EXECUTION COPY
CONFIDENTIAL MATERIALS OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. ASTERISKS DENOTE OMISSIONS.
EXCLUSIVE DISTRIBUTION AGREEMENT
--------------------------------
This
Exclusive Distribution
Agreement (the "AGREEMENT") is entered into as
of April 21, 2006 (the "EFFECTIVE DATE"), between Savient
Pharmaceuticals, Inc.,
a Delaware corporation
having offices at One Tower Center, East Brunswick, New
Jersey 08816 ("SAVIENT") and Cytogen Corporation., a Delaware
corporation having
offices at 650 College
Road East,
Suite 3100, Princeton, New Jersey 08540
("CYTOGEN").
RECITALS
--------
WHEREAS, Savient's
wholly owned subsidiary, Rosemont Pharmaceuticals Ltd.
("ROSEMONT"), has
developed a tamoxifen
oral solution for the treatment of
hormonally sensitive breast cancer;
WHEREAS, Savient owns
certain intellectual property relating to Rosemont's
proprietary tamoxifen formulation;
WHEREAS, Savient has
registered its oral liquid tamoxifen product in the
United States;
WHEREAS, Cytogen is interested in obtaining an exclusive license to
market,
promote and sell Savient's tamoxifen product in the United
States;
WHEREAS, on
February 8, 2006,
the parties executed a letter of intent,
which set forth the parties' intention to negotiate and enter into this
Agreement; and
WHEREAS, Savient,
Rosemont and Cytogen are entering into a Manufacture and
Supply Agreement contemporaneously herewith.
NOW,
THEREFORE,
in consideration of the premises and
the mutual promises
and covenants set forth below, the receipt and sufficiency of which are
hereby
acknowledged, Savient and Cytogen mutually agree to as follows:
I. DEFINITIONS
For
the purposes of this Agreement, the following terms, when written
with
an initial capital letter, shall have the meaning
ascribed to them
below. All
references to
particular
Appendices,
Articles and Sections shall mean the
Appendices to, and Articles and Sections of, this Agreement, unless otherwise
specified.
1.1
"ADVERSE EVENT
REPORTS" has the meaning set forth in Section 3.2.
1.2
"AFFILIATES"
means any corporation or other business entity
controlled by,
controlling, or under
common control with another entity, with
"control" meaning
direct or indirect
beneficial
ownership of more than
fifty
percent (50%) of the
voting stock of, or more than a fifty percent (50%)
interest in the income of, such corporation or other business
entity.
<PAGE>
1.3 "APPLICATION" means
a new application, or a supplement or an
amendment to an
existing application,
for marketing approval for a Licensed
Product in the Territory.
1.4
"BANKRUPTCY
CODE" has the meaning set forth in Section 12.3(c).
1.5
"BREACHING
PARTY" has the meaning set forth in Section 12.2.
1.6
"COMMERCIAL
LAUNCH" means the
first commercial
sale of a Licensed
Product by Cytogen to a Third Party in the Territory after
Regulatory
Approval
in the Territory. For
avoidance of doubt,
sales of Licensed Product for use in
clinical trials and
named patient sales shall not be considered in determining
the date of Commercial Launch.
1.7
"COMPETING
PRODUCT" has the meaning set forth in Section 4.5.
1.8 "CONFIDENTIAL INFORMATION" means all proprietary information
(including but not
limited to trade
secrets) and materials
(including but not
limited to data,
results, technical or
financial information)
disclosed by a
party to the other party.
1.9
"CONTROLLED"
means, with respect to
any intellectual property right,
that the party has a license to such intellectual property right and has the
ability to grant to the other party a sublicense to such
intellectual
property
right as provided for herein without violating the terms of any agreement or
other arrangements with any Third Party existing at the time such
party would be
first required hereunder to grant the other party such
sublicense.
1.10
"COVER" (including variations thereof such as "Covering" or
"Covered") means that the manufacture, use, sale, offer for sale,
or importation
of a particular
product would infringe a Valid Claim of a patent in the absence
of rights under such patent. The determination of whether a
particular product
is Covered by
particular Valid
Claims shall be made on a country-by-country
basis.
1.11
"CYTOGEN KNOW-HOW" has
the meaning set forth in Section 8.4.
1.12
"CYTOGEN PATENTS" has
the meaning set forth in Section 2.2.
1.13
"CYTOGEN TRADE DRESS"
has the meaning set forth in Section 9.2.
1.14
"DISCLOSING PARTY" has
the meaning set forth in Section 13.1.
1.15
"FDA" means the United
States Food and Drug
Administration
and any
successor agency thereto, and/or any equivalent foreign governmental agency,
depending on the context.
1.16
"FIELD" means all
human oncology uses.
1.17
"FILING PARTY" has the
meaning set forth in Section 10.2(b).
1.18
"INDEMNIFIED PARTY"
has the meaning set forth in Section 15.3.
1.19
"INDEMNIFYING PARTY"
has the meaning set forth in Section 15.3.
