Exhibit
10.113
Confidential Treatment Requested For Certain
Portions Hereof
Denoted With “****”
PROCESS
DEVELOPMENT AGREEMENT
THIS AGREEMENT (the “Agreement”), made and effective as
of this 15 th day of December, 2006 (the “Effective
Date”) by and between:
BioDelivery Sciences International, Inc., a corporation organized
and existing under the laws of Delaware, having a principal place
of business at 2501 Aerial Center Parkway, Suite 205 , Morrisville,
NC 27560, U.S.A. (herein after called “BDSI”); and
LTS Lohmann Therapie-Systeme AG, a limited liability company
organized and existing under the laws of Germany, having its
executive offices and principal place of business at Lohmannstrasse
2, 56626 Andernach, Germany (hereinafter called
“LTS”).
W I T N E S S E T H:
WHEREAS, LTS has experience with oral film-form products and has
developed and is presently engaged in the production of similar
products, and
WHEREAS, BDSI has experience with oral film-form products and has
knowledge in the production of similar products, and
WHEREAS, BDSI desires to cooperate with LTS for the scale up and
process development of the Product to be distributed and sold by
BDSI and its Affiliates or licensees; and
WHEREAS LTS wishes to cooperate with regard to such scale up and
process development; and
WHEREAS, BDSI wishes to have LTS manufacture and supply clinical
materials, and BDSI wishes to purchase Products and Placebos;
and
WHEREAS, BDSI and LTS wish to cooperate in the exclusive
manufacturing of the Products and Placebos in the Territory;
and
NOW THEREFORE, BDSI and LTS, in consideration of the premises and
of the mutual promises and covenants hereinafter contained, do each
hereby covenant and agree, as hereinafter set forth.
I. Definitions
“Active Principle” shall mean Fentanyl, as specified in
accordance with the specifications for Active Principle attached
hereto as Annex 1.
“Affiliate”, used in relation to a party hereto shall
mean
1
Confidential
Treatment Requested For Certain
Portions Hereof
Denoted With “****”
|
|
1.2.1
|
any company or other entity of which such party now or hereafter
(i) directly or indirectly owns more than fifty percent
(50%) of the stock or other equity interest entitled to vote
for the election of directors of such company or
(ii) otherwise has voting control over such entity;
|
|
|
1.2.2
|
any company or other entity of which such party has the power to
appoint more than half the members of the supervisory board, board
of directors or boards legally representing the undertaking;
|
|
|
1.2.3
|
any entity which, directly or indirectly, has the powers
described in Sections 1.2.1 or 1.2.2 with respect to a party (a
“Parent”); or
|
|
|
1.2.4
|
any entity over which a Parent of a party has the powers
described in Sections 1.2.1 or 1.2.2.
|
“Authority” means the relevant governmental or
regulatory body whose approval is required to develop the Process
or to sell a Product in a particular country of the Territory.
“Batch” means **** of a Product.
“Business Day” shall mean a day other than Saturday,
Sunday or any official holiday in the applicable State of a
party.
“Calendar Quarter” shall mean the calendar quarters of
the year beginning first of January, April, July and October.
|
1.7
|
Certificate of Analysis
|
“Certificate of Analysis” means a certificate issued by
a raw material supplier which states the Product and if issued by
the raw material supplier Raw Material Specifications, indicates
the final release test results and includes documentation of any
Batch deviations. “LTS Certificate of Analysis” means a
certificate issued by LTS on the finished drug Product which will
indicate the final release tests results and include documentation
of any batch deviations.
|
1.8
|
Commercially Reasonable Efforts
|
“Commercially Reasonable Efforts” means those efforts
****
“Control” or “Controlled” means the
possession by a party of the right to grant a license or
2
Confidential
Treatment Requested For Certain
Portions Hereof
Denoted With “****”
sublicense as provided herein without the payment of additional
consideration to, and without violating the terms of any agreement
or arrangement with, any third party.
“Design” shall mean the kind of structure, type or
model, concept and the composition of the Product including but not
limited to quantity and quality of Active Principle and
excipients.
“GMP” means the current Good Manufacturing Practices at
the time of manufacturing applicable to the manufacturing and
packaging of pharmaceutical products for human use in the country
of manufacturing.
“Improvements” shall mean any ****
“Process Improvement” shall mean any Project Plan
Improvement in or to the Process.
“Product Improvement” shall mean any Project Plan
Improvement in or to the Product.
