<PAGE>
EXHIBIT 10.1
WHENEVER
CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE
DENOTED BY AN ASTERISK *), SUCH CONFIDENTIAL INFORMATION HAS
BEEN
SUBMITTED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.
LICENSE AND COLLABORATION AGREEMENT
BETWEEN
ALKERMES, INC.
AND
CEPHALON, INC.
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS......................................................
1
ARTICLE 2 MANAGEMENT OF THE
COLLABORATION.................................. 2
2.1 Joint Steering
Committee........................................ 2
2.2 Modifications to
Agreement after Sharing of Distributable Loss
and Distributable Profit Converts to a Royalty-Based
Arrangement..................................................
17
ARTICLE 3
DEVELOPMENT......................................................
18
3.1 Development
Team................................................ 18
3.2 Accounting and
Financial Reporting for DT and CT................ 20
3.3 Development
Efforts............................................. 21
3.4 Development
Responsibilities.................................... 21
3.5
Pharmacovigilence and Adverse Event Reporting...................
24
3.6 Development
Costs............................................... 24
3.7 Development Plan
Budget......................................... 24
3.8 Limitation on
Development Team Decision Making.................. 25
ARTICLE 4
COMMERCIALIZATION................................................
25
4.1
Commercialization Efforts.......................................
25
4.2
Commercialization Team..........................................
26
4.3 Contents of
Commercialization Plan.............................. 28
4.4 Compliance with
Law............................................. 29
4.5 Corporate Name
and Logo......................................... 30
4.6 Sales and
Distribution.......................................... 30
4.7
Commercialization Costs.........................................
30
4.8
Commercialization Plan Budget...................................
30
4.9 Product Label
and Packaging..................................... 31
4.10 Promotional
Materials........................................... 31
4.11 Sales
Force.....................................................
32
4.12 Training
Materials..............................................
34
4.13
Samples.........................................................
35
4.14 Medical
Inquiries...............................................
35
4.15 Limitation on
Commercialization Team Decision Making............ 35
ARTICLE 5 MANUFACTURE AND
SUPPLY........................................... 36
5.1 Supply
Agreement................................................
36
5.2 Supply
Team.....................................................
36
5.3 Supply
Costs....................................................
36
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ARTICLE 6 LICENSE GRANTS AND
ASSIGNMENTS................................... 36
6.1 Patent and
Know-How License Grant............................... 36
6.2 Alkermes Patents
Update......................................... 37
6.3 Trademark
Assignment............................................ 37
6.4 Trademark
License............................................... 37
6.5 Corporate Name
and Logo......................................... 38
6.6 ROW
Territory...................................................
38
6.7 Termination of
License to Contested Patent Rights............... 39
ARTICLE 7 INTELLECTUAL PROPERTY
RIGHTS..................................... 39
7.1 Ownership of
Intellectual Property.............................. 39
7.2 Disclosure of
Patentable Inventions............................. 40
7.3 Patent
Committee................................................
40
7.4 Patent
Filings..................................................
41
7.5 Defense and
Enforcement Rights.................................. 43
7.6 Infringement
Defense............................................ 45
7.7 Third-Party
Patent Licenses..................................... 46
7.8 Patent
Marking..................................................
46
7.9 Trademark
Maintenance........................................... 46
7.10 Trademark
Infringement.......................................... 47
ARTICLE 8
CONFIDENTIALITY..................................................
47
8.1
Confidentiality.................................................
47
8.2 Authorized Use
and Disclosure................................... 48
8.3
Survival........................................................
49
8.4
Publications....................................................
49
ARTICLE 9 UP-FRONT PAYMENT, MILESTONE
PAYMENTS
AND PROFIT
SPLIT.....................................................
50
9.1 Up-front
Payment................................................
50
9.2 Milestone
Payments.............................................. 51
9.3 Profit
Sharing..................................................
51
9.4 Reporting Net
Sales and Shared Expenses......................... 51
9.5 Financial
Reconciliation........................................ 52
9.6 Generic
Product.................................................
53
9.7 Records and
Reporting; Audits................................... 54
9.8 Manner of
Payment............................................... 55
9.9 Interest on Late
Payments....................................... 55
9.10
Taxes...........................................................
55
9.11
[**]............................................................
56
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ARTICLE 10 REPRESENTATIONS AND
WARRANTIES.................................. 59
10.1
Disclaimer......................................................
59
10.2 Mutual Representations
and Warranties........................... 59
10.3 Alkermes
Representations and Warranties.........................
59
10.4 No Guaranty of
Development or Commercialization Success......... 61
ARTICLE 11
LIABILITY.......................................................
61
11.1 Limitation of
Liability......................................... 61
11.2 Cephalon
Indemnification........................................
61
11.3 Alkermes
Indemnification........................................
62
11.4
Insurance.......................................................
64
ARTICLE 12 DISPUTE
RESOLUTION..............................................
65
12.1
Disputes........................................................
65
12.2 Reserved
Disputes...............................................
66
12.3
Arbitration.....................................................
67
12.4
Jurisdiction....................................................
67
12.5 Determination of
Disputes Relating to Patents
and Other Intellectual Property..............................
67
ARTICLE 13 TERM AND
TERMINATION............................................
68
13.1
Term............................................................
68
13.2 Right to Terminate for
Breach................................... 68
13.3 Cephalon's Right to
Terminate................................... 68
13.4 Alkermes' Rights on
Termination................................. 69
13.5 Cephalon's Rights on
Termination................................ 70
13.6 Cephalon's Rights on
Expiration................................. 71
13.7 Right to Terminate
Upon Bankruptcy.............................. 71
13.8 Survival of Certain
Provisions.................................. 72
ARTICLE 14 GENERAL
PROVISIONS..............................................
72
14.1
Notices.........................................................
72
14.2 Governing
Law................................................... 73
14.3 Entire Agreement;
Amendment..................................... 73
14.4 Binding Effect and
Assignment................................... 73
14.5
Waiver..........................................................
73
14.6
Severability....................................................
74
14.7
Publicity.......................................................
74
14.8
Counterparts....................................................
74
14.9 Force
Majeure...................................................
74
14.10
Ambiguities.....................................................
75
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14.11
Headings........................................................
75
14.12 No
Partnership..................................................
75
14.13 Use of Names, Trade Names
and Trademarks........................ 75
14.14 Performance by an
Affiliate..................................... 75
14.15 Non-Solicitation of
Employees................................... 75
</TABLE>
Exhibit A Alkermes Patents
Exhibit B Alkermes Manufacturing
Patents
Exhibit C Vivitrex Trademark and Medisorb
Trademark
Exhibit D Development Plan for Calendar
Years 2005 and 2006
Exhibit E [**]
Exhibit F Press Release
iv
<PAGE>
WHENEVER
CONFIDENTIAL INFORMATION IS OMITTED HEREIN (SUCH OMISSIONS ARE
DENOTED BY AN ASTERISK *),
SUCH CONFIDENTIAL INFORMATION HAS BEEN SUBMITTED
SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION PURSUANT TO A REQUEST
FOR CONFIDENTIAL TREATMENT.
LICENSE AND COLLABORATION AGREEMENT
This License and
Collaboration Agreement (the "Agreement") is entered into
effective as of June 23, 2005 (the
"Effective Date") by and between Alkermes,
Inc., a Pennsylvania corporation with its
principal office at 88 Sidney Street,
Cambridge, Massachusetts 02139
("Alkermes"), and Cephalon, Inc., a Delaware
corporation with its principal office at 41
Moores Road, Frazer, Pennsylvania
19355 ("Cephalon").
RECITALS:
WHEREAS,
Alkermes is developing an injectable sustained-release
microsphere
form of the pharmaceutical compound
naltrexone for the treatment and/or
prevention of alcohol abuse/dependence or
other indications approved for
development pursuant to this Agreement;
and
WHEREAS,
Cephalon and Alkermes wish to collaborate in the development of
the Products (as defined herein) for use
and sale in the Field (as defined
herein) in the Territory (as defined
herein); and
WHEREAS,
Cephalon has experience and expertise in the commercialization
of
pharmaceutical products and will promote,
market and sell the Products in the
Field in the Territory; and
WHEREAS,
Alkermes will manufacture and supply to Cephalon the Medisorb
Product (as defined herein) pursuant to the
terms of a Supply Agreement (as
defined herein); and
WHEREAS, the
Parties intend through these various arrangements, subject to
budget constraints and other limitations
set forth herein, to maximize the
profitability of the Products in the Field
in the Territory; and
WHEREAS,
Cephalon and Alkermes therefore agree to undertake the
foregoing,
all under the terms and conditions set
forth in this Agreement and for the
consideration set forth herein.
NOW, THEREFORE,
in consideration of the premises and the mutual covenants
and agreements set forth herein, and other
good and valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged, the Parties agree as
follows:
ARTICLE 1
DEFINITIONS
1.1 "ACT" shall
mean the United States Food, Drug and Cosmetic Act, as
** CONFIDENTIAL TREATMENT REQUESTED
<PAGE>
amended from time to time, and the
regulations promulgated thereunder including
the guidelines and guidance issued by the
FDA.
