LABORATORY CORPORATION OF AMERICA HOLDINGS and VYTERIS, INC. PRODUCT MARKETING AGREEMENT
Exhibit
10.133
LABORATORY
CORPORATION OF AMERICA HOLDINGS
and
VYTERIS,
INC.
This
Agreement between Vyteris, Inc. (“Vyteris”) and Laboratory Corporation of
America Holdings and its subsidiaries, (“LabCorp”) is entered into effective as
of June 5, 2007 and sets forth the terms and conditions upon which Vyteris
and
LabCorp will work together on the marketing of Vyteris’s LidoSiteÒ
product
(the “Product”) to certain markets as further described herein. The parties
agree as follows:
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A.
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The
specific terms and conditions of Phase I (also referred to as the
“Market
Uptake Phase”) of the business relationship contemplated by this Agreement
are set forth in Exhibit A attached hereto. Additional terms and
conditions applicable to Phase II (also referred to as the “Expanded
Market Phase”) of the business relationship contemplated by this Agreement
are subject to negotiation by both parties during the negotiation
period
described in Exhibit A. Any such additional terms and conditions
will set
forth in an Addendum to this Agreement or other written agreement
signed
by authorized representatives of both parties.
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B.
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Neither
party shall assign or transfer this Agreement without the consent
of the
other party, which consent shall not be unreasonably withheld or
delayed.
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C.
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Notices
and other communications permitted or required under this Agreement
will
be deemed to be properly given if in writing and either delivered
by hand
or mailed by First Class U.S. Mail, postage prepaid, addressed to
the
parties as follows:
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Vyteris :
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Vyteris,
Inc.
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00-00
Xxxxxxx Xxxxx
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Xxxx
Xxxx, Xxx Xxxxxx 00000
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Attention:
Xxxxxxx X. XxXxxxxx
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LabCorp:
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Laboratory
Corporation of America Holdings
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000
Xxxxx Xxxxxx Xxxxxx
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Xxxxxxxxxx,
Xxxxx Xxxxxxxx 00000
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Attention:
Law Department
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D.
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This
Agreement may not be amended or modified except by written agreement
of
both of the parties.
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E.
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Neither
party will be liable for any failure to perform under this Agreement
due
to strikes, fire, explosion, flood, riot, lock-out, injunction,
interruption of transportation, unavoidable accidents, inability
to obtain
supplies at reasonable prices necessary to produce the Product or
other
reasons beyond the reasonable control of such party.
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F.
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Vyteris
guarantees that the Product shall not be adulterated or misbranded
within
the meaning of the U.S. Food, Drug, and Cosmetic Act.
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G.
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If
any terms of this Agreement are materially breached by either party
and
the parties cannot agree on a resolution, the non-breaching party
may
terminate this Agreement upon thirty (30) days prior, written notice
to
the breaching party, unless such breach has been cured to the reasonable
satisfaction of the non-breaching party within such thirty (30) day
period.
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC.
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H.
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Vyteris
warrants that during their applicable shelf life, the Product will
conform
with the Specifications set forth in the package insert. Furthermore,
Vyteris hereby represents and warrants that, to its knowledge, the
practice of any technology or patents licensed hereunder is and will
be
free of any infringement of patents of other persons. Vyteris hereby
represents and warrants that, to its knowledge, the use or sale of
any
Product covered by this agreement is and will be free of any infringement
of patents of other persons. Except as expressly set forth in this
Agreement, neither party makes any representations or warranties
with
respect to the Product or otherwise in connection with this Agreement,
and
hereby expressly disclaims any implied warranties of merchantability
and
fitness for a particular purpose.
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I.
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Vyteris
shall give LabCorp a 90 day written notification of any Product changes
(or if such notice is not feasible, as much notice as is practicable
under
the circumstances).
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J.
