EXHIBIT NO. 10.3
EXECUTION VERSION
Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.
SUPPLY AGREEMENT
BY AND BETWEEN
MILLENNIUM PHARMACEUTICALS, INC.
AND
SCHERING CORPORATION
SEPTEMBER 1, 2005
SUPPLY AGREEMENT
This SUPPLY AGREEMENT (the "Supply Agreement") is entered into as of
September 1, 2005 (the "Execution Date") by and among Millennium
Pharmaceuticals, Inc. (including its Affiliates, "Millennium"), a Delaware
corporation with offices at 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxxxxx
00000, and Schering Corporation, a New Jersey corporation having its principal
place of business at 0000 Xxxxxxxxx Xxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000,
X.X.X. ("Schering"). In this Agreement, Millennium and Schering are referred to
individually as a "Party" and collectively as the "Parties", and references to
Millennium and Schering include their respective Affiliates.
WHEREAS, Millennium and Schering Corporation entered into a Collaboration
Agreement dated April 10, 1995, as amended (the "Collaboration Agreement")
pursuant to which Schering had the opportunity to participate in the development
and commercialization of INTEGRILIN; and
WHEREAS, Millennium and Schering Corporation have entered into an Amended
and Restated INTEGRILIN Agreement as of July 22, 2005 (as amended from time to
time, the "A-R Agreement") pursuant to which Schering shall have an exclusive
license to commercialize and distribute INTEGRILIN Product(s) in the Schering
Territory; and
WHEREAS, pursuant to the A-R Agreement, Schering shall hold the Regulatory
Authorization for the INTEGRILIN Product(s) in the Schering Territory; and
WHEREAS, Millennium has entered into agreements with Third Party
Contractors for the Manufacture of Compound and Product; and
WHEREAS, Millennium and UCB S.A. have developed a new process for the
manufacture of Compound ("New Compound Process"), different from the process
approved for the Manufacture of Compound as of the date of Execution of the A-R
Agreement; and
WHEREAS, Millennium has agreed to sell to Schering Product and Compound
manufactured for Millennium by Third Party Contractors, and Schering has agreed
to purchase Product and Compound from Millennium.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, the receipt of which is hereby
acknowledged, the Parties agree as follows:
1. DEFINITIONS
Capitalized terms used but not otherwise defined in this Supply Agreement shall
have the meanings ascribed thereto in the A-R Agreement. Unless this Supply
Agreement shall expressly provide to the contrary, the following terms herein,
whether used in the singular or plural, shall have the respective meanings set
forth below:
1.1 "COMPOUND" Compound means the compound known as eptifibatide
manufactured in bulk form for use as the active pharmaceutical ingredient in the
Manufacture of the INTEGRILIN Product, as further described in SCHEDULE A-1.
1.2 "COST OF GOODS SHIPPED" means the cost of Compound or Product
Manufactured for Schering under this Supply Agreement. As used herein, the cost
of the Compound or Product, as the case may be, means the unit costs of
manufacture, including without limitation the acquisition costs for Product or
Compound, as applicable, (i) from Third Party Contractors (including the
royalties due to Solvay with respect to purchases from Diosynth B.V.), (ii) for
services contracted by Millennium and (iii) for services provided by Millennium,
each in connection with the Manufacture of such Product or Compound, plus the
variances. Actual unit costs shall consist of direct material and direct labor
costs plus manufacturing overhead directly attributable to the Compound or
Products for Schering at standard cost plus variances, all calculated in
accordance with reasonable cost accounting methods, consistently applied, of the
Party performing the work.
Direct material costs shall include the costs incurred in purchasing
materials, including sales and excise taxes imposed thereon and customs duty and
charges levied by government authorities, and all costs of filling, finishing
and packaging, as applicable.
Direct labor shall include the cost of employees engaged in the direct
activities of procurement, planning, production, testing and releasing of
Compound or Product, as applicable, for Schering.
Overhead attributable to the Compound or Products for Schering shall
include a reasonable allocation of indirect labor (not previously included in
direct labor) and manufacturing department supplies and expenses, a reasonable
allocation of administrative costs, and a reasonable allocation of facilities
costs including electricity, water, sewer, waste disposal, property taxes, and
depreciation over the expected life of buildings and machinery. Such allocations
shall be in accordance with reasonable cost accounting methods, consistently
applied, of the Party performing the work. Overhead shall not include corporate
overhead. Overhead shall not include costs associated with capacity not
incorporated into standard unit costs. Actual costs shall exclude costs
associated with excess capacity not directly related to Compound or Product
Manufactured for Schering.
Cost of Goods Shipped shall also include manufacturing variances and other
attributable costs not in standard (but excluding capacity not incorporated into
standard manufacturing unit costs) such as, but not limited to, excess and
obsolescence, and batches that do not conform to specification. Cost of Goods
Shipped shall also include a recovery of process improvement costs and
environmental compliance costs.
Notwithstanding the foregoing of this Section 1.2, in no event will Cost of
Goods Shipped include (i) costs or allocations that have not been customarily
used by the Parties in the implementation of the Collaboration Agreement prior
to the date of Execution of the A-R Agreement; (ii) except as required by Laws,
additional reviews or analyses of Manufactured Compound or Product beyond the
reviews and analyses conducted by Millennium as of the date of execution of the
A-R Agreement for the release of Compound or Product, or (iii) any of the costs
or allocations set forth in this Section 1.2 to the extent attributable to
Compound or products manufactured for GSK. In addition, in circumstances where
Millennium purchases from multiple Third Party Contractors and/or on behalf of
GSK and Schering, the parties agree that standard cost represents a blended
cost.
1.3 "DIOSYNTH SUPPLY AGREEMENT" means the Supply Agreement between Diosynth
B.V. and Millennium Pharmaceuticals, Inc. dated July 21, 1998, a true and
correct copy of which has been provided to Schering by Millennium.
1.4 "FDA" FDA means the United States Food and Drug Administration,
including any successor agency thereto.
1.5 "JOINT PRODUCTION COMMITTEE" Joint Production Committee means the
committee which shall be formed as set forth in Section 2.2 of this Supply
Agreement.
1.6 "LAWS" Laws means any federal, state or local, foreign, national or
multinational law, statute, standard, ordinance, code, rule, regulation,
resolution or promulgation, or any government order, or any license, franchise,
permit or similar right granted under any of the foregoing, or any similar
provision having the force or effect of law.
1.7 "MANUFACTURE" and "MANUFACTURING" Manufacturing or Manufacture, means,
1.7.1 in connection with Compound, any steps, process and activities
necessary to produce Compound, including without limitation, the
sourcing of raw materials, and the manufacturing, processing, quality
control testing, release or storage of Compound in accordance with the
terms and conditions set forth in the relevant Third Party Compound
Manufacturing Agreement and shipping to storage and/or fill/finish
manufacturing sites;
1.7.2 in connection with Product for sale in the United States, all the
activities relating to production of each INTEGRILIN Product, including
without limitation, purchasing raw materials, production of the
Product, quality control and quality assurance, filling, finishing,
labeling, packaging, release, holding, shipping and the analytical
quality control tests and analyses conducted in connection therewith in
accordance with the terms and conditions set forth in the relevant
Third Party Agreement; and
1.7.3 in connection with Product for sale in the Schering Territory
except for the United States, all the activities relating to production
of each INTEGRILIN Product, including without limitation, purchasing
raw materials, production of the Product, quality control and quality
assurance, filling, finishing, release in unlabeled vials and the
analytical quality control tests and analyses conducted in connection
therewith and shipping of such unlabeled vials, as directed by
Schering, all in accordance with the terms and conditions set forth in
the relevant Third Party Agreement.
1.8 "PATHEON SUPPLY AGREEMENT" means the Manufacturing Services Agreement
between Patheon Italia S.p.A. and Millennium Pharmaceuticals, Inc. dated June
10, 2005, a true and correct copy of which has been provided to Schering by
Millennium.
1.9 "PRODUCT" Product means the pharmaceutical product containing the
active ingredient eptifibatide Manufactured in accordance with this Agreement
and the Third Party Agreements and conforming to the Specifications, to be
marketed by Schering as INTEGRILIN(R) (eptifibatide) Injection. Product includes
product that has undergone Manufacturing for the United States (including
labeling and secondary packaging) as well as product that has undergone
Manufacturing for the Schering Territory except for the United States.
1.10 "SOLVAY SUPPLY AGREEMENT" means the New Long Term Supply Agreement
between Solvay, Societe Anonyme (Peptisyntha) and Millennium Pharmaceuticals,
Inc. dated January 1, 2003, and the License and Supply Agreement between Solvay,
Societe Anonyme dated July 24, 1994, as amended from time to time, a true and
correct copy of which has been provided to Schering by Millennium.
1.11 "SPECIFICATIONS" Specifications means the written specifications
established for the characteristics, quality and quality control testing
procedures for Compound or Product, as applicable, as defined in the Regulatory
Approval for the INTEGRILIN Product(s) in the countries for which the INTEGRILIN
Product(s) is approved in the Schering Territory, and as amended from time to
time. The Specifications for the United States and Canada as of the Execution
Date are attached hereto as SCHEDULE A-1 (COMPOUND) AND SCHEDULE A-2 (PRODUCT).
1.12 "TECHNICAL AGREEMENT" Technical Agreement means the Technical
Agreement of even date entered into by the Parties, a copy of which is attached
hereto as EXHIBIT A.
1.13 "TEVA SUPPLY AGREEMENT" means the Manufacturing Agreement between
Gensia Sicor Pharmaceuticals, Inc. and Millennium Pharmaceuticals, Inc. dated
February 1, 2001, as amended from time to time, and the Interim Manufacture
Agreement between Sicor Pharmaceutical Sales, Inc. and Millennium
Pharmaceuticals, Inc. dated February 18, 2004, a true and correct copy of which
has been provided to Schering by Millennium.
1.14 "THIRD PARTY AGREEMENTS" Third Party Agreement means, collectively,
the Third Party Product Manufacturing Agreements, Third Party Compound
Manufacturing Agreements, Third Party Packaging Agreements, and agreements
between Millennium and vendors for testing of Compound or Product or for storage
of Compound or Product.
1.15 "THIRD PARTY COMPOUND MANUFACTURER" Third Party Compound Manufacturer
means, currently, each of Peptisyntha (Solvay) and Diosynth B.V., and following
receipt of approval from the FDA, UCB-Bioproducts, and any other manufacturer of
Compound selected by JPC and approved by the FDA for the Manufacture of
Compound.
1.16 "THIRD PARTY COMPOUND MANUFACTURING AGREEMENT" Third Party Compound
Manufacturing Agreement means an agreement executed by a Third Party Compound
Manufacturer and Millennium, existing as of the Execution Date or in the future,
pursuant to which the Third Party Compound Manufacturer agrees to Manufacture,
and Millennium agrees to purchase, Compound.
1.17 "THIRD PARTY CONTRACTOR" Third Party Contractor means a Third Party
Compound Manufacturer, Third Party Product Manufacturer, packager of Product,
testing laboratory or storage vendor.
1.18 "THIRD PARTY PRODUCT MANUFACTURER" Third Party Product Manufacturer
means Teva Pharmaceuticals, Inc. (successor to Sicor Pharmaceuticals, Inc.),
and, following receipt of FDA approval, Patheon Italia S.p.A. or any other
manufacturer of Product selected by JPC and approved by FDA for the Manufacture
of Product.
1.19 "THIRD PARTY PRODUCT MANUFACTURING AGREEMENT" Third Party Product
Manufacturing Agreement means an agreement executed by a Third Party Product
Manufacturer and Millennium, existing as of the Execution Date or in the future,
pursuant to which the Third Party Product Manufacturer agrees to Manufacture,
and Millennium agrees to purchase, Product.
1.20 "THIRD PARTY PACKAGING AGREEMENT" Third Party Packaging Agreement
means an agreement with a vendor, existing as of the Execution Date or in the
future, for the labeling of vials and packaging into secondary packaging for
distribution for sale.
1.21 "UCB SUPPLY AGREEMENT" means the Supply Agreement between UCB S.A. and
Millennium Pharmaceuticals, Inc. dated January 14, 2005, a true and correct copy
of which has been provided to Schering by Millennium.
1.22 ADDITIONAL DEFINITIONS Each of the following definitions is set forth
in the Section of the Supply Agreement indicated below.
DEFINITION SECTION
Early Manufacturing Plan Transfer to Schering 3.1.1
Execution Date First Paragraph
Force Majeure Event 11.3
Schering Indemnified Parties 10.1
Losses 10.1
Millennium Indemnified Parties 10.2
New Compound Process Preamble
Records 3.5
Representative 2.4
Retention Period 3.5
Secondary Compound Supplier 3.2
Severed Clause 11.6
2. PERFORMANCE
2.1 SUPPLY AND PURCHASE
2.1.1 SUPPLY OF COMPOUND AND PRODUCT. Subject to the terms and
conditions of this Agreement, Millennium shall exercise its rights under
the Third Party Agreements to arrange for the Manufacture of Compound and
Product under the terms of the applicable Third Party Agreements and shall
perform the services described in the Technical Agreement. Schering
shall pay to Millennium the Costs of Goods Shipped for the Manufacture
of such Compound and Product.
2.1.2 MANUFACTURING PLAN. Subject to the terms and conditions of this
Agreement, Millennium shall use Diligent Efforts to perform its
obligations under the Manufacturing Plan (an outline of which is attached
hereto as Schedule B (subject to finalization and agreement by the JPC at
Closing)) as described in Section 3 of this Agreement.
2.2 JOINT PRODUCTION COMMITTEE. The Parties shall establish a Joint
Production Committee (the "JPC") which shall include representatives from
Schering and Millennium responsible for production planning, manufacturing,
product quality, and regulatory affairs. The JPC shall be responsible to do the
following:
2.2.1 monitor the implementation of, and make decisions on
modifications or revisions to, the Manufacturing Plan, including but not
limited to:
(a) selecting additional Third Party Contractors;
(b) deciding whether to extend or renew existing contracts for
Manufacturing, packaging, testing or storage services;
(c) for either Compound or Product that is Manufactured by a third party
that is not approved by FDA for the Manufacture of Compound or Product as of the
date of execution of the A-R Agreement, assigning responsibilities between
Millennium and any manufacturer or testing vendor for testing and quality review
of such Compound or Product;
2.2.2 exchange information on quality matters related to the quality
of the Product or the Compound, including but not limited to:
(a) any trends in quality metrics such as customer complaints, release
data and stability data;
(b) any corrective and preventive actions being taken by any Third Party
Contractor with respect to the quality of Compound or Product or the services
performed pursuant to the Third Party Agreement;
2.2.3 advise the Parties on the status of regulatory submissions
related to the Manufacture of Compound and Product;
2.2.4 decide upon the quantities and the delivery dates of Schering's
portions of the forecasts and the purchase orders that Millennium will
forward to the Third Party Contractors, subject to and in accordance
with the relevant terms of each of the Third Party Agreements, for the
Manufacture of Compound and Product, based upon the following:
(a) sales forecasts provided by Schering;
(b) the goal of the Parties to maintain a minimum inventory in the supply
chain prior to delivery to wholesalers of Product released by Millennium to
Schering equal to approximately twelve (12) weeks of Schering's forecasted
requirements;
(c) the goal of the Parties to maintain a minimum inventory of Compound
released by Millennium equal to approximately [**] months of the forecasted
requirements, or as otherwise is agreed is necessary to transition successfully
to Compound Manufactured under the new process;
2.2.5 discuss the terms of, and potential courses of action with
respect to, any material proposed amendment or modification to, or
notice of or threatened termination of, any Third Party Agreements or
of any developments known to Millennium materially and adversely
affecting such arrangements.
