1
Exhibit 10.5
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
PRODUCT DEVELOPMENT AND SUPPLY AGREEMENT
THIS AGREEMENT is entered into as of the 31st day of May, 1996, by and
between TIMERx Technologies, a division of Penwest, Ltd., a Washington
corporation, with principal place of business at 0000 Xxxxx 00, Xxxxxxxxx, Xxx
Xxxx 00000 ("TIMERx Technologies"), and XXXXXXX PHARMA INC., a Delaware
corporation, with principal place of business at 0000 Xxxxxx Xxxx Xxxx, Xxxxxx,
Xxxxxxxxx 00000 ("Xxxxxxx Pharma").
A. TIMERx Technologies has developed a controlled-release agent covered
by one or more patents, patent applications, know-how and other proprietary
technology, which agent TIMERx Technologies markets under the name and xxxx
"TIMERx(R)" ("TIMERx").
X. Xxxxxxx Pharma is interested in developing for manufacture the
active pharmaceutical ingredient diltiazem ("Diltiazem") and desires to
formulate Diltiazem into a solid-dosage controlled-release delivery system for
oral administration in humans in four dosage strengths to be therapeutically
equivalent AB rated to the drug currently sold under the brand name "Cardizem
CD".
C. The parties desire to engage in certain research, development, and
testing activities designed to determine if such a drug can be developed using
TIMERx. If such activities are successful, Xxxxxxx Pharma desires to contract
for a supply of TIMERx for use in the manufacture of such a controlled-release
form of Diltiazem, and TIMERx Technologies is willing to supply the same
provided that Xxxxxxx Pharma agrees to obtain all of its requirements of TIMERx
from TIMERx Technologies as provided herein.
D. The parties have entered that certain Heads of Agreement and
Development Agreement with an effective date of September 20, 1995 as attached
hereto as Exhibit One (the "Heads of Agreement"), in order to set forth certain
key business points for this Agreement and the understanding of the parties with
respect to the biostudies and initial development of the Designated Products.
NOW, THEREFORE, the parties hereby agree as follows:
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1. DEFINITIONS.
1.1 "AFFILIATE" of TIMERx Technologies or of Xxxxxxx Pharma shall
mean entities that, directly or indirectly, own and control the voting of more
than 50% of the voting capital shares of such party ("Parent"), or more than 50%
of the voting capital shares (or equivalent control) of which is, directly or
indirectly, owned, and the voting of which is controlled, by such party or its
Parent, as of the Effective Date. For purposes of this definition and this
Agreement no Affiliate shall remain such unless it continues to meet the
foregoing criteria. Current Affiliates of TIMERx Technologies and Xxxxxxx Pharma
are listed as such in Exhibit .
1.2 "APPROVAL DATE" shall mean the date on which a Designated
Product in any dosage strength is first approved by the U.S. Food and Drug
Administration (herein "FDA") (the "U.S. Approval Date") or other equivalent
regulatory authority in the Territory for commercial sale in oral solid-dosage
form for administration in humans, pursuant to an Abbreviated New Drug
Application (or the equivalent in such other regulatory authority) ("ANDA").
1.3 "CERTIFICATION PERIOD" with respect to the United States shall
mean the period beginning at the end of the Development Period and ending on the
earlier of:
1.3.1 the U.S. Approval Date;
1.3.2 the termination of this Agreement as provided herein.
With respect to Canada and/or Mexico, the Certification Period, if any, will
mean the period described as such for that nation in Section 3.3.
1.4 "COMPETING GENERIC VERSION" shall mean a drug that meets all
of the following criteria:
1.4.1 it is Therapeutically Equivalent to the applicable Designated
Product being studied, manufactured, or marketed, as the case may be;
1.4.2 it has been fully approved for commercial sale in oral
solid-dosage form for administration in humans by the FDA (for all purposes of
this Agreement, "solid-dosage form" shall include tablets, capsules, hydrogels,
or any combination thereof);
1.4.3 it is actively on the market and immediately available for
retail sale throughout the United States other than under the brand "Cardizem"
or "Cardizem CD"; and
1.4.4 it is not marketed by Xxxxxxx Pharma, any of its Affiliates,
or under a license or sublicense from Xxxxxxx Pharma or its Affiliates or
sublicensees in any tier.
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1.5 "CONFIDENTIAL TECHNOLOGY" shall mean all technology that is,
at the relevant time hereunder, protected or required to be protected by both
parties hereto as confidential information pursuant to Section 7 hereof.
1.6 "DESIGNATED PRODUCT" shall mean a Therapeutically Equivalent
solid-dosage form of a controlled-release pharmaceutical for oral administration
in humans that combines Diltiazem with TIMERx and other excipients. The parties
contemplate that the Designated Product will be developed and marketed in the
following four dosage strengths: 120mg, 180mg, 240mg, and 300mg.
1.7 "DEVELOPMENT PERIOD" shall mean the period from the Effective
Date through the earlier of the termination of this Agreement as provided herein
or the successful completion, through demonstration of bioequivalence to FDA
standards, of the Pivotal Biostudies contemplated in Section 3.4 of the Heads of
Agreement.
1.8 "DISSOLUTION PROFILE STUDIES" shall mean the studies
contemplated in Section 3.1 of the Heads of Agreement.
1.9 "EFFECTIVE DATE" shall mean the effective date of the Heads of
Agreement, which is September 20, 1995.
1.10 "FORMULATED TIMERx" shall mean TIMERx and certain additives in
a formulation to be developed hereunder specifically for use in the Designated
Product.
1.11 "LICENSE TERM" shall mean the cumulative period covered by the
Development Period, the Certification Period, and the Marketing Period.
1.12 "MARKETING PERIOD" with respect to a nation shall mean the
period beginning on the Approval Date for such nation and ending on the earlier
of:
1.12.1 the twentieth anniversary of the Effective Date; or
1.12.2 the termination of the License Term and/or this Agreement as
provided herein.
1.13 "NET SALES" shall mean that portion of the net sales (or
equivalent current value, where Designated Product is used without being sold,
other than as to reasonable quantities of samples of Designated Products
marketed as branded drugs, if any) recognized by Xxxxxxx Pharma or its
Affiliate, or a sublicensee of either (excluding sales by Xxxxxxx Pharma to its
Affiliate or sublicensee, or by Xxxxxxx Pharma's Affiliate to Xxxxxxx Pharma or
its sublicensee, for resale to a third party), calculated in accordance with
United States Generally Accepted Accounting Principles ("GAAP") consistently
applied, which pertains to the Designated Product.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
The calculation of Net Sales shall include amounts specifically identifiable to
the Designated Product and amounts allocated to the Designated Product in
accordance with GAAP, it being understood that amounts which are not
specifically identifiable to the Designated Product by virtue of their being
identifiable to a group of products or services that includes the Designated
Product shall be allocated to the Designated Product in a consistent and
equitable manner which will not unduly or disproportionately reduce Net Sales of
the Designated Product. Net Sales shall be considered "made" as of the date of
the applicable invoice. Amounts to be included in the calculation of Net Sales
shall be those representing:
1.13.1 **********************
1.13.2 **************************************************************
1.13.3 **************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
1.13.4 **************************************************************
********************************************************************************
********************************************************************************
********************************************************************************
******************
1.13.5 ********************************************
1.13.6 **************************************************************
***********************************************************************
1.14 "PILOT BIOSTUDIES" shall mean the biostudies contemplated
in Sections 3.2 and 3.3 of the Heads of Agreement and more fully described in
Exhibit .
1.15 "PIVOTAL BIOSTUDIES" shall mean the biostudies contemplated in
Section 3.4 of the Heads of Agreement, it being understood that such Pivotal
Biostudies are those that will be designed and conducted in a manner to support
the submission to the
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FDA of an ANDA for the Designated Products (whether or not such ANDA is
ultimately approved).
1.16 "PROJECT CONTACT(S)" shall mean the persons appointed by each
party to serve as contact persons between the parties during the Development
Period and the Certification Period. The initial Project Contact for TIMERx
Technologies for business matters is Xx. Xxxx X. Xxxxxx, and the initial Project
Contact for TIMERx Technologies for technical and scientific matters is Xx.
Xxxxx Xxxxxxxx. The initial Project Contact for Xxxxxxx Pharma for business
matters is Xx. X. Xxxxxxxx, and the initial Project Contact for Xxxxxxx Pharma
for technical and scientific matters is Xx. Xxxxx Xxxxxxxxx. Each party shall
promptly notify the other party of any substitution of other personnel as its
Project Contact(s). Each party may select and supervise its other project staff
as needed.
1.17 "ROYALTIES" shall mean the royalties payable to TIMERx
Technologies pursuant to Section 4.3 hereof.
1.18 "XXXXXXX PHARMA IMPROVEMENTS" shall mean any and all improvements,
modifications, alterations, or enhancements to any of the inventions covered by
the TIMERx Technologies Patents, TIMERx Technologies' Confidential Technology,
or the TIMERx Production Technology, that are developed for or are otherwise
related to or useful with the Designated Product and that are developed, owned,
or controlled by Xxxxxxx Pharma or any of its Affiliates or sublicensees, or in
which Xxxxxxx Pharma or any of its Affiliates or sublicensees otherwise has any
rights or interests during the term of this Agreement; together with all United
States and foreign intellectual property and other rights and interests of
Xxxxxxx Pharma and its Affiliates and sublicensees thereto and therein,
including without limitation patents, trade secrets, copyright, periods of
market exclusivity, and other related rights or interests.
1.19 "XXXXXXX PHARMA TEST AND REGULATORY DATA" shall mean any and all
test data, test designs and protocols, clinical studies and results thereof,
government licenses and applications therefor, government certifications and
findings, and related materials, information and rights (including without
limitation information regarding bioavailability and bioequivalence, and any
adverse drug reactions), developed, commissioned or otherwise obtained by
Xxxxxxx Pharma or any of its Affiliates or sublicensees during the term of this
Agreement for the uses intended by this Agreement relating to TIMERx, Xxxxxxx
Pharma Improvements, the Designated Product, TIMERx Technologies Patents, TIMERx
Production Technology and/or TIMERx Technologies' Confidential Technology;
together with all intellectual property and other rights and interests of
Xxxxxxx Pharma and its Affiliates and sublicensees thereto and therein,
worldwide.
1.20 "SOLID-DOSAGE UNIT" shall mean any individual tablet, capsule,
hydrogel, or any combination thereof, manufactured to be a solid-dosage form of
the
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Designated Product in the following dosage strengths: 120mg, 180mg, 240mg, and
300mg.
1.21 "SPECIFICATIONS" shall mean such standards and analytical methods
established by TIMERx Technologies and Xxxxxxx Pharma by agreement during the
Development Period; provided, however, that once such specifications are
established in an application for regulatory approval, such specifications shall
become the Specifications referred to herein, and shall remain unchanged, unless
either changes are required by the regulatory authorities or are mutually agreed
to by the parties. It is understood and agreed that the Specifications for
Formulated TIMERx for use in Designated Product to be sold outside the United
States shall be the same as those for Formulated TIMERx for use in Designated
Product to be sold in the United States, because this will be required for the
technically satisfactory production, regulatory approval, and exploitation of
the Designated Product. Accordingly, in no event xxxx Xxxxxxx Pharma permit the
Designated Product to be certified for sale outside the United States on any
other basis, unless TIMERx Technologies has consented thereto in writing after
detailed consultation with Xxxxxxx Pharma.
