THIS DEVELOPMENT
AGREEMENT dated as Oct 3 , 2005, (the “Effective
Date”) by and between Alexza Pharmaceuticals, Inc., of
1020 East Meadow Circle, Palo Alto, CA 94303
(“Alexza”), and Autoliv ASP, Inc. of 3350
Airport Road, Ogden, UT 84405 (“Autoliv”).
A. Alexza is
in the business of development, manufacture and commercialization
of a proprietary thermal delivery technology to deliver drugs
locally and systemically through the lung; and
B. Autoliv is
in the business of development and commercialization of, among
other things, incendiary initiators; and
C. Alexza
desires to have Autoliv develop and supply to Alexza a Heat
Packages that can be incorporated in Alexza’s proprietary
drug delivery device for sale by Alexza worldwide.
IN CONSIDERATION
of the respective covenants, representations, warranties and
agreements set forth herein, and intending to be legally bound
hereby, the parties hereby agree as follows:
In this
Agreement the following words will have the following
meanings:
1.1
“Affiliate” means with respect to an entity, a
person, corporation or other entity that, directly or indirectly,
through one or more intermediaries, controls, is controlled by or
is under common control with that entity.
1.2
“Agreement” means this Development Agreement and
all of the terms and conditions herein.
1.3
“Alexza Know-How” means all information and data
(including but not limited to results), technical information,
trade secrets, specifications, instructions, processes, formulae,
expertise and information (i) owned by or licensed (with right
to grant sublicenses) to Alexza; and (ii) necessary or useful to
the manufacture, use or sale of the Product or Heat Packages,
including, without limitation, biological, chemical, biochemical,
physical and analytical, safety, quality control, manufacturing,
preclinical and clinical data, instructions, processes, formulae,
expertise and information, which may be useful in studying,
testing, the development, production, formulation or use of the
Product or Heat Packages.
1.4
“Alexza Patents” means all patents and patent
applications owned by or licensed (with the right to grant
sublicenses) to Alexza which have issued as of the Effective Date
or which issue from applications pending as of the Effective Date
or which cover any New Discoveries, and which (i) claim
inventions necessary or useful to the manufacture, use or sale
of
1.
the Product or
Heat Packages, and (ii) have not expired or been held invalid
or unenforceable by a court of competent jurisdiction in a final,
unappealable decision, including without limitation all
substitutions, re-examinations, reissues, extensions, registrations
and supplementary or complementary certificates.
1.5
“Autoliv Know-How” means all information and data
(including but not limited to results), technical information,
trade secrets, specifications, instructions, processes, formulae,
expertise and information: (i) owned by or licensed (with
right to grant sublicenses) to Autoliv; and (ii) necessary or
useful to the manufacture, use or sale of the Heat Packages,
including, without limitation, biological, chemical, biochemical,
physical and analytical, safety, quality control, manufacturing,
preclinical and clinical data, instructions, processes, formulae,
expertise and information, which may be useful in studying,
testing, the development, production, formulation or use of the
Heat Packages.
1.6
“Autoliv Patents” means all patents and patent
applications owned by or licensed (with the right to grant
sublicenses) to Autoliv which have issued as of the Effective Date
or which issue from applications pending as of the Effective Date
or which cover any New Discoveries, and which (i) claim
inventions necessary or useful to the manufacture, use or sale of
the Heat Packages, and (ii) have not expired or been held
invalid or unenforceable by a court of competent jurisdiction in a
final, unappealable decision, including without limitation all
substitutions, re-examinations, reissues, extensions, registrations
and supplementary or complementary certificates.
1.7
“Background Technology” shall have the meaning set
forth in Article 6.1.
1.8
“Confidential Information” means, subject to the
limitations set forth in Article 8.2 hereof, all information
disclosed by a party hereto to the other party pursuant to this
Agreement, the Consultant Services Agreement or pursuant to the
Mutual Confidential Disclosure Agreement between the parties dated
as of November 3, 2004. In particular, Confidential
Information shall be deemed to include, but is not limited to,
information relating to research and development programs and
results, prototypes and products, clinical and preclinical data,
trade secrets, business strategy, patent applications, licenses,
suppliers’ and manufacturers’ identities, product and
marketing strategy, customers, market data, personnel and
consultants.
1.9
“Consultant Services Agreement” means the
Consultant Services Agreement between the parties dates as of
December 17, 2004.