2.2.6 manage the transition of the supply responsibility from
Millennium to Schering following the exercise of rights under the call
options or put options under Article 7.
2.3 JOINT PRODUCTION COMMITTEE PROCESSES. The procedures for, and frequency
of, the JPC meetings shall be agreed upon between the Parties as soon as
reasonably possible following the Execution Date. Each meeting of the JPC will
be documented in minutes that the Parties agree upon jointly. The Parties agree
to resolve any issues or disputes in good faith. In the event that the Parties
cannot agree upon a specific action to be taken, the matter shall be resolved by
escalating the dispute to senior management of the respective parties in
accordance with Article 14.1 of the A-R Agreement; provided, however, that if
senior management cannot resolve the dispute, neither Party may invoke the
provisions of Section 14.2 of the A-R Agreement but, instead, Schering shall
make the final decision in its sole discretion, subject to the following:
2.3.1 If such a final decision by Schering delays or extends the time
for performance of an activity under the Manufacturing Plan, and if the
extension of such date causes a delay in (a) FDA's approval of UCB as a
Third Party Compound Manufacturer beyond [**], or (b) FDA's approval of the
second supplier or a second site using the New Compound Process by [**],
then the royalty deduction with respect to a delayed Regulatory Approval
provided for under in Section 6.4(a)(iv) and (v), respectively, under the
A-R Agreement shall be extended by the same number of days beyond [**], in
the case of a delay regarding clause (a), above, and beyond [**], in case
of a delay regarding clause (b), above. For clarity, if Schering makes such
a final decision to select a second compound supplier or a second site,
whose implementation schedule states that FDA approval will occur after
[**] (in lieu of another qualified potential second compound supplier or a
second site whose implementation schedule states that FDA approval will
occur before [**]), and if the implementation by such supplier or site
actually does cause a delay beyond such date, then the effective date of a
royalty deduction (as described in the preceding sentence), if any, will be
extended for a time period equivalent to the length of time in such
implementation schedule for expected FDA approval beyond [**].
2.3.2 Schering may not require Millennium to incur costs for which
Millennium is not reimbursed other than as agreed to under Section 5.4 of
this Agreement.
2.3.3 Schering may not require Millennium to reduce or eliminate the
level of review or analysis of the quality of Manufactured Compound or
Product that is conducted by Millennium as of the date of execution of the
A-R Agreement for the release of Compound or Product.
2.3.4 In the event that Schering exercises its tie-breaking authority
and makes a final decision to reduce Millennium's responsibilities for
testing and quality review of a new Manufacturer of Product of Compound
(as compared to its responsibilities with respect to Manufacturers
approved by FDA as of the Execution Date) pursuant to Section 2.2.1 (c)
above, the relevant provisions in Sections 10.1 and 10.2 (Indemnification)
with respect to product liability claims arising from manufacturing defects
with respect to Product or Compound Manufactured by the relevant Third
Party Contractor will become effective.
2.3.5 Schering may not cause Millennium to violate any applicable law
or to violate Millennium's corporate integrity policies.
2.4 PARTY REPRESENTATIVES. Each Party shall appoint a representative having
primary responsibility for day-to-day interactions with the other Party for the
performance of obligations hereunder (each, a "Representative"). Except for
notices or communications required or permitted under this Supply Agreement, or
unless otherwise mutually agreed by the Parties in writing, all communications
between Schering and Millennium regarding the performance of obligations
hereunder shall be addressed to or routed directly through the respective
Representatives of each Party, as appropriate, and the Parties shall hold JPC
meetings via teleconference or in person, on a periodic basis as agreed upon by
the Representatives. Notwithstanding the foregoing of this Section 2.4, the
Parties agree that the notice provisions of the Technical Agreement shall
identify the representative from each Party responsible for quality related
issues, and communications with respect to such issues shall be performed by the
parties in accordance with the Technical Agreement.
2.5 MANAGEMENT OF VENDORS. The Parties agree that Millennium will be the
single point of contact with Third Party Contractors, packaging vendors and
testing laboratories with whom Millennium has a contract (for purposes of this
Section 2.5 only, collectively "Vendors") for the purpose of communicating
forecasts, instructions, decisions and other directions to the Vendors regarding
the Compound and Product. Schering may not control or direct the performance of
any Vendor with respect to Compound or Product. Schering may not engage in
independent discussions and other communications with the Vendors with respect
to Compound or Product unless all of the following conditions have been met:
2.5.1 the purpose of the communication relates to a specific for cause
quality, manufacturing, packaging or testing issue;
2.5.2 the number and scope of such communications do not unreasonably
interfere with the management of the Vendors by Millennium or with
Millennium's performance of its obligations under the terms of this
Agreement;
2.5.3 Schering participates in the communication jointly with
Millennium; provided, however, if (i) the specific issue is a time
sensitive matter such as, by way of example only, a field alert report or
recall, (ii) Schering promptly contacts Millennium, and (iii) Millennium
does not respond to Schering's contact within four (4) business hours, then
Schering may in such circumstances communicate directly with the Vendor
until Millennium is available to participate;
2.5.4 Schering pays (i) the cost, if any, of any excessive time,
material and travel required of Millennium in order to participate in the
communication and (ii) any incremental charges by the Vendor.
2.6 FORECASTS. Except as expressly provided otherwise in this Section,
forecasts and orders, including binding forecasts and orders, must be placed in
accordance with the requirements of the applicable Third Party Agreements. To
facilitate such compliance, Schering shall provide good faith [**] year
forecasts for Product, with updates every twelve (12) months. In the case of
Product to be purchased from Patheon, Schering will commit to [**] and [**] with
binding commitments as defined in the Patheon Supply Agreement. Annually the JPC
will have the ability to make revisions to the [**] twelve (12) month period
subject to the limits and penalties described in the Patheon Supply Agreement
and shall also establish a new [**] binding commitment. In connection with
orders placed at Teva, the JPC will provide each month a rolling [**] month
forecast the first [**] months of which will be binding upon Schering. For such
[**] month binding forecast, Millennium will be authorized to commit purchase
orders to Teva to meet the stocking policies as agreed to by the JPC with the
understanding that purchase orders within the current [**] month period are
locked and are binding with regard to Teva's production schedule. To the extent
allowed by the contract with Teva, purchase orders within the trailing [**]
month period may be rescheduled within the current fiscal year. Millennium
agrees that it will use commercially reasonable efforts to notify Schering and
to assist Schering in avoiding placing orders that, when combined with orders
placed with GSK quantities, will result in a take-or-pay obligation or other
minimum payment obligation or penalty to any Third Party Contractor by Schering.
Millennium shall notify Schering promptly in the event of a potential failure to
meet minimum purchase quantities in any Third Party Agreement.
2.7 PRODUCT SUPPLY. Millennium will order, pursuant to the forecasts agreed
upon by the JPC, Product from the Third Party Product Contractor(s). The Product
will be supplied to Schering in accordance with the terms of the Teva Supply
Agreement and/or the Patheon Supply Agreement, each as may be amended or
replaced from time to time or the relevant provisions of any other Third Party
Product Manufacturing Agreement approved by Schering and the relevant Third
Party Packaging Agreement, as applicable, except that payment terms shall be as
described in Section 5.2 of this Agreement.
2.8 COMPOUND SUPPLY. Millennium will order, pursuant to the forecasts
agreed upon by the JPC and subject to Section 4.2, Compound from Third Party
Compound Manufacturers, in accordance with the terms of the relevant Third Party
Compound Manufacturing Agreements.
2.9 SHORTAGE OF SUPPLY. In the event of a shortage of supply, Millennium
shall allocate any shortage of Compound or Product between Schering for the
Schering Territory and Millennium for the European Territory in proportion to
the respective binding forecasts and orders of Schering and GSK made for the
quarter in which the shortfall occurs.
2.10 NON-CONFORMING PRODUCT
2.10.1 NON-CONFORMING PRODUCT NOTICE. In the event that Product shipped
to Schering does not conform to the Specifications or otherwise comply with
the terms of the relevant Third Party Agreement, Schering shall notify
Millennium within the shorter of thirty (30) days from the date of physical
receipt of the shipment at Schering's premises or the number of days that
is set forth in the relevant Third Party Agreement less three (3) Business
Days to accommodate lead time required for Millennium to transmit the
notice of non-conformance to the Third Party Manufacturer. Schering
understands that Millennium, under Millennium's existing agreement with
Teva, has thirty (30) days from the date of receipt of samples and
completed batch records to provide Teva notice of non-conforming Product.
In order to provide Schering with the benefit of the rights and remedies
available to Millennium under the relevant Third Party Product
Manufacturing Agreement, Millennium shall use Diligent Efforts to test
samples and review documents from a Third Party Product Manufacturer in
sufficient time to notify such manufacturer of any non-conforming Product
(other than a latent defect) within the time periods set forth in the
relevant Third Party Product Manufacturing Agreement. In the event that
Schering discovers any other failure of the Product shipment to conform
with the Specifications or the terms of the relevant Third Party Agreement
(other than as described above in this paragraph 2.10.1 in that such
failure is latent and not obvious) Schering shall notify Millennium within
twenty (20) days from the date of Schering's discovery.
2.10.2 REMEDY. In order to provide Schering with the benefit of the
rights and remedies available to Millennium under the relevant Third Party
Agreements, Millennium shall, upon request from Schering, enforce all of
its rights under the applicable Third Party Agreement with respect to
non-conforming Product delivered pursuant to this Agreement. Millennium's
obligations under this Section 2.10.1 shall survive the termination of this
Supply Agreement with respect to any Product Manufactured during the term
hereof. Except to the extent that Millennium agrees to indemnify Schering
pursuant to Section 10.1 of this Agreement, Schering's sole contractual
rights and remedies in connection with the Manufacture of Product shall be
the obligation of Millennium to exercise the contractual rights and
remedies that Millennium has against the relevant Third Party Product
Manufacturer with respect to non-conforming Product, except that the
timeframes for notification are reduced as described in subsection 2.10.1
above.
2.11 NON-CONFORMING COMPOUND. In order to provide Schering with the benefit
of the rights and remedies available to Millennium under the relevant Third
Party Agreements, Millennium shall use Diligent Efforts to test samples and
review documents from a Third Party Compound Manufacturer in sufficient time to
notify such manufacturer of any non-conforming Compound (other than a latent
defect) within the time periods set forth in the relevant Third Party Compound
Manufacturing Agreement. In addition, Millennium shall, upon request from
Schering, enforce all of its rights under the applicable Third Party Agreement
with respect to incomplete or damaged orders or non-conforming Compound
delivered pursuant to this Agreement. Millennium's obligation under this Section
2.11 shall survive the termination of this Supply Agreement with respect to any
Compound Manufactured during the term hereof. Except to the extent that
Millennium agrees to indemnify Schering pursuant to Section 10 of this
Agreement, Schering's sole contractual rights and remedies in connection with
the Manufacture of Compound shall be the obligation of Millennium to exercise
the contractual rights and remedies that Millennium has against the relevant
Third Party Compound Manufacturer with respect to non-conforming Compound,
except that the timeframe for notification of non-conforming Compound is reduced
to the number of days that is set forth in the relevant Third Party Agreement
less three (3) Business Days to accommodate lead time required for Millennium to
transmit the notice of non-conformance to such Third Party. Schering understands
that the existing Solvay Supply Agreement and the existing UCB Supply Agreement
require notification of non-conformance within sixty (60) days of delivery of
the relevant batch documentation, as described in each such agreement.
2.12 SHIPMENT. Millennium shall, in accordance with Schering's
instructions, provide to the relevant Third Party Contractor validated shipping
configurations and routes for both air and ocean freight and listing of all
required documentation.
2.13 DELIVERY. Delivery of Product and Compound by a Third Party Contractor
shall occur in accordance with the terms of the relevant Third Party Agreement.
Notwithstanding the foregoing, title and risk of loss transfer from Millennium
to Schering upon transfer of title and risk of loss from the Third Party
Contractor to Millennium; provided, however, that in order to provide Schering
with the benefit of the rights and remedies available to Millennium under the
relevant Third Party Agreements, Millennium shall, upon request from Schering,
enforce any and all rights it may have under the applicable Third Party
Agreement with respect to a shipment of Compound or Product that is damaged or
incomplete.
2.14 CHANGE PROCEDURES. Change procedures are as detailed in the Technical
Agreement (attached hereto as Exhibit A). Millennium shall not authorize a Third
Party Contractor to make any change in the materials or processes used in the
Manufacture of Compound or Product, except to the extent authorized in
accordance with the Technical Agreement. Schering shall pay for incremental
costs associated with changes to the process or amendments to the Specifications
that may be initiated by Schering hereunder and agreed to and implemented by
Millennium.
3. MANUFACTURING PLAN
3.1 MANUFACTURING PLAN IMPLEMENTATION
3.1.1 The Parties have agreed upon the Manufacturing Plan, an outline
of which is attached hereto as SCHEDULE B (to be agreed upon and finalized
by the JPC at Closing). Millennium shall use Diligent Efforts to perform
services agreed to in the Manufacturing Plan; provided that Millennium's
obligations to use Diligent Efforts to perform the Manufacturing Plan under
this Supply Agreement shall terminate and become obligations of Schering
upon the effective date of the exercise of the Put option in Section 7.2 by
Millennium if such Put option is exercised prior to the completion of the
Manufacturing Plan (an "Early Manufacturing Plan Transfer to Schering").
In the event that Schering becomes obligated to perform the Manufacturing
Plan, as set forth above, Schering shall solely be responsible to perform
the obligations of the JPC set forth in Section 2.2.1, above.
3.1.2 Subject to the extension allowed under Section 2.3.1, in the
event UCB is not approved by FDA on or before [**], the royalty rate
payable to Millennium is reduced in accordance with the terms set forth in
Section 6.4(iv) of the A-R Agreement. Subject to the extension allowed in
Section 2.3.1, in the event a second supplier or second supply site for
manufacture of Compound utilizing the New Compound Process is not approved
by FDA by [**], the royalty rate payable to Millennium is reduced in
accordance with the terms set forth in Section 6.4(v) of the A-R Agreement.
For clarity, if Schering makes a final decision, as described in
Section 2.3.1, above, to select a second compound supplier or a second
site, whose implementation schedule states that FDA approval will occur
after [**] (in lieu of another qualified potential second compound supplier
or a second site whose implementation schedule states that FDA approval
will occur before [**]), and if the implementation by such supplier or site
actually does cause a delay beyond such date, then the effective date of a
royalty deduction (as described in the preceding sentence), if any, will be
extended for a time period equivalent to the length of time in such
implementation schedule for expected FDA approval beyond [**].
3.1.3 Artwork for Product packaging will be transferred to Schering
promptly after Closing, and Schering will then be responsible for
maintaining artwork revision levels and delivering to Millennium completed
artwork changes for implementation at the relevant Third Party Contractors.
Millennium will work with Schering and the relevant Third Party Contractors
to develop an implementation timeline for any new revision of packaging.
3.2 SECONDARY COMPOUND SUPPLIER
3.2.1 The JPC will select an additional Third Party Compound
Manufacturer that will utilize the New Compound Process ("Secondary
Compound Supplier") no later than September 1, 2005.