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Vyteris
agrees to defend, indemnify, and hold LabCorp and subsidiaries, directors,
officers, employees, and agents wholly harmless from and against
third-party claims, losses, lawsuits, settlements, demands, causes,
judgments, expenses, and cost (including reasonable attorney fees),
in
each case in connection with any third party claims to the extent
arising
under or in connection with this Agreement in the event that such
cost and
liabilities are caused by a) Vyteris’ breach of any of its warranties in
this Agreement, b) the failure of the Product to function in accordance
with any written materials provided therewith or c) any negligence
or
willful misconduct of Vyteris. However, the foregoing rights to indemnity
shall not apply to the extent that such claim, loss, lawsuit, or
settlement results from LabCorp’s negligence or willful misconduct
including, without limitation, the negligence of LabCorp’s employees, or
from the modification of any Product of Vyteris by a third party
not
within Vyteris’ control or without Vyteris’ permission. In the event of a
lawsuit or other action in connection with which LabCorp is seeking
indemnification from Vyteris hereunder, LabCorp agrees to give timely
notice of the lawsuit or action to Vyteris and to cooperate with
Vyteris
in the defense of the lawsuit or action.
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K.
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LabCorp
agrees to defend, indemnify, and hold Vyteris and subsidiaries, directors,
officers, employees, and agents wholly harmless from and against
third-party claims, losses, lawsuits, settlements, demands, causes,
judgments, expenses, and cost (including reasonable attorney fees),
in
each case in connection with any third party claims to the extent
arising
under or in connection with this Agreement in the event that such
cost and
liabilities are caused by a) LabCorp’s breach of any of its warranties in
this Agreement, or b) negligence or willful misconduct of LabCorp.
However, the foregoing rights to indemnity shall not apply to the
extent
that such claim, loss, lawsuit, or settlement results from Vyteris’s
negligence or willful misconduct including, without limitation, the
negligence of Vyteris’s employees, or from the modification of any Product
of LabCorp by a third party not within LabCorp’s control or without
LabCorp’ permission. In the event of a lawsuit or other action in
connection with which Vyteris is seeking indemnification from LabCorp
hereunder, Vyteris agrees to give timely notice of the lawsuit or
action
to LabCorp and to cooperate with LabCorp in the defense of the lawsuit
or
action.
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L.
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Either
party may issue a press release or make public statements regarding
this
Agreement and the relationship between the parties. The parties shall
mutually agree on the content of any press release. The initial press
release to be issued by Vyteris upon signing of this Agreement is
attached
as Exhibit
B,
which press release has been approved by LabCorp. Any public statements
made by either party shall generally match the content of an approved
press release; to the extent that a public statement is to be made
prior
to approval of a press release, or if a public statement will differ
materially from the content of an approved press release, the parties
shall make good-faith efforts to reach prior agreement as to the
content
of such public statement.
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC.
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M.
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NEITHER
PARTY WILL BE LIABLE TO THE OTHER PARTY (NOR TO ANY PERSON CLAIMING
RIGHTS
DERIVED FROM SUCH OTHER PARTY’S RIGHTS) FOR CONSEQUENTIAL, PUNITIVE OR
EXEMPLARY DAMAGES OF ANY KIND (INCLUDING WITHOUT LIMITATION LOST
REVENUES
OR PROFITS, LOSS OF USE, LOSS OF COST OR OTHER SAVINGS OR LOSS OF
GOODWILL
OR REPUTATION) WITH RESPECT TO ANY CLAIMS BASED ON CONTRACT, TORT
OR
OTHERWISE (INCLUDING NEGLIGENCE AND STRICT LIABILITY) ARISING FROM
OR
RELATING TO THE PRODUCT, OR OTHERWISE ARISING FROM OR RELATING TO
THIS
AGREEMENT, REGARDLESS OF WHETHER SUCH PARTY WAS ADVISED, HAD OTHER
REASON
TO KNOW, OR IN FACT KNEW OF THE POSSIBILITY THEREOF.
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N.
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Unless
otherwise agreed to by the parties in writing, neither party transfers
or
licenses to the other party any rights in or to its patents, patent
applications, copyrights, trademarks, trade secrets or other intellectual
property rights.
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| LABORATORY CORPORATION OF AMERICA HOLDINGS and its subsidiaries |
VYTERIS,
INC.
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| By: /s/ Xxxxxxxx X. Xxxxxx | By: /s/ Xxxxxxx X. XxXxxxxx | |||
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Xxxxxxxx
X. Xxxxxx
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Xxxxxxx
X. XxXxxxxx
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| Title: |
Executive
Vice President, Sales, Marketing and Managed Care
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Title: |
President
and CEO
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| Date: 6/5/2007 | Date: 6/5/2007 | |||
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC.