-2-
<PAGE>
1.20
"JOINT INVENTIONS" means any inventions relating to the Licensed
Product, whether
patented or not, that are jointly made during the period
beginning on the Effective Date and continuing until the end of the Term by
at
least one (1) Savient employee or person (either under a
contractual
obligation
or under the work-for-hire doctrine) required to assign or license
patent rights
covering such
inventions
to Savient or its Affiliate and at least one (1)
Cytogen employee or
person (either under a contractual obligation or under the
work-for-hire
doctrine) required to
assign or license
patent rights
covering
such inventions to
Cytogen or its
Affiliate, whether or
not other persons are
also joint inventors.
1.21
"JOINT PATENTS" means
any patents or patent applications Covering one
or more Joint Inventions.
1.22
"LICENSED HOUSE MARKS" means (i) the
corporate names of
Savient and
its Affiliates,
(ii) their trade
names, service marks, domain names, and
associated logos and
designs, and (iii) all
trademarks
identifying a
product
line of Savient
or its Affiliate, where such mark is owned by
Savient or its
successor-in-interest
and is used in
connection with the
sale or promotion of
Licensed Product in the Territory.
1.23
"LICENSED KNOW-HOW" means, except as otherwise set forth in this
Section 1.23,
all inventions, discoveries, trade secrets, information,
experience,
data, formulas,
procedures
and results in the Field, and
improvements thereon, including any information (whether patented,
patentable or
otherwise) regarding
all product
specifications,
processes, product
designs,
plans, trade secrets,
ideas, concepts, manufacturing, engineering and other
manuals and drawings,
standard operating procedures, flow diagrams, chemical,
pharmacological, toxicological, pharmaceutical, physical and
analytical, safety,
efficacy, stability,
quality assurance, quality control and clinical data,
research records,
compositions,
annual product
reviews, process validation
reports, analytical
method validation
reports, specifications for stability
trending and process controls, testing and reference standards for
impurities in
and degradation of
products, technical
data packages, chemical and physical
characterizations,
dissolution test
methods and results, formulations for
administration,
clinical trial reports, regulatory communications and
labeling
and all other
confidential or proprietary technical and business
information,
whether written
or oral and in whatever format kept of Licensed Product
(collectively,
"KNOW-HOW IN THE FIELD"), that is owned or Controlled by
Savient
or its Affiliates as of the Effective Date or that is developed or
Controlled by
Savient or its
Affiliates during the
Term, and which
Know-How in the Field is
reasonably required for using or selling Licensed Product.
1.24
"LICENSED PATENTS"
means all patent
applications owned or Controlled
by Savient alone or with any Third Party and all patent
applications
resulting
from Joint Inventions
Covering the
importation, sale or
offer for sale of the
Licensed Product in the Territory or any foreign jurisdiction or the use of the
Licensed Product
in the Field, including any addition, continuation,
continuation-in-part or division thereof or any substitute
application therefor;
any patent
issued with respect to such patent application, any reissue,
extension or patent
term extension of any
such patent,
and any confirmation
patent or registration
patent or patent of addition based on any such patent. A
list of the current Licensed Patents is attached as Schedule
1.24.
-3-
<PAGE>
1.25
"LICENSED PRODUCT"
means Savient's oral liquid tamoxifen product in
all dosage forms and formulations for use in the Field.
1.26
"LICENSED TRADEMARKS" means all trademarks, and all trademark
registrations and applications therefor, and all goodwill
associated therewith,
owned by Savient (except for any Savient housemarks or trade names) and
used in
connection with the
sale or promotion of Licensed Product in the Territory.
A
list of such Licensed Trademarks is attached as Schedule 1.26.
1.27
"LOSSES" has the
meaning set forth in Section 15.1.
1.28
"MINIMUM ROYALTY
PAYMENT" has the meaning set forth in Section 6.3.
1.29
"NET SALES" means the
total gross
sales of Licensed
Product in the
Territory invoiced by
Cytogen, its Affiliates or sublicensees (other than
Savient and
its Affiliates hereunder) to Third Parties, net of, where
applicable, any
deductions
specifically
related to a Licensed Product and
actually allowed,
incurred, paid or taken for (1) quantity or
trade discounts
actually granted,
but specifically excluding prompt payment and/or cash
discounts; (2) amounts repaid or credited, cash, credit or free
goods allowances
given by reason of chargebacks, vendor chargebacks, patient
vouchers or coupons,
retroactive price reductions including, without limitation, any
price reductions
imposed by courts or governmental authorities, correction of
billing errors, and
rebates or payments;
(3) amounts refunded or credited for Licensed Product that
was rejected,
spoiled, damaged, outdated, recalled, or returned, or any
reasonable returned
goods allowance
offered in lieu of the right of a customer
to return outdated
Licensed Product;
(4) wholesaler fees
under vendor managed
inventory agreements
and pharmacy benefit
management
fees for services;
(5)
actual shipping costs
to the extent billed directly by Cytogen to its customers
and supported by shipper's invoice; and (6) actual sales tax billed by
Cytogen
to its customers as a separate line item on an invoice,
as documented by
actual
invoices. If
Cytogen, its Affiliates or sublicensees receive non-cash
consideration for
Licensed Product sold or otherwise transferred (in any event
excluding any samples or Promotional Materials) to an independent Third Party
that is not an
Affiliate of Cytogen,
the fair market
value of such
non-cash
consideration on the date of the transfer as known to Cytogen,
or as reasonably
estimated by
Cytogen if unknown, shall be included the Net Sales for such
Licensed Product sold or otherwise transferred.
