EXHIBIT 10.45
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION PURSUANT TO RULE 24b-2 OF THE SECURITIES AND EXCHANGE ACT
OF 1934, AS AMENDED.
AMENDED AND RESTATED
COPROMOTION AGREEMENT
This Amended and Restated Agreement (this "Agreement") made this 12th day
of September, 1997 by and between Roche Laboratories Inc., a New Jersey
corporation having its principal place of business at 000 Xxxxxxxxx Xxxxxx,
Xxxxxx, Xxx Xxxxxx 00000 (hereinafter referred to as "ROCHE") and Gilead
Sciences Inc., a Delaware corporation having a principal place of business at
000 Xxxxxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxxxx 00000 (hereinafter referred to as
"GILEAD"), amends and restates in its entirety the Copromotion Agreement
between the parties dated September 27, 1996.
WITNESSETH
WHEREAS, Genentech, Inc. ("GENENTECH") is presently marketing the
product Roferon-Registered Trademark--A (Interferon alfa-2a, recombinant) for
certain cancer indications and ROCHE and GILEAD are copromoting this product
for treating hepatitis C; and
WHEREAS, ROCHE and GILEAD wish to continue their copromotion arrangement
but amend certain terms of this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants
contained herein, ROCHE and GILEAD hereby agree as follows:
ARTICLE 1-DEFINITIONS
1.01 In the terms defined herein, the singular shall include the plural and
vice versa.
1.02 The effective date of this Agreement shall be September 27, 1996.
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1.03 The term "Call" shall mean a visit by a professional sales
representative to a physician licensed to prescribe, dispense or
administer legend drugs, which visit is for the purpose of making a
Primary Presentation on the Product and involving no more than two
other product presentations. Such physician shall be selected from a
target audience defined by the Committee (as hereinafter defined).
1.04 The term "Calendar Year" shall mean a one year period commencing on
January 1. For instance, the first Calendar Year shall mean the period
from January 1, 1997 to December 31, 1997. The second Calendar Year
shall mean the period from January 1, 1998 to December 31, 1998.
1.05 The term "Factory Sales" shall mean Gross Sales less the following
deductions (i) returns (including withdrawals and recalls); (ii)
chargebacks; (iii) sales and other taxes directly linked to and
included in the Gross Sales amount and (iv) invoice corrections;
provided, however, that solely for purposes of calculating the payments
due to GILEAD for sales in the first Calendar Year (1997) pursuant to
Paragraph 3.02, returns as described in clause (i) above shall not be
deducted from Gross Sales in calculating Factory Sales.
1.06 The term "Field" shall mean the treatment of hepatitis C.
1.07 The term "Gross Sales" shall mean the amount invoiced by ROCHE and its
sublicensees for sales of Product in the Territory to third parties.
1.08 The term "Net Sales" shall mean Factory Sales less the following
deductions (i) rebates (price reductions, including Medicaid and
similar types of rebates); (ii) volume (quantity) discounts and
discounts granted at the time of invoicing; and (iii) a lump sum
deduction of [ ] of Factory Sales for those
sales-related deductions which are not accounted for on a
product-by-product basis (for example, without limitation, outward
freight, transportation insurance, packaging materials for dispatch of
goods, customs duties, discounts granted later than at the time of
invoicing, cash discounts and product liability insurance).
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All of the deductions from Gross Sales to Factory Sales to Net Sales
shall be allocated on a pro rata basis to Product sold for the
Hepatitis C indication and to Roferon-Registered Trademark--A
(Interferon alfa-2a, recombinant) sold for all other indications,
pursuant to the allocation methodology set forth in Paragraph 3.08;
such deductions shall not be applied differentially to Hepatitis C
sales relative to sales for other indications.
1.09 The term "Primary Presentation" shall mean a full Product presentation
during which key product attributes are verbally presented; provided,
however, that no more than one presentation in any Call shall be
considered a Primary Presentation, which shall be the presentation on
which the most time is spent during the Call.
1.10 The term "Product" shall mean Roferon-Registered Trademark--A
(Interferon alfa-2a, recombinant) for use in the Field.
1.11 The term "The Term of this Agreement" shall mean the period specified
in Paragraph 7.01.
1.12 The term "Territory" shall mean the United States and its
territories, possessions and commonwealths.
ARTICLE 2 - GRANTS AND OBLIGATIONS
2.01 ROCHE hereby grants to GILEAD during the Term of this Agreement and
under the conditions herein imposed the right to promote and detail
jointly with ROCHE the Product under the trademark "ROFERON-A" for use
in the Field in the Territory. ROCHE shall not enter into any other
copromotion or similar arrangement with a third party regarding the
Product for use in the Field in the Territory during the Term of this
Agreement. This provision shall not preclude ROCHE from using contract
personnel to detail the Product. During the term of this Agreement,
GILEAD shall not enter into any other copromotion or similar
arrangement with a third party in the Field and within the
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Territory nor shall GILEAD market any other product in the Field and
within the Territory.
2.02 Subject to the provisions of and during the Term of this Agreement,
each party shall use its best efforts consistent with accepted business
practices and legal requirements to deploy its sales force to promote
and detail the Product for use in the Field in the Territory in such
manner and with such expedition as the party itself would have adopted
in launching, promoting and detailing a major pharmaceutical Product of
its own invention. In this regard, GILEAD will provide a qualified
field sales staff for detailing and promoting the Product resulting in
at least the number of Calls required pursuant to Paragraph 2.03.
