written consent
of Sumitomo.
2-5. Sumitomo shall make payment of the Product in U.S. dollars
within thirty (30) days after the confirmation that Product
meets the Specification by Sumitomo.
2-6. Sumitomo shall have the right to inspect NeXstar's plant to
check GMP conformance.
3. INFORMATION AND CLINICAL TRIALS. Sumitomo, with the Product Data and
cooperation from NeXstar, will seek the registration of AmBisome as a
licensed pharmaceutical with the Japanese Ministry of Health and Welfare
(the "Registration") at its own cost. Sumitomo will conduct any
additional preclinical studies and clinical trials required for the
Registration. NeXstar will supply up to 63,000 vials of Product for such
preclinical and/or clinical studies to Sumitomo free of charge. Should
Sumitomo require more than 63,000 vials for such preclinical and/or
clinical testing, such further Product will be supplied at a cost to
Sumitomo of twenty-five dollars ($25.00) per vial. The Product Data to
be supplied to Sumitomo will be used solely for the purpose of the
Registration.
3-1. Information Exchange
Until the launch of AmBisome in Japan, both parties will meet at
least annually to discuss and to exchange information on the
AmBisome. During the development period Sumitomo shall send to
NeXstar progress reports semiannually. Sumitomo shall provide
NeXstar with copies of all data, analyses and reports of
additional
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studies conducted by Sumitomo solely for NeXstar's use in
seeking additional or expanded registrations of AmBisome in the
territories outside Japan.
3-2. Sumitomo shall be responsible for decisions concerning the
design and execution of the application for the Registration,
and the conduct of additional preclinical and clinical studies
required for the Registration. NeXstar shall collaborate with
Sumitomo for such decision making.
3-3. Manufacturing Information
NeXstar shall provide Sumitomo with sufficient manufacturing
information on AmBisome for the Registration in Japan. Sumitomo
agrees to maintain manufacturing information in strict
confidence and not to disclose the same to any other party
without NeXstar's prior written consent and not to use such
information for any other purpose than Registration.
3-4. Adverse Event Report
Each party shall provide to the other adverse event reports at
the same time they are provided to the regulatory authorities as
required by law.
4. [Confidential Material omitted and filed separately with the
Securities and Exchange Commission pursuant to Section 24b-2 of the
Securities Exchange Act of 1934.]
5. ROYALTIES.
5-1. [Confidential Material omitted and filed separately with the
Securities and Exchange Commission pursuant to Section 24b-2 of
the Securities Exchange Act of 1934.]
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5-2. When Patent Rights no longer exists, the royalty will be
reduced to two (2) percent of Net Sales. In the event that a
true generic form of AmBisome were to be marketed in Japan the
royalty would drop to 1%.
5-3. Net Sales
Net Sales shall mean the total of the invoiced sales price of
AmBisome to wholesalers recorded as revenue by Sumitomo, less
(1) actual credited allowances to, and
(2) chargebacks from the account of such unaffiliated
customers for damaged or out-dated and returned
product, to the extent such amounts are included in the
invoiced sales price,
(3) rebates and
(4) discount.
5-4. Withholding tax.
All payments to be made under this Agreement shall where
required by the applicable laws of Japan be made after deduction
of withholding and other taxes.
6. MARKETING. Sumitomo shall distribute the AmBisome only under the
AmBisome Trademark in Japan, and shall not gain any vested trademark
rights in the Trademark thereby. NeXstar shall be responsible for
keeping the Trademark effective at NeXstar's expense in Japan. By the
end of March and September in every year, Sumitomo shall submit to
NeXstar a marketing plan, which shall explain Sumitomo's proposed
marketing and distribution efforts for AmBisome for the next 12 months.
This marketing plan will be formulated with the advice of NeXstar and,
where possible, will
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make use of promotional materials developed by NeXstar for use in its
current markets. Sumitomo shall market AmBisome in accordance with the
marketing plan.