“Project Plan Improvements” shall mean any ****
“Patents” shall mean
|
|
(i)
|
all patents and patent applications, and patents issuing
thereon, which are owned or Controlled by BDSI or LTS at any time
during the term of this Agreement or thereafter and which are
necessary or useful for the use, development, sale, or
manufacturing of the Product, and
|
|
|
(ii)
|
all continuations, continuations-in-part, re-issuances,
divisions, foreign counterparts, and extensions thereof.
|
Formulation and specifications without the Active Principle, as
specified in accordance with the specifications for Placebo
attached hereto as Annex 2.
“Processing” means the ****, involved in manufacturing
the Product in accordance with this Agreement. The terms
“Process” and “Processed” in this Agreement
shall be construed accordingly.
“Product” shall mean BDSI’s transmucosal oral
system containing Active Principle based
3
Confidential
Treatment Requested For Certain
Portions Hereof
Denoted With “****”
on the Design of BDSI Technology as contemplated under the Product
Specifications attached hereto as Annex 3.
“GMP Product” shall mean Product that is intended for
use for clinical applications as opposed to non-clinical research
and development purposes.
|
1.17
|
Product Specifications
|
“Product Specifications” means the specifications for
Product, including any packaging and labeling specifications, as
set forth in Annex 3, or as otherwise mutually agreed upon in
writing by the parties from time to time and furnished to LTS by
BDSI for the processing, manufacturing and quality control of the
Product, and any and all additions and amendments to the same made
by the written agreement of the parties during the term of this
Agreement.
“Project” shall mean the work to be performed under
this Agreement as set forth in the Project Plan, attached hereto as
Annex 4, as may be amended from time to time by written agreement
by the Working Group.
“Raw Materials” means the raw materials that are used
by LTS to manufacture Product through the applicable Process,
according to specifications furnished by BDSI to LTS as specified
in Annex 3, Product Specifications, or as otherwise mutually agreed
upon in writing by the parties from time to time.
|
1.20
|
Technical Information
|
“Technical Information” shall mean all technical
information, which may include Confidential Information,
Improvements, patents, patent applications, proprietary know-how,
discoveries, inventions, processes, formulae and methods which are
necessary or useful for the Process and the manufacturing of the
Product.
“LTS Technology” shall mean, individually and
collectively, all discoveries, inventions, know-how, trade secrets,
techniques, patents (including ****), patent applications,
methodologies, modifications, improvements, works of authorship,
designs and data (whether or not protectable under patent,
copyright, trade secrecy or similar laws), in each case with
respect to the development of oral film form products and/or
pharmaceutical preparations in general, their use, process
development (including without limitation ****) and their
manufacturing, packaging, and labeling, the ****, that are
conceived, discovered, developed, generated, created, made or
reduced to practice or tangible medium of expression solely by
employees or consultants of LTS, or Controlled by LTS, at any time
prior to the Effective Date, or after the Effective Date, if such
are not based upon or related to the performance of the Project
Plan and all Process Improvements owned or Controlled by LTS in
accordance with Section 9.1.
“BDSI Technology” shall mean, individually and
collectively, all discoveries, inventions, know-how, trade secrets,
techniques, patents, patent applications, methodologies,
modifications, improvements, works of authorship, materials,
designs and data (whether or not protectable under patent,
copyright, trade secrecy or similar laws), in each case with
respect to bioerodable mucoadhesive transmucosal technology which
includes Confidential Information, and technical know-how regarding
and patents (including the BDSI Patents) with respect to its and/or
the Product’s use, formulation, components, formulae,
processing methods (including without limitation ****) and their
manufacturing, packaging, and labeling, and the ****, that are
conceived, discovered, developed, generated, created, made or
reduced to practice or tangible medium of expression solely by
employees or consultants of BDSI, or Controlled by BDSI, at any
time prior to the Effective Date, or after the Effective Date, if
such are not based upon or related to the performance of the
Project Plan, together with all Product Improvements owned or
Controlled by BDSI in accordance with Section 9.1.
“Territory” shall mean all countries that are members
of the European Union as of the Effective Date.
“Valid Claim” shall mean with respect to the sale of a
Product within a particular jurisdiction an unexpired claim of an
issued patent within such jurisdiction which has not expired,
lapsed, or been found to be invalid, unpatentable or unenforceable
by a court or other competent authority in the subject
jurisdiction, from which decision no appeal is taken or can be
taken, and which has not been rendered unenforceable through
disclaimer or otherwise, or otherwise lost through an interference
proceeding.
