EXHIBIT 10.60
ORPHAN MEDICAL INC.
AND
CELLTECH PHARMACEUTICALS LTD.
XYREM(R) LICENSE AND DISTRIBUTION AGREEMENT
* Denotes confidential
information that has been omitted from the exhibit and
filed
separateley, accompanied by a confidential treatment with the
Securities and
Exchange Commission pursuant to Rule 406 of the Securities
Act of 1933.
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TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS...................................................1
ARTICLE II
APPOINTMENT...................................................6
2.1
Appointment as
Distributor........................................6
2.2 License
Grant.....................................................7
2.3 Right of
First Negotiation for Other Indications..................7
2.4
Subdistributors/Sublicensees......................................8
2.5 Sales
Outside the Territory.......................................8
2.6 Option to
Expand the Territory....................................9
2.7
Competitive
Product...............................................9
ARTICLE III Regulatory
Approvals; COMPLIANCE WITH LAWS AND REGULATIONS....9
3.1 Marketing
Authorizations..........................................9
3.2 Regulatory
Timelines.............................................10
3.3 Other
Approvals..................................................11
3.4 Return of
Initial Payment........................................11
3.5 Product
Changes..................................................11
3.6 Clinical
Trials..................................................12
3.7 Compliance
With Applicable Laws..................................12
3.8 Approved
Product Packaging and Labeling; Relevant Testing........12
3.9 Steering
Committee...............................................13
ARTICLE IV
ROYALTIES AND MILESTONE PAYMENTS.............................14
4.1 Milestone
Payments...............................................14
4.2
Royalty..........................................................14
4.3 Minimum
Royalty Requirement......................................15
4.4 Royalty
and Milestone Payments...................................15
4.5 Exchange
Rates...................................................16
4.6
Taxes............................................................16
4.7
Reports..........................................................16
4.8 Books and
Records; Audit.........................................16
ARTICLE V
REGULATORY Compliance; product manufacture...................17
5.1 Regulatory
Reporting.............................................17
5.2 Product
Recalls..................................................17
5.3 Adverse
Event Notifications and Reporting........................17
5.4
Correspondence/Complaints........................................17
5.5
Translations.....................................................18
5.6
Manufacture;
Quality.............................................18
5.7 Product
Specifications...........................................18
5.8
Manufacturing Audits by
Celltech.................................18
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ARTICLE VI
MARKETING EFFORTS............................................19
6.1 Marketing
Efforts................................................19
6.2 Approved
Product Claims..........................................19
6.3
Development of Marketing
Strategy................................19
6.4 Marketing
Materials..............................................20
6.5 Sales and
Technical Literature Developed by Orphan Medical.......20
6.6 Marketing
Reports................................................20
6.7
Cooperation......................................................20
6.8 Named
Patient Basis Sales........................................21
ARTICLE VII PURCHASE
AND DELIVERY OF PRODUCT.............................21
7.1
Forecasts........................................................21
7.2
Pricing..........................................................22
7.3
Consignment of
Product...........................................22
7.4 Purchase
Orders..................................................24
7.5 Delivery
From Other Than Consignment Inventory...................25
7.6 Transfer
Price Variations........................................25
7.7 Payment
Terms....................................................26
7.8 Short
Supply Allocation..........................................27
7.9 Product
Expiration...............................................27
7.10 Certificate of
Analysis..........................................28
7.11
Storage..........................................................28
7.12 Rejection of
Shipments For Product Non-Conformance...............28
7.13 Testing of
Product Upon Receipt..................................29
ARTICLE VIII REPRESENTATIONS
AND WARRANTIES...............................29
8.1 Orphan
Medical Warranties........................................29
8.2
Disclaimer.......................................................32
8.3 Celltech
Warranties..............................................32
ARTICLE IX
INDEMNIFICATION..............................................33
9.1
Indemnification by Orphan
Medical................................33
9.2
Indemnification by
Celltech......................................34
9.3
Procedure........................................................34
9.4
Insurance........................................................34
ARTICLE X
Intellectual Property Rights Perfection and Use..............35
10.1 License
Perfection...............................................35
10.2 Quality
Standards................................................35
10.3 Use of
Trademark.................................................35
10.4 Registration and
Approvals.......................................35
10.5 Reservation of
Rights............................................36
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ARTICLE XI
INTELLECTUAL PROPERTY Infringements..........................36
11.1 Protection of
Intellectual Property..............................36
ARTICLE XII
IMPROVEMENTS.................................................37
12.1 Improvements by
Celltech.........................................37
12.2 Improvements by
Orphan Medical...................................37
12.3
Disclosure.......................................................37
ARTICLE XIII
CONFIDENTIALITY..............................................37
13.1 Proprietary
Information..........................................37
13.2
Exclusions.......................................................38
13.3 Third Party
Disclosure...........................................38
13.4 Third Party
Confidentiality Agreement............................38
13.5 Confidentiality
of Agreement.....................................39
13.6 Prior
Confidentiality Agreement..................................39
ARTICLE XIV TERM AND
TERMINATION.........................................39
14.1
Term.............................................................39
14.2 Mutual
Termination...............................................39
14.3 Termination by
Orphan Medical....................................39
14.4 Rights and
Obligations on Termination............................40
14.5 Partial
Termination..............................................40
14.6 Sell-Off
Period..................................................40
14.7
Survival.........................................................41
14.8 Assignment of
Authorizations.....................................41
14.9 Rights on
Termination for Cause..................................41
14.10 No
Compensation..................................................41
ARTICLE XV
ARBITRATION..................................................41
15.1 Litigation
Rights Reserved.......................................41
15.2
Arbitration......................................................41
15.3 Governing
Law....................................................42
ARTICLE XVI FORCE
MAJEURE................................................42
16.1 Events of Force
Majeure..........................................42
16.2
Notice...........................................................43
16.3
Hardship.........................................................43
ARTICLE XVII
MISCELLANEOUS................................................43
17.1
Notices..........................................................43
17.2
Waiver...........................................................44
17.3 Entire
Agreement.................................................44
17.4
Amendment........................................................44
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17.5
Headings.........................................................44
17.6 Relationship of
the Parties......................................44
17.7
Assignment.......................................................44
17.8
Severability.....................................................44
17.9
Publicity........................................................45
17.10
Counterparts.....................................................45
17.11 LIMITATION OF
DAMAGES............................................45
APPENDICES
Appendix A - Territory
Appendix B - Trademark and Patent
Rights
Appendix C - Product Specifications
Appendix D - Standard Operating Procedure
for Exchange of Safety Data
Appendix E - Quality Agreement
Appendix F - Celltech First Commercial Year
Forecast
Appendix G - Components of Standard
Manufacturing Cost and Transfer Price
Appendix H - Regulatory Assistance
Appendix I - Trademark Use Standards
SCHEDULES
ORPHAN MEDICAL
--------------
8.1(e)(ii) - Patent Rights, Trademarks and
Other Intellectual Property
8.1(e)(iii) - Infringement or Conflict
8.1(f)(i) - Contracts
8.1(f)(ii) - Default, Breach or
Violation
8.1(g)(i) - Claims
8.1(h) - Required Approvals
CELLTECH
--------
8.1(e)(i) - Contracts
8.1(e)(ii) - Default, Breach or
Violation
8.1(f)(i) - Claims
8.2(g) - Required Approvals
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XYREM LICENSE AND DISTRIBUTION AGREEMENT
This LICENSE AND DISTRIBUTION AGREEMENT (this "AGREEMENT") is made
and
entered into as of October 29, 2003
("EFFECTIVE DATE"), by and between Orphan
Medical, Inc., a corporation having its
principal place of business at 13911
Ridgedale Drive, Suite 250, Minnetonka,
Minnesota 55305, USA (together with its
Affiliates, "ORPHAN MEDICAL"), and Celltech
Pharmaceuticals, Ltd., a
biopharmaceutical company organized under
the laws of England having its
principal place of business at 208 Bath
Road, Slough, Berkshire SL1 3WE, United
Kingdom (together with its Affiliates,
"CELLTECH").
