License and Development Agreement

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Exhibit 10.2

Confidential Materials omitted and filed separately with the
Securities and Exchange Commission. Asterisks denote omissions.

License and Development Agreement

By and between

Arrow International Limited
57 St. Christopher Street
Valletta, VLT 08, Malta

and

Sepracor Inc.
84 Waterford Drive
Marlborough, MA 01752
USA

        This License and Development Agreement (this "Agreement"), dated as of April 30, 2008 is being entered into by and between Arrow International Limited, a Malta corporation having its principal office at 57 St. Christopher Street, Valletta, VLT 08, Malta, and its Affiliates (collectively referred to as "Arrow"), and Sepracor Inc., a corporation organized and existing under the laws of the State of Delaware and having its principal office at 84 Waterford Drive, Marlborough, MA 01752, USA ("Sepracor"). Each or both of Arrow and Sepracor are hereinafter referred to as "Party" or "Parties", as intended in the given context.

RECITALS

A.

Sepracor wishes to commercialize an inhalation pharmaceutical product containing a combination of both levalbuterol and ipratropium as the sole active ingredients.

B.

Arrow controls certain Arrow Know-How and Arrow Patents relating to the Product.

C.

Arrow has material capabilities, resources and experience in the development and analytical testing of inhalation pharmaceutical products, and has made substantial progress in development of the Product.

D.

Sepracor has material capabilities, resources and experience in the development, clinical testing, regulatory approvals, commercialization, marketing and distribution of branded inhalation pharmaceutical products, including with respect to inhalation products containing levalbuterol.

E.

Arrow wishes to grant Sepracor an exclusive right and license under the Arrow Technology to Develop, distribute and Commercialize the Product.

F.

Sepracor wishes to work collaboratively with Arrow to continue to Develop the Product and subsequently to Commercialize the Product.

        NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements hereinafter set forth, the sufficiency of which is hereby acknowledged, and intending to be legally bound, the Parties to this Agreement mutually agree as follows:

Article 1    Definitions

        For the purposes of this Agreement, the following terms, whether used in the singular or plural, shall be ascribed the following meaning:

        1.1    "Additional Product" means any product or proposed product, other than the Product, which contains, [**].

        1.2    "Affiliate" of either Party means any corporation, firm, partnership, organization or entity, whether de jure or de facto, which such Party directly or indirectly controls, is controlled by or is under common control with. For the purpose of this definition, the term "control" means (i) direct or indirect ownership of fifty percent (50%) or more of the outstanding equity voting stock (or such lesser percentage which is the maximum allowed to be owned by a foreign corporation in a particular jurisdiction) of a Party or other entity or (ii) the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Party or other entity, whether through the ownership of voting securities, by contract, or otherwise.

        1.3    "Arrow Know-How" means the Know-How Controlled by Arrow (for purposes of clarity, including Affiliates of Arrow) at any time during the Term in the Territory that may be useful to Sepracor in Sepracor's Development and Commercialization of the Product in the Territory.

        1.4    "Arrow Patent(s)" shall mean any and all Patents or Patent Applications Controlled by Arrow (for purposes of clarity, including Affiliates of Arrow) at any time during the Term in the Territory with a claim relating to a Product or a component of a Product, or a method of manufacture or Formulation of any of the foregoing, or a method of treatment using any of the foregoing. The Arrow Patents in the Territory existing on the Effective Date are identified on Schedule 1.4 , as it may be amended from time

to time. For the avoidance of doubt, an inclusion with respect to any Arrow Patent coming into existence after the Effective Date shall occur automatically upon the first filing of a provisional or non-provisional application in respect of such Arrow Patent in the Territory, and the subsequent amendment of Schedule 1.4 shall only serve declaratory purposes.

        1.5    "Arrow Technology" means the Arrow Know-How and the Arrow Patents, collectively.

        1.6    "Business Day" means any day on which banking institutions in the Commonwealth of Massachusetts, United States are open for business.

