AMENDED AND RESTATED DEVELOPMENT AND LICENSE AGREEMENT

Exhibit 10.1

*** CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

SCHEDULES

AMENDED AND RESTATED DEVELOPMENT AND LICENSE AGREEMENT

This AMENDED AND RESTATED DEVELOPMENT AND LICENSE AGREEMENT (this " Agreement ") dated the 11th day of December, 2008 is by and between BioSpecifics Technologies Corp., a corporation organized and existing under the laws of Delaware and having its principal office at 35 Wilbur Street, Lynbrook, New York 11563, and its Affiliates (" BTC "), and Auxilium Pharmaceuticals, Inc., a corporation organized and existing under the laws of the State of Delaware and having its principal office 40 Valley Stream Parkway, Malvern, PA 19355 (" Auxilium ").  BTC and Auxilium shall sometimes be referred to herein individually as a " Party " and collectively as " Parties ."  

INTRODUCTION

WHEREAS, BTC controls certain BTC Patents and BTC Know-How (each as defined below) related to the Enzyme and the Product (each as defined below), and has the right to grant certain rights and licenses thereunder as set forth herein, and

WHEREAS, Auxilium has certain expertise in the development and commercialization of pharmaceutical products, and Auxilium wishes to obtain certain licenses and options to develop and commercialize the Product for certain therapeutic uses in humans, and

WHEREAS, BTC wishes to convey such licenses to Auxilium, and

WHEREAS, BTC and Auxilium previously entered into that certain Development and License Agreement dated June 3, 2004, as amended by that certain Amendment No. 1 to Development and License Agreement dated May 10, 2005 and that certain letter agreement dated December 15, 2005 (the " Original Agreement ") involving the licensing of intellectual property by BTC to Auxilium, and

WHEREAS, BTC and Auxilium now desire to amend and restate the Original Agreement in its entirety and replace the Original Agreement with this Agreement.

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

ARTICLE 1
DEFINITIONS

For purposes of this Agreement, the following initially capitalized terms in this Agreement, whether used in the singular or plural, shall have the following meanings:

1.1

" Additional Indication " shall mean any Indication for a Product outside of the Field.  

1.2

" Additional Indication Option " has the meaning set forth in Section 2.2(b).

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1.3

" Adverse Drug Experience " shall mean any of the following as such terms are defined at either 21 C.F.R. § 312.32 or 21 C.F.R. § 314.80: an "adverse drug experience," a "life-threatening adverse drug experience," a "serious adverse drug experience," or an "unexpected adverse drug experience" and the foreign counterparts thereof.

1.4

" Affiliate " shall mean any corporation, company, partnership, joint venture or firm which controls, is controlled by, or is under common control with a specified person or entity.  For purposes of this Section 1.4, "control" shall be presumed to exist if one of the following conditions is met:  (a) in the case of corporate entities, direct or indirect ownership of at least fifty percent (50%) of the stock or shares having the right to vote for the election of directors, and (b) in the case of non-corporate entities, direct or indirect ownership of at least fifty percent (50%) of the equity interest with the power to direct the management and policies of such non-corporate entities.  The Parties acknowledge that in the case of certain entities organized under the laws of certain countries outside of the United States, the maximum percentage ownership permitted by law for a foreign investor may be less than fifty percent (50%), and that in such cases such lower percentage shall be substituted in the preceding sentence, provided that such foreign investor has the power to direct the management and policies of such entity.  For purposes of clarity, Advance BioFactures Corporation of New York is an Affiliate of BTC and each of Auxilium International Holdings, LLC and Auxilium US Holdings, Inc. is an Affiliate of Auxilium and such Affiliates are parties to this Agreement.  Advance BioFactures of Curacao, NV was an Affiliate of BTC on June 3, 2004 and May 10, 2005 and was a party to the Original Agreement.

1.5

" Amendment Effective Date " has the meaning set forth in Section 13.1.

1.6

" Auxilium Remaining Indication " shall mean an Additional Indication for a Product that Auxilium believes has a reasonable probability of obtaining Regulatory Approval and achieving commercial success, but for which BTC does not wish to undertake Stage I Development.

1.7

" Auxilium Territory " shall mean the Territory excluding the Partner Territory.

1.8

" BTC Know-How " shall mean any proprietary information or materials related to the Manufacture, preparation, formulation, use or development of the Enzyme or the Product Controlled by BTC during the Term and shall include formulations, processes, techniques, formulas, biological, chemical, assay control and manufacturing, technical, pre-clinical, clinical or other data, methods, know-how, and trade secrets.  

1.9

" BTC Patents " shall mean those Patents Controlled by BTC with at least one claim directed to the Enzyme or the Product (or processes, improvements, uses and intermediates for the foregoing) including those listed on Schedule 1.9 attached hereto as it may be amended from time to time.  

1.10

" BTC Product " shall mean any pharmaceutical product that includes Enzyme as an active ingredient and is under development for an Indication (or is indicated for use) outside the Field.

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1.11

" Business Day " shall mean any day on which banking institutions in New York, New York are open for business.

1.12

" Clinical Trials " shall mean tests and studies in human subjects or patients that are required to obtain, maintain, or sustain Regulatory Approval in a country in the Territory.

1.13

" Commercialization " or " Commercialize " shall mean activities directed to marketing, promoting, co-promoting, distributing, importing, exporting, offering for sale and selling the Product.  When used as a verb, "Commercialize" means to engage in Commercialization.

1.14

" Commercially Reasonable Efforts " means, with respect to a Party, the efforts and resources which would be used by that Party relating to a certain activity or activities, consistent with its normal business practices, which are consistent with the general level of effort and resources  in the pharmaceutical industry for a company similar in size and scope.

