Exhibit 10.25
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
FEASIBILITY STUDY AGREEMENT
THIS FEASIBILITY AGREEMENT, including the attached Schedules (collectively the
"AGREEMENT") is entered into as of the 9th day of June, 2004 (the "EFFECTIVE
DATE") and is made by and between:
1. XXXXXX HEALTHCARE CORPORATION, a Delaware corporation ("BAXTER"), with a
principal place of business at Xxx Xxxxxx Xxxxxxx, Xxxxxxxxx, Xxxxxxxx
00000; and
2. CRITICAL THERAPEUTICS, INC. ("COMPANY" OR "CTI"), with a principal place
of business at 00 Xxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000.
RECITALS
BAXTER has acquired and developed, and continues to acquire and develop, certain
proprietary drug delivery formulation and dispersion techniques and processes,
the "FORMULATION TECHNOLOGY(IES)," as more specifically defined in Article 1.14.
The COMPANY has obtained the licensing rights from a third party, Xxxxxx
Laboratories ("ABBOTT") for certain formulations of a compound known as Zileuton
(the "COMPOUND") as more specifically defined in Article 1.4 and COMPANY desires
to provide BAXTER with the Compound as defined below, solely for the limited
Purpose as defined below.
The COMPANY and BAXTER would like to evaluate the feasibility of using the
Formulation Technologies for delivery of the Compound, and the Parties agree to
conduct such feasibility research according to the terms and conditions
described herein.
The Parties agree that the provisions of this Agreement shall apply to the
transfer of the Compounds from COMPANY to BAXTER, and to the transfer of
feasibility research results and any resulting Formulated Compounds from BAXTER
to COMPANY.
IN CONSIDERATION OF THE MUTUAL COVENANTS CONTAINED HEREIN AND INTENDING TO BE
LEGALLY BOUND, THE PARTIES AGREE AS FOLLOWS:
1. DEFINITIONS
In this Agreement, the following words shall have the following meanings:
1/4
1.1 "AFFILIATE" Any corporation or business entity which
controls, is controlled by, or is under
common control with COMPANY or BAXTER. A
corporation or business entity shall be
deemed to control another corporation or
business entity if it owns, directly or
indirectly, fifty percent (50%) or more of
the securities or other ownership interest
representing the equity, the voting stock or
general partnership interest of such
corporation or business entity.
1.2 "BACKGROUND INFORMATION" Confidential Information (as defined below)
and other Information (as defined below)
Controlled (as defined below) by a Party as
of the Effective Date.
1.3 "BACKGROUND INTELLECTUAL Intellectual Property (as defined below) in
PROPERTY" existence as of the Effective Date and
Controlled by a Party.
1.4 "COMPOUND" (+)-1-(1-benzo[b]thien-2-ylethyl)-1-
hydroxyurea also known as Zileuton.
1.5 "CONFIDENTIAL INFORMATION" This term shall have the meaning set forth
in Article 6.
1.6 "CONTROL OR CONTROLLED OR With respect to a particular item, Material,
CONTROLLING" Information, know-how or Intellectual
Property right, this term means that a Party
(i) owns or (ii) has a license and has the
ability to use and/or grant a license or
sublicenses (as applicable) to use such
without violating the contractual of any
third Party.
1.7 "[**]" A proprietary [**] to be supplied by [**].
1.8 "EFFECTIVE DATE" The date set out at the head of this
Agreement.
1.9 "EVALUATION" This term shall have the meaning set forth
in Article 3.
2/4
1.10 "FEASIBILITY STUDY" The research plan set forth in Schedule I.
1.11 "FOREGROUND INFORMATION" Confidential Information and other
Information generated by one or both Parties
during performance of this Agreement.
1.12 "FOREGROUND INTELLECTUAL Intellectual Property discovered, generated,
PROPERTY" conceived, first reduced to practice or
writing, or developed (in whole or in part)
by one or both Parties during performance of
this Agreement.
1.13 "FORMULATED COMPOUND" Compositions comprising Compound formulated
by BAXTER pursuant to the Feasibility Study.
1.14 "FORMULATION TECHNOLOGY(IES)" Technologies for [**] of drug substances
including, but not limited to, [**] and
XXXXXX'x patented and/or proprietary
technologies (including, but not limited to,
Xxxxxx'x [**].)
1.15 "INFORMATION" Ideas, concepts, discoveries, inventions,
developments, know-how, trade secrets,
techniques, methodologies, modifications,
innovations, improvements, writings,
documentation or data.
1.16 "INTELLECTUAL PROPERTY" Any intellectual property right in
Information, including without limitation,
any foreign or domestic (i) patent right
together with any extension, registration,
reissue, reexamination or renewal thereof,
and any pending application, including any
continuation, divisional, or
continuation-in-part thereof for any of the
foregoing; (ii) trademark; (iii) copyright.
1.17 "MATERIAL(s)" (a) The bulk Compound;
(b) any Information with respect to the bulk
Compound; and
(c) [**].