        1.7    "Change of Control" with respect to a Party means (i) the acquisition (directly or indirectly, whether by merger, consolidation, purchase and sale, share exchange or otherwise) by any Third Party (other than an Affiliate or any trust or fund created under a profit-sharing or other benefit plan for employees of such Party) of a beneficial interest in the securities of such Party representing more than fifty percent (50%) of the combined voting power of such Party's then outstanding securities; or (ii) the transfer, sale or assignment of more than fifty percent (50%) of the assets of such Party to a Third Party other than an Affiliate of such Party; or (iii) any other transfer to a Third Party of the power to control such Party.

        1.8    "Commercialization" means any and all activities directed to importing, marketing, promoting, advertising, distributing, storing, offering for sale, using and selling a Product, including, without limitation, the distribution of promotional samples to targeted prescribers (to the extent applicable), in the Territory, and conducting Phase IV Studies of Product. When used as a verb, "Commercialize" means to engage in Commercialization.

        1.9    "Contract Year" means (a) with respect to the first Contract Year, the period beginning on the Effective Date and ending on December 31, 2008 (the "First Contract Year"), (b) with respect to each subsequent Contract Year other than the last Contract Year, the one (1) year period beginning on the day following the end of the First Contract Year and each succeeding one (1) year period thereafter, and (c) with respect to the last Contract Year, the period beginning on January 1 of such last Contract Year and ending on the date as of which this Agreement expires or is terminated (the "Last Contract Year"). Each Contract Year (other than the First Contract Year or the Last Contract Year) shall be divided into four (4) "Contract Quarters" comprised of successive three (3) month periods. In the First Contract Year, the first Contract Quarter shall end on the first day following the Effective Date that is the last day of a Contract Quarter, and in the Last Contract Year, the last Contract Quarter shall end upon expiration or termination of the Agreement.

        1.10  "Control" or "Controlled" means that a right is owned, licensed, or otherwise possessed by a Party with the right to license or sublicense.

        1.11  "Development" means the scientific, medical, technical, and clinical, regulatory and other activities necessary to obtain Regulatory Approval to Commercialize the Product in the Territory, including, without limitation, technical development, clinical development and the preparation, filing, prosecution and administration of INDs, and/or NDAs, in accordance with a Development Plan that has been agreed pursuant to the terms and conditions of this Agreement. When used as a verb, "Develop" means to engage in Development.

        1.12  "Development Costs" means for all studies or activities performed in accordance with Sepracor's Development Plan for any Product in the Territory, including the following: (a) all out-of-pocket costs and expenses incurred ( i.e.,  paid to Third Parties or accrued therefor) by Sepracor or any of its permitted designees, (b) the costs of internal personnel engaged in the performance of such studies or activities, and (c) the costs of clinical supplies for such studies or activities, which costs shall include (i) the clinical supply price, (ii) out-of-pocket costs and expenses incurred in purchasing comparator drug and in packaging comparator drug and/or such Product, as applicable, shipping clinical

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supplies to centers, or disposal of clinical supplies, and (iii) actual costs of packaging clinical samples and comparator drug, as applicable, if done by a Party.

        1.13  "Development Plan" means a plan designed by Sepracor to achieve the clinical Development of a specific Product or of a specific Improvement, as may be applicable, including, without limitation, (i) the budget and nature, number and schedule of Development activities, (ii) a time schedule for the implementation of the Development activities concerned, (iii) all such other issues as may reasonably have to be addressed under such Development Plan, as it may be amended by Sepracor from time to time in accordance with this Agreement.

        1.14  "Effective Date" means the date of the execution of this Agreement by both Parties.

        1.15  "FDA" means the U.S. Food and Drug Administration and any successor agency thereto.

        1.16  "First Commercial Sale" shall mean the first sale or other disposition for value of a Product, in a final dosage form packaged for the ultimate consumer, to an independent Third Party following applicable Regulatory Approval, by Sepracor, its Affiliates or permitted sublicensees.

        1.17  "Formulation" or "Formulations" mean the Development of stable and acceptable preparations, suspensions, or other chemical mixtures of ingredient, as well as associated studies and analysis of properties, [**], required to develop INDs for a product, including the Product, all prepared according to Good Laboratory Practice Standards ("GLP") and other relevant laboratory practice standards.