2.03 During each calendar year, GILEAD shall make at least [ ]
Calls and ROCHE shall make at least [ ] Calls. At the end of the
third quarter of each Calendar Year, ROCHE and GILEAD shall discuss the
number of calls each party is required to make in the subsequent
Calendar Year. In the event that the number of Calls which either
party is required to make changes, then the parties will agree on an
appropriate adjustment to the compensation structure provided in this
Agreement.
ARTICLE 3 - PAYMENTS
3.01 ROCHE has paid GILEAD a one time, nonrefundable fee of [ ]
as compensation for its sales efforts during calendar year 1996.
3.02 ROCHE shall pay GILEAD a royalty on Net Sales from the first Calendar
Year through the third Calendar Year according to the following three
tiers of Factory Sales. Factory Sales falling within each tier shall
first be converted to Net Sales, against which the appropriate royalty
shall be applied.
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-------------------------------------------------------------------------------
ROYALTY AS
% OF NET SALES
-------------------------------------------------------------------------------
Factory Sales from [ ] of base Factory
Sales forecast [ ]
-------------------------------------------------------------------------------
Factory Sales from [ ] of base Factory
Sales forecast [ ]
-------------------------------------------------------------------------------
Factory Sales greater than [ ] of base Factory
Sales forecast [ ]
-------------------------------------------------------------------------------
The parties have agreed to base Factory Sales forecasts for Product of
[ ] in the first Calendar Year. The base Factory Sales
forecast for the second Calendar Year for Product, shall be, at
GILEAD's option, the lesser of [ ] or the forecast which
ROCHE finalizes for use by ROCHE's field force as a target for Product
in the second Calendar Year. A base Factory Sales forecast for the
third Calendar Year shall be calculated as described in the following
sentences and equation:
At the end of the third quarter of second Calendar year, the Committee
shall determine a base Factory Sales forecast for the third Calendar
Year. In summary, the 1999 base Factory Sales forecast shall be
calculated as follows:
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[Actual Year to Date 1998 Factory Sales of Product(1)
(1,2,3Q 1998 Factory Sales of Product)
+
Estimated 4Q 1998 Factory Sales of Product
[1998 Year-to-Date Growth Rate(2) + (4Q97 Growth Rate(3)- Average of
1,2,3Q 1997 Growth Rate(4))] x (3Q98 Factory Sales of Product)]
X
0000 Xxxxxxx-X (Hepatitis) Growth
Growth rate(5) of (full year Estimated 1998 Factory Sales of Product)
over (full year 1997 Factory Sales of Product)
=
Year 3 (1999) base Factory Sales Forecast
By way of example, if in 1997 Factory Sales of Product are
[ ] then the royalty payable to GILEAD shall be calculated
as follows:
- 1997 base Factory Sales forecast = [ ]
- [ ] of 1997 base Factory Sales forecast = [ ]
- Net sales are assumed to be [ ] of Factory Sales.
----------------
(1) Factory Sales of Product: Roferon-A Hepatitis C Factory Sales calculated
by applying the Roferon-A hepatitis ratio from the Sales Tracking Study to
total Roferon-A Factory Sales.
(2) YTD Growth Rate: {[(1Q98 Factory Sales of Product-4Q97 Factory Sales of
Product)/4Q97 Factory Sales of Product] + [(2Q98 Factory Sales of Product-1Q98
Factory Sales of Product)/1Q98 Factory Sales of Product] + [(3Q98 Factory Sales
of Product -2Q98 Factory Sales of Product)/2Q98 Factory Sales of Product]}/3.
(3) 4Q97 Growth Rate: (4Q97 Factory Sales of Product-3Q97 Factory Sales of
Product)/3Q97 Factory Sales of Product.
(4) 1,2,3Q 1997 Growth Rate: {[(1Q97 Factory Sales of Product-4Q96 Factory
Sales of Product)/4Q96 Factory Sales of Product] + [(2Q97 Factory Sales of
Product-1Q97 Factory Sales of Product)/1Q97 Factory Sales of Product] + [(3Q97
Factory Sales of Product-2Q97 Factory Sales of Product)/2Q97 Factory Sales of
Product]}/3.
(5) Growth Rate: (1998 Factory Sales of Product-1997 Factory Sales of
Product)/1997 Factory Sales of Product.
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Factory Sales Net Sales Royalty Rate Royalty Due
------------- --------- ------------ -----------
[ ] [ ] [ ] [ ]
Next [ ] [ ] [ ] [ ]
Next [ ] [ ] [ ] [ ]
------------ ---------- -----------
Total [ ] [ ] [ ]
An example for the determination of the base Factory Sales forecast for
1999 is attached as Exhibit A.
3.03 ROCHE will have no liability with respect to payments due GILEAD under
Paragraph 3.02 which might have been earned on the Product by GILEAD
but were not earned, or for any damage of any nature incurred by GILEAD
in anticipation of Net Sales which might have been earned but were not
earned, if, for any reason, including the negligence (but not the
willful misconduct) of ROCHE: (a) ROCHE is unable to ship the Product
in the Territory, (b) the Product is withdrawn from the market in the
Territory, (c) sales of the Product in the Territory do not reach a
level reasonably expected by previous sales, or any level or (d) Force
Majeure as set forth in Article 8. In the event that any of the
foregoing occur, excluding (c), in such a way that the financial
assumptions underlying this Agreement are no longer valid, then the
parties will renegotiate the terms of this Agreement in good faith.
