Exhibit 10.15
THIS AGREEMENT is made this 25th day of July 2002 between:
(1) AVECIA LIMITED, acting through its Avecia Biotechnology business of Xxxxxxx
Xxxxx, Xxxxxxxx, Xxxxxxxxxx, X0 0XX, Xxxxxxx ("Avecia"); and
(2) INSMED INCORPORATED of 0000, Xxxx Xxxxx Xxxxx, Xxxx Xxxxx, XX 00000, XXX
("Insmed").
WHEREAS
A Avecia has experience and knowledge with regard to process development and
manufacture of recombinant proteins.
B Insmed is carrying out research and development in relation to the Product
(as defined below) with a view to conducting clinical trials and commercial
launch of a new drug.
C Insmed wishes Avecia to carry out a programme for the further development,
scale up and manufacture of the End Product to support clinical trials and
future commercial launch of new drugs.
D The Feasibility Study (as defined below) was commenced under the Letter of
Intent and it is intended that the Feasibility Study, the Development
Programme and the GMP Stage (all as defined below) shall be carried out and
completed under the terms of this Agreement.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. Definitions:
Affiliate any corporation, association or other
business entity which directly or indirectly
controls, is controlled by or is under
common control with Avecia or Insmed and
"control" shall mean the legal power to
direct or cause the direction of the general
management and policies of such entity
whether through the ownership of at least
50% of voting securities or capital stock of
such business entity or any other comparable
equity or ownership interest with respect to
a business entity other than a corporation.
Avecia Default failure by Avecia to progress the
Programme (including without limitation
failure to use GMP) and any other failure to
discharge its obligations hereunder, or
negligence or wilful malfeasance by Avecia
in carrying out the Programme, except that
discovery of a factor which affects the
Process or production of the End Product
which was not known and could not reasonably
have been known at the commencement of the
Programme shall not be considered to be an
Avecia Default.
- 1 - CONFIDENTIAL
Background any Intellectual Property owned by or in the
Intellectual possession of a party (and to
Property which that party has the necessary
rights) at the Commencement Date of this
Agreement or Intellectual Property developed
independently of the Programme by any
employee of that party without reference to
any of the Confidential Information
disclosed by the other party.
Cancellation Fee a sum calculated in accordance with
Schedule 7, payable on termination in
respect of cancellation of the GMP Stage.
Cell Banks the Master Cell Bank and the Working
Cell Bank together.
Commencement 12th November 2001.
Date
Completion completion of the Programme as defined in
Clause 2.2.
Confidential any technical and commercial information
Information relating Information to the Programme and
any other information of a confidential
nature disclosed (whether disclosed in
writing, verbally, by way of sample or by
any other means and whether directly or
indirectly) by either party ("the Disclosing
Party") to the other ("the Receiving
Party"), including and without limitation
any information relating to the Disclosing
Party's business affairs.
Confidentiality the confidentiality agreement entered into
Agreement between the parties dated 10th May 2001.
Defective Product a quantity of the End Product which
does not comply with the appropriate
Specification or which has not been
manufactured in accordance with ISO9001 or
GMP, as appropriate.
Development the programme for development and scale up
Programme of the Process intended to be used
during the GMP Stage as outlined in Schedule
5 and as amended in accordance with the
provisions of Clause 2.5.
End Product SomatoKine(R), being a combination
of insulin-like growth factor-I (IGF-1) and
insulin-like growth factor binding protein-3
(BP3) or BP3 individually, when produced to
Insmed's Specification under Schedule 1 as a
drug substance.
Feasibility the study to ascertain the feasibility of
Study developing the existing process to
manufacture the End Product foruse in Phase
II and Phase III clinical trials and
commercial scale as outlined in Schedule 4
and as amended in accordance with the
provisions of Clause 2.5.
- 2 - CONFIDENTIAL
Force Majeure any cause beyond the reasonable control of
the party in question which for the
avoidance of doubt and without prejudice to
the generality of the foregoing shall
include governmental actions, war, riots,
civil commotion, fire, flood, epidemic,
labour disputes (excluding labour disputes
involving the work force or any part thereof
of the party in question), restraints or
delays affecting shipping or carriers,
currency restrictions and act of God.
GMP current good manufacturing practice and
standards as provided for (and as amended
from time to time) in European Community
Directive 91/356/EEC (Principles and
guidelines of good manufacturing practice
for medicinal products) and in the Current
Good Manufacturing Practice Regulations to
the US Code of Federal Regulations Title 21
as referenced in Schedule 9 in relation to
the production of pharmaceutical
intermediates and active pharmaceutical
ingredients, as interpreted by ICH
Harmonised Tripartite Guideline, Good
Manufacturing Practice Guide for Active
Pharmaceutical Ingredients, Q7A and subject
to any arrangements, additions or
clarifications agreed from time to time
between the parties in the QA Agreement.
GMP Stage manufacture of the End Product at [REDACTED]
litre scale in accordance with GMP in
Avecia's Advanced Biologics Centre as
outlined in Schedule 6 and as amended in
accordance with the provisions of Clause
2.5.
Insmed Products, End Product, rhIGF-1 and rhIGFBP3
Materials protein samples, cell banks and all other
associated project materials.
Intellectual all know-how, inventions, discoveries,
Property devices, data, patents, designs, copyrights,
or other industrial or intellectual property
in all applications therefore.
JPMC the joint programme management committee set
up by Avecia and Insmed to oversee the
conduct of the Programme, having the
constitution referred to in Clause 2.6.
Letter of Intent the letter dated 12th November 2001
confirming the terms on which the
Feasibility Study was started by Avecia.
Master Cell Bank the master cell bank produced during the
Development Programme, in accordance with
ICH cell substrate guidelines.
- 3 - CONFIDENTIAL
Milestones the schedule of milestones intended to be
Appendix achieved during the Programme and attached
at Schedules 4, 5 & 6.
