COPROMOTION AGREEMENT

 

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                                                                   EXHIBIT 10.1

 

Dated March 23, 2005

 

 

 

 

 

 

                          FERRING PHARMACEUTICALS INC.

 

                                       and

 

                          SAVIENT PHARMACEUTICALS, INC.

 

 

 

 

 

 

 

 

 

                              COPROMOTION AGREEMENT

 

 

 

 

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                                      INDEX

 

 

 

1. DEFINITIONS

 

2. LIAISON TEAM

 

3. SAVIENT SALES FORCE

 

4. SAVIENT'S FINANCIAL COMMITMENT

 

5. AUDITS AND INSPECTIONS

 

6. FERRING'S OBLIGATION

 

7. PHARMACOVIGILANCE AND REGULATORY AFFAIRS

 

8. CONFIDENTIALITY

 

9. REVENUE SHARE

 

10. PAYMENT TERMS

 

11. JOINT INVENTIONS AND DISCOVERIES; COPYRIGHT MATERIAL

 

12. INTELLECTUAL PROPERTY AND INFRINGEMENT

 

13. TRADEMARKS

 

14. TERM AND TERMINATION

 

15. INDEMNIFICATIONS

 

16. ASSIGNMENT

 

17. INDEPENDENT CONTRACTOR

 

18. NOTICES

 

19. ENTIRE AGREEMENT

 

20. SEVERABILITY

 

21. REGISTRATIONS

 

22. GOVERNING LAW AND DISPUTE RESOLUTION

 

23. EXECUTION IN COUNTERPARTS

 

 

 

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This agreement (hereinafter "Agreement") is made as of the 23rd day of March,

2005

 

BETWEEN

 

(1)       Ferring Pharmaceuticals Inc., having its registered office at 400 Rella

         Boulevard, Suite 300, Suffern, NY 10901 USA (hereinafter "Ferring")

 

AND

 

(2)       Savient Pharmaceuticals, Inc., a company duly organised under the laws

         of Delaware and having its registered office at One Tower Center, 14th

         floor, East Brunswick, NJ 08816, USA (hereinafter "Savient")

 

WITNESSES THAT

 

WHEREAS:

 

(A)       Ferring has acquired the rights to market and sell the Product in the

         Territory

 

(B)       Savient is prepared, at its own expense, to undertake certain

         co-promotional activities with a view to a future share in the

         commercial returns of the said Product.

 

NOW THEREFORE, in consideration of the covenants and obligations expressed below

and intending to be legally bound.

 

THE PARTIES HEREBY AGREE AS FOLLOWS:

 

1.        DEFINITIONS

 

1.01      ADVERSE EVENT

 

         Any untoward medical occurrence in a patient or clinical investigation

         subject administered a pharmaceutical product and which does not

         necessarily have to have a causal relationship with this treatment.

 

1.02      AFFILIATE

 

         Any corporation, firm or other entity whether de jure or de facto which

         directly or indirectly owns, is owned by or is under common control

         with a party to this Agreement to the extent of at least 50% of the

         equity (or such less a percentage which is the maximum allowed to be

         owned by a foreign corporation in a particular jurisdiction) having the

         right to vote on or direct the affairs of the entity.

 

1.03      CONFIDENTIAL INFORMATION

 

         Any and all information regarding a party's technology, products,

         business information or objectives disclosed to the other party in

         connection with the performance of this Agreement. Notwithstanding the

         foregoing, Confidential Information shall not include information that:

 

 

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         (a)       was known or used by the receiving party or its Affiliates

                  prior to its date of disclosure to the receiving party as

                  demonstrated by contemporaneous written records (not including

                  information relating to the Product or the business sold by

                  Savient to Ferring and/or its Affiliates that was known or

                  used by Savient at the time of such sale);

 

         (b)       either before or after the date of the disclosure to the

                  receiving party is lawfully disclosed to the receiving party

                  or its Affiliates by sources other than the disclosing party

                  rightfully in possession of such information and not bound by

                  confidentiality obligations to the disclosing party, provided

                  that, with respect to such information disclosed to Savient,

                  such disclosure occurs after the sale to Ferring and/or its

                  Affiliates of the Product or business sold by Savient to

                  Ferring and/or its Affiliates;

 

         (c)       is independently developed by or for the receiving party or

                  its Affiliates without reference to or reliance upon the

                  Confidential Information of the disclosing party as

                  demonstrated by contemporaneous written records (not including

                  information relating to the Product or the business sold by

                  Savient to Ferring and/or its Affiliates that was known or

                  used by Savient at the time of such sale); or

 

         (d)       either before or after the date of the disclosure to the

                  receiving party or its Affiliates is or becomes published or

                  otherwise is or becomes part of the public domain without any

                  breach of this Agreement on the part of the receiving party or

                  its Affiliates.