3.04 Within [ ] after the close of each [ ]
during the Term of this Agreement, ROCHE shall submit to GILEAD a
statement showing: (i) the amount of Gross Sales, Factory Sales and Net
Sales, itemizing the deductions provided for in Paragraphs 1.05 and
1.08 during such [ ]and on a cumulative basis year-to-date, and
(ii) the calculation of payments to GILEAD pursuant to Paragraph 3.02.
The calculations provided for herein shall be subject to audit pursuant
to Paragraph 4.15.
3.05 For the one year period commencing upon the expiration of this
Agreement ("Residual Year"), ROCHE shall pay GILEAD
[ ] of the total amount paid to
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GILEAD for the previous calendar year pursuant to paragraph 3.02. The
payment for the Residual Year shall be made in equal [ ]
installments within [ ] after the end of each
[ ] of the Residual Year.
3.06 Under the provisions of this Agreement, all sums due to GILEAD for
sales of the Product for use in the Field within the Territory
hereunder will be payable by ROCHE in U.S. Dollars via wire transfer
to GILEAD's account at the following address:
Xxxxx Fargo Bank, N.A.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxx Xx
XXX # 000000 000
Xxxx. # 000
Xxxx. # 4068-000769
Acct. Name: Gilead Sciences, Inc.
or any other place or bank account as GILEAD may designate to ROCHE in
writing. A copy of relevant report upon which said payment was based
will also be sent by ROCHE to GILEAD at the following address:
Gilead Sciences, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Attn: Chief Financial Officer
(000) 000-0000
3.07 Notwithstanding anything in this Agreement to the contrary, in the
event that ROCHE's actual Net Sales in the Territory are reduced, due
to credits, refunds, voluntary or government mandated recalls for any
reason at any time within six (6) months after the completion of any
Calendar Year for which Net Sales have been accrued pursuant to the
terms of this Agreement, then the Net Sales for the Calendar Year in
which such credits, refunds, recalls, etc. occur shall be reduced
accordingly and GILEAD shall return to ROCHE within sixty (60) days of
receipt of a notice from ROCHE requesting such return, any dollar
amounts which were paid to GILEAD in respect of Net Sales during
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[ ] = CONFIDENTIAL TREATMENT REQUESTED
such Calendar Year which are in excess of the dollar amounts which
would have been paid to GILEAD if the Net Sales for such period
reflected the Net Sales actually obtained by ROCHE taking into account
such credits, recalls, refunds or other deductions.
3.08 ROCHE, GENENTECH and GILEAD have agreed to an appropriate methodology
including the selection of an independent third party source to
determine total sales of the Product in the Field within the Territory
and market share relative to all interferon products sold for the
treatment of Hepatitis C. The establishment of sales and market share
data described in this Paragraph shall be at the expense of ROCHE.
3.09 If the difference between the Factory Sales of Product and the Net
Sales of Product is more than [ ] of the Gross Sales
of Product for any given quarter, then the parties will renegotiate in
good faith the terms of this Agreement.
ARTICLE 4 - COOPERATION, RIGHTS AND RESPONSIBILITIES
It is among the objectives of the parties to promote and detail the
Product for use in the Field within the Territory in the most effective
and efficient fashion. To achieve this and other objectives, the
parties agree as follows:
4.01 The parties shall each appoint an authorized representative
("Coordinator") with whom communications between the parties relating
to marketing and sales of the Product will be directed. Each party
will notify the other as to the name of the individual so appointed.
Each party may replace its Coordinator at any time, upon written notice
to the other party.
4.02 (a) The Coordinators shall establish a Committee directed by the Roche
Coordinator and consisting of an equal number of representatives of
each party which will meet at least quarterly, at mutually agreeable
times and locations, to discuss and coordinate the joint promotion and
detailing of the Product for use in the Field in the Territory and the
strategies and programs that should be developed to maximize Net Sales.
Illustratively, the Committee shall (i) coordinate the launch of the
Product for use in the Field in the
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[ ] = CONFIDENTIAL TREATMENT REQUESTED
Territory and (ii) guide all continuing joint promotion and detailing
efforts with respect to the Product for use in the Field in the
Territory. Although the parties intend to work cooperatively, ROCHE
will have authority and final responsibility for developing marketing
strategies and tactics including but not limited to detailing
strategies with respect to the Product.
(b) The Committee shall develop and formulate marketing plans for
specified periods (collectively the "Marketing Plan") which shall set
forth marketing strategies and tactics relating to the Product. ROCHE,
however, shall have the final responsibility for, and control over, the
development and content of the Marketing Plan.
(c) Efforts will be made at the sales territory level to coordinate the
Calls by the ROCHE sales force with the Calls by the GILEAD sales force
to ensure the most effective coverage of the target audiences and to
minimize non-productive efforts.
(d) A party shall have the right to comment upon and make
recommendations to the other party regarding the other party's
activities under this Agreement, which recommendations the other party
shall thoroughly evaluate and consider.
(e) Each party shall bear its own costs associated with its
participation in the Committee and its activities performed under this
Agreement.
4.03 (a) During the Term of and subject to any other provision of this
Agreement, each party will provide the other with all information
relevant to the detailing and promotion of the Product for use in the
Field within the Territory within a reasonable time after such
information becomes known to the party, provided such information is
not received from an independent third party under a secrecy
obligation. Specifically, the sales force of each party will receive
the same information at the same time with respect to the Product.
