Exhibit 10.10
DEVELOPMENT, MANUFACTURING AND SUPPLY AGREEMENT
This AGREEMENT (the "Agreement") dated as of June 28, 2005 (the
"Effective
Date") between Kensey Nash Corporation, a Delaware corporation,
having its
principal place of business at 55 East Uwchlan Avenue, Exton, PA
19341
(hereinafter referred to as "KNC") and BioMimetic Pharmaceuticals
Inc., a
Delaware corporation, having its principal place of business at 389
Nichol Mill
Lane, Franklin, TN 37067 (hereinafter referred to as "BMPI").
WHEREAS, KNC is a company engaged in the development, marketing and
sale of
medical devices for a wide variety of applications;
WHEREAS, KNC has expertise in developing and manufacturing
proprietary
biomaterials for medical applications and desires to develop
products with BMPI
under the terms of this Agreement;
WHEREAS, BMPI has rights in the Field to recombinant platelet
derived
growth factor ("PDGF", as further defined in Section 1.31)
Molecule(s)
(hereinafter referred to as the "Proprietary Molecule(s)") and
certain rights to
a proprietary tri calcium phosphate ("TCP"); and
WHEREAS, BMPI desires KNC to develop a delivery matrix and delivery
devices
utilizing BMPI's Proprietary Molecule(s) to be used in treatment of
musculoskeletal tissues including bones, cartilage, tendons and
ligaments, and
KNC desires to manufacture such products and sell them to BMPI and
BMPI desires
to distribute such products under the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual
covenants and agreements provided herein, the parties hereto,
intending to be
legally bound hereby, agree as follows:
1. DEFINITIONS
1.1. "Act" shall mean the Federal Food, Drug and Cosmetic Act.
1.2. "Approval(s)" shall mean receipt from the FDA or other
applicable
Regulatory Authority of final approval, including any applicable
pricing,
final labeling or reimbursement approvals, necessary to
manufacture, market
and sell a Commercial Product in a country of the Territory.
1.3. "Approved Commercial Product" shall have the meaning set forth
in Section
6.1 (e).
1.4. "BMPI Indemnified Party" shall have the meaning set forth in
Section 15.1.
1.5. "Claim(s)" shall mean all charges, complaints, actions, suits,
proceedings,
hearings, investigations, claims and demands.
1.6. "Commercial Product" shall mean any combination of Product and
PDGF for
distribution to the end user, whether by (a) inclusion in the same
package,
but not combined; (b) being sold separately but for use together in
combination; or (c) being sold as a combined formulation.
1.7. "Confidential Information" shall mean all oral or written
information that
is disclosed by either party (the "Disclosing Party") to the other
party
(the "Receiving Party"), or that the Receiving
CONFIDENTIAL
Party becomes aware of as a result of its discussions and work with
the
Disclosing Party, and that is not generally known to the public,
including
but not limited to, information of a technical nature such as trade
secrets; manufacturing processes or devices or know-how;
techniques, data,
formulas, inventions, discoveries or innovations (whether or not
patentable), specifications and characteristics of current products
or
products under development; research projects, methods and results;
matters
of a business nature such as information about costs, margins,
pricing
policies, markets, sales, suppliers and customers; product,
marketing or
strategic plans; financial information; personnel records and other
information of a similar nature, provided, however, that
Confidential
Information shall not include any information that (i) is or
becomes public
knowledge without breach of the Receiving Party's obligations
hereunder;
(ii) is rightfully acquired by the Receiving Party from a third
party that
legally acquired the information and is not under a confidentiality
restriction on disclosure or use; (iii) was already known to the
Receiving
Party prior to receipt from the Disclosing Party as evidenced by
written
and dated records; (iv) is independently developed by the Receiving
Party;
(v) is required to be disclosed by law or court order, provided
that notice
of the requirement is promptly delivered to the Disclosing Party in
order
to provide the Disclosing Party with an opportunity to challenge or
limit
the disclosure obligations; or (vi) is disclosed or used following
the
Receiving Party's receipt of express written consent from an
authorized
representative of the Disclosing Party. The Receiving Party shall
have the
burden of proof respecting any of the aforementioned events on
which the
Receiving Party relies as relieving it of any confidentiality
restrictions
hereunder. Written disclosures for which protection is sought must
be
obviously marked as "Confidential" or "Proprietary" and oral
disclosures
for which protection is sought must at the outset be clearly
identified by
the Disclosing Party as Confidential Information and submitted by
the
Disclosing Party in summary form to the Receiving Party, marked as
above
within thirty (30) days after disclosure; provided, however, that
protection under Article 9 shall also be given to information that
is not
so marked if a reasonable person trained in research, development,
manufacturing and marketing within the Field would assume that it
is
Confidential Information. For written information that would not
normally
appear to constitute confidential information, for the restrictions
on
Confidential Information to apply, a party must mark such
information
"CONFIDENTIAL."