 

1.04      EFFECTIVE DATE

 

         The Closing Date, as defined in the Share Purchase Agreement of even

         date herewith, between Savient and Ferring B.V., a Dutch corporation.

 

1.05      LAUNCH DATE

 

         With respect to any Product and to any country the date on which such

         Product was made available to the medical community other than by way

         of participation in a clinical trial.

 

1.06      LIAISON TEAM

 

         Savient and Ferring marketing and sales staff and other appropriate

         personnel assembled in accordance with Clause 2.01.

 

1.07      LICENSE INCOME

 

 

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         All amounts received by Ferring and/or its Affiliates from third

         parties in connection with or related to the licensing to such third

         parties of marketing or sales rights to the Product, including without

         limitation (a) all fees, milestone payments and royalties, (b) transfer

         pricing amounts paid in respect of Products supplied to such third

         parties, (c) investments in securities and (d) research and development

         funding, but (notwithstanding the foregoing) excluding:

 

         (i)       transfer pricing amounts equal to Ferring's and/or its

                  Affiliates' actual costs in respect of Products supplied to

                  such third parties,

 

         (ii)      amounts received by Ferring and/or its Affiliates from such

                  third parties as the purchase price for Ferring's and/or its

                  Affiliates' debt or equity securities at prices not in excess

                  of the then-current market price of such securities or, if

                  such securities are not publicly traded, the then-current fair

                  market value of such securities, and

 

         (iii)     amounts received by Ferring and/or its Affiliates for future

                  research and development activities undertaken for, or in

                  collaboration with, such third parties at rates not to exceed

                  the fair market value of such services.

 

         If non-monetary consideration is received from third parties by Ferring

         and/or its Affiliates, then a commercially reasonable monetary value

         will be assigned for purposes of calculating License Income.

 

1.08      NET SALES

 

         (a)       The worldwide gross invoiced sales of the Product by Ferring,

                  its Affiliates and its licensees to unrelated third party

                  customers, to any national or local governments, hospitals,

                  drug wholesalers, pharmacies, and other third party customers

                  (such as distributors, agents or surgicenters and other

                  institutions, the primary business of which is providing

                  medical care), less the following deductions ("Deductions"):

                  (i) direct or indirect credits and allowances or adjustments

                  (consistent with United States generally accepted accounting

                  principles, to the extent applicable) granted to such

                  customers on account of price adjustments, government or other

                  rebates (e.g. Medicare or Medicaid rebates), rejections,

                  recalls or returns in respect of the Product previously sold;

                  (ii) any trade and cash discounts (including any discounts for

                  prompt payment), rebates, and charge-backs granted to

                  customers in the case of sales by drug wholesalers where there

                  are no direct shipments by Ferring, and its Affiliates, to

                  such customers, and administrative fees paid during the

                  relevant time period to group purchasing organisations or to

                  third parties such as pharmaceutical benefit management

                  companies who are not customers but who are involved in the

                  acquisition dispensing, utulization or management of

                  prescriptions, in each case pursuant to this clause (ii) to

                  the extent and only to the extent such amounts relate to, and

                  only to, specific sales of the Product; (iii) bad debt amounts

                  included in Net Sales in prior periods that have remained

                  uncollected for more than one hundred eighty (180) days

                  (provided that if such bad debt amounts are subsequently

                  collected, such amounts will be included in Net Sales in the

                  period in which they are collected) and (iv) any sales or

                  other like taxes imposed upon the sale of the Product to the

                   extent included in the gross sales price (e.g. Value Added

                  Tax), but excluding any taxes on Ferring's or its Affiliates'

                  or licensees' income. In the event that Ferring or its

                  Affiliates obtain marketing authorisation for any Product

                  other than the Product authorised for sale in the USA under

                  the tradename NUFLEXXA as of the Effective Date, the parties

                  shall in good faith negotiate an adjustment to the calculation

                  of Net Sales for such new Product that excludes any

                  incremental portion of the sales price of the new Product

                  fairly attributable to value-adding component(s) or additional

                   cost of goods such as in relation to a premium delivery

                  device.