RECITALS
WHEREAS, Orphan Medical has developed, patented, registered with
the
FDA and currently sells the Product (as
defined below) in the United States, and
wishes to sell the Product to Celltech for
distribution in the Territory (as
defined below);
WHEREAS, Celltech has regulatory and marketing expertise necessary
to
review and re-format regulatory
pharmaceutical applications and to market
ethical pharmaceuticals targeted to
specified populations of patients in the
Territory; and
WHEREAS, Celltech wishes to register, package, label, promote,
market,
sell and distribute the Product in the
Territory, as hereinafter defined, and
Orphan Medical wishes to authorize Celltech
to do so, all on the terms and
conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual covenants
hereinafter
set forth and other good and valuable
consideration, the receipt and adequacy of
which are hereby acknowledged, Orphan
Medical and Celltech agree as follows:
ARTICLE I.
DEFINITIONS
"AFFILIATE" shall mean any corporation or non-corporate business
entity
controlled by, controlling or under common
control with, a party to this
Agreement. For the purpose of this
definition, "control" shall mean the direct
or indirect ownership or control of at
least fifty percent (50%) of the voting
stock of a corporation or a) in the absence
of ownership of at least fifty
percent (50%) of the voting stock of that
corporation, or b) in the case of a
non-corporate business entity, if it
possesses, directly or indirectly, whether
by virtue of an ownership interest of any
kind, by contract or otherwise, the
power to direct or cause the direction of
the management and policies of the
corporation or non-corporate business
entity or to elect or cause the election
of a majority of the board of directors or
other governing body of such
corporation or non-corporate business
entity.
"ADVERSE EVENT" means the ICH guideline definition as further
defined
in Appendix D.
"API" means the active pharmaceutical ingredient sodium oxybate
contained in the Product.
"CLAIMS" shall have the meaning provided in Section 9.1.
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"COMMERCIAL
FORECASTS" shall have the meaning provided in Section 7.1.
"COMMERCIALLY REASONABLE EFFORTS" means all those efforts that
are
commercially reasonable under the
prevailing circumstances, but in no event will
such efforts be less than those that the
applicable party would undertake for
its own purposes.
"COMPONENTS" means the dosing cups and lids, syringe, tamper
resistant
seal and PIBA included in the pack issued
to customers along with each bottle of
Product.
"CONTRACT YEAR" means each twelve (12) month period during the Term
of
this Agreement starting on 01 January and
ending on 31 December.
"CURRENT GOOD MANUFACTURING PRACTICES" or "CGMP" means the
regulations
set forth in 21 C.F.R. Parts 210 - 211, 820
and 21 C.F.R. Subchapter C (Drugs),
Quality System Regulations and the
requirements thereunder imposed by the FDA,
and the equivalent regulations and
requirements applicable in the Territory.
"DEA" means the United States Drug Enforcement Administration, or
any
successor thereto, having the
administrative authority to regulate the
scheduling and distribution of certain
drugs in the United States.
"EMEA" means the European Medicines Evaluation Agency or any
successor
entity which coordinates the scientific
review of human pharmaceutical products
under the centralized licensing procedure
in the European Union.
"FDA" means the United States Food and Drug Administration or
any
successor entity.
"FIRST COMMERCIAL SALE" means the first sale of the Product by or
on
behalf of Celltech to a wholesaler,
distributor or end-user in the Territory
following Registration of the Product in
the Territory.
"ICH" means International Conference on Harmonization of
technical
requirements for registration and
manufacturing of pharmaceuticals for human use
as may be amended from time to time.
"INDEMNIFICATION AMOUNTS" shall have the meaning provided in
Section
9.1.
"INDICATION" means any medical condition or set of symptoms for
the
treatment of which a medicinal product is
or may be prescribed.
"IMPROVEMENTS" means any and all inventions or discoveries
(including,
without limitation, manufacturing,
manufacturing processes and procedures,
analytical processes, procedures or methods
and analytical results) any route(s)
of synthesis, new formulations and/or
delivery forms of or with respect to the
API and/or Product (other than the current
form of the Product as defined
herein), including all information and data
relating thereto, whether patentable
or not, whether originating from Orphan
Medical or from Celltech, including
copyrights, trademarks, patents, patent
applications, trade secrets, NDAs and
Know How.
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"KNOW HOW" means data and information regarding toxicology,
pharmacology, clinical trials, analytical
methodologies, and use of the Product
that is necessary or useful for Celltech to
fulfill its obligations hereunder,
all of which is proprietary to Orphan
Medical.
"LICENSED INDICATIONS" means narcolepsy and its associated
conditions
including without limitation cataplexy and
excessive daytime sleepiness and any
other Indication(s) for which Celltech
obtains the right to develop the Product
pursuant to Section 2.3 hereof.
"LICENSED INTELLECTUAL PROPERTY" shall have the meaning provided
in
Section 2.2.
"MAJOR EUROPEAN COUNTRY(IES)" means those countries listed as such
on
Appendix A hereto, as such Appendix may be
amended from time to time in
accordance with Section 2.6 of this
Agreement.
"MANUFACTURING KNOW HOW" means all data, information and
materials
relating to the manufacture of the Product
that is not included in the Know How.