1.2 "ADDITIONAL
PRODUCT TRADEMARK" shall have the meaning set forth in
Section 7.9.
1.3 "AFFILIATE"
with respect to any Party, shall mean any entity that
controls, is controlled by, or is under
common control with such Party, but only
for so long as such control shall continue.
For these purposes, "control" shall
refer to: (i) the possession, directly or
indirectly, of the power to direct the
management or policies of an entity,
whether through ownership of voting
securities, by contract or otherwise, or
(ii) the ownership, directly or
indirectly, of at least fifty percent (50%)
of the voting securities or other
ownership interest of an entity.
1.4 "ALKERMES
KNOW-HOW" shall mean any Know-How, including any
Collaboration Technology (other than Joint
Know-How), that is Controlled by
Alkermes or its Affiliates on the Effective
Date or thereafter during the Term
and that is necessary or directly related
to the use, sale, offer for sale or
import of the Products in the Field in the
Territory, but shall not include
Know-How covering only the Manufacture of a
Product.
1.5 "ALKERMES
MANUFACTURING KNOW-HOW" shall mean any Know-How that is
Controlled by Alkermes or its Affiliates on
the Effective Date or thereafter
during the Term and that is necessary or
directly related to the Manufacture of
the Products in the Territory or the
Manufacture of the Products in the ROW
Territory for use, sale, offer for sale or
import in the Territory.
1.6 "ALKERMES
MANUFACTURING PATENTS" shall mean shall mean any Patent
Rights that are Controlled by Alkermes or
its Affiliates on the Effective Date
or thereafter during the Term and that are
necessary or directly related to the
Manufacture of the Products in the
Territory or the Manufacture of the Products
in the ROW Territory for use, sale, offer
for sale or import in the Territory,
including those patents and patent
applications listed on Exhibit B.
1.7 "ALKERMES
PATENTS" shall mean (i) the Patent Rights Controlled by
Alkermes or its Affiliates on the Effective
Date that are necessary or directly
related to the use, sale, offer for sale or
import of the Products in the Field
in the Territory, including those patents
and patent applications listed on
Exhibit A, and (ii) any Patent Rights,
including any patents or patent
applications that claim Collaboration
Technology (other than Joint Patents),
that are Controlled by Alkermes or its
Affiliates after the Effective Date and
that are necessary or directly related to
the use, sale, offer for sale or
import of the Products in the Field in the
Territory, but shall not include
Patent Rights covering only the Manufacture
of a Product.
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1.8 "BUSINESS
DAY" shall mean a day on which banking institutions in New
York, New York are open for business.
1.9 "CALL" shall
mean a face-to-face meeting in an individual, hospital or
group setting between a Sales
Representative and one or more Target Prescribers.
1.10 "CEPHALON
COMMERCIALIZATION COSTS" shall have the meaning set forth in
Section 4.1.2.
1.11 "CEPHALON
KNOW-HOW" shall mean any Know-How, including any
Collaboration Technology (other than Joint
Know-How), that is Controlled by
Cephalon or its Affiliates on the Effective
Date or thereafter during the Term
and that is necessary or directly related
to the Manufacture, use, sale, offer
for sale or import of the Products in the
Field in the Territory.
1.12 "CEPHALON
PATENTS" shall mean any Patent Rights, including any patent
or patent applications that claim
Collaboration Technology (other than Joint
Patents), that are Controlled by Cephalon
or its Affiliates on the Effective
Date or thereafter during the Term and that
are necessary or directly related to
the Manufacture, use, sale, offer for sale
or import of the Products in the
Field in the Territory.
1.13 "CLINICAL
STUDIES" means human studies designed to measure the safety
and/or efficacy of a Product. Clinical
Studies include Phase I clinical trials,
Phase II clinical trials, Phase III
clinical trials, and Phase IV clinical
trials other than Post Marketing Clinical
Trials.
1.14 "CLINICAL
SUPPLIES" shall mean supplies of the Products, Placebo and
diluent to be used for the conduct of
pre-clinical studies and/or Clinical
Studies of a Product in the Field pursuant
to a Development Plan.
1.15 "CODE"
shall mean the Code on Interactions with Healthcare
Professionals promulgated by the
Pharmaceutical Research and Manufacturers of
America (PhRMA) and the American Medical
Association (AMA) Guidelines on Gifts
to Physicians from Industry, as either of
the foregoing may be amended from time
to time.
1.16
"COLLABORATION TECHNOLOGY" shall mean any Know-How developed, made
or
conceived by or on behalf of a Party
pursuant to a Development Plan or
Commercialization Plan that relates to a
Product or Naltrexone or the
Manufacture or use in the Field of a
Product or Naltrexone.
1.17 "COMMERCIAL
SUPPLIES" shall mean supplies of the Products (i) for
commercial sale by Cephalon and its
Affiliates in the Field in the Territory
pursuant to this Agreement or (ii) for
compassionate use, use in
investigator-sponsored Clinical
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<PAGE>
Studies or Post Marketing Clinical Trials
in the Field in the Territory pursuant
to this Agreement.
1.18
"COMMERCIALIZATION" (including variations such as "COMMERCIALIZE"
and
the like) shall mean the performance of any
and all activities directed to
promoting, marketing, importing, exporting,
distributing, selling or offering to
sell (including pre-marketing), sampling,
Post Marketing Clinical Trials and
post-marketing drug surveillance of the
Products in the Field in the Territory.
1.19 "COMMERCIALIZATION COSTS"
shall mean direct costs incurred (i.e., paid
or accrued) after the Effective Date by or
on behalf of either Party in
accordance with GAAP applied on a
consistent basis to the extent attributable to
fulfilling such Party's responsibilities
under the Commercialization Plan in
accordance therewith and with this
Agreement, all as calculated in accordance
with Section 9.7. Commercialization Costs
shall also comprise the costs of
Commercialization performed by Cephalon's
or its Affiliates' or Alkermes' or its
Affiliates' FTEs at the Commercialization
FTE Rate or the Treatment System
Specialist FTE Rate, as applicable, and
performance of the Parties' Sales
Representative FTEs at the Sales
Representative FTE Rate. Such direct costs
shall include:
(I) costs of internal marketing, scientific, medical, technical
or
managerial personnel engaged in such
efforts, which costs shall be documented;
(II) costs of Post Marketing Clinical Trials for a Product
included
within the Commercialization Plan, as well
as the Fully Burdened Manufacturing
Cost of Commercial Supplies for such
trials, any shipping and storage costs
relating to such supplies;
(III) costs of marketing, advertising, sampling and promoting
the
Products in the Field in the Territory,
including by way of example educational
expenses, speakers' programs and symposia,
and marketing meetings, but solely to
the extent reasonably allocable to the
Products and excluding the costs of
activities that promote a Party's business
as a whole;
(IV) costs of customer services, such as call centers, and
services
related to case management, patient
reimbursement, technical complaints and
medical and patient inquiries;
(V) costs of developing sales force training materials and
conducting
sales force training sessions;
(VI) costs of primary and secondary market research for the
Territory
and collection of data about sales to
hospitals and other end users;
** CONFIDENTIAL TREATMENT REQUESTED
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<PAGE>
(VII) costs of developing, producing and distributing
Promotional
Materials for the Territory, including
copyright registrations therefor;
(VIII) costs of contracting with managed care organizations,
hospital
systems, group purchasing organizations,
physician networks, pharmacies and any
other private or government healthcare
provider or reimbursement entity, in each
case solely with respect to the Products,
or if not solely, as allocated among a
Party's products on a fair and equitable
basis;
(IX) costs of communications and meetings with the FDA, exchange
of
information, assistance, medical inquiries,
and post-market surveillance in
connection with Products sold in the
Territory, following the receipt of
Regulatory Approval therefor;
(X) costs of developing and carrying out the Medical Activity Plan
for
the Products, including costs for
developing, producing and distributing medical
information, developing and implementing
continuing medical education programs,
field-based medical affairs personnel and
safety monitoring;
(XI) costs incurred in connection with receiving,
investigating,
recording, reviewing, communicating, and
exchanging adverse events and other
reportable information as provided in a
safety data exchange agreement between
the Parties to the extent relating to the
Commercialization of the Products;
(XII) costs and expenses of prosecuting, maintaining and defending
the
Vivitrex Trademark and the Additional
Product Trademark in the Territory
pursuant to Section 7.9 and trademark
enforcement costs pursuant to Section
7.10;
(XIII) Sales Representative FTE costs;
(XIV) Treatment System Specialist FTE costs; and
(XV) Distribution Costs.
1.20
"COMMERCIALIZATION FTE RATE" shall mean initially an amount equal
to
[**] per FTE per year; on January 1, 2006,
and annually thereafter, such amount
shall be adjusted to reflect any increase,
since the prior adjustment (or the
initial rate, as applicable), in the Bureau
of Labor Statistics Consumer Price
Index for Urban Wage Earners and Clerical
Workers, Northeast Urban, based on the
most recent monthly index available as of
the adjustment date.
1.21
"COMMERCIALIZATION PLAN" shall mean the marketing and sales
plan
intended to encourage sales of the Products
in the Field in the Territory, as
prepared and updated at least annually by
the CT.