4
Confidential
Treatment Requested For Certain
Portions Hereof
Denoted With “****”
II. Contribution
|
2.1
|
Contribution of the Parties
|
|
|
2.1.1
|
The Parties agree to duly cooperate as to the purpose of this
Agreement in performing an investigation regarding the
manufacturing of clinical samples and later commercial supplies of
the Products, clinical trials and registration based on the Design
and the manufacturing technology and know-how provided by BDSI
regarding the Product including, but not limited to clinical trials
and registration, all in accordance with and as to the extent
further specified and provided in this Agreement.
|
|
|
2.1.2
|
Based on Technical Information as disclosed by BDSI, LTS shall
use Commercially Reasonable Efforts to develop the Process to
manufacture the Product for BDSI in accordance with the applicable
Product Specifications and the Project Plan.
|
|
|
2.1.3
|
BDSI shall disclose to LTS all necessary BDSI Technology
concerning formulation, ingredients and compounding ratio of the
Product, the Product specification values, manufacturing method and
other technology and know-how of the Product.
|
|
|
2.1.4
|
LTS shall use its Commercially Reasonable Efforts to supply
quantities of Product to BDSI according to the Project Plan. All
Products supplied by LTS hereunder shall: (a) conform to the
Product Specifications; and (b) be manufactured, labelled,
packaged and tested (while in the possession or control of LTS) in
accordance with GMP and the applicable laws and regulations
relating to the manufacture, labelling, packaging and testing of
the Product.
|
|
|
2.1.5
|
LTS shall use its Commercially Reasonable Efforts to prepare as
soon as possible those sections of any applicable regulatory
documents of an Authority which concern the development of the
Process or the manufacturing of the Product by LTS and shall
provide those sections to BDSI as soon as possible for inclusion in
any applicable regulatory filings with an Authority which concern
the Product. To the extent disclosure of LTS’ proprietary
information is required for such purposes, Section 10.7. shall
govern.
|
|
|
2.1.6
|
BDSI shall provide LTS ****
|
|
|
2.1.7
|
To the extent required by law, BDSI shall use its Commercially
Reasonable Efforts to ensure that LTS has the right to reasonably
audit the supplier of the Active Principle for compliance with
relevant regulatory requirements including GMP.
|
|
|
2.1.8
|
BDSI or its Affiliates or its licensees shall be responsible for
the clinical trials, the registration of the Product with the
proper health, customs and other Authorities, as
|
5
Confidential
Treatment Requested For Certain
Portions Hereof
Denoted With “****”
|
|
applicable, to be carried out in BDSI’s sole
discretion.
|
|
|
2.1.9
|
LTS shall only ****
|
|
|
2.2.0
|
If the Parties decide to commence the commercial manufacture of
the Product, LTS shall be in charge of exclusive manufacturing for
the Products in the Territory at any of LTS’ manufacturing
sites subject to LTS’ sole discretion.
|
III. Working Group
|
3.1
|
The parties shall establish a joint technology team (the
“Working Group”) responsible for monitoring and
controlling the Project Plan, exchanging information and
coordinating all joint activities of the parties under the
Agreement.
|
|
3.2
|
Each party shall initially appoint one project leader (each, a
“Project Leader”). The Project Leaders shall determine
from time to time whether the Working Group should have additional
members; if so, the Project Leaders may choose from time to time to
have **** additional members of the Working Group. The Project
Leaders shall each select an equal number of such members to the
Working Group, jointly define such members’ responsibilities
and jointly schedule meetings of the Working Group. ****
|
|
3.3
|
The Project Leaders shall meet regularly, at least every
Calendar Quarter, and jointly make at least quarterly reports to
BDSI and LTS on the progress of the development of the Process, as
set forth in the Project Plan.
|
|
3.4
|
The Working Group shall strive to always reach unanimous
decisions. In the event of a deadlock, the issue will be referred
to the Project Leaders for resolution. In the event that such
persons cannot reach a unanimous decision, the chief executive
officers of BDSI and LTS or their designees shall discuss the
matter in good faith to resolve the dispute. For clarity the
Working Group shall not have authority to waive compliance with, or
amend or modify the Agreement, each of which are subject to
Section 13.6 and 13.11 respectively.
|
IV. Requirements and Supply; Quality Control
|
4.1
|
LTS shall use its Commercially Reasonable Efforts to supply
Product **** to BDSI for appropriate testing, toxicological
evaluations and clinical trials to be conducted in accordance with
the Project Plan. Manufacture of samples of Product shall comply
with applicable laws, including GMP.
