Exhibit 4.38
CONFIDENTIAL COPY
DISTRIBUTION
AGREEMENT
This Distribution Agreement (this
“Agreement”) is entered into this 12 th day
of July, 2000, by and between Draximage, Inc., a Canadian
corporation (“Draximage”), and Syncor International
Corporation, a Delaware corporation
(“Syncor”).
WHEREAS, Draximage manufactures
Sodium Iodide I-131 solution (the “Product”) for oral
administration;
WHEREAS, Syncor is in the business
of compounding, marketing and selling radiopharmaceuticals;
and
WHEREAS, Draximage wishes to grant,
and Syncor wishes to obtain, the right to market, sell and
distribute the Product in the Territory (as defined below) under
the terms and conditions hereof;
NOW, THEREFORE, in consideration of
mutual covenants, agreements and conditions set forth herein, the
parties hereby agree as follows:
1.
DEFINITIONS
A.
“Calibration Date” shall
have the meaning ascribed to it in Section 4B.
B.
“First Sale” shall have
the meaning ascribed to it in Section 3.
C.
“Initial Term” shall
have the meaning ascribed to it in Section 3.
D.
“Product” shall mean
Sodium Iodide I-131 solution for oral administration, formulated in
accordance with the product specifications described on
Exhibit A attached hereto, whether labeled as generic, private
or other label.
E.
“Territory” shall mean
all the states, territories and possessions of the United States of
America and Puerto Rico.
F.
“Trade” shall mean
commercial radiopharmacies, hospitals, clinics and other private
and governmental health institutions in the Territory.
G.
“Trademarks” shall mean
all those trademarks owned by Draximage and associated with the
Product.
H.
“Independent
Radiopharmacies” shall mean ***
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2.
APPOINTMENT
A.
Grant . Draximage hereby appoints
Syncor as its authorized distributor to market, sell and distribute
the Product to the Trade in the Territory. For purposes of the
appointment, Syncor shall be entitled to compound unit doses for,
and distribute the Product in bulk form to, end users, such as
hospitals, clinics and mobile imaging services, as well as to
distribute the Product to third party radiopharmacy operators.
***
B.
Acceptance of
Appointment . Syncor hereby accepts this
appointment as distributor for the Product in the
Territory.
3.
TERM
Subject to the provisions of
Section 11, this Agreement shall remain in effect from the
date hereof until five years after Draximage makes the first sale
of the Product to Syncor (the “First Sale”) after the
Product has been approved by the U.S. Food and Drug Administration
(the “FDA”) for commercial sale as an oral therapy
solution in the United States (such five-year period hereinafter
referred to as the “Initial Term”). This Agreement
shall be automatically renewed for additional three-year terms at
the end of the Initial Term or any renewal term, as the case may
be, unless either party notifies the other party at least six
(6) months prior to the expiration of the Initial Term or a
renewal term, as the case may be, that it does not intend to renew
this Agreement upon expiration.
4.
RESPONSIBILITIES OF
SYNCOR
A.
Compliance With
Regulations . Syncor shall obtain, and
shall maintain in good standing, all required permits and licenses
necessary or advisable to distribute the Product in the Territory.
Syncor shall comply with all laws, rules and regulations in
force in the Territory, including those covering the sale of, and
the payment for, the Product.
B.
Standing Order
Quantity . Syncor
shall purchase from Draximage a *** sufficient to calibrate at
least 20 Curies of the Product by the time of the Calibration Date,
at the purchase price set forth in Section 6 below. The
Product shall be calibrated for noon on each *** that the Product
is delivered to Syncor (the “Calibration Date”), except
for Product shipped on the *** pursuant to Section 5D herein,
which shall be calibrated for ***. The maximum
pre-calibration period for any shipment of Product shall be five
(5) days from the date the shipment is shipped by
Draximage.
C.
Shipping Containers
. Syncor shall provide
Draximage, at Syncor’s expense, sufficient quantities of
shielded shipping containers to be used by Draximage to
transport
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shipments of the Product from its
Kirkland, Quebec manufacturing facility to the destinations
designated by Syncor.
5.
RESPONSIBILITIES OF
DRAXIMAGE
A.