7. PAYMENTS. Payment of royalties by Sumitomo to NeXstar from sales of
AmBisome shall be made within two (2) weeks after reports in section 8
are sent to NeXstar. Payments by Sumitomo to NeXstar shall be made in
U.S. dollars. Payments shall be calculated for each calendar quarter at
the exchange rate (T.T.S.) on the last business day of such calendar
quarter published in the United States Edition of the Wall Street
Journal under the Foreign Exchange listings. Sumitomo agrees at most
once in each calendar year, if necessary, to permit an independent
certified public accounting firm representing NeXstar and which is
reasonably acceptable to Sumitomo, upon NeXstar's written request, to
have access during normal business hours to such of the records of
Sumitomo as may be reasonably necessary to verify the accuracy of the
determination of royalties for any year ending not more than thirty-six
(36) months prior to the date of such request at NeXstar's cost. Such
firm shall report to NeXstar only the information necessary to verify
the accuracy of royalty payment.
8. REPORTS. Sumitomo shall furnish NeXstar with quarterly written reports
showing
(a) the gross sales of all AmBisome sold by Sumitomo and the
calculation of Net Sales from such gross sales.
(b) the royalties payable to NeXstar in U.S. dollars, if any, which
have accrued based upon Net Sales of AmBisome.
(c) withholding taxes, if any, required by law to be deducted in
respect of such sales.
(d) the exchange rates used in determining the amount of U.S.
dollars. Reports will be sent to NeXstar within one (1) month
after the end of each quarter.
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All records which Sumitomo must maintain under this Agreement shall be
full, true and accurate and shall contain all information and data which
may be necessary to ascertain and verify the royalties payable
hereunder. Such records shall be maintained for a period of seven (7)
years from the date of each payment.
9. CONFIDENTIALITY. Neither Sumitomo nor NeXstar will make any public
statement or other disclosure of information concerning any aspect of
this Agreement without the approval of the other party hereto, except
that each party may make such disclosures as may be required by
applicable law, including U.S. or Japanese securities laws. For the term
of this Agreement and five (5) years after the expiration or termination
of this Agreement, each Party shall hold all financial and technical
data, know-how or other information received from the other Party in
connection with the development, or sale of the AmBisome in confidence
and shall not use such information, except for;
(1) information that must be disclosed to government agencies for
the purpose of registering AmBisome
(2) information that is disclosed pursuant to any order or
requirement of a court, administrative agency, or other
governmental body
(3) information that is or becomes part of the public domain
through no fault of the receiving party
(4) information that is previously known to the receiving party
at the disclosure as shown by written records
(5) information which becomes known to the receiving party from
another source without breach of secrecy obligation to the
disclosing party, or
(6) information that was or is independently developed by the
receiving party.
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10. PATENT PROSECUTION AND MAINTENANCE. NeXstar shall take best efforts to
continue patent prosecution and maintain patent protection as regards
Patent Rights in Japan at NeXstar's cost.
11. INFRINGEMENT OF THE PATENT RIGHTS AND TRADEMARK. NeXstar shall have the
right to initiate an infringement or other appropriate suit or
proceeding against a third party that has infringed any of the Patent
Rights and Trademark. NeXstar shall have the sole right to elect counsel
and, except as provided in the following sentence, shall pay all
expenses of the suit or proceeding including without limitations
attorney's fees and court costs. Sumitomo has the right to participate
and, wherever necessary in order for NeXstar to adequately litigate such
suit or proceeding, Sumitomo shall offer reasonable assistance to
NeXstar in connection with any such proceeding at no charge to NeXstar
except for reimbursement of reasonable out-of-pocket expenses incurred
in rendering such assistance. Any damages, royalties, settlement fees or
other consideration received in any such suit or other proceeding shall
be allocated first to cover the out-of-pocket expenses, including
reasonable attorney fees, incurred by either party in connection with
any such suit or other proceeding, with the remainder to NeXstar.
