EXHIBIT 10.12
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN
PORTIONS OF THIS DOCUMENT. SUCH PORTIONS HAVE BEEN
REDACTED AND MARKED WITH ASTERISKS (**). THE NON-
REDACTED VERSION OF THIS DOCUMENT HAS BEEN SENT TO
THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
AN APPLICATION FOR CONFIDENTIAL TREATMENT.
DEVELOPMENT AND SUPPLY AGREEMENT (PRAECIS-149)
BETWEEN UCB-BIOPRODUCTS S.A., with registered office at Xxxxxx Xxxxxx
000, X-0000 Xxxxxxxx, Belguim, (Facsimile No. 32.2/386.29.90)
("UCB")
on the one hand,
AND PRAECIS PHARMACEUTICALS INCORPORATED with its
principal office at Xxx Xxxxxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxxxx, 00000, XXX (Facsimile No. 617/494.8414)
("PRAECIS")
on the other hand,
WHEREAS, PRAECIS holds exclusive worldwide rights, as licensee, to a compound
identified as "PPI-149", USAN name "Abarelix" (the "Product"), and is interested
in development and marketing on a worldwide basis pharmaceutical compositions
containing the Product for the treatment of prostate cancer and other diseases
as used by the end user (the "Finished Product"); and
WHEREAS, UCB has suitable premises, equipment and expertise in the development
and production of pharmaceutical grade bulk peptides; and
WHEREAS, PRAECIS wishes UCB, as a preferred supplier, to produce and supply it
with quantities of the Product for development and commercial purposes, upon the
terms and subject to the conditions set forth in this Agreement; and
WHEREAS, UCB is willing to manufacture and supply Product upon the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING, AND THE REPRESENTATIONS,
WARRANTIES, COVENANTS AND AGREEMENTS CONTAINED HEREIN, THE PARTIES AGREE AS
FOLLOWS:
SECTION 1 - DEFINITIONS
When used herein, the following terms, used with initial capital letters, shall
have the following respective meanings and the singular shall include the plural
and vice-versa:
1.1 "Affiliates" shall mean with respect to either party, any person,
corporation, company, partnership, joint venture or other entity
controlling, controlled by or under common control with such party. For
such purpose the term "control" means the holding of 50% or more of the
common voting stock or ordinary shares in, or the right to appoint 50% or
more of the directors of, or the right to share in 50% or more of the
profits of, the said corporation, company, partnership, joint venture, or
entity.
1.2 "Confidential Information" shall mean any UCB or PRAECIS trade secret or
other information of a confidential and/or proprietary nature which is
disclosed by one party ("Disclosing Party") to the other party ("Receiving
Party"), excluding such trade secret or other information which (i) is
published or otherwise becomes a matter of public knowledge by any means
other than through the breach of this Agreement by the Receiving Party,
(ii) was known by the Receiving Party at the time of such disclosure, as
evidenced by the Receiving Party's written records predating such
disclosure and maintained in the ordinary course of business, or (iii) was
disclosed to the Receiving Party by any Third Party (as defined below) who
has the right to disclose the same. For the purposes of this Section 1.2,
information shall not be deemed to be public knowledge or known to PRAECIS
solely because: (i) the general principal is public knowledge or known to
PRAECIS, if the particular practice is not itself public knowledge or so
known, or (ii) it constitutes a combination of information which is public
knowledge or known to PRAECIS unless the combination itself and the
principle and mode of operation of such combination is also public
knowledge or known to PRAECIS.
1.3 "Development Period" shall mean the period of time from the Effective Date
until Launch Date (as defined below).
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1.4 "Development Plan" shall have the meaning set forth in Section 2.1 of this
Agreement.
1.5 "Effective Date" shall mean the date on which this Agreement is signed by
the latter of the parties to sign this Agreement.
1.6 "Finished Product" shall have the meaning set forth in the preamble to
this Agreement.
1.7 "Forecast" shall have the meaning set forth in Section 4.2.
1.8 "Initial Product Orders" shall have the meaning set forth in Section 4.3.
1.9 "Launch Date" shall mean the first date that the Finished Product is sold
commercially by PRAECIS, its Affiliates, Partners, licensee(s),
sublicensee(s) or distributors to a wholesaler or end user.
1.10 "LHRH Antagonist" shall mean any compound which exhibits Lutenizing
Hormone Releasing Hormone (LHRH) antagonist activity.
1.11 "Manufacturing Standards" shall have the meaning set forth in Section 3.2
of this Agreement.
1.12 "Net Sales" shall mean with respect to all Finished Product sold by
PRAECIS, any PARTNER, and their respective Affiliates, licensee(s),
sublicensee(s) or distributors, the total gross invoices for such Finished
Product less (i) quantity and/or cash discounts actually allowed and
taken, (ii) customs duties and sales and income taxes, if any, related to
the sale of the Finished Product, and (iii) amounts allowed by reason of
rejections and return of goods.
1.13 "Partner" shall mean ROCHE PRODUCTS INC. and SYNTHELABO, and their
respective Affiliates, as long as their respective Agreements dated May
13, 1997 and August 21, 1997 (or in the case of the August 21st Agreement,
the definitive agreement to be entered into upon the exercise of the
option provided for in such August 21st Agreement), respectively, with
PRAECIS remain in force.
1.14 "Product" shall have the meaning set forth in the preambles to this
Agreement.
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1.15 "Specifications" shall have the meaning set forth in Section 2.1.
1.16 "Supplied Entities" shall have the meaning set forth in Section 3.1.
1.17 "Third Party" shall mean any natural person, corporation, firm, trust,
joint venture, company, partnership or other business organization which
is not a party hereto or an Affiliate of any party hereto.
1.18 "UCB Manufacturing Capacity" shall mean the aggregate amount of Product
which UCB and its Affiliates can manufacture over the applicable time
period.
1.19 "UCB Technical Information" shall mean any and all know-how, trade
secrets, formulations, process, vendor or supplies information, raw
material, peptide or intermediate specifications, methods and the like,
whether or not patented or patentable, including without limitation,
pre-clinical, pharmacological, toxicological, chemical, physical and
analytical, safety, quality control or other proprietary data and
information relating to the development, testing, use, manufacture or
marketing of peptides (including the Product) which UCB or any of its
Affiliates has now (which is fully set forth in Annex F, with respect to
UCB strategy of synthesis and purification) or may conceive, develop,
acquire or have the ability to license or sublicensee (under licenses from
others or otherwise) during the term of or in the performance of this
Agreement, provided that any of the foregoing (including that set forth in
Annex F) which would otherwise constitute UCB Technical Information (i)
shall not be deemed to be UCB Technical Information unless it constitutes
Confidential Information and (ii) shall not be deemed to be UCB Technical
Information, but information owned jointly, to the extent it was jointly
conceived, discovered or developed by PRAECIS or its Affiliates and UCB or
its Affiliates.
SECTION 2 - DEVELOPMENT OF THE PROCESS, SPECIFICATIONS
2.1 Development Plan. UCB, in liaison with PRAECIS, shall develop a method of
assembly, synthesis and purification of the Product, using specifications
of the Product established by PRAECIS which, upon PRAECIS' approval, will
be the contractual specifications hereunder and will be attached hereto as
Annex A to this Agreement (the "Specifications"), prepare the drug master
file ("DMF"), develop the analytical procedures and supply stability
batches and validation batches, all in accordance with the plan to be
agreed upon by the parties, as amended from time to time in accordance
with the terms hereof
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(the "Development Plan"), and the other terms and conditions of this
Agreement. An outline of the Development Plan is attached hereto as Annex
B. Alternatively, at the request of PRAECIS, in lieu of submission of a
DMF, the information and data which would be contained therein will be
included in the Chemistry Manufacturing and Controls section of the
applicable regulatory submission. The Development Plan may be amended or
updated from time to time by written agreement of the parties, as
development proceeds and results are obtained. In the Development Period,
it is understood that Specifications are tentative; therefore PRAECIS may
propose changes to the Specifications, including as required by a
regulatory agency, it being understood that if any such changes would
cause an increase in UCB manufacturing costs, acceptance of the new
Specifications by UCB shall be conditional on a mutually agreeable
revision of the prices at which Product is delivered hereunder based on
such increased costs, and if applicable, taking into account any material
change in percentage margin. UCB may also request changes to the
Specifications, which may be implemented upon approval by PRAECIS.