New Intellectual Intellectual Property arising during and as
Property a direct result of the Programme.
Nominated any manufacturer other than Avecia,
Manufacturer nominated by or partnered with Insmed to
carry out manufacture of the End Product.
pPoP(TM) System the system for expression of genes in
micro-organisms claimed in patent
application WO9905297 owned by AstraZeneca
AB and licensed (with rights to sublicense)
to Avecia under an agreement between Avecia
and Zeneca Limited (assigned to AstraZeneca
UK Limited) and dated 30th June 1999, and
further developed by Avecia though ongoing
project work.
Process the process for manufacture of the End
Product.
Products Insmed's proprietary proteins, the
derivatives thereof and the respective DNA
coding sequences and constructs, including
Dsb-3C protease, Dsb-3C-IGF-I,
Ubiquitin-3C-IGF-I, rhIGF-I (hereafter
IGF-I), rhIGFBP-3 (hereafter BP-3), and
SomatoKine(R), being a combination of
insulin-like growth factor-I and
insulin-like growth factor binding
protein-3.
Programme the Feasibility Study, the Development
Programme and the GMP Stage.
Programme means a document in the form set out in
Amendment Order Schedule 3 detailing changes to the
Programme or to the Specification agreed and
signed by both parties.
QA Agreement the document agreed by the parties setting
out:
(i) the mutually agreed quality
standards applicable for the
manufacture of the End Product; and
(ii) the roles and responsibilities of
each party's personnel in relation
to quality assurance matters
a copy of which is attached at Schedule 2.
Specification the specification for the End Product to be
manufactured during the Development
Programme and GMP Stage and attached at
Schedule 1, or such revised specification as
may be agreed by the parties in a Programme
Amendment Order and in accordance with the
QA Agreement.
- 4 - CONFIDENTIAL
Technical Transfer communication of Insmed's existing process
for production of the Products to Avecia.
Third Party any person other than the parties or their
respective Affiliates.
Working the working cell bank(s) produced during the
Cell Bank(s) Development Programme or preparatory to
clinical drug substance manufacture, in
either case subject to GMP.
2. Performance of the Programme
2.1 QA Agreement. Avecia will carry out the work as detailed in the
Programme under GMP and its ISO9001 compliant quality system. In order
for Avecia to carry out the Programme, each party shall fulfil its
responsibilities as set out in the QA Agreement.
2.2 Programme Details. The Programme has three stages and shall be
conducted as follows:
(a) Stage 1 - The Feasibility Study
(i) The Feasibility Study commenced on the Commencement Date.
(ii) The Feasibility Study shall be deemed to be complete when
Avecia has notified Insmed that it has completed the
Feasibility Study and delivered to Insmed the material and
documentation set out in the Milestones Appendix in respect
of the Feasibility Study, and such performance is mutually
agreed by the JPMC.
(b) Stage 2 - The Development Programme.
(i) Following completion of the Feasibility Study, the parties
shall jointly determine whether the Feasibility Study has
been successful and indicates that there is scope for
further development of the Process.
(ii) If the parties agree that the Feasibility Study has been
successful, Avecia shall commence the Development Programme,
including the production of the Cell Banks in accordance
with the requirements set out therefor in Schedule 8.
(iii) Subject to Clause 2.2(b)(iv), the Development Programme
shall be complete when Avecia notifies Insmed that it has
completed manufacture of the Product in accordance with the
Specification at [REDACTED] litre scale, tested such
manufactured Product, and provided Insmed with (i)
analytical data in a form to be agreed and (ii) revised cost
models for manufacture of the
- 5 - CONFIDENTIAL
Product at large scale, and such performance is mutually
agreed by the JPMC.
(iv) The parties anticipate that further work will need to be
carried out during the Development Programme, the exact
nature of which is not certain at the date of this
Agreement. Such further work shall be carried out subject to
agreement under Clause 2.5.
(c) Stage 3 - GMP Stage
(i) Avecia shall commence the GMP Stage following completion of
the Development Programme.
(ii) The GMP Stage shall be complete when Avecia notifies Insmed
that it has completed manufacture of the End Product in
accordance with the Specification in its Advanced Biologics
Centre at [REDACTED] litre scale, tested such manufactured
End Product, delivered the End Product so manufactured in
accordance with Clause 4 and provided Insmed with (i) a
certificate of analysis showing that the End Product
manufactured during the GMP Stage accords to the
Specification and (ii) a batch production record on such
activities, and such performance is mutually agreed by the
JPMC.
(iii) The Programme shall be complete when the GMP Stage has been
completed, and the parties have agreed whether the Master
Cell Bank is to be shipped to Insmed or whether it is to be
stored by Avecia under Clause 4.2.
2.3 Conduct of the Programme. For the avoidance of doubt, it shall not be
considered a breach of this Agreement by Avecia if an objective of the
Programme is not achieved:
(a) so long as Avecia uses its best commercial endeavours to perform its
obligations; or
(b) due to delay caused or contributed to by Insmed.
The parties acknowledge that, having regard to the fact that the work to be
performed hereunder is by its nature developmental, Avecia does not
guarantee to Insmed the achievement of each individual milestone, or a
successful outcome for the overall Programme.
2.4 Information Exchange. The parties shall conduct regular information
exchanges in a manner to be agreed between the parties to enable ongoing
review of the Programme and its continuation. Each party shall nominate a
key point of contact for such information exchange. At the date of this
Agreement, the points of contact are as follows:
(a) for Avecia - Dr I Xxxxxxx, Project Manager; and
- 6 - CONFIDENTIAL
(b) for Insmed - Xx. Xxxxxxx Xxxxxx , Project Manager.