Exhibit
A - Terms and Conditions for Phase I - Market Uptake Phase
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Certain
Definitions
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“M.D.
Office Market”
means all medical doctor’s offices located in the Territory.
Notwithstanding the foregoing, the M.D. Office Market does not include:
(i) the offices of dermatologists, rheumatologists, oncologists,
or
orthopedic surgeons, (ii) ambulatory care centers or (iii) the in-patient
hospital market. The M.D. Office Market also includes facilities
which
provide blood collection services (“Contracted Draw Sites”) but which are
not physician’s offices or in-patient hospitals, to the extent that
applicable regulations permit such facilities to administer the
Product.
LabCorp
Rights Re: Rheumatology and Oncology Office Markets:
During Phase I (as defined below), LabCorp may include any rheumatology
or
oncology office in its specific assessment areas. Any such office
will be
“carved out” of any Vyteris commercial arrangement during Phase I. If
Vyteris receives a bona fide commercial offer with respect to the
rheumatology or oncology office market during Phase I, Vyteris will
offer
LabCorp a “matching offer” option with 30 day trigger. Rights to this
market will be mutually agreed to by the parties for Phase II.
“Territory”
means the United States and its territories and possessions.
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Overview
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LabCorp
will represent, market, and facilitate the selling of the Product
in the
M.D. Office Market for the indicated use of the Product as a local
anesthetic prior to blood draws and/or venipuncture.
LabCorp
will receive reimbursement for its time, energy and efforts to introduce
the Product to the M.D. Office Market as provided herein.
This
Agreement provides for an initial “Market
Uptake Phase”
(also referred to as “Phase
I”).
Subject to mutual agreement, the parties may enter into an addendum
to
this Agreement covering a “Phase
II”
term (also referred to as the “Expanded
Market Phase”),
which will provide for an expanded marketing and supply arrangement
to
commence upon termination of Phase I.
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Term
and Termination
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Phase
I will have a term ending May 31, 2008, which term may be extended
by
mutual agreement of the parties.
The
term of Phase II, and any renewals thereof, will be subject to the
mutual
agreement of the parties.
The
parties will have reciprocal rights to terminate this Agreement in
the
event of material breach by the other party, following written notice
and
opportunity to cure.
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC.
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Phase
I
(Market
Uptake Phase)
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The
primary purpose of the Phase I is to allow for mutual evaluation
of the
“in-market” clinical experience, projected full market demand, and
reimbursement rates of the Product in the M.D. Office Market.
Attached
hereto as Exhibit
A-1
is
the timetable of Phase I activities that is currently contemplated
by the
parties (the “Phase
I Timetable”).
Pursuant to the Phase I Timetable, the parties will introduce the
Product
into specific segments of the M.D. Office Market, selected by LabCorp.
The
parties will cooperate in good faith regarding any necessary adjustments
to the Phase I Timetable; provided,
however,
that in no event will Phase I extend beyond May 31, 2008 unless agreed
to
by the parties in writing in their sole discretions.
The
parties will capture and measure key metrics during Phase I, as outlined
in Exhibit
A-2
attached hereto (the “Phase
I Metrics”),
to predict future market adoption and penetration rates, and aid
in
determining Phase II commercial options and terms, in particular
exclusivity minimums. Promptly after the date of this Agreement,
the
parties will work together to develop the methodology for collecting
and
measuring the Phase I Metrics, with the plan to be finalized in accordance
with the timelines set forth in Exhibit
A-1.
[*]
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Phase
II
(Expanded
Market Phase)
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Upon
compilation and review of all relevant Phase I Metrics and other
Phase I
data [*], the parties will enter into a 60 day negotiation period
for the
terms and conditions of an addendum to this Agreement covering Phase
II
with the following options: (i) terminate commercial activity, (ii)
trigger a market exclusivity arrangement based on minimum purchases
of
Product or (iii) continue with a non-exclusive arrangement, subject
to
mutual agreement as to terms and conditions. [*]
The parties acknowledge that this model may be in the form of a licensing
arrangement, or an arrangement whereby LabCorp purchases the product
from
Vyteris for distribution to its clients and/or PSCs, subject to relevant
regulatory and legal guidelines.