PRAECIS, any Partners, and their respective Affiliates, shall have the
right to review any manufacturing and regulatory documents, under secrecy
obligation.
2.2 Reports. UCB shall issue PRAECIS written development reports on a mutually
agreed upon schedule during the Development Period. Such development
reports shall describe the work performed during the period concerned in
connection with the Development Plan. The parties shall each designate
responsible members of their respective organizations to meet at least
quarterly to discuss the progress of the foregoing work.
SECTION 3 - SUPPLY OF THE PRODUCT
3.1 Product Requirements. Subject to the terms and conditions of this
Agreement (i) UCB shall manufacture and supply to PRAECIS, and PRAECIS
shall purchase from UCB, the full amount of Product ordered by PRAECIS
pursuant to the Initial Product Orders, provided that if PRAECIS, the
Partners and the respective Affiliates, licensee(s) and sublicensee(s)
of PRAECIS, the Partners and such Affiliates (collectively, the
"Supplied Entities"), have requirements for Product during the
Development Period in addition to the
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quantities supplied and purchased pursuant to the Initial Product Orders,
then (A) UCB shall manufacture and supply to PRAECIS all of such
requirements up to ***% of the then current UCB Manufacturing Capacity and
(B) PRAECIS shall purchase from UCB at least ***% of such requirements for
Product and (ii) after the Development Period until the expiration or
termination of this Agreement, with respect to the Supplied Entities'
total requirements for Product in addition to the quantities supplied and
purchased pursuant to clause (i) above, UCB shall manufacture and supply
to PRAECIS, and PRAECIS shall purchase from UCB, the lesser of (A) such
applicable percentage of such requirements for Product of the Supplied
Entities as set forth in Annex G (which percentage for any twelve-month
period after the Launch Date may be increased up to *** by notice to such
effect from PRAECIS to UCB given at least twelve (12) months prior to the
time such increased percentage takes effect), or (B) up to *** (***%) of
the then current UCB Manufacturing Capacity; provided however that such
obligation to supply by UCB and to purchase by PRAECIS shall be without
prejudice to PRAECIS' right to make quantities of Product itself or to
purchase quantities of Product from either the Partners or any Affiliate
thereof or an alternative Third Party manufacturer/supplier (i) to the
extent UCB fails or is unwilling (A) to meet PRAECIS' specific or excess
requirements for Product, as provided under Sections 3.2 and 4.2
respectively, or (B) to fulfill its obligations to supply, as provided
under Section 4.6, (ii) to the extent such quantities of Product exceed
the quantities of Product required by this Section 3.1 to be purchased
from UCB, or (iii) in the event that at any time after the Development
Period a Third Party manufacturer/supplier is able to provide a ***% or
greater discount from the per unit amount then being charged by UCB
hereunder for similarly qualified materials and the Third Party
manufacturer/supplier is willing to enter into a supply contract of at
least two years at such a ***% or greater discount.
3.2 Compliance with Specifications and Manufacturing Standards. UCB shall
manufacture Product for approval and ongoing product supply hereunder in
accordance with the Specifications, under current Good Manufacturing
Practices ("cGMP") as applicable in the European Union, USA and Japan
(collectively, the "Manufacturing Standards").
In the event any regulatory authority in any country requires cGMP
deviating from the Manufacturing Standards or the Specifications, PRAECIS
and UCB shall discuss and reach agreement with respect to such modified
cGMP or such modified Specification. If such conformance of the Product to
such modified cGMP or such modified Specification would cause UCB
substantial
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costs, UCB will so notify PRAECIS and the parties will negotiate in good
faith the possible adaptation/expansion of the UCB Manufacturing Capacity
and the costs thereof. If UCB determines in good faith that it is
commercially impracticable to adapt/expand the UCB Manufacturing Capacity
as required to meet such modified cGMP or such modified Specifications,
PRAECIS shall be free to have the excess demand satisfied by itself or by
a Third Party supplier/manufacturer and PRAECIS shall be permitted to
grant sublicenses under the UCB Technical Information for this sole
purpose, to the extent provided in Section 7. UCB and PRAECIS will
establish an effective cGMP change control system, and UCB will not make
any material change in the manufacturing process without PRAECIS' prior
written consent.
UCB shall also be responsible for adherence to appropriate health
standards for its employees and furthermore will operate under guidelines
provided by PPI's MSDS, which shall be updated from time to time (such
guidelines in effect on the date hereof are given in Annex H).
3.3 Certificate of Analysis. UCB shall include, with each shipment of Product
hereunder, a certificate of analysis certifying that such shipment meets
the Specifications and was manufactured in compliance with the
Manufacturing Standards. PRAECIS, the Partners, and the respective
Affiliates of PRAECIS and the Partners, shall have the opportunity to
review at UCB's premises all batch records, in process batch data, and
other appropriate documents associated with manufacture.
3.4 Audit. In order to ascertain compliance by PRAECIS with the purchase
obligation set forth in Section 3.1, PRAECIS shall, within sixty (60) days
after the end of each calendar year during the period of time in which UCB
supplies PRAECIS with Product under this Agreement, provide written
reports to UCB specifying the amount of Product manufactured by PRAECIS
and purchased by PRAECIS from suppliers other than UCB during the prior
calendar year. If UCB does not object to such written reports within sixty
(60) days, then UCB shall waive the right to audit PRAECIS' books and
records relating to the information contained in such reports. However, if
in a subsequent year it is determined in accordance with the provisions of
this Section 3.4 that PRAECIS breached its purchase obligation set forth
in Section 3.1, then UCB shall have the right to audit PRAECIS' books and
records relating to the information contained in such reports for the
previous three (3) years. If UCB timely notifies PRAECIS of its intention
to audit PRAECIS's books and records, UCB may designate an auditor
reasonably acceptable to PRAECIS. PRAECIS shall make available to such
auditor such
7
books and records as may be required to audit such information and such
books and records shall be deemed Confidential Information for purposes of
Section 8. Such audit shall be completed within ninety (90) days after the
date on which UCB notified PRAECIS that it desired to audit such
information. UCB shall promptly deliver a copy of the report of such audit
to PRAECIS. If PRAECIS disagrees with the conclusions of such report, it
shall notify UCB and the parties shall attempt to resolve the
disagreement. If the parties fail to agree on the conclusions in the
report, such disagreement shall be resolved in accordance with Section 15.
Each such audit shall be at UCB's expense; provided, that if it is finally
determined that in any calendar year PRAECIS violated its purchase
obligation set forth in Section 3.1, then PRAECIS shall pay the costs of
such audit and PRAECIS shall compensate for or purchase an additional
quantity of Product from UCB in an amount which, if it had been purchased
in the prior calendar year, would have resulted in PRAECIS' compliance
with such obligation.