1.8. "Costs of Doing Business" shall mean the usual, customary, and
reasonable
trade, cash or quantity discounts actually allowed and taken and
amounts
repaid, or credited by reason of rejections, defects, recalls and
returns.
1.9. "Design History File" shall have the meaning set forth in
Title 21 of the
US Code of Federal Regulations, Part 820.
1.10. "Development Plan" shall mean the plan for development and
approval by FDA
and other Regulatory Authorities of Commercial Products and
Products as
hereinafter defined, as set forth in Schedule A. The parties may
modify and
amend Schedule A from time to time throughout the Term as required
to
assure successful commercialization of the Commercial Products.
1.11. "Device Master File" shall mean materials that may be used to
provide
detailed information to the FDA about facilities, processes, or
articles
used in the manufacturing, processing, packaging, and storing of
the
Products or Material.
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1.12. "Disclosing Party" shall have the meaning set forth in
Section 1.7.
1.13. "Distributor" shall mean any entity designated by BMPI to
advertise,
promote, market, distribute and sell the Commercial Products.
1.14. "Evaluation Studies" shall have the meaning set forth in
Section 2.2.
1.15. "Feasibility Period" shall have the meaning set forth in
Section 2.2.
1.16. "FDA" shall have the meaning set forth in Section 3.7.
1.17. "Field" shall mean treatment of musculoskeletal indications
including,
bone, cartilage, tendons and ligaments of the skeletal tissue
system.
1.18. "First Commercial Sale" shall mean the first sale of Approved
Commercial
Product to an end user or hospital.
1.19. "Governmental Authority" shall mean any court, tribunal,
arbitrator,
agency, department, legislative body, commission or other
instrumentality
of (a) any government of any country, (b) any foreign, federal,
state,
county, city or other political subdivision thereof or (c) any
supranational body.
1.20. "Gross Sales" shall mean the amount invoiced by BMPI or any
agent,
affiliate, or distributor to any end user of Commercial Product in
the
United States, not to include any shipping costs or taxes; plus the
gross
revenues recognized by BMPI using generally accepted accounting
principals
(consistently applied) for sales of Commercial Product outside the
United
States.
1.21. "Initial Term" shall have the meaning set forth in Section
2.1.
1.22. "Injectable Products" **
1.23. "Intellectual Property" shall mean all inventions,
discoveries and
innovations (whether patentable or unpatentable and whether or not
reduced
to practice), all improvements thereto, and all patents, patent
rights,
patent applications and invention disclosures, together with all
reissues,
continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, all registered or unregistered trademarks,
trade
names and service marks, including all goodwill associated
therewith, and
copyrights, and all applications and registrations for any of the
foregoing
owned or controlled by or issued to BMPI or KNC, and any trade
secrets and
know-how, in each case relating to the Commercial Products in the
Field in
the Territory.
1.24. "KNC Indemnified Party" shall have the meaning set forth in
Section 15.2.
1.25. "Letter of Reference" shall mean a letter addressed to the
FDA authorizing
BMPI to reference KNC's Master File for support in regulatory
filing for
Commercial Product.