"MARKETING AUTHORIZATION" means a Regulatory Authority approval
necessary to commercially promote and
distribute the Product for a Licensed
Indication in the Territory including where
applicable, price and reimbursement
approval which must be granted for the
Product to be sold in such country.
Marketing Authorization as applied to any
country within the Territory does not
include the approval of a treatment IND,
pre-approval human use trials under a
protocol or distribution of a product under
an emergency use program, e.g.,
distribution on a Named Patient Basis.
"MARKET SALES PRICE" means the price for the Product approved by
the
Regulatory Authority in each country of the
Territory, or in countries where
pricing is not regulated, the price at
which Celltech sells the Product.
"MINOR EUROPEAN COUNTRY(IES)" means those countries listed as such
on
Appendix A hereto, as such Appendix may be
amended from time to time in
accordance with Section 2.6 of this
Agreement.
"NAMED PATIENT BASIS" means any distribution of Product by
Orphan
Medical or Celltech, as its designee, for
sale prior to Registration of the
Product through approval by a Regulatory
Authority in the Territory or as
otherwise allowed by local law.
"NDA" means a New Drug Application filed by Orphan Medical with the
FDA
or any equivalent successor application for
approval to commercially promote and
distribute the Product in the United
States.
"NET SALES" means for purposes of calculating the payments payable
by
Celltech to Orphan Medical pursuant to
Sections 4.1, 4.2 and 4.3 of this
Agreement, the gross sales prices received
by Celltech, its Subdistributors or
Sublicensees from sales of the Product, not
including Product samples, sold by
or for Celltech, its Subdistributors or
Sublicensees to independent third
parties in the Territory, after in each
case, deduction of the following items
allowed, given, granted, paid or borne by
or for Celltech, its Subdistributors
or Sublicensees with respect to sales of
the Product:
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(a) all bona fide promotional, cash, trade and quantity
discounts and rebates;
(b) all bona fide allowances to end users or credits (whether
in the form of a credit or free Product) on
account of price adjustments,
rejection or return, recalls, charge backs
or governmental program rebates
(including without limitation to managed
care organizations);
(c) all sales, consumption, excise and any other taxes,
tariffs, duties or government charges
(including any tax such as value added or
similar tax or government charge other than
income tax) with respect to sales of
the Product; and
(d) any charges for freight or insurance.
For avoidance of doubt, in order to avoid any double counting
when
determining Net Sales (i) Net Sales shall
not include any royalties, proceeds or
other amounts paid to Celltech by any
Sublicensee and (ii) if the gross sales
price received by a Subdistributor from one
or more sales has been counted, then
Net Sales shall not include any royalties,
proceeds or other amounts that are
paid by such Subdistributor to Celltech in
connection with such sales.
"OPTION COUNTRY" means a country listed as such on Appendix A
hereto
which is not currently located in the
Territory and which Celltech has the
option, in its sole discretion, to include
in the Territory, if after the
Effective Date, such Option Country joins
the European Union or European Free
Trade Area.
"ORPHAN DRUG DESIGNATION" means designation by the EMEA as an
orphan
drug, a drug for a specified rare disease
or condition, or the equivalent
designation by a Regulatory Authority of
any country of the Territory.
"PATENT RIGHTS" means European patent Number EP 1140061 and any
other
patents listed on Appendix B hereto, the
inventions described and claimed
therein relating to the Product and any
application for letters patent relating
thereto, including, without limitation a
continuation application, a continued
prosecution application, a continuation in
part application or a divisional
application, and any supplementary
protection certificates, extensions,
substitutions, confirmations, divisions,
continuations, continuations-in-part,
patents issuing thereon and reissues or
re-examinations thereof (each which
shall be automatically incorporated in and
added to this Agreement and shall
periodically be added to Appendix B
attached to this Agreement and made a part
hereof).
"PERSON" means any individual, general or limited partnership,
corporation, limited liability company,
association, business trust, joint
venture, Regulatory Authority, business
entity or other entity of any kind or
nature.
"PRODUCT" means Orphan Medical's proprietary pharmaceutical
product
Xyrem containing the API as its active
ingredient in bulk, unlabeled bottles,
for use as a treatment for the Licensed
Indications and all Components therefor
unless Celltech shall elect to source such
Components from a Third Party as
contemplated by Section 2.1(d).
"PRODUCT SPECIFICATIONS" means specifications of the Product as
approved in the Marketing Authorizations
including specifications of secondary
packaging, or as otherwise
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agreed upon by Orphan Medical and Celltech.
The Product Specifications contained
in the NDA as of the Effective Date are
attached as Appendix C hereto.
"PROPRIETARY INFORMATION" shall mean the terms and provisions of
this
Agreement and all non-public information or
data relating to the Product and the
subject matter hereof first communicated by
or on behalf of one party to the
other, whether in writing or orally,
including without limitation, all
scientific, clinical, commercial, financial
and business information and data,
know-how, compilations, formulae,
processes, plans, technical information, new
product information, compounds,
formulations, methods of product-delivery, test
procedures, product samples, specifications
and other information or data.
"REGISTRATION" shall have occurred and shall continue in each
country
in the Territory when the Marketing
Authorization required in respect of such
country shall have been issued and shall
continue to be effective.
"REGULATORY AUTHORITY" means the EMEA and each other regulatory
and
drug scheduling authority equivalent to the
FDA and DEA in the Territory or a
country in the Territory, which has
responsibility for scheduling drugs and
approving Marketing Authorizations.
"STEERING COMMITTEE" means the joint committee established pursuant
to
Section 3.9.
"SUBDISTRIBUTORS" means any subdistributor (exclusive of
pre-wholesalers, wholesalers and
Sublicensees) of the Product in the Territory
appointed by Celltech from and after the
Effective Date pursuant to this
Agreement.
"SUBLICENSEE" means any Third Party who is licensed by Celltech
to
promote, market, sell and distribute the
Product in the Territory in
consideration of the payment to Celltech of
a purchase price for the Product and
royalties on sales of the Product to Third
Parties.
"TERM" shall have the meaning provided in Section 14.1 hereof.
"TERRITORY" means the Major European Countries and the Minor
European
Countries set forth in Appendix A, as such
Appendix may be amended from time to
time pursuant to Section 2.6 of this
Agreement.
"THIRD PARTY" means a Person who or which is neither a party to
this
Agreement nor an Affiliate thereof.
"TRADEMARK" means the trademark set forth in Appendix B.
"TRANSFER PRICE" means the price(s) Orphan Medical charges Celltech
for
Product on a per bottle and per Component
basis; provided, however, that the
Transfer Price shall not exceed * for the
Product, exclusive of Components plus,
when Components are being purchased, 100%
of Orphan Medical's cost of
Components. The constituents comprising
Orphan Medical's standard manufacturing
cost are listed on Appendix G, which also
shows a Transfer Price of * for the
Product including Components as of the date
hereof.