3.5 Inspection. In order to ascertain compliance by UCB with the quality
requirements provided in Section 3.2, PRAECIS, the Partners, and the
respective Affiliates of PRAECIS and the Partners, shall have the right,
during regular business hours and on reasonable prior notice to UCB, to
inspect and take samples from such facilities at which UCB manufactures,
tests, sources and/or stores raw materials or Product. UCB shall use its
best efforts to enable PRAECIS and its Affiliates to inspect and sample
raw materials from all UCB suppliers. Such inspections and sampling shall,
to the extent reasonably practicable, be conducted in a manner which does
not interrupt or impair in any significant manner the manufacturing
operations of such facilities.
3.6 Inventory Management. The parties will meet periodically to discuss
inventory management and address efficiencies with respect thereto.
3.7 Non-Competition. Neither UCB nor any of its Affiliates shall, during the
term of this Agreement and, unless this Agreement is terminated by UCB
pursuant to and in accordance with Section 10.2, for a period of
twenty-four (24) months thereafter (except that such period shall be ten
(10) years with respect to any generic version of the Product), directly
or indirectly engage in development activities with respect to, or
produce, any LHRH Antagonist other than, during the term of this
Agreement, Product; provided that this
8
Section 3.7 shall not apply after the applicable date set forth on Annex D
if PRAECIS has not, by, or within 30 days after, such date, submitted the
Initial Product Order(s) in substantially at least the amount set forth on
Annex D with respect to such date; and provided further that in any event
this Section 3.7 shall again apply in accordance with its terms from and
after the Launch Date as long as PRAECIS or the Supplied Entities orders
at least 35 kg of Product per year; it being understood and agreed that
this Section 3.7 shall apply in accordance with its terms after
termination of this Agreement (without any minimum purchase requirement)
if this Section 3.7 was applicable at the time of such termination.
SECTION 4 - FORECASTS AND ORDERS FOR THE PRODUCT
4.1 Five-year plan. During the term of this Agreement, PRAECIS shall provide
UCB with a non-binding 5-year plan of Product needs, which plan shall,
during the term of this Agreement, be updated annually before year-end,
for planning purposes. The first plan covering the years 1998 up to 2002
is attached hereto as Annex C.
4.2 Forecasts. Beginning as of the date the first *** of Product have been
ordered, and each calendar quarter thereafter so long this Agreement shall
remain in effect, PRAECIS shall provide UCB at least *** in advance of the
relevant *** period with a forecast (each, a "Forecast") specifying
PRAECIS' requirements for Product in respect of each of the *** during the
*** period covered by such Forecast (each such *** period being referred
to as a "Forecast Period"). The delivery by PRAECIS of each Forecast as
required by this Section 4.2 shall constitute PRAECIS' irrevocable
agreement to order and purchase from UCB during such Forecast Period in
accordance with this Agreement (i) at least *** (***%) of the quantity of
Product specified in such Forecast in respect of the *** of such Forecast
Period and (ii) at least *** of the quantity of Product specified in such
Forecast in respect of the *** of such Forecast Period, provided that such
quantities do not exceed the UCB Manufacturing Capacity for such ***. UCB
shall supply the Product so ordered, provided, however, that UCB shall not
be obligated (but shall use its diligent efforts) to supply Product
ordered during a *** to the extent the quantities of Product so ordered
exceed *** (***%) of the quantities of Product in respect of such ***
specified in the Forecast delivered *** prior to such ***, nor to supply
quantities of Product in excess of the then current UCB Manufacturing
Capacity.
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It is expressly understood and agreed that if the quantities of Product
specified in a Forecast exceed the UCB Manufacturing Capacity, the
delivery of such Forecast shall not constitute PRAECIS' irrevocable
agreement to order and purchase that quantity of Product which exceeds the
UCB Manufacturing Capacity. If UCB notifies PRAECIS that the quantities of
Product specified in a Forecast exceed the UCB Manufacturing Capacity, the
parties will negotiate in good faith the possible expansion of the UCB
Manufacturing Capacity and the estimated costs thereof. If UCB or PRAECIS
determines that it is commercially impracticable to expand the UCB
Manufacturing Capacity to supply the quantities of Product specified in a
Forecast which exceed the then current UCB Manufacturing Capacity, PRAECIS
shall be free to have such excess quantities of Product manufactured
and/or supplied by itself or by a Third Party supplier/manufacturer and
PRAECIS shall be permitted to sublicense under the UCB Technical
information to the extent set forth in Section 7.
4.3 Timing of Product Orders and Product Delivery. Subject to Section 4.2, UCB
will deliver Product ordered by PRAECIS hereunder pursuant to a firm
purchase order on or before the delivery date set forth in such purchase
order, provided that, except as set forth in the next succeeding sentence,
such purchase order is submitted at least *** (***) days prior to such
requested delivery date for orders placed on or prior to the date which is
two (2) years after the Launch Date, and at least *** (***) days prior to
such requested delivery date for orders placed thereafter. UCB agrees that
with respect to each order for Product listed on Annex D hereto
(collectively, the "Initial Product Orders"), if PRAECIS places (and makes
the prepayment with respect to) such Initial Product Order by the date
specified in Annex D, UCB will deliver to PRAECIS the quantity of Product
reflected in each such Initial Product Order on or before the applicable
Delivery Date therefor set forth on such Annex D.
At UCB's request, PRAECIS shall use commercially reasonable efforts to
reschedule its purchase orders in order to spread the supply more evenly
over the quarter concerned to reflect UCB's production rate, provided that
for this purpose reasonable efforts shall not require PRAECIS to incur
additional costs or to risk breach of any agreement between PRAECIS or any
of its Affiliates and any Third Party.
4.4 UCB Manufacturing Capacity
(a) UCB covenants and agrees with PRAECIS that (i) if PRAECIS places (and
makes the prepayment with respect to) the first Initial Purchase Order
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(for *** of Product) on or before the date specified in Annex D, then on
or before the last delivery date with respect to such Initial Purchase
Order as set forth on Annex D, the UCB Manufacturing Capacity will be at
least *** of Product per six-month period, (ii) if PRAECIS places (and
makes the prepayment with respect to) the third Initial Purchase Order
(for *** of Product) on or before the date specified in Annex D, then on
or before the last delivery date with respect to such Initial Purchase
Order as set forth on Annex D, the UCB Manufacturing Capacity will be at
least *** of Product per six-month period.
(b) After the first *** of Product have been ordered, UCB will maintain
for *** a minimum annual UCB Manufacturing Capacity equal to the greater
of (i) ***/year and (ii) the amount of Product supplied by UCB in the
immediately preceding year. After such ***, UCB will maintain a minimum
annual UCB Manufacturing Capacity equal to the amount of Product supplied
by UCB in the immediately preceding year; provided that in any *** period
after the first *** have been ordered, if PRAECIS orders an amount of
Product equal to at least the UCB Manufacturing Capacity as of the
commencement of such *** period, the minimum annual UCB Manufacturing
Capacity for the following *** will be at least such UCB Manufacturing
Capacity as of the commencement of such *** period.
4.5 Product Delivery. Product ordered hereunder shall be delivered by UCB
FOB, Belgium, express courier selected by PRAECIS (ICC Incoterms 1990).