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**
REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED
WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
1.26. "Losses" shall mean any and all damages, awards,
deficiencies, settlement
amounts, defaults, assessments, fines, dues, penalties, costs,
fees,
liabilities, obligations, taxes, liens, losses, and expenses
(including
without limitation court costs, interest and reasonable fees of
attorneys,
accountants and other experts) incurred by or awarded to third
parties and
required to be paid to third parties with respect to a Claim by
reason of
any judgment, order, decree, stipulation or injunction, or any
settlement
subject to the indemnification provisions of this Agreement,
together with
all documented out-of-pocket costs and expenses incurred in
complying with
any judgments, orders, decrees, stipulations and injunctions that
arise
from or relate to a Claim of a third party.
1.27. "Material" shall mean a KNC-developed proprietary collagenous
biomaterial
whose collagen component contains solely bovine closed-herd
collagen in
compliance with the specifications set forth in Schedule B.
1.28. "MDR" shall have the meaning set forth in Section 4.5(h).
1.29. "Net Sales Price" shall **
1.30. "Net Sales" shall mean Gross Sales of Commercial Product less
any Costs of
Doing Business.
1.31. "PDGF" shall mean a PDGF molecule comprised of two chains
connected by
disulfide bonds with each of these chains consisting of one of the
following forms of PDGF: PDGF-A; PDGF-B; PDGF-C; or PDGF-D.
1.32. "Post Term Supply" shall have the meaning set forth in
Section 2.1.
1.33. "Product Drawing" shall mean a drawing illustrating or
defining the
packaging configuration and related details for any Commercial
Product.
1.34. "Product Specifications" shall mean the specifications
detailing the
various Products, as shown in Schedule C.
1.35. "Product Warranties" shall have the meaning set forth in
Section 11.1.
1.36. "Product(s)" shall mean the Injectable Products, Putty
Products and the
Sheet Products.
1.37. "Proprietary Molecule(s)" shall have the meaning set forth
above in the
preamble.
1.38. "Purchase Orders" shall have the meaning set forth in Section
5.3.
1.39. "Putty Products" **
1.40. "Purchase Commitment" shall have the meaning set forth in
Section 4.5(e).
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**
REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED
WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
1.41. "QSR" shall mean the Quality System Regulation promulgated by
the FDA
under the Act or other applicable regulatory agencies of countries
in which
the Commercial Product will be sold as of the time of manufacture
of the
applicable Commercial Products; including ISO 13485, the European
Union
Council Medical Device Directives (the "EU Medical Device
Directives"), and
the Quality System Regulations as described in 21 CFR Part 820.
1.42. "Receiving Party" shall have the meaning set forth in Section
1.7.
1.43. "Regulatory Authority" shall mean an authority or authorities
designated
or otherwise recognized by a government for regulatory purposes in
connection with protection and safety of the public health (e.g.,
FDA,
Notified Bodies, Health Canada, EMEA) in any country where
Commercial
Product is to be sold.
1.44. "Renewal Term" shall have the meaning set forth in Section
2.1.
1.45. "Rolling Forecast" shall have the meaning set forth in
Section 4.5(e) and
shall resemble the example in Schedule E.
1.46. "Royalty" shall have the meaning set forth in Section 6.2.
1.47. "Sheet Products" shall mean the sheet form carrier made from
the Sheet
Technology which may incorporate BMPI's TCP, as set forth in the
Product
Specifications in Schedule C.
1.48. "Sheet Technology" shall mean **
1.49. "Submission" shall have the meaning set forth in Section 3.6.
1.50. "Term" shall have the meaning set forth in Section 2.1.
1.51. "Territory" shall mean worldwide.
1.52. "Transfer Price" shall mean the price paid by BMPI to KNC for
the Product,
as set forth in Section 5.1 hereof.
1.53. "USPTO" shall mean the United States Patent and Trademark
Office.
