Exhibit 10.48
XXXX Confidential treatment has been requested for this information
pursuant to Rule 24B-2.
November 7, 1995
Xxxx X. Xxxxxxxx
Chairman, President and Chief Executive Officer
XOMA Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Re: E5(r) Agreement
Dear Xxxx:
This letter agreement ("Agreement") amends the letter
agreement dated July 14, 1993 (the "Letter") between XOMA
Corporation ("XOMA") and Pfizer Inc. ("Pfizer") with respect to
the parties' continuing collaboration on a double-blinded,
placebo-controlled clinical trial (the "Trial") of the E5(r)
product (the "Product") in the United States.
1. Estimated Costs of Trial
(a) The parties currently anticipate that the Trial
may cost as much as XXXX. Attached hereto as Appendix A
is a budget reflecting the parties' current estimated costs of
the Trial, which estimate includes, but is not limited to, past
and anticipated costs of Trial design; institutional grants for
patient enrollment and evaluation; clinical supplies; use of
one or more CROs to monitor the Trial; and analysis, reporting
and preparation of Trial results. For purposes of this
Agreement, the parties' internal costs (overhead, salaries,
etc.) will be borne by the parties and will not be charged to
the Trial or otherwise paid or reimbursed out of the
XXXX.
(b) Without the prior written approval of both
parties, the costs of the Trial will not exceed XXXX.
If either party anticipates that such costs will, or are
reasonably likely to, exceed XXXX, such party will
notify the other and the parties will promptly negotiate in
good faith to determine whether to continue the Trial and, if
so, to establish responsibility for funding such excess.
2. Trial Expenses: Accounting and Payment
(a) Of the XXXX in budgeted costs referred to
above and in Appendix A, over XXXX has been incurred as
of the date hereof. The parties acknowledge that XOMA has
fulfilled its obligation to fund its share of the first
XXXX of the costs in accordance with the letter dated
September 7, 1995 from XOMA to Pfizer, a copy of which is
attached as Appendix B. In this connection, XOMA hereby
confirms that it has transferred ownership to Pfizer of
approximately 450 liters of ascites identified on Appendix C,
attached hereto, and that it will store such ascites at XOMA
for up to two years from the date hereof. Accordingly, the
parties agree that there is no remaining liability or
obligation due from either party to the other with respect to
the first XXXX. Pfizer will supply all bulk E5 material
for the remainder of the Trial (currently estimated to have a
cost of approximately XXXX) at no cost to XOMA. All
future budgeted cash out-of-pocket expenditures beyond those
included in the XXXX referred to above (up to a maximum
of XXXX) will be shared equally by Pfizer and XOMA as
set forth in more detail below. Any unbudgeted expenditure
which exceeds $50,000 will require the prior written approval
of both parties.
(b) The provisions of the Letter calling for
alternate payments of the Trial costs (i.e., the first sentence
of paragraph 4(b) and Appendix C attached to the Letter) are
hereby nullified. In the future, Pfizer will send quarterly
invoices to XOMA for fifty percent (50%) of the costs
(excluding bulk E5 material costs) incurred during each such
quarter. (The amount to be invoiced to XOMA is sometimes
referred to in this Agreement as the "Invoiced Amount" and the
total quarterly costs, excluding bulk E5 material costs, are
sometimes referred to in this Agreement as the "Full Quarterly
Costs." The Invoiced Amount will be 50% of the Full Quarterly
Costs.) Within 30 days after XOMA's receipt of each invoice
and the related complete expenditure and patient accrual report
described in paragraph 2(c) below. XOMA will either (i) pay
the total Invoiced Amount in cash, or (ii) XXXX
will become a credit against any future royalties payable by
Pfizer from U.S. sales of the Product under the License
Agreement between the parties dated June 9, 1987 (the "License
Agreement"). Each thirty-day option will relate to a specific
invoice and will not be applicable to or otherwise affect any
previous or future invoices. If XOMA fails to make timely any
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payment on an invoice XXXX,
Pfizer will have the option of either treating the
nonpayment or underpayment as a material breach or taking a
credit against royalties equal to XXXX.
Royalties will not be reduced under
this paragraph 2(b) by more than thirty percent (30%) in any
year. Credits in excess of thirty percent (30%) will be
deferred from year to year, as necessary.
(c) Within forty-five (45) days of the close of each
calendar quarter during which the Trial expenses are incurred,
Pfizer shall provide XOMA with a report on Trial expenditures
and patient accruals and an invoice for costs for which XOMA is
responsible hereunder, covering such costs incurred during the
quarter then most recently ended. Each quarterly report shall
be in the form of Appendix D attached hereto and shall set
forth both patient accruals and actual or forecast expenditures
during (i) the quarter then most recently ended; (ii) the
entire period of the Trial to date; (iii) the then current
quarter; and (iv) the then current calendar year. In the case
of a report for the fourth quarter of a year, the current year
will be replaced by the following year. All historical
expenditure information will be supplied with comparative
information on budgeted levels of expenditure. Each invoice
for costs for which XOMA is responsible hereunder shall reflect
only expenditures contemplated by the budget and shall be
accompanied by reasonable supporting documentation.