1.22
"COMMERCIALLY REASONABLE EFFORTS" shall mean [**].
** CONFIDENTIAL TREATMENT REQUESTED
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1.23 "[**]"
shall have the meaning set forth in Section 9.11.
** CONFIDENTIAL TREATMENT REQUESTED
6
<PAGE>
1.24
"CONFIDENTIAL INFORMATION" shall have the meaning set forth in
Section
8.1.
1.25
"CONTROLLED" shall mean with respect to Patent Rights or Know-How
that
the applicable Party or its Affiliates, in
whole or in part, owns or has a
license to such patents or know-how and has
the ability to grant a license or a
sublicense, as applicable, or to otherwise
disclose proprietary or trade secret
information, to such other Party, without
paying any consideration to any Third
Party and without either violating the
terms of any agreement or other
arrangement with any Third Party existing
and in effect at the time such Party
would be required hereunder to grant the
other Party such license or sublicense
or misappropriating the proprietary or
trade secret information of a Third
Party.
1.26 "CT" shall
mean a commercialization team established pursuant to
Section 4.2.
1.27 "DETAIL" OR
"DETAILING" shall mean, with respect to the Products, the
activity undertaken by a Sales
Representative during a Call in which one or more
Product benefits are verbally presented to
one or more Target Prescribers, but
shall exclude discussions at conventions,
marketing meetings or seminars, and
all forms of communication not involving
face-to-face contact by a Sales
Representative and a Target Prescriber. A
Detail does not include a reminder or
sample drop.
1.28
"DEVELOPMENT" (including variations such as "DEVELOP" and
"DEVELOPING") shall mean the performance of
any and all activities relating to
obtaining Regulatory Approval of a Product
in the Field in the Territory and to
supporting and expanding such Regulatory
Approval, including activities relating
to developing the ability to Manufacture
and to continue to Manufacture the
Product. Development activities include the
performance by the Parties, their
Affiliates or Third Parties of pre-clinical
studies, pharmacokinetic studies,
toxicology studies, formulation, test
method development and stability testing,
manufacturing process development,
manufacturing technical support, validation
and scale-up (including bulk compound
production), manufacturing Clinical
Supplies, quality assurance and quality
control for formulations of a Product,
Clinical Studies (including post-marketing
Clinical Studies to obtain or support
Regulatory Approval), and regulatory
affairs including regulatory legal
services.
1.29
"DEVELOPMENT COSTS" shall mean the direct costs incurred (i.e.,
paid
or accrued) after the Effective Date by or
on behalf of either Party in
accordance with GAAP applied on a
consistent basis to the extent attributable to
fulfilling such Party's responsibilities
under the Development Plan in
accordance therewith and with this
Agreement, all as calculated in accordance
with Section 9.7. Development costs shall
also comprise costs of Development
performed by Cephalon's or its Affiliates'
or Alkermes' or its Affiliates' FTEs
at the Development FTE Rate. Such direct
costs shall include:
** CONFIDENTIAL TREATMENT REQUESTED
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<PAGE>
(I) costs of internal scientific, medical, technical or
managerial
personnel engaged in such efforts, which
costs shall be documented;
(II) costs of research or development, including costs of studies
on
the toxicological, pharmacokinetic,
metabolic or clinical aspects of a Product
conducted internally or by individual
investigators or consultants, necessary or
desirable for the purpose of obtaining
Regulatory Approval and for conducting
post-marketing activities to support such
Regulatory Approval;
(III) Fully Burdened Manufacturing Costs of Clinical Supplies and
any
shipping and storage costs relating to such
supplies;
(IV) costs of manufacturing process development, validations,
scale-up, quality assurance and quality
control for formulations of a Product
pursued by the Parties under any
Development Plan, but excluding costs relating
to the [**] Manufacturing process scale-up,
validation of the [**] Manufacturing
process or the Regulatory Approval of the
[**] Manufacturing process that are
required to obtain Regulatory Approval for
the Medisorb Product for the Initial
Indication (which costs shall be borne
solely by Alkermes);
(V) costs of preparing and reviewing data or information for
the
purpose of submitting to the FDA an NDA for
a Product in the Field;
(VI) costs of communications and meetings with the FDA, exchange
of
information and assistance until Regulatory
Approval for the Product has been
obtained; and
(VII) costs incurred in connection with receiving,
investigating,
recording, reviewing, communicating, and
exchanging adverse events and other
reportable information as provided in a
safety data exchange agreement between
the Parties to the extent relating to the
Development of a Product in the Field
in the Territory.
1.30
"DEVELOPMENT FTE RATE" shall mean initially an amount equal to
[**]
per FTE per year; on January 1, 2006, and
annually thereafter, such amount shall
be adjusted to reflect any increase, since
the prior adjustment (or the initial
rate, as applicable), in the Bureau of
Labor Statistics Consumer Price Index for
Urban Wage Earners and Clerical Workers,
Northeast Urban, based on the most
recent monthly index available as of the
adjustment date.
1.31
"DEVELOPMENT PLAN" shall mean a plan for the Development of a
Product
for one or more indications in the Field in
the Territory, as prepared and
updated at least annually by the DT.
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1.32
"DISTRIBUTABLE LOSS" AND "DISTRIBUTABLE PROFIT" shall mean the
amount
equal to Net Sales for the Products in the
Field in the Territory in the
applicable reporting period less the Shared
Expenses, which shall be a
Distributable Loss if negative and a
Distributable Profit if zero (0) or
positive.
1.33
"DISTRIBUTION COSTS" shall mean costs incurred (i.e., paid and
accrued) after the Effective Date by or on
behalf of a Party to the extent
attributable to the distribution of
Commercial Supplies, including (i)
distributor customer services, (ii) order
entry, (iii) billing, (iv)
warehousing, (v) freight and transportation
for delivery of the Products to the
end user and (vi) credit and collection
services.
1.34 "DT" shall
mean a development team established pursuant to Section
3.1.
1.35 "EFFECTIVE
DATE" shall mean the date first written above.
1.36 "FDA" shall
mean the United States Food and Drug Administration or any
successor agency.
1.37 "FIELD"
shall mean the treatment, prevention or diagnosis of any human
disease, disorder or condition, including
the treatment and/or prevention of
alcohol abuse/dependence.
1.38 "FILING
PARTY" shall have the meaning set forth in Section 7.4.
1.39 "FINISHED
PRODUCT" shall mean a finished, packaged, labeled final
dosage unit of a Product plus diluent and
syringes.
1.40 "FIRST
COMMERCIAL SALE" shall mean the first commercial sale of a
Finished Product in the Field in the
Territory after Regulatory Approval has
been obtained in the Territory for such
Finished Product.
1.41 "FTE" shall
mean [**].
** CONFIDENTIAL TREATMENT REQUESTED
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1.42 "FULLY
BURDENED MANUFACTURING COST" shall mean the costs incurred
(i.e., paid or accrued) by a Party, its
Affiliates or agents in the Manufacture
of a Product, Placebo or diluent, as
applicable, which shall be [**]. Fully
Burdened Manufacturing Cost shall exclude
[**] that are required to obtain
Regulatory Approval for the Medisorb
Product for the Initial Indication (which
costs shall be borne solely by Alkermes).
In addition, for the avoidance of
doubt, any Manufacturing development costs
that are included in Shared Expenses
as Development Costs shall not be included
as part of the Fully Burdened
Manufacturing Cost.
1.43 "GAAP"
shall mean United States Generally Accepted Accounting
Principles.
1.44 "GENERIC
PRODUCT" shall mean [**].
1.45 "GOVERNMENT
AUTHORITY" shall mean any court, tribunal, agency,
department, legislative body, commission or
other instrumentality of any
federal, state, county, city or other
political subdivision in the Territory.
1.46 "INITIAL
INDICATION" shall mean the alcohol abuse/dependence
indication.
1.47 "INITIAL
INDICATION DEVELOPMENT COSTS" shall mean those Development
Costs that are necessary to obtain
Regulatory Approval for the Medisorb Product
for the Initial Indication at the
manufacturing scale and in the presentation
form contained in NDA number 21-897 filed
with the FDA by Alkermes on March 31,
2005; provided, however, that such costs
shall only include the cost of one
Phase III clinical trial (including the
Fully Burdened Manufacturing Costs of
Clinical Supplies for such trial) in
addition to the Phase III clinical trial
the data from which is included in such NDA
and such costs shall not include any
costs incurred after the receipt of such
Regulatory Approval for the Medisorb
Product, including any costs incurred to
support or expand such Regulatory
Approval.
1.48 "IND" shall
mean an Investigational New Drug Application for a Product
or a [**] filed with the FDA pursuant to 21
C.F.R. Part 312.
1.49 "[**]"
shall mean [**].
1.50 "JOINT
KNOW-HOW" shall mean any Collaboration Technology developed,
made or conceived jointly by or on behalf
of Cephalon or its Affiliates and by
or on behalf of Alkermes or its
Affiliates.
1.51 "JOINT
PATENTS" shall mean any patent applications (including
provisional patent applications) claiming
discoveries or inventions that are
conceived and reduced to practice jointly
by or on behalf of Cephalon or its
Affiliates and by or on behalf of Alkermes
or its Affiliates and that claim
Collaboration Technology, and all Patent
Rights
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related to such patent applications.
