Amendment No. 1 to DEVELOPMENT AND LICENSE AGREEMENT
Exhibit
10.7
Amendment
No. 1 to
THIS
AMENDMENT NO. 1 TO THE DEVELOPMENT AND LICENSE AGREEMENT (“Amendment No.
1”)
is
entered into by and between Auxilium Pharmaceuticals, Inc., a company
incorporated under the laws of Delaware with offices at 000 X. Xxxxxxxxxx Xxxx,
Xxxxxxxxxx, XX 00000 and its Affiliate (collectively, “Auxilium”) and
BioSpecifics Technologies Corp. a company organized and existing under the
laws
of the State of Delaware with offices located at 00 Xxxxxx Xxxxxx, Xxxxxxxx,
Xxx
Xxxx 00000 and its Affiliates (collectively, “BTC”).
Whereas,
Auxilium and BTC (the “Parties”)
have
entered into that certain Development and License Agreement dated June 3, 2004
(the “License Agreement”); and
Whereas,
the
Parties desire to amend the License Agreement in various respects.
NOW,
THEREFORE,
for
good and valuable consideration, AND
INTENDING TO BE LEGALLY BOUND,
BTC and
Auxilium hereby agree as follows:
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1.
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AMENDMENTS
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1.1 SECTION
1.4. The following sentence shall be added to Section 1.4 of the License
Agreement:
“For
purposes of clarity, Auxilium Holdings Inc. is an Affiliate of Auxilium
Pharmaceuticals, Inc. and Advance BioFactures of Curacao, NV and Advance
BioFactures Corporation are Affiliates of BioSpecifics Technologies, Inc. and
such Affiliates are parties to this Agreement.”
1.2 Section
6.1. Section 6.1(a) of the License Agreement is hereby deleted in its entirety
and replaced with the following language:
“6.1
Joint
Manufacturing Committee.
(a) BTC
and
Auxilium will establish a Joint Manufacturing Committee (the “JMC”) made up of
two (2) representatives designated by each Party hereto which shall oversee
the
scale-up and manufacturing of Product on a worldwide basis, including the
planning, manufacturing and supply (including supply chain management). Each
of
BTC and Auxilium shall have one vote on the JMC. The objective of the JMC shall
be to reach agreement by consensus on all matters falling within its authority
hereunder. In the event of a deadlock with respect to any action involving
or
related to the manufacture of clinical supplies of Product, the vote of
Auxilium, after reasonable opportunity for open discussion among the members
of
the JMC, shall control. In the event of a deadlock with respect to any action
involving or related to the manufacture of commercial supplies of Product,
the
vote of Auxilium after reasonable opportunity for open discussion among
the
members
of the JMC shall control until such time as BTC is providing Auxilium with
fifty
percent (50%) of its commercial supplies pursuant to the terms of this
Agreement. At that point, in the event of a deadlock with respect to any action
involving or related to the manufacture of commercial supplies of Product,
the
vote of BTC after reasonable opportunity for open discussion among the members
of the JMC shall control.
1.3 SECTION
6.2. Section 6.2 of the License Agreement is hereby deleted in its entirety
and
replaced with the following language:
“6.2
Development
and Scale Up.
Auxilium shall, at its own cost and expense, utilizing the Back-Up Supplier
(defined below),
develop the formulation and the finished dosage form and scale up the
Manufacture for clinical supply of the Enzyme and the Product for each
Indication for use in the Field, including the lyophilized injection
formulation, to be registered with Regulatory Authorities in accordance with
Law
and in sufficient time prior to anticipated commercial launch of a Product
to
provide for sufficient Supply of Product for use in the Field. Auxilium will
have the sole right and responsibility for selecting the finished dosage form
and presentation for the Product in the Field. The costs paid to third parties
to develop the lyophilization of the injection formulation shall be shared
equally by the Parties.
1.4 SECTION
6.3. Section 6.3 (a) through (c) of the License Agreement are hereby deleted
in
their entirety and replaced with the following language:
“6.3
Clinical
Supply.
(a) Back-Up
Suppliers.
Auxilium shall qualify one or more back-up suppliers for the Manufacture of
clinical and commercial supplies of Product in the Field promptly after the
Effective Date (the “Back-Up Suppliers”.) For purposes of clarity, the term
Back-Up Suppliers shall include one or more entities in the supply chain, as
may
be necessary to Manufacture Product for clinical and/or, if applicable,
commercial use. Auxilium’s agreement(s) with the proposed Back-Up Suppliers
shall be consistent with the respective rights and obligations of Auxilium
and
BTC hereunder and a copy of which, redacted with respect to financial terms,
shall be provided to BTC upon the execution of this Agreement and promptly
after
the execution thereof, as to any such agreements executed after the date hereof.