If a
Licensed Product is sold or offered for sale in combination with
other
products of Cytogen at
a price that is
reduced or discounted
from the normal
selling price of
Cytogen for such
Licensed Product by a percentage that is
greater than that offered on such other products, and if that discount is only
available with or is conditioned upon the purchase of such other
products, the
Net Sales determined as provided for in this Section shall be
adjusted as if the
discount or reduction
had been applied to all products of such combination
equally. For
greater certainty, the amount of (i) any cash or
early payment
discounts, or (ii) quantity discounts, rebates or allowances,
granted or taken
with respect to the total sales to a customer for multiple products
that include
Licensed Product shall not be deducted in calculating Net
Sales.
1.30
"NON-BREACHING PARTY"
has the meaning set forth in Section 12.2.
-4-
<PAGE>
1.31
"NON-FILING PARTY" has
the meaning set forth in Section 10.2(b)
1.32
"NON-PUBLISHING PARTY"
has the meaning set forth in Section 13.5.
1.33
"PROJECTED
PENETRATION
PERCENTAGE"
has the meaning set forth in
Section 6.3.
1.34
"NSP" shall mean the
net sales price for
the Licensed
Product in a
specified calendar quarter, and shall be calculated by dividing the
Net Sales of
the Licensed
Product during such quarter by the total number of units of
Licensed Product sold during such quarter.
1.35
"PRESCRIBER
DATA" shall mean data which measures prescriptions
written for the
Licensed Product by
each Target Prescriber
in the Territory
during a specified time period from a source mutually agreed in writing by the
parties.
1.36
"PROMOTION"
means
those activities normally undertaken by a
pharmaceutical company
to implement promotion
plans and strategies aimed at
encouraging the
appropriate
use of a particular
prescription
pharmaceutical
product under a common
trademark,
up to the point of
offering the product for
sale. When used as a verb, "Promote" shall mean to engage in such
activities.
1.37
"PROMOTIONAL
MATERIALS" has the meaning set forth in Section 9.4.
1.38
"PROMOTION PLAN" means
the then-current
marketing and promotion plan
established by Cytogen relating to the Promotion of Licensed
Product, as further
described in Section 4.1(b).
1.39
"PUBLICATION" has the
meaning set forth in Section 13.5.
1.40
"PUBLISHING PARTY" has
the meaning set forth in Section 13.5.
1.41
"QUARTERLY
TRX"
shall
mean the total number of tamoxifen
prescriptions written
during a specified
calendar quarter, as reported by a
reliable, national
pharmaceutical market
research company mutually agreed upon
by the parties.
1.42
"REASONABLE
DILIGENCE"
means commercially reasonable efforts
consistent with those used by pharmaceutical companies similarly situated to
Cytogen in
marketing and selling other pharmaceutical products similarly
situated to the Licensed Product.
1.43
"RECEIVING PARTY" has
the meaning set forth in Section 13.1.
1.44
"REGULATORY
APPROVAL"
means the granting of all governmental
regulatory approvals
required, if any, for
the sale of a Licensed Product in a
given country or jurisdiction within the Territory.
1.45
"ROSEMONT"
means
Savient's wholly owned subsidiary, Rosemont
Pharmaceuticals Ltd.
1.46
"SUPPLY AGREEMENT" has
the meaning set forth in Section 5.1.
-5-
<PAGE>
1.47
"TAIL PERIOD" has the
meaning set forth in Section 12.9(b).
1.48
"TERRITORY"
means the United
States, including its
territories and
possessions.
1.49
"TERM" has the meaning
set forth in Section 12.1.
1.50
"THIRD PARTY" means
any person or entity other than Savient, Cytogen,
and their respective Affiliates.
1.51
"VALID CLAIM" means a claim in any issued
patent that has not
been
disclaimed or held
unenforceable
or invalid by a decision of a court or
governmental agency of
competent jurisdiction by a decision beyond right of
review.
II. GRANT OF RIGHTS
---------------
2.1
Grants to
Cytogen.