1.22 "TERRITORY" shall, subject to Section 3.3, mean Canada, Mexico,
the United States, and the territories and possessions thereof. Xxxxxxx Pharma
hereby waives its rights under clause (ii) of Section 2 of the Heads of
Agreement and agrees that it shall have no rights hereunder or under the Heads
of Agreement with respect to Europe.
1.23 "THERAPEUTICALLY EQUIVALENT" shall mean that a drug of a given
dosage strength is rated AB bioequivalent to the drug, in the same dosage
strength, currently sold in the United States under the brand name "Cardizem
CD".
1.24 "TIMERx TECHNOLOGIES PATENTS" shall mean:
1.24.1 those United States patents and foreign equivalents in the
Territory and United States and foreign patent applications in the Territory
listed in Exhibit and all divisions, continuations, reissues, or extensions
thereof, any periods of marketing exclusivity relating thereto, and any letters
patent that issue thereon; and
1.24.2 TIMERx Technologies' rights under United States and foreign
patents in the Territory, if any, obtained and in force during the License Term
covering any of TIMERx Technologies' improvements, modifications, alterations,
or enhancements to any of the inventions covered by the TIMERx Technologies
Patents that are developed for or are otherwise related to or useful with the
Designated Product.
1.25 "TIMERx PRODUCTION TECHNOLOGY" shall mean TIMERx Technologies'
rights under the TIMERx Technologies Patents and any and all other patents,
patent applications, and other technology belonging to TIMERx Technologies or
which
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
TIMERx Technologies has the right to practice and to sublicense from time to
time during the term of this Agreement that directly relate to, are desirable
for, or are necessary for the production of, Formulated TIMERx for use in the
Designated Product.
1.26 "TIMERx TECHNOLOGIES TEST AND REGULATORY DATA" shall mean any
and all test data, test designs and protocols, clinical studies and results
thereof, government licenses and applications therefor, government
certifications and findings, and related materials, information and rights
(including without limitation information regarding bioavailability and
bioequivalence, and any adverse drug reactions), developed, commissioned or
otherwise obtained by TIMERx Technologies or any of its Affiliates during the
term of this Agreement relating to TIMERx, TIMERx Technologies Patents, and/or
TIMERx Production Technology and that are developed for or are otherwise related
to or useful with the Designated Product; together with all intellectual
property and other rights and interests of TIMERx Technologies and its
Affiliates thereto and therein in the Territory.
1.27 "UNIT PRICE" shall mean the price for Formulated TIMERx as
stated in Exhibit C to the Heads of Agreement, subject to annual adjustment by
TIMERx Technologies to reflect changes in the Pharmaceutical Producers' Index,
or an equivalent index.
2. DEVELOPMENT PERIOD.
2.1 During the Development Period, TIMERx Technologies will exert
its continuing best efforts to perform the Dissolution Profile Studies pursuant
to Section 3.1 of the Heads of Agreement, and Xxxxxxx Pharma will cooperate in
such effort. Xxxxxxx Pharma shall make the payments called for in Section 3.1 of
the Heads of Agreement.
2.2 Following completion of the Dissolution Profiles Studies,
TIMERx Technologies will exert its continuing best efforts to perform the Pilot
Biostudies in accordance with Section 3.2 of the Heads of Agreement and with
Exhibit hereof. The parties will bear the costs of such Pilot Biostudies in
accordance with Section 3.2 of the Heads of Agreement, as modified by Exhibit .
2.3 Within ******** following the completion of a successful Pilot
Biostudy as described in Section 3.3 of the Heads of Agreement, Xxxxxxx Pharma
shall make the
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
payment called for in that section. Xxxxxxx Pharma will, during the balance of
the Development Period, exert its continuing best efforts to perform the Pivotal
Biostudies pursuant to Section 3.4 of the Heads of Agreement, and to do so
within the ************* period there stated. TIMERx Technologies will cooperate
in such effort. Xxxxxxx Pharma shall make the payment called for in Section 3.4
of the Heads of Agreement upon the successful completion of such Pivotal
Biostudy with respect to any dosage strength, through demonstration of AB rated
bioequivalence to FDA standards.
2.4 Each party's Project Contact(s) will provide written reports to the
other party's Project Contact(s) at least quarterly (and more often upon
reasonable request of the other party) throughout the Development Period,
stating in detail all efforts made and in process, and all significant progress
achieved and difficulties encountered in the reporting party's portion of the
development effort since the last such report. Each of the Project Contacts will
also be available throughout the Development Period to answer any reasonable
questions from the other party's Project Contacts, as appropriate.
2.5 Each party will, promptly and throughout the Development Period,
provide to the other all necessary information in or coming into its possession
or reasonably available to it to support the goals of the Development Period.
Notwithstanding anything else to the contrary contained herein, nothing shall
require either party to disclose confidential information for which such party
has an obligation of confidentiality to a third party. Each party understands
and agrees that the other does not warrant or commit that the Designated Product
will be successfully developed, and neither party shall have any liability or
responsibility to the other or to third parties for any such failure of the
development process hereunder, except wherein such failure occurs as a result of
a party's intentional misconduct, negligence, or breach of its duties or
obligations under this Agreement.
2.6 Except as provided otherwise in the cost reimbursement provisions
of Section 3.2 of the Heads of Agreement, Xxxxxxx Pharma will supply to TIMERx
Technologies, without charge, all Diltiazem and Cardizem CD (in all dosage
strengths) reasonably required to support the development effort by TIMERx
Technologies during the Development Period, and *****************************
*******************************************************************************
*************************************************.
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2.7 As the term is used in this Section 2 and in Section 3, the
exertion of a party's best efforts will mean that (i) such party will exert on a
continuing basis such reasonable efforts as would be normal for sponsors or
applicants for regulatory approval of drugs under ANDAs generally, and (ii) this
project will receive a priority at least as high as any of such party's other
generic drug development efforts (if such a priority would lead to the exertion
of greater efforts than those described in clause (i).
2.8 Either party may terminate this Agreement before completion of
the Development Period by delivery of 30 days' written notice to the other, if,
due to unfavorable or inconclusive results to that time, no further development
efforts are likely to lead to the successful development of the Designated
Product. In addition, Xxxxxxx Pharma may terminate this Agreement prior to the
completion of the Development Period by delivery of 30 days' written notice to
TIMERx Technologies if at any time it determines (and reasonably demonstrates to
TIMERx Technologies) that, due to changed circumstances following the date this
Agreement is signed, the potential commercial viability of the Designated
Product will not justify the devotion of the best efforts of Xxxxxxx Pharma
called for during the remainder of the Development Period or during the
Certification Period. No such termination under this section will lessen any
duty of Xxxxxxx Pharma to make any of the payments called for hereunder, which
have accrued prior to the effective date of such termination.
3. CERTIFICATION PERIOD.
3.1 During the Certification Period with respect to the United
States, Xxxxxxx Pharma will exert its continuing best efforts, at its expense,
to prepare and file an ANDA or ANDAs for the Designated Products with the FDA
and to prosecute the same successfully to the granting of an FDA license to
market the Designated Product in each of the four dosage strengths. TIMERx
Technologies will, promptly and throughout the Certification Period, provide to
Xxxxxxx Pharma all necessary information in or coming into TIMERx Technologies'
possession or reasonably available to it for such purpose. Also, during the
Certification Period, TIMERx Technologies will exert its continuing best efforts
to qualify the manufacturing sites referred to in Section 5.2 for the
manufacture of Formulated TIMERx.
3.2 Xxxxxxx Pharma shall exert its continuing best efforts to
conduct or arrange for, at Xxxxxxx Pharma's expense, all further testing and
studies during the Certification Period, including as to efficacy,
bioavailability, bioequivalence, and safety and toxicology, in connection with
the development, licensing, manufacture and marketing of the Designated Product,
and for compliance with all requirements imposed by the government of the United
States with respect to the Designated Products, and, if there is a Certification
Period for Canada and/or Mexico pursuant
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to Section 3.3, also as imposed by the government of such nation(s). TIMERx
Technologies will, promptly and throughout the Certification Period, provide to
Xxxxxxx Pharma all necessary information in or coming into TIMERx Technologies'
possession or reasonably available to it for such purpose.
3.3 If, at any time or times during the License Period, TIMERx
Technologies reasonably demonstrates to Xxxxxxx Pharma that
(i) Cardizem CD or an AB bioequivalent to it has been approved
for marketing in Canada or Mexico, or such approval has been applied for and is
reasonably likely to be granted; and
(ii) TIMERx Technologies or a third party is interested in
good faith in undertaking to market the Designated Product in such nation
pursuant to the equivalent of an ANDA in such nation,
Then TIMERx Technologies shall afford Xxxxxxx Pharma a period of 60
days in which to agree that a Certification Period with respect to such nation,
and governed by this Section 3, shall commence hereunder, during which Xxxxxxx
Pharma will exert its continuing best efforts, at its expense, to prepare and
file such ANDA-equivalent applications for the Designated Products with the
regulatory authorities in such nation, and to prosecute the same successfully to
the granting of marketing approvals from such authorities for the Designated
Product in each of the four dosage strengths. It is understood that Xxxxxxx
Pharma may meet such obligations with respect to such nation through the efforts
of its sublicensee, which may be TIMERx or the third party (if any) identified
by TIMERx Technologies and referenced in clause (ii) above, to whom Xxxxxxx
Pharma may sublicense its rights as set forth in this Agreement. (If TIMERx
Technologies is the sublicensee, the same terms and conditions of this Agreement
shall apply to the sublicense.) If Xxxxxxx Pharma fails to agree in writing
within such period to prepare, file and prosecute an ANDA equivalent, either
directly or through sublicensing as described herein, such nation and its
territories and possessions shall thereupon be removed from the Territory.