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"WEIGHTED AVERAGE LIST PRICE" means Celltech's total annual gross
sales
receipts for the Product received from
Celltech's customers in the Territory
calculated based on the Market Sales Price,
divided by the quantity of Product
sold in the Territory.
ARTICLE II.
APPOINTMENT
2.1 Appointment as Distributor. Subject to the terms and conditions
of
this Agreement, Orphan Medical hereby
appoints Celltech, and Celltech accepts
such appointment, as Orphan Medical's
exclusive distributor of the Product in
the Territory. During the Term of this
Agreement, Celltech shall purchase all of
its requirements of the Product from Orphan
Medical as the sole supplier except
as follows:
(a) Celltech Manufacturing. Orphan Medical agrees to discuss
with Celltech the feasibility and
commercial viability of transferring the
manufacture of the Product to Celltech's
FDA approved facilities or qualifying
and registering Celltech as a back-up
manufacturer for the Product for the
Territory and/or for the rest of the
world.
(b) Third Party Manufacturing. If Orphan Medical is unable to
manufacture or supply the quantity of
Product ordered by Celltech in accordance
with this Agreement for any reason
whatsoever, including, without limitation, by
reason of an event described in Section
16.1 (Events of Force Majeure), Celltech
shall have the right at its sole election
to (A) take over the manufacture of
the Product or appoint a Third Party
manufacturer to fulfill Orphan Medical's
manufacturing and supply obligations under
this Agreement thereafter through the
remaining Term of this Agreement and/or (B)
purchase the API from Orphan Medical
and itself convert, or appoint a Third
Party manufacturer to convert, the API
into Product through the Term of the
Agreement; provided, however, such right
shall be exercisable only if (1) Orphan
Medical's inability to manufacture or
supply the Product could reasonably be
expected to result in a period of time of
at least three (3) months during which less
than fifty percent (50%) of Product
ordered pursuant to Celltech's last firm
purchase order would be available to
Celltech for commercial sale, (2) Celltech
provides reasonable evidence of its
ability to procure a Third Party
manufacturer or take over the manufacture of
the Product or the API more rapidly than
Orphan Medical could restart production
and supply of Product, and (3) Orphan
Medical's inability to manufacture or
supply Product did not result, wholly or in
part, from a breach by Celltech of
its obligations hereunder. Orphan Medical
shall provide Celltech with all
reasonable assistance in taking over or
obtaining and qualifying a Third Party
manufacturer, including without limitation,
licensing its Manufacturing Know-How
to Celltech and/or such Third Party
manufacturer solely for the purpose of
manufacturing the API and/or the Product
pursuant to this Section 2.1(b).
(c) Price for Manufacturing Changes. In the event Celltech
shall manufacture Product or API or cause
Product or API to be manufactured
pursuant to this Agreement, a manufacturing
royalty, transfer price or price of
manufacturing services to Orphan Medical,
and any other related terms therefor,
shall be negotiated in good faith.
(d) Component Sourcing. Celltech shall be permitted at any
time during the Term on sixty (60) days
prior written notice to Orphan Medical
to cease purchasing some or all Components
from Orphan Medical and purchase some
or all of the Components directly from
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Orphan Medical's suppliers or qualify
another Third Party(ies) to supply
Components; provided that, subject to
Sections 7.7 and 7.12, Celltech must
purchase all Components delivered by Orphan
Medical pursuant to a firm order
regardless of whether such delivery is made
after Celltech delivers notice to
Orphan Medical of its intent to purchase
the Components from Orphan Medical's
suppliers or another Third Party(ies).
Celltech shall bear any and all costs
associated with qualifying any Third
Party(ies) to supply Components pursuant to
this Section 2.1(d); provided that if
Orphan Medical desires to purchase the
same Components from such Third Party(ies)
as Celltech is purchasing, then
Orphan Medical and Celltech shall each bear
fifty percent (50%) of any such
costs.
2.2 License Grant. Subject to the terms and conditions of this
Agreement, Orphan Medical hereby grants
Celltech an exclusive nontransferable,
royalty-bearing right and license (with the
right of sublicense, as specifically
set forth herein), to use the NDA, Know
How, Trademark, Patent Rights and all
Improvements and Proprietary Information of
Orphan Medical related thereto or to
the Product together with the goodwill
associated therewith (the "LICENSED
INTELLECTUAL PROPERTY") during the Term,
solely in the Territory, and solely for
the purposes of (i) preparing applications
for Marketing Authorizations and
obtaining and maintaining Registrations and
packaging, labeling, promoting,
marketing, selling and distributing the
Product under the Trademark in the
Territory solely for the Licensed
Indications and (ii) exercising its other
rights under this Agreement including those
provided in Articles X and XI hereof
and making or having made API and/or
Product but only as provided in Section
2.1. Except as set forth in Section 6.8, no
license is granted to Celltech
hereunder for any rights to market the
Product for other Indications. Except as
provided in Section 14.6, the license set
forth above shall terminate
automatically upon termination or
expiration of this Agreement. Subject only to
the foregoing express license grant and its
other rights as herein provided,
Celltech shall not have and shall not
assert any claim, right, title or interest
in or to the Licensed Intellectual
Property.
2.3 Right of First Negotiation for Other Indications.
(a) Negotiation Notice. If, during the Term of this Agreement,
Orphan Medical desires to pursue further
development of the Product in the
Territory for one or more Indications other
than the Licensed Indications, or in
the Option Countries or in Australia for
the Licensed Indications or one or more
Indications other than the Licensed
Indications, Orphan Medical shall provide
written notice to Celltech (the
"NEGOTIATION NOTICE") of its intent to negotiate
an agreement therefor. The Negotiation
Notice shall identify the relevant
country or countries and Indications.
Delivery of a Negotiation Notice shall
create a mutual obligation to negotiate in
good faith on an exclusive basis for
the grant to Celltech of exclusive rights
to the Product for the specified
countries for such Indication(s). If no
response is received within ninety (90)
days after delivery of the Negotiation
Notice to Celltech, the offer shall be
deemed declined, and Orphan Medical may
then negotiate with any Third Party for
the grant of any license for the Product
for such countries for such
Indication(s) subject, however, to the last
sentence of Section 2.3(b).