4.6 Inability or failure to supply. In the event UCB is unable to supply
Product in accordance with the terms hereof, UCB shall promptly notify
PRAECIS in writing of such inability, which notice shall include a
reasonably detailed explanation of the reasons for such inability (a "UCB
Product Supply Deficiency Notice"). Upon PRAECIS' receipt of a Product
Supply Deficiency Notice, or upon any material failure by UCB to meet its
supply obligations hereunder and UCB's receipt from PRAECIS of a notice
reasonably describing such material failure by UCB (a "PRAECIS Default
Notice"), if UCB's inability or material failure to supply Product in
accordance with the terms hereof is reasonably likely to continue for at
least ninety (90) days (or such shorter period not shorter than thirty
(30) days if such inability or failure would materially jeopardize
PRAECIS' commercial relationships with respect to Product or Finished
Product, or would present PRAECIS with a significant risk of contractual
damages to Third Parties), PRAECIS shall have the right to sublicense one
or more other suppliers under the UCB Technical Information to the extent
provided in Section 7, and in such event UCB shall
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promptly provide to such other supplier(s) such technical information
(including without limitation UCB Technical Information) as may be
necessary for such supplier(s) to qualify with relevant regulatory
authorities. Except in the case of force majeure, in which case the
provisions of Section 14 shall apply, UCB shall be liable to PRAECIS for
all costs and expenses incurred by PRAECIS in connection with qualifying
one or more alternative suppliers of Product with the relevant regulatory
authorities (such costs and expenses will not be considered as
consequential losses as defined in Section 9.6), including any advance
payments (other than those described on Annex D except to the extent set
forth below) made in respect of the quantities of Product not so supplied;
provided however that (i) PRAECIS shall act in a commercially reasonable
manner with respect to obtaining an alternative supply of Product as
contemplated above, and (ii) UCB shall not be required to reimburse
PRAECIS for any advance payment described in Annex D unless (A) UCB shall
have failed to apply such advance payments (or part thereof) to the
purchase or construction of such plant and equipment as is reasonably
intended to enable it to meet its supply obligations hereunder or shall
have so applied such advance payments but shall have failed to utilize
such plant and equipment for such purpose or (B) UCB's inability or
failure to supply constitutes an intentional breach of this Agreement or
arises from UCB's gross negligence or willful misconduct. If within ninety
(90) days (extended to one hundred and eighty (180) days during the
Development Period) after PRAECIS' receipt of a UCB Product Supply
Deficiency Notice or PRAECIS' delivery to UCB of a PRAECIS Default Notice,
as applicable, UCB provides PRAECIS with evidence reasonably satisfactory
to PRAECIS that UCB is able to and will meet its supply obligations
hereunder ("Cure Evidence"), then, unless this Agreement has been
terminated in accordance with Section 10, within sixty (60) days of
receiving such Cure Evidence PRAECIS shall resume purchasing Product from
UCB in accordance with the terms of this Agreement (subject to again
ceasing such purchasing as contemplated by this Section 4.6), provided
that PRAECIS shall be allowed to fulfill any outstanding obligations to
other suppliers that were incurred by PRAECIS due to UCB's failure or
inability to supply Product to PRAECIS.
SECTION 5 - QUALITY AND DEFICIENCY CLAIMS
5.1 Limited warranty - Inspection and claim. UCB's only warranty, with respect
to the Product, is that the Product will conform to the Specifications and
will be manufactured in accordance with the Manufacturing Standards.
Without express or implied, is expressly excluded. PRAECIS shall be
responsible for performing all necessary inspections to detect obvious
damage (shortages,
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breakage, damage, etc.) and non-conformity of Product to Specifications,
within sixty (60) days of receipt of Product. PRAECIS shall notify UCB in
writing of any defective shipment and shall set forth the lot, date of
delivery and date of the failure. At PRAECIS' option, UCB shall promptly
replace, or reimburse or give credit with respect to any payment for, any
defective shipment. Unless such notification is timely provided, subject
to and without limitation of Section 5.2(b), the Product shall be deemed
to be delivered and accepted by PRAECIS. PRAECIS shall hold any allegedly
defective shipment of Product for inspection by UCB or, at UCB's request
and expense, shall return such shipment or part thereof to UCB.
5.2 Remedy. (a) In the event that it is determined in accordance with this
Section 5.2 that all or any portion of a shipment of Product does not meet
the Specifications or was not manufactured in accordance with the
Manufacturing Standards, UCB, at PRAECIS' option but after consultation of
UCB, shall either replace or rework such rejected shipment or portion
thereof or reimburse or give credit for such payment to PRAECIS, and,
without limitation of Section 4.6, UCB shall have no other liability to
PRAECIS therefor except as provided in Section 4.5. In the event that the
parties disagree over whether a shipment of Product fails to comply with
the Specifications or was not manufactured in accordance with the
Manufacturing Standards, the parties shall make every attempt to resolve
the disagreement first between themselves and, failing that, by referring
the matter to a mutually-agreeable Third Party specializing in the
analysis of such products. If these methods fail to resolve the
disagreement, the matter shall be resolved pursuant to Section 15. UCB and
PRAECIS shall develop a qualified rework procedure. At PRAECIS' request,
unsatisfactory material shall be reworked at UCB's expense.
(b) Hidden defects not revealed by the inspections specified under Section
5.1 shall be brought to UCB's attention promptly upon discovery. In such
event, the parties shall in good faith discuss and agree upon procedures
and business terms for addressing such defects to the reasonable
satisfaction of PRAECIS and UCB.
SECTION 6 - PRICE AND PAYMENT TERMS
6.1 Prices. Product supplied pursuant to the Initial Purchase Orders will be
supplied at the prices, which shall not exceed *** peptide weight with
respect to each Initial Purchase Order (subject to PRAECIS having placed
such Initial Purchase Order for an amount of Product and substantially by
the dates
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set out in Annex D). All other Product quantities will be supplied at the
prices (expressed *** peptide weight) and/or according to the price
formula/system out in Annex E hereto.
All prices referred to in Annexes D and E are exclusive of any taxes and
duties, such as sales, export, import, value added tax, excise duty, which
shall be added to such prices as appropriate.
6.2 Payment terms. Payment of the price for Product shall be in USD net thirty
(30) days from invoice and shipment. Any amount not received at its due
date shall automatically and without further notice bear an interest on
overdue payment at the rate of three percent (3%) above LIBOR (3 months)
as in effect on the date such payment was due.
6.3 Exchange rate fluctuations. The prices set out in Section 6.1 shall be
adjusted each calendar quarter to reflect exchange rate fluctuations, as
follows.
In the event at the date for such an adjustment the average of the
exchange rate of US Dollars into Belgian francs (BEF), as reported in the
Wall Street Journal (Eastern Edition), for the 10 business day period
immediately preceding that date varies by more than ten (10) percent
compared to 37.79 USD (which is the rate of exchange as applicable at the
day of signature of this Agreement) or the date of the last price
adjustment, then the purchase prices set out in Section 6.1, as theretofor
adjusted, shall be adjusted to reflect 50% of such change.
SECTION 7 - INTELLECTUAL PROPERTY RIGHTS
7.1 No Intellectual Property Rights in the Product. UCB expressly acknowledges
that it has no ownership or intellectual property rights of any kind in or
to the Product, by virtue of this Agreement or otherwise, and will not
acquire any such rights as a result of its or PRAECIS' performance of
their respective obligations hereunder.
7.2 UCB License Grant During Term of Agreement. (a) During the term of this
Agreement and subject to its terms, UCB hereby grants to PRAECIS and its
Affiliates an exclusive worldwide royalty-free right and license, with the
right to grant sublicenses, under the UCB Technical Information (i) to use
or incorporate quantities of Product supplied by UCB in connection with
the manufacture, use or sale of the Finished Product and (ii) to make or
have
14
made quantities of Product for incorporation in the Finished Product in an
amount up to 100% of the worldwide requirements of the Supplied Entities
in the case of UCB's unwillingness or inability (A) to meet PRAECIS'
specific or excess requirements for Product as provided under Section 3.2
and 4.2 or (B) to fulfill its obligations to supply, as provided under
Section 4.6, and to use or incorporate Product so made in connection with
the manufacture, use or sale of Finished Product.