(b) During the Term of this Agreement, each party shall promptly notify
the other party of all information coming into its possession
concerning unexpected side effects, injury,
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toxicity or sensitivity reaction including unexpected incidence and
severity thereof associated with commercial or clinical uses, studies,
investigations or tests with the Product (animal or human), throughout
the world, whether or not determined to be attributable to the Product
("Adverse Reaction Reports"). In the case of Adverse Reaction Reports
within the scope of 21 CFR 314.80(c)(iii), GILEAD shall transmit such
Adverse Reaction Reports so that they are received by ROCHE within
three (3) business days after receipt by GILEAD, or such other
reporting period as may be required by law. ROCHE shall transmit
Adverse Reaction Reports to GILEAD on a periodic basis, but no less
often than once every three (3) months; provided, however, that ROCHE
shall promptly notify GILEAD of any Adverse Reaction Report requiring
the alteration of detailing activities by the GILEAD sales force. All
such communications shall be held in the strictest confidence by GILEAD
and shall be subject to the terms of Paragraph 4.14.
4.04 GILEAD warrants and represents that it will maintain records of Calls
made by its sales force and that these records will accurately
represent the number of Calls made and the relative emphasis given to
each Product during a Call. For all Calendar Years covered by this
Agreement, GILEAD shall issue reports to ROCHE within
[ ] after the end of [ ]of such Calendar
Year showing the number of Calls made to each audience and the relative
emphasis assigned to the Product in such Calls. ROCHE shall be
entitled to audit the source data and documents used to compile such
reports pursuant to the provisions of Paragraph 4.15 of this Agreement.
4.05 ROCHE retains and shall retain all proprietary rights and proprietary
interests in the Product until the point of sale and in all supporting
sales and promotional and educational material. GILEAD will not have
nor represent that it has any control or proprietary or property
interests in the Product. Nothing contained herein shall be deemed to
grant GILEAD, either expressly or implied by a license or other right
or interest in any patent, trademark, copyright or other similar
property of ROCHE except as may be necessary for GILEAD to promote and
detail the Product as provided for in this Agreement.
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4.06 (a) During the Term of this Agreement, at ROCHE's cost, ROCHE shall
create and develop all sales and promotional materials relating to the
Product for distribution for use in the Field. ROCHE shall provide
GILEAD with such materials, in amounts which are reasonable under the
terms of the Marketing Plan. Other than with the advice and consent of
ROCHE, GILEAD shall not create or develop sales, promotional or other
similar materials relating to the Product for distribution to
independent third parties.
All sales and promotion material for distributing the Product for use
in the Field which is prepared primarily through a printing technique
(except for memo pads and the like) shall be supplied by ROCHE, free of
all charge, to GILEAD.
All sales and promotional materials relating to the distribution of the
Product for use in the Field which are multi-dimensional in form,
including memo pads and the like, and materials which are prepared
primarily by techniques other than printing shall be supplied to GILEAD
by ROCHE in accordance with paragraph 4.07 of this Agreement.
(b) GILEAD shall not be required to distribute any sales and
promotional material prepared after the date of this Agreement which
(i) does not present GILEAD to the medical and paramedical communities
and to the trade as joining with ROCHE in the detailing and promotion
of the Product, (ii) does not mention the Product, or (iii) includes
reference to another ROCHE pharmaceutical in addition to the Product.
At ROCHE's request, and at GILEAD's sole option, GILEAD may distribute
sales and promotion material of the type identified in this
subparagraph (b). Should GILEAD elect to so distribute such material,
it shall be supplied to GILEAD by ROCHE free of all charge. In no event
shall ROCHE be required to distribute any material which contains a
reference (i) to GILEAD (other than in connection with the joint
detailing and promotion of the Product in accordance with this
Agreement) or (ii) any GILEAD pharmaceutical.
4.07 To achieve the objectives of this Agreement, it may be necessary to
distribute multi-dimensional sales and promotional materials, including
memo pads and the like and/or materials which are prepared primarily by
techniques other than printing (all of
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these materials being hereinafter identified as "Materials") to health
care personnel and the trade on an ongoing basis ("Program"). If in
ROCHE's sole judgment it determines that such a Program is best to
achieve these objectives, ROCHE shall provide GILEAD, free of charge,
with all of GILEAD's reasonable requirements for Materials. ROCHE shall
cause the production of all Materials and shall ship GILEAD's
requirements of Materials to such GILEAD's facilities as GILEAD may
designate, F.O.B., the ROCHE distribution site. Materials shall be
allotted on a per capita basis to the ROCHE sales force and the GILEAD
sales force as modified by the expected amount of time and effort to be
used by each sales force in detailing and promoting the Product for use
in the Field. All Materials delivered to GILEAD shall be packaged in
the same form and be of the same quality as those which ROCHE normally
distributes to health care personnel or to the trade in the Territory.
4.08 Each party shall contribute facilities, supplies, personnel (including
management and sales representatives) and other resources without
charge or expense to the other as each party, in its absolute
discretion, believes necessary for the proper performance of terms of
this Agreement, and each party shall bear its own costs incurred in the
performance of any obligations hereunder. Neither party shall have any
responsibility for the firing or compensation of the other party's
employees or for any employee benefits. No employee or representative
of a party shall have any authority to bind or obligate the other party
to this Agreement for any sum or in any manner whatsoever, or to create
or impose any contractual or other liability on the other party without
said party's authorized written approval. For all purposes, and
notwithstanding any other provision of this Agreement to the contrary,
GILEAD's legal relationship under this Agreement to ROCHE shall be that
of independent contractor.
4.09 ROCHE shall have the sole responsibility for the manufacture and
distribution of Product in the Territory. ROCHE shall also be
responsible for insuring that sufficient stock of the Product will be
available in its inventory to promptly fill orders in the Territory
from the trade except for Force Majeure as defined in Article 8.