3.4 Xxxxxxx Pharma's Project Contacts will provide written reports
to TIMERx Technologies' Project Contacts, as appropriate, at least quarterly
(and more often upon reasonable request of the other party) throughout the
Certification Period, stating in detail all efforts made and in process, and all
significant progress achieved and difficulties encountered in the certification
effort since the last such report. Xxxxxxx Pharma's Project Contacts will also
be available throughout the Certification Period to answer any reasonable
questions from TIMERx Technologies' Project Contacts, as appropriate.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
3.5 During the Certification Period, Xxxxxxx Pharma shall provide
at its own expense all Diltiazem and other materials and manufacturing and
testing services **************************************************************
*******************************************************************************
**********************.
3.6 If TIMERx Technologies personnel travel outside the Xxxxxxxxx,
New York area during the Certification Period at the request of Xxxxxxx Pharma,
*******************************************************************************
**********************.
3.7 In consideration of TIMERx Technologies' entering into this
Agreement, Xxxxxxx Pharma agrees to pay TIMERx Technologies the following
non-refundable fees:
3.7.1 a first milestone fee payable within ************************
*************************************************************
*************************************************************
and
3.7.2 a second milestone fee payable within ***********************
*************************************************************
*************************************************************
3.8 Either party may terminate this Agreement before completion of
the Certification Period by delivery of 30 days' written notice to the other if,
due to unfavorable action by the FDA, the ANDA is not likely (regardless of any
further steps or submissions that could be made) to be approved by the FDA. In
addition, Xxxxxxx Pharma may terminate this Agreement prior to the completion of
the Certification Period by delivery of 30 days' written notice to TIMERx
Technologies if at any time it determines (and reasonably demonstrates to TIMERx
Technologies) that, due to changed circumstances following the date this
Agreement is signed, the potential commercial viability of the Designated
Product will not justify the devotion of the best efforts of Xxxxxxx Pharma
called for during the remainder of the Certification Period or during the
Marketing Period. No such termination under this section will lessen any duty of
Xxxxxxx Pharma to make any of the payments called for hereunder, which have
accrued prior to the effective date of such termination.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
4. MARKETING PERIOD.
4.1 Subject to the granting of all necessary governmental
approvals or concurrences to sell the Designated Products, Xxxxxxx Pharma hereby
agrees, during the Marketing Period, to use its continuing best efforts to
market, promote and sell the Designated Products throughout the United States
following the U.S. Approval Date, and in Canada and/or Mexico, following the
Approval Date, if any, for that nation(s). As the term is used in this Section
4, the exertion of Xxxxxxx Pharma's best efforts will mean that Xxxxxxx Pharma
will devote to such marketing, promotion and sales of the Designated Products
resources and priorities at least as substantial and high as any like-kind
resources and priorities devoted by Xxxxxxx Pharma or any of its Affiliates to
the marketing, promotion or sale of any other generic drug of substantially the
same potential in the same nation of the Territory, measured in terms of sales
and profitability potentials.
4.2 In consideration of TIMERx Technologies' entering into this
Agreement, Xxxxxxx Pharma agrees to pay TIMERx Technologies a non-refundable
third milestone fee payable within ********************************************
*************************************************************** in the amount
determined in Exhibit A to the Heads of Agreement.
4.3 Xxxxxxx Pharma hereby agrees to pay to TIMERx Technologies
Royalties equal to the percentages of all Net Sales during the License Term, as
determined under Exhibit B of the Heads of Agreement; provided, however, that
such Royalties shall be ********************************* with respect to Net
Sales of the Designated Product as to ****************************************
********************************************************************************
****************************************.
4.4 All Royalties and other amounts payable pursuant to this
Agreement shall be due quarterly ****************************************
following the end of each calendar quarter for Net Sales in such calendar
quarter. Each such payment shall be accompanied by a statement of Net Sales for
the quarter and the calculation of Royalties payable hereunder. All Royalties
and all other amounts payable under this Agreement will bear interest at the
rate of 1 1/2% per month or the maximum legal rate, whichever is less, from the
date due through the date of payment. Xxxxxxx Pharma shall keep and shall cause
its Affiliates and its and their sublicensees to keep complete, true and
accurate records for the purpose of showing the derivation of all
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Royalties payable to TIMERx Technologies under this Agreement. TIMERx
Technologies or its representatives shall have the right to inspect, copy, and
audit such records at any time during reasonable business hours upon notice to
Xxxxxxx Pharma or any of its Affiliates or sublicensees, respectively.
Information gathered during such an audit shall be held in confidence by TIMERx
Technologies and its Affiliates, except to the extent any of the exceptions
stated in Sections 7.1.1 through 7.1.7 apply thereto. Any such audit shall be at
the expense of TIMERx Technologies, unless the audit reveals that, with respect
to the period under audit, less than 95% of the Royalties due to TIMERx
Technologies hereunder have been paid, in which event Xxxxxxx Pharma shall pay
or reimburse TIMERx Technologies for the reasonable expenses of such audit, in
addition to TIMERx Technologies' other remedies for such underpayment.
4.5 All monies due hereunder shall be paid in United States
Dollars to TIMERx Technologies in Patterson, New York, USA. The rate of exchange
to be used shall be the average commercial rate of exchange for the 30 days
preceding the date of payment for the conversion of local currency to United
States Dollars as published by The Wall Street Journal (or if it ceases to be
published, a comparable publication to be agreed upon by the parties) or, for
those countries for which such average exchange rate is not published by The
Wall Street Journal, the exchange rate fixed on the fifth day prior to the date
of payment as promulgated by the appropriate United States governmental agency
as mutually agreed upon by the parties.
5. SUPPLY OF FORMULATED TIMERx.
5.1 It is understood and agreed that supply of Formulated TIMERx
by TIMERx Technologies (or otherwise as provided in Section 5.13) in accordance
with the Specifications is desired by both parties for the technically
satisfactory production, regulatory approval, and exploitation of the Designated
Product. Accordingly, except as provided in Section 5.13, and subject to the
other provisions hereof, TIMERx Technologies will supply Xxxxxxx Pharma and its
Affiliates and sublicensees with sufficient quantities of Formulated TIMERx
produced in accordance with the Specifications in compliance with GMP and all
applicable laws and regulations, to meet their reasonable requirements for
development, testing and manufacturing of the Designated Product during the
Certification Period and the Marketing Period, and Xxxxxxx Pharma shall purchase
all of its and its Affiliates' and sublicensees' requirements for TIMERx from
TIMERx Technologies during such period.
5.2 The price for all Formulated TIMERx sold hereunder shall equal
the Unit Price multiplied by the applicable kgs purchased; provided, however,
that the
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
******** all **************************************** **********************
**************************************** ********************************
******************************* (subject to annual adjustment by TIMERx
Technologies to reflect changes in the Pharmaceutical Producers' Index, or an
equivalent index, using as a base for comparison such index value as of the U.S.
Approval Date) ************* ********************************************* by
Xxxxxxx Pharma, its Affiliates and its and their sublicensees. Xxxxxxx Pharma
shall keep and shall cause its Affiliates and its and their sublicensees to keep
complete, true and accurate records of the number of such solid-dosage units
produced. TIMERx Technologies or its representatives shall have the right to
inspect, copy, and audit such records, and otherwise to enter upon the premises
of Xxxxxxx Pharma or its Affiliates or such sublicensees, at any time during
reasonable business hours upon notice, for purposes of verifying the number of
solid-dosage units produced. Information gathered during such an audit shall be
held in confidence by TIMERx Technologies and its Affiliates, except to the
extent any of the exceptions stated in Sections 7.1.1 through 7.1.7 apply
thereto. Any such audit shall be at the expense of TIMERx Technologies, unless
the audit reveals that, with respect to the period under audit, less than 95% of
the aggregate price due to TIMERx Technologies hereunder was paid, in which
event Xxxxxxx Pharma shall pay or reimburse TIMERx Technologies for the
reasonable expenses of such audit, in addition to TIMERx Technologies' other
remedies for such underpayment.
5.3 All sales of Formulated TIMERx shall be ************* and Xxxxxxx
Pharma shall bear all transportation, insurance, taxes, duties, and other costs
and risks of loss, spoilage and damage associated with the shipping and delivery
of Formulated TIMERx to Xxxxxxx Pharma or its Affiliates or sublicensees.
5.4 TIMERx Technologies shall perform routine quality control tests
with respect to all Formulated TIMERx as required by the FDA, or otherwise as
TIMERx Technologies deems necessary in accordance with its applicable policies.
TIMERx Technologies will also bear the expenses and fees for filing the Drug
Master File for TIMERx with the FDA. No other or special tests by TIMERx
Technologies with respect to the raw materials or Formulated TIMERx will be
required, unless and to the extent that Xxxxxxx Pharma establishes that the same
are required in order to obtain or maintain a governmental license to market the
Designated Product in the Territory. In any event, the cost of providing any
such other or special tests shall be separately reimbursed to TIMERx
Technologies by Xxxxxxx Pharma. TIMERx Technologies shall promptly, upon
completion of each lot or batch of Formulated TIMERx, deliver a copy of the
record of such test performed on said lot or batch.
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Xxxxxxx Pharma will perform quality control tests on Formulated TIMERx
immediately on receipt at its plant and advise TIMERx Technologies within thirty
(30) days of any deviations from Specifications.
5.5 If Xxxxxxx Pharma considers any such shipment not to conform
to the applicable Specifications, Xxxxxxx Pharma shall notify TIMERx
Technologies immediately and provide TIMERx Technologies with the relevant
analysis. TIMERx TECHNOLOGIES' SOLE OBLIGATION AND XXXXXXX PHARMA'S EXCLUSIVE
REMEDY FOR ANY SUCH NONCONFORMITY SHALL BE AS FOLLOWS:
i) TIMERx Technologies shall at its own expense accept return of
any shipment not accepted, or else reimburse Xxxxxxx Pharma for the cost of
disposal or destruction; and
iii) TIMERx Technologies shall use its best efforts to replace the
non-conforming shipment with conforming Formulated TIMERx.
5.6 While TIMERx Technologies is supplying Formulated TIMERx
hereunder to Xxxxxxx Pharma, TIMERx Technologies shall, after receipt of
reasonable prior notice, give duly accredited representatives of Xxxxxxx Pharma
access at all reasonable times during regular business hours to TIMERx
Technologies' or its Affiliate's plant in which the Formulated TIMERx is being
produced, to ensure production practices created Formulated TIMERx conforming to
Specifications.
5.7 TIMERx Technologies will exert its best efforts to supply test
quantities of Formulated TIMERx during the Certification Period within 90 days
following receipt of Xxxxxxx Pharma's firm written order therefor.
5.8 As the term is used in this Section 5, the exertion of TIMERx
Technologies' best efforts will mean that it will devote to the production and
supply of Formulated TIMERx called for hereunder efforts that would be
reasonable and normal for such supply arrangements, and if, greater, that it
will devote thereto resources and priorities at least as substantial and high as
any like-kind resources and priorities devoted by TIMERx Technologies to the
production or supply of TIMERx for any other drug or project, and also (if
additional) that TIMERx Technologies will attempt at all times to maintain an
inventory of approximately six months' production of Formulated TIMERx for
Xxxxxxx Pharma and its Affiliates and sublicensees, in light of their recent
ordering history and reasonable projections.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
5.9 Xxxxxxx Pharma shall deliver to TIMERx Technologies a firm
written order stating its (and/or its Affiliates' and sublicensees')
requirements for Formulated TIMERx to be used for production of the Designated
Product for commercial use or sale no less than 6 months in advance of the
requested delivery date therefor.
5.10 ***************before Xxxxxxx Pharma and/or its Affiliates or
sublicensees begin production of the Designated Product for commercial use or
sale (and in any event not later than concurrently with the submission of the
first order for use in the production of Designated Product intended for
commercial sale -- herein called the "Initial Order"), Xxxxxxx Pharma shall
deliver to TIMERx Technologies a written, non-binding estimate of all
requirements of Formulated TIMERx therefor during the following
******************. Xxxxxxx Pharma will deliver to TIMERx Technologies updates
to such estimates on or before the first day of each
**************************** thereafter, which updates may revise estimates
previously submitted, and will add estimates for additional months so that each
such estimate covers the ******* period following the end of the firm-order
period (that is, the ************************************ after the month in
which such estimates are made).