1.15

" Competing Product " shall mean  a product that contains Enzyme and is sold in a country by a Person (other than Auxilium, its Affiliate or Sublicensee) in an Indication for which Auxilium, its Affiliate or Sublicensee is marketing a Product in such country.

1.16

" Confidential Information " has the meaning set forth in Section 10.1

1.17

" Controlled " or " Controls ", when used in reference to intellectual property, shall mean the legal authority or right of a Party hereto (or any of its Affiliates) to grant a license or sublicense of intellectual property rights to another Party, or to otherwise disclose proprietary or trade secret information to such other Party, without breaching the terms of any agreement with a Third Party, infringing upon the intellectual property rights of a Third Party, or misappropriating the proprietary or trade secret information of a Third Party.

1.18

" Cost of Goods " shall mean the total cost of Product in Final Packaging, including, but not limited to, the sum of the following actual costs: (i) manufacturing, shipping and storage of Enzyme; (ii) manufacturing, shipping and storage of Product, prior to sale to a Third Party; (iii) commercial packaging and labeling; (iv) routine quality compliance and quality assurance programs; and (v) customs or excise taxes, import duties, sales taxes and other taxes or duties (other than those taxes resulting from sales to a Third Party of Product in finished packaged and labeled form).  In the event that BTC manufactures Enzyme or Products, Cost of Goods shall be calculated in accordance with Schedule 1.18 .

1.19

" Develop " or " Development " shall mean Stage I Development and Stage II Development.  When used as a verb, " Developing " means to engage in Development.  For purposes of clarity, in no event shall Development include Manufacture.

1.20

" Development Costs " shall mean costs associated with Development activities.

1.21

" Effective Date " shall mean June 3, 2004.

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1.22

" EMEA " shall mean the European Medicines Evaluation Agency or any successor agency thereto.

1.23

" Enzyme " shall mean the purified form of the enzyme currently identified by BTC as Collagenase ABC, more particularly described on Schedule 1.23 , and any variants or derivatives thereof.

1.24

" European Union " shall mean the countries of the European Union, as it is constituted as of the Effective Date and as it may be expanded from time to time.

1.25

" Exercised Indication " has the meaning set forth in Section 2.2(c).

1.26

" Exercised Indication Date " has the meaning set forth in Section 2.2(c).

1.27

" Exercise Period " has the meaning set forth in Section 2.2(c).

1.28

" FDA " shall mean the U.S. Food and Drug Administration or its successor agency.

1.29

" Field " shall mean, subject to expansion pursuant to Section 2.2, the prevention or treatment of Dupuytren’s Disease, Peyronie’s Disease and Adhesive Capsulitis (otherwise known as "Frozen Shoulder").  

1.30

" Final Packaging " means the labeling and packaging to be used in connection with the Product labeled for use in the Field in the Territory, including the packaging of package inserts and components reasonably necessary for sale of the finished Product to the ultimate consumer.

1.31

" Indemnified Party " has the meaning set forth in Section12.3.

1.32

" Indemnifying Party " has the meaning set forth in Section 12.3.

1.33

" Indication " shall mean a pharmaceutical application for the Product.

1.34

" Infringement Claim " has the meaning set forth in Section 8.2(a).

1.35

" Law " shall mean any applicable statute, law, ordinance, regulation, order, or rule of any federal, state, local, foreign, or other governmental agency or body or of any other type of regulatory body (including common law) or securities exchange, including those covering pharmaceutical sales, environmental, pollution, energy, safety, health, transportation, bribery, record-keeping, zoning, antidiscrimination, antitrust, wage and hour, and price and wage control matters.

1.36

" Licensed Technology " shall mean the BTC Patents and the BTC Know-How.

1.37

" Loss " has the meaning set forth in Section 12.1.

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1.38

" Major Market Country " shall mean [***] .  

1.39

" MAA " shall mean an application seeking Regulatory Approval of the Regulatory Authority in the European Union to market and sell a Product in the Field in the European Union.

1.40

" MAA Acceptance " shall mean the written notification by the applicable Regulatory Authority that the MAA has met all the criteria for filing acceptance.

1.41

" Manufacture " or " Manufacturing " shall mean manufacturing, filling, processing, testing, engineering, designing, redesigning, packaging, storing, quality control, quality assurance, releasing, disposing, handling, shipping, and all other activities undertaken or required to be undertaken in order to manufacture and supply the Product in its Final Packaging and related devices and apparatus for administration thereof, in the case of commercial supplies, or packaged in accordance with Laws, in the case of clinical supplies.

1.42

" NDA " or " New Drug Application " shall mean a new drug application filed with the FDA pursuant to 21 C.F.R. §314, seeking permission to market the Product for a particular Indication in the Field in interstate commerce in the United States.

1.43

" NDA Filing Acceptance " shall mean the written notification by the FDA that the NDA has met all the criteria for filing acceptance.

1.44

" Net Sales " shall mean the gross amount invoiced by Auxilium and its Affiliates or Sublicensees on account of sales of the Product in Final Packaging to Third Parties in the Territory, less the total of: (a) trade, cash or quantity discounts not already reflected in the amount invoiced; (b) excise, sales and other consumption taxes and customs duties to the extent included in the invoice price; (c) freight, insurance and other transportation charges to the extent specifically included in the invoice price; (d) returns or retroactive price reductions; and (e) compulsory payments and rebates directly related to the sale of the Product accrued, paid or deducted pursuant to governmental regulations.

1.45

" Orphan Drug Designation " shall mean the special designation of Product by FDA’s Orphan Product Division which provides the Product with the opportunity to obtain additional market exclusivity from the date the drug receives FDA approval and also possible tax and regulatory approval benefits.  The term "Orphan Drug Designation" shall include any foreign counterparts of the foregoing.