1.18 "NET SALES" The amount invoiced to customers by COMPANY,
its distributors and sub-licensees
3/4
for Licensed Formulated Compound deducting,
or as the case may be excluding:
VAT, sales, excise or similar taxes
imposed on the sale of such Licensed
Formulated Compound;
any mandatory or industry standard
discounts or rebates to the competent RHA
and/or social security systems pursuant to
the regulations and/or agreements in force;
cash and trade discounts and allowances;
and
credit allowed for return of previously
sold Licensed Formulated Compound or
defective Licensed Formulated Compound;
in each of the above cases only if charged
against COMPANY, its distributors or
sub-licensees and evidenced in COMPANY's or
its distributors' or sub-licensees' books
and records of account. For the avoidance of
doubt, sales by COMPANY to its sub-licensees
or distributors shall not constitute sales
to customers; sales by COMPANY's
sub-licensees or distributors shall
constitute sales to customers and shall be
included in Net Sales.
1.19 "PARTIES" XXXXXX and COMPANY, and "Party" shall mean
either of them.
1.20 "PERIOD OF PERFORMANCE" The period for the performance of the
Purpose (as defined below) which shall
commence on the Effective Date and shall end
upon COMPANY's receipt of the final report,
as set out in the Feasibility Study.
1.21 "PURPOSE" To determine the feasibility of formulating
the Compound using Formulation Technologies
in order to create a stable formulation
according to the Feasibility Study.
4/4
2. USE OF COMPOUNDS BY BAXTER
2.1. BAXTER shall use the Compound solely for the Purpose and shall not
attempt to reverse engineer, deconstruct, or in any way determine
the structure or composition of the Compound, except as authorized
in writing by COMPANY. BAXTER shall not sell, transfer, disclose, or
otherwise provide access to the Compound to any third party without
the prior express written consent of COMPANY, except that BAXTER may
allow access to the Compounds by its employees, consultants, on-site
contractors and agents and those of its Affiliates for effecting the
Purpose, provided that prior to such access, such individuals shall
have been apprised of the proprietary nature of the Compounds.
BAXTER will take reasonable steps to ensure that such employees,
consultants, on-site contractors and agents use the Compound in a
manner that is consistent with the terms of this Agreement.
2.2. COMPANY shall provide BAXTER with all data and information
reasonably necessary, and known to COMPANY for BAXTER to safely
handle, store and use the Compounds in accordance with all
applicable laws, rules and regulations. COMPANY shall provide BAXTER
with a Material Safety Data Sheet for the Compound prior to delivery
of the Compound. BAXTER understands and agrees that the Compound is
not to be used for testing in or treatment of humans.
2.3. COMPANY shall, at its cost, supply to BAXTER at XXXXXX'x facility in
Round Lake, Illinois an adequate quantity of Compound to enable
BAXTER to carry out XXXXXX'x obligations under the Feasibility
Study, with the Compound to be in the form and in at least the
quantity set forth in Schedule I to this Agreement.
3. USE OF FORMULATED COMPOUNDS BY COMPANY
COMPANY shall use the Formulated Compounds it receives from BAXTER solely
for evaluation purposes ("EVALUATION") and shall not attempt to reverse
engineer, deconstruct, or in any way determine the structure or
composition of the Formulated Compounds, except as authorized in writing
by XXXXXX. COMPANY shall not sell, transfer, disclose, or otherwise
provide access to the Formulated Compounds to any third party without the
prior express written consent of XXXXXX. COMPANY will take all reasonable
steps to ensure that its employees, consultants, contractors and agents
use the Formulated Compounds in a manner consistent with the terms of this
Agreement. COMPANY understands and agrees that the Formulated Compounds
are not to be used for testing in or treatment of humans.
5/5
4. FEASIBILITY STUDY AND PLAN RESULTS
4.1. BAXTER will conduct a feasibility study consisting of the activities
set forth in the Feasibility Study. XXXXXX and COMPANY shall use
reasonable efforts to perform their respective obligations as set
forth in the Feasibility Study, attached hereto as Schedule I. The
Feasibility Study may be amended by mutual written agreement of the
Parties.
4.2. All data, results and other information generated by a Party during
performance of this Agreement (the "STUDY RESULTS") shall be owned
by the Parties in accordance with the provisions of Article 7.
4.3. Neither Party shall publish the Study Results without the express
written consent of the other Party.
4.4. COMPANY acknowledges and agrees that there is no guarantee that
research undertaken pursuant to this Agreement shall result in an
acceptable formulation of Compound.
4.5. If COMPANY desires to enter into an agreement with a third party for
development of Formulated Compounds using [**] (a "Third Party
OFFER"), then COMPANY must give BAXTER written notice and three (3)
months to respond to COMPANY's offer on substantially the same terms
and conditions as those of the Third Party Offer. If BAXTER agrees
to substantially the same terms and conditions of the Third Party
Offer, COMPANY and BAXTER shall enter into an agreement on those
terms and conditions.