2.5 Programme Amendment Orders. The parties may agree to vary any element of
the Programme, including the Specification or sums to be paid under Clause
3, provided that such variation is made in writing in a Programme Amendment
Order. The parties recognise that, in the event that Insmed requires Avecia
to carry out additional or different development work to that specified in
Schedules 4 & 5, the work carried out under the Programme may require
changes which may cause a change in the payments set out in Schedules 4, 5
or 6 appended hereto, as appropriate. The Specification shall be subject to
review and possible revision in accordance with this Clause 2.5, in light
of process experience or pursuant to a requirement of a regulatory
authority.
2.6 Joint Programme Management Committee. Insmed and Avecia shall each appoint
at least two (2) managers to the JPMC. The number of members appointed by
each of Insmed and Avecia may be more than two, but shall always be an
equal number appointed by each party. The committee shall regularly review
progress towards agreed milestones and resolve any issues arising due to
variance from agreed deliverables that cannot be resolved in the normal
course of project team meetings. The JPMC shall make xxxxxxx, timely
efforts to resolve issues to mutual satisfaction and agree upon such
Programme Amendment Orders as are needed to advance the Programme.
If the JPMC cannot reach mutually agreeable resolution on an issue(s)
affecting critical deliverables or associated payments, the matter shall be
referred by the JPMC to the CEO and VP of the respective parties under
Clause 19.2 for final resolution. At the date of this Agreement, the JPMC
members are as follows:
(a) for Avecia - Dr I Xxxxxxx, Project Manager; Xx. Xxxx Xxxxxxx, Key
Account Manager; and Xx. Xxxxx Xxxxx, Project Manager.
(b) for Insmed - Xxxxxx Xxxxxxxx, VP Technical Operations; Xx. Xxxxxx Xx,
Director Biologics Programme; and Xx. Xxxxxxx Xxxxxx, Principal
Scientist.
2.7. Technical Assistance. During the Programme and following Completion, Avecia
will offer reasonable assistance to Insmed in respect of Insmed's
regulatory filing activities for the End Product and the Process both
during and after Completion, subject to payment by Insmed of Avecia's
reasonable expenses agreed to in advance and in writing between the
parties.
2.8 Future Manufacture. At the date of this Agreement, it is the parties'
intention that Avecia shall carry out manufacture of the End Product in
Avecia's Multiplex facility on behalf of Insmed at a commercial scale
following Completion for use in Phase III clinical trials and commercial
launch of the End Product. The parties agree to continue negotiations in
good faith with a view to agreeing the terms of an agreement to
- 7 - CONFIDENTIAL
govern manufacture by Avecia and supply to Insmed of Insmed's and any of
Insmed's licensees' requirements for the End Product as soon as possible
following signature of this Agreement.
3. Payments
3.1 Total Payment Due. In consideration of Avecia carrying out the research,
development, manufacturing and other activities pursuant [REDACTED] to the
Programme, Insmed shall pay to Avecia the sum of [REDACTED] US Dollars
(US$[REDACTED]).
Such sum has been paid and shall be paid in the instalments set out in
Schedules 4, 5 and 6 when Avecia notifies Insmed that the Programme
milestones, with associated benchmarks set out in those Schedules have been
achieved, and such achievement is mutually agreed by the JPMC.
3.2 Stage 1 - Feasibility Study, Major Milestones
(Details and Payments in Schedule 4)
(a) Commencement Fee on Commencement Date. (Paid)
(b) Mutually agreed completion of the Technical Transfer to enable
development work under the Feasibility Study to commence. (Paid)
(c) Completion of construct re-engineering for IGF-I, BP3 and associated
process improvements - see Schedule 4 for details
3.3 Stage 2 - Development Programme, Major Milestones
(Details and Payments in Schedule 5)
(a) Completion of four (4) replicate runs at [REDACTED] litre scale.
(b) Completion of downstream purification process development.
(c) Completion of duplicate runs on downstream purification.
(d) Completion of new construct description on fermentation batch records.
(e) Completion of development and scale up of the Process by carrying out
duplicate runs at [REDACTED] litre scale, with analytical data in a
form to be agreed.
(f) Completion of refined cost sensitivity models and the final
feasibility report.
3.4 Stage 3 - the GMP Stage, Major Milestones (Details and Payments in Schedule
6)
(a) Preparation of Avecia's Advanced Biologics Centre and GMP
documentation and transfer of the Process in order to carry out
development work for production of the End Product in Avecia's
Advanced Biologics Centre.
- 8 - CONFIDENTIAL
(b) GMP manufacture of the End Product.
3.5 Excluded Items. The sums set out in Schedules 4, 5, and 6, pursuant to
Clauses 3.1 - 3.4 above do not include:
(a) any capital costs for new process specific equipment which may be
required to operate the Process; or
(b) costs actually incurred by Avecia for major consumable items
(including, without limitation, costs associated with
chromatography resins, filtration membranes, and chemical raw
material costs) involved in the manufacturing process.
Avecia shall obtain Insmed's approval in writing prior to incurring
such costs in Clauses 3.5 (a) and (b). If such approval is given, the
provisions of Clause 3.6 will apply.
3.6 Fees for Excluded Items. Avecia shall invoice Insmed for further sums
for development work and consultancy to cover management,
administration and quality control activities. These further sums
shall equal the cost which Avecia incurs in respect of capital items
and consumables under Clauses 3.5(a) and (b), plus, in the case of
consumables intended to be used during the GMP Stage, a sum equivalent
to [REDACTED]% of the cost of such consumables and in the case of
capital items requiring validation and installation, a sum equivalent
to [REDACTED]% of the cost of such capital items, subject to Insmed
approval in advance of the associated installation and validation
expenses for capital items.
3.7 Issue of Invoices. Avecia shall issue invoices for the sums set out in
Schedules 4, 5, and 6, pursuant to Clauses 3.1 to 3.4 and 3.6 above as
such sums fall due and Insmed shall pay such sums within 30 days of
the date of the relevant invoice.