1.10
“Development Plan” means the plan for the
development of the Heat Packages, including procedures, cost
estimates and budget, time schedule and other information delivered
and agreed to following the Effective Date by the parties as more
fully set forth in Article 2 below.
1.11
“Development Plan Budget” means the budget set
forth in the Development Plan.
1.12
“Development Program” means the program for
developing and optimizing the Heat Packages for incorporation into
the Product pursuant to the Development Plan.
2.
1.13
“FDA” means the United States Food and Drug
Administration, or its functional equivalent in jurisdictions
outside the United States.
1.14
“Heat Package” means a heating substrate for the
vaporization of a drug, consisting of a chemical heat source sealed
within an inert, stainless steel substrate.
1.15
“Healthcare Field” means the areas of prevention,
treatment, management, monitoring or diagnosis of illness or
disease.
1.16
“Initiator Technology” means a method of initiating
a chemical reaction, consisting of a chemical reactant mixture
deposited on a metal wire that is connected to an electric current
source.
1.17
“Intellectual Property Rights” means all present
and future worldwide trade secrets, patent, patent applications,
copyright, mask work or other proprietary or property
right.
1.18
“New Discoveries” means inventions, developments,
improvements, enhancements or modifications, whether or not
patentable, that are conceived or developed or reduced to practice
by Alexza or Autoliv arising out of or in connection with Alexza or
Autoliv’s performance under this Agreement.
1.19
“Product” means a system which includes pulsatile
delivery technology and a drug or drugs for Pulmonary Drug Delivery
incorporating Alexza’s proprietary technology and
Confidential Information and the Heat Packages, and including
anything used in or with the system for Pulmonary Drug Delivery, or
sold with or for use in or with the system for Pulmonary Drug
Delivery.
1.20
“Program Coordinator” shall have the meaning set
forth in Article 2.2 (b)
1.21
“Pulmonary Drug Delivery” shall mean delivery of
drugs to the lungs.
1.22
“Regulatory Approval” means any approval, licenses,
registrations, or authorizations of any federal, state or local
regulatory agency, department, bureau or other government entity,
required for the manufacture, use, storage, import, transport or
sale of Products in any country of the Territory, including but not
limited to investigational new drug applications
(“IND”), Investigational Device Exemptions
(“IDE”), Pre-Market Notifications
(“510(k)”) and/or Pre-Market Approvals
(“PMA”), European Commission (EC) Annex II CE Mark
certifications, Doctor and Dentist Exemption Certificates
(“DDX”), Clinical Trials in Marketed Products
(“CTMP”), Drug Master Files (“DMF”),
Biologic License Applications (“BLA”), New Drug
Applications (“NDA”), Amended NDAs
(“ANDA”), national filings, Manufacturing Authorization
Applications (“MAA”), MAA dossiers, MAA renewals, MAA
variations and Clinical Trials Exemptions
(“CTX”).
1.23
“Specifications” means the minimum specification
for the manufacture and performance of the Heat Packages, which
shall be established by Alexza and agreed upon by the parties and
documented in the Development Plan.
1.24
“Territory” means the world.
3.
1.25
“Validation Heat Packages” means the production
series of the Heat Packages appropriate for design validation
(type-testing) and human clinical trials, manufactured in
conformance with the Specifications by Autoliv and delivered to
Alexza under this Agreement.
2.1 Purpose
and Scope. The parties wish to collaborate in the development
of the Heat Packages, to be incorporated in the Product for
commercialization by Alexza worldwide. To that end, the parties
will embark on a Development Program with each party bearing
specified responsibilities, all as further described
herein.
(a) Scope. Immediately after the execution hereof, the
parties will commence the Development Program, which shall
encompass all activities necessary to develop the Heat Packages and
incorporate it into the Product for further clinical trials and
commercial distribution.
(b) Coordination of Development Program. To facilitate
and coordinate the relationship of Alexza and Autoliv with regard
to the development of the Heat Packages, each party shall appoint
one (1) representative (“Program Coordinator”) who
together shall jointly determine the mechanisms required for the
exchange of information (including Background Technology and
Confidential Information) with respect to all aspects of the
Development Program.
(
i ) The parties, through the Program Coordinators,
shall develop mutually agreeable Specifications for the Heat
Packages based on the parameters set forth in the Development Plan
and the results of activities undertaken in the Development
Program. If the parties are unable to agree upon the
Specifications, Alexza shall have the right to terminate the
Agreement pursuant to Article 5.3 or both parties may agree to
terminate the Agreement pursuant to Article 5.2(b).