        1.18  "GAAP" means the "United States Generally Accepted Accounting Principles" as determined by the US Financial Accounting Standards Board (FASB).

        1.19  "Gross Sales" means, with respect to any applicable period and any Product, the gross amounts invoiced by Sepracor or an Affiliate to unrelated Third Parties for sales of such Product.

        1.20  "Improvement" means any Know-How, including, without limitation, findings, discoveries, inventions, additions, modifications, formulations or changes, whether patentable or not, made and Controlled by either Party during the Term insofar as such Improvement relates to a Product.

        1.21  "IND" means an investigational new drug application submitted to the FDA in respect of a new drug.

        1.22  "Know-How" means all scientific, medical, technical, clinical, regulatory, marketing and other information relating to a Product that is Controlled by a Party hereto, and that is in existence as of the Effective Date or comes into existence during the Term.

        1.23  "NDA" means (a) a new drug application submitted to the FDA pursuant to 21 U.S.C. Section 355(b)(1), or any successor application or procedure and (b) all supplements and amendments, including supplemental new drug applications that may be filed with respect to the foregoing (each, a "SNDA").

        1.24  "Net Sales" means, with respect to any period, the Gross Sales of the Product, less items recognized under GAAP, including, but not limited to, the following deductions to the extent included in the gross invoiced sales price for the Product or otherwise directly paid or incurred by Sepracor, its permitted Affiliates and its permitted sublicensees with respect to the sale of the Product and not otherwise recoverable by the paying party: (a) trade, quantity, or cash discounts, chargebacks, returns, allowances or rebates and actually allowed, given or accrued in the ordinary course of trading (including, but not limited to, cash, governmental and managed care rebates, hospital or other buying group chargebacks); (b) adjustments, rejections, recalls and returns to the extent made in the ordinary course of trading, to the extent the customer has been credited the original sales price or a portion thereof; (c) sales, excise, turnover, inventory, value-added, customs duties and similar taxes and governmental charges assessed on the sale of the Product; and (d) the portion of any management fees

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paid during the relevant time period to group purchasing organizations that relate specifically to the sale of such Product to such organizations, (e) any royalties payable by Sepracor to Third Parties in order to enable Sepracor to commercialize the Product in the Territory, (f) service fees paid or allowances conceded to wholesalers pursuant to distribution services agreements or similar contracts by and between Sepracor and wholesalers for logistic and other services such as, without limitation, stock-keeping.

        Sales, transfers or dispositions of the Product for charitable, promotional (including samples), pre-clinical, clinical, or regulatory purposes with respect to which no consideration is received by Sepracor or its Affiliates, shall be excluded from Net Sales, as shall sales or transfers of the Product among a Party and its Affiliates.

        Upon any sale or other disposal of any Product for any consideration other than an exclusively monetary consideration on bona fide arm's length terms then, for the purposes of calculating the Net Sales under this Agreement, such Product shall be deemed to be sold exclusively for money at the fair market price generally achieved for such Product in the Territory.

        Any discounts or allowances made by Sepracor outside the ordinary course of trading shall not be accounted for in determining Sepracor's Net Sales. For clarity and without limitation, this shall apply to direct and indirect discounts and allowances to customers regarding the Product associated with product bundling and selling the Product in combination with other Sepracor products (so called "package deals"). Upon any sale or other disposal of any Product for any consideration outside the ordinary course of trading, for the purposes of calculating the Net Sales under this Agreement, the Product shall be deemed to be sold exclusively for money at the fair market price generally achieved in bona fide arm's length trading for such Product in the Territory when such Product is sold alone, and not with or in combination with products other than the Product.

        1.25  "Patents" shall mean all existing patents and patent applications and all patent applications hereafter filed, including, without limitation, any continuations, continuations-in-part, divisions, reissues, reexaminations, utility models, provisionals or substitute applications, any patent issued with respect to any such patent applications, any reissue, reexamination, renewal, amendment or extension (including any supplementary protection certificate and any patent term extension) of any such patent, and any confirmation patent or registration patent or patent of addition based on any such patent, and all foreign counterparts of any of the foregoing.