(b) Procedure of Negotiations. The parties shall have ninety
(90) days from the date Orphan Medical
receives Celltech's response to the
Negotiation Notice to negotiate in good
faith (and on a confidential basis), and
enter into a letter of intent, term sheet
or final agreement with regard to, as
applicable, Celltech's distribution of the
Product in the Territory for
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the new Indication(s) or in the Option
Countries or Australia for the Licensed
Indications or one or more Indications
other than the Licensed Indications. In
the event that (i) Celltech shall have
failed to have responded to the
Negotiation Notice within the 90-day period
provided in paragraph (a) above or
(ii) within the 90-day period provided in
this paragraph (b) Orphan Medical and
Celltech have not entered into such letter
of intent, term sheet or final
agreement, Orphan Medical shall have no
further obligation to undertake or
continue negotiations with Celltech for
such license, and Orphan Medical shall
be free to commence negotiations for a
license to the Product for such countries
for such Indication(s) with any Third Party
subject to the following: (i) if a
letter of intent, term sheet or final
agreement with a Third Party shall not
have been signed by Orphan Medical and such
Third Party within two hundred
seventy (270) days of the termination of
Celltech's right of first negotiation,
then Celltech's right of first negotiation
shall again become effective on the
terms herein provided and (ii) without
Celltech's prior written consent, the
terms and conditions agreed by Orphan
Medical with such Third Party may not be
in the aggregate materially more favorable
to such Third Party than those last
offered to Celltech.
(c) Option Countries. If Orphan Medical shall determine to
enter into a license for the Product with a
Third Party in an Option Country
upon expiration of Celltech's right of
first negotiation pursuant to Section
2.3(b) above, such license shall contain a
provision automatically terminating
such License should such country
subsequently join the European Union or
European Free Trade Area during the Term
and Celltech shall have exercised its
Option under Section 2.6 as to such
country.
(d) No Trademark License. If pursuant to this Section 2.3
Orphan Medical licenses to a Third Party
the Product in the Territory for one or
more Indications other than the Licensed
Indications or in the Option Countries
or Australia for one or more Indications
other than the Licensed Indications,
then such Third Party shall be obligated to
market the Product under a trademark
different from the Product Trademark and
Orphan Medical shall not grant, license
or otherwise transfer to such Third Party
any rights to the Trademark or
otherwise permit any use of the Trademark
by such Third Party.
2.4 Subdistributors/Sublicensees. Celltech may appoint
Subdistributors
and Sublicensees with the prior written
approval of Orphan Medical, which
approval shall not be unreasonably
withheld. No such appointment or delegation
shall relieve Celltech from any obligations
hereunder, and each agreement with a
Subdistributor or Sublicensee shall include
terms ensuring the protection of
Orphan Medical's rights under this
Agreement. Celltech shall guarantee and be
responsible for the making of all payments
due, and the making of reports
required under this Agreement by its
Subdistributors and Sublicensees, and their
compliance with all applicable terms of
this Agreement. All agreements between
Celltech and its Subdistributors and
Sublicensees shall include a provision
prohibiting the further appointment of
Subdistributors or Sublicensees, as the
case may be, and a provision terminating
the Subdistributor or Sublicensee
agreement to the extent such agreement
relates to the Product in the Territory
upon termination of this Agreement for any
reason.
2.5 Sales Outside the Territory. Except as otherwise set forth in
this
Agreement, Celltech shall not distribute,
sell or otherwise provide the Product
outside of the Territory and shall not
solicit customers for the Product outside
the Territory or establish any office
through
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<PAGE>
which orders are solicited or any depot at
which inventories of the Product are
stored outside the Territory. Celltech
shall not sell the Product to customers
outside the Territory, provided that
nothing herein shall preclude Celltech from
selling the Product to any customer,
wherever located, who purchases Product
with a view to its use within any country
of the Territory.
2.6 Option to Expand the Territory. If, after the Effective Date,
an
Option Country joins the European Union or
European Free Trade Area, Celltech,
in its sole discretion, may add such Option
Country to the Territory and may
designate such Option Country as a Major
European Country or a Minor European
Country. Celltech shall notify Orphan
Medical of its decision within thirty (30)
days after the date Celltech first learns
of such country joining the European
Union or European Free Trade Area, and, if
Celltech so chooses to add such
Option Country to either the Major European
Countries or Minor European
Countries, then Appendix A hereto shall be
amended to so reflect such addition.
2.7 Competitive Product. Orphan Medical acknowledges that (i)
Celltech
has developed and is marketing
methylphenidate in certain countries within the
Territory for Indications other than the
Licensed Indications, but that
methylphenidate is occasionally used on an
off-label basis to treat the Licensed
Indications; (ii) Celltech is marketing
dexedrine in the United Kingdom for the
Licensed Indications; and (iii) Celltech
will be marketing Equasym IR in France
for the Licensed Indications. With the
exception of the off-label use of
methylphenidate in the Territory, dexedrine
in the United Kingdom, and Equasym
IR in France, Celltech shall not, for five
(5) years from the Effective Date of
this Agreement, either directly or
indirectly through subdistributors,
sublicensees or otherwise, develop,
manufacture, promote, market or distribute
products in the Territory that are
competitive with the Product; provided,
however, nothing herein shall prohibit
Celltech from acquiring, by stock
purchase, asset purchase or merger any
company, or division of a company, that
is developing, marketing, manufacturing,
promoting or distributing a competitive
product where the annual sales (or in the
case of a product in development, the
projected sales) of such competitive
product in the Territory are less than
twenty percent (20%) of such company's or
division's total annual sales. For
purposes of this Section 2.7, a competitive
product shall be one that: (a) is
approved for prescription for a Licensed
Indication or (b) is used off-label for
a Licensed Indication and such off-label
sales comprise more than twenty percent
(20%) of such product's sales in the
Territory or more than twenty percent (20%)
of the sales of the Product in the
Territory.
ARTICLE III.
REGULATORY APPROVALS;
COMPLIANCE WITH LAWS AND REGULATIONS
3.1 Marketing Authorizations. Celltech shall prepare and submit
to
Orphan Medical, (i) within sixty (60) days
of the Effective Date, a written plan
for obtaining approval from the EMEA to
commercially promote and distribute the
Product for the cataplexy Licensed
Indication and (ii) within one hundred twenty
(120) days of the Effective Date, a written
plan for obtaining approval to
commercially promote and distribute the
Product for the cataplexy Licensed
Indication from the Regulatory Authority of
each country in the Territory not
covered by an EMEA Registration. On the
basis of Orphan Medical's NDA and the
Know How and related Proprietary
Information delivered pursuant to Section 3.2,
Celltech shall collect, assemble, organize
and format all necessary components
required to apply for such approvals, and
shall
9
<PAGE>
submit such materials to the appropriate
Regulatory Authorities in accordance
with Section 3.2. Celltech shall maintain,
at its own expense, the Registrations
and other authorizations necessary to
import, label, promote, market, sell and
distribute the Product in the Territory.
