EXHIBIT 10.19
PHARMACEUTICAL SERVICES CONTRACT
1. GENERAL. This Contract, dated August 15, 1997, is entered into by
McKesson BioServices, a Virginia Corporation, and Discovery
Laboratories, Inc. (client) for the period of performance August 15,
1997 through August 31, 1998.
2. STATEMENT OF WORK. McKesson BioServices agrees to use its best efforts
to provide the desired repository and distribution services in a manner
that meets the contract specifications and the regulatory requirements
of pertinent Government agencies, including the US Food and Drug
Administration (FDA), the Occupational Safety and Health Administration
(OSHA), the Environmental Protection Agency (EPA), the US Department of
Transportation (DOT), and other applicable laws and regulations. Except
as herein specified, McKesson BioServices will furnish the necessary
facilities, labor, materials, and other resources, and will devote the
time and attention as is reasonably required to accomplish the
Statement of Work, Attachment I.
3. WARRANTY. McKesson BioServices will use its best efforts to accomplish
the Statement of Work satisfactorily in a timely manner, and will
notify client promptly upon identifying any inability to perform the
required services within the specified time periods. McKesson
BioServices will store, handle, and ship client's products consistent
with client's directives and in accordance with normal scientific
procedures applicable to similar types of products. McKesson
BioServices will inform the client when it has reason to believe that a
storage, handling, or shipping method or procedure specified by the
client is not consistent with preservation of the product or its
integrity or is in violation of the requirements of such pertinent
agencies or applicable laws or regulations. However, McKesson
BioServices is not liable for loss, damage, or deterioration to the
product caused solely by its adhering to a method of storage, handling,
or shipping specified by the client.
4. INSURANCE. Each of McKesson BioServices and the client shall maintain,
with insurers or underwriters of good repute, such insurance relating
to its business as is normally maintained by comparable businesses and
incorporating those terms and provisions which are customary and
reasonable for its circumstances, including coverage against product
liability claims and other risks described in Paragraph 8. McKesson
BioServices will take reasonable precautions to preserve and protect
the client's products while in its possession, consistent with prudent
scientific and business judgement, and will continue to maintain
insurance coverage on the property of third parties, including the
client's products that are stored with McKesson BioServices. The client
hereby certifies that the total value of its products to be held by
McKesson BioServices under this contract will not exceed $500,000
without McKesson BioServices' written acknowledgment and acceptance.
McKesson BioServices reserves the right to make this acceptance
contingent upon the payment by client of additional charges (not
reflected in attached Price Schedule) to cover the cost of extra and/or
special insurance on client's products.
5. FACILITY. McKesson BioServices represents that it possesses all
requisite licenses and permits enabling it to operate a facility to
conduct repository and distribution services for drug, biological, and
ancillary products. The facility is protected by a continuously
monitored peripheral security system, and by a temperature-monitoring
system for controlled temperature areas (refrigerators, freezers,
etc.). In order to further protect the interests of clients and their
products, McKesson BioServices considers all contents of its repository
and distribution facility to be confidential. Therefore, this contract
does not convey the right of access to the product storage areas of
said facility to any of client's officers, employees, agents,
subcontractors, or other representatives, except as permitted by
McKesson BioServices for scheduled visits by client Quality Assurance
representatives or other personnel solely for the performance of
technical inspection tasks associated with the storage, handling,
and/or distribution of client's products. Such access will be limited
so as to protect other clients' products or information. McKesson
BioServices agrees to similarly restrict access to the product storage
areas of its repository and distribution facility by any other client
and/or potential client.
6. PROJECT MANAGEMENT. The client's project manager/technical director for
this contract is Xxxxx Xxxxxxxxx. McKesson BioServices is authorized to
accept guidance and directives from this individual within the
accompanying Statement of Work, and to provide information regarding
operational and technical issues to this individual. The client may
change/add to the individual designated as project manager/technical
director only by providing written notice to McKesson BioServices.
McKesson BioServices is not authorized, under any circumstances, to
perform tasks: (i) requested by any party not so designated in writing,
or (ii) not covered in the Statement of Work. Such actions require a
modification to this contract, duly signed by the parties hereto.