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4.10 (a) With respect to the Product, ROCHE and GILEAD shall both employ
the Trademark "Roferon-Registered Trademark--A" on all promotional
literature relating to the Product for use in the Territory such as
detailing aids and advertising directed to the Product. All such
promotional literature shall identify the Product as being promoted by
ROCHE/GILEAD. At ROCHE's discretion, all literature which sets forth
the Product and sets forth with at least equal emphasis to the Product,
one or more other Products distributed or sold by ROCHE need not set
forth or identify the Product as being promoted by ROCHE/GILEAD but can
simply identify the Product as a ROCHE Product without the name of
GILEAD appearing on said literature.
(b) ROCHE will provide GILEAD, free of charge, with reasonable
quantities of training materials which have been created and developed
by ROCHE relating to the Product and its use in the Field. During the
term of this Agreement, GILEAD will not permit any of its sales
personnel to promote the Product unless such sales personnel have been
qualified under criteria and/or tests supplied by ROCHE, which either
will be the same as those used to qualify ROCHE sales personnel or will
be approved by ROCHE. The costs of training the GILEAD sales training
personnel incurred by GILEAD shall be borne by GILEAD.
(c) Neither party shall distribute or have distributed any such
information, except for promotional literature prepared by ROCHE under
subparagraph (a) of this paragraph, which bears the name of the other
without the prior written approval of the other, which approval shall
not be unreasonably withheld. The Product shall be represented solely
as a ROCHE Product. When packaged, the Product will bear the trademark
and label of ROCHE only. All promotional materials or other information
regarding the Product, if any, which is distributed other than to
medical or paramedical communities or trade, will not be required to
identify GILEAD's involvement in the detailing or promotion of the
Product, but may so identify said involvement if ROCHE in its sole
discretion deems it appropriate to do so.
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(d) (i) ROCHE at its option may issue press releases or other public
announcements relating to the Product or the arrangement contemplated
by this Agreement, provided however, that ROCHE shall not issue a press
release or public announcement which relates to the arrangement
contemplated by this Agreement, except for references to GILEAD and the
relationship created by this Agreement in ROCHE's annual and quarterly
reports and other SEC documents, without the prior written approval of
GILEAD, which approval shall not be unreasonably withheld.
(ii) GILEAD at its option may issue press releases or other public
announcements relating to the Product or the arrangement contemplated
by this Agreement, provided however, that GILEAD shall not issue a
press release or public announcement which relates to the arrangement
contemplated by this Agreement, except for references to ROCHE and the
relationship created by this Agreement in GILEAD's annual and quarterly
reports and other SEC documents, without the prior written approval of
ROCHE, which approval shall not be unreasonably withheld.
4.11 (a) ROCHE shall have the sole right and responsibility, and shall bear
all costs related thereto, to take such actions with respect to the
Product as would normally be done in accord with accepted business
practices and legal requirements to obtain and maintain the
authorization and/or ability to market a major pharmaceutical Product
in the Territory, including, without limitation, the following:
(1) responding to Product and medical complaints relating to the
Product. GILEAD agrees that it shall refer any such complaints
which it receives to ROCHE as soon as reasonably practicable;
(2) handling all returns of the Product. If the Product is returned to
GILEAD, it shall be shipped to ROCHE's nearest facility, with any
reasonable or authorized shipping or other documented direct cost
to be paid by ROCHE. GILEAD shall incur no liability of any nature
in the handling of such returns. GILEAD, if
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[ ] = CONFIDENTIAL TREATMENT REQUESTED
requested, shall advise the customer who made the return that the
Product has been returned to ROCHE;
(3) handling all recalls of the Product. At ROCHE's request and
GILEAD's option, GILEAD will assist ROCHE in receiving the
recalled Product and any direct documented costs incurred by
GILEAD, with respect to participating in such recall shall be
reimbursed by ROCHE;
(4) communicating with any governmental agencies and satisfying their
requirements regarding the authorization and/or continued
authorization to market the Product in commercial quantities in
the Territory;
(5) reporting Adverse Reaction Reports to U.S. regulatory authorities
as required by applicable U.S. law or regulation;
(6) handling Product distribution, inventory and receivables.
(b) Each party shall respond to medical questions or inquiries relating
to the Product directed to such party. ROCHE shall use its best efforts
to keep current the reasonably necessary information provided to GILEAD
which would enable GILEAD to respond properly and promptly to any such
questions or inquiries. All such information shall be held in the
strictest confidence by GILEAD and shall be subject to the terms of
Section 4.13 hereof except with regard to providing the proper response
to medical questions or inquiries relating to Product. GILEAD and ROCHE
shall coordinate responses to anticipated inquiries and questions.
4.l2 Notwithstanding the Marketing Plan or any other provision herein to the
contrary, ROCHE will have the sole right and responsibility for
establishing and modifying the terms and conditions with respect to the
sale of the Product, including the price at which the Product will be
sold, any discount attributable to payments on receivables,
distribution of the Product and the like.
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4.13 If, for any reason, GILEAD should receive orders for the Product,
GILEAD shall use its best efforts to forward such orders to ROCHE as
soon as practicable.