Orphan Medical shall provide, at its
own cost and expense (but subject to the
limitations set forth in Section 3.2),
reasonable assistance to Celltech in the
acquisition of such Registrations,
including without limitation, the services
set forth on Appendix H hereto. All
applications for Marketing Authorizations
for the Product shall be submitted in
the name of Celltech and all Marketing
Authorizations for the Product shall be
assigned to Orphan Medical upon termination
of this Agreement for any reason.
Celltech shall ensure that all pages of
documents submitted to Regulatory
Authorities for the purpose of obtaining
Registrations and Marketing
Authorizations shall be coded as
confidential.
3.2 Regulatory Timelines. (a) Within thirty (30) days of the
Effective
Date, Orphan Medical shall (i) transfer the
Orphan Medical Drug Designation in
the Territory from IDIS World Medicines to
Celltech, and (ii) provide Celltech
with the NDA and the Know How and the
related Proprietary Information to enable
Celltech to prepare and timely file the
applications to commercially promote and
distribute the Product for the cataplexy
Licensed Indication in the Territory.
Celltech shall use its Commercially
Reasonable Efforts to cause a pre-submission
meeting to be held with the EMEA in respect
of the cataplexy Licensed Indication
within one hundred eighty (180) days of the
Effective Date. Within thirty (30)
days of such meeting with the EMEA,
Celltech shall report to Orphan Medical
about the content of such meeting and
advise Orphan Medical as to whether
additional data or documentation or
additional action is required or deemed
reasonably necessary by Celltech to obtain
approval from the EMEA to
commercially promote and distribute the
Product for the cataplexy Licensed
Indication. If additional data or
documentation or additional action is required
or deemed reasonably necessary by Celltech
to obtain such approval and Orphan
Medical has or could readily produce such
data or documentation or take such
additional action, Orphan Medical shall so
provide the additional data or
documentation or take the additional action
at its sole cost and expense;
provided, however, that in the event the
cost of any single study or other
report required by the EMEA or deemed
reasonably necessary by Celltech shall
exceed * or the aggregate cost of all
studies or other reports required by
the EMEA or deemed reasonably necessary by
Celltech shall exceed *, Celltech
and Orphan Medical shall meet and discuss
in good faith the apportionment of
such costs between them. Provided that
Orphan Medical's NDA and other relevant
Know How and related Proprietary
Information are deemed reasonably sufficient by
Celltech, Celltech shall, at its own
expense, file the application for approval
of the Product by the EMEA as an orphan
drug.
(b) Following approval from the EMEA to commercially promote
and distribute the Product for the
cataplexy Licensed Indication, Celltech shall
use Commercially Reasonable Efforts to
obtain Registration of the Product for
the cataplexy Licensed Indication (i) in
the Major European Countries no later
than December 31, 2005 (the "REGISTRATION
DATE") and (ii) in the other countries
in the Territory within such time frames as
are consistent with the regulatory
plan submitted by Celltech to Orphan
Medical as provided in Section 3.1; unless,
in any such case, additional data or
documentation or additional action is
required, in which case, the timeframe
shall be extended by the time required to
generate the additional data or
documentation or take the additional action.
Where a Regulatory Authority requires
additional data or documentation or
additional action that is not within Orphan
Medical's sole obligation as
10
<PAGE>
delineated in paragraph (a) above and that
neither party has or could readily
produce or which cannot readily be taken by
either party, the parties shall
negotiate in good faith the terms upon
which such data or documentation should
be generated or actions taken by either
party, if at all, or failing agreement,
to terminate this Agreement in so far as it
relates to a country in the
Territory not a member of the European
Union or the European Free Trade Area.
(c) Anything herein to the contrary notwithstanding, (i)
except as provided in paragraphs (a) and
(b) above, in connection with providing
additional data and documentation or taking
additional actions pursuant to this
Section 3.2, each party shall be
responsible for all costs and expenses of its
respective employees, agents, contractors,
sublicensees and subdistributors, and
(ii) no party shall be obligated to conduct
any clinical trials after the
Effective Date.
(d) Following the development by Orphan Medical of a
supplemental NDA for the excessive daytime
sleepiness Licensed Indication, which
such supplemental NDA shall be developed by
Orphan Medical as soon as
practicable after the Effective Date, a
copy thereof shall be delivered to
Celltech to enable it to prepare an
application to the EMEA for approval to
commercially promote and distribute the
Product in the Territory for the
excessive daytime sleepiness Licensed
Indication. Such application shall be
filed by Celltech no later than the later
of (i) issuance of the license to
Celltech by the EMEA for the cataplexy
Licensed Indication or (ii) one hundred
eighty (180) days after Orphan Medical
delivers such supplemental NDA to
Celltech, unless additional data or
documentation or additional action is
required from Orphan Medical or a Third
Party, in which case the one hundred
eighty (180) days shall be extended by the
time required to generate the
additional data or documentation or take
the additional action.
3.3 Other Approvals. Celltech undertakes and covenants that as soon
as
reasonably practicable following the
Effective Date it shall take all other
actions to obtain and maintain during the
Term all other approvals, licenses and
permits necessary to import, promote,
market, sell and distribute the Product in
the Territory.
3.4 Return of Initial Payment. In the event that following and as
a
result of the pre-submission meeting with
the EMEA, the parties mutually agree
that it is not possible or commercially
viable under the prevailing
circumstances to obtain Registration for
the Product in the Major European
Countries, the parties may agree to
terminate this Agreement, and such
termination shall be subject to the terms
of Article 14. * ountries is not
possible or commercially viable under the
prevailing circumstances, then they
shall submit the matter to arbitration in
accordance with the provisions of
Section 15.2 of this Agreement.