        1.26  "Person" means any individual, corporation, partnership, association, joint-stock company, trust, unincorporated organization or government or political subdivision thereof.

        1.27  "Product" means Arrow's levalbuterol/ipratropium combination inhalation solution product in current and all future formulations and delivery modes, any Additional Product and any Improvement to the foregoing.

        1.28  "Regulatory Approval" shall mean that all approvals, price approvals or approvals for reimbursements, product and/or establishment licenses, registrations, permits, or authorizations of any federal, state or local regulatory agency, department, bureau or other governmental entity or Regulatory Authority, necessary for the manufacture, packaging, distribution, use, storage, importation, export, transport, marketing and sale of the Product for therapeutic use in humans in a country of the Territory have been obtained.

        1.29  "Regulatory Authority" shall mean any national, supra-national, regional, state or local regulatory agency, department, bureau or other governmental entity in the Territory responsible for issuing any technical, medical and scientific licenses, registrations, authorizations and/or approvals of the Product including any marketing authorizations based upon such approvals and pricing, third party reimbursement or labeling approvals that are necessary for the manufacture, distribution, use, storage, importation, export, transport and sale of a Product in a country of the Territory.

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        1.30  "Territory" shall mean the world.

        1.31  "Third Party" shall mean any Person other than the Parties and their Affiliates.

        1.32  "Trademark" shall mean any trademark used in connection with the Commercialization of a Product.

Article 2    Grant of Rights

        2.1     Exclusive License Grant.     During the Term, Arrow grants to Sepracor the exclusive right and license under the Arrow Patents and Arrow Know-How to Develop, have Developed, market, have marketed, use, have used, Commercialize, have Commercialized, distribute, have distributed, offer for sale, sell and have sold the Product in the Territory and to package, distribute, sell, market and promote the Product in and throughout the Territory, including the right to grant sub-licenses, subject to all of the terms and conditions of this Agreement. Such right and license in the Territory shall be exclusive even as to Arrow, except to the extent necessary to enable Arrow to perform any obligations or activities that Arrow is required or permitted to perform under this Agreement. The license is subject to Arrow's right of manufacture in Section 10.1.

        2.2     Further Assurances.     Arrow hereby agrees that it will do all such acts and execute all such further documents, conveyances, deeds, assignments, transfers, licenses and the like, and will cause the doing of all such acts on its own behalf and by each of its Affiliates and will cause the execution of all such further documents on its own behalf and by each of its Affiliates as are within its power as Sepracor may from time to time reasonably request be done and/or executed in order to consummate the transactions contemplated under this Agreement, as may be necessary or desirable to effect the purposes of this Agreement, or as may be appropriate to more effectively carry out and vest in Sepracor the grant of rights and licenses intended to be made under this Agreement, all at the sole cost and expense of Arrow.

Article 3    Development

        3.1     Development of the Product.     Sepracor shall be responsible for all aspects of the Development of the Product. Arrow's obligation with respect to Development of the Product shall be limited to making reasonable efforts upon Sepracor's request to provide and facilitate the transfer of Arrow Technology, including data, and enabling technology with respect to the Product.

        3.2     Access to Data and Information.     Sepracor shall own and have the right to access free of charge all information and data generated in all Development activities and all pre-clinical, clinical and marketing studies with respect to the Product.

        3.3     Cooperation regarding Regulatory Approvals.     The Parties shall consult and cooperate in the preparation of each submission for Regulatory Approvals for the Product in the Territory and in obtaining and maintaining Regulatory Approvals within the Territory, provided however, that, Sepracor shall be solely responsible for interactions with Regulatory Authorities throughout the Territory.

        3.4     Clinical Trial Data.     All data (including all pre-clinical, clinical and/or marketing data) developed by either or both of the Parties during the Term and relating to a Product shall be and remain the property of Sepracor.

        3.5     Clinical Studies.     Sepracor shall have the exclusive right to conduct any clinical trials or studies, prior to or after relevant Regulatory Approval, relating to the Product in the Territory.