|
|
4.2
|
For shipment of Product delivered to BDSI, LTS shall prepare LTS
Certificate of Analysis indicating that such shipment was
manufactured in compliance with this Agreement, GMP and the then
current Product Specifications, and shall forward the LTS
Certificate of Analysis to BDSI at the time delivery of the
shipment is initiated.
|
|
4.3
|
Upon receipt of a shipment of Product, BDSI agrees to promptly
inspect such shipment to attempt to determine any apparent
non-conformity to the Product Specifications and GMP.
|
6
Confidential
Treatment Requested For Certain
Portions Hereof
Denoted With “****”
Notwithstanding any acceptance of any shipment of Product, the
warranties provided in Section 11.1 and LTS’ obligations
under Section 11.6 shall survive acceptance of the Product by
BDSI.
|
4.4
|
Within **** of the date of delivery**** provided, that BDSI ****
in this respect means any ****
|
|
4.5
|
As long as BDSI continues with the development of Product, BDSI
shall conduct appropriate tests and toxicological evaluations for
Product in accordance with applicable laws, and report to LTS
promptly any adverse results of such tests and evaluations, which
shall be received and treated as BDSI’s Confidential
Information (as defined in Section 10). Notwithstanding the
foregoing, BDSI shall have no obligation to report any adverse
clinical trial results to LTS, unless such adverse results directly
relate to Product.
|
|
4.6
|
BDSI shall have the right upon written reasonable advance notice
to conduct plant inspections at LTS facilities where Product is
produced, in order to audit the compliance with relevant regulatory
requirements including GMP. Such plant inspections are subject to
access during normal business hours and to those parts of the
facility that are used for the manufacture of the Product. In
addition, LTS shall make its facilities available for inspection by
any Authority.
|
|
4.7
|
Subject to Section 4.5, each party shall promptly advise
the other of any safety or toxicity problem of which either party
becomes aware regarding the Product or Raw Materials used in the
Process or manufacture of the Product.
|
V. Funding of Project
|
5.1
|
Funding of LTS Activities according to Project Plan
|
5.1.1 BDSI shall
compensate LTS for work performed in accordance with the Project
Plan ( Annex 4) and this Agreement, ****
5.1.2 The first
invoice to BDSI in the amount of **** (the “Initial
Amount”) will be issued by LTS upon signature of this
Agreement. Following, LTS shall invoice BDSI on a **** basis for
the man-hours actually employed by LTS during such ****
5.1.3 LTS will
verify and document the man-hours devoted by LTS to the Project,
and will submit to BDSI together with the invoice an accounting at
the end of each ****
5.1.4 BDSI may have
LTS’ records of man-hours and their allocation to the Project
Plan audited by an independent Certified Public Accountant or
chartered accountant or admitted Wirtschaftspruefer (i.e., German
equivalent to a CPA) reasonably acceptable to LTS acting in
confidence, at reasonable intervals, at BDSI’s expense and
subject to reasonable prior notice.
5.1.5 During the
term of the Agreement, ****
|
5.2
|
The estimated price to be paid by BDSI for commercially salable
Product purchased from LTS under a proposed Manufacturing and
Supply Agreement (the outlines of which are set
|
7
Confidential
Treatment Requested For Certain
Portions Hereof
Denoted With “****”
|
|
forth in Annex 5) shall be provided to BDSI after the successful
scale up and the manufacture of clinical samples.
|
|
5.3
|
Notwithstanding the foregoing, in the event that any invoice by
LTS is not paid in total within **** of BDSI’s receipt
thereof, and BDSI did not dispute such invoice in good faith within
**** of BDSI’s receipt thereof, LTS may request ****
|
VI. Commercialization of Results/ Exclusivity
|
6.1
|
In the event BDSI or any Affiliate controlled by BDSI, or any
BDSI licensees decides to sell Product within the Territory,
(a) BDSI will engage or (b) in case of BDSI’s
Affiliate or licensee BDSI will assure such engagement of LTS as
the exclusive manufacturer of Product for such sale within the
Territory, for clarity, BDSI or BDSI´s Affiliate or licensee
shall purchase its requirements of Product for the Territory
exclusively from LTS. BDSI shall cause any such Affiliate and or
licensee to negotiate the terms of a Manufacturing and Supply
Agreement diligently and in good faith, provided, however, that LTS
after notification of BDSI of such Affiliate or licensee has agreed
in writing to BDSI after reasonable consideration, which shall not
be unreasonably withheld, to enter into negotiations with such
Affiliate or licensee. The general outlines of a Manufacturing and
Supply Agreement to be used in such event are attached hereto as
Annex 5. ****
|
|
6.2
|
BDSI may license and/or sublicense all of its rights, licenses,
and authorizations under this agreement including, but not limited
to distribution to a third party, and the use of third party
distributors, provided that BDSI provides written notification to
LTS of such license and/or sublicense.
|
|
6.3
|
BDSI and LTS shall, at all times, have the right to ****
|
|
6.4
|
LTS shall, at all times, have the right to manufacture for third
parties any product developed by LTS and/or a third party whether
or not such product contains the same or other ingredients as
Active Principle, or is used for the same indication as Product.