 

 

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1.09      PRODUCT

 

         The injectable product containing 1% sodium hyaluronate authorised for

         sale in the USA under the tradename NUFLEXXA and as may be approved for

         sale in any other country of the world under that or any other

         tradename, on application by Ferring, an Affiliate of Ferring or a

         third party so authorised to make such application by Ferring or an

         Affiliate of Ferring, as well as any new formulations, dosage

         strengths, combination products based on such product, and products

         sold in combination with premium delivery devices.

 

1.10      REASONABLE COMMERCIAL EFFORTS

 

         Such commercial efforts as are consistent with the commercial efforts

         generally applied to products of similar potential at similar stages in

         their life cycles by pharmaceutical companies of a similar size to the

         Ferring affiliate having management responsibility for the particular

         country under consideration.

 

1.11      SERIOUS ADVERSE EVENT

 

         A Serious Adverse Event is an Adverse Event that fulfils one or more of

         the following criteria: o fatal o immediately life threatening o

         results in persistent or significant disability/incapacity o results in

         in-patient hospitalisation or prolongs an existing hospitalisation o

         congenital abnormality/birth defect o cancer o manifested signs and

         symptoms caused by overdose

 

1.12      TERRITORY

 

         United States of America, its territories and dependents.

 

 

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1.13      THRESHOLD

 

 

         The worldwide Net Sales in United States Dollars which must be exceeded

         in any particular year for any revenue share to be due to Savient,

         being in 2006 USD 20 million, in 2007 USD 30 million and in 2008 USD 40

         million.

 

2.        LIAISON TEAM

 

2.01      The parties will each promptly after the date hereof appoint three

         members of staff to a Liaison Team. The Liaison Team shall meet as

         required at the reasonable request of either party until termination of

         this Agreement but in any case at least twice per year. It is the

         intention of the parties that the Liaison Team establish the mode,

         method and frequency of communications between the parties with respect

         to the activities under this Agreement. The parties will endeavour to

         maintain continuity in the staffing of the Liaison Team; however, the

         choice of members shall be a matter for the sole discretion of the

         appointing party. The Liaison Team will be chaired by a member of

         Ferring's staff, who shall have a casting vote in the event of any tied

         vote. In the event of a decision being made by a casting vote, any

         member of the Liaison Team may request that the decision be reviewed by

         the senior management of both parties before such decision is given

         effect. This Agreement may only be modified in accordance with Clause

         19.01 and not by the decision of the Liaison Team or the exercise of a

         casting vote.

 

2.02       The Liaison Team will manage and allocate resources for the creation

         and implementation of all promotional and educational programmes for

         the Product in the Territory including all aspects of design and

         implementation of such programmes and including spending for

         advertising, promotion, medical education, sales forces, Product

         samples and related matters. Such promotional and educational

         programmes shall be updated annually and provided to the senior

          management of each party for review. In managing and allocating

         resources for such programmes, the Liaison Team shall be guided by the

         principle that Reasonable Commercial Efforts are to be made to maximize

         the sales of the Product in the Territory.

 

3         SAVIENT SALES FORCE

 

3.01      Subject to the terms and conditions of this Agreement, Ferring hereby

         grants Savient the right to promote the Product in the Territory.

 

         Savient will establish a dedicated rheumatology sales force, which

         shall include a sufficient number of sales representatives to perform

         the call plan for such sales force established in accordance with

         Clause 2.02; provided that such obligations shall in no event require

         Savient to expend more financial resources in any given year than its

         financial commitment for such year pursuant to Clause 4. This sales

         force will promote the Product primarily to rheumatologist physicians

         treating osteoarthritis of the knee in the Territory. Savient shall be

         permitted to utilise the sales force to promote other products;

         provided that the Product shall in such cases be promoted in the

         primary promotion position and the Product must continue to be detailed

         with the agreed upon call reach and frequency as directed by the

         Liaison Team. Savient shall ensure that no products manufactured by any

         other person, firm or company which compete directly with the Product

         are included in any detail in which the Product is included.