7. PRICES AND PAYMENT. In consideration for the services specified above,
the client agrees to compensate McKesson BioServices in accordance with
the Price Schedule in Attachment II. These prices are firm from the
commencement of the contract through April 28, 1997. McKesson
BioServices will invoice client on or before the 15th day of each month
for services performed during the previous month. Client will make full
payment within 30 days of receiving a proper invoice, or notify
McKesson BioServices within seven days if it believes an invoice to be
improper or erroneous. Payments shall be sent to:
McKesson BioServices
XX Xxx 000000
Xxxxxxxxx, XX 00000-0000
McKesson BioServices will send invoices to the following address:
Discovery Laboratories, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxxxxx
8. INDEMNIFICATION. McKesson BioServices will indemnify and hold client
harmless for any damages caused by, or claims arising from, concerning,
or relating to
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the sole negligence of McKesson BioServices in the performance of
storage and distribution tasks pursuant to this contract. McKesson
BioServices further agrees to notify client within two business days of
any information coming to the attention of McKesson BioServices
regarding errors or omissions in performance of receipt, storage,
distribution, and record-keeping activities under this agreement;
threat of litigation; potential claims; damage to goods; or other
matters adversely affecting client's interests. Client will indemnify
and hold McKesson BioServices harmless for any damage caused by, or
claims arising from, concerning, or relating to the use of the client's
products. These obligations shall survive the termination of this
contract. It is expressly understood that the prices set forth in
Attachment II bear no relationship to the market value or replacement
cost of client's product(s), and were derived without knowledge or
consideration of its (their) use, potential for misuse (either
intentional or unintentional), or possible harmful effects of its
(their) use or misuse. Therefore, the parties agree that McKesson
BioServices' liability for any act, error, or omission shall, in no
event, exceed the total price paid by client to McKesson BioServices
hereunder. The client additionally agrees to carry product liability
insurance, covering all products in the custody of McKesson
BioServices, in an amount not less than $1,000,000 and naming McKesson
BioServices as an additional insured under the policy.
9. USE OF INFORMATION. The parties agree that all information, documents,
agreements, data, procedures, processes, know-how, technology, and
other similar items and materials that are received from or learned
about the other party, its products or services, as a result of or in
connection with performance under this contract, will be considered
confidential and will be used only for purposes of performance under
this contract. Such information will not be used in any manner that is
detrimental to either party, its officers, employees, agents, clients,
or customers. Such information will not be used for purposes of
competing or bidding against the other party or for assisting others to
compete or bid against the other party. This restriction will survive
the termination of this contract by five years.
10. ADDITIONAL PROVISIONS. The following additional provisions are
incorporated into this contract by attachment hereto:
ATTACHMENT NO. TITLE
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I Statement of Work
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II Price List
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11. ENTIRE AGREEMENT. It is expressly understood and agreed by the parties
hereto that this contract represents their entire agreement, wholly
superseding any and all prior agreements made by them, their agents,
and employees concerning the storage and/or distribution of client's
product(s) as designated in Attachment I hereto. This contract may not
be altered, amended, or modified, except by a written instrument signed
by the duly authorized representatives of both parties. This contract
is to be interpreted under laws of the State of Maryland.
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12. TERMINATION. This agreement may be terminated by either party at any
time upon sixty days written notice to the other party, except that
McKesson BioServices may terminate immediately upon notice to the
client in the event of non-payment of invoices pursuant to Paragraph 7.
Upon notification, McKesson BioServices will proceed in an orderly
fashion to limit or terminate any outstanding commitments, to conclude
the work, and to deliver all of client's products and documents then in
its possession back to client or other designee, at client expense. If,
at the end of the designated contract performance period, neither party
has provided notice of its intent to terminate this agreement, and
client has not directed that its product(s) be removed from McKesson
BioServices' facility, McKesson BioServices may (but is not required
to) continue performance hereunder on a month-to-month basis, in which
case both parties shall remain bound by the terms, conditions, and
prices specified herein.
ACCEPTED FOR:
Discovery Laboratories, Inc. McKesson BioServices
/s/ Xxxxx X. Xxx /s/ K. Xxxx Xxxxxxxxxx
-------------------------------- --------------------------------
K. Xxxx Xxxxxxxxxx, PhD
Senior Vice President
Pharmaceutical Services Division
Date: 8/29/97 Date: 8/15/97
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ATTACHMENT I
STATEMENT OF WORK
Prepared for: Discovery Laboratories, Inc.
to operate Drug Distribution Center and Package Clinical Supplies
All Pharmaceutical Services Division
(PSD) operations are performed in
compliance with current Good
Manufacturing Practice (cGMP) and
McKesson BioServices
Standard Operating Procedures (SOPs).
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o Receive clinical study products and bulk drug substances from
manufacturers and perform receiving inspections,
o store study products at specified storage temperature conditions,
o maintain clinical study product inventory management system,
o ship product to clinical trial centers within the United States in
accordance with shipping instructions provided by Discovery
Laboratories, Inc.,
o provide clinical study product packaging and labeling services on an
as needed basis,
o perform bulk drug dispensing on an as needed basis,
o recall expired product from clinical sites,
o receive, reconcile, and dispose returned study product from clinical
sties, and
o provide monthly receiving, shipping, inventory, return drug activity,
and site specific reports.