2. TERM
2.1
Term. This Agreement shall commence on the Effective Date and,
unless
earlier terminated as provided herein, continue for ten (10) years
from the
date of BMPI's First Commercial Sale of the Commercial Products
(the
"Initial Term"). The Initial Term shall be automatically extended
for two
(2) additional two (2) year terms (the "Renewal Terms"), unless
written
notice of any party's intention not to extend is provided by either
party
at least twelve (12) months prior to the expiration of the Initial
Term or
a Renewal Term (the Initial Term and the Renewal Terms are
collectively
referred to as the "Term"); however, should any such notice of
non-renewal
be given by KNC, KNC shall supply Product(s) for an additional
twelve (12)
months following the expiration of the then
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**
REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED
WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
current Term (the "Post Term Supply"). Notwithstanding the
foregoing, if
the First Commercial Sale has not occurred within seven (7) years
of the
Effective Date, the Agreement will automatically terminate unless
otherwise
agreed to by the parties in writing.
2.2
Feasibility Period. Notwithstanding the foregoing Section 2.1,
during the
period commencing on the Effective Date and continuing until
December 31,
2005 or until the specified tests are completed and assessed,
whichever is
earlier, (the "Feasibility Period"); BMPI will evaluate the
suitability of
the Putty Products and/or Injectable Products to produce Commercial
Products. Such evaluation will consist of the following studies
(the
"Evaluation Studies"):
a.
Efficacy Study: wherein the success criteria is defined as
evidenced by "enhanced regeneration of bone" in at least one of
the following studies:
o
Rat Fracture Model: 5 week duration with evaluation of
success by one or more of the following tests: micro CT,
Histology or biomechanical tests.
o
Rabbit Distal Femoral Condyle Implantation Study, where
evaluation of success will be measured by one or more of the
following tests: micro CT or histology (it is contemplated
that this study may be changed to a more beneficial study,
with corresponding endpoints, any such change must be agreed
to by both parties).
o
Distraction Osteogenesis Study, where evaluation of success
will be measured by radiographic and histologic analysis.
b.
In Vitro Elution Study: wherein the success criteria are defined
as release of the PDGF in a profile of twenty-five (25) to
seventy (70) percent release within seven days, and greater than
ninety percent (90%) within thirty (30) days.
c.
Manufacturing Capability Verification and Development Material
Acceptability - where BMPI will review KNC's ability to
manufacture contemplated Products in accordance with applicable
QSR, and forecasted capacity requirements. Moreover, all
developmental studies shall be performed with Materials that are
representative of those to be used in Commercial Product and BMPI
shall have the opportunity to review such information, with such
review to include a physical audit of KNC, pursuant to the
commercial audit process as prescribed in Section 7.8 of this
Agreement.
d.
In-Vitro Cell Culture Analysis, wherein the success criteria are
defined as the ability of osteoblast cells to grow on the
Material, and the demonstrated release of biologically active
PDGF from the Material as measured by the stimulation of cell
replication.
e.
Injectability, **
At the conclusion of the Feasibility Period or Evaluation Studies,
whichever occurs first, the parties will determine whether the
Products are
likely to be used successfully in combination with PDGF.
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**
REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED
WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
If the parties determine that the Development Plan and Products are
capable
of producing Commercial Products by meeting at least one of the
defined
success criteria under Section 2.2(a) and the success criteria of
Sections
2.2(b), 2.2(d), and 2.2(e), and the Criteria of Section 2.2(c),
this
Agreement shall continue in full force and effect according to its
terms
and conditions; otherwise, either party shall have the right, but
not the
obligation, to terminate this Agreement.
3. DEVELOPMENT PROGRAM
3.1
Development Roles. Subject to the terms of this Agreement, KNC
agrees, in
consultation with BMPI, to work in good faith to develop the
Products in
accordance with a Development Plan to be agreed to by the parties
and as
incorporated as Schedule A. KNC and BMPI will jointly define the
Commercial
Products' specifications to meet market requirements. KNC will
conduct
engineering, research and development, and manufacturing of
Products **.
BMPI will advise and provide feedback on product development
progress,
including medical input to provide assistance in the definition of
the
end-user product requirements and marketing specifications. The
parties
shall confer to update the Development Plan, as necessary,
regarding the
on-going exchange of proprietary information, the resources to be
devoted
to the development of the Commercial Products, scheduling of
meetings,
estimated development timetables, milestones, testing of
prototypes, and
timing of deliverables. Except as otherwise set forth herein or in
the
Development Plan, each party shall pay its own expenses incurred in
performing its obligations under the Development Plan.