5.11 The Initial Order will be firm and will not be cancelled or
deferred by Xxxxxxx Pharma. No other order for Formulated TIMERx hereunder may
be cancelled or deferred by Xxxxxxx Pharma except by written notice delivered to
TIMERx Technologies at least 90 days prior to the scheduled delivery date. No
orders may be cancelled or deferred (even with such 90-day notice) without
TIMERx Technologies' approval if such cancellation or deferral would reduce
Xxxxxxx Pharma's purchases for the applicable ***** to less than
********************************** of the quantities ordered under Section 5.9
for that *****. TIMERx Technologies will exert its best efforts to supply
Xxxxxxx Pharma with all amounts of Formulated TIMERx requested by Xxxxxxx
Pharma, but TIMERx Technologies shall have no obligation to supply Xxxxxxx
Pharma with quantities of Formulated TIMERx during any ***** in excess of *****
of the quantity estimated in Xxxxxxx Pharma's estimate for that ***** which
estimate was given to TIMERx Technologies ****** prior to the end of such *****
pursuant to Section 5.10.
5.12 In case TIMERx Technologies cannot supply Xxxxxxx Pharma the
requested quantities of the Formulated TIMERx, the shipments may be made by
*******************************************************************************
********************* (and a total of at least two qualified manufacturing
sites, of its own and/or such alternate supplier(s)) and notify Xxxxxxx Pharma
thereof within 90
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days from the filing of the first ANDA. If Xxxxxxx Pharma has any objections to
such alternate supplier(s), it shall so notify TIMERx Technologies within
fifteen days following TIMERx Technologies' notice of such qualification, or
else Xxxxxxx Pharma will be deemed to have consented to such qualification and
the designation of such supplier(s). Such shipment by the alternate supplier
shall be made under the same agreed terms and conditions as those set forth
herein, except that an additional 90 days shall be added to the order lead time
stated in any then-outstanding order for Formulated TIMERx hereunder to reflect
the transition time required to shift to such alternate supplier.
Notwithstanding anything to the contrary set forth herein, TIMERx Technologies
will be responsible for enforcing all relevant terms and conditions set forth
herein against such alternate supplier and remain liable to Xxxxxxx Pharma for
any breach of such terms and conditions by such supplier.
5.13 If for any reason TIMERx Technologies or an alternate
supplier, as described in Section 5.12, fails to supply Xxxxxxx Pharma with its
and its Affiliates' and sublicensees' requirements of Formulated TIMERx during
the Certification Period or the Marketing Period, TIMERx Technologies shall, AS
XXXXXXX PHARMA'S SOLE AND EXCLUSIVE REMEDY FOR ANY FAILURE TO SUPPLY FORMULATED
TIMERx, xxxxx Xxxxxxx Pharma a nonexclusive license to manufacture Formulated
TIMERx under the TIMERx Production Technology and make knowledgeable personnel
reasonably available, at TIMERx Technologies' expense, to consult with Xxxxxxx
Pharma, all to the extent necessary to enable Xxxxxxx Pharma to produce
Formulated TIMERx that would otherwise have been supplied by TIMERx Technologies
hereunder for Xxxxxxx Pharma and its Affiliates and sublicensees in connection
with the production of the Designated Product pursuant to this Agreement.
5.13.1 ******************************
5.13.2 Xxxxxxx Pharma shall maintain TIMERx Production Technology
delivered to Xxxxxxx Pharma pursuant to this Section, whether orally or in
writing, in strictest confidence and shall use such information and technology
only for the purpose of producing Formulated TIMERx for its own use and the use
of its Affiliates and sublicensees in connection with this Agreement.
5.13.3 Xxxxxxx Pharma acknowledges that, in doing the foregoing,
TIMERx Technologies will not be providing a "turnkey" operation. Rather, TIMERx
Technologies will only be required to make reasonably available to Xxxxxxx
Pharma the best standard of knowledge and information then available to TIMERx
Technologies and directly used in its or its Affiliate's manufacture of
Formulated TIMERx. TIMERx Technologies will not be required to prepare, provide
or obtain any information not then in its possession, nor to adapt any of the
knowledge or information provided to the particular plant or manufacturing
location of Xxxxxxx Pharma, including without limitation any local legal,
licensing, or environmental considerations.
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5.13.4 Neither TIMERx Technologies nor its Affiliates or licensees
will be responsible for any failure of Xxxxxxx Pharma or its personnel to
understand or properly to implement such knowledge and information or for any
materials made by any party other than TIMERx Technologies or such respective
Affiliate or licensee using such knowledge and information.
5.13.5 If TIMERx Technologies' non-delivery of Formulated TIMERx
resulted in whole or in part from a temporary inability to produce and deliver
the same, TIMERx Technologies may, at its option and on at least 90 days' prior
written notice to Xxxxxxx Pharma, terminate the license to produce Formulated
TIMERx hereunder once TIMERx Technologies has demonstrated to the reasonable
satisfaction of Xxxxxxx Pharma that it is again able and willing to reliably
supply Formulated TIMERx hereunder. If and to the extent that Xxxxxxx Pharma
has, prior to the receipt of such notice from TIMERx Technologies, committed
itself to produce, or to purchase from a permitted sublicensee, any Formulated
TIMERx deliverable during the nine months following such notice from TIMERx
Technologies, Xxxxxxx Pharma may continue to produce or to purchase from such
sublicensee such Formulated TIMERx during such period, but not thereafter.
5.14 Each party shall promptly notify the other of any fact,
circumstance, condition or knowledge dealing with TIMERx, Formulated TIMERx, or
the Designated Product of which the Party becomes aware that bears upon the
safety or efficacy of TIMERx, Formulated TIMERx, or the Designated Product. Each
party shall immediately notify the other of any inspection or audit relating to
TIMERx, Formulated TIMERx, or the Designated Product by any governmental
regulatory authority in the Territory. If a representative of the governmental
authority takes samples in connection with such audit or inspection, the parties
shall immediately provide each other, as appropriate, samples from the same
batch. The party in receipt of such notice will provide the other party within
72 hours, with copies of all relevant documents, including FDA Forms 482 and 483
(as applicable), warning letters and other correspondence and notifications as
such other party may reasonably request. TIMERx Technologies and Xxxxxxx Pharma
agree to cooperate with each other during any inspection, investigation or other
inquiry by the FDA or other governmental entity, including providing information
and/or documentation, as requested by the FDA, or other governmental entity. To
the extent permissible, TIMERx Technologies and Xxxxxxx Pharma also agree to
discuss any responses to observations or notifications received and to give the
other party an opportunity to comment on any proposed response before it is
made. In the event of disagreement concerning the content or form of such
response, Xxxxxxx Pharma shall be responsible for deciding the appropriate form
and content of any response with respect to any of its cited activities and
TIMERx Technologies shall be responsible for deciding the appropriate form and
content of any response with respect to any of its cited activities. Each party
shall inform the other of all comments and conclusions received from the
governmental authority.
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6. OWNERSHIP AND LICENSES.
6.1 Except as otherwise explicitly licensed or transferred as
provided herein, each party will, as between it and the other party hereto,
retain ownership of any and all inventions, copyrights, trade secrets, patent
rights and other technology and rights to the extent conceived or developed by
its personnel or contractors (other than the other party hereto). Neither party
makes any grant of rights by implication. TIMERx Technologies will retain
ownership in (but Xxxxxxx Pharma shall have the right to use within the scope of
its licenses) all Dissolution Profile Studies and Pilot Biostudies and Xxxxxxx
Pharma will retain ownership of its Pivotal Biostudies and its ANDA. Except as
otherwise provided herein, each party shall be responsible, as it shall
determine, for the filing and prosecution of any and all patent applications
with respect, in whole or in part, to its own intellectual property and for the
maintenance of any available patent protection with respect thereto; provided
however, that neither party commits that any such patent protection will be
available or continuous hereunder.
6.2 TIMERx Technologies hereby grants to Xxxxxxx Pharma an
exclusive license under the TIMERx Technologies Patents and TIMERx Technologies'
Confidential Technology disclosed to Xxxxxxx Pharma hereunder to make, have
made, use and sell the Designated Product in the Territory during the License
Term. Such license does not extend to the making of TIMERx or Formulated TIMERx,
but does cover the incorporation of the same into the Designated Product.
Xxxxxxx Pharma shall have the right to grant sublicenses of its rights hereunder
to any Affiliate(s) of Xxxxxxx Pharma, but shall otherwise have no right to
grant sublicenses hereunder without the prior written consent of TIMERx
Technologies, which consent shall not be unreasonably withheld. TIMERx
Technologies will, throughout the License Term, promptly notify Xxxxxxx Pharma
of all TIMERx Technologies Patents referred to in Subsection 1.24.2 and provide
Xxxxxxx Pharma with access to all of the same, solely for use within the scope
of the license stated in this section.
6.3 Xxxxxxx Pharma acknowledges that TIMERx Technologies, for
itself and for others, applies, and will seek to apply, TIMERx to products
(which may include, without limitation, the Designated Product and other
controlled-release products containing Diltiazem) for manufacture and sale
outside the Territory, or to products within the Territory (but in that case,
during the License Term, only for products other than the Designated Product or
another controlled-release product containing Diltiazem). No provision hereof,
and no exclusivity hereunder, shall prevent TIMERx Technologies from so applying
TIMERx or Formulated TIMERx, so long as the end product is not the Designated
Product (or another controlled-release product containing Diltiazem) for
manufacture or sale in the Territory.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
6.4 Xxxxxxx Pharma hereby grants to TIMERx Technologies a nonexclusive,
paid-up, worldwide license, with right to sublicense, under any and all patents,
patent applications, trade secrets, copyrights, and other intellectual property
rights of any sort owned or controlled by Xxxxxxx Pharma or its Affiliates, to
make, have made, use and sell Formulated TIMERx during the License Term for
supply to Xxxxxxx Pharma or its Affiliates or sublicensees, if and to the extent
such license is necessary for TIMERx Technologies to do so as agreed hereunder.
6.5 Subject to and conditional upon the failure or continuing
unwillingness of TIMERx Technologies to meet Xxxxxxx Pharma's and its
Affiliates' and sublicensees' requirements as provided in Section 5.13, TIMERx
Technologies grants to Xxxxxxx Pharma a nonexclusive license under the TIMERx
Production Technology to make and have made Formulated TIMERx in the Territory
solely for use in the Designated Product for sale in the Territory during the
License Term, subject to Section 5.13.5. Xxxxxxx Pharma shall have no right to
grant sublicenses of its rights hereunder (whether to Affiliate(s) or otherwise)
without the prior written consent of TIMERx Technologies, which consent shall
not be unreasonably withheld.
6.6 Xxxxxxx Pharma hereby grants to TIMERx Technologies a nonexclusive,
paid-up, worldwide license, with right to sublicense, under any and all Xxxxxxx
Pharma Improvements to make, have made, use and sell any products or services
using or based upon TIMERx or related technology. ******************************
*******************************************************************************
******************* such license; provided, however, that if Xxxxxxx Pharma
terminates this Agreement pursuant to Section 2.8, 3.8 , or 10.2, this license
to TIMERx Technologies ********************************************************
******************* of the Designated Product or any services involving the
Designated Product. Xxxxxxx Pharma will, throughout the License Term, promptly
notify TIMERx Technologies of all Xxxxxxx Pharma Improvements and provide TIMERx
Technologies with access to all of the same, solely for use within the scope of
the license stated in this section.