1.52 "JSC" shall
mean that joint steering committee established pursuant to
Section 2.1.
1.53 "KNOW-HOW"
shall mean all proprietary data, technical information,
know-how, inventions, discoveries, trade
secrets, processes, techniques,
compositions, material, methods, formulas
or improvements, whether patentable or
not.
1.54 "LAWS" or
"LAW" shall mean all applicable laws, statutes, rules,
regulations, ordinances and other
pronouncements having the binding effect of
law of any applicable Government Authority,
including the Act.
1.55
"MANUFACTURING" (including variations such as "MANUFACTURE")
shall
mean the performance of any and all
activities directed to producing,
manufacturing, processing, filling,
finishing, packaging, labeling, quality
control, quality assurance, testing and
release, shipping and warehousing of the
Products, Finished Products, Placebo, or
diluent as applicable.
1.56 "MARKETING
PLAN" shall mean that portion of the Commercialization Plan
described in Section 4.3.
1.57 "MEDICAL
ACTIVITY PLAN" shall mean that portion of the
Commercialization Plan described in Section
4.3.
1.58 "MEDISORB
PRODUCT" shall mean a Product utilizing Alkermes'
Medisorb(R) sustained-release technology as
described in NDA number 21-897 filed
with the FDA by Alkermes on March 31,
2005.
1.59 "MEDISORB
TRADEMARK" shall mean the mark MEDISORB, and the
applications for registration of such mark
listed on Exhibit C.
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1.60 "MINIMUM
SALES REPRESENTATIVES" shall have the meaning set forth in
Section 4.11.1.
1.61
"NALTREXONE" shall mean [**].
1.62 "NET SALES"
shall mean, as to each calendar month, the gross amount
invoiced by Cephalon and its Affiliates to
Third Parties for the sale of
Finished Products in the Territory, less
accruals estimated, credits taken, and
actual payments (to the extent not
previously accrued) made for: (i) credits,
fees paid to wholesalers, retroactive price
reductions, rebates (including
Medicaid, managed care and similar types of
government rebates or rebates to
other health care providers and payers),
refunds, charge backs, and adjustments
actually granted; (ii) trade, quantity and
cash discounts actually allowed or
given; (iii) sales, excise, value-added and
similar taxes assessed on the sale
of the Finished Products (other than income
taxes of Cephalon and its
Affiliates), and import and customs duties;
and (iv) shipping and insurance
charges, postage, and freight out (to the
extent not separately paid by the
Third-Party customer). Each of such
deductions shall only be applicable to the
extent it is determined in accordance with
GAAP as consistently applied by
Cephalon and its Affiliates for
pharmaceutical products other than a Finished
Product.
[**].
The sale of a
Finished Product by and among Cephalon and its Affiliates
intended for subsequent resale is not a
sale to a Third Party and shall be
excluded from Net Sales calculations.
Cephalon and its Affiliates shall not sell
or otherwise transfer Finished Product
other than in an arm's length transaction
exclusively for money except in accordance
with normal industry practice: (i)
for charitable purposes; (ii) for
pre-clinical studies, Clinical Studies and
Post Marketing Clinical Trials; (iii) for
regulatory purposes and (iv) as
promotional samples.
1.63 "NEW DRUG
APPLICATION" or "NDA" shall mean an application for
Regulatory Approval required for commercial
marketing or sale of a Product as a
pharmaceutical product in the
Territory.
1.64 "NEW
INDICATION" shall mean any indication for a Product in the
Field
other than the Initial Indication.
1.65 "PARTY"
shall mean Cephalon or Alkermes and, when used in the plural,
shall mean both Cephalon and Alkermes.
1.66 "PATENT
COSTS" means the (i) fees and expenses paid to outside legal
counsel and experts, or the cost of
Alkermes' or its Affiliates' or Cephalon's
or its Affiliates' FTEs at the Development
FTE Rate, incurred in connection with
the preparation, filing, prosecution and
maintenance of Patent Rights after the
Effective
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Date, including costs of patent
interference, reexamination, reissue,
revocation, opposition and appeal
proceedings, and (ii) cost to litigate the
enforcement and defense of such Patent
Rights, in all cases as explicitly
included in Patent Costs pursuant to
Article 7 hereof.
1.67 "PATENT
RIGHTS" shall mean any and all of the following: (i) patent
applications (including provisional patent
applications) and patents (including
the inventor's certificates); and (ii) any
substitution, extension (including
patent term extensions and supplementary
protection certificates), registration,
confirmation, reissue, continuation,
divisional, continuation-in-part,
reexamination, renewal, patent of addition
or the like thereof or thereto.
1.68 "PLACEBO"
shall mean an inactive substitute for a Product.
1.69 "POST
MARKETING CLINICAL TRIAL" shall mean a clinical trial of a
Product in human patients (including
investigator initiated trials) that is
conducted for a purpose other than to
obtain or support Regulatory Approval.
1.70 "PRC" shall
have the meaning set forth in Section 4.10.2.
1.71 "PRIMARY
POSITION DETAIL" shall mean a Detail in which key Product
attributes are verbally presented in the
first position, consistent with the
terms of this Agreement, where the Product
is given primary emphasis (i.e., an
emphasis that is more important than the
emphasis given to any other product
presented), and where no more than [**]
products are presented.
1.72 "PRODUCT"
shall mean any sustained-release, time-release or other
extended-release formulation or dosage form
of a pharmaceutical product
containing Naltrexone.
1.73 "PRODUCT
LIABILITY CLAIM" shall mean any claim, action or demand by a
Third Party relating to death or bodily
injury caused or allegedly caused by the
use of a Product.
1.74
"PROMOTIONAL MATERIALS" shall mean all written, printed, audio,
video
or graphic advertising, promotional,
educational and communication materials
(other than the Product label) for
marketing, advertising and promotion of the
Products for use by the Parties' sales
forces in accordance with the terms of
the applicable Commercialization Plan.
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1.75 "REGULATORY
APPROVAL" shall mean any approvals of the FDA necessary
for the manufacture, marketing or sale of a
Product in the Territory.
1.76 "ROW
TERRITORY" shall mean all countries in the world, other than
the
Territory.
1.77 "SALES
REPRESENTATIVE" shall mean an individual whose primary
responsibility is to engage in Detailing
and other promotional efforts with
respect to the Products.
1.78 "SALES
REPRESENTATIVE FTE" shall mean [**].
1.79 "SALES
REPRESENTATIVE FTE RATE" shall mean initially an amount equal
to [**] per Sales Representative FTE per
year; on January 1, 2006, and annually
thereafter, such amount shall be adjusted
to reflect any increase, since the
prior adjustment (or the initial rate, as
applicable), in the Bureau of Labor
Statistics Consumer Price Index for Urban
Wage Earners and Clerical Workers,
Northeast Urban, based on the most recent
monthly index available as of the
adjustment date.
1.80 "SECONDARY
POSITION DETAIL" shall mean a Detail in which key Product
attributes are verbally presented in the
second position, consistent with the
terms of this Agreement, where the Product
is given significant but not primary
emphasis (i.e., an emphasis that is at
least or more important than the emphasis
given to any product presented other than
the product that is presented in the
Primary Position Detail), and where no more
than three (3) products are
presented.
1.81 "SHARED
EXPENSES" shall mean Development Costs, but not including the
Initial Indication Development Costs; the
Fully Burdened Manufacturing Cost of
Commercial Supplies (excluding such costs
relating to Post Marketing Clinical
Trials that are included in
Commercialization Costs); the Commercialization
Costs, but not including Cephalon
Commercialization Costs; Patent Costs; all
amounts paid by Cephalon in connection with
a Third Party license that are
identified as Shared Expenses pursuant to
Section 7.7; and Product Liability
Claim-related costs not covered by either
Party's indemnification obligations
set forth in Article 11.
1.82 "ST" shall
mean a supply team established pursuant to the Supply
Agreement.
1.83 "STANDARDS"
shall mean the Accreditation Council for Continuing
Medical Education (ACCME) Standards for
Commercial Support of Continuing Medical
Education, as they may be amended from time
to time.
1.84 "SUPPLY
AGREEMENT" shall mean the Supply Agreement between the Parties
for the manufacture and supply to Cephalon
of the Products, Finished Products,
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Placebo and/or diluent.
1.85 "TARGET
PRESCRIBER" shall mean a practitioner with authority to
prescribe the Products or issue hospital
orders for the Products, or with
substantial influence over the prescription
of the Products or issuance of
hospital orders for the Products, in the
Field in the Territory as identified in
the Commercialization Plan.
1.86 "TERM"
shall have the meaning set forth in Section 13.1.
1.87 "THIRD
PARTY" shall mean any entity other than the Parties or their
respective Affiliates.
1.88 "TERRITORY"
shall mean the United States of America, its territories
and possessions, including the Commonwealth
of Puerto Rico.
1.89 "TREATMENT
SYSTEM SPECIALISTS" shall have the meaning set forth in
Section 4.11.2.
1.90 "TREATMENT
SYSTEM SPECIALIST FTE" shall mean [**].
