Exhibit 10.31
AMENDMENT AGREEMENT
This Amendment Agreement ("Amendment"), effective as of this 17th day
of November, 1998, is between American Home Products Corporation, a Delaware
corporation, having a principal place of business at Five Xxxxxxx Xxxxx,
Xxxxxxx, Xxx Xxxxxx, 00000, X.X.X. acting through its Wyeth-Ayerst
Laboratories Division (hereinafter "Wyeth-Ayerst") and Cygnus, Inc.
(hereinafter "Cygnus"), a Delaware corporation, having a principal place of
business at 000 Xxxxxxxxx Xxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx, 00000, X.X.X.
WITNESSETH
WHEREAS, Wyeth-Ayerst and Cygnus have entered into a Product Development,
Supply and License Agreement for the U.S. and a Product Development, Supply
and License Agreement for territories outside the U.S. dated December 28,
1993, and a Letter Agreement dated March 7, 1996, pertaining to the 3.5 day
estrogen-only system (hereinafter collectively referred to as "the
Agreements"), for the development, license and supply of certain transdermal
systems in the field of Hormone Replacement Therapy as set forth in the
Agreements;
WHEREAS, Wyeth-Ayerst and Cygnus mutually desire to amend the Agreements in
accordance with the terms set forth herein to clarify each party's rights and
obligations.
NOW, THEREFORE, Wyeth-Ayerst and Cygnus agree as follows:
1. DEFINITIONS
1.1 Except as otherwise specifically stated herein, all capitalized
terms shall be as defined in the Agreements, as the context
requires.
1.2 "Products" as used in this Amendment, shall mean the 7-day
[Confidential Treatment Requested] matrix transdermal patch
("E(2)III") and the 3.5-day [Confidential Treatment Requested]
acetate combination matrix patch and its 3.5 day estrogen-only
matching patch (collectively "E(2)XXXX").
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1.3 "Product Assets" shall mean all U.S. New Drug Application and
Investigational New Drug Application filings, and any foreign
equivalents, relating to Products and all information, data,
submissions and approvals related thereto, as well as Market
Information. "Market Information" shall mean all market
forecasts and market summaries prepared to date by Wyeth-Ayerst
and presented to Cygnus. Cygnus shall remove all references to
Wyeth-Ayerst from such Market Information before distributing it
to any Third Party.
1.4 "Third Party(ies)" shall mean any person(s) or entity(ies) other
than Cygnus or Wyeth-Ayerst or their respective Affiliates.
"Affiliates" shall mean any company that owns or controls
directly or indirectly at least fifty percent (50%) of the voting
stock of either party or any company at least fifty percent (50%)
of whose voting stock is owned or controlled directly or
indirectly by either party. Notwithstanding the foregoing, for
purposes of this Amendment, Immunex Corporation shall not be
considered an Affiliate of Wyeth-Ayerst.
2. TERMS
2.1 The parties agree that the rights and obligations of Wyeth-Ayerst
and Cygnus as set forth in the Agreements are hereby amended as
set forth herein. The parties further agree that the terms of
the Amendment supercede the provisions of Section IX(B)(2) of the
Agreements.
2.2 Upon execution of this Amendment, Wyeth-Ayerst and Cygnus agree
that the Agreements shall be limited to the Products.
Wyeth-Ayerst agrees that upon execution of this Amendment, Cygnus
shall be free to develop, manufacture, license, and market other
transdermal systems in the field of Hormone Replacement Therapy,
either itself or in conjunction with a Third Party.
3. PARTIES' RIGHTS AND OBLIGATIONS
3.1 Upon execution of this Amendment, and for a period of six (6)
months thereafter, Wyeth-Ayerst shall continue to fully perform
its Product
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Development obligations consistent with the provisions of
Section IV of the Agreements. Within the later of either
thirty (30) calendar days after execution of this Amendment or
December 15, 1998, Wyeth-Ayerst and Cygnus project teams shall
meet and agree upon a list of Wyeth-Ayerst and Cygnus
development obligations for the next twelve (12) months. The
minutes of the last two joint team meetings and CMC meetings
shall serve as a basis for the obligations list. Wyeth-Ayerst
shall pay Cygnus for any and all remaining Product-related
inventory and the like arising out of such development
obligations.
3.2 Upon execution of this Amendment henceforth, Wyeth-Ayerst shall
have no further obligation to conduct any prelaunch and launch
activities for the Products, other than the development
obligations of Section 3.1 hereof.
3.3 At the end of the six (6) month period referred to in Section 3.1
hereof or the execution of a sublicense in accordance with the
provisions of Section 4 hereof, whichever occurs first,
Wyeth-Ayerst shall henceforth be relieved of all rights and
obligations pertaining to the marketing and sales of the Products
in all markets, except for the specific rights provided for in
Section 7.1 hereof.
3.4 For a period of six (6) months less fifteen (15) calendar days
after execution of this Amendment, Wyeth-Ayerst shall have the
sole option to reacquire its rights and obligations under the
Agreements, as superseded by this Amendment (including, but not
limited to, the transfer of Product Assets specified in Section
6.1 hereof), relating to any non-sublicensed territories.