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CERTAIN
CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH
THE SECURITIES AND EXCHANGE COMMISSION.
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC.
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M.D.
Office Market Exclusivity
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Phase
I Exclusivity.
During Phase I, Vyteris will not permit any third party to market
the
Product in the M.D. Office Market.
§
Vyteris
Specialty Sales Initiative.
For the avoidance of doubt, Vyteris’s in-house sales force will be free to
conduct marketing and sales activity in accordance with Vyteris’s
Specialty Sales Initiative (consisting of approximately 12 sales
people
covering: (i) medical specialties not included in the M.D. Office
Market
and/or (ii) geographical areas not covered by LabCorp sales
representatives in Phase I. Vyteris will keep LabCorp informed of
any
leads in the M.D. Office Market for LabCorp services in geographical
areas
covered by Vyteris sales representatives, and will provide LabCorp
with
the opportunity to follow up on such leads. Vyteris will share data
with
LabCorp regarding its Specialty Sales Initiative experiences during
Phase
I as an additional data point for consideration by the parties in
their
negotiations regarding Phase II.
Phase
II Exclusivity.
If
the parties enter into an exclusive relationship for Phase II, LabCorp
will maintain full exclusivity in the M.D. Office Market, subject
to
LabCorp committing to certain annual purchase order amounts and paying
certain license fees, all to be specified in an Addendum to this
Agreement
to be agreed to by the parties in writing (the “Exclusivity
Conditions”). [*]
If exercised, the exclusivity would continue on a year-to-year
basis, subject to non-renewal by Vyteris each year if LabCorp has
failed
to meet the Exclusivity Conditions applicable to the preceding year.
LabCorp may also elect to not renew exclusivity. If either party
elects to
non-renew exclusivity, it shall provide written notice to the other
party
not less than thirty (30) days prior to the anniversary renewal date.
LabCorp will not have any rights to reinstate exclusivity in the
event
exclusivity is not renewed.
General.
The parties agree and understand that exclusivity will only apply
to the
marketing of the Product in and to the M.D. Office Market, and that
Vyteris will not enter into a Market Evaluation or Marketing and
Supply
Agreement with any other individual or entity for the Product for
the M.D.
Office Market.
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CERTAIN
CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH
THE SECURITIES AND EXCHANGE COMMISSION.
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC.
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Option
to Add PSC Market Exclusivity
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In
addition to the M.D. Office Market, at
such time as applicable regulations permit, LabCorp may elect to
exercise
an option for the exclusive right to offer the Product to the Patient
Service Center market (the “PSC
Market”)
and to Contracted Draw Sites which would be permitted to administer
the
device pursuant to applicable regulations. This option will expire
unless
LabCorp elects to exercise the option by written notice to Vyteris
on or
before the end of the 60 day negotiation period for Phase II terms
(noted
above), (the “PSC
Market Option End Date”),
even if the required regulatory approvals have not been obtained
by that
date.
[*]
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LabCorp
Responsibilities
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During
Phase I:
·
LabCorp
will provide Vyteris with adequate commitment, management support,
and
resources to insure an initial market entry program to enable a proper
evaluation of a potential full market roll out.
·
LabCorp
will assign a member of the LabCorp Executive Committee (Executive
Vice
President Sales and Marketing or delegate) to work with the Vyteris
President (or delegate) co-chairing monthly operational reviews of
the
project and its progress.
·
LabCorp
will identify medical doctor office practices which LabCorp sales
management indicate are viable locations for use and evaluation of
the
Product (“Market
Evaluation Sites”).
·
LabCorp
sales staff and, where applicable, in-office phlebotomists, will
work with
Vyteris to introduce the Product to the Market Evaluation Sites and
to
facilitate the use and evaluation of the Product in those sites.
The
parties agree and acknowledge that LabCorp’s in-office phlebotomists will
not administer the Product, but will work with the office staff to
incorporate the Product into the specimen collection process.
·
LabCorp
will regularly communicate with Vyteris re: customer inquiries, feedback
from customers and third-party payors and other issues relevant to
distribution and use of the Product.
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CERTAIN
CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH
THE SECURITIES AND EXCHANGE COMMISSION.
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC.
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Vyteris
Responsibilities
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During
Phase I:
·
Vyteris
will provide the Product to the Market Evaluation Sites.