        3.6     Funding of Product Development.     Sepracor shall be responsible for all Development Costs. Further Sepracor shall [**] Arrow in connection with [**] specified in Section [**]. Such [**] shall be [**], which shall be delivered by Arrow within [**], in which case such [**].

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Article 4    Commercialization

        4.1     Commercialization in General.     Sepracor shall have the exclusive right, even as to Arrow, to Commercialize the Product in the Territory. Sepracor shall use its commercially reasonable efforts to Commercialize the Product as soon as commercially reasonable following receipt of Regulatory Approval.

        4.2     Compliance and Assistance.     Arrow shall provide Sepracor with reasonable assistance, in a timely manner, to support Sepracor's requirements in complying with Regulatory Authorities' requests or orders, including voluntary or involuntary recalls of a Product, in the Territory insofar as the Regulatory Authority request or order reasonably relates to work performed by Arrow. The foregoing shall occur [**].

        4.3     Promotional Materials.     Arrow shall provide Sepracor with reasonable assistance, in a timely manner, to support Sepracor's activities in Commercializing the Product in the Territory. The foregoing shall occur [**].

Article 5    Governance and Oversight

        5.1     Steering Committee.     The Parties shall establish a joint steering committee (the "SC") consisting of representatives of senior management from each Party, each such representative having the authority to act on behalf of the Party such individual represents, the exact number of which shall be as the Parties may agree, from time to time. Initially, the SC shall consist of five (5) individuals, three (3) of whom shall be nominated by Sepracor, and two (2) of whom shall be nominated by Arrow. Any member of the SC may designate a substitute to attend and perform the functions of that member at any meeting of the SC. Each Party may, with the consent of the other Party, such consent not to be unreasonably withheld or delayed, invite non-member, non-voting representatives of such Party to attend meetings of the SC. Sepracor shall designate the chairperson and the secretary of the SC. The SC shall perform the following responsibilities:

        (a)   Oversee the overall strategy for the Development of the Product in the Territory.

        (b)   Facilitate communication between the two Parties and provide a forum to review any Development, regulatory, manufacturing and Commercialization matters pertaining to the Product.

        (c)   Provide a forum for communication of Sepracor and Arrow's activities in the Territory with respect to the Product.

        (d)   Undertake a regular and frequent review and comparison of the status of the Development Plan, including, without limitation the applicable timelines, and provide direction to the conduct of the Development Plan, as necessary.

        (e)   Review and approve the proposed Development Plan and any fundamental amendments or modifications thereto.

        (f)    Perform such other responsibilities as may be assigned to the SC pursuant to this Agreement or as may be mutually agreed upon by the Parties from time to time.

        5.2     Meetings.     All SC meetings shall be as often as the members may determine, but in any event SC meetings shall occur not less than four times per calendar year. Such meetings may be held in person, or any means of telecommunications or video conference, as the members deem necessary or appropriate; provided, however, that at least one SC meeting per year shall be held in person and the location of such in person meeting shall alternate between Sepracor's and Arrow's offices.

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        5.3     Decision-making of Steering Committee.     

        (a)   The SC may make decisions with respect to any subject matter that is subject to the SC's decision-making authority or within the purview of any other subcommittee organized as part of this Agreement. Except as expressly provided in this Agreement, all decisions of the SC shall be made by majority vote of the members with at least 4 members casting a vote. The SC shall use reasonable efforts to resolve any disputes concerning the matters within its roles and functions or otherwise referred to it.

        (b)   If, with respect to a matter that is subject to the SC's decision-making or oversight authority, the SC cannot reach consensus within fifteen (15) Business Days after it has met and attempted to reach such consensus or the Parties cannot reach consensus on whether the SC has decision-making authority regarding a matter within fifteen (15) Business Days after such matter was first raised by either Party, the dispute in question shall be resolved by the chairperson of the SC.

        (c)   Notwithstanding the foregoing, Sepracor shall not exercise its right to finally resolve a dispute in accordance with this Section 5.3 in a manner that excuses Sepracor from any of its obligations specifically enumerated under this Agreement.