6.7 Xxxxxxx Pharma hereby grants TIMERx Technologies a nonexclusive
license, with right to sublicense, under all rights of Xxxxxxx Pharma and its
Affiliates and sublicensees in and to the Xxxxxxx Pharma Test and Regulatory
Data to use the same for purposes of complying with governmental requirements of
any country, other than with respect to the Designated Product or another
controlled-release product containing Diltiazem for manufacturing, marketing or
use in the Territory.
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
Xxxxxxx Pharma hereby consents to TIMERx Technologies' and its sublicensees'
cross-referencing, in any ANDA or NDA filings made by them within the scope of
such license, any ANDA or NDA filing made or FDA master file created by Xxxxxxx
Pharma or its Affiliates relating to or containing any of the Xxxxxxx Pharma
Test and Regulatory Data. ******************************************************
********************* to be determined, if any commercial sales are made under
such license, **************** ******************** the Xxxxxxx Pharma Test and
Regulatory Data so used or referenced could have been properly accessed and used
by third parties not operating under such a license. It is also understood that
****************************************** ************** as licensed hereunder,
as such consideration may be later determined either by agreement of the parties
or pursuant to Section 10.6. The license under this section shall survive any
termination or expiration of the term of this Agreement, except a termination
under Section 10.3 due to an uncured breach by TIMERx Technologies. Xxxxxxx
Pharma will, throughout the License Term and solely for use within the scope of
the license stated in this section, provide to TIMERx Technologies on request
access to all of the Xxxxxxx Pharma Test and Regulatory Data in or coming into
Xxxxxxx Pharma's possession or otherwise reasonably available to it.
6.8 TIMERx Technologies hereby grants Xxxxxxx Pharma a nonexclusive,
paid-up license, with right to sublicense, under all rights of TIMERx
Technologies and its Affiliates in and to the TIMERx Technologies Test and
Regulatory Data to use the same for purposes of complying with governmental
requirements, but solely with respect to the Designated Product for marketing or
use in the Territory. TIMERx Technologies hereby consents to Xxxxxxx Pharma's
and its sublicensees' cross-referencing, in any ANDA filings made by them within
the scope of such license, any NDA filing made or FDA master file created by
TIMERx Technologies or its Affiliates relating to or containing any of the
TIMERx Technologies Test and Regulatory Data. The license and rights under this
section shall survive any termination or expiration of the term of this
Agreement, except a termination under Section 10.3 due to an uncured breach by
Xxxxxxx Pharma. TIMERx Technologies will, throughout the License Term and solely
for use within the scope of the license stated in this section, provide to
Xxxxxxx Pharma on request access to all of the TIMERx Technologies Test and
Regulatory Data in or coming into TIMERx Technologies' possession or otherwise
reasonably available to it.
6.9 Each party agrees to xxxx and to have marked by its sublicensees
every product manufactured, used or sold by it or its sublicensees in accordance
with the
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laws of the United States or other applicable nation relating to the marking of
patented articles with notices of patent.
7. CONFIDENTIALITY AND NON-SOLICITATION.
7.1 In the course of performance under this Agreement or the Heads
of Agreement, or during the discussions leading thereto, a party may disclose,
or may have disclosed, to the other confidential information belonging to such
party in writing, orally or by demonstration or sample, which information is
marked or stated in writing at or within 30 days after its disclosure to be
"confidential" or "trade secret" information. All such confidential information
of a party shall be maintained in confidence by the other and will not be used
by the other party for any purpose except as authorized hereunder. Each party
shall exercise, and shall cause its Affiliates, sublicensees, and consultants to
exercise, a reasonable degree of care and at least the same degree of care as it
uses to protect its own confidential information of similar nature to preserve
the confidentiality of such information of the other party. Each party shall
safeguard such information against disclosure to third parties, including
without limitation employees and persons working or consulting for such party
that do not have an established, current need to know such information for
purposes authorized under this Agreement. This obligation of confidentiality
does not apply to information and material that:
7.1.1 were properly in the possession of the receiving party,
without any restriction on use or disclosure, prior to receipt from the other
party;
7.1.2 are at the time of disclosure hereunder in the public domain
by public use, publication, or general knowledge;
7.1.3 become general or public knowledge through no fault of the
receiving party or its Affiliates following disclosure hereunder;
7.1.4 are properly obtained by the receiving party from a third
party not under a confidentiality obligation to the disclosing party hereto;
7.1.5 are independently developed by or on behalf of the receiving
party without the assistance of the confidential information of the other party;
7.1.6 consist merely of an idea or conception for the combination of
one or more active drug ingredients with a controlled-release agent such as
TIMERx; or
7.1.7 are required to be disclosed by order of any court or
governmental authority.
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7.2 Neither party shall make any public announcement or other
publication regarding this Agreement (whether as to the existence or terms
hereof) or the development work or project hereunder or the results thereof
without the prior, written consent of the other party, which consent shall not
be unreasonably withheld; provided that the foregoing shall not prohibit any
disclosure which, in the opinion of counsel to the disclosing party, is required
by any applicable law or by any competent governmental authority. In no event
shall either party make any disclosure of any such results before a patent
application has been filed with respect thereto, except upon the prior written
approval of the other party.
7.3 Each of TIMERx Technologies and Xxxxxxx Pharma agrees that
during the License Period, neither of them will directly or indirectly solicit
or encourage any employee or consultant of the other to leave or terminate such
employment or consultancy for any reason, including without limitation, becoming
employed or otherwise engaged in any capacity by such party (or any person or
entity associated with such party, whether or not an Affiliate), nor will it
assist others in doing so.
8. INFRINGEMENT.
8.1 TIMERx Technologies shall promptly inform Xxxxxxx Pharma of
any suspected infringement of any of the TIMERx Technologies Patents or the
infringement or misappropriation of the TIMERx Production Technology by a third
party, to the extent such infringement involves the manufacture, use or sale of
the Designated Product in the Territory ("Covered Infringement"). Xxxxxxx Pharma
shall promptly inform TIMERx Technologies of any suspected infringement of any
of the TIMERx Technologies Patents or infringement or misappropriation of the
TIMERx Production Technology of which Xxxxxxx Pharma is aware, whether or not
the same involves a Covered Infringement.
8.2 If the suspected infringement or misappropriation does not
involve a Covered Infringement, TIMERx Technologies may take, or refrain from
taking, any action it chooses, with or without notice to Xxxxxxx Pharma, and
Xxxxxxx Pharma shall have no right to take any action with respect to such
suspected infringement or misappropriation, nor to any recoveries with respect
thereto. TIMERx Technologies will exert reasonable efforts to keep Xxxxxxx
Pharma informed of actions TIMERx Technologies may take as described in the
preceding sentence to the extent the same bear on rights protected within the
Territory. If the suspected infringement or misappropriation involves a Covered
Infringement, TIMERx Technologies shall, within 120 days of the first notice
referred to in Section 8.1, inform Xxxxxxx Pharma whether or not TIMERx
Technologies intends to institute suit against such third party with respect to
a Covered Infringement. Xxxxxxx Pharma will not take any steps toward
instituting suit against any third party involving a Covered Infringement until
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TIMERx Technologies has informed Xxxxxxx Pharma of its intention pursuant to the
previous sentence.
8.3 If TIMERx Technologies notifies Xxxxxxx Pharma that it intends
to institute suit against a third party with respect to a Covered Infringement,
and Xxxxxxx Pharma does not agree to join in such suit as provided in Section
8.4, TIMERx Technologies may bring such suit on its own and shall in such event
bear all costs of, and shall exercise all control over, such suit. TIMERx
Technologies may, at its expense, bring such action in the name of Xxxxxxx
Pharma and/or cause Xxxxxxx Pharma to be joined in the suit as a plaintiff.
Recoveries, if any, whether by judgment, award, decree or settlement, shall
belong solely to TIMERx Technologies.
8.4 If TIMERx Technologies notifies Xxxxxxx Pharma that it desires
to institute suit against such third party with respect to a Covered
Infringement, and Xxxxxxx Pharma notifies TIMERx Technologies within 30 days
after receipt of such notice that Xxxxxxx Pharma desires to institute suit
jointly, the suit shall be brought jointly in the names of both parties and all
costs thereof shall be borne equally. Recoveries, if any, whether by judgment,
award, decree or settlement, shall, after the reimbursement of each of TIMERx
Technologies and Xxxxxxx Pharma for its share of the joint costs in such action,
be shared between TIMERx Technologies and Xxxxxxx Pharma as the interests of the
parties were affected by the infringement.
8.5 If TIMERx Technologies notifies Xxxxxxx Pharma that it does
not intend to institute suit against such third party with respect to a Covered
Infringement, Xxxxxxx Pharma may institute suit on its own. Xxxxxxx Pharma shall
bear all costs of, and shall exercise all control over, such suit. Recoveries,
if any, whether by judgment, award, decree or settlement, shall belong solely to
Xxxxxxx Pharma; provided however that, after reimbursement of Xxxxxxx Pharma for
its costs in such action, any portion of such net recoveries which constitutes
the equivalent of, or damages or payments in lieu of, a royalty measured by the
defendant's Net Sales, shall be shared between TIMERx Technologies and Xxxxxxx
Pharma in accordance with Section 4.3 as if they were Xxxxxxx Pharma's Net Sales
(counting the infringing party's product as a Competing Generic Version).
8.6 Should either TIMERx Technologies or Xxxxxxx Pharma commence a
suit under the provisions of this Section 8 and thereafter elect to abandon the
same, it shall give timely notice to the other party, who may, if it so desires,
be joined as a plaintiff in the suit (or continue as such if it is already one)
and continue prosecution of such suit, provided, however, that the sharing of
expenses and any recovery of such suit shall be as agreed upon between TIMERx
Technologies and Xxxxxxx Pharma.
9. REPRESENTATIONS, WARRANTIES AND INDEMNITIES.
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9.1 Each party represents and warrants to the other that, to its
current knowledge, without undertaking any special investigation, it has the
full right and authority to enter into this Agreement and to grant the licenses
granted herein.
9.2 TIMERx Technologies represents and warrants that any
Formulated TIMERx supplied by it to Xxxxxxx Pharma hereunder for use in the
Designated Product, at the point of delivery:
9.2.1 will conform to the Specifications in effect as of the
order date therefor; and
9.2.2 to TIMERx Technologies' current knowledge, without
undertaking any special investigation, will not infringe upon
an article patent of any third party.
OTHERWISE, TIMERx TECHNOLOGIES PROVIDES "AS-IS," AND MAKES NO REPRESENTATIONS OR
WARRANTIES AS TO, ANY TIMERx OR FORMULATED TIMERx SUPPLIED BY IT TO XXXXXXX
PHARMA FOR TESTING, DEVELOPMENT, OR ANY OTHER PURPOSES EXCEPT EXPLICITLY FOR USE
IN THE DESIGNATED PRODUCT FOR COMMERCIAL USE OR SALE.