5. PAYMENTS
5.1 In consideration for BAXTER undertaking the activities described
under this Agreement and in accordance with the provisions of
Schedule I, COMPANY shall pay to BAXTER the total sum of [**]
Dollars ($[**]), in accordance with the Payment Schedule set forth
in Schedule II. Payments not received within the time noted in the
Payment Schedule shall bear interest at the lesser of (a) the
maximum rate permitted by law, and (b) 1.5% per month on the
outstanding balance compounded monthly. All sums due under this
Agreement shall be paid in U.S. Dollars by check made payable to
`Xxxxxx Healthcare Corporation' or by wire transfer to the account
specified in writing by BAXTER in notice to COMPANY.
5.2 ADDITIONAL WORK. The activities and time frame described in the
Feasibility Study are the basis for payment of the fees set forth in
Article 5.1. Any activities outside the scope of those described in
the Feasibility Study shall be deemed
6/6
"Additional Work". BAXTER will not be required to perform Additional
Work unless and until the Parties reach written agreement on the
scope of Additional Work and the related additional fees.
5.3 PAYMENTS IN THE EVENT OF TERMINATION
5.3.1 Notwithstanding the foregoing, should BAXTER terminate this
Agreement in accordance with the provisions of Article 12.3
("TERMINATION FOR DEFAULT"), or should COMPANY terminate this
Agreement in accordance with Article 12.2 ("TERMINATION FOR
CONVENIENCE"), and XXXXXX'x financial records show that the
total cost of the work performed by BAXTER, including all
internal and external costs and expenses incurred by BAXTER
and any non-cancelable expenses reasonably incurred by BAXTER
prior to termination, exceeds the amount paid by the COMPANY
up to such termination, COMPANY will pay BAXTER, within thirty
(30) days of receiving an invoice therefore, an amount equal
to such uncompensated costs and expenses incurred or committed
but no more than the total amount set forth in Article 5.1, as
amended pursuant to 5.2.
5.3.2 Should COMPANY terminate the Agreement in accordance with
Article 12.3 ("TERMINATION FOR DEFAULT"), and the amount paid
by COMPANY up to such termination exceeds the total cost of
the work performed by BAXTER, including all internal and
external costs and expenses incurred by BAXTER and any
non-cancelable expenses reasonably incurred by BAXTER prior to
termination then BAXTER shall return any such excess remaining
funds to COMPANY within thirty (30) days of receiving an
invoice therefore.
5.3.3 BAXTER agrees to maintain records reasonably reflecting the
costs and expenses incurred or committed by it in conducting
the Feasibility Study hereunder. In the event of termination
of the Agreement for which the provisions of Articles 12.2 and
12.3 apply, COMPANY may review and inspect such records, in a
reasonable manner and at a reasonable time to be agreed upon
by the Parties, solely for the purpose of verifying the
accuracy of costs and expenses claimed by BAXTER.
6. CONFIDENTIAL INFORMATION
The Confidentiality Agreement between XXXXXX and COMPANY dated February
11, 2004 (the "CONFIDENTIALITY AGREEMENT") is incorporated herein by
reference and is made a part hereof as though fully set forth herein.
7/7
7. INTELLECTUAL PROPERTY
NO LICENSE GRANTED
Except as expressly set forth in this Agreement, nothing in this
Agreement, and no course of dealing between the Parties, shall be
construed to constitute the grant of a license, express or implied, to
either party of Intellectual Property Controlled by the other Party.
7.1. OWNERSHIP
7.1.1. For the avoidance of doubt all Background Information and
Background Intellectual Property used in connection with the
Feasibility Study or the Evaluation shall remain the property
of the Party Controlling the same as of the Effective Date.
7.1.2. All Foreground Information and Foreground Intellectual
Property related solely to Xxxxxx'x Background Information or
Xxxxxx'x Background Intellectual Property developed by either
Party or both shall be owned by Baxter ("RESULTING XXXXXX
IP"). All Foreground Information and Foreground Intellectual
Property related solely to the Compound or CTI's Background
Information or CTI's Background Intellectual Property
developed by either Party or both shall be owned by CTI
("RESULTING CTI IP"). All Foreground Information and
Foreground Intellectual Property related solely to [**]")
shall be owned by [**], subject to the license described in
Section 7.1.3.
7.1.3 [**] grants and [**] license [**], subject to Sections 7.1.4
and 7.1.5. In the event the Parties cannot agree to terms
under Section 7.1.4 or Section 7.1.5 as applicable, the above
license [**] the duration of the confidentiality obligations
under the Confidentiality Agreement, [**] shall be under no
obligation [**]. For the avoidance of doubt, [**], and no
license, [**]
7.1.4 If the Formulated Compound is obtained by [**], then the
financial terms and conditions of the license granted in
Section 7.1.3 shall be those disclosed in Schedule III
attached hereto.
7.1.5 If the Formulated Compound is obtained using Xxxxxx'x
patented and/or proprietary technologies, COMPANY and BAXTER
shall negotiate in good faith the amount of the royalty.
7.2. DISCLOSURE OF DEVELOPMENTS
8/8
Each Party shall promptly notify the other Party of any Foreground
Information and/or Foreground Intellectual Property conceived and/or
made in the course of the Feasibility Study.