3.8 Bank Account Details. All amounts payable to Avecia under this
Agreement shall be paid in US dollars and credited by bank transfer to
Chase Manhattan Bank, New York, for Account Chase Manhattan Bank,
London CHASGB2L), in favour of Avecia Limited trading as Avecia
Biocides, Effects and Fine Chemicals. Account Number 00000000.
3.9 Value Added Tax. All sums payable under this Agreement are stated
exclusive of any VAT which may be payable and which shall be for the
account of Insmed.
4. Delivery of End Product and Cell Banks
4.1 Delivery of Material. Subject to the provisions of Clauses 4.3 and 4.4
in relation to storage, delivery of all material, including the End
Product manufactured during the Programme and reserve samples of the
Cell Banks, will be made EXW Avecia's Billingham facility (Incoterms
2000).
- 9 - CONFIDENTIAL
4.2 Packing. If requested, Avecia shall arrange for packing of the
material delivered under Clause 4.1 at Insmed's expense and shall
comply with all reasonable requirements of Insmed, including GMP in
packing the material. Risk and title in respect of all material
supplied to Insmed under this Agreement shall pass on delivery at
Avecia's Billingham facility.
4.3 Storage of the End Product. Insmed shall have an option to request
that Avecia store the End Product, subject to written agreement on the
terms of such storage, including fees and liability for such storage
provided that, in the event that Insmed exercises such option:
(a) storage shall be at Insmed's expense under conditions to be
agreed in writing; and
(b) storage shall be at Avecia's risk, unless, despite storage in
accordance with the conditions agreed under Clause 4.3(a), the
End Product alters or deteriorates from its condition at the
start of such storage; and
(c) risk of loss in the End Product shall pass in the event of
delivery to Insmed under Clause 4.1 but title will pass on the
later of (i) Avecia's notification that the End Product has
passed the quality assurance release protocols set out in the QA
Agreement or (ii) agreement between the parties that Avecia will
store the End Product.
In the absence of agreement on the terms of such storage, Avecia shall
not be obliged to store the End Product and shall deliver it to Insmed
subject to the provisions of Clauses 4.1 and 4.2.
4.4 Storage of Cell Banks. On completion of the Programme, Insmed
shall have an option to request that Avecia store the Cell
Banks, subject to written agreement on the terms of such
storage, including fees and liability for such storage
provided that, in the event that Insmed exercises such option:
(a) storage shall be at Insmed's expense under conditions to
be agreed in writing; and
(b) storage shall be at Avecia's risk, unless, despite
storage in accordance with the conditions agreed under
Clause 4.3(a), the Cell Banks alter or deteriorate from
their condition at the start of such storage; and
(c) risk of loss in the Cell Banks shall pass in the event of
delivery to Insmed under Clause 4.1 but title shall
immediately vest in Insmed upon creation of the Cell
Banks; and
(d) Avecia shall submit a reserve sample of both the Master
Cell Bank and Working Cell Bank(s) to Insmed, in
accordance with agreed written instructions as to
quantities, shipment and storage conditions, within
thirty (30) days of their creation, at Insmed's risk.
- 10 - CONFIDENTIAL
In the absence of agreement on the terms of such storage,
Avecia shall not be obliged to store the Master Cell Bank
or the Working Cell Bank and shall deliver them to Insmed
subject to the provisions of Clauses 4.1 and 4.2.
5. Intellectual Property
5.1 Ownership of Background Intellectual Property. Nothing in this
Agreement shall affect the ownership by either party of its Background
Intellectual Property.
5.2 Licence to Intellectual Property for the Programme. Insmed grants to
Avecia a non-exclusive, royalty-free licence to use Insmed's
Background Intellectual Property and its New Intellectual Property
whilst this Agreement remains in force for the sole purpose of
carrying out the Programme.
5.3 New Intellectual Property - pPOP(TM) Technology. All New Intellectual
Property which relates to the pPOP(TM) Technology, except where such
New Intellectual Property relates solely to the Products or processes
solely for the manufacture of the Products, shall be owned by Avecia.
5.4 New Intellectual Property - Other. All New Intellectual Property not
owned by Avecia under Clause 5.3 shall be owned by Insmed.
5.5 New Intellectual Property - Not Clearly Within Scope of Clauses 5.3 or
5.4. In respect of New Intellectual Property not clearly falling
within the scope of either of Clauses 5.3 or 5.4, the parties shall
negotiate in good faith to determine the ownership of such New
Intellectual Property
5.6 Further Assistance. Each party shall, and shall ensure that its
employees shall, at the expense of the party owning the New
Intellectual Property, perform all acts and execute all instruments
necessary to vest in the owning party all rights, title and interest
in the registrations together with all patents and patent applications
or otherwise for such New Intellectual Property. All legal fees, costs
and expenses connected with the filing, prosecution and maintenance of
a patent or other protection shall be borne and paid by the party
owning such Intellectual Property.
5.7 Utilisation of Third Party Intellectual Property. In the event that
Avecia considers it expedient for the Programme or the Process to
utilise Intellectual Property belonging to a Third Party, Avecia shall
first notify Insmed in writing and obtain Insmed's written consent for
utilisation of such Third Party Intellectual Property in order that
terms for access to such Third Party Intellectual Property may be
agreed either between such Third Party and Avecia or between such
Third Party and Insmed.
5.8 Utilisation of pPOP(TM) Technology by Insmed or a Nominated
Manufacturer. If it is agreed to use the pPoP(TM) Technology at the
completion of the Development Programme, the specific details of the
licence from Avecia to Insmed to enable Insmed to operate the Process
using the pPoP(TM) Technology are to be finalised and the
- 11 - CONFIDENTIAL
following guidelines shall apply in respect of payment for access
thereto: a royalty shall be payable at a rate to be negotiated by the
parties relative to sales potential estimated at the completion of
Insmed's Phase III clinical programme on the net sales value of sales
of the Products manufactured using the Process by Insmed or a
Nominated Manufacturer. Such licence shall include a licence under New
Intellectual Property owned by Avecia under Clause 5.3.