For clarity, LTS has no license in, to or under, and LTS is
prohibited from using or referring to, the BDSI Technology or BDSI
Confidential Information to conduct any of the activities described
in this Section 6.4.
|
VII. Grant of License for Purpose of Agreement
|
7.1
|
Subject to the terms and conditions of this Agreement BDSI
grants to LTS a **** right and license during the term of this
Agreement in and to the BDSI Technology and Patents solely to
develop the Process in the Territory and manufacture the Product in
the Territory for BDSI and its Affiliates under this Agreement.
Such license shall be non-assignable, except as set forth in
Section 7.2.
|
|
7.2
|
LTS shall have the right to assign all or any portion of its
rights granted under Section 7.1
|
8
Confidential
Treatment Requested For Certain
Portions Hereof
Denoted With “****”
|
|
and to delegate all or any portion of its obligations under this
Agreement to any Affiliate whilst it remains so, provided that
(i) such Affiliate is performing LTS’s obligations
hereunder, (ii) prior to the commencement of activities by an
Affiliate to perform its obligations hereunder, such Affiliate
shall have received all necessary validations, inspections and
regulatory approvals, and (iii) such assignment and delegation
shall not relieve LTS of its obligations hereunder.
|
|
7.3
|
Any Affiliate with which LTS effects such assignment and
delegation shall enjoy all of the rights and be subject to all of
the obligations hereby imposed on LTS except that any assignment of
LTS’ rights and delegation of LTS’ obligations under
this Agreement shall be non-assignable and shall not contain any
right to assign or delegate.
|
VIII. Intellectual Property
|
8.1
|
Use of Patents and Trademarks
|
8.1.1 LTS acknowledges that the
license of BDSI Technology for use by LTS in the Process
development or manufacturing of Product shall not grant to LTS the
right of any further license to such BDSI Technology (or any part
thereof) for any purpose whatsoever other than such work according
to this Agreement and, without limitation, shall not grant to LTS
the right of any license to Process the Product (or any part
thereof) in any way whatsoever other than as set out in the Product
Specifications.
8.1.2 For the avoidance of doubt
no right or license is granted or deemed to be granted hereunder or
in connection herewith, by estoppel or otherwise, with respect to
the BDSI Technology other than the express licenses set out in this
Agreement, and the grant of such license and the provision of the
BDSI Technology shall neither transfer to, nor create in favor of,
LTS any right of ownership therein. Except as expressly provided in
Section 9.1 with respect to Process Improvements, title to the
BDSI Technology and any other intellectual property, patents or
patent applications of BDSI shall at all times remain vested in
BDSI.
8.1.3 For the avoidance of doubt
no right or license is granted or deemed to be granted hereunder or
in connection herewith, by estoppel or otherwise, with respect to
the LTS Technology other than the express licenses set out in this
Agreement, and the grant of such license and the provision of the
LTS Technology shall neither transfer to, nor create in favor of,
BDSI any right of ownership therein. Except as expressly provided
in Section 9.1 with respect to Product Improvements, title to
the LTS Technology and any other intellectual property, patents or
patent applications of LTS shall at all times remain vested in
LTS.
|
8.2
|
No Rights by Implication
|
Nothing contained herein shall be construed as granting to LTS any
rights or implying any rights under any patents (including the BDSI
Patents) covering the Product or any right to use any information,
know-how or data covered thereby except as expressly provided
for
9
Confidential
Treatment Requested For Certain
Portions Hereof
Denoted With “****”
under Article VII for the performance of LTS’ obligations
under this Agreement.
8.3.1 Each party will promptly
notify the other party hereto if it receives notice that the
Process or Product infringes or allegedly infringes the proprietary
rights of any third party. Subject to the indemnification
procedures set forth herein, the parties will determine what
action, if any, should be taken (e.g. licenses), if it appears that
the Process or Product infringes the proprietary rights of a third
party.
8.3.2 a) &nbs