-----------------
(a) Patent and Know-How License. Subject to the terms and
conditions
---------------------------
of this Agreement,
Savient grants to Cytogen, during the Term, the exclusive
(even as to Savient and its Affiliates) right and license, with the right to
sublicense, under the
Licensed Know-How and
Licensed Patents to import, sell,
offer to sell, market,
distribute,
promote and detail
Licensed Product in the
Territory solely
for use in the
Field. If during the Term, Cytogen or its
Affiliate challenges
the validity or
enforceability
in the Territory of any
patent within the Licensed Patents, then Savient shall have the right
(but not
the obligation) to terminate all licenses to Cytogen under this
Agreement.
(b) Trademark License.
Subject to the terms
and conditions of
this
-----------------
Agreement, Savient
grants to Cytogen,
during the Term, (i) the exclusive right
and license, with the
right to sublicense,
to use the
Licensed Trademark(s)
solely in connection
with the marketing, promotion and sale of the Licensed
Product in the Territory for use in the Field, and (ii) the
non-exclusive
right
and license, with the
right to sublicense,
to use the Licensed
House Mark(s)
solely in connection
with the marketing, promotion and sale of the Licensed
Product in the Territory for use in the Field. Cytogen acknowledges that all
of
its uses of the Licensed Trademark(s) and Licensed House
Mark(s) shall inure to
the benefit of Savient, and that Cytogen shall not acquire
any ownership rights
in and to the Licensed
Trademark(s) or the
Licensed House Mark(s) by virtue of
its uses of those trademarks hereunder.
(c) Right to
Sublicense. Cytogen
may sublicense its rights and
-------------------
licenses granted
under Sections 2.1(a) and 2.1(b) to any
Affiliate without
Savient's written
consent. However, Cytogen may sublicense its rights and
licenses granted
under Sections 2.1(a) and 2.1(b) to a Third Party
only with
Savient's express written consent, such consent not to be
unreasonably withheld,
conditioned or
delayed. It shall be
deemed reasonable to
withhold consent
to
sublicense a Third Party that is actively selling a competitive pharmaceutical
product with a similar indication in the Territory. If Cytogen sublicenses its
rights and licenses under this Agreement, Cytogen shall
nevertheless continue to
be liable for the performance of its obligations under this
Agreement, and shall
be fully responsible for the actions of its sublicensees.
-6-
<PAGE>
2.2
Grants
to Savient. Cytogen shall grant a non-exclusive,
---------------------
non-royalty-bearing license, during the Term, in the Field, in the
Territory, to
any Cytogen patents Covering the making, use, importation,
sale, offer to
sell,
marketing, distribution, promotion, detailing or development of
Licensed Product
where such
patents are either (i) owned or Controlled by Cytogen as of the
Effective Date,
or (ii) mature from
any patent
applications filed
during the
Term or claim any
inventions conceived
or reduced to practice
during the Term
(collectively, the
"CYTOGEN PATENTS").
At Savient's written
request, Cytogen
shall grant a
license (outside the Field, or outside the Territory, or
subsequent to the Term
of this Agreement)
to any Cytogen
Patent selected by
Savient under fair and reasonable terms to be negotiated by the
parties in good
faith. The royalty
rate or other financial terms of any such license agreement
shall be no less
favorable to Savient than the royalty rate or financial
terms
of any license
agreement between Cytogen and a Third Party relating to the
same
Cytogen Patent licensed to Savient. This Section 2.2 shall survive
termination
of this Agreement.
2.3
Third Party
Licenses. In the event
that Cytogen reasonably believes
--------------------
that a Third Party license is required for the making, using,
selling, offering
to sell, or importing of the Licensed Product in the Territory under
such Third
Party's intellectual property, it shall so inform Savient and
Savient shall have
the obligation to
obtain such license or sublicense on such terms agreed by the
parties in order to avoid infringing the Valid Claim of a Third Party.
In the
event that Savient fails to obtain such Third Party license for any
reason, then
Cytogen may obtain
such Third Party
license, whereupon [**]. In any event,
Savient shall
be responsible for any royalties or other payments (e.g.,
milestone payments, etc.) that become due to any Third Party with
respect to the
making, using, selling, offering to sell, or importing of
a Licensed Product in
the Field in the
Territory (except to
the extent such license is needed solely
in connection with Detailing, in which case Cytogen shall be
solely responsible
for any and all costs
associated with such
license). For clarity, any such
payments to a Third Party shall in no event be included in
the calculation
of
the Cost of Goods or as a deduction from Net Sales.
III. DEVELOPMENT; REGULATORY ISSUES
------------------------------
3.1
Development by
Savient.
----------------------
(a) Development in the Field. Savient and/or its Affiliates
shall be
------------------------
solely responsible,
at their sole cost and expense, for obtaining and
maintaining Regulatory
Approvals for commercial sale of the Licensed Product in
the Field in the Territory.
(b) Labeling Change.
Savient shall use commercially reasonable
----------------
efforts to file a sNDA (which requests a labeling change that
would allow [**].
If Savient fails to file such a sNDA on or before [**],
then Cytogen's
royalty
payment obligation
under section 6.2 shall be [**] until
such time as Savient
files a sNDA. When
Savient files such a sNDA (whether or not the FDA ultimately
approves the sNDA), the royalty obligation shall be restored to the
full royalty
rates specified in section 6.2.