(ii) Alexza shall have the right to propose
modifications of the Specifications from time to time. If Alexza
recommends any modifications to the Specifications, Autoliv shall
promptly notify Alexza in writing of any additional costs and
expenses associated with such modifications (the “Additional
Costs and Expenses”), including a reasonably detailed
explanation of the reasons for such additional costs and expenses,
and any necessary revisions to the time schedule set forth in the
Development Plan. Alexza shall have four (4) weeks to notify
Autoliv in writing either that: (i) Alexza accepts such
Additional Costs and Expenses and Autoliv is to proceed with such
modified Specifications, or (ii) withdraw such modified
Specifications. If Alexza does not notify Autoliv of its decision
within the four (4) week period specified above, the
modifications shall be deemed withdrawn, and Autoliv shall proceed
with the Development Program and the Specifications as then in
effect. If Alexza accepts such Additional Costs and Expenses,
Autoliv shall incorporate such modifications into the
4.
Specifications
and proceed with the Development Program, subject to any modified
time schedule described above. Alexza shall bear the Additional
Costs and Expenses. If the modifications to the Specifications are
necessitated by requirements of FDA or other regulatory authority,
the parties shall amend the Development Plan to reflect such
modifications, and Alexza will bear the Additional Costs and
Expenses. If the parties are unable to agree upon any modifications
to the Specifications, Alexza shall have the right to terminate the
Agreement pursuant to Article 5.3 or both parties may agree to
terminate the Agreement pursuant to Article 5.2(b).
(d) Development Plan. The parties hereby agree to
conduct and cooperate in the development and optimization of the
Heat Packages for incorporation in the Product, in accordance with
the Development Plan, and any and all amendments, revisions or
elaboration to such plan to which the parties agree in writing.
Prior to each phase of the Development Plan, a proposed plan of
activities to be conducted during such phase shall be submitted to
the Program Coordinators for review and approval.
(e) Conduct of Development Program.
(i) Autoliv’s Obligations. Autoliv shall use its
good faith business and scientific judgment as applied to
commercial development projects, to allocate sufficient time,
effort, equipment and facilities to carry out the Development Plan
in accordance with the timelines set forth therein. Autoliv shall
work diligently, consistent with accepted business practices and
legal requirements, to develop the Heat Packages and cooperate with
Alexza’s efforts to incorporate it into the Product, devoting
the same degree of attention and diligence to such development
efforts that it devotes to development activities for its own
products, but in no event less than reasonable attention and
diligence. Autoliv shall conduct its efforts hereunder in strict
accordance with all applicable laws, regulations and guidelines,
including without limitation, the requirements for Regulatory
Approval.
(ii) Alexza’s Obligations. Alexza shall use its
good faith business and scientific judgment as applied to
commercial development projects, to allocate sufficient time,
effort, equipment and facilities to carry out its obligations under
the Development Plan, and to promptly evaluate each iteration of
the Heat Packages prototype to enable Autoliv to meet its
performance deadlines. Alexza shall conduct its efforts hereunder
in strict accordance with all applicable laws, regulations and
guidelines, including without limitation, the requirements for
Regulatory Approval.
(iii) Quality Agreement. The parties shall negotiate in
good faith a Quality Agreement to be entered into not later than
August 1, 2006 covering the Heat Packages to be manufactured
pursuant to the Development Plan.
(f) Site Visits. Autoliv shall allow Alexza, during
Autoliv’s normal business hours, to visit its place of
business where the Heat Packages development work is being
performed (the “Development Work Site”) to inspect the
status of such work. Alexza’s representative shall be subject
to Autoliv’s customary restrictions with respect to
non-employee visitors to Autoliv’s place of business and the
Development Work Site.
5.
(
g ) cGMP and QSR Compliance Audits. In addition to
the site visits described above, Alexza shall have the right to
have its representatives visit the Development Work Site to review
Autoliv’s operations and assess its compliance with cGMP,
ISO, QSR, and other applicable regulatory requirements and quality
assurance standards, and to discuss any related issues with
Autoliv’s development, manufacturing and management
personnel. Autoliv shall supply to Alexza any relevant documents
necessary to permit Alexza to complete such review and
assessment.