9.3 Each party represents and warrants to the other that it has
obtained, and will at all times during the term of this Agreement hold and
comply with, all licenses, permits and authorizations necessary to perform this
Agreement and to test, manufacture, market, export, and import the Designated
Product or Formulated TIMERx, as now or hereafter required under any applicable
statutes, laws, ordinances, rules and regulations of the United States and any
applicable foreign, state, and local governments and governmental entities.
9.4 THE FOREGOING WARRANTIES ARE IN LIEU OF, AND THE PARTIES EACH
DISCLAIM, ALL OTHER WARRANTIES, EXPRESS, IMPLIED OR ARISING BY LAW, INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, AND NON-INFRINGEMENT. NOTHING IN THIS AGREEMENT SHALL BE
CONSTRUED AS A REPRESENTATION OR WARRANTY (I) BY TIMERx TECHNOLOGIES AS TO THE
PATENTABILITY, VALIDITY, OR SCOPE OF ANY TIMERx TECHNOLOGIES PATENTS, TIMERX
TECHNOLOGIES' CONFIDENTIAL TECHNOLOGY, TIMERx PRODUCTION TECHNOLOGY, OR TIMERX
TECHNOLOGIES TEST AND REGULATORY DATA, NOR AS TO THE UTILITY, EFFICACY,
NONTOXICITY, SAFETY OR APPROPRIATENESS OF TIMERx OR THE DESIGNATED PRODUCT; OR
(II) BY XXXXXXX PHARMA AS TO THE PATENTABILITY, VALIDITY, OR SCOPE OF ANY
XXXXXXX PHARMA IMPROVEMENTS OR XXXXXXX PHARMA TEST AND
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
REGULATORY DATA, NOR AS TO THE UTILITY, EFFICACY, NONTOXICITY, SAFETY OR
APPROPRIATENESS OF ANY PRODUCTS MADE THEREFROM.
9.5 TIMERx Technologies shall indemnify, defend and hold harmless
Xxxxxxx Pharma and its Affiliates and sublicensees from any claim, action or
damages arising out of any alleged infringement by reason of the manufacture,
use or sale by Xxxxxxx Pharma of the Designated Product to the extent such
infringement would apply as well to the manufacture, sale or distribution of
TIMERx alone or otherwise to the extent the same is covered by Section 9.6.2. If
Xxxxxxx Pharma or its Affiliate or sublicensee, by reason of its manufacture,
sale or distribution of Designated Product, is accused of infringing the patent
of a third party, and such claim of infringement, as framed by the claimant,
would apply as well to the manufacture, sale or distribution of TIMERx alone or
otherwise to the extent the same is covered by Section 9.6.2, Xxxxxxx Pharma
shall immediately so notify TIMERx Technologies and provide TIMERx Technologies
all available information, and the parties shall consult reasonably as to the
proper course of action. If TIMERx Technologies and Xxxxxxx Pharma jointly
determine that such claim is likely to prevail, or if an arbitrator hereunder or
a court of competent jurisdiction so determines, *******************************
************************************************************************.
9.6 TIMERx Technologies shall indemnify, defend and hold Xxxxxxx
Pharma and its Affiliates and sublicensees harmless from any and all third-party
claims to the extent arising from, in connection with, based upon, by reason of,
or relating in any way to:
9.6.1 *************************************************************
*************************************************************** in the
Designated Product;
9.6.2 TIMERx Technologies'*****************************************
*******************************************************************************
and the Specifications therefor hereunder;
9.6.3 any failure of the Formulated TIMERx manufactured by TIMERx
Technologies or its alternate supplier (but not by Xxxxxxx Pharma under Section
5.13), as delivered to Xxxxxxx Pharma hereunder for use in the Designated
Product, to conform to the Specifications; or
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CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
9.6.4 any failure of TIMERx Technologies to comply with its
obligation under Section 5.14 to notify Xxxxxxx Pharma of any information coming
into TIMERx Technologies' possession ***************************************
and not arising from any other aspect of the Designated Product or its
formulation, development, supply, production, manufacture, sale, delivery,
distribution or use, nor from any act or omission of Xxxxxxx Pharma with
respect to the Formulated TIMERx following its delivery to Xxxxxxx Pharma
hereunder.
9.7 Xxxxxxx Pharma shall indemnify, defend and hold TIMERx
Technologies harmless from any and all third-party claims to the extent arising
from, in connection with, based upon, by reason of, or relating in any way to,
the formulation, development, supply, production, manufacture, sale, delivery,
distribution or use of the Designated Product by Xxxxxxx Pharma, its Affiliates
or sublicensees, except for any matters which are covered by TIMERx
Technologies' indemnities under Sections 9.5 and 9.6.
9.8 Notwithstanding anything to the contrary set forth elsewhere
herein, neither Xxxxxxx Pharma nor TIMERx Technologies shall be obligated to
indemnify the other party for claims or liabilities to the extent arising from
such other party's, or its Affiliates', sublicensees' or assigns', negligence,
intentional misconduct, or breach of its duties, obligations, warranties or
representations set forth herein.
9.9 Whenever indemnification is provided for a party under this
Agreement, such right of indemnification shall extend also to the indemnified
party's Affiliates, officers, directors, shareholders, successors, assigns,
agents, employees, and insurers to the extent the same become subject to such
claim in such capacity. The party seeking indemnification shall provide the
indemnifying party with written notice of any claim or action within ten (10)
days of its receipt thereof, and shall afford the indemnifying party the right
to control the defense and settlement of such claim or action. The party seeking
indemnification shall provide reasonable assistance to the indemnifying party in
the defense of such claim or action. If the defendants in any such action
include both Xxxxxxx Pharma and TIMERx Technologies and either party concludes
that there may be legal defenses available to it which are different from,
additional to, or inconsistent with, those available to the other, that party
shall have the right to select separate counsel to participate in the defense of
such action on its behalf, and such party shall thereafter bear the cost and
expense of such separate defense. Should the indemnifying party determine not to
defend such claim or action, the other party shall have the right to maintain
the
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defense of such claim or action and the indemnifying party agrees to provide
reasonable assistance to it in the defense of such claim or action. Neither
party shall settle any such claim or action in a way that prejudices or
adversely impacts the other party to this Agreement without the prior approval
of such other party (which approval shall not be unreasonably withheld).
9.10 NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
AGREEMENT (OTHER THAN SECTION 7 WITH RESPECT TO BREACHES OF CONFIDENTIALITY AND
NONSOLICITATION AND SECTION 9.5 WITH RESPECT TO INDEMNITIES FOR PATENT
INFRINGEMENT AND SECTIONS 9.6 AND 9.7 WITH RESPECT TO INDEMNITIES FOR HARM TO
PERSONS OR TANGIBLE PROPERTY), NEITHER PARTY SHALL UNDER ANY CIRCUMSTANCES BE
LIABLE FOR ANY THIRD PARTY CLAIMS OR FOR ANY INCIDENTAL, CONSEQUENTIAL, INDIRECT
OR SPECIAL DAMAGES, INCLUDING ANY LOST PROFITS OR SAVINGS, ARISING FROM ANY
BREACH OF WARRANTY OR THE PERFORMANCE OR BREACH OF ANY OTHER PROVISION OF THIS
AGREEMENT OR THE USE OR INABILITY TO USE TIMERx, THE DESIGNATED PRODUCT, TIMERx
TECHNOLOGIES PATENTS, TIMERx TECHNOLOGIES' CONFIDENTIAL TECHNOLOGY, TIMERx
PRODUCTION TECHNOLOGY, TIMERx TECHNOLOGIES TEST AND REGULATORY DATA, XXXXXXX
PHARMA IMPROVEMENTS, OR XXXXXXX PHARMA TEST AND REGULATORY DATA, OR ANY CLAIMS
ARISING IN TORT, PERSONAL INJURY, OR PRODUCT LIABILITY, EVEN IF SUCH PARTY HAS
BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
10. TERM AND TERMINATION.
10.1 The term of this Agreement shall begin on the date set forth
above and shall, unless earlier terminated as provided herein, continue until
the end of the License Term.
10.2 Xxxxxxx Pharma may at its option terminate this Agreement
following the U.S. Approval Date, upon at least 120 days' written notice to
TIMERx Technologies.
10.3 In the event that either party materially breaches any of the
terms, conditions or agreements contained in this Agreement to be kept, observed
or performed by it, then the other party may terminate this Agreement, at its
option and without prejudice to any of its other legal or equitable rights or
remedies, by giving the party who committed the breach (i) in the case of breach
of obligations other than the payment of money, 60 days' notice in writing,
unless the notified party within such 60-day period shall have cured the breach,
and (ii) in the case of breach of an
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obligation for the payment of money, 20 days' notice in writing, unless the
notified party within such 20-day period shall have cured the breach, including
any required payment of interest on previously unpaid amounts as set forth
herein.
10.4 This Agreement will automatically terminate if Xxxxxxx Pharma
files for protection under federal or state bankruptcy laws, becomes insolvent,
makes an assignment for the benefit of creditors, appoints or suffers
appointment of a receiver or trustee over its property, files a petition under
any bankruptcy or insolvency act or has such petition filed against it.
10.5 Any sublicenses granted by Xxxxxxx Pharma under this Agreement
shall provide for assignment to TIMERx Technologies of Xxxxxxx Pharma's interest
therein upon termination of this Agreement, subject to TIMERx Technologies'
approval, which shall not be unreasonably withheld, but which, if properly
withheld, shall result in the termination of such sublicense.
10.6 Following any expiration or termination of the License Term, the
license to TIMERx Technologies under Section 6.7 shall be thereafter extended to
include (in addition to its coverage as stated in such section) the use of
Xxxxxxx Pharma Test and Regulatory Data for purposes of complying with
governmental requirements with respect to the Designated Product for
manufacturing, marketing or use in the Territory. While exercises of the rights
licensed under Section 6.7 prior to the extension under this Section will
continue to bear a reasonable consideration as provided in Section 6.7,
exercises of such rights as so extended under this Section for purposes of
complying with governmental requirements with respect to the Designated Product
or another controlled-release product containing Diltiazem for manufacturing,
marketing or use in the Territory will be fully paid-up and royalty free.
10.7 Xxxxxxx Pharma's obligations regarding payment of Royalties
accrued as of the date of termination, TIMERx Technologies' rights under
Sections 6.6 and 6.7 (except if this Agreement is terminated due to an uncured
breach on the part of TIMERx Technologies), and Xxxxxxx Pharma's rights under
Section 6.8 (except if this Agreement is terminated due to an uncured breach on
the part of Xxxxxxx Pharma), and the provisions of Sections 7, 9, and 11, hereof
shall survive any expiration or termination of this Agreement.