(c) Development in Canada. If Savient should seek approval to
market
---------------------
the Licensed
Product in Canada, then Cytogen shall have a right of first
negotiation to license rights to Licensed Product in Canada. The parties shall
negotiate in good faith the terms of such license. The terms of such a license
agreement shall include an upfront payment to Savient equal to
the
-7-
<PAGE>
greater of [**] times Savient's fully burdened expenses in obtaining marketing
authorization in Canada, including the costs of any
clinical trials.
If after
three (3) months of good faith negotiations, the parties are unable to reach
agreement on the terms of a license agreement, then Savient shall
be free (i) to
market, promote,
detail and/or sell the
Licensed Product in Canada, or (ii) to
enter into an agreement with a Third Party to market,
promote, detail and/or
sell the Licensed Product in Canada.
(d) Other Development.
Savient and/or its
Affiliates, at their sole
------------------
discretion and their sole cost and expense, may develop the
Licensed Product for
indications outside the Field and/or develop other products for the
treatment of
breast cancer. If
Savient or its Affiliate decides to (i) develop the
Licensed
Product for indications outside the Field or (ii) develop an oral
liquid product
for the treatment of breast cancer, then Savient (or its Affiliate,
as the case
may be) shall keep Cytogen reasonably informed about such clinical
development,
but Savient
shall retain all decision-making authority with regard to such
development. In such
case, the parties
shall negotiate in
good faith to amend
this Agreement to
extend the scope of
Cytogen's license to
include such other
indications or
other oral liquid products. If the parties fail to reach
agreement on terms relating to the extension of the scope of
Cytogen's license,
the parties shall negotiate in good faith to amend this Agreement
to address the
issue of off-label use and cannibalization of sales of the Licensed Product
in
oncology by the new oral liquid tamoxifen product in the new
indication.
(e) Ownership of Data and Regulatory Approvals. Except as otherwise
-------------------------------------------
set forth in this
Agreement, all data
and information
generated by Savient
development activities
pursuant to this
Section 3.1 shall be
owned by Savient
and/or its Affiliates and shall be deemed Licensed Know-How.
Savient and/or its
Affiliates shall own
all Regulatory
Approvals. Savient
shall grant to Cytogen
the sole and exclusive
right to market the
Licensed Product
under Savient's
and/or its
Affiliates'
Regulatory
Approvals in the Field in the Territory.
Cytogen shall own all Prescriber Data, marketing (including the
Promotion Plan),
sales, distribution and other commercialization data and other
marketing, sales,
distribution and
commercialization
information resulting from the distribution
of the Licensed
Product by Cytogen
following the Effective Date. Upon request,
Cytogen shall make available to Savient any data or information
within Cytogen's
(or Cytogen's Affiliates') possession or control that Savient may
need to comply
with FDA reporting
requirements and other
regulations;
Cytogen shall
provide
copies of any
documents, in
electronic or paper
form as requested by Savient,
within three (3)
business days of Savient's request. Upon termination or
expiration of this Agreement for any reason other than Savient's
breach, Cytogen
shall (to the extent that Cytogen has a right to do so)
transfer ownership to
Savient of all then-current Prescriber Data, marketing
(including the Promotion
Plan), sales, distribution and other commercialization data and
other marketing,
sales, distribution
and commercialization information resulting from the
distribution of the Licensed Product by Cytogen. If the Agreement is terminated
because of Savient's breach, then Savient shall pay Cytogen
fair and reasonable
compensation to be
negotiated
in good faith by the
parties (but not to exceed
Cytogen's reasonable
out-of-pocket expenses
incurred in transferring such data
and information)
to compensate
Cytogen for its
efforts to transfer to Savient
the above-described data and information.
3.2
Adverse Event
Reporting. Cytogen and
Savient shall notify each other
-----------------------
of all information
coming into its possession concerning any and all side
effects, injury, toxicity,
-8-
<PAGE>
pregnancy or
sensitivity event
associated
with commercial or clinical uses,
studies,
investigations or tests with Licensed Product, throughout the world,
whether or not determined to be attributable to Licensed Product
("ADVERSE EVENT
REPORTS"). Each party
agrees to share relevant information it receives
(either
directly or
indirectly) with the
other party in a timely manner so as to allow
such other party to comply with its responsibility to process
pharmacovigilance
information under this Section 3.2.
IV. COMMERCIALIZATION
-----------------
4.1
Commercialization By Cytogen.