(b) During the term of this Agreement and subject to its terms, UCB hereby
grants to PRAECIS and its Affiliates an exclusive worldwide right and
license, with the right to grant sublicenses, under the UCB Technical
Information, (i) to make or have made quantities of Product which exceed
the requirements reserved to UCB as provided in Section 3.1 and Annex G
and (ii) to use or incorporate quantities of Product made and supplied by
PRAECIS, its Affiliates or any Third Party, as contemplated by clause (i)
of this subparagraph (b) in connection with the manufacture, use or sale
of Finished Product.
7.3 UCB License Grant Upon Termination of Agreement. Upon termination of this
Agreement (other than a termination by UCB pursuant to and in accordance
with Section 10.2 or a termination by UCB or PRAECIS pursuant to Section
10.3, in which event no license, and thus no ability to grant sublicenses,
shall be granted by UCB to PRAECIS upon such termination), UCB shall, and
hereby does, grant to PRAECIS and its Affiliates an exclusive perpetual
worldwide right and license, with the right to grant sublicenses, under
the UCB Technical Information, to make or have made quantities of Product
for incorporation in the Finished Product, and to use or incorporate
Product so made in connection with the manufacture, use or sale of
Finished Product.
7.4 Royalties in Respect of Licenses and Sublicenses. The license granted to
PRAECIS and its Affiliates, and any sublicenses, hereunder shall be ***,
except that (i) during the term of this Agreement, (A) any sublicense
granted to make or have made quantities of Product which exceed the
requirements reserved to UCB as provided in Section 3.1 and Annex G, or
(B) any sublicense granted pursuant to Section 3.2 or Section 4.2, shall
be royalty-bearing at the rate and for the period set forth in this
Section 7.4, (ii) if this Agreement is terminated by PRAECIS pursuant to
and in accordance with Section 10.1, such license and any such sublicenses
shall be royalty-bearing at the rate and for the period set forth in this
Section 7.4, (iii) if this Agreement is terminated by UCB pursuant to and
in accordance with Section 10.1,
15
any such sublicense (other than to a Partner) shall be royalty-bearing at
the rate and for the period set forth in this Section 7.4. If under this
Section 7.4 the license or any sublicense granted pursuant to this Section
7 for the term of this Agreement and upon the termination hereof is
royalty-bearing, such royalty shall apply until the termination of this
Agreement and for a period of five years thereafter. If under this Section
7.4 the license or any sublicense granted pursuant to this Section 7 upon
the termination hereof if royalty-bearing, such royalty shall apply for a
period of five years after such termination. In each case such royalty
shall be payable by PRAECIS to UCB. With respect to a royalty-bearing
sublicense referred to in clause (i) (B) or clause (iii) of this Section
7.4, such royalty shall be at a rate of ***% percent, and with respect to
any other royalty bearing license or sublicense referred to in this
Section 7.4 such royalty shall be at a rate of ***%, on the Net Sales of
Finished Product containing Product manufactured or supplied by any Third
Party and which incorporates or uses any part of the UCB Technical
Information, provided that in any event the applicable royalty shall be
payable only once with respect to the sale of any Finished Product.
7.5 Royalties. Royalties shall be payable in USD on a calendar quarterly basis
within thirty (30) days of the end of each calendar quarter. The exchange
rate of the due date shall apply. Each payment shall be accompanied by a
report stating the Net Sales and the amount of royalties payable to UCB,
as well as computation hereof.
The audit provisions contained in Section 3.4 shall apply mutatis mutandis
to the royalty payments provided by this Section and payment of any
shortfall in royalty shall be made forthwith after its determination
increased by an interest of 3 percentage points over LIBOR (3 months )
interest rate.
7.6 Grant-back license. PRAECIS hereby grants to UCB and UCB's Affiliates (i)
during the term of this Agreement, a non-exclusive royalty-free license to
use any technical information and data relating to the development,
testing, use or manufacture of the Product (other than relating to
formulations) which PRAECIS or its Affiliates have not or may conceive,
develop, acquire or have the ability to license or sublicense during the
term of this Agreement solely to make Product for PRAECIS, as provided
under this Agreement and (ii) during the term of this Agreement and
thereafter (except in the case of termination of this Agreement by PRAECIS
pursuant to and in accordance with Section 10.2, in which event the
license granted under this Section 7.6 shall automatically terminate), a
perpetual, irrevocable non-exclusive, fully paid-up license, with the
right to grant sublicenses to use said information
16
and data solely to make and have made peptides other than Product and
other than any other LHRH Antagonists.
7.7 Disclosure of technical and regulatory information. In accordance with
Sections 3.1, 3.2, 4.2, 4.6 and 6.1, as it may become necessary for
PRAECIS or a Third Party to undertake the manufacture of the Product, UCB
shall promptly supply to PRAECIS or such Third Party such technical
information (including without limitation UCB Technical Information) in
its possession as may be necessary for PRAECIS or such Third Party to
manufacture the Product in accordance with the Specifications and
Manufacturing Standards, including without limitation the Product's
current Drug Master, the SOPs and master batch records.
7.8 UCB Representations and Indemnity as to UCB Technical Information. UCB
represents and warrants to PRAECIS that (i) UCB is the sole and exclusive
owner of the UCB Technical Information, and has the full right, power and
authority to grant the licenses to PRAECIS pursuant to this Section 7, and
(ii) such grant, and UCB's performance of its obligations hereunder
(including its use of UCB Technical Information in connection with such
performance), do not and will not violate or infringe upon the
intellectual property or other rights of any Third Party. UCB shall
indemnify and hold PRAECIS harmless with respect to all liabilities,
claims, demands, actions, suits, losses, costs, damages and expenses
(including attorneys fees) arising out of or in connection with any claim
that the use by any Supplied Entities of the UCB Technical Information
pursuant to and in accordance with any license or sublicense granted under
this Section 7 violates or infringes upon the rights of any Third Party.
SECTION 8 - CONFIDENTIAL INFORMATION
8.1 Mutual confidentiality undertaking. From time to time during the term of
this Agreement, the parties will disclose or make available to each other
Confidential Information in connection with the activities contemplated
hereunder.
Each party hereby agrees that it will use Confidential Information
belonging to the other solely for the purpose(s) for which it was
disclosed hereunder; and that it will not disclose Confidential
Information belonging to the other to any Third Party (other than its
employees and/or consultants reasonably requiring such Confidential
Information for purposes of this Agreement who are bound by obligations of
non disclosure and limited use at least as stringent as those contained
herein) without the express prior written consent of
17
the other party, except to regulatory authorities to the extent required
by law or by applicable regulations.
Any Confidential Information reasonably classifiable as a trade secret
shall, as between the parties and their employees, remain a trade secret
and be fully protected as such in spite of any failure by the disclosing
party to constantly admonish the receiving party of the trade secret
nature of the information disclosed or because of any failure of the
disclosing party to pursue an active course of conduct designed to inform
the receiving party or its employees that the secrets and information are
to remain confidential.
8.2 Publicity. The parties further agree that except as otherwise expressly
required by law, they will not publicly announce or otherwise disclose any
of the terms and conditions of this Agreement without the express prior
written consent of the other; provided that the foregoing shall not
prohibit or restrict in any manner, and no consent shall be required, for
any such public announcement or disclosure by a party in connection with
any financing, strategic transaction, acquisition or disposition involving
such party. Neither party will use the names of the other or any of its
employees in any advertising, promotional or sales materials relating to
Product or otherwise, except as required by law or regulatory authorities,
without the express prior written consent of the other.