3.2
Design Review and Design Control. BMPI is developing, for
regulatory
purposes, products termed by the US FDA as 'combination products'.
The
responsibilities for Design Review and Design Control are shared
responsibilities between Development and Commercialization programs
and
activities. For regulatory purposes, BMPI shall maintain overall
responsibility for the Design History Files of all Commercial
Products. KNC
agrees, in consultation with BMPI, to provide the necessary studies
to
support the Design History File subject to Section 3.6.
3.3
Project Leader. Each party shall appoint a Project Leader who shall
be
responsible for the day-to-day development efforts being conducted
under
this Agreement as set forth in the Development Plan. The Project
Leader for
each party shall be responsible for ensuring that the programmatic,
technical, reporting, financial, and administrative
responsibilities for
the party are performed in compliance with this Agreement and shall
participate as necessary to facilitate the integration of the
efforts being
conducted.
3.4
Efforts. Each party will use commercially reasonable efforts, and
will
devote sufficient time, attention and qualified personnel, to meet
the
delivery dates for any deliverables and other matters agreed to in
the
Development Plan in accordance with this Agreement. The parties
will
provide each other with such technical support relating to the
development
of the Commercial Products as reasonably necessary for the parties
to
develop the Commercial Products. The parties acknowledge that in
connection
with the development of the Commercial Products, each of the
parties may
need access to certain Confidential Information of the other party
that
will be subject to the confidentiality provisions set forth in
Article 9
hereof. Each party agrees to notify the other promptly of any
factor,
occurrence, or event coming to its attention that may affect that
party's
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**
REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED
WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
ability to meet the requirements of the Development Plan or the
development
program generally, or that is likely to cause any material delay in
the
delivery of deliverables.
3.5
Personnel and Resource Commitment. During the course of the
development
program, each party will commit an appropriate amount of personnel
and
other resources as reasonably necessary to meet the requirements of
the
Development Plan. During the course of the Development Program,
representatives of the parties shall meet at times and places
mutually
agreed upon to discuss the progress and results as well as any
ongoing
plans or changes to the Development Plan.
3.6
Sharing of Data. KNC shall provide BMPI with sufficient data and
information as specified by BMPI to support regulatory submissions
and
correspondence to all regulatory authorities relating to the
Commercial
Product or the development program, provided, however, that prior
to
sharing such data, KNC may redact the proprietary manufacturing
information
related to its respective proprietary materials and processes. To
the
extent that such redacted information is required by such
authority, KNC
may submit the information directly to said authority. In such
cases KNC
will provide BMPI with a Letter of Reference for the filed
information.
Each party agrees to provide the other with copies of all
abstracts,
presentations, journal manuscripts and related materials relating
to the
development program intended for publication ("Submission") at
least thirty
(30) days prior to the proposed date for presenting the Submission
to a
third party, for review and comment. Each party agrees to delete
specific
portions of Submissions that consist of Confidential Information of
the
other party or are otherwise necessary to protect the patentability
of such
disclosure. Upon review of the Submission, the receiving party will
have
the option to extend the timing of the Submission for up to an
additional
sixty (60) days to allow for filing of patents or other documents
necessary
to protect intellectual property that would be disclosed as a
result of the
Submission.
3.7
Regulatory Approval of the Commercial Products. BMPI shall have
primary
responsibility for obtaining all necessary U.S. and foreign
Approvals for
the Commercial Products for use, sale, marketing and distribution,
including the performance of animal trials. If human clinical
trials are
necessary to obtain Approval, BMPI shall manage the study and KNC
shall
provide the Product at its expense. Without limiting the generality
of the
foregoing, BMPI shall make all necessary submissions in the U.S.
with the
United States Federal Food and Drug Administration, any successor
agency
thereto ("FDA") and all other Regulatory Authorities under the BMPI
name.