1.91 "TREATMENT
SYSTEM SPECIALIST FTE RATE" shall mean initially an amount
equal to [**] per Treatment System
Specialist FTE per year; on January 1, 2006,
and annually thereafter, such amount shall
be adjusted to reflect any increase,
since the prior adjustment (or the initial
rate, as applicable), in the Bureau
of Labor Statistics Consumer Price Index
for Urban Wage Earners and Clerical
Workers, Northeast Urban, based on the most
recent monthly index available as of
the adjustment date.
1.92 "[**]"
shall have the meaning set forth in Section 4.1.2.
1.93 "VALID
CLAIM" shall mean a claim of an issued or granted and unexpired
patent, including an Alkermes Patent or
Joint Patent, which has not lapsed, been
revoked or abandoned or held permanently
unenforceable or invalid by a decision
of a court or other governmental agency of
competent jurisdiction, unappealable
or unappealed within the time allowed for
appeal, and which has not been
disclaimed, denied or admitted to be
invalid or unenforceable through reissue,
reexamination, disclaimer or otherwise.
1.94 "VIVITREX
TRADEMARK" shall mean the mark VIVITREX, and the
applications for registration of such mark
listed on Exhibit C.
Where words and
phrases are used herein in the singular, such usage is
intended to include the plural forms where
appropriate to the context, and vice
versa. The words "including", "includes"
and "such as" are used in their
non-limiting sense and have the same
meaning as "including without limitation"
and "including but not limited
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to". References to Articles, Sections,
subsections, and clauses are to the same
with all their subparts as they appear in
this Agreement. "Herein" means
anywhere in this Agreement. "Hereunder" and
"hereto" means under or pursuant to
any provision of this Agreement.
ARTICLE 2
MANAGEMENT OF THE COLLABORATION
2.1 JOINT
STEERING COMMITTEE.
2.1.1 ESTABLISHMENT OF THE JSC. Within fifteen (15) days of the
Effective Date, the Parties shall establish
a joint steering committee (the
"JSC"), which shall have overall
responsibility for the collaboration between
the Parties, including overseeing the
Development and Manufacturing of the
Products in the Field for the Territory,
and the Commercialization of the
Products in the Field in the Territory, as
contemplated by this Agreement. The
JSC will comprise [**] representatives of
each Party, who shall be appointed
(and may be replaced at any time) by such
Party on notice to the other Party in
accordance with this Agreement. Such
representatives shall include individuals
within the senior management of each Party.
To conduct the activities described
in Section 2.1.2 below, the JSC will meet
at least [**] each calendar quarter
for the first [**] years following the
Effective Date, and thereafter at least
[**] each calendar year, or more frequently
if agreed by the JSC. The
representatives from each Party shall
collectively have one vote in decisions,
with decisions made by unanimous vote.
2.1.2 JSC RESPONSIBILITIES. The JSC shall perform the following
functions:
(I) review, coordinate and, in its discretion, approve the
strategies for the Development,
Commercialization and Manufacture of the
Products in the Field in the Territory, and
provide direction to the DT, CT and
ST as provided herein;
(II) approve the scope of the DT's, CT's and ST's
decision-making
authority;
(III) except as otherwise provided herein, review and, in its
discretion, approve by [**] of each
calendar year the Development Plan for the
subsequent calendar year (including the
Development Plan annual budget and the
division of responsibilities between the
Parties under such plan);
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(IV) review and, in its discretion, approve substantive
amendments to the Development Plan
(including the Development Plan annual
budget);
(V) review and, in its discretion, approve the multiyear
long-range plan for Development of the
Products in the Field in the Territory
(including the budget for Development
Costs) formulated by the DT;
(VI) review and, in its discretion, approve recommendations for
further Development of the Products,
including Development of the Products for a
New Indication;
(VII) review and, in its discretion, approve by [**] of each
calendar year the Commercialization Plan
for the subsequent calendar year
(including the Commercialization Plan
annual budget);
(VIII) review and, in its discretion, approve substantive
amendments to the Commercialization Plan
(including the Commercialization Plan
annual budget);
(IX) review and, in its discretion, approve the multiyear
long-range plan for Commercialization of
the Products in the Field in the
Territory (including the budget for
Commercialization Costs) formulated by the
CT;
(X) review and, in its discretion, make a commercially
reasonable
determination whether the budget for Patent
Costs prepared by the Patent
Committee pursuant to Section 7.3 should be
approved, and if appropriate,
approve the budget in accordance with such
determination;
(XI) serve as the first forum for the settlement of disputes or
disagreements that are unresolved by the
DT, CT or ST, unless otherwise
indicated in this Agreement; and
(XII) perform such other functions as appropriate to further
the
purposes of this Agreement as determined by
the Parties.
2.1.3 JSC CHAIRPERSON; PROCEDURES. For a [**]-year period
commencing
on the Effective Date, an Alkermes
representative to the JSC shall serve as the
chairperson of the JSC. For each subsequent
[**]-year period, representatives of
the Parties shall alternate as the
chairperson of the JSC. The chairperson shall
establish the timing and agenda for all JSC
meetings and shall send notice of
such meetings, including the agenda
therefor, to all JSC members; provided,
however, either Party may request that
specific items be included in the agenda
and may request that additional meetings be
scheduled as needed. The location of
regularly scheduled JSC
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meetings shall alternate between the
offices of the Parties, unless otherwise
agreed. Meetings may be held telephonically
or by videoconference. A quorum of
at least [**] JSC members appointed by each
Party shall be present at or shall
otherwise participate in each JSC meeting.
The Party hosting any JSC meeting
shall appoint one person (who need not be a
member of the JSC) to attend the
meeting and record the minutes of the
meeting in writing. Such minutes shall be
circulated to the Parties promptly
following the meeting for review, comment and
approval. Any modifications to any
Development Plan or Commercialization Plan
(including the work, budget, and timeline
therefor) approved at a JSC meeting
shall be considered approved and shall
constitute a valid, binding amendment to
such Development Plan or Commercialization
Plan, as applicable, upon JSC review
and approval of the meeting minutes related
thereto.
2.1.4 JSC DECISION MAKING. As a general principle, the JSC will
operate by consensus with each Party
collectively having one vote. In the event
that the JSC members do not reach consensus
with respect to a matter that is
within the purview of the JSC within [**]
days after they have met and attempted
to reach such consensus, such matter shall
be resolved by the Parties under the
terms of Article 12 below; provided,
however, that to the extent any matters are
required by Law or by safety concerns with
respect to a Product to be resolved
within a shorter period of time, the
periods set forth in this Section 2.1.4 and
in Article 12 shall be shortened as
appropriate to permit the resolution of such
matters within the required period.
2.2
MODIFICATIONS TO AGREEMENT AFTER SHARING OF DISTRIBUTABLE LOSS
AND
DISTRIBUTABLE PROFIT CONVERTS TO A
ROYALTY-BASED ARRANGEMENT. The Parties intend
that in those instances where the sharing
of Distributable Loss and
Distributable Profit hereunder is
eliminated in favor of a royalty-based
arrangement, the DT and the CT will cease
operations, the Parties' operational
Development and Commercialization
obligations and all related collaboration
governance provisions (including the
provisions of Section 12.2 relating to the
resolution of disputes outside of the
arbitration provisions of Section 12.3)
shall terminate, and Cephalon shall be
obligated only to use Commercially
Reasonable Efforts to Commercialize the
Products in the Field in the Territory.
Notwithstanding the foregoing, the Parties'
mutual obligations to cooperate with
one another to enable one another to comply
with applicable Laws shall continue,
including Alkermes' right to require that
Cephalon not implement decisions that
adversely affect, in any material respect,
the obligation of Alkermes, as the
holder of the Regulatory Approval for a
Product, to comply with applicable Law.
Cephalon shall have the right to make all
decisions regarding Development and
Commercialization, subject to the preceding
sentence and to Cephalon's royalty
and other surviving financial obligations
and related reporting obligations to
Alkermes hereunder. Section 9.11 shall also
no longer apply. In addition, each
Party shall have the right to prosecute,
defend and enforce Patent Rights owned
or controlled by it, each Party shall be
responsible for the payment of any
Patent Costs it incurs, each Party shall
have the right to retain all associated
recovery in connection with a patent
enforcement or defense action, and Cephalon
shall be responsible for the costs and
expenses incurred in connection with
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the prosecution, maintenance, defense and
enforcement of the Vivitrex Trademark
and the Additional Product Trademark.
ARTICLE 3
DEVELOPMENT
3.1 DEVELOPMENT
TEAM.
3.1.1 ESTABLISHMENT OF DEVELOPMENT TEAM. The JSC shall establish
a
development team (the "DT") no later than
[**] days after the Effective Date to
coordinate and implement all activities for
the Development of the Products in
the Field in the Territory, within the
budgets approved by the JSC. One
representative from each Party shall be
designated as that Party's team leader
to act as the primary DT contact for that
Party. The DT shall consist of an
equal number of representatives of each
Party as are reasonably necessary to
accomplish the goals of the DT hereunder.
Such representatives will include
individuals with expertise and
responsibilities in the areas of pre-clinical and
clinical development, manufacturing process
development, quality control,
quality assurance, regulatory affairs and
product development, as applicable to
the stage of Development of a Product.