1.46

" Partner " shall mean Pfizer, Inc., a Delaware corporation, and its Affiliates.

1.47

" Partner Territory " shall mean those countries in the Territory to which Auxilium has granted Partner rights hereunder and which are set forth on Schedule 1.47 as the same may be amended by mutual agreement of BTC and Auxilium.

1.48

" Patents " shall mean any patents or patent applications and any continuations, continuations-in-part, divisions, provisionals, substitutions, patents of addition, reissues, reexamination, renewals or extensions thereof (including any supplemental patent certificates) and any confirmation patent or registration patent and all foreign counterparts of any of the foregoing.

*** OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

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1.49

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

1.50

" Phase II Clinical Trials " shall mean a Clinical Trial for the Product on a number of patients, no fewer than the number required to allow for the detection of statistical differences between the control and treated patients, for the purposes of determining dose and evaluating safety and efficacy in the proposed therapeutic indication, conducted in accordance with current good clinical practices and in accordance with a protocol that has been reviewed by the FDA and reflects any comments or concerns raised by the same.

1.51

" Phase III Clinical Trials " shall mean a Clinical Trial for the Product on sufficient numbers of patients to generate safety and efficacy data to support Regulatory Approval in the proposed therapeutic indication, conducted in accordance with current good clinical practices and in accordance with a protocol that has been reviewed by the FDA and reflects any comments or concerns raised by the same.

1.52

" Product " shall mean pharmaceutical product containing Enzyme as an active ingredient and any reformulation, improvement, enhancement, combination, refinement, or modification thereof; provided however, Product shall specifically exclude dermal formulations labeled for topical administration.

1.53

" Product Data " shall mean the physical embodiment, to the extent available of: (a) the know-how, including relevant laboratory notebook information, screening data and synthesis schemes, including descriptions in any form, data and other information, and (b) all other data including Regulatory Data and any other pre-clinical and clinical data and information, technical, chemical, safety and scientific data, information and know-how, obtained or generated in connection with Development of the Product in the Field.

1.54

" Product Details " shall mean a face-to-face meeting, in an individual or group practice setting, between a healthcare professional with prescribing authority who is a target prescriber of a Product in the Field and a professional representative of the applicable Party during which the key attributes of a Product are verbally presented to such healthcare professional. When used as a verb, "detail" or "detailing" shall mean to engage in a Detail.

1.55

" Regulatory Approval " shall mean, with respect to a country or group of countries in the Territory, all authorizations by the appropriate governmental entity or entities necessary for commercial sale of the Product in the Field for a particular Indication in that country or group of countries including, where applicable, approval of labeling, price, reimbursement and manufacturing.

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1.56

" Regulatory Authority " shall mean the FDA or any foreign counterpart or additional governmental or regulatory agencies in the Territory responsible for applicable Regulatory Approvals.

1.57

" Regulatory Data " shall mean any and all research data, pharmacology data, chemistry, manufacturing, and control data, preclinical data, clinical data or all other documentation submitted, or required to be submitted, to Regulatory Authorities in association with regulatory filings for the Product in the Field (including any Drug Master Files (DMFs), Chemistry, Manufacturing and Control ("CMC") data, or similar documentation).

1.58

" Remaining Indication " shall mean an Additional Indication for which Auxilium has not exercised an Additional Indication Option within the Exercise Period.

1.59

" Stage I Development " shall mean pre-clinical and clinical drug development activities reasonably necessary to completing all development activities up to and including the completion of Phase II Clinical Trials for the Product in the Field, including pre-clinical studies, test method development, statistical analysis, Clinical Trials, regulatory affairs, and activities directed to seeking Regulatory Approvals.

1.60

" Stage I Development Costs " shall mean costs associated with Stage I Development activities.

1.61

" Stage II Development " shall mean non-clinical and clinical drug development activities reasonably necessary to the development and submission of Regulatory Data to a Regulatory Authority for the purpose of achieving Regulatory Approval, including non-clinical studies, test method development, statistical analysis, Clinical Trials, regulatory affairs, and activities directed to seeking Regulatory Approvals.

1.62

" Stage II Development Costs " shall mean costs associated with Stage II Development activities.

1.63

" Standard Terms " has the meaning set forth in Section 6.4(d).

1.64

" Sublicense Income " shall mean (a) the upfront payment, if any, actually received from a Sublicensee by Auxilium upon execution of an agreement with such Sublicensee, and (b) any milestone payments actually received from a Sublicensee by Auxilium in consideration for the grant of a sublicense to such Sublicensee under the Licensed Technology in the Field; provided, however, that Sublicense Income shall not include any such consideration received by Auxilium from any such Sublicensee in return for, as payment for or otherwise in respect of: (i) equity or debt of Auxilium (provided, however, that the exclusion contained in this sub-clause (i) shall not apply to transactions between Auxilium and its Affiliates), (ii) the manufacture or supply of ingredients or products, (iii) the performance of services (including research and development services other than screening services performed on behalf of a Sublicensee) or other similar payments, (iv) reimbursement of Auxilium’s out of pocket costs and expenses, including patent expenses, or (v) the sale of Auxilium in whole or in part.   For the sake of clarity, Sublicense Income will not be reduced by, and Auxilium will be deemed to have actually received, any amount(s) for which a Sublicensee is entitled to a deduction or setoff under the agreement between Auxilium and the Sublicensee and for which BTC is not responsible under the terms of this Agreement.

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1.65

" Sublicensee " shall mean a Person to whom Auxilium grants any right or license to use the Licensed Technology to make, use or sell the Product in the Field in the Territory, including the Partner.

1.66

" Supply Agreement " has the meaning set forth in Section 6.4.