3. Centocor Litigation Expense Sharing
Pfizer and XOMA have earlier agreed orally that as a
result of past litigation with Centocor Inc., if the Product is
approved by the FDA, XOMA has an obligation to reimburse Pfizer
a total amount equal to Eight Million Four Hundred Sixty-Four
Thousand Nine Hundred Forty Dollars ($8,464,940) for attorneys
fees and other legal costs incurred, provided that such
reimbursement will be made only through the reduction of
royalties otherwise payable by Pfizer to XOMA on U.S. sales of
the Product and provided further that the combined reduction of
royalties for Centocor litigation costs and the deferred Trial
costs described in Paragraph 2(b) above will not reduce
royalties otherwise payable to XOMA by more than thirty percent
(30%) in the aggregate in any year. Amounts in excess of
thirty percent (30%) in any year will be deferred from year to
year, as necessary.
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4. Termination
(a) Early Termination of Trial. It is possible
that, after reviewing interim data of the Trial, the Safety
Monitoring Board will determine that the Trial should be
terminated before completion, either because of positive or
negative results. If such a determination is made, the parties
will share equally the reasonable costs of closing out the
study sites and winding down the Trial.
(b) Trial Costs Exceed XXXX. Either party
may terminate its obligations to fund any future costs or
expenses of the Trial by giving thirty (30) days' prior written
notice to the other party if Trial costs exceed XXXX and
the parties have not then agreed, pursuant to Paragraph l(b),
to fund such excess. If either party terminates under this
Paragraph 4(b) and the other party, by written notice, elects
to continue the Trial, the terminating party shall use
commercially reasonable efforts to cooperate with the
continuing party at the election and expense of the continuing
party. If XOMA is the continuing party, Pfizer shall attempt
to minimize any delay or interruption in the Trial's progress
occasioned by a change in the identity of the sponsor of the
IND for the Trial.
(c) Termination for Breach. If either party commits
a material breach of this Agreement and fails to cure the
breach within thirty (30) days after receipt of written notice
of breach, the non-breaching party may, by written notice to
the breaching party, elect either (i) to continue the Trial at
its own cost or (ii) close out the study sites and wind down
the Trial, in which case the breaching party shall, subject to
the maximum expenditure level set forth in paragraph 2(a), be
responsible for one-half of the costs of doing so. In either
case, the non-breaching party shall also be free to pursue any
remedies for the breach to which is it entitled.
(d) Termination without Cause. Either party may
terminate its obligations to fund any future costs or expenses
of the Trial without cause at any time, by giving ninety (90)
days' prior written notice to the other party. If a party
terminates under this paragraph 4(d), the provisions of
paragraph 4(b) shall apply as if the Trial costs exceeded
XXXX and the parties did not agree to fund such excess.
If Pfizer elects to continue the Trial after termination by
XOMA pursuant to this paragraph 4(d), the result of multiplying
50% of the Trial costs incurred by Pfizer after the date of
termination,
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up to the difference between (i) XXXX; and
(ii) the total Trial costs incurred by the parties as of the
date of termination, by XXXX will become a credit
against any future U.S. royalties payable by Pfizer under the
License Agreement. XOMA'S obligation in the preceding sentence
shall be subject to the maximum expenditure level set forth in
paragraph 2(a).
5. Future Purchases of Ascites
If Pfizer desires to purchase additional ascites from
XOMA, the purchase price will be XXXX/liter, for any
orders placed and paid for before two years from the date
hereof. For any subsequent orders, the parties will negotiate
prices in good faith.
6. Effect on Other Agreements
(a) Except as modified hereby, the terms of the
Letter shall remain in full force and effect. In particular,
Paragraphs 1(b), 2, 4(c), 6 and 7 of the Letter remain in full
force and effect, and essentially unchanged.
(b) In the event of any conflict between this
Agreement and the Letter, this Agreement shall govern.
If you are in agreement with the foregoing, please so
indicate by signing and returning the enclosed copy of this
Agreement.
Sincerely yours,
Pfizer Inc.
By/s/ Xxxxx Xxxxx
____________________
Xxxxx X. Xxxxx
Acknowledged and agreed
this 9th day of November, 1995.
XOMA Corporation
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By/s/ Xxxx X. Xxxxxxxx
_______________________
Xxxx X. Xxxxxxxx
Chairman, President and Chief Executive Officer
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