Either Party may replace any or all of
its representatives at any time upon notice
to the other Party.
3.1.2 DEVELOPMENT TEAM RESPONSIBILITIES. The DT shall be
responsible
for:
(I) developing an overall strategy for the Development of the
Products in the Field in the Territory for
review and approval by the JSC;
(II) formulating the Development Plans (including the
allocation
of Development activities between the
Parties) and associated annual budgets and
any substantive amendments thereto for
review and approval by the JSC, which
Development Plans will include the plans
for Manufacture development and
associated annual budgets and any
substantive amendments thereto received by the
DT from the ST;
(III) formulating the multiyear long-range plan for Development
of the Products in the Field in the
Territory (including the budget for
Development Costs) for review and approval
by the JSC;
(IV) implementing in coordination with the ST, as appropriate,
all activities pursuant to the Development
Plans approved by the JSC;
(V) making recommendations for further Development of the
Products, including Development of the
Products for a New Indication;
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(VI) in consultation with intellectual property representatives
of each Party, developing a strategy, and
implementing methods for compliance,
to protect trade secrets, know-how and
other confidential material, data and
information developed, made or conceived by
the Parties pursuant to a
Development Plan;
(VII) in consultation with the CT, developing and co-ordinating
a
communications and publication strategy for
the Products in the Territory;
(VII) generating forecasts of supply requirements for the
Product
and Placebo pursuant to the Development
Plans and delivering this forecast to
the CT;
(IX) exchanging information and facilitating cooperation and
coordination between the Parties as they
exercise their respective rights and
meet their respective obligations under the
Development Plans and this
Agreement;
(X) providing status updates to the JSC regarding Development
activities in the Territory; and
(XI) performing such other functions as appropriate to further
the purposes of this Agreement as
determined by the Parties.
In addition, the
DT may designate subteams as appropriate to facilitate
coordination and cooperation in key areas.
The Development Plan for the Medisorb
Product for the Initial Indication for
calendar years 2005 and 2006 and the
accompanying budget are attached hereto as
Exhibit D. This Development Plan
shall be deemed to have been reviewed and
approved by the JSC. The DT will
prepare final Development Plans and
associated budgets for each subsequent
calendar year by [**] of the then-current
calendar year. The JSC shall review
and, if appropriate, approve such
Development Plans and budgets by [**] of the
then-current calendar year. In addition, a
[**]-year long-range plan for
Development of the Products in the Field in
the Territory (including the budget
for Development Costs) shall be established
on a yearly basis under the
direction of the DT and submitted to the
JSC by [**] of each calendar year
during any year that the Parties are
operating under a Development Plan.
3.1.3 DEVELOPMENT TEAM PROCEDURES. The Alkermes team leader
shall
serve as the chairperson of the DT. The
chairperson shall establish the timing
and agenda for all DT meetings and shall
send notice of such meetings, including
the agenda therefor, to all DT members;
provided, however, either Party may
request that specific items be included in
the agenda and may request that
additional meetings be scheduled as needed.
The DT will meet at least [**] each
calendar month, or as agreed by the DT, for
the first [**] years following the
Effective Date, and at least [**] each
calendar quarter, or as agreed by the DT,
thereafter. The location of regularly
scheduled DT meetings shall alternate
between the offices of the Parties,
unless
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otherwise agreed. Meetings may be held
telephonically or by videoconference. A
quorum of at least half the DT members
appointed by each Party shall be present
at or shall otherwise participate in each
DT meeting. The Party hosting any DT
meeting shall appoint one person (who need
not be a member of the DT) to attend
the meeting and record the minutes of the
meeting in writing. Such minutes shall
be circulated to the Parties promptly
following the meeting for review, comment
and approval.
3.1.4 DEVELOPMENT TEAM DECISION MAKING. As a general principle, the
DT
will operate by consensus, with each Party
collectively having one vote. In the
event that the DT members do not reach
consensus with respect to a matter that
is within the purview of the DT within [**]
days after they have met and
attempted to reach such consensus, such
matter shall be presented to the JSC for
resolution; provided, however, that to the
extent any matters are required by
Law or by safety concerns with respect to a
Product to be resolved within a
shorter period of time, the periods set
forth in this Section 3.1.4 shall be
shortened as appropriate to permit the
resolution of such matters within the
required period.
3.2 ACCOUNTING
AND FINANCIAL REPORTING FOR DT AND CT. Each Party will
appoint a representative with expertise in
the areas of accounting, cost
allocation, budgeting and financial
reporting no later than [**] days after the
Effective Date. Such financial
representatives shall work under the direction of
the JSC and provide services to and consult
with the DT and CT in order to
address the financial, budgetary and
accounting issues which arise in connection
with any Development Plan or
Commercialization Plan. The financial
representatives from Cephalon and Alkermes
shall develop systems to track their
respective Sales Representatives' Primary
Position Details and Secondary
Position Details and any factors used to
allocate less than full time Sales
Representative FTEs, Treatment System
Specialist FTEs or other FTEs hereunder.
Within [**] days of the end of each
calendar quarter the financial
representatives shall review the actual
Development Costs or Commercialization
Costs, as applicable, incurred during the
prior calendar quarter as charged by
Alkermes and Cephalon, respectively, and
prepare a report to the DT or CT, as
applicable, comparing these costs to the
comparable Development Plan budget or
Commercialization Plan budget, as
applicable, specifically noting the extent, if
any, to which the Development Costs or
Commercialization Costs exceed the
comparable budgeted amounts. Each financial
representative may be replaced at
any time by the represented Party by
providing notice thereof to the other
Party. The financial representatives will
meet at least once each calendar
quarter, or as they or the DT or CT may
agree. The financial representatives
shall agree upon the timing and agenda for
all regular meetings. The location of
regularly scheduled meetings shall
alternate between the offices of the Parties,
unless otherwise agreed. Meetings may be
held telephonically or by
videoconference. One of the financial
representatives shall record the minutes
of the meeting in writing. Such minutes
shall be circulated to the other
financial representative promptly following
the meeting for review, comment and
approval. Following their approval, the
minutes shall be provided to each
Party's DT and CT team leaders.
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3.3 DEVELOPMENT
EFFORTS. Each Party shall use its Commercially Reasonable
Efforts to perform its respective tasks and
obligations in conducting all work
assigned to it in any Development Plan. The
Parties agree that Alkermes shall be
primarily responsible for conducting
Development hereunder; provided, however,
that in allocating responsibility for
Development the DT shall also consider the
infrastructure and expertise of each Party
and may elect to allocate specific
Development tasks and obligations to a
Party to exploit such infrastructure and
expertise. Each Party shall also cooperate
with and provide commercially
reasonable support to the other Party in
connection with such other Party's
conduct of such work pursuant to any
Development Plan. If any tasks, obligations
or support that a Party is required to
perform or provide hereunder will be
performed or provided by any Affiliate or
agent of such Party, such Party shall
not be relieved of its responsibilities
hereunder.
3.4 DEVELOPMENT
RESPONSIBILITIES.
3.4.1 FURTHER DEVELOPMENT OF PRODUCTS IN THE TERRITORY. If
either
Party wishes to further Develop the
Products for use in the Field in the
Territory, including any improvements to
the Products or Development of the
Products for New Indications, such Party
shall notify the DT, and the DT shall
determine whether it wishes to recommend
such further Development of the
Products pursuant to a Development Plan,
and accompanying budget, to the JSC for
approval. The Development Plan shall
allocate responsibility for the conduct of
such activities between the Parties. If the
DT makes such recommendation or, at
either Party's request, even if the DT does
not make such recommendation, the
JSC shall consider such further Development
of the Products. If such further
Development is approved by the JSC or
pursuant to the dispute resolution
procedure set forth in Article 12, the
Parties shall perform such Development.
Notwithstanding the foregoing, such further
Development shall not be undertaken
if either Party notifies the JSC of its
good faith determination [**].
3.4.2 DATA TRANSFER AND COOPERATION.
(I) REGULATORY SUBMISSIONS. Promptly after the Effective Date,
Alkermes shall provide Cephalon reasonable
access at Alkermes' offices at
Cephalon's request to any portion of the
NDA submission made by Alkermes on
March 31, 2005 for the Medisorb Product for
the Initial Indication, including
any information referenced or otherwise
incorporated therein. All such
information shall be deemed to be
Confidential Information of Alkermes subject
to the terms and conditions set forth in
Article 8.
(II) ALKERMES DATA. Subject to Section 3.4.2(i), Alkermes shall
provide Cephalon at Cephalon's request with
reasonable access to all relevant
materials, data and regulatory information
in Alkermes' or its Affiliates'
possession related to any pre-clinical
studies, Clinical Studies and Post
Marketing Clinical Trials of any Product in
the Field conducted or sponsored by
Alkermes (including investigator sponsored
trials) pursuant to a Development
Plan or a Commercialization Plan or
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otherwise conducted by or on behalf of
Alkermes (and, in electronic or other
form reasonably requested by Cephalon where
practicable), including all clinical
safety and efficacy data and all regulatory
data and information related to the
use and sale of the Products in the Field.