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ATTACHMENT II
PRICE LIST
Prepared for: Discovery Laboratories, Inc.
to operate Drug Distribution Center and Package Clinical Supplies
In order to prepare for total program costs or to better evaluate the
individual costs for the project execution, the following is
an extension of pricing based on the requirements presented.
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Initial Set-up Charge (one time only): [***]
Set-up charges will allow for the client to be entered into the
automated tracking system and will also cover one-time client specific database
set-up.
Monthly Program Management and Administration: [***]
Charges will cover the following services: monthly report of activity,
computer support charges, protocol review, expiration date monitoring.
Monthly Storage Center*:
Charge is per cubic foot per month.
[***] [***]
[***] [***]
[***] [***]
[***] [***]
* Xxxxxxxx will be based on maximum cubic footage utilized
during the month with minimum charge of [***] cubic feet,
except for [***] storage. When minimum billing is applicable,
it will be calculated at the highest price at which material
are stored.
Receipt Processing Charge (per lot): [***]
Additional hourly rate (technician) will apply for patient specific
receipts.
Shipping Charges (FedEx, based upon use of McKesson BioServices stock supplies):
Domestic [***] - second business day delivery, for up to [***] pounds
Small box $35.00
Large box $39.00
Each additional pound above [***] lbs. $1.50
[***] Confidential Treatment Requested. Omitted portions have been filed
separately with the Commission.
ATTACHMENT II - Continued
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PRICE LIST
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Domestic [***] - next business day delivery, for up to [***] pounds
Small box $48.00
Large box $51.00
Each additional pound from [***] lbs. to [***] lbs. $4.50
Each additional pound above [***] lbs. $1.50
Domestic [***] - next business day delivery, for up to [***] pounds
Small box $95.00
Large box $110.00
Each additional pound above [***] lbs. $1.50
Saturday Delivery [Domestic - charge added to standard shipping rate) $13.00
International Shipments Priced separately
Drug Recall Letter and Follow-up (per site): [***]
Return Drugs (clinical site is responsible for shipping charges):
Storage Included in monthly charge
Receipt/Processing, per site return [***]
Additional technician's hourly rate will apply for patient specific returns [***]
Disposal, per [***] cubic feet ([***] pounds maximum per container) [***]
Bulk Drug Weighing (per agent): [***]
Labeling:
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
[***] [***]
Custom Label Design (for refrigerated/frozen samples and bar-code label): Priced separately
Repackaging (includes all supplies):
[***] [***]
Minimum charges [***]
Line changeover charges [***]
[***] Confidential Treatment Requested. Omitted portions have been filed separately with the Commission.
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ATTACHMENT II - Continued
PRICE LIST
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Subject Randomization: Price separately
Purchase of Supplies and Outside Services: [***]
Travel Expenses: [***]
Professional Services (not included above, charge/hour): [***]
Senior Technical Specialist [***]
Laboratory Director/Computer Scientists/Pharmacist [***]
Repository Director/Computer Programmer [***]
Administrative Support [***]
Repository Technician [***]
[***] Confidential Treatment Requested. Omitted portions have been filed
separately with the Commission
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CONTRACT AMENDMENT
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Whereas McKesson BioServices (MBS) and Discovery Laboratories, Inc.
(Client) previously entered into an Agreement, dated August 15, 1997, covering
the provision of repository services by MBS for Client, said Agreement
(including all Amendments thereto) containing an expiration date of August 31,
1998; and
Whereas the two parties desire to extend said Agreement from September
1, 1998, through August 31, 1999.
The parties, therefore, agree as follows:
o The first sentence of Paragraph 12 is hereby deleted and replaced
with the following:
"This agreement may be terminated by either party at any time upon
thirty days written notice to the other party, except that McKesson
BioServices may terminate immediately upon notice to the client in
the event of non-payment of invoices pursuant to Paragraph 7."
o Attachment II (Price List) to said Agreement is hereby deleted and
replaced by the accompanying (new) Attachment II (Pharmaceutical
Price List) for the period September 1, 1998, through August 31,
1999.
o All other terms and conditions, of said Agreement (as amended) will
remain unchanged and in full force and effect until August 31, 1999.
This Amendment, effective as of September 1, 1998, has been executed by
the parties on the dates set forth below.
Discovery Laboratories, Inc. McKesson BioServices
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxxxx X. Xxxxxxxxx
--------------------------------- ----------------------------
President/CEO Xxxxxxxx X. Xxxxxxxxx
--------------------------------- Senior Vice President
Finance and Administration
Date: 9/4/98 Date:
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