3.2.2 Millennium will negotiate and contract with the Secondary
Compound Supplier, subject to Millennium using Diligent Efforts to obtain
agreement with the Secondary Compound Supplier on inclusion in the contract
of covenant and liability provisions substantially similar to the
comparable provisions set forth in SCHEDULE C. The failure of Millennium to
obtain such terms and conditions, after exercising Diligent Efforts, shall
not be a breach of this Supply Agreement.
3.2.3 Millennium will use Diligent Efforts to complete any technical or
methods transfers to, and to otherwise qualify, the Secondary Compound
Supplier unless and until an Early Manufacturing Plan Transfer to Schering.
3.2.4 Schering shall use Diligent Efforts to prepare and file the
regulatory submissions designating the Secondary Compound Supplier as a
manufacturer of Compound. Schering shall provide Millennium with
information from such submission applicable to the Secondary Compound
Supplier to facilitate the Manufacture of Compound in accordance with the
relevant Third Party Agreement and the Regulatory Approvals unless and
until an Early Manufacturing Plan Transfer to Schering.
3.2.5 Millennium shall require the Secondary Compound Supplier to
provide Schering with such information and assistance as Schering may
require for purposes of applying for and maintaining all relevant
Regulatory Approvals for the Product including without limitation,
providing Schering with all reports, authorizations, certificates,
methodologies, specifications and other documentation in the possession or
under the control of Secondary Compound Supplier relating to the
pharmaceutical/technical development and Manufacture of Compound or any
component thereof needed for Schering's filings. Millennium shall require
the Secondary Compound supplier to grant Schering an irrevocable,
worldwide, paid-up license to use such information, data or other
intellectual property rights reflected in such documentation for the
purpose of obtaining and maintaining the Regulatory Approvals in the
Schering Territory for the Product.
3.3 REGULATORY APPROVALS. Millennium shall be responsible for providing
Schering with all supporting data and information relating to the Manufacture of
Compound and Product(s) necessary for obtaining and maintaining Regulatory
Approvals, including, without limitation, all Records, raw data, reports
(including annual product review and annual reports), authorizations,
certificates, methodologies, batch records, raw material specifications, SOPs,
standard test methods, Certificates of Analysis and other batch documentation in
the possession or under the control of Millennium relating to the Manufacture of
Product. The format and content of information to be provided by Millennium to
Schering for Schering submission to a Regulatory Agency shall be agreed in
advance by the Representatives or the JPC.
3.4 NOTIFICATION OF REGULATORY INSPECTIONS. Millennium agrees to notify
Schering immediately, but in no event more than twenty-four (24) hours, after it
obtains notice of any inquiries, notifications, or inspection activity by any
Governmental Authority in regard to the Product or Compound. In furtherance and
not in limitation of the foregoing, Millennium shall notify Schering prior to
the commencement of any inspection activity by any Governmental Authority,
unless such inspection activity is an unannounced inspection. Subject to Section
2.5 of this Supply Agreement and to Millennium's rights under the Third Party
Agreements, Schering shall have the right to be present at any such inspection.
Further, subject to Millennium's authority to obtain the following information
under the Third Party Agreements, Millennium shall provide a reasonable
description to Schering of any such governmental inquiries, notifications or
inspections promptly (but in no event later than two (2) calendar days) after
such visit or inquiry. Millennium shall furnish to Schering, (a) within two (2)
days after Millennium's receipt, any report or correspondence issued by the
Governmental Authority in connection with such visit or inquiry, including but
not limited to, any FDA Form 483, Establishment Inspection Report, or warning
letter, and (b) copies of any and all responses or explanations to any
Governmental Authority relating to items set forth above, in each case purged
only of trade secrets of Millennium or the applicable Third Party Contractor
that are unrelated to its/their obligations under this Supply Agreement or the
Third Party Agreement, as the case may be, and are unrelated to the Product or
Compound, prior to the submission of such responses or explanations to any
Governmental Authority by Millennium or the Third Party Contractor.
3.5 RECORDS
3.5.1 GENERALLY. Millennium shall, and shall require its Third Party
Contractors to, complete and retain records related to the Manufacture of
Compound and Product for the Schering Territory in accordance with
applicable Laws and the requirements specified in the Technical Agreement
("Records"). Millennium shall not transfer, deliver or otherwise provide
any such Records to any party other than Schering, without the prior
written approval of Schering unless required by applicable Law. For routine
Manufacture, Millennium shall make summary batch records available at
reasonable times and with reasonable notice for inspection, examination and
copying by or on behalf of Schering. For cause, Millennium shall provide
all Records related to the Product as required to resolve for cause
investigations. All original Records of the Manufacture and supply of
Compound and Product hereunder shall be retained and archived by
Millennium or its contractors in accordance with cGMP and applicable Law,
but in no case for less than a period of five (5) years following delivery
of such Product or, in the case of Compound, five (5) years following
delivery of the Product into which the Compound has been incorporated (the
"Retention Period"). Millennium shall provide written notice to Schering no
less than sixty (60) days prior to the end of the Retention Period. If
requested by Schering, Millennium shall ship such documents to Schering.
Upon Schering's request, Millennium shall promptly provide Schering with
copies of such records. If Schering does not make such a request, then,
after the Retention Period, copies of all of the aforementioned records
shall no longer be available to Schering through Millennium.
3.5.2 CERTIFICATES AND BATCH RECORDS. Millennium shall supply to
Schering one (1) completed a certificate of analysis and any other
certifications that may be required relating to the Product that is the
subject of any batch record at the time the Product is delivered.
Millennium shall provide Schering a report for the validation batches
required for any significant changes to the Manufacturing process or the
Product Facility for each batch of Product Manufactured summarizing, but
not limited to, the analytical results for each batch Manufactured, the
stability results, details of any batch failures, process deviations and
any out of Specification results as provided for in this Supply Agreement.
Upon receipt of instruction from Schering, Millennium shall complete and
lodge with the appropriate authorities where required all documentation
relating to Product where delivery involves export from the country of
Manufacture.
4. TRANSACTIONS UPON CLOSING
4.1 COMPOUND IN INVENTORY. Schering agrees to purchase from Millennium all
Compound in inventory existing at the time of Closing at a price equal to the
standard cost plus manufacturing variances. In the event that any quantity of
such Compound purchased by Schering pursuant to this Section 4.1 is damaged or
nonconforming and cannot be utilized in the Manufacture of Product, Millennium
shall reimburse Schering [**] percent ([**]%) of the amount paid for the
quantity of such Compound. At Closing, Millennium will prepay to Schering for
product to be supplied by Millennium to GSK. By making such prepayment,
Millennium shall have, and is hereby granted, a purchase money security interest
in the quantities of Compound for which it has made such prepayment. Millennium
shall assume, solely, the risk of loss for the quantities of Compound for which
it has made such prepayment. The Compound inventory amount, its price and the
quantities for which Millennium will prepay are listed on SCHEDULE D hereto.
4.2 COMPOUND ON ORDER. Schering agrees to reimburse Millennium for all
prepayments made by Millennium to Third Party Contractors as set forth on
SCHEDULE D hereto in connection with current purchase orders issued for
Compound.
5. PRICE AND PAYMENT
5.1 PAYMENT FOR INVENTORY AND PREPAYMENTS EXISTING AS OF CLOSING. Schering
shall pay Millennium for any amounts due under Sections 4.1 and 4.2 by wire
transfer at Closing. Millennium shall pay Schering for any amounts due under
Section 4.1 at the same time that Schering shall pay Millennium.
5.2 PAYMENT FOR MANUFACTURING OF COMPOUND AND PRODUCT. For Compound and
Product delivered and invoiced to Millennium pursuant to the terms of a Third
Party Agreement, Millennium shall invoice Schering for the quantity shipped by
the Third Party Contractor at an amount equal to the Cost of Goods Shipped per
unit of Compound or Product, as applicable. Schering shall pay to Millennium the
amounts due under such Millennium invoice by the date that is five (5) calendar
days prior to the date by which payment is due to be paid by Millennium under
the Third Party Agreement, but in no event will Schering be required to make
such payment to Millennium prior to [**] calendar days from Schering's receipt
of Millennium's invoice. For purchases of Compound, Schering will make payments
to Millennium by wire transfer. Payments by Schering to Millennium for Product
may be made by check or wire.
5.3 PAYMENT FOR PREPAYMENT OBLIGATIONS. Schering shall pay Millennium for
any amounts due in connection with prepayments required for Compound or Product
under any relevant Third Party Agreements. By way of example, as of the
Execution Date, under the existing Solvay (Peptisyntha) agreement, [**] percent
([**]%) of the value of the orders placed during that year are due before the
end of that September. In addition, under the existing (as of the Execution
Date) UCB Supply Agreement, a prepayment is due for key raw materials annually,
with the exact date and amount to be determined as set forth in Section 5.1 of
the UCB Supply Agreement.
5.4 CAPITAL EQUIPMENT COSTS IN CONNECTION WITH THE SECONDARY COMPOUND
SUPPLIER. Regardless of whether Millennium or Schering exercise their respective
rights to either a Put or a Call pursuant to Section 7.2 or 7.3, respectively,
Schering and Millennium will share equally the cost of capital equipment,
including any related software and cost of installation and start-up for such
equipment, charged by the Third Party Contractor, necessary to qualify the
Secondary Compound Supplier.
5.5 PAYMENT FOR MILLENNIUM'S SERVICES IN CONNECTION WITH IMPLEMENTING THE
MANUFACTURING PLAN. For its services required to implement the Manufacturing
Plan, Millennium shall invoice Schering quarterly for [**] percent ([**]%) of
its labor costs at the hourly rates based upon FTE Rates for the categories of
personnel plus direct, out of pocket expenses. Attached as SCHEDULE E are the
hourly rates for each category of personnel as of the Execution Date, which
rates have been calculated consistent with the practices of the Parties in the
implementation of the Collaboration Agreement prior to the Execution Date and
are equal to the following: the amount of the salary and other monetary
compensation that Millennium has incurred for the specified category of
personnel plus benefits, actual departmental expenses incurred, including but
not limited to depreciation, supplies and expenses and allocated utilities, the
sum of which is divided by 2080. Payment of each Millennium invoice shall be
made by Schering within [**] calendar days from the date of Schering's receipt
of such invoice. Schering shall make all payments pursuant to this Supply
Agreement by check or wire transfer to a bank account designated in writing by
Millennium. All payments hereunder shall be made in United States Dollars.
5.6 LATE PAYMENTS. In the event that Schering does not make payments to
Millennium pursuant to Section 5.2 above, by the date established pursuant to
the terms of Section 5.2, then, to the extent that any interest payment
obligations or late fees that are (i) imposed upon Millennium under the terms of
the applicable Third Party Agreement and (ii) actually assessed against
Millennium by the third party, Schering shall be obligated to reimburse
Millennium the amount of. such interest payment or late fee applicable to the
number of days that Schering's payment was delinquent. In the event that
Schering does not make payments to Millennium pursuant to Section 5.6 above,
then Millennium reserves the right to invoice Schering a 1.5% per month late
fee on all open balances due Millennium without foregoing any other remedies
hereunder.
6. TECHNICAL AGREEMENT; AUDIT RIGHTS
6.1 TECHNICAL AGREEMENT. Schering and Millennium have entered into a
Technical Agreement, a copy of which is attached as EXHIBIT A hereto and by this
reference is made a part hereof as if fully set forth herein. Millennium shall
perform its obligations agreed to in the Technical Agreement.
6.2 AUDIT RIGHTS. Millennium shall use Diligent Efforts to enforce its
contractual rights under the Third Party Manufacturing Agreements to audit the
quality systems of the Third Party Contractors and to use Diligent Efforts to
assure that the Third Party Contractors maintain systems of operation and
quality assurance that are consistent with applicable laws, including without
limitation cGMPs, as defined in the Technical Agreement. With respect to the
Manufacture of Compound and Product, Millennium will use Diligent Efforts to
assure such systems shall include written policies and procedures that address,
at a minimum the following:
o Quality Systems,
o Facilities and Equipment Systems,
o Materials Systems,
o Production Systems,
o Packaging and Labeling Systems, and
o Laboratory Control Systems.
Schering's representatives may accompany Millennium representatives as
observers on Millennium scheduled audits of Third Party Contractors, to the
extent Schering is permitted to do so under the Third Party Agreements, or as
otherwise permitted by such contractors. Millennium shall use its Diligent
Efforts to secure such permission in its agreements with all other Third Party
Contractors prior to entering into such agreements. In addition, Schering shall
have the right to request through Millennium additional audits for cause. Audits
for cause shall be conducted in the same manner as described above with
Millennium Quality Assurance representative leading the conduct of the audit and
Schering representatives as observers. Millennium shall promptly respond to
Schering's request and the Parties shall agree on the time, scope and manner of
the audit. Notwithstanding the foregoing, the Parties understand and agree that
all technical and other contact with such Third Party Product Contractors
relating to INTEGRILIN Product(s) shall be made solely through Millennium,
except for communications between Schering and the Third Party Contractors
permitted under Section 2.4, above. In the event that Schering discovers a
deficiency in its observation of the Millennium audit that Millennium disputes,
such matter shall be referred to the Joint Production Committee for discussion
and resolution by mutual agreement. For purposes of clarity, the restrictions in
this Supply Agreement regarding contact with Third Party Contractors relate only
to the Compound, Product and INTEGRILIN Product(s) and not to any matters that
are the subject of other Schering contractual arrangements with such Third Party
Contractors.
7. TRANSFER OF RESPONSIBILITY OF SUPPLY TO SCHERING
7.1 MILLENNIUM'S EFFORTS; UCB AND EARLY MANUFACTURING PLAN TRANSFER TO
SCHERING. To facilitate the transfer to Schering of responsibility for supply of
Compound and Product, Millennium shall use Diligent Efforts to execute the
following:
7.1.1 Millennium shall negotiate with the Secondary Compound Supplier
selected by the JPC to execute two, separate contracts for the Manufacture
of Compound, one that is assignable to Schering and one that is either
directly with, or assignable to GSK, in proportion to their respective
requirements for Compound:
7.1.2 Assist and encourage GSK to qualify a facility operated by, or in
contract with, GSK to manufacture product from Compound for GSK's own
requirements of product; and
7.1.3 Negotiate with UCB, GSK and Schering, provide information or
assistance to any such entity, and execute necessary contractual releases
or modifications in order for UCB to have separate agreements with Schering
and GSK for the Manufacture of Compound. To facilitate the assignment of
the UCB Supply Agreement in connection with an Early Manufacturing Plan
Transfer to Schering, Schering hereby agrees to permit Millennium to
release up to [**] of annual manufacturing capacity allocated to Millennium
under the UCB Supply Agreement for re-allocation under a separate agreement
to be entered into between Millennium or GSK with UCB for the express
purposes of supplying Compound to the European Territory. Such release of
capacity shall only become effective upon the effective date of the Put
option in Section 7.2 in connection with Early Manufacturing Plan Transfer
to Schering. In such event, Millennium shall have the right to assign to
Schering the UCB Supply Agreement amended to provide that the take or pay
supply rights and purchase obligations apply to an annual amount of at
least [**] and not more than [**]. Schering shall, upon request of
Millennium, furnish any consents or authorizations reasonably necessary to
facilitate such amendment with UCB.