5.9 Utilisation of Avecia's Background Intellectual Property. In the event
that Avecia decides that it considers it expedient for the Process to
utilise part of Avecia's Background Intellectual Property to which
Avecia would normally only grant access to a Third Party under a
licence, Avecia shall within 30 days of such decision notify Insmed in
writing and obtain Insmed's written consent for utilisation of such
Background Intellectual Property in the Process. In the event that
Insmed consents to use of such Background Intellectual Property, the
provisions of Clause 5.10 shall apply. No royalty is payable for
Insmed Product manufactured directly by Avecia.
5.10 Provision of Technical Assistance and Access to Avecia's Intellectual
Property. If:
(a) following Completion, or at any time while this Agreement is in
effect Avecia is unable to carry out the Programme due to Force
Majeure, or following termination of this Agreement for any
reason, Insmed or a Nominated Manufacturer requires Avecia's
technical assistance; and/or
(b) at any time while this Agreement is in effect Avecia is unable to
carry out the Programme due to Force Majeure, and Insmed or
Nominated Manufacturer requires a licence under Avecia's
Background Intellectual Property following consent to the use of
such Background Intellectual Property in the Process and under
New Intellectual Property owned by Avecia under Clause 5.3, in
order to complete or continue the Programme during the existence
of such Force Majeure; and/or
(c) following Completion or following termination of this Agreement
for any reason Insmed or a Nominated Manufacturer requires a
licence under Avecia's Background Intellectual Property following
consent to the use of such Background Intellectual Property in
the Process and under New Intellectual Property owned by Avecia
under Clause 5.3
to operate the Process and/or manufacture the End Product, then such
assistance and/or access shall be provided to Insmed or such Nominated
Manufacturer by Avecia subject to agreement of reasonable commercial
terms between Insmed and Avecia. Any such negotiations shall be
carried out between the parties in good faith. The parties when
agreeing the terms of the licence to Avecia's Background Intellectual
Property shall take any benefit derived by Avecia from its use of the
New Intellectual Property under the licence granted under Clause 5.11
below into consideration.
- 12 - CONFIDENTIAL
5.11 Licence under Insmed New Intellectual Property. Insmed hereby grants
to Avecia a royalty-free, irrevocable, non-exclusive, world-wide
licence, with power to sub-license, under process related New
Intellectual Property owned by Insmed under Clause 5.4 for use other
than for production of the Products.
6. Warranties, Liability and Indemnity
6.1 General Warranty. Each party warrants to the other that:
(a) it has the necessary right and authority to enter into this
Agreement and that to the best of its knowledge at the date of
this Agreement it is the rightful owner or licensee of all of its
Background Intellectual Property; and
(b) to the best of its knowledge at the date of this Agreement, the
use of its Background Intellectual Property made available by it
to the other party pursuant to this Agreement for the purposes
set out in this Agreement will not infringe the Intellectual
Property of a Third Party.
6.2 Warranty and Indemnity in respect of pPOPTM Technology. Avecia
warrants that it is a licensee under patent application WO9905297 and
national applications derived therefrom. Avecia shall be liable for
and indemnify Insmed against any liability, loss, claim, damage,
proceedings and costs whatsoever arising out of any breach of the
warranty under this Clause 6.2.
6.3 Indemnity. Each party ("the First Party") shall be liable for and
indemnify the other ("the Second Party") against any liability, loss,
claim, damage, proceedings and costs whatsoever arising out of an IP
Infringement (as defined below). In the event of an IP Infringement,
the Second Party shall:
(a) give the First Party prompt written notice of any such claim or
action;
(b) (i) give the First Party the sole conduct of the defence and
settlement to any claim or action in respect of the IP
Infringement, provided, however, that the First Party shall
not accept any settlement which imposes liability not covered
by this indemnification or restrictions on the Second Party
or which would otherwise result in expense to the Second
Party without the Second Party's prior written consent,
which consent shall not be unreasonably withheld or delayed;
and
(ii) and shall not at any time admit liability or otherwise
settle or compromise or attempt to settle or compromise the
said claim or action except upon the express instructions of
the First Party; and
- 13 - CONFIDENTIAL
(c) act in accordance with the reasonable instructions of the First
Party and give the First Party such assistance as it shall
reasonably require in respect of the conduct of such defence.
For the purposes of this clause, the expression "IP Infringement"
shall mean:
(i) where the First Party is Insmed, an allegation or claim by a
Third Party that Avecia's use of Background Intellectual Property
provided by Insmed in the performance of the Programme infringes
such Third Party's Intellectual Property rights; and
(ii) where the First Party is Avecia, an allegation or claim by a
Third Party that Avecia's use on behalf of Insmed of Background
Intellectual Property provided or otherwise used by Avecia in
connection with the Programme infringes such Third Party's
Intellectual Property rights.
6.4 Liability for the End Product
(a) Avecia's liability to Insmed in respect of the End Product
manufactured for Insmed shall be limited to ensuring that such
End Product complies with the Specification and is manufactured
in accordance with ISO 9001 and GMP (as appropriate).
(b) In the event that the End Product to be delivered to Insmed is a
Defective Product, such Defective Product shall not be delivered
to Insmed. The following provisions shall apply in the respect of
Defective Product:
(i) In the event that the End Product to be delivered to Insmed
is a Defective Product as a result of an Avecia Default,
Avecia shall either rework the Defective Product if Insmed
consents to such rework, or manufacture a quantity of the
End Product to replace the Defective Product as soon as
reasonably practicable (and in no event more than 90 days
after Avecia realises that such End Product is Defective
Product) and at no further cost to Insmed.