7.3. PATENT APPLICATIONS
[**] shall be responsible for protecting [**] shall be responsible
for protecting [**] Each Party will assist the other Party in every
proper and reasonable way to obtain, and from time to time enforce,
United States and foreign proprietary rights relating to the other
Party's Foreground Intellectual Property in any and all countries at
the expense of the Party requesting such assistance. To that end,
the Parties agree to execute, verify and deliver such documents and
perform such other acts (including appearances as a witness) as the
other Party may reasonably request for use in applying for,
obtaining, perfecting, evidencing, sustaining and enforcing such
Foreground Intellectual Property rights and the assignment thereof.
In addition, this obligation shall continue beyond the termination
of this Agreement, but the Party requesting assistance shall
compensate the other Party at a reasonable rate, and pay all related
reasonable out-of-pocket expenses, after such termination for the
time actually spent on such assistance. Notwithstanding the
foregoing, in the event [**] does not pursue the filing of, or
continue prosecution or maintenance of, any or all patent
application(s) directed to [**] shall have the right to file,
prosecute and/or maintain such patent applications at [**] expense.
8. INDEPENDENT CONTRACTORS
Nothing in this Agreement shall be construed as creating an association,
partnership, or joint venture between the Parties, it being understood and
agreed that the Parties are independent contractors and that neither shall
have the authority to bind the other in any way.
9. REPRESENTATIONS AND WARRANTIES
9.1. COMPANY represents and warrants that (i) it has the right to give
BAXTER the Materials and any information provided hereunder, and
that BAXTER has the right to use such Materials and information for
and in connection with the Purpose, and (ii) no patents or other
intellectual or proprietary rights of any third parties that relate
solely to the Compound would be violated by BAXTER carrying out the
Purpose.
9.2. Each Party hereby represents and warrants that it has full power and
authority to execute and perform this Agreement.
9/9
9.3. THE REPRESENTATIONS AND WARRANTIES EXPLICITLY SET FORTH IN THIS
AGREEMENT ARE THE PARTIES' ONLY REPRESENTATIONS AND WARRANTIES AND
NO OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED OR
STATUTORY, WILL APPLY. EACH PARTY EXPRESSLY DISCLAIMS ALL OTHER
WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING,
WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. EXCEPT AS SET FORTH IN THIS AGREEMENT, BAXTER
ACKNOWLEDGES AND AGREES THAT THE MATERIALS ARE BEING SUPPLIED TO
BAXTER BY COMPANY WITH NO WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. EXCEPT AS SET FORTH IN THIS AGREEMENT, COMPANY
ACKNOWLEDGES AND AGREES THAT THE FORMULATED COMPOUNDS ARE BEING
SUPPLIED TO COMPANY BY BAXTER WITH NO WARRANTIES OF ANY KIND,
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE.
10. LIABILITY AND INDEMNITIES
10.1. COMPANY shall indemnify, defend and hold harmless BAXTER and its
Affiliates, and any of their respective directors, officers,
employees, subcontractors and agents (collectively the "INDEMNIFIED
PARTIES") from and against any and all liabilities, obligations,
penalties, claims, judgments, demands, actions, disbursements of any
kind and nature, suits, losses, damages, costs and expenses
(including, without limitation, reasonable attorney's fees) arising
out of or in connection with a) any property damage or personal
injury (including without limitation death) of third parties
(collectively "CLAIMS") arising out of or in connection with
COMPANY's negligence or willful misconduct or COMPANY's breach of
this Agreement except to the extent any of the foregoing is caused
solely by the negligence or willful misconduct of BAXTER or solely
by the breach by BAXTER of its obligations under this Agreement; or
b) any claim that the Materials or use of the Materials in carrying
out the Feasibility Study violates the patent, trademark, copyright
or other proprietary rights of any third party.
10.2. BAXTER shall indemnify, defend and hold harmless COMPANY and its
Affiliates and any of their respective directors, officers,
employees, subcontractors and agents from and against any and all a)
Claims resulting solely from XXXXXX'x negligence or willful
misconduct or solely from XXXXXX'x breach of its obligations under
this Agreement; or b) claims that XXXXXX'x
10/10
patented and/or proprietary Formulation Technologies or use of
XXXXXX'x patented and/or proprietary Formulation Technologies in
carrying out the Feasibility Study violates the patent, trademark,
copyright or other proprietary rights of any third party.
10.3. As a condition to a Party's right to receive indemnification under
Article 10.1 or 10.2, a Party shall (i) promptly notify the other
Party as soon as it becomes aware of a claim or action for which
indemnification may be sought pursuant hereto, (ii) cooperate with
the indemnifying Party in the defense of such claim or suit, and
(iii) permit the indemnifying Party to control the defense of such
claim or suit, including without limitation the right to select
defense counsel. In no event, however, may the indemnifying Party
compromise or settle any claim or suit in a manner which admits
fault or negligence on the part of the indemnified Party without the
prior written consent of the indemnified Party. The indemnifying
Party shall have no liability under this Article 10 with respect to
claims or suits settled or compromised without its prior written
consent.