BTC will use Commercially Reasonable Efforts to provide such Back-Up Suppliers
with sufficient know-how to Manufacture Product, including (i) providing all
protocols, registration applications and other substantive regulatory documents,
including, but not limited to, all data, scientific dossiers and governmental
authorizations; (ii) providing access and reference to all regulatory dossiers
and filings produced by BTC, its Affiliates and sublicensees relating to the
Product; (iii) providing access to BTC Know-How in reasonably satisfactory
form,
and (iv) providing all technical assistance reasonably requested by the Back-Up
Suppliers related to the Manufacture of the Product. Auxilium will require
that
the Back-Up Suppliers execute a written confidentiality agreement with Auxilium
and a written materials transfer agreement with BTC, in a form reasonably
acceptable to BTC and consistent with industry standards, which includes, among
other things, an undertaking by the Back-Up Suppliers to keep confidential
the
Manufacturing and Product information and know-how disclosed to the Back-Up
Suppliers by BTC. In addition,
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Auxilium
will require and the Back-Up Suppliers shall be obligated promptly to provide
BTC and Auxilium with such information and know-how whether patentable or not
concerning the Manufacture of the Product that Back-Up Suppliers may develop
or
acquire from time to time in connection with such Manufacture and the Product,
except for information and know-how unrelated to the Manufacture of the Product
that is proprietary to the Back-Up Suppliers (“Back-Up Suppliers’ Proprietary
Information”). Such information may be utilized by BTC and Auxilium, without
cost or other obligation to the Back-Up Supplier, consistent with the terms
of
this Agreement.
(b) Supply
Obligations.
During
the Term Auxilium is entitled to and shall be responsible for arranging, through
the Back-Up Suppliers, for the supply of all Product for use by Auxilium in
Clinical Trials. After the Effective Date, Auxilium shall purchase, at its
own
cost and expense, sufficient quantities of the Product to conduct all of its
requisite Clinical Trials from the Back-Up Suppliers.
(c) BTC
shall
have the right to purchase and Auxilium shall sell to BTC, at Auxilium’s cost
therefore, such supplies of Product as BTC may require for pre-clinical and
clinical trials approved by JDC and such other non-preclinical and non-clinical
purposes (i.e. process development, manufacturing and related activities) as
are
consistent with BTC’s rights under this Agreement. Auxilium will invoice BTC for
the costs associated with such supplies which will be payable by BTC within
sixty (60) days of receipt.
1.5 SECTION
6.4. Section 6.4 (a) is hereby deleted in its entirety and replaced with the
following language:
“6.4
Commercial
Supply; Supply Agreement.
BTC
shall have the option (the “Supply Option”) exercisable no later than six (6)
months after FDA approval of the first NDA or BLA with respect to a Product.
(the “Approval Date”) to assume the right and obligation to supply or arrange
for the supply, from a third party other than the Back-Up Suppliers, of that
portion of commercial quantities of the Product in the Territory described
below
(the “BTC Supply Portion”). Auxilium and BTC shall each keep the other
reasonably informed of their respective progress in securing FDA approval of
the
appropriate BLA or NDA and the timing thereof and other relevant matters
affecting the contemplated supply by BTC of commercial quantities of the
Product. Upon the Approval Date, Auxilium shall withhold $<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION>
of
Milestone No 4 (the “the Retention Amount”) until BTC notifies Auxilium of its
decision regarding the exercise of the Supply Option. If BTC exercises the
Supply Option, Auxilium will retain the Retention Amount until the sooner of
(1)
date on which an agreement between BTC and a third party contractor is executed
for the commercial manufacture of the Product for the benefit of Auxilium which
contains milestones requiring such contractor to successfully complete
validation batches for the Product on or before the Supply Date, a copy of
which, with financial information redacted, will be provided to Auxilium; or
(2)
the date on which BTC commences construction by breaking ground for a cGMP
facility for the commercial manufacture of Product for the benefit of Auxilium,
provided, however that construction plans and timelines for such facility shall
be promptly provided to Auxilium prior to commencement of such construction.