·
All
distribution, billing, and customer service will be provided by a
3rd
party distribution company under Vyteris management.
· Vyteris
will provide commercially reasonable training and support of LabCorp
phlebotomists and sales force and applicable office practice staff
in the
Market Evaluation Sites, consisting of:
- “Live”
training sessions,
- In-practice
training sessions,
- Evaluation
Packets of the Product to Market Evaluation Sites, which will contain
a
limited supply of Product samples, and
- Support
Website with training videos.
·
Vyteris
will provide a 24/7 support hotline for LabCorp phlebotomists, LabCorp
sales force, office practice staff, and consumers.
·
Vyteris
will provide all FDA required support and reporting (ADR’s), sample
tracking, etc.
·
Vyteris
will maintain product liability insurance coverage in the amount
of
$5,000,000 per incident.
·
Vyteris
will regularly communicate with LabCorp re: customer inquiries, feedback
from customers and third-party payors and other issues relevant to
distribution and use of the Product.
·
Vyteris
will provide a reimbursement “hotline” to triage reimbursement questions
and issues, and will be responsible for guidance to Market Evaluation
Sites on such issues.
·
Vyteris
will provide “on the ground” executive management support on each of the
regions to work with LabCorp regional management.
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC.
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Product
Pricing; Distribution
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·
Estimated
Market Pricing:
[*]
· Sales
Effort Fee Reimbursement to LabCorp: LabCorp
will receive a payment of [*] for each physician office that agrees
to
participate in the Phase I Market Uptake evaluation, to compensate
it for
the time, effort and energy expended [*] The parties agree
that this fee represents the Fair Market Value for such efforts by
LabCorp.
·
Distribution:
To
be handled by third party distributor (e.g., Cardinal Health), per
terms
of agreement between Vyteris and the distributor.
·
Practice
Billing for Product Provided in Evaluation Packet:
Vyteris will provide guidance to Market Evaluation Sites regarding
billing
for administration of Product that was provided in the Evaluation
Packet
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Training
and Promotional Materials
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Vyteris
will pay for all base creative and training material creation and
for
direct costs of out-of-pocket reproduction of materials for phlebotomists,
sales force, and/or any M.D. office materials with LabCorp brand.
These
budgets will be agreed to by LabCorp and Vyteris management committee
before being expended.
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Branding
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The
Product will be Vyteris-branded. .
LabCorp
retains rights and option to elect LabCorp branding or co-branding
with
Vyteris if LabCorp moves to an exclusive status in Phase II.
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Confidentiality
of Terms
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The
financial terms of this Agreement shall remain confidential, except
as
disclosure may be required by applicable laws or to outside advisers
with
a reasonable need to know such information.
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CERTAIN
CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH
THE SECURITIES AND EXCHANGE COMMISSION.
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC.
Exhibit
A-1
Phase
I Timetable
May
16,
2007: First Joint Sales/Operational Team Meeting
May
15 -
June 15, 2007: Sales Advisory Meetings (Personal)
June
15:
Assessment Accounts and Areas Identified
July
1:
Metric Methodology Plan Finalized
July
15,
2007: Initial Product Distribution Stocking
August
1,
2007: Official MD Office Program Kick-off
[*]
May
1,
2008 - Execution of Phase II agreement, commencement of Expanded Market
Penetration Phase (or sooner upon completion of Phase II agreement)
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CERTAIN
CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH
THE SECURITIES AND EXCHANGE COMMISSION.
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC
Exhibit
A-2
Phase
I Metrics
The
parties will work together to mutually agree on the methodology to identify
and
collect the quantitative data (“Metrics”) needed to fully evaluate the use and
acceptance of the Product by the Market Evaluation Sites to determine whether
and how to move forward into Phase II.
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·
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Phase
I Metrics:
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| [*] | ||||
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CERTAIN
CONFIDENTIAL INFORMATION ON THIS PAGE HAS BEEN OMITTED AND FILED SEPARATELY
WITH
THE SECURITIES AND EXCHANGE COMMISSION.
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LABORATORY
CORPORATION OF AMERICA HOLDINGS
VYTERIS,
INC.
Exhibit
B
Initial
Vyteris Press Release
[To
be
finalized by mutual agreement of the parties]
Page
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