 

 

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3.02      The sale representatives utilised by Savient will in each case be

         employees or agents of Savient and Savient shall manage all obligations

         in respect of their employment, including without prejudice to the

         foregoing generality, their salary, bonuses and other benefits, social

         security obligations, accommodation and subsistance. Notwithstanding

         the foregoing, any bonus plan shall be reasonably designed, consistent

         with industry norms, to incentivize Savient's sales representatives to

         promote the Product. Savient shall ensure that its staff engaged in

         carrying out any activities hereunder work at all times in full

         compliance with all applicable laws, regulations and codes of ethical

         conduct including the Prescription Drug Marketing Act of 1987. Savient

         shall be responsible for all disciplinary matters relating to its sales

         representatives; however, Savient shall give reasonable consideration

         to any request by Ferring that Savient replace any sales represenative

         whom Ferring believes is underperforming or who fails to promote the

         Product in a professional and competent manner.

 

3.03      Savient shall ensure that its staff has an adequate level of training

         and knowledge of the Product, and company strategy to carry out its

          obligations hereunder and shall provide such specific training for the

         disease area and Product as the Liaison Team shall direct.

 

3.04      Savient will cooperate with respect to any training meetings, fairs and

         exhibitions approved by the Liaison Team and shall ensure that its

         sales force use only marketing material developed and expressly

         approved by Ferring and shall make no claims for the Product beyond

         those contained in the marketing authorisation and expressly approved

         by Ferring. During the term of this Agreement Savient shall furnish

         Ferring with those periodic forecasts reports and work plans as may be

         agreed by the Liaison Team from time to time.

 

3.05      During the term of this Agreement and for a period of one (1) year

         thereafter, neither party shall solicit sales representatives employed

         or otherwise engaged by the other party for activities under this

         Agreement to seek employment or other engagement with such first party;

         however, neither party shall be prohibited from engaging any sales

         representatives of the other party who independently seek employment

         with such first party or who respond to a public advertisement placed

         by such first party.

 

3.06      Savient shall be responsible for sample accountability for its sales

         representatives, who shall provide samples to physicians as directed by

         the annual marketing plan agreed by the Liaison Team.

 

3.07      All documents, data and other records obtained by Savient from Ferring

         as a result of the Agreement, including any promotional or training

         materials, will be and remain the property of Ferring. Such documents,

         data and other records shall be kept safely and securely and, with the

         exception of those distributed or otherwise used up in the course of

         Savient's performance hereunder, shall be promptly returned to Ferring

         together with all remaining samples upon expiry or termination of the

         Agreement.

 

 

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4         SAVIENT'S FINANCIAL COMMITMENT

 

         Savient hereby commits to an expenditure of USD 20 million during the

         period between the Effective Date and December 31, 2006 (which

         expenditures during such period shall be allocated by the Liaison Team

         with the intent of applying such expenditures to the effective

         promotion of the Product) and USD 10 million per year during the

         remainder of the term of this Agreement. This shall include the cost of

         creating and maintaining the sales force detailed above in Section 3

         and Savient's reasonable and documented internal costs reasonably

         allocated to Savient's performance of obligations hereunder, with any

         sales force costs pro rated for any additional products the Savient

         sales force may promote. To the extent that Savient spends less than

         its expenditure commitment (as described above in this Clause 4) in any

         period, Savient shall contribute the balance of such expenditure

         commitment towards the advertising, promotion and medical education

         spend for the Product in the Territory as directed by the Liaison Team.

         In exceptional circumstances the Liaison Team may agree that a spending

         commitment for one period may be carried forward into the following

         period. Notwithstanding the foregoing, if the Effective Date of this

         Agreement occurs after July 31, 2005, the Liaison Team will discuss and

         agree upon changes, if any, to the timing (but not the amounts) of

         Savient's financial commitments under this Section 4 required based on

         any resulting delay in the commencement of activities under this

         Agreement.