4.14 Any information provided to GILEAD by ROCHE (or by anyone who was under
a non-disclosure obligation to ROCHE) under this Agreement, except that
information:
(a) which becomes public through no fault of GILEAD; or
(b) which was known by GILEAD prior to its disclosure to GILEAD by
ROCHE; or
(c) which is lawfully obtained by GILEAD from a third party which is
independent of ROCHE and said third party is in lawful possession of
said information; or
(d) which is required to be disclosed by applicable law or regulation;
or
(e) which is intended for distribution to the trade:
shall be treated with the strictest confidence and GILEAD shall not use
any such information for any purposes other than that provided in this
Agreement.
GILEAD shall keep such information in a special file which shall be
solely under the direction and control of the GILEAD Coordinator.
GILEAD shall not distribute any such information except to its
employees who have a need to know such information. Any GILEAD employee
who receives such information shall be advised of the confidential
nature thereof and the prohibitions contained in this section. The
Coordinator will use best efforts to keep a record of those individuals
who have received copies of the information or any portions thereof,
and all copies or any portions thereof will be identified by GILEAD as
confidential. Upon termination of this Agreement, and upon the request
of ROCHE, GILEAD shall return or destroy all such information and
copies thereof in its possession, except that GILEAD may keep one copy
of such information in GILEAD's Law Department files solely for
archival purposes. Such archival copy will be
17
[ ] = CONFIDENTIAL TREATMENT REQUESTED
deemed to be the property of ROCHE, and will not be copied or
distributed in any manner without the express prior written permission
of ROCHE. The prohibitions contained herein shall survive the
termination of this Agreement and last for a period of ten (10) years
from the date of termination of this Agreement.
4.15 Each party shall keep, and shall cause its Affiliates and sublicensees
to keep, complete and accurate records pertaining to the Calls (by
GILEAD or ROCHE) or sale or other disposition of Product and of the
Royalty and other amounts payable under this Agreement in sufficient
detail to permit the other party to confirm the accuracy of all Calls
completed and payments due hereunder. At either party's request, the
other party will cause its independent certified public accountants to
prepare abstracts of its relevant business records for review by the
other party's independent certified public accountants. If, based on a
review of such abstracts, a party reasonably believes that a full audit
of said business records would be necessary for the confirmation of the
accuracy of all Calls and payments due hereunder, that party's
independent certified public accountants shall have full access to
review all work papers and supporting documents pertinent to such
abstracts, and shall have the right to discuss such documentation with
the other party's independent certified public accountants. [
] Such audit rights may be exercised
no more often than once a year, within three (3) years after the
payment period to which such records relate, upon notice to the party
being audited and during normal business hours. The party requesting
such audit will bear the full cost of such audit
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[ ] = CONFIDENTIAL TREATMENT REQUESTED
unless such audit discloses an underpayment of more than five percent
(5%) from the amount of Calls made or royalties due. The terms of
this Paragraph shall survive any termination or expiration of this
Agreement for a period of three (3) years.
4.16 Each party will utilize its own sales force to promote and detail the
Product. During the Term of this Agreement, neither party will recruit
or employ any sales representative of the other party who has been
involved in promotion of the Product in the Territory. In addition,
neither party will recruit any sales representative of the other party
without prior consultation with the other party.
ARTICLE 5 - WARRANTIES AND INDEMNIFICATION
5.01 Each party warrants and represents to the other that it has the full
right and authority to enter into this Agreement, and that it is not
aware of any impediment that would inhibit its ability to perform its
obligations under this Agreement.
5.02 ROCHE warrants and represents that it has no knowledge of the existence
of any U.S. patent owned or controlled by anyone other than ROCHE which
would prevent ROCHE from making, using or selling the Product for use
in the Field within the Territory or would prevent GILEAD and ROCHE
from jointly promoting or detailing the Product for use in the Field
within the Territory.
5.03 ROCHE will defend, indemnify and hold harmless GILEAD and its
directors, officers, employees and agents against all losses, expenses,
claims and liabilities, known and unknown, of any kind, including all
costs and expenses relating thereto arising at any time as a result of
any assertion relating to the manufacture, handling, use or
distribution of Products by ROCHE, or their sublicensees except to the
extent that they result from acts or omissions of acts of GILEAD, its
directors, officers, employees or agents.
5.04 GILEAD will defend, indemnify and hold harmless ROCHE and its
directors, officers, employees and agents against all losses, expenses,
claims and liabilities, known and
19
[ ] = CONFIDENTIAL TREATMENT REQUESTED
unknown, of any kind, including all costs and expenses relating thereto
arising at any time as a result of any assertion relating to the
promotion of Products by GILEAD, except to the extent that they result
from acts or omissions of acts of ROCHE, its directors, officers,
employees or agents
5.05 Regarding the indemnity and hold harmless under Paragraph 5.03, GILEAD
shall give prompt written notice to ROCHE of the commencement of any
action, suit or proceeding for which indemnification may be sought, and
ROCHE shall assume the defense thereof; provided, however, that GILEAD
shall be entitled to participate in any such action, suit or proceeding
with counsel of its own choice, but at its own expense. If ROCHE fails
to assume the defense within a reasonable time, GILEAD may assume such
defense and the reasonable fees and expenses of its attorneys will be
covered by the indemnity provided for in Paragraph 5.03 above. No such
action, suit or proceeding shall be compromised or settled in any
manner which might adversely affect the interests of ROCHE without
prior written consent of ROCHE which consent shall not be unreasonably
withheld. ROCHE agrees to consult with GILEAD with respect to any
proposed compromise or settlement which would adversely affect the
interests of GILEAD.
ARTICLE 6 - PATENTS AND TRADEMARK INFRINGEMENT
GILEAD shall advise ROCHE promptly upon its becoming aware of any
infringement by a third party of a patent or trademark owned by ROCHE
and respectively covering or identifying the Product in the Territory.