Draximage shall manufacture, package
and label, store and ship the Product in a manner appropriate for
the Product and consistent with all applicable United States
Federal, state, and local laws, rules, and regulations, including
but not limited to those regulations established by the FDA and the
U.S. Nuclear Regulatory Commission.
B.
Draximage shall use its best efforts
to obtain as soon as reasonably possible, but before
September 30, 2000, the approval from the FDA for the
commercial sale of the Product in the U.S., and to have its
manufacturing facility in Kirkland, Quebec be fully licensed by the
FDA to produce the Product for sale in the U.S.
C.
Draximage shall ensure that each
Product conforms to the specifications described on Exhibit A
attached hereto and to Draximage’s then current technical
specifications or other descriptive materials supplied by Draximage
for the Product, and is not adulterated or misbranded within the
meaning of the U.S. Food, Drug and Cosmetic Act, 21 U.S.C. Sec. 201
et seq.
D.
Draximage shall make *** shipments
of the Product to Syncor on ***. The total quantity shipped to
Syncor each *** shall equal Syncor’s ***. Draximage shall
ship to Syncor ***, provided that on each shipping day the quantity
of Product shall not exceed current activity possession limits as
measured on the day of calibration. Shipments of the Product to
Syncor shall commence *** of the approval from the FDA for the
commercial sale of the Product.
E.
Draximage shall maintain in its
facility a *** surplus of the Product equal to *** requirements to
cover potential spot orders. Syncor shall not be responsible for
the costs and expenses to manufacture and store such surplus stock,
it being understood that Syncor’s sole obligation with
respect to such surplus is the payment for any quantities of the
Product actually ordered by Syncor from such stock.
F.
At the request of Syncor, Draximage
shall provide supplies of technical sales aids, such as an approved
Product monograph, to Syncor in quantities appropriate in light of
Syncor’s sales of the Product in the Territory.
G.
***
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6.
PRICE
Syncor’s price for any
standing order and spot order purchases shall be as
follows:
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Standing Order Quantity
(Curies)
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Price Per MilliCurie
(U.S.$)
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All prices are per milliCurie as of
the Calibration Date. ***
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7.
ORDERS; TERMS OF
SALE
Syncor shall order from Draximage
such quantities of the Product as are necessary to fulfill the
requirements of the Trade in the Territory. Draximage will ship
such quantities of the Product, FOB Draximage’s facility,
either to Syncor or to third party end users or other customers as
agreed upon by Draximage and Syncor.
8.
PAYMENT TERMS
***
9.
REGISTRATION AND
LABELING
A.
In the event that local laws or
regulations prevent Draximage from filing product registration
application(s), or if Draximage otherwise decides not to file any
such application(s) on its own behalf, at the direction of
Draximage, Syncor hereby agrees to file and maintain product
registration application(s) on behalf of Draximage at
Draximage’s expense.
B.
Syncor agrees and recognizes that
Draximage is the sole owner of the registration in the Territory of
the Product, regardless of whether any of these registrations is in
the name of Syncor or a third party. In the event of termination of
this Agreement, Syncor will return all copies of any registration
application(s) and accompanying documentation in its possession to
Draximage. At the request of Draximage, whether during the pendency
of this Agreement or after termination, Syncor shall legally
transfer any and all Product registration(s), to Draximage or its
designee, and shall provide full support to Draximage to facilitate
the prompt execution of such legal transfer. Draximage shall
reimburse Syncor for any costs incurred by Syncor in connection
with effecting such transfer.
10.
PRODUCT RECALLS
In the event that Draximage
determines, after consultation with Syncor, that a Product recall
in the Territory is necessary, then Syncor shall take all actions
appropriate in order to recall said Product Draximage shall
reimburse Syncor for all out-of-pocket expenses associated with any
such recall caused in whole or in part by the negligence of
Draximage or by Draximage’s failure to manufacture, package,
label, store or ship Product in accordance with the requirements of
this Agreement; provided, however, that if any Product recall or
withdrawal is caused in part by the negligence of Syncor, such
direct out-of-pocket expenses shall be apportioned between
Draximage and Syncor in relation to each party’s respective
negligent acts or omissions.
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11.
TERMINATION RIGHTS
Upon breach of any term of this
Ag