BMPI shall provide to KNC copies of any written communications to
or from
the FDA or other Regulatory Authority specific to KNC's Device
Master File
or other document filed with such Regulatory Authority by KNC,
promptly
after any such communications are sent or received, and redacted of
any
proprietary information. In the event FDA or other Regulatory
Authority
requests additional information from BMPI specific to a KNC filing
for a
Commercial Product or Product, BMPI shall advise KNC of the
estimated date
by which it will respond to such request, and the date that the
response is
submitted. KNC will cooperate with BMPI to the extent KNC's
participation
is reasonably necessary or appropriate in order for BMPI to procure
such
Approval. Without limiting the generality of the foregoing, KNC
will make
available to BMPI, without charge, tangible written information in
KNC's
possession and control that is required to prepare a submission for
Approval, as BMPI may reasonably request, and as is reasonably
necessary to
obtain Approval. All information provided by KNC hereunder shall be
presented in a form which satisfies the requirements of applicable
FDA and
other Regulatory Authority guidelines and/or regulations for such
types of
submissions seeking Approval. Notwithstanding the foregoing, in the
case of
sensitive
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confidential or proprietary manufacturing or other information in a
Device
Master File or comparable document, KNC may instead agree to
provide such
information directly to the FDA or other applicable regulatory
body, as the
case may be, or to an independent third party agent of its choosing
which
is reasonably acceptable to BMPI, and shall respond directly (or
through
its independent agent) to any questions or inquiries from such
agency or
body regarding the information. KNC shall provide to BMPI copies of
any
written communications to or from the FDA or other Regulatory
Authority,
and notify BMPI of any oral communications with the FDA or other
Regulatory
Authority, relating to a Device Master File or other document filed
with
such Regulatory Authority, promptly after any such communications
are sent
or received, and redacted of any proprietary information. In the
event FDA
or other Regulatory Authority requests additional information from
KNC, KNC
shall advise BMPI of the estimated date by which it will respond to
such
request, and the date that the response is submitted. In addition,
KNC
shall have no duty to disclose any of its proprietary information
to any
Regulatory Authority or any other party, unless the Regulatory
Authority in
question provides for the protection of such proprietary
information from
disclosure in a manner substantially similar to that provided by
the FDA.
3.8
Additional Products. From time to time, the parties may agree to
jointly
develop additional Product configurations to be used in future
Commercial
Products. In such event, the parties shall update the Development
Plan or
execute an addendum to this Agreement. Such update or addendum
shall
describe the additional Commercial Product configurations and the
modifications to the Development Plan required to support the
development
of such additional Product and Commercial Product configurations.
4. COMMERCIALIZATION AND SUPPLY
4.1
BMPI shall have the exclusive right to distribute and sell the
Commercial
Products in the Territory during the Term of this Agreement and any
Post
Term Supply period as described in Section 2.1. Except as provided
in
Section 14.4, KNC shall be the exclusive manufacturer and supplier
of the
Products in the Territory during the Term of this Agreement.
4.2
The parties acknowledge that KNC maintains a biomaterials business
and
supplies products to companies that manufacture and/or develop
products
that may compete with the Commercial Products. The parties
acknowledge that
BMPI maintains a broad regenerative medicine business and performs
work
with suppliers of other biomaterials based products that may
compete with
the Products or Commercial Products. Subject to the limitations on
use of
the joint Intellectual Property set forth in Article 8 and
exclusive rights
set forth in Section 4.1 herein, nothing in this Agreement shall
preclude
KNC or BMPI from continuing to conduct such business during the
Term of
this Agreement, or thereafter.
4.3
BMPI may use Distributors in the commercialization of the
Commercial
Products, provided that BMPI shall be responsible for monitoring
such
Distributors, so that the terms of this Agreement are met.