10.4. Except as provided in Article 10.1 or 10.2, in no event shall either
Party be liable to the other Party for lost profits, loss of use,
loss of business, business interruption, loss of data, cost of cover
or any indirect, special, consequential or incidental damages of any
nature whatsoever, however caused and under any theory of liability
whether based in contract, warranty, tort (including without
limitation, negligence), strict liability, statutory or otherwise,
arising out of or in connection with this agreement even if the
other party has been advised of the possibility of such damages.
11. NO OFFER FOR SALE
The provision of the Compound to BAXTER under this Agreement is not an
offer for sale by COMPANY of the Compound or similar products or a
commitment by COMPANY to make the Compound or similar products
commercially available at some future time. XXXXXX'x acceptance of the
Compound from COMPANY under this Agreement does not obligate BAXTER to
purchase or otherwise obtain from COMPANY the Compound should COMPANY make
the Compound commercially available at some future time.
12. DURATION AND TERMINATION
12.1. TERM. This Agreement shall come into force on the Effective Date
and, unless terminated earlier under Articles 12.2 or 12.3 below,
shall remain in effect until the completion of the Period of
Performance, as defined in Article 1.20.
11/11
12.2. TERMINATION FOR CONVENIENCE. COMPANY may terminate this Agreement
upon thirty (30) days' prior written notice to BAXTER.
12.3. TERMINATION FOR DEFAULT. If either Party defaults in the performance
of any material provision of this Agreement and such default is not
cured within thirty (30) days of written notice of such default by
the non-defaulting Party, then the non-defaulting Party shall have
the right to terminate this Agreement immediately upon written
notice to the defaulting Party.
12.4. RETURN OR DESTRUCTION OF THE COMPOUNDS OR FORMULATED COMPOUNDS. Upon
the termination of this Agreement for any reason, each Party shall
promptly cease using the Compound or Formulated Compounds and
further shall, at COMPANY's expense, return or safely destroy any
remaining Compound or Formulated Compounds.
12.5. SURVIVAL OF PROVISIONS. Articles 5, 6, 7, 9, 10, 12.4 and 13 shall
survive the termination of this Agreement for any reason.
13. GENERAL
13.1. PROFESSIONAL STANDARDS. In carrying out its responsibilities under
this Agreement, BAXTER covenants to conduct the Feasibility Study,
maintain records and data, and prepare all reports and results
during and after the term of this Agreement in compliance with all
applicable laws, rules and regulations, including but not limited
to, any applicable requirements of the United States Federal Drug
Enforcement Administration, the Animal Welfare Act, and Good
Laboratory Practices, as promulgated by the Food and Drug
Administration, as applicable, and as may be amended or revised from
time to time.
13.2. COMPLIANCE WITH LAWS AND REGULATIONS. BAXTER agrees that in carrying
out its responsibilities under this Agreement, BAXTER will conduct
the Feasibility Study in compliance with the specifications
described in Schedule I of this Agreement and in accordance with all
applicable laws, rules and regulations relating to the subject
matter of this Agreement.
13.3. AMENDMENTS, ETC. This Agreement may not be released, discharged,
supplemented, interpreted, amended, varied or modified in any manner
except by an instrument in writing signed by a duly authorized
officer or representative of both Parties hereto.
13.4. ASSIGNMENT. Neither Party shall assign any right or obligation under
this Agreement without the other Party's prior written consent.
12/12
13.5. ENTIRE AGREEMENT. This Agreement, including the Confidentiality
Agreement as described in Article 6, the Feasibility Study (Schedule
I) and Schedules II and III hereto, constitutes the entire agreement
between the Parties with regard to its subject matter and supersedes
any and all prior or contemporaneous agreements, written or oral,
between the Parties with respect to the subject matter hereof. In
the event a conflict arises between the terms of the body of this
Agreement (i.e., this Agreement without Schedules I, II and III) and
the terms of any of Schedules I, II and III, the terms of the body
of this Agreement shall control.
13.6. FORCE MAJEURE. Failure of either Party to perform under this
Agreement (except the obligation to make payments) shall not subject
such Party to any liability to the other if such failure is caused
by acts of God, acts of terrorism, fire, explosion, flood, drought,
war, riot, sabotage, embargo, strikes or other labor trouble,
compliance with any order or regulation of any government entity, or
by any cause beyond the reasonable control of the affected Party,
whether or not foreseeable, provided that written notice of such
event is promptly given to the other Party.
13.7. GOVERNING LAW. This Agreement will in all events and for all
purposes be governed by, and construed in accordance with, the laws
of the State of Illinois, without regard to any choice of law
principles that would dictate the application of the law of another
jurisdiction.
13.8. NOTICES. All notices hereunder shall be delivered by facsimile
(confirmed by overnight delivery), or by overnight delivery with a
reputable overnight delivery service, to the following address of
the respective Parties:
13/13
If to COMPANY: Critical Therapeutics, Inc.
00 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to BAXTER: Xxxxxx Healthcare Corporation
Xxx Xxxxxx Xxxxxxx
Xxxxxxxxx, XX 00000-0000
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxxxx Healthcare Corporation
Xxxxx 000 xxx Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000
Attn: General Manager of Global Drug Delivery
Notices shall be effective on the day following the date of
transmission if sent by facsimile, and on the second business day
following the date of delivery to the overnight delivery service if
sent by overnight delivery. A Party may change its address listed
above by notice to the other Party given in accordance with this
Article.