7.2 PUT OPTION. At any time after [**], Millennium has the option to
transfer to Schering, on [**] advance notice to be given no earlier than [**],
all Third Party Compound Manufacturing Agreements and all Third Party Product
Manufacturing Agreements and the related Third Party Packaging Agreements to the
extent necessary to supply Schering will its required share of the quantities of
Compound and Product Manufactured for the Schering Territory and to provide
Schering all contractual rights of Millennium under such agreements
7.3 CALL OPTION. Schering may choose to require Millennium to transfer
responsibility for manufacturing and supply to Schering as follows:
7.3.1 FOR API, PRODUCT AND PACKAGING SIMULTANEOUSLY. At any time after
the date by which two Third Party Compound Manufacturers utilizing the New
Compound Process are approved by FDA to Manufacture Compound to be used in
Product, Schering has the option to require Millennium to transfer all
Third Party Compound and Product Manufacturing Agreements and Third Party
Packaging Agreements to Schering on [**] advance notice to be given no
earlier than receipt of FDA approval for the Secondary Compound Supplier;
provided, however, that in the event that (i) neither of such Third Party
Compound Manufacturers is approved by the applicable regulatory authority
to supply GSK with Compound, or (ii) in spite of Millennium's Diligent
Efforts pursuant to Section 7.1, above, both Third Party Compound
Manufacturers refuse to supply GSK separately from supplying Schering, the
[**] of advance notice shall be extended to the extent necessary to remove
the obstacle(s) giving rise to either clause (i) or (ii) of this paragraph
7.3.1, and Millennium shall remain obligated to continue such Diligent
Efforts set forth in Section 7.1, above.
7.3.2 FOR PACKAGING ALONE. Subject to the termination and notice
provisions and penalties, if any, of the Third Party Packaging Agreements
for INTEGRILIN Products, Schering has the option to require Millennium to
transfer all Packaging Vendor Agreements to Schering at any time, upon [**]
advance notice.
7.4 EFFECT OF PUT OR CALL. Upon the effectiveness of either a Put or Call
in accordance with Section 7 of this Agreement, and, upon Schering's request,
Millennium shall effect any transfer of applicable data, know-how and
information immediately forthwith and provide commercially reasonable assistance
to Schering to enable Schering to assume the Third Party Agreements, as
applicable. Any associated internal Millennium costs shall be borne by
Millennium. The parties shall identify and segregate, and Millennium will take
title to any quantities of Compound for which Millennium has paid with respect
to the European Territory. Subject to any allocations pursuant to a shortage of
supply under Section 2.9, above, in the event that the quantity of such
Millennium inventory is less than an amount equal to [**] of inventory for the
European Territory, Millennium shall purchase the difference in quantity in
order to take title to such [**] quantity.
8. TERM AND TERMINATION
8.1 TERM AND TERMINATION. Unless earlier terminated by mutual agreement of
the Parties, the term of this Supply Agreement shall commence on the Closing and
shall terminate on the earlier of (i) the effective date of either the Call
Option or the Put Option in accordance with Article 7 of this Agreement to the
extent all of the rights under the Call Option and/or Put Option have been fully
exercised and (ii) the termination of the A-R Agreement. This Supply Agreement
shall terminate upon any termination or expiration of the A-R Agreement.
8.2 TERMINATION FOR BREACH. Either Party may, without prejudice to any
other remedies available to it at Law or in equity, terminate this Supply
Agreement in the event that the other Party (as used in this subsection, the
"Breaching Party") shall have materially breached or defaulted in the
performance of any of its obligations under this Supply Agreement. The Breaching
Party shall, if such breach can be cured, have sixty (60) days after written
notice thereof was provided to the Breaching Party by the non-breaching Party to
remedy such default (or, if such default cannot be cured within such 60-day
period, if the Breaching Party must commence and diligently continue actions to
cure such default during such sixty (60)-day period). Any such termination shall
become effective at the end of such sixty (60)-day period unless the Breaching
Party has cured any such breach or default prior to the expiration of such sixty
(60)-day period (or, if such default is capable of being cured but cannot be
cured within such sixty (60)-day period, the Breaching Party has commenced and
diligently continued actions to cure such default provided always that, in such
instance, such cure must have occurred within one hundred twenty (120) days
after written notice thereof was provided to the Breaching Party by the
non-breaching Party to remedy such default unless such cure period is extended
by the non-breaching Party).
8.3 EFFECT OF TERMINATION OF THE A-R AGREEMENT. In the event this Supply
Agreement terminates due to the termination of the A-R Agreement, the Parties
shall have no further obligations hereunder other than as set forth in Section
8.7 hereof or in the A-R Agreement.
8.4 EFFECTS OF EXPIRATION. Upon the expiration of this Supply Agreement,
each Party, at its own cost, shall promptly return to the other Party, or
destroy at the Disclosing Party's request, all relevant records and materials in
such Party's possession or control containing Confidential Information of the
other Party (provided that each Party may keep one copy of such Confidential
Information of the other Party for archival purposes and to comply with
applicable Laws).
8.5 PURCHASE OF INVENTORIES. Upon expiration or termination of this Supply
Agreement, Schering shall be obligated to purchase any amounts of Compound or
Product (complete or in-process) that are the subject of an open purchase order
placed by Millennium consistent with the binding forecast approved by the JPC,
at a price to be mutually agreed (it being understood that such price shall
reflect, on a pro rata basis, work performed and non-cancelable out-of-pocket
expenses actually incurred by Millennium). In addition, unless otherwise agreed
by Millennium, Schering shall purchase any raw materials identified in the
Specifications for the Manufacture of Compound or Product, as applicable, that
were purchased but not used in the Manufacturing process at the applicable cost
of such raw materials. Raw materials for purposes of this Section 8.5 shall
include, but not be limited to components and materials necessary to manufacture
either the Product or the API.
8.6 ACCESS TO RECORDS/MAINTENANCE OF CRITICAL SAMPLES AND TEST PROGRAMS.
Upon termination of this Supply Agreement, Millennium shall (a) provide Schering
access for a period up to one (1) year after the latest expiry date of Product
batches or, with respect to Compound batches, up to one (1) year after the
latest expiry date of Product into which the Compound has been incorporated, as
applicable, produced under this Supply Agreement to records, reports and master
files relating to the Products or Compound batches, as applicable, to enable
Schering (i) to answer complaints, (ii) to answer queries from Governmental
Authorities or (iii) to conduct investigations necessary to ensure the safety,
efficacy and compliance of the Product, and, (b) if Millennium is unable to
continue to retain such records transfer such records to Schering.
8.7 SURVIVAL. Notwithstanding anything in this Supply Agreement to the
contrary, the following provisions herein shall survive any expiration or
termination of this Supply Agreement: Sections 2.3, 2.10.2, 2.11, 3.5.1, 7.4,
8.3, 8.4, 8.5, 8.6, 8.7, 9.3, 11.1, 11.2, 11.3, 11.4, 11.5, 11.6, 11.7, 11.8,
11.9, 11.10, 11.12, 11.13, and Articles 5 and 10, and the provisions of the
Technical Agreement which by their terms survive such expiration or termination.
9. REPRESENTATIONS AND WARRANTIES
9.1 THE PARTIES. Each Party represents and warrants to the other Party
that: (a) it has the full right, power and authority to enter into this Supply
Agreement and to perform its obligations hereunder, (b) it has taken all
necessary action on its part to authorize the execution and delivery of this
Supply Agreement and the performance of its obligations hereunder; (c) this
Supply Agreement has been duly executed and delivered on behalf of it, and
constitutes a legal, valid and binding obligation, enforceable against it in
accordance with the terms hereof; (d) the execution and delivery of this Supply
Agreement and the performance of its obligations hereunder do not conflict with,
or constitute a default under any contractual obligation of such Party; and (e)
it has sufficient capability and resources to fulfill its obligations set forth
in this Supply Agreement.
9.2 DEBARMENT. During the Term of this Supply Agreement and subject to the
terms of the Third Party Agreements existing as of the Execution Date,
Millennium shall use commercially reasonable efforts not to use, and shall use
Diligent Efforts to require Third Party Contractors not to use, in any capacity
associated with or related to the manufacture of the Products, the manufacturing
functions of any persons who have been, or are in the process of being, debarred
under the Generic Drug Enforcement Act of 1992, amending the Food, Drug and
Cosmetic Act at 21 U.S.C. ss. 335a or any comparable Law.
9.3 DISCLAIMER. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH HEREIN, NO PARTY
MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES OF ANY KIND, EITHER EXPRESS
OR IMPLIED, TO THE OTHER PARTIES, AND EACH PARTY HEREBY DISCLAIMS ALL IMPLIED
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND
NONINFRINGEMENT WITH RESPECT TO THE PRODUCT AND THE COMPOUND.
10. INDEMNIFICATION; RECALLS
10.1 MILLENNIUM. Millennium shall defend, indemnify and hold harmless
Schering, its Affiliates and its and its Affiliates' respective directors,
officers, employees and agents (collectively, the "Schering Indemnified
Parties"), from, against and in respect of any and all actions, liabilities,
losses, costs (including but not limited to costs of investigation, defense and
enforcement of this Supply Agreement), damages, fines, penalties, Government
Orders, taxes, expenses or amounts paid in settlement (in each case, including
but not limited to reasonable attorneys' and experts fees and expenses)
(collectively, "Losses") incurred or suffered by, or asserted against, the
Schering Indemnified Parties or any of them resulting directly or indirectly
from: (i) any material breach of, or material inaccuracy in, any representation
or warranty made by Millennium in this Supply Agreement; (ii) any material
breach or material violation of any covenant or agreement by Millennium in or
pursuant to this Supply Agreement; or (iii) Third Party product liability claims
to the extent resulting from defects in Product or Compound Manufactured, in
whole or to the extent in part, or otherwise supplied by or on behalf of
Millennium under the terms of this Supply Agreement; except, (a) in each case,
to the extent caused by the negligence, gross negligence or willful misconduct
of, or violation of Law by, Schering or any of the other Schering Indemnified
Parties and (b) in connection with clause (iii) of this Section 10.1, in the
event that Schering exercises its tie-breaking authority and makes a final
decision to reduce Millennium's responsibilities for testing and quality review
of a new Manufacturer of Product or Compound (as compared to its
responsibilities with respect to Manufacturers approved by FDA as of the
Execution Date) pursuant to Section 2.2.1 (c) above, Millennium's
indemnification obligation under clause (iii) of this Section with respect to
Product or Compound Manufactured by the relevant Third Party Contractor shall
not apply with respect to the Compound or Product released under such new
allocation of responsibilities.
10.2 SCHERING. Schering shall defend, indemnify and hold harmless
Millennium, its Affiliates and its and its Affiliates' respective directors,
officers, employees and agents (collectively, the "Millennium Indemnified
Parties"), from, against and in respect of any and all Losses incurred or
suffered by, or asserted against, the Millennium Indemnified Parties or any of
them, resulting directly or indirectly from: (i) any material breach of, or
material inaccuracy in, any representation or warranty made by Schering in this
Supply Agreement or (ii) any material breach or material violation of any
covenant or agreement of Schering in or pursuant to this Supply Agreement;
except, in each case, to the extent caused by the negligence, gross negligence
or willful misconduct of, or violation of Law by, Millennium or any of the other
Millennium Indemnified Parties.
10.3 RECALLS. Schering shall be responsible for the expenses of recall, not
otherwise covered by the relevant Third Party Agreement.
10.4 CLAIMS FOR INDEMNIFICATION. The provisions of Sections 13.5 and 13.6
of the A-R Agreement shall apply to claims for indemnification under this
Section 10.
11. ADDITIONAL OBLIGATIONS OF THE PARTIES
11.1 COMPLIANCE WITH LAWS. Each Party agrees to comply with all applicable
Laws in the performance of its obligations under this Supply Agreement.
11.2 CONFIDENTIALITY. The provisions of Article 10 of the A-R Agreement
shall apply to Confidential Information of the Parties disclosed pursuant to
this Supply Agreement and to the terms of this Supply Agreement. For purposes of
clarity, the terms of this Supply Agreement and the information contemplated to
be exchanged hereunder, including but not limited to forecast schedules, are
deemed to be Confidential Information.
11.3 FORCE MAJEURE. Except as otherwise expressly set forth in this Supply
Agreement, no Party shall be deemed to have defaulted under or breached this
Supply Agreement for failure or delay in fulfilling or performing any term of
this Supply Agreement when such failure or delay is caused by or results from
causes beyond the reasonable control of the affected Party, including, without
limitation, fire, floods, embargoes, shortages, epidemics, quarantines, war,
acts of war, acts of terrorism, insurrections, riots, civil commotion, strikes,
lockouts or other labor disturbances, acts of God or acts, omissions or delays
in acting by any Governmental Authority ("Force Majeure Event"). The Party
affected by any Force Majeure Event shall promptly notify the other affected
Parties, explaining the nature, details and expected duration thereof. Such
Party shall also notify the other Parties from time to time as to when the
affected Party reasonably expects to resume performance in whole or in part of
its obligations hereunder, and notify the other Parties of the cessation of any
such event. A Party affected by a Force Majeure Event shall use commercially
reasonable efforts to remedy, remove or mitigate such event and the effects
thereof with all reasonable dispatch. If a Party anticipates that a Force
Majeure Event may occur, such Party shall notify the other Parties of the
nature, details and expected duration thereof. Upon termination of the Force
Majeure Event, the performance of any suspended obligation or duty shall
promptly recommence.
11.4 NOTICES. Any notice or report required or permitted to be given or
made under this Supply Agreement by one of the Parties to the other shall be in
writing and shall be deemed to have been delivered upon personal delivery on the
same day, if sent via facsimile with confirming receipt on the same day (except
if such notice is not sent on a Business Day, then on the next Business Day), or
the next Business Day following deposit with a reputable overnight courier with
confirming receipt as follows (or at such other addresses or facsimile numbers
as may have been furnished in writing by one of the Parties to the other as
provided in this Section 11.4):
If to Millennium: Millennium Pharmaceuticals, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
X.X.X.
Attention: Vice President of Pharmaceutical Operations
Facsimile No.: (000) 000-0000
With a copy to: Millennium Pharmaceuticals, Inc.
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000-0000
X.X.X.
Attention: General Counsel
Facsimile No.: (000) 000-0000
If to Schering: Schering Corporation
0000 Xxxxxx Xxxxxx
Xxxxx, Xxx Xxxxxx 00000
Attention: Vice President, Global Materials Management
Facsimile No.: (000) 000-0000
Schering-Plough Corporation
With a copy to: 0000 Xxxxxxxxx Xxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Senior Legal Director, Manufacturing
Facsimile No: (000) 000-0000
11.5 CHOICE OF LAW. This Supply Agreement shall be governed by and
interpreted under the Laws of the State of New York (without giving effect to
principles of conflicts of laws that would require the application of any other
law).
11.6 SEVERABILITY. If, under applicable Law, any provision of this Supply
Agreement is invalid or unenforceable, or otherwise directly or indirectly
affects the validity of any other material provision(s) of this Supply Agreement
(such invalid or unenforceable provision, a "Severed Clause"), this Supply
Agreement shall endure except for the Severed Clause. The Parties shall consult
one another and use reasonable efforts to agree upon a valid and enforceable
provision that is a reasonable substitute for the Severed Clause in view of the
intent of this Supply Agreement.
11.7 CAPTIONS. All captions herein are for convenience only and shall not
be interpreted as having any substantive meaning.