If
BTC does not exercise the Supply Option, the Retained Amount will
be
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released
to BTC within thirty (30) days after BTC notifies Auxilium in writing of its
decision not to exercise the Supply Option. If BTC exercises the Supply Option,
commencing on the date 3.75 years from the Approval Date (the “Supply Date”) BTC
shall be responsible for supplying Auxilium either itself or through a third
party other than the Back-up Supplier and Auxilium shall purchase from BTC
the
BTC Supply Portion of Auxilium’s requirements of commercial supplies of Product
during the Term. If BTC does not exercise the Supply Option, Auxilium shall
be
responsible for arranging for all commercial supplies of Product during the
Term. Except as specifically provided otherwise in the Agreement, in no event
shall BTC Manufacture or supply the Enzyme or Product to any third party. In
the
event BTC exercises the Supply Option, the Parties shall use Commercially
Reasonable Efforts to enter into a commercial supply agreement on customary
and
reasonable terms and conditions which are not worse than those with the Back-Up
Suppliers, within six (6) months after the Supply Option is exercised (the
“Supply Agreement”). For the purposes of this Agreement “BTC Supply Portion”
shall mean the following amounts for each of years 1 through 4 commencing on
the
Supply Date (“Year 1” through “Year 4” respectively):
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·
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Year
1— an amount less than or equal to <OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
percent (<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
%)
of Auxilium’s commercial requirements for Product
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·
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Year
2— an amount less than or equal to <OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
percent (<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
%)
of Auxilium’s commercial requirements for Product
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·
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Year
3— an amount less than or equal to <OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
percent (<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
%)
of Auxilium’s commercial requirements for Product
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·
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Year
4— an amount less than or equal to <OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
percent (<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
%)
of Auxilium’s commercial requirements for Product
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If
BTC
exercises the Supply Option, Auxilium will cooperate with BTC in the latter’s
efforts to secure FDA approval of BTC, or its designee, as an FDA approved
supplier of commercial supplies of the Product, including, without limitation,
by providing timely access to relevant manufacturing and regulatory data from
the Back-Up Suppliers, permission to cross file to Auxilium’s NDA, as
appropriate.
4
(a) Royalty.
Auxilium will pay BTC on a country-by-country and Product by Product basis
a
royalty payment of <OMITTED AND FILED SEPARATELY WITH THE SECURITIES
AND EXCHANGE COMMISSION> percent (<OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION> %) of Net
Sales of Products in the Field for the Term in respect of any sale of Product
Manufactured by or on behalf of BTC. In the event BTC elects not to exercise
the
Supply Option, Auxilium will pay BTC on a country-by-country and Product by
Product basis a royalty payment equal to <OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION> percent
(<OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION> %) of Net Sales of Products in the Field for the Term,
provided, however, that in the event BTC exercises the Supply Option and
Auxilium thereafter exercises its Stand-By Rights pursuant to Section 6.4 (d)
(formerly 6.4(c)) of the Agreement, the <OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION> % Royalty payable
hereunder shall not apply for so long as and to the extent BTC fails to supply
ordered commercial quantities of the Product, i.e., the <OMITTED AND
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION> %
Royalty shall not be payable on that portion of Product ordered from and
supplied by the Back-Up Suppliers up to the quantity of Product ordered from
but
not supplied by BTC. Any royalty payable hereunder may be reduced as follows:
(i) Competing
Product Sales.
If
during a period that BTC is not supplying commercial quantities of the Product
a
Competing Product is sold in a country in the Territory with a unit based market
share of <OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
% or
greater, then the royalty due for sales in that country in the Territory shall
be reduced to <OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
percent
(<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
%) of
Net Sales of Products in that country in the Territory.
(ii) Third
Party Royalties.
If the
Manufacturing, Development or Commercialization of the Product by the Parties
in
accordance with this Agreement would, but for a license from such Third Party,
infringe on such Third Party Patents, any royalties or other payments due to
Third Parties pursuant to a license acquired by Auxilium then the royalty may
be
reduced by up to <OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
% of
such royalty to compensate for payments to such Third Parties but in no event
shall royalties payable to BTC be reduced by more than <OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
percent
(<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
%) in
any case.”
(iii) Payment
of Royalties.
Royalties under this Agreement shall be paid within thirty (30) days in the
case
of no sublicense and sixty (60) days in case of royalties received from a
sublicensee, following the last day of the Calendar Quarter in which the
royalties and other amounts accrue.
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In
addition, 6.4(b) (i) shall be deleted in its entirety and replaced with the
following language:
“(i)
Supply
Price.
In
event BTC exercises the Supply Option, the Supply Agreement shall afford
Auxilium supply terms for Year 1 that are not less favorable than the average
price afforded to Auxilium by the Back-Up Suppliers for the year immediately
preceding the Supply Date and supply terms for each successive year that are
not
less favorable than the average price afforded to Auxilium by the Back-Up
Suppliers for each preceding year as applicable.”