If warranted in the opinion of ROCHE, ROCHE shall promptly take such
legal action as is required to restrain such infringement. GILEAD shall
cooperate fully with and as requested by ROCHE, at ROCHE's expense, in
ROCHE's attempt to restrain such infringement. GILEAD may be
represented by counsel of its own selection at its own expense in any
suit or proceeding brought to restrain such infringement but ROCHE
shall have the right to control the suit or proceeding.
20
[ ] = CONFIDENTIAL TREATMENT REQUESTED
ARTICLE 7 - TERM AND TERMINATION
7.01 The term of this Agreement shall commence on the effective date of this
Agreement and continue, unless terminated sooner in accordance with the
subsequent provisions of this Article, until December 31, 1999.
Upon termination of this Agreement for any reason or purpose, all
rights to The Product including but not limited to regulatory
submissions and trademarks become or remain the property of ROCHE.
Paragraphs 3.05, 3.06, 4.05, 4.10(d), 4.11(a), 4.14, 4.15, 5.03 and
5.04 shall survive expiration or termination of this Agreement for any
reason.
7.02 Either party may terminate this Agreement for Good Cause (as defined in
Paragraph 7.03 below), effective at any time after providing sixty (60)
days written notice and, if applicable, an opportunity to cure during
such sixty (60) day period (if such cure is effected, such notice with
respect to such Good Cause shall be null and void). If the Agreement is
so terminated by either party for Good Cause, ROCHE shall pay to GILEAD
all dollar amounts due to it under Sections 3.02 and 3.05 through the
effective date of such termination.
7.03 "Good Cause" shall include the failure of the other party to comply
with any of its material obligations contained in this Agreement
(including the failure to detail the Product).
7.04 Termination of this Agreement for Good Cause, shall be without
prejudice to (a) any remedies which any party may then or thereafter
have hereunder or at law; and (b) GILEAD's right to receive any payment
accrued under the Agreement prior to the termination date but which
became payable thereafter; and (c) either party's right to obtain
performance of any obligations provided for in this Agreement which
survive termination by their terms or by a fair interpretation of this
Agreement.
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[ ] = CONFIDENTIAL TREATMENT REQUESTED
7.05 Either party may terminate this Agreement for any reason, effective as
of January 1, 1999, by delivering written notice to the other party on
or prior to October 31, 1998.
ARTICLE 8 - FORCE MAJEURE
If either party shall be delayed, interrupted in or prevented from the
performance of any obligation hereunder by reason of an act of God,
fire, flood, earthquake, war (declared or undeclared), public disaster,
strike or labor differences, governmental enactment, rule or
regulation, or any other cause beyond such party's control, such party
shall not be liable to the other therefor; and the time for performance
of such obligation shall be extended for a period equal to the duration
of the contingency which occasioned the delay, interruption or
prevention.
Within 15 days of the beginning of the Force Majeure, the party
invoking its Force Majeure rights must, by registered letter notify the
other party of this fact. The termination of the Force Majeure must
also be notified to the other party by registered letter within 15 days
of such termination. If the Force Majeure renders either of the
required notifications impossible, notification must be given as soon
as possible.
ARTICLE 9 - MISCELLANEOUS
9.01 This Agreement supersedes all prior agreements and understandings, both
written and oral between the parties with respect to the subject matter
hereof. This Agreement cannot be amended, changed or supplemented,
except in writing signed by each of the parties hereto.
9.02 This Agreement may be executed in several counterparts, each of which
shall be deemed to be an original.
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[ ] = CONFIDENTIAL TREATMENT REQUESTED
9.03 All notices which are required or may be given pursuant to this
Agreement shall be sufficient upon receipt, if given in writing and
delivered by hand, by electronic media, or by registered or prepaid
addressed as follows:
TO GILEAD: Gilead Sciences, Inc.
000 Xxxxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
Attn: General Counsel
Phone: (000) 000-0000
Fax: (000) 000-0000
TO ROCHE: Roche Laboratories Inc.
000 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Corporate Secretary
Phone: (000) 000-0000
Fax: (000) 000-0000
The address of either party set forth above may be changed from time to
time by written notice in the manner prescribed herein from the party
requesting the change. A notice sent by ordinary mail or a notice not
given in writing shall be effective upon receipt, but only if
acknowledged in writing by a duly authorized representative of the
party to whom it was sent or given or otherwise upon clear evidence of
receipt.
9.04 None of the parties hereto may assign any part or all of this Agreement
or the benefit thereof or any right or obligation thereunder to any
other entity or individual without prior written consent of the other
party. Any purported assignment in violation of the preceding sentence
shall be void.
9.05 This Agreement shall be construed, regulated and administered and
governed in all respects under and in accordance with the law of the
State of New Jersey.
9.06 Except to the extent that a party may have otherwise agreed in
writing, no waiver by such party of any breach by any other party of
any of the other party's obligations, agreements or covenants hereunder
shall be deemed to be a waiver by such first party of
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[ ] = CONFIDENTIAL TREATMENT REQUESTED
any subsequent or other breach of the same or any other obligation,
agreement or covenant; nor shall any forbearance by a party to seek a
remedy for any breach by another be deemed a waiver by said party of
its rights or remedies with respect to such breach or of any subsequent
or other breach of the same or any other obligation, agreement or
covenant.
9.07 This Agreement shall be binding upon and inure to the benefit of the
parties to this Agreement and their respective successors.