If NeXstar decides not to assume responsibility for the conduct such
suit or other proceeding, Sumitomo shall have the right, but not
obligation, to conduct it for the infringement claim. In such event
NeXstar shall pay all expenses of the suit or proceeding including
without limitations attorney's fees and court costs, and the indemnity
from the third party shall belong to Sumitomo.
12. CLAIMED INFRINGEMENT BY OTHERS. NeXstar shall indemnify, defend and hold
Sumitomo harmless from any claim by any third party that the sale, the
offer to sell, or use of AmBisome for the approved indication(s) in
Japan infringes any patent held or licensed by
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such third party. NeXstar shall bear any and all expenses, costs of
defense (including without limitation attorney's fees, witness fees,
damages, judgments, fines, amount paid in settlement or royalties paid
to any third party) and any amounts Sumitomo becomes legally obligated
to pay because of any claimed infringement or claims, provided that
Sumitomo promptly notifies NeXstar such claimed infringement and agrees
to cooperate with NeXstar in the defense thereof. This indemnity shall
survive the termination of this Agreement.
13. DUE DILIGENCE. Sumitomo shall devote the same degree of attention,
resources and diligence to its respective obligations in this Agreement
and its efforts to develop, manufacture, market and sell AmBisome in
Japan as it devotes to other products of its own development.
14. TERM AND TERMINATION.
14-1. This Agreement shall become effective from the date of the last
signature set forth herein below and shall continue till the
later of the expiration date of the last of the patents in the
Patent Rights or a period of ten (10) years after Sumitomo's
launch of the Product in the Territory. After such expiration
date, this Agreement will be automatically extended for every
succeeding 1 year unless Sumitomo notifies NeXstar of its desire
to terminate this Agreement at least six (6) months prior to the
expiry.
14-2. Each party may terminate this Agreement without payment of any
compensation by giving a written notice of termination
(i) if the other party files a petition in bankruptcy or a
petition to take advantage of any insolvency or
reorganization act or, if the other party be adjudicated
a bankruptcy, or a court of complete jurisdiction shall
enter an order of decree
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appointing a receiver of property of the party, and such
adjudication, order or decree shall not be vacated or
set aside or stayed within thirty (30) days from its
entry.
(ii) if the other party has failed to perform a material
provision of this Agreement and has not corrected such
failure within sixty (60) days after receipt of notice
describing such failure.
14-3. Sumitomo may terminate this Agreement at any time upon six (6)
months' prior notice to NeXstar and payment of all amounts due
to NeXstar in such six (6) month period.
14-4. In the event that this Agreement is terminated by Sumitomo,
except for the termination by the reason of NeXstar's failure
(which shall include the termination by Sumitomo pursuant to
14-2), Sumitomo will assign and/or transfer any IND, NDA and/or
Registration for AmBisome to NeXstar of NeXstar's designee. In
the event of termination under paragraph 00-0, Xxxxxxxx agrees
to effect the assignment and/or transfer prior to the
termination date.
15. ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their permitted successors and
assigns; provided, however, that neither party shall assign any of its
rights and obligations hereunder except (i) as incident to the merger,
consolidations, reorganization, or acquisition of stock or assets
affecting substantially all of the assets or actual voting control of
the assigning party, or (ii) to an Affiliate; provided, however, that in
no event shall either party's obligations under the Agreement be
assigned to an Affiliate without prior written consent of the other
party. Affiliate shall mean a company of which at least fifty percent
(50%) of the voting stock is owned or controlled by the party concerned.
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16. GOVERNING LAW AND ARBITRATION. This Agreement shall be governed by the
laws of Germany. Any and all disputes, controversies or differences
which may arise between the parties hereto in relation to the
interpretation or administration of this Agreement shall finally be
settled by arbitration in accordance with the rules of the International
Chamber of Commerce, by which each party hereto is bound. The
arbitration shall be held in Tokyo, Japan, if demanded by NeXstar, in
Denver, U.S.A., if demanded by Sumitomo.