13.9. SEVERABILITY. If any provision of this Agreement is found invalid
or unenforceable for any reason, this Agreement shall be adjusted
rather than voided, if possible, in order to achieve the intent of
the Parties to the extent possible. In such event, all other
provisions of this Agreement shall be deemed valid and enforceable
to the fullest extent possible.
13.10. WAIVER. None of the provisions of this Agreement shall be
considered waived by any Party hereto unless such waiver is agreed
to, in writing, by authorized agents of both Parties. The failure
of a Party to insist upon strict conformance to any of the terms
and conditions hereof, or failure or delay to exercise any rights
provided herein or by law shall not be deemed a waiver of any
rights of any Party hereto.
14/14
13.11. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which, when so executed and delivered, shall be deemed to be an
original, and all of which, taken together, shall constitute one
and the same instrument.
AGREED by the Parties through their authorized signatories on the date set out
at the head of this Agreement:
FOR AND ON BEHALF OF FOR AND ON BEHALF OF
CRITICAL THERAPEUTICS, INC. XXXXXX HEALTHCARE CORPORATION
By: /s/ Xxxxxx Xxxxxxxx By: /s/ Xxxx X. Tune
------------------------ ----------------------
Name: Xxxxxx Xxxxxxxx Name: Xxxx X. Tune
Title: COO Title: VP/GM GDD
Date: June 9, 2004 Date: 6/15/04
15/15
SCHEDULE I
FEASIBILITY STUDY
BAXTER CONFIDENTIAL PAGE 16 OF 24
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS) PAGE 17 OF 24
PROPOSAL FOR INJECTABLE FORMULATION DEVELOPMENT AND
FEASIBILITY TESTING OF THE ANTI-INFLAMMATORY DRUG, ZILEUTON
Xxxxxx Healthcare Corporation
MEDICATION DELIVERY, PHARMACEUTICAL SCIENCES R&D
Xxxxx X. Xxxx, Ph.D.
June 8, 2004
E-mail: xxxxx@xxxxxx.xxx
Phone: 000-000-0000
FAX: 000-000-0000
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS) PAGE 18 OF 24
SUMMARY
Critical Therapeutics Inc. would like to develop a formulation of the
anti-inflammatory agent, zileuton, for intravenous administration. The goal of
this proposed research is to demonstrate [**]. Baxter will supply samples of the
final formulations to Critical Therapeutics for further testing.
Baxter has conducted rigorous theoretical analyses indicating that zileuton
should be challenging to formulate using conventional platforms (solutions,
emulsions, and liposomes, for example). Molecular dynamics predicts that
according to its molecular shape, zileuton is ideally suited for [**] with a
[**]. We propose two formulation tracks -- one to develop a [**] solution for
injection, and the other to formulate zileuton for injection by using [**].
The [**] formulation plan is divided into two stages in which the amount of [**]
required for drug solubilization is first determined, followed by short-term
testing of several candidate formulations for up to [**] under controlled
temperature storage. All formulations will be tested for chemical stability as
the drug is expected to be [**]. Test samples will be sealed in light protective
containers because the drug is known to be light sensitive.
Development of a [**] by application of Xxxxxx'x [**] is also described in this
proposal.
INTRODUCTION
Zileuton ((+/-)-1-(1-benzo[b]thien-2-ylethyl)-l-hydroxyurea, see Figure 1) is an
oral anti-inflammatory agent that is currently marketed by Xxxxxx Laboratories
for treatment of asthma. Critical Therapeutics has acquired the rights to
develop an intravenous form of the drug, and is interested in having Baxter
develop a drug formulation deliverable by IV push. The anticipated adult dose is
[**]
[**]
Figure 1: Chemical Structure of zileuton
Zileuton is a racemic mixture (50:50) of R(+) and S(-) enantiomers. It is a
white, crystalline powder that is soluble in methanol and ethanol, slightly
soluble in acetonitrile, and practically insoluble in water and hexane. The
melting point ranges from 144.2 degrees C to 145.2 degrees C. An oral product
(ZYFLO(R) tablets) is currently marketed in one dosage strength containing 600
mg of zileuton.
[**] and an aqueous solubility of 0.14 mg/mL at 25 degrees C is reported in the
literature.(1)
[**] Xxxxxxx and Xxxxx(2) obtained an estimate of 10.5 using spectrophotometry.
[**] Simulated and actual pH-solubility curves are shown in the Appendix.
------------------
(1)Xxxxxxx, X.X.; Xxxxxx, X.X.; Fort, J.J. Solubility and stability
characterization of zileuton in a ternary solvent system. European Journal of
Pharmaceutical Sciences, 1996, 4:109-116.
(2)Xxxxxxx, X.X.; Xxxxx, X.X. Kinetics and mechanism of degradation of zileuton,
a potent 5-lipoxygenase inhibitor. 1992, 9:1465-1473.