11.8 INTEGRATION. The Transaction Agreements, this Supply Agreement
(including the attached Schedules and Exhibit), and the Technical Agreement
taken together constitute the entire agreement between the Parties hereto with
respect to the subject matter of this Supply Agreement and supersede all
previous agreements, whether written or oral. In the event of a conflict
regarding quality and change control matters between this Supply Agreement on
the one hand, and the Technical Agreement on the other hand, the terms of the
Technical Agreement shall control.
11.9 INDEPENDENT CONTRACTORS; NO AGENCY. No employee or representative of a
Party shall have any authority to bind or obligate the other Party to this
Supply Agreement for any sum or in any manner whatsoever, or to create or impose
any contractual or other liability on the other Party without said Party's
written approval. For all purposes, and notwithstanding any other provision of
this Supply Agreement to the contrary, the legal relationship of Schering under
this Supply Agreement to Millennium shall be that of independent contractors.
11.10 DISPUTE RESOLUTION. The provisions of Article 14 of the A-R Agreement
shall apply to any disputes of the Parties arising under this Supply Agreement.
11.11 ASSIGNMENT; SUCCESSORS. No Party may assign this Supply Agreement in
whole or in part, nor any rights hereunder, by merger, operation of Law or
otherwise, without the prior written consent of the other Party; provided that
this Supply Agreement may be assigned by a Party to a Third Party (including an
Affiliate or successor following a change in control to the extent permitted
under the A-R Agreement) in connection with the assignment to such Third Party
of such Party's rights and obligations under the A-R Agreement. Any assignment
made other than in accordance with the immediately preceding sentence shall be
wholly void and invalid, and the assignee in any such assignment shall acquire
no rights whatsoever, and the non-assigning Party shall not recognize, nor shall
it be required to recognize, such assignment. This Section 11.11 limits both the
right and the power to assign this Supply Agreement and/or rights under this
Supply Agreement. This Supply Agreement shall be binding upon, and shall inure
to the benefit of, all permitted successors and assigns.
11.12 NO BENEFIT TO THIRD PARTIES. The representations, warranties,
covenants and agreements set forth in this Supply Agreement are for the sole
benefit of the Parties hereto and their successors and permitted assigns, and
they shall not be construed as conferring any rights on any other persons.
11.13 NO CONSEQUENTIAL DAMAGES. NEITHER PARTY WILL BE LIABLE FOR SPECIAL,
INCIDENTAL, CONSEQUENTIAL, EXEMPLARY, PUNITIVE, MULTIPLE OR OTHER INDIRECT
DAMAGES ARISING OUT OF THIS SUPPLY AGREEMENT OR THE EXERCISE OF ITS RIGHTS
HEREUNDER, OR FOR LOSS OF PROFITS, LOSS OF DATA OR LOSS OF USE DAMAGES ARISING
FROM OR RELATING TO ANY BREACH OF THIS SUPPLY AGREEMENT WHETHER BASED XXXX
XXXXXXXX, XXXXXXXX, XXXX, XXXXXX LIABILITY OR OTHERWISE, REGARDLESS OF ANY
NOTICE OF SUCH DAMAGES. NOTHING IN THIS SECTION 11.13 IS INTENDED TO LIMIT OR
RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY UNDER THIS
SUPPLY AGREEMENT, EXCEPT FOR ANY INDEMNIFICATION CLAIMS PERTAINING TO ANY BREACH
OF THIS SUPPLY AGREEMENT.
11.14 EXECUTION IN COUNTERPARTS; FACSIMILE SIGNATURES. This Supply
Agreement may be executed in counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original, and all of which
counterparts, taken together, shall constitute one and the same instrument even
if the Parties have not executed the same counterpart. Signatures provided by
facsimile transmission shall be deemed to be original signatures. Both Parties
agree that a photocopy of such facsimile may also be treated by the Parties as
an original.
[Remainder of This Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the Parties have caused this Supply Agreement to be
executed by their duly authorized representatives.
SCHERING CORPORATION MILLENNIUM PHARMACEUTICALS, INC.
By: /s/ XXXXXXX XXXXXX By /s/ XXXXXX X. XXXXXXX
------------------------------ --------------------------------------
Name (Print): XXXXXXX XXXXXX Name (Print): XXXXXX X. XXXXXXX
-------------------- ---------------------------
Title: VICE PRESIDENT Title: SVP, GENERAL COUNSEL & SECRETARY
--------------------------- ----------------------------------
Date: Date:
---------------------------- -----------------------------------
SCHEDULE A-1
COMPOUND SPECIFICATIONS
--------------------------------------------------------------------------------
Millennium Pharmaceuticals, Inc.
--------------------------------------------------------------------------------
MATERIAL SPECIFICATION
--------------------------------------------------------------------------------
Title: Eptifibatide Bulk Lyophilized (Peptisyntha or Diosynth) Shelf-Life
Specification for Use in the Manufacture of U.S. and Canadian 22/2 Product
--------------------------------------------------------------------------------
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Test Method Number Specifications
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B-1
SCHEDULE A-2
PRODUCT SPECIFICATIONS
--------------------------------------------------------------------------------
Millennium Pharmaceuticals, Inc.
--------------------------------------------------------------------------------
MATERIAL SPECIFICATION
--------------------------------------------------------------------------------
Title: INTEGRILIN(R) (eptifibatide) Injection, 2 mg/mL, 10 mL (U.S. and Canada
Commercial) Shelf-Life Specification
--------------------------------------------------------------------------------
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Test Method Number Guideline Limits
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2
--------------------------------------------------------------------------------
Millennium Pharmaceuticals, Inc.
--------------------------------------------------------------------------------
MATERIAL SPECIFICATION
--------------------------------------------------------------------------------
Title: INTEGRILIN(R) (eptifibatide) Injection, 0.75 mg/mL, 100 mL (U.S. and
Canada Commercial) Shelf-Life Specification
--------------------------------------------------------------------------------
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Test Method Number Guideline Limits
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Millennium Pharmaceuticals, Inc.
--------------------------------------------------------------------------------
MATERIAL SPECIFICATION
--------------------------------------------------------------------------------
Title: INTEGRILIN(R) (eptifibatide) Injection, 2 mg/mL, 100 mL (U.S.
Commercial) Shelf-Life Specification
--------------------------------------------------------------------------------
3
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4
SCHEDULE B
MANUFACTURING PLAN
MANUFACTURING PLAN ELEMENT SP ROLE MLNM ROLE
REGARDING DRUG PRODUCT MANUFACTURING
[**]
[**] execute
[**] file support
[**] file support
[**] execute
[**] decide support
[**]
[**] execute
[**] execute
[**] support
[**]
[**]
[**] decide execute
[**] decide execute
[**] decide execute
REGARDING DRUG SUBSTANCE
NEW Process [**]
[**] execute
[**] file support
Current suppliers
[**] execute
[**] decide execute
New source
[**] execute
[**] decide assist
[**] decide assist
[**] execute
[**] execute
[**] execute
[**] file US support
[**] file support
REGARDING ANALYTICAL DEVELOPMENT
New analytical method
[**] execute
[**] file support
5
SCHEDULE C
SECONDARY COMPOUND SUPPLIER CONTRACT LIABILITY PROVISIONS
Millennium will use Diligent Efforts pursuant to Section 3.2.2 of the Supply
Agreement to include provisions substantially similar to the following;
A. APPROVAL FOR MANUFACTURING CHANGES; THIRD PARTY MANUFACTURINGompany
agrees not to make or allow any of its suppliers to make material changes in any
materials, equipment or methods of production or testing used in the Manufacture
of Bulk Active and identified in the relevant regulatory filing without
Schering's prior written consent. Company shall notify Schering promptly in
writing of any such changes that may be required by GMPs or other applicable
law, rule or regulation in the Territory or the country of Manufacture. Company
agrees not to contract with any third party to conduct part or all of the
Manufacturing or testing of Bulk Active without the prior written consent of
Schering, which consent can be withdrawn at any time.
B. RECALL EXPENSES. Company shall bear the expenses of any recall resulting from
a breach of its obligations hereunder. Such expenses of recall shall include,
without limitation and without duplication, the expenses of notification and
destruction or return of the recalled Product, the sum paid by to Company for
the Manufacture of Compound utilized in the manufacture of the recalled
Products, Millennium's costs relating to the testing, packaging, and shipping of
such recalled Products, and the amount of any prepayments. Company shall not be
liable for, and Millennium hereby waives any right to, any claim for
consequential, incidental, special, or punitive damages, including all claims
for lost profits or lost opportunities resulting from any such recall. The
rights of Schering under this Section shall be in addition to, and not in lieu
of, any other rights not inconsistent with this Agreement that Schering may have
under this Agreement or at law. [Note: The parties agree that our intial
position will be to ask for this provision withour offering a cap on liability,
but that, if requested, we can offer a cap starting with a substantial amount
and then, if necessary, working toward a lesser amount.]
C. REMEDY FOR INTENTIONAL BREACH. In the event the supplier breaches
deliberately, the supplier will pay MPI/SP [as liquidated damages] $X [multiple
of relevant amounts such as annual sales of INTEGRILIN or annual purchases of
product from that Supplier (for example, the avg of the last 2 years of
purchases)] up to some agreed upon cap. There would be a carve out for this
remedy in the No Consequential Damages section of the Agreement.
D. COVENANTS; REPRESENTATIONS AND WARRANTIES
1. COMPANY'S COVENANTS. Company covenants that,
a. at the time of delivery of Bulk Active to the designated
carrier pursuant to SECTION hereof, the Bulk Active shall
i. have been Manufactured, stored and shipped in accordance
with applicable GMPs and all other applicable laws, rules,
regulations or requirements of Regulatory Authorities in the
Territory and the country of Manufacture;
ii. have been Manufactured in accordance with the Schering
Manufacturing Know-How, including without limitation the Bulk
Specifications and the CMC;
iii. have been Manufactured no more than [insert reasonable #
for API based on our anticipated delivery schedule] months
prior to delivery to the designated carrier pursuant to
SECTION ___hereof; and
iv. be in good, usable and merchantable condition and fit for
its intended purpose. [Note: Although we intend to try for
this, the Parties understand that this covenant is very
difficult to get. Usually, it is expressly excluded.]
v. it will have good and marketable title, free and clear of
any liability, pledge, lien, restriction, claim, charge,
security interest or other encumbrance, to all Bulk Active
delivered to the designated carrier pursuant to SECTION 3.2
hereof;
vi. it will not use in any capacity, in connection with the
services to be performed under this Agreement, any person who
has been debarred pursuant to Section 306 of the FDCA
(codified at 21 U.S.C. ss.335a), or who is, to the Company's
knowledge, the subject of a conviction described in such
section;
vii. it will inform Schering in writing immediately if it or
any person who is performing services hereunder is debarred or
is the subject of a conviction described in of the FDCA 306, or
if any action, suit, claim, investigation, or legal or
administrative proceeding is pending or, to the best of
Company's knowledge, is threatened, relating to the debarment
or conviction of Company or any person performing services
hereunder;
viii. it will promptly notify Schering in writing of any
material adverse change in the business of Company; and
ix. will notify Schering in writing of any representation or
warranty ceasing to be true or correct.
2. COMPANY'S REPRESENTATIONS AND WARRANTIES.
Company represents and warrants that,
a. it has the appropriate skills, personnel, equipment,
permits, and approvals necessary or useful to perform its
obligations under this Agreement in compliance with the Laws;
b. it owns or has the right to sublicense or assign the use
of, as contemplated by the terms of this Agreement, all
Intellectual Property rights necessary or useful in the
Manufacture and sale of Bulk Active;
c. its Intellectual Property does not infringe the
Intellectual Property rights of any third party;
d. it owns or has the right to sublicense or assign the use
of, as contemplated by the terms of this Agreement, all
Intellectual Property rights necessary or useful in the
Manufacture and sale of Bulk Active;
e. it owns or has the right to sublicense or assign the use
of, as contemplated by the terms of this Agreement, all
Intellectual Property rights necessary or useful in the
Manufacture and sale of Bulk Active;
f. it is not aware of any infringement of its Intellectual
Property rights;
g. no material adverse change has occurred within the past
six (6) months, with respect to Company and its operations
including without limitation material changes in or to its;
i. financial position;
ii. insurance coverage;
iii. threatened or pending legal claims;
iv. labor pool;
v. suppliers;
vi. quality assurance systems; or
vii. key personnel;
h. except as set forth on SCHEDULE [ ] hereto, it has good
and marketable title, free and clear of any liability, pledge,
lien, restriction, claim, charge, security interest or other
encumbrance to the equipment and other assets useful or
necessary to Manufacture Bulk Active; and
i. it has not been and is not subject to debarment with
respect to Bulk Active sold in the United States.
3. COMPANY'S AND SCHERING'S REPRESENTATIONS AND WARRANTIES. Each of
Company and Schering hereby represents and warrants to the other as follows:
a. it is a corporation duly organized and
validly existing under the laws of the state
or other jurisdiction in which it is
incorporated;
b. the execution, delivery and performance of
this Agreement by such party has been duly
authorized by all requisite corporate
action;
c. it has the power and authority to execute
and deliver this Agreement and to perform
its obligations hereunder;
d. the execution, delivery and performance by
such party of this Agreement and its
compliance with the terms hereof does not
and will not conflict with or result in a
breach of any term of, or constitute a
default under (i) any agreement or
instrument binding or affecting it or its
property; (ii) its charter documents or
bylaws; or (iii) any order, writ, injunction
or decree of any court or governmental
authority entered against it or by which any
of its property is bound;
e. it has obtained any consent, approval or
authorization of, or notice, declaration,
filing or registration with, any
governmental or Regulatory Authority
required for the execution, delivery and
performance of this Agreement by such party,
and the execution, delivery and performance
of this Agreement will not violate any law,
rule or regulation applicable to such party;
f. this Agreement has been duly executed and
delivered and constitutes such party's
legal, valid and binding obligation
enforceable against it in accordance with
its terms subject, as to enforcement, to
bankruptcy, insolvency, reorganization and
other laws of general applicability relating
to or affecting creditors' rights and to the
availability of particular remedies under
general equity principles; and
g. it shall comply with all applicable material
laws and regulations relating to its
activities under this Agreement.
SCHEDULE D
COMPOUND INVENTORY AT CLOSING
SCHEDULE D BALANCE 9/1/05 STANDARD COST EXTENDED VALUE
-----------------------
BULK INVENTORY
[**]
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TOTAL BULK INVENTORY [**] [**] [**]
------------------------------------==============---------------===============
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PRE PAID BULK INVENTORY [**] [**]
-----------------------------------------------------------------===============
PRE APPROVED INVENTORY [**] [**]
[**] [**] [**]
[**] [**] [**] [**]
============================================
[**] [**] [**] [**]
==============
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TOTAL PRE APPROVED INVENTORY [**]
-----------------------------------------------------------------===============
------------------------------------------------------------------
--------------------------------------------------------------------------------
TOTAL INVENTORY TRANSFER
9-1-2005 [**]
-----------------------------------------------------------------===============
------------------------------------------------------------------
LESS: [**] [**] [**] [**]
============================================
------------------------------------------------------------------
TOTAL WIRE TRANSFER
TO BE RECEIVED [**]
--------------------------------------------------------------------------------
SCHEDULE E
MILLENNIUM FTE COSTS
RATE*
Tech Ops [**]
Supply Ops [**]
Quality Assurance [**]
Analytical Technical Services [**]
Regulatory [**]
Other [**]
G&A (Legal, Finance, HR) [**]
NOTES:
*FTE rates will be recalculated annually during the Term
FTE rates do not include travel costs or third party tech transfer expenses,
which shall be 100% reimbursed by Schering
EXHIBIT A
TECHNICAL AGREEMENT
ON
CONTRACT MANUFACTURING
BETWEEN
SCHERING CORPORATION
0000 XXXXXXXXX XXXX XXXX
XXXXXXXXXX, XX 00000
AND
MILLENNIUM PHARMACEUTICALS, INC.