3.5 Product Changes. Orphan Medical shall give Celltech ninety
(90)
days prior written notice of any major
formulation or packaging change to the
Product being requested or required by the
FDA, or any other U.S. Regulatory
Authority, whenever such change affects a
Registration in any country within the
Territory. Orphan Medical may change the
Product, or analytical test methods as
it deems appropriate, provided Orphan
Medical continues to supply
11
<PAGE>
Product conforming to the Product
Specifications then in effect until such times
as the Marketing Authorizations are amended
to reflect such changes. In the
event of such changes, Celltech shall be
solely responsible for additional
submissions and/or regulatory updates which
may be required by the Regulatory
Authorities in the Territory, provided that
all necessary data and information
shall be furnished by Orphan Medical at
Orphan Medical's expense for such
purposes, and provided; further that in no
event shall Celltech's failure to
obtain any required amendments to the
Marketing Authorizations to reflect such
additional submissions and/or regulatory
updates, relieve Orphan Medical of its
obligation to supply Product conforming to
the Product Specifications. In the
event a Regulatory Authority in any country
in the Territory requires a
formulation or packaging change to the
Product, Orphan Medical and Celltech
shall cooperate to develop a mutually
agreeable plan to address the regulatory
requirement, and, if necessary, to include
the production of separate lots, at
Celltech's expense, for the Territory. In
the event Orphan Medical and Celltech
mutually agree it is not commercially
reasonable to meet such requirements,
Celltech shall cease promoting, marketing,
selling and/or distributing the
Product in that country in the Territory
and shall promptly terminate the
Registrations in such country. If the
parties are in disagreement as to whether
it is commercially reasonable to meet such
requirements, then they shall submit
the matter to arbitration in accordance
with the provisions of Section 15.2 of
this Agreement.
3.6 Clinical Trials. The parties shall keep one another fully
and
currently informed as to all tests and
trials that they intend to carry out for
purposes of compliance with regulatory
requirements in the Territory or that
might affect Marketing Authorization
applications or Registrations in the
Territory. The parties shall cooperate in
the design of such tests and trials in
order to ensure to the maximum possible
extent that duplication of effort shall
be avoided, and that the results shall be
suitable for filing with the
Regulatory Authorities in the Territory and
shall otherwise be useful for
purposes of meeting all applicable
regulatory requirements. Without limiting the
generality of the foregoing, the parties
shall use their Commercially Reasonable
Efforts to ensure that all clinical trials
undertaken after the Effective Date,
if any, shall be designed and conducted in
accordance with good clinical
practices and good laboratory practices as
established for both the United
States and the European Union.
3.7 Compliance With Applicable Laws. Celltech shall comply with
all
applicable laws and regulations of each
country in the Territory (including,
without limitation, any laws or regulations
in the Territory governing the
distribution of a scheduled drug, as
designated under regulations promulgated by
the DEA). Celltech shall also comply with
all U.S. laws applicable to the
Registration, promotion, marketing, sale
and distribution of the Product in the
Territory, including but not limited to
U.S. Export Administration Regulations,
the US Foreign Corrupt Practices Act and
all regulations promulgated by the DEA.
Celltech shall comply with all Marketing
Authorizations issued in the Territory.
3.8 Approved Product Packaging and Labeling; Relevant Testing.
After
the Product receives a Marketing
Authorization in any country of the Territory,
Celltech shall package and label the
Product and shall include all required
labeling for Product sold in such
country(ies). For all orders submitted by
Celltech after Registration is received in
a particular country, Orphan Medical
shall supply to Celltech unlabeled bottles,
and final labeling and packaging of
Product for such country(ies) shall be
completed by Celltech. After the Product
receives Marketing Authorization in a
country in the Territory, Celltech shall
be solely responsible for all final
12
<PAGE>
release testing in such country(ies) and
for ensuring in such country(ies) that
the Product labeling and packaging complies
with the Marketing Authorizations
and all other applicable laws of each such
country in the Territory. Celltech
shall provide Orphan Medical with copies of
all foreign language labels. To the
extent permitted by applicable laws and
regulations in each country in the
Territory, all labels shall identify Orphan
Medical as the manufacturer of the
Product for Celltech.
3.9 Steering Committee. Within a reasonable period of time after
the
Effective Date, Orphan Medical and Celltech
shall form a Steering Committee made
up of commercial and technical employees
from both companies that shall have
certain decision-making authority, and
provide oversight for the administration
of this Agreement. Each party shall
maintain two (2) members on the Steering
Committee with other members added as
needed. The parties shall each select one
of its representatives to serve as a
co-chairperson of the Steering Committee.
The Steering Committee shall have the
authority to conduct the following
activities and such other activities as may
be agreed to in writing by the
parties: (a) review ongoing regulatory
issues, (b) review the medical aspects of
standards of care in the Territory, (c)
review clinical developments across
territories, (d) review marketing campaigns
and new marketing plans, (e) review
sales activities and results, (f) review
aspects of Product manufacturing
campaigns and Product forecasts,
consignment and non-consignment inventory
stocks and ordering, and (g) review the
arrangement for distributing Product on
a Named Patient Basis. In the event and to
the extent that the Steering
Committee is unable to come to a consensus
on any matter relating to the
development or manufacture of the Product
or the Registration, packaging,
labeling, promoting, marketing, sale or
distribution of the Product outside the
Territory, the views of the Orphan Medical
Steering Committee members shall
prevail. In the event and to the extent
that the Steering Committee is unable to
come to a consensus on any matter relating
to the Registration, packaging,
labeling, promoting, marketing, sale or
distribution of the Product within the
Territory, the views of the Celltech
Steering Committee members shall prevail.
Notwithstanding the foregoing, in the event
a particular matter for which there
is no consensus of the Steering Committee
could, in the good faith judgment of
the party who does not have the ultimate
decision making authority as to such
matter (as provided in the previous two
sentences), materially affect the rights
or obligations under this Agreement of such
party, Orphan Medical and Celltech
agree to use Commercially Reasonable
Efforts to resolve the matter in a manner
which will minimize the impact on such
rights or obligations of such party.
During each Contract Year, the parties
shall hold at least four (4) regular
meetings of the Steering Committee. Members
of the Steering Committee may
participate in meetings of the Steering
Committee in person or by conference
telephone call. At least one (1) of the
four (4) Steering Committee meetings
shall be conducted in-person. Employees of
each party who are not members of the
Steering Committee may attend meetings of
the Steering Committee as required.
In-person Steering Committee meetings shall
alternate between Orphan Medical's
designated facility and a facility
designated by Celltech. The co-chairpersons
of the Steering Committee shall alternate
responsibility for the preparation of
minutes setting forth discussions made at
each committee meeting, with the
Orphan Medical Chairperson preparing
minutes for the first Steering Committee
meeting; provided, however, that such
minutes shall not become official until
agreed upon by both co-chairpersons.
13
<PAGE>
ARTICLE IV.
ROYALTIES AND MILESTONE PAYMENTS
4.1 Milestone Payments. In consideration of the rights and
licenses
granted hereunder, Celltech shall pay to
Orphan Medical milestone payments
totaling $15,500,000 US Dollars according
to the following schedule:
(a) $2,500,000 US Dollars on the Effective Date.
$ * .