(ii) In the event that the End Product to be delivered to Insmed
is a Defective Product other than due to an Avecia Default,
the parties shall meet to discuss availability of Avecia's
Advanced Biologics Centre for rework of the Defective
Product if Insmed consents to such rework, or manufacture of
a quantity of the End Product to replace the Defective
Product and, subject to Clause 2.5, agree on a revised
period during which such rework or manufacture of
replacement End Product will take place and the amount
payable by Insmed to Avecia in respect of such rework or
manufacture.
- 14 - CONFIDENTIAL
(c) Subject to Clauses 6.4(d) and (e), Avecia shall not have any
liability whatsoever resulting from, and Insmed shall fully
indemnify Avecia against all claims, suits, actions, demands,
liabilities, expenses and/or losses (including reasonable legal
fees) suffered by any Third Party and brought or made against
Avecia, its directors, officers or employees, and against all
costs incurred in connection therewith, arising out of or
resulting from the use of the End Product following delivery.
(d) If:
(i) a Defective Product is delivered to Insmed by Avecia and
such Defective Product is a Defective Product as a result of
an Avecia Default; or
(ii) a Third Party claim arises with respect to an End Product as
a result of Avecia's gross negligence or wilful malfeasance
then Insmed shall not have any liability whatsoever
resulting from use of such Defective or End Product, and
Avecia shall fully indemnify Insmed against all claims,
suits, actions, demands, liabilities, expenses and/or losses
(including reasonable legal fees) suffered by any Third
Party and brought or made against Insmed, its directors,
officers or employees, and against all costs incurred in
connection therewith, arising out of or resulting from the
use of such Defective Product or End Product.
(e) Avecia's liability to indemnify Insmed under Clause 6.4(d) in
respect of use of Defective Product or End Product shall cease in
respect of continuing use by Insmed of the Defective Product or
End Product in question following either:
(i) notification by Avecia to Insmed that the End Product
delivered to Insmed is a Defective Product; or
(ii) Insmed becoming aware that the End Product delivered to
Insmed is a Defective Product; or
(iii) Insmed receiving notification that the End Product is the
subject of a Third Party claim.
(f) Insmed shall not have any liability whatsoever, and Avecia shall
be responsible for replacement at cost, of any raw materials,
intermediates or End Product lost or stolen within Avecia's own
premises prior to delivery of End Product ordered by Insmed,
excluding normal in-process losses consistent with GMP
manufacture and prior process history.
(g) Insmed shall not be liable whatsoever for raw materials or
consumable items purchased by Avecia in excess of the needs of
End Product ordered by Insmed, consistent with GMP, with the
exception of specific cases requiring long lead times or
- 15 - CONFIDENTIAL
minimum quantity orders, which shall be approved in writing in
advance by Insmed.
6.5 Liability for the Process. Liability in respect of use or operation of
the Process (or any part of the Process), by or on behalf of Insmed
shall rest solely on Insmed, except to the extent that Avecia is
required to indemnify Insmed in accordance with Section 6.2 or 6.3(e)
above or except to the extent that such liability arises from a Third
Party claim for property damage or personal injury arising from
Avecia's failure to operate the Process in accordance with mutually
agreed batch records and standard procedures or methods. Insmed shall
indemnify Avecia against any liability, loss, damages, costs, legal
costs, professional and other expenses whatsoever incurred or suffered
by Avecia arising out of or in respect of use or operation of the
Process (or any part of the Process) by or on behalf of Insmed (except
to the extent that such loss, damages, costs, legal costs,
professional and other expenses arise from a Third Party claim for
property damage or personal injury arising from Avecia's failure to
operate the Process in accordance with mutually agreed batch records),
unless otherwise specifically provided for in any subsequent
manufacturing agreement between the parties or Avecia is required to
indemnify Insmed in accordance with Section 6.2 or 6.3(e) above.
6.6 Limitation on Liability. Subject to the unlimited indemnity provisions
under Clauses 6.1, 6.2, 6.3, 6.4, liability for consequential losses
under Clause 6.7, and breaches of confidentiality under Section 7,
Avecia's total liability (whether for breach of contract, negligence,
breach of statutory duty and/or other tort, or otherwise) in
connection with or as a result of the work carried out under this
Agreement shall be limited to the aggregate amount received by Avecia
from Insmed under this Agreement during the period of twelve months
prior to such liability arising.
6.7 No Liability for Indirect Losses. Neither party shall be liable to the
other for any indirect, consequential or special loss, loss of profits
or damage howsoever arising, excluding:
(a) all IP Infringement indemnifications;
(b) product liability claims arising from Avecia delivering Defective
Product; or
(c) breaches of confidentiality.
7. Confidentiality
7.1 Maintenance of Confidentiality. In consideration of the Disclosing
Party disclosing the Confidential Information to the Receiving Party,
the Receiving Party hereby undertakes to maintain confidential all
such Confidential Information and it will accordingly not directly or
indirectly use any of the Confidential Information in whole or in part
save for the purposes envisaged in this Agreement or disclose any of
the Confidential Information to any Third Party other than under and
in
- 16 - CONFIDENTIAL
accordance with the terms of Clauses 7.6, 7.7 or 7.8.
7.2 Use of Insmed Materials. Insmed Materials and project documentation
conveyed from Insmed to Avecia shall be used solely for the Programme
and held in Avecia's custody, in accordance with the provisions of
this Clause 7. Conveyance of any Insmed Materials or project
documentation from Avecia to any party other than Insmed requires the
express written approval of Insmed.
7.3 Return or Destruction of Insmed Materials. Avecia agrees to either
return or send all Insmed Materials and project documentation
containing Insmed's Confidential Information to Insmed or, if Insmed
agrees, certify that such Insmed Materials and project documentation
have been destroyed within forty-five (45) days of Completion or after
termination under Clause 8, subject to payment of any sums owed to
Avecia under Clauses 3 or 8. Nothing in this Agreement is to be
construed as permitting the granting of any contractual ownership
rights, either of Insmed Materials, project documentation or
Intellectual Property, to anyone without written authorisation from
Insmed, except as expressly provided herein to Avecia.