00 XXXXXXXXXX XXXXXX
XXXXXXXXX, XX 00000
TECHNICAL AGREEMENT SIGNATORIES
--------------------------------------------------------------------------------
PREPARED BY: ___________________________________ DATE: ____________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONTRACT GIVER
SCHERING-PLOUGH LEGAL ENTITY: _______________________________________________
ADDRESS: __________________________________________________________
-----------------------------------------------------------
AUTHORIZED REPRESENTATIVE: _______________________ DATE: ____________
SIGNATURE: ______________________________________
TITLE: __________________________________________
AUTHORIZED REPRESENTATIVE: _______________________ DATE: ____________
SIGNATURE: ______________________________________
TITLE: __________________________________________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
CONTRACT ACCEPTOR
COMPANY NAME LEGAL ENTITY:________________________________________
ADDRESS: _________________________________________________________
---------------------------------------------------------
AUTHORIZED REPRESENTATIVE: ________________________ DATE: ___________
SIGNATURE: ______________________________________
TITLE: __________________________________________
AUTHORIZED REPRESENTATIVE: _______________________ DATE: ____________
SIGNATURE: _____________________________________
TITLE: __________________________________________
-------------------------------------------------------------------------------
TABLE OF CONTENTS
TECHNICAL AGREEMENT SUMMARY....................................................7
GENERAL REQUIREMENTS...........................................................8
DEFINITIONS....................................................................9
ANNUAL PRODUCT REVIEW AND ANNUAL REPORT.......................................10
CERTIFICATES OF ANALYSIS AND COMPLIANCE.......................................11
CONTACTS..................................................................... 11
CONTROL DOCUMENTATION AND CHANGE CONTROL......................................12
DEVIATIONS AND INVESTIGATIONS.................................................14
FIELD ALERT REPORT............................................................14
FINISHED PRODUCT TESTING......................................................15
LABELING CONTROLS.............................................................15
OBSOLETE, WASTE AND REJECTED MATERIALS DISPOSITION............................16
PRODUCT COMPLAINT AND ADVERSE EVENT MANAGEMENT................................16
RECALL........................................................................17
RECORDS AND RETAINED SAMPLES RETENTION........................................18
REGULATORY COMPLIANCE.........................................................18
REPROCESSING/ REWORKING.......................................................19
RESTRICTED MATERIALS..........................................................19
SELF-INSPECTION...............................................................20
STABILITY.....................................................................20
STORAGE AND SHIPPING CONDITIONS...............................................21
SUBCONTRACTING................................................................21
TECHNICAL DISPUTE RESOLUTION..................................................22
VALIDATION AND QUALIFICATION..................................................22
EXHIBIT I..................................................................24
LIST OF PRODUCTS...........................................................24
EXHIBIT II.................................................................25
DIVISION OF RESPONSIBILITIES...............................................25
EXHIBIT III................................................................29
EXAMPLE CERTIFICATE OF COMPLIANCE..........................................29
EXHIBIT IV.................................................................30
EXAMPLE CERTIFICATE OF ANALYSIS............................................30
EXHIBIT V..................................................................31
STORAGE AND TRANSPORT CONDITIONS...........................................31
EXHIBIT VI.................................................................32
BATCH NUMBERING AND EXPIRY DATE SYSTEM.....................................32
EXHIBIT VII................................................................33
SPECIAL REQUIREMENTS.......................................................33
EXHIBIT VIII...............................................................34
QUALITY CONTACT............................................................34
TECHNICAL AGREEMENT SUMMARY
MANUFACTURING ACTIVITIES OVERVIEW
This Technical Agreement concerns the Manufacture, packaging, analysis and
release of INTEGRILIN for delivery to Schering.
Millennium will release INTEGRILIN that has been Manufactured by Third Party
Contractors to Schering in accordance with the applicable regulatory filings.
Millennium will contract Third Party Contractors to deliver packaged INTEGRILIN
drug product as described by this Technical Agreement, to Schering Plough
distribution facilities as determined by Schering. Millennium will provide a
Certificate of Analysis and Certificate of Conformance to Schering for each lot.
Schering Quality Assurance will release INTEGRILIN drug product for distribution
in the Territory.
ARTICLE I
GENERAL REQUIREMENTS
1.1 Millennium acknowledges the regulated nature of Schering business and
operations, and therefore, agrees to comply with the requirements of this
Agreement and specifications as referenced in the exhibits.
1.2 This document constitutes the Technical Agreement as required by the rules
governing principles of good manufacturing practices in respect (cGMP)
required by the US Food and Drug Administration per the "Code of Federal
Regulations", 21 CFR, and other applicable governmental agencies.
1.3 This document defines the responsibilities of Schering and Millennium for
assuring compliance with cGMPs and quality activities associated with
pharmaceutical production, packaging, testing and release of product. This
agreement contains, as Exhibit II, a check list summary of activities
associated with pharmaceutical production, packaging, testing and release
assigned to either Schering or Millennium with responsibility indicated by
checkmark. All elements on the checklist must be assigned if applicable.
Non-applicable items should be clearly indicated as (N/A). This Agreement
applies to the products listed in Exhibit I (the "Products").
1.4 This document does not define the business relationship or requirements. To
the extent that any provision of this Technical Agreement is inconsistent
with the Supply Agreement, the Supply Agreement shall govern for matters
pertaining to the subject matter hereof.
1.5 Notice and Consent
Schering recognizes the importance of respecting the privacy of
personal data, and seeks to comply with all applicable data protection
laws. In order to transact its business with Millennium, Schering relies on
personal information collected from the Authorized Representatives
executing this Agreement, such as their names, titles and other information
about their activities that are the subject of this Agreement, and may need
to process such personal data for accounting and invoicing purposes, and
for other purposes specified herein.
Schering also may need to transfer the data of Millennium's
Authorized Representatives (including details of this agreement) to third
parties, including other companies within the Schering group of companies,
their advisors, and third parties for general administrative, monitoring
and related purposes, as well as local or foreign regulatory authorities
where required by law. Such personal data may be transferred to other
countries in the European Economic Area ("EEA") and outside the EEA,
including the United States, whose laws may not protect personal data to
the same degree as laws in your own country of residence.
By entering into this Agreement with Schering, Millennium's
Authorized Representatives are signifying their agreement to our processing
of their personal data as described herein.
ARTICLE II
DEFINITIONS
Capitalized terms used but not otherwise defined in this Technical Agreement
shall have the meaning ascribed thereto in the Supply Agreement between the
Parties of even date.
2.1 CONTRACT ACCEPTOR
The party or organization that is being contracted to provide
service.
2.2 CONTRACT GIVER
The party or organization soliciting service to be performed under
contract.
2.3 CGMPS
Refer to good manufacturing regulations as defined by 21CFR 210
and 211; Directive 2003/94/EC; MHW Ordinance No. 62, Health
Canada, Division 2, Part C of the Food and Drug Regulations and
similar documents.
2.4 MARKETING AUTHORIZATION
Authorization issued by a regulatory agency for marketing and sale
of Product.
2.5 PRODUCT QUALITY COMPLAINT
Any written, electronic or oral communication by a customer,
medical practitioner, or distributor that alleges deficiencies
related to the identity, quality or purity of a product or other
product defect after it is released for distribution.
2.6 QUALIFIED PERSON
The quality professional under European Regulations who is legally
responsible for the quality and release of product into commerce
(Refer to Exhibit II, Section F.4). For the purpose of this
agreement the qualified person shall also refer to the quality
professional within the United States, Canada and other countries
with the responsibility to review, approve, and release product(s)
based on assurance of pre determined quality standards and GMPs.
2.7 AUTHORIZED CONTRACTOR
Third Party Contractors engaged by Millennium to perform
Manufacturing of the Product.
ARTICLE III
ANNUAL PRODUCT REVIEW AND ANNUAL REPORT
ANNUAL PRODUCT REVIEW
3.1 Millennium will provide annually to Schering, within 30 calendar days of the
date established by Schering and agreed to by Millennium, a copy of the Annual
Product Review for the Product.
3.2 Millennium shall have written procedures that describe performance of the
Annual Product Review. The procedures must minimally provide for a written
report documenting the review of:
i. All batches whether approved or rejected along with applicable
drug product in-process control data that may be collected by the
Authorized Contractor and release data
ii. Rejected batch history and rejection rate
iii. Complaints and adverse events received during the period.
iv. Recalls and Field Alerts
v. Reworked or reprocessed batches and returned or salvaged product.
vi. Change control
vii. Investigations of discrepancies, deviations or failure to meet
specification.
viii. Stability data including retained sample visual inspection.
ix. Yields, as applicable.
x. Validation activity
xi. Assessment of the overall production for the specified period.
3.3 Data and observations resulting from the review of records should be treated
as follows:
i. Trend production and analytical data and compare to statistical
control limits established for the Product.
ii. Note continuous improvement opportunities
iii. Compare data with previous year's data for the Product, if
available.
ANNUAL REPORT
3.4 Schering is responsible to prepare an Annual Report for the Product as
required by government regulations. In order to satisfy this requirement,
Millennium must provide certain Product information to Schering upon written
request, as follows:
i. Required information will be requested at least 90 calendar
days before its due date, the due date being the date Schering
needs the information for inclusion in their Annual Report,
and that accommodates any internal processing and review
period within Schering.
ii. Millennium will make Diligent Efforts to provide the
information to Schering upon the due date. In the unlikely
event that a report can not be provided within that timeframe
Schering will be informed and a commitment to provide same no
later than 60 calendar days after the requested due date will
be made.
iii. Information collected for the Annual Product Review may
satisfy, in part, this request for information.
ARTICLE IV
CERTIFICATES OF ANALYSIS AND COMPLIANCE
4.1 Schering requires a Certificate of Analysis (COA) from Millennium to
accompany each lot of delivered Product. The COA must list the Product's
Specifications, test results obtained for the particular lot, test method
reference, and the signature of the person authorized to release the lot to
Schering. In addition, the location where the Product was manufactured and
tested, if different from that on the letter head, must be identified. A
Certificate of Compliance (COC) that states the lot was Manufactured under cGMP
conditions must accompany the lot or the declaration may appear on the COA.
4.2 Schering may request copies of batch documentation including the executed
batch record and associated deviations and investigations.
4.3 Millennium shall have a program in place to qualify and assess periodically
the performance of its Authorized Contractors, regardless of whether Millennium
receives a COA/COC for each delivery of material.
4.4 All raw materials must comply with TSE (transmissible spongiform
encephalopathy)/ BSE (bovine spongiform encephalography) guideline EMEA /410/01
Rev. 1) and Residual Solvent guideline (ICH Topic QC3, Impurities: Residual
Solvents). In addition, raw materials should be traceable to the original
supplier.
ARTICLE V
CONTACTS
5.1 Schering and Millennium, from time to time, will need to exchange
information relative to the services provided. Millennium will identify
knowledgeable, readily accessible Quality Contacts (Exhibit VIII) who can
provide information as required by this agreement and respond to queries. The
Millennium Quality Contacts will perform as follows:
i. Provide the Annual Product Review report, where
applicable, and any information needed by Schering to
complete the Annual Report for the Product.
ii. Notify Schering of any regulatory agency
communications or contacts related to the Product,
and provide a copy of documents requested and left by
the authorities within one business day.
iii. Provide and accept information related to changes of
artwork, packaging materials, drug components,
analytical procedures and method of manufacture and
control.
iv. Notify Schering of stability trends or non
conformance to specification.
v. Provide an investigation report for consumer
complaints received from Schering and manage
investigation of any complaint received directly.
vi. Meet with Schering, as necessary, to discuss
technical matters.
vii. Advise Schering of confirmed process deviations or
out of specification (OOS) results that impact batch
delivery
viii. Provide a COA and COC for each finished batch
shipment.
5.2 Schering will identify knowledgeable, readily accessible Quality Contacts
(Exhibit VIII) who can provide information as required by this agreement and
respond to queries. The Schering Quality Contacts will perform as follows:
i. Provide a copy of the Annual Report to Millennium upon
completion of the report
ii. Notify Millennium of any regulatory agency communications or
contacts related to the Product, and provide a copy of documents
requested and left by the authorities within one business day.
iii. Provide and accept information related to changes of artwork,
packaging materials, drug components, analytical procedures and
method of manufacture and control.
iv. Meet with Millennium, as necessary, to discuss technical matters.
v. Make Diligent Efforts to ensure timely processing of change
controls as described in Article VI. vi. Provide timely
periodic updates of regulatory submission status related to
the Product.
ARTICLE VI
CONTROL DOCUMENTATION AND CHANGE CONTROL
6.1 Millennium shall maintain a system of written quality procedures,
manufacturing instructions and facilities details that accurately reflect the
processing specifications. In cases where Millennium receives contract
manufacturing or testing services from an Authorized Contractor, Millennium's
access to such information is subject to the terms of the Third Party
Agreements. In addition, subject to the terms of the relevant Third Party
Agreements existing as of the Execution Date, a change management system that
tracks and controls changes to such documents exists at each Third Party
Manufacturer. Schering must receive advance notification of any change to these
documents with a potential regulatory impact as part of change management.
6.2 Significant changes to the manufacturing or packaging process, raw
materials, product specifications or quality control methods for the Product
require the prior written agreement of Schering. Examples of condition where
prior agreement of Schering is required include, but is not necessarily limited
to, the following:
i. Changes affecting the validated process, packaging or testing
methodology
ii. Changes to dedicated facilities, utilities or systems
iii. Any change having an impact on the regulatory filing
6.3 Schering and Millennium recognize the importance of expeditious review and
implementation of changes, particularly those affecting product quality or the
ability to supply Product. Subject to the terms of the Supply Agreement and
relevant Third Party Agreements
a. Schering reserves the right upon written notice to Millennium to amend
Product Specifications to comply with cGMPs, health registrations or incorporate
improvements and
b. Millennium will implement such changes to, minimally, ensure compliance
with regulatory agency and cGMP requirements. Millennium will manage such
changes with its Authorized Contractors as applicable. Changes will be reviewed
by Schering and Millennium prior to implementation utilizing a change control
procedure. Disputes of implementation feasibility, scope, or strategy will be
addressed by the Joint Production Committee Processes as described in the Supply
Agreement. Any cost impact will be governed by the relevant Supply Agreement.
c. Changes, as described in Section 6.2, initiated by Millennium,
Millennium's Authorized Contractor, or Schering, that do not require regulatory
agency submission or are annual reportable, will be reviewed and dispositioned
within 10 business days of receipt by the reviewing party. Disposition is
approval, rejection, or reasonable and necessary request for more information.
d. Changes, as described in Section 6.2, initiated by Millennium,
Millennium's Authorized Contractor, or Schering , that require prior
notification or prior approval with a regulatory agency, will be reviewed and
dispositioned within 20 business days of receipt by the reviewing party.