----------------------------
(a) General. During
the Term and in the Territory, Cytogen shall use
-------
Reasonable Diligence, at its sole cost and expense, for:
(i) the
marketing, Promotion, and Detailing of Licensed Product
for use in the Field;
(ii) accepting and
filling orders for Licensed Product received
by it or its Affiliates, including the distribution of
Licensed Product to fill
such orders (provided
that Savient shall inform and transfer to Cytogen any and
all orders
it or its Affiliates receive for the Licensed Products in the
Territory);
(iii) booking all sales of Licensed Product attributable to such
orders;
(iv) managing,
and performing visits to, national accounts,
including managed care, trade and government accounts;
(v) responding
to medical questions
or inquiries from
members
of the medical and
paramedical
professions and
consumers regarding
Licensed
Product, including the
distribution of
standard medical
information
letters
resulting from the
marketing activities of Cytogen's
Sales Representatives,
provided, however,
that the parties shall work together to formulate, and shall
mutually agree upon, responses to such inquiries; and
(vi) any other
activities reasonably
related to the
marketing,
Promotion, Detailing,
sale or distribution
of the Licensed Product, including
the handling/processing of returns, refunds, rebates and wholesaler
charge-backs
and administration
of managed
care contracts, federal and state government
contracts, rebate
contracts,
long-term
care contracts, performance-based
contracts and hospital purchasing contracts.
(b) Promotion and
Marketing Plan. At least [**] prior to the
-------------------------------
beginning of each
calendar year during the Term, Cytogen shall provide to
Savient a written
Promotion Plan and
Savient shall have an opportunity to
comment on the proposed plan, which shall include the following
information:
(i) number of
Sales Representatives
and composition
of sales
force;
(ii) projected
Details of Target Prescribers for the coming
calendar year,
broken down by calendar quarter and broken out into First
Position Details, Second Position Details and all other
Details;
(iii) a list of Target Prescribers;
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<PAGE>
(iv) non-binding
budget for
Promotion expenses for the coming
calendar year, broken down by calendar quarter;
(v) timing and
quantity of
distribution of samples of Licensed
Product;
(vi) description of
the then-current
sales force
compensation
plan for Cytogen's Sales Representatives, sales managers, directors and other
sales supervisors; and
(vii) Prescriber Data supporting Cytogen's Promotion Plan.
(c) Updates.
Cytogen shall keep Savient reasonably
informed of its
-------
commercialization
activities, including
any updates to its annual Promotion
Plan. Cytogen shall also notify Savient in writing of any
significant changes in
the market for the Licensed Product (promptly after such change
becomes known to
Cytogen) and of
Cytogen's decision to implement any significant changes in
Cytogen's marketing activities (prior to implementation of such
changes) related
to the Licensed Product.
4.2
Compliance with
Law. Cytogen shall comply with all legal requirements
-------------------
applicable to the
marketing, promotion
or sale of the Licensed Product in the
Territory, including, without limitation, any applicable statutory
or regulatory
requirements relating
to the Promotional
Materials of the Licensed Product in
the Territory. Savient shall maintain responsibility for labeling
compliance and
maintenance of the
Licensed Product, and notify Cytogen of any changes to
labeling at the time of FDA approval thereof; and Cytogen shall seek
Savient's
written approval prior to adopting or changing any packaging or
labeling for the
Licensed Product.
4.3
Promotional
Materials. Cytogen
shall provide samples
of Promotional
---------------------
Materials to
Savient at the time of first using or distributing of such
Promotional Materials
in the Territory.
Cytogen shall own all right, title and
interest in and to any Promotional Materials created by Cytogen
relating to the
Licensed Products,
but excluding the Licensed
Trademark(s)
and the Licensed
House Marks; provided,
that the Promotional Materials shall be used exclusively
in connection with the
Licensed Products in
accordance with the
terms of this
Agreement. All
Promotional Materials,
including all written
communications to
prescribers and other healthcare providers and patients,
shall be submitted
to
Savient for review and approval; preliminary drafts of Promotional Materials
shall be provided to Savient at least [**] in advance of planned
dissemination,
and final drafts of Promotional Materials shall be provided to
Savient at least
[**] in advance of planned dissemination. Where required by law, Savient
shall
submit Promotional
Materials to the FDA
(DDMAC) for review and approval or, at
Savient's option (but with Cytogen's consent), Savient shall designate
Cytogen
as Savient's agent for
the purpose of submitting Promotional Materials to the
FDA (DDMAC).
In the event that the FDA issues a letter objecting to any
promotional activities
by Cytogen that require corrective actions (e.g.,
issuance of
Dear Healthcare Professional letters, recall of Promotional
Materials and/or dissemination of corrected Promotional Material),
Cytogen will
bear all the cost related to these corrective activities.
4.4
Pricing.
As between the parties, Cytogen has the sole right to
-------
determine the price for Licensed Product for use in the Field.
However, subject
to applicable legal
requirements
and limitations and competitive factors,
Cytogen shall use
Reasonable Diligence
to maximize revenues
from sales of the
Licensed Product in the Territory.
-10-
<PAGE>
4.5
Non-Compete.
During the Term and
for a period of [**], Cytogen shall
-----------
not market,
distribute,
Promote, Detail or sell any [**] in the
Territory.