10.8 All rights and licenses granted under or pursuant to this
Agreement by TIMERx Technologies (as the "licensor") to Xxxxxxx Pharma (as the
"licensee") or by Xxxxxxx Pharma (as the "licensor") to TIMERx Technologies (as
the "licensee") are and shall otherwise be deemed to be, for purposes of Section
365(n) of the Bankruptcy Code, licenses of rights to "intellectual property" as
defined under Section 101(52) of the Bankruptcy Code. The parties agree that the
licensee of such rights under this Agreement, shall retain and may fully
exercise all of its rights and
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elections under the Bankruptcy Code. The parties further agree that, in the
event of the commencement of a bankruptcy proceeding by or against the licensor
under the Bankruptcy Code, the licensee shall be entitled to a complete
duplicate of (or complete access to, as appropriate) any such intellectual
property and all embodiments of such intellectual property, and the same, if not
already in its possession, shall to the extent required for the exercise of the
licenses granted hereunder, be promptly delivered to the licensee (i) upon any
such commencement of a bankruptcy proceeding upon written request therefor by
the licensee, unless the licensor elects to continue to perform all of its
obligations under this Agreement, or (ii) if not delivered under (i) above, upon
the rejection of this Agreement by or on behalf of the licensee upon written
request therefor by the licensee.
11. MISCELLANEOUS.
11.1 This Agreement incorporates the numbered Exhibits referenced
herein. This Agreement, together with Sections 2 and 3 and Exhibits A, B and C
of the Heads of Agreement as referenced and incorporated herein, constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, between the parties hereto with respect to the subject matter
hereof (including without limitation the balance of the Heads of Agreement).
11.2 This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their successors and permitted assigns; provided,
however, that except as part of the transfer of all or substantially all assets
to a single buyer or pursuant to a merger or other corporate reorganization:
11.2.1 TIMERx Technologies shall not delegate or subcontract any of
its obligations during the Development Period, and
11.2.2 Xxxxxxx Pharma shall not assign or delegate its rights or
obligations hereunder at any time, without the prior written consent of the
other party hereto.
11.3 All notices, requests or other communication provided for or
permitted hereunder shall be given in writing and shall be hand delivered or
sent by facsimile, reputable courier or by registered or certified mail, postage
prepaid, return receipt requested, to the address set forth on the signature
page of this Agreement, or to such other address as either party may inform the
other of in writing. Notices will be deemed delivered on the earliest of
transmission by facsimile, actual receipt or three days after mailing as set
forth herein.
11.4 Any terms of this Agreement may be amended, modified or waived
only in a writing signed by both parties.
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11.5 If any provision of this Agreement shall be held invalid, illegal
or unenforceable, such provision shall be enforced to the maximum extent
permitted by law and the parties' fundamental intentions hereunder, and the
remaining provisions shall not be affected or impaired.
11.6 Nothing herein contained shall constitute this a joint venture
agreement or constitute either party as the partner, principal or agent of the
other, this being an Agreement between independent contracting entities. Neither
party shall have the authority to bind the other in any respect whatsoever.
Except as provided herein, nothing contained in this Agreement shall be
construed as conferring any right on either party to use any name, trade name,
trademark or other designation of the other party hereto, unless the express,
written permission of such other party has been obtained.
11.7 In the event that either party hereto is prevented from carrying
out its obligations under this Agreement by events beyond its reasonable
control, including without limitation acts or omissions of the other party, acts
of God or government, natural disasters or storms, fire, political strife, labor
disputes, failure or delay of transportation, default by suppliers or
unavailability of parts, then such party's performance of its obligations
hereunder shall be excused during the period of such event and for a reasonable
period of recovery thereafter, and the time for performance of such obligations
shall be automatically extended for a period of time equal to the duration of
such event or events; provided, however, that the other party may, at its
election, terminate this Agreement upon 120 days' prior notice to the party
affected by such events, unless such events cease to prevent such affected
party's performance hereunder during such 120-day period.
11.8 This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of New York without regard to its
conflict of laws rules.
11.9 Any dispute, other than a question relating to patent validity,
between the parties which arises under this Agreement or is otherwise related to
this Agreement and which cannot be resolved by good faith negotiation between
the parties over a period of at least ninety (90) days shall be resolved by
arbitration conducted in the English language in Seattle, Washington, before a
panel of three arbitrators under the then current rules and procedures of the
American Arbitration Association (the "AAA"), or other rules and procedures as
the parties may agree. The prevailing party in any such proceeding shall be
entitled to an award of its reasonable attorneys' fees and other costs,
including the fees and expenses of the arbitrators and the AAA, provided that
the same may be apportioned between the parties by the arbitrators if they
determine that each party has prevailed in part. The arbitral award shall be
binding and conclusive on both parties and may be enforced in any court of
competent jurisdiction. Notwithstanding the foregoing, either party
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may, on good cause shown, seek a temporary restraining order and/or a
preliminary injunction from a court of competent jurisdiction, to be effective
pending the institution of the arbitration process and the deliberation and
award of the arbitration panel.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and acknowledge this Agreement as of the date
first written above.
XXXXXXX PHARMA INC. TIMERx TECHNOLOGIES
By /s/ [illegible] By /s/ [illegible]
-------------------------------- --------------------------------
Its President Its President
-------------------------------- --------------------------------
Address: Address:
0000 Xxxxxx Xxxx Xxxx 0000 Xxxxx 00
Xxxxxx, Xxxxxxxxx 00000 Patterson, N.Y. 12563
FAX: (000) 000-0000 FAX: (000) 000-0000
----------------------------- -----------------------------
Attn: Attn:
----------------------------- -------------------------------
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HEADS OF AGREEMENT and DEVELOPMENT AGREEMENT
This HEADS OF AGREEMENT and DEVELOPMENT AGREEMENT ("Agreement")
is entered into on September 20, 1995 ("Effective Date") by and between TIMERx
Technologies, a division of Penwest, Ltd., a Washington corporation, with
principal place of business at 0000 Xxxxx 00, Xxxxxxxxx, Xxx Xxxx 00000
("TIMERx Technologies"), and XXXXXXX PHARMA INC., a Delaware corporation, with
principal place of business at 0000 Xxxxxx Xxxx Xxxx, Xxxxxx, Xxxxxxxxx 00000
("Xxxxxxx Pharma").
1. Background and Objectives.
1.1 TIMERx Technologies is a pharmaceutical company
specializing in the development, manufacture and distribution of
controlled-release delivery systems. TIMERx(R) is the product name of TIMERx
Technologies' patented oral delivery system. The system facilitates release of
therapeutically active agents into the human gastrointestinal tract at
predetermined rates. Formulated TIMERx(R) is designed to increase an active
agent's effectiveness and performance.
1.2 Xxxxxxx Pharma is a pharmaceutical company, which
wishes to develop a controlled release version of Diltiazem to be
Therapeutically Equivalent (as hereinafter defined) to Cardizem CD, in four
dosage strengths: 120mg, 180mg, 240mg, and 300mg ("Products").
1.3 Xxxxxxx Pharma and TIMERx Technologies desire to enter
into an agreement(s) for TIMERx Technologies and Xxxxxxx Pharma to jointly
develop, and allowing Xxxxxxx Pharma to exclusively license, manufacture, market
and distribute, the Products in territories expected to comprise the United
States, Mexico and Canada (the "Territory"), utilizing TIMERx(R) supplied by
TIMERx Technologies. In anticipation of such an agreement, Xxxxxxx Pharma and
TIMERx Technologies additionally desire to conduct certain biostudies with
respect to Cardizem CD, which studies have direct application to the
contemplated Products. This Agreement sets forth certain key business points
which in turn will form the basis for future, more detailed, agreement(s)
between the parties. The Agreement also sets forth the understanding of the
parties with respect to the biostudies and initial development of the Products.
1.4 The parties anticipate that the value of the Products
will be likely to vary depending upon the presence or absence of effective
competing drug formulations in the United States market. For purposes of this
Agreement, a "Competing Generic Version" means a drug that meets all of the
following criteria: (i) it is rated AB bioequivalent to Cardizem CD in the same
dosage strength(s) (herein "Therapeutically Equivalent") as the applicable
Products being studied, manufactured, or marketed, (ii) it has been fully
approved for commercial sale in oral solid-dosage form for administration in
humans by the FDA, (iii) it is actively on the market in the United States
under a brand other than "Cardizem" or "Cardizem CD", and (iv) it is not
marketed by Xxxxxxx Pharma, any of its affiliates, or under a license or
sublicense from Xxxxxxx Pharma or its affiliates or sublicensees in any tier.
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COMMISSION. ASTERISKS DENOTE OMISSION
NOW THEREFORE, in consideration of the mutual covenants contained herein,
the receipt and sufficiency of which is acknowledged, the parties agree as
follows:
2. Option and Option Fee. In consideration for TIMERx Technologies granting
to Xxxxxxx Pharma (i) an exclusive option to negotiate and enter into the
agreements described in Section 4 below, and otherwise on reasonable terms to
be negotiated by the parties in accordance with the terms of this Agreement,
and (ii) an exclusive option to negotiate and enter into agreements to
exclusively license, manufacture, market and distribute Products in Europe on
reasonable terms to be negotiated by the parties, Xxxxxxx Pharma will pay TIMERx
Technologies a fee of ******** upon execution of this Agreement. The option
under clause (i) will expire on June 1, 1996, if the parties have not reached
such an agreement prior to that date. The option under clause (ii) with respect
to Europe must be exercised by Xxxxxxxx Pharma by written notice to TIMERx
Technologies of its intent to negotiate to be delivered to TIMERx Technologies
on or before June 30, 1996, and will expire on January 1, 1997, if the parties
have not reached such an agreement prior to that date.
3. Development Milestones.
3.1 Dissolution Profile Studies. Upon execution of this Agreement and
payment of the Option Fee, TIMERx Technologies will conduct in vitro
"Dissolution Profile Studies" of a TIMERx(R) formulation designed to be
Therapeutically Equivalent to Cardizem CD in each of the four dosage strengths.
The parties anticipate that the first dosage strength to be so studied will
be either 180mg or 240mg, as the parties may determine. TIMERx Technologies
will complete the Dissolution Profile Study for the first dosage strength
within four to six months of execution of this Agreement. Regardless of the
outcome or results of such study, Xxxxxxx Pharma agrees to pay TIMERx
Technologies a fee therefor equal to *****************************************
********************************* first such installment to be due and payable
thirty days after the Effective Date.
3.2 Initiation of Pilot Biostudy. Upon successful completion of the
Dissolution Profile Studies, the parties shall proceed with Pilot Biostudies
after agreement on study design and costs. Xxxxxxx Pharma will pay all of TIMERx
Technologies' GAAP costs (including, without limitation, allocated
administration and overhead, labor and benefits, and the costs of materials
manufacture and acquisition but excluding capital costs) (the "Pilot Study
Costs") to conduct an initial Pilot Biostudy with respect to one or more dosage
strengths, as needed, it being understood that further development of the four
dosage strengths may not require that Pilot Biostudies be performed for all four
strengths. The dosage strength(s) to be the subject of such initial Pilot
Biostudy, the design of the study(ies), and the appropriate clinical research
organization to conduct the study(ies), will be mutually agreed by the parties.
The Pilot Study Costs will be invoiced by TIMERx Technologies to Xxxxxxx Pharma
periodically as incurred, and will be payable within thirty days of invoice
date. TIMERx Technologies will complete the initial Pilot Biostudy within four
months of such agreement to proceed and notification from Xxxxxxx Pharma. If the
initial Pilot Biostudy requires further optimization of the TIMERx(R)
formulation, Xxxxxxx Pharma agrees to pay similarly all the Pilot Study Costs
for an additional biostudy to develop a formulation of TIMERx(R) Therapeutically
Equivalent to each desired dosage strength of Cardizem CD. If the parties agree
that additional Pilot Biostudies are needed for such purposes following the
first two such studies,
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Xxxxxxx Pharma agrees to pay similarly one-half of TIMERx Technologies' Pilot
Study Costs for such additional biostudies.