Such materials, data and information
shall be delivered to Cephalon by Alkermes
promptly after the relevant request
by Cephalon in an orderly fashion and in a
manner such that the value of the
delivered information is preserved in all
material respects. All such materials,
data and information shall be deemed to be
Confidential Information of Alkermes
subject to the terms and conditions set
forth in Article 8.
(III) CEPHALON DATA. Cephalon shall provide Alkermes at
Alkermes'
request with reasonable access to all
relevant materials, data and regulatory
information in Cephalon's or its
Affiliates' possession related to any
pre-clinical studies, Clinical Studies and
Post Marketing Clinical Trials of a
Product in the Field conducted or sponsored
by Cephalon (including investigator
sponsored trials and Post Marketing
Clinical Trials) pursuant to a Development
Plan or a Commercialization Plan or
otherwise conducted by or on behalf of
Cephalon (and, in electronic or other form
reasonably requested by Alkermes
where practicable), including all clinical
safety and efficacy data and all
regulatory data and information related to
the use and sale of the Products in
the Field. Such materials, data and
information shall be delivered to Alkermes
by Cephalon promptly after the relevant
request by Alkermes in an orderly
fashion and in a manner such that the value
of the delivered information is
preserved in all material respects. All
such materials, data and information
shall be deemed to be Confidential
Information of Cephalon subject to the terms
and conditions set forth in Article 8.
(IV) ROW TERRITORY. Alkermes shall share with Cephalon relevant
materials, data and regulatory information
in Alkermes' or its Affiliates'
possession and Control related to any
pre-clinical studies, Clinical Studies and
post marketing clinical trials of a Product
in the Field resulting from its
collaborations with respect to the Product
for the ROW Territory to the extent
such materials, data or regulatory
information are necessary or useful for
filing an IND or NDA or required to be
disclosed by Law. In return Cephalon
agrees that Alkermes may share with its
collaborators with respect to the
Product in the ROW Territory, subject to
the provisions of Article 8, [**].
3.4.3 REGULATORY FILINGS. Alkermes shall be responsible for
applying
for and seeking Regulatory Approval for the
Medisorb Product in the Territory
for the Initial Indication, which
applications and approvals shall be held by
and in the name of Alkermes. Alkermes shall
also be responsible for filing and
maintaining all INDs and NDAs, and for
seeking Regulatory Approval for other
Products in the Territory, which
applications and approvals shall be held by and
in the name of Alkermes (except to the
extent that Cephalon is required to file
an IND in connection with Clinical Studies
or Post Marketing Clinical Trials for
which Cephalon has responsibility in
accordance with this Agreement). Prior to
submitting any IND or NDA within the
Territory, the Parties,
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through the DT, shall consult and cooperate
in preparing and reviewing such IND
or NDA and its content and scope; provided,
however, that in accordance with
Section 12.2 Alkermes shall have final
decision making authority with respect to
any INDs, NDAs and Regulatory Approvals for
a Product in the Territory.
3.4.4 REGULATORY MEETINGS AND COMMUNICATIONS. Alkermes shall be
primarily responsible for conducting
meetings and discussions related to the
Products with the FDA, provided, however,
that Cephalon shall have the right to
participate in such meetings and
discussions. Alkermes shall give Cephalon
reasonable advance notice of such
activities to permit Cephalon to participate.
If Alkermes has substantive written or oral
communication with the FDA relating
to the Products, Alkermes shall notify
Cephalon and provide an advance copy to
Cephalon of any such written communication
to the FDA at least [**] Business
Days, if reasonably possible to do so and
otherwise as soon as practicable,
prior to such communication's intended
occurrence and a copy to Cephalon of any
such written communication from the FDA
within [**] Business Days of such
communication's occurrence. Alkermes shall
consider in good faith any comments
provided by Cephalon regarding any planned
communication to the FDA. In the
event Cephalon receives any written or oral
communication from the FDA relating
to the Products, Cephalon shall notify
Alkermes and provide a copy to Alkermes
of any such written communication within
[**] Business Days of such
communication's occurrence. Cephalon shall
not respond to any such communication
but shall permit Alkermes to respond on
Cephalon's behalf; provided, however,
that Cephalon shall have the right to
respond to FDA communication to the extent
reasonably required to comply with
applicable Laws.
3.4.5 DEBARMENT LIMITATIONS. In the course of Development of
the
Products in the Territory, neither Party
shall knowingly use any employee or
consultant who is or has been debarred by
the FDA or any other regulatory
authority, or, to the best of such Party's
knowledge, who is or has been the
subject of debarment proceedings by the FDA
or any such regulatory authority.
Each Party shall promptly notify the other
Party of and provide such other Party
with a copy of any correspondence or other
reports that such Party receives from
any Third Party with respect to any use of
a debarred employee or consultant in
connection with such Party's performance of
its obligations under this
Agreement.
3.4.6 COMPLIANCE WITH LAWS. Each Party shall conduct
pre-clinical
studies and Clinical Studies hereunder, and
other Development of the Products in
the Field in the Territory, in compliance
with all applicable Laws.
3.5
PHARMACOVIGILENCE AND ADVERSE EVENT REPORTING. Within [**] days of
the
Effective Date, both Parties shall enter
into a mutually acceptable safety data
exchange agreement, setting forth
guidelines and procedures for the receipt,
investigation, recordation, review,
communication, and exchange (as between the
Parties) of adverse event reports,
pregnancy reports, technical complaints and
any
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other information concerning the safety of
the Products. Such guidelines and
procedures shall be in accordance with, and
enable the Parties and their
Affiliates to fulfill, reporting
obligations to the FDA or any other regulatory
authority. Furthermore, such guidelines and
procedures shall be consistent with
relevant International Committee on
Harmonization (ICH) guidelines, except where
said guidelines may conflict with reporting
requirements of local regulatory
authorities, in which case local reporting
requirements shall prevail. The
Parties shall maintain a common safety
database for both clinical and
post-marketing adverse event data for the
Products, which database shall be
managed by Alkermes. The Parties shall
mutually agree within [**] days on the
actions necessary to address any safety
concerns with respect to the Products
about which one Party provides notice to
the other Party; provided, however,
that if the Parties cannot reach agreement
within such [**]-day period, the
matter shall be referred to the JSC for
immediate review. If the JSC cannot
reach agreement about such matter within
[**] days after referral by the
Parties, then Alkermes shall have final say
with respect to such matter.
Notwithstanding the foregoing provision,
such [**]-day periods shall be
shortened if either Party provides notice
to the other Party that more urgent
action is required. The Parties' costs
incurred in connection with receiving,
investigating, recording, reviewing,
communicating, and exchanging adverse
events and other reportable information as
provided in such safety data exchange
agreement shall be included as an element
of Development Costs (to the extent
relating to the Development of a Product)
or Commercialization Costs (to the
extent relating to the Commercialization of
a Product), as applicable. The
Parties' costs incurred in connection with
receiving, investigating, recording,
reviewing, communicating, and exchanging
adverse events and other reportable
information as provided in such safety data
exchange agreement prior to the
receipt of Regulatory Approval for the
Medisorb Product for the Initial
Indication shall be included as an element
of Initial Indication Development
Costs.
3.6 DEVELOPMENT
COSTS. All Initial Indication Development Costs shall be
paid by Alkermes. All other Development
Costs for activities conducted under a
Development Plan hereunder shall be Shared
Expenses and shall be subject to
offset or credit against amounts due
pursuant to Section 9.5 below
3.7 DEVELOPMENT
PLAN BUDGET. Responsibility for any Development Plan budget
shall rest with the DT, which shall develop
budgets for Development, subject to
final approval by the JSC. Budgets will be
prepared annually as set forth in
Section 3.1.2. Any dispute relating to the
amount of a Development Plan budget
shall be considered a Reserved Dispute
subject to resolution pursuant to Section
12.2. Such budgets shall include
Development FTE Rates for FTEs conducting
Product Development activities. The
financial representatives from Cephalon and
Alkermes appointed pursuant to Section 3.2
will be responsible for identifying,
analyzing and reporting to the DT all
significant [**] between the budget and
the actual costs incurred and all [**]
between the budget and such costs. If any
costs for a Development activity result in
an increase [**] in the approved
budget of more than [**]percent ([**]%) for
a given calendar quarter, the DT
shall forward to the JSC the report it
received from the
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financial representatives, and the JSC
shall review such costs and shall
designate them as Development Costs if the
JSC determines that incurring such
costs was [**]. [**]. A [**]-year
long-range plan for Development of the
Products in the Field in the Territory
(including the budget for Development
Costs) shall be established on a yearly
basis under the direction of the DT as
set forth in Section 3.1.2 and shall be
submitted to the JSC for final approval.
3.8 LIMITATION
ON DEVELOPMENT TEAM DECISION MAKING. Neither the DT nor the
JSC shall, without the consent of Cephalon,
have any authority to modify or
reduce Alkermes' obligation under this
Agreement to use Commercially Reasonable
Efforts to Develop the Product as provided
herein. Notwithstanding anything to
the contrary herein, Alkermes shall not
have any right to resolve any Reserved
Dispute in any manner that modifies or
reduces Alkermes' obligations under this
Agreement or to amend any provision of this
Agreement.