Notwithstanding the above, Cytogen is not precluded from
entering into a merger
or acquisition
of an entity that
markets, distributes,
Promotes, Details or
sells a Competing Product in the Territory, provided that the
primary purpose of
the merger or
acquisition
transaction was not to
acquire rights to the [*].
However, upon entering into such a transaction, Cytogen shall have [**] of
such
merger or acquisition to divest any and all [**].
V. MANUFACTURING
-------------
5.1
Commercial
Supply. Savient shall ensure that Rosemont shall supply to
-----------------
Cytogen all its
requirements
for Licensed Product (including samples and
clinical supplies),
subject to Cytogen's obligation to make royalty payments in
accordance with Section 6.2 and Finished Product Price payments
pursuant to the
Supply Agreement.
Concurrently with this Agreement, Rosemont and Cytogen shall
enter into a
manufacture
and supply agreement, in substantially the form
attached hereto as Exhibit A (the "SUPPLY AGREEMENT"), governing the commercial
supply of Licensed Product (including samples and clinical
supplies) by Rosemont
to Cytogen (including
the procedures for providing forecasts of Cytogen's
requirements, for
ordering Licensed Product, and for return and replacement
of
Licensed Product
that does not meet
product
specifications). For
purposes of
clarity, all
Licensed Product (other than samples and clinical supplies)
supplied by Savient and/or Rosemont to Cytogen hereunder shall be in finished
form and packaged
in primary
packaging,
ready to sell.
If Savient divests
Rosemont to a Third Party purchaser, Savient shall ensure that the
Third Party
purchaser assumes Savient's obligations under this Section 5.1.
VI. PAYMENTS
--------
6.1
Upfront Payment.
Cytogen shall pay to
Savient the sum of two million
---------------
dollars ($2,000,000),
of which two hundred thousand dollars ($200,000) was paid
upon execution of the letter of intent between the parties, and the
remainder of
which shall be paid within five (5) business days after the
Effective Date. This
upfront payment shall
be non-refundable
and non-creditable, and shall be in
addition to the other payments set forth below.
6.2
Royalties.
During the Term, Cytogen shall pay Savient royalties based
---------
on Cytogen's Net Sales of the Licensed Product. All royalty payments shall be
due within [**] after the close of each calendar quarter. Each
quarterly royalty
payment shall be equal to the applicable royalty rate (as set forth
in the table
below) multiplied by the Net Sales of Licensed Product for that
quarter.
Annual Net Sales
Royalty Rate
----------------
------------
Less
than or equal to [**]
[**]%
Over
[**]
[**]%
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<PAGE>
6.3
Minimum
Royalties. Beginning
in 2007, Cytogen shall pay Savient
-----------------
quarterly
minimum
royalties equal
to [**] multiplied by the Projected
Penetration Percentage multiplied by the total number of tamoxifen
prescriptions
written during such calendar quarter ("QUARTERLY TRX") multiplied by
the NSP of
the Licensed Product during such calendar quarter ("MINIMUM
ROYALTY PAYMENT").
The applicable
Projected Penetration
Rate shall be
determined by reference to
the following table:
Projected Penetration Percentage
Year
--------------------------------
----
[**]
[**]
[**]
[**]
[**]
[**] and later
(a) During any quarter in which the royalty payment due Savient as
calculated pursuant
to Section 6.2 is less
than the Minimum
Royalty Payment
calculated pursuant to
this Section 6.3,
then Cytogen shall pay Savient the
Minimum Royalty Payment rather than the royalty payments due under
Section 6.2 .
(b) For example, if the Quarterly TRx for the first quarter of
[**]
scripts, and the NSP
for that quarter
is $[**] per unit, then the Minimum
Royalty Payment for that quarter would be [**].
6.4
Sales Milestone
Payments. Cytogen
shall pay to Savient the following
------------------------
non-refundable,
non-creditable sales
milestone payments upon reaching the
cumulative sales
milestones
in the amounts set forth below based on the
corresponding
cumulative Net Sales of Licensed Products. Each milestone
payment
is due and payable no later than [**] after the end of the
calendar quarter in
which each milestone was achieved. For example, after cumulative
Net Sales reach
[**], Cytogen
shall pay $[**] to Savient within [**] after the end of the
calendar quarter in which cumulative Net Sales reached [**].
Cumulative Net Sales
Payment
--------------------
-------
[**]
$[**]
[**]
$[**]
[**]
$[**]
6.5
Third Party
License Payments. Cytogen shall be solely responsible for
----------------------------
any Third Party
license payments required to Detail the Licensed Product.
Savient shall be solely
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<PAGE>
responsible for any
Third Party license
payments required for
manufacturing,
using, selling,
offering to sell, or importing in the Territory of the Licensed
Product.
6.6
Payments on
Termination.