In
addition the following language shall be added to Section 6.4:
“(c)
Additional
Payment.
In
addition to the royalty payments to be made to BTC under Section 6.4(a),
Auxilium shall pay to BTC an amount equal to a <OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
percent
(<OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
%)
xxxx-up of the Cost of Goods, as set forth in Schedule 1.16, in respect of
any
sale by Auxilium of Product that is not Manufactured by or on behalf of BTC
provided, however, that in the event BTC exercises the Supply Option and
Auxilium thereafter exercises its Stand-By Rights pursuant to Section 6.4 (d)
(formerly 6.4(c)) of the Agreement, the <OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION>
%
xxxx-up payable hereunder shall not apply for so long as and to the extent
BTC
fails to supply ordered commercial quantities of the Product as provided in
Section 6.4 hereof.”
In
addition, the remaining paragraphs of Section 6.4 are renumbered as appropriate.
In
addition the following language is added to Section 6.4 (d) [formerly Section
6.4 (c)].
“(iv)
Inability
to Manufacture.
In the
event that BTC after exercising the Supply Option, becomes unable to Manufacture
the Product or to furnish Product to Auxilium that is Manufactured on BTC’s
behalf for any reason including, without limitation, as a result of a force
majeure, Auxilium will be entitled, upon written notification to BTC, to seek
all of its requirements of Product from the Back-Up Suppliers until such time,
if any, as BTC, or another party on BTC’s behalf, shall re-commence Manufacture
of the Product; provided, however, that in the event BTC either itself or
through a third party re-commences the Manufacture of Product, Auxilium’s
obligation to purchase some or all of the Product from or through BTC shall
be
subject to Auxilium’s contractual obligations to the Back-Up Suppliers. BTC
shall notify Auxilium as soon as practical in advance of its intent to
recommence the manufacture of the Product. After BTC has given the notice,
the
Parties shall negotiate in good faith the specifics of the transfer process
such
as timing of transfer and gradual increases of quantities manufactured by BTC
over time. The transfer shall afford Auxilium supply terms that are not less
favorable than those afforded to Auxilium by the Back-Up Suppliers and
sufficient time to scale down the manufacture of Product by the Back-Up
Suppliers.
1.6 SECTION
7.2. Section 7.2 (c) is hereby deleted in its entirety and replaced with the
following language:
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BTC
will
immediately, but in no event later than June 30, 2005, use the proceeds of
Milestone No. 3 to pay off its debts in their entirety (including the principal
and accrued interest) owed to BioPartners LP and Korpodeko thereby releasing
all
real, personal, tangible and intangible property and/or other assets, of BTC
including, without limitation patents and all other intellectual property
rights, identified in and/or used as a collateral against the loans granted
by
BioPartners and Korpodeko (collectively the “Released Collateral”). In addition,
BTC shall immediately, but not later than June 30, 2005 take all necessary
steps
and file all necessary documents to remove and/or otherwise clear any liens,
security interests or other encumbrances on the Released Collateral.
1.7 SECTION
8. Section 8.1 is hereby deleted in its entirety and replaced with the following
language:
8.1
“BTC
Patentable Inventions and Know-How.
(a) Patent
Prosecution.
(i) During
the term of the Agreement, Auxilium shall, on behalf of BTC and in the
reasonable exercise of its commercial discretion, prepare, file, prosecute,
maintain, renew and defend BTC Patents in the countries where such BTC Patents
are filed as of the Effective Date and any new patents directly relating to
the
Enzyme or Product.
(ii) If
Auxilium does not intend to file for patent protection or does not wish to
continue preparation, prosecution, or maintenance of a BTC Patent, then it
shall
give at least thirty (30) days advance notice, and in no event less than a
reasonable period of time for BTC to act.
(A) In
such
case, BTC may elect at its sole discretion to continue preparation, filing
and
prosecution or maintenance of the discontinued BTC Patent at its sole expense.
(B) Discontinuance
may be elected on a country-by-country basis or for a patent application or
patent series in total.
(b) Cooperation.
BTC
will cooperate with Auxilium and provide Auxilium with all necessary assistance
and documentation in connection with the filing prosecution and maintenance
of
BTC Patents. Auxilium will consult with BTC and will keep BTC informed of all
matters relating such filing, prosecution and maintenance of BTC Patents.
Auxilium will provide BTC with copies of intended filings in advance and will
consider BTC’s comments in good faith.
(c) Fees
and Expenses.