Disposition is approval, rejection, or reasonable and necessary request for more
information.
e. Disputes of regulatory impact assessment will be addressed by the Joint
Production Committee as described in the Supply Agreement.
f. Schering agrees to make Diligent Efforts to expeditiously file and gain
regulatory approval of changes impacting product quality or the ability to
supply product.
ARTICLE VII
DEVIATIONS AND INVESTIGATIONS
7.1 Millennium shall or shall request its Authorized Contractor to, subject to
the terms of the relevant Third Party Agreement, investigate thoroughly any
unplanned deviation from approved procedure or out of specification test result.
The investigation must adhere to an approved, written procedure and be
documented. Review and approval of the investigation by Millennium's Quality
Unit is required prior to disposition of the Product. In the case of deviation
investigation by Millennium's Authorized Contractor, Millennium QA will review
and approve such investigations prior to release of the batch to Schering, in
accordance with Millennium batch review and supplier qualification procedures.
No Product involved in an investigation may be released to Schering until the
investigation is completed.
7.2 Millennium must inform Schering within one business day of any confirmed
deviation or out of specification result that could affect delivery of the
Product. Millennium will inform Schering of its investigation plans if so
requested by Schering.
7.3 Millennium shall track and trend corrective and preventive actions (CAPA) in
response to deviations. In the case of CAPA performed by Authorized Contractors,
the Authorized Contractor will track and trend CAPA. Millennium will
periodically review CAPA performance of its Authorized Contractors.
ARTICLE VIII
FIELD ALERT REPORT
8.1 Millennium will notify Schering within one business day upon obtaining
reasonable evidence of any event that may necessitate a Field Alert. Schering is
responsible for determining the need for, and for filing with the FDA, any
initial, follow-up or final Field Alert Report for any product manufactured
under Schering's NDA or Marketing Authorization (MA). Should the Report involve
or implicate manufacturing, transport or testing operations or facilities
managed by Millennium, or a Millennium Authorized Contractor, Schering will
confer with Millennium regarding the content of such reports and provide
Millennium, to the extent feasible within the reporting requirements set forth
in FDA regulations, with the Report for review prior to submission to the FDA.
8.2 A copy of the Field Alert Report or follow-up report relating to the quality
of the product manufactured by Millennium will be sent to Millennium within
three (3) business days after it is filed with the FDA.
ARTICLE IX
FINISHED PRODUCT TESTING
9.1 Millennium and Millennium's Authorized Contractors performing manufacture of
Product shall have written procedures in place for sampling and testing each
batch of the Product prior to release. The procedures, at a minimum, should
include:
i. Examination of a representative sample of units at the
conclusion of finishing operations for correct labeling.
ii. Appropriate laboratory testing for conformance to final
specifications, including identity and strength of each active
ingredient.
iii. Current and approved test methods and acceptance criteria.
iv. Sampling plans based on commonly accepted statistical criteria.
9.2 Millennium must notify Schering of any batch of the Product that does not
meet its release specifications, and authorization for the release of such batch
to Schering must come from Schering.
9.3 Millennium's Authorized Contractors Manufacture drug product and API, and
Millennium produces and releases drug product lots to Schering. Schering
releases drug product lots for distribution to market.
ARTICLE X
LABELING CONTROLS
10.1 Schering shall provide 90 days written notification to Millennium of any
planned change to the labeling or printed packaging. Millennium shall make
Diligent Efforts to implement such labeling changes per Schering schedule
requirements. Notwithstanding the foregoing, Millennium and Schering will ensure
labeling changes mandated by a regulatory agency are implemented per the
requirements of the regulatory agency with regard to content and implementation
timing.
10.2 Millennium will provide existing label artwork to Schering. Schering will
edit artwork and approve label artwork changes. Millennium or Millennium's
Authorized Contractors will manage label printing. Schering will approve printer
proofs. Such labeling includes package insert, vial labels, and printed cartons.
ARTICLE XI
OBSOLETE, WASTE AND REJECTED MATERIALS DISPOSITION
11.1 Schering and Millennium shall mutually agree upon procedures for return or
certified destruction of any excess, expired, obsolete or rejected materials.
11.2 Millennium or its Third Party Contractors shall provide a Certificate of
Destruction when materials are destroyed at Schering's request.
11.3 Subject to the terms of the relevant Third Party Agreements, the Third
Party Contractors shall comply with all applicable environmental and safety laws
and regulations pertaining to handling of any waste arising from the Manufacture
of bulk or finished product.
ARTICLE XII
PRODUCT COMPLAINT MANAGEMENT
12.1 Product complaints will be reported to Millennium QA. Millennium will
manage Product complaints, including receipt and evaluation of complaints,
complaint investigation, Product return, complaint history trending, and
correspondence with complainants, including complainant response letters. After
December 1, 2005, Schering will assume such responsibilities as well as all of
those set forth in Article XII, provided that Millennium continues its
investigation responsibility under sections 12.4 through 12.9.
12.2 Complaints received by Schering will be forwarded to Millennium QA for
processing.
12.3 Millennium will provide completed Product complaint files to Schering that
include:
i. The original complaint as received by Millennium
ii. Millennium's complaint evaluation and investigation
iii. All complainant correspondence
iv. Any analysis performed in support of the investigation
v. Complaint summary and corrective actions
vi. Complainant response letter
12.4 Millennium Product complaint investigations shall include the following, as
applicable:
i. Manufacturing records review.
ii. Product test results review.
iii. Validation, calibration, and maintenance records review.
iv. Shipping controls review.
v. Product complaint trend history.
vi. Impact on other lots of the Product.
vii. Corrective actions (if any) and associated implementation plan.
12.5 Millennium will not test returned Product or retain samples without written
authorization from Schering. Such testing is at Schering's discretion.
12.6 Millennium will use Diligent Efforts to provide Schering with completed
complaint reports within 30 calendar days of Millennium QA's receipt of the
complaint.
12.7 Millennium will notify Schering within 1 business day upon obtaining
reasonable evidence of any product complaint related to Product adulteration,
contamination, tampering, misbranding, lack of stability, lack of sterility, or
otherwise reasonably interpreted as having significant safety or regulatory
consequences.
12.8 Millennium will use Diligent Efforts to provide Schering with completed
complaint reports of Urgent complaints within 15 calendar days. Urgent
complaints are reports of Product adulteration, contamination, tampering,
misbranding, lack of stability, lack of sterility, or otherwise reasonably
interpreted as having significant safety or regulatory consequences.
12.9 In cases where Millennium investigations are not likely to be provided to
Schering within the timeframes described above, Millennium will provide an
interim investigation report at those timeframes.
ARTICLE XIII
RECALL
13.1 Schering shall have sole responsibility for initiating and managing any
recall of Product(s) Manufactured by Millennium or Millennium Authorized
Contractors. Millennium shall be informed prior to the initiation of a recall.
13.2 There shall be timely exchange of information between Millennium and
Schering about any potential recall, as follows:
i. Millennium shall immediately inform Schering in writing of any
circumstances that have come to its attention, which may make
a recall necessary.
ii. In the event any Regulatory Authority issues or requests a
recall, Schering or Millennium shall within 24 hours notify the
other party.
iii. Within 48 hours of learning that a recall may be necessary,
Schering and Millennium shall discuss details of the recall
strategy.
13.3 Schering shall make available a company representative to witness the
destruction of Product returned to Millennium or Authorized Contractors as the
result of a recall. Recall material returned to Millennium or their Authorized
Contractors shall be sent to Schering or to Schering's designated Recall Service
Provider, at the direction of Schering.
ARTICLE XIV
RECORDS AND RETAINED SAMPLES RETENTION
14.1 Millennium and Millennium Authorized Contractors shall retain records and
samples in accordance with the terms of the Supply Agreement and the relevant
Third Party Agreements, as applicable and in accordance with regulatory
requirements and cGMP.
ARTICLE XV
REGULATORY COMPLIANCE
15.1 Millennium, or Millennium Authorized Contractors, as applicable, shall
operate a facility and conduct all manufacturing operations in accordance with
current good manufacturing practice regulations, guidelines and accepted
industry practices during term of the Supply Agreement. These requirements may
include but are not limited to the following:
i. Maintain a quality assurance system and facilities that comply
with GMPs regulations and related Guidelines applicable to
Millennium's facility: e.g., 21CFR 210 and 211, and
2003/94/EC.
ii. Satisfy the requirements of 21 CFR Part 11, or an
equivalent standard, where applicable, for any electronic
records and computer systems.
iii. Manufacture the products in keeping with regulatory
filings and amendments thereto by Schering.
15.2 Millennium shall provide Schering with information and assistance as
required for the purpose of applying for and maintaining Product registrations.
ARTICLE XVI
REPROCESSING/ REWORKING
16.1 Millennium shall notify Schering in advance of plans to rework or reprocess
Product unless an already agreed upon procedure exists and there are no trends,
or as permitted by 16.2. No change shall be made to a validated process without
the prior written authorization of Schering's Quality Unit. Reprocessing of
active pharmaceutical ingredient (API) will be performed per Millennium's
Authorized Contractor's procedure with review by Millennium QA, subject to the
terms of the relevant Third Party Agreements existing as of the Execution Date.
16.2 Millennium and Millennium Authorized Contractors may not reprocess Product,
unless reprocessing to correct defects of the type that from time to time arise
during a packaging run (e.g., jams which damage secondary packaging) due to
machine capabilities. Such routine reprocessing must be documented in the
packaging record. The reprocessing of non-routine Product defects must be
authorized in writing by Schering's Quality Unit.
16.3 Millennium Authorized Contractors performing Product Manufacture shall have
written procedures that describe the system for reworking or reprocessing
product. The system must provide for trending and include corrective and
preventive action (CAPA). For reprocessed Product to be considered releasable,
all predetermined specifications and other quality criteria must be met.
ARTICLE XVII
RESTRICTED MATERIALS
17.1 Millennium shall notify Schering in advance of the introduction of any
highly sensitizing, toxic or hazardous material to the sites performing the
manufacure of the Product.
17.2 Penicillins, cephalosporins and beta lactams may not be manufactured in the
same building as the Product. The following chemicals and biologics require
dedicated and self-contained manufacturing areas. Introduction of any of these
materials into equipment used for the Product requires prior written consent.
i. Dihydroergotamine
ii. Tetracyclines, nitrofurantoin, streptomycin, vancomycin,
chloramphenicol, neomycin, polymyxin B, and amphotericin B
iii. All hormone products and derivatives
iv. All pesticides, fungicides and rodenticides
v. Blood products and vaccines.
vi. All cytotoxic, embryotoxic and antineoplastic agents
17.3 If Schering or Millennium identifies a potential problem of cross
contamination arising from any materials listed above, the other party must be
provided timely written notice.
ARTICLE XVIII
SELF-INSPECTION
18.1 Millennium & its Authorized Contractors engaged in Manufacturing shall,
subject to the terms of the relevant Third Party Agreements, maintain a written
program of self-inspection by technical personnel for all cGMPs areas, as
follows:
i. Inspections shall be conducted at least annually in keeping
with a schedule. The persons performing the inspection should
be knowledgeable in their respective fields and familiar with
cGMPs.
ii. A report must be made of the observations.
iii. Management must evaluate the observations and corrective
actions. Agreed upon corrective action must be initiated and
tracked.
iv. A record of the observations and corrective actions shall be
maintained.
ARTICLE XIX
STABILITY
19.1 Millennium shall manage stability analysis of the Product in accordance
with cGMP and ICH guidelines. The program shall be in writing and at a minimum
have the following elements:
i. Product specific stability protocols that detail sample size,
analytical methods, test intervals, storage condition(s) and
reason for the study
ii. Criteria for batch selection for the program
iii. Secure, alarmed and qualified xxxxxxxx
iv. Manual and/or electronic data collection
v. Statistical analysis capability
vi. Out-of-specification or trend investigation and notification
mechanism vii. Data summarization and distribution
19.2 Millennium shall provide Product stability reports to Schering with the
Annual Product Review. Schering may request stability data from Millennium as
necessary to address specific issues such as investigations, filing support, or
product complaints. Millennium will notify Schering Quality within one business
day of confirmation of any aberrant findings from the stability program of the
Product.
ARTICLE XX
STORAGE AND SHIPPING CONDITIONS
20.1 In accordance with relevant Third Party Agreements, Authorized Contractors
shall hold intermediates and Products in defined areas under appropriate
conditions of temperature, humidity, and light and in accordance with any
specifications in Exhibit V so that quality is not affected. In addition, in
accordance with relevant Third Party Agreements, Authorized Contractors shall
have written procedures that describe storage, handling and distribution of the
Product and minimally address:
i. Periodic verification of actual storage conditions at Millennium
Authorized Contractor facilities.
ii. Storage of semi-finished or finished product under controlled
labeled conditions
iii. Handling of product that has been subjected to improper storage
conditions
iv. Selection and preparation of product for shipment
v. Monitoring to ensure shipping conditions have been maintained
where particular requirements exist.
20.2 Notwithstanding the foregoing, Schering agrees that Product may be
shipped directly to Schering, based upon an Authorized Contractor's release,
under quarantine pending Millennium's release.
ARTICLE XXI
SUBCONTRACTING
21.1 To the extent that the Supply Agreement authorizes Millennium to
subcontract and subject to the terms of the Third Party Agreements existing as
of the Execution Date, product Manufactured by the Third Party Contractors must
meet all relevant regulatory requirements and all requirements of this Technical
Agreement.
ARTICLE XXII
TECHNICAL DISPUTE RESOLUTION
22.1 To the extent that the Supply Agreement allows, Schering and Millennium
agree to employ the following approach for resolving differences of opinion with
respect to product quality or manufacturing practice, or testing practice,
regardless of the origin of the dispute:
i. The first step is direct communication between the parties in
disagreement to eliminate any possibility of miscommunication
or difference in analytical methodology.
ii. Where testing differences are thought to exist between the
parties, once there is agreement that laboratory methodology
is the same, controlled split samples may be exchanged between
sites for analysis.
iii. Only after these avenues have been exhausted will a referee
laboratory be engaged. The laboratory selected must be
acceptable to both parties and assays must be appropriately
qualified.
22.2 Millennium will cooperate with Schering in investigating manufacturing
problems and product complaints arising from contracted services, and provide
reports of progress as detailed in the Supply Agreement.
22.3 In the event of any inconsistency between the Technical Agreement and
Supply Agreement, the Supply Agreement will control, except for quality
compliance topics expressly provided for in this Technical Agreement.
ARTICLE XXIII
VALIDATION AND QUALIFICATION
23.1 Certain Millennium Authorized Contractors, as required by GMP, shall have a
written Validation Plan that will result in the ability to provide documented
evidence that manufacturing processes will consistently deliver Product meeting
predetermined quality specifications. All operations and systems that could
influence product quality, safety or efficacy must be qualified or validated as
a condition of use, as follows:
i. Qualification of facilities, utilities and equipment used in the
manufacture, testing and storage of the Product
ii. Qualification of packaging equipment
iii. Validation of test methods and qualification of persons
performing testing
iv. Validation of sanitizing and cleaning methods
v. Validation of computer systems and logic controllers
23.2 Revalidation is required for transferred Products, and Products for which
there has been a significant change to the manufacturing process, including
materials and/or equipment. In addition, re-qualification is required for
systems that undergo major change or extensive maintenance. Schering and
Millennium will decide the number of batches required for revalidation based on
significance of the change. This requirement will be satisfied through change
control.
23.3 Except to the extent permitted in the relevant Third Party Agreement no
changes shall be made to a validated process or system without the written
agreement of Schering.