        (d)   Notwithstanding this Section 5.3, any dispute regarding the interpretation of this Agreement or any alleged breach of this Agreement will be resolved in accordance with the terms of Article 15.

        5.4     Minutes.     Minutes for each of the SC meetings shall be drafted by the secretary of the meeting and sent to the chairperson for comment promptly after each such meeting (but in no event more than thirty (30) days). All actions noted in the minutes are to be reviewed and approved at subsequent meetings of the SC; provided, that if the Parties cannot agree as to the content of the minutes, such minutes will be finalized to reflect such disagreement.

        5.5     Expenses.     Each Party shall bear all its own costs, including expenses incurred by the members nominated by it in connection with their activities as members of the SC.

Article 6    Regulatory Affairs

        6.1     Title to and Ownership of Regulatory Approvals.     Sepracor or its designee shall be the owner of all Regulatory Approvals for the Product in the Territory. Arrow agrees to have transferred any Regulatory Approvals relating to any Product owned by Arrow or its Affiliates to Sepracor or its designee.

        6.2     Responsibility for Regulatory Approval.     In accordance with the terms and subject to the conditions herein specified, Sepracor shall be solely responsible for obtaining all Regulatory Approvals for the Product in the Territory. All expenses incurred by Sepracor in obtaining any such Regulatory Approvals shall be borne by Sepracor. Sepracor shall use its commercially reasonable efforts to obtain Regulatory Approvals in a timely and expedient manner.

        6.3     Maintaining Regulatory Approval.     Sepracor shall maintain each Regulatory Approval for a Product in the Territory in its own name. All expenses incurred by Sepracor in maintaining such Regulatory Approvals shall be borne by Sepracor.

        6.4     Arrow Cooperation.     Arrow shall use commercially reasonable efforts upon timely request of Sepracor: (i) to assist Sepracor in responding to any queries from a Regulatory Authority, (ii) to provide Sepracor with all necessary documents, data and information which Arrow has in its possession or control that will assist Sepracor in preparing and maintaining the Regulatory Approvals in the Territory, and (iii) to provide, at least [**] before a response is due to any Regulatory Authority, all the

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necessary documents, data, and information that Arrow has in its possession or control that will assist Sepracor in preparing for such response.

        6.5     Inspections, Inquiries and Complaints.     

        (a)   Arrow shall advise Sepracor of any Regulatory Authority visit to, or written or oral inquiry about, any facilities or procedures relating to the Development of a Product promptly, but in no event later than [**] after notice of such visit or inquiry. Arrow shall, within [**] of receipt or submission, furnish to Sepracor any report or correspondence issued by or provided to the Regulatory Authority in connection with such visit or inquiry. Sepracor shall have the right to be present during any such visits (provided that Arrow has sufficient advance notice) and shall be apprised of all correspondence with any Regulatory Authority.

        (b)   Arrow shall advise Sepracor within [**] of becoming aware of any material investigation, complaint, claim or potential claim, whether from a Regulatory Authority or not, about a Product relating to a safety issue.

        6.6     Coordination.     The Parties shall establish procedures to ensure that the Parties exchange on a timely basis all necessary information to enable Sepracor and Arrow to comply with all regulatory obligations relating to a Product on a global basis, including without limitation filing updates, pharmacovigilance filings and investigator notifications.

Article 7    Intellectual Property

        7.1     Ownership of Intellectual Property.     Sepracor shall have and retain sole and exclusive right, title and interest in and to all inventions, discoveries, writings, trade secrets, know-how, methods, practices, procedures, engineering information, designs, devices, improvements, manufacturing information and other technology, whether or not patentable or copyrightable, and any patent applications, patents, or copyrights based thereon ("Inventions") that are made, discovered, conceived, reduced to practice or generated by Sepracor (or its employees or representatives) or jointly by Sepracor and Arrow (or their employees or representatives) that relate directly to a Product or the active ingredients in a Product. Arrow shall have and retain sole an exclusive right, title and interest in and to all Inventions made solely by Arrow (or its employees or representatives) that relate directly to a Product or the active ingredients in the Product. With respect to any Inventions not directly relating to a Product or the active ing