17. NO WARRANTY. NeXstar shall not be liable to Sumitomo, Sumitomo's
Affiliates, successors or any third party with respect to any claim
arising from the use of AmBisome, or any claim for loss of profits, loss
or interruption of business, or for indirect, special or consequential
damages of any kind, except stipulated otherwise in this Agreement and
except any claim directly resulted from the willful misconduct or
failure in manufacturing AmBisome by NeXstar.
18. FORCE MAJEURE. Neither party shall be responsible for failure or delay
in the performance of any of its obligations hereunder due to Force
Majeure. Force Majeure shall mean any circumstance which, due to an
event or a legal position beyond the parties' reasonable control,
renders impossible the fulfillment of any of the parties' obligations
hereunder, such as, but not limited to, acts of God, acts, regulations
and laws of any government, wars, civil commotions, destructions of
production facilities or materials by fires, earthquakes or storms,
labour disturbances, shortages of public utilities, common carriers or
raw materials, or any other causes of similar effects. The obligations
hereunder which are rendered impossible by any case of Force Majeure
shall not be discharged, but only be suspended and the party so affected
shall continue to perform its obligations as soon as such case of Force
Majeure is removed or alleviated.
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19. NOTICES. All notices, reports, requests or demands required or permitted
under this Agreement shall be forwarded, charges prepaid, by registered
air mail or by air courier or may be sent by facsimile, with confirmed
transmission, properly addressed to the respective Parties as follows:
If to NeXstar:
NeXstar Pharmaceuticals, Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
X.X.X.
(fax) 0-000-000-0000
Attention: Xxxxxxx X. Xxxxx
Vice President, Business Development
With a copy to: Xxxx Xxxxxxx
Vice President and General Counsel
Same address as set forth above
If to Sumitomo:
Sumitomo Pharmaceuticals Co. Ltd.
0-0, Xxxxxxxxxx 0-xxxxx Xxxx-xx
Xxxxx 000, Xxxxx
(fax) 00-0-000-0000
Attention: Xx. Xxxxxxx Xxxxx
Manager, R & D Coordination Department
With a copy to: Xx. Xxxxxxxxx Xxxxxxxxx
Manager, Corporate Planning Department
Same address as set forth above
20. INDEPENDENT CONTRACTORS. No agency, partnership or joint venture is
hereby established. Each Party shall act hereunder as an independent
contractor. Neither Party shall enter into, or incur, or hold itself out
to third parties as having authority to enter into or incur on behalf of
the other Party any contractual obligations, expenses or liabilities
whatsoever.
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Sumitomo Pharmaceuticals Co., Ltd. NeXstar Pharmaceuticals Inc.
By: /s/ XXXXXXXX XXXXXXXX By: /s/ XXXXXXX X. XXXXXXX
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Xxxxxxxx Xxxxxxxx
Title: President Title: President and Chief
------------------------ ------------------------
Executive Officer
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Date: September 26, 1996 Date: September 20, 1996
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EXHIBIT A
AMBISOME PRODUCT DESCRIPTION
AmBisome for injection is a sterile lyophilized product for intravenous
infusion. Each vial contains 50 mg of amphotericin B, U.S.P., Ph. Eur.
encapsulated in liposomes consisting of approximately 213 mg hydrogenated soy
phosphatidylcholine, 52 mg cholesterol, U.S.N.F., 84 mg
distearoylphosphatidylglycerol, 0.64 mg alpha tocopherol, U.S.P., Ph. Eur.
together with 900 mg sucrose, U.S.P., Ph. Eur. and 27 mg disodium succinate
hexahydrate as buffer. AmBisome is presented in sterile 50 cc and 30 cc, type
I, USP, EP glass vials. The closure consists of an elastomer stopper and a
crimped aluminum sealing ring fitted with removable plastic cap.
EXHIBITS B AND C
[Confidential Material omitted and filed separately with the Securities and
Exchange Commission pursuant to Section 24b-2 of the Securities Exchange Act
of 1934.]