 

5.        AUDITS AND INSPECTIONS:

 

         Ferring or its agents shall be entitled during the term of this

         Agreement and for six months thereafter in its absolute discretion to

         audit or inspect, not more than once per calendar year, the conduct by

         Savient of any work undertaken hereunder and Savient's associated

         expenditure. Such audits and inspections shall take such form as

          Ferring may reasonably think fit and shall include without prejudice to

         the foregoing generality the right to inspect any facility being used

         by Savient or any subcontractor in relation to such work and to examine

         and make copies of any procedures and records both commercial and

         financial, relating to the work, always provided that such audits and

         inspections are not incompatible with local laws, that such audits and

         inspections do not cause unreasonable disruption to the operations of

         Savient and that such audits and inspections are undertaken during

         normal working hours. Ferring shall give not less than 5 days prior

         notice to Savient of its intention to audit or inspect as aforesaid. No

         such auditing or inspecting by Ferring shall relieve Savient of any of

         its obligations hereunder.

 

 

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         With respect to audits or inspections required by third parties, such

         as regulatory or governmental authorities, the parties agree to give

         each other such notice as is reasonably practicable of any such audit

         or inspection of which they become aware and shall grant the other such

         access to data, personnel or facilities as may be reasonably necessary

         to comply with such audit or inspection. Savient will advise Ferring

         promptly of any adverse action by regulatory authorities in relation to

         its sales and marketing activities, whether or not the relevant action

         is in relation to the work hereunder. The rights of access and

         information granted under this Clause 5 shall be without prejudice to

         the obligations of confidentiality and rights of ownership contained

         elsewhere in the Agreement.

 

         In addition, Ferring shall have the right to monitor the performance

         and activities of the Savient sales force in accordance with a plan

         approved by the Liaison Team.

 

 

6.        FERRING'S OBLIGATIONS

 

6.01      Ferring will commit to a spending level during the term of the

         Agreement sufficient to support the sales and marketing effort

         necessary to ensure that Reasonable Commercial Efforts are utilised to

         maximise sales of the Product in the Territory taking into account the

         efforts of Savient's sale force under Clause 3 above and Savient's

         financial commitment under Clause 4 above. Outside the Territory

         Ferring will ensure that its Affiliates are offered the Product for

         each of the countries in which they are active and will launch the

         Product themselves or license the rights to third party to launch the

         Product if it is commercially reasonable to do so however the decision

         as to whether or not a such launch or outlicensing is commercially

         reasonable shall be in the sole discretion of the Affiliate concerned

         as shall any decisions relating to any subsequent marketing or

         promotion of the Product in any such countries outside the Territory.

 

6.02      Within the Territory Ferring will primarily promote the Product to

         orthopaedic surgeons and high prescribing physicians treating

         osteoarthritis of the knee.

 

7.        PHARMACOVIGILANCE AND REGULATORY AFFAIRS

 

7.01      During the term of this Agreement, Ferring shall be responsible for

         reporting Adverse Events with respect to the Product to the appropriate

         regulatory authorities in accordance with the laws and regulations of

         the relevant countries and authorities; however, in the event that

         Savient becomes aware of an Adverse Event or Serious Adverse Event it

         shall report such information to Ferring's Director of Regulatory

         Affairs as follows:

 

         1.        Fatal unexpected Adverse Events by telephone or facsimile

                  within one (1) working day of receipt.

 

         2.        All other Serious Adverse Events in writing within five (5)

                  working days of receipt.

 

 

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         3         A summary of all Adverse Events, including Serious Adverse

                  Events in writing on a monthly basis and giving as far as

                   reasonably possible a considered interpretation of all such

                  events, and indicating those cases which have previously been

                  reported to Ferring. Further information received on any

                  Serious Adverse Event (or any information which changes an

                  Adverse Event from an Adverse Event to a Serious Adverse

                  Event) will also be reported to Ferring within one (1) or five

                  (5) working days of receipt, according to the above criteria.

 

         Savient's sales representatives shall provide to the physicians they

         call upon the telephone number to Ferring's Adverse Event reporting

         line (such telephone number to be provided to Savient by Ferring) to

         which all Adverse Event reports are to be made. Ferring shall provide

         to Savient a bi-monthly summary of Adverse Events reported to Ferring

         as well as a copy of each annual safety report that Ferring submits to

          the FDA.

 

7.02      Fe