ARTICLE 4
COMMERCIALIZATION
4.1
COMMERCIALIZATION EFFORTS.
4.1.1 COMMERCIALLY REASONABLE EFFORTS. Alkermes and Cephalon
each
agree to collaborate in the
Commercialization of the Products in the Field in
the Territory in accordance with the terms
and conditions of this Agreement. The
Parties agree that Cephalon shall be
primarily responsible for conducting
Commercialization hereunder; provided,
however, that in allocating
responsibility for Commercialization the CT
shall also consider the
infrastructure and expertise of each Party
and may elect to allocate specific
Commercialization tasks and obligations to
a Party to exploit such
infrastructure and expertise. Each Party
shall use Commercially Reasonable
Efforts to Commercialize the Products in
the Field in the Territory. Each Party
shall cooperate with and provide
commercially reasonable support to the other
Party in connection with such other Party's
performance of its tasks and
obligations. If any tasks, obligations or
support that a Party is required to
perform or provide hereunder will be
performed or provided by any Affiliate or
agent of such Party, such Party shall not
be relieved of its responsibilities
hereunder.
4.1.2 CEPHALON COMMERCIALIZATION COSTS. In addition to the
foregoing
obligations, Cephalon shall be solely
responsible for the payment, [**]. The
Cephalon Commercialization Costs shall not
be Shared Expenses. [**].
4.2
COMMERCIALIZATION TEAM.
4.2.1 ESTABLISHMENT OF COMMERCIALIZATION TEAM. The JSC shall
establish
the commercialization team (the "CT") no
later than [**] days after the
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Effective Date to coordinate and implement
all activities for the marketing and
sale of the Products in the Field in the
Territory. One representative from each
Party shall be designated as that Party's
team leader to act as the primary CT
contact for that Party. The CT shall
consist of an equal number of
representatives of each Party as are
reasonably necessary to accomplish the
goals of the CT hereunder. The
representatives of Cephalon and Alkermes to the
CT will be individuals with expertise and
responsibilities in the areas of
medical affairs, strategic marketing and
sales. Either Party may replace any or
all of its representatives at any time upon
notice to the other Party.
4.2.2 COMMERCIALIZATION TEAM RESPONSIBILITIES. The CT shall be
responsible for:
(I) developing an overall strategy for the Commercialization of
the Products in the Field in the Territory
for review and approval by the JSC;
(II) formulating the Commercialization Plans (including the
allocation of Commercialization activities
between the Parties) and associated
annual budgets and any substantive
amendments thereto for review and approval by
the JSC;
(III) formulating a multiyear long-range plan for
Commercialization of the Products in the
Field in the Territory (including the
budget for Commercialization Costs) for
review and approval by the JSC;
(IV) implementing all activities pursuant to the
Commercialization Plans approved by the
JSC;
(V) in consultation with the DT, developing a communications
and
publication strategy for the Products in
the Field in the Territory;
(VI) generating sales forecasts and measuring sales performance
for the Product in the Territory;
(VII) in accordance with the terms and conditions set forth in
the Supply Agreement, by the end of each
calendar quarter, generating an [**]
month rolling forecast for Product and
Placebo requirements, incorporating any
forecast received from the DT, and
delivering this forecast to the ST;
(VIII) coordinating with the DT with respect to regulatory
issues
and future Product Development activities
to be undertaken pursuant to the
Development Plan and with respect to Post
Marketing Clinical Trials;
(IX) developing positioning and market strategies for the
Products in the Territory;
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(X) formulating a life cycle plan for the Products in the Field
in the Territory, including presentations,
formulations, usage or dosage form;
(XI) formulating an overall pricing strategy for the Products
in
the Territory;
(XII) exchanging information and facilitating cooperation and
coordination between the Parties as they
exercise their respective rights and
meet their respective obligations under the
Commercialization Plans and this
Agreement;
(XIII) providing status updates to the JSC regarding marketing
and sales activities in the Territory;
and
(XIV) performing such other functions as appropriate to further
the purposes of this Agreement as
determined by the Parties.
In addition, the
CT may designate subteams as appropriate to facilitate
coordination and cooperation in key areas.
Within [**] days after the Effective
Date, the CT shall formulate a
Commercialization Plan and associated budget for
the period from the Effective Date until
the end of calendar year 2006 for
approval by the JSC. Thereafter by [**] of
each calendar year during the Term,
the CT shall prepare a Commercialization
Plan and associated annual budget for
the following calendar year and present
such plan and budget to the JSC for
approval. The JSC shall review and, if
appropriate, approve such
Commercialization Plans and budgets by [**]
of the then-current calendar year.
In addition, by [**] of each calendar year
during the Term, the CT shall prepare
a [**]-year long-range plan for
Commercialization of the Products in the Field
in the Territory (including the budget for
Commercialization Costs) and present
such plan to the JSC for approval. Prior to
presenting this long-range plan to
the JSC for approval, the CT shall forward
this long-range plan to the ST
pursuant to the Supply Agreement, and the
CT team leader, and if applicable the
DT team leader, will discuss with the ST
team leader this long-range plan as
provided in the Supply Agreement.
4.2.3 COMMERCIALIZATION TEAM PROCEDURES. The Cephalon team
leader
shall serve as the chairperson of the CT.
The chairperson shall establish the
timing and agenda for all CT meetings and
shall send notice of such meetings,
including the agenda therefor, to all CT
members; provided, however, either
Party may request that specific items be
included in the agenda and may request
that additional meetings be scheduled as
needed. The CT will meet at least [**]
each calendar quarter or as agreed by the
CT. The location of regularly
scheduled CT meetings shall alternate
between the offices of the Parties, unless
otherwise agreed. Meetings may be held
telephonically or by videoconference. The
Party hosting any CT meeting shall appoint
one person (who need not be a member
of the CT) to attend the meeting and record
the minutes of the meeting in
writing. Such minutes shall be circulated
to the Parties promptly following the
meeting for review, comment and
approval.
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4.2.4 COMMERCIALIZATION TEAM DECISION MAKING. As a general
principle,
the CT will operate by consensus, with each
Party collectively having one vote.
In the event that the CT members do not
reach consensus with respect to a matter
that is within the purview of the CT within
[**] days after they have met and
attempted to reach such consensus, such
matter shall be presented to the JSC for
resolution; provided, however, that to the
extent any matters are required by
Law or by safety concerns with respect to a
Product to be resolved within a
shorter period of time, the periods set
forth in this Section 4.2.4 shall be
shortened as appropriate to permit the
resolution of such matters within the
required period.
4.3 CONTENTS OF
COMMERCIALIZATION PLAN. The Commercialization Plan shall
consist of a marketing plan (the "Marketing
Plan") and a medical activity plan
(the "Medical Activity Plan").
4.3.1 MARKETING PLAN. Each Marketing Plan shall contain at a
minimum:
(I) plans for branding and positioning the Products;
(II) promotional campaigns for the Products and messaging by
audience;
(III) competitive analysis of the Products;
(IV) plans and strategies for presentations of the Products at
major meetings and conventions;
(V) market research plans for the Products;
(VI) distribution plans for the Products;
(VII) strategies for the Products with respect to managed care
organizations, hospital systems, group
purchasing organizations, physician
networks, pharmacies and any other private
or government healthcare providers or
reimbursement entities;
(VIII) pricing and reimbursement plans for the Products;
(IX) high-level sales plans and activities for the Products;
(X) concepts for development of appropriate sales training and
Promotional Materials; and
(XI) sales forecasts for the Products by year for [**] years
with
market sensitivities incorporated.
4.3.2 MEDICAL ACTIVITY PLAN. Each Medical Activity Plan shall
contain
at
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a minimum:
(I) Post Marketing Clinical Trial plans;
(II) market and key opinion leader development plans for the
Products, including plans to support
continuing medical education;
(III) publication plans for the Products;
(IV) plans to ensure appropriate medical information responses
with respect to the Products;
(V) safety monitoring plans for the Products; and
(VI) plans and expected activities for field based medical
affairs personnel for the Products.
4.4 COMPLIANCE
WITH LAW. Each Party shall Commercialize the Products in the
Field in the Territory in compliance with
all applicable Laws, the Codes, the
terms of this Agreement, and the
then-current Commercialization Plan. Each Party
shall promptly notify the other Party of
and provide the other Party with a copy
of any correspondence or other reports with
respect to the Commercialization of
the Products that such Party receives from
the FDA or any other regulatory
authority, or from the Pharmaceutical
Research and Manufacturers of America
(PhRMA) or the American Medical Association
(AMA) relating to its compliance
with applicable Law or the Codes. Each
Party shall Commercialize the Products,
including carrying out the Medical Activity
Plan, in conformity with the
practices and procedures relating to the
education of the medical community set
forth in the Standards. Each Party shall
promptly notify the other Party of and
provide the other Party with a copy of any
correspondence or other reports with
respect to the Commercialization of the
Products that such Party receives from
the Accreditation Council for Continuing
Medical Education (ACCME) relating to
its compliance with the Standards.
4.5 CORPORATE
NAME AND LOGO. To the extent not prohibited by Law and
subject to Regulatory Approval, the