SECTION 9 - INDEMNIFICATION
9.1 UCB Indemnity. UCB shall at all times during the term of this Agreement
and thereafter defend, indemnify and hold PRAECIS and its Affiliates and
their respective officers, directors, agents, employees and permitted
assigns, harmless from and against any and all third party claims, suits
(whether or not groundless), damages, liabilities, costs and expenses
(whether based on tort, breach of contract, patent infringement, product
liability or otherwise), including, but not limited to court costs and
reasonable attorneys fees, arising out of or based on a material breach by
UCB of any representation, warranty or obligation under this Agreement,
subject to any limitations set forth in this Agreement.
9.2 PRAECIS Indemnity. PRAECIS shall at all times during the term of this
Agreement and thereafter defend, indemnify and hold UCB and its Affiliates
and their respective officers, directors, agents, employees and permitted
assigns, harmless from and against any and all third party claims, suits
(whether or not groundless), damages, liabilities, costs and expenses
(whether
18
based on tort, breach of contract, patent infringement, product liability
or otherwise), including, but not limited to court costs and reasonable
attorneys fees, (i) arising out of or based on a material breach by
PRAECIS of any representation, warranty or obligation under this
Agreement, subject to any limitations set forth in this Agreement or (ii)
arising out of any sale or use of pharmaceutical compositions containing
the Product, except, in the case of clause (ii), to the extent determined
by a court as being attributable to UCB's gross negligence or reckless or
willful misconduct.
9.3 Third Party Claims. Either party (the "Notifying Party") shall promptly
notify the other party (the "Indemnifying Party") of the existence of any
Third Party claim, demand or other action giving rise to a claim for
indemnification under this Agreement (a "Third Party Claim") and shall
give the Indemnifying Party a reasonable opportunity to defend the same at
its own expense and with its own counsel, provided that the Notifying
Party shall at all times have the right to participate in such defense at
its own expense. If, within a reasonable time after receipt of notice of a
Third Party Claim the Indemnifying Party shall fail to so defend, the
Notifying Party shall have the right, but not the obligation, to defend
and, with the Indemnifying Party's written consent (not to be unreasonably
withheld) to compromise or settle (exercising reasonable business
judgment) the Third Party Claim for the account and at the risk and
expense of the Indemnifying Party. Each party shall make available to the
other, at the other's expense, such information and assistance as the
other shall reasonably request in connection with the defense of a Third
Party Claim.
9.5 Assistance with Claims. Subject to Sections 9.1 through 9.4 above, each
party shall, at the request and expense of the other, furnish such
reasonable assistance as may be required to enable the other party to
defend itself against Third Party Claims threatened or filed in connection
with any activities conducted hereunder.
9.6 Consequential losses. Notwithstanding any other provision hereof to the
contrary, neither party shall be liable to the other party for any
special, incidental, indirect or consequential damages, such as loss of
reputation or loss of revenue, profit, downtime costs, and claims of
customers or others for such damages.
SECTION 10 - TERM AND TERMINATION
19
10.1 Term. This Agreement shall be in full force and effect as from its
signature and shall remain in force for an initial period expiring seven
(7) years from the Launch Date, except that it will be automatically
renewed for consecutive two (2) year periods, unless terminated by either
party by written notice given at the latest twenty-four (24) months before
the expiration of the initial period or any renewal period.
10.2 Earlier termination. This Agreement may be terminated by either party by
written notice of termination to the other party (i) if the other party
commits a material and substantial breach or default in the performance of
any of the provisions of this Agreement and such breach or default is not
cured within ninety (90) days after the giving of notice (a "Section 10.2
Default Notice") by the other party specifying such breach or default;
provided that, subject to the next succeeding proviso, PRAECIS may not
give a Section 10.2 Default Notice in respect of such a breach or default
by UCB consisting of a failure to supply Product in accordance with the
terms hereof until the expiration, without UCB having delivered the Cure
Evidence, of the ninety (90) day period (extended to one hundred and
eighty (180) days during the Development Period) referred to in the last
sentence of Section 4.6; provided further that PRAECIS may give a Section
10.2 Default Notice prior to the expiration of such ninety (90) day
period, whether or not UCB has delivered the Cure Evidence prior to such
expiration, in respect of such a breach or default by UCB consisting of a
failure to supply Product in accordance with the terms hereof if such a
breach or default has occurred more than once within any twenty-four month
period after the Development Period, (ii) forthwith if the other party
institutes or is the subject of bankruptcy, liquidation or any other
similar proceedings or (iii) forthwith if a situation of Force Majeure as
provided by Section 14 continues for more than one hundred and twenty
(120) days.
10.3 Additional Termination Rights. PRAECIS and UCB shall have the right upon
written notice thereof to the other to terminate this Agreement if PRAECIS
either (i) determines that the pharmaceutical formulation of the Product
is unsafe or not efficacious, or (ii) determines not to commercialize or
continue to commercialize the Product. PRAECIS shall promptly notify UCB
if PRAECIS makes the determination referred to in clause (i) or (ii) of
this Section 10.3.
SECTION 11 - EFFECT OF TERMINATION
20
11.1 Effects of Termination. In the event of the termination of this Agreement
for any reason, other than termination by PRAECIS pursuant to Section
10.2, PRAECIS shall purchase from UCB (i) all inventories of Product
meeting Specifications and Manufacturing Standards, manufactured by UCB
based on the forecasted quantities of Product for the first two quarters
contained in the most recent Forecast preceding such termination and/or
Purchase Orders delivered by PRAECIS to UCB prior to such termination, at
the then current price, (ii) all inventories of quality control released
process intermediates manufactured by UCB based on the forecasted
quantities of Product for the first two quarters contained in the most
recent Forecast preceding such termination at a price equal to their
proportionate part of the price of Product and (iii) all raw materials
previously purchased by UCB to meet the forecasted quantities of Product
for the first two quarters contained in the most recent Forecast preceding
such termination, delivered by PRAECIS to UCB, at UCB's purchase cost.
11.2 Survival. Upon termination of this Agreement, all rights, licenses and
obligations of the parties hereunder shall immediately cease, except (i)
for Section 3.7 and Sections 7 through 12 which shall survive, (ii) for
Sections 6 and 13 through 19 (to the extent applicable to such surviving
sections referred to in clause (i)), and (iii) that termination of this
Agreement shall not release a party from any liability for breach of this
Agreement or from any liability or obligation that arose prior to such
termination.
11.3 Return of Confidential Information upon termination. Upon termination of
this Agreement, each party shall promptly return to the other, at the
other's request, any and all Confidential Information of the other then in
its possession or under its control, except if such information is covered
under surviving license rights.
SECTION 12 - REPORTS AND RECORDS
12.1 Notice of certain events. Each party shall promptly notify the other upon
becoming aware of any of the following events: any confirmed or
unconfirmed information concerning adverse, serious or unexpected
occurrences associated with the safety, handling or use of Product;
unauthorized disclosure of any Confidential Information of the other; any
alleged infringement of Third Party proprietary rights in connection with
actions taken hereunder; liability claims relating to Product; and any
other event that might reasonably be expected to have a material adverse
effect upon the development, production, sale or distribution of Product.
21
12.2 Quality Control records. UCB shall maintain records relating to Product in
accordance with the Manufacturing Standards and shall retain such records
for not less than ten (10) years after shipment to PRAECIS of the Product
to which such records relate, and thereafter such records will be
transferred to PRAECIS if requested. PRAECIS shall be entitled to inspect
such records at its own expense and at such times and intervals as PRAECIS
shall reasonably request upon prior written notice to UCB.