(i) Fees
and
Expenses which Auxilium is incurs while filing prosecuting and/or maintaining
BTC Patents as provided in section 8.1. (a) shall be handled as follows:
7
(A) Auxilium
shall pay one hundred percent (100%) of fees and expenses in connection with
patents for the Product in the Field and/or in connection with Additional
Indications which for which Auxilium has exercised the Additional Indication
Option pursuant to Section 2.2; provided, however, that fifty percent (50%)
of
such fees and expenses will be credited against future royalties payable by
Auxilium on Net Sales of the Product.
(B) In
the
event Auxilium declines to exercise the Additional Indication Option with
respect to any Additional Indication and BTC either by itself or pursuant to
an
Agreement with a Third Party (a “Partner Agreement”) pursues such Additional
Indication, BTC shall reimburse Auxilium for one hundred percent (100%) of
fees
and expenses in connection with the filing, prosecution and/or maintenance
of
all patents pertaining to each such Additional Indication as follows:
(1) In
the
event BTC pursues any such Additional Indication pursuant to a Partner
Agreement, BTC shall reimburse Auxilium in full upon execution of such Partner
Agreement.
(2) In
the
event BTC pursues any such Additional Indication itself, BTC shall reimburse
Auxilium in full on the date BTC first initiates further development activity
with respect to any such Additional Indication.
1.8 SECTION
9. Section 9(b) is hereby deleted in its entirety and replaced with the
following language:
“(b)
As
of the Effective Date BTC is the owner or licensee of BTC Patents and BTC Know
How and all other rights necessary to make, use and sell all technology covered
by the BTC Patents. BTC has the full right power and authority to grant the
licenses and other rights granted to Auxilium and the granting of the licenses
and other rights to Auxilium hereunder does not violate any right known to
BTC
of any Third Party.”
In
addition, Section 9(h) is hereby deleted in its entirety and replaced with
the
following language:
“(h)
BioSpecifics Technologies, Corp is duly organized and validly existing under
the
laws of the state of Delaware and its Affiliates are validly existing under
the
laws of the jurisdiction of their respective incorporation and have full legal
power and authority to enter into this Agreement; and”
1.9 SECTION
11.4. The following language is hereby added to Section 11.4:
“(b)
Auxilium may terminate this Agreement immediately upon written notice to BTC,
given on or prior to September 30, 2005, provided that Auxilium has determined,
in the good faith exercise of its reasonable business judgment, after a
technical transfer to its Back-Up Supplier pursuant to Section 6.3, that no
viable Product is or can be made available. For purposes of clarity, a
non-viable Product is one that cannot be produced in
8
commercially
reasonable quantities, using Commercially Reasonable Efforts and at commercially
reasonable costs and/or cannot be characterized as comparable to the Product
or
Enzyme used in pre-clinical and clinical trials conducted by or on behalf of
BTC
prior to the Effective Date of the License Agreement.”
1.10 Section
13.1 shall be deleted in its entirety and replaced with the following language:
“13.1
Dispute
Resolution.
In the
event of any controversy or claim arising out of relating to or in connection
with any provision of this Agreement, or the rights or obligations hereunder,
the Parties shall try to settle their differences amicably between themselves
through good faith negotiations. If they are unable to resolve the dispute
within thirty (30) days of initiating such negotiations, the Parties agree
first
to submit the dispute to non-binding mediation before resorting to litigation
or
other mutually agreed dispute resolution mechanism. The dispute resolution
procedures set forth herein shall not limit a court from granting a temporary
restraining order or a preliminary injunction in order to preserve the status
quo of the Parties pending arbitration or to protect a Party’s trademark or
confidential or proprietary information.”
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2.
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EFFECTIVE
DATE OF AMENDMENT
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This
Amendment No. 1 shall be effective as of the Effective Date of the Agreement.
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3.
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MISCELLANEOUS
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Except
as
expressly provided to the contrary in this Amendment No. 1 all other
definitions, terms and conditions of the License Agreement shall continue in
full force and effect.
IN
WITNESS WHEREOF,
the
parties hereto have executed this Amendment No. 1 by their duly authorized
officers as of the date set forth below.
ACCEPTED
AND APPROVED BY AND BETWEEN:
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Auxilium
Pharmaceuticals Inc.
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By:
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/s/
Xxxxx X. Xxxxxx
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By:
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/s/
Xxxxxxxxx X. Xxxxxxx
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Name:
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Xxxxx
X. Xxxxxx
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Name:
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Xxxxxxxxx
X. Xxxxxxx
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Title:
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President
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Title:
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Chief
Executive Officer
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Date:
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May
10, 2005
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Date:
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May
10, 2005
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