(h) Regulatory Inspections. Autoliv shall cooperate
with any inspection of its facilities by a regulatory agency or
authority in the Territory, including but not limited to any
inspection by such regulatory agency or authority prior to the
granting of Regulatory Approval to market the Products in the
Territory (by mutual recognition of another jurisdiction’s
Regulatory Approval or otherwise). Autoliv shall notify Alexza as
soon as possible of any notification received by Autoliv from any
regulatory authority in the Territory to conduct an inspection of
its manufacturing or other facilities used in the manufacturing,
packaging, storage or handling of Products, or relating to any
claim of non-compliance with regulatory requirements. Copies of all
correspondence and notices relevant to the Heat Packages to and
from the regulatory authority in the Territory will be provided by
Autoliv to Alexza.
(i) Records. Autoliv will maintain for a period of ten
(10) years all records generated in the course of its
performance under this Agreement and necessary to evidence
compliance with (i) such laws and regulations as are applicable to
the design and manufacture of medical devices and (ii) Heat
Packages Specifications.
(i) Prototypes. The parties agree and understand that
the development of the Heat Packages is expected to be an iterative
process, with prototypes created by Autoliv pursuant to the
then-effective Specifications, and that Alexza shall evaluate and
test all prototypes in an effort to further refine and define the
final Specifications for the Validation Heat Packages. Accordingly,
Autoliv shall deliver all prototypes of the Heat Packages to Alexza
in the quantities and in accordance with the schedule and
Specifications set forth in the Development Plan.
(ii) Disclosure and Reports. Autoliv shall fully and
promptly disclose to Alexza, in writing and on an on-going basis,
all results, including but not limited to any New Discoveries, made
in the course of the Development Program. Autoliv shall provide to
Alexza on a monthly basis during the term of this Agreement a
report setting forth, in such reasonable detail as Alexza may
request, (i) the work performed by Autoliv during such month,
(ii) the status of the work to be performed under the
Development Plan as of the end of the month, (iii) a
description of any problems, if any, in completing the remaining
work to be done in accordance with the schedule set forth in the
Development Plan and the proposed resolution of such problems,
(iv) any other information reasonably deemed relevant by
Autoliv and (v) any other information related to the
Development Work reasonably requested by Alexza. Upon request of
Alexza, Autoliv will make its Program Coordinator available to
discuss with Alexza’s Program Coordinator the status of the
work to be performed under the Development Plan and the work
remaining to be done thereunder or such other issues as arise with
respect to the
6.
2.3 Acceptance
and Rejection of Prototypes.
(a) Inspection. Alexza shall inspect all Heat Packages
prototypes and other items delivered pursuant to the Development
Plan promptly upon receipt. Alexza may reject any Heat Packages
prototypes that do not conform to the Specifications at the time of
delivery by Autoliv. Any such rejection shall be made in writing
and shall indicate the reasons for such rejection and, where
appropriate, shall be accompanied by test results or other
documentation or data supporting Alexza’s reason for
rejection. Any rejection delivered within the time period specified
in the Development Plan for review of Heat Packages prototypes and
other deliverables shall be deemed timely. If Alexza does not
deliver the notice of rejection within the time permitted under the
Development Plan, Alexza shall be deemed to have accepted that Heat
Packages prototype. Acceptance of an iteration of the Heat Packages
prototype or other deliverable shall not prejudice Alexza’s
right to determine that a subsequent Heat Packages prototype or
deliverable is not reasonably acceptable.
(b) Remediation of Rejection. After notice of rejection
is received by Autoliv, the parties shall discuss in good faith the
reasons for such rejection, and Autoliv shall use reasonable and
timely efforts to promptly correct the deficiencies. The parties
shall discuss in good faith any adjustments to the schedule
contained in the Development Plan necessitated by such correction
work, and Autoliv shall use reasonable efforts to assign such
additional personnel to the Development Program to minimize such
delays. If Alexza determines that the Heat Packages prototype does
not meet the Specifications, or other deliverables do not meet the
applicable requirements, Alexza may elect, in its sole discretion,
to (i) have Autoliv rework such Heat Packages prototype or
other deliverable, or (ii) terminate the Agreement pursuant to
Article 5.3 or both parties may agree to terminate the
Agreement pursuant to Article 5.2(b).
(c) Validation Heat Packages. In accordance with the
time schedule set forth in the Development Plan, Autoliv will
deliver to Alexza the number of Validation Heat Packages set forth
in the Development Plan in accordance with the final
Specifications. Promptly upon receipt of the Validation Heat
Packages, Alexza will inspect and test such Validation Heat
Packages for compliance with the Specifications. If the Validation
Heat Packages do not comply with the Spec
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