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS) PAGE 19 OF 24
Zileuton is predicted to be [**] The shelf life at [**]
Figure 2: [**]
Figure 3: [**]
Zileuton in solution is light sensitive. [**]
Zileuton [**]
THEORETICAL ANALYSIS
Conventional techniques used to formulate injectable drugs were examined using
theoretical modeling. Results from application of these models to zileuton are
presented below. Several approaches can be eliminated because of solubility,
stability, or toxicological concerns.
Solution formulations
Based on a minimum target drug concentration of [**]
Trivedi and co-workers at Abbott studied, [**]
The third option for preparing a solution is to [**] with a [**] such as [**].
Using a [**], we have estimated [**]. This is consistent with the [**] of
zileuton, which renders it [**] (see Figure 4).
[**]
Figure 4: [**]
We conclude that [**] favorable and therefore solubilization using this
technique is very likely to succeed with the [**]
There are several products on the market that contain [**]. For example, [**]
Emulsions and liposomes
An emulsion is another potential formulation strategy. [**]
Baxter has [**].
Xxxxxx'x [**]
PROPOSED FORMULATION FEASIBILITY STUDIES
This formulation plan centers on two technologies that may be successful. [**]
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS) PAGE 20 OF 24
Formulation is segmented into [**]
In the first stage (see Table 1), [**]
The following stability parameters will be monitored: [**] Tables 2 and 3
present the stability test schedules.
Critical Therapeutics has expressed desire to investigate the impact of [**].
The stability tests and pull points will be based on information provided in
Tables 2 and 3.
Concurrent with the initiation of the chemical stability of solution
formulations of zileuton, the [**]
TABLE 1: [**]
SAMPLE ZILEUTON [**]
[**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
[**] [**] [**] [**]
TABLE 2 - [**]
SAMPLE
ASSAY SET TEST INTERVALS (WEEKS)
[**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**] [**]
[**] [**] [**] [**] [**]
[**]
TABLE 3 - [**]
SAMPLE
ASSAY SET TEST INTERVALS (WEEKS)
[**] [**] [**]
[**] [**] [**] [**] [**]
[**] [**] [**] [**] [**]
[**] [**] [**] [**] [**]
[**] [**] [**] [**] [**]
[**] [**] [**] [**] [**]
[**] [**] [**] [**] [**]
[**] [**] [**] [**]
*Optional interval.
Number of samples = [**]
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS) PAGE 21 OF 24
At the end of Stage [**]. As requested by the Critical Therapeutics, [**]
Requirements may be modified as work progresses and upon further discussions
with Critical Therapeutics.
Note that Baxter cannot guarantee sterility on preclinical test samples.
Table 4 summarizes [**] to Critical Therapeutics.
[**]
Figure 5 displays a typical research plan at Baxter for preliminary development
of [**], Baxter has received from Critical Therapeutics chemical [**]
Baxter will target the concentrations mentioned above or as further
recommended by Critical Therapeutics. [**] Selected formulations having
acceptable [**] and stability will be supplied to Critical Therapeutics for
preliminary assessment.
Table 5 provides [**] Per earlier conversation with Critical Therapeutics, [**]
Baxter has successfully formulated [**] for the Critical Therapeutics compound
zileuton.
It should be noted that the [**] samples for shipment to Critical Therapeutics
will not be sterile.
FIGURE 5: FLOW CHART FOR DETERMINATION OF [**]
[Flow Chart Appears here]
TABLE 4: ACTIVITIES, TIMELINE AND FEE SCHEDULE FOR DEVELOPMENT OF I.V. SOLUTION
FORMULATION OF ZILEUTON USING [**]
ACTIVITIES INTENDED TO BE
CARRIED OUT AT BAXTER DELIVERABLES TIME AND FEE ESTIMATE
------------------------- ------------ ---------------------
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
TABLE 5: ACTIVITIES, TIMELINE AND FEE SCHEDULE FOR DEVELOPMENT OF I.V. [**]
FORMULATION OF ZILEUTON.
ACTIVITIES TO BE CARRIED OUT
AT BAXTER DELIVERABLES TIME AND FEE ESTIMATE
---------------------------- ------------ ---------------------
[**] [**] [**]
[**] [**] [**]
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS) PAGE 22 OF 24
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
[**] [**] [**]
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS) PAGE 23 OF 24
APPENDIX
Estimated Physical Properties of Zileuton
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS) PAGE 24 OF 24
ZILEUTON STABILITY ANALYSIS
Drug: zileuton Date: January 26, 2004
-------------------------
--------------------------------------------------------------------------------
Manufacturer: Xxxxxx Laboratories (originator)
--------------------------------------------------------------------------------
Structure:
[**]
--------------------------------------------------------------------------------
Molecular Wt.: 236.29
--------------------------------------------------------------------------------
Compound 5-lipoxygenase inhibitor
Type:
--------------------------------------------------------------------------------
pKa Values: [**] [**]
10.5, reported in the literature Calculated: [ ]
--------------------------------------------------------------------------------
Log P: [**] [**]
--------------------------------------------------------------------------------
Melting Point: 144.2 - 145.2 degrees C
--------------------------------------------------------------------------------
Intrinsic [**] [**]
Solubility:
--------------------------------------------------------------------------------
Calculated [**]
Log delta G(0)(ergs):
--------------------------------------------------------------------------------
Summary: Zileuton is estimated to be [**]
--------------------------------------------------------------------------------
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS)
pH-SOLUBILITY PROFILE
--------------------------------------------------------------------------------
[**]
--------------------------------------------------------------------------------
[**]
--------------------------------------------------------------------------------
[**]
--------------------------------------------------------------------------------
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS)
SCHEDULE II
PAYMENT SCHEDULE
STUDY STUDY
INITIATION MID-POINT COMPLETION
FORMULATION PAYMENT PAYMENT PAYMENT TOTAL PAYMENT
----------- ---------- --------- ---------- -------------
[**] [**] [**] [**] [**]
[**] [**] [**] [**] [**]
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS)
SCHEDULE III
LICENSE TERMS
IF FORMULATED COMPOUND IS OBTAINED BY [**]
"Licensed Intellectual Property" shall mean the patents, patent applications and
other intellectual property including know-how identified in the License
Agreement.