9.08 Headings as used in this Agreement are for convenience only and are not
to be construed as having any substantive effect by way of limitation
or otherwise.
9.09 If one or more of the provisions of this Agreement shall, by any court
or under any provision of law, be found to be void or unenforceable,
the Agreement as a whole shall not be affected thereby, and the
provisions in question shall be replaced by an interpretation in
conformity with law which comes closer to effecting the parties'
original intention.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers effective as of the date first above
written.
GILEAD SCIENCES, INC. ROCHE LABORATORIES INC.
By: /s/ XXXX X. XXXXX By: /s/ XXXXXXX X. XXXXXXX
------------------------------- ------------------------------
Xxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
Title: Vice President, Chief Financial Title: Senior Vice President
------------------------------- ------------------------------
Officer and General Counsel
Date: 9/12/97 Date:
------------------------------ --------------------------------
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EXHIBIT A
Attached Example
----------------
The attached spreadsheet uses fictitious numbers to demonstrate how the
formula described in Section 3.02 of this Agreement is used. Each component
of the spreadsheet is described below, using numbers to identify the section
being referred to in the spreadsheet.
(1) Column, FACTORY SALES:
January through September 0000 Xxxxxxx-X actual factory sales.
(2) Column, HEPATITIS SHARE:
The Sales Tracking Study's 1998 first, second, and third quarterly
reports would give us the share of Hepatitis sales for each quarter.
(3) Column, FACTORY SALES (HEP):
The ratios would be applied to 1998 factory sales by quarter; i.e.
FACTORY SALES is multiplied by HEPATITIS SHARE.
(4) Column, FACTORY SALES (HEP):
This would give us January through September 1998 Roferon A
(Hepatitis) factory sales dollars.
(5) Column, QUARTERLY SALES,
Column, GROWTH:
To annualize these dollars:
(6) Column, QUARTERLY SALES,
Column, GROWTH
Row, 4Q97 Incremental Growth Rate:
The average growth rate of 1997's first, second, and third quarter
factory sales would be subtracted from 4Q97's growth.
(7) Row, YTD '98 Average Quarterly Growth Rate,
Row, Incremental + YTD '98 Growth Rate:
This incremental growth rate [ ] would be added to 1998
year-to-date average quarterly growth rate [ ]
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[ ] = CONFIDENTIAL TREATMENT REQUESTED
(8) Row, ANNUALIZED;
Column, GROWTH:
This new growth rate [ ] would be applied to 3Q98 sales [ ]
(9) Row, ANNUALIZED;
Column, QUARTERLY SALES:
This would give us a forecast for 4Q98 factory sales: [ ]
(10) Row, ANNUALIZED;
Column, FACTORY SALES (HEP):
A summation of actual 1998 and annualized quarterly factory sales will
give us total 1998 Roferon-A (Hepatitis) factory sales: [ ]
(11) Row, ANNUALIZED:
Roferon-A's growth rate would be calculated [full year 1997 factory
sales (Hep) vs. Full year 1998 factory sales (Hep)] [ ]
(12) Row, FACTORY SALES FORECAST:
Total 1998 Roferon-A (Hepatitis) factory sales would be multiplied by
Roferon-A's growth rate [ ] [full year 1997 factory sales
(Hep) vs. Full year 1998 factory sales (Hep)]. This would give us
0000 Xxxxxxx-X (Hepatitis) forecasted factory sales [ ]
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[ ] = CONFIDENTIAL TREATMENT REQUESTED
GILEAD-ROCHE FORECAST EXAMPLE
Factory Hepatitis Factory Sales Quarterly
Year Quarter Month Sales(1) Share(2) (Hep)(3),(4) Sales(4),(6) Growth(5),(6)
---- ------- ----- -------- --------- ------------- ------------ -------------
Actuals 1997 Q1 Jan-97 [ ] [ ] [ ]
Feb-97 [ ] [ ] [ ]
Mar-97 [ ] [ ] [ ] [ ] [ ]
Q2 Apr-97 [ ] [ ] [ ]
May-97 [ ] [ ] [ ]
Jun-97 [ ] [ ] [ ] [ ] [ ]
Q3 Jul-97 [ ] [ ] [ ]
Aug-97 [ ] [ ] [ ]
Sep-97 [ ] [ ] [ ] [ ] [ ]
Q4 Oct-97 [ ] [ ] [ ]
Nov-97 [ ] [ ] [ ]
Dec-97 [ ] [ ] [ ] [ ] [ ]
Total [ ]
1998 Q1 Jan-98 [ ] [ ] [ ]
Feb-98 [ ] [ ] [ ]
Mar-98 [ ] [ ] [ ] [ ] [ ]
Q2 Apr-98 [ ] [ ] [ ]
May-98 [ ] [ ] [ ]
Jun-98 [ ] [ ] [ ] [ ] [ ]
Q3 Jul-98 [ ] [ ] [ ]
Aug-98 [ ] [ ] [ ]
Sep-98 [ ] [ ] [ ] [ ] [ ]
[ ] 4Q97 Incremental Growth Rate(6)
[ ] YTD '98 Average Quarterly Growth Rate(7)
[ ] Incremental + YTD '98 Growth Rate(7)
Annualized
(8),(9) Q4 Oct-98 [ ]
Nov-98 [ ]
Dec-98 [ ] [ ] [ ]
Total [ ]
(10)
[ ] 1998 vs. 1997 Growth Rate(11)
Factory
Sales
Forecast
(12) 1999 Total [ ]
(10)
[ ] = CONFIDENTIAL TREATMENT REQUESTED