3.3 Successful Completion of Pilot Biostudy. When a Pilot Biostudy is
successfully completed (i.e., TIMERx Technologies develops a formulation of
TIMERx(R) Therapeutically Equivalent to any of the desired dosage strengths of
Cardizem CD), Xxxxxxx Pharma will pay TIMERx Technologies a fee determined as
set forth in Exhibit A, it being understood that such fee will be payable only
once, and not for the subsequent successful completion of Pilot Biostudies for
other dosage strengths.
3.4 Pivoral Biostudies. Within twelve months of successful completion of
such Pilot Biostudies, Xxxxxxx Pharma will conduct and complete at its expense
Pivotal Biostudies of two or more dosage strengths (it being understood that
"bracketing" and other techniques may make it unnecessary to perform Pivotal
Biostudies on all four dosage strengths) as necessary for U.S. Food and Drug
Administration ("FDA") (or equivalent regulatory authority) approval of the
Products in the four dosage strengths. Upon successful completion of a Pivotal
Biostudy, Xxxxxxx Pharma will pay TIMERx Technologies a fee determined as set
forth in Exhibit A, it being understood that such fee will be payable only
once, and not for the subsequent successful completion of Pivotal Biostudies
for other dosage strengths.
4. Product Marketing and Supply Agreement.
4.1 Overview of the Agreement. The next step in the parties' transactions
is to enter into a long-term agreement referred to as the "Product Marketing
and Supply Agreement" with respect to the United States, Mexico and Canada.
(The parties anticipate that subsequent discussions between them will be
directed toward appropriate agreements with respect to Europe.) The Product
Marketing and Supply Agreement sets forth: (i) the terms of the license granted
to Xxxxxxx Pharma to manufacture and distribute the Products, (ii) supply
requirements for manufacture of the Products; (iii) development milestones
marking achievement of specified goals; and (iv) royalty payments. Structuring
the relationship into a series of "development milestones" promotes certainty
in each party's responsibilities, and eliminates misunderstanding in mutual
obligations. Xxxxxxx Pharma's right shall include the right to sublicense,
subject to the approval of TIMERx Technologies, which shall not be unreasonably
withheld.
4.2 Development Milestones. Xxxxxxx Pharma shall pay to TIMERx
Technologies the following milestone payments:
4.2.1. First Milestone: *************************************
***********************************************************************
**************************************************** Xxxxxxx Pharma will pay
TIMERx Technologies a fee determined as set forth in Exhibit A. It is
understood that the parties currently anticipate a single ANDA filing for all
dosage strengths.
4.2.2. Second Milestone: ***********************************
*****************************************************************************
************
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COMMISSION. ASTERISKS DENOTE OMISSION
***********, Xxxxxxx Pharma will pay TIMERx Technologies a fee determined as
set forth in Exhibit A.
4.2.3 Third Milestone: ********************************************
*****************************************************************************
Xxxxxxx Pharma will pay TIMERx Technologies a fee determined as set forth in
Exhibit A.
4.3 The Marketing Period. The Marketing Period denotes the time frame
during which Xxxxxxx Pharma is licensed to use the TIMERx(R) controlled
delivery system to manufacture, market, promote and sell the Products in a
designated geographic territory.
4.3.1 Term. Duration of the Marketing Period depends on the length of
the license period negotiated, and the parties anticipate a twenty year term.
4.3.2 Royalties. The royalty rate due TIMERx Technologies for sales
of the Products during the Marketing Period will be determined as set forth in
Exhibit B.
5. Supply of Formulated TIMERx(R). In order to assure consistently high product
quality, and as part of the consideration for the license grant to Xxxxxxx
Pharma of TIMERx Technologies' patented technology, Xxxxxxx Pharma will buy all
its requirements of TIMERx(R) from TIMERx Technologies during the Marketing
Period, at a price determined as set forth in Exhibit C, subject to (i) annual
adjustment by TIMERx Technologies to reflect changes in the Pharmaceutical
Producers' Index, or an equivalent index; and (ii) appropriate provisions
assuring continuity of supply.
6. Confidentiality and Non-Disclosure Obligations. In addition to the terms of
the Secrecy Agreement entered into between the parties on April 27, 1995, both
parties agree to maintain the terms and conditions of this Agreement in
strictest confidence, and not disclose or use, or allow others to disclose or
use, information exchanged under this Agreement, including information included
in the biostudies, in any way that would compete, directly or indirectly, with
the other party. Additionally, TIMERx Technologies will retain ownership in
(but Xxxxxxx Pharma shall have the right to use within the scope of its
licenses) all Dissolution Profile Studies and Pilot Biostudies and Xxxxxxx
Pharma will retain ownership of its ANDA. Each party shall retain ownership of
its own trademarks, tradenames and trade dress. Xxxxxxx Pharma and TIMERx
Technologies shall each have the right to access and reference the other's
DMFs. The non-disclosure and confidentiality obligations shall continue for
five (5) years following the Effective Date.
7. Governing Law. This Agreement shall be interpreted and construed under the
laws of the State of New York.
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IN WITNESS WHEREOF, the parties have executed this Agreement to take
effect on the Effective Date.
XXXXXXX PHARMA INC. TIMERx TECHNOLOGIES
By: /s/ [illegible] By: /s/ Xxxx X. Xxxxxx, Xx.
------------------------ ------------------------
Title: President Title: President
--------------------- ---------------------
Date: 9/20/95 Date: 9/20/95
---------------------- ----------------------
38
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
EXHIBIT A
TO HEADS OF AGREEMENT AND DEVELOPMENT AGREEMENT
BETWEEN TIMERx TECHNOLOGIES AND XXXXXXX PHARMA INC.
MILESTONE PAYMENTS
The milestone payments will vary depending on whether, and how many, Competing
Generic Versions are in existence on the Trigger Date for each such milestone.
The Trigger Date for a milestone is the date that the conditions to such
milestone have been satisfied, as stated in this Agreement; e.g., the Trigger
Date for each of the biostudies is the completion of the respective study, the
Trigger Date for the Filing is the date of such Filing, the Trigger Date for
the Approval is the date of the Approval, and the Trigger Date for the Launch
is the date of the Launch. The following table sets forth the applicable
milestone payments, in U.S. Dollars:
Number of Completing Generic Versions on
Milestone the Applicable Trigger Date
--------- -------------------------------------------
***** ***** ***** *****
------- ------- ------- ---------
****************
****** ******* ******* ******* *******
**************** ******* ******* ******* *******
**************** ******* ******* ******* *******
**************** ******* ******* ******* *******
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EXHIBIT B
TO HEADS OF AGREEMENT AND DEVELOPMENT AGREEMENT
BETWEEN TIMERx TECHNOLOGIES AND XXXXXXX PHARMA INC.
ROYALTY RATES
The royalty rates will vary depending on whether, and how many, Competing
Generic Versions are in existence during the calendar quarter in which the
royalties accrue, and the Net Sales then reached for that year. If a Competing
Generic Version first comes into existence during the first half of a calendar
quarter, it will be deemed to have been in existence from the first day of such
quarter, and if it first comes into existence during the second half of a
calendar quarter, it will be deemed not to have been in existence until the
first day of the following quarter. The following table sets forth the
applicable incremental royalty rates, in percentages of Annual GAAP Net Sales:
Portion of Net Sales Number of Competing Generic Versions during
during Each Year the Applicable Quarter
-------------------- -------------------------------------------------
***** ***** ***** *****
**************** ******* ******* ******* *******
**************** ******* ******* ******* *******
*************
**************** ******* ******* ******* *******
*************
**************** ******* ******* ******* *******
*************
Page 7
40
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
EXHIBIT C
TO HEADS OF AGREEMENT AND DEVELOPMENT AGREEMENT
BETWEEN TIMERx TECHNOLOGIES AND XXXXXXX PHARMA INC.
FORMULATED TIMERx(R) PRODUCT PRICES
The price for the Formulated TIMERx(R) product to be supplied by TIMERx
Technologies to Xxxxxxx Pharma will vary depending on whether, and how many,
Competing Generic Versions are in existence when the product units are ordered.
The following table sets forth the applicable prices, per kilogram, in U.S.
Dollars, subject to adjustment as stated in the Agreement:
Number of Competing Generic Versions on
the Applicable Order Date
-----------------------------------------------------
**** **** **** ****
---- --- --- ---------
Price* *** *** *** ***
*In all cases, Price shall be subject to an *********** (to be determined
annually) ************* per tablet (subject to annual adjustment by TIMERx
Technologies to reflect changes in the Pharmaceutical Producers' Index, or an
equivalent index) calculated on a unit weighted average of all dosage strengths.
Page 8
41
EXHIBIT 1.1
TIMERx Technologies Affiliates
Xxxxxxx Pharma Affiliates
TIMERx Technologies Affiliates
PENWEST, LTD.
Xxxxxx Xxxxxxx Co., Inc.
Penford Products Co.
Xxxxxx Xxxxxxx GmBH
Xxxxxx Xxxxxxx Finland OY
PENWEST Foreign Sales Corporation
-33-
42
EXHIBIT 1.1, CONTINUED
TIMERx Technologies Affiliates
Xxxxxxx Pharma Affiliates
Xxxxxxx Pharma Affiliates:
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43
CONFIDENTIAL MATERIAL OMITTED AND FILED SEPARATELY WITH
THE SECURITIES AND EXCHANGE COMMISSION.
ASTERISKS DENOTE SUCH OMISSIONS.
EXHIBIT 1.14
Pilot Biostudies
1. The Clinical Research Organization that we will work with for the Pilot
Biostudies is *********************************************.
2. The Pilot Biostudies will be based on two studies wherein the first study is
a ******************************************************************************
********************************. The second study is a ***********************
*******************************************************************************.
These two studies can be done simultaneously and ****************************
**********************************************.
3. We will evaluate the PK data (see #2 above) prior to starting formulation
work at Central.
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44
EXHIBIT 1.24
TIMERx Technologies Patents
UNITED STATES:
1) U.S. Patent No. 4,994,276, entitled "Directly Compressible Slow Release
Granulation," issued February 19, 1991.
2) U.S. Patent No. 5,128,143, entitled "Sustained Release Excipient and Tablet
Formulation," issued July 7, 1992.
3) U.S. Patent No. 5,135,757, entitled "Compressible Sustained Release Dosage
Forms," issued August 4, 1992.
4) U.S. Patent No. 5,455,046, entitled "Sustained Release Hetero-Disperse
Hydrogel Systems for Insoluble Drugs," issued October 3, 1995.
CANADA:
5) Canadian Patent Application No. 611,700, filed September 18, 1989
(corresponding to items 1), 2) and 3) above).
6) Canadian Patent Application Number 2131647, filed September 8, 1994,
corresponding to item 4) above.
MEXICO:
7) Mexican Patent Application Number 94-6885, filed September 8, 1994,
corresponding to item 4) above.
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