"Licensed Formulated Compound" shall mean a product containing Zileuton whose
manufacture, use or sale is covered by the Licensed Intellectual Property.
Grant: Subject to the payment of royalties, BAXTER grants to COMPANY a sole and
exclusive worldwide license to make, have made, use, import, sell and have sold
Licensed Formulated Compounds. This license shall not include the right of
COMPANY to grant sublicenses, or to amend any such sublicenses, without the
prior written consent of BAXTER, which consent shall not be unreasonably
withheld. Except as expressly set forth in the License Agreement, nothing in the
Agreement and no course of dealing between BAXTER and the COMPANY shall be
construed to constitute the grant of a license, express or implied, of any
intellectual property other than the Licensed Intellectual Property.
Term: The Term of the License Agreement shall run until the later of (i) ten
years from the License Agreement Effective Date or (ii) expiration of the last
to expire of any patents included in the Licensed Intellectual Property on a
country-by-country basis, unless earlier terminated in accordance with the
Termination provisions.
Termination: If either party fails to perform its obligations under the License
Agreement, the other party shall have the right to give written notice of
default to the defaulting party, and if the default is not cured within thirty
(30) days after such notice, then this License Agreement may, at the option of
the party giving the notice, be terminated within thirty (30) days thereafter by
giving written notice to that effect to the defaulting party. In addition,
either party may terminate the License Agreement without notice, effective
immediately, upon the occurrence of any of the following events: the other party
becomes insolvent or bankrupt; or makes an assignment for the benefit of
creditors; or consents to the appointment of a trustee or receiver; or a trustee
or receiver is appointed for the other party or for a substantial part of the
other party's property without its consent; or bankruptcy, insolvency or
reorganization proceedings are instituted by or against the other party.
Royalty: In consideration of the rights granted by BAXTER to COMPANY under the
License Agreement, COMPANY shall pay to BAXTER an earned royalty of [**] percent
([**]%) of Net Sales of Licensed Formulated Compound. In the event that XXXXXX
and COMPANY enter into a manufacturing agreement, as provided in Sections
7.1.2.1 and 4.5 of the Feasibility Study Agreement, the earned royalty that
COMPANY shall pay to BAXTER for Licensed Formulated Compounds manufactured by
BAXTER for COMPANY shall be [**] percent ([**]%) of Net Sales. In the event that
COMPANY must pay to [**] a royalty of [**] percent ([**]%) of Net Sales of
Formulated Compound to license [**] intellectual property rights to [**], then
the royalties payable by COMPANY to BAXTER under the License Agreement shall be
[**] percent [**]%; provided, however, that in no event shall the royalty
payable to BAXTER be [**] percent ([**]%) [**] set forth in the License
Agreement. The following table illustrates the
Baxter Confidential
FEASIBILITY PROPOSAL FOR ZILEUTON (CRITICAL THERAPEUTICS)
applicable royalties (as a percentage of Net Sales of Formulated Compounds)
depending upon the amount of royalty, if any, that COMPANY must pay to [**]:
Baxter Royalty Baxter Royalty
[**] Royalty without manufacturing with manufacturing
[**]% [**]% [**]%
[**]% [**]% [**]%
[**]% [**]% [**]%
[**]% [**]% [**]%
[**]% [**]% [**]%
[**]% [**]% [**]%
Reports and Payments: Within thirty (30) days of the end of each calendar
quarter during which there have been sales of the Licensed Formulated Compound,
COMPANY shall provide BAXTER a report of Net Sales of Licensed Formulated
Compound and shall remit to BAXTER all royalties due. Royalties not received
within the required timeframe shall bear interest. COMPANY shall keep detailed
records of all sales of Licensed Formulated Compounds. Once per calendar year,
BAXTER shall be permitted to audit COMPANY's books for Licensed Formulated
Compound sales.
Final Agreement: The parties will negotiate a mutually acceptable License
Agreement that incorporates these terms and other terms consistent with the
terms of the Feasibility Study Agreement and typical for license agreements.
Baxter Confidential