4.2 Royalty. (a) *
14
<PAGE>
*
4.4 Royalty and Milestone Payments. * .
15
<PAGE>
*
4.5 Exchange Rates. For purposes of determining the amount of Net
Sales
and the amount of royalties payable
pursuant to Section 4.2 during any calendar
quarter, the total of all sales in each
currency during such quarter shall be
converted into US Dollar currency at the
average daily exchange rate for such
calendar quarter as reported by oanda.com
or, if such website is not available,
the Wall Street Journal. For purposes of
determining the minimum royalty amount
for each Contract Year as provided in
Section 4.3, the amounts set forth therein
shall be converted into US dollar currency
at the average daily exchange rate
for such Contract Year as reported by
oanda.com or, if such website is not
available, The Wall Street Journal.
4.6 Taxes. Celltech shall be entitled to deduct from royalties
paid
hereunder the amount of any withholding
taxes or other taxes, levies or charges
required to be withheld by Celltech, to the
extent Celltech pays to the
appropriate governmental authority on
behalf, and for the account of, Orphan
Medical such taxes, levies or charges.
Celltech shall use reasonable efforts
(including making, or assisting Orphan
Medical in making, any relevant
application to any tax authority) to
minimize any such taxes, levies or charges
which are required to be withheld by
Celltech from royalties paid hereunder and
paid on behalf of Orphan Medical by
Celltech. Celltech shall promptly deliver to
Orphan Medical proof of payment of all such
taxes, levies and other charges,
together with copies of all communications
from or with such governmental
authority with respect thereto.
4.7 Reports. Each royalty payment made by Celltech hereunder shall
be
accompanied by a report showing all revenue
generated by sales of the Product to
Third Parties (including all sales by
Subdistributors and Sublicensees) during
the immediately preceding quarter, the
computation of Net Sales, and the
calculation of royalty payments due for
such quarter, all on a
country-by-country basis. If actual Net
Sales of any Subdistributor or
Sublicensee for that quarter is unavailable
at the time such quarterly report is
due, Celltech shall include in its report
for that quarter a good faith estimate
of such Net Sales, and an appropriate
adjustment for the difference between the
actual and estimated Net Sales shall be
made in the report for the following
quarter, with a corresponding adjustment in
the amount of royalties payable in
respect of that quarter.
4.8 Books and Records; Audit. Celltech shall keep for at least
three
(3) years or such longer period as may be
required by law following the end of
the calendar year to which they pertain,
accurate and complete records showing
all sales of the Product by Celltech and
its Subdistributors and Sublicensees.
Such records shall include all information
reasonably necessary to verify the
total amount and computation of earned
royalties hereunder, and shall be open to
inspection and audit, during reasonable
business hours, to the extent necessary
to verify the amount of such royalties.
Such inspection and audit shall be
conducted at the request and expense of
Orphan Medical by an independent
Certified Public Accountant appointed by
Orphan Medical. Such inspection and
audit shall be made not more often than
once in each Contract Year. Such
Certified Public Accountant shall undertake
a confidentiality obligation to
Celltech permitting it to disclose only to
Orphan Medical the amount of the
royalties due hereunder, and no other
information. Orphan Medical shall bear the
costs of any such inspection and audit;
provided that if any inspection and
audit reveals an underpayment of more than
five percent
16
<PAGE>
(5%), Celltech shall reimburse Orphan
Medical for its reasonable, documented
out-of-pocket costs for such inspection and
audit.
ARTICLE V.
REGULATORY COMPLIANCE; PRODUCT MANUFACTURE
5.1 Regulatory Reporting. Celltech shall timely file all
reports
relating to the Product required by the
Regulatory Authorities in each country
in the Territory and shall deliver a copy
of each such report in hardcopy and on
diskette, if available, to Orphan Medical
within thirty (30) calendar days of
making such report in accordance with laws
in the Territory regarding transfer
of data and confidentiality of patient
information.
5.2 Product Recalls. (a) Each party shall promptly notify the
other
party in the event of any recall, market
withdrawal or correction of Product
ordered by any Regulatory Authority,
whether in the Territory, the United
States, or anywhere in the world. The
parties shall cooperate in good faith to
handle and dispose of a recall, market
withdrawal or correction in the
Territory.
(b) Subject to Section 5.2(c) below, in the event of a recall,
market withdrawal or correction (i) by
reason of the failure of all or part of
the Product supplied by Orphan Medical to
meet the Product Specifications, any
requirement of the FDA or any Marketing
Authorization or other requirement of
applicable law that is not the result of
any action or omission of Celltech or
its Subdistributors or Sublicensees as
described in paragraph (c) below or (ii)
because Product that meets the Product
Specifications, by whomsoever
manufactured, is inherently defective,
unsafe, dangerous or may harm users of
the Product, Orphan Medical shall bear the
costs of such recall, market
withdrawal or correction (including without
limitation Celltech's reasonable
attorney's fees).
(c) In the event of a recall, market withdrawal or correction
by reason of the failure of Celltech to
have obtained or properly maintained or
complied with a Marketing Authorization or
as a result of Celltech's (or its
Subdistributors', Sublicensees' or Third
Party manufacturers') breach of any of
their obligations under this Agreement
(including without limitation Section
3.7), or the willful misconduct or
negligent acts or omissions of Celltech (or
its Subdistributors, Sublicensees' or Third
Party manufacturers'), Celltech
shall bear all costs of such recall, market
withdrawal, or correction (including
without limitation Orphan Medical's
reasonable attorneys' fees).
5.3 Adverse Event Notifications and Reporting. The exchange of
Adverse
Event reports relating to the Product
between the parties shall be made
according to the procedures in Appendix
D.
5.4 Correspondence/Complaints. (a) Celltech shall promptly
provide
Orphan Medical with copies of any material
regulatory correspondence with
respect to the Product in the Territory and
all related documentation,
information and other materials received or
prepared by Celltech, including, but
not limited to, copies of the proposed
applications for Marketing Authorization
prepared by or on behalf of Celltech for
Registration of the Products in the
Territory and any subsequent amendments,
supplements, or annual updates thereto.
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<PAGE>
(b) Celltech agrees to inform Orphan Medical in writing of all
significant complaints regarding the
Product that relate to Product
Specifications within fifteen (15) business
days after Celltech's receipt
thereof in all countries of the Territory.
Celltech shall also provide written
quarterly reports of all complaints
regarding the Product, regardless of
significance, in English, as well as the
actions taken by Celltech to address
all such complaints. Such reports shall be
delivered to Orphan Medical within
thirty (30) days after the end of each
calendar quarter during the Term.
5.5 Translations. Celltech shall provide Orphan Medical English
translations of any material regulatory
correspondence received in a language
other than the English language relating to
a Serious Adverse Event (as defined
in Appendix D). Furthermore, Celltech shall
provide to Orphan Medical copies of
translati