22
SECTION 13 - ASSIGNMENT AND DELEGATION
Neither this Agreement nor any rights hereunder may be assigned or licensed by
either party, without the prior written consent of the other party, except for
(i) assignments or sublicenses to Affiliates which shall occur freely by simple
notice to the other party (provided that no such assignment or sublicense shall
relieve a party from liability for its obligations hereunder), (ii) as provided
in Section 7 and (iii) any such assignment to an entity which acquires control
of the entire business of such party or that part of its business to which this
Agreement relates, whether pursuant to a merger, consolidation, stock purchase
recapitalization, asset sale or otherwise, unless, with respect to this clause
(iii), (A) in the case of such an acquisition of the business (or such part
thereof) of UCB, the acquiring entity is, at the time of such acquisition,
engaged, directly or indirectly, in the business of commercializing and/or
manufacturing products containing any LHRH antagonist or LHRH agonist and is a
direct or substantial competitor of PRAECIS with respect to such business or (B)
in the case of such an acquisition of the business (or such part thereof) of
PRAECIS, the acquiring entity is, at the time of such acquisition, engaged,
directly or indirectly, in the business of the contract manufacture of peptides
and is a direct and substantial competitor of UCB with respect to such business.
SECTION 14 - FORCE MAJEURE
Neither party hereto shall be liable for damages, nor shall this Agreement be
terminable or cancelable (except as provided in Section 10.2) by reason of any
delay or default in such party's performance hereunder if such default or delay
is caused by events beyond such party's reasonable control ("force majeure")
including, but not limited to, acts of God, regulation or law or other action of
any government or agency thereof, war or insurrection, civil commotion
destruction of production facilities or materials by earthquake, fire, flood or
storm, labor disturbances, epidemics, or failure of suppliers (except to the
extent reasonably foreseeable or attributable to such party, public utilities or
common carriers).
Each party shall endeavor to resume its performance hereunder as soon as
reasonably possible if such performance is delayed or interrupted by reason of
force majeure.
SECTION 15 - APPLICABLE LAW - ARBITRATION
This Agreement shall be governed by and interpreted in accordance with the laws
of the state of New York without reference to its conflicts of law principles.
Any dispute arising under this Agreement which cannot be settled amicably shall
be submitted to binding arbitration in accordance with the International Chamber
of
23
Commerce Rules, by an arbitration panel composed of three members selected in
accordance with such rules, and the decision or award of such panel will be
binding upon the parties without the right of appeal, and may be enforced in any
court of competent jurisdiction. The place of arbitration shall be Atlanta,
Georgia and the language of arbitration shall be English.
Within thirty (30) days after selection of the arbitrators, each party shall
submit to the arbitrators a proposed resolution of the dispute and the reasons
for proposing the resolution. Should either party desire, a joint meeting before
the arbitrators shall be held within thirty (30) days after the end of the above
resolution submission period. Within thirty (30) days after the later of (i) the
end of the above resolution submission period or (ii) the holding of the joint
meeting, the arbitrators shall decide the matter by selecting only one of such
resolutions, and shall have no authority to modify its proposed terms.
SECTION 16 - SEVERABILITY
Should any part of this Agreement be held unenforceable or in conflict with the
applicable laws or regulations of any jurisdiction, the invalid or unenforceable
part or provisions shall be replaced with a provision which accomplishes, to the
extent possible, the original business purpose of such part or provision in a
valid and enforceable manner, and the remainder of this Agreement shall remain
binding upon the parties hereto.
SECTION 17 - NOTICES
Any notice required or permitted to be given under the terms of this Agreement
shall be in writing and shall be sufficiently given if mailed by first class
postage prepaid or given by telefax or delivery to the party for whom is
intended at the address indicated in the preamble or to such other address as
either party hereto may from time to time advise the other party by notice in
writing to the addresses (or facsimile number) first above given. Any notice
given as aforesaid shall be deemed to have been given on the day on which it was
delivered or sent by telefax (with "answer-back" confirmation), if delivered or
sent by telefax, or on the seventh business day excluding Saturday, Sunday and
statutory holidays, following the date on which it was mailed, if mailed,
provided that if there is a postal interruption due to strike, slow down or
other causes, notice shall be given by delivery or telefax only. Any party
hereto may change its address for service from time to time by notice given in
accordance with the foregoing.
SECTION 18 - ENTIRE AGREEMENT
24
This Agreement (including the Annexes hereto) constitutes the entire
understanding between the parties with respect to the subject matter hereof and
supersedes all prior agreements, negotiations, understandings, representations,
statements and writings relating to it ir any part thereof.
No modification, alteration, waiver or change in any terms of this Agreement
shall be valid or binding upon the parties hereto unless made in writing.
SECTION 19 - ANTITRUST COMPLIANCE
In the event that a governmental authority of competent jurisdiction advises
either of the parties in writing that one or more of the provisions of this
Agreement violate any applicable competition or antitrust law of the USA or the
EU, UCB and PRAECIS agree to amend this agreement to the minimum extent
necessary to render it compatible with such provisions.
SECTION 20 - REPRESENTATIONS AND WARRANTIES
Each party represents and warrants to the other that (i) the execution, delivery
and performance by such party of this Agreement has been duly authorized by all
requisite corporate action on the part of such party, and (ii) this Agreement
has been duly executed and delivered by such party and constitutes the valid and
binding agreement of such party, enforceable against such party in accordance
with is terms.
25
Done as of this March 12, 1998 (date), in Brussels (place), in two original
copies, each party having received its copy.
UCB-BIOPRODUCTS S.A. PRAECIS PHARMACEUTICALS
INCORPORATED
/s/ E. Croufer /s/ Xxxx X. Silver
-------------------- ----------------------------
By: E. Croufer By: Xxxx X. Silver
Title: Director Title: Vice President,
Corporate Development
/s/ Ph. Proost
-------------------- ----------------------------
By: /s/ Ph. Proost By:
Title: Director Title:
26
LIST OF ANNEXES
to the Development and Supply Agreement between UCB-BIOPRODUCTS S.A. and PRAECIS
PHARMACEUTICALS, INC, signed on March 12, 1998.
ANNEX A Specifications
ANNEX B Development Plan
ANNEX C 5-year plan (1997-2001)
ANNEX D First orders (stability and validations lots)
ANNEX E Prices (formula or mode)
ANNEX F UCB strategy of synthesis
ANNEX G Product requirements allocated to UCB
ANNEX H Guidelines provided by PRAECIS' MSDS
27
ANNEX A
PRAECIS
PHARMACEUTICALS
INCORPORATED
PPI-149 Drug Substance Tentative Specifications
--------------------------------------------------------------------------------
Parameter *** Tentative Specification
--------------------------------------------------------------------------------
Appearance *** White to off-white powder
--------------------------------------------------------------------------------
Identification
o HPLC *** ***
o Mass Spectrometry *** ***
o Amino acid analysis *** ***
--------------------------------------------------------------------------------
*** *** ***
--------------------------------------------------------------------------------
*** *** ***
--------------------------------------------------------------------------------
Water content *** ***
--------------------------------------------------------------------------------
Specific rotation *** ***
--------------------------------------------------------------------------------
*** *** ***
--------------------------------------------------------------------------------
Residual solvents: *** ***
***
--------------------------------------------------------------------------------
HPLC purity *** ***
- Total impurities
- Individual impurity
--------------------------------------------------------------------------------
Microbial limits *** ***
--------------------------------------------------------------------------------
Bacterial endotoxins *** ***
(LAL)
--------------------------------------------------------------------------------
Peptide content *** ***
--------------------------------------------------------------------------------
Note: The tightening of current tentative specifications is envisioned,
according to batch analysis data, as part of the NDA process.