7.4 Exceptions. The foregoing restrictions on the Receiving Party shall
not apply to any Confidential Information which:
(a) the Receiving Party can prove was already in its possession and
at its free disposal before the disclosure hereunder to it;
(b) is hereafter disclosed to, purchased or otherwise legally
acquired by the Receiving Party by or from a Third Party who has
not derived it directly or indirectly from the Disclosing Party
under an obligation of confidentiality;
(c) is or becomes available to the public whether in printed
publications or otherwise through no act or default of the
Receiving Party in violation of this Clause 7; or
(d) the Receiving Party can prove to the reasonable satisfaction of
the Disclosing Party has been developed independently of the
Programme by the Receiving Party without reference to any of the
Confidential Information disclosed by the Disclosing Party.
7.5 Exercise of Reasonable Precautions. In order to secure the obligations
set out in this Clause 7 the Receiving Party agrees to exercise every
reasonable precaution to prevent and restrain the unauthorised
disclosure and use of information subject to confidentiality,
including without limitation restricting access to such information to
such of its employees as are bound to keep such information
confidential and need to have such access for the purpose of this
Agreement.
7.6 Disclosure to Nominated Manufacturer. Insmed shall be entitled to
reveal Confidential Information of Avecia to a Nominated Manufacturer,
provided that Insmed either:
- 17 - CONFIDENTIAL
(a) does so under confidentiality obligations no less onerous than
those contained in this Clause 7; or
(b) Insmed procures the entry of such the Nominated Manufacturer into
a confidentiality agreement with Avecia directly.
7.7 Disclosure to Affiliates. Either party may disclose Confidential
Information to its Affiliates or receive Confidential Information
through its Affiliates, and each party confirms that its Affiliates
have been made aware of the obligations contained in this Agreement
and agree to be subject to confidentiality obligations no less onerous
than those contained in this Agreement. Any breaches of the
obligations of confidentiality contained in this agreement by such
Affiliate shall be treated as a breach of such obligations by the
party making the disclosure to or receiving through the Affiliate.
7.8 Disclosure to Courts or by Law or Other Rules. Nothing in this Clause
7 shall preclude disclosure of any Confidential Information required
by any court entitled by law to disclosure of the same, or which is
required by law to be disclosed, provided that the Receiving Party
promptly notifies the Disclosing Party when such requirement to
disclose has arisen, to enable the Disclosing Party to seek an
appropriate protective order and to make known to the said court the
proprietary nature of the Confidential Information and to make any
applicable claim of confidentiality in respect thereof. The Receiving
Party agrees to co-operate in any appropriate action which the
Disclosing Party may decide to take. If the Receiving Party is advised
to make a disclosure in accordance with this Clause 7.8 it shall only
make a disclosure to the extent to which it is obliged.
7.9 Survival of Obligations. The provisions of this Clause 7 shall survive
termination or expiry of this Agreement and shall continue for a
period of ten years from the date of that termination or expiry.
7.10 Continuation of the Confidentiality Agreement. The parties shall
remain bound by the obligations in the Confidentiality Agreement, but
in the event of any conflict between the terms of the Confidentiality
Agreement and the terms of this Agreement, the latter shall prevail.
8. Duration and Termination
8.1 Duration. This Agreement shall be deemed to have commenced on the
Commencement Date and shall continue until Completion unless
terminated in accordance with the provisions of Clause 8.2.
8.2 Termination. Subject to Clause 9, this Agreement may be terminated in
the following ways:
(a) by mutual agreement at any time prior to Completion in the event
that both parties agree that the Programme is not technically
feasible;
- 18 - CONFIDENTIAL
(b) by Insmed at any time by giving written notice to Avecia;
(c) by either party forthwith if the other is in breach of this
Agreement and does not rectify such breach within 30 days of
receipt of written notice from the first party requiring
rectification of the breach; or
(d) by either party forthwith upon written notice if the other has a
liquidator, receiver, manager receiver or administrator
appointed, or ceases to continue trading or is unable to pay
debts as defined in Section 227 of the Insolvency Act 1986
(England and Wales) or the equivalent occurs in any jurisdiction
in which the other is resident or carried on business.
9. Consequences of Termination
9.1 Consequences. In the event of termination under Clause 8 above:
(a) Insmed shall pay to Avecia all sums payable up to the date of
termination but not yet paid;
(b) if Avecia terminates for Insmed's unremedied breach or insolvency
under Clauses 8.2(c) and (d), or if the Agreement is terminated
by mutual agreement under Clause 8.2(a), or if Insmed terminates
on notice under Clause 8.2(b), any moneys paid by Insmed to
Avecia up to the date of termination shall be non-refundable;
(c) if Avecia terminates for Insmed's unremedied breach or insolvency
under Clauses 8.2(c) and (d), or if the Agreement is terminated
on mutual agreement under Clause 8.2(a), or if Insmed terminates
on notice under Clause 8.2(b), Insmed shall pay to Avecia:
(i) all reasonable costs already incurred by Avecia in
accordance with the Agreement at the date of termination or
costs incurred by Avecia after termination which could not
reasonably be avoided; provided, however, that in no event
shall the sum of the amounts payable to Avecia under 9.1(a)
and (c) and the amounts previously paid to Avecia hereunder
exceed the total amount that would have been paid to Avecia
if the Agreement had not been terminated and Avecia had
performed this Agreement in full; and
(ii) the Cancellation Fee (except if the Agreement is terminated
on mutual agreement under 8.2(a)).
(d) if Insmed terminates for Avecia's unremedied breach or insolvency
under Clauses 8.2(c) or (d) above, Avecia shall refund to Insmed
any monies paid to Avecia, less an agreed
- 19 - CONFIDENTIAL
sum in respect of work done by Avecia and not affected by the
breach, taking into consideration the payments set out in Clause
3 and in the absence of agreement upon such sum the provisions of
Clause 19 shall apply.