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4.4
KNC agrees to:
a.
use best efforts to ensure that the Product will be manufactured,
packaged, labeled, and stored in accordance with the QSR.
b.
use commercially reasonable best efforts to supply BMPI with
BMPIs projected Rolling Forecast requirements (pursuant to
Subsection 4.5(e)) of Product;
c.
use commercially reasonable best efforts to deliver Product
hereunder on the scheduled delivery dates as set forth in the
relevant Purchase Orders described in Section 5.3; provided,
however, it will not be considered a breach of this Agreement if
at least 85% of a delivery which conforms to Product
Specifications is made within sixty (60) days following the date
originally agreed upon for delivery. Any shortage greater than
ten percent (10%) made against an accepted Purchase Order will be
delivered as soon as is practicable.
d.
supply BMPI with Product manufactured in material compliance with
QSR's;
e.
obtain written approval from BMPI prior to implementing any
changes to the Product manufacturing process, raw materials,
testing, systems, equipment, procedures, software, or facilities
if Section 4.4(j) herein is invoked, otherwise written approval
shall be requested for changes which, in KNC's reasonable
judgment may impact safety, quality, or effectiveness of
Commercial Product, which approval shall not be unreasonably
withheld, conditioned or delayed; if an MDR reportable event, as
described in CFR Part 803, to a patient treated with the
Commercial Product is found to be the result of a change in the
processes used by KNC for the manufacture of the Product, or
Commercial Product produced by KNC, and the change was not
pre-approved by BMPI prior to implementation, then the
indemnification provided by BMPI as described in Section 15.2
(ii) to KNC shall not apply to such event;
f.
obtain written approval from BMPI prior to implementing changes
to Product Drawings or Product Specifications;
g.
investigate diligently, at BMPIs request, complaints or adverse
events which relate to manufacture, sterilization, or packaging
issues, and report back to BMPI within seventy-two (72) hours of
being notified by BMPI of a MDR reportable events, or within ten
(10) days of being notified of any other complaint;
h.
provide to BMPI any complaints KNC receives relating to the
Product or Commercial Product, including notice of any adverse
events within three business days of their receipt;
i.
KNC will **, except as noted in Section 4.5(j); and
j.
to follow cGMP regulations as described in 21 CFR Part 211 as it
relates to the manufacture and supply of the Products, provided
that, and for any Product component where the FDA specifically
directs that such regulations must be implemented by KNC with
respect to the Product component of the Commercial Products, or
in the event that
10
**
REPRESENTS MATERIAL WHICH HAS BEEN REDACTED AND SEPARATELY FILED
WITH THE
SECURITIES AND EXCHANGE COMMISSION PURSUANT TO A REQUEST FOR
CONFIDENTIAL
TREATMENT PURSUANT TO RULE 406 UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
KNC agrees to take on any handling of the PDGF such that these
regulations are required to be implemented by the FDA.
4.5
BMPI agrees to:
a.
timely provide KNC, at no charge, with sufficient amounts of
BMPI's TCP, and any required Proprietary Molecule(s), in order to
enable KNC to satisfy its manufacturing and delivery obligations
with respect to the Products;
b.
commercialize the Commercial Product in the United States within
twelve (12) months from the time of receipt of Approval in the
United States;
c.
market and sell the Commercial Product in the Field only for the
indication approved on the Commercial Product labeling;
d.
be solely responsible for the cost and implementation of all
marketing, sales, promotional and related activities concerning
the marketing, sale and promotion of the Commercial Products in
the Territory;
e.
provide KNC with rolling twelve (12) month forecasts of BMPI's
requirements of Product ("Rolling Forecast"), inclusive of
quantities of samples and demo materials to be purchased by BMPI.
Such forecasts shall be prepared in good faith and provided on a
monthly basis. The first three months of any twelve month Rolling
Forecast shall be accompanied by firm Purchase Orders to purchase
Product and shall be considered a purchase commitment ("Purchase
Commitment") and each subsequent Rolling Forecast's Purchase
Commitment shall not exceed the prior Purchase Commitment by more
than twenty five (25) percent. The final 9 months of any Rolling
Forecast (which do not constitute a "Purchase Commitment") may
not increase by more than twenty-five percent (25%) cumulatively.