If this Agreement is terminated
(for any
------------------------
reason), Cytogen shall
continue to be responsible for payment of any undisputed
amounts accrued under
this Agreement or the Supply Agreement prior to the date
of termination
(including any royalty or sales milestone payments). Any such
undisputed amounts
shall be due and
payable within thirty (30) days after
termination. If
Cytogen is permitted to sell its inventory of Licensed Product
pursuant to Section 12.9, then Cytogen shall pay Savient
royalties pursuant to
Section 6.2 and sales
milestones pursuant
to Section
6.4 for any
cumulative
sales milestones
achieved after termination (during the Tail Period).
Such
payments shall be paid
within [**] of the end of the calendar quarter during
which such sales were made or during which such sales milestone was
achieved.
6.7
Sublicenses.
Any Net Sales or gross
sales by a Cytogen
sublicensee
-----------
shall be treated as Net Sales and gross sales, respectively, of
Cytogen, for the
purposes of payments
under this Article VI. If Cytogen grants any sublicenses
under this Agreement,
then Cytogen shall obtain the written commitment of such
sublicensees to abide by all applicable terms and conditions of this
Agreement,
but Cytogen shall
remain responsible
to Savient for the
performance
by such
sublicensee of any and all terms.
6.8
Interest.
In the event that
Cytogen is late in paying to Savient any
--------
amounts due under this
Agreement within the
applicable
time period set
forth
herein, such
payment shall bear interest at the average one-month London
Interbank Offered
Rate (LIBOR) as reported by
Datastream
(or a successor or
similar organization)
from time to time, unless such amounts are being disputed
by Cytogen in good faith.
VII. PAYMENTS, REPORTS, AND ACCOUNTING
---------------------------------
7.1
Monthly Royalty
Payments and Reports. Cytogen agrees to make payments
------------------------------------
within [**]
after the end of each calendar quarter covering all sales of
Licensed Product in the Territory by Cytogen for which invoices
were sent during
such calendar quarter.
Cytogen agrees to provide written reports to Savient
within [**] after the end of each calendar month covering all sales of
Licensed
Product in the
Territory by Cytogen
for which invoices
were sent during
such
calendar month. Each report shall state for the period in
question:
(a) for Licensed
Product disposed
of by sale,
the gross sales of
Licensed Product, and the detailed calculation of Net Sales;
(b) for Licensed
Product disposed of other than by sale, the
quantity, description, and nature of the disposition; and
(c) the calculation of
the amount
due to Savient for such month
pursuant to Article VI.
7.2
Accounting.
Cytogen agrees to keep
full, clear and
accurate records
----------
for a period of at least [**], setting forth the sales and other
disposition of
Licensed Product in
sufficient
detail to enable
royalties and compensation
payable to Savient hereunder to be determined.
-13-
<PAGE>
7.3
Audit.
Cytogen further agrees
to permit its books and records to be
-----
examined by a nationally recognized independent certified public
accounting firm
selected by Savient and reasonably acceptable to Cytogen and
retained solely for
the purpose of auditing the same at Savient's expense to verify
records provided
for in this Article
VII. Such audit shall be conducted exclusively for the
purpose of verifying
the accuracy of reports delivered by Cytogen to
Savient
pursuant to Sections 7.1 and 7.2 and the accuracy of Cytogen's
determination of
the amounts payable or
paid by Cytogen to Savient hereunder. Such audit shall
not be performed more
frequently that [**]
nor more frequently
than [**] with
respect to records
covering any specific period of time. Such examination is to
be made at the expense of Savient, except in the event that the
results of the
audit reveal a
discrepancy in favor
of Cytogen of [**] or more over the period
being audited, in which case reasonable audit fees for such
examination shall be
paid by Cytogen.
Cytogen shall pay to Savient within thirty (30) days after the
delivery of the
accountant's report
pursuant to this
Section any
undisputed
amounts determined by the accountant, and verified by Cytogen, to be
payable by
Cytogen to Savient. If
the accountant
determines
that Cytogen has overpaid
Savient, Savient
shall, at the election of Cytogen, credit Cytogen in an amount
equal to such
overpayment on the
immediately succeeding
invoice rendered to
Cytogen, or pay
Cytogen such amount within [**] after receipt of an invoice
therefor.
7.4
Methods of
Payments. All payments
due under this
Agreement shall be
-------------------
paid in United States
dollars by wire
transfer to a bank in
the United States
designated in writing
by Savient.
For the purpose of Net Sales for
Licensed
Product sold in a
currency other than
United States
dollars, Cytogen shall
convert the amount of Net Sales in foreign currencies using the
average exchange
rate (as reported
by Reuters or other reliable source of exchange rate
information, as agreed
to by the parties)
for the quarter in which the sales
occurred (in the case of royalty payments) or for the relevant
time period for
any other payments.
7.5
Taxes.
If provision is
made in law or
regulation of any
country of
-----
the Territory for withholding of taxes of any type, levies or other
charges with
respect to the any amounts payable hereunder to Savient,
Cytogen shall
promptly
pay such tax,
levy or charge for and on behalf of Savient to the proper
governmental authority, and shall promptly furnish Savient
with receipt of such
payment. Cytogen
sh