9.2 Acquired Rights. Termination or expiry of this Agreement, for whatever
reason, shall not prejudice the acquired rights of either party,
including the right to payment for the Programme pursuant to Clause 3
(subject to Clause 9.1).
9.3 Survival. The provisions of Clauses 3, 5, 6, 7 - 9, 11 - 17 and 19
shall survive the termination or expiry of this Agreement.
10. Independent Contractor
Nothing in this Agreement shall create, or be deemed to create, a
partnership or the relationship of principal and agent or employer and
employee between the parties. Each party agrees to perform under this
Agreement solely as an independent contractor.
11. Entire Agreement
This Agreement together with the Confidentiality Agreement contains the
entire agreement between the parties and supersedes any previous agreements
(including the Letter of Intent) relating to the Programme and any
understandings between the parties with respect thereto.
12. Announcements And Publicity
Either of the parties may make an official press release, announcement or
other formal publicity relating to the transactions which are the subject
of this Agreement, or any ancillary matter, unless the other party
reasonably objects to the making of such publication. The party wishing to
make such release, announcement or publicity shall provide a copy of the
text thereof to the other party prior to release and the other party shall
raise any objections as soon as possible but not later than fourteen days
following receipt.
13. Assignment
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective legal successors but shall not
otherwise be assignable by either party, without the prior written consent
of the other party, which consent shall not be unreasonably withheld,
provided that either party may assign this Agreement without consent by
notice in writing to the other party, to its affiliates, or to a purchaser
of the whole or part of the business to which this Agreement relates.
- 20 - CONFIDENTIAL
14. Variation
No variation or amendment of this Agreement shall bind either party unless
made in writing in the English language and agreed to in writing by duly
authorised officers of both parties.
15. Illegality
If any provision of this Agreement is agreed by the parties to be illegal,
void or unenforceable under any law that is applicable hereto or if any
court of competent jurisdiction in a final decision so determines, this
Agreement shall continue in force save that such provision shall be deemed
to be excised herefrom with effect from the date of such agreement or
decision or such earlier date as the parties may agree.
16. Waiver
A failure by either party hereto to exercise or enforce any rights
conferred upon it by this Agreement shall not be deemed to be a waiver of
any such rights or operate so as to bar the exercise or enforcement thereof
at any subsequent time or times.
17. Notices and Communications
17.1 Formal Notices. Any formal notice required or permitted under this
Agreement shall be in writing which may take the form of a letter or
facsimile and shall be sent by prepaid post, facsimile, or hand
delivery (including messenger service). The addresses for any such
notice or other communication shall be those stated on the first page
of this Agreement.
17.2 Other Communications. In addition to the methods set out in Clause
17.1, any other communications between the parties may be made by
telephone or by email.
17.3 Change of Address. Any party may, at any time by written notice to the
other parties, change the address or the facsimile numbers to which
notices or other communications shall be sent. All notices and other
communications shall have been duly given or made (i) when delivered
by hand (including by messenger service) upon delivery or (ii) when
delivered by post upon delivery or (iii) when faxed upon receipt of a
legible copy by recipient and production of a satisfactory
transmission report by sender confirming transmission of the fax in
full to the appropriate number by the fax machine which sent the fax.
18. Force Majeure
Neither party shall be liable to the other party in any manner whatsoever
for any failure or delay in performing its obligations under this Agreement
if and to the extent, and for the duration, that such is due to Force
Majeure.
- 21 - CONFIDENTIAL
Without prejudice to Clause 8, any said failure or delay shall not give
either party the right to terminate this Agreement except, and to the
extent that such Force Majeure continues for a period exceeding three (3)
months. Termination as a result of Force Majeure shall take effect as if
the Agreement had been terminated by mutual agreement under Clause 8.2(a).
Insmed shall not be entitled to relief under this Clause 18 for any delay
or failure in performing any of its payment obligations under this
Agreement, or in the event of failure of the End Product in clinical
trials.
19. Law and Jurisdiction
19.1 Governing Law. This Agreement is governed by and shall be construed
and interpreted in accordance with, and any arbitration or court
action hereunder shall apply, the laws of the State of New York. Any
proceedings between the parties shall be conducted in the English
language.
19.2 Reference to Parties' Senior Representatives. Prior to any dispute,
difference or disagreement concerning this Agreement proceeding to
litigation through the Court pursuant to Clause 19.1 the parties shall
seek first to resolve the matter via the Joint Programme Management
Committee (Clause 2.6) without delay. If resolution is not reached
within fifteen days, the matter shall be referred to the
Vice-President, Avecia Fine Chemicals and the CEO of Insmed.
19.3 Arbitration. Any matter or dispute arising out of or in connection
with this Agreement which is not able to be resolved pursuant to
Clause 19.2 shall be finally settled by commercial arbitration to be
held in the State of New York. In appointing arbitrators, the parties
shall consider the appointment of arbitrators capable of making
decisions on the technical aspects of the Programme.
19.4 Interim Steps. Neither of the parties shall be deemed to be precluded
from taking such interim formal steps as may be considered necessary
to protect such party's position while the procedures referred to in
Clauses 19.2 and 19.3 are pursued.
19.5 Other Proceedings. Notwithstanding anything contained in this Clause
19 to the contrary, each party shall have the right to institute
judicial proceedings against the other party or anyone acting by,
through or under such other party, in order to enforce the instituting
party's rights hereunder through reformation of contract, specific
performance, injunction or similar equitable relief.
- 22 - CONFIDENTIAL
IN WITNESS WHEREOF, the authorised representatives of the parties have executed
this Agreement on the date written at the top of this Agreement.
For and on behalf of AVECIA LIMITED
Signature
-------------------------
Name
-------------------------
Position
-------------------------
For and on behalf of INSMED INCORPORATED.
Signature
-------------------------
Name
-------------------------
Position
-------------------------
- 23 - CONFIDENTIAL