1.67

" Term " has the meaning set forth in Section 11.1(a).

1.68

" Territory " shall mean all the countries and territories of the world.

1.69

" Third Party " shall mean any Person or other entity other than Auxilium, BTC or their respective Affiliates.

1.70

" Vial " shall mean a single dose unit of Product.  

ARTICLE 2
LICENSE AND OPTION

2.1

License Grant to Auxilium .

(a)

Subject to the terms and conditions of this Agreement, on the Effective Date, BTC hereby grants to Auxilium an exclusive license under the Licensed Technology to research, Develop, use, Commercialize, market, sell and distribute the Product for the Field in the Territory.  

(b)

Subject to the terms and condition of this Agreement, BTC hereby grants to Auxilium a non-exclusive right and license under the Licensed Technology to Manufacture or have Manufactured the Product for the Field in the Territory.  Notwithstanding the foregoing provisions of this Section 2.1(b), Auxilium shall not exercise its license pursuant to this Section 2.1(b) to Manufacture the Product except as permitted by, and solely for the purposes set forth in, Article 6.

(c)

The licenses granted under Sections 2.1(a) and 2.2(b) shall include the right to grant sublicenses (and in the case of Section 2.1(a), distribution rights); provided, however, that all such sublicenses shall contain terms and conditions which are consistent with the terms and conditions contained in this Agreement.  

2.2

Option to License Additional Indications .

(a)

Development of Additional Indications for Products .  The Parties shall cooperate in good faith in generating ideas and concepts for Additional Indications for Products.  

(b)

Option Grant .  Subject to the terms and conditions of this Agreement, BTC hereby grants to Auxilium an exclusive option to an exclusive license to Products in the Territory for each Additional Indication on the same terms and conditions as provided for Indications in the Field (each, an "Additional Indication Option").

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(c)

Exercise Period; Exercise of Option .  The period during which Auxilium may exercise an Additional Indication Option (the "Exercise Period") shall commence on the date on which BTC submits a Phase II Clinical Trial report to Auxilium for the Product for such Additional Indication and ends one hundred and twenty (120) days thereafter.  BTC shall provide Auxilium with a copy of a Phase II Clinical Trial report and, any additional data or results in its control.  Auxilium may exercise the Additional Indication Option at any time during the Exercise Period by delivering to BTC a written notice of exercise with regard to such Additional Indication (each, an "Exercised Indication") that  sets forth the effective date of the exercise (the "Exercised Indication Date").  Upon receipt, BTC shall counter-sign the exercise notice which shall then be appended to and incorporated by reference into this Agreement effective the Exercised Indication Date.  

(d)

License Grant Upon Exercise of Option .  Effective on the Exercised Indication Date, the Field definition shall be amended and expanded to include the relevant Exercised Indication.  

(e)

Auxilium Remaining Indications .  Auxilium shall have the right to Develop and Commercialize Auxilium Remaining Indications at its sole cost and expense.  Upon notification to BTC of Auxilium’s intent to Develop and Commercialize an Auxilium Remaining Indication, the Field definition shall be amended and expanded to include such Auxilium Remaining Indication.

2.3

Remaining Indications .  BTC may offer Third Parties the right under the Licensed Technology to research, Develop, use, Commercialize, market, sell and distribute the Product for any Remaining Indication in the Auxilium Territory (the "Remaining Indication Rights"), provided that, prior to executing a definitive agreement with a Third Party for one or more Remaining Indications, BTC must (a) provide Auxilium with a written summary of the material terms of the proposed agreement (the "Offer Terms"), and (b) grant Auxilium an option, exercisable for seventy-five (75) days after Auxilium’s receipt of the written summary, to agree to equivalent terms, in which case the Parties shall negotiate in good faith an exclusive license agreement on such terms as promptly as possible thereafter.  In the event that Auxilium does not exercise an option to license a Remaining Indication within such seventy-five (75) day period, the Remaining Indication Rights may be licensed to such Third Party on terms and conditions no less favorable to BTC than the Offer Terms; provided, that [***] .

2.4

Transfer of BTC Know-How .  Within forty-five (45) days of the Effective Date, BTC shall, or shall cause its Affiliates to, transfer to Auxilium all material Product Data relating to Dupuytren’s Disease and Peyronie’s Diseases, including but not limited to preclinical, clinical data, clinical trial protocols, study data tabulations, reports, the right of cross-reference and permission to use in Auxilium Regulatory Data and regulatory filings, investigator-generated data granted by the owners of such data, etc., in reasonably satisfactory form. Promptly, but in no event more than thirty (30) days, after the Exercised Indications Date, BTC shall, or shall cause its Affiliates to, transfer to Auxilium all Product Data relating to such Exercised Indication, in reasonably satisfactory form.

*** OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

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2.5

Exclusivity .  During the Term and any extension thereof, and for two years thereafter, neither BTC nor any of its Affiliates shall, except as otherwise set forth and provided in this Agreement, (a) directly or indirectly develop, manufacture, market, sell, detail or promote any Competing Product or (b) encourage off-label use of a Competing Product that could affect labeled usage of the Product in the Field. In addition, in the event that BTC markets a BTC Product outside the Field within a country in the Territory where Auxilium is promoting the Product within the Field, BTC shall promote the BTC Product under a trademark different from the Auxilium Trademark, and will not knowingly market, ship, distribute, promote, sell or otherwise put into circulation the BTC Products within the Field in such country or in any other country within the Territory.  In the event that BTC enters into any agreements with its distributors or wholesalers for the BTC Products in a country in the Territory, it shall include in any and all said agreements appropriate provisions providing, to the extent not prohibited by Law, that the BTC Products must be distributed and sold solely outside the Field within such country in the Territory.  In the event that Auxilium enters into any agreements with its distributors or wholesalers for the Product in the Field, it shall include in any and all said agreements appropriate provisions providing, to the extent not prohibited by Law, that the Product must be distributed and sold solely within the Field within such country in the Territory.  

ARTICLE 3
PRODUCT DEVELOPMENT

3.1

Joint Development Committee .

(a)

Formation .  As soon as practicable after the execution of this Agreement, BTC and Auxilium will establish a Joint Development Committee (the "JDC") made up of two (2) representatives designated by each Party hereto to assist in coordinating scientific interactions and resolving potential disagreements between BTC and Auxilium during the course of the Development of Product.  The JDC Chair will be appointed by Auxilium from among the members of the committee designated by Auxilium.  Each of BTC and Auxilium shall have one vote on the JDC and, in the event of a deadlock with respect to any action, the vote of Auxilium, rendered after reasonable and open discussion among the members of the JDC, shall be final and controlling.  BTC shall not take any action with respect to Remaining Indications that would be detrimental to the Product or damaging to Auxilium.  Notwithstanding the foregoing, BTC will advise the JDC of all Development and Commercialization of Remaining Indications.  The JDC shall have the right to discuss and comment on such activities but shall not have the final vote with respect to such activities as they relate to Remaining Indications.  

(b)

Quarterly Meetings .  While a Product is under Development, the JDC shall meet formally at least quarterly, or with such other frequency, and at such time and location, as may be established by the JDC, for the following purposes, among others: (i)  to oversee and coordinate Development activities of the Parties for Products; (ii) to receive and review reports by the Parties as may be submitted to the JDC on a quarterly basis; and (iii) to discuss matters relating to Patents related to the Product, including but not limited to issues of inventorship and decisions relating to the filing, prosecution and maintenance of such Patents, provided however, when the JCC is established, the JCC and the JDC will coordinate responsibility on such matters.  Meetings of the JDC may be held in person or by teleconference, as may be determined by the JDC.

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3.2

Auxilium’s Stage II Development Activities .  

(a)

Dupuytren’s Disease, Peyronie’s Disease and Frozen Shoulder .  Auxilium has assumed all responsibility for (including financial responsibility), and has sole discretion over, all continuing Development of the Product for Dupuytren’s Disease, Peyronie’s Disease and Frozen Shoulder, including all Clinical Trials listed on Schedule 3.2 and underway as of June 3, 2004 in regards to Dupuytren’s Disease and Peyronie’s Disease, and as of December 15, 2005 in regards to Frozen Shoulder.  Auxilium shall not have financial responsibility for Development Costs or any other costs incurred in connection with Development related to Dupuytren’s Disease, Peyronie’s Disease and Frozen Shoulder prior to June 3, 2004 in regards to Dupuytren’s Disease and Peyronie’s Disease, and prior to December 15, 2005 in regards to Frozen Shoulder.  

(b)

Exercised Indications .  On each Exercised Indication Date, Auxilium shall be entitled to assume responsibility for, and have sole discretion over, all continuing Development activities for the Product for each such Exercised Indication.  Auxilium shall have one (1) year after the relevant Exercised Indication Date to initiate Stage II Development for such Exercised Indication, provided, however, that such obligations shall not be binding upon Auxilium to the extent that BTC fails to (i) deliver material Product Data to Auxilium in accordance with Section 2.4, or (ii) supply Auxilium with material amounts of clinical supplies of the Product for use in the Field in accordance with the delivery scheduled specified by Auxilium under the terms of Section 6.3.

(c)

Cooperation .  The Parties agree to cooperate with respect to the transfer of Development activities from BTC to Auxilium including transferring Clinical Trials and making introductions of Auxilium to clinical investigators and opinion leaders.

(d)

Stage II Development Costs .

(i)

Dupuytren’s Disease, Peyronie’s Disease and Frozen Shoulder .  Auxilium shall be responsible for all the Development Costs related to the Product for Dupuytren’s Disease, Peyronie’s Disease and Frozen Shoulder incurred by Auxilium after June 3, 2004 in regards to Dupuytren’s Disease and Peyronie’s Disease, and after December 15, 2005 in regards to Frozen Shoulder; provided, however, that BTC shall continue to be responsible for all Development Costs which are incurred prior to June 3, 2004 in regards to Dupuytren’s Disease and Peyronie’s Disease, and prior to December 15, 2005 in regards to Frozen Shoulder.

(ii)

Exercised Indications .  In the event Auxilium assumes responsibility for Stage II Development of the Product for an Exercised Indication, Auxilium shall be responsible for all Development Costs related to the Product for such Exercised Indication and incurred by Auxilium after the Exercised Indication Date; provided, however, that BTC shall continue to be responsible for all Development Costs which are incurred prior to the Exercised Indication Date.

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(iii)

Right of Set-Off .  To the extent that Auxilium pays any Stage I Development Costs resulting from additional Stage I Development that is requested or required by a Regulatory Authority after assuming responsibility for Development of the Product for any Indication, Auxilium shall be entitled to set-off the amount of such Stage I Development Costs against any amounts due to BTC pursuant to Section 7.1.

3.3

Data and Records .

(a)

Ownership of Data .  Auxilium shall retain ownership of all Product Data, information and results related to Development activities for the Product, provided, however, that Auxilium hereby grants to BTC a right of reference with respect to Remaining Indications to the Regulatory Data contained in Regulatory Approvals Controlled by Auxilium for the Product in the Field.   Notwithstanding the foregoing, (a) if Auxilium’s license rights to the Product terminate with respect to an Indication within the Field, Auxilium shall assign BTC its right, title and interest in and to the Product and Regulatory Data for that Indication, and (b) if Auxilium’s license rights to a Product hereunder terminate entirely, Auxilium shall, assign BTC its right, title and interest in and to all such Product and Regulatory Data; provided, however, that Auxilium may maintain a copy of such Regulatory Data for legal and archival purposes.

(b)

Development Records .  Each Party shall each maintain records in sufficient detail and in good scientific manner appropriate for patent purposes and as will properly reflect all work done and results achieved in the performance of Development activities hereunder (including all Regulatory Data in the form required to be maintained under any applicable governmental regulations).  Such records shall include books, records, reports, research notes, charts, graphs, comments, computations, analyses, recordings, photographs, computer programs and documentation thereof, computer information storage means, samples of materials and other graphic or written data generated in connection with the Development activities.  Subject to the terms and conditions of Article 10 below, each Party shall provide the other the right to inspect (no more than once a year) such records, to the extent Controlled by such Party, upon reasonable request and during normal business hours, and shall provide copies of all requested records, to the extent Controlled by such Party and reasonably required for the performance of the requesting Party’s obligations under this Agreement. For the avoidance of doubt, BTC shall have the right to inspect and receive copies of records of any Sublicensee described in this Section 3.3(b) to the extent Controlled by Auxilium.  The Parties agree that Auxilium will be the single point of contact with respect to records and audit rights provided that BTC shall have the right to cause Auxilium to conduct an audit or request records on its behalf to the extent that Auxilium has not already requested such records or conducted such audit subject to Auxilium’s right to conduct such audit once per calendar year.

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ARTICLE 4
REGULATORY MATTERS

4.1

Efforts .  Within twelve (12) months of filing for Regulatory Approval in any Major Market Country, Auxilium will file for Regulatory Approval in all the Major Market Countries; provided, that such obligation shall not apply with respect to Frozen Shoulder or any other Exercised Indication in any country(ies) in the Partner Territory.  Notwithstanding the foregoing, if a different dossier is required for any such other Major Market Country(ies), Auxilium will exercise Commercially Reasonable Efforts to seek Regulatory Approval with respect to such country(ies).  Auxilium may develop additional formulations, dosage forms or delivery systems for the Product in the Field as may be commercially practicable at its own expense.  For purposes of clarity, Remaining Indications shall not be subject to this Article 4; provided, however, that BTC shall not conduct Development or Commercialization of Product in such Remaining Indications in a manner that jeopardizes Auxilium’s Development or Commercialization of Product in the Field.

4.2

Regulatory Matters in the Territory .  As between the Parties, Auxilium shall be responsible in the Territory for ensuring compliance with all regulatory requirements relating to the Product labeled for use in the Field (i.e., obtaining, maintaining, and updating all required any Regulatory Approvals).  Without limiting the foregoing, Auxilium shall (i) file all regulatory filings and supporting documentation; (ii) serve as the designated regulatory official for purposes of receiving communications from the Regulatory Authority; and (iii) report any Adverse Drug Experience to Regulatory Authorities.  

4.3

Ownership .  All Regulatory Approvals relating to the Products labeled for use in the Field shall be the property of Auxilium, and held in the name of Auxilium, or its designee.  BTC shall promptly take whatever steps necessary to transition any existing regulatory filings to Auxilium.  In accordance with this provision, BTC has transferred to Auxilium the Investigational New Drug ("IND") relating to each of Dupuytren’s Disease, Peyronie’s Disease and Frozen Shoulder.

4.4

Regulatory Interactions for Product .

(a)

Communications with Regulatory Authority; Advice of Counsel .  BTC shall not communicate with Regulatory Authorities, or take any action regarding an investigation or a request by a Regulatory Authority with respect to a Product in the Field, except (i) with the prior written consent of Auxilium, or (ii) upon the advice of legal counsel that such communication is required by Law.  BTC shall cooperate with Auxilium and provide all reasonable assistance and take all actions reasonably requested by Auxilium that are necessary to comply with any Law applicable to a Product in the Field.  If BTC is advised by its legal counsel that it must communicate with any Regulatory Authority, then BTC shall promptly, but in no event more than two (2) Business Days, advise Auxilium of the same and provide Auxilium in advance with a copy of any proposed written communication with such Regulatory Authority and comply with any and all reasonable requests of Auxilium concerning any such communication with such Regulatory Authority.

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(b)

Receipt of Correspondence; Inspections .  Each Party shall promptly, but in any event within three (3) Business Days, (i) provide to the other copies of any material documents or correspondence received from any Regulatory Authority related to Development activities for a Product and (ii) inform the other Party of any inspections, proposed regulatory actions, investigations or requests for information or a meeting by any Regulatory Authority with respect to a Product.  In the event BTC does not have advance notice of an inspection by a Regulatory Authority, it shall immediately notify Auxilium of such inspection and it shall cooperate with such Regulatory Authority.   

(c)

Recalls and Withdrawals .  Subject to the terms and conditions of the Supply Agreement, Auxilium shall have sole responsibility for and shall make all decisions with respect to any recall, market withdrawals or any other corrective action related to the Products labeled for use in the Field in the Territory; provided however, (i) Auxilium shall immediately notify BTC of any decision to initiate a recall or withdrawal of such Product; (ii) all costs and expenses with respect to a recall, market withdrawal or other corrective action for such Product shall be borne by Auxilium unless such recall, market withdrawal or other corrective action was due to the negligence, willful misconduct or material breach of this Agreement or the Supply Agreement by BTC; and (iii) BTC shall immediately notify Auxilium of any decision to initiate a recall or withdrawal of a Product outside of the Field.  Each Party shall provide the other Party with recall information received by it in sufficient detail to allow the Parties to comply with Law.

(d)

Notice .  Each Party shall provide the other Party with notice, in a sufficiently timely basis to enable the other Party to comply in all material respects with Laws, of notification or other information which it receives (directly or indirectly) from, any Regulatory Authority (and providing, as soon as reasonably possible, copies of any associated written requests) that (i) raises any material concerns regarding the safety or efficacy of a Product; (ii) indicates or suggests a claim of a Third Party arising in connection with a Product, or (iii) is reasonably likely to lead to a recall or market withdrawal of a Product, provided that neither Party shall be obliged to disclose information in breach of any contractual restriction which it could not reasonably have avoided or which disclosure would waive any legal privilege.  

4.5

Inquiries, Adverse Events, etc.  As between the Parties, Auxilium shall be responsible for the surveillance, receipt and evaluation of product complaints for Product labeled for use in the Field in the Territory and reporting to Regulatory Authorities Adverse Drug Experiences for the Products in the Field.  As between the Parties, BTC shall be responsible for the surveillance, receipt and evaluation of product complaints for Product labeled for use outside the Field and reporting to Regulatory Authorities Adverse Drug Experiences for the Products outside the Field.  Each Party shall ensure that, in the Development or Commercialization of the Product, it will record, investigate, summarize, notify, report and review all Adverse Drug Experiences in accordance with Law.  Each Party shall (i) adhere to all requirements of Laws which relate to the reporting and investigation of Adverse Drug Experiences, and (ii) keep the Parties informed of such events.

(a)

Each Party shall submit reports of all Adverse Drug Experiences associated with the use of the Product and other required safety information (e.g., PSUR’s or annual safety reports) to the Regulatory Authorities in accordance with Law.  Each Party shall submit a copy of each such report to the other Party in advance of such submission to permit the other Party to comply with legal requirements applicable to it and comment on such reports.

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(b)

Each Party shall submit reports of all Adverse Drug Experiences associated with the use of Product for which Regulatory Approval has not been achieved and other required safety information to the Regulatory Authorities in accordance with Law.  Each Party shall submit a copy of each such report to the other Party in advance of such submission to permit the other Party to comply with legal requirements applicable to it and comment on such reports.

4.6

Approval of Labeling and Promotional Materials .  Auxilium shall be responsible to seek or obtain any necessary Regulatory Authority approvals of any label, labeling, package inserts or outserts, monographs and packaging, and promotional materials for use in connection with the Products labeled for use in the Field and for determining whether the same requires approval from Regulatory Authority.  The Parties shall cooperate in such efforts to seek and obtain such approvals.

4.7

Cooperation .  The Parties shall cooperate to provide each other all reasonable assistance and take all actions reasonably requested that are necessary to comply with Laws, including safety updates, amendments, annual reports, pharmacovigilance filings, investigator notifications, facility inspections, and certifications and maintenance and updates for regulatory filings and Regulatory Approvals.  Unless otherwise provided under the terms of this Agreement, the Parties will cooperate, communicate and provide reasonable assistance to each other with regard to all CMC matters related to the Product.

ARTICLE 5
COMMERCIALIZATION

5.1

Joint Commercialization Committee .

(a)

Formation .  Not later than the commencement of Phase III Clinical Trials for any Product, BTC and Auxilium will establish a Joint Commercialization Committee (the "JCC") made up of two (2) representatives designated by each Party hereto to assist in coordinating interactions and resolving potential disagreements between BTC and Auxilium during the course of the Commercialization of Product.  The JCC shall meet each and every calendar quarter.  The JCC Chair will be appointed by Auxilium from among the members of the committee designated by Auxilium. Auxilium and BTC shall each have one vote on the JCC.  The objective of the JCC shall be to reach agreement by consensus on all matters falling within its authority hereunder.  In the event of a deadlock with respect to any action, the vote of Auxilium, after reasonable opportunity for open discussion among the members of the JCC, shall control. Notwithstanding the foregoing, the JCC shall not have authority to commit the financial resources of either party.   

(b)

Patent Position .  The JCC will coordinate with the JDC in discussing matters relating to Patents related to the Product, including but not limited to issues of inventorship and decisions relating to the filing, prosecution and maintenance of such Patents.

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(c)

Coordinated Strategy .  The JCC shall meet at least quarterly or with such frequency and at such time and location as may be established by the JCC and will monitor the overall strategy and oversee the global marketing of all Products.  The JCC will have the opportunity to review market research plans and research results, clinical development results and similar items for each Product, including Products Developed for Remaining Indications, for the purpose of advising and assisting in communicating a unified global marketing strategy; provided, however that with respect to Remaining Indications, the JCC shall not have the final vote.

5.2

Commercialization .  Auxilium shall use Commercially Reasonable Efforts to Commercialize the Product in the Field in each country in the Territory; provided, that [***] .  Subject to Section 5.4 below, Auxilium shall be responsible for and have sole discretion over all aspects of Commercialization of the Product for use in the Field in the Territory.  

5.3

Orders, Booking Sales .  Auxilium shall have the sole right and responsibility for Product in the Field in each country in the Territory to (a) receive, accept, and fill orders for such Product, (b) control invoicing, order processing, and collection of accounts receivable for such Product sales, and (c) record such Product sales in its books of account.  If, for any reason, BTC receives orders for such Product, BTC shall forward such orders to Auxilium (or, if directed by Auxilium, to Auxilium’ wholesalers) as soon as practicable.  If any quantities of such Product are returned to BTC, BTC shall immediately notify Auxilium and ship them to the facility designated by Auxilium.  

5.4

BTC Co-Promotion Rights .  In the event that BTC provides written notice of its intent within ninety (90) days after an NDA Acceptance for a Product in the Field in the Territory indicated for use for any Exercised Indication, BTC will be allowed to provide up to ten percent (10%) of the Product Details for such Indication in the Auxilium Territory.  In addition, in the event that BTC provides written notice of its intent within ninety (90) days after an NDA Acceptance for Frozen Shoulder, BTC will be allowed to provide up to ten percent (10%) of the Product Details for Dupuytren’s Disease in the Auxilium Territory.  Notwithstanding Section 13.11, BTC’s co-promotion rights granted pursuant to this Section shall not be assignable or transferable to any other Person.  

ARTICLE 6
MANUFACTURE AND SUPPLY

6.1

Joint Manufacturing Committee .  

(a)

BTC and Auxilium will establish a Joint Manufacturing Committee (the "JMC") made up of two (2) representatives designated by each Party hereto which shall oversee the scale-up and manufacturing of Product on a worldwide basis, including the planning, manufacturing and supply (including supply chain management).  Each of BTC and Auxilium shall have one vote on the JMC.  The objective of the JMC shall be to reach agreement by consensus on all matters falling within its authority hereunder.  In the event of a deadlock with respect to any action involving or related to the manufacture of clinical supplies of Product, the vote of Auxilium, after reasonable opportunity for open discussion among the members of the JMC, shall control.  In the event of a deadlock with respect to any action involving or related to the manufacture of commercial supplies of Product in the Auxilium Territory, the vote of Auxilium after reasonable opportunity for open discussion among the members of the JMC shall control until such time as BTC is providing Auxilium with fifty percent (50%) of its commercial supplies in the Auxilium Territory pursuant to the terms of this Agreement.  At that point, in the event of a deadlock with respect to any action involving or related to the manufacture of commercial supplies of Product for the Auxilium Territory, the vote of BTC after reasonable opportunity for open discussion among the members of the JMC shall control.

*** OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT.

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(b)

Specific Responsibilities of the JMC .  In support of its responsibility for overseeing the Manufacturing of Product on a worldwide basis the JMC shall meet at least quarterly or with such higher frequency, and at such time and location as may be established by the JMC, and the JMC shall perform the following activities:

(i)

delineate requirements and responsibilities for development and licensure of manufacturing processes and facilities for Product and for supply of Product in the Auxilium Territory;

(ii)

together with the Joint Development Committee, develop a manufacturing strategy to enable development and licensure of manufacturing processes and facilities for Product in the Auxilium Territory that includes all aspects of manufacture and release, including but not limited to formulations, intermediate, dosage form, devices, product characterization studies, stability studies and manufacturing plans and forecasts;

(iii)

review quality assurance efforts, including but not limited to those efforts with respect to the establishment of specifications and quality standards for Product in the Auxilium Territory;

(iv)

together with the Joint Development Committee review and comment on the process for Product Development and the drafting and contents of the CMC section of a Drug Approval Application for Product in the Auxilium Territory;

(v)

review technology transfer plans for any changes in manufacturing sites, testing sites, and responsibilities in the supply chain for Product for the Auxilium Territory, it being understood that decisions regarding the selection of which of a Party’s own manufacturing and testing sites shall be used to manufacture any component of a Product, if a Party manufactures any component of a Product pursuant to this Agreement or any related supply agreement, shall remain in the sole control of such Party;

(vi)

prepare for regulatory inspections and ensure adherence to compliance standards with respect to Product; and

(vii)

review quality compliance and manufacturing related regulatory issues concerning the Product in the Auxilium Territory or any component thereof as important issues arise through meetings and review of relevant written material produced by Auxilium, BTC or any Regulatory Authority.

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6.2

Development and Scale-Up .  Auxilium shall, at its own cost and expense, utilizing the Back-Up Supplier (defined below), develop the formulation and the finished dosage form and scale up the Manufacture for clinical supply of the Enzyme and the Product for each Indication for use in the Field, including the [***] , to be registered with Regulatory Authorities in accordance with Law and in sufficient time prior to anticipated commercial launch of a Product to provide for sufficient Supply of Product for use in the Field.  Auxilium will have the sole right and responsibility for selecting the finished dosage form and presentation for the Product in the Field.  The costs paid to third parties to develop the lyophilization of the injection formulation shall be shared equally by the Parties.   [***] .

6.3

Clinical Supply .

(a)

Back-Up Suppliers .  Auxilium shall qualify one or more back-up suppliers for the Manufacture of clinical and commercial supplies of Product in the Field promptly after the Effective Date (the " Back-Up Suppliers" ).  For purposes of clarity, the term Back-Up Suppliers shall include one or more entities in the supply chain, as may be necessary to Manufacture Product for clinical and/or, if applicable, commercial use.  Auxilium’s agreement(s) with the proposed Back-Up Suppliers shall be consistent with the respective rights and obligations of Auxilium and BTC hereunder and a copy of which, redacted with respect to financial terms, shall be provided to BTC upon the execution of this Agreement and promptly after the execution thereof, as to any such agreements executed after the date hereof.  BTC will use Commercially Reasonable Efforts to provide such Back-Up Suppliers with sufficient know-how to Manufacture Product, including (i) providing all protocols, registration applications and other substantive regulatory documents, including, but not limited to, all data, scientific dossiers and governmental authorizations; (ii) providing access and reference to all regulatory dossiers and filings produced by BTC, its Affiliates and sublicensees relating to the Product; (iii) providing access to BTC Know-How in reasonably satisfactory form, and (iv) providing all technical assistance reasonably requested by the Back-Up Suppliers related to the Manufacture of the Product.  Auxilium will require that the Back-Up Suppliers execute a written confidentiality agreement with Auxilium and a written materials transfer agreement with BTC, in a form reasonably acceptable to BTC and consistent with industry standards, which in