Relevant terms of the Agreements include, but are not limited to,
Section III in the International Agreement and Section III(B),
(C), (D) and (E) in the US Agreement, as well as Cygnus' right to
copromote Products in all territories. If Wyeth-Ayerst does not
exercise its sole option by the close of business fifteen (15)
calendar days after the end of the six (6) month period after
execution of this Amendment, then the option will expire in its
entirety.
4. SUBLICENSE RIGHTS
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4.1 During the six (6) month period referred to in Section 3.1
hereof, Wyeth-Ayerst shall have the right to sublicense its
rights and obligations under the Agreements for either one or
both Products to one or more Third Parties. Wyeth-Ayerst agrees
to work with Cygnus in identifying and selecting potential
sublicensees. Any such sublicense shall be subject to the prior
written approval of Cygnus, such approval not to be unreasonably
withheld or delayed by Cygnus. Cygnus shall use reasonable
efforts to assist Wyeth-Ayerst in its sublicensing endeavors and
shall not cause unreasonable delays in such endeavors. If the
parties cannot agree regarding any aspect covered by this Section
4.1 or Section 3.1 hereof, then, and for one time only and for a
period not to exceed fourteen (14) days, the area of disagreement
shall be referred to the President/Chief Executive Officer of
Cygnus and the Senior Vice President, Global Business Development
of Wyeth-Ayerst for resolution. During this period not to exceed
fourteen (14) days, the time periods specified in this Amendment
shall be held in abeyance.
4.2 The parties agree that the terms of any such sublicense shall
specify that the sublicensee shall give Cygnus the option to
co-promote the Products. The terms of such option shall be
negotiated directly by Cygnus and said sublicensee.
4.3 If, at the conclusion of the six (6) month period referred to in
Section 3.1 hereof, Wyeth-Ayerst is unable to execute a
sublicense for either one or both Products, then Wyeth-Ayerst
shall be obligated to continue to perform its Product Development
activities under the provisions of Section IV of the Agreements
for each Product which is not sublicensed for an additional six
(6) month period to begin immediately following the six (6) month
period referred to in Section 3.1 hereof. At the end of this
additional six (6) month period, Wyeth-Ayerst's rights and
obligations under the Agreements shall be satisfied and the
Agreements shall be terminated in their entireties, with the
exception of those rights specifically provided for in Section
7.1 hereof.
5. DELAY OF PAYMENT
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5.1 Cygnus agrees that Wyeth-Ayerst shall be allowed to delay the
payment of any and all relevant regulatory filing milestones for
the E(2)III product under the provisions of Section III (B) of
the Agreements until the end of the six (6) month period referred
to in Section 3.1 hereof or the execution of a sublicense for one
or both Products for the Territory where the milestone in
question applies, whichever occurs first.
6. OWNERSHIP OF PRODUCT ASSETS
6.1 Upon the execution of this Amendment, the Product Assets,
including the regulatory filings for the Products, if any, as
well as any corresponding foreign equivalents thereof, shall
become the sole property of Cygnus. Wyeth-Ayerst agrees to make
commercially reasonable efforts to transfer all rights in said
materials to Cygnus, at no cost to Cygnus, no later than the end
of the six (6) month period referred to in Section 3.1 hereof.
This transfer shall occur at a time and in a manner to be agreed
upon by the parties. Wyeth-Ayerst shall be allowed to retain one
(1) copy of Product Assets in a secure location for purposes of
internal research. Wyeth-Ayerst's use of Product Assets shall be
solely for internal research purposes, which internal research
purposes shall not include the development of Products or any
public disclosure of the Product Assets.
7. NEW ROYALTY AGREEMENT
7.1 In the event that the Agreements are terminated pursuant to the
last sentence of Section 4.3 hereof, in consideration for
Wyeth-Ayerst's development costs to date, Cygnus agrees to pay
Wyeth-Ayerst a royalty of [Confidential Treatment Requested] on
annual Net Sales of Products by Cygnus or its licensee(s) or
sublicensee(s) for a period ending [Confidential Treatment
Requested] from the date of first commercial shipment of Products
by Cygnus or its licensee(s) or sublicensee(s) in the Territory
on a Product by Product and country by country basis. In the
event that Cygnus becomes obligated to make such royalty
payments, the parties agree to execute a new Royalty Agreement
reflecting the royalty above and duplicating the provisions of
the Agreements relating to
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Payment Terms (Section III(D)) and Records and Audit Rights
(Section III(E)) as applied to Cygnus.
8. SURVIVAL
8.1 The parties agree that the following Sections shall be considered
to survive termination of the Agreements: IV(C) (penultimate
sentence of the first paragraph), VII, VIII, X, XI (first
paragraph only) and XII.
IN WITNESS WHEREOF, the parties have executed this Amendment Agreement
as of the date and year first written above.
AMERICAN HOME PRODUCTS CORPORATION,
acting through its Wyeth-Ayerst Laboratories Division:
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
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Title: Vice President, AHPC
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Date: November 17, 1998
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CYGNUS, INC.:
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
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Title: President, Drug Delivery
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Date: November 12, 1998
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