0 Xxxxxxxxx Xxxxxx Xxxxxxxxx Xxxxxxxxxxxxx 00000-0000
Tel 617/000-0000 Fax 617/000-0000
28
ANNEX B
OUTLINE OF UCB DEVELOPMENT/WORK PLAN
PPI-149 DRUG SUBSTANCE
In synergy with PRAECIS:
1. Develop and Supply both clinical and commercial quantities of PPI-149 Drug
Substance prepared according to cGMP and other international quality
standards.
2. Prepare/assist in preparation of CMC drug substance filings (US NDA Dec.,
98) European Filings estimated 2Q99.
3. Develop, maintain and provide documentation to support approval and
ongoing commercial supply of drug substance.
o Batch Production records
o Certificates of Analysis
o Development reports
o Facilities and instrumentation IQ/QQ/ and PQ
o Facilities Drug Master Files, to be included in CMC/DMF
o SOP's
o Change control
o Validation documentation - strategy, plan, protocol, report
o CMC section for NDA filing
o Stability programs and reports (development and commercial)
4. Prepare and qualify reference standards
5. Determine and qualify impurity profile including preparation of impurity
standards as required.
6. Supply representative pre-launch material.
7. Source, secure, and qualify appropriate production facilities for
commercial volumes and expedite scale up in a timely manner.
8. Qualify raw material suppliers, dual supply to minimize risk, as
appropriate.
9. Outsource qualified intermediates as appropriate
10. Develop suitable recycle strategy for the filing
11. Develop/assist in developing a supplemental commercial strategy which
favorably impacts cycle time and cost of goods.
12. Maintain regulatory filing with appropriate updates (CBE's, AR's)
13. Provide comprehensive regulatory support for international approvals and
commercializations.
14. Expediently work to correct/improve any findings documented or questions
generated by regulatory agencies or other quality assessments.
29
Annex C - 5 Yr. Plan (1998-2002)
Year Quantity (***)
---- --------
1998 ***
1999 ***
2000 ***
2001 ***
2002 ***
30
ANNEX D
to the Development & Supply Agreement between UCB-Bioproducts S.A. and PRAECIS
PHARMACEUTICALS Inc.
Annex D is a part of the above mentioned Agreement.
ORDERS & DELIVERIES SCHEDULE
DURING THE DEVELOPMENT PERIOD
Reference to Article 4.4 & Article 6.1
o *** orders for a total amount of *** will be issued at the following
dates:
1. P.O. of *** will be issued *** and not later than ***
2. P.O. of *** will be issued not later than ***
3. P.O. of *** will be issued not later than ***
These orders are ***
o Advanced payments: each P.O. will be accompanied by an advanced payment at
the corresponding date of the P.O. according to the following schedule:
1. ***: *** USD
2. ***: *** USD
3. ***: *** USD
o Delivery schedule: delivery schedule for the *** is as follows:
1. ***: deliveries not later than ***;
2. ***: deliveries not later than ***;
3. ***: deliveries not later than ***.
o Modifications in the dates of issuing P.O. may significantly affect the
delivery schedule which would be revisited by UCB-Bioproducts should such
modifications occur.
o The prices for the *** is ***
31
ANNEX E
to the Development & Supply Agreement between UCB-Bioproducts S.A. and PRAECIS
PHARMACEUTICALS Inc.
Annex E is part of the above mentioned Agreement.
ORDERS & DELIVERIES SCHEDULE AFTER DELIVERY OF THE FIRST 112 Kg
Reference to Article 6.1
Pricing structure: the price structure is defined taking into account ***.
o For minimum orders of ***: ***
o For orders between***: ***
o For orders above ***: ***
32
ANNEX F
UCB-BIOPRODUCTS S.A.
--------------------------------------------------------------------------------
----------------------------
Praecis Pharmaceuticals Inc.
UCB Strategy of Syntheses
----------------------------
1. INTRODUCTION AND OVERVIEW
The manufacturing strategy developed by UCB-Bioproducts for PPI-149 is outlined
on the following chart:
***Chart Omitted***
*** Approximately 10 lines omitted ***
2. SEQUENCE ASSEMBLY
*** Approximately 18 lines omitted ***
3. DEPROTECTION
*** Approximately 7 lines omitted ***
4. PURIFICATION
*** Approximately 15 lines omitted ***
--------------------------------------------------------------------------------
UCB-Bioproducts S.A. Page 1 of 4 Confidential
33
ANNEX F
5. ISOLATION
*** Approximately 7 lines omitted ***
6. PROCESS CONTROLS
*** Approximately 8 lines omitted ***
7. FLOW CHART
An actual flow chart for a preferred manufacturing strategy is given hereafter,
to illustrate the current process.
(a) General Flow Chart
(b) Assembly Flow Chart
(c) Deprotection Flow Chart
(d) Purification Flow Chart
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UCB-BIOPRODUCTS S.A.
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Flow Chart Omitted
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ANNEX G
to the supply agreement between PRAECIS and UCB
PERCENTAGE OF PRODUCT REQUIREMENTS (article 3.1.)
Launch year ***
first ***
second ***
third ***
fourth ***
fifth and following ***
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ANNEX H
Material Safety Data Sheet
PPI-149-Depot (abarelix Depot) PRAECIS Pharmaceuticals, Incorporated
Xxx Xxxxxxxxx Xx., 0xx Xxxxx
Xxxxxxxxx, XX 00000
000-000-0000
Section I: Identification
Trade Name: abarelix or abarelix depot
Synonyms: PPI-149, R3827,
CAS#: None
M.W. ***
MF: ***
Section II: Hazardous Ingredients
None
Section III: Physical Data
Appearance: White to Off white powder
Odor: Odorless
Solubility: ***
Section IV: Fire and Explosion Information
Not considered to be a fire or explosion hazard.
Use any means suitable for extinguishing surrounding fire.
In the event of a fire, wear protective clothing and NIOSH-approved
self-contained breathing apparatus.
Section V: Health Hazards
*** Approximately 12 lines omitted ***
Toxicity -
***
First Aid -
If swallowed, wash out mouth with water provided person is conscious
Call a Physician
37
In case of skin contact, flush with copious amounts of water for at least
15 minutes, remove contaminated clothing and call a Physician.
If inhaled, remove to fresh air. If breathing becomes difficult, call a
physician.
In case of contact with eyes, flush with copious amounts of water for at
least 15 minutes. Call a physician.
Section VI: Reactivity Data
Stability:
Stable under ordinary storage conditions.
Preferably store cool and dry.
Hazardous combustion or decomposition products:
toxic fumes of carbon monoxide, carbon dioxide, nitrogen oxides
Hazardous polymerization
will not occur.
Section VII: Spill or Leak Procedures
Steps to be taken if material is released or spilled -
Wear Respirator, chemical safety goggles, rubber boots and rubber gloves.
Sweep up, place in a bag and hold for disposal.
ventilate area and wash spill after pickup is complete.
Waste Disposal Method -
Dissolve or mix in a combustible solvent and burn in a chemical
incinerator equipped with an afterburner and scrubber.
Observe all Federal, State, and Local Laws.
Section VIII: Precautions to be Taken in Handling and Storage
NIOSH/MSHA approved respirator
Mechanical exhaust
Chemical resistant gloves
Chemical safety Goggles
Caution: The Chemical, Physical and Toxicological properties of this molecule
have not been thoroughly investigated.
Exercise Due Care.
Target Organs: ***
The above information is believed to be correct but does not purport to be all
inclusive and are offered as a guide for your consideration, investigation, and
verification. PRAECIS makes no guarantee of the accuracy or the completeness of
the data and shall not be held liable for any damage resulting from handling or
from direct contact with the above product.
Section IX: Special Precautions
None
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