23.4 Millennium will provide to Schering, at Schering's request, specific
process validation reports and summaries performed by Millennium, or
Millennium's Authorized Contractors.
EXHIBIT I
LIST OF PRODUCTS
INTEGRILIN(R) (eptifibatide) Injection, 0.75 mg/mL, 100 mL
INTEGRILIN(R) (eptifibatide) Injection, 2.0 mg/mL, 100 mL
INTEGRILIN(R) (eptifibatide) Injection, 2.0 mg/mL, 10 mL
EXHIBIT II
DIVISION OF RESPONSIBILITIES
--------------------------------------------------------------------------------
DIVISION OF RESPONSIBILITIES
--------------------------------------------------------------------------------
REQUIREMENT SCHERING MILLENNIUM OR
MILLENNIUM
AUTHORIZED
CONTRACTOR
---------------------------------------------- --------------- ----------------
A. REGULATORY COMPLIANCE
---------------------------------------------- --------------- ----------------
Maintain valid manufacturing license X X
---------------------------------------------- --------------- ----------------
Maintain valid product registration X
---------------------------------------------- --------------- ----------------
Adhere to approved New Drug Application/ X X*
Market Authorization
* Millennium's responsibility is
subject to receipt of information by
Millennium Quality or Regulatory
Affairs relevant to the then current
NDA from Schering
---------------------------------------------- --------------- ----------------
Provide access to history of and actions X
resulting from government inspections
---------------------------------------------- --------------- ----------------
Maintain documentation of personnel training X
---------------------------------------------- --------------- ----------------
Perform calibration of instruments X
and equipment at suitable intervals
---------------------------------------------- --------------- ----------------
Provide liaison for annual facilities X
audit and any for cause audits
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
B. RAW MATERIALS- ACTIVE INGREDIENTS
AND EXCIPIENTS
---------------------------------------------- --------------- ----------------
Provide Specification X
---------------------------------------------- --------------- ----------------
Provide Sampling Plans X
---------------------------------------------- --------------- ----------------
Provide Test procedure X
---------------------------------------------- --------------- ----------------
Methods validation/verification X
---------------------------------------------- --------------- ----------------
Vendor qualification and monitoring for API X
---------------------------------------------- --------------- ----------------
Vendor qualification and monitoring X
for excipients
---------------------------------------------- --------------- ----------------
Supply/Procurement API X
---------------------------------------------- --------------- ----------------
Supply/Procure excipients X
---------------------------------------------- --------------- ----------------
Performance of quality control X
---------------------------------------------- --------------- ----------------
Release for processing X
---------------------------------------------- --------------- ----------------
Retention of quality control test record X
---------------------------------------------- --------------- ----------------
Retention of reference samples X
---------------------------------------------- --------------- ----------------
Provide MSDS for materials supplied X
by Contract Giver
---------------------------------------------- --------------- ----------------
14 Maintain API supplier COA X
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
C. PACKAGING MATERIALS AND LABELS
---------------------------------------------- --------------- ----------------
Provide Label Specifications X
---------------------------------------------- --------------- ----------------
Edit labels. Approve label changes, X
including artworks.
---------------------------------------------- --------------- ----------------
Approve printer's proofs. X
---------------------------------------------- --------------- ----------------
Approve printer's "first commercial piece" X
---------------------------------------------- --------------- ----------------
Label printer (supplier) qualification X
and monitoring
---------------------------------------------- --------------- ----------------
Implementation of changed labels X
at packaging sites.
---------------------------------------------- --------------- ----------------
Procurement of labels for Product packaging X
---------------------------------------------- --------------- ----------------
Assignment of lot no. where preprinted X
---------------------------------------------- --------------- ----------------
Provide Sampling and Inspection criteria X
for labels at the packaging site.
---------------------------------------------- --------------- ----------------
Performance of inspection of label X
inventory received from the
label supplier
---------------------------------------------- --------------- ----------------
Receipt of COA/COC from the label supplier X
---------------------------------------------- --------------- ----------------
Retention of label inspection quality X
control test record as performed by
packager receiving labels.
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
E. BULK AND FINISHED PRODUCT
---------------------------------------------- --------------- ----------------
Provide Specification X
---------------------------------------------- --------------- ----------------
Provide Sampling Plans X
---------------------------------------------- --------------- ----------------
Provide Test procedure X
---------------------------------------------- --------------- ----------------
Manufacturing instruction X
(Master Batch Record)
---------------------------------------------- --------------- ----------------
Translation of Master Batch Record X
from English to country language
and approval of translated version
---------------------------------------------- --------------- ----------------
Manufacturing batch record X
---------------------------------------------- --------------- ----------------
Bulk Hold Study X
---------------------------------------------- --------------- ----------------
Assignment of batch number for bulk X
---------------------------------------------- --------------- ----------------
Perform In process controls X
---------------------------------------------- --------------- ----------------
Purchase of reference standards X
---------------------------------------------- --------------- ----------------
Storage under labeled conditions X
---------------------------------------------- --------------- ----------------
Assignment of Finished Product batch number X
---------------------------------------------- --------------- ----------------
Determination of shelf life and X
method for calculation
---------------------------------------------- --------------- ----------------
Assignment of individual expiry date X
---------------------------------------------- --------------- ----------------
Packaging record X
---------------------------------------------- --------------- ----------------
Pallet pattern instructions X
---------------------------------------------- --------------- ----------------
Master shipping label X
---------------------------------------------- --------------- ----------------
Xxxx of materials X
---------------------------------------------- --------------- ----------------
Retention of packaging record X
---------------------------------------------- --------------- ----------------
Retention of retained samples X
---------------------------------------------- --------------- ----------------
Retention of production and control X
test records
---------------------------------------------- --------------- ----------------
Transportation under required conditions X
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
F. FINISHED PRODUCT BATCH RELEASE
---------------------------------------------- --------------- ----------------
Qualified Person responsible X
for release to Schering
---------------------------------------------- --------------- ----------------
Provide Certificate of Analysis/Compliance X
---------------------------------------------- --------------- ----------------
Provide investigation report for X
deviations, as requested.
---------------------------------------------- --------------- ----------------
Qualified Person responsible for X
final release to market
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
G. VALIDATION
---------------------------------------------- --------------- ----------------
Qualification of equipment and facilities X
---------------------------------------------- --------------- ----------------
Approval of qualification protocols X
and reports for equipment and facility
used for Schering products
---------------------------------------------- --------------- ----------------
Validation of manufacturing processes X
---------------------------------------------- --------------- ----------------
Approval of process validation X
protocols and reports for Schering
products
---------------------------------------------- --------------- ----------------
Validation of cleaning procedure X
---------------------------------------------- --------------- ----------------
Approval of cleaning validation X
protocols and reports applicable
to Schering products
---------------------------------------------- --------------- ----------------
Validation of analytical test methods X
---------------------------------------------- --------------- ----------------
Approval of analytical test method X
validation protocols and reports
for Schering products
---------------------------------------------- --------------- ----------------
Retention of qualification and X
validation reports
---------------------------------------------- --------------- ----------------
Provide copies of validation X
protocols and reports as requested.
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
H. STABILITY SURVEILLANCE PROGRAM
---------------------------------------------- --------------- ----------------
Stability protocol preparation X
---------------------------------------------- --------------- ----------------
Approval of stability protocol X
---------------------------------------------- --------------- ----------------
Performance of stability storage X
at ICH conditions
---------------------------------------------- --------------- ----------------
Performance of stability testing X
---------------------------------------------- --------------- ----------------
Preparation of stability report X
---------------------------------------------- --------------- ----------------
Approval of stability report X
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
I. EXTERNAL CUSTOMER COMPLAINTS
---------------------------------------------- --------------- ----------------
Receipt and registration of complaints X
---------------------------------------------- --------------- ----------------
Investigation of complaints X
---------------------------------------------- --------------- ----------------
Request Product return X
---------------------------------------------- --------------- ----------------
Implementation of corrective action* X X
*Millennium will implement corrective
actions applicable to Millennium or
Millennium's Authorized Contractors.
---------------------------------------------- --------------- ----------------
Filing of complaints X
---------------------------------------------- --------------- ----------------
Response to customer X
---------------------------------------------- --------------- ----------------
Location of complaint master list X
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
J. PRODUCT RECALL
---------------------------------------------- --------------- ----------------
Decision to initiate recall X
---------------------------------------------- --------------- ----------------
Notification to authorities X
---------------------------------------------- --------------- ----------------
Notification to customer/ consumer X
---------------------------------------------- --------------- ----------------
Investigation of cause of recall. The Party X X
managing the process requiring investigation
will perform the investigation. If both
Parties manage a portion of the process
requiring investigation, the Parties will
share investigation responsibilities
accordingly.
---------------------------------------------- --------------- ----------------
Storage of returned product X
---------------------------------------------- --------------- ----------------
Destruction of returned product X
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
K. ANNUAL PRODUCT REVIEW AND ANNUAL REPORT
---------------------------------------------- --------------- ----------------
Collection of information for X
Annual Product Review
---------------------------------------------- --------------- ----------------
Implementation of corrective X
action/ improvement
---------------------------------------------- --------------- ----------------
Provide Annual Product Review X
---------------------------------------------- --------------- ----------------
Preparation of Annual Report for X
regulatory submission.
---------------------------------------------- --------------- ----------------
Regulatory submission of the Annual Report X
---------------------------------------------- --------------- ----------------
L. DISPOSAL OF WASTE/REJECTS
---------------------------------------------- --------------- ----------------
Active pharmaceutical ingredient, excipients X
---------------------------------------------- --------------- ----------------
Bulk or finished product X
---------------------------------------------- --------------- ----------------
Packaging waste and obsolete X
packaging materials
---------------------------------------------- --------------- ----------------
Provide certificate of destruction X
---------------------------------------------- --------------- ----------------
---------------------------------------------- --------------- ----------------
M. REWORKING AND REPROCESSING OF DRUG PRODUCT
---------------------------------------------- --------------- ----------------
Responsible for final decision X
---------------------------------------------- --------------- ----------------
Written change control system X
---------------------------------------------- --------------- ----------------
Performance of validation X
---------------------------------------------- --------------- ----------------
Specifications X
---------------------------------------------- --------------- ----------------
Release of product to market X
---------------------------------------------- --------------- ----------------
EXHIBIT III
EXAMPLE CERTIFICATE OF COMPLIANCE
--------------------------------------------------------------------------------
Millennium logo
Quality Control: Millennium
Final Release to Market: Schering Plough
CERTIFICATE OF COMPLIANCE
(Confirmation according to Annex 16 EU GMP-Guide)
Product:_____________________________________
Item-NO Schering:_______________________ Item-No Manufacturer:___________
Batch-NO: Schering______________________ Batch-No Manufacturer:__________
Date of Manufacturing__________________________ Expiry Date: _________________
DD/MM/YY
Manufacturing site_____________________________ Quantity_______________________
Testing site__________________________________
Used Bulk Product:
Name: _______________________________
Item-NO: _____________________________ Batch-No_______________________
I hereby certify that this batch has been manufactured, packed and tested under
GMP conditions (in accordance with [EC Guide to Good Manufacturing Practices for
Medicinal Products or other GMP reference, as appropriate]) using current
Manufacturing Instructions and Test Instructions.
The documentation of the manufacturing and packaging process and testing is
complete and has been reviewed and approved. All deviations have been reviewed
and approved in accordance with an established deviation procedure.
During the course of manufacturing, packaging and testing there were:
no deviations that may influence the release of the products deviations which
may influence the release of the product (see attachment) Additional relevant
information regarding the quality of the product is attached.
The product batch conforms with the agreed specifications and can be released
for sale
Date_______________ Signature:________________________________
(Qualified Person)
--------------------------------------------------------------------------------
EXHIBIT IV
EXAMPLE CERTIFICATE OF ANALYSIS
CERTIFICATE OF ANALYSIS
PRODUCT: INTEGRILIN(R) (eptifibatide) Injection, 2 mg/mL, 100 mL
------------------------------- --------------- ---------------------
PRODUCT CODE NUMBER: MPI LOT NUMBER:
------------------------------- --------------- -------------------------------
DATE OF MANUFACTURE: PREVIOUS C OF A DATE:
----------------------------- ----------------- -------------------------------
STORAGE CONDITION: 2 - 8(Degree)C* EXPIRATION DATE:
--------------------------- ---------------------------- ---------------------
*Product may be transferred to 25(Degree)C for up to 2 months.
TEST METHOD SPECIFICATION RESULT
Clarity and Degree Clear, colorless liquid
of Coloration
pH [**]
Volume in Container => 100 mL
Citrate [**]
Identity by RP-HPLC [**]
[**]
Identity by UV [**]
Spectrophotometry [**]
Impurities and Degradants [**] [**]%
by RP-HPLC [**] [**]%
[**] [**]%
[**] [**]%
[**] [**]%
[**] [**]
[**] [**]%
[**] [**]%
[**] [**]%
[**] [**]%
[**] [**]%
Assay by RP-HPLC [**]
[**]
Particulates [**]
USP <788> [**]
Sterility [**]
USP <71>
Endotoxin by LAL [**]
USP <85>
The above lot of drug product meets all test specifications and is approved for
Prepared By: Date:
--------------------------------- -----------------------
Released By: Date:
--------------------------------- -----------------------
EXHIBIT V
STORAGE AND TRANSPORT CONDITIONS
INTEGRILIN drug product is stored refrigerated at 2 degrees C to 8 degrees C.
Protect from light.
INTEGRILIN drug product is shipped refrigerated at 2 degrees C to 8 degrees C.
Shipping and storage temperature excursions are evaluated on a case basis using
available shipping qualification protocols and stability data.
EXHIBIT VI
BATCH NUMBERING AND EXPIRY DATE SYSTEM
LOT NUMBERS FOR MARKETED DRUG PRODUCT ARE ISSUED BY MILLENNIUM QUALITY
ASSURANCE. THE MILLENNIUM DRUG PRODUCT LOT NUMBER IS COMPRISED OF SIX CHARACTERS
AS FOLLOWS:
EXAMPLE: ZD123A1
WHERE:
Z = AN ALPHA CODE FOR THE YEAR OF MANUFACTURE.
Y = 2004
Z = 2005
A = 2006
B = 2007
D = AN ALPHA CODE FOR THE PRODUCT FAMILY.
D = INTEGRILIN(R) (eptifibatide) InjectioN
123 = A 3-DIGIT SEQUENTIALLY ASSIGNED NUMBER.
SEQUENTIAL NUMBERS BEGIN AT 001 AT THE BEGINNING OF EACH CALENDAR YEAR.
A = an alpha code for fill configuration.
1 = a numeric packaging code.
EXPIRATION DATING IS PROVIDED IN A MONTH / YEAR FORMAT. THE EXPIRATION
REPRESENTS THE LAST DAY OF THE INDICATED MONTH.
EXHIBIT VII
SPECIAL REQUIREMENTS
None.
EXHIBIT VIII
QUALITY CONTACT
SCHERING PLOUGH
Name Xxxxxxx Xxxxx
Title Director, Schering Plough NJ Quality Assurance
Address 0000 Xxxxxxxxx Xxxx Xxxx
Phone # 000-000-0000
Fax# 000-000-0000
MILLENNIUM
Name Xxx Xxxxxxx
Title Director, Commercial Quality Assurance
Address 00 Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, XX 00000
Phone # 000-000-0000
Fax # 000-000-0000