An example of the maximum increase in forecast is attached as
Schedule E, for purposes of illustration only. BMPI may at any
time cancel all or any portion of any Purchase Commitment,
provided that BMPI reimburses KNC for inventory costs as required
under Section 4.5(f), which shall be KNC's sole remedy for BMPI's
cancellation.
f.
reimburse KNC for any and all unrecovered inventory costs of raw
materials, components, and finished Product, should any such
inventory become obsolete or unusable in the manufacture of
Product (a) within a four month period subsequent to a Purchase
Order reduced by fifty (50%) percent or more or a cancelled
Purchase Order by BMPI, (b) in the event quantities of Product
under Purchase Orders provided by BMPI are less than fifty
percent (50%) of any Rolling Forecast for any three month period,
or (c) if such inventory becomes obsolete due to changes in
processing and/or Product Specifications caused solely by BMPI;
provided however that (i) should such changes in processing
and/or Product Specifications be the result of changes initiated
or necessitated by KNC, KNC shall not be reimbursed by BMPI, (ii)
KNC will attempt to minimize any losses associated with such
obsolete or unusable inventory, and (iii) KNC will reduce the
Transfer Price of any Product provided to BMPI that contains
inventory for which KNC has been reimbursed per
11
this Section 4.5(f), (iv) KNC raw material inventory and
purchases of same and its production scheduling shall be
consistent with the requirements of such Rolling Forecast;
g.
be solely responsible for the cost of any Commercial Product and
Product redesign, which varies from the Product Specification
established prior to the First Commercial Sale. If a Product
redesign following the First Commercial Sale results in material
and labor costs either higher or lower from what is anticipated
in the Product Specification as established prior thereto,
Transfer Prices of the redesigned Product shall be adjusted
accordingly, provided, however, if any such redesign resulting in
higher costs is necessitated solely by KNC, all associated costs
will be born by KNC;
h.
investigate diligently all adverse events of which BMPI has
knowledge or awareness, related to any application which
incorporates Commercial Product, and promptly report such
occurrences to KNC. BMPI shall be responsible for the cost and
execution of all medical device reporting ("MDR") in accordance
with 21 CFR Part 803 and all vigilance reporting required in the
markets where Commercial Products are sold;
i.
provide to KNC any complaints BMPI receives relating to the
Commercial Product, including notice of any adverse events,
within three business days of their receipt;
j.
fund sterilization validations where: (1) Product manufactured
and sterilized by KNC contains PDGF as a component of the final
manufacturing process; or (2) the sterilization validation
requirements include the sterilization by KNC of the PDGF or
packaging materials directly in contact with the PDGF. Such
funding shall include the cost of follow-up audits and shipping
studies required by a Regulatory Authority of any final Product
configuration., In addition, such funding shall be subject to
separate negotiation between the parties, regarding the price,
responsibility, and extent thereof;
k.
except as otherwise set forth herein, be solely responsible for
all necessary Approvals to market the Commercial Products
including any re-approvals required due to, among other things,
drawing and specification changes; and
1.
include reference to KNC's role as the manufacturer and developer
on all packaging of Products and Commercial Products and any
marketing materials related thereto, in form and substance
reasonably acceptable to KNC and consistent with applicable
regulatory requirements.
12
5. ORDERING, PRICE AND PAYMENTS
5.1
Initial Transfer Price. BMPI shall pay the Transfer Price listed in
Schedule D for each Product, for the Commercial Products developed
under
the Development Plan. Notwithstanding the foregoing, Product
forecasted in
advance and specified for use as **. No royalty payments as
described in
Section 6.2 will be due on materials provided for use as
demonstration,
training, or non-saleable samples.
5.2
Transfer Price Adjustment. Except as provided in 4.5(g), the
Transfer
Prices may be adjusted from time to time throughout the Term of the
Agreement for factors such as, but not limited to, changes in raw
material
costs, labor costs, regulatory costs, or product liability costs.,
However,
such adjustment shall not exceed, unless otherwise agreed, the
consumer
price index for the Philadelphia metropolitan area, as published by
the
U.S. Department of Labor, Bureau of Labor Statistics. If price
adjustments
are related to